T.Y.BAF Financial Accounting Paper V Marks: 75 Sem V Pre Final Exam 2 (2017) Time:2 ½ hrs.

Transcription

1 Bandra West Vile Parle West H. O. : Shop No. 5, Hill Crest Society, 16 th Road, Bandra (W), Mum: 50. Ph: Branch : Avon Arcade, Shop No. A/121, 1 st Fl.,Vile Parle (W), Mumbai: 56. Ph: / T.Y.BAF Financial Accounting Paper V Marks: 75 Sem V Pre Final Exam 2 (2017) Time:2 ½ hrs. Note: (1)Attempt all questions subject to internal choice. Q.1. [A] Fill in the blanks : (Any 8 out of 10) (8) 1. The provisions of buy back of shares are specified in section of Companies Act 2. There are two types of winding up viz. (a) (b). 3. The full balance of capital is to be debited, if value is reduced. 4. Deficiency or surplus A/c id prepared as per list. 5. A contract whereby one party undertakes to subscribe for shares in the event of undersubscription is known as of Shares. 6. Indian Companies Act, requires companies to complete minimum subscription of %. 7. Dissolution expenses paid by purchasing company are debited to Accounts in purchase. 8. Payment of reconstruction expenses is debited to. 9. Revaluation Reserve is not a 10. Accounting for amalgamation is governed by. Q. 1.[B] State True or False (Any 7) (7) 1. Internal reconstruction is one of the varieties of amalgamation. 2. Scheme of amalgamation requires approval by 75% of shareholders of every company involved. 3. Consolidation of shares result in profit for a company. 4. Underwriting commission cannot exceed 3% of issue price of debentures. 5. In compulsory winding up, remuneration of liquidation is fixed by the court. 6. Statutory reserve can be utilized to set-off loss under the scheme.. 7. A company cannot subdivided shares. 8. Buyback must be as per RBI guidelines. 9. Wages & Salaries are preferential creditor 10. Purchase consideration includes payment to creditors also. Q.2. Jabong Ltd. and Amazon Ltd. were amalgamated on and from 1 st April A new company namely Snapdeal Ltd. was formed to take over the business of Jabong Ltd. and Amazon Ltd. (15) Balance Sheet as on 31 st March, 2015 Liabilities Jabong Ltd.` Amazon Ltd. ` 1 Assets Jabong Ltd.` 3,00,000 1,50,000 75,000 2,00,000 1,25,000 Amazon Ltd. ` 1,50,000 1,80,000 20,000 1,00,000 2,00,000 Equity Shares of `100 each fully paid 4,00,000 3,75,000 Land & Building Plant & Machinery 12% Preference Shares of Computers `100 each fully paid 1,50,000 1,00,000 Stock Genera Reserves 85,000 75,000 Debtors Profit & Loss A/c 25,000 15,000 Bills Receivables 90,000 20,000 Statutory Reserves 1,00,000 75,000 Bank 60,000 80,000 10% Debenture of `100 30,000 15,000 each Sundry Creditors 1,10,000 70,000 Bills Payable 1,00,000 25,000 10,00,000 7,50,000 10,00,000 7,50,000 P.T.O.

