(i) Inventory turnover ratio = \(\frac { Cost\quad of\quad revenue\quad from\quad operations }{ Average\quad inventory } \)
Average inventory = \(\frac { Opening\quad inventory+Closing\quad inventory }{ 2 } \)
=\(\frac { 70,000+50,000 }{ 2 } \)  = 60,000
∴ Inventory turnover ratio =\(\frac { 3,00,000 }{ 60,000 } \)  = 5 times.
(ii) Trade receivables turnover ratio = \(\frac { Credit\quad revenue\quad from\quad operations }{ Average\quad trade\quad receivables } \)
Average trade receivables = \(\frac { Opening\quad trade\quad receivables+Closing\quad trade\quad receivables }{ 2 } \)
= \(\frac { 40,000+30,000 }{ 2 } \) = 35,000
∴ Trade receivables turnover ratio = \(\frac { 5,25,000 }{ 35,000 } \) = 15 times
(iii) Trade payables turnover ratio = \(\frac { Net\quad credit\quad purchases }{ Average\quad trade\quad payables } \)
Average trade payables = \(\frac { Opening\quad trade\quad payables+Closing\quad trade\quad payables }{ 2 } \)
= \(\frac { 20,000+25,000 }{ 2 } =\frac { 45,000 }{ 2 } \)
= Rs.22,500
∴ Trade payables turnover ratio =\(\frac { 2,25,000 }{ 22,500 } \)  = 10 times.
(iv) Fixed assets turnover ratio = \(\frac { Revenue\quad from\quad operations }{ Average\quad fixed\quad assets } \)
Average fixed assets = \(\frac { Opening\quad fixed\quad assets+Closing\quad fixed\quad assets }{ 2 } \)
= \(\frac { 2,75,000+2,50,000 }{ 2 } =\frac { 4,75,000 }{ 2 } \)
= Rs.2,62,500
∴ Fixed assets turnover ratio = \(\frac { 5,25,000 }{ 2,62,500 } \) = 2 times

Dr                   Revaluation Account                      Cr

Particulars	Rs	Rs	Particulars	Rs
To Stock A/c		2,000	ByLand A/c	11,000
To Debtors A/c		3,000
To Profit on revaluation transferred to
Sankar's capital Ale (6,000 x 3/6)	3,000
Saleem's capital Ale (6,000 X 2/6)	2,000
Pandian's capital Ale (6,000 X 1/6)	1,000	6,000
		11,000		11,000

Capital Account

Particulars	Sankar Rs	Saleem Rs	Pandiyan Rs	Particulars	Sankar Rs	Saleem Rs	Pandiyan Rs
To profit and loss				By Balance b/d	50,000	40,000	10,000
A/c	3,000	2,000	1,000	By General reserve	18,000	12,000	6,000
				reserve	18,000	12,000	6,000
To Pandian's
Executor's A/c			16,000	By Revaluation
To Balance c/d	68,000	52,000		A/c (profit)	3,000	2,000	1,000
	71,000	54,000	17,000		71,000	54,000	17,000
				By Balance b/d	68,000	52,000

Balance sheet as on 31st December 2018

Liabilitie	Rs	Rs	Assets	Rs	Rs
Capital account			Land	80,000
Sankar	68,000		Add: Appreciation	11,000	91,000
Saleem	52,000	1,20,000
Pandians Executor's A/c		16,000	Stock	20,000
		14,000	Less: Depreciation	2,000	18,000
			Debtors	30,000
			Less: Bad debts	3,000	27,000
		1,50,000	Cash at bank		14,000
					1,50,000

New ratio:      Kokila :   Mala : Chandra
Old ratio             4      :       3    :         -
Old share           \(\frac{4}{3}\)     :     \(\frac{3}{7}\)    :          -
Sacrifice             \(\frac{2}{7}\)     :     \(\frac{1}{7}\)    :          -
New ratio = Old ratio - sacrifice
New share  \(=\frac { 4 }{ 7 } -\frac { 2 }{ 7 } \): \(\frac { 3 }{ 7 } -\frac { 1 }{ 7 } \) :    \(\frac { 3 }{ 7 } \)
                      = \(\frac { 2 }{ 7 } \)         :  \(\frac { 2 }{ 7 } \)        :     \(\frac { 3 }{ 7 } \)
∴New ratio  =  2         :  2         :    3 
Sacrifice ratio = 2 : 1

Dr.        Total Bills receivable account         Cr.

