Financial Accounting M Com I

Prepared by M com I JDCC 2015
Solved Numerical
Financial Accounting
M.com I
Solved Questions.
Prepared by M.com I Jinnah

Degree College of Commerce
Mansehra.
2015
Issue of Right and Bonus shares
Supervised by TAHIR HUSSAIN +923449545245

Right shares:
According to company act 1984 section 86,
An option to buy certain securities at certain privilege price within specified period of
time
Bonus:
The extra dividend paid by the company out of accumulated profit to their
shareholders is called bonus
Bonus share:
When bonus is paid in the form of shares to existing shareholders against
any accumulated profit or reserve such type of issue is known as bonus issue or issue
of bonus shares
Value of right.
V=__M S
N+1
V = value of right share

M = market value of share
S = value of share offered by company
N = number of share
Q1
M (Market value) = 350

S (offered value) = 100 + 20 % prem.
N (number of shares) = 5/3
Solution
V = MS
N+1
350 - 120
5/3 + 1
230
1.66 + 1
230
2.66
86.25
Q2
M = 20, S = 15 (10 + 5), N = 10/2
Solution
V=Ms/N+1
V = 20 15 / 10/2 + 1
V=5/5+1
V=5/6
V = 0.83
Q3
M = 240, S = 120, N = 2/1
Solution
V = m s / n + 1
V = 240 120 / 2/1 +1
V = 120 / 2 +1
V = 120 / 3
V = 40
Q4
General journal
Dat Particulars Dr (amount) Cr ( amount )
e
1 Shareholders a/c 100,00,000
To share capital 50,00,000
To share premium 50,00,000
2 Bank 7500,000
To shareholder a/c 7500,000
Received cash @ Rs 15
3 Bonus 2500,000
To shareholders a/c 2500,000
Bonus @ 5 per share
Q5
General journal
e
1 Premium w-1 600000
To bonus to shareholder a/c 600000
2 Bonus to shareholder a/c 600000

To share capital a/c 6000000
Working - 1
Total capital = 10, 00,000
Bonus declared = 60 %
Value of bonus = 10, 00,000 x 60 / 100 = 600,000
Q6
General journal
e
1 General reserve w-1 600000

To share premium 400000
Working; 1
Original capital: 10, 00000
Bonus declared: 60 %
1000000 x 60/100
600000

Q7
General journal
e
1 Profit & loss 150000

( 12500 x 10)
To share premium 25000
(12500 x 2 )
Working. 1
Calculation of number of bonus shares.
Bonus declared. Rs. 150000
Value of share. 12
No of shares. 150000/12 = 12500
Q8
General journal
e
1 Share Premium 50000
Reserve fund 60000
Profit & loss 40000
To bonus to shareholder a/c w-1 150000
W-1
Amount of bonus:
Total shares. 2000 x
1500 x 10
150000

Balance Sheet
Equities Amount Assets Amount
Share capital (2000 + 1500) x10 350000 Sundry Assets 475000
Reserve fund ( 100000 60000) 40000
Profit & loss (80000 40000) 40000
Creditors 45000
Total 475000 Total 475000
Q. 9
General journal
e
1 Investment 162063
To cash 162063

To dividend 162063
To general reserve 100000
To bonus 162062
To contingencies reserve 25000
*Bonus 162063
To investment 162063
Dividend 162063
To cash 162063
Bonus shares are issued from investment, made in Tannery Ltd.
Q 10
Calculation of bonus to be declared.

Rule applied when amount of bonus to be declared is not given. Rule (The remaining balance
of reserve must not be less than 25% of new capital (existing capital + bonus declared)
Q=4FR-1C
5
Q= QUANTUM OF RESERVE. ?. 5200,000
FR= FREE RESERVE 80, 00,000
C= EXISTING CAPITAL 60, 00,000
C + Q = NEW CAPITAL ? 60,00,000+5200,000= 11200,000
So FR-Q= (C+Q)
FR= (C+Q) + Q
FR= C+Q+4Q journal entries
4 Reserve a/c 5200000
FR= C+5Q To bonus to shareholders 5200000
4 To bonus to shareholders 5200000
4FR= C+5Q To share Capital 5200000
4FR-C= 5Q
4FR-C= Q
5
Now Q= 4FR-C
5
Q= 4( 80,00,000)-6000000
5
Q= 320,00,000-6000000
5
Q= 260,00000
5
Q= 5200,000
Now remaining free reserve is 80,00000-5200000=2800000 which is 25% of 11200000
Q 11
General journal
e
1 Reserve fund 360000
To share capital a/c w-1 300000
Share premium a/c 60000
W-1
No of bonus share.
Bonus declared. 360000
Value per share. 12
360000/12 = 30000
Capital. 30000 x 10 = 300000
Premium. 30000 x 2 = 60000
Q 12
General journal
e
1 Reserve fund 6000
Profit & loss a/c 4000
To bonus to shareholder a/cw-1 10000
W-1.
Share capital. 50000
Bonus = 20 % of capital. (50000 x 20/100) = 10000
Balance sheet
Share capital ( 50000 + 10000) 60000
Reserve fund ( 30000 24000
6000 ) 11000
Profit & loss ( 15000 4000 )
Total 95000
Q 13
General journal
e
1 Reserve A/C 35000
Profit & loss A/C 29000

W-1
Calculation of the amount of bonus.
Bonus declared= 2 shares against 5 held
Original capital = 160000
Bonus = 160000 x 2/5
= 64000
Balance sheet
Authorized Capital. 300000
Paid up Capital.(160000 + 64000) 224000
Reserve fund ( 90000 35000 ) 55000
Profit & loss ( 60000 29000 ) 31000
Total 310000
Redemption of preference shares (Mukhar G. Volume I Chapter # 36)

