Advertisement

HindustanTimes Wed,16 Apr 2014
Mind the accounts
Nitin Sharma, Hindustan Times
New Delhi, February 26, 2013
First Published: 16:33 IST(26/2/2013)
Last Updated: 16:31 IST(28/2/2013)

Accountancy is a highly conceptual topic. Understanding the formats and standards are critical for getting the final outcome right. Let’s take up three questions to see what should be kept in mind while approaching questions in accountancy.



Calculate interest on capitals of X and Y if interest on capital is 5% per annum, taking into consideration the given balance sheet

Balance sheet as on March 31, 2012

image1

During the year the drawings of X and Y were Rs. 16,000 and Rs. 8,000, respectively. Profits for the year 2011-12 were Rs. 15,000.

The above question is a part of a very important chapter 'Fundamentals of a Partner' in Class 12. The concept clarity in the above question will help students answer higher weightage, long-answer format questions. There are two areas where a student gets confused in questions like these. First, the student tries to calculate the interest on capital directly and second, s/he gets confused with the meaning of the values given in and outside the balance sheet. The student first needs to find the opening capital in order to get to the interest on capital calculations. Moreover, the student needs to focus on the fact that both drawings and profit appear in the balance sheet as well, so the differential amount will only be considered and not the only amount which is given outside the balance sheet.


X and Y are partners sharing profits and losses in the ratio of 5:3. X surrenders of his share and Y surrenders from his share in favour of Z, a new partner. Calculate the new profit-sharing ratio

In this question, the examiner is looking at the amount of attention a student is paying to what is written in the question. Most students start to calculate the new profit-sharing ratio directly, which leads to the entire answer being wrong. Pay attention to the language, when party X in the above question is surrendering of his share, that means the student needs to first calculate the sacrificing ratio and then the new profit sharing ratio; whereas the party Y is surrendering from his share, which implies that the sacrifice has already been taken care of and the student just needs to calculate the new profit-sharing ratio.

X Ltd forfeited 300 shares of Ram who applied for 500 shares on account of non-payment of allotment money Rs. 5 (including Rs. 2 as premium) and first call of Rs. 3. He paid  only application money @ Rs. 2. Of these, 150 shares were re-issued to Mohan for Rs. 8 per share fully paid up Rs. 10.

The chapter Shares in Accountancy carries 18 marks of the total in the board examination. In questions like the one given above, the student in most cases forgets to calculate the excess application money received. Hence, to answer such questions correctly, the student first needs to calculate the excess application money received, which is adjusted in the allotment money.

(The author is head, department of accountancy, HT Studymate)

cbseboards

comment Note: By posting your comments here you agree to the terms and conditions of www.hindustantimes.com
blog comments powered by Disqus
Advertisement
edu-news

Bridge School, Northwestern University tie up for courses

Bridge School, Northwestern University
Bridge School of Management, a part of HT Media Ltd, has entered into a joint venture with the US-based Northwestern University School of Continuing Studies to deliver innovative blended online and in-person professional certificate programmes in India.
HTEducation Alerts

Forest Research Institute, Dehradun

Eligibility: Students with a ­bachelor’s degree in science with at least one of the subject botany, chemistry, geology, ­mathematics, physics, zoology are eligible to apply. Those with a bachelor’s degree in ­agriculture or forestry may also apply. Candidates who are in the final year of their BSc/MSc are also eligible.

KC Mahindra Scholarships 2014

KC Mahindra Education Trust will offer interest-free loan ­scholarships to Indian nationals for postgraduate studies abroad in various fields. The maximum amount for the scholarship will be Rs. 2 lakh per scholar, except for the three KC Mahindra fellow scholarships for which the ­maximum amount will be Rs. 8 lakhs per scholar.
Advertisement
Copyright © 2014 HT Media Limited. All Rights Reserved