Particulars	Rs.	Particulars	Rs.
To Balance b/d	30,000	By Cash	25,000
To Total Debtors	30,000	By Balance c/d	35,000
(Balancing figure)	60,000		60,000

Dr. Total Bills payable account Cr.

Particulars	Rs.	Particulars	Rs.
To Cash	40,000	By Balance b/d	45,000
To Balance c/d	50,000	By Total creditors	45,000
		(Balancing figure)
	90,000		90,000

Dr.                                Total Debtors account                              Cr.

Particulars	Rs.	Particulars	Rs.
To Balance b/d	40,000	By Bad debts	2,000
To Sales	1,79,000	By Return inwards	4,000
(balancing figure)		By Discount allowed	3,000
		By Cash	1,00,000
		By Bills receivable	30,000
		(Transfer from bills receivable account)
		By Balance c/d	80,000
	2,19,000		2,19,000

Dr.                       Total Creditors account                    Cr.

Particulars	Rs.	Particulars	Rs.
To Discount received	5,000	By Balance b/d	50,000
To Cash	80,000	By Purchases	1,20,000
To Bills payable	45,000	(credit)
(transfer from bills		(Balancing figure)
payable account)
To Balance c/d	40,000
	1,70,000		1,70,000

Balance sheet as on 31^st March 20

Liabilities	Rs	Assets	Rs
(balancing figure)	43,550	Cash in hand	19,550
(balancing figure)		Subscription outstanding	2,000
		Furniture	15,000
		Books	7,000
	43,550		43,550

Dr Income and Expenditure Account for the year ended 31^stMarch 2 Cr

Expenditure	Rs.	Rs.	Income	Rs.	Rs.
To Salary	3,000		By Subscriptions	26,500
Add: Outstanding	600	3,600	Add: Outstanding for 2015-16	1,700	28,200
To Newspapers		2,050	By Sale of old newspaper		1,250
To Rent		6,800	By Interest on fixed deposit	450
Add: Outstanding	1,200	8,000	Add: Accrued interest	900	1,350
To Loss on sale of
furniture (7000 - 5700)		1,300
To Surplus		24,850
(Excess of income over
expenditure)
		40,800			40,800

Balance sheet as on 31^st March, 2016

Liabilities	Rs.	Rs.	Assets	Rs.	Rs.
Salary outstanding		600	Cash in hand		11,200
Rent outstanding		1,200	Subscription outstanding
Subscription			for 2014 - 15	800
received in advance		500	(2000 - 1200)
Capital fund	43,550		for 2015 - 16	1,700	2,500
Add: Surplus	24850	68,400	Fixed depo		20,000
			Accrued interest on fixed
			deposit		900
			Furniture (15000-7000 + 10,500		18,500
			Books (7,000 + 10,600		17,600
		70,700			70,700

In the books of clean Delhi club Income and Expenditure Dr     Account for the year ending March 31^st, 2017 Cr

Expenditure	Rs.	Income	Rs.
To Salary	1,500	By Subscriptions	22,500
To Rent	800	By Entrance fees	1,250
To Electricity	3,500	By Donation	2,500
To Printing & Stationery	380
To Surplus
(Excess of income over
expenditure)
	27,000		27,000

Dr Revaluation A/c Cr

Particulars	Rs	Rs	Particulars	Rs	Rs
To Machinary A/c		30,000	By Profit on revaluation transferred
To Stock A/c		10,000	Rajesh capital A/c	24,000
To Debtors A/c		8,000	\(\left( 48,000\times \cfrac { 3 }{ 6 } \right) \)
			Sathish's capital A/c	16,000
			\(\left( 48,000\times \cfrac { 2 }{ 6 } \right) \)
			Mathan's capital A/c	8,000	48,000
			\(\left( 48,000\times \cfrac { 1 }{ 6 } \right) \)
		48,000			48,000

