Commerce (English Medium) Class 12 - CBSE Question Bank Solutions for Accountancy

From the following information compute 'Proprietary Ratio'

Pass necessary Journal Entires on the dissolution of a partnership firm in the following cases:

1. L, a partner, was appointed to look after the dissolution process for which he was given a remuneration of ₹10,000.
2. Dissolution expenses ₹ 8,000 were paid by the partner, M.
3. Dissolution expenses were ₹ 5,000.
4. P, a partner, was appointed to look after the process of dissolution for which he was allowed a remuneration of ₹ 7,000. P agreed to bear the dissolution expenses. Actual dissolution expenses ₹ 4,000 were paid by P.
5. N, a partner, was appointed to look after the process of dissolution for which he was allowed a remuneration of ₹ 9,000. N agreed to bear the dissolution expenses. Actual dissolution expenses ₹ 4,000 were paid by the firm.
6. Q a partner was appointed to look after the process of dissolution for which he was allowed a remuneration of ₹ 18,000. Q agreed to take over stock worth ₹ 18,000 as his remuneration. The stock had already been transferred to Realisation Account.

Pass necessary journal entries on the dissolution of a firm in the following cases:    

(i) Satish, a partner, agreed to do the dissolution work for which he was allowed a commission of Rs 18,000. He also agreed to bear the dissolution expenses. Actual dissolution expenses paid by Satish were Rs 9,000.
(ii) Suleman, a partner, paid the dissolution expenses Rs 750.
(iii) Dissolution expenses were Rs 500.
(iv) Sandhya was appointed to look after the dissolution work on a remuneration of Rs 3,000. She agreed to bear the dissolution expenses. Actual dissolution expenses Rs 2,750 were paid by Sunil, another partner on behalf of Sandhya.
(v) Seema, a partner, agreed to do the dissolution work for a commission of Rs 4,500. She also agreed to bear the dissolution expenses. Seema took away stock of the same amount as her commission. The stock had already been transferred to realisation account.
(vi) Santosh, a partner, agreed to bear the dissolution expenses for a commission of Rs 6,000. Actual dissolution expenses Rs 4,500 were paid from the firm's bank account.

 P and G were partners in a firm sharing profits in the ratio of 7:4. On 1-1-2016 their firm was dissolved. After transferring assets (other than cash) and outsiders liabilities to realization account you are given the following information:

(a) Kumar, a creditor for Rs 3,90,000 accepted building at Rs 7,00,000 and paid the balance to the firm by cheque.
(b) Karan, a second creditor for Rs 2,83,000 accepted machinery of the books value of Rs 3,00,000 at Rs 2,80,000 in full settlement of his claim.
(c) Kishor, a third creditor for Rs 5,00,000 accepted investments of Rs 4,10,000 and a bank draft of Rs 89,000 in full settlement of his claim.
(d) Loss on dissolution was Rs 2,200.

Pass necessary journal entries for the above transactions in the books of the firm.

Karam Singh and Suleman decided to start a partnership firm to manufacture low cost paper bags from the waste paper as plastic bags were creating many environmental problem. For this, they contributed capitals of Rs 2,00,000 and Rs 1,00,000 respectively on 1st April, 2012. Suleman also expressed his willingness to admit Inderjeet as a partner without capital in the firm. Inderjeet is specially abled but a very creative and intelligent friend of his. Karam Singh agreed to this. The terms of partnership were as follows:

(i) Karam Singh, Suleman and Inderjeet will share profit in the ratio of 2 : 2 : 1.
(ii) Interest on capital will be provided @6% p.a

Due to shortage of capital, Karam Singh contributed Rs 50,000 on 30th September, 2012 and Suleman contributed Rs 20,000 on 1st January 2013 as additional capital. The profit of the firm for the year ended 31st March, 2013 was Rs 2,00,300.

(a) Identify any two values which the firm wants to communicate to the society.
(b) Prepare Profit and Loss Appropriate Account of the firm for the year ending 31st March, 2013.

Joy Ltd. company bought a Building for ​₹  9,00,000 and the consideration was paid by issuing 10% Debentures of the normal (face) value of ​₹ 100 each at a discount of 10%.

Give Journal entries.

Reliance Ltd. purchased machinery costing ​₹  1,35,000 . It was agreed that the purchase consideration be paid by issuing 9% Debentures of ​₹  100 each . Assume debentures have been issued
(i) at par and
(ii)at a discount of 10%.
Give necessary journal entries.

Star Ltd. took over the assets of ₹ 6,60,000 and liabilities of ₹ 80,000 of Moon Ltd. for ₹ 6,00,000. Give necessary Journal entries in the books of Star Ltd. assuming that:
Case (a): The purchase consideration was payable 10% in cash and the balance in 5,400; 12% Debentures of ₹ 100 each.
Case (b): The purchase consideration was payable 10% in cash and the balance in 4,500; 12% Debentures of ₹ 100 each issued at 20% premium. 

R Ltd. purchased the assets of S Ltd. for ₹5,00,000. It also agreed to take over the liabilities of S Ltd. amounted to ₹ 2,00,000 for a purchase consideration of ₹2,80,000 . The payment of S Ltd. was made by issue of 9% Debentures of ₹ 100 each at par.
Pass necessary journal entries in the books of R Ltd.

Which of the following does not result into reconstitution of a firm?

Revaluation of assets at the time of reconstitution is necessary because their present value may be different from their ______.

Which ratio indicates the proportion of assets financed out of shareholders’ funds?

Differentiate between the straight line method and the written-down value method.

PremierAuto Ltd. purchased assets of the value of ₹ 3,60,000 from Anand Ltd. and made the payment of purchase consideration by issuing 11%. Debentures of ₹ 100 each at a discount of 10%. The number of debentures issued by Premier Auto Ltd. were ______.

Kuber Ltd. purchased assets worth ₹ 10,00,000 and took over liabilities of ₹ 1,00,000 of Amrit Ltd. for a purchase consideration of ₹ 8,00,000. Kuber Ltd. paid ₹ 2,60,000 through a cheque and the balance was settled by issuing 12% debentures of ₹ 100 each at a discount of 10%. Pass necessary journal entries in the books of Kuber Ltd. for the above transactions. 

Neon Ltd. purchased assets worth ₹ 18,00,000 and took over liabilities of ₹ 2,00,000 of Zenith Ltd. for a purchase consideration of ₹ 15,00,000, Neon Ltd. paid the amount by accepting a bill of exchange of 3,00,000 and the balance was settled by issuing 10% debentures of ₹ 100 each at a premium of 20%. Pass necessary journal entries for the above transactions in the books of Neon Ltd.

Which formulae would result in TRUE if C3 is less than 14 and D4 is less than 200?

What is meant by solvency of business?

Virad, Vishad and Roma were partners sharing profits in the ratio of 5 : 3: 2 respectively. On March 31, 2013, their Balance Sheet as under.

Virad died on October 1, 2013. It was agreed between his executors and the remaining partner's that:

a. Goodwill of the firm is valued at 2 ½ years purchase of average profits for the last three years. The average profits were Rs.1,50,000.

b. Interest on capital is provided at 10% p.a.

c. Profit for the year 2013-14 is taken as having accrued at the same rate as that of the previous year which was Rs.1,50,000.

Prepare Virad's Capital Account to be presented to his Executors as on October 1, 2013.

From the Following information , compute Debt-Equity Ratio:

                                              Rs.

Long Term Borrowings          2,00,000

Long Term Provision             1,00,000

Current Liabilities                    50,000

Non-Current-Assets              3,60,000

Current -Assets                       90,000