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Studymate Solutions to CBSE Board Examination 2018-2019
Series : BVM/1 Code No. 67/1/1
Roll No.
4 Please check that this question paper contains 19 printed pages.
4 Code number given on the right hand side of the question paper should be written on the title page of the answer-book by the candidate.
4 Please check that this question paper contains 23 questions.
4 Please write down the Serial Number of the question before attempting it.
4 15 minute time has been allotted to read this question paper. The question paper will be distributed at 10.15 a.m. From 10.15 a.m. to 10.30 a.m., the students will read the question paper only and will not write any answer on the answer-book during this period.
ACCOUNTANCY[Time allowed : 3 hours] [Maximum marks : 80]
General Instructions:
(i) This question paper contains two parts – A and B.
(ii) Part A is compulsory for all.
(iii) Part B has two options – Analysis of Financial Statements and Computerised Accounting.
(iv) Attempt only one option of Part B.
(v) All parts of a questions should be attempted at one place.
Candidates must write the Code on the title page of the answer-book.
Disclaimer: All model answers in this Solution to Board paper are written by Studymate Subject Matter Experts. ThisisnotintendedtobetheofficialmodelsolutiontothequestionpaperprovidedbyCBSE. Thepurposeofthissolutionistoprovideaguidancetostudents.
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Part A[Accounting for Partnership Firms and Companies]
1. AtulandNeerawerepartners inafirmsharingprofits in the ratioof3 :2.TheyadmittedMitaliasanewpartner.Goodwillofthefirmwasvaluedat`2,00,000.Mitalibringshershareofgoodwillpremiumof`20,000incash,whichisentirelycreditedtoAtul’sCapitalAccount.Calculatethenewprofitsharingratio.
Ans.Atul :Neera 3:2 Goodwill =` 2,00,000 Mitali’sshare=2,00,000×x=20,000
x=1
10
Atul = − =
−=
35
110
6 110
510
Neera = =
25
410
Mitali = 110
NewRatio=5:4:12. Whatismeantby‘IssuedCapital’?
OR Whatismeantby‘EmployeesStockOptionPlan’?Ans. Issuedcapitalmeanssuchcapitalasthecompanyissuesfromtimetotimeforsubscription–
Section2(50)ofthecompaniesAct2013.OR
ESOPmeansoptiongrantedbythecompanytoitsemployees&employeedirectorstosubscribethesharesatapricethatislowerthanthemarketpricei.e.fairvalue.Itisanoptiongrantedbythecompanybutitisnotanobligationontheemployeetosubscribeit.
3. DifferentiatebetweenDissolutionofpartnershipandDissolutionofaPartnershipFirmonthebasisof‘Court’sIntervention’.
Ans.
Base Dissolution of Partnership Dissolution of FirmCourt’sIntervention Courtdoesnot intervenebecause
partnershipisdissolvedbymutualagreement.
Afirmcanbedissolvedbycourt’sorder.
4. Whatismeantby‘GainingRatio’onretirementofapartner?OR
P,QandRwerepartnersinafirm.On31stMarch.2018Rretired.TheamountpayabletoR`2,17,000wastransferredtohisloanaccount.RagreedtoreceiveinterestonthisamountaspertheprovisionsofPartnershipAct,1932.StatetherateatwhichinterestwillbepaidtoR.
Ans.TheratioinwhichretiringPartner’sShareisdistributedbetweenremainingPartneriscalledgainingratio.
OR Rateofinterestwillbe6%p.a.5. ChhaviandNehawerepartnersinafirmsharingprofitsandlossesequally.Chhaviwithdrew
afixedamountatthebeginningofeachquarter.Interestondrawingsischarged@6%p.a.Attheendoftheyear,interestonChhavi’sdrawingsamountedto`900.Passnecessaryjournalentryforcharginginterestondrawings.
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Ans. Date Particulars L.F. Dr. (`) Cr. (`)
ChhaviCapitalA/c Dr. ToInterestonDrawingsA/c(BeingInterestonDrawingsischarged)
900900
6. How are Specific donations treated while preparing final accounts of a ‘Not-For-ProfitOrganisation’?
OR Statethebasisofaccountingofpreparing‘IncomeandExpenditureAccount’ofaNot-For-Profit
Organisation.Ans.Specificdonationistreatedascapitalreceipt&itisshownonliabilitiessideofBalanceSheet.
OR Accrualbasis.7. Thecapital of thefirmofAnujandBenu is`10,00,000and themarket rateof interest is
15%.Annualsalarytothepartnersis`60,000each.Theprofitforthelastthreeyearswere`3,00,000,`3,60,000and`4,20,000.Goodwillofthefirmistobevaluedonthebasisoftwoyearspurchaseoflastthreeyearsaveragesuperprofits.Calculatethegoodwillofthefirm.
