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Sulalitha - Accountancy, , 1, , Chapter-1, , Accountancy for Not-For-Profit Organisation, , SECTION-A:, 1., , ONE MARK QUESTIONS, , Donations for specific purposes are always capitalized. State True/False., , Ans: True., 2., , Not-for-profit-organisations are used for the welfare of the ____________ ., , Ans: society., 3., , Not-for-profit organisations are formed for _______________ ., a) profit, , b) service, , c) profit and service, , d) None of these, , Ans: b) service., 4., , Give an example for Not-for-profit-organisation?, , Ans: i) Charitable Institutions, ii) Hospitals, Public Libraries., 5., , Give an example for specific donation?, , Ans: Donation for buildings., 6., , Receipt and payment A/c is a summary of _________ book., , Ans: Cash, 7., , _______________ are the amounts received as per the will of the deceased, person., , Ans: Legacies, 8., , Life membership fees is treated as ________________ ., , Ans: Capital receipt, 9., , Name any one final a/c of Not-for-profit -organisation., , Ans: Income and Expenditure A/c, 10., , Capital and Revenue items are recorded in receipt and payment A/c. State, True/False., , Ans: True, 11., , Government grant is treated as ________________ receipt., , Ans: Revenue.

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2, , Sulalitha - Accountancy, , SECTION-D, 1., , Following is the Balance sheet of Shri Ramakrishna Education Society, Udupi, for the year ending 31.3.2019., (June-2016), Balance Sheet as on 31.03.2019, Liabilities, Capital Fund, Affiliation fees dues, Building Fund, Salary Outstanding, , Amount, (`), 54,000, 2,000, 40,000, 4,000, , Assets, , Amount, (`), , Furniture, , 40,000, , Investments, , 26,000, , Sports Equipments, , 15,000, , Subscriptions Outstanding, , 3,000, , Cash at Bank, , 6,000, , Books, , 10,000, , Total 1,00,000, Dr., , Total 1,00,000, , Receipts and payments for the year ending 31.3.2020, Receipts, To Balance b/d, , Amount, (`), 6,000, , Payments, , Cr., Amount, (`), , By Affiliation fees, , 2,000, , To Subscriptions, , 25,000, , By Salaries, , 42,000, , To Govt. Bonds, , 75,000, , By Boards, Maps and Charts, , 8,000, , To Building grants, , 20,000, , By Furniture, , 5,000, , By Repairs and Painting, , 4,000, , By Books, By Postage, , 1,000, , By Tournament expenses, , 5,000, , By Printing and Stationary, , 6,500, , By Union Day function expenses, , 8,500, , By Balance c/d, Total 1,36,000, , 35,000, , 19,000, Total 1,36,000, , Adjustments:, a) Salary payable ` 3,000., b) Subscriptions received in advance during the year ` 500., c) Subscriptions due for the current year ` 1,200., d) Depreciate furniture by ` 2,900 books by ` 6,000 and sports equipments by ` 2,500., Prepare:, i)Income and Expenditure A/c for the year ending 31.3.2020., ii)Balance sheet as on that date.

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Sulalitha - Accountancy, , 3, , Shri Ramakrishna Education Society, Udupi., , Ans:, Dr., , Income and Expenditure A/c for the year ending 31.3.2020, Expenditure, , Amount, (`), , To Affiliation fees, , 2,000, , (–) P.Y. (O/s), , –2,000, , To Salaries, , 42,000, , (–) P.Y. (O/s), , –4,000, , 0000, , Income, , +3,000, , 25,000, , (–) P.Y. (O/s), , –3,000, 22,000, , (+) C.Y. (O/s), , 6,000, , (+) Furniture, , 2,900, , (+) Sports Equipment, , 2,500, , 41,000, , (–) Received in advance, , –500, , 22,700, , By Govt. grants, , 75,000, , By Interest received, , 10,000, , 11,400, , To Repairs and Painting, , 4,000, , To Postage, , 1,000, , To Tournament expenses, , 5,000, , To Printing and Stationary, , 6,500, , To Union day function exp., , 8,500, , To Surpulus, , 1,200, 23,200, , To Depreciation:, Books, , Amount, (`), , By Subscriptions, , 38,000, (+) C.Y. (O/s), , Cr., , 30,300, 1,07,700, , 1,07,700, , Balance Sheet as on 31.03.2020, Liabilities, , Amount, (`), , Subscription received, , Furniture, , in advance, , 500, , Salary O/s, , 3,000, , Building fund, (+) Grants, , 40,000, +20,000, , (+) Surplus, , 60,000, , 54,000, +30,300, , (+) Additions, , 84,300, , Amount, (`), 40,000, 5,000, 45,000, , (–) Depreciation, , Capital Fund :, Opening, , Assets, , –2,900, , Investments, , 26,000, , Sports equipments, , 15,000, , (–) Depreciation, , –2,500, , Subscriptions O/s, , 42,100, , 12,500, 1,200

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4, , Sulalitha - Accountancy, , Cash @ Bank, , 19,000, , Books, , 10,000, , (+) Additions, , 35,000, 45,000, , (–) Depreciation, , 6,000, , Boards, Maps and Charts, , 8,000, , 1,47,800, , 2., , 39,000, , 1,47,800, , Following is the Balance sheet and Receipts and Payments A/c of Ganesh, Education Trust, Udupi., (March, 2016), Balance Sheet as on 31.03.2014, Liabilities, , Amount, (`), , O/s Office Expenses, , 5,000, , Bank Loan, Capital Fund, , Assets, Cash in hand, , 15,000, , 35,000, , Furniture, , 25,000, , 1,20,000, , Buildings, , 70,000, , Sports Materials, , 20,000, , Library Books, , 30,000, , Total 1,60,000, , Dr., , Amount, (`), , Total 1,60,000, , Receipts and payments for the year ending 31.3.2015, Receipts, , Amount, (`), , Payments, , Cr., Amount, (`), , To Balance b/d, , 15,000, , By Office Expenses, , To Subscriptions, , 50,000, , By Postage, , 100, , To Entrance fees, , 8,000, , By Printing, , 500, , To Donations, , 12,000, , To Interest, , 5,000, , 22,000, , By Salary, , 25,000, , By Purchase of Books, , 10,000, , By Bank Loan paid, , 5,000, , By Subscriptions to Newspapers, By Balance c/d, Total, , 90,000, , Adjustments:, i) Subscriptions outstanding ` 5,000., ii) Subscriptions received in advance ` 5,000., iii) Salary prepaid ` 3,000, , 600, 26,800, , Total, , 90,000

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Sulalitha - Accountancy, , 5, , iv) Capitalise 50% of entrance fees and 50% of donations., v) Depreciate building by 10% p.a., Prepare:, a) Income and Expenditure A/c for the year ending 31.3.2015., b) Balance sheet as on 31.03.2015., Ganesh Education Trust, Udupi., , Ans:, Dr., , Income and Expenditure A/c for the year ending 31.3.2015, Expenditure, To Office expenses, (–) O/s expenses (P.Y.), , Amount, (`), 22,000, 5,000, , To Printing & Stationary, To Salary, (–) Prepaid, , By Subscriptions, 17,000, , To Postage, , 22,000, 100, , 50,000, 5,000, 55,000, , received in advance, , 5,000, , 50,000, , By Entrance fees, , 4,000, , 50, 100, By Donation, , 6,000, , 8,000 , , building by 10% p.a., , 7,000, , 10, 100, , 12,000 , , To subscription to newpapers, To Surplus (Bal), , Amount, (`), , (–) Subscription, , To Depreciation on, , 70,000 , , (+) O/s (C.Y.), , 500, , 25,000, 3,000, , Income, , Cr., , 600, , 50, 100, , By Interest, , 5,000, , 17,800, 65,000, , 65,000, , Balance Sheet as on 31.03.2015, Liabilities, , Amount, (`), , Bank Loan, 35,000, (–) Repaid, 5,000, 30,000, Subscription received, in advance, 5,000, Capital fund, Opening Bal., 1,20,000, (+) Entrance fees, 6,000, (+) Surplus, 17,800 1,47,800, Total 1,82,800, , Assets, Cash in hand, Furniture, Building, (–) Depreciation, Sports materials, Library books, (+) Purchases, Prepaid Salary, O/s Subscription, , Amount, (`), 26,800, 25,000, 70,000, 7,000, 30,000, 10,000, , 63,000, 20,000, 40,000, 3,000, 5,000, , Total 1,82,800

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6, , Sulalitha - Accountancy, , 3., , From the following Receipts and Payments account and Balance Sheet of, Union Club, prepare Income and Expenditure account for the year ended, 31.3.2018 and Balance sheet as on that date. (March, 2019), Balance Sheet as on 31.03.2017, Liabilities, , Amount, (`), , Outstanding Salary, , 1,000, , Capital Fund, , 39,900, , Assets, , Amount, (`), , Cash in hand, , 3,500, , Books, , 6,200, , O/S subscription, , 3,600, , Furniture, , 2,600, , Building, Total, , Dr., , 25,000, , 40,900, , Total, , Receipts and payments for the year ended 31.3.2018, Receipts, , Amount, (`), , To Balance b/d, , 3,500, , Payments, , 40,900, , Cr., Amount, (`), , By General expeses, , 900, , To Subscriptions, , 75,000, , To Entrance fees, , 2,000, , By Postage, , 1,300, , To Rent from use of Hall, , 7,000, , By Electricity charges, , 7,800, , To Donation, , 10,000, , To Sale of Newspaper, , 400, , To Life Membership fees, , 7,300, , By Salary, , 16,000, , By Furniture, , 26,500, , By Books, , 13,000, , By Newspaper, , 600, , By Meeting expenses, , 7,200, , By T.V. set, , 16,000, , By Balance c/d, , 15,900, , Total 1,05,200, , Total 1,05,200, , Additional Information:, a), , Subscription outstanding on 31st March, 2018 - Rs. 10,000., , b), , Salary outstanding on 31st March, 2018 - Rs. 1,000., , c), , Depreciation furniture and Books at 10% each (only on opening balances)., , d), , Donation to be capitalised., , e), , Electricity charged paid in advance - Rs. 650.

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Sulalitha - Accountancy, , 7, , Union Club, , Ans:, Dr., , Income and Expenditure A/c for the year ending 31.3.2018, Expenditure, , Amount, (`), , To General expenses, To Salary, (–) O/s (P.Y.), , 900, 16,000, 1,000, 1,000, , To Postage, To Electricity charges, (–) paid in advance, , By Subscriptions, (–) O/s (P.Y.), (+) O/s (C.Y.), , 16,000, 1,300, , 7,800, 650, , To News paper, , Amount, (`), 75,000, 3,600, 71,400, , 15,000, (+) O/s (C.Y.), , Income, , Cr., , 10,000, , 81,400, , By Entrace fees, , 2,000, , By Rent from use of Hall, , 7,000, , By Sale of Newspaper, , 400, , 7,150, 600, , To meeting expenses, , 7,200, , To Depreciation, Furniture (on op. bal), 10, 2,600 , 100, 10, Books 6,200 , 100, To Surplus (Bal), , 260, , 620, , 880, 56,770, , Total, , 90,800, , Total, , 90,800, , Balance Sheet as on 31.03.2018, Liabilities, , Amount, (`), , O/s Salary (31.3.2018), , 1,000, , Capital Fund:, , Assets, , Amount, (`), , Cash in hand, Books, , Opening balance, , 39,900, , (+) Additions, , (+) Surplus, , 56,770, , (+) Donation, , 10,000, , (–) Depreciation, , (+) Life membership, , 73,000 1,13,970, , Furniture, , 15,900, 6,200, 13,000, 19,200, , (+) Purchase, , 620, , 18,580, , 2,600, 26,500, 29,100, , (–) Depreciation, , 260, , 28,840, , Building, , 25,000, , T.V. Set, , 16,000, , O/s Subscription (31.3.2018), , 10,000, , Electricity charges, (paid in advance), Total 1,14,970, , 650, Total 1,14,970

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8, , Sulalitha - Accountancy, , 4., , The following are the Balance Sheet and Receipts and Payments of Mandar, Education Society, Bagalkot., Balance Sheet as on 31.03.2018, Liabilities, , Amount, (`), , Capital fund, , 72,800, , Audit Fees O/s, , 5,000, , Total, , Dr., , Assets, , Amount, (`), , 5% Govt. Bonds, , 62,000, , Furniture, , 6,500, , Maps and Charts, , 3,200, , Cash in Hand, , 4,100, , Subscriptions O/s, , 2,000, , 77,800, , Total, , Receipts and payments for the year ended 31.3.2019, Receipts, , Amount, (`), , To Balance b/d, , 4,100, , To Subscription, , 41,000, , To Donations, , 5,000, , To Interest on, , Payments, , 1,700, , By Autid fees, , 5,000, , By Rent, , 3,600, , By Maps and Charts, , 6,800, , By Salary, , 2,100, , By Balance c/d, 51,800, , Adjustments:, a), , Audit fees Rs. 2,500 till due., , b), , Charge Rs. 500 as depreciation on furniture., , c), , Hall of the donation is to be considered as revenue., , d), , Outstanding Interest on Govt. Bonds Rs. 1,400., Prepare:, i) Income and Expenditure A/c and, ii) New Balance Sheet as on 31.3.2019., , 500, 16,000, , By Functions, , Total, , Cr., Amount, (`), , By Stationary and Postage, , donations, , 77,800, , 17,800, Total, , 51,800

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Sulalitha - Accountancy, , 9, , Mandar Education Society, , Ans:, Dr., , Income and Expenditure A/c for the year ending 31.3.2019, Expenditure, , Amount, (`), , Income, , To Audit Fees, , 5,000, , By Subscriptions, , (–) O/s (P.Y.), , 5,000, , (–) O/s (P.Y.), , 0000, , By Donations 5,000 , , (+) O/s (C.Y.), , 2,500, , To Rent, To Stationery & Postage, To Salary, , Amount, (`), 41,000, 2,000, , 2,500, , 1, 2, By Interest on Govt. bonds, , 3,600, , (+) 62,000 , , 500, , 5, 100, , = (3,100 – 1,700), , Cr., , 39,000, 2,500, , 1,700, 1,400, , 3,100, , Total, , 44,600, , 16,000, , To Functions, , 2,100, , To Depreciation on Furniture, To Surplus (Balance), , 500, 19,400, , Total, , 44,600, , Balance Sheet as on 31.03.2019, Liabilities, , Amount, (`), , Audit Fees O/s, , 2,500, , Capital Fund, Opening Balance, (+) Donations, (+) Surplus, , 72,800, 2,500, 19,400, , 94,700, , Assets, 5% Govt. Bonds, , Amount, (`), 62,000, , (+) Interest, , 1,400, , Furniture, , 6,500, , (–) Depreciation, , 500, , Maps and Charts, , 3200, , (+) Additions, , 6,800, , Cash in hand, Total, 5., , 97,200, , 63,400, 6,000, 10,000, 17,800, , Total, , 97,200, , Following are the Balance Sheet and Receipt and Payment of Sree Sports,, Club, Bengaluru., Balance Sheet as on 31.03.2018, Liabilities, , Amount, (`), 2,000, 32,500, , Outstanding Salary, Capital fund, , Total, , 34,500, , Assets, Cash balance, O/s Subscription, Sports materials, Furniture, , Amount, (`), 7,300, 1,200, 16,000, 10,000, Total, 34,500

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10, , Sulalitha - Accountancy, , Dr., , Receipts and payments for the year ended 31.3.2019, Receipts, , Amount, (`), , To Balance b/d, , 7,300, , To Subscriptions, , 38,000, , To Entrance fees, , 2,000, , To Sale of Old news papers, , 200, , To Sale of old, , Payments, , Cr., Amount, (`), , By Salary, , 10,000, , By Purchase of sports, materials, , 6,000, , By Investments, , 20,000, , By Fixed deposits, , 10,000, , sports materials, , 1,200, , By Postage, , 300, , To Rent, , 7,000, , By General expenses, , 400, , Total, , By Lighting charges, , 1,300, , By Balance c/d, , 7,700, , 55,700, , Total, , 55,700, , Adjustments:, a), , Subscription outstanding for the year 2019 is Rs. 3,000., , b), , Subscription received is advance for the year 2020 - Rs. 1,000., , c), , Depreciation on Sports materials by Rs. 5,000., , d), , Capitalize entrance fees., , e), , Outstanding lighting charges Rs. 300., Prepare:, i), , Income and Expenditure A/c., , ii) Balance sheet as on 31.3.2019., , Sree Sports Club, Bengaluru., , Ans:, Dr., , Income and Expenditure A/c for the year ending 31.3.2019, Expenditure, To Salary, (–) O/s (P.Y.), , Amount, (`), 10,000, 2,000, , By Subscriptions, 8,000, , To Postage, , 300, , To General Expenses, , 400, , To Lighting Charges, (+) O/s, , Income, , (–) O/s (P.Y.), , To Depreciation on, , (+) O/s (C.Y.), , 1,600, , (–) Received in advance, , 5,000, , By Sale of old newpapers, , 31,900, Total, , 38,000, 1,200, 3,000, 39,800, , sports materials, To Surplus, , Amount, (`), , 36,800, , 1,300, 300, , Cr., , 47,200, , 1,000, , 38,800, 200, , By Sale of old sports materials, , 1,200, , By Rent, , 7,000, Total, , 47,200

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Sulalitha - Accountancy, , 11, , Balance Sheet as on 31.03.2019, Amount, Assets, (`), , Liabilities, Subscriptions received, , 1,000, , in advance, , Cahs Balance, Sports materials, , O/s Lighting charges, , 300, , Amount, (`), 7,700, 16,000, , (+) Purchases, , Capital Fund, , 6,000, 22,000, , Opening balance, , 32,500, , (+) Entrance fees, , 2,000, , (+) Surplus, , 31,900, , (–) Depreciation, 66,400, , 5,000, , Investments, , 20,000, , Fixed Deposits, , 10,000, , O/s Subscription, , 3,000, , Furniture, Total, 6., , 17,000, , 10,000, , 67,700, , Total, , 67,700, , Following are the Balance Sheet and Receipts and Payments of Hassan Sports, Club, Hassan., Balance Sheet as on 31-03-2017, Liabilities, , Amount, (`), , Capital Fund, , 61,000, , Assets, , Amount, (`), , Buildings, , 64,000, , Subscription for 2017-18, , 1,000, , O/S Subscriptions, , 1,600, , O/s office expenses, , 4,000, , Outstanding Rent, , 400, , Bank Loan, , 20,000, , Furniture, , 12,000, , Cash at Hand, Total, Dr., , 86,000, , 8,000, Total, , Receipt and Payment Account for the year ended 31-03-2018, Receipts, , Amount, (`), , To Balance B/d, To Subscriptons:, , 8,000, , Payments, , 86,000, Cr., Amount, (`), , By Office Expenses, , 2016-17, , 1,600, , 2016-17, , 4,000, , 2017-18, , 17,600, , 2017-18, , 6,000, , 2018-19, , 2,800, , By subscription to, Newspapers & Journals, , 2,000, 4,000, , To Entrance Fees, , 4,000, , By Refreshment Expenses, , To Rent, , 4,000, , By Investments, , To Income from Drama, , 6,000, , By Bank Loan, , 8,000, , By Salary, , 4,000, , By Balance c/d, , 6,000, , To Sale of newspapers, , 400, Total, , 44,400, , 10,000, , Total, , 44,400

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12, , Sulalitha - Accountancy, , Adjustments:, i) Subscriptions outstanding Rs. 1,000, ii) Salary outstanding Rs. 400., iii) Interest payable Rs. 2,400, iv) Depreciation on Building Rs. 5,000, v) Entrance Fees is to be capitalised., Prepare:, a) Income and Expenditure A/c, b) Balance Sheet as on 31.03.2018., , Hassan Sports Club, Hasan., , Ans:, Dr., , Income and Expenditure Account for the year ending 31st March, 2018, Expenditure, , Amount, (`), , To Office expenses (2017-18), , 6,000, , To Subscriptions to, , Income, By Subscriptions, , Amount, (`), 17,600, , (2017-18), , newspapers and journals, , 2,000, , (+) Subscriptions 2017-18 1,000, , To Refreshment expenses, , 4,000, , (+) O/s, , 1,000, , By Rent, , 4,000, , To Salary, , Cr., , 4,400, , 19,600, , 4,800, , (–) O/s Rent, , To Interest payable, , 2,400, , By Income from Drama, , 6,000, , To Depreciation on building, , 5,000, , By Sale of Newspapers, , 400, , To Surplus, , 5,400, , (+) O/s, , 400, , Total, , 400, , 29,600, , Total, , 3,600, , 29,600, , Balance Sheet as on March 31, 2018, Liabilities, , Amount, (`), , Capital Fund, , Assets, Buildings, , Opening Balance, , 61,000, , (+) Entrance fees, , 4,000, , (+) Surplus, , 5,400, , Bank loan, , 20,000, , (–) Repaid, , 8,000, , Salary O/s, , (–) Depreciation, Furniture, 70,400, 12,000, , Amount, (`), 64,000, 5,000, , 59,000, 12,000, , Cash in hand, , 6,000, , Investments, , 10,000, , O/s subscriptions, , 1,000, , 400, , Interest payable, , 2,400, , Subscription received, in advance (2018-19), , 2,800, Total, , 88,000, , Total, , 88,000

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Sulalitha - Accountancy, , 7., , 13, , From the following Receipt and Payment Account and information given, below, prepare Income and Expenditure Account and the Balance Sheet of, Adult Literacy Organisation as on March 31, 2018., , Dr., , Receipt and Payment Account for the year ending on 31.03.2018, Receipts, , Amount, (`), , To Balance b/d, , 19,550, , To subscriptions, 2017-18, , 27,700, , 2018-19, , 500, , To Sale of old newspaper, , 28,200, 800, , To Govt. grant, To Sale of Furniture, , By General Expenses, , 3,200, , By News papers, , 1,850, , By Electricity, , 3,000, , By Fixed deposit with bank, , 18,000, , (on 30-06-2017) @10% p.a., By Books, , 7,000, , 3,700, , By Salary, , 3,600, , By Rent, , 6,500, , 900, , Fixed Deposits, Total, , Amount, (`), , 12,000, , (book value Rs. 5,000), To Interest received on, , Payments, , Cr., , By Postage charges, , 300, , By Furniture (purchased), , 10,500, , By Balance c/d, , 11,200, , 65,150, , Total, , 65,150, , Additional Information:, i), , Subscription outstanding on 31-03-2018 Rs. 1,500, , ii), , On March 31, 2018 Salary outstanding Rs. 600, , iii), , On April 1, 2017, Organisation owned Furniture Rs. 12,000, Books Rs. 5,000, Adult Literacy Organisation, , Ans:, , Opening Balance Sheet as on 1.4.2017, Liabilities, , Amount, (`), , Capital Fund, , Assets, , Amount, (`), , Furniture, , (Balancing figure), , 36,550, , 12,000, , Books, , 5,000, , Cash/Bank, Total, , 19,550, , 36,550, , Total, , 36,550, , Adult Literacy Organisation, Dr., , Income and Expenditure Account for the year ending 31st March, 2018 Cr., Expenditure, , Amount, (`), , Income, , Amount, (`), , To General Expenses, , 3,200, , By Subscriptions (2917-18)27,700, , To Newspaper, , 1,850, , (+) O/s (C.Y.), , 1,500, , 29,200

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14, , Sulalitha - Accountancy, , To Electricity, , 3,000, , To Salary, , 3,600, , (+) O/S, , 600, , To Rent, To Postage Charges, , 800, , By Govt. grant, 4,200, , By Interest received, , 6,500, , on Fixed deposit, , 300, , To Loss on sale of old furniture, , By Sale of old newspapers, , 1,300, , (+) O/s Interest, , 12,000, 900, 450, , 1,350, , Total, , 43,350, , 10, 9, , , ,  900 , 18,000 , 100 12, , , , (Rs. 5,000–Rs. 3,700), To Surplus, , 23,000, Total, , 43,350, , Balance Sheet as on March 31, 2018, Liabilities, , Amount, (`), , Capital Fund, , 36,550, , (+) Surplus, , 23,000, , Subscriptions recd., , Assets, Furniture, , 59,550, , 12,000, , (–) Book value sold, , 500, , in advance for 2018-19, 600, , 31.03.2018, , 5,000, 7,000, , (+) purchases, , Salary outstanding on, , Amount, (`), , 10,500, , Books, , 5,000, , (+) purchases, , 7,000, , 11,200, , Fixed Deposit, , 18,000, 450, , O/s Subscription on 31.3.2018, , 8., , 12,000, , Cash, O/s Interest on F.D., Total, , 17,500, , 60,650, , Total, , 1,500, 60,650, , Receipt and Payment account of Shankar Sports Club, is given below for the, year ended March 31, 2018., Receipts, , Amount, (`), , Payments, , To Cash in hand, , 2,600, , By Rent, , To Entrance fees, , 3,200, , By Usages, , To Donation for Building, , 23,000, , Amount, (`), 18,000, 7,000, , By Billiard Table, , 14,000, 10,000, , To Locker rent, , 1,200, , By Furniture, , To Life membership fees, , 7,000, , By Interest, , 2,000, , To Profit from Entertainment, , 3,000, , By Postage, , 1,000, , To Subscription, , 40,000, , By Salary, , 24,000, , By Cash in hand, Total, , 80,000, , 4,000, Total, , 80,000

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Sulalitha - Accountancy, , 15, , Prepare Income and Expenditure Account and Balance sheet with the help of the, following information :, Subscription outstanding on March 31, 2017 is Rs. 1,200 and Rs. 2,300 on March 31,, 2018, opening stock of postage stamps's is Rs. 300 and Closing stock is Rs. 200, Rent, Rs. 1,500 related 2016-17 and Rs. 1,500 is still unpaid on April 1, 2017 the club owned, furniture Rs. 15,000, furniture value at Rs. 22,500 on March 31, 2018. The club took, a loan of Rs. 20,000 @ 10% p.a. during the year 2016-17., Shankar Sports Club, , Ans:, , Opening Balance Sheet as on 1.4.2017 (31st March, 2017), Liabilities, , Amount, (`), , Rent unpaid, , 1,500, , Loan @ 10% p.a., , 20,000, , Assets, , Amount, (`), , Cash in hand, , 2,600, , Subscriptions O/s (31.3.2017), , 1,200, , Stock of postage, stamps, , 300, , Furniture, , 15,000, , Capital fund (deficiency), Total, , Dr., , 2,400, , 21,500, , Total, , Income and Expenditure Account for the year ending 31.3.2018, Expenditure, To Rent, (–) O/s (P.Y.), , Amount, (`), 18,000, 1,500, 16,500, , (+) O.S. (C.Y.), , 1,500, , 18,000, , To Usages, , 7,000, , To Interest, , 2,000, , To Postage, (+) Op. stock, , 1,000, 300, , 200, , To salary, , Cr., Amount, (`), , By Entrance fees, , 3,200, , By Locker rent, , 1,200, , By Profit from Entertainment, , 3,000, , By Subscription, , 40,000, , (–) O/s (P.Y.), , 1,200, 38,800, , (+) O/s (C.Y.), , 2,300, , 41,100, , By deficit (Excess of, , 1,300, (–) Cl. stock, , Income, , 21,500, , expenditure over Income), , 600, , 1,100, 24,000, , To Depn. on Furniture, (15,000+10,000+22,500), , 2,500, Total, , 54,600, , Total, , 54,600

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16, , Sulalitha - Accountancy, , Balance Sheet as on 31st March, 2018, Liabilities, , Amount, (`), , Assets, , Loan @ 10% p.a., , 20,000, , Cah in hand (31.3.2018), , Donation for building, , 23,000, , Furniture, , Rent unpaid (31.3.2018), , 1,500, , Amount, (`), 4,000, 22,500, , O/s Subscription (C.Y.), , 2,300, , Closing stock of postage stamps, Billiard Table, , 200, 14,000, , Capital fund (Dr. balance) 2,400, (+) Deficit, , 6,100, 8,500, , Total, , 9., , (–) Life membership fees 7,000, , 1,500, , Total, , 44,500, , 44,500, , Sun Club, Dharwad was started from 1.4.2015. Its receipts and payments, account for the year ending 31.3.2016 was as follows., (March, 2017), Receipts, , Amount, (`), , Payments, , Amount, (`), , To Subscription, , 70,000, , By Salry, , 26,500, , To Interest, , 11,000, , By Tournament expenses, , 20,000, , To Tournament fund, , 30,000, , By Telephone charges, , To Games fees, , 25,000, , By Games expenses, , 10,000, , To Life membership fees, , 40,000, , By Sports material, , 20,000, , 6,500, , To Donation, , 2,00,000, , By Buildings, , 2,00,000, , To Entrance fees, , 1,00,000, , By Furniture, , 30,000, , By Office expenses, , 10,000, , By Investments, , 1,00,000, , By Balance c/d, Total 4,76,000, , 53,000, Total 4,76,000, , Adjustments:, a) Outstanding salaries - Rs. 2,000., b) Donations and entrance fees are capitalised., c) Sports materials on 31.3.2016 were valued at Rs. 8,500., d) Depriciate building and furniture by 10%., e) O/s subscription Rs. 5,000 and subscription received in advance Rs. 3,000., Prepare :, i) Income and Expenditure Account., ii) Balance sheet.

