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Value based questions for the subject Accountancy 2012-13
Dear Students
Every question of Accountancy signifies one or the other value. Business proceeds ahead with certain
values which are quantified by Accountancy. Accountancy is just not figures. On one hand it has intrinsic
values and on the other there are moral values imbibed into it. Accounting inherits the following values
(suggestive not exhaustive )
Integrity
Professional competence with due care
Commitment to excellence
Transparency
Objectivity and independence
Confidentiality
Communicating the material information
Analysis, problem solving and critical thinking
Admitting errors and rectifying them
Efficient utilization of resources
Commitment to pay its liabilities in time
Truthfulness
Equality
Fairness
Socially responsible
Empathy
While learning Accountancy it is observed that the child remains upto a level of figure or intrinsic values
only. There is a need that the child also appreciates and learns the moral values associated with these
figures, imbibes the same in his day to day life and carries the same to his professional life to become a
responsible and committed citizen of INDIA. In the following questions an attempt has been made to
bring out these values for the teaching learning community to ponder and practice.
Values are the significant and fundamental dimensions of human life and indicate how one adheres,
attaches and reacts in life situations or circumstances. They are the blue prints or action plan which
orient and decide the thinking, action feelings and behavior itself.
Values does not mean going back to the superstitions but to bring in harmony with the present
social and cultural conditions,which are acceptable to the society.
Values cannot be scientifically investigated or proven
Values influence the attitude and behavior ofA person through practices
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Accountability – Responsibility of our actions that influence the lives of our customers and
fellow workers.
Balance – Maintaining Healthy life and work balance for workers.
Collaboration – Collaborating within and outside the company to give the best.
Commitment – Commitment to roll great product, service and other initiatives that impact lives
both within and outside the organization.
Community – A sense of responsibility and contribution to society that define our existence.
Consistency – Be consistent in offering the best for wonderful experience.
Diversity – Respecting the diversity and giving the best of the composition.
Efficiency – Being efficient and effective in our approach to give best solution each time.
Empowerment – Empowering the employees to take initiative and give the best.
Fun – Having fun and celebrating small successes in our journey to achieve big.
Innovation – To come out with new creative ideas that have the potential to change the world.
Integrity – To act with honesty and integrity without compromising the truth.
Leadership – The courage to lead from front and shape future.
Ownership – Taking ownership of the company and customer success.
Passion - Putting the heart and mind in the work to get the best.
Quality - Giving the best and unmatched results for all round satisfaction.
Respect - Giving due respect to self and others and maintain the environment of team work and
growth.
Risk Taking – Encouraging self and others to take risk for a bright future.
Safety - Ensuring the safety of people and making sure to give them trouble free experience.
Service Excellence – Giving the best and world class service and achieving excellence each
passing day.
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PARTNERSHIP – FUNDAMENTALS
1. A,B and C are partners sharing profits in the ratio 3:2:1 and contribute capital 1,00,000;
80,000 and 60,000 respectively. Profit before adjustments is 84,000. Interest on capital is to
be provided @ 10% p.a. Since C has to take care of his physically challenged brother, his share of
profit should not be less than 15,000. A and B have agreed to bear the deficiency.
Value Based
What values are reflected on the part of A and B that they are ready to sacrifice their share to
meet the deficiency of guaranteed profit?
2. X,Y and Z are partners with 72,000, 80,000 and 1,00,000 as their capitals respectively. The
profit for the year ending March 31,2012 was 7,20,000. Before distributing profits they
donated 10% of profits to a ‘Non-Govt. organisation’ as charity for welfare of educationally
backward section of the society. Out of the remaining profit, 4,00,000 is divisible as 5:3:2 ratio
and the remaining is to be divided amongst them equally.
Identify the value followed by the partnership firm of X,Y and Z. Prepare Profit and Loss
Appropriation Account and Partner’s Capital Account.
3. Aakash and Bhola entered into partnership on January 1,2012 contributing 1,20,000 and
1,60,000 as capitals respectively. Their partnership firm started the business of manufacturing
shoes. They decided to donate 30% of the shoes produced for school going children. They share
profits in the ratio of 7:3. The profits for the year were 96,000.
Prepare Profit and Loss Appropriation Account and the Partner’s Capital Accounts. Also identify
the value involved in this question.