Dr Capital Account Cr

Particulars	Rajesh Rs	Sathish Rs	Mathan Rs	Particulars	Rajesh Rs	Sathish Rs	Mathan Rs
To Mathan's capital A/c	12,000	28,000	-	By Balance b/d	4,00,000	3,00,000	2,50,000
To Revaluation A/c	24,000	16,000	8,000	By General
To Mathans loan A/c	-	-	3,02,000	revenue	60,000	40,000	20,000
To Balance c/d	4,24,000	2,96,000	-	By Rajesh's
				capital A/c	-	-	12,000
				By Mathans
				capital A/c	-	-	28,000
	4,60,000	3,40,000	3,10,000		4,60,000	3,40,000	3,10,000
				By Balance b/d	4,24,000	2,96,000	-

NOTE:
(i) Computing of gaining ratio
Share gained = New share - Old Share
Rajesh =\(\cfrac { 3 }{ 5 } -\cfrac { 3 }{ 5 } =\cfrac { 18-25 }{ 30 } =\cfrac { 3 }{ 30 } \)

Sathish = \(\cfrac { 2 }{ 5 } -\cfrac { 1 }{ 6 } =\cfrac { 12-5 }{ 30 } =\cfrac { 7 }{ 30 } \)
Therefore, the gaining of Rajesh and Sathish is 3:7
(ii) Adjustment for goodwill
Goodwill of the firm = Rs. 1,20,000
Share of goodwill of Mathan = \(Rs.1,20,000\times \cfrac { 2 }{ 6 } =Rs.40,000\)
It is to be adjusted in the capital accounts of Rajesh and Sathis in the gaining ratio 3:7
That is,
Rajesh : \(40,000\times \cfrac { 3 }{ 10 } =Rs.12,000\)
Sathish : \(40,000\times \cfrac { 7 }{ 10 } =Rs.28,000\)

Balance Sheet as on 31st March 2017

Liabilities	Rs	Rs	Assets	Rs	Rs
Capital accounts			Premises		4,00,000
Rajesh	4,24,000		Machinery	4,20,000
Sathish	2,96,000	7,20,000	Less: Depreciation	30,000	3,90,000
Mathans loan A/c		3,02,000	Debtors	1,60,000
Creditors		50,000	Less: Depreciation	8,000	1,52,000
Bills payable		1,80,000
			Stock	3,00,000
			Less: Depreciation	10,000	2,90,000
			Cash at bank
		12,52,000			12,52,000

Trend analysis for Anu Ltd

Particulars	in thousands			Trends percentage
	Year 1	Year 2	Year 3	Year 1	Year 2	Year 3
I Equity and liabilities
Shares holder's fund	500	550	600	100	110	120
Non-current liabilities	200	250	240	100	125	120
Current liabilities	100	80	120	100	80	120
Total	800	880	960	100	110	120
II. Assets
Non-current assets	600	720	780	100	120	130
Current assets	200	100	180	100	80	90
Total	800	880	960	100	110	120

Following steps are to be followed to enter the transactions in Tally ERP 9
1. To create company:
Company Info > Create Company
Type the Name as Peral and keep all other fields as they are and choose 'Yes' to accept.
2. To maintain accounts only:
Gateway of Tally > F11 Accounting Features > General > Maintain accounts only: Yes > Accept Yes
3. To create ledger accounts with opening balances:
Gateway of Tally > Masters > Accounts Info> Ledgers> Single Ledger> Create

Creation of	Name	Under	Opening balance	Accept
Bright’s Capital A/c	Bright’s Capital A/c	Capital Account	2,26,000	Yes
Ramesh A/c (Sundry creditors)	Ramesh A/c	Sundry Creditors	24,000	Yes
Machinery A/c	Machinery A/c	Fixed Assets	1,00,000	Yes
Furnitures A/c	Furnitures A/c	Fixed Assets	10,000	Yes
Opening stock	Opening stock	Stock-in -Hand	20,000	Yes
Shankar A/c (Sundry debtors)	Shankar A/c	Sundry Debtors	50,000	Yes
Cash in hand	Cash	Cash-in-Hand	15,000	Yes
Cast at bank	Bank	Bank Accounts	55,000	Yes

