Board Paper of Class 12-Commerce 2017 Accountancy Abroad(SET 1) - Solutions

State the two situations in which interest on partner's capital is generally provided.  (1) VIEW SOLUTION

Reena and Raman are partners in a firm sharing profits in the ratio of 4 : 3. They admitted Roma as a new partner. The new profit sharing ratio between Reena, Raman and Roma was 3: 2: 2. Raman surrendered $\frac{1}{3}\mathrm{rd}$ of his share in favour of Roma. Calculate Reena's sacrifice.   (1) VIEW SOLUTION

Suman and Sudha were partners in  a firm sharing profits equally. Their fixed capitals were Rs 50,000 and Rs 25,000 respectively. The partnership deed provided interest on capital at the rate of 12% per annum. For the year ended 31^st March, 2016, the profits of the firm were distributed without providing interest on capital.
Pass necessary adjustment entry to rectify the error.  (1) VIEW SOLUTION

Y Ltd. invited applications for issuing 2000, 9% debentures of Rs 100 each at a discount of 10%. The whole amount was payable at the time of application. Applications for 2400 debentures were received and pro-rata allotment was made to all the applicants.  
Pass necessary journal entries for the issue of debentures.  (1) VIEW SOLUTION

Z Ltd. forfeited 1000 equity shares of Rs 10 each for the non-payment of the final call of Rs 2 per share. Calculate the maximum amount of discount at which these shares can be reissued.   (1) VIEW SOLUTION

List the categories of individuals other than the minors who cannot become the members of a partnership firm.   (1) VIEW SOLUTION

Raj Motors Ltd. converted its 400, 12% debentures of Rs 100 each issued at a discount of 6% into equity shares of Rs 10 each issued at a premium of 25%. Discount on issue of 12% debentures had not yet been written off.

Showing your working notes clearly, pass necessary journal entries for the above transactions in the books of Raj Motors Ltd.   (3) VIEW SOLUTION

P, Q, R and S were partners in a firm sharing profits in the ratio of 5 : 3 : 1 : 1. On 1^st January, 2017, S retired from the firm. On S's retirement the goodwill of the firm was valued at Rs 4,20,000. The new profit sharing ratio between P, Q and R will be 4 : 3 : 3.
Showing your working notes clearly, pass necessary journal entry for the treatment of goodwill in the books of the firm on S's retirement.    (3) VIEW SOLUTION

C India Ltd. purchased machinery from B India Ltd. Payment to B India Ltd. was made as follows:
(i) By issuing 10,000 equity shares of Rs 10 each at a premium of 20%.
(ii) By issuing 1000, 9% debentures of Rs 100 each at a discount of 5%.
(iii) Balance by giving a bank draft of Rs 37,000.

Pass necessary journal entries in the books of C India Ltd. for the purchase of machinery and payment to B India Ltd.   (3) VIEW SOLUTION

Gagan Ltd. is registered with an authorised capital of Rs 15,00,00,000 divided into 1,50,00,000 equity shares of Rs 10 each. Subscribed and fully paid up share capital of the company was Rs 5,00,00,000. For providing employment to the local youth and for the development of rural areas of Jharkhand State, the company decided to set up a food processing unit in Hazaribagh. The company also decided to set up skill development centres at Ranchi, Hazaribagh and Ramgarh. To meet its new financial requirements the company decidded to issue 2,00,000 equity shares of Rs 10 each and 2000, 12% debentures of Rs 1,000 each. The issue of shares and debentures was fully subscribed. A shareholder holding 500 shares failed to pay the final call of Rs 3 per share.

Show the share capital in the Balance Sheet of the company as per the provisions of Schedule III of the Companies Act, 2013. Also, identify any two values that the company wants to propagate.    (3) VIEW SOLUTION

Pankaj and Naresh were partners in a firm sharing profits in the ratio of 3 : 2. Their fixed capitals were Rs 5,00,000 and Rs 3,00,000 respectively. On 1.1.2017, Saurabh was admitted as a new partner for $\frac{1}{5}\mathrm{th}$ share in the profits. Saurabh acquired his share of profit from Pankaj. Saurabh brought Rs 3,00,000 as his capital which was to be kept fixed like the capitals of Pankaj and Naresh.
Calculate the goodwill of the firm on Saurabh's admission and the new profit sharing ratio of Pankaj, Naresh and Saurabh. Also, pass necessary journal entry for the treatment of goodwill.   (4) VIEW SOLUTION

X, Y and Z were partners in a firm sharing profits in the ratio of 5 : 3 : 2. The firm closes its books on 31^st March every year. On 30.9.2016, Z died. The partnership deed provided that on the death of a partner his executors will be entitled to the following :    (4)

(i) Balance in his capital account and interest @ 12% per annum. On 1.4.2016 balance in Z's Capital account was Rs 80,000.

