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Name the account which is usually considered to adjust the share of profits upto date of death of the deceased partner.
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Rahul is admitted as a partner in M/s ABC & Co. Rahul was to bring Rs. 1,00,000 as goodwill. But he is not in a position to bring in the goodwill. The accountant has recorded an entry in the books of accounts by debiting goodwill account and crediting sacrificing partners' capital account. Do you think the accountant has recorded the entry correctly? Give reasons.
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Other than minors, list any two categories of individuals who cannot be admitted by a partnership firm?
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Which is the main source of income of not-for-profit organisations?
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Arun, Vijay and Raju are partners in a firm. They do not have a partnership deed. Arun and Raju have contributed a larger amount of capital as compared to Vijay and therefore, they want that the profits should be distributed in the capital ratio but Vijay did not agree. Will the claim of Arun and Raju be accepted?
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Zen Ltd invited applications for issuing 1,000, 12% debentures of Rs. 100 each at a discount of 5%. These debentures were redeemable after three years at par. Applications for 1,200 debentures were received. Pro-rata allotment was made to all the applicants. Pass necessary journal entries for the issue of debentures assuming that the whole amount was payable with application.
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The authorised capital of Chaturvedi Ltd is Rs. 50,00,000 divided into 25,000 shares of Rs. 200 each. Out of these, the company issued 12,000 shares of Rs. 200 each at a premium of 10%. The amount per share was payable as follows: Rs. 60 on application Rs. 60 on allotment (including premium) Rs. 30 on first call and balance on final call. Public applied for 11,000 shares. All the money was duly received. Prepare an extract of balance sheet of Suhas Ltd as per Revised Schedule III, Part I of the Companies Act, 2013 disclosing the above information. Also prepare notes to accounts for the same.
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Complete the following journal entries. JOURNAL
Date |
Particulars |
|
LF |
Amt (Dr) |
Amt (Cr) |
|
Sundry Assets A/c |
Dr |
|
20,00,000 |
|
|
............... |
Dr |
|
.... |
|
|
To Sundry Liabilities A/c |
|
|
|
3,00,000 |
|
To Vendor's A/c |
|
|
|
17,60,000 |
|
(Being the purchase consideration for acquiring the business) |
|
|
|
|
|
............. |
Dr |
|
.... |
|
|
To 10% Debentures A/c (10,000 x 100) |
|
|
|
10,00,000 |
|
To......... |
|
|
|
.... |
|
To......... |
|
|
|
.... |
|
To......... |
|
|
|
.... |
|
(Being the purchase consideration settled by issue of 10,000 10% debentures of Rs. 100 each at a premium of 10%, 6,000 Equity shares of Rs. 100 each and 60,000 in cash) |
|
|
|
|
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On the basis of the following information, calculate the amount of stationery to be debited in income and expenditure account for the year ended on 31st March, 2017:
| | Amt (Rs.) |
(i) | Stock of stationery on 1st April, 2016 | 21,000 |
(ii) | Creditors for stationery on 1st April, 2016 | 14,000 |
(iii) | Amount paid for stationery on 31st March, 2017 | 75,600 |
(iv) | Stock of stationery on 31st March, 2017 | 3,500 |
(v) | Creditors for stationery on 31st March, 2017 | 9,100 |
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Ayaan and Husna are partners. Ayaan's capital is Rs. 2,50,000 and Husna's capital is Rs. 1,60,000. Interest is payable @ 8% p.a. Husna is entitled to a salary of Rs. 3,000 per month for extra time, she devotes to the business. Profit for the current year before interest and salary to Husna is Rs. 1,00,000. Divide the profit between Ayaan and Husna. Identify the value shown by the firm in allowing salary to Husna.
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R, Q and R were partners in a firm sharing profit in 2 : 2 : 1 ratio. The firm closes its books on 31st March every year. P died three months after the last accounts were prepared. On that date, the goodwill of the firm was valued at Rs. 90,000. On the death of a partner, his share of profit in the year of death was to be calculated on the basis of the average profit of the last four years. The profits of last four years were:
I. Rs. 2,00,000 |
II. Rs. 1,80,000 |
III. Rs. 2,10,000 |
IV. Rs. 1,70,000 (Loss) |
Pass the necessary journal entries to adjust P?s Share of goodwill and Profit.
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X and Y were partners in a firm sharing profits and losses in the ratio of 3 : 5. Their fixed capitals were Rs. 2,00,000 and Rs. 3,00,000 respectively On 1st January, 2017, Z was admitted as a new partner for \[\frac{1}{4}th\] share in the profits. Z acquired his share of profit from Y. Z brought Rs. 2,00,000 as his capital which was to be kept fixed like the capitals of X and Y. Calculate the goodwill of the firm on Z's admission and the new profit sharing ratio of X, Y and Z. Also, pass necessary journal entry for the treatment of goodwill on Z's admission considering that Z did not bring his share of goodwill premium in cash.
