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:1View AnswerAnswer:
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:1View AnswerAnswer:
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:1View AnswerAnswer:
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:1View AnswerAnswer:
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:1View AnswerAnswer:
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
. Find the new ratio of remaining partners if Z retires.Marks:1View AnswerAnswer:
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Q7
What is meant by ‘Reconstitution of a Partnership Firm’?
Marks:1View AnswerAnswer:
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:3View AnswerAnswer:
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)
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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:3View AnswerAnswer:
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 =
6,00,000However, 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:3View AnswerAnswer:
(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
