Balance sheet of X,Y & Z Liabilities Amount Assets Amount Creditors X's capital Y's capital Z's capital Z To profits X

Transcription

1 TEST PAPER- What is partnership deed? Mention the items to be appear to be shown on the credit side of partners capital accounts when capitals are fluctuating in nature. Why do we prepare profit and loss appropriation account? State the main provisions of the Indian partnership act 93 to be applied in the absence of any partnership agreement. how is deferred revenue expenditures dealt in the books at the time of dissolution of partnership firm. what do you mean by minimum subscription. What is meant by private placement of shares. State any three objectives of financial statement analysis. X,Y & Z are partners sharing profits in the ratio of 5:3:. Z is given a gurantee that his share of profits in any year would be Rs deficiency if any would be borne by X & Y equally. the profits for the year 00- amounted to Rs pass journal entry. 3 A firm earned a net profit of Rs 8000, Rs 0000, Rs 000 and Rs 000 during the year 00, 007, 008 and 009 respectively. the firm has investment of Rs a fair rate of return on investment is 5%p.a. calculate firm goodwill by three year purchase of average super profits of last four years. X & Y are in partners sharing profits in the ratio of 3:. Z is admitted for / share. calculate their new profit loss sharing ratio. L& M were partners sharing profits in the ratio of :3. they admit O as a new partner. the new profit sharing ratio of L,M & O will be 3:3:. O brought Rs for his capital. the goodwill of the firm on O's admission at Rs O brought his share of goodwill in cash. calculate sacrificing ratio and pass journal to record the above transactions. X& Y were partners sharing profits in the ratio of 3:. they admit Z as a new partner. Z brought in Rs 0000 in cash which include his share of premium Rs 0000 for his /5 share in firms profits. goodwill account already existed in the books of firm amounted to Rs calculate sacrificing ratio and pass journal to record the above transactions. 5 Compute interest on drawings of 0%p.a. for the year ended if he withdrew Rs 5000 p.m for first six month in the beginning of each month and withdrew Rs 5000 p.m. for the later six month at the end of each month. ABC ltd. invited applications for 000,% Debentures of Rs 00 each at par on , redeemable in 07 at par. Applications were received for 8000 debentures. company make prorata allotment of debentures. pass journal. X & Y are partners in a firm sharing profits in the ratio of 3:. they admit Z into partnership for /5 share. Fill in the blanks: Revaluation account particulars amount particulars amount To Plant By patent 8000 To profits X Z Partners capital account particulars X Y Z Particulars X Y Z To Bal. c/d BY Bal. b/d By Reserves By Revaluation By cash By premium Balance sheet of X,Y & Z Creditors X's capital 3700 Y's capital Z's capital Plant and Machinery patent furniture stock debtor cash

2 Cash account Particulars Amount Particulars Amount To Bal b/d To Z capital To premium for goodwill By bal c/d A, B & C were partners in a firm sharing profits in the ratio of 3::. On 8 th Feb. 00 B retired. On the date of his retirement the balance in his capital account was Rs The other assets and liabilities of the firm on the date were as follows: Cash 0000; debtors 0000; plant 0000; building 00000; stock 0000 and investment The following was agreed between the partners on the retirement of B S. Building is appreciated by 0%. Plant to be depreciated by 0%. A provision of 5% on debtors to be created for doubtful debts. Stock was to be valued at 8000 and investment at An old photocopier previously written off was sold for Rs 000. Partner had to pay 000 to the family of an employee who died in an accident. B was paid 3000 in cash and the balance in three equal yearly installments with starting from Pass the necessary journal entries to record the above adjustments; prepare revaluation account and B s capital account. The firm closes its books on 3 st march every year. 8 A,B and C are partners in a firm.their balance sheet as on 3--0 is given below : LIABILITIES AMOUNT ASSETS AMOUNT Creditors 0000 Machinery 0000 Reserves 0000 Furniture 500 A Capital 0000 Stock 0500 B Capital 5000 Debtors 5000 C Capital 5000 P/L account A died on The deed provides that the representatives of the deceased partner shall be entitled to : Capital as appearing on the last balance sheet. Interest on % p.a up to the date of death. His share in profit up to the date of death the basis of average profit of last three years. His share in undistributed profits. his share of firm's goodwill valued at twice the average profits of last three year. Interest on his drawings up to the date of death will be charged at 0%p.a. Profit of the last three years was Rs 5000, Rs and Rs A's drawings up to the date of death amounted to Rs Prepare A's capital account and his Executor account. 9 Bharat ltd invited applications for issuing equity shares of Rs 0 each. The amount was payable as follows: On Application Rs 3 per share; On Allotment Rs 5 per share; and on First and Final call Rs per share Application Rs 3 per share. All the shares were applied and allotted and all the money was duly received on time except allotment and calls on 3000 shares by Ram. His shares were forfeited. Out of these shares 500 shares were reissued as fully paid Rs 8 per share. Pass journal. 0 Redeemed its 9000,8% debentures of Rs 00 each by converting it into equity shares of Rs 50 each issued at 0% discount. pass journal. X Ltd. Furniture for Rs from Y Ltd. The payment to Y ltd. Was made by issue of equity shares of Rs 0 each. Pass journal entries for the above transactions when: Shares were issued at 0% premium. Shares were issued at 0% discount. Pass journal for the following transactions: Issued Rs % Rs 05 each Rs 0 each. Issued Rs % Rs 95 each Rs 05 each. Issued Rs % Rs 00 each Rs 0 each. (assuming that nominal value of each debentures was Rs 00 each) P,Q & R are partners sharing profits in the ratio of 5:3:. the firm was dissolved. on dissolution make journal entries regarding the following:

3 On the date of dissolution the general reserve shows a balance of Rs 000. Investment of book value Rs 8000 taken over by P at a value of Rs 800. A bill discounted with bank, for which liability of Rs 0000 had to be paid. Asses realised Rs Realisation account shows a loss of Rs 300. Realisation expenses Rs 000 was paid by Q. 3 From the following information calculate the following ratios: Liquid ratio. Debt equity ratio. Fixed assets turnover ratio. Information: Net sales- Rs ; Gross profit- Rs 00000; current assets -Rs 00000; Closing stock- Rs0000; prepaid insurance- Rs 000; current lisbilities- Rs 0000; Share capital- Rs ; Reserves and surplus- Rs 0000; Preliminary expenses- Rs 7000; Fixed assets- Rs R, S & D were partners in a firm sharing profits in the ratio of 3:3:. their capitals were Rs ; Rs & Rs respectively. the firm closes its books on 3 march every year. on R died. The executors of a deceased partner according to the deed, was entitled for the following: Interest on 9% p.a. till the date of death from the first day of the accounting year. His share of goodwill- The goodwill of the firm is valued at Rs on the date of death. His share of profits- The profits or the firm for the year ended was Rs R executors was paid the sum due in two equal instalments with p.a. Prepare R's capital account as on to be rendered to his executors and his executors loan account for the year ending and X & Y were partners in a firm sharing profits in the ratio of 3:. they admit Z into partnership for / share in profits. Z was to bring Rs 0000 as his capital and the capitals of X & Y is to be adjusted on the basis of Z capital having regard to profit and loss sharing ratio. the balance sheet of X & Y as on was as follows: Liabilities Amount Liabilities Amount Creditors 3000 Cash 0000 Bills payable 0000 Debtors 3000 Reserves 000 Stock 000 X's capital Machinery 000 Y'scapital Building The other terms of agreement on admission of Z were as follows: Z will bring Rs 000 for his share of goodwill in cash. Building will be valued at Rs and machinery at Rs A provision of % will be create on debtors for bad debts and Capital account X &Y will be adjusted by cash account. Prepare revaluation account, partners capital account and balance sheet of the new firm. Test paper- Ram Sham are partners sharing profits in the ratio of 3:. They admit Mohan for 3/0 share which he acquire /0 from ram and /0 from sham. Calculate their profit sharing ratio. P,Q& R are partners sharing profits in the ratio of :3:. P decided to take retirement from the firm; and on the same date goodwill of the firm is valued at Rs Q & R decided to share future profits in the ratio of :. However goodwill account already existed in the books at Rs 500. Pass journal. 3 Gee Ltd. acquired plant and machinery for Rs payable 0% in cash and balance in form of 8% debentures of Rs 00 each issued at 0% discount. pass journal. Current ratio of a firm is.5:. if its working capital is Rs calculate current assets and current liabilities. If current ratio of a firm is 3.8: and its acid test ratio is :. if closing stock is valued at Rs calculate current assets and working capital. Company's gross profit ratio is 0%. if cogs of the company is Rs calculate the amount of sales. 5 P,Q & R were equal partners. their balance sheet as on stood as follows: Creditors 5700 JLP 5000 JLP 5000 Cash 500 P's capital Stock 000 Q's capital 0000 Investment 700

4 R's capital 0000 Furniture 3700 Plant and machinery The firm was dissolved on the above date. P took over investment and stock at Rs 000. JLP was realized at surrender value furniture was sold at book value. plant and machinery were realized Rs 800. creditors were paid in full. pass necessary journal entries on dissolution of firm. A,B & C were partners sharing profits in the ratio of 7:3:. from st January 0 they decided to share profits and losses in the ratio of 8::3. goodwill is to be valued at the average of three years profits preceding the date of change of profits sharing ratio. the profits for 00,009,008and 007 were Rs 90000, Rs 0000, Rs 8000 and Rs 5000 respectively. pass journal. 7 Journalize the following transactions: Directors of company forfeit 00 shares of Rs 0 each due to the non-payment of final call of Rs per share. 50 of these share were reissued for Rs per share as fully paid up. Company forfeited 300 shares of Rs 50 each ( Rs 0 called up). on these share only application money of Rs 5 was paid. half of these shares were reissued for Rs 700 as fully paid up. forfeit 50 shares of Rs 00 each issued at a discount of Rs 5 per share due to the non-payment of st call of Rs 5 and final call of Rs 0 per share. these shares were later on Rs 80 per share as fully paid up. 8 Ram sham and Mohan were partners in a firm having capitals of Rs 0000, Rs0000 and Rs their current account balances were Rs 5000 and Rs 000(Dr). according to the deed the partners were entitled to interest on Mohan was entitled to a salary of RS 000P.a. the profits were to be shared as follows: The first Rs 0000 in capital ratio. The nest Rs in the ratio of 5:3:. Remaining profits to be shared equally. The firm made a profit of Rs 5000 before charging interest and salary. Prepare profit and loss appropriation account. 9 A,B & C are partners sharing profits in the ratio of :3:. A retires and his share is taken by B & C equally. Find their new profit sharing ratio.the goodwill on the date of retirement is valued at Rs pass journal also. 0 P & Q are partners shafing profits in the ratio of :. the admit R into partnership firm for /5 share in future profits. R shall bring Rs for his capital and Rs 8000 for his share of premium in cash. pass journal. Prem & kewal are partners sharing profits in the ratio of 3:. the admit Ram into partnership firm for / share which he acquire equally from prem and kewal. Ram shall bring Rs as his capital and required amount for his share of goodwill in cash. goodwill of the firm is valued at Rs pass journal a) Gamma limited issued its 5000, 85%Debentures of Rs 00 each repayable after 3years on the following terms: Debentures were Rs 95 Rs 0. Debentures were Rs 05 Rs 0. Pass journal. b) Poonam ltd has a balane of Rs in its profit and loss account instead of declaring a dividend it decided to redeem its Rs , 9% debentures at a premium of 0%. Pass journal entries in the books of the company for the redemption of debentures. 3 P, Q and R were partners sharing profits in the ratio of 3::. their balance sheet as on 3st march 00, Q Creditors 3000 Cash 700 Bills payable 590 Debtors 8000 P s capital 5000 Stock 90 Q s capital 0000 Building 3000 R s capital 0000 Profit and loss account Q retired on the above mentioned date on the following terms: Building is to be appreciated by Rs A provision for doubtful debts to be made at 5% on debtors. Goodwill is to be valued at Rs Rs 800 to be paid to Q immediately and the balance in three equal annual installments along with interest 0%p.a. Prepare revaluation account and partners capital account and Q loan account till it is finally settled. a. What will be the maximum amount of discount allowed on reissue of forfeited shares. b. State whether conversion of debentures into equity shares by a financing company will result into inflow,

