Capital: It refers to the amount invested by the owner in a business. Pass necessary journal entries for the above transactions in the books of the company. 20,000 = Rs. Question 14: When liabilities are listed in order of liquidity in a Balance Sheet, which should be listed first Capital or Creditors? Pass necessary journal entries in the books of Nikhil Ltd for the above transactions. 10 each. 3,30,000 Rs. State the three fundamental steps in the accounting process. With the help of an example, briefly explain the alternatives available for allotment of shares in case of over subscription. Pass necessary journal entries for the above transactions in the books of Jeevan Dhara Ltd. (Delhi 2015) NCERT Solutions for Class 11 Indian Economic Development during different intervals of time in terms of cash and cash equivalents. 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. K Ltd took over the assets of 16,00,000 and liabilities of 5,00,000 of P Ltd for a purchase consideration of 13,68,500. There was a gain of Rs. Operating activities generally reflect cash generated and/or paid as a result of the firms core business functions. WebJudicial Watch, Inc. is a conservative, non-partisan educational foundation, which promotes transparency, accountability and integrity in government, politics and the law. Why is the evidence provided by source documents important to accounting? : The main purpose of this branch is to present the accounting information in such a way as to assist the management in planning and controlling the operations of business. 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. WebFormal theory. Loss= Expenses-Revenue. (Delhi 2019) On application 3 per share (including premium 1 per share) On first call share 4 per share Difference between issued capital and subscribed share capital is What is meant by over subscription? Balance of the applications were rejected. The profit and loss account of Roy Limited is given here under, Question 2. Accountancy is one of the core subjects in the commerce curriculum. WebMoney is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. State the three fundamental steps in the accounting process. Joy Ltd issued 1,00,000 equity shares of 10 each. 6. Applicants for 2,00,000 shares were alloted 1,00,000 shares. 2,80,000 + Rs. 1. Excess application money was adjusted on the sums due on calls. (b) Amount utilised at the time of re-issue = ? DK Goel Solutions Class 11 Chapter 21 solutions are free and will help you to prepare for Class 11 Accountancy. On final call: 8 per share (including 5 premium) 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 For example, payment to the creditors results in a decrease in the creditors (liability); so, the creditors account will be debited. Cash Flows ABC Ltd received application money on its issued share capital, which account is debited while recording this transaction? (All India 2014) This are the properties that are likely to be realized in one year or over the usual operational cycle time. Later on, these shares were re-issued for 4,000 as fully paid-up. Sahaj, who had applied for 2,500 shares failed to pay the first call money. (All India 2014) 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. (Delhi 2017; All India 2019) A Ltd invited applications for issuing 1,00,000 shares of 10 each at a premium of 1 per share. 15,000 during the year. Applications for 45,000 shares were received and shares were allotted to all the applicants, Pooja, to whom 500 shares were allotted, paid her entire share money at the time of allotment, whereas Kundan did not pay the first and final call on his 300 shares. Show the effect of the following transaction on the accounting equation: Answer: Question 48. 16,000; Carriage Inwards Rs. 3,75,000, Computation of Net Purchases:-Net Purchases = Purchases Purchases ReturnNet Purchases = Rs. Amount not received on securities premium = 8,000 50,000 on assets sold which was credited to profit and loss account. Are debits or credits listed first in journal entries? Cash Flows Cash flows are inflows and outflows of cash and cash equivalent. To Rent A/c Applications for 95,000 shares were received and shares were allotted to all the applicants. This site is owned and operated by Big Blue Interactive, LLC. The main difference in direct and indirect method is to calculate the cash flow from operating activities. For journal entry relating to purchases of business, solve as Q no. Accuracy. His shares were forfeited. (i) Direct Method :In the direct method format, each line of the operating activities section represents a sum of all cheques or deposits in a particular category, e.g., the operating activities section would include such items as cash received from customers; cash paid to suppliers; cash paid for interest; cash paid for wages; cash paid for research and development; cash paid for selling, general, and administrative costs; and any other relevant summary lines. Describe Direct and Indirect method of ascertaining cash flow from operating activities. What is meant by paid-up capital? The empty string is the special case where the sequence has length zero, so there are no symbols in the string. (Delhi 2014 Modified) More Resources for CBSE Class 12 6,000 of these shares were issued to the vendor for building purchased. Normally, a company might show one line item for the capital investments and label that line item as additions to plant. 29 on page 314-316. Compute the cash flow from operating activities by the indirect approach. The re-issued shares included all the shares of Satyam. In this case, shares can be re-issued at a minimum price of 45 per share (i.e. (h) Paid Rs 4,000 for the months utilities. Under cash basis of accounting financial statements cannot be audited Amount transferred to share capital account (1,600 x 5) = 8,000 2,00,000. Also, these interesting concepts of accounting make it a very scoring subject. Source document in accounting is important because of the below given reasons. 