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Model Test Papers M.387

Pass necessary Journal entries for the above transactions in the books of the company
assuming that Calls-in-Arrears Account is maintained.
Or
Raja Ltd. invited applications for 60,000 shares of ` 10 each payable as ` 2 per
share on application, ` 3 per share on allotment and the balance on First and
Final Call. Applications for 95,000 shares were received which the directors
allotted as follows:
Applications for 40,000 shares—Full,

Applications for 50,000 shares—40 per cent,
Applications for 5,000 shares—Nil.
` 1,08,000 was realised on account of allotment money (excluding the amount carried
from Application Money) and ` 2,50,000 on account of call. The directors decided
to forfeit shares on which allotment money was overdue. The forfeited shares were
reissued to Y for ` 3 per share as ` 5 paid-up.
Pass Journal entries in the company’s books and prepare Bank Account. Also show
Share Capital in the Balance Sheet of the Company. (8)

PART B

ANALYSIS OF FINANCIAL STATEMENTS
18. The accountant of ‘Manav Ltd.’, while preparing Cash Flow Statement, added the
proposed dividend of Current Year to the net profit while calculating Cash Flow from
Operating Activities. Was he correct in doing so? Give reason. (1)
19. Give one difference between Operating Activity and Investing Activity. (1)

20. (a) How are the following items shown in the Balance Sheet of a Company:
(i) Debentures Redemption Reserve,
(ii) Outstanding Expenses,
(iii) Capital Advances?
(b) Why would an investor prefer to invest partly in the Shares and partly in the
Debentures of a Company? (3 + 1)
21. (a) A company has earned ` 20,00,000 as profit before interest and tax. Its ROI is 20%.
State the capital employed in the company.
(b) Name the profitability ratio based on investment.
(c) From the following information, calculate (Any two):

(i) Operating Ratio;
(ii) Inventory Turnover Ratio; and
(iii) Proprietary Ratio.