2 Additional Information: (a) Snapdeal Ltd. issued five equity shares, for each equity share of Jabong Ltd. and four equity shares, for each equity share of Amazon Ltd. The shares are of `10 each, issued at ` 30 each. (b) Preference shareholders of both the companies are issued equivalent number of 15% preference shares of new company at `150 per share (face value `100). (c) 10% Debenture holders of Jabong Ltd. and Amazon Ltd. are discharged by Snapdeal Ltd. issuing such number of its 15% Debenture of `100 each so as to maintain the same amount of interest. (d) Snapdeal Ltd. revalued following assets taken over from Jabong Ltd. and Amazon Ltd. : Jabong Ltd. ` Amazon Ltd. ` Land and Building Plant and Machinery Computers Stock Debtors 4,00,000 1,20,000 70,000 1,50,000 1,10,000 2,00,000 1,50,000 10,000 80,000 1,90,000 You are required to (i) Compute Purchase Consideration (ii) Pass Journal Entries in the books of Snapdeal Ltd., under purchase method. Prepare Balance Sheet of Snapdeal Ltd. after amalgamation. OR/- Q. 2. Ranbir Limited & Shahid Limited carry on business of a similar natures and it is agreed that they should amalgamate. A new company, Ranbir and Shahid limited is to be formed to which the assets and liabilities of the existing companies, with certain exception, are to be transferred. On 31 st March, 2015 the Balance sheets of the two companies were as under:- (15) Ranbir Limited Balance Sheet as at 31 st March, 2015 Liabilities ` Assets ` Issued & Subscribed Freehold Property, at cost 2,10,000 Share capital 30,000 Equity shares of ` 10 each, fully paid General Reserve 3,00,000 1,60,000 Plant & Machinery, at cost less depreciation Motor Vehicles, at cost less depreciation 50,000 20,000 Profit & Loss Acc 40,000 Inventory 1,20,000 Trade Payables 1,50,000 Trade Receivables 1,64,000 Cash at Bank 86,000 6,50,000 6,50,000 Shahid Limited Balance Sheet as at 31 st March, 2015 Liabilities ` Assets ` Issued & Subscribed Freehold Property, at cost 1,20,000 Share capital 16,000 Equity shares of ` 10 each, fully paid Profit & Loss Acc 1,60,000 40,000 Plant & Machinery, at cost less depreciation Inventory Trade Receivable 30,000 1,56,000 42,000 6% Debentures 1,20,000 Cash at Bank 36,000 Trade Payables 64,000 6,50,000 6,50,000 Assets & Liabilities are to be taken at book value, with the following exceptions: 1. Goodwill of Ranbir limited & Shahid Limited is to be valued at ` 1,60,000 & ` 60,000 respectively. 2. Motor vehicles of Ranbir Limited are to be valued at ` 60, The debentures of Shahid Limited are to be discharged by the issue of 6% Debentures of Ranbir & Shahid Limited at a Premium of 5% 4. The Trade receivables of Shahid Ltd. realized fully and bank balance of Shahid Ltd. are to be retained by the liquidator and the trade payable of Shahid Ltd. are to be paid out of the proceeds thereof. P.T.O. 2

3 You are required to: a. Compute the basis on which shares in Ranbir & Shahid Limited will be issued to the shareholder of the existing companies assuming that the nominal value of each share in Ranbir & Shahid of the existing companies assuming that the nominal value of each share in Ranbir & Shahid Limited is ` 10. b. Draw up a Balance sheet of Ranbir & Shahid Limited as of 1 st April, 2015,the date of completion of amalgamation. c. Write up journal entries, including bank entries, for closing the books of Shahid limited. Q.3. The following is the Balance Sheet OLYMPIC GAMES LTD. as at (15) Liabilities ` Assets ` 6,000 10% Preference shares 6,00,000 Goodwill 2,40,000 of ` 100 each fully paid Plant and Machinery 3,00,000 12,000 Equity shares of Furniture 1,24,000 ` 100 each fully paid 12,00,000 Computers 4,00,000 Debentures (secured against Investments 1,50,000 plant and machinery) 2,40,000 Stock 4,22,000 Outstanding Debenture 12,000 Debtors 5,16,000 Interest Bank Overdraft 3,30,000 Profit and Loss A/c 5,28,000 Director s Loan 1,50,000 Preliminary Expenses 1,20,000 Creditors 2,68,000 28,00,000 28,00,000 Notes: (1) There is contingent liability for damages of ` 60,000.; (2) Preference dividend is in arrears four yea` The following scheme of Capital Reduction was approved by the Court. (a) Preference shares are to be reduced to `80 per share and Equity share to `25 per share. Both the shares were consolidated at ` 100 each fully paid. (b) Preference shareholders agreed to give up three fourth of their dividend in arrears and to take up Equity shares of `100 each fully paid for the balance amount of their claims. (c) Investments were to be sold for ` 3,00,000. (d) Debtors are to be reduced by ` 16,000, Stock by ` 44,000, Computer by `1,44,000. (e) Part of Plant and Machinery (Book value ` 1,08,000) was taken over by the Debenture holders for `1,20,000 in part satisfaction of their claims. Outstanding debenture interest to be paid in cash. (f) Contingent liability materialized for the month mentioned in the notes, out of which the company recovered ` 30,000 from one of its directors out of his loan of ` 48,000. Balance amount out of ` 48,000 was also paid off. (g) All fictitious and intangible assets are to be written off. You are required to give:- (1) Necessary journal entries in the books of Olympic Games Ltd. regarding the above scheme.; (2) Revised Balance Sheet after scheme has been implemented.; (3) Capital Reduction A/c; (4) Bank A/c. OR/- Q.3.(a) Liquidation of CSK LTD. commenced on 2 nd April, Certain creditors could not receive payments out of the realization of assets and out of the contributions from A list contributories. The following are the details of certain transfers which took place in 2014 and 2015: No. of the transferor Shareholder No. of Shares transferred Date of ceasing to be a member 3 (8) Creditors remaining unpaid and outstanding on the date of such transfer (`) A 2,000 1 st March, ,000 P 1,500 1 st May, ,300 Q 1,000 1 st October, ,300 R st November, ,600 S st February, ,000 All the shares were of ` 10 each, ` 8 per share paid up. Show the amount to be realised from the various persons listed above ignoring expenses and remuneration to liquidator, etc. P.T.O.

