SAMPLE QUESTION PAPER - 5

SUBJECT- ACCOUNTANCY (055)

CLASS XII (2024-25)

Time Allowed: 3 hours Maximum Marks: 80

General Instructions:
1. This question paper contains 34 questions. All questions are compulsory.
2. This question paper is divided into two parts, Part A and B.
3. Part - A is compulsory for all candidates.
4. Part - B has two options i.e. (i) Analysis of Financial Statements and (ii)
Computerised Accounting. Students must attempt only one of the given options.
5. Question 1 to 16 and 27 to 30 carries 1 mark each.
6. Questions 17 to 20, 31and 32 carries 3 marks each.
7. Questions from 21 ,22 and 33 carries 4 marks each
8. Questions from 23 to 26 and 34 carries 6 marks each
9. There is no overall choice. However, an internal choice has been provided in 7
questions of one mark, 2 questions of three marks, 1 question of four marks and 2
questions of six marks.
Part A:- Accounting for Partnership Firms and Companies
1. An increase in the value of assets at the time of admission of a partner is: [1]

a) Debited to Partner's Capital b) Credited to Partner's Capital

Account. Account

c) Debited to Revaluation A/c d) Credited to Revaluation Account

2. Assertion (A): Capital account of partners generally has a credit balance. [1]
Reason (R): Current account has either a debit or credit balance.

a) Both A and R are true and R is b) Both A and R are true but R is
the correct explanation of A. not the correct explanation of A.

c) A is true but R is false. d) A is false but R is true.

3. X Ltd. Forfeited 500 shares of ₹ 10 each fully called up, on which ₹ 4000 has been [1]
paid up. 300 of these shares were reissued for a payment of 2400.
Amount to be transferred to capital reserve will be

a) 1200 b) 1800

c) 2400 d) Nil

OR
Sunbeam Limited issued 4,000, 6% Debentures of ₹ 100 each at ₹ 95 per debenture. 6%
Debentures account will be credited by:

a) ₹ 4,00,000 b) ₹ 3,80,000

c) ₹ 20,000 d) ₹ 4,40,000

4. Due to change in the profit sharing ratio, Pooja's gain is th while Sonu’s sacrifice is
1

5
[1]
1

5
th. They decided to adjust the following without affecting their book values, by
passing a single adjustment entry:
General Reserve ₹ 20,000
Profit & Loss Account (Dr.) ₹ 30,000
The necessary adjustment entry will be:

a) Debit Sonu’s capital account by b) Debit Pooja’s capital account by

₹ 10,000 and credit Pooja’s ₹ 2,000 and credit Sonu’s capital
capital account by ₹ 10,000. account by ₹ 2,000.

c) Debit Sonu’s capital account by d) Debit Pooja's capital account by

₹ 2,000 and credit Pooja’s ₹ 10,000 and credit Sonu’s
capital account by ₹ 2,000. capital account by ₹ 10,000.

OR
Relationship between the partners is of.

a) Senior-Subordinate b) Junior-Senior Relationship.

Relationship.

c) Close relatives. d) Agent and Principal.

5. A and B are partners sharing profits in 3 : 2 with capitals of ₹ 6,00,000 and ₹ 4,00,000 [1]
respectively. They are entitled to interest on their capitals @10% p.a. and A is also
entitled to a rent of ₹ 10,000 per month for use of his property by the firm. Net Profit
earned by the firm for the year ended 31st March 2023 was ₹ 3,00,000. B's share of
profit will be:

a) ₹ 1,20,000 b) ₹ 32,000

c) ₹ 80,000 d) ₹ 72,000

6. Raj Ltd. purchased a building for ₹ 5,00,000 payable as 15% in cash and balance by [1]
allotment of 9% debentures of ₹ 100 each at a premium of 25%. Number of
debentures issued will be:

a) 4,000 b) 5,000

c) 4,250 d) 3,400

OR
Debenture Application Account is in the nature of

a) Nominal Account b) Asset account

c) Personal Account d) Real Account

7. Assertion (A): The equity shareholders are paid dividend on the shares held by them. [1]
Reason (R): As the equity shareholders are the owners and dividend form their
earning.

a) Both A and R are true and R is b) Both A and R are true but R is
the correct explanation of A. not the correct explanation of A.

c) A is true but R is false. d) A is false but R is true.

8. A, Band C are partners sharing profits in 3 : 2 : 1 B retires, and the balance of his [1]
Capital A/c after adjusting reserves and his share of goodwill was ₹ 2,40,000. The
remaining partners gave B an unrecorded vehicle valued at ₹ 60,000 and the balance
payable to B was discharged by giving a Bank draft. What will be the amount of the
Bank Draft?
 a) ₹ 2,60,000 b) ₹ 2,40,000

c) ₹ 1,80,000 d) ₹ 2,00,000

OR
A and B are partners in a firm. They are entitled to interest on their capitals but the net
profit was not sufficient for this interest, then the net profit will be distributed among
partners in:

a) Capital Ratio b) Agreed Ratio

c) Equally d) Profit Sharing Ratio

Question No. 9 to 10 are based on the given text. Read the text carefully and answer the [2]
questions:
Mohit and Sonu are equal partner Their capitals as on 1st April, 2020 are 1,00,000 and
2,00,000 respectively. Profits for the year 2020-21 were ₹ 90,000. As per the agreement,
interest on capitals was ₹ 10,000 and ₹ 20,000 respectively and interest on drawings was ₹
6,000 and ₹ 10,000 respectively. Mohit’s salary was ₹ 2,000 p.m. and Sonu’s salary was ₹
5,000 p.a.
Accountant, however, committed the mistake and credited the profit in the capital ratio,
Without interest on capitals, drawings and salary.

