The following information is available from the books of Robinson and Company Limited:         [14 Marks]
Debit balance as on 1.7.97, Rs 87, 200 in Debtors account and Credit balance as on 1.7.97, Rs 600 in Debtors account.
Transactions during the six months ended 31.12.97
Total sales were Rs 94,000 including cash sales of Rs 4,000.
Debtors whose balance was in credit were paid off Rs 600.
Payments received by cheque from debtors Rs 60,000.
Payments received by cash from debtors Rs 48,000.
Payment received by bills receivable Rs 26,000.
Bills receivable received from debtors were dishonoured for Rs 6,000 and noting charges of Rs 60 were paid.
Bills amounting to Rs 10,000 were discounted with the bank for Rs 9,900.
Cheques received from customers were dishonoured for Rs 800.
Out of bills receivable received and included in Rs 26,000 above, bills of Rs 5,000 were endorsed to suppliers.
Bad debts written off during the period were Rs 1,000.
Discount allowed for prompt payment were Rs 700 and bad debts written off in 1995 and now recovered from debtors amounted to Rs 900.
Interest debited for delay in payments was Rs 1,250.
On 31.12.97, provision for doubtful debts was created for Rs 2,100 and provision for discount on debtors for Rs 500.
Hugo and Company Limited appeared in Debtors Ledger and also in Creditors Ledger.
The balance in Creditors Ledger was Rs 900 and the same was transferred to Debtors Ledger.
Goods of Rs 2,760 were rejected by customers.
From the given information, prepare a Total Debtors Account in the General Ledger. VIEW SOLUTION

Andrew and Bill entered into a joint venture for underwriting the subscription at par of the entire share capital of Jacob and Company Limited consisting of 1,00,000 equity shares of Rs 10 each and to pay all expenses up to allotment. The profits were to be shared by them in the ratio of 3:2 respectively.

[14 Marks]

The consideration in return for this agreement was the allotment of 12,000 other shares of Rs 10 each to be issued to them as fully paid. Andrew provided the funds amounting to Rs 32,500 for various expenses and Bill contributed Rs 27,500 on account of office expenses. The prospectus was issued and application fell short of the issue by 15,000 shares. Andrew took these over on joint account and paid for the same in full. The ventures received 12,000 fully paid shares as underwriting commission. They sold their entire share holding at Rs 12.50 less 50 paise brokerage per share. The net proceeds were received by Andrew for 15,000 shares and Bill for 12,000 shares. You are required to show in the books of Andrew and Bill, the joint venture accounts as well as their personal accounts in their respective books.

  VIEW SOLUTION

Bird and Company Limited issued 10,000 shares of Rs 10 each payable as follows:    [14 Marks]
Application – Rs 4 per share on 1.1.09
Allotment – Rs 3 per share payable on 1.4.09
First call – Rs 2 per share payable on 1.7.09 and Second and final call – Rs 1 per share payable on 1.10.09

All the shares were subscribed for and the money received subject to certain exceptions:

(a) Mr. Harry holding 500 shares paid the entire amount of his holding at the time of allotment.

(b) Mr. Joe holding 200 shares failed to pay the allotment and first call money on the due dates but paid the entire amount due at the time of paying the second and final call.

Directors have decided to charge and allow interest, as the case may be, on calls in arrear and calls in advance respectively, as per the provisions of Table-A of the Companies Act, 1956.
The defaulting shareholders duly paid their interest on calls in arrear to the company while some shareholders were also paid interest on calls in advance by the company before the finalization of accounts on 31.12.09.

You are required to pass the consolidated adjustment and other relevant entries relating to interest on calls in arrear and interest on calls in advance only in all the appropriate books of account of Bird and Company Limited at the time of closing of annual accounts. VIEW SOLUTION

The following is the Balance Sheet of Alice, Barry and Charles as on 1^st January, 2010:    [14 Marks]
 

Liabilities	Amount Rs	Assets	Amount Rs
Alice’s capital	40,000	Goodwill	10,000
Barry’s capital	20,000	Building	50,000
Charles’ capital	20,000	Machinery	40,000
General reserve	20,000	Furniture	10,000
Creditors	15,000	Stock	5,000
Bills payable	15,000	Debtors	5,000
		Bank	10,000
	1,30,000		1,30,000

The partners share profits and losses in the ratio of 2:2:1, but on the above date, they decided to change that to 2:1:1. The following adjustments are required;

(a) The value of the goodwill is Rs 15,000.

(b) The value of machinery and furniture is to be increased by Rs 15,000 and Rs 5,000, respectively.

(c) The value of stock and debtors is to be decreased by Rs 3,000 and Rs 2,000, respectively.

(d) The capitals of the partners are to be adjusted according to the new profit and loss sharing ratio and for that, necessary capital is to be brought in or excess capital is to be withdrawn.

(e) No reserve will be shown in the new Balance Sheet.

