Board Paper of Class 12-Commerce 2014 Accountancy Abroad(SET 1) - Solutions

X,Y and Z are partners sharing profits in the ratio of $\frac{1}{2}, \frac{3}{10}\mathrm{and} \frac{1}{5}$. Calculate the gaining ratio of remaining partners when Y retires from the firm. VIEW SOLUTION

Distinguish between dissolution of partnership and partnership firm on the basis of  'Settlement of assets and liabilities'. VIEW SOLUTION

Why does a firm revalue its assets and reassess its liabilities on retirement or death of a partner? VIEW SOLUTION

Why is 'Realisation Account' prepared? VIEW SOLUTION

When can a company forfeit the shares held by a shareholder? VIEW SOLUTION

Give the meaning of 'Share Capital'. VIEW SOLUTION

What is meant by issue of debentures as collateral security? VIEW SOLUTION

Bhuwan and Shivam were partners in a firm sharing profits in the ratio of 3 : 2. Their capitals were Rs 50,000 and Rs 75,000 respectively. They admitted Atul on 1^st April, 2013 as a new partner for 1/4^th share in the future profits. Atul bought Rs 75,000 as his capital. Calculate the value of goodwill of the firm and record necessary journal entries for the above transactions on Atul's admission. VIEW SOLUTION

Vishesh Ltd. issued 10,000, 10% Debentures of Rs 100 each on 1^st April, 2012. The issue was fully subscribed. According to the terms of issue, interest on debentures is payable half-yearly on 30^th September and 31^st March and tax deducted at source is 10%.
Pass the necessary journal entries related to the debentures interest for the half-yearly ending on 31^st March, 2013 and transfer of interest on debentures for the year to Statement of Profit and Loss. VIEW SOLUTION

Pass necessary journal entries in the following cases:

(i) Kim India Ltd. converted 1,000, 9% debentures of Rs 100 each issued at a discount of 10% into equity shares of Rs 100 each issued at a premium of 25%.

(ii) Sonali Ltd. redeemed 6,000, 12% debentures of Rs 100 each which were issued at a discount of Rs 10 per debentures by converting them into equity shares of Rs 100 each, Rs 90 paid up. VIEW SOLUTION

Karam Singh and Suleman decided to start a partnership firm to manufacture low cost paper bags from the waste paper as plastic bags were creating many environmental problem. For this, they contributed capitals of Rs 2,00,000 and Rs 1,00,000 respectively on 1st April, 2012. Suleman also expressed his willingness to admit Inderjeet as a partner without capital in the firm. Inderjeet is specially abled but a very creative and intelligent friend of his. Karam Singh agreed to this. The terms of partnership were as follows:

(i) Karam Singh, Suleman and Inderjeet will share profit in the ratio of 2 : 2 : 1.
(ii) Interest on capital will be provided @6% p.a

Due to shortage of capital, Karam Singh contributed Rs 50,000 on 30th September, 2012 and Suleman contributed Rs 20,000 on 1st January 2013 as additional capital. The profit of the firm for the year ended 31st March, 2013 was Rs 2,00,300.

(a) Identify any two values which the firm wants to communicate to the society.
(b) Prepare Profit and Loss Appropriate Account of the firm for the year ending 31st March, 2013. VIEW SOLUTION

Manika, Nishtha and Sakshi were partners in a firm sharing profits in the ratio of 2 : 2 : 1 respectively. On 31st March, 2013 their Balance Sheet was as under:
 

Balance Sheet as on 31st March, 2013
Liabilities		Amount Rs	Assets	Amount Rs
Capitals:			Fixed Assets	3,60,000
Manika	2,80,000		Debtors	2,80,000
Nishtha	3,00,000		Stock	1,30,000
Sakshi	1,00,000	6,80,000	Cash	4,60,000
Reserve Fund		3,00,000
Creditors		2,50,000
		12,30,000		12,30,000

Sakshi died on 1st July, 2013. It was agreed between her executors and the remaining partners that:

(a) Goodwill of the firm be valued at 3 years' purchase of average profits for the last three years. The average profits were Rs 5,00,000.
(b) Interest on capital be provided at 12% p.a.
(c) Her share in the profits upto the date of death will be calculated on the basis of average profits for the last three years.

