1 P.T.O. Series : SMA/1 Roll No. Code No. 67/1/1 Candidates must write the Code on the title page of the answer-book. Code number given on the right hand side of the question paper should be written on the title page of the answer-book by the candidate. Please check that this question paper contains 23 questions. Please write down the Serial Number of the questions before attempting it. 15 minutes time has been allotted to read this question paper. The question paper will be distributed at 10.15 a.m. From 10.15 a.m. to 10.30 a.m., the student will read the question paper only and will not write any answer on the answer script during this period. ACCOUNTANCY [Time allowed : 3 hours] [Maximum marks : 80] General Instructuions: ( i ) This question paper contains three parts A, B and C. ( ii ) Part A is compulsory for all candidates. ( iii ) Candidates can attempt only one part of the remaining parts B and C. (iv) All parts of the questions should be attempted at one place. Studymate Solutions to CBSE Board Examination 2010-2011
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1 P.T.O.
Series : SMA/1
Roll No.
Code No. 67/1/1Candidates must write the Code onthe title page of the answer-book.
Code number given on the right hand side of the question paper should be written on the title page ofthe answer-book by the candidate.
Please check that this question paper contains 23 questions.
Please write down the Serial Number of the questions before attempting it.
15 minutes time has been allotted to read this question paper. The question paper will be distributed at10.15 a.m. From 10.15 a.m. to 10.30 a.m., the student will read the question paper only and will notwrite any answer on the answer script during this period.
ACCOUNTANCY
[Time allowed : 3 hours] [Maximum marks : 80]
General Instructuions:
(i) This question paper contains three parts A, B and C.
(ii) Part A is compulsory for all candidates.
(iii) Candidates can attempt only one part of the remaining parts B and C.
(iv) All parts of the questions should be attempted at one place.
Studymate Solutions to CBSE Board Examination 2010-2011
STUDYmate Accountancy Class XII
2 P.T.O.
PART-A(Accounting for Not for Profit Organisations, Partnership Firms and Companies)
1. Name the financial statement prepared by a Not-For-Profit Organisation on accrual basis. [1]
Ans. Income and Expenditure A/c
2. State the provisions of Indian Partnership Act regarding the payment of remuneration to a partner for the services rendered. [1]
Ans. If deed is present, as per the deed.If deed is absent, no remuneration to any partner.
3. For which share of Goodwill a partner is entitled at the time of his retirement? [1]Ans. The retiring partner is entitled to his share of goodwill valued at the time of retirement.
4. State any two occasions on which a firm can be reconstituted. [1]Ans. Any two of the following:
(a) Change in profit sharing ratio among existing partners.(b) Admission of a partner(c) Retirement of a partner(d) Death of a partner
5. Give any one advantage for the redemption of debentures by purchase in the open market? [1]
Ans. Any one of the following:(a) Reduction in Principal liability.(b) Reduction in interest burden.(c) Saving equal to amount of discount.(d) Saving equal to premium payable on redemption.
6. 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: [3]
Subscriptions received during the year 2010-2011 ` 3,40,000Subscriptions outstanding as on 31-3-2011 ` 47,000Subscriptions received in advance as on 31-3-2011 ` 35,000Subscriptions outstanding as on 1-4-2010 ` 28,000Subscriptions received in advance as on 1-4-2010 ` 25,000
Ans. Statement showing Calculation of Subscription for the year 2010-11.Particulars `
Subscription received during the year
Less: Subscription outstanding as on 1-4-2010
Add: Subscription outstanding as on 31-3-2011
Less: Subscription in advance as on 31-3-2011
Add: Subscription in advance as on 1-4-2010
Subscription for the year 2010-11
3,40,000
(28,000)
47,000
(35,000)
25,000
3,49,000
STUDYmate Accountancy Class XII
3 P.T.O.
Income & Expenditure A/c (Extract)For the year ended 31-3-2011
Expenditures ` Incomes `
By Subscription 3,49,000
7. Jain Ltd. purchased Building for ` 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 ` 10 each at a discount of 10%. [3]
Ans. In the books of Jain Ltd.
Journal
Date Particulars LF Debit (`) Credit (`)
Building A/c Dr.
To Gupta Ltd. A/c
(Being Building Purchased from Gupta Ltd.)
10,00,000
10,00,000
Gupta Ltd. A/c Dr.