9. With what amount was Sonu’s account credited with initially?

a) ₹ 45,000 b) ₹ 30,000

c) ₹ 60,000 d) 90,000

10. What was the total salary required to be credited?

i. ₹ 70,000
ii. ₹ 84,000
iii. ₹ 29,000
iv. ₹ 48,000
a) Option (iv) b) Option (ii)

c) Option (i) d) Option (iii)

11. P and Q are partners sharing Profits in the ratio of 2 : 1 with fixed capitals of ₹ [1]
10,00,000 and ₹ 5,00,000 respectively. After closing the accounts for the year ending
31st March 2022 it was discovered that interest on Drawings was Charged from P is ₹
600 but partnership deed is silent on interest on Drawings.
In the adjusting entry, Q’s Current Account will be:

a) Neither debited nor credited b) Credited with 200

because there is no interest on
drawings of Q

c) Debited with 200 d) Credited with 400

12. Gaurav Ltd. took over the assets of ₹ 4,80,000 and Liabilities of ₹ 80,000 of Girish [1]
Ltd. for a consideration of ₹ 3,20,000. An amount of ₹ 20,000 paid by an acceptance
in favour of Girish Ltd. payable after 3 months and the balance by issue of equity
shares of ₹ 100 each at a premium of 50%.
Number of Shares to be issued:

a) 2,400 b) 1,800

c) 2,000 d) 2,200

13. X Ltd. issued a prospectus inviting applications for 10,000 shares of ₹ 50 each at a [1]
premium of ₹ 20 per share, payable as follows:
On Application - ₹ 10 (including ₹ 4 premium)
On Allotment - ₹ 20 (including ₹ 5 premium)
On First Call - ₹ 30 (including ₹ 6 premium)
On Second & Final Call - Balance Amount
A shareholder holding 1,000 shares failed to pay the first call and second & final call
money and his shares were forfeited after the final call.
In the entry for forfeiture of shares, Share Capital Account will be debited with:

a) ₹ 50,000 b) ₹ 29,000

c) ₹ 11,000 d) ₹ 70,000

14. The document that contains the terms of partnership is called: [1]
 a) Partnership Deed b) Partnership Contract

c) Partnership Rules d) Partnership Agreement

15. X and Y were partners in a firm sharing profits in the ratio of 7 : 3. Z was admitted for [1]
th share in the profits which he took 75% from X and remaining from Y.
1

Sacrificing ratio of X and Y:

a) 1 : 1 b) 7 : 3

c) 3 : 1 d) 3 : 2

OR
Divya and Aruna were partners in a firm. Yogesh was admitted as a new partner for th 1

share in the profits of the firm. Yogesh brought proportionate capital. Capitals of Divya
and Aruna after all adjustments were ₹ 64,000 and ₹ 46,000 respectively. Capital brought
by Yogesh was:

a) ₹ 27,500 b) ₹ 28,000

c) ₹ 55,000 d) ₹ 22,000

16. On dissolution of the firm, amount received from sale of unrecorded asset is credited [1]
to:

a) Partner’s Capital Accounts b) Cash Account

c) Realisation Account d) Profit and Loss Account

17. A and B were partners in a firm sharing profits and losses in the ratio of 2 : 1. With [3]
effect from 1st April, 2023 they agreed to share profits and losses equally. Calculate
the individual partner’s gain or sacrifice due to change in ratio.

18. D, E and F were partners in a firm sharing profits in the ratio of 5 : 7 : 8. Their fixed [3]
capitals on 1st April, 2022 were D - ₹ 5,00,000, E - ₹ 7,00,000 and F - ₹ 8,00,000.
Their partnership Deed provided for the following:
i. Interest on capital @10% p.a.
ii. Salary of ₹ 10,000 per month to F.
iii. Interest on drawing @12% p.a.
h
 D withdrew ₹ 40,000 on 30th April, 2022; E withdrew ₹ 50,000 on 30th June 2022
and F withdrew ₹ 30,000 on 31st March, 2023.
During the year ended 31st March, 2023 the firm earned a profit of ₹ 3,50,000.
Prepare the Profit and Loss Appropriation Account for the year ended 31st March,
2023.

OR
Rahul and Mohit were partners in a firm. Their partnership deed provided that the profits
shall be divided as follows:
First ₹ 20,000 to Rahul and the balance in the ratio of 4 : 1. The profits for the year ended
31st March, 2023 were ₹ 60,000 which had been distributed among the partners. On 1-4-
2022 their capitals were Rahul ₹ 90,000 and Mohit ₹ 80,000. Interest on capital was to be
provided @ 6% p.a. While preparing the profit and loss appropriation interest on capital
was omitted.
Pass necessary rectifying entry for the same. Show your workings clearly.

19. Raj Ltd. purchased furniture of ₹ 2,20,000 from M/s. Furniture Mart. 50% of the [3]
amount was paid to M/s. Furniture Mart by accepting a Bill of Exchange and for the
balance the company issued 9% Debentures of ₹ 100 each at a premium of 10% in
favour of M/s. Furniture Mart.
Pass necessary Journal entries in the books of Raj Ltd.

OR
What is the minimum time interval between two consecutive calls according to Table F of
Schedule I?

20. Calculate capital employed by Liabilities Side Approach and Assets Side Approach [3]
from the following Balance Sheet:
Liabilities ₹ Assets ₹
Capital A/cs: Land and Building 3,00,000
Gaurav 2,00,000 Goodwill 60,000
Ashish 2,00,000 4,00,000 Investments (Trade) 1,00,000
Reserves 1,80,000 Stock 1,00,000
Sundry Creditors 1,80,000 Sundry Debtors 1,40,000
 Outstanding
20,000 Cash at Bank 60,000
Expenses
Deferred Revenue Expenditure:
20,000
Advertisement Suspense
7,80,000 7,80,000

21. A Company invited applications for 5,000 shares of ₹ 100 each. The amount is [4]
payable as follows:
On Application ₹ 20 per share
On Allotment ₹ 30 per share
On First Call ₹ 20 per share
On Second and Final Call ₹ 30 per share
Applications were received for 8,000 shares. Applications for 1,000 shares were
rejected and pro-rata allotment was made to the remaining applicants.
All calls were made and duly paid except:
i. Govind, the holder of 200 shares paid the two calls with allotment.
ii. Sanjay, the holder of 300 shares failed to pay the first and second call money.
Pass necessary journal entries to record the above transactions.

22. Record necessary journal entries to realize the following unrecorded assets and [4]
liabilities in the books of Paras and Priya:
i. There was old furniture in the firm which had been written off completely in the
books. This was sold for ₹ 3,000,
ii. Ashish, an old customer whose account for ₹ 1,000 was written-off as bad in the
previous year, paid 60%, of the amount,
iii. Paras agreed to take over the firm’s goodwill (not recorded in the books of the
firm), at a valuation of ₹ 30,000,
iv. There was an old typewriter that had been written off completely from the books. It
was estimated to realize ₹ 400. It was taken away by Priya at an estimated price less
25%,
v. There were 100 shares of ₹ 10 each in Star Limited acquired at a cost of ₹ 2,000
which had been written off completely from the books. These shares are valued @ ₹
 6 each and divided among the partners in their profit sharing ratio.

