From the following of Mehal Industries Co. Ltd., prepare a P & L A/c for the year ended on 31 st march, 2015 and Balance Sheet (vertical with all schedule) as on that date after making the necessary adjustments. Particulars Dr.(Rs.) Cr.(Rs.) 10% Preference share capital 1000000 Equity share capital 5000000 Reserve Fund 500000 6% Debentures 2000000 Goodwill 150000 Machinery 1000000 Building 5000000 Investments 2000000 Debtors & Creditors 1000000 500000 Purchases & Sales 6000000 9400000 Cash & Bank 100000 500000 Goods Returned 1000000 500000 Interest on Debentures & Interest on Investments 120000 300000 Salaries 960000 Rent, Rates & Insurance 240000 General expenses 380000 Depreciation of Fixed Assets 300000 Opening stock 1500000 Bad Debts Reserve -------- 50000 Adjustments : (1) Stock on 31-3-2008 was Rs. 2000000. (2) Write off Rs. 50000 as bad debts and provide Rs.50000 as bad debts reserve for debtors. (3) Make provisions for taxation Rs. 640000. (4) Transfer to Reserve Fund Rs.300000. (5) Board of Directors has proposed to pay 5% dividend on equity shares.
Explain the Followings:- A. Buy Back of Shares B. Pro-rata Allotment C.Bonus share
[7 marks]Describe in detail in which circumstances valuation of goodwill is necessary.
[7 marks]The net profits after charging taxation for the 5 years are :45000,42000,40000,46000 and 47000.The average capital employed in the business has been 400000 and the normal rate of return 10%.It is considered that the super profit will continue for the next five years. Ascertain the value of goodwill using annuity method. The present value of an annuity of 1 at10% for the five years is rs 3.78. Page 1 of
[3 marks]Explain the differences between Income and Expenditure Account and Receipts and Payments Account.
[7 marks]The following is the balance sheet of paras ltd as on 31 march 2015 Particulars Amt Particulars Amt Share capital(1000 shares 100000 Fixed assets 80000 of 100each) Creditors 50000 Debtors 30000 Other liabilities 20000 Stock 40000 cash 5000 bank 15000 profit of the company for the last 5 years have been :10000,12000,11000,14000,13000.The managing director of the company who was working in the honorary capacity now will have to paid annual salary of rs 3000.on the other hand ,the rent at 4000p.a which had been paid by paras ltd will not be charged in future, return on capital invested is 10% Calculate the value of good will by sing capitalisation of average profits method.
[7 marks]What do you mean by Good will? State various methods of valuing goodwill.
[7 marks]Write note on forfeiture of share. Q .4 (a) The share capital of a company is as follows 1)10000 ‘A’ equity shares of rs100each fully paid - 1000000 2)10000 ‘B’ equity shares of rs 100each rs 60 paid up - 600000 3)10000 ‘C’ equity shares of rs 100each rs 50 paid up - 500000 Paid up capital 2100000 General reserve 600000 Creditors 300000 The after tax average profit of the company is estimated to be rs 200000.the expected rate of return in such type of business is 10% Find out value of share 1)intrinsic value method 2)yield method
[7 marks]What are a debenture and its redemption? Describe the various methods for redemption of debentures in details.
Alimited makes a public issue of 100000 equity share of rs 10each at a discount of rs 1 per share ,payable as follows : On application and allotment rs On first call rs On second call rs Sunil holding 1000 shares does not pay the second call. His shares are forfeited. Out of these forfeited shares 500shares are reissued as fully paid up@ rs 5 per share. Pass necessary journal entries.
[2 marks]What is share capital? Discuss various types of share capital. Page 2 of
[3 marks]The following are summarized balance sheet of x limited as at 31 march 2013 and 2014 Liabilities 2013 2014 Assets 2013 2014 Equity share 150000 150000 Fixed assets 145000 160000 Pref share - 60000 Invest - 30000 General reserve 30000 40000 Stock 45000 65000 Pand l account 25000 70000 Debtors 20000 40000 Creditors 20000 15000 Bills receivable 6000 3000 o/d 5000 - Prepaid exp 25000 15000 Bills payable - 3000 Cash 13000 45000 Tax provision 10000 15000 advances Proposed dividend 20000 25000 Prepare a statement showing the changes in working capital.
[7 marks]Explain the terms: Ex-interest and Cum-interest in connection with the purchase and sale of debentures. Give suitable examples.
[7 marks]What is forfeiture of shares? What are the legal requirements necessarily followed by the Board before forfeiture of shares?
[7 marks]Explain fund flow statement. Discuss which parties will be benefited from the study of fund flow statement. Page 3 of
[3 marks]