Dr                         Revaluation Account                      Cr

Particulars	Rs.	Rs.	Partiulars	Rs.
To Stock A/c		2,000	By Buildings A/c	5,000
To Furniture A/c		100
To Debtors A/c		800
To Profit on revaluation transferred capital A/c
Rajan (3/4)	1575
Selva (1/4)	525	2,100
		5,000		5,000

Dr                                                       Capital Account                                                      Cr

Particulars	Rajan Rs.	Selva Rs.	Ganesan Rs.	Particulars	Rajan Rs.	Selva Rs.	Ganesan Rs.
To Profit and loss A/c	7,500	2,500	-	By Balance b/d	30,000	16,000	-
To Balance c/d	27,075	15,025	10,000	By General reserve A/c	3,000	1,000	-
				By Revaluation A/c	1,575	525	-
				By Bank A/c	-	-	10,000
	34,575	17,525	10,000		34,575	17,525	10,000

Balance sheet as on 1st April 2017

Liabilities	Rs.	Rs.	Assets	Rs.	Rs.
Capital Account:			Building	25,000
Rajan	27,075		Add: Appreciation Furniture	5,000	30,000
Selvam	15,025		Furniture	1,000
Ganesan	10,000	52,100	Less: Depreciation	100	900
Creditors		37,500	Stock	20,000
			Less: Depreciation	2,000	18,000
			Debtors	16,000
			Less: Doubtful doubts	800	15,200
			Cash at bank	12,500
			Add: Ganesan's capital	10,000	22,500
			Bills receivable		3,000
		89,600			89,600

Dr. Revaluation Account Cr.

Particulars	Rs.	Rs.	Particulars	Rs.
To Stock A/c		1,000	By Plant and Machinery A/c	9,000
To Profit on revaluation transferred to
Ramesh’s capital A/c (3/8	3,000
Ravi’s capital A/c (3/8)	3,000
Akash’s capital A/c (2/8)	2,000	8,000
		9,000		9,000

Dr. Capital Account Cr.

Particulars	Ramesh Rs.	Ravi Rs.	Akash Rs.	Particulars	Ramesh Rs.	Ravi Rs.	Akash Rs.
To Akash’s capital A/c	3,000	3,000		By Balance b/d	30,000	30,000	20,000
To Akash’s Executor A/c			34,000	By General reserve A/c	3,000	3,000	2,000
To Balance c/d	33,000	33,000		By Revaluation A/c (profit)	3,000	3,000	2,000
				By Profit and loss suspense A/c			4,000
				By Ramesh’s capital A/c			3,000
				By Ravi’s capital A/c			3,000
	36,000	36,000	34,000		36,000	36,000	34,000
				By Balance b/d	33,000	33,000

Balance Sheet as on 31st December, 2018

Liabilities	Rs.	Rs.	Assets	Rs.	Rs.
Capital accounts:			Plant and machinery	45,000
Ramesh	33,000		Add: Appreciation	9,000	54,000
Ravi	33,000	66,000	Stock	22,000
Akash’s Executor’s A/c		34,000	Less: Depreciation	1,000	21,000
Sundry creditors		8,000	Debtors		15,000
			Cash at bank		10,000
			Cash in hand		4,000
			Profit and loss suspense A/c		4,000
		1,08,000			1,08,000

(i) Profit sharing ratio
Profit sharing ratio = Capital ratio = 30,000: 30,000: 20,000 that is, 3:3:2
Gaining ratio between Ramesh and Ravi = Old profit sharing ratio = 3:3 that is 1:1
(ii) Calculation of Akash’s share of current year’s profit
Average profit = \(\frac{66, 000 +60, 000+ 66, 000 +1,92, 000}{3} = 64,000\)
Current year’s profit upto the date of death = 64,000 × 3/12 = Rs.16,000
Akash’s share of current year’s profit = 16,000 × 2/8 = Rs. 4,000
(iii) Akash’s share of goodwill = 24,000 × 2/8 = Rs. 6,000
It is to be borne by Ramesh and Ravi in the gaining ratio of 1:1

