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:1View AnswerAnswer:
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:1View AnswerAnswer:
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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:1View AnswerAnswer:
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:1View AnswerAnswer:
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:1View AnswerAnswer:
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:1View AnswerAnswer:
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:3View AnswerAnswer:
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:
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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:3View AnswerAnswer:
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:
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Q9
Disha Ltd. purchase machinery form Nisha Ltd. and paid to Nisha Ltd. as follows:
- By issuing 10,000, equity shares of ₹10 each at a premium of 10%.
- By issuing 200, 9% debentures of ₹100 each at a discount of 10%.
- 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:3View AnswerAnswer:
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:3View AnswerAnswer:
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:
- Creating employment opportunities
- Promoting balance regional growth by contributing to development of tribal areas
