NICCS COLLEGE OF COMMERCE (QILA DIDAR SINGH)

Subject: Advance Accounting Time Allowed: 35 Minutes Examination: B.Com Max. Marks: 40 ======================================================================================== Attempt any two questions, All Questions carry equal marks. Question: 01 The extracts have been taken from draft balance sheet of Farooq & Sons as 31st December 2012. Authorized Capital 1,200 Ordinary Shares of Rs. 100 each Issued, Subscribed & Paid Up Capital 500 Ordinary Shares of Rs. 100 each Profit & Loss Account Reserve Fund 50,000 13,200 33,000

The board of directors decided to issue bonus shares at the rate of 3 shares of Rs. 100 each for every 10 shares held at present. For this purpose Rs. 8,000 is to be provided out of Profit & Loss A/c and balance out of Reserve Fund. Required: Pass necessary journal entries in this regard. Also prepare new balance sheet to show the effects. Question: 02 The extracts have been taken from draft balance sheet of Najam & Co. as 30th June 2013. Authorized Capital 3,000 Ordinary Shares of Rs. 10 each Issued, Subscribed & Paid Up Capital 2,000 Ordinary Shares of Rs. 10 each Profit & Loss Account Reserve Fund 20,000 7,000 12,000

The board of directors decided; a) To issue bonus shares in the ratio of one bonus share for every four ordinary shares held. b) To issue right share at par in the ratio of one right share for every four ordinary shares held. For the purpose of issue of bonus shares, the funds were to be provided out of Profit & Loss A/c and Reserve Fund in equal proportion. All right share were taken up. Required: Pass necessary journal entries in this regard. And also show how it will affect the balance sheet. Question: 03 The extracts have been taken from draft balance sheet of Najam & Co. as 31st March 2013. Authorized Capital 16,000 Ordinary Shares of Rs. 100 each Issued, Subscribed & Paid Up Capital 4,000 Ordinary Shares of Rs. 100 each Profit & Loss Account General Reserve Share Premium 400,000 14,000 24,000 8,000

The board of directors passed a resolution to capitalize a part of its existing reserves by issuing bonus shares. One bonus share is being issued for every four ordinary shares held at present. For this purpose Rs. 4,000 is to be provided out of share premium and the balance equally out of General Reserve and Profit & Loss A/c. Required: Pass necessary journal entries in this regard. And also show how it will affect the balance sheet. ------------------------------ Wish You Best of Luck ------------------------------