Accountancy: 2017: CBSE: [All India]: Set – II

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  • Q1

    Distinguish between ‘Fixed Capital Account’ and ‘Fluctuating Capital Account’ on the basis of credit balance.

    Marks:1
    Answer:

    Basis

    Fixed Capital Account

    Fluctuating Capital Account

    Balance

    It always shows credit balance in Capital Account.

    Fluctuating Capital Account can also show debit balance.

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  • Q2

    A and B were partners in a firm sharing profits and losses in the ratio of 5:3. They admitted C as a new partner. The new profit sharing ration between A, B and C was 3:2:3. A surrendered 1/5th of his share in favour of C. Calculate B’s sacrifice.    

    Marks:1
    Answer:

    B'sshare of sacrifice is calculated below: B's Sacrifice=OldShare  NewShare = 3 8    2 8  =  1 8 MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbwvMCKf MBHbqedmvETj2BSbWexLMBb50ujbqegquAWrxAGatm5aqefqvATv2C G4uz3bIuV1wyUbqee0evGueE0jxyaibaieYBf9irVeeu0dXdh9vqqj =hEeeu0xXdbba9frFj0=OqFfea0dXdd9vqaq=JfrVkFHe9pgea0dXd ar=Jb9hs0dXdbPYxe9vr0=vr0=vqpWqaaeaabaGaaiaacaqabeaada abauaaaOabaeqabaGaaeOqaiaabEcacaqGZbGaaGjbVlaabohacaqG ObGaaeyyaiaabkhacaqGLbGaaeiiaiaab+gacaqGMbGaaeiiaiaabo hacaqGHbGaae4yaiaabkhacaqGPbGaaeOzaiaabMgacaqGJbGaaeyz aiaabccacaqGPbGaae4CaiaabccacaqGJbGaaeyyaiaabYgacaqGJb GaaeyDaiaabYgacaqGHbGaaeiDaiaabwgacaqGKbGaaeiiaiaabkga caqGLbGaaeiBaiaab+gacaqG3bGaaeOoaaqaaiaabkeacaqGNaGaae 4CaiaabccacaqGtbGaaeyyaiaabogacaqGYbGaaeyAaiaabAgacaqG PbGaae4yaiaabwgacaqG9aGaaGjbVlaab+eacaqGSbGaaeizaiaays W7caqGtbGaaeiAaiaabggacaqGYbGaaeyzaiaabccacqGHsislcaqG GaGaaGjbVlaab6eacaqGLbGaae4DaiaaysW7caqGtbGaaeiAaiaabg gacaqGYbGaaeyzaaqaaiaaykW7caaMc8UaaGPaVlaaykW7caaMc8Ua aGPaVlaaykW7caaMc8UaaGPaVlaaykW7caaMc8UaaGPaVlaaykW7ca aMc8UaaGPaVlaaykW7caaMc8UaaGPaVlaaykW7caaMc8UaaGPaVlaa ykW7caaMc8UaaGPaVlaaykW7caaMc8UaaGPaVlaab2dadaWcaaqaai aabodaaeaacaqG4aaaaiaabccacqGHsislcaqGGaWaaSaaaeaacaqG YaaabaGaaeioaaaacaqGGaGaaeypaiaabccadaWcaaqaaiaabgdaae aacaqG4aaaaaaaaa@B63D@

     

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  • Q3

    P and Q were partners in a firm sharing profits and losses equally. Their fixed capitals were ₹2,00,000 and ₹3,00,000 respectively. The partnership deed provided for interest on capital @ 12% per annum. For the year ended 31st March, 2016, the profits of the firm were distributed without providing interest on capital.

    Pass necessary adjustment entry to rectify the error. 

    Marks:1
    Answer:

    Adjusting Journal Entry

    Journal

     

    Particulars

    Debit Amount

    (₹)

    Credit Amount

    (₹)

    P’s Current A/c

    Dr.

    6,000

     

    To Q’s Current A/c

     

    6,000

    (Interest on capital omitted, now adjusted.)

