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1401.

Nishtha and Anshu were partners sharing profits in the ratio of 3:2. They admitted Jyoti as a new partner for 3/10th share which she acquired 2/10th from Nishtha and 1/10th from Anshu. Calculate the new profit-sharing fatio of Nishtha, Anshu and Jyoti.

Answer»

SOLUTION :NEW Profit-scaring Ratio of NISHTHA, ANSHU and JYOTI `=4:3:3.`
Discussion
1402.

Name any two Long-term Borrowings.

Answer»

SOLUTION :(i) DEBENTURES(II) TERM LOANS.
Discussion
1403.

Name any two items shown under the heading Current Liabilities.

Answer»

SOLUTION :(i) Short-term BORROWINGS(II)TRADE PAYABLES.
Discussion
1404.

New Industries Limited issued a prospects, inviting applications for 1,00,000 shares of Rs. 10 each at a premium of Rs. 5 per share, payable as follows : On Application Rs. 4.50 , On Allotment Rs. 7.50 (including Premium), On Ist Call Rs. 2.00 and On Final Call Rs. 1.00. Applications were recieved for 1,25,000 shares and allotment was made pro-rata to the applicants of 1,20,000 shares, the remaining applications being refused. Money received in excess on the application was adjusted towards the amount due on allotment. D, to whom 2,000 shares were allotted , fasiled to pay allotment money and on his failure to pay the firstcall, his shares were forfeited. M, the holder of 3,000 shares, failed to pay the to calls, and so his shares were also forfeited. All these shares were sold to R, credited as fully paid for Rs. 8 per share.Pass Cash Book and journal entries (with narrations) to record the above issue of shares by the company.

Answer»

Solution :Cash at BANK RS. 15,11,800, Cash received on allotment Rs. 6,46,800, Balance of SHARE Forfeiture A/c transferred to CAPITAL Reserve Rs. 10,800 + Rs. 21,000 - Rs. 10,000 = Rs. 21,8000.
Discussion
1405.

Name any two items shown under the heading Non-current Liabilities.

Answer»

Solution :(i) Long-term BORROWINGS(II) Deferred TAX LIABILITIES (Net)
Discussion
1406.

New partner can be admitted into partnership

Answer»

with the consent of any ONE partner
with the consent of MAJORITY of partners
with the consent of all the partners
with the consent of 2/3rd of OLD partners

Solution :with the consent of all the partners
Discussion
1407.

Name any two Financing Activities that will result into inflow of cash.

Answer»

Solution :(i) Cash PROCEEDS from ISSUING SHARES or other securities.
(II) Cash proceeds from LOANS, deposits and other short-term or long-term borrowings.
Discussion
1408.

Net Profit Ratio is 33.50% against industry standard 27.5%. What does it mean?

Answer»

SOLUTION : It INDICATES the EFFICIENCY of the BUSINESS
Discussion
1409.

Name any two financial statements prepared by a Not-for-Profit Organisation.

Answer»

SOLUTION :(i) Income and Expenditure Account,and (II) BALANCE SHEET,
Discussion
1410.

Neetu, Meetu and Teetu were partners in a firm. On 1st January, 2018, Meetu retired. On Meetu's retirement the goodwill of the firm was valued at Rs.4,20,000. Pass necessary Journal entry for the treatment of goodwill on Meetu's retirement.

Answer»

Solution :Meetu's Share of Goodwill Rs. 1,40,000 would be ADJUSTED between Neetu and Teetu in their gaining ratiio of `1:1.`

Note: Since the profit-sharing ratio is not GIVEN, it is assumed that they are sharing PROFITS EQUALLY.
Discussion
1411.

Name any two factors affecting goodwill of a partnership firm.

Answer»

SOLUTION :(i) FAVOURABLE LOCATION of the BUSINESS.
(ii) Efficiency of MANAGEMENT.
Discussion
1412.

Net profit is obtained by deducting ………………. From Gross Profit.

Answer»

OPERATING Expenses
Non-Operating Exp.
Operating and Non-Operating Exp.
None of the above

Answer :C
Discussion
1413.

