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1301.

On dissolution, Goodwill Account is transferred to

Answer»

In the CAPITAL ACCOUNTS of Partners
On the Credit of Cash Account
On the Debit of REALISATION Account
On the Credit of Realisation Account

Solution :On the Debit of Realisation Account
Discussion
1302.

On dissolution, Goodwell accountis transferred to ):

Answer»

In theCapital ACCOUNTS of partners
On THECREDIT of CASH Account
On thedebitof RealisationAccount
On thecreditof RealisationAccount

Answer :C
Discussion
1303.

On April 1, 2018, a firm had assets of .Rs 1, 00, 000 excluding stock of .Rs 20,000 . The current liabilities were .Rs 10,000 and the balance constituted Partners' Capital Acconts . If the normal rate of return is 8% , the Goodwill of the firm is valued at .Rs60, 000 at four years purchase of super profits. Find the actual profits of the firm.

Answer»

Solution :`" GOODWILL "= "SUPER PROFITS" xx "year's purchase "`
`60,000 =" Super Profits " xx 4`
` "Super Profits " = (60,000)/4 = .Rs 15,000`
` " Capital Employed " = " Total ASSETS " - "CurrentLiabilities " `
` = 1,10,000 xx 8/100 = ."RS "8,800`
`" Super Profits " = " Average Profits" -" Normal Profits " `
`" HENCE , Average Profits " = " Super Profits " - " Normal Profits " `
` = ." Rs"15,000 + " Rs". 8,000 = ."Rs" 23, 800`
Discussion
1304.

On April 1,2018 the Directors of Ashoka Methals Ltd., issued 60,000 equity shares of Rs. 10 each at Rs. 12 per share, the amount payable as Rs. 5 on application (including premium), Rs. 4 on allotment and the balance on July 15, 2018. On April 10, 2018 applications were received for 80,000 shares. Of the cash received in excess, Rs. 40,000 were returned and Rs. 60,000 were applied towards the amount due on allotment. The balance of allotment money was received on April 30, 2018. All the shareholders paid the call due on July 15,2018, with the exception of one shareholder holding 500 shares. These shares were forfeited on August 31, 2018. You are require to submit Journal Entries regarding the above transactions and also prepare the Balance Sheet of the Company on August 31, 2018.

Answer»

Solution :Balance at BANK RS. 7,18,500, Balance of SHARE Forfeiture A/c Rs. 3,500, Share CAPITAL A/c Rs. 5,98,500. B/S total Rs. 7,18,500.
Hint : Applicants for 8,000 shares were not allotted any shares and the applicants for 72,000 shares were allotted 60,000 shares.
`{:("Share Application A/cDr.4,00,000",),("To Share Capital A/c","1,80,000"),("To Securities PREMIUM Reserve A/c","1,20,000"),("To Share Allotment A/c","60,000"),("To Bank A/c","40,000"):}`
Discussion
1305.

On 31st March,2019Capital AccountsofE,M and A aftermaking adjustments forprofitsdrawings ,etc wereasE- Rs. 8,00,000 ,M-Rs. 6,00,000, Subsequaentlyit wasnoticedthatintereston capitalandinterestondrawingss hadbeenomittedpartnerswereentitledto interestin capital@ 5%p. a Drawingsduringthe yearwere ::E-Rs. 2,00,00 ,M-Rs.1,50,000 andA- Rs. 90,000 itnereston Drawingschargeableto thepartners were E-Rs. 5,000 , M- Rs. 1,50,000 M-Rs. 3,600And A -RS. 2,000Net Profit during the yearyear was Rs. 12,00,000Profit- sharing ratioof theparatherswas 3:2:1 pass necessary adjustment entry for rectifiy th aboveomissionshowyour Workings .

Answer»

Solution :
WORKING NOTES : 1. interestis allowed on peningcapitalthereforecapitalsof thepartners in thebeginningof THEYEAR i.e., 1ST April, 2018 are calculated as FOLLOW :


Discussion
1306.

