Short Answer TypeWhile preparing Cash Flow Statements what type of activity is, Payments of Cash to acquire Debentures by an investment company?
O.M. Ltd has a Current Ratio of 3.5:1 and Quick Ratio of 2:1. If the excess of Current Assets over Quick Assets as represented by Stock is Rs 1,50,000, calculate Current Assets and Current Liabilities.
Following is the Income statements of Raj Ltd. For the year ended 31-3-2011:
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Particulars |
Amount Rs |
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Income: |
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Sales |
2,00,000 |
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Other Incomes |
15,000 |
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Total Income |
2,15,000 |
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Expenses: |
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Cost of goods sold |
1,10,000 |
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Operating expenses |
5,000 |
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Total Expenses |
1,15,000 |
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Tax |
40,000 |
Prepare a common size Income Statements of Raj Ltd. for the year ended 31-3-2011.
Long Answer TypeFrom the following Receipt and Payments Account of “Green Delhi Club” for the year ended 31-3-2011, prepare ˜Income and Expenditure Account”.
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Receipts and Payments Account of 'Green Delhi Club' for the year ended 31-3-2011 |
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Dr. |
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Cr. |
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Receipts |
Amount Rs |
Payments |
Amount Rs |
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To Balance b/d |
13,200 |
By Salary (paid for 11 months) |
2,200 |
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To Subscriptions |
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25,500 |
By Rent |
800 |
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To Entrance Fee |
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2,000 |
By Electricity |
3,500 |
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To Donations (includes Rs 1,000 for Buildings) |
3,000 |
By Takes |
2,600 |
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To Hall Rent |
2,500 |
By Printing and Stationery |
800 |
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To Sale of Investments (Book value Rs 4,000) |
3,500 |
By Books |
10,000 |
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By 9% Fixed Deposits (on 31-1-2011) |
13,000 |
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By Balance c/d |
16,800 |
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49,700 |
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49,700 |
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B and C were partners sharing profits in the ratio of 3 : 2. Their Balance Sheet as on 31-3-2011 was as follows:
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Balance Sheet of B and C as on 31-3-2011 |
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Liabilities |
Amount Rs |
Assets |
Amount Rs |
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Capital: |
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Land and Building |
80,000 |
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B |
60,000 |
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Machinery |
20,000 |
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C |
40,000 |
1,00,000 |
Furniture |
10,000 |
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Debtors |
25,000 |
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Provision for bad debts |
1,000 |
Cash |
16,000 |
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Creditors |
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60,000 |
Profit and Loss Account |
10,000 |
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1,61,000 |
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1,61,000 |
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D was admitted to the partnership for 1/5th share in the profits on the following terms:
(i) The new profit sharing ratio was decided as 2:2:1.
(ii) D will bring Rs 30,000 as his capital and Rs 15,000 for his share of goodwill.
(iii) Half of goodwill amount was withdrawn by the partner who sacrificed his share of profit in favour of D.
(iv) A provision of 5% for bad and doubtful debts was to be maintained.
(v) An item of Rs 500 included in Sundry Creditors was not likely to be paid.
(vi) An provision of Rs 800 was to be made for claims for damages against the firm.
After making the above adjustments the Capital Accounts of B and C were to be adjusted on the basis of D Capital. Actual cash was to be brought in or to be paid off as the case may be.
Prepare Revaluation Account, Partner’s Capital Accounts and Balance Sheet of the new firm.
'G', 'E' and 'F' were partners in a firm sharing profits in the ratio of 7:2:1. The Balance Sheet of the firm as on 31st March, 2011 was as follows:
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Balance Sheet of 'G', 'E' and 'F' as on 31st March, 2011 |
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Liabilities |
Amount Rs |
Assets |
Amount Rs |
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Capitals: |
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Goodwill |
40,000 |
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G |
70,000 |
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Land & Buildings |
60,000 |
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E |
20,000 |
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Machinery |
40,000 |
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F |
10,000 |
1,00,000 |
Stock |
7,000 |
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General Reserve |
20,000 |
Debtors |
12,000 |
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Loan from E |
30,000 |
Cash |
5,000 |
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Creditors |
14,000 |
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1,64,000 |
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1,64,000 |
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E died on 24th August 2011. Partnership deed provides for the settlement of claims on the death of a partner of a partner in addition to his capital as under:
(i) The share of profit of deceased partner to be computed up to the date of death on the basis of average profits of the past three years which was Rs 80,000.
