Board Paper of Class 12-Commerce 2012 Accountancy Delhi(SET 3) - Solutions

For which share of Goodwill a partner is entitled at the time of his retirement?

Name the financial statement prepared by a Not-For-Profit Organisation on accrual basis.

Give any one advantage for the redemption of debentures by purchase in the open market?

State the provisions of Indian Partnership Act regarding the payment of remuneration to a partner for the services rendered.  

State any two occasions on which a firm can be reconstituted.

Jain Ltd. purchased Building for Rs 10,00,000 from Gupta Ltd. 10% of the payable amount was paid by a cheque drawn in favour of Gupta Ltd. The balance was paid by issue of Equity Shares of Rs 10 each at a discount of 10%.

Pass necessary Journal Entries in the books of Jain Ltd.

Narain Laxmi Ltd. invited applications for issuing 7500, 12% Debentures of Rs100 each at a premium of Rs 35 per Debenture. The full amount was payable on application.

Applications were received for 10,000 Debentures. Applications for 2500 Debentures were rejected and the application money was refunded. Debentures were allotted to the remaining applicants.

Pass necessary Journal Entries for the above transactions in the books of Narain Laxmi Ltd.

From the following information, calculate the amount of income from subscriptions to be shown in the Income and Expenditure Account for the year ended 31-3-2011:

Arjun, Bhim and Nakul are partners sharing profits & losses in the ratio of 14 : 5 : 6 respectively.

Bhim retires and surrenders his 5/25^th share in favour of Arjun. The goodwill of the firm is valued at 2 years purchase of super profits based on average profits of last 3 years. The profits for the last 3 years are Rs 50,000, Rs 55,000 & Rs 60,000 respectively. The normal profits for the similar firm are Rs 30,000. Goodwill already appears in the books of the firm at Rs 75,000.

The profit for the first year after Bhim's retirement was Rs 1,00,000. Give the necessary Journal

Entries to adjust Goodwill and distribute profits showing your workings.

Shakti Ltd. decided to redeem its 750, 12% Debentures of Rs 100 each. The company purchased 500 Debentures at Rs 94 per Debenture from the open market. The remaining debentures were redeemed out of profits. The company had already made a provision for Debenture Redemption Reserve in its books.

Pass necessary Journal Entries in the books of the company for the above transactions.

Arun and Arora were partners in a firm sharing profits in the ratio of 5 : 3. Their fixed capitals on 1-4-2010 were: Arun Rs 60,000 and Arora Rs 80,000. They agreed to allow interest on capital @ 12% p.a. And to charge on drawings @ 15% p.a. The profit of the firm for the year ended 31-3 2011 before all above adjustments were Rs 12,600. The drawings made by Arun were Rs 2,000 and by Arora Rs 4,000 during the year. Prepare Profit and Loss Appropriation Account of Arun and Arora. Show your calculations clearly. The interest on capital will be allowed even if the firm incurs loss.

Pass necessary Journal Entries for the following transactions in the books of N.R. Ltd.

(i) Redeemed 1,200, 9% Debentures of Rs 175 each by converting into New 10% Debenture of

Rs 100 each issued at a premium of5%.

(ii) Redeemed 19,000, 6% Debentures of Rs 50 each by converting them into Equity shares of Rs 100 each. The Equity shares were issued at a discount of 5%.

A and B were partners sharing profits in the ratio of 3 : 2. On 31-3-2011 their Balance Sheet of the firm was as follows:

The firm was dissolved on 1-4-2011 and the Assets and Liabilities were settled as follows:

(i) Building was taken over by the creditors as their full & final payment

(ii) Furniture was taken over by B for cash payment at 5% less than the book value.

(iii) Debtors were collected by a debt collection agency at a cost Rs 5,000

(iv) Stock realized Rs 70,500

(v) ‘B’ agreed to bear all realisation expenses. For this service B is paid Rs 500. Actual expenses on realization amounted to Rs 1,000

Pass necessary Journal Entries for dissolution of the firm.

