Board Paper of Class 12-Commerce 2008 Accountancy All India(SET 1) - Solutions

Distinguish between Income and Expenditure Account and Receipt and Payment Account on the basis of nature of items recorded therein.

Ram and Mohan are partners in a firm without any partnership deed. Their capitals are Ram Rs 8,00,000 and Mohan Rs 6,00,000.

Ram is a active partner and looks after the business. Ram wants that profits should be shared in proportion of capitals state with reason whether his claim is valid or not

Define goodwill

State any two reason for the preparation of ‘Revaluation Account’ on the admission of a partners.

Given the meaning of ‘minimum subscription’.

Calculate the amount of sports material to be debited to the Income and Expenditure Account of Capital Sports Club for the year ended 31.3.2007 on the basis of the following information:

Amount paid for sports material during the year was Rs 19,000.

Samta Ltd. forfeited 800 equity shares of Rs 100 each for the non-payment of first call of Rs 30 per share. The final call of Rs 20 per

share was not yet made. Out of the forfeited shares 400 were re-issued at the rate of Rs 105 per share fully paid up.

Pass necessary Journal entries in the books of Samta Ltd. for the above transaction.

Deepak Ltd. purchased furniture Rs 2,20,000 from M/s Furniture Mart. 50% of the amount was paid to Furniture Mart by accepting a

bill of exchange and for the balance the company issued 9% debentures of Rs 100 each at a premium of 10% in favour of Furniture

Mart.

Pass necessary Journal entries in the books of Deepak Ltd. for the above transactions.

Kumar and Raja were partners in a firm sharing profits in the ratio of 7 : 3. Their fixed capitals were: Kumar Rs 9,00,000 and Raja Rs

4,00,000. The partnership deed provided for the following but the profit for the year was distributed without providing for:

(i) Interest on capital @ 9% per annum.

(ii) Kumar’s salary Rs 50,000 per year and Raja’s salary Rs 3,000 per month.

The profit for the year ended 31.3.2007 was Rs 2,78,000.

Pass the adjustment entry.

P, Q and R were partners in a firm sharing profits in 2 : 2 : 1 ratio. The firm closes its books on 31 March every year. P died three

months after that last accounts were prepared. On the date the goodwill of the firm was valued at Rs 90,000. On the death of a partner

his share of profit in the year of death was to be calculated on the basis of the average profits of the last four years. The profits of last

four years were:

Year ended 31.3.2007 Rs 2,00,000

Year ended 31.3.2006 Rs 1,80,000

Year ended 31.3.2005 Rs 2,10,000

Year ended 31.3.2004 Rs 1,70,000 (Loss)

Pass the necessary journal entries for the treatment of goodwill and P’s shares of profit on his death. Show clearly the calculation of

P’s share of profit.

Sagar Ltd. was registered with an authorized capital of Rs 1,00,00,000 dividend into 1,00,000 equity shares of Rs 100 each. The

company offered for public subscription 60,000 equity shares. Application for 56,000 shares were received and allotment was made to

all the applicants. All the calls were made and were duly received except the second and final call of Rs 20 per share on 700 shares.

Prepare the Balance Sheet of the company showing the different types of shares capital.

Following is the Receipt and Payment Account of Indian Sports Club for the year ended 31.12.2006:

Other Information:

On 31.12.2006 subscription outstanding was Rs 2,000 and on 31.12.2005 subscription outstanding was Rs 3,000. A salary outstanding

on 31.12.2006 was Rs 1,500.

On 1.1.2006 the club had building Rs 75,000, furniture Rs 18,000, 12% investment Rs 30,000 and sports equipment Rs 30,000.

Depreciation charged on those items including purchased was 10%.

Prepare Income and expenditure account of the Club for the year ended 31.12.2006 and ascertain the Capital Fund 31.12.2005.

K and Y were partners in a firm sharing profits in 3 : 2 ratio. They admitted Z as a new partners for 1/3 rd share in the profits of the firm. Z acquired his share from K and Y in 2 : 3 ratio. Z brought Rs 80,000 for his capital and Rs 30,00 for his 1/3^rd shares as premium. Calculate the new profit sharing ratio of K, Y and Z and pass necessary journal entries for the above transaction in the books of the firm.

Pass the necessary journal entries in the books of Varun Ltd. for the following transaction:

(i) Issued 58,000, 9% debentures of Rs 1,000 each at premium of 10%.

(ii) Converted 350, 9% debentures of Rs 100 each into equity shares of Rs 10, each issued at a premium of 25%.

(iii) Redeemed 450, 9% debentures of Rs 100 each by draw of lots.

R, S and T were partners in a firm sharing profits in 2 : 2 : 1 ratio. On 1.4.2004 their Balance Sheet was as follows:

S retired from the firm on 1.4.2004 and his share was ascertained on the revaluation of assets as follows:

Stock Rs 40,000; Furniture Rs 6,000; Plant and Machinery Rs 18,000; Building Rs 40,000; Rs 1,700 were to be provided for doubtful

debts. The goodwill of the firm was valued at Rs 12,000.

S was to be paid Rs 18,080 in cash on retirement and the balance in three equal yearly instalments.

Prepare Revaluation Account, Partner’s Capital Accounts, S’s Loan Account and Balance Sheet on 1.4.2004.

OR

D and E were partners in a firm sharing profits in 3 : 1 ratio. On 1.4.2007 they admitted F as a new partner for 1/4^th share in the firm which he acquired from D. Their Balance Sheet that date was as follows:

F will bring Rs 40,000 as his capital and the other terms agreed upon were:

(i) Goodwill of the firm was valued at Rs 24,000

(ii) Land and Building were valued at Rs 70,000

(iii) Provision for bad debts was found to be in excess by Rs 800

(iv) A liability, for Rs 2,000 included in sundry creditors was not likely to arises.

(v) The capital of the partners be adjusted on the basis of F’s contribution of capital to the firm.

(vi) Excess or shortfall, if any, to be transferred to current accounts.

Prepare Revaluation Account, Partners’ Capital Account and the Balance Sheet of the new firm.

Janata Ltd. invited application for issuing 70,000 equity shares of Rs 10 each at a premium of Rs 2 per share. The amount was payable

as follows:

On application Rs 4 per share (including premium)

On allotment Rs 3 per share

On First and final call - Balance.

Application for 1,00,000 share were received. Applications for 10,000 shares were rejected. Shares were allotted to the remaining

applicants on pro-rata basis. Excess money received with applications were adjusted towards sums due in allotment. All calls were

made and were duly received except first and final call on 700 shares allotted to Kanwar. His shares were forfeited. The forfeited

shares were re-issued for Rs 77,000 fully paid up.

Pass necessary journal entries in the books of the company for the above transactions.

OR

Shubham Ltd. invited applications for the allotment of 80,000 equity shares of Rs 10 each at a discount of 10%. The amount was payable as follows:

On application Rs 2 per share

On allotment Rs 3 per share

On first and final - Balance

Applications for 1,10,000 shares were received. Application for 10,000 shares were rejected. Shares were allotted on pro-rata basis to the remaining applicants. Excess application money received on application was adjusted towards sums due on allotment. All calls were made and were duly received. Manoj who had applied for 2,000 shares failed to pay the allotment and first and final call. His shares were forfeited. The forfeited shares were re-issued for Rs 24,000 fully paid up.

Pass necessary Journal entries in the books of the company for the above transaction.