CORPORATE ACCOUNTS QUESTIONS -
Q1. Distinguish between internal reconstruction and external reconstruction.
Q2. X Ltd invited applications for 10,000 shares of Rs. 100 each at a discount of 6% payable as follows:
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|
Rs.
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On application
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25
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On allotment
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34
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On First and final call
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35
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The applications received were for 9,000 shares and all of these were accepted. All moneys due were received except the first and final call on 100 shares which were forfeited. Out of which 50 shares were reissued @ Rs. 90 as fully paid. Give journal entries in the books of the company.
Q3. Raghu Private Ltd was registered on 1st July 2005 to take over the running business of Mr. Chandran with effect from 1st April 2005. The following profit and loss account for the year ended 31st March 2006 was drawn up.
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Rs.
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Rs.
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To Commission
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2,625
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By Gross Profit
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98,000
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To Advertisement
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5,250
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By Bad Debts recovered
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500
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To Managing Directors remuneration
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9,000
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|
|
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To Depreciation
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2,800
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|
|
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To Salaries
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18,000
|
|
|
|
To Insurance
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600
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|
|
|
To Preliminary Expenses
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700
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|
|
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To Rent and Taxes
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3,000
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|
|
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To Discount
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350
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|
|
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To Bad Debt
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1,250
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|
|
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To net Profit
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54,925
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|
|
|
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98,500
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98,500
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Additional information:
(a) The average monthly turnover from July 2005 onwards was double than that of the previous months.
(b) Rent for the first three months was paid @ Rs. 200 per month and thereafter at a rate increased by Rs. 50 per months.
(c) Bad debts Rs. 350 related to sales effected after 1st September 2005 and the recovery of bad debts was in respect of debts written off during 2003.
(d) Advertisement expenses were directly proportionate to sales.
Required - Calculate profit prior to incorporation.
Q4. The paid up capital of Velan Ltd amounted to Rs. 2,50,000 consisting of 25,000 equity shares of Rs. 10 each. Due to losses incurred by the company continuously, the Directors of the company prepared a scheme of reconstruction which was duly approved by the court. The clauses of reconstruction were as follows:
(a) In lieu of their present holdings, the shareholders are to receive
(i) Fully paid new equity equal to 2/5 of their present holding
(ii) 5% preference shares fully paid to the extent of 20% of the above new equity share and
(iii) 3000 6% debentures of Rs. 10 each.
(b) An issue of 3,000, 5% debentures of Rs. 10 each was made and fully subscribed in cash.
(c) The assets were reduced as follows:
(i) Goodwill from Rs. 1,50,000 to Rs. 75,000
(ii) Machinery from Rs. 50,000 to Rs. 37,500
(iii) Buildings from Rs. 75,000 to Rs. 62,500.
Required - Give journal entries to give effect to the above scheme of internal reconstruction.
Q5. SS Ltd went into liquidation. Its balance sheet as on 1st April 2006 was as follows:
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Liabilities
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Rs.
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Assets
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Rs.
|
|
5,000 ordinary shares of Rs. 100 each Rs. 800 paid
|
4,00,000
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Land and Buildings
|
80,000
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|
Secured loan and land and buildings
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1,00,000
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Machinery
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2,60,000
|
|
Unsecured creditors
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1,90,000
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Stock
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1,05,000
|
|
Preferential creditors
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10,000
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Loans
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40,000
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|
|
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Cash
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5,000
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|
|
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Profit and Loss a/c
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1,10,000
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|
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7,00,000
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7,00,000
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Assets realized as follows:
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Rs.
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|
Land and Buildings
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1,20,00
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|
Machinery
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40,000
|
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Stock
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10,000
|
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Debtors
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20,000
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Loans are wholly bad. Liquidator remuneration Rs. 1,000 plus 2% on the amount paid to unsecured creditors. Liquidation expenses Rs. 1,000. Prepare liquidator Final statement of Account.