SUGGESTED SOLUTION - J.K. Shah Classes...3 | P a g e Cash @ `20 per share (15,000 shares 20) 3,00,000 Equity shares in Beta Ltd. issued at market price `140 each (15,000 shares `140)

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SUGGESTED SOLUTION

Head Office : Shraddha, 3rd Floor, Near Chinai College, Andheri (E), Mumbai – 69.

Tel : (022) 26836666

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Ans. 1

(a) 1. Calculation of profit / loss for the year ended 31st March, 2014

Particulars (` in crores)

Total estimated cost of construction (1,250 + 250 + 1,750) 3,250

Less: Total contract price (2,400)

Total foreseeable loss to be recognized as expense 850

According to para 35 of AS 7 (Revised 2002) “Construction Contracts”, when it is probable that total contract costs will exceed total contract revenue, the expected loss should be recognized as an expense immediately.

2. Contract work-in-progress i.e. cost incurred to date

Particulars (` in crores)

Work Certified 1,250

Work not certified (250)

1,500

3. Proportion of total contract value recognised as revenue

Percentage of completion of contract to total estimated cost of construction (1,500 / 3,250) 100 46.15% Revenue to be recognized till date = 46.15% of `2,400 crores = `1,107.60 crores.

(b) The economic reality and substance of the transaction is that the rights and beneficial interest in the property has been transferred although legal title has not been transferred. Anil Ltd. should record the sale and recognize the profit of `20 lakhs in its profit and loss account. The building should be eliminated from the balance sheet.

(c) In the books of Rajan Investment Account (Equity shares in Punam Ltd. )

Date Particulars

No. of share

s

Amount (`)

Date Particulars

No. of shares

Amount (`)

1.4.10 To Balance b/d 50,000 7,50,000 5.11.10 By Bank A/c (sale of rights)

(W.N.3) - 20,000

20.6.10 To Bank A/c 10,000 1,60,000 31.3.11 By Balance c/d (Bal. fig.) 90,000 11,90,000

1.8.10 To Bonus issue (W.N.1)

10,000 -

5.11.10 To Bank A/c (right shares) (W.N.4)

20,000 3,00,000

90,000 12,10,000 90,000 12,10,000

Working Notes:

1. Bonus shares

10,000 shares

2. Right shares

30,000 shares

3. Sale of rights

`2 `20,000

4. Rights subscribed

`15 `3,00,000

(d)

calculation of purchase consideration

Particulars ` `

1. Payment made to shareholders of 8,000* preference shares of Alpha Ltd. :

Cash @ `10 per share (8,000 preference shares `10)

Preference shares

80,000

9% Preference shares in Beta Ltd. @ `100 each 8,00,000 8,80,000

2. Payment made to Equity shareholders of 15,000* equity shares of Alpha Ltd. :

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Cash @ `20 per share (15,000 shares `20) 3,00,000

Equity shares in Beta Ltd. issued at market price `140 each (15,000 shares `140)

21,00,000

24,00,000

Total purchase consideration 32,80,000 Note: Re-imbursement of liquidation expenses of Alpha Ltd. to the extent of `10,000, will not be included in the calculation of purchase consideration.

Ans. 2 In the books of Mr. Shivam

Trading & Profit & Loss A/c (year Ended 31.03.03)

Particulars Amount (`) Particulars Amount (`)

To Opening Stock a/c (Balancing figure)

80,000 By Sales a/c Cash 80,000

To Purchases Cash 48,000 Credit 3,20,000 4,00,000

Credit 1,92,000 2,40,000 By Closing stock a/c 40,000

To Gross Profit c/d

(4,00,000 30%)

1,20,000

Total 4,40,000 Total 4,40,000

To Loss on Sale of furniture a/c

11,000 By Gross Profit b/d 1,20,000

To Depreciation a/c 59,800 By Misc. Income a/c 20,000

To Bed debts a/c 8,000 By Net Loss a/c 25,840

To Expenses a/c 82,000

To Provision for Bad Debt a/c 5,040

1,65,840 1,65,840

Balance sheet as on 31.03.03

Liabilities & Capital Amount (`) Assets Amount (`)

