Read the following hypothetical text and answer the given questions: Dr. Rajani Mehta a qualified M.B.B.S. doctor got voluntary retirement at the age of 50 years from a renowned hospital. She was residing in a flat of a wide apartment which is surrounded by a slum which is inhabited by economically weaker strata of the society. As the people in that area were not aware about importance of health care, a widespread ailment had been persistently prevailing. Rajani met with some of the well-off people of apartment and decided to open a dispensary named as `LOCAL Clinic’ to provide them cost free medical assistance and make them aware about hygienic living, physical fitness, and economic balance diet. Many of the apartment members agreed to it. She approached health department of the town with her proposal which was accepted and an initial one time grant of Rs..2,00,000 was sanctioned immediately for purchase of medical equipment and test kits for pathological tests. 10 members of the apartment contributed Rs..20,000 each as lifetime subscription to the clinic. Rajni decided to charge Rs.10 as one time registration fee from patients. Apart from above Rajni made following transactions for first year.

Rajni informed that during the first year 10,500 patients were registered for treatment and for other services. Taking reference from the above, answer following questions.
1.Not for profit organization prepares
(i) Income and Expenditure account
(ii) Trading and Profit loss account
(iii) Receipt and Payment account
(iv) None of the above
(a) Only (ii)
(b) Only (iii)
(c) Both (i) and (ii)
(d) Both (i) and (iii)2.Honorarium paid to Physiotherapist and sports teacher Will be posted to
(a) Debit side of Income and Expenditure Account.
(b) Debit side of Receipt and Payment Account.
(c) Debit side of Profit and Loss Account. 
(d) Credit side of Income And Expenditure account.
3.State whether the following statements are true or false: “Donations received by Ms Rajani Mehta from health department should be capitalized.”
4.Lifetime subscription paid by 10 members will be posted in
(a) Expenditure side of Income and Expenditure Account
(b) Liability side of closing Balance Sheet
(c) Income side of Income and Expenditure Account
(d) Assets side of closing Balance Sheet

Sterlingenterprises is a partnership business with Ryan, Williams and Sania as partners engaged in production and sales of electrical items and equipment.
Their capital contributions were Rs.50,00,000, Rs.50,00,000 and Rs.80,00,000 respectively with the profit the sharing ratio of 5:5:8. As they are now looking forward to expanding their business, it was decided that they would bring in sufficient cash to double their respective capitals.
This was duly followed by Ryan and Williams but due to unavoidable reasons Sania could not do so and ultimately it was agreed that to bridge the shortfall in the required capital a new partner should be admitted who would bring in the amount that Sania could not bring and that the new partner would get share of profits equal to half of Sania’s share which would be sacrificed by Sania only. Consequent to this agreement Ejaz was admitted and he brought in the required capital and Rs.30,00,000 as premium for goodwill. Based on the above information you are required to answer the following questions.
1.What will be the new profit-sharing ratio of Ryan, Williams, Sania and Ejaz?
(a) 1:1:1:1
(b) 5:5:8:8
(c) 5:5:4:4
(d) None of the above 
2.What is the amount of capital brought in by the new partner Ejaz?
(a) Rs.50,00,000
(b) Rs.80,00,000
(c) Rs.40,00,000
(d) Rs.30,00,000
3.What is the value of the goodwill of the firm?
(a) Rs.1,35,00,000
(b) Rs.30,00,000
(c) Rs.1,50,00,000
(d) Cannot be determined from the given date
4.What will be correct journal entry for distribution of Premium for Goodwill brought in by Ejaz?
(a)

(b) 

(c)
 

(d)

Talent sports Club is engaged in the activity of identifying and promoting sports talent from rural and tribal areas of the country. Identifying with this Noble cause Mr Manohar a renowned industrialist donated Rs. 50,00,000 on 1stJuly 2020, for the construction of a new hostel and mess for upcoming sportsmen.
Besides this Mr Manohar offered the services of his personal chartered accountant,free of charge, to streamline the account of Total Sports Club. The chartered accountant visited the office of the NPO on 31st March 2021 and found that till date rupees 35,00,000 had been spent on construction of hostel and mess building. he also noted that the NPO had a capital fund of Rs.1,20,00,000 in the beginning of the year. Other important points that he noted were that NPO had 2000 regular members each having an annual subscription of Rs.2000 per annum.
On 1st April 2020, 180 members had not paid for subscription of previous year and 20 members had paid for 2020-2021 in advance (out of which 5 had paid advance of 2021- 2022 as well) 31st March 2021, 110 Members he had outstanding balance (hey including 50 who had not paid for 2019-20 as well) and 25 members had paid for 2021- 2022 in advance (including all 5 who had paid in advance in 2019-20) Since the accountant of NPO was not clear about how to deal with all the above information he drafted a set of questions for guidance. Considering that you are the Chartered Accountant of Mr. Manohar answer the following questions based on the information detailed above.
1.The amount of Rs. 50,00,000 received from Mr Manohar towards building and mess should be transferred to

2.The amount of Rs. 35,00,000 spent on construction of building should be:
I. reflected on debit side of income and expenditure account as an expense.
II. reflected on asset side of balance sheet.
III. reflected as a deduction from Building fund and addition to capital fund.
IV. Not be recorded till the building is complete.
On basis of given information choose which of the following stands true

3.The amount of subscription in arears on 1st April 2020 is:

4.The amount of subscription in arears on 31^st March 2021 is

5.The amount of subscription in advance on 31st March 2021 is:

6.The amount of subscription to be transferred to income and expenditure account for the year ended 31st March 2021 is:

Nidiya limited was incorporated on 1st April 2017 with registered office in Mumbai. The capital clause of memorandum of Association reflected a registered capital of 8,00,000 equity shares of Rs.10 each and 1,00,000 preference shares of Rs.50 each.
Since some large investments were required for building and machinery the company in consultation with vendors,Ms.VPS Enterprises, issued 1,00,000 equity shares and 20,000 preference shares at par to them in full consideration of assets acquired. Besides this the company issued 2,00,000 equity shares for cash at par payable as Rs 3 on application, 2 on allotment, 3 on first call and 2 on second call.
Till date second call has not yet been made and all the shareholders have paid except Mr. Ajay who did not pay allotment and calls on his 300 shares and Mr. Vipul who did not pay first call on his 200 shares. Shares of Mr. Ajay were then forfeited and out of them 100 shares were reissued at Rs.12 per share.
Based on above information you are required to answer the following questions.
1.Shares issue to vendors of building and machinery, Ms. VPS Enterprises, would be classified as:

2.How many equity shares of the company have been subscribed?

3.What is the amount of security premium reflected in the balance sheet at the end of the year?

4.What amount of share forfeiture would be reflected in the balance sheet?

Read the following hypothetical extract of Rehan Limited and answer the given questions on the basis of the same:

1.Current Ratio for the year 2020 will be_______________ (Choose the correct alternative)

2.Quick Ratio for the year 2018 will be______________(Choose the correct alternative)

3.Inventory turnover ratio for the year 2020 will be______(Choose the correct alternative)

4.Cost of Revenue from Operations for the year 2020 would be ________(Choose the correct alternative)

Read the following hypothetical text and answer the given questions on the basis of the same: Krishika an alumni of IIM Ahemdabad initiated her startup Krishika Ltd. in 2018. The profits of Krishika Ltd. in the year 2019-20 after all appropriations was ₹ 31,25,000. This profit was arrived after taking into consideration the following items:-

Additional Information:-

1.Net Profit before tax will be Rs.……………………………. (Choose the correct alternative)

2.Operating profit before working capital changes will be ₹…………………… (Choose the correct alternative)

3.Cash from operating activities before tax will be __________(Choose the correct alternative) 

 4.Cash flow from Operating Activities will be₹…………………… (Choose the correct alternative)

Read the following hypothetical text and answer the given questions:
Amit and Mahesh were partners in a fast-food corner sharing profits and losses in ratio 3:2. They sold fast food items across the counter and did home delivery too. Their initial fixed capital contribution was Rs.1,20,000 and Rs.80,000 respectively. At the end of first year their profit was Rs. 1,20,000 before allowing the remuneration of Rs..3,000 per quarter to Amit and Rs..2,000 per half year to Mahesh. Such a promising performance for first year was encouraging, therefore, they decided to expand the area of operations. For this purpose, they needed a delivery van, a few Scotties and an additional person to support. Six months into the accounting year they decided to admit Sundaram as a new partner and offered him 20% as a share of profits along with monthly remuneration of Rs. 2,500. Sundaram was asked to introduce Rs.1,30,000 for capital and Rs..70,000 for premium for goodwill. Besides this Sundaram was required to provide Rs.1,00,000 as loan for two years. Sundaram readily accepted the offer. The terms of the offer were duly executed and he was admitted as a partner
1.Remuneration will be transferred to _______________ of Amit and Mahesh at the end of the accounting period.

2.Upon the admission of Sundaram the sacrifice for providing his share of profits would be done

3.Sundaram will be entitled to a remuneration of _____________at the end of the year.
4.While taking up the accounting procedure for this reconstitution the accountant of the firm Mr. Suraj Marwaha faced a difficulty. Solve it be answering the following: For the amount of loan that Sundaram has agreed to provide, he is entitled to interest thereon at the rate of ____________.

Read the following hypothetical text and answer the given questions: Amit and Mahesh were partners in a fast-food corner sharing profits and losses in ratio 3:2. They sold fast food items across the counter and did home delivery too. Their initial fixed capital contribution was Rs.1,20,000 and Rs.80,000 respectively.
At the end of first year their profit was Rs. 1,20,000 before allowing the remuneration of Rs..3,000 per quarter to Amit and Rs..2,000 per half year to Mahesh. Such a promising performance for first year was encouraging, therefore, they decided to expand the area of operations.
For this purpose, they needed a delivery van, a few Scotties and an additional person to support. Six months into the accounting year they decided to admit Sundaram as a new partner and offered him 20% as a share of profits along with monthly remuneration of Rs. 2,500. Sundaram was asked to introduce Rs.1,30,000 for capital and Rs..70,000 for premium for goodwill. Besides this Sundaram was required to provide Rs.1,00,000 as loan for two years.
Sundaram readily accepted the offer. The terms of the offer were duly executed and he was admitted as a partner
1.Remuneration will be transferred to _______________ of Amit and Mahesh at the end of the accounting period.

2.Upon the admission of Sundaram the sacrifice for providing his share of profits would be done

3.Sundaram will be entitled to a remuneration of _____________at the end of the year.
4.While taking up the accounting procedure for this reconstitution the accountant of the firm Mr. Suraj Marwaha faced a difficulty. Solve it be answering the following:
For the amount of loan that Sundaram has agreed to provide, he is entitled to interest thereon at the rate of ____________.

Interest on partner’s capital is :

Goodwill is a/an :

Good will is valued as two years purchase of the average profits of three previous years are Rs. 15000, the value of good-will be:

Good will of the firm is valued Rs. 30000. C an incoming partner purchase 1/4 share of total profit Good will be raised in the books.

The circumstances when change in profit sharing ratio is needed:

Profit or loss on revaluation is shared among the partners in:

Who should compensate to whom in case of change in profit sharing ratio of existing partners?

Good will of the firm is valued Rs. 30000. C an incoming partner purchase 1/4 share of total profit Good will be raised in the books.

In the revaluation account an increase in the value of land and building:

On the reconstitution of a firm change in the value of assets is called ________

Goodwill is a/an :

Which is not a method to calculate the goodwill?

At the time of admission of a new partner, general reserve is:

In the revaluation account a decrease in the value of plant and machinery:

An account prepared to carry out the scheme of revaluation of assets and reassessment of liabilities :

Capital employed by a partnership firm is Rs10,00,000.Its average profit is Rs 1,20,000. The normal rate of return in similar type of business is 10%. What is the amount of super profits?

Profit or loss on revaluation is shared among the partners in:

An incoming partner pays his share of good will in cash, and profit sharing ration of old partner is changed, Good – will be distributed among old partners:

In the revaluation account an increase in the value of land and building:

The circumstances when change in profit sharing ratio is needed:

Capital employed by a partnership firm is Rs10,00,000.Its average profit is Rs 1,20,000. The normal rate of return in similar type of business is 10%. What is the amount of super profits?

According to AS 26, which goodwill is recorded in the books:

At the time of admission an incoming partner contributes as goodwill:

At the time of a new partner Good will:

On the reconstitution of a firm change in the value of assets is called ________

Good will is valued as two years purchase of the average profits of three previous years are Rs. 15000, the value of good-will be:

State any two deductions that may have to be made from the amount payable to the legal representative of a deceased partner.

