1. (a) Write a short note on book building process.

15000 preference shares of

Rs. 100 each
15,00,000
5 27,00,000
2. Reserves and surplus
b) Following is the balance sheet of Pragati Limited as at
Security premium 10,000
31st March, 2017: General reserve 2,70,000
Surplus 5,70,000
Particulars Note No. 8,50.000
Rs.
3. Trade payables
I. EQUITY AND LIABILITIES
Creditors 1,60,000
1. Shareholders Funds
1,60,000
Share capital 4. Tangible assets
2,700,000
Reserves and surplus 2 Building 20,00,000
8,50,000
2 Current liabilities Plant 15,00,000

Trade payables 35,00,000

3 1,60,000
The company resolved
Total 3,710,000
) to convert partly paid up shares into fully paid up on
II. ASSETIS

1. Non-current assets 1stApril, 2017 without asking shareholders to pay for

the same
Fixed assets
Tangible assets )to redeem preference shares at a premium of 10%
3,500,000
2. Current assets
and issue sufficient number of 12% preference shares
of Rs. 100 each at 10% premium
Cash and cash equivalents (bank) 2,10,000
) The company sold plant costing Rs. 230000 for Rs.
Total 3,710,000
Notes to Accounts 200000
1. Share capital (iv) Payments to a preference shareholder holding 500

150000 equity shares of shares could not be made as his address was not with

Rs 10 the company
each, Rs 8 paid 12,00,000
3136
3 P.T.O.
2 3136
 (v) The company issued fully paid bonus shares to equity sinking fund table shows that Rs. 0.232012 invested annually
shareholders at the rate of 2 shares for every 5 shares at5% compound interest amounts to Re. 1 at the end of four
held years. Investments were made in multiples of 100 only. On
Pass the Journal entries to record the above transactions. 31st March 2018 investments were sold for Rs 4020000 and
the debentures were redeemed. Show the following accounts
for four years commencing from Ist April 2014 assuming that
bank balance on 31st March 2018 was Rs 1550000 before

receipt ofinterest on sinking fund for the year 2017-18:

)Debentures A/c
R (i) Debentures Sinking Fund A/c
3T4T HET 100 344 a 12% HTeATA
(ii) Debentures Sinking Fund Investment A/c
iv) Bank A/c
i) 2,30,000 5T 7 ua 2,00,000 5 }aT
(v) Premium on Redemption of debenture A/Jc.

iv)500 iT aHTA THTÜt a yTAT 7i f4T fe5T4 AA TO 1-4-2014 100 5o u aTT 50,000, 12%

f
10
Or (raT)
Vikas Iron Ltd.issued on 1st April 2014, 50000,12% debentures
of Rs. 100 each at par repayable at the end of4 years at 10%
premium. It was decided to create a sinking fund for the purpose
of redemption of debentures. Investments made out of sinking
Ng 31-3-2018 15,50,000 5T T
fund are expected to carn interest at 5% p.a. Reference to
5 PT.O.
3136
3136
 Stock 450000 Share capital 2000000

Bad debts 50000 Provision for tax 1250000

Bank balance 450000

(iv)5 Buildings 1050000
15 22450000 22450000

2. Sonal Limited has authorised capital of Rs. one crore consisting Additional information:
(a) Rs. 200000 is outstanding for advertisement
of 1000000 equity shares ofRs. 10 each. Follgwing is the trial furniture
(b) Provide depreciation on plant at 20% p.a. and on
balance of the company as at 31st March, 2018
at 10% p.a. on written down value basis

) Maintain a provision for doubtful debts at 5%

10,00,000 TAT T aet ii 31-3-2018 B
The directors proposed a dividend of 30% on paid up share
(d)
at 20.358%
capital. Corporate dividend tax is to be charged
Debit Amount Credit Amount
(e) Make a provision of 25.75% for income (including cess)
tax

(Rs.) (Rs.)
Transfer Rs 500000 to General Reserve
()
Calls in arreas 200000 Sales 15620000
(g) Closing stock is Rs 2000000.
Purchases 8770000 Creditors 500000
and Loss for
1000000
You are required to prepare Statement of Profit
Advance tax paid 2450000 12% Debentures
Sheet as at that
the year ended 31st March, 2018 and Balance
Salaries 2000000 General reserve 580000
Accounts also.
Advertisement 1000000 Salaries outstanding 20000 date. Prepare Notes to

