ULL UAT UUNED Name of the Paper : Corporate Accounting Name of th B.Com. (Programme) Duration: 3 hours ___ Maximum Marks: 75 Instructions for Candidates: (i) Attempt all Questions. (ii) Simple Calculators are allowed to be used, (iii) Working Notes should form part of the answer. (io) Answers to theory questions should be brief and to the poi Q.1. (#) On 31° March, 2022, the paid up capital of OM Ltd. is 236,00,000 consisting. of 2,40,000 Equity Shares of %10 each fully paid up and 1,60,000 Equity Shares of %10 each, 27.50 per share paid up. It has %2,40,000 in Securities Premium Account, %2,00,000 in Profit and Loss Account (Cr.), %4,00,000 in General Reserve and %5,20,000 in Capital Redemption Reserve Account, It has ¥24,00,000, 12% Partly Convertible Debentures of 2100 each (20% of Debentures are convertible into equity shares of €10 each fully paid on 1% June 2022). On 1% April, 2022, the company decided to convert the partly paid equity shares into fully paid shares by way of bonus and to issue fully paid-up Bonus Shares to the holders of fully paid up shares in the same ratio. Calculate the amount of Bonus. (2+2+2=6) (b) AATMA Ltd. decides to redeem 2600, 15% Preference. Shares of 7100 each at 10% premium. It has a General Reserve of %4,62,000, Securities Premium of %4,000 and Investments [Face value %4,00,000] of 28,00,000. 40% of Investments are sold at 150%. If the new equity shares are to be issued at 25% premium and minimum General Reserve of %2,00,000 is to be kept. Calculate the minimum number of Equity Shares of 710 each to be issued for the purpose of redemption and the amount required to be transferred to Capital Redemption Reserve Account. (3+3=6) (¢) On 14.2018 PARMATMA Ltd. grants 100 options to each of its 2100 employees at %240 when the Market Price is 360. The vesting date is 31: March, 2020 and the exercise date is 31% March, 2022. At the end of year 1, the company found that 100 employees had left. At the end of year 2, the company found that 80 employees had left. At the end of year 3, the company found that 192 employees had left. Only 1700 employees exercised their options on 31% March, 2022. The face value of equity share is 210 per share. veg Compute Expenses to be recognised in each year by Fair Value Method and the Value of Options Forfeited. (Assume that the Market Price per share is %360 at 31% March of each year). (24+2+2+2=8) Sol. (a) @ | Paid up Shares (Fully) (240,000 * 10) 3 7,00) Paid up Shares (Partly) (1,60,000 27.50) | 12,00, Make fully Paid-up shares by way of bonus by using Free Reserves, 4,00 ie,, General Reserve" (1,60,000 x 22.50) Fully Paid up Capital * General Reserve has been utilised for making partly paid shares ito Rally paid, boca Premium or Capital Redemption Reserve cannot be utilised for this purpose. ‘Amount available for fully paid bonus issue: a Securities Premium Acoount Profitand Loss Account Capital Redemption Reserve Fresh Bonus Share Issue ‘Amount adjusted to conver into fully Paid-up Shares Total Amount of Bonus P-56onus Shares arei sna whom Equity Shas Copal Redemption Bonus Shares and not “poking Notes: 0 4 Costof investment @ 40% ‘¢ Wth vestments Sold (* 0 Loss on Sale of General Reserve (€4)62,000— tse Lass on Sale of Investments Free General Reserve Biaoe in Secures Premium Reserve Calon of Secures Premium from Frest Ben om Gna Reserve (&25,000 = Calculation of No. of Si let Fresh issue be Equation for Minimum N Preference Share at 760,000 + os00g | % %2,86,000 ~ 21,86,000 a ; | Noof equity shares = | Minimum requ red mu ount to be tr = Nominal Va =2,60,000 ~ x Statement shoTS ee eee =] %(1,20,00, G. Expenses are ; recognised (1,20,00,000) during previous year(s) H. Expenses to be recognised (F-G) %7,20,00,000| __°1,10,40,000 Options Forfeited = 1,728 - 1,700 = 28 Number of Shares that were not opted = 28 * 100 = 2500 «. Value of Options Forfeited = 2,800 x 7120 (FV) = *3,36, Note* Vesting period is a time over which stock option would vest with the employees, "Or AMLA GILOY & TULSI Ltd. piovides you the following relevant infer 31°t March, 2022: ae Particulars 10% Redeemable Preference shares of 710 each fully paid up Equity Shares of 10 each fully paid up Securities Premium General Reserve Profit & Loss