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CA Assignment
CA Assignment
Number (Reg. No.): Student Name: INSTRUCTIONS a) Students are required to submit all three assignment sets. ASSIGNMENT Assignment A Assignment B Assignment C b) c) d) e) DETAILS Five Subjective Questions Three Subjective Questions + Case Study Objective or one line Questions MARKS 10 10 10
Corporate Accounting
Total weight-age given to these assignments is 30%. OR 30 Marks All assignments are to be completed as typed in word/pdf. All questions are required to be attempted. All the three assignments are to be completed by due dates and need to be submitted for evaluation by Amity University. f) The students have to attach a scanned signature in the form. Signature : ________________ Date: 03 Sept. 2011
Corporate Accounting
Assignment A Q: 1). A company issued 50000 equity shares of Rs. 10 each to the public, on the following terms: - Rs. 2 on application, Rs. 3 allotment, and the balance in two equal calls. The public applied for 8000 shares for which allotment took place on 1st April, 2008. All money due to allotment and calls was duly received except for one shareholder holding 500 shares who failed to pay both the calls and one holder who was the holder of 450 shares did not pay only final call. Pass journal entries and ledger into balance sheet. Solution:
Date Particulars 01/04/2008 Bank A/c Dr (Being received) L.F Debit Credit 16000 16000
To Share Application A/c To Share Capital A/c (Being share application money transferred to share capital A/c) Bank A/c Dr To Share Allotment A/c (Being share allotment money received) Share First Call A/c To Share Capital A/c (Being share first call money due) Dr
16000
16000
24000
24000
20000
20000
Bank A/c Dr Calls in Arrears Dr To Share first call A/c Share Second & Final Call A/c Dr To Share Capital A/c (Being share second & final call money due) Bank A/c Dr Calls in Arrears Dr To Share Second & Final Call A/c
20000 20000
17625 2375
20000 3
Balance sheet Liabilities Amount Assets Share capital Current assets 500,000 Cash at bank Authorized capital:50,000 shares of Rs. 10 each 500,000 Issued capital:50,000 shares of Rs. 10 each Subscribed and paid share capital:8,000 shares of Rs. 10 each. Rs. 80,000 Calls in arrears: 3,625 76375 76375 Amount 76375
76375
Q: 2). A company has decided to increase its existing share capital by bringing out a rights issue for the existing shareholders in the proportion of two new shares for every ten shares held. Calculate the price of right, if the market value of the shares at the time of the announcement of the right issue is Rs. 500. The company has decided to give shares of Rs. 200 each at a premium of Rs. 110 each. Solution: Market value of 10 shares required to be held by share holders: 10x500 = 5000 2x310 = 620 Total Price of 12 shares = Average price of one share: = 5620/12 = 468 Therefore the value of right issue = = Market value Average price of share = 500 468 = Rs.32 5620 Issue price of two right shares
Q: 3). ABC Co. Ltd. Issued 500,000 Equity shares of Rs.10 each and 30000, 10% Preference shares of Rs.100 each, all shares being fully paid. On 31.3.08, Profit and Loss Account showed an undistributed profit of Rs. 50,000 and General Reserve Account stood at Rs.120,000 On 2.4.08, the directors decided to issue 15000, 6% Preference shares of Rs.100 each for cash and to redeem the existing preference shares at Rs.105 utilizing as much as would be required for the purpose. Show the journal entries to record the transactions. Solution:
Date Particulars L.F 02/04/08 10 % preference share capital A/c Dr Premium on redemption of preference share A/c Dr To Preference shareholders A/c (Being amount payable on redemption of 3000 preference shares, with premium of 5 %). Bank A/c Dr To 6 % Preference Share Capital A/c (Being the amount received on issue of 1500, 6% Preference shares of Rs.100 each made for the purpose of redemption of preference shares as per Boards Resolution dated). General Reserve A/c Dr To Premium on Redemption of Preference shares capital A/c (Being the amount written off against general reserve) General Reserve A/c Dr Profit & Loss A/c Dr Capital Redemption reserve A/c (Being amount transferred equal to the difference between the nominal value of shares redeemed and proceeds of new issue). Preference shareholders A/c Dr. To Bank (Being the amount due to preference shareholders paid). Debit Credit 3000000 150000 3150000
