HIGHER FINANCIAL ACCOUNTING (HFA) MCQS
S.Y. B.COM
SEMESTER - III
HIGHER FINANCIAL ACCOUNTING
(HFA)
MCQS -
• REDEMPTION OF PREFERENCE SHARE
• PROFIT / LOSS PRIOR TO INCORPORATION
PROFIT / LOSS PRIOR TO INCORPORATION
1) ABC ltd was incorporated on 1st march, 2017 and received its certificate of commencement of business on 1st April, 2017. the company bought the business of CBA ltd. with effect from 1st November, 2016. sales for the year were RS.3,00,000 out of which sales up to 1st march were RS.1,25,000. the company close it books of account on oct, 2017. find out the sales ratio.
a) 7:5
b) 2:5
c) 5:7
d) 5:2
2) Calculate sales ratio from the following information :
sales for the year RS.6,00,000 of which RS.1,20,000 were for first six months. date of acquisition:
1st April, 2010, date of incorporation : 1st July 2010, year end : 31st march, 2011
a) 1:9
b) 1:13
c) 1:4
d) 4:1
3) K ltd. was incorporated on 1st aug, 2016 to take over running business of MS lal & Co. with effect from 1st april, 2016. year ended 31st march, 2017. total sales for the year amounted to RS.32,00,000 out of which sales of pre-incorporation period is 8,00,000. A commission of 0.5% was paid on sales. find out the commission for pre-incorporation and post-incorporation.
a) RS.4,000 & RS.12,000
b) RS.4,000 & RS.16,000
c) RS.5,333 & RS.10,667
d) None of these
4) Jamun ltd was incorporated on 1st aug, 2016 to take over running business of rasmnalai & Co. with effect from 1st april, 2016 year ended on 31st march, 2017 total sales for the year is a amounted to RS.16,00,000 out of which sales of pre-incorporation period is 4,00,000 a commission of 0.5% was paid on sales find out commission for pre incorporation and post incorporation
a) RS.2000 & RS.6000
b) RS.2000 & RS.8000
c) RS.2667 & RS.5333
d) None of the above
5) C ltd was incorporated on 1st August, 2016 to take over running business of M/S deep & Co. with effect from 1st april, 2016 year ended 31st march, 2017 office rent was paid RS.2800 per month upto 30th september and there after it was paid at RS.3600 per month. find out the amount of office rent for post incorporation period
a) RS.27,200
b) RS.21,600
c) RS.11.200
d) RS.28,000
6) Maitri ltd was incorporated on 1-5-2016 to take over partnership of X and Y as a goind concern from 1-1-2016 profit and loss account for year ended prepared on 31-12-2016. total sales for the year were RS.12,00,000. it is ascertained that the sales for november and december are one and half times the average of those for the year, while those for february and april are only half the average calculate sale ration,
a) 1:2
b) 1:3
c) 2:5
d) 1:4
7) Director's fees is RS.30,000 time ratio 1:2 sales ratio 1:3.
Compute the amount apportioned in pre incorporation period.
a) RS.10,000
b) RS.7500
c) Nil
d) RS.30,000
8) ABC ltd is incorporated on 01-08-2017 on take over the running business of P & Co. From 01-04-2017. Financial year ended on 31-03-2018. Compute the time ratio.
a) 5:7
b) 7:5
c) 2:1
d) 1:2
9) In case of determining profit between pre incorporation and post incorporation periods, preliminary expenses written off should be allocated on in
a) Time basis
b) Sales basis
c) Post incorporation period
d) Pre incorporation period
10) Pre incorporation profit transferred to ...........
a) Capital reserve
b) Capital redemption reserve
c) General reserve
d) None of these
11) Profit earned after incorporation is a
a) Capital profit
b) Revenue profit
c) Both capital profit and Revenue profit
d) None of these
12) Loss prior to incorporation is
a) Credited to goodwill account
b) Credited to capital reserve account
c) Debited to goodwill account
d) Debited to capital reserve account
REDEMPTION OF PREFERENCE SHARE
1) Hero industries purchased a plant from hind industries for RS.10,00,000. the company paid RS.2,00,000 in cash and agreed to allot 15% redeemable preferences shares of RS.100 each for the balance amount.
How many 15% preference share of RS.100 each will be allotted to the vendor, if the shares are issued at a premium of 25% ?
a) 8000 shares
b) 6400 shares
c) 7200 shares
d) 7580 shares
2) O ltd has redeemed its 12% preference shares of RS.2,00,000 at a premium of 4% to meet the redemption, it has issued RS.1,98,000 shares of RS.20 each at a premium of 5% the balance outstanding to the credit of shares premium A/C after adjusting premium on redemption of preference shares will be-
a) Nil
b) RS.1904
c) RS.1900
d) RS.8000
3) A company issued 15,000 9% preference shares of 100 each at 5% discount and 2,00,000 equity shares RS.10 each at 10% premium, full amount was received from the applicants in one instalment. Net balance in securities premium A/C will be-
a) RS.75,000
b) RS.1,25,000
c) RS.2,00,000
d) Cannot be determined
4) Indigo ltd had 9000, 10% redeemable preference shares of RS.10 each, fully paid up. The company decided to redeem these preference shares at par by the issue of sufficient number of equity shares of RS.10 each fully up at a discount of 10% the number of equity shares issued should be-
a) 9000
b) 11,000
c) 10,000
d) None of the above
5) A company's balance sheet contain RS.1.6 lakhs fully paid 10% redeemable preference shares and RS.1,00,000 as revenue reserve. it decides to redeem the shares at 5% premium by maximum utilization of earnings and from fresh issue of shares.
