CBSE12th20AccountancySet3Key

.pdf
School
Saraland High Sch**We aren't endorsed by this school
Course
ACCOUNT MISC
Subject
Accounting
Date
Dec 22, 2024
Pages
74
Uploaded by ProfRose20832
CBSE 12th 2024 Compartment Accountancy Set-3(67/S/3) Solutions(Accounting for Partnership Firms and Companies)Q.1. (a) Anu, Bina and Roy were partners in a firm sharing profits andlosses in the ratio of 3:2: 1. Roy retired and his share was acquired byAnu. The new profit sharing ratio between Anu and Bina after Roy'sretirement will be:(A) 3:2(B) 3:1(C) 1:1(D) 2:1Solution. (D) 2:1 ,To determine the new profitsharing ratio between Anuand Bina after Roy's retirement, follow these steps:1. Calculate Roy's Share:Roy's share in the firm is (1/6) (since the original ratio is 3:2:1, and thetotal is 6 parts).2. Determine the Share Transferred to Anu:Since Roy's entire share is acquired by Anu, Anu will gain Roy's share,which is 1/6 .3. Calculate the New Share of Anu:Anu's original share was \( \3/6/ \) or \( \1/2/ \).After acquiring Roy's share, Anu’s new share will be:Anu’s new share/ = \1/2/ + 1/6 = \3/6/ + \1/6/ = \4/6/ = \2/3/
Background image
4. Calculate Bina’s Share:Bina's original share was \( \2/6/ \) or \( \1/3/ \).Since Bina's share remains unchanged, it remains \( \1/3/ \).5. Determine the New ProfitSharing Ratio:The new ratio between Anu and Bina is \( \2/3/ \) to \( \1/3/ \), whichsimplifies to \( 2:1 \).Therefore, the new profitsharing ratio between Anu and Bina after Roy'sretirement is:(D) 2:1OR(b) Asha, Yug and Zubin were partners in a firm sharing profits andlosses in the ratio of 4:3: 2. Zubin retired. Zubin's share was acquiredequally by Asha and Yug. The new profit sharing ratio between Ashaand Yug after Zubin's retirement was:(A) 3:2(B) 5:4(C) 4:3(D) 2:1Solution.(B) 5:4 ,To determine the new profit sharing ratio between Ashaand Yug after Zubin's retirement, follow these steps:1. Calculate Zubin’s Share:The original profit sharing ratio is 4:3:2. Thus, the total number of parts is(4 + 3 + 2 = 9).Zubin's share is 2/9 (since Zubin's portion is 2 parts out of the total 9parts).2. Determine the Share Acquired by Asha and Yug:Zubin’s share of 2/9 is to be divided equally between Asha and Yug.Each of them will acquire 1/9 of Zubin’s share.
Background image
3. Calculate the New Share of Asha:Asha's original share was 4/9.After acquiring half of Zubin’s share, Asha’s new share is:Asha’s new share = 4/9 + 1/9 = 5/94. Calculate the New Share of Yug:Yug's original share was 3/9 .After acquiring half of Zubin’s share, Yug’s new share is:Yug’s new share = 3/9 + 1/9 = 4/95. Determine the New ProfitSharing Ratio:The new ratio between Asha and Yug is 5/9 to 4/9 , which simplifies to 5:4.Therefore, the new profit sharing ratio between Asha and Yug after Zubin'sretirement is:(B) 5:4Q.2 (a) Nagar Ltd. issued 6,000, 11% Debentures of ₹ 100 each at adiscount of 10% redeemable at a premium. 'Discount on issue ofdebentures' and 'Premium on redemption of debentures' wereaccounted for through 'Loss on issue of debentures account'. If theamount of 'Loss on issue of debentures' was ₹90,000, then theamount of premium on redemption of debentures was:(A) ₹60,000(B) ₹90,000(C) ₹1,20,000(D) ₹30,000Solution.(D) ₹30,000,To determine the amount of premium on redemptionof debentures given the `Loss on issue of debentures account` is ₹90,000,follow these steps:1.Calculate the Discount on Issue of Debentures:
Background image
Number of debentures issued = 6,000Face value of each debenture = ₹100Total face value = 6,000 × ₹100 = ₹6,00,000Discount = 10% of face valueTotal discount = ₹6,00,000 × 10% = ₹60,0002. Determine the Premium on Redemption:The loss on issue of debentures = Discount on issue + Premium onredemptionGiven: Loss on issue of debentures = ₹90,000Discount on issue = ₹60,000Therefore, Premium on redemption = Loss on issue Discount on issuePremium on redemption = ₹90,000 ₹60,000 = ₹30,000So, the amount of premium on redemption of debentures was:(D) ₹30,000.OR(b) On 1st April, 2022 Surya Ltd. issued 10,000, 12% Debentures of ₹100 each at a premium of 5%. The total amount of interest ondebentures for the year ended 31st March, 2023 will be :(A) ₹1,20,000(B) ₹50,000(C) ₹ 1,00,000(D) ₹1,26,000Solution.To determine the total amount of interest on debentures for theyear ended 31st March, 2023, follow these steps:1. Calculate the Total Face Value of Debentures:Number of debentures issued = 10,000Face value of each debenture = ₹100Total face value = 10,000 × ₹100 = ₹10,00,000
Background image
2. Determine the Interest on Debentures:Interest rate = 12%Total interest = Total face value × Interest rateTotal interest = ₹10,00,000 × 12% = ₹1,20,000The premium on debentures affects the issuance price but does not affectthe calculation of interest on debentures. Therefore, the total amount ofinterest for the year is simply the interest rate applied to the face value ofthe debentures.So, the total amount of interest on debentures for the year ended 31stMarch, 2023 will be:(A) ₹1,20,000..(a) Deepa, Elton and Frank were partners in a firm sharing profits inthe ratio of 2:2: 1. With effect from 1st April, 2023 they decided tochange their profit sharing ratio as 1:2:2. There existed a DebitBalance of Profit and Loss Account of ₹ 50,000 in the books of thefirm on the date of change in profit sharing ratio. The partnersdecided to retain the Debit Balance of Profit and Loss Account in thebooks. The adjustment entry will be :JournalParticularsDr. Amount(₹)Cr.Amount(₹)(A)Deepa's Capital A/cDr.10,000To Frank's Capital A/c10,000
Background image
(B)Deepa's Capital A/cDr.5,000To Frank's Capital A/c5,000(C)Frank's Capital A/cDr.10,000To Deepa's Capital A/c10,000(D)Frank's Capital A/c5,000To Deepa's Capital A/c5,000Solution.
Background image
(b) Som, Pam and Ron were partners in a firm sharing profits in theratio of 7:2: 1. With effect from 1st April, 2023 they decided to changetheir profit sharing ratio to 1:27. There existed a Credit Balance in theProfit and Loss Account of ₹ 1,00,000 on the date of change in profitsharing ratio in the books of the firm. The partners decided to retainthe Credit Balance in Profit and Loss Account in the books. Theadjustment entry will be :JournalParticularsDr. Amount(₹)Cr. Amount(₹)(A)Ron's Capital A/cDr.20,000To Som's Capital A/c20,000Ron's Capital A/cDr.60,000To Som's Capital A/c60,000
Background image
Som's Capital A/cDr.20,000To Ron's Capital A/c20,000Som's Capital A/cDr.60,000To Ron's Capital A/c60,000Solution.
Background image
Q.4. There are two statements Assertion (A) and Reason (R):Assertion (A): Court does not intervene in case of dissolution ofpartnership.Reason (R): Dissolution of partnership takes place by mutualagreement among partners.Choose the correct option from the following:(A) Both Assertion (A) and Reason (R) are correct, but Reason (R) isnot the correct explanation of Assertion (A).(B) Both Assertion (A) and Reason (R) are correct and Reason (R) isthe correct explanation of Assertion (A).(C) Assertion (A) is correct, but Reason (R) is incorrect.Assertion (A) is incorrect, but Reason (R) is correct.Solution.To evaluate the two statements:Assertion (A): Court does not intervene in case of dissolution ofpartnership.Reason (R): Dissolution of partnership takes place by mutual agreementamong partners.Here's a detailed breakdown:1.Assertion (A):This statement is not entirely correct. While dissolution by mutualagreement doesn't require court intervention, dissolution due to disputes,insolvency, or other reasons might require court involvement.2. Reason (R):
Background image
This statement is generally correct. Dissolution by mutual agreement is acommon way to end a partnership, and in such cases, court intervention isnot needed.Given the statements:(A) Both Assertion (A) and Reason (R) are correct, but Reason (R) is notthe correct explanation of Assertion (A).This option is accurate. The Reason (R) explains that dissolution by mutualagreement does not involve the court, but it does not fully explain theAssertion (A) as court intervention may still be necessary in otherdissolution scenarios.(B) Both Assertion (A) and Reason (R) are correct and Reason (R) is thecorrect explanation of Assertion (A).This is incorrect because Assertion (A) does not fully account for allscenarios of dissolution.(C) Assertion (A) is correct, but Reason (R) is incorrect.This is incorrect because Reason (R) is correct; however, Assertion (A) isnot fully accurate.(D) Assertion (A) is incorrect, but Reason (R) is correct.This option is partially correct. While Assertion (A) is not entirely correct,Reason (R) is accurate.Correct Option: (A) Both Assertion (A) and Reason (R) are correct, butReason (R) is not the correct explanation of Assertion (A).Q.5 (a) Money not received from shareholders on allotment or calls is:(A) debited calls in advance.(B) credited to calls in advance.(C) debited calls in an arrears account.(D) credited to calls in arrears account.Solution. (D) credited to calls in arrears account.When money is notreceived from shareholders on allotment or calls, the correct accountingtreatment is:
Background image
Calls in Arrears: This account is used to record the amount not receivedfrom shareholders on calls or allotment. It represents the unpaid amount onshares that shareholders were required to pay but have not yet paid.So the correct answer is (C) debited to calls in the arrears account.OR(b) Those debentures where a charge is created on the assets of thecompany for the purpose of payment in case of default are known as:(A) Secured Debentures(B) Registered Debentures(C) Specific Coupon Rate Debentures(D) Redeemable DebenturesSolution. (A) Secured Debentures,Debentures with a charge created onthe assets of the company to secure repayment in case of default areknown as (A) Secured Debentures.Secured debentures are backed by a charge on the company's assets,providing additional security to debenture holders in case the companyfaces financial difficulties.Read the following hypothetical situation and answer questions No. 7and 8 on the basis of the given information:Daksh and Ekansh are partners in a firm sharing profits and losses inthe ratio of 3: 1. Their capitals were ₹1,60,000 and ₹ 1,00,000respectively. As per partnership deed, they were entitled to interest oncapital @ 10% p.a.. The firm earned a profit of ₹ 13,000 for the yearended 31st March, 2023.Q.7. Daksh's interest on capital will be :(A) ₹ 5,000(B) ₹8,000(C) ₹ 16,000(D) ₹10,000
Background image
Solution. (C) ₹ 16,000Q.8.Ekansh's share of profit/loss will be :(A) Nil(B) ₹9,750 (Loss)(C) ₹3,250 (Loss)(D) ₹9,750 (Profit)Solution.(C) ₹3,250 (Loss),Q.4 Kamini, Lata and Meera were partners in a firm sharing profits andlosses equally. Neel was admitted as a new partner for an equal sharein the profits of the firm. Neel brought his share of capital andpremium for goodwill in cash. On the date of admission of Neel,
Background image
goodwill appeared in the books at ₹1,20,000. The existing goodwill isto be written off among :(A) Old partners in old ratio.(B) New partners in a new ratio.(C) Sacrificing partners in sacrificing ratio.(D) Old partners in sacrificing ratio.Solution. (D) Old partners in sacrificing ratio.When a new partner is admitted to a firm and brings in capital and goodwill,the existing goodwill in the books needs to be adjusted to reflect thechange in the partnership. Here's how the process works:1. Goodwill Adjustment:When a new partner is admitted, the existing goodwill in the firm's booksmust be written off among the old partners. This is done because thegoodwill that was previously recorded in the books was based on theprofitsharing arrangement that existed before the new partner joined.2. Goodwill WriteOff:Since the goodwill is being adjusted due to the admission of a newpartner, it should be written off among the old partners in the ratio of theiroriginal profitsharing ratio. This is because the new partner has not yetcontributed to the goodwill that was previously in the books.3. Old Partners’ Sacrifice:The existing partners must bear the cost of the goodwill as they are theones who had been sharing profits based on that goodwill. This writeoff isdone in the old profitsharing ratio, as the goodwill was accumulated duringtheir time.4. Answer:The correct option is to write off the existing goodwill among the oldpartners in the ratio they were sharing profits before the new partner wasadmitted.