     

     

     

    Working Notes:

    Statement Showing Adjustment

    Particulars

    P ₹

    Q ₹

    Total

    Interest on Capital @ 12%

    24,000

    36,000

    (60,000)

    Less: Profits wrongly distributed to the extent of interest amount

    (30,000)

    (30,000)

    60,000

    Net Effect

    (60,000)

    6,000

    NIL

     

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  • Q4

    X Ltd. invited application for issuing 500, 12% debentures of ₹100 each at a discount of 5%. These debentures were redeemable after three years at par. Applications for 600 debentures were received. Pro-rata allotment was made to all the applicants.

    Pass necessary journal entries for the issue of debentures assuming that the whole amount was payable with application.

    Marks:1
    Answer:

    Journal

     

    Particulars

    Debit Amount

    (₹)

    Credit Amount

    (₹)

    Bank A/c (600 x ₹95)

    Dr.

    57,000

     

    To Debenture Application & Allotment A/c

     

    57,000

    (Amount received on 600 debentures issued at a discount of 5%, face value ₹100)

     

     

    Debentures Application & Allotment A/c

    Dr.

    57,000

     

    Discount on Issue of Debentures A/c (500 x ₹5)

    Dr.

    2,500

     

    To 12% Debentures A/c (500 x ₹100)

     

    50,000

    To Bank A/c (100 x ₹95)

     

    9,500

    (Application and allotted money received transferred to Debentures A/c and balance refunded)

     

     

     

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  • Q5

    Z Ltd. forfeited 1,000 equity shares of ₹10 each for the non-payment of the first call of ₹2 per share. The final Call of ₹3 per share was yet to be made. Calculate the maximum amount of discount at which these shares can be reissued.

    Marks:1
    Answer:

    The maximum discount at which these shares can be re-issued is the credit balance in the Share Forfeiture A/c i.e. ₹5,000 (1,000 x ₹5).

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  • Q6

    Durga and Naresh were partners in a firm. They wanted to admit five more members in the firm. List any two categories of individuals other minors who cannot be admitted by them.

    Marks:1
    Answer:

    The individuals other than minors who cannot be admitted by a partnership firm are:

    (a) Persons of unsound mind

    (b) Persons disqualified by any law

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  • Q7

    BPL Ltd. converted 500, 9% debentures of ₹100 each issued at a discount of 6% into equity shares of ₹100 each issued at a premium of ₹25 per share. Discount on issue of 9% debentures has not yet been written off.

    Showing your working notes clearly, pass necessary journal entries for conversion of 9% debentures into equity shares.

    Marks:3
    Answer:

    Journal

     

    Particulars

    Debit  (₹)

    Credit  (₹)

    9% Debentures A/c

    Dr.

    50,000

     

    To Debentureholders’ A/c

     

    50,000

    (500, 9% Debentures due for redemption)

     

     

    Debentureholders’ A/c

    Dr.

    50,000

     

    To Equity Share Capital A/c (400 x ₹100)

     

    40,000

    To Securities Premium A/c (400 x ₹25)

     

    10,000

    (500, 9% Debentures redeemed by converting into 400 equity shares of ₹100 each issued at a premium of ₹25 per share)

     

     

    Securities Premium A/c

    Dr.

    3,000

     

    To Discount on Issue of Debentures A/c

     

    3,000

    (Discount on issue of debentures written off against balance in securities premium account)

     

     

