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CBSE CLASS XII

Q. 76. (Redemption of debentures by purchase in the open market). Wye Ltd. purchased its own 500, 8% Debentures of Rs. 100 each at Rs. 98 for immediate cancellation. The expenses of purchase amounted to Rs. 100 Jounalise.

Q. 77. On 1st January , 2004 a company issued 1000, 6% Debentures of Rs. 100 each at Rs. 110 per debenture. The terms of issued provided for the redemption of Rs. 20,000 debentures every year commencing from the end of 2005 either by purchase or by drawings at par at the company’s option. The Board of Directors decided to transfer the required amount of profits to debenture Redemption Reserve on 31st December ,2005 On 31st December,2005 the company purchased for cancellation Debentures of the face value of Rs. 8,000 at Rs. 95 per debenture and of Rs. 12,000 at Rs. 90 per debenture Journalise the above transactions and show how the profit on redemption would be treated (Ignore the payment of interest)

Q. 78. At the commencement of 2005 XYZ Ltd. made an issue of 1,000 , 10% Debentures of Rs. 100 each at par . The terms of issue provided for the redemption of Debentures of Rs. 100 each at par. The terms of issue provided for the redemption of Rs 10,000 annually , commencing from the end of 2007, either by drawings at par or by purchase in the market at the company’s option . Interest is payable on 31st December every year

At the end of 2007, the company purchased for cancellation Rs. 5,000 of its debentures at Rs. 96 each, Rs. 3000 at Rs. 98 each and Rs. 98.50 each. The expenses of purchase amounted to Rs.40. The Board of Directors decided to redeem the debentures out of profits but without building up a sinking fund. Pass the necessary Journal entries regarding issue of debentures and for the year 2007.

Q. 79. Charlie Ltd. , issued 2,00,000 , 8% Debentures of Rs. 20 each redeemable after 10 years. Debentureholders are given the option to get debenture redeemed at Rs. 22 per debenture any time after 5 years. At the end of 6 years debentureholders holding 10,000 debentures and at the end of 7 years holders of 5000 debentures exercised their option to get their debentures redeemed. Record necessary Journal entries.

Q. 80. (Conversion of debentures in to preference shares at premium) X Ltd. Redeemed Rs. 1,71,000 10% Debentures at 102% by converting them in to 8% Cumulative Preference shares of Rs. 20 each at Rs. 22.50 . Journalise. Q-80) On 1st January, 2004 , X Ltd. Company issued Rs. 2,00,000 10% debentures of Rs 1,000 each at par repayable at 4% premium. As per terms of issue, the debentureholders had an option to convert their holding in to equity shares of Rs. 100 each at any time after 3 years .

Q. 81. On 1st January, 2004 , X Ltd. Company issued Rs. 2,00,000 10% debentures of Rs 1,000 each at par repayable at 4% premium. As per terms of issue, the debentureholders had an option to convert their holding in to equity shares of Rs. 100 each at any time after 3 years . On 31st December , 2007 , a holder of 40 debentures gave a notice of exercising the option. Interest on debentures for full one year had accured and unpaid until 31st December, 2007. Interest for the past two years had been paid. Pass Journal entries.

Q. 82. Pass the necessary Journal entries in the books of the company in following cases for redemption of 1000, 12% Debentures of Rs 10 each issued at par
(i) Debentures redeemed at par by conversion in to 12% Preference shares of Rs. 100 each
(ii) Debentures redeemed at a premium of 10% by conversion in to Equity Shares issued at par.
(iii) Debentures redeemed at a premium of 10% by conversion in to Equity shares issued at a premium of 25%

Financial Statement of a Company

Q. 83. The following balances have been extracted from the books of Vijay Ltd. On 31st March,2008. Share capital Rs.8,00,000. General Reserve Rs.2,00,000, 8% debentures Rs.4,00,000, Creditors Rs.1,00,000, Proposed Dividend Rs.70,000, Profit & Loss Account (Dr.) r.30,000, Building Rs.10,00,000, Government Bonds Rs.2,00,000, Stock Rs.2,50,000 and Discount on issue of 8% debentures Rs.90,000.
Prepare the Balance Sheet of the company.

Comparative Statement and Common Size Statement

Q. 84. Prepare the Comparative Balance Sheet of Apex Ltd. from the following information for two years ended 31st March, 2007 and 2008:

Paper By Mr. Rahul Kadd
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