Prepare Sakshi's Capital Account as on 1st July, 2013. VIEW SOLUTION

On 1st April, 2012, Khanna Ltd. was formed with an authorised capital of Rs 20,00,000 divided into 2,00,000 equity shares of Rs 10 each. The company issued prospectus inviting applications for 1,80,000 equity shares. The company received applications for 1,70,000 equity shares. During the first year, Rs 8 per share were called, Shikha holding 2,000 share and Poonam holding 4,000 shares did not pay the first call of Rs 2 per share. Poonam's shares were forfeited after the first call and later on 3,000 of the forfeited shares re-issued at Rs 6 per share, Rs 8 called up.

Show the following:
(a) 'Share Capital' in the Balance sheet of the company as per revised Schedule VI Part I of the Companies Act, 1956.
(b) Also prepare 'Notes to Accounts'. VIEW SOLUTION

Pass necessary journal entries for the following transactions in the books of Sewak Ltd.:

(i) Sewak Ltd. acquired assets of Rs 5,00,000 and liabilities of Rs 3,00,000 of Goodwill Ltd. for a purchase consideration of Rs 1,35,000. Payment to Goodwill Ltd. was made by issuing equity shares of 10 each at a discount of 10%.

(ii) Purchase furniture of Rs 5,00,000 from Ramprastha Ltd. The payment to Ramprastha Ltd. was made by issuing equity shares of Rs 10 each at a premium of 25%. VIEW SOLUTION

Anil, Vineet and Vipul were partners in a firm manufacturing food items. They were sharing profits in the ratio of 5 : 3 : 2. Their capitals on 1^st April, 2012 were Rs 4,00,000, Rs 5,00,000 and 9,00,000 respectively. After the floods in Uttranchal, all partners decided to help the flood victims personally.

For this Anil withdrew Rs 30,000 from the firm in 30th September, 2012. Vineet instead of withdrawing cash from the firm took some food items amounting to Rs 25,000 from the firm and distributed those to flood victims. On the other hand, Vipul withdrew Rs 2,50,000 from his capital on 1^st January, 2013 and built a shelter-home to help flood victims.

The partnership deed provides for charging interest on drawings @6% p.a. After the final accounts were prepared it was discovered that interest on drawings had not been charged. Give the necessary adjusting entry and show the working notes clearly. Also state any two values that the partners wanted to communicate to the society. VIEW SOLUTION

Ramesh and Umesh were partners in a firm sharing profits in the ratio of their capitals. On 31st March, 2013 their Balance Sheet was as follows:On the above data the firm was dissolved.

Balance Sheet of Ramesh and Umesh as on 31st March, 2013
Liabilities		Amount Rs	Assets	Amount Rs
Creditors		1,70,000	Bank	1,10,000
Workmen’s Compensation Fund		2,10,000	Debtors	2,40,000
General Reserve		2,00,000	Stock	1,30,000
Ramesh’s Current Account		80,000	Furniture	2,00,000
Capitals:			Machinery	9,30,000
Ramesh	7,00,000		Umesh’s Current Account	50,000
Umesh	3,00,000	10,00,000
		16,60,000		16,60,000

(i) Ramesh took over 50% of stock at Rs 10,000 less than book value. The remaining stock was sold at a loss of Rs 15,000. Debtors were realised at a discount of 5%.
(ii) Furniture was taken over by Umesh for Rs 50,000 and machinery was sold for Rs 4,50,000.
(iii) Creditors were paid in full.
(iv) There was an unrecorded bill for repairs for Rs 1,60,000 which was settled at Rs 1,40,000.