Common-size balance sheet ofYasmin Ltd and Sakthi Ltd

Particulars	Yamin Ltd			Sakthi Ltd
	Absolute amount Rs.	Persontage of  total assets		Absolute Amount Rs.	Percentage of total assets
I Equity and liabilities
1. Shares holder's fund
a. Share capital	2,00,000	40		3,00,000	50
b. Reserve and surplus	50,000	10		60,000	10
2. Non-current liabilities
Long-term borrowings	1,50,000	30		1,80,000	30
3. Current liabilities
Trade payables	1,00,000	20		60,000	10
Total	5,00,000	100		6,00,000	100
II. Assets
1. Non-current assets
a. Fixed assets	2,00,000	40		3,00,000	50
b. Non - current investments	50,000	10		1,20,000	20
2. Current assets
Inventories	2,00,000	40		90,000	15
Cash and cash equivalents	50,000	10		90,000	15
Total	5,00,000	100		6,00,000	100

Note: Yasmin Ltd
Percentage of Share capital = \(\frac{2,00,000}{5,00,000}\) \(\times\) 100 = 40%
Percentage of Reserves and surplus = \(\frac{50,000}{5,00,000}\) \(\times\) 100 = 10%
Percentage of Long-term borrowing = \(\frac{1,50,000}{5,00,000}\) \(\times\) 100 = 30%
Percentage of Trade payables = \(\frac{1,00,000}{5,00,000}\) \(\times\) 100 = 20%
Percentage of fixed assets = \(\frac{20,00,000}{5,00,000}\) \(\times\) 100 = 40%
Percentage of Non-current investment = \(\frac{50,000}{5,00,000}\) \(\times\) 100 = 10%
Percentage of inventories = \(\frac{20,00,000}{50,000}\) \(\times\) 100 = 40%
Percentage of cash and cash equivalents = \(\frac{50,000}{5,00,000}\)\(\times\) 100 = 10%
Note: Sakthi Ltd.
Percentage of Share capital = \(\frac{3,00,000}{6,00,000}\) \(\times\) 100 = 50%
Percentage of Reserves and surplus = \(\frac{60,000}{6,00,000}\) \(\times\) 100 = 10%
Percentage of Long-term borrowing = \(\frac{1,80,000}{6,00,000}\) \(\times\) 100 = 30%
Percentage of Trade payables = \(\frac{60,000}{6,00,000}\) \(\times\) 100 = 10%
Percentage of fixed assets = \(\frac{3,00,000}{6,00,000}\) \(\times\) 100 = 50%
Percentage of Non-current investment = \(\frac{1,20,000}{6,00,000}\) \(\times\) 100 = 20%
Percentage of Inventories = \(\frac{90,000}{6,00,000}\) \(\times\) 100 = 15%
Percentage of cash and cash equivalents = \(\frac{90,000}{6,00,000}\) \(\times\) 100 = 15%

