Cash Flow from Financing Activities

1. added
2. deducted
3. multiplied
4. not treated

Ram and Shyam were partners in a firm sharing profits in the ratio of 2 : 3 respectively. They become old and no one was there to look after their business. Therefore, they decided to dissolve the business and donate the amount available to a NGO who is providing service for growing trees in urban areas to control pollution. On 31st January, 2014 their Balance Sheet was as follows :

BALANCE SHEET

as on 31st January, 2014

$\begin{array}{cccc}\text{Liabilities}& \text{Amount}& \text{Assets}& \text{Amount}\\ & \left(\text{Rs}\right)& & \left(\text{Rs}\right)\\ \text{Creditor}& 65,000& \text{Land}& 1,20,000\\ \text{Bills Payable}& 35,000& \text{Machinery}& 65,000\\ \text{Capitals:}& & \text{Goodwill}& 10,000\\ \text{Ram}& 75,000& \text{Stock}& 25,000\\ \text{Shyam}& 75,000& \text{Debtors}& 20,000\\ & & \text{Cash}& 10,000\\ & \overline{2,50,000}& & \overline{2,50,000}\end{array}$

Ram paid the creditors at a discount of 15$\%$ and Shyam paid bills payable in full. Assets realised as follows : Land at 20$\%$ less, Machinery Rs 35, 000. Stock at 25$\%$ less and Debtors Rs 12, 500. Expenses on realisation Rs 1, 750 were paid by Shyam. Prepare Realisation Account, Partner's Capital Accounts and Bank Account.

OR

Alfa and Beta were partners in a firm. They were trading in artifical limbs. On 1st April, 2013 they admitted Gama, a good friend of Beta into the partnership. Gama lost his one hand in an accident and Alfa and Beta decided to give one artifical hand free of cost to Gama. The Balance Sheet of Alfa and Beta, as on 31st March, 2014 was as follows :

BALANCE SHEET OF ALFA AND BETA

As on 31st March, 2013

$\begin{array}{cccc}\text{Liabilities}& \text{Amount}& \text{Assets}& \text{Amount}\\ & \left(\text{Rs}\right)& & \left(\text{Rs}\right)\\ \text{Provision for Doubtful Debts}& 40,000& \text{Cash}& 1,00,000\\ \text{Workmen's Compensation Fund}& 56,000& \text{Sundry Debtors}& 8,00,000\\ \text{Outstanding Expenses}& 30,000& \text{Stock}& 2,00,000\\ \text{Creditors}& 3,00,000& \text{Machinery}& 3,86,000\\ \text{Capitals:}& & \text{Profit and Loss A/c}& 40,000\\ \text{Alfa}5,00,000& & & \\ \text{Beta}\underset{–}{6,00,000}& \underset{–}{11,00,000}& & \\ & 15,26,000& & \overline{15,26,000}\end{array}$

Gama was admitted in the firm on the following terms :

(i) Gama will bring in Rs 4, 00, 000 as his share of capital, but he was unable to bring any amount for goodwill.

(ii) The new profit sharing ratio between Alfa, Beta and Gama will be 3 : 2 : 1.

(iii) Claim on account of workmen's compensation was Rs 30, 000.

(iv) To write off bad debts amounting Rs 40, 000

(v) Creditors were paid Rs 20, 000 more.

(vi) Outstanding expenses be brought down to Rs 12, 000.

(vii) Rs 20, 000 be provided for an unforeseen liability.

(viii) Goodwill of the firm was valued at Rs 1, 80, 000.

Prepare Revaluation Account, Capital Accounts of Partners and the operating Balance Sheet of the new firm.

