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Which account is to be debited to set aside funds for debenture redemption?

At the time of admission of a new partner, goodwill belongs to

From the following information obtained from the books of Kundan Ltd.,
Calculate the inventory turnover ratio for the years 2015-16 and 2016-17:

$\begin{array}{ccc}\text{Particulars}& 2015-16& 2016-17\\ & \left(Rs\right)& \left(Rs\right)\\ \text{Inventory on 31st March}& 7,00,000& 17,00,000\\ \text{Revenue from operations}& 50,00,000& 75,00,000\end{array}$

(Gross profit is 25% on cost of revenue from operations)

In the year 2015-16, inventory increased by Rs 2,00,000.

Future value is equal to _____________________.

What account is credited for recording interest on capital in the books of the firm?

A company is a __________ liability entity.

Where we show entrance fees in the Balance Sheet?

Raj and Neeraj are partners in a firm. Their capitals as on April 01, 2005 were Rs 2,50,000 and Rs 1,50,000, respectively. They share profits equally. On July 01, 2005, they decided that their capitals should be Rs 1,00,000 each. The necessary adjustment in the capitals were made by introducing or withdrawing cash by the partner's. Interest on capital is allowed 8% pa. Compute interest on capital for both the partners for the year ending on March 31, 2006.

Jagdeep Singh's Cash book on 31st March, 2012 showed an over draft balance of Rs 12,100 on his No. 1 Account at the bank. On investigation it is found that:

(a) Cheque drawn amounting to Rs 4,200 had not been presented to the bank for payment.

(b) Cheque Rs 3,600 entered in the Cash Book and paid into the bank had not been credited by the bank.

(c) The receipts side of the Cash Book had been under cast by Rs 1,000.

(d) Bank charges on' 50 entered on the bank statement had not been entered in the Cash Book.

(e) A cheque for Rs 5,200 drawn on the Account No.1 had been charged by the bank in error to the Account No.2.

(f) A dividend of Rs 300 paid direct to the bank had not been entered in the Cash Book.

(g) A cheque for Rs 700 received from a debtor paid into the bank dishonoured and shown as such by the Bank but no entry of dis honour had been made in the Cash Book.

(h) A cheque of Rs 420, drawn by Bank’s another customer of the same name, had been charged to Jagdeep bank account by error.

You are required:

(i) To show the necessary adjustments to be made in the Cash Book; and

(ii) To prepare a Bank Reconciliation Statement for No.1 Account as at 31st March, 2012.

$\begin{array}{ccc}& & \\ \text{Jan.}1& \text{Cash in Hand}& 4,000\\ & \text{Cash at Bank}& 12,000\\ \text{Jan.}4& \text{Sold goods for cash}& 13,200\\ \text{Jan.}5& \text{Received from Suresh}& 2,500\\ \text{Jan.}6& \text{Received a Cheque from Ravi and deposited it into Bank.}& 6,400\\ \text{Jan.}7& \text{Salary paid to office staff by Cheque}& 7,600\\ \text{Jan.}10& \text{Paid Sudhir by Cheque}& 5,000\\ \text{Jan.}12& \text{Cash Purchases}& 8,000\\ \text{Jan.}16& \text{Cash deposited into Bank}& 10,000\\ \text{Jan.}20& \text{Cash Sales}& 15,100\\ & \text{Purchased Machinery and payment made by Cash}& 6,800\\ \text{Jan.}21& \text{Paid wages for erection of above Machinery}& 400\\ \text{Jan.}22& \text{Withdrew from Bank for office use}& 7,500\\ \text{Jan.}23& \text{Received a Cheque from Anil and deposited it into Bank}& 4,600\\ \text{Jan.}27& \text{Anil's Cheque returned by bank dishonoured}& 4,600\\ \text{Jan.}31& \text{Paid into Bank}& 12,000\end{array}$