1500000
1500000
1500000
1500000
105000 1395000
1500000
3150000
3150000
Q: 4). Journalize transactions when debentures are issued as follows:1) At par of 15%, 2500 debentures of Rs. 100 each, redeemable at par. 2) At 10% discount 12%, 1000 debentures of Rs. 100 each, redeemable at par. 3) At 10% premium 11%, 3500 debentures of Rs. 100 each, redeemable at par. 4) At par 12%, 2000 debentures of Rs. 100 each, redeemable at a premium of 5%. 5) At 5% premium 12%, 1900 debentures of Rs. 100 each, redeemable at 10% premium. 6) At 5% discount of 12%, 3600 debentures of Rs. 100 each, and redeemable at 15% premium. Solution:
Date 1
Journal Entries
Particulars L.F Debit 250000 Credit 250000
Bank A/c
Dr To 15 % Debentures A/c (Issue of debentures at par and redeemable at par) Bank A/c Dr Discount on Issue of Debentures A/c Dr To 12 % Debentures A/c Bank A/c Dr To 11 % Debentures A/c To security premium on issue of debentures A/c
Bank A/c Dr Loss on issue of debentures A/c Dr. To 12 % Debentures A/c To security premium on redemption of debentures A/c Bank A/c Dr Loss on issue of debentures A/c Dr. To 12 % Debentures A/c To security premium on issue of debentures A/c To security premium on redemption of debentures A/c Bank A/c Dr Discount on Issue of Debentures A/c Dr Loss on issue of debentures A/c Dr To 12 % Debentures A/c To security premium on redemption of debentures A/c
200000 100000
200000 100000
285000 19000
360000 54000
Q: 5). H Ltd. acquires 3/4 shares of the share capital of S ltd. As on 31st March 2006, when the balance sheets of both the companies were as under:Balance Sheet As on 31st March, 2008
Liabilities Share capital (in Rs. 10 shares) General reserve Profit & loss A/c 10% debentures Sundry creditors H ltd. 200000 50000 30000 100000 50000 S ltd. 100000 30000 20000 50000 20000 Assets Fixed assets Current assets Shares in S ltd. H ltd. 200000 130000 100000 S ltd. 100000 120000 -
430000 220000
430000
220000
Prepare the consolidated balance sheet as on 31st March, 2008. Solution: Consolidated Balance Sheet As on 31st March, 2006
Liabilities Share capital (in Rs. 10 shares) General reserve Capital Reserve Profit & Loss A/c 10% debentures:H 100000 S 50000 Sundry Creditors:H 50000 S 20000 Minority Interest H ltd 200000 50000 12500 30000 50000 Assets Fixed Assets:H 200000 S 100000 H ltd 300000
250000
550000
Assignment B (Three Analytical Questions) Q: 1). A company issue 20000 debentures of Rs. 100 each, payable Rs. 10 on application, Rs. 30 on allotment, and the balance on first and final call. Application were received for 24000 debentures, A the applicant of 1000 debentures was refused allotment and B the applicant of 8000 debentures were allotted 5000 debentures. Excess application money was adjusted towards allotment. A debenture holder holding to whom 600 debentures were allotted did not pay his money due on first and final call. Pass the necessary journal entries. Solution:
S. No. 1 Bank A/c (Being received) 2 Dr To debenture application A/c debenture application money Particulars L.F Debit 240000 Credit 240000
Debenture application A/c Dr To debentures A/c To debenture allotment A/c To bank A/c (Being debenture application money transferred to debenture account and excess money adjusted) Debenture allotment A/c Dr To debentures A/c (Being debenture allotment money due) Bank A/c Dr Debenture Allotment A/c (Being debenture allotment money received) Debenture first & final call A/c To debentures A/c (Being debenture call money due) Bank A/c Dr
240000
600000
800000
570000
570000
1200000
1200000
Dr Debenture first & final call A/c (Being debenture call money received)
1200000
1200000
