DR.

BHIM RAO AMBEDKAR COLLEGE

TIME: 45 MIN.

CLASS TEST

SET-A MM: 10/20

Q1) Kamptee Ltd. agree to sell its 5 machines costing Rs.50, 000 each to Kohima Ltd. on 1 st January, 2012 by hire
purchase agreement. The payment was to be as follows: 10% of cash price as down payment and 25% of cash price
as installment at 31st December every year for four years.
Payment due on 31st December, 2014 could not be made and hence the machinery seized by the Kamptee Ltd. But
after negotiation the Kohima Ltd. was allowed to keep 3 machineries on the condition that the values of the other
two machineries would be adjusted against the amount due by the charging depreciation @ 20% p.a. on written
down value method. Kohima Ltd. closed its books on 31 st December each year and charge depreciation with original
cost method @ 15% p.a. Kamptee Ltd. spent Rs. 15,000 on getting the repossessed machinery repaired and sold
them for Rs. 1,90,000. You are required to prepare necessary ledger accounts in the books of Kamptee Ltd. and
Kohima Ltd.
Q2) A, B, C and D were partner sharing profits and loss in the ratio of 3:3:2:2 respectively. The following is their
balance sheet as on 31st March, 2016.
Liabilities
Creditors
Biils Payable
As Loan A/C
Partners Capital Account
A
B

Amount

4,00,000
3,00,000

Assets
Cash
Debtors
Less: Reserve
Stock
Furniture
Building
Partners Capital
C
D

53,50,000
It was decided to dissolve the firm with effect from 31st March, 2016 and

Amount
5,00,000
3,20,000
(10,000)

3,10,000
12,00,000
9,00,000
20,00,000
1,20,000
3,20,000
53,50,000

B was appointed to liquidate the assets and pay to the creditors. He was entitled to recive 5% commission
on the amount finally paid to other partners including loans, if any.
Commission payable to B is not to be treated as firms expense. He was to bear the expenses of realization
which amounted to Rs. 5,000.
The furniture realized Rs. 6,00,000, building Rs. 19,70,000, stock Rs. 10,00,000 and debtor Rs.1,50,000.
Creditors were paid in full and bills payables were settled at Rs. 7,50,000.
In addition a sum of Rs. 50,000 was also paid to staff on retrenchment in full settlement of their claims.
D was insolvent and the partners accepted Rs. 74,000 from his estate in settlement.
Applying the rule of Garner VS Murray, prepare necessary ledger accounts.

Q3) Anurag, Bajaj and Prerna trade in partnership sharing profits and losses in proportion of 3:2:1. They decide to
dissolve the firm with effect from January 1, 2013 when the firms balance sheet stood as follows:
Liabilities
Capital Accounts
Anurag
Bajaj
Prerna
General Reserve
Sundry Creditors
Bank Overdraft (Unsecured)

Amount

Assets
Land and Buildings
Furniture and Fittings
Plant and Machinery
Stock in Trade

Amount
80,000
12,000
30,000
18,000

54,000
40,000
25,000
6,000
Sundry Debtors
60,000
90,000
Investments
35,000
30,000
Cash and Bank Balances
10,000
2,45,000
2,45,000
The assets are being realized gradually. After meeting the expenses of realization, the first installment of realization
(including cash and bank balances) fetches Rs. 75,000; the second Rs. 32,000; the third Rs. 60,000 and fourth Rs.
63,000.
If the distribution among partners is to be made after each installment of realization, as far as possible, prepare a
statement showing the distribution to partners at each installment by applying the Surplus Capital Method.