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A, B and C are partners in a firm sharing profits in the ratio of 5 : 3 : 2. Their capitals on 1st April, 2016 were Rs. 1,50,000, Rs. 2,00,000 and Rs. 4,00,000 respectively. A withdrew Rs. 10,000 from the firm on 15th September, 2016. B withdrew stock worth Rs. 12,000. C withdrew Rs. 1,00,000 from her capital on 1st January, 2017. The partnership deed provides for charging interest on drawings @ 6% p.a. After the final accounts were prepared, it was discovered that interest on drawings had not been charged. Give the necessary adjusting journal entry.
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State the two financial rights acquired by a new partner.
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X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2. Z retired and his capital balance after adjustments regarding reserves, accumulated profits/losses and gain/loss on revaluation was Rs. 5,00,000. Z was paid Rs. 6,00,000 in full settlement. Afterwards, S was admitted for \[\frac{1}{4}th\] share. Calculate the amount of goodwill premium brought by S.
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Why depreciation on fixed assets is not recorded in receipts and payments account?
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The subscribed share capital of XYZ Ltd is Rs. 80,00,000 divided in shares of Rs. 100 each There were no calls-in-arrears till the final call was made. The final call made was paid on 77,500 shares. The calls-in-arrears amounted to Rs. 62,500. Calculate the final call per share?
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L and M were partners in a firm. They admitted N as a new partner for 20% share in the profits. After all adjustments regarding general reserve, goodwill, gain or loss on revaluation, the balances in capital accounts of L and M were Rs. 1,92,500 and Rs. 2,07,500 respectively N brought proportionate capital so as to give him 20% share in the profits. Calculate the amount of capital to be brought by N.
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Board of directors of Design Bank Ltd want to start a new unit at a remote area of Bihar, The new unit can be started in the form of labour intensive unit with a capital of Rs. 30,00,000 or in the form of automatic plant with capital of ? 80 00 000 Directors decided to start this unit in the form of labour intensive for generation of employment opportunities in the remote area. Therefore, company purchased land for Rs. 6,00,000 and machinery for Rs. 8,00,000 In consideration of these assets, company issued 6,000 shares of Rs. 100 each at a premium of 25% and 6,500 debentures of Rs. 100 each. Identify the two values involved in the decision of directors of Design Bank Ltd and journalise the transactions.
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Calculate the amount of stationery to be debited to income and expenditure account.
| | Amt (Rs.) |
(i) | Stock of stationery on 1st April, 2017 | 7,500 |
(ii) | Creditors for stationery on 1st April, 2017 | 5,500 |
(iii) | Advance paid for stationery on 31st March, 2017 | 1,500 |
(iv) | Amount paid for stationery during the year | 17,000 |
(v) | Stock of stationery on 31st March, 2018 | 3,500 |
(vi) | Creditors for stationery on 31st March, 2018 | 1,600 |
(vii) | Advance paid for stationery on 31st March, 2018 | 1,200 |
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P, O and R are partners in a firm sharing profits in the ratio of 3 : 2 : 1. S joins the firm. P surrenders \[\frac{1}{4}th\] of his share, Q surrenders \[\frac{1}{3}rd\] of his share and R surrenders \[\frac{1}{5}th\]of his share in favour of S, Find the new profit sharing ratio.
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Brothers Ltd issued 5,000, 10% debentures of Rs. 100 each. Fill in the missing figures for the issue of debentures. JOURNAL
Date |
Particulars |
|
LF |
Amt (Dr) |
Amt (Cr) |
(i) |
......... |
Dr |
|
5,00,000 |
|
|
To Debentures Application and Allotment A/c |
|
|
|
5,00,000 |
|
(Being application money received) |
|
|
|
|
|
..... |
Dr |
|
5,00,000 |
|
|
..... |
Dr |
|
50,000 |
|
|
To 10% Debentures A/c |
|
|
|
5,00,000 |
|
To Premium on Redemption of Debentures A/c |
|
|
|
50,000 |
|
(Being transfer of application money to 10% debentures account issued at par and redeemable at premium) |
|
|
|
|
(ii) |
Bank A/c |
Dr |
|
.... |
|
|
To .....A/c |
|
|
|
.... |
|
(Being application money received) |
|
|
|
|
|
..... |
Dr |
|
.... |
|
|
..... |
Dr |
|
.... |
|
|
To 10% Debentures A/c |
|
|
|
5,00,000 |
|
To Securities Premium Reserve A/c |
|
|
|
50,000 |
|
To Premium on Redemption of Debentures A/c |
|
|
|
50,000 |
|
(Being transfer of application money to 10% debentures account issued at premium and redeemable at premium) |
|
|
|
|
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Anil, Sunil and Ravinder entered into partnership to start a business of manufacturing shoes on 1st January, 2017 to share profits in the ratio of 2 : 1 : 1. They decided to allow a discount of 30% on shoes for school going children. It was provided in the deed that Ravinder's share of profit will not be less than Rs. 70,000 per annum. The profit for the year ended 31st December, 2017 were Rs. 2,00,000 before allowing interest Rs. 8,000 on Anil's loan which is due for the current year. Prepare profit amd loss appropriation account for the year ended 31st December, 2017.
