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ISC Ltd issued 10,000,10% debentures of Rs. 100 each at a premium of 8% on 30th June, 2016, redeemable at par on 30th June, 2017. The issue was fully subscribed. How much amount of DRR is to be created before redemption of debentures.
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How does the factor location affect the goodwill of the firm?
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The accountant of a firm has debited salary or commission paid to a partner to profit and loss appropriation account. Is the treatment correct?
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On firm's dissolution, what entry will be passed when a partner A took over 50% of the stock at a discount of 20% (Book value of stock was Rs. 5,00,000).
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How would you calculate interest on drawings of equal amounts drawn on the last day of every month.
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State anyone distinguishing feature of not-for-profit organisations from that of profit making organisations?
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Kompact Ltd's main business is manufacturing of tyres. The company is very particular about the observation of the provisions of the companies act. On 1st April, 2014, the company issued Rs. 9,00,000, 8% debentures of Rs. 100 each. The debentures were redeemable at a premium of 5%. On 31st March, 2017, all the debentures were redeemed. Since the manufacturing of tyres results in air pollution, the company had installed a plant for its effective control. Pass necessary journal entries for the redemption of debentures.
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Show the following items in the balance sheet of a not-for-profit organisation:
(i) Donation received for auditorium construction | Rs. 7,00,000 |
(Expected total cost of the auditorium Rs. 10,00,000) | |
(ii) Expenditure on construction of auditorium | Rs. 5,50,000 |
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On 1st April, 2017, Greeland Ltd was formed with an authorised capital of Rs. 5 00 000 divided into 50,000 equity shares of Rs. 10 each. The company issued prospectus inviting applications for 45,000 equity shares. The company received applications for 42,500 equity shares. During the first year, Rs. 8 per share were called. X holding 500 shares and Y holding 1,000 shares did not pay the first call of Rs. 2 per share Y's shares were forfeited after the first call and later on 750 of the forfeited shares were re-issued at Rs. 6 per share, Rs. 8 called-up. Show the following:
(i) Share capital in the balance sheet of the company as per Schedule III Part I of the Companies Act, 2013. |
(ii) Also prepare notes to accounts for the same. |
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After completing MBBS, Chahat suggested to her classmate Kamakshi to form a partnership to run a hospital in the locality inhabited by low income group. After a long thought, she agreed to her proposal. Since, they did not have sufficient resources for implementing the proposal, they persuaded a rich friend Raunak who contributed the required capital. All of them formed a partnership on the following terms:
(i) Chahat, Kamakshi and Raunak will contribute Rs. 1,50,000; Rs. 2,50,000 and Rs. 5 00 000 respectively. |
(ii) Interest on capital @ 6% p.a. will be allowed. |
The profits of the firm for the year ended 31st March, 2017 were Rs. 4,50,000. Prepare profit and loss appropriation account of the firm for the year ending 31st March, 2016. Identify the values which according to you motivated them to form the Partnership.
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X and Y are partners sharing profits in the ratio of 3 : 2. They admit Z into the firm for \[\frac{3}{10}th\] profit which he takes \[\frac{2}{10}th\] from X and \[\frac{1}{10}th\] from Y and brings a part of his share of premium for goodwill in cash. Fill in the missing information in the following journal entries and compute the new ratio of X, Y and Z. JOURNAL
Date |
Particulars |
|
LF |
Amt (Dr) |
Amt (Cr) |
|
Bank A/c |
Dr |
|
.... |
|
|
To Premium for Goodwill A/c |
|
|
|
.... |
|
(........................) |
|
|
|
|
|
Premium for Goodwill A/c |
Dr |
|
1,20,000 |
|
|
Z's Current A/c |
Dr |
|
3,30,000 |
|
|
To..... |
|
|
|
.... |
|
To..... |
|
|
|
.... |
|
(.......................) |
|
|
|
|
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P Q and R are partners in a firm sharing profits in the ratio of 1 : 1 : 3 respectively. Their capital accounts showed the following balances on 31st March, 2017: P - Rs. 1,00,000 ; Q Rs. - 1,50,000 and R - Rs. 2,00,000. Firm closes its accounts every Year on 31st March. P died on 30th September, 2017. In the event of death of any partner, the partnership deed provides for the following:
(i) Interest on capital will be calculated at the rate of 6% p.a. |
(ii) The deceased partner's share in the goodwill of the firm will be calculated on the basis of 2 years' purchase of the average profit of last three years. The profits of the firm for the last three years were Rs. 80,000; Rs. 90,000 and Rs. 1,30,000 respectively. |
(iii) His share in the reserve fund of the firm will be paid. The reserve fund of the firm was Rs. 80,000 at the time of A?s death. |
(iv) His share of profit till the death will be calculated on the basis of sales. It is also specified that the sales during the year 2016-2017 were Rs. 15,00,000. The sales from 1st April, 2017 to 30th September, 2017 were Rs. 5,00,000. |
The profit of the firm for the year ending 31st March, 2017 was Rs. 3,00,000. Prepare P's capital account to be presented to his legal representatives.