Prepare a Cash Flow Statement from the following Balance Sheet (Revised) :

$\begin{array}{cccc}\text{Particulars}& \text{Note}& 31-03-2013& 31-03-2012\\ & \text{No.}& \text{Amount(Rs)}& \text{Amount(Rs)}\\ 1.\text{Equity and Liabilities}& & & \\ \left(1\right)\text{Shareholder's Funds :}& & & \\ \left(a\right)\text{Share Capital}& & 6,30,000& 5,60,000\\ \left(b\right)\text{Reserves and Surplus}& 1& 3,08,000& 1,82,000\\ \left(2\right)\text{Current Liabilities}& & & \\ \text{Trade Payables}& & 2,80,000& 1,82,000\\ \text{Total}& & 12,18,000& 9,24,000\\ \text{II. Assets}& & & \\ \left(1\right)\text{Non-current Assets}:& & & \\ \left(a\right)\text{Fixed Assets}:& & & \\ \text{Tangible Assets - Plant}& & 3,92,000& 2,80,000\\ \left(2\right)\text{Current Assets}:& & & \\ \left(a\right)\text{Inventories}& & 98,000& 1,40,000\\ \left(b\right)\text{Trade Receivables}& & 6,30,000& 4,20,000\\ \left(c\right)\text{Cash and Cash Equivalents}& & 98,000& 84,000\\ \text{Total}& & 12,18,000& 9,24,000\end{array}$

$\begin{array}{ccc}\text{Particulars}& 31-03-2013& 31-03-2012\\ & \text{Amount(Rs)}& \text{Amount(Rs)}\\ \text{Reserves and Surplus}& & \\ \text{Surplus (Balance in statement of P and L)}& 3,08,000& 1,82,000\end{array}$

Additional Information : (i) An old machinery having book value of Rs 42, 000 was sold for Rs 56, 000. (ii) Depreciation provided on machinery during the year was Rs 28, 000.

1. investing
2. inflow
3. financing
4. outflow

A company had Rs 10, 00, 000, $12\%$ Debentures outstanding as on 1st April 2017. During the year company took a loan of Rs 2, 00, 000 from the State Bank of India for which the Company placed with the bank debentures for Rs 2, 50, 000 as Collateral Security. Pass journal entries, if any. Also show how the debentures and Bank Loan will appear in the company's Balance Sheet as at 31st March 2018.

Following is the Balance Sheet of A, B and C as at 31st March, 2011. They shared profits in the ratio of 2 : 2 : 1.

$\begin{array}{cccccc}\text{Capital and Liabilities}& & \text{Rs}& \text{Assets}& & \text{Rs}\\ \text{Sundry Creditors}& & 5,00,000& \text{Cash at Bank}& & 10,000\\ \text{General Reserve}& & 2,50,000& \text{Debtors}& 6,00,000& \\ \text{Partners Loan A/cs :}& & & \text{Less : Provision for}& & \\ \text{B}& 1,80,000& & \text{Doubtful Debts}& \underset{–}{(25,000)}& 5,75,000\\ \text{C}& \underset{–}{1,20,000}& 3,00,000& \text{Stock}& & 3,40,000\\ \text{Capital A/cs :}& & & \text{Land}\&\text{Buildings}& & 10,00,000\\ \text{A}& 5,00,000& & \text{Advertisement Suspense A/c}& & 60,000\\ \text{B}& 3,00,000& & \text{Profit and Loss A/c}& & 15,000\\ \text{C}& \underset{–}{1,50,000}& 9,50,000& & & \\ & & \overline{\underset{–}{\underset{–}{20,00,000}}}& & & \overline{\underset{–}{\underset{–}{20,00,000}}}\end{array}$

B retires on 1st April, 2011 on the following terms :

(i) Stock is overvalued by Rs 20, 000 and land & buildings are undervalued by Rs 1, 00, 000.

(ii) Provision for doubtful debts is to be increased to Rs 30, 000.

(iii) Old credit balances of Sundry Creditors Rs 40, 000 be written off.

(iv) A computer purchased on 1st October, 2010 for Rs 50, 000 debited to Office Expenses Account is to be brought into account charging depreciation @ 20% p.a.

(v) Goodwill of the firm is valued at Rs 1, 50, 000 and the amount due to B be adjusted in the capital accounts of A and C.

Prepare the Revaluation Account, Capital Accounts and the new Balance Sheet.