(ii) His share in profit/loss on revaluation of assets and re-assessment of liabilities which were as follows:
Land and Buildings were revalued at Rs 94,000, Machinery at Rs 38,000 and Stock at Rs 5,000. A provision of 2.5% was to be created on debtors for bad and doubtful debts.
(iii) The net amount payable to 'E's executors was transferred to his Loan Account, to be paid later on.
Prepare Revaluation Account, Partner's Capital Accounts, E's Executor A/c and Balance Sheet of 'G' and 'F' who decided to continue the business keeping their capital balances in their new profit sharing ratio. Any surplus or deficit to be transferred to current accounts of the partners.
Revaluation a/c
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Particulars |
Amount (Rs) |
Particulars |
Amount (Rs) |
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Machinery Stock Provision for doubtful debt Profit transferred to: G’s capital 20,790 E’s capital 5,940 F’s capital 2,970 |
2,000 2,000 300
29700 |
Land and building |
34,000 |
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|
34,000 |
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34000 |
Partner’s Capital a/c
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Particulars |
G |
E |
F |
Particulars |
G |
E |
F |
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Goodwill E’s executors
Balance c/d |
28,000
76,790
|
8,000
28,340 |
4,000
10,970 |
Balance b/d General reserve P & L Suspense a/c Revaluation |
70,000 14,000
20790 |
20,000 40,000
6400
5940 |
10,000 2,000
2970 |
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1,04,790 |
36,340 |
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1,04,790 |
36,340 |
14970 |
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Balance c/d (adjusted) |
76,790 |
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10,970 |
Balance b/d |
76,790 |
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10,970 |
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76,790 |
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10,970 |
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76,790 |
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10,970 |
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Balance sheet after
E’s death as on Aug 24/2011
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Liabilities |
Amount(Rs) |
Assets |
Amount (Rs) |
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Capital G’S capital 76,790 F’s capital 10,970
E’s executors loan Creditors |
87,756
58,340 14,000
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Land and building Machinery(40000-2000) Stock (7000-2000) Debtors 12000 Less provision for doubtful debts 300 Cash Profit and loss suspense
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94,000 38000 5000
11700 5000 6400
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1,60,100
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1,60,100
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E’s executor’s a/c
Dr Cr
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Particulars |
Amount( Rs) |
Particulars |
Amount (Rs) |
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Balance c/d |
58,340 |
E’s capital a/c E’s Loan a/c |
28,340 30,000 |
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|
58,340 |
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58,340 |
Working Note:
Capital after adjustment
G 76790
F 10970
Combined capital(G+F)= 87760
Adjusted capital:
G=87760*7/8=76790
F=87760*1/8= 10970
Pass necessary Journal Entries for the following transactions in the books of Sudarshan Ltd:
(i) Redeemed 750, 12% Debentures of Rs 75 each by converting into Equity Shares of Rs 100 each. The Equity Shares were issued at a discount of 10%.
(ii) Converted 550, 12% Debentures of Rs 1,000 each into New 13% Debentures of Rs 100 each. The New Debentures were issued at a premium of 10%.
Shyam Ltd. invited applications for issuing 80,000 Equity Shares of Rs 10 each at a premium of Rs 40 per share. The amount was payable as follows:
On Application Rs 35 per share (including Rs 30 Premium)
On Allotment Rs 8 per share (including Rs 4 Premium)
On First and Final Call - Balance
Applications for 77,000 shares were received. Shares were allotted to all the applicants. Sundaram to whom 7,000 shares were allotted failed to pay the allotment money. His shares were forfeited immediately after allotment. Afterwards, the first and final call was made. Satyam the holder of 500 shares failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares 1,000 shares were re-issued at Rs 50 per share fully paid up. The re-issued shares included all the shares of Satyam.
Pass necessary Journal Entries for the above transactions in the books of Shyam Ltd.
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