B.Com (General) Semester 6 (TYBcom) - University of Mumbai Question Bank Solutions for

The following is a set of information provided by Anil & Aniket LLP for the year ended 31.3.2017.

Other Data:
(i) Stock as on 31.3.2017: 1,90,000.
(ii) Depreciate: Machinery@ 10%, Furniture@ 20% and Trade Marks@ 10%.
(iii) Further Bad debts 10;000 and provide R.D.D. at 4%. 
(iv) Outstanding Expenses : Salary 2,000, Rent 3,000, Wages 10,000.
Prepare Statement of Income & Expenditure for the year ended 31.3.2017.

Prepare Statement of Assets & Liabilities (Part - B : Statement of Account) from the following data as on 31.3.2016 for Simran and Saroi LLP ·

Abbay carrying on business On 31/3/16, Balance Sheet was as under:

Balance Sheet as on .1st March 2016

On the above date, a LLP was incorporated to take over the above business on the following terms and conditions :On the above date, a LLP was incorporated to take over the above business on the
following terms and conditions :
(i) All assets (except cash and vehicle) and all liabilities (except Abhay's loan) to be taken over by the company for which all assets are valued at par except building and stock which  are .considered worth   75.,000 and 60;000 respectively.
(ii) Goodwill is valued at 1,00,000 .
(iii) Abbay and Vasant will be the partners of LLP sharing profits equally. They contributed 1,60,000 each.
(iv) Abhay's loan is  to be partly settled by his taking over the cash and vehicle at  par.
(v) The purchase consideration is received in cash.
Show Ledger Accounts to close the books of the firm, Journal Entries in the books of Purchaser and Statement of Assets and Liabilities. 

Bunty decided to convert his Business into a LLP under the name of Bunty  and Babli LLP. The Balance· Sheet ·as at 31/3/2017 was as follows :

Balance Sheet as on 31st March, 2017

Bunty & Babli have decided to share profits equally. The capital contribution is Rs. 62,500 each.
other terms and con.ditions as follows : 
(i) Goodwill valued at Rs. 23,000.
(ii) Plant is to be taken over at Rs. 50,000.
(iii) LLP, to pay Bank Overdraft and Creditors immediately for which the LLP should sell stock at Rs. 43,000.
(iv) The LLP took a loan off 25,000 by mortgaging plant.
You are required to give :
(a) Necessary ledgers in the books of vendor.
(b) Journal Entries.and Balance Sheet in the books of Bunty and Babli LLP.

Pravin decided to convert his Business into LLP on 31.3.2015.
The Balance Sheet of Pi·aviri as on 31.3.2015 .

Balance Sheet of Pravin as on 31.3.2015

Praveen and Pniful will be partners in  LLP sharing profit in the ratio of 3 : 2 respectively. Capital is to be contributed in Cash as Praveen Rs. 1,40,000 and Praful Rs.1,00,000.
Other terms and conditions :
(i) Goodwill. valued at Rs . 30,000.
(ii) Machinery is to be valued at Rs . 60,000.
(iii) Creditors are to be paid at discount of 2% 
(iv) Realisation expenses incurred and paid Rs, 500 and borne by vendor.
(v) Other assts and liabilities are to be taken at book value.
(1) Prepare necessary ledgers in the books of Praveen.
(2) Provide necessary journal entries in the books of LLP.
(3) Prepare Balance Sheet of LLP.

Tom decided to convert his business into a LLP on 31.3.2017 when balance sheet was as follows :
Balance Sheet as on 31.3.2017

Tom and Jerry will be forming a new LLP and decided to share profits equally.
Capital contribution in cash and each has to contribute '16,00',000.
Other terms & conditions :
(i) Machinery and building revalued at Rs. 2,40,000 and Rs. 2,70,000 respectively.
(ii) Creditors are to be paid-off by vendor immediately.
(iv)Other assets and liabilities are to be taken at book values.
(iv)The vendors were to-be settled by payment of Rs.14,00,000.
Prepare Realisation Ale in the books of Vendor. Prepare Journal Entries and Balance Sheet in the books of Tom and Jerry LLP.

Following are the Balance Sheet of Galaxy Ltd. & Gemini Ltd. as on 31^st March, 2018.

Balance Sheet as on 31st March 2018

Gemini Ltd. agreed to absorb Galaxy Ltd. on the following terms :

Gemini Ltd. shall give one share of. Rs. 10 each at Rs . 35 per share· for every 3 shares held in  Galaxy Ltd. the amount for the fraction of shares shall be paid in cash calculated as per the market  price of the share of Gemini Ltd.

Stock of Galaxy Itd includes goods worth Rs.7 ,500  purchased from Gemini Ltd. Which had a profit margin  of 20 % on cost.

