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State whether the fol/owing statements are True or False:
1) Purchase. consideration is the amount Payable by the purchasing company to the vendor company for taking over the business of the vendor company.
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State whether the fol/owing statements are True or False:
Under Payment Basis Method of calculating Purchase Consideration, claims of the various parties are satisfied as stated.
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State whether the fol/owing statements are True or False:
External reconstruction involves one liquidation and no new formation of a company.
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Multiple Choice Questions
On Amalgamation of companies, Provident Fund A/c in Balance Sheet of Vendor Company is transferred to ___________A/c.
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Pass necessary Journal Entries in the books of 'N' of Nashik based on AS 11 from the following transactions :
A machine was imported on 20th January, 2018 from Van. Chan of China for US $ 2,00,000. The payment for the same was made as follows :
US $ 1,50,000 on 27th February 2018.
US $ 50,000 on 15th March 2018.
The Exchange Rate for $ 1 Was as follows :
On 20th January, 2018 Rs. 65.60
On 27th February, 2018. Rs. 66.50
On 15th March, 2018 Rs.66.80
N follows financial year as accounting year.
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On 31st October 2017. Mis. Raman Industries Ltd: exported goods worth US $ 60,000 to Mis. WMS Co. USA. Mls WMS C o. paid the instalment as under:
| Date | Instalments in US $ | Exchanee Rate per US $Rs. |
| 1.12.2017 | 18,000 | 64.00 |
| 1.2.2018 | 12,000 | 66.00 |
| 10.3.2018 | 12,000 | 63.00 |
| 17.4.2018 | 10,000 | 66.00 |
| 19.5.2018 | 8,000 | 67.00 |
Additional Information :
1. Exchange rate as on 31.10.2017 was Rs, 65.00 per US $ and as on 31.3.2018 was Rs 64.00 per US $.
2. Accounts are closed on 31st March every year.
3. Apply AS-11.
Prepare WMS's Co. Account U.S.A~ in the books of Mis. Raman Industries Ltd. for the year ended 31.3.2018.
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Purab Ltd. Exported good to Paschim Ltd. as on 1st March, 2018 for Rs. 1,00,000 when the exchange rate was 1 BS $ = Rs. 62. The amount was received in three instalment as under :
| Date | Instalments in US $ | Rate of exchange |
| 5th March, 2018 | 40,000 | Rs.61 |
| 1 thMarch, 2018 | 35,000 | Rs.63 |
| 30th March, 2018 | 25,000 | Rs.60 |
Pass the Journal Entries for the above transactions in the books of Purab Ltd. for the year ended 31st March, 2018.
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Pass Journal entries for the following transactions in foreign currency in the books of 'Priyanka Ltd'. Priyanka Ltd exported goods to 'Jerry Trading Company', Germany worth US $ 90,000 on 10th January, 2017, on which date exchange rate of 1 US$ was Rs. 69.50. The payment for the same was received as under :
| Date of Payment | US $ Received | Exchane;eRate for 1 US $ |
| 25th January, 2011 | 25,000 | Rs. 69.75 |
| 23rd February 2017 | 24,000 | Rs. 68.90 |
| 24th March, 2017 | 24,000 | Rs. 68.60 |
| 28th April 2017 | 17,000 | Rs.68.90 |
'Priyanka Ltd. closes its books on 31st March every year . The exchange rate on 31st March 2017 was 1 US $ 68.75.
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PQR Ltdh imported. goods worth US @ 4,00,000 from M/s. Nelson & Co. of U.S.A'. on 1st August, 2017 when the exchange rate was Rs . 65.00. PQR Ltd. agreed to pay the amounts in four equal in stallments as under:
| Date | Exchange Rate (Rs) |
| 10.09.2017 | 66.25 |
| 10.10.2017 | 67.00 |
| 10.11.2017 | 67.50 |
| 10.12.2017 | 67.70 |
Prepare Foreign Exchange Fluctuation Account in the books of PQR Ltd.
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Mr. Taitler purchased raw materials from Mis. Richo Inc. ·of USA on 1st October 2017 for US.$ 8,400. Amount to be paid in· four equal half yearly installments commencing from1st March,2018 along with interest.@12 %. per annum:
Rate of exchange per US $ as on various dates was as follow :
1st October 2017 Rs. 65 per US$
31st March 2018 Rs.66 per US$
30th September 2018 Rs. 63 per US $
31st March 2019 Rs.64 per US$
Pass necessary Journal Entries in the books of Mr. Taitler for the years ended 31st March, 2018 and 31st March, 2019.·
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D Ltd. of India has sold goods to B Ltd .of UK for $ 2,30,000 .on 1st August 2018. 30% was received on 1st September 2018. $50,000 was received on 10th September 2018.