Capital : 7,16,000 Building 3,60,000

Drawings 0 7,16,000 Depreciation 36,000 3,24,000

*Profit & Loss a/c Furniture 68,000

Opening Balance 40,000 Depreciation 6,800 61,200

Loss 25,840 14,160 Motor Car 80,000

Creditors 1,12,000 Depreciation 16,000 64,000

Bills Payable 16,000 Stock 40,000

Salary outstanding 10,000 Cash 1,04,000

Bills Receivable 28,000

Debtors 2,52,000

RDD 5,040 2,46,960

8,68,160 8,68,160

*Alternatively profit & loss account can be clubbed with capital account.

Working Note:

Debtors a/c


To Opening Balance a/c 1,60,000 By Bank a/c 2,00,000

To Sales a/c 3,20,000 By Bills Receivable a/c 20,000

By Bad debts a/c 8,000

By Closing Balance 2,52,000

4,80,000 4,80,000

Creditors a/c


To Cash a/c 1,84,000 By Opening Balance a/c 1,20,000

To Bills Payable a/c 16,000 By Purchases a/c 1,92,000

To Closing Balance 1,12,000

3,12,000 3,12,000

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Cash a/c


To Opening Balance a/c 1,80,000 By Expenses a/c 80,000

To Misc. Income a/c 20,000 By Purchases a/c 48,000

To Debtors a/c 2,00,000 By Creditors a/c 1,84,000

To Sales a/c 80,000 By Furniture a/c 28,000

To Furniture a/c 8,000 By Building a/c 40,000

To Bill Receivable a/c 24,000 By Bills Payable a/c 28,000

By Closing Balance a/c 1,04,000

5,12,000 5,12,000

Bills Payable a/c


To Cash (Honoured) 28,000 By Opening Balance a/c 28,000

To Closing Balance 16,000 By Creditor a/c 16,000

44,000 44,000

Bills Receivable a/c


To Opening Balance a/c 32,000 By Cash a/c (Bal. Figure.) 24,000

To Debtors a/c 20,000 By Closing Balance 28,000

52,000 52,000

Expenses a/c


To Cash a/c 80,000 By Opening balance 8,000

To Closing balance 10,000 By Profit & Loss a/c 82,000

90,000 90,000

Building a/c


To Opening Balance a/c 3,20,000 By Closing Balance 3,60,000

To Cash a/c 40,000

3,60,000 3,60,000

Furniture a/c


To Opening Balance a/c 60,000 By Cash a/c 8,000

To Cash a/c 28,000 By Depreciations a/c 1,000

By Loss on sale (transfer to Profit & Loss a/c)

11,000

By Closing Balance 68,000

88,000 88,000

Opening Balance sheet (As on 31.03.2002)

Liabilities & Capital Amount (`) Assets Amount (`)

Bills Payable 28,000 Building 3,20,000

Creditors 1,20,000 Furniture 60,000

Salary o/s 8,000 Motor Car 80,000

Profit & Loss Balance 40,000 Stock 80,000

Capital (Balancing figure) 7,16,000 Cash /Bank 1,80,000

Sundry Debtors 1,60,000

Bills Receivable 32,000

9,12,000 9,12,000

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Ans. 3

Revaluation A/c


To Stock 60,000 By Land & building 1,00,000

To Provision for doubtful debts 5,000 By Investments 5,000

To Profit transferred to

Ajay’s capital a/c 24,000

Vijay’s capital a/c 16,000

1,05,000 1,05,000

Partner’s Capital Account

Particulars Ajay (`)

Vijay (`)

Mitesh (`)

Particulars Ajay (`)

Vijay (`)

Mitesh (`)

