Accountancy : Company Accounts and Analysis of Financial Statements 2006 CBSE [ All India ] Set I
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Q1
How would calculate interest on drawing of equal amounts drawn on the first day of every month? Marks:2View AnswerAnswer:
If drawings are made by the partners on the first day of every months on regular basis and the amount of drawing is the same, interest on total amount of drawings would be calculated for 6 X ½ months Thus, Interest on Drawings = Total Amount of Drawings x Rate of interest / 100 x 6x ½ /12 -
Q2
What is meant by Calls-in-Advance? Marks:2View AnswerAnswer:
Calls-in-advance refers to the amount paid by the allotees for the calls not made by the company or the excess application money exceeding that due on allotments and retained by the company. Calls-in-advance is a liability of the company and, therefore, is subject to interest at the rate prescribed in Articles of Association. -
Q3
What is meant by forfeiture of shares? Marks:2View AnswerAnswer:
Forfeiture means taking away a right or a thing as a penalty for making some default. A shareholder is liable to pay all the calls made by the company within the stipulated time. If a shareholder fails to pay any call/calls within stipulated time, the company is authorized to forfeit the shares held by the defaulting shareholder. The effect of fortune of shares is that shareholder ceases to be a member of the company and losses the amount already paid by him. Thus, forfeiture of shares means compulsory termination of membership by way of penalty for non-payment of call and forfeiture of the amount already paid by defaulting shareholder. -
Q4
What does an Irredeemable Debenture mean? Marks:2View AnswerAnswer:
Irredeemable debentures mean a debenture whose date of redemption is not specified at the time of its issue. The holders of such debentures cannot demand payment from the company so long as it is a going concer n. -
Q5
What is a Cash Flow Statement? List any two uses of preparing Cash Flow Statement. Marks:2View AnswerAnswer:
Cash flow statement refers to a statement showing inflows and outflow of cash and cash equivalent during the specified period. Following are two use of preparing Cash flow statement: 1) It gives better uses of preparing cash flow statement. 2) It enables the management to plan its financial operations. -
Q6
Classify the following into cash flow from investing activities/ Financing activities while preparing a Cash flow Statement: (a) Redemption of debentures (b) Sales of Fixed assets (c) Receipt of dividend (d) Interest received Marks:2View AnswerAnswer:
(a) Financing Activities (b) Investing activities (c) Investing activities (d) Investing activities -
Q7
On March 31.2005 after the close of books of accounts, the capital account of A, B and C stood at Rs.24,000, Rs.20,000, Rs.12,000 respectively. The profit for the year Rs.36,000 was distributed equally. Subsequently it was discovered that interest on capital @5% p.a. had been omitted. The profit sharing ration was 2:2:1. Pass an adjustment journal entry. Marks:3View AnswerAnswer:
A B C Capital after the close of books of accounts Less: Share of profit Capital in the beginning Interest on capital @5% 24,000 12,000 20,000 12,000 12,000 12,000 12,000 8,000 Nil 600 400 --- Journal Particulars L.F Dr. Amt. Cr. Amt. C’s Capital A/c To A’s Capital A/c To B’s Capital A/c (Adjustment in respect on capital and wrong division of profit) 5,000 2,600 24,00 -
Q8
Mona Ltd/ Acquired assets of Rs.50lakhs and took over creditors of Rs.5Lakhs from Ram Enterprise . Mona Ltd. Issued 8% Debentures of Rs.100 each at a premium of 25% as purchase consideration. Record necessary journal entries in the books of Mona Ltd. Marks:3View AnswerAnswer:
Face Value of Debentures = 100 Add: premium = 25 Agreed value of debenture = 125 Value of assets acquired = 50,00,000 Less: Value of liabilities acquired = 5,00,000 Amount payable to Ram Enter. = 45,00,000 No. of debentures to be issued = 45,00,000 / 125 = 36,000 Journal Particulars L.F Dr. Amt. Cr. Amt. Assets A/c To Liabilities A/c To Ram Enter. (Purchase of assets and liabilities form Ram Enter.) 50,00,000 5,00,000 45,00,000 Ram Enter. To 8% Debentures A/c To security premium A/c (Issue of 8% debentures at premium of 25%) 45,00,000 36,00,000 9,00,000 -
Q9
List any three items that can be shown as “Contingent Liabilities” in a Company’s Balance Sheet. Marks:3View AnswerAnswer:
(a) Claim against the company not acknowledged as debts. (b) Uncalled liability on Shares partly paid up (c) Arrears of fixed cumulative dividends (d) Estimated amount of contract remaining to be executed on capital account and not provided (e) Other money for which company is contingently liable. -
Q10
From the following data prepare a statement of profits in the comparative form: Particulars 31.3.2004 31.3.2005 Sales GP Ratio Administration Expenses Income Tax 8,00,000 30% 50,000 50% 8,00,000 40% 1,00,000 50% Marks:3View AnswerAnswer:
Comparative Statement of Profit for the year ending 31st March,2004 and 2005 Particulars 31-3-2004 31-3-2005 Increase or Decrease % Increase or Decrease Sales Cost of goods sold Gross profit Admin Expenses Profit before tax Income Tax Profit after Tax 8,00,000 5,60,000 8,00,000 4,80,000 -- (80,000) -- (-) 14.28 2,40,000 50,000 3,20,000 1,00,000 80,000 -50,000 33.33 100 1,90,000 95,000 2,20,000 1,10,000 30,000 15,000 15.79 15.79 95,000 1,10,000 15,000 15.79