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R Q and R were partners in a firm sharing profits and losses equally. The goodwill of the firm was valued at two years' purchase of the average profits of last five years. The profits of the last five years were as follows:
Year | Profit (Rs.) |
I | 2,00,000 |
II | 2,40,000 |
III | 3,66,500 |
IV (Loss) | 16,500 |
V | 1,10,000 |
Goodwill is already appearing in the books at Rs. 90,000. From 1st April, they decided to share profits in the ratio of 1 : 2 : 1 : You are required to (i) Calculate the goodwill of the firm. (ii) Pass necessary journal entry.
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Pass necessary journal entries for recording the following transactions at the time of dissolution of the firm.
(i) Z, a partner agreed to pay off his wife's loan Rs. 20,000. |
(ii) X, a partner takes over an unrecorded asset (typewriter) at Rs. 300. |
(iii) Undistributed balance (debit) of profit and loss account Rs. 30,000. The firm has three partners X, Y and Z. |
(iv) Y who undertakes to carry out the dissolution proceedings is allowed Rs. 2,000 for the same. |
(v) Partner Y's loan paid off Rs. 10,000. |
(vi) Rs. 10,000 bills payable settled at Rs. 8,000. |
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Following are the details furnished by Youth Club. You are required to prepare balance sheet as at 31st March, 2017 and 31st March, 2018. Receipts and Payments Account Dr for the year ending 31st March, 2018 Cr
Receipts |
Amt (Rs.) |
Payments |
Amt (Rs.) |
To Balance b/d |
|
By Salaries |
15,125 |
Cash |
4,250 |
By Insurance |
3,935 |
Bank |
15,500 |
By Furniture Purchased (during the year) |
6,390 |
To Entrance Fees |
18,125 |
By Postage |
3,185 |
To Subscription Received |
|
By Printing and Stationery |
8,440 |
2016-17 |
4,000 |
By Sundry Expenses |
5,625 |
2017-18 |
55,625 |
By Members Meeting expenses |
31,375 |
To Sale of Old Newspapers |
1,375 |
By Closing Balance |
|
To Lecture Meet Fees |
4,750 |
Cash |
16,875 |
To Sale of Old Furniture (1st Oct, 2017) |
6,825 |
Bank |
19,500 |
|
1,10,450 |
|
1,10,450 |
Income and Expenditure Account Dr for the year ending 31st March, 2018 Cr
Expenditure |
Amt (Rs.) |
Income |
|
Amt (Rs.) |
To Salaries |
15,125 |
By Entrance Fees |
|
18,125 |
To Insurance |
3,935 |
By Subscription |
55,625 |
|
To Postage |
3,185 |
(+) Outstanding for Current Year |
6,875 |
62,500 |
To Printing and Stationery |
8,440 |
By Lecture Meet Fees |
4,750 |
|
To Sundry Expenses |
5,625 |
(+) Outstanding Per Current Year |
1,500 |
6,250 |
To Members Meeting Expenses |
31,375 |
By Sale of Newspapers |
|
1,375 |
To Depreciation: Furniture @ 10% |
515 |
By Profit on Sale of Furniture |
|
1,125 |
Machinery @ 20% |
2,500 |
|
|
|
Building @ 10% |
12,500 |
|
|
|
To Excess of Income over |
|
|
|
|
Expenditure |
6,175 |
|
|
|
|
89,375 |
|
|
89,375 |
|
Details: |
(31st March, 2017) |
(31st March, 2018) |
(i) |
Subscription Due and Outstanding |
5,000 |
.... |
(ii) |
Club Building |
.... |
1,12,500 |
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Makkar Ltd was registered with an authorised capital of Rs. 20,00,000 in Rs. 10 per equity share. It invited applications for issuing 1,00,000 equity shares at a premium of Rs. 2 per share. The amount was payable as follows:
On application | Rs. 4 Per Share (Including premium) |
On allotment | Rs. 3 Per Share |
On first and final call | balance amount |
Applications were received for 1,30,000 shares. Applications for 10,000 shares were rejected and the application money received on them was refunded. Pro-rata allotment was made to the remaining applications. Amount overpaid on these applications was adjusted towards the amount due on allotment. Raj, who had applied for 1,200 shares, failed to pay the allotment and call money. The company forfeited his shares, out of which 800 shares were re-issued to Mohan at Rs. 9 per share fully paid up. You are required to (i) Pass the journal entries in the books of the company through calls-in-arrears account. (ii) Prepare the share allotment account. Or Gupta Ltd made an issue of 1,00,000 equity shares of Rs. 10 each, payable as follows On application Rs. 2.50 per share; on allotment ? 2.50 per share and balance amount on first and final call. Members holding 400 shares did not pay the call money and their shares were duly forfeited. 200 of the forfeited shares were reissued as fully paid at Rs. 5 per share. Draft necessary journal entries and prepare share capital and forfeited shares accounts in the books.
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A, B and C are partners with 2 : 2 : 1 ratio. The following is their balance sheet: Balance Sheet as at ...