Debtors of Gentlni Ltd includes Rs. 2,500 being the amount due from Galaxy Ltd. but the creditors of Galaxy Ltd. include Rs. 2,000 only being the amount due to Gemini Ltd. The difference between the debtors and creditors is due to cash in transit.

The shares of Genuni Ltd. are quoted in the market at 45 per share.
You are required to pass the journal entries in the books of Gemini Ltd. and the Balance Sheet  after absorption, assuming that the foreign projects reserve is still to be maintained for 3 years.
Assume that the amalgamation is in the nature of purchase.

Following are the Balance Sheets of ABC Limited and PQR Limited on 31st March., 2018 

On the above date, PQR Limited takes over ABC Limited on the following terms and conditions :

1. All Assets and Liabilities are taken over at book value except the following which were revalue C: as follows :

Premises Rs. 8,50,000 and Plant and Machinery Rs. 7 ,00,000

2. Shareholders of ABC Limited to be issued 10,000 equity shares oft 100 each  at 10% prem.ium.

3. 7% preference shareholders of ABC Limit  to be discharged at 10% premium by issuing 8% preference shares oft 100 each (at par).

4. Debentures of ABC Limited , to be converted into equivalent number of debentures of PQR Limited .

5. Sundry-Debtors of PQR Limited include Rs. 25000 due from ABC Limited

6. Cost of liquidation am9unting to Rs. 4,000 were borne by PQR Limited.

you are required to :

(i) Calculate Purchase Consideration.

(ii) Pass Journal entries in the books of PQR Limited.

Madhu Limited took over Rakhi Limited on 31st march, 2018, on which day, the summarised balance Sheet of Rakhi Ltd. was as follows :

Summarised Balance Sheet
As on 31st March, 2018

The business was taken over by  Madhu limited on the following terms and condition .

1. For every 10 equity shares of Rakhi limited, Madhu Ltd. issued 11 fully paid equity shares of Rs .10 each· and paid Rs.15 in cash.

2. Preference ·shareholders of Rakhi Limited  were paid, equal number of 6% preference shares of Rs.100/- each by Madhu Limited at a premium of 8% . 

3. All assets und Liabilities Were taken over at book value except Cash & Bank  Balance to the extent of Rs. 14,000 which was left for meeting realization expenses.

you are required to :

(a) Calculate Purchase Consideration & 
(b) Prepare necessary ledger accounts to close the Books of Rakhi Ltd., assuming acquisition is in nature of purchase.

Roopa Ltd .took over the business of sonali Ltd . 1st April, 2018 at book value. Following is the summarised Balance sheet of sonali Ltd, as on 31-3-2018

Roopa Ltd. issued one equity share of Rs. 10/- per each at a premium of Rs. 2 per share for every share in Sonali Ltd.

Calculate Purchase Consideration and also prepare Balance Sheet of Roopa Ltd. after acquisition. Acquisition is in the nature of Purchase. ·

Fill in the blanks 

In__________________there is one liquidation and one formation of company.

State whether the fol/owing statements are True or False:
Absorption means formation of a new company to take over at least two existing companies.

The following was the Balance Sheet of Poonam Ltd. as on 31-3-2018 

Balance Sheet as on 31-3-2018

The scheme of reconstruction was agreed as follows :
(a) A new company to be formed "Sonam Ltd with an authorised capital of Rs. 6,00,000 all in equity shares of Rs.10 each.
(b) Two equity shares of Rs. 5 'paid-up in the new company issued for every one equity share in the old company.
(c) Four equity shares of rS. 5 paid-up in the. new company to be issued· for every Preference share in the old company.
( d) Debentureholders to be allotted  8,000 equity shares as fully paid-up in the new company.

(e) Sundry creditors to .be taken over by new company.·
(f) The remaining equity shares to be issued to the public and duly collected in full. 
(g) The Assets of the, old company to be taken over subject writing down the value of machinery. by f 10,000.
Show the necessary ledger accounts in the b.ooks of the old company.

The B.alance Sheet of D Ltd is as follows :

Balance Sheet as·on 31-12-2017

 Terms of Reconstruction :
(1) 1 share of Rs. 10 fully paid in the New Company to be. issued for every three equity shares in old company.

(2) 3 shares of Rs.10 fully paid 'in the New ·company to be issued for every five preference shares in the old company.

(3) Debentureholders to be paid by new Co. called X Ltd. in full.
(4) The creditors to receive 80 %  of the sums due to them in fully paid shares of 10 each in full settlement in new company.

(5) Patents and Profit and Loss Ne to be written-off.

(6) Arrears of preference dividend to be cleared  by issuing one Rs.10 fully paid equity share in 'X Ltd.' for every twenty shares held.

(7) Any balance available is used for writing down the building.
Pass Journal Entries ofD Ltd. and Balance Sheet or X Ltd. as on 31-12-2017.

The following was the Balance Sheet of Unlucky Ltd. as on.31-3-2018.