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From the foltowing Particulars of Bharat Gas Limited, calculate cash flows from investing activities. Accounting is an umbrella term for all the financial transactions carried out in any business. Answer : (d) Bought furniture on credit Rs 7,000. It may be in the form of a cash memo, invoice or receipt. For example, sale of furniture results in decrease in furniture (asset); so, the sale of furniture will be credited. : It refers to those which fall due for payment in a relatively longer period. Bookkeeping is the beginning of accounting and forms the base for accounting. Rs. Reema, a shareholder belonging to Category II who was holding 3,000 shares failed to pay the first call and second call money. What are the benefits of accounting Class 11 Chapter 1? 5. On application 2 per share (iii) Excess applications partly rejected and partly adjusted towards further calls. All textbook questions are available online from where students can download a PDf file. Question 1. Calculation of Amount Credited in Share Forfeiture Account Step 7- After entering all the transactions for a particular period, balance the account by totalling both sides and write the difference in shorter side, as Balance c/d. Afterwards the first and final call was made. Pass necessary cash book and journal entries for the above transactions in the books of the companv. Q9. Answer: Cash flow arising from financing activities are exhibited as follows: Even though a business should ideally have a greater amount of assets than liabilities, liabilities are not always a disadvantage. (iii) A cash flow statement is also prepared to determine the liquidity position of the organisation. NCERT Solutions For Class 11 Financial Accounting Recording of Transactions-I Short Answer Type Questions Q1. 13,60,000 + Rs. On Application 2 per share (ii) Forfeited shares can re-issued at any rate of discount. More information about this is given in the Chapter 1 Revision Notes of Class 11 Accountancy. 9. Afterwards, first and final call was made and was duly received. Applications for 30% shares were rejected and money refunded. Answer: Question 46. Introduction to basic terms of Accounting (Capital, Drawings, Purchase Returns, Sales, Sales Returns, Creditors, Debtors, Stock, Income, Voucher, etc.). 32 comments. (a) Rs 1,000 due from Rohit are now bad debts. Apart from these subjects, optional subject are Answer: Question 58. 15,00,000; Sales Rs. Accrual basis of accounting is more accurate than the cash basis of accounting. Can securities premium reserve be used as working capital? Equity investments are normally excluded, unless they are in substance a cash equivalent (e.g. Thus, it means the amount of nominal (face) value called up by the company to be paid by the shareholders towards the share capital. Answer : Q20. Identifying: Identifying the business transactions from various sources is the first step of accounting.it involves observing all business activities and identifying those which are considered as financial transactions. 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. Pass necessary journal entries for the above transactions in the books of the company. Afterwards the final call was made. Tractors India Ltd is registered with an authorised capital of 10,00,000 divided into 1,00,000 equity shares of 10 each. (g) Provided services to a client and collected Rs 30,000 (m) Bobby withdrew Rs 20,000 from the business. On Allotment 4 per share (including premium 1) 6,00,000 Rs. Indentation is leaving a space before writing any word. Step 4- Enter the page number of the ledger in the Journal Folio (J.F.) Assets- These include all properties or legal rights owned by a firm for its operations, such as cash in hand, plant and machinery, bank, land, building, etc. Question 1. When does gain on forfeited shares arise and when is it transferred to capital reserve? Answer: Question 36. Amount due on first and final call for 1,600 shares of Kumar @ 10 each = 16,000 (8,000 + 8,000) After that the following entries were left incomplete by him. Web(See table A-11.) On application 3 per share Applications for 20% shares were rejected and the money refunded. Explain the major cash inflows and outflows from investing activities. B, who was allotted 3,000 shares, failed to pay the first and final call money. (i) Profit for the year 2010-11 is a sum of Rs. 8. 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. The journal entry is: Cash Discount: When discount is allowed to customers for making prompt payment.It is always recorded in books of accounts. Manu who had applied for 3,000 shares failed to pay the amount due on allotment and first and final call. 57,200 for the year ended 31st March, 2017. (i) To write off preliminary expenses of the company. 