Prepare a common size Balance Sheet and comment on the financial position of G Ltd. and L Ltd. The Balance Sheet of G Ltd. and L Ltd. as at 31.03.2018 are given below :

$\begin{array}{cccc}\text{Particulars}& \text{Note}& \text{G.Ltd}& \text{L. Ltd}\\ & \text{No.}& & \\ \text{I. EQUITY AND LIABILITIES:}& & \text{Rs}& \text{Rs}\\ \text{(1) Shareholder's Funds}& & 3,00,000& 4,00,000\\ \text{(2) Non-Current Liabilities}& & 2,00,000& 3,00,000\\ \text{(3) Current Liabilities}& & \underset{–}{1,00,000}& \underset{–}{50,000}\\ \text{TOTAL}& & \underset{–}{\underset{–}{6,00,000}}& \underset{–}{\underset{–}{7,50,000}}\\ \text{II. ASSETS:}& & & \\ \text{(1) Non-Current Assets}& & & \\ \text{(i) Tangible Assets}& & 2,50,000& 3,00,000\\ \text{(ii) Intangible Assets}& & 1,50,000& 1,00,000\\ \text{(2) Current Assets}& & 2,00,000& 3,50,000\\ \text{TOTAL}& & \overline{\underset{–}{\underset{–}{6,00,000}}}& \overline{\underset{–}{\underset{–}{7,50,000}}}\end{array}$

State the Two Situations Under Which Interest on Capital Is Generally Provided.

ABC Ltd, is registered with an authorised capital of Rs 50, 00, 000 divided into shares of Rs 10 each. It offered to the public for subscription 2, 50, 000 shares at a premium of Rs 4 each. Public applied for the shares and the issue was oversubscribed to the extent of 2, 50, 000 shares. Excess application money was to be utilised towards sum dues on allotment only. Money paid on application as Rs 2, Money paid on allotment Rs 5 and balance on first and final call. Shares were subscribed as follows:

$\begin{array}{ccc}\text{Category}& \text{Shares Allottled}& \text{Basis}\\ 1.& 50,000& \text{Full}\\ 2.& 1,00,000& \text{1/2 of shares applied for}\\ 3.& 1,00,000& 250\%\text{of shares applied for}\end{array}$

Mr. Ravi who has 1, 000 shares and who belonged to category 2 failed to pay call amount, his shares were immediately forfeited. Mr. Ayush who has applied for 10, 000 shares and belongs to 3rd category failed to pay his arrears on call stage. Out of the forfeited shares 2, 000 shares were re-issued to Ms. Pankhuri for Rs 12 each. Forfeited shares include whole of Mr. Ravi's shares. Pass necessary Journal entries.

OR

Pass the necessary Jouranl entries.

(a) A company forfeited 200 shares of Rs 20 each, Rs 15 per share called up on which Rs 10 per share had been paid. Director reissued all the forfeited shares to B as Rs 15 per share paid up for a payment of Rs 10 each . Give Journal entries in the books of the company for forfeiture and reissue of shares.

(b) A Ltd. forfeited 100 equity shares of the face value of Rs 10 each, for the non-payment of first call of Rs 2 per share. Rs 6 per share had already been called and paid. These shares were subsequently re-issued as fully paid at the rate of Rs 7 per share. Give Journal entries in the books of the company for forfeiture and reissue of shares.

Cash proceeds from issue of debentures, loans, bonds and other short/ long-term borrowings will result in cash ___ from financing activities.

1. Inflow

2. Outflow

3. None of these

4. Either inflow or outflow

The following was the Balance Sheet of Anurag and Bhawna, who were sharing profits in the ratio of $\frac{2}{3}$ and $\frac{1}{3}$ as at 31st March, 2017:-

$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Rs}& \text{Assets}& \text{Rs}\\ \text{Creditors}& 65,900& \text{Cash}& 1,200\\ \text{Capitals:}& & \text{Sundry Debtors}& 9,700\\ \text{Anurag}& 30,000& \text{Stock}& 20,000\\ \text{Bhawna}& 20,000& \text{Plant \& Machinery}& 35,000\\ & & \text{Building}& 50,000\\ & \underset{–}{\overline{1,15,900}}& & \underset{–}{\overline{1,15,900}}\end{array}$

On 1st April, 2017 they agreed to admit Monika into partnership on the following terms: -

(a) Monika was to be given $\frac{1}{3}$ share in profits, and was to bring Rs 15, 000 as capital and Rs 6, 000 as share of goodwill.