Note: 
Cash account need not be created as it is a default ledger. Only the opening balance has to be recorded by altering the cash account.
To record the opening balance of Cash
Gateway of Tally > Masters > Accounts Info > Ledgers > Single Ledger > Alter

After creating the ledgers and recording the opening balances of ledger accounts the balance sheet of Bright is shown as in the following figure:

4. To create ledger accounts for transactions

Creation of	Name	Under	Accept
Wages A/c	Wages A/c	Direct Expenses	Yes
Salaries A/c	Rent A/c	Indirect Expenses	Yes
Purchases A/c	Purchases A/c	Purchases Account	Yes
Senthamarai A/c	Senthamarai A/c	Sundry Creditors A/c	Yes
Sales A/c	Sales A/c	Sales Account	Yes
Pushparaj A/c	Pushparaj A/c	Sundry Debtors A/c	Yes
Depreciation A/c	Depreciation A/c	Indirect Expenses	Yes

5. To enter transactions through vouchers
Gateway of Tally > Transactions > Accounting Vouchers
Example: Wages of Rs. 2,000 paid by Cash
F5: Payment Voucher
Account: Cash
Particulars: Wages A/c
Amount: Rs. 2,000
Narration: Wages paid by cash
Accept: Yes
In the similar way, record the other transactions. Use Payment Voucher for Salaries paid and payment to Senthamarai.
Use Purchase Voucher for credit purchases from Senthamarai and cash purchases.
Use Sales Voucher for credit sales to Pushparaj and cash sales.
Use Receipt Voucher for cash received from Shankar.
Use Journal Voucher for depreciation.
To record closing stock:
Since maintain accounts only is set to 'Yes' and integrate accounts and inventory is set to "No" under accounting features. Stock has to be recorded manually. Hence the closing stock has to be recorded by altering the stock account and while entering the data of closing stock, the date of opening stock has to be entered. The following procedure is to be followed:
Gateway of Tally > Masters > Accounts Info > Ledgers > Single Ledger > Alter > Stock > Closing balance > Date (opening date) > Amount > Accept Yes

6. To view reports:
(i) To view Profit and Loss Account:
F10: A/c Reports > Profit & Loss A/c > Alt + F1 (detailed) (or)
Gateway of Tally > Report > Profit & Loss A/c > Alt + F1 (detailed)

(ii) To view Balance sheet:
F10: A/c Reports > Balance sheet > Alt + F1 (detailed) (or)
Gateway of Tally > Reports > Balance Sheet > Alt + F1 (detailed)

Generally, the following factors determine the value of goodwill of a partnership firm:
(i) Profitability of the firm: A firm earning higher profits and having potential to generate higher profits in future will have higher value of good will.
(ii) Good quality of goods or services offered: If a firm enjoys good reputation among the customers and general public for the good quality of its products or services, the value of goodwill for the firm will be high.
(iii) Tenure of the business enterprise: A firm which has carried on business for several years will have higher reputation among its customers as it is better known to the customers.
(iv) Efficiency of management: A firm having efficient management will earn more profits and the value of its goodwill will be higher compared to a firm with less efficient managerial personnel.
(v) Degree of competition: In the case of business enterprises having no competition or negligible competition, the value of goodwill will be high
(vi) Other factors: There are other factors which add to the value of goodwill of a business such as popularity of the proprietor, impressive advertisements and publicity, good relations with customers, etc.