4 (b) ABC Ltd. went into liquidation on 31 st Dec, The assets realized were: Stock `1,00,000; Plant ` 75,000; Cash ` 625. Liquidation Expenses ` 1,375. Creditors ` 90,000 (` 8,000 are preferential) 6% Debentures ` 80,000. Interest on Debentures paid up to 30 th April, Remuneration at 3% on amounts realized (except cas0 from assets and 2% on the amounts distributed to unsecured creditors excluding preferential creditor. (7) Q.4. Excel Ltd. incorporated on 1 st January, 2015 issued a prospectus inviting applications for 5,00,000 Equity shares of ` 10 each. (15) The whole issue was fully underwritten by Karan, Bhavi Dipti & Mohan as follows:- Karan 2,00,000 Shares Bhavi 1,50,000 Shares Dipti 1,00,000 Shares Mohan 50,000 Shares Applications were received for 4,50,000 shares of which market applications were as follows:- Karan 2,20,000 Shares Dipti 90,000 Shares Bhavi 1,10,000 Shares Mohan 10, 000 Shares You are required to find out the liabilities of individual underwriters and show Journal entries when underwriters commission is payable at 2.5%. OR/- Q.4. Following is the Balance Sheet of Suyog Ltd. as on 31 st March (15) Liabilities ` Assets ` Share Capital: Authorised: 10,00,000 Equity Shares of `10 each Issued: 8,00,000 Equity Shares of `10 each `8 paid up Reserves: General Reserve Profit and Loss Account Securities Premium Secured Loans: 11% Debentures Unsecured Loans: Current Liabilities: Creditors Bills Payable 1,00,00,000 64,00,000 10,00,000 50,00,000 20,00,000 20,00,000 20,00,000 4 Fixed Assets: Land and Building Plant and Machinery Furniture Investments Current Assets: Debtors Bills Receivable Bank Balance Stock 30,00,000 30,00,000 22,00,000 15,00,000 47,00,000 10,00,000 40,00,000 20,00,000 15,00,000 15,00,000 2,14,00,000 2,14,00,000 The company decides to buy-back the maximum number of equity shares as may be permitted at a price of `20 per share. Find out maximum number of shares to be bought back and pass Journal Entries and Prepare Balance Sheet after buy-back. Q.5.(a) Distinguish between Amalgamation in nature of merger & Amalgamation in Nature of Purchas. (8) (b) Internal Reconstruction V/S External Reconstruction (7) OR/- Q.5. Short Note (any 3 out 5) (15) 1. Consolidation of Shares 2. Sub Division of Shares 3. Firm Underwriting. 4. Amalgamation Adjustment A/c. 5. Free Reserves or Divisible Profits. *************************