To Bank A/c (Goodwill Withdrawn)

60,000 30,000 - By Balance b/d 1,76,000 2,54,000 -

To Balance c/d (Adjusted capital 10,00,000 in 4:3:3)

4,00,000 3,00,000 3,00,000 By Mitesh’s Loan A/c

- - 3,00,000

By Bank A/c (W.N. 2)

60,000 30,000

By Revaluation A/c

24,000 16,000 -

By General Reserve

18,000 12,000 -

By Bank (Balancing figure)

1,82,000 18,000 -

4,60,000 3,30,000 3,00,000 4,60,000 3,30,000 3,00,000

Balance Sheet as on 1st April, 2011 (after admission of a new partner- Mitesh)

Liabilities & Capital Amount (`)

Assets Amount (`)

Capital accounts Land and building (3,20,000 1,00,000)

4,20,000

Ajay 4,00,000 Investments 55,000

Vijay 3,00,000 Debtors 3,00,000

Mitesh 3,00,000 10,00,000 Less: Provision for doubtful debt (15,000)

2,85,000

Creditors 50,000 Stock (1,10,000 – 60,000) 50,000

Employers’ provident fund 10,000 Cash at bank (W.N. 3) 2,50,000

10,60,000 10,60,000

Working Notes : 1. Calculation of incoming partner’s share, new profit sharing ratio and sacrificing ratio

Particulars Ajay Vijay

Old profit sharing ratio 3/5 2/5

Surrendered by old partners to Mitesh 3/5 1/3 1/5 2/5 ⁄ 1/10

3/5 1/5 2/5 2/5 ⁄ 3/10

Mitesh’s total share in profits 1/5 1/10 3/10

New profit sharing ratio of Ajay : Vijat : Mitesh 2/5 : 3/10 : 3/10 4 : 3 : 3

Sacrificing ratio of Ajay : Vijay is 1/5 : 1/10 :or 2 : 1

2. Calculation of share of goodwill by old partners.

Goodwill of the firm was `3,00,000

Share of Mitesh in goodwill `3,00,000

`90,000

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Goodwill will be distributed among the old partners in their sacrificing ratio of 2:1 i.e. `60,000 by Ajay and `30,000 by Vijay. Goodwill is contributed by Mitesh in cash which is credited to sacrificing partner and the same is withdrawn by Ajay & Vijay

3. Calculation of closing balance of bank account after admission

Bank A/c


To Balance b/d 50,000 By Ajay’s capital A/c 60,000

To Ajay & Vijay A/c 90,000 By Vijay’s capital A/c 30,000

To Vijay’s capital A/c 18,000 By Balance c/d 2,50,000

To Ajay’s capital A/c 1,82,000

3,40,000 3,40,000

Ans. 4

Books of Tarun Ltd. Journal Entries

Particulars Dr. (`) Cr. (`)

1. Business Purchase A/c Dr. 9,000

To Liquidator of Varun Ltd. 9,000

(Being business of Varun Ltd. taken over for consideration settled as per agreement)

2. Plant and Machinery Dr. 5,000

Furniture & Fittings Dr. 1,700

Stock Dr. 4,041

Debtors Dr. 1,020

Cash at Bank Dr. 609

Bills Receivable Dr. 80

To Foreign Project Reserve 310

To General Reserve (3,200 3,000) 200

To Profit and Loss A/c (825 50) 775

To 12% Debentures 1,000

To Sundry Creditors 463

To Sundry Provisions 702

To Business Purchase 9,000

(Being assets & liabilities taken over from Varun Ltd.)

3. Liquidator of Varun Ltd. A/c Dr. 9,000

To Equity Share Capital A/c 9,000

(Purchase consideration discharged in the form of equity shares)

4. General Reserve A/c Dr. 1

To Bank A/c 1

(Liquidation expenses paid by Tarun Ltd.)

