(a) M of Mumbai sent on consignment, goods valued 4,00,000 to A of Agra on 1st...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
(a) M of Mumbai sent on consignment, goods valued 4,00,000 to A of Agra on 1st March, 2020. He incurred the expenditure of 48,000 on freight and insurance. M's accounting year closes on 31st December. A was entitled to a commission of 5% on gross sales plus a del-credere commission of 3%. A took delivery of the consignment by incurring expenses of 12,000 for the goods consigned. On 31/12/2020, A informed on phone that he had sold all the goods for 6,00,000 by incurring selling expenses of 8,000. He further informed that only 5,92,000 had been realized and rest was considered irrecoverable, and would be sending the cheque in a day or so for the amount due along with the accounts sale. On 5/1/2021, M received the cheque for the amount due from A and incurred bank charges of 1,040 for collecting the cheque. The amount was credited by the bank on 9/1/2021. Write up the consignment account finding out the profit/loss on the consignment and A's account in the books of M. (10 Marks) (b) P sends out goods on approval to few customers and includes the same in the Sales Account. On 31.3.2021, the Trade receivables balance stood at 3,00,000 which included *21,000 goods sent on approval against which no intimation was received during the year. These goods were sent out at 25% over and above cost price and were sent to Mr. A 12,000 and Mr. B *9,000. Mr. A sent intimation of acceptance on 30th April and Mr. B returned the goods on 10th April, 2021. Make the adjustment entries and show how these items will appear in the Balance Sheet on 31st March, 2021. Also show the entries to be made during April, 2021. Value of closing inventories as on 31st March, 2021 was * 1,80,000. (5 Marks) (c) Attempt any ONE of the following two sub-parts i.e. either (i) or (ii): (i) The following particulars are sent by Mr. A to Mr. K: Date Particulars 15/7/2021 Balance due from Mr. K 20/8/2021 Sold goods to Mr. K 25/8/2021 Goods returned by Mr. K 15/9/2021 Cheque paid by Mr. K 20/10/2021 Cash received from Mr. K Amount (3) 6,000 10,000 1,600 6,400 4,000 Prepare an Account Current as sent by Mr. A to Mr. K as on 31st October, 2021 by means of product method charging interest @ 8% per annum. Round off the amounts to the nearest rupee. (5 Marks) (ii) Mr. X gives the following particulars in respect of business carried on by him: Particulars Amount () Capital Invested in business 9,00,000 Market rate of interest on investment 8% Rate of risk return on capital invested in business 3% Remuneration per annum from alternative employment of proprietor if he was not engaged in business 36,000 The business earned profits of 2,40,000, 2,16,000 and 3,00,000 in the years 2018, 2019 and 2021 respectively but made a loss of 36,000 in the year 2020. Compute the value of Goodwill on the basis of 6 years' purchase of super profits of the business, calculated on the basis of average profit of last four years. (5 Marks) (a) M of Mumbai sent on consignment, goods valued 4,00,000 to A of Agra on 1st March, 2020. He incurred the expenditure of 48,000 on freight and insurance. M's accounting year closes on 31st December. A was entitled to a commission of 5% on gross sales plus a del-credere commission of 3%. A took delivery of the consignment by incurring expenses of 12,000 for the goods consigned. On 31/12/2020, A informed on phone that he had sold all the goods for 6,00,000 by incurring selling expenses of 8,000. He further informed that only 5,92,000 had been realized and rest was considered irrecoverable, and would be sending the cheque in a day or so for the amount due along with the accounts sale. On 5/1/2021, M received the cheque for the amount due from A and incurred bank charges of 1,040 for collecting the cheque. The amount was credited by the bank on 9/1/2021. Write up the consignment account finding out the profit/loss on the consignment and A's account in the books of M. (10 Marks) (b) P sends out goods on approval to few customers and includes the same in the Sales Account. On 31.3.2021, the Trade receivables balance stood at 3,00,000 which included *21,000 goods sent on approval against which no intimation was received during the year. These goods were sent out at 25% over and above cost price and were sent to Mr. A 12,000 and Mr. B *9,000. Mr. A sent intimation of acceptance on 30th April and Mr. B returned the goods on 10th April, 2021. Make the adjustment entries and show how these items will appear in the Balance Sheet on 31st March, 2021. Also show the entries to be made during April, 2021. Value of closing inventories as on 31st March, 2021 was * 1,80,000. (5 Marks) (c) Attempt any ONE of the following two sub-parts i.e. either (i) or (ii): (i) The following particulars are sent by Mr. A to Mr. K: Date Particulars 15/7/2021 Balance due from Mr. K 20/8/2021 Sold goods to Mr. K 25/8/2021 Goods returned by Mr. K 15/9/2021 Cheque paid by Mr. K 20/10/2021 Cash received from Mr. K Amount (3) 6,000 10,000 1,600 6,400 4,000 Prepare an Account Current as sent by Mr. A to Mr. K as on 31st October, 2021 by means of product method charging interest @ 8% per annum. Round off the amounts to the nearest rupee. (5 Marks) (ii) Mr. X gives the following particulars in respect of business carried on by him: Particulars Amount () Capital Invested in business 9,00,000 Market rate of interest on investment 8% Rate of risk return on capital invested in business 3% Remuneration per annum from alternative employment of proprietor if he was not engaged in business 36,000 The business earned profits of 2,40,000, 2,16,000 and 3,00,000 in the years 2018, 2019 and 2021 respectively but made a loss of 36,000 in the year 2020. Compute the value of Goodwill on the basis of 6 years' purchase of super profits of the business, calculated on the basis of average profit of last four years. (5 Marks)
Expert Answer:
Related Book For
Horngrens Accounting
ISBN: 978-0133855371
10th Canadian edition Volume 1
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo Ann L. Johnston, Peter R. Norwood
Posted Date:
Students also viewed these accounting questions
-
The actual selling expenses incurred in March 2012 by DeWitt Company are as follows. Instructions (a) Prepare a flexible budget performance report for March using the budget data in E21-5, assuming...