5 f Bandra West Vile Parle West H. O. : Shop No. 5, Hill Crest Society, 16 th Road, Bandra (W), Mum: 50. Ph: / Branch : Avon Arcade, Shop No. A/103, 1 st Fl., Vile Parle (W), Mumbai: 56. T.Y.BAF Financial Accounting Paper V Marks: 75 Sem V Pre Final Exam 2 (2017) (Solution) Q.1. [A] Fill in the blanks : (Any 8 out of 10) (8) 1. The provisions of buy back of shares are specified in section 77A of Companies Act (and 68 A, As per Revised Companies Act 2013) 2. There are two types of winding up viz. (a) Compulsory (b) Voluntary. 3. The full balance of capital is to be debited, if face value is reduced. 4. Deficiency or surplus A/c is prepared as per list H. 5. A contract whereby one party undertakes to subscribe for shares in the event of undersubscription is known as Underwriter of Shares. 6. Indian Companies Act, requires companies to complete minimum subscription of 90%. 7. Dissolution expenses paid by purchasing company are debited to Goodwill Accounts in purchase. 8. Payment of reconstruction expenses is debited to Capital Reduction Account. 9. Revaluation Reserve is not a Free Reserve 10. Accounting for amalgamation is governed by AS 14. Q.1.[B] State True or False (Any 7) (7) 1. Internal reconstruction is one of the varieties of amalgamation. False 2. Scheme of amalgamation requires approval by 75% of shareholders of every company involved. True 3. Consolidation of shares result in profit for a company. False 4. Underwriting commission cannot exceed 3% of issue price of debentures. True 5. In compulsory winding up, remuneration of liquidation is fixed by the court. True 6. Statutory reserve can be utilized to set-off loss under the scheme. False 7. A company cannot subdivided shares. False 8. Buyback must be as per RBI guidelines. False 9. Wages & Salaries are preferential creditor True 10. Purchase consideration includes payment to creditors also. False 5

6 Q.2. Solution (a) Josh and Ashish Ltd. Statement of Purchase Consideration Particulars Josh Ltd. Ashish Ltd. Shilpa Ltd Capital Sec. Prem. 4,000 5 Equity `30 each 6,00,000 2,00,000 4,00,000 3,750 5 Equity `30 each 4,50,000 1,50,000 3,00,000 1,500 Pref. each 2,25,000 1,50,000 75,000 1,000 Pref. `150 each 1,50,000 1,00,000 50,000 (b) 8,25,000 6,00,000 8,25,000 In the books of Shilpa Ltd. Journal No Particulars Dr. ` Cr. ` 1. Business Purchase A/c Dr. 14,25,000 To Liquidator of Joshi Ltd. 8,25,000 To Liquidator of Ashish Ltd. 6,00,000 (being ) 2. Land & Building Dr. 4,00,000 Plant & Machinery Dr. 1,20,000 Computers Dr. 70,000 Stock Dr. 1,50,000 Debtors Dr. 1,10,000 Bills Receivables Dr. 90,000 Bank Dr. 60,000 Goodwill Dr. 55,000 To 10% debentures (30, ) 20,000 To Sundry Creditors 1,10,000 To Bills Payable 1,00,000 To Business Purchase A/c 8,25, Liquidator of Joshi Ltd. Dr. 8,25,000 To Equity share capital 2,00,000 To 15% Pref. share capital 1,50,000 To Securities Premium A/c 4,75, Land & Building Dr. 2,00,000 Plant & Machinery Dr. 1,50,000 Computers Dr. 10,000 Stock Dr. 80,000 Debtors Dr. 1,90,000 Bills Receivable Dr. 20,000 Bank Dr. 80,000 To Capital Reserve A/c (bal.fig.) 25,000 To 10% Debentures (15, ) 10,000 To Sundry Creditors 70,000 To Bills Payable 25,000 To Business Purchase A/c 6,00,000 6

7 5. Liquidator of Ashish Ltd. Dr. 6,00,000 To Equity Share Capital 1,50,000 To 15% Preference Share Capital 1,00,000 To Securities Premium A/c 3,50, % Debentures of Joshi Ltd. Dr. 20,000 10% Debentures of Ashish Ltd. Dr. 10,000 To 15% Debentures 30, Amalgamation Adjustment A/c Dr. 1,75,000 To Statutory Reserve 1,75, Capital Reserve A/c Dr. 25,000 To Goodwill A/c 25,000 (c) Balance Sheet of Shilpa Ltd. (After Amalgamation) Particulars Note ` I. Equity and Liabilities 1. Shareholder s Funds a. Share Capital 1 6,00,000 b. Reserves & Surplus 2 10,00, Non current liabilities a. Long term borrowings (15% Debentures of `100 each) 30, Current Liabilities Trade Payables 3 3,05,000 Total 19,35,000 II. Assets 1. Non current Assets a. Fixed Assets - Tangible Assets 4 9,50,000 - Intangible Assets (Goodwill : 55,000 25,000) 30,000 b. Other Non Current Assets 5 1,75, Current Assets a. Inventories 2,30,000 b. Trade Receivables 6 4,10,000 c. Cash and Cash Equivalents (Balance with Bank) 1,40,000 Total 19,35,000 Notes to Accounts ` 1. Share Capital a. Equity Share Capital Issued, subscribed & fully paid: 35,000 Equity shares of `10 each 3,50,000 b. Preference share capital Issued, subscribed & fully paid: 15% 2,500 Preference shares of `100 each 2,50,000 (all issued for consideration other than on amalgamation) Total 6,00,000 7

