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 discount and redeemed at premium then the
case of loss on issue of debentures arise.

Here Green Ltd. issued 5,000, 6% debentures of Rs.100 each at a discount of 5% repayable after 5 years at a premium of 5%.

The discount on issue of debentures = 5% of 5,00,000 = Rs. 25,000
The premium on redemption of debentures = 5% of 5,00,000 = Rs. 25,000
Thus total loss on issue of debentures = 25,000 + 25,000 = Rs. 50,000

The 12% debentures are being issued at a premium thus the value of each debenture will be 100 + 10 = Rs. 110
Total value of building purchased = 99,00,000
Number of debentures issued in consideration = total value of building purchased/value per debenture = 99,00,000/110 = 90,000 debentures
Thus the actual value of the debentures issued = 90,000 × 100 = Rs. 90,00,000 should be credited to debentures account and the balance amount is the premium
Thus premium amount will be 99,00,000 – 90,00,000 = Rs. 9,00,000

Let the selling price be x
Thus the profit margin in 20% of x
And the cost price will be x – 20% of x = 80% of x
So the profit margin on cost will be = 20% of x/80% of x × 100 = 0.2x/0.8x × 100 = 25%

Closing inventory is the amount of inventory that a business still has on hand at the end of a reporting period. This includes raw materials, work-in-process, and goods inventory. The amount of closing inventory can be ascertained with a physical count of the inventory. It can also be determined by using a perpetual inventory system and cycle counting to continually adjust inventory records to arrive at ending balances.
The amount of closing inventory is used to arrive at the cost of goods sold in a periodic inventory system with the following calculation:
Opening inventory + Purchases – Closing inventory = Cost of goods sold
So closing inventory = total goods available for sales – cost of goods sold
Cost of goods sold = x(say) = sales –margin on sales = 13,00,000 – 1/3of x
Or x + 1/3x = 13,00,000
Or 4/3x = 13,00,000
Or x = 13,00,000 × 3/4 = 9,75,000
Closing inventory = 12,00,000 – 9,75,000 = Rs. 2,25,000

Amount spent on painting new factory is capital expense.

In this case the amount due to retiring partner is paid in instalments. Usually, some amount is paid immediately on retirement and the balance is transferred to his loan account. This loan is paid in one or more instalments
The loan amount carries some interest. An instalment consists of two parts :
(i) Principal Amount of instalment due to retiring partner.
(ii) Interest at an agreed rate, Interest due on loan amount is credited to retiring partners’ loan account. Instalment inclusive of interest then is paid to the retiring partner as per schedule agreed upon.
Here it was agreed that he should be paid Rs. 4,950 in cash on retirement and the balance in three equal yearly instalments with interest at 6% per annum.
So the balance will be = 10,950 – 4,950 = Rs. 6000

Amount of three equal instalments = Rs. 6,000/3 = Rs. 2,000

Interest @ 6% pa. = Rs. 6,000× 6/100 = Rs. 360

1st Instalment at the end of 1st Year = Rs. 2,000 + Rs. 360 = Rs. 2,360

Interest @ 6% pa. = Rs. 4,000×6/100 = 240

2nd Instalment at the end of 2nd Year = 2,000 + 240 = Rs. 2,240

Interest @ 6% pa. = 2,000×6/100 = Rs. 120

3rd Instalment at the end of 3rd Year = 2,000 + 120 = Rs. 2,120

Gross profit is a company’s revenue minus its cost of goods sold. Gross profit is a company’s residual profit after selling a product or service and deducting the cost associated with its production and sale.

Cost of goods sold is the direct costs attributable to the production or purchase of the goods sold by a company. It excludes indirect expenses such as operating expenses ,distribution costs and sales force cost.
Cost of goods sold in the above case = 3,10,000
Gross profit = sales – cost of goods sold = 4,00,000 – 3,10,000 = Rs. 90,000