Corporate Accounting — Winter 2022

What do you understand by Receipt and Payment Account? How is it different from Cash Book?

Define Debenture and explain the various kinds of the debenture.

What do you mean by Goodwill? Explain the characteristics of Goodwill.

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

A Company issued 10000 equity shares of the face value of Rs. 10 each at a premium of 10% payable as to Rs. 3 on application, Rs. 4 on allotment ( including premium of Rs. 1 per share), Rs. 2 on first call and Rs. 2 on final call. All the shares are subscribed and duly allotted and both the calls were made. All cash is duly received except that a holder of 200 shares has not paid the final call. Aholder of 300 shares had paid the entire balance on his holding of 300 shares with allotment money. Journalise the above transactions in the books of Company.

The following figures relate to the trading activities of a Company for the year ended 31 March 2014. Sales 1000000 Rent 6000 Purchases 700000 Stationery 2000 Opening stock 110000 Depreciation 10000 Closing stock 140000 Other expenses 20000 Sales returns 40000 Provision for tax 70000 Salaries 48000 Dividend received 12000 Advertising 7000 Profit on sale of assets 60000 Travelling exp 5000 Loss on sale of 3000 investment You are required to prepare the Corporate Profit & Loss Account (Income Statement).

The net assets in a firm amounted to Rs. 200000. Out of this, Rs. 20000 is represented by investment in 5 % Government Securities, purchased at face value. The expected future profit is Rs. 30000. The normal rate of return is 10% on closing capital employed. Calculate the value of goodwill by:- 1. Three year’s purchases of expected profits; 2. Five year’s purchases of super profit.

From the following information and Receipts and Payments Account of a club, prepare Income and Expenditure Account and Balance Sheet for the year ending Dec. 2018 Page 1 of Receipts Rs Payment Rs To Balance b/d 4000 By Rent 2400 To Entrance fees 600 By Wages 2600 To Subscriptions 21400 By Lighting Charges 1000 To Donations 4000 By Books Purchases 3000 To Life Membership fees 3000 By Office Expenses 4000 To Interest on Deposit 500 By 10% Fixed Deposit ( 20000 on July 1, 2018 To Proceeds of 4500 By Tournament 3600 Tournaments Expenses By Balance c/d 1400 Other Information’s:- 1. On Dec 31, 2017, the club possessed books worth Rs. 25000 and furniture worth Rs. 10000. Provide Depreciation on these assets @ 10% including the purchases during the year. 2. Subscription in arrears at the beginning of the year amounted to Rs. 500 and at the end of year Rs. 800 was outstanding.

Explain and illustrate the concept of Buy-back of shares.

Explain the meaning of Cash Flow Statement and Classification of Cash Flow.

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

The following information’s are related to a Company:- Profit After Tax Rs. 10,00,000 12% Preference share of Rs. 100 each Rs. 10,00,000 Equity shares of Rs. 100 each Rs. 50,00,000 Normal rate of return 15% 80% of profits are distributed by the company. Ignore tax. Calculate the value per equity share by (a) Expected rate of returns method (b) Dividend rate method.

What is meant by valuation of shares? When is it necessary to value the shares and why?

Distinguish between Fund Flow Statement and Cash Flow Statement.

Balance sheet of M/s Ram and Sons as on 1 April 2015 and 31 March 2016 were as follows:- Balance Sheet Liabilities 1.04.2015 31.3.2016 Assets 1.04.2015 31.3.2016 Creditors 40000 44000 Cash 10000 7000 Mrs. Ram’s 25000 - Debtors 30000 50000 Loan Bank Loan 40000 50000 Stock 35000 25000 Capital 125000 153000 Machinery 80000 55000 Land 40000 50000 Building 35000 60000 Total 230000 247000 Total 230000 247000 Page 2 of During the year a machine costing Rs. 10000(accumulated depreciation Rs. 3000) was sold for Rs. 5000. The balance of provision for Depreciation against machinery as on 1st April 2015 was Rs. 25000 and 31st March 2016 Rs. 40000. Drawings for the year 2015-16 amounted to Rs. 17000. You are required to prepare (i) Statement of changes in working capital and (ii) Fund flow statement from the above informations.

Following are the summarized balance sheet of a Company as on 31st March 2015 and 31st March 2016 Balance Sheet Liabilities 2015 2016 Assets 2015 2016 Share Capital 500000 500000 Building 475000 500000 General Reserve 150000 125000 Machinery 422500 375000 Profit & Loss 76500 76250 Equipments 40500 45000 a/c Term Loan 155000 175000 Stock 74000 100000 Sundry 231250 275000 Sundry 160000 200000 Creditors Debtors Provision for 76250 84250 Cash 7000 3000 tax Bank 10000 - Goodwill - 12500 Other Information’s:- 1. Interim dividend paid Rs. 25000 2. Depreciation on premises is provided at 5% 3. Machinery of Rs. 75000 was acquired during the year 4. Income tax paid during the year was Rs.75000 With the help of the above information calculate the Cash flow from operating activities

Calculate the Cash flow from Investing activities and Cash flow from Financing activities of the above question. Page 3 of