8 2. Reserves & Surplus a. Securities Premium (4,75, ,50,000) 8,25,000 b. Statutory Reserve (c) 1,75,000 Total 10,00, Trade Payables a. Sundry Creditors for goods 1,80,000 b. Bills Payable 1,25,000 Total 3,05, Fixed Assets Tangible Assets - Land & Building 6,00,000 - Plant & Machinery 2,70,000 - Office Equipment (Computer) 80,000 Total 9,50, Other Non Current Assets Amalgamation Adjustment A/c (c) 1,75, Trade Receivables a. Debtors 3,00,000 b. Bills Receivables 1,10,000 Total 4,10,000 Working Notes: (1) Net Assets Taken Over (Goodwill / Capital Reserve) Particulars Josh Ltd. ` Ashish Ltd. ` Shilpa Ltd. (BS) ` Land & Building (Revalued) 4,00,000 2,00,000 6,00,000 Plant & Machinery (Revalued) 1,20,000 1,50,000 2,70,000 Computer (Revalued) 70,000 10,000 80,000 Stock (Revalued) 1,50,000 80,000 2,30,000 Debtors (Revalued) 1,10,000 1,90,000 3,00,000 Bills Receivable (Book value) 90,000 20,000 1,10,000 Bank (Book value) 60,000 80,000 1,40,000 (A) 10,00,000 7,30,000 - Less : liabilities taken over 10% Debentures of `100 each (Revalued) 20,000 10,000 30,000 Sundry Creditors (Book value) 1,10,000 70,000 1,80,000 Bills Payable (Book value) 1,00,000 25,000 1,25,000 (B) 2,30,000 1,05,000 - Net Assets taken over (c) = (A B) 7,70,000 6,25,000 - Less: Purchase Consideration (D) 8,25,000 6,00,000 - Goodwill (D C) 55, Capital Reserve (C D) - 25,000 - (2) Amalgamation Adjustment A/c is treated as Non Current Asset, on the presumption that the corresponding statutory reserve is to be maintained for more than 12 months. 8

9 Q.2. Solution:- OR/- Calculation of Purchase Consideration Particulars Ram Ltd. ` Shyam Ltd. ` Total (BS) ` (A) Assets taken over Goodwill 1,60,000 60,000 2,20,000 Freehold property 2,10,000 1,20,000 3,30,000 Plant & Machinery 50,000 30,000 80,000 Motor Vehicles (revalued) 60, ,000 Inventory 1,20,000 1,56,000 2,76,000 Trade Receivable 1,64, ,64,000 Cash at Bank 86, ,000 Total 8,50,000 3,66,000 12,16,000 (B) Less: Liabilities 6% Debentures (1,20, %) -- (1,26,000) 1,26,000 Trade Payables (1,50,000) -- 1,50,000 (C) Net Assets taken over 7,00,000 2,40,000 9,40,000 (D) To be satisfied by issue of Ram and Shyam each 70,000 24,000 12,16,000 Balance sheet of Ram and Shyam Ltd. as on 1 st April, 2013 Particulars Note ` I. Equity and Liabilities 1. Shareholder s Funds a. Share Capital 1 9,40,000 b. Reserves & Surplus 2 6, Non current liabilities a. Long term borrowings (15% Debentures of `100 each) 1,20, Current Liabilities Trade Payables 3 1,50,000 Total 12,16,000 II. Assets 1. Non current Assets a. Fixed Assets - Tangible Assets 4 4,70,000 - Intangible Assets (Goodwill ) 2,20, Current Assets a. Inventories (1,20, ,56,000) 2,76,000 b. Trade Receivables 6 1,64,000 c. Cash and Cash Equivalents 86,000 Total 12,16,000 9