Definition.
When capital is refunded after a specific period of time on agreed price
such a practice is called redemption of share
Methods.
There are three methods used to redeem the preference shares.
1. Fresh shares are issued to redeem the existing shares.
2. Capitalization of undistributed profit.
3. Both 1 & 2 together
Accounting entries.
Method 1. By issuing fresh shares
At par.
1. When issued. ( Bank To Share capital)
2. When redeemed (redeemable preference share To preference shareholder A/c)
3. When payment is made ( preference shareholders To bank)
At Discount.
1. When issued ( bank + discount To share capital )
2. When redeemed ( redeemable preference share To P. shareholder + discount)
3. When payment is made ( preference shareholders To bank )
At premium.
1. When issued ( bank To S. capital + premium )
2. When redeemed (redeemable preference share + premium To P. s. holders)
3. When payment is made ( Preference share to Bank )
4. When premium is adjusted (P & l a/c + security premium To premium on redemption of
redeemable preference share )
Method 2. Capitalization 0f undistributed profit.
At par
1. When redeemed at par ( redeemable p. share To preference shareholders a/c) (due)
2. When payment is made ( P. shareholder To Bank )
3. When transferred to capital ( profit & loss To capital redemption reserve A/C)
At premium.
1. Redeemed ( redeemable P. share + premium on redemption To P. shareholder a/c)
2. Payment made ( preference shareholder To Bank)
3. Adjustment of premium ( profit & loss to premium on redemption )
4. Transfer the amount of redemption to capital ( General Reserve, Profit & loss To capital
reserve)
Q .1
Journal entries. Dr Cr
Date Particulars Amount Amount
1 Redeemable preference share 1800000
To Preference shareholders a/c 1800000
Amount payable on redemption is recorded
2 Bank 900000
To share capital 900000
Issued fresh shares for redemption W-1
3 General reserve A/c 900000
To Redeemable preference share 90000
Amount of reserve capitalized for redemption of shares.
4 Preference shareholders a/c 1800,000
To bank 1800,000
Payment made
5 Profit & loss 900,000
To capital redemption reserve a/c 900,000
Being amount transferred to capital reserve a/c W-2
Balance sheet
Liabilities Amount Assets Amount
Share capital 40000 x
100=40,00,000 4900,00
9000 x 100= 900,000 0
Reserve & Surplus
Securities and premium 500,000
Loan 1800,00
Current liabilities & provision 0
1600,00
0
Total 8800,00
0
W1 W-2 amount transferred to capital
redemption , reserve fund.
Calculation of no of new shares to be issued. Value of share redeemed=
1800,000
Redeemable preference shares. 1800,000 less proceed from new shares
(900,000)
Less reserve fund utilized (900,000)
900,000
900,000
900,000 = 9000 shares
100
Q .2
Premium on red. Of pref. shares 60000 1260000

To Preference shareholders a/c (w-1)
Amount payable on redemption is recorded ( 5% premium)
2 Profit & Loss 60000
To premium on red. of pref. shares 60000
Premium adjusted
3 Bank 300000
Profit & loss 50000
To investment 350,000
Investment sold out.
4 Bank 972000
To share capital ( 81000 x 10 ) w-2 810,000
To share premium ( 81000 x 2 ) 162,000
New shares are issued for red. At premium
5 Pref. shareholders a/c 1260,000
To bank 1260,000
Payment made for redemption
6 Profit & loss 390,000
To capital redemption reserve a/c w- 3 390,000
Balance sheet
Liabilities Amount Assets Amount
Issued capital 400000 + 810,000 4810,000 Plant & machinery 25,00,00
Profit & loss 200,000 Furniture & fixtures 0
Sundry creditors 1100,00 Stock 900,000
Security premium 162000 Debtors 1500,000
Capital redemption reserve 390,000 Bank w-4 1400,000
362,000
Total 6662,00 Total 6662,00
0 0
W1 W- 2
Total amount payable. No of new shares to be issued.
Face value of redeemable shares. 1200,000 net amount payable. 1200,000
Add premium 5% 60,000 less available profit. (390,000)
Total payable 1260,000 810,000
No of shares = 810,000/ 10 = 81000

W-3
Balance of profit.
Profit & loss A/C 700000
Less
Loss on investment (50,000)
Adjusted for premium (60,000)
Balance for balance sheet. (200,000)
Capital redemption reserve 390,000
W-4
Dr Bank Account Cr
Particulars Rs Particulars Rs
Balance b/d 350,000 By preference
Investment 300,000 Shareholders a/c 1260,000
Share capital 810,000 Balance 362, 000
Share premium 162000
Total 1622000 Total 1622000
Q .3
Premium on red. Of pref. shares 5600
To Preference shareholders a/c (w- 61600
1)

Amount payable on redemption is recorded ( 5%
premium)
2 Securities premium 5600
Premium adjusted
To capital redemption reserve a/c
Undistributed profit transferred to capital redemption 56000
reserve account.
4 Pref. shareholders a/c 55000
To bank 55000
Payment made for redemption w-2
5 Capital redemption reserve a/c 42000
To bonus to bonus to shareholders account w- 42000
3
Issue of bonus shares 1 to each 4 held
6 Bonus to shareholders a/c 42000
To share capital account 42000
Balance sheet
Liabilities Amoun Assets Amount
t
Issued capital 168,000 + 42000 210,000 Fixed asset 200,000
Securities premium w-4 1400 Current asset w-7 65,000
Profit & loss w-5 5000
Shareholder account 6600
Capital redemption reserve w-6 14000
Sundry creditor 28000
Total 265000 Total 265,000
W-1 w-2 w-3
Description Rs Description Rs Description Rs
Amount payable for Amount paid Bonus shares
redemption 5600 Total payable 61600 Equity shares 16800
Net value of P. 0 Less 60 Ratio of bonus
shares 5600 shareholders not (6600) No of bonus shares.
Add premium 10 % 6160 found. ( 60 x 110) 55000 16800 x 4200
Total payable amount 0 Net paid shares
W-4 w-5 w-6

Securities premium Balance of profit Capital redemption
Previous premium 7000 Previous balance 61,000 reserve
Less adjusted 5600 Less capitalized (56000 Capitalized and 56000

Balance 1400 Balance ) transferred to it. (42000
5000 Less issue of bonus )
Balance 14000
W-7
Description Rs
Current assets
Total current assets 120,00
Less cash paid 0
Balance (55000
)
65000
Q .4
1 Redeemable preference share 50,000
Premium on red. Of pref. shares 2500
To Preference shareholders a/c (w- 52,500
1)
Amount payable on redemption is recorded ( 5%
premium)
2 Securities premium 2500
Premium adjusted
3 Bank 27000
Profit & loss 1000
To investment 28000
Investment sold out.
4 Bank 12,000
To share capital ( 1000 x 10 ) 10,000
To share premium ( 1000 x 2 ) 2,000
New shares are issued for red. At premium
5 General reserve 20,000
Profit & loss 20,000
To capital redemption reserve a/c w- 2* 40,000
Capitalization of undistributed profit
6 Preference shareholders a/c 52500
To bank account 52500
Amount of redemption paid
Balance sheet

Liabilities Amoun Assets Amount
t
Issued capital Land & building 100,000
9000 x 10 ) +(1000 x 10 ) 100,000 Plant 30,000
Securities premium w-3 9500 Furniture 2000
Profit & loss w-4 4000 Current asset
Capital redemption reserve W-2 40,000 Stock 30,000
Current liabilities 30,000 Debtors 15000
Bank w-5 6500
W-1 w-2 w-3
Amount payable for Capital Securities
redemption 5000 redemption 50000 premium 10,000
Net value of P. 0 reserve Previous premium (2500)
shares Face value of (10,00 Less adjusted 7500
Add premium 5 % 2500 red.prf.shr 0) Balance
Total payable amount 5250 Less proceed from 40,000
0 new shares.
W-4 W-5 Dr Bank Account Cr