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Following is the receipts and payments account of Star Club for the year ending 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 | 984 | By Salaries | 4,992 |
To Subscriptions | 7,280 | By Stationary | 456 |
(including Rs. 160 for 2016-17 and Rs. 240 for 2018-19) | | By Meeting Expenses | 720 |
To Interest on Investments | 3,240 | By Books | 1,600 |
To Sale of Machinery | 480 | By Balance c/d | 2,616 |
(Book value Rs. 400) | | | |
| 11,984 | | 11,984 |
Additional Information
(i) On 1st April, 2017 the club had investments Rs. 64,000, machinery Rs. 4,800, Books Rs. 8,000. |
(ii) Salary outstanding 31st March, 2017 Rs. 416 and 31st March, 2018 Rs. 528 |
Prepare income and expenditure account for the year ending 31st March, 2018 and a balance sheet as on that date.
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Kanika, Sakshi and Aroha are Partners sharing profits and losses as 25%, 35% and 40%. Kanika decided to retire with the consent of other partners and sold her share to Sakshi. Goodwill was valued at two and a half years' purchase of the average profits of three years. Profits of these three years were Rs. 1,50,000, Rs. 1,70,000 and Rs. 1,60,000. Reserve fund stood in the balance sheet at Rs. 1,30,000 at the time of retirement. You are required to record necessary journal entries regarding above adjustment on Kanika's retirement. Also prepare her capital account to find out the amount due to her, when her capital balance in the balance sheet was Rs. 1,25,000 before any of the above adjustment.
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A, B and C are partners sharing profits equally. They decided that in future C will get l/5th share in profits. On the day of change, following is their balance sheet: Balance Sheet as at......
Liabilities | | Amt (Rs.) | Assets | | Amt (Rs.) |
Creditors | | 12,000 | Cash | | 5,400 |
Capital A/cs | | | Debtors | 14,400 | |
A | 9,000 | | (-) Reserve | (2,400) | 12,000 |
B | 9,000 | | Stock | | 7,500 |
C | 5,400 | 23,400 | Machinery | | 4,500 |
| | | Building | 6,000 | |
| | 35,400 | | | 35,400 |
On this date, building have been valued at Rs. 9,000, stock to be reduced by Rs. 300 and provision for doubtful debts to be reduced by Rs. 900. Prepare necessary ledger accounts and balance sheet.
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The Orient Company offered for public subscription 20,000 equity shares of Rs. 10 each at a premium of 10% payable as Rs. 2 on application, Rs. 4 on allotment (including premium), Rs. 3 on first call and Rs. 2 on second and final call. Applications for 26,000 shares were received. Applications for 4,000 shares were rejected. Pro-rata allotment was made to the remaining applicants. Both the calls were made and all the money was received except the final call on 500 shares which were forfeited. 300 of the forfeited shares were later on re-issued as fully paid up at Rs. 9 per share. Give journal entries. Or Arora Ltd issued a prospectus inviting applications for 20,000 shares of Rs. 10 each at a premium of Rs. 2 per share payable as follows: On application Rs. 2, on allotment Rs. 5 (including premium), on first call Rs. 3, on second and final call Rs. 2. Applications were received for 30,000 shares and pro-rata allotment was made on the applications for 24,000 shares. Money overpaid on application was employed on account of sum due on allotment. Sanchit, to whom 400 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited. Parth, the holder of 600 shares, failed to pay the two calls and his shares were forfeited after the second call. Of the shares forfeited, 800 shares were sold to Siddharth credited as fully paid for Rs. 9 per share, the whole of Sanchit's shares being included. Show the journal entries.
