Issue for Consideration Other Than Cash

Q.

How do you find net fixed assets?

Q.

What is meant by conveyance expenses?

Q. If purchase consideration given is more than the net assets acquired, then the difference is debited to:

1. General Reserve
2. Goodwill account
3. Bank account
4. Capital reserve

Q.

What is 'Capital Reserve'?

Q. Excess value of net assets over purchase consideration at the time of purchase of business is credited to:

1. Goodwill Account
2. Vendor’s Account
3. Capital reserve
4. General reserve

Q.

What is Capital Fund? How is it calculated?

Q.

Ashok, Babu and Chetan are in partnership sharing profit in the proportion of 1/2, 1/3, 1/6 respectively. They dissolve teh partnership of the december 31, 2012, when the balance sheet of the firm as under
$$\begin{array}{cccccccc}& & & & \text{Balance Sheet Of Ashok, Babu and Chetan}& & & \end{array}$$
$$\begin{array}{cccccccc}& & & & \text{As on December 31, 2012}& & & \end{array}$$

$$\begin{array}{ccccc}\text{Liabilities}& & \text{Amt.}& \text{Assets}& \text{Amt.}\\ \text{Sundry Creditors}& & 20,000& \text{Bank}& 7,500\\ \text{Bills Payable}& & 25,500& \text{Sundry Debtors}& 58,000\\ \text{Babu's Loan}& & 30,000& \text{Stock}& 39,500\\ \text{Capital}& & & \text{Machinery}& 48,000\\ \text{Ashok}& 70,000& & \text{Investment}& 42,000\\ \text{Babu}& 55,000& & \text{Freehold Property}& 50,500\\ \text{Chetan}& \underset{–}{27,000}& 1,52,000& & \\ \text{Current Accounts}& & & & \\ \text{Ashok}& 10,000& & & \\ \text{Babu}& 5,000& & & \\ \text{Chetan}& \underset{–}{3,000}& 18,000& & \\ & & \underset{–}{}& & \underset{–}{}\\ & & 2,45,500& & 2,45,500\end{array}$$
The Machinery was taken over by Babu for Rs. 45, 000. Ashok took over the Investment for Rs. 40, 000 and freehold property took over by Chetan At Rs. 55, 000 The remaining Assets realised as follows Sundry Debtors Rs. 56, 500 and Stock Rs. 36, 500. Sundry creditors were settled at discount of 7%. A office computer, Not shown in the bookis of accounts realised Rs. 9, 000. realisation expenses amounted to Rs. 3, 000. Prepare realisation account, partners capital account, bank account.

Q.

What is Capital Fund? How is it calculated?

Q.

Is Land a Fixed Asset?

Q.

A ltd. took over the assets of Rs. 6, 60, 000 and liabilities of Rs. 80, 000 of B ltd. for an agreed purchase consideration of 6, 00, 000 payable 10% in cash and the balance by the issue of 15% Debentures of Rs. 100 each at 10% discount.

The number of debentures to be issued is-

1. 6000

2. 5400

3. 6600

4. 4500

Q.

What are the examples of the owners fund?

Q.

A. Ltd. issued 4, 000, 9% Debentures of Rs 100 each on the following terms:

Rs 20 on Application;

Rs 20 on Allotment;

Rs 30 on First call; and

Rs 30 on Final call.

The public applied for 4, 800 Debentures. Applications for 3, 600 Debentures were accepted in full. Applications for 800 Debentures were allotted 400 Debentures and applications for 400 Debentures were rejected.

Q.

Which of the following items is not considered while computing Cash Flow from Operating Activities:

1. Interest on debentures
2. Loss on sale of fixed assets
3. Purchase of goodwill for cash
4. Gain on sale of investments

Q.

A.Ltd. issued 10, 000, 10% Debentures of Rs 100 each at a premium of 5% payable as follows:

Rs 10 on Application;

Rs 20 along with premium on allotment and balance on First and Final call. Record necessary Journal Entries.

Q. The company bought a machinery for Rs. 2, 10, 000 & issued debentures of Rs.100 each at 5% premium. The number of debentures issued is .

1. 2, 10, 000
2. 2, 000
3. 3, 000
4. 1, 000

Q.

How to Find Net Fixed Assets?

Q.

What is ‘Capital Reserve’?

Q.

A. Ltd. Company issued Rs, 5, 00, 000 Debentures at a discount of 5% repayable at par by annual drawings of Rs.1, 00, 000.

Make the necessary ledger accounts in the books of the company for the first year.

Q.

What is meant by ‘Issue of debenture at discount and redeemable at premium?

Q. After completing ______ years a company can issue shares at discount.

1. 1
2. 4
3. 3
4. 2

Q.

Journalise the following:

(i) A debenture issued at Rs 95, repayable at Rs 100;

(ii) A debenture issued at Rs 95, repayable at Rs 105; and

(iii) A debenture issued at Rs 100, repayable at Rs 105;

The face value of debenture in each of the above cases is Rs 100.