Background image
Therefore, the existing goodwill should be written off among:(D) Old partners in sacrificing ratio.Q.5. Arjun, Babita and Charlie were partners in a firm sharing profitsin the ratio of 2:2:1. They admitted Dheeraj for a share in the profits ofthe firm. He has to contribute proportionate capital to acquire 1 th 5share in future profits. On the date of admission, the capitals after alladjustments relating to goodwill and revaluation of assets andliabilities, were: Arjun ₹62,000, Babita ₹52,000 and Charlie ₹ 36,000.The capital brought by Dheeraj will be :(A) ₹37,500(B) ₹30,000(C) ₹32,500(D) ₹35,000Solution. (A) ₹37,500,
Background image
Q.11.Nikhil and Sharat were partners in a firm sharing profits andlosses in the ratio of 4: 3. Nikhil withdrew ₹ 6,000 on the first day ofevery quarter for the year ended 31st March, 2023. Interest ondrawings is to be charged @ 5% p.a. Interest on Nikhil's drawings willbe calculated for :(A) 6 months(B) 4.5 months(C) 7.5 months(D) 3 monthsSolution. (C) 7.5 months,To calculate the interest on Nikhil’s drawings forthe year ended 31st March 2023, you need to determine the time period forwhich each withdrawal will be considered for interest calculation.Steps to Calculate Interest on Drawings:1. Determine the Withdrawal Dates and Amounts:Nikhil withdrew ₹6,000 on the first day of each quarter.The quarters are:1st Quarter: 1st April to 30th June2nd Quarter: 1st July to 30th September3rd Quarter: 1st October to 31st December4th Quarter: 1st January to 31st March2.Calculate the Time Period for Each Withdrawal:
Background image
For the 1st withdrawal (1st April): Interest is calculated for the full year (12months).For the 2nd withdrawal (1st July): Interest is calculated for 9 months.For the 3rd withdrawal (1st October): Interest is calculated for 6 months.For the 4th withdrawal (1st January): Interest is calculated for 3 months.3.Calculate Total Time Period:Sum the periods for each withdrawal:1st April withdrawal: 12 months1st July withdrawal: 9 months1st October withdrawal: 6 months1st January withdrawal: 3 monthsTotal time periods for calculating interest = 12 + 9 + 6 + 3 = 30 months4. Average Time for Calculating Interest on Drawings:Since interest is calculated on the average time period, divide the total bythe number of withdrawals to get the average time.Average time = 30//4/ = 7.5 monthsQ.12 Pawan, Kavita and Gaurav were partners in a firm. The firm wasdissolved. Creditors took over furniture of book value of ₹ 60,000 at10% less than the book value in part settlement of their amount of₹60,000. The balance amount was paid to them through cheque. Theamount paid through cheque will be :(A) ₹ 5,000(C) ₹ 54,000(B) ₹6,000(D) NilSolution.(B) ₹6,000,To determine the amount paid to the creditors throughcheque after they took over the furniture, follow these steps:Steps to Calculate the Amount Paid Through Cheque:1.Determine the Discount on Furniture:
Background image
The furniture has a book value of ₹60,000.Creditors took over the furniture at 10% less than its book value.Discount = 10% of ₹60,000Discount = 10//100/x 60,000 = ₹6,000Therefore, the creditors took the furniture for:Value of Furniture Taken Over = ₹60,000 ₹6,000 = ₹54,0002. Calculate the Amount Paid Through Cheque:The total amount owed to creditors = ₹60,000.The value of the furniture taken over by creditors = ₹54,000.The balance amount to be paid through cheque is:Amount Paid Through Cheque = ₹60,000 ₹54,000 = ₹6,000Q.13 (a) Renu, Trilok and Mansi were partners in a firm sharing profitsand losses in the ratio of 9 : 6 : 5. Hina was admitted as a partner for10 1 th share in the profits which she acquired equally from Renu andTrilok. The new profit sharing ratio after Hina’s admission will be : 1(A) 5 : 5 : 2 : 8(B) 5 : 5 : 8 : 2(C) 8 : 2 : 5 : 5(D) 8 : 5 : 5 : 2Solution.1. Calculate the Total Share Available for Hina:Hina is admitted for 1/10 of the profits.This share is acquired equally from Renu and Trilok.2. Find the Share Given by Renu and Trilok:Renu's share given = 1/20 (half of Hina's share).Trilok's share given = 1/20 (half of Hina's share).
Background image
3. Calculate the New Shares for Renu, Trilok, and Mansi:Renu’s original share = 9/20.Renu’s new share = 9/20 1/20 = 8/20 = 2/5.Trilok’s original share = 6/20.Trilok’s new share = 6/20 1/20 = 5/20 = 1/4.Mansi’s share remains the same as she does not give any share to Hina.Mansi’s new share = 5/20 = 1/4.Hina’s share = 1/10.4. Calculate the New Profit Sharing Ratio:Renu’s new share = \(\2/5\).Trilok’s new share = \(\1/4/\).Mansi’s new share = \(\1//4/\).Hina’s share = \(\1//10/\).Convert these tions to a common denominator (20):Renu’s new share = \(\8//20/\).Trilok’s new share = \(\5//20/\).Mansi’s new share = \(\5//20/\).Hina’s share = \(\2//20/\).Simplify the ratios:Renu : Trilok : Mansi : Hina = \(8 : 5 : 5 : 2\).Therefore, the new profitsharing ratio is:(D) 8 : 5 : 5 : 2OR(b) Ashu and Ria were partners in a firm sharing profits and losses inthe ratio of 4 : 3. They admitted Nitu for a 7 3 th share in the profits of
Background image
the firm, which she took 7 2 th from Ashu and 7 1 th from Ria. Thenew profit sharing ratio between Ashu, Ria and Nitu will be :(A) 4 : 3 : 3(B) 2 : 1 : 3(C) 2 : 2 : 3(D) 4 : 3 : 2Solution.To calculate the new profitsharing ratio after Nitu's admission:1. Calculate the Total Share Available for Nitu:Nitu is admitted for \(\3//7/\) of the profits.This share is taken \(\2//7/\) from Ashu and \(\1//7/\) from Ria.2. Find the Share Given by Ashu and Ria:Ashu’s share given = \(\2//7/\).Ria’s share given = \(\1//7/\).3. Calculate the New Shares for Ashu and Ria:Ashu’s original share = \(\4//7/\).Ashu’s new share = \(\4//7/ \2//7/ = \2//7/\).Ria’s original share = \(\3//7/\).Ria’s new share = \(\3//7/ \1//7/ = \2//7/\).Nitu’s share = \(\3//7/\).4. Calculate the New Profit Sharing Ratio:Ashu’s new share = \(\2//7/\).Ria’s new share = \(\2//7/\).Nitu’s share = \(\3//7/\).Therefore, the new profitsharing ratio is:(B) 2 : 2 : 3Q.14 There are two statements Assertion (A) and Reason (R):
Background image
Assertion (A): The maximum number of partners in a partnership firmare 50.Reason (R): The maximum number of partners is prescribed by thePartnership Act, 1932.Choose the correct option from the following:(A) Both Assertion (A) and Reason (R) are correct, but Reason (R) isnot the correct explanation of Assertion (A).(B) Both Assertion (A) and Reason (R) are correct and Reason (R) isthe correct explanation of Assertion (A).(C) Assertion (A) is correct, but Reason (R) is incorrect.(D) Assertion (A) is incorrect, but Reason (R) is correct.Solution. (D) Assertion (A) is incorrect, but Reason (R) is correct.Let'sbreak down the statements to determine their correctness:Assertion (A):The maximum number of partners in a partnership firm are 50."Partnership Act, 1932: The Act does not explicitly state that the maximumnumber of partners is 50. Instead, the Act states that a partnership firm canhave up to 20 partners in a partnership (general partnership) and up to 10partners in the case of a banking business.Reason (R):"The maximum number of partners are prescribed by the Partnership Act,1932."Partnership Act, 1932: This is correct in the sense that the Act does setlimits on the number of partners. However, the specific limits are:General partnerships: Maximum of 20 partners.Banking partnerships: Maximum of 10 partners.Analysis:Assertion (A): The number stated (50) is not correct according to thePartnership Act, 1932.Reason ® : It is correct that the Act prescribes limits on the number ofpartners.
