Present Value of Money

Q.

Alfa and Beta were partners in a firm. They were trading in artificial 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 artificial hand free of cost to Gama. The Balance Sheet of Alfa and Beta as at 31st March, 2013 was as follows:

BALANCE SHEET OF ALFA AND BETA as at 31st March, 2013

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

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 compensation was Rs 30, 000.

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

(v) A liability of Rs 20, 000 included in creditors is not likely to arise.

(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 opening Balance Sheet of the new firm. Also identify any one value which the partners wanted to communicate to the society.

Q.

State which fo the following would result in inflow/outflow of Cash or Cash Equivalents:
(i) Purchase of Inventory for cash.
(ii) Purchase of goods on credit.
(iii) Sale of Goods costing Rs. 10, 000 for Rs. 12, 000 for cash.
(iv) Sale fo Goods on Credit.
(v) Purchase of a fixed asset by issue of shares.

Q.

Future Value after 2 year = 6, 00, 000. The rate is 10 %. What is Present value today?

1. 495861

2. 459868

3. 459861

4. 495868

Q. is today's value of the amount of money in the future.

1. Future value
2. Present value
3. Market value
4. Current value

Q.

Future Value after 3 year = 3, 00, 000. The rate is 10 %. What is Present value today?

1. 225395

2. 225390

3. 225000

4. 225394

Q.

Future value is equal to _____________________.

1. present value divided by (1+n) to the power r

2. present value multiplied by (1+n) to the power r

3. present value divided by (1+r) to the power n

4. present value multiplied by (1+r) to the power n

Q. Future Value after 3 year = 3, 00, 000. The rate is 10 %. is present value today.

1. Rs. 2, 25, 395
2. Rs. 2, 25, 390
3. Rs. 2, 25, 000
4. Rs. 2, 25, 394

Q.

Future Value after 5 year = 8, 00, 000. The rate is 20 %. What is Present value today?

1. 321504

2. 321502

3. 321500

4. 321498

Q. A Company purchased plant for Rs. 50000. The useful life of the plant is 10 years and the residual value is Rs. 5000. The management wants to depreciate it by straight line method. What will be the rate of depreciation?

1. $9\%$
2. $10\%$
3. $8\%$
4. None of the above

Q. Which of the following is/are the subsidiary books?

1. Primary Book
2. Bills Payable Book
3. Purchases Book
4. (B) & (C)