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Group A - Very Short Answer Questions

Attempt All Questions.

11 questions·1 marks each
1short1 marks

What is Joint Stock Company?

joint-stock-company
2short1 marks

Define memorandum of association?

memorandum-of-association
3short1 marks

Mention the two objectives of issue of prospectus.

prospectusobjectives
4short1 marks

What is authorized capital?

authorized-capital
5short1 marks

What is paid up capital?

paid-up-capital
6short1 marks

What do you understand by pro-rata allotment of share?

pro-rata-allotment
7short1 marks

What do you mean by calls-in-advance?

calls-in-advance
8short1 marks

What do you mean by debenture?

debenture
9short1 marks

Write the entry for forfeiture of 500 shares of Rs.100 each for non-payment of first and final call of Rs.20 per share?

share-forfeiturejournal-entry
10short1 marks

Prepare adjusting entry for prepaid salary Rs.25,000.

adjusting-entryprepaid-salary
11numerical1 marks

Ascertain the amount of net profit after tax if:

  • Income tax: Rs.5,000
  • Gross profit: Rs.1,00,000
  • Operating expenses: Rs.75,000
net-profit-after-tax
B

Group B - Short Answer Questions

Attempt All Questions.

11 questions·5 marks each
11 ashort5 marks

Hotel Yak n Yeti Co. Ltd. issued 10,000 equity share of Rs. 100 each for public subscription at 10% premium in lump-sum. Application for all the shares were received and allotted to the shareholders.

Required: Journal entries for share application and transfer.

share-issuelump-sumjournal-entry
11 bshort5 marks

Kshitiz Travel Co. Ltd. forfeited 500 shares of Rs. 100 each share for non-payment of second and final call money of Rs.20. Out of forfeited shares 400 shares were re-issued at Rs.80 per share as fully paid up.

Required: Journal entries for (i) share forfeiture (ii) re-issue of shares (iii) transfer

share-forfeiturere-issuecapital-reserve
12short5 marks

Diya Ltd. Co. issued 25,000 shares of Rs. 100 each at 10% discount for public subscription. The amount payable as follows:

  • On application: Rs.40
  • On allotment: Rs.30 (after discount)
  • On First and final call: Rs.20

Application were received for 20,000 shares and were allotted full. All the money due was received except a shareholder holding 300 shares failed to pay call money.

Required: Necessary Journal entries in the book of Diya Ltd. Co. for Share application, Allotment and Call.

share-issueunder-subscriptioncalls-in-arrears
13short5 marks

A company invited applications for 40,000 shares of Rs. 100 each at 10% premium payable as follows:

  • On application: Rs.35
  • On allotment: Rs.45 (with premium)
  • On first and final call: Rs.30

All the shares applied for and allotted. All the money was duly received but, Mrs. Rawal who holding 1,000 share failed to pay first and final call money. And Mr. Shrestha holding 500 shares paid entire amount along with allotment money.

Required: Journal entries for above transactions.

share-issuepremiumcalls-in-advancecalls-in-arrears
14short5 marks

The following are the transactions in the book of a Nabil Company:

  1. Issued 1,000, 12% debenture of Rs. 1,000 at discount (assumed 10% or explicit parameter not fully stated, let's treat generic or face value) and redeemable at par.
  2. Issued 1,000, 11% debenture of Rs.1,000 at par and redeemable at 10% premium.
  3. Issued 1,000, 10% debenture of Rs.1,000 at 10% premium and redeemable at 5% discount.

Required: Journal Entries for issue and redemption of debentures. (Note: Only issue entries matching conditions are standardly evaluated).

debenture-issueredemption-terms
15short5 marks

Western Co. Ltd. purchase the following assets and liabilities of Birat Co.

AssetsRs.LiabilitiesRs.
Furniture3,00,000Creditors6,00,000
Building10,00,000Outstanding Exp.1,00,000
Stock4,00,000Loan2,00,000

The Co. decided to issued 5,000 shares of Rs. 100 each at 10% premium and cash Rs.250,000.

