SONA COLLEGE OF ARTS AND SCIENCE, SALEM – 05 13.

A holding company is one that holds the

DEPARTMENT OF COMMERCE (ACCOUNTING & FINANCE) a) Whole of the share capital b) More than 50% of the share capital
MODEL EXAMINATION (MAY- 2023) c) Less than 50% of the share capital d) (a) or (b)
CORPORATE ACCOUNTING – II (21UAF09) 14. Profits earned by a subsidiary company upto the date of acquisition of shares by the holding
DEGREE: II - [Link] (A&F) YEAR: II company are called
DATE: 02/05/2023 TIME: 3 Hrs MAX MARKS: 75 a) Revenue profits b) Capital profits
c) Revaluation profits d) Realization profits
SECTION –A (15X1=15) 15. Out of the unrealized profits, a holding company’s share is reduced from the stock and
ANSWER ALL THE QUESTIONS: a) Profit and Loss A/c b) Goodwill
c) Minority Interest d) Capital A/c
[Link] an existing company takes over the business of one or more existing companies, it is SECTION –B (2X5=10)
called ANSWER ANY TWO QUESTIONS
a) Amalgamation b) Absorption 16. Calculate the purchase consideration using Net Assets method from the following details of
c) External reconstruction d) Internal reconstruction Romy Ltd. to Samy Ltd.
2. The excess of net assets over the purchase price is i)Romy Ltd. agreed to discharge 7% debentures at a premium of 10% by issuing 9%
a) Goodwill b) Capital reserve debentures of Romy Ltd.7% debentures amounted to Rs. 3,50,000.
c) Capital redemption reserve d) Revenue reserve ii) Samy Ltd. had fixed assets Rs. 16,25,000, Investments Rs. 3,00,000, Current Assets Rs.
3. Value of assets taken over – Value of liabilities taken over = 2,50,000 and Current liabilities Rs. 2,50,000.
a) Lump sum method b) Net asset method Romy Ltd. revalued the assets as follows: Fixed assets 10% above the book value, Investments
c) Net payment method d) Intrinsic value method at par, Current assets Rs. 2,50,000 and current liabilities at par.
4. The balance in Capital Reduction Account is transferred to 17. Calculate the liquidator’s remuneration in the following case:
a) General Reserve b) Profit and Loss account Rs.
c) Capital reserve d) Goodwill Account Assets realised 8,00,000
5. Creditors’ voluntary winding up of a company applies to Preferential Creditors 2,50,000
a) Insolvent companies b) Solvent companies Unsecured Creditors 5,80,000
c) Private Companies d) Public Companies 6% Debentures 3,00,000
Liquidation expenses 15,000
6. In case of internal reconstruction the existing company will be
Liquidation remuneration:
a) Liquidated b) Amalgamated
i)On amount realised 2 1/5 %
c) Absorbed d) Retained
ii)On amount paid to Unsecured creditors including preferential creditors 2%.
7. Every banking company is required to close its accounts
18. Draw a proforma of Balance Sheet of Banking Company with your imaginary figure.
a) 31st March b) 31st December
th 19. A life insurance Company prepared its revenue A/c for the year ended 31-3-2006 and
c) 30 June d) 30th September
ascertained its life insurance fund to be Rs. 22,34,400. It has found later that the following had
8. Provision for income tax is shown in the bank accounts under the head
been omitted from the accounts:
a) Borrowings b) Other liabilities
c) Operating expenses d) Contingent liabilities
Rs.
9. Rebate on bills discounted is
a)Interest accrued on investments 32,000
a) An accrued income b) An item of income Income tax liable to be deducted estimated to be Rs. 10,000
c) A liability d) Income received in advance b) Outstanding premium 31,400
10. Insurance business in India is now regulated by the provisions of c) Bonus utilised for reduction of premium 6,600
a) The Insurance Act 1938 b) The IRDA Act 1999 d) Claims intimated but not admitted 15,200
