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Question
C and D are the partner in a firm sharing profits in the ratio of 4:1. On 31.3.2016 their Balance Sheet was as follows :
| Balance Sheet of C and D As on 31.3.2016 |
|||
| Liabilities | Rs | Assets | Rs |
|
Sundry Creditors Provision for Bad debts Outstanding Salary General Reserve
Capitals C 1,20,000 D 80,000 |
40,000 4,000 6,000 10,000
2,00,000 |
Cash Debtors Stock Furniture Plant and Machinery
|
24,000 36,000 40,000 80,000 80,000
|
| 2,60,000 | 2,60,000 | ||
On the above date, E was admitted for 1/4 th share in the profits on the following terms:
1) E will bring 1, 00,000 as his capital and 20,000 for his share of goodwill premium half of which will be withdrawn by C and D.
2) Debtors 2,000 will be written off as bad debts and a provision of 4% will be created on debtors for bad debts and doubtful debts
3) The stock will be reduced by Rs 2,000, furniture will be depreciated by Rs 4,000 and 10% depreciation will be charged on plant and machinery
4) Investments of 7,000 not shown in the Balance Sheet will be taken into account.
5) There was an outstanding repairs bill of Rs 2,300 which will be recorded in the books.
Pass necessary journal entries for the above transactions in the books of the firm on E’s admission.
Solution
| Date | Particulars | L.F. | Debit Amount (Rs) | Credit Amount (Rs) |
|
Cash A/c Dr To E’s Capital To Premium for Goodwill A/c (Being capital and goodwill brought in by E) |
120000 |
100000 20000 |
||
|
Premium for Goodwill A/c Dr To C’s Capital A/c To D’s Capital A/c (Being goodwill shared in their sacrificing ratio) |
20000 |
16000 4000 |
||
|
C’s Capital A/c Dr D’s Capital A/c Dr To Cash A/c (Goodwill Withdrawn) |
8000 2000 |
10000 | ||
|
General Reserve A/c Dr To C’s Capital A/c To D’s Capital A/c (Being general reserve shared among the partners in their old ratio) |
10000 |
8000 2000 |
||
|
Revaluation A/c Dr To Outstanding Repair Bill A/c To Stock A/c To Furniture A/c To Plant & Machinery A/c (Decrease in assets and increase in liabilities debited to Revaluation A/c) |
16300 |
2300 2000 4000 8000 |
||
|
Investments A/c Dr. Provision for Doubtful Debts A/c Dr To Revaluation A/c (Increase in assets and decrease in liabilities credited to Revaluation A/c) |
7000 640 |
7640 | ||
|
C’s Capital A/c Dr. D’s Capital A/c Dr. To Revaluation A/c (Loss on revaluation debited to old partners in old ratio) |
6928 1732 |
8660 |
Working Notes:
WN 1: Calculation of Excess/ Deficit Provision for Doubtful Debts
Provision required `=36,000-2,000 "(w/off)" × 4/100= 1,360`
Existing Provision (after w/off bad debts)= 2,000
Excess Provision= 640 (i.e., 2,000 - 1,360)
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| Particular | Note No. |
31-3-2017 Rs |
31-3-2016 Rs |
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I. Equity and Liabilities 1. Shareholders' Funds 2. Non-current Liabilities 3. Current Liabilities Total II. Assets 1. Non- Current Assets 2. Current Assets Total
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| Balance Sheet of Sameer, Yasmin and Saloni As on 31.3.2016 |
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| Liabilities | Rs | Assets | Rs |
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Creditors General Reserve Capitals: Sameer 3,00,000 Yasmin 2,50,000 Saloni 1,50,000
|
1,10,000 60,000
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Cash Debtors 90,000 Less: Provision 10,000 Stock Machinery Building Patents Profit and Loss Account |
80,000
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| 8,70,000 | 8,70,000 | ||
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| Balance Sheet of SRS Ltd as at 31-3-2016 | |||
| Particulars | Note No. |
31-03-2016 Rs |
31-03-2015 Rs |
|
I. Equity and Liabilities 1. Shareholder’s Funds (a) Share Capital (b) Reserve and Surplus 2. Non - Current Liabilities (a) Long-term borrowings 3. Current Liabilities (a) Short-term borrowings (b) Short-term provisions |
1
2
3 4 |
4,50,000 1,25,000
2,25,000
75,000 1,00,000 |
3,50,000 50,000
1,75,000
37,500 62,500 |
| Total | 9,75,000 | 6,75,000 | |
|
II. Assets 1. Non – Current Assets (a) Fixed Assets Tangible assets Intangible (b) Non – Current Investments 2. Current Assets (a) Current Investments (b) Inventories (c) Cash and Cash
|
5 6
7
|
7,32,500 50,000 75,000
20,000 61,000 36,500 |
4,52,500 75,000 50,000
35,000 36,000 26,500 |
| Total | 9,75,000 | 6,75,000 | |
| Note No | Particulars |
31-3-2016 Rs |
31-3-2015 Rs |
|
1
|
Reserve and Surplus (Surplus i.e. Balance in Statement of Profit and Loss) |
1,25,000
|
50,000
|
| 1,25,000 | 50,000 | ||
|
2
|
Long term borrowings : 12 % Debentures |
2,25,000 |
1,75,000 |
| 2,25,000 | 1,75,000 | ||
|
3
|
Short-term borrowings : Bank Overdraft |
75,000 |
37,500 |
| 75,000 | 37,500 | ||
|
4
|
Short-term provisions Provisions for tax |
1,00,000 |
62,500 |
| 1,00,000 | 62,500 | ||
|
5
|
Tangible Assets Machinery Accumulated Depreciation |
8,37,500 (1,05,000) |
5,22,500 (70,000) |
| 7,32,500 | 4,52,500 | ||
|
6
|
Intangible Assets Goodwill |
50,000 |
75,000 |
| 50,000 | 75,000 | ||
|
7
|
Inventories Stock in trade |
61,000 |
36,000 |
| 61,000 | 36,000 |
Additional Information:
1) Rs 50,000, 12% debentures were issued on 31.3.2016
2) During the year a piece of machinery costing Rs40,000 on which accumulated depreciation was Rs 20,000 was sold at a loss of Rs 5,000.