Following are the Balance Sheets of Krish Tech Ltd. for the year ended 31st March, 2012 and 2013 (Revised).
$\begin{array}{ccccc}\text{Particulars}& & \text{Note}& \text{Amount (Rs)}& \text{Amount (Rs)}\\ & & \text{No.}& 2012-13& 2011-12\\ \text{1. Equity and Liabilities}& & & & \\ \text{(1) Shareholders' Funds}& & & & \\ \text{(a) Share Capital}& & & 12,00,000& 8,00,000\\ \text{(b) Reserves and Surplus (Profit}\&\text{Loss Balance)}& & & 3,50,000& 4,00,000\\ \text{(2) Non-current liabilities}& & & & \\ \text{Long term borrowings}& & & 4,40,000& 3,50,000\\ \text{(3) Current liability : Trade Payables}& & & 60,000& 50,000\\ & \text{Total}& & 20,50,000& 16,00,000\\ \text{II. Assets}& & & & \\ \text{(1) Non-current Assets}& & & & \\ \text{(a) Fixed Assets}& & & & \\ \text{(i) Tangible Assets}& & & 12,00,000& 9,00,000\\ \text{(2) Current Assets}& & & & \\ \text{(a) Inventories}& & & 2,00,000& 1,00,000\\ \text{(b) Trade Receivables}& & & 3,10,000& 2,30,000\\ \text{(c) Cash and cash equivalents}& & & 3,40,000& 3,70,000\\ & \text{Total}& & 20,50,000& 16,00,000\end{array}$

Prepare a Cash Flow Statement after taking into account the following adjustments.

(a) The company paid interest Rs 36,000 on its long-term borrowing.

(b) Depreciation charged on tangible fixed assets was Rs 1,20,000.

If the date of withdrawal is not given, then the interest on drawings is calculated for an average period of ___

A company is ___________ person created by law.

Which of the following method calculates the value of goodwill by capitalising the super profit on the basis of normal rate of return?

Which of the following is not an operating cash flow?

Banks took a lot of the mortgages, grouped them together and create securities. What are these securities called?

How would you disclose the following items in the Balance Sheet of a Company :

(i) Share Issue Expenses (to be written off in next 12 months)

(ii) Share Issue Expenses (to be written off after 12 months)

(iii) Premium on Redemption of Debentures

(iv) Debit balance of Statement of Profit and Loss

(v) Loan from Bank

(vi) Loan repayable on demand

(vii) Shares in S.B.I.

(viii) Investments

(ix) Interest Accrued on Investments

(x) Guarantees given by the Company

Om, Ram and Shanti were partners in firm sharing profits in the ratio of 3:2:1. On 1st April, 2014 their Balance sheet are as follows:

$\begin{array}{ccccc}\text{Liabilities}& & \text{Amount}& \text{Assets}& \text{Amount}\\ & & \text{(Rs)}& & \text{(Rs)}\\ \text{Capital Accounts :}& & & \text{Land and building}& 3,64,000\\ \text{Om}& 3,58,000& & \text{Plane and Machiery}& 2,95,000\\ \text{Ram}& 3,00,000& & \text{Furniture}& 2,33,000\\ \text{Shanti}& 2,62,000& 9,20,000& \text{Bills Receivable}& 38,000\\ \text{General Reserve}& & 48,000& \text{Sundry Debtors}& 90,000\\ \text{Creditors}& & 1,60,000& \text{Stock}& 1,11,000\\ \text{Bills Payable}& & \underset{–}{90,000}& \text{Bank}& \underset{–}{87,000}\\ & & 12,18,000& & 12,18,000\end{array}$

On the above date, Hanuman was admitted on the following terms:

(i) He will bring Rs 1,00,000 for his capital and will get 1/10th share in the profits.

(ii) He will bring necessary amount in cash for his good will premium. The goodwill of the firm was valued at Rs 3,00,000.

(iii) A liability of Rs 18,000 will be created against Bill Receivable discountd.

(iv) The value of stock and furniture will be reduced by 20%.

(v) The value of land and buildings will be increased by 10%.

(vi) Capital accounts of the partners will be adjusted on the basis of Hanuman's capital in their profit sharing ratio by opening curent accounts. Prepare Revaluation Account and Partner's Capital Accounts.