Ans. Average Profit = + +3 00 000 3 60 000 4 20 0003
, , , , , ,
= =
10 80 0003
3 60 000, , , ,
Normal Profit = × =10 00 000 15100
1 50 000, , , ,
SuperProfit=AverageProfit–NormalProfit–Remuneration =3,60,000–1,50,000–1,20,000=90,000 Goodwill=S.P.×No.ofyearsPurchased =90,000×2=1,80,0008. Howthefollowingitemsfortheyearended31stMarch,2018willbepresentedinthefinancial
statementsofAiskoClub:
Particulars Debit Amount (`) Credit Amount (`)TournamentFund
TournamentFundInvestments
IncomefromTournamentFundInvestments
TournamentExpenses
–
1,50,000
–
12,000
1,50,000
–
18,000
–
AdditionalInformation: InterestAccruedonTournamentFundInvestments`6,000Ans. Balance Sheet as on 31st March, 2018
Liabilities Amount Assets AmountTournamentFund 1,50,000+Incomefrom T.FundInvestment 18,000+AccruedInterest 6,000–TournamentExpenses –12,000 1,62,000
T.FundInvestmentAccruedInterest
1,50,0006,000
9. GarvitLtd.invitedapplicationsforissuing3,000,11%Debenturesof`100eachatadiscountof 6%. The full amount was payable on application. Applications were received for 3,600debentures. Applications for 600 debentures were rejected and the applicationmoneywasrefunded.Debentureswereallottedtotheremainingapplicants.
PassthenecessaryjournalentriesfortheabovetransactionsinthebooksofGarvitLtd.
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OR On1stApril2015,PLtd.Issued6,00012%Debenturesof`100eachatparredeemableata
premiumof7%.TheDebenturesweretoberedeemedattheendofthirdyear.PrepareLossonissueof12%DebenturesAccount.
Ans. Books of Garvit Ltd.
Date Particulars L.F. Dr. (`) Cr. (`)BankA/c Dr. ToDebentureApplication&AllotmentA/c(Beingdebentureapplicationmoneyreceived)
3,38,4003,38,400
DebentureApplication&AllotmentA/c Dr.DiscountonissueofDebentureA/c Dr. To11%DebenturesA/c ToBankA/c(Beingapplicationmoneytransferred)
3,38,40018,000
3,00,00056,400
OR LossonissueofDebenture=6,000×7=` 42,000
Losstobew/operyear=42 000
3,
=` 14,000
Dr. Loss on Issue of Debentures Account Cr.
Date Particulars Amount Date Particulars Amount2015April1 To12%Debenture 42,000
2016March31 ByStatementofProfit&Loss
ByBalancec/d14,00028,000
42,000 42,0002016April1 ToBalanceb/d 28,000
2017March31 ByStatementofProfit&Loss
ByBalancec/d14,00014,000
28,000 28,0002017April1 ToBalanceb/d 14,000
2018March31 ByStatementofProfit&Loss 14,000
14,000 14,000
10. UnilinkLtd.hadoutstanding`12,00,000,9%debentureson1stApril,2014redeemableatapremiumof8%intwoequalannualinstalmentsstartingfrom31stMarch,2018.Thecompanyhadabalanceof`3,00,000inDebentureRedemptionReserveon31stMarch,2017.PassthenecessaryjournalentriesforredemptionofdebenturesinthebooksofUnilinkLtd.fortheyearended31stMarch,2018.
Ans. In the books of Unilink Ltd.Journal
Date Particulars L.F. Dr. (`) Cr. (`)2017
30April DebentureredemptioninvestmentA/c Dr. ToBankA/c(BeingDebentureredemptioninvestmentcreated)
90,00090,000
201831Mar. BankA/c Dr.
ToDebentureredemptioninvestmentA/c(BeingDebentureredemptioninvestmenten-cashed)
90,00090,000
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201831Mar. 9%DebentureA/c Dr.
PremiumonRedemptionofDebentureA/c Dr. ToDebentureHolderA/c(Being Debenture redemption amount is due todebentureholder)
6,00,00048,000
6,48,000
201831Mar. DebentureHolderA/c Dr.
ToBankA/c(Beingredemptionamountpaidtodebentureholder)
6,48,0006,48,000
201831Mar. DebentureRedemptionReserveA/c Dr.
ToGeneralReserveA/c(BeingproportionateamountofDRRtransferred)
1,50,0001,50,000
11. Ankit,BobbyandKartikwerepartnersinafirmsharingprofitsintheratio4:3:3.Thefirmwasdissolvedon31-3-2018.Passthe_necessaryJournalentriesforthefollowingtransactionsaftervariousassets(otherthancashandbank)andthirdpartyliabilitieshadbeentransferredtoRealisationAccount:
(i) Thefirmhadstockof`80,000.Ankittookover50%ofthestockatadiscountof20%whiletheremainingstockwassoldoffataprofitof30%oncost.
(ii) A liability under a suit for damages included in creditorswas settled at ` 32,000 asagainstonly`13,000providedinthebooks.Totalcreditorsofthefirmwere`50,000.
(iii) Bobby’ssister’sloanof`20,000waspaidoffalongwithinterestof`2,000. (iv) Kartik’sLoanof`12,000wassettledat`12,500.Ans. In the Books of Firm Journal
Date Particulars L.F. Dr. (`) Cr. (`)(i) AnkitCapitalA/c Dr.