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Sulalitha - Accountancy, , 17, , Sun Club, Dharwad, Dr., , Income and Expenditure Account for the year ending 31st March, 2016 Cr., Expenditure, , Amount, (`), , To Salary, , 26,500, , (+) O/s, , 2,000, , To Telephone charges, , Income, By subscription, , 28,500, , (+) O/s (C.Y.), , 6,500, , Amount, (`), 70,000, 5,000, 75,000, , To Games expenses, , 10,000, , (–) received in advance, , To Office expenses, , 10,000, , By Interest, , 11,000, , By Games fees, , 25,000, , To Depreciation @ 10%, , 10, 100, , 20,000, , 10, 100, , 3,000, , Building - 2,00,000 , Furniture - 30,000 , Sports materials, , 3,000, , 72,000, , 11,500, , (20,000 – 8,500), To Surplus, , 18,500, Total 1,08,000, , Total 1,08,000, , Balance Sheet as on 31.3.2016, Liabilities, , Amount, (`), , Capital Fund, Opening Balance, , -, , Assets, , Amount, (`), , Sports material, , 20,000, , (–) Depreciation, , 11,500, , (+) Surplus, , 18,500, , Building, , (+) Life membership, , 40,000, , (–) Depreciation, , 20,000, 30,000, , (+) Donation, , 2,00,000, , Furniture, , (+) Entrance fees, , 1,00,000 3,58,500, , (–) Depreciation, , Tournament fund, , 30,000, , (–) Tournament exp., , 20,000, , O/s Subscription, 10,000, , Cash in hand, , O/s Salaries, , 2,000, , Investments, , Subscriptions recd. in adv., , 3,000, , Total 3,73,000, , 8,500, , 2,00,000, , 3,000, , 1,80,000, , 27,000, 5,000, 53,000, 1,00,000, , Total 3,73,000

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18, , Sulalitha - Accountancy, , Chapter-2, , Accountancy for Partnership: Basic Concepts, , SECTION-A : ONE MARK QUESTIONS, 1., , Section _________ of Indian Partnership Act, 1932 difines Partnership., , Ans: 4., 2., , A partnership has no separate __________ entity., , Ans: Legal, 3., , Partnership is the result of _________ betwen two or more persons to do, business and share, , Ans: Agreement., 4., , In order to form a partnership there should be at least ___________ persons., , Ans: 2, 5., , The agreement should be to carry on some __________ business., , Ans: Lawfull., 6., , The liability of a partner for his acts is ____________ ., , Ans: Unlimited., 7., , Under ____________ method, the capitals of the partners shall remain fixed., , Ans: Fixed capital., 8., , Profit and Loss Appropriation Account is merely an extension of ____________, account of firm., , Ans: P & L A/c, 9., , The agreement between the partner should be in :, a) oral, , b) written, , c) oral or written, , d) None of the above., , Ans: c) Oral or written, 10., , Partnership deed contains:, a) Name of firm, , b) Name and address of the partners, , c) Profit and loss sharing ratio, , d) All of the above, , Ans: d) All of the above.

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Sulalitha - Accountancy, , 11., , 19, , When varying amounts are withdrawn at different intervals, the interest is, calculated using ________________ ., a) Simple method, , b) Average method, , c) Product method, , d) None of the above, , Ans: c) Product method., 12., , In order to form a partnership there should be atleast :, a) one person, , b) two persons, , c) seven persons, , d) None of the above, , Ans: b) Two persons., 13., , The business of a partnership concern may be carried on by :, a) All the partners, , b) Any of them acting for all, , c) All the partners or any of them acting for all. d) None of the above., Ans: c) All the partners or any of them acting for all., 14., , The agreement between partners must be to share:, a) Profits, , b) Losses, , c) Profit and Losses, , d) None of the above, , Ans: c) Profits and losses, 15., , The liability of a partner for acts of the firm is :, a) Limited, , b) Unlimited, , c) Both of the above, , d) None of the above, , Ans: b) Unlimited, 16., , The agreement between partners must be in writing: True/False., , Ans: False, 17., , If the partnership deed is silent about the profit sharing ratio, the profit and, loss of the firm is to be shared equally. True/False, , Ans: True, 18., , In the observe of partnership deed, no partner is entitled to get salary or, commission. True/False., , Ans: True, 19., , P/L Appropriation A/c shows how the profits are appropriated among the, partners: True/ False., , Ans: True., 20., , Interest on partners capital is debited to partner's capital account: True/, False., , Ans: False., 21., , State any one feature of partnership firm., , Ans: i) Two or more persons;, 22., , ii) Agreement or any one., , What is the minimum number of partners in the firm ?, , Ans: The minimum number of partners in partnership firm is two.

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20, , Sulalitha - Accountancy, , 23., , Name any one contents of partnership deed., , Ans: i) Name of the firm ;, 24., , Name any one method of maintaining capital accounts of partners., , Ans: i) Fixed capital method, 25., , ii) Nature of business or any oen., , ii) Fluctuating capital method, , Why the profit and loss appropriation account is prepared?, , Ans: P and L appropriation account is prepared to show how net profit is distributed, among the partner., , SECTION-B: TWO MARK QUESTIONS, 1., , What is partnership ?, , Ans: The partnership is an association of two or more persons who agree to carry on a, legal business jointly and share the profits or losses from that business in an agreed, ratio., 2., , Define partnership?, , Ans: Under section A of Indian partnership Act, 1932 defines partnership as, "the relation, beteen persons who have agreed to share the profits and losses of a business carried, on by all or any of them acting for all.", 3., , State any two features of partnership., , Ans: i) Two or more persons, ii) An agreement, iii) Sharing of profit (any two), 4., , What is partnership deed?, , Ans: When the partnership agreement is written and signed by all the partners and is, duly stamped according to the stamp act. It is called, 'partnership deed.', 5., , Name any two contents of the partnership deed?, , Ans: i) Name of the firm, ii) Profit and loss sharing ratio, iii) Capital contribution by partners., 6., , (any two.), , What are the methods of maintaining capital account of partners?, , Ans: i) Fixed capital method, ii) Fluctuating capital method, 7., , What is fixed capital method?, , Ans: Fixed capital method is the method under which the capitals of the partners shall, remain fixed (same) year after year. It will change only when additonal capital is, introduced or a part of capital is withdrawn., 8., , What is fluctuating capital method?, , Ans: Fluctuating capital method is a method under which the capitals of the partners, fluctuate (change) from year to year under this method only one account i.e., capital, account is maintained for each partner.

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Sulalitha - Accountancy, , 9., , 21, , Name any two methods for calculation of Interest on drawings?, , Ans: i) Average period method; ii) Product method, 10., , What do you mean by profit and loss appropriation account?, , Ans: P & L appropriation account is a special account that a firm prepares to show the, distribution of profits and losses among the partners., , PROBLEMS on Preparation of P & L Appropriation Account (6 Marks), Proforma of P & L Appropriation A/c, Dr., , Profit and Loss Appropriation A/c, , Particulars, , Amount, (`), , Particulars, , Cr., Amount, (`), , To Profit and Loss A/c, (Net loss b/d), , xxx, , By Profit and Loss A/c, (Net profit c/d), , xxx, , To Interest on Capital A/c, , xxx, , By Interest on Drawings A/c, , xxx, , To Partner's Salary/Commission A/c, , xxx, , By Partner's Capital/current A/c, , xxx, , To Partner's Capital /Current A/c, , xxx, , (Distribution of losses), , (Distribution of Profits), xxxx, , 1., , xxxx, , Mithun and Nithin are equal partners with captals of Rs. 1,80,000 and Rs., 1,40,000 rspectively on 01-04-2012. The partnership deed provided for, interest on capital at 5% per annum. Interest on drawings being: Mithun Rs., 540 and Nithin Rs. 360 and annual commission of Rs. 8,000 to Mithun. During, the year Mithun withdrew Rs. 18,000 and Nithin Rs. 12,000 for their private, use., The profit before adjustment of interest on capital, interest on drawings and, Mithun's commission was Rs. 42,100 for the year., Prepare the profit and loss appropriation account for the year ending 31st, March, 2013., , Soln:, Dr. Profit and Loss Appropriation A/c for the year ended 31st March, 2013 Cr., Particulars, , Amount, (`), , To Interest on Capital A/c, Mithun 1,80,000 , Nithin 1,40,000 , , 5, 100, , 5, 100, , Particulars, By Profit and Loss A/c (Profit), , 9,000, 7,000, , Amount, (`), 42,100

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22, , Sulalitha - Accountancy, , To Mithun's commission A/c, To Partner's capital A/c, , 8,000, 19,000, , (Net profit transferred), Mithun 19,000 , Nithin 19,000 , , 1, 2, , 1, 2, , Mithun, , 540, , Nithin, , 360, , 900, , Total, , 43,000, , 9,500, 9,500, Total, , 2., , By Interest on drawings A/c, , 43,000, , Uma and Suma started a partnership business on 1st April, 2013 with capitals, of Rs. 1,00,000 and Rs. 60,000 respectively. They agreed to share the profits, and losses in their capital ratio. It was agreed to allow interest on capitals at, 10% per annum. Suma is allowed monthly salary of Rs. 750 and Uma an annual, commission of Rs. 7,000. During the year Uma withdrew Rs. 12,000 and Suma, Rs. 16,000 and respective interest on drawings amounted to Rs. 600 and Rs., 800. The profit of the firm for the year ending before charging the above, adjustments Rs. 38,600., Show the P and L Appropriation A/c for the year ending 31st March, 2014., , Soln:, Dr. Profit and Loss Appropriation A/c for the year ended 31st March, 2013 Cr., Particulars, , Amount, (`), , To Interest on Capital A/c, Uma 1,00,000 , Suma 60,000 , , 10, 100, , Particulars, , Amount, (`), , By Profit and Loss A/c (Profit), , 38,600, , 10,000, , 10, 100, , 60,000, , By Interest on drawings A/c, , To Suma's Salary A/c (750  12), , 9,000, , Uma, , 600, , To Uma's commission A/c, , 7,000, , Suma, , 800, , 1400, , To Partner's capital A/c, , 8,000, , Total, , 40,000, , (Net profit transferred), Uma 8,000 , , 5, 8, , 5,000, , Suma 8,000 , , 3, 8, , 3,000, Total, , 40,000

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Sulalitha - Accountancy, , 3., , 23, , Vinay and Vidya are partners sharing profits and losses in the ratio of 6:4., Their capitals on 1.04.2012 is Rs. 2,00,000 and Rs. 1,00,000 respectively. They, made profit for the year ended Rs. 89,400 before making the following, adjustments., a) Interest on capital at 8% p.a., b) Allowed Salary Rs. 1,000 p.m. to each partner., c) Their drawings during the year Rs. 20,000 and Rs. 15,000 respectively., d) Interest on drawings amounted to Rs. 2,000 and Rs. 1,800 respectively., Prepare profit and loss appropriation account for the year ended, 31st March, 2013., , Soln., Dr. Profit and Loss Appropriation A/c for the year ended 31st March, 2013 Cr., Particulars, , Amount, (`), , To Interest on Capital A/c, , Particulars, , Amount, (`), , By Profit and Loss A/c (Profit), , Vinay - 2,00,000 , , 8, =16,000, 100, , Vidya - 1,00,000 , , 8, = 8,000, 100, , 24,000, , Vinay, , 2,000, , To Salary to Vinay (1000  12), , 12,000, , Vidya, , 1,800, , To Salary to Vidhya (1000  12), , 12,000, , To Partner's capital A/c, , 45,200, , 89,400, , By Interest on drawings A/c, , (Net profit transferred), Vinay - 45,200 , , 6, = 27,120, 10, , Vidhya - 45,200 , , 4, = 18,080, 10, Total, , 4., , 93,200, , Total, , 93,200, , Arun and Varun are the partners sharing profits and losses in the ratio of, 2:1. Their opening capital being Rs. 80,000 and Rs. 50,000 respectively. They, earned a profit of Rs. 20,000 before allowing the followings:, i) Interest on capital @ 8% P.A., ii) Interest on drawings: Arun Rs. 2,000, Varun Rs. 2,500, iii) Salary to Arun Rs. 3,000 p.a., iv) Commission to Varun Rs. 2,000 p.a.

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24, , Sulalitha - Accountancy, , Dr., , Profit and Loss Appropriation Account, Particulars, , Amount, (`), , To Partner's Capital A/c, , 8, = 6,400, 100, 8, Varun - 50,000 , = 4,000, 100, To Salary to Arun, , Particulars, , Amount, (`), , By Profit and Loss A/c (Profit), , Arun - 80,000 , , To Commission to Varun, , Cr., , 20,000, , By Interest on drawings A/c, 10,400, , Arun, , 2,000, , 3,000, , Varun, , 2,500, , 4,500, , Total, , 24,500, , 2,000, , To Partner's capital A/c, (Net profit transferred), , 2, = 6,067, 3, 1, Varun - 9,100  = 3,033, 3, Total, Arun - 9,100 , , 5., , 9,100, 24,500, , X and Y are partners commenced partnership business on 01-04-2019, sharing, profits and losses in 3:2 ratio with capitals of Rs. 1,00,000 and 80,000, respectively. They earned profits of Rs. 75,000 for the year before allowings., a), b), c), d), , Interest on capitals @ 10% p.a., Interest on drawings: X- Rs. 1,000 and Y Rs. 800., Commission payable to X Rs. 2,000 per month., Salary payable to Y Rs. 3,000 per month., , Prepare P and L Appropriation A/c for the year ending 31-03-2020., Soln., Dr., , Profit and Loss Appropriation A/c for the year ended 31.03.2020, Particulars, , Amount, (`), , To Interest on Capital A/c, 10, X - 1,00,000 , = 10,000, 100, 10, Y - 80,000 , = 8,000, 100, To Commission to X-(2000  12), To Salary to Y (3000  12), , Total, , Particulars, , Cr., Amount, (`), , By Profit and Loss A/c (Profit), , 75,000, , By Interest on drawings A/c, 18,000, , X-, , 1,000, , 24,000, , Y-, , 800, , 36,000, , By Loss transferred to, Partner's capital a/c, 3, X - 1200  = 720, 5, 2, Y - 1200  = 480, 5, , 78,000, , 1,800, 1,200, , Total, , 78,000

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Sulalitha - Accountancy, , 6., , 25, , Sachin and Pratham, Rs. 1,00,000 and Rs., profits and losses in, earned the profits of, , commenced business in partnership with capital and, 80,000 respectively on 01-04-2018 agreeing to share, the ratio of 3:2 for the year ending 31-03-2019. They, Rs. 36,000 before allowing:, , a), , Interest on capital at 5% p.a., , b), , Interest on drawings: Sachin Rs. 600 and Pratham Rs. 1,000., , c), , Yearly Salary of Pratham Rs. 10,000., , d) Their drawings during year Sachin Rs. 16,000 and Pratham Rs. 20,000., Prepare P and L Appropriation A/c., Soln., Dr., , Profit and Loss Appropriation A/c for the year ended 31.03.2019, Particulars, , Amount, (`), , To Interest on Capital A/c, Sachin -, , 1,00,000 , , Pratham - 80,000 , , 5, =, 100, , 5,000, , 5, 100, , 4,000, , =, , To Pratham's Salary, , Particulars, , Cr., Amount, (`), , By Profit and Loss A/c (Profit), , 36,000, , By Interest on drawings A/c, 9,000, , Sachin -, , 10,000, , Pratham, , 600, 1,000, , 1,600, , Total, , 37,600, , To Net profit to Partner's, Capital A/c, Sachin - 18,600 , , 3, = 11,160, 5, , Pratham - 18,600 , , 2, = 7,440, 5, Total, , 18,600, 37,600, , DIFFERENT METHODS of calculating Interest on partner's drawings, I Direct Method or Specific Period Method/ Average Period Method, 1., , Prema is a partner in a firm. She withdrew Rs. 3,000 in the beginning (first), of each month for 12 months. The books of the firm are closed on March,, 31st every year., Calculate interest on drawings if the rate of interest is 10% p.a., , Soln: Calculation of interest on drawings of Prema:, Interest on drawing = Total drawings  Rate ×, Total drawings, , =, , 3000  12 = Rs. 36,000, , Average period, 12

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26, , Sulalitha - Accountancy, , Average period, , =, , ,  Interest on drawings , , , , , , , Longest period  Shortest period, 2, 12  1, 1,  6 months, 2, 2, 61, 10, 36000 ,  2, 100, 12, 1, 13, 36000 , ,  12, 10, 2, 1, 13, 1, 36000 , , , 10, 2, 12, 1, 13, 36000 , , 10, 24, 13, 36000 , 240, ,  Interest on drawings = Rs. 1,950., , 2., , Mr. Mahohar withdrew Rs. 2,000 in the middle of each month. The, partnership deed provider for charging the interest on drawings @ Rs. 12%, p.a. Calculate interest on Manohar's drawings for the year ending 31st, December, 2017., , Soln: Calculation on Interest on Drawings of Mr. Manohar., Interest on drawing, , = Total drawings  Rate ×, , Average period, 12, , Total drawings, , =, , 2000  12 = Rs. 24,000, , Average period, , =, , Longest period  Shortest period, 2, , , , 11 12  12, 12, ,  6 months, 2, 2, ,  Interest on drawings  24000  12  6, 100, 12,  Rs.1,440, , 3., , Hemanth withdrew Rs. 2,500 at the end of each month. The partnership deed, provids for charging interest on drawings @ 12% p.a. Calculate interest of, Hemanth's drawings for the year ending 31st December, 2018., , Soln: Calculation of interest on drawings of Hemanth., Interest on drawing =, , Total drawings  Rate ×, , Average period, 12, , Total drawings, , =, , 2500  12 months = Rs. 30,000, , Average period, , =, , Longest period  Shortest period, 2, , , , 11  0, 1,  5 months, 2, 2

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Sulalitha - Accountancy, , 27, , 51, 12,  2, 100, 12, 12, 11,  30000 , ,  12, 100, 2, 12, 11, 1,  30000 , , , 100, 12, 12, ,  Interest on drawings  30000 , ,  Interest on drawings of Hemanth = Rs. 1,650, , II Problems under Product Method:, 4., , Sahana and Saniya are partners in a firm. Sohana's drawings for the year, 2018-19 are given as under :, Rs. 4,000 on 01.06.2018, Rs. 6,000 on 30.09.2018, Rs. 2,000 on 31.11.2018, Rs. 3,000 on 01.01.2019, Calculate the interest on drawings at 8% p.a. for the year ending on 31.03.2019, under product method., , Soln: Calculation of interest on drawings (under Product Method):, Date (1), , Amount (2), , Period (3), , Product (4), 23, , 01.06.2018, , 4,000, , 10, , 40,000, , 30.09.2018, , 6,000, , 06, , 36,000, , 30.11.2018, , 2,000, , 04, , 8,000, , 01.01.2019, , 3,000, , 03, , 9,000, , Total product, Interest on Drawings, , 93,000, ,  Total product  Rate , , 1, 12, , 8, 1, , 100, 12,  Interest on drawings of Sahana = Rs. 620,  93,000 , , 5., , Radha and Ravi are the partners in a firm. Radha's drawings for the year, 2015-16 are given as under :, Rs. 5,000 on 01.04.2015, Rs. 8,000 on 30.06.2015, Rs. 3,000 on 01.12.2015, Rs. 2,000 on 31.03.2016, Calculte the interest on Radha's drawings at 10% p.a. for the year ending, 31.03.2016 under product method.

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28, , Sulalitha - Accountancy, , Soln: Calculation of Interest on Radha's drawing under product method., Date, (1), , Amount, (2), , Period in, months (3), , Product (4), 23, , 01.04.2015, , 5,000, , 12, , 60,000, , 30.06.2015, , 8,000, , 09, , 72,000, , 01.12.2015, , 3,000, , 04, , 12,000, , 31.03.2016, , 2,000, , 00, , 00000, , Total product, Interest on Drawings, , 1,44,000, ,  Total product  Rate , , 1, 12, , 10, 1, , 100, 12,  Interest on drawings of Radha = Rs. 1,200.,  1,44,000 , , 6., , Yashasvi and Tapasvi are partners in a firm. During the year ended on 31st, March, 2020. Yashasvi makes the drawings as under:, Date of drawings, , Amount (in Rs.), , 01.08.2019, , 5,000, , 31.10.2019, , 8,000, , 31.12.2019, , 10,000, , 31.03.2020, , 15,000, , Partnership Deed provided that partners are to be charged interest on, drawings @ 12% p.a. Calculate the interest on drawings of Yashasvi under, product method., Soln: Calculation of Interest on Yashasvi's drawings under product method:, Date, (1), , Amount, (2), , Period in, months (3), , Product (4), 23, , 01.08.2019, , 5,000, , 8, , 40,000, , 31.10.2019, , 8,000, , 6, , 40,000, , 31.12.2019, , 10,000, , 3, , 30,000, , 31.03.2020, , 15,000, , 0, , 00000, , Total product, Interest on Drawings, , 1,10,000, ,  Total product  Rate , , 12, 1, , 100, 12,  Interest on drawings of Yashasvi = Rs. 1,100.,  1,10,000 , , 1, 12

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Sulalitha - Accountancy, , 29, , PRACTICAL ORIENTED QUESTIONS, 1., , How do you treat the following in the absence of partnership deed., a) Profit Sharing Ratio, b) Interest on Capital, c) Interest on Drawings, d) Interest on Partner's Loans and Advances, e) Partner's Salary/Commission., , Ans: a) Equal share, b) No Interest on Capital, c) No Interest on Drawings, d) 6% Interest on Loans and Advances, e) No any Salary/Commission to any partner., 2., , Write two partner's capital A/c under fluctuating capital system with 5, imaginary figures :, , Ans:, , Partner's Capital Accounts (Under Fluctuating Capital System), , Dr., , Cr., Particulars, To Drawings A/c, To Int. on Drawings, To Balance c/d, , Ram, (`), , Rahim, (`), , 10,000, , 10,000, , 1,000, , 1,000, , 1,29,000 1,19,000, , Particulars, , Ram, (`), , Rahim, (`), , 1,00,000, , 1,00,000, , By Int. on Capital A/c, , 10,000, , 10,000, , By Ram's Salary A/c, , 10,000, , –––_, , By P & L Appro. A/c, , 20,000, , 20,000, , By Balance b/d, , 1,40,000 1,30,000, , 1,40,000 1,30,000, By Balance b/d, , 3., , 1,29,000 1,19,000, , Prepare two partner's current a/c under fixed capital system with 5 imaginary, figures., Partner's Current Account, , Ans:, Dr., Particulars, To Drawings A/c, To Int. on Drawings, To Balance c/d, , Giri, (`), , Hari, (`), , 10,000, , 10,000, , 1,000, , 1,000, , 29,000, , 29,000, , 40,000, , 30,000, , Giri, (`), , Cr., Hari, (`), , By Int. on Capital A/c, , 10,000, , 10,000, , By Giri's Commission, , 10,000, , –––_, , By P & L Appro. A/c, , 20,000, , 20,000, , 40,000, , 30,000, , 29,000, , 29,000, , Particulars, , By Balance b/d

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30, , Sulalitha - Accountancy, , 4., , Prepare P and L Appropriation A/c of the firm with 5 imaginary figures., , Ans:, Dr., , Profit and Loss Appropriation Account, Particulars, , Amount, (`), , Cr., , Particulars, , Amount, (`), , To Int. on Capital A/c, , By Profit and Loss A/c (N/P b/d), , Sahana - 1,00,000  10 = 10,000, , By Int. on Drawings, , 100, , Saniya - 1,00,000 , , 10, = 10,000, 100, , 20,000, , Sahana, , 1,000, , To Sahana's Salary A/c, , 10,000, , Saniya, , 1,000, , To Saniya's Commission A/c, , 10,000, , 98,000, , 2,000, , To Partner's capital A/c, Sahana - 60,000 , Saniya - 60,000 , , 1 = 8,000, 2, , 1 = 8,000, 60,000, 2, Total 1,00,000, , * * *, , Total 1,00,000

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Sulalitha - Accountancy, , 31, , Chapter-3, , Reconstitution of a Partnership Firm, Admission of a Partner, SECTION-A:, 1., , ONE MARK QUESTIONS, , _________ ratio is used to distribute accumulated profits and losses at the, time of admission of a new partner., , Ans: Old Ratio, 2., , Goodwill brought in by new partner in cash is to be distributed among old, partners in _______ ratio., , Ans: Sacrifice Ration., 3., , ___________ account is debited for the increase in the value of an asset., , Ans: Revaluation Account., 4., , Goodwill is an _________ asset., , Ans: Intangible Asset., 5., , At the time of admission of a new partner, general reserve oppearing in the, old balance sheet is transferred to :, a) All Partners Capital Account, b) New Partner's Capital Account, c) Old Partners Capital Account, d) None of the above, , Ans: c) Old Partners Capital Account., 6., , In the absence of an agreement to the contrary, it is implied that old partners, will contribute to new partner's share of profit in the ratio of :, a) Capital, , b) Old profit sharing ratio, , c) Sacrificing ratio d) Equally, , Ans: d) Equally, 7., , Goodwill raised in books at the time of admission of partner will be written, off in :, a) Old profit sharing ratio, b) New profit sharing ratio, c) Sacrificing ratio, d) None of the above, , Ans: b) New profit sharing ratio., 8., , Increase n the value of an asset is credited to Revaluation account. T/F., , Ans: True., 9., , The traditional name of 'Revaluation A/c' is 'Profit and Loss Adjustment A/c'., T/F., , Ans: True., 10., , Accumulated profit is transferred to all partner's capital accounts including, new partner. T/F, , Ans: False.