10 Notes to Accounts ` 1. Share Capital Equity Share Capital 94,000 shares of `10 each 9,40, Reserves & Surplus Securities Premium A/c (Debentures 1,20,000 5%) 6, Tangible Assets a. Freehold Property 3,30,000 b. Plant & Machinery 80,000 c. Motor Vehicles 60,000 Total 4,70,000 In the Books of Shyam Ltd. Journal Entries No. Particulars Dr. ` Cr. ` 1. Realisation A/c Dr. 3,48,000 To Freehold Property A/c 1,20,000 To Plant & machinery A/c 30,000 To Inventory A/c 1,56,000 To Trade Receivable A/c 42, % Debentures A/c Dr. 1,20,000 Trade Payable A/c Dr. 64,000 To Realisation A/c 1,84, Equity Share Capital A/c Dr. 1,60,000 Profit & Loss A/c Dr. 40,000 To Equity Shareholder A/c 2,00, Ram and Shyam A/c Dr. 2,40,000 To Realisation A/c 2,40, Bank A/c Dr. 42,000 To Realisation A/c 42, Realization A/c Dr. 64,000 To Bank A/c 64, Shares in Ram and Shyam Ltd. A/c Dr. 2,40,000 To Ram and Shyam Ltd. A/c 2,40, Realization A/c Dr. 54,000 To Equity Shareholder A/c 54, Equity Shareholders A/c Dr. 2,54,000 To Shares in Ram and Shyam Ltd. A/c 2,40,000 To Bank A/c 14,000 10

11 Q.3. Capital Reduction In the books of Commom Wealth Game Ltd. Journal entries Date Particulars LF Debit Credit % Preference share capital (100) Dr. 6,00,000 To 10% Preference Capital (180) 4,80,000 To Capital Reduction A/c 1,20, Equity share capital (100) Dr. 12,00,000 To Equity capital (25) 3,00,000 To Capital Reduction 9,00, % preference capital (180) Dr. 4,80,000 To 10% Preference capital (100) 4,80, Equity Share Capital (125) Dr. 3,00,000 To Equity Share Capital (100) Capital Reduction A/c Dr. 60,000 To Equity Share capital (100) 60, Cash/Bank A/c Dr. 3,00,000 To Investments A/c 1,50,000 To Capital Reduction A/c 1,50, Capital Reduction A/c Dr. 2,04,000 To Debtors A/c 16,000 To Stock A/c 44,000 To Computers A/c 1,44, Debentures A/c Dr. 1,20,000 To Plant & Machinery 1,08,000 To Capital Reduction 12, Outstanding Debenture Interest Dr. 12,000 To Cash/Bank 12, Capital Reduction A/c Dr. 60,000 To Cash/Bank A/c 60, Directors loan Dr. 48,000 To Capital Reduction 30,000 To Cash/bank 18, Capital Reduction A/c Dr. 8,88,000 To Goodwill 2,40,000 To Preliminary Expenses 1,20,000 To Profit & Loss A/c 5,28,000 11

12 In the books of Common Wealth Games Ltd. Date Particulars JF Amount Date Particulars JF Amount To Equity Capital By 10% (100) 60,000 Preference 1,20,000 To Debtors A/c 16,000 By Equity (100) 9,00,000 To Stock A/c 44,000 By Cash/Bank 1,50,000 To Computers A/c 1,44,000 By Debentures A/c 12,000 To Cash/Bank A/c 60,000 By Directors loan 30,000 To Goodwill A/c 2,40,000 To Preliminary Exp. 1,20,000 To Profit & Loss A/c 5,28,000 12,12,000 12,12,000 Cash/ Bank A/c Date Particulars JF Amount Date Particulars JF Amount To Investment A/c 1,50, By Balance b/d 3,30,000 To Capital Reduction 1,50,000 By O/s interest 12,000 To Balance c/d 1,20,000 By Directors Loan A/c 18,000 By Capital Reduction 60,000 4,20,000 4,20,000 Note:- Opening Bank O/d Rs.3,30,000 can be shown separately short term borrowing, then cash & bank balance will be Rs.2,10,000 Revised Balance Sheet as on Particulars Notes ` Equity/liabilities I. Shareholders fund A) Share Capital 1 8,40,000 B) Reserves/Surplus --- II. Non Current Liability 1,20,000 III. Current Liability A) Short term borrowings 1,20,000 B) Short term loans 1,02,000 C) Trade Payables 2,68,000 Total 14,50,000 Assets I. Non Current Assets A) Tangible Fixed Assets 2 5,72,000 B) Non current investment ---- II Current Assets A) Inventories 3,78,000 B) Trade Payables 5,00,000 Total 14,50,000 Note: Direct on Loan are assumed to be for less than 1 year hence treated as short term loans Notes to A/c s 1. Share capital Authorized? Issued, Subscribed and paid up % Preference of 110 each 4,80, Equity Shares of 100 each 3,60,000 8,40, Tangible Fixed Assets Plant & Machinery 1,92,000 Furniture 1,24,000 Computers 2,56,000 5,72,000 OR/- 12

