Accountancy : Company Accounts and Analysis of Financial Statements 2006 CBSE [ Delhi ] Set III
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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
Distinguish between partner’s capital Account and Current Account. Marks:2View AnswerAnswer:
Partner’s capital Account is the account which shows the amount of capital introduced by the partner into the business. Partner’s current account is the account which shows all the adjustments relating to drawings, interest on drawings, interest on capital, share of profit etc. -
Q3
What are calls-in-Arrears? Marks:2View AnswerAnswer:
Calls-in-arrears refers to the amount which has not been paid by the shareholders on the calls made by the company. -
Q4
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 dividend
c) Receipt of Dividendd) Interest Received Marks:2View AnswerAnswer:
(a) Financing Activities (b) Investing activities (c) Investing activities (d) Investing activities -
Q5
What is meant by issue of shares for consideration other than cash? Marks:2View AnswerAnswer:
When a company issue shares not for cash but for purchase of assets or services, it is called issue of shares for consideration other than cash. -
Q6
What does a Bearer Debenture mean? Marks:2View AnswerAnswer:
A bearer Debenture means a debenture which is playable to its holder or bearer. -
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 1,2004 to share profit and loss in the ratio of 3:2:1. It was 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 contribution were A:Rs.3 lakhs, B: Rs.2 lakhs and C: Rs.1 lakh. The profit for the period ended March 31, 2005 were Rs.1,20,000 show the distribution of 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 Net profit after charging interest A’s Share of profits(1,05,000 X 3/6) B’s share of profits(1,05,000 X 2/6) C’s share of profits(1,05,000 X 1/6) S’s minimum profit guaranteed Shortfall to be borne by A&B (30,000 -17,500) In the absence of any specified instruction it is presumed that both A and B shall bear the shortfall in their profit sharing ratio 3:2 Shortfall to be borne by A (12,500 X 3/5) Shortfall to be borne by B (12,500 X 2/5) Hence, A’ share of profit (52,500 + 7,500) B’s share of profit (35,000 - 5,000) C’s share of profit (17,500 + 7,500 + 5,000) 1,05,000 52,500 35,000 17,500 30,000 12,500 7,500 5,000 45,000 30,000 30,000 -
Q10
Romi Ltd acquire assets of Rs.20lakhs and took over creditors of Rs.2 lakhs from kapil enter. 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 enter. = Rs.18 lakhs Face value of debentures = Rs.100 + Premium @ 255 = Rs.25 Agreed value of debenture = Rs.125 No of debentures to be issued = 18,00,000 / 125 = 14,400 Journal Particulars Dr. Amt. Cr. Amt. Assets A/c Dr . To creditors A/c To Kapil Enterprises (purchase of assets and creditors from kapil enter.) 20,00,000 2,00,000 18,00,000 Kapil enter. Dr. 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