A, B and C wer  partners in a firm sharing profits in 2 : 3 : 5 ratio.  A was guaranteed a minimum profit of Rs. 1,00,000.  Any deficiency on this account was to be borne by C.  The net profit of the firm for the year ended 31.3.2006 was Rs. 4,50,000.  Prepare Profit and Loss Appropriation Account of A, B and C for the year ended 31.3.2006.

R and T are partners in a firm sharing profits in the ratio of 3:2. S join the firm , R giving him 1/4th of his share and T giving 1/5th of his share. Find the new profit sharing ratio of partners.

Sachin,Sehwag and Jadeja are partners in a firm sharing profits in the ratio of 5:3:2 Calculate sacrificing and gaining ratios in the following cases.also find new ratio where needed.
(i) They decide to share future profits in the ratio 6:4:3.
(ii)Sehwag sacrifices 1/3 rd of his share in favour of Sachin.
(iii)Jadeja acquires 1/5th share from Sachin.
(iv) Jadeja acquires 1/5th share equally from Sachin and Sehwag..

Non-profit organizations prepare all of the following accounts except the

When cash is received for life membership, which one of the following double entries is passed?

Which of the following is regarded as apt to show the purchase of a fixed asset?

The balance sheet of a non-profit organization such as a charitable hospital doesn’t contain the

Income and expenditure accounts show

Which of the following is not considered as Cash Equivalents?

Cash deposit with the bank with a maturity date after two months belongs to which of the following in the cash flow statement.

Purchase of building results in

Payment of dividend is

 Which of the following is not source of cash?

Quick ratio of a company is 1.5:1. State giving reason whether the ratio will improve, decline or not change on payment of dividend by the company.

The debt-equity ratio of a company is 0.8:1. State whether the long-term loan obtained by the company will improve, decrease or not change the ratio.

The inventory turnover ratio of a company is 3 times. State, giving reason, whether the ratio improves, declines or does not change because of increase in the value of closing inventory by Rs.5,000.

The trade receivables turnover ratio of a company is 6 times. State with reason whether the ratio will improve, decrease or not change due to increase in the value of closing inventory by Rs.50,000.

What will be the operating profit ratio if operating ratio is 83.64%? 

What are the objectives of financial statement

What are the importance of financial statement

Reserve and surplus are comes in which head

Secured loans are

What are the tools of financial management

Name the two basic financial statements of a company as per Schedule III part I of the Companies Act,2013.

What is the number of major heads which appear for the assets items of company's Balance Sheet?

What is the number of major heads which appear for the equity and liabilities items of company's Balance Sheet?

Which section of the Companies Act 2013, requires the Balance Sheet to be prepared in the prescribed form?

Which Schedule and act prescribes the form for Companies Balance Sheet?

What type of debentures can be issued by an Indian company?

When debentures are issued as secondary securities it is called

When debentures are issued at a discount, should be written off the discount

Debenture holders are

Premium on redemption of debentures is in the nature of

Balance of forfeiture a/c after the shares have been re-issued is transferred to:

Interest on calls in advance is:

Other name for registered capital is:

The minimum share application money is:

Which of the following statement is true:

If all the partners, but one, are solvent it is:

Loss on realization is distributed among partners:

Loss on realization is:

If no provision is made in agreement regarding the duration of the partnership:

A person who declares by word of mouth as partner of the firm is called:

The partnership may come to an end due to the:

In case of retirement of a partner full good will is credited to the accounts of:

The accounting procedure at the retirement of partner is valued:

Partners equity is effected due to:

An account operated to ascertain the loss or gain at the death of a partner is called:

 Which of the following is responsible for the Reconstitution of Partnership?

What is the meaning of change in the profit sharing ratio:

On the reconstitution of a firm change in the value of assets is called ________

Any change in the relations of partners without affecting the existing of partnership firm is called ____

Who is a sacrificing partner :

At the time of admission of a new partner the firm is:

At the time of admission an incoming partner contributes as goodwill:

Good will is valued as two years purchase of the average profits of three previous years are Rs. 15000, the value of good-will be:

At the time of admission of a new partner, general reserve is:

At the time of a new partner Good will:

Loss is distributed among the partners:

A partnership deed is silent for the payment of interest on partners’s loan but there was a loss instead of profits during the year 2013-14. At what rate will the interest on partner’s loan be allowed?

Interest on partner’s capital is :

Goodwill is a/an :

Who should compensate to whom in case of change in profit sharing ratio of existing partners?

Loss is distributed among the partners:

A partnership deed is silent for the payment of interest on partners’s loan but there was a loss instead of profits during the year 2013-14. At what rate will the interest on partner’s loan be allowed?

Capital employed by a partnership firm is Rs10,00,000.Its average profit is Rs 1,20,000. The normal rate of return in similar type of business is 10%. What is the amount of super profits?

Interest on partner’s capital is :

Profit or loss on revaluation is shared among the partners in:

Dinesh, Yasmine and Faria are partners in a firm, sharing profits and losses in 11 : 7 : 2 respectively. The Balance Sheet of the firm as on 31st Dec. 2001 was as follows:

On the same date, Annie is admitted as a partner for on-sixth share in the profits with Capital of Rs.4,500 and necessary amount for his share of goodwill on the following items:-
a. Furniture of Rs.2,400 were to be taken over by Dinesh, Yashmine and Faria equally.
b. A Liability of Rs.1,670 be created against Bills discounted.
c. Goodwill of the firm is to be valued at 2.5 years purchase of average profits of 2 years. The profits are as under.
2000 - Rs.2,000 and 2001 - Rs.6,000
d. Drawings of Dinesh, Yasmine, and Faria were Rs.2,750; Rs.1,750; and Rs.500 Respectively.
e. Machinery and Public Deposits are revalued to Rs.2,000 and Rs.1,000 respectively
Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm.

X and Y are partners as they share profits in the proportion of 3 : 1 their balance sheet as at 31.03.07 as follows.

On the ame date, Z is admittedf into partnership for 1/5^th share on the following terms
a. Goodwill is to be valued at 31/2 years purchase of average profits of last for year which were Rs.20,000 Rs.17,000 Rs.9,000 (Loss) respectively.
b. Stock is fund to be overvalue by Rs.2,000 Furniture is reduced and Land to be appreciated by 10% each, a provision for Bad Debts @ 12% is to be created on Debtors and a Provision of Discount of Creditors @ 4% is to be created.
c. A liability to the extent of Rs.1,500 should be created for a claim against the firm for damages.
d. An items of Rs.1,000 included in Creditors is not likely to be claimed, and hence it should be written off.
Prepare Revaluation Account, Partners: Capital Accounts and Balance Sheet of the new firm if Z is to contribute proportionate capital and goodwill. The capital partners are to be in profit sharing ratio by opening current Accounts.

Rashmi and Pooja are partners in a firm. They share profits and losses in the ratio of 2 : 1. They admit Santosh into partnership firm on the condition that she will bring Rs. 30,000 for Goodwill and will bring such an amount that her capital will be 1/3 of the total capital of the new firm. Santosh will be given 1/3 share in future profits. At the time of admission of Santosh, the Balance Sheet of Rashmi and Pooja was as under:

It was decided to:
a. revalue stock at Rs. 45,000.
b. depreciated furniture by 10% and machinery by 5%.
c. made provision of Rs. 3,000 on sundry debtors for doubtful debts. Prepare Revaluation Account, Partners: Capital Accounts and Balance Sheet of the new firm. Give full workings.

A, Band C were partners in a firm sharing profits equally: Their Balance Sheet on.31.12.2007 stood as:

It was mutually agreed that C will retire from partnership and for this purpose following terms were agreed upon) Goodwill to be valued on 3 years’ purchase of average profit of last 4 years which were 2004 : Rs.50,000 (loss); 2005 : Rs. 21,000; 2006: Rs.52,000; 2007 : Rs.22,000.
ii) The Provision for Doubtful Debt was raised to Rs. 4,000.
iii) To appreciate Land by 15%.
iv) To decrease Plant and Machinery by 10%.
v) Create provision of Rs;600 on Creditors.
vi) A sum of Rs.5,000 of Bills Payable was not likely to be claimed.
vii) The continuing partners decided to show the firm’s capital at 1,00,000 which would be in their new profit sharing ratio which is 2:3. Adjustments to be made in cash
Make necessary accounts and prepare the Balance Sheet of the new partners.

6 Anil, Jatin and Ramesh were sharing profit in the ratio of 2 : 1 : 1. Their Balance Sheet as at 31.12.2001 stood as follows:-

Ramesh died on 31st March 2002. The following adjustments were agreed upon-
(a) Building be appreciated by Rs. 2,000
(b) Investments be valued at 10% less than the book value.
(c) All debtors (except 20% which are considered as doubtful) were good.
(d) Stock be increased by 10 %
(e) Goodwill be valued at 2 years’ purchase of the average profit of the past five years.
(f) Ramesh’s share of profit to the death be calculated on the basis of the profit of the preceding year. profit for the years 1997, 1998, 1999 and 2000 were Rs. 26,000, Rs. 22,000, Rs. 20,000 and Rs. 24,000 respectively.

X and Y, two partners, drew for private use Rs 2,40,000 and Rs 1,60,000. Interest is chargeable @6% per annum on the drawings. What is the total interest?

P and Q are partners with capitals of Rs.6,00,000 and Rs.4,00,000 respectively. The profit and Loss Account of the firm showed a net Profit of Rs.4,26,800 for the year. Prepare Profit and Loss account after taking the following into consideration:-
(i) Interest on P's Loan of Rs.2,00,000 to the firm
(ii) Interest on 'capital to be allowed @ 6% p.a.
(iii) Interest on Drawings @ 8% p.a. Drawing were; P Rs.80,000 and Q Rs.1000000
(iv) 10% of the divisible profits is to be kept in a Reserve Accounts.

A and C are partners with fixed capitals of the Rs.2,00,000, Rs. 1,50,000 and Rs.1,00,000 respectively. THe balance of current accounts on 1st January, 2004 were A Rs.10,000 (Cr.) and B Rs.4,000 (Cr.) and C Rs.3,000 (Dr.). A gave a loan to the firm of Rs.25,000 on 1st July, 2004. THe Partnership deed provided for the following:-
(i) Interest on Capital at 6%.
(ii) Interest on drawings at 9%. Each partner drew Rs.12,000 on 1st July, 2004.
(iii) Rs.25,000 is to be transferred in a Reserve Account.
(iv) Profit sharing ratio is 5 : 3 : 2 upto Rs.80,000 and above Rs.80,000 equally. Net Profit of the firm before above adjustment was Rs.1,98,360.
From the above information prepare Profit and Loss Appropriation Account, Capital and Current Accounts of the partners.

Yogesh, Ajay and Atul are partners sharing profits in the ratio 4 : 3 : 2. Yogesh withdraw Rs.3,000 in the begining of every month. Ajay withdraws Rs.2,000 in the middle of every month whereas Atul withdraws Rs. 1,500 at the end of every month. Interest on capitals and drawings is to calculated @ 12% p.a. Ajay is also to be allowed a salary of Rs.1,000 per month. After deducting salary but before charging anu type of interest, the profit for the year ending 31st December, 1997 was Rs.1,14,780. Prepare Profit & Looss Appropriation Account, Partners Capital Accounts and Current ccounts fro the additional information given below:

Raghav Limited purchased a running business from Krishna traders for a sum of Rs. 15,00,000 Payable Rs. 3,00,000 by cheque and for the balance issued 9% debentures of Rs. 100 each at par.
The asset and liabilities consisted of the following:

K and P were partners in a firm sharing profits in 4 : 3 ratio.  Their capitals on 1.4.2009 were : K Rs. 80,000 and P Rs. 60,000.  The partnership deed provided as follows :
(i) Interest on capital and drawing will be allowed and charged @ 12% p.a. and 10% p.a. respectively.
(ii) K and P will be entitled to get monthly salary of Rs. 2,00 and Rs 3,000 respectively.
The profits for the year ended 31.3.2010 were Rs.  1,00,300.  The drawings of K and P were Rs. 40,000 and Rs. 50,000 respectively. Interest on K's drawings was Rs. 2,000 and on P's drawings Rs. 2,500.
Prepare Profit and Loss Appropriation Account of K and P for the year ended 31.3.2010 assuming that the capitals of the partners were fluctuating.

An accountant of a firm, Which maintains partner's capital account under fixed capital method has credited salary and interest on capital to capital account. Is the treatment correct?

