Board Paper of Class 12-Commerce 2013 Accountancy Delhi(SET 3) - Solutions

What rate of interest the company pays on calls - in advance if, it has not prepared its own Articles of Association ? (1)

What is meant by ‘Securities Premium’? (1)

Name the account which is opened to credit the share of profit of the deceased partner, till the time of his death to his Capital account. (1)

State the ratio in which the partners share profits or losses on revaluation of assets and liabilities, when there is a change in profit sharing ratio amongst existing partners? (1)

When the partner capitals are fixed, where the drawing made by a partner will be recorded ? (1)

What is meant by issue of debentures as a collateral security? (1)

Give the journal entry to distribute ‘Workman Compensation Reserve’ of Rs. 60,000 at the time of retirement of Sajjan, when there is not claim against it. The firm has three partners Rajat, Sajjan and Kavita. (1)

Mona, Nisha and Priyanka are partners in a firm. They contributed Rs. 50,000 each as capital three years ago. At that time Priyanka agreed to look after the business as Mona and Nisha were busy. The profits for the past three years were Rs. 15,000, Rs. 25,000 and Rs. 50,000 respectively. While going through the books of accounts Mona noticed that the profit had been distributed in the ratio of 1 : 1 : 2. When the enquired from Priyanka about this, Priyanka answered that since she looked after the business she should get more profit. Mona disagreed and it was decided to distribute profit equally retrospectively for the last three years. 2 + 1 = 3

(a) You are required to make necessary corrections in the books of accounts of Mona, Nisha and Priyanka by passing an adjustment entry.

(b) Identify the value which was not practiced by Priyanka while distributing profits.

Pass the necessary journal entries for the issue of debentures in the following cases:

(a) Rs 40,000, 12% debentures of Rs 100 each issued at a premium of 5% redeemable at par

(b) Rs 70,000, 12 % debentures of Rs 100 each issued at a premium of 5% redeemable at Rs 110 (3)

Forex Constructions Ltd. Has an outstanding balance of Rs 22,00,000, 9% debentures of Rs 100 each redeemable at a premium of 15%. According to the terms of redemption, the company redeemed 40% of the above debentures by converting them into shares of Rs 10 each at a premium of 60%. Record the entries for redemption of debentures in the books of Forex Construction Ltd. (3)

Abhay and Beena are partners in a firm. They admit Chetan as a partner with 1/4^th shares in the profits of the firm. Chetan brings Rs. 2,00,000 as his share of capital. The value of the total assets of the firm is Rs. 5,40,000 and outside liabilities are valued at Rs. 1,00,000 on that date. Give the necessary entry to record goodwill at the time of Chetan's admission. Also show your working notes. (4)

Madhav Ltd. issued fully paid equity shares of Rs. 80 each at a discount of Rs. 5 per share for the purchase of a running business from Gupta Bros. for a sum of Rs. 15,00,000.

The assets and liabilities consisted of the following :

Plant Rs. 5,00,000; Trucks Rs. 7,00,000; Stock Rs. 3,00,000; Machinery Rs. 6,00,000 and Sundry Creditors Rs. 5,00,000.

You are required to pass necessary journal entries for the above transactions in the books of Madhav Ltd. (4)

The authorized capital of Suhani Ltd. is Rs. 45,00,000 divided into 30,000 shares of Rs. 150 each. Out of these company issued 15,000 shares of Rs. 150 each at a premium of Rs. 10 per share. The amount was payable as follows :

Rs. 50 per share on application, Rs 40 per share on allotment (including premium), Rs. 30 per share on first call and balance on final call. Public applied for 14,000 shares. All the money was duly received.

Prepare an extract of Balance Sheet of Suhani Ltd. as per Revised Schedule VI Part − I of the Companies Act 1956 disclosing the above information. Also prepare ‘notes to accounts’ for the same. (4)

Naresh, David and Aslam are partners sharing profits in the ratio of 5 : 3 : 7. On April 1^st, 2012, Naresh gave a notice to retire from the firm. David and Aslam decided to share future profits in the ratio of 2 : 3. The adjusted capital accounts of David and Aslam show a balance of Rs. 33,000 and Rs. 70,500 respectively. The total amount to the paid to Naresh is Rs. 90,500. This amount is to be paid by David and Aslam in such a way that their capitals become proportionate to their new profit sharing ratio. Pass necessary journal entries for the above transactions in the books of the firm. Show your working clearly. (4)

Asgar, Chaman and Dholu are partners in a firm. Their capital accounts stood at Rs 6,00,00; Rs 5,00,000 and Rs 4,00,000 respectively on 1^st April, 2011. They shared profits and losses in the proportion of 4 : 2 : 3. Partners are entitled to interest on capital @ 8% per annum and salary to Chaman and Dholu @ Rs 7,000 per month and Rs 10,000 per quarter respectively as per the provision of the partnership deed.

