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Question
Is 'Reserve Capital' a part of 'Unsubscribed Capital' or 'Uncalled Capital'?
Solution
Unsubscribe capital stands for share issued but not subscribed by people.
Uncalled capital means amount of share not called from the public.
Reserve capital means the part of share which will never be called until winding up of company.
Hence reserve capital is part of uncalled capital.
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RELATED QUESTIONS
Ali, Bimal and Deepak are partners in a firm. On 1st April 2011 their capital accounts stood at Rs 4,00,000, Rs 3,00,000 and Rs 2,00,000 respectively. They shared profits and losses in the proportion of 5 : 3: 2. Partners are entitled to interest on capital @10% per annum and salary to Bimal and Deepak @ Rs 2,000 per month and Rs 3,000 per quarter respectively as per the provisions of the partnership deed. Bimal's share of profit (excluding interest on capital but including salary) is guaranteed at a minimum of Rs 50,000 p.a. Any deficiency arising on that account shall be met by Deepak. The profits of the firm for the year ended 31st March 2012 amounted to Rs 2,00,000. Prepare Profit & Loss Account for the year ended on 31st March 2012.
What is the basis for preparing an Income and Expenditure Account in the case of Not-for-Profit Organisation.
M, N and O were partners in a firm sharing profit and losses equally. Their Balance Sheet on 31-12-2009 was as follows:
|
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
|
Capitals: |
|
Plant and Machinery |
60,000 |
|
|
M |
70,000 |
|
Stock |
30,000 |
|
N |
70,000 |
|
Sundry Debtors |
95,000 |
|
O |
70,000 |
2,10,000 |
Cash at Bank |
40,000 |
|
General Reserve |
30,000 |
Cash in Hand |
35,000 |
|
|
Creditors |
20,000 |
|
|
|
|
|
2,60,000 |
|
2,60,000 |
|
|
|
|
|
||
N died on 14th March, 2010. According to the Partnership Deed, executors of the deceased partner are entitled to:
(i) Balance of partners’ capital account.
(ii) Interest on capital @ 5% p.a.
(iii) Share of goodwill calculated on the basis of twice the average of past three year’s profits and
(iv) Share of profits from the closure of the last accounting year till the date of death on the basis of twice the average of three completed year’s profit before death.
Profits for 2007, 2008 and 2009 were Rs 80,000, Rs 90,000, Rs 1,00,000 respectively. Show the working for deceased partners’ share of goodwill and profits till the date of his death. Pass the necessary journal entries and prepare N’s Capital Account to be rendered to his executors.