23. CTE Ltd. issued a prospectus inviting applications for 50,000 Equity Shares of ₹ 10 [6]
each, payable ₹ 5 as per application (including ₹ 2 as premium), ₹ 4 as per allotment
and the balance towards first and final call.
Applications were received for 65,000 shares. Application money received on 5,000
shares was refunded with letter of regret and allotments were made on pro-rata basis to
the applicants of 60,000 shares.
Mr. Sundar to whom 700 shares were allotted failed to pay the allotment money and
his shares were forfeited by the Directors on his subsequently failure to pay the call
money.
All the forfeited shares were subsequently sold to Mr. Jay credited as fully paid-up for
₹ 9 per share.
You are required to set out the Journal entries and the relevant entries in the Cash
Book.

OR
Arun Ltd. was registered with a capital of ₹ 5,00,000 in shares of ₹ 10 each and issued
20,000 such shares at a premium of ₹ 2 per share, payable as ₹ 2 per share on application,
₹ 5 per share on allotment (including premium) and ₹ 2 per share on first call made three
months later. All the money payable on application and allotment was duly received but
when the first call was made, one shareholder paid the entire balance on his holding of 300
shares and another shareholder holding 1,000 shares failed to pay the first call money. Pass
Journal entries to record the above transactions and show how they will appear in the
company's Balance Sheet.

24. W and R were partners in a firm sharing profits in the ratio of 3: 2 respectively. On [6]
31st March, 2013, their balance sheet was as follows
Balance Sheet
as at 31st March, 2013
Amt Amt
Liabilities Asssets
(Rs) Rs
Creditors 17,500 Cash 2,500
Investment Fluctuation
4,000 Debtors 10,000
Fund
 (-) Provision for Doubtful
Bank Loan 10,000 (350) 9,650
Debts
Capital A/cs Stock 12,500
W 20,000 Plant 17,500
R 15,000 35,000 Patents 10,350
Investments 10,000
Goodwill 4,000
66,500 66,500
B was admitted as a new partner on the following conditions
i. B will get 4

15
th share of profits.
ii. B had to bring Rs 15,000 as his capital.
iii. B would pay cash for his share of goodwill based on 2.5 years purchase of average
profit of last 4 years.
iv. The profits of the firm for the years ending 31st March, 2010, 2011, 2012 and 2013
were Rs 10,000, Rs 7,000, Rs 8,500, and Rs 7,500 respectively.
v. Stock was valued at Rs 10,000 and provision for doubtful debts was raised up to Rs
500.
vi. Plant was revalued at Rs 20,000.
Prepare revaluation account, partners’ capital account and the balance sheet of the
new firm.

OR
A, B and C were partners sharing profits in the ratio 5: 3: 2 respectively. Their summarised
balance sheet was as follows :
Balance Sheet
Liabilities Amt(Rs) Assets Amt(Rs)
Capital Accounts Goodwill 80,000
A 2,80,000 Machinery 3,60,000
B 2,00,000 Debtors 1,40,000
C 1,20,000 6,00,000 Stock 1,80,000
 Liabilities Amt(Rs) Assets Amt(Rs)
Current Liabilities 1,84,000 Cash 24,000
7,84,000 7,84,000
C retired on 1.4.2009. It was agreed that :
i. Machinery is revalued at Rs. 4,80,000.
ii. C’s interest in the firm is valued at Rs 1,88,000 after taking into consideration
revaluation of assets, liabilities and accumulated profits/losses etc.
iii. The entire sum payable to C is to be brought in by A and B in such a way that their
capital should be in their new profit sharing ratio of 2: 1.
iv. A cash balance of Rs 17,000 should be kept in the firm as a minimum balance.
Prepare revaluation account, partners’ capital accounts, and balance sheet of the new firm.

25. Anita, Gaurav and Sonu were partners in a firm sharing profits and losses in [6]
proportion to their capitals. Their Balance Sheet as at 31st March, 2019 was as
follows:
Balance Sheet of Anita, Gaurav and Sonu as at 31st March, 2019
Amount Amount
Liabilities Assets
(₹) (₹)
Capitals: Land and Building 5,00,000
Anita 2,00,000 Investments 1,20,000
Gaurav 2,00,000 Debtors 1,50,000
Less: Provision for
Sonu 1,00,000 5,00,000 10,000 1,40,000
doubtful debts
Investment Fluctuation
40,000 Stock 1,00,000
Fund
General Reserve 30,000 Cash at Bank 1,70,000
Creditors 4,60,000
10,30,000 10,30,000
On the above date, Anita retired from the firm and the remaining partners decided to
carry on the business. It was agreed to revalue the assets and reassess the liabilities as
 follows:
i. Goodwill of the firm was valued at ₹ 3,00,000 and Anita’s share of goodwill was
adjusted in the capital accounts of the remaining partners, Gaurav and Sonu.
ii. Land and Building was to be brought up to 120% of its book value.
iii. Bad debts amounted to ₹ 20,000. A provision for doubtful debts was to be
maintained at 10% on debtors.
iv. Market value of investments was ₹ 1,10,000.
v. ₹ 1,00,000 was paid immediately by cheque to Anita out of the amount due and the
balance was to be transferred to her loan account which was to be paid in two equal
annual instalments along with interest @ 10% p.a
Prepare the Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of
the reconstituted firm on Anita’s retirement.

26. P Ltd. issued 10,000, 8% debentures of ₹ 100 each at a premium of 10% on 1-4-2022. [6]
It purchased Property, Plant & Equipment of the value of ₹ 2,50,000 and took over
current liabilities of ₹ 40,000 and issued 8% debentures at a premium of 5% to the
vendor. On the same date it took loan from the Bank for ₹ 1,00,000 and issued 8%
debentures as Collateral Security. Record the relevant journal entries in the books of P
Ltd. and prepare the extract of balance sheet on 31-3-2023. Ignore interest.