4. Renu and Reshma shared profits as 7:3. Renu want to give admission to her friend Rehana as a
new partner. Reshma agrees with this decision of Renu. Rehana is a physically challenged lady
and admitted with a ¼ th share in profits. Renu and Reshma gave her a guarantee that her share
of profit will never be less than 1,20,000 p.a., the profits for the last two years ended March
31, 2011 and March 31, 2012 were 1,60,000 and 2,40,000 respectively. Identify the human
value involved in this case and Profit and Loss Appropriation Account for the two years.
5. Ramesh and Gurmeet are two friends belonging to Hindu and Sikh religion respectively. They
started a business of wire manufacturing in the form of a partnership firm. They know that the
factory of wire manufacturing pollutes the environment. Therefore there are two options
available before them. First option is that the factory can be opened in rural area where local
residents are poor and illiterate. Second option is that an advanced pollution control plant can
be installed in their factory to control the pollution. They decided to choose the second option
which involves an additional cost of 2,00,000. To arrange this amount, they admitted their rich
friend John as a new partner for equal share in the future profits. John brought 2,50,000 as his
share of capital. Ramesh and Gurmeet gave him a guarantee that his share of profit will not be
less than 60,000 p.a. At the end of first year the firm earns a profit of 1,50,000.
Mention the value involved in this question. Write the effects of choosing option available
before Ramesh and Gurmeet. Prepare Profit and Loss Appropriation Account for the first year.
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6. A,B and C are in a partnership. A is appointed for carrying on the business of the firm by the
other partners. A has decided to purchase the goods from a firm in which his wife and his son
are partners at a double rate than the prevailing market rate without disclosing this fact to
others partners of the firm.
State which values have been violated by A by not disclosing this information to B and C.
7. A,B and C are partners in a firm. C used firm’s money to buy shares without disclosing it other
partners. Which value C is violating and what will be the treatment of profit earned by C?
RECONSTITUTION OF PARTNERSHIP
8. A & B are partners sharing profits in the ratio 1:1. C wants to join their firm as it enjoys a good
reputation in the industry. A and B agreed to admit him for 1/5 th share in profits. For this, they
asked him to pay his share of goodwill in cash which he was unable to bring in. A and B agreed
for the same.
What values are being emphasised by the firm at the time of C’s admission?
9. After completing MBA, Arun and Radha want to start a new business but they don’t have
sufficient capital. They contacted their common friend Sita, a rich lady with poor eyesight. They
decided to form a partnership firm with a capital of 25,00,000 with a ratio of 80% by Sita, 10%
each by Arun and Radha respectively. The partnership deed provided as follows :
Interest on capital @ 12% p.a
Salary to active partners Arun and Radha @ 9,000 p.m.
The firm earned a net profit of 9,66,000 during the year. Sita decided to donate half of her
profits to a school for differently abled children.
State which values are being reflected in the above case and also prepare Profit and Loss
appropriation a/c for the year.
10. A and B are partners in a firm having a workmen compensation reserve of 10,00,000. A
worker, Rohan died in an accident while working for the firm. The firm paid 5,00,000 as
compensation to his family and offered a job to his wife and also arranged for the education of
his son. State which values are being reflected in the above case and also show the treatment of
workmen compensation reserve if A and B now decide to change their profit sharing ratio from
3:1 to equal ratio.
11. A and B are partners in a firm. A manages the business as a representative of firm. For
execution of sales order to a valuable customer, A spent Rs. 5,000 for quick delivery. B is not
agreeing to reimburse the above expenses from the firm’s accounts. Explain the treatment of
above expense and describe which value is violated by the partners.
12. What are the values involved in the formation of a partnership firm?
14. In the absence of partnership deed, interest on Advances / Loan by a partner is to be paid @ 6%
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p.a. What value is depicted in the provision of Indian Partnership Act, 1932?
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15. XYZ Cycles Ltd., a manufacturer of cycles and tri-cycles has decided to donate 100 tri-cycles
worthRs. 3,00,000 to differently abled children in the CWSN (Children with special needs)
assessment camp organized by Directorate of Education, Delhi on 3rd December on the occasion
of “World Disabled Day”
State the values that are being reflected in the above case.
16. A,B and C were partners in a firm. A died in a road accident. A’s family has no other source of
income. B and C has decided to admit A’s son D, a minor, in the partnership firm.. Firm
guaranteed that his share in profits will not be less than Rs.1,00,000 in a year.