5. 12% Debentures A/c Dr. 1,000

To 13% Debentures A/c 1,000

(12% debentures discharged by issue of 13% debentures)

6. Bills Payable A/c Dr. 80

To Bills Receivable A/c 80

(Cancellation of mutual owing on account of bills)

Balance Sheet of Tarun Ltd. as at 1st April, 2012 (after merger)

Particulars Notes ` (in lakhs)

Equity and Liabilities

1. Shareholders' funds 1 24,000

Share capital 2 16,654

Reserves and Surplus 2. Non-current liabilities 3 1,000

Long-term borrowings 3. Current liabilities 4 1,583

Trade Payables (1,543 + 40) 2,532

Short-term provisions

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Total 45,769

Assets 1. Non-current assets

Fixed assets 29,004

Tangible assets 2. Current assets

Inventories 11,903

Trade receivables 3,140

Cash and cash equivalents 1,722 Total 45,769

Notes to accounts

Particulars Amount (`)

1. Share Capital Equity share capital Authorised, issued, subscribed and paid up 24 crores equity shares of `10 each (Of the above shares, 9 crores shares have been issued for consideration other than cash)

24,000

Total 24,000

2. Reserves and Surplus

General Reserve 9,699

Securities Premium 3,000 Foreign Project Reserve 310

Surplus (Profit and Loss Account) 3,645

Total 16,654

3. Long-term borrowings

Secured

13% Debentures 1,000

4. Tangible assets

Land & Buildings 6,000

Plant & Machinery 19,000 Furniture & Fittings 4,004

Total 29,004

Working Note: Computation of purchase consideration The purchase consideration was discharged in the form of three equity shares of Tarun Ltd. for every two equity shares held in Varun Ltd.

Purchase consideration ` 6,000 lacs

`9,000 lacs.

Note: The question is silent regarding the treatment of fictitious assets and therefore they are not transferred to the amalgamated company. Thus the cost of issue of debentures shown in the balance sheet of the Varun Ltd. company is not transferred to the Tarun Ltd. company.

Ans. 5

(a) Cash Flow Statement (Indirect method)

Particulars Amount (`) Amount (`)

(A) Cash flow from operating activity

Profit before Tax 3,70,000

Add back : Depreciation 1,25,000

Less : Profit on sale of Machinery (15,000)

Operating Profit 4,80,000

Decrease in Creditor (1,20,000)

Increase in stock (2,00,000)

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Decrease in Debtors 2,00,000

Cash from operation before tax 3,60,000

Tax Paid (50,000) 3,10,000

(B) Cash flow from Investing activity

Building construction (2,00,000)

Investment purchased (1,00,000)

Sale of Machinery 35,000

Machinery purchase (3,45,000) (6,10,000)

(C) Cash flow from financing activity

Share Capital issue 2,00,000

Debenture issue 2,00,000

Dividend paid (1,00,000) 3,00,000

Increase/Decrease in during the year Nil

Opening Balance of cash 2,00,000

Closing Balance of cash 2,00,000

Working Notes :

Plant & Machinery A/c


To Opening Balance 5,00,000 By Cash Bank A/c 35,000

To Profit on sale of machine A/c

15,000 By Depreciations A/c (5,00,000 25%)

1,25,000

To Cash/ Bank A/c (Balance figure)

3,45,000 By Closing Balance 7,00,000

8,60,000 8,60,000

Tax payable A/c


To Cash / Bank A/c 50,000 By Opening Balance b/d 70,000

To Closing Balance c/f 1,00,000 By Tax for the year (transfer to P & L A/c)

80,000

1,50,000 1,50,000

Profit and Loss A/c


To General Reserve A/c 50,000 By Opening Balance b/d 60,000

To Proposed dividend A/c 2,00,000 By Profit Before Tax (Balancing figure)

3,70,000

To Tax A/c 80,000

To Closing Balance c/f 1,00,000

4,30,000 4,30,000

In this Accounts wherever Cash/Bank a/c is appearing that means either it is receipt or payment and the same will appear in Cash Flow Statement.

