GUG/W/18/785 1 P.T.O
Bachelor of Business Administration I Second Semester
199 Financial Accounting-II
P. Pages 4 GUG/W/18/785
Time Three Hours Max. Marks 80

Notes 1. All questions are compulsory.
2. All questions carry equal marks.
1.

Explain the procedure of Issue of Shares.
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A Ltd. Co. has Rs. 2,00,000 as its authorized capital divided into 10,000 equity shares of Rs. 10 each and 2000 preference share of Rs. 50 each. The Co., issued 8000 equity Shares and 1000 preference Shares. The public subscribed for 6,000 equity Shares and 1,000 preference shares Rs. 8 per share has been called on equity shares and Rs. 40 on preference shares. All shareholders paid the amount with the exception of 500 equity shares Rs. 5 Per Shares.
Show the various types of Share capital in Balance sheet.
OR
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A limited company issued for subscription 40,000 shares of Rs. 10 each at par. All the shares issued were applied for and amounts were called as under.
Rs. 2.50 on Application
Rs. 3.00 on Allotment
Rs. 2.00 on first call
Rs. 2.50 on Final call
The board of Directors of a company decided to forfeited the shares, who failed to pay the following amounts
Mr. Gupta holding 200 shares did not pay Allotment money and first call.
ii) Mr. Sen holding 300 shares did not pay first and final calls.
iii) Mr. Tiwari holding 400 shares did not pay Allotment and both the calls.
Give Journal entries regarding forfeiture of shares in the books of the Ltd. Co.
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2.

The following information are available from the books of a limited company
8
Rs.
30,000, 6 preference shares of Rs. 10 each, fully paid up. 3,00,000
18,000 equity shares of Rs. 10 each fully paid 1,80,000
15,000 equity shares of Rs. 10 each Rs. 8 per share paid up 1,20,000
12,000 equity shares of Rs. 10 each Rs. 6 per share capital 72,000
Fixed Assets less Depreciation 7,00,000
Expenses on Issue of shares 15,000
Floating Assets 1,20,000
Liabilities on sundry parties 75,000
Reserve surplus 88,000
Calculate the value of each type of equity shares by net Asset method
(excluding goodwill)

The following is the Balance sheet of Nagpur Ltd. As at 31 March 2014;
8
Liabilities
Rs.
Assets
Rs.
Share capital;
Land Building
55,000
5000, preference shares of Rs. 10 each
50,000
Plant Machinery
(Less Depreciation)
65,000
10,000 Equity shares of Rs. 10 each
1,00,000
Trade marks
10.000
*0597*
GUG/W/18/785 2
General Reserve
10,000
Stock
24,000
Profit Loss A/C
30,000
Debtors
44,000
Workmen's saving A/C
15,000
Cash at Bank
76,000
Unsecured loan
30,000
Preliminary Exp.
10,000
Sundry creditors proposed Dividend;
38,000
Preference shares 3,000
Equity Shares 8,000
11,000
2,84,000
2,84,000
It was found that the plant machinery was under depreciated by Rs. 5,000.
Land Building should have been valued at Rs. 1,20,000.
Rs. 4,000 of the debts were bad.
Preference shares having priority over equity of repayment of capital.
Find out the intrinsic value of equity shares preference shares.
OR

The Assets and liabilities of Rajhans Co. Ltd. as on 31st December 2010 were as fallows.
16
Liabilities
Rs.
Assets
Rs.
36,000 equity shares of Rs. 10 each
3,60,000
Building
3,02,400
6 Debentures
54,000
Machinery
2,16,000
Creditors
72,000
5 tax free Govt. Security/Bond
72,000
Provision for tax
32,400
Stock in trade
17,200
Dividend declared
54,000
Furniture
18,000
P L A C
72,000
Cash
15,000
Bill payable
55,600
Book debts
59,400
7,00,000
7,00,000
Net profit of the company after changing depreciation and taxes were as follows.
2005
Rs. 61,200
2008
Rs. 72,000
2006
Rs. 68,400
2009
Rs. 68,400
2007
Rs. 64,800
2010
Rs. 67,200
Interest on investments in included in the above profits.
On 31st December, 2010 land Building were revalued at Rs. 3,42,000, Plant Machinery at Rs. 2,55,600 and furniture at Rs. 14,400. 10% represents a fair commercial rate of return on investment in the company.
Find out the value of goodwill basing in at 6 years purchase of the average super profit for the last six years.
3.