Balance was received on·30th September 2018.
Foreign exchange rates
1st August 2018 $1 =Rs. 50.50
1st September2018 $1 ~Rs. 51.50
10th September 2018 $1 =Rs. 49
30th September $.1 =Rs. 52
Give entries in the books of D Ltd.
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E Ltd. of Mumbai has sold goods worth $ 3,00,000 to B Ltd. of USA on 31st January 2018.
On 1st February 2018, $ 50,000 has been received.
On 1st March 2018, $ 80,000 has been received.
On 30th April 2018, $ 90,000 has been received.
Qn 31st May 2018, the balance has been received.
The accounting year ends on 31st March every year.
The exchange rates :
31st January.2018 '$1= Rs.51
1st February 2018 $1=Rs. 50
1st March2018 $1 =Rs.52
31st March2018 $1=Rs.51
30th April 2018 $1=Rs.49
31st May 2018 $1=Rs.53
Prepare ledger accounts iri·the books of E Ltd.
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A trader entered into following transactions His accounting year ends on 31st March every year.
| Date | Particulars |
| 10th June 2014 | Goods worth $ 10,000 exported to G Company of Germany |
| 20th June 2014 | Payment received from G company $ 10,000 |
| 16th August 2014 | Raw materials imported for $ 5,000 from S Company of South Korea. |
| 31st August 2014 | Payment-of$. 5,000 made to S Company of South Korea. |
| 10th Oct. 2014 | Payment of $ 20~000' was received from SA of South Africa as advance. |
| 15th Oct. 2014 | Goods exported to SA of South Africa. |
| 3'rd Nov 2014 | A machine worth $ 12,000 imported from UK industries of UK. |
| 15th Nov 2014 | Payment of$ 6,000' made to UK industries. of UK. |
| 15th Dec 2014 | Payment of $ 6;000 made to UK industries ofUK . |
| 15th Jan 2014 | Exported goods to BK industries of Bangladesh worth $ 2,000. |
| 15th March 2014 | Imported machinery worth$ 10,000 from GK of Germany |
Exchange rate of $ 1 as follows :
10th June 2014 46.75
20th June 2014 46.50
16th August 2014 48
31 51 August 2014 48.50
10 th October 2014 48.75
15th October 2014 49
3rd November 2014 48.60
15th November 2014 48.70
15th December 2014 48.40
15th January 2015 49
15th March 2015 49.50
31st March 2015 50
Give entries in the books of trader.
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V. R. 'Kulkarni is appointed as a Liquidator of a company in Voluntary liquidation on 1st july, 2017 and the following balances are extracted from the books on that date:
| Liabilities | Rs. | Assets | Rs. |
| Capital: | |||
| 32,000 shares of Rs. 5 each | 1,60,000 | Machinery | 60,000 |
| Provision for Bad Debts | 20,000 | Leasehold Properties | 80,000 |
| Debentures | 1,00,000 | Stock in trade | 2,000 |
| Bank Overdraft | 36,000 | Book Debts | 1,20,000 |
| Liabilities for Purchases | 40,000 | Investments | 12,000 |
| Calls in Arrears | 10,000 | ||
| Cash in Hand | 2,000 | ||
| Profit and Loss Account | 70,000 | ||
| 3,56,000 | 3,56,000 |
The machinery is valued at Rs. 1,20,000, the Leasehold Properties at RS. 1,46,000, Investments at Rs. 8,000, Stock in Trade at ' Rs . 4,000, Bad debts are 'Rs. 4,000, Doubtful debts are 'Rs 8,000, estimated to realise Rs. 4,000. The Bank Overdraft is secured by deposit of title deeds of Leasehold Properties. Preferential creditors for taxes and Wages Rs. 2,000. Telephone rent owing is Rs. 1,600. You are required to make out (1) Statement of affairs as regards creditors and contributors and (2) Deficiency or Surplus Account.