Loose tools 200000 Commission 80000

2,00,000 Y TAT I
Rent 1100000 Provision fordepreciation (a) fasiT9-
20% atb AN R 10% Toc5 ETE,
Prepaid rent 30000 Plant 500000 (b) H
Interest on debentures 100000 Furniture 300000

Plant 2500000 Surplus 570000

(c)HirT TTAi 5% TFT ragI
Furniture 1300000 Commission received

Debtors 800000 in advance 30000

1 P.T.O.
3136 6 3136
 Show how the proposed dividend and CDT are to be shown.
f 25.75% TqYTT
(e) HTY5 (3957 TtgT) Also show how these items will
appear in company's
balance sheet as at 31st March, 2018.

g3 TEAAT 20,00,000 By2 $i TT 36,00,000 5 TET I T 20,80,000 y ST

T 10 yu sT TT 1,00,000, 7% TATT SiT 100 o

15

Or 974 f4TTt T 2016-17 g 15,00,000 7

(a) Forthe year ended 31st March, 2018 the profit of Divya Ltd
before tax amounted to Rs. 3600000. There was a credit
balance of 2080000brought forward from the previous year.
The paid up share capital consisted of 1000000 equity shares

of Rs. 10 each and 100000, 7% preference shares of Rs.

100 each. The company makes a provision of 25.75% for

income tax. The company paid dividend for 2016-17, Rs.
Following appropriations were iv) TTTTT 57 20.358% 1 9TTETT
1500000 during the year.
proposed by the company after the date of balance sheet
( To pay dividends on preference shares,
(i) To pay final dividend @ 10% to equity shareholders, TUT CDT TE Rar E, aEI 31-3-2018

() To transfer 10% of the current year profits to general

5
reserveS,
the extracts from the trial balance of
Civ) Provide corporate dividend tax @20.358%, b) The following are

Vaishnav Electronics Ltd as at 31st March, 2017:

Prepare Notes to Accounts in respect of Reserves and P.TO.
3136
Surplus as per Schedule II of the Companies Act, 2013.
3136 8
 (c) Explain the yield method ofvaluation of equity shares with
example.
T:
Debit (Rs.) Credit (Rs.)
Particulars
1500000 5
Provision for tax (2015-16)
Advance tax paid (2015-16) 1450000
valuation of
3. (a) Write a short note on super profit method of
Advance tax paid (2016-17) 1750000
goodwill with example.
Tax deducted at source (2016-17) 75000

Surplus (April 1,2016) 1500000 5

The assessment for the year 2015-16 was finalised during at 31st
b) Following is the balance sheet of Julie
Limited as

the year 2016-17. The total tax liability for the year 2015-
March 2017:
16 was fixed at Rs. 1650000 and the net amount payable AT:
f o 7T 31-3-2017 TTE
for the year 2015-16 is paid during October 2016. The net
Particulars Note No. Rs.

profit before tax for the year 2016-17 amounts to Rs. EQUITY AND LIABILITIES

6000000. Assume tax rate at 30.9%. Shareholders funds

Share capital 1 80,00,000

Pass journal entries and show how the various items relating
Reserves and surplus 2 -31,00,000
to tax will appear in the balance sheet as at 31st March,
Non-current liabilities
2017.
Long term borrowings (15% Deb)
20,00,000
7 2015-16 Futy 2016-17 fAT TAT fTHI
Current liabilities
57-4 16,50,000 5yd Rr foAT TTI T 2015-16 Trade payables 16,80,000
Other current liabilities 6,00,000

TT 2016 1 à T FDT TT 60,00,0004 (interest due on debentures)