Cash/BankA/c Dr. ToRealisationA/c(Beinghalfstocksold&halfstocktakenbyAnil)
32,00052,000
84,000
(ii) RealisationA/c Dr. ToCash/BankA/c(Beingcreditorandcontingentliabilitiessettled)
69,00069,000
(iii) RealisationA/c Dr. ToCash/BankA/c(BeingBobby’ssister’sloanpaidoffalongwithinterest)
22,00022,000
(iv) Kartik’sLoanA/c Dr.RealisationA/c Dr. ToCash/BankA/c(BeingKartik’sloanpaidoff)
12,000500
12,500
12. Radhika,BaniandChitrawerepartners inafirmsharingprofitsand losses in theratioof2:3:1.Witheffectfrom1stApril,2018theydecidedtosharefutureprofitsandlossesintheratioof3:2:1.OnthatdatetheirBalanceSheetshowedadebitbalanceof`24,000inProfitandLossAccountandabalanceof`1,44,000inGeneralReserve.Itwasalsoagreedthat:
(a) Thegoodwillofthefirmbevaluedat`1,80,000. (b) TheLand(havingbookvalueof`3,00,000)willbevaluedat`4,80,000. Passthenecessaryjournalentriesfortheabovechanges.
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Ans. In the Books of Firm Journal
Date Particulars L.F. Dr. (`) Cr. (`)(i) Radhika’sCapitalA/c Dr.
Bani’sCapitalA/c Dr.Chitra’sCapitalA/c Dr. ToProfit&LossA/c(BeingbalanceofP/LA/cwrittenoff)
8,00012,0004,000
24,000
(ii) GeneralReserveA/c Dr. ToRadhika’sCapitalA/c ToBani’sCapitalA/c ToChitra’sCapitalA/c(BeingG.R.distributed)
1,44,00048,00072,00024,000
(iii) LandA/c Dr. ToRevaluationA/c(Beinglandappreciated)
1,80,0001,80,000
(iv) RevaluationA/c Dr. ToRadhika’sCapitalA/c ToBani’sCapitalA/c ToChitra’sCapitalA/c(Beingprofitofrevaluationdistributed)
1,80,00060,00090,00030,000
(v) Radhika’sCapitalA/c Dr. ToBani’sCapitalA/c(Being current goodwill adjusted profit of revaluationdistributed)
30,00030,000
Working Note: GainingRatio=NewRatio–OldRatio
Radhika’sG.R. = − =36
26
16
Bani’sG.R. = − = −26
36
16
Chitra’sG.R. = − =16
16
0
SoRadhikagainby16&Banisacrificeby
16
AdjustmentamountofGoodwill
Radhika&Banieach=1,80,000×16=30,000
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13. FromthefollowingReceiptsandPaymentsAccountandadditionalinformation,prepareIncomeandExpenditureAccountandBalanceSheetofSearsClub,NoidaasonMarch31.2018.
ReceiptsandPayments&AccountofSearsClubfortheyearended31-3-2018Receipts Amount Payment Amount
ToBalanceb/dToSubscriptions2016-17 40,0002017-18 94,0002018-19 7,200ToDonationsforbuildingToInterestonInvestmentsToGovernmentGrantToSaleofoldfurniture(Bookvalue`4.000)
20,000
1,41,20040,000
80017,4001,600
ByStationeryBy12%InvestmentsByElectricityexpensesByExpensesonlecturesBySportsEquipmentByBooksByBalancec/d
23,4008,000
10,60030,00059,00040,00050,000
2,21,000 2,21,000 AdditionalInformation: (i) Theclubhas200memberseachpayinganannualsubscriptionof̀ 1,000.̀ 60,000were
inarrearsforlastyearand25memberspaidinadvanceinthelastyearforthecurrentyear.
(ii) Stockofstationeryon1-4-2017was`3,000andon31-3-2018was`4,000.Ans. In the books of Sears Club, Noida
Income and Expenditure A/c Dr. for the year ended 31.3.208 Cr.
Particulars Amount (`) Particulars Amount (`)ToLossonsaleoffurnitureToStationery 23,400+Openingstock 3,000–Closingstock 4,000ToElectricityexpensesToExp.onlecturesToSurplus
2,400
22,40010,60030,000
1,52,960
BySubscription 1,41,200–Openingo/s 60,000+Closingo/s(W/N) 1,01,000+OpeningAdv. 25,000–ClosingAdv. 7,200ByInterestoninv. 800+Accruedinterest 160ByGovt.grant
2,00,000
96017400
2,18,360 2,18,360Balance Sheet
as at 31st March, 2018
Liabilities Amount Assets AmountDonationforbuildingAdvancesubscriptionCapitalfund 62,000Add:Surplus 1,52,960
40,0007,200
2,14,960
CashinhandOutstandingsubscriptionStockofstationery12%InvestmentAccruedinterestonInvestmentBooksSportsEquipment
50,0001,01,000
4,0008,000160
40,00059,000
2,62,160 2,62,160
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Working Note 1:
Liabilities Amount Assets AmountAdvancesubscriptionCapitalfund(B/F)
25,00062,000
CashinhandOutstandingsubscriptionStockofstationeryFurniture
20,00060,0003,0004,000
87,000 87,000 Working Note 2: Totalsubscriptionperannum(1000×200) = 2,00,000 –Alreadyreceivedinadvanceinlastyear = 25,000 = 1,75,000 –Receivedincurrentyear = 94,000 o/sofcurrentyear(2018)=81,000 Remainingo/soflastyear(2017) = 20,000 (60,000–40,000) Totalo/sason31.3.2018 = 1,01,00014. Giriija,YatinandZubinwerepartnerssharingprofitsintheratio5:3:2.Zubindiedon1st
August,2015.AmountduetoZubin’sexecutorafteralladjustmentswas̀ 90,300.Theexecutorwas paid `10,300incashimmediatelyandthebalanceintwoequalannualinstalmentswithinterest@6%p.a.startingfrom31stMarch,2017.Accountsarcclosedon31stMarcheachyear
PrepareZubin’sExecutor’sAccounttillheisfinallypaid.Ans. Dr. Zubin’s Executor’s A/c Cr.