List the items that may appear on the debit side and credit siode of a partner's fluctuating capital account.

E and F were partners in a firm sharing profits in the ratio of 3:1. They admitted G as a new partner on 1.3.2005 for 1/3 share. It was decided that E,  and G will share future profits equally. G brought Rs.50,000 in cash and machinery worth Rs.70,000 for his share of profit as premium for goodwill. Showing your calculations clearly, pass necessary journal entries in the books of the firm.

State the need for treatment of goodwill on change in profit sharing ratio

From the following particulars relating to Silver Point, prepare a Receipt and Payment account for the year ending March 31, 2017.

As per Receipt and Payment Account for the year ended on March 31, 2017, the subscriptions received were Rs. 2,50,000. Additional Information given is as follows:
1. Subscriptions Outstanding on 1.4.2016 Rs. 50,000
2. Subscriptions Outstanding on 31.3.2017 Rs.35,000
3. Subscriptions Received in Advance as on 1.4.2016 Rs.25,000
4. Subscriptions Received in Advance as on 31.3.2017 Rs.30,000
Ascertain the amount of income from subscriptions for the year 2016–17 and show how relevant items of subscriptions appear in opening and closing balance sheets.

From the following extract of Receipt and Payment Account and the additional information, compute the amount of income from subscriptions and show as how they would appear in the Income and Expenditure Account for the year ending March 31, 2015 and the Balance Sheet.

Receipt and Payment Account for the year ending  March 31, 2015

Additional Information: Rs.
1. Subscriptions outstanding March 31, 2014 8,500
2. Total Subscriptions outstanding March 31, 2015 18,500
3. Subscriptions received in advance 4,000 as on March 31, 2014.

Show how you would deal with the following items in the financial statements of a Club:

Explain the statement: “Receipt and Payment Account is a summarised version of Cash Book”.

The profit of X Ltd. was Rs. 1,00,000 after considering the following items :
(a) Depreciation provided on Fixed Tangible Assets Rs. 20,000
(b) Patents written off Rs. 10,000
(c) Loss on sale of Furniture Rs. 1,000
(d) Provision for Taxation Rs. 1,60,000
(e) Transfer to General Reserve Rs. 14,000
(f) Profit on sale of Fixed Tangible Assets (Machinery) Rs. 6,000.
The following additional information is available to you:

Calculate cash flows from operating activities.

Following particulars are extracted from notes to accounts to the Balance Sheets of Varun Ltd. as on 31.03.2013 and 31.03.2014.  Prepare a Cash Flow Statement.

Additional Information :
(i) During the year 2013-2014, Rs. 15,000 depreciation was charged on fixed tangible assets.
(ii) Company has paid Rs. 12,000 interim dividend during the year.

Following particulars are extracted from notes to accounts to the Balance Sheets of Vijaya Ltd. as on 31-03-2011 and 31-03-2015.  Prepare a Cash Flow Statement.

Note : Bracket denotes minus items.
Additional Information :
(i)  Depreciation charged on fixed tangible assets for the year 2014-2015 was Rs. 20,000.
(ii) Income Tax Rs. 5,000 has been paid in advance during the year.

(i) From given notes to accounts and cash flow statement of Radhika Ltd.  Complete the missing figures.

(ii)
Dr.                                                   Building A/c                                                               Cr.

(iii)  Calculation of profit before Tax :

                                                                    Cash Flow Statement
                                                               for the year ended 31.03.2015                                

What is meant by cash flow statement is prepared.

From the following particulars relating to Silver Point, prepare a Receipt and Payment account for the year ending March 31, 2017.

From the following Receipt and Payment Account for the year ending March 31, 2015 of Negi's Club, prepare Income and Expenditure Account for the same period:

The following additional information is available:
(i) Salaries outstanding – Rs. 1,500;
(ii) Entertainment expenses outstanding – Rs. 500;
(iii) Bank interest receivable – Rs. 150;
(iv) Subscriptions accrued – Rs. 400;
(v) 50 per cent of entrance fees is to be capitalised;
(vi) Furniture is to be depreciated at 10 per cent per annum.

From the following Receipt and Payment Account and additional information relating to Excellent Cricket Club, prepare Income and Expenditure Account for the year ended March 31, 2015 and Balance Sheet as on date.

Dr.                                                                                                               Cr.

Assets at the beginning of the year were:

Donations and Surplus on account of tournament are to be kept in Reserve for a permanent pavilion. Subscriptions due on March 31, 2015 were Rs. 42,000. Write-off fifty per cent of sports materials and thirty per cent of printing and stationery.

As per Receipt and Payment Account for the year ended on March 31, 2017, the subscriptions received were Rs. 2,50,000. Additional Information given is as follows:
1. Subscriptions Outstanding on 1.4.2016 Rs. 50,000
2. Subscriptions Outstanding on 31.3.2017 Rs.35,000
3. Subscriptions Received in Advance as on 1.4.2016 Rs.25,000
4. Subscriptions Received in Advance as on 31.3.2017 Rs.30,000
Ascertain the amount of income from subscriptions for the year 2016–17 and show how relevant items of subscriptions appear in opening and closing balance sheets.

Extracts of Receipt and Payment Account for the year ended March 31, 2017 are given below:

Additional Information:
Total number of members: 230.
Annual membership fee: Rs. 125.
Subscriptions outstandings on April 1, 2016: Rs. 2,750.
Prepare a statement showing all relevant items of subscriptions viz., income, advance, outstandings, etc.

Following Particular are taken from note to accounts to the Balance Sheets of Vijay Ltd. as on 31.03.2014 and 31.03.2015.  Prepare a Cash Flow Statement.

Additional Information :
(i) During the year, Rs. 50,000 depreciation was charged on fixed tangible assets.
(ii) A piece of machinery included in fixed assets, costing Rs. 10,000 in which depreciation charged was Rs. 4,000 sold for Rs. 5,000

Following particulars are extracted from notes to accounts to the Balance Sheets of Varun Ltd. as on 31.03.2013 and 31.03.2014.  Prepare a Cash Flow Statement.

Additional Information :
(i) During the year 2013-2014, Rs. 15,000 depreciation was charged on fixed tangible assets.
(ii) Company has paid Rs. 12,000 interim dividend during the year.

Prepare a Cash Flow Statement from the following Balance Sheet of XYZ Ltd:
                           Balance Sheet of XYZ Ltd. as at 31^st March, 2015         

Additional Information:
During the year a piece of machinery of book value of Rs. 40,000 was sold for Rs. 30,000.  The company paid interest Rs. 36,000 on long term borrowings.  Depreciation of Rs. 1,00,000 was provided on Tangible Assets during the year.

From the following Balance Sheets of a company, calculate the Cash Flows from Operating Activities :

The following information has been extracted from the books of Pure Con Company.  Using the information, calculate the Cash Flows from Investing Activities :

Calculate the current ratio if working capital Rs.15,000, total liabilities (other than shareholders' funds) Rs.32,500, long-term debt Rs.25,000.

The current ratio of a company is 2 : 1. State giving reasons, which of the following would improve, reduce or not change the ratio.
(i) Repayment of a current liability.
(ii) Purchasing goods on cash.
(iji) Sale of office equipment of Rs.4,000 (book value Rs.5,000).
(iv) Sale of goods Rs.11,000 (cost Rs.10,000).
(v) Payment of dividend.

The current assets and current liabilities of a firm are Rs.5,00,000 and  Rs.4,00,000 respectively.
Calculate the current ratio if.
(i) It purchased goods worth Rs.1,00,000 on credit.
(ii) It paid Rs.2,00,000 to a creditor.

A firm wants to maintain an ideal current ratio of 2:1. Its current assets are of Rs.12,00,000 and current liabilities amount to Rs.4,00,000. Find the amount of current assets that it should purchase on credit to achieve that ratio.

The current ratio of Richa Ltd is 4.5 : 1 and liquid ratio is 3:1. Inventories are Rs.30,000. What are the current liabilities, current assets, liquid assets?

Pass the necessary Journal entries for the following transactions on the dissolution of the firm of Sudha and Shiva after the various assets (other than cash) and outside liabilities have been transferred to Realisation Account:

  (i) Sudha agreed to pay off her husband's loan Rs. 19,000

  (ii)A debtor whose debt of Rs. 9,300 was written off in the books paid Rs. 7,500 in full settlement.

  (iii) Shiva took over all investment at Rs. 13,300.

  (iv) Sundry creditors Rs. 10,000 were paid at 9% discount.

  (v) Realisation expenses Rs. 3,400 were paid by Sudha for which she was allowed Rs. 3,000.

  (vi) Loss on realisation Rs. 9,400 was divided between Sudha and Shiva in 3 : 2 ratio.

Prakash, Kiran and Rishab are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1.  Their Balance Sheet as on 31st March 2014 Stood as follows :

                                  Balance sheet

                            as on 31st March, 2014

On the above date, the firm was dissolved and the following transactions took place :

(i) The assets were sold off for the following amounts :

(ii) Kiran took over the Bills Receivable at Rs. 7,000 and the Bills Payable at book value.

(iii) There was an unrecorded asset of Rs. 4,000 which was sold for Rs. 1,800.

(iv) Prakash agreed to pay to his wife's loan.

(v) A contingent liability for a bill discounted at Rs. 8,000 was settled by Prakash.

(vi) Creditors were settled at a discount of 10% and goodwill realised Rs. 5,000.

(Vii) Realisation expenses were Rs. 2,100 which were met by Kiran.

You are required to :

  (a) Pass the necessary Journal Entries.

  (b) Prepare the Realisation Account on the dissolution of the firm.

  (c) Prepare the Capital Accounts of the Partners.

On 1st April, 2014 X, Y and Z started business sharing profits and losses in the ratio of 3 : 2 : 1 respectively.  They contributed Rs. 1,00,000 Rs. 80,000 and Rs. 40,000 respectively as their capital which were deposited into bank.  Each partner withdrew Rs. 15,000 during the year.  The partnership was dissolved on 31st March, 2015.  X took up the stock at an agreed price of Rs. 25,000.  Y took up Furniture at Rs.5,000 and Z took up debtors at Rs.18,500.  Creditors were paid off and then remained a balance of Rs. 14,000 in the bank account.

Prepare necessary accounts to show the distribution of cash at bank and of the required cash brought in by any of the partners.

P, Q and R are partners in a firm in the ratio of 5 : 3 : 2. On 31st December, 2010 the firm was dissolved.  On dissolution, the following particulars are available :

(i) Assets realised Rs. 1,70,000 after a loss of Rs. 20,000.

(ii) Liabilities were paid Rs. 27,000 including an unrecorded liability of Rs. 1,000.

(iii) Realisation expenses paid Rs. 700.

(iv) On the date of dissolution, partners' capital was in the ratio of 2 : 2 : 1.

Prepare Realisation Account, Partners' Capital Accounts and Cash Account.

A and B have been in business together for the last three years ending 31st March, 2015 at which date, they agreed to dissolve.  Their capital at the commencement of the three years before allowing 10% interest on capital were : 2012-13(profit) Rs.30,000, 2013-14 (profit) Rs. 22,200 and 2014-15 (loss) Rs. 5,380.  Drawings of each partner is Rs. 4,000 per year.  Creditors on the date of dissolution were Rs. 16,400.  The assets realised Rs. 85,000.  Expenses of dissolution amounted to Rs. 780.

Prepare (i) Capital Accounts before and after dissolution, (ii) Balance Sheet as on 31st March 2015, (iii) Bank A/c and (iv) Realisation Account.

XYZ Ltd took over assets of Rs.5,00,000 and liabilities of Rs.60,000 of POR Company for the purchase consideration of Rs.6,60,000. The XYZ Company Ltd paid the purchase consideration by issuing debentures of  Rs.100 each at 10% premium.
Give journal entries in the books of the XYZ Company Ltd.

DLF Ltd acquired assets of Rs.50,00,000 and took over creditors of Rs.5,00,000 from Vishal Enterprises. DLF Ltd issued 8% debentures of  Rs.100 each at a premium of 25% as purchase consideration. Record necessary journal entries in the books of DLF Ltd.

ABC Ltd purchased assets of the book value of Rs.8,00,000 and took over the liabilities of Rs.1,00,000 from XYZ Ltd. It was agreed that the purchase consideration, settled at Rs.7,60,000, be paid by issuing debentures of  Rs.100 each.
What journal entries will be made in the following three cases if debentures are issued: (i) at par, (ii) at a discount of 10%and (iii) at a premium of 10%? It was agreed that any fraction of debentures be paid in cash.

