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What is the nature of revaluation account?
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A Company has issued 10,000 equity shares of Rs.10 each and it has called the total nominal Value. It has received the total amount, except that on 500 equity shares on which it has not received the final call of Rs. 3. How will these 500 equity shares be shown in the balance sheet of the company?
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State two main characteristics of partnership?
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Khushi, Sarthak and Ayaan are partners in a firm. Sarthak gave a notice to khushi and Ayaan, in writing, informing them about his intention to retire. Can sarthak retire by giving a notice?
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In which ratio the surplus of not-for-profit organisation is distributed among its members?
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How would you calculate interest on drawings on unequal amounts drawn at unequal monthly intervals?
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From the following particulars taken from the cash book of Metto Health Club, prepare receipts and payments account.
Opening Balance | Amt (Rs.) |
Cash in Hand | 17,000 |
Cash at Bank | 85,000 |
Subscription | 5,61,000 |
Donations | 1,19,000 |
Investments Purchased | 2,72,000 |
Rent Paid | 68,000 |
General Expenses | 73,100 |
Postage and Stationery | 6,800 |
Courier Charges | 3,400 |
Sundry Expenses | 8,500 |
Closing Cash in Hand | 40,800 |
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Batra Ltd is registered with a capital of Rs. 10,00,000 divided into 1,00,000 equity shares of Rs. 10 each. It issued 75,000 equity shares to public for subscription at a premium of 20%. It received applications for 70,000 equity shares. The directors had called the entire nominal value of the shares which was duly received. How will you show the share capital in the balance sheet of Batra Ltd?
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A, B and C are partners sharing profits and losses equally. From 1st April, 2018, they decided to share profits and losses in the ratio of 5 : 3 : 2. The partnership deed provides that in the event of any change in profit sharing ratio, the goodwill should be valued at three years' purchase of the average of five years profits. The profits and losses for the preceding five years were: Profits: 2013 ? Rs. 90,000; 2014 ? Rs. 2,25,000; 2015 ?Rs. 2,55,000; 2016 - 2,85,000; 2017 - Rs. 1,05,000 (Loss). You are required to complete the following journal entry: JOURNAL
Date | Particulars | | LF | Amt (Dr) | Amt (Cr) |
2018 | | | | | |
April 1 | ??? | Dr | | 75,000 | |
| To...... | | | | 15,000 |
| To...... | | | | 60,000 |
| (Being the adjustment for goodwill made on change in profit-sharing ratio) | | | | |
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X, Y and Z were partners in a firm sharing profits in 3 : 2 : 1 ratio. The firm closes its books on 31st March every year. Y died on 12th June, 2017. On Y's death, the goodwill of the firm was valued at Rs. 60,000. His share in the profits of the firm till the time of his death was to be calculated on the basis of previous year's profit which was Rs. 1,50,000. According to Y's will, the executors should donate his share to an orphanage for girls. Pass necessary journal entries for the treatment of goodwill and Y's share of profit at the time of his death. Also, identify the value being highlighted in the question.
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XYZ Ltd. issued 1,00,000, 9% debentures of Rs. 50 each at a premium of 10% on 30th June, 2015 redeemable on 31st March, 2017. The issue was fully subscribed. The company decided to create DRR on 31st March, 2016 and also decided to invest in 10% government securities to meet the requirement. Pass journal entries for redemption of debentures.
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Anil and Sunil are partners in a firm sharing profits in the ratio of 3 : 2. They decided that w.e.f. 1st April, 2018, they will share the profits equally. The balance sheet of Anil and Sunil as at 31st March, 2018 is given below: Balance Sheet as at 31st March, 2018
Liabilities | | Amt (Rs.) | Assets | Amt (Rs.) |
Creditors | | 48,000 | Cash in Hand | 32,000 |
Outstanding Expenses | | 12,000 | Debtors | 28,800 |
Capital A/cs | | | Stock | 67,200 |
Anil | 2,40,000 | | Furniture | 49,600 |
Sunil | 2,40,000 | 4,80,000 | Machinery | 3,62,400 |
| | 5,40,000 | | 5,40,000 |
Capital of the firm was fixed at Rs. 6,40,000 to be contributed by partners in the new profit sharing ratio. The difference will be adjusted in cash. Goodwill of the firm is to be valued on the basis of two year's purchase of super profit. The average net profit expected in future by the firm is Rs. 80,000 p. a. The normal rate of return on capital employed in similar business is 10%. Prepare partner's capital account and balance sheet of the reconstituted firm.
