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Corporate Accounting
Dee Ltd. decided with the approval of the Tribunal and the sanction of the parties concerned, upon a scheme of reconstruction as at 31st March, 2016. The summarised Balance Sheet of Dee Ltd. as at
The company must apply for an order confirming the reductionA. To the Supreme CourtB. To the High CourtC. To the Tribunal
The company has to deliver to the Registrar for registration:A. A certified copyt of the Tribunal’s orderB. A minute approved by the Tribunal showing the details of the sharesC. A certified copy of
The following is the Balance Sheet as at 31st March 2016 of Bad Luck Ltd. The company is engaged in the manufacture and sale of electronic items. It has been felt that the depression in the industry
The ledger balances of X Co. Ltd as on 31.3.2016 was as follows :Fixed Assets ₹7,00,000; Investments ~ 10,000; Stock and Debtors ₹8,50,000; Preliminary Expenses ₹20,000; Equity Share Capital
What is a holding company ? How does a holding company come into existence ?
The following are the summarised Balance Sheets of X Ltd. and Y Ltd. as on 31.3.2016: I. EQUITY AND LIABILITIES (1) Shareholders' Funds: (a) Share Capital Equity Share of 10 each (b) Reserves and
Star and Moon had been carrying on business independently. They agreed to amalgamate and form a new company Neptune Ltd. with an authorised share capital of ₹ 2,00,000 divided into 40,000 equity
The Balance Sheet of Mars Limited as on 31st March, 2016 was as follows: I. EQUITY AND LIABILITIES (1) Shareholders' Funds: Balance Sheets of Mars Ltd. as at 31st March, 2016 (a) Share Capital -
The following is the Balance Sheet of A Co Ltd. as on 1st April, 2016 : I. EQUITY AND LIABILITIES (1) Shareholders' Funds: (a) Share Capital -2,000 Equity Shares of 10 each (b) Reserves and Surplus
In an amalgamation in the nature of mergerA. All assets and liabilities are taken over by the transferee company at agreed valueB. All assets and liabilities are taken over by the transferee company
The following are the summarised Balance Sheets of X Ltd. and Y Ltd. I. EQUITY AND LIABILITIES (1) Shareholders' Funds: Balance Sheets of X Ltd. and Y Ltd. as at ... Note No. (a) Share Capital Equity
The following is the Balance Sheet of XYZ Ltd. as on 31st Marchr, 2016: I. EQUITY AND LIABILITIES (1) Shareholders' Funds: (a) Share Capital -50,000 Equity Shares of 10 each fully paid (b) Reserves
From the following Balance Sheet (as at 31st December), compute the goodwill of the firm XYZ Co. Ltd. on the basis of four year’s purchase of the average super profits on a 10% yield basis. I.
The following is the Balance Sheet of Mr. X as on 31.12.2015: Capital General Reserve Creditors Liabilities ₹ 1,64,000 Land and Building 40,000 Plant 38,040
Sagar Ltd. was formed on 1 January, 2016 with an authorised share capital of 5,00,000 equity shares of ₹ 10 each. 1,00,000 equity shares were issued for cash at a premium of ₹ 2.50 per share. No
Who is a contributor? Discuss his liability.
Under what circumstances can the Court order that a company be compulsorily wound up? Who can file petition for compulsory winding up?
What is a statement of affairs ? When it is prepared ? Give a specimen form of this statement and explain it.
From the Balance Sheets given below, prepare a Consolidated Balance Sheet of X Co. Ltd. and its subsidiary Y Co. Ltd. The interests of the minority shareholders of Y Co. Ltd. are to be shown in the
Degree of control depends upon holding ofA. Equity shares only;B. Both equity shares and preference sharesC. Both preference shares and debentures.
What do you understand by the expression "consolidation of financial statements". State the advantages and disadvantages of consolidation of financial statements.
From the following Balance Sheets of H Ltd. and its subsidiary S Ltd. drawn up at 31st December 2015, prepare a Consolidated Balance Sheet. At the date of acquisition of shares, the General Reserve
What do you understand by "cancellation of inter-company debts and acceptances" ? ---- Discuss with examples.
Minority interest is shown in the consolidated balance sheetA. Under share capital;B. Under reserve and surplusC. As a separate item.
What are the forms and techniques of preparing a Consolidated Balance Sheet ?
Unrealised profits resulting from intergroup transactions that are included in carrying amount of assets are eliminatedA. In full, irrespective of percentage of holding;B. Partly, depending upon the
Janta Ltd. issued 40,000 shares which were underwritten as: A ---- 24,000 shares; B ---- 10,000 shares;C ---- 6,000. The underwriters made applications for firm underwriting as
Rowlock Ltd. was incorporated on 1st October, 2016 to acquire Rowlock’s mail order business, with effect from 1st June, 2016. The purchase consideration was agreed at ~ 35,000 to be satisfied by
Adarsh Udyog Ltd incorporated on 1st May, 2016, received the certificate to commence business on 31st May, 2016. It had acquired a running business from Gupta and Co with effect from 1st January,
(a) What do you mean by liquidation of a company?(b) What are the different ways in which a company may be wound up?
