ACCOUNTS

SECTIONA
PARTI(12Marks)
Answerallquestions.
Question 1
Answerbrieflyeachofthefollowingquestions

[6*2]

(a)StatetheaccountswhichareusuallyopenedforajointVenturewhenseparatesetofBooks
aremaintained.
(b)Whendoesacompanysufferlossontheissueofdebentures?
(c)HowwouldyoutreatWorkmensCompensationFundatthetimeofdissolutionofa
partnershipfirm?
(d)Whatistheadjustmentandclosingentryrequiredatthetimeoffinalizationofaccountsfor
interestoncapitalallowedtopartners,assumingthataccountsaremaintainedunderfixedcapital
system?
(e)Stateanytwoadjustmentrequiredwhenachangeintheprofitsharingratiotakesplaceina
firm?
(f)StatetwoitemstoberecordedundershorttermprovisionsinaCompanysBalanceSheet?
PARTII
(Answeranyfour)
Question2
A.BandCareinpartnershipsharingprofitandlossesintheratioof2:2:1.Cisentitledtoa
minimumprofitof50,000p.a.Thatpartnersareentitledtogetinterest@10%ontheir
openingcapitalbalanceandaretobechargedinterest@10%p.a.Onthedrawings.Onthebasis
ofthefollowingotherinformation,youarerequiredtoprepareProfit&LossAppropriation
Accountofthefirmfortheyearended31stDecember2011.
OtherInformation:

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Particulars

Capital on 1.1.11
Drawings : 1.4.11
1.6.11
1.9.11

5,00,000
20,000
10,000
20,000

4,00,000

1,00,00
0

10,000
-----20,000
10,000
10,000

Profit for the year ended 31st December 2011 2,50,000.

Question3

st

X Ltd. issued 10,000. 8% debentures of 100 each at a premium of 10% on 1

January 2011. It Purchased sundry assets of the value of 2,50,000 and took over
the liabilities of 60,000 and issued 8% debenture at a discount of 5% to the
vender. On the same date it took a loan from the Bank for 1,00,000 and issued 8%
debentures as collateral security.
Record the relevant journal entries in the Books of X Ltd.

Question4
A,B,C and D were partners sharing profit and losses in the ratio of 3 : 3 : 2 : 2
respectively. The following is their Balance Sheet as at 31 st December, 2011.
Liabilities
Amount
Assets
Amount
Creditors
31,000 Cash at Bank
4,000
As Loan
20,000 Debtors
Capital Accounts :
32,000
31,000
A
Less : Provision
20,000
40,000
70,000 1,000
8,000
B
Stock
14,000
30,000
Furniture
Car
Capital Accounts :
44,000
1,21,00
C
1,21,00
0
12,000
0
D
32,000
It was decided to dissolve the firm with effect from 31 st December, 2011 and B was
appointed to liquidate the assets and pay the creditors. He was entitled to receive
5% commission on the amounts
Finally paid to other partners including loans if any. He was to bear the expenses of
realization which amounted to 500. The assets realized 54,000. Creditors were

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paid in full. In addition a sum of 5,000 was also paid to staff on retrenchment in
fully settlement of their claims.
Prepare necessary Ledger Accounts.

Question5

Faith and Hope are equal partners in a firm. They decide to admit Belief as a new
partner and to readjust the balance sheet values for this purpose.
The Balance Sheet of Faith and Hope on 31st March 2011 was as follows :
Liabilities
Amoun
Assets
Amount
t
Creditors
10,000 Cash
6,000
Bills payable
10,000 Debtors
12,000
Capital Account:
Stock
10,000
Faith
Furniture
4,000
17,000
32,000 Machinery
20,000
Hope
52,000
52,000
15,000

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The following adjustment were to be made on Beliefs admission:

1. 300 was to be provided for doubtful debts.
2. Furniture to be valued at 3,500.
3. Investment worth 2,500 not in the balance sheet was to be taken into
account.
4. Belief brings 12,000 as capital and 10,000 for 1/4 th share of goodwill which
he acquires equally
from Faith and Hope.
5. A liability to the extent of 500 is to be created in respect of a claim for
damages against the firm.
6. Goodwill not to remain in the books.
Prepare Revaluation Account and the Balance Sheet of the new firm after
the admission of Belief. Give the new profit sharing ratio.

