Board Paper of Class 12-Commerce 2013 Accountancy All India(SET 2) - Solutions

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

At what rate is interest paid by the company on calls-in-advance, if it has not prepared its own Articles of Association? (1)

Give the Journal entry to distribute ‘Workmen Compensation Reserve’ of Rs 70,000 at the time of retirement of Neeti when there is a claim of Rs 25,000 against it. The firm has three partners Raveena, Neeti and Rajat. (1)

What is meant by ‘Calls-in-Arrears’? (1)

At what rate is interest payable on the amount remaining unpaid to the executor of decreased partner? (1)

State the ratio in which the partners share the accumulated profits when there is a change in the profit sharing ratio amongst existing partners. (1)

If the partners’ capitals are fixed, where will you record the interest charged on drawings? (1)

Pass the necessary Journal entries for the issue of Debentures in the following cases:

(a) Rs 40,000, 15% Debentures of Rs 100 each issued at par redeemable at 10% premium.

(b) Rs 90,000, 15% Debentures of Rs 100 each issued at a discount of 5% redeemable at premium of 10%. (1)

Mohan, Neeraj and Peeyush are partners in a firm. They contributed Rs 75,000 each as capital three years ago. At that time Peeyush agreed to look after the business as Mohan and Neeraj were busy. The profits for the past three years were Rs 45,000, Rs 30,000 and Rs 60,000 respectively. While going through the books of accounts, Mohan noticed that profit had been distributed in 1 : 1 : 2 ratio. When he enquired from Peeyush about this, Peeyush answered that since he looked after the business he should get more profit. Mohan disagreed and it was decided to distributed profits equally with retrospective effect for the last three years.

(a) You are required to make necessary corrections in the books of accounts of Mohan, Neeraj and Peeyush by passing an adjustment entry.

(b) Identify the value which is being ignored by Peeyush. 2 + 1 = 3

Tanya Construction Ltd. had an outstanding balance of Rs 19,00,000, 14% debentures of Rs 100 each redeemable at par. According to the terms of redemption, the company redeemed 50% of t he above debentures by converting them into shares of Rs 10 each at a premium of 25%. Record the entries for redemption of Debentures in the books of Tanya Constructions Ltd. (3)

Asin and Shreyas are partners in a firm. They admit Ajay as a new partner with 1/5^th share in the profits of the firm. Ajay brings Rs 5,00,000 as his share of capital. The value of the total assets of the firm was Rs 15,00,000 and outside liabilities were valued at Rs 5,00,000 on that date. Give the necessary Journal entry to record goodwill at the time of Ajay’s admission. Also show your workings. (4)

The authorised capital of Suhas Ltd. is Rs 50,00,000 divided into 25,000 shares of Rs 200 each. Out of these, the company issued 12,000 shares of Rs 200 each at a premium of 10%.

The amount per share was payable as follows:

Rs 60 on application

Rs 60 on allotment (including premium)

Rs 30 on first call and balance on final call

Public applied for 11,000 shares. All the money was duly received.

Prepare an extract of Balance Sheet of Suhas 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)

Nikhil Ltd. purchased a running business from Sonia Ltd. for a sum of Rs 22,00,000 by issuing 20,000 fully paid equity shares of Rs 100 each at a premium of 10%. The assets and liabilities consisted of the following:

Machinery Rs 7,00,000, Debtors Rs 2,50,000, Stock Rs 5,00,000, Building Rs 11,50,000 and Bills Payable Rs 2,50,000.

Pass necessary Journal entries in the books of Nikhil Ltd. for the above transactions. (4)

Nandan, John and Rosa are partners sharing profits in the ratio of 4 : 3 : 2. On 1^st April 2012, John gave a notice to retire from the firm. Nandan and Rosa decided to share future profits in the ratio of 1 : 1. The capital accounts of Nandan and Rosa after all adjustments showed a balance of Rs 43,000 and Rs 80,500 respectively. The total amount to be paid to John was Rs 95,500. This amount was to be paid by Nandan and Rosa in such a way that their capitals become proportionate to their new profit sharing ratio. Pass necessary Journal entries in the books of the firm for the above transactions. Show your working clearly. (4)

Anand, Bhaskar and Dinkar are partners in a firm. On 1^st April 2011 the balance in their capital accounts stood at Rs 10,00,000, Rs 8,00,000 and Rs 6,00,000 respectively. They shared profits in the proportion of 5 : 4 : 3 respectively. Partners are entitled to interest on capital @ 10% per annum and salary to Bhaskar @ Rs 4,000 per month and a commission of Rs 16,000 per quarter to Dinkar as per the provisions of the partnership deed.