Name any three intangible assets which are amortised.

Answer»


SOLUTION :N/a
Discussion
1414.

Neeraj and Dheeraj are carrying on a business of repairing electronic items. There are no other technicians for repairing electronic items in the locality. As the electric supply has a lot of fluctuations, the equipments get damaged. Therefore, both the partners themselves do the repairing work to the satisfaction of the customers. The firm donates 10% if its profits to a Charitable Hospital of the locality for the medical treatment of persons below poverty line. State the two factors affecting the good will of the firm discoussed in the above para.

Answer»

Solution :FACTORS affecting the goodwill of the firm (Any two):
(a) NATURE of BUSINESS.
(b) Efficiency of Management.
(C ) Favourable LACATION.
Discussion
1415.

Net increase in Working Capital other thanCash and Cash Equivalents will increase, decrease or not change Cash Flow from Operating Activities. Give reason in support of your answer.

Answer»

SOLUTION :Net increase in WORKING Capital implies that more cash is invested in working Capital and THUS DECREASES Cash Flow from Operating Activities.
Discussion
1416.

Mudra Ltd. Had 10,000, 12% Debentures of Rs.100 each due for redemption at a premium of 5% on March 31, 2018. The Board of Directors of the company decided to transfer the required amount to Debenture Redemption Reserve. Required investment was also made and the debentures were redeemed. Pass necessary journal entries.

Answer»

Solution :Rs.2,50,000 will be transferred from SURPLUS in Statement of Profit& Loss to Debenture REDEMPTION Reserve on 31st March 2017. Debenture Redemption Investment made for Rs.1,50,000 on 30TH APRIL, 2017.
Discussion
1417.

Nazma Ltd. Received interest on an item and the accountant classified it under Financing Activity while preparing Cash Flow Statement. Name another item for which such a treatment is possible. Note by Authors: There seems to be printing error. Please read 'Investing Activity' in place of 'Financing Activity'.

Answer»

SOLUTION :DIVIDEND RECEIVED.
Discussion
1418.

Mukesh and Ramesh are partners sharing profits and losses in the ratio of 2:1 respectively. They admit Rupesh as partner with 1/4 share in profits with guarntee that his share of profit shall be at least Rs 55,00. The net profit of the firm for the year ending 31st March, 2013 was Rs 1,60,000. Prepare Profit and Loss Appropriation Account.

Answer»

Solution :Share of PROFIT: Mukesh - Rs70,000, Ramesh-RS 35,000, and Rupesh - Rs 55,000. Deficiency of Rs 1,50,000 in Rupesh's share will be BORNE by Mukesh and Ramesh in `2:1.`
Discussion
1419.

Net Profit after Interest but before Tax: Rs 1,40,000, 15% Long-term Debts: Rs 4,00,000, Shareholders' Funds: Rs. 2,40,000, Tax rate: 50%. Calculate Return on Capital Employed.

Answer»

SOLUTION :RETURN on Capital Employed = `("Net Profit before Interest and Tax")/("Capital Employed")xx100`
`= ("Rs. 2,00,000")/("Rs. 6,40,000")xx100 = 31.25%`.
Net Profit after Interest but before Tax = Rs. 1,40,000
Interest = 15% of Rs. 4,00,000 = Rs. 60,000
Net Profit before Interest and Tax = Rs. 1,40,000 + Rs. 60,000 = Rs. 2,00,000
Capital Employed = Long-term DEBTS + SHAREHOLDERS' FUNDS
= Rs. 4,00,000 + Rs. 2,40,000 = Rs. 6,40,000.
Discussion
1420.

Navnirman Ltd. issued 4,00,000 equity shares of Rs. 10 each at per. The amount per share was payable as follows: Rs. 3 on application, Rs. 2 on allotment, Rs. 2 on first call and Rs. 3 onfinal call. The issue was fully subscribed and the shares were allotted fully to all theapplicants. All calls were made. Mahi, a shareholder holding 6,000 shares paid the final call money alongwith thefirst call. Shrey holding 700 shares did not pay the first call on thedue date. Shrey paid thefirst call along with thefinal call. The accountant of thecompany had correctly passed theentries till receipt of allotment money. After that the following entries were left incomplete by him. Complete these entries.

