Solved 2025: FYUG Even Semester Exam, 2025 COMMERCE (2nd Semester) Corporate Accounting (COMDSC-151)

Subject: Commerce

Paper Code: COMDSC-151

Full Marks: 70 | Pass Marks: 28

Time Duration: 3 Hours

Working Steps:

Calculation of Net Assets:

Expected profit before tax: 22,00,000

Less: Tax @ 50%: (11,00,000)

Profit after tax: 11,00,000

Less: Transfer to General Reserve @ 20%: (2,20,000)

Profit available for shareholders: 8,80,000

Total Assets available for Equity Shareholders:

Share Capital + Reserves - Fictitious Assets - External Liabilities

(Note: Intrinsic value usually calculates total assets minus external liabilities and preference claims).

Total value = (10,000 shares x 8) + (10,000 pref x 10) + 2,50,000 (Reserves) - 20,000 (Fictitious) - 75,000 (External Liabilities)

Total value = 80,000 + 1,00,000 + 2,50,000 - 20,000 - 75,000 = 3,35,000

Intrinsic Value = Net Assets available for Equity / Number of Equity Shares

Value per share = 2,35,000 / 10,000 = 23.50

(OR) (b) Briefly discuss the different methods for valuation of goodwill.

Solution:

• Average Profit Method: Goodwill is calculated as a number of years' purchase of average profits.
• Super Profit Method: Calculated by multiplying super profit by a fixed number of years.
• Capitalization Method: Goodwill is the difference between capitalized value of business and net assets.
• Annuity Method: Considers the present value of future super profits.

UNIT - II

Question 3 (Answer any two) 2 x 2 = 4

(a) Differentiate between Capital Reserve and Reserve Capital.

Basis Capital Reserve Reserve Capital Origin Created out of capital profits. Part of uncalled share capital. Utilization Used to write off capital losses. Used only at the time of winding up.

(b) Explain the meaning of Contingent Liability with examples.

Solution:

A contingent liability is a potential liability that may or may not occur, depending on the outcome of an uncertain future event.

Example 1: Pending lawsuits against the company.

Example 2: Guarantees given for loans of others.

(c) What is position statement?

Solution:

A position statement, commonly known as a Balance Sheet, is a financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time.

Question 4 (Prepare Profit & Loss A/c) 10

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Solution Note: To prepare the P&L Account for Swift Ltd., we aggregate income and subtract expenses after adjustments.

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Gross Profit: Sales (12,70,000) - Net Purchases (7,23,000 - 9,850) - Opening Inventory (1,24,000) + Closing Inventory (87,500) - Carriage (6,410) = 5,04,240

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Operating Expenses: Audit Fees (14,600), Salaries (48,350 + 6,500), Insurance (6,400 - 1,200), Depreciation (18,000), Bad Debt Provision (7,000).[span_16](end_span)

UNIT - III

Question 5 (Answer any two) 2 x 2 = 4

(a) What is meant by amalgamation of companies?

Solution:

Amalgamation is a legal process where two or more companies join to form a new entity or one company absorbs another to gain operational efficiency.

(b) Distinguish between Internal Reconstruction and External Reconstruction.

Internal: No new company is formed; only the capital structure is reorganized.

External: The existing company is liquidated, and a new company is formed to take over its business.

Question 6 (Journal Entries for Reconstruction) 10

Key Entries:

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Equity Share Capital (Old) Dr. 2,50,000
To Equity Share Capital (New) 1,00,000 (2/5th)
To Capital Reduction A/c 1,50,000[span_21](end_span)

Capital Reduction A/c Dr. 1,50,000
To Goodwill 75,000
To Machinery 12,500
To Leasehold Premises 12,500

UNIT - IV

Question 7 (Answer any two) 2 x 2 = 4

(a) Find out liquidator's remuneration.

Calculation:

Amount for unsecured creditors = 7,41,540.

Remuneration = (7,41,540 x 2) / 102 = 14,540.

Question 8 (Liquidator's Final Statement) 10

UNIT - V

Question 9 (Answer any two) 2 x 2 = 4

(c) What is Corporate Social Responsibility (CSR) Report?

Solution: A CSR report is a document published by a company about its environmental, social, and governance (ESG) activities to demonstrate accountability to stakeholders.

Question 10 (Answer any one) 10

(a) What is integrated reporting?

Solution: Integrated reporting (IR) is a process founded on integrated thinking that results in a periodic integrated report by an organization about value creation over time.