State the values that are being reflected in the above case.
17. ABC Ltd., a manufacturer of very popular liquid soap, has decided to supply its popular product
‘Safe Hand Wash’ worth Rs.50,000 to 25 schools in the different areas of the city on the
occasion of ‘Global Handwash Day’ on the 15th October at free of cost.
State the values that are being reflected in the above case.
18. Sita and Geeta are working as marketing executives in a MNC dealing in cosmetic products.
After working for 5 years in MNC, both of them realized that they should start their own
business, but both of them individually don’t have sufficient funds for starting the business.
Therefore, they have decided to form a partnership firm with equal amount of capital. Both
have agreed that they will actively participate in the operation of the business and to share the
profits or losses of the business equally. They have decided to appoint Sangeeta, their common
friend , as a manager.
State the values that are being reflected in the above case.
19. A, B and C are partners in a firm which deals in woollen garments. D who runs a NGO and also a
friend of C contacted him for supplying 1,000 woollen jackets for distributing among the
students of EWS (Economically Weaker Section ) of the society studying in a school for ‘out of
school children’ run under SSA program. D requested C to provide the jackets at the lowest
possible rate. C discussed the matter with the other partners of the firm and the firm decided to
provide required number of jackets at ‘No Profit No Loss’ to the NGO of D.
State the values that are being reflected in the above case.
20. Ram is a graduate in Business Administration. He tried very hard for a job but he didn’t get any
opportunity to work due to recession in the economy. Then he realized that he should start his
own business at the ground floor of his house lying vacant. Since he didn’t have sufficient funds
to invest in the business, he cannot start the business alone.
Ram contacted one of his friends Anuj and convinced him to start a business with him in
partnership. Anuj decided to invest in the business and to form a partnership with Ram and
wants to get the firm registered.
State the values that are being reflected in the above case.
.
21. A, B and C are partners in a firm having fixed capital of Rs.5 lacs, 3 lacs and 2 lacs respectively .
Firm earned profits of Rs. 1,50,000 during the year ending 31st March, 2011. These profits were
divided in capital ratio instead of 2:2:1.
Pass adjustment entry for the above and also state which value is being violated through their
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decision?
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22. Deepa and Shweta are friends and after completion of their study they started a business of
readymade Garments by constituting a partnership firm with a profit sharing ratio as 3:2
respectively. Their partnership firm earns huge profits during few years. They decided to award
a scholarship of Rs.10,000 p.a. for meritorious and economically weaker students. On January 1,
2012 they admit Joney, their manager as a new partner with 1/5th share in future profits. The
value of goodwill of the firm is Rs. 3,50,000 and Joney is not able to bring his share of goodwill in
cash. Joney is an expert in business management and he hailed from North-east of India. He
contributes Rs. 50,000 as his capital.
Identify the value is involved in this question and pass the journal entries on admission
of Joney.
23. Amar and Bashir are sharing profits in the ratio of 3:2 respectively. They admit their friend
Chandni with one fourth share in the future profits. Chandni belongs to economically weaker
section of the society and not able to bring her share of goodwill. Goodwill of the firm is valued
at Rs.20,000. Chandni contributes Rs.30,000 as her capital.
24. X and Y were partners in a firm sharing profits in the ratio of 3:2. On march 31, 2012, their
Balance Sheet was as follows:
Liabilities Assets
Sundry Creditors 1,00,000 Land & Building 2,00,000
Bills Payable 40,000 Machinery 1,60,000
Outstanding 20,000 Stock 2,00,000
Expenses Capital Debtors 80,000
Accounts: Cash 20,000
X
3,60,000 5,00,000
Y
1,40,000
6,60,000 6,60,000
On the above date, Z was admitted as a new partner in the firm for ¼ share in the profits on the
following terms:
Z will bring Rs. 2,40,000 for her capital and Rs.40,000 for her share of goodwill. Machinery was to be
depreciated by 10% and Land & Building was to be appreciated byRs. 60,000. A provision of 5% was to
be created for doubtful debts.
Prepare Revaluation Account, Partners ‘ Capital Accounts and the Balance Sheet of the new firm.
25.P,Q and R are partners sharing in the ratio 3:2:1. Q wanted to retire due to his ill health. But P and R
did not want Q to retire. They suggested that he could spend less time in business and bring his
daughter Radha ,who is a MBA graduate to be appointed as a manager to look after the business with a
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Identify the values have been taken in to consideration in the above decision?