Part B :- Analysis of Financial Statements

27. XYZ Ltd. wants to assess future earning capacity of its business. It will conduct: [1]

a) external analysis b) Internal analysis

c) long-term analysis d) short-term analysis

OR
Assets are divide in to

a) 2 b) 8

c) 10 d) 1

28. Inventory Turnover Ratio is calculated under --------- [1]

a) Activity Ratio b) Profitability Ratio

 c) Solvency Ratio d) Liquidity Ratio

29. Is payment for the purchase of fixed assets will be classified as an operating activity [1]
for both finance and non-finance company?

a) No these are financing activities b) Yes these are Operating

activities

c) Not to be recorded d) No these are investing activities

OR
Pick the odd one out:

a) Proceeds from long-term loans b) Cash received as royalty

c) Issue of debentures in cash d) Issue of shares in cash

30. Example of cash flow from financing activity is: [1]

a) cash received from customer b) receipt of dividend on

investment

c) purchase of fixed asset d) payment of dividend

31. Operating Cycle and the expected period of realisation of trade receivables is given [3]
below. How will you classify the asset?
Particulars (i) (ii) (iii) (iv) (v) (vi) (vii)
Operating Cycle (Months) 9 17 10 10 14 24 10
Expected period of realisation of trade receivables
8 15 11 15 16 20 12
(Months)

32. From the following balance sheet of a company, calculate Debt-Equity Ratio: [3]
Balance Sheet
Particulars Note No. ₹
I. Equity and Liabilities
1. Shareholders’ funds
(a) Share capital 8,00,000
(b) Reserves and Surplus 1 1,00,000
2. Share application money pending allotment 2,00,000
3. Non-Current Liabilities
Long-term borrowings 1,50,000
Current liabilities 1,50,000
14,00,000
II. Assets
1. Non-Current Assets
a) Fixed assets
-Tangible assets 2 11,00,000
2. Current Assets
a) Inventories 1,00,000
b) Trade receivables 90,000
c) Cash and cash equivalents 1,10,000
14,00,000
Notes to Accounts
₹
1. Share Capital
Equity Share Capital 6,00,000
Preference Share Capital 2,00,000
8,00,000
Fixed Assets
₹
2 . Tangible Assets:
Plant and Machinery 5,00,000
Land and Building 4,00,000
Motor Car 1,50,000
 Furniture 50,000
11,00,000

33. From the following Statement of Profit and Loss of Raman Ltd, prepare a [4]
Comparative Statement of Profit and Loss for the year ended 31st March, 2022:
2021 - 22 2020 - 21
Particulars Note No.
₹ ₹
Revenue from Operations 26,00,000 20,00,000
Employee Benefit Expenses 6,00,000 5,00,000
Other Expenses 12,00,000 10,00,000
Tax Rate 50%

OR
Prepare comparative statement of profit and loss from the following information:
31st March, 2015 31st March, 2014
Particulars
Amt (Rs.) Amt (Rs.)

Revenue from Operations 12,00,000 8,00,000

Purchase of Stock-in-trade 7,80,000 5,20,000
Change in Inventories of
40,000 80,000
Stock-in-trade
10% of Cost of Revenue 8% of Cost of Revenue from
Other Expenses
from Operations Operations
Tax Rate 30% 40%

34. Following is the Balance Sheet of Meena Limited as at 31st March, 2023: Prepare [6]
Cash Flow Statement when Cash Flow from Financing Activities is ₹ 2,12,500.
Note 31st March, 31st March,
Particulars
No. 2023 2022
₹ ₹
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital 3,00,000 1,00,000
(b) Reserves and Surplus 1 25,000 1,20,000
2. Non-Current Liabilities
Long-term Borrowings 2 80,000 60,000
3. Current Liabilities
(a) Trade Payables 6,000 20,000
(b) Short-term Provisions 68,000 70,000
TOTAL 4,79,000 3,70,000
II. ASSETS
1. Non-Current Assets
(a) Property, Plant and Equipment and
Intangible Assets
(i) Property, Plant and Equipment 4 3,36,000 1,92,000
2. Current Assets
(a) Inventories 67,000 60,000
(b) Trade Receivables 51,000 65,000
(c) Cash and Bank Balances 25,000 49,000
(d) Other Current Assets - 4,000
TOTAL 4,79,000 3,70,000
Note to Accounts:
31st March, 31st March,
Particulars
2023 2022
₹ ₹
1. Reserves and Surplus
Surplus, i.e., Balance in Statement of Profit and
25,000 1,20,000
Loss

2. Long-term Borrowings
10% Long-term Loan 80,000 60,000
 3. Short-term Provisions
Provisions for Tax 68,000 70,000

4. Property, plant and equipment :

Machinery 3,84,000 2,15,000
Accumulated Depreciation (48,000) (23,000)
3,36,000 1,92,000
Additional Information:
i. Additional loan was taken on 1st July, 2022.
ii. Tax of ₹ 53,000 was paid during the year.
iii. Machinery of the book value of ₹ 80,000 (Accumulated Depreciation ₹ 20,000) was
sold at a loss of ₹ 18,000.
 SOLUTION
SAMPLE QUESTION PAPER - 5
SUBJECT- ACCOUNTANCY (055)
CLASS XII (2024-25)

Part A:- Accounting for Partnership Firms and Companies

1.
(d) Credited to Revaluation Account
Explanation:
credited to revaluation A/C as it is profit for the firm
2.
(b) Both A and R are true but R is not the correct explanation of A.
Explanation:
The capital account of partners generally has a credit balance after all adjustments.
3.
(b) 1800
Explanation:
Amount of forfeiture on 300 share = 300 = 2,400
4,000
×
500

Forfeiture Amount used at the time of reissue = (300 × 10) - 2,400 = 600
Amount of capital reserve = 2,400 - 600 = 1,800
OR
(a) ₹ 4,00,000
Explanation:
₹ 4,00,000 (4000x100)
4.
(c) Debit Sonu’s capital account by ₹ 2,000 and credit Pooja’s capital account by ₹ 2,000.
Explanation:
Debit Sonu’s capital account by ₹ 2,000 and credit Pooja’s capital account by ₹ 2,000.
Particular amount
General reserve 20,000
Profit and Loss (Dr.) (30,000)
Total (10,000)
Pooja's share = 10,000× = 2,000
1

Sonu's share = 10,000× = 2,000

1

OR
 (d) Agent and Principal.
Explanation:
Agent and Principal.
5.
(c) ₹ 80,000
Explanation:
₹
Net Profit 3,00,000
Less : Interest on Capitals 1,00,000
B's Share : 2,00,000 × = ₹ 80,000
2

Note: Net Profit ascertained by preparing P & L A/c is given in the question. Hence, Rent to
Partner must have been already charged to P & L A/c.
6.
(d) 3,400
Explanation:
Number of debentures issued = 4,25,000

