Gujarat University 2007 B.A Financial Accountancy (General) (New ) - Question Paper

of Rs. 10,000 which were formerly written off.
(5) Savar has expected to receive custom deposit and Bapor to be paid against
bills payable.
(6) Dissolution expenses amounted to Rs. 6,000.
(7) Sanj declared insolvent. Her total personal assets are worth Rs. 13,000 and
total personal debts to be paid worth Rs. 10,600.
Prepare necessary accounts relating to dissolution of firm, by applying the
rule Garner V/s. Murrey case to close the books of the firm.
OR

Samoand Vakhat are the partners sharing profit and losses in the ratio three : 2. The
Balance Sheet of their firm as on 31st Dec, 2006 is as under :
Liabilities Rs. Assets Rs.
Capital Samo 1,00,000 Goodwill 28,000
Vakhat 60,000 1,60,000 Building 1,00,000
Reserve Fund 16,000 Machinery 50,000
Smt. Samo’s 12% loan 60,000 Furniture 10,000
Workmen’s accident Investments 16,000
compensation fund 10,500 Debtors 60,000
Creditors 60,000 Stock 50,000
Provident Fund 30,000 Cash 16,000
Outstanding expenses 3,500 Advertise Camp.
Depreciation fund : Suspense A/c. 20,000
For building 10,000 Profit & Loss A/c (Dr.) 20,000
For machinery 10,000 20,000
Investment Fluctuation Fund 10,000
3,70,000 3,70,000
On first Jan. 2007 the above firm was converted into Ltd. Co. in the name of
‘The Times Co. Ltd.’ on the subsequent terms :
(1) The company took over all the assets & liabilities other than investment and cash.
(2) Company will take over building, investment and stock at their market price.
Building shown in the Balance-Sheet is 25% less than the market price. The
market value of investment and stock is Rs. 20,000 and Rs. 40,000 respectively.
The remaining assets and liabilities at their book value.
(3) The goodwill of the firm is valued at Rs. 25,000 while 10% of the debtors were
written off.
(4) The company will discharge the claims of Rs. 500 in future, which was accepted
by the firm formerly against the Workmen’s Compensation Act.
(5) The purchase consideration is paid by the Co. as under :
1) Smt. Samo’s loan is to be paid by giving her 15% Debentures of the Co.
Rs. 100 every in such a manner, so that there should be no loss of interest.
2) The remaining purchase price will be paid by the Co’s 500 equity shares of
Rs. 100 every at a premium of 10% and rest of the amount in cash.
(6) Dissolution expenses incurred Rs. 1,000.

Earning:   Approval pending.