ADVANCED ACCOUNTING

Venkat Ltd made an issue of 10,000 equity shares of Rs.100 each, payable Rs.20 on application, Rs.30 on allotment, Rs.30 on First call and Rs.20 on final Call. All the shares are subscribed and amounts duly received.
Pass journal entries to give effect to these and also show the relevant items in the Balance Sheet.

2.         Raju Ltd was floated with an authorized capital consisting of Rs. 20,000, 9% preference shares of Rs.100 each, payable Rs.25 per share on application, Rs.25 per share on allotment and Rs.50 per share on first and final call and Rs.3,00,000 equity shares of Rs.10 each, payable Rs.2 per share on application, Rs.3 per share on allotment and Rs.5 per share first and final calls. All the money received.
Make the necessary entries in Journal and the Balance sheet of the company.

3.         Rao & Company Ltd issued 5000 equity shares of Rs.100 each at a premium of Rs.40 per share, payable Rs.10 per share on application, Rs.60 per share on allotment (including premium), Rs.30 on first call and balance on final call. The shares were all subscribed and all money due was received expect the first call money on 1000 shares and final call money on 1500 shares.
Give the Journal Entries to record the above transactions.

4.         Varun Ltd. invited application for 1,00,000 shares of Rs.100 each at a discount of 6% payable as follows:
            On application Rs.25, on allotment Rs.34 and on first and final call 35.
            The applications received were for 90,000 shares and all of these were accepted. All money due was received except the first and final call on 1,000 shares.
            Pass necessary entries in journal of the company also show how these transactions would appear in Balance sheet of the company.

5.         Lavanya Ltd. Offered 1,00,000 equity shares of the nominal value 100 each for public subscription at Rs.120. The amounts payable on the shares were on application Rs.45, on allotment (including premium) Rs.45, on first and final call Rs.30. The actual subscription was only for 90,000 shares. All money payable by shareholders was received except from Kirshna Rao, who had taken 1000 shares but failed to pay the final call. His shares were forfeited and re-issued to Prashanth at Rs.60 each.
            Show journal entries in the books of the company.
           
6.         The Sudhakar Ltd. purchases assets of Rs.3,50,000 and took over the liabilities of Rs.30,000, it agreed to pay the purchase price, Rs.3,30,000 by issuing debentures of Rs.100 each at a premium of 10%.
            Give journal entries in the books of Sudhakar Ltd..
7.         On July 1, 1997 Motor Ltd., issued 10,000   6% Debentures of Rs.10 each at 95%, repayable on June 30, 2007 at par. Rs.6 per debenture was payable on application and the balance on allotment. Interest was payable on the full nominal amount as from September 1, 1997.
            Applications were received for 15,000 debentures. All allotments were made proportionately, over subscriptions being applied to the balance due on allotment, which took place on August 31, 1997. All sums due on allotment were received by September 14, 1997.
Assuming that the discount is to be written off evenly over the whole period, you are required to draft journal entries to record (a) the issue of debentures, and (b) The charges to the Profit and Loss Account for the year ended June 30, 1998.

8.         Ramu Ltd., issued 10,000 Debentures of Rs.100 each for subscription. The debenture moneys are payable as follows:
Rs.30 on application, Rs.40 on allotment, Rs.20 on first call and Rs.10 on second call. A person who holds 200 Debentures fails to pay the amount due at the time of allotment. He, however, pays this amount with the first call money. Another person who is holding 400 Debentures, has paid all the calls in advance at the time of allotment.
Give Journal entries in the books of the company.

9.         The Radha Ltd. purchases assets Rs.3,60,000 and took over the liabilities of Rs.35,000. It agreed to pay the purchase price, Rs.3,34,950 by issuing debentures of Rs.100 each at a premium of 10% and Rs.65 by cash. The debentures of the same company are quoted in the market at Rs.130.
Give journal entries in the books of Radha Ltd..

