Accountancy: 2015: CBSE: [All India]: Set – II

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  • Q1

    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
    Answer:

    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.

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  • Q2

    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
    Answer:

    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.

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  • Q3

    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
    Answer:

    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.

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  • Q4

    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
    Answer:

    Particulars

    Dr. (₹)

    Cr. (₹)

    Gulab’s Capital A/c

    Dr.

    8,000

     

    Khushbu’s Capital A/c

    Dr.

    32,000

     

    To Anant’s Capital A/c

     

    40,000

     

    (Gulab and Khushbu, being the

     

     

    gaining partners compensating

     

     

    Anant for his share of sacrifice)

     

     

    Working Notes:

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  • Q5

    Give the meaning of forfeiture of shares.

    Marks:1
    Answer:

    Forfeiture of shares implies cancellation of shares by the company issuing them, on non-payment of calls by the shareholders holding those shares.

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  • Q6

    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:
    (i) 2,25,000
    (ii) 2,20,000
    (iii) 2,21,000
    (iv) 2,19,500

    Marks:1
    Answer:

    The answer is option (iii).

    Calculation of amount received with first call:
     

    Details

    First Call amount receivable on

     

    45,000 shares x ₹ 5

    2,25,000

    Less: Pooja paid in advance

     

    (500 @ ₹ 5)

    2,500

    Less: Kundan did not pay first call

     

    (300 @ ₹ 5)

    1,500

     

    2,21,000

     

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  • Q7

    State any three purposes other than ‘issue of bonus shares’ for which securities premium can be utilized.

    Marks:3
    Answer:

    Securities premium can be utilized for the following purposes:

    i. For writing off the preliminary expenses of the company

    ii. For writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company

    iii. For paying up the premium that is to be payable on redemption of preference shares or debentures of the company.

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  • Q8

    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
    Answer:

    Profit & Loss Appropriation Account

    For the year ended March 2014

    Dr.

    Cr.

    Particulars

    Particulars

    Interest on Capital

     

    Profit & Loss A/c

    2,00,000

    Brij

    80,000

         

    Nandan

    1,20,000

    2,00,000

       
     

    2,00,000

     

    2,00,000

     

    Working Notes:

    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.

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  • Q9

    ‘India Auto Ltd.’ Is registered with an authorized capital of ₹ 7,00,00,000 divided into 7,00,000 shares of ₹ 100 each. The company issued 50,000 shares to the vendor for building purchased and 2,00,000 shares were issued to the public. The amount was payable as follows:

    On application and allotment – ₹ 20 per share

    On first call –₹ 50 per share

    On second and final call – The balance

    All calls were made and were duly received except on 100 shares held by Rajani, who failed to pay the second and final call. Her shares were forfeited.

    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
    Answer:

    Balance Sheet of India Auto Ltd.

    Particulars

    Note

    I. Equity and Liabilities

     

     

    1.Shareholder’s funds

     

     

    a. Share Capital

    1

    2,49,97,000

    b. Reserves and Surplus

     

    --

     

     

    2,49,97,000

    II. Assets

     

     

    1.Non-Current Assets

     

     

    a. Fixed Assets

     

    50,00,000

    2.Current Assets

     

     

    a. Cash and Cash

     

     

    Equivalents

     

    1,99,97,000

     

     

    2,49,97,000

     

    Notes to Accounts:

    Particulars

    1.Share Capital:

     

     

    Authorised Capital

     

     

    7,00,000 shares of ₹ 100

     

    7,00,00,000

    Issued Capital:

     

     

    2,50,000 shares of ₹ 100

     

    2,50,00,000

    Subscribed, Called-up and

     

     

    Paid-up Capital:

     

     

    2,49,900 shares of ₹ 100

    2,49,90,000

     

    Add: Shares Forfeited (100

     

     

    shares of ₹ 70)

    7,000

    2,49,97,000

     

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  • Q10

    ‘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
    Answer:

    In the books of Good Blankets Ltd.

    Journal

    Dt.

    Particulars

    Dr. (₹ )

    Cr. (₹ )

     

    Machinery A/c

    Dr.

    7,00,000

     

     

    To Vendor A/c

     

    7,00,000

     

    (Being machinery purchased

     

     

     

    From Vendor)

     

     

     

    Vendor A/c

    Dr.

    7,00,000

     

     

    To Equity share capital A/c

     

    5,00,000

     

    To 8% Debentures A/c

     

    2,00,000

     

    (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.

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