Oversubscription of Debentures

Q. Ali the Bahadur are partners in a firm sharing profits and losses as Ali 70% and Bahadur 30%. Their respective capitals as at 1st April, 2017 stand as Ali ₹ 25, 000 and Bahadur ₹ 20, 000. The partners are allowed interest on capitals @ 5% p.a. Drawings of the partners during the year ended 31st March, 2018 amounted to ₹ 3, 500 and ₹ 2, 500 respectively.
Profit for the year, before charging interest on capital and annual salary of Bahadur @ ₹ 3, 000, amounted to ₹ 40, 000, 10% of divisible profit is to be transferred to Reserve.
You are asked to show Partners Current Account and Capital Accounts recording the above transactions.

Q. Amit, Binita and Charu are three partners. On 1st April, 2017, their Capitals stood as: Amit ₹ 1, 00, 000, Binita ₹ 2, 00, 000 and Charu ₹ 3, 00, 000. It was decided that:
(a) they would receive interest on Capital @ 5% p.a.,
(b) Amit would get a salary of ₹ 10, 000 per month,
(c) Binita would receive commission @ 5% of net profit after deduction of commission, and
(d) 10% of the net profit would be transferred to the General Reserve.
Before the above items were taken into account, the profit for the year ended 31st March, 2018 was ₹ 5, 00, 000. Prepare Profit and Loss Appropriation Account and the Capital Accounts of the partners.

Q. Naresh and Sukesh are partners with capitals of ₹ 3, 00, 000 each as on 31st March, 2018. Naresh had withdrawn ₹ 50, 000 against capital on 1st October, 2017 and also ₹ 1, 00, 000 besides the drawings against capital. Sukesh also had drawings of ₹ 1, 00, 000.
Interest on capital is to be allowed @ 10% p.a.
Net profit for the year was ₹ 2, 00, 000, which is yet to be distributed.
Pass the journal entries for interest on capital and distribution of profit.gbn knnk j

Q. Kanika and Gautam are partners doing a dry cleaning business in Lucknow, sharing profits in the ratio 2 : 1 with capitals ₹ 5, 00, 000 and ₹ 4, 00, 000 respectively. Kanika withdrew the following amounts during the year to pay the hostel expenses of her son:

1st April	₹ 10, 000
1st June	₹ 9, 000
1st November	₹ 14, 000
1st December	₹ 5, 000

Gautam withdrew ₹ 15, 000 on the first day of April, July, October and January to pay rent for the accommodation of his family. He also paid ₹ 20, 000 per month as rent for the office of partnership which was in a nearby shopping complex.
Calculate interest on drawings @ 6% p.a.

Q. Calculate Debt to Equity Ratio from the following information:

	₹			₹
Fixed Assets (Gross)	8, 40, 000		Current Assets	3, 50, 000
Accumulated Depreciation	1, 40, 000		Current Liabilities	2, 80, 000
Non-current Investments	14, 000		10% Long-term Borrowings	4, 20, 000
Long-term Loans and Advances	56, 000		Long-term Provisions	1, 40, 000

Q. From the following information, calculate Total Assets to Debt Ratio:

	₹			₹
Fixed Assets (Gross)	6, 00, 000		Accumulated Depreciation	1, 00, 000
Non-current Investments	10, 000		Long-term Loans and Advances	40, 000
Current Assets	2, 50, 000		Current Liabilities	2, 00, 000
Long-term Borrowings	3, 00, 000		Long-term Provisions	1, 00, 000

Q. On 1st April, 2017, A and B entered into partnership contributing ₹ 60, 000 and ₹ 45, 000 respectively. They agreed to share profits and losses in the ratio of 3 : 2. B is allowed salary of ₹ 12, 000 per year. Interest on capital is to be allowed @ 10% p.a. During the year, A withdrew ₹ 9, 000 and B withdrew ₹ 18, 000 as drawings, Interest on drawings paid by A and B were ₹ 150 and ₹ 210 respectively. Profit for the year ended 31st March, 2018 before the above adjustments was ₹ 35, 000. Show distribution of profits by preparing Profit and Loss Appropriation Account of the firm. Prepare Partners Capital Accounts also.