Date Particulars Amount (`)
Date Particulars Amount (`)
2015Aug.12016
March31
ToBankA/c
ToBalancec/d
10,300
83,200
2015Aug.12016
March31
ByZubin’sCapitalA/c
ByInterestdue
80 000 6100
812
, × ×
90,300
3,200
93,500 93,5002017
March31
March31
ToBankA/c
ToBalancec/d
48,000
40,000
2017April12017
March31
ByBalanceb/d
ByInterestdue
80 000 6100
, ×
83,200
4,800
88,000 88,0002018
March31 ToBankA/c 42,4002017April12018
March31
ByBalanceb/d
ByInterestdue
40 000 6100
, ×
40,000
2,400
42,400 42,400
Note : Interestonloanhasbeencalculatedonsimpleinterestbasis.
STUDYmate
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15. SonuandRajatstartedapartnershipfirmonApril1,2017.Theycontributed` 8,00,000and` 6,00,000respectivelyastheircapitalsanddecidedtoshareprofitsandlossesintheratioof3:2.ThepartnershipdeedprovidedthatSonuwastobepaidasalaryof`20,000permonthandRajatacommissionof5%onturnover.Italsoprovidedthatinterestoncapitalbeallowed@8%p.a.Sonuwithdrew`20,000on1stDecember,2017andRajatwithdrew`5,000attheendofeachmonth.Interestondrawingswascharged@6%p.a.ThenetprofitasperProfitandLossAccountfortheyearended31stMarch,2018was`4,89,950.Theturnoverofthefirmfortheyearended31stMarch,2018amountedto`20,00,000.PassnecessaryjournalentriesfortheabovetransactionsinthebooksofSonuandRajat.
OR Jay,VijayandKaranwerepartnersofanarchitectfirmsharingprofitsintheratioof2:2:1.
Theirpartnershipdeedprovidedthefollowing: (i) Amonthlysalaryof`15.000eachtoJayandVijay. (ii) Karanwasguaranteedaprofitof`5,00,000andJayguaranteedthathewillearn/an
annualfeeof`2,00,000.AnydeficiencyarisingbecauseofguaranteetoKaranwillbebornebyJayandVijayintheratioof3:2.
Duringtheyearended31stMarch,2018Jayearnedfeeof̀ 1,75,000andtheprofitsofthefirmamountedto`15,00,000.
ShowingyourworkingsclearlyprepareProfitandLossAppropriationAccountandtheCapitalAccountofJay,VijayandKaranfortheyearended31stMarch2018.
Ans. In the Book of Sonu and RajatJournal
Date Particular LF Dr(`) Cr(`)2018
March31
ProfitandlossA/c Dr. ToP/LAppropriationA/c(BeingProfittransferredfromP/LA/ctoP/LApp.A/c)
4,89,9504,89,950
March31 InterestonCapitalA/c Dr. ToSonu’sCapitalA/c ToRajat’sCapitalA/c(BeinginterestonCapitalallowed)
1,12,00064,00048,000
March31 P/LAppropriationA/c Dr. TointerestoncapitalA/c(BeinginterestoncapitaltransferredtoP/Lappropriation
A/c)
1,12,0001,12,000
March31 Sonu’scapitalA/c Dr.Rajat’scapitalA/c Dr. Tointerestondrawings
4001,650
2,050March31 InterestonDrawings Dr.
ToP/LappropriationA/c(BeingIODtransferredtoP/Lapp.A/c)
2,0502,050
March31 SalaryA/c Dr. ToSonu’sCapitala/c(BeingSalaryallowedtosonu)
2,40,0002,40,000
March31 Commission Dr. ToRajat’sCapitalA/c(BeingcommissionallowedtoRajat)
1,00,0001,00,000
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March31 ProfitandLossAppropriation Dr. ToSalary ToCommission(Beingsalaryandcommission....toP/Lapp.A/c)
3,40,0002,40,0001,00,000
March31 P/LAppropriationA/c Dr. ToSonu’sCapitalA/c ToRajata’sCapitalA/c(BeingProfitdistributed)
40,00024,00016,000
InterestonCapital:
Sonu=8 00 000 8100
64 000, , ,× =
Rajat=6 00 000 8100
48 000, , ,× =
InteretonDrawings:
Sonu=20 000 6100
412
400, × × =
Rajat= 5000 12 6100
5 512
×( )× ×.
60 000 6100
5 512
1650, .× × =
CommissiontoRajat=20 00 000 5100
1 00 000, , , ,× =
ProfitofP/LAppropriationA/c=Totalofcredit–TotalofDebit (4,89,950+2,050)–(1,12,000+3,40,000) =4,92,000–4,52,000 =40,000
OR Dr. P & L Appropriation A/c Cr.
