Trade Creditors
Capitals :
Manoj
Naveen
Deepak
ratio of 4:3:2. As at April, 2012, their Balance Sheet was as follows:
0.13. Manoj, Naveen and Deepak were partners sharing profits and losses in the
Liabilities
₹
Assets
7,000 Cash in hand
5,900
Debtors
19,000
50,000
Less : Provision
1,400 17,600
39,000
Stock
13,500
30,000
1,19,000 Plant and Machinery
18,000
Motor Car
20,000
Buildings
48,000
Goodwill
3,000
1,26,000
1,26,000
Deepak retired on the above date as per the following terms :
1. Goodwill of the firm was valued at $21,000.
2. Stock to be appreciated by 10%.
3. Provision for doubtful debts should be 5% on debtors.
4. Machinery is to be valued at 5% more than its book value.
5. Motor Car is revalued at 315,500. Retiring partner took over Motor Car at this
value.
6. Deepak be paid 2,000 in cash and balance be transferred to his loan account.
Show necessary journal entries. Prepare Revaluation Account, Capital Accounts
and Opening Balance Sheet of continuing partners.
Answers
Answer:
(i) C- Rs. 55,880
Fixed cost per unit = Rs. 3,60,000 / 15,000 units = Rs. 24
Profit under absorption costing = Rs. 1,01,000
Adjustment of fixed manufacturing overhead costs of increased inventory = 1,880 units × Rs. 24
= Rs. 45,120
Profit under marginal costing = Rs. 1,01,000 – Rs. 45,120 = Rs. 55,880
(ii) C – Monopoly position.
(iii) A - 5,80,000
Using production related budgets, units to produce equals budgeted sales + desired ending finished
goods inventory + desired equivalent units in ending W-I-P inventory – beginning finished goods
inventory – equivalent units in beginning W-I-P inventory. Therefore, in this case, units to produce
is equal to 5,00,000 + 1,50,000 + 60,000 – 80,000 – 50,000 = 5,80,000.
(iv) B - Rs. 300 lakhs
Margin of safety = Profit/ P/V Ratio
= 30/0.40 = Rs. 75 lakhs
0.25 of sales = Rs. 75 lakhs
Hence, Sales = 75/0.25 = Rs. 300 lakhs
(v) A – The same as good production
Explanation:
use this formula