Dr Profit and loss appropriation accounts for the year ended
31st December 2018 Cr

Particulars	Rs.	Rs.	Particulars	Rs.
To Interest on capital A/c			By Profit and loss A/c	3,65,000
Antony (4,00,000 \(\times\) 5%)	20,000
Ranjith (3,00,000 \(\times\) 5%)	15,000	35,000
To Salary to Antony		90,000
To Commission to Ranjith		48,000
To Partner's capital A/c (profit)
Antony \(\left( 1,92,000\times \frac { 1 }{ 2 } \right) \)	96,000
Ranjith \(\left( 1,92,000\times \frac { 1 }{ 2 } \right) \)	96,000	1,92,000
		3,65,000		3,65,000

Profit before commission = 3,65,000 - (35,000 + 90,000) = Rs. 2,40,000
Commission = Net profit before commission \(\times\) \(\frac{Rate \ of \ commission}{(100+Rate \ of \ commission)}\)
Commission = 2,40,000 \(\times\) \(\frac{25}{125}\) = Rs. 48,000

Dr. Profit and loss appropriation account for the year ended 31st December 2018 Cr.

Particulars	Rs.	Rs.	Particulars	Rs.
To Interest on capital A/c			By Profit and loss A/c	3,00,000
Richard (3,00,000 x 6%)	18,000
Rizwan (2,00,000 x 6%)	12,000	30,000
To Salary to Rizwan		50,000
To Commission to Richard		20,000
To Partners’ capital A/c (profit)
Richard (3/5)	1,20,000
Rizwan (2/5)	80,000	2,00,000
		3,00,000		3,00,000

 Calculation of commission:
Profit before commission = 3,00,000 – (50,000 + 30,000) = Rs. 2,20,000
Commission = Net profit before commission \(\times\) \(\frac { Rate\quad of\quad commission }{ (100+Rate\quad of\quad commission) } \)
Commission = 2,20,000 \(\times\) \(\frac { 10 }{ 110 } \) = Rs. 20,000

To find the opening capital fund, opening balance sheet should be prepared.

In the books of Coimbatore Cricket Club Balance sheet as on 31^st March, 2015

Liabilities	Rs.	Assets	Rs.
Capital fund	10,500	Stock of balls and bats	3,000
(Balancing figure)		Cash at bank	8,000
Subscription received in advance	500
	11,000		11,000

Dr. Income and Expenditure Account for the year ended 31st March, 2016 Cr.

Expenditure	Rs.	Rs.	Income	Rs.	Rs.
To Maintenance		5,000	By Subscriptions	11,000
To Secretary’s honorarium		4,500	Add: Received in advance
To Bats and balls	7,400		in 2014-15 for 2015-16	500
Add: Opening stock	3,000			11,500
	10,400		Add: Outstanding for 2015-16	2,000	13,500
Less: Closing stock	1,000	9,400	By Sale of old bats and balls		100
			By Excess of expenditure
			over income (deficit)		5,300
		18,900			18,900

Balance sheet as on 31^st March, 2016

Liabilities	Rs.	Rs.	Assets	Rs.
Capital fund	10,500		Furniture	15,000
Less : Excess of expenditure			Stock of balls and bats	1,000
over income (deficit)	5,300	5,200	Subscriptions outstanding	2,000
Reserve for Pavilion Fund			Cash at bank	7,800
Subscriptions for tournament	2,000
Less: Tournament Expenses	1,400	600
Legacies		20,000
		25,800		25,800

(i) Intra-firm comparison is comparison within the organisation among different departments, division etc
(ii) Inter-firm comparison is comparison of one firm with other firm or firms in the industry.

(i) Credit side of partner's current account.
(ii) Debit side of partner's capital account
(iii) Credit of partner's capital account
(iv) Debit side of partner's current account
(v) Credit side of partner's current account

The individual other than minors who cannot be admitted by them are
(i) Person of unsound mind
(ii) Person of disqualified by law

(i) Simple method: Proprietors, who do not have the proper knowledge of accounting principles. Find it much convenient and easier to maintain their business records under this system.
(ii) Less expensive: It is an economical mode of maintaining records as there is no need to appoint specialised accountant.
(iii) Flexible: Owner may record transactions as particular own needs. It can be easily adjusted or changed whenever needed.
(iv) Less time consuming: Maintaining books according to the single entry system is less time consuming, as only few books are to be maintained. Further the books are not as comprehensive as they are under double entry system.

