Board Paper of Class 12-Commerce 2019 Accountancy All India(Set 1) - Solutions

Pass the necessary journal entry for treatment of Partner's loan appearing on the asset side of the Balance Sheet in case of dissolution of a partnership firm. VIEW SOLUTION

A new partner acquires two main rights in the partnership firm which he joins. State one of these rights.

OR

How does 'Nature of business' affect the value of goodwill of a firm? VIEW SOLUTION

State the main aim of a not-for-profit organisation.

OR

How is 'Life membership fee' treated while preparing the financial statements of a not-for-profit organisation? VIEW SOLUTION

Kiya and Leela are partners sharing profits in the ratio of 3 : 2. Kiran was admitted as a new partner with $\frac{1}{5}\mathrm{th}$ share in the profits and brought ₹ 24,000 as her share of goodwill premium that was credited to the capital accounts of Kiya and Leela respectively with ₹ 18,000 and ₹ 6,000.
Calculate the new profit sharing ratio of Kiya, Leela and Kiran. VIEW SOLUTION

Dinkar, Navita and Vani were partners sharing profits and losses in the ratio of 3 : 2 : 1. Navita died on 30^th June, 2017. Her share of profit for the intervening period was based on the sales during that period, which were ₹ 6,00,000. The rate of profit during the past four years had been 10% on sales. The firm closes its books on 31^st March every year.
Calculate Navita's share of profit. VIEW SOLUTION

What is meant by 'Private Placement of Shares'?

OR

What is meant by 'Reserve Capital'? VIEW SOLUTION

Average profits of a firm during the last few years are ₹ 80,000 and the normal rate of return in a similar business is 10%. If the goodwill of the firm is ₹ 1,00,000 at 4 years' purchase of super profit, find the capital employed by the firm. VIEW SOLUTION

'UZ Ltd.' purchased Plant and Machinery from Elk Machine Ltd. for ₹ 6,90,000. Elk Ltd. was paid by accepting a draft of ₹ 90,000 payable after three months and the balance by issue of 6% debenture of ₹ 100 each at a discount of 20%.
Pass necessary journal entries for the above transactions in the books of 'UZ Ltd.'

OR

'ZK Ltd.' issued ₹ 4,00,000, 9% Debentures of ₹ 100 each at a discount of 5% redeemable at a premium of 10%.
Pass necessary journal entries for the above transactions in the books of 'ZK Ltd.' VIEW SOLUTION

Willow Ltd. was registered with an authorized capital of ₹ 10,00,000 divided into 1,00,000 equity shares of ₹ 10 each. The company offered 80,000 shares for subscription to the public, out of which 75,000 shares were subscribed. All amounts were received except the final call of ₹ 2 per share on 3,000 shares. Fill in the missing figures in the Balance Sheet of Willow Ltd as per the provisions of Schedule III, Part I of the Companies Act, 2013.

Balance Sheet as at 31st March, 2018(An extract)
Particulars	Note No.	(₹)
EQUITY AND LIABILITIES
1. Shareholders Funds
(a) Share Capital	1	....................
		....................

 
 

Note to Accounts

Note No.	Particulars		(₹)
1	Share Capital
	Authorised Capital		...................
	...................................
	Issued Capital		....................
	..................................
	Subscribed Capital
	Subscribed and full paid ____________ shares of ₹ 10 each		....................
	Subscribed but not fully paid
	____________ shares of ₹ 10 each	................
	Less ....................	................	.....................
			.....................

  VIEW SOLUTION

Janta Kalayan Club has 1250 members each paying an annual subscription of ₹ 150. During the year ended 31^st March, 2018 the club did not receive subscription from 45 members and received subscriptions in advance from 46 members for the year ending 31^st March , 2018. On 31^st March, 2017 the outstanding subscriptions were ₹ 15,000 and subscriptions received in advance were ₹ 3000.
Calculate the amount of subscription that will be debited to the 'Receipts and Payments Account' for the year ended 31^st March, 2018. VIEW SOLUTION

Hari, Kunal and Uma are partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. From 1^st April, 2018 they decided to share future profits and losses in the ratio of 2 : 5 : 3. Their Balance Sheet showed a balance of ₹ 75,000 in the Profit and Loss Account and a balance of ₹ 15,000 in Investment Fluctuation Fund. For this purpose, it was agreed that:
(i) Goodwill of the firm was valued at ₹ 3,00,000.
(ii) That investments (having a book value of ₹ 50,000) were valued at ₹ 35,000.
(ii) That stock having a book value of ₹ 50,000 be depreciated by 10%.
Pass the necessary journal entries for the above in the books of the firm. VIEW SOLUTION

Meera, Sarthak and Rohit were partners sharing profits in the ratio of 2 : 2 : 1. On 31 March, 2018, their Balance Sheet was as follows:

Balance Sheet of Meera, Sarthak and Rohit as at 31 March, 2018
Liabilities	Amount (₹)	Assets	Amount  (₹)
Creditors	3,00,000	Fixed  Assets	7,00,000
Contingency Reserve	1,00,000	Stock	2,00,000
Capital:		Debtors	1,50,000
Meera	4,00,000	Cash at bank	3,50,000
Sarthak	3,50,000
Rohit	2,50,000
	14,00,000		14,00,000