    Working Notes:
    No. of Equity Shares= AmountPayable Issue Price = 50,000 125 =400 MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbwvMCKf MBHbqedmvETj2BSbWexLMBb50ujbqegquAWrxAGatm5aqefqvATv2C G4uz3bIuV1wyUbqee0evGueE0jxyaibaieYBf9irVeeu0dXdh9vqqj =hEeeu0xXdbba9frFj0=OqFfea0dXdd9vqaq=JfrVkFHe9pgea0dXd ar=Jb9hs0dXdbPYxe9vr0=vr0=vqpWqaaeaabaGaaiaacaqabeaada abauaaaOabaeqabaGaaeOtaiaab+gacaqGUaGaaeiiaiaab+gacaqG MbGaaeiiaiaabweacaqGXbGaaeyDaiaabMgacaqG0bGaaeyEaiaabc cacaqGtbGaaeiAaiaabggacaqGYbGaaeyzaiaabohacaqG9aWaaSaa aeaacaqGbbGaaeyBaiaab+gacaqG1bGaaeOBaiaabshacaaMe8Uaae iuaiaabggacaqG5bGaaeyyaiaabkgacaqGSbGaaeyzaaqaaiaabMea caqGZbGaae4CaiaabwhacaqGLbGaaeiiaiaabcfacaqGYbGaaeyAai aabogacaqGLbaaaaqaaiaaykW7caaMc8UaaGPaVlaaykW7caaMc8Ua aGPaVlaaykW7caaMc8UaaGPaVlaaykW7caaMc8UaaGPaVlaaykW7ca aMc8UaaGPaVlaaykW7caaMc8UaaGPaVlaaykW7caaMc8UaaGPaVlaa ykW7caaMc8UaaGPaVlaaykW7caaMc8UaaGPaVlaaykW7caaMc8UaaG PaVlaaykW7caaMc8UaaGPaVlaaykW7caaMc8UaaGPaVlaaykW7caaM c8UaaGPaVlaaykW7caaMc8UaaGPaVlaaykW7caaMc8Uaaeypamaala aabaGaaeynaiaabcdacaqGSaGaaeimaiaabcdacaqGWaaabaGaaeym aiaabkdacaqG1aaaaiaab2dacaqG0aGaaeimaiaabcdaaaaa@B12A@

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  • Q8

    Kavi, Ravi, Kumar and Guru were partners in a firm sharing profits in the ratio of 3:2:2:1. On 1.2.2017 Guru retired and the new profit sharing ratio decided between Kavi, Ravi and Kumar was 3:1:1. On Guru’s retirement the goodwill of the firm was valued at ₹3,60,000. Showing your working notes clearly, pass necessary journal entry in the books of the firm for the treatment of goodwill on Gurus’ retirement.

    Marks:3
    Answer:

    Journal

     

    Particulars

    Debit

    (₹)

    Credit

    (₹)

    Kavi’s Capital A/c

    Dr.

    81,000

     

    To Ravi’s Capital A/c

     

    18,000

    To Kumar’s Capital A/c

     

    18,000

    To Guru’s Capital A/c

     

    45,000

    (Goodwill adjusted through capitals)

     

     

           