Answer»

SOLUTION :
Discussion
1421.

Name and explain the function which returns the future value of an investment which has constant payment and interest.

Answer»

Solution :PMT :- The PMT function calculates the periodic payment for an annuity assuming equal payments and a constant rate of interest.
The syntax of PMT function is as follows:
= PMT (rate, nper, pv, [fv], [type])
where Rate is the interest rate per period,
Nper is the number of periods,
Pv is the PRESENT value or the amount the future payments are worth presently,future value or cash BALANCE that after the last payment is made (a future value of zero when we omit this optional argument)
Type is the value 0 for payments made at the end of the period or the value 1 for payments made at the BEGINNING of the period. The PMT function is often used to calculate the payment for mortgage loans that have a fixed rate of interest
Discussion
1422.

Narang, Suri and Bajaj are partners in a firm sharing profits and losses in proportion of 1//2 , 1//6 and 1//3respectively. The Balance Sheet on April 1, 2015 was as follows: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.

Answer»


Answer :PROFIT on Revaluation, RS. 6,960; Balance in Capital Accounts of Narang, Rs. 49,230; and that of SURI, Rs. 16,410. AMOUNT at Credit in Bajaj Capital is Rs. 41,320.
Discussion
1423.

Murli, Naveen and Omprakash are partners sharing profits in the ratio of (3)/(8), (1)/(2) and (1)/(8). Murli retires and surrenders 2/3rd of his share in favour of Naveen and the remaining share in favour of Omprakash. Calculate new profit sharing and the gaining ratio of the remaining partners.

Answer»

Solution :`{:(,,"NAVEEN","OMPRAKASH"),((i),"Old Share",(1)/(2),(1)/(8)),((ii),"Share Acquired by Naveen and",,),(,"Omprakash from Murli",=(2)/(8)"of"(3)/(8)=(2)/(8),(1)/(3)"of"(3)/(8)=(1)/(8)),((iii),"New Share=(i) + (ii)",=(1)/(2)+(2)/(8),(1)/(3)+(1)/(8)),(,,=(6)/(8)"or"(3)/(4),=(2)/(8)"or"(1)/(4)):}`
Thus, the New PROFIT sharing Ratio = `(3)/(4):(1)/(4)`or `3:1`, and the
Gaining Ratio = `(2)/(8):(1)/(8)` or `2:1` [as CALCULATED in (ii)].
Discussion
1424.

Nandan, a Director of 'Nanda Agro Products Ltd.,'proposed in a board meeting that to inculcate the habit of savings among people he wanted to bring a special issue of shares. His proposal was accepted by the company. The compnay issued 40,000 equity shares of Rs. 100 each. The share money per share was payable as: {:("On Application",-,"Rs. 30,"),("On Allotment",-,"Rs. 50,"),("On First and Final Call",-,"Rs. 20."):} Raman, a farmer holding 80 shares could not pay his call money on time. Nathan, another farmer holding 50 shares, paid the call money also with allotment. Raman paid the amount due form him after four months explaining the reason for delay, the company did not charge any interest from him. Calculate theamount received by the company on allotment.

Answer»

SOLUTION :`{:("Calculation of Amount Received on Allotment:",""RS.),("Allotment money due on 40,000 SHARES @ Rs. 50 per share","20,00,000"),("Add: CALL money received in advance on 50 shares @ Rs. 20 per share","1,000"),("Amount received on allotment",BAR(ul(ul(20,01,000)))):}`
Discussion
1425.

Mudit , Sudhir and Uday are partners in a firm sharing profits in the ratio of 3: 1 : 1 . Their fixed capital balance were .Rs 4,00,000 ,.Rs 1,60,000 and .Rs 1,20,000 respectively.Net profit for the year ended 3 1st March, 2018 distributed amongst the partners was .Rs 1,00,000, without taking into account the following adjustment : (a) Interest on capitals @ 2.5 % p.a , (b) Salary to Mudit .Rs 18,000p.a and commission to Uday .Rs 12,000 . (c ) Mudit was allowed a commission of 6 % of divisible profit after charging such commission . Pass a rectifying journal entry in the books of the firm . Show workings clearly.