Background image
Correct Option:(D) Assertion (A) is incorrect, but Reason (R) is correct.Q.15 Beeta Ltd. offered for subscription 1,00,000 equity shares of ₹10each at a premium of 100% payable entirely on application.Applications were received for 5,00,000 equity shares. The companydecided to allot the shares on a prorata basis to all the applicants.The amount received by the company on application was:(A) ₹1,00,00,000(B) ₹20,00,000(C) ₹1,20,00,000(D) ₹80,00,000Solution.(A) ₹1,00,00,000,Amount Received by the Company onApplicationGiven:Equity shares offered = 1,00,000 sharesPremium per share = 100% of ₹10 = ₹10Total price per share = ₹10 (face value) + ₹10 (premium) = ₹20Applications received for = 5,00,000 sharesAllotment is on a prorata basis.Total amount receivable = 5,00,000 shares × ₹20 = ₹1,00,00,000Answer:(A) ₹1,00,00,000Q.16. The amount of share capital which a company is authorised toissue by its Memorandum of Association is called:(A) Issued capital(B) Subscribed capital(C) Reserve capital(D) Nominal capitalSolution. (D) Nominal capital,The amount of share capital which acompany is authorized to issue by its Memorandum of Association is called(D) Nominal capital
Background image
Explanation:Nominal Capital (or Authorized Capital) refers to the maximum amount ofcapital that a company can legally issue as stated in its Memorandum ofAssociation.Issued Capital is the part of the nominal capital that has been issued toshareholders.Subscribed Capital is the portion of the issued capital that has beensubscribed to by shareholders.Reserve Capital refers to the portion of the capital that the companydecides to keep in reserve and not to be called upon except in the event ofa company winding up.So, the correct term for the amount of share capital authorized to be issuedis "Nominal Capital."Q.17. Falak, Girdhar and Hemang were partners in a firm sharingprofits and losses in the ratio of 6:31. Girdhar retired. Falak andHemang decided to share profits in future in the ratio of 3: 2. On theday of Girdhar's retirement, goodwill of the firm was valued at ₹1,00,000. Calculate gaining ratio and pass necessary journal entry torecord the treatment of goodwill on Girdhar's retirement.Solution.To handle the situation of Girdhar's retirement and thesubsequent treatment of goodwill, follow these steps:1. Calculation of Gaining Ratio1.1. Calculate the Old Profit Sharing Ratios:Falak: 6/10Girdhar: 3/10Hemang: 1/101.2. New Profit Sharing Ratio between Falak and Hemang:Falak: 3/5Hemang: 2/5
Background image
1.3. Calculate the Share of Girdhar to be Transferred:Girdhar’s share = 3/101.4. Calculate the Gaining Ratio:Falak’s Gain = Falak’s New Share Falak’s Old Share\\Falak’s Gain/ = \3//5/ \6//10/ = \3//5/ \3//5/ = 0\Hemang’s Gain = Hemang’s New Share Hemang’s Old Share\\Hemang’s Gain/ = \2//5/ \1//10/ = \4//10/ \1//10/ = \3//10/\Falak’s Gaining Ratio (No gain, so 0)Hemang’s Gaining Ratio = \(\3//10/\)2. Calculation of Gaining Ratio in Terms of Actual Shares:Total Gained by Hemang = \(\3//10/\) (Girdhar’s share fully transferred toHemang)Gaining Ratio = Hemang’s share / Girdhar’s share = \(\3//10/\)3. Pass the Journal Entry for GoodwillValue of Goodwill = ₹1,00,000Girdhar’s Share of Goodwill = \(\3//10/ \times ₹1,00,000 = ₹30,000\)3.1. Calculate the Amount of Goodwill to be Adjusted:Falak's Share = \(\6//10/ \times ₹30,000 = ₹18,000\)Hemang's Share = \(\4//10/ \times ₹30,000 = ₹12,000\)3.2. Journal Entry to Record Goodwill Adjustment:
Background image
Debit: Girdhar’s Capital Account ₹30,000 (Girdhar’s share of goodwill)Credit: Falak’s Capital Account ₹18,000Credit: Hemang’s Capital Account ₹12,0004. Journal Entry:```plainDr. Girdhar’s Capital Account₹30,000Cr. Falak’s Capital Account₹18,000Cr. Hemang’s Capital Account₹12,000(Being the adjustment of goodwill on retirement of Girdhar)```Q.18. Piyush and Rishabh were partners in a firm with a combinedcapital of ₹ 4,00,000. The normal rate of return was 15%. The profits ofthe last four years were :20192060,00020202190,00020212280,00020222360,000The closing stock for the year 202223 was undervalued by ₹ 10,000.Calculate goodwill of the firm based on capitalisation of averageprofit.Solution.To calculate the goodwill of the firm based on the capitalisation ofaverage profit method, follow these steps:1. Calculate the Average Profit1.1. Adjust the Profit for Undervaluation of Closing Stock:Undervaluation of Closing Stock for 202223: ₹10,000Adjusted Profit for 202223: ₹60,000 + ₹10,000 = ₹70,000
Background image
1.2. Compute the Average Profit:\\Average Profit/ = \\Sum of Adjusted Profits//\Number of Years//\Sum of Adjusted Profits = ₹60,000 (201920) + ₹90,000 (202021) + ₹80,000(202122) + ₹70,000 (202223)\\Sum of Adjusted Profits/ = ₹60,000 + ₹90,000 + ₹80,000 + ₹70,000 =₹3,00,000\Number of Years = 4\\Average Profit/ = \₹3,00,000/4/ = ₹75,000\2. Calculate the Capitalised Value of the Firm2.1. Compute the Capitalisation Value Using the Formula:\\Capitalisation Value/ = \\Average Profit//\Normal Rate of Return//\Normal Rate of Return = 15% or 0.15\\Capitalisation Value/ = \₹75,000/0.15/ = ₹5,00,000\3. Determine the Goodwill
Background image
3.1. Compute Goodwill Using the Formula:\\Goodwill/ = \Capitalisation Value/ \Total Capital/\Total Capital = ₹4,00,000\\Goodwill/ = ₹5,00,000 ₹4,00,000 = ₹1,00,000\Summary:Average Profit: ₹75,000Capitalisation Value: ₹5,00,000Goodwill of the Firm: ₹1,00,000So, the goodwill of the firm based on the capitalisation of average profit is₹1,00,000.Q.19.(a) Sheetal Ltd. purchased a building worth ₹2,50,000, plant andmachinery worth ₹2,00,000, furniture worth ₹ 40,000 and took overliabilities of 30,000 from Poonam Ltd. for a purchase consideration of₹ 4,40,000. The purchase consideration was paid by issuing 12%Debentures of ₹ 100 each at a premium of 10%.Pass the necessary journal entries in books of Sheetal Ltd. to recordthe above transactions.ORSolution.Journal Entries in the Books of Sheetal Ltd.Record the Purchase of Assets and Liabilities Taken Over:Record the Issue of Debentures for Purchase Consideration:Calculate the Total Number of Debentures to be Issued:
Background image
Face value of each debenture = ₹100Premium on each debenture = 10% of ₹100 = ₹10Total issue price per debenture = ₹100 + ₹10 = ₹110Total purchase consideration = ₹4,40,000Number of debentures to be issued = PurchaseConsideration / Issue Price per DebentureNumber of debentures = ₹4,40,000 / ₹110 = 4,000debenturesExplanation:1. Asset and Liability Purchase:The first entry records the purchase of assets and liabilities.The total value of assets and liabilities taken over is credited toPoonam Ltd.'s account, which is the amount to be settled.2. Issue of Debentures:The second entry reflects the settlement of the purchaseconsideration by issuing debentures. The debentures arerecorded at their face value, and the premium on debentures iscredited to the Securities Premium Account.The total value of debentures issued (₹4,00,000) and thepremium (₹40,000) add up to the total purchase considerationof ₹4,40,000.(b) On 1st April, 2023, Simple Ltd. took over assets of ₹ 5,00,000 andliabilities of ₹ 1,00,000 from Temur Ltd. at an agreed value of ₹16,00,000. Simple Ltd. paid the amount to Temur Ltd. as follows:(i) Issued a bank draft of ₹ 1,00,000.(ii) Issued 8% Debentures of ₹ 100 each at a premium of 50% insatisfaction of the balance amount of purchase consideration. Passthe necessary journal entries in the books of Simple Ltd. to record theabove transactions.Solution.To record the transactions of Simple Ltd. taking over assets andliabilities from Temur Ltd., and paying the purchase consideration with a
Background image
combination of a bank draft and 8% debentures issued at a premium, followthese journal entries:Journal Entries in the Books of Simple Ltd.1. Record the Purchase of Assets and Liabilities:DateParticularsDr. (₹)Cr. (₹)Assets Account (e.g., Buildings, Machinery, etc.)Dr. 5,00,000Liabilities AccountDr. 1,00,000To Temur Ltd. Account6,00,000(Being assets and liabilities taken over from Temur Ltd. recorded)2. Record the Payment by Bank Draft:DateParticularsDr. (₹)Cr. (₹)Temur Ltd. AccountDr. 1,00,000To Bank Account1,00,00(Being payment of ₹1,00,000 to Temur Ltd. by bank draft)3. Calculate the Amount to be Paid through Debentures:Total purchase consideration: ₹16,00,000Amount already paid by bank draft: ₹1,00,000Balance to be paid through debentures: ₹16,00,000 ₹1,00,000 =₹15,00,000Calculate Number of Debentures to be Issued:Face value of each debenture = ₹100Premium on each debenture = 50% of ₹100 = ₹50Total issue price per debenture = ₹100 + ₹50 = ₹150Number of debentures to be issued = Balance Amount / Issue Price perDebentureNumber of debentures = ₹15,00,000 / ₹150 = 10,000 debentures4. Record the Issuance of Debentures:DateParticularsDr. (₹)Cr. (₹)
Background image
Temur Ltd. AccountDr. 15,00,000To 8% Debentures Account10,00,000To Securities Premium Account5,00,000(Being balance of purchase consideration settled by issuing 8% debenturesat a premium)Explanation:1. Asset and Liability Purchase:This entry reflects the acquisition of assets and liabilities from Temur Ltd.,with the total purchase consideration debited to Temur Ltd.'s account.2.Bank Draft Payment:This entry records the payment made via bank draft. The bank accountis credited to reflect the cash outflow.3. Debenture Issuance:The entry records the issuance of debentures for the balance of thepurchase consideration. Debentures are recorded at their face value, andthe premium is recorded in the Securities Premium Account.These entries properly account for the combination of cash and debenturepayments for the purchase of assets and liabilities.Q.20. (a) Jatin, Keshav and Lalit were partners in a firm with fixedcapitals of ₹1,20,000, ₹ 1,00,000 and ₹80,000 respectively. As per thepartnership deed, there was a provision for allowing interest oncapitals @ 10% p.a., but entries for the same had not been made forthe last two years.The profit sharing ratio during the last two years was as follows:YearJatinKeshavLalit202122532202223111Pass an adjustment entry at the beginning of the third year, i.e, on 1stApril, 2023.