Dholu’s share of profit (excluding interest on capital but including salary) is guaranteed at a minimum of Rs 1,10,000 p.a. Any deficiency arising on that account shall be met by Asgar. The profits for the year ended 31^st March, 2012 amounted to Rs 4,24,000. Prepare Profit and Loss Appropriation Account for the year ended 31^st March, 2012. (6)

The Balance Sheet of Sadhna, Mohit and Rohit who were sharing profits in the ratio of 1 : 2 : 3 as on 31^st March 2012 was as follows:

Rohit died on September 1^st, 2012. The partnership deed provided for the following on the death of a partner :

(a) Goodwill of the firm be valued at two years purchase of average profits for the last three years.

(b) Rohit’s share of profit or loss till the date of death was to be calculated on the basis of sales. Sales for the year ended 31^st March, 2012 amounted to Rs 6,00,000 and that from 1^st April to 1^st September 2012 to Rs 3,50,000. The profit for the year ended 31^st March, 2012 was calculated as Rs 1,50,000.

(c) Interest on capital was to be provided @ 8% p.a.

(d) The average profits of the last three years were Rs 72,000.

(e) According to Rohit’s will, the executors should donate her share to ‘Matri Chaya-an orphanage for girls’.

Prepare Rohit’s Capital Account to be rendered to her executor. Also identify the value being highlighted in the question.

Sahaj and Nimish are partners in a firm. They share profits and losses in the ratio of 2 : 1. Since both of them are specially abled, sometimes they find it difficult to run the business on their own. Gauri, a common friend decides to help them. Therefore, they admitted her into partnership for a 1/3^rd share. She brought her share of goodwill in cash and proportionate capital. At the time of Gauri’s admission, the Balance sheet of Sahaj and Nimish was as under:

It was decided to:

(a) Reduce the value of stock by Rs 5,000.

(b) Depreciate furniture by 10% and appreciate machinery by 5%.

(c) Rs 3,000 of the debtors proved bad. A provision of 5% was to be created on Sundry Debtors for doubtful debts.

(d) Goodwill of the firm was valued at Rs 45,000.

Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the reconstituted firm. Identify the value being conveyed in the question. (8)

OR

Prachi, Ritika and Ishita were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. Inspite of repeated reminders by the authorities, they kept dumping hazardous material into a nearby river. The court ordered for the dissolution of their partnership firm on 31^st March 2012. Prachi was deputed to realise the assets and pay the liabilities. She was paid Rs 1,000 as commission for her services. The financial position of the firm was as follows:

Following was agreed upon:

Prachi took over investments for Rs 12,500. Stock and furniture realized Rs 41,500. There was old furniture which has been written off completely from the books. Ritika agreed to take away the same at the price of Rs 3,000. Compensation paid to the employees amounted to Rs 8,000. This liability was not provided in the above Balance Sheet. Realization expenses amounted to Rs 1,000. Prepare Realisation Account, Partner’s Capital Accounts and Cash A/c to close the books of the firm.

Also identify the value being conveyed in the question.

Moneyplus Company issued for public subscription 75,000 shares of the value of Rs 10 each at a discount of 10% payable as follows:

Rs 2 per share on application, Rs 3 per share on allotment and Rs 4 per share on call.

The company received applications for 1,50,000 shares. The allotment was done as under:

(a) Applicants of 15,000 shares were allotted 5,000 shares.

(b) Applicants of 70,000 shares were allotted 40,000 shares.

(c) Remaining applicants were allotted 30,000 shares.

Money in excess to allotment was returned. Hari, a shareholder who had applied for 3,500 shares out of group B failed to pay allotment and call money. Rohan, a shareholder who was allotted 3,000 shares paid the call money along with the allotment. Rohan also belonged to group B.

Pass necessary journal entries to record the above transactions in the books of the company. Show your working notes clearly. (8)

OR

Record the journal entries for forfeiture and reissue of shares in the following cases:

(a) X Ltd. forfeited 20 shares of Rs 10 each, Rs 7 called up on which the shareholder had paid application and allotment money of Rs 5 per share. Out of these, 15 shares were re-issued to Naresh as Rs 7 per share paid up for Rs 8 per share.

(b) Y Ltd. forfeited 90 shares of Rs 10 each, Rs 8 called up issued at a premium of Rs 2 per share to ‘R’ for non-payment of allotment money of Rs 5 per share (including premium). Out of these, 80 shares were re-issued to Sanjay as Rs 8 called up for Rs 10 per share.

(c) Z Ltd. forfeited 300 shares of Rs 10 each issued at a discount of Rs 1 per share for non-payment of first and final call of Rs 3 per share. Out of these 200 shares were reissued at Rs 3 per share fully paid up.