(b) Trading Account (1.1.2010 to 31.12.2010)


To Opening stock a/c 20,000 By Sale a/c 60,000

To Purchases a/c 40,000 By Closing stock a/c 30,000

To Gross profit a/c (Balancing figure)

30,000

90,000 90,000

Gross profit ratio

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Trading Account (1.1.2011 to 15.9.2011)


To Opening stock a/c 30,000 By Sale (1,05,000 100/105)a/c

1,00,000

To Purchases (88,000 100/110) a/c

80,000 By Stock on the date of fire (balance figure) a/c

60,000

To Gross profit (50% of 1,00,000)

50,000

1,60,000 1,60,000

Statement of claim:

Stock at 2010 price 60,000

10% price rise 6,000

Stock at 2011 prices 66,000

Salvage value 2,000

Loss by fire 64,000

Claim 64,000

Average clause:

Claim Loss suffered Insurance value Total cost Policy amount is not given, hence average clause is not applicable. If policy is for 66,000 or more, then average clause will not be applicable. If policy is for less than 66,000 then average clause will apply because, it is a case of under insurance. If policy is for 50,000, then claim 64,000 50,000 66,000 48,485. Instead of 66,000, 50,000 is instead of giving 64,000 as claim, the company will give proportionate claim.

Ans. 6 (a)

Reserves to be capitalised / Total amount of bonus shares issued

Share premium 60,000

Capital redemption reserve 70,000

General reserve 1,00,000

Profit & Loss A/c 50,000 2,80,000

Less : To be utilised for converting partly paid shares into fully

paid (4,000 20) 80,000

Balance to be utilised for issue of fully paid shares (at issue price of `125)

2,00,000

No. of Bonus shares

1600 bonus shares will be allocated to the holder of 4000 shares i.e. 16 Bonus Shares to the holder of 40 shares or 4 bonus shares to be holder of 10 shares (4 : 10 or 2 : 5)

Journal entry


Conversion of Partly paid shares into fully paid by way of bonus.

1. General reserve A/c Dr. 80,000

To Bonus to Share holder A/c 80,000

(Reserve appropriated for bonus)

2. Final call A/c Dr. 80,000

To Share Capital A/c 80,000

(Final call due)

3. Bonus to Shareholder A/c Dr. 80,000

To Final Call A/c 80,000

(Final call adjusted against bonus due)

Issue of Fully paid bonus shares:

4. Capital redemption reserves A/c Dr. 70,000

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Share premium A/c Dr. 60,000

General reserve A/c Dr. 20,000

Profit & Loss A/c Dr. 50,000

To Bonus to shareholder A/c 2,00,000

(Reserves appropriated for bonus issue)

5. Bonus to Shareholder A/c Dr. 2,00,000

To Equity share capital A/c 1,60,000

To Share premium A/c 40,000

(Bonus shares allotted at a premium)

(b)

Parikh Pvt. Ltd. Draft Trading and Profit & Loss Account for the year ending 31st March, 2012


To Opening Stock 8,600 By Sales 55,600

To Purchase 37,800 By Closing Stock 8,800

To Gross Profit c/d

April – June 4,800

July – March 13,200 18,000

64,000 64,000

Particulars April – June `

July – March `

Particulars April –June `

July – March `

To Office Salaries & Expenses (Time basis)

1,050 3,150 By Gross Profit b/d (sales basis)

4,800 13,200

To Rent & Taxes (Time basis)

600 1,800

To Carriage outward (sales basis)

176 484

To Travelers’ Commission (sales basis)

400 1,100

To Preliminary Expenses

1,040

To Directors’ fees 3,600

To Pre-incorporation profit transferred to capital reserve

2,574*

To Net profit 2,026*

4,800 13,200 4,800 13,200

Working Notes: 1. Ratio for apportioning gross profit:

Suppose, sales for the months of April 2011, February, 2012 and March 2012 is 2 and for other months 1 per month. Then, Sales for April, May & June (2+1+1)= 4 Sales for July 2011 to March 2012 [(1x7) + (2x2)] = 11 This gives the ratio of 4:11; this ratio has been used for apportioning gross profit and expenses related to sales.