From the following ‘Receipt and Payments Account’ of ‘New Club’ for the year ended 31-3 2011, prepare ‘Income and Expenditure Account’.

From the above ‘Receipts and Payments Account’ prepare an ‘Income and Expenditure Account’ of ‘New Club’ for the year ended 31-3-2011.

‘B’ and ‘C’ were partners sharing profits in the ratio of 3 : 2. Their Balance Sheet as on 31-3 2011 was as follows:

‘D’ was admitted to the partnership for 1/5^th share in the profits on the following terms:

(i) The new profit sharing ratio was decided as 2:2:1.

(ii) D will bring Rs 30,000 as his capital and Rs 15,000 for his share of goodwill.

(iii) Half of goodwill amount was withdrawn by the partner who sacrificed his share of profit in favour of ‘D’.

(iv) A provision of 5% for bad and doubtful debts was to be maintained.

(v) An item of Rs 500 included in Sundry Creditors was not likely to be paid.

(vi) An provision of Rs 800 was to be made for claims for damages against the firm.

After making the above adjustments the Capital Accounts of ‘B’ and ‘C’ were to be adjusted on the basis of D’s Capital. Actual cash wash to be brought in or to be paid off as the case may be.

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

OR

'G', 'E' and 'F' were partners in a firm sharing profits in the ratio of 7 : 2 : 1. The Balance Sheet of the firm as on 31^st March, 2011 was as follows:

‘E’ died on 24^th August 2011. Partnership deed provides for the settlement of claims on the death of a partner of a partner in addition to his capital as under:

(i) The share of profit of deceased partner to be computed up to the date of death on the basis of average profits of the past three years which was Rs 80,000.

(ii) His share in profit/loss on revaluation of assets and re-assessment of liabilities which were as follows:

Land and Buildings were revalued at Rs 94,000, Machinery at Rs 38,000 and Stock at Rs 5,000.

A provision of was to be created on debtors for bad and doubtful debts.

(iii) The net amount payable to 'E's executors was transferred to his Loan Account, to be paid later on.

Prepare Revaluation Account, Partner's Capital Accounts, E's Executor A/c and Balance Sheet of 'G' and 'F' who decided to continue the business keeping their capital balances in their new profit sharing ratio.

Any surplus or deficit to be transferred to current accounts of the partners.

Shyam Ltd. invited applications for issuing 80,000 Equity Shares of Rs 10 each at a premium of Rs 40 per share. The amount was payable as follows:

On Application Rs 35 per share (including Rs 30 Premium)

On Allotment Rs 8 per share (including Rs 4 Premium)

On First and Final Call − Balance

Applications for 77,000 shares were received. Shares were allotted to all the applicants. Sundram to whom 7,000 shares were allotted failed to pay the allotment money. His shares were forfeited immediately after allotment. Afterwards the first and final call was made. Satyam the holder of 500 shares failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares 1,000 shares were re-issued at Rs 50 per share fully paid up. The re-issued shares included all the shares of Satyam.

Pass necessary Journal Entries for the above transactions in the books of Shyam Ltd.

OR

Jain Ltd. Invited applications for issuing 35,000 Equity Shares of Rs 10 each at a discount of 10%. The amount was payable as follows:

On Application Rs 5 per share.

On Allotment Rs 3 per share

On First and Final Call − Balance

Applications for 50,000 shares were received. Applications for 8,000 shares were rejected and the application money of these applicants was refunded. Shares were allotted on pro-rata basis to the remaining applicants and the excess money received with applications from these applicants was adjusted towards sums due on allotment. Jeevan who had applied for 600 shares failed to pay allotment and first and final call money. Naveen the holder of 400 shares failed to pay first and final call money. Shares of Jeevan and Naveen were forfeited. Of the forfeited 800 shares were re-issued at Rs 15 per share fully paid up. The re-issued shares included all the shares of Naveen.

Pass necessary Journal Entries for the above transactions in the books of Jain Ltd.