Account Capital Redemption Reserve Plant Revaluation Reserve Debenture Redemption Reserve 12% Debentures (of 7100 each) General Investments [Face Value %800 lakh] Investment in 1,32,000 Own Debentures Debenture Redemption Reserve Investments [Face Value %60 lakh] Cash at Bank On 1* April, 2022, the company decided: (a) To buy back 8 lakh Equity Shares “at 250. For this purpose, Investments were realised at Market Price which was 125% of the Face | (® To redeem the Preference shares at a premium of 10%. ; (©) To cancel Investments in Own Debentures and to redeem the | premium of 5%. Debenture Redemption Reserve Investments real than face value. Later on the company issued three fully paid %10 each by way of bonus shares for every five equity shares desired to have minimum reduction in free reserves. Required: Pass the necessary Journal Entries relating to part (a), shares. 8 Sol. (a) JOURNAL Entries Date Particulars 01.04.22] Bank Alc (8800 * 40% x 125%) _ 5 Statement of Profit & Loss Alc'(Loss on sale) To General Investments (Gale of General Investments) Equity Shares Buy-back Alc (8 x €50) To Buy-back Bank A/c (Open Buy-back Bank Ale for buy-back of Shares) oie Premium Alc* ; 'o Capital Redemption Reserve (Securities Premium transferred to CapitaPreference Shareholders Alc To Bank Alc General Reserve % To Capital Redemption Reser (Amount equal to nominal value p to Capital Redemption Reserve)Debenture-holders A/c To Bank A/c (Paid to Debenture-holders) ‘Securities Premium Alc To Premium on Redemption of Debentures ae (Premium on redemption of debentures written off against securities premium) Debenture Redemption Reserve To General Reserve (Amount transferred to General Reserve) Capital Redemption Reserve", Securities Premium Alc’. To Bonus Issue A/c (Appropriation of various restricted reserves for fully paid Bonus| issue in the ratio of 3:5) Bonus Issue Alc To Equity Share Capital Nc (Bonus shares issue) Working Notes: 1. Restricted Reserve to be utilised for Bonus Issue: Capital Redemption Reserve (Given) New Capital Redemption Reserve (Created on Buy-back of Shares) New Capital Redemption Reserve (Created on Redemption of Pref. Use for Bonus Issue 2. Securities Premium: Securities Premium (Given) ‘Transfer to CRR on Buy-back of Shares Used to write-off Premium on Buy-back of Shares, ‘Used to write-off Premium on Redemption of Preference Shares Used to write-off Premium on Redemption of Debentures Securities premium available for issuing bonus share Used for Issue of Bonus Shares Total to be shown in the new Balance Sheet Q. 2. The following are the extracts of the Trial Balance of PETHA LTD. as at 31* March, 2022: : Particulars Or. Dr. So Or. Revenue from Operations 15 lakh, 10% Tata Steel Debentures of %100 each, %80 paix id Net Loss on Sale of Investments ae Rent received Expenses other than Interest (including Rent Collection Expenses 40lakh Equity Shares of €10 each, €7 50 ae eee 160 lakh Equity Shares of €10 each fully paid up 16 lakh 10% Pref. Shares of £100 each fully paid up 12%, 800,000 Debentures of 710 each flly paid up (ssued on 01.04.2020) Seal Reserve (as at 01.04.2021) : : ra A/c (Dr) (ag at 01.04.2021) loyees Stok Option Outstanding A/c Debenture RedempACCorIn ACCOUN income: * Revenue from Operations Other Incomes hsp |. Total Income i Expenses: Finance Cost Other expenses '\, Total Expenses: \, Net Profit before tax (II = Vi Less: Income tax Vi, Nat Profit after taxP-62 “Shiv Das DELHI UNIVERSITY SERIES Ghio farther amount is transferred to DRR since DRR should be 10% of Debentures vag 80,00,000 ice, already created by company: Note: Or i 2013. a) Define Financial Statements as per The Companies Act, 2013. a White only one basic difference between each of the following: (@ Interim Dividend and Final Dividend (i Quoted Investments and Unquoted Investments (iii) Reserve and Reserve Fund ee (iv) Book Building and Reserve Book Building : (0) Define an Operating Cycle and Participating Preference Shares, (d An item of income or expenditure is to be disclosed separately in the Statements as per The Companies Act, 2013 if its amount exceeds 1% of the operations or €10,00,000, whichever is higher. Comment. (2) Under The Companies Act, 2013 “Free Reserves” do