5 outflow or no flow of cash. c. Where do we record partners drawings out of capital when partners capital are fixed. 5 X,Y and Z were sharing profits in the ratio of 5:3:. they decided to share future profits in the ratio of :: with effect from They decided to record the effect of the following, with effecting their book values- Profit and loss Rs 000 Advertising suspense account Rs 000 Pass the necessary adjusting entry. Aman, Bisen and were partners sharing profits in the ratio of 3:. their balance sheet as on 3st march 00, LIABILITIES AMOUNT ASSETS AMOUNT Aman s capital Building Goodwill Bisen s capital Stock 0000 General reserve Workmen compensation fund Debtors 0000 Less; Provision Loan Machinery Creditors Bank C was admitted as a new partner on the date on the following terms. Stock is revalued at Rs 35000; Building is to be appreciated by Rs 0000 whereas machinery is to be brought down by Rs Provision is to be made for outstanding repair bill Rs 000. provision for doubtful debts is to be brought to Rs 000. C paid cash Rs 0000 as his share of goodwill and further cash as would make his capital equal to 5% of the total capital of the new firm, after the above revaluation account and adjustment are carried out. Prepare revaluation account and partners capital account and balance sheet of new firm. 7 Sumit and Neeraj are partners sharing profits in the ratio of 3:. from st January 0 the admit kala into partnership for /5 share of profit with a guarantee of Rs they earned a net profit of Rs 0000 for the year ended on 3st December 0. pass journal and show the appropriation of profit. 8 A,B & C are partners in a firm sharing profits in the ratio of ;3:3. their fixed capitals were Rs 00000, Rs & Rs respectively. interest on capital for the year ended 00 was credited to instead of 0% p.a. pass necessary adjustment entry. show your working clearly. 9 a) X,Y & Z are partners in a firm sharing profits in the ratio of 3::. On -0- X died so Y & Z decided to admit 'D' son of X as a partner for /5 share. On the date General reserve appeared in the Balance sheet at Rs It was decided to keep 5% of general reserve as provision for doubtful debts. Pass journal. Y,Z & d share future profits in the ratio of ::. b) Alpha lt. has a paid up capital of Rs and a balance of Rs in securities premium rreserve account on The company management do not want to carry over this balance. State the purpose for which the balances can be utilized. 0 TEST PAPER- 3 State the purpose for which premium money can be utilized. What is meant by call in arrears? State any three conditions on which shares can be issued at discount. Can forfeited shares be issued at discount? If so to what extent? What do you mean by minimum subscription? Give any two difference between preference shares and equity shares. What is menat by average profit? State the condition under which a company can refund the applications amount in the event of under-subscription. Is a sleeping partner liable to the act of other partners? State the steps other than rejection of applications that a company can take in case of over suscription. X, Y & Z were partners sharing profits in the ratio of 7::9. Their fixed capitals were Rs 00000, Rs and Rs The deed provided for the following: Interest on 9%p.a. Salary of Rs 000 per month to Y. Interest on During the year ended the firm earned a profit of Rs Interests on drawings were Rs 750, Rs 50 and Rs 50.Prepare profit and loss appropriation account for the year ended