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32, , Sulalitha - Accountancy, , Adjustment of Capital, Sometime, at the time of admission, the partners agree that their capitals should also be, adjusted so as to be in proportionate to their profit sharing ratio. (This is done on the basis, of new partners capital and his share). On capital adjustment, if there is excess (surplus), in the capital account, the partner will withdraw the excess amount of capital and if there, is deficit (shortage), the partner will bring in the necessary amount to cover the shortage., Journal Entry: (When adjustments are made in cash), 1), , If there is deficit (shortage) :, Cash (or Bank) A/c, , Dr., , To Concerned Partner's Capital A/c, 2), , xxx, , ___, , ___, , xxx, , xxx, , ___, , ___, , xxx, , If there is surplus:, Concerned Partner's Capital A/c, , Dr., , To Cash (or Bank) A/c, , SECTION-D : 12 Marks Questions, 1., , A and B are partners sharing profits and losses in the ratio of 2 : 1. Their, Balance Sheet as on 31.3.2020 was as follows :, Balance Sheet as on 31.03.2020, Liabilities, , Amount, (`), , Assets, , Amount, (`), , Creditors, , 20,000, , Cash in hand, , Bills Payable, , 10,000, , Stock, , 15,000, , Reserve Fund, , 12,000, , Debtors, , 20,000, , Machinery, , 30,000, , Capitals:, , 5,000, , A, , 60,000, , Buildings, , 60,000, , B, , 40,000, , Investments, , 12,000, , Total 1,42,000, , Total 1,42,000, , On 01.04.2020, 'C' is admitted into partnership on the following conditions:, a) 'C' should bring in cash Rs. 25,000 as his capital and Rs. 15,000 goodwill for his, 1/5th share in future profits., b) Appreciate buildings at 20% and stock is revalued at Rs. 12,000, c) Provision for doubtful debts (PDD) maintained at 5% on debtors., d) Outstanding salary Rs. 2,000., Prepare : i) Revaluation Account., ii) Partner's Capital Account, and, iii) New Balance sheet of the firm.

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Sulalitha - Accountancy, , 33, , Soln.:, Dr., , Revaluation Account, Particulars, , Amount, (`), , To Stock (15,000 – 12,000), , Cr., Particulars, , 3,000, , Buildings, , PDD -  10  20,000 , , , , 1,000, ,  20, ,  60,000 , , 100, , , , O/s Salary, , 2,000, , Partner's Capital A/c, , 6,000, ,  5, , , , A - 6,000 , , 2, = 4,000, 3, , B - 6,000 , , 1, = 2,000, 3, Total, , Dr., , Amount, (`), 12,000, , 12,000, , Total, , 12,000, , Partners Capital A/cs, , Particulars, , A, (` ), , To 'A's Capital A/c, , ––, , B, (`), ––, , C, (`), 10,000, , 2, ,   15,000 , 5, , , To 'B's Capital A/c, , 5,000, , 1, ,   15,000 , 3, , , , Cr., , Particulars, By Balance b/d, , A, (` ), , B, (`), , C, (`), , 60,000, , 40,000, , ––, , By Revaluation A/c, , 4,000, , 2,000, , ––, , By Reserve Fund, , 8,000, , 4,000, , ––, , (Rs. 12,000 in 2:1 OR), , To Balance c/d, , 82,000, , 51,000, , 25,000, , By Cash A/c (or Bank), (25,000 + 15,000), By 'C's Capital A/c, , ––, 10,000, , –– 40,000, 5,000, , ––, , (Rs. 15,000 in 2:1 SR), Total, , 82,000 51,000, , Dr., , 40,000, , Total, , 82,000, , 51,000 40,000, , By Balance b/d, , 82,000, , 51,000 25,000, , Cash/Bank Account, Particulars, , Amount, (`), , To Balance b/d, , 5,000, , To C's Capital A/c, , Cr., Particulars, , Amount, (`), , By Balance c/d, , 45,000, , 40,000, , (25,000 + 15,000), Total, To Balance b/d, , 45,000, 45,000, , Total, , 45,000

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34, , Sulalitha - Accountancy, , New Balance Sheet as on 1.4.2018, Liabilities, , Amount, (`), , Assets, , Creditors, , 20,000, , Cash in Hand, , Bills payable, , 10,000, , (5,000 + 25,000 + 15,000), , Capitals:, , Stock, 82,000, , Less: Depreciation, , B, , 51,000, , (or written off), , C, , 25,000, , Debtors, , 2,000, , 45,000, , 15,000, , A, , Outstanding Salary, , Amount, (`), , 3,000, , 20,000, , Less: PDD, , 1,000, , Machinery, , 19,000, 30,000, , Buildings, , 60,000, , Add: Appreciation, , 12,000, , Investment, , 72,000, 12,000, , Total 1,90,000, , 2., , 12,000, , Total 1,90,000, , Suresh and Shankar are partners in a firm sharing profits and losses in the, ratio of 1 : 1. Their balance sheet as on 31.03.2017 was as follows:, Balance Sheet as on 31.03.2017, Liabilities, , Amount, (`), , Assets, , Amount, (`), , Creditors, , 40,000, , Cash at Bank, , 30,000, , Bills Payable, , 45,000, , Stock, , 25,000, , Reserve Fund, , 15,000, , Debtors, , Capitals:, , Less: PDD, , 40,000, 2,000, , 38,000, , Suresh, , 60,000, , Furniture, , 10,000, , Shankar, , 40,000 1,00,000, , Machinery, , 15,000, , Buildings, , 92,000, , Patents, , 20,000, , Profit and Loss A/c, , 30,000, Total 2,30,000, , Total 2,30,000, , On 01.04.2017, they admitted Jagadish as a new partner for 1/4th share in the future, profits on the following terms., a) Jagadish should bring in cash Rs. 50,000 as his capital and Rs. 25,000 towards, Goodwill., b) Depreciate Machinery by 10%.

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Sulalitha - Accountancy, , 35, , c) Increase provision for doubtful debts by Rs. 4000., d) Buildings are revalued at Rs. 1,20,500., Prepare : i) Revaluation Account., ii) Partner's Capital Account, and, iii) New Balance sheet of the firm., Soln.:, Dr., , Revaluation Account, Particulars, , Amount, (`), ,  10, , , , Cr., Particulars, , To Machinery  10  15,000 , , , , 1,500, , By Buildings, , To Provision for Doubtful Debts (PDD), , 4,000, , (1,20,500 – 92,000), , Amount, (`), 28,500, , To Profit transferred to, 1, Suresh -  , 2, , 11,500, , 1, Shankar -  , 2, , 11,500, , 23,000, , Total, , 28,500, , Dr., Particulars, , Suresh Shankar Jagadish, , (`), ––, , Particulars, , (`), ––, , 1, ,   25,000 , 2, , , 12,500 By Balance b/d, , 12,500 By Reserve Fund, , 1, ,   25,000 , 2, , , , Cr., Suresh Shankar Jagadish, , (` ), , By Revaluation A/c, , To Shankar Cap. A/c, , To Balance c/d, , 28,500, , Partners Capital A/cs, (` ), , To Suresh Cap. A/c, , Total, , (`), , (`), , 60,000 40,000, , ––, , 11,500 11,500, , ––, , 7,500, , 7,500, , ––, , 15,000 15,000, , ––, , (Rs. 15,000 in 1:1), 1,06,500, , 86,500, , 50,000 By Profit & Loss A/c, (30,000 in 1:1, By Bank A/c, , ––, , ––, , 75,000, , 12,500 12,500, , ––, , (50,000 + 25,000), By Jagadish Cap. A/c, (Rs. 25,000 1:1 SR), Total, , 1,06,500, , 86,500, , 75,000 Total, By Balance b/d, , 1,06,500, , 86,500, , 75,000, , 1,06,500 86,500, , 50,000

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36, , Sulalitha - Accountancy, , Balance Sheet of Suresh, Shankar and Jagadish as on 1.4.2017, Liabilities, , Amount, (`), , Assets, , Creditors, , 40,000, , Cash at Bank, , Bills payable, , 45,000, , (30,000 + 50,000 + 25,000), , Capitals:, , Amount, (`), 1,05,000, , (Opening bal. + Capital + Goodwill), , Suresh, , 1,06,500, , Stock, , Shankar, , 86,500, , Debtors, , Jagadish, , 50,000, , Less: PDD, , 25,000, 40,000, 6,000, , 34,000, , (2,000 + 4,000), Furniture, , 10,000, , Machinery, , 15,000, , Less: Depreciation, , 1,500, , Buildings, , 92,000, , Add: Appreciation, , 28,500, , Patents, , 1,20,500, 20,000, , Total 3,28,000, , 3., , 13,500, , Total 3,28,000, , Rajesh and Rakesh are partners in a firm sharing profits and losses in the, ratio of 3:2. Their balance sheet as on 31.03.2018 stood as follows :, Balance Sheet as on 31.03.2018, Liabilities, , Amount, (`), , Creditors, , 41,500, , General reserve, , 4,000, , Capitals Accounts :, , Assets, , Amount, (`), , Cash at Bank, , 22,500, , Bills Receivable, Debtors, , 3,000, 18,000, , Rajesh, , 30,000, , Less: PDD, , Rakesh, , 16,000, , Stock, , 20,000, , Buildings, , 25,000, , Machinery, , 4,000, , Total, , 91,500, , 1,000, , Total, , 17,000, , 91,500

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Sulalitha - Accountancy, , 37, , On 01.04.2018, they admit Shyam as a new partner and offered him 1/5th share in, the future profits on the following terms:, a) He has to bring Rs. 10,000 as his capital and Rs. 5,000 towards goodwill., b) Appreciate buildings by 20%., c) Maintain 5% PDD on debtors., d) Provide for outstanding repair bills Rs. 1,000., Prepare: i) Revaluation Account, ii) Partner's Capital Accounts and, iii) New Balance Sheet of the firm., Soln.:, Dr., , Revaluation Account, Particulars, , Amount, (`), , To Provision for, , 1,000, , Cr., Particulars, , Buildings, , O/s Repair bills, ,  20, ,  25,000 , , 100, , , , To Profit transferred to:, , PDD, , 3, , Rajesh -  5 ,  , 2, , Dr., Particulars, To Rajesh Cap. A/c, , 5,000, , 100, , ,  5, ,  18,000  , 1,000  ,  100, , , , 2,460, , Rakesh -  5 ,  , , Amount, (`), , 2,460, , 4,100, , Total, , 5,100, , Total, , 5,100, , Combined Partners Capital A/cs, Rajesh Rakesh Shyam Particulars, (` ), (`), (`), ––, , ––, , Cr., Rajesh Rakesh Shyam, (` ), (`), (`), , 3,000, , By Balance b/d, , 30,000, , 16,000, , ––, , 2,000, , By Revaluation, , 2,460, , 1,640, , ––, , 2,400, , 1,600, , ––, , 3, ,  5  5,000 , , , , To Rakesh Cap. A/c, 3, ,   5,000 , 5, , , To Balance c/d, , (Profit), 37,860 21,240 10,000, , General Reserve, (Rs. 4,000 in 3:2 OR), By Bank A.c, (1,000 + 5,000), By Shyam's Cap. A/c, (Rs. 5,000 in 3:2 SR), , Total, , 37,860 21,240 15,000, , Total, By Balance b/c, , ––, 3,000, , –– 15,000, 2,000, , ––, , 37,860 21,240 15,000, 37,860, , 21,240 10,000

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38, , Sulalitha - Accountancy, , New Balance Sheet as on 1.4.2018, Liabilities, , Amount, (`), , Creditors, , 41,500, , Capital Accounts:, , Assets, , Amount, (`), , Cash at Bank, , 37,500, , (22,500 + 10,000 + 5,000), , Rajesh, , 37,860, , Bills Receivable, , Rakesh, , 21,240, , Debtors, , Shyam, , 10,000, , Less: PDD, , Provision for O/s repair bills, , 1,000, , 3,000, 18,000, 900, , Stock, , 20,000, , Buildings, , 25,000, , Add: Appreciation, , 5,000, , Machinery, , 30,000, 4,000, , Total 1,11,600, , 4., , 17,100, , Total 1,11,600, , Sachin and Dravid are partners in a firm sharing profits and losses in the, ratio of 3:2. Their balance sheet is given below:, Balance Sheet as on 31.03.2017, Liabilities, , Amount, (`), , Assets, , Amount, (`), , Creditors, , 18,000, , Cash in hand, , 2,000, , Bills payable, , 12,000, , Cash at Bank, , 18,000, , Reserve Fund, , 3,000, , Sundry Debtors, , 25,000, , 20,000, , 2,000, , 23,000, , Capitals:, , Less: PDD, , Sachin - 50,000, , Stock, , 10,000, , Furniture, , 25,000, , Buildings, , 50,000, , Dravid - 50,000, , 1,00,000, , P & L Account, Total 1,33,000, , 5,000, Total 1,33,000, , On 01.04.2017, they admit Ashwin as a new partner into partnership on the following, terms :, a) He brings in Rs. 40,000 as capital and Rs. 18,000 towards goodwill for 1/4th share, in future profits.

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Sulalitha - Accountancy, , 39, , b) Depreciate furniture by 10% and buildings are revalued at Rs. 45,000, c) PDD is increased to Rs. 3,500, d) Prepaid insurance Rs. 2,000, Prepare: i), , Revaluation Account, , ii) Partner's Capital Accounts and, iii) New Balance Sheet as on 01.04.2017., Soln.:, Dr., , Revaluation Account, Particulars, , Amount, (`), , To Furniture, , 2,500, ,  10, ,  25,000 , , 100, , , , 5,000, , Dr., , 4,200, 2,800, , 7,000, , Total, , 9,000, , Partners Capital A/cs, Sachin Dravid Ashwin Particulars, (` ), (`), (`), 4,200, , 2,800, , ––, , ––, , ––, , ––, , 3, ,   18000 , 5, , , , Cr., Sachin Dravid Ashwin, (` ), (`), (`), , By Balance b/d, , 50,000, , 50,000, , ----, , By Reserve fund, (3,000 in 3 : 2), , 1,800, , 1,200, , ----, , By Bank A/c, , ––, , –– 58,000, , (40,000 + 18,000), ––, , –––, , –––, , 2, ,   18,000 , 5, , , Total, , 3, , Sachin  5 ,  , , 9,000, , To Profit & Loss A/c, (5,000 in 3 : 2), , To Balance c/, , 2,000, , 1,500, Total, , To Dravid Cap. A/c, , By Prepaid Insurance, , Dravid  5 ,  , , To PDD (3,500 – 2,000), , To Sachin's Cap. A/c, , Amount, (`), , 2, , (50,000 – 45,000), , To Revaluation, , Particulars, , By Loss transferred to :, , To Buildings, , Particulars, , Cr., , By Ashwin's Cap. A/c 10,800, , 7,200, , ––, , (18,000 in 3 : 2 SR), 55,400, , 53,600, , 40,000, , 62,600 58,400, , 58,000, , Total, , 62,600, , 58,400 58,000, , To Balance c/d, , 55,400, , 53,600 40,000

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40, , Sulalitha - Accountancy, , New Balance Sheet as on 1.4.2017, Liabilities, , Amount, (`), , Assets, , Amount, (`), , Creditors, , 18,000, , Cash at hand, , 60,000, , Bills payable, , 12,000, , Cash at Bank, , 18,000, , Sundry debtors, Capitals:, , Less:PDD (2,000+1,500), , Sachin, , 55,400, , Stock, , Dravid, , 53,600, , Furniture, , Ashwin, , 40,000 1,49,000, , Less: Depreciation, , 25,000, 3,500, , 10,000, 25,000, , Buildings, , 2,500, , 22,500, , 50,000, , Less: Depreciation, , 5,000, , Prepaid Insurance, Total 1,79,000, , 5., , 21,500, , 45,000, 2,000, , Total 1,79,000, , Surekha and Sunita are partners in a firm. Their Balance Sheet as on, 31.03.2017 was as follows :, Balance Sheet as on 31.03.2017, Liabilities, Creditors, , Amount, (`), 1,50,000, , General Reserve, , 50,000, , Assets, , Amount, (`), , Cash at Bank, , 50,000, , Stock, , 50,000, , Furniture, Capitals:, , 1,20,000, , Debtors, , Surekha, , 1,20,000, , Sunita, , 50,000, , 40,000, , Buildings, , 1,00,000, , Investments, , Total 4,00,000, , 40,000, Total 4,00,000, , On 01.04.2017, Kavita is admitted into the partnership on the following terms., a) She brings in Rs. 60,000 as capital and Rs. 20,000 towards Goodwill for 1/4th share, in the future profits., b) Depreciate furniture by 10% and appreciate building by Rs. 22,000., c) Investments are to be revalued at Rs. 50,000, d) Provide Rs. 2,000 for outstanding salary., Prepare: i), , Revaluation Account, , ii) Partner's Capital Accounts and, iii) New Balance Sheet of the firm.

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Sulalitha - Accountancy, , 41, , Soln.:, Dr., , Revaluation Account, Particulars, , Amount, (`), , To Furniture, , 12,000, ,  10, ,  1,20,000 , , 100, , , , To Salary outstanding, , 2,000, , Cr., Particulars, , Amount, (`), , By Buildings A/c, , 22,000, , By Investments, , 10,000, , (50,000 – 40,000), , To Profits transferred to, Surekha  1 , 2, , 9,000, ,  , , 1 , , Sunita  , 2, , 9,000, , 18,000, , Total, , 32,000, , Dr., , Total, , 32,000, , Partners Capital A/cs, , Particulars, To Surekha's, 1, , Surekha, (` ), , Sunita, (`), , ––, , Cr., , Kavita Particulars, (`), , Surekha, (` ), , Sunita Kavita, (`), (`), , ––, , 10,000 By Balance b/d, , 1,20,000, , 80,000, , ––, , ––, , ––, , 10,000 By Revaluation A/c, , 9,000, , 9,000, , ––, , 10,000, , 10,000, , –– By General Reserve, , 25,000, , 25,000, , ––, , , , Cap. A/c   20,000, 2, , To Sunita's Cap. A/c, 1, ,   20,000 , 2, , , To Bank A/c, (Goodwill amt., , (Rs. 50,000 in 1:1), , withdrawn), , By Bank A/c, , To Balance c/d, , 1,54,000 1,14,000, , ––, , –– 80,000, , 60,000 (60,000 + 20,000), By Kavitha's Cap. A/c, , 10,000, , 10,000, , ––, , (Rs. 20,000 in 1:1 SR), Total, , 1,64,0001,24,000 80,000 Total, To Balance c/d, , 1,64,000 1,24,000 80,000, 1,54,000 1,14,600 60,000

Page 43 :
42, , Sulalitha - Accountancy, , New Balance Sheet as on 1.4.2017, Liabilities, , Amount, (`), , Creditors, , 1,50,000, , Capitals:, , Assets, Cash at Bank, , 1,10,000, , (50,000 + 60,000+20,000–20,000), , Surekha, , 1,54,000, , Stock, , Sunitha, , 1,14,000, , Furniture, , Kavitha, , 60,000, , O/S Salary, , 2,000, , 50,000, 1,20,000, , Less: Depreciation, , 12,000, , Debtors, , 1,08,000, 40,000, , Buildings, , 1,00,000, , Add: Appreciation, , 22,000, , Investments, , 40,000, , Add: Appreciation, , 10,000, , Total 4,80,000, 6., , Amount, (`), , 1,22,000, , 50,000, , Total 4,80,000, , Raja and Rani are partners in a firm sharing profits and losses in the ratio of, 3:2. Their Balance Sheet as on 31.03.2018 was as follows :, Balance Sheet as on 31.03.2018, Liabilities, , Amount, (`), , Assets, , Amount, (`), , Creditors, , 40,000, , Cash, , Bills Payable, , 20,000, , Machinery, , 60,000, , General Reserve, , 25,000, , Stock, , 25,000, , Capitals Accounts :, , Debtors, , 5,000, , 23,000, , Raja, , 60,000, , Less: PDD, , Rani, , 40,000 1,00,000, , Buildings, , 50,000, , Investments, , 20,000, , P and L Account, Total 1,85,000, , 3,000, , 20,000, , 5,000, Total 1,85,000, , On 01.04.2018, they admitted Mantri as a partner and offer him 1/5th share in the, future profits on the following terms:, a) Mantri has to bring in Rs. 30,000 as his capital and Rs. 10,000 towards goodwill., Goodwill is to be withdrawn by the old partners.

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Sulalitha - Accountancy, , 43, , b) Depreciate Machinery by 5%., c) Appreciate buildings by 10%., d) PDD is reduced to Rs. 2,000 and investments are to be revalued at Rs. 25,000., Prepare: i), , Revaluation Account, , ii) Partner's Capital Account and, iii) New Balance Sheet of the firm., Soln.:, Dr., , Revaluation Account, Particulars, , Amount, (`), , To Machinery, , 3,000, , Cr., Particulars, , Amount, (`), , By Buildings, , 5,000, ,  10, ,  60,000 , ,  100, , ,  10, ,  50,000 , ,  100, , , To Profit transferred to:, , By PDD (3,000 – 2,000), , 1,000, , By Investments, , 5,000, , 3, , Raja -  5 ,  , , 4,800, , 2, , Rani -  5 ,  , , Dr., , 3,200, , 8,000, , Total, , 11,000, , Raja, (` ), , Rani, (`), , To P/L A/c, , 3,000, , 2,000, , (Rs. 5,000 in 3:2), , To Cash A/c, , ––, , ––, , Total, , –– By Balance b/c, , 6,000 By General Reserve, , 11,000, , Cr., Raja, (` ), , Rani Manthri, (`), (`), , 60,000 40,000, 4,800, , ––, , 3,200, , ––, , 15,000 10,000, , ––, , (Rs. 25,000 in 3:2), ––, , ––, , 6,000, , 4,000 By Cash A/c, , By Manthri's Cap. A/c, 76,800, , ––, , ––, , 40,000, , 6,000, , 4,000, , ––, , 85,800 57,200, , 40,000, , 76,800 51,200, , 30,000, , (30,000 + 10,000), , 2, ,  5  10,000 , , , , To Balance c/d, , Manthri Particulars, (`), , By Revaluation A/c, , 3, ,   10,000 , 5, , , To Rani's Cap. A/c, , Total, , Partners Capital A/c, , Particulars, , To Raja's Cap. A/c, , (25,000 – 20,000), , 51,200, , 85,800 57,200, , 30,000 (Rs. 10,000 in 3:2 SR), 40,000 Total, By Balance b/d

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44, , Sulalitha - Accountancy, , New Balance Sheet as on 1.4.2018, Liabilities, , Amount, (`), , Assets, , Creditors, , 40,000, , Cash, , Bills Payable, , 20,000, , (5,000+30,000+10,000–10,000), , Capital, , 35,000, , Machinery, , 60,000, , Raja, , 76,800, , Less: Depreciation, , Rani, , 51,200, , Stock, , Manthri, , 30,000, , Debtors, , 3,000, , 57,000, 25,000, , 23,000, , Less: PDD, , 2,000, , Buildings, , 21,000, , 50,000, , Add: Appreciation, Investments, Less: Appreciation, Total 2,18,000, , 7., , Amount, (`), , 5,000, , 55,000, , 20,000, 5,000, , 25,000, , Total 2,18,000, , A and B are partners in a firm sharing profits and losses in the ratio of 6:4., Their balance sheet as on 31.03.2017 was as follows :, Balance Sheet as on 31.03.2017, Liabilities, Creditors, , Amount, (`), 20,000, , Assets, , Amount, (`), , Cash in hand, , Bills payable, , 6,000, , Debtors, , Reserve Fund, , 4,000, , Less: PDD, , 5,000, 20,000, 2,000, , 18,000, , Capitals:, , Stock, , 17,000, , A - 40,000, , Buildings, , 30,000, , Furniture, , 30,000, , B - 30,000, , 70,000, Total 1,00,000, , Total 1,00,000, , On 01.04.2017, 'C' is admitted into the partnership on the following terms:, a) He brings Rs. 25,000 as capital and Rs. 8,000 towards goodwill for 1/6th share in, the future profits., b) Depreciate furniture at 10% and appreciate buildings by 20%., c) Provision for doubtful debts is no longer necessary.