(b) That the value of stock and plant it & machinery were to be reduced by 10%.

(c) That a provision of 5% was to be created for doubtful debts.

(d) That the building account was to be appreciated by 20%.

(e) Investments worth Rs 1, 400 (not mentioned in the Balance Sheet) were to be taken into account.

(f) That the amount of goodwill was to be withdrawn by the old partners.

Pass necessary journal entries and prepare the Revaluation A/c, Capital Accounts and the Opening Balance Sheet of the new firm.

Divya and Pooja are partners in a firm, sharing profits and losses in the ratio of 3:2. On 31st March 2015, their Balance Sheet was as under:

BALANCE SHEET OF DIVYA AND POOJA

as at 31st March, 2015

$\begin{array}{cccc}\text{Capital and Liabilites}& \text{Rs}& \text{Assets}& \text{Rs}\\ \text{Sundry Creditors}& 9,800& \text{Goodwill}& 16,000\\ \text{General Reserve}& 23,400& \text{Land and Building}& 20,000\\ \text{Profit and Loss A/c}& 4,000& \text{Investments}& 66,000\\ \text{Investment Fluctuation Fund}& 12,600& \text{Sundry Debtors}& 18,600\\ \text{Capital A/cs:}& & \text{Bils Receivables}& 7,400\\ \text{Divya}60,000& & \text{Cash in Hand}& 11,100\\ \text{Pooja}\underset{–}{40,000}& 1,00,000& \text{Advertisement Suspense A/c}& 10,700\\ & \underset{–}{\overline{1,49,800}}& & \underset{–}{\overline{1,49,800}}\end{array}$

The partners decided that with effect from 1st April, 2015, they would share profits and losses equally.

For this purpose, they decided that:

(a) Investments to be valued at Rs 60, 000

(b) Goodwill to be valued at Rs 24, 000

(c) General Reserve not be distributed between the partners.

You are required to:

(i) Pass journal entries

(ii) Prepare the revised Balance Sheet of the firm.

Priya, Karam and Anna were partners of a firm sharing profits in the ratio of 3 : 2 : 1. Their Balance Sheet on 31st March, 2014 was as follows :

$\begin{array}{ccccc}\text{Capital and Liabilities}& & \text{Rs}& \text{Assets}& \text{(Rs)}\\ \text{Bills Payable}& & 1,20,000& \text{Cash in Hand}& 20,000\\ \text{Creditors}& & 1,40,000& \text{Debtors}& 1,40,000\\ \text{Karam's Loan at}5\%& & 1,00,000& \text{Bills Receivable}& 70,000\\ \text{Reserve}& & 1,80,000& \text{Stock}& 1,70,000\\ \text{Capital A/cs :}& \text{Priya}2,00,000& & \text{Investment}& 1,30,000\\ & \text{Karam}1,20,000& & \text{Advertisement Suspense A/c}& 1,20,000\\ & \text{Anna}\underset{–}{80,000}& \underset{–}{4,00,000}& \text{Building}& 2,90,000\\ & & \underset{–}{\underset{–}{9,40,000}}& & \overline{\underset{–}{\underset{–}{9,40,000}}}\end{array}$

Karam died on 12th June, 2014 and according to the Partnership Deed his executors were entitled to be paid as under :

(a) His share in the profits of the firm till the date of his death which will be calculated on the basis of average profits of last three completed years.

(b) His share in the goodwill of the firm which will be calculated on the basis of two years' purchase of total profits of last three years.

(c) Profits for the last three years were : Rs 30, 000, Rs 70, 000 and Rs 80, 000.

Prepare Karam's Capital A/c to be rendered to his executors.

Interest paid on debentures and long-term loans and advances will result in cash ___ from financing activities.

1. Inflow

2. Outflow

3. Either inflow or outflow

4. None of these

Which of the following would be considered a cash-flow item from a "financing" activity?