Particulars Amount (`) Particulars Amount (`)Salary Jay 1,80,000 Vijay 1,80,000ProfitT/FtoJay’sCapitalA/c 4,66,000LessDef. –1,60,200Vijay’sCapitalA/c 4,66,000LessDef. –1,06,800Karan’sCapitalA/c 2,33,000Add:Def.byJay 1,60,200Def.byVijay 1,06,800
3,60,000
3,05,800
3,59,200
5,00,000
NetprofitasperP&LA/cJay’scapitalA/c(grossfee)
15,00,00025,000
15,25,000 15,25,000
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Partners’ Capital Account
Particulars Jay Vijay karan Particulars Jay Vijay karan
ToP&LAppro.A/c
ToBalancec/d
25,000
4,60,800 5,39,200 5,00,000
BySalary
ByP&LAppro.A/c
1,80,000
3,05,800
1,80,000
3,59,200 5,00,000
4,85,800 5,39,200 5,00,000 4,85,800 5,39,200 5,00,000
Profittodistributed=`11,65,000 GuaranteetoKaran=`5,00,000 Deficiencysomeby=5,00,000–2,33,000
JayandVijay = 2,67,000
3:2
16. DFLtd.invitedapplicationforissuing50,000sharesof`10eachatapremiumof` 2pershare.Theamountwaspayableasfollow:
OnApplication : `3pershare(includingpremium`1) OnAllotment : `3pershare(includingpremium`1) OnFirstcall : `3pershare OnSecondandFinalCall : Balanceamount Applicationfor70,000shareswerereceived.Allotmentwasmadeonthefollowingbasis. Applicationsfor5,000shares–Full Applicationsfor50,000shares–90% Balanceoftheapplicationswererejected.`1,11,000werereceivedonaccountofallotment.The
amountofallotmentduefromtheshareholderstowhomshareswereallottedonproratabasiswasfullyreceived.Afewshareholderstowhomshareswereallottedinfull,failedtopaytheallotmentmoney.̀ 1,20,000werereceivedonfirstcall.Directorsdecidedtoforfeitthosesharesonwhichallotmentandcallmoneywasdue.Halfoftheforfeitedshareswerere-issued@̀ 8persharefullypaidup.Finalcallwasnotmade.
PassthenecessaryjournalentriesfortheabovetransactionsinthebookofDFLtd.OR
EFLtd.invitedapplicationsforissuing80,000equitysharesof`50eachatapremiumof20%.Theamountwaspayableasfollows:
OnApplication : `20pershare(includingpremium`5) OnAllotment : `15pershare(includingpremium`5) OnFirstCall : `15pershare OnSecondandFinalcall : Balanceamount Applicationsfor1,20,000shareswerereceived.Applicationsfor20.000shareswererejected
andpro-rataallotmentwasmadetotheremainingapplicants. Seema,holding4,000sharesfailedtopaytheallotmentmoney.Afterwardsthefirstcallwas
made.Seemapaidallotmentmoneyalongwiththefirstcall.Sahajwhohadappliedfor2,500sharesfailedtopaythefirstcallmoney.Sahaj’sshareswereforfeitedandsubsequentlyreissuedtoGeetafor` 60pershare,`50persharepaidup.Finalcallwasnotmade.
PassnecessaryjournalentriesfortheabovetransactionsinthebooksofEFLtd.byopeningcalls-in-arrearsaccount
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Ans.Errorinoption(A)as8,000shareholdershavenotpaidallotmentamount(` 1,11,000)whereasonly5,000sharesholdershavenotpaidallotmentamountasperquestion.
OR In the Books of Firm Journal Entries (EF Ltd.)
Date Particulars L.F. Dr. (`) Cr. (`)BankA/c Dr. ToEquityShareApplicationA/c(Beingapplicationamountreceived)
24,00,00024,00,000
EquityShareApplicationA/c Dr. ToEquityShareCapitalA/c ToBankA/c ToEquityShareAllotmentA/c ToSecurityPremiumReserveA/c(Beingapplicationamountadjusted)
24,00,00012,00,0004,00,0004,00,0004,00,000
EquityShareAllotmentA/c Dr. ToEquityShareCapitalA/c ToSecurityPremiumReserveA/c(Beingallotmentamountdue)
12,00,0008,00,0004,00,000
BankA/c Dr.CallsinArrearA/c Dr. ToEquityShareAllotmentA/c(12,00,000–4,00,000)(Beingallotmentamountreceived)
7,60,00040,000
8,00,000
EquityShareICallA/c Dr. ToEquityShareCapitalA/c(Beingfirstcallamountdue)
12,00,00012,00,000
BankA/c Dr. ToEquityShareICallA/c ToCallsinArrearA/c(40,000–30,000)(Beingfirstcallamountreceived)
12,10,00012,00,000
10,000
EquityShareCapitalA/c(2,000×40) Dr. ToShareForfeitureA/c ToCallsinArrearA/c(Beingshareforfeited)
80,00050,00030,000
BankA/c(2,000×60) Dr. ToEquityShareCapitalA/c(2,000×50 ToSecurityPremiumReserveA/c(BeingshareReissued)
1,20,0001,00,00020,000
ShareForfeitureA/c Dr. ToCapitalReserveA/c(BeingForfeitureamounttransferredtoCapitalReserve)
50,00050,000
17. Akul,BakulandChandanwerepartnersinafirmsharingprofitsintheratioof2:2:1.On31stMarch,2018theirBalanceSheetwasasfollows:
Balance Sheet of Akul. Bakul and Chandan as on 31-3-2018Liabilities Amount Assets Amount
