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2801.

A, B and C are three partner , B retires from the firm , on thedate of his retirement stock , sundry debtors and provisions of doubtful debtsstand in the Books of Account at Rs. 50,000, Rs. 45,000 and Rs. 4,500 respectively. The partners decided to reduce the value of stock to 90% , provision for doubtful debts to be brought to 15% of sundry debtors . The entry made for provision for doubtful debts will be :

Answer»

Dr. REVALUATION A/c -RS.2,250, Cr PROVISION for Doubtful DEBTS A/c -Rs. 2,250.
Dr. Profit and Loss A/c Rs. 6,750 , Cr DEBTORS's A/c - 6,750.
Dr. B's Capital A/c -Rs. 6,750, Cr Revaluation A/c - 6,750.
None of these.

Answer :a
Discussion
2802.

A, B andC are partners sharing profits in the ratio of 5 :3 :2 . They decide to share to future profits in the ration of 2 :3:5. What will be the accounting treatment Workmen Compensation Reserve appearing in the Balance Sheeton that date when no information is available for the same?

Answer»

Distributed to the PARTNERS in THEIRCAPITAL ratio.
Distributed to the partners in their NEW profit - sharing ratio.
Distributed to the partners in their old profit - sharing ratio.
Carried forward to BALANCE Sheet.

Solution :Distributed to the partners in their old profit - sharing ratio.
Discussion
2803.

A company has issued 1,00,000 Equity Shares of Rs 10 each. It has called the entire nominal value of the share. It has received the calls made except the final call of Rs 3 on 1,000 shares. Subscribed Capital will be shown as follows:

Answer»

SUBSCRIBED but not fully paid-up,
`{:("Subscribed and fully paid-up"₹""₹),("1,00,000 Equity Shares of Rs 10 each""1,00,000"""),("Less: Calls-in-Arrears""3,000""9,97,000"):}`
`{:("Subscribed and fully paid-up"),("99,000 Equity Shares of Rs 10 each""9,90,000"""),("Subscribed but not FULL paid-up"),("1,000 Equity Shares of Rs 10 each""10,000"),("Less: Calls-in-Arrears" "3,000" "7,000"),("9,97,000"):}`
CANE be SHOWN as (b) or as (c).

Solution :N/a
Discussion
2804.

A ,B and Care partnersin a firmNetprofit of thefirmfor theyearended31st March 2019is Rs,30,000which has beendulydistributedamongthe partnersin theiragreedratio3:1:1it isnoticedon 10th April2019thattheundermentioned transactionswerenot passedthroughthe books of account of thefirmforrthe yearended31stMarch2019. (a)intereston capital@6%per annum the capitalof A,B and C beingsRs. 50,000Rs. 40,000and Rs. 30,000respectively . ltbr. (b)intereston drawings A-Rs. 350,b Rs. 250 Rs. 7,500 (c )Partners' salariesA Rs.5,000,B Rs. 7,500 ( D) j commissiondueto A ( forsomespecialtransaction)Rs. 3,000 . yearare requiredto passa journalentry, whichwillnotaffectand Loss Account of thefirmrectify thepositionof partnersinter se .

Answer»


ANSWER :DR. A'scapitalA/C-RS. 2,520 and C'sCapitalA/C -Rs. 2,740 ;CR B's CapitalA./cRs. 5,260
Discussion
2805.

A, B and C were partners in a firm sharing profits in the ratio of 3:2:1. Their Balance Sheet as on 31st March, 2015 was as follows: From 1st April, 2015, A, B and C decided to share profits equally. For this it was agreed that: (i) Goodwill of the firm will be valued at ₹ 1,50,000. (ii) Land will be revalued at ₹ 80,000 and building be depreciated by 6 %. (iii) Creditors of ₹ 6,000 were not likely to be claimed and hence should be written off. Prepare Revaluation Account, Partner's Capital Accounts and Balance Sheet of the reconstituted firm.

Answer»


ANSWER :Gain (Profit) on REVALUATION- ₹ 33,000; Partner's CAPITALACCOUNTS; A- ₹ 1,56,500.B- ₹ 71,000 and C - ₹ 10,500; BALANCE Sheet Total- ₹ 3,02,000.
Discussion
2806.

