Illlililtililtiltilililltlllrffl QP - 357

-Lt
il'
!l! Semester B.B.A. Examination, March/April 2022
{CBCS) (R) (2015-16 and Onwards}
BUSINESS ADM INISTRATICN
3.3 : Corporate Accounting

Time : 3 Hours Max. Marks : 70

lnstruction : Answers shauld be written in Engtish only.

SECTION - A

1. Answer any five questions. Each question carries two marks : (5x2=10)
a) State any two merits of financial analysis. I

bi What are preliminary expenses ?

c) What is goodwill ?
d) State any two methods of valuing goodwill.
ei State ar-ry two,reasons for vaiuation of shares"
f) What is minority interest ?
S) Giire the meaning of financial statements.

SECTION _ B

Ariswer any three questions. Each question.carries six marks : {3x$=18}

2 Explain the limitaticns of iinanciai statemei-rt analysis

3. Prepare comparative inc*rne staternent frorn the follorr,ring inforrnation :

Particulars 31-03-2020 31-03-2021

t{} ((j
Net sales 7,50,000 10,00,000

Cost cf goods soid 4,50,000 6,00,000

Office and Adrninistrative expenses 70,000 90,000

P.T.O.
QP - 357 .z- lllllllllllllllllllllllillltllil

expenses 80,000
Selling and distribution
i,00,000
lnterest received 25,000 40.000
Income tax 30% 30oo

4' Krishna and Co., agreed to purchase the business of Radha and Co.. on the
basis of three years purchase of the average profits of the last
four years The
profits were ;
2018 -t 30,000; 2019-t
50,000; 2A2A-t60,000 and in2A21 t 52,000
-
Calculate the value of goodwill assuming that the business ,was
supervised by
the management and remuneration payable from alternative
emplcyment. if
not engaged in the business comes to t 7,000 p.a,

5' From the following particulars of Ashwini Ltd., compute

the value of shares
under yield method.

a) Equity shares of t 10 each _ { g,00,000

b) Profits for the iast three years - T 80,000, t 90,000 and T 1,30.000
c) ZA% of profits are transferred to resenres.
d) Normal rate of return - jA%_

6' under what notes (heading) do you show the following items
in the Balance
sheet of a company.

a) Machinpry i

b) Goodwiil
c) Stock
d) Share capital
e) Debentures
f) Sundry creditors.
illlltffi ililtil illltil!ilil
iltil -.J- QP - 357
SECTICN -C

Answer any three questions. Each question carries fourteen rnarks : {3xI 4=42}
7. H Ltd, acquired 8000 shares of t 10 each in S Ltd., on 31-03-2021 the
summarized Balance sheet of H Ltd. and s Lid., were as foliows :

l-iabilities l-l Ltd. (t) s Lrd. {T) Assets H Ltd. {t) s Ltd. (T)
Share capiial l'ilachinery 60,000 45,000
shares of t 10/- 2,00,000 1,00,000 Furniture 2,000 ,,1 r.lr\/,\
!r.\J\J\_'

Reserves 10,000 15,000 lnvestnents ,

Profit and Loss A/c 5,000 4,500 Shares in S Ltd.gg,ffiO

Bank loan 12,000 Stock 42,000 65,000
Creditors 40,000 20,000 Debtors 19,000 27,000
Bilts payable {, 2,000 1,000 Bills Receivable 1,000 1.500

36,000 10,00c
,, "r"n
2,57,000 1,52,500 2,57,000 1,52,500
on the date of acquisition of shares by H Ltd. The s Ltd. had undistributed
profits of T 1,500 and Reserves amounted to t 5,000.
Prepare a consolidated Balance sheet as dn 31"r Marc h zazl .
e,

8. Following is the Baiance sheet of chandana Ltd , as Gn 31rc9ft021.

Liabilities Amount {{} Assets Amount (T)

Share capitai 30,00,000 Fixed Assets 20,00,000

Reserves and surplus 7,50,000 Current assets 25,00,000

Creditors 12,50,000 lnvestments 5,C0,000

50,00,000 50,00,000
QP - 357 -4- lllllllllllllllllllllllllfillllllli

lnvestments are 8% Government Bonds. The net prcfit after tax far.the past
four years were :

201 B - T 7,85,000; 2019 - T 8,45,000

202A - { 8,50,000, 2021 - { 8,60,000
Normal rate of return on average capital employed is 20%.

Calculate Goodwili at 3 years purchase of super profits.

g. On 31 1ffi12}19, the Balance Sheet of Mangalore Company is as follorrus :

Liabilities Amount ({) Assets Amount ({)

80,000 equity shares 8,00,000 Goodwill 90,000

.l0
of Teach Fixed assets 10,00,000

Reserves 2,20,000 Current assets 4 00,000

Debenturesr 2,00,000

Creditors 2,60,000

14,90,000 14,90,000
on 31 ,0312a19, fixed assets were valued at { 7,00,000 and goodwiil at
T 1"00,000.
The net profit of the firm for the past three years were :

2017 -{ 1,00,000; 2018 -{ 1,06,000 and 2019-t 1,04,500

Norrnal rate of returns is 10% on investments.

Calcuiate the value of shares under :

a) Net assets method

b) Yield method
c) Fair value method.
IilliiltlliliilitililtitIllIilil -5-
QP - 357
10. Following are the Barance Sheets of Rama Ltd.
and Krishna Ltd. as 0n
311G3i2020,

Liabilities Rama Ltd" (T) Krishna Ltd {T)

Equity share capital 2,00,00G 5,00,CI00

10% preference share capital

-1,00,000 1,50,000
Lo*g term loan' 1,00,000 1,00,000
Reserves 1,00,000 "1,20,000

Bills payable 50,000 70,000

Sundry creditors ?,50.0G0 4.10,000
Bank overdraft
50,000

1.
8,00,000 14,00,000
Assets
\,,

Land and Buildings 3,00,000 6,25,0G0

Plant and Machinery 1,80,000 4,00,000

I

Stock l
i 1,so,ooo
2,00,000
,fl

Sundry Debtors 1,00,000 ,r,35,000

Cash and Bank 70,000 40,000

' 9,00,000 14,00,000
Compare the financial position cf the two companies with
the help of common
size Balance Sheets and interpret the results.
 i[lllll llll llllll] lllll llil llli
QP - 357 l

11. Following is the Trial Balance of Surya Ltd. as on 31 lA3l2A2A-

Particulars Debits (T) Credit (T)

Stock on 01 lA4l2A19 50,0c)0

Purchases and sales 3,00,000 4,25,000

Wages 70,000

Discount allowed and received 4,24O 3,150

lnsurance 6,724

Salaries 18,500

Rent 6,000

General expenses 8,950

Profit and Loss A'c 6,2?O

Printing and stationerY 2,400

Advertisement 3,800

tsonus 10,500
,!.t

Debtors and creditors 38,700 35.200

Plant and machinerY 80,500

Furniture 17,100

Cash 1,34,700

Reserve fund 25,000

Short-term loan 15,700

l|ffiffiffiffiffiffiffi -t- ep _ ss7
Bad Debts SrAffi

Calls-in-arears S,0@

Share capital A,5ft,ffi

7,6$,27t1 7,SS,2?t!
Adiustments :

1) Closing stock was valued ai t 91,500.

2) Depreciate plant by 15% and furniture by 10%.
3i Outstanding wages T 5,200 and salaries t 1,200.
4) Directors proposed 15% dividend.
Prepare the Final Accounts in accordance with Companies Act
of 2013.

*t