26. A,B and C are partners in the ratio of 3:2:1.C wanted to retire . All the amount due to him was
calculated. There was Golden Peacock which they got as an award for the best dealer in the product,
they are dealing in some years ago. Until the date of retirement it was looked as an appreciation not as
an asset. A and B decided to treat the golden peacock as an asset and give C”s share to him. The golden
peacock valued on the date of retirement Rs 50,000.
27.K,M and P are partners sharing profits equally. M wanted to retire due to his ill health. K and P
accepted his request. In terms of the partnership deed the amount due to retiring partner will be settled
in three instalments . M requested K and P to pay the amount in lump sum as he needs it urgently to
undergo his by pass surgery. K and P accepted his request and decided to settle his amount of Rs
5,20,000. They raised a loan from bank for this purpose.
28.A ,B and C are partners sharing profits equally. On 1st August B died. According to the partnership
deed the deceased partner’s executor will be settled in 6 equal half-yearly instalments without any
interest. B ‘s wife accepted for the terms of the deed with the condition that she will be admitted as a
partner for an equal share. Other partners agreed for her representation.
29. A ,B and C are partners sharing profits in the ratio of 3:2:1. C died on 1st July, 2012. D, C’s son
requested A and B to admit him as a partner in place of his deceased father and the amount due
to his father can be treated as his capital. D is also of the view that he will be helpful to the other
partners in business by helping them in expansion process as he got his MBA from IIM. A and B
accepted the request of D. Which value has been fulfilled by A and B.
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Dissolution of Partnership Firms
30. Following is the Balance Sheet of X and Y, who share profits and losses in the ratio of 4:1, as
at 31st March, 2011:
Balance Sheet As on 31st March, 2011
Liabilities Rs. Assets Rs.
Sundry Creditors 8,000 Bank 20,000
Debtors 17,000
Bank Overdraft 6,000 Less: Provision(2,000) 15,000
X’s Wife Loan 8,000 Stock 15,000
Y’s Loan 3,000 Investments 25,000
Investment Buildings 25,000
Fluctuation Fund 5,000 Goodwill 10,000
Capital X 50,000 Profit and Loss A/c 10,000
Y 40,000
------------
----------- 1,20,000
1,20,000
The firm was dissolved on the above date and the following arrangements were decided upon:
(i) Y is authorized to sell the assets of the firm and will get a fixed amount of Rs.2,000 for his
work.
(ii) X agreed to pay off his wife’s loan.
(iii) Debtors of Rs. 5,000 proved bad.
(iv) Y decided to sell the building for Rs. 9,000 to his brother. Market value of the building was
Rs.80,000.
(v) Others assets realized _ Investments 20% less; and Goodwill at 60%.
(vi) One of the creditors for ,000 was paid only ,000.
(vii) Y took over part of Stock at ,000 being 20% less than the book value).
Balance stock realized 50%.
(viii) Reali ation expenses amounted to ,000. State which value are being violated in the above
question and also prepare Realization A/c.
31. Shiksha India Ltd. Issues 1,00,000 shares of Rs.10 each payable Rs.5 on application, Rs.3 on
allotment and Rs.2 on first and final call. Public applied for 1,40,000 shares and the company
made the allotment to all the applicants on pro-rata basis.
Identify the value involved in the decision of company regarding allotment of shares.
32. Rehan Ltd. Issue 50,000 shares of Rs.10 each payable Rs.4 on application and Rs.6 on
allotment. According to the SEBI guidelines, a minimum of the net offer should be reserved
for small investors. Therefore, out of these 50,000 shares, 50% portion is reserved for retail
(small) investors. Issue has been fully subscribed . Identify the value involved.
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33. XYZ limited is offering 3,00,000 equity shares @ an issue price of Rs.50 when market price is
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Rs.100, to its employees as part of incentives. Nominal value of the share is Rs.10. What
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value/principle do you think that XYZ ltd is adopting towards its employees?
34.Ramkay ltd. has a nominal capital of Rs.12 crores . Securities premium account shows a
balance of `3 crores. The company does not want to carry the balance in securities premium
account.
i. What are ways can the company make use of of the amount available in securities
premium account?
ii. Suggest one best way of using securities premium account that will maximise the wealth
of the share holders.
iii. Identify the value createdby the company by doing so?