10.       The Ashoka Ltd. purchases assets Rs.3,80,000 and took over the liabilities of Rs.30,000 at an agreed value of Rs.3,33,000. The company issued debentures at 10% discount in full satisfaction of the purchase price.
Give journal entries in the books of Ashoka Ltd..
11.       Journalize the following transactions at the time of issue and redemption of debentures: in the books of Venkat Ltd.
a)     A debenture issued at Rs.95, repayable at Rs.100
b)     A debenture issued at Rs.95, repayable at Rs.105
c)     A debenture issued at Rs.100, repayable at Rs.105
d)     A debenture issued at Rs.105, repayable at Rs.100
Note: The Face value of each debenture is Rs.100

12.       Krishna Ltd. on 31st December, 1996 redeemed Rs.10,000   6% debentures out of capital by drawing a lot. Similarly, the company on 31st December, 1997 redeemed Rs.15,000   6% debentures out of profits by drawing a lot.
You are required to pass journal entries in the books of the company.

13.       X Limited was registered with an authorized capital of Rs.50,00,000 divided in to 5,00,000 shares of Rs.10/- each . It issued 4,00,000 shares payable as under:
            On application Rs.2, On allotment Rs.3, On first call Rs.3, On final call Rs.2.
            The public applied for 3,00,000 shares, these were allotted. All the money due on allotment and call was received accept the first call on 10,000 shares and final call on 15,000 shares.
            Pass general entries and prepare opening balance sheet.

14.       Reddy Limited issued 5,000 equity shares of Rs.10/- at a premium of Rs.2 per share, payable Rs.2 on application, Rs.5 on allotment (including premium), Rs.3 on first call and balance on final call. The share were all subscribed and amount received on calls except the first call on 1,000 shares and final call 1,500 shares.
            Give cash book, general entries for the above transactions and also prepare its opening balance sheet.

15.       Y Company Ltd. issued at par Rs.60,00,000 (7%) debentures in bonds of Rs.1,000 each, payable 20% on application, 20% on allotment, 30% on first call and balance one month thereafter. Except the allotment money on 400 bonds and call money on 600 bonds which were in arrears, all the money was duly received.
            Make the cash book and journal entries; and show ledger accounts.
                       
16.       On 1st April, 1993, Geeta Products Ltd. issued Debenture for Rs.1,00,000, redeemable at par at the end of the 5 years and its was resolved that a Sinking Fund should be formed and invested in tax-free securities.
            Give Journal Entries for 5 years, assuming that the interest received on the investment was at the rate of 5 percent on cost, that the interest was received yearly and immediately invested and that the investments were realized at a loss of Rs.300 at the end of five years.
            Reference to the Sinking Funds Table shows that Rs.0.180975 invested at the end of the year, at 5% compound interest will produce Rs.1 at the end of 5 years.

17.       The following is the Balance Sheet on 31st March 1992 of Mr. A.

            Liabilities

Rs.
Assets
Rs.
Creditors
A’s Capital
3,000
13,500
Cash
Debtors
Stock
Furniture
Premises
Investments
500
4,000
5,000
750
6,000
250
16,500
16,500

He decided to admit a partner and it is arranged that the partner shall join on the above Balance Sheet subject to the following modifications:

i) 5% reserve for bad debts   is to be provided on Debtors,
ii) Stock to be taken at Rs.4,500,
iii) Furniture is to be taken at Rs.500,
iv) Premises to be taken at Rs.7,000,
v) Cash and investments not to be taken over by the partnership.
Make the Journal entries and prepare the balance sheet giving effect to the modifications.

18.       The Balance sheet of MN is given as follows:
Particulars
Rs.
Particulars
Rs.
M Capital a/c
N Capital a/c
Bank Loan
Sundry Creditors
30,000
20,000
10,000
20,000
Cash 
Debtors
Furniture
Machinery
10,000
20,000
10,000
40,000

80,000

80,000
            The partners want to dissolve the firm.
            Machinery realized only 50% of the book value. There are bad debts to the extent of Rs.5,000.
Pass the Journal entries and prepare realization and capital accounts of M and N.

19.       A & B shared in proportions of 3 and 2 with capitals of Rs.20,000 and Rs.15,000 respectively. They agree to admit C into partnership as from 1st January, 1992 on the following terms for a third share in future profits:
a)     That C should bring in Rs.20,000
b)     That as C is unable to bring this share of goodwill in cash, the goodwill of the firm be valued at Rs.15,000 and a goodwill account be raised and written off in the firm’s books.
Set out the journal entries required, the capital accounts of the partners, the goodwill account and state the future profit sharing proportion of the partners.