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Sulalitha - Accountancy, , 45, , d) Provide Rs. 1,000 for repair charges., e) Goodwill is to be withdrawn by the old partners., Prepare: i), , Revaluation Account, , ii) Partner's Capital Account and, iii) New Balance Sheet of the firm after admission., Soln.:, Dr., , Revaluation Account, Particulars, , Amount, (`), , To Furniture, , 3,000, ,  10, ,  100  30,000 , , , , Cr., Particulars, , Amount, (`), , By Buildings, , 6,000, ,  20, ,  100  30,000 , , , , To Provision for repair, charges, , 4,000, , By PDD, , 2,000, , To Profit transferred to,  6 , , A -  10 ,  , , 2,400, ,  4 , , B -  10 ,  , , 1,600, , 4,000, , Total, , 8,000, , Dr., Particulars, To 'A's Cap. A/c, , Total, , 8,000, , Partners Capital A/c, A, (` ), , B, (`), , Cr., , C, (`), , Particulars, , A, (` ), , B, (`), , C, (`), , 40,000, , 30,000, , ––, , ––, , ––, , 4,800, , By Balance b/c, , ––, , ––, , 3,200, , By Revaluation A/c, , 2,400, , 1,600, , ––, , 4,800, , 3,200, , ––, , By Reserve Fund, , 2,400, , 1,600, , ––, ,  6, ,  10,000 , ,  10, , , To B's Cap. A/c,  4, ,  10  10,000 , , , , To Cash A/c (Goodwill, amount withdrawn), To Balancd c/d, Total, , By Cash A/c, 44,800, , 33,200, , 25,000, , 49,600 36,400, , 33,000, , By C's Capital A/c, (Rs. 8,000 in 6:4 SR), , ––, 4,800, , –– 33,000, 3,200, , ––, , Total, , 49,600, , 36,400 33,000, , By Balance b/d, , 44,800, , 33,200 25,000

Page 47 :
46, , Sulalitha - Accountancy, , New Balance Sheet as on 1.4.2017, Liabilities, , Amount, (`), , Creditors, , 20,000, , Bills Payable, , 6,000, , Capitals:, , Assets, Cash in Hand, Debtors, , 20,000, , Stock, , 17,000, , 44,800, , Buildings, , B, , 33,200, , Add: Appreciation, , C, , 25,000, , Furniture, , 1,000, , 30,000, 6,000, , 36,000, , 30,000, , Less: Depreciation, , Total 1,30,000, , 8., , 30,000, , (5,000+25,000+8,000–8,000), , A, , Provision for repair charges, , Amount, (`), , 3,000, , 27,000, , Total 1,30,000, , Anil and Sunil are partners in a firm sharing profits in the ratio of 2:1. Their, balance sheet as on 31.03.2016 was as follows:, Balance Sheet as on 31.03.2016, Liabilities, , Amount, (`), , Bills Payable, , 16,000, , Assets, , Amount, (`), , Cash, , 4,000, , Sundry Creditors, , 5,000, , Sundry Debtors, , 30,000, , Reserve Fund, , 9,000, , Stock, , 32,000, , Capitals:, , Furniture, , 8,000, , Anil, , 60,000, , Buildings, , 56,000, , Sunil, , 50,000, , Motor Car, , 10,000, , Total 1,40,000, , Total 1,40,000, , On 01.04.2016, they admitted Vimal for 1/4 th share in future profits under the, following terms., a) He should bring cash for capital Rs. 40,000 and Rs. 30,000 for goodwill., b) Half of the goodwill amount withdrawn by the old partners., c) Buildings are revalued at Rs. 66,000 and make a provisiion for legal, charges Rs. 700., d) Stock and Motor Car be depreciated by 10% cash., e) Provide for doubtful debts at 5% on debtors., Prepare: i), , Revaluation Account, , ii) Partner's Capital Account and, iii) New Balance Sheet of the firm.

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Sulalitha - Accountancy, , 47, , Soln.:, Dr., , Revaluation Account, Particulars, , Amount, (`), , To Provision for legal charges,  10, , 700, , , , To Stock  100  32,000 , , , , Cr., Particulars, , Amount, (`), , By Buildings A/c, , 10,000, , (66,000 – 56,000), ,  10, , , , To Motor Car  100  10,000 , , , , 1,000, , To Provision for doubtful, , 1500, ,  5, , , , debts (PDD)  100  30,000 , , , To Profit transferred to :, 2, , Anil  3 ,  , , 2,400, , 1 , , Sunil  3 ,  , , 1,200, , 3,600, , Total, , 10,000, , Dr., , Total, , 10,000, , Partners' Capital A/c, , Particulars, To Anil's Cap. A/c, , Vimal Particulars, (`), , Cr., , Anil, (` ), , Sunil, (`), , Anil, (` ), , Sunil Vimal, (`), (`), , ––, , ––, , 20,000 By Balance b/d, , ––, , ––, , 10,000 By Revaluation A/c, , 2,400, , 1,200, , ––, , 10,000, , 5,000, , –– By General Reserve, , 6,000, , 3,000, , ––, , 60,000 50,000, , ––, , 2, ,  3  30,000 , , , , To Sunil's Cap. A/c, 1, ,   30,000 , 3, , , , To Cash A/c, 1, , ( 2 of Goodwill amt., withdrawn), , (Rs. 9,000 in 2:1), By Cash A/c, , To Balance c/d, , 78,400, , 59,200, , ––, , –– 70,000, , 40,000 (40,000 + 30,000), By Vimal's Cap. A/c, , 20,000 10,000, , ––, , (Rs. 30,000 in 2:1 SR), Total, , 88,400 64,200 70,000 Total, To Balance b/d, , 88,400 64,200 70,000, 78,400 59,200 40,000

Page 49 :
48, , Sulalitha - Accountancy, , Dr., , Cash Account, Particulars, , Amount, (`), , To Balance b/d, , 4,000, , To Vimal's Capital, , 70,000, , (40,000 + 30,000), , Cr., Particulars, , Amount, (`), , By Anil's Capital A/c, , 10,000, , 1, ,   20,000 , 2, , , , By Sunil's Capital, , 5,000, , 1, ,  2  10,000 , , , , By Balance c/d, Total, To Balance b/d, , 74,000, , 59,000, Total, , 74,000, , 59,000, , New Balance Sheet as on 1.4.2016, Liabilities, , Amount, (`), , Bills Payable, , 16,000, , Sundry Creditors, , 5,000, , Capitals:, , Assets, , Cash at Bank, , Anil, , 78,400, , Less: PDD, , Sunil, , 59,200, , Stock, , Vimal, , 40,000, , Less: Depreciation, , 700, , 30,000, 1,500, , 28,500, , 32,000, 3,200, , Furniture, , 28,800, 8,000, , Buildings, , 56,000, , Add: Appreciation, , 10,000, , Motor car, , 10,000, , Less: Depreciation, Total 1,99,300, , 1,10,000, , (4,000 + 40,000 + 30,000 – 15,000), Sundry Debtors, , Provision for legal charges, , Amount, (`), , 1,000, , 66,000, , 9,000, , Total 1,99,300

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Sulalitha - Accountancy, , 9., , 49, , Purari and Purohit are equal partners. Their Balance Sheet as on 31.03.2017, was as follows :, Balance Sheet as on 31.03.2017, Liabilities, , Amount, (`), , Bills Payable, Sundry Creditors, , Assets, , 6,600, , Cash, , 1,800, , 12,800, , Stock, , 23,600, , Capitals:, , Sundry debtors, , Pujari - 40,000, , Less: PDD, , Purohit - 30,000, , 70,000, , Total, , Amount, (`), , 25,000, 5,000, , 20,000, , Furniture, , 4,000, , Buildings, , 40,000, , 89,400, , Total, , 89,400, , On 01.04.2017, they admit Pandit as a new partner and offered him 1/4th share in the, profit on the following terms:, a) He should bring in Rs. 30,000 as capital and Rs. 18,000 towards goodwill., b) Half of the goodwill should be withdrawn by the old partners., c) Stock and furniture to be depreciated by 10% each., d) PDD is reduced by Rs. 3,000., Prepare: i), , Revaluation Account, , ii) Partner's Capital Account and, iii) New Balance Sheet of the firm., Soln.:, Dr., , Revaluation Account, Particulars, , Amount, (`), , 10, , , To Furniture ,  23,600 ,  100, ,  10, , 2,360, , , ,  4,000 , By Furniture ,  100, , , Cr., Particulars, , Amount, (`), , By PDD, , 3,000, , 400, , To Profit transferred to:, Pujari -  1 , 2, , 120, , Purohit -  1 , 2, , 120, , 240, , Total, , 3,000, ,  , , Total, , 3,000

Page 51 :
50, , Sulalitha - Accountancy, , Note on PDD:, PDD appearing in Balance Sheet Rs. 5,000, It is decreased by Rs. 3,000 (Adj. d), Therefore, balance PDD is 5,000 – 3,000 = Rs. 2,000, Treatment:, i), ii), , Take decrease in PDD of Rs. 3,000 on the credit side of Revaluation A/c., Deduct Balance PDD of Rs. 2,000 from debtors of Rs. 25,000 in the Balance Sheet., , Dr., , Partners' Capital A/c, , Particulars, , Puraji, (` ), , To Pujari's Cap. A/c, , ––, , Purohit, (`), , Pandit, (`), , ––, , 9,000, , 1, ,   18,000 , 2, , , ––, , ––, , 9,000, , 1, ,  2  18,000 , , , , Pujari Purohit Pandit, (` ), (`), (`), , By Balance b/d, , 40,000, , 30,000, , ––, , 120, , 120, , ––, , By Cash A/c, , ––, , –– 48,000, , (30,000 + 18,000), , To Cash, (Half of the goodwill, amount withdrawn), , Total, , Particulars, , By Revaluation A/c, , To Purohit Cap. A/c, , To Balance c/d, , Cr., , 4,500, , 4,500, , ––, , 44,620 34,620, , 30,000, , 49,120 39,120 30,000, , By Pandit Capital A/c, (Rs. 18,000 in 1:1 SR), , 9,000, , 9,000, , ––, , 1, , , , Purohit - 18,000  2 , , , , Total, , 49,120 39,120 30,000, , To Balance b/d, , 44,620 34,620 30,000, , New Balance Sheet as on 1.4.2017, Liabilities, Bills Payable, Sundry Creditors, , Amount, (`), 6,600, 12,800, , Assets, Cash, , 40,800, , (1,800+30,000+18,000–9,000), Stock, , Capital Accounts:, , Amount, (`), , Less: Depreciation, , 23,600, 2,360, , Pujari, , 44,620, , Sundry Debtors, , Purohit, , 34,620, , Less: PDD (5,000 – 3,000) 2,000, , Pandit, , 30,000, , Furniture, Less: Depreciation, Buildings, , Total 1,28,640, , 21,240, , 25,000, 23,000, , 4,000, 400, , 3,600, 40,000, , Total 1,28,640

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Sulalitha - Accountancy, , 10., , 51, , Sharat and Bharat are sharing profits and losses in the ratio 2 : 1. Their, Balance Sheet as on 31.03.2018 was as follows :, Balance Sheet as on 31.03.2018, Liabilities, , Amount, (`), , Creditors, , 12,000, , Assets, Cash in Hand, , Bills Payable, , 8,000, , Debtors, , Reserve Fund, , 9,000, , Stock, , Capitals:, Sharat, , 20,000, , Bharat, , 20,000, , 40,000, , Total, , 69,000, , Amount, (`), 10,000, 5,000, 10,000, , Furniture, , 4,000, , Buildings, , 40,000, , Total, , 69,000, , They admitted Kamat into partnership giving him1/4th share in the future profits on, the following terms :, a) The new partner should bring Rs. 25,000 as his capital., b) The goodwill of the firm is valued at Rs. 24,000., c) Value of buildings is to be appreciated by Rs. 7,000 and furniture to be appreciated, by Rs. 1,000., d) Stock is valued at 10% less than the book value and there is an oustanding printing, bill for Rs. 400., Prepare: i) Revaluation Account, ii) Partner's Capital Account and, iii) Balance Sheet of the new firm., Soln.:, Dr., , Revaluation Account, Particulars, , Amount, (`), , To Stock, , Cr., Particulars, , Amount, (`), , 1,000, , Buildings, , 7,000, , 400, , Furniture, , 1,000, ,  10, ,  100  10,000 , , , , To Outstanding Printing bill, To Profit transferred to, 2, , Sharat -  , 3, , 4,400, , 1, Bharat -  , 3, , 2,200, , 6,600, , Total, , 8,000, ,  , , Total, , 8,000

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52, , Sulalitha - Accountancy, , Dr., , Partners' Capital A/c, , Particulars, , Sharat, (` ), , To Sharat's Cap. A/c, , Cr., , Bharat Kamat Particulars, (`), (`), , Sharat Bharat Kamat, (` ), (`), (`), , ––, , ––, , 4,000, , By Balance b/d, , 20,000 20,000, , ––, , ––, , ––, , 2,000, , By Revaluation A/c, , 4,400, , 2,200, , ––, , 34,400, , 27,200, , 19,000, , By Reserve Fund, , 6,000, , 3,000, , ––, , 2, ,   6000 , 3, , , , To Bharat's Cap. A/c, 1, ,  3  6000 , , , , To Balance c/d, , (Rs. 9,000 in 2:1 OR), By Cash A/c, , ––, , By Kamaths Cap. A/c, , 4,000, , –– 25,000, 2,000, , ––, , (Rs. 6,000 in 2:1 SR), Total, , Note:, , 34,400 27,200 25,000, , Total, , 34,400 27,200 25,000, , To Balance c/d, , 34,400 27,200 19,000, , 1, , Kamath's share of goodwill = 4  24,000  6,000, Sacrifice ratio of Sharat and Bharath = 2 : 1 (i.e., old ratio itself.), 2, , , , 1, , , , Credit to Sharat =  3  6000  = 4,000, , , Credit to Bharat =  3  6000  = 2,000, , , New Balance Sheet as on 31.3.2017, Liabilities, Creditors, Bills Payable, , Amount, (`), 12,000, 8,000, , Assets, Cash (10,000 + 25,000), , 35,000, , Debtors, Stock, , Capitals:, , Amount, (`), , 5,000, 10,000, , Less: Depreciation, , 1,000, , Sharat, , 34,400, , Furniture, , 4,000, , Bharat, , 27,200, , Add: Appreciation, , 1,000, , Kamat, , 19,000, , Buildings, , Outstanding Printing Bill, Total, , 400, 1,01,000, , Add: Appreciation, Total, , 9,000, , 5,000, , 40,000, 7,000, , 47,000, 1,01,000

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Sulalitha - Accountancy, , 11., , 53, , Vani and Sandhya are partners sharing profits and lossesin the proportion, of 3/5 and 2/5. Their Balance Sheet as on 31.03.2018 was as follows :, Balance Sheet as on 31.03.2018, Liabilities, , Amount, (`), , Assets, , Amount, (`), , Creditors, , 77,500, , Cash at Bank, , 21,500, , Reserve Fund, , 20,000, , Stock, , 39,000, , P and L Account, , 5,000, , Capitals:, , Debtors, , 60,000, , Less: PDD, , 3,000, , 57,000, , Vani, , 60,000, , Furniture, , 10,000, , Sandhya, , 30,000, , Buildings, , 40,000, , Machinery, , 25,000, , Total 1,92,500, , Total 1,92,500, , On 01.04.2018, Chaya is admitted into partnership on the following terms., a) She should bring Rs. 40,000 as capital for 1/6th share and Goodwill of the firm is, valued at Rs. 30,000., b) Depreciate furniture by 10%., c) Appreciate buildings by 20%, d) PDD is increased by Rs. 3,000., e) An amount of Rs. 2,000 due to a creditor is not likely to be claimed and, hence to be written off., Prepare: i) Revaluation Account, ii) Partner's Capital Account and, iii) New Balance Sheet of the firm., Soln.:, Dr., , Revaluation Account, Particulars, , Amount, (`), , To Furniture A/c, , 1,000, ,  10, ,  10,000 , ,  100, , , 3,000, , To Profit transferred to, 2, , Particulars, , Amount, (`), , By Buildings, , 8,000, ,  20, ,  40,000 , ,  100, , , To PDD, , Vani -  , 5, , Cr., , By Creditors, , 2,000, , (written off), 3,600, , 2, , Sandhya -  5 ,  , , 2,400, , 6,600, , Total, , 10,000, , Total, , 10,000

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54, , Sulalitha - Accountancy, , Note:, , 1, , Chaya's share of goodwill = 6  30,000  5,000, Sacrifice ratio of Vani and Sandhya = 3 : 2 (i.e., in this case, old ratio itself), , Dr., , Partners' Capital A/c, , Particulars, , Vani, (` ), , To Vani's Cap. A/c, , Sandhya Chaya, (`), (`), , Cr., , Particulars, , Vani, (` ), , ––, , ––, , 3,000, , By Balance b/d, , ––, , ––, , 2,000, , By Revaluation A/c, , Sandhya Chaya, (`), (`), , 60,000, , 30,000, , ––, , 3,600, , 2,400, , ––, , 12,000, , 8,000, , ––, , 3,000, , 2,000, , ––, , ––, , ––, , 4,000, , 3,000, , 2,000, , ––, , 3, ,   5,000 , 5, , , To Sandhya's Cap. A/c, To Balance c/d, , 81,600, , 44,400 35,000, , By Reserve, (Rs. 20,000 in, , 3 2, :, 5 5, , ), , By P & L A/c, 3 2, , (5,000 in 5 : 5 ), By Bank A/c, By Chaya's Capital A/c, (Rs. 5,000 in 3:2 SR), Total, , 81,600, , 44,400 40,000, , Total, , 81,600, , 44,400 40,000, , To Balance c/d, , 81,600, , 44,400 35,000, , New Balance Sheet as on 01.04.2018, Liabilities, Creditors, , Amount, (`), 77,500, , 61,500, , (21,500 + 40,000), 2,000, , 75,500, , Stock, Debtors, , Capitals:, , 39,000, 60,000, , Less: PDD (3,000+3,000) 6,000, , Vani, , 81,600, , Furniture, , Sandhya, , 44,400, , Less: Depreciation, , Chaya, , 35,000, , Buildings, Add: Appreciation, Machinery, , Total, , Amount, (`), , Cash at Bank, , Less: Creditors, written off, , Assets, , 2,36,500, , Total, , 54,000, , 10,000, 1,000, , 9,000, , 40,000, 8,000, , 48,000, 25,000, 2,36,500

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Sulalitha - Accountancy, , 12., , 55, , Gouri and Ganesh are partners in a firm sharing profit equally. Following is, their Balance Sheet as on 31.03.2017., Balance Sheet as on 31.03.20117, Liabilities, , Amount, (`), , Creditors, , 20,000, , Assets, , Amount, (`), , Cash in Hand, , 7,000, , Bills Payable, , 4,000, , Stock, , 25,000, , General Reserve, , 6,000, , Buildings, , 40,000, , Capitals:, , Debtors, , 17,000, , Gouri, , 80,000, , Less: PDD, , Ganesh, , 40,000, , Fruniture, , 14,500, , Patents, , 30,000, , Plant and Machinery, , 18,000, , 1,500, , Total 1,50,000, , 15,500, , Total 1,50,000, , On 01.04.2017, Shiva is admitted into partnership on the following terms:, a) Shiva should bring Rs. 25,000 as capital., b) Goodwill of the firm is valued at Rs. 14,000., c) Stock is to be increased by 8%., d) Provision for doubtful debts is to be increased to Rs. 2,600., e) Capital Accounts of partners are to be adjusted in their new profit sharing, ratio 3:3:1, based on Shiva's Capital after adjusting goodwill, (Adjustments, to be made in cash)., f) Sacrifice ratio of Gouri and Ganesh = 1 : 1, Prepare: i), , Revaluation Account, , ii) Partner's Capital Account and, iii) New Balance Sheet of the firm., , Soln.:, Dr., , Revaluation Account, Particulars, , Amount, (`), , To PDD (2,600 – 1,500), , 1,100, , To Partner's Capital A/c, , 900, , Gouri:  1 , 2, , 450, , Ganesh:  1 , 2, , 450, , Cr., Particulars, , Amount, (`), , By Stock, , 2,000, ,  8, ,  25,000 , ,  100, , ,  , ,  , , Total, , 2,000, , Total, , 2,000

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56, , Sulalitha - Accountancy, , Dr., , Partners Capital A/cs, , Particulars, , Gouri, (` ), , To Cash, (Balancing figure, excess withdrawn), , 15,450, , ––, , ––, , ––, , ––, , 1,000, , ––, , ––, , 1,000, , To Gouri's Cap. A/c, , Ganesh Shiva, (`), (`), , Particulars, By Balance b/d, , Cr., Gouri Ganesh Shiva, (` ), (`), (`), 80,000, , 40,000, , ––, , By Revaluation A/c, , 450, , 450, , ––, , By General Reserve, , 3,000, , 3,000, , ––, , 1, ,  2,000  , 2, , , To Ganesh Cap. A/c, 1, ,  2,000  , 2, , , (Rs. 6,000 in 1:1), , To Balance c/d, , 69,000, , 69,000, , 23,000, , By Cash A/c (Capital), , (see note 1), , Total, , 84,450 69,000, , Note: 1) Shiva's share of goodwill =, , 25,000, , ––, , By Shiva's Cap. A/c, (2,000 in 1:1 SR), , 1,000, , By Cash, (Deficit brought in), , 24,550, , –– 25,000, 1,000, , ––, , Total, , 84,450, , 69,000 25,000, , By Balance b/d, , 69,000, , 69,000 23,000, , 1,  14,000  2,000, 7, 1, , Gouri gets credit as per sacrifice = 2  2,000  1,000, 1, , Ganesh gets credit as per sacrifice = 2  2,000  1,000, 2) Calculation of capital of partners in the profit sharing ratio :, [Taking new partners (Shiva's) share and his capital as the base), 3, , 3, , 1, , New profit sharing ratio of Gouri, Ganesh and Shiva = 3 : 3 : 1 OR 7 : 7 : 7, Shiva's capital after adjustment for goodwill = 25,000 – 2,000 = 23,000, 1, , Shiava's share = 7, , , Total capital of the firm :, 1, , For 7 share Shiava's capital is Rs. 23,000., Therefore, total capital is how much?, On cross multiplication,, , 1,  23,000, 7 , , 1  ?

