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Advanced Financial Accounting

1. Jai Ltd is taken over by Ray Ltd. All the assets & liabilities are taken over at book value. Ray Ltd is issuing 5 equity shares for 2 shares held at Rs 10 each to Jai Ltd in settlement of purchase consideration. Identify the method of Purchase consideration & compute it. Discuss the entries to be passed in the books of Ray Ltd. Following is the Balance sheet of Jai & Ray Ltd as on 31st March, 2022. (10 Marks) – 500 Words

Liabilities Jai Ltd  (RS)Ray Ltd  (RS)Assets Jai Ltd  (RS)Ray Ltd   (Rs)
Equity share Capital 200000 600000 Land & building 300000 500000
Pref.share capital   250000100000 Machinery 100000 200000
Creditors 50000 100000 Debtors 40000 50000
Cash 60000 50000
Total 500000 800000 Total 500000 800000

2. The Stores of Xeno Ltd showing the information of receipts & issues of materials during the month of march.

DateParticularsQuantityRate
March 03Received200010
March 10Received50015
March 15Issued1000
March 20Issued500

Explain the concept of LIFO Method & weighted Average method. What will be the closing inventory if the Xeno Ltd using perpetual inventory under both the method & interprete on it. (10 Marks) – 500 Words

3. a. Shilpa & Reena are partners in Tech firm sharing profits & losses in the ratio of 5:3. They admitted Gita as a new partner for 1/5 of share in the firm’s future profits. Calculate the new profit sharing ratio of Shilpa, Reena & Gita & compute howmuch Shilpa & Reena need to sacrifice their share to give Gita’s share. (5 Marks) – 400 Words

3. b. Arvind, Rahul & sheela are partners of a firm sharing profits & losses in the ratio of 3;2;1.The profit earned during the year is Rs 30000. Interest charged on drawings of partner is RS 500, RS200, RS 100 & interest paid on capital @ 10% p.a & commission paid to sheela for year Rs100. Compute the residual profit of each partner (5 Marks) – 400 Words