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Accountancy 6 Marks Question

Model Paper 4 · CBSE STD 12 Commerce (CBSE - English Medium). 6 questions.

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Question 16 Marks
On 1st June, 2022, Y Ltd. issued 6,000, 12% Debentures of ₹ 100 each at par redeemable at a premium of 7% at the end of third year.
Pass the Journal entries for issue of Debentures and writing off Loss on Issue of Debentures. Also prepare Loss on Issue of Debentures Account.
Answer
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Question 26 Marks
X, Y, and Z were partners sharing profits in the ratio 3 : 2 : 1. On 31st March 2008, their Balance Sheet stood as under :
LiabilitiesAmt(Rs.)AssetsAmt(Rs.)
Capitals:Cash at Bank70,000
X75,000Investments50,000
Y70,000Patents15,000
Z50,0001,95,000Stock25,000
Creditors72,000Debtors20,000
General Reserve24,000Buildings75,000
Machinery36,000
2,91,0002,91,000
Z died on May 31st, 2008. It was agreed that
a. Goodwill was valued at 3 years' purchase of the average profits of the last five years, which were 2003: Rs. 40,000; 2004: Rs. 40,000; 2005: Rs. 30,000; 2006: Rs. 40,000 and 2007: Rs. 50,000.
b. Machinery was valued at Rs. 70,000, Patents at Rs. 20,000 and Buildings at Rs. 66,000.
c. For the purpose of calculating Z's share of profits until the date of death, it was agreed that the same be calculated based on the average profits for the last 2 years.
d. The executor of the deceased partner is to be paid the entire amount due by means of a cheque.
Prepare Z's Capital Accounts to be rendered to the executor and also a journal entry for the settlement of the amount due to Z's executor.
Answer

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ii. Goodwill = 3 x average profit
iii. Average Profit = Total profit / number of years
iv. Total profit = 40,000 + 40,000 + 30,000 + 40,000 + Rs. 50,000 = 2,00,000.
v. Number of years = 5
vi. So Average Profit = 2,00,000 / 5 = 40,000
vii. Goodwill = 2 x average profit i.e 40000 $\times$ 3 = Rs. 1,20,000
Z's share of Goodwill = 1,20,000 $\times \frac{1}{6}=$ Rs. 20,000
viii. Z's share in profit = Average profit $\times \frac{1}{6} \times \frac{2}{12}$
ix. Average profit = 50,000 + 40000 / 2 = 45,000
x. Z's share in profit = Rs. $45,000 \times \frac{1}{6} \times \frac{2}{12}=$ Rs. 1,250
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Question 36 Marks
L, M and N were partners in a firm sharing profits in the ratio of 2 : 1 : 1. On 1st April, 2013 their balance sheet was as follows:
Balance Sheet
as at 1st April, 2013
LiabilitiesAmount (Rs)Assets Amount (Rs)
General Reserve4,40,000Land 8,00,000
Workmen's Compensation Fund3,60,000Building 6,00,000
Creditors2,40,000Furniture 2,40,000
Capital A/cs Debtors                                                          4,00,000 
L 6,00,000 (-) Provision for Doubtful Debts                         20,0003,80,000
M 4,80,000 Stock 4,40,000
N 4,80,00015,60,000Cash 1,40,000
 26,00,000
=======		  26,00,000
=======
On the above date, N retired. The following were agreed:
i. Goodwill of the firm was valued at Rs 6,00,000.
ii. Land was to be appreciated by 40% and building was to be depreciated by Rs 1,00,000.
iii. Furniture was to be depreciated by Rs 30,000.
iv. The liabilities for workmen's compensation fund was determined at Rs 1,60,000.
v. Amount payable to N was transferred to his loan account.
vi. Capitals of L and M were to be adjusted in their new profit sharing ratio and for this purpose current accounts of the partners will be opened.
Prepare revaluation account, partner's capital accounts and the balance sheet of the new firm.
Answer

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Working Notes:
A partner ceases to be a partner on his retirement or death and as such, the amount of claim of the retiring partner or the d5ceased partner has to be settled by the firm. The problems that arise at the time of retirement of a partner from the firm are:
(1) Ascertainment of new profit sharing ratio,
(2) Ascertainment of gaining ratio,
(3) Treatment of goodwill,
(4) Adjustment for revaluation of assets and liabilities,
(5) Adjustment in respect of unrecorded assets and liabilities,
(6) Adjustment in respect of accumulated profits/losses,
(7) Methods of payment to retiring partner.
i. Finn's goodwill = Rs 6,00,000
N's share of goodwill $=6,00,000 \times \frac{1}{4}=1,50,000$ to be contributed by L and M in gaining ratio i.e., 2 : 1;
L $=1,50,000 \times \frac{2}{3}=$ Rs $1,00,000$; M $=1,50,000 \times \frac{2}{3}=\operatorname{Rs} 50,000$
ii. Calculation of Proportionated Capital
L's capital after all adjustment = 9,15,000
M's capital after all adjustment = 6,37,500
Total capital of new firm = Rs 15,52,500
L's new capital $=15,52,500 \times \frac{2}{3}=$ Rs $10,35,000$
M's new capital $=15,52,500 \times \frac{1}{3}=$ Rs $5,17,500$
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Question 46 Marks
X and Y are partners sharing profits in the ratio of 2 : 1. Their Balance Sheet as at 31st March, 2023 was:
Liabilities₹Assets₹
Sundry Creditors25,000Cash/Bank5,000
General Reserve18,000Sundry Debtors15,000
Capital A/cs:Stock10,000
X75,000Investments8,000
Y62,0001,37,000Printer5,000
Fixed Assets1,37,000
1,80,0001,80,000
They admit Z into partnership on 1st April, 2023 on the following terms:
i. Z brings in ₹ 40,000 as his capital and he is given $\frac{1}{4}$th share in profits.
ii. Z brings in ₹ 15,000 for goodwill, half of which is withdrawn by old partners.
iii. Investments are valued at ₹ 10,000. X takes over Investments at this value.
iv. Printer is to be reduced (depreciated) by 20% and Fixed Assets by 10%.
v. An unrecorded stock on 31st March, 2023 is ₹ 1,000.
vi. By bringing in or withdrawing cash, the Capitals of X and Y are to be made proportionate to that of Z on their profit-sharing basis.
Pass Journal entries, prepare Revaluation Account, Capital Accounts and new Balance Sheet of the firm.
Answer