35.What do you mean by rights issue? What value do you think the company is trying to achieve
by this type of issue?
36. Autumn ltd. is registered with capital of Rs.70 lakhs divided into equity share of Rs.100 each. The
companyoffered for public subscription 1,00,000 shares of Rs.100 each. Issue was oversubscribed by
50,000 shares.The Company allotted the shares on pro-rata basis to all applicants.
37.Vasanth& Co is a public ltd. company. It does not have its own articles of association. The company
offered for public subscription of 10,000 shares of Rs.10 each. All money was duly received except for
the call money of Rs.3 per share from Arun, holder of 100 shares, money. Though the company is
deemed to have adopted TABLE A the company does not want to charge interest on calls in arrears.
Why in your view that the company does not want to collect interest on calls in arrears. What
justification can the company give?
38.Board of Directors of Pearl Global Industries Ltd wants to start a new unit at a remote area Assam.
The new unit can be started in the form of labour intensive with a capital of Rs 5 crore or in the form of
automatic plant with a capital of Rs.30 crore. Directors decided to start this unit in the form of labour
intensive for generation of employment opportunities in remote areas. Therefore thecompany
purchased land for Rs.2,00,00,000 and machinery for Rs.3,00,00,000. In consideration of these assets
company issues 13% Debentures at par.
Identify the values involves in the decision of directors of pearl Global Ltd. and Journalize the
transactions.
39.According to the SEBI guidelines, Debentures can be secured by a charge on the assets of the
company . A ‘Debenture Trust Deed’ is entered into between the company and the debenture holders.
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40. A Ltd. issued Rs. 10 lacs 9% debentures of Rs.100 each on 1st April, 2008 redeemable in five equal
instalments through draw of lots beginning from the year ending 31st march 2011. Assume that the
company has transferred sufficient amount to debenture redemption reserve.
State the values symbolized by redeeming the debentures through draw of lots.
42.INFRA Developers Ltd., ( an infrastructure company) issued 5, 00,000 8% Debentures of Rs. 100
each on April 1, 2008 redeemable on April 1, 2012. How much amount of Debenture Redemption
Reserve is required before the redemption of debentures?
Which value SEBI wants to promote by having special provision for Infrastructure Company?
43.. During the time of recession, Shiva Ltd., got a good deal with a company located in Sweden. The
contract will result in more amounts of profit and foreign exchange. The company already enjoyed a
good reputation in the industry. It decided to increase its capacity utilization and hence was in need of
funds.
On 1st April 2012, after careful analysis, the company offered 10,000,10% convertible debentures of the
face value of Rs.100 each at a discount of 10%. These debentures are convertible into equity shares of
Rs.100 each at a premium of 10%. At present, the return on investment of Shiva Ltd., is 25%. At the time
of issue of debentures the prevailing interest rate was 8%. The issue was successfully completed.
Identify the values which were considered by the board of directors while issuing the debenture
44. Parvathy Ltd., engaged in the production of Ayurvedic products. The capital structure of the
company is as follows.
In order to expand the business activities, the company issued 25,000 8% Debentures of Rs.100 each at
par on 1st January 2010 which are convertible into equity shares of Rs.100 each at a discount of 10%. The
return on investment of the company is 10%.
On the above date the debentures were redeemed. For the purpose of redemption the company issued
5,000 equity shares of Rs.100 each at par to the public.
46. A Ltd., wanted to expand its business. The current rate of ROI is 25%. The prevailing rate of interest
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is 10%. The projected ROI after the expansion of the business is 30%. A Ltd., enjoys a good reputation in
the industry. After careful analysis, the Board of Directors decided to raise additional funds through the
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issue of Debentures. Accordingly on 1.1.2012 the company issues 10,000 10% Debentures of Rs.100
each redeemable at a premium of 10% after 4 years.
Identify the values considered by the Board of Directors from the point of view of shareholders.
47. Jay Ltd., has the following balances in its balance sheet.
The company decided to redeem its 12% Debentures at a premium of 10%. Jay Ltd., utilized the
securities premium for the purpose of redeeming the debentures and writing off the under writing
commission.
48. Borrowing cost is in par with Rate of return.Still companies prefer to raise funds through
borrowings and not through Share Capital. Identify the value followed by the company in raising
funds.