ABC Ltd issued Rs.1,00,000, 6%debentures of  Rs.10 each at a premium of  Rs.2 per debenture on 1st April, 2014. The issue was fully subscribed and interest will be paid at the end of each financial year. Pass necessary journal entries for the year 2014-15.

ABC Ltd issued 5,000, 10% debentures of  Rs.100 each on 1st April, 2013 at a discount of 10%redeemable at a premium of 10% after 4 years. Give journal entries for the yea! ended 31st March, 2015 assuming that the interest was payable half yearly on 30th September and 31st March. Tax is to be deducted @ 10%.

Under what heads and sub-heads will the following items appear in the Balance Sheet of a company as per Schedule III Part I of the Companies Act 2013:
(i)Debenture;
(ii)Securities against telephone
(iii)Calls-in-advance

Under what heads and sub-heads will the following items appear in the Balance Sheet of a company as per Schedule III Part I of the Companies Act 2013:
(i)Subsidy Reserve
(ii)Patents
(iii)Provision for doubtful debts.

Under what heads and sub-heads will the following items appear in the Balance Sheet of a company as per Schedule III Part I of the Companies Act 2013:
(i)Computer software
(ii)Proposed Dividend
(iii)Loan payable on demand

Calculate revenue from operations, other income and total revenue for a non-financial company from the following information. Sales Rs 50,40,000, sales return Rs 40,000, sale of scrap Rs 15,000, interest on fixed deposit Rs 5,000, dividend earned on shares of Agro Limited Rs 4,000.

Calculate revenue from operations, other income and total revenue of a financial company from the following information.Interest received on loans disbursed Rs 10,20,000, dividend received on investment in equity Rs 1,80,000, profit on sale of assets of business Rs 2,00,000, other incomes Rs 10,000.

Digamber Ltd invited applications for 20,000 shares of Rs 10 each, issued at a premium of 25%, payable as follows Rs 4 on application, Rs 5 on allotment (including premium of Rs1.5) and the balance on first and final call (including the remaining premium). All the shares were applied for and allotted. Amount due was duly received. Journalise, When it is the company's policy to maintain cash book.

Sehgal Ltd issued 50,000 equity shares of Rs10 each at face value. the amount was payable at the time of making application for the shares. Pass necessary journal entries and prepare the company's balance sheet when

(i) Applications are received for 4,75,000 shares

(ii) Applications are received for 55,000 shares.

Bhalla Ltd issued 15,500 equity shares of Rs.10 each, payable of Rs 3 on application, Rs 2 on allotment and Rs 5 on first and final call. The public applied for 11,500 shares. The shares were duly allotted. Pass necessary journal entries when cash book is maintained and only one account is opened for application and allotment.

Dinesh Ltd issued for public subscription 30,000 equity shares of Rs15 each at par, payable as follows
Rs 7 on application
Rs 5 on allotment
Rs 3 on first and final call
The company received applications for 40,500 shares. Journalise in each of the case mentioned below
(i) When excess applications are rejected.
(ii) When proportionate allotment is made.
(iii) When allotment is made hereunder.
 (a) Applications for 500 shares are rejected.
(b) Applications of 2,000 shares are allotted in full.
 (c) For the balance, pro-rata allotment is made.

DN Ltd issued 50,000 shares of Rs 10 each payable as Rs 2 per share on application, Rs 3 per share on allotment and Rs 2 each on first and final call. Applications were received for 70,000 shares. it was decided to
(i) Refuse allotment to the applicant of 10,000 shares.
(ii) Allot 20,000 shares to Mohan who had applied for similar number.
(iii) Allot the remaining shares on pro-rata basis.
Mohan failed to pay the allotment money and Sohan who belonged to the category (iii) and was allotted 3,000 shares paid both the calls with allotment. Find out the amount received on allotment .

Sandeep, Praveen and Tara are partners sharing profits in the ratio of 3:2:1. On 1st April, 2012  Sandeep gave a notice to retire from the firm. Praveen and Tara after all adjustments showed a balance of Rs.64,000 and Rs.1,00,000 respectively. The total amount to be paid to Sandeep was Rs.1,23,000. This amount was to be paid by Praveen and Tara in such a way Pass necessary Journal entires for the above transations in the books of the firm. Show your working clearly.

The Balance Sheet of Keshav, Nirmal and pankaj who are partners in a firm sharing profits according to their capital as at 31st March, 2012 was as follows:

On that date Nirmal decided to retire from the firm and was paid for his share in the firm subject to the following:
(i) Buildings to be appreciated by 20%.
(ii) Provision for Bad Debts to be increased to 15% on Debtors.
(iii) Machinery to be depreciated by 20 %.
(iv) Goodwill of the firm is valued at Rs.1,44,000 and the retiring partner's share is adjusted through the capital accounts of  remaining partners.
(v) The capital of the new firm be fixed at 2,40,000.
Prepare Revaluation Account, Capital Accounts of the partners, Bank Account and the Balance Sheet after Nirmal's retirement.

Amit, Balan and Chander were partners in a firm sharing profits in the proportion of \(\frac { 1 }{ 2 } ,\frac { 1 }{ 3 } and\frac { 1 }{ 6 } \) respectively. Chander retired on 1.04.2014. The Balance Sheet of the firm on the date of Chander's retirement was as follows:

                         Balance Sheet of Amit, Balan and Chander

                                   as on 1-4-2014

It was agreed that:

(a) Goodwill will be valued at Rs.27,000.

(b) Depreciation of 10% was to be provided on machinery.

(c) Patents were to be reduced by 20%.

(d) Liability on account of Provident Fund was estimated at Rs.2,400.

(e) Chander took over investments for Rs.15,800.

(f) Amit and Balan decided to adjust their capitals in proportion of their profit sharing ratio by opening current accounts.

Prepare Revaluation Account and Partners' Capital Accounts on Chander's retirement.

On 1.1.2008, Uday and Kaushal entered into partnership with fixed capitals of RS.7,00,000 and RS.3,00,000 respectively. They were doing good business and were interested in its expansion but could not do the same because of lack of capital. Therefore, to have more capital, they admitted Govind as a new partner on 1.1.2010. Govind brought RS.10,00,000 as capital and the new profit sharing ratio decided was 3:2:5. On 1.1.2012, another new partner Hari was admitted with a capital with of RS.8,00,000 for 1/10th share in the profits, which he acquired equally from Uday, Kaushal and Givind. On 1.4.2014 Govind died and his share was taken over by Uday and Hari equally, Calculate:

(i) The sacrificing ratio of Uday and Kaushal on Govind's admission.

(ii) New profit sharing ratio of Uday, Kaushal and Hari on Govind's death.

Calculate the current ratio if working capital Rs.15,000, total liabilities (other than shareholders' funds) Rs.32,500, long-term debt Rs.25,000.

From the following balance sheet of Aspect Ltd, calculate the current ratio.
                                                Balance Sheet
                                                       as at ...

The current assets and current liabilities of a firm are Rs.5,00,000 and  Rs.4,00,000 respectively.
Calculate the current ratio if.
(i) It purchased goods worth Rs.1,00,000 on credit.
(ii) It paid Rs.2,00,000 to a creditor.

Current liabilities of a company are Rs.1,60,000. Liquid ratio is 1.5:1 and current ratio is 2.5:1. Calculate quick assets and current assets.

Calculate current ratio if inventories are Rs.6,00,000, liquid assets Rs.24,00,000, quick ratio 2 : 1.

From the following statement of profit and loss of Fenox Ltd for the year ended 31st march,2015, prepare a comparative statement of profit and loss.

Rate of income tax was 40%

Prepare comparative of Profit and loss from the following information.

From the following balance sheets of Varma Ltd, prepare comparative balance sheet. 

From the following balance sheets of Sun Ltd as at 31st March, 2014 and 2015, prepare a common size balance sheet

Prepare common size income statement from the following Staement of profit and loss.

Calculate revenue from operations, other income and total revenue for a non-financial company from the following information. Sales Rs 50,40,000, sales return Rs 40,000, sale of scrap Rs 15,000, interest on fixed deposit Rs 5,000, dividend earned on shares of Agro Limited Rs 4,000.

Calculate cost of material consumed from the information given below
Opening inventory
Raw material                                           Rs 1,25,000
Work-in-progress                                   Rs  4,75,000
Finished goods                                       Rs 2,25,000
Raw material purchased                        
during the year                                      Rs 9,75,000
Closing inventory
Raw material                                          Rs  3,15,000
Work-in-progress                                   Rs 1,25,000
Finished goods                                       Rs 4,75,000

Prepare the balance sheet for Rishant Ltd as at 31st March 2012 from the following information as per provisions of Schedule III Part I of the Companies Act, 2013. Identify the values involved in the presentation of balance sheet.

Calculate revenue from operations, other income and total revenue for a non-financial company from the following information
sales Rs 1,04,00,000 sales return Rs 4,00,000, sale of scrap Rs 50,000 interest on fixed deposits Rs 60,000 dividend earned Rs 20,000

Compute cost of materials consumed from the following information.
Opening inventory of materials Rs 5,00,000, materials purchased Rs 40,00,000 and closing inventory of materials Rs 6,00,000.

Srijan Ltd issued 30,000, 10% debentures of Rs 100 each on 1st April 2013. The issue was fully subscribed. According to the terms of issue, interest is payable on a half-yearly basis. Pass journal entries for the year ended 31st March, 2014.

ABC Ltd issued Rs 1,00,000, 6%debentures of Rs10 each at a premium of Rs 2 per debenture on 1st April, 2014. The issue was fully subscribed and interest will be paid at the end of each financial year. Pass necessary journal entries for the year 2014-15.

POR Ltd purchased furniture of  Rs.80,000 from M/s Companion Ltd 50%· of the amount was I paid to M/S Companion Ltd by accepting a bill of exchange and for the balance, the company issued 9% debentures of  Rs.100 each at a premium of 10%in favour of Mis Companion Ltd. Pass journal entries in the books of POR Ltd.

DLF Ltd acquired assets of Rs.50,00,000 and took over creditors of Rs.5,00,000 from Vishal Enterprises. DLF Ltd issued 8% debentures of  Rs.100 each at a premium of 25% as purchase consideration. Record necessary journal entries in the books of DLF Ltd.

XYZ Ltd issued Rs 1,00,000, 15% debentures of Rs 100 each at a premium of 5%, redeemable at a premium of 10% at the end of 4 years. The Board of Directors decided to transfer the minimum required amount to debenture redemption reserve account at the time of redemption. Pass journal entries at the time of redemption of debentures.

Anita,Asha and Amrit are partners sharing profits in the ratio of 3:2:1 respectively .From 1st January,2016,they decided to share profits in the ratio of 1:1:1.The partnership deed provided that in the event of any change in profit sharing ratio,the goodwill should be valued at three years'purchase of the average of five years'
The profits and losses of the preceding five years are

Showing the working clearly,give the necessary journal entry to record the above change.

Chintu,Montoo and Shitu are patterns in a business sharing profits in the ratio of 3:4:2. From 1st January,2015,they decide to share profits equally.Goodwill was valued at Rs 90,000, as on the date Pass journal entry to give effect to the above adjustment.

Rajeev,Sanjay and  Mohit are partners sharing profits and losses in the ratio of 2:3:5 On 1st April,2015,they decide to change their ratio to 3:3:4 as Rajeev contributes more time to the business

Siddharth, Saurabh and Nitin are partners in a firm sharing profits and loses in the ratio of 3:4:5 From 1st January 2015,they decide to share profits in the ratio 5:4:3.
As per the terms of the partnership deed,in the event of change in the existing profit sharing ratio.goodwill is to be valued at 2 years purchase of average profits of last years,which were Rs 64,000,Rs 72,000,Rs 65,000 and Rs 82,000 respectively. Pass necessary journal entry to adjust goodwill.Show your workings clearly.

Lalit,Rahul and Sumit are sharing [profits and loses in the ratio 5:3:2 They decided to share future profits and loses in the ratio of 2:3:5 with effect from 1st April,2015.They also decided to record the effect of the following revaluations without affecting the book value of the assets and liabilities by passing a single adjusting entry

A and B are partners sharing profits in the ratio of 3:2. They admit C for a share which equals 20 paise in a rupee. Calculate new profit sharing ratio and sacrificing ratio.

A and B share profits in the ratio of 5:3. The new partner gets 1/5th of A's share and 1/3rd of B's share Calculate new profit sharing ratio and sacrificing ratio.