Question6
Authorized capital of Jai Company Ltd. is 20,00,000 which is divided into 20,000 shares of
100 each. Out of these 15,000 shares were issued to public payable as under:
20 per share on Application
20 per share on Allotment
30 per share on First call
30 per share on second call.
All the amounts were duly received except the following:

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Ashok did not pay allotment, first call and second call on 30 shares.
Rajneesh did not pay first and second call on 20 shares.
Sarvesh did not pay second call on 10 shares.
Directors forfeited these shares and issued to Sumit on the following
terms:
Ashoks shares were issued @ 90 per share. Rajneeshs shares were
issued @ 70 per share. Sarveshs shares were issued @ 50 per share.
Pass necessary Journal entries assuming that Sumit has paid all the
amounts due on him.
Question7
X and Y agreed to enter into a Joint Venture, each contributing 2000 and agree to divide profits
equally.
They purchased 100 quintal of coal @ 40 per quintal, X sold 75 quintals @ 50 per quintal and
paid the following expenses:
Storage 70; Insurance 100; Carriage 240; Travelling Expenses 20 and other expenses
10.
Y sold the Balance at 52 per quintal and paid commission of 1 per quintal. His expenses
were in Insurance 36 and other expenses 64.
Each co-venturer recording his own transaction in his Account Books.
Also prepare Memorandum Joint Venture A/c.

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Question8
From the following Balance, Prepare a Balance Sheet of Scholastic Ltd. as at 31st March 2013:

Particular
Particular

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Profit & Loss Cr.

Building
Public deposits
Furniture
Goodwill
Stock
Creditors
Machinery
Cash at Bank
Capital Reserve
Call-in-Arrears
Securities Premium

8,000
1,15,00
15,000
24,500
10,000
24,000
16,000
25,000
1,10,000
52,000
2,000
10,000

Preliminary expenses
10% Debentures
Provision for Tax
Investments
Bills Receivable
Proposed Dividend
Debtors
Unclaimed Dividend
Forfeited Shares
Share Capital (18,000
Shares @ 10 fully
calledup)

12,000
35,000
22,000
10,000
12,000
14,000
19,000
11,000
500
1,80,000

SECTIONB
Answeranytwoquestions.
Question9
(a) From the following Statement of Profit and loss of Rizvi Ltd. prepare a Common-Size

Income Statement:
Particulars

Note No.

I. Income
Revenue from operations (sales)
Other Income

1
Total

II. EXPENSES:
Purchases of Stock-in-Trade
Changes in Inventory of Stock-in-Trade
Employees Benefit Expenses (Salaries)
Depreciation
Other Expenses

3
Total

Profit before Tax (I-II)

Less: Income Tax
Profit after Tax

31-03-2013

20,00,000
3,00,000
23,00,000
12,00,000
50,000
2,00,000
1,50,000
1,00,000
17,00,000
6,00,000
1,00,000
5,00,000

Notes to Accounts:
Particulars
1. Other Income
Interest received
Commission received
2. Change in Inventory of Stock-in-Trade
Opening stock of finished goods
Closing stock of finished goods
3. Other Expenses
Direct Expenses:
Carriage Inwards
Factory Power and Fuel
Indirect Expenses:
Administration Expenses
Selling and Distribution Expenses

Amount
2,00,000
1,00,000
3,00,000
80,000
30,000
50,000

20,000
30,000
40,000
10,000
1,00,000

(b) State two difference between comparative Income Statement and Common Size Income
Statement.
Question
10
(a) The following information is derived from the accounts of the company:

Net credit Revenue from Operations

Cost of Revenue from Operations
Debtors: On 1st January, 2007
On 31st December, 2007
Inventory: On 1st January, 2007
On 31st December, 2007
You are required to calculate:
(i) Trade Receivables turnover ratio.
(ii) Gross Profit ratio
(iii) Inventory turnover ratio
(b) What does Proprietary Ratio ?

1,86,000
1,24,000
24,000
28,000

10,000

16,000

Question
11
Calculate Cash flow operating activities from the following items:
(i) Profit made during the year 2,50,000 after considering the following items:

(a) Depreciation
10,000
(b) Amortization
5,000
(c) Transfer to General Reserve
7,000
(d) Profit on sale of Land
3,000
(ii) The following is the position of current assets and current liabilities:
Closing Balance
Opening Balance

Debtors
15,000
12,000
Creditors
10,000
15,000
Bills Receivable
8,000
10,000
Prepaid expenses
4,000
6,000