A and B are partners sharing profits in the ratio of 3:2 . They admit C into thepartnership with 1?4th share in future profits. The new profit. Thenew profit sharing ratio is 5 : 4 : 3.C brings into thebusiness Rs.50,000 for his capital but could not brings anyamount for goodwill. The firm's goodwill onC's admission was valued at Rs.48,000 . Pass journal entries.

Answer»

Solution :(a) When Goodwill is adjusted through new Partner's Current Account :

Notes :
(1) Value of total goodwill of the FIRM = Rs. 48,000
C's share of goodwill= ` 48,000 xx 1/4 = Rs. 12,000`.
(2) Calculation of Sacrificing Ratio :
Sacrifice Ratio = Old Ratio - New Ratio
` A = 3/5 - 5/12 = (36-25)/60 = 11/60`
` B = 2/5 - 4/12 = (24-20)/60 = 4/60`
Thus, Sacrifice Ratio = ` 11/60 : 4/60or 11 : 4`
ALTERNATE SOLUTION :ltBRgt (B) When Goodwill is RAISED and WRITTEN off :

Discussion
2807.

A, B and C started a firam on 1stOctober, 2018sharng profits equally .A drewregularly Rs. 4,000 in thebeginningofeverymonthof thesix monthsended31 stMarch,019B drewregularlyRs. 4,000at the endof everymonth for thesixmonthsended31 stMarch 2019C drew regularlyRs. 4,000 in themiddleof every monthsforthe six monthsended31st March,2019 Calculateinterestin drawing@5% p.a for theperiod ended31st MArch , 2019.

Answer»

Solution :TotalDrawwingsofeach PARTER =RS. 4,000`xx` 6=Rs. 24,000.

SITUATION 8.if thedatewithdrawalin notgiven , thenintereston totaldrawings for THEYEAR is calculated for six monthson theaverage BASIS .
Discussion
2808.

A, B and C are partners sharing profits in the ratio of 3:4:5. B retires and the goodwill of the firm is valued at Rs. 42,000. A and C decide to share profits in the ratio of 3:4. Journal entry will be:

Answer»

`{:("A's CAPITAL A/C",,DR.,"6,000",),("C's Capital A/c",,Dr.,"8,000",),("To B's Capital A/c",,,,"14,000"):}`
`{:("A's Capital A/c",,Dr.,"7,500",),("C's Capital A/c",,Dr.,"6,500",),("To B's Capital A/c",,,,"14,000"):}`
`{:("A's Capital A/c",,Dr.,"22,500",),("C's Capital A/c",,Dr.,"19,500",),("To B's Capital A/c",,,,"42,000"):}`
`{:("B's Capital A/c",,Dr.,"14,000",),("To A's Capital A/c",,,,"7,500"),("To C's Capital A/c",,,,"6,500"):}`

ANSWER :B
Discussion
2809.

A and B are partners in a firm sharing profits and losses in the ratio of 5 : 3. C was admitted for 1/3rd share in the profits. On the date of C's admission, the Balance Sheet of A and B showed a General Reserve of RS.60,000 and a balance of RS. 20,000 in the Profit and Loss Account on the assets side of the Balance Sheet. Pass necessary Journal entries on the teratment of these items on C's admission.

Answer»

SOLUTION :
Discussion
2810.

A, B and C are partners, B retires from the firm , on the date of his retirement stock , sundry debtors and provisisons of doubtful debts stand in the Books of Account at Rs. 50,000Rs. 45,000 and 4,500 respectively . The partners decided to reduce the value of stock to 90% , provision for doubtful debts to be brought to 15% of sundry debtors . The entry made for revaluation of stock will be :

Answer»

Dr. Revaluation A/c - RS. 5,000 , CR . STOCK A/c -5,000.
Dr.Profit and LossA/c - Rs. 5,000 , Cr . Stock A/c -5,000.
Dr. B's CAPITAL A/c - Rs. 5,000 , Cr Revaluation A/c - Rs. 5,000.
None of these.

Answer :a
Discussion
2811.

A company has issued 10,000 Equity Shares of Rs 10 each and it has called the total nominal value. It has received the total amount, except the final call of Rs 3 on 500 Equity Shares. These 500 Equity Shares will be shown as

Answer»

SUBSCRIBED and FULLY paid-up
Subscribed but not fully paid-up
Issued SHARE capital
None of these

Solution :Subscribed but not fully paid-up
Discussion
2812.

