01/01/2013
HAPPY NEW YEAR TO STUDENTS OF +2 COMMERCE. By now you would have been preparing hard to get good results in your C.B.S.E.Here are certain important assignments to be taken up chapter wise which shall definitely help you in securing good marks in accountancy.
In COMPANY ACCOUNTS, "ACCOUNTING FOR DEBENTURE" have a weight age of 7 marks. In syllabus you have the following important topics to be covered for final exams.
1. Issue of debenture for consideration other than cash-practical problem expected from this topic.
Concept relating to the topic :when a company takes some assets from the supplier/vendor and instead of making the payment to the vendor in cash, issues debenture in lieu of purchase consideration. Such issue of debentures to vendors is known as issue of debentures for consideration other than cash.
JOURNAL ENTRIES REGARDING ITS ACCOUNTING TREATMENT.
(1). WHEN BUSINESS IS ACQUIRED.
Assets and liabilities are acquired.
Sundry assets a/c Dr. (agreed value of assets taken over)
Goodwill a/c Dr. (Excess of purchase price over net assets)
To Sundry Liabilities (liabilities taken over)
To Vendor ‘s A/c (Amt. of purchase consideration)
To Capital reserve (Excess of net assets over price)
(2). WHEN ALLOTMENT OF DEBENTURES ARE MADE TO THE
VENDOR.
Vendor A/c Dr. (Amount of purchase consideration)
Discount on issue of debentures A/c Dr. (If deb;issued at discount)
To Debentures (Face value of debenture issued)
To Premium on deb; (If deb; issued at a premium)
Working note: - To compute number of debentures to be issued to the Vendor.
Number of debenture = amount to be paid to the Vendor / Proposed value of one debenture
Debentures can be issued at par, Discount or premium.
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BASIC ASSIGNMENT :- (1)
Solve and send the solution of assignment to “shaper’s the institute of commerce”
Q.1 A Ltd. Took over assets of Rs.10,00,000 and creditors of Rs. 1,00,000 from B. Ltd. and issued 6% debenture of Rs.100 each at a premium of 25% as purchase consideration. Pass necessary journal entries in the book of A Ltd.
Q.2 Z Ltd. Purchase a building for Rs 2,20,000. Half of the payment was made in cash and the balance by issue of 12% debentures at a premium of 10% Pass necessary journal entries in the book of Z Ltd.
Q.3 X Ltd. Purchase furniture of Rs. 2,20,000 from M/s Ravinder mart. 50% amount was paid to Ravinder mart by accepting a bill of exchange and for the balance the company issued 9% debentures of Rs.100 each at a premium of 10% in favour of Ravinder mart.Pass journal entries in the books X Ltd.
Q.4 A company purchase machinery for Rs 2,88,000 the purchase price was to be satisfied by issue of debenture of 4% give journal entries for the transaction.
Q.5 X Ltd took over the following assets and liabilities of Y Ltd. For purchase consideration of Rs.3,50.000
Building 2,90,000 Debtors 30000 Computer 25000 Creditors 18000
Furniture 15000 Bank overdraft 2000
X Ltd. Paid the purchase consideration by issuing 12% debenture of Rs. 100 each at par, give journal entries.
For your queries contact :- s.c.o 11, (T.F.) sector 30 D Chandigarh, Ph.09815388137,
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::;" WISH YOU A GOOD LUCK";:::