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The following information is extracted from the books of Surabhi Ltd. on 31st July 2017 on which· date a winding up order was made.
| Particulars | Rs. |
| Unsecured Creditors | 7,00,000 |
| Salaries due for five months | 40,000 |
| Managing Director's Remuneration Due | 60,000 |
| Bills Payable | 2,12,000 |
| Debtors - Good | 8,60,000 |
| - Doubtful ( estimateci to produce Rs.1,24,000) | 2,60,000 |
| -Bad | 1,76,000 |
| Bills Receivable (Good Rs. 20,000) | 32,000 |
| Bank Overdraft | 80,000 |
| Land (estimated to produce Rs.10,00,000) | 7,20,000 |
| Stock (estimated to produce Rs.11,60,000) | 16,40,000 |
| Furniture and Fixtures | 1,60,000 |
| Cash in Hand | 8,000 |
| Estimated liabilities for bills discounted | 1,20,000 |
| Secured creditors holding first mortgage on land | 8,00,000 |
| Partly secured creditors holding second mortgage on land | 4,00,000 |
| Weekly wages unpaid | 12,000 |
| Liabilities under Workmen's Compensation Act, 1925 | 4,000 |
| Income-tax due | 16,000 |
| 10,000 9% Mortgage Debentures of RS.100 each Interest payable to 30th June | |
| and 31st December, paid to 30111 June 2017 | 10,00,000 |
| Share Capital : | |
| 40,000 10% Preference Shares of Rs.10 each | 4,00,000 |
| 1,00,000 Equity Shares of Rs.10 each | 10,00,000 |
| General Reserve since 31st December, 2013 | 2,00,000 |
In 2013, the company earned profit Rs. 9,00,000 but thereafter it suffered trading losses totalling Rs.11,68,000.
The company also suffered a speculation loss of Rs.1,00,000 during the year 2014. Excise authorities imposed a penalty of' 7,00,000 in 2015 for evasion of tax which was paid in 2016. From the foregoing information, prepare the Statement of Affairs and the Deficiency Account.
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The fallowing particulars were extracted from the books of XYZ Ltd. as on 31st March, 2017 on which day a winding-up order was made.
| Particulars | Rs. |
| Equity Share Capital: | |
| 20,000 shares of Rs10 each, Rs 5 paid-up | 1,00,000 |
| 14% pref share capital - | |
| 20,000 shares of Rs.10 each, fully paid | 2,00,000 |
| 14% mortgage debentures, secured by a floating charge upon whole of the assets of the company exclusive uncalled capitaL | 1,50,000 |
| Fully secured Creditors (value of securities Rs.35,000) | 30,000 |
| Partly secured Creditors (value of securities Rs. 10,000) | 20,000 |
| Preferential Creditors for Rates, Taxes, Wages etc | 6,000 |
| Bills Payable | 1,00,000 |
| Unsecured Creditors | 70,000 |
| Bank overdraft | 10,000 |
| B/R in hand | 15,000 |
| Bills Discounted (One bill of Rs.10,000 known to be bad) | 40,000 |
| Book Debts : (i) Goods | 10,000 |
| (ii) Doubtful (estimated to produce 50%) | 7,000 |
| (iii) Bad | 6,000 |
| Land and Building (estimated to produce Rs. 1,00,000) | 1,50,000 |
| Stock in-Trade (estimated to produce Rs. 40,000) | 50,000 |
| Machinery, tools etc. (estimated to produce Rs. 2,000) | 5,000 |
| Cash-in-hand | 100 |
You are require to prepare
(a) A statement of Affairs
(b) Deficiency Account.
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A Ltd went into voluntary liquidation on 31st December, 2017 when its Balance Sheet read as follows :
| Liabilities | Rs. | Assets | Rs. |
| Share Capital : | |||
| Issued and Subscribed Capital : | Land and Buildings | 2,50,000 | |
| 5,000, 10% Cumulative Preference Shares of Rs. 100 each fully paid | 5,00,000 | Plant and Machinery | 6,25,000 |
| 2,500 Equity Shares of Rs. 100 each Rs.75 paid | 1,87,500 | Patents | 1,00,000 |
| 7 ,500 Equity Shares of Rs.100 each Rs. 60 paid | 4,50,000 | Stock | 1,37,500 |
| 15% Debentures | 2,50,000 | Sundry Debtors | 2,75,000 |
| (Secured by a floating charge) | Cash at Bank | 75,000 | |
| Interest outstanding on Debentures | 37,500 | Profit and Loss A/c | 2,81,250 |
| Creditors | 3,18,750 | ||
| 17,43,750 | 17,43,750 |
Preference dividends were in arrears for 2 years and creditors included preferential creditors of 38,000.
