Question 41. On application and allotment 14 per share (including premium of? Answer : J.F. It refers to those persons whose business has been sold goods on credit and payment has not been received yet. More Resources for CBSE Class 12 Capital Expenditure: It refers to expenditure,the benefit of which is received during more than one year. The first and final call was made. Applications for 3,20,000 shares were received. (-) Amount utilised at the time of re-issue = 235 Excess application money received from applicants to whom shares were allotted on pro-rata basis was adjusted towards sums due on first and final call. Applications for 1,50,000 shares were received. The whole amount due on second call was received. As one of the most preferred online education platforms, our teachers are all subject experts with years of experience. (b) Related to investing activity. Revenue Expenditure: It refers to any expenditure,the full benefit of which is received during one accounting period.ex-salaries,rent. Financial Accounting:The main purpose of this branch is to record the business transactions in a systematic manner, to ascertain profit or loss and to present the financial position of the business with the help of a balance sheet. 7,50,000. 8,000 shares were issued to the public and 5 per share were called-up as follows Answer: Question 75. All these shares were forfeited and later on re-issued at 18,000 as fully paid. Amount not received on first and final call = 6,000 (8,000 -2,000), 2. Answer: The authorised capital of Suhas Ltd is 50,00,000 divided into 25,000 shares of 200 each. An investment normally qualifies as cash equivalent only when it has a short maturity, of say, three months or less from the date of acquisition. Kumar, the holder of 400 shares did not pay the allotment money and Ravi, the holder of 1,000 shares paid his entire share money along with allotment money. Pass necessary cash book and journal entries for the above transactions in the books of the companv. (All India 2014) Present the share capital in the balance sheet of the company as per the provisions of Schedule III of the Companies Act, 2013. At Vedantu, we are trying to organise the digital platform to best provide personalised education to students to help them excel in their examinations independently, and at the convenience of their homes. Revision is a must for a student, and when it comes to the concepts of Accountancy, then this must be taken seriously. Accounting forms a basis in the process of performance evaluation to improve the performance of employees, divisions,activities, etc. The amount was duly received except on 1,500 shares applied by Ravi. WebCorporate finance is the area of finance that deals with the sources of funding, the capital structure of corporations, the actions that managers take to increase the value of the firm to the shareholders, and the tools and analysis used to allocate financial resources. Shares were allotted to all the applicatns. In other words, J.F number helps to locate the position of the related journal entry and subsidiary book in the journal book. The shares were fully subscribed and paid. IAS 7 was reissued in December 1992, retitled in September 2007, and is operative for financial statements covering periods beginning on or after 1 January 1994. (e) Purchased for Rs 30,000 additional office equipment on credit. Working Note:-Computation of Drawings:-Drawings = Household Expenses + Life Insurance PremiumDrawings = Rs. Answer: Question 80. Applications for 10,000 shares were rejected and pro-rata allotment was made to the remaining applicants on the following basis (iii) Allot the remaining shares on pro-rata basis. 9,36,000, Computation of Gross Profit:-Gross Profit = 40% of SalesGross Profit = Rs. The Revised Accounting Standard-3 has made it mandatory for all listed companies to prepare and present a cash flow statement along with other financial statements on annual basis. Show the effect of the following transactions on Assets, Liabilities and Capital through accounting equation: : It refers to expenditure,the benefit of which is received during more than one year. Answer : Q18. Solve as Q. Question 2. This are the properties that are likely to be realized in one year or over the usual operational cycle time. Part of capital of a company which is called-up only on winding up is called reserve capital. WebSolution 2: Point in Mind DK Goel Solutions Class 11 Chapter 9 :- The first entry in the Journal is passed to record closing balances of the previous year.It is called the opening entry. On first call 4 per share (including 2 premium). Answer: Question 45. This site is owned and operated by Big Blue Interactive, LLC. Answer: (Delhi (C) 2011) (Foreign 2015) Shares were allotted on pro-rata basis to the remaining applicants. There are five types of Accounts. (iii) A cash flow statement is also prepared to determine the liquidity position of the organisation. On Application 2 per share Cash flow arising from financing activities are exhibited as follows: This is the properties that are likely to be realized in one year or over the usual operational cycle time. It provides evidence that transaction has actually occurred. The forfeited shares of Ramesh and Suresh were re-issued at 9 per share fully paid-up. Two reasons why accounting information must be compared are as follows: The accounting information of a particular entity must be compared against the competitors accounting information in order to know where the entity stands in the market. As liability incurred is credited, in the same way, fresh capital introduced and net profit increases the owners capital, and so, capital is credited. 