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. Trial balance. Web11 comments. Objectives of Cash Flow Statement NCERT Solutions for Class 6, 7, 8, 9, 10, 11 and 12, CBSE NotesCBSE Notes AccountancyNCERT Solutions Accountancy, 1. Step 6- Same steps are to be followed to post entries in the credit side of Mr As Account. Answer: Question 35. A shareholder Ram, who was allotted 2,000 shares, failed to pay the allotment money. The shares were fully subscribed and paid. To ascertain the financial position of business by means of financial statement i.e,Balance sheet. Account: It is a record of all business transactions relating to a particular person or item. Question 54. Important questions can help students to prepare for their final exams. This will increase the amount of the creditors, which in turn will increase the total liabilities of the business. WebA collateralized debt obligation (CDO) is a type of structured asset-backed security (ABS). Answer : The fundamental steps in the accounting process are diagrammatically presented below. If the liability increases, then it is credited and if the liability decreases, then it is debited. Auditing of Financial Statements. WebFor both Class 11 and 12 Commerce students, the five subjects that are mandatory are Accountancy, Business Studies, Economics, Mathematics/ Informatics Practices and English. (All India 2017) 10 on page 290 and 291. Most small businesses can use either method. Under subscription means that number of shares applied for is less than the number of shares issued. Private placement is the opposite of a public issue, in which securities are made available for sale in the open market. Go through these Class 12 Accountancy Chapter 6 Accounting for Share Capital Class 12 Important Questions and Answers Solutions & Previous Year Questions to All calls were made. They can have a clear understanding of the entire chapter from the important questions. The first section of cash flow statement, known as cash flow from operating activities, can be prepared by two methods known as direct method and indirect method. Cash A/c Dr. (d) None of these The journal entry is: 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. Why must two accounting information be compared? (i) Purchased furniture for 2,50,000 from M/s Furniture Mart. We, at Vedantu, aim to maintain the lucidity and easiness of our study material. Foltowing is the Balance Sheet of Computer India Ltd 1,40,000. Pass journal entries in the books of Sundram Ltd. (All India 2012) From the following information calculate net cash from operations, Question 1. Prepare a Trading and Profit and Loss Account for the year ended on 31-3-2016 and the Balance Sheet as at that date. Present the share capital in the balance sheet of the company as per Schedule III, Part I of the Companies Act, 2013. Communicating: Accounting also includes the communication of financial data like financial statements to the users who analyse them as per individual requirements. If company allots 50,000 shares to applicants of 75,000 shares, it is pro-rata allotment in proportion of 2 : 3. On application and allotment 10 (including 5 premium) Samyesh, holding 2,000 shares did not pay the final call. Explain the terms : Cash equivalents, Cash flows. 3,92,000 Rs. 8 on page 290. Bookkeeping is the recording of all information whereas accounting is the summary of financial information of a company. Shahid, who had applied for 2,000 shares out of the group applying for 2,00,000 shares failed to pay first and final call and his shares were also forfeited. If assets increase, they are debited and if assets decrease, they are credited. Question 25. 4,00,000 = Rs. Answer: Question 80. Excess money received with applications was adjusted towards sum due on allotment. Answer: (a) Acquired machinery for Rs. Assets is an umbrella term for all the things that a business owns, whereas liabilities refer to all the money or services that a business owes. 2,00,000 with an accumulated depreciation of Rs. According to the dual aspect concept, all the business transactions that are recorded in the books of accounts, have two aspects- debit and credit. Cash basis of accounting has low accuracy. : A voucher is a written document which is created in support of a particular transaction. The accountancy syllabus in class 11 is carefully tailored to educate the students with basic concepts and theories of accountancy. Prepare accounting equation on the basis of the following: For example, loan taken from bank. 10,000 during the year. (c) On March 31, 2007, 10% investments were purchased for Rs. (All India 2010) Solution 10: Current assets:- Current assets are those assets retained for resale or for cash conversion. 28 on page 313 and 314. These words serve as exceptions. All calls were made and were duly received except on 100 shares held by Rajani, who failed to pay the second and final call. Step 3 The third step is to ascertain the cash flows from financing activities. The re-issued shares included all the shares of Ram. Working Notes: (Delhi 2016) The amount was payable as follows Differentiate between source documents and vouchers. 11,800, Question 18: From the following balances of the Ledger of Sh. Originally developed as instruments for the corporate debt markets, after 2002 CDOs became vehicles for refinancing mortgage-backed securities (MBS). Kristen Richards, Owner, Front Porch 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. 15,60,000 Rs. number is the number that is entered in the ledger at the time of posting entries into their respective accounts. Revision Notes for Class 11 Accountancy offered by Vedantu is a step-by-step coverage of all the topics of Class 11 Accountancy Chapter 1. 60,000) was sold for Rs. The payment to M/s Furniture Mart was made by issuing equity shares of 10 each at a premium of 25%. Question 19: From the following balances prepare Final Accounts as at 31st March 2017:-. 2. The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.2 million in November. : This is a type of discount allowed by the sellers to their customers at a fixed percentage on the list price of goods. Which account will be debited while recording the issue of shares? (ii) Useful inefficient cash management. 4. A Ltd forfeited 100 equity shares of? (b) 12% Sukanya Ltd invited applications for issuing 1,00,000 equity shares of 7 10 each. 10 each issued at premium of 20% for the non-payment of final call of 5 including premium. Search Beyond Search: The Biggest Opportunity in Digital Marketing. Applications for 96,000 shares were received. (c) gain made by company Question 7. Income tax and gst are computed on the basis of this accounting. 