Chapter 1 Section 1. a. b. c. d. 2. a. b. c. d. A In India the business of underwriting is carried on by the __________.

Industrial Development Bank of India Industrial Development Corporation Industrial Reconstruction Bank None of These Underwriting commission have been laid down in _________________. Section 76 of Companies Act 1956 Section 58 of Companies Act 1956 Section 25 of Comapnies Act 1956 None of These

Chapter 2 Section A

Section C 1. The balance sheet of Hemanth Ltd. As at 31th December 2010 is as follows : Liability Amount Assets Amount Share Capital: 500 redeemable preference shares of Rs100 each fully paid 9000 equity shares of Rs.10 each fully paid Reserve & SSurplus: Security Premium General Reserve Profit & Loss a/c Current Liability 50000 90000 10000 20000 25000 30000 Fixed Assets: Land & Building Plant Furniture Current Assets: Stock Debtors Investments Bank 100000 30000 2000 30000 15000 28000 20000 225000 225000

The company decided to redeem its preference shares at a premium of 5 Percent on 31 January 2011. A fresh issue of 1000 equity shares of Rss.10 each was made at Rs 12 per shares, payable in full on 31 January 201. These were fully subscribe d and all money were duly collected. All the investments were sold realising Rs. 27000. The directors wish that only a minimum reduction should be made in the r evenue reserves. You are required to give the journal entries including those re lating to cash to record the above transaction and draw up the balance sheet as it would appear after redemption of preference shares. Chapter 3 Section C 1. A company incorporated on 1 April 2010 took over a running business from 1 January 2010. The company prepared its first final accounts on 31 December 20 10. From the following information you are required to calculate the sales ratio of pre and poat incorporation period: a. Sales from January 2010 December 2010 Rs.360000 b. Sales from the month of January twice the average sales for the month of February equal to average sales; sales for four months from May to August the average sales of each month and sales for October and November three times t he average sales. Chapter 4 Section B 1. From the following Trial Balance of Gopinath prepare trading Profit and loss Account for the year ended December 31, 2011 and Balance sheet as on that d ate. Particular Debit Credit Capital 27000 Drawings 4260 Furniture 5700 Stock on January 1, 2010 8760 Purchases and sales 62172 71436 Returns 1260 1746 Salaries 2640 Rent 720 Carriages 1500 Rates and taxes 1200 Apprentice premium 750 Bank Overdraft 1200 Bad Debts 1032 Sundry Debtors 19200 Cash in hand 288 Sundry Creditors 6000 Provision for Bad debts 600 Bills Receivables 1440 Bills Payable 1080 Discount 360 110172 110172 You are required to consider the following adjustments: a. Stock on December 31, 2011 was valued at Rs.10200 b. Provide for doughtful debt at 5% on sundry debtors and for discount on c reditors at 2% c. Rent due was Rs.160 d. Taxes of Rs.320 were paid in advance e. Depreciate furniture at 10% per annum f. Apprentice premium of Rs. 120 was to be carried forward g. Calculate interest on capital at 5% per annum

1/4th of

Section C 1. Following are the closing balance in the ledger of Mahesh for the year e nded June 30, 2007: Debit Amount Credit Amount Opening stock 12600 Capital 60000 Purchases 45000 Sales 100000 Sales return 500 Purchases return 1000 Wages 7500 Provision for bad debts 2000 Carriage purchases 1100 12% Bank Loan 20000 Salaries 5200 Sundry Creditors 11560 Taxes and insurances 1700 Discount 1440 Advertisements 2800 Rent Received 3000 Drawings 5000 Bills Receivables 3500 Debtors 52000 Cash in hand 1500 Buildings 28000 Furniture 10000 Machinery 15000 Printing and stationary 4400 Interest on bank loan 2400 199000 199000 Prepare trading Profit & loss account for the year ended June 30, 2007 and balan ce sheet as on that date after taking into account the following information: a. The stock on June 30, 2007 was valued at Rs.26800 b. The proprietor had taken away goods worth Rs. 3000 for personal use. Thi s has not been recorded in books c. Depreciate Machinery at 20% d. Provision for Bad Debts required is Rs.1500 e. Provide for Manager s commission at 10% on the net profit after charging suc h commission. Chapter 5 Section C 1. Rohan Ltd. And Raafi ltd decided to amalgamate themselves in to RR Ltd. The following are the summarised Balance sheets as on 31 March 2002: Liabilities Rohan Raafi Assets Rohan Raafi Share capital Equity Shares of Rs.10 each 600000 400000 Investment 20000 shares in Raafi Ltd 220000 General Reserve 150000 150000 10000 shares in Rohan 120000 Trade Creditors 150000 150000 Sundry Assets 680000 480000 900000 600000 900000 600000 The purchase price is to be determined on the basis of net assets and is dischar ged by the issue of equity shares of Rs.10 each RR Ltd. State the amount of purc hase consideration for each of these companies and prepare the balance sheet of RR Ltd . RR Ltd issued 10000 shares to its directors for cash. Chapter 6 Section B 1. The balance sheet of Shubha Ltd. As on 31 December 2010 as follows: Liabilities Amount Assets Amount Authorised and issued capital : 8000 shares of Rs.100 each 6% debentures Accured interest on the above Trade creditors

