ADVANCED ACCOUNTANCY

Assignments Questions for 2nd year BBA Students:

I.

I) A and B are partners in a firm. They share profits and losses in the ratio
of 3:1. Their balance sheet is as follows:
Liabilities
Capital A
B
Reserve
Creditors
Bills Payable

Rs.
80000
40000
40000
60000
20000
240000

Assets
Buildings
Plant
Stock
Debtors
Cash

Rs.
100000
25000
40000
70000
5000
240000

C is admitted into partnership for 1/5th share of the business on the

following terms:
a) Building is revalued at Rs. 120000
b) Plant is depreciated to 80%
c) Provision for bad debts is made at 5%
d) Stock is revalued at Rs. 30000
e) C Should introduce 50% of the adjusted capitals of both A and B. Open
various accounts and the new Balance sheet after the admission of C.

II) Sunil, Devan and Ravi are equal partners in a firm and their balance
sheet as on 31.12.90 is given below.
Liabilities
Capital: Sunil
Devan
Ravi
Reserve
Creditors

Rs.
15000
12000
18000
4500
40500
90000

Assets
Machinery
Furniture
Debtors
Stock

Rs.
43500
1500
30000
15000
90000

Ravi retired on 31.12.90 and assets were revalued as under:

Machinery Rs. 51000, Furniture Rs. 1200, Debtors Rs. 28500, Stock Rs.
14700, Good will of the firm is valued at Rs.9000 and Ravis share of
goodwill is to be adjusted to continuing partners capital accounts.
Give journal entries; prepare necessary ledger accounts and new
balance sheet.

II.

I) A, B and C are in partnership sharing profits and losses in the proportion

of 4:3:2. Their balance sheet on Dec. 31 1996 stood as follows:
Liabilities
Capital Accounts:
A
4000
B
2000
C
500
Creditors

Rs.

6500
3500
10000

Assets
Land & Buildings
Stock in trade
Debtors
Cash in hand

Rs.
5500
2000
1000
1500
10000

They agree to dissolve partnership as from 31st Dec. 1996. A agrees to

take over the stock at a valuation of Rs. 1500 and the debtors at valuation
of Rs. 700 (no cash passes). The Land & Building are sold at auction for Rs.
2700. Close the books of the firm.
II) D, E, F and G are partners sharing 4:3:2:1. Their position statement was
as follows:
Liabilities
Capital Accounts:
D
E
Sundry Creditors
Bank Loan

Rs.
90000
60000
120000
60000

330000

Assets
Cash at Bank
Machinery
Stock
Debtors
Capital accounts:
F
G

Rs.
4500
132000
60000
120000
10500
3000
330000

The firm is dissolved. All assets realized Rs. 246000. The sundry
creditors and bank loan were paid Rs. 177000 in full satisfaction. The
expenses of dissolution are Rs. 1800. G became insolvent and F paid only
Rs. 9000.
Prepare ledger accounts to close the books of the firm.
III.

I) The following purchases were made by a business house having three

departments.
Dept. A 1000 units
Dept. B 2000 units
Dept. C 2400 units
At a total cost of Rs. 100000
Stocks on 1st January were:
Dept. A 120 units
Dept. B 80 units

Dept. C 152 units

Sales were:
Dept. A 1020 units at Rs. 20 each
Dept. B 1920 units at Rs. 22.50 each
Dept. C 2496 units at Rs. 25 each
The rate of gross profit is same in each case. Prepare Departmental
trading account.
II) Distinction between Hire Purchase and Installment Systems.
IV.

I) distinguish between balance sheet and statement of Affairs.

II) A and B are equal partners. Insolvency petition is filed on 30.6.95. The
balance sheet as on 30.6.95 is as follows (realizable value indicated in
brackets)
Particulars
Rs.
Particulars
Rs.
Mortgage loan (on
40000
Freehold (120000)
160000
Plant & Machinery
120000
freehold)
160000
12000
Bank overdraft (secured
(72000)
nd
6000
80000
Fixtures (4000)
by 2 mortgage of
200000
100000
Stock (40000)
freehold)
88000
2000
Debtors (60000)
Preferential creditors
20000
Cash
Unsecured creditors
B Capital overdrawn
Capital - A
494000

494000

The overdraft is secured in addition to second mortgage, by As personal

guarantee against which his investments have been deposited. As
investments are estimated to realize
Rs. 68000 and after meeting his
guarantee his private estate was insolvent. B was solvent and Rs. 38000
was available from his estate for firms creditors.
Prepare (i) Statement of Affairs (indicating rate of dividend for unsecured
creditors)
(ii) Deficiency a/c
(iii) Capital accounts in the ledger (assuming realizations as per
estimates)
V.

I) Rashid Ltd. Has Rs. 10,,00,000, 8% debentures outstanding on

01.01.2012. The company has been redeeming every year on January 1 st
Rs. 1,00,000/- debentures by drawings by lot, at par. Give necessary
journal entries.
a) If the redemption is out of profits.
b) If the redemption is out of capital.
II) Kailash Ltd. Purchased the business of Mani Bros. for Rs. 54,00,000
payable in fully paid shares of Rs. 100 each. What entries will be made in
the books of Kailash Ltd. If such issue is a) at par

b) at a premium of 20% and

c) at a discount of 10%?