Total 91,80,000
TETI 7 30.9% 4FgI
ASSETS
Non-current assets
faf 31-3-2017 gaaua f y6K fRaTI 5 P.TO.
11
3136 10 3136
 (c) Debenture-holders total claim is reduced to Rs. 1400000
Fixed assets
6000000 and is satisfied by issue of 140000 shares, out of shares
Tangible assets
1000000
Intangible assets (Goodwill) surrendered
2180000
Current assets (d) Creditors' claim is reduced by 50% and in consideration
Total 9180000
they receive 40000 shares out of shares surrendered
Notes to Accounts
(e) The remaining surrendered shares are cancelled
Share capital
600000 equity shares of Rs. 10 each, ( Goodwill and negative balance in surplus account are to

fllypaid 60,00,000 be written off and fixed assets are reduced by Rs. 2000000.
20000 preference shares of
Journalise the above transactions and prepare Reconstruction
Rs. 100 each 20,00,000
account.
80,00,000
Reserves and surplus
Deficit (negative balance in
income statement) -31,00,000
-31,00,000
Trade payables
Creditors 16,80,000
Following scheme of reconstruction was approved by the
H.Court
(a) Equity shares ar to be sub-divided into equity shares of
Rs 10 each and each shareholder shall surrender 70% of
his holding for the
purpose of reissue to debenture-holders
and creditors.

b) Out of shares
fT
surrendered 120000 shares issued
to preference shareholders in full settlement of their 40,000 sT feà TI
claim. P.T.O
3136 13
12 3136
 Non-curent investments
Long tern loans and advances
Other non current assets
Current assets
10
Inventories 4,00,000
Or (T4a) Trade receivables 3,60,000
Foilowing is the Balance Sheet of Vriti Ltd. as at 31st March Cash and cash equivalents (bank) 1,00,000

2017 Total 17,70,000

Notes to Accounts
a 31-3-2017 TTE Aq: 1 Share capital
Particulars Note No. Rs. 10000 equity shares of Rs. 100 each,
EQUITY AND LIABILITIES 10,00,000
fully paid
Shareholders funds 4000 preference shares of Rs. 100 each 4,00,000
Share capital 1 14,00,000 14,00,000
2 Reserves and surplus
Reserves and surplus 2 -5,90,000
Deficit (negative balance in income
Non-current liabilities
statement) -5,90,000
Long term borrowings 6,00,000
5,90,000
Current liabilities 3 Long term borrowings
Trade payables A 3,00,000 10% Debentures 4,00,000
Other current liabilities Loan 2,00,000
interest due on debentures) 60,000 6,00,000
4 Trade payables
Total 17,70,000 Creditors 3,00,000
ASSETS 3,00,000
Non-current assets 5 Tangible assets

Fixed assets Freehold premise 5,00,000

Machinery 2,70,000
Tangible assets 5 7,70,000
1,40,000
7,70,000
Intangible assets
3136
15 P.TO.
3136 14
 6Intangible assets
140,000
Patents 15, 11% atAT HT 10 5y zf iT aT,
formed to take over the
company Garima Ltd.
was
A new

business of Vriti Ltd. Garima Ltd to issue

one equity share of
shares in
Rs. 100 each, Rs. 60 paid in exchange of every two
Vriti Ltd.

Preference shareholders to get 15, 11 % preference shares of

Rs. 10 each in exchange of two preference shares of Vriti
Ltd.
Liability in respect of 10% debentures and interest due thereon TR TEf 1,60,000 o À f T a r T
is to be discharged by Garima Ltd. by issue of Rs. 100 equity

shares fully paid.

TaHTTt aT 5000 5q
The freehold premises are to be revalued at 20% more,

machinery at Rs. 90000, trade receivables are reduced by 10%,

and the value ofinventories to be reduced to Rs. 160000, patents

to have no value. sfaferi otTYI 15

The preliminary expenses amounted to Rs. 5000.

4. Neha Ltd. took over the control of Nandini Ltd. on 1-10-2017
Prepare necessary ledger accounts in the books of Vriti Ltd to
close itsbooks and pass journal entries in the books of Garima by acquiring 32000 shares for Rs 480000. Following are

the balance sheets of the two companies as at 31st March

Ltd.