On 31st March,2019afterthe closingof theaccounts, capitalAccountsOfP ,Q and Rstoodinthe booksof thefirmatRs. 40,000 Rs. 30,000and Rs. 20,000 respectivelySubsequentlyit wasnoticedthat intereston capital@5%had beenomittedprofitfor theyearended31st March, 2019 was Rs. 60,000 and thepartnersdrawingshad beenP-Rs. 10,000 Q- Rs. 7,500and R-Rs. 4,500, profit-sharingratio of P ,Q and R is3:2:1 Givenecessary adjustmententry .

Answer»


SOLUTION :Openingcapital:p-Rs. 20,000,Q-Rs. 17,500 ,R-Rs, 14,500.
Discussion
1307.

On 31st March, 2017, the Balance Sheet of Abhir Divay, who were sharing profits in the ratio of 3 : 1 was as follows: They decided to admit Vibhor on 1st April, 2017 for 1/5th share. (a) Vibhor shall bring RS.80,000 as his share of goodwill premium. (b) Stock was overvalued by RS.20,000. (c) A debtor whose dues RS.5,000 were written off as bad debts, paid RS.4,000 in full settement. (d) Two month's salary @ RS.6,000 per month was outstanding. (e) Vibhor was to bring in Capital to the extent of 1/5th of the total capital of the new firm. Prepare Revaluation Account Partners' Capital Accounts and the Balance Sheet of the reconstituted firm.

Answer»

Solution :LOSS on Revaluation-RS.28,000, Partners' CAPITAL A/cs: Abhir-RS.7,59,000: Diavy-RS.4,53,000 and Vibhor-RS.3,03,000: BALANCE Sheet Total-RS.18,47,000.
Discussion
1308.

On 31st March, 2015, the Balance Sheet of Saman, Harish and Meeta who were sharing profits and losses in the ratio 2:3:2, stood as follows, On 31st March, 2015, Harish retired from the firm and the remaining partners decided to carry on the business. It was agreed to revalue the assets and liabilities as follows: (i) Land and buildings be appreciated by 20% (ii) Machinery be depreciated by 20%. (iii) Closing stock be valued at Rs 4,50,000. (iv) Procision for Doubtful Debts be made at 5% on Debtors. (v) Sundry creditors of Rs 65,000 be written off. (vi) Goodwill of the firm be valued at Rs 5,60,000 and Harish's share of the goodwill be adjusted in the accounts of Saman and Meeta who will share the future profits and losses in the ratio of 3:2. (vii) The total capial of the newly constituted firm will be Rs 35,00,000, which will be adjusted by opening Current Accounts. (viii) Amount due to Harish was settled by accepting a bill of exchange in his favour payable after 4 months. Prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of the new firm of Harish's retirement.

Answer»

SOLUTION :Harish's Share of Goodwill =Rs 2,40,000 (i.e., Rs `5,60,000xx3//7`) is contributed by SUMAN and Meeta in their gaining ratio, i.e., `11:4.` Thus, Saman's contribution-Rs 1,76,000 and meeta's contribution-Rs 64,000.
Gain (Profit) on Revaluation-Rs 2,60,000, Partners' Capital Accounts: Saman- Rs 21,00,000 and Meeta-Rs 14,00,000. ACCOUNT payable to Haris(Bills Payable)-Rs 22,11,428.
Saman's Current Account (Dr. Balance): Rs 9,61,714,
Meeta's Current Account (Dr.Balance): Rs 1,49,714, Balance SHEET Total-Rs 61,56,428.
Discussion
1309.

On31st March, 2014thebalances In thecapitalAccountsof sarojMahinderandumaraftermakingadjustmentfor profitanddrawingsetc, wereRs. 80,000Rs. 60,000and Rs. 40,000respectivelysubsequentlyiteas discoveredthatthe intereston capitalanddrawingshas beenomitted . (a)the profitfor theintereston capitalanddrawinghas beenomiited (b) During the yearsaroj andmahindereachand withdrewa sumof Rs, 24,000in equalinstalmeant in theendof eachmonthand umarwithdrew Rs. 36,000 ( C)the intereston drawing wasto becharged@5%p.aintereston capitalwasto beallowed@10%p,a(d)theprofit- sharing ratioamongpartnerswas 4:3:1showing yourworkings clearlpassthe necessaryrectifyingentry .

Answer»


Answer :Dr. SAROJ 'scapital A/C -Rs. 2,350 and MAHINDER 's capital A/C -1,,300 CR ,UMAR 's capila A/C -Rs. 3,650
Discussion
1310.