Q.

A company issued 10% Debentures of the face value of Rs, 1, 20, 000 at a discount of 6% on April 01, 2011. The debentures are payable by annual drawings of Rs 40, 000 commencing from the end of third year.

How will you deal with discount on debentures?

Show the discount on debentures account in the company ledger for the period of duration of debentures. Assume accounts are closed on March 31 every year.

Q.

Voltas company bought machinery from B company for Rs. 10, 00, 000. It paid Rs. 1, 18, 000 by cheque and the balance by issuing 10% Debentures of Rs. 100 each at 2% discount. The number of debentures issued are ___

1. 9000

2. 3000

3. 2000

4. None of these

Q.

A company issued debentures of the face value of Rs 5, 00, 000 at a discount of 6% on April 01, 2012. These debentures are redeemable by annual drawings of Rs, 1, 00, 000 made on March 31 each year. The directors decided to write off discount based on the debentures outstanding each year.

Calculate the amount of discount to be written-off each year. Give journal entries also.

Q.

Ashish Ltd. issued 170 debentures of Rs. 100 each to a creditor who has supplied machinery costing Rs. 16, 000. Which of the following is correct?

1. Debentures are issued at discount of Rs 1000

2. Debentures are issued at par

3. Debentures are issued at premium of Rs 1000

4. None of these

Q. The following are the balance sheets of Devi Company Limited at the end of 2011 and 2012. Prepare a comparative Balance Sheet and study the financial position of the concern. $$\begin{array}{cccccc}\text{Liabilities}& \text{2011 (Rs.)}& \text{2012 (Rs.)}& \text{Assets}& \text{2011 (Rs.)}& \text{2012 (Rs.)}\\ \text{Equity Capital}& 1,20,000& 1,85,000& \text{Fixed Assets}& 1,40,000& 1,95,000\\ \text{Preference}& 70,000& 95,000& \text{Stock}& 40,000& 45,000\\ \text{Capital}& & & & & \\ \text{Reserves}& 30,000& 35,000& \text{Debtors}& 70,000& 82,500\\ \text{P and L}& 17,500& 20,000& \text{Bills}& 20,000& 50,000\\ & & & \text{Receivables}& & \\ \text{Bank Overdraft}& 35,000& 45,450& \text{Prepaid}& 6,000& 8,000\\ & & & \text{Expenses}& & \\ \text{Creditors}& 25,000& 35,000& \text{Cash at Bank}& 40,000& 48,500\\ \text{Provision for}& & & \text{Cash in Hand}& 5,000& 29,000\\ \text{Taxation}& 15,000& 22,500& & & \\ \text{Proposed}& & & & & \\ \text{Dividend}& 8,500& 20,050& & & \\ & \overline{\underset{–}{3,21,000}}& \overline{\underset{–}{4,58,000}}& & \overline{\underset{–}{3,21,000}}& \overline{\underset{–}{4,58,000}}\end{array}$$

Q.

What is the owners fund?

Q. Ashish, Aakash and Amit are partners sharing profits and losses equally. The Balance Sheet as at $31st$ March, $2018$ was as follows :

Liabilities	Rs.	Assets	Rs.
Sundry Creditors	75, 000	Cash in Hand	24, 000
General Reserve	90, 000	Cash at Bank	1, 40, 000
Capital A/c's:		Sundry Debtors	80, 000
Ashish 3, 00, 000		Stock	1, 40, 000
Aakash 3, 00, 000		Land and Building	4, 00, 000
Amit 2, 75, 000	8, 75, 000	Machinery	2, 50, 000
		Advertisement	6, 000
	10, 40, 000		10, 40, 000

The partners decided to share profits in the ratio of $2:2:1$ w.e.f. $1st$ April, $2018$ . They also decided that :
(i) Value of stock to be reduced to Rs. $1,25,000$ .
(ii) Value of machinery to be decreased by $10\%$ .
(iii) Land and Building to be appreciated by Rs. $62,000$ .
(iv) Provision for Doubtful Debts to be made $@5\%$
(v) Aakash was to carry out reconstruction of the firm at a remuneration of Rs. $10,000.$
Pass necessary Journal entries to give effect to the above.

Q.

Company bought a Plant for Rs. 1, 00, 000 & issued Debentures of Rs. 100 each at par. How many debentures were issued?

1. None of these

2. 900

3. 1000

4. 800

Q.

T. Ltd. offered 2, 00, 000, 8% Debenture of Rs 500 each on June 30, 2002 at a premium of 10% payable as Rs 200 on application (including premium) and balance on allotment, redeemable at par after 8 years. But application are received for 3, 00, 000 debenture and the allotment is made on pro-rata basis. All the money due on application and allotment is received. Record necessary entries regarding issue of debenture.