Q. Amal, Bimal and kamal are three partners. On 1st April, 2017, their Capitals stood as: Amal ₹ 40, 000, Bimal ₹ 30, 000 and Kamal ₹ 25, 000. It was decided that:
(a) they would receive interest on Capital @ 5% p.a.,
(b) Amal would get a salary of ₹ 250 per month,
(c) Bimal would receive commission @ 4% on net profit after deducting commission, interest on capital and salary, and
(d) After deducting all of these 10% of the profit should be transferred to the General Reserve.
Before the above items were taken into account, the profit for the year ended 31st March, 2018 was ₹ 33, 360. Prepare Profit and Loss Appropriation Account and the Capital Accounts of the Partners.

Q. Anju, Manju and Sanju were partners in a firm sharing profits in the ratio of 2 : 2 : 1 . On 31st March, 2018, their Balance Sheet was:

Liabilities		₹	Assets	₹
Creditors		50, 000	Cash	60, 000
Bank Loan		35, 000	Debtors	75, 000
Employees Provident Fund		15, 000	Stock	40, 000
Investments Fluctuation Reserve		10, 000	Investments	20, 000
Commission Received in Advance		8, 000	Plant	50, 000
Capital A/cs:			Profit and Loss A/c	3, 000
Anju	50, 000
Manju	50, 000
Sanju	30, 000	1, 30, 000
		2, 48, 000		2, 48, 000

On this date , the firm was dissolved . Anju was appointed to realise the assets . Anju was to receive 5% commission on the sale of assets (except cash) and was to bear all expenses of realisation .
Anju realised the assets as follows : Debtors ₹ 60, 000; Stock ₹ 35, 500; Investments ₹ 16, 000; Plant 90% of the book value . Expenses of Realisation amounted to ₹ 7, 500. Commission received in advance was returned to customers after deducting ₹ 3, 000.
Firm had to pay ₹ 8, 500 for Outstanding Salary, not provided for earlier , Compensation paid to employees amounted to ₹ 17, 000. This liability was not provided for in the above Balance Sheet . ₹ 20, 000 had to be paid for Employees Provident Fund.
Prepare Realisation Account , Capital Accounts of Partners and Cash Account.

Q. Bhanu and Partab are partners sharings profits eqully. Their fixed capitals as on 1st April, 2017 are ₹ 8, 00, 000 and ₹ 10, 00, 000 respectively. Their drawings the year were ₹ 50, 000 and ₹ 1, 00, 000 respectively. Interest on Capital is a charge and is to be allowed @ 10% p.a. and interest on drawings is to be charged @ 15% p.a. Profit for the year ended 31st March, 2018 was ₹ 1, 20, 000.
Prepare Profit and Loss Appropriation Account.

Q. A, B and C were partners. Their capitals were A–₹ 30, 000; B–₹ 20, 000 and C–₹ 10, 000 respectively. According to the Partnership Deed, they were entitled to an interest on capital @ 5% p.a. In addition, B was also entitled to draw a salary of ₹ 500 per month. C was entitled to a commission of 5% on the profits after charging the interest on capital, but before charging the salary payable to B. The net profit for the year were ₹ 30, 000 distributed in the ratio of capitals without providing for any of the above adjustments. The profits were to be shared in the ratio of 5 : 3 : 2.
Pass necessary adjustment entry showing the workings clearly.

Q. Total Assets ₹ 2, 60, 000; Total Debts ₹ 1, 80, 000; Current Liabilities ₹ 20, 000. Calculate Debt to Equity Ratio.

Q. Working Capital ₹ 1, 80, 000; Total Debts ₹ 3, 90, 000; Long-Term Debts ₹ 3, 00, 000.
Calculate Current Ratio.

Q. Total Assets ₹12, 50, 000; Total Debts ₹10, 00, 000; Current Liabilities ₹5, 00, 000.
Calculate Debt to Equity Ratio.

Q. Total Debt ₹ 60, 00, 000; Shareholders' Funds ₹ 10, 00, 000; Reserves and Surplus ₹ 2, 50, 000; Current Assets ₹ 25, 00, 000; Working Capital ₹ 5, 00, 000. Calculate Total Assets to Debt Ratio.