49. Government of India permitted NABARD to issue BhavishyaNirman Bond which channelized
funds for priority areas of agriculture and rural development. The bank,accordingly has launched
bonds of Rs.20,000/- per bond. The tenure of bonds is 10 years; however ,investors will have
option to sell the bonds. The bonds have been rated as AAA by CRISIl and CARE. No tax will be
deducted at source.
50.A dealer of sewing machine in rural area wishes to purchase a number of sewing machines.
He has only Rs.5760 to invest and has space for 20 items. An electronic sewing machine costs
him Rs360 and manually operated sewing machine is Rs.240. He can sell an electronic sewing
machine at a profit of Rs.22 and manually operated sewing machine at a profit of Rs.18. Justify
the values to be promoted for the selection of manually operated machine.
51.By introducing debt in the capital structure shareholders are benefitted by getting more EPS,
when company is being winded up shareholders may lose the investment money.
52. The operating ratio of A Ltd; is 55% and that of B Ltd; is 65%. Which Company is performing
better and identify the value.
53. The Balance sheet of A ltd. showed Rs. 25 Lacs as Cash and Cash equivalents.Whereas its
working capital requirement is only Rs. 5Lacs on an average. Which value do you think is
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54.Prepare Comparative Statement from the following
31st March, 2007 31st March, 2008
55. Prepare a comparative income statement of X Ltd., with the help of the following
information and identify the value involved in it-
2011 2012
Calculate the Liquidity Ratio and Comment on the short-term financial position of the company.
Identify the values involved in this question.
57. From the following balance sheets of ABC Ltd., find out cash from operating activities only:
Particulars 31-3-2011 31-3-2012
EQUITY AND LIABILITIES
Shareholder’s Funds:
Equity Share Capital 30,000 35,000
Reserve and Surplus: 31-3-2011 31-3-2012
General Reserve 10,000 15,000
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Trade Payables 8,500 12 ,500
TOTAL 63,500 94,500
ASSETS:
Machinery 41,000 54,000
Less: Provision for Depreciation 9,000 13,000
32,000 41,000
Goodwill 10,000 8,000
10% Investment 3,000
8,000
Inventory 6,000 24,500
Cash and Bank 12,000 13,000
Discount and Debentures 500
TOTAL 63,500 94,500
*Bracket denotes negative balance.
Additional Information:
Debentures were issued on 31.3.2012.
Investments were made on 31.3.2012.
Identify the value involved in preparation of cash flow statement.
58. From the following Balance Sheets of Surya Roshni Ltd., as on 31st March 2011 and 2012,
prepare a statement of cash flow:
ASSETS:
Fixed Assets 2,00,000 5,00,000
Less: Accumulated Depreciation 30,000 48,000
1,70,000 4,52,000
Non-Current Investments 40,000 45,000
Inventory 1,50,000 2,00,000
2011 2012
Trade Receivables 1,76,000 56,000
Less: Provision for
Doubtful Debts 10,000 16,000
1,66,000 40,000 1,66,000 40,000
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TOTAL 6,40,000 9,67,000
Additional Information:
Dividend paid during the year 36,000
Investment costing 10,000 were sold at a profit at 40%
Fixed Assets Costing 20,000 (accumulated depreciation 8,000)
Were sold for 17,000
Additional debentures amounting to 50,000 were issued at par on 1st August 2011. Interest on
debentures has been paid regularly. Mention the values involved in it.
59. It is mandatory for a public ltd. Company to prepare the cash flow statement as per AS-3(revised).
Identify the value involved /followed by the company in preparing the statement .
60. When the company purchases an Asset and the vendors are settled by issue of shares and
debentures, such transactions are not recorded in the cash flow statement as such transactions results
in no flow of cash.Identify the value involved ?
61. identify any two positive values involved in preparation of cash flow statement.
