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  • Question 1

    For which share of Goodwill a partner is entitled at the time of his retirement?

     

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  • Question 2

    Name the financial statement prepared by a Not-For-Profit Organisation on accrual basis.

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  • Question 3

    Give any one advantage for the redemption of debentures by purchase in the open market?

     

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  • Question 4

    State the provisions of Indian Partnership Act regarding the payment of remuneration to a partner for the services rendered.  

     

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  • Question 5

    State any two occasions on which a firm can be reconstituted.

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  • Question 6

    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.

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  • Question 7

    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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  • Question 8

    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

     

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  • Question 9

    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.

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  • Question 10

    Shakti Ltd. decided to redeem its 750, 12% Debentures of Rs 100 each. The company purchased 500 Debentures at Rs 94 per Debenture from the open market. The remaining debentures were redeemed out of profits. The company had already made a provision for Debenture Redemption Reserve in its books.

     

    Pass necessary Journal Entries in the books of the company for the above transactions.

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  • Question 11

    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.

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  • Question 12

    Pass necessary Journal Entries for the following transactions in the books of N.R. Ltd.

     

    (i) Redeemed 1,200, 9% Debentures of Rs 175 each by converting into New 10% Debenture of

    Rs 100 each issued at a premium of5%.

     

    (ii) Redeemed 19,000, 6% Debentures of Rs 50 each by converting them into Equity shares of Rs 100 each. The Equity shares were issued at a discount of 5%.

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  • Question 13

    A and B were partners sharing profits in the ratio of 3 : 2. On 31-3-2011 their Balance Sheet of the firm was as follows:

    Balance Sheet of A and B

    as on 31-3-2011

    Liabilities

    Amount

    Rs

    Assets

    Amount

    Rs

    Capitals:

     

    Building

    2,40,000

    A

    3,00,000

     

    Furniture

    1,75,000

    B

    2,00,000

    5,00,000

    Debtors

    80,000

    Sundry Creditors

    1,17,000

    Stock

    75,000

     

     

    Cash

    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 & 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 Rs 5,000

    (iv) Stock realized Rs 70,500

    (v) ‘B’ agreed to bear all realisation expenses. For this service B is paid Rs 500. Actual expenses on realization amounted to Rs 1,000

    Pass necessary Journal Entries for dissolution of the firm.

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  • Question 14

    From the following ‘Receipt and Payments Account’ 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

    Dr.

     

    Cr.

    Receipts

    Amount

    Rs

    Payments

    Amount

    Rs

    To Balance b/d

    3,400

    By Salary

    (paid for 8 months)

    24,000

    To Subscriptions

    21,100

    By Rent

    300

    To Entrance Fee

    5,750

    By Electricity

    2,750

    To Donations (includes Rs 1,000 for Buildings)

    2,100

    By Honorarium

    5,000

    To Hall Rent

    7,550

    By Books

    7,500

    To Sale of Investments

    (Book value Rs 16,000)

    15,400

    By 9% Fixed Deposits

    (on 30-6-2010)

    10,000

     

     

    By Balance c/d

    16,800

     

    55,200

     

    55,200

     

     

     

     

    From the above ‘Receipts and Payments Account’ prepare an ‘Income and Expenditure Account’ of ‘New Club’ for the year ended 31-3-2011.

     

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  • Question 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 B and C

    as on 31-3-2011

     

    Liabilities

    Amount

    Rs

    Assets

    Amount

    Rs

    Capital:

     

     

    Land and Building

    80,000

    ‘B’

    60,000

     

    Machinery

    20,000

    ‘C’

    40,000

    1,00,000

    Furniture

    10,000

     

     

     

    Debtors

    25,000

    Provision for bad debts

    1,000

    Cash

    16,000

    Creditors

     

    60,000

    Profit and Loss Account

    10,000

     

     

     

     

     

     

    1,61,000

     

    1,61,000

     

     

     

     

     

    ‘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’s Capital. Actual cash wash 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

    Liabilities

    Amount

    Rs

    Assets

    Amount

    Rs

    Capitals:

     

    Goodwill

    40,000

    ‘G’

    70,000

     

    Land & Buildings

    60,000

    ‘E’

    20,000

     

    Machinery

    40,000

    ‘F’

    10,000

    1,00,000

    Stock

    7,000

    General Reserve

    20,000

    Debtors

    12,000

    Loan from ‘E’

    30,000

    Cash

    5,000

    Creditors

    14,000

     

     

     

    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 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 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.

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  • Question 16

    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. 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. 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.

    OR

    Jain Ltd. Invited applications for issuing 35,000 Equity Shares of Rs 10 each at a discount of 10%. The amount was payable as follows:

    On Application Rs 5 per share.

    On Allotment Rs 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 shares 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 Rs 15 per share fully paid up. The re-issued shares included all the shares of Naveen.

    Pass necessary Journal Entries for the above transactions in the books of Jain Ltd.

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  • Question 17

    State the purpose of preparing a ‘Cash Flow Statement’.

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  • Question 18

    While preparing Cash Flow Statements what type of activity is, ‘Payments of Cash to acquire Debentures by an investment company?

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  • Question 19

    State the significance of Analysis of Financial Statements to the ‘Lenders’.

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  • Question 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 Rs 1,50,000, calculate Current Assets and Current Liabilities.

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  • Question 21

    From the following information, calculate any two of the following ratios:

    (a) Debt-Equity Ratio

    (b) Working Capital Turnover Ratio and

    (c) Return on Investment

     

    Information: Equity Share capital Rs 50,000, General Reserve Rs 5,000; Profit and Loss

    Account after tax and interest Rs 15,000; 9% Debenture Rs 20,000; Creditors Rs 15,000; Land and Building Rs 65,000; Equipments Rs 15,000; Debtors Rs 14,500 and Cash Rs 5,500. Discount on issue of shares Rs 5,000

     

    Sales for the year ended 31-3-2011 was Rs 1,50,000. Tax rate 50%.

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  • Question 22

    Following is the Income statements of Raj Ltd. For the year ended 31-3-2011:

    Particulars

    Amount

    Rs

    Income:

     

    Sales

    2,00,000

    Other Incomes

    15,000

    Total Income

    2,15,000

     

     

    Expenses:

     

    Cost of goods sold

    1,10,000

    Operating expenses

    5,000

    Total Expenses

    1,15,000

    Tax

    40,000

    Prepare a common size Income Statements of Raj Ltd. for the year ended 31-3-2011.

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  • Question 23

    From the following Balance Sheets of C.P. Ltd as on 31-3-2012 and 31-3-2011.

    Prepare a Cash Flow Statements:

    Liabilities

    31-3-2011

    Rs

    31-3-2011

    Rs

    Assets

    31-3-2011

    Rs

    31-3-2011

    Rs

    Shares Capital

    Profit and Loss Account

    Bank Loan

    Proposed Dividend

    Provision for tax

    Creditors

    3,00,000

     

    75,000

    1,50,000

    60,000

    30,000

    45,000

     

    4,50,000

     

    1,50,000

    75,000

    45,000

    52,500

    33,750

    Patents

    Building

    Investment

    Debtors

    Stock

    Cash

     

     

     

     

    37,500

    4,50,000

    -

    1,50,000

    7,500

    15,000

    31,250

    4,50,000

    56,250
    1,91,250

    11,250

    66,250

     

     

    6,60,000

    8,06,250

     

    6,60,000

    8,06,250

     

     

     

     

     

    Additional Information:

    During the year a Building having book value Rs 1,50,000 was sold at a loss of Rs 6,000 and deprecation charged on Building was Rs 16,000

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