Principles and Practice of Accounting - November 2020

1. (a) State with reasons, whether the following statements are True or 6x2 =12 False. (i) In case of admission of a new partner in a partnership firm, the profit/loss on revaluation account is transferred to all partners in their new profit sharing ratio. (ii) In the balance sheet of X Limited, preliminary expenses amounting to % 5 lakhs and securities premium account of % 35 lakhs are appearing: The accountant can use the balance in securitics premium account to…

Book Showed a Bank overdraft of 49 % 98,700. On comparison he finds the following : (1) Out of the total cheques of & 8,900 issued on 27" March, one cheque of & 7,400 was presented for payment on 4" April and the other cheque of % 1,500 handed over to the customer, was returned by him and in lieu of that a new cheque of the same amount was issued to him on 1 April. No entry for the…

(a) Maya consigned 400 boxes of shaving brushes, each box containing 5 100 shaving brushes. Cost price of each box was € 3,000. Maya spent % 500 per box as cartage, freight, insurance and forwarding charges. One box was lost on the way and Maya lodged claim with insurance company and could get % 2,700 as claim on average basis. Consignee took delivery of the rest of the boxes and spent % 1,99,500 as nonrecurring expenses and % 1,12,500 as…

(a) Mjs. TB is a partmership firm with the partners A, B and C sharing 10 profits and losses in the ratio of 3 : 2: 5. The balance sheet of the firm as on 30" June, 2020 was as under : Balance Sheet of M/s. TB as on 30-6-2020 Liabilities Amount Assets Amount A’s Capital A/c 1,24,000 | Land 1,20,000 B’s Capital A/c 96,000 | Building 2,20,000 C’s Capital A/c 1,60,000 | Plant & Machinery 4,00,000 Long Term Loan…

M/s. Applied Laboratories were unable to agree the Trial Balance as 5 on 31 March, 2020 and have raised a suspense account for the difference. Next year the following errors were discovered : (i) Repairs made during the year were wrongly debited to the building A/c -— % 12,500. ii) The addition of the ‘Freight’ column in the purchase journal was short by & 1,500, (iii) Goods to the value of 2 1,050 returned by a customer, Rani & Co…

ABC Limited issued 20,000 equity shares of % 10 each payable as : 10 — %2 per share on application — %3 per share on allotment — %4per share on first call — 1 per share.on final call All the shares were subscribed. Money due on all shares was fully received except for Mr. Bird, holding 300 shares, who failed to pay first call and final call money. All those 300 shares were forfeited. The forfeited shares of Mr. Bird…