Answer»

SOLUTION :
Discussion
1426.

Nareshandsukeshare partners withcapitalsof Rs. 3,00,000 eachas on31stMarch, 2019 Nareshhad withdrawnRS. 50,000againstcapital on 1stOctober ,2018and alsoRS. 1,00,000besides thedrawingsagainstcapialsis tobe allowed@10%p.a Netprofitfor theyearwasRs. 2,00,000whichis yetto bedistributed Passthejournal enteries for intereston capital anddistributionofprofit .

Answer»


ANSWER :1.For INTEREST on CAPITAL :DR . Profit and lossapproprition A/C by Rs. 82,500
CR. Nareshcapial A/C by Rs. 42.500andsukeash 'scapitalA/CyRs. 40,000
2.Forprofit and lossappropriaton A/C By Rs. 1,70,000
Cr, naresh'scapitalA/CBy Rs. 58.750 ANd Sukash 's capitalA/CByRs,. 58,750
Discussion
1427.

MuditsudhirandUday arepartnersina firmsharing profitin theratioof 3:1:1theirfixedcapitalbalancesare Rs. 4,00,000Rs. 1,60,000and Rs. 1,20,000respectivelyNetprofitfor theyearended31stMarch 2018distributedamongst thepartners was Rs. 1,00,000withouttaking intoaccountthefollowingadjustments :(a)intereston capital @2.5% p.a,(b)SalarytomuditRs. 18,000p.aand commissionto Uday Rs. 12,000 ( c )muditwasallowedof 6%ofdivisbleprofitafterchargingsuchcommission . passa rectffingjournal entryin thebooksof thefirmshowworkingclearly.

Answer»


ANSWER :DR. SUDHIR 's CurrectA/C -RS. 6,000Cr MUDIT 's currectA/C -Rs. 1,000and Uday'scurrectA/C =Rs. 5,000
Discussion
1428.

Name two sections of a company's Balance Sheet.

Answer»

Solution :Two SECTIONS of the BALANCE Sheet are:
(i)EQUITY and Liabilities(II) Assets.
Discussion
1429.

Name two sources of finance for redemption of debentures.

Answer»

Solution :(i) Redemption from the proceeds of FRESH issue of shares and DEBENTURES.
(II) Redemption out of profits.
Discussion
1430.

Monu, Nigam and Shreya ware partners in a firm sharing profits and losses in the ratio of 4:3:1. The firm closes its books on 31st March every year. As per the terms of Partnership Deed on the death of any partner, the share of goodwill of the deceased partner will be calculated on the basis of 50% of the net profits credited to that partner's Capital Account during the last four completed years before death. Monu died on 1st July, 2015. The profits for last four years were: His share of profit in the year of his death was to be calculated on the basis of sales. Sales for the year ended 31st March, 2015 amounted to Rs 21,00,000. Form 1st April, 2015 to 30th June, 2015 the firm's sales were Rs2,20,000. Pass necessary Journal entries relating to the amount of goodwill and profit to be transferred to Monu's Capital Account. Also show your workings clearly.

Answer»

Solution :
1. CALCULATION of Goodwill and MONU's Share of Goodwill:
Monu's Share of Goodwill `=50//100[(Rs97,000+Rs 1,05,000 + Rs 30,000 + Rs 84,000)xx4//8]=Rs79,000.`
2. Calculation of Monu' Share of Profit TILL the date of death:
Monu's Share or Profit`=(Rs84,000("Profit"))/(Rs21,00,000("Sales"))xxRs2,00,000xx4//8=Rs79,000.`
Discussion
1431.

Name two parties interested in Financial Statement Analysis.

Answer»

Solution :Parties interested in Financial Statement ANALYSIS(Any two):
(i) Owners(II)Managers(iii)Creditors
(IV) Lenders/Bankers(v) GOVERNMENT.
Discussion
1432.