If the issue is made at 20% premium, the minimum amount of fresh equity issue will be-
a) RS.28,000
b) RS.60,000
c) RS.36,000
d) RS.37,000
6) Following are details of ABC ltd -
- Outstanding redeemable preference shares = RS.3,00,000
- General reserve = RS.1,50,000
- Security premium balance = RS.35,000
- Fresh issue of shares to be made at 10% discount. the value of fresh issued shares will be
a) RS.1,66,667
b) RS.1,50,000
c) RS.1,85,000
d) RS.1,80,000
7) Determine the amount of fresh issue of shares from the following information relating to shagoon leather works ltd
- Redeemable preference shares RS.2,00,000
- Premium on redemption 10%
- Divisible profits available RS.60,000 balance in general reserve RS.40,000
- Balance in security premium A/C RS.25,000 fresh issue to be made at a discount of 10%
a) Shares of a nominal amount of RS.1,00,000
b) Shares of a nominal amount of RS.1,11,111
c) Shares of a nominal amount of RS.90,000
d) None of the above
8) Ajay ltd decides to redeem 10,000 preference shares of RS.10 each at 10% premium. balance in P&L A/C is RS.60,000 and securities premium A/C is RS.5000, you are required to calculate the minimum number of equity shares at the rate of RS.10 each at 20% discount
a) 3125
b) 5625
c) 5000
d) None
CRR
1) Calculate the amount to be transferred to capital redemption reserve A/C in each of the following cases
[a] Redeemable preference shares - RS.50,000 redeemable at par.
New issue of shares - RS.30,000 at par
a) RS.50,000
b) RS.30,000
c) RS.20,000
d) None of these
[b] Redeemable preference shares - RS.50,000 redeemable at 5% premium. New issue of shares - RS.30,000 at par
a) RS.25,000
b) RS.20,000
c) RS.22,500
d) None of these
[c] Redeemable preference shares - RS.50,000 redeemable at par. New issue of shares - RS.30,000 at premium of 5%
a) RS.20,000
b) RS.30,000
c) RS.21,500
d) None of these
[d] Redeemable preference shares - RS.50,000 redeemable at par. New issue of shares - RS.30,000 at discount of 10%
a) RS.20,000
b) RS.23,000
c) RS.27,000
d) None of these
2) If foe the redemption of preference shares capital of RS.1,00,000, 5000 equity shares of RS.10 each are issued at a discount of 10% the amount to be transferred to capital redemption reserve fund will be-
a) RS.60,000
b) RS.50,000
c) RS.55,000
d) RS.45,000
3) Preference shares of RS.2 lakhs are redeemed at par for which fresh equity shares of RS.80,000 are issued a 10% premium what amount should be transferred to capital redemption reserve?
a) RS.2,00,000
b) RS.80,000
c) RS.1,20,000
d) RS.1,12,000
4) A limited company has to redeem redeemable preference shares of the value of RS.1,00,000 for which the company has issued 3000 equity shares of RS.10 each at a premium of 10% the amount to be transferred to capital redemption reserve account will
a) RS.1,00,000
b) RS.97,000
c) RS.70,000
d) RS.67,000
5) 5 ltd issued 2000, 10% preference shares of RS.100 each at par which is redeemable at a premium of 10% for the purpose of redemption, the company issued 1500 equity shares of RS.100 each at a premium of 20% per share. at the time redemption of preference shares, the amount to be transferred by the company to the capital redemption reserve account will be-
a) RS.50,000
b) RS.40,000
c) RS.2,00,000
d) RS.2,20,000
6) Rich ltd had 3000 12% redeemable preference shares of 100 each, fully paid up. the company issued 25,000 equity shares of RS.10 each at per and 1000 14% debentures of RS.100 each. all amounts were received in full. the payment to preference shareholder was made in full. the amount to be transferred to capital redemption reserve A/C is -
a) Nil
b) RS.2,00,000
c) RS.3,00,000
d) RS.50,000
7) Ankush ltd had issued 10,000, 10% redeemable preference shares of RS.100 each fully paid up. The company decided to redeem these preference shares at par, by issue of sufficient number of equity shares of RS.10each at a premium of 2 per shares as fully paid up. the amount to be transferred to capital redemption reserve account will be -
a) RS.10,00,000
b) RS.12,00,000
c) RS.8,00,000
d) Nil
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