SHRI VIDHYABHARATHI MATRIC HR. SEC. SCHOOL SAKKARAMPALAYAM, AGARAM (POST), ELACHIPALAYAM TIRUCHENGODE (TK), NAMAKKAL(DT) 67 0 CELL: 996-77, 944-77 XII - STANDARD ACCOUNTANCY COMMON HALF YEARLY EXAMINATION - DEC - 08..08 S.No Answer Key Mark SECTION I 0 x = 0 t et t et. c) Capital A/c t et. a) Bad debts. b) Statement of affairs 4. a) Small Traders t et. b),,000 6. b) Depreciation - Increase the value of fixed assets t et 7. a) Loss 8. c) 6,00 9. b),0,000 t et 0. a) Current. b) Future t et. c) Current. b) Super profit 4. c) Sacrificing ratio t et. a) Profit 6. c) Loan a/c t et 7. c) : 8. b) Share holder of the company 9. a) 6% t et 0. c) One month t et. Malar = Rani = t et w t t t t t t t t t t t t t t t t t t t t Rani is the More profitable. 0,000 t t,00,000 40,000,00,000 t t w t t t t t t t t t t t t t t t t t t t t SECTION II t t x 00 = % x 00 = 40% t t t w t t t t t t t t t t t t t t t t t t t t t t t t
. Security Premium Account Securities premium will be Appeared Liabilities side of Balance Sheet and the heading of Reserve & Surplus. What is conversion method? If is desired to calculate profit by preparing trading and profit and loss account under single entry system, then it is called conversion method. 4. Definition of Depreciation : Carter defines depreciation as the gradual and permanent decrease in the value of an asset from any cause.. Cash Receipts(Any ) Cash sales Cash receivable from customers Business receipts like interest, commission, dividend etc Sale of assets Proceeds from issue of shares/debenture loan borrowed 6. Method of valuation of Goodwill(any ) Average Profit method Super Profit method Capitalization method 7. Adjusting Entry: Date L.F. Debit Credit Capital A/c.,000 To Interest on drawings A/c,000 (Being Interest on drawing provided) t et t et t et t et t et t et Transfer Entry Date L.F. Debit Interest on drawings A/c.,000 To Profit & loss A/c (Being Interest on drawing provided) 8. Net profit Ratio : t et Net Profit Sales t et w t t t t t t t t t t t t t t X 0 = 40,000,00,000 X 00 = 40% t t Credit,000 9. Journal Entry Date L.F. Debit Credit t et To Share Capital A/c (Being 0,000 share issued) t t 0. Interest on drawing of Sundry : (000 x ) t et t et t et t t t = Total drawing x Rate = 4,000 x 0 =,00/- x 00 4 x 00 4 t t t t w t t t t t t t t t t t t t t t t t t t t t t t t w t t t t t t t t t t t t t t t t 0,00,000 0,00,000 t t t t t t t t
SECTION III. Workings : Sundry debtors 0,000 Less : Bad & doubtful debts,00 47,00 PROFIT AND LOSS A/C Cr. Amount Amount Old provision for bad &doubtful debts (- )New Bad & doubtful debt 4,00,00 (-) bad debts,800 800,000. Causes of Depreciation : Obsolescence : The old asset will become obsolete (useless) due to new inventions, improved techniques and technological advancement. Effluxion of time : When assets are exposed to forces of nature, like weather, wind, rain, etc., the value of such assets may decrease even if they are not put into any use. Time Factor : Lease, copy-right, patents are acquired for a fixed period of time. On the expiry of the fixed period of time, the assets cease to exist. t et t et t et t et. t et t et w t t t t t t t t Shareholders fund : = t t Total long term debt Share holders fund =,0,000 =,0,000 t t w t t t t t t t t t t = 7,000/- =,0,000/- t t 4. Statement of Profit or loss Amount Closing Capital,80,000 Add: awings, Less : Additional capital 0,000 Adjusted closing capital,0 Less : Opening capital,60,000 Profit 4. t et t et t et t et t et t et t t t t t t t t t t t t Cash Budget for the month June, 00 Opening cash balance 0,000 Add: Estimated receipts: Cash Sales,00,000 Total cash available during the month,0,000 Less: Estimated cash payments: Cash purchases 70,000 Interest paid,000 Total cash payments 7,000 Closing cash balance 9,000 t t t t t t t t t t t t t w t t t t t t t t t t t t t t t t t t t t t t t t