Moti Led. invited applications for issuing 10,00,000 Equity Shares of Rs. 10 each at a premium of Rs. 2 per share. The amount was payable as follows: {:("On Applicaton",,-,,"Rs. 5 (including premium)"),("On Allotment",,-,,"Rs. 4,"),("On First and Final call",,-,,"Rs. 3."):} Applications for 15,00,000 shares were received. Applications for 3,00,000 shares were rejected and pro rata Allotment was made to theremaining applicants. Excess application money was utilised towards sum due on allotment. Giri who had applied for 24,000 shares failed to pay the allotment and call money. His shares were forfeited. Out of the forfeited shares, 10,000 shares were reissued for Rs. 8 per share fully paid-up. Pass necessary Journal entries in thebooks of Moti Ltd.

Answer»

Solution :

Working Notes:
1. Calculation of Money Received on Allotment:
(i) Prorata allotment = 12,00,000 : 10,00,000or 12 : 10
`{:((II),"Number of shares allotted to Giri = 10/12"xx"24,000 = 20,000 shares",RS.),((iii),"Money received on application from Giri (24,000 shares"xx"Rs. 5)","1,20,000"),(,"Less: Amount adjusted on application (20,000"xx"Rs.5)","1,00,000"),(,"Excess application money adjusted on allotment",bar(UL(ul(20,000)))):}`
(iv) Money due from Giri on Allotment:
`{:("Money due on allotment (20,000"xx"Rs.4)","80,000"),("Less: Excess application money adjusted [as per (iii)]","20,000"),("Money not paid by Giri",bar(ul(ul(60,000)))):}`
(v) Money Received on Allotment:
`{:("TOTAL amount due on Allotment","40,00,000"),("Less: Excess application money adjusted","10,00,000"),(,bar(30,00,000)),("Less: Money not paid by Giri [as per (iv)]","60,000"),("Money Received on ",bar(ul(ul(29,40,000)))):}`
2.`{:("Calculation of amount transferred to Capital Reserve:",Rs.),("Amount forfeited on 10,000 shares (Rs.80,000"xx"1/2)","40,000"),("Less: Discount on reissue","20,000"),("Gain (Profit) on reissue transferred to Capital Reserve",bar(ul(ul(20,000)))):}`
Discussion
1433.

Name two components of total revenue of a company.

Answer»

SOLUTION :(i) REVENUE from OPERATIONS(II) Other INCOME.
Discussion
1434.

Name three items that are shown under Employees Benefit Expenses.

Answer»


SOLUTION :N/a
Discussion
1435.

Morning Stores Ltd. is registeredwith the Authorised Share Capital of Rs. 50,00,000 divided into 4,00,000 Equity Shares of Rs. 10 each and 10,000 Preference Shares of Rs. 100 each. The company issued 2,75,000 Equity Shares and 10,000, 10% Preference Shares for subscription. Application were received for 2,50,000 Equity Shares and 10,000, 10% Preference Shares. The entire nominal (face) value of Equity Shares and Rs. 80 on 10% Preference Shares were called for payment. The amount called was received. Show Share Capital in the Balance Sheet of the company.

Answer»

SOLUTION :
EXPLANATION: 10% PREFERENCE SHARES are not SHOWN as fully paid-up because against nominal (face) value of Rs. 100, Rs. 80 has been called.
Discussion
1436.

Name three items that are shown under Finance Costs.

Answer»


SOLUTION :N/a
Discussion
1437.

Moon Ltd. has 5,000, 10% Debentures of Rs. 100 each outstanding as on 31st March, 2018. These Debentures are due for redemption on 31st March, 2019. The company has a Debentures Redemption Reserve of Rs. 75,000 on date. Determine the missing values in the following Journal entries of Moon Ltd. : JOURNAL

Answer»

Solution :
WORKING note :
Calculation of AMOUNT to be transferred to DEBENTURES Redemption RESERVE (DRR) :
Discussion
1438.