125
= 3,400
OR

(c) Personal Account

Explanation:
Personal Account
7. (a) Both A and R are true and R is the correct explanation of A.
Explanation:
The equity shareholders are given dividend as per the shares hold by them from the profit
earned by the company as they get the ownership of the company to the extent of shares hold
by them.
8.
(c) ₹ 1,80,000
Explanation:
Bank draft = ₹ 2,40,000 - ₹ 60,000 = ₹ 1,80,000
OR
(a) Capital Ratio
Explanation:
 Capital Ratio
9. (c) ₹ 60,000
Explanation:
₹ 60,000
10. (d) Option (iii)
Explanation:
₹ 29,000
11.
(c) Debited with 200
Explanation:
Q’s Current A/c Dr. 200
To P’s current A/c. 200
12.
(c) 2,000
Explanation:
Number of share issue
= 300000 ÷ 150
= 2000
13. (a) ₹ 50,000
Explanation:
Share Capital Account will be debited by Called-up amount (excluding premium).
Since all Calls have been made Share Capital Account will be debited by : 1,000 Shares × ₹
50 = 50,000
14. (a) Partnership Deed
Explanation:
Partnership Deed
15.
(c) 3 : 1
Explanation:
75:25
= 3:1
OR
(a) ₹ 27,500
Explanation:
 ₹64,000+₹46,000 ₹1,10,000
Total capital of the firm = 1
=
4
= ₹ 1,37,500
1−
5 5

Yogesh's share = ₹ 1,37,500 × = ₹ 27,500 1

16.
(c) Realisation Account
Explanation:
Realisation Account
17. Old Ratio of A and B = 2 : 1
New Ratio of A and B = 1 : 1
Sacrifice or Gain:
4 − 3
A= 2

3
−
1

2
= 6
= 1

6
(Sacrifice)
2 − 3
B= 1

3
−
1

2
= 6
= 1

6
(Gain)
A has sacrificed th share whereas B has gained th share.
1

6
1

18. PROFIT AND LOSS APPROPRIATION ACCOUNT

for the year ended 31st March, 2023
Dr. Cr.
Particulars ₹ Particulars ₹
To Interest on Capital By Profit & Loss A/c 3,50,000
D's Capital A/c 50,000 By Interest on Drawings:
E's Capital A/c 70,000 D's Capital A/c 4,400
F's Capital A/c 80,000 2,00,000 E's Capital A/c 4,500 8,900
To Salary to F 1,20,000
To Profit transferred to:
D's Capital A/c 5

20
9,725
E's Capital A/c 7

20
13,615
F's Capital A/c 20
8
15,560 38,900
3,58,900 3,58,900
OR
In The Books of Rahul and Mohit
JOURNAL ENTRIES
Date Particulars L.F. Dr. (₹) Cr. (₹)
2022
Rahul's Capital A/c Dr. 2,760
April 1
To Mohit’s Capital A/c
2,760
(Adjustment for omitted of interest on capital)
Working Note:
STATEMENT OF ADJUSTMENTS
Rahul's Capital Mohit's Capital
Particulars Firm
A/c A/c
Dr.(₹) Cr.(₹) Dr.(₹) Cr.(₹) Dr.(₹) Cr.(₹)
Profit wrongly distributed, now
52,000 ____ 8,000 ____ ____ 60,000
taken back (A)
Interest on Capital should be
____ 5,400 ____ 4,800 10,200 ____
provided (B)
Profit correctly distributed (C) ____ 43,840 ____ 5,940 49,800 ____
52,000 49,240 8,000 10,760 60,000 60,000
Net Effect 2,760 (Dr.) 2,760 (Cr.) ____
A. Distribution of Profit before rectification:
Rahul(₹) Mohit(₹)
First ₹ 20,000 20,000 ____
Remaining ₹ 40,000 in the ratio of 4 : 1 32,000 8,000
52,000 8,000
B. Interest on Capital:
Rahul = ₹ 90,000 × 6

100
= ₹ 5,400
Mohit = ₹ 80,000 × 6

100
= ₹ 4,800
C. Distribution of Profit after rectification (₹ 60,000 - ₹ 5,400 - ₹ 4,800 = ₹ 49,800) will be as
follows:
Rahul(₹) Mohit(₹)
First ₹ 20,000 20,000 ____
Remaining ₹ 29,800 in the ratio of 4 : 1 23,840 5,960
43,840 5,960
19. Books of Raj Ltd.
Journal Entries
Debit Credit
Date Particulars L.F. Amount Amount
(₹) (₹)
Furniture A/c Dr. 2,20,000
To M/s. Furniture Mart 2,20,000
(Being purchased furniture of ₹ 2,20,000 from M/s.
Furniture Mart)

M/s. Furniture Mart Dr. 1,10,000

To Bills Payable A/c 1,10,000
(Being 50% of the amount was paid to M/s.
Furniture Mart by accepting a Bill of Exchange or
Bills Payable)

M/s. Furniture Mart Dr. 1,10,000

To 9% Debentures A/c 1,00,000
To Securities Premium A/c 10,000
(Being 1,000 debentures of 100 each issued to M/s.
Furniture Mart at a premium of 10% in satisfaction
of purchase consideration)
Point of Knowledge:-
Number of Debentures to be issued = 1,10,000

100+10
= 1,000 Debentures
OR
The rules of table 'F' of Schedule I of the Companies Act, 2013 shall extend in the absence of
the Articles of Association. There must be an interval between making two calls for at least
one month.
20. Capital Employed
(i) Liabilities Side Approach: ₹ ₹
Partners' Capitals
Gaurav 2,00,000
 Ashish 2,00,000 4,00,000
Add: Reserves 1,80,000
5,80,000
Less: Investment (Non-trade)* 1,00,000
Fictitious Assets-Deferred Revenue Expenditure (Advertisement
20,000
Suspense)
Goodwill 60,000 1,80,000
Capital Employed 4,00,000
(ii) Assets Side Approach:
Total Assets 7,80,000
Less: Fictitious Assets-Deferred Revenue Expenditure (Advertisement
20,000
Suspense)
Goodwill 60,000
Investment (Non-trade)* 1,00,000
Sundry Creditors 1,80,000
Outstanding Expenses 20,000 3,80,000
Capital Employed 4,00,000
*Unless Investments are stated to be trade investments, they are taken to be non-trade
investments. They are, therefore, deducted to calculate Capital Employed.
21. JOURNAL
Date Particulars L.F. Dr. (₹) Cr. (₹)
Bank A/c Dr. 1,60,000
To Share Application A/c
(Application money received on 8,000 sales @. ₹ 20 1,60,000
each)

Share Application A/c Dr. 1,60,000

To Share Capital A/c 1,00,000
To Share Allotment A/c 40,000
To Bank A/c
20,000
(Application money adjusted)

Share Allotment A/c Dr. 1,50,000

To Share Capital A/c
1,50,000
(Allotment due on 5,000 shares @ ₹ 30 each)