6. Calculation of average profit : II year = III Year = 4,000 IV Year = 0,000 --------------,0,000 (-) I Year loss 0,000 -------------- Total Profit,00,000 -------------- Average Profit = Total Profit No.of years =,00,000 =,000 4 Calculation of Goodwill : Goodwill = Average profit x No of years purchase =,000 x = 0,000 7. Sudha Latha Old Share = 4 : t et t et t et t et t et t et t et 8. t et t et t et t et t et w t t t t t t t t t t Sacrific = New Share : (Old Share Sacrificing) = t t 7 7 4-7 = : : 7 7 7 New Share = : : Sacrificing = : t t w t t t t t t t t t t t t : 7 : 7-7 7 7 : 7 t t The main differences between the two methods of maintaining capital accounts are as follows:- Basis of Fixed Capital Method Fluctuation Capital distinction Method Method. Change in Capital The capital normally remains unchanged except under special The capital is changing from period to period. circumstances.. Number of Accounts Each partner has two accounts, namely, Capital Account and Current Account. Each partner has only one account i.e., Capital Account.. Balance Capital Account shows always a credit balance. Capital Account shows always a credit balance. Current account may sometimes show debit or credit balance. 4. Adjustments All adjustments relating to All adjustments relating to t t t t t t t t t t t t t t t t t t t partners are recorded in the Current Accounts. t t w t t t t t t t t t t t t t t t t t t t t t t partners are recorded directly in the Capital Accounts itself. t t
w 9. Journal Entry L.F. Debit Credit t et t et t et Capital Reserve A/c. To Mano s Capital A/c To Mani s Capital A/c To Maran s Capital A/c (Being Capital Reserve transferred to old partner capital) Mano s captiala/c Mani s capital A/c Maran s capital A/c To Profit &loss A/c t t t t t t 0,000 0,000 4,000 SECTION IV 4. Diminishing Balance Method: Cost price,00,000 Less : depreciation 0% 0,000 -------------,80,000 Less:Depreciation 0% 8,000 --------------, Less:Depreciation 0% 6,00 ------------- Book value,4,800 -------------- Book value selling price =,4,800,60,000 Profit = 4,00 LEDGER ACCOUNTS IN THE BOOK OF Mr. KANNAN st March MACHINERY A/C.4.00 To Bank,00,00 0.. by dep. A/c 0,000.. by bal.c/d,80,000,00,000,00,000.4.0 To Bal b/d,80,000.. by dep. A/c 8,000.. by bal.c/d,,80,000,80,000 ------------ ----------.4.0 To Bal b/d,.. by dep. A/c 6,00..0 To P &L A/c 4,00.. by bank A/c,60,000,76,00,76,00,000 9,000 0,000 40. Journal Entry L.F. Debit Credit t et t et t et t et t et t et t et t et t et Share capital A/c. To Share for feiture A/c To Share final call A/c (Being 00 equity share were for the nonpayment of final call money) t t t t t t t t t t t t t t t t t t t w t t t t t t t t t t t t t t t t t t t t t t t t w t t t t t t,000 t t,600 400 t t t t t t t t t t t t t t t t ½ ½