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Working Notes: 1 Sacrificing Ratio
Old ratio X : Y = 2 : 1
Sacrificing Ratio = 2 : 1
Working Notes: 2 Distribution of Revaluation Loss
Revaluation loss transferred to X's Capital $=11,700 \times \frac{2}{3}=$ ₹ 7,800
Revaluation loss transferred to Y's Capital $=11,700 \times \frac{1}{3}=$ ₹ 3,900
Working Notes: 3 Distribution of Premium for Goodwill
X will get = 15,000 $\times \frac{2}{3}=$ ₹ 10,000
Y will get = 15,000 $\times \frac{1}{3}=$ ₹ 5,000
Working Notes: 4
Total Capital of the firm on the basis of Z's share = $40,000 \times \frac{4}{1}=$ ₹ 1,60,000
Total Capital of the firm1,60,000
Less: Z's Capital40,000
Combined Capital of X and Y1,20,000
X's share of Capital = 1,20,000 $\times \frac{2}{3}=$ ₹ 80,000
Y's share of Capital = 1,20,000 $\times \frac{1}{3}=$ ₹ 40,000
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Question 56 Marks
Petromax Ltd. issued 50,000 shares of Rs. 10 each at a premium of Rs. 2 per share payable as Rs 3 on an application, Rs 5 including premium on an allotment and the balance in equal installments over two calls. Applications were received for 92,000 shares and the allotment was done as under:
A. Applicants of 40,000 shares - Allotted 30,000 Shares
B. Applicants of 40,000 shares - Allotted 20,000 Shares
C. Applicants of 12,000 shares - Nil
Suresh, who had applied for 2,000 shares (Category A) did not pay any money other than application money.
Chander, who was allotted 800 shares (Category B) paid the call money due along with allotment.
All other allottees paid their dues as per schedule. Pass necessary Journal entries in the books of Petromax Ltd. to record the above.
Answer

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Working Notes:
1. Money due from Suresh on Allotment:
i. Number of shares allotted to Suresh = 30,000/40,000 $\times$ 2,000 = 1,500 Shares.
ii. Application money paid by Suresh = 2,000 $\times$ Rs 3 = Rs 6,000.
iii. Application money required = 1,500 $\times$ Rs 3 = Rs 4,500.
iv. Excess application money adjusted on allottment = [(ii) Rs. 6,000 - (iii) Rs. 4,500] = Rs. 1,500.
v.
Money due from Suresh on allotment = 1,500 $\times$ Rs 57,500
Less : Excess application money adjusted (iv)1,500
Money due from Suresh on allotment6,000

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3. Calls-in-Advance in case of 800 shares = 800 $\times$ Rs. 4 = Rs 3,200
4. Total Money received at the Time of Allotment
= Rs. 1,54,000 (Note 2) + Rs. 3,200 (Note 3) = Rs. 1,57,200
5. The Companies Act 2013 (Sec 52(1)) requires that the amount of premium received on securities to be credited to Securities Premium Account. Securities Premium is a capital receipt which is shown under the head Reserve & Surplus on the liability side of the balance sheet.
6. If a shareholder defaults in payment of the call amount due on allotment or on any calls according to the terms, the amount not received against the amount called is Calls in arrears. The unpaid amount may or may not be transferred to Calls in arrears account. Company can charge interest on calls in arrears as per mentioned in articles of association or 6% as per Table F(if articles are silent). The Directors have right to wave the interest.
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Question 66 Marks
Meson Ltd. was registered with a capital of ₹ 4,00,000 in shares of ₹ 100 each. It issued 2,000 of such shares payable ₹ 25 per share on application; ₹ 25 on allotment; ₹ 20 on first call; and the balance as and when required.
All moneys payable on application and allotments were duly received; but when the first call of ₹ 20 per share was made, one shareholder holding 100 shares failed to pay the amount due and another shareholder holding 200 shares paid them in full. Record these transactions in the journal of the Company.
Answer
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