not include § Premium Account, Comment. (f) Financial Statements of every company include Cash Flow Stateme Companies Act, 2013. Comment. (g) The figures appearing in the Financial Statements as per The 2013 may be rounded off to the nearest crores only if Turnover is more Comment. (i) BHARAT TUSHAR Ltd. provides you the following information: — Raw material stock holding perid: 4 months, Work-in-progress hold months, Finished goods holding period: 3 months, Debtors collection You are required to compute the operating cycle and State with ree following should be disclosed as Current Assets or Non-Current A Liabilities or Non-Current Liabilities in the Balance Sheet as at 31st Schedule II: : (i) W, a customer whose expected realisation date is 30! Ay (ii) X, a customer whose expected realisation date is 30% June, wi Y, a supplier whose expected payment date is 30'* April (iv) Z, a supplier whose expected payment date is 30! 20 Ans. (a) See Q. 1, Chapter 2. E ba © (@ See Q. 3(), Chapter 2. (ii) Sée Q. 16(i), Chapter 1. (iif) See Q. 3), Chapter 2. (i) See Q. 16(i), Chapter 1. (0) See Q. 4, Chapter 2. (@ This statement is correct. According to The or expenditure must be disclosed separately in the ceeds 1% of the revenue from operations or INR 10,00,000, quirement ensures that significant items of income and as the residual surplus avail ist resi lable for distributi depreciation, investments wet corerstatement is co nore oe picture of th and account ee in a company’s f million) if the comp cnpanies to present the aes without sac information presented is fancal situation. U)see Q.5, Chapter 2. >» Preference Share Capital of 100 each ee Reserve Profit and Loss A/e~ ities Premium Gepital Redemption Reserve , "nployees Stock Option Outstand 4% Debentures pee “term Borrowings (14% B Trade Payables Provision for Tax “ible Fixed Assets inaumulated Depreciation a sible Assets [Goodwill] ty ‘Current Investments © 7 Fixed Deposit (Date of F 3131 tah ae ray Trntotes eR 7 sagheciabes ~ ) Div () During-64 m Shiv Das DELHI UNIVERSITY SERIES (0 On 1* Jan., 2022, Some Current Investments costing %8,00,000 were purchased ‘and Some Current Investments were sold at a profit of 20% on sale. New Debentures were issued and Bank Loan was repaid on the same date, (@) On 1 May, 2021, new Equity Shares of 710 each were issued at a premium of 10% and Preference Shares were redeemed at a premium of 5%. (©) On 01.01.2022, chased for %2,40,000 payable the Business of Y Ltd. was purchase F in fully paid equity shares of 10 each at 20% premium. The assets included \d Machine %1,20,000. Trade Inventories 760,000. Trade Receivables 740,000 ani Payables of £60,000 were also taken over. ( Tax provided during the year was 21,20,000. Being a prudent accountant, ensure minimum reduction in free reserves. 10 Sol. Cash, Flow from Operating Activities Particulars @ @ Cash Flow from Operating Activities: Net Profit for the year (%26,08,000 + £52,000) 26,60,000 ‘Add: Transfer to General Reserve"; 1,20,000 | Provision for tax 4,20,000 4 Not Profit before tax ‘ 29,00,000 ‘Add: Adjustment for Non-cash and Non-operative items: Premium on Redemption of Preference Shares (5% of €8,00,000) 40,000 ‘Accumulated Depreciation on Machinery“ 5,60,000 § Loss on Sale of Machinery" 4,20,000 4 interest on Debentures", 99,400 Interest on Short-term Borrowings (Bank Loan)*s 26,600 Employees Stock Option outstanding (Increase) 4,40,000 7 Goodwill amortsed’s '36,000 | 10,22,000 39,22,000 Less: Profiton sale of Current Investments", (60,000) Interest on Current Investments", (48,000) Operating Proft before Working Capital Changes Increase in Trade Payables" 4,40,000 Decrease in Trade Receivables" 1p 4160,000 Less: Increase in Inventories", (4,00,000) Cash Generation from Operation Less: Income Tax Paid* Cash flow from Operating Activities Working notes: *, Dr. General Reserve Particulars Particulars Equity Dividend Balance bid : Preference Dividend Profit & Loss (Newly transferred) Capital Redemption Reserve (Balancing figure) Equity Share Capital Balance oldCORPORATE ACCOUNTING — 293 Equii it quity Share Capital Account (MAY-JUNE) mw p65 Particulars f lganaraane Particul cs 40,00,000 | Balance bra oo 1) Bonus issue 24,00,000 Business