In the books of Divya Ltd. Journal entries

Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Bank A/c (14,000 × 2)	Dr.		28,000
	To Equity share application A/c				28,000
	(Application money for 14,000 shares received)
	Equity share application A/c (10,000 × 2)	Dr.		20,000
	To Equity share capital A/c				20,000
	(Application money transferred to share capital)
	Equity share application A/c (4,000 × 2)	Dr.		8,000
	To Equity share allotment A/c				8,000
	(Excess application money adjusted towards allotment)
	Equity share allotment A/c (10,000 × 5)	Dr.		50,000
	To Equity share capital A/c (10,000 × 3)				30,000
	To Securities premium A/c (10,000 × 2)				20,000
	(Allotment money due)
	Bank A/c (50,000 – 8,000)	Dr.		42,000
	To Equity share allotment A/c				42,000
	(Allotment money received)
	Equity share first call A/c (10,000 × 3)	Dr.		30,000
	To Equity share capital A/c				30,000
	(First call amount due)
	Bank A/c (9,700 × 3)	Dr.		29,100
	To Equity share first call A/c				29,100
	(First call money received for 9,700 shares)
	Equity share second and final call A/c (10,000 × 2)	Dr.		20,000
	To Equity share capital A/c				20,000
	(Second and final call amount due)
	Bank A/c (9,700 × 2)	Dr.		19,400
	To Equity share second and final call A/c				19,400
	(Second and final call money received for 9,700 shares)
	Equity share capital A/c (300 × 10)	Dr.		3,000
	To Equity share first call A/c (300 × 3)				900
	To Equity share second and final call A/c (300 × 2)				600
	To Shares forfeited A/c				1,500
	(Forfeiture of 300 shares for non-payment first and second calls)
	Bank A/c (200 × 9)	Dr.		1,800
	Shares forfeited A/c	Dr.		200
	To Equity share capital A/c				2,000
	(Re-issue of 200 forfeited shares)
	Shares forfeited A/c	Dr.		800
	To Capital reserve A/c				800
	(Profit on re-issue of 200 forfeited shares transferred to capital reserve account)

Working note:
Amount forfeited for 300 shares = Rs.1,500

Amount forfeited for 200 shares =	\(\frac{1,500}{300}\) x 200 =	1,000
Less: Loss on reissue		200
Net gain transferred to capital reserve		800

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)

Average profit \(=\frac{Total\ profit}{Number\ of\ years}\)
\(=\frac{30,000+40,000+50,000+45,000}{3}\)
\(\frac{1,62,000}{4}\) = Rs. 40,500
Normal profit = Capital employed \(\times\) Normal rate of return
= 3,00,000 \(\times\) \(\frac{10}{100}\) = Rs. 30,000
Super profit = Average profit - Normal profit
= 40,500 - 30,000 = Rs. 10,500
Goodwill = \(\frac{super\ profit}{Normal\ rate\ of\ return}\)\(\times\) 100
= \(\frac{10,500}{10}\times100\) = Rs. 1,05,000

Dr Partnes' Capital Account Cr

Date	Particulars	Rooban Rs.	Deri Rs.	Date	Particualrs	Rooban Rs.	Deri Rs.
2018 March 31	To Balance c/d (Balancing figure)	88,000	66,000	2018  1 April	By Balance b/d	70,000	50,000
					By Bank (Additional capital)	18,000	16,000
		88,000	66,000			88,000	66,000
				2019 April 1	By Balance b/d	88,000	66,000

Dr Partners' Current Account Cr

Date	Particulars	Rooban Rs.	Deri Rs.	Date	Particulars	Rooban Rs.	Deri Rs.
	To Drawings	10,000	6,000		By Balance b/d	25,000	15,000
	To Interest on drawings	500	300		By Profit and loss appropriation A/c (Share of profit)	35,000	25,800
	To Balance c/d (B/F)	65,000	55,000		By Interest on capital	3,500	2,500
					By Salary	-	18,000
					By Commission	12,000	-
		75,500	61,300			75,500	61,300
					By Balance b/d	65,000	55,000

Calculation of subscription to be received for the year 2018-19:

	Rs.
Subscription for the current year (450 ×Rs.30)	13,500
Subscription received for the current year	12,500
Subscription outstanding for the current year
(Rs.13,500 – Rs.12,500)	1,000

In the books of Salem Recreation Club Dr. Income and Expenditure Account for the year ended 31^st March, 2019 Cr.