A, B and C are partners sharing 3:2:2 ratio. They admitted D as a new partner for 1/5th share which he acquired from A, B and C in 2:2:1 ratio respectively. Calculate new profit sharing ratio.

A and B are partners sharing profits in the ratio of 5:4. They admit C for 1/10th share, which he acquires in equal proportion from both A and B. Find new profit sharing ratio.

Find out new profit sharing ratio and sacrificing ratio for each of the condition specified below
(i) Dinesh and Mahesh are partners in a firm sharing profits in the ratio of 4:3. Mukesh joins the business. Dinesh surrenders 1/4th of his share and Mahesh surrenders 1/3rd of his share in favour of Mukesh.
(ii) Kapil and Sidhu are partners in a firm sharing profits in the ratio of 2:1. Dhoni is admitted in the firm for 1/3rd share which he acquires 2/3rd from Kapil and 1/3rd from Sidhu.
(iii) Kamakshi, Divij and Ayaan are partners sharing profits in the ratio of 2:3:3 Lavanya is admitted for 2/5th share it is agreed that Kamakshi will retain her original share.
(iv) Ganga and Yamuna are partners in a firm sharing profits in the ratio of 2:1. Saraswathi and Narmada are admitted for 1/6th and 1/8th shares respectively.
(v) Kunal and Ranbir are partners who share profits in the ratio of 3:1 Katrina is admitted as a new partner for 1/5th share. Kunal and Ranbir decide that they will share future profits equally.

X and Y, two partners, drew for private use Rs 2,40,000 and Rs 1,60,000. Interest is chargeable @6% per annum on the drawings. What is the total interest?

L and M are partners sharing profits equally, L withdrew regularly Rs 8,000 in the beginning of every month for six months ended 30th September 2017. Calculate interest on drawings @5% per annum

Raj and Sameer are partners sharing profits equally.Raj withdrew regularly Rs 8000 at the end of every month for six months ended 30th September 2017. Calculate interest on drawings @ 5% per annum.

X and Y are partners doing a dry cleaning business in Agra, Sharing profits in the ratio 2:1 with capital of Rs.5,00,000 and Rs.4,00,000 respectively. X withdrew the following amounts during the year to pay the hostel expenses of her son.

y withdrew Rs.15,000 on the first day of April, July, October and January to pay rent for the accommodation of his family.He also paid Rs.20,000 per month as rent for the office of partnership which was in a nearby shopping complex.Calculate interest on drawings @ 6% per annum.

Rich and Kanika are partners in a business. Their capitals at the end of the year were Rs.48,000 and Rs.36,000 respectively. During the year ended 31st march, 2018 Richa's drawings and Kanika's drawings were Rs.8,000 and Rs.12,000 respectively Profit (belong charging interest on capital) during the year was Rs.32,000 which was duly credited to their accounts in their profit sharing ratio calculate the capital @ 5% for the year ended 31st march, 2018.

What is meant by cash flow statement?

State why non-cash transactions are ignored while preparing a cash flow statement.

State why cash flow statement is not a substitute for income statement.

State whether the payment of cash to creditors will result in inflow, outflow or no flow of cash.

Declaration of final dividend would result into inflow, outflow or no flow of cash.Give your answer with reason.

Calculate Current Ratio from the following information:
Inventory Turnover :4 times
Inventory in the beginning was Rs 20,000 less than Inventory at the end.
Revenue from Operation Rs.6,00,000.
Groos Profit Ratio 25%.
Current Liabilities Rs.60,000.
Quick Ratio 0.75:1.

Current liabilities of a company are Rs.1,60,000. Its Liquid ratio is 1.5:1 and Current ratio is 2.1:1. Calculate Quick assets and Current assets.

From the following information, Calculate Inventory Turnover Ratio, Operating Ratio, Gross Profit Ratio and ROI:

Calculate 'Debt Equity Ratio' from the following information:

Total Assets Rs.3,50,000; Total Debt Rs.2,50,000 and Current Liabilities Rs.80,000.

Handa Ltd. has Inventory of Rs.20,000. Total liquid assets are Rs.1,00,000 and quick ratio is 2:1. Calculate current ratio.

State how does financial statement analysis ignore price level changes.

Prepare a comparative Statement of Profit and Loss from the following information:

With the help of the following information obtained from the books of Raj Slik Mils, Prepare a Comparative statement of Profit and Loss for the year ended 31.03.2012.

Both horizontal and Vertical analysis are complementary in nature.Do you agree?

For what purpose, comparative financial statements are prepared?

Under what heads and sub-heads the following items will appear in the Balance sheet of a company as per Schedule III part-I of the companies Act 2013:
(i)Mining Rights
(ii)Encashment of employees earned leave payable on retirement
(iii)Vehicles

Under what heads and sub-heads will the following items appear in the Balance Sheet of a company as per Schedule III Part I of the Companies Act 2013:
(i)Debenture;
(ii)Securities against telephone
(iii)Calls-in-advance

Under which major sub-headings the following items will be placed in the Balance Sheet of a company as per Schedule III Part I of the Companies Act 2013:
(i)Bonds
(ii)Capital Redemption Reserve
(iii)Short-term Provisions
(iv)Balance of the statement of profit and Loss
(v)Provision for Warranties
(vi)Brand/Trade Marks

Under which major sub-headings the following items will be placed in the Balance Sheet of a company as per Schedule III Part I of the Companies Act 2013:(i)Cheques in hand
(i)Cheques in hand
(ii)Stock of work-in-progress
(iii)Copyrights
(iv)Loan of Rs.1,00,000 payable after three years
(v)Short term deposits payable on demand
(vi)Negative balance shown by the statement of profit and Loss
(vii)Land
(viii)Cash at Bank

List the items which are shown under the heading 'Current Liabilities' as per schedule III part-I of the Companies Act,2013.

Deepak Ltd. Purchased furniture Rs.2,20,000 from M/s Furniture Mart. 50% of the amount was paid to Furniture Mart by accepting a bill of exchange and for the balance the company issued 9% debentures of Rs.100 each at a premium of 10% in favour of Furniture Mart.
Pass necessary journal entries in the books of Deepak Ltd. for the above transactions.

X Ltd. purchased machinery for Rs.5,50,000 from Y Ltd. Rs.55,000 were paid by X Ltd. in cash and the balance was paid by issue of 9% depentures of Rs.1,000 each at 10 % premium redeemable after three years. Pass necessary journal entries in the books of the company.

Vishesh Ltd. issued 10,000, 10% debentures of Rs.100 interest on Debentures each on 1st April 2012. the issue was fully subscribed. According to the terms of issue, interest on the debentures is payable half-yearly on 30th September and 31st March and the tax deducted at source is 10%. Pass necessary journal entries related to the debenture interest for the half-yearly ending 31st March, 2013 and transfer of interest on debentures of the year to the Statement of Profit and Loss.

Sargam Ltd. issued Rs.1,00,000, 6% debentures of Rs.10 each at a premium of Rs.2 per debenture on 1st April, 2012. The issue was fully subscribed. Interest will be paid at the end of each financial year. Pass necessary journal entries for the year 2012-13.

Pass necessary journal entries relating to issue of debentures for the following:
(i) Issued Rs.4,00,000, 9% debentures of Rs.100 each at a premium of 8%, redeemable at 10% premium.
(ii) Issued Rs.6,00,000, 9% debentures of Rs.100 each at par, repayable at premium of 10%.
(iii) Issued Rs.10,00,000, 9% debentures of Rs.100 each at a premium of 5%, redeemable at par.

Nirmal Ltd. issued 50,000 equity shares of Rs.10 each. The amount was payable as follows:
On application            - Rs 3 per share
On allotment               - Rs 2 per share
On first and final call - The balance
Applications for 45,000 shares were received and shares were allotted to al the applicants. Pooja, to whom 500 shares were alloted, paid her entire share money at the time of allotment, wheras Kundan did not pay the first and final call on his 300 shares. Calculate the amount received at the time of making first and final call.

Guru Ltd invited applications for issuing 5,00,000 equity shares Rs10 each at a premium of Rs 5 per share. Because of favorable market conditions, the issue was oversubscribed and applications for 15,00,000 shares were received. Suggest the alternatives available to the Board of Directors for the allotment of shares.

X Ltd invited applications for 10,000 shares of Rs10 each. Applications were received for 15,000 shares. Name the kind of subscription. Give three alternatives for allotting shares.

Y Ltd invited applications for 10,000 shares of Rs10 each.Applications were received for 90,000 shares. Name the kind of subscription

Rohit Ltd purchased assets from Rohit and Co for Rs 3,50,000. A sum of Rs 75,000 was paid by means of a bank draft and for the balance due, Rohit Ltd issued equity shares of Rs 10 each at a premium of 10% Journalise the above transactions in the books of the company.

X,Y and Z were partners Sharing Profits in the ratio of 2 : 2 : 1.  Their Balance-Sheet as on March 31st 2010, the date on which they dissolve their firm, was as follows :

It was agreed that:

(a) X to take over Furniture at Rs. 8,000, debtors amounting to Rs. 1,20,000 at 1,17,200 and the creditors of Rs. 16,000 were to be paid by him at this figure.

(b) Y is to take over all stock for Rs. 17,000 and some sundry assets at Rs. 72,000 (being 10% less than the book value).

(c) Z to take over remaining sundry assets at 80% of the book value and assume the responsibility of discharge of loan together with accrued interest of Rs. 2,300.

(d) The expenses of realization were Rs. 2,700.  The remaining debtors were sold to a debt collecting agency at 50% of the Book value.

Prepare Realisation A/c, Partners Capital A/cs and Cash A/c.

Bora, Singh and Ibrahim were partners in a firm sharing profits in the ratio of 5 : 3 : 1.  On 2.3.2015 their firm was dissolved.  The assets were realised and the liabilities were paid off.  Given below are the Realisation Account, Partners' Capital Account and Bank Account of the firm.  The accountant of the firm left a few amounts unposted in these accounts.  You are required these accounts by positing the correct amounts:

Dr.                                Realisation Account                                  Cr.

Dr.                               Capital Account                                           Cr.

Dr.                                    Bank Account                                         Cr.

Mala, Neela and Kala were partners sharing profits in the ratio of 3 : 2 : 1.  On 1.3.2015 their firm was dissolved.  The assets were realised and liabilities were paid off.  The accountant prepared Realisation Account, Partners'  Capital Accounts and Cash Account, but forgot to post few amounts in these accounts.

You are required to complete these below given accounts by posting correct amounts:

Dr                                Realisation Account                                  Cr.

Dr.                            Capital Accounts                                           Cr.

Dr                                       Cash Account                                       Cr.

Radha and Mohan were Partners. They decided to dissolve their firm. The goodwill appeared in the books at Rs. 6000. Show journal entries in their books, if goodwill realised Rs. 9,000. 

Record necessary journal entries in the following cases.
(i) Creditors worth Rs. 85,000 accepted Rs. 40,000 as cash and investment worth Rs.43,000 in full settlement of their claim.
(ii) Creditors were worth Rs.16,000. They accepted machinery valued at Rs.18,000 in settlement of their claim. 
(iii) Creditors were worth Rs.90,000. They accepted buildings valued at Rs.1,20,000 and paid cash to the firm Rs.30,000.

Digamber Ltd invited applications for 20,000 shares of Rs 10 each, issued at a premium of 25%, payable as follows Rs 4 on application, Rs 5 on allotment (including premium of Rs1.5) and the balance on first and final call (including the remaining premium). All the shares were applied for and allotted. Amount due was duly received. Journalise, When it is the company's policy to maintain cash book.

Sarthak Ltd issued 1,25,000 equity shares of Rs10 each at a premium of Rs 2.5 per share, the whole amount being payable at the time of allotment. Pass necessary journal entries and prepare the balance sheet of the company, when

(i) Applications are received for 1,25,000 shares.

(ii) Applications are received for 1,20,000 shares

(iii) Applications are received for 1,40,000 shares.

Also, prepare cash book for case (iii) given above.

Dinesh Ltd issued for public subscription 30,000 equity shares of Rs15 each at par, payable as follows
Rs 7 on application
Rs 5 on allotment
Rs 3 on first and final call
The company received applications for 40,500 shares. Journalise in each of the case mentioned below
(i) When excess applications are rejected.
(ii) When proportionate allotment is made.
(iii) When allotment is made hereunder.
 (a) Applications for 500 shares are rejected.
(b) Applications of 2,000 shares are allotted in full.
 (c) For the balance, pro-rata allotment is made.