A B and C werepatnerstheircapitalswere A -Rs. 30,000 , B-Rs,20,000 and - Rs. 10,000 resectivelyAccordingto thepartnershipdeedtheywereentitled toan intereston capitalat 5% p.ain additionB was also entitledto draw a salaryof Rs. 500 permonth Cwasentitledtoa commissionof 5%on theprofits afterchargingintereston capitalbutbeforechargingsalarypayableto B .Net profitfor the yearwas Rs. 30,000 distributed in theratioof capitalswithoutpayableToNetprofitfor theyear was Rs. 30,000 distributedin theratioofcaptilswitoutprovidingforanyof theaboveadjustments the entry showing theworkings clearly .

Answer»

SOLUTION :
WORKING Notes :
1.It ispresumend THATOF theparnersarefixedAs a resultintereston capitals has been calculatedongivenbalancesof capitals .
`{:(,Rs.),("Net profit ",30.000),("LESS ,'intereston capptial(Rs. 1.500+1.000+Rs. 500)",3.000),("C'scommission"=5//100xxRs. 27.000=Rs. 1.350.,underline overline(27.000)):}`
Discussion
2813.

A company receives a dividend of Rs 2 Lakhs on its investment in other company's shares. In case of a Finance Company, it will be classified under which kind of activity?

Answer»

Cash FLOW from OPERATING Activities
Cash Flow from Investing Activities
Cash flow from FINANCING Actvities
No Cash Flow

ANSWER :A
Discussion
2814.

50,000, 9% Debentures redeemable within 12 months of the date of Balance Sheet will be shown under :

Answer»

Short-term Borrowings
Short-term Provision
Other CURRENT Liability
Trade Payables

Answer :C
Discussion
2815.

A limited company forfeited 300 shares of Mr. X who had appled for 500 shares on account of non-payment of allotment money Rs. 3 + 2 (premium) and first call Rs. 2. Only Rs. 3 per share was received with application. Out of these, 200 shares were re-issued to Mr. Y as fully paid in such a way that Rs. 600 were transferred to capital reserve. Give journal entries relating to forfeiture and re-issue.

Answer»

SOLUTION :
Discussion
2816.

A Company's Current Ratio is 3:1 and Liquid Ratio is 1.2:1. If its Current Liabilities areRs. 2,00,000, what will be the value of Inventory?

Answer»

RS. 2,40,000
Rs. 3,60,000
Rs. 4,00,000
Rs. 40,000

Answer :B
Discussion
2817.

A, B and C are partners sharing profit and losses in the ratio of 2 : 2 : 1, B retires from the firm, at that time goodwill of the firm was valued at Rs 30,000. What contribution has to be made by A and C in order to pay B?

Answer»

RS 20,000 and Rs 10,000
Rs 15,000 and Rs 15,000
Rs 8,000 and Rs 4,000
Rs 6,000 and Rs 6,000

Answer :C
Discussion
2818.

A and BEnteredintopartnershipon 1stapril , 2018withoutany PartnershipDeed . Theyintroduced capitalsofRs. 5.00.000 and Rs, 3.00.000respectively,ON31stOctober , 2018,AadvancedRs. 2.00.000 as loanto thefirmwithoutanyagreementas tointerest . Profitand loss acoount for the year 31 stMArch 2019showeda profit ofRs. 4.30.000 butthepartnerscould notagree uponthe amountof interesto loanto becharged andthebasisfo divsion of profits. passa journal entryfordistribution of theprofitbetweenthepartnersandprepare capitalaccounts of boththeparthners anlossaccount Of A :

Answer»

Solution :
1, intereston A 's Loan =Rs.`xx(6)/(12)xx(6^(*))/(12)=Rs.5,000`

interest on loan is to be paid @6% p.a
SINCE there Isno agreemetn between partners A and B regarding interest on partestloan,theprovisions of indianpartners ACT ,1932 will apply it prescribes that intereston patner's Loanis a chargeagainst theprofithenxe , shouldbe debioted the PROFIT and Loss Account.
2. netprofit after interest On A's Loan`=RS, 4,30,000 -Rs, 5,000 =Rs, 4,25,000,`whichis shared equally becausethe profit -sharing RATIO is not given .
Discussion
2819.