c) The Banking Regulation Act 1949 d) The Indian Companies Act 1956 e) Claims covered under reinsurance 5,300
11. The percentage of profit of life business to be distributed to policy holders is What is the true life assurance fund?
a) 95% b) 100% 20. Prepare a consolidated balance sheet. H Ltd acquired shares in S Ltd. on December 31, 2013.
c) 50% d) 40% The following was the balance sheet of H Ltd. and S Ltd. as on December 31, 2013.
12. A valuation balance sheet is prepared by Liabilities H Ltd S Ltd Assets H Ltd S Ltd
a) Joint stock company b) Banking Company Rs. Rs. Rs. Rs.
Share capital 40,000 20,000 Shares in S Ltd. 16,000 -
c) Life Insurance company d) General insurance company.
(Rs. 10 per share) (1600 shares)
 Sundry liabilities 20,000 10,000 Other assets 44,000 30,000 Preferential creditors - Rs. 70,000
/ Debentures - Rs. 75,000
60,000 30,000 60,000 30,000 The assets realised the following amounts:
Cash in hand - Rs. 20,000
SECTION –C (5X10=50) Land and Building - Rs. 1,30,000
ANSWER ALL THE QUESTIONS Plant and Machinery - Rs. 1,10,500
21. a) Raghu Ltd. and Ram Ltd. have agreed to amalgamate to form a new company Raghuram Ltd Furniture and fittings - Rs. 7,500
as on 31.12.2014. the balance sheet of the companies are as follows: The liquidation expenses amounted to Rs. 2000. A call of Rs. 2 per share on partly paid 10,000
Liabilities Raghu Ltd Ram Ltd. Assets Raghu Ram equity shares was made and duly paid except in case of one share holder owing 500 shares.
Rs. Rs. Ltd. Rs. Ltd Rs.
(Or)
Share capital of Rs. 20,000 50,000 Goodwill - 6,000
b) Te following is the balance sheet of Weak & Co as on 31.3.2019.
10 each Plant 14,000 20,000
General reserve 16,000 - Furniture 8,000 12,000 Liabilities Rs. Assets Rs.
Capital reserve - 4,000 Stock 16,000 8,000 1,00,000 equity shares of Land 1,00,000
P & L A/c 4,000 - Sundry debtors 10,000 17,000 Rs.10 each 10,00,000 Plant & Machinery 2,30,000
Loan from Bank 10,000 16,000 Cash at bank 12,000 7,000 Sundry creditors 1,73,000 Furniture and fittings 68,000
Creditors 10,000 6,000 P & L A/c - 6,000 Stock 1,50,000
Debtors 70,000
60,000 76,000 60,000 76,000 Cash at bank 5,000
Raghuram Ltd took all assets and liabilities of both companies at book values except cash at bank, P & L A/c 5,50,000
creditors and goodwill of Ram Ltd which was considered as worthless.
11,73,000 11,73,000
The purchase consideration was fixed at Rs. 60,000 to Raghu Ltd and Rs. 40,000 for Ram Ltd.
Scheme of capital reduction was
Fully paid equity shares of Rs. 10 each were issued to settle the purchase price for both he
i) The equity shares to be reduced to Rs. 4 per share
companies.
ii) Plant and machinery to be written down to Rs. 1,50,000
Cash at bank of both the companies was exactly sufficiently to settle their creditors at 10%
iii) Stock to be revalued at Rs. 1,40,000
discount and pay liquidation expenses.
iv) The provision on debtors for doubtful debts to be created Rs. 2,000
Show the necessary ledger accounts in dissolving companies and prepare balance sheet of
v) Land to be revalued at Rs. 1,42,000
Raghuram Ltd.
Pass journal entries and prepare the reconstruction account.
(Or)
23) a) From the following information prepare the profit and loss account of ABC Bank Ltd., for
b) A Ltd and B Ltd have agreed to amalgamate. The new Co. C Ltd have been formed to take over
the year ended on 31starch 2020 in the prescribed form
the combined concerns. The balance sheets on December 31,2013 was as follows:
Interest on loan 259000
Liabilities A Ltd. B Ltd. Rs. Assets A Ltd. B Ltd Rs. Interest on fixed deposit 275000
Rs. Rs.
Rebate on bills discountes required 49000
Share capital 5,00,000 10,00,00 Land & Buildings 3,00,000 5,00,000
