Accountancy: 2015: CBSE: [All India]: Set – I
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In the absence of Partnership Deed, interest on loan of a partner is allowed:
(i) at 8% per annum.
(ii) at 6% per annum.
(iii) no interest is allowed.
(iv) at 12% per annum.Marks:1
The answer is option (ii).
In absence of Partnership Deed, interest on loan of a partner is allowed at the rate of 6% per annum.
Geeta, Sunita and Anita were partners in a firm sharing profits in the ratio of 5:3:2. On 01.01.2015 they admitted Yogita as a new partner for share in the profits. On Yogita’s admission, the Profit and Loss Account of the firm was showing a debit balance of ₹ 20,000 which was credited by the accountant of the firm to the capital accounts of Geeta, Sunita and Anita in their profit sharing ratio.
Did the accountant give correct treatment? Give reason in support of your answer.Marks:1
Here, the treatment of Profit and Loss A/c (Dr.) is incorrect.
The debit balance of Profit and Loss A/c represents the loss to the firm. Therefore, at the time of admission of Yogita, it should be debited and not credited to the capital accounts of Geeta, Sunita and Anita, in their old profit sharing ratio.
On the death of a partner, his share in the profits of the firm till the date of his death is transferred to the:
(i) debit of Profit and Loss Account.
(ii) credit of Profit and Loss Account.
(iii) debit of Profit and Loss Suspense Account.
(iv) credit of Profit and Loss Suspense Account.Marks:1
The answer is option (iii).
On the death of a partner, his share in the profits of the firm till the date of his death is transferred to the debit of Profit and Loss Suspense Account.
Anant, Gulab and Khushbu were partners in a firm sharing profits in the ratio of 5:3:2. From 01.04.2014, they decided to share the profits equally. For this purpose the goodwill of the firm was valued at ₹ 2,40,000.
Pass necessary journal entry for the treatment of goodwill on change in the profit sharing ratio of Anant, Gulab and Khushbu.Marks:1
Gulab’s Capital A/c
Khushbu’s Capital A/c
To Anant’s Capital A/c
(Gulab and Khushbu, being the
gaining partners compensating
Anant for his share of sacrifice)
Give the meaning of forfeiture of shares.Marks:1
Forfeiture of shares implies cancellation of shares by the company issuing them, on non-payment of calls by the shareholders holding those shares.
Nirman Ltd. issued 50,000 equity shares of ₹10 each. The amount was payable as follows:
On application - ₹ 3 per share
On allotment - ₹ 2 per share
On first & Final call – The Balance
Applications for 45,000 shares were received and shares were allotted to all the applicants. Pooja, to whom 500 shares were allotted, paid her entire share money at the time of allotment, whereas Kundan did not pay the first and final call on his 300 shares. The amount received at the time of making first and final call was:
The answer is option (iii).
Calculation of amount received with first call:
First Call amount receivable on
45,000 shares x ₹ 5
Less: Pooja paid in advance
(500 @ ₹ 5)
Less: Kundan did not pay first call
(300 @ ₹ 5)
Guru Ltd. invited applications for issuing 5,00,000 equity shares of ₹ 10 each at a premium of ₹ 5 per share. Because of favorable market conditions the issue was over-subscribed and applications for 15,00,000 shares were received.
Suggest the alternatives available to the Board of Directors for the allotment of shares.Marks:3
The following alternatives are available to the Board of Directors:
a. Reject the excess application of 10,00,000 shares
b. Allot shares to all the share applicants on pro-rata basis, i.e. allotting 5,00,000 shares to 15,00,000 share applicants
c. Exercise a mix of both the practices as listed in (a) and (b). For instance, rejecting the excess application for 5,00,000 shares and allotting 5,00,000 shares to the remaining 10,00,000 share applicants.
On 01.04.2013, Brij and Nandan entered into partnership to construct toilets in government girl’s schools in the remote areas of Uttarakhand. They contributed capitals of ₹ 10,00,000 and ₹ 15,00,000 respectively. Their profit sharing ratio was 2:3 and interest allowed on capital as provided in the Partnership Deed was 12% per annum. During the year ended 31.03.2014, the firm earned a profit of ₹ 2,00,000.
Prepare Profit and Loss Appropriation Account of Brij and Nandan for the year ended 31.03.2014.Marks:3
Profit & Loss Appropriation Account
For the year ended March 2014
Interest on Capital
Profit & Loss A/c
Note: Interest on capital is to be treated as an appropriation of profits and is to be provided to the extent of availability of profits, i.e, ₹2,00,000.
‘Suvidha Ltd.’ is registered with an authorized capital of ₹ 10,00,00,000 divided into 10,00,000 equity shares of ₹ 100 each. The company issued 1,00,000 shares for public subscription. A shareholder holding 100 shares, failed to pay the final call of ₹ 20 per share. His shares were forfeited. The forfeited shares were re-issued at ₹ 90 per share as fully paid up.
Present the ‘Share Capital’ in the Balance Sheet of the company as per Schedule VI Part I of the Companies Act, 1956. Also prepare ‘Notes to Accounts’.Marks:3
In the books of ‘Suvidha Ltd.’
Balance Sheet As at……..
Equity & Liabilities
a. Share Capital
b. Reserve & Surplus
a. Cash & Cash equivalents
Notes to Accounts:
Authorised share capital:
10,00,000 shares of ₹ 100 each
Issued share capital:
1,00,000 shares of ₹ 100 each
Subscribed share capital:
Called-up and Paid-up Capital
1,00,000 shares of ₹ 100
2.Reserves and Surplus
3.Cash & Cash Equivalents
Cash at Bank
‘Good Blankets Ltd.’ are the manufacturers of woolen blankets. Blankets of the company are exported to many countries. The company decided to distribute blankets free of cost to five villages of Kashmir Valley destroyed by the recent floods. It also decided to employ 100 young persons from these villages in their newly established factory at Solan in Himachal Pradesh. To meet the requirements of funds for starting its new factory, the company issued 50,000 equity shares of ₹ 10 each and 2,000, 8% debentures of ₹100 each to the vendors of machinery purchased for ₹ 7,00,000.
Pass necessary journal entries for the above transactions in the books of the company. Also identify any one value which the company wants to communicate to the society.Marks:3
In the books of Good Blankets Ltd.
Dr. (₹ )
Cr. (₹ )
To Vendor A/c
(Being machinery purchased
To Equity share capital A/c
To 8% Debentures A/c
(Being 50,000 shares of ₹ 100
Each and 2000 8% debentures
of ₹ 100 each issued to vendor
Value which the company wants to communicate to society- Creation of employment opportunities for victims of flood affected area, to enable them to earn their livelihood.