Anand’s share of profit (excluding interest on capital) is guaranteed at not less than Rs 1,90,000 p.a. Bhaskar’s share of profit (including interest on capital but excluding salary) is guaranteed at not less than Rs 2,45,000 p.a. Any deficiency arising on that account shall be met by Dinkar. The profits of the firm for the year ended 31^st March 2012 amounted to Rs 8,32,000. Prepare ‘Profit and Loss Appropriation Account’ for the year ended 31^st March 2012. (6)

The Balance Sheet of Ram, Shyam and Mohan, who were sharing profits in the ratio of 7 : 4 : 3 respectively, as on 31^st March 2012 was as follows:

Shyam died on 30^th June 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 which were Rs 90,000.

(b) Shyam’s share of profit till the date of his death was to be calculated on the basis of sales. Sales for the year ended 31^st March 2012 amounted to Rs 9,00,000 and that from 1^st April to 30^th June 2012 Rs 5,40,000. The profit for the year ended 31^st March 2012 was Rs 2,50,000.

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

(d) According to Shyam’s will, the executors should donate his share to ‘Matri Chaya − an orphanage for girls’.

Prepare Shyam’s Capital Account to be rendered to his executor. Also identify the value being highlighted in the question. (6)

Sarthak and Vansh are partners sharing profits 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. Mansi, a common friend, decides to help them. Therefore they admit her into partnership for 1/3^rd share in profits. She brings Rs 60,000 for goodwill and proportionate capital. At the time of admission of Mansi, the Balance Sheet of Sarthak and Vansh was as under:

It was decided to

(i) Reduce the value of Stock by Rs 10,000.

(ii) Plant is to be valued at Rs 80,000.

(iii) An amount of Rs 3,000 included in Creditors was not payable.

(iv) Half of the Investments were taken over by Sarthak and remaining were valued at Rs 25,000

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

OR

Prashant and Rajesh were partners in a firm sharing profits in the ratio of 3 : 2. In spite 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. Prashant was deputed to realise the assets and to pay the liabilities. He was paid Rs 1,000 as commission for his services. The financial position of the firm on 31^st March 2012 was as follows:

Following was agreed upon:

(i) Prashant agreed to pay off his wife’s loan.

(ii) Debtors realized Rs 24,000.

(iii) Rajesh took away all investments at Rs 27,000.

(iv) Building realized Rs 1,52,000.

(v) Creditors were payable after 2 months. They were paid immediately at 10% discount.

(vi) Bills Receivable were settled at a loss of Rs 1,400.

(vii) Realisation expenses amounted to Rs 2,500.

Prepare Realisation Account, Partners’ Capital Accounts and Cash Account to close the books of the firm. Identify the value being conveyed in the question.

Starplus Company issued for public subscription 1,50,000 shares of the value of Rs 100 each at a discount of 10% payable per share as follows:

Rs 20 on application, Rs 30 on allotment and Rs 40 on call.

The company received applications for 3,00,000 shares. The allotment was done as under:

(a) Applicants of 30,000 shares were allotted 10,000 shares.

(b) Applicants of 1,40,000 shares were allotted 80,000 shares.

(c) Remaining applicants were allotted 60,000 shares.

After adjusting excess money in allotment, the money was returned. Harit, a shareholder who had applied for 7,000 shares of group (b), failed to pay allotment and call money. Roshan, another shareholder who was allotted 6,000 shares, paid the call money along with the allotment. Roshan 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 in the following cases:

(a) X Ltd. forfeited 200 shares of Rs 100 each, Rs 70 called up, on which the shareholders had paid application and allotment money of Rs 50 per share. Out of these, 150 shares were re-issued to Naresh as Rs 70 paid up for Rs 80 per share.

(b) Y Ltd. forfeited 180 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, 160 shares were re-issued to Sanjay as Rs 8 called up for Rs 10 per share fully paid up.

(c) Z Ltd. forfeited 30 shares of Rs 100 each issued at a discount of Rs 10 per share for non-payment of first and final call money of Rs 30 per share. Out of these, 20 shares were reissued at Rs 30 per share fully paid up.