BCom In Accounting & Finance (BCAF) SEM V 2022 2023 Aug 2023 FINANCIAL ACCOUNTING V Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 A. Choose the correct alternative and rewrite the statements.(Any Eight) 8 marks
   • 1. When all the shares are underwritten by the underwriters, it is called
   • a. Firm underwriting
   • b. Partial underwriting
   • c. Complete underwriting
   • d. None of the above
   • 2. Equity Shares can be bought back
   • a. out of profits only
   • b. out of proceeds of fresh issue only
   • c. out of capital profit only
   • d. its free reserves; or the securities premium account; or the proceeds of
   • 3. to Companies Act the underwriting commission on shares should
   • a. 5 per cent
   • b. 2.5 percent
   • c. 10 percent
   • d. 1 percent If the business of an existing company BKC Ltd. is taken over by an existing company PQR Ltd., it is called
   • a. external reconstruction
   • b. internal reconstruction
   • c. absorption
   • d. amalgamation
   • 5. may purchase its own shares out of
   • a. Its free reserve only
   • b. The securities premium account only
   • c. the proceeds of any shares only
   • d. any or all of the above
   • 6. Surrender of fully paid up shares amounts to
   • a. Reduction of Share Capital
   • b. Alteration of Share Capital
   • c. Variation of Shareholders Rights
   • d. Compromise or Arrangement
   • 7. Accounting for amalgamation by way of merger is governed by
   • a. Accounting Standard 1
   • b. Accounting Standard 13
   • c. Accounting Standard 14
   • d. None of the above
   • 8. Amount of in Advance is treated as
   • a. Secured Creditors
   • b. Assets not specifically pledged
   • c. Preferential Creditors
   • d. Unsecured Creditors
   • 9. Acontributory is a
   • a. Unsecured creditors
   • b. Preferential creditors
   • c. Shareholder
   • d. Debenture holder
   • 10. In internal Reconstruction
   • a. No Company is Liquidated
   • b. only one company goes into Liquidation
   • c. two or more companies are Liquidated
   • d. One or more companies go into Liquidation
   • B. State whether the following is True or False: (Any Seven) 7
   • 1. Market applications are also known as Direct Applications
   • 2. Absorption is said to take place when an existing company takes over one or more existing companies
   • 3. is allowed to convert its fully paid shares into stock
   • 4. The balance in security premium account cannot be transferred to capital
   • 5. In statement of affairs, payment to debenture holders is shown after the payment to preferential creditors
   • 6. Capital reserve arises only when the amalgamation is in the nature of
   • 7. Where completes a buy-back of its share, it shall not make a rights issue of the same kind of shares within a period of six months
   • 8. A contributory can only be a present member of the liquidated company
   • 9. Capital redemption reserve account can be utilized for issuing partly
   • 10. The underwriting commission is payable in cash
2. Q2 The following is the summary Balance Sheet of Rupa Ltd: Statutory Reserves(to be | 20,000 Fixed Assets maintained for 3 more Roop Ltd. absorb Rupa Ltd. on the following terms: 15 marks
   • 1) Roop Ltd. agreed to take over all the assets and liabilities
   • 2) The assets of Rupa Ltd. are to be considered to be worth Rs. 10,00,000
   • 3) The purchase price is to be paid one quarter in cash and the balance in shares which are issued at the market price
   • 4) Liquidation expenses amounted to Rs. 600 agreed to be paid by Rupa
   • 5) Market value of share of Rs.10 each of Roop Ltd. is Rs. 12 per share
   • 6) Debentures of Rupa Ltd. were paid
   • 7) The amalgamation is in the nature of purchase You are required to show:
   • a) Purchase Consideration
   • b) Ledger accounts in the books of Rupa Ltd
   • c) Opening entries in the books of Roop Ltd
3. Q2 B. Following are the Summary Balance Sheets of S Ltd. and H Ltd. Balance Sheet as on March, 2017 Capital of Rs Z Ltd. was formed to acquire all assets and liabilities of S Ltd. and H Ltd. on the following terms: 15 marks
   • 1) Z Ltd. to have an authorized share capital of Rs. 50 lakhs divided into 50,000 equity shares of Rs. 100 each
   • 2) The businesses of both the companies were taken over for a total price of Rs. 12 lakhs to be discharged by Z Ltd. by issue of equity shares of Rs.100 each at a premium of 20%