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From the following particulars, prepare income and expenditure account.
| | Amt (Rs.) |
(i) | Subscription received | 8,74,000 |
| (including Rs. 1,84,000 of previous year) | |
(ii) | Subscription outstanding for the current year | 23,000 |
(iii) | Salary Paid | 64,400 |
| (including Rs. 6,900 of previous year) | |
(iv) | Salary outstanding for the current year | 2,300 |
(v) | Electricity expenses | 6,900 |
(vi) | Tournament expenses | 27,600 |
(vii) | Travelling expenses | 23,000 |
(viii) | Meeting expenses | 13,800 |
(ix) | Rent | 41,400 |
(x) | Purchase of books and periodicals | |
| (including Rs. 43,700 for books) | 66,700 |
(xi) | Donation received | 46,000 |
(xii) | Printing and stationery | 34,500 |
(xiii) | Postage | 9,200 |
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Following is the balance sheet of Chiku. Piku and Riku as on 1st April, 2016. Balance Sheet As at 1st April, 2016
Liabilities | | Amt (Rs.) | Assets | Amt (Rs.) |
Reserve and Surplus | | 39,000 | Land and Building | 50,000 |
Contingency Reserve | | 10,000 | Plant and Machinery | 40,000 |
Creditors | | 11,000 | Furniture and Fixtures | 20,000 |
Capital A/cs | | | Stock | 30,000 |
Chiku | 60,000 | | Debtors | 40,000 |
Piku | 50,000 | | Bank | 20,000 |
Riku | 40,000 | 1,50,000 | Profit and Loss | 10,000 |
| | 2,10,000 | | 2,10,000 |
The partnership deed provides for the following: (i) Profits and losses are to be shared in the ratio of 2 : 2 : 1 respectively. (ii) Partners are entitled to interest on capital, which will be allocated in the ratio of their capital investments. (iii) Partners are also entitled to salaries, which will be allocated in the ratio of time they devoted to firm's business. For the year ended 31st March, 2017, the firm earned a profit of Rs. 75,000. Yon are required to prepare the profit and loss appropriation account for the year ended 31st March, 2017, after taking into account the following information: (i) The contingency in respect of which the reserve was built-up would not materialize hence, is to be written back. (ii) Chiku devotes three-fourth time; Piku half time and Riku one-fourth time. (iii) The debit balance of profit and loss account is to be adjusted against current year?s income. (iv) The following amounts will be distributed to the partners: Rs. 18,000 as interest on capital. Rs. 36,000 as partners' salaries. Rs. 30,000 as share of profits. The deficiency, if any, is to be adjusted from reserve.
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Pass the necessary journal entries for the following transactions on the dissolution of firm of Anju, Bobby and Chetan (who were sharing profits in the ratio of 4 : 3 : 3) after the transfer of all assets (other than cash) and external liabilities to realisation account.
(i) Kapil, a creditor, to whom Rs. 3,000 were due to be paid, accepted office equipment Rs. 2,000 and the balance was paid to him in cash. |
(ii) Lata a creditor, to whom Rs. 8,000 were due to be paid, took over machinery at Rs. 10,000.Balance was paid by him in cash. |
(iii) Manish, an unrecorded creditor of Rs. 4,500 was paid by Anju at a discount of 10%. |
(iv) The amount of sundry liabilities (including creditors) was Rs. 1,00,000 appearing in the balance sheet, paid off in full. |
(v) An unrecorded computer of Rs. 2,500 was taken over by Bobby at discount of 10%. |
(vi) Chetan's loan of Rs. 5,000 was discharged along with accrued interest of Rs. 100 (Not yet recorded). |
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Batra Ltd. issued 20,000 shares of Rs. 100 each at a premium of Rs. 25 per share, payable as follows: Rs. 20 per share on application Rs. 45 per share on allotment (including premium of Rs. 15) Rs. 60 per share on first and final call (including premium of Rs. 10) The issue was oversubscribed by 10,000 shares. Applicants of 8,000 shares were allotted only 1,000 shares and applicants of 1,000 shares were sent letters of regret. Excess amount received at the time of application was to be adjusted only against allotment and overpayments exceeding the amount due on allotment were to be refunded. All the money due at the time of allotment and call was duly received. Pass necessary entries in the books of the firm. Or Vardhman Ltd. invited applications for 1,00,000 equity shares of Rs. 10 each. The amount was payable as follows: On application Rs. 3 per share, on allotment Rs. 5 per share, and on first and final call Rs. 2 per share. Application were received for 1,50,000 shares and pro rate allotment was made to all the applicants. Naveen, who was allotted 1,500 shares failed to pay the allotment and call money. His shares were forfeited. Out of the forfeited shares, 1,250 shares were reissued as fully paid-up @ Rs. 8 per share. Pass journal entries to record the above transactions.