On 31st March, 2014 the balances in the Capitals Accounts of Raman, Naman and Chaman after making adjustments of profits and drawings were Rs 1,60,000, Rs 1,20,000 and Rs 1,60,000 respectively. Subsequently, it was descovered that interest on capital and drawings had been omitted. (i) The profit of the year ended 31st March, 2014 was Rs 60,000. (ii) During the year Raman and Naman each withdrew a total sum of Rs 48,000 in equal instalment in the miffole of every month and Chaman withdrew a total sum of Rs 36,000 in equal instalents at the end of each month. (ii) The interest on drawing was to be charged @8% and interest on capital is to be allowed @10% p.a. (iv) The profit-sharing ratio among the partners was 1:2:1. Showing your working notes clearly, pass the necessary reactifying entry.

Answer»

Solution :

3. Interest on Drawings, Raman and NAMAN Rs `48,000xx8/100xx6/12=Rs1,920`each,
CHAMAN = Rs `36,000xx8/100xx11/24=Rs1,320.`
Discussion
1311.

On 31st March, 2014 , the balances in the Capital Accounts of Esha, Manav and Daman after making adjustments for profits and drawings were Rs 3,20,000, Rs 2,40,000 and Rs 1,60,000 respectively. Subsequently, it was discovered that the interest on capital and drawings has been omitted. (i) The profit for the year ended on 31st March, 2014 was Rs 90,000. (ii) During the year Esha and Manav each withdrew a sum of Rs 48,000 in equal instalments in the middle of every month and Daman withdrew Rs 60,000. (iii) The interest on drawings was to be charged @5% per annum and interest on capital was to be allowed @10% per annum. (iv) The profit-sharing ratio of the partners was 3:2:1. Showing your workings clearly, pass necessary recessary rectifying entry.

Answer»

Solution :
1. Calculation of interest on CAPITAL: For the calculation of interest on capital, Opening Capital has to be ascertained:

Total interest on Capital = Rs 32,300+ Rs 25,800 + Rs 20,500 = Rs 78,600.
2. Interest on Drawings: During the year, Esha and Manav each withdrew a sum of Rs 48,000 in equal instalments in the MIDDLE of EVERY month. We CALCULATE interest on Drawings for Average Periof, i.e., for 6 months. Thus, interest on Drawings of Esha and Manav = Rs `48,000xx6//12xx5//100`= Rs 1,200 for each.
Interest on Daman's Drawings = Rs `60,000xx5//100xx6^(**)//12=Rs1,500`
Total interest on Drawings = Rs 1,200 + Rs 1,200 + Rs 1,500= Rs 3,900.
Date of drawings is not given,so interest will be charged for 6 months.
Discussion
1312.

On 31stMarch, 2014 Balancesin thecapitalAccounts Of Eleen Monu AndAhmadaftermaking adjustments for profits anddrawingswere Rs. 1,60,000 Rs. 1,20,000 and Rs, 80,000 respectively . Subsequently,itwasDiscoveredthattheintereston capitalanddrawings had beenomitted . (i)Profit for theyear ended31stMarch,2014 wasRs. 40,000. (ii) Duringthe yearEleen MonuAndMonu Eachwithdrewa totalsumOfRs . 24,000in equalinstalmentsin thebeginingof eachmonth andahmadwithdrew a totalsumof Rs.48,000 in equalinstalments at theendmonths. (iii)theinterestondrawings wasto bechaged@ 5%p.aandintereston capitalwasto beallowed@ 10% p.a (iv)THeprofit- sharingratio among thepartners was 2:1:1. Showinngyourworking notesclearly , passthenecessary rectifying entry .

Answer»

Solution :
totalintereston capitalon capital=Rs. 16,400+rs. 13,400+Rs. 11,800=Rs, 41,600
2.intereston Drawings (for Eleen andMonu 6.5 Monthsandforahmad 5.5 MONTHS ):
Eleen =Rs. 24,000`XX(5)/(100)xx(13)/(24)=Rs. 650`
Monu `=RSL. 24,000xx(5)/(100)xx(13)/(24)=Rs. 650`
AHMAD =Rs.`48,000xx(5)/(100)xx(11)/(24)=Rs. 1,100`
total intereston Drrwings =`underline OVERLINE(Rs. 2,400)`
Discussion
1313.