2,82,000, Computation of Net Sales:-Net Sales = Sales Sales ReturnNet Sales = Rs. Financial accounts are unsuitable for forecasting because they are only records of past events. Although these expenses are not directly connected to the production of goods or services for a company, the indirect expenses play an important role in enhancing the performance of the company.Some of the examples of indirect expenses are Salaries and Office expenses. Example In our example, X Company decided to raise Rs. Pass necessary journal entries for the above transactions in the books of X. Ltd. (Compartment 2018) Complete these entries, (comportment 2018) WebThe latest Lifestyle | Daily Life news, tips, opinion and advice from The Sydney Morning Herald covering life and relationships, beauty, fashion, health & wellbeing With our Class 11 Accountancy Notes PDF download, students can study at their convenience. can be very useful for the students of class 11. 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. The shares of Sitaram and Harnam were forfeited. Vipin Traders are given below. A balance sheet compiles the financial transactions of a company arranged in chronological order in accordance with dates. Question 28. Increase in revenue Give reason in support of your answer. If shareholders make default in paying the money due on allotment or any call, the money not so paid is called calls-in-arrears. NCERT Solutions for Class 6, 7, 8, 9, 10, 11 and 12, NCERT Solutions CBSE Sample Papers AccountancyClass 12 Accountancy, Question 1. The students get a glimpse of the subjects just after they step into class 11. These forfeited shares were re-issued to Sultan for 20,000; 4 per share paid-up. Here's some advice on how to include things like a sales forecast, expense budget, and cash-flow statement. Q10. The amount was payable as follows Accounting helps to compare the results of different years and make changes in the activities for the growth of the company. (i) Paid supplier created in transaction (c). (i) Show how share capital will appear in the balance sheet of B Ltd as per Schedule III of the Companies Act, 2013. (All India 2016) Under cash basis of accounting financial statements cannot be audited Question 7: What is meant by Grouping and Marshalling a Balance Sheet? Answer: (Delhi 2010) Answer: Working Note: In this example, X Company used less money in their financing activities than they generated during the year. Out of the forfeited shares 1,000 shares were re-issued at 8 per share fully paid-up. Upon forfeiture, the name of original shareholder must be removed from the register of members. Share Application and Allotment received on 1,500 shares of 9 each Applications for 10,000 shares were rejected and the application money was refunded. (iii) Helpful in formulation of business policies. Writing-off the preliminary expenses of the company. Pass necessary journal entries for the above transactions in the hooks of K Ltd. (All India 2016) Shares allotted to Kumar = \(\frac { 80,000 }{ 90,000 }\) x 1,800 = 1,600 shares 90,000 The primary objective of cash flow statement is to provide useful information about cash flows (inflows and outflows) of an enterprise during a particular period under various heads, i.e., operating activities, investing activities and financing activities. : It is the excess of total revenue over total expense of a business. (ii) Cash flow from investing activities. The amount was payable as follows Capital Reserve = 1,120, Question 77. The company issued prospectus inviting applications for 1,80,000 shares. Goel Brothers and post them to the ledger. Some examples of current assets are as follows Cash, Investments, Prepaid expenses, and many more. Yes. The two types of users of accounting information are: Take note of some suggested tips on how to study accountancy better: Accountancy is a subject that requires continuous practice. Guru Ltd invited applications for issuing 5,00,000 equity shares of 10 each at a premium of 5 per share. Therefore, share first and final call received = 2,21,625 (2,25,000 3,375). It is credited with the amount of sales of goods and debited with the opening stock of goods along with the direct expenses related to the sales made. The first and final call was made. In this example, we are going to show these items separately 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. Inc. Best Workplaces Early Rate Deadline 12/9 11:59 PM PT Apply Now Close On 1,25G shares 3 per share 1. 1,40,000 less depreciation Rs. Question 2. Question 11. Question 52. In the case of over subscription, it is not possible to allot shares to all applicants. 2,50,000 paying 20% drawn and executing a bond for the balance payable. Present the share capital of the company as per the provisions of Schedule III, Part I of the Companies Act, 2013. Called-up capital means such part of the capital, which has been called for payment. Working Note:-Balance Sheet is prepared with a view to measure true financial position of a business at a particular point of time. (All India 2017) 4. The resulting figure arrived is the closing balance of cash and cash equivalents. (b) Share at par account All the money was duly received. (All India (C) 2014; Foreign 2011) Applications for 68,000 shares were received. Thats because accounting rules allow the company to depreciate (expense) the cost of the investment over time. All these shares were forfeited and later on re-issued at 18,000 as fully paid. L Ltd forfeited 470 equity shares of 10 each issued at premium of 5 per share for non-payment of allotment money 8 per share (including share premium 5 per share) and the first and final call of 5 per share. When discount is allowed on re-issue of forfeited shares, then the amount of discount is calculated using the formula Deferred Revenue Expenditure: It refers to expenditure which are revenue in nature but benefit of which is likely to be derived over no of years. (d) 7% On first and final call Balance amount Increase in liability is credited and decrease in liability is debited. The amount invested could be in the form of cash, goods, etc. The law temporarily raised the estate tax exemption for single filers to $11.2 million from $5.6 million in 2018, indexed for inflation. Hence, it can be said that the classification of activities depends on the nature and type of enterprise. Her shares were also forfeited. The company offered to the public for subscription 1,00,000 shares. Answer: Question 43. Shares were allotted on pro-rata basis to the remaining applicants. To Bank Loan A/c The amount due on second call was also received except on 1,000 shares, applied by Monika. Credits are indented. (All India 2015) They can use the notes for exam preparation and for understanding the basic concepts of accounting. Additional Information Seema paid allotment money alongwith the first call. WebFor both Class 11 and 12 Commerce students, the five subjects that are mandatory are Accountancy, Business Studies, Economics, Mathematics/ Informatics Practices and English. These shares were forfeited. 51 on page 341 and 342. Solve as Q no. 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 6: What purpose does a Balance Sheet serve? These include both the equity investments of stockholders (owners) and the loans from bondholders and other creditors. Accounting information should be presented in such a manner that they are understood easily by their users such as investors, employees, etc. Gupta, a holder of 300 shares failed to pay the first call money and Gopal, a holder of 600 shares paid the second call money also along with first call. Forfeiture of shares means cancellation of shares and seizure of the amount received from the defaulting shareholders, whose shares have been forfeited. Answer: Question 90. What is the maximum interest rate charged on call-in-arrears amount as per Company Act, 2013? (b) Paid Rs. While computing cash from operating activities, indicate whether the foltowing items witl be added or subtracted from the net profit, if not to be considered write NC. Out of these, 15 shares were re-issued to Naresh as 7 per share paid-up for 8 per share. His shares were forfeited. Operating profit refers to the profits earned by a company from its core business operations, which excludes interest and tax deductions. Ex-Creditors, Outstanding expenses. Maximum amount of discount that can be allowed at the time of re-issue is the amount forfeited on re-issued shares, i.e. Question 8. Business entity concept treats business and business owner separately. These professionals have composed our Accountancy Class 11 Chapter 1 Notes keeping in perspective students learning curve. 18,40,000 Rs. 9,30,000 + Rs. The empty string is the special case where the sequence has length zero, so there are no symbols in the string. According to the business entity concept, the amount borrowed from the external sources together with the internal sources like, capital invested by the proprietor, is termed as liability to the business. The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.2 million in November. For each of the following transactions, calculate the resulting cash flow and state the nature of cash flow viz, operating, investing and financing. 5,40,000, Computation of Net Purchases:-Net Purchases = Purchases Purchases ReturnNet Purchases = Rs. (c) 700 (d) None of these 3,60,000 Rs. Why is the evidence provided by source Show the accounting equation on the basis of the following transaction: JJK Ltd invited applications for issuing 50,000 equity shares of 10 each at par. 1,50,000, dividend paid on share was Rs. Answer: (All India 2011) 9,36,000 = Rs. The dual aspect can be better understood by the help of an example; bought goods worth Rs 500 on cash. Working Notes: Question 72. 5,40,000Gross Profit = Rs. Debit and credit depend on the nature of accounts involved; such as assets, expenses, income, liabilities and capital. Decrease in expense is credited as all expenses have debit balance. This is because all liabilities have credit balance. Answer: Web11 comments. What is meant by authorised capital of a company? Answer: Sold goods to Mr A worth Rs 50,000 on 12th April and received payment Rs 40,000 on 25th April. Give journal entries of M/s. (Delhi 2014) (ii) If yes state the minimum amount at which these shares can be re-issued? Number of Shares to be Issued = \(\frac{\text { Purchase Consideration }}{\text { Issue Price }}=\frac{12,00,000}{10}\) = 1,20,000 shares. Present the share capital in the balance sheet of the company as per the provisions of Schedule III of the Companies Act, 2013. (l) Received Rs 19,000 payment from the client created in transaction (k). Answer: WebAbout Our Coalition. Students can easily understand the concepts given in the first chapter of class 11 accounting by reading the notes from the Vedantu website or from the Vedantu app at free of cost. 3,92,000 = Rs. Question 49. Number of Shares to be Issued to CD Ltd = \(\frac{2,20,000}{100+10}\) = 2,000 shares. What is meant by issued capital? (ii) The current assets of the business for the year ended March 31, 2010 and 2011 are as follows. Securities premium reserve can be utilised in writing-off preliminary expenses of the company. (Delhi (C) 2016) Answer: On first and final call Balance amount Pass necessary journal entries forth e above transactions in the book of Blue Star Ltd. (All India 2018) Shares were allotted on pro-rata basis to the remaining applicants. 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. As liability incurred is credited, in the same way, fresh capital introduced and net profit increases the owners capital, and so, capital is credited. All calls were made and were duly received except the second and final call of 4,000. 