Dr.                                    Revaluation Account                                     Cr.

Particulars	Rs.	Rs.	Particulars	Rs.
To Furniture A/c		2,000	By Stock A/c	4,000
To Profit on revaluation transferred to			By Machinery A/c	20,000
Ameer’s capital A/c (3/5)	13,200
Raja’s capital A/c (2/5)	8,800	22,000
		24,000		24,000

Dr.                                        Capital Account                                           Cr.

Particulars	Ameer Rs.	Raja Rs.	Rohit Rs.	Particulars	Ameer Rs.	Raja Rs.	Rohit Rs.
To Balance c/d	1,08,200	88,800	30,000	By Balance b/d	80,000	70,000	-
				By Bank A/c	-	-	30,000
				By Reserve fund A/c	9,000	6,000	-
				By Revaluation A/c	13,200	8,800	-
				By Bank A/c* (share of goodwill	6,000	4,000	-
	1,08,200	88,800	30,000		1,08,200	88,800	30,000
				By Balance b/d	1,08,200	88,800	30,000

Since the sacrificing ratio is not given and the new partner’s share is given, it is assumed that the old profit sharing ratio (3:2) is the sacrificing ratio and the new partner’s share of goodwill is distributed to the old partners accordingly.

Dr.                         Cash at bank Account                        Cr.

Date	Particulars	Rs.	Date	Particulars	Rs.
	To Balance b/d	20,000		By Balance	60,000
	To Rohit’s capital A/c	30,000
	To Ameer’s capital A/c	6,000
	To Raja’s capital A/c	4,000
		60,000			60,000

Balance Sheet as on 1st January 2019

Liabilities	Rs.	Rs.	Assets	Rs.	Rs.
Capital accounts:			Machinery	60,000
Ameer	1,08,200		Add: Appreciation	20,000	80,000
Raja	88,800		Furniture	40,000
Rohit	30,000	2,27,000	Less: Depreciation	2,000	38,000
		35,000	Debtors		30,000
			Stock	10,000
			Add: Appreciation	4,000	14,000
			Prepaid insurance		40,000
			Cash at bank		60,000
		2,62,000			2,62,000

In the books of Saranya Ltd Journal entries Date Particulars    L.F  Debit Rs. Credit Rs.   Bank A/c (30,000 x 3)  Dr    90,000     To Equity share application A/c       90,000   (Application money received)           Equity share application A/c (20,000 x 3)  Dr   60,000     To Equity share capital A/c       60,000   (Transfer of share application money to share
capital)           Equity share application A/c (10000 x 3)  Dr   30,000     To Bank A/c       30,000   (Excess share application money refunded)           Equity share allotment A/c (20,000 x 4)  Dr   80,000     To Equity share capital A/c       80,000   (share allotment money due)           Bank A/c  Dr   80,000     To Equity share allotment A/c       80,000   (Allotment money received)           Equity share first and final call A/c  Dr   60,000     To Equity share capital A/c       60,000   (share first and final call money due)           Bank A/c  Dr   60,000     To Equity share first and final call A/c       60,000   (share first and final money received)        

Dr. Revaluation Account Cr.

Particulars	Rs.	Rs.	Particulars		Rs.
To Furniture A/c		1,000	By Stock A/c		4,000
To Provision for bad debts A/c		1,000	By Loss on revaluation transferred to
To Outstanding repairs		11,000	Charles capital A/c (3/9)	3,000
			Muthu’s capital A/c (4/9)	4,000
			Sekar’s capital A/c (2/9)	2,000	9,000
		13,000			13,000

Dr. Capital Account Cr.

Particulars	Charles Rs.	Muthu Rs.	Sekar Rs.	Particulars	Charles Rs.	Muthu Rs.	Sekar Rs.
To Profit and loss A/c	6,000	8,000	4,000	By Balance b/d	30,000	40,000	20,000
To Revaluation A/c (loss	3,000	4,000	2,000	By Workmen’s compensation fund	9,000	12,000	6,000
To Bank	30,000	-	-
		40,000	20,000
	39,000	52,000	26,000		39,000	52,000	26,000
				By Balance b/d	-	40,000	20,000

Balance Sheet as on 1st January 2019

Liabilities	Rs.	Rs.	Asset	Rs.	Rs.
Capital accounts:			Furniture	20,000
Muthu	40,000		Less: Depreciation	1,000	19,000
Sekar	20,000	60,000	Stock	40,000
Sundry creditors		33,000	Add: Appreciation	4,000	44,000
Outstanding repairs		11,000	Debtors	30,000
			Less: Provision for bad debts	1,000	29,000
			Cash at bank	42,000
			Less: Amount paid to Charles	30,000
		1,04,000			1,04,000