(ii) His share in the profits of the firm in the year of his death, which will be calculated on the basis of rate of net profit on sales of the previous year which was 25%. The sales of the firm till 30.9.2016 were Rs 4,00,000.

(iii) His share on the goodwill of the firm. The goodwill of the firm on Z's death was valued at Rs 3,00,000.

The partnership deed also provided that the following deductions will be made from the amount payable to the executor of the deceased partner:

(i) His drawing in the year of his death. Z has withdrawn Rs 30,000 till 30.9.2016.

(ii) Interest on drawing @ 12% per annum which was calculated as Rs 2,000.

The accountant of the firm prepared Z's Capital Account to be presented to his executor but in a hurry did not complete it. Z's Capital Account as prepared by the firm's accountant is presented below :
 

Dr.	Z’s Capital Account				Cr.
Date	Particulars	Amount (Rs)	Date	Particulars	Amount (Rs)
2016			2016
Sep. 30	……………	30,000	April 1	……………	80,000
Sep. 30	……………	2,000	Sep. 30	……………	4,800
Sep. 30	……………	……...	Sep. 30	……………	20,000
			Sep. 30	……………	……...
			Sep. 30	……………	……...
		1,64,800			1,64,800

 

You are required to complete Z's Capital Account. VIEW SOLUTION

Manu, Hary, Ali and Reshma were partners in a firm sharing profits in the ratio of 2 : 2 : 1 : 5. On 1.4.2016 their Balance Sheet was as follows:    (6)

Balance Sheet of Manu, Hary, Ali and Reshma as on 1.4.2016
Liabilities		Amount (Rs)	Assets	Amount (Rs)
Capitals:			Fixed Assets	8,00,000
Manu	2,00,000		Current Assets	2,40,000
Hary	2,50,000
Ali	1,50,000
Reshma	3,50,000	9,50,000
Sundry Creditors		45,000
Workmen Compensation Reserve		45,000
		10,40,000		10,40,000

From the above date partners decided to share future profits equally. For this purpose the goodwill of the firm was valued at Rs 40,000. The partners also agreed for the following:

(i) Claims against Workmen Compensation Reserve was estimated at Rs 50,000. Fixed assets were to be depreciated by 10%.

(ii) Capitals of the partners were to be adjusted according  to the new profit sharing ratio, for this necessary cash will be brought or paid.

Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm.

VIEW SOLUTION

On 1.4.2015 PPR Ltd. issued 1500, 10% debentures of Rs 100 each at a discount of 3%, redeemable at a premium of 8% after three years. The company closes its books on 31^st March every year. Interest on 10% debentures is payable on 30^th September and 31^st March. Rate of tax deducted at source is 10%.

Pass necessary journal entries for the issue of 10% debentures and interest for the year ended 31.3.2016.   (6) VIEW SOLUTION

Pass necessary journal entries on the dissolution of a firm in the following cases :  (6)

(i) Dissolution expenses were Rs 700.
 
(ii) Dissolution expenses Rs 1,100 were paid by partner 'A'.

(iii) Partner 'B' agreed to do the work of dissolution for a commission of Rs 2,000. He also agreed to bear the dissolution expenses. Actual dissolution expenses Rs 2,100 were paid by B.

(iv) Partner 'C' was appointed to look after the dissolution work for a remuneration of Rs 10,000. He also agreed to bear the dissolution expenses. Actual dissolution expenses Rs 9,800 were paid from the firm's bank account.

(v) Partner 'D' was appointed to look after the dissolution work for a remuneration of Rs 15,000. He also agreed to bear the dissolution expenses. Actual dissolution expenses Rs 13,000 were paid by partner 'E' on behalf of partner 'D'.

