BCom In Accounting & Finance (BCAF) SEM V 2023 2024 Dec 2024 FINANCIAL ACCOUNTING V Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 (A) Rewrite the sentence after selecting the correct alternative. (any 8) 8 marks
   • 1) When an underwriter agrees to buy a definite number of shares in addition to unsubscribed shares, it is termed as
   • a) Partial Underwriting
   • b) Complete underwriting
   • c) Firm underwriting
   • d) Full underwriting
   • 2) Unmarked applications refer to
   • a) Firm underwriting
   • b) Applications issued by the company
   • c) Applications bearing the stamp of underwriter
   • d) Applications from the public received directly by the company without bearing any stamp of
   • 3) Which of the following is not a 'free for the purpose of buyback of shares?
   • b) General Reserve
   • d) Revaluation Reserve
   • 4) Generally, the amount of buyback should be less than. of the total paid up capital and free reserves (including securities premium account) of the company
   • 5) When the merger involves liquidation of one existing sick company and formation of one new company, it is called
   • a) Internal Reconstruction
   • b) External Reconstruction
   • c) Absorption
   • d) Amalgamation
   • 6) is not taken into consideration under the NET ASSETS Method for
   • a) Furniture
   • b) Machinery
   • c) Building
   • 7) Balance in capital reduction account is generally transferred to
   • a) General Reserve
   • b) Capital Reserve
   • c) Profit & Loss A/c
   • d) Surplus and Reserve A/c
   • 8) Reduction of share capital of a company means reduction in
   • b) Subscribed and/or paid-up share capital
   • 9) shows deficiency or surplus A/c
   • a) List A
   • b) List B
   • d) List H
   • 10) Interest on debentures and unsecured loan is payable upto the date of actual payment
   • a) Ifthe company is solvent
   • b) If the company is insolvent
   • c) Whether the company is solvent or insolvent
   • d) None of the above
2. Q1 (B) State whether the following statements are true or false :( any7) 7 marks
   • 1) Unmarked applications can be distributed among the underwriters in the ratio of gross liability
   • 2) The underwriters may be individuals, partnership firms or joint stock companies
   • 3) Buyback of shares decreases the Earning Per Share (EPS) of the company
   • 4) If equity shares have been bought back out of security premium, there is no need to make any transfer to Capital Redemption Reserve
   • 5) Transferor Company means the company that has been amalgamated into another company
   • 6) Absorption is said to take place when an existing company takes over one or more existing
   • 8) In the scheme of reconstruction, the amount of shares surrendered by shareholders is transferred to the Capital Reduction Account
   • 9) In the statement of affairs, uncalled capital is to be included under Assets
   • 10) If the remuneration to liquidator is payable on distribution, distribution to preferential creditors
3. Q2 (A) Wally Ltd. agreed to acquire the business of Wonka Ltd. as on 31st March, 2023. The summary Balance Sheet of Wonka Ltd. as on that date was as under: 6,000 equity shares of Rs. 10 each fully paid 60,000 Profit and Loss Account 11,000 34,000 6% Debentures of Rs. 100 10,000 | Stock 16,800 The considerations payable by Wally Ltd. was agreed at as follows: 15 marks
   • a) Cash payment Rs. 2.50 for every share in Wonka Ltd
   • b) Issue of 9,000 equity shares of Rs. 10 each of Wally Ltd. having an agreed value of Rs. 15 per
   • c) 6% Debentures of Wonka Ltd. are discharged by Wally Ltd. by issuing such number of its 5% debentures of Rs. 100 each, so as to maintain the same amount of interest While computing purchase consideration, Wally Ltd. valued building and machinery at Rs. 60,000 each, stock at Rs. 14,200 and Book Debts subject to 5% provision for discount. The cost of liquidation
   • 2) Prepare necessary ledger accounts in the books of Wonka Ltd
   • 3) Journalise the transactions in the books of Wally Ltd
4. Q2 (B) Following is the summary balance sheet of M/s. JoJo Ltd. as on 31-03-2023. Equity shares of Rs. 10 each 10,00,000 21,00,000 Shares of Rs. 10 each Note: Preference dividend for 3 years was in arreaRs Following scheme of reconstruction was approved: 15 marks
   • 1) Write off fixed assets by 20%, sundry debtors by 15%, and reduce the value of stock to 55% of its book-value
   • 2) Preference shareholders agreed to forego arrears of preference dividend
   • 3) Directors to give agreed temporary loan of Rs. 5,00,000 to Company
   • 4) The Company settled tax liability to the extent of Rs. 5,40,000 and met the expenses of reconstruction amounted to Rs. 10,000
   • 5) Sundry Creditors to give a remission of 20% of their claims and company to allot 11% Preference shares of Rs. 100 each fully paid up in settlement of the balance amount