Q. X Ltd. has Current Ratio of 4.5 : 1 and a Quick Ratio of 3 : 1. If its inventory is ₹ 36, 000, find out its total Current Assets and total Current Liabilities.

Q. Following are the Balance Sheets of Krishtec Ltd. for the years ended 31st March 2012 and 2011:

Particulars ulars	Note No.	31st March, 2012 (₹)	31st March, 2011 (₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		12, 00, 000	8, 00, 000
(b) Reserves and Surplus (Surplus, i.e., Balance in Statement of Profit and Loss)		3, 50, 000	4, 00, 000
2. Non-Current Liabilities
Long-term Borrowings		4, 40, 000	3, 50, 000
3. Current Liabilities
(a) Trade Payables		60, 000	50, 000
Total Total Expenses		20, 50, 000	16, 00, 000
II. ASSETS
1, Non-Current Assets
Fixed Assets:
Tangible Assets		12, 00, 000	9, 00, 000
2. Current Assets
(a) Inventories		2, 00, 000	1, 00, 000
(b) Trade Receivables		3, 10, 000	2, 30, 000
(c) Cash and Cash Equivalents		3, 40, 000	3, 70, 000
Total		20, 50, 000	16, 00, 000

Prepare a Cash Flow Statement after taking into account the following adjustments:
(a) The company paid Interest ₹36, 000 on its long-term borrowings.
(b) Depreciation charged on tangible fixed assets was ₹1, 20, 000

Q. Anita, Bimla and Cherry are three partners. On 1st April, 2017, their Capitals stood as: Anita ₹ 1, 00, 000, Bimla ₹ 2, 00, 000 and Cherry ₹ 3, 00, 000. It was decided that:
(a) they would receive interest on Capital @ 5% p.a.,
(b) Anita would get a salary of ₹ 5, 000 per month,
(c) Bimla would receive commission @ 5% of net profit after deduction of commission, and
(d) 10% of the net divisible profit would be transferred to the General Reserve.
Before the above items were taken into account, the profit for the year ended 31st March, 2018 was ₹ 5, 00, 000. Prepare Profit and Loss Appropriation Account and the Capital Accounts of the partners.

Q. Raj Ltd . issued 5, 000; 8% Debentures of ₹ 100 each at a premium of 5% payable as follows:
₹ 10 on application ; ₹ 20 along with premium on allotment and balance on first and final call.
Pass necessary Journal entries.

Q. A, B and C are partners sharing profits and losses in the ratio of A 1/2, B 3/10, C 1/5 after providing for interest @ 5% on their respective capitals, viz., A ₹ 50, 000; B ₹ 30, 000 and C ₹ 20, 000 and allowing B and C a salary of ₹ 5, 000 each per annum. During the year ended 31st March, 2018, A has drawn ₹ 10, 000 and B and C in addition to their salaries have drawn ₹ 2, 500 and ₹ 1, 000 respectively. The Profit and Loss Account for the year ended 31st March, 2018 showed a net profit of ₹ 45, 000 before charging (a) interest on capital and (b) partners salaries. On 1st April, 2017, the balances in the current Account of the partners were A (cr.) ₹ 4, 500; B (Cr.) ₹ 1, 500 and C (Cr.) ₹ 1, 000. Interest is not charged on Drawings or Current Account balances. Show Partners Capital and Current Accounts as at 31st March, 2018 after division of profits in accordance with the partnership agreement.