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X, Y and Z are partners sharing profits and losses in the ratio of 14 : 5 : 6 respectively. Y retires and surrenders his \[\frac{2}{25}th\]share in favour of X. The goodwill of the firm is valued at 2 years' purchase of super profits based on average profits of last 3 years. The profits of the last three years are: Rs. 1,00,000, Rs. 1,10,000 and Rs. 1,20,000 respectively. The normal profits of the similar firms are Rs. 60,000. Goodwill already appears in the books of the firm at Rs. 1,50,000. The profit for the first year after the Y?s retirement was Rs. 2,00,000. Give necessary journal entries to adjust goodwill and distribute profits and show your workings clearly.
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Following is the receipts and payments account of Star Literary Club for the year ended on or 31st March, 2018: Receipts and Payments Account Dr for the year ending 31st March, 2018 Cr
Receipts | Amt (Rs.) | Payments | Amt (Rs.) |
To Cash at Bank | 15,000 | By Salaries | 3,000 |
To Subscriptions | 63,000 | By Printing and Stationery | 1,500 |
To Annual Day Receipts | 32,160 | By Annual Day Expenses | 3,000 |
To Mushaira Receipts | 26,400 | By Telephone Charges | 3,000 |
To Dividend Receipts | 2,400 | By Sundry Expenses | 2,400 |
| | By Investments in Shares | 90,000 |
| | By Postage and Telegrams | 2,700 |
| | By Building Maintenance | 7,200 |
| | By Rent of Theatre | 12,000 |
| | By Cash at Bank | 14,160 |
| 1,38,960 | | 1,38,960 |
Additional Information
(i) On 1st April, 2017, buildings stood in the books at Rs. 60,000 and investments in shares at Rs. 6,000. Buildings are subject to depreciation @ 5% p.a. |
(ii) There were 200 members paying subscription at the rate of Rs. 300 p.a. each. Some members have paid their annual subscription in advance during the year. |
(iii) As on 1st April, 2017, no subscription had been received in advance but subscriptions were outstanding to the extent of Rs. 1,200 as at 31st March, 2017. Subscription accrued as on 31st March, 2018 was Rs. 1,800. |
(iv) Postage stamps worth Rs. 300 were in stock with secretary as on 1st April, 2017and as on 31st March, 2018, they were valued at Rs. 180. |
(v) Telephone charges paid in advance were Rs. 360. |
You are required to prepare the income and expenditure account for the year ended on 31st March, 2018 and the balance sheet as at that date.
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X, Y and Z are partners sharing profits and losses equally. From 1st April, 2017, they decide to share profits in the ratio of 2 : 1 : 1. X's share has been increased because he introduced additional capital of Rs. 1,50,000. At the time of reconstitution, the following assets and liabilities are revalued and reassessed.
Items | Book figure (Rs.) | Revised Figure (Rs.) |
Freehold Premises | 7,50,000 | 8,00,000 |
Stock | 2,25,000 | 2,00,000 |
Debtors | 75,000 | 72,000 |
Furniture | 1,00,000 | 90,000 |
Creditors | 30,000 | 25,000 |
Partners decided to record the above adjustments without affecting the book value of assets and liabilities by passing a single adjustment entry. Pass the necessary entries.
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A, B and C are partners. They decided to dissolve their firm. Pass necessary journal entries for the following after various assets (other than cash and bank) and the third party liabilities have been transferred to realisation account.