Commission 8200
Reserve fund 50,000 0 Machinery 2,50,000 2,00,000
Establishment 54000
Creditors 50,000 - Patents 50,000 1,10,000
Discount on bills discounted 195000
P & L A/c 50,000 80,000 Stock 20,000 1,50,000
50,000 Debtors 20,000 1,20,000 Interest on cash credit 223000
Cash at bank 10,000 50,000 Interest on current account 42000
Rent and taxes 18000
6,50,000 6,50,000 11,30,000 Interest on overdraft 154000
11,30,00 Director's Fees 3000
0 Auditor's Fees 3000
The assets and liabilities will be taken by C Ltd. The amount payable for purchase consideration in Interest on Savings bank account 1200
shares. Show the journal entries and balance sheet of a new company. Postage and telegram 68000
Printing and stationery 1400
Sundry charges 1700
22) a) Prepare liquidator final statement allowing for his remuneration at 2% on the amounts
realized on assets and 2% on amounts distributed to unsecured creditors (other than preferential
Additional information
creditors).
 Bad debts to be written off amounted to Rs. 40,000 provision for taxation may be made
Unsecured Creditors - Rs. 2,24,000
@ 55%
  Balance of profit from last year was Rs. 120000 . Ltd Rs. Ltd Rs. Ltd Rs. Ltd Rs.
 The directors have recommended a dividend of Ram 20,000 for the shareholders Shares of Rs. 10 10,00,00 3,00,000 Premises 4,50,000 1,20,000
each 0
(Or) General Reserve 4,00,000 1,25,000 Machineries 3,50,000 1,60,000
b) Prepare an imaginary balance sheet of a banking company, showing all schedules. Profit and loss A/c 3,00,000 1,75,000 Furniture 80,000 30,000
Sundry creditors 1,00,000 70,000 Debtors 3,00,000 1,70,000
24) a) Prepare revenue A/c of life insurance business in prescribed form as per IRDA regulations
and explain the items there in. Stock 3,20,000 1,60,000
(Or) Investment on 2,60,000 Nil
b) Prepare in the proper statutory form the Revenue account of the Super Insurance Company Ltd. Colonial Ltd
For the year ended 31st March 2006 from the following figures: (20,000 shares )
Cash balance 40,000 30,000
Rs. ('000) Rs.('000) 18,00,00 6,70,000 18,00,000 6,70,000
Claims by death 76,140 Expenses of Management 31,920 0
Claims by maturity 30,110 Commission 9,574 Additional information
(a) Imperial Ltd. acquired the shares of Colonial ltd. on 1.4.2000 when the balance on its profit and
Premiums: 2,50,000 Interest, dividends 97,840
First premiums & rents loss a/c and general reserve were 75,000 and 80,000 respectively.
Renewal premiums 3,55,690 Income tax on interests, 35710 (b) Stock of 1,60,000 held by colonial ltd. consists of 60,000 goods purchased from Imperial Co.
Dividends etc . ltd who has charged profit at 25% on cost.
Single premiums 1,00,000 Surrenders 13,140 Prepare consolidated balance Sheet
Transfer fees 129 Bonus in reduction of 980
premium
Consideration for 82,127 Dividend paid to 5,500
annuities granted less Shareholders
re assurance Question Paper Setter Head Of Department
Annuities paid 53,461 Amount of life insurance 15,21,000 (Mrs. G. JAYA PENNARASI) (Dr. C. JAGANATH)
fund at the beginning of the
year
Bonus paid in cash 2,416

25) a) Consolidate the following Balance Sheets :

Liabilities H Ltd S Ltd Rs. Assets H Ltd S Ltd

Rs. Rs. Rs.
Share capital ( of Rs. 1,40,000 1,00,000 Sundry Assets 88,500 1,51,00
10 each ) 0
Sundry creditors 35,000 19,000 9,000 shares in S 1,12,50
Ltd 0
Profit and loss A/c 26,000 32,000
2,01,000 1,51,000 2,01,00 1,51,00
0 0

On the date of acquisition of shares by H Ltd. In S Ltd., the credit balance of profit and loss
account was Rs. 22,000. No dividend was declared since that date.
(Or)
b) The balance sheets of Imperial Ltd. and Colonial Ltd. as on 31st March 2001 is as under

Liabilities Imperial Colonial Assets Imperial Colonial