Income tax due 800000 1400000 70000 450000 10000 Fixed assets Stock in Trade Debtors Investments Cash Profit & Loss Account 1430000 80000 30000 17000 103000 1070000 2730000 2730000 The following scheme of re oragnisation eas approved and confirmed by the court: a. Each shares shall be sub- divided into twenty fully paid equity shares o f Rs5 each b. After Sub division each share holder shall surrender to the company 95% of his holding the purpose of re-issue to debenture holders and creditors so far as required and otherwise cancellation. c. Of those surrendered 46000 shares of Rs.5 each shall be converted into 8 % participating preference shares of Rs.5 each fully paid d. Debenture holder s total claim to be reduced to Rs. 230000, this will be sat isfied by issue to them of Rs.46000 participating preference shares of Rs.5 each fully Paid. e. The liabilities for income tax is to be satisfied full f. The claim of unsecured creditors shall be reduced by 80% and the balance shall be satisfied by allotting them equity shares of Rs.5 each fully paid from the shares surrendered . g. Shares surrendered and not issued shall be cancalled Journalise the various entries to be made assuming that the tax liability is not paid. Section C: 1. The following is the balance sheet of Tumkur Engineering Company Ltd. As at 31 March 2010. Liability Amount Assets Amount Share capital: 3000 equity shares of Rs 100 each fully paid 2000 6% cumulative preference shares of Rs.100 each fully paid 10% debentures Add: Interest due there on Sundry Creditors (Unsecured) 300000 200000 250000 50000 350000 Goodwill

Plant & machinery Patents Sundry Fixed assets Investments (Mkt value Rs.150000) Stock Sundry Debtors: More than 6 months Others Cash & Bank Balance Profit & Loss account 80000 200000 40000 30000 200000 100000 25000 125000 50000 300000 1150000 1150000 The company feels that the worst is over and that a suitable reconstruction will enable the company to regain its lost position in the market. It is found that the plant and machinery is worth Rs.160000, patents are worth r s.30000 and Sundry fixed assets are worth Rs20000 stock of the value of Rs.25000 are obsolete and cannot be sold. Debtors outstanding for more than 6 months are irrecoverable. The decline in the market value of investments is of a permanent nature. As the financial adviser of the company you are required to suggest an appropria te scheme of reconstruction and draw aup the balance sheet of the company after putting your scheme into effect. Case Study: 1. The capital of Datar Company Ltd was as follows: a. 4000 equity shares of Rs.100 each fully paid b. 3000 equity shares of Rs.100 eacch, Rs.80 per share paid up c. 1000 preference shares of Rs.100 each fully paid (these shares have pref erence as to capital) d. 1000 deferred shares of Rs.100 each, Rs80 per shares paid up (these shar es under the articles are to be paid after satisfying the claims of equity share sholders) The various creditors amounted in all to Rs.100000 including the liquidators rem uneration Rs.2500. the liquidators made a call of the remaining Rs.20 on the def erred shares which was paid in full. He also realised all the assets amounting t o Rs.191000. A call of Rs.15 per shares was made on the equity shares which were partly paid up. This was paid in full with the exception of that on 100 shares. Prepare the liquidators account showing the return to the shareholders.