1
LOYOLA COLLEGE (AUTONOMOUS), CHENNAI 600 034
B.B.A.DEGREE EXAMINATION -BUSINESS ADMINISTRATION
FOURTH SEMESTER APRIL 2018
16UBU4ES01- CORPORATE ACCOUNTING
Date: 25-04-2018 Dept. No. Max. 100 Marks
Time: 09:00-12:00
SECTION A
Answer all the Questions. (10X2=20)
1. What do you mean by financial statements analysis?
2. Write a note on comparative statement.
3. What do you mean by cash flow statement?
4. Write any two limitations of cash flow statement.
5. Define underwriting.
6. Write about underwriting commission payable to an underwriter as per law.
7. What do you mean by right issue?
8. Write a note on revenue profit.
9. What do you mean by corporate dividend tax?
10. . A company was incorporated on 1.2.1998 to purchase the business of Abdul from 1st Nov 1997.there were ten employees before incorporation but 5 more were appointed on 1.2.1998 you are required to ascertained the weighted time ratio for dividing salaries when accounts are finalized on 1st Oct
SECTION B
Answer any four Questions. (4X10=40)
11. What are the provisions regarding Bonus issue of shares?
12. Distinguish cash flow statement and fund flow statement
13.the following the summarized income of ABC ltd for the year ended 31.3.2003
particular
RS
Sales(including cash sales RS 20,000)
1,60,000
Less: operating expenses excluding depreciation
1,00,000
60,000
Less: depreciation
20,000
Net profit tax
40,000
Add: extraordinary income -gain on speculation
10,000
50,000
Less: provision tax at 40%
20,000
Net profit after tax
30,000
The following additional data is also available for 2002-03:
Operating expenses include loss on sales of furniture RS 4,000
Tax paid during the year for 2001-02rs 18,000
Current assets and liabilities at the year end of 2001-02and 2002-03were as under
31.3.2003
31.3.2002
debtors
16,000
12,000
stocks
13,000
14,000
creditors
18,000
17,000
You are required to ascertain net cash flow from operating activities.
2
14. Explain different types of underwriting
15. A company wants to redeem its 10,000 preference shares of RS 10 each ,fully paid at 10% premium .the ledger accounts show the following balance
RS
Securities premium
2,000
Profit and loss Ac
10,000
The directors redeemed the share by making fresh issue of equity share of RS 10 each at a premium .Give journal entries
16.P,K and R underwrote 80%of an issue of20,000preference share of RS 10 each in the ratio of 2:2:1. The firm and the market application of the underwriters are as follows
Underwrites
firm
Marked
P
2,400
4,000
K
2,000
3,000
R
1,600
1,000
Application for 16,000 shares were received in all .prepare the statement showing the liabilities of each of
the underwriters.
17. S&R co., ltd was incorporated on July 1,1992to purchase the business of Nishabros as on
1.4.92.certificate of commencement of business was received on 1.8.92.the accounts for the year ended
31.3.93 disclosed net profits of RS 80,000 after charging the following
directors salary -RS 10,000
Salaries -RS 20,000(4 employees) in pre incorporation period and six employees in post incorporation period
wages-RS 10,200(5 workers at RS 80 per month in pre incorporation period and10 workers at Rs 100
p.m in post incorporation period)
The sales were RS 3,00,000 of which RS 75,000 were in pre incorporation period
Calculate profit earned in pre and post incorporation period
SECTION C
Answer any two Questions. (2X20=40)
18 explain the process of financial statement analysis?
Explain the procedure for analysis and interpretation?
19. Moon and stars co ltd.is a company with an authorized capital of Rs 12, 00,000 divided into 12,000
equity shares of Rs 100 each
Rs
RS
Premises
6,00,000
Sales
8,30,000
Stock(1.4.97)
1,50,000
debenture
6,00,000
Furniture
14,400
P L (credit)
29,000
Calls-in- arrears
15,000
Bills payable
76,000
Plant machinery
6,60,000
Sundry creditors
1,00,000
Interim dividend
75,000
General reserve
50,000
Sundry debtors
1,74,000
Provision for doubtful debts
7,000
3
Goodwill
68,000
Paid up capital
8,00,000
Cash
63,300
Purchases
3,70,000
Preliminary expenses
10,000
Wages
1,69,730
General expenses
13,670
Advertising
20,000
Freight
26,230
Salaries
29,000
Directors fee
11,450
Bad debts
4,220
Debenture interest
18,000
24,92,000
24,92,000
The following adjustmenthas to be made
1. Stock on 31 march 1998 was valued at Rs 1,90,000.
2. Write off preliminary expenses
3. Provide for half years debenture interest.
4. The provision for doubtful debts equal to of sales
5. Directors fee outstanding Rs 550 and salaries Rs.1,000
6. Depreciate machinery by 5%,premises by 2%and furniture for Rs 2,400
7. Goods value of Rs 3,000 weredistributed as free samples during the year But no entry has been made.
You are required to prepare statement of profit and loss for the year ending 31/3/1998 and balancesheet as on the same date.
20. B ltd request you to prepare cash flow statement from the following balance sheet
Liabilities
1998
1999
Assets
1998
1999
Share capital
2,00,000
2,00,000
Land
1,55,000
2,16,000
Debentures
1,00,000
20,000
Buildings
2,00,000
2,60,000
Bank loan
80,000
1,40,000
Machinery
60,000
3,00,000
Bank O/D

2,60,000
Stock
90,000
1,20,000
Reserves
80,000
1,40,000
Debtors
60,000
80,000
Current liabilities
60,000
90,000
Cash at bank
30,000

Proposed dividend
1,00,000
1,40,000
Cash in hand
5,000
10,000
Discount on issue of debenture
20,000
4,000
6,20,000
9,90,000
6,20,000
9,90,000
4
(a)During 1999, dividend paid was Rs 1,00,000
Debentures were redeemed at20%premium
© Depreciation charging during 1999 was rs40,000 on building and Rs 20,000 on machinery
21 the following is the summarized balance sheet of nayaganco.Ltd .,as on 31.12.1988
liabilities
Rs
assets
Rs
Share capital:
Paid up share capital 50,000equity share of Rs 10 each
5,00,000
bank
90,000
1,000 10% redeemable shares of Rs 100 each 1,00,000
1,00,000
Other assets
8,10,000
Less: call in arrear on 50 shares
1,000
99,000
Reserve &surplus
General reserve
1,00,000
Development rebate reserve
50,000
Other liabilities
1,51,000
9,00,000
9,00,000
The redeemable preference shares were redeemed on the following basis:
Further 4,500 equity shares were issued at a premium of 10%
Expenses of fresh issues of shares Rs 5,000
© Out of 50 preference shares, holders of 40 shares paid the call money before the date of redemption.
The balance of 10 shares were fortified and they were reissued as fully paid shares on receipt of Rs 500
before redemption
Preference shares were redeemed at a premium of 10%and share premium was utilized in full of
purpose
Pass journal entries including those relating to cash and prepare summarized balance sheet after
redemption