OR

Xavier, Yusuf and Zaman were parners in a firm sharing profits in the ratio of 4:3:2. On 1-4-2014, their Balance Sheet was as follows:

$\begin{array}{cccccc}\text{Liabilities}& & \text{Amount}& \text{Assets}& & \text{Amout}\\ & & \text{(Rs)}& & & \text{(Rs)}\\ \text{Sundry Creditors}& & 41,400& \text{Cash at Bank}& & 33,000\\ \text{Capital Accounts:}& & & \text{Sundry Debtors}& 30,450& \\ \text{Xavier}& 1,20,000& & \text{Less : Provision for Bad}& & \\ \text{Yusuf}& 90,000& & \text{Debts}& \underset{–}{1050}& 29,400\\ \text{Zaman}& \underset{–}{60,000}& 2,70,000& \text{Stock}& & 48,000\\ & & & \text{Plant and Machinery}& & 51,000\\ & & & \text{Land and Building}& & \underset{–}{1,50,000}\\ & & \overline{3,11,400}& & & 3,11,000\end{array}$

Yusuf had been suffering from ill health and thus gave notice of retirement from the firm, An agreement was, therefore, entered into as on 1-4-2014, the terms of which were as follows.

(i) That land and building be appreciated by 10%.

(ii) That provision for bad debts in no longer necessary.

(iii) That stock be appreciated by 20%

(iv) That good will of the firm be fixed, at Rs 54,000. Yusuf's share of the same is adjustes from Xavier's and Zaman's capital accounts, who are going to share future profits in the ratio of 2:1.

(v) The entire capital of the newly constituted firm be redjusted by bringing in or paying necessary cash so that future capital of Xavier and Zaman will be in their profit sharing ratio. Prepare Revaluation Account and Partner's Capital Accounts.

The 4th column in the comparative statement is ___

The following was the balance sheet of Arun, Bablu and Chetan sharing profits and losses in the ratio of $\frac{6}{14}:\frac{5}{14}:\frac{3}{14}$ respectively.

$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amt. (Rs)}& \text{Assets}& \text{Amt. (Rs)}\\ \text{Creditors}& 9,000& \text{Land and Building}& 24,000\\ \text{Bills Payable}& 3,000& \text{Furniture}& 3,500\\ \text{Capital Accounts}& & \text{Stock}& 14,000\\ \text{Arun}19,000& & \text{Debtors}& 12,600\\ \text{Bablu}16,000& & \text{Cash}& 900\\ \text{Chetan}\underset{–}{8,000}& 43,000& & \\ & \overline{\underset{–}{\underset{–}{55,000}}}& & \overline{\underset{–}{\underset{–}{55,000}}}\end{array}$

They agreed to take Deepak into partnership and give him a share of $\frac{1}{8}$ on the following terms

(a) that Deepak should bring in Rs.4,200 as goodwill and Rs. 7,000 as his capital;

(b) that furniture be depreciated by 12% ;

(c) that stock be depreciated by 10%;

(d) that a reserve of 5% be created for doubtful debts;

(e) that the value of land and buildings having apprec iated be brought upto Rs. 31,000 ;

(f) that after making the adjustments, the Capital accounts of the old partners (who continue to share in the same proportion as before) be adjusted on the basis of the proportion of Deepak's capital to his share in the business i.e., actual cash to be paid off to or brought in by the old partners as the case may be.

Prepare cash account, profit and loss adjustment account. (revaluation account) and the opening balance sheet of the new firm.

In general, interest on capital is ___________

The house kept with the bank as mortgage acts as a security for the loan. Hence, it is ___________ to the bank

After admission what two rights does the partner gets?

State the need for treatment of goodwill on admission of a partner.

Amar and Akbar are equal partners in a firm. They admitted Anthony as a new partner and the new profit sharing ratio is 4 : 3 : 2. Anthony could not bring his share of goodwill Rs. 45,000 in cash. It is decided to do the adjustment for goodwill without opening Goodwill account. Pass the necessary journal entry for the treatment of goodwill.

Collection from debtors are _________ under cash flow from operating activities in indirect method.

Sukesh and Vanita were partners in a firm. Their partnership agreement provides that

(i) Profits would be shared by Sukesh and Vanita in the ratio of 3 : 2;

(ii) 5% interest is to be allowed on capital ;

(iii) Vanita should be paid a monthly salary of Rs 600.

The following balances are extracted from the books of the firm, on December 31, 2006.