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Ram and Laxman are partners in a firm with equal ratio. Balance Sheet as at 31st March, 2017
Liabilities | | Amt (Rs.) | Assets | Amt (Rs.) |
Creditors | | 2,00,000 | Bank | 80,000 |
Bills Payable | | 1,20,000 | Debtors | 1,20,000 |
General Reserve | | 80,000 | Building | 4,00,000 |
Capital A/cs | | | Machinery | 2,00,000 |
Ram | 4,00,000 | | Investment | 80,000 |
Laxman | 2,00,000 | 6,00,000 | Patents | 40,000 |
| | | Furniture | 40,000 |
| | | Goodwill | 40,000 |
| | 10,00,000 | | 10,00,000 |
Adjustments (i) Bharat comes for l/5th share and brings capital 2,00,000 and premium 40,000 out of Rs. 60,000. (ii) New ratio 2 : 2 : 1. (iii) Rs. 20,000 included in creditors are not likely to be paid. (iv) Patents are valueless. (v) 10% provision for doubtful debts on debtors out of general reserve. (vi) Capitals of Ram and Laxman be adjusted in new ratio and difference to be adjusted in cash. Prepare revaluation account, partners' capital account, bank account and balance sheet. Or Following is the balance sheet of R Q, and R as at 30th September, 2017: Balance Sheet as at 30th September, 2017
Liabilities | | Amt (Rs.) | Assets | | Amt (Rs.) |
Sundry Creditors | | 70,000 | Land and Building | | 5,50,000 |
P's Brother's Loan | | 40,000 | Patents | | 10,000 |
Employee's Provident Fund | | 20,000 | Debtors | 1,20,000 | |
Reserve Fund | | 60,000 | (-) Provision | (6,000) | 1,14,000 |
P's Capital A/c | 3,00,000 | | Sundry Assets | | 40,000 |
Q's Capital A/c | 2,50,000 | | Bank | | 48,000 |
R's Capital A/c | 50,000 | 6,00,000 | Cash | | 8,000 |
P's Current A/c | 40,000 | | R?s Current A/c | | 70,000 |
Q's Current A/c | 10,000 | 50,000 | | | |
| | 8,40,000 | | | 8,40,000 |
They decided to dissolve the firm. The following information is given to you:
(i) Land and building were sold for Rs. 5,00,000. |
(ii) Debtors for Rs. 20,000 proved bad and rest paid the amount due at 5% discount. |
(iii) An unrecorded investment of Rs. 20,000 was taken over by a creditor at Rs. 16,000. |
Remaining creditors were paid at 10% discount. |
(iv) There was an outstanding bill for repairs for which Rs. 10,000 were paid. |
(v) P's brother's loan was paid together with interest of Rs. 4,000. |
(vi) Q is to take over some of sundry assets at Rs. 13,500 (being 10% less than book value). |
(vii) R is to take over the remaining sundry assets at 80% of the book value less Rs. 500 as discount. |
Prepare necessary accounts.
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The cash provided from operations was Rs. 23,000. The net increase in cash was Rs. 22,000. If the net cash inflow from financing activities was Rs. 15,000, then calculate the net cash flow from investing activities?
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What type of an activity is goodwill purchased?
