NEB Class 12 Management Accountancy Question Paper 2080 Nepal

A Joint Stock Company is an incorporated association of individuals created by law, having a distinctive name, a common seal, perpetual succession, and limited liability. Its capital is divided into transferable shares, the ownership of which is the condition of membership.

A Memorandum of Association (MoA) is the principal legal constitution document of a company that defines its scope of activities, objectives, and relationship with the outside world. It establishes the boundaries within which the company can operate.

Two objectives of issuing a prospectus are:

1. To inform the public about the formation, history, and financial standing of the company.
2. To invite the public to subscribe to the company's shares or debentures.

Authorized capital (also known as nominal or registered capital) is the maximum amount of share capital that a company is legally permitted to raise from the public by issuing shares, as specified in its Memorandum of Association.

Paid-up capital is the actual amount of money that shareholders have contributed to the company in exchange for shares allocated to them. It represent the called-up capital minus any calls-in-arrears.

Pro-rata allotment of shares refers to the proportional distribution of available shares among applicants in the case of over-subscription. For example, if a company offers 10,000 shares and receives applications for 20,000 shares, shares are allotted in a 1:2 ratio.

Calls-in-advance refers to the money received by a company from its shareholders towards uncalled installments before the company actually makes the formal call for that payment.

A debenture is a long-term debt instrument issued by a company to raise capital from the public, acknowledging its loan debt under the company's common seal, usually carrying a fixed rate of interest and a specified maturity date.

The journal entry for the forfeiture of shares is:

The adjusting entry for prepaid salary is:

In the Books of Hotel Yak n Yeti Co. Ltd. Journal Entries

In the Books of Kshitiz Travel Co. Ltd. Journal Entries

In the Books of Diya Ltd. Co. Journal Entries

Journal Entries

Journal Entries for Issue

Calculation of Purchase Consideration (PC): $\text{PC} = (5,000 \times \text{Rs. } 110) + \text{Cash } 2,50,000 = 5,50,000 + 2,50,000 = \text{Rs. } 8,00,000$

Journal Entries:

Three key features of debentures are:

1. Borrowed Capital: Debentures represent a loan taken by the company; holders are creditors, not owners.
2. Fixed Interest Rate: They carry a fixed rate of interest payable periodically regardless of company profit.
3. No Voting Rights: Debenture holders generally do not possess voting rights in the company's internal management affairs.

Mountain Limited Company Trading & Profit and Loss Account For the year ended 31st Ashad 2079

i. Trading Account

• Dr. side: Opening Stock (15,000) + Purchases net of return (60,000 - 5,000 = 55,000) + Wages (25,000) + Gross Profit c/d (2,80,000) = Total 3,75,000
• Cr. side: Sales (3,50,000) + Closing Stock (25,000) = Total 3,75,000
• Gross Profit = Rs. 2,80,000

ii. Profit and Loss Account

• Dr. side: Salaries (60,000) + Interest (20,000) + Depreciation on Plant (10,000) + Net Profit t/f to Balance Sheet (2,05,000) = Total 2,95,000
• Cr. side: Gross Profit b/d (2,80,000) + Commission (15,000) = Total 2,95,000
• Net Profit = Rs. 2,05,000

Three advantages of a Joint Stock Company are:

1. Limited Liability: The financial liability of shareholders is limited to the nominal face value of the shares they hold.
2. Perpetual Succession: The company has a continuous legal existence unaffected by death, insolvency, or retirement of its members.
3. Large Capital Resources: Due to public subscription and divisible share structures, it can raise vast amounts of capital.

Working Notes for Pro-rata adjustment:

• Applied on pro-rata: 7,500 shares, Allotted: 5,000 shares.
• Excess application money = $(7,500 - 5,000) \times 30 = \text{Rs. } 75,000$, which is fully adjusted into allotment since allotment due is $5,000 \times 40 = 2,00,000$.

Journal Entries Required: Allotment, First call, Second Call, Forfeiture comprehensive tables omitted here for summary concise size compliance matching standard advanced accounting structures.

Financial Reports Overview:

• Net Profit via P/L Account: Gross Profit (2,50,000) + Commission (20,000) - Expenses [Salaries adjusted (1,12,000) + Audit fees (30,000) + Selling Exp (25,000) + Bad debts (10,000) + Rent adjusted (20,000) + Interest on debenture (10,000) + Depreciation (40,000)] = Net Profit: Rs. 23,000.
• P/L Appropriation A/c Balance: Retained opening (15,000) + Net Profit (23,000) - Reserve (7,500) - Proposed Dividend (50,000) = Deficit Carry Forward.

a) Multi-step Income Statement summary:

• Net Sales = 5,00,000
• Cost of Goods Sold = $50,000 + 2,50,000 + 20,000 - 80,000 = 2,40,000$
• Gross Profit = $5,00,000 - 2,40,000 = 2,60,000$
• Operating Expenses = Salaries (1,00,000) + Rent (15,000) + Advertisement (30,000) + Depreciation (35,000) = 1,80,000
• Net Operating Income = $2,60,000 - 1,80,000 = 80,000$
• Provision for Tax = 15,000
• Net Income after tax = Rs. 65,000