6 3 Bisen & Ciser were partners in a firm. On their firm was dissolved. On that date Bisen s capital was Rs and Ciser s capital was Rs Creditors on that date were Rs 0000 and there was balance of Rs 0000 in general reserve. Cash balance was Rs Sundry assets realized Rs and expenses on dissolution were Rs 5000 which was paid by Ciser. Prepare Realization Account, Cash Account and Partner s capital Account. Z Ltd. Issued Rs , 9% debentures on at a premium of 5%. On out of these Rs 00000, 9% debentures were redeemed by converting them into equity shares of Rs 00 each issued at par and Rs , 9% debentures were converted into 0% preference shares of Rs 00 each issued at premium of 5%. Pass journal for the redemption of debentures. X ltd has 80000, 8% debentures of Rs 00 each due for redemption on march 3 st 00. Assume that debentures redemption reserve has a balance of Rs on that date. Record the necessary journal on redemption. A company issued 000; 5% debentures of Rs 00 each issued at a discount of 5%, redeemable at 0% premium after 5 years. Give journal on issue and on redemption of debentures. Issued 5000, % debentures of Rs 00 each redeemable at par. Issued 000, 8% debentures of Rs 00 each at 5% premium, redeemable at par. Issued 0000, 0% debentures of Rs 00 each at % discount, redeemable at 0% premium. 5 A company earns gross profits of 0% on cost. Its credit sales are twice its cash sale. If the credit sales are Rs Calculate the gross profit ratio of the company. From the given information calculate the stock turnover ratio: Sales 00000; gross profit 5%; opening stock was / th of the value of closing stock. Closing stock ws 0% of sales. Pass journal for the following: 00 shares of Rs 0 each,issued at a premium of 0 % on which application of Rs 8 (including premium) was only paid, have been forfeited. Half of these shares were re-issued as fully paid up for Rs each. Forfeited 00 shares of Rs 00 each, issued at 0% discount, on which he had paid only application money of Rs 30 per share. Out of these 500 shares were Rs 85 per share as fully paid up. Forfeited 30 shares of Rs 50 each issued at discount of Rs 5 per share due to the nonpayment of final call of Rs per share. Of these 50 shares were re-issued as Rs 0 per share as fully called up. 700, shares of Rs 00 each issued at 0% premium (payable Rs on application and balance on allotment) on which only application money of Rs 30 per share (including premium) was paid are forfeited. Final of of Rs 5 each o thee shares are not yet made. Out of these 500 shares were Re- issued to ram for Rs 70 as Rs 85 called up. Pass journal. 7 B and C are the partners sharing profit and losses in the ratio of 3:.their balance sheet as on was as follows: BALANCESHEET Creditors Cash 9000 Workmen compensation fund 000 Debtors 0000 Provision for bad debts 5000 B s Capital 0000 C s Capital 0000 Stock 000 General reserve 5000 Plant And Machinery 5000 Land and building They admit T as a new partner on on the following terms: T should pay Rs 0000 cash only for his share of capital. He would receive one-sixth share of future profit. Goodwill of the firm is valued at Rs Plant should depreciate by 0% and building should be increased to Rs Stock should be reduced by Rs 000. Rs 3000 more should be provided for bad debts. Prepare Revaluation account, capitals account and balance sheet of new firm. 8 Prepare a comparative income statement from the following information: Particulars Revenue from operations 50% of cogs 00% of cogs Purchases Cogs Operating expenses Income tax 0% 0% 9 X,Y& Z are partners sharing profits in the ratio of 5:3:. Z is given a gurantee by X that his share of profits in any

7 year would not be less than Rs Deficiency if any would be borne by X only. The profits for the year 009 and 00 amounted to Rs 3000 and Rs Prepare profot and loss appropriation account for 009 &00. 0 P,Q & R have been sharing profits in the ratio of 3::. R retired on st January 0. P & Q decided to share future profits in equal proportion. Goodwill of the firm on the date of retirement is valued a Rs Pass journal on R' s retirement. A& B are partners in a firm sharing profits in the ratio of 3:. They admit C into partnership, C paying a premium of Rs 000 for ¼th share of the profits. A, B &C decided to share future profits in the ratio of 3:3:. Give journal. X, Y and Z are partners started business on st jan-008 with capitals of Rs 00000, Rs and Rs respectively. As per the provision of the deed: was to be provided on capital. Profits are to be divided in the ratio of 5:3:. Ignoring the above provisions the profits for the year ended on 3 st march 008 amounted to Rs was divided among them in capital ratio. Pass adjusting entry to rectify the above. 3 MNG Ltd. Forfeited 00 shares of Rs 0 each issued at a premium of Rs per share for the non-payment of allotment money of Rs 5 per share(including premium). The first and final call of Rs per share has not been made as yet. 50% of the forfeited shares were reissued at Rs 8 per share fully paid up. Pass journal on forfeiture and reissue. A & B are partners shaing profits in the ratio of 5:. They admit Z into partnership for /0 share of profits which he acquires in equal proporions from both. Find their new profits sharing ratio. R, S & M are partners sharing profits in the ratio of /5,/5 and /5. M decides to retire and is share is taken by R & S in the ratio of :. Calculate their new profit sharing ratio. 5 A joint stock company issued 0000, 9% debentures of Rs 00 each at a premium of 5%. These debentures were to be redeemed at a premium of 0% by converting them into equity shares of Rs 00 each at a premium of 5%. Pass journal o date of issue and on redemption of debentures. P,Q & R are partners sharing profits in the ratio of 5::. R was given a guarantee that his profit in any year will not be less than Rs any deficiency will be borne by P & Q in equal proportion. profit for the year ended on was Rs pass journal. 7 B &C are partners in a firm sharing profits in the ratio of 3:. On st April 009 A is admit for / thshare which he acquire from B & C in equal proportion. A will bring Rs 7000 in cash including Rs 000 for his share of premium. However goodwill account appears in the books of old firm at Rs 000. Calculate their new profit sharing ratio and Pass journal. 8 Pass journal for the following transactions: Issued 8% Rs 05 each Rs 0 each. Issued 8% Rs 95 each Rs 05 each. (assuming that nominal value of each debentures was Rs 00 each) TEST PAPER- What share of profits would a sleeping partner who has contributed 75% of the total capital get in the absence of partnership deed? What is super profits? In case of dissolution of firm which liabilities are to be paid of first? Can a company issue shares at % discount in its initial public offer(ipo)? Give reason. How does a market situation affect the value of goodwill of a firm? Good luck company purchased machinery costing Rs from fair deals Ltd. the company paid the price by issue of equity shares of Rs 0 each at a premium of Rs.5 per share. pass journal. X & Y are partners in the firm sharing in the ratio of 3:. They admit Z into partnership for / share in profits and bring Rs for his share of capital and Rs 0000 for his share of goodwill in cash. On the same date Y retire from the firm. X & Z decided to share future profits equally. For this purpose assets were revalued from to Journalize. 3 Z ltd. redeemed its 0000, % debentures of Rs 00 each at 0% premium by converting them into equity shares of Rs 50 each issued at 5% premium. pass journal. X & Y are partners in a fir sharing profits in the ratio of 3:. the following was the balance sheet of the firm as on X's capital 0000 Sundry assets Y's capital The profits Rs for the year ended were divided between partners without allowing interest on