40,000 are borrowed on the basis of a promissory, (All India 2019: Compartment 2018) Accuracy. Most small businesses can use either method. Pass necessary journal entries for the above transactions in the books of Jain. (a) 10% (b) Redeemable preference shares, Question 100. (m) Bobby withdrew Rs 20,000 from the business. Amount to be credited in share forfeiture account = 10,000. Answer: Question 65. Income: It is the difference between revenue and expense. The steps other than rejecting applications that a company can take in case of over subscription are (a) The transaction (a) increases assets by Rs 5,50,000 (cash Rs 4,00,000 and office equipment Rs 1,5,000) it will be debited and on the other hand it will increase the capital by Rs 5,50,000, so it will be credited in capital account. Financial Accounting: The main purpose of this branch is to record the business transactions in a systematic manner, to ascertain profit or loss and to present the financial position of the business with the help of a balance sheet. Question 9. (All India 2010) Show the following Our Accountancy Class 11 Chapter 1 Notes aid students to have a quick go-through of the various concepts and variables, which comprises all the topic coverage of the chapter. Under subscription means that number of shares applied for is less than the number of shares issued. Cash Method. Illustrate your answer. Forfeiture of shares means cancellation of shares and seizure of the amount received from the defaulting shareholders, whose shares have been forfeited. = 3,80,250. Application for 5,000 shares-full Additional Information We provide revision notes for all subjects, which students can free PDF download to their devices. On first and final call Balance amount Important questions help students to understand the concepts easily. Additional Information Interest paid on debenture ? The purpose of entering J.F. 5. Solution 4: Indirect costs are any costs that are borne that are not directly related to the procurement of products or the production of goods.Below are the two indirect expense examples: Question 5: Give four points of distinction between Trading Account & Profit and Loss Account. 100 55). (Delhi 2017) Gain on re-issue to be transferred to capital reserve = 5,000. (All India 2015) Rs. Apart from these subjects, optional subject are Solve as Q no. Excess of issue price of shares over its face value is termed as securities premium reserve. The official journal of the American College of Radiology, JACR informs its readers of timely, pertinent, and important topics affecting the practice of diagnostic radiologists, interventional radiologists, medical physicists, and radiation oncologists. basis for industry classification from the 2017 North American Industry Classification System (NAICS) to NAICS 2022. The amount was payable as follows IAS 16 outlines the accounting treatment for most types of property, plant and equipment. It is mandatory to create capital reserve in case of capital profits earned by the company. Drawings are debited as they decrease the capital. 2. Cost Accounting: The main purpose of cost accounting is to ascertain the total cost and per On allotment 5 per share (All India 2013) Samyeshs shares were forfeited immediately after the final call. The journal entry is: The amount was payable as follows 20,000 as profit on sale of investment as operating activity. (All India 2015) 60 on allotment (including premium) (Delhi 2015) On application and allotment (-) 4 per share (including premium 1) Give two examples. 1,20,000 + Rs. Answer: Question 10: Explain the Current Assets and Non-Current Assets. During this period, only skeletal services shall be maintained and all major / important activities including payment of global pre bid EMD and other online payments for auctions shall remain suspended. (a) AoA The forfeited shares were re-issued @ 12 per share as fully paid-up. We, at Vedantu, aim to maintain the lucidity and easiness of our study material. The compnay invited applications for issuing 70,000 shares. The law temporarily raised the estate tax exemption for single filers to $11.2 million from $5.6 million in 2018, indexed for inflation. Its main purpose is record keeping or maintenance of books of accounts, It should not be confused with accounting. Accounting, which has been called the "language of business", measures the results of an organization's economic activities and conveys this In this example, X Company used less money in their financing activities than they generated during the year. Interest on investment was received on March 31, 2011. Why? After payment for building in cash, the balance of building account will be transferred to creditors for building account. Expense- It is made to run business smoothly and to carry day to day business activites. Applications for 1,50,000 shares were received and allotment was made to all the applicants on pro-rata basis. What is meant