Page 195 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Accounting for Companies-I

Notes Investment of 1 1.0000
3.1525
1 appropriated every year for three years will be accumulated 3.1525.
Total amount required for redemption of debentures 12,61,000

12,61,000
Amount of each instalment = = 4,00,000
3.1525
Sinking Fund Account
Date Particulars Date Particulars
Dec. 31 To Balance c/d 4,00,000 Dec. 31 By Profit & Loss
Application Account 4,00,000
4,00,000 4,00,000
2004 2004
Dec. 31 To Balance c/d 8,20,000 Jan. 1 By Balance b/d 4,00,000
Dec. 31 By Interest on S.F. Investment A/c 20,000
Dec. 31 By Profit and Loss Appropriation A/c 4,00,000
8,20,000 8,20,000
2005 2005
Dec. 31 To General Reserve Account 12,61,000 Jan. 1 By Balance b/d 8,20,000
Dec. 31 By Interest on S.F. Investment A/c 41,000
Dec. 31 By Profit and Loss Appropriation A/c 4,00,000
12,61,000 12,61,000
Sinking Fund Investment Account
Date Particulars Date Particulars
Dec. 31 To Bank Account 4,00,000 Dec. 31 By Balance c/d 4,00,000
4,00,000 4,00,000
2004 2004
Jan. 1 To Balance b/d 4,00,000 Dec. 31 By Balance c/d 8,20,000
Dec. 31 To Bank account 4,20,000
8,20,000 8,20,000
2005 2005
Jan.1 To Balance b/d 8,20,000 Dec. 31 By Bank Account 8,20,000
8,20,000 8,20,000
12% Debenture Account

Date Particulars Date Particulars
Dec. 31 To Balance c/d 12,61,000 Jan. 1 By Bank Account 12,61,000
12,61,000 12,61,000
2004 2004
Dec. 31 To Balance c/d 12,61,000 Jan. 1 By Balance b/d 12,61,000
12,61,000 12,61,000
2005 2005
Dec. 31 To Debenture-holders account 12,61,000 Jan. 1 By Balance b/d 12,61,000
12,61,000 12,61,000

8.2.4 Non-cumulative Sinking Fund

In a non-cumulative sinking fund, interest received on debenture redemption fund investment
is neither transferred to a sinking fund nor is invested in the marketable securities. In its place,

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