Analysis of transactions, passing journal entries, identification of voucher type and group:

S.NO.	Particulars		Debit Rs.	Credit Rs.	Voucher type	Group
(1)	Cash A/c	Dr.	1,00,000		Receipt	Cash -in -Hand
	To Robert’s Capital A/c			1,00,000	Voucher	Capital Account
(2)	State Bank of India A/c	Dr.	30,000		Contra	Bank Accounts
	To Cash A/c			30,000	Voucher	Cash-in-Hand
(3)	Furniture A/c	Dr.	10,000		Payment	Fixed Assets
	To Cash A/c			10,000	Voucher	Cash-in-Hand
(4)	Purchases A/c	Dr.	20,000		Purchase	Purchase Accounts
	To Mohaideen A/c			20,000	Voucher	Sundry Creditors
(5)	Cash A/c	Dr.	8,000		Sales	Cash-in-Hand
	To Sales A/c			8,000	Voucher	Sales Accounts
(6)	Purchases A/c	Dr.	5,000		Purchase	Purchase Accounts
	To Cash A/c			5,000	Voucher	Cash-in-Hand
(7)	Rony A/c	Dr.	60,000		Sales	Sundry Debtors
	To Sales A/c			60,000	Voucher	Sales Accounts
(8)	Cash A/c	Dr.	9,000		Contra	Cash-in-Hand
	To Bank A/c			9,000	Voucher	Bank Accounts
(9)	Mohaideen A/c	Dr.	10,000		Payment	Sundry Creditors
	To Bank A/c			10,000	Voucher	Bank Accounts
(10)	Cash A/c	Dr.	5,000		Receipt	Cash -in -Hand
	To Arun A/c			5,000	Voucher	Sundry Debtors
(11)	Salaries A/c	Dr.	6,000		Payment	Indirect Expenses
	To Bank A/c			6,000	Voucher	Bank Accounts
(12)	Wages A/c	Dr.	3,000		Payment	Direct Expenses
	To Cash A/c			3,000	Voucher	Cash-in-Hand
(13)	Stationery A/c	Dr.	4,000		Journal	Indirect Expenses
	To Pandian Ltd. A/c			4,000	Voucher	Sundry Creditors

Following steps are to be followed to enter the transaction in Tally ERP 9
1. To create company
Company Info > Create Company
Type the Name as Robert 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
Gateway of Tally > Masters > Accounts Info > Ledgers > Single Ledger > Create

(i) To Create Devi's Capital A/c
Name: Devi's Capital A/c
Under Capital Account
Accept: Yes

(ii) To Create Indian Bank A/c
Name: Indian Bank A/c
Under: Bank Accounts
Accept: Yes

(iii) To Create Furniture A/c
Name: Furniture A/c
Under: Fixed Assets
Accept: Yes

(iv) To Create Purchases A/c
Name: Purchases A/c
Under: Purchase
Accept: Yes

(v) To Create Mohaideen A/c
Name: Mohaideen A/c
Under: Sundry Creditors
Accept: Yes

(vi) To Create Sales A/c
Name: Sales A/c
Under: Sales Account
Accept: Yes

(vii) To create Rony A/c
Name: Rony A/c
Under: Sundry Debtors
Accept: Yes

(viii) To create Salaries A/c
Name: Salaries A/c
Under: Indirect Expenses
Accept: Yes

(ix) To create Wages A/c
Name: Wages A/c
Under: Direct Expenses
Accept: Yes

(x) To create Stationery A/c
Name: Stationery A/c
Under: Indirect Expenses
Accept: Yes

(xi) To create Pandian Ltd. A/c
Name: Pandian Ltd. A/c
Under:Sundry Creditors
Accept: Yes

4. To enter transactions through vouchers
Gateway of Tally > Transactions > Accounting Vouchers
(i) Robert commenced a transport business with a capital of Rs. 1,00,000
F6: Receipt Voucher: Accounts: Cash
Particulars: Robert Capital A/c (Choose from List of Ledgers Accounts)
Enter the amount of Capital Rs. 1,00,000
Narration: Capital Introduced
Accept: Yes

(ii) An account was opened with State Bank of India and deposited Rs. 30,000
F4: Contra Voucher
Accounts: State Bank of India
Particulars: Cash
Amount: Rs. 30,000
Narration: Opened bank account in SBI
Accept: Yes

(iii) Purchased Furniture by paying cash Rs. 10,000
F5: Payment Vouchers
Account: Cash
Particulars: Furniture A/c
Amount: Rs. 15,000
Narration: Furniture bought by Cash
Accept: Yes

4 Goods purchased on credit from Mohaideen for Rs. 20,000
F9: Purchase voucher
Party A/c name: Mohaideen A/c
Particulars: Purchases A/c
Amount: Rs. 20,000
Narration: Goods purchased on
credit from Mohaideen
Accept Yes

(5) Cash sales made for Rs. 8,000
F8: Sales Voucher,
Account: Cash
Particulars: Sales A/c
Amount: Rs. 8,000
Narration: Cash Sales Mode
Accept: Yes

(6) Goods purchased from Rathinam for Rs. 5,000 and money deposited in CDM
F9: Purchase Voucher
Account: Bank
Particulars: Purchase A/c
Amount: Rs. 5,000
Narration: Goods Purchased

(vii) Goods sold to Rony on credit for Rs. 60,000
F8: Sales Voucher
Party: A/c Name: Rony A/c
Particulars: Sales A/c
Amount: Rs. 70,000
Narration: Goods sold on credit to Rony
Accept: Yes

(viii) Money withdrawn from bank for office use Rs. 9,000
F4: Contra Voucher
Account: Cash
Particulars: State Bank of India A/c
Amount: Rs. 9,000
Narration: Cash withdrawn from bank
Accept: Yes

(ix) Part payment of Rs 10,000 to Mohaideen by cheque
F5: Payment Vouchers
Account: State Bank of India
Particulars: Mohaideen A/c
Amount: Rs.10,000
Narration: Payment made to
Mohaideen by cheque
Accept Yes

(x) Rony made part payment of Rs. 5,000 by cash
F6: Receipt voucher
Account: Cash
Particulars: Rony A/c
Amount: Rs. 5,000
Narration: Cash received from Rony
Accept Yes.

(xi) Salaries Paid to Staff through ECS Rs. 6,000
F5: Payment Vouchers
Account: Indian Bank
Particulars: Salaries A/c
Amount: Rs 6,000
Narration: Salaries paid through ECS,
Accept: Yes

(xii) Wages of Rs. 3,000 paid by cash
F5: Payment voucher
Account: Cash
Particulars: Wages A/c
Amount: Rs. 3,000
Narration: Wages paid by cash
Accept Yes

(xiii) Purchased stationery from Pandian Ltd. on credit Rs.4,000
F7: Journal Voucher
Particulars: Computer A/c
Account: Muthu Ltd.
Amount: Rs. 4,000
Narration: Stationery bought on credit from Pandian Ltd.
Accept: Yes

To view reports
(i) To view Trial Balance
Gateway of Tally > Reports > Display > Trial Balance > Alt + F1 (detailed)

(ii) 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)

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

(iv) To view Ratio Analysis
F10: A/c Reports > Ratio Analysis (or)
Gateway of Tally > Reports > Ratio Analysis

(v) To view Day book
F10: A/c Reports > Day Book > Alt + F1 (detailed (or)
Gateway of Tally > Reports > Display > Day Books > Alt + F1 (detailed)

Average profit = \(\frac { Total\ profit }{ Number\ of\ year } \)
=\(\frac { 62,000+61,000+63,000 }{ 3 } \)
= \(\frac { 1,86,000 }{ 3 } \)
= Rs. 62,000
Normal profit = Capital employed \(\times\) Normal rate of return
= 4,00,000 \(\times\) 10%
= Rs. 40,000
Super profit = Average profit - Normal profit
= 62,000 – 40,000
= Rs. 22,000
Goodwill = \(\frac { Super\ profit }{ Normal\ rate\ of\ return } \) \(\times\)100
= \(\frac { 22,000 }{ 10 } \) \(\times\) 100
= Rs. 2,20,000

Dr.                                         Partners’ Capital Account                                          Cr

Date	Particulars	Bragathish Rs.	Naresh Rs.	Date	Particulars	Bragathish Rs.	Naresh Rs.
	To Balance c/d	4,50,000	6,00,000		By Balance b/d	4,00,000	6,00,000
					By Bank A/c	50,000	-
					(Additional capital)
		4,50,000	6,00,000			4,50,000	6,00,000
					By Balance b/d	4,50,000	6,00,000

Dr.                                         Partners’ Current Account                                              Cr

Date	Particulars	Bragathish Rs.	Naresh Rs.	Date	Particulars	Bragathish Rs.	Naresh Rs.
	To Balance b/d	-	15,000		By Balance b/d	20,000	-
					By Profit and loss
	To Drawings A/c	45,000	60,000
					appropriation A/c	80,000	1,20,000
	To Interest on				(share of profi
		2,000	3,000
	To Balance c/d	90,000	1,10,000		By Interest on capita A/c	20,000	30,000
					By Commission A/c	17,000	-
					By Salary A/c	-	38,000
		1,37,000	1,88,000			1,37,000	1,88,000
					By Balance b	90,000	1,10,000

In the books of Chennai Sports Club

In the books of Chennai Sports Club
Dr. Receipts and Payments Account for the year ended
31^st March, 2018 Cr.

Receipts	Rs.	Rs.	Payments	Rs.	Rs.
To Balance b/d:			By Interest paid		5,000
Cash	10,000		By Telephone expenses		7,000
Bank	15,000	25,000	By Upkeep of grounds		22,500
To Life membership fees		5,500	By Bats and balls purchased		13,000
To Tournament fund receipts		15,000	By Tournament expenses		12,500
To Subscriptions received			By Balance c/d
2016 – 2017	4,500		Cash	5,000
2017 – 2018	65,000		Bank (Bal. fig)	55,000	60,000
2018 – 2019	5,000	74,500
		1,20,000			1,20,000

Dr. Total debtors account Cr.

Particulars	Rs	Particulars	Rs.
To Balance b/d	2,50,000	By Cash A/c (received)	5,35,000
To Sales A/c (credit) (balancing figure)	6,60,000	By Discount allowed A/c	25,000
		By Balance c/d	3,50,000
	9,10,000		9,10,000

Dr. Total creditors account Cr.

Particulars	Rs	Particulars	Rs
To Cash A/c (paid)	4,50,000	By Balance b/d	1,50,000
To Discount received A/c	20,000	By Purchases A/c (credit)	4,95,000
To Balance c/d	1,75,000	(balancing figure)
	6,45,000		6,45,000

In the books of Abdul

Dr. Trading and Profit and loss account for the year ended 31st March, 2018 Cr.

Particulars	Rs	Particulars	Rs.
To Opening stock	1,00,000	By Sales	6,60,000
To Purchases	4,95,000	By Closing stock	50,000
To Gross profit c/d	1,15,000
	7,10,000		7,10,000
To Discount allowed	25,000	By Gross profit b/d	1,15,000
To Sundry expenses	30,000	By Discount received	20,000
To Net profit (transferred to capital account)	80,000
	1,35,000		1,35,000

Balance Sheet as on 31st March, 2018

Liabilities	Rs.	Rs.	Assets	Rs.
Sundry creditors		1,75,000	Cash	40,000
Capital	2,35,000		Furniture	10,000
Add: Net profit	80,000		Stock	50,000
	3,15,000		Debtors	3,50,000
Less: Drawings	40,000	2,75,000
		4,50,000		4,50,000

Trend analysis for Mullai Ltd

Particulars	Rs.in lakhs			Trend percentages
	2015-16	2015-16	2017-18	2015-16	2016-17	2017-18
Revenue from operations	100	120	160	100	120	160
Add: Other income	20	24	20	100	120	100
Total revenue	120	144	180	100	120	150
Less: Expenses	20	14	40	100	170	200
Profit before tax	100	130	140	100	130	140
Less: Income tax (30%)	30	39	42	100	130	140
Profit after tax	70	91	98	100	130	140

Operating cost ratio = \(\cfrac { Operating\ cost }{ Revenue\ from\ operations } \times 100=\cfrac { 4,80,000 }{ 8,00,000 } \times 100=60\)%
Cost of revenue from operations = Purchases of stock-in-trade + Change in inventories of stock in trade + Direct expenses (wages)
= 4,50,000 + (40,000) + 10,000 = Rs.4,20,000
Operating expenses = Administrative expenses + Selling and distribution expenses+ Employee benefits expenses (salaries)
= 20,000 + 28,000 + 12,000 = Rs.60,000
Operating cost = Cost of revenue from operations + Operating expenses
= 4,20,000 + 60,000 = Rs.4,80,000
Tutorial Note
Loss on sale of fixed assets is a non-operating item, hence it is ignored.
(iii) Operating profit ratio
Operating profit ratio gives the proportion of operating profit to revenue from operations.
Operating profit ratio is an indicator of operational efficiency of an organisation. It may be computed as follows
Operating profit ratio = \(\cfrac { Operating\ profit }{ Revenue\ from\ operations } \times 100\)
Alternatively, it is calculated as under.
Operating profit ratio = 100 – Operating cost ratio
Operating profit = Revenue from operations – Operating cost
A higher ratio indicates better profitability. Greater the operating ratio, higher is the margin available for paying non-operating expenses
Tutorial note
Operating cost ratio + Operating profit ratio = 100%