20.       A and B are partners sharing profits in the ratio of 3 : 2. C is admitted and the new profit sharing ratio is 2 : 2 : 1. C brings in cash Rs.8,000 for capital and Rs.2,000 for goodwill. The balance sheet of A and B is as follows:
                                                 Rs.                                           Rs.    
                        Capitals: A                              8,000   Good will                      2,500
                                       B                              8,000   Assets                          17,500
                        Reserve Fund                          4,000                                       .         .                                                                       20,000                                       20,000
Give journal entries and prepare balance sheet of the new firm.

21.       A and B are equal partners in a firm. They decided to admit C as a new partner and Re-adjust the Balance Sheet values for this purpose. The Balance Sheet of A and B on 31st Dec., 1989 was as under:
                                                                   Rs.                                                             Rs.
                        Creditors                        1,000            Cash                                        600
                        Bills Payable                  1,000            Debtors                                1,500
                        Reserve Fund                    400            Stock                                    1,400
                        A’s Capital                     1,500            Furniture                                  400
                        B’s Capital                     1,000            Machinery                            1,000
                                                               4,900                                                         4,900
            The following adjustments were to be made before C’s admission:
            (a) Rs.300 were to be provided for doubtful debts, (b) furniture was valued Rs.250, c) investment worth Rs.400 (not mentioned in the Balance Sheet) were to be taken into account d) C brings Rs.1,000 for capital and Rs.1000 for goodwill which sum A and B withdrew in their proportion.
Give i) Journal Entries, ii) Revaluation Account, and iii) Balance Sheet of the new Firm.
22.       A & B are Partners in a firm sharing profits and losses as 5 : 3. The position of the firm as on 31st March, 1992 was as follows:
                                                                   Rs.                                                             Rs.
                        Capital Accounts:                                Plant and Machinery           40,000
                               A        30,000                               Stock                                  30,000
                               B        20,000        50,000            Sundry Debtors                  20,000
                        Sundry Creditors          15,000            Bills receivable                 10,000
                        Bank Overdraft             42,500            Cash at Bank                        7,500
                                                               4,900                                                         4,900
           
C now joins them on condition that he will share ¾th of the future profits, the balance of profits being shared by A and B as 5 : 3. He introduces Rs. 40,000 by way of capital and further Rs. 4,000 by way of premium for goodwill. He also provides loans to the firm to pay off bank overdraft. A and B to depreciate Plant by 10% and to raise a premium for Doubtful Debts against sundry debtors @5%.
You are asked to journalize the entries in the books of the firm and show the resultant Balance sheet.

23.       The following is the balance sheet of A and B as at 31st December, 1989.
                                                                   Rs.                                                             Rs.
                        Creditors                      20,000            Cash at Bank                      10,000
                        Capital:                                               Sundry Assets                     20,000
                               A                           25,000           
                               B                           20,000                                                                 .
                                                             65,000                                                       65,000
            The Partners shared profits and losses in the ratio of 3 : 2. On the above date C was admitted as a Partner on the condition that he would pay Rs.20,000 as capital. Goodwill was to be valued at 3 year’s purchase of the average of four year’s profits which were:
                        1986                       Rs.   9,000            1988                             Rs. 12,000
                        1987                       Rs. 14,000            1989                             Rs. 13,000
            The new profit sharing ratio is 7 : 5 : 4.
Give journal entries, ledger accounts and Balance Sheets if goodwill is raised and written off.