8 and salary to Rs 000 per month. during the jyear X withdrew Rs 0000 and Y withdrew Rs pass adjustment entry. 5 A business earn a average profit of Rs 0000 during the last few years and the normal rate of return in similar business is 0%. find the value of goodwill by Capitalisation of super profit method and Super profit method if the goodwill is values at 3 years purchase of super profits. The assets of the business were Rs and external liabilities Rs Pass journal entry tor the issue and redemption of debentures in the following cases: 0000, 9% debentures of Rs 0 each issued at 5% premium, repayable at par. 0000, 9% debentures of Rs 00 each issued at 0% premium, repayable at 30% premium. 7 Pass journal entries for the following transactions on the dissolution of the firm of P & Q after all assets other than cash and all external liabilities have been transferred to realization account: Bank loan Rs 000 was paid. Stock worth Rs 000 was taken by partner Q. Partner P paid a creditors of Rs 000. An assets not appear in the books of accounts realized Rs 500. Expenses on dissolution Rs 000 were paid by partner Q. Profits on realization Rs 3000 was distributed between P & Q in the ratio of 5:. 8 C ltd. forfeited 000shares of Rs 00 each issued at discount of 8% due to the non payment f first call of Rs 30 per share. on these shares final call of Rs 0 each was yet to be called. these shares were subsequently reissued at Rs 70 each Rs 80 each paid up. pass journal. Forfeited 70 shares of Rs 0 each issued at a premium of Rs 5 per share(payable with allotment) on these shares only application money of Rs. 50 per share was only paid. out of these 0 equity shares were Rs each. pass journal. 9 M,N & O were partners sharing profits and losses equally. their balance sheet on was as follows: M's capital Plant and machinery 0000 N's capital Stock O's capital Debtors General Reserve Cash in bank 0000 Creditors 0000 Cash in hand N died on march 00. according to the deed executors of the deceased partners are entitled to: Balance of partners capital account. Interest of 5%p.a. Share of goodwill calculated on the basis of twice the average profits and Share of profits from the closure of the last accounting year till the date of on the basis of twice the average pf three completed year's profits before death. Profits for 007, 008 and 009 were Rs 80000; Rs and Rs respectively. show the working for deceased partner's share of goodwill and profits till the date of his death. pass journal entries and prepare N's capital account to be rendered to his executors. 0 On the balance sheet of R & S who share profits in the ratio of 3: was as follows: Creditors 0000 Cash 5000 Profit and loss account 5000 Debtors Less: provision 700 R's capital 0000 Stock 5000 S 's capital Plant and machinery Patents On this date T was admitted as a partner for /5 share on the following conditions: T had to bring Rs as his capital to which amount other partners capitals shall have to be adjusted. He would pay cash for his share of goodwill which would be based on / years purchase o average profits of past four years. The assets would e revalued as under: stock at Rs 0000; plant at Rs 0000; sundry debtors at book value less 5% provision bad debts. The profits of the firm for the years 007, 008 and 009 were Rs 0000; Rs 000 and Rs 7000 respectively. Prepare revaluation account, partners account and balance sheet of the new firm.

9 Raj ltd had a profit of Rs for the year ended on 3 st march 009 after considering the following : Depreciation on building depreciation on plant Rs 5000 Goodwill write off Rs 0000 Loss on sale of machinery Rs 8000 Profit on sale of investment Rs 000 Following was the position of current assets and current liabilities : Stock Rs Rs Bills receivables Rs Rs 0000 Notes payable Rs 0000 Rs 9000 Bank overdraft Rs Rs Outstanding salary Rs Rs 7000 Provision for doubtful debts Rs 5000 Rs 7000 You are required to calculate cash flow from operating activity. What is meant by ESOP? What do you mean by sweat equity shares? what entry will you pass in the books of company for the issue of 000 equity shares of Rs 50 each to the promoters of jsc. 3 Tara limited invited application for equity shares of Rs 0 each issued at 50 % premium payable as follows : Application Rs 5 per share ( including premium of Rs 3per share);allotment Rs per share ( including balance of premium );Final call Rs per share. Applications were received for 0000 shares. directors decided to make prorata allotment of shares. X to whom was 500 shares were allotted was failed to pay call money. Their shares were forfeited and Rs 8 per share as fully paid up. Pass journal P, Q & R were partners sharing profits in the ratio of :3; 5. Om 3 st march 00 their balance sheet was as follows: Creditors Bank 5000 P s capital Debtors Less prov Q s capital Stock R s capital 0000 Building 0000 Goodwill On the above date P retired from the firm on the following terms: Building was to be depreciated by Rs Provision for doubtful debts was to be maintained at 0% on debtors. Salary outstanding Rs 5000 were to be recorded and creditors Rs 000 will not be claimed. Goodwill of the firm was valued at Rs 7000 and the same was to be treated without opening goodwill account. Q & R decided to share future profits in equal proportion. Prepare revaluation account; partners capital account and balance sheet. 5 X,Y &Z are partners sharing profits in the ratio of 3::. However Z is guaranteed Rs 5000 as his share of profits every year. Deficiency if any would be borne by the other partners. The profits for the two years ending and had been Rs and Rs respectively. Show the profit and loss appropriation account for the two years. a) b) Pass journal for the following: 500 shares of Rs 0 each,issued at par were forfeited due to the non payment of of final call of Rs 3 per share.000 of these shares were re-issued as fully paid up for Rs 8.50 each. Forfeited 900 shares of Rs 00 each ( Rs 80 called up), issued at 0%, on which he had paid only application money of Rs 30 per share. Out of these 00 shares were re-issued as Rs 05 per share as fully paid up. TEST PAPER- 5 A)Pass journal for the following transactions: Issued 8% Rs 05 each Rs 0 each. Issued 8% Rs 95 each Rs 05 each. Issued 8% Rs 00 each Rs 0 each. (assuming that nominal value of each debentures was Rs 00 each) XYZ limited invited application for equity shares of Rs 00 each issued at 0 % premium payable as