62.Jamshedji Tata conceived an idea of formation of company in 1908 when East India Company was
ruling Indian Market. He selected hilly region bordering three states Jharkhand (the then part of Bihar),
Orissa and West Bengal. All states were thickly populated and under developed. Area he chose was rich
in Iron ore so he decided to develop Iron and Steel Industry. He wanted to tap unproductive savings of
public and Issued Capital of Rs. 5,00,000. Area was undeveloped so he decided to spend 10% of profits
every year for providing Infrastructure to employees. To begin with he provided them accommodation
and later he spent amount for schools, hospitals, development of playground and gardens and also
contributed in road construction. He also built temples, mosques and churches. Employees were
satisfied and worked hard as a result profit grew substantially 20% every year.More Industries were
floated by him. Which values lead him to this road of success. (Any FIVE)
63.Cadbury India Ltd; a Chocolate company launched a factory in Baddi a small town of Himachal
Pradesh. The workers who enter in factory have to wash their hands with sanitizer and wear overcoat,
cap and shoes which are sterilized every day for which company spends Rs. 3,00,000 per month. All
employees working in factory wear gloves and not allowed to touch directly either raw material or final
product. All employees irrespective of their positions have to take food in mess at the same place and
the same food . For this the company spends Rs. 4,00,000 per month. Which values are taken care of?
64.MinalKhopkar’s 80 year old mother needs immediate knee replacement surgery. But it cannot take
place as MS. Khopkar a resident of Pen in Maharastra’sRaigad district ,cannot access her account with
the Urban Bank Ltd though she has three fixed deposits for 20lakh because of Chairman’s involvement in
Bank Scam.The Bank operations were temporarily suspended.The Chairman allegedly responsible for
their sufferings was the mastermind of a Rs.758 crore scam in bank.Justify the customer value violated
by bank.Which value do you think is violated?
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ANSWERS/SOLUTION
1. Compassionate
Sacrificing nature
Contentment
Commitment
Caring & Sharing
Particulars Particulars
To charity to N.G.O. 72,000 By Net Profit 7,20,000
To profit Distributed
X 1,50,000 + 1,16,000 =2,66,000
Y 90,000 + 1,16,000 =2,06,000 6,48,000
7,20,000
Z 60,000 + 1,16,000 =1,76,000 7,20,000
2012 2011 By
March 3,38,000 2,86,000 2,76,000 April balanc 72,000 80,000
To 1,00,000
31 1 e b/d
Balance 2012 By P/L 2,66,000 2,06,000 1,76000
ec/d 2,86,000 2,76,000 Marc Approp 3,38,000 2,86,000 2,76,000
3,38,000
h 31 riation
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Profit and Loss Appropriation Account
Particulars Particulars
Bhola 2,88,000
9,60,000
9,60,000 9,60,000
3. Value involved:
(i) Good relations between persons of different religions.
(ii) Women empowerment
(iii) Welfare of differently abled persons.
(iv) Protection of the interest of differently abled
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For the Year ended on March 31, 2012
Particulars Particulars
4. Value involved:
(i) Good relations between different religions
(ii) National integration
(iii) Balanced Regional Development
(iv) Awareness about pollution control
(v) Use of advanced technology
5. As A is working on behalf of the other partners, it is his moral duty to work for the benefit of the
firm and not to earn any undisclosed profits. By ignoring the interests of the firm and favoring his
wife and son, A has violated the following values:
Honesty
Integrity
Truth
Breach of mutual trust
C will have to return firm’s money along with any profits earned.
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7. Values
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Sympathy
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Caring & Sharing
Dr. Cr.
Sita 240000
To Partner’s Salery
10. It is the right of A to get indemnified against the payment which he paid for the firms business. B
violated the following values:
Mutual trust and co-operation
Integrity
Truth
Acknowledgement
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11. Values
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Unity
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Team work
Pooling of resources
Efficient use of resources
Sharing & Caring
12. Values:
Transparency
Evidence
Awareness
Adherence to law
13. Values
Financial security
Fair return on Investment.
Team Spirit
Mutual trust
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Co-operation
Social Responsibility
20. It is the right of A to get indemnified against the payment which he paid for the firms business. B
violated the following values:
Mutual trust and co-operation
Integrity
Truth
Acknowledgement
mutual trust
honesty
Regional Integration
22. JOURNAL
Mutual Trust
Honesty
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Transparency
Solution
Particulars ` Particulars `
60,000 60,000
Particulars X Y Z Particulars X Y Z
Balance Sheet
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Liabilities ` Assets `
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Sundry Creditors 1,00,000 Land & Building 2,60,000
Bills Payable 40,000 Machinery 1,44,000
Outstanding Expenses 20,000 Stock 2,00,000
Salery Outstanding 10,000 Debtors
Capital Accounts: 80,000
X Less: Provision 76,000
4,02,000 4,000 3,00,000
Y
1,68,000 8,10,000 Cash
Z
2,40,000
9,80,000 9,80,000
26. Values:
Honesty
Justice
Respecting the efforts contributed by C in winning the award
Particulars Particulars
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TO Goodwill 10,000 By Investment
Stock 5,000)
(10,000*50/100)
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Date
Dr. 7,00,000
3,00,000 3,00,000
(application money transferred to share capital
account and share allotment account)
Dr.