Bank A/c Dr. 1,20,000

To Share Allotment A/c(₹ 1,50,000 - ₹ 40,000) 1,10,000
To Calls in Advance A/c (200 shares times ₹ 50)
10,000
(Allotment money received)

Share First Call A/c Dr. 1,00,000

To Share Capital A/c
1,00,000
(First Call due on 5,000 shares @ ₹ 20 each

Bank A/c Dr. 90,000

Calls in Arrears A/c (300 × ₹ 20) Dr. 6,000
Calls in Advance A/c (200 × ₹ 20) Dr. 4,000
To Share First Call A/c 1,00,000

Alternatively:
Bank A/c Dr. 90,000
Calls in Advance A/c Dr. 4,000
To Share First Call A/c
94,000
(First call money received except on 300 shares)

Share Second & Final Call A/c Dr. 1,50,000

To Share Capital A/c
1,50,000
(Second Call due on 5,000 shares @ ₹ 30 each )

Bank A/c Dr. 1,35,000

Calls in Arrears A/c (300 × ₹ 30) Dr. 9,000
Calls in Advance A/c (200 × ₹ 30) Dr. 6,000
 To Share Second and Final Call A/c 1,50,000
Alternatively:
Bank A/c Dr. 1,35,000
Calls in Advance A/c Dr. 6,000
To Share Second & Final Call A/c
1,41,000
(Second & Final Call received except on 300 shares)
22. Books of Paras and Priya
Journal
Amount Amount
Particulars L.F.
₹ ₹
1) Bank A/c Dr. 3,000
To Realisation A/c 3,000
(Unrecorded furniture sold)
2) Bank A/c Dr. 600
To Realisation A/c 600
(Bad Debt recovered which was previously written off as bad)
3) Paras’s Capital A/c Dr. 30,000
To Realisation A/c 30,000
(Unrecorded goodwill taken over by Paras)
4) Priya’s Capital A/c Dr. 300
To Realisation A/c 300
(Unrecorded Typewriter estimated ₹ 400 taken over by Priya at
25% less price)
5) Paras’s Capital A/c Dr. 300
Priya’s Capital A/c Dr. 300
To Realisation A/c 600
(100 shares of ₹ 10 each which were not recorded in the books
taken @ ₹ 6 each by Paras and Priya and divided between them
in their profit sharing ratio)
23. Issued shares 50,000 of ₹ 10 each at a premium of ₹ 2 Applied share 65,000
Allotment made as Payable as:
Applied Alloted Application ₹ 5 (3 + 2)
60,000 50,000 Allotment ₹4
5,000 NIL First and Final Call ₹3
65,000 50,000 ₹ 12 (10 + 2) per share
Books of CTE Ltd.
Cash Book
Dr. Cr.
Bank Bank
Date Particulars L.F. Date Particulars L.F.
(₹) (₹)
Equity Share Equity Share Application
3,25,000 25,000
Application (5000 × ₹ 5)
Equity Share
1,47,900
Allotment
Equity Share First and
1,47,900 Balance c/d 6,02,100
Final Call
Equity Share Capital 6,300
6,27,100 6,27,100
Books of X Limited
Journal
Date Particulars L.F. Dr. (₹) Cr. (₹)
Equity Share Application A/c Dr. 3,00,000
To Equity Share Capital A/c (50,000 share × ₹ 3) 1,50,000
To Securities Premium (50,000 share × ₹ 2) 1,00,000
To Equity Share Allotment A/c
(Share application money of 50,000 shares transferred to
50,000
share capital at ₹ 3 each and to premium ₹ 2 each and ₹
50,000 adjusted on allotment)

Equity Share Allotment A/c Dr. 2,00,000

 To Equity Share Capital A/c
2,00,000
(Allotment due on 50,000 shares at ₹ 4 each)

Equity Share First and Final Call A/c Dr. 1,50,000

To Equity Share Capital A/c
1,50,000
(First and final call due on 50,000 shares at ₹ 3 each)

Equity Share Capital A/c (700 share × ₹ 10) Dr. 7,000

To Share Forfeiture A/c 2,800
To Equity Share Allotment A/c 2,100
To Equity Share First and Final A/c (700 share × ₹ 3)
(700 shares of ₹ 10 each forfeited for the non-payment of 2,100
amount due)

Share Forfeiture A/c Dr. 700

To Equity Share Capital A/c
(Loss on issue ₹ 1 on 700 shares charged from the Share 700
Forfeiture Account)

Share Forfeiture A/c Dr. 2,100

To Capital Reserve A/c
(Balance in Share Forfeiture after re-issue transferred to 2,100
Capital Reserve)
Working Notes:-
Mr. Sundar’s Share
Number of shares applied by Mr. Sundar = = 840 shares
60,000
× 700
50,000

Money received on Application 840 shares × ₹ 5 = 4,200

Less: Money transferred to Share Capital 700 shares × ₹ 3 = (2,100)
Less: Securities Premium 700 shares × ₹ 2 = (1,400)
Excess money on Application 700
Allotment due 700 shares × ₹ 4 = 2,800
Less: Excess money on Application (700)
Calls-in Arrears on Allotment 2,100
Share Allotment
Share Allotment due 50,000 × ₹ 4 = 2,00,000
Less: Excess money on Application = (50,000)
Less: Calls-in-Arrears = (2,100)
Money received on Application 1,47,900
Share First and Final Call
Share First and Final Call due 50,000 Shares × ₹ 3 = 1,50,000
Less: Calls in Arrears on 700 shares × ₹ 3 = 2,100
Money received on First and Final Call 1,47,900
Capital Reserve
Money received on Application from Mr. Sundar = ₹ 4,200
Less: Securities Premium 700 × ₹ 2 = ₹ (1,400)
Share Forfeiture Cr. 2,800
Share Forfeiture 700 × ₹ 1 Dr. (700)
Capital Reserve 2,100
OR
Amount Payable on:
Application ₹2
Allotment ₹5 (3+2)
First Call ₹2
Called-up ₹9 (7+2)
Books of Arun Ltd.
Journal
Date Particulars L.F. Dr. (₹) Cr. (₹)
Bank A/c Dr. 40,000
To Share Application A/c
(Share application money received for 20,000 shares at ₹ 40,000
2 per share)

Share Application A/c Dr. 40,000

 To Share Capital A/c
(Share application of 20,000 shares at ₹ 2 per share 40,000
transferred to Share Capital Account)

Share Allotment A/c Dr. 1,00,000

To Share Capital A/c 60,000
To Securities Premium A/c
(Share allotment due on 20,000 shares at ₹ 5 per share 40,000
including ₹ 2 premium)