Q. Following is the Balance Sheet of A and B , who shared Profits and Losses in the ratio of 2 : 1 , as at 1st April, 2018:

BALANCE SHEET OF A AND B as on 1st April, 2018
Liabilities		₹	Assets	₹
Capital A/cs:			Land ad Buildings	2, 90, 000
A	3, 00, 000		Furniture	80, 000
B	2, 00, 000	5, 00, 000	Stock	2, 40, 000
Reserve		1, 50, 000	Debtors	1, 50, 000
Creditors		2, 00, 000	Bank	60, 000
			Cash	30, 000
		8, 50, 000		8, 50, 000

On the above date , the partners changed their profit-sharing ratio to 3 : 2 . For this purpose, the goodwill of the firm was valued at ₹ 3, 00, 000 . The partners also agreed for the following:
(a) The value of Land and Building will be ₹ 5, 00, 000;
(b) Reserve is to be maintained at ₹ 3, 00, 000.
(c) The total capital of the partners in the new firm will be ₹ 6, 00, 000 , which will be shared by the partners in their new profit-sharing ratio .
Prepare Revaluation Account , Partners' Capital Accounts and the Balance Sheet of the reconstituted firm.

Q. Total Debt ₹12, 00, 000; Shareholders' Funds ₹2, 00, 000; Reserves and Surplus ₹50, 000; Current Assets ₹5, 00, 000; Working Capital ₹1, 00, 000. Calculate Total Assets to Debt Ratio.

Q. Shareholders Funds ₹ 1, 60, 000; Total Debts ₹ 3, 60, 000; Current Liabilities ₹ 40, 000.
Calculate Total Assets to Debt Ratio.

Q.

Describe the steps for creating Sinking Fund for redemption of debentures.

Q. The Capital Accounts of A and B stood at ₹ 4, 00, 000 and ₹ 3, 00, 000 respectively after necessary adjustments in respect of the drawings and the net profit for the year ended 31st March, 2018. It was subsequently discovered that 5% p.a. interest on capital and also drawings were not taken into account in arriving at the distributable profit. The drawings of the partners had been: A–₹ 12, 000 drawn at the end of each quarter and B–₹ 18, 000 drawn at the end of each half year.
The profit for the year as adjusted amounted to ₹ 2, 00, 000. The partners share profits in the ratio of 3 : 2. You are required to pass Journal entries and show adjusted Capital Accounts of the partners.

Q. Vijay Laxmi Ltd. invited applications for 10, 000; 12% Debentures of ₹ 100 each at a premium of ₹ 70 per debenture .The full amount was payable on application.
Applications were received for 13, 500 debentures. Applications for 3, 500 debentures were rejected and application money was refunded . Debentures were allotted to the remaining applications .

Q. Kamal and Kapil ar partners having fixed capitals of ₹ 5, 00, 000 each as on 31st March, 2017. Kamal introduced further captial of ₹ 1, 00, 000 on 1st October, 2017 whereas Kapil withdrew ₹ 1, 00, 000 on 1st October, 2017 out of capital.
Interest on capital is to be allowed @ 10% p.a.
The firm earned net profit of ₹ 6, 00, 000 for the year ended 31st March 2018.
Pass the Journal entry for interest on capital and prepare Profit and Loss Appropriation Account.

Q. Nipa Limited issued ₹ 10, 00, 000 Debentures of ₹ 100 each at a premium of 10% , payable 25% on application (including premium) and the balance on allotment . The debentures were applied for and the amount was dully received.
You are required to give Journal entries and prepare Cash Book.

Q. A and B are partners sharing profits in the ratio of 3 : 2 with capitals of ₹ 50, 000 and ₹ 30, 000 respectively. Interest on cpital is agreed @ 6% p.a. B is to be allowed an annual salary of ₹ 2, 500. During the year profit prior to interest on capital but after charging Bs salary amounted to ₹ 12, 500. A provision of 5% of the profits if to be made in respect of Managers Commission.

Q. The Capitals of A, B and C as on 31st March, 2018 amounted to ₹ 90, 000, ₹ 3, 30, 000 and ₹ 6, 60, 000 respectively. The profits amounting ₹ 1, 80, 000 for the year 2017-18 were distributed in the ratio of 4 : 1 : 1 after allowing interest on Capital @ 10% p.a. During the year, each partner withdrew ₹ 3, 60, 000. The Partnership Deed was silent as to profit-sharing ratio but provided for interest on capital @ 12%.
Pass the necessary adjustment entry showing the working clearly.