Prepare revaluation account, partners’ capital accounts and re-draft the balance sheet. VIEW SOLUTION

The following are the ledger balances extracted from the books of Coopers and Company Limited:    [14 Marks]

Particulars	Amount (Rs)
Authorized share capital – 1,00,000 equity shares of Rs 10 each.	10,00,000
Issued and subscribed share capital – 1,00,000 equity shares of Rs 10 each	10,00,000
Calls in arrear	1,000
Profit and loss account (Cr)	1,00,000
10% Debentures	1,42,500
Debenture interest accrued but not due	7,500
Fixed deposits accepted	1,21,000
Provision for taxation	68,000
General reserve	2,10,000
Proposed dividend	60,000
Creditors	2,00,000
Plant and Machinery	5,25,000
Stock	2,50,000
Debtors	2,00,000
Land	2,00,000
Preliminary expenses	13,300
Advances to directors	42,700
Furniture	50,000
Cash	30,000
Bank	2,47,000
Building	3,50,000

 
Prepare the Balance Sheet of the company as per Schedule VI, Part I of the Companies Act, 1956. VIEW SOLUTION

Balance Sheet as on 31st March 2010
Liabilities	Amount Rs	Assets		Amount Rs
Creditors	20,000	Goodwill		10,000
Bills payable	20,000	Building		25,000
Bank overdraft	8,000	Plant		25,000
Outstanding expenses	2,000	Investments		15,300
James’ brother’s loan	20,000	Stock		8,700
Henry’s loan	10,000	Debtors	17,000
Investment fluctuation fund	2,800	Less provision for bad Debts	2,000	15,000
Employees provident fund	1,200	Bills receivable		10,000
General reserve	2,000	Cash and bank		17,000
James’ capital	20,000
Henry’s capital	20,000
	1,26,000			1,26,000

The firm was dissolved on the above balance sheet date and the following arrangements were decided upon:  
You are required to prepare the necessary ledger accounts in order to close the books of the firm. VIEW SOLUTION

The Balance sheets of Cowper and Company as on 31^st December, 2009, and 31^st December 2010, are given below:    [14 Marks]
 

Balance Sheet as on 31st March 2010
Liabilities	31.12.09 Amount Rs	31.12.10 Amount Rs	Assets	31.12.09 Amount Rs	31.12.10 Amount Rs
Equity share capital of Rs 100each	10,00,000	20,00,000	Plant	15,00,000	20,00,000
General Reserve	10,00,000	11,00,000	Stock	6,00,000	6,00,000
Profit and Loss account	3,00,000	4,00,000	Debtors	10,00,000	9,00,000
Current liabilities	7,00,000	2,00,000	Cash	1,00,000	4,00,000
Provision for taxation	3,00,000	4,00,000	Miscellaneous expenditure	1,00,000	2,00,000
	33,00,000	41,00,000		33,00,000	41,00,000

Additional information:

(a)  During the current year, the company paid Rs 2,00,000 as equity dividend.

(b) During the current year, one plant whose book value was Rs 1,00,000 was sold at a loss of Rs 25,000 and the company purchased another plant for Rs 8,00,000.

(c) A sum of Rs 3,50,000 has been provided for taxation for the year.

(d) Miscellaneous expenditure included Rs 1,10,000 as share issue expenses.

 
Prepare a Cash Flow Statement as per AS-3 for the year ended 31^st December, 2010. VIEW SOLUTION

(a)	The following data is available from Allen and Company Limited:	[14 Marks]
	Debtors turnover ratio – 4 times. Cost of goods sold – Rs 6,40,000 Gross profit ratio – 20%. Closing debtors were Rs 20,000 more than at the beginning. Cash sales being $33\frac{1}{3}$ of credit sales. From the above, calculate the amount of opening debtors and closing debtors.
(b)	The following figures have been extracted from Regal and Company Limited:
	Stock at the beginning of the year – Rs 60,000 Stock at the end of the year – Rs 1,00,000 Stock turnover ratio – 8 units. Selling price 25% above cost. Compute the amount of gross profit and sales.
(c)	The following information is provided to you pertaining to Parker and Company Limited:
	The above company has a current ratio 3:1 Its current liabilities are Rs 25,000. Calculate its current assets and working capital.
(d)	The following information is available from Scott and Company Limited:
	Opening stock Rs 30,000 Closing stock Rs 40,000 Carriage inwards Rs 10,000 Purchases Rs 1,00,000 Current assets Rs 50,000 Current liabilities Rs 20,000 Fixed assets Rs 80,000 Indirect expenses Rs 15,000 Sales Rs 2,00,000
	Calculate the Stock turnover ratio and Working Capital turnover ratio.
(e)	The following information is available from Walter and Company Limited:
	Stock turnover ratio – 5 times Stock at the end of the year is Rs 15,000 more than the stock in the beginning of the year. Sales – Rs 2,00,000 Gross profit ratio – 25% Current liabilities – Rs 50,000 Quick ratio – 0.75 Calculate the current assets of the company.

VIEW SOLUTION