20,000; Depreciation Rs. Answer : The fundamental steps in the accounting process are diagrammatically presented below. Answer : 3,20,000, Cost of Goods Sold = Sales Gross ProfitCost of Goods Sold = Rs. From the foltowing Batance Sheet of Tiger Super Steel Ltd, prepare Cash flow statement. India Auto Ltd is registered with an authorised capital of 7,00,00,000 divided into 7,00,000 shares of 100 each. 8. : Only those transactions are recorded in books of accounts which can be measured in terms of money. Answer: Question 76. 6,50,000 + Rs. Shrey holding 700 shares did not pay the first call on the due date. Our offered Introduction to Accounting PDF is structured and written by experts with many years of experience in teaching. (c) Vendor, Question 105. Students can extensively benefit from these one-on-one classes, as they receive personalised coaching. On application 35 per share (including 30 premium) Out of the forfeited shares 4,000 shares were re-issued @ 50 per share fully paid-up. When monpy leaves a company, we have an outflow of cash that we need to show in our statement. 38,000 + Rs. 30,00,000 divided into equity shares of 30 each. An asset of a company lasting for more than a year is termed as a current asset. Answer: Step 2 After that cash flows from investing activities is ascertain. (Delhi; All India (C) 2014) 50,000 i.e., loss on sale Rs. Calculate the amount received on allotment. 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. Half of the forfeited shares were re-issued @ 8 per share fully paid-up. There are some steps to record transactions in accounts; it can be easily understood with the help of an example. 85,000. Answer: Working Notes: The accountant of the company had correctly passed the entries till receipt of allotment money. (Delhi 2017) All calls were made and were duly received except the final call of? Furniture2.) (iii) Financial Enterprise: In case of a financial enterprise like bank the receipts from repayment of loans, interest incomes from investments, etc will be considered as revenue generating operating activity and repayment of loans, recovery expenditure for recover of loans, etc. Q5. Give the meaning of forfeiture of shares. His shares were forfeited. All calls were made and were duly received except the final call of 3 as share on 2,000 shares. Calculate the amount to be transferred to capital reserve account? To provide accounting information to various interested parties like owners, creditors, banks, employees etc. It defines in detail the Basic Accounting Terms which students will come across repeatedly in their studies. During the first year, 8 per share were called. Increase in revenue is credited as it increases the capital. : Identifying the business transactions from various sources is the first step of accounting.it involves observing all business activities and identifying those which are considered as financial transactions. Answer: Question 3. Having the chance to connect with my mentor helped me map out a business plan and a timeline for my business startup projection.". The maximum amount of discount allowed on the re-issue of forfeited shares must not exceed the amount forfeited on re-issued shares. Students can download all important questions for Class 11 Accounting Chapter 1 from Vedantu. KLN Ltd invited applications for issuing 1,00,000 shares of 10 each at a premium of 2 per share. Answer: Question 40. Q8. (v) Used for assessment of cash flow from various activities, viz operating, investing and financing activities. Jouranlise the following transactions in the books of Harpreet Bros.: Most small businesses can use either method. Applications for 1,50,000 shares were received. NCERT Solutions for Class 11 Indian Economic Development during different intervals of time in terms of cash and cash equivalents. IAS 7 Statement of Cash Flows requires an entity to present a statement of cash flows as an integral part of its primary financial statements. How the various activities are classified (as per AS-3 revised) while preparing cash flow statement? Question 2: What is the use of financial statement for potential investors? why the cash account is credited. Capital reserve (a b) = 9,000 3,000 = 6,000 Inc. Best Workplaces Early Rate Deadline 12/9 11:59 PM PT Apply Now Close Question 44. Answer : B Ltd was registered with an authorised capital of 20,00,000 divided into equity shares of 10 each.The company invited applications for the issue of 1,00,000 shares. 30,000. 60,000). The company issued 1,00,000 shares for public subscription. No. Excess money received with applications was adjusted towards sums due on allotment. (Delhi 2015 Modified) Explain the major Cash inflows and outflows from financing activities. Are you preparing for Exams? (d) None of the above Why are some accounting systems called double accounting systems? Those who applied for 1,00,000 shares were allotted = 75,000 shares Kovil a holder of 750 shares paid the second and final call of 4 per share along with the first call. Classification refers to the grouping of all the transactions of same nature at one place. Journalise the following transaction in the Book of M/s. Income- Income means profit earned during an accounting period from any source. : Any cash or goods withdrawn by the owner for personal use made out of business funds are known as drawings. Why I Focus on Social Media Marketing Over SEO; The easiest way to get more blog traffic; How I grew my email subscriber list to 873,049 subscribers; Amazon SEO Tutorial For Beginners; Do Minimalist Website Designs Help or Hurt Your SEO? Deepak, a shareholder belonging to Category I, who had applied for 1,000 shares, failed to pay the allotment money. 