   • 6) 10% debentures to be converted into 13% Debentures of Rs. 1,60,000 in full settlement of Equity shares to be reduced to Rs. 2 each fully paid up and 12% cumulative Preference shares to be reduced to 1,00,000 cumulative Preference shares of Rs. 2 each fully paid up
   • 8) Write off debit balance in Profit and Loss Account and Share Issue Expenses Draft Journal Entries and Prepare a Capital Reduction A/c
5. Q3 (A) Soflive Ltd. made a public issue of 3,00,000 Equity shares of Rs. 10 each, the entire amount is payable on application. The entire issue was underwritten as follows: Moto - 30%, Roto - 25%, Toto - 25% and Yoto - 20% of public issue respectively. Moto, Roto, Toto and Yoto had also agreed on firm underwriting of 8,000; 12,000; nil and 30,000 shares respectively Underwriters are entitled to 5% commission on face value. The marked applications excluding firm underwriting were as under: The unmarked applications were 50,000 shares and to be divided in the Gross Liability Ratio 15 marks
   • a) Ascertain the net liability (number of shares) of each underwriter if the benefit of firm underwriting is given
   • b) Calculate the amount of commission payable to each underwriter and the Net Amount Payable Receivable from underwriting
6. Q3 (B) Following is the summarized balance sheet of M/s Koly Ltd. (a non-listed company) as on March 2023 40,000 Equity shares of Rs 100 each fully paid 40,00,000 | Fixed Assets 1,20,00,000 preference shares of Rs. 100 20,00,000 | Investments each fully paid On the same date it was decided to buy back the maximum number of equity shares at the maximum price possible under the law In case of shortage of funds, bank overdraft was to be arranged The company decided to utilize the profit and loss account to the maximum extent 15 marks
   • a) Ascertain maximum no. of shares to be bought back at maximum possible price
   • b) Pass journal entries for the above transactions
   • c) Prepare Notes to Accounts for Share Capital and Reserves and Surplus
7. Q4 (A) The following was the summary Balance sheet of Dev Ltd. as on 31/3/2023. Preference shares of Rs 12,000 Equity shares of 12,00,000 | Fixed Assets 12,85 000 Note: Preference dividend was in arrears Rs. 40,000 The following scheme of Reconstruction is duly sanctioned: 15 marks
   • (1) A new company Tev Ltd. is formed with Rs. 15,00,000 as Authorised share capital divided into 1,50,000 Equity Shares of Rs. 10 each
   • (2) The company will acquire Dev Ltd. on the following conditions:
   • a) Old Companies debentures will be paid by same amount of 10% debentures in the new company where as for the arrears of interest, equivalent amounts of equity shares will be
   • b) The creditors will be paid for every Rs. 100 of their claim, Rs. 16 in cash and ten equity shares in the new company
   • c) Preference shareholders are given ten equity shares in the new company for their claim of
   • d) Equity shareholders will be given ten equity shares in the new company for every three shares held in the old company
   • e) Expenses of Rs. 20,000 will be borne by the new company, as a part of purchase consideration
   • (3) The new company will take the current assets at their book value, except stock which will be reduced by Rs. 15,000. Intangible assets are not to appear in the new balance sheet, appropriate adjustment being made in the values of fixed assets
   • (4) Remaining equity shares in the new company are issued to the public and are fully paid You are required to prepare:
   • a) In the books of Dev Ltd.
   • (1) Realisation Account
   • (b) Pass the journal entries the books of Tev Ltd
8. Q4 (B) From the data relating to a company which went into liquidation, you are required to prepare the Liquidator's Final Statement of Account 15 marks
   • (i) Cash in hand was Rs. 53,000 and other assets realised Rs. 8,50,000 6% Debentures of Rs. 1,00,000 were discharged along with interest for 6 months
   • (iii) Preferential creditors to be paid Rs. 36,050
   • (v) 5,000, 10% Preference shares of Rs. 100 each fully paid, Preference dividend is in arrears for
   • vi) 3,000 Equity shares of Rs. 100 each, Rs. 75 per share paid up (vit) 7,000 Equity shares of Rs. 100 each, Rs. 60 per share paid up (vil) Liquidator's remuneration is 0.5% on the other assets realised (except cash in hand) and 2% on unsecular creditors including preferential creditors
9. Q5 A) Explain the types of underwriting in detail. 8 marks
   • B) Explain the needs and importance of Internal Reconstruction. 7
10. Q5 C) Write short notes on (any 3): 15 marks
    • 1) Underwriting Commission
    • 2) Winding up of a company v/s Dissolution of a company
    • 3) Net Assets Method of calculating Purchase Consideration
    • 4) Reduction of share capital
    • 5) Benefits of buyback

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