t et t et t et t et t et t et t et 4. t et t et w DEPRECIATION A/C..0 To Machinery 0,000.. by P&LA/c 0,000 ---------- ----------- 0,000 0,000 ----------- -----------..0 To Machinery 8,000.. by P&LA/c 8,000 ---------- ----------- 8,000 8,000..0 To Machinery 6,00.. by P&LA/c 6,00 ---------- ----------- 6,00 6,00 ---------- ------------ Profit & Loss Appropriation Accounts for the year ended Amount Amount To Interest on Capital : By Net Profit 60,000 Anbu : 9000 By awing : Balan : 6000,000 Anbu : 00 To Salary,000 Balan : 0 70 t t t t t t t t t t To Profit transferred to capital A/c s Anbu :,7 Balan :,7 t t 0,70 60,70 60,70 Cash Budget for the Month of March and April 004 March April Opening cash Balance 4,0,0 Add : Estimated cash receipts : Cash sales 8,000 4,000 t t t t (A) Total cash available during the month t t Cash purchases Salaries Repayment of loan t et t et t et (B) Total cash payments t t Closing cash balance (A-B) Solaman s Capital A/c To (Being amount paid to Solaman) w t t t t t t t t t t t t t t t t t t t t Journal Entry t,0 9,0,000,000 -----,000 6,00 7,000 7,00,0, L.F. Debit Credit t t t t t t. t t w t t t t t t t t t t t t t t t t t t t t t t,000,000 t t
t et t et 4. t et t et t et t et t et t et t et t et t et t et w Solaman Capital A/c.,000 To Solaman Loan A/c,000 (Being amount due to solaman transferred to to solaman loan A/c) Solaman Capital A/c. 0,000 To To Solaman Loan A/c,000,000 (Being part of the amount loan and part of the amount cash paid to Solaman A/c) Trading Profit & Loss A/c Mr. Murugan for the year end.0. Rs Rs Rs To opening stock,600 By sales 7,000 To purchase 4,000 By Closing To Gross Profit c/d 9,00 stock 4,700 (Transferred to profit and loss A/c) 89,700 89,700 To salaries Add: unpaid,000 7,000 By Gross Profit 9,00 b/d To Rent 4,00 (Transferred To Insurance premium 900 from Trading To Net Profit c/d A/c) (Transferred to capital A/c) 6,700 9,00 9,00 Balance sheet of Mr. Murugan for the year ended..0 Liabilities Rs Assets Rs Rs Sundry creditors 0,00 Cash,00 Salaries unpaid,000 Bank,00 Capital,0,000 stock 4,700 Add : Net Profit debtors 7,00 6,700 Machinery 84,000,6,700 Less : awing,000,,700 t t t t t t t t t t t t t t t t,,00,,00 Journal Entry L.F. Debit Credit t t Share Capital A/c. To share for forfeiture A/c To share final call A/c (Being share for forfeiture for the nonpayment of final call). Share for forfeiture A/c. To share capital A/c (Being share were re-issued) Share for forfeiture A/c. To Capital reserve A/c (Being forfeiture transferred to reserve) t t t t t t w t t t t t t t t t t t t t t t t t t t t t t t t,000 800 00 t w t t t t t t t t t t t t t t t t t t 00 700 00 t t,000 t t 00 t t
44. t et (i) Calculation of Credit Sales : Total Debtors Account To Balance b/d To Credit sales t et t et t et t et t et t et t et t et t et t et t et w t t t t,00,000,7,000 By Cash received By Discount allowed By Returns Inwards By Balance c/d,90,000,000 70,000 6,7,000 6,7,000 (ii) Calculation of Credit Purchases : Total Creditors Account To Discount received To Cash paid To Return outwards To Balance c/d,000 40,000 0,000 0,000 By Balance b/d By Credit Purchases (Balancing Figure) 6,000 8,000 t t t t t t,0,000,0,000 Total Purchases = Cash purchases + Credit purchases =,000 + 8,000 = To Sales = Cash sales + Credit sales = 0,000 +,7,000 = 6,,000 Journal Entry L.F. Debit Credit t t t t Investment A/c. To Revaluation A/c (Profit item Credited to Revaluation A/c) Revaluation A/c. To Stock A/c To Furniture A/c To Machinery A/c To Workmen s Compensation A/c (Loss items debited to revaluation A/c) Radha Capital A/c. Amudha Capital A/c. To Revaluation A/c (Loss on revaluation transferred to old partners capital accounts in the old ratio) t t t t t t t t t t t w t t t t t t t t t t t t t t t t t t t t t t t t w t t t t t t t t t t t t t t 8,000 78,000 4,000 8,000 t t 8,000 0,000 4,000 t t 60,000 t t t t t t