Background image
Solution.To record the adjustment for interest on capitals for the last twoyears in the books of the firm, we need to follow these steps:1. Calculate Interest on Capitals:Interest Rate: 10% per annumFor 202122:Jatin: ₹1,20,000 × 10% = ₹12,000Keshav: ₹1,00,000 × 10% = ₹10,000Lalit: ₹80,000 × 10% = ₹8,000Total Interest for 202122 = ₹12,000 + ₹10,000 + ₹8,000 = ₹30,000For 202223:Jatin: ₹1,20,000 × 10% = ₹12,000Keshav: ₹1,00,000 × 10% = ₹10,000Lalit: ₹80,000 × 10% = ₹8,000Total Interest for 202223 = ₹12,000 + ₹10,000 + ₹8,000 = ₹30,0002. Calculate Total Interest Payable:Total interest for both years = ₹30,000 (202122) + ₹30,000 (202223) =₹60,0003.Calculate Share of Interest Based on Profit Sharing Ratio:For 202122:Jatin: (5/10) × ₹30,000 = ₹15,000Keshav: (3/10) × ₹30,000 = ₹9,000Lalit: (2/10) × ₹30,000 = ₹6,000For 202223:Jatin: (1/3) × ₹30,000 = ₹10,000Keshav: (1/3) × ₹30,000 = ₹10,000Lalit: (1/3) × ₹30,000 = ₹10,000Total Interest Due:Jatin: ₹15,000 + ₹10,000 = ₹25,000Keshav: ₹9,000 + ₹10,000 = ₹19,000Lalit: ₹6,000 + ₹10,000 = ₹16,000
Background image
OR(b) Meera, Neena and Ojas were partners in a firm sharing profits andlosses in the ratio of 5:32. The partnership deed provided for charginginterest on drawings @ 10% p.a. The drawings of Meera, Neena andOjas during the year ended 31st March, 2023 amounted to ₹60,000,₹50,000 and ₹40,000 respectively. After the final accounts had beenprepared, it was discovered that interest in drawings had not beentaken into consideration. Pass the necessary adjustment entry.Solution.To record the adjustment for interest on drawings, follow thesesteps:Calculate Interest on Drawings:The interest rate on drawings is 10% per annum.Meera’s Drawings: ₹60,000Interest = ₹60,000 × 10% = ₹6,000Neena’s Drawings: ₹50,000Interest = ₹50,000 × 10% = ₹5,000Ojas’s Drawings: ₹40,000Interest = ₹40,000 × 10% = ₹4,000Q. 21 Shringar Ltd. was registered with an authorized capital of5,00,000 divided into equity shares of ₹ 10 each. The company issueda prospectus inviting applications for 20,000 equity shares. Theamount was payable as follows:On Application3 per shareOn Allotment5 per shareOn First and Final call BalanceApplications were received for 19,000 equity shares and allotmentwas made to all the applicants. All the amounts were duly receivedexcept the first and final call on 5,000 shares.
Background image
Present the share capital in the Company's Balance Sheet as perSchedule III, Part I of Companies Act, 2013. Also prepare 'Notes toAccounts' for the same.Solution.To present the share capital in the company's balance sheet andprepare the notes to accounts for Shringar Ltd., follow these steps:1. Share Capital in the Balance SheetBalance Sheet of Shringar Ltd. as per Schedule III, Part I of CompaniesAct, 2013Equity and LiabilitiesShare Capital:Authorized Capital:Equity Shares of ₹10 each: ₹5,00,000Issued, Subscribed, and PaidUp Capital:Issued: 20,000 sharesSubscribed: 19,000 sharesPaidUp: 14,000 shares fully paidup, 5,000 shares with partial payment2. Notes to AccountsNotes to Accounts for Share Capital1.Authorized Share Capital:₹5,00,000 divided into 50,000 equity shares of ₹10 each.2.Issued Share Capital:The company issued 20,000 equity shares of ₹10 each.3. Subscribed Share Capital:Applications were received for 19,000 equity shares, and all applicantswere allotted shares.
Background image
The amount payable on application was ₹3 per share, on allotment was ₹5per share, and on the first and final call was the balance of ₹2 per share.4. PaidUp Capital:Fully PaidUp: 14,000 equity sharesApplication (14,000 shares × ₹3) = ₹42,000Allotment (14,000 shares × ₹5) = ₹70,000First and Final Call (14,000 shares × ₹2) = ₹28,000Total PaidUp Capital = ₹42,000 + ₹70,000 + ₹28,000 = ₹1,40,0005. Calls in Arrears:First and Final Call on 5,000 sharesCalls in Arrears = 5,000 shares × ₹2 per share = ₹10,0006. Total Share Capital:Fully PaidUp Capital = ₹1,40,000Calls in Arrears = ₹10,000Total Subscribed Share Capital = ₹1,50,000Summary of Share Capital in the Balance Sheet:1. Authorized Capital: ₹5,00,0002. Issued Capital: ₹2,00,0003. Subscribed Capital: ₹1,90,0004. PaidUp Capital: ₹1,40,0005. Calls in Arrears: ₹10,0006. Total Share Capital: ₹1,90,000Q.24. On 1st April, 2022, Suvlan Ltd. issued 25,000, 8% Debentures of₹ 100 each at a discount of 10%, redeemable at par after five years.The company has a balance of ₹1,70,000 in Securities PremiumAccount.(a) Record necessary journal entries for the issue of debentures.(b) Record necessary journal entries for writing off 'Discount on Issueof Debentures' utilising Securities Premium Account at the end of thefirst year itself.
Background image
(c) Prepare 'Discount on Issue of Debentures Account' for the yearended 31st March, 2023.Solution.(a) Journal Entries for the Issue of Debentures1. On the Date of Issue (1st April 2022):Entry for the Issue of Debentures:\\Bank Account/ \quad \Dr./ \quad ₹22,50,000 \\\Discount on Issue of Debentures Account/ \quad \Dr./ \quad ₹2,50,000 \\\To Debentures Account/ \quad \Cr./ \quad ₹25,00,000\Narration: Being the issue of 25,000, 8% Debentures of ₹100 each at adiscount of 10%.Entry for Discount on Issue of Debentures:\\Discount on Issue of Debentures Account/ \quad \Dr./ \quad ₹2,50,000 \\\To Bank Account/ \quad \Cr./ \quad ₹2,50,000\Narration: Being the amount received on issue of debentures afterallowing discount.2. On Redemption of Debentures (End of 5 years, 31st March 2027):Entry for Redemption of Debentures:\\Debentures Account/ \quad \Dr./ \quad ₹25,00,000 \\\To Bank Account/ \quad \Cr./ \quad ₹25,00,000
Background image
\Narration: Being the redemption of 25,000 Debentures at par.(b) Journal Entries for Writing Off 'Discount on Issue of Debentures' UsingSecurities Premium AccountAt the end of the first year, write off the discount using the balance in theSecurities Premium Account:Entry for Writing Off Discount Using Securities Premium Account:Securities Premium Account/ \quad \Dr./ \quad ₹2,50,000 \\To Discount on Issue of Debentures Account/ \quad \Cr./ \quad ₹2,50,000Narration: Being the discount on issue of debentures written off usingSecurities Premium Account.(c) Discount on Issue of Debentures Account for the Year Ended 31stMarch 20231. Opening Balance (1st April 2022): ₹2,50,000 (Debit)2. Write Off the Discount (31st March 2023): ₹2,50,000 (Credit)Discount on Issue of Debentures AccountDateParticularsDebit (₹)Credit (₹)1st April 2022To Bank Account (Issue of Debentures) 2,50,000| 31st March 2023By Securities Premium Account (Written Off)2,50,000|Balance (31st March 2023)NilNil
Background image
Q.25 (A) Diamond Ltd. issued a prospectus inviting applications for20,000 shares of ₹ 10 each. The amount was payable as follows: OnApplication ₹4 per share On Allotment 4 per share On First and Finalcall Balance Applications for 45,000 shares were received andallotment was made as follows: Category (i) Applicants for 35,000shares were allotted 15,000 shares. Category (ii) Applicants for 10,000shares were allotted 5,000 shares. It was decided that excess moneyreceived on application be adjusted towards sum due on allotmentand calls. Amar, an applicant of Category (ii), who was allotted 500shares, failed to pay the first and final call. His shares were forfeitedand subsequently reissued at 2 per share as fully paid up. Passnecessary journal entries to record the above transactions in thebooks of Diamond Ltd. ORSolution.1.Receipt of Application Money:Applicants for 45,000 shares applied, but only 20,000 shares were to beissued. The application money was ₹4 per share.Bank A/cDr. ₹1,80,000To Share Application A/c₹1,80,000(Being application money received for 45,000 shares @ ₹4 per share)2. Allotment of Shares:Category (i): Applicants for 35,000 shares were allotted 15,000 shares.Category (ii): Applicants for 10,000 shares were allotted 5,000 shares.Adjustment of Excess Application Money:Total application money received: ₹1,80,000Allotment money due: 20,000 shares @ ₹4 = ₹80,000
Background image
Excess application money: ₹1,80,000 ₹80,000 = ₹1,00,000This excess amount will be adjusted against the allotment money due.Allotment Entries:Share Application A/cDr. ₹1,80,000To Share Capital A/c₹2,00,000To Share Allotment A/c₹80,000(Being the transfer of application money to share capital and allotmentaccounts)Share Allotment A/cDr. ₹80,000To Bank A/c₹80,000(Being allotment money received)3. Calls on Shares:The balance amount on call is: ₹10 (total) ₹4 (application) ₹4 (allotment) =₹2 per shareTotal call money: 20,000 shares × ₹2 = ₹40,000Share First and Final Call A/c Dr. ₹40,000To Share Capital A/c₹40,000(Being the first and final call due on 20,000 shares @ ₹2 per share)Share First and Final Call A/c Dr. ₹40,000To Bank A/c₹40,000(Being call money received)4. Forfeiture of Shares:Amar, who was allotted 500 shares, failed to pay the first and final call of₹1,000 (500 shares × ₹2 per share).Forfeiture Entry:Share Capital A/cDr. ₹5000Share First and Final Call A/c Dr. ₹1000
Background image
To Share Forfeiture A/c₹6000(Being 500 shares forfeited for nonpayment of final call)5.Reissue of Forfeited Shares:The forfeited shares were reissued at ₹2 per share as fully paidup.The amount received from the reissue is: 500 shares × ₹2 = ₹1,000Reissue Entry:Bank A/cDr. ₹1,000To Share Capital A/c₹500To Share Forfeiture A/c₹50(Being 500 forfeited shares reissued at ₹2 per share)Here’s a summary of the journal entries:1.Application Money:Bank A/cDr. ₹1,80,000To Share Application A/c₹1,80,0002. Allotment and Adjustments:Share Application A/cDr. ₹1,80,000To Share Capital A/c₹2,00,000To Share Allotment A/c₹80,000Share Allotment A/cDr. ₹80,000To Bank A/c₹80,0003. Calls on Shares:Share First and Final Call A/c Dr. ₹40,000To Share Capital A/c₹40,000Share First and Final Call A/c Dr. ₹40,000To Bank A/c₹40,0004.Forfeiture of Shares:Share Capital A/cDr. ₹5000Share First and Final Call A/c Dr. ₹1000To Share Forfeiture A/c₹6000
