Short Answer TypeName the financial statement prepared by a Not-For-Profit Organisation on accrual basis.
State the provisions of Indian Partnership Act regarding the payment of remuneration to a partner for the services rendered.
From the following information, calculate the amount of income from subscriptions to be shown in the Income and Expenditure Account for the year ended 31-3-2011:
|
Subscriptions received during the year 2010-2011 |
Rs |
3,40,000 |
|
Subscriptions outstanding as on 31-3-2011 |
Rs |
47,000 |
|
Subscriptions received in advance as on 31-3-2011 |
Rs |
35,000 |
|
Subscriptions outstanding as on 1-4-2010 |
Rs |
28,000 |
|
Subscriptions received in advance as on 1-4-2010 |
Rs |
25,000 |
Arun and Arora were partners in a firm sharing profits in the ratio of 5:3. Their fixed capitals on 1-4-2010 were: Arun Rs 60,000 and Arora Rs 80,000. They agreed to allow interest on capital @ 12% p.a. And to charge on drawings @ 15% p.a. The profit of the firm for the year ended 31-3 2011 before all above adjustments were Rs 12,600. The drawings made by Arun were Rs 2,000 and by Arora Rs 4,000 during the year. Prepare Profit and Loss Appropriation Account of Arun and Arora. Show your calculations clearly. The interest on capital will be allowed even if the firm incurs loss.
Arjun, Bhim and Nakul are partners sharing profits & losses in the ratio of 14:5:6 respectively.
Bhim retires and surrenders his 5/25th share in favour of Arjun. The goodwill of the firm is valued at 2 years purchase of super profits based on average profits of last 3 years. The profits for the last 3 years are Rs 50,000, Rs 55,000 & Rs 60,000 respectively. The normal profits for the similar firm are Rs 30,000. Goodwill already appears in the books of the firm at Rs 75,000.
The profit for the first year after Bhim's retirement was Rs 1,00,000. Give the necessary Journal Entries to adjust Goodwill and distribute profits showing your workings.
Journal Entries
|
Date |
Particulars |
LF |
Debit ( Rs) |
Credit (Rs) |
|
|
Arjun’s capital a/c Dr Bhim’s capital a/c Dr Nakul’s capital a/c Dr To Goodwill a/c (being decrease in the value of goodwill adjusted to the partners capital in their old profit sharing ratio) |
|
14,000 5,000 6,000
1,00,000 |
25,000
76,000 24,000
|
|
Profit and loss appropriation a/c Dr To Arjun’s capital a/c To Nakul’s capital a/c (Being new profit shared between remaining partners in their new profit sharing ratio)
|
Old profit sharing ratio =14:5:6
Computation of Goodwill:
Average profit =(50000+55000+60000)/3=55000/-
Normal profit = 30000
Super profit =25000
Good will = super profit *2 years purchase= 25000*2=50000/-
Good will already in the book= 75000
Difference in present and book value of goodwill to be adjusted=75000-50000=25000
Good will to be debited in old profit sharing ratio 14:5:6
Arjun 25000*14/25=14000
Bhim 25000* 5/25=5000
Nakul 25000*6/25=6000
Computation of new profit sharing ratio:
Arjun’s new share =14/25+5/25 =19/25
Nakuls new share= 6/25
New profit sharing ratio= 19:6
Appropriation of new profit
Arjun: (100000*19)/25=76,000
Nakul: (100000*6)/25=24,000
Give any one advantage for the redemption of debentures by purchase in the open market?
Jain Ltd. purchased Building for Rs 10,00,000 from Gupta Ltd. 10% of the payable amount was paid by a cheque drawn in favour of Gupta Ltd. The balance was paid by issue of Equity Shares of Rs 10 each at a discount of 10%.
Pass necessary Journal Entries in the books of Jain Ltd.
Narain Laxmi Ltd. invited applications for issuing 7500, 12% Debentures of Rs100 each at a premium of Rs 35 per Debenture. The full amount was payable on application.
Applications were received for 10,000 Debentures. Applications for 2500 Debentures were rejected and the application money was refunded. Debentures were allotted to the remaining applicants.
Pass necessary Journal Entries for the above transactions in the books of Narain Laxmi Ltd.
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