Description Rs Amount particulars Amount
Profit & loss
Previous balance 25000
Less loss on investment (1000)
Less capitalized (20000)
Balance 4,000
Particulars
Balance b/d 20000 By
Investment 27000 preference
Share capital 10,000 Shareholders 52500
Share premium 2000 a/c 6500
Balance
Issue and redemption of debenture
Q.no 1 journal enrties

Dat Particulars Rs. Rs
e
A Bank 100000
To 6% debenture account 100000
Issued at par
B Bank 110000
To debenture 100000
To premium 10000
Issued at premium
C Bank 90000
Discount 10000
To debenture Account 100000
QNo.2 journal enrties

e
A Bank 90000
Discount 10000
Issued at discount
B Bank 55000
To debenture 50000
To premium 5000
Issued at premium
C Vendor 100000
D Debenture suspense a/c 600000
To debenture a/c 600000
Q.No.3
journal enrties
e
A Bank 40000
Issued at par
B Bank 36000
discount 4000
To debenture 40000
Issued at discount
C Bank 42000
To premium 2000
D Bank 40000
Loss on issue of debenture 4000
To debenture 40000
To premium payable 4000
Issued at par redeemable at preium
E Bank 38000
Discount 4000
To debenture 40000
To premium 2000
Issued at discount redeemable at premium
Q.No4.
1.When debentures are issued at par
journal enrties
e
1 Assets 400000
goodwill 30000
To liability 50000
To Rahim brothers 380000
Assets and liabilities taken over
2 Rahim bros 380000
To debenture 380000
Purchase consideration paid
2. when debentures are issued at 10% discount

journal enrties
e
1 Assets 400000
goodwill 30000
To liability 50000
2 Rahim bros 380000
w-1 Discount 42220
To debenture 422200
To cash 20

3- When debentures are issued at 10% premium
journal enrties
e
1 Assets 400000
goodwill 30000
To liability 50000
2 Rahim bros 380000
w-2 To debenture 345400
To premium 34540
To cash 60
Working 1
No of debentures to be issued to satisfy purchase consideration of Rs 380000. When
debentures are issued @ 90
380000/90 = 4222.22
As we cant issue debenture in fraction so we only issue 4222 debentures and the balance
amount will be paid in cash.
Amount of debentures = 4222 x 100 = 422200
Purchase consideration. 380000 & discount 4222x10 = 42220
Dr side= 380000+42220= 422220 where as the Cr side is 20 less which is paid in cash.
Working -2
No of debentures to be issued to satisfy purchase consideration of Rs 380000. When
debentures are issued @ 110
380000/110 = 3454.54
As we cant issue debenture in fraction so we only issue 3454 debentures and the balance
amount will be paid in cash
Amount of debentures. 3454x100= 345400 & premium 3454x10=34540
Cr side . 345400+34540= 379940 which is less by Rs 60 from the Dr side
So 60 will be paid in cash.

Q.No.5
Journalentries
e
A (i Profit &loss appropriation
To debenture redemption fund a/c
Making provision
(ii) Debenture
To bank Account
Entry for redemption
B Debenture
(i) To Bank
Redemption out of capital
c Bank
To sinking fund investment
Investment sold for redemption
Debenture
To bank
Redemption
D i Profit & loss
To debenture redemption fund
Debenture
To bank
Redemption out of profit
ii Debenture
To bank
Redemption out of capital
Q.No.6 Debenture redemption fund investment account

Particulars Nominal Cost Particulars Nominal Cost
Balance 20,000 16000 Bank (sale) 12000 10080
Balance transferred 480 Balance 8000 6400
to d.r.f. a/c
Total 20,000 16480 Total 20,000 16480
% of cost to the nominal value. 16000/20000=80%
80000x80/100= 6400
12000 nominal value sold @ 84 s0 12000x84/100= 10080
Debenture redemption fund Account
Redemption of debenture 10,000 Balance 16000
Premium on redemption 100 Debenture redemption fund 480
Balance 6380 investment account
Debenture Account
Redemption 10,000 Balance 50000

480
Balance 40000
Q.no.7
(i) Cum interest (cum interest mean that the price which is paid to purchase debentures,
included interest) so we deduct the interest to calculate the net purchase price of debentures.
Cum interest price = 100000x90/100 = 96000
Less interest (2000) for four months @ 6 % (100000 x 6/100 x 4/12)
Amount paid for debentures94000
(ii)Ex- interest ( ex - interest mean interest is not included in the price thats why we add up the
interest to calculate the total amount paid.
Ex-interest price 100000 x 96/100 = 96000
Add interest = 2000 for four months @ 6 % (100000 x 6/100 x 4/12)
Total amount paid 98000
Journal entries (cum interest)
Date Particulars Rs. Rs
30-4-93 Own debentures a/c 94000
Interest a/c 2000
Being own debentures purchased
30-4-93 Debentures 100000
To own debentures 94000
To Profit on debenture 6000
Cancellation of own debentures
30-4-93 Profit on debenture redemption 6000
To capital reserve 6000
Profit transferred
31-12-93 Profit & loss 2000
To interest a/c 2000
Interest on debenture closed to profit

30-4-93 Own debentures a/c 96000
Interest a/c 2000
Being own debentures purchased
30-4-93 Debentures 100000
To own debentures 96000
To Profit on debenture 4000
30-4-93 Profit on debenture redemption 4000
To capital reserve 4000
Profit transferred
31-12-93 Profit & loss 2000
To interest a/c 2000

Q.no 8
1-1-89 Bank 1900000
Discount 100000
To debenture 20,00,000
Being debentures issued
30-6-89 Interest 70,000
To cash 70,000
31-12-89 Interest 70,000
To cash 70,000
Profit transferred
31-12-89 Profit & loss 140,000
To interest a/c 140,000
Purchase of debentures out of profit
31-12-89 i.Profit & loss 200,000
To debenture redemption fund 200,000
ii. debenture 200,000
To cash 191000
To profit & loss 9000
Purchase of debentures out of capital
Debenture 200,000
To bank 191000

Q.No.9Journal entries
1-7-90 Bank 200,000
To 6% debenture 200,000
Issue of debenture at par
31-12-90 Debenture interest 6000
To bank 6000
Interest for 6 months paid
31-12-90 Profit & loss 6000
To debenture interest 6000
Interest transferred to profit
31-5-91 Own debenture(200X98) 19600
Interest 500
To bank 20100
Own debenture purchased + interest paid for 5 months
30-6-91 Debenture interest (1800X6/100X6/12) 5500
To bank(200X6/100X1/12) 5400
To interest on own debenture 100
Interest on own 200 debenture for 1 month and
1800 debenture for 6 month paid
To bank 5400
Interest for 1800 + 200 own debenture for 6
months
31-12-91 Profit & loss 6000
31-12-91 Interest on own debenture 700
Interest transferred to profit (income)
To bank 5400
Interest for 1800 + 200 own debenture for 6
months
30-9-92 Own debenture 9550
Interest (CUM INEREST) 150
To bank 9700
Own 100 debenture purchased @ 97
To bank 5100
Payment of interest on 1700 debentures for 6
months recorded interest on own 200 debenture
for 6 months and on 100 debenture for 3 months