(i) There were total debtors of Rs. 76,000. A provision for doubtful debts also stood in the books at Rs. 6,000, Rs. 12,000 debtors proved bad and rest paid the amount due. |
(ii) A agreed to pay off her husband's loan of Rs. 7,000 at a discount of 5%. |
(iii) A machine which was not recorded in the books was taken over by B at Rs. 3,000, whereas its expected value was Rs. 5,000. |
(iv) The firm had a debit balance of Rs. 27,000 in the profit and loss account on the date of dissolution. |
(v) A contingent liability (not provided for) of Rs. 4,000 was also discharged. |
(vi) C paid realisation expenses of Rs. 15,000 out of her pocket and she was to get a remuneration of Rs. 18,000 for completing the dissolution process. |
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Rihaan Ltd issued a prospectus offering 2,00,000 equity shares of Rs. 10 each, at a premium of Rs. 2 per share, payable as follows : On application Rs. 2.50 per share; on allotment Rs. 4.50 per share (including premium); on first call (three months from allotment) Rs. 2.50 per share and on second call (three months after call) Rs. 2.50 per share. Subscriptions were received for 3,17,000 shares on 23rd April, 2017 and the allotment made on 30th April, was as under:
(i) Allotment in full (two applicants paid in full on allotment in respect of 4,000 shares each) | 38,000 |
(ii) Allotment of two shares for every three shares applied for | 1,60,000 |
(iii) Allotment of one share for every four shares applied for | 2,000 |
Cash amounting to Rs. 77,500 (being application money received with applications on 31,000 shares upon which no allotments were made) was returned to applicants on 6th May, 2015. The amounts called from the allottees were received on the due dates with the exception of the final call on 100 shares. These shares were forfeited on 15th November, 2017 and reissued to A on 16th November for payment of Rs. 9 per share. Record journal entries, other than those relating to cash in the books of Rihaan Ltd. Or Taj Ltd invited applications for 1,00,000 shares of Rs. 10 each at a premium of 20% payable as follows :
On application | Rs. 3 per share |
On allotment | Rs. 5 per share (including premium) |
On first call | Rs. 1 per share |
On second and final call | Rs. 3 per share |
Applications were received for 1,50,000 shares and pro-rata allotment was made on 1,20,000 shares. The remaining applications being refused. A, to whom 4,000 shares were allotted failed to pay the allotment money and on his subsequent failure to pay first call, his shares were forfeited. B, to whom 5,000 shares were allotted failed to pay the two calls. His shares were also forfeited. Out of the forfeited shares, 8,000 shares were re-issued to C credited as fully paid-up for Rs. 15 per share (whole of as shares being included). Give journal entries.
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Shiva and Anshita are partners in a firm with equal ratio. Balance Sheet as at...
Liabilities | | Amt (Rs.) | Assets | | Amt (Rs.) |
Creditors | | 86,000 | Cash in Hand | | 77,000 |
Employees Provident Fund | | 10,000 | Debtors | 42,000 | |
Investment Fluctuation Fund | | 4,000 | (-) Provision for Doubtful Debts | (7,000) | 35,000 |
Capital A/cs | | | Investments | | 21,000 |
Shiva | 1,19,000 | | Buildings | | 98,000 |
Anshita | 1,12,000 | 2,31,000 | Plant and Machinery | | 1,00,000 |
| | 3,31,000 | | | 3,31,000 |
Manav was admitted on that date for \[\frac{1}{4}th\]share of profit on the following terms :
(i) Manav will bring Rs. 50,000 as his share of capital. |
(ii) Goodwill of the firm is valued at Rs. 42,000 and Manav will bring his share of goodwill in cash. |
(iii) Buildings were appreciated by 20%. |
(iv) All debtors were good. |
(v) There was a liability of Rs. 10,800 included in creditors which was not likely to arise. |
(vi) New profit sharing ratio will be 2 : 1 : 1. |
(vii) Capital of Shiva and Anshita will be adjusted on the basis of Manav's share of capital and any excess or deficiency will be adjusted by withdrawing or bringing in cash by the concerned partners as the case may be. |
Prepare revaluation account, partners' capital accounts and the balance sheet of the new firm. Or Following is the balance sheet of Harsh, Mahima and Karan as at 31st March, 2017. Balance Sheet as at 31st March, 2017
Liabilities | | Amt (Rs.) | Assets | | Amt (Rs.) |
Employees Provident Fund | | 70,000 | Land and Building | | 4,00,000 |
Workmen Compensation Fund | | 30,000 | Machinery | | 6,00,000 |
Sundry Creditors | | 1,00,000 | Closing Stock | | 2,00,000 |
Capital A/cs | | | Sundry Debtors | 2,20,000 | |
Harsh | 4,00,000 | | (-) Provision for | | |
Mahima | 6,00,000 | | Doubtful Debts | (20,000) | 2,00,000 |
Karan | 4,00,000 | 14,00,000 | Cash at Bank | | 2,00,000 |
| | 16,00,000 | | | 16,00,000 |
On 31st March, 2017, Karan desired to retire from the firm and the remaining partners decided to carry on the business. It was agreed to revalue the assets and re-assess the liabilities on that date, on the following basis :
(i) Land and building be appreciated by 30%. |
(ii) Machinery be depreciated by 30%. |
(iii) There were bad debts of Rs. 35,000. |
(iv) The claim on account of workmen compensation fund was estimated at Rs. 15,000. |
(v) Goodwill of the firm was valued at? 28,000 and Karan's share of goodwill was adjusted against the capital accounts of the continuing partners Harsh and Mamma who have decided to share future profits in the ratio 3 : 4 respectively. |
(vi) Capital of the new firm in total will be the same as before the retirement of Karan and will be in the new profit sharing ratio of the continuing partners. |
(vii) Amount due to Karan be settled by paying Rs. 1,00,000 in cash and balance by transferring to his loan account which will be paid later on. |
Prepare revaluation account, capital accounts of partners and balance sheet of the new firm after Karan's retirement.
