Accountancy : Company Accounts and Analysis of Financial Statements 2006 CBSE [ All India ] Set II
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Q1
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. -
Q2
How would you calculate interest on drawings of equal amounts drawn on the last day of every month? Marks:2View AnswerAnswer:
If drawings are made by the partners on the last 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 5*1/2 months Thus, Interest on drawings = Total amount of Drawings * Rate of interest / 100 * 5*1/2 /12 -
Q3
What is meant by Called-up Capital? Marks:2View AnswerAnswer:
Called-up Capital refers to that part of the subscribed capital which has been called-up by the company for payment. -
Q4
What is pro-rata allotment of shares? Marks:2View AnswerAnswer:
Pro-rata allotment of shares means the allotment when the applicants are allotted shares in the same ratio. -
Q5
What does a Convertible Debenture mean? Marks:2View AnswerAnswer:
Convertible debentures are the debentures the holder of which are given the option to convert the debentures into equity shares at the time of issue of debentures. This approach is adopted to avoid a drain on the resources of a business which redemption in cash inevitably implies. Debenture-holders exercise this right of conversion when they find it beneficial to them. -
Q6
Classify the following into cash flows from Investing activities/Financing a) Redemption of Debentures b) Fixed Assets purchase c) Cash flow financing activities d) Cash Flow investing activities Marks:2View AnswerAnswer:
a) Cash flow from financing activities b) Cash flow from investing activities c) Cash flow from financing activities d) Cash flow from investing activities -
Q7
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. -
Q8
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 -
Q9
On March 31,2005 after the close of books of accounts, the capital accounts of A,B and C stood at Rs.24,000; Rs.20,000 and 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 ratio was 2:1:2. 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 the capital @5% 24,000 12,000 20,000 12,000 12,000 12,000 12,000 8,000 Nil 600 400 Nil Table Showing Adjustment Particulars A B C Firm Profit wrongly distributed and now debited to partners Interest on capital Profit distributed in the ratio of 2:1:2 Adjustment Required 12,000 600 14,000 12,000 400 7,000 12,000 14,000 1,000 35,000 36,000 12,000 2,600 14,600 12,000 7,400 4,600 12,000 2,000 14,000 36,000 36,000 14,600 14,600 12,000 12,000 14,000 14,000 36,000 36,000 Journal Particulars Dr. Amt Cr. Amt B’s Capital A/c To A’s Capital A/c To C’s Capital A/c (Adjustment in respect of interest on capital and wrong division of profit) 4,600 4,600 -
Q10
Mona ltd. acquired assets of Rs.50 lakhs and took over creditors of Rs.5 lakhs from Ram Enter. Mona ltd. issued 8% Debentures of Rs.100 each at par as purchase consideration. Record necessary journal entries in the books of Mona Ltd. Marks:3View AnswerAnswer:
Face value of debentures = 100 Agreed value of debentures = 100 Value of assets acquired = 50,00,000 Less: value of liabilities acquired = 45,00,000 Amount payable to Ram Enterprise = 45,00,000 Number of debentures to be issued = 45,00,000 / 100 = 45,000 Journal Particular Amt. Amt. Assets a/c To Liabailities A/c To Ram Ent. (purchase of assets and liabailities from Ram Ent.) 50,00,000 5,00,000 45,00,000 Ram Ent. To 8% Debentures A/c (issue of 8% debentures at par) 45,00,000 45,00,00