A and B arepartnersin abusnessand their capitals at theendoftheyearwereRs. 7,00,000 andRs. 60,000respectively .Calculatetheiropeningcapitalsconsideringthe followinginformation : (a)Drawing of Aand Bfor theyearwereRs. 75,000 andRs. 50,000 respectively . (b)B introducedcapitalof Rs.1,00,000 During the year . (c)intereston capitalsto thecapitalaccountsof aAnd BwereRs. 15,000 and10,000 Respectively . (d)interestOn drawings Debitedto thecapitalAccountsOf AandBwereaRs. 7,500 and Rs. 5,000Respectively . (e) shareof lossdebitedto capital Accountof eachpartner was Rs. 20,000.

Answer»

SOLUTION :
Discussion
2820.

A, B and C are partners in a firmshraingprfits in the ratio of 3:3:2. Theydecide to share profits equallyw.e.f. 1st April , 2019. On thatdate, General Reserveshowed credit balanceof ₹72,000. Instead of distributing the GeneralResrve, itwas decided to record an adjustemententryreflectingthe change in the profit-sharing ratio. Pass Journal entryto give effect to the same.

Answer»

Solution :
`{:(,,("A"),("B"),("C")),(("i"),"Their Old share", 3//8,3//8,2//8),(("II"), " Their New Share", 1//3,1//3,1//3),(("III"),"SACRIFICE/(Gain)(i-ii)",1//24("Sacrifince"),-1//24("Sacrifince"),-2//24("Gain")):}`
Dueto change in profit-sharing ratiothere is a gainpf `2//24th` to C but A and B sacrifince `1//12th` eachformtheir shares. Hence,CapitalAccounts of A and Bshouldbe credited each by `1/24th` of thebalancein General RESERVE, i.e.,`1//24 xx ₹72,000 = ₹3,000` each and C'sCapitalAccountshouldbe debited by ₹6,000.
Discussion
2821.

A, Band Care partnersina firmsharingprofitsin theratioof 3:2:1theyearneda profitof Rs.30,000duringhe yearended31stMarch , 2019Distributeprofitamoung A,B And Cif : (a)C'sshareof profitis guranteedto bebe Rs. 6,000is guranteed by A . ( B)minimumprofitpayableisguaranteedto beRs. 6,000minimum. ( C)Guarnateedminimum profitofRs. 6,000payableto C is guarnateedby B.( D)ANy deficiency after making paymentof guranteedR.6,000 willbe borne byA and Bin theratio OF 3:1

Answer»


ANSWER :A-RS 14,400 ;B-rs. 9,600 ANDC -rs. 6,000 (B)A-Rs. 14,000 ;b-Rs. 10,000 and C-Rs. 6,000
(C ) A-Rs, 15,000 ;B-Rs. 9,000andC- RS. 6,000 ;(d) S- Rs. 14,250 ;B= rs. 9,750 andC- 6,000
Discussion
2822.

A firm makes credit revenue from operations of Rs. 2,40,000 during the year. If the trade receivables turnover ratio is 8 times, calculate closing debtors, if the closing debtors are more by Rs. 6,000 than the opening debtors :

Answer»

RS. 33,000
Rs. 36,000
Rs. 24,000
Rs. 27,000

Answer :A
Discussion
2823.

A firm is compulsorily dissolved when all partners or when all except one partner become involvent.

Answer»


ANSWER :A
Discussion
2824.

A Bill of Exchange as well as promissory Note requires acceptance " comment .

Answer»

Solution :A BILL of Exachage requies acceptance because it is ORDER instrument ,while a promissry NOTE does not REQUIRE acceptance because it is a PROMIS.
Discussion
2825.

A and B are partners in a firm sharing profits and losses in the ratio 3:1. They admit C for 1/4th share on 31st March, 2014 when their Balance sheet was as follows: The following adjustments were agreed upon: (a) C brings inRs 16,000 as goodwill and proportionate capital. (b) Bad debts amounted toRs 3,000. (c) Market value of investment isRs 4,500. (d) Liability on account of Workmen Compensation Reserve amounted toRs 2,000. Prepare Revaluation Account and Partners' Capital Accounts.