At the time of consolidation, profit on revaluation of fixed assets of the subsidiary company is treated asA. Revenue profit;B. Capital profitC. None of the above.
How do you evaluate ‘minority interest’ ? Is it a liability of the group ?
Dividend paid by the subsidiary company out of post-acquisition profit is credited toA. Investment account of the holding company;B. Profit and loss account of the holding companyC. Capital reserve
H Ltd. acquired 80% of both classes of shares of S Ltd. on 1.1.2015 at a total cost cost of ₹ 1,00,000. The Balance Sheets of the two companies as on 31.12.2015 are given below: Balance Sheets of H
P Ltd. acquired 6,000 Equity Shares of ₹ 10 each in S Ltd. on December 31, 2015. The summarised Balance Sheets of P Ltd. and S Ltd. as on that date were: I. EQUITY AND LIABILITIES (1) Shareholders'
In a winding up which commenced on 15th September, 2016 certain creditors could not receive payments out of the realisation of assets and out of contribution from ‘A’ list of contributories.
Bad Luck Limited went into voluntary liquidation and the proceedings commenced on 2 July, 2016. Certain creditors could not receive payment out of the realisation of assets and out of the
When is winding up deemed to commence in the case of voluntary winding up and compulsory winding up?
What do you mean by preferential creditors ? Outline the order of preferential payments when a company is under liquidation?
State the conditions for payment of underwriting commission as per the Companies (Prospectus and Allotment of Securities) Rules, 2014.
What do you mean by Members’ voluntary winding up? How does it differ from Creditors’ voluntary winding up?
What do you understand by Liquidator’s Statement of Account? When it is prepared and how?
A.G. Ltd. went into liquidation with the following liabilities :(a) Secured creditors ₹ 20,000 (securities realised ₹ 25,000).(b) Preferential creditors ₹ 600.(c) Unrealised creditors ₹
The Breakfast Foods Ltd. went into voluntary liquidation on 31st December, 2016. The balances in its books on that date were: Liabilities Share Capital: Authorised and Subscribed : 5,000, 6%
The capital of Data Company Limited was as follows :(1) 4,000 equity shares of ₹ 100 each fully paid;(2) 3,000 equity shares of ₹ 100 each, ₹ 80 per share paid-up;(3) 1,000 preference shares of
Employee Stock Option can be offered by passing :A. A special resolution in the general meetingB. An ordinary resolution in the general meetingC. A resolution in the board meetingD. No resolution in
Value of option is equal to :A. Number of option exercised × (market price -- exercise price)B. Number of option exercised × (market price -- fair price)C. Number of option granted × (market price
‘Employee Stock Options Outstanding’ will appear in theA. Balance Sheet as a negative item as a part of networth or shareholders’ equityB. Balance Sheet as part of Reserve and SurplusC. Profit
An employee who is a promoter or belongs to a promoter group shallA. Be eligible to participate in the ‘Employee Stock Purchase Scheme’.B. Not be eligible to participate in the ‘Employee Stock
The buy back of equity shares in any financial year should not exceedA. 20% of the total paid-up equity share capital in that financial yearB. 25% of the total paid-up equity share capital in that
The special resolution will not be required when the buy back is not exceedingA. 20% of total equity share capital plus free reserve of the companyB. 15% of total equity share capital plus free
Post buy back debt-equity ratio should not exceedA. 1 : 1B. 1 : 2C. 2 : 1D. 3 : 2
Every buy back shall be completed within a period ofA. 6 months from the date of passing of the special resolutionB. 3 months from the date of passing of the special resolutionC. 1 year from the date
Shares bought back shall be extinguished and physically destroyed withinA. 10 days from the last date of completion of buy backB. 5 days from the last date of completion of buy backC. 15 days from
The offer for buy back shall remain open for a period ofA. Not less than 10 days and not exceeding 20 days from the date of despatch of the letter of offerB. Not less than 15 days and not exceeding
SEBI (Buy back of Securities) Regulation, 1998 is applicable toA. Private limited companies onlyB. Unlisted public limited companies onlyC. Both private limited and public limited companiesD. Only
Rule 17 of the Companies (Share Capital and Debentures) Rules, 2014 is applicable toA. Only private limited companiesB. Only unlisted public limited companiesC. Only listed companiesD. All companies
Where a company purchases its own shares out of free reserve or securities premium, a sum should be transferred to Capital Redemption Reserve which should beA. Equal to the amount paid to the
A company after the completion of a buy back of its sharesA. Can not issue same kind of shares within one yearB. Can not issue same kind of shares within 6 monthsC. Can issue same kind of shares
On 1st January, 2013, A Ltd. acquired 8,000 shares of ₹ 10 each of B Ltd. at ₹ 90,000. The respective Balance Sheets as on 31st December, 2015 are given below: I. EQUITY AND LIABILITIES (1)
The payment of commission to underwriter(s) is to be authorised byA. The board of directorsB. The articles of associationC. The memorandum of associationD. Ministry of Corporate Affairs
What do you understand by underwriting?