To Bank A/c
(Being 10% payment made by cheque)
1,00,000
1,00,000
Gupta Ltd. A/c Dr.
Discount on issue of shares A/c Dr.
To Equity shares A/c
(Being 1,00,000 shares issued at a
discount of 10%)
9,00,000
1,00,000
10,00,000
Working Notes:
Calculation of Number of Equity shares:
9,00,00010 1
= 1,00,000 shares
8. Narain Laxmi Ltd. invited applications for issuing 7,500, 12% Debentures of ` 100
each at a premium of ` 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. [3]
STUDYmate Accountancy Class XII
4 P.T.O.
Ans. In the books of Narain Laxmi Ltd.Journal
Date Particulars LF Debit (`) Credit (`)Bank A/c Dr.
To Debenture Application A/c(Being application amount received on 10,000 debentures with Securities Premium)
13. Verma and Sharma were partners sharing profits in the ration of 3 : 1. On 31-3-2011
their Balance Sheet was as follows:
Balance Sheet of Verma and Sharma as on 31-3-2011Liabilities ` Assets `
Capitals:
Verma 1,20,000
Sharma 80,000
Creditors
2,00,000
70,000
Land and Building
Machinery
Debtors
Bank
70,000
60,000
80,000
60,000
2,70,000 2,70,000
The firm was dissolved on 1-4-2011 and the Assets and Liabilities were settled as
follows:
(i) Creditors of ` 50,000 took over Land and Building in full settlement of their
claim.(ii) Remaining Creditors were paid in cash.
(iii) Machinery was sold at a depreciation of 30%.
(iv) Debtors were collected at a cost of ` 500.
(v) Expenses of realization were ` 1,700.
Pass necessary Journal Entries for dissolution of the firm. [6]Ans. In the books of Verma and Sharma
JournalDate Particulars LF Debit (`) Credit (`)
(i) Realisation A/c Dr.
To Land & Building A/c
To Machinery A/c
To Debtors A/c
2,10,000
70,000
60,000
80,000
STUDYmate Accountancy Class XII
8 P.T.O.
(Being Assets transferred to Realisation
A/c)
(ii) Creditors A/c Dr.
To Realisation A/c
(Being Creditors transferred to Realisation
A/c)
70,000
70,000
(iii) No entry for Land and Building taken over
creditors.
(iv) Realisation A/c Dr.
To Bank A/c
(Being payment of creditors)
20,000
20,000
(v) Bank A/c Dr.
To Realisation A/c
(Being machine sold at depreciation of 30%)
42,000
42,000
(vi) Bank A/c Dr.
To Realisation A/c
(Being debtors collected at a cost of 500,
i.e., 80,000 – 500)
79,500
79,500
(vii) Realisation A/c Dr.
To Bank A/c
(Being payment of realisation expenses)
1,700
1,700
(viii) Verma’s Capital A/c Dr.
Sharma’s Capital A/c Dr.
To Realisation A/c
(Being distribution of loss on realisation)
30,150
10,050
40,200
(ix) Verma’s Capital A/c Dr.
To Bank A/c
(Being Verma’s Capital A/c settled)
89,850
89,850
(x) Sharma’s Capital A/c Dr.
To Bank A/c
(Being Sharma’s capital A/c settled)
69,950
69,950
Working Note:Partners Capital A/c’s
Dr. Cr.
Particular Verma Sharma Particular Verma Sharma
To Realisation A/c
To Bank
30,150
89,850
10,050
69,950
By bal. b/d 1,20,000 80,000
1,20,000 80,000 1,20,000 80,000
STUDYmate Accountancy Class XII
9 P.T.O.
14. From the following ‘Receipt and Payment’ of ‘Green Delhi Club’ for the year ended 31-3-2011. Prepare ‘Income and Expenditure Account’.