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Following are the balance sheets of Riyansh Ltd as at 31st March, 2016 and 2017. The motto of Riyansh Ltd is to provide vocational training to the girls belonging to the backward areas of the city. From the following balance sheet, prepare common size balance sheet of Riyansh Ltd for 2016 and 2017 and also identify the value that the company wishes to communicate to the society. Balance Sheet as at 31st March, 2016 and 2017
| Particulars | 31st March, 2016 Amt (Rs.) | 31st March, 2017 Amt (Rs.) |
I. | I. EQUITY AND LIABILITIES | | |
| 1 Shareholders' Funds | | |
| (a) Share Capital | 5,48,000 | 5,48,000 |
| (b) Reserves and Surplus | 3,04,000 | 1,40,000 |
| 2. Non-current Liabilities | | |
| Long-term Borrowings: Secured Loans | 2,00,000 | 4,64,000 |
| Unsecured Loans | 11,92,000 | 4,12,000 |
| 3. Current Liabilities | | |
| (a) Short-term Borrowings | 2,50,000 | 1,00,000 |
| (b) Trade Payables | 2,00,000 | 40,000 |
| (c) Other Current Liabilities | 1,00,000 | 6,000 |
| (d) Short-term Provisions | 46,000 | 10,000 |
| Total | 28,40,000 | 17,20,000 |
II. | ASSETS | | |
| 1. Non-current Assets | | |
| (a) Fixed Assets (Tangible) (Net) | 11,36,000 | 8,60,000 |
| (b) Non-current Investments | 12,000 | 8,000 |
| 2. Current Assets | | |
| (a) Inventories | 8,52,000 | 4,32,000 |
| (b) Trade Receivables | 6,60,000 | 2,80,000 |
| (c) Cash and Cash Equivalents | 1,80,000 | 1,40,000 |
| Total | 28,40,000 | 17,20,000 |
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Under which head and sub-head will the following items appear in the balance sheet of a company :
(i) Computer software under development. |
(ii) Unclaimed dividends |
(iii) Provision for tax |
(iv) Discount/Loss on issue of debentures (long-term). |
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From the following balance sheet, calculate the given ratios.
(i) Debt equity ratio |
(ii) Proprietary ratio |
(iii) Total assets to debt ratio |
Balance Sheet as at 31st March, 2017
| Particulars | 31st March, 2017 Amt (Rs.) |
I. | EQUITY AND LIABILITIES | |
| 1. Shareholders' Funds | |
| (a) Equity Share Capital | 45,00,000 |
| (b) Reserves and Surplus | 9,00,000 |
| 2. Non-current Liabilities | |
| Long-term Borrowings | 27,00,000 |
| 3. Current Liabilities | |
| (a) Short-term Borrowings | 6,00,000 |
| (b) Trade Payables | 33,00,000 |
| Total | 1,20,00,000 |
II. | ASSETS | |
| 1. Non-current Assets | |
| (a) Fixed Assets: Tangible Assets | 49,50,000 |
| (b) Long-term Investments | 4,80,000 |
| 2 Current Assets | |
| (a) Inventories | 27,30,000 |
| (b) Trade Receivables | 37,20,000 |
| (c) Cash and Cash Equivalents | 1,20,000 |
| Total | 1,20,00,000 |
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The summarised balance sheet of RK Ltd as at 31st March, 2016 and 2017 were as under: 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 | | 2,25,000 | 2,25,000 |
| (b) Reserves and Surplus | 1 | 1,78,000 | 1,89,000 |
| 2. Non-current Liabilities | | | |
| Mortgage Loan | | - | 1,35,000 |
| 3. Current Liabilities | | | |
| (a) Trade Payables | | 84,000 | 67,000 |
| (b) Short-term Provisions : Provision for Taxation | | 37,500 | 5,000 |
| Total | | 5,24,500 | 6,21,000 |
II. | ASSETS | | | |
| 1. Non-current Assets | | | |
| (a) Fixed Assets | | 2,00,000 | 1,60,000 |
| (b) Non-current Investments | | 25,000 | 30,000 |
| 2. Current Assets | | | |
| (a) Inventories | | 1,20,000 | 1,05,000 |
| (b) Trade Receivables | | 1,05,000 | 2,27,500 |
| (c) Cash and Cash Equivalents | | 74,500 | 98,500 |
| Total | | 5,24,500 | 6,21,000 |
Notes to Accounts
Particulars | 2016 Amt (Rs.) | 2017 Amt (Rs.) |
1. Reserves and Surplus | | |
General Reserve | 1,50,000 | 1,55,000 |
Statement of Profit and Loss | 28,000 | 34,000 |
| 1,78,000 | 1,89,000 |
2. Short Term Provisions | | |
Provision for Taxation | 37,500 | 5,000 |
Additional Information
(i) Investments costing Rs. 4,000 were sold during the year 2016-17 for Rs. 4,250. |
(ii) Provision for taxation made during the year was Rs. 4,500. |
(iii) During the year, part of the fixed assets costing Rs. 5,000 was sold for Rs. 6,000 and the profit was included in the statement of profit and loss. |
(iv) Dividend paid during the year amounted to Rs. 20,000. |
You are required to prepare the cash flow statement.
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