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Sulalitha - Accountancy, , 57, , 1, 7, 1, 23,000  1 ,  1,61, 000, 7, 23,000  1 , , 3, , , , Gouri's capital = 7  1,61,000  Rs. 69,000, , , , Ganesh's capital = 7  1,61,000  Rs. 69,000, , 3, , Note 2:, Dr., , Cash Account, Particulars, , Amount, (`), , To Balance b/d, , 7,000, , To Shiva's Capital A/c, , 25,000, , To Ganesh's Capital A/c, , 24,550, Total, , To Balance b/d, , Cr., Particulars, , Amount, (`), , By Gouri's Capital a/c, , 15,450, , By Balancd c/d ), , 41,100, , 56,550, , Total, , 56,550, , 41,100, , New Balance Sheet as on 1.4.2017, Liabilities, Creditors, Bills Payable, , Amount, (`), 20,000, 4,000, , Assets, Cash in hand, , Add: Appreciation, , 25,000, 2,000, , Buildings, , Gouri, , 75,000, , Debtors, , Yamuna, , 50,000, , Less: PDD, , Shiva, , 23,000, , (1,500 + 1100), , Total, , 27,433, , (7,000 + 25,000 + 24,550 – 15,450), Stock, , Capitals:, , Amount, (`), , 1,85,000, , 27,000, 40,000, , 17,000, 2,600, , 14,400, , Furniture, , 14,500, , Patents, , 30,000, , Plant and Machinery, , 18,000, , Total, , 1,85,000

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58, , Sulalitha - Accountancy, , 13., , Mahendra and Surendra are equal partners in a firm. Their Balance Sheet, as on 31.03.2017 stood as follows :, Balance Sheet as on 31.03.20117, Liabilities, , Amount, (`), , Creditors, , 40,000, , Bank Loan, , 8,000, , Assets, Stock, , 39,000, , Debtors, , 32,000, , Less: PDD, , Capitals:, , Amount, (`), , 1,000, , 31,000, , Mahendra, , 80,000, , Land and Buildings, , 40,000, , Surendra, , 40,000 1,20,000, , Machinery, , 36,000, , Motor Car, , 8,000, , Cash at Bank, Total 1,68,000, , 14,000, Total 1,68,000, , On 01.04.2017, Chandra is admitted into partnership for 1/5th share in profits on the, following terms :, a) Chandra brings Rs. 26,000 as capital., b) Goodwill of the firm is valued at Rs. 10,000., c) Motor car and Machinery are to be depreciated by 20% and Rs. 3,800 respectively., d) Provision for doubtful debts is to be maintained at 10%., f) The Capital Accounts of all the partners are to be adjusted in their new profit, sharing ratio 2:2:1, based on Chandra's Capital. (Adjustments are to be made in, cash)., Prepare: i), , Revaluation Account, , ii) Partner's Capital Account and, iii) New Balance Sheet of the firm., Soln.:, Dr., , Revaluation Account, Particulars, , Amount, (`), 20, , Cr., Particulars, , , To Motor Car  80,000 , 100 , , 1,600, , By Loss transferred to:, , To Machinery, , 3,800, , Mahendra -  2 ,  , , 2,200, , Surendra -  2 ,  , , , ,  10, , , , , , , , To PDD  100  32,000   1,000 , , , , Total, , 7,600, , 1 , , 1 , , Amount, (`), , 3,800, 3,800, , 7,600, , Total, , 7,600

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Sulalitha - Accountancy, , 59, , Dr., , Partners' Capital A/cs, , Particulars, , Mahendra Surendra Chandra, , To Revaluation A/c, To Mahendra Cap. A/c, , Particulars, , (`), , Cr., Mahendra Surendra Chandra, , (` ), , (`), , (` ), , 3,800, , 3,800, , ––, , ––, , ––, , 1,000, , By Bank A/c, , ––, , ––, , 1,000, , By Chandra's Cap. A/c 1,000, , By Balancd c/d, , (`), , 80,000, ––, , (`), , 40,000, , ––, , –– 26,000, , 1, ,  2,000  , 2, , , To Surendra Cap. A.c, 1, ,  2,000  2 , , , , ––, , 10,800, , ––, , Chandra's share of, , To Cash (Bal. fg., (Excess withdrawn), , 29,200, , To Balance c/d, (see note), , 48,000, , Total, , 1,000, , ––, , ––, , 48,000 24,000, , 81,000, , 51,800, , 26,00, , goodwill (Rs. 2,000 in 1:1 SR), By Cash, (Balancing fig.), (Deficit brought in), , ––, , Total, , 81,000, , 51,800 26,000, , To Balance b/d, , 48,000, , 48,000 24,000, , 1, , Note: 1) Chandra's share of goodwill = 5  10,000  2,000, 1, , Mahendra gets credit = 2  2,000  1,000, 1, , Surendra gets credit = 2  2,000  1,000, 2) Calculation of capital of partners in the profit sharing ratio :, [Taking Chandra's (new partners') Capital after goowill adjustment and his share, as the base.], 2 2 1, , New profit sharing ratio of Mahendra, Surendra and Chandra = 2:2:1 OR 5 : 5 : 5 ., Chandra's capital after adjustment of goodwill = 26,000 – 2,000 = 24,000, 1, , Chandra's share = 5, 5, , , , Total capital  1  24,000  Rs. 1,20, 000, , , , Mahendra's Capital  5  1,20,000  Rs. 48, 000, , , , Surendra's Capital =  5  1,20,000  Rs. 48, 000, , 2, , 2

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60, , Sulalitha - Accountancy, , New Balance Sheet as on 1.4.2017, Liabilities, , Amount, (`), , Creditors, , 40,000, , Bills Payable, , 8,000, , Assets, , Amount, (`), , Stock, , 39,000, , Debtors, , 32,000, 3,200, , Capitals:, , 28,800, , Land and Buildings, , 40,000, , Mahendra, , 48,000, , Machinery, , 36,000, , Surendra, , 48,000, , Less: Depreciation, , 3,800, , Chandra, , 24,000, , Motor Car, , 8,000, , Less: Depreciation, , 1,600, , 32,200, 6,400, , Cash at Bank, , 21,600, , (14,000+26,000+10,800–29,200), Total, 14., , 1,68,000, , Total, , 1,68,000, , Ganga and Yamuna are partners in a firm. Following is their Balance Sheet, as on 31.03.2017., Balance Sheet as on 31.03.20117, Liabilities, , Amount, (`), , Creditors, , 20,000, , Bills Payable, , 4,000, , Capitals:, , Assets, Cash in Hand, , 40,000, , Yamuna, , 20,000, , Total, , Less: Provision, 60,000, , 7,000, , Stock, Debtors, , Ganga, , Amount, (`), 15,000, 16,000, 500, , 15,500, , Furniture, , 4,500, , Patents, , 4,000, , Plants and Machinery, , 18,000, , Land and Building, , 20,000, , 84,000, , Total, , 84,000, , On 01.04.2017, Kaveri is admitted into partnership on the following terms:, a) Kaveri should bring Rs. 13,000 as capital., b) Goodwill of the firm is valued at Rs. 6,000., c) Provision for doubtful debts is to be increased by Rs. 1,200., d) Patents and machinery are to be reduced by 20% and Rs. 2,000 respectively., e) Buildings is to be increased by Rs. 4,000.

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Sulalitha - Accountancy, , 61, , f) Capital Accounts of partners are to be adjusted in their new profit sharing ratio, 3:2:1, based on Kaveri's Capital after adjusting goodwill. (Adjustments to be made, in cash)., g) Sacrifice ratio of Ganga and Yamuna is 0 : 1., Prepare: i) Revaluation Account, ii), ii) Partner's Capital Accounts and, iii) New Balance Sheet of the firm., Soln.:, Dr., , Cash Account, , Revaluation Account, Particulars, , Amount, (`), , To Provision for doubtful, , 1,200, , Cr., Particulars, , Amount, (`), , By Buildings, , 4,000, , debts (PDD),  20, , , ,  4,000 , To Patents ,  100, , , 800, , To Machinery, , 2,000, Total, , 4,000, , Total, , 4,000, , Note: There is no profit no loss on revaluation. (Account is self balancing)., , Dr., , Partners Capital A/cs, , Particulars, To Yamuna's Cap. A/c, , Ganga, (` ), , Yamuna, (`), , Kaveri, (`), , ––, , ––, , 1,000, , 4,000, , ––, , ––, , Cr., , Particulars, , Ganga Yamuna Kaveri, (` ), (`), (`), , By Balance b/d, , 40,000, , 20,000, , ––, , (Goodwill adjustment), To Cash (Bal. fig.), (Excess withdrawn), To Balance c/d, , 36,000, , 24,000 12,000, , By Cash A/c, , ––, , –– 13,000, , By Kaveri Capital A/c, , ––, , 1,000, , ––, , ––, , 3,000, , ––, , (Rs. 1,000 in 0 : 1 SR), By Cash A/c (Bal. Fig.), (Deficit brought in), , Total, , 40,000 24,000 13,000 Total, To Balance b/d, , Note: 1) Kaveri's share of goodwill =, , 1,  6,000  1,000, 6, , Credit to Ganga = 0  1000  0, Credit to Yamuna = 1  1000  1,000, , 40,000 24,000 13,000, 36,000 24,000 12,000

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62, , Sulalitha - Accountancy, , 2) Calculation of partners' in the new firm:, 1, , Kaveri's share = 6 and her capital after adjusting goodwill = 13,000 – 1,000 = 12,000, 6, , , , Total capital = 1  12,000  Rs. 72,000, 3 2 1, , NPSR of Ganga, Yamuna and Kaveri = 3 : 2 : 1 OR 6 : 6 : 6, 3,  72,000  Rs. 36, 000, 6, , , , Ganga's Capital , , , , Yamuna's Capital , , Dr., , 2,  72,000  Rs. 24, 000, 6, , Cash Account, Particulars, , Amount, (`), , To Balance b/d, , 7,000, , To Kaveri's Capital A/c, , 13,000, , To Yamuna's Capital A/c, Total, To Balance b/d, , Cr., Particulars, , Amount, (`), , By Ganga's Capital a/c, , 4,000, , By Balancd c/d, , 9,000, , 3,000, 23,000, , Total, , 23,000, , 19,000, New Balance Sheet as on 1.4.2017, , Liabilities, Creditors, Bills Payable, , Amount, (`), 20,000, 4,000, , Assets, Cash in hand, , 19,000, , Stock, , 15,000, , Debtors, Capitals:, , Less: PDD, , Ganga, , 36,000, , (500 + 1,200), , Yamuna, , 24,000, , Furniture, , Kaveri, , 12,000, , Patents, Less: Depreciation, Plant and Machinery, , Total, , 1,01,000, , Amount, (`), , 16,000, 1,700, , 4,500, 4,000, 800, 2,000, , Land and Building, , 20,000, , Add: Appreciation, , 4,000, , * * *, , 3,200, , 18,000, , Less: Depreciation, , Total, , 14,300, , 16,000, , 1,01,000

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Sulalitha - Accountancy, , 63, , Chapter-4, , Reconstitution of a Partnership Firm, Retirement and Death of a Partner, SECTION-A:, 1., , ONE MARK QUESTIONS, , Write any one circumstance/reason for retirement of a partner., , Ans: a) Old age of a partner, c) Lunacy of a partner, , b) Illness of apartner, d) All the above, , Ans: d) All the above., 2., , What is gain ratio?, , Ans: It is a ratio in which continuing partners gain or benefit from retiring partners, share of a profit., 3., , Mention any one ratio to be calculated on retirement of a partner., , Ans: a) Gain ratio ;, b) New profit sharing ratio, 4., , How the gain ratio is calculated on the retirement of a partner? OR Write, the formula for calculation of gain ration., , Ans: Gain ratio = New ratio – Old ratio., 5., , Give the formula for calculation of new profit sharing ratio on retirement of, a partner., , Ans: N.P.S.R = Old ratio + Gain ratio., 6., , How do you close Revaluation account on the retirement of a partner?, , Ans: Revaluation account is closed by transferring its profit or loss to all partners capital, account in their old profit sharing ratio., 7., , Who is an executor?, , Ans: Executor is the legal representative of a deceased partner., 8., , When do you prepare executor's account., , Ans: It is prepared in case of death of a partner., 9., , Why executors account is opened? OR What is the purpose of preparing, executors account?, , Ans: Executors account is opened to transfer amount due to deceased partner., 10., , Give the meaning of accrued profit or loss., , Ans: This is the amount of profit or loss accrued till the date of death of the deceased, partner.

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64, , 11., , Sulalitha - Accountancy, , Exapnd GR., , Ans: Gain Ratio., 12., , Expand NPSR., , Ans: New Profit Sharing Ratio., 13., , New Ratio – Old Ratio = –––––––––– Ratio., , Ans: Gain Ratio., 14., , Old Ratio + Gain Ratio = –––––––– ratio., , Ans: New Profit Sharing Ratio., 15., , What do you mean by retirement of a partner?, , Ans: When a partner ceases to be a partner of the firm due to oldage, illness etc. It is said, to be retirement of a partner., 16., , Profit or loss on revolution is transferred to all partners capital accounts in, case of retirement of a partner. (State: True/False)., , Ans: True., 17., , Accumulated profit is transferred to continuing partners capital accounts., (State: Treu/False)., , Ans: False., 18., , Increase in the value of asset is debited to Revaluation account. (State: True/, False)., , Ans: False., 19., , In the absence of any information regarding the acquisition of share in the, profit of retiring / deceased partner by the remaining partners, it is assured, that they will acquire his/her share in :, a) Old profit sharing ratio ;, , b) New profit sharing ratio, , c) Equal ratio, , d) None of the above, , Ans: a) Old profit sharing ratio., 20., , On retirement of a partner, retiring partners share of goodwill is debited to, continuing partners capital account is :, a) Old profit sharing ratio, , b) New profit sharing ratio, , c) Gain ratio, , d) None of the above, , Ans: c) Gain ratio, 21., , In case of retirment of a partner, profit or loss on revaluation transferred to:, a) Only to the capital accounts of continuing partners., b) Only to the capital account of retiring partner., c) All the partners capital account., d) None of the above., , Ans: c) All the partners capital account.

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Sulalitha - Accountancy, , 65, , SECTION B: TWO MARKS QUESTION, 22., , Ans:, , Anand, Mahesh and Sudeep were partners sharing profits and losses in the, ratio of 4:3:2. Mahesh retires from partnership, the new profit sharing ratio, of Anand and Sudeep is 5:3. Find out gain ratio., Gain Ratio = New Ratio – Old Ratio, Gain ratio of Anand =, , 5 4, 45  32, 13,  , , 8 9, 72, 72, , Gain ratio of Sideep =, , 3 2, 27  16, 11,  , , 8 9, 72, 72, ,  Gain ratio = 13 : 11, , 23., , X, Y and Z are partners sharing profits and losses in the ratio of 5:3:2. Y, retires from the business. X and Z share the future profit in the ratio of, 5, 3, and, respectively. Find out the gain ratio of X and Z., 8, 8, Ans:, Gain Ratio = New ratio – Old Ratio, Gain ratio of X =, , Gain ratio of Z =, , 5, 3, 25  20, 5, , , , 8, 10, 40, 40, 3, 2, 15  8, 7, , , , 8, 10, 40, 40, ,  Gain ratio = 5 : 7, , 24., , Ans:, , Vani, Rani and Soni are partners in a firm sharing profits and losses in the, ratio of 4 : 3 : 2. Soni retires from the firm. Vani and Rani agreed to share, equally in future. Calculate benefit ratio of Vani and Rani., Benefit ratio =, , New ratio – Old ratio, , Benefit ratio of Vani =, , 1, 4, 98, 1, , , , 2, 9, 18, 18, , Benefit ratio of Rani =, , 1, 3, 96, 3, , , , 2, 9, 18, 18, ,  Benefit ratio of Vani and Rani is 1 : 3., , 25., , Prakash, Vijay and Naveen are partners sharing profits in the rati of 3 : 2 : 1., Naveen retires and his share gained by Prakash and Vijay in the ratio of, 1, 1, and, respectively. Calculate the new profit sharing ratio., 8, 24, Ans:, New Ratio = Old ratio + Gain ratio, New Ratio of Prakash =, New Ratio of Vijay =, , 3 1, 12  3, 15,  , , 6 8, 24, 24, 2, 1, 8 1, 9, , , , 6, 24, 24, 24, ,  New profit sharing ratio = 15 : 9 OR 5 : 3.

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66, , Sulalitha - Accountancy, , 26., , A, B and C were partners sharing profits and losses in the ratio of 2 : 2 : 1. A, retires and his share gained by B and C in the rtio of 6/25 and 4/25 respectively., Calculate the new profit sharing ratio., , Ans:, , New ratio, , =, , New ratio of B, , =, , New ratio of C, , =, , Old Ratio + Gain Ratio, , 2, 6, 10  6, 16, , , , 5, 25, 25, 25, 1, 4, 54, 9, , , , 5, 25, 25, 25, ,  N.P.S.R is 16 : 9., , 27., , Ramesh, Prakash and Suresh were partners in a firm sharing profits and, losses in the ratio of 5 : 3 : 2. On 31st March, 2020, their balance sheet was as, under :, Balance Sheet as on 31.03.2020, Liabilities, Amount, Assets, Amount, (`), (`), Creditors, , 14,000, , Reserve Fund, , 6,000, , Cash, , 8,000, , Debtors, , 11,000, , Capitals:, , Patents, , 10,000, , Ramesh - 30,000, , Stock, , 11,000, , Prakash - 25,000, , Machinery, , 50,000, , Suresh - 15,000, , 70,000, Total, , 90,000, , Total, , 90,000, , Ramesh dies on 30th September, 2021. It was agreed between his executors and the, surviving partners that :, a), , Goodwill to be valued at two and half years purchase of the average profits of, the previous four years, which were: 2016-17 – Rs. 12,000; 2017-18 – Rs. 20,000,, 2018-2019 – Rs. 13,000, 2019-20 – Rs. 15,000 (as per AS26)., , b), , Share in the profit from the date of last balance sheet till to the date of death to, be calculated on the basis of last year's profit., , c), , Interest on Capital to be allowed at 12% p.a., , Prepare Ramesh's Capital Account., Ramesh's Capital A/c, , Ans:, Dr., Particulars, , Amount, (`), , To Ramesh's Executors's a/c, , 57,300, , (Transfer), , Total, , 57,300, , Cr., Amount, (`), , Particulars, By Balance b/d, , 30,000, , By Prakahs's Capital A/c, , 11,250, , By Suresh's Capital A/c, , 7,500, , By Profit and Loss suspenses A/c, , 3,750, , By Interest on Capital A/c, , 1,800, , By Reserve Fund A/c, , 3,000, Total, , 57,300

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Sulalitha - Accountancy, , 67, , Working Notes:, i), , Goodwill :, , 12,000  20,000  13,000  15,000, 1,  2, 4, 2, 60,000, 5, , 4, 2, 5, 15,000 ,  37,500, 2, , Goodwill of the firm =, =, =, ,  Ramesh's share of goodwill = 37,500 , , 5,  Rs.18,750, 10, , Treatment of Goodwill (in Gain ratio) :, Prakash's Capital A/c, , 18,750 , , 3, 5, , Dr., , 11,250, , Suresh's Capital A/c, , 18,750 , , 2, 5, , Dr., , 7,500, , To Ramesh's Capital A/c, , ii) Share of Profit = 15,000 , , 6, 5, ,  Rs. 3,750, 12 10, , iii) Interest on Capital = 30,000 , iv) Reserve Fund = 6,000 , 28., , 18,750, , 12, 6, ,  Rs.1,800, 100 12, , 5,  Rs. 3,000, 10, , A, B and C were partners in a firm, sharing profits and losses in the ratio of, 2:2:1. The balance sheet of the firm as on 31.3.2019 was as under., Balance Sheet as on 31.03.2019, Liabilities, , Amount, (`), , Current Liabilities, , 35,000, , Capitals :, A - 40,000, , Assets, , Amount, (`), , Current Assets, , 50,000, , Fixed Assets, , 70,000, , Profit and Losses A/c, , 10,000, , B - 35,000, C - 20,000, , 95,000, , Total 1,30,000, , Total 1,30,000, , 'C' died on 30th June, 2019. His executors were entitled for the following :, a), , His capital as in last balance sheet., , b), , His share in the profit and loss account., , c), , Interest on capital is to be allowed at 100% p.a., , d), , His salary at Rs. 800 p.m.

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68, , Sulalitha - Accountancy, , e), , His share of profit upto the date of his death. The profit of the firm for the current, year estimated at Rs. 20,000, Prepare C's Executor's A/c., C's Executor's A/c, , Ans:, Dr., , Cr., Particulars, , Amount, (`), , To Profit and Loss A/c, , 2,000, , 1, , 1,000  , 5, , , Particulars, , Amount, (`), , By C's capital A/c, , 20,000, , By Interest on capital A/c, , To Balance c/d, , 21,900, , 500, , 10, 3 , ,  ,  20,000 , 100 12 , , , By Salary A/c, , 2,400, , (800  3), , By P and L Suspense A/c, , 1,000, , 1 3 , ,  20,000  , , 5 12 , , , Total, 29., , 23,900, , Total, , 23,900, , X, Y and Z are partners sharing profits and losses in the ratio of 2:2:1. Their, balance sheet as on 31st March, 2019 was follows :, Balance Sheet as on 31.03.2019, Liabilities, , Amount, (`), , Sundry Creditors, , 30,000, , Amount, (`), , Cach, , 10,000, , Debtors, , 25,000, , A - 15,000, , Stock, , 40,000, , B - 25,000, , Machinery, , 40,000, , Capital Account:, , C - 30,000, Reserve Fund, , Assets, , 70,000, 15,000, , Total 1,15,000, , Total 1,15,000, , X died on 31st July, 2019 and his executors are entitled to :, a) His capital on the date of previous balance sheet., b), , His portion of reserve fund on the date of last balance sheet., , c), , His portion of profit to the date of death on the basis of previous year's profit., , d), , His share of goodwill as calculated on the basis of three years purchase of the, average profits of past four years which were as under :, 2015-16 Rs. 23,000; 2016-17 Rs. 20,000; 2017-18 Rs. 19,000; 2018-19 Rs. 18,000, (as per AS26)., , Ascertain the amount payable to the executors of the deceased partner.

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Sulalitha - Accountancy, , 69, , X's Capital A/c, , Ans:, Dr., , Cr., Particulars, , Amount, (`), , To X's Executors's a/c, , 47,400, , Particulars, , Amount, (`), , By Balance b/d, , 15,000, , By Reserve Fund A/c, , 6,000, , 2, , 10,000  , 5, , , ByP & L Suspense A/c, , 2,400, , 2 4 , , 18,000  5  12 , , , , Total, , By Y's Capital A/c, , 16,000, , By Z's Capital A/c, , 8,000, , 47,400, , Total, , 47,400, , Calculation of Goodwill :, Average profits, , =, =, , , , Goodwill, , =, , 23,000 + 20,000 + 19,000 + 18,000, 4, 80,000,  20,000, 4, 20,000  3  60,000, , X's share = 60,000 , , 2,  Rs. 24,000, 5, , Treatment of goodwill as per As 26: (In Gain Ratio):, Y's capital A/c, , 2, ,  24,000  , 3, , , 1, , Z's capital A/c  24,000  , 3, , , Dr., , 16,000, , Dr., , 8,000, , To X's capital A/c, , 30., , 24,000, , Raju, Ravi and Roopa are partners sharing profit and losses in the ratio of, 4:3:3. Their capital balances on 01-04-2019 stood Rs. 1,00,000, Rs. 80,000 and, Rs. 50,000 respectively., Raju dies on 01-10-2019. The partnership deed provides the following., a), b), c), d), , Interest on capital at 12% p.a., He had withdrawn Rs. 5,000 upto date of death., Raju's share of goodwill Rs. 5,000 (as per AS26)., His share of profit upto the date of death on the basis of previous year profits., Previous year profits Rs. 20,000., Prepare Raju's Executor's Account.

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70, , Sulalitha - Accountancy, , Raju's Executor's A/c, , Ans:, Dr., , Cr., Particulars, , Amount, (`), , To Raju's Drawings A/c, , 5,000, , To Balance c/d, , 1,10,000, , Particulars, , Amount, (`), , By Raju's capital A/c, , 1,00,000, , By Interest on Capital A/c, , 6,000, , 12, 6 , , , 1,00,000 , , 100 12 , , , By Ravi's Capital A/c, , 2,500, , 3, ,  5,000  6 , , , , By Roopa's Capital A/c, , 2,500, , By P & L Suspense A/c, , 4,000, , 6, 4 , , ,  20,000 , , 12, 10, , , , Total 1,15,000, , Total 1,15,000, By Balance b/d, , 31., , 1,10,000, , Arathi, Kalpana and Jayanthi are partners sharing profit and losses in the, ratio of 2 : 2 : 1. Their capital balances on 1st April, 2019 stood Rs. 60,000, Rs., 50,000 and Rs. 40,000 respectively., Kalpana died on 31st December, 2019. According to partnership deed, her, executors are entitled to get the following :, a) Her capital as on the date of last balance sheet., b) Her share of General reserve. General reserve Rs. 15,000., c) Kalpana's share of goodwill Rs. 12,000 (as per AS 26)., d) Interest on Capital at 10% p.a., e) Her share of profit upto the date of death on the basis of previous year profits., Previous year profits Rs. 24,000., Prepare Kalpana's Capital Account., X's Capital A/c, , Ans:, Dr., Particulars, To Kalpana's executors A/c, (Transfer), , Amount, (`), 78,450, , Particulars, By Balance b/d, By General Reserve A/c, , Cr., Amount, (`), 50,000, 6,000, , 2, , 15,000  , 5, , , By Arathi's Capital A/c, 2, , 12,000  , 3, , , 8,000

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Sulalitha - Accountancy, , 71, , By Jayanthi's Capital A/c, , 4,000, , 1, , 12,000  3 , , , , By Interest on Capital A/c, , 3,750, , 10, 9 , ,  ,  50,000 , 100 12 , , , By P and L Suspense A/c, , 7,200, , 9 2, ,  24,000  12  5 , , , , Total, , 78,950, , Total, , 78,950, , SECTION C, 32., , Radha, Sheela and Meena were in partnership sharing profits and losses in, the proportion of 3 : 2 : 1. On April 1, 2020 Sheela reitres from the firm and, on that date, their Balance Sheet was as follows:, Balance Sheet as on 01-04-2020, Liabilities, , Amount, (`), , Assets, , Amount, (`), , Trade creditors, , 3,000, , Cash in Hand, , 1,500, , Bills payable, , 4,500, , Cash at Bank, , 7,500, , Expenses owing, , 4,500, , Debtors, , 15,000, , General Reserve, , 13,500, , Stock, , 12,000, , Factory premises, , 22,500, , Capitals:, Radha, , 15,000, , Machinery, , 8,000, , Sheela, , 15,000, , Loose Tools, , 4,000, , Meena, , 15,000, , 45,000, , Total, , 70,500, , Total, , 70,500, , The terms were :, a), , Goodwill of the firm was valued at Rs. 13,500 (as per AS26)., , b), , Expenses owing to be brought down to Rs. 3,750., , c), , Machinery and loose tools are to be valued at 10% less than their book balue., , d), , Factory premises are to be revalued at Rs. 24,300., , Prepare: i) Revaluation Account, ii) Partner's Capital Accounts and, iii) Balance Sheet of the firm after retirement of Sheela.