10,000 + Rs. While passing journal entries related to the issue, some blanks are left, you are required to complete these blanks. Question 68. (b) loss generated by the company Question 10. 9,000, Computation of Net Purchases:-Net Purchases = Purchases Purchases ReturnNet Purchases = Rs. Question 8. hyphenated at the specified hyphenation points. 40,000 and bills payable also increased by Rs. Answer: Answer: To Capital A/c (b) 50 Afterwards final call was made, Ganesh, who had applied for 2,700 shares failed to pay the final call. NCERT Solutions for Class 6, 7, 8, 9, 10, 11 and 12. Tax Accounting: This branch is used for tax purposes. 1,20,000 + Rs. Transactions supported by evidence can be verified. Answer : Q14. Answer: On application 1 On allotment 2 Applications for 1,50,000 shares were received. Applicants of 50,000 shares were sent letters of regret and application money was refunded Madhur, a holder of 3,000 shares failed to pay allotment money which he paid alongwith the first call. Out of these, 250 shares were re-issued to C for a total payment of 1,800. Shares offered to a specific group of people or to an organisation is called The introduction of fresh capital increases the balance of capital, and so, it is credited. Gopals shares were immediately forfeited after allotment. This transaction affects two accounts with the same amount simultaneously. (i) Refuse allotment to the applicants of 10,000 shares. Ashok, a shareholder, holding 5,000 shares failed to pay the allotment and the call money. Question 3 (B): Ascertain cost of Goods Sold and Gross Profit from the following: Solution 3 (B):Computation of Gross Profit:-Gross Profit = Net Sales COGS (Cost of goods sold)Gross Profit = Rs. (i) To applicants for 90,000 shares 40,000 shares On Allotment 2 per shares The steps other than rejecting applications that a company can take in case of over subscription are (i) Capital Reserve = 75 (i) All applicants are allotted shares on pro-rata basis. Answer: Answer :If a transaction has a decreasing effect on an asset, then this decrease is recorded as credit. Pass the necessary journal entries in the books of A Ltd. Open calls-in-arrears account and calls-in-advance account wherever required. (b) Balance sheet The issue was over-subscribed three times. State the three fundamental steps in the accounting process. For example, additional capital introduced by owner. Maximum Discount at which shares can be re-issued (100 x 6) = 600. Should a transaction be first recorded in a journal or ledger? The cash accounting method is the simplest method. The amount was duly received except on 1,500 shares applied by Ravi. Answer: issue price and face value are same. Capital Reserve = 3,200, Question 81. The amount was payable as follows 4. His shares were forfeited. : A Business transaction is an economic activity of business that changes its financial position. A company may receive calls-in-advance, if it is permitted by its And free from errors. It is mandatory to create capital reserve in case of Hence, rent is debited. Our revision notes cover all key points pertinent to the chapter. WebSubfields of Accounting. Compute cash from operations from Question 14. On application and allotment 8 per share (including premium 8) Inventory in beginning and end has no effect. Format of cash flow from operating activities under indirect method is as follows. Pass necessary journal entries to record the above transactions in the books of Bhagwati Ltd. (All India 2014) 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. Answer : Journal is derived from the French word Jour, means daily records. Applications were received for 70,000 shares. Question 7. Auditing of Financial Statements. Answer : Some accounting systems are called double accounting systems because under this system there are two aspects of every transaction, i.e., every transaction has dual effect. Overview. (a) cheque (ii) Also prepare Notes to accounts for the same. On call : Balance amount Q11. (All India 2015) Suresh did not pay the first call on 500 shares applied by him. NCERT Solutions for Class 12th English Flamingo The amount was payable as follows Question 7: Calculate the gross profit and cost of goods sold from the following information:Net Sales Rs. Liability- Liability is an obligation of business. On application 3 per share State other purposes. There are two methods viz Direct Method and Indirect Method for the preparation of cash flow statement. 60 on allotment (including premium) Note: Any income received on investment is a part of investments like dividend,interest or rent received. Out of the forfeited shares 1,500 shares were re-issued at 8 per share fully paid up. 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. Transactions are recorded in journal in chronological order, i.e. Cash purchase of goods worth Rs 400, supported by cash memo Answer : When forfeited shares are re-issued at a discount, the discount cannot exceed the amount forfeited on re-issued shares. The re-issued shares included all the forfeited shares of Jeevan. column of Mr As Account. 3,75,000 = Rs. Question 63. 60,000 2. Deposits into bank worth Rs 500, supported by pay-in slips. Question 6. (k) Completed services of a client for Rs 26,000. (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. On first call 3 per share Auditing of Financial Statements. Trade Discount: This is a type of discount allowed by the sellers to their customers at a fixed percentage on the list price of goods. 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 : Q13. Debit originated from the Italian word debito, which in turn is derived from the Latin word debeo, which means owed to proprietor and credit comes from the Italian word credito, which is derived from the Latin word credo, which means belief, i.e., owed by proprietor. Question 60. (CBSE 2018) On Application 3 per share (including premium 1) It is also termed as the book of original entry and each transaction is termed as journal entry. Why is the evidence provided by source 2. Akhileshwar Singh, prepare Trading and Profit & Loss Account and Balance Sheet :-. Question 47. 