Name the types of expenses that are shown under Employees Benefit Expenses.

Answer»


SOLUTION :N/a
Discussion
1439.

Mona, Nisha and Priyanka are partners in a firm. They contributed Rs 50,000 each ad capital three years ago. At that time Priyanka agreed to look after the business as Mona and Nisha were busy. The profits for the past three years were Rs 15,000, Rs 25,000 and Rs 50,000 respectively. while going through the books of account Mona noticed that the profit had been distributed in the ratio of 1:1:2. Where she enquired from Priyanka about this, Priyanka answered that since she looked after the business she should get more profit. Mona disagreed and it was decided to distribute profit equally retrospectively for the last three years. You are rewuired to make necessary corrections in the books of account of Mona, Nisha and Priyanka by passing an adjustment enrty.

Answer»

Solution :Dr. PRIYANKA's CAPITAL A/c by Rs 15,000,
Cr. MONA's Capital A/c by Rs7,500 and NISHA's Capital A/c by Rs 7,500.
Discussion
1440.

Money Received Against Share Warrants is shown as

Answer»

SHAREHOLDERS' FUNDS
Other Long-TERM Liabilities
Long -term Provisions
Other CURRENT Liabilities

Solution :Shareholders' Funds
Discussion
1441.

Mona Ltd., has issued 20,000, 9% Debentures of Rs.100 each of which half the amount is due for redemption on March 31st 2018. It was decided to invest the required amount towards Debenture Redemption Investment. The company has in its Debentures Redemption Reserve Account a balance of Rs.4,40,000 on 31st March, 2017. Record the necessary journal entries for the Redemption of Debentures.

Answer»

SOLUTION :
Discussion
1442.

Mona Ltd. has issued 20,000, 9% Debentures of Rs. 100 each of which half the amount is due for redemption on 31st March, 2015. The compnay has in its Debenture Redemption Reserve Account a balance of Rs. 5,00,000. Record necessary Journal entries at the time of redemption of Debentures.

Answer»

SOLUTION :
Note: Compnay has balance in DRR EQUIVALENT to 25% of the value of debentures OUTSTANDING.
Discussion
1443.

moli bholaand rajwerepartnersin firmsharingprofits and lossesin theratio 3:3:4. their partnershipDeedprovidedfor thefollowing: (i)Interest in capital @5% p.a(ii) interest on drawings @12@ p.a (iii)intereston partners'loan@6%p.a(iv)Moli wasallowedanannual salary of Rs. 4,000 , bholawasallowed a commission of 10%of netprofitas shown by profitand lossAccountand Raj wasguaranteda profitasshownby profitandlossaccountand Raj Wasguaranted a profitof Rs. 1,50,000 aftermaking alltheadjustments asprovided in thepartnership agreement theirfixedcapitalsweremoli Rs. 5,00,000 BholaRs. 8,00,000 and raj : Rs,Rs, 4,00,000 On 1stapril2016Bholaextended a loanof Rs. 1,00,000 to thefirmthe netprofitof thefirmforthe yearended31st March2017beforeinterestonbhola 's loanwasRs. 3,06,000 prepaneprofitand loss AppropriationAccountofMoliBholaand rajfortheyearended31st March 2017 and theirCurrentaccountsassumingthatbholawithdrewRs. 40.000 attheendhalfyear.

Answer»