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72, , Sulalitha - Accountancy, , Revaluation A/c, , Ans:, Dr., , Cr., Particulars, , Amount, (`), , To Machinery, , 800, , 10 , ,  8000 , , 100 , , , Particulars, , Amount, (`), , By Expenses owing, , 750, , (4,500 – 3,750), , To Loose Tooles, , 400, , 10 , ,  4000 , , 100 , , , By Factory premises, , 1,800, , (24,300 – 22,500), , To Porfit to partners's, Capital A/c, 3, , Radha - 1,350  6, , 675, , 2, , Sheela - 1,350  6, , 450, , 1, , Meena - 1,350  6, , Dr., , 1,350, , Total, , 2,550, , Total, , 2,550, , Partners Capital A/cs, , Particulars, , 3,375, , To Sheelas loan A/c, , Balance c/d, , Cr., , Radha Sheela Meena Particulars, (` ), (`), (`), , To Sheela's Cap. A/c, , Total, , 225, , ----, , 1,125, , ---- 24,450, , ----, , 19,050, , ----, , 16,350, , 22,425 24,450 17,475, , By Balance b/d, By General Expenses, , Radha Sheela Meena, (` ), (`), (`), 15,000, , 15,000 15,000, , 6,750, , 4,500, , 2,250, , By Radha's capital A/c, , ----, , 3,375, , ----, , By Meena's capital A/c, , ----, , 1,125, , ----, , 675, , 450, , 225, , By Revaluation A/c, Total, , 22425, , 24450 17475, , By Balance c/d, , 19,050, , ---- 16,350, , Sheela's Loan A/c, Dr., , Cr., Particulars, , Amount, (`), , Particulars, By Sheela's Capital a/c, , Amount, (`), 24,450

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Sulalitha - Accountancy, , 73, , Balance Sheet as on 01-04-2020, Liabilities, , Amount, (`), , Assets, , Amount, (`), , Trade creditors, , 3,000, , Cash in Hand, , 1,500, , Bills payable, , 4,500, , Cash at Bank, , 7,500, , Expenses owing, (–) Reduced, , 4,500, 759, , Sheela Loan A/c, , 3,750, 24,450, , Capitals:, Radha, , 19,050, , Meena, , 16,350, , 35,400, , Debtors, , 15,000, , Stock, , 12,000, , Factory premises, , 22,500, , (–) Appreciation, , 1,800, , Machinery, , 8,000, , (–) Depreciation, Loose Tools, , 7,200, , 4,000, , (–) Depreciation, Total, , 800, , 24,300, , 71,100, , 400, , 3,600, , Total, , 71,100, , Working Notes:, Treatment of goodwill as per AS 26., Goodwill of the firm valued at Rs. 13,500, 2, , Sheela's shae of goodwill = 13,500  6  4,500, Journal Entry:, 3, , Radha's Capital A/c 4,500  4, 3, , Meena's Capital A/c 4,500  4, , Dr., , 3,375, , Dr., , 1,125, , To Sheela's Capital, 33., , 4,500, , Akash, Bhuvan and Chirag were partners sharing profits and losses in the ratio of, 2 : 2 : 1. Their Balance Sheet as on 31.03.2019 was as follows :, Balance Sheet as on 31-03-2019, Liabilities, , Amount, (`), , Assets, , Amount, (`), , Creditors, , 32,000, , Cash in Hand, , 24,500, , Bills payable, , 24,000, , Bills Receivable, , 22,000, , Reserve Fund, , 32,000, , Debtors, , 42,000, , Profit and Loss A/c, , 10,000, , (–) PBD, , 2,000, , 40,000

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74, , Sulalitha - Accountancy, , Capitals :, , Stock, , 38,000, , Akash, , 70,000, , Furniture, , 24,000, , Bhuvan, , 50,000, , Machinery, , 40,000, , Chirag, , 30,000 1,50,000, , Buildings, , 60,000, , Total 2,48,000, , Total 2,48,000, , On 01-04-2019 Chirag retired due to change of resisdence and the following, adjustments were made:, a), b), c), d), e), , Goodwill of the firm was valued at Rs. 20,000 (as per AS 26)., PBD inceased by Rs. 1,000., Buildings to be valued at Rs. 62,000 and stock valued at Rs. 36,000, An investment not recorded in the books, costing Rs. 6,000 has to be taken into, account., Chirag is to be paid Rs. 10,000 immediately after his retirement and the balance, transfer to his loan account., , Prepare: i) Revaluation Account, ii) Partner's Capital Accounts and, iii) New Balance Sheet., Revaluation A/c, , Ans:, Dr., , Cr., Particulars, , Amount, (`), , To PBD, , 1,000, , To Stock, , Particulars, , Amount, (`), , By Buildings, , 2,000, , (62,000 – 60,000), , (28,000 – 36,000), , 2,000, , By Investment, , 6,000, , To Porfit transferred to, partners's Capital A/c, 2, , Akash - 5,000  5, , 2,000, 2, , Bhuvan - 5,000  5, 1, , Chirag - 5,000  5, , 2,000, , 1,000, , 5,000, , Total, , 8,000, , Total, , 8,000

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Sulalitha - Accountancy, , 75, , Dr., , Partners Capital A/cs, , Particulars, To Chirag's cap. A/c, , Akash, (` ), , Bhuvan Chirag, (`), (`), , Cr., , Particulars, , Akash Bhuvan, (` ), (`), , Chirag, (`), , By Balance b/c, , 70,000 50,000, , 30,000, , 12,800 12,800, , 6,400, , 2,000, , 2,000, , ----, , To Cash A/c, , ----, , ----, , 10,000, , By Reserve Fund, , To Chirag's loan A/c, , ----, , ----, , 33,400, , By Profit and Loss A/c, , (Transfer), To Balance c/d, , 86,800 66,800, , ----, , 4,000, , 4,000, , 2,000, , By Akash's cap A/c, , ----, , ----, , 2,000, , By Bhuvan's cap A/c, , ----, , ----, , 2,000, , 2,000, , 2,000, , 1,000, , By Revaluation A/c, Total, , 88,800 68,800 43,400, , 88,800 68,800 43,400, By Balance c/d, , 86,800 66,800, , ----, , Balance Sheet as on 01-04-2019, Liabilities, , Amount, (`), , Assets, , Creditors, , 32,000, , Cash in hand, , 24,000, , Bills payable, , 24,000, , (–) paid to Chirag, , 10,000, , Chirag's loan a/c, , 33,400, , Bills receivable, , Capitals:, , Debtors, , Akash, , 86,800, , (–) PBD (2,000 + 1,000), , Bhuvan, , 66,800, , Stock, (–) Depreciation, , 22,000, 42,000, 3,000, , 39,000, , 38,000, 2,000, , 36,000, 24,000, , Machinery, , 40,000, , (+) Appreciation, Investment, Total 2,43,000, , 14,000, , Furniture, , Buildings, , 34., , Amount, (`), , 60,000, 2,000, , 62,000, 6,000, , Total 2,43,000, , Dinesh, Vinay and Mohan were partners in a firm sharing profits and losses in the, ratio of 2 : 3 : 5. Dinesh retires on 31-03-2019 on which date their Balance Sheet was, as under :

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76, , Sulalitha - Accountancy, , Balance Sheet as on 31-03-2019, Liabilities, , Amount, (`), , Assets, , Amount, (`), , Creditors, , 40,200, , Cash at Bank, , 41,000, , Profits and Loss A/c, , 20,000, , Debtors, , 20,000, , Stock, , 34,000, , Capitals :, Dinesh, , 20,000, , Furniture, , 15,000, , Vinay, , 30,000, , Building, , 50,000, , Mohan, , 50,000, , 1,00,000, , Total 1,60,000, , Total 1,60,000, , The terms were as under:, a) Dinesh's share of goodwill valued at Rs. 8,000 (as per AS 26)., b) Maintain PBD at 5% on Debtors., c) Depreciate Furniture by 10% and appreciate buildings by 20%, d) Insurance premium paid in advance Rs. 2,000, e) Dinesh is to be paid Rs. 21,000 by cheque immediately after his retirement and, the balance transfer to his loan A/c., Prepare: i) Revaluation Account, ii) Partner's Capital Accounts and, iii) New Balance Sheet after retirement of Dinesh., Revaluation A/c, , Ans:, Dr., , Cr., Particulars, , Amount, (`), , To PBD, , 1,000, , 5, 20,000 , 100, , Amount, (`), , By Buildings, , 10,000, , 20, 50,000 , 100, , To Furniture, 15,000 , , Particulars, , 1,500, , By prepaid insurance, , 2,000, , 10, 100, , To Porfit transferred to, partners's Capital A/c, 3, , Dinesh - 9,500  10, 3, , Vinay - 9,500  10, 5, , Mohan - 9,500  10, , 1,900, 2,000, 4,750, , 9,500, , Total, , 12,000, , Total, , 12,000

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Sulalitha - Accountancy, , 77, , Dr., , Partners Capital A/cs, , Particulars, , Dinesh Vinay Mohan, (` ), (`), (`), , To Dinesh's cap. A/c, , ----, , 3,000, , 5,000, , (Gain raito), , Cr., , Particulars, , Dinesh, (` ), , Vinay Mohan, (`), (`), , By Balance b/c, , 20,000, , 30,000 50,000, , By P and L a/c, , 4,000, , 6,000 10,000, , To Bank A/c, , 21,000, , ----, , ----, , By Vinay' Capital a/c, , 3,000, , ----, , ----, , To Dinesh's loan a/c, , 12,900, , ----, , ----, , By Mohan's Capital a/c 5,000, , ----, , ----, , ---- 35,850, , 59,750, , 2,850, , 4,750, , To Balance c/d, Total, , By Revaluation, , 88,800 68,800 43,400, By Balance c/d, , 1,900, 33,900, , 38,850 64,750, , ----, , 35,850 59,750, , Balance Sheet as on 31-03-2019, Liabilities, , Amount, (`), , Assets, , Creditors, , 40,000, , Cash at Bank, , Dinesh's loan A/c, , 12,900, , (41,000 – 21,000), , Capitals:, Vinay, , 35,850, , Mohan, , 59,750, , 95,600, , Amount, (`), 20,000, , Debtors, , 20,000, , (–) PBD, , 1,000, , Stock, , 34,000, , Furniture, , 15,000, , (–) Depreciation, , 1,500, , Building, , 50,000, , (+) Appreciation, , 10,000, , Prepaid Insurance, Total 1,48,500, , 35., , 19,000, , 13,500, , 60,000, 2,000, , Total 1,48,500, , Bharathi, Jyothi and Swetha were partners in a firm sharing profits and losses in, the ratio of 4:3:3. Their Balance Sheet as on 31st March, 2019 was as under., Balance Sheet as on 31-03-2019, Liabilities, , Amount, (`), , Assets, , Amount, (`), , Creditors, , 36,000, , Cash at Bank, , 12,000, , Bills Payable, , 24,000, , Debtors, , 22,500, , (–) PBD, , 2,500, , 20,000

Page 79 :
78, , Sulalitha - Accountancy, , Capitals :, , Bills receivable, , 16,000, 10,000, , Bharathi, , 50,000, , 5% Govt. Securities, , Jyothi, , 40,000, , Furniture, , 8,000, , Swetha, , 30,000, , Motor van, , 40,000, , Land and Building, , 74,000, , 1,20,000, , Total 1,80,000, , Total 1,80,000, , Swetha retires from business due to illness and the following adjustments are to be, made., a), , Reduce P.B.D. by Rs. 1,000., , b), , Bills receivable includes one bill of Rs. 4,000 recovery of which is considered as, doubtful. Hence that should be written off., , c), , Interest on Govt. securities earned but not received for last six months period., , d), , Goodwill of the firm valued at Rs. 21,000 (as per AS 26)., , e), , Rent receivable Rs. 2,000., , f), , Settlement made to the retiring partner through bank overdraft., , Prepare: i), , Revaluation Account, , ii) Partner's Capital Accounts and, iii) New Balance Sheet., Revaluation A/c, , Ans:, Dr., , Cr., Particulars, , Amount, (`), , To Provision for, doubtful bill, , 4,000, , Particulars, , Amount, (`), , By P.B.C., By O/s interest on Govt., , 1,000, , 5, , 6, , securities: 10,000  100  12, , 250, , By Rent receivable, , 2,000, , To Loss transferred to, partners's Capital A/c, 4, , Bharati - 750  10, 3, , Jyothi - 750  10, 3, , Swetha - 750  10, Total, , 4,000, , 300, 225, 225, , 750, , Total, , 4,000

Page 80 :
Sulalitha - Accountancy, , 79, , Dr., , Partners Capital A/cs, , Particulars, , Bharati Jyothi Swetha, (` ), (`), (`), , To Swetha's Cap.A/c, Revaluation A/c, To Bank A/c, To Balance c/d, Total, , 3,600, , 2,700, , ----, , 300, , 225, , 225, , ----, , ----, , 36,075, , 46,100 37,075, , ----, , Cr., , Particulars, , Bharati, (` ), , Jyothi Swetha, (`), (`), , 50,000, , 40,000 30,000, , By Balance b/c, By Bharathi's cap. A/c, , ----, , ----, , 3,600, , By Jyothi's cap. A/c, , ----, , ----, , 2,700, , 50,000 40,000 36,300, , 50,000, , 40,000 36,300, , Balance Sheet as on 31-03-2019, Liabilities, , Amount, (`), , Assets, , Amount, (`), , Creditors, , 36,000, , Debtors, , 22,500, , Bills payable, , 24,000, , (–) PBD, , 1,500, , Bank overdraft, , Bills Receivable, , (36,075 – 12,000), , 24,075, , Capitals:, , (–) PDB, , Bharathi, , 46,100, , Jyothi, , 37,075, , (+) O/s interest furniture, 83,174, , 16,000, 4,000, , 5% Govt. securities, , 12,000, , 10,000, 250, , 10,250, , Furniture, , 8,000, , Motor van, , 40,000, , Land and Building, , 74,000, , Rent receivable, Total 1,67,250, , 36., , 21,000, , 2,000, Total 1,67,250, , Gopal, Sridhar and Raju were partners in a firm. Their Balance Sheet as on 01-042019 was as follows :, Balance Sheet as on 01-04-2019, Liabilities, , Amount, (`), , Assets, , Amount, (`), , Creditors, , 18,000, , Cash, , Bills Payable, , 24,000, , Debtors, , 12,000, , Reserve Fund, , 6,000, , Stock, , 18,000, , Capital:, , 6,000, , Furniture, , 5,000, , Gopal, , 18,000, , Machinery, , 14,000, , Sridhar, , 18,000, , Building, , 40,000, , Raju, , 18,000, , 54,000, , Total, , 98,000, , Profit and Loss A/c, , 3,000, Total, , 98,000

Page 81 :
80, , Sulalitha - Accountancy, , On the above date, Gopal was retired from business and the following adjustments, are to be made., a), , Goodwill of the firm valued at Rs. 9,000 (as per AS 26)., , b), , Interest on bank loan at 10% due for six months., , c), , Provide for outstanding repair bill Rs. 1,400., , d), , Salary paid in advance Rs. 1,800., , e), , Building is revalued at Rs. 43,600., , Prepare: i), , Revaluation Account, , ii) Partner's Capital Accounts and, iii) New Balance Sheet., Revaluation A/c, , Ans:, Dr., , Dr., Particulars, , Amount, (`), , Particulars, , Amount, (`), , To O/s interest on, , 1,400, , By Prepaid Salary, , 1,800, , bank loan, , 1,400, , By Building (43,600 – 40,000), , 3,600, , 20,000 , , 10, 6, , 100 12, , To Profit transferred to, partners's Capital A/c, Gopal - 3000 , , 1, 3, , 1,000, , Sridhar - 3000  1, , 1,000, , 3, , Radha - 3000 , , 1, 3, , Dr., Particulars, To P and L A/c, , 1,000, , 3,000, , Total, , 5,400, , Total, , Partners Capital A/cs, Gopal Sridhar Raju, (` ), (`), (`), , Particulars, , 1,000, , 1,000, , 1,000, , By Balance b/d, , To Gopal's cap. A/c, , ----, , 1,500, , 1,500, , By Reserve Fund, , To Gopal's loan A/c, , 23,000, , ----, , ----, , ---- 18,500, , 18,500, , To Balance c/d, , Total, , 5,400, , 24,000 21,000 21,000, , Cr., Gopal Sridhar Raju, (` ), (`), (`), 18,000, , 18,000 18,000, , 2,000, , 2,000, , 2,000, , By Sridhar's Capital A/c 1,500, , ----, , ----, , By Raju's Capital A/c, , 1,500, , ----, , ----, , By Revaluation A/c, , 1,000, , 1,000, , 1,000, , Total, By Balance b/d, , 24,000, , 21,000 21,000, , ----, , 18,500 18,500

Page 82 :
Sulalitha - Accountancy, , 81, , Balance Sheet as on 1-04-2019, Liabilities, , Amount, (`), , Creditors, Bank Loan, (+) O/s interest, , 18,000, 20,000, 1,000, , O/s repair bill, Gopal's loan A/c, , ----, , 21,000, , Assets, Cash, Debtors, , 12,000, , Stock, , 18,000, , Furniture, , 5,000, , 23,000, , Machinery, , 14,000, , Building, 18,500, , Raju, , 18,500, , 6,000, , 1,400, , Capital :, Sridhar, , Amount, (`), , (+) Appreciation, 37,000, , Prepaid Salary, , Total 1,00,400, , * * *, , 40,000, 3,600, , 43,600, 1,800, , Total 1,00,400

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82, , Sulalitha - Accountancy, , Chapter-5, , Dissolution of Partnership Firm, SECTION-B:, 1., , TWO MARK QUESTIONS, , What is dissoluton of a partnership?, , Ans: It means some of the partners terminate their connections with the firm and the, remaining partners continue the business of the firm under the same name., 2., , Give the meaning of dissolution of partnership firm?, , Ans: It means complete closing down of the business of partnership. In other words when, all the business activities of the firm are brought to an end., 3., , State any two circumstances under which a partnership firm is dissolved., , Ans: a) On the completion of the business for which a partnership firm was formed., b) On the expiry of certain term, fixed by partnership firm., 4., , Why is Realisation Account prepared?, , Ans: It is opened in the dissolution of partnership firm. It is generally prepared to findout, profit or loss made by a firm on the realisation of assets and payment of liabilities to, outsiders., 5., Ans:, , Write the Journal entry for the payment of unrecorded liabilities on the, dissoluton of a firm., Realisation A/c, , Dr., , To Bank A/c, (Unrecord liability paid), 6., Ans:, , Give the Journal entry for assets taken over by a partners on dissolution of, firm., Partners Capital A/c, , Dr., , To Realisation A/c, ( Asset taken over by partner.), 7., Ans:, , Give the Journal entry for liability taken over by a partner on dissolution of, a firm., Realisation A/c, , Dr., , To Partner's Capital A/c, (Being liability paid.), 8., , How do you chose Realisation A/c on dissolution of a firm?, , Ans: It is closed by transferring profit or loss of realisation to all the Partners, Capital A/c.

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Sulalitha - Accountancy, , 9., , 83, , Give the journal entry for transfer of realisation profit to partners, capital A/c., Realisation A/c, , Ans:, , Dr., , To All the partners Capital A/c, (Transfer of profit to partners capital A/c), 10., , What is Realisation A/c ?, , Ans: It is an account opened at the time of dissolution of partnership firm to record assets, realised and liabilities paid off and to ascertain profit or loss on realisation., , SECTION-D:, 11., , TWELVE MARK QUESTIONS, , Anup and Sumit are equal partners in a firm. They decided to dissolve the, partnership on 31.03.2019 when their balance sheet was as under., Balance Sheet of Anup and Sumit as on 31.03.2019, Liabilities, , Amount, (`), , Assets, , Amount, (`), , Creditors, , 30,000, , Cash at Bank, , 14,000, , Loan, , 40,000, , Sundry Debtors, , 12,000, , Reserve Fund, , 10,000, , Machinery, , 47,000, , Stock, , 42,000, , Capitals:, Anup, , 60,000, , Land and Building, , 60,000, , Sumit, , 60,000 1,20,000, , Furniture, , 25,000, , Total 2,00,000, , Total 2,00,000, , The assets were realised as follows :, Land and Building, , Rs. 72,000, , Furniture, , Rs. 22,500, , Stock, , Rs. 40,500, , Machinery, , Rs. 48,000, , Sundry Debtors, , Rs. 10,500, , The creditors were paid Rs. 25,000 in full settlement. Expenses of realisation, amounted to Rs. 2,500., Prepare: 1), , Realisation A/c, , 2), , Partners Capital A/c, , 3), , Bank A/c

Page 85 :
84, , Sulalitha - Accountancy, , Realisation A/c, , Ans:, Dr., , Cr., Amount, (`), , Particulars, , Amount, (`), , To Sundry debtors, , 12,000, , By Creditors, , To Machinery, , 47,000, , By Bank A/c, , To Stock, , 42,000, , (Assets realised), , To Land and Building, , 60,000, , Land and Building, , 72,000, , To Furniture, , 25,000, , Furniture, , 22,500, , Stock, , 40,500, , Machinery, , 48,000, , Sundry Debtros, , 10,500, , To Bank A/c, (Liabilities paid off), , 25,500, , To Bank A/c (realisation exp. paid), , 2,500, , To Partners cap A/c (Profit), , 9,500, , Particulars, , 30,000, , 1,93,500, , 1, , Anup = 9,500  2  4,750, 1, Sumit = 9,500  2  4,750, , Total 2,23,500, , Total 2,23,500, , Partner's Capital A/c, Dr., Particulars, , Anup, (`), , Sumit, (`), , To Bank A/c (Balance) 69,750, , 69,750, , Particulars, By Balance b/d, By Realisation A/c, , Anup, (`), , Cr., Sumit, (`), , 60,000, , 60,000, , 4,750, , 4,750, , 5,000, , 5,000, , 69,750, , 69,750, , (Profit), By Reserve fund, (10,000  1 : 1), Total, , 69,750, , 69,750, , Total, , Bank A/c, Dr., Particulars, To Bank A/c b/d, To Realisation A/c, , Amount, (`), 14,000, 1,93,500, , (Assets realised), , Cr., Amount, (`), , Particulars, By Realisation A/c, , 22,500, , (Liabilities paid off), By Realisation A/c, , 2,500, , (Realisation expenses paid), By Loan A/c, , 40,000, , By Partners Capital A/c, , Total 2,07,500, , Anup, , 69,750, , Sumit, , 69,750, , 1,39,500, , Total 2,07,500

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Sulalitha - Accountancy, , 12., , 85, , Seeta and Sarita sharing profits in the ratio of 3:1 and they agree upon, dissolution. The Balance sheet as on 31-03-2019 is as under: (Supplementary-2020), Balance Sheet as on 31-03-2019, Liabilities, , Amount, (`), , Assets, , Amount, (`), , Loan, , 12,000, , Cash at Bank, , 25,000, , Creditors, , 18,000, , Stock, , 45,000, , Furniture, , 16,000, , Debtors, , 70,000, , Plant and Machinery, , 52,000, , Capital :, Seeta -, , 1,00,000, , Sarita, , 78,000 1,78,000, Total 2,08,000, , Total 2,08,000, , Additional Information :, a), b), c), d), e), , Seeta took over plant and machinery at an agreed value of Rs. 60,000., Stock and furniture were sold for Rs. 42,000 and Rs. 13,900 respectively., Liabilities were paid in full., Realisation expenses were Rs. 1,500, Debtors were taken over by Sarita at Rs. 69,000., , Prepare: 1), , Realisation A/c, , 2), , Partners Capital A/c, , 3), , Bank A/c, , Realisation A/c, , Ans:, Dr., Particulars, , Amount, (`), , Cr., Amount, (`), , Particulars, , To Stock A/c, , 45,000, , By Creditors A/c, , To Furniture A/c, , 16,000, , By Bank A/c (Assets realised), , To Debtors A/c, , 70,000, , By Stock, , 42,000, , To Plant and Machenery A/c, , 52,000, , By Furniture, , 13,900, , To Bank A/c, , By Seeta's Capital A/c, , (Liabilities paid off), , (Plant and Machinery, , To Creditors, , 18,000, , To Bank A/c, , To Partners Capital A/c (Profit), , 1,500, , 55,900, 60,000, , takes over), By Sarita's Capital A/c, , (Realisation expenses paid), , 18,000, , 69,000, , (Debtors takes over), , 400, , 3, , Seeta = 400  4  300, 1, , Sarita = 400  4  100, , Total 2,02,900, , Total 2,02,900

Page 87 :
86, , Sulalitha - Accountancy, , Partner's Capital A/c, Cr., Particulars, , Seeta, (`), , Sarita, (`), , To Realisation A/c, , 60,000, , 69,000, , (Assets taken over), To Bank A/c (Bal.), Total, , Seeta, (`), , Cr., Sarita, (`), , 1,00,000, , 78,000, , 300, , 100, , 1,00,300, , 78,100, , Particulars, By Balance b/d, By Realisation A/c, , 40,300, , 9,100, , 1,00,300, , 78,100, , (Profit), Total, , Bank A/c, Dr., Particulars, , Amount, (`), , Particulars, , To Bank A/c b/d, , 25,000, , By Realisation A/c, , To Realisation A/c, , 55,900, , (Creditors paid off), , (Assets realised), , Cr., Amount, (`), 18,000, , By Realisation A/c, , 1,500, , (Realisation expenses paid), By Loan A/c, , 12,000, , By Partners Capital A/c, , Total, 13., , Seeta, , 40,300, , Sarita, , 9,100, , 49,400, , Total, , 80,900, , 80,900, , Rashmi and Geetha are partners sharing profits and losses in the ratio of, 3:2. Their Balance Sheet as on 31.03.2018 as follows :, Balance Sheet as on 31-03-2020, Liabilities, , Amount, (`), , Sundry Creditors, , 10,000, , Cash at Bank, , Bills payable, , 10,000, , Bills receivable, , 10,000, , 5,000, , Sundry Debtors, , 20,000, , Stock, , 15,000, , Machinery, , 15,000, , Rashmi's Loan A/c, Reserve Fund, , 10,000, , Capitals:, , Assets, , Amount, (`), 5,000, , Rashmi, , 30,000, , Furniture, , 10,000, , Geetha, , 40,000, , Goodwill, , 30,000, , Total 1,05,000, , Total 1,05,000

Page 88 :
Sulalitha - Accountancy, , 87, , On the above date the firm was dissolved., a), , The assets were realised as follows :, Biils receivable - Rs. 7,500 ; Debtors and Stock - 10% less than the book value;, Machinery realised - 5% more than the book value; and goodwill realised for, Rs. 12,000., , b) Furniture was taken over by Geetha at Rs. 8,000., c) Dissolution expenses were Rs. 600., d) All the liabilities were discharged in full., Prepare: 1), , Realisation A/c, , 2), , Partners Capital A/c, , 3), , Bank A/c, , Realisation A/c, , Ans:, Dr., Particulars, , Amount, (`), , Cr., Amount, (`), , Particulars, , To Sundry Debtors A/c, , 20,000, , By Sundry Creditors A/c, , 10,000, , To Bills receivables A/c, , 10,000, , By Bills payable A/c, , 10,000, , To Stock A/c, , 15,000, , By Bank A/c, , To Machinery A/c, , 15,000, , (Assets realised), , To Furniture A/c, , 10,000, , By Bills receivable, , 75,00, , To Goodwill A/c, , 30,000, , By Sundry debtors, , 18,000, , To Bank A/c, , (20,000 – 2000), , (Liabilities paid off), , (10% less than BV, , To Sundry creditors, , 10,000, , To B/P, , 10,000, , 20,000 , , 20,000, , To Bank A/c, (Dissolution exp. paid), , 10, 100, , ), , By Stock A/c, (15,000 – 1,500), , 600, , 13,500, , (10% less than BV), By Machinery, , 15,750, , (5% more than BV), 15,000 , , 5, 100, , By Goodwill A/c, , 12,000, , By Geetha's Capital A/c, , 66,750, 8,000, , (Furniture takesover), By Partners Capital A/c, , 25,850, , (3:2) (Loss), 3, , Rashmi = 25,850  5  15,510, 2, , Geetha = 25,850  5  10,340, Total 1,20,600, , Total 1,20,600