On 1st January, 2011, a Public Limited Company issued 15,000, 10% Debentures of Rs. 100 each at per which were repayable at a premium of 15% on 31st December, 2015.On the date of maturity, the company decided to redeem the above mentioned 10% Debentures as per the terms of issue, out of prodits. Surplus, i.e., Balance in Statement of Profit and Loss shows a credit balance of Rs. 20,00,000 on this date. The offer was accepted by all the debentureholders and all the debentures were redeemed. Pass necessary Journal entries in the books of the Company only for the redemption of debentures.

Answer»

Solution :
NOTE: DEBENTURES are redeemed out of profit, therefore, DRR is CREATED for the full face value of debentures OUTSTANDING, i.e., Rs. 15,00,000.
Discussion
1314.

On 1st January, 2008, Uday and Kaushal entered into partnership with fixeed capitals of Rs 7,00,000 and Rs 3,00,000 respectively. They were doing good business and were interested in its expansion but could not be the same because of lack of capital. Therefore, to have more capital, they admitted Govind as a new partner on 1st January, 2010. Govind brough Rs 10,00,000 as capital and the new profit-sharing ratio decided was 3:2:5. On 1st january, 2012, another new partner Hair was admitted with a capital of Rs 8,00,000 for 1/10th share in the profits, which he acquired equally from Uday, Kaushal and Govind. On 1st April, 2014, Govind died and his share was taken over by Uday adn Hair equally. Calculate: (a) Sacrificing ratio of Uday and Kaushal on Govind's admission. (b) New profit-sharing ratio of Uday, Kaushal, Govind and Hari on Hari's admission. (c) New profit-sharing ratio of Uday, Kaushal and Hari on Govind's Death.

Answer»

Solution :(a) Calculation of sacificing Ratio of Uday and Kaushal on Govind's admission:
Uday's SACRIFICE (Old Share- New Share) `=1/2-3/10=2/10`
Kaushal's sacrifice (Old Share- New Share) `=1/2-2/10=3/10`
Thus, Sacrificing Ratio of Uday and Kaushal `=2/10:3/10=2:3.`
(B) Calculation of New Profit-sharing Ratio on Hari's admission:
Hari acquired `1/10xx1/3=1/10`th share equally from Uday, Kaushal and Govind.
Uday's New Share `=3/10-1/30=(9-1)/(30)=8/30`
Kaushal's New Share `=2/10-1/30=(6-1)/(30)=5/30`
Govind's New Share `=5/10-1/30=(15-1)/(30)=14/30`
Hari's Share `=1/30+1/30+1/30=3/30`
Thus, New Ratio of Uday, kaushal, Govind and Hari `=8:5:14:3.`
(c) New Profit-sharing Ratio of Uday. Kaushal and Hari on Govind's DEATH:
Govind's share was TAKEN over by Uday and Hari equally, i.e., `14/30xx1/2=7/30`
Uday's New Share `=8/30+7/30=15/30`
Hari's New Share `=3/30+7/30=10/30`
Thus, New Ratio of Uday, Kaushal and Hari `=15/30:5/30:10/30=3:1:2.`
Discussion
1315.

On 1st April, 2019 A , B and C were partners sharing profits and losses in the ratio of 5:3:2 respectively. On this date B retires. The new profit sharing ratio of A and C will be 3:2. Gaming ratio will be:

Answer»

`1:2`
`2:1`
`1:1`
`5:2`

ANSWER :A
Discussion
1316.

ON 1st April , 2018precious ,Noble andPerfect enteredinto parnership withcapiralsofRs. 60,000Rs. 50,000and Rs, 30,000respectively PerfectadvancedRs.10.000 as loanto thepartnershipon 1stoctober, 2018,theparnershipDeed Ontainedthe followingclauses : (i)Intereston capital@ 6%p.a . (ii)Intereston drawings @ 6%p.aEachDrew Rs. 4.000 at theendeachquartercommencingfrom31 th june , 2018 (iii)Workingpartners preciousandNoble to getsalry of Rs. 200 and Rs.300 per monthrespectivelyltbr. (iv) nterest on loanwasgivento perfect@ 6%p.a (v)Nobleis togetrentof Rs.2,000 permonth for useof hisbullidingby thefirmit is paidhim bychequeat theend ofeverymonth.(vi)Profits and losses areto besharedin theratioof 4:2:1 up toRs. 70,000and aboveRs. 70,000equally . Profitof thefirmfor theyearended31st March2019(before the aboveadjusment) wasRs. 1,35,000Preparea profitand Loss appropriationaccountandcapitalAccounts OfPArtnersifCapitalsare fixed .