Expenditure	Rs.	Rs.	Income	Rs.	Rs.
To Stationery	2,400		By Subscription	12,500
Add: Opening stock	300		Add: Outstanding for
	2,700		2018-19	1,000
Less: Closing stock	500	2,200	(450 × Rs.30)		13,500
To Postage		1,000	By Proceeds from		12,000
To Excess of income			entertainment		12,000
over expenditure (surplus)		22,800	By Sundry receipts		500
		26,000			26,000

Balance sheet as on 31^st March, 2019

Liabilities	Rs.	Rs.	Assets	Rs.
Capital fund	9,300		Furniture	15,000
Add: Excess of income			Investment	12,500
over expenditure (surplus)	22,800	32,100	Subscription in arrears
Subscription received in advance		400	for 2018-19	1,000
			Stock of stationery	500
			Cash in hand	3,500
		32,500		32,500

Calculation of opening capital:

In the books of Ananth Statement of affairs as on 31.3.2018

Liabilities	Rs.	Assets	Rs.
Sundry creditors	1,70,000	Cash at bank	5,000
Capital (Balancing figure)	1,93,000	Cash in hand	3,000
		Stock of goods	35,000
		Sundry Debtors	1,00,000
		plant and machinery	80,000
		Land and buildings	1,40,000
	3,63,000		3,63,000

 Calculation of dosing capital:

Statement of affairs as on 31.3.2019

Liabilities	Rs.	Assets	Rs.	Rs.
Bank balance (Bank overdraft)	60,000	Cash in hand		4,500
		Stock of goods		45,000
Sundry creditors	1,30,000
Capital (Balancing figure)	1,57,000	Sundry debtors	90,000
		Less :Provision on debtors 5%	4,500	85,000
		Plant and machinery	80,000
		Less : Depreciation 10%	8,000	72,000
		Land and Buildings		1,40,000
	3,47,000			3,47,000

Statement of profit or loss for the year ending
31^st March 2019

Particulars	Rs.
Closing capital as on 31.3.2019	1,57,000
Add: Drawings during the year	60,000
	2,17,000
Less: Additional capital introduced during the year	17,000
Adjusted dosing capital	2,00,000
Less: Opening capital as on 31.03.2018	1,93,000
Profit for the year ending 31.3.2019	7,000

Operating cost ratio = \(\frac { Operating\ cost }{ Revenue\ from\ operations } \) \(\times\) 100
Cost of revenue from operations = Purchases of stock-in-trade + Change in inventories of stock in trade + Direct expenses (wages)
= Rs.8,60,000 + 40,000 = Rs.9,00,000
Operating expenses = Administrative expenses + Selling and distribution expenses + Employee benefits expenses (salaries)
= 50,000 + 90,000 + 1,60,000 = Rs.3,00,000
Operating cost = Cost of revenue from operations + Operating expenses
= 9,00,000 + 3,00,000 = Rs.12,00,000
∴ Operating cost ratio = \(\frac { 12,00,000 }{ 15,00,000 } \) \(\times\) 100 = 80%

Debit equity ratio = \(\frac { Long\ term\ debt }{ Shareholders\ funds } \ \)
Long term debt = Debentures
= Rs.6,00,000
Shareholder's funds = Equity share capital + Reserves and surplus
= Rs.6,00,000 + Rs.2,00,000 = Rs.8,00,000
∴ Debt equity ratio = \(\frac { 6,00,000 }{ 8,00,000 } \) = 0.75:1

Comparative income statement of Arul Ltd for the years ended 31^st March 2016 and 31^st March 2017

Particulars	2015-16	2016-17	Absolute amount of increase (+) or decrease (-)	Percentage increase (+) or decrease (-)
Revenue from Operations	50,000	60,000	+10,000	+20
Add: Other income	10,000	30,000	+20,000	+200
Total revenue	60,000	90,000	+30,000	+50
Less: Expenses	40,000	50,000	+10,000	+25
Profit before tax	20,000	40,000	+20,000	100

Note:
Computation of percentage increase for revenue form operations =  \(\frac{10,000}{50,000}\times100\) = 20%
Percentage increase for other incomes = \(\frac{20,000}{10,000}\times100\) = 200%
Percentage increase for expenses = \(\frac{10,000}{40,000}\times100\) = 25%