Accountancy : Company Accounts and Analysis of Financial Statements 2006 CBSE [ All India ] Set III
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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 in the middle of every month? Marks:2View AnswerAnswer:
If drawings are made by the partners in the middle of every throughout the year, interest on total amount of drawings would be calculated for 6 months. Thus, Interest on Drawings = total Amount of Drawings * Rate of interest /100 *6/12 -
Q3
What is meant by Reserve Capital? Marks:2View AnswerAnswer:
Reserve capital means that part of uncalled capital which has been reserved for the purpose of liquidation only at the time of winding-up. -
Q4
What iv Over-subscription? Marks:2View AnswerAnswer:
When the number of share applied for is more than the number of shares offered for issue, it is known as over-subscription. -
Q5
What does a secured debenture mean? Marks:2View AnswerAnswer:
Secured debenture means a debentures which is secured either on a particular assets of the issuer company or on all of the company. -
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 Paid Marks:2View AnswerAnswer:
(a) Cash flow from financing activities (b) I nvesting activities (c) I nvesting activities (d) Financing 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 account 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 1:2:2. Pass an adjustment journal entry. Marks:3View AnswerAnswer:
Capital after the close of books of accounts 24,000 20,000 12,000 Less: Share of profit 12,000 12,000 12,000 Capital in the beginning 12,000 8,000 Nil Interest on the capital @5% 600 400 ---- 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 1:2:2 Adjustment Required 12,000 600 7,000 12,000 400 14,000 12,000 14,000 1,000 35,000 36,000 12,000 7,600 4,400 12,000 2,400 14,400 12,000 2,000 14,000 36,000 36,000 12,000 12,000 14,400 14,400 14,000 14,000 36,000 36,000 Journal Particulars Dr. Amt Cr. Amt. A’s Capital A/c To B’s Capital A/c To C’s Capital A/c (Adjustment in respect of interest on capital and wrong division of profit) 4,400 2,400 2,000 -
Q10
Mona Ltd. Acquired assets of Rs.50 lakhs and took over creditors of Rs.5 lakhs from Ram Ent. Mona Ltd. issued 8% Debentures of Rs.100 each at a discount of 10% as purchase consideration. Record necessary journal entries in the books of Mona Ltd. Marks:3View AnswerAnswer:
Face value of the debenture = 100 Less Discount = 10 Agreed value of debenture = 90 Value of assets acquired = 50,00,000 Less: Value of Liabilities acquired = 5,00,000 Amount payable to Ram ent. = 45,00,000 No. of debentures to be issued = 45,00,000/90 = 50,000 Journal Particulars Dr. Amt Cr. Amt. Assets a/c To Liabilities A/c To Ram Enterprises (Purchase of assets and liabilities from Ram Ent.) 50,00,000 5,00,000 45,00,000 Ram Ent. Dr. Discount on Issue of Debentures A/c To 8% Debentures A/c (Issue of 50,000 debentures at a discount of 10%) 45,00,000 5,00,000 50,00,000