Background image
5.Reissue of Forfeited Shares:Bank A/cDr. ₹1,000To Share Capital A/c₹500To Share Forfeiture A/c₹500These entries cover the entire process from application through reissue ofshares, including all necessary adjustments and forfeitures.(b) Pearl Ltd. issued a prospectus inviting applications for 40,000shares of 10 each at a premium of 20%. The amount was payable asfollows: On Application 5 per share On Allotment 5 per share(Including Premium) On First and Final call Balance Applications for60,000 shares were received and allotment was made on a proratabasis to all the applicants. Excess money received on application wasadjusted towards the amount due on allotment. Sameer who hadapplied for 1,200 shares failed to pay the allotment money. His shareswere forfeited immediately after allotment. All the forfeited shareswere reissued at 7 per share as ₹8 paid up. First and final call was notyet made. Pass necessary journal entries to record the abovetransactions in the book of Pearl Ltd. Open 'Calls in Arrears Account'wherever necessary.Solution.To record the transactions for Pearl Ltd., we need to handleseveral aspects including the application, allotment, forfeiture, and reissueof shares. Let’s break down the transactions and the corresponding journalentries.1.Application MoneyPearl Ltd. issued a prospectus for 40,000 shares at ₹10 each with apremium of 20%, making the total price ₹12 per share (₹10 + ₹2 premium).The application money was ₹5 per share.Total application money received:
Background image
Applications for 60,000 shares at ₹5 each = ₹3,00,000Journal Entry:Bank A/cDr. ₹3,00,000To Share Application A/c₹3,00,000(Being application money received for 60,000 shares @ ₹5 per share)2.Allotment MoneyThe allotment was on a prorata basis due to oversubscription. The totalamount due on allotment was ₹5 per share (including premium).Allotment due: 40,000 shares × ₹5 = ₹2,00,000Excess Application Money Adjusted:Total application money: ₹3,00,000Total allotment money due: ₹2,00,000Excess application money: ₹3,00,000 ₹2,00,000 = ₹1,00,000Journal Entry:Share Application A/cDr. ₹3,00,000To Share Capital A/c₹4,00,000To Share Allotment A/c₹2,00,000(Being transfer of application money to share capital and allotmentaccounts)Share Allotment A/cDr. ₹1,00,000To Bank A/c₹1,00,000(Being the remaining allotment money received, after adjusting excessapplication money)3. Forfeiture of SharesSameer, who applied for 1,200 shares, did not pay the allotment money.His shares were forfeited.Forfeiture Entry:Allotment money due on Sameer’s shares: 1,200 shares × ₹5 = ₹6,000Share Capital A/cDr. ₹12,000To Share Allotment A/c₹6,000To Calls in Arrears A/c₹6,000
Background image
(Being 1,200 shares forfeited for nonpayment of allotment money)4. Reissue of Forfeited SharesThe forfeited shares (1,200 shares) were reissued at ₹7 per share as ₹8paidup.Reissue price: ₹7 per sharePaidup amount on reissue: ₹8 per shareTotal amount received on reissue:Amount received: 1,200 shares × ₹7 = ₹8,400Journal Entry for Reissue:Bank A/cDr. ₹8,400To Share Capital A/c₹12,000To Share Forfeiture A/c₹3,600(Being 1,200 forfeited shares reissued at ₹7 per share as ₹8 paidup)5.Calls in Arrears AccountSince the first and final call was not yet made, there is no entry related tocalls in arrears for this transaction.Summary of Journal Entries:1. Application Money:Bank A/cDr. ₹3,00,000To Share Application A/c₹3,00,0002. Allotment and Adjustments:Share Application A/cDr. ₹3,00,000To Share Capital A/c₹4,00,000To Share Allotment A/c₹2,00,000Share Allotment A/cDr. ₹1,00,000To Bank A/c₹1,00,0003.Forfeiture of Shares:Share Capital A/cDr. ₹12,000To Share Allotment A/c₹6,000
Background image
To Calls in Arrears A/c₹6,0004. Reissue of Forfeited Shares:Bank A/cDr. ₹8,400To Share Capital A/c₹12,000To Share Forfeiture A/c₹3,600This covers the complete journal entries for the application, allotment,forfeiture, and reissue of shares for Pearl Ltd.Q.26. (a) Anshu and Vihu were partners in a firm sharing profits andlosses in the ratio of 3: 2. Their Balance Sheet as at 31st March, 2023was as follows: Balance Sheet of Anshu and Vihu as at 31st March,2023 Liabilities Amount (₹) Assets Amount (₹) Creditors 80,000 Cash40,000 General Reserve 50,000 Investment Fluctuation Fund 10,000Debtors Less Provision for Doubtful debts Stock 36,000 2,000 34,00030,000 Capitals: Anshu 1,44,000 Vihu 80,000 2,24,000 3,64,000 Plantand Machinery 2,20,000 40,000 Investments 3,64,000Solution.1. Verify the Balance SheetLet’s ensure that the Balance Sheet is balanced by totaling the assets andliabilities.Total Liabilities:1. Creditors: ₹80,0002. General Reserve: ₹50,0003. Investment Fluctuation Fund: ₹10,0004. Capitals:Anshu: ₹1,44,000Vihu: ₹80,000Total Liabilities Calculation:Total Liabilities = Creditors + General Reserve + Investment FluctuationFund + Capital of Anshu + Capital of Vihu= ₹80,000 + ₹50,000 + ₹10,000 + ₹1,44,000 + ₹80,000= ₹3,64,000
Background image
Total Assets:1. Cash: ₹40,0002. Debtors: ₹36,0003. Less: Provision for Doubtful Debts: ₹2,000Net Debtors: ₹36,000 ₹2,000 = ₹34,0004. Stock: ₹30,0005. Plant and Machinery: ₹2,20,0006. Investments: ₹40,000Total Assets Calculation:```Total Assets = Cash + Net Debtors + Stock + Plant and Machinery +Investments= ₹40,000 + ₹34,000 + ₹30,000 + ₹2,20,000 + ₹40,000= ₹3,64,000The Balance Sheet is balanced with both totals being ₹3,64,000.2. Typical Adjustments or TransactionsScenario 1: Admission of a New PartnerRevaluation of Assets: If the problem involves a new partner, the assetsmight need revaluation.Adjustment of Reserves: General Reserve and Investment FluctuationFund might need to be shared among the partners based on theirprofitsharing ratio.Scenario 2: Dissolution or Sale of AssetsDisposal of Assets: Selling or settling of assets would be recorded.Settlement of Liabilities: Any remaining liabilities would need to be cleared.3. Journal Entries for Adjustment ScenariosIf Revaluation is Required:
Background image
1.Revaluation of Assets:Increase in assets: Dr. Asset Account / Cr. Revaluation AccountDecrease in assets: Dr. Revaluation Account / Cr. Asset Account2. Transfer of Reserves:General Reserve and Investment Fluctuation Fund need to be adjusted topartners’ capital accounts.General Reserve Transfer Entry:General Reserve A/cDr. ₹50,000To Anshu's Capital A/c₹30,000To Vihu's Capital A/c₹20,000(Being General Reserve transferred to partners' capital accounts in theratio of 3:2)Investment Fluctuation Fund Transfer Entry:Investment Fluctuation Fund A/cDr. ₹10,000To Anshu's Capital A/c₹6,000To Vihu's Capital A/c₹4,000(Being Investment Fluctuation Fund transferred to partners' capitalaccounts in the ratio of 3:2)(b) Trisha, Urvi and Varsha were partners in a firm sharing profits andlosses in the ratio of 5: 4: 1. Their Balance Sheet as at 31st March,2023 was as follows: Balance Sheet of Trisha, Urvi and Varsha as at31st March, 2023 Liabilities Amount (₹) Assets Amount (₹) Capitals:Fixed Assets Trisha Urvi Stock Debtors Cash 1,50,000 1,30,000 100% +6 Varsha 4,30,000 General Reserve 1,50,000 Creditors 2,70,0008,50,000 8,50,000 Trisha retired on 1st April, 2023 and the partnersagreed to the following terms: (i) Fixed Assets were found overvaluedby ₹80,000. (ii) Stock was taken over by Trisha at ₹ 80,000. (iii) (iv)Goodwill of the firm was valued at ₹ 1,00,000 on Trisha's retirementand Trisha's share by goodwill was adjusted through the CapitalAccounts of remaining partners. New profit sharing ratio between theremaining partners was agreed at 2:3. Trisha was paid ₹50,000 onretirement and the balance was transferred to her loan account. (v)
Background image
Pass necessary journal entries in the books of the firm on Trisha'sretirement.Solution.To record the transactions related to Trisha's retirement from thepartnership of Trisha, Urvi, and Varsha, we'll follow these steps:1. Adjust Fixed Assets for Overvaluation2. Record Stock Taken Over by Trisha3. Record Goodwill Adjustment4. Settlement of Trisha’s Share5. Transfer of Balance to Loan AccountLet’s break this down step by step with the necessary journal entries.1.Adjust Fixed Assets for OvervaluationThe fixed assets were found to be overvalued by ₹80,000. This needs to beadjusted in the books.Journal Entry:Fixed Assets A/cDr. ₹80,000To Revaluation Account₹80,000(Being the overvaluation of fixed assets adjusted)2.Record Stock Taken Over by TrishaStock was taken over by Trisha at ₹80,000. This amount will be adjustedagainst her capital account.Journal Entry:Stock A/cDr. ₹80,000To Trisha’s Capital A/c₹80,000(Being stock taken over by Trisha at ₹80,000)
Background image
3.Record Goodwill AdjustmentGoodwill of the firm was valued at ₹1,00,000, and Trisha’s share of goodwillneeds to be adjusted in the capital accounts of the remaining partners.Trisha’s share of goodwill (based on her profitsharing ratio of 5/10 or 1/2):Trisha’s share of goodwill = ₹1,00,000 × (5/10) = ₹50,000The remaining partners (Urvi and Varsha) will share this adjustment in theirnew profitsharing ratio of 2:3.Goodwill adjustment for Urvi and Varsha:Urvi’s share of goodwill = ₹50,000 × (2/5) = ₹20,000Varsha’s share of goodwill = ₹50,000 × (3/5) = ₹30,000Journal Entries:Goodwill A/cDr. ₹1,00,000To Urvi’s Capital A/c₹20,000To Varsha’s Capital A/c₹30,000To Trisha’s Capital A/c₹50,000(Being adjustment of goodwill among the partners, Trisha’s share adjustedthrough her capital account)4.Settlement of Trisha’s ShareTrisha was paid ₹50,000 in cash, and the remaining amount is transferredto her loan account.Total Amount Payable to Trisha:1.Calculate Trisha’s Share of Capital and Adjustments:
Background image
Initial Capital (Before adjustments):Trisha: ₹1,50,000Adjustments:Less: Stock taken over by Trisha: ₹80,000Less: Goodwill adjustment: ₹50,000Less: Fixed Assets Overvaluation: ₹80,000Net Amount:Amount payable to Trisha: ₹1,50,000 ₹80,000 ₹50,000 ₹80,000 =₹40,000Payment:Paid: ₹50,000Balance: ₹40,000 (which will be transferred to Trisha’s loan account)Journal Entries:Trisha’s Capital A/cDr. ₹40,000To Trisha’s Loan A/c₹40,000(Being the balance amount transferred to Trisha’s loan account afterpayment of ₹50,000)Trisha’s Loan A/cDr. ₹40,000To Bank A/c₹50,000To Trisha’s Capital A/c₹10,000(Being settlement of Trisha’s capital account, payment of ₹50,000 andbalance adjusted)Summary of Journal Entries1.Adjust Fixed Assets for Overvaluation:Fixed Assets A/cDr. ₹80,000To Revaluation Account₹80,0002.Record Stock Taken Over by Trisha:Stock A/cDr. ₹80,000To Trisha’s Capital A/c₹80,0003.Record Goodwill Adjustment:Goodwill A/cDr. ₹1,00,000To Urvi’s Capital A/c₹20,000
Background image
To Varsha’s Capital A/c₹30,000To Trisha’s Capital A/c₹50,0004. Settlement of Trisha’s Share:Trisha’s Capital A/cDr. ₹40,000To Trisha’s Loan A/c₹40,000Trisha’s Loan A/cDr. ₹40,000To Bank A/c₹50,000To Trisha’s Capital A/c₹10,000These entries cover the adjustments and settlements necessary due toTrisha’s retirement from the partnership.PART BOption I(Analysis of Financial Statements)Q.27. (a) Sale of patents of ₹ 50,00,000 will result in:(A) Cash inflow of ₹ 50,00,000 from financing activities(B) Cash outflow of ₹ 50,00,000 from financing activities(C) Cash outflow of ₹ 50,00,000 from investing activities(D) Cash inflow of ₹ 50,00,000 from investing activitiesSolution.The sale of patents is classified under investing activities in thecash flow statement because it involves the disposal of a longterm asset.So, the sale of patents for ₹50,00,000 will result in:(D) Cash inflow of ₹50,00,000 from investing activitiesExplanation: When a company sells a longterm asset such as patents, itreceives cash or cash equivalents, which is recorded as an inflow in theinvesting activities section of the cash flow statement.OR(b) Income tax paid is classified under:(A) Operating activities
Background image
(B) Investing activities(C) Financing activities(D) Cash and cash equivalentsSolution. (A) Operating activities ,Income tax paid is classified under:(A) Operating activitiesExplanation: In the cash flow statement, income tax paid is considered anoperating activity because it pertains to the core business operations and isrelated to the cash flows generated from operating activities. It is includedin the cash flow from operating activities section as it affects the net incomeand is part of the routine operating expenses of a company.Q.28. The Quick Ratio of a company is 1: 1. Which of the followingtransactions will result in an increase of this ratio?(A) Purchase of inventory ₹1,50,000 through cheque(B) Sold inventory on credit₹ 50,000(C) Outstanding expenses of 40,000 paid(D) Machinery purchased for cash ₹ 50,000Solution.To determine which transaction will result in an increase in theQuick Ratio, we need to understand that the Quick Ratio (also known asthe AcidTest Ratio) is calculated using the formula:\ \Quick Ratio/ = \\Current Assets/ \Inventory//\Current Liabilities// \Since the Quick Ratio excludes inventory from current assets, transactionsthat affect inventory or current liabilities directly will impact the ratio.Here’s how each transaction affects the Quick Ratio:(A) Purchase of inventory ₹1,50,000 through cheque:This transaction increases inventory but decreases cash (current asset) bythe same amount. There is no change in current liabilities. Thus, thenumerator (current assets inventory) remains the same, but inventoryincreases, which will decrease the Quick Ratio.
Background image
(B) Sold inventory on credit ₹50,000:Selling inventory on credit converts inventory into accounts receivable,which is included in the numerator. Since inventory decreases andaccounts receivable (a part of quick assets) increases, the Quick Ratio willincrease.(C) Outstanding expenses of ₹40,000 paid:Paying outstanding expenses decreases cash and decreases currentliabilities by the same amount. Since the numerator decreases (becausecash decreases) and the denominator decreases (because currentliabilities decrease), the Quick Ratio might remain unchanged or increasedepending on the relative amounts.(D) Machinery purchased for cash ₹50,000:Purchasing machinery affects noncurrent assets (machinery) anddecreases cash (current asset). Since this does not impact the inventory orcurrent liabilities, it does not directly affect the Quick Ratio.Conclusion:The transaction that will result in an increase in the Quick Ratio is:(B) Sold inventory on credit ₹50,000Q.29. Which of the following transactions will result in cash outflowfrom operating activities?(A) Payment to creditors(B) Proceeds from sale of investments(C) Dividend received by a nonfinance company(D) Depreciation charged on furnitureSolution. (A) Payment to creditors,To identify which transaction resultsin a cash outflow from operating activities, we need to understand thatoperating activities involve cash flows from the core business operations,
Background image
including cash received from customers and cash paid to suppliers andemployees.Here's how each transaction affects cash flow:(A) Payment to creditors:This is a cash outflow related to operating activities. It involves paying offamounts owed to suppliers, which decreases cash.(B) Proceeds from sale of investments:This results in a cash inflow from investing activities, not operatingactivities. It involves cash received from selling investments.(C) Dividend received by a nonfinance company:Dividends received are typically considered cash inflows from investingactivities for nonfinance companies. For finance companies, it might beconsidered as operating cash flow.(D) Depreciation charged on furniture:Depreciation is a noncash expense. It affects the calculation of net incomebut does not directly result in a cash flow. It is adjusted in the operatingactivities section of the cash flow statement.Conclusion:The transaction that results in cash outflow from operating activities is:(A) Payment to creditorsQ.30 (a) Which of the following is not a limitation of Analysis ofFinancial Statements'?(A) It is just a study of the reports of the company.(B) It does not consider price level changes.(C) It ascertains the relative importance of different components ofthe financial position of the firm.
Background image
(D) It may be misleading without the knowledge of the changes inaccounting procedures followed by a firm.Solution.(C) It ascertains the relative importance of differentcomponents of the financial position of the firm.Option (A): It is just a study of the reports of the company.Explanation: Analyzing financial statements involves studying thecompany's financial reports to assess performance and financial health.While this might seem like a limitation, it is actually the core purpose offinancial statement analysis—to examine the reports and make informedjudgments.Result: Not a LimitationOption (B): It does not consider price level changes.Explanation: Traditional financial statement analysis often does not accountfor changes in price levels due to inflation or deflation. This can lead tomisleading conclusions, as the real value of money and purchasing powerchanges over time.Result:A LimitationOption (C): It ascertains the relative importance of different components ofthe financial position of the firm.Explanation: This is actually a benefit of financial statement analysis, not alimitation. By determining the relative importance of various components,analysts can better understand the company's financial health andperformance.Result: Not a LimitationOption (D): It may be misleading without the knowledge of the changes inaccounting procedures followed by a firm.Explanation: Changes in accounting procedures can impact thecomparability of financial statements over time. If analysts are unaware ofthese changes, their interpretations might be misleading.Result: A Limitation.OR
Background image
(b) Ratios that are calculated for measuring the efficiency ofoperations of business based on effective utilization of resources areknown as:(A) Liquidity ratios(B) Turnover ratios(C) Solvency ratios(D) Profitability ratiosSolution. (B) Turnover ratios ,To determine which ratios measure theefficiency of operations and effective utilization of resources, let’s examineeach type of ratio:Option (A): Liquidity RatiosPurpose: Liquidity ratios measure a company’s ability to meet its shorttermobligations using its liquid assets. Examples include the Current Ratio andQuick Ratio.Focus: They focus on the company's shortterm financial health and do notdirectly measure operational efficiency.Result:Not the correct answerOption (B): Turnover RatiosPurpose: Turnover ratios assess how efficiently a company utilizes itsresources, such as inventory, receivables, and assets. They indicate howwell the company is managing its operations and converting resources intosales.Examples: Inventory Turnover Ratio, Receivables Turnover Ratio, andAsset Turnover Ratio.Result: Correct answerOption (C): Solvency RatiosPurpose: Solvency ratios evaluate a company’s longterm financial stabilityand its ability to meet longterm obligations. They measure the company’scapital structure and longterm debt relative to its equity.Examples: Debt to Equity Ratio, Debt Ratio.