SundryCreditorsEmployeesProvidentFundGeneralreserveCapitals: Akul 1,60,000 Bakul 1,20,000 Chandan 92,000
45,00013,00020,000
3,72,000
CashatBankDebtors 60,000Less:Provisionfordoubtfuldebts 2,000StockFurniturePlantandMachinery
42,000
58,00080,00090,000
1,80,0004,50,000 4,50,000
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Bakulretiredontheabovedateanditwasagreedthat: (i) PlantandMachinerywasundervaluedby10%. (ii) Provisionfordoubtfuldebtswastobeincreasedto15%ondebtors. (iii) Furniturewastobedecreasedto`87,000. (iv) Goodwillofthefirmwasvaluedat̀ 3,00,000andBakul’ssharewastobeadjustedthrough
thecapitalaccountsofAkulandChandan. (v) Capitalofthenewfirmwastobeinthenewprofitsharingratioofthecontinuingpartners. Prepare Revaluation account, Partners’ Capital accounts and the Balance Sheet of the
reconstitutedfirm.OR
SanjanaandAlokwerepartnersinafirmsharingprofitsandlossesintheratio3:2.On31stMarch,2018theirBalanceSheetwasasfollows:
Balance Sheet of Akul. Bakul and Chandan as on 31-3-2018Liabilities Amount Assets Amount
CreditorsWorkmen’sCompensationFundCapitals: Sanjana 5,00,000 Alok 4,00,000
60,00060,000
9,00,000
CashDebtors 1,46,000Less:Provisionfordoubtfuldebts 2,000StockInvestmentsFurniture
1,66,000
1,44,0001,50,0002,60,0003,00,000
10,20,000 10,20,000 On1stApril,2018,theyadmittedNidhiasanewpartnerfor1/4thshareintheprofitsonthe
followingterms: (a) Goodwillofthefirmwasvaluedat`4,00,000andNidhibroughtthenecessaryamountin
cashforhershareofgoodwillpremium,halfofwhichwaswithdrawnbytheoldpartners. (b) Stockwastobeincreasedby20%andfurniturewastobereducedto90%. (c) Investmentsweretobevaluedat`3,00,000.Aloktookoverinvestmentsatthisvalue. (d) Nidhibrought̀ 3,00,000ashercapitalandthecapitalsofSanjanaandAlokwereadjusted
inthenewprofitsharingratio. Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of the
reconstitutedfirmonNidhi’sadmission.Ans. Dr. Revaluation A/c Cr.
Particulars Amount Particulars AmountToProvisionforD/DToFurnitureToProfit: Akul 4,000 Bakul 4,000 Chandan 2,000
7,0003,000
10,000
ByPlantandMachineryA/c 20,000
20,000 20,000 Dr. Partners’ Capital Account Cr.
Particulars Akul Bakul Chandan Particulars Akul Bakul Chandan
ToBakul’sCapitalToLoanA/cToBankA/c’ToBalancec/d
80,000
1,00,000
2,52,00040,000
8,00050,000
ByBalanceb/dByAkul’sCapitalByChandan’sCapitalByG/RByRevaluationA/cByBankA/c
1,60,000
8,0004,0008,000
1,20,00080,00040,0008,0004,000
92,000
4,0002,000
1,80,000 2,52,000 98,000 1,80,000 2,52,000 98,000
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Balance Sheet (as at 31/3/18)Liabilities Amount Assets Amount
CreditorsEmployeesProvidentFundBakul’sLoanCapitals: Akul 1,00,000 Chandan 50,000
45,00013,000
2,52,000
1,50,000
PlantandMachinery 1,80,000 +20,000Debtors(60,000–9,000)StockFurniture(90,000–3,000)Bank(42,000+8,000–8,000)
2,00,00051,00080,00087,00042,000
4,60,000 4,60,000OR
Dr. Revaluation A/c Cr.
Particulars Amount (`) Particulars Amount (`)To FurnitureTo Profit: Sanjana 24,000 Alok 16,000
30,000
40,000
ByStockByInvestment
30,00040,000
30,000 70,000 Dr. Partners’ Capital A/c Cr.
Particulars Sanjana Alok Nidhi Particulars Sanjana Alok Nidhi
ToCashA/c
ToInvestment
ToCashA/c
ToBal.c/d
30,000
50,000
5,40,000
20,000
3,00,000
3,60,000 3,00,000
ByBalanceb/d
ByCash
ByPrem.forG/W.A/c
ByWorkm.Comp.Fund
ByRevaluationA/c
ByCashA/c*
5,00,000
60,000
36,000
24,000
4,00,000
40,000
24,000
16,000
2,00,000
3,00,000
6,20,000 6,80,000 3,00,000 6,20,000 6,80,000 3,00,000
Balance Sheet of New Firm As at 31.3.2018
Liabilities Amount (`) Assets Amount (`)CreditorsCapitalA/c Sanjana 5,40,000 Alok 3,60,000 Nidhi 3,00,000
60,000
12,00,000
Cash 1,66,000+Nidhi’sCapital 3,00,000+Prem.forGoodwill 1,00,000(–)Prem.forGoodwill (30,000)(–)Alok’sCapital (20,000)(–)Sanjana’sCapital (50,000)(+)Alok’sCapital 2,00,000Debtors (1,46,000–2,000)Stock (1,50,000+30,000)Furniture (3,00,000–30,000)
6,66,0001,44,0001,80,0002,70,000
12,60,000 12,60,000
Part B
18. Mevo Ltd., a financial enterprise had advanced a loan of `3,00,000, invested `6,00,000 insharesoftheothercompaniesandpurchasedmachineryfor`9,00,000.Itreceiveddividendof`70,000oninvestmentinshares.Thecompanysoldanoldmachineofthebookvalueof`79,000atalossof`10,000.