Answer»

Solution :

Note :
1.if thefixedamountis withdrawn at THEENDOF eachquarterthe yearinterestwill becharged on thewholeamount for`4^(1/2)` monthsthusinterest N drawings to bechangedfromeach partnerwill be :
`("totalDreings "xx"Rate OFINTEREST ")/(100)xx(4^(1/2))/(12)=Rs. 16,00xx1/12xx6/10=Rs 360 `
2.Intereston loanfromperfectan rentpayabletoNoblearecharges againstprofit.
Discussion
1317.

On 1st April, 2017 Aradhana Ltd. was formed with an authorised capital of Rs. 90,00,000 divided into 90,00,000 shares of Rs. 100 each. The company invited applications for issuing 75,000 equity shares. The amount was payable as follows: {:("On application",,-,,"Rs. 20 per share,"),("On first and final call",,-,,"Rs. 50 per share,"),("On first and final call",,-,,"balance amount."):} The issue was fully subscribed and the compnay allotted shares to all the applicants. All money was received except thefirst and final call on 5,000 shares. Show the'Share Capital' in the Balance Sheet of the compnay as per Schedule III of the Companies Act, 2013 as at 31st at 31st March, 2018 and also show Note to Accounts.

Answer»

SOLUTION :
Discussion
1318.

On 1st April, 2015, J.K. Ltd. issued 8,000, 9% Debentures of Rs. 1,000 each at a discount of 6%, redeemable at a premium of 5% after three years. The company closes its books on 31st March every year. Interest on 9% Debentures is payable on 30th September and 31st March every year. The rate of tax deducted at source is 10%. Pass necessarry Journal entries for the issue of debentures and debenture interest for the year ended 31st March, 2016.

Answer»

SOLUTION :
Discussion
1319.

On 1st April, 2014, KK Ltd. Invited applications for issuing 5,000 10% debentures of Rs.1,000 each at a discount of 6%. These debentures were repayable at the end of 3rd year at a premium of 10%. Applications for 6,000 debentures were received and the debentures were allotted on pro-rata basis to all the applicants. Excess money received with applications was refunded. The directors decided to transfer the minimum amount to Debenture Redemption Reserve on 31.3.2016. On 1.4.2016, the company invested the necessary amount in 9% bank fixed deposit as per the provisions of the Companies Act, 2013. Tax was deducted at source by bank on interest @10% p.a. Pass the necessary journal entries for issue and redemption of debentures. Ignore entries relating to writing off loss on issue of debentures and interest paid on debentures.

Answer»

SOLUTION :
Discussion
1320.

Name the various segments of ITC limited.

Answer»

Solution :various segmetnsof ITC Limited are :
1. FMCG (FAST Moving CONSUMER goods ) -CIGARETTES and Others,
2. HOTELS 3. Agri Business, 4.Paperboards ,Paper and PACKAGING ,and 5.Others.
Discussion
1321.

On 1st April, 2014, a firm had assets of Rs 1,00,00 excluding stock of Rs 20,000. Partners' Capital Account showed a balance of Rs 60,000 The current liabilities were Rs 10,000 and the balance constituted the rreserve. If the normal rate of teturen is 8%, the' Goodwill' of the firm is valued at Rs 60,000 at four years of purchase of super profit, find average profit of the firm.