Under which heads the following items will be placed in the Balance Sheet of a company as per Schedule VI part I of the Companies Act, 1956?
(1) Cash in hand
(2) Mining Rights
(3) Short-term deposits
(4) Debenture Redemption Reserve
(5) Income received in advance
(6) The balance of the Statement of Profit and Loss
(7) Office Equipment and
(8) Work-in-progress.
Following is the Balance Sheets of Solar Power Ltd as at 31.3.2014 :
| Solar Power Ltd. Balance Sheet |
|||
| Particulars | Note No. |
31-3-2014 Rs |
31-3-2014 Rs |
|
I. Equity and Liabilities 1. Shareholder’s Funds a. Share Capital b. Reserve and Surplus 2. Non - Current Liabilities a. Long-term borrowings 3. Current Liabilities a. Trade Payables b. Short Term Provisions |
24,00,000 6,00,000
4,80,000
3,58,000 1,00,000 |
22,00,000 4,00,000
3,40,000
4,08,000 1,54,000 |
|
| Total | 39,38,000 | 35,02,000 | |
|
II. Assets 1. Non – Current Assets a) Fixed Assets (i) Tangible assets (ii) Intangible b) Non – Current Investments 2. Current Assets a) Current Investment b) Inventories c) Trade Receivables d)Cash and Cash |
21,40,000 80,000
4,80,000 2,58,000 3,40,000 6,40,000 |
17,00,000 2,24,000
3,00,000 2,42,000 2,86,000 7,50,000 |
|
| Total | 39,38,000 | 35,02,000 | |
Notes to Accounts
| Note No |
Particulars | As On 31-3-2014 |
As On 31-3-2013 |
|
1
|
Reserve and Surplus (Surplus i.e. Balance in Statement of Profit and Loss) |
6,00,000
|
4,00,000
|
|
2
|
Tangible Assets Machinery Less: Accumulated Depreciation |
25,40,000 (4,00,000) |
20,00,000 (3,00,000) |
|
3
|
Intangible Assets Goodwill |
80,000 |
2,24,0000 |
Additional Information:-
During the year a piece of machinery, costing Rs 48,000 on which accumulated depreciation was Rs 32,000, was sold at Rs 12,000.
Prepare Cash Flow Statement.
Prepare a Comparative Income Statement from the following information:
|
Particulars |
31.3.2009 Rs |
31.3.2010 Rs |
|
Sales |
40,000 |
50,000 |
|
Cost of goods sold |
30,000 |
35,000 |
|
Wages paid |
16,000 |
14,000 |
|
Operating Expenses |
2,500 |
3,000 |
|
Other Incomes |
2,000 |
3,000 |
|
Income tax |
4,750 |
7,500 |
From the followings Balances Sheet of Vikas Ltd. as on 31.3.2009 and 31.3.2010, prepare a Cash Flow Statement:
|
Liabilities |
31-3-2009 Rs |
31-3-2010 Rs |
Assets |
31-3-2009 Rs |
31-3-2010 Rs |
|
Share Capital |
30,000 |
1,30,000 |
Fixed Assets |
93,400 |
1,66,000 |
|
General Reserve |
30,000 |
55,000 |
Stock |
22,000 |
26,000 |
|
Profit and Loss Account |
20,000 |
30,000 |
Debtors |
36,000 |
39,000 |
|
Trade Creditors |
17,400 |
22,000 |
Cash |
4,000 |
5,000 |
|
|
|
|
Preliminary Expenses |
2,000 |
1,000 |
|
|
1,57,400 |
2,37,000 |
|
1,57,400 |
2,37,400 |
|
|
|
|
|
|
|
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Mention the heading and sub-heading under which Vehicles are shown in the Balance Sheet of a company prepared as per Schedule III of the Companies Act, 2013.