   • 3) The Shareholders of S Ltd. and H Ltd. to get shares in Z Ltd. in the ratio of net assets values of their respective shares
   • 4) The debentures of both the companies to be converted into equivalent number of 14% Debentures of Rs.100 each in Z Ltd. at a
   • 5) All the tangible assets of both the companies are taken over by Z Ltd. at book values except the following:
   • 6) Sundry Creditors of S Ltd. and H Ltd. are taken over at Rs. 65,000 and Rs. 50,000 respectively
   • 7) Statutory Reserves are to be maintained for 3 years more You are required to:
   • 1) Compute purchase Consideration of S Ltd. and H Ltd
   • 2) Pass journal entries in the books of Z Ltd
4. Q3 A. The following is the Balance Sheet of Anjali Ltd. which is in the hand of Balance Sheet as at 31-12-2017 shares of Rs.100 each, 2,000 Equity Shares of 1,50,000 | Cash 40,000 security of stock) The assets realized the following amounts (after all costs of realization and liquidators remuneration amounting to Rs.5,000 paid out of cash in hand Rs.40,000 as per Balance Sheet): Calls on partly paid shares were made but the amount due on 200 shares was found to be irrecoverable Prepare the Liquidators Final Statement of Account 15 marks
5. Q3 B. Following is the Summary Balance Sheet of Hetal Ltd.as on March, 2018. each fully paid Building Preference Shares of Rs.100 each fully paid 10,000 interest due on Bank Preference dividend is in arrears for five years. Following scheme of reconstruction was approved by the court 15 marks
   • 1) Equity shares be reduced to Rs. 1.25 each and then to be consolidated into shares of Rs.10 each
   • 2) 6% Preference Shares be reduced to Rs. 40 each and then to be subdivided into shares of Rs. 10 each
   • 3) Interest accrued but not due on 8% Debentures for half year ended 31“ March 2018 has not been provided in the above balance sheet. The debenture holders have agreed to receive 40% of this interest in cash immediately and provision for the balance be made in the books of
   • 4) Rs. 12,000 be paid to Preference Shareholders in lieu of arrears of
   • 5) The debenture holders have also agreed to accept equal number of 9% debentures of Rs.60 each in exchange of 8% debentures of Rs. 100
   • 6) Bank has agreed to take over 50% of stock in full settlement of its claim including interest. The remaining stock be revalued at
   • 7) Investments be sold for Rs. 20,000
   • 8) Tangible fixed assets be appreciated by 20%. Goodwill be written off in full and provision be made for doubtful debts of Rs.10,000 Give journal entries for the above scheme of reconstruction (without narration), prepare Capital Reduction Account in the books of Hetal Ltd and Balance Sheet of the company after reconstruction
6. Q4 A_ Following is the Balance Sheet of M/s Amey Ltd. (a non-listed company) of Rs. 100 each Preference Shares of It was decided to buy back maximum number of Equity shares at the maximum price possible under the law. Temporary bank overdraft was arranged in case of shortage of funds You are required to: 15 marks
   • 1) Ascertain maximum number of equity shares that company can buy
   • 2) Maximum price that the company can offer
   • 3) Pass journal entries in the books of M/s Amey Ltd
   • 4) Prepare Balance Sheet of M/s Amey Ltd. after buy back
   • B. Samikanth Ltd. made a public issue of Rs.5,00,000 Equity shares of Rs. 10 each, the entire amount payable on application. The entire issue was underwritten as follows: A -30%, B— 25%, C- 25% and D - 20% of the public issue respectively. A, B, C and D has also agreed on firm underwriting of 16,000; 24,000; Nil and 60,000 shares respectively. The total subscriptions excluding from underwriting, including marked applications were 3,60,000 shares. The marked applications received were as under: Underwriter No. of Shares Ascertain the net liability of each underwriter 15
7. Q5 What are the contents of “Liquidator’s Statement of Accounts”? How Frequently does a liquidator has to submit such statement? distinguish between internal reconstruction and external 07 8 marks
8. Q5 Write Short Notes (Any Three) 15 marks
   • a) Preferential Creditors
   • b) Method of Internal Reconstruction
   • d) Benefits of Buy-Back
   • e) Firms Undertaking

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