Answer»


ANSWER :LOSS on Revaluation-Rs1,000; PARTNERS' CAPITAL A/cs : A-Rs39,450; B-Rs30,150; C -Rs23,200.
Discussion
2826.

A partnership firm earned net profits during the past three years as follows: Capital investment in the firm throughout the above-mentioned period has been Rs. 4,00,000. Having regard to the risk involved 15% is considered to be a fair return on the capital. The remuneration of the partners during this period is estimated to be Rs. 1,00,000 p.a. Calculate value of goodwill on the basis of two years' purchase of average super profit earned during the above-mentioned three years.

Answer»


ANSWER :GOODWILL - RS. 80,000.
Discussion
2827.

A and Bare partners A'scapital is Rs. 1,00,000 and B'scapitalis Rs. 60,000 intereston capitalis payable@6% p.a B is getsalaryof Rs, 3,000per profitfor theyear is Rs. 80,000. Prepaneprofitand Lossappropriationaccount.

Answer»


ANSWER :SHARE of profitA-RS.17,200;B -Rs, 17,200
Discussion
2828.

A company's current liabilities decreased from Rs. 4,00,000 to Rs. 3,00,000 What is the percentage of change ?

Answer»

`25%`
`33.3%`
`20%`
`40%`

ANSWER :A
Discussion
2829.

A, B andC are partners sharing profit and losses in the ratio of2 : 2 : 1 . B retires from the firm , at that time goodwill of the firm was valued at Rs.30.000 . What contribution has to be made by A and C in order to pay B ?

Answer»

RS. 20,000 and Rs. 10,000
Rs. 15,000 and Rs. 15,000
Rs. 8,000 and Rs. 4,000
Rs. 6,000 and Rs. 6,000

Answer :C
Discussion
2830.

A and Bare partnerssharing profitsequallyA drewreguarly RS. 4,000 in thebeginningof every month forsix months ended30thsepember, 2019calculateintereston drawing @5%p.afora periedof sixmonths .

Answer»


ANSWER :INTERESTON drawings-rs. 350
Discussion
2831.

A, B and C were partners sharing profits and losses in the ratio of 2:2:1. Books are closed on 31st March every year. C dies on 5th November, 2018. Under the partnership deed, the executors of the deceased partner are are entitled to his share of profit to the date of death, calculated on the basis of last year's profit.Profit for the year ended 31st March, 2018 was Rs. 2,40,000. C's share of profit will be :

Answer»

RS. 28,000
Rs. 32,000
Rs. 28,800
Rs. 48,000

Answer :C
Discussion
2832.

(a) A company earns Gross Profit of 25% on cost. For the year ended 31st March, 2017 its Gross Profit was Rs. 5,00,000, Equity Share Capital of the company was Rs. 10,00,000, Reserves and Surplus Rs. 2,00,000, Long-termLoan Rs. 3,00,000 and Non-current Assets were Rs. 10,00,000.Compute the 'Working Capital Turnover Ratio' of the company.(b) Y Ltd.'s profit after interest and tax was Rs. 1,00,000. Its Current Assets were Rs. 4,00,000, Current Liabilities Rs. 2,00,000, Fixed Assets Rs. 6,00,000 and 10% Long-term Debt Rs. 4,00,000. The rate of tax was 20%. Calculate 'Return on Investment' of Y Ltd.

Answer»