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Aashi, Kiran and Madhu were carrying on partnership business sharing profits in the ratio of 3 : 2 : 1 respectively. On 31st December, 2017, the balance sheet of the firm stood as follows : Balance Sheet as at 31st December, 2017
Liabilities | | Amt (Rs.) | Assets | Amt (Rs.) |
Creditors | | 27,180 | Cash | 9,400 |
Capital A/cs | | | Debtors | 16,000 |
Aashi | 30,000 | | Stock | 23,380 |
Kiran | 20,000 | | Building | 46,000 |
Madhu | 20,000 | 70,000 | Profit and Loss | 2,400 |
| | 97,180 | | 97,180 |
Kiran retired on the above mentioned date on the following terms: (i) Buildings to be appreciated by Rs.14,000. (ii) Provision for doubtful debts to be made at 5% on debtors. (iii) Goodwill of the firm is valued at Rs. 36,000 and adjustment in this respect to be made in the continuing partners' capital account without raising goodwill account. (iv) Rs. 6,000 to be paid to Kiran immediately and the balance in her capital account to be transferred to his loan account. Prepare revaluation account, capital account and the balance sheet after Kiran's retirement. Or A and B are partners with 3 : 2 ratio. Their balance is given below: Balance Sheet as at ?
Liabilities | | Amt (Rs.) | Assets | | Amt (Rs.) |
Creditors | | 1,00,000 | Cash | | 30,000 |
Bills Payable | | 1,00,000 | Bank | | 40,000 |
Profit and Loss | | 30,000 | Debtors | 61,000 | |
Reserve Fund | | 40,000 | (-) Provision for Doubtful Debts | (1,000) | 60,000 |
Workmen's Compensation Fund | | 30,000 | Building | | 2,00,000 |
Provident Fund | | 10,000 | Machinery | | 1,00,000 |
Capital A/cs | | | Investment | | 40,000 |
A | 1,00,000 | | Patents | | 20,000 |
B | 1,00,000 | 2,00,000 | Goodwill | | 20,000 |
| | 5,10,000 | | | 5,10,000 |
Adjustments (i) C comes as a new partner. (ii) New profit sharing ratio is 5 : 3 : 2. (iii) C brings capital Rs. 80,000 and premium Rs. 20,000 out of his share of Rs. 30,000. (iv) Make 10% provision for doubtful debts on debtors. (v) Patents are valueless. (vi) Worker compensation liabilities fixed at Rs. 20,000. (vii) Building undervalued by Rs. 40,000. (viii) Machine overvalued by Rs. 10,000. Prepare necessary accounts and balance sheet of the newly constituted firm when old partners decide to adjust their capitals on the basis of new partner's capital, the balance to be adjusted through current accounts.
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From the following information, calculate cash flow from financing activities.
Particulars | 31st March, 2017 Amt (Rs.) | 31st March, 2016 Amt (Rs.) |
Equity Share Capital | 20,00,000 | 18,00,000 |
Securities Premium Reserve | 5,20,000 | 5,00,000 |
12% Debentures | 2,00,000 | 3,00,000 |
Additional Information Interest paid on debentures Rs. 36,000.
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State the purpose of the cash equivalents.
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Prepare the balance sheet for Rishant Ltd. as on at 31st March, 2017 from the following information as per provisions of Schedule III Part I of the Companies Act, 2013. Identify the values involved in the presentation of balance sheet.
Particulars | Amt (Rs.) |
General Reserve | 3,00,000 |
8% Debentures | 3,00,000 |
Balance of Statement of Profit and Loss (Credit) | 1,20,000 |
Depreciation of Fixed Assets | 70,000 |
Tangible Fixed Assets (Cost) | 9,00,000 |
Trade Payables | 2,50,000 |
Preference Share Capital | 5,00,000 |
Inventories | 64,000 |
Trade Receivables | 2,56,000 |
Cash and Cash Equivalents | 3,20,000 |
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Calculate current ratio of a company from the following information: Stock turnover ratio = 4 times Stock at the end = Rs. 20,000 more than stock in the beginning Revenue from operations = Rs. 5,00,000 Gross profit ratio = 20% Current liabilities = Rs. 50,000 Quick ratio = 0.8:1
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Prepare comparative statement of profit and loss from the following statement of profit and loss.
| Particulars | 2016 Amt (Rs.) | 2017 Amt (Rs.) |
I. | Income | | |
| Revenue from Operations (Sales) | 3,00,000 | 3,50,000 |
II. | Expenses | | |
| Purchases of Stock-in-trade | 1,80,000 | 2,10,000 |
| Changes in Inventories of Stock-in-trade | 20,000 | 15,000 |
| Employees Benefit Expenses | 15,000 | 17,500 |
| Other Expenses | 5,000 | 7,500 |
| Total | 2,20,000 | 2,50,000 |
III. | Net Profit (I - II) | 80,000 | 1,00,000 |
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From the following information, calculate cash flow from investing activities.
Particulars | Closing (Rs.) | Opening (Rs.) |
Machinery (At cost) | 8,40,000 | 8,00,000 |
Accumulated Depreciation | 2,20,000 | 2,00,000 |
Patents | 3,20,000 | 5,60,000 |
Additional Information
(i) During the year, a machine costing Rs. 80,000, accumulated depreciation Rs. 48,000 was sold for Rs. 40,000. |
(ii) Patents were written-off to the extent of Rs. 80,000 and some patents were sold at a profit of Rs. 40,000. |
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