10 follows : Application Rs 30 per share ( including premium of Rs0 per share); Allotment Rs 50 per share ( including premium of Rs 0per share); st call Rs 0 per share and balance on final call. Applications were received for shares. Excess applications were rejected. X to who hold for 3000 shares was failed to pay the allotment and calls hence his shares were forfeited and half of these shares were reissued Rs 0 per share as fully paid up. Pass journal 3 A, B &C were partners in a firm sharing profits in the ratio of 5:3:. On their balance sheet was as under: Creditors 7000 Building 0000 Reserves 0000 Machinery A capital Stock 0000 B capital 5000 Patents 000 C capital 5000 Debtors 8000 Cash B retired on the date. It was agreed : Goodwill of the firm is valued at years purchase of the average profits of the previous 5 years which were 00 Rs 5000; 00 Rs 3000; 003 Rs 000; 00 Rs 5000 and 005 Rs Patent is valued at Rs 8000; machinery is valued at 8000 and building is A sum of R 50 was to be paid him immediately and balance transfer to his loan account. Prepare revaluation account, partners capital accounts and balance sheet. Following is the balance sheet of D,G & T on 8--00: Creditors Bank 0000 Bills payable 0000 Debtors G s loan 8000 Stock 0000 loan 000 Furniture 5000 Reserve 0000 Land and building 5000 D s capital G s capital 0000 T s capital The firm was dissolved on the above date on the following terms: Debtors realized 8000 and creditors and bills payable were paid at 0% discount. Stock was taken over by D for 5000 and furniture was sold for 000. Land building was sold for The firm had a joint life policy of Rs and the same was with surrender for Rs Prepare realization account, bank account and capital accounts. 5 A& B are partners in a firm sharing profits in the ratio of 3:. They admit C into partnership, C paying a premium of Rs 000 for ¼th share of the profits. A, B &C decided to share future profits in the ratio of 3:3:. Give journal. Mohan and Sohan are partners sharing profits in the ratio of 3:. They admit Karan for /5 th share in the profits of the firm, which he gets equally from Mohan and sohan. Calculate the new profit sharing ratio. R& T are partners sharing profits in the ratio of 3:. S joins the firm. R surrender / th of his share and T /5 th of his share in favour of S. find the new profit sharing ratio. L & M are partners in a firm, sharing profits in the ratio of 7:3. They admit N for 3/ th share of profits, which he takes /7 th from L and /7 th from M. calculate their new profit ratio. L, M & N were partners in a firm sharing profits in the ratio of ;:. Their fixed capitals were 00000; and respectively. The deed provided as follows: Interest on p.a. Salary to N 500 p.m. Interest on drawings is During the year the firm earned a profit of Rs L withdrew 000on the middle of each month through out the year. M withdrew Rs 0000 during the year and N withdrew 500 on the last day of each month.. Prepare profit and loss appropriation account on and partners capital account.. 7 CMC Ltd. Invited applications for issuing equity shares of Rs 0 each at a premium of Rs 3 per share. The whole amount was payable on application. The issue was over-subscribed by shares and allotment was made on prorate basis. Pass journal entries in the books of the company. Rohit Ltd. Purchased assets from Rohan & Co. for Rs A sum of Rs was paid by means of a bank drafts and for the balance due Rohit Ltd. Issued equity shares of Rs 0 each at a premium of 0%. Journalise the above transactions in the books of a company. X & Yare partners sharing profits in the ratio of 3:. S joins the firm for /5 share which he acquire from X & Y in