$\begin{array}{ccc}\text{Items}& \text{Sukesh (Rs)}& \text{Vanita (Rs)}\\ \text{Capital Accounts}& 40,000& 40,000\\ \text{Current Accounts}& \text{(Cr)7,200}& \text{(Cr)2,800}\\ \text{Drawings}& 10,850& 8,150\end{array}$

Net Profit for the year, before charging interest on capital and after charging partner's salary was Rs 9,500. Prepare the profit and loss appropriation account and the partner's current accounts.

The ___________ number of shares that can be issued in a single issue is the issued capital.

When the firm has agreed to pay the partner a fixed amount for realisation work irrespective of the actual amount spent, such fixed amount is credited to ___________.

What is meant by capital structure?

Sharma, Verma and Neetu were partners sharing profits and losses in proportion of $\frac{1}{4},\frac{1}{8}$ and $\frac{10}{16}.$ Calculate the new profit sharing ratio between continuing partners if,

(a) Sharma retires, (b) Verma retires, (c) Neetu retires. Also calculate their gaining ratio in each of the above situation.

Trade payables to be settled beyond 12 months from the date of balance sheet or beyond the operating cycle are classified under _____

Non-current investments are shown under ___

From the following information, prepare Comparative Balance Sheets of X Ltd.:

$\begin{array}{ccc}\text{Particulars}& \mathrm{31.03.2017}& \mathrm{31.03.2016}\\ & \text{Rs.}& \text{Rs.}\\ \text{Reserve and Surplus}& 12,00,000& 6,00,000\\ \text{Share Capital}& 10,00,000& 10,00,000\\ \text{Trade Payables}& 12,70,000& 9,00,000\\ \text{Land and Buildings}& 16,00,000& 15,00,000\\ \text{Plant and Machinery}& 6,30,000& \text{5,00,000}\\ \text{Goodwill}& -& 1,00,000\\ \text{Investments}& 1,20,000& 1,00,000\\ \text{Current Assets}& 15,20,000& \text{8,00,000}\\ \text{Long term Borrowings}& 4,00,000& 5,00,000\end{array}$

Calculate the amount of Opening Trade Receivables and Closing Trade Receivables from the following figures :

Trade Receivables Turnover Ratio 4 times

Cost of Revenue from Operations (Cost of Goods Sold) Rs. 6,40,000

Gross Profit Ratio 20%

Closing Trade Receivables were Rs. 20,000 more than at the beginning.

Cash Revenue from Operations being 33 $\frac{1}{3}$% of Credit Revenue from Operations.

Assuming that Proprietary Ratio is 0.6 : 1, state giving reasons, whether the ratio will increase, decrease or will not change in each one of the following cases:

(i) Issue of new equity shares for cash.

(ii) Issue of equity shares against purchase of machinery.

(iii) Issue of debentures against purchase of machiney.

(iv) Redemption of debentures for cash.

(v) Conversion of debentures into preference shares.

(vi) Buy-back of its own shares by a company.

(vii) Purchase of a fixed asset for cash.

(viii) Purchase of a fixed asset on long-term deferred payment basis.

(ix) Sale of a fixed asset costing Rs. 1,00,000 for Rs. 80,000.

(x) Sale of a fixed asset costing Rs. 2,00,000 for Rs. 2,50,000.

(xi) Issue of Bonus Shares.

Which of the following is the main objective/s of a financial statement?

Income and Expenditure Account records ___

The accumulated profits are called by a special term called by?

Q22. Consider the following statements about Liquidity Adjustment Facility:

1. This arrangement allows banks to respond to liquidity pressures.

2. LAF includes only reverse repo agreements.

Which of the above statements are correct?

XYZ Ltd has issued 20,000 debentures at Rs.100 each per debenture for a four-year term. But the public has only subscribed to 18,000 debentures. Rs.30 is collected at application stage and Rs.70 upon allotment. At allotment stage, the Bank A/c is debited with what amount?

The amount of provision provided for a settlement beyond 12 months from balance sheet date are shown under _______

Amit, Sumit, and Punit share profit and losses in the ratio of 2:3:1, respectively. Amit retires and the remaining partners decide to take Amit’s share equally. Calculate the gaining ratio.

