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The debt-to-equity ratio is a measure of a firm's ___

Is interest on capital provided in full during insufficiency of profits?

Panwar commenced business on 1st January 2016 with a capital of Rs. 10,000, which he paid into a bank account opened for the purpose.
On the same date, he brought furniture which cost Rs. 2,000 and made purchases of goods worth Rs. 6,500.
He kept his books on single entry system.
On 31st December 2016 stock was valued at Rs. 8,300. There were book debts amounting to Rs. 3,400 of which Rs. 200 represented debts which were irrecoverable.
Creditors amounted to Rs. 3,600 and bank passbook showed a balance of Rs. 1,450.
Panwar withdrew three times from business for his private expenses, each time he withdrew Rs. 600 and in addition, he used Rs. 500 worth of goods from his shop.
He took Rs. 1,000 as a loan from his wife during the year.
He gave Rs. 200 to his son from business, which he omitted to enter.

You are required to prepare a statement showing profit or loss in the business for the year ending 31st December 2016 from the above information.

The money we get from public by issuing shares at par is reflected in _______

Following is the Statement of Profit & Loss of X L Limited for the year ended March 31, 2017 :

STATEMENT OF PROFIT & LOSS

for the year ended March 31, 2017

$\begin{array}{cccc}\text{Particulars}& \text{Note to}& 2015-16& 2016-17\\ & \text{Accounts}& \text{Amount (Rs.)}& \text{Amount (Rs.)}\\ \text{Revenue from Operations}& & 50,00,000& 80,00,000\\ \text{Expenses:}& & & \\ \text{(a) Employee Benefit Expenses}:10\%\text{of}& & & \\ \text{Revenue from Operations}& & & \\ \text{(b) Other expenses:}& & 10,00,000& 12,00,000\\ & & & \end{array}$

Tax Rate at 40%.

Prepare Comparative Statement of Profit & Loss of X L Limited.

Do you advise that assets and liabilities must be revalued at the time of admission of a partner? If so, why? Also, describe how is this treated in the book of account?

Alfa and Beta were partners in a firm. They were trading in artificial limbs. On 1st April, 2013 they admitted Gama, a good friend of Beta into the partnership. Gama lost his one hand in an accident and Alfa and Beta decided to give one artificial hand free of cost to Gama. The Balance Sheet of Alfa and Beta as at 31st March, 2013 was as follows:

BALANCE SHEET OF ALFA AND BETA as at 31st March, 2013

$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Rs}& \text{Assets}& \text{Rs}\\ \text{Provision for Doubtful Debts}& 40,000& \text{Cash}& 1,00,000\\ \text{Workmen's Compensation}& & \text{Sundry Debtors}& 8,00,000\\ \text{Reserve}& 56,000& \text{Stock}& 2,00,000\\ \text{Outstanding Expenses}& 30,000& \text{Machinery}& 3,86,000\\ \text{Creditors}& 3,00,000& \text{Profit and Loss A/c}& 40,000\\ \text{Capitals:}& & & \\ \text{Alfa}5,00,000& & & \\ \text{Beta}\underset{–}{6,00,000}& 11,00,000& & \\ & \underset{–}{\overline{15,26,000}}& & \underset{–}{\overline{15,26,000}}\end{array}$

Gama was admitted in the firm on the following terms:

(i) Gama will bring in Rs 4,00,000 as his share of capital, but he was unable to bring any amount for goodwill.

(ii) The new profit sharing ratio between Alfa, Beta and Gama will be 3:2:1.

(iii) Claim on account of workmen compensation was Rs 30,000.

(iv) To write off bad debts amounting to Rs 40,000.

(v) A liability of Rs 20,000 included in creditors is not likely to arise.

(vi) Outstanding expenses be brought down to Rs 12,000.

(vii) Rs 20,000 be provided for an unforeseen liability.

(viii) Goodwill of the firm was valued at Rs 1,80,000.

Prepare Revaluation Account, Capital Accounts of Partners and the opening Balance Sheet of the new firm. Also identify any one value which the partners wanted to communicate to the society.

Amount of Calls in Advance is _____________.

A corporation's working capital is calculated using which amounts?

'The overall financial health of a business is determined by the quality of its financial management'. In light of the above statement, discuss some of the aspects which affect the financial health of a business.

Example of cash flow from financing activity is :

Manish is engaged in the business of garments manufacturing. Generally, he used to sell his garments in Delhi. Identify the working capital requirements of Manish. Further, Manish wants to expand and diversify into warehousing business. Explain any two factors that will affect his fixed capital requirements.

Explain what you understand by physical capital.

Subscription received by an organisation is a ____________.