Answer»

SOLUTION :Goodwill = Super Profit `XX` No. of Years' Purchase
Rs 60,000= Super Profit `xx` 4
Super Profit = Rs 60,000/4 = Rs 15,000
NORMAL Profit = Capital Employed (Note) `xx` Normal RATE of Return/100
= Rs 1,10,000 `xx` 8/100= Rs 8,800
Super Profit = Average Profit - Normal Profit.
Rs 15,000= Average Profit - Rs 8,800
Average Profit = Rs 15,000 + Rs 8,800 = Rs 23,800.
Note: Capital Employed = Total ASSETS (Including stock) - Current Liabilities
= Rs 1,20,000- Rs 10,000 = Rs 1,10,000.
Capital Employed = Capital + Reserve = Rs 60,000 + Rs 50,000 = Rs 1,10,000.
Discussion
1322.

Name the term used when there is excess of expenditure over income in case of a Not-for-Profit Organisation.

Answer»

SOLUTION :DEFICIT, i.e., EXCESS of EXPENDITURE over INCOME.
Discussion
1323.

Name the three financial characteristics which are analysed by Financial Analysis.

Answer»

SOLUTION :PROFITABILITY, LIQUIDITY and SOLVENCY.
Discussion
1324.

On 1st April, 2014, KK Ltd. invited applications for issuing 5,000, 10% Debentures of Rs. 1,000 each at a discount of 6%. These debentures were repayable at the end of 3rd year at a premium of 10%. Applications for 6,000 debentures were received and the debentures were allotted on pro rata basis to all the applicants. Excess money received with applications was refunded. The directors decided to transfer the minimum amount to Debenture Redemption Reserve on 31st March, 2016. On 1st April, 2016, the company invested the necessary amount in 9% bank fixed deposit as per the provisions of the Companies Act, 2013. Tax was deducted at source by bank on interest @ 10% p.a. Pass the necessary entries for issue and redemption of debentures. Ignore entries relating to writing off loss on issue of debentures and interest paid on debentures.

Answer»

SOLUTION :

`{:(" * Combined entry can be passed with Interest:",,,,Rs.,,Rs.),("BANK A/c (Rs.7,50,000 +Rs. 60,750)",,...Dr.,,"8,10,750",,),("TDS Collected (Receivable) A/c",,...Dr.,,"6,750",,),("To Debentures Redemption INVESTMENT A/c",,,,,,"7,50,000"),("To Interest on Debentures Redemption Investment A/c",,,,,,"76,500"):}`
`{:("Note:",,Rs.),("Interest on Debentures Redemption Investment (Rs.7,50,000"xx"9/100)",,"67,500"),("Less: TDS Payable (Rs.67,500"xx"10/100)",," 6,750"),("Interest received after TDS",,BAR(ul(ul(60,750)))):}`
Discussion
1325.

Name the term used for showing excess of income over expenditure of Not-for-Profit Organisations.

Answer»


SOLUTION :N/a
Discussion
1326.

Name the term used for denoting "Excess of Income over Expenditure" in case of Not-for-Profit Organisation.

Answer»

SOLUTION :SURPLUS.
Discussion
1327.

On 1st April 2014, Gomti Ltd. Has 6,000, 8% debentures of Rs.100 each due for redemption at 5% premium in three equal annual instalments starting from March 31, 2016. The Company complied with the requirements with respect to Investment made in Government Securities on 30th April, 2015. Pass necessary journal entries and prepare ledger accounts.

Answer»

Solution :

Note : In case of REDEMPTION in instalments, investment is made for FIRST instalments and it remains INVESTED till the last instalment. In this question, the Company has made investment on 30th APRIL, 2015 which remains invested till the last instalment i.e. upto 31st MARCH, 2018.


Discussion
1328.

Name the sub-headings under which Non-current Assets is shown in a company's Balance Sheet.

Answer»

Solution :(a) Fixed Assets:
(i) TANGIBLE Assets(II) Intangible Assets
(iii) Capital Work-in-Progress(iv) Intangible Assets under Development
(B) Non-current INVESTMENTS(c ) DEFERRED Tax Assets (Net)
(d) Long-term Loans and Advances(e) Other Non-current Assets.
Discussion
1329.

Name the sub-headings under which Shareholders'. Funds is shown in a company's Balance Sheet.

Answer»

SOLUTION :Shareholders' FUNDS is shown as follows:
(a) Share CAPITAL
(b) RESERVES and Surplus
(c ) Money Received against Share WARRANTS.
Discussion
1330.