11 equal proportion. find the new profit sharing ratio. 8 P, R & S are in partnership sharing profits in the ratio of :3:. It is provided that in the partnership deed that, on the death of any partner, his share of goodwill is to be calculated at the half of the profits credited to his accounts during the previous four completed years. R dies on st Jan 005. The firms profits for the last four years ; ; and Determine the amount that should be credited to R in respect to his share of goodwill. X, Y & Z were partners in firm sharing profits in the ratio of 5:3:. On 5 th feb.00 X dies and the new profit sharing ratio of Y & Z was equal. On X death the goodwill of the firm was valued at Rs Calculate the gaining ratio and pass necessary journal entry on X death for the treatment of goodwill without opening goodwill account. 9 Rohit and Suresh are in partnership, sharing profits in the ratio of :3. On march 3 st 005, they agreed to dissolve the business. Pass journal entries at the time of dissolution to record the following: Realization expenses amounted to Rs 000. Deferred revenue advertising expenses appeared at Rs P/L Account on the assets side of the balance sheet was Rs An unrecorded assets of Rs 3000 was taken over by Suresh. Liabilities amounting to Rs 000 already transfer to realization account was settled at Rs 000. Loan to Rohit was adjusted through his capital account Rs New India forfeited 000 shares of Rs 0 each issued at 0% discount of. The company had called up only Rs 8 per share. Final call of Rs per share has not been made on these shares. These shares were allotted to Ramu, who did not pay the first call of Rs 3 per shares. These shares were reissued at Rs 7 per share as Rs8 paid up. Give journal. Forfeited 800 shares of Rs 0 each, (called up only Rs 8 per share). On these shares allotment of Rs 5 per share was not paid. Of these 00 shares were reissued at Rs 7 per share as Rs8 paid up. Give journal. X ltd has 80000, 8% debentures of Rs 00 each due for redemption on march 3 st 00. Assume that debentures redemption reserve has a balance of Rs on that date. Record the necessary journal on redemption. A company issued 000; 5% debentures of Rs 00 each issued at a discount of 5%, redeemable at 0% premium after 5 years. Give journal on issue and on redemption of debentures. A, B &C are partners in a firm sharing profits in the ratio of :3:. A retries and his share is taken up by B & C equally. Find the new profit sharing ratio and the gaining ratio. On the date of retirement goodwill of the firm is valued at Rs 000. No goodwill account appears in the books. Calculate their new profit sharing ration and Pass journal entry to record the goodwill. X ltd secured loan from PNB of Rs y issuing 50000, 8% debentures of Rs 0 each as an collateral security. prepare balance sheet of the company. 3 A,B & C are partners sharing profits in the ratio of 3::. after the accounts for the year have been closed, it was noticed that interest on drawings was not recorded. interest on drawings to partners amounted to Rs 500 to A' Rs 30 to B and Rs 00 to C. Give adjusting entry. A and B are partners in a firm sharing profits in the ratio of :. on they decide to admit C fort /5 share in profits with a guaranteed amount to Rs 5000 per annum. A took to meet the liability arising out of the guaranteed amount to C. the firm earned a profit of Rs for the year ended on 3st march 009. prepare profit and loss appropriation account. 5 X & Y were partners sharing profits in the rtio of :. they admit Z into partnership. X,Y &Z share future profits in the ratio of 3::. Z was required to bring Rs for his capital and Rs 5000 for his share of goodwill in cash. pass journal. Bharat ltd invited applications for issuing equity shares of Rs 0 each at 0% premium (payable with allotment). The amount was payable as follows: On Application Rs per share; On Allotment Rs per share; and on First and Final call Rs per share. Applications were received for shares and prorate allotment was made to all the applicants. Bajaj who was allotted 000 shares failed to pay the allotment money. His shares were forfeited. Out of these shares 500 shares were Rs 8 per share as fully paid up after final call. calculate the amount recirved on allotment. pass journal. TEST PAPER- Distinguish between share and debentures. State any one difference between fixed capital and fluctuating capital account. 3 State any two items to be deducted from the amount payable to the retiring partner. What do you mean by debentures issued as collateral securities?

12 5 Name any two factors affecting the amount of goodwill. P,Q & R are partners sharing profits in the ratio of 5::. R was given a guarantee that his profit in 3 any year will not be less than Rs any deficiency will be borne by P & Q in equal proportion. profit for the year ended on was Rs pass journal. 7 PQR limited issued Rs , % debentures at 0% discount repayable after 3 years at 5% 3 premium. Pass journal on date of issue and show the above transaction in company s balance sheet. 8 Purchased machinery for Rs payable by as follows: 3 Rs in cash and balance in the form of fully paid up equity Rs 0 each (face value Rs 50 each). Pass journal. 9 X, Y and Z are partners started business on st jan-008 with capitals of Rs 00000, Rs and Rs respectively. As per the provision of the deed: was to be provided on capital. Profits are to be divided in the ratio of 5:3:. Ignoring the above provisions the profits for the year ended on 3 st march 008 amounted to Rs was divided among them in capital ratio. Pass adjusting entry to rectify the above. 0 Pass journal for the following transactions: Issued 8% Rs 05 each Rs 0 each. Issued 8% Rs 95 each Rs 05 each. 3 (assuming that nominal value of each debentures was Rs 00 each) A, B &C are partners in a firm sharing profits in the ratio of :3:. A retries and his share is taken up by B & C equally. Find the new profit sharing ratio and the gaining ratio. On the date of retirement goodwill of the firm is valued at Rs However goodwill account appears in the books of old firm at Rs Calculate their new profit sharing ration and Pass journal entry to record the goodwill. M,N & O were partners sharing profits and losses equally. their balance sheet on was as follows: Liabilities Amoun Assets Amoun t t M's capital Plant and 0000 machinery N's capital Stock O's capital Debtors General Cash in bank 0000 Reserve Creditors 0000 Cash in hand N died on march 00. according to the deed executors of the deceased partners are entitled to: Balance of partners capital account. Interest of 5%p.a. Share of goodwill calculated on the basis of twice the average profits and Share of profits from the closure of the last accounting year till the date of on the basis of twice the average pf three completed year's profits before death. Profits for 007, 008 and 009 were Rs 80000; Rs and Rs respectively. show the working for deceased partner's share of goodwill and profits till the date of his death. prepare N's capital account to be rendered to his executors. A,B & C were carrying partnership business sharing profits in capital ratio. On 3 st December 99 the balance sheet of the firm stood as follows: Creditors 000 Cash 000 A S Capital Debtors Less-provision 000 B S Capital 0000 Stock 8000 C S Capital 0000 Building General reserve 0000 Machinery B retired on the above mentioned date on the following terms: Building is to be appreciated by Rs Machinery to be reduced to Rs Provision for doubtful debts to be increased by Rs 000. Goodwill of the firm is valued at Rs 7000.