1. A cash outflow to the government for taxes

2. A cash outflow to repurchase the firm's own common stock

3. A cash outflow to lenders as interest

4. A cash outflow to purchase bonds issued by another company

From the following Balance Sheets of X Ltd. as at 31st March, 2016 and 2015, prepare a common size Balance Sheet.
$\begin{array}{ccccc}\text{Particulars}& & \text{Note}& \text{Amount (Rs)}& \text{Amount (Rs)}\\ & & \text{No.}& 31-3-2016& 31-3-2015\\ \text{1. Equity and Liabilities}& & & & \\ \text{(1) Shareholders' Funds}& & & & \\ \text{(a) Share Capital}& & & 80,00,000& 60,00,000\\ \text{(b) Reserves and Surplus}& & & 12,00,000& 8,00,000\\ \text{(2) Non-current liabilities}& & & & \\ \text{Long term borrowings}& & & 24,00,000& 20,00,000\\ \text{(3) Current liability : Trade Payables}& & & 4,00,000& 12,00,000\\ & \text{Total}& & 1,20,00,000& 1,00,00,000\\ \text{II. Assets}& & & & \\ \text{(1) Non-current Assets}& & & & \\ \text{Fixed Assets}& & & & \\ \text{(a) Tangible}& & & 80,00,000& 60,00,000\\ \text{(b) Intangible}& & & 4,00,000& 12,00,000\\ \text{(2) Current Assets}& & & & \\ \text{(a) Inventories}& & & 24,00,000& 20,00,000\\ \text{(b) Cash and cash equivalents}& & & 12,00,000& 8,00,000\\ & \text{Total}& & 1,20,00,000& 1,00,00,000\end{array}$

Radha Ltd. purchased machinery worth Rs 4, 00, 000 from Krishna Ltd on 1st April 2017. Rs 1, 00, 000 were paid immediately and the balance was paid by issue of Rs 2, 80, 000 $12\%$ debentures in Radha Ltd. Pass the necessary journal entries for recording the transactions in the books of Radha Ltd.

When a fixed asset is bought as hire purchase, interest element is classified under ___.

1. Operating activities

2. Financing activities

3. Investing activities

4. None of these

In case of other enterprises cash flow arising from interest paid should be classified as cash flow from ___ while dividends and interest received should be stated as cash flow from___.

1. None of these

2. Investing activities, operating activities

3. Operating activities, financing activities

4. Financing activities, investing activities

Kanu, Manu and Akansha are partners sharing profits as 20%, 30% and 50%. Kanu decided to retire with the consent of other partners and sold her share to Manu. Goodwill was valued at two and a half years purchase of the average profits of three years. Profits of these three years were Rs 50, 000, Rs 70, 000 and Rs 60, 000. Reserve fund stood in the balance sheet at Rs 30, 000 at the time of her retirement. You are required to record necessary journal entries to record above adjustments on Kanu's retirement. Also prepare her capital account to find out the amount due to her when her capital balance in the balance sheet was Rs 1, 00, 000 before any above adjustment.

Pankaj, Naresh and Saurabh are partners sharing profits in the ratio of 3 : 2 : 1. Naresh retired from the firm due to his illness. On that date the balance sheet of the firm was as follws :

Books of Pankaj, Naresh and Saurabh
BALANCE SHEET
as at March 31, 2007

$\begin{array}{cccccc}\text{Capital and Liabilities}& & \text{Rs}& \text{Assets}& & \text{Rs}\\ \text{General Reserve}& & 12,000& \text{Bank}& & 7,600\\ \text{Sundry Creditors}& & 15,000& \text{Debtors}& 6,000& \\ \text{Bills Payable}& & 12,000& \text{Less : Provision for}& & \\ \text{Outstanding Salary}& & 2,200& \text{Doubtful Debts}& \underset{–}{400}& 5,600\\ \text{Provision for Legal Damages}& & 6,000& \text{Stock}& & 9,000\\ \text{Capitals :}& & & \text{Furniture}& & 41,000\\ \text{Pankaj}& 46,000& & \text{Premises}& & 80,000\\ \text{Naresh}& 30,000& & & & \\ \text{Saurabh}& \underset{–}{20,000}& 96,000& & & \\ & & \overline{\underset{–}{\underset{–}{1,43,200}}}& & & \overline{\underset{–}{\underset{–}{1,43,200}}}\end{array}$

Additional Information :

(i) Premises have appreciated by 20%, stock depreciated by 10% and provision for doubtful debts was to be made 5% on debtors. Further provision for legal damages is to be made for Rs 1, 200 and furniture to be brought up to Rs 45, 000.