24.            Pratap had the following balance sheet as on 1st July:
      Liabilities and Capital              Rs.                Assets and Property    Rs.
            Sundry Creditors                        2,500            Cash in hand                                  400
            Bills payable                              1,000            Cash at bank                             13,600
            Outstanding Expenses                    500            Sundry Debtors                        29,000
            Pratap’s Capital                    1,00,000            Stock in Trade                          17,000
                                                                                    Investments                               11,000
                                                                                    Furniture                                     1,000
                                                                                    Motor Lorry                               9,500
                                                                                    Plant and Machinery                 13,400
                                                                       .            Land and Buildings                    9,100
                                                          1,04,000                                                          1,04,000
            Pratap decided to admit Shiva as his working partner and the following terms were agreed upon between them:
a)     Shiva would bring Rs.10,000 as his Capital, and pay Rs.8,000 as premium for one-fifth share in the business.
b)     The assets should be revalued as follows:
Stock less 10 percent investments at Rs.10,000, furniture, motor lorry, plant and machinery less 5% and Land and – Buildings at Rs.15,000.
c)     A provision for doubtful debts to be created at 5% of sundry debtors.
Assuming that the above agreement was duly carried out, show the necessary journal entries to record the above adjustment and prepare the balance sheet of the firm after the admission of Shiva.

25.       A, B and C are partners sharing profit and losses in the ratio of 3 : 2 : 1. C retires from the firm and A and B decide to continue the business of the firm and share profits and losses in the ratio of 5 : 3. Goodwill of the firm is valued at Rs.12,000.
            If goodwill is raised at full value and its value is written back to the capital accounts of the continuing partners.
Write the necessary journal entries and ledger accounts.

26.     A, B and C are three partners sharing profit and losses in the ratio of 4 : 3 :2. B retires and the goodwill of the firm is valued at Rs.5400. No goodwill appears as yet in the books of the firm. A and C decide to share profits in the future in ratio of 5 : 3 and that no goodwill account will be raised in the books of the firm.
          Pass Journal  entries.

27.     A, B and C are equal partners. B retires, his share of goodwill is Rs.9,000. The remaining partners have decided to continue the business sharing profit in the ratio of 3 : 2. Goodwill is not to be shown in the Balance Sheet.
Pass Journal Entries.

28.       A and B are partners in a business sharing profits and losses as A 3/5ths and B 2/5ths. Their Balance Sheet as on 1st January 1991 is given below:
            Capital: A              20,000                              Machinery                       19,500
                         B               15,000       35,000            Stock                               16,000
            Reserve                                    15,000            Debtors                           15,000
            Sundry Creditors                        7,500            Cash at Bank                     6,000
                                                                                    Cash in hand                      1,000
                                                                       .                                                              .
       57,500                                                    57,500
B decides to retire from the business owing to illness and A takes it over and the following revolutions are made:
a)     Goodwill of the firm is valued at Rs.15,000.
b)     Depreciate Machinery by 7.5% and stock by 15%
c)     A Bad Debts provision is raised against Debtors at 5% and a Discount Reserve against Creditors at 2.5%.
Journalize the above transactions in the books of the firm, prepare ledger accounts and the Balance Sheet of A.

29.       Basu and Das are Partners sharing profits and losses equally. On 30th June 1990 their Balance Sheet was as under:
                                                                   Rs.                                                                   Rs.
            Sundry Creditors                      39,800            Freehold: Premises                  26,000
            Capitals:                                                          Machinery                                42,000
                  Basu                                   45,000            Stock                                        12,000
                  Das                                     36,000            Sundry Debtors                        38,000                                                            .            Bank Balance                             2,800
                                                          1,20,800                                                         1,20,800
It is agreed that Basu will retire as from 30th June 1990 and that Das will take over the business on the following terms:
a)     Goodwill of the firm to be valued at Rs.11,000.
b)     Stock to be agreed as worth Rs.10,000.
c)     A Provision for doubtful debts to be carried at 2 percent.
d)     Basu to be paid out as to Rs.20,000 of the amount found to be due to him by a loan taken at 9 percent and as to the balance by a bill of exchange payable after 12 months.
Show journal entries to record the above transactions and also the Balance Sheet of Das after the adjustments have been made.

