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P Ltd. acquired 65% shares of Q Ltd. on 1-10-02. P & L a/c in the
books of Q Ltd. showed a debit balance of Rs. 40,000 on 1-4-02.
On 31-3-03, the balance sheet of Q Ltd. showed P & L a/c
balance of Rs. 1,20,000. Calculate capital profits and Revenue
profits.?
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P Ltd. acquired 65% shares of Q Ltd. on 1-10-02. P & L a/c in the book...
Introduction
To determine the capital profits and revenue profits of Q Ltd. after the acquisition by P Ltd., we need to analyze the Profit and Loss account balances before and after the acquisition.
Initial Profit and Loss Position
- On 1-4-02, the P & L a/c of Q Ltd. had a debit balance of Rs. 40,000 (indicating accumulated losses).
Final Profit and Loss Position
- On 31-3-03, the P & L a/c balance stood at Rs. 1,20,000 (indicating a net profit after considering previous losses).
Calculation of Revenue Profits
- Revenue profits are derived from the operational activities of the company.
- Net Profit during the year = Closing balance - Opening balance
- Net Profit = Rs. 1,20,000 - (-Rs. 40,000) = Rs. 1,20,000 + Rs. 40,000 = Rs. 1,60,000
- Therefore, revenue profits for the year amounted to Rs. 1,60,000.
Calculation of Capital Profits
- Capital profits arise from gains that are not part of the regular business operations.
- Since P Ltd. acquired 65% shares of Q Ltd., any profits prior to acquisition do not count as capital profits.
- Therefore, there are no capital profits in this scenario.
Conclusion
- In summary, the revenue profits of Q Ltd. for the period are Rs. 1,60,000, while there are no capital profits due to the nature of the share acquisition and the previous losses carried forward.
This breakdown helps in understanding the financial health of Q Ltd. post-acquisition.
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A, B and C are partners sharing profits and losses in the ratio of 2 : 1 : 1 respectively.On 31st March, 2012, their balance sheet was as follows:A died on 1st April, 2012. The firm had taken a joint life policy for Rs 1,20,000, the payment for which was received by the firm. According to the partnership deed, on retirement or death of a partner, the goodwill of the firm was to be valued at 1½ times of the average profit for the last four years.The profits for the last four years were Rs 64,000, Rs 69,000, Rs 72,000 and Rs 75,000 respectively. For paying the amount due to A’s legal representative, B and C brought as much cash as would bring their capitals in profit sharing ratio and the firm would have a cash balance of Rs 3,000.Pass journal entries to record the above mentioned transactions and prepare partners’ capital accounts. in this question how b capital become 88750 and c capital will become 68750?

A, B and C are partners sharing profits and losses in the ratio of 2 : 1 : 1 respectively.On 31st March, 2012, their balance sheet was as follows:A died on 1st April, 2012. The firm had taken a joint life policy for Rs 1,20,000, the payment for which was received by the firm. According to the partnership deed, on retirement or death of a partner, the goodwill of the firm was to be valued at 1½ times of the average profit for the last four years.The profits for the last four years were Rs 64,000, Rs 69,000, Rs 72,000 and Rs 75,000 respectively. For paying the amount due to A’s legal representative, B and C brought as much cash as would bring their capitals in profit sharing ratio and the firm would have a cash balance of Rs 3,000.Pass journal entries to record the above mentioned transactions and prepare partners’ capital accounts.?

A & B are partners in the ratio of 3:2. The firm maintains fluctuating capitals account and the balance of the same as on 31.3.2020 amounted to ₹1,39,800 and 1,60,200 for A and B respectively. Their drawings during the year were ₹30,000 each. As per the deed interest on capital @ 10% p.a. on opening capital had been provided to them. Calculate opening capitals of partner given that their profits were ₹90,000. Show your working clearly.?Read more at: A & B are partners in the ratio of 3:2. The firm maintains fluctuating capitals account and the balance of the same as on 31.3.2020 amounted to ₹1,39,800 and 1,60,200 for A and B respectively. Their drawings during the year were ₹30,000 each. As per the deed interest on capital @ 10% p.a. on opening capital had been provided to them. Calculate opening capitals of partner given that their profits were ₹90,000. Show your working clearly.?

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P Ltd. acquired 65% shares of Q Ltd. on 1-10-02. P & L a/c in the books of Q Ltd. showed a debit balance of Rs. 40,000 on 1-4-02. On 31-3-03, the balance sheet of Q Ltd. showed P & L a/c balance of Rs. 1,20,000. Calculate capital profits and Revenue profits.?
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P Ltd. acquired 65% shares of Q Ltd. on 1-10-02. P & L a/c in the books of Q Ltd. showed a debit balance of Rs. 40,000 on 1-4-02. On 31-3-03, the balance sheet of Q Ltd. showed P & L a/c balance of Rs. 1,20,000. Calculate capital profits and Revenue profits.? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about P Ltd. acquired 65% shares of Q Ltd. on 1-10-02. P & L a/c in the books of Q Ltd. showed a debit balance of Rs. 40,000 on 1-4-02. On 31-3-03, the balance sheet of Q Ltd. showed P & L a/c balance of Rs. 1,20,000. Calculate capital profits and Revenue profits.? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for P Ltd. acquired 65% shares of Q Ltd. on 1-10-02. P & L a/c in the books of Q Ltd. showed a debit balance of Rs. 40,000 on 1-4-02. On 31-3-03, the balance sheet of Q Ltd. showed P & L a/c balance of Rs. 1,20,000. Calculate capital profits and Revenue profits.?.
Solutions for P Ltd. acquired 65% shares of Q Ltd. on 1-10-02. P & L a/c in the books of Q Ltd. showed a debit balance of Rs. 40,000 on 1-4-02. On 31-3-03, the balance sheet of Q Ltd. showed P & L a/c balance of Rs. 1,20,000. Calculate capital profits and Revenue profits.? in English & in Hindi are available as part of our courses for UPSC. Download more important topics, notes, lectures and mock test series for UPSC Exam by signing up for free.
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