TYBCom Sem 6 2019-2020 T.y.fin. Mgt () Corporate Accounting Question Paper PDF 2026 - Mumbai University | munotes

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1. Q1 A_ Select the correct alternative and rewrite the sentence. (Any 8) 8 marks
   • 1. Preparation of consolidated Balance Sheet of Holding Co. and its subsidiary company as per
   • 2. According to AS 14, Amalgamation fall into two categories
   • a. Amalgamation and absorption
   • b. Merger and purchase
   • c. Amalgamation and external reconstruction
   • 3. Profit earned before acquisition of share is treated as
   • a. Capital profit
   • b. Revenue profit
   • c. General Reserve
   • 4. If there is any balance in the capital reduction account after writing off all the accumulated losses, then the same is transferred to —
   • 5. Pre-acquisition profit in subsidiary company is considered as :
   • a. Revenue profit
   • b. Capital profit
   • c. Goodwill
   • 6. Under purchase method the difference between the purchase consideration and share capital of the transferee company should be adjusted to:
   • b. Goodwill or capital reserve
   • c. None of the above
   • 7. Amount sacrificed by shareholders are credited to:
   • 8. A Ltd. and B Ltd. go into liquidation and a new company X Ltd. is formed. It is a case of:
   • a. Absorption
   • b. External reconstruction
   • c. Amalgamation
   • a. Share in Capital profit
   • b. Share in Revenue profit
   • c. the above
   • 10. When the expenses of liquidation are to be borne by the vendor company, then the vendor
   • a. Realisation account
   • b. Bank account
   • c. Goodwill account State whether the statements are true or false. (Any 7) [7]
   • 1. Goodwill is the excess of the share in equity of the subsidiary over and above the price paid for the investment
   • 2. Every holding company is required to prepare consolidated balance sheet and profit and loss account under the Companies Act, 1956
   • 3. Minority interest = Paid-up value of share hold by outsiders
   • 4. Goodwill or capital reserve arises only when the amalgamation is in the nature of merger
   • 5. Absorption take place when an existing company takes over two or more companies
   • 7. Incase of internal reconstruction the exiting company has to be liquidated
   • 8. Cancellation of unissued capital is also a case of capital reduction
   • 9. must pass a special resolution for reduction of capital
   • 10. In calculating purchase consideration under net assets method, all assets including fictitious assets should be considered
2. Q2 A. Parag Ltd. and Chirag Ltd. agreed to amalgamate and form a new company namely Anurag Ltd. which will take over all the assets and liabilities of both the companies. Following are the summary Balance Sheet of Parag Ltd. and Chirag Ltd. as on March, 2018. [15] Equity Shares of Rs. 10/- Plant & Machinery 8,00,000 each fully paid 4,00,000 | 5,00,000 | Stock 65,000 60,000 6% Preference Shares of Debtors 95,000 50,000 Rs. 100/- each fully paid - | Profit & Loss A/c - 1,40,000 9% Debentures of Rs. Bank 40,000 Terms of Amalgamation: In case of Parag Ltd. assets and liabilities are to be taken over at book values. For every 4 equity shares in Parag Ltd. 5 equity shares of Rs. 10/- each in Anurag Ltd. shall be issued at 10% premium In case of Chirag Ltd.