13 5 Capital of the firm is valued at Rs Prepare Revaluation account, capital account, and the balance sheet after B s retirement Pass journal for the following: 500 shares of Rs 0 each,issued at a premium of 0 % on which Rs 8 (including premium) was called and Rs (including premium) was paid, have been forfeited.00 of these shares were reissued as fully paid up for Rs 8.50 each. Forfeited 900 shares of Rs 00 each, issued at 30% premium (payable with allotment), on which he had paid only application money of Rs 30 per share. Out of these 00 shares were re-issued as Rs 05 per share as fully paid up. Tara limited invited application for equity shares of Rs 0 each issued at 50 % premium payable as follows : Application Rs 5 per share ( including premium of Rs 3per share) Allotment Rs per share ( including balance of premium ) Final call Rs per share. Applications were received for 0000 shares. directors decided to make prorata allotment of shares. X to whom was 500 shares were allotted was failed to pay call money. Their shares were forfeited and Rs 8 per share as fully paid up.pass journal OR XYZ limited invited application for equity shares of Rs 00 each issued at 0 % premium payable as follows : Application Rs 30 per share ( including premium of Rs0 per share); Allotment Rs 50 per share ( including premium of Rs 0per share) and final call Rs 0 per share. Applications were received for shares. Shares were allotted on pro-rata basis to the applicants of 0000 shares. X to who applied for 800 shares was failed to pay the allotment and calls hence his shares were forfeited and were reissued Rs 0 per share as fully paid up. Pass journal A,B & C were partners sharing profit & loses in the ratio of 5:3:.the balance sheet of the firm on the date of dissolution was as follows :- LIABILITIES AMOUNT ASSSETS AMOUNT Sundry Creditors 000 Cash In Hand 000 General Reserves 000 Debtor 0000 Capital Accounts :- Less: Provision A (000) 9000 B Stock 8000 Furniture 000 Plant and Machinery 3000 C Capital 000 Building Plant was sold for 30 and Building was sold for 3300, Stock was sold for 0% less than its book value. Bad Debts amounted to Rs 0. Furniture was taken over by A for Rs 500. Discount of Rs 800 is received from Creditors,.Outstanding Liabilities not provided for amounting to Rs 500 were also paid. The expenses of Realization amounted to Rs 00. Prepare necessary Accounts to close the books of Firm. OR A and B are partners in a firm sharing profits in the ratio of 3:. Their balance sheet as on stood as under: Liabilities AMOUNT Assets Amount A s capital Machinery B s capital Furniture 5000 General reserve 0000 Investment 0000 Workmen compensation funds 9000 Stock 3000 Creditors 3000 Debtors 9000 Less prov Cash

14 On the date they admit C into partnership for / th share in the profits on the following terms: C brings Rs 0000 for his capital and.rs 8000 in cash for his share of goodwill. Debtors are all good. Depreciate stock by Rs 00 & furniture by 0%. An outstanding bill for repair Rs 000 will be brought in books. Half of the investment was to be taken over by A & B in their profit sharing ratio at book value. Prepare revaluation account partners capital account and balance sheet. Part B( Analysis of Financial Statement) Assuming that debt equity ratio of a company is 0.8:. State fiving reason whether the ratio will improve, decline or will have no change in case the long term loan is obtained by the company. Cash flow state is governed by which accounting standard? Under which heading will you classify the following items in the company s balance sheet as per schedule VI Part I: Share forfeiture account. Capital reserve account. Live stock. Premium on redemption of debentures.. Provision for taxation. Preliminary expenses. A company s stock turnover ratio is 5 times. Stock at the end is Rs 0000 more than at the beginning. Sales are Rs and rate of gross profit on cost ¼. Current liabilities Rs Quick ratio Calculate current ratio. X,Y & Z were partners sharing profits inthe ratio of 5:3:. on Xdecided to take retierement from the firm. on the date their balancesheet shows general reserve of Rs and goowill of Rs on occassion of retirement of X goodwill of the firm is valued at Rs pass journal. 3 Test paper-7 Why do we prepare realisation account? State any one difference between fixed capital and fluctuating capital account. 3 State any two items to be deducted from the amount payable to the retiring partner. What do you mean by preliminary expenses? 5 How do we treat Rent payable to partner for premises owned by him use for partnership business? Tara limited invited application for equity shares of Rs 0 each payable as follows : 3 Application Rs 3 per share Allotment Rs 5per share Final call Rs per share. Applications were received for shares. Application for shares were rejected and prorata allotment was made to the remaining applicants. X who was allotted 500 shares was failed to pay the allotment money and call money. Calculate the amount actually received on allotment. 7 PQR limited purchase sundry assets of Rs of Raj traders out of which Rs were paid 3 by issue of 9% preference share of Rs 00 each at a premium of 0%. T he balance was paid by cash. Pass journal. 8 Rosita Ltd. redeemed its 5000, % debentures of Rs 50 R s0 each by converting them into 3 equity shares of Rs 0 each. Journalize the transaction in the books of Rosita Ltd. 9 L, M & N were partners sharing profits in the ratio of 3;:5. Their fixed capitals were 00000; and respectively. The deed provided as follows: Interest on p.a. Salary to L p.a. Interest on During the year the firm earned a profit of Rs L withdrew 0000 on --008, M withdrew Rs 000 on and N withdrew 5000 on