Case Study Questions

XYZ Ltd. operates in the FMCG sector in the South Indian market. To expand into Northern India, the company raises an additional capital of $\text{Rs. }20,00,000$. It raises $\text{Rs. }12,00,000$ by issuing $10\%$ Debentures of $\text{Rs. }100$ each at a discount of $10\%$, redeemable after $6$ years. The remaining funds are raised by issuing perpetual $5\%$ Debentures of $\text{Rs. }8,00,000$ of $\text{Rs. }100$ each at a $15\%$ premium. After six years of successful operations, the company takes a loan of $\text{Rs. }5,00,000$ from PNB, pledging $5\%$ Debentures of $\text{Rs. }8,00,000$ as collateral security. The loan is fully repaid within two years.How are the $10\%$ debentures (repayable after $6$ years) classified based on their redemption terms?

XYZ Ltd. operates in the FMCG sector in the South Indian market. To expand into Northern India, the company raises an additional capital of $\text{Rs. }20,00,000$. It raises $\text{Rs. }12,00,000$ by issuing $10\%$ Debentures of $\text{Rs. }100$ each at a discount of $10\%$, redeemable after $6$ years. The remaining funds are raised by issuing perpetual $5\%$ Debentures of $\text{Rs. }8,00,000$ of $\text{Rs. }100$ each at a $15\%$ premium. After six years of successful operations, the company takes a loan of $\text{Rs. }5,00,000$ from PNB, pledging $5\%$ Debentures of $\text{Rs. }8,00,000$ as collateral security. The loan is fully repaid within two years.What are debentures that are perpetual in nature and have no fixed maturity date for repayment called?

XYZ Ltd. operates in the FMCG sector in the South Indian market. To expand into Northern India, the company raises an additional capital of $\text{Rs. }20,00,000$. It raises $\text{Rs. }12,00,000$ by issuing $10\%$ Debentures of $\text{Rs. }100$ each at a discount of $10\%$, redeemable after $6$ years. The remaining funds are raised by issuing perpetual $5\%$ Debentures of $\text{Rs. }8,00,000$ of $\text{Rs. }100$ each at a $15\%$ premium. After six years of successful operations, the company takes a loan of $\text{Rs. }5,00,000$ from PNB, pledging $5\%$ Debentures of $\text{Rs. }8,00,000$ as collateral security. The loan is fully repaid within two years.The $5\%$ debentures of $\text{Rs. }8,00,000$ ($\text{Rs. }100$ face value) were issued at a $15\%$ premium. The payment terms are $\text{Rs. }25$ on application, $\text{Rs. }50$ on allotment, and $\text{Rs. }40$ on the first and final call. Calculate the total amount credited to the "Securities Premium Account".

Amrita and Kalyani are partners sharing profits in the ratio of $3:2$. They decide to expand the business by admitting Suraj as a new partner for a $\frac{1}{4}\text{th}$ share. Suraj's share of premium for goodwill is valued at $\text{Rs. }90,000$, which he pays to compensate Amrita and Kalyani in an agreed ratio of $1:4$.The firm's books provide the following information on that date:

The claim against the Workmen Compensation Fund is determined to be $\text{Rs. }2,00,000$, and an existing goodwill balance appears in the books at $\text{Rs. }60,000$.What journal entry must be passed to write off the existing goodwill appearing in the books?

XYZ Ltd. operates in the FMCG sector in the South Indian market. To expand into Northern India, the company raises an additional capital of $\text{Rs. }20,00,000$. It raises $\text{Rs. }12,00,000$ by issuing $10\%$ Debentures of $\text{Rs. }100$ each at a discount of $10\%$, redeemable after $6$ years. The remaining funds are raised by issuing perpetual $5\%$ Debentures of $\text{Rs. }8,00,000$ of $\text{Rs. }100$ each at a $15\%$ premium. After six years of successful operations, the company takes a loan of $\text{Rs. }5,00,000$ from PNB, pledging $5\%$ Debentures of $\text{Rs. }8,00,000$ as collateral security. The loan is fully repaid within two years.When issuing the $10\%$ debentures of $\text{Rs. }12,00,000$ at a $10\%$ discount, what amount should be debited to the "Discount on Issue of Debentures A/c" if all money is received in a single installment?

Amrita and Kalyani are partners sharing profits in the ratio of $3:2$. They decide to expand the business by admitting Suraj as a new partner for a $\frac{1}{4}\text{th}$ share. Suraj's share of premium for goodwill is valued at $\text{Rs. }90,000$, which he pays to compensate Amrita and Kalyani in an agreed ratio of $1:4$.The firm's books provide the following information on that date:

The claim against the Workmen Compensation Fund is determined to be $\text{Rs. }2,00,000$, and an existing goodwill balance appears in the books at $\text{Rs. }60,000$.What is Amrita's share in the unallocated balance of the Workmen Compensation Fund?

XYZ Ltd. operates in the FMCG sector in the South Indian market. To expand into Northern India, the company raises an additional capital of $\text{Rs. }20,00,000$. It raises $\text{Rs. }12,00,000$ by issuing $10\%$ Debentures of $\text{Rs. }100$ each at a discount of $10\%$, redeemable after $6$ years. The remaining funds are raised by issuing perpetual $5\%$ Debentures of $\text{Rs. }8,00,000$ of $\text{Rs. }100$ each at a $15\%$ premium. After six years of successful operations, the company takes a loan of $\text{Rs. }5,00,000$ from PNB, pledging $5\%$ Debentures of $\text{Rs. }8,00,000$ as collateral security. The loan is fully repaid within two years.When a company records the issue of debentures as collateral security using the journal entry method, what amount should be debited to the "Debenture Suspense Account"?