On 1st April, 2013, the following balances appeared in the books of Jeet Ltd.: {:("9% Debentures (Redeemable on 31st March, 2015)","","Rs. 30,00,000"),("Debenture Redemption Reserve","","Rs. 5,00,000"):} The Campany met the requirement of Companies Act, 2013 regarding Debenture Redemption Reserve and Debenture Redemption Investment and redeemed the debentures. Ignoring interest on investment pass necessary Journal entries for the above transactions in thebooks of the company.

Answer»

SOLUTION :Amount transferred to Debenture Redmption RESERVE = Rs. 2,50,000.
Debenture REDEMPTION Investment= Rs. 4,50,000.
Discussion
1331.

Name the ratio which shows the relationship between operating profit and Revenue from Operations (Net Sales).

Answer»

SOLUTION :OPERATING PROFIT RATIO.
Discussion
1332.

Name the ratios that show the liquidity of an enterprise.

Answer»

SOLUTION :CURRENT RATIO and LIQUID Ratio.
Discussion
1333.

Name the ratio which shows the relationship between opertingpofit and net sales.

Answer»
Discussion
1334.

On 1st April, 2013, the following balances appeared in the books of Blue and Green Ltd. : 12% Debentures (Redeemable on 31st August, 2015) Rs.20,00,000 Debenture Redemption Reserve Rs.2,00,000The company met the requirements of Companies Act, 2013 regarding Debenture Redemption Reserve and Debenture Redemption investments and redeemed the debentures. Ignoring interest on investments, pass necessary Journal entries for the above transactions in the books of company.

Answer»

SOLUTION :Amount TRANSFERRED to DRR Rs.3,00,000, DEBENTURE REDEMPTION Investment Rs.3,00,000, DRR transferred to General Reserve Rs.5,00,000.
Discussion
1335.

Name the ratios that indicate the liquidity of an enterprise

Answer»
Discussion
1336.

Name the major heads under which the following items will be presented in the Balance Sheet of a company as per Schedule III of the Companies Act, 2013: (i) Loose Tools. (ii) Unpaid Dividend. (iii) Copyrights and Patents. (iv) Land and Building.

Answer»

Solution :(i) Current ASSETS;
(ii) Current LIABILITIES;
(iii) Non-current Assets;
(IV) Non-current Assets.
Discussion
1337.

On 1st April, 2013, Rayon Ltd. Issued 20,000, 9% Debentures of Rs.100 each at a discount of 10%, redeemable at par on 31st March, 2017. The issue was fully subscribed. To meet the provisions of the Companies Act, 2013, the Board of Directors decided to transfer Rs.3,00,000 to Debenture Redemption Reserve on 31st March, 2014, and the balance on 31st March, 2015. On 1st April, 2016, the company made the required investment in government securities. The investments were encashed and the debentures were redeemed on the due date. It is the policy of the company to write off capital losses in the year in which they occur. You are required to pass journal entries for issue and redemption of debentures (ignore interest on debentures).

Answer»

SOLUTION :
Discussion
1338.

Name the major heads which appear In the Equity and Liabilities part of the BaIance Sheet.

Answer»


SOLUTION :N/a
Discussion
1339.

On 1st April 2013, Brij and Nandan entered into partnership to construct toilets in government girls schools is the remote areas of Uttarakhand. They contributed capital of Rs 10,00,000 and Rs 15,00,000 respectively. Their profit-sharing ratio was 2:3 and interest allowed on capital as provided in the Partnership Deed was 12% per annum. During the year ended 31st March, 2014, the firm erned a profit of Rs 2,00,000. Prepare Porfit and Loss Appropriation Account of Brij and Nandan for the year ended 31st March, 2014.

Answer»

Solution :
1. `{:("Working Notes:",Rs),("Interest on Brij's Capital" (Rs "10,00,000"xx12//100),"12,20,00"),("Interest on Nandan's Capital"("Rs15,00,000"xx12//100),"1,180,000"),("Total Interest", UNDERLINE underline OVERLINE "3.00,000"):}`
2. Totol Interest due to Brij and Nandan is Rs 3,00,000. However, total distributable profit is just Rs 2,00,000. So total profit of Rs 2,00,000 will be distributed between Brij and Nandan in the ratio of their due interest on CAPITALS, i.e., Rs 1,20,000: Rs 1,80,000 of `2:3` Thus,
Interest ALLOWED to Brij = Rs 2,00,00 `xx` 2/5 = Rs 80,000, and
Interest allowed to Nandan = Rs 2,00,000 `xx` 3/5 = Rs 1,20,000.
Discussion
1340.