Subharti Ltd has a registered share capital of 10,00,000 equity shares of Rs15 each. The company decided to issue 2,50,000 shares at a premium of Rs10 per share, payable as follows
On Ist June Application money of Rs 7 per share.
On Ist July Allotment were accepted.The last date of receiving allotment money of Rs 12 per share (including premium) was 15th July.
On Ist August First and final call of Rs 6 was made due. Last date for receiving final call was 15th August. Journalise in the books of the firm, when
(i) applications were received for 2,30,000 shares.
(ii) applications were received for 3,00,000 shares and the company decided to reject the excess applications.
The company decided to issue bonus shares from the amount of securities premium. Can the company do so? Identify any one value propagated by the company.

DN Ltd issued 50,000 shares of Rs 10 each payable as Rs 2 per share on application, Rs 3 per share on allotment and Rs 2 each on first and final call. Applications were received for 70,000 shares. it was decided to
(i) Refuse allotment to the applicant of 10,000 shares.
(ii) Allot 20,000 shares to Mohan who had applied for similar number.
(iii) Allot the remaining shares on pro-rata basis.
Mohan failed to pay the allotment money and Sohan who belonged to the category (iii) and was allotted 3,000 shares paid both the calls with allotment. Find out the amount received on allotment .

Sandeep, Praveen and Tara are partners sharing profits in the ratio of 3:2:1. On 1st April, 2012  Sandeep gave a notice to retire from the firm. Praveen and Tara after all adjustments showed a balance of Rs.64,000 and Rs.1,00,000 respectively. The total amount to be paid to Sandeep was Rs.1,23,000. This amount was to be paid by Praveen and Tara in such a way Pass necessary Journal entires for the above transations in the books of the firm. Show your working clearly.

The Balance Sheet of Keshav, Nirmal and pankaj who are partners in a firm sharing profits according to their capital as at 31st March, 2012 was as follows:

On that date Nirmal decided to retire from the firm and was paid for his share in the firm subject to the following:
(i) Buildings to be appreciated by 20%.
(ii) Provision for Bad Debts to be increased to 15% on Debtors.
(iii) Machinery to be depreciated by 20 %.
(iv) Goodwill of the firm is valued at Rs.1,44,000 and the retiring partner's share is adjusted through the capital accounts of  remaining partners.
(v) The capital of the new firm be fixed at 2,40,000.
Prepare Revaluation Account, Capital Accounts of the partners, Bank Account and the Balance Sheet after Nirmal's retirement.

Xavier, Yusuf and Zaman were partners in a firm sharing in the ratio of 4:3:2. On 1st April 2015, their Balance Sheet was as follows:

Yusuf had been suffering from ill health and thus gave notice of retirement from the firm. An agreement was, therefore, entered into as on 01.04.2014, the terms of which were as follows:
(i) That land and building be appreciated by 10%
(ii) The provision for bad debts is no longer necessary.
(iii) That stock be appreciated by 20%.
(iv) That goodwill of the firm be fixed at Rs.54,000. Yusuf's share of the same be adjusted into Xavier's and Zaman's Capital Accounts, who are going to share future profits in the ratio of 2:1.
(v) The entire capital of the newly constituted firm be readjusted by bringing in or paying necessary cash so that the future capitals of Xavier and Zaman will be in their profit sharing ratio.
Prepare Revaluation Account and Partners' Capital Accounts.

On 1.1.2008, Uday and Kaushal entered into partnership with fixed capitals of RS.7,00,000 and RS.3,00,000 respectively. They were doing good business and were interested in its expansion but could not do the same because of lack of capital. Therefore, to have more capital, they admitted Govind as a new partner on 1.1.2010. Govind brought RS.10,00,000 as capital and the new profit sharing ratio decided was 3:2:5. On 1.1.2012, another new partner Hari was admitted with a capital with of RS.8,00,000 for 1/10th share in the profits, which he acquired equally from Uday, Kaushal and Givind. On 1.4.2014 Govind died and his share was taken over by Uday and Hari equally, Calculate:

(i) The sacrificing ratio of Uday and Kaushal on Govind's admission.

(ii) New profit sharing ratio of Uday, Kaushal and Hari on Govind's death.

Anita,Asha and Amrit are partners sharing profits in the ratio of 3:2:1 respectively .From 1st January,2016,they decided to share profits in the ratio of 1:1:1.The partnership deed provided that in the event of any change in profit sharing ratio,the goodwill should be valued at three years'purchase of the average of five years'
The profits and losses of the preceding five years are

Showing the working clearly,give the necessary journal entry to record the above change.

Rajeev,Sanjay and  Mohit are partners sharing profits and losses in the ratio of 2:3:5 On 1st April,2015,they decide to change their ratio to 3:3:4 as Rajeev contributes more time to the business

Lalit,Rahul and Sumit are sharing [profits and loses in the ratio 5:3:2 They decided to share future profits and loses in the ratio of 2:3:5 with effect from 1st April,2015.They also decided to record the effect of the following revaluations without affecting the book value of the assets and liabilities by passing a single adjusting entry

X,Y and Z were sharing profits and losses in the ratio of 5:3:2 They decided  to share future profits in the ratio of 2:3:5 with effect from1st  April,2015, They decided to record the effect of the following , without affecting their book values .
(i) Profit and loss account                    Rs 24,000
(ii) Advertisement suspense account     Rs 12,000
Pass necessary adjusting entry

Piyush and Aayush are partners sharing profits in the ratio of 2:1 As from 1st April,2015. they decide to becomes equal partners,with Aayush contributing Rs 50,000 as additional capital.The balance sheet drawn up on 31st March, 2015 revealed that general reserve stood in the accounts at Rs 1,50,000, Pass the necessary journal entry when
(i),Partners do not want to show general reserve in the books of reconstituted firm.
(ii) Partners want to show general reserve in the books of reconstituted firm.
Also  identify the value being communicated by Piyush.

P and Q are partners in a firm sharing profits in the ratio of 7:5. They admit R as a partner in the firm. The new profit sharing ratio among P,Q and P,Q and R is 1:1:2. Calculate the sacrificing ratio.

E and F were partners in a firm sharing profits in the ratio of 3:1. They admitted G as a new partner on 1.3.2005 for 1/3 share. It was decided that E,  and G will share future profits equally. G brought Rs.50,000 in cash and machinery worth Rs.70,000 for his share of profit as premium for goodwill. Showing your calculations clearly, pass necessary journal entries in the books of the firm.

(a)A and B are partners in a firm sharing profits in the ratio of 3:2. C is admitted as a partner. A and B surrender 1/2 of their respective shares in favour of C. Find the new profit sharing ratio and also the sacrificing ratio.

(b)C is a bring his share of premium for goodwill in cash. The goodwill of the firm is estimated at Rs.40,000. Pass necessary entries for the record od goodwill in the above case.

A, B and C are partners in a firm. If D is admitted as a partner,
(a) old firm is dissolved
(b) old firm and partnership is dissolved
(c) old partnership is reconstituted
(d) None of the above

VK and PK were partners in a firm sharing profits in the ratio of 3:2 respectively. On 31st March, 2015, their balance sheet was under
                                                 Balance Sheet
                                          as at 31st March, 2015

BK was admitted as a new partner on the following conditions.
(i) BK will get 4/15th share of profits.
(ii) BK had to bring RS.15,000 as his capital.
(iii) BK would bring premium in cash based on 21/2 years' purchase of average profit of last 4 years.
(iv) The profits of the firm for the years ending 31st March, 2012, 2013, 2014 were RS.10,000, RS.7,000, RS.8,500 and RS.7,500 respectively.
(v) Stock was valued at RS.10,000 and provision for doubtful debts was raised upto RS.500.
(vi) Plant was revalued at RS.20,000.Prepare revaluation account partners' capital accounts and balance sheet.

After the account of a partnership have been drawn up and the books closed, it is discovered that interest on capitals for the year 2013-14 and 2014-15 has been credited to partners though there is no such provision in the partnership deed.the amounts involved are

You are required to put through adjusting entries as on 1st April 2015, If profits were shared as follows
2013-4 - 1 : 1 : 1          2014-15- 3 : 4 : 3
It may be assumed that capitals are fixed.

A partnership firm earned the following net profits during the last three years.
2013 - Rs.34,000,  2014 - Rs.40,000,  2015 - Rs.46,000
The capital investment in the firm throughout the above mentioned period has been Rs.1,60,000. having regard to the risk involved, 15% is considered to be fair return on the capital.calculate value of goodwill on the basis of two year's purchases of average super profit earned during the above mentioned three years.

X and Y, two partners, drew for private use Rs 2,40,000 and Rs 1,60,000. Interest is chargeable @6% per annum on the drawings. What is the total interest?

M and T are partners in a firm. They share profits equally their monthly drawings are Rs.2,000 each.Interest on Drawings for the year 2015. Assuming that money is Withdrawn in the beginning of every month and at the end of every month.

X and Y are partners doing a dry cleaning business in Agra, Sharing profits in the ratio 2:1 with capital of Rs.5,00,000 and Rs.4,00,000 respectively. X withdrew the following amounts during the year to pay the hostel expenses of her son.

y withdrew Rs.15,000 on the first day of April, July, October and January to pay rent for the accommodation of his family.He also paid Rs.20,000 per month as rent for the office of partnership which was in a nearby shopping complex.Calculate interest on drawings @ 6% per annum.

Pass the necessary Journal entries for the following transactions on the dissolution of the firm of Sudha and Shiva after the various assets (other than cash) and outside liabilities have been transferred to Realisation Account:

  (i) Sudha agreed to pay off her husband's loan Rs. 19,000

  (ii)A debtor whose debt of Rs. 9,300 was written off in the books paid Rs. 7,500 in full settlement.

  (iii) Shiva took over all investment at Rs. 13,300.

  (iv) Sundry creditors Rs. 10,000 were paid at 9% discount.

  (v) Realisation expenses Rs. 3,400 were paid by Sudha for which she was allowed Rs. 3,000.

  (vi) Loss on realisation Rs. 9,400 was divided between Sudha and Shiva in 3 : 2 ratio.

Angad, Raman and Harshit are partners in a firm.  They decided to dissolve their firm.  Pass necessary journal entries for the following after various assets (other than cash and bank) and their party liabilities have been transferred to Realisation Account.

(i) There was a stock of Rs. 90,000.  Raman took over 50% of the stock at 10% discount and remaining stock was sold at 40% profit on book value.

(ii) Profit and Loss Account was showing a credit balance of Rs. 15,000 which distributed among the partners.

(iii) A machinery which was not recorded in the books was sold for Rs. 2,000.

(iv) Angad was paid only Rs. 5,000 (in full settlement) for his loan to the firm which amounted to Rs. 5,500.

(v) Realisation expenses amount to Rs. 5,000 paid by Harshit.

(vi) There were 100 shares of Rs. 10 each in D.C.M.  Ltd. acquired at cost of Rs.1,200 which had been written off completely from the books.  These shares are valued at Rs. 9 each and divided among the partners in their profit sharing ratio.

Achal and Vichal were partners in a firm sharing profits in the ratio of 3 : 5.  On 31.3.2011 their Balance Sheet was as follows :

                                  Balance Sheets of Achal and Vichal

                                                 as on 31-3-2011

Hanif and Jubed were partners in a firm sharing profits in the ratio of their capitals.  On 31st March, 2013 their Balance Sheet was as follows:

                  Balance sheet of Hanif and Jubed

                         as on 31st March, 2013

On the above date the firm was dissolved.

  (i) Debtors were realised at a discount of 5%. 50% of the stock was taken over by Hanif at 10% less than the book value.  Remaining stock was sold for Rs. 65,000.

  (ii) Furniture was taken over by Jubed for Rs. 1,35,000. Machinery was sold as scrap for Rs. 74,000.

  (iii) Creditors were paid in full.

  (iv) Expenses on realisation Rs. 8,000 were paid by Hanif.

Prepare Realisation Account.

All the partners of a firm want to dissolve the firm. Sonu, a partner wants that his loan of Rs 32,000 should be paid off before the payment of Mrs Monu's loan. But Monu, another partner wants that Mrs Monu's loan must be paid before the payment of Sonu's loan. Who is correct?

A, B and C were partners sharing profits in the ratio of 6:4:5. Their capitals were A Rs.1,00,000, B-Rs.80,000 and C-Rs.60,000. On 1st April 2009, B retired from the firm and the new profit sharing ratio between A and C was decided as 11:4. On B's retirement the goodwill of the firm was valued at Rs.1,80,000. Showing your calculations clearly, pass necessary journal entry for the treatment of goodwill on B's retirement.

