Revision – 28th Aug & 29th Aug.

HALF YEARLY : 2018-19

Q-1) OR = 3:2
NR = 1:4
IFR = 40,000
BOOK VALUE = 5,00,000
MARKET VALUE = 4,50,000

So, the Loss = 50,000, but we can adjust 40,000 loss from IFR and the balance 10,000
10,000 thru Revaluation a/c

IFR a/c Dr. 40,000

Revaluation a/c Dr. 10,000
To Investments a/c 50,000
(Being loss on Investments adjusted)

Q-2) OR = 5:3:2
A retired

Drs = 80,000
Provision = 8,000
Bad Debts = 10,000

We can adjust 8,000 bad debts from Provision, and the balance 2,000 bad debts thru’
Revaluation a/c

1) Bad Debts a/c Dr. 10,000

To Debtors 10,000

2) PBDD Dr. 8,000

Revaluation Dr. 2,000
To Bad Debts 10,000

3) Revaluation a/c Dr. 7,000

To PBDD 7,000
( 10% of 70,000)

Q-3) M/c Price = ?

Cheque paid = 3,00,000
Shares ( 40,000 x 10) = 4,00,000
SPR (20% of 4,00,000) = 80,000
Total amt paid = 7,80,000  Price of Machinery
Q-4) First Call due = 2,00,000 x Rs 3 = 6,00,000
(-) CIA ( Sukesh = 1,000 x 3) = 3,000
= 5,97,000
(+) Calls in Advance (Ramesh 3,000 x 2) = 6,000
Total Amount Received = 6,03,000

Q-5) To Transfer the GR Not to Transfer the GR

Gen. Reserve a/c Dr. 2,00,000 C’s Capital a/c (1/4 x 2L Dr. 50,000
To A’s Capital a/c 1,20,000 To A’s Capital a/c 30,000
To B’s Capital a/c 80,000 To B’s Capital a/c 20,000

Q-6) Purposes of SPR?

1) To issue fully paid Bonus Shares
2) To write off Preliminary Expenses
3) To write of Discount on Debentures, etc.

Q-7) Loan = Rs 40,00,000

Debentures issued as collateral (50,000 x 100) = Rs. 50,00,000

J.E

1) Bank a/c Dr. 40,00,000

To Bank Loan a/c 40,00,000

2) Debenture Suspense a/c Dr. 50,00,000

To7% Debentures a/c 50,00,000

Q-8) Interest = 8/100 x 50,00,000 = 4,00,000

1) Interest on Debentures a/c Dr. 4,00,000

To Debenture holders a/c 4,00,000
(Interest is due/payable)

2) Debenture holders a/c Dr. 4,00,000

To Bank a/c 4,00,000
(Interest is paid off)

3) Statement of P&L a/c Dr. 4,00,000

To Interest on Debentures 4,00,000
(Interest is tfrd to P&L )
Q-9) OR = 3:2
K’s share = 1/5
K’s Capital = 2,00,000
P& R’s capitals to be adjusted in new ratio

Ans. : OR = 3:2
K = 1/5
Remaining Share = 4/5
So P’s new share = 3/5 x 4/5 = 12/25
R’s new share = 2/5 x 4/5 = 8/25
K’s new share = 1/5 x 5/5 = 5/25

So New Ratio = 12:8:5 

Total Capital = 5/1 x 2,00,000 = 10,00,000 (  12:8:5) 

A’s New Capital = 12/25 x 10,00,000 = 4,80,000

B’s New Capital = 8/25 x 10,00,000 = 3,20,000
C’s New Capital = 5/25 x 10,00,000 = 2,00,000

So A = 4,80,000 – 2,50,000 = 2,30,000 ( A has to bring more capital)

B = 3,20,000 – 3,20,000 = 0 ( B no need to bring more capital)

1) Cash a/c Dr. 4,80,000

To A’s Capital a/c 4,80,000

2) Cash a/c Dr. 2,00,000

To C’s Capital a/c 2,00,000

Q-10)
Year / Profit Mngmt Closing Mach. Depn Adjusted
Charge Stock Profit
2015-16 3,00,000 -5,000 -30,000 2,65,000
2016-17 3,60,000 -5,000 + 30,000 3,85,000
2017-18 2,70,000 -5,000 + 60,000 -6,000 3,19,000