4. t et To Stock A/c To Furniture A/c To Machinery A/c To workmen s Compensation A/c t et t et t et t et R s Revaluation Accounts Rs Rs 8,000 0,000 By Investments A/c By Loss on revaluation transferred to : 8,000 4,000 Radha s Capital A/c Amudha s CapitalA/c 4,000 60,000 78,000 78,000 Gross Profit Gross Profit Ratio = x 00 Sales = Sales cost of goods sold =,00,000 -,0,000 =,0,000,0,000 = x 00,00,000 Gross Profit Ratio = 0% Net Profit = x 00 Sales 0,000 =,00,000 x 00 Net Profit Ratio = 0% Current Ratio = Current asset Current liability Current assets = 60,000 Current liability = 0,000 = 60,000 0,000 = : Average Profit = Net profit - Partner s remuneration = 4,000-9,000 = 4,000 (ii) Normal Profit = Capital Employed x Normal rate of return =,00,000 x 0 t et t et t et t et t et 46. t et t et w t t t t t t t t t t t t t t t t w t t t t t t t t t t t t t t t t 00 = 0,000 (iiii) Super Profit = Average Profit Normal Profit = 4,000 0,000 =,000 (iv) Goodwill = Super profit x No. of years purchase =,000 x = 0,000 t t t t Statement of affairs as on st March 004 Liabilities Assets Sundry creditors Expenses out standing Closing capital (B/F),000,000,6,00 Bank balance Stock Sundry debtors Furniture Cash in hand 8,000 80,000 0,000,00,000 t t t t t t t t t t,4,00,4,00 t t t w t t t t t t t t t t t t t t t t t t t t t t t t
t et t et t et t et t et t et t et t et 47. t et t et t et t et w Current Ratio = Statement of profit or loss Closing capital Add : awings (000x) t t t t Less : Additional capital Adjusted closing capital Less : Opening capital t t Current Assets Current Liabilities Loss,6,00,000,8,00 0,000,08,00,0,000,00 Current Assets = Stock + Debtors + Cash+ Prepaid expenses t t =,000 + 9,000 +,000 + 0,000 = 48,000 Current liabilities = Creditors t t Current Ratio = Liquid Ratio = = 4,000 48,000 4,000 = : Liquid Assets t t Current Liabilities Liquid Assets = Current Asset (Stock + Prepaid expenses) t t Liquid Ratio = = 48,000 (,000 +,000) = 48,000 4,000 = 4,000 4,000 4,000 = : t t Journal Entry L.F. Debit Credit Bad debts A/c. To Sundry debtors A/c (Being Bad debts provided) Profit & Loss A/c To Provision for Bad & doubtful Debts A/c (Being Bad & doubtful debts recordal) Profit & Loss A/c To provision for discount on debtors A/c (Being discount on debtors provided) t t t t t t t t w t t t t t t t t t t t t t t t t,000 t t,000 t t,40 t t t t t w t t t t t t t t t t t t t t t t t t,000,000 t t t t,40 t t
t et t et t et t et t et t et t et t et t et t et w Depreciation A/c To Machinery A/c (Being depreciation provided) Closing stock A/c To Trading A/c (Being closing stock recorded) t t 0,000,40 0,000,40 Transfer Entry L.F. Debit Credit Profit and Loss A/c,000 To Bad debts,000 (Being bad debts transferred to profit & Loss A/c) t t t t Journal Entry L.F. Debit Credit t t To share application A/c (Being application money received). Share application A/c. To share capital A/c (Being share application transferred to share capital) Share allotment A/c. To share capital A/c (Being allotment money due). To share allotment A/c (Being allotment money received) t t t t t t Share first call A/c To share capital A/c (Being first call money due) To share first call A/c (Being first call money received) Share final call A/c To share capital A/c (Being final call money due) To share final call A/c (Being final call money received) t t t t t t w t t t t t t t t.... w t t t t t t t t 7,000 7,000 t t 7,000 t t 7,000 t t 8,000 8,000 t t 8,000 t t 8,000 t t 7,000 t t 7,000 7,000 t t 7,000 t t 8,000 t t 8,000 8,000 t t 8,000 t t SHRI VIDHYABHARATHI MATRIC HR. SEC. SCHOOL t et t t t t t t SAKKARAMPALAYAM, AGARAM (POST), ELACHIPALAYAM TIRUCHENGODE (TK), NAMAKKAL(DT) 67 0 CELL: 996-77, 9869-,99948-9480 t et t t t t t t t