Bank A/c Dr. 1,00,000

To Share Allotment A/c
(Share allotment received on 20,000 shares at ₹ 5 per 1,00,000
share)

Share First Call A/c Dr. 40,000

To Share Capital A/c
40,000
(Share first call due on 20,000 shares at ₹ 2 per share)

Bank A/c Dr. 38,900

Calls-in-Arrears A/c Dr. 2,000
To Share First Call A/c 40,000
To Calls-in-Advance A/c
(Share first call received on 39,000 shares at ₹ 2 each,
900
300 shares paid calls-in-advance at ₹ 3 per share and
1,000 shares failed to pay to first call money)
As per the Schedule III, of Companies Act, 2013, the Company's Balance Sheet is presented
as follows.
Arun Ltd.
Balance Sheet
Particulars Note No. ₹
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital 1 1,38,000
 b. Reserves and Surplus 2 40,000
2. Non-Current Liabilities
3. Current Liabilities
a. Other Current Liabilities 3 900
TOTAL 1,78,900
II. Assets
1. Non-Current Assets
2. Current Assets
a. Cash and Cash Equivalents 4 1,78,900
TOTAL 1,78,900
NOTES TO ACCOUNTS
Note No. Particulars ₹
1 Share Capital
Authorised Share Capital
50,000 shares of ₹ 10 each 5,00,000
Issued Share Capital
20,000 shares of ₹ 10 each 2,00,000
Subscribed, Called-up and Paid-up Share Capital
20,000 shares of ₹ 10 each, ₹ 7 Called-up and Paid-up 1,40,000
Less: Calls-in-Arrears (2,000) 1,38,000
2 Reserves and Surplus
Securities Premium 40,000
3 Other Current Liabilities
Calls-in-Advance 900
4 Cash and Cash Equivalents
Cash at Bank 1,78,900

24. Dr Revaluation Account Cr

 Amt Amt
Particulars Particulars
(Rs) (Rs)
To Stock A/c 2,500 By Plant A/c 2,500
To Provision for Doubtful Debts By Loss Revaluation
150
A/c transferred to
W's Capital A/c (150×3/5) 90
R's Capital A/c (150×2/5) 60 150
2,650 2,650
Partners' Capital
Dr Cr
Account
W
Particulars W (Rs) R(Rs) B(Rs) Particulars R(Rs) B (Rs)
(Rs)
To Revaluation
90 60 - By Balance b/d 20,000 15,000 -
A/c
To Goodwill
2,400 1,600 - By Cash A/c - - 15,000
A/c
By Investment
To Balance c/d 23,210 17,140 15,000 2400 1600
Fluctuation Fund A/c
By Premium for
3,300 2,200 -
Goodwill A/c
25,700 18,800 15,000 25,700 18,800 15,000
Balance Sheet
Liabilities Amt (Rs) Assets Amt (Rs)
Creditors 17,500 Cash 23,000
Bank Loan 10,000 Debtors 10,000
Capital A/cs (-) Provision for Doubtful Debts (500) 9,500
W 23,210 Stock (12,500-2,500) 10,000
R 17,140 Patents 10,350
B 15,000 55,350 Plant (17,500+2,500) 20,000
 Investments 10,000
82,850 82,850
Working Note
10,000+7,000+8,500+7,500
Average Profit = 4
= Rs8, 250

Goodwill = Average Profit × Number of Years’ Purchase

= 8,250× 2.5= Rs 20,625
B's share = 20, 625 × 4

15
= Rs5, 500 which will be distributed among W and R in their
sacrificing ratio, i.e. 3:2.
W's share = 3/5 × 5500 = 3300
R's share = 2/5 × 5500 = 2200
Loss on Revaluation transferred to
W's Capital A/c (150×3/5) = 90
R's Capital A/c (150×2/5) = 60
Distribution of Investment fluctuation Fund in old Ratio
W's share = 4,000×3/5 = 2400
R's share = 4,000×2/5 = 1600
Goodwill appearing in the balance sheet is to be written off in old sharing ratio
W's share = 4,000×3/5 = 2400
R's share = 4,000×2/5 = 1600
OR
Revaluation Account
Dr. Cr.
Particulars Amt(Rs) Particulars Amt(Rs)
By Machinery A/c(4,80,000 -
To Profit transferred to 1,20,000
3,60,000)
A's Capital A/c(1,20,000 x
60,000
5/10)
B's Capital A/c(1,20,000 x
36,000
3/10)
C's Capital A/c(1,20,000 x
24,000 1,20,000
2/10)
1,20,000 1,20,000
 Partner's Capital Accounts
Dr. Cr.
Particulars A B C Particulars A B C
To
Goodwill(Written 40,000 24,000 16,000 By Balance b/d 2,80,000 2,00,000 1,20,000
off)
By
To C's Capital
50,000 10,000 Revaluation 60,000 36,000 24,000
A/c(Goodwill)
A/c(Profit)
TO Cash A/c By A's Capital
(given in balance 1,88,000 A/c(Goodwill) 50,000
sheet ) (60000x 5 / 6 )
By B's Capital
To balance c/d 2,50,000 2,02,000 -- A/c(Goodwill) 10,000
(60000x 1 / 6 )
3,40,000 2,36,000 2,04,000 3,40,000 2,36,000 2,04,000
To Balance c/d 4,22,000 2,11,000 -- By balance c/d 2,50,000 2,02,000
By Cash A/c 1,72,000 9,000
4,72,000 2,21,000 1,88,000 4,72,000 2,21,000 1,88,000
Cash Account
Dr. Cr.
Particulars Amt(Rs) Particulars Amt(Rs.)
To Balance b/d 24,000 By C's Capital A/c 1,88,000
To A's Capital A/c 1,72,000 By Balance c/d 17,000
To B's Capital A/c 9,000
2,05,000 2,05,000
Balance Sheet of the new firm
Liabilities (Rs.) Assets (Rs.)
Machinery 3,60,000
Capitals A/c: 4,80,000
Add: apprication 1,20,000
 Liabilities (Rs.) Assets (Rs.)
A 4,22,000 Debtors 1,40,000
B 2,11,000 6,33,000 Stock 1,80,000
Current liabilites 1,84,000 Cash( balance of cash a/c) 17,000
8,17,000 8,17,000
Working Note:
i. Gaining Ratio = New Ratio - Old Ratio
ii. New ratio =2:1
iii. old ratio = 5:3:2
A= 2