30.       A, B and C were carrying on business in partnership, sharing profits and losses in the ratio of 3 : 2 : 1 respectively. On 31st December, 1990 Balance Sheet of the firm stood as follows:

Liabilities

Rs.
Assets
Rs.
Sundry Creditors
Capital Accounts:
            A                  15,000
            B                  10,000
            C                  10,000
13,590



35,000
Cash
Debtors
Stock
Buildings
5,900
8,000
11,690
23,000
48,590
48,590
B retired on the above mentioned data and the following terms:
i) Buildings be appreciated by Rs.7,000, ii) Provision for bad debts be made @5% on  Debtors. iii) Goodwill of the firm be valued, at Rs.9,000 and adjustment in this respect be made without raising Goodwill Account, iv)  Rs.5,000 be paid to B immediately and the balance due to him be treated as a loan carrying interest @6%. Per annum. A and C decided to share-profits. In the ratio of 2 : 1.
Pass Journal entries to record the above mentioned transactions, and the balance sheet of the firm as it would appear immediately after B’s retirement.
.
31.       Kishore and Nakul are partners sharing profits and losses equally. Their Balance sheet on 30th November, 1990 is as follows:

            Liabilities

Rs.
Assets
Rs.
Creditors
Bills Payable
Kishore’s Loan
Reserve Fund
Capital Accounts:
            Kishore          15,000
            Nakul             20,000
11,200
1,800
5,000
6,000


35,000
Cash
Stock
Debtors                      13,800
Less: Provision            1,400
Furniture
Plant and Machinery
3,500
17,800

12,400
2,800
22,500
59,000
59,000
They decide to dissolve the firm. The assets realized as follows:
            Stock                                                                18,200
            Debtors                                                            10,600
            Furniture                                                             1,800
            Plant and Machinery                                         19,000
Credit allowed a discount of 2% and expenses of realization amounted to Rs.554. Give journal entries and the necessary ledger accounts to close the books of the firm.

32.       The Balance Sheet of A, B and C sharing profits and losses as 3 : 2 : 1 respectively stood as follows on 30th June, 1990 (figures are in Rs.):
            Creditors                                  50,400            Cash at Bank                  3,700
            Joint Life Policy Reserve         10,000            Stock                            20,100
            Reserve Fund                           12,000            Debtors                        62,600
            Capital Accounts:                                            Investments                   16,000
                    A                    30,000                              Furniture                         6,500
                    B                    20,000                              Buildings                      23,500
                    C                    10,000       60,000                                                          .           
                                                          1,32,400                                             1,32,400
The firm was dissolved as on that date. For the purpose of dissolution, the investments were valued at Rs.18,000 and stock at Rs.17,500. A agreed to take over the investments and B to takeover the stock. C took over the furniture at book value. Debtors and Building realized Rs.57,000 and Rs.25,000 respectively. Expenses of realization amounted to Rs.450. in addition one bill for Rs.500 under discount was dishonored and had to be taken up by the firm.
Give journal entries and the necessary ledger accounts to close the books of the firm.

33.       A, B are Partners in a business. Sharing profit and losses in ration of 3 : 2.
            Particulars                                               Amount Rs.      Amount Rs.
            Capital:    A                                                                             65,000
                             B                                                                             40,000
            Drawings: A                                                       4,000
                              B                                                      3,000
            Goodwill                                                          40,000
            Sales                                                                                     1,60,000
            Debit, Credit                                                    40,500               2,500
            Returns                                                               1,500
            B/p                                                                                             8,900
            Furniture                                                             5,000
            Purchases                                                         85,000
            Rent                                                                    4,250
            Advertisement                                                    9,000
            Op. stock                                                          11,500
            Cash                                                                 16,000
            Wages                                                              14,000
            Salaries                                                            12,750
            Printing                                                                  740
            Commission                                                       7,000
            Carriage                                                             5,800
            Building                                                           20,860
            Plant                                                                 10,000                       .
                                                                                  2,90,000          2,90,000
            Additional Information:
            1)  Depreciation on furniture Rs.250, Plant 10%, Building 20%
            2)  Provision for doubtful debts 5%.
            3)  Interest on capital 5%.
            4)  B salary Rs.1,800 payable.
            5)  Closing Stock 12,500.
Prepare final accounts the firm.