31-12-92 Debenture 20,000
To own debenture 19600
To capital reserve
200 debentures cancelled and profit credited to 400
capital reserve fund
31-12-92 Profit & loss 12000
31-12-92 Interest on own debenture 1350
Interest transferred to profit (income)
Q .No.10 OWN DEBENTURE INVESTMENT ACCOUNT
Date particulars interest Principa Date particulars interest principa
l l
15-6- To bank 1146 49450 30-6-92 By interest 1250
(50000x5/100x5.5/12)
92
To bank 31-12-
(40000x5/100x4/12
667 39583 By debenture
92 intrst(50000+40000
1-11- )
)
92 =90000x 5% x1/2 2250
2812
Balance
Debenture inter 1125
90000x5/100x3/12
967 31-3-93
Profit & loss
30-6-93 Debenture intr 1125
Debenture Account
90,000
Total 5750 90000 Total 5750 90000
Q. no 11 Debenture redemption fund account

Date Particulars Amount Date Particulars Amount
1-1-92 By balance b/d 1163600
By bank (interest) 58180
31-12-92 Balance 1352580 By p & L app. a/c 130800
Total 1352580 Total 1352580

31-12-93 To general reserve 1550429 1-1-93 Balance 1352580
By bank (interest) 67629
To deb red fund invs a/c
31-12-93 580 By p & L app. a/c 130800
Total 1551009 Total 1551009
Debenture redemption fund investment account

1-1-92 Balance b/d 1163600
31-12-92 To bank 188980
31-12-92 Balance c/d 1352580

Total 1352580 Total 1352580
1-1-93 Balance b/d 1352580 31-12-93 By bank 1352000
By deb. Red. Fund a/c
31-12-93 580
Total 1352580 Total 1352580
Q. No 125% debenture account

31-12-91 Own debenture 100000 1-1-91 By balance b/d 800000
Bank 700000
Sinking fund account

31-12-91 Loss on 3% stock 3200 1-1-91 By balance b/d 749000
Balance transferred to 800000 31-12-91 By P & L a/c 28400
g/r By interest on s.f.i.a/c
31-12-91 24800
By own deb. a/c
1000

1-1-91 Balance b/d 99000 31-12-91 By 5% deb a/c 100000
13-12-91 Sinking fund 1000
(profit on cancellation)
3 % stock account
1-1-91 Balance b/d 650000 * 31-12-91 Bank 646800
Sinking fund 3200
(loss)
Sinking fund is 749000 out of which 99000 represents the own debenture and balance (749000-
99000) 650000 is 3% stock.
Interest on sinking fund investment account
31-12-91 To sinking fund a/c 24800 31-12-91 Debenture
(transfer) interest account 5000
Interest on 3% 19800
stock

Q.No.13 Journal entries

1-1-89 Bank 100,000
To 6% debenture 100,000
Issue of debenture at par
31-12 Profit & loss 18098
To sinking fund 18098
Sinking fund created
31-12 Sinking fund investment 18100
To bank 18100
Investment of sinking fund
31-12-90 Bank 905
To interest on sinking fund invst 905
Interest received against investment
31-12-90 interest on sinking fund invst 905
To sinking fund account 905
Interest transferred to sinking fund
31-12-90 Profit & loss 18098
18098 plus interest 905
31-12-90 Sinking fund investment 19000
To bank 19000
31-12-91 Bank 1855
30-9-91 Profit & loss 18098
To bank 20000
31-12-92 Bank 2855

31-12-92 Profit & loss 18098
Sinking fund investment 20900
31-12-92 To bank 20900
31-12-93 Bank 3905

31-12-93 Profit & loss 18098
To bank 77800
78100-300=77800
31-12-93 Sinking fund 300
To sinking fund invest 300
Loss on sale of investment transferred
31-12-93 Debenture 100,000
To bank 100,000
Redemption
31-12-93 Sinking fund 99705 99705
To general reserve
Balance of sinking fund transferred


Underwriting of shares and debenture
Q1
Statement showing liabilities of under writers
Underwriters A 50 % B 25 % C 25 %
Gross liabilities 37500 18750 18750
Less. Marked Application ( 15000 ) ( 7500 ) ( 15000 )
22500 11250 3750
Less unmarked Application w-1 ( 11250 ) ( 5625 ) ( 5625 )
11250 5625 (1875)
Less surplus of C (1250) ( 625 ) ----------
Total liabilities 10000 5000 nil
W-1
Total Application = 60000 A: 22500 x 50 % = 11250
Less Marked Application = 37500 B: 22500 x 25 % = 5625
Unmarked = 22500 C: 22500 x 25 % = 5625
Q.2
Underwriters A B C
Gross liabilities 30000 15000 5000
Less. Marked Application W- 1 ( 11000 ) ( 8000 ) ( 3500)
19000 7000 1500
Less unmarked Application W- 2 ( 9000 ) ( 4500 ) ( 1500 )
Net liabilities 10000 2500 Nil
Less Firm underwritten (5000) ( 2000 ) ( 500 )
5000 500 ( 500 )
Less Surplus Of C (6:3) ( 333 ) ( 167 ) -----------
4667 333 -----------

