Page 135 - AAAXII

Model Test Papers M.127

7. State any three differences between Income and Expenditure Account and Profit and
Loss Account. (3)
8. Capital Accounts of X and Y stood at ` 10,00,000 and ` 7,50,000 respectively after
adjustments in respect of the drawings and the net profits for the year ended
31st March, 2018. It was subsequently known that interest on capital and also interest
on drawings @ 5% p.a. were not provided before distributing the profit. Drawings of
the partners had been: X—` 30,000 drawn at the end of each quarter and Y—` 45,000
at the end of each half year. Profit for the year as adjusted amounted to ` 5,00,000.
The partners share profits in the ratio of 3 : 2.
Pass Journal entries to rectify the above error. (3)
9. Amrit Dhara Ltd. issued 15,000; 10% Debentures of ` 100 each at par which were
repayable at a premium of 10%. On the date of maturity, company decided to redeem
the above 10% Debentures as per the terms of issue, out of profits. Surplus, i.e., Balance
in Statement of Profit and Loss shows a credit balance of ` 20,00,000 on this date. The
debentures were redeemed on due date.
Pass necessary Journal entries for redemption of debentures. Investment, as required
by Rule 18(7)(c) of the Companies (Share Capital and Debentures) Rules, 2014, was
made on 1st April of the financial year in which redemption is due and realised at
book value at the end of the same financial year. Interest on the investment is also
received @ 8% p.a. for the full year.
Ignore interest on debentures. (3)
10. Fill in the blank spaces in the Journal entries given below:

JOURNAL OF STAR LTD.
Date Particulars L.F. Dr. (`) Cr. (`)
Sundry Assets A/c ...Dr. 30,00,000
Goodwill A/c ...Dr. 5,00,000
To Sundry Liabilities A/c ?
To Moon Ltd. 32,00,000
(Being the purchase of business of Moon Ltd.)
? ...Dr. ?
Discount on Issue of Debentures A/c ...Dr. ?
To Bills Payable A/c ?
To 8% Debentures A/c ?
(Being 10% of the purchase consideration paid through bill and for
the rest issued ?; 8% Debentures of ` 100 each at a discount of 4%)
Or
Spectrum Ltd. issued 2,000, 10% Debentures of ` 100 each on 1st April, 2016. The
issue was fully subscribed. According to the terms of issue, interest on the debentures
is payable half-yearly on 30th September and 31st March and the tax deducted at
source is 10%. Pass necessary Journal entries related to the debenture interest for the
half-year ending on 31st March, 2018 and transfer of interest on debentures of the
year to the Statement of Profit and Loss. (3)