Solution :(a) WorkingCapital Turnover Ratio = `("Revenue from Operations or Net Sales")/("Working Capital")`
`=("Rs. 25,00,000")/("Rs. 5,00,000")` = 5 Times.
Working Notes:
Let the cost = Rs. 100, Gross Profit = Rs. 25, Sales = Rs. 100 + Rs. 25 = Rs. 125
When Gross Profit is Rs. 25, Sales = Rs. 125
When Gross Profit is Rs. 5,00,000, Sales - Rs. 5,00,000 `xx` Rs. 125/Rs. 25
Revenue from Operations or Sales = Rs. 25,00,000.
2. Working Capital EMPLOYED - Non-current Assets
Or
(Equity Share Capital + RESERVES and Surplus + Long-term Loan) - Non-current Assets
= Rs. 10,00,000 + Rs. 2,00,000 + Rs. 3,00,000 - Rs. 10,00,000 = Rs. 5,00,000.
(B) Return on Investment = `("Net Profit before Interest and Tax")/("Capital Employed")xx100`
`=("Rs. 1,65,000")/("Rs. 8,00,000")xx100=20.63%`.
Working Notes:
Calculation of Net Profit before Interest and Tax:Rs.
Profit after interest and Tax (given)1,00,000
Profit after Interest but before tax (Rs. 1,00,000 `xx` 100/80)1,25,000
ADD: Interest on Long-term DEBT (10% of Rs. 4,00,000)40,000
Net Profit before Interest and Tax1,65,000
2. Capital Employed = Current Assets + Fixed Assets - Current Liabilities
= Rs. 4,00,000 + Rs. 6,00,000 - Rs. 2,00,000 = Rs. 8,00,000.
Discussion
2833.

A and Bhavecapitalsof Rs.4,00,000 andRs. 2,00,000 respectivleyand intereston capitalis to beallowed@ 6% p.atheir profit - sharing ratio is 2:3 and net pfofit, i.e.,profit (beforeinterest )for theyearis Rs. 30,000showtherelevantaccount toallocateintereston capials (i)if thepartnership Deed provides for interest on capital ,and(ii)if thepartnership Deedprovoides forinterestas acharge .

Answer»

Solution :(i) whenpartnership Deedprovidesforintereston capital :
Woking NOTE :-theintereston A's capital is RS. 24,00 and Rs. 12,000respectively Thus , totalinterestcomesto Rs. 36,000: profitbeforeinterestis ONLYRS. 30,000theintereston capitalswill as follows :
`A=(Rs. 30,00xxRs. 24,000)/(Rs. 36,000)=Rs. 20,000,B (Rs. 30,000xx12,000)/(Rs.36,000)=Rs.10,000`
Remember: intereston capital is chargeableto afirm totheextentofaviailableprofitonly, sinceintereston capitalsis anappropriationofprofit .
(ii)Whenpartnership Deedprovidesfor INTEREST asa charge :

note :interestas achagemeansintereston capitalis tobeallowedwhetherthefirm hasearnedprofitorincurred loss .profitand lossappropriatonaccount shouldnot bepreparedbecauseintereston captialsis treastedas achage againsttheprofitbeingless thanamount of intereston capital,deficitis treatedas a loss.
Discussion
2834.

A, B and c are partners sharing profit of loss in the ratio of 3:2:1. B retires and after B's retirement A and C agreed to share profit or loss in the ratio of 3:2 in future. Their gaining ratio will be:

Answer»

`3:1`
`1:3`
`3:7`
NONE of the Above

ANSWER :C
Discussion
2835.

A and B share profits and losses in the ratio of 4:3. They C will 3/7th share, which he gets 2/7th from A and 1/7th from B. What is the new profit-sharing ratio?

Answer»

SOLUTION :A's NEW Share: 4/7-2/7, B's New Share: 3/7-1/7=1/7=2/7, Cs Share = 3/7. THUS, New Profit-sharing Ratio of A,B and C is `2:2:3.`
Discussion
2836.

A, B and C are partners, sharing profits and losses in 3 : 2 : 1, B died, the firm decided to value goodwill on the basis of 3 year's purchase of average of 5 years' profits. The profits of the firm for the last five years before charging interest on capital are Rs 10,000, Rs 9,000, Rs 11,000, Rs 7,000 and Rs 8,000. The capital of the firm stood at Rs 50,000 and interest rate is 8%. What will be the share of goodwill of B?

Answer»

RS 10,000
Rs 15,000
Rs 21,000
None of these

Answer :D
Discussion
2837.

A Ltd. Issued 1,000, 10% debentures of .Rs 100 each at apremium of 5 % . What will be the total amount of interest for one year:

Answer»

`.RS 10,500`
`.Rs 10,000`
`.Rs 5,250`
`Rs 5,000`

ANSWER :B
Discussion
2838.

A and B are sharing profits and losses equally With effect from 1st April, 2019, they agree to share profits in the ratio of 4:3. Calculate individual partner's gain or sacrifice due to the change in ratio.