X Ltd. was in the business of manufacturing plastic bags. The company decided to manufacture low cost jute bags instead of plastic bags. Following are the Balance Sheets of X Ltd. as at 31st March, 2017 and 2016. * As per Revised Format, Balance Sheet of current year will be given first.

You are require to :

(a) Prepare a Comparative Balance Sheet,

and

(b) Identify any two values which the Company wants to communicate to the society.

$\begin{array}{cccc}\text{Particulars}& \text{Note No}& \mathrm{31.03.2017}\ast & \mathrm{31.03.2016}\\ \text{I. EQUITY AND LIABILITIES:}& & \text{Rs.}& \text{Rs.}\\ \text{1. Shareholder's Funds:}& & & \\ \text{(a) Share Capital}& & 10,00,000& 5,00,000\\ \text{(b) Reserves and Surplus}& & 2,00,000& 3,00,000\\ \text{2. Non-Current Liabilities}& & & \\ \text{3. Long-term Borrowings}& & 8,00,000& 5,00,000\\ \text{4. Current Liabilities}& & & \\ \text{Trade Payables}& & 4,00,000& 2,00,000\\ \text{TOTAL}& & \overline{\underset{–}{\underset{–}{24,00,000}}}& \overline{\underset{–}{\underset{–}{15,00,000}}}\\ \text{II. ASSETS}:& & & \\ \text{1. Non Current Assets}& & & \\ \text{a. Fixed Assets:}& & & \\ \text{(i) Tangible Assets}& & 14,00,000& 8,00,000\\ \text{(ii) Intangible Assets}& & 3,00,000& 2,00,000\\ \text{2. Current Assets}& & & \\ \text{(a) Inventories}& & 5,00,000& 4,00,000\\ \text{(b) Cash and Cash Equivalents}& & 2,00,000& 1,00,000\\ \text{TOTAL}& & \overline{\underset{–}{\underset{–}{24,00,000}}}& \overline{\underset{–}{\underset{–}{15,00,000}}}\end{array}$

Compute Stock Turnover Ratio from the following information:

$\begin{array}{cc}\text{Items}& \text{Rs.}\\ \text{Net Sales}& \text{2,00,000}\\ \text{Gross Profit}& \text{50,000}\\ \text{Closing Stock}& \text{60,000}\\ \text{Excess of Closing Stock over Opening Stock}& \text{20,000}\end{array}$

The debentures can be redeemed ______.

A, B and C are partners sharing profits in the ratio of 1 : 2 : 3. C retires and his capital, after making adjustments for reserves and profit on revaluation stands at Rs 1,20,000. A and B agreed to pay him Rs 1,50,000 in full settlement of his claim. Record necessary journal entry for the treatment of goodwill if the new profit sharing ratio is decided at 1 : 3.

How does the preparation of Cash Flow Statement help in efficient cash management?

Narang, Suri and Bajaj are partners in a firm sharing profits and losses in proportion of 12,16 and 13 respectively. The Balance Sheet on April 1, 2007 was as follows

Balance SheetDr as on March 31, 2007 CrCapital and LiabilitiesAmt.(Rs)AssetsAmt.(Rs)Bills Payable12,000Freehold Premises40,000Sundry Creditors18,000Machinery30,000Reserves12,000Furniture12,000Capital Account12,000Stock22,000Narang30,000Sundry Debtors20,000Suri30,000(-)Reserve for Bad(1,000)––––––––19,000Bajaj28,000––––––––88,000DebtCash7,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯1,30,000––––––––––––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯1,30,000––––––––––––––––––––

Bajaj retires from the business and the partners agree to the following

(a) Freehold premises and stock are to be appreciated by 20% and 15% respectively.

(b) Machinery and furniture are to be depreciated by 10% and 7% respectively.

(c) Bad Debts reserve is to be increased to Rs.1,500.

(d) Goodwill is valued at Rs. 21,000 on Bajaj's retirement.

(e) The continuing partners have decided to adjust their capitals in their new profit sharing ratio after retirement of Bajaj, Surplus/deficit, if any, in their capital accounts will be adjusted through current accounts.

Prepare necessary ledger accounts and draw the Balance Sheet of the reconstituted firm.

The balance amount of debt after exclusion of sinking fund and other assets meant for repayment of loans is called