Date Day Sum 1 Sum 2 Sum 3 Sum 4 Sum 5

Cash Flow Partnership Basic

16-11-2022 Wednesday Change in PSR statement fundamental Ratio Issue of Debentures

Questions

Q1.

Piyush, Puja and Praveen are partners sharing profits and losses in the ratio of
3:3:2. There Balance Sheet as on March 31st 2015 was as follows :

Liabilities (Rs.) Assets (Rs.)

Sundry Creditors 48,000 Cash at bank 74,000

Bank Loan 72,000 Sundry Debtors 88,000

Capital: Stock 2,40,000

Piyush 4,00,000 Machinery 3,18,000

Puja 3,00,000 Building 4,00,000

Praveen 3,00,000 10,00,000

11,20,000 11,20,000
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Partners decided that with effect from April 1, 2015, they would share
profits and losses in the ratio of 4:3:2. It was agreed that :
i. Stock be valued at Rs. 2,20,000.
ii. Machinery is to be depreciated by 10%
iii. A provision for doubtful debts is to be made on debtors at 5%.
iv. Building is to be appreciated by 20%
v. A liability for Rs. 5,000 included in sundry creditors is not likely to
arise. Partners agreed that the revised value are to be recorded in
the books. You are required to prepare journal, revaluation
account, partner’s capital Accounts and revised Balance Sheet.
Q2.

Following is the balance sheet of Wisben Ltd as on 31st March, 2012

Additional Information:

During the year, a piece of machinery of the book value of Rs 80,000 was sold for Rs 65,000.
Depreciation provided on tangible assets during the year amounted to Rs 2,00,000. Prepare a
cash flow statement.

Q3.
Mona, Nisha and Priyanka are partners in a firm. They contributed Rs. 50,000 each as capital
three years ago. At that time, Priyanka agreed to look after the business as Mona and Nisha
were busy. The profits for the past three years were Rs. 15,000, Rs. 15,000 and Rs. 50,000
respectively. While going through the books of accounts, Mona noticed that the profit had been
distributed in the ratio of 1: 1: 2. When she enquired from Priyanka about this, Priyanka
answered that since she looked after the business she should get more profit. Mona disagreed
and it was decided to distribute profit equally retrospectively for the last three years. (i) You are
required to make necessary correction in the books of accounts of Mona, Nisha and Priyanka by
passing an adjustment entry.
Q4.

The proprietary ratio of M Ltd is 0.80 : 1. State with reasons whether the following
transactions will increase, decrease or not change the proprietary ratio.
i. Obtained a loan from bank Rs. 2,00,000 payable after five years.
ii. Purchased machinery for cash Rs. 75,000
iii. Redeemed 5% redeemable preference shares Rs. 1,00,000.
iv. Issued equity shares to the vendors of machinery purchased for Rs. 4,00,000.

Q5.
A Company issued debentures of Rs.100 each at par for the purchases of the following
assets and liabilities from Gupta Bros. at purchase consideration of Rs.15,00,000

Plant Rs.3,50,000
Stock Rs.4,50,000
Land and Building Rs.6,00,000
Sundry Creditors Rs.1,00,000

Pass necessary Journal Entries.