Purchase 4,00,000 Bank (Fresh issue) pa Bank (Other | 300,000 = Tuas a 200,000 + Securities Premium Account on Particulars @ f cr. aaa Particulars @ b- old 40,000 | Balance bid 80,000 1,80,000 | Business Purchase , 40,000 Bank Alc (Fresh Issue) 80,000 Bank (Other issue) 20,000 220,000 anne t : Capital Redemption Reserve G Particulars ®) Particulars @ Bonus Issue 4,00,000 | Balance bid 600,000 Balance cld 2,00,000 6,00,000 6,00,000 ‘Tangible Fixed Assets (Machinery) Account c. = Particulars ®) Particulars @ Balance Bd 52,80,000 | Bank (Sale) 200,000 Equity Share Capital 20,000 | Loss on Sale* nee Bank (P 47/60,000 | Aocumlated Depreciation 60. ee Aoqumulatd Depreciaon 30,000] 240,000 Balance cld | _86,00,000_ 71,60,000 [21.0008 "Let the Book Value of Machinery = €100; ane Selling Price = €100 - $37.50 = 262.50 “ Sa e200 *3 Dr. ‘Accumulated Depreciation Account : a 7 Particulars @ Particulars @ Machinery Alc (sold) 7,60,000 | Balance bid ae oe Machinery A/c (Discarded machinery) {80,000 | Statement of P & L (Balancing, ‘ Balance old : |_15,20,000 | | oar 17,60,000 . 9 (or 9 Months) +, Interest on Debentures %6,00,000% qa *qa = €63,000 Cr ee = Months) ¥10,40,000* ax 75 = £36400 = £99400 oe ) joo x 242 = 221,000 (for 9 Months) “5 Interest on Bank Loan £2,00,000* 79g" = 27 3 = 71,60,000% 7% aq = £5,600 =%26,600 (for 3 Months) Goodwill Account & “0M @) Particulars @ a ie 40,000 | Statement Prof & Loss (wrten-of) 36,000 Balance bid ; ier ce 84,000 Bonus Premium [p5.80.000% 720,000 a 120,000 ——P-66 @ Shiv Das DELHI UNIVERSITY SERIES sae : ae Goodwill Amortsed = Goodwill Purchased" + Opening Goodwill Closing Goodwill = 280,000 + 840,000 - £84,000 = %36,000 : ae "Good 5 Pur, consideration - Net Asset i.c., Assets ~ Liabilities of a # {e2.0.000 60,000 = £40,000 - €1,20,000) = £60,000] = £80,000, 10% Current Investments Account "Dr. Particulars @) Particulars Balance bid 3,20,000 | Bank €(2,40,000 + 60,000) 800,000 : ba a [zooms e. cmon] Profit on sale (%3,00,000 20%) 60,000 | Balance eld 11/80,000 “Interest on Current Investment %3,20,000 * ayn % p= £24,000 ~ x580000% yx = 322,000 = *46,000 ‘ar Trade Payables Account Particulars @ Particulars Balance cld 6,60,000 | Balance b/d Business Purchase Creditors (Balancing figure) 6,60,000 “1a Dr. ‘Trade Receivables Account — Particulars @ ‘Particular jane 2572,000 ; Business Purchase “40,000 a eas rah “y Dr. Particulars Balance bid Business Purchase” Bank Ne (Balancing figure) a Particulars ‘Bank paid (Balancing | Balance old Ra) Or, (a) From the fol lowing extracts of calculate Cash Flow trom Investing Activites stay ae the Cash Flow Statement as per AS-3 issued b : Particulars Equity Share Capital of 210 each Preference S} t General Reser’ CaPital of 8100 each Profit and Loss A/c Securities Premium Capital Redemption ReserveCORPORATE ACCOUNTING — 2022 (MAY-JUNE) B F-67 Ei 1 ie 19¥ees Stock Option Outstanding A/c 3,40,000 | 2,00,000 Shore geertures 10,40,000 600,000 Trade. fr Borrowings (14% Bank Loan) 160,000 2,00,000 Undine 6,60,000 1,60,000 Outstana yeiend on Equity Shares 80,000 o Outstangnterest on Debentures 40,000 Provision va Snderwriting Commission 20,000 - oe ax le mk ake Accumulated : 00, 80, Intangible AaecePreciation (15,20,000) (12,00,000) wick ts [Goodwill] 10% Current Investments, } 84,000 40,000 Interest Accrued 8,80,000 3,20,000 ‘ed on Current Investments 8,000 be 3 ” a as of FD 1* March, 2022 maturing 11,36,000 Cash at Bank 5,32,000 4,00,000 Inventories 6,76,000 2,16,000 Trade Receivables 24,52,000 25,7200 Additional Information: ; (}) Dividends (including an Interim Dividend @ 35%) were paid on 1*t April, 2021. (i) During the year a machine (having accumulated Depreciation) was sold for %2,00,000 at a loss of 37.5%. A fully depreciated machine was also discarded. Machinery costing %17,60,000 was purchased for cash. (iii) On1**Jan., 2022, Some Current Investments costing %8,00,000 were purchased and Some Current Investments were sold at a profit of 20% on sale. New Debentures were issued and Bank Loan was repaid on the same date. (iv) On 1 May, 2021, new Equity Shares of 710 each were issued at a premium of 10% and Preference Shares were redeemed at a premium of 5%. ; (#) On 01.01.2022, the Business of ¥ Ltd. was purchased