Receipts and Payments Account of‘Green Delhi Club’ for the year ended 31-3-2011Receipts ` Payments `
To Balance b/d
To SubscriptionsTo Entrance Free
To Donations (includes ` 1,000
for buildings)
To Hall rent
To Sale of investments (Book
value ` 4,000)
13,200
25,5002,000
3,000
2,500
3,500
By Salary (paid for 11
months)By Rent
By Electricity
By Taxes
By Printing & stationary
To Books
By 9% Fixed deposits (on
31-1-2011)
By Balance c/d
2,200800
3,500
2,600
800
10,000
13,000
16,800
49,700 49,700
Ans. Income and Expenditure A/cFor the Year ending 31st March 2011
Dr. Cr.Expenditure Amount
(`)Incomes Amount
(`)
To Salary 2,200
(+) O/s salary 200
To Rent
To Electricity
To Taxes
To Printing & Stationery
To Loss on sale of Investments
To Surplus
2,400
800
3,500
2,600
800
500
21,595
By Subscriptions
By Entrance Fees
By Donations
By Hall Rent
By Accrued Interest on
investment
25,500
2,000
2,000
2,500
195
32,195 32,195
15. ‘B’ and ‘C’ were partners sharing profits in the ratio of 3 : 2. Their Balance Sheet as on 31-3-2011 was as follows:
Balance Sheet of Band C as on 31-3-2011Liabilities Amount Assets Amount
Capitals:‘B’ 60,000‘C’ 40,000
Provision for bad debtsCreditors
1,00,0001,000
60,000
Land and BuildingMachineryFurnitureDebtorsCashProfit and Loss Account
80,00020,00010,00025,00016,00010,000
1,61,000 1,61,000
STUDYmate Accountancy Class XII
10 P.T.O.
‘D’ was admitted to the partnership for l/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 ` 30,000 as his capital and ` 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, ` 500 included in Sundry Creditors was not likely to be paid; (vi) A provision of ` 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’s 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.
OR‘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:
Balance Sheet of ‘G’, ‘E’ and ‘F’ as on 31st March, 2011
LiabilitiesAmount
`Assets
Amount`
Capitals: ‘G’ 70,000‘E’ 20,000‘F’ 10,000
General ReserveLoan from ‘E’Creditors
1,00,000 20,000 30,000 14,000
Goodwill Land & Buildings Machinery Stock DebtorsCash
40,00060,000 40,000 7,000
12,0005,000
1,64,000 1,64,000
‘E’ died on 24th August 2011. Partnership deed provides for the settlement of claims on the death of a partner in addition to his capital as under: (i) The share of profit of deceased partner to be computed upto the date of death
on the basis of average profits of the past three years which was ` 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 ` 94,000, Machinery at ` 38,000 and Stock at ` 5,000. A provision of 2½ % was to be created on debtors for bad and
(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.
STUDYmate Accountancy Class XII
11 P.T.O.
Ans. Revaluation A/cDr. Cr.
Particular Amount(`)
Particular Amount(`)
To Provision for Bad Debts
To Claim for damages
250
800
By Creditors
By Loss on Revaluation
B 330C 220
500
550
1,050 1,050
Partners Capital A/c’sDr. Cr.
Particular B C D Particular B C DTo P & L A/cTo Revaluation A/cTo Cash A/cTo Cash A/cTo Bal. c/d
To E’s Executors Loan A/c 58,340 By E’s Capital A/c 58,340
58,340 58,340
Balance sheet of G & Fas on 24th August, 2011
LiabilitiesAmount
(`)Assets
Amount(`)
Capital A/c’s
G 1,27,837.50
F 18,262.50
Creditors
E’s Executors Loan A/c
146,100
14,000
58,340
Land & Buildings
Machinery
Stock
Debtors 12,000
(–) Prov. 300
Cash
P & L Suspense A/cG’s Current A/c
F’s Current A/c
94,000
38,000
5,000
11,700
5,000
6,40051,047.50
7,292.50
2,18,440 2,18,440
STUDYmate Accountancy Class XII
13 P.T.O.
16. Shyam Ltd invited applications for issuing 80,000 Equity Shares of ` 10 each at a premium of ` 40 per share. The amount was payable as follows:
On Application ` 35 per share (including ` 30 Premium)On Allotment ` 8 per share (including ` 4 Premium)On First and Final Call – Balance
Applications for 77,000 shares were received. Shares were allotted to all the applicants. Sundram 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. Sat yam 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 ` 50 per share fully paid up. The re-issued shares included all the shares of Satyam.
ORJain Ltd. invited applications for issuing 35,000 Equity Shares of ` 10 each at a discount of 10%. The amount was payable as follows:
On Application ` 5 per share.On Allotment ` 3 per share.On First and Final Call – Balance.