Name the major heads which appear in the Assets part of the Balance Sheet.

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SOLUTION :N/a
Discussion
1341.

Name the major heads under which the Equity and Liabilities part of a company's Balance Sheet is organised and presented.

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SOLUTION :N/a
Discussion
1342.

Name the profitablility ratio based on investment.

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Discussion
1343.

On 1st April, 2012, Vivek Ltd. was formed with an authorised capital of Rs. 1,00,00,000 divided into 2,00,000 equity shares of Rs. 50 each. The company issued prospectus inviting applications for 1,80,000 shares. The issue price was payable as under: {:("On Application",:,"Rs. 15,"),("On Allotment",:,"Rs. 20,"),("On Call",:,"Balance amount."):} The issue was fully subscribed and the company allotted ahares to all theapplicants. The company did not make the call during theyear. (i) Share capital in the Balance Sheet of thecompany as per Schedule III-Part I of theCompanes Act, 2013. (ii) Also prepare 'Note to Accounts' for the same.

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SOLUTION :
Discussion
1344.

Name the major heads of revenue in the Statement of Profit and Loss.

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SOLUTION :N/a
Discussion
1345.

On 1st April ,2013jayand vijay entered intopartnersforsupplyinglaboratoryequipmetsto governmentcshools situatedin removeandbackwardareas , theycontributedcapitalsofRs. 80,000and Rs. 50,000respectivelyandagreed to shareto sharetheprofitin the ratioof 3:2the providedthatintereston capitalshallbe allowedat 9%perannum . Duringthe yearhe firmearneda profitof RS. 7,800 showingyourcalculationsclearlypropareprofitlossappropriationAccountof jayand vijayfor theyearended31st March, 2014.

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Solution :sincethe amountofnet profitif lessthanthe totalamountof INTERESTON capitali.e.,Rs. 72,000 (JAY )+rs. 4,5000(vijay ) =Rs. 11,500 , thenet profithas beendistbutedin THERATIOOF interestclaimsof jayand vijayi.e.,Rs. 72,00:Rs,4,500 or 8:5.
Discussion
1346.

Name the major headings under which the Equity and Liabilities part of a company's Balance Sheet is organised and presented.

Answer»

Solution :The MAJOR headings of Equity and Liabilities are:
(a) Shareholders' Funds(B) SHARE APPLICATION Money Pending ALLOTMENT
(c ) Non-current Liabilities(d) Current Liabilities.
Discussion
1347.

Name the major heads of expenses in the Statement of Profit and Loss.

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SOLUTION :N/a
Discussion
1348.

On 1st April, 2012, Kamya Ltd. was formed with an authorised of Rs. 40,00,000 divided into 4,00,000 equity shares of Rs. 10 each. The company issued prospectus inviting applications for 3,80,000 equity shares. The company received applications for 3,60,000 equity shares. During thefirst year, Rs. per share were called. Deepti holding 3,000 shares and Divya holding 6,000 shares did not pay the first call of Rs. 2 per share. Divya's shares were forfeited after the first call and later on 5,000 of theforfeited shares were reissued 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 'Note to Accounts'.

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SOLUTION :
Discussion
1349.

On 1st April, 2011, F Ltd. Issued Rs.40,00,000, 7% Debentures of Rs.100 each at a premium of 5% redeemable at a premium of 10% at the end of 4 years. Investment as required by law was made in fixed depositof the bank on 30th April earning interest @6% p.a. Pass journal entries at the time of Redemption of Debentures.

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Solution :Debenture Redemption Reserve CREATED for Rs.10,00,000 on 31st MARCH, 2014. Debenture Redemption Investment Rs.6,00,000 made on 30th April, 2014.
Note : INTEREST on investment will be calculated for 11 MONTHS.
Discussion
1350.

Name the liability which is not shown in the Balance Sheet, but paid at the time of dissolution of the firm.

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SOLUTION :UNRECORDED LIABILITY.
Discussion