ISC (Commerce) इयत्ता १२ - CISCE Question Bank Solutions for Accounts

A limited company made an issue, which was fully subscribed, of 2,000, 5% Debentures of ₹ 100 each at ₹ 96, to be redeemed at par after five years. The debentures were allotted on 31st May 2023, subscriptions being payable:

15% on application
30% on allotment
30% on 30th June, 2023
Balance on 30th September 2023

One debenture holder holding 100 debentures paid the allotment with the first call along with interest on calls-in-arrears @ 10% per annum.

You are required to:

1. Give the amounts in rupees payable with:
   1. Allotment
   2. Second and Final Call
2. Prepare the Interest-on-Calls in Arrears A/c.

From the following extracts of a company’s Balance Sheets and the additional information, you are required to calculate Cash from Financing Activities for the year ending 31^st March, 2021.

Additional information:

1. During the year 2020-21:
   1. Dividend proposed on Equity Shares in 2019-20 of ₹ 65,000 was declared and paid.
   2. Debentures were issued on 1st July, 2020, at a discount of 10%.
   3. Interest on cash credit of ₹ 500 was paid.
   4. Underwriting commission of ₹ 25,000 was paid to the underwriters.
   5. The Equity shares were issued at a premium.
2. The 10% Preference Shares were redeemed on 31st March, 2021.

Select the correct statement from the following options.

Give the formula used for calculating goodwill of a partnership firm by the Weighted Average Profit Method.

Pooja and Meher are partners in a firm. They admit Rati into the firm on the following terms:

1. Unrecorded Debtors of ₹ 1,000 to be brought into the books.
2. Provision for doubtful debts to be created @ 5% on Debtors.

The recorded debtors in the Balance Sheet of Pooja and Meher on the date of Rati's admission were ₹ 25,000.

What will be the net debtors to be shown in the Balance Sheet of the reconstituted firm?

On 1^st April 2021, Bhim Ltd. issued 2,000, 5% Debentures of ₹100 each as follows:

The interest on these debentures was to be paid annually on 31^st March every year by the company.

You are required to calculate interest on these debentures payable by the company on 31^st March, 2022.

Benu and Leena are partners in a firm sharing profits and losses in the ratio of 5 : 3. They admit Deepa and Erica as two new partners.
The new profit-sharing ratio is decided to be 3 : 2 : 2 : 3.
Both the new partners introduce ₹ 1,00,000 each as capital.
Deepa pays ₹ 40,000 in cash for her share of goodwill but Erica is unable to contribute any amount for her share of goodwill.
At the time of Deepa's and Erica's admission, the firm had an Advertisement Suspense Account of ₹ 56,000 which is written off.

You are required to pass necessary journal entries to record the above adjustments at the time of admission of Deepa and Erica.

Ruma and Neha started business on 1^st April, 2021, with fixed capitals of ₹ 4,00,000 and ₹ 3,50,000 respectively. On 1^st October, 2021, they decided that their total capital (fixed) should be ₹ 8,00,000, in their profit-sharing ratio of 3 : 2.

Accordingly, they introduced extra capital or withdrew excess capital.

Their partnership deed provided for the following:

1. Interest on capital to be allowed @ 10% per annum.
2. A monthly salary of ₹ 1,000 each to be allowed to both Ruma and Neha.
3. Interest on drawings to be charged @ 18% per annum.

Ruma had withdrawn ₹ 12,000, during the year. As per the deed, the interest on her drawings amounting to ₹ 1,080 to be charged from her.

During the year ending 31^st March, 2022, the firm earned a net profit of ₹ 2,04,000 before charging manager's commission of ₹ 20,400 and interest on bank loan of ₹ 4,000.

You are required to:

1. Give the journal entry to close Ruma's Drawings Account.
2. Prepare Profit and Loss Appropriation Account for the year ending 31^st March, 2022.

NH Ltd, with an authorized capital of ₹ 10,00,000 divided into 1,00,000 Equity shares of ₹10 each, issued 50,000 shares to the public at a premium of ₹ 2 per share, payable as follows:

₹ 5 on Application (including premium)

₹ 3 on Allotment

₹ 4 on First and Final Call.

The subscription was at par and the share money was received in full with the exception of the allotment money on 4,000 shares held by shareholder Ravi and the call money on 6,000 shares (including Ravi's shares).

The above 6,000 shares were forfeited by the company and 5,000 of these (including the shares which had been allotted to Ravi) were reissued at ₹ 8 per share as fully paid-up.

You are required to pass journal entries to record the above transactions in the books of the company.

MV Ltd. was registered with a capital of ₹ 2,00,000 divided into 10,000 Equity shares of ₹ 20 each payable as follows:

The company offered 5,000 shares to the public for subscription. It received applications for 6,700 shares.