Add Firm Underwritten ( benefit not 5000 2000 500
given )
Total Liabiliries 9667 2333 500
W- 1
Calculation Of Marked applications. A B C
Total marked application including firm underwriting = 16000 10000 4000
Less firm underwriting ( 5000 ) ( 2000 ) ( 500 )
Net marked 11000 8000 3500
W- 2
Calculation Of unmarked application. Ratio. 30000 :15000 : 5000
6 : 3 : 1
Total application. 45000
Less firm underwritten (7500)
Less marked Application (22500)
Unmarked 15000
A: 15000 x 6/10 = 9000
B: 15000 x 3/10 = 4500
C: 15000 x 1/10 = 1500
Q. 3
Liabilities of underwriters
Total liabilities = 10000 shares
Less application received = 8000
Unsubscribed= 2000
Outstanding liabilities to each of the underwriters.
A : B : C
Ratio : 30 % 30 % 20 % = 80 % & 20 % is the liability of company.
A: 2000 x 30/100 = 600
B: 2000 x 30/100 = 600
C: 2000 x 20/100 = 400
Underwriters liabilities. =1600
Add companys liabilities. (2000 x 20/100)= 400
Total 2000
Q.4
Underwriters Alpha 40% Beta 40 % Zeta 20 %
Gross liabilities W 10,00,000 10,00,000 500,000
-1 ( 1300,000 ) ( 700,000 ) ( 250,000 )
Less. Marked Application
(300,000) 300,000 250,000
Less unmarked Application W -2 ( 60,000 ) ( 60,000 ) ( 30,000 )
( 360,000) 240,000 220,000
Less surplus of alpha ( 2:1) ----------------- (240,000) ( 120,000 )
Total liabilities Nil Nil 100,000
W-1 W-2
Gross liabilities. Unmarked Application.
Total shares = 2500,000 Total application received = 2400,000
Alpha: 2500000 x 40/100 = 10, 00,000 less marked = (22, 50,000)
Beta: 2500,000 x 40 /100 = 10, 00,000 unmarked application = 150,000
Zeta: 2500,000 x 20 /100 = 500,000 Alpha: 150,000 x 40 / 100 = 60,000
Beta: 150,000 x 40 / 100 = 60,000
Zeta: 150,000 x 20 / 100 = 30,000
Q. 5Statement showing liabilities of underwriters
Underwriters A 30 % B 30 % C 40%
Gross liabilities W 1 750000 750000 10,00,000
Less marked application (35000) (400,000) ( 13,50,000
)
400,000 350,000 (350,000)
Less unmarked applications W - 2 ( 60,000) ( 60,000) ( 80,000 )
340,000 290,000 (430,000)
Less surplus of C ( 3 : 3 ) (215000) ( 215000 ) -----------
Total liabilities 125,000 75000 Nil
W1 W-2
Gross liabilities unmarked application.
Total no of shares = 2500000 Total applications = 2300,000
Ratio. A 30 %, B 30 %, C 40% Less Marked = (2100, 000)
A: 2500,000 x 30/100 = 750,000 unmarked = 200,000
B: 2500,000 x 30/100 = 750,000 A: 200,000 x 30/100 = 60000
C: 2500,000 x 40/100 = 10, 00,000 B: 200,000 x 30/100 = 60000
C: 200,000 x 40/100 = 80,000
Q. 6
Statement showing liabilities of underwriters

Underwriters A 30 % B 30 % C 40%
Gross liabilities 24,000 10,000 6000
Less marked application (4000) (8000) ( 2000)
20,000 2000 4000
Less unmarked applications W - 1 ( 8640) (3600 ) (2160 )
11360 (1600) 1840
Less surplus of C (1280) --------- (320)
10080 Nil 1520
Add firm underwritten 3200 1200 4000
Total liabilities 13280 1200 5520
W -1
Calculation of unmarked Applications Ratio: A: B: C
Total Applications = 20,000 24: 10: 6
Less marked (14000) 12: 5: 3
6000 A: 14400 x 12/20 = 8640
Add firm u/w 8400 B: 14400 x 5/20 = 3600
Unmarked 14400 C: 14400 x 3/20 = 2160
Q. 7 Statement showing liabilities of underwriters
Underwriters A B C
Less marked application W-1 (4000) (5000) ( 2000)
20,000 5000 4000
Less unmarked applications W - 2 ( 5400) (2250 ) (1350 )
14600 2750 2650
Less firm underwritten (3200) (4000) (1200)
11400 ( 1250) 1450
Less surplus of B (1000) ----- (250)
10400 Nil 1200
Add firm u/w 3200 4000 1200
W-1 W-2
Marked applications. A B C Unmarked Applications.
Total marked 7200 9000 3200 Total application = 28400
Less firm u/w (3200) (4000) (1200) less marked by u/ws = (11000)
Marked by underwriters 4000 5000 2000 less marked by firm= (8400)
9000
OR

Underwriters A B C
Less marked application (7200) (9000) ( 3200)
16800 1000 2800
Less unmarked applications W 1 ( 5400) (2250 ) (1350 )
11400 (1250) 1450
Less surplus of B (1000) ------ (250)
10400 Nil 1200
Add firm u/w 3200 4000 1200
W-1
Unmarked Applications. A: 9000 x 12/20 = 5400
Total applications = 28400 B: 9000 x 5/20 = 2250
Less marked (19400) C: 9000 x 3/20 = 1350
Unmarked. 9000
Q. 8
Underwriters M N O P Q R
Gross liabilities 35000 30000 20000 10000 3000 2000
Less marked (10000) (22500) (20000) ( 7500) (5000) Nil
applications
25000 7500 Nil 2500 (2000) 2000
Less unmarked. w-1 (7000) (6000) (4000) (2000) (600) (400)
18000 1500 (4000) 500 (2600) 1600
Less surplus of Q & O. (3000) (2571.42 ------- (857.14 ------- (171.42
w-2 ) ) )
15000 (1071.42 Nil (357.14 Nil 1428.58
Less surplus of N & P. w- (1351.34 ) ------- ) ------ (77.21)
3 ) ---------- --------
Net liabilities 13648.58 Nil Nil Nil Nil 1351.37
M N O P Q R Total applications = 85000

Ratio: 35 30 20 10 3 2 = 100 less marked = (65000)
Unmarked = 20,000
Working 1 Working 2 Working 3

Unmarked Applications Surplus of Q & O Surplus of N & P

Total = 20,000 Total = Q + O Total = N + P
4000 + 26000 = 6600 1071.42 + 357.14 = 1428.56
M : 20,000 x 35/100 =7000 M : 6600 x 35/77 = 3000 M : 1428.56 x 35/37 =
N : 20,000 x 30/100 =6000 N : 6600 x 30/77 = 2571.42 1351.34
O : 20,000 x 20/100 =4000 O : Nil N : Nil
P : 20,000 x 10/100 =2000 P : 6600 x 10/ 77 = 857.14 O : Nil
Q : 20,000 x 3/100 =600 Q : Nil P : Nil
R : 20,000 x 2/100 =400 R : 6600 x 2/77 = 171.42 Q : Nil
R : 1428.56 x 2/37 = 77.21
Ratio ; 100 (O + Q) Ratio : 77 ( N + P )
100 (20 + 3) 77 - ( 30 + 10 )
= 77 77 40
= 37
Q. 9
Underwriters X Y Z
Gross liabilities 48,000 20,000 12,000
Less marked application (8000) (10,000) ( 4000 )
40,000 10,000 8000
Less unmarked applications W - 1 (10,800) (4500 ) (2700)
29200 5500 5300
Less firm underwritten (6400) (8000) (2400)
22800 ( 2500) 2900
Less surplus of Y w - 2 (2000) ----- (500)
20800 Nil 2400
Add firm u/w 6400 8000 2400
W1 W-2
Unmarked applications. Surplus of Y given to X
&Z
Total applications = 40,000 X: 2500 x 12/20 = 20000
Less marked application= (22000) Z: 2500 x 5/20 = 500
Unmarked 18000
Ratio:
X Y ZSo.X: 18000 x 12/20 = 10800
48 20 12Y: 18000 x 5/20 = 4500
24 10 6Z: 18000 x 3/20 = 2700
12 5 3