Prepare Realisation Account. VIEW SOLUTION

Kalpana and Kanika were partners in a firm sharing profits in the ratio of 3 : 2. On 1^st April, 2013 they admitted Karuna as a new partners for 1/5th share in the profits of the firm. The Balance Sheet of Kalpana and Kanika as on 1st April, 2013, was as follows:

Balance Sheet of Kalpana and Kanika as on 1st April, 2013
Liabilities		Amount Rs	Assets		Amount Rs
Capitals			Land and Building		2,10,000
Kalpana	4,80,000		Plant		2,70,000
Kanika	2,10,000	6,90,000	Stock		2,10,000
General Reserve		60,000	Debtors	1,32,000
Workmen’s Compensation Fund		1,00,000	Less: Provision	–12,000	1,20,000
Creditors		90,000	Cash		1,30,000
		9,40,000			9,40,000

It was agreed that
(i) the value of Land and Building will be appreciated by 20%.
(ii) the value of plant be increased by Rs 60,000.
(iii) Karuna will bring Rs 80,000 for her share of goodwill premium.
(iv) the liabilities of Workmen's Compensation Fund were determined at Rs 60,000.
(v) Karuna will bring in cash as capital to the extent of ${\frac{1}{5}}^{\mathrm{th}}$ share of the total capital of the new firm.

Prepare Revaluation Account, Partner's Capital Accounts and Balance Sheet of the new firm.
 
P, Q and R were partners in a firm sharing profit in the ratio of 7 : 2: 1. On 1^st April, 2013 their Balance Sheet was as follows:
 

Balance Sheet of P, Q and R as on 1st April, 2013
Liabilities		Amount Rs	Assets		Amount Rs
Capitals:			Land		12,00,000
P	9,00,000		Building		9,00,000
Q	8,40,000		Furniture		3,60,000
R	9,00,000	26,40,000	Stock		6,60,000
General Reserve		3,60,000	Debtors	6,00,000
Workmen’s Compensation Fund		5,40,000	Less provision	–30,000	5,70,000
Creditors		3,60,000	Cash		2,10,000
		39,00,000			39,00,000

On the above data Q retired.
The following were agreed:
(i) Goodwill of the firm was valued at Rs 12,00,000.
(ii) Land was to be appreciated by 30% and Building was to depreciated by 3,00,000.
(iii) Value of furniture was to be reduced by Rs 60,000.
(iv) The liabilities for Workmen's Compensation Fund were determined at Rs 1,40,000.
(v) Amount Payable to Q was transferred to his loan account.
(vi) Capitals of P and R were to be adjusted in their new profit sharing ratio, For this purpose current accounts of the partners will be opened.

Prepare Revaluation Account, Partner's Capital Accounts and the Balance Sheet of the new firm. VIEW SOLUTION

LCM Ltd. invited applications for issuing 2,00,000 equity shares of Rs 10 each at a premium of Rs 3 per share. The amount was payable as follows:

On application and allotment – Rs 8 per share (including premium)
On first and final call – the balance amount.

Applications for 3,00,000 share were received. Applications for 50,000 shares were rejected and money refunded. Shares were allotted on pro-rata basis to the remaining applicants. First and final call was made as was duly received except on 2,500 share applied by Kanwar. His shares were forfeited. The forfeited shares were re-issued at Rs 7 per share fully paid up.

Pass necessary journal entries for the above transactions in the books of the company.
 
HCF Ltd. invited applications for issuing 75,000 equity shares of Rs 10 each at a discount of 10%. The amount was payable as follows:
On application and allotment – 4 per share
On first and final call – the balance amount.

Applications for 2,00,000 share were received. Applications for 50,000 shares were rejected and money refunded. Shares were allotted on pro-rata basis to the remaining applicants. The first and final call was made and was duly received except on 1,500 share applied by Raja. His share were forfeited. The forfeited shares were re-issued at maximum discount permissible under law.

Pass necessary journal entries for the above transactions in the books of the company. VIEW SOLUTION