by issue of shares at par? Accounting, which has been called the "language of business", measures the results of an organization's economic activities and conveys this Question 2. The amount was payable as follows on application was 2 per share, 4 was payable each on allotment and first and final call. The issue was over-subscribed by three times. [IAS 7.1], The statement of cash flows analyses changes in cash and cash equivalents during a period. Answer : Long term payables are regarded as loan to the business that will increase both cash balance (due to intake of loan) as well as liabilities of the business. On second and final cal Balance amount Important questions can help students to prepare for their final exams. Once entered, they are only 6,00,000 Rs. Question 3. Give the meaning of forfeiture of shares. Another shareholder, Sudha, who applied for 1,800 shares and belonged to Category (i), did not pay the first and second and final call money. (ii) Excels application fully adjusted towards allotment and calls. Also prepare notes to accounts. However, the non-monetary events are not recorded in accounts; for example, promotion of manger cannot be recorded but increment in salary can be recorded at the time when salary is paid or due. Question 1. Point of Knowledge:-Direct expenses are those expenses incurred up to the point of taking them to the place of business for sales of products. All expenses have debit balance. Q3. 50,000Direct Expenses = Rs. The accountancy syllabus in class 11 is carefully tailored to educate the students with basic concepts and theories of accountancy. The company issued 50,000 shares to the vendor for building purchased and 2,00,000 shares were issued to the public. Private placement is the opposite of a public issue, in which securities are made available for sale in the open market. Thats because accounting rules allow the company to depreciate (expense) the cost of the investment over time. 15,00,000 = Rs. D Ltd invited applications for issuing 10,00,000 equity shares of 10 each. On one hand, the purchase of these items will increase their individual accounts and this will increase the total amount of the assets in the business; so, both the accounts will be debited. What is meant by issued capital? On final call: 8 per share (including 5 premium) The final call of 3 per share was yet to be made. This can be better understood with the help of an example of two firms. You are required to complete these blanks. Sohan, a holder of 1,000 shares did not pay the first call and the final call. Show the effect of the following transaction on the accounting equation: Example-Advertisement. And payment of wages and salaries, electricity, food items and other items used in accommodation and stay of customer will be an operating activity related to expenditure. KS Ltd invited applications for issuing 1,60,000 equity shares of 10 each at a premium of 6 per share. The amount invested could be in the form of cash, goods, etc. Those who applied for 1,00,000 shares were allotted = 75,000 shares 7. All calls were made and were duly received except on 100 shares held by Rajani, who failed to pay the second and final call. On application 1 On allotment 2 (ii) Also prepare Notes to accounts for the same. Question 4. The excess of expenses over related revenue is known as loss. This amount is to be paid within 30 days. Solve as Q no. Answer : The evidence provided by the source document is important in the following manners: 15,00,000; Sales Rs. The company issued 50,000 equity shares at a premium of 5 per share. (ii) Y Ltd forfeited 180 shares of 10 each, 8 called-up, issued at a premium of 2 per share to R for non-payment of allotment money of 5 per share (including premium). For example, loan taken from bank. His shares were forfeited. Out of the forfeited shares, 2,500 shares were re-issued as fully paid-up @ 8 per share. 10,000 and Rs.20,000 respectively, then the cash from operating activities will be equal to Rs..(Rs. Question 14: When liabilities are listed in order of liquidity in a Balance Sheet, which should be listed first Capital or Creditors? (l) Received Rs 19,000 payment from the client created in transaction (k). issue price and face value are same. Securities premium reserve cannot be used as working capital. On first call : 50 per share Students can study from important questions. (n) To applicants for 50,000 shares 40,000 shares 2. Capital of the owner is treated as liability to the business because the business has to repay the amount of capital to the owner, in case of closure of the business. (i) Present the share capital in the balance sheet of the company as per Schedule III of the Companies Act, 2013. Solution 1: They will judge on the basis of the financial statement how much bonus and raise in their salary is probable from the companys earnings. Suggest the alternatives available to the Board of Directors for the allotment of shares. Capital has credit balance. 