Ram, Laxman and Bharat are partners sharing profits in the ratio of 3:2:1. Goodwill is appearing in the books at a value of Rs.1,80,000. Laxman retires and at the time of his retirement, goodwill is valued at Rs.2,52,000. Ram and Bharat decided to share future profits in the ratio of 2:1. The profits for the first year after Laxman's retirement amount to Rs.1,20,000. Give the necessary Journal Entries to record goodwill and to distribute the profits. Show your calculations clearly.

Why is it necessary to revalue assets and liabilities at the time of retirement of a partner?

Ram, Mohan and Sohan were partners in firm sharing profits in the ratio 4:3:2.His share was taken over equally by Ram and Sohan.In which ratio will the profit or loss on revaluation of assets and liabilities on the retirement of Mohan be transferred to the capital accounts of the partners?

A, B and C were partners in a firm having capitals of Rs. 60,000; Rs. 60,000 and Rs. 80,000 respectively.  Their Current Account balances were A : Rs, 10,000; B : Rs 5,000 and C : Rs, 2,000 (Dr.). According to the partnership deed the partners were entitled to interest on capital @ 50% p.a. C being the working partner was also entitled to a salary of Rs. 6,000 p.a.
The profits were to be divided as follows:
(a) The first Rs. 20,000 in proportion to their capitals.
(b) Next Rs. 30,000 in the ratio of 5 : 3 : 2.
(c) Remaining profits to be shared equally.
The firm made a profit of Rs. 1,56,000 before charging any of the above items.  Prepare the Profit & Loss Appropriation Account and pass necessary journal entry for appropriation of profit.

Arun and Arora were partners in a firm sharing profits in the ratio of 5 : 3.  Their fixed capitals as on 1.4.2010 were : Arun Rs. 60,000 and Arora Rs. 80,000.  They agreed to allow interest on capital @ 12% p.a. and to charge on drawings @ 15% p.a.  The profit of the firm for the year ended 31.3.2011 before all above adjustment were Rs. 12,600.  The drawings made by Arun were Rs. 2,000 and by Arora Rs. 4,000 during the year.  Prepare Profit and Loss Appropriation Account  of Arun and Arora.  Show your calculations clearly.  The interest on capital will b allowed  even if the firm incurs loss.

Ram and Shyam were partners in a firm.  After crediting the profits of the year Rs. 2,00,000  in their Capital Accounts, the balances of their capital were Ram Rs. 4,00,000 and Shyam Rs. 3,00,000.  During the year Ram withdrew Rs. 80,000 and Shyam Rs. 1,00,000.  It was found that interest on Capital and Drawings @ 10% p.a. as provided in the partnership agreement had not been allowed and charged to the partners' capital accounts.  Pass the necessary adjustment entry.

J and K are partners in a firm. Their capitals are J Rs.3,00,000 and K Rs.2,00,000. Assuming that the normal rate of return is 20%, calculate the value of goodwill of the firm:
(i) By capitalisation method and
(ii) By super profit method if the goodwill is valued at 2 years' purchase of super profit.

Prem, Param and Priya were partners in a firm.  Their fixed capitals were Prem Rs.  2,00,000; Param Rs. 3,00,000 and Priya Rs. 5,00,000.  They were sharing profits in the ratio of their capitals.  The firm was engaged in the sale of ready-to-eat food packets at three different locations in the city, each being managed by Prem and Priya.  Prem requested Param and Priya for a higher share in the profits of the firm which Param and Priya accepted.  It was decided that the new profit sharing ratio will be 2 : 1 : 2 and its effect will be introduced respectively for the last four years.  The profits of the last four years were Rs. 2,00,000; Rs. 3,50,000;  Rs. 4,75,000 and Rs. 5,25,000 respectively.  
Showing your calculations clearly, pass a necessary adjustment entry to the new agreement between Prem, Param and Priyam.

A and B are partners in a firm sharing profits and losses in the ratio of 3:2. They admit C into partnership for 1/5th share. C brings Rs.30,000 as capital and Rs.10,000 as goodwill. At the time of admission of C goodwill appears in the balance sheet of A and B at Rs.3,000. New profit sharing of the partners shall be 5:3:2. Pass necessary entries in the books of new firm.

A and B are partners in a firm sharing profits in the ratio of 5:3. They admit C into the partnership for 3/10th share in profits which he takes 2/10th from A and 1/10th from A and 1/10th from B. C brings in Rs.3,000 as premium in cash out of his share of Rs.7,800. Goodwill account does not appear in the books of A and B. Give the necessary journal entries in the books of the new firm.

E and F were partners in a firm sharing profits in the ratio of 3:1. They admitted G as a new partner on 1.3.2005 for 1/3 share. It was decided that E,  and G will share future profits equally. G brought Rs.50,000 in cash and machinery worth Rs.70,000 for his share of profit as premium for goodwill. Showing your calculations clearly, pass necessary journal entries in the books of the firm.

B and C were partners in a firm sharing profits and losses in the ratio of 4:3. They admitted D as a new partner for 1/4th share in the profits which he acquired from B and C in 3:4ratio. D brought Rs.1,80,000 for his capital and Rs.42,000 for his 1/4th share in goodwill. Calculate new profit ratio of B,C and D and pass necessary journal entries for the above transactions on D's admission in the books of the firm.

L and M were partners in a firm sharing profits in 4:3 ratio. They admitted O as a new partner. The new profit sharing ratio of L,M and O will be 3:3:4. O brought Rs.2,00,000 for his capital. The goodwill of the firm on O's admission was valued at Rs.70,000. O brought his share of goodwill in cash. Calculate sacrificing ratio of L and M and pass necessary journal entries for the above transactions on O's admission.

Anita, Asha and Amrit are partners sharing profits in the ratio of 3:2:1 respectively. From 1st January 2010, they decided to share profits in the ratio of 1:3:2. The partnership deed provides that in the event of any change in profit sharing ratio, the goodwill should be valued at three years purchase of the average of five years profits. The profits and losses of the preceding five years are: Profits 2005-Rs 1,20,000; -Rs 3,00,000; 2007-Rs 3,40,000; 2008-Rs 3,80.000; 2009-Rs 1,40,000 (Loss).

Showing the working clearly, give the necessary journal entry to record the above change.

X, Y and Z were sharing profits and losses in the ratio of 5:3:2. They decided to share future profits and losses in the ratio of 2:3:5 with effect from 1.4.2007. They decided to record the effect of the following, without effecting their book values:

(i) Profit and Loss Account (Cr.)          Rs.24,000

(ii) Advertisement Suspense Account  Rs.12,000

     Pass the necessary adjusting entry.       

Kumar, Gupta and Kavita were pertners in a firm sharing profits and losses equally. The firm was engaged in the storage and distribution of canned juice and its godowns were located at three different places in the city. Each godowns was being managed individually by kumar, Gupta and Kavita. Because of increase in business activities at the godown managed by Gupta, he had to devote more time. Gupta demanded that his share in the profits of the firm be increased, to which Kumar and Kavita agreed. The new profit sharing ratio was agreed to be 1:2:1. For this purpose, the goodwill of the firm was valued at two years purchase of the average profits of last five years. The profits of the last five years were as follows:

You are required to:

(i) Calculate the goodwill of the firm.

(ii) Pass necessary Journal for the treatment of goodwill on change in profit sharing ratio of Kumar, Gupta and Kavita.                          

Why is it necessary to adjust goodwill at the time of change in profit sharing ratio?

State the need for treatment of goodwill on change in profit sharing ratio

State the meaning of ‘Not- for- Profit’ Organisations.

State the meaning of Receipt and Payment Account.

State the meaning of Income and Expenditure Account.

What are the features of Receipt and Payment Account?

What steps are taken to prepare Income and Expenditure Account from a Receipt and Payment Account?

What is meant by cash flow statement?

State why cash flow statement is not a substitute for income statement.

Cash receipts from sale of goods by a trading company will come under which activity while preparing cash flow statement?

Give an example of the activity which remains financing activity for every enterprise.

Payment of dividend is classified or shown as financing activity for both non-finance and finance company.Do you agree?

Quick ratio of a company is 1.5:1. State giving reason whether the ratio will improve, decline or not change on payment of dividend by the company.

The debt-equity ratio of a company is 0.8:1. State whether the long-term loan obtained by the company will improve, decrease or not change the ratio.

The inventory turnover ratio of a company is 3 times. State, giving reason, whether the ratio improves, declines or does not change because of increase in the value of closing inventory by Rs.5,000.

What will be the operating profit ratio if operating ratio is 83.64%? 

The current ratio of a company is 3:1. State with reason whether the payment of Rs.20,000 to the creditors will increase, decrease or not change the ratio.

Why is the government interested in analysing financial statements ? 

State the significante of analysis of financial statements to the 'creditors'.

Name two parties interested in Financial Statement Analysis.

State the interest of tax authorities in the analysis of financial statements.

State the interest of investors in the analysis of financial statements.

Name the two basic financial statements of a company as per Schedule III part I of the Companies Act,2013.

What is the number of major heads which appear for the equity and liabilities items of company's Balance Sheet?

Which Schedule and act prescribes the form for Companies Balance Sheet?

Define operating cycle

Under what heads and sub-heads the following items will appear in the Balance Sheet of a company as per schedule III, part-1 Companies Act 2013:
(i)Premium on redemption of Debentures
(ii)Loose tools
(iii)Balances with banks

What is meant by a Debenture?

What is a ‘Convertible Debenture’?

Why would an investor prefer to invest in shares and party in the debentures of a company? 

What is meant by issue of debentures as a collateral security? 

Pass necessary jounal entries for the issue of debentures in the following cases:
(i) Rs.30,000, 12% debentures of Rs.100 each issued at discount of 5%, redeemable at par.
(ii) Rs.40,000, 15% debentures of Rs.100 each issued at par, redeemable at par.

Give the definition of a share.

Give the meaning of 'Minium Subscription'.

What is meant by calls received in advance?

Give any two alternatives available to a company for the allotment of shares in case of oversubscription.

Nirmal Ltd. issued 50,000 equity shares of Rs.10 each. The amount was payable as follows:
On application            - Rs 3 per share
On allotment               - Rs 2 per share
On first and final call - The balance
Applications for 45,000 shares were received and shares were allotted to al the applicants. Pooja, to whom 500 shares were alloted, paid her entire share money at the time of allotment, wheras Kundan did not pay the first and final call on his 300 shares. Calculate the amount received at the time of making first and final call.

Give any one difference between reconstitution of firm and dissolution of a firm.

Give any one point of distinction between dissolution of partnership and dissolution of partnership firm.

How are assets taken over by a partner be recorded in the partnership books on dissolution?

Mention the account where you transfer the amount of cash in hand at the time of dissolution of firm.

Pass the necessary Journal entries for the following transactions on the dissolution of the firm of P and Q after the various assets (other than cash) and outside liabilities have been transferred to Realisation Account :
(i) Bank Loan Rs. 12,000 was paid.
(ii) Stock worth Rs. 16,000 was taken over by partner Q.
(iii) Partner P paid a creditor Rs. 4,000.
(iv) An asset not appearing in the books of accounts realised Rs. 1,200.
(v) Expenses of realisation Rs. 2,000 were paid by partner Q.
(vi) Profit on realisation Rs. 36,000 was distributed between P and Q in 5 : 4 ratio.

What is the need for treatement of goodwill on the death of a partner ?

Name the account which is opened to credit the share of profit of the deceased partner, till the time of his death to his Capital account.

At what rate is interest payable on the amount remaining unpaid to the executor of deceased partner ?

Why heirs of a retiring/deceased partner are entitled to a share of goodwill of the firm ?

Ram, Laxman and Bharat are partners sharing profits in the ratio of 3:2:1. Goodwill is appearing in the books at a value of Rs.1,80,000. Laxman retires and at the time of his retirement, goodwill is valued at Rs.2,52,000. Ram and Bharat decided to share future profits in the ratio of 2:1. The profits for the first year after Laxman's retirement amount to Rs.1,20,000. Give the necessary Journal Entries to record goodwill and to distribute the profits. Show your calculations clearly.

What is meant by change in profit sharing ratio?

Why are the 'Reserve and Surplus' distributed at the time of reconstitution of the firm?

State the ratio in which the partners share profits or losses on revaluation of assets and liabilities, when there is a change the profit sharing ratio amongest existing partners? 

State the ratio in which the partners share the accumulated profits when there is a change in the profit sharing ratio amongest existing partners.