for %2,40,000 payable in fully paid equity shares of 710 each at 20% premium. The assets included Inventories 260,000. Trade Receivables %40,000 and Machine %1,20,000. Trade Payables of 60,000 were also taken over. a (vi) Tax provided during the year was %1,29,000 (including tax @ 15% on short-term capital gain on Investments). Being a prudent accountant, ensure ana reduction in free reserves. a een) (0) If in the above Question 3(a) Net Cash Flow from 3 Opt Aad fore I is ?36,40,000, then calculate Net Cash Flow from Operating Sol. (a) Cash Flow Statement - a L Particulars . Cash Flow from Investing Activities 2,00,000 Sale of Machinery"; : (17,60,000), Purchase of New Machinery (8,00,000) Purctfase of Current Investment ae Interest on Investments") i Tax paid on Investments (%60,000 * 15%) 300,000 aie Sale of Current Investments miedo —__Net Cash Used for Investing Activities-68 1 Shiv Das DELHI UNIVERSITY SERIES Cash Flow from Financing Activities Payment of Dividends (7,60,000) Repayment of Bank Loan (40,000) interest paid on Bank Loans (26,600) Interest paid on Debentures’ (69,400) Securities Premium (€1,80,000 - %80,000) 400,000 Dividend paid on Preference Shares (0,000) Fresh issue of Equity Shares 40,00,000 Premium paid on Redemption (40,000) Redemption of Preference Shares (8:00,000) Issue of 14% Debentures 4,40,000| _ (2:68,000) Net Cash Used for Financing Activities 2,66,000 Working Notes: ch Fixed Asset Account @ @) Opening Balance 72,80,000 | Bank Ac (Sale) 2.00000 Bank Af (Purchase) 17160,000 | Loss on Sale of Machine 1,20,000 Machine Discarded 120,000 Closing Balance 66,00,000 70,40,000 70,40,000 *, Dr. 0% Current Investment Account cr. J @. ‘Opening Balance 3,20,000 | Bank Ao 2,40,000 Bank Ale Purchase losing Balance 80,000. 11,20,000 Sale Price of Current Investment = €2,40,000 * 100 = £3,00,000 tnerest on €320,000 10% Investments up to 312.2021 (€3,20/000 * 0S) 24,000 sane st on Balance %80,000 10% Investments for3 months eae 2,000 w 3 Interest on New 10% Investments = %8,00,000 * 7 Less: Interest Accrued oe Dividend on Opening Capital (24,00,000 » 35%) Less: Unclaimed Dividend on Equity Shares Dividend paid +4 Interest on ¥40,000 @ 14% for 9 months Interest paid on 14% Debentures: £6,00,000 14% £14,40,000 x 14% for 3 months ____less: Outstanding Interest os Seo (2) Cash Flow rom Operating Activities before tax Less: Payment of Tax’ Net Cash Flow from Operating ActivitiesAl | Working Note: Dr. Provision forTax Account & Particulars ey | Particulars ®@ e 80,000 Bank (Paid) (Balancing figure) 40,000 | Balance b/d r Balance ¢/d pie 1,60,000 | Statement P & L (Prov. for Tax) 1,20,000 2,00,000 2,00,000 jd. as at 31% @-& @ Given below are the extracts from the Balance Sheet of ‘SHEENA Lte March, 2022: Z I Dariicslars in lakh) Equity Share Capital of 710 each 8,00,000 8% Pref, Share Capital of 7100 each 2,00,000 General Reserve 80,000 Profit & Loss. A/e 64,00 Statutory Reserves 20,000 10% Debentures 2,00,000 Trade Payables 5,60,000 Tangible Assets 6,00,000 Goodwill 4,78,000 wwentories 2,20,000 e Receivables 2,60,000 at Bank 3,66,400 Prior to absorption, SHEENA Ltd. decides to declare and pay equity dividend @ 5%. The business of SHEENA Ltd. is taken over by BHARAT Ltd. as on that date on the following terms: 50% of Tangible Fixed Assets are taken over at 100% more than the book value and the naining Tangible Fixed Assets are taken over at 20% less than the book value, 4) Goodwill of SHEENA Ltd. is to be valued at %2,10,000. =) Inventories are taken over at book value less 10% and Trade Receivables are taken cr at book value subject to an allowance of 10% to cover doubtful debts. «) Trade Payables are to be taken over subject to a discount of 5% and Unrecorded Loan of #1,54,000 to be discharged by BHARAT Ltd. at book value. ( BHARAT Ltd. was agreed as follows: (The issue of such an amount of fully paid 14% Debentures in BHARAT Ltd. at 96% as is sufficient to discharge 10% Debentures in SHEENA Ltd. ata premium of 2), li) The issue of such an amount of fully paid 10% Pref. Shares in BHARAT Ltd. at 125% as is sufficient to discharge 8% Pref. ') One Equity Share of 710 each, %8 paid up valued at ¢19 per share for every two Equity Shares held in SHEENA Ltd. and the