The purpose of finding the gaining ratil:>is to bear the goodwill to be paid to the retiring partner.
The share gained is calculated as follows:
Share gained = New share - Old share
Gaining ratio = Ratio of share gained bythe continuing partners.

Capital gearing ratio = \(\frac{Funds\ bearing\ fixed\ interest\ and\ fixed\ dividend}{Equity\ shareholders'funds}\)
= \(\frac{3,00,000}{4,00,000}\) = 0.75:1
Funds bearing fixed interest and dividend = 6% Preference share capital + 8% Debentures
= 1,00,000 + 2,00,000 = Rs.3,00,000
Equity shareholder’s funds = Equity share capital + General reserve + Surplus
= 2,00,000 + 1,25,000 + 75,000 = Rs.4,00,000

When the number of shares applied for is more than the number of shares offered for subscription, it is said to be over subscription.

Routine accounting reports include
(a) Day books / Journal
(b) Ledger
(c) Trial balance
(d) Income statement
(e) Balance sheet
(f) Cash flow statement

Total capitalised value of the average profit = \(\frac { Average\ profit }{ Normal\ rate\ of\ return } \)\(\times\) 100
=\(\frac { 60,000 }{ 10 } \) \(\times\) 100
= Rs. 6,00,000
Goodwill = Total capitalised value of the average profit – Capital employed
= 6,00,000 – 4,50,000
= Rs. 1,50,000

Balance sheet of Chennai tennis club as on 31^st March, 2019

Liabilities	Rs	Rs	Assets	Rs
Match fund	24,000
Add: Receipt the fund	26,000
	50,000
Less: Match expenses	33,000	17,000

Functional classification of ratio is based on the purpose for which ratios are computed and it is the most commonly used classification. Under the functional classification, the ratios are classified as follows:
(i) Liquidity ratios
(ii) Long term solvency ratios
(iii) Turnover ratios
(iv) Profitability ratios

Following are the characteristics of a company:
(a) Voluntary association: A company is a voluntary association of persons. No law can compel persons to form a company
(b) Separate legal entity: Company is an artificial person. It has a separate legal entity which is separate and distinct from its members.
(c) Common seal: A company may have a common seal which can be affixed on the documents.
(d) Perpetual succession: A company continues for ever. Its continuity is not affected by the changes in its members. It can be wound up only by law.
(e) Limited liability: The liability of the shareholders of the company is limited to the extent of face value of the shares held by the shareholders.
(f) Transferability of shares: The shares of a company are freely transferable except incase of a private company.

Journal entry

Date	Particulars	L.f	Debit Rs.	Credit Rs.
	Profit and loss appropriation A/c Dr		2,47,500
	To A's capital A/c			1,23,750
	To A's capital A/c (Being profit transferred to capital account)			1,23,750

Values shown by the firm are
i. Responsibility :
Firm has shown responsibility towards senior citizens by giving them their dues.
ii. Compassion:
Partners have shown compassion towards senior citizens by fulfilling their duties towards senior citizens .

Following are the journal entries to be passed to record the revaluation of assets and liabilities

Date	Particulars		L.F	Debit Rs.	Credit Rs.
	1. For increase in the value of asset
	Concerned asset A/c	Dr		XXX
	To Revaluation A/c				XXX
	2. For decrease in the value of asset
	Revaluation A/c	Dr		XXX
	To Concerned asset A/c				XXX
	3. For increase in the amount of liabilities
	Revaluation A/c	Dr		XXX
	To Concerned liabilities A/c				XXX
	4. For decrease in the amount of liability
	Concerned liability A/c	Dr		XXX
	To Revaluation A/c				XXX
	5. For recording an unrecorded asset
	Concerned asset A/c	Dr		XXX
	To Revaluation A/c				XXX
	6. For recording an unrecorded liability
	Revaluation A/c	Dr		XXX
	To Concerned liability A/c				XXX
	7. For transferring the balance in revaluation Alc
	(a) If there is profit on revaluation
	Revaluation A/c	Dr		XXX
	To Old partner's capital A/c (individually in old ratio)				XXX
	(b) If there is loss on revaluation
	Old partner's capital Alc (individually in old ratio)			XXX
	To Revaluation Ale				XXX