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On application 15 per share India Auto Ltd is registered with an authorised capital of 7,00,00,000 divided into 7,00,000 shares of 100 each. To be relevant, information must help the users of accounting information in making decisions. Objectives of Cash Flow Statement Shares issued for consideration other than cash are paid through The future is on the ballot. There was a gain of Rs. Y Ltd forfeited 100 equity shares of 10 each for the non-payment of first call of 2 per share. What is the name given to the part of capital of a company which is called-up only on winding up? 2,000. Applications for 1,60,000 shares were received. Question 6: What purpose does a Balance Sheet serve? The balance left in the share forfeited account after the re-issue is transferred to the capital reserve account. Typical adjustments appearing here include changes in long and short term debt (issuing and redemption), issuing of preferred stock, issuing of common stock, retirement of stock, and stock dividends paid in cash. All the key points of the topics covered in this chapter are highlighted in these notes to help students make a quick revision of this chapter before the exam. Prepare the Accounting Equation to show the effect of the above transactions on the assets, liabilities and capital. (b) loss generated by the company 1,10,000, Computation of Cost of Goods Sold:-Cost of goods sold = Opening Stock + Purchases + Direct Expenses Closing StockCost of goods sold = Rs. Accuracy. Dividend: A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, paid to a class of its shareholders. Rohit a shareholder holding 7,000 shares failed to pay both the calls and Namit, a holder of 5,000 shares did not pay the final call. Originally developed as instruments for the corporate debt markets, after 2002 CDOs became vehicles for refinancing mortgage-backed securities (MBS). Answer: Q5. On application 35 per share (including 30 premium) The issue price was payable as under On application 15 per share (including 12 premium) Answer : Formally, a string is a finite, ordered sequence of characters such as letters, digits or spaces. Recording: Only those transactions are recorded in books of accounts which can be measured in terms of money. Another shareholder holding 200 shares failed to pay the allotment money. Cash flows from financing activities are those that take place between a firm and its investors. 1,000 Rs. 1,40,000 (depreciation provided thereon Rs. Inc. Best Workplaces Early Rate Deadline 12/9 11:59 PM PT Apply Now Close Give a specimen of journal showing at least five entries. Capital reserve is the reserve which is not readily available for distribution of dividend. Financial statements should contain previous year data so that it can be compared with current year so that current performance be compared with past performance. WebSolution 2: Point in Mind DK Goel Solutions Class 11 Chapter 9 :- The first entry in the Journal is passed to record closing balances of the previous year.It is called the opening entry. Overview. It is the unit into which the capital of a company is divided. Purchases: It refers to the amount of goods bought by business for resale or use in production.it can be of cash or credit. This site is owned and operated by Big Blue Interactive, LLC. Describe Direct and Indirect method of ascertaining cash flow from operating activities. On application 3 per share Why is the evidence provided by source (d) None of the above (All India 2011) Samyesh, holding 2,000 shares did not pay the final call. The company offered to the public for subscription 1,00,000 shares. Her shares were also forfeited. Read below DK Goel Solutions Class 11 Chapter 21 Financial Statements. The long-term unemployed accounted for 20.6 percent of all unemployed persons. Answer: Working Note: Therefore, share first and final call received = 2,21,625 (2,25,000 3,375). Question 3. Cash basis of accounting has low accuracy. WebMSTC Data Centre shall be relocated from its present location to New Town Kolkata during the period from 6th August 2021 to 8th August 2021. It is mandatory to create capital reserve in case of On allotment : 4 per share Question 26. You choose an accounting method when you file your first tax return. Pass necessary journal entries in the books of Nikhil Ltd for the above transactions. issue price and face value are same. It is concerned only with recording of monetary transactions. L Ltd forfeited 470 equity shares of 20 each issued at a premium of 3 per share for the non-payment of allotment money of 8 (including premium 3) and first call of 5 per share. On first call 3 per share (iii) If these shares were re-issued at 50 per share fully paid up, what will be the amount of capital reserve? (i) The first and most important objective of cash flow statement is that helps to ascertain the gross inflows and out flows of cash and cash equivalents from operating, investing and financial activities. The amount was payable as follows 9,00,000 1/6Gross Profit = Rs. (i) Purchased furniture for 2,50,000 from M/s Furniture Mart. 15,00,000, Question 10:Calculate Net Sales and G.P. (b) credited with share face value 60,000 And expenditure related operating activity would be payments to staff, reporters, photographers, etc. Answer GG Ltd had issued 50,000 equity shares of 10 each at a premium of 2 per share payable with application money. The maximum amount of discount allowed on the re-issue of forfeited shares must not exceed the amount forfeited on re-issued shares. Book keeping is an art of recording the transactions in the books of accounts. Kayafab Ltd issued 1,00,000 