Background image
Result: Not the correct answerOption (D): Profitability RatiosPurpose: Profitability ratios assess a company's ability to generate profitrelative to its revenue, assets, or equity. They measure overall financialperformance but do not specifically focus on the efficiency of operations.Examples: Net Profit Margin, Return on Assets (ROA), Return on Equity(ROE).Result: Not the correct answerQ.31. Classify the following items under major heads and subheads (ifany) in the Balance Sheet of the company as per Schedule III, Part I ofthe Companies Act, 2013:(a) Bank Balance(b) Public Deposits(c) Bank OverdraftSolution.To classify the items under the major heads and subheads in theBalance Sheet of a company as per Schedule III, Part I of the CompaniesAct, 2013, you would categorize them as follows:(a) Bank BalanceMajor Head: Current AssetsSubHead: Cash and Cash EquivalentsReasoning: Bank balances represent cash and cash equivalents, which arepart of current assets.(b) Public DepositsMajor Head: NonCurrent LiabilitiesSubHead: Other Longterm LiabilitiesReasoning: Public deposits are usually a form of longterm borrowing, andthey are classified under noncurrent liabilities as they are generallyrepayable after a year.
Background image
(c) Bank OverdraftMajor Head: Current LiabilitiesSubHead: Shortterm BorrowingsReasoning: Bank overdrafts are shortterm borrowings and represent animmediate liability, hence classified under current liabilities.Here's a summary for clarity:Bank Balance: Current Assets → Cash and Cash EquivalentsPublic Deposits: NonCurrent Liabilities → Other Longterm LiabilitiesBank Overdraft: Current Liabilities → Shortterm BorrowingsQ.32. From the following information, calculate Inventory TurnoverRatio: Amount (₹) Revenue from Operations Gross Profit Ratio 25%Opening Inventory Closing Inventory is 2 times more than theOpening Inventory.Solution.To calculate the Inventory Turnover Ratio, follow these stepsbased on the given information:Information Provided1. Revenue from Operations: ₹25,00,0002. Gross Profit Ratio: 25%3. Closing Inventory is 2 times more than the Opening InventoryStepbyStep Calculation1. Calculate Gross Profit and Cost of Goods Sold (COGS):Gross Profit Ratio is 25%. This means Gross Profit is 25% of Revenuefrom Operations.Gross Profit = 25% of ₹25,00,000Gross Profit = ₹6,25,000
Background image
COGS can be found using the formula:COGS = Revenue from Operations Gross ProfitCOGS = ₹25,00,000 ₹6,25,000COGS = ₹18,75,0002. Determine Opening and Closing Inventory:Let the Opening Inventory be \( x \).Closing Inventory is 2 times the Opening Inventory: \( 2x \).The formula for COGS is:COGS = Opening Inventory + Purchases Closing InventorySince purchases are not provided, we use the simplified formula:COGS = Opening Inventory + Purchases Closing InventoryRearranging to find Purchases:Purchases = COGS + Closing Inventory Opening InventoryPurchases = ₹18,75,000 + 2x xPurchases = ₹18,75,000 + x3. Find the Average Inventory:Average Inventory = \(\\Opening Inventory/ + \Closing Inventory//2/\)Average Inventory = \(\x + 2x/2/\)Average Inventory = \(\3x/2/\)4. Calculate Inventory Turnover Ratio:Inventory Turnover Ratio = \(\\COGS//\Average Inventory//\)Substitute the values:Inventory Turnover Ratio = \(\₹18,75,000/\3x/2//\)Inventory Turnover Ratio = \(\₹18,75,000 \times 2/3x/\)Inventory Turnover Ratio = \(\₹37,50,000/3x/\)To calculate the exact Inventory Turnover Ratio, you need the value of theOpening Inventory \( x \). However, without the specific value of \( x \), this
Background image
formula provides a way to determine the ratio based on availableinformation.If you have further details, you can plug them into the formula to get aprecise value.Q.33. (a) From the given Balance Sheet of Moonlight Ltd., prepare aCommon Size Balance Sheet :Balance Sheet of Moonlight Ltd.as at 31st March, 2023
Background image
Solution.
Background image
Current Assets:Trade Receivables: 20%Inventories: 10%(b) From the following particulars of Accent Ltd., prepare aComparative Statement of Profit and Loss for the year ended 31stMarch, 2023 :ParticularsNote No.2022 –23 (₹)2021 –22 (₹)Revenue from operations25,00,00020,00,000Employee benefit expenses5,00,0004,00,000
Background image
Other expenses2,50,0002,00,000Tax rate 50%Solution.To prepare a Comparative Statement of Profit and Loss forAccent Ltd. for the years ended 31st March, 2023 and 2022, we need tocompare the financial performance of the two years side by side. Thisinvolves calculating the Gross Profit, Net Profit, and other relevant figuresfor each year and presenting them in a comparative format.Comparative Statement of Profit and LossFor the years ended 31st March, 2023 and 20221.Revenue from Operations:202223: ₹25,00,000202122: ₹20,00,000Increase: ₹5,00,000 (25%)2. Employee Benefit Expenses:202223: ₹5,00,000202122: ₹4,00,000Increase: ₹1,00,000 (25%)3. Other Expenses:202223: ₹2,50,000202122: ₹2,00,000Increase: ₹50,000 (25%)4. Total Expenses:202223: ₹7,50,000 (Employee Benefit Expenses + Other Expenses)202122: ₹6,00,000Increase: ₹1,50,000 (25%)5. Gross Profit:
Background image
202223: ₹17,50,000 (Revenue Total Expenses)202122: ₹14,00,000Increase: ₹3,50,000 (25%)6. Tax (50%):202223: ₹8,75,000 (50% of Gross Profit)202122: ₹7,00,000 (50% of Gross Profit)Increase: ₹1,75,000 (25%)7. Net Profit:202223: ₹8,75,000 (Gross Profit Tax)202122: ₹7,00,000Increase: ₹1,75,000 (25%)This comparative statement helps in analyzing the financial performanceover the two years, highlighting the changes in revenue, expenses, andprofits.Q.34. From the following particulars of Ruparel Ltd., calculate ‘CashFlow from Investing Activities’. Show your working clearly.Particulars31.03.2023 (₹)31.03.2022 (₹)Goodwill3,00,0001,00,000Patents1,60,0002,80,000Machinery12,40,00010,20,00010% Investments1,60,00060,000Additional Information :(i) Patents of ₹1,20,000 were sold at book value.(ii) Depreciation charged during the year on machinery was ₹1,40,000. A machine having a book value of ₹ 80,000 was sold for₹50,000.(iii) On 31.03.2023, 10% investments were purchased for ₹ 1,80,000and some investments were sold at a profit of ₹ 20,000. Interestreceived on investments was ₹ 6,000.
Background image
Solution.Calculation of Cash Flow from Investing Activities1. Sale of PatentsPatents at the beginning (31.03.2022): ₹2,80,000Patents at the end (31.03.2023): ₹1,60,000Patents sold during the year: ₹1,20,000 (at book value)2. Sale of MachineryBook value of the machine sold: ₹80,000Sale proceeds of the machine: ₹50,000Loss on sale of machinery: ₹80,000 ₹50,000 = ₹30,000 (not directlyaffecting cash flow, but indicates sale value)3. Purchase of MachineryMachinery at the beginning (31.03.2022): ₹10,20,000Machinery at the end (31.03.2023): ₹12,40,000Net addition to machinery: ₹12,40,000 ₹10,20,000 = ₹2,20,000Less: Book value of machinery sold: ₹80,000Net purchase of machinery: ₹2,20,000 + ₹80,000 = ₹3,00,0004. Investment TransactionsInvestments at the beginning (31.03.2022): ₹60,000Investments at the end (31.03.2023): ₹1,60,000Net increase in investments: ₹1,60,000 ₹60,000 = ₹1,00,000Less: Purchase of investments during the year: ₹1,80,000Profit on sale of investments: ₹20,000Investments sold (adjusted for profit): ₹1,00,000 ₹1,80,000 + ₹20,000 =₹60,000 (showing net outflow as actual cash spent on investments)5. Interest Received on InvestmentsInterest received: ₹6,000Summary of Cash Flow from Investing Activities1. Proceeds from Sale of Patents: ₹1,20,000
Background image
2. Proceeds from Sale of Machinery: ₹50,0003. Purchase of Machinery: ₹3,00,000 (outflow)4. Net Purchase of Investments: ₹1,00,000 (outflow) ₹1,80,000 purchase +₹20,000 profit (adjusted)5. Interest Received: ₹6,000Cash Flow from Investing Activities CalculationCash Flow from Investing Activities=(Proceeds from Sale ofPatents+Proceeds from Sale of Machinery−Purchase of Machinery−NetPurchase of Investments+Interest Received)Cash Flow from InvestingActivities=(1,20,000+50,000−3,00,000−1,00,000+6,000)Cash Flow from Investing Activities=1,70,000−4,00,000+6,000Flow from Investing Activities = 1,70,000 4,00,000 + 6,000Cash Flow fromInvesting Activities=1,70,000−4,00,000+6,000Cash Flow from Investing Activities=−2,24,000Cash Flow from Investing Activities = 2,24,000Cash Flow from InvestingActivities=−2,24,000PART BOPTION – II(Computerised Accounting)Q.27. To see all available shape styles of a chart, which of thefollowing buttons is clicked?(A) More
Background image
(B) Chart tool(C) Picture(D) CustomSolution. (B) Chart tool,To see all available shape styles of a chart, youshould click the Chart Tool button.Here’s why:Chart Tool: This option includes various settings and formatting options forthe chart, including shape styles. When you access Chart Tools, youtypically have access to a range of style and formatting options for yourchart elements.The other options do not specifically pertain to chart formatting:More: Generally refers to additional options but not specifically for chartshapes.Picture: Relates to image insertion and editing, not chart formatting.Custom: This might pertain to custom styles but doesn’t specifically targetchart shape styles.So the correct choice is:(B) Chart ToolQ.28. (a) A sequential code refers to code applied to some documentswhere:(A) Account heads are assigned to documents(B) Numbers and letters are assigned in consecutive order(C) Special names are given to accounts(D) Documents are arranged in special sequenceOR
Background image
Solution.(B) Numbers and letters are assigned in consecutive order ,A sequential code refers to a system where items or documents areassigned numbers or letters in a consecutive order. This is useful fororganizing and tracking documents systematically.So, the correct answer is:(B) Numbers and letters are assigned in consecutive order(b) Name the Accounting information subsystem which is linked withother subsystems for obtaining information about cost and expenses:(A) Cash and Bank subsystem(B) Costing subsystem(C) Expense accounting subsystem(D) Final accounts subsystemSolution.The accounting information subsystem that is linked with othersubsystems to obtain information about cost and expenses is the Costingsubsystem. This subsystem specifically focuses on collecting and analyzingcostrelated data, which is crucial for budgeting, cost control, and financialanalysis.So, the correct answer is (B) Costing subsystemQ.29. Which of the following is not an advantage of a computerizedaccounting system?(A) Timely generation of reports in desired format(B) Ensures effective control over the system(C) Faster obsolescence of technology(D) Confidentiality of data is maintainedSolution. (C) Faster obsolescence of technologyThis option is not an advantage of a computerized accounting system. Infact, faster obsolescence of technology is a disadvantage because itmeans that the system or software can become outdated quickly, requiringfrequent upgrades or replacements. The other options—timely generation
Background image
