DCM2203 CORPORATE ACCOUNTING

Description

SESSION	march 2025
PROGRAM	Bachelor of commerce (B.Com)
SEMESTER	04
course CODE & NAME	DCM2203 Corporate Accounting

 

 

Assignment Set – 1

 

 

Q1. Discuss the meaning of  final accounts as per Companies Act 2013 and prepare the format of Balance Sheet as per Schedule 3 of the Companies Act 2013. 

Ans 1.

Meaning of Final Accounts as per Companies Act, 2013

Final accounts refer to the financial statements that are prepared at the end of an accounting year to present the financial position and performance of a company. Under the Companies Act, 2013, final accounts include the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement (for certain companies), along with notes to accounts and other relevant disclosures. These accounts provide stakeholders such as shareholders, creditors, and regulatory authorities with a true and fair view of the financial health of the company.

According to Section 129 of the

 

 

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Q2. Xelta Ltd. was registered with a capital of 23,00,000 in shares of Rs. 10 each. It issued a prospectus inviting applications for 23,000 shares at 40% premium payable as follows:-

On application Rs. 5 (including Rs. 1 premium)

On allotment Rs. 4 (including Rs. 1 premium)

On first call Rs. 3 (including Rs. 1 premium)

On second call Rs. 2 (including Rs. 1 premium)

Applications were received for 23,000 shares, all money was duly received. Pass the necessary journal entries.

Ans 2.

Company Background and Capital Details

Authorized Capital: ₹23,00,000

Face Value per Share: ₹10

Number of Shares: 2,30,000 shares (since ₹23,00,000 ÷ ₹10)

Issued & Subscribed Shares: 23,000

 

 

Q3. Oxy Limited issued 10,000, 10% debentures of Rs.100 each. Give Journal entries if the Debentures:

1. Issued at par
2. Issued at a discount at 10%
3. Issued at a premium of 10%
4. Issued at and redeemable at a premium of 20%, and
5. Issued at discount of 30%

Ans 3.

Journal Entries for Issue of Debentures by Oxy Limited

Company Details:

• Company Name: Oxy Limited
• Number of Debentures Issued: 10,000
• Face Value per Debenture: ₹100
• Total Face Value = 10,000 × ₹100 = ₹10,00,000
• Debenture

 

Assignment Set – 2

 

Q4. Profits earned by ABC Ltd. for the preceding three years were: Year    Profit’s in Rs.

2019    150,000

2020    144,000

2021    156,000

• Profits of 2019 have been derived after adjusting Rs. 9,000 profit on sale of machinery.
• Profits of 2020 were reduced by Rs.15,000 due to an extraordinary loss on account of theft.
• Profits of 2021 include Rs. 6,000 income on investment.
• Salary of proprietor, not yet considered in calculation of profits is to be given Rs.30,000/- p.a.
• The stock of raw material was not insured previously.

Now, it is decided to insure the stock of raw material. The insurance premium is estimated to be paid in future at Rs. 1,500/p.a. You are required to calculate goodwill on the basis of three years purchase of average of last three years profits and on the basis of weighted average profit method weights 1, 2, 3 respectively.

Ans 4.

Given Profits of ABC Ltd.

Year	Reported Profit (₹)
2019	1,50,000
2020	1,44,000
2021	1,56,000

Step 1: Adjust the Profits

Adjustments:

• 2019 Profit includes ₹9,000 profit on sale of machinery (non-operating income) → Deduct
• 2020 Profit includes ₹15

 

 

Q5. Mr Hari Shankar plans to make an investment of Rs.1 Lakh in a business for tenure of 5 years. The WACC of this business is 6%. The estimated cash flows are mentioned below –

Year        Cash Flow Amount in Rs.

1              20,000

2              23,000

3              30,000

4              37,000

5              45,000

You are required to calculate the Present Value of the respective future cash inflows for each year and the total discounted cash inflows for five years and Net Present Value of this investment opportunity and advise Mr. Shankar on the investment decision.

Ans 5.

Introduction

Mr. Hari Shankar is considering investing ₹1,00,000 in a business venture for a period of 5 years. The expected cash inflows for each year are known, and the Weighted Average Cost of Capital (WACC) is 6%, which will be used as the discounting rate. To evaluate the viability of this investment, we will use the Net Present Value (NPV) method. The NPV method discounts future cash inflows to their present value and subtracts the initial investment to determine if the project is

 

Q6. Explain the meaning and objectives of internal reconstruction of a company. Also elucidate the forms of reduction of share capital.

Ans 6.

Internal Reconstruction

Internal reconstruction refers to a corporate-level restructuring process that involves revising the financial structure of a company without liquidating it or affecting its legal existence. It is an internal measure taken to reorganize the capital structure, adjust the value of assets and liabilities, and correct accumulated losses in the balance sheet. This process is generally undertaken when a company has incurred heavy losses, and its assets are overvalued or liabilities are unmanageable. Through internal reconstruction, the company aims to clean up its financial