Board Paper of Class 12-Commerce 2011 Accountancy Delhi(SET 1) - Solutions

What is the basis for preparing an Income and Expenditure Account in the case of Not-for-Profit Organisation.

Distinguish between Fixed and Fluctuating Capitals Accounts.

State the two main rights that a newly admitted partner acquires in the firm.

How does the market situation affect the value of goodwill of a firm?

Pass the necessary Journal entry when 10,000 debentures of Rs 100 each are issued as collateral security against a Bank loan of Rs 8,00,000

From the following information of a club show the amounts of match expenses and match fund in the Financial Statement of the Club for the year ended on 31^st March, 2009 and 31^st March, 2010.

Y Ltd. purchased furniture costing Rs 1,35,000 from AB Ltd. The payment was made by issue of Equity Shares of Rs 10 each at a discount of Re 1 per share. Pass necessary Journal entries in the books of Y Ltd.

X Ltd. redeemable 100, 6% Debentures of Rs 100 each by converting them into Equity Shares of Rs 100 each. The 6% Debentures were redeemable at 10% premium for which the Equity Shares were issued at 25% premium. Pass the necessary Journal entries for the redemption of above mentioned debentures in the books of X Ltd.

A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. The following was the Balance Sheet of the firm as on 31 3-2010.

The profits Rs 30,000 for the year ended 31-3-2010 were divided between the partners without allowing interest on capital @ 12% p.a. and salary to A @ Rs 1,000 per month. During the year A withdrew Rs 10,000 and B Rs 20,000.

Pass the necessary adjustment journal entry and show your working clearly.

A business has earned average profits of Rs 1,00,000 during the last few years and the normal rate of return in similar business is 10%.

Find out the value of Goodwill by

(i) Capitalisation of super profit method and

(ii) Super profit method if the goodwill is valued at 3 years purchase of super profit.

The assets of the business were Rs 10,00,000 and its external liabilities Rs 1,80,000.

Pass the necessary Journal entries of the issues and redemption of Debentures in the following cases:

(i) 10,000, 10% Debentures of Rs 120 each issued at 5% premium, repayable at par.

(ii) 20,000, 9% Debentures of Rs 200 each issued at 20% premium, repayable at 30% premium.

From the following items of Receipts and Payments Account of Young Ladies Club, prepare an Income and Expenditure Account for the year ended 31-3-2010.

Additional Information:

Subscriptions in arrears on 31-3-2010 were Rs 8,000 and half year’s interest on loan was also outstanding.

Pass the necessary Journal entries for the following transaction on the dissolution of the firm of P and Q after the various assets (Other than cash) and outside liabilities have been transferred to Realisation Account.

(i) Bank Loan Rs 12,000 was paid.

(ii) Stock worth Rs 16,000 was taken over by Partner Q.

(iii) Partner P paid a creditor Rs 4,000

(iv) An assets not appearing in the books of accounts realized Rs 1,200.

(v) Expenses of realisation Rs 2,000 were paid by partner Q.

(vi) Profit on realization Rs 36,000 was distributed between P and Q in 5 : 4 ratio.

On 1^st April, 2008 a company made an issue of Rs 2,00,000, 6% Debentures of Rs 100 each, repayable at a premium of 10%. The terms of issue provided for the redemption of 400 debentures every year starting from the end of 31-3-2010 either by purchase from the open market or by draw of lots at the company’s option.

On 31-3-2010, the company purchased for cancellation 300 debentures at 95% and 100 debentures at 90%.

Pass the necessary Journal entries for the issue and redemption of debentures assuming that the company had already created the

Debentures Redemption Reserve A/c by the require amount.

X Ltd. issued 40,000 Equity shares of Rs 10 each at a premium of Rs 2.50 per share.

The amount was payable as follows:

On Application- Rs 2 per share

On Allotment- Rs 4.50 per share (Including premium) and on call- 6 per share

Owing to heavy subscription the allotment was made on pro-rata basis as follows:

(a) Applicants for 20,000 shares were allotted 10,000 shares.

(b) Applicants for 56,000 shares were allotted 14,000 shares.

(c) Applicants for 48,000 shares were allotted 16,000 shares.

It was decided that excess amount received on applications would be utilized on allotment and the surplus would be refunded.

Ram to whom 1,000 shares were allotted, who belongs to category (a), failed to pay allotment money. His share were forfeited after the call.

Pass the necessary Journal entries in the books of X Ltd. for the above transaction.

OR

Given Journal entries to record the following transaction of forfeiture and re-issue of shares and open share forfeited account in the books of the respective companies.

(i) C Ltd. forfeited 1,000 shares of Rs 100 each issued at a discount of 8%. On these shares the first call of Rs 30 per share was not received and the final call of Rs 20 per share was yet to be called. These shares were subsequently re-issued at Rs 70 per share Rs 80 paid up.

(ii) L Ltd. forfeited 470 equity share of Rs 10 each issued at a premium of Rs 5 per share for non-payment of allotment money of Rs 8 per share (including share premium Rs 5 per share) and the first and final call of Rs 5 per share. Out of these 60 Equity share were subsequently re-issued at Rs 14 per share.

M, N and O were partners in a firm sharing profit and losses equally. Their Balance Sheet on 31-12-2009 was as follows:

N died on 14^th March, 2010. According to the Partnership Deed, executors of the deceased partner are entitled to:

(i) Balance of partners’ capital account.

(ii) Interest on capital @ 5% p.a.

(iii) Share of goodwill calculated on the basis of twice the average of past three year’s profits and

(iv) Share of profits from the closure of the last accounting year till the date of death on the basis of twice the average of three completed year’s profit before death.

Profits for 2007, 2008 and 2009 were Rs 80,000, Rs 90,000, Rs 1,00,000 respectively. Show the working for deceased partners’ share of goodwill and profits till the date of his death. Pass the necessary journal entries and prepare N’s Capital Account to be rendered to his executors.

OR

On 31-3-2010 the Balance Sheet of W and R who shared profits in 3 : 2 ratio was as follows:

On this date B was admitted as a partner on the following conditions:

(a) ‘B’ will get 4/15^th share profits.

(b) ‘B’ had to bring Rs 30,000 as his capital to which amount other Partners capital shall have to be adjusted.

(c) He would pay cash for his share of goodwill which would be based on 2½ years purchase of average profits of past 4 years.

(d) The assets would be revalued as under:

Sundry debtors at the book value less 5% provision for bad debts. Stock at Rs 20,000, Plant and Machinery at Rs 40,000.

(e) The profits of the firm for the years 2007, 2008 and 2009 were Rs 20,000; Rs 14,000 and Rs 17,000 respectively.

Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the new firm.