Applications’ for 50,000 shares were received. Applications for 8,000 shares were rejected and the application money of these applicants was refunded. Shares were allotted on pro-rata basis to the remaining applicants and the excess money received with applications from these applicants was adjusted towards sums due on allotment. Jeevan who had applied for 600 share’s failed to pay allotment and first and final call money. Naveen the holder of 400 shares failed to pay first and final call money. Shares of Jeevan and Naveen were forfeited. Of the forfeited 800 shares were, re-issued at ` 15 per share fully paid up. The re-issued shares included all the sharesof Naveen.
Ans. In the Books of Shyam Ltd.Journal
Date Particulars LF Debit CreditBank A/c Dr.
To Share Application A/c(For share application money received)
26,95,00026,95,000
Share Application A/c Dr.To Share Capital A/cTo Securities Premium A/c
(For Application money adjusted)
26,95,0003,85,000
23,10,000
Share Allotment A/c Dr.To Share Capital A/cTo Securities Premium A/c
(For allotment money made due)
6,16,0003,08,0003,08,000
Bank A/c Dr.To Share Allotment A/c
(For allotment money received)
5,60,0005,60,000
Share Capital A/c Dr.Securities Premium A/c Dr.
To Share Allotment A/cTo Share Forfeiture A/c
(Being 7000 shares forfeited)
63,00028,000
56,00035,000
STUDYmate Accountancy Class XII
14 P.T.O.
Share First & Final Call A/c Dr.To Share Capital A/cTo Securities Premium A/c
(For first & final call made due)
4,90,00070,000
4,20,000
Bank A/c Dr.To Share First & Final Call A/c
(For first & final call money received)
4,86,5004,86,500
Share Capital A/c Dr.Securities Premium A/c Dr.
To Share First & Final Call A/cTo Share Forfeiture A/c
(For 500 shares forfeited)
5,0003,000
3,5004,500
Bank A/c Dr.To Share Capital A/cTo Securities Premium A/c
(For 1000 Shares re-issued)
50,00010,00040,000
Share Forfeiture A/c Dr.To Capital Reserve A/c
(For amount of share forfeiture transferred to capital reserve)
7,0007,000
OR
Ans. In the Books of Jain’s Ltd.Journal
Date Particulars LF Debit CreditBank A/c Dr.
To Share Application A/c(For share application money received)
2,50,0002,50,000
Share Application A/c Dr.To Share Capital A/cTo Share Allotment A/cTo Bank A/c
(For Application money adjusted)
2,50,0001,75,000
35,00040,000
Share Allotment A/c Dr.Discount on issue of Shares A/c
To Share Capital A/c(For allotment money made due)
1,05,00035,000
1,40,000
Bank A/c Dr.To Share Allotment A/c
(For allotment money received)
69,00069,000
Share First & Final Call A/c Dr.To Share Capital A/c
(For first & final call made due)
35,00035,000
Bank A/c Dr. 34,100
STUDYmate Accountancy Class XII
15 P.T.O.
To Share First & Final Call A/c(For first & final call money received)
34,100
Share Capital A/c Dr.To Discount on issue of Share A/cTo Share Allotment A/cTo Share First & Final Call A/cTo Share Forfeiture A/c
(Being 900 shares forfeited)
9,000900
1,000900
6,200
Bank A/c Dr.To Share Capital A/cTo Securities Premium A/c
(For 800 Shares reissued)
12,0008,0004,000
Share Forfeiture A/c Dr.To Capital Reserve A/c
(For amount of share forfeiture transferred to capital reserve)
5,6005,600
Part B(Financial Statements Analysis)
17. State the significance of Analysis of Financial Statements to the ‘Lenders’.
Ans. To know the long term solvency of the enterprise.
18. State the purpose of preparing a ‘Cash Flow Statement’.
Ans. To ascertain the specific inflows/outflows (i.e. operating, investing or financing
activities) from which cash and cash equivalents are generated or used by the
enterprise.
19. While preparing Cash Flow Statement what type of activity is, ‘Payment of cash to
acquire Debentures by an Investment company’?
Ans. Operating activities.
20. 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 ` 1,50,000, calculate
Current Assets and Current Liabilities.
Ans. Current ratio = 3.5 : 1
STUDYmate Accountancy Class XII
16 P.T.O.
Current Assets 3.5
Current Liabilities 1
Current Assets = 3.5 Current Liabilities …(i)
Quick Ratio = 2 :1
Quick Assets 2
Current Liabilities 1
Quick Assets = 2 Current Liabilities.