   • 1.6% Preference shareholders of Chirag Ltd. would be allotted Preference shares of Rs. 100 each in Anurag Ltd. for every 5,6% Preference shares in Chirag Ltd
   • 2. 9% Debenture holders would be discharged at par by issue of an equal number of 10% Debentures of Rs. 100 each in Anurag Ltd. at par
   • 3. Plant & Machinery and stock shall be appreciated by 10%
   • 4. Balance of Purchase consideration would be discharged by issue of Equity shares of Rs. 10 each in Anurag Ltd. issue at 10% Premium You are required to: Give necessary Journal Entries in the books of Anurag Ltd
   • (iii) Balance Sheet of Anurag Ltd. after Amalgamation
3. Q2 B Tom Ltd. agreed to acquire business of Jerry Ltd. as on 31“ March, 2013. The summarized Balance Sheet of Jerry Ltd. as on March, 2013 was as follows: 12,000 Equity of Rs. 10 each Goodwill 20,000 The consideration payable was.as follow:
   • (a) Cash payment equal to Rs. 2.5 per share in Jerry Ltd
   • (b) Issue of 18,000 Equity shares of Rs. 10 each of Tom Ltd. having an agreed value of Rs. 15
   • (c) Issue of such an amount of fully paid 9% Debentures of Tom Ltd. at Rs. 96 each as is sufficient to discharge 6% Debentures of Jerry at 20% premium
   • (d) While calculating the consideration the assets were revalued as follows: Building and Machinery at Rs. 1,20,000 each, Stock at Rs. 28,400 and Debtors subject to 5% provision for discount
   • (e) Liquidation expenses agreed to be paid by Jerry Ltd. was Rs. 1,000
   • 1. Statement of Purchase Consideration
   • 3. Opening Journal Entries in the books of Tom Ltd Following is the summarized Balance Sheet of Aayushi Ltd. as on 31.3.2018: [15] of Rs. 100 each 8,00,000 | Goodwill 50,000 Equity Shares of Rs. 10 Furniture 70,000 each 20,00,000 | Land & Building 13,00,000 Note: Preference dividend is in arrears for four years The following scheme of Capital Reduction was sanctioned by the court and agreed by the
   • a) The preference shares are to be reduced to Rs. 50each and equity shares to Rs. 2 each both being
   • b) Of the preference dividend in arrears, three-fourth to be waived and remaining to be paid
   • c) The debenture holders to take over plant & machinery at Rs. 13,00,000 in part satisfaction of their claim. The remaining claim should be converted into 15% debentures
   • d) Bill payable to be settled immediately. Creditors forego their claim of Rs. 40,000
   • e) The Assets are to be revalued as under:
   • f) A secured loan of Rs. 3,00,000 at 12% interest p.a. to be obtained by mortgaging Land & Building for repayment of Bank overdraft and payment of bills payable and reconstruction expenses of Rs. 30,000
   • g) Write off goodwill, patents, profit loss A/c (Dr. Balance) and preliminary expenses entirely Pass necessary Journal entries in the books of Aayushi Ltd. and also prepare Capital Reduction The following is the Summary Balance Sheet of Motu Ltd. [15] Statutory Reserve (to be Current Assets 1,10,000 maintained for 3 more years) 10,000.) Profit & Loss A/c 80,000 Patlu Ltd. agreed to absorb Motu Ltd. on the following terms:
   • (1) Patlu Ltd. agreed to take over all the assets & Liabilities
   • (2) The assets of Motu to be considered to be worth Rs. 5,00,000
   • (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. 300 agreed to be paid by Motu Ltd
   • (5) Market value of share of Rs. 10 each of Patlu Ltd. is Rs. 12 per share
   • (7) The amalgamation is in the nature of purchase You are required to show:
   • (a) Purchase Consideration
   • (b) Ledger Accounts in the books of Motu Ltd
   • (c) Opening Entires in the books of Patlu Ltd
4. Q4 A_ The following are the Balance Sheet of H Ltd. and its subsidiary S on Summary Balance Sheet as at December, 2012 Share Capital of Rs. 1/- Building 4,000 Bill Payable 2,000 1,000 | Shares in S Ltd. 6,000 Debtors of H Ltd. include Rs. 2,000 due from S Ltd. and Bills payable of H Ltd. included a bill of accepted I favour of S Ltd. A loan of Rs. 1,000 given by H Ltd. to S Ltd. was also included in the items of Debtors and Creditors respectively. Rs. 500 was transferred by S Ltd. from Profit & Loss Account to Reserve out of Current Year’s profit. Shares were purchased on 30" June 2012 From the following data, determine in each case:
   • 1. Minority interest at the date of acquisition and at the date of consolidation
   • 2. Goodwill or Capital Reserve
5. Q5 A_ List the types of Amalgamation and methods of preparation of purchase the objective of Consolidation of Financial Statement. [8] short notes (Any 3) [15]
   • 1. External Reconstruction
   • 2. Internal Reconstruction
   • 3. Purchase consideration
   • 4. Realization Account
   • 5. Minority Interest

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