34.       (Debtors methods): A head office in Bombay has a branch in Hyderabad to which goods are invoiced by the Head office at cost plus 25%. All cash received by the Head office. From the following particulars show how the Branch Account will appear in the Head office books:
            Stock on 1st January, 2005 (at Invoice Price)                                    1,25,000
            Debtors on 1st January, 2005                                                             1,20,000
            Goods invoiced from Head office                                                     4,00,000
            Remittances by Branch to Head office                                      
            Cash sales                                                                    1,60,000
            Cash received from debtors                                         2,95,000       4,55,000
            Goods returned to head office (at invoice price)                                 25,000
            Cheques remitted to Branch:
            Salaries                                                                        1,10,000
            Rent & Taxes                                                                  30,000
            Sundry expenses                                                                5,000       1,45,000
            Stock on 31st December, 2005                                                          1,50,000
            Debtors on 31st December, 2005                                                      2,25,000
           
35.       (Stock and Debtors method) Praveen Ltd. Has a branch at Pune. Goods were invoiced at selling price which was fixed by adding 25% to the cost. From the following information relating to the year 2005 ascertain the profit or loss made in the year 2005 by Stock and Debtors system:
                                                            Rs.                                                                   Rs.
            Stock at invoice                                               Cash Sales                                90,000
                     price on 1-1-2005           20,000            Credit sales                           1,85,000
            Goods sent to Branch                                      Cash remitted to Branch
                    during the year 2005                                       for expenses:
                    at invoice price             3,00,000            Rent                                2,400
            Discount allowed to                                        Salaries                          5,600
                    customers                           5,000            General Expenses           2,000 10,000
            Cash received from                                         Goods returned
                    customers                      1,40,000                 by Customers                         6,000
            Stock at invoice price on                                 Debtors on 1-1-2005                10,000
31-12-2005                                    50,000
            There was shortage of Rs.1,000 when Branch stock was physically verified.

36.       (Admission): Azib and Omar are partners sharing profits in the ratio of 2 :1. Their
Balance Sheet on 1st April 2009 is as under:
            Liabilities                                      Rs.            Assets                                             Rs.
            Creditors                               2,50,000            Cash at Bank                         1,50,000
            General Reserve                   1,50,000            Stock & Debtors                    1,50,000
            Capitals:                                                         Furniture                                1,00,000
                    Azib                              4,00,000            Land and Building                 6,00,000
                    Omar                             2,00,000                                                                       .
                                                        10,00,000                                                       10,00,000
They admit Sohail as partner giving him ¼ share. Sohail brings in Rs.2,00,000 as his capital. Goodwill is valued at Rs.1,50,000 and will remain in the books. Land and buildings are to be appreciated by 25% and Furniture is to be written down by Rs.20,000. A provision of Rs.10,000 is to be made for outstanding expenses. Record the transactions in any accounting software and generate the Balance Sheet after the process of admission is complete.

37.       On 1st April, 2009 Preksha Ltd. Offered 2,00,000 equity shares of Rs.10 each to the public at a premium of Rs.2 per. The Payment was to be made as follows:
            On application: Rs.5, on Allotment Rs.4 (including premium) and balance on call.
            On April 2009, when the issue was closed, the company received applications totaling 3,50,000 shares, of which applications for Rs.50,000 shares were rejected by their banker, SBI, on technical grounds of the valid 3,00,000applications, retail investors applying for 1,00,000 shares received allotment in full, while the balance 1,00,000 shares were allotted to institutional investors in the rate of 1 : 2. The allotment process was completed on 15th May 2009 and the directors made the call exactly a month later in 15th June, 2009. One shareholder, Mr.Nikhil, holding 5000 shares, did not pay the call money. After the notice, on 4th September 2009, these shares were forfeited and re-issued to Mr. Sandeep at Rs.6 per share.
            Pass necessary entries to reflect the above transactions of Preksha Ltd.

38.       Mamta Ltd. Issues 25,000   6% Debentures of Rs.100 each on 1st January 2005, payable at a discount of 5% but repayable at the end of 4 years at a premium of 5%. A sinking fund will be instituted for the purpose investments are expected to earn 4% net. Sinking Fund tables show that an annual installment of Rs.0.23549 every year at 4% interest will taken Re.1 at the end of 4 years. Investments are made in nearest multiples of Rs.1,000.
On 31st December 2008, the investments realized Rs.18,58,000. The bank balance as on that date was Rs.8,35,000. The Debentures were paid off is full.
Show how the above transactions.