A merchant banker can act as a underwriter provided he holds a certificate granted byA. Government of IndiaB. Company Law BoardC. SEBID. Registrar of Companies
State the restrictions and conditions placed under Companies Act, 2013 for appointment of underwriters.
In respect of every underwritten issue, the merchant banker(s) shall undertake a minimum obligation ofA. 5% of the total underwriting commitment or ₹ 35 lacs whichever is lessB. 10% of the total
Write a short note on: Firm Underwriting and Partial Underwriting along with Firm Underwriting.
As per the provision of the Companies Act, 2013, in case of shares, the commission paid or agreed to be paid does not exceedA. 2% of the issue priceB. 2.5% of face valueC. 5% of face valueD. 5% of
What do you understand by "firm" underwriting ? Pass the accounting entries relating to firm underwriting in thebooks:(i) The company;(ii) The underwriter.
As per the provision of the Companies Act, 2013, in case of debentures, the commission paid or agreed to be paid does not exceedA. 2% of the face valueB. 2.5% of the issue priceC. 5% of the issue
Explain the different methods of computing profit prior to incorporation.
Profit prior to incorporation isA. Debited to Goodwill AccountB. Credited to General Reserve AccountC. Credited to Capital Reserve Account
State the accounting treatment of pre-incorporation profit / loss.
Profit earned before incorporation is a/anA. Extra ordinary profitB. Revenue profitC. Capital profit
Pawan Ltd was incorporated on 1st March, 2017 and received its certificate of commencement of business on 1st April, 2017. The company bought the business of Pramod Ltd with effect from 1st November,
State the accounting treatment of post-incorporation profit / loss.
A company was incorporated on 1st May, 2016 to take over a business from the preceding 1st January. The accounts were made upto 31st December, 2016 as usual and the Trading and Profit and Loss
Profit earned after incorporation but before obtaining certificate of commencement of business is generally treated as :A. Revenue profitB. Capital profitC. Extraordinary profit
Write short notes on:(a) Profit prior to incorporation;(b) Loss prior to incorporation;(c) Certificate of incorporation;(d) Certificate of commencement of business.
Loss prior to incorporation isA. Credited to Capital Reserve AccountB. Debited to Goodwill AccountC. Credited to Goodwill Account
After-sales service cost is allocatedA. On the basis of timeB. On the basis of salesC. On actual basis
X and Y who were working as partners formed a limited company in the name of XY(P) Ltd, on 1st June, 2016 to take over their existing business, with the consideration being a sum of ₹ 4,80,000 and
Green Ltd. was established on 1st August, 2013 and received the Certificate of Commencement of business on 1st November, 2013. The company bought the business of Purple & Co. with effect from 1st
What is Goodwill ? What are the distinguishing features of Goodwill?
Goodwill is the outcome of an impression created in the mind of eachA. CustomerB. CreditorC. None of these
The net profit of a business, after providing for taxation, for the past five years are : ₹80,000; ₹85,000; ₹92,000; ₹1,05,000 and ₹1,18,000. The capital employed in the business is
What are the important features of ‘purchased’ and ‘non-purchased’ Goodwill?
Dog goodwill isA. ValuableB. less valuableC. None of these
State the important factors to be taken into consideration in valuing Goodwill?
Price paid for goodwill depends upon the purchaer’s expectation of futureA. GrowthB. ProfitsC. None of these
State the methods of accounting for Goodwill.
The figure computed as goodwillA. Is an exact oneB. Cannot be an exact oneC. None of these.
What is super profit ? What are the steps to be followed for calculating super profit for the valuation of Goodwill?
The net profit of a company after providing for taxation for the past five years are :₹20,000; ₹25,000; ~ 15,000; ₹35,000 and ₹40,000. The net tangible assets in the business is ₹2,00,000
Goodwill may be valued on the basis ofA. Actual profitsB. Super profitsC. None of these
What is the distinction between "Capitalisation of Super Profit Method" and "Annuity Method" for valuing Goodwill?
What are the important points to be taken into consideration in determining the profits upon the basis of which Goodwill is to be valued?
What is the need for valuation of shares ? State the factors affecting valuation of shares.
State the two widely applied methods for the valuation of shares.
The Balance Sheet of Star Co. Ltd. is as follows:You are asked to value the goodwill of the company on the basis of 5 years’ purchase of super profits, for which purpose, the following information
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