Q1) Give any three points of distinction between revaluation account and realisation account. (Marks 3)

Q2) Can forfeited shares be issued at a discount? If so, to what extent? (Marks 3)

Q3) Ashoka Ltd. purchased machinery costing Rs. 1,35,000. It was agreed that the purchase consideration be paid by issuing 12% debentures of Rs. 100 each. Assume debentures have been issued (i) at par and (ii) at a discount of 10%. Give necessary journal entries. (Marks 3)

Q4) X, Y and Z are partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. Their fixed capitals were Rs. 3,00,000, Rs. 2,00,000 and Rs. 1,00,000 respectively. For the year 1996 interest on capital was credited to them @ 10% p.a. instead of 8% p.a.. Showing your working notes clearly, pass the necessary adjusting journal entry. (Marks 4)

Q5) A, B and C were partners in a firm sharing profits in proportion of their capitals which were Rs. 4,00,000, Rs. 3,00,000 and Rs. 2,00,000 respectively. They had a joint life policy of Rs. 2,70,000 on which the annual premium paid was considered as an expense. On 1.1.1996, B died. On that date there was a debit balance of Rs. 90,000 in their Profit and Loss Account. Pass necessary journal entries on B's death. (Marks 4)

Q6) X, Y and Z were partners in a firm sharing profits in the ratio of 3 : 2 : 1. Z retired and the new profit sharing ratio between X and Y was 1 : 2. On Z's retirement the goodwill of the firm was valued at Rs. 30,000. Pass necessary journal entry for the treatment of goodwill on Z's retirement without opening goodwill account.
They admitted C into partnership on this date. New profit sharing ratio is agreed as 3 : 2 : 1. C brings proportionate capital after the following adjustments :

(i) C brings Rs. 10,000 in cash as his share of goodwill.
(ii) Provision for doubtful debts is to be reduced by Rs. 2,400.
(iii) There is an old typewriter valued at Rs. 2,600. It does not appear in the books of the firm. It is now to be recorded.
(iv) Patents are valueless.
Prepare Revaluation A/c, Capital and the opening Balance Sheet of A, B and C.
OR

A, B and C were partners in a firm and shared profits in the ratio of 3 : 2 : 1. On 31.12.1996 their Balance Sheet was as follows:

On this date the firm was dissolved. A was appointed to realise the assets. A was to receive 5% commission on the sale of assets (except cash) and was to bear all expenses of realisation.
A realised the assets as follows :
Debtors Rs. 30,000, Stock Rs. 26,000, Investments 75% of book value, Plant Rs. 42,750. Expenses of realisation amounted to Rs. 4,100.
Commission received in advance was returned to the customers after deducting Rs. 3,000.
Firm had to pay Rs. 7,200 for outstanding salary not provided for earlier. Compensation paid to employees amounted to Rs. 9,800. This liability was not provided for in the above Balance Sheet. Rs. 25,000 had to be paid for Providend Fund.
Prepare Realisation Account, Capital Accounts and Cash Account.

Q7) The following balances have been extracted from the books of Rama Ltd. on 31.12.1996 :
Share Capitals Rs. 10,00,000, Share Premium Rs. 1,00,000 12% Debentures Rs. 5,00,000 Creditors Rs. 2,00,000, proposed dividend Rs. 50,000, Profit and Loss Account (Dr.) Rs. 50,000, Live Stock Rs. 9,00,000, Government Bonds Rs. 4,00,000, Work in progress Rs. 4,00,000 and Discount on issue of 12% Debentures Rs. 1,00,000.
Prepare the Balance Sheet of the Company as per Schedule VI Par I of the Companies Act 1956.
(Marks 5)

Q8) A and B were partners with profit sharing ratio of 2 : 1. The Balance Sheet of the firm on 31.3.1996 was as follows :

They admitted C into partnership on this date. The new profit sharing ration is agreed as 3 : 2 : 1.
C brings in proportionate capital after the following adjustments:
i) C brings Rs. 10,000 in cash as his share of goodwill.
ii) Provision for doubtful debts is to be reduced by Rs. 2,400.
iii) There is an old typewriter valued at Rs. 2,600. It does not appear in the books of the firm.
It is now to be recorded.
iv) Patents are now valueless. Prepare Revaluation Account, Capital Accounts and the opening
Balance Sheet of A, B and C. (Marks 12)

OR

A, B and C were partners in a firm and shared profits in the ratio of 3 : 2 : 1. On 31st December, 1996 their Balance Sheet was as follows:

On this date the firm was dissolved. A was appointed to realise the assets. A was to received commission on sale of assets (except cash) and was to bear all expenses of realisation.
A realised the assets as follows:
Debtors Rs. 30,000, Stock Rs. 26,000, Investments 75% of books value, Plants Rs. 42,750. For realisation amounted to Rs. 4,100. Commission received in advance was returned to the customer deducting Rs. 3,000. Firm had to pay Rs. 7,200 for outstanding salary no provided Compensation
paid to employees amounted to Rs. 9,800. This liability was not provided for the Balance Sheet Rs. 25,000 had to be paid for Provident Fund.
Prepare Realisation Account, Capital Accounts and Cash Account.

Q9) XY Ltd. invited applications for issuing 50,000 equity shares of Rs. 10 each.
The amount was payable as follows :
On Application Rs. 3 per share
On Allotment Rs. 4 per share
On First and Final Call Rs. 3 per share
Applications were received for 75,000 shares and pro-rata allotment was made as follows :
Applicants for 40,000 shares were allotted 30,000 shares on pro-rata basis.
Applicants for 35,000 shares were allotted 20,000 shares on pro-rata basis.
Ramu to whom 1,200 shares were allotted out of the group applying for 40,000 shares failed to pay the allotment money. His shares were forfeited immediately after allotment.
Shamu who had applied for 700 shares out of the group applying for 35,000 shares failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares 1,000 shares were re-issued @ Rs. 8 per share fully paid up. The re-issued shares included all the forfeited shares of Shamu.
Pass necessary journal entries to record the above transactions. (Marks 12)


OR

The Balance Sheet of Seema Ltd. disclosed, the following information on 1.1.1995:
 
        15% Debentures                                                     Rs. 15,00,000
        Debenture Redemption Fund                                      Rs. 11,60,000
        15% Debenture Redemption Fund Investment               Rs. 11,60,000
 
The annual contribution to the Debenture Redemption Fund was Rs. 1,30,000 for the year 1995 and 1996. The debentures were redeemable on 31st December, 1996. On 31st December, 1996 the investments were sold for Rs. 13,80,000 and the debentures were redeemed.
Prepare Debenture Account, Debenture Redemption Fund Account and Debenture Redemption Fund Investment Account for the year 1995 and 1996.