Amrita and Kalyani are partners sharing profits in the ratio of $3:2$. They decide to expand the business by admitting Suraj as a new partner for a $\frac{1}{4}\text{th}$ share. Suraj's share of premium for goodwill is valued at $\text{Rs. }90,000$, which he pays to compensate Amrita and Kalyani in an agreed ratio of $1:4$.The firm's books provide the following information on that date:

The claim against the Workmen Compensation Fund is determined to be $\text{Rs. }2,00,000$, and an existing goodwill balance appears in the books at $\text{Rs. }60,000$.How will the premium for goodwill brought in by Suraj be distributed between Amrita and Kalyani?

Amrita and Kalyani are partners sharing profits in the ratio of $3:2$. They decide to expand the business by admitting Suraj as a new partner for a $\frac{1}{4}\text{th}$ share. Suraj's share of premium for goodwill is valued at $\text{Rs. }90,000$, which he pays to compensate Amrita and Kalyani in an agreed ratio of $1:4$.The firm's books provide the following information on that date:

The claim against the Workmen Compensation Fund is determined to be $\text{Rs. }2,00,000$, and an existing goodwill balance appears in the books at $\text{Rs. }60,000$.Calculate the respective shares of Amrita and Kalyani in the revaluation profit.

Amrita and Kalyani are partners sharing profits in the ratio of $3:2$. They decide to expand the business by admitting Suraj as a new partner for a $\frac{1}{4}\text{th}$ share. Suraj's share of premium for goodwill is valued at $\text{Rs. }90,000$, which he pays to compensate Amrita and Kalyani in an agreed ratio of $1:4$.The firm's books provide the following information on that date:
$$\begin{array}{lrr}\text{Particulars}& \text{Book Value (Rs.)}& \text{Revalued Figure (Rs.)}\\ \text{Machinery}& 25,00,000& 27,00,000\\ \text{Land}& 10,00,000& 50,00,000\\ \text{Computers}& 2,50,000& 50,000\\ \text{Workmen Compensation Fund}& 5,00,000& -\end{array}$$
The claim against the Workmen Compensation Fund is determined to be $\text{Rs. }2,00,000$, and an existing goodwill balance appears in the books at $\text{Rs. }60,000$.How will the premium for goodwill brought in by Suraj be distributed between Amrita and Kalyani?

Amrita and Kalyani are partners sharing profits in the ratio of $3:2$. They decide to expand the business by admitting Suraj as a new partner for a $\frac{1}{4}\text{th}$ share. Suraj's share of premium for goodwill is valued at $\text{Rs. }90,000$, which he pays to compensate Amrita and Kalyani in an agreed ratio of $1:4$.The firm's books provide the following information on that date:
$$\begin{array}{lrr}\text{Particulars}& \text{Book Value (Rs.)}& \text{Revalued Figure (Rs.)}\\ \text{Machinery}& 25,00,000& 27,00,000\\ \text{Land}& 10,00,000& 50,00,000\\ \text{Computers}& 2,50,000& 50,000\\ \text{Workmen Compensation Fund}& 5,00,000& -\end{array}$$
The claim against the Workmen Compensation Fund is determined to be $\text{Rs. }2,00,000$, and an existing goodwill balance appears in the books at $\text{Rs. }60,000$.Calculate the respective shares of Amrita and Kalyani in the revaluation profit.

Amrita and Kalyani are partners sharing profits in the ratio of $3:2$. They decide to expand the business by admitting Suraj as a new partner for a $\frac{1}{4}\text{th}$ share. Suraj's share of premium for goodwill is valued at $\text{Rs. }90,000$, which he pays to compensate Amrita and Kalyani in an agreed ratio of $1:4$.The firm's books provide the following information on that date:
$$\begin{array}{lrr}\text{Particulars}& \text{Book Value (Rs.)}& \text{Revalued Figure (Rs.)}\\ \text{Machinery}& 25,00,000& 27,00,000\\ \text{Land}& 10,00,000& 50,00,000\\ \text{Computers}& 2,50,000& 50,000\\ \text{Workmen Compensation Fund}& 5,00,000& -\end{array}$$
The claim against the Workmen Compensation Fund is determined to be $\text{Rs. }2,00,000$, and an existing goodwill balance appears in the books at $\text{Rs. }60,000$.What is Amrita's share in the unallocated balance of the Workmen Compensation Fund?

Amrita and Kalyani are partners sharing profits in the ratio of $3:2$. They decide to expand the business by admitting Suraj as a new partner for a $\frac{1}{4}\text{th}$ share. Suraj's share of premium for goodwill is valued at $\text{Rs. }90,000$, which he pays to compensate Amrita and Kalyani in an agreed ratio of $1:4$.The firm's books provide the following information on that date:
$$\begin{array}{lrr}\text{Particulars}& \text{Book Value (Rs.)}& \text{Revalued Figure (Rs.)}\\ \text{Machinery}& 25,00,000& 27,00,000\\ \text{Land}& 10,00,000& 50,00,000\\ \text{Computers}& 2,50,000& 50,000\\ \text{Workmen Compensation Fund}& 5,00,000& -\end{array}$$
The claim against the Workmen Compensation Fund is determined to be $\text{Rs. }2,00,000$, and an existing goodwill balance appears in the books at $\text{Rs. }60,000$.What journal entry must be passed to write off the existing goodwill appearing in the books?