    Working Note:
    Gaining Ratio= New Ratio-oldRatio Kavi= 3 5 3 8 = 9 40 Ravi= 1 5 2 8 =- 2 40 sacrifice Kumar= 1 5 2 8 = 2 40 sacrifice Kavi's share of goodwill=3,60,000× 9 40 =81,000 Ram's share of goodwill=3,60,000× 2 40 =18,000 Kumar's share of goodwill=3,60,000× 2 40 =18,000 Guru's share of goodwill=3,60,000× 1 8 =45,000 MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbwvMCKf MBHbqedmvETj2BSbWexLMBb50ujbqegquAWrxAGatm5aqefqvATv2C G4uz3bIuV1wyUbqee0evGueE0jxyaibaieYBf9irVeeu0dXdh9vqqj =hEeeu0xXdbba9frFj0=OqFfea0dXdd9vqaq=JfrVkFHe9pgea0dXd ar=Jb9hs0dXdbPYxe9vr0=vr0=vqpWqaaeaabaGaaiaacaqabeaada abauaaaOabaeqabaGaae4raiaabggacaqGPbGaaeOBaiaabMgacaqG UbGaae4zaiaabccacaqGsbGaaeyyaiaabshacaqGPbGaae4Baiaab2 dacaqGGaGaaeOtaiaabwgacaqG3bGaaeiiaiaabkfacaqGHbGaaeiD aiaabMgacaqGVbGaaeylaiaab+gacaqGSbGaaeizaiaaysW7caqGsb GaaeyyaiaabshacaqGPbGaae4BaaqaaiaabUeacaqGHbGaaeODaiaa bMgacaqG9aWaaSaaaeaacaqGZaaabaGaaeynaaaacqGHsisldaWcaa qaaiaabodaaeaacaqG4aaaaiaab2dadaWcaaqaaiaabMdaaeaacaqG 0aGaaeimaaaaaeaacaqGsbGaaeyyaiaabAhacaqGPbGaaeypamaala aabaGaaeymaaqaaiaabwdaaaGaeyOeI0YaaSaaaeaacaqGYaaabaGa aeioaaaacaqG9aGaaeylamaalaaabaGaaeOmaaqaaiaabsdacaqGWa aaamaabmaabaGaae4CaiaabggacaqGJbGaaeOCaiaabMgacaqGMbGa aeyAaiaabogacaqGLbaacaGLOaGaayzkaaaabaGaae4saiaabwhaca qGTbGaaeyyaiaabkhacaqG9aWaaSaaaeaacaqGXaaabaGaaeynaaaa cqGHsisldaWcaaqaaiaabkdaaeaacaqG4aaaaiaab2dacqGHsislda WcaaqaaiaabkdaaeaacaqG0aGaaeimaaaadaqadaqaaiaabohacaqG HbGaae4yaiaabkhacaqGPbGaaeOzaiaabMgacaqGJbGaaeyzaaGaay jkaiaawMcaaaqaaiaabUeacaqGHbGaaeODaiaabMgacaqGNaGaae4C aiaabccacaqGZbGaaeiAaiaabggacaqGYbGaaeyzaiaabccacaqGVb GaaeOzaiaabccacaqGNbGaae4Baiaab+gacaqGKbGaae4DaiaabMga caqGSbGaaeiBaiaab2dacaqGZaGaaeilaiaabAdacaqGWaGaaeilai aabcdacaqGWaGaaeimaiaabEnadaWcaaqaaiaabMdaaeaacaqG0aGa aeimaaaacaqG9aGaaGjbVlaaccgacaqG4aGaaeymaiaabYcacaqGWa GaaeimaiaabcdaaeaacaqGsbGaaeyyaiaab2gacaqGNaGaae4Caiaa bccacaqGZbGaaeiAaiaabggacaqGYbGaaeyzaiaabccacaqGVbGaae OzaiaabccacaqGNbGaae4Baiaab+gacaqGKbGaae4DaiaabMgacaqG SbGaaeiBaiaab2dacaqGZaGaaeilaiaabAdacaqGWaGaaeilaiaabc dacaqGWaGaaeimaiaabEnadaWcaaqaaiaabkdaaeaacaqG0aGaaeim aaaacaqG9aGaaGjbVlaaccgacaqGXaGaaeioaiaabYcacaqGWaGaae imaiaabcdaaeaacaqGlbGaaeyDaiaab2gacaqGHbGaaeOCaiaabEca caqGZbGaaeiiaiaabohacaqGObGaaeyyaiaabkhacaqGLbGaaeiiai aab+gacaqGMbGaaeiiaiaabEgacaqGVbGaae4BaiaabsgacaqG3bGa aeyAaiaabYgacaqGSbGaaeypaiaabodacaqGSaGaaeOnaiaabcdaca qGSaGaaeimaiaabcdacaqGWaGaae41amaalaaabaGaaeOmaaqaaiaa bsdacaqGWaaaaiaab2dacaaMe8UaaiiyaiaabgdacaqG4aGaaeilai aabcdacaqGWaGaaeimaaqaaiaabEeacaqG1bGaaeOCaiaabwhacaqG NaGaae4CaiaabccacaqGZbGaaeiAaiaabggacaqGYbGaaeyzaiaabc cacaqGVbGaaeOzaiaabccacaqGNbGaae4Baiaab+gacaqGKbGaae4D aiaabMgacaqGSbGaaeiBaiaab2dacaqGZaGaaeilaiaabAdacaqGWa GaaeilaiaabcdacaqGWaGaaeimaiaabEnadaWcaaqaaiaabgdaaeaa caqG4aaaaiaab2dacaaMe8UaaiiyaiaabsdacaqG1aGaaeilaiaabc dacaqGWaGaaeimaaaaaa@2938@