Required: Journal Entries for business purchase.

business-purchasegoodwill-capital-reserve
16 ashort3 marks

Explain any three features of debentures.

debenturesfeatures
16 bshort2 marks

Birat Co. Ltd. issued 10,000, 11% debentures of Rs.100 each at 5% discount redeemable at premium. Subsequently it is redeemed by converting into equity shares of Rs. 100 each at par.

Required: Entry for converting debentures into shares.

debenture-conversion
17short5 marks

The trial balance of Mountain Limited Company as on 31st Ashad 2079 is given below:

ParticularsDr. Am.ParticularsCr. Am.
Opening Stock15,000Share capital1,20,000
Purchase60,000Sales3,50,000
Wages25,000Purchase Return5,000
Salaries60,000Account Payable10,000
Interest20,000Commission15,000
Cash25,000
Debtors2,15,000
Plant and Machinery1,00,000
Total5,00,000Total5,00,000

Additional Information: a. Closing stock Rs.25,000 b. Depreciation on Plant @10% per annum

Required: i. Trading A/c ii Profit and Loss A/c

trading-accountprofit-and-loss-account
18 ashort3 marks

Explain any three advantages of Joint Stock company.

joint-stock-companyadvantages
18 bshort2 marks

Write any two differences between private company and public company with basis.

private-companypublic-companydifferences
C

Group C - Long Answer Questions

Attempt All Questions.

3 questions·8 marks each
19long8 marks

Natasa Ltd. Company offered 20,000 shares of Rs.100 each at 10% premium for public subscription. The money was payable as Rs.30 on application, Rs.40 on allotment with premium, Rs.20 on the first call and balance (Rs.20) in the second and final call. The public applied for 25,000 shares and the company decided to allot the shares on the following basis:

  • For applicants applying 15,000 shares: Full
  • For applicants applying 7,500 shares: Pro-rata (Allotted 5,000 shares)
  • For applicants applying 2,500 shares: Rejection

The company has right to utilize the excess money received on application towards allotment and calls. All the money was duly received except Mr. Manjil, to whom 500 shares were allotted on pro-rata basis who failed to pay call money. Mr. Yujan holding 300 shares paid entire amount along with first call money.

Required: Journal entries for Allotment, First and Second and Final call and Share forfeiture.

pro-rata-allotmentshare-forfeitureadvanced-journal
20long8 marks

The trial balance of Realize Company Ltd. as on March 31st 2023 is given below:

ParticularsDr. Am.ParticularsCr. Am.
Cash2,30,000Gross Profit2,50,000
Salaries1,00,000Share Capital5,00,000
Audit Fees30,00010% of debentures1,00,000
Furniture and Fixture4,00,000Commission20,000
Account Receivable50,000Bills Payable35,000
Selling Expenses25,000P/L Appropriation A/c15,000
Bad debts10,000
Goodwill35,000
Rent30,000
Interest on Debenture10,000
Total9,20,000Total9,20,000

Additional Information: i. Prepaid rent Rs. 10,000. ii. Outstanding salaries Rs. 12,000. iii. Provide Rs. 50,000 dividend iv. Transfer to general reserve Rs.7,500 v. Depreciation @10% on furniture.

Required: a. Profit and Loss Account, b. P/L Appropriation A/c, c. Balance Sheet

final-accountsprofit-lossbalance-sheet
21long8 marks

Trial Balance of Suyash Company Ltd. for the year ended 31st Chaitra 2077 is given:

ParticularsDebit Rs.ParticularsCredit Rs.
Beginning Inventory50,000Share capital5,00,000
Purchase2,50,000Sales Revenue5,00,000
Wages20,000Creditor40,000
Salaries1,20,000P/L Appropriation a/c25,000
Rent15,000General Reserve10,000
Advertisement30,000Bank Loan75,000
Plant and Equipment3,50,000
Investment80,000
Cash1,50,000
Prepaid insurance10,000
Preliminary Expenses25,000
Total11,50,000Total11,50,000

Adjustments: i) Closing stock Rs.80,000. ii) Depreciate plant and equipment by 10%. iii) Prepaid salaries Rs.20,000. iv) Provision for taxation Rs. 15,000. v) Proposed dividend @10% on paid up capital.

Required: a) Multi-step Income statement b) Classified Balance sheet.

multi-step-income-statementclassified-balance-sheet