balance in cash. The market value of or equity shove of BHARAT Lid. at present is €100 an equity share of Bl . at pl ¥ Expenses of liquidation of SHEENA Ltd. are to be reimbursed by BHARAT Ltd. to pp, he extent of 740,000, Actual Expenses amounted to 756,400. as iy nited: Show the calculation and discharge of Purchase Consideration. (643-9) ass Journal Entries for the following transactions of NEEM LAD: | op, : conversion of 8 lakh fully paid equity shares of €10 each into Stock of and balance as 12% fully Convertible Debentures. : ye onsolidation of 160 lakh fully paid equity shares of €2.50 each into 40 lakh fully iy Paid equity shi a : Su isin of ak aly paid 11% preference shares of 0 each into 200 lakh full | Cll paid 11% preference shares of 1020. | 154, preference shares of Version of 19% .f 720,00,00 of 12% hares o , 12,00,009 and pan as 14% ‘Non-cumulative preference shares.Das DELHI UNIVERSITY SERIES sideration * p-70 ™@ Shiv Sol. (a) Calculation of Purchase Co! Particulars %6,00,000 A Assets taken over sym of €3,00,000) Tangible Assets (coon ia 2,40,000 (2600000555 20% of 3,00,000) Goodwill Inventories (€2,20,000 — 222,000) Trade Receivables ,60,000 - %26,000) e t of 5% dividend on 78,00,000. Cash at Bank (%3,66,400 ~ Pa) 216,000 - Prefemce dividend’ - 716,400 expenses) 40,000 B. Less Liabilities taken over Trade Payables (@5,60,000 ~ 28,000) Unrecorded Loan 40% of Debentures (82,00,000 + 40,000) Purchase Consideration Journal Entry Date Particulars Dr. Tiquidator of Sheena Ltd. Ac To Eauity Share Capital Nc To 8% Preference Share Capital lc To Secures Premium Alc [40,000 + €2,80,000] Jo Bank Ac (Balancing figure) (Discharge of Purchase Consideration) Working Note: Securities Premium (25% of 892,000) Equity Share Capital (2m x 5) x38 Securities Premium (40,000 7) Bank (Balancing figure) SHEENA Ltd. paid dividend on Equit ity Shares, So, i preference shareholders and eae So, it Particulars pital Alc Equity Share Capital ’ "aS i isolidation of eat) Shares ofCORPORATE ACCOUNTING =22 (MAYJUNE) @ P71 (¢50) Dr 20:00,00,000 Ry (810) 20,00,00,000 na lakh Pret. Shares of €50 each into 200 : i) w sarc Capital Ale Fi 20,00,000 Preference Share Capital AIC 12,00,000 7 Lae Noeumolve Prfrence Share Capital Ne 200,000 (12% Pref. Share Capital converted into 13% and 14% Pref. Share Capital) . Or, (a) TASHIKA TUSHAR Ltd. provides you the following information as at March 318, 2022: Particulars @in lacs) Equity Shares of 210 each 2000 Cum-Pref. Shares of £100 each 400 Profit and Loss Account (Dr.) 60 First Debentures 240) Second Debentures oy nntures Interest Outstanding 6 le Creditors 660 & Machinery 2878.4 Note: Dividend on Preference Shares are in arrears for three years, ‘The following scheme of internal reconstruction was approved and implemented: (') All the equity shares be converted into the same number of equity shares of €5 each, 72.50 paid up. ‘ (i) The preference shares are converte from 6% to 15% but revalued in a manner in which the total return on them remains unaffected. Four equity shares of €9 each, 22.50 paid up to be issued for each %100 of arrears of Peer mal Mr. A holds 10% first debentures for 7160 lacs and 10% second debentures fo i ar 7A’ is to cancel 2240 lacs of his 240 lacs. He is also a creditor for %40 lacs. Mr. ‘A’ is to new 12% Debentures total debt and to pay €40 las tothe company and torepeivenc) Bt PEAT for the balance amount. Mr. B holds the remaining 1 “Bis to cancel 120 lacs second debentures and is also a creditor for €20 lacs. pee ‘balance amount. of his total debt and to accept new 12% Debentits on of either to accept Trade Creditors (other than A and B) are Sane due to them or to accept equity shares of 85, %2.50 paid up each, for the accepted equity Shares whereas 80% of the amount due in cash. 40% Creditors the balance accepted cash in full settlemet should be utilized in writing Any surplus after writing off the various 3 7 p,,. own the value of plant & machinery. “Mired: Prepare Reconstruction Account. pan AS10 0) Writ ; tween AS 143 Sat any three differences as ane LE Dr. a i (in lacs) Particulars 000 a Dr. 2, 500 Equity Share Capital (10) AIC 1.500 To Equity Share Capital (82.50) Ale To Reconstruction Ale (Capital Reduced)ee P-72 ™@ Shiv Das DELHI (i) (i) wy) ) ) (vi) wii) Dr. Note? Number of equity shares = [eS Perea artical Enis Capi 15 oP Siaement of Pro 1 Didend) Pat & Meche lacing pg) | UNIVERSITY SERIES [a Preference Share CapiiNc Or. “To 15% Preference Share Capital AC To Reconstruction Alc (Preference Share Capital Reduced) 22.50] ° Reconstruction Alo [s2sonan0 ax $8250) Dr. ToEquiy Share Capital (2.50 each) (£2.8,000" equity shares of 5, 2.50 pid issued to pret tence shareholders for dvidend arears vide the scheme of Reconstruction) 10% First Debentures Alc Or. 10% Second Debentures A/c Dr. Creditors Alc Dr. Bank Alc Dr. ToAs Alc | (eta amount eo Me Atanséered oh) AsAlc Or. To Reconstruction Alc To 12% Debentures A/c (Fresh 12% Debentures issued to A) 10% First Debentures Alc 410% Second Debentures Alc t Creditors Ac . Dr. ToBsAc (The total amount due to Mr. B transferred to his Alo) BsAlc : To Reconstruction Alc To 12% Debentures Alc (Fresh 12% Debentures Issued to B) Trade Creditors Alc To Reconstruction A/c To Bank Alc To Equity Share Capital Alc ‘econstruction Alc To Statement of Profit & Loss ve ToPlant & Machinery Alc (Balance) (Balance amount transferred to capital) (isha of Trae Cred , aseeer eens 000000. | = x 482913}u] a a = 001 “T9g. 7 H EH aS PYT H Aq pasmboe azom sazeys ooo PIE jo, = ic TEL0T0 UO fende> ayy Mg, a oN (Gazeys ¢ A1ana 303 Z) 1Z'TL'T0 vo pansst sareys smog a ute Bea nb one WEN TE Uo prude axeys jojo, 7 seams Joon % saunys fhyrioury fo NonoIny 2210N Burp ani (ct=94s+4) Ge0d (PRI sie “Arexpisqns si pue “pry H J0 224s 22UPIPq Paepr[osuoD ap 0} UDYE} aq 0 UNO294) 7.» PatepyosuoD jo aoueqeg amp pure ortu0> Jo380 ‘SazeRU ANLOUIN PAREIMITED poz, “BUTUDEIN SHIA UO PH S Aq papiaoad sem ve'd qOT Je UOHeDExG2C 4809 UO 9c) S80] © 00/09/62 10} SUIUDEIN PY SO} PIS "PITH 'Z20C 1010 UO ZZ0Z'E0'TE IIH 1809 51, %0C JO ayosd w ye Q00'Ze’LT2 10} spoo8 asatf] Jo AUIOS PIOS “PIT H I$02 UO 942 0 Yor yp PU SEM Y>ryAr ‘PY G WIOIy y0}s Jo aseyosnd AYA 105 090'0O'ZI2 PY1S P2M0 “PIT 1 (2) “PF1S.9} 000'g2 Aquo pred 1amsut ayy yoryan joutese paAonsap arm 000'F62 Suins09 spoog “120g eum{ Sutatiq|“uaAy8 ua9q 19K sey yoayfa SuuO29e Ou ng "urd QQ /pp2 aBreyP pynoys py» H ‘Parepuar saotates 404 ‘Toe Apnf as] Woy jaye YIM Jeu pooi8e “PY] s pur “Py 1 ()) “peut aq 01304 are squauysnfpe Aressa0au YoTYM 10$ ‘{Z0Z'Z0'1 UO 000/00'F3 JO UIz0m se Pesspisuoo SEM “TZOZ FOTO UO 000/00'ZT2 Te POOIS YrYM “PY s Jo samyxty 29 amNyTUM, ay “opeut oq 0} 124 axe sjuaumsn{pe Aressao9u Yorys 105 TZ0Z'Z0°T0 WO 000'00'8Z2 Jo Up0%4 se PotePisu02 SeM\“TZ0Z'FO' 10 U0 000‘00'C1L2 3 POoIs YOyM "py S30 SuIpring >y pueT ayy (2) ‘soxeys sntog asaup Jo 3d}20ou 24 10§ ‘PY [1 Jo 5009 aup ut passed ‘usoq sey Au9 oN sareys snttoq oe ‘play sareys ¢ Arana 40} IeYS Z Poss! PITS 1Z02'1| 0 NO HenoDW $60"] 39 WOT SHO} spuapiatp |e Jo ydiaoax ay paupaxd “pry F] 1202-0202 zea atp 205 sazeys Ambo uo 997 @ puapiarp pred pur PatePep “PITS “1Z07'80' LE UO (2) “000‘02’Te3 sea azep yeu) uo SATASEY [PIBUID Jo eUY pur 190/00'g2 sem 'P¥1§ JO yUNODoy s: ; t 907] 9 YO JO aoueyeq 31p2> 28 "TLOCF0'10 HO "1202'20'T0 UO 'PrT's Jo sareys Aamby ‘Qgg‘gz', pammiboe PILH @) pu sof ay ynoySnosy pouivo fitodo aay spfoud Here 22048 aif Wii unssy) wopeMo;L euORIppY o00'F9'Zt | 0000928 4 Sassy quaLm> 000°09'FF ae (1202'90"19 Uo uaar8) -pyy Hj ueoy cy = o0'or'oe PITS Ur sareyg Gmby Ooo‘os'or ‘| 000°00'9T SOMIXL 29 amyrung Oo0‘08rL | 000'00'8 Arauryseyy 39 yur) ooo'os'or | 000'00'Fz Surpying 29 pur} 000°00'0F 000‘07'6z SOMMqery uaxm> = 000'0F'0¢ Qseranuy Surpnpoun) py g Woy ue07 o00’zz’s 000'0FZL 5 SAY $807] 39 YOK 000'29'Sz 000‘00'F PMBSIY TPIDUIS) 00'00'sz __| 000'00'or 209 012 J0 samvug Ambq ()pIs_|_(@) PFTH eee ae moet PRA we J Se “PVT S Pue ‘PT H Jo Haus auETER Ay WON SPEAK OHI aH” MOTO UaAIey «ey 67-1 8eq] ‘PraIdeUD ‘OLD 29g (a) €£-d m (@NAL-AVIN) 7202 DNILNMODIV ALVYOLIOSTy SERIES Minority Interest ‘Particulars aid up va of Ey Shares (inducing Bonus Shares) ean ‘Share of Minority in Capital Profit ofS Lid. Share of Morty nReverue profit SU : Share of Minority in Revenue reserves of S Ltd. Lose: Share of Minoriy in Unrealised profit on Inventories [(20% of 12,00,000) * a0 *, Total (8) _ Goodwill/Capital Reserve on Consoli Particulars Fadop vate of Ely Shares eluding