Page 142 - AAAXII

M.134 An Aid to Accountancy—CBSE XII

Answers

PART A
1. Income and Expenditure Account is a Nominal Account, which is prepared by a
Not-for-Profit Organisation at the end of the accounting period matching revenue
expenses and losses with revenue incomes to determine surplus or deficit for the period.
Or
It will be recorded on the credit (i.e., income) side of Income and Expenditure Account.
2. It is joint and several, i.e., partners are liable for firm’s debts jointly with others partners
and also individually in their own capacity. Net Private Assets of partners (i.e., Private
Assets – Private liabilities) can be used to pay Firm’s Debts if Firm’s Assets are less
than Firm’s Debts.
3. Hidden Goodwill = (` 2,00,000 × 4/1) – (` 5,40,000 – ` 1,00,000 + ` 2,00,000)
= ` 1,60,000.
Z’s Share of Goodwill = ` 1,60,000 × 1/4 = ` 40,000.
Or
JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
2018
April 1 A’s Capital A/c ...Dr. 80,000
B’s Capital A/c ...Dr. 20,000
To Profit and Loss A/c 1,00,000
(Being the loss distributed between A and B in their old ratio)

4. JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
Ramesh’s Capital A/c ...Dr. 12,000
Mohan’s Capital A/c ...Dr. 12,000
To Naresh’s Capital A/c (` 72,000 × 2/6) 24,000
(Being the share of goodwill credited to Naresh by debiting the
gaining Partners’ Capital Accounts in their gaining ratio of 1 : 1)
Working Note: Calculation of Gaining Ratio:
Gain = New Share – Old Share
1 2 1 1 1 1 1 1
Surender’s Gain = - = 0; Ramesh’s Gain = - = ; Mohan’s Gain = - =◊
3 6 3 6 6 3 6 6
Thus, Gaining Ratio of Ramesh and Mohan = 1/6 : 1/6 = 1 : 1.
5. As per Section 52(2) of the Companies Act, 2013, Securities Premium Reserve can
be used for issuing fully paid bonus shares. Hence, the management of Shubh Ltd.
should use the Securities Premium of ` 15,00,000 by issue of bonus shares to the
shareholders in the ratio of ` 15,00,000: ` 60,00,000 or 1 : 4, i.e., one bonus share for
every four shares held.