39.       Manaank Ltd. Issued 10 Lakh equity shares of Rs.10 each. The whole issue was underwritten by three booking firms, namely Merry Line (ML), Layman Bros (LB) and More gun chase (MC) as under:
                        ML: 40%, LB: 30%, Mc: 30%
            8 Lakh applications were received, of which 2 Laksh applications had the stamp of ML, 1Lakh had to stamp of LB and another 2 Lakhs had the stamp of MC, It was decided to adjust the unmarked applications in the ratio of Gross Liability after deducting the marked applications. A commission of 2% is payable to the Brokers.
            Show the calculation of Net Liability and record the Transactions is appropriate books.

40.       A Trading Firm has a Retail Branch, which is supplied with goods from the Head Office and which keeps its own sales ledger and remits all cash received daily to the Head Office, the Branch expenses being paid by the Head Office by weekly cheques.
From the following particulars draw up the Branch Account as they would  appear in the Head Office Books for the six months ending 31st December 2008:
                                                                                                                        Rs.
Six Month’s Credit Sales                                                                    2,485
Cash Sales                                                                                           1,460
Returns Inward                                                                                    30
Cash Received on Ledger Accounts                                                    2,387
Debtors on 1.7.2008                                                                            1,345
Stock on 1.7.2008                                                                               840
Stock on 31.12.2008                                                                           1,280
Goods received from Head Office                                                      2,276
Bad Debts at the Branch                                                                      65
Wages and Sundry Expenses                                                               415
Rent, Rates and Taxes                                                                         402

41.       From the following particulars, prepare Branch Account showing profit or loss of the Branch:
Opening Stock at the Branch                                       :Rs.30,000
Goods sent to Branch                                                  :Rs.90,000
Sales (Cash)                                                                :Rs.1,20,000
Salaries                                                                       :Rs.10,000
Other Expenses                                                           :Rs.4,000
Closing Stock could not be ascertained but it is known that the Branch usually sells at cost plus 20%. The Branch Manager is entitled to a commission of 5% on the profit of the Branch before charging such commission.

42.       Sumana Limited invoices goods to their various Branches at cost and the Branches sell for cash as well as on credit. From the following particulars, prepare the Branch Stock Account, Branch Debtors Account, Goods Sent to Branch Account, Branch Cash Account, Branch Expenses Account and Branch Profit and Loss Account in the Books of Head Office:
Particulars
Rs.
Stock on 1st January
Stock on 31st December
Debtors on 1st January
Debtors on 31st December
Cash on 1st January
Goods sent to Branch
Goods returned by Branch
Cash sales
Credit sales
Allowance to customers
Bad Debts
Returns from customers
Remittance by Branch
Wages and Salaries
Rent and Taxes
Normal Loss of goods due to wastage
Abnormal Loss due to pilferage
Cash remitted to Branch
10,000
8,000
14,000
15,000
400
30,000
2,000
30,000
25,000
400
600
1,000
46,000
4,000
2,000
500
1,500
4,500

43.      Dynamic Ltd. issued 10,000 shares of Rs.10 each at a discount of Rs.1 per share. The other details are as follows:
On Application Rs.2, On Allotment Rs.2, On First and Final Call Rs.5. Discount is to be adjusted on allotment. All the money is received except from Mr. Ravi, who had been allotted 100 shares, failed to pay the first and final call amount and his shares have been forfeited.
Journalize the above transactions relating to the forfeiture of the shares.

44.       X and Y were partners in a firm sharing profits in the ratio of 3:2. On 1.1.2001 their fixed capitals were Rs.3,00,000 and Rs.2,50,000 respectively. On 1.7.2001 they decided that their total capital (fixed) should be Rs.6,00,000 in their profit sharing ratio. Accordingly, they introduced extra or withdrew excess capital. The partnership deed provided for the following:
 (i) Interest on Capital @12% p.a.
(ii) Interest on Drawings @18% p.a.
(iii) A monthly salary of Rs.2,000 to X and a monthly salary of Rs.1,500 to Y. The drawings of X and Y during the year was as follows:
Year 2001
X (Rs.)
Y (Rs.)
June 30
September 30
20,000
20,000
15,000
25,000
During the year ended 31.12.2001 the firm earned a net profit of Rs.1,50,000. 10% of this profit was to be transferred to general reserve.
You are required to prepare: (i) Profit and Loss Appropriation Account (ii) Partner’s Capital Accounts and (iii) Partner’s Current Accounts.