Page 89 :
88, , Sulalitha - Accountancy, , Partner's Capital A/c, Dr., Particulars, To Realisation A/c, , Rashmi Geetha, (`), (`), -, , 8,000, , (Furniture taken over), , Rashmi, (`), 30,000, , 40,000, , 6,000, , 4,000, , 36,000, , 44,000, , By Balance b/d, By Reserve Fund, , To Realisation A/c (Loss), , 15,510, , 10,340, , To Bank A/c (Bal), , 20,490, , 25,660, , 36,000, , 44,000, , Total, , Particulars, , Cr., Geetha, (`), , (10,000  3 : 2), , Total, , Bank A/c, Dr., Particulars, , Amount, (`), , To Balance b/d, , 5,000, , To Realisation A/c, , 66,750, , (Assets realised), , Cr., Amount, (`), , Particulars, By Realisation A/c, , 20,000, , (Liabilities paid off), By Realisation A/c, , 600, , (Dissolution expenses paid), By Rashmi's Loan A/c, , 5,000, , By Partners Capital A/c, , Total, 14., , Rashmi, , 20,490, , Geetha, , 25,660, , 46,150, , Total, , 71,750, , 71,750, , Shruti, Shilpa and Shreya were partners sharing profits and losses in the, ratio of 2:2:1. They decided to dissolve the firm. Their Balance Sheet on the, date of dissolution was as follows :, Balance Sheet as on 31-03-2020, Liabilities, , Amount, (`), , Assets, , Amount, (`), , Creditors, , 30,000, , Cash at Bank, , Bills payable, , 20,000, , Debtors, , 30,000, , Stock, , 30,000, , Furniture, , 22,000, , Machinery, , 20,000, , Buildings, , 50,000, , Shreya's Loan A/c, , 8,000, , General Reserve, , 10,000, , Capitals:, Shruti, , 40,000, , Shilpa, , 30,000, , Shreya, , 20,000, Total 1,58,000, , 6,000, , Total 1,58,000

Page 90 :
Sulalitha - Accountancy, , 89, , The assets realised as follows :, a), , Debtors realised 10% less than B.V., the stock realised 15% more than B.V.,, Building realised Rs. 60,000., , b) The furniture was taken over by Shruti at Rs. 20,000., c) The Machinery was taken over by Shilpa at Rs. 15,000., d) Creditors and Bills payable were paid off at a discount of 5%., e) Cost of dissolution amounted to Rs. 1,500., Prepare: 1), , Realisation A/c, , 2), , Partners Capital A/c, , 3), , Bank A/c, , Realisation A/c, , Ans:, Dr., Particulars, , Amount, (`), , Cr., Amount, (`), , Particulars, , To Debtors A/c, , 30,000, , By Creditors A/c, , 30,000, , To Stock A/c, , 30,000, , By Bills payable A/c, , 20,000, , To Furniture A/c, , 22,000, , By Bank A/c, , To Machinery A/c, , 20,000, , (Assets realised), , To Building A/c, , 50,000, , By Debtors, , To Bank A/c, , (30,000 – 3,000), , (Liabilities paid off), , By Stock, , To Creditors, , 28,500, , 27,000, 34,500, , (30,000 – 4,500), , (30,000 – 1,500), , By Building, , B/P (20,000 – 1,000), , 19,000, , To Bank A/c, , 60,000, , 47,500, , By Shruti's Capital A/c, , 1,500, , (Furniture taken over), , (Dissolution exp. paid), , 1,21,500, 20,000, , By Shilpa's Capital A/c, , To Partners Capital A/c, , 5,500, , 15,000, , (Machinery taken over), , (2 : 2 : 1) (Profit), 2, , Shruti = 5,500  5  2,200, 2, , Shilpa = 5,500  5  2,200, 1, , Shreya = 5,500  5  2,200, Total 2,06,500, Dr., Particulars, To Realisation A/c, , Partners Capital A/cs, Shruti, (` ), , Shilpa Shreya, (`), (`), , 20,000 15,000, , ----, , (Assets taken over), To Bank A/c, Total, , Total 2,06,500, , 26,200 21,200, , 23,100, , 46,200 36,200 23,100, , Particulars, By Balance b/d, , Cr., Shruti, (` ), 40,000, , Shilpa Shreya, (`), (`), 30,000 20,000, , By General Reserve, , 4,000, , 4,000, , 2,000, , By Realisation A/c, , 2,200, , 2,200, , 1,100, , Total, , 46,200, , 36,200 23,100

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90, , Sulalitha - Accountancy, , Bank A/c, Dr., Particulars, , Amount, (`), , To Balance b/d, , 6,000, , To Realisation A/c, , 1,21,500, , Cr., Amount, (`), , Particulars, By Realisation A/c, , 47,500, , (Liabilities paid off), By Realisation A/c, , 1,500, , (Dissolution expenses paid), By Shreya's Loan, , 8,000, , By Partners Capital A/c, Shruti, , 26,200, , Shilpa, , 21,200, , Total 1,27,500, 15., , 70,500, , Total 1,27,500, , Rekha and Chetana sharing profit at 3 : 1 ratio and they agree upon, dissolution. The balance sheet as on 31st March, 2018 is as under., (March-2019), Balance Sheet of Rekha and Chetana as on 31-03-2018, Liabilities, , Amount, (`), , Assets, , Amount, (`), , Loan, , 2,400, , Cash at Bank, , 5,000, , Creditors, , 3,600, , Stock, , 9,000, , Furniture, , 3,200, , Capital, Capitals:, Rekha, , 22,000, , Chetana, , 13,600, Total, , Debtors, , 14,000, , Plant and Machinery, , 10,400, , 41,600, , Total, , Additional Information :, a), , Rekha took over plant and machinery at an agreed value of Rs. 12,000., , b), , Stock and furniture were sold for Rs. 8,400 and Rs. 2,780 respectively., , c), , Debtors were took over by Chetana at Rs. 13,000., , d) Liabilities were paid in full by the firm., e) Realisation expenses were Rs. 320., Prepare: 1), , Realisation A/c, , 2), , Partners Capital A/c, , 3), , Bank A/c, , 41,600

Page 92 :
Sulalitha - Accountancy, , 91, , Realisation A/c, , Ans:, Dr., Particulars, To, To, To, To, , Amount, (`), 9,000, 3,200, 14,000, 10,400, , Stock A/c, Furniture A/c, Debtors A/c, Plant and Machinery A/c, , To Bank A/c, (Creditors paid off), To Bank A/c, (Realisation exps. paid), , 3,600, 320, , Cr., Amount, (`), 3,600, , Particulars, By Creditors A/c, By Bank A/c, (Assets realised), By Stock, By Furniture, (30,000 – 3,000), By Rekha's Capital A/c, (Plant and Machinery, taken over), By Chetana's capital A/c, (Debtors taken over), By Partners capital A/c, , 8,400, 2,780, , 11,180, 12,000, 13,000, , 740, , 3 : 1 Ratio (loss), 740 , , Total, , 3,  555, 4, , ;, , 740 , , 1,  185, 4, , 40,520, , Total, , 40,520, , Partner's Capital A/c, Dr., Particulars, To Realisation A/c, (Assets realised), To Realisation A/c(Loss), To Bank A/c (Bal), Total, , Rekha Chetana, (`), (`), 12,000, , 13,000, , 555, 9,445, 22,000, , 185, 415, 13,600, , Particulars, By Balance b/d, , Total, , Cr., Rekha Chetana, (`), (`), 22,000, , 13,600, , 22,000, , 13,600, , Bank A/c, Dr., Particulars, , Amount, (`), , To Balance b/d, To Realisation A/c, (Assets realised), , 5,000, 11,180, , Total, , 16,180, , Cr., Amount, (`), , Particulars, By Realisation A/c, (Creditors paid off), By Realisation A/c, (Rekha's expenses paid), By Partners Capital A/c, Rekha, Chetana, By Loan A/c, , 3,600, 320, , 9,445, 415, Total, , 9,860, 2,400, 16,180

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92, , Sulalitha - Accountancy, , 16., , Vinay, Vaibhav and Naveen are partners in a firm, sharing profits and losses, in the ratio of 3 : 2 : 1 respectively. Their Balance Sheet as on 31.03.2018 was, as under :, (September, 2019), Balance Sheet as on 31-03-2028, Liabilities, , Amount, (`), , Assets, , Amount, (`), , Creditors, , 40,000, , Cash at Bank, , 15,000, , Bills payable, , 10,000, , Debtors, , 50,000, , Naveen's Loan A/c, , 12,000, , Stock, , 60,000, , Furniture, , 28,000, , Machinery, , 45,000, , Buildings, , 50,000, , General Reserve, , 6,000, , Capitals:, Vinay, , 80,000, , Vaibhav, , 60,000, , Naveen, , 40,000, Total 2,48,000, , Total 2,48,000, , The firm was dissolved on the above date. The assets realised as under:, a), , Debtors realised 10% less than B.V., stock realised 5% more than B.V., Building, realised Rs. 60,000., , b) Creditors and Bills payable were paid in full., c) Furniture was taken over by Vinay for Rs. 25,000., d) Machinery was taken over by Vaibhav for Rs. 40,000, e) Cost of dissolution amounted to Rs. 3,000., Prepare: 1), , Realisation A/c, , 2), , Partners Capital A/c, , 3), , Bank A/c, Realisation A/c, , Ans:, Dr., , Amount, (`), , Particulars, , Cr., Amount, (`), , To Debtors A/c, , 50,000, , By Creditors A/c, , 40,000, , To Stock A/c, , 60,000, , By Bills payable A/c, , 10,000, , To Furniture A/c, , 28,000, , By Bank A/c, , To Machinery A/c, , 45,000, , (Assets realised), , To Building A/c, , 50,000, , By Debtors, , Particulars, , To Bank A/c, , (50,000 – 5,000), , (Liabilities paid off), , By Stock, , To Creditors, , 40,000, , To B/P, , 10,000, , 45,000, 69,000, , (60,000 + 9,000), 50,000, , By Building, , 60,000, , 1,74,000

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Sulalitha - Accountancy, , 93, , To Bank A/c, , 3,000, , (Dissolution exp. paid), , By Vinay's capital A/c, , 25,000, , (Furniture taken over), , To Partners Capital A/c, , 3,000, , (3 : 2 : 1) (Profit), , By Vaibhav's capital A/c, , 40,000, , (Machinery taken over), , 2, , Vinay = 3,000  6  1,500, 2, , Vaibhav = 3,000  6  1,000, 1, , Naveen = 3,000  6  500, Total 2,89,000, , Dr., , Total 2,89,000, , Partners Capital A/cs, , Particulars, To Realisation A/c, , Vinay Vaibhav Naveen, (` ), (`), (`), 25,000 40,000, , ----, , (Assets taken over), To Bank A/c, , 59,500 23,000, , 41,500, , Particulars, , 84,500 63,000 41,500, , Vinay Vaibhav Naveen, (` ), (`), (`), , By Balance b/d, , 80,000, , 60,000 40,000, , By Realisation A/c, , 1,500, , 1,000, , 500, , By General Reserve, , 3,000, , 2,000, , 1,000, , (6000, Total, , Cr., , 3 : 2 : 1), , , , Total, , 84,500, , 63,000 41,500, , Bank A/c, Dr., Particulars, To Balance b/d, To Realisation A/c, , Amount, (`), 15,000, 1,74,000, , (Assets realised), , Cr., Amount, (`), , Particulars, By Realisation A/c, , 50,000, , (Liabilities paid off), By Realisation A/c, , 3,000, , (Dissolution expenses paid), By Naveen's Loan A/c, , 12,000, , By Partners Capital A/c, Vinay, , 59,500, , Vaibhav, , 23,000, , Naveen, , 41,500, , Total 1,89,000, , * * *, , 1,24,000, , Total 1,89,000

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94, , Sulalitha - Accountancy, , Chapter-6, , Accounting for Share Capital, SECTION-A:, 1., , ONE MARK QUESTIONS, , A company is an _____________ person created by Law., , Ans: Artificial., 2., , ________ is the part of the issued capital., , Ans: Subscribed capital., 3., , Call money received in advance is called ____________ ., , Ans: Calls-in-advance., 4., , ____________ is minimum number of members in a public company., , Ans: 07., 5., , _________ is minimum number of members in private company., , Ans: 02., 6., , Profit on forfeiture of shares is transferred to ________ account., , Ans: Capital Reserve., 7., , Equity Share holders are :, a) Creditors, c) Customers of the company, , b) Owners, d) None of the above, , Ans: b) Owners, 8., , Shares can be forfeited for :, a) Non-payment of call money, b) Failure to attend meeting, c) Failure to repay the loan to the bank, d) The pledging of shares or a security, , Ans: a) Non-payment of call money., 9., , Maximum number of members in a private company is,, a) 40, , b) 200, , c) 70, , d) No limits., , Ans: b) 200, 10., , If application are received for more numbers of shares than that offered to, public, it is called, a) Less offers, b) Under subscription, c) Over subscriptions, d) more offers, , Ans: c) Over subscriptions

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Sulalitha - Accountancy, , 11., , 95, , If a shareholder fails to pay call money, it is called ...., a) calls unpaid, b) calls-in-advance, c) calls-in-arrears, d) None of the above, , Ans: c) calls-in-arrears, 12., , A company is an artificial person: [True/False.], , Ans: True., 13., , Shares of a public company are transforable: [True/False.], , Ans: True., 14., , Private companies invite the public to subscribe for its shares: [True/False.], , Ans: False., 15., , Forfeiture of share is cancellation of the rights of the shareholders:, [True/False.], , Ans: True., , SECTION-B:, 16., , TWO MARK QUESTIONS, , What is a Joint stock company ?, , Ans: Joint stock company is an association of persons formed to carry a business with, view to earn profit having common seal, stock called share capital., 17., , State any two features of Joint stock company?, , Ans: i) Company is voluntary association of persons., ii) It is compulsorily registered under companies Act., iii) It is legal and artificial person., 18., , [Any two.], , What do you mean by over subscription?, , Ans: When the public apply for more shares than those offered to them, it is said to be, over subscription of shares., 19., , What is calls-in-arrears?, , Ans: The amount remaining un-paid on allotment or on calls is called callin-in-arrears., 20., , What is forfeiture of shares?, , Ans: Forfeiture of shares means cancellation of the rights of the shareholder on the shares, held by him for non-payment of allotment or calle money or both on such shares., 21., , State any two categories of share capital., , Ans: i) Nominal capital, ii) Issued capital, iii) Subscribed capital, 22., , [Any two.], , What is meant by issue of shares at premium?, , Ans: Issue of shares at premium means the issue of shares at a price higher than the face, value of the shares.

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96, , Sulalitha - Accountancy, , 23., , What is buy-back of shares?, , Ans: Buy back of shares means purchase of its own shares by a company., 24., , What is meant by under subscription of shares?, , Ans: When the number of shares applied for by the public is less than the number of, shares offered for subscription of shares., Journal entries relating to Issue of Shares at Par Value :, 1., , When Share application money received: Entry will be,, Bank A/c, , Dr., , To Share application A/c, 2., , When Share application money transferred to Share Capital A/c, Share Application A/c, , Dr., , To Share Capital A/c, 3., , When allotment money due: Entry will be, Share allotment A/c, , Dr., , To Share Capital A/c, 4., , When allotment money received: Entry will be, Bank A/c, , Dr., , To Share Allotment A/c, 5., , When Share call money due : Entry will be, Share Call A/c, , Dr., , To Share Capital A/c, 6., , When Calls money received: Entry will be, Bank A/c, , Dr., , To Share Capital A/c, , PROBLEMS ON ISSUE OF SHARES AT PAR (6 MARKS), 1., , The Bangalore Software Company Ltd., issued 5,000 equity shares of, Rs. 10/- each. The amount was payable as follows., Rs. 2 on application, Rs. 3 on allotment, Rs. 5 on first and final call., All the shares were subscribed and the amount was duly received. Pass the, necessary Journal entries in the books of Company.

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Sulalitha - Accountancy, , 97, , Soln: Journal Entries in the books of Bangalore Software Company Ltd., Date Particulars, , LF Debit Credit, (`), , 1., , Bank A/c, , Dr., , To, Equity Share Application A/c, (Being the E-share application money, received on 5,000 shares at Rs.2 per share), 2., , Equity Share Application A/c, , Dr., , To, Equity Share Capital A/c, (Being the application money transferred, to E-share Capital A/c), 3., , Equity Share allotement A/c, , Dr., , To, Equity Share Capital A/c, (Beging allotment money due on 5,000, equity shares at Rs. 3 per share.), 4., , Bank A/c, , Dr., , To, Equity Share Allotment A/c, (Being allotment money received.), 5., , Equity Share first and final call A/c, , Dr., , To, Equity Share Capital A/c, (Being E-share first and final call money, due on 5,000 shares at Rs. 5 per share), 6., , Bank A/c, , Dr., , 10,000, , ---, , ---, , 10,000, , 10,000, , ---, , ---, , 10,000, , 15,000, , ---, , ---, , 15,000, , 15,000, , ---, , ---, , 15,000, , 25,000, , ---, , ---, , 25,000, , 25,000, , To, Equity Share first and final call A/c, (Being E-share first and final call money, received.), 2., , (`), , 25,000, , The Sunrise Company Ltd., issued 20,000 preference shares of Rs. 100 each., The amount was payable as follows :, Rs. 10 on application, Rs. 50 on allotment, Rs. 40 on first and final call., All the shares were subscribed and the amount was duly received. Pass the, necessary Journal entries in the books of Company., , Soln: Journal Entries in the books of Sunrise Company Ltd., Date Particulars, , LF Debit Credit, (`), , 1., , Bank A/c, To, Preference Share Application A/c, (Being the P-share application money, received on 20,000 shares at Rs. 10 per share), , Dr., , (`), , 2,00,000, ----- 2,00,000

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98, , Sulalitha - Accountancy, , 2., , Preference Share Application A/c, , Dr., , 2,00,000, , To, Preference Share Capital A/c, (Being the application money, transferred to P-share Capital A/c), 3., , Preference Share allotement A/c, , 2,00,000, , Dr., , 10,00,000, , To, Preference Share Capital A/c, (Beging share allotment money due on, 20,000 shares at Rs. 50 per share.), 4., , Bank A/c, , 10,00,000, , Dr., , 10,00,000, , To, Preference Share Allotment A/c, (Being allotment money received.), 5., , Preference Shares first and final call A/c, , 10,00,000, Dr., , 8,00,000, , To, Preference Share Capital A/c, (Being share first and final call money, due on 20,000 shares at Rs. 40 per share), 6., , Bank A/c, , 8,00,000, , Dr., , 8,00,000, , To, Preference Share first and final call A/c, (Being share first and final call money, received on 20,000 shares at Rs. 40 per share), , 3., , 8,00,000, , 'ABC' Company issued 5,000 equity shares of Rs. 100 each. The amount was, payable as follows :, On Application, Rs. 20, On Allotment, Rs. 40, On first and final call, Rs. 40, All the shares were subscribed and the amount was duly received. Pass the, necessary Journal entries up to the stage of first and final call money, received., , Soln: Journal Entries in the books of 'ABC' Company Ltd., Date Particulars, , LF Debit Credit, (`), , 1., , Bank A/c, , Dr., , 1,00,000, , To, Equity Share Application A/c, (Being the Equity share application money, received on 5,000 shares at Rs.20 per share), 2., , Equity Share Application A/c, To, Equity Share Capital A/c, (Being equity share application money, transferred to Equity share Capital A/c), , (`), , 1,00,000, , Dr., , 1,00,000, 1,00,000

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Sulalitha - Accountancy, , 3., , 99, , Equity Share allotement A/c, , Dr., , 2,00,000, , To, Equity Share Capital A/c, (Beging allotment money due on 5,000, equity shares at Rs. 40 per share.), 4., , Bank A/c, , 2,00,000, , Dr., , 2,00,000, , To, Equity Share Allotment A/c, (Being allotment money received.), 5., , Equity Share first and final call A/c, , 2,00,000, Dr., , 2,00,000, , To, Equity Share Capital A/c, (Being E-share first and final call money, due on 5,000 shares at Rs. 40 per share), 6., , Bank A/c, , 2,00,000, , Dr., , 2,00,000, , To, Equity Share first and final call A/c, (Being E-share first and final call money, received.), , 2,00,000, , PROBLEMS ON ISSUE, FORFEITURE AND, RE-ISSUE OF FORFEITED SHARE (12 MARKS), 1., , Sunrise Trading Company Ltd., issued 10,000 ordinary shares of Rs. 100 each, at a premium of Rs. 10 per share. The amount payable is as follows :, On Application, , Rs. 20, , On Allotment, , Rs. 40 (including premium), , On First and Final Call Rs. 50, All the shares were subscribed and money duly received except the first and, final call on 500 shares. The directors forfeited shares and re-issued them, at fully paid at Rs. 80 per share., Pass the Journal Entries in the books of Company., Soln: Journal Entries in the books of Sunrise Trading Co. Ltd., Date Particulars, , LF Debit Credit, (`), , 1., , Bank A/c, , Dr., , To, Share Application A/c, (Being share application money received, on 10,000 shares at Rs.20 per share), 2., , Share Application A/c, To, Share Capital A/c, (Being the application money transferred, to E-share Capital A/c), , 2,00,000, , (`), , ---, , --- 2,00,000, , Dr., , 2,00,000, , ---, , --- 2,00,000

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100, , Sulalitha - Accountancy, , 3., , 4., , Share Allotement A/c, , Dr., , 4,00,000, , To, Share Capital A/c, , 3,00,000, , To, Security premium A/c, (Beging allotment money due on 10,000 equity, shares at Rs. 40 per share including premium.), , 1,00,000, , Bank A/c, , Dr., , 4,00,000, , To, Share Allotment A/c, (Being allotment money received.), 5., , Share first and final call A/c, , 4,00,000, Dr., , 5,00,000, , To, Share Capital A/c, (Being share first and final call money, due on 10,000 shares at Rs. 50 per share), 6., , Bank A/c, , 5,00,000, , Dr., , 4,75,000, , To, Share first and final call A/c, (Being share first and final call money, received.), 7., , Share Capital A/c, , 4,75,000, , Dr., , 50,000, , To, Share forfeiture A/c, , 25,000, , To, Share first and final call A/c, , 25,000, , (Being forfeiture of 500 shares for, non-payment of first and final call money.), 8., , Bank A/c, , Dr., , 40,000, , Share forfeiture A/c, , Dr., , 10,000, , To Share Capital A/c, (Being re issue of forfeited shares at, Rs. 80 per share fully paid.), 9., , Share forfeiture A/c, To Capital reserve A/c, (Being balance in Shares Forfeiture A/c, transferred to Capital Reserve A/c), , 2., , 50,000, , Dr., , 15,000, 15,000, , Madhura Tiles Ltd., issued 50,000 equity shares of Rs. 10/- each at a premium, of Rs. 2 per share. The amount payable was as follows :, Rs. 2 On Application, Rs. 6 On Allotment (including premium), Rs. 4 On First and Final Call., All the shares were subscribed and money duly received except the first and, final call on 5000 shares. The directors forfeited these shares and re-issued, them as fully paid up at Rs. 7 per share., Pass the Journal Entries regarding issue, and re-issue of forfeited shares.