Q: 2). The following are the two balance sheets of H ltd. and S ltd. as on 31st March 2005:Liabilities Share capital Equity shares H ltd. 800000 S ltd. Assets Fixed assets H ltd. 550000 S ltd. 100000 177000 128000
General 150000 reserve Profit & loss 90000 A/c Creditors 120000 1160000
200000 75% shares 280000 in S ltd.(at cost) 70000 Stock 105000 55000 80000 405000 Other current 225000 assets 1160000
405000
Draw a consolidated balance sheet as on 31st March, 2005 after taking into consideration the following information:i) H ltd. acquired the shares on 31st July, 2004. ii) S Ltd. earned a profit of Rs. 45000 for the year ended 31 st March, 2005. Solution: Consolidated Balance Sheet As on 31st March, 2005
Liabilities Share capital Equity shares General reserve Profit & loss Creditors H ltd 120,000 S ltd 80,000 Minority interest Total
H ltd
800,000 150,000 Stock 98,000 Other current assets 200,000 65,000 1,313,000 Good-will
Q: 3). Rakesh ltd. issued 10000 shares of Rs. 10 each at Rs. 11 per share. Share money was payable as follows:On application Rs. 2, on allotment Rs. 5, and on call Rs. 4. The offer was over subscribed by 5000 shares and the applicants were allotted shares
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on pro rata basis. Surplus application money was adjusted for future share dues. All shares were fully called up and money was received except on 300 shares of Raja who did not pay allotment and call money. The company later on forfeited his shares, and reissued at a discount of Rs. 2 per share. Give Cash book and journal entries in the books of a company. Solution:
Date Particulars Bank A/c Dr. To share application A/c (Being share application money received) Share application A/c Dr. To share capital A/c (Being share application money transferred to share capital A/c) Share allotment A/c Dr To share capital A/c To securities premium A/c (Being share allotment money due) Bank A/c Dr Calls in arrears A/c Dr. To share allotment A/c (Being share allotment money received) Share first call A/c Dr. To share capital A/c (Being share first call money due) Bank A/c Dr Calls in arrears A/c Dr. To share first call A/c (Being share first call money due) Share second & final call A/c Dr. To share capital A/c (Being share second & final call money due) Bank A/c Dr. Calls in arrears A/c Dr. To share second & final call A/c (Being share second & final call money received) Share capital A/c Dr Securities premium A/c Dr. To share allotment A/c To share first call A/c To share second call A/c L.F Debit 30000 30000 Credit 30000 30000
75000
60000 15000
73500 1500 30000 29400 600 30000 29400 600 3000 300
75000 30000
30000 30000
30000
10
To forfeited share A/c (Being 300 shares were forfeited for non-payment of first and second call) Bank A/c Dr Forfeited share A/c Dr To share capital A/c (Being 250 shares reissued at a discount of Rs. 2 per share) Forfeited share A/c Dr. To capital reserve A/c (Being balance of forfeited share A/c transferred to capital reserve A/c)
3300
Cash Book
Date Particulars To share application A/c To share allotment A/c To share first call A/c To share final call A/c Total Amount Date 30000 73500 29400 29400 162300 Particulars By balance c/d Amount 162300
162300
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Case Study The balance sheet of Chandan Limited as on 31 December 1998 was as follows:Liabilities Share capital 10000, 6% redeemable preference shares of Rs. 10 each fully paid 50000 equity shares of Rs. 10 each fully paid General reserve Profit & loss A/c 8% debentures Sundry creditors Amount 100000 500000 90000 230000 50000 70000 1040000 The directors of the company decided to:a) Redeem preference shares at a premium of 5% b) Redeem debentures at a premium of 10%; c) Bring out a bonus issue for the equity shareholders of one Rs. 10 equity share held in order to capitalize a part of the undistributed profit. Show: The appropriate journal entries to record the transactions in the books of the company; The balance sheet as it would appear after the completion of the transactions.