So, Goodwill = 2 x Avg Profits

= 2 x ( 2,65,000 + 3,85,000 + 3,19,000 )
3
= 2 x 8,69,000 / 3
= 5,79,333

Q-11) Later
Q-12) OR = 5:3:2
B retired
NR = 2:3

GR = NR – OR
A = 2/5 – 5/10 = - 1/10
C = 3/5 - 2/10 = 4/10

GW Journal Entry

C’s Capital a/c (4/10 x X) Dr. ? 80,000

To B’s Capital a/c (3/10 x X) 60,000
To A’s Capital a/c (1/10 x X) ? 20,000
(being gw adjusted)

3/10 x X = 60,000
X = 60,000 x 10/3
= 2,00,000

Q-13) Done in the QP

Share Capital a/c Dr. (2,000 x 8) 16,000

SPR a/c Dr. (2,000 x 1) 2,000
To Share Forfeiture a/c 12,000
To CIA (2,000 x 3) 6,000

Bank a/c ( 1,500 x 7) Dr. 10,500

Share Forfeiture a/c (1,500 x 1) Dr. 1,500
To Share Capital a/c ( 1,500 x 8) 12,000

Share Forfeiture a/c Dr. 7,500

To Capital Reserve a/c 7,500
WN
1,500 x 12,000 ( - ) 1,500
2,000

9,000 – 1,500 = 7,500

Q-14) Notes to Accounts
Note No: 1 - Share Capital
Particulars Rs. Rs. Rs.
Authorized Capital
5,00,000 Shares x Rs. 10 50,00,000

Issued Capital
2,80,000 Shares x Rs 10 28,00,000

Subscribed Capital

* Fully Paid Nil Nil Nil

*Not Fully Paid

(2,80,000 – 3,000 + 2,000 = 2,79,000)
22,32,000
= 2,79,000 Shares x Rs. 8 Called up
(-) CIA ( Mohan: 5,000 x 2) 10,000
(+) Share Forfeiture (1,000 x 6) 6,000 22,28,000 22,28,000

Q-15) OR = 3:2
C’s Share = 1/5
Remaining Share = 4/5  2:1

A’s new share = 2/3 x 4/5 = 8/15

B’s new share = 1/3 x 4/5 =4/15
C’s new share = 1/5 x 3/3 = 3/15
New Ratio = 8:4:3

WN-2) C’s Goodwill = 1/5 x 10,00,000 = 2,00,000  SR

1) Land a/c Dr. 5,00,000
Machinery a/c Dr. 3,00,000
Stock a/c Dr. 2,00,000
To C’s Capital a/c 8,00,000
To Goodwill Premium a/c 2,00,000

2) Goodwill Premium a/c Dr. 2,00,000

To A’s Capital a/c 66,667
To B’s Capital a/c 1,33,333
SR = OR – NR
A = 3/5 – 8/15 = 1/15
B = 2/5 – 4/15 = 2/15
SR = 1:2
 29th Aug 2022 ( Monday)
Take Yesterday’s QP ( 2018-19)

Q-16 Y’s Capital a/c ( 3/10 x GW) Dr. 60,000

To Z’s Capital a/c ( 2/10 x GW) 40,000  1
To X’s Capital a/ c ( 1/10 x GW) 20,000
(Being GW adjusted)

WN)
2/10 x GW = 40,000
GW = 40,000 x 10/2
= 2,00,000

X’s Goodwill = 20,000 / 2,00,000 = 1/10

New Ratio = X = 5/10 – 1/10 = 4/10

Y = 3/10 + 3/10 = 6/10

Q- SR = 3:1 ( 30,000 : 10,000)

16(b) OR = 3:2
C = 1/5

A’s new share = 3/5 – ( 3/4 x 1/5)

B’s new share = 2/5 - ( 1/4 x 1/5)