equity shares of 10 each payable as 2 on application; 4 on allotment and 2 each on first and final call. (a) Fill in the blank spaces in the journal entries given below. (d) 7% 3,20,000 = Rs. 3. (b) MoA Use accounting equation to show the effect of the following transactions of M/s Royal Traders: 6,000 = Rs. Compute cash from operations from Pass the necessary journal entries for the above transactions in the book of DF Ltd. (Delhi 2019) The shares of Sitaram and Harnam were forfeited. (All India (C) 2016) The official source for NFL news, video highlights, fantasy football, game-day coverage, schedules, stats, scores and more. 60,000) was sold for Rs. On second and final cal Balance amount Cash Flows Web"Working with my mentor provided and continues to provide me with an outsider outlook on my business who can always show me the objectives and be a sounding board to problem solve. Arjun, a shareholder holding 1,000 shares paid the second and final call of 5 per share alongwith the first call. Expense: It is the amount used in order to produce and sell goods and services. The issue was fully subscribed and the amount was received as follows 4,00,000 Rs. As additional capital is introduced, so the amount of capital will increase, i.e. Q2. (All India 2016) Question 8. Operating activities generally reflect cash generated and/or paid as a result of the firms core business functions. You choose an accounting method when you file your first tax return. It involves recording them in a journal and keeping a systematic record of all of them. Cash Method. From a practical standpoint, if a company purchase an asset such as new plant equipment or machinery, then they most likely paid for that asset in cash. On first call 8 per share (including premium of 5) Issued Share Capital: One engaged in real estate and the other engaged in general business. (ii) Purchased a running business from Aman Ltd for a sum of 15,00,000. DK Goel Solutions Class 11 Chapter 21 solutions are free and will help you to prepare for Class 11 Accountancy. All India 2016 1,11,000 were received on account of allotment. Goel Brothers and post them to the ledger. On the other hand, as rent is paid in cash that reduces the cash balances, so cash account is credited. The forfeited shares were re-issued at 9 per share, as 6 per share paid-up. Pass necessary journal entries for the above transactions in the books of the company. 6,000; Purchase Rs. The primary goal of corporate finance is to maximize or increase shareholder value. Why are the rules of debit and credit same for both liability and capital? Out of the forfeited shares 1,000 shares were re-issued at 50 per share fully paid-up. Out of these 235 shares were re-issued at 19 each fully paid. On application 2 per share The profit and loss account of Roy Limited is given here under, Question 2. (i) Useful in short-term financial planning. Number of Equity Shares Issued = \(\frac{22,00,000}{110}\) = 20,000. Auditing of Financial Statements. Pass necessary journal entries for the above transactions in the books of X Ltd. Open calls-in-advance account and calls-in-arrears account wherever necessary. (All India 2010) 8,00,000 40% = Rs. Answer : Q17. (iv) Outstanding expenses increased by Rs. (ii) To write off the expenses of or the commission paid or discount allowed on any issue of shares or debentures of the company. Samprag Ltd has an authorised capital of 20,00,000 divided into equity shares of? Rohit has the following transactions: It implies that information must be factual and verifiable. (c) Sold machinery of original cost Rs. NCERT Solutions for Class 11 Indian Economic Development during different intervals of time in terms of cash and cash equivalents. Following are the topics covered which are covered: Accountancy, Accounting, and Book-keeping, Relationship between Accountancy, Accounting, and Book-keeping, Distinguish between Book-keeping and Accounting. 1,40,000. The amount was payable as follows The issue was fully subscribed and the company allotted shares to all the applicants. On allotment : 2 per share On application 2 per share Answer: Liabilities are mostly the services or credit that a business owes in the industry or to its investors, to be more precise. (i) Show how share capital will appear in the balance sheet of B Ltd as per Schedule III of the Companies Act, 2013. These notes are prepared by highly qualified teachers at Vedantu to facilitate an easy understanding of the concepts of accounting. Answer Rs. NCERT Solutions for Class 11 Computer Science (Python) A cash flow statement helps in determining the various causes for change in the cash balances during an accounting period. Answer: Creditors:It refers to those persons whose business buys goods on credit and payment has not been done yet. (All India 2017) On first call : 5 per share (including 1 premium) Applicants may be allotted less number of shares than they have applied for. Differentiate between source documents and vouchers. (c) Vendor, Question 105. The nature/type of enterprise can change altogether the category into which a particular activity may be classified. Do you agree? Credits are indented. Answer: Question 17: From the following balances extracted from the books of Sh. Her shares were also forfeited. Excess money received with applications was adjusted towards sum due on allotment. Step 2- Enter the date of transaction in the date column of the debit side of Mr As Account. Particulars- Details of business transactions like, name of the parties involved and the name of related accounts, are recorded. (All India 2019) (ii) Investing Activities: These are the acquisition and disposal of long-term assets, other investments not included in cash equivalents. Give journal entries to record the following transaction of forfeiture and re-issue of shares and open share forfeiture account. WebAccounting, also known as accountancy, is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. 