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Sulalitha - Accountancy, , 101, , Soln: Journal Entries in the books of Madhura Tiles Ltd.,, Date Particulars, , LF Debit Credit, (`), , 1., , Bank A/c, , Dr., , 1,00,000, , To, Equity Share Application A/c, (Being Equity share application money, received on 50,000 shares at Rs. 2 per share), 2., , Equity Share Application A/c, , 1,00,000, , Dr., , 1,00,000, , To, Equity Share Capital A/c, (Being the application money transferred, to E-share Capital A/c), 3., , 4., , Share Allotement A/c, , 1,00,000, , Dr., , 4,00,000, , To, Share Capital A/c, , 3,00,000, , To, Security premium A/c, (Beging share allotment money due on 50,000, shares at Rs. 6 per share including premium.), , 1,00,000, , Bank A/c, , Dr., , 4,00,000, , To, Equity Share Allotment A/c, (Being allotment money received.), 5., , Equity Share first and final call A/c, , 4,00,000, Dr., , 2,00,000, , To, Equity Share Capital A/c, (Being share first and final call money, due on 50,000 shares at Rs. 4 per share), 6., , Bank A/c, , 2,00,000, , Dr., , 1,80,000, , To, Equity Share first and final call A/c, (Being share first and final call money, received.), 7., , (`), , Equity Share Capital A/c, , (5,000  10), , To, Forfeited Share A/c, , 1,80,000, , Dr., , 50,000, 30,000, , (5,000  6), , To, Equity Share first and final call A/c, , 20,000, , (Being forfeiture of 5000 shares for, non-payment of first and final call money.), 8., , Bank A/c, , Dr., , 35,000, , Share forfeiture A/c, , Dr., , 15,000, , To Equity Share Capital A/c, (Being re-issue of forfeited shares at, Rs. 7 per share fully paid.), , 50,000

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102, , Sulalitha - Accountancy, , 9., , Share forfeiture A/c, , Dr., , 15,000, , To Capital reserve A/c, (Being balance in Shares Forfeiture A/c, transferred to Capital Reserve A/c), 3., , 15,000, , Ramakrishna Construction Ltd., issued 15,000 shares of Rs. 100 each at a, premium of Rs. 10 per share, payable as follows :, On Application, , Rs. 30 per share, , On Allotment, , Rs. 50 per share (including premium), , On First and Final Call Rs. 30 per share, All the shares were subscribed and company received all the money due, with the exception of the call money on 150 shares. These shares were, forfeited and re-issued to Neha as fully paid share at Rs. 120 each., Pass the Journal Entries regarding issue, and re-issue of forfeited shares., Soln: Journal Entries in the books of Ramakrishna Construction Ltd., Date Particulars, , LF Debit Credit, (`), , 1., , Bank A/c, , Dr., , [15,000  30], , 4,50,000, , To, Share Application A/c, (Being Share application money received, on 15,000 shares at Rs. 30 per share), 2., , Share Application A/c, , 4,50,000, , Dr., , 4,50,000, , To, Share Capital A/c, (Being the application money transferred, to E-share Capital A/c), 3., , Share Allotement A/c, , [15,000  50], , To, Share Capital A/c, , 4,50,000, , Dr., , 7,50,000, 6,00,000, , [15,000  40], , To, Security premium A/c [15,000  10], (Beging share allotment money due on 15,000, shares at Rs. 50 per share including premium.), 4., , Bank A/c, , 1,50,000, , Dr., , 7,50,000, , To, Equity Share Allotment A/c, (Being Share allotment money received, on 15,000 shares at Rs. 90 per share.), 5., , Share first and final call A/c, , [15,000  30], , To, Share Capital A/c, (Being share first and final call money due, on 15,000 shares at Rs. 30 per share.), , (`), , 7,50,000, , Dr., , 4,50,000, 4,50,000

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Sulalitha - Accountancy, , 6., , Bank A/c, , 103, , Dr., , [14,850  30], , 4,45,500, , To, Share first and final call A/c, (Being 1st and final call money received on, 14,850 shaers and calls in arrears on 150 shares.), 7., , Equity Share Capital A/c, , 4,45,500, , Dr., , [150  100], , 15,000, , To, Forfeited Share A/c [150  70], To, Share first and final call A/c, , 10,500, 4,500, , [150  30], , (Being forfeiture of 150 shares for the, non-payment of first and final of Rs. 30 per share.), 8., , Bank A/c [150  120], To, Share Capital A/c, , Dr., , 18,000, 15,000, , [150  100], , To, Securities Premium A/c [150  20], (Being re-issue of 150 forfeited shares, Rs. 100 per each at Rs. 120 per share.), 9., , Share forfeiture A/c, , 3,000, , Dr., , 10,500, , To Capital reserve A/c, (Being balance in Forfeiture Shares A/c, in respect of 150 re-issued forfeited shares, transferred to Capital Reserve A/c), 4., , 10,500, , The Rajesh Trading Company Ltd issued 10,000 shares of Rs. 10 each at a, premium of Rs. 2 per share payable as follows :, On Application, , Rs. 2 per share, , On Allotment, , Rs. 6 per share (including premium), , On First and Final Call Rs. 4 per share, All the shares were subscribed and company received all the money duly, received except the first and final call on 1,000 shares. These shares were, forfeited and only 800 shares are re-issued at Rs. 8/- each as fully paid up., Pass the Journal Entries regarding issue, and re-issue of forfeited shares., Soln: Journal Entries in the books of The Rajesh Trading Company, Ltd.,, Date Particulars, , LF Debit Credit, (`), , 1., , Bank A/c, , [10,000  2], , Dr., , 20,000, , To, Share Application A/c, (Being Share application money received, on 10,000 shares at Rs. 2 per share), 2., , Share Application A/c, To, Share Capital A/c, (Being the application money transferred, to share Capital A/c), , (`), , 20,000, , Dr., , 20,000, 20,000

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104, , Sulalitha - Accountancy, , 3., , Share Allotement A/c, , Dr., , [10,000  6], , To, Share Capital A/c, , 60,000, 60,000, , [10,000  4], , To, Security premium A/c [10,000  2], (Beging share allotment money due on 10,000, shares at Rs. 6 per share including premium.), 4., , Bank A/c, , 20,000, , Dr., , 60,000, , To, Equity Share Allotment A/c, (Being allotment money received, on 10,000 shares at Rs. 6 per share.), 5., , Share first and final call A/c, , [10,000  4], , 60,000, , Dr., , 40,000, , To, Share Capital A/c [10,000  4], (Being share first and final call money due, on 10,000 shares at Rs. 4 per share.), 6., , Bank A/c [9,000  4], , 40,000, , Dr., , 36,000, , To, Share first and final call A/c, (Being 1st and final call money received on, 9,000 shares at Rs. 4 per shar and, calls-in-arrears on 1000 shares.), 7., , Share Capital A/c, , Dr., , [10,000  10], , To, Forfeited Share A/c, , 36,000, , 10,000, 6,000, , [1000  6], , To, Share first and final call A/c, , 4,000, , [1000  4], , (Being forfeiture of 1000 shares for the, non-payment of first and final call of, Rs. 4 per share.), 8., , Bank A/c, , [800  8], , Frofeited Shares A/c A/c, , [800  2], , Dr., , 6,400, , Dr., , 1,600, , To, Share Capital A/c [800  10], (Being re-issue of 800 forfeited shares, at Rs. 8 per share as fully paid up.), 9., , Forfeited Shares A/c, , [800  4] (6  2), , To Capital reserve A/c, (Being balance in Forfeited shares A/c, in respect of 800 forfeited shares re-issued, transferred to Capital Reserve A/c), , 8,000, , Dr., , 3,200, 3,200

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Sulalitha - Accountancy, , 5., , 105, , ABC Company Ltd., issued 20,000 shares equity shares of Rs. 10 each. The, amount was payable as follows :, On Application, , Rs. 2 per share, , On Allotment, , Rs. 3 per share, , On First and Final Call Rs. 5 per share, All the shares were subscribed. Akash Holding 500 shares did not pay first, and final call money. The directors forfeited his shars and these shares were, re-issued to Sagar at Rs. 7 per share as fully paid up., Give the Journal Entries in the books of the Company., Soln: Journal Entries in the books of ABC Company Ltd.,, Date Particulars, , LF Debit Credit, (`), , 1., , Bank A/c, , Dr., , [20, 000  2], , 40,000, , To, Share Application A/c, (Being Share application money received, on 20,000 shares at Rs. 2 per share), 2., , Share Application A/c, , 40,000, , Dr., , 40,000, , To, Share Capital A/c, (Being share application money transferred, to share Capital A/c), 3., , Share Allotement A/c, , [20, 000  3], , 40,000, , Dr., , 60,000, , To, Share Capital A/c, (Beging share allotment money received, on 20,000 shares at Rs. 3 per share.), 4., , Bank A/c, , 60,000, , Dr., , [20,000  3], , 60,000, , To, Share Allotment A/c, (Being allotment money received, on 20,000 shares at Rs. 3 per share.), 5., , Share first and final call A/c, , [20, 000  5], , 60,000, , Dr., , 1,00,000, , To, Share Capital A/c [10,000  4], (Being share first and final call money due, on 20,000 shares at Rs. 5 per share.), 6., , Bank A/c, , [19,500  5], , To, Share first and final call A/c, (Being 1st and final call money received, on 9,000 shares and calls-in-arrears, on 500 shares.), , (`), , 1,00,000, , Dr., , 97,500, 97,500

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106, , Sulalitha - Accountancy, , 7., , Share Capital A/c, , Dr., , [500  10], , To, Forfeited Share A/c, , 10,000, 2,500, , [500  5], , To, Share first and final call A/c, , 2,500, , [500  5], , (Being forfeiture of 500 shares for the, non-payment of first and final call of, Rs. 5 per share.), 8., , Bank A/c, , [500  7], , Frofeited Shares A/c A/c, , [500  3], , Dr., , 3,500, , Dr., , 1,500, , To, Share Capital A/c [500  10], (Being re-issue of 500 forfeited shares, at Rs. 7 per share as fully paid up.), 9., , Forfeited Shares A/c, , 5,000, , Dr., , [500  2], , To Capital reserve A/c, (Being balance in Forfeited shares A/c, transferred to Capital Reserve A/c), , ***, , 1,000, 1,000

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Sulalitha - Accountancy, , 107, , Chapter-8, , Financial Statements of a Company, SECTION-A:, 1., , ONE MARK QUESTIONS, , Which of the following is shown under the head 'Fixed Assets.', a) Goodwill, , b) Patents, , c) Buildings, , d) All of the above, , Ans: All of the above., 2., , Give an example for current asset., , Ans: Current Investments., 3., , Write one objectives of financial statments., , Ans: To provide information about economic resources and obligations of a business., 4., , Financial Statements generally include,, a) Comparative Statement, , b) Fund Flow Statement, , c) Income Statement and Balance sheet, , d) None of the above, , Ans: c) Income statement and Balance sheet., 5., , Give one example for current liability., , Ans: Creditors., 6., , Share capital appears under the head _____________ ., , Ans: Share holders fund., 7., , Fixed assets are classified as tangible and _____________ assets., , Ans: Intangible., 8., , Share capital is shown as _________________ ., a) Authorised capital, , b) Issued Capital, , c) Subscribed capital, , d) All the above., , Ans: d) All the above., , SECTION-B:, 9., , TWO MARK QUESTIONS, , Mention two types of financial statments., , Ans: i) Statement of Profit and Loss, ii) Balance Sheet, 10., , State any two features of financial statements., , Ans: i) Recorded facts ;, , ii), , Legal Implications.

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108, , 11., , Sulalitha - Accountancy, , State any two objectives of financial statements., , Ans: i) To provide information about economic resources and obligations of a business., ii) To provide information about the earning capacity of the business., 12., , Give any two limitations of financial statements., , Ans: i) Lack of qualitative information., ii) They are only interim reports., iii) Assets may not realise., 13., , Mention any two items which are shown under the head 'Reserve and, Surplus.', , Ans: i) Capital Reserve, ii) Capital Redemption Reserve, 14., , State any two differences between current liabilities and non-current, liabilities., , Ans: Current liability is held by company for the purpose of trade and non-current, liabilities which is not for purpose of trade., 15., , State any two types of reserve., , Ans: i) Capital Reserve, ii) General Reserve, 16., , Name any two internal users of financial statements., , Ans: Creditors, Shareholders, Consumers., 17., , How will you disclose the following items in the balance sheet of a company,, i) Loose tools, , ii) 10% debentures, , Ans: i) Loose tools - Assets side under the head of current assets., ii) 10% debentures - Liability side under the head of non-current liabilities., 18., , What is Balance Sheet?, , Ans: Balance sheet means a position statement of a company. It is a statement of equity,, liabilities and assets stating the financial positions of an enterprise at a given date., , SECTION-C: SIX MARK QUESTIONS, 1., , From the following information, prepare statement of profit and loss for the, year ended 31.03.2019 as per schedule III of the Companies Act, 2013., Particulars, Revenue from operations, Other Income, , Rs., 8,00,000, 50,000, , Cost of Materials Consumed, , 2,00,000, , Employee benefit Expenses, , 1,00,000, , Depreciation and Amortization, Tax, , 50,000, 30%

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Sulalitha - Accountancy, , 109, , Statement of Profit and Loss for the year ending 31.03.2019, , Ans:, , Particulars, I, , Note No., , Income, i), , Revenue from Operations, , ii), , Other Income, , 8,00,000, 50,000, , Total Revenue, II, , 8,50,000, , Expenses, i), , Cost of materials consumed, , 2,00,000, , ii), , Employee benefit expenses, , 1,00,000, , iii) Depreciation and Amotization, , 50,000, , Total Expenses, , 3,50,000, , III Profit Before Tax (I – II) (PBT), , 5,00,000, , Less : Tax at 30% (PBT x Tax. Rate), , 1,50,000, , Profit for the year (PAT), , 2., , (`), , 3,50,000, , Following Information is related to Akash Ltd., Particulars, , Rs., , Revenue from operations, , 5,00,000, , Purchases, , 3,00,000, , Salary, , 10,000, , Depreciation, , 8,000, , Interest on Loan, , 5,000, , Tax, , 54,000, , Prepare a statement of profit and loss for the year ended 31.03.2017 as per, schedule III of companies act, 2013., Statement of Profit and Loss for the year ending 31.03.2017, , Ans:, , Particulars, I, , Note No., , (`), , Income, i), , Revenue from Operations, , ii), , Other Income, Total Revenue, , 5,00,000, --5,00,000

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110, , Sulalitha - Accountancy, , II, , Expenses, i), , Purchase of goods, , 3,00,000, , ii), , Employee benefit expenses (Salary), , 10,000, , iii) Finance cost (Interest on loan), , 5,000, , iv), , 8,000, , Depreciation, Total Expenses, , 3,23,000, , III Profit Before Tax (PBT) (I – II), , 1,77,000, , Less : Tax (Income), , 54,000, , Profit after Tax (PAT), 3., , 1,23,000, , From the following information prepare statement of profit and loss for the, yer ended 31-03-2018 as per schedule III of Companies Act, 2013., Particulars, , Rs., , Revenue from operations, , 5,00,000, , Purchase of goods, , 3,00,000, , Salary to employees, , 40,000, , Leave encashment, , 10,000, , Rent and Taxes, , 30,000, , Repairs to Machinery, , 20,000, , Tax, , 30%, Statement of Profit and Loss for the year ending 31.03.2018, , Ans:, , Particulars, I, , Note No., , Income, i), , Revenue from Operations, , ii), , Other Income, , 5,00,000, ---, , Total Revenue (A), II, , (`), , 5,00,000, , Expenses, i), , Purchase of goods, , ii), , Employee benefit expenses (Salary), , 3,00,000, , Salaries to employees, , 40,000, , leave enchshment, , 10,000, , 50,000, , iii) Other Expenses, Rent and Taxes, , 30,000, , Repairs to Machinery, , 20,000, , Total Expenses (B), , 50,000, 4,00,000

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Sulalitha - Accountancy, , 111, , III Profit Before Tax (PBT) (A – B), , 1,00,000, , , , 30 , , , , , , Less : Tax at 30% (on PBT) 1,00,000  100 , , 30,000, , Profit after Tax (PAT), 4., , 70,000, , From the following details you are required to prepare statement of profit, and loss for the year ended 31.03.2018., Particulars, , Rs., , Plant and Machinery, , 40,000, , Furniture, , 20,000, , Share Capital, , 4,00,000, , Sales, , 3,00,000, , Purchases, , 1,80,000, , Trade Payables, , 30,000, , Depreciation on Plant Machinery, , 4,000, , Amortisation of Goodwill, , 6,000, , Interest on Debentures, , 30,000, , Interest on Borrowings, , 20,000, , Tax, , 30%, , Statement of Profit and Loss for the year ending 31.03.2018, , Ans:, , Particulars, I, , Note No., , Income, i), , Revenue from Operations (Sales), , ii), , Other Income, , 3,00,000, ---, , Total Revenue (A), II, , (`), , 3,00,000, , Expenses, i), , Purchase, , ii), , Finance Cost, , 1,80,000, , Interest on Debentures, , 30,000, , Interest on Borrowings, , 20,000, , 50,000, , iii) Depreciation on Plant and Machinery, , 4,000, , iv), , 6,000, , Amortization of Goodwill, Total Expenses (B), , 2,40,000, , III Profit Before Tax (PBT) (A – B), , 60,000, , , , 30 , , , , , , Less : Tax at 30% (on PBT)  6,00,000  100 , Profit after Tax (PAT), , 18,000, 42,000

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112, , 5., , Sulalitha - Accountancy, , The following information is related to Harish Ltd., Particulars, , Rs., , Cash sales, , 2,00,000, , Credit Sales, , 3,00,000, , Sales Retures, , 20,000, , Cost of materials consumed, , 3,00,000, , Buildings, , 2,00,000, , Machinery, , 1,50,000, , Bad debts, , 5,000, , Tax, , 42,000, , Note: Depreciation on buildings and machinery at 10% each., Prepare Statements of Profit and Loss for the year ending 31.3.2019 as per, companies Act, 2013., Statement of Profit and Loss for the year ending 31.03.2019, , Ans:, , Particulars, I, , Note No., , (`), , Income, i), , Revenue from Operations (Sales), Cash Sales, , 2,00,000, , Credit Sales, , 3,00,000, 5,00,000, , Less: Sales retursn, , 20,000, , Total Revenue (A), II, , 4,80,000, 4,80,000, , Expenses, i), , Cost of materials consumed, , 3,00,000, , ii), , , Depreciation on building  2,00,000 , 100 , , 10, , , , 20,000, , , , 10, , , iii) Depreciation on machinery 1,50,000 , , 100, , , iv), , Bad debts, , 15,000, , , , 5,000, , Total Expenses (B), , 3,40,000, , III Profit Before Tax (PBT) (A – B), , 1,40,000, , Less : Tax, Profit after Tax (PAT), , 42,000, 98,000

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Sulalitha - Accountancy, , 6., , 113, , From the following information prepare statement of profit and loss for the, year ending 31.3.2020., Particulars, , Rs., , Revenue from Operations, , 5,00,000, , Other Incomes, , 20,000, , Employee benefit expenses, , 60,000, , Cost of materials consumed, , 3,00,000, , Other expenses, , 40,000, , Income tax, , 30%, , Statement of Profit and Loss for the year ending 31.03.2020, , Ans:, , Particulars, I, , Note No., , Income, i), , Revenue from Operations, , ii), , Other Income, , 5,00,000, 20,000, , Total Revenue (A), II, , 5,20,000, , Expenses, i), , Employee benefit expenses, , 60,000, , ii), , Cost of materials consumed, , 3,00,000, , iii) Other expenses, , 7., , (`), , 40,000, , Total Expenses (B), , 4,00,000, , III Profit Before Tax (PBT) (A – B), , 1,20,000, , , , 30 , , , , , , Less : Tax 1,20,000  100 , , 36,000, , Profit after Tax (PAT), , 84,000, , From the following particulars prepare statement of profit and loss for the, year ending 31.3.2017 and calculate profit before tax., Particulars, , (`), , (`), , Plant and Machinery, , 1,60,000, , ---, , Land, , 6,75,000, , ---, , 16,000, , ---, , Purchases, , 4,00,000, , ---, , Closing Stock, , 1,50,000, , ---, , Wages, , 1,20,000, , ---, , ---, , 10,00,000, , Depreciation on Plant and Machinery, , Sales (Net)

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114, , Sulalitha - Accountancy, , Salaries, , 80,000, , ---, , Bank overdraft, , ----, , 2,00,000, , 10% Debentures (Issued on 1.4.2016), , ----, , 1,00,000, , Equity share Capital, , ----, , 2,00,000, , Preference share Capital, , ----, , 1,00,000, , 16,00,000, , 16,00,000, , Additional Information :, i) Equity dividend at 10% declared on paid up capital., ii) Dividend on the preference share capital paid in full., iii) Rs. 2,00,000 transferred to general reserve., Statement of Profit and Loss for the year ending 31.03.2017, , Ans:, , Particulars, I, , Note No., , Income, i), , Revenue from Operations, , 10,00,000, , Total Income (A), II, , (`), , 10,00,000, , Expenses, i), , Cost of materials consumed, , ii), , Employee benefit expenses, 10, , 4,00,000, 1, , 2,00,000, , , , iii) Finance cost 1,00,000  100 , , , , 10,000, , iv), , 16,000, , Depreciation and amortisation, Total Expenses (B), , 6,26,000, , III Profit Before Tax (PBT) (A – B), , 3,74,000, , Notes to Accounts:, Employee benefit Expenses ;, Wages, , 1,20,000, , Salary, , 80,000, 2,00,000

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Sulalitha - Accountancy, , 115, , PREPARATION OF BALANCE SHEET OF A COMPANY, 8., , From the following information prepare balance sheet of Jindal Company, Ltd. as at 31.03.2018 as per schedule III of Companies Act, 2013., Particulars, , Rs., , Share Capital, , 10,00,000, , Reserve and Surplus, , 5,00,000, , 10% Debentures, , 5,00,000, , Creditors, , 2,00,000, , Bills payable, , 3,00,000, , Fixed Assets, , 15,00,000, , Trade Receivables, , 5,00,000, , Short term Investments, , 2,00,000, , Cash and Cash equivalents, , 3,00,000, , Balance Sheet as on 31.03.2021, , Ans:, , Particulars, I, , (`), , Equity and Liabilities, 1., , 2., , Shreholders fund, a), , Share Capital, , b), , Reserves and Surplus, , 5,00,000, , Long term borrowings, 10% Debentures, , 3., , 10,00,000, , Non-Current Liabilities, a), , 5,00,000, , Current Liabilities, a), , Trade Payables, Creditors, , 2,00,000, , Bills Payable, , 3,00,000, , Total, II, , Note No., , 25,00,000, , Assets, 1., , Non-Current Assets, Tangible Assets, a), , 2., , Fixed assets, , 15,00,000, , Current Assets, a), , Trade Receivables, , 5,00,000, , b), , Short term Investments, , 2,00,000, , c), , Cash and Cash Equivalents, , 3,00,000, , Total, , 25,00,000

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116, , 9., , Sulalitha - Accountancy, , From the following information prepare balance sheet for the year ending, 31.3.2018 as per schedule III of Companies Act, 2013., Particulars, , Rs., , Inventories, , 7,00,000, , Equity Share Capital, , 16,00,000, , Plant and Machinery, , 8,00,000, , Preference Share Capital, , 6,00,000, , General Reserve, , 6,00,000, , Creditors, , 3,50,000, , Provision for Taxation, , 2,50,000, , Land and Building, Cash at Bank, 12% Debentures, , 26,00,000, 5,00,000, 12,00,000, , Balance Sheet as on 31.03.2018, , Ans:, , Particulars, I, , (`), , Equity and Liabilities, 1., , 2., , Shreholders fund, a), , Share Capital, , b), , Preference Share Capital, , 6,00,000, , c), , Reserve and Surplus, , 6,00,000, , Long term borrowings, 12% Debentures, , 3., , 16,00,000, , Non-Current Liabilities, a), , 12,00,000, , Current Liabilities, a), , Creditors, , 3,50,000, , Provision for Taxation, , 2,50,000, , Total, II, , Note No., , 46,00,000, , Assets, 1., , Non-Current Assets, Tangible Assets, a), , 2., , Fixed assets, Plant and Machinery, , 8,00,000, , Land and Buildings, , 26,00,000, , Current Assets, a), , Inventories, , 7,00,000, , c), , Cash at Bank, , 5,00,000, , Total, , 46,00,000

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Sulalitha - Accountancy, , 10., , 117, , From the following trial balance prepare balance sheet of Star Ltd. for the, year ending 31.3.2018 as per schedule III of Companies Act, 2013., Sl., No., , Particulars, , Debit, , Credit, , (` ), , (` ), , 1., , Equity Share Capital, , -, , 2,00,000, , 2., , Preference Share Capital, , -, , 3,00,000, , 3., , Reserves and Surplus, , -, , 3,00,000, , 4., , Sales, , -, , 5,00,000, , 5., , Other non-current liabilities, , -, , 2,00,000, , 6., , Tangible Assets, , 4,00,000, , -, , 7., , Intangible Assets, , 2,50,000, , -, , 8., , Salaries, , 90,000, , -, , 9., , Printing and Stationary, , 30,000, , -, , 10., , Rent, , 80,000, , -, , 11., , Purchases, , 3,00,000, , -, , 12., , Trade Receivables, , 3,50,000, , -, , 15,00,000, , 15,00,000, , Total, , Balance Sheet of Star Ltd. for the year ending 31.03.2018, , Ans:, , Particulars, I, , (`), , Equity and Liabilities, 1., , 2., , Shreholders fund, a), , Share Capital, , 2,00,000, , b), , Preference Share Capital, , 3,00,000, , c), , Reserve and Surplus, , 3,00,000, , Non-Current Liabilities, , 2,00,000, , Total, II, , Note No., , 10,00,000, , Assets, 1., , Non-Current Assets, a), , 2., , Fixed assets, Tangible Assets, , 4,00,000, , Intangible Assets, , 2,50,000, , Current Assets, a), , Trade Receivables, Total, , 3,50,000, 10,00,000

Page 119 :
118, , 11., , Sulalitha - Accountancy, , From the following information prepare balance sheet of Surya Ltd. for the, year ending 31st March, 2018 as per Schedule III of Companies Act, 2013., Particulars, , (` ), , Equity share capital, , 20,00,000, , Inventories, , 14,00,000, , Plant and Machinery, , 10,00,000, , Preference share Capital, , 12,00,000, , Debenture Redemption Reserve, , 6,00,000, , Outstanding Expenses, , 3,00,000, , Proposed dividend, , 5,00,000, , Land and Buildings, Current Investments, Cash Equivalents, Short term loan from Z Ltd., Public Deposit, , 20,00,000, 8,00,000, 10,00,000, 4,00,000, 12,00,000, , Balance Sheet of Surya Ltd. for the year ending 31.03.2018, , Ans:, , Particulars, I, , Note No., , (`), , Equity and Liabilities, 1., , Shreholders fund, a), , Share Capital, , 20,00,000, , b), , Preference Share Capital, , 12,00,000, , c), , Reserve and Surplus, Debenture Redemption Reserve, , 2., , 6,00,000, , Non-Current Liabilities, a), , Short term borrowing, i) Short term loan from Z Ltd., ii) Pubic Deposit, , b), , 12,00,000, , Other current liabilities, i) Outstanding expenses, , c), , 4,00,000, , 3,00,000, , Short-term provisions, Proposed dividend, Total, , 5,00,000, 62,00,000

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Sulalitha - Accountancy, , II, , 119, , Assets, 1., , Non-Current Assets, Tangible Assets, a), , 2., , Fixed assets, Plant and Machinery, , 10,00,000, , Land and Buildings, , 20,00,000, , Current Assets, a), , Current Investments, , b), , Inventories, , 14,00,000, , c), , Cash and Cash equivalents, , 10,00,000, , Total, , 8,00,000, , 62,00,000, , * * *