A and B were partners in a firm sharing profits and losses in the ratio of 3 : 1. Their fixed capitals on 31st March 2018 were as follows Rs 80,000 and Rs 75,000 respectively. Profits of the firm worth Rs 50,000 were distributed equally. It was discovered on 10th April, 2018 that the under mentioned transactions were not passed through the books of account.

(i) Interest on capital 10$\%$ p.a.

(ii) Salary to each partner Rs 500 p.m.

(iii) Commission to a manager 10$\%$ p.a.

It was decided to pass single adjustment entry rather than to alter the books.

OR

Ram and Shyam were partners in a firm sharing profits and losses in the ratio of 4 : 1. Their Balance Sheet was as follows :

BALANCE SHEET

as on 31st March, 2018

$\begin{array}{cccc}\text{Liabilities}& \text{Amount}& \text{Assets}& \text{Amount}\\ & \left(\text{Rs}\right)& & \left(\text{Rs}\right)\\ \text{Outstanding Salary}& 5,000& \text{Cash in Hand}& 3,000\\ \text{Trade Payables}& 54,000& \text{Trade Receivables}& 40,000\\ \text{Workmen Compensation Reserve}& 25,000& \text{Patents}& 15,000\\ \text{Contingency Reserve}& 15,000& \text{Land and Building}& 2,00,000\\ \text{Capital Account}:& & \text{Plant and Machinery}& 80,000\\ \text{Ram}& 1,20,000& & \\ \text{Shyam}& 80,000& & \\ \text{Profit and Loss}& 39,000& & \\ \text{Total}& 3,38,000& \text{Total}& 3,38,000\end{array}$

They decided to admit Gopal into the business from 1st April, 2018 for $\frac{1}{4}$th share in the profits (which he acquired wholly from Ram.) On that date their assets and liabilities are revalued.

(i) Patents were found valueless.

(ii) Claim on account of Workmen Compensation is Rs 30,000.

(iii) Plant and Machinery Rs 1,00,000.

(iv) Creditors worth Rs 4,000 were not recorded.

(v) Outstanding Salary is increased to Rs 8,000.

(vi) Investment worth Rs 1,500 was not recorded at all.

(vii) Gopal is to bring proportionate capital, he will also bring his share of goodwill in cash. Goodwill of the firm is valued at Rs 1,20,000.

Prepare Revaluation Account, Capital Account and Balance Sheet on newly constituted firm.

For _________________, we show purchases and changes in inventory separately.

Depreciation expense is reported for a not-for-profit organization's equipment and furniture.

A, B and C are in partnership. On 1st April, 2015 their capitals were : A Rs 5,00,000 (Credit), B Rs 3,00,000 (Credit) and C Rs 40,000 (Debit). As per partnership deed Interest on Capital is to be allowed at 6% p.a. and Interest on drawings is to be charged at 8% p.a.

You find that :

(i) On 1st July 2015, A withdrew Rs 1,00,000 against capital;

(ii) B withdrew Rs 5,000 p.m. during the year.

(iii) C withdrew Rs 60,000 during the year.

The profit for the year ended 31st March, 2016 amounted to Rs 3,84,000.

You are required to prepare journal entries for the above transactions and also prepare partner's capital accounts.

Which of the following is the difference between public and private finance?

Balance in securities premium account _______.

___ is good name for the reputation of the business, which is earned by a firm through the hardwork and honesty of its owners.

Which of the following is false regarding the Statement of Profit and Loss?

Cash proceeds from issue of debentures, loans, bonds and other short/ long-term borrowings will result in cash ___ from financing activities.

From the following extract of the statement of Profit and Loss for the year ended 31st March, 2012 and 2013 of XYZ Ltd, prepare comparative statement of profit and loss.

$$\begin{array}{ccc}\text{Particulars}& \text{31-03-2013}& \text{31-03-2012}\\ & \text{(Rs)}& \text{(Rs)}\\ \text{Revenue from operations}& 48,00,000& 30,00,000\\ \text{Employees Benefit Exp.}& 22,00,000& 18,00,000\\ \text{Other Exep}& 21,00,000& 4,00,000\\ \text{Tax Rate}& 40\%& 40\%\end{array}$$

When amount to be paid to debentureholders is more than their face value/nominal value, they are said to be redeemed at ___

Which account is to be debited while setting aside profits as a reserve?

Cash proceeds from issue of shares will result in cash _________ from financing activities.

What is meant by sacrificing ratio?

The concept of _______________ means that transactions are recorded as and when they occur irrespective of whether money has been received or not.

State two elements of the partnership deed.

Journalise the following transactions regarding realisation expenses

(a) Realisation expenses amounted to Rs. 2,500.

(b) Realisation expenses amounted to Rs. 3,000 were paid by Ashok, one of the partners.