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Which transactions are known as non-cash transactions?
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A company reported the following information for the past year.
Net profit | Rs. 2,00,000 |
Depreciation expenses | Rs. 30,000 |
Gain on sale of truck | Rs. 5,000 |
Proceeds from sale of truck | Rs. 8,000 |
Decrease in accounts receivable | Rs. 10,000 |
What amount will the company report as the cash provided by operating activities in the cash flow statement?
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Show the major headings into which the liabilities side of a company's balance sheet is organised and presented as per Schedule III, Part I of the Companies Act, 2013.
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The quick ratio of a company is 2 : 1. State giving reasons which of the following would improve, reduce or not change the ratio :
(i) Purchase of machinery for cash |
(ii) Sale of furniture at cost |
(iii) Sale of goods at a profit |
(iv) Cash received from debtors |
Identify the value which is being shown by the liquid ratio of 2 : 1.
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Following balance sheets of Z Ltd as at 31st March, 2016 and 2017, prepare comparative balance sheet. Balance Sheet as at 31st March, 2016 and 2017
| Particulars | Note No. | 31st March, 2016 Amt (Rs.) | 31st March, 2017 Amt (Rs.) |
I. | EQUITY AND LIABILITIES | | | |
| 1. Shareholders' Funds | | | |
| (a) Share Capital | | 9,00,000 | 15,00,000 |
| (b) Reserves and Surplus | | 3,00,000 | 3,00,000 |
| 2. Non-current Liabilities | | | |
| Long-term Borrowings: (8% Debentures) | | 6,00,000 | 6,00,000 |
| 3. Current Liabilities | | | |
| (a) Trade Payables | | 2,00,000 | 4,00,000 |
| (b) Short-term Provisions | | 1,00,000 | 2,00,000 |
| Total | | 21,00,000 | 30,00,000 |
II. | ASSETS | | | |
| 1. Non-current Assets | | | |
| (a) Fixed Assets | | 12,00,000 | 15,00,000 |
| (b) Non-current Investments | | 3,00,000 | 3,00,000 |
| 2. Current Assets | | | |
| Trade Receivables | | 6,00,000 | 12,00,000 |
| Total | | 21,00,000 | 30,00,000 |
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Following is the balance sheet of Krishtec Ltd. for the year ended 31st March, 2016 and 2017. Balance Sheet as at 31st December, 2016 and 2017
| Particulars | 2016 ? 17 Amt (Rs.) | 2015 ? 17 Amt (Rs.) |
I. | EQUITY AND LIABILITIES | | |
| 1. Shareholders' Funds | | |
| (a) Share Capital | 6,00,000 | 4,00,000 |
| (b) Reserves and Surplus (Statement of Profit and Loss) | 1,75,000 | 2,00,000 |
| 2. Non-current Liabilities | | |
| Long-term Borrowings | 2,20,000 | 1,75,000 |
| 3. Current Liabilities | | |
| Trade Payables | 30,000 | 25,000 |
| Total | 10,25,000 | 8,00,000 |
II. | ASSETS | | |
| 1. Non-current Assets | | |
| Fixed Assets | 6,00,000 | 4,50,000 |
| 2. Current Assets | | |
| (a) Inventories | 1,00,000 | 50,000 |
| (b) Trade Receivables | 1,55,000 | 1,15,00 |
| (c) Cash and Cash Equivalents | 1,70,000 | 1,85,000 |
| Total | 10,25,000 | 8,00,000 |
Prepare a cash flow statement after taking into account the following adjustments:
(i) The company paid interest Rs. 18 | 000 on its long-term borrowings. |
(ii) Depreciation charged on tangible fixed assets was Rs. 60 | 000. |
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