Accountancy: 2014: CBSE: [Delhi]: Set – III

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  • Q1

    Give any one purpose for which the amount received as ‘Securities Premium’ may be utilized.

    Marks:1
    Answer:

    As per the Section 78 of the Companies Act, 1956, the amount of securities premium can be used by the company for writing off preliminary expenses.

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  • Q2

    Why heirs of a retiring/deceased partner are entitled to a share of goodwill of the firm?

    Marks:1
    Answer:

    The heirs of a retiring/deceased partner are entitled to a share of goodwill of the firm because after the retirement/death of a partner, the return of the collective past performances and reputation will be shared only by the continuing partners.

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  • Q3

    What is the maximum amount of discount at which forfeited shares can be re-issued?

    Marks:1
    Answer:

    The amount of discount which may be allowed on reissue is:

    Case

    Maximum possible discount on re-issue

    1. When the share were originally issued at par or at a premium

    Amount credited to share forfeiture account

    2. When the shares were originally issued at a discount

    Amount credited to share forfeiture account + Amount of original discount

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  • Q4

    Give the meaning of ‘Debenture’.

    Marks:1
    Answer:

    Debenture is a written acknowledgement of debt issued by the company under its common seal, containing conditions for the repayment of the principal sum and payment of interest.

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  • Q5

    Distinguish between ‘Dissolution of Partnership’ and ‘Dissolution of Partnership Firm’ on the basis of closure of books.

    Marks:1
    Answer:

    In case of dissolution of partnership the books of accounts are not closed forever, as there is only change in the existing agreement between the partners. However, in case of dissolution of partnership firm books of accounts are closed because the business is discontinued.

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  • Q6

    X.Y and Z are partners sharing profits in the ratio of 1 2  :  2 5  and  1 10 MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfKttLearuGu1bxzLbIrVjxyKLwyUbqedm vETj2BSbWexLMBbXgBcf2CPn2qVrwzqf2zLnharyWqVvNCPvMCG4uz 3bqegqvATv2CG4uz3bIuV1wyUbqee0evGueE0jxyaibaieYtf9irVe eu0dXdh9vqqj=hEeeu0xXdbba9frFj0=OqFfea0dXdd9vqaq=JfrVk FHe9pgea0dXdar=Jb9hs0dXdbPYxe9vr0=vr0=vqpWqaaeaabiGaci aacaqabeaadaabauaaaOqaamaalaaabaGaeeymaedabaGaeeOmaida aiabbccaGiabbQda6iabbccaGmaalaaabaGaeeOmaidabaGaeeynau daaiabbccaGiabbggaHjabb6gaUjabbsgaKjabbccaGmaalaaabaGa eeymaedabaGaeeymaeJaeeimaadaaaaa@4C8B@ . Find the new ratio of remaining partners if Z retires.

    Marks:1
    Answer:

    Profit sharing ratio of X, Y and Z is = 1 2  :  2 5  :  1 10 On simplifying, the ratio will be 5 : 4 : 1 When Z retires the new ratio of X and Y will be 5 : 4  MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfKttLearuGu1bxzLbIrVjxyKLwyUbqedm vETj2BSbWexLMBbXgBcf2CPn2qVrwzqf2zLnharyWqVvNCPvMCG4uz 3bqegqvATv2CG4uz3bIuV1wyUbqee0evGueE0jxyaibaieYtf9irVe eu0dXdh9vqqj=hEeeu0xXdbba9frFj0=OqFfea0dXdd9vqaq=JfrVk FHe9pgea0dXdar=Jb9hs0dXdbPYxe9vr0=vr0=vqpWqaaeaabiGaci aacaqabeaadaabauaaaOqaauaabaqaeeaaaaqaaabaaaaaaaaapeGa eeiuaaLaeeOCaiNaee4Ba8MaeeOzayMaeeyAaKMaeeiDaqNaeeiOaa Qaee4CamNaeeiAaGMaeeyyaeMaeeOCaiNaeeyAaKMaeeOBa4Maee4z aCMaeeiOaaQaeeOCaiNaeeyyaeMaeeiDaqNaeeyAaKMaee4Ba8Maee iOaaQaee4Ba8MaeeOzayMaeeiOaaQaeeiwaGLaeeilaWIaeeiOaaQa eeywaKLaeeiOaaQaeeyyaeMaeeOBa4MaeeizaqMaeeiOaaQaeeOwaO LaeeiOaaQaeeyAaKMaee4CamNaeeiOaaQaeeypa0ZaaSaaa8aabaWd biabbgdaXaWdaeaapeGaeeOmaidaaiabbccaGiabbQda6iabbccaGm aalaaapaqaa8qacqqGYaGma8aabaWdbiabbwda1aaacqqGGaaicqqG 6aGocqqGGaaidaWcaaWdaeaapeGaeeymaedapaqaa8qacqqGXaqmcq qGWaamaaaapaqaa8qacqqGpbWtcqqGUbGBcqqGGcaOcqqGZbWCcqqG PbqAcqqGTbqBcqqGWbaCcqqGSbaBcqqGPbqAcqqGMbGzcqqG5bqEcq qGPbqAcqqGUbGBcqqGNbWzcqqGSaalcqqGGcaOcqqG0baDcqqGObaA cqqGLbqzcqqGGcaOcqqGYbGCcqqGHbqycqqG0baDcqqGPbqAcqqGVb WBcqqGGcaOcqqG3bWDcqqGPbqAcqqGSbaBcqqGSbaBcqqGGcaOcqqG IbGycqqGLbqzcqqGGcaOcqqG1aqncqqGGaaicqqG6aGocqqGGaaicq qG0aancqqGGaaicqqG6aGocqqGGaaicqqGXaqma8aabaWdbiabbEfa xjabbIgaOjabbwgaLjabb6gaUjabbckaGkabbQfaAjabbckaGkabbk haYjabbwgaLjabbsha0jabbMgaPjabbkhaYjabbwgaLjabbohaZjab bckaGkabbsha0jabbIgaOjabbwgaLjabbckaGkabb6gaUjabbwgaLj abbEha3jabbckaGkabbkhaYjabbggaHjabbsha0jabbMgaPjabb+ga VjabbckaGkabb+gaVjabbAgaMjabbckaGkabbIfayjabbckaGkabbg gaHjabb6gaUjabbsgaKjabbckaGkabbMfazjabbckaGkabbEha3jab bMgaPjabbYgaSjabbYgaSjabbckaGkabbkgaIjabbwgaLjabbckaGk abbwda1iabbccaGiabbQda6iabbccaGiabbsda0iabb6caUiabbcka GcWdaeaapeGaeeiOaakaaaaa@0942@

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  • Q7

    What is meant by ‘Reconstitution of a Partnership Firm’?

    Marks:1
    Answer:

    Reconstitution of a Partnership Firm refers to any change in the existing partnership agreement. In this case, the old or existing partnership deed terminates and a new partnership deed comes into existence.

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  • Q8

    BG. Ltd. issued 2,000, 12% debentures of 100 each on 1st April 2012. The issue was fully subscribed. According to the terms of issue, interest on the debentures is payable half-yearly on 30th September and 31st March and the tax deducted at source is 10%.

    Pass necessary journal entries related to the debenture interest for the half-yearly ending 31st March, 2013 and transfer of interest on debentures of the year to the Statement of Profit and Loss.

    Marks:3
    Answer:

    Journal in the Books of BG. LTD.

    Date

    Particulars

    L.F.

    Dr.

    Dr.

    2012

     

     

     

     

    Sep. 30

    Debenture Interest A/c Dr.

     

    12,000

     

     

    To Income Tax Payable A/c

     

     

    1,200

     

    To Debentureholders’ A/c

     

     

    10,800

     

    (Amount of interest due for 6 months and tax deducted at source)

     

     

     

    Sep. 30

    Debentureholders’ A/c Dr.

     

    10,800

     

     

    To Bank A/c

     

     

    10,800

     

    (Interest paid)

     

     

     

    Sep. 30

    Income Tax Payable A/c Dr.

     

    1,200

     

     

    To Bank A/c

     

     

    1,200

     

    (Tax paid on interest)

     

     

     

    2013

     

     

     

     

    March31

    Debenture Interest A/c Dr.

     

    12,000

     

     

    To Income Tax Payable A/c

     

     

    1,200

     

    To Debentureholders’ A/c

     

     

    10,800

     

    (Amount of interest due for 6 months and tax deducted at source)

     

     

     

    March31

    Debentureholders’ A/c Dr.