Dr
Bank A/c
Dr.
25
25
money received)
Values involved
Equality
Responsibility towards investors
32. Rehan Ltd Values Involved: Protecting the interest of small investors, Adherence to law
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Employee Recognition
Motivation
Profit Sharing
Satisfaction of esteem needs
37. Sympathy
Generosity
41. Foresightedness
Judicious method
Adherence to SEBI guidelines and Companies Act
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Reduction in market value of share
Deprive the rights of existing shareholders
54.
Particulars 2007 2008 Absolute change %
Revenue from operations 10,00,000 12,50,000 2,50,000 25%
Less:Cost of goods sold 5,00,000 6,50,000 1,50,000 30%
Profit 5,00,000 6,00,000 1,00,000 20%
Less:Operating Expenses 50,000 60,000 10,000 20%
Add:Income 30,000 30,000 --- ---
Profit before tax 4,80,000 5,70,000 1,20,000 25%
Less: Tax 2,40,000 2,85,000 45,000 18.75%
Profit after tax 2,40,000 2,85,000 45,000 18.75%
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Values: Transparency
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Avoiding Malpractices
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Assist in forecasting
Transparency
Avoiding Malpractices
Assist in forecasting
56.
Current ratio & (b) quick ratio
Current ratio=current assets/current liabilities
Current assets=closing inventory+trade receivables + cash + marketable securities + income tax
paid in advance.
= 2,00,000+1,00,000+30,000+20,000+10,000=3,60,000
Current liabilities= taxation(current+trade payables + outstanding salaries + bank over draft
+dividends payable
= 20,000+34,000+5,000+25,000+36,000=1,20,000
Current ratio =3,60,000/1,20,000 = 3:1
Quick ratio = liquid assets/ current liabilities
Liquid assets = trade receivables + cash +marketable securities
= 1,00,000+30,000+20,000
=1,50,000
Quick ratio = 1,50,000/ 1,20,000
=1.25:1
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Comments: The short term financial position of the company is sound because its current ratio
is 3:1 ,which is more than the ideal ratio of 2:1 . Liquid ratio of the company is 1.25 : 1,which is
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also more than the ideal ratio of 1:1. Therefore,it can be said the company is in a position to pay
its current liabilities instantly
Values:
Foresightedness
Transparency
Honesty
Integrity
Rs. Rs.
Particulars
14,000
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Sale of investments
Net cash used in investing (3,04,000)
(3,04,000)
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activities
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Cash flows from financing
activities:
50,000
Issue of debentures
Note:
1.Negative balance of profit and loss amounting to 10,000 appearing in the balance sheet on 31 st
march,2011 represent an amount of loss .In the current year after covering this loss of 10,000, the profit
and loss shows the profit of 72,000. It means that the net profit during the current year must have been
72,000+10,000=82,000.
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Depreciation on fixed Assets sold) 8,000 being current year’s depreciation) 6,000
56,000 56,000
INVESTMENTS A/C
59,000 59,000
58. Transparency
Sensitivity
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Cash and cash equivalents at the end 2,14,000
59. Transparency
Adherence to law
61. Transparency
Sensitivity
Adherence to law
63. Equity/Equilibrium
Health Conscious
Balance Regional Development
Employment opportunity
Sharing & Caring
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Prepared by
1. Dr. K. MOHANA, MODERN SR.SEC.SCHOOL
2. T. CHOCKALINGAM, SANKARA SR.SEC.SCHOOL
3. KAMALESH VYAS, GSSS JAIN VIDYALAYA
4. SMT. NEELA, SINDHI MODEL SR.SEC.SCHOOL
5. SMT.SRIPRIYA, DAV GIRLS SR.SEC.SCHOOL
6. SMT.KANCHANA, BHAVAN’S RAJAJI VIDYASHRAM
7. SRI RAJAGOPALAN, PSBB SR.SEC.SCHOOL
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