9,00,000Gross Profit = Sales 20/120Gross Profit = Rs. An asset of a company lasting for more than a year is termed as a current asset. WebHow the EU budget works: where the money comes from and how it is spent, the EU as a borrower on the capital markets, spending and revenue by programme and by country, and the EU's focus on performance-based budgeting. Should a transaction be first recorded in a journal or ledger? How the various activities are classified (as per AS-3 revised) while preparing cash flow statement? All amounts were received except the final call of 2 per share on 3,000 shares. 90% of the forfeited shares were re-issued at 8 per share fully paid-up. It refers to those which are to be paid in the near future. 3 on page 4,00,000 = Rs. Her shares were forfeited. It provides information about the date, amount and parties involved and other details of a particular transactions. Shares offered to a specific group of people or to an organisation is called If shareholders make default in paying the money due on allotment or any call, the money not so paid is called calls-in-arrears. Salaries of employees will be considered as operating activity related to the expenditure. 1. Manu who had applied for 3,000 shares failed to pay the amount due on allotment and first and final call. 30,000Net Purchases = Rs. SSS Ltd forfeited 1,000 equity shares of 100 each for the non-payment of first call 20 per share and second and final call of 25 per share. Employees stock option plan is a plan whereby an option is given by the company to its whole time directors, officers and employees to purchase or acquire at a future date, a specified number of shares at a pre-determined price, which is usually lower than the market price. An accountant should record the information consistently. (c) private placement What is the maximum interest rate charged on call-in-arrears amount as per Company Act, 2013? 2. Janta Ltd had an authorised capital of 2,00,000 equity shares of 10 each. Give any two differences between preference shares and equity shares. Example In this example, lets say X Company purchased a new computer system for Rs. Similarly, short term marketable securities which can be readily converted into cash are treated as cash equivalents. Operating activities generally reflect cash generated and/or paid as a result of the firms core business functions. The motor car was worth Rs 90,000. Pass necessary journal entries for the above transactions in the books of the company. (b) Share at par account Give reason in support of your answer. (All India 2010) Cash Flows Cash flows are inflows and outflows of cash and cash equivalent. With the help of an example, briefly explain the alternatives available for allotment of shares in case of over subscription. The amount was payable as follows 25,500 were paid by issuing a promissory note in favour of P Ltd payable after two months and the balance was paid by issue of equity shares of 100 each at a premium of 25%. The shares were issued at a premium of 5 per share. Indirect Method :Following is the indirect method formula which is used to calculate cash flow from operating activities. Out of the forfeited shares 4,000 shares were re-issued @ 50 per share fully paid-up. Shares were allotted on pro-rata basis to the remaining applicants. Like other private label securities backed by assets, a CDO can be thought of as a promise to pay investors in a 4. Cash flows are classified and presented into operating activities (either using the 'direct' or 'indirect' method), investing activities or financing activities, with the latter two categories generally presented on a gross basis. Shares were allotted on pro-rata basis to the remaining applicants. 3,36,000 + Rs. Answer : The fundamental steps in the accounting process are diagrammatically presented below. who perform an in depth analysis as per the requirement of the stakeholders. Here's some advice on how to include things like a sales forecast, expense budget, and cash-flow statement. Excess money paid by the applicants who were allotted shares was adjusted towards the sums due on allotment. IAS 16 outlines the accounting treatment for most types of property, plant and equipment. Jouranlise the following transactions in the books of Harpreet Bros.: 3. Note Debtors and creditors account can also be prepared to calculate cash receipt or cash paid. 32 comments. Question 5. Question 23. 