Current Assets – Stock = 2 Current Liabilities
[ Quick Assets=Current Assets- stock]
From equation (i) , we get
3.5 Current Liabilities – 1,50,000 = 2 Current Liabilities
= 3.5 Current Liabilities – 2 Current Liabilities = 1,50,000
= 1.5 Current Liabilities = 1,50,000
Current Liabilities = 1,50,000
1.5= ` 1,00,000
Current Assets = 3.5 Current Liabilities
= 3.5 × 1,00,000
= ` 3,50,000
21. From the following information, calculate any two of the following ratios :
(a) Debt-Equity Ratio
(b) Working Capital Turnover Ratio and
(d) Return on Investment
Information : Equity Share Capital ` 50,000, General Reserve ` 5,000; Profit and Loss
Account after tax and interest ` 15,000; 9% Debentures ` 20,000; Creditors ` 15,000;
Land and Building ` 65,000; Equipments ` 15,000; Debtors ` 14,500 and Cash
` 5,500. Discount on issue of shares ` 5,000.
Sales for the year ended 31-3-2011 was ` 1,50,000. Tax rate 50%.
Ans. (a) Debt – Equity Ratio = Debt
Equity
=9% Debentures
Equity Share Capital General Reserve P & L Account Discount on issue of Shares
STUDYmate Accountancy Class XII
17 P.T.O.
20,000
50,000 5,000 15,000 5,000
20,000
65,000
0.38 : 1 times
(b) Working capital turnover ratio = Net Sales
Net Working Capital
1,50,000
14,500 5,500 15,000
1,50,000
5,000
30 times
(c) Return on investment = Net Profit before Interest, Tax and Dividend
100Capital Employed
15,000 15,000 (tax) 1,800(Interest)
50,000 5,000 15,000 20,000 5,000
31,800
10085,000
37.41 %
22. Following is the Income Statement of Raj Ltd. for the year ended 31-3-2011 :
Particulars Amount `
Income :SalesOther IncomesTotal Income
Expenses :Cost of goods soldOpening expensesTotal ExpensesTax
2,00,00015,000
2,15,000
1,10,0005,000
1,15,00040,000
Prepare a common size Income Statement of Raj Ltd. for the year ended 31-3-2011.
STUDYmate Accountancy Class XII
18 P.T.O.
Ans. Common Size Income Statement
for the year ended 31-3-2011.
Particulars Year end31-3-2011
Percentage change
Net Sales
Less Cost of Goods Sold
20,0000
1,10,000
100%
(55%)
Gross Profit
Less Operating Expenses
Add Other Incomes
90,000
5,000
15,000
45%
(2.5%)
7.5%
Net Profit Before Tax
Less Tax
1,00,000
40,000
50%
(20%)
Profit After Tax 60,000 30%
23. From the following Balance Sheets of Sonam Ltd as on 31-03-2010 and 31-3-2011,
prepare a Cash Flow Statement:
Liabilities 31-3-2010(`)
31-3-2011(`)
Assets31-3-2010
(`)31-3-2011
(`)Equity Share CapitalProfit & Loss AccountBank LoanProposed DividedProvision for taxCreditors
1,00,000
25,00050,00020,00010,000
15,000
1,50,000
50,00025,00015,00017,500
11,250
PatentsBuildingInvestmentDebtorsStockCash
12,5001,50,000
—50,0002,5005,000
11,2501,50,000
18,75063,7503,750
21,250
2,20,000 2,68,750 2,20,000 2,68,750
Additional Information :
During the year a Building having book value ` 50,000 was sold at a loss of ` 2,000