(ii) Goodwill of the firm be valued at Rs 42, 000.

(iii) Rs 26, 000 from Naresh's Capital account be transferred to his loan account bearing interest @ 12% p.a. and balance be paid through bank; if required, necessary loan may be obtained from Bank.

(iv) New profit sharing ratio of Pankaj and Saurabh is decided to be 5 : 1.

(v) Naresh decided that every year interest on his loan shall be used for educating a girl child from poor family.

Give necessary ledger accounts and balance sheet of the firm after Naresh's retirement. Identify the values conveyed by Naresh.

From the following information, calculate the net cash flows from financing activities:

$\begin{array}{ccc}& \text{1st april 2018}& \text{31st march 2019}\\ \text{Long term loans}& 2,00,000& 2,50,000\end{array}$

During the year the company repaid the loan amounting to Rs. 1, 00, 000.

1. None of these

2. Rs. 1, 50, 000

3. Rs. 1, 00, 000

4. Rs. 50, 000

Given below is the Balance Sheet of A and B, who are carrying on partnership business on 31-12-2017. A and B share profits and losses in the ratio of 2 : 1.

BALANCE SHEET OF A AND B
as on 31st December, 2017
$\begin{array}{ccccc}\text{Liabilities}& & \text{Amount}& \text{Assets}& \text{Amount}\\ & & \text{(Rs)}& & \text{(Rs)}\\ \text{Bills Payable}& & 10,000& \text{Cash in Hand}& 10,000\\ \text{Creditors}& & 58,000& \text{Cash at Bank}& 40,000\\ \text{Outstanding Expenses}& & 2,000& \text{Sundry Debtors}& 60,000\\ \text{Capitals :}& & & \text{Stock}& 40,000\\ \text{A}& 1,80,000& & \text{Plant}& 1,00,000\\ \text{B}& \underset{–}{1,50,000}& \underset{–}{3,30,000}& \text{Buildings}& \underset{–}{1,50,000}\\ & & 4,00,000& & 4,00,000\end{array}$

C is admitted as a partner on the date of the Balance Sheet on the following terms:

(i) C will bring Rs 1, 00, 000 for his capital and Rs 60, 000 as his share of goodwill for 1/4th share in the profits.

(ii) Plant is to be appreciated to Rs 1, 20, 000 and the value of buildings is to be appreciated by 10%.

(iii) Stock is found over valued by Rs 4, 000.

(iv) A provision for bad and doubtful debts is to be created at 5% of debtors.

(v) Creditors were unrecorded to the extent of Rs 1, 000.

Pass the necessary Journal entries at the time of admission of C. Also prepare a Balance Sheet.

OR

Pankaj, Naresh and Somesh are partners sharing profits in the ratio of 3 : 2 : 1. Naresh retired from the firm due to his illness. On that date the Balance Sheet of the firm was as follows:

BALANCE SHEET
as on 31st March, 2017
$\begin{array}{cccccc}\text{Liabilities}& & \text{Amount}& \text{Assets}& & \text{Amount}\\ & & \text{(Rs)}& & & \text{(Rs)}\\ \text{General Reserve}& & 12,000& \text{Bank}& & 7,600\\ \text{Sundry Creditors}& & 15,000& \text{Debtors}& 6,000& \\ \text{Bills Payable}& & 12,000& \text{Less: Provision for}& & \\ \text{Outstanding Salary}& & 2,200& \text{Doubtful Debt}& \underset{–}{\left(400\right)}& 5,600\\ \text{Provision for Legal Damages}& & 6,000& \text{Stock}& & 9,000\\ \text{Capitals :}& & & \text{Furniture}& & 41,000\\ \text{Pankaj}& 46,000& & \text{Premises}& & 80,000\\ \text{Naresh}& 30,000& & & & \\ \text{Somesh}& \underset{–}{20,000}& 96,000& & & \\ & & \overline{1,43,200}& & & \overline{1,43,200}\end{array}$

Additional Information :

(i) Premises have appreciated by 20%, stock depreciated by 10% and provision for doubtful debts was to be made 5% on debtors. Further, provision for legal damages is to be made for Rs 1, 200 and furniture to be brought up to Rs 45, 000.

