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M.496 An Aid to Accountancy—CBSE XII

Or
(a) Zen Ltd. issued 10,000 equity shares of ` 10 each at a premium of ` 3 per share
payable as:
On Application ` 4;
On Allotment ` 5 (including premium); and
On First Call ` 2.
The balance as and when called.
Applications were received for 12,000 shares. The company made pro rata allotment
to all the applicants. One shareholder who was allotted 900 shares paid the entire
amount with allotment while another shareholder who had applied for 1,200 shares,
failed to pay the allotment money and on his subsequent failure to pay the first
call his shares were forfeited.
Of the forfeited shares, 800 were reissued at ` 7 per share as fully paid-up.

You are required to prepare:
(i) Shares Allotment Account;
(ii) Securities Premium Reserve Account;
(iii) Shares Forfeiture Account; and
(iv) Calls-in-Arrears Account.
(b) Export-Import Bank of India, an All India Financial Institution, has outstanding
` 50,00,000; 10% Debentures of ` 100 each issued in 2016, are due for redemption
on 31st March, 2018. State the amount of Debentures Redemption Reserve to be
created before the redemption of debentures begins. Also, pass Journal entries at
the time of redemption of debentures. (5 + 3)

PART B
ANALYSIS OF FINANCIAL STATEMENTS

18. State with reason whether old furniture written off would result in Inflow, Outflow or
No Flow of Cash and Cash Equivalents. (1)

19. List one difference between Investing Activity and Financing Activity. (1)
20. (a) How is Analysis of Financial Statements useful to Finance Manager?
(b) How are the following items shown in the Balance Sheet of a company:
(i) Employees’ earned leave payable on retirement;
(ii) Computer Software;
(iii) Building under Construction;
(iv) Capital Advance;
(v) Long-term Debt which has now become payable within 12 months;

(vi) Calls-in-Advance?