and depreciation charged on Building was ` 4,000
Ans. Cash Flow Statement
for the year ended 31-3-2011
A. Cash Flow from operating activities
Net profit as per P & L A/c
(+) Proposed dividend
(+) Provision for tax
25,000
15,000
17,500
Net Profit before extra-ordinary items
(+) Non-operating/Non-cash items
Patents
57,500
1,250
STUDYmate Accountancy Class XII
19 P.T.O.
Depreciation
Loss on sale of Buildings
4,000
2,000
(–) Non-operating incomes
64,750
NIL
Operating profits before changes in working capital
(+) Decrease in CA/Increase in CL
64,750
NIL
(–) Increase in CA/Decrease in CL
Debtors
Stock
Creditors
(13,750)
(1,250)
(3,750)
(–) Tax paid during the year
46,000
10,000
Cash flow from operating activities 36,000
B. Cash Flow from investing activities
Purchase of Building
Sale of building
Purchase of Investments
(54,000)
48,000
(18,750)
Cash used in investing activities (24,750)
C. Cash Flow from financing activities
Issue of shares
Repayment of Bank Loan
Proposed dividend
Cash flow from financing activities
50,000
(25,000)
(20,000)
5,000
Increase in cash and cash equipments
(+) Opening balance of cash and cash equivalents
16,250
5,000
Closing balance of cash and cash equivalents 21,250
12. Pass necessary Journal Entries for the following transactions in the books of N.R. Ltd.:(i) Redeemed 1,200, 9% Debentures of ` 175 each by converting into New 10%
Debentures of ` 100 each issued at a premium of 5%.(ii) Redeemed 19,000, 6% Debentures of ` 50 each by converting them into Equity
shares of ` 100 each. The Equity Shares were issued at a discount of 5%. [6]Ans. In the books of Sudarshan Ltd.
JournalDate Particulars LF Debit (`) Credit (`)
A. (i) 12% Debentures A/c Dr.
To Debenture-holders A/c
(Being 1,200 debentures of ` 175 each
redeemed and payment made due to
debenture-holders)
2,10,000
2,10,000
(ii) Debenture-holder’s A/c Dr.
To 10% Debentures A/c
To Securities Premium A/c
(Being 2,000 10% debentures issued at a
premium of 10%)
2,10,000
2,00,000
10,000
B. (i) 6% Debentures A/c Dr.
To Debenture-holder’s A/c
(Being 19,000 debentures of ` 50 each
redeemed and payment made due to
debenture-holders)
9,50,000
9,50,000
(ii) Debenture-holders A/c Dr.Discount on issue of shares A/c Dr.
To Equity share capital A/c
(Being 10,000 equity shares issued at a
discount of 10%)
9,50,00050,000
10,00,000
Working Notes:
(i)2,10,000100 5
= 2,000 10% debentures
(ii)9,50,000100 5
= 10,000 shares
STUDYmate Accountancy Class XII
26 P.T.O.
13. A and B were partners in a firm sharing profits in the ration of 3 : 2. On 31-3-2011
their Balance Sheet of the firm was as follows:
Balance Sheet of A and B as on 31-3-2011Liabilities ` Assets `
Capitals:
A 3,00,000
B 2,00,000
Sundry Creditors
5,00,000
1,17,000
Building
Furniture
Debtors
Stock
Cash
2,40,000
1,75,000
80,000
75,000
47,000
6,17,000 6,17,000
The firm was dissolved on 1-4-2011 and the Assets and Liabilities were settled as
follows:
(i) Building was taken over by the creditors as their full and final payment.
(ii) Furniture was taken over by B for cash payment at 5% less than the book value.
(iii) Debtors were collected by a debt collection agency at a cost of ` 5,000.
(iv) Stock realized ` 70,500.
(v) ‘B’ agreed to bear all realization expenses. For this service B is paid ` 500.
Actual expenses on realization amounted to ` 1,000.
Pass necessary Journal Entries for dissolution of the firm. [6]Ans. In the books of A and B
JournalDate Particulars LF Debit (`) Credit (`)
(i) Realisation A/c Dr.To Building A/c
To Furniture A/c
To Debtors A/c
To Stock A/c
(Being Assets transferred to Realisation
A/c)
5,70,0002,40,000
1,75,000
80,000
75,000
(ii) Creditors A/c Dr.To Realisation A/c
(Being Creditors transferred to Realisation
A/c)
1,17,0001,17,000
(iii) No entry for Building taken over creditors.
(iv) Bank A/c Dr.
To Realisation A/c(Being furniture sold at discount of 5%)
1,66,200
1,66,200
(v) Bank A/c Dr.
To Realisation A/c
(Being debtors collected at a cost of 5,000,
i.e., 80,000 – 5000)
75,000
75,000
STUDYmate Accountancy Class XII
27 P.T.O.
(vi) Bank A/c Dr.
To Realisation A/c
(Being stock realised)
70,500
70,500
(vii) Realisation A/c Dr.
To B’s Capital A/c
(Being amount paid to B for realisation
purpose)
500
500
(viii) A’s Capital A/c Dr.