Anita, Asha and Amrit are partners sharing profits in the ratio of 3:2:1 respectively. From 1st January 2010, they decided to share profits in the ratio of 1:3:2. The partnership deed provides that in the event of any change in profit sharing ratio, the goodwill should be valued at three years purchase of the average of five years profits. The profits and losses of the preceding five years are: Profits 2005-Rs 1,20,000; -Rs 3,00,000; 2007-Rs 3,40,000; 2008-Rs 3,80.000; 2009-Rs 1,40,000 (Loss).

Showing the working clearly, give the necessary journal entry to record the above change.

R and T are partners in a firm sharing profits in the ratio of 3:2. S join the firm , R giving him 1/4th of his share and T giving 1/5th of his share. Find the new profit sharing ratio of partners.

P and Q are partners in a firm sharing profits in the ratio of 7:5. They admit R as a partner in the firm. The new profit sharing ratio among P,Q and P,Q and R is 1:1:2. Calculate the sacrificing ratio.

A and B are partners in a firm sharing profits in the ratio of 5:3. They admit C into the partnership for 3/10th share in profits which he takes 2/10th from A and 1/10th from A and 1/10th from B. C brings in Rs.3,000 as premium in cash out of his share of Rs.7,800. Goodwill account does not appear in the books of A and B. Give the necessary journal entries in the books of the new firm.

L and M were partners in a firm sharing profits in 4:3 ratio. They admitted O as a new partner. The new profit sharing ratio of L,M and O will be 3:3:4. O brought Rs.2,00,000 for his capital. The goodwill of the firm on O's admission was valued at Rs.70,000. O brought his share of goodwill in cash. Calculate sacrificing ratio of L and M and pass necessary journal entries for the above transactions on O's admission.

A and B are partners sharing profits in the ratio of 5:3. They admit C for 1/4th share and agree to share future profits between them in the ratio of 2:1. Calculate new profit sharing ratio and sacrificing ratio.

How does the factor " efficiency of management" affect the goodwill of the firm ?

How does the factor " quality of product " affect the goodwill of the firm ?

How does the market situation affect the value of goodwill of a firm ?

State the nature of business afftect the value of goodwill of a firm ?

What are super profits ?

Give any one difference between reconstitution of firm and dissolution of a firm.

In case of dissolution of a firm which liabilities are to be paid first.

Give any one point of distinction between dissolution of partnership and dissolution of partnership firm.

In case of dissolution of a firm, which item on the liabilities side are to be paid last?

State the liability of partners in case of dissolution of firm.

What is the need for treatement of goodwill on the death of a partner ?

State any two deductions that may have to be made from the amount payable to the legal representative of a deceased partner.

Name the account which is opened to credit the share of profit of the deceased partner, till the time of his death to his Capital account.

At what rate is interest payable on the amount remaining unpaid to the executor of deceased partner ?

Why heirs of a retiring/deceased partner are entitled to a share of goodwill of the firm ?

What is meant by change in profit sharing ratio?

What is meant by sacrificing partner?

Give two circumstances in which sacrifice ratio may be applied.

Who should compensate to whom in case of a change in profit sharing ratio of existing partners?

Why are the 'Reserve and Surplus' distributed at the time of reconstitution of the firm?

Give any one difference between reconstitution of firm and dissolution of a firm.

In case of dissolution of a firm which liabilities are to be paid first.

Give any one point of distinction between dissolution of partnership and dissolution of partnership firm.

A and B are partners in a firm sharing profits in the ration of 3 : 2, Mrs A has given a loan of Rs. 20,000 to the firm and the firm also obtained a loan of Rs. 10,000 from B.  The firm was dissolved and its assets were realised for Rs. 25,000.  State the order of payment of Mrs A's  Loan and B's Loan with reason, if there are no creditors of the firm.

In case of dissolution of a firm, which item on the liabilities side are to be paid last?

What is the need for treatement of goodwill on the death of a partner ?

State any two deductions that may have to be made from the amount payable to the legal representative of a deceased partner.

Name the account which is opened to credit the share of profit of the deceased partner, till the time of his death to his Capital account.

At what rate is interest payable on the amount remaining unpaid to the executor of deceased partner ?

Why heirs of a retiring/deceased partner are entitled to a share of goodwill of the firm ?

What is meant by change in profit sharing ratio?

What is meant by sacrificing partner?

Give two circumstances in which sacrifice ratio may be applied.

Who should compensate to whom in case of a change in profit sharing ratio of existing partners?

Why are the 'Reserve and Surplus' distributed at the time of reconstitution of the firm?

What is the need for treatement of goodwill on the death of a partner ?

State any two deductions that may have to be made from the amount payable to the legal representative of a deceased partner.

Name the account which is opened to credit the share of profit of the deceased partner, till the time of his death to his Capital account.

At what rate is interest payable on the amount remaining unpaid to the executor of deceased partner ?

Why heirs of a retiring/deceased partner are entitled to a share of goodwill of the firm ?

What is meant by change in profit sharing ratio?

What is meant by sacrificing partner?

Give two circumstances in which sacrifice ratio may be applied.

Who should compensate to whom in case of a change in profit sharing ratio of existing partners?

Why are the 'Reserve and Surplus' distributed at the time of reconstitution of the firm?

What is meant by unlimited liability of a partner ?

State the provisions of Indian Partnership Act, 1932 regarding interest on parther's capital and interest on partner's loan when there is no partnership deed.

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

A Partnership deed provides for the payment of interest on capital but there was a loss instead of profits during the year 2010-2011.  At what rate will the interest on capital be allowed ?

A, B and C are partners decided that no interest on drawings is to be charged to any partner.  But after one year 'C' wants that interest on drawings should be charged to every partner.  State how 'C' can do this.

State the purpose of preparing a 'cash flow statement'.

Give one transaction which may result into outflow of cash and one which may result into no flow of cash.

Which values are reflected by a business in preparing a cash flow statement?

What are the various activities classified as per AS-3(revised) related to cash flow statement?

State one objective of cash flow statement.

Quick ratio of a company is 1.5:1. State giving reason whether the ratio will improve, decline or not change on payment of dividend by the company.

The debt-equity ratio of a company is 0.8:1. State whether the long-term loan obtained by the company will improve, decrease or not change the ratio.

What will be the operating profit ratio if operating ratio is 83.64%? 

The gross profit ratio of a company is 50%. State with reason whether the rent received by Rs.15,000 will increase, decrease or not change the ratio.

A business has a current ratio of 3:1. Its networking capital is Rs.4,00,000 and its stocks are valued at Rs.2,50,000. Calculate the quick ratio. Is it satisfactory? Identify the value shown by the company in maintaining such a quick ratio

Why is the government interested in analysing financial statements ? 

State any one limitation of financial Statement Analysis.

State how qualitative aspects are ignored in financial statement analysis

What is meant by Common-size Statement of Profit and Loss'?

Give the example of Horizontal Analysis.

Name the two basic financial statements of a company as per Schedule III part I of the Companies Act,2013.

What is the number of major heads which appear for the equity and liabilities items of company's Balance Sheet?

Which Schedule and act prescribes the form for Companies Balance Sheet?

Define operating cycle

What is an accounting period in case of a company?

What is meant by a Debenture?

What is a ‘Convertible Debenture’?

Why would an investor prefer to invest in debentures of a company rather than in its shares? 

Give the meaning of issue of debentures as a collateral security.

What is meant by irredeemable debentures? 

Give the definition of a share.

Give the meaning of 'registered capital' of a company.

What is meant by 'reserve capital' ?

What is meant by capital reserve?

Give the meaning of 'Minium Subscription'.

Give any one difference between reconstitution of firm and dissolution of a firm.

Distinguish between 'Dissolution of Partnership' and 'Dissolution of Partnership Firm' on the basis of  Settlement of accounts.

Why is the balance at bank never transferred to the realisation account on the dissolution of partnership firm?

How are assets taken over by a partner be recorded in the partnership books on dissolution?

Mention the account where you transfer the amount of cash in hand at the time of dissolution of firm.

What is the need for treatement of goodwill on the death of a partner ?

State any two deductions that may have to be made from the amount payable to the legal representative of a deceased partner.

Name the account which is opened to credit the share of profit of the deceased partner, till the time of his death to his Capital account.

At what rate is interest payable on the amount remaining unpaid to the executor of deceased partner ?

Why heirs of a retiring/deceased partner are entitled to a share of goodwill of the firm ?

What is meant by change in profit sharing ratio?

What is meant by sacrificing partner?

Give two circumstances in which sacrifice ratio may be applied.

Who should compensate to whom in case of a change in profit sharing ratio of existing partners?

Why are the 'Reserve and Surplus' distributed at the time of reconstitution of the firm?

L and M are partners in a firm sharing profits and losses in the ratio of 7:3. They admit N on 3/7 share which has takes 2/7 from L and 1/7 from M. Calculate the new profit sharing ratio.

R and T are partners in a firm sharing profits in the ratio of 3:2. S join the firm , R giving him 1/4th of his share and T giving 1/5th of his share. Find the new profit sharing ratio of partners.

P and Q are partners in a firm sharing profits in the ratio of 7:5. They admit R as a partner in the firm. The new profit sharing ratio among P,Q and P,Q and R is 1:1:2. Calculate the sacrificing ratio.

On 1.3.2006 A and C admitted D into the partnership, their profit sharing ratio being 5:4:3 respectively. Assuming before admission, the profit sharing ratio of A and C was equal find the sacrifice ratio.

A and B are partners in a firm sharing profits and losses in the ratio of 3:2. They admit C into partnership for 1/5th share. C brings Rs.30,000 as capital and Rs.10,000 as goodwill. At the time of admission of C goodwill appears in the balance sheet of A and B at Rs.3,000. New profit sharing of the partners shall be 5:3:2. Pass necessary entries in the books of new firm.

What is meant by unlimited liability of a partner ?

State the provisions of Indian Partnership Act, 1932 regarding interest on parther's capital and interest on partner's loan when there is no partnership deed.

Ram and Mohan are partners in a firm without any partnership deed.  Their capitals are Ram Rs. 8,00,000 and Mohan  Rs. 6,00,000.  Ram is an active partner and looks after the business.  Ram wants that profit should be shared in proportion of capitals.  State with reason whether his claim is valid or not.

Why is "Goodwill" considered an 'intangible Asset' but not 'Fictitious Asset'?

What is normal profit ?

How does the factor 'location' after the goodwill of a firm ?

State the ratio in which the partners share the accumulated profits when there is a change in the profit sharing ratio amongest existing partners.

A,T and R were partners in a firm sharing profits in the ratio of 5:6:7 respectively. State the ratio in which the goodwill of the firm amounting to Rs.16,00,000 will be adjusted in the capital accounts of A and T in case of R's death.

Distinguish between 'Dissolution of Partnership' and 'Dissolution of Partnership Firm' on the basis of Court's of intervention.

What is meant by over-subscription.

Why should a firm have a partnership deed?

State the ratio in which the partners share profits or losses on revaluation of assets and liabilities, when there is a change the profit sharing ratio amongest existing partners? 

State any two deductions that may have to be made from the amount payable to the legal representative of a deceased partner.

State the liability of partners in case of dissolution of firm.

A Ltd. forfeited 100 equity shares of Rs.10 each issued at a premium of 20% for the non-payment of final call of Rs.5 including premium. State the maximum amount of discount of discount at which these shares can be re-issued.

What is meant by unlimited liability of a partner ?

What is meant by change in profit sharing ratio?

State any two deductions that may have to be made from the amount payable to the legal representative of a deceased partner.

Distinguish between 'Dissolution of Partnership' and 'Dissolution of Partnership Firm' on the basis of  Settlement of accounts.

What is meant by capital reserve?

State the nature of business afftect the value of goodwill of a firm ?

Give two circumstances in which sacrifice ratio may be applied.

Why heirs of a retiring/deceased partner are entitled to a share of goodwill of the firm ?

A and B are partners in a firm sharing profits in the ration of 3 : 2, Mrs A has given a loan of Rs. 20,000 to the firm and the firm also obtained a loan of Rs. 10,000 from B.  The firm was dissolved and its assets were realised for Rs. 25,000.  State the order of payment of Mrs A's  Loan and B's Loan with reason, if there are no creditors of the firm.

At what rate can the company charge interest on 'calls-in-arrears' according to Table F of the Companies Act, 2013.

What is meant by a Debenture?

What is the nature of interest on debentures? 

Why would an investor prefer to invest in debentures of a company rather than in its shares? 

What is meant by issue of debentures as a collateral security? 

What is meant by irredeemable debentures?