ComputeCashflowsfromInvestingActivities.
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Ans.
Particulars AmountPurchaseofMachinery
SaleofMachinery
DividendReceivedon
Purchaseofshare(Investment)
Caseusedininvestingactivities
(9,00,000)
69,000
70,000
(6,00,000)
13,61,000
Note : Asitisclearlymentionedthatsharesarepurchasedforinvestment,Theyhavebeentreatedasinvestingactivities
19. Givethemeaningof‘CashEquivalents’forthepurposeofpreparingCashFlowStatement.Ans. “Castequivalents”meansshorttermhighlyliquidinvestmentsthatarereadilyconvertibleinto
knownamountofcash&whicharesubjecttoaninsignificantriskofchangesinvalue. ForEx-shorttermmarketablesecurities. The primary purpose of the statement of cash flows is to provide information about cash
receipt,cashpayments,andthenetchangeincashresultingfromtheoperating,investingandfinancingactivitiesofacompanyduringtheperiod.
20. Explainbrieflyanyfourobjectivesof‘AnalysisofFinancialstatements’.OR
Stateunderwhichmajorheadingsandsub-headingswillthefollowingitemsbepresentedintheBalanceSheetofacompanyasperSchedule-Ill,Part-IoftheCompaniesAct,2013.
(i) PrepaidInsurance (ii) InvestmentinDebentures (iii) Calls-in-arrears (iv) Unpaiddividend (v) CapitalReserve (vi) LooseTools (vii) Capitalwork-in-progress (viii) Patentsbeingdevelopedbythecompany.Ans.Fourobjectiveof‘AnalysisofFinancialstatementsareasfollow: (a) Toassessthecurrentprofitabilityandoperationalefficiencyofthefirmasawholeaswell
asitsdifferentdepartmentssoastojudgethefinancialhealthoffirm. (b) Toascertainthefinancialpositionoffirm. (c) Toidentifythereasonsforchangeintheprofitabilityandfinancialpositionofthefirm. (d) ToJudgetheabilityofthefirmtorepayitsdebtandassessingtheshot-termaswellas
thelongtermliquiditypositionofthefirm.OR
Items Major heads Sub-heads1.Prepaidinsurance CurrentAssets OthercurrentAssets2.Investmentindebenture Non-currentAssets Non-currentinvestment3.CallsinArrears ShareholdersFund Subscribedcapital (less from
subscribebutnotfullypaid)4.Unpaiddividend Currentliabilities Othercurrentliabilities5.CapitalReserve ShareholderFund Reserve&Surplus6.Loosetools CurrentAssets Inventories7.Capitalworkinprogress NonCurrentAssets FixedAssets
(Capitalworkinprogress)
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8.Patentbeingdevelopedbythecompany.
Non-currentAssets FixedAssets(intangibleassetunderdevelopment)
21. (a) CalculateRevenuefromoperationsofBNLtd.Fromthefollowinginformation: Currentassets `8,00,000. Quickratiois 1.5:1 Currentratiois 2:1 Inventoryturnoverratiois 6times Goodsweresoldataprofitof25%oncost. (b) The Operating ratio of a company is 60%. State whether ‘Purchase of goods costing
`20,000’willincrease,decreaseornotchangetheoperatingratio.OR
(a) Calculate‘TotalAssetstoDebtratio’fromthefollowinginformation: ` EquityShareCapital 4,00,000 LongTermBorrowings 1,80,000 Surplusi.e.BalanceinstatementofProfitandLoss 1,00,000 GeneralReserve 70,000 CurrentLiabilities 30,000 LongTermProvisions 1,20,000 (b) TheDebtEquityratioofacompanyis1:2.Statewhether‘Issueofbonusshares’will
increase,decreaseornotchangetheDebtEquityRatio.Ans. (a) CurrentAssets` 8,00,000 QuickRatio=1.5:1 CurrentRatio=2:1 Inventoryturnoverratio=6times CurrentRatio=2:1
⇒21=
Current AssetsCurrent liabilities
⇒21
8 00 000=
, ,CurrentLiabilites
Currentliabilities=` 4,00,000 Quickratio=1.5:1
⇒Quick Assets
CurrentLiabilites=
1 51.