Q-17 Assets = 40,00,000

Liab. = 10,00,000
So, Net Assets = 30,00,000

Price = 35,00,000
Extra 5,00,000 paid is called Goodwill
Assets a/c Dr. 40,00,000
Goodwill a/c Dr. 5,00,000
To Liabilities a/c 10,00,000
To X & Co a/c 35,00,000

X & Co a/c Dr. 5,00,000

To Bank a/c 5,00,000
X & Co a/c (120%) Dr. 30,00,000
To 8% Debentures a/c (100%) 25,00,000
To SPR a/c (20%) 5,00,000
WN) 120% = 30,00,000
100% = ?
= 100/120 x 30,00,000 = 25,00,000
Q-18) Change in PSR – Not in the HYE

Q-19) WN-1) IOC :

M = 5/100 x 5,00,000 = 25,000
B = 5/100 x 8,00,000 = 40,000
R = 5/100 x 4,00,000 = 20,000

WN-2) IOD : ( Last paragraph)

M = (4 x 10,000) x 12/100 x 4.5/12 = 1,800
B = ( 12 x 5,000) x 12/100 x 5.5/12 = 3,300
R = ( 2 x 40,000) x 12/100 x 3/12 = 2,400

WN-3) IOL
B = 1,00,000 x 6/100 x 12/12 = 6,000

Dr. P&L Appropriation a/c Cr.

To IOC By P& L a/c 3,06,000
M’s current a/c 25,000 (-) IOL 6,000 3,00,000
B’s current a/c 40,000
R’s current a/c 20,000 85,000

To Salary to M By IOD
M’s current a/c 4,000 M’s current a/c 1,800
B’s current a/c 3,300
R’s Current a/c 2,400 7,500
To Commission to B
B’s current a/c 30,000
( 10/100 x 3,00,000)

To Profit Tfrd to:

M’s current a/c
B’s current a/c
R’s current a/c 1,88,500

Total 3,07,500 Total 3,07,500

Q-20 Death
OR = 2:1:2
P died on 1st Oct
WN-1) Goodwill = 3 x Avg Profit
= 3 x ( 30K + 70K + 80K )
3
= 1,80,000
So, P’s Goodwill = 2/5 x 1,80,000 = 72,000  1:2

WN-2) Profit till Death ( based on avg profits)

= ( 30K + 70K + 80K ) x 6 x 2

3 12 5
= 60,000 x 6/12 x 2/5
= 12,000
WN-3) IOC
1st April = P’s Capital = 1,44,000
1st July = he withdrew 44,000 = 1,44,000 – 44,000 = 1,00,000
1st Oct = he died

IOC = 1,44,000 x 8/100 x 3/12 (+) 1,00,000 x 8/100 x 3/12

= 2,880 (+) 2,000
= 4,880
Dr. P’s Capital a/c Cr.
Dt Particulars Rs. Dt Particulars Rs.
1/10 To Drawings 44,000 1/10 By Balance b/d( Cap) 1,44,000
1/10 To IOD - 1/10 By IOC 4,880
1/10 By P&L Suspense a/c 12,000
1/10 To P’s Executors a/c 1,88,880 1/10 By R’s Capital 24,000
By S’s Capital a/c 48,000
( GW) 72,000 1:2
Total 2,32,880 Total 2,32,880
Q-21 Dissolution JE

Dt Particulars LF Debit Rs. Credit Rs.

1 Aziz’s Capital a/c Dr. 64,000

To Realisation a/c 64,000

( 50/100 x 1,60,000) = 80,000

(-) Disc. 20% of 80,000 = 16,000
= 64,000
2 Bank a/c Dr. 1,04,000
To Realisation a/c 1,04,000

( 50/100 x 1,60,000) = 80,000

(+) Profit 30% of 80,000 = 24,000
= 1,04,000

3 Bank a/c Dr. 2,94,000

To Realisation a/c 2,94,000

( 3,00,000 – 2% of 3,00,000)
= 3,00,000 – 6,000
= 2,94,000

4 No Entry -
( for giving M/c to a Creditor) -

5 Bank a/c Dr. 2,000

To Realisation a/c 2,000

( 50/100 x 4,000)

6 Realisation a/c Dr. 70,000

To Rahim’s Capital a/c 70,000