(ii) Goodwill of the firm be valued at Rs 42, 000.

(iii) Rs 26, 000 from Naresh's capital account be transferred to his loan account and balance be paid through bank; if required, necessary loan may be obtained from Bank.

(iv) New profit sharing ratio of Pankaj and Somesh is decided to be 5 : 1.

Give the necessary Ledger Accounts at the time of Naresh's retirement.

Rohit, Kunal and Sarthak are partners in a firm. They decided to dissolve their firm. Pass necessary journal entries for the following after various assets (other than Cash and Bank) and the third party liability have been transferred to Realisation Account :

(a) Kunal agreed to pay off his wife's loan of Rs. 6, 000.

(b) Total Creditors of the firm were Rs 40, 000. Creditors worth Rs 10, 000 were given a piece of furniture costing Rs 8, 000 in full and final settlement. Remaining Creditors allowed a discount of 10%.

(c) Rohit had given a loan of Rs 70, 000 to the firm which was duly paid.

(d) A machine which was not recorded in the books was taken over by Kunal at Rs 3, 000, whereas its expected value was Rs 5, 000.

(e) The firm had a debit balance of Rs 15, 000 in the Profit and Loss Account on the date of dissolution.

(f) Sarthak paid the realisation expenses of Rs 16, 000 out of his private funds, who was to get a remuneration of Rs 15, 000 for completing dissolution process and was responsible to bear all the realisation expenses.

A. Ltd. issued 90, 00, 000, 9% Debenture of Rs 50 each at a discount of 8%, redeemable at par any time after 9 years. Record necessary entries in the books of A. Ltd.

X Ltd. was in the business of manufacturing plastic bags. The company decided to manufacture low cost jute bags instead of plastic bags. Following are the Balance Sheets of X Ltd. as at 31st March, 2017 and 2016. * As per Revised Format, Balance Sheet of current year will be given first.

You are require to :

(a) Prepare a Comparative Balance Sheet,

and

(b) Identify any two values which the Company wants to communicate to the society.

$\begin{array}{cccc}\text{Particulars}& \text{Note No}& \mathrm{31.03.2017}\ast & \mathrm{31.03.2016}\\ \text{I. EQUITY AND LIABILITIES:}& & \text{Rs.}& \text{Rs.}\\ \text{1. Shareholder's Funds:}& & & \\ \text{(a) Share Capital}& & 10,00,000& 5,00,000\\ \text{(b) Reserves and Surplus}& & 2,00,000& 3,00,000\\ \text{2. Non-Current Liabilities}& & & \\ \text{3. Long-term Borrowings}& & 8,00,000& 5,00,000\\ \text{4. Current Liabilities}& & & \\ \text{Trade Payables}& & 4,00,000& 2,00,000\\ \text{TOTAL}& & \overline{\underset{–}{\underset{–}{24,00,000}}}& \overline{\underset{–}{\underset{–}{15,00,000}}}\\ \text{II. ASSETS}:& & & \\ \text{1. Non Current Assets}& & & \\ \text{a. Fixed Assets:}& & & \\ \text{(i) Tangible Assets}& & 14,00,000& 8,00,000\\ \text{(ii) Intangible Assets}& & 3,00,000& 2,00,000\\ \text{2. Current Assets}& & & \\ \text{(a) Inventories}& & 5,00,000& 4,00,000\\ \text{(b) Cash and Cash Equivalents}& & 2,00,000& 1,00,000\\ \text{TOTAL}& & \overline{\underset{–}{\underset{–}{24,00,000}}}& \overline{\underset{–}{\underset{–}{15,00,000}}}\end{array}$