-
The actual selling expenses incurred in March 2014 by DeWitt Company are as follows. Instructions (a) Prepare a flexible budget performance report for March using the budget data in E10-5, assuming...
-
The actual selling expenses incurred in March 2017 by Fallon Company are as follows. Instructions (a) Prepare a flexible budget performance report for March using the budget data in E24-5, assuming...
-
Infinity & Beyond, Inc. is a producer of high-tech fashion merchandise. The company's marketing department has identified a new product concept through discussions with potential customers conducted...
-
Write a pseudo C code definition of the wait For Request function referenced in Figure. This code skeleton illustrates the structure of a passive server process. int serverskt; /* The socket used to...
-
Mininova Corporation is preparing earnings per share data for 2017. The net income for the year ended December 31, 2017 was $400,000 and there were 60,000 common shares outstanding during the entire...
-
In what circumstances can a demerger lead to creation of shareholder value? And value for creditors?
-
The weight of bags of fertilizer is normally distributed, with a mean of 50 pounds and a standard deviation of 6 pounds. What is the probability that a bag of fertilizer will weigh between 45 and 55...
-
What is the name of a financial product offered by insurance companies to which a person makes contributions and from which the person immediately or later begins receiving payments? A. Bond B....
-
The Xiomaras have an adjusted gross income of $137,865. They are looking at a new house that would have a monthly mortgage payment of $1,687. Their annual property taxes would be $7,550 and their...
-
Find 5420 E C E'E 65-4
-
A company plans to have sales of 20,000 in January, 30,000 in February, and 40,000 in March. Cash sales are expected to be 20 percent of the total and the remaining sales are sold on account and...
-
Waterking sells crystal vases. Budgeted sales are \(\$ 40,000\) for March and \(\$ 50,000\) for April. Sales are planned to be \(80 \%\) cash and \(20 \%\) on credit. The balance of Accounts...
-
Waterking sells crystal vases. Budgeted purchases are \(\$ 25,000\) for May and \(\$ 30,000\) for June. Waterking pays for \(60 \%\) of inventory purchases in the month of the purchase and \(40 \%\)...
-
Internal auditors should recognize and take into account certain attributes when reporting an audit finding requiring corrective action. These attributes are: a. Criteria what should be done b....
-
Petra is preparing a budget for her first semester in college. She has saved \(\$ 2,000\) from her summer job. She will receive \(\$ 5,000\) in scholarships and \(\$ 2,500\) from the university as a...
-
Kindly help me to address the following questions. Thank you. A life insurance company issues a special term assurance policy for a 3-year term. Under the policy, a sum assured of f10,000 is paid at...
-
When you weigh yourself on good old terra firma (solid ground), your weight is 142 lb. In an elevator your apparent weight is 121 lb. What are the direction and magnitude of the elevator's...
-
Show three ways to report Accounts Receivable of $50,000 and Allowance for Doubtful Accounts of $1,400 Cr on the balance sheet or in the related notes.
-
Consider the unadjusted trial balance of Burrows Landscaping at December 31, 2017, and the related month-end adjustment data: The following adjustments need to be made before the financial statements...
-
At the beginning of the year, a business had a liability to customers of $7,500 for unearned service revenue collected in advance. On May 31, the business received advance cash receipts of $20,000....
-
A company acquires equipment on January 10, 2005, at a cost of $42,000. Straight-line depreciation is used with a five-year life and $7,000 salvage value. On June 27, 2006, the company sells this...
-
hsteban Co. owns a machine that costs $38,400 with accumulated depreciation of $20,400. Esteban exchanges the machine for a similar but newer model that has a market value of $48,000. Record the...
-
Eastman Company reports the following ($ millions): net sales of $13,557 for 2005 and $12,670 for 2004; end-of-year total assets of $14,968 for 2005 and $18,810 for 2004. Compute its total asset...
Study smarter with the SolutionInn App