Answer»


Answer : A GAINS and B SACRIFICES `1//14`TH SHARE.
Discussion
2839.

A and Bare partnerswithcapitalsof Rs.60.000 and Rs.20.000respectivelyon 1stapril, 2018Netprofit(beforetakinginto - acoounttheprovisionsof the Deedforthe yearended31 stMarch2019 wasRs. 24.000 thepartnershp Deedprovides for thefollowing: (a)B isentitledto asalaryof Rs.6.00 P.a(b) intereston captialsis tobeallowed@ 6%p.a (c )intereston drawingis tobecharges @ 5%p.a thedrawingfo thepartnersA and BwereRs.6.000andRs. 4.000respectively andinterestondrawingfora beingRs. 200andfor B Rs. 100. Passthejournal enterisfor theandshowhowprofitwill bedividedbetweenA and Band alsoshowthecapitalaccounts of thepartners alongwiththeirDrawing,Accountsof thepartnessalongwiththeirDrawingaccounts : (i)if theyfixed,and (ii) if they arefluctuating .

Answer»

SOLUTION :
Discussion
2840.

A, B and C were partners in a firm. On 1st April, 2012 their capitals stood as Rs 5,00,000, Rs 2,50,000 and Rs 2,50,000 respectively. As per provisional of the Partnership Deed: (i) C was entitled for a salary of Rs 5,000 per month. (ii) A was entitled for a commission of Rs 80,000 p.a. (iii) Partners were entitled to interest on capital @6% p.a. (iv) Partners will share profits in the ratio of capitals. Net profit for the year ended 31st March, 2013 was Rs 3,00,000 which was distributed equally, without taking into consideratin the above provisions. Showing your workings clearly, pass necessary adjustment entry for the above.

Answer»

SOLUTION :
Discussion
2841.

A, B and C are equal partners in a firm. B retires and the remaining partners decide to share the profits of the new firm in the ratio of 5:4. Gainingratio will be:

Answer»

`1:1`
`1:2`
`2:1`
`5:4`

ANSWER :C
Discussion
2842.

A and Bare partnersin afirmsharingprofits and lossesin theratioof 3: 2Followingwas theBalancesheetof thefirmasat31 stMarach , 2018: Profit Rs. 30,000for theyear ended 31st March,2018 wasdividedbetweenthePArtnerswithoutallowing interestoncapitals@ 12% p.aand salarytoA @ Rs. 1,000 per month ,Duringthe yearA withdrew Rs. 10,000And BRs. 20,000 Passnecessaryadjustmentjournal entryandshow yourworkingClearly .

Answer»

SOLUTION :
Discussion
2843.

A company is in the business of trading in timber and also making furniture. Can it have different Operating Cycles for the two businesses?

Answer»


Solution :Yes, a company can have TWO different operating cycles for two businesses. It is so because the operating CYCLE is determined for each BUSINESS separately.
Discussion
2844.

A Company's Current Assets are Rs. 6,00,000 and working capital is Rs. 2,00,000. Its Current Ratio will be:

Answer»

`3:1`
`1.5:1`
`2:1`
`4:1`

ANSWER :B
Discussion
2845.

A , B and Cwerepartners, theircapitalswereA -Rs. 30,000 ,B -Rs. 20,000andRs. 10,000 respectivleyaccordingto thepartnershipDeedtheywereentitledto aninterest on capital@5%in additonB wasalsoentitledto drewa salaryof Rs,500 per monthC wasentitled to acommissionof 5%p,aonthe profitaftercharingthe intereston capitalbutbeforecharing thesalary payableto Bthe net profitfor the yearwere Rs. 30,000distributedin theratiocaptialswithoutproviding for any of theaboveadjustment thepassnecessary adjustmententry showing theworkings clerly .

Answer»


SOLUTION :it isassumed thatcapitalare FIXED .
Discussion
2846.

