Page 355 - AAAXII

Model Test Papers M.339

Answers

PART A
1. (i) Membership Subscription.
(ii) General Donations.
Or
It is credited to Income and Expenditure Account.
2. (i) When the partners decide to change the profit-sharing ratio.
(ii) When a new partner is admitted.
(iii) When a partner retires or dies.
Or
Change in Profit-sharing ratio means increase in share of profit of one or more partners
and decrease in share of profit of one or more partners.
3. Number of Years’ purchase means the number of years during which the purchaser
of goodwill expects that the profits due to goodwill are likely to be earned in future.
4. Profit and Loss Appropriation Account is prepared to show the distribution
of Net Profit among the partners whereas Profit and Loss Adjustment Account
(or Revaluation Account) is prepared to ascertain the Gain (Profit) or Loss
on revaluation of assets and reassessment of liabilities at the time of reconstitution
of partnership, i.e., Change in Profit-sharing Ratio, Admission, Retirement or Death
of a Partner.
5. Discount on Issue of Debentures = ` 1,00,000 × 6/100 = ` 6,000.
Calculation of Amount of Discount on Issue of Debentures to be Written off
At the end of Debentures Ratio Discount to be
Outstanding (`) Written off
1st Year 1,00,000 5 ` 6,000 × 5/15 = ` 2,000
2nd Year 80,000 4 ` 6,000 × 4/15 = ` 1,600
3rd Year 60,000 3 ` 6,000 × 3/15 = ` 1,200
4th Year 40,000 2 ` 6,000 × 2/15 = ` 800
5th Year 20,000 1 ` 6,000 × 1/15 = ` 400
Total 15 ` 6,000
Or
Issue of debentures as a collateral security means issue of debentures as an additional
security against the loan along with the principal security.

6. Calculation of Anju’s Share in Profits:
Profit
Percentage of Profit to Sales (for the year 2017–18) = × 100
Sales
` 90,000
= × 100 = 15%
` 6,00,000
Estimated Profit till the date of Anju’s death = ` 1,00,000 × 15% = ` 15,000
Anju’s share in estimated Profit = ` 15,000 × 3/6 = ` 7,500.