Accountancy : Company Accounts and Analysis of Financial Statements 2006 CBSE [ Delhi ] Set II
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Q1
What is a Cash Flow Statement? List any two objectives of preparing the statement. Marks:2View AnswerAnswer:
Cash flow statement may be defined as a statement showing inflows and outflows of cash and cash equivalents during the specified period. (1) To depict sources and uses of cash (2) To ascertain liquidity of the enterprise. -
Q2
Why is it necessary to have a partnership deed? Marks:2View AnswerAnswer:
It is necessary to have a partnership deed for the following reasons: i) Partnership deed regulates the rights, duties and liabilities of the partners ii) Partnership deed avoids disputes in future. -
Q3
What is meant by Minimum Subscription? Marks:2View AnswerAnswer:
Minimum subscription means the minimum amount that must be subscribed by the public. According to SEBI guidelines minimum subscription has been fixed at 90% of the entire issue. -
Q4
What are preference Share? Marks:2View AnswerAnswer:
A preference share is one which enjoy some preferential rights over equity shares. A preference share enjoy following rights in all the cases: i) Right to receive dividend at a fixed rate. ii) Rights to return of capital on the winding-up of the company -
Q5
What are registered Debentures? Marks:2View AnswerAnswer:
Registered debentures may be defined as the debentures which are payable only to the debenture-holders registered with the company. -
Q6
Classify the following into Cash flows from investing activities/ Financing activities while preparing a Cash Flow Statement: (a) Redemption of Preference Shares (b) Purchase of Fixed Assets (c) Payment of Dividend (d) Interest Received Marks:2View AnswerAnswer:
(a) Financing activities (b) Investing Activities (c) Investing Activities (d) Investing Activities -
Q7
List any three items that can be shown under the heading ‘Reserves & Surplus’ in a Company’s Balance Sheet. Marks:3View AnswerAnswer:
i) Capital Reserve ii) Capital Redemption Reserve iii) Profit & loss Account. -
Q8
From the following data prepare a Statement of Profits in the comparative form: Particulars 31.3.2004 31.3.2004 Sales Gross profit Ratio Administrative Expenses Income Tax 6,00,000 30% 40,000 50% 8,00,000 40% 1,00,000 50% Marks:3View AnswerAnswer:
Comparative Statement of Profit for the years ending 31st March, 2004 and 2005. Particulars 31.3.2004 31.3.2005 Increase or Decrease Increase or Decrease Sales Cost of goods sold 6,00,000 4,20,000 8,00,000 4,80,000 2,00,000 60,000 33.33 14.28 Gross Profit Administration Expenses 1,80,000 40,000 3,20,000 1,00,000 1,40,000 60,000 77.78 150 Profit Before Tax Income Tax 1,40,000 70,000 2,20,000 1,10,000 80,000 40,000 57.14 57.14 Profit after tax 70,000 1,10,000 40,000 57.14 -
Q9
A, B & C entered into a partnership on October 1st, 2004 to share profits and losses in the ratio of 3:2:1. B, however personally guaranteed that C’s share of profit after charging interest on capitals at 5% p.a. would not be less than Rs.30,000 in any year. The capital contributions were A: Rs.3 lakhs. B: Rs.2 lakhs, C: Rs.1 lakhs. The profit for the period ended March 31,2005 were Rs.1,20,000. Show the distribution profits. Marks:3View AnswerAnswer:
Net Profit Less: Interest on Capital @5% p.a for 6 months A(3,00,000 X 5/100 X 6/12) 7,500 B(2,00,000 X 5/100 X 6/12) 5,000 C(1,00,000 X 5/100 X 6/12) 2,500 1,20,000 15,000 Divisible Profit (Net profit after charging interest) A’s share of Profit (1,05,000 X 3/6) B’s share of profit (1,05,000 X 2/6) C’s share of profit (1,05,000 X 1/6) C’s minimum profit guaranteed Short fall to be borne by A (30,000 – 17,500) Hence, A’s share of profit B’s Share of profit (35,000 – 12,500) C’s share of profit (15,500 + 12,500) 1,05,000 52,500 35,000 17,500 30,000 12,500 52,500 22,500 30,000 -
Q10
Romi Ltd acquired assets of Rs.20 lakhs and took over creditors of Rs.2 lakhs from kapil Enterprises. Romi ltd. issued 8% debentures of Rs.100 each at a premium of 25% as purchase consideration. Record necessary journal entries in the books of Romi Ltd. Marks:3View AnswerAnswer:
Value of assets taken over = Rs.20 lakhs Value of creditors taken over = Rs.2 lakhs Net amount payable to Kapil Enterprises = Rs.18 lakhs Face value of debentures = Rs.100 + Premium @ 25% = Rs.25 Agreed value of debenture = Rs.125 No. of Debentures to be issued = 18,00,000 / 125 = 14,400 Particulars L.F Dr. Amt Cr. Amt. Assets A/c Dr . To Creditors A/c To Kapil enter. (Purchase of assets and creditors from Kapil Enter.) 20,00,000 2,00,000 18,00,000 Kapil Enter. To 8% Debentures A/c To Securities Premium A/c (Issue of 14,400 debentures of Rs.100 each at a premium of 25%) 18,00,000 14,40,000 3,60,000