From amongst the applicants:

1. Vimal, who had applied for 1,500 shares, paid ₹ 7,500 on application, but was allotted only 800 shares.
2. Abhay, who had applied for 2,000 shares, paid the full amount of ₹ 40,000 with his application, but was allotted only 1,000 shares.
3. Nitin, who had applied for and allotted 500 shares, did not pay the allotment and call money when due.
4. The remaining applicants paid as and when due.

The surplus money paid by both Vimal and Abhay was used towards allotment and call and any surplus beyond the call was refunded.

The company forfeited Nitin's shares after the final call.

You are required to pass journal entries to record the above transactions in the books of the company.

While preparing its Cash Flow Statement, will a company consider an increase in its Bank Overdraft as an Operating Activity or as a Financing Activity?

Tulip Ltd. allotted 45,000 Equity shares of ₹ 10 each to the public. The first and final call of ₹ 2 per share was not received on 1,000 shares, which were forfeited by the company. Later, 600 of the forfeited shares were reissued at ₹ 7 fully paid-up. What is the Subscribed Capital of the company?

The Balance Sheet of Anjum Ltd. as at 31st March 2022, had outstanding 1,000, 8% Debentures of ₹ 100 each. These debentures were to be redeemed by the company on 31st March 2023. Give the journal entry for the amount due to the Debenture holders on 31st March 2023, including the interest on debentures due to them.

The following balances have been extracted from the books of Meadow Ltd. as at 31^st March, 2023.

Additional Information:

• The company had issued 1,25,000 Equity shares of ₹ 10 each which were all applied for and allotted to the public. These shares were fully called up by the company.
• There were calls-in arrears @ ₹ 2 per share on 15,000 shares out of which 5,000 shares were forfeited by the company.

You are required to:

1. Show the Share Capital in the Notes to Accounts.
2. Give the amount for each of the following:
   1. Short-term borrowings
   2. Current Assets
   3. Property, Plant and Equipment and Intangible Assets
      1. Property, Plant and Equipment

Roxy Ltd. issued Equity shares of 10 each payable as:

₹ 4 on Application and Allotment; ₹ 2 on First Call; ₹ 4 on Second and Final Call.
Following is an extract of the Journal of Roxy Ltd.

You are required to complete the journal entries by filling up the missing information represented by '??', including the number of shares and narration, if any.

Savi Ltd. forfeited 50 shares of ₹ 100 each issued at a premium of 10%, on which allotment money of ₹ 30 per share (including premium) and first and final call of ₹ 40 per share were not received.

What is the minimum amount per share at which the company can reissue these shares?

While preparing its Cash Flow Statement, which of the following will be classified by a company as its Cash Outflow from Investing Activities?

P: Investment in Government Securities.

Q: Investment in bank deposits (having maturity of six months).

R: Proceeds from redemption of liquid mutual fund units.

S: Proceeds from bank deposits with original maturity of less than three months.

Assertion: A company can reissue a forfeited share at an amount which is less than the amount not received on it.

Reason: A company can write off the net loss made on the reissue of a forfeited share from its capital reserve.

Which one of the following is correct?

Kriti and Atif are partners sharing profits and losses equally. On 31st March, 2024, they admitted David as a third partner for `1/5` share in the profits.

It is decided that on David’s admission:

• Atif would retain his original share
• Goodwill would be valued by the super profit method on the basis of the following information:

1. Balance Sheet of Kriti and Atif (an extract)
   As at 31st March, 2024
   Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)
   General Reserve		25,000	Current A/c:
   Capital A/c:		4,25,000	Atif	10,000
   Kriti	2,50,000
   Atif	1,75,000
   Current A/c:
   Kriti		40,000

2. The normal rate of return is 12% per annum.
3. Average profits of the firm for last four years are ₹ 74,000.

You are required to calculate:

1. The sacrificing ratio of the partners.
2. The value of goodwill of the firm at four years’ purchase of the super profit.

Deb, Riza and Ved entered into a partnership on 1st July, 2023, without any agreement as to profit sharing, except that Deb guaranteed that Ved’s share of profit, after considering interest into account, would not be less than ₹ 8,500 per annum. The initial capital provided by the partners was as follows:

In addition to the above capital, Deb and Riza gave temporary loans to the partnership firm as follows:

• Deb advanced ₹ 18,000 on 1st October, 2023, and was repaid on 1st April following.
• Riza advanced ₹ 40,000 on 1st September, 2023, and was repaid along with interest, on 1st December, 2023.

The profit of the firm for the year ended 31st March, 2024, before providing for any interest was ₹ 21,000.

You are required to prepare for the year 2023-24:

1. Profit and Loss Appropriation Account.
2. Riza’s Loan Account.
3. Ved’s Capital Account.