50,000, tax provision created during the year amounted to Rs. (iii) It also enhances the comparability of the reporting of operating performance by different enterprises because it eliminates the effects of using different accounting treatments for the same transactions and events. The accounting information of an entity must be also compared to its own information taken out over the years; this will help the management to know their progression and the entitys trend can also be determined. Voucher: A voucher is a written document which is created in support of a particular transaction. Amount due on allotment (95,000 x 4) = 3,80,000 X, who belonged to the first category and was allotted 300 shares, failed to pay the first and final call money. RD Sharma class 12 Solutions WebThe chapter contains lot of questions which can be very helpful for Class 11 commerce students of Accountancy and will also help build a strong concepts which will be really helpful in your career. Cost Accounting: The main purpose of cost accounting is to ascertain the total cost and per Question 2 (B): Calculate Gross Profit from the following information: Question 3 (A): Calculate cost of goods sold from the following: Solution 3 (A):Computation of Cost of Goods Sold:-Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses Closing StockCost of Goods Sold = 40,000 + 50,000 + 10,000 15,000Cost of Goods Sold = Rs. Accounting for share capital Important Questions for CBSE Class 12 Accountancy Accounting Treatment of Issue Shares 1.Terms of Issue of Shares (i) Issue of shares at par When shares are issued at their face value, the shares are said to have been issued at par. 2,50,000-50,000= Rs. It acts as an evidence in the count of law. (i) To write off preliminary expenses of the company. (ii) Allot 20,000 shares to Mohan who had applied for similar number. 28 on page 313 and 314. (d) Bobbie transferred title of motor car to the business. Cash Equivalents Cash equivalents are short-term highly liquid investments that are j readily convertible into known amount of cash and which are subjected to an insignificant risk of change in value. Mohan failed to pay the allotment money and Sohan who belonged to the category (iii) and was allotted 3,000 shares paid both the calls with allotment. Ans. (Delhi 2011) (a) capital profits earned by the company, Question 101. Accuracy. This publication was updated on April 11, 2022, to address the SECs March 30, 2022, proposed rule on special-purpose acquisition companies, which is discussed in further detail below. (a) If the net profits earned during the year is Rs. You can refer to the revision notes of this chapter on Vedantu, for a better understanding of all the concepts. Debtors: It refers to those persons whose business has been sold goods on credit and payment has not been received yet. (a) Share application account On first and final call Balance amount Cash Flow from Financing Activities Financing activities are the activities which result in change in the size and composition of the owners capital (including preference share capital) and borrowings (including debentures) of the enterprise from other sources. Following is the Financial Statement of Garima Ltd. Question 1. (c) Sold goods to Bhanu costing Rs 10,000/- Rs 12,000 First Call Money Received = 19,92,000 A few shareholders to whom shares were allotted in full, failed to pay the allotment money 1,20,000 were received on first call. Present the share capital of the company as per the provisions of Schedule III, Part I of the Companies Act, 2013. Preference shares are paid dividend at a fixed rate. The company received applications for 85,000 equity shares. Beauti tradeRs Also post them in the ledger. 20,000 = Rs. BMY Ltd invited applications for issuing 1,00,000 equity shares of 10 each at a premium of 10 per share. (All India; Delhi 2015) Applications for 1,80,000 shares were received. Machinery 7,00,000; debtors 2,50,000; stock 5,00,000; building 11,50,000 and bills payable 2,50,000. 10 each. A shareholder holding 300 shares paid the full share money with application. Securities premium can also be utilised for three other purposes besides (i) issuing fully paid bonus shares and (ii) buy-back of shares. Thus, if Rs. How can I find important questions for Class 11 Accounting Chapter 1? According to Section 2 (8) of the Companies Act, 2013, authorised capital means such capital as is authorised by the memorandum of a company to be the maximum amount of share capital of a company. Question 4. (All India 2016) A Ltd forfeited 100 equity shares of? IAS 16 was These are generally long-term assets for a company. The objective of IAS 7 is to require the presentation of information about the historical changes in cash and cash equivalents of an entity by means of a statement of cash flows, which classifies cash flows during the period according to operating, investing, and financing activities. (All India 2019) State any three purposes other than issue of bonus shares for which securities premium can be utilised. Excess money received on applications was adjusted on sums due to allotment. Rahim, a shareholder, who was allotted 3,000 shares failed to pay allotment money and his shares were immediately forfeited. Capital Reserve = 1,600. The Class 11 Accountancy Chapter 1 Revision Notes are prepared by professional teachers in easy language. Q2. Afterwards the first and final call was made. It is also helpful in checking the accuracy of past assessments of future cash flows and in examining the relationship between profitability and net