The assets realised as follows:
Land and Buildings Rs. 3,00,000
Plant and Machinery Rs. 5,00,000
Patents Rs. 75,000
Stock Rs.1,50,000
Sundry Debtors Rs.2,00,000
The expenses of liquidation amounted to Rs.27,250. The liquidator is entitled to a commission of 3% on assets realised except cash Assuming the final payments including those on debentures is made on 30th June, 2018.
Prepare the Liquidator's Final Statement of Account.
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The XYZ Ltd., Bikaner went into voluntary liquidation as on 31st March, 2018.The Balance Sheet as on that date is as follows :
Balance Sheet as on 31st March. 2018
| Liabilities | Rs. | Assets | Rs. |
| Share Capital: | Cash in Hand | 10,000 | |
| • 15,000 Preference Shares of Rs. 10 each, fully paid up | 1,50,000 | Stock of Raw Materials | 50,000 |
| • 20,000 Equity Shares of Rs. 10 each, Rs. 7 paid up | 1,40,000 | Stock of Finished Goods | 1,50,000 |
| Secured Loan from Bank (Against pledge of Stock of Raw Materials) |
38,000 | Other Assets | 1,45,000 |
| Preferential Creditors | 1,200 | Profit and Loss | 76,000 |
| Unsecured Creditors | 1,01,800 | ||
| 4,31,000 | 4,31,000 |
The assets realised are as follows :
Stock of Raw Materials realised by Bank Rs. 30,000. Stock of Finished Goods Rs. 80,000 and Other Assets Rs.20,000. The liquidator is entitled to a fixed remuneration of Rs. 1,000 plus 3% of the assets realised by him only. The expenses of liquidation amounted to Rs. 11,000. Preference shares are preferential as regards capital repayment.
Show the Liquidator's Final Statement of Account.
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From the following information relating to Ratan Ltd., prepare Liquidator's Final Statement of Account .
(1) Share Capital :
(a) 800 Preference shares of Rs. 100 each fully paid.
(b) 35,000 Equity (A) Shares of Rs.10 each fully paid.
(c) 30~000 Equity (B) Shares of Rs.10 each,Rs. 7 paid-up.
(d) 20,000 Equity (C) Shares of Rs.5 each, Rs. 2 paid-up.
(2) Debentures of Rs. 70,000.
(3) Creditors of Rs. 50,000 unsecured, Creditors Rs.10,000 preferential.
(4) Assets realised Rs. 3,10,000.
(5) Liquidator's remuneration is 5% on assets realized, liquidation expenses were Rs. 6,600 and legal charges were Rs. 2,900.
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The Balance Sheet Of sony Ltd.as on 31st march 2017 is as follows:
| Liabillties | Rs. | Assets | Rs. |
| Share Capital : | Land and Building | 2,00,000 | |
| (i) 1,000, 6% Preference Shares of Rs . 100 each | 1,00,000 | Plant and Machinery | 2,20,000 |
| (ii) 2,000 Equity Shares of Rs.100 each fully | 2,00,000 | Stock | 1,00,000 |
| (iii) 3,000 Equity Shares of Rs.100 each,Rs . 50 paid | 1,50,000 | Debtors | 1,00,000 |
| 6% Debentures | 1,00,000 | Cash at Bank | 30,000 |
| (Floating charge on all assets) | Preliminary Expenses | 40,000 | |
| Interest outstanding on Debentures | 6,000 | Profit and Loss A/c | 60,000 |
| Bank Loan (Mortgage on Land and Building) | 1,00,000 | ||
| Sundry Creditors | 90,000 | ||
| Income Tax | 4,000 | ||
| 7,50,000 | 7,50,000 |
The company went into liquidation on 31st March, 2017. The preference dividends were in arrears for three years. The arrears are payable on liquidatio The assets were realised as follows :
Land·anci Building Rs.2,40,000, Plant and Machinery Rs. 1,80,000, Stock Rs. 70,000, and Debtors ' Rs. 60,000. The expenses of liquidation amounted to Rs. 8,000.
The liquidator is entitled to remuneration at 2% on all assets Realised and 3% on amount distributed to unsecured creditors.
All payments were made on 1st October, 2017 .
Prepare Liquidator's Final Statement of Account.
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