Solution for case study Dr A) 6% preference share capital a/c 100,000 5,000 105,000 5,000 5,000 12 Premium on redemption of 6% preference shares To 6% preference shareholders a/c (Being amount payable on redemption 10,000 preference) General reserve A/c To premium on redemption A/c Cr
Assets Fixed assets Land & building Plant & machinery Current assets Stock Debtors Cash and bank
(Being amount writing off against general reserve) General reserve A/c Profit & loss A/c To capital redemption reserve A/c (Being amount transfer to capital redemption reserve) 6% preference shareholders A/c To bank B) 8% debenture A/c Premium on redemption of debenture A/c To debenture holders Profit & loss A/c To premium on redemption of debenture A/c Profit & loss 8% debenture holders To bank A/c (Being amount paid to 8% debenture holders) C) Capital redemption reserve A/c To bonus to shareholders A/c Bonus to shareholders A/c To equity share capital A/c 50,000 50,000 50,000 50,000 A/ c A/c 50,000 50,000 55,000 55,000 To debenture redemption reserve A/c A/c 5,000 5,000 A/c 50,000 5,000 55,000 105,000 105,000 85,000 15,000 100,000
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Balance sheet Liabilities Issued Subscribed Capital Plant & Machine 10,000 Equity shares of Rs . 10 each fully paid 550,000 Stock debtors Cash & bank Preserve & surplus Share Capital redemption reserve Account (100,000 50,000) Debenture redemption reserve 50,000 Profit & loss a/c Sundry creditors Total 160,000 70,000 880,000 880,000 50,000 250,000 180,000 100,000 Of the above shares have been Allotted as fully paid bonus Current assets 200,000 Amount Assets fixed asset land & Building 150,000 Amount
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Assignment C (Multiple choice Objective Questions) Multiple Choice Questions Q: 1). a) b) c) d) The rate of discount on shares cannot exceed:5% 10% () 20% 6%
Q: 2). The share premium amount will be shown under the heading:a) b) c) d) Share capital Current liabilities Reserves & surplus () Current assets
Q: 3). Which of the following should be deducted from the share capital to determine the paid up capital:a) b) c) d) Q: 4). a) b) c) d) Q: 5). a) b) c) d) Calls in advance Calls in arrears () Securities premium Discount on issue of shares The profit on reissue of forfeited share is transferred to---Capital A/c Capital reserve A/c () Capital redemption A/c Redemption of share A/c Share allotment is a ------ A/c. Real A/c () Personal A/c Impersonal A/c None of the above
Q: 6). Now, a company can buy back more than ----- per cent of its shares. a) b) 20% 30%
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c) d)
25% () 15%
Q: 7). Any premium payable on the redemption of preference shares must be from the ---- account or from the divisible profits of the company. a) b) c) d) Security premium () Discount on issue of shares Dividend Capital redemption
Q: 8). Fresh issue of shares for redemption can be made at par, premium or ----a) b) c) d) Face increase Discount () Premium None of the above
Q: 9). After realizing all the investments in the sinking fund investment account is transferred to ---a) b) c) d) Profit & loss A/c Debentures A/c Capital reserve Sinking fund A/c ()
Q: 10). Premium on redemption of debenture a/c is in the nature of:a) b) c) d) Personal A/c Real A/c Nominal A/c () Impersonal A/c
Q: 11). The following journal entry is passed in the books of Arun limited:7% debenture A/c Dr. 160000 Premium on redemption of debenture A/c Dr. 6000 To bank A/c To profit on cancellation of debenture A/c a) Par b) Rs. 92 ()
147200 18800
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c) d)
Rs. 90 Rs. 95
Q: 12). The books of ABC Limited showed the following journal entry:Bank A/c Loss on issue of debenture A/c To 10% debenture To premium on redemption Debentures have been issued at a discount:a) b) c) d) 10 % 5% 6% 4 % () Dr. Dr. 96000 10000
100000 6000
Q: 13). Own debenture amount will appear on the ---- side of the balance sheet. a) b) c) d) Liability Asset () Under the balance sheet Profit & loss A/c
Q: 14). Debenture holders are entitled to receive ---- at fixed rate. a) b) c) d) Interest () Dividend Bonus All of the above
Q: 15). The company can ----- its own debentures. a) b) c) d) Purchase Sell Resell () Mortgage
Q: 16). Loss on the issue of debenture account is ---- asset. a) b) c) d) Current Fictitious () Fixed Tangible