2. Rent and Rates have been divided on time basis which is 3:9 or 1 : 3.

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Ans. 7

(a) In modern time, computerized accounting systems are used in various areas. The significance of the computerized accounting system is as follows: 1. Increase speed, accuracy and security – In computerized accounting system, the speed

with which accounts can be maintained is several fold higher. Besides speed, level of accuracy is also high in computerized accounting system.

2. Reduce errors – In computerized accounting, the possibilities of errors are also very less unless some mistake is made while recording the data.

3. Immediate information – In this system, with an entry of a transaction, corresponding ledger posting is done automatically. Hence, trial balance will also be automatically tallied and the user will get the information immediately.

4. Avoid duplication of work – Computerized accounting systems also remove the duplication of the work.

(b)

General Ledger Adjustment Account in Debtors Ledger

Date Particulars ` Date Particulars `

01.04.2012 To Balance b/d 9,400 1.4.2012 By Balance b/d 3,58,200

01.04.2012 to 30.4.2012

To Debtors ledger adjustment A/c:

01.04.2012 to 30.4.2012

By Debtors ledger adjustment A/c:

Cash received 17,25,700 30.4.2012 Credit sales 19,95,400

Sales Returns 33,100 Cash paid for returns 6,000

Bills receivable received

95,000 Bill receivable dishonoured

7,500

Transfer to creditors ledger

16,000 30.04.2012 By Balance c/d 9,800

30.04.2012 To Balance c/d (balancing figure)

4,97,700

23,76,900 23,76,900

Note: 1. Cash sales `1,00,000 will not affect debtors a/c and hence will not come in above control a/c.

(c) Raj’s in Account current with Jay for the period 1.1.2011 to 30.6.2011

Date Particulars ` Due date

Days Product Date Particulars ` Due date

Days Product

1.1 To Balance b/d

602 1.1 0 - 16.2 By Purchase a/c

1,296 1.4 91 1,17,936

17.1 To Sales 884 17.1 17 15,028 24.3 By Purchase a/c

712 1.5 121 86,152

18.2 To Purchase return

112 1.4 91 10,192 22.6 By Purchase a/c

456 1.8 213 97,128

22.4 To Bills payable

300 25.7 206 61,800 30.6 By Balance c/d

476 30.6 181 86,156

19.4 To Cash a/c

500 29.4 119 59,500

17.5 To Sales a/c

542 1.6 152 82,384

2,940 2,28,904 2,940 3,87,372

30.6 To Balance b/d

476

To Interest a/c

65 30.6 By Balance c/f

541

541 541

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Interest recoverable an 3,87,372 – 2,28,904 1,58,468

Interest 1,58,468

`65

Note: You must have noted that in this case balance before interest is also required to be worked out at the end of the period, product on same is also calculated for 181 days i.e. 1.1.2011 to 30.6.2011.

(d) Calculation of cost of fixed assets

Particulars Amount (`)

Materials 16,00,000

Direct Expenses 3,00,000

Direct labour (1/15th of `6,00,000) 40,000

Office and administrative expenses (4% `9,00,000) 36,000

Depreciation on assets 15,000

Cost of fixed asset 19,91,000

Note: It is stated that 4% of office and administrative expenses are chargeable to construction hence added to fixed asset.