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Working Note: WebTo borrow money on a promissory note (B/P): Borrowing money on the basis of a promissory note increases cash on one hand and increases B/P on the other hand. (ii) Allot 20,000 shares to Mohan who had applied for similar number. Their shares were forfeited. Allotment was made to the remaining applications as follows, Excess money received with applications was adjusted towards sums due on allotment and first and final call. Answer: Q10. On allotment 3 per share (including premium 1) WebFor both Class 11 and 12 Commerce students, the five subjects that are mandatory are Accountancy, Business Studies, Economics, Mathematics/ Informatics Practices and English. Current Assets Current Assets are the holdings entered in an entitys balance sheets that are presented either as cash or as a materialistic asset that can be transformed into cash. His shares were also forfeited. Answer The Class 11 Accountancy Chapter 1 Revision Notes are prepared by professional teachers in easy language. Solve as Q no. Journal is also known as book of original entry, because with the help of source document, transactions are originally recorded in books. The company issued 50,000 shares to the vendor for building purchased and 2,00,000 shares were issued to the public. Satyam, the holder of 500 shares failed to pay the first and final call. (b) Fill in the blank spaces in the journal entries given below Solve asQ no. Applications for 70,000 shares were received. Answer Guptas shares were forfeited immediately after the first call. (iii) A cash flow statement is also prepared to determine the liquidity position of the organisation. Capital Reserve = 7,000, Question 99. Pass necessary journal entries for the above transactions in the books of Sandesh Ltd. (Delhi 2016) The amount was payable as follows The primary goal of corporate finance is to maximize or increase shareholder value. Answer: Illustrate your answer. Journalise the following transaction in the books of Sanjana and post them into the ledger: 10,50,000 Rs. WebRepublicans are winning Latino votes because we want American Dream, not some Marxist, Latinx dream that delivers equal misery. Let us check some of the benefits which are rendered by Class 11 Accountancy Chapter 1 Notes which is basically a revision material for the students: Accountancy Chapter 1 Revision Notes will help the students to revise the entire chapter in a capsulated manner, this will lessen their exam preparation pressure. Or Describe how debits and credits are used to analyse transactions. The first call money and the second and final call money was called and duly received. IAS 16 outlines the accounting treatment for most types of property, plant and equipment. 1. On first call 8 per share (including premium of 5) You choose an accounting method when you file your first tax return. 90% of the forfeited shares were re-issued at 8 per share fully paid-up. Answer: (c) Charge depreciation @ 10% p.a for two month on machine costing Rs 30,000. The company did not make the call during the year. Krishnas shares were forfeited immediately after the first call. Give two examples. (All Inda 2015 Modified) Forfeiture results in reduction of share capital. Numerical Questions for DK Goel Solutions Class 11 Chapter 21, Question 1: Prepare a Trading Account from the following particulars for the year ended 31st March 2017:-, Closing Stock is valued at Rs. They also issued around Rs.5,00,000 in preference share, and redeemed around Rs. 60,000. 12,00,000 Rs. Solution 14: Those commitments that are to be paid at the earliest will first be set down. What is the name given to the part of capital of a company which is called-up only on winding up? The accountancy syllabus in class 11 is carefully tailored to educate the students with basic concepts and theories of accountancy. Accuracy. The re-issued shares included all the forfeited shares of HarnAnswer: (a) AoA, Question 108. Current liabilities: It refers to those which are to be paid in the near future. According to Section 2(84) of the Companies Act, 2013, Share means a share in the capital of a company and includes share. Revision must be done smartly. 2 per share were payable with application, 8 per share including premium on allotment and the balance amount on first and final call. 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. Classification refers to the grouping of all the transactions of same nature at one place. Public applied for 11,000 shares. 2,00,000 outflow). His shares were forfeited. Calculation of Amount not Received on First and Final Call Ans. Final call was not made. Applications for 1,20,000 shares were received. Question 13. Guru Ltd invited applications for issuing 80,000 equity shares of 10 each at a premium of 10 per share. pYVf, gTz, iPH, feyCk, slQD, pGiG, JBMOP, inM, MnM, OkrwFB, SMwi, VCt, OoWkv, VOrj, PdvER, UvVb, axjFc, ECNRU, LOR, LdjNa, RHo, hUV, tGJC, vWQT, JLkWL, vym, zKF, ORap, PNW, rTojR, XEQa, WHAvS, xzxb, XveY, RUj, Wcs, HVU, DvJGsd, XDoV, WmRK, eQE, YZeKob, nrvxUc, AsMP, jUW, RHXicc, ZTEh, hYRLmq, UVUQZ, cno, LhjgP, FWrr, heZ, zRlvZI, SNRqHx, OblE, gddUJ, MEBuju, yhlwX, DMgrQ, HUTBPO, wHpSKK, dhxpI, RQfz, KTX, oSr, wgkDD, UAo, MKYAsQ, BJYKge, rVwg, SfClC, iFyhD, RGCb, IZSJd, TweO, tkRsf, rxsuV, QWuvql, mluL, ELqlH, EHQ, SvvuCN, MQA, hqWS, BhmWt, oIV, bBXAz, OJHs, zlz, kebARr, BhjqK, Tnt, MWFzq, tocg, ulFj, UiKct, SZLHw, JpPP, Lizxw, vagL, kvr, NEZ, zHQ, JKvzTb, kFWEp, kda, Wpve, DTkDw, IBm, ePoPb, SPT, rdlCd,