Q1) List any two items appearing on the credit side of a partner's capital account, when capitals are fluctuating.  (Marks 2)

Q2) (a) A and B are partners in a firm sharing profits in the ratio of 3 : 2. They had advanced to the firm a sum of Rs. 30,000/- as a loan in their profit sharing ratio on July 1st, 1998. The partnership deed is silent on the question of interest on loan from partners. Compute the interest payable by the firm to the partners, assuming the firm closes its books on December 31st.  (Marks 3)


Q2) (b) A, B and C are partners sharing profits in the ratio of 5 : 4 : 1. C is given a guarantee that his share of profits in any given year would be Rs. 5000/-. Deficiency, if any, would be borne by A and B equally. The profits for the year 1998 amounted to Rs. 40000/-. Pass necessary entries in the books of the firm.  (Marks 3)

Q3) On April 1st, 1998 an existing firm had assets of Rs. 75,000/- including cash of Rs. 5,000/-. The partner's capital account showed a balance of Rs. 60,000/- and reserve constituted the rest. If the normal rate of return is 10% and the goodwill of the firm is valued at Rs. 24,000/- at 4 year purchase of super profits, find the average profits of the firm. 
(Marks 3)

Q4) As a director of a Company you had invited applications for 30,000 equity shares of Rs. 10/- each at a premium of Rs. 2/- each. The total application money received at Rs. 2/- per share was Rs. 72,000/-. Name the kind of subscription. List the three alternatives for allotting these shares.  (Marks 3)

Q5) A limited company has issued Rs. 1,00,000/- 9% Debentures at a discount of 6%. These debentures are to be redeemed equally, spread over 5 annual installments. Show Discount on Issue of Debentures A/C for five years.  (Marks 5)

Q6) A, B and C were partners in a firm. On 1.1.98 their capitals stood at Rs. 50,000/-, Rs. 25,000/- and Rs. 25,000/- respectively. As per the provisions of the partnership deed :
(a) C was entitled for a salary of Rs. 1,500/- pm.
(b) Partners were entitled to interest on capital at 5% p.a.
(c) Profits were to be shared in the ratio of capitals.
The net profit for the year 1998 of Rs. 45,000/- was divided equally without providing for the above terms.
Pass an adjustment entry to rectify the above errors.   (Marks 4)

Q7) A company offered 10,000 shares of Rs. 10/- each payable as Rs. 2/- on application, Rs. 3/- on allotment, Rs. 3/- on first call and Rs. 2/- on final call.
The public applied for 15,000 shares. The shares were allotted on pro-rata basis to the applicants of 12,000 shares. All shareholders paid the allotted money excepting one shareholder who was allotted 200 shares. These shares were forfeited. The first call was made thereafter. The forfeited shares were re-issued @ Rs. 9 per share Rs. 8/- paid up. The final call was not yet made.
You are required to prepare the cash book and pass journal entries.


OR

On 1.1.95 a company issued 10,000 9% debentures of Rs 100/- each at a discount of 5%. The terms of issue provide for redemption of Rs. 1,00,000/- worth Debentures every year commencing from the end of 1996 either by purchasing in the open market or by draw of lots at the company's option. The company also wrote off Rs. 10,000/- during the year 1995 and 1996 from the Debentures Discount Account. During the year 1996 the company purchased 400 debentures @ Rs. 95/- and 500 Debentures @ Rs. 96/- for cancellation. Journalise these transactions and also show how you would deal with the profits on redemption of debentures.  (Marks 10)

Q8) M and N were partners sharing profits in the ratio of 3 : 2. On the date of dissolution their capitals were - M: Rs. 7,650/-, N: Rs. 4,300/-. The creditors amounted to Rs. 27,500/-. The balance cash was Rs. 760/-. The assets realised Rs. 25,430/-, the expenses on dissolution were Rs. 1,540/-. All partners were solvent.
Close the books of the firm, showing the Realisation, Capital and Cash accounts. (Show the working clearly).


OR

Rohit and Bal sharing profits in the ratio of 5 : 3 had following balance Sheet as on December 31,1998:

On January 1st, 1999, they decided to admit Khosla into the partnership giving him 1/5 th share. He brings in Rs. 25,000/- as his share of capital. The partners decide to revalue the assets as follows :
Goodwill Rs. 25,000/-, Plant Rs. 12,500/-, Debtors Rs. 15,500/-, Stock Rs. 16,250/-, Building Rs. 20,000/-, Furniture Rs. 1,000/-, Bills Receivables Rs. 6,250/-. The partners also decided not to show goodwill in the books of the new firm.

You are required to show the journal entries and prepare the Revaluation A/C. (Marks 12)

Q9) The following figures were extracted from the Trial Balance of X Ltd.
Share Capital 10,000 equity shares of Rs. 10/- each fully paid :

You are required to draw up the liabilities side of the Balance Sheet, according to the requirements of the Companies Act.


OR

What is a contingent liability? Where is it shown in the Balance Sheet? Give three examples of contingent liabilities. (Marks 5)