Page 24 - AAAXII

Model Test Papers M.21

Equity Share Capital A/c ...Dr. 8,000
To Calls-in-Arrears A/c 3,200
To Forfeited Shares A/c 4,800
(Being the forfeiture of 800 shares for non-payment of call)
Bank A/c ...Dr. 19,200
To Equity Share Capital A/c 16,000
To Securities Premium Reserve A/c 3,200
(Being the reissue of forfeited shares at ` 12 per share as fully paid-up)

Forfeited Shares A/c ...Dr. 6,800
To Capital Reserve A/c 6,800
(Being the gain on reissue transferred to Capital Reserve)

PART B

18. There will be no Flow of Cash because purchase of fixed asset on ‘Long-term deferred
payment’ basis involves Non-current Asset and Non-current Liability.

19.
Dr. PROVISION FOR TAX ACCOUNT Cr.
Particulars ` Particulars `
To Bank A/c (Tax Paid) 40,000 By Balance b/d 50,000
To Balance c/d 70,000 By Statement of Profit and Loss (Bal. Fig.) 60,000
(Tax Provided)
1,10,000 1,10,000

20. (a) Major Head: Non-current Assets.
Sub-Head: Fixed Assets—Capital Work-in-Progress.
(b) Provision for Doubtful Debts will be shown as deduction from Trade Receivables
(Sundry Debtors) under Current Assets.
(c) ‘Provision for Doubtful Debts’ is not deducted from the total amount of Trade
Receivables while computing Trade Receivables Turnover Ratio.

Cost of Revenue from Operations
21. (a) Inventory Turnover Ratio =
Average Inventory

` 4,50,000 (WN)
5 =
Average Inventory
∴ Average Inventory = ` 90,000
Let Opening Inventory = x; Closing Inventory = x + ` 12,000

Opening Inventory + Closing Inventory
Average Inventory =
2