Corporate Accounting — Winter 2018

Explain the differences between Receipts and Payments Account and Income and Expenditure Account.

What do you mean by Cash Flow Statement? Explain the differences between Cash Flow Statement and Fund Flow Statement.

Acompany offered 1000 equity shares of Rs. 100 each to the public. The amount was payable as follows:- A. Rs. 50 on Application (Including Rs. 10 Premium) B. Rs. 30 on Allotment; and C. Rs. 30 on Call. Applications were received for 3000 shares. Applicants for 1000 shares were not given any allotment and their application money refunded. Rests of the applicants were given pro-rate allotment. Xto whom 100 shares were allotted did not pay any money except that with his application. The issue was completed and rest of the applicants paid their amount when due. Excess Application money adjusted on allotment and calls. Share of Xwere forfeited and reissued to Yat Rs. 50 each as fully paid up. Give the journal entries of above transactions.

Give the journal entries with the suitable examples when a Company issues their shares (a) At Par (b) At Premium and (c) At Discount.

Explain the Followings:- Buy Back of Shares B. Pro-rata Allotment

Prepare the Income And Expenditure Account from the following details:- Receipts and Payments Account for the year ending 31st March 2016 Rs. Rs. To Balance b/d 20000 By Salaries 30000 To Subscriptions 60000 By Misc. Expenditure 5000 To Furniture 9000 By Balance c/d 54000 Other Information:- (A) Outstanding subscription was Rs. 3000 and subscription received in advance was Rs. 500 on 1st April 2015 (B) Subscription outstanding is Rs. 4000 and subscription received in advance is Rs. 1000 on 31st March 2016 (C) Loss on sale of furniture Rs. 1000 (D) Salary outstanding was Rs. 2000 on 1st April 2015 and salary outstanding is Rs. 2500 on 31st March 2016.

What journal entries will be passed in each of the following cases for issue and redemption of debenture?1 A. 1000- 7% Debentures of Rs. 100 each issued at Rs. 98 and repayable at par. B. 1000- 7% Debentures of Rs. 100 each issued at par and repayable at Rs.102 C. 1000- 7% Debentures of Rs. 100 each issued at Rs. 98 and repayable at Rs. 102

Following is the trial balance of Mahesh Limited as on 31st March 2016 Particulars Debit Amount Credit Amount Equity Share Capital 300000 12% Preference Share Capital 200000 Reserve fund 150000 Building 500000 10% Debenture 200000 Plant & Machinery 200000 Purchases & Sales 250000 600000 Salary 60000 Debtors & Creditors 230000 175000 Bills 80000 90000 Director’s Fees 20000 Bad Debts 5000 Returns 15000 20000 Wages 15000 Opening Stock 45000 P&L Account 1-04-2015 60000 Loose Tools 60000 Goodwill 80000 Discount of issue of shares 20000 Cash and bank balances 33000 12% Investments (1-04-2015) 200000 Interest of Investments 18000 Total 1813000 1813000 Adjustments:- 1. Closing Stock is valued at Rs. 140000 2. Outstanding Wages Rs. 2500 3. Debenture interest is outstanding for current year 4. Write off further bad debts Rs. 5000 5. Building and Plant & Machinery to be depreciated by 5% and 10% respectively. 6. Transfer Rs. 25000 to reserve. 7. The director propose 15% dividend to equity shareholders. You are required to prepare company’s Income Statement (P&L) a/c in vertical format with necessary working notes

Prepare the Balance Sheet of Mahesh Limited as per the information given in above question (Q.3 (a) ) in Company form with necessary working notes

What do you mean by Goodwill? Describe in which circumstances valuation of goodwill is necessary.

Xand Yare partners in a firm. The Balance sheet of their business on 31 March 2016 is as follows:- Balance Sheet as on 31st March 2016 Creditors 34000 Cash 10000 General Reserve 50000 Stock 50000 Profit & Loss a/c 18000 Debtors 800002 Capital :- X 110000 193000 Furniture 10000 Y 83000 Machinery 100000 Goodwill 45000 The above business is intended to be purchased by Z. The assets have been revalued as follows: Stock Rs. 55000/-, Furniture Rs.8000/-, Machinery Rs. 150000/-. It has been agreed that provision for bad debts on debtors is to be made @ 5% on debtors in future. Future Rate of depreciation is 5% on Furniture & 15% on Machinery. The profits of the past five years are like this : 2011-12 Rs. 60000, 2012-13 Rs.50000, 2013-14 Rs.30000, 2014-15 Rs.40000, & 2015-16 Rs. 65000. The normal rate of profit on average capital employed is 15% p.a. Ignore income tax. Calculate the amount of goodwill on the basis of Actual Average & Super Profit by Capitalization method.

Under what circumstances it become necessary to determine the value of shares of a concern? What points are taken into consideration while determining the value of shares?

On the basis of the following information of Jai Shree Ltd. Calculate value of its equity share on the basis of Expected rate of Return Method. 50000 Equity Shares of Rs. 100 each Rs 80 paid up Rs. 40,00,000 10% Preference Share Capital Rs. 20,00,000 Profit before Tax Rs. 65,38,461 Rate of Taxation 35% Normal Rate of Return 15%

Explain the meaning and importance of funds flow statement. How funds flow statement is is prepared?

From the following Balance Sheet of Bharat Company Ltd., prepare statement of change in working capital. Balance Sheets of Bharat Company Ltd. Liabilities 31/03/15 31/03/16 Assets 31/03/15 31/03/16 Share Capital 500000 500000 Fixed Assets 600000 700000 Debenture 370000 450000 Long-term 200000 100000 Investment Tax payable 77000 43000 Work in 80000 90000 Progress Accounts 96000 192000 Stock in trade 150000 225000 payable Interest 37000 45000 Bills 70000 140000 payable Receivables Dividend 50000 35000 Cash 30000 10000 payable

Jindal Steel Ltd.’s transactions for the ending March 31, 2016 includes the following:- 1. Purchased real estate for Rs. 500000 which was borrowed from a bank 2. Sold investment securities worth Rs. 600000. 3. Paid dividend Rs. 300000. 4. Issued 500 equity shares for Rs.350000. 5. Purchased machinery and equipments for Rs. 175000. 6. Paid Rs. 750000 towards a bank loan. 7. Accounts receivable outstanding of Rs. 100000 was paid.3 8. Accounts payable were increased by Rs. 190000. Calculate the net cash flow from (A) Investing and (B) Financing activities

Calculate the Cash flow from operations from the following information Particulars 2014 2015 Debtors 50000 47000 Bills Receivables 10000 12500 Creditors 20000 25000 Bills payable 8000 6000 Outstanding expenses 1000 1200 Prepaid Expenses 800 700 Accrued income 600 750 Income received in advance 300 250 Profit during the year 130000 .