Corporate Accounting — Summer 2020

The following information is in respect of Rajkot Gymkhana : Income Expenditure Account for the year ended on 31-12-2003 Expenditure Amt. Rs. Income Amt. Rs. Secretary’s salary 1500 Entrance fee 10500 Stationery Printing 2200 Subscription 15600 Advertising 1600 Rent-Receivable 4000 Audit fee 100 Depreciation on Sport 9000 Equipments Fire insurance 1000 Excess of income over 14700 expenditure (Surplus) Receipt-Payment Account for the year ended on 31-12-2003 Receipts Amt Rs. Payments Amt. Rs. Opening balance 4200 Secretary’s salary 1000 Entrance fee : Printing Stationery 2600 2002 1000 Advertisement 1600 2003 10000 Fire insurance 1200 Subscription : Purchase of investments 20000 2002 600 Closing balance 7800 Rent received 3000 On 01-01-2003 assets included club ground and pavilion Rs. 44,000, sports equipment Rs. 25000 and Furniture and fixtures Rs. 4000. Prepare balance sheet as on 1st January,2003 and 31st December 2003.

Following is the trial balance of Shivam Ltd. as on 31-03-2017 Particulars Debit (Rs.) Credit (Rs) Inventories 1,10,000 - Fixed Asset – Tangible 8,00,000 - 5000 equity shares of Rs. 100 each - 5,00,000 Sales - 7,50,000 Other income - 20,0001 Salary 1,30,000 - 12% Debentures - 3,50,000 Finance costs 17,500 - Trade payables - 1,00,000 Trade receivable 40,000 - Cash and bank balance 60,000 - Depreciation 22,500 - Cost of good sold 4,00,000 - Non-current investments 1,40,000 - 17,20,000 17,20,000 Additional information : 1) Provision for tax Rs. 80,000 Prepare final accounts of Shivam Ltd. as per companies act 2013 of Schedule –

(1) Classify following income and expenditure in to Capital expenses, Revenue expenses, Deferred revenue expenses, Capital Income and Revenue Income (1) Interest on Investment (2) Purchase of investments (3) Research Expenses. (4) Rent for hall (5) Books for Library (6) Large scale advertisement expenses (7) President felicitation fund (8) Scrap sales03 (2) How will you show following balances in balance sheet of a company as per schedule III of Companies Act, 2013? (1) Cash credit from bank (2) Provision for tax (3) Workers accident compensation fund (4) Custom deposit (5) Preference share capital (6) Prepaid tax

What is meant by fund flow statement? Explain its importance.

Explain the meaning of cash flow and fund flow and clarify the difference between two.

Dave ltd. Desires to purchase the running business of Vyas ltd. . The G/Wis be give 3-times of last 4 years weighted avg. Profit . The weight for each year is to be give in natural sequence & profit of last 4 years were as following. Year 2000 2001 2002 2003 Profit 12,400 15,600 16,500 22,690 You are also required to consider following particulars. 1) Erection Expense was of rs.3000 for machinery purchased on 1-9-2002 for the purpose of valuation if Goodwill. This erection expense amount is to be taken as capital expense. Also make an adjustment of 10% depreciation as per written down value method on this amount. 2) Closing stock of the year 2001 is overvalued by rs.12,000. 3) Management exp. of rs.24,000 is not recorded in above profit of every year .Compute Goodwill.

What does meant by share valuation? State the factors affecting valuation of shares.

The Balance sheet of Nilkanth Ltd. As on 31-3-2008 was as follows Liabilities Amt. Rs. Assets Amt. Rs. Share Capital : Fixed Assets 3,00,000 1000, 6% cumulative pref. Current Assets 2,50,000 share, each of RS. 100 1,00,000 Discount on Debenture 20,000 2000 eq. shares each of RS. Preliminary expenses 10,000 100 fully paid-up 2,00,000 P & L A/C 70,000 6% Debenture 90,0002 Debenture redemption fund 40,000 Capital Reserve 30,000 Depreciation fund 60,000 Creditors 1,30,000 6,50,000 6,50,000 Provision of Interest on Debentures has been left out in accounts of current year. Cumulative preference share dividend is in arrears for two years. Abill of stationary expenses of Rs. 600 is outstanding. The preference share holders are preferential as to return capital & arrears of dividend in the case of winding up of a company, but they have no further right to share in any surplus assets left thereafter. Give the following answers: (1) Ascertain the Intrinsic value of both sorts of shares. (2) Ashare holder named Mr. Sanjay holds 100 Eq. shares. Determine intrinsic value of his share. (3) Another share holder named Mr. Jayesh holds 10 cumulative pref. shares. Determine intrinsic value of his share.

Bhadresh diamond ltd. Of Surat issued 300000 equity shares of RS 10 per share. Amount called up on application at RS 3 per share, on allotment RS 2.5 per share, on first call at RS 2.5 per share and on final call at RS 2 per share. Applications were received from public of 456000 shares. Allotment of 300000 shares was made pro-rata to 450000 applicants. Applications for 6000 shares were rejected. Full amount were received from all shareholders except from a shareholder named Daxa. Daxa who was allotted 600 shares, did not pay final call money. Her shares were forfeited. Total shares of Daxa were reissued as fully paid up at RS 9 per share. Pass journal entries in the book of company for the above transaction. (Narration not required)

1) On 1-4-2017 Prathna Limited issued 6000, 11% debentures of Rs. 100 each at a discount of 5%. All the debentures are to be redeemed after 6 years as on 31-3-2023 at a premium of 10%. Pass necessary journal entries in the books of the company. 2) On 1-6-2017 Vandana limited issued 10,000, 8% debentures of Rs. 200 each at a premium of 5%. The debentures are redeemed on 31-5-2022 at Rs. 220 per debenture. Write the necessary journal entries in the books of company. (Narration not required)

What do you mean by share capital? State the types of share capital.

The balance sheet of Suneel Brothers Ltd. disclosed below balances on 31 December 2006. Particulars Amt Rs. 15 % Debentures 15,00,000 Debenture redemption fund 11,63,600 Debenture redemption fund investments : 10% Government securities 11,63,600 The contribution to the Debenture redemption fund was Rs. 1,30,800 per annum for the year 2007 and 2008. Debenture fell due for payment on 31 December,2008. Prepare the above accounts in the books of the company assuming securities are realized on 31 December, 2007 for a sum of Rs. 13,52,000 and interest on securities on 31 December, was immediately invested.

“P&Lstatement concentrates on the results from the activities of business unit, where as Fund Flow Statement concentrates on the activities of the business unit” Examine this statement.3

Which AS is applicable on cash flow statement? Explain types of activities in cash flow statement.

What is Fund flow statement? Explain the uses of it.

Bharat Tubes gives you the following balance sheets, prepare cash flow statement : Balance Sheets Liabilities 2014 Rs. 2015 Rs. Assets 2014 Rs. 2015 Rs. Creditors 1,00,000 90,000 Buildings 6,00,000 5,40,000 Bills Payable 1,50,000 1,30,000 Plant 2,00,000 1,50,000 Owner’s Capital 7,00,000 5,80,000 Stock 10,000 12,000 Debtors 70,000 45,000 Bills Receivable 60,000 45,000 Cash 10,000 8,000 9,50,000 9,50,000 9,50,000 9,50,000 Additional information : (1) There was neither any dividend payment nor any capital addition. (2) There was neither any sale nor any purchase of building and plant.