Branch accounting
Debtors system (cost price method)
Q no 1
In the book of head office
Dr Branch account
Cr
Particulars Amount Particulars Amount
Opening stock 11200 Cash sales 25000
Debtors 6300 Cash received from
Goods sent to branch 51000 debtors. 41200
Cash sent to branch Closing stock 13600
Rent 1500 Closing debtors 4100
salaries 3000
Branch profit 10900

Dr Debtors account
Cr
Opening balance of 6300 Cash received 41200
debtors 39000 Closing debtors 4100
Credit sales
Q. 2 in the book of head office

Branch account
Dr cr
Opening balances Remittance 363900
Stock 30000 Goods return 10000
Cash 7100 Closing balances
Debtors 14200 Stock 19000
Goods sent 300000 Cash 3700
Salaries paid by 8000 Debtors 19400
branch 27000
Salaries paid by H.O 5400
Rent & rates 11200
Admin expenses 12100
Profit

Dr Debtors account
Cr
Opening debtors 14200 Discount allowed 2000
Credit sales 220,000 Goods returned 18000
Bad debts 300
Closing balance 19400
Cash received 194500
Dr Cash account
Cr

Opening balance 7100 Closing balance 3700
Cash sales 174000 Salaries paid 8000
Collection from 194500 Remittance 363900
debtors
Q.no 3. In the book of head office

Dr Branch account
Cr
Opening balances Cash sales 50,500
Stock 20000 Goods returned 2000
Cash 16900 Cash received from
Debtors 4300 customers 20600
Goods sent 61000 By branch 300
By head office
Closing balances 21000
Stock 9700
Branch profit 7900 Cash 5200
Debtors 800
Shortage of cash
Dr Debtors account
Cr
Opening debtors 4300 Discount allowed 200
Credit sales 22000 Cash received 20900
Dr Cash account
Cr

Opening balance 18900 Various exp 6400
Closing balances 9700
Shortage 800
Q.no.4. In the book of head office

Dr Branch account
Cr
Goods sent 75000 Cash sales 50,000
Salaries 15000 Petty cash 500
Office expenses 12000 Cash received from 55,000
Cash remittance to 6000 debtors 5000
branch 29500 Closing debtors 27000
Branch profit Closing stock
Dr Debtor account
Cr
Credit sale 60,000 Closing balance 5000
Cash received 55000
Total 60,000 Total 60,000
Q. no.5 In the book of head office

Dr Branch account
Cr
Petty cash 800 Cash sales of plant 800
Plant 10000 Closing stock 7000
Goods sent 50000 Petty cash (closing) 100
Exp paid 5000 Plant (closing) w-1 7200
Branch profit 11300
W-1
Plantcurrent book value. 900 sold for 800
Original value 900 + depreciation 20 % for 6 months already charged = 10 %
So 900 x 100/90= 1000
Recent book value of plant= 10,000-1000 (9000x20/100)
= 9000 1800
= 7200
Q.no. 6 in the book of head office
Dr Branch account
Cr
Opening balances Cash sales 150000
Stock 50000 Cash received from 512500
Debtors 70000 debtors
Petty cash 250 Closing balances. 75000
Goods sent (w-1 ) 575000 Stock 95000
Salaries 30000 Debtors 120
Rent 12000 Petty cash
Petty exp paid 8000
Branch profit 87370
Dr debtors account
Cr
Opening debtors 70000 Closing balance 95000
Credit sales (w-2) 537500 Cash received 512500

W-1 calculation of goods sent w-2 invoice price and credit sale
C.G.S.S. 550000 C.G.S.S 550000
Add closing stock. 75000 invoice price. ?
625000 profit 25%
Less opening stock. (50000) 550000x125/100

Cost of goods sent to branch. 575000 invoice. 687500
Credit sale= invoice price cash sales
687500 150000
537500
Debtor system (invoice price method)
Q.no.9
Dr Branch account
Cr
Opening balances Cash sales 35000
Stock 12000 Collected from 52000
Cash 200 debtors
Debtors 30000 Closing balances 20000
Cheque paid by H.O 300 Stock 27000
Salaries 11000 Debtors 200
Rent 4000 Cash
Goods sent 80000 Loadings 2400
Loading of closing 4000 Opening stock 16000
stock 11100 Goods sent
Branch profit
Dr Debtor account Cr
Opening balance 30,000 Goods returned 3000
Credit sales 52000 Closing balance 27000
Collection 52000

Loadings
Opening stock Closing stock Goods sent
12000 x 25/125 20,000 x 25/125 80,000 x 25/125
2400 4000 16000
Q. no.10 In the book of head office

Dr Branch account Cr
Opening balances. Cash sales 18700
Stock 8000 Cash received 29500
Debtors 52000 Goods returned 800
Goods sent 40000 Closing stock 6000
Rent & rates 60 Debtors 4200
Wages and salaries 1200 Loadings of opening 1600
Sundry exp 300 stock 7840
Loading of closing 1200 Loading of goods
stock 12680 sent
Branch profit
Dr Debtors account Cr
Opening balance 5200 Discount 300
Credit sales 30000 Bad debts 500
Goods returned 700
Cash received 29500
Loadings
8000 x 25/125 6000 x 25/125 40,000-(800) x
1600 1200 25/125

39200 x 25/125
7840
Q.no.11
Dr Branch account (madras)Cr
Opening debtors 34500 Cash sales 78600
Goods sent 150000 Cash received from 151400
Salaries 16000 debtors 30000
General exp 2600 Loading of goods 45000
Advertisement exp 7500 sent
Rent and rates 3200 Closing stock
Loading of closing 9000
stock 82200
Branch profit.
Dr debtors account Cr
Opening balance 34500 Bad debts 6000
Credit sales 125200 Sale return 2300
Cash received 151400
Loadings
45000 x 25/125 150000 x 25/125
9000 30,000


Dr Branch account(Nagpur) Cr
Opening debtors 23000 Cash sales 82200
Goods sent 125000 Cash received from 132400
Salaries 18000 debtors 25000
General exp 1500 Loading of goods 35000
Advertisement exp 5200 sent
Rent and rates 4500 Closing stock
Loading of closing 7000
stock 92800
Branch profit.
Dr debtors account Cr
Opening balance 23600 Sale return 1200
Credit sales 110,000 Cash received 132400
Loadings
35000 x 25/125 125000 x 25/125
7000 25,000
Q. No. 12
Debtors 30000 Collection from 2210000
Petty cash 300 debtors 3000
Goods sent 300000 Loading of opening 50000
Salaries 9000 stock
Rent & rates 1500 Loading of goods 30000
Cash sent 1100 sent 48000
Loading of closing 5000 200
stock 36300 Closing stock
Branch profit Closing debtors
Closing cash
Opening balance 30000 Collection 210000