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  • Q9

    Disha Ltd. purchase machinery form Nisha Ltd. and paid to Nisha Ltd. as follows:

    1. By issuing 10,000, equity shares of ₹10 each at a premium of 10%.
    2. By issuing 200, 9% debentures of ₹100 each at a discount of 10%.
    3. Balance by accepting a bill of exchange of ₹50,000 payable after one month.

    Pass necessary journal entries in the books of Disha Ltd. for the purchase of machinery and making payment to Nisha Ltd.

    Marks:3
    Answer:

    Journal

    In the books of Disha Ltd.

     

    Particulars

    Debit

    (₹)

    Credit

    (₹)

    Machinery A/c

    Dr.

    1,78,000

     

    To Nisha Ltd.

     

    1,78,000

    (Purchased machinery from Nisha Ltd.)

     

     

    Nisha Ltd. ₹(1,10,000+18,000+50,000)

    Dr.

    1,78,000

     

    Discount on Issue of Debentures A/c (200 x ₹10)

    Dr.

    2,000

     

    To Equity Share Capital A/c (10,000 x ₹10)

     

    1,00,000

    To Securities Premium A/c (10,000 x₹1)

     

    10,000

    To 9% Debentures A/c (200 x ₹100)

     

    20,000

    To Bills Payable A/c

     

    50,000

    (Issued 10,000 equity shares of ₹10 each at a premium of 10%, issued 200 9% Debentures of ₹100 each at a discount of 10% and balance by accepting a bills payable)

     

     

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  • Q10

    Ganesh Ltd. is registered with an authorised capital of ₹10,00,00,000 divided into equity shares of ₹10 each. Subscribed and fully paid up capital of the company was ₹6,00,00,000. For providing employment to the local youth and for the development of the tribal areas of Arunachal Pradesh the company decided to set up hydro power plant there. The company also decided to open skill development centres in Itanagar, Pasighat and Tawang. To meet its new financial requirements, the company decided to issue 1,00,000 equity shares of ₹10 each and 1,00,000, 9% debentures of ₹100 each. The debentures were redeemable after five years at par. The issue of shares and debentures was full subscribed. A shareholder holding 2,000 shares failed to pay the final call of ₹2 per share.

    Show the share capital in the Balance Sheet of the company as per the provisions of Schedule III of the company Act. 2013. Also identify any two values that the company wishes to propagate.

    Marks:3
    Answer:

    Balance Sheet

    Particulars

    Note. No.

    Amount (₹)

    I. Equity and Liabilities

     

     

    1. Shareholders’ Funds

     

     

    a. Share Capital

    1

    6,09,96,000

    b. Reserves and Surplus

     

     

    2. Non-Current Liabilities

     

     

    Long-term Borrowings

    2

    1,00,00,000

    Total

     

     

     

     

    Notes To Accounts

    Note. No.

    Particulars

    Amount (₹)

    1

    Share Capital

     

     

    Authorised Capital

     

     

    1,00,00,000 Equity Shares of ₹10 each

    10,00,00,000

     

    Issued, Subscribed, Called up &Paid up Capital 61,00,000 Equity Shares of ₹10 each fully Called up

    6,10,00,000

     

     

    Less: Calls-in-Arrears (2,000 x ₹2)

    4,000

    6,09,96,000

    2

    Long Term Borrowings

     

     

    1,00,000, 9% Debentures of ₹100 each

    1,00,00,000

     

    Value Involved:

    1. Creating employment opportunities
    2. Promoting balance regional growth by contributing to development of tribal areas

    View Answer