When the shares forfeited are reissued at discount, Bank account is debited by the amount received and Share capital account is credited by the paid up amount. The amount of discount allowed is debited to Share Forfeited Account. This is for adjusting the amount of discount so allowed from the amount forfeited at the time of forfeiture.

Now the amount of discount allowed on reissue of shares at the most can be equal to the forfeited amount on such shares. In that case the share forfeited account after reissue will show a zero balance. But in case, this amount of discount is less than the amount forfeited, the remaining forfeited amount will be profit for the company. This profit is a capital gain to the company and is transferred to Capital Reserve account.

In the above question discount on shares reissued = number of shares reissued × discount allowed per share = 150 × (75-65) = Rs. 1,500

Amount available for the reissued shares in shares forfeiture account = number of shares reissued × amount forfeited per share = 150 × (75-50) = 150 × 25 = Rs. 3,750

The surplus amount to be transferred to capital reserve account = 3,750 – 1,500 = Rs. 2,250

When a new partner is admitted in the firm, the existing/old partners have to sacrifice, what is given to
the new partner, from their future profits, the reputation they have gained in their past efforts and the side
of capital they have taken before. The new partner when admitted has to compensate for all these
sacrifices made by the old ones. The compensation for such sacrifice can be termed as ‘goodwill’.
Hence, at the time of admission of the new partner, it is necessary to account the valuation of goodwill in the firm.

If the new partner brings in cash for his share of goodwill, in addition to his capital, it is known as premium method.
The premium brought in by Z in the above case = Rs. 4,500 which equals to his share in the firm which is 1/6

Thus the total value of goodwill of the firm will be 4,500 × 6 = Rs. 27,000

A joint venture (JV) is a business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets.
Profit on venture can be ascertained with the help of the joint venture account.

Goods bought on joint venture as well as expenses incurred in connection with the business are debited to the joint venture account and credited to the coventurers’s account or the joint bank account. When the goods are sold, the amount thereof is debited to the coventurer’s account or the joint bank account

When the company has the debentures in Financial statements with entitlement to interest. Interest will accrue on a timely basis e.g. Month to month or period to period.
However the so accrued will become accrued and due on the said due dates.
If the company has to prepare the financial statements, it has to provide for the interest expense up to
that period and show it under interest accrued but not due.
Interest from 1-4-2010 to 31-12-2010 i.e. for 9 months from the date of issue of debentures is accrued
and due = 14% of 1,00,000 × 3/12 + 14% of 1,00,000 × 6/12 = 1,05,000
Interest from 1-1-2011 to 31-3-2011 is the interest which is accrued but not due = 14% of 1,00,000 ×
3/12 = 35,000.

Super Profits are the profits earned above the normal profits. Under this method Goodwill is calculated on the basis of Super Profits i.e. the excess of actual profits over the normal profits. Steps for calculating Goodwill under this method are given below:

(i) Normal Profits = Capital Invested × Normal rate of return/100
(ii) Super Profits = Actual Profits – Normal Profits
(iii) Goodwill = Super Profits × No. of years purchased

Here:
Normal profits = 4,00,000 × 10% = 40,000
Average profit of the last three years = (42,000 + 39,000 + 45,000)/3 = 42,000
Super profits = 42,000 – 40,000 = 2,000
Goodwill = 2,000 × 3 = Rs. 6,000

Sale or return is a term sale, where the seller sold goods on the basis of return, there might be a chance of return of goods, or acceptance of goods, or acceptance of part of goods. This method is also called the Sale on Approval basis.

When the transactions of sending the goods on sale or return basis are few, the seller may treat it as normal sale and record it in the books accordingly. However, if the goods are sent on sale or return basis, the unsold goods must be included in the stock at cost. When the goods sent on sale or approval basis are treated as sale, for the goods not yet approved, the sale entry is reversed at the year end.

Here Varun Ltd. sends goods to his customers on Sale or Return basis by recording it as a sale at the time of sending it for approval.When a letter of approval was received from a customer for Rs. 40,000 this transaction is already recorded in the books.
So No entry is required for receiving the letter of approval from the customer.

Debenture is a certificate/instrument acknowledging a debt. It is issued generally by a public company to individuals/institutions who lend it money (invest in their debentures)For an investor investing in a debenture
is just like investing in a fixed deposit with the difference that while he can withdraw the amount invested
in a fixed deposit any time he/she likes with a loss of interest.. he cannot do so with a debenture. The
amount invested on a debenture will be repaid only on the expiry of the period for which the debenture
has been issued. if the debentures were originally issued at a premium if the current balance of premium
or the premium received on debentures originally issued is less than the premium on redemption then the
case of loss on redemption of debentures arise.
Here Prakash Ltd. issued 15,000, 15% debentures of Rs.100 each at a premium of 10%, which are
redeemable after 10 years at a premium of 20%.
The premium on redemption of debentures = 20% of 15,00,000 = 3,00,000
Loss on redemption of debentures = Rs. 3,00,000
The loss on redemption of debentures is to be written off in the period for which the debentures are being
issued.

A joint venture (JV) is a business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets. Profit on venture can be ascertained with the help of the joint venture account. Goods bought on joint venture as well as expenses incurred in connection with the business are debited