Sarthak died on 15^th June, 2018. According to the partnership deed, his executors were entitled to:
(i) Balance in his Capital Account.
(ii) His share of goodwill will be calculated on the basis of thrice the average of the past 4 years' profits.
(iii) His share in profits up to the date of death on the basis of average profits of the last two years. The time period for which he survived in the year of death will be calculated in months.
(iv) Interest on capital @ 12% p.a. up to the date of his death.
The firm's profits for the last four years were:
2014 - 15 ₹ 1,20,000, 2015 - 16 ₹ 2,00,000, 2016 - 17 ₹ 2,60,000 and 2017 - 18 ₹ 2,20,000.
Sarthak's executors were paid the amount due immediately. Prepare Sarthak's Capital Account to be presented to his executors.  VIEW SOLUTION

From the following information of Gems club, prepare Income and Expenditure Account for the year ended 31^st March, 2018.

​​Receipts and Payments Account of Gems Club for the year ending 31st March, 2018
Receipts	Amount (₹)	Payments	Amount  (₹)
To Balance b/d	50,000	By Furniture	1,30,000
To Interest on Investments	2,400	By Salaries	64,500
To Donations	17,000	By Miscellaneous Expenses	52,000
To Subscriptions	3,00,000	By Telephone Charges	12,000
To Rent Received	70,000	By Fax Machine	6,000
To Sale of old newspapers	600	By 6% Investments (on 01.08.2017)	1,00,000
		By Printing and Stationery	19,000
		By Balance c/d	56,500
	4,40,000		4,40,000

Additional Information:

Subscriptions received included ₹ 15,000 for 2018 - 19. The amount of subscriptions outstanding on 31^st March, 2018 were ₹ 20,000. Salaries unpaid on 31^st March, 2018 were ₹ 8,000 and Rent receivable was ₹ 2,000. Opening Stock of printing and stationery was ₹ 12, 000, whereas Closing stock was ₹ 15,000. VIEW SOLUTION

Ashish and Kanav were partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31^st March, 2018 their Balance Sheet was as follows:  
 

Balance Sheet of Ashish and Kanav as at 31st March, 2018
Liabilities		Amount ₹	Assets	Amount ₹
Trade Creditors		42,000	Bank	35,000
Employees' Provident Fund		60,000	Stock	24,000
Mrs Ashish's Loan		9,000	Debtors	19,000
Kanav's Loan		35,000	Furniture	40,000
Workmen's Compensation Fund		20,000	Plant	2,10,000
Investments Fluctuation Reserve		4,000	Investments	32,000
Capital:			Profit and Loss Account	10,000
Ashish	1,20,000
Kanav	80,000	2,00,000
		3,70,000		3,70,000

On the above data they decided to dissolve the firm.
​(i) Ashish agreed to take over furniture at ₹ 38,000 and pay off Mrs. Ashish's loan.
(ii) Debtors realised ₹ 18,500 and plant realised 10% more.
(iii) Kanav took over 40% of the stock at 20% less than the book value. Remaining stock was sold at a gain of 10%.
(iv) Trade creditors took over investments in full settlement.
(v) Kanav agreed to take over the responsibility of completing dissolution at an agreed remuneration of ₹ 12,000 and to bear realization expenses. Actual expenses of realization amounted to ₹ 8,000.
Prepare Realisation Account. VIEW SOLUTION

Naveen, Qadir and Rajesh were partners doing an electronic goods business in Uttarakhand. After the accounts of partnership were drawn up and closed, it was discovered that interest on capital has been allowed to partners @ 6% p.a. for the years ending 31st March, 2017 and 2018, although there is no provision for interest on capital in the partnership deed. On the other hand, Naveen and Qadir were entitled to a salary of ₹ 3,500 and ₹ 4,000 per quarter respectively, which has not been taken into consideration. Their fixed capitals were ₹ 4,00,000, ₹ 3,60,000 and ₹ 2,40,000 respectively. During the last two years they had shared the profits and losses as follows:
 

Year Ended	Ratio
31st March, 2017	3 : 2 : 1
31st March, 2018	5 : 3 : 2

Pass necessary adjusting entry for the above adjustments in the books of the firm on 1^st April, 2018. Show your workings clearly. On 31^st March, 2018 the balance in the Capital Accounts of Abhir, Bobby and Vineet, after making adjustments for profits and drawings were ₹ 8,00,000, ₹ 6,00,000 and ₹ 4,00,000 respectively.

Subsequently, it was discovered that interest on capital and interest on drawings had been omitted. The partners were entitled to interest on capital @ 10% p.a and were to be charged interest on drawings @ 6% p.a. The drawings during the year were : Abhir - ₹ 20,000 drawn at the end of each month, Bobby - ₹ 50,000 drawn at the beginning of every half year and Vineet - ₹ 1,00,000 withdrawn on 31^st October, 2017. The net profit for the year ended 31^st March, 2018 was ₹ 1,50,000. The profit sharing ratio was 2 : 2 : 1.

