Accountancy: 2015: CBSE: [Delhi]: Set – III
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On the retirement of Hari from the firm of ‘Hari, Ram and Sharma’ the balance-sheet showed a debit balance of ₹12,000 in the profit and loss account. For calculating the amount payable to Hari this balance will be transferred
a. To the credit of the capital accounts of Hari, Ram and Sharma equally.
b. To the debit of the capital accounts of Hari, Ram and Sharma equally.
c. To the debit of the capital accounts of Ram and Sharma equally.
d. To the credit of the capital accounts of Ram and Sharma equally.Marks:1
The answer is option (b) to the debit of the capital accounts of Hari, Ram, and Sharma equally.
At the time of retirement of a partner, the balance of accumulated profits and losses is transferred among all the partners (including the retiring partner) in the old ratio. Here, a debit balance of ₹12,000 in the profit and loss account will be debited (being a loss) to the capital accounts of Hari, Ram and Sharma equally.
Kumar, Verma, and Naresh were partners in a firm sharing Profit & Loss in the ratio of 3:2:2. On 23rd January 2015 Verma died. Verma’s share of profit till the date of his death was calculated at ₹2,350. Pass necessary journal entry for the same in the books of the firm.Marks:1
Profit & Loss suspense A/c
To Verma’s Capital A/c
(Verma’s share of profit credited to his capital account)
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.
Joy Ltd. issued 1,00,000 equity shares of ₹10 each. The amount was payable as follows:
On application: ₹3 per share
On allotment: ₹4 per share
On 1st & Final call: Balance
Applications for 95,000 shares were received and shares were allotted to all the applicants. Sonam to whom 500 shares were allotted failed to pay allotment money and Gautam paid his entire amount due including the amount due on first and final call on the 750 shares allotted to him along with allotment. The amount received on allotment was,
The answer is option (c) ₹3,80,250
Amount received on allotment is shown below:
Amount due on allotment
(95,000 X ₹4)
Less: Allotment not received
On 500 shares
Add: First & final call money received
in advance on 750 shares (750 X ₹3)
Net Amount Received on Allotment
In the absence of partnership deed the profits of a firm are divided among the partners:
a. In the ratio of capital
c. In the ratio of time devoted for the firm’s business
d. According to the managerial abilities of the partners.Marks:1
The answer is option (b) equally.
In the absence of partnership deed, the provisions of Indian Partnership Act, 1932 applies. According to the Partnership Act, the profits and losses are to be shared equally among the partners.
A, B, C and D were partners in a firm sharing profits in the ratio of 4:3:2:1. On 01/01/2015 they admitted E as a new partner for 1/10 share in the profits. E brought ₹10,000 for his share of goodwill premium which was correctly recorded in the books by the accountant. The accountant showed goodwill at ₹ 1,00,000 in the books.
Was the accountant correct in doing so? Give reason in support of your answer.Marks:1
Accounting Standard 26 (AS-26) prescribes that goodwill is recorded in the books only when it is purchased. In this case, the accountant has shown the goodwill of the firm ₹1,00,000 as an asset in the books of the firm, which is in violation of the rules contained in the AS-26, as goodwill cannot be shown in the books until it is purchased. Hence, the accountant has adopted the wrong accounting treatment.
Securities premium can also be utilised for three other purposes besides (i) ‘Issuing fully paid bonus shares’ and (ii) ‘Buy back of shares’. State those purposes.Marks:3
Securities Premium can also be utilised for three other purposes as follows:
(i) Writing off preliminary expenses
(ii) Writing off discount on issue of securities
(iii) Writing off premium on redemption of preference share.
On 01/04/2013 Jay and Vijay, entered into partnership for supplying laboratory equipments to government schools situated in remote and backward areas. They contributed capitals of ₹80,000 and ₹50,000 respectively and agreed to share the profits in the ratio 3:2. The partnership deed provided that interest on capital shall be allowed at 9% per annum. During the year the firm earned a profit of ₹7,800.
Showing your calculations clearly, prepares ‘Profit and Loss Appropriation Account’ of jay and Vijay for the year ended 31/03/2014.Marks:3
Profit & Loss Appropriation Account
For the year ended March 2014
Interest on Capital A/c
Profit & Loss A/c
Sun Pharma Ltd. is registered with an authorised capital of ₹ 1,00,00,000 divided into 1,00,000 equity shares of ₹ 100 each. The company issued 50,000 shares at a premium of ₹ 40 per shares. A shareholder holding 500 shares did not pay the final call of ₹ 20 per share. His shares were forfeited.
Present the ‘Share Capital’ in the Balance Sheet of the Company as per Schedule VI Part I of Companies Act, 1956. Also prepare notes to accounts.Marks:3
Extract of Balance Sheet of Sun Pharma Ltd.
I.EQUITY & LIABILITIES
(b)Reserve & Surplus
Notes to Account 1:
Authorised Share Capital
1,00,000 equity shares ₹100 each
Issued Share Capital
50,000 equity shares ₹100 each
Subscribed & Fully paid Capital
49,500 equity shares ₹100 each
Fully called up
Add: Forfeited shares
(500 shares @ ₹ 80)
Notes to Account 2:
Reserve & Surplus :
(50,000 x ₹40)
‘Sangam Woolens Ltd.’, Ludhiana, is the manufacturers and exporters of woolen garments. The company decided to distribute free of cost woolen garments to 10 villages of Lahul and Spiti District Himachal Pradesh. The company also decided to employ 50 young persons from these villages in its newly established factory. The company issued 40,000 equity shares of ₹ 10 each and 1,000 9% debentures of ₹ 100 each to the vendors for the purchase of machinery of ₹ 5,00,000.
Pass necessary Journal Entries. Also identify any one value that the company wants to communicate to the society.Marks:3
In the books of Sangam Woolens Ltd.
To Vendor A/c
(Being machinery purchased
To Equity share capital A/c
To 9% debentures A/c
(Being 40,000 shares of ₹ 10
Each and 1000 debentures of
₹ 100 each issued to vendor for
Payment of machinery)
The value that the company wants to communicate to the society is helping the poor and needy; and generating employment in rural area.