Board Paper of Class 12-Commerce 2009 Accountancy Delhi(SET 1) - Solutions

When the Receipts and Payments Account is converted into an Income and Expenditure Accounts, an accounting concept is to be followed for the provision of the Accruals and Outstanding. Name the concept that is followed.

Can a partner be exempted from sharing the losses in a firm? If yes, under what circumstances?

Why should a firm have a partnership deed?

How is interest on drawings calculated, if the drawings are made at regular intervals, as on the first day of each month?

Why would an investor prefer to invest in the debentures of a company rather than in its shares?

From the following information calculate the amount of subscription to be credited to the Income and Expenditure Accounts for the year 2007-08.

Subscriptions of Rs 12,000 are still in arrears for the year 2006-07

The Director of a Company forfeited 200 shares of Rs 10 each issued at a premium of Rs 3 per share, for the non-payment of the first call money of Rs 3 per share. The final call of Rs 2 per share has not been made. Half the forfeited shares were re-issued at Rs 1,000 fully paid. Record the Journal entries for the forfeiture and re-issue of shares.

Meena Ltd. issued 60,000 shares of Rs 10 each at a premium of Rs 2 per share payable of Rs 3 on application, Rs 5. (including premium) on allotment and the balance on 1^st and final call. Application were received for 1,02,000 shares. The Directors resolved to allot as follows:

Nikhil who had applied for 1,000 shares in category A, and Vish who was 600 shares in category B failed to pay the allotment. allotted B failed to pay the allotment money. Calculate the amount received on allotment.

A, B and C were partners in a firm having capitals of Rs 60,000; Rs 60,000 and Rs 80,000 respectively. Their current account balance were A : Rs 10,000; B : Rs 5,000 and C : Rs 2,000 (Dr.). According to the partnership deed the partners were entitled to an interest on capital @5% p.a. C being a working partner was also entitled to a salary of Rs 6,000 p.a. The profits were to be divided a follows:

(a) The first Rs 20,000 in proportion to their capitals

(b) Next Rs 30,000 in the ratio of 5 : 3 : 2

(c) Remaining profits to be shared equally

The firm made a profit or Rs 1,56,000 before charging any of the above items. Prepare the profit and Loss Appropriation Accounts and pass necessary journal entry for apportionment of profit.

(a) A and B are partners in the ratio of 5 : 4. They admit C of 1/10^th share, which he acquired in equal proportions from both. Find the new profit sharing ratio.

(b) A, B and C were partners in a firm sharing profits in the ratio of 8 : 4 : 3. B retires and his share is taken up equally by A and C.

Find the new profit sharing ratio.

Mona Ltd. has issued 20,000, 9% Debentures of Rs 100 each of which half the amount is due for redemption on March 31^st 2008. The company has in its Debentures Redemption Reserve Account a balance of Rs 4,40,000. Record the necessary journal entries at the time of redemption of debentures.

The following is the Receipts and Payment Account of Queen’s Club for the year ended.

The following additional information is provided:

(a) Subscription includes Rs 12,000 for 2006-07 and Rs 18,000 for 2008-09.

(b) Stock of stationery on 31^st March, 2007 and 2008 was Rs 7,200 and Rs 5,400 respectively.

(c) Stock of Sports Materials at the beginning and end of the year was Rs 12,000 and Rs 21,000 respectively.

(d) Rent includes Rs 4,000 paid for March 2007. Rent of March, 2008 is outstanding

(e) Telephone expenses include Rs 3,000 as quarterly rent up to May 31^st 2008.

(f) The value of Building as on 31^st March 2007, was Rs 8,00,000 and you are required to write off depreciation at 10%.

(g) The value of investment on 31^st March, 2007 was Rs 10,00,000 and the club made similar additional investment during the year 1^st

October, 2007.

You are required to prepare the Income and Expenditure Account of the club for the year ended March 31^st 2008.