of reports, effective control over the system, and confidentiality of data—areadvantages of a computerized accounting system.Q.30 (a) A 'legend' can be repositioned on the chart:(A) On the right side only(B) On the left side only(C) On the bottom of xaxis(D) AnywhereORSolution.A 'legend' can be repositioned on the chart:(D) AnywhereLegends in charts are typically flexible and can be moved to variouspositions, including the right side, left side, top, bottom, or even within thechart area itself, depending on the charting software being used.(b) The need for codification is for:(A) the generation of mnemonic codes(B) securing the accounting reports(C) easy processing of data and keeping records(D) the encryption of data 29 To see all available shape styles of achart which of the following buttons isSolution.(C) easy processing of data and keeping recordsThe Need for CodificationCodification is used to systematically organize and simplify data throughthe assignment of codes. Here’s how it relates to each option:(A) The Generation of Mnemonic Codes: While codification may involvemnemonic codes, its broader purpose is not just limited to generating these
Background image
codes. Mnemonic codes are more about making the codes easier toremember rather than the fundamental purpose of codification.(B) Securing the Accounting Reports: Codification does not inherentlysecure reports. Securing reports is related to security measures likeencryption and access controls.(C) Easy Processing of Data and Keeping Records: This is the mainpurpose of codification. By assigning codes to data, it becomes easier toprocess, manage, and maintain records. Codification helps in organizingdata systematically and efficiently.(D) The Encryption of Data: Encryption is a separate process that involvessecuring data by converting it into a format that is not readable withoutproper authorization. Codification is not about encryption but aboutorganizing data.ConclusionThe need for codification is primarily for:(C) Easy processing of data and keeping records.Q.31. Explain the advantages of using a Graph.Solution.Using graphs has several advantages that make them valuabletools for presenting and analyzing data. Here are some key benefits:1. Visual Clarity: Graphs provide a clear visual representation of data,making it easier to understand complex information quickly. By transformingnumbers and into visual formats, such as bars, lines, or pie slices, graphscan simplify the interpretation of trends and relationships.2. Immediate Insight: With graphs, patterns, trends, and outliers becomeimmediately visible. For instance, a line graph can show how data changes
Background image
over time, while a bar chart can compare different categories side by side.This immediate visibility aids in quick decisionmaking and analysis.3. Effective Communication: Graphs are excellent tools for communicatinginformation to an audience. They can make presentations and reports moreengaging and less heavy, which helps in conveying messages moreeffectively. This is especially useful in business meetings, academicpresentations, and public reports.4. Comparison of Data: Graphs facilitate the comparison of multiple datasets. For example, a bar chart can compare sales figures across differentyears, or a scatter plot can show the correlation between two variables.This comparative view helps in identifying trends, correlations, anddiscrepancies.5. Highlighting Key Information: Graphs can emphasize important datapoints, such as peaks, troughs, or outliers. By focusing on these keyelements, graphs help to highlight significant findings and draw attention toareas that may require further investigation or action.6. Data Summary: Graphs can summarize large amounts of data succinctly.Instead of wading through extensive tables of figures, a welldesigned graphprovides a snapshot of the information, making it easier to grasp the overallpicture at a glance.7. Enhanced Retention: Visual representations of data are often easier toremember than raw numbers. Graphs can improve the retention ofinformation by presenting it in a visually appealing and memorable format.In summary, graphs are powerful tools that enhance data analysis,communication, and decisionmaking by providing clear, immediate, andengaging visual insights.
Background image
Q.32. What is meant by Num_digit? State the situations where it canbe used.Solution. Num_digit usually denotes the number of digits that shouldappear in a numeric value. This can apply in various cons, such asformatting numbers, calculating the number of digits in a number, or settingdisplay preferences for numeric data.Situations Where Num_digit Can Be Used1. Formatting Numbers in Spreadsheets:Purpose: To ensure that numbers are displayed with aconsistent number of digits.Example: In Excel, you can use formatting options to displaynumbers with a fixed number of decimal places. For instance, ifyou want to display numbers with exactly two decimal places,you would use the Num_digit parameter in a custom format like0.00.2. Calculating the Number of Digits in a Number:Purpose: To find out how many digits are in a given number,which can be useful for data analysis or validation.Example: In programming, you might write a function todetermine the number of digits in an integer. For instance, inPython, you can calculate the number of digits in a number byconverting it to a string and measuring its length.3. Rounding Numbers:Purpose: To round numbers to a specified number of significantdigits or decimal places.Example: In Excel, theROUNDfunction can use a Num_digitparameter to round numbers. For instance,ROUND(123.456,2)will round the number to123.46.4. Ensuring Data Consistency:Purpose: To standardize numeric data in reports or databasesby setting a fixed number of digits.
Background image
Example: When generating a report, you may need to ensurethat all monetary values are displayed with exactly two decimalplaces for consistency.5. Formatting in Programming:Purpose: To format numeric output in a program according tospecific requirements.Example: In languages like Python, you might format a numberto ensure it displays with a certain number of digits. Forexample,format(123.456, '.2f')will format the numberwith two digits after the decimal point.Q.33. (a) State steps to be taken in preparation of a chart.Solution.To prepare a chart effectively in Excel or similar spreadsheetsoftware, follow these steps:1. Organize Your Data:Ensure your data is organized in rows or columns with clear labels for eachseries and category. This makes it easier to select and visualize the dataaccurately.2. Select the Data Range:Highlight the range of data you want to include in the chart. This shouldinclude both the labels (categories) and the numerical data.3. Insert the Chart:Go to the Insert tab on the toolbar.Choose the type of chart that best suits your data (e.g., bar, line, pie) fromthe Charts section.4. Choose a Specific Chart Type:Click on the desired chart type to insert it. For example, if you select a "BarChart," you’ll see different styles like clustered bar, stacked bar, etc. Pickthe style that fits your data presentation needs.
Background image
5. Customize the Chart:Chart Title: Click on the default chart title to edit it or add a new title thataccurately describes the data.Axes Titles: Add or edit axis titles to clarify what each axis represents.Legend: Adjust the position or format of the legend to ensure it clearlyexplains the data series.6. Format the Chart:Use formatting tools to change colors, fonts, and styles. Access theseoptions through the Chart Tools on the Ribbon, including Design andFormat tabs.7. Adjust Chart Elements: Add or remove elements like data labels,gridlines, or trend lines as needed. You can find these options under ChartElements or by rightclicking on the chart and selecting from the con menu.8. Resize and Position:Drag the edges or corners of the chart to resize it. Move the chart to thedesired location on your worksheet by clicking and dragging.9. Review and Refine:Check the chart for accuracy and clarity. Make sure it effectivelycommunicates the intended information.10.Save Your Work:Save the worksheet to ensure your chart and data are preserved.By following these steps, you can create a wellorganized and visuallyappealing chart that effectively conveys your data.OR(b) What are the uses of 'Error Alert tab'?Solution.The 'Error Alert' tab in Excel is a feature used in Data Validationto provide feedback when users enter incorrect data into a cell. Here arethe key uses of the 'Error Alert' tab:
Background image
1. Display Custom Error Messages:You can set up a custom error message that appears when the dataentered does not meet the validation criteria. This message helps guide theuser on what type of data is expected.2. Control User Input:It helps control the type of data entered into a cell by preventing invaliddata from being entered. For example, if a cell only accepts numbersbetween 1 and 100, the error alert will notify the user if they enter dataoutside this range.3.Provide Instructions:The error message can include specific instructions or examples to helpusers understand the correct format or value. This can improve dataaccuracy and consistency.4. Specify Error Alert Styles:You can choose different styles for the error alert:Stop: Prevents the user from entering invalid data and requires them tocorrect it before proceeding.Warning: Alerts the user to the potential error but allows them to continuewith the invalid data if they choose to.Information: Provides an informational message without blocking the entryof invalid data.5.Enhance Data Validation:The error alert feature is integral to data validation rules. It helps ensurethat only valid data is entered, which is crucial for maintaining data integrityin spreadsheets.By using the 'Error Alert' tab, you can ensure that users follow the correctdata entry procedures, which enhances the accuracy and reliability of yourdata.
Background image
Q.34. What is meant by 'Merging a range of cells'? How is it done?State the steps to split a merged cell.Solution.Merging a range of cells in a spreadsheet (such as Excel) meanscombining two or more adjacent cells into a single larger cell. This is oftendone to create a more organized layout or to center across multiple cells.When cells are merged, the content of the upperleft cell is preserved, andthe content of the other cells in the range is discarded.How to Merge Cells:1. Select the Cells:Click and drag to select the range of cells you want to merge.2. Access the Merge Option:Go to the Home tab on the Ribbon.Look for the Merge & Center button in the Alignment group.3. Choose a Merge Option:Click on the Merge & Center button to merge the cells and center thecontent.Alternatively, click the dropdown arrow next to the button to choose fromother options:Merge & Center: Merges cells and centers the content.Merge Across: Merges cells in each row individually.Merge Cells: Merges the selected cells without centering the content.Unmerge Cells: Splits previously merged cells back into their originalstate.Steps to Split a Merged Cell:1. Select the Merged Cell:Click on the merged cell you want to split.2. Unmerge the Cells:Go to the Home tab on the Ribbon.
Background image
Click the dropdown arrow next to the Merge & Center button in theAlignment group.Select Unmerge Cells from the dropdown menu.3. Check the Result:The merged cell will be split back into its original individual cells. Anycontent that was in the merged cell will be retained in the upperleft cell ofthe original range.
Background image