Liabilities | | Amt (Rs.) | Assets | Amt (Rs.) |
Creditors | | 1,00,000 | Bank | 40,000 |
Bills Payable | | 70,000 | Debtors | 60,000 |
General Reserve | | 30,000 | Building | 2,00,000 |
Profit and Loss | | 20,000 | Machinery | 80,000 |
Capital A/cs | | | Patents | 20,000 |
A | 1,00,000 | | Goodwill | 20,000 |
B | 60,000 | | | |
C | 40,000 | 2,00,000 | | |
| | 4,20,000 | | 4,20,000 |
Adjustments (i) C takes retirement. (ii) Goodwill of the firm is valued at Rs. 60,000. (iii) Building undervalued by Rs. 20,000. (iv) A debtor of Rs. 10,000 became insolvent and nothing is receivable from him. (v) Provision for outstanding repair bills Rs. 5,000. (vi) Rs. 10,000 unrecorded creditors brought into account. (vii) A and B decide to pay off C by taking necessary bank overdraft. Prepare revaluation account, partners' capital accounts, bank account and balance sheet. A and B were partners in a firm sharing profits in the ratio 3 : 1. They admitted C as a new partner for \[\frac{3}{8}th\] share in the profits. The new profit sharing ratio will be 3 : 2 : 3. C brought in Rs. 3,00,000 for his capital an Rs. 50,000 for his share of premium for goodwill. On 31st March, 2018, the date of admission, the balance sheet was as follows: Balance Sheet as at 31st March, 2018
Liabilities | | Amt (Rs.) | Assets | Amt (Rs.) |
Creditors | | 60,000 | Cash | 90,000 |
Employees Provident Fund | | 20,000 | Debtors | 80,000 |
Capital A/cs | | | Stock | 1,50,000 |
A | 4,00,000 | | Furniture | 50,000 |
B | 1,00,000 | 5,00,000 | Machinery | 2,10,000 |
| | 5,80,000 | | 5,80,000 |
It was agreed that (i) Stock found undervalued by Rs. 50,000. (ii) Machinery will be depreciated to 88% and furniture be written down by 4%. (iii) A provision of 5% for doubtful debts will be made on debtors. (iv) The capital accounts of all the partners were adjusted in the new profit sharing ratio after admission. For surplus or deficiency, the current accounts were to be opened. Prepare revaluation account, partners' capital account and the balance sheet of the new firm.
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To be qualified as cash equivalents, what should be the maturity period for a short term investment from the date of its acquisition?
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Vivek purchased a machinery worth Rs. 20,00,000 on hire purchase basis. Under what type of activity, 'payment of instalment' and 'interest' can be classified as per cash flow statement?
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Under what sub headings will you show the following items?
(i) Unclaimed dividend |
(ii) Loans repayable on demand |
(iii) Sinking fund |
(iv) Tax reserve |
(v) Interest on calls-in-advance |
(vi) Mining rights |
(vii) Vehicles |
(viii) Encashment of employees earned leave payable on retirement |
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From the following statement of profit and loss, prepare comparative income statement. Statement of Profit and Loss for the years ending......
| Particulars | 31st March, 2016 Amt (Rs.) | 31st March, 2017 Amt (Rs.) |
I. | Income | | |
| Revenue from Operations (Net sales) | 4,00,000 | 5,00,000 |
| Other Incomes | 20,000 | 30,000 |
| Total | 4,20,000 | 5,30,000 |
II. | Expenses | | |
| Purchases of Stock-in-trade | 1,80,000 | 3,10,000 |
| Changes in Inventories of Stock-in-trade | 20,000 | (10,000) |
| Employees Benefit Expenses | 30,000 | 80,000 |
| Other Expenses | 70,000 | 90,000 |
| Total | 3,00,000 | 4,70,000 |
III. | Profit (I - II) | 1,20,000 | 60,000 |
Additional Information
Other expenses include | | |
Provision for Tax | Rs. 60,000 | Rs. 70,000 |
Identify the values in using actual figures (without any window dressing) by the company's management in the comparative income statement.
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Calculate current assets of a company from the following information: Stock Turnover Ratio = 4 times. Stock at the end is Rs. 20,000 more than the stock in the beginning. Sales Rs. 3,00,000 and Gross Profit Ratio is 20% of Sales. Current Liabilities = Rs. 40,000, Quick Ratio = 0.75
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Batra Ltd. made a profit of Rs. 1,20,000 after considering the following during the year 31st March, 2017.
(i) Depreciation of fixed assets Rs. 30 | 000. |
(ii) Amortisation of goodwill Rs. 20 | 000. |
(iii) Loss on sale of machine Rs. 10 | 000. |
(iv) Profit on sale of building Rs. 20 | 000. |
(v) Transfer to general reserve Rs. 30 | 000. |
(vi) Interim dividend paid Rs. 20 | 000. |
(vii) Dividend received on investment Rs. 10 | 000. |
(viii) Provision for taxation made Rs. 16 | 000. |
The following additional information is also available to you.
Particulars | 31st March, 2016 Amt (Rs.) | 31st March, 2017 Amt (Rs.) |
Accounts Receivable | 60,000 | 50,000 |
Accounts Payable | 30,000 | 70,000 |
Prepaid Expenses | 5,000 | 3,000 |
Calculate cash flow from operating activities.
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