45.       X and Y are partners sharing profits and losses equally. It has been agreed that if a partner retires, the other partner, should be desired to carry on the business, shall pay to the retiring partner his share by four equal half-yearly installments adding interest @5% p.a. with half-yearly rests. Goodwill is to be valued on the basis of five year’s capitalization of the average annual super profits of three preceding financial years, fixed assets being revalued for the purpose. The balance sheet of the firm as at 31.12.2002 was as follows:
Liabilities 
Rs.
Assets  
Rs.
Creditors
X’s Capital Account
Y’s Capital Account
9,160
22,420
16,650
Cash in Hand
Book-debts
Stock
Building
13,000
10,200
5,730
19,300

48,230

48,230
Y retires on 1.1.2003 and X decides to carry on the business. The profits for the three years ended 31st December were Rs.13,500; Rs.14,500 and Rs.14,000. For the purpose of dissolution, building has been revalued at Rs.24,800. No interest on capital was charged and partners did not draw any salary.
Show the computation of value of Goodwill and prepare Y’s Loan Account. Assume that normal management remuneration is Rs.6,000 p.a. and normal return on capital is 12%.

46.       Brick, Sand and Cement were partners in a firm sharing profits and losses in the ratio of 3:2:1 respectively. Following is their balance sheet as on 31.12.2004:
Liabilities 
Rs.
Assets  
Rs.
Brick Capital Account
Sand Capital Account
Cement Capital Account
Reserve
Creditors
30,000
20,000
10,000
29,800
10,200
Land and Building
Furniture
Stock
Debtors
Cash and Bank
50,000
15,000
20,000
12,500
2,500
Lime is to be admitted as a partner with effect from 1st January 2005, on the following terms:
(i)    Lime will bring Rs.15,000 as capital and Rs.12,000 as premium for             goodwill. Half of the goodwill will be withdrawn by the partners.
(ii)  Lime will be entitled to 1/6th share in the profits of the firm.
(iii)          The assets will be revalued as: Land and Buildings Rs.56,000, Furniture Rs.12,000, Stock Rs.16,000, Debtors Rs.7,000.
(iv)The claim for a creditor for Rs.2,300 is paid at Rs.2,000.
(v)  Half of the Reserve is to be withdrawn by the partners.
Prepare the Opening Balance Sheet of the New Firm.  

47.       Asha Limited had issued Rs.2,00,000, 10% debentures on which interest was payable half-yearly on 30th September and 31st March.
            Show the necessary journal entries relating to debenture interest for the year ended 31st March, 2007 assuming that all moneys were duly paid by the company. Tax deducted at source is 10%.

48.       Vardan Limited issued 10% Debentures of Rs.6,00,000 with a condition that they should be redeemed after 3 years at 10% premium. The amount set aside for the redemption of debenture is invested in 5% Government Securities. The sinking fund table shows that 0.31720855 at 5% compound interest in three years will become Re.1.
You are required to give Journal entries for recording the transactions.

49.       Meenakshi Limited issued on 1st April 2004 1,000, 12% Debentures of Rs.100 each repayable at the end of 3 years at a premium of 5%. It was decided to create a sinking fund for the redemption of debentures. The investments are expected to earn interest at 5% p.a.
Reference to the sinking fund table shows that Rs.0.317209 invested at 5% p.a. amounts to Re.1 at the end of three years. At the end of three years, the investments were sold at Rs.70,000 and the debentures were redeemed.
Prepare Debentures Account, Sinking Fund Account and Sinking Fund Investment Account.

50.       Sri Vaihbava Publications Ltd. Invited applications for 10,000 shares of Rs.10 each the details are give as follows:
On Application Rs.2, On Allotment Rs.3, On First and Final Call Rs.5. The public applied for 10,000 shares and they were allotted.

Show the vouchers of the above transaction.