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Q: 17). Provision of funds must be made, if debentures are to be redeemed by ---- method. a) b) c) d) Debenture redemption fund Sinking fund () Sinking fund investment All of the above
Q: 18). Own debentures purchased by the company will be shown on the ---- side of the balance sheet. a) b) c) d) Liabilities Profit & loss A/c Assets () Purchase book
Q: 19). While redeeming the debenture the debenture account should be debited at its ---- value. a) b) c) d) Annual value Market value Net value Face value ()
Q: 20). The balance of debenture redemption reserve account is transferred to ---- after all the debentures are redeemed. a) b) c) d) General reserve () Secured loan Unsecured loan Capital reserve
Q: 21). From the cum-interest price the debenture can be calculated by ------ the interest of the expired period. a) b) c) d) Adding Multiplying Subtracting () Dividing
Q: 22). Loss on sale of sinking fund investment is to be debited to ---- account. a) b) c) Sinking fund account () Sinking fund investment account Capital reserve account
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d)
Q: 23). Public Limited Companies cannot issue:a) b) c) d) Equity shares Preference shares Deferred shares () Bonus shares
Q: 24). The minimum share application money is:a) b) c) d) Rs. 2 per share 5% of the nominal value of shares () 50% of the nominal value of shares 20% of the nominal value of shares
Q: 25). Right shares mean the shares which are:a) b) c) d) Issue to the directors of the company First offered to the debenture holder First offered to the existing share holders () Issued by a newly formed company
Q: 26). Equity share holders are:a) b) c) d) Creditors Owners () Customers Suppliers the maximum
Q: 27). Subject to the permission allowed, allowable discount on equity shares is:a) b) c) d) 10 % () 5% 15% 20%
Q: 28). Premium on issue of shares can be used for:a) b) c) d) Distribution of profits Issue of bonus shares () Paying the remuneration to the directors Issue of debentures
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Q: 29). The balance of the share forfeited account after the reissue of forfeited shares is transferred to:a) b) c) d) General reserve Capital redemption reserve Capital reserve () Sinking fund
Q: 30). Balance of share forfeiture account is shown in the balance sheet under the item:a) b) c) d) Current liabilities and provisions () Reserves and surplus Share capital account Unsecured loans
Q: 31). If a share of Rs. 10 on which Rs. 6 has been paid, is forfeited it can be re issued at a maximum price of:a) b) c) d) Q: 32). a) b) c) d) Rs. 6 per share Rs. 4 per share () Rs. 10 per share Rs. 3 per share Debentures represents:The investment of equity share holders Directors share in business Long term liability of a business () Asset of a company
Q: 33). Debentures issued as collateral security for Rs. 100000 should be debited to:a) b) c) d) Debenture suspense A/c () Bank account Debenture account Capital account
Q: 34). The balance of sinking fund account after redemption of debentures is transferred to:a) b) c) d) Profit & loss account General reserve account () Debenture account Sinking fund investment account
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Q: 35). The balance of sinking fund investment account after realization of investments is transferred to:a) b) c) d) Profit & loss account Debenture account Sinking fund account () Sinking fund investment account
Q: 36). Profit on cancellation of own debentures is transferred to:a) b) c) d) Capital reserve () Dividend equalization fund Profit & loss account None of the above
Q: 37). If debentures of the face value of Rs. 50000 are issued at a discount of 10% for net assets worth Rs. 40000 the balance of Rs. 5000 will be debited to:a) b) c) d) Goodwill account () Capital reserve account Profit & loss account None of the above
Q: 38). A floating charge generally cover all the :a) b) c) d) Fixed assets of the company including future one Current assets of the company including future one All the assets of the company including future one () Fictitious assets of the company including future one
Q: 39). Pricing of public issue is determined by:a) b) c) d) The SEBI The company in consultation with stock exchange and SEBI The company in consultation with lead manager () All of the above
Q: 40). Book building is a method of:a) b) c) d) Price estimation for issue of shares to the public () Allotment of shares Redemption of shares Redemption of debentures
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