cash flow and impact of changing prices. Answer: Question 83. Here's some advice on how to include things like a sales forecast, expense budget, and cash-flow statement. Profit =Revenue-Expenses. Pass necessary journal entries for the above transactions in the books of the company. On first and final call Balance amount On second and final call : Balance amount According to the dual aspect concept, all the business transactions that are recorded in the books of accounts, have two aspects- debit and credit. Question 3. Answer: Question 84. Decrease in expense What amount will be received at the time of making the first and final call. WebMSTC Data Centre shall be relocated from its present location to New Town Kolkata during the period from 6th August 2021 to 8th August 2021. (b) increased Ashok, a shareholder, holding 5,000 shares failed to pay the allotment and the call money. Question 7. Accounting helps in keeping a record of the assets and liabilities of a business, thereby making it easier to balance the expenses and calculate the profit margin through all the financial transactions. (b) 12% Shares were allotted to all the applicants. (i) X Ltd forfeited 20 shares of 10 each, 7 called-up on which the shareholder had paid application and allotment money of 5 per share. State the uses of cash flow statement Give its two examples. Students can learn more about this in the Class 11 Accountancy Chapter 1 Revision Notes. The report prepared by the accountant should be useful for the company for making future decisions. (ii) Cash flow from investing activities. Afterwards the first call was made. (Delhi 2010) 1,14,000, Computation of Cost of Goods Sold:-Cost of Goods sold = Net Sales Gross ProfitCost of Goods sold = Rs. Increase in revenue (+) Calls-in-advance (750 x 3) = 2,250 Present the share capital in the balance sheet of the company as per Schedule III, Part I of the Companies Act, 2013. Forfeiture results in reduction of share capital. Every transaction affects two accounts simultaneously, that is represented by debiting one account and crediting the other account. On application and allotment : 20 per share The re-issued shares included all the forfeited shares of HarnAnswer: Loss= Expenses-Revenue. (c) Purchased office supplies on credit for Rs 12,000. Applications were received for 70,000 shares. DN Ltd issued 50,000 shares of 10 each payable as 2 per share on application, 3 per share on allotment and 5 on first and final call. To maintain proper records of business transactions according to specified rules which helps them to minimize the chance of omission and fraud. Number of equity shares issued = 41,000. The amount was payable as follows Question 74. On application 3 per share (including premium 1 per share) Bhanu Traders and Post them into the Ledger. Answer: Suvidha Ltd is registered with an authorised capital of 10,00,00,000 divided into 10,00,000 equity shares of 100 each. On Application 3 per share (including premium 1) Even though a business should ideally have a greater amount of assets than liabilities, liabilities are not always a disadvantage. (c) asset, Question 104. 15,000. Real gross domestic product (GDP) increased at an annual rate of 2.9 percent in the third quarter of 2022, in contrast to a decrease of 0.6 percent in the second quarter. The payment to M/s Furniture Mart was made by issuing equity shares of 10 each at a premium of 25%. In this scenario, Vedantus revision material will be a good resort. (b) public offer Answer: SK Ltd invited applications for issuing 3,20,000 equity shares of 10 each at a premium of 5 per share. Payment worth Rs 1,200 through bank, supported by cheques Businesses that are corporations or have gross revenue over $5 million per year are required to use the accrual method, according to the IRS. Answer: Q8. (i) Present the share capital in the balance sheet of the company as per Schedule III of the Companies Act, 2013. On first and final call Balance amount Most small businesses can use either method. Allotment was made to the remaining applicants as follows. Thus the rules of debit and credit are same for both liability and capital. 6. It means such part of the capital which is for the time being subscribed by the members of a company. The journal entry is: Z Ltd purchased furniture costing 2,20,000 from CD Ltd. Here, rent is an income; hence, rent account has been credited and cash has been debited, as rent received increases the cash balances. 6,24,000 = Rs. Applications for 3,00,000 shares were received. Question 8: Ascertain the value of closing stock from the following: Solution 8:Computation of Closing Stock:-Cost of goods sold = Opening Stock + Purchases + Direct Expenses Closing StockClosing Stock = Opening Stock + Purchases + Direct Expenses COGSClosing Stock = Rs. In the above example, we saw that the company made investment in fixed assets and used Rs.40,00,000. 15,000; Packing Expenses on Sales Rs. Solution 7:Net Sales = Rs. What is meant by private placement of shares? Which category of shares are redeemed after a specific given period according to r the terms of issue? 1,000; Gross Profit Rs. Shares were alloted on pro-rata basis to the remaining applicants. The re-issued shares included all the forfeited shares of Ashok. 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