Note : years of Cumulative Preference Shares dividend of Rs 6,000.
The scheme of reconstruction as agreed upon by all the parties was as follows :
(1) A new company to be formed called 'Lucky Ltd.' with. an authorised capital of  Rs 3,00,000 all in. equity shares of Rs. 10 each.

(2) Two  equity shares as Rs. 5 paid-up in the new company to be issued for every one equity share in the old company.

(3) Four equity shares as Rs. 5 paid-up in the new company to be issued for every preference share in the old company.

( 4) Debentureholders to  be allotted 4,000 Equity shares as fully paid up in the new company.

(5) Arrears of preference dividend to be cancelled.
(6) Creditors to be taken over by the new company.

(7) The remaining equity shares to be issued to the public and duly collected in full. 
(8) The assets of the old company to be taken over subject to writing down the value of machinery by Rs 5,000.

Show the necessary accounts in the books of Old Company and the opening  entries in the books of New Company.

On 1st July, 2017 the balance sheet of Amrit Limited was as under:

Preference dividends. were in arrears for two years. A scheme of  reconstruction agreed upon was as under :

(1) A.new· company to be formed, called AmritLiinited with an authorised capital of Rs.5,00,000  an in equity shares of Rs. 100 each.
(2) One equity shar.e of Rs.100 each fully paid in ·the new company to be issued in exchange of 3 preference shares in the old company. 
(3) One equity share of Rs. 100 each fully paid in the new company to be exchanged for 4 equity shares In the old company.
(4) Arrears of preference dividend to be cancelled.
(5) Debentureholders to receive 50 equity shares in the new company as fully paid.
(6) Creditors to be taken over by the new company and immediately paid-off 
(7) The new company to issue remaining equity shares. for public subscription.
(8) The new company to take over old companis assets,subject to revaluation of  'Sundry Assets' at Rs. 2,65,000.
Prepare the  necessary ledger account in the books of Amrit Limited  and open the books of the new company by means of journal entries, assuming that the public subscription was fully responded.

Balance Sheet of K.G.Ltd. as on 31-12-2017

It is decided to reconstruct the company and for this purpose the following scheme was duly approved.

(1) A new company under the name 'Krishna Ltd.' is to be formed  with  an authorized capital of Rs. 1,00,00,000 in shares of Rs.10 each to take over the business.
(2) Ten fully paid shares in the new company ate to be issued for every six ordinary shares in the old company.
(3) Fifteen fully paid shares in new company are to be issued for every five preference shares in old company.
(4) Debentures are to be paid-off by the new company at a premium of 10%.

(5) Creditors are  to receive 80% of their claim in fully paid shares in the new company in full settlement.
(6) The arrears  of preference hare dividends are to ~e discharged by the issue of three fully paid shares in the new company' for each Preference shares in the old company.
(7) The liquidation expenses of the old company amoμnting to Rs. 5,000 are to be paid by the new company. 
(8) The Authorized and Issued Share Capital of the ·company consist of 50,000 .6%  Preference Shares of Rs100 each fully:-paid, and 60,000 Ordinary Shares of  Rs 100 each fully paid. The dividend on cumulative Preference· Shares has been in arrears for several years.
Close the books of K.G. Ltd

Following was the Balance sheet of DT Ltd. as on 30th June, 2018 :

Note : Preference dividend was in arrears RS.40,000.
The following Scheme of reconstruction is duly sanctioned :
1. A new company TD Ltd .is formed With Rs .15,00,000 as authorised share capital divided into 1,50,000 equity shares of Rs. 10 each.
2. The company will acquire DT Ltd. on the following conditions : 
(i) Old companies debentures will be paid by similar debentures in the new company. For arrears of interest, equivalent amount of·equity shares will be issued .
(ii) The cr~ditors ·wlll be paid fof. every Rs 100 for their claim, Rs .16 in cash and 10 equity shares equivalent in the new company.
(iii) Preference shareholders are pfild 10 equity shares in the new company for  each shares held.by them in the old company. They will not press-for their dividend arrears.
(iv) Equity shareholders will be given ten equity shares in the new company. for three shares held in the old company.
(v) Expenses. of Rs. 20,000 will be borne. by the new company, as a part of purchase consideration..
3. The riew company will take the current assets at their book value except stock which will be reduced by Rs.15,000. Intangible assets are not to appear in the new Balance Sheet, appropriate adjustment being made in the values of fixed assets ..
4. Remaining equity shares in the new company are issued to the public and are fully paid.
You are required to prepare:
1. In the books ·of DT Ltd :
(i) Realisation Account
(ii) DT Equity Sharehoiders Account.
2. In the books of TD Ltd. 
(i) Journal Entries .
(ii) Balance Sheet.
Under Purchase Method.

Fill in the blanks 

Neither liquidation nor formation of new company, but just reorganization of share capital is known as ____________

Fill in the blanks 

Pc- Net Asset =_________________