A and B arepartnerssharingprofitand Lossesin theratio of 3:1On 1st April, 2018 theircapitals were : A rs. 50,000 and B Rs. 30,000During the yearended31st March, 2019theyearneda netprofitfo Rs. 50,000Thetermsof partnership ar: (a)intereston capitalis tobe allowed@6% p.a (b)A willgeta commission@2%on turnover ( c) B willgeta salaryof Rs. 500per month . ( d)B willgetcommissionof 5%on profitafterdeductionof allexpensesincludingsuchcommissionpartnersdrawings for theyearwerea Rs.8,000and BRs. 6,000Turnoverfor theyearwasRs. 3,00,000afterconsidering theabovefactsyouarerequiredto prepare profitand lossappropriationaccountandpartners ' capital Account s.

Answer»


ANSWER :COMMISSIONOF B
Discussion
2847.

___________ are especially interested in the average payment period, since it provides them with a sense of the bill-paying patterns of the firm.

Answer»

CUSTOMERS
STOCKHOLDERS
Lenders and SUPPLIERS
Borrowers and buyers

Answer :C
Discussion
2848.

A, B and C are three parnters in the firm, sharing in the ratio 2 : 2 : 1. B retires from the firm on 31st March, 2019. The firm decides not to raise GoodwillAccount. What entry will be passed in the books at the time of retirement of B for the goodwill ?

Answer»

Dr. Goodwill A/c, Cr. B's Capital A/c
Dr. Goodwill A/c, Cr. A's, B's and C's Capital A/c
Dr. A's and C's Capital A/cs, Cr. B's Capital A/c (with B's share of Goodwill in GAINING RATIO)
None of the above

Answer :C
Discussion
2849.

A company issued 50,000 shares of Rs. 10 each for subscription . It received applications for 60,000 shares . It is a case of ___________.(ii) Acompany issued 50,000 Shares of Rs. 10 each forsubscription . It receives applications for 45,000 share, it is a case of ___________.(iii) A company issued 50,000 Shares of Rs. 10 each for subscription . it receives applicationsfor 40,000 sahres, it is a case of where____________ is not receives.(iv) Acompany issued 50,000 Shares of Rs. 10 each for subscription . it receives applications for40,000 shares , it cannot issue shares as it has not received __________.(v) Shares of Rs. 10 each on which Rs. 8 have been called and received will be shown as ___________.(vi) Shares of Rs. 10 each on which the company decides to call Rs.2 at the time of its winding up will be shown as __________.(vii) Shares are allotted on pro rata basis in thecase of _______. (viii) Shares are allotted to all theapplicants in the case of ________.(ix)A companymay receive calls in advance if its______________ soauthorises.(x)Shares are _____________ by a company , if it does notreceivethe called amount.(xi) Gain (profit) onreissue of forfeited shares is transferred to ____________.(xii)_____________ onreissue of forfeited shares cannot be more than the amount forfeited.(xiii) Sharescannot be issued at a discount except to employees as ___________.(xiv)A companymayissue shares for ____________ for purchase of assets.(xv)Shares issued to promoters in lieu of their services are categorised as shares issued for ________.(xvi) Preference shares can be issued for ____________ to promoters or for purchase of business or assets.(xvii)Preference shareholders have the preferential right to receive__________before it is paid on Equity Shares.(xix)Unlike __________ Preference shares , ____________ Preference shares are those shares on which dividend , if not paidin onepaid in later years.(xx) In a Balance Sheet , ___________ for __________ Share Capital and __________share Capital is shown separately.

Answer»


Solution :[(i)oversubscription; (ii) UNDERSUBSCRIPTION; (iii) minimum subscription; (iv) minimum subscription; (v) subscribed but not fully paid; (vi)Subscribed but not fully paid ' CAPITAL; (vii) oversubscription; (VIII) undersubscription; (ix) Articles of Association; (X) forfeited; (xi) Capital Reserve; (xii) DISCOUNT; (xiii) ESOPs; (xiv) consideration other than cash ; (xv) consideration other than cash ; (xvi) consideration other cash ; (xvii) dividend; (xviii) secured, assets; (xix) Cumulative,Non - cumulative; (xx) Authorised Capital , Equity , Preference.]
Discussion
2850.

A company has called and received Rs 8 against nominal (face) value of Rs 10 of the share. Will it be classified or shown as 'Subscribed and fully paid-up? Whay?

Answer»


SOLUTION :It will not be classified as 'Subscribed and FULLY Paid-up' but as 'Subscribed but Not Fully Paid-up' because the entire nominal capital is not called. HENCE, the share is not fully paid.
Discussion