QuickAssets=1.5×` 4,00,000 =` 6,00,000 So,Inventory=CurrentAssets–QuickAssets =` 8,00,000–` 6,00,000 =` 2,00,000. InventoryTurnoverRatiois6times
⇒Cost of goods sold(CRFO)
Inventory times
Average= 6
⇒ costofgoodsold(CRFO)=` 2,00,000×6 =` 12,00,000. Goodsweresoldataprofitof25%oncost. Profit=25%oncost
=25
100 ×` 12,00,000
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=` 3,00,000 Revenuefromoperation=cost(CRFO)+profit =` 12,00,000+` 3,00,000 =` 15,00,000 (b) Theoperating ratiowillnot change, as therewill be equal increase inpurchasesand
closinginventoryandhencecostofrevenuefromoperationwillremainunchanged.OR
(a) TotalAssetstoDebtRatio =Total Assets
Debt
=9 00 0003 00 000, ,, ,
=3times WhereTotalAssets=Totalliabilities =Sharecapital+longtermborrowings+surplus+GeneralReserve+CurrentLiabilities
+Longtermprovisions =` 4,00,000+` 1,80,000+` 1,00,000+` 70,000+` 30,000+` 1,20,000 =` 9,00,000 Debt=Longtermborrowings+longtermprovision =` 1,80,000+` 1,20,000 =` 3,00,000 (b) Debtequityratioofacompanywillnotchangeduetoissueofbonusshares,asneither
thedebtnorequityiseffectedbecauseR&Sisconvertingintosharecapital. 22. FromthefollowinginformationextractedfromtheStatementofProfitandLossforyearsended
31stMarch,2017and2018,prepareaComparativeStatementofProfit&Loss.
Particulars 2017-18 2016-17RevenuefromoperationsOtherincomes(%ofrevenuefromoperations)Employeebenefitexpenses(%ofTotalRevenue)Taxrate
`6,00,00020%40%50%
`5,00,00020%30%50%
Ans.Comparativestatementofprofit&lossfortheyearended31stMarch17&18.
Particulars Note No.
2016-17 (`)
2018-19 (`)
AbsoluteChange
PercentageChange
I. Revenuefromoperation
II. Add:otherincomes
III. TotalRevenue(I+II)
IV. Expense
Employeebenefitexpense
V. ProfitbeforeTax(III-IV)
Len:Tax(50%)
VI. ProfitAfterTax
5,00,000
1,00,000
6,00,000
1,20,000
1,00,000
20,000
20.00
20.006,00,000 7,20,000 1,20,000 20.00
1,80,000 2,88,000 1,08,000 60.00
4,20,000 4,32,000 12,000 02.85
2,10,000 2,16,000 6,000 02.852,10,000 2,16,000 6,000 02.85
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23. FromthefollowingBalanceSheetofKieroLtd.andtheadditionalinformationason31.3.2018,prepareaCashFlowStatement:
Kiero Ltd.Balance Sheet as at 31st March, 2018
Particulars Note No. 31-3-2018 (`) 31-3-2017 (`)I. Equity and liabilities: (1) Shareholders’ Funds: (a) ShareCapital (b)ReservesandSurplus (2) Non-current Liabilities Long-termborrowings (3) Current Liabilities (a) Short-termborrowings (b) Short-termprovisions
1
2
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7,90,0004,60,000
5,00,000
1,15,0001,18,000
5,80,0001,20,000
3,00,000
42,00046,000
Total 19,83,000 10,88,000II. Assets: (1) Non-current Assets: Fixed Assets: (i) Tangible (ii) Intangible (2) Current Assets: (a) CurrentInvestments (b) TradeInventories (c) Cash&CashEquivalents
56
9,80,0002,68,000
1,40,0004,40,0001,55,000
6,35,0001,70,000
70,0001,50,00063,000
Total 19,83,000 10,88,000 Notes to Accounts:
Note No. Particulars 31-3-2018 (`) 31-3-2017 (`)1 Reserves and Surplus
Surplus(BalanceinStatementofProfit&Loss)GeneralReserve
3,20,0001,40,000
60,00060,000
4,60,000 1,20,0002 Long-term borrowings:
12%Debentures 5,00,000 3,00,0005,00,000 3,00,000
3 Short-term borrowings:BankOverdraft 1,15,000 42,000
1,15,000 42,0004 Short-term provisions:
Provisionfortax 1,18,000 46,0001,18,000 46,000
5 Tangible Assets:PlantandMachineryLess:AccumulatedDepreciations
11,00,000(1,20,000)
7,50,000(1,15,000)
9,80,000 6,35,0006 Intangible Assets:
Goodwill 2,68,000 1,70,0002,68,000 1,70,000
Additional Information: 12%debentureswereissuedon1stSeptember,2017.
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Ans. Cash Flow Statement
Particular Amount (Rs.) Amount (Rs.) NetprofitasperP&LA/c Add: GeneralReserve Provisionfortax
2,60,00080,000
1,18,000
Net Profitbeforetaxandextraordinaryitems Add:Depreciation Interestondebenture
4,58,0005,000
50,000OperatingprofitbeforeworkingcapitalchangesAdd:DecreaseinC.A.andIncreaseinC.L.Less:IncreaseinC.A.anddecreaseinC.L.IncreaseinTradeReceivable
5,13,000NIL
(2,90,000)CashGeneratedfromoperationsLess:Taxpaid
2,23,000(46,000)
A. Cash flow from operating activities 1,77,000PurchaseofPlantandMachineryPurchaseofGoodwill
(3,50,000)(98,000)
B. Cash used in investing activities (4,48,000) Bankoverdraft Issueofsharescapital Issueofdebentures Paymentofinterestondebenture
73,0002,10,0002,00,000(50,000)
C. Cash flow from financing activities 4,33,000 A+B+C Netincreaseincashandcashequivalents Add:OpeningCashandCashequivalents(63,000+70,000)
1,62,000
1,33,000ClosingCashandCashequivalents(1,55,000+1,40,000) 2,95,000
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