(e) Journal Entries


1. Equity Share Capital A/c Dr. 20,00,000

To Equity Stock A/c 1,00,000

To 12% Convertible Debentures A/c 19,00,000

2. `2.50 Equity Share Capital A/c Dr. 1,00,00,000

To `10 Equity Share Capital A/c 1,00,00,000

3. `50 11% Preference Share Capital A/c Dr. 5,00,00,000

To `10.11% Preference Share Capital A/c 5,00,00,000

4. 12% Preference Share Capital A/c Dr. 5,00,000

To 14% Preference Share Capital A/c 3,00,000

To 12% Non-cumulative Preference Share Capital A/c

2,00,000

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MARKS ALLOCATION SHEET

Que. No.

Sub point No.(if any)

Name of Chapter Description of Concept Mark Allocation

Total Marks

1 A AS-7 Calculation of profit or loss 2

1 A AS-7 Calculation of cost incurred 1

1 A AS-7 Calculation of total contract value recognised

2 5

1 B AS-9 Provision 2

1 B AS-9 Conclusion 3 5

1 C Investment A/c Preparation of investment a/c 3

1 C Investment A/c Calculation of bonus shares 0.5

1 C Investment A/c Calculation of right shares 0.5

1 C Investment A/c Calculation of sale of rights 0.5

1 C Investment A/c Calculation of right subscribed 0.5 5

1 D Amalgamation Calculation of payment made to preference share holder

2.5

1 D Amalgamation Calculation of payment to equity shares holders

2.5 5

2 Single entry Preparation of trading and profit & loss a/c

3

2 Single entry Preparation of balance sheet 3

2 Single entry Preparation of debtors a/c 1

2 Single entry Preparation of creditors a/c 1

2 Single entry Preparation of cash a/c 2

2 Single entry Preparation of bill payable a/c 1

2 Single entry Preparation of bills receivable a/c 1

2 Single entry Preparation of expenses a/c 1

2 Single entry Preparation of building a/c 1

2 Single entry Preparation of furniture a/c 1

2 Single entry Preparation of opening Balance Sheet 1 16

3 Partnership accounts

Preparation of revaluation a/c 3


Preparation of capital a/c 3


Preparation of balance sheet 4


Calculation of incoming partner’s share 2


Calculation of share of Goodwill 2


Calculation of cr. Bal. of Bank after admission

2 16

4 Amalgamation Journal entry for take over 2

4 Amalgamation Other journal entries (each has 1 marks) 5

4 Amalgamation Preparation of balance sheet 4

4 Amalgamation Preparation of notes to a/c (each has 1 mark)

4

4 Amalgamation Calculation of purchase consideration 1 16

5 A Cash flow statement

Calculation of cash from operating activities

3


Calculation of cash from investing activities

2


Calculation of cash from Financing activities

2


Preparation of plant & machinery a/c 1


Preparation of tax payable a/c 1

5 A Cash flow Preparation of profit & loss a/c 1 10

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statement

5 B Insurance claim Preparation of trading a/c (1-1-2010 to 31-12-2010)

1.5

5 B Insurance claim Preparation of trading a/c (1-1-2011 to 15-9-2011)

1.5

5 B Insurance claim Calculation of claim 2

5 B Insurance claim Average clause 1 6

6 A Accounting for Bonus shares

Calculation of no. of shares to be issued

3

6 A Accounting for Bonus shares

Journal entries (each has 1 mark) 5 8

6 B Profit prior to incorporation

Calculation of sales ratio 2


Calculation of GP 2


Calculation of Net Profit 4 8

7 A Accounting in computerised environment

Four points of significance (each has 1 mark)

4 4

7 B Self Balancing ledger

Preparation of general ledger adjustment a/c

4 4

7 C Account current Preparation of account current 3

7 C Account current Calculation of interest 1 4

7 D AS- 10 Calculation of cost of fixed asset 4 4

7 E Shares Journal entries (each has 1 mark) 4 4

Documents

SUGGESTED SOLUTION - J.K. Shah Classes...3 | P a g e Cash @ `20 per share (15,000 shares 20) 3,00,000 Equity shares in Beta Ltd. issued at market price `140 each (15,000 shares `140)