3
−
5

10
=
20−15

30
=
30
5

B= 1

3
−
3

10
=
10−9

30
=
1

30

Thus, gaining a ratio between A and B is 5: 1.

iv. Calculation of C’s share of goodwill and its entry
C’s share of interest at retirement (given) = Rs 1,88,000
(-) C’s Capital after considering all adjustments = Rs (1,28,000)
C’s Share of goodwill (Hidden) = Rs 60,000
v. That goodwill is to be distributed in gaining ratio between old partners and the entry will
be
Journal entry will be :
A’s Capital A/c (60000x 5 / 6 ) 50,000
B’s Capital A/c (60000x 1/ 6 ) 10,000
To C’s Capital A/c
(Being C’s share of goodwill borne by A and B in gaining 60,000
ratio 5: 1)
vi. a. Goodwill given in balance sheet will be distributed between old partners in the old ratio.

b. Particular (Rs.)
A’s existing capital after all adjustment 2,50,000
B’s existing capital after all adjustment 2,02,000
(+) Amount payable to C( given in question) 1,88,000
(+) Amount requirement for cash( amount firm want to left in
17.000
account)
 Particular (Rs.)
6,57,000
(-) Cash available in firm (24.000)
Total capital of new firm 6.33.000
c. Total capital of the new firm should be readjusted in the new ratio of A and B
A (Rs.) B(Rs.)
New capital (6,33,000 in ratio of 2
(a) 4,22,000 2,11,000
: 1)
(b) (-) Existing capital of A and B 2,50,000 2,02,000
(c) Cash to be brought in (a - b) 1,72,000 9,000
25. Revaluation A/c
Dr. Cr.
Particulars Amount (₹) Particulars Amount (₹)
To Bad debts 10,000 By Land and Building 1,00,000
To Provision for doubtful debts 13,000
To Profit transferred to:
Anita's Capital A/c 30,800
Gaurav's Capital A/c 30,800
Sonu's Capital A/c 15,400 77,000
1,00,000 1,00,000
Note: If an examinee has debited Provision for doubtful debts with ₹ 23,000 (bad debts
₹ 10,000 + provision ₹ 13,000), full credit be given.
Partners Capital Accounts
Anita Gaurav Sonu Anita Gaurav Sonu
Particulars Particulars
(₹) (₹) (₹) (₹) (₹) (₹)
To Anita's
____ 80,000 40,000 By balance b/d 2,00,000 2,00,000 1,00,000
Capital A/c
By General
To Bank A/c 1,00,000 ____ ____ 12,000 12,000 6,000
Reserve
 To Anita’s By Revaluation
2,74,800 ____ ____ 30,800 30,800 15,400
loan A/c
To balance By Gaurav’s
____ 1,74,800 87,400 80,000 ____ ____
c/d Capital A/c
By Sonu’s
40,000 ____ ____
Capital A/c
By Investment
12,000 12,000 6,000
Fluctuation Fund
3,74,800 2,54,800 1,27,400 3,74,800 2,54,800 1,27,400
st
Balance Sheet of the reconstituted firm as at 31 March 2019
Liabilities Amount (₹) Assets Amount (₹)
Capitals Land and Building 6,00,000
Gaurav 1,74,800 Investments 1,10,000
Sonu 87,400 2,62,200 Debtors 1,30,000
Anita’s Loan 2,74,800 Less Provision for doubtful debts 13,000 1,17,000
Sundry Creditors 4,60,000 Stock 1,00,000
Cash 70,000
9,97,000 9,97,000
26. P. Ltd.
JOURNAL
Date Particulars L.F. Dr. (₹) Cr.(₹)
2022
April Bank A/c Dr. 11,00,000
1
To 8% Debenture Application & Allotment A/c
(Application money received on 10,000 debentures @ ₹ 11,00,000
110 each)

Apr-
8% Debenture Application & Allotment A/c Dr. 11,00,000
01
To 8% Debentures A/c 10,00,000
 To Securities Premium Reserve A/c
(Transfer of application money to Debentures A/c and 1,00,000
Securities Premium Reserve A/c)

Apr-
Property, Plant and Equipment A/c Dr. 2,50,000
01
To Current Liabilities A/c 40,000
To Vendor’s A/c
2,10,000
(Purchase of assets and liabilities)

Apr-
Vendor’s A/c Dr. 2,10,000
01
To 8% Debentures A/c 2,00,000
To Securities Premium Reserve A/c
(Issue of 2,000 debentures of ₹100 each at 5% premium 10,000
calculated as follows: = 2,000 debentures)
2,10,000

105

Apr-
Bank A/c Dr. 1,00,000
01
To Bank Loan A/c
(Loan taken, secured by the issue of ₹ 1,00,000 1,00,000
debentures)

Apr-
8% Debentures Suspense A/c Dr. 1,00,000
01
To 8% Debentures A/c
1,00,000
(Issue of debentures as collateral security)
EXTRACT OF BALANCE SHEET OF P LTD.
st
as at 31 March, 2023
st st
Particulars Note No. 31 March, 2023 31 March, 2022
1. EQUITY AND LIABILITIES: ₹ ₹
Shareholder’s Funds:
Reserve and Surplus 1 1,10,000
 Non-Current Liabilities:
Long-term Borrowings 2 13,00,000
Current Liabilities 40,000
II. ASSETS:
Non-Current Assets:
Property, Plant & Equipment 2,50,000
Notes to Accounts :
₹
(1) Reserve and Surplus:
Securities Premium 1,10,000
(2) Long-term Borrowings:
8% Debentures 13,00,000
Less: Debenture Suspense A/c (1,00,000) 12,00,000
Bank Loan
1,00,000
(On Collateral Security of 8% Debentures of ₹1,00,000)
13,00,000
Part B :- Analysis of Financial Statements
27.
(c) long-term analysis
Explanation:
long-term analysis
OR
(a) 2
Explanation:
2
28. (a) Activity Ratio
Explanation:
Inventory turnover ratio is calculated under the Activity Ratio.
i.e. Inventory Turnover Ratio = Cost of Revenue from operations or cost of goods
sold/Average Inventory. Average inventory is used instead of ending inventory because many
company's merchandise fluctuates greatly throughout the year.
29.
(d) No these are investing activities
Explanation:
Purchase of fixed assets will be classified as investing activity for both companies (finance
and non-finance company). As fixed Assets are Non-Current Investment for company.
OR

(b) Cash received as royalty

Explanation:
Cash received as royalty comes under the head of operating activities and rest are in
financing activities.
30.
(d) payment of dividend
Explanation:
transactions related to share