     

    10,800

     

     

    To Bank A/c

     

     

    10,800

     

    (Interest paid to debentureholders)

     

     

     

    March31

    Income Tax Payable A/c Dr.

     

    1,200

     

     

    To Bank A/c

     

     

    1,200

     

    (Tax paid on interest)

     

     

     

    March31

    Statement of Profit & Loss Dr.

     

    24,000

     

     

    To Debenture Interest A/c

     

     

    24,000

     

    (Interest on debentures transferred to Statement of Profit and Loss Account)

     

     

     

     

    View Answer
  • Q9

    Saloni and Shrishti were partners in a firm sharing profits in the ratio of 7:3. Their capitals were 2,00,000 and 1,50,000 respectively. They admitted Aditi on 1st April, 2013 as a new partner for 1/6th share in future profits.

    Aditi bought 1,00,000 as her capital. Calculate the value of goodwill of the firm and record necessary journal entries for the above transactions on Aditi’s admission.

    Marks:3
    Answer:

    Here, Aditi is entered into partnership for 1/6th share in future profits. She contributes 1,00,000 for her share of capital.

    Taking Aditi’s capital as the base, we can calculate the firm’s capital.

    Firm’s capital = New partners’ capital x reciprocal of new partner’s share i.e., = 1,00,000×6 = 6,00,000

    However, the total capital as at that date is 4,50,000 (i.e. 2,00,000 + 1,50,000 + 1,00,000)

    Hence, the difference of 1,50,000 is hidden goodwill.

    Aditi’s share in goodwill = 1/6th of 1,50,000 = 25,000.

    Journal

    Date

    Particulars

    L.F.

    Dr.

    Cr.

     

    Cash A/c

    Dr.

     

    1,00,000

     

     

    To Aditi’s Capital A/c

     

     

     

    1,00,000

     

    (Capital brought in by Aditi is recorded)

     

     

     

     

     

    Aditi’s Capital A/c

    Dr.

     

    25,000

     

     

    To Saloni’s Capital A/c

     

     

     

    17,500

     

    To Shrishti’s Capital A/c

     

     

     

    7,500

     

    (Amount of goodwill adjusted through capital accounts of partners)

     

     

     

     

                   

    Note: It is assumed that the old partners are sacrificing in their old profit sharing ratio because no additional information is given in the question.

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  • Q10

    Pass necessary journal entries in the following cases :
    (i) Kay Ltd. converted 3,000, 12% debentures of
    100 each issued at a premium of 10% into equity shares of
    100 each issued at a premium of 25%.
    (ii) Jay Ltd. redeemed 1,500, 12% debentures of
    1,000 each issued at a discount of 10% by converting them into equity shares of 50 each issued at par.

    Marks:3
    Answer:

    (i)

    Journal in the books of Kay Ltd.

    Date

    Particulars

    L.F.

    Dr.

    Cr.

     

    12% Debenture A/c

    Dr.

     

    3,00,000

     

     

    To Debentureholders’ A/c

     

     

    3,00,000

     

    (Amount due to 3,000 debentureholders at the time of conversion)

     

     

     

     

    Debentureholders’ A/c

    Dr.

     

    3,00,000

     

     

    To Equity Share Capital A/c

     

     

    2,40,000

     

    To Securities Premium Reserve A/c

     

     

    60,000

     

    (2,400 equity shares of 100 each issued at premium of 25)

     

     

     

     

    Working Note:

    Calculation of number of shares to be issued:

    Net amount payable/Issue price of share

    = 3,00,000/125 = 2,400 shares

    (ii)

    Journal in the books of Jay Ltd.

    Date

    Particulars

    L.F.

    Dr.

    Cr.

     

    12% Debentures A/c

    Dr.

     

    15,00,000

     

     

    To Debentureholders’ A/c

     

     

    13,50,000

     

    To Discount on Issue of Debentures A/c

       

    1,50,000

     

    (Amount due to 1,500 debentureholders at the time of conversion)

     

     

     

     

     

     

     

     

     

    Debentureholders’ A/c

    Dr.

     

    13,50,000

     

     

    To Equity Share Capital A/c

     

     

    13,50,000

     

    (27,000 equity shares of 50 each issued at par to debentureholders)

     

     

     

                 

    Working Note:

    Calculation of number of shares to be issued:

    Net amount payable/Issue price of share

    = 13,50,000 / 50 = 27,000 shares

    View Answer