X, Y and Z were partners sharing profits in the ration 3 : 2 : 1. On 31^st March, 2008 their Balance Sheet stood as under:

Z died on May 31^st 2008. It was agreed that:

(a) Goodwill was valued at 3 years’ purchase of the average profits of the last five years, which were 2003: Rs 40,000; 2004: Rs

40,000; 2005: Rs 30,000; 2006: Rs 40,000 and 2007: Rs 50,000

(b) Machinery was valued at Rs 70,000, Patents at Rs 20,000 and Building at Rs 66,000

(c) For the purpose of calculating Z’s share of profits till the date of death, it was agreed that the same be calculated based on the average profits for the last 2 years.

(d) The executor of the deceased partner is to be paid the entire amount due by means of a cheque.

Prepare Z’s Capital Account to be rendered to the executor and also a Journal entries for the settlement of the amount due to Z’s executors.

(a) Mohit Ltd. took over assets of Rs 8,40,000 and liabilities of Rs 80,000 of Ram Ltd. at an agreed value of Rs 7,20,000. Mohit Ltd. paid to Ram Ltd., by issue of 9% debentures of Rs 100 each at a premium of 20%

Pass necessary journal entries to record the above transaction in the books of Mohit Ltd.

(b) Give Journal entries in each of the following cases if the face value of a debentures is Rs 100.

(i) A debenture issued at Rs 110 repayable at Rs 100

(ii) A debenture issued at Rs 100 repayable at Rs 105

(iii) A debenture issued at Rs 105 repayable at Rs 105.

A. Co. issued to the public for subscription 40,000 shares of Rs 10 each at a discount of 10% payable as Rs 2 each on application, allotment and first call and Rs 3 on the final call. Applications were received for 60,000 shares and allotment was made on pro-rata to 80% of applicants. R to whom 1,600 shares were allotted paid only the application money, and S who had applied for 2,400 shares paid the entire call money due along with the allotment. Pass necessary Journal entries to record the above transactions.

OR

Pertromax Ltd. issued 50,000 shares of Rs 10 each at a premium of Rs 2 per share payable as Rs 3 on application Rs 5 including premium on allotment and the balance in equal installments over two calls. Applications were received for 92,000 shares and the allotment was done as under:

Suresh who had applied for 2,000 shares (Category A) did not pay any money other than application money.

Chandar who was allotted 800 shares (Category B) paid the call money due along with allotment.

All other allottees paid their dues as per schedule.

Pass necessary journal entries in the books of Perteromax Ltd. record the above.

Jain and Gupta were partners sharing profits in the ratio of 3 : 2. Their Balance Sheet on March 31^st 2008 was as follows:

They agreed to admit Mishra for 1/4^th share from 1-4-2008 subject to the following term:

(a) Mishra to bring in capital equal to 1/4^th of the total capital of Jain and Gupta after all adjustment including premium for goodwill.

(b) Building to be appreciated by Rs 14,000 and Stock to be depreciated by Rs 6,000.

(c) Provision of Bad debts on Debtors to be raised to Rs 1,000

(d) A Provision to be made for Rs 1,800 for outstanding legal charges.

(e) Mishra’s share of goodwill/premium was calculated at Rs 10,000

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

OR

A, B and C were in partnership sharing profits in proportions to their capitals. Their Balance Sheet on 31-3-2008 was as follows:

On the above data B retired owing to ill health and the following adjustment were agreed upon:

(a) Building be appreciated by 10%.

(b) Provision for doubtful debts be increased to 5% of debtors

(c) Machinery be depreciated by 15%

(d) Goodwill of the firm be valued at Rs 36,000 and be adjusted into the Capital Accounts of A and C who will be share profits in future in the ratio of 3 : 1.

(e) A provision be made for outstanding repairs bill of Rs 3,000.

(f) Included in the value of creditors is Rs 1,800 for an outstanding legal claim, which is not likely to arise.

(g) Out of the insurance premium paid Rs 2,000 is for the next year. The amount was debited to P and L A/c.

(h) The partners decide to fix the capital of the new firm as Rs 1,20,000 in the profit sharing ratios.

(i) B to be paid Rs 9,000 in cash and the balance to be transferred to his Loan Account.

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