Bonus Shares) heldby Hit [%28,00,000 hare of H Ltd. in Capital Profit ofS Ltd. Net cost of Investment [Cost paid less dividend out of pre-acqusition profits credited] (€20 40,000 ~ (212,00,000 » 20% x 12/12) D. Capital Reserve (A+B-C) © Balance of Consolidated Profit & Loss A/c Particulars Balance as given inthe Balance Sheet of H Ltd. ‘Add: H Ltd's Share in Revenue Profit of S Ltd. A: nce yazan : Final Dividend out of pre-acquistion profits [400,000 x 60%] ‘Add: H Ltd's share in Unrealised tice eee } [20% of €12,00,000 x 2/90 x 60%] Addl: H Lid’ share in Unreased loss on machine {(€8,60,000 x 173) - (%3,20,000 x 10% x 3/,9)} x 100% (Closing Balance tobe taken to the consolidated ; ——_ Balance Sheet (A+ B-C) p-74 m Shiv Das DELHI UNIVERST a) (000 « 40%} dation [Cost of Control] beara ‘Loss of Inventories Final Dividend for Previous Y General Reserve fear Balance o/d “soy Galeulstigner cee 2 Bie on of Change inthe Value of Fixed Asse siation on Revalued figure 0% 10% x 9/12) and [€4,00,000 « 10% * 9/12) on already provided (°1,20,000 - £30,000) ation still tobe provided Depreciation to be written back) &-¢ Analysis of Profits and Reserves of § Lig Capital > Profits ) Balance of General Reserve Utilized for issue of Bonus Shares Fves Created [°7,92,000 in 1 : 3] ening Balance of Profit & Loss A/c Dividend for the Previous Year of Inventories (894,000 - 78,000) £€4,00,000 in 1:3} to General Reserve __ Particulars Equity Shares of €10 each Reser fom S Ltd. (including Interest) Current Liabilities a & Buildi Plant & Ma a sJmiture & Fixtures tauity Shares in S Ltd. Cy, Loan to H Ltd. (given on 01.06.2021), Attent Assets 3P-76 & Shiv Das DELHI UNIVERSITY SERIES shares, No entry has been passed in the books of H Ltd. for the receipt of these bonus shares. (9 The Land & Building of S Ltd. which stood at #12,00,000 on 01082021, was considered as worth of %28,00,000 on 01.07.2021, for which necessary adjustments Fixtures of S Ltd. which stood at %12,00,009 are yet to be made. The Furniture & on 01,04.2021, was considered as worth of %4,00,000 on 01.07.2021, for which necessary adjustments are yet to be made. ' (d) H_Ltd. and $ Ltd. agreed that with effect from Ist July 2021, for services rendered, H Lid. should charge %40,000 p.m. but no accounting effect has yet been given. During June 2021, goods costing 294,000 were destroyed against which the insurer paid only %8,000 to S Ltd. H Ltd, pwed S Ltd, 212,00,000 for the purchase of stock from S Ltd. which was made at a profit of 20% on cost. H Ltd. sold some of these goods for %11,52,000 at a profit of 20% on its cost till 31.03.2022. On 01.01.2022, H Ltd. sold to $ Lid, 4 Machine for %9,60,000 at a loss of 25% on cost. Depreciation at 10% p.a. was provided by Ltd. on this Machine. Required: Calculate the Minority Interest, Cost of Control and the Balance of Consolidated P & L Account to be taken to the Consolidated Balance’Sheet of H Ltd. and its subsidiary, as at 315 March, 2022. (4+5+6=15) Sol. Except for Point (a), both the questions Q. 5 and Q, 5(Or) are same. Necessary workings for the change are being given. € Working Note: *, Dr. General Reserve of § Ltd. Cr. Particulars @) Particulars @ Equity Share Capital (Bonus) B,00,000 | Balance b/d 32,18,000 Balance c/d 25,62,000 | Profit & Loss A/c (Bal. fig.) 1,44,000 33,62,000, 33,62,000 *, Dr. Profit & Loss A/c of S Ltd. Cr. Particulars @. Particulars @) a aed ,00,000 | Balance b/d 7,600 for Previous Year eciser anes saan | ontesemed Bal fig) 300,000 Balance c/d 5,22,000 10,66,000 10,66,000 + Analysis of Profits and Reserves of S Ltd. Capital Revenue | Revenue Profits) | Profit @) | Reserve @) ‘Opening Balance of General Reserve 32,1800 Less: Utilized for issue of Bonus Shares 6,00,000) Reserve Created 144,000 Opening Balance of Profit & Loss A/e 7,66,000 Less: Final Dividend for the Previous Year (4,00,000) Profit earned Less: Transfer to General Reserve : Add: Increase in value of Fixed Assets 16,30,000 Less: Short Provision of Depreciation (L & B) Less: Decrease in Value of Fixed Assets (F & F) Add: Excess Depreciation to be Written back (F & F) Add: Interest not yet credited Less: Expenses not yet debited (740,000 * 9) Total Share of Minority @ 40% Share of Holding Company @ 60%