Alfa Co. Ltd was incorporated on 30th June 2015 to acquire the business of Shri Ramesh Deshmukh as from 1st January, 2015. The accounts for the year ended 31st December 2015 disclosed the following.
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There was a Grass profit of Rs. 2,40,000.
ii) The sales for the year amounted to Rs. 12,00,000 of which Rs. 5,40,000 were the first six months.
iii) The expenses debited to the profit Loss Amount included
Director's Fees Rs. 15,000
Bad Debts Rs. 3,600
Advertising Expenses Rs. 12,000
(Under a contract amounting to Rs. 1000 per month).
Salaries General Expenses Rs. 64, 000
Preliminary Expenses written off Rs. 5,000
Donation given by the company Rs. 5,000
Give the basis on which you will find out the profit prior and after incorporation. Also state to which items they would be applied.
GUG/W/18/785 3 P.T.O

Abhay Co. Ltd was incorporated on 1st July, 2010 to take over the running business of Mr. Nandu with effect from 1st April, 2010. The following was the profit loss Account for the year ended 31st March, 2011.
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Particular
Rs.
Particular
Rs.
To Advertisement
7875
By Gross Profit
98,000
To managing Director's Remuneration
9,000
To salaries
20,800
To Insurance
600
To Preliminary Exp.
700
To Rent Taxes
3,000
To Discount
1600
To net profit
54,425
98,000
98,000
The following additional information is available.
The average monthly turnover from July, 2010 onwards was double than that of the previous month's.
Prepare a statement showing profit pre and after incorporation.
OR

A Limited company was incorporated on 1st May, 2010 to take over the business as a going concern from 1st January, 2010. The total turnover (Sales) for the year was Rs. 2,00,000 out of which turnover of Rs. 50,000 were upto 1st May 2010.
The profit loss Account for the year ended 31st December, 2010 was as follows
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Profit Loss A/C
Particular
Rs.
Particular
Rs.
To Rent, tax Insurance
3,900
By Gross profit
52,000
To establishment Exp.
4,200
To commission on sales
6000
To Directors Fees
400
To Auditors Fees
240
To Bad debts
4000
To depreciation
9,000
To Interest on Debenture
2500
To stationary
750
To Interest to vender
(From 1st Jan to 31st May 6%. on Rs. 60,000)
1500
To Advertisement
600
To Net profit
18910
52000
52000
Find out profit prior to incorporation and after incorporation.
4.

Deepak Co. Ltd went into liquidation on 30th June, 2010 Creditors on that comprised the following item.
Rs.
Local taxes due 1500
Sales tax 2100
Commission due to two salesmen in respect of services
rendered during three months of date of liquidation. 4,700
Directors fees for the year 20,000
Income-tax 2500
Trade-Creditors 4,06,600
437,400
Find out preferential creditors.
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GUG/W/18/785 4

"X" Co. is liquidated. The liquidator has a balance of Rs. 5,21,600 with him after all the external liabilities. Including his commission on realization of assets, have been paid. He is still to be paid remuneration at on the amount paid to equity shareholder.
The company's share capital consisted of
Rs.
6 cumulative preference shares 2,00,000
ii) Equity Shares 4,00,000
The preference shareholders were not paid divided for lost 3 years.
Find out the amount payable to Equity shareholders.
OR
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A company went into liquidation on 31st March, 2010 when the following Balance sheet was prepared
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Liabilities
Rs.
Assets
Rs.
Authorized capital 30,000 shares of Rs. 10 each
3,00,000
Goodwill
50,000
Subscribed and paid up capital
19,500 shares of Rs. 10 each
1,95,000
Leasehold property
48,000
Sundry Creditor
Preferential 24200
Partly Secured 55310
Unsecured 99,790
1,79,300
Plant Machinery
65,500
Bank overdraft (unsecured)
12,000
Stock
56,800
Sundry Debtors
64,820
Cash
2,500
Profit Loss A/C
98,680
3,86300
3,86,300
The liquidator realized the assets as follows.
Rs.
Leasehold property which was used in the first instance
to pay the partly secured creditors prorate 35,000
Plant Machinery 51,000
Sundry debtors 58,500
Stack 39,000
The expenses of liquidation amounted to Rs. 1000 and the liquidators remuneration was agreed at 2.5% on the amount realized, including cash and on the amount paid to the unsecured creditors (including preferential creditors)
You are required to prepare the liquidator's final Accounts showing the order of distribution.
5.
Write in short.
Explain the term forfeiture of shares.
4
Explain the need of valuation of Goodwill.
4
Explain the term 'Profit after incorporation'.
4
Explain type 'Winding up of companies'.
4