B’s Capital A/c Dr.
To Realisation A/c
(Being distribution of loss on realisation)
1,75,080
1,16,720
2,91,800
(ix) A’s Capital A/c Dr.
To Bank A/c
(Being A’s Capital A/c settled)
1,24,920
1,24,920
(x) B’s Capital A/c Dr.
To Bank A/c
(Being B’s capital A/c settled)
83,780
83,780
Working Note:1. Partners Capital A/c’sDr. Cr.
Particular A B Particular A B
To Realisation A/c
To Bank
1,75,080
1,24,920
1,16,720
83,780
By bal. b/d
By Realisation A/c
3,00,000 2,00,000
500
3,00,000 2,00,500 3,00,000 2,00,5002. It is assumed that actual expenses of realization are paid by B himself.
14. From the following ‘Receipt and Payment’ of ‘New Club’ for the year ended 31-3-2011. Prepare ‘Income and Expenditure Account’.
Receipts and Payments Account of‘New Club’ for the year ended 31-3-2011
Receipts ` Payments `
To Balance b/d
To Subscriptions
To Entrance Free
To Donations (includes ` 1,000
for buildings)To Hall rent
To Sale of investments (Book
value ` 16,000)
3,400
21,000
5,750
2,1007,550
15,400
By Salary (paid for 8
months)
By Rent
By Electricity
By HonorariumBy Books
By 9% Fixed deposits (on
31-1-2010)
By Balance c/d
24,000
3,000
2,750
5,0007,500
10,000
2,9500
55,200 55,200
STUDYmate Accountancy Class XII
28 P.T.O.
Ans. Income and Expenditure A/cFor the Year ending 31st March 2011
Dr. Cr.Expenditure Amount
(`)Incomes Amount
(`)To Salary 24,000
(+) O/s salary 12,000To Rent
To Electricity
To Honorarium
To Loss on sale of Investments
36,0003,000
2,750
5,000
600
By Subscriptions
By Entrance FeesBy Donations
By Hall Rent
By Accrued Interest on
investment
By Deficit
21,000
5,7501,100
7,550
675
11,275
47,350 47,350
Part B(Financial Statements Analysis)
23. From the following Balance Sheets of C.P. Ltd as on 31-03-2010 and 31-3-2011,
prepare a Cash Flow Statement:
Liabilities 31-3-2010(`)
31-3-2011(`)
Assets31-3-2010
(`)31-3-2011
(`)Share CapitalProfit & Loss AccountBank LoanProposed DividedProvision for taxCreditors
3,00,000
75,0001,50,000
60,00030,00045,000
4,50,000
1,50,00075,000
45,00052,50033,750
PatentsBuildingInvestmentDebtorsStockCash
37,5004,50,000
—1,50,00
7,50015,000
31,2504,50,000
56,2501,91,250
11,25066,250
6,60,000 8,06,250 6,60,000 8,06,250
Additional Information :
During the year a Building having book value ` 1,50,000 was sold at a loss of ` 6,000
and depreciation charged on Building was ` 16,000
STUDYmate Accountancy Class XII
29 P.T.O.
Ans. Cash Flow Statement
for the year ended 31-3-2011
A. Cash Flow from operating activitiesNet profit as per P & L A/c(+) Proposed dividend(+) Provision for tax
75,00045,00052,500
Net Profit before extra-ordinary items(+) Non-operating/Non-cash items
PatentsDepreciationLoss on sale of Buildings
1,72,500
6,25016,0006,000
(–) Non-operating incomes2,00,750
NILOperating profits before changes in working capital(+) Decrease in CA/Increase in CL
2,00,750NIL
(–) Increase in CA/Decrease in CLDebtorsStockCreditors
(41,250)(3,750)
(11,250)
(–) Tax paid during the yearCash flow from operating activities
1,44,50030,000
1,14,500B. Cash Flow from investing activities
Purchase of BuildingSale of buildingPurchase of Investments
Cash used in investing activities
(1,66,000)1,44,000(56,250)
(78,250)C. Cash Flow from financing activities
Issue of sharesRepayment of Bank LoanProposed dividend
Cash flow from financing activities
1,50,000(75,000)(60,000)
15,000Increase in cash and cash equipments(+) Opening balance of cash and cash equivalents
51,25015,000
Closing balance of cash and cash equivalents 66,250Building A/c