Solution :
Working notes
1.Calculationof interest on DRAWING:(a)intereston moli'sdrawingsondawing s RS. 40,000i.e, 10,000`xx`4instralments )`xx`4.5 /12months`xx`12/100 =Rss. 1.800
(b)interest on Bhola'sDrawingdrawing: rs.60,000(i.e,.,Rs. 40.000 `xx` 12 MONTHS`xx` 12/100=Rs. 2.400
*Averageperiod `=("monthsleftfirstDrwings + Monthsleft afterlastdrawings")/(2)`
(A)averagepeiod incaseof moli=`(9+0)/(2)=4.5` months .
(b) AVERAGE periodin caseof bhola `=(11+0)/(2) =5.5` months,
(c )Average periodincaseof raj`=(6+0)/(2)=3` nmonths .
weapplyaveragepriodof thecalculationof intereston drawingswhena uniformamountiswithdrawnat regularinterval .
2. Distributionofprofit :
profit after adjustment(rs. 3.00.000 +rs.7500 -Rs. 85.000 -rs. 4.000-Rs. 30.000 )=rs. 1.88.500willdistributedamongmolibholaand rajub the ratioof 3:3:4
Moli's share=Rs. 56.550 bhola 'sshare 56.550 and raj's share Rs. 75.400.
Howeverraj 'sminimumguarantedprofitis Rs,.1.50.000 So thereis adefivencyfo Rs. 74.600(i.e., Rs. 1.56.000 -RS. 75.400) deficiencyto beborneby moliandbholaequallyie.,rs. 37.300 each
Discussion
1444.

MoliandbholicontributeRs. 20,000 and Rs. 10,000respectively towardscapital theydecideto allowintereston capital@6%p.atheirrespectiveshareof profitis 2:3and thenetprofitfor theyearis Rs. 1,500 showdistribuationof profits : (i)wherethereis noagreementexceptfor intereston capitals,and (ii)wherethereis anagreementthattheintereston capital as a charge .

Answer»


ANSWER :(i) INTERESTON CAPITAL;Moli-Rs,1,000; bholi -rs. 500 (ii)Loss : Moli -Rs. 120 : bholi-Rs.180.
Discussion
1445.

Mohit, Neeraj and Sohan are partners in a firm sharing profits in the ratio of 2 : 1 : 1. Neeraj retires and Mohit and Sohan decided that the capital of the new firm will be fixed at Rs. 1,20,000. The capital accounts of Mohit and Sohan show a credit balance of Rs. 82,000 and Rs. 41,000 respectively after making all the adjustments. Calculate the actual cash to be paid off or to be brought in by the continuing partners and pass the necessary journal entries.

Answer»

Solution :The New PROFIT SHARING RATIO between Mohit and SOHAN = 2 : 1


2. When the total CAPITAL of new firm is not specified.
Discussion
1446.

Mohar Ltd.Forfeited 160 shares of Rs. 10 each on which the holder had paid only the application money of Rs.2 per share . Out of these , 40 Shares were reissued to Gaurav as fully paid for Rs.9 per share. The gain on reissue is

Answer»

Rs.320.
Rs.160.
Rs.40.
None of these.

Answer :C
Discussion
1447.

Mohar Ltd. Forfeited 160 shares of Rs 10 each on which the holder had paid only the application money of Rs2 per share. Out of these, 40 shares were reissued to Gaurav as fully paid for Rs 9 per share. The gain on rejssue is

Answer»

RS 320
Rs 160
Rs 40
None of these

Answer :C
Discussion
1448.

Mohan's Account was debited by ₹ 1,500 instead of ₹ 15,000. While rectifying the above error, which account shall be credited?

Answer»

SOLUTION :SUSPENSE ACCOUNT
Discussion
1449.

Mohan, vijay andanilare partners thebalances of theircapital AccountsbeingsRS, 30,000rs, 25,000andRs, 20,000respectivelyat theseamountsprofit for theyearended31stMarch2019Rs. 24.000hadalradybeencreditedto partnersin thepropritionin whichthey shared profits their drawings wereRs. 5,000(mohan )Rs. 4,000 (vijay )and Rs. 3,000 (anil ) during the yearSubsequentlyfollowingomissions werenoticedandit was decidedto rectify the erors : (a)interestoon capital@10% p.a (b)interest on drawings : Mohan Rs. 250 VijayRs.200 anil Rs, 150 make necesarycorrections through a journal entry and show yourworkingclearly .

Answer»


Answer :DEBIT anilby RS.550and creditmohan buyRs. 550 ; corrected profittransferredtoeach partner Rs. 6,100.
Discussion
1450.

Mohan's Account was debited by₹ 1,500 instead of ₹ 15,000. Identify the type of error

Answer»

SOLUTION :ERROR of COMMISSION.
Discussion