Page 517 - AAAXII

Model Test Papers M.495

Or
A, B and C are partners in a trading firm sharing profits in the ratio of 3 : 2 : 1. Their
Balance Sheet as at 31st March, 2018 stood as follows:
Liabilities ` Assets `
Sundry Creditors 12,500 Cash at Bank 21,500
Employees’ Provident Fund 20,000 Sundry Debtors 15,000
General Reserve 18,000 Less: Provision for Doubtful Debts 1,500 13,500
Capital A/cs: Stock 12,500
A 40,000 Investments 8,000
B 21,000 Office Equipments 14,000
C 20,000 81,000 Furniture 12,000
Building 50,000
1,31,500 1,31,500
B retired on 1st April, 2018 subject to following:
(i) A printer purchased on 1st October, 2017 for ` 2,000 debited to Office Expenses
Account is to be brought into account charging depreciation @ 10% p.a.
(ii) Building revalued at ` 75,000. Furniture is to be written-down by ` 2,000 and
stock is reduced to ` 10,000.
(iii) Provision for Doubtful Debts is to be calculated @ 5% on Sundry Debtors.
(iv) Goodwill of the firm is valued at ` 18,000.
(v) Market value of Investments is ` 7,500.
(vi) ` 20,550 from B’s capital will be transferred to his Loan Account and the balance
will be paid to him by cheque.
(vii) A and C will share profits and losses in the ratio of 2 : 1 and their capitals are
to be adjusted in the profit-sharing ratio.
Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet
immediately after B’s retirement. (8)
17. (a) On 1st April, 2014, Strong Ltd. acquired assets of the value of ` 8,00,000 and liabilities
of ` 2,70,000 from Star Ltd. at an agreed value of ` 5,50,000. Strong Ltd. issued
10% Debentures of ` 100 each at a premium of 10% in full settlement of purchase
consideration. The Debentures were redeemable on 31st March, 2018 at 5% premium.
The company met the requirements of the Companies Act, 2013 regarding
Debentures Redemption Reserve and Investment and redeemed the debentures.
Pass entries to record the above including redemption of debentures. Ignore interest
on debentures.
(b) Complete the following Journal entries:

Date Particulars L.F. Dr. (`) Cr. (`)
Share Capital A/c ...Dr. 140
To ? ?
To ? ?
(Being 20 shares forfeited for non-payment of first call of ` 2)
? ...Dr. ?
To ? ?
To ? ?
(Being 15 forfeited shares reissued as ` 7 per share paid-up
for ` 8 per share)
? ...Dr. ?
To ? ?
(Being the transfer of gain (profit) on reissue)