Question 7 and 8 â ‹Q7 On 1st April 2016, an existing firm had assets of Rs - Accountancy - Issue and Redemption of Debentures

Question

Question 7 and 8

â€‹Q7 On 1st April 2016, an existing
firm had assets of Rs 10,00,000 including cash of Rs 20,000 Its
creditors amounted to Rs 50,000 on that date The partner 's capital
accounts showed a balance of Rs 8,00,000 while the reserve fund
amounted to Rs 1,50,000 If the normal rate of return is 15% and the
goodwill of the firm is valued at Rs 1,80,000 at 3 year's purchase
of super profit, find the average profit of the firm

Q8 Samsung Ltd issued Rs 20,00,000, 9% Debentures at a discount of
4% on April , 2015 redeemable at premium of 2% as under :
Rs 6,00,000 Debentures on March 31, 2018
Rs 8,00,000 Debentures on March 31, 2019
Rs 6,00,000 Debentures on March 31, 20120
Compute the amount of discount to be written off in each year till
debentures are paid Also prepare loss on issue of debentures
account for first two years

Neha Arora · Accepted Answer

Dear Student, The answer to Q 7 is as follows

Super space Profit equals fraction numerator Goodwill over denominator Number space of space Years apostrophe space Purchase end fraction equals fraction numerator 1 comma 80 comma 000 over denominator 3 end fraction equals Rs space 60 comma 000 Normal space Profit equals Capital space Employed cross times fraction numerator Normal space Rate space of space Return over denominator 100 end fraction Capital space Employed equals Total space Assets minus External space Liabilites space space space space space space space space space space space space space space space space space space space space space space space space space space space space space space space equals 10 comma 00 comma 000 minus 50 comma 000 equals Rs space 9 comma 50 comma 000 Normal space Profit equals 9 comma 50 comma 000 cross times 15 over 100 equals Rs space 1 comma 42 comma 500 Average space Profit equals Super space Profit plus Normal space Profit space space space space space space space space space space space space space space space space space space space space space space space space space equals 60 comma 000 plus 1 comma 42 comma 500 equals Rs space 2 comma 02 comma 500

The answer to Q 8 is as follows

Total space Discount equals 20 comma 00 comma 000 cross times 6 percent sign equals Rs space 1 comma 20 comma 000 Discount space to space be space written minus off space left parenthesis 2017 minus 18 right parenthesis equals fraction numerator 6 comma 00 comma 000 over denominator 20 comma 00 comma 000 end fraction cross times 1 comma 20 comma 000 equals Rs space 36 comma 000 Discount space to space be space written minus off space left parenthesis 2018 minus 19 right parenthesis equals fraction numerator 8 comma 00 comma 000 over denominator 20 comma 00 comma 000 end fraction cross times 1 comma 20 comma 000 equals Rs space 48 comma 000 Discount space to space be space written minus off space left parenthesis 2019 minus 20 right parenthesis equals fraction numerator 6 comma 00 comma 000 over denominator 20 comma 00 comma 000 end fraction cross times 1 comma 20 comma 000 equals Rs space 36 comma 000

Loss on Issue of Debentures Account Dr Cr Date Particulars J F Amount Rs Date Particulars J F Amount Rs 2015-16 2015-16 Apr 01 9% Debentures A/c 1,20,000 Mar 31 Balance c/d 1,20,000 1,20,000 1,20,000 2016-17 2016-17 Apr 01 Balance b/d 1,20,000 Mar 31 Balance c/d 1,20,000 1,20,000 1,20,000

Loss on Issue of Debentures Account
Dr.				Cr.
Date	Particulars	J.F.	Amount Rs		Date	Particulars	J.F.	Amount Rs
2015-16					2015-16
Apr. 01	9% Debentures A/c		1,20,000		Mar. 31	Balance c/d		1,20,000

			1,20,000					1,20,000

2016-17					2016-17
Apr. 01	Balance b/d		1,20,000		Mar. 31	Balance c/d		1,20,000

			1,20,000					1,20,000