Board Paper of Class 12-Commerce 2011 Accountancy All India(SET 1) - Solutions

What is the basis of preparing Receipt and Payment Account?

Give the average period in months for charging interest on drawings for the same amount withdraws at the beginning of each quarter.

State the meaning of sacrificing ratio.

How does the nature of business affect the value of goodwill of a firm?

Give the meaning of ‘Issue of Debentures as a collateral security.

From the following information of a club, show the amounts of Prize awarded and Price Fund in the Financial Statements of the club for the year ended on 31^st March 2009 and 31^st March 2010:

Goodluck Ltd. purchased machinery costing Rs 10,00,000 from Fair Deals Ltd. The company paid the price by issue of Equity shares of Rs 10 each at a premium of 25%. Pass necessary journal entries for the above transaction in the books of Goodluck Ltd.

X Ltd. redeemed 1,000 6% Debentures of Rs 100 each by converting them into equity shares of Rs 100 each. The 6% Debentures were redeemable at a premium of 5% for which the Equity shares were issued as a premium of 25%. Pass the necessary journal entries for the redemption of the above mentioned debentures in the books of X Ltd.

A and B entered into partnership of 1^st April 2009 without any partnership deed. They introduced capitals of Rs 5,00,000 and Rs 3,00,000 respectively. On 31^st October 2009, A advanced Rs 2,00,000 by way of loan to the firm without any agreement as to interest. The Profit and Loss Account for the year ended 31.3.2010 showed a profit of Rs 4,30,000 by the partners could not agree upon the amount of interest on loan to be charged and the basis of division of profits. Pass a journal entry for the distribution of the profit between the partners and prepare the Capital A/cs of both the partners and Loan A/c of ‘A’.

A Partnership firm earned net profits during the last three years as follows:

The capital employed in the firm throughout the above mentioned period has been Rs 4,00,000. Having regard to the risk involved,

15% is considered to be a fair return on the capital. The remuneration of all the partners during this period is estimated to be Rs 1,00,000 per annum.

Calculate the value of goodwill on the basis of (i) two year’s purchased of super profits earned on a average basis during the above mentioned three years and (ii) by capitalization method.

Pass the necessary journal entries for the issue and redemption of Debentures in the following cases:

(i) 15,000, 9% Debentures of Rs 250 each issued at 5% premium, repayable at 15% premium.

(ii) 2,00,000, 12% Debentures of Rs 10 each issued at 8% premium, repayable at par.

From the following items of Receipts and Payments A/c of South India Club, prepare an Income and Expenditure Account for the year ended 31.3.2010:

Additional Information:

Subscriptions in arrears on 31.3.2010 were Rs 4,700 and nine months interest on loan was also outstanding.

Pass the necessary journal entries for the following transaction of the dissolution of the firm of James and Haider who were sharing profits and losses in the ratio of 2 : 1.

The various assets (other than cash) and outside liabilities have been transferred to Realisation Account:

(i) James agreed to pay off his brother’s loan Rs 10,000

(ii) Debtors realized Rs 12,000

(iii) Haider took over all investment at Rs 12,000

(iv) Sundry creditors Rs 20,000 were paid at 5% discount

(v) Realisation expenses amounted to Rs 2,000

(vi) Loss on realization was Rs 10,200.

On 1.1.2007 a Public Limited Company issued 15,000, 10% Debentures of Rs 100 each at par which were repayable at a premium of 15% on 31.12.2011. On the date of maturity, the company decided to redeem the above mentioned 10% Debentures as per the terms of issue, out of profits. The Profit and Loss A/c shows a credit balance of Rs 20,00,000 on this date. The offer was accepted by all the Debentures holders and all the Debentures were redeemed.

Pass the necessary journal entries in the books of the Company only for the redemption of Debentures, if the Company follows

Sec.117 C of the Companies Act.

Dinesh Ltd. invited application for issuing 10,000 Equity shares of Rs 10 each. The amount was payable as follows:

On Application Rs 1

On Allotment Rs 2

On First call Rs 3

On Second and Final Call − Balance

The issue was fully subscribed. Ram to whom 100 shares were allotted, failed to pay the allotment money and his shares were forfeited immediately after allotment. Shyam to whom 150 shares were allotted failed to pay the first call. His share were also forfeited after the first call. Afterwards the second and final call was made. Mohan to whom 50 shares were allotted failed to pay the second and final call. His shares were also forfeited. All the forfeited shares were re-issued at Rs 9 per share fully paid up. Pass necessary Journal entries in the books of Dinesh Ltd.

OR

Moti Ltd. invited application for issuing 10,00,000 Equity shares of Rs 10 each at a premium of Rs 2 per share. The amount was payable as follows:

On Application Rs 5 (Including premium)

On Allotment Rs 4

On First and Final Call Rs 3

Application for 15,00,000 share were received. Application for 3,00,000 shares were rejected and pro-rata allotment was made to the remaining applicants. Excess application money was utilized towards sums due on allotment. Giri who had applied for 24,000 shares failed to pay the allotment and call money. His shares were forfeited. Out of the forfeited shares 10,000 shares were reissued for Rs 8 per share fully paid up. Pass necessary journal entries in the books of Moti Ltd.

X, Y and Z were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. On 31.3.2010 their Balance Sheet was as follows:

Z died on 31.7.2010. It was agreed that:

(a) Goodwill be valued at 2½ year’s purchased of the average profits of the last four year which were as follows:

(b) Machinery be valued at Rs 70,000; Patents at Rs 20,000 and Building at Rs 62,500.

(c) For the purpose of calculating Z’s share of profits on the year of his death the profit in 2010 − 2011 should be taken to have been accrued on the same scale as in 2009 − 2010.

(d) A sum of Rs 17,500 was paid immediately to the executors of Z the balance was paid in four half yearly installments together with interest at 12% p.a. starting from 31.1.2011.

Given necessary journal entries to record the above transaction and Z’s executor’s account till the payment of installments due on

31.1.2011

OR

Murari and Vohra were partners in a firm with capitals of Rs 1,20,000 and Rs 1,60,000 respectively. On 1.4.2010 they admitted Yadav

as a partner for non-fourth share in profits on his payment of Rs 2,00,000 as his capital and Rs 90,000 for this one-fourth share of goodwill.

On that date the creditors of Murari and Vohra were Rs 60,000 and Bank Overdraft was Rs 15,000. Their assets apart from cash included Stock Rs 10,000; Debtors Rs 40,000; Plant and Machinery Rs 80,000; Land and Building Rs 2,00,000. It was agreed that stock should be depreciated by Rs 2,000; Plant and Machinery by 20%, Rs 5,000 should be written off as bad debts and Land and

Building should be appreciated by 25%.

Prepare Revaluation Account, Capital Accounts of Murari, Vohra and Yadav and the Balance Sheet of the new firm.