2018:

ET o à 1-10-2017 5 4,80,000 5o 32,000 aiT

HHCT T 100 5 s 7, 60 B , fAi

3136 17 P.T.O.
16 3136
 Particulars
Note Neha Ltd. Nandini Fully paid shares of
No. (Rs.) Ltd. (Rs.) Rs 10 each 1000000 400000
LIABILITIES 2 Reserves and surplus
I. EQUITY AND
1. Shareholders funds
General reserve 200000 120000

1000000
Surplus 280000 180000
Share capital 400000
Reserves and surplus 2 480000
480000 300000
300000 3 Trade payables
2. Non-current liabilities Creditors 160000 100000

500000 Bills payables 80000

Longterm borrowings
160000 180000
3. Current liabilities
4. Tangible assets
Trade payables 160000 180000
Building 400000 260000

Total 2140000 880000 Plant 320000 180000

II. ASSETS 720000 440000

1. Non-current assets The surplus and general reserve of Nandini Ltd. showed a

ba'ance ofRs. 100000 and Rs. 120000 respectively on IstApril,

Fixed assets
Tangible assets 720000 440000 2017. Adividend was paid at the rate of 10% by Nandini Ltd.

Intangible assets in the month of November 2017 for the year 2016-17. This
60000 dividend was credited to income statement by Neha Ltd.
(Goodwill)
Non-current investments: The bills payables of Nandini Ltd. were all issued in favour of
(32000 shares in Nandini Ltd.) 480000 Neha Ltd. The receiving company got these bills discounted
Rs. 40000 due to
2. Current assets with bank.Creditors of Nandini Ltd. included
latter company. Stock of
Inventories 200000 180000 Neha Ltd. for goods supplied by
16000 of stock purchased from Neha
Trade receivables 40000 150000 Nandini Ltd includes Rs.

Cash and cash equivalents 700000 50000 Ltd. at a profit of 25% on cost.
The plant of Nandini Ltd. with
14-2017 revalued at Rs.
880000 of Rs. 200000 on
was
Total 2140000 a book value
the control of Nandini Ltd. The
Notes to Accounts 300000 at the time of taking
19 P.TO.
1. Share capital 3136

3136
18
 new value has not been incorporated in the books. Prepare
Particulars Note Suhani Radhika
consolidated balance sheet as at 31st March 2018. Show all
No. Ltd. (Rs.) Ltd. (Rs.)
calculations and workings clearly. Ignore corporate dividend I. EQUITY AND LABILITIES
tax. 1. Shareholders funds
Share capital 1 2000000 500000
Reserves and surplus 2 600000 1500000
1,00,000 BTà aT 1,20,000 5và 54T ài as 2016-17
2. Current liabilities
Trade payables 400000 200000

Total 3000000 2200000

II. ASSETS
Non-current assets
Fixed assets
Tangible assets 3 1000000 500000

Non current investments

(30000 shares in Radhika Ltd.) 1000000

ie, freroT FKT ZT 2,00,000 5 T TE T 3,00,000 2. Current assets

Inventories 500000 450000
Trade receivables 300000 1000000
Cash and cash equivalents 200000 250000
Total 3000000 2200000
15 Notes to Accounts

1. Share capital
Or (Trar)
Fully paid shares of
The following are the balance sheets of Suhani Ltd. and Radhika Rs,10 each 2000000 500000
Ltd. as at 31st March 2018 2. Reserves and surplus

31-3-2018 ZEt To ftT fTo TTE General reserve

(as on 14-2017) 500000 500000

3136 20
3136
21 P.T.O
 Prepare consolidated balance sheet as at 31st March 2018.
Surplus
100000 1000000
600000 1500000 Show all calculations and workings clearly.
3. Tangible assets
400000 320000
Building 1TT 2017 FETAtfo Ttt TàiI TftrT fto
Plant 600000 180000
1000000 500000 i) 1 77, 2017 f61 fTo R fafaa dT 4,00,000
Additional Information:
)Suhani Ltd. purchased shares in Radhika Ltd. on July 1,2017
i) Balance of surplus of Radhika Ltd. on 1st April 2017 was
Rs. 4000000
G) Radhika Ltd. distributed bonus shares out of general
(iv) 2017 aRA 1,00,000 F7 TT HI7 q
reserve in the ratio of one share for every two shares held

in September 2017 but the entry for bonus shares has not
yet beçn passed by Radhika Ltd.
(1v) During June 2017 goods costing Rs. 100000 were destroyed
in an accident. The insurance company paid Rs. 75000

only to Radhika Ltd.