(vi) Partner 'F' was appointed to look after the process of dissolution for a remuneration of Rs 9,000. He also agreed to pay the dissolution expenses. 'F' took away furniture of Rs 9,000 as his remuneration. Furniture had already been transferred to realisation account. VIEW SOLUTION

A and Z are partners in a firm sharing profits in the ratio of 7 : 3. Their Balance Sheet as on 31.3.2016 was as follows was as follows:    (8)

Balance Sheet of A and Z as on 31.3.2016
Liabilities		Amount (Rs)	Assets	Amount (Rs)
Sundry Creditors		60,000	Cash	36,000
Provision for Bad Debts		6,000	Debtors	54,000
Outstanding Wages		9,000	Stock	60,000
General Reserve		15,000	Furniture	1,20,000
			Plant & Machinery	120,000
Capitals:
A	1,20,000
Z	1,80,000	3,00,000
		3,90,000		3,90,000

On the above date B was admitted for $\frac{1}{4}\mathrm{th}$ share in the profits on the following terms:
(i) B will bring Rs 90,000 as his capital and Rs 30,000 as his share of goodwill premium, half of which will be withdrawn by A and Z.
(ii) Debtors Rs 4,500 will be written off and a provision of 5% will be created on debtors for bad and doubtful debts.
(iii) Outstanding wages will be paid off.
(iv) Stock will be depreciated by 10%, furniture by Rs 1,500 and Machinery by 8%. N, S and G were partners in a firm sharing profits and losses in the ratio of 2 : 3 : 5. On 31.3.2016 their Balance Sheet was as under:

Balance Sheet of N, S and G as on 31.3.2016
Liabilities		Amount (Rs)	Assets		Amount (Rs)
Creditors		1,65,000	Cash		1,20,000
General Reserve		90,000	Debtors	1,35,000
Capitals:			Less Provision	15,000	1,20,000
N	2,25,000		Stock		1,50,000
S	3,75,000		Machinery		4,50,000
G	4,50,000	10,50,000	Patents		90,000
			Building		3,00,000
			Profit & Loss Account		75,000
		13,05,000			13,05,000

G retired on the above date and it was agreed that:
(i) Debtors of Rs 6,000 will be written off as bad debts and a provision of 5% on debtors for bad and doubtful debts will be maintained.
(ii) Patents will be completely written off and stock, machinery and building will be depreciated by 5%.
(iii) An unrecorded creditor of Rs 30,000 will be taken into account.
(iv) N and S will share the future profits in the ratio of 2 : 3 ratio.
(v) Goodwill of the firm on G’s retirement was valued at Rs 90,000.
Pass necessary journal entries for the above transactions in the books of the firm on G’s retirement. VIEW SOLUTION

BBG Ltd. invited applications for issuing 2,00,000 equity shares of Rs 10 each at a premium of Rs 10 per share. The amount was payable as follows:    (8)
 
The issue was fully subscribed. Raghu, a shareholder holding 1000 shares, failed to pay the allotment money and Rahim, another shareholder holding 1500 shares, paid his entire share money along with allotment. Raghu's shares were forfeited immediately after allotment. Afterwards, the first call was made Deenanath, a shareholder holding 500 shares, failed to pay the first call money and Dayal, a shareholder holding 600 shares, paid his second call money along with the first call. Deenanath's shares were forfeited immediately after the first call. Later on the second call was made which was duly received.

Pass necessary journal entries for the above transactions in the books of BBG Ltd.
 
Joy Ltd. invited applications for issuing 20,000 equity shares of Rs 10 each at par. The amount was payable as follows:
 
The issue was oversubscribed by three times. Applications for 20% shares were rejected and the money was refunded. Allotment was made to the remaining applicants as ffollows:
 

Category	No. of Shares Applied	No. of Shares Allotted
I	30,000	15,000
II	18,000	5,000

Excess money received with applications was adjusted towards sums due on allotment. Money in excess to sums due on allotment was adjusted towards sums due on first and final call and any money in excess to sums due on first and final call was refunded. Kavi, a shareholder who had applied for 600 shares, failed to pay the remaining allotment money and his shares were immediately forfeited. Kavi belonged to Category I.

Afterwards the first and final call was made. Gupta, who had applied for 400 shares, failed to pay the first and final call. Gupta also belonged to Category I.

Shares of Gupta were also forfeited after the first and final call. The forfeited shares were reissued at Rs 12 per share fully paid up.

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