Pass necessary adjusting entry for the above adjustments in the books of the firm. Also, show your workings clearly. VIEW SOLUTION

Denspar Ltd. invited applications for issuing 2,00,000 equity shares of ₹ 10 each at a premium of ₹ 20 per share. The amount was payable as follows:

On Application	-	₹ 2 per share
On Allotment	-	₹ 13 per share (including ₹10 premium)
On First Call	-	₹ 7 per share (including ₹ 5 premium)
On Final Call	-	₹ 8 per share (including ₹ 5 premium)

Applications for 1,80,000 shares were received. Shares were allotted to all the applicants. Yogesh, a shareholder holding 5,000 shares paid his entire share money along with the allotment money. Vishesh, a holder of 7,000 shares, failed to pay the allotment money. Afterwards the first call was made. Vishesh paid the allotment money along with the first call money. Samyesh holding 2,000 shares did not pay the final call. Samyesh's shares were forfeited immediately after the final call. Out of the forfeited shares, 1,500 shares were reissued at ₹ 8 per share fully paid up.

Pass the necessary journal entries for the above transactions in the books of Denspar Ltd. 'KLN Ltd'. invited applications for issuing 1,00,000 shares of ₹ 10 each at a premium of ₹ 2 per share. The amount was payable as follows:

On Application	-	₹ 3 per share (including premium ₹ 1)
On Allotment	-	₹ 4 per share (including premium ₹ 1)
On First Call	-	₹ 3 per share
On Second and Final Call	-	Balance amount

Application for 1,90,000 shares were received. Allotment was made to the applicants as follows:

Category	No. of Shares Applied	No. of shares Allotted
I	50,000	40,000
II	1,00,000	60,000

Remaining applications were rejected.

Rajat, a shareholder belonging to Category I who had applied for 2,500 shares, failed to pay the amount due on allotment and first call. His shares were immediately forfeited.

Reema, a shareholder belonging to Category II who was holding 3,000 shares failed to pay the first call and second call money. Her shares were also forfeited. Afterwards 4,000 shares were reissued @ ₹ 8 per share fully paid up. These included all the forfeited shares of Reema.

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

Mohan, Vinay and Nitya were partners in a firm sharing profits and losses in the proportion of $\frac{1}{2},\frac{1}{3}$ and $\frac{1}{6}$ respectively. On 31^st March, 2018, their Balance Sheet was as follows:

Balance Sheet of Mohan, Vinay and Nitya as at 31st March, 2018
Liabilities		Amount (₹)	Assets		Amount (₹)
Creditors		48,000	Cash at Bank		31,000
Employees' Provident Fund		1,70,000	Bills Receivable		54,000
Contingency Reserve		30,000	Book Debts	63,000
Capital:			Less: Provision for doubtful debts	2,000	61,000
Mohan	1,20,000		Plant and Machinery		1,20,000
Vinay	1,00,000		Land and Building		2,92,000
Nitya	90,000	3,10,000
		5,58,000			5,58,000

Mohan retired on the above date and it was agreed that:
(i) Plant and machinery will be depreciated by 5%.
(ii) An old computer previously written off was sold for ₹ 4,000.
(iii) Bad debts amounting to ₹ 3,000 will be written off and a provision of 5% on debtors for bad and doubtful debts will be maintained.
(iv) Goodwill of the firm was valued at ₹ 1,80,000 and Mohan's share of the same was credited in his account by debiting Vinay's and Nitya's accounts.
(v) The capital of the new firm was to be fixed at ₹ 90,000 and necessary adjustments were to be made by bringing in or paying off cash as the case may be.
(vi) Vinay and Nitya will share future profits in the ratio of 3 : 2.

Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm. Leena and Rohit are partners in a firm sharing profits in the ratio of 3 : 2. On 31^st March, 2018 their Balance Sheet was as follows:
 

Balance Sheet of Leena and Rohit as at 31st March, 2018
Liabilities		Amount (₹)	Assets		Amount (₹)
Sundry Creditors		80,000	Cash		42,000
Bills Payable		38,000	Debtors	1,32,000
General Reserve		50,000	Less: Provision for doubtful debts	2,000	1,30,000
Capital:			Stock		1,46,000
Leena	1,60,000		Plant and Machinery		1,50,000
Rohit	1,40,000	3,00,000
		4,68,000			4,68,000

On the above date Manoj was admitted as a new partner for $\frac{1}{5}\mathrm{th}$ share in the profits of the firm on the following terms:
(i) Manoj brought proportionate capital. He also brought his share of goodwill premium of ₹ 80,000 in cash.
(ii) 10% of the general reserve was to be transferred to provision for doubtful debts.
(iii) Claim on account of workmen's compensation amounted to ₹ 40,000.
(iv) Stock was overvalued by ₹ 16,000.
(v) Leena, Rohit and Manoj will share future profits in the ratio of 5 : 3 : 2.

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

VIEW SOLUTION