13 Q.3.A) Statement of Contribution by list B Contributories Shareholders Ratio Date of Transfer Outstanding creditors Increment in Creditors 1500 shares 1000 shares 500 shares 300 shares P Q R S :10:5: :5: : Allocated liability Uncalled Amount `2 per share Final/Actual liability whichever is lower Conclusion: 1. Mr. A has transferred the shares on 1 st March,2003 which is more than 12 months from the date of liquidation i.e. 2 nd April Therefore his name will be included in the above statement. 2. Mr. P will be liable only for `330 along with the other shareholders in the ratio of 15:10:5:3 and any liability arising after the date of transfer he will not be responsible. Similarly in the case of Q, R and S. 3. Creditors total due is `6,000 but the contribution from the list B contributories is `4622. therefore, the creditors remain unpaid to the extent of `1378. Q.3. B) Liquidator s Final Statement of Accounts Receipts ` Payments ` To Assets Realised By Liquidator s Remuneration Stock 1,00,000 ( ) 6,775 Plant 75,000 By liquidation expenses 1,375 Cash 625 By Debentureholders having Floating charge:- 6% debentures 80,000 Interest on debentures 3,200 By Unsecured Creditors Preferential creditors 8,000 Other creditors 76,275 1,75,625 1,75,625 Working Notes:- 1 For Receipts & Payments Particulars ` Assets Realised Stock 1,00,000 Plant 75,000 Cash 625 1,75,625 (-) Liquidator s remuneration (3% on 1,75,000) 5,250 1,70,375 (-) Liquidation Expenses 1,375 1,69,000 (-) Preference Creditors 8,000 1,61,000 (-) Debentureholder having floating charge 6% debentures 80,000 Interest on Debentures (8 months) 3,200 77,800 (-) Liquidator s remuneration (2% on 76,275) ,275 (-) Unsecured Creditors 76,

14 Working Notes:- 2 To find out the liquidator s Remuneration Let the Amount distributed to unsecured creditors be Liquidator s remuneration be % 2 Amount available before remuneration 102 Before remuneration liquidator s Commission ,800? = 77,800 2 = `1, i.e. The liquidator s remuneration is `1,525 Total liquidators remuneration 3% on assets realized (3% on 1,75,000) 5,520 2% on amount distributed to Unsecured creditors including preferential Creditors (2% on 76,275) 1,525 6,775 Q.4. Solution:- Statement of Net Liability of Underwriters Particulars Komal Bharat Deepak Mahesh Gross liability 2,00,000 1,50,000 1,00,000 50,000 (-) Marked Applications 2,20,000 1,10,000 90,000 10,000 (20,000) 40,000 10,000 40,000 (-) Unmarked Application (4:3:2:1) 8,000 6,000 4,000 2,000 (28,000) 34,000 6,000 38,000 (-) Surplus of komal distributed to Bharat, Deepak & Mahesh (3:2:1) 28,000 14,000 9,333 4,667-20,000 (3,333) 33,333 (-) Surplus of Deepak distributed to Bharat & Mahesh (3:1) 2,500 3, Net Liability - 17,500-32,500 Journal of Export Ltd. Date Particulars Debit (`) Credit (`) 1. Bharat A/c Dr. 1,75,000 Mahesh A/c Dr. 3,25,000 To Equity share capital A/c 5,00,000 (being ) 2. Underwriting Commission A/c Dr. 1,25,000 To Komal A/c (2,00, %) 50,000 To Bharat A/c (1,50, %) 37,500 To Deepak A/c (1,00, %) 25,000 To Mahesh A/c (50, %) 12, Bank A/c Dr. 4,50,000 To Bharat A/c (1,75,000 37,500) 1,37,500 To Mahesh A/c (3,25,000 12,500) 3,12, Komal A/c Dr. 50,000 Deepak A/c Dr. 25,000 To Bank A/c 75,000 OR/- Q.4.Problem Already solved in Class. Ref to FA Text Book 14