(c) Realisation expenses Rs. 2,300 borne by Tarun, personally.

(d) Amit, a partner was appointed to realize the assets, at a cost of Rs. 4,000.

The actual amount of realisation amounted to Rs. 3,000.

A, B, and C are partners in a firm sharing profits in the ratio of 3:2:1. B retires. The goodwill of the firm is valued at Rs. 60,000 and the remaining partners A and C continue to share profits in the ratio of 3:1. By what amounts will the capital accounts of A and C be debited if it has been decided that the goodwill shall not be shown in books?

Interest payable on debentures is :

Furniture of 1,80,000 was realised at 1,00,000 rupees. The journal entry is-

$$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amt. (Rs.)}& \text{Assets}& \text{Amt. (Rs.)}\\ \text{General Reserve}& 80,000& \text{Preliminary Expensses}& 20,000\\ \text{Profit and Loss}& 1,20,000& \text{Cash}& 1,00,000\\ \text{Loan}15\%& 2,40,000& \text{Stock}& 80,000\\ \text{Bills Payable}& 20,000& \text{Bills Receivable}& 40,000\\ \text{Creditors}& 80,000& \text{Debtors}& 1,40,000\\ \text{Share Capital}& \underset{–}{2,00,000}& \text{Fixed Assets}& \underset{–}{3,60,000}\\ & \underset{–}{7,40,000}& & \underset{–}{7,40,000}\end{array}$$

Where all the partners except one decide to retire from the firm, it is known as __________

L, M and N entered into partnership on 1st July 2012 sharing in the ratio of 4 : 3 : 3. Their capitals were Rs. 60,000; Rs. 40,000 and Rs. 30,000 respectively. They decided to dissolve on 30th June 2013, on which date their position was:

Bank Rs. 7,000; Debtors Rs. 40,000; B/R Rs. 5,500; Stock Rs. 43,000; Furniture Rs. 2,500; Creditors Rs. 15,000 and B/P Rs. 5,000.

L took over Debtors at 25% discount and took over the liabilities of the payment to creditors.
M took over stock at Rs 13,000.
N takes B/R at Rs. 5,000 and furniture at 12% depreciation.
B/P were due after 2 months; As such, a rebate of 18% p.a. was received on their payment.
10% p.a. interest to be credited to each partner on his capital. Prepare necessary accounts.

When shareholders make default in the payment of allotment money or call money due from them, it is termed as__________

While calculating goodwill by average profits method, any abnormal income of a year should be ___out of the net profit of that year.

Which of the following would not be considered a cash flow from “operating” activities for a non-financial company?

Om, Jai and Jagdish are partners sharing profit in the ratio of 3 : 2 : 1. Jai retires & total amount due to him is Rs 1,00,000. Assuming that he is paid 40% of the amount due immediately and the balance in three equal yearly installments. The interest payable is 12% p.a. What shall be the value of 1st installment?

A business has earned average profits of Rs 1,00,000 during the last few years and the normal rate of return in a similar type of business is 10%. Ascertain the value of goodwill by capitalization of average profit method. Given that the value of net asset of the business is Rs 8,20,000.

A & B are partners. The net divisible profit as per profit & loss appropriation account is Rs 2,50,000. The total interest on partners drawings is Rs 4,000. A's salary is Rs 4,000 per quarter & B`s salary is Rs 40,000 per annum. Calculate the net profit/ loss for the year.

X, Y and Z commenced business on 1st April, 2013 with capitals of Rs. 1,00,000, Rs. 80,000 and Rs. 60,000 respectively. Profit & losses were shared in the ratio of 4 : 3 : 3 respectively. Capitals carried interest at 5% p.a.

During the years ended 31st March 2014 and 2015, they made profits of Rs. 40,000 and Rs. 50,000 before allowing interest on capitals. Drawings of each partner were Rs. 10,000 per year.

On 31st March, 2015 the firm was dissolved. Creditors on that date were Rs. 24,000. The assets realised a net amount of Rs. 2,60,000.

Prepare capital accounts of partners for two years till the books are finally closed and the realisation account.

What distinguishes partnership from the sole proprietorship?

What is the full form of NPA?

A and B share profits and losses in the ratio of 3/5 and 2/5 respectively and having capital account balances of Rs 1,00,000 each. At the time of revaluation, the firm’s total book value of assets was Rs 60,000 while they can only be sold for Rs 40,000. Which of the following is the balance of A’s capital account after revaluation of firm’s assets?

X and Y are partners sharing profits and losses in the ratio 4:1. Z was the manager who received the salary of 8,000 p.m. in addition to a commission of 5% on net profits after charging such commission. Profits for the year is 13,56,000 before charging salary. Find the total remuneration of Z

It’s one of the purest measures of cash sources and uses.