(v)Creditors of Radhika Ltd. include Rs. 20000 for goods
supplied by Suhani Ltd on which Suhani Ltd. made a profit (vi)TufrE6T fo , THT JT 2,00,000
T, 1-4-2017 3,00,000 7 T T: T T fT
of 25% on cost. Half of the goods were unsold at the end

of the year
(vi) The plant of Radhika Ltd with a book value
lue ofRs.
Rs. 200000
2000
of
of
on 1-4-2017 was revalued at Rs. 300000 at the tin
me

15
not
taking the control of Suhani Ltd, The new value has
3136 23 P.T.O.
been incorporated in the
books.
3136
22
5. Following are the balance sheets of Avik Aviations Limited as Non-curTent investments 700000 1200000
at 31st March 2017 and 31st March 2018: Long term loans and advances 1780000 1675000
eer ofaarra fao T 31-3-2017 st 31-3-2018 I gT-T Other non-current assets
2. Current assets

Particulars Note 2018 2017 Inventories 2300000 2230000

No. (Rs.) (Rs.) Trade receivables 2050000 2165000
I. EQUITY AND LIABILITIES Cash and cash equivalents(bank) 675000 500000
1. Shareholders funds
Share capital 1 4500000 4000000
Total 3450000 12595000
Notes to Accounts
Reserves and surplus 2 6250000 5700000
1. Share capital
2. Non-curent liabilities
500000 1000000
Equity shares of Rs.10 each 3000000 2000000
Long term borrowings 3
Other long term liabilities Preference shares of
Rs 100 each 1500000 2000000
Long term provisions
3. Current liabilities 4500000 4000000
Short term borrowings 2. Reserves and surplus
1350000 1250000 750000
Trade payables 4 Security premium 700000
Other short term liabilities Surplus 5500000 5000000
100000 130000
(Expenses due) 6250000 5700000
Short termprovisions 3. Long term borrowings
(Provision for tax) 750000 515000
15% Debentures 500000 1000000
Total 13450000 12595000 500000 10000000
II. ASSETS
4. Trade payables
1. Non-current assets
Creditors 1100000 900000
Fixed assets
Bills payables 250000 350000
Tangible assets 5 5875000 4775000
1350000 1250000
Intangible assets (Patents) 70000 50000
3136 5 P.T.O.
3136 24
 5. Tangible assets

Land and buildings 4875000 4300000 qTATA À 25,000 HHAT ST 10 54 gfa T 2 By gfa eisT
Less Accumulated

depreciation -1250000 -1150000

3625000 3150000
q TT 5,50,000 5TÀ T4T fT T4TI
2700000 15
Plant 2000000
Less Accumulated Or (4941)
depreciation 450000 -375000 (a) Differentiate between performing and non-performing

2250000 1625000 assets in relation to banking companies.

Total 5875000 4775000

Additional information:
Debentures were redemed at 10% premium on 1st October, b) From the following information, compute the amount of
provisions to be made in the Profit and Loss Account of a
2017, Investments were sold at 40% profit on cost.
commercial bank for the year ended 31st March, 2018
During the year plant costing Rs. 300000 (accumulated
Rs. in lakhs
depreciation thereon Rs. 110000) was sold at 40% profit on ) Standard assets (value of security

bookvalue. Rs. 3000 lakhs) 3500

i) Sub-standard assets (value of security
During the year buildingg worth Rs. 575000 was purchased by
Rs. 1250 lakhs) 1500
issue of 25000 equity shares of Rs. 10 each at a premium of
(ii) Doubtful assets:
Rs. 2 per share and balance Doubtful for less than one year
by cheque
(realisable value ofsecurity Rs. 250 lakhs) 500
Tax paid during the
year amounted to Rs. 550000
Doubtful for more than one year but less
Prepare Cash Flow Statement. than three years
150 lakhs) 250
(realisable value of security Rs.
security) 200
Doubtful for more than one year (No
50
iv) Loss Assets
P.T.O.
3136 21
3136
26