A comparative statement has five columns. Following are the steps to be followed in preparation of the comparative statement.
(i) Column 1: In this column, particulars of items of income statement or balance sheet are written.
(ii) Column 2: Enter absolute amount of year 1
(iii) Column 3: Enter absolute amount of year 2
(iv) Column 4: Show the difference in amounts between year 1 and year 2. If there is an increase in year 2, put plus sign and if there is decrease put minus sign.
(v) Column 5: Show percentage increase or decrease of the difference amount shown in column 4 by dividing the amount shown in column 4 (absolute amount of increase or decrease) by column 2 (year 1 amount). That is,
Percentage increase or decrease
\(\frac{Absolute \ amount \ of \ increase \ or \ decrease}{Year \ 1 \ amount}\times100\)
Format of comparative statement:

Particular	Year 1	Year 2	Absolute amount of increase (+) or Decrease (-)	Percentage increase (+) ordecreases (-)
	Rs.	Rs.	Rs.
(1)	(2)	(3)	(4)	(5)

In the books of Nathiya Textiles Ltd Journal entries

Date	Particulars		L.F	Debit Rs.	Credit Rs.
	Share capital A/c (100 x 8)	Dr		800
	To Equity share first call A/c (100 x 2)				200
	To Forfeited shares A/c (100 x 6)				600
	(Forfeiture of 700 shares, Rs.8 called up)
	Bank A/c (75 x 7)	Dr		525
	Forfeited shares A/c	Dr		225
	To Share capital A/c				750
	(Reissue of 75 forfeited Share)
	Forfeited shares A/c	Dr		375
	To Capital reserve A/c				375
	(Balance left in shares forfeited account transferred to capital reserve A/c)

Journal entries

Date	Particulars		L.F	Debit Rs.	Credit Rs.
2018 Dec. 31	(i) Kumudha’s capital A/c	Dr.		2,00,000
	To Bank A/c				2,00,000
	(Amount due paid immediately)
"	(ii) Kumudha’s capital A/c	Dr.		2,00,000
	To Kumudha’s loan A/c				2,00,000
	(Amount due transferred to loan account)
"	(iii) Kumudha’s capital A/c			2,00,000
	To Bank A/c				70,000
	To Kumudha’s loan A/c				1,30,000
	(Rs. 70,000 paid and the balance transferred to loan account)

Following are the limitations of ratio analysis:
(i) Accuracy of financial information : The accuracy of a ratio depends on the accuracy of information taken from financial statements.
(ii) Consistency in preparation of financial statements: Inter-firm comparisons with the help of ratio analysis will be meaningful only if the firms follow uniform accounting procedures consistently.
(iii) Non-availability of standards or norms: Ratios will be meaningful only if they are compared with accepted standards or norms. Only few financial ratios have universally recognised standards.
(iv) Change in price level : Ratio analysis may not reflect price level changes and current values as they are calculated based on historical data given in financial statements.

To View Profit and Loss Account
F10: A/c Reports > Profit & Loss A/c > Alt F1 (detailed)
(or)
Gateway of Tally > Reports> Profit & Loss A/c > Alt F1 (detailed)

Capitalised value of the business = \(\frac{Average\ profit}{Normal\ rate\ of\ return}\times100\)
= \(\frac{20,000}{10}\times100\)
= Rs. 2,00,000
Capital employed = Fixed assets (excluding goodwill) + Current assets - Current Liabilities
Capital employed = Tangible assets of the firm - Liabilities of the firm
Net tangible assets = 2,20,000 - 70,000 = Rs. 1,50,000
Goodwill = Total capitalised value of the average profit - Capital employed
= 2,00,000 - 1,50,000
= Rs. 50,000

Balance sheet of Karaikudi sports club as on 31 stMarch, 2019 Liabilities Rs Rs Assets Rs Tournament fund 90,000   Tournament fund investment  90,000 Add: Interest received         on tournament fund         investment 9,000       Add: Donation to         to 10,000         1,09,000       Less: Tournament         expenses 60,000 49,000