Credit sales 228000 Closing debtors 48000

W-1
Loadings
18000x20/120 30000 x 20/120 300000 x 20/120
3000 5000 50000
Q.13 In the book of head office

Opening cash 500 Cash sales 70000
Furniture 10,000 Collection from A/R 16000
Goods sent 100,000 Less petty exp (600) 15400
Rent 1000 Loading of goods sent 25000
Salaries 2000 Closing debtors 7800
Other exp 1000 Closing stock 24800
Insurance 600 Closing cash 500
Less prepaid (300) 300 Furniture10000 - (10000
Loading of closing stock 6200 x10/100x1/2) 9500
Branch profit 32000
Dr Debtoraccount Cr
Credit sales 25000 Received from 16000
debtors 300

Discount allowed 100
Bad debts 800
Sale return 7800
Balance
Loadings
24800 x 100000 x
33.33/133.33 33.33/133.33
6200 25000
Closing stock 18000 x 133.33/100= 24000

Add return in 800
24800
Stock and debtor system
Q.no. 14 In the book of head office

Opening stock 30000 Goods return 2000
Goods sent 138000 Cash sales 64000
Credit sales 72800
Closing stock 29200
Goods sent account Dr

Cr
Goods return 2000 Goods sent to branch 138000
Branch a/c 27200
Goods sold 108800

Dr branch adjustment account Cr
Loading of closing 5840 Loading of opening 6000
stock stock 27200
27360 Loading of goods
Gross profit sent
Total Total
Opening debtors 24000 Bad debts 700
Credit sales 72800 Discount allowed 500
Closing debtors 95600
Dr Profit and loss account Cr

Branch exp 14500 Gross profit 27360
Bad debts 700
Net profit 11660
Loadings
30000 x25/125 29200 x 25/125 138000-2000 x
6000 5840 25/125
27200
Q.no. 15 In the book of head office

Dr Branch stock account Cr
Goods sent 500 Credit sales 19000
Received from 24700 Closing stock 8000
debtors Abnormal loss 700
Opening debtors 2000 Bad debt 1000
Closing debtors 2500

stock 175 stock 6175
Abnormal loss 7750 Loading of goods
(loading) sent
Gross profit

salaries 5000 Gross profit 7750
Bad debts 1000
Net profit 1750
Loadings
Opening stock Closing stock Goods sent Abnormal loss
15000 x 8000 x33.33/133.33 24700 x 700 x33.33/133.33
33.33/133.33 2000 33.33/133.33 175
3750 6175
Q.no. 16
Goods sent 30,000 Normal loss 400
Abnormal loos 1600
Closing stock 6000
Goods sent account

Dr Cr
Closing stock 6000 Goods sent to branch 30000
Goods sold 24000

stock 80 stock 6000
Lading of normal loss 320 Loading of goods
Loading of abnormal sent
loss 6000
Gross profit

Normal loss 320 Gross profit 6000
Net profit 5680
Loadings
Opening stock Closing stock Goods sent Normal loss Abnormal loss
8000 x25/125 6000 x 25/125 30000 x25/125 400 x25/125 1600 x 25/125
1600 1200 6000 80 320
Q .NO.17
Goods sent account 176000 Goods return 1200
Goods sold 24000
Closing stock 150,000
Shortage of stock 800
Dr Goods sentAccount Cr
Loading of goods 43700 Goods sent 176000
sent 1200
Goods return 131100
Balance
Dr Branch adjustment account Cr

Loading of closing 6000 Loading goods sent 43700
stock 200
Loading of shortage 37500
Gross profit
Dr Branch profit & loss account Cr

Shortage 600 Gross profit 37500
Net profit 36900
Working
Invoice price of Closing Goods sent Shortage
goods sent stock
132000 x 100/75 24000 x 25 / 174800x25/10 800 x 25/100
176000 less return 100 0 200
1200 43700
174800
Q.no 18
Goods sent 351000 Cash sales 125000
Return in by 5000 Credit sales 175000
customer Goods spoiled 500
Closing goods 55500
Dr Branch debtors account Cr

Credit sale 175000 Cash received 156000
Discount 4000
Return 5000
Closing debtors 10,000


Loading of closing 11100 Loading of goods 70200
stock 100 sent
Loading of spoilage 59000
Gross profit

Discount 4000 Gross profit & loss 59000
Wages 3000
Freight 11000
Other exp 6000
Spoilage 400
Net profit 34600
Working
Invoice price of Closing Goods sent Shortage
goods sent stock
289899 x 125/100 55500 x 351000x25/12 500 x 25/125
351000 25/125 5 100
11100 70200
Q.No.19
Dr Branch stockaccount Cr
Return 16080 Goods return 1680
Goodssent 180,000 Cash sale 100800
Credit sale 72000
Closing stock 21000
Dr goods sent to Branch account Cr

Return 1680 Goods sent 180,000
Loading of goods 59440
sent 118880
Balance
Total 180,000 Total 180,000
Dr Branch debtor account Cr

Opening balance 6608 Bad debt 596
Balance 7580

Closing stock loading 7000 Opening stock 5360
Loading of shortage 200 loading 59440
Gross profit 57600 Goods sent loading

Bad debt 596 Gross profit 57600
Discount 1808
Shortage 400
Net profit 54796
Working
Opening stock Closing Goods sent Shortage
stock
16080 x 1/3 21000 x 1/3 180000- 6000 x 1/3
5360 7000 1680 200
178320 x
1/3
59440
Q.No.20

Opening stock 6000 Cash sale 23000
Goods sent 66000 Credit sale 50,000
Surplus 10,000 Closing stock 8800

Loading of goods 24750 Goods sent 66000
sent 41250
Balance
Total 180,000 Total 180,000

Closing stock loading 3300 Opening stock 2250
Loading of shortage 75 loading 24750
Gross profit 33625 Goods sent loading 10,000
Surplus

Shortage 125
Net profit 24817
Note: cost is equal to 100 % and list price is = cost + 100% so the
List price is = 200 % and invoice price = list price 20 %
That is 200 (200 x 2/100)
200-40 = 160
So we can say that invoice price is 60 % above the cost
Working
Opening stock Closing Goods sent Shortage
stock
6000 x 60/160 8800 x 66000 x 200 x 60/160
2250 60/160 60/160 75
3300 24750
Credit
50000 x
40/200
10,000
Q.No.21
Goods sent 28000 Goods return 1000
Cash sale 18000
Credit sale 2000
Closing stock 6180
Authorized reduction 820

Return 1000 Goods sent 28000
Loading of goods 6750
sent 20250
Balance

Closing stock loading 1545 Goods sent loading 6750
Authorized reduction 820
Gross profit 4385

Net profit 3385
Working
Closing Goods sent
stock
6180 x 28000-1000
33.33/133. 27000x33.33/1
33 33.33
1545 6750
Q.No.22

Particulars C M Particulars C M
Opening stock 5500 7500 Return 500 425
Goods sent 30000 25500 Cash sale 18500 17125
Surplus 1375 550 Credit sale 13000 9250
Closing stock 4875 6750
Total 36875 33550 Total 36875 33550

Return 500 425 Branch stock a/c 30000 25500
Loading 5900 5015
Balance 23600 20060
Total 30000 25500 Total 30000 25500

Loading of closing 975 1350 Loading of opening 1100 1500
stock stock 5900 5015
7400 5715 Loading of goods 1375 550
sent
Gross profit Surplus
Total 8375 7065 Total 8375 7065
Working
Opening stock Closing stock Goods sent Surplus
C. 5500 x 25 /125 = C. 4875 x 25/125 = C. 30000-500 x 25/125= C. 1375 x
1100 975 5900 25/125=275
M . 7500 x 25 /125 = M. 6750 x 25/125 = M. 25500-425 x 25/125 M. 550 x
1500 1350 =5015 25/125=110
Final account system
Q.No.30

Bad debt 500
Balance 500

Goods sent 96000 Cash received 41000
Branch exp 5700 Loading of opening 6000

Loading of closing 5000 stock 19200
stock Loading of goods 25000
9000 sent 500
Branch profit Closing stock
Closing debtors
Dr Memorandum profit & loss account Cr

Goods sent 76800 Credit sale 43000
Closing stock 20000
Gross profit 16200
Discount 1000 Gross profit 16200
Bad debt 500
Expenses 5700
Net profit 9000
Working (loading)
30000 x 25 /125 = 6000 25000 x 25 /125 = 5000 96000 x 25 /125 = 19200
Working (cost price)

30000 6000 = 24000 25000 5000 = 20,000 96000 19200 = 76800
Q.No.31

Bad debt 2000
Balance 2000

Goods sent 380,000 Cash received 164000
Branch exp 22800 Loading of goods 76000
sent 80000
Closing stock 2000
Branch profit 39200 Closing debtors

Closing stock 80000
Gross profit 68000
Bad debt 2000
Expenses 22800
Net profit 39200
Q.No.32

Opening debtors 6440 Cash received 42660
Credit sales 51280 Discount allowed 1120
Bad debt 650
Balance 13290

Opening stock 48660 Goods return 1560
Goods sent 123000 Cash sale 64150
Branch exp 17290 Cash received 42660

stock 6440 stock 40480
Opening debtors 18570 Loading of goods 53400
Branch profit sent 13290
Closing stock
Closing debtors

Closing stock 35600
Gross profit 37630
Bad debt 650
Expenses 17290
Net profit 18570
Working (loading)
48660 x 50/150 = 16220 53400 x 50/150 = 17800 123000-1560 x 50 /150 =
40480

48660 16220 = 32440 53400 - 17800 = 35600 121440 40480 = 80960
Q.No.33
Dr Branch trading account Cr

Opening stock 30800 Sales 400000
Goods sent 300000 Closing stock 10800
Profit 80000
C.80000x 9/20 = 36000
T. 80000 x 6/20 = 24000
B. 80000 x 5/20 = 20000
Working -1 cost and invoice price of goods sent

Goods sent?

Opening balance=54000
Add purchases = 274000
Total 328000
Less ending (28000)
Cost of goods sent300000
Invoice price=?
Sales = 400000
Add closing stock at invoice 13500
Total 413500
Less opening stock at invoice (38500)
Invoice price of goods sent375000
Ratio of invoice. 375000/30000x100 = 125 %
Cost = 100% profit 25%
Invoice = 125%

Opening stock Closing stock
38500 x 100/125 = 30800 13500 x 100/125 = 10800
Departmental account
Q.No.1
Dr Departmental account Cr
Descriptio Electrical Furniture Leisure Descriptio Electrical Furniture Leisure
n goods n goods
Opening stock 6080 17298 14370 Sales 29840 73060 39581
Purchases 18195 54632 27388 Closing
stock 7920 16150 22395

G. profit
13485 17280 20218
Total 37760 89210 61976 Total 37760 89210 61976

Financial Accounting M Com I

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Prepared by M com I JDCC 2015

Prepared by M.com I Jinnah

Issue of Right and Bonus shares

Supervised by TAHIR HUSSAIN +923449545245

V = value of right share

M (Market value) = 350

M = 20, S = 15 (10 + 5), N = 10/2

2 Bonus to shareholder a/c 600000

2 Bonus to shareholder a/c 600000

Supervised by TAHIR HUSSAIN +923449545245

2 Bonus to shareholder a/c 150000

Supervised by TAHIR HUSSAIN +923449545245

2 Profit & loss 449126

Calculation of bonus to be declared.

Supervised by TAHIR HUSSAIN +923449545245

Redemption of preference shares (Mukhar G. Volume I Chapter # 36)

Supervised by TAHIR HUSSAIN +923449545245

Supervised by TAHIR HUSSAIN +923449545245

Total 1622000 Total 1622000

Supervised by TAHIR HUSSAIN +923449545245

W-4 w-5 w-6

Supervised by TAHIR HUSSAIN +923449545245

Supervised by TAHIR HUSSAIN +923449545245

W-4 W-5 Dr Bank Account Cr

Total 59000 Total 59000

Issue and redemption of debenture

Q.no 1 journal enrties

QNo.2 journal enrties

2. when debentures are issued at 10% discount

Supervised by TAHIR HUSSAIN +923449545245

3- When debentures are issued at 10% premium

Supervised by TAHIR HUSSAIN +923449545245

Q.No.6 Debenture redemption fund investment account

Supervised by TAHIR HUSSAIN +923449545245

Journal entries (cum interest)

Supervised by TAHIR HUSSAIN +923449545245

Supervised by TAHIR HUSSAIN +923449545245

Supervised by TAHIR HUSSAIN +923449545245

Q. no 11 Debenture redemption fund account

Total 1352580 Total 1352580

Total 1551009 Total 1551009

Debenture redemption fund investment account

Supervised by TAHIR HUSSAIN +923449545245

Total 1352580 Total 1352580

Q. No 125% debenture account

Total 800000 Total 800000

Sinking fund account

Date Particulars Amount Date Particulars Amount

Total 100000 Total 100000

Supervised by TAHIR HUSSAIN +923449545245

Total 24800 Total 24800

Q.No.13 Journal entries

Supervised by TAHIR HUSSAIN +923449545245

31-12-93 Bank 3905

Supervised by TAHIR HUSSAIN +923449545245

Supervised by TAHIR HUSSAIN +923449545245

Underwriting of shares and debenture

Supervised by TAHIR HUSSAIN +923449545245

Zeta: 150,000 x 20 / 100 = 30,000

Q. 5Statement showing liabilities of underwriters

Supervised by TAHIR HUSSAIN +923449545245

Q. 7 Statement showing liabilities of underwriters

Supervised by TAHIR HUSSAIN +923449545245