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Alexa Ltd. purchased building from Siri Ltd for ₹ 8,00,000. The consideration was paid by issue of 6% debentures of ₹ 100 each at a discount of 20%. The 6% Debentures account is credited with ______.
Concept: Terms of Issue of Debentures> Issue of Debentures at Par
Which of the following statements is incorrect about debentures?
Concept: Interest on Debentures
Pioneer Fitness Ltd. took over the running business of Healthy World Ltd. having assets of ₹ 10,00,000 and liabilities of ₹ 1,70,000 by:
- Issuing 8,000 8% Debentures of ₹ 100 each at 5% premium redeemable after 6 years @ ₹ 110; and
- Cheque for ₹ 50,000.
Pass the Journal entries in the books of Pioneer Fitness Ltd.
Concept: Issue of Debentures with Terms of Redemption
On July 01, 2022, Panther Ltd. issued 20,000, 9% Debentures of ₹ 100 each at 8% premium and redeemable at a premium of 15% in four equal instalments starting from the end of the third year. The balance in Securities Premium on the date of issue of debentures was ₹ 80,000. Interest on debentures was to be paid on March 31 every year.
Pass Journal entries for the financial year 2022-23. Also prepare Loss on Issue of Debentures account.
Concept: Terms of Issue of Debentures> Issue of Debentures at Par
List any four items that are shown under the sub-heading 'Cash and Cash Equivalents' as per Schedule III of the Companies Act, 2013.
Concept: Statement of Profit and Loss
What is meant by solvency of business?
Concept: Solvency Ratios >> Debt to Equity Ratio
What is meant by 'Activity Ratios'?
Concept: Activity Ratios >> Inventory Turnover Ratio
Under which major sub-headings the following items will be placed in the Balance Sheet of a company as per revised Schedule-VI, Part-I of the Companies Act, 1956:
- Accrued Incomes
- Loose Tools
- Provision for employees benefits
- Unpaid dividend
- Short-term loans
- Long-term loans.
Concept: Statement of Profit and Loss
List any four items other than 'stock-in-trade' that are presented under the sub-head 'inventories' as per schedule Ill of the Companies Act, 2013.
Concept: Statement of Profit and Loss
'Panipat Blankets Limited' are the manufacturers and exporters of blankets. The company decided to distribute 1,000 blankets free of cost to five villages of Kashmir which had been damaged by the floods. It also decided to employ 100 young persons from these villages in their newly established factory at Ludhiana in Punjab To meet the requirements of funds for its new factory, the company issued 1,00,000 equity shares of Rs 10 each and 2,000, 9% debentures of Rs 100 each to the vendors of machinery purchased for Rs 12,00,000.
Pass necessary journal entries for the above transactions in the books of the company. Also, identify anyone value which the company wants to communicate to the society.
Concept: Concept of Financial Statements
Compute Working Capital Turnover Ratio using the following information.
| Particulars | Rs |
| Cash Sales | 1,30,00 |
| Credit Sales | 3,80,000 |
| Sales Returns | 10,000 |
| Liquid Assets | 1,40,000 |
| Current Liabilities | 1,05,000 |
| Inventory | 90,000 |
Concept: Activity Ratios >> Working Capital Turnover Ratio
Calculate Debt-Equity Ratio
| Particulars | Rs |
| Total Assets | 3,50,000 |
| Total Debts | 2,50,000 |
| Current Liabilities | 80,000 |
Concept: Solvency Ratios >> Debt to Equity Ratio
State any two limitations and any two objectives of 'Analysis of Financial Statement'.
Concept: Concept of Financial Statements
Financial statements are prepared following the consistent accounting concepts, principles, procedures and also the legal environment in which the business organisations operate. These statements are the source of information on the basis of which conclusions are drawn about the profitability and financial position of a company so that their users can easily understand and use them in their economic decisions.
From the above statement identify any two values that a company should observe while preparing its financial statements. Also, state under which major headings and sub-headings the following items will be presented in the Balance Sheet of a company as per Schedule III of the Companies Act, 2013:
(i) Calls-in-arrears
(ii) Calls-in-advance
(iii) Gain on reissue of forfeited equity shares
(iv) Trade payables to be settled beyond 12 months from the date of Balance Sheet
Concept: Concept of Financial Statements
Choose the appropriate alternative from the given options:
Which of the following is a limitation of financial analysis?
Concept: Concept of Financial Statements
From the following Balance Sheet of Rohit Ltd., prepare a Common Size Balance Sheet:
| Balance Sheet of Rohit Ltd. as at 31st Mach, 2021 |
|||
| Particulars | Note No. | 31st March 2021 (₹) |
31st March 2020 (₹) |
| I. Equity and Liabilities | |||
| 1. Shareholders' Funds | 3,20,000 | 1,60,000 | |
| 2. Current Liabilities | 80,000 | 40,000 | |
| Total | 4,00,000 | 2,00,000 | |
| II. Assets | |||
| 1. Non-Current Assets | 3,00,000 | 1,50,000 | |
| 2. Current Assets | 1,00,000 | 50,000 | |
| Total | 4,00,000 | 2,00,000 | |
Concept: Common-Size Statement
Which of the following is a tool of Analysis of Financial Statements?
Concept: Concept of Financial Statement Analysis
The 'Inventory Turnover Ratio' from the following information will be:
| (₹) | |
| Revenue from Operations | 12,00,000 |
| Average Inventory | 2,00,000 |
| Gross loss ratio | 20% |
Concept: Activity Ratios >> Inventory Turnover Ratio
Define Management.
Concept: Concept of Management
Answer the following question.
Mita has a successful ice cream business at Bikaner, namely "Smart flavours' ice creams are utterly delicious. She makes ice creams from fresh milk and the same are available in a wide range of flavours and packs. She sets viable business objectives and works with the same in mind in order to ensure that the customers will come back for purchasing.
Having the first-mover advantage, her business was doing well. To earn higher profits, she started cutting costs. This would sometimes lead to delay in delivery and the ice cream was not reaching the market in time. Over a period of time, the demand for her ice cream declined and because of it, the competitors entered the market. She lost some of her market share to competitors.
At the beginning of the summer season, she got back to backorder for the supply of 4,000 ice cream packs of different flavors for special occasions. To ensure that the task was completed and orders delivered in time she hired additional workers. She was, thus able to produce and deliver the ice cream packs but at a high production cost. While completing activities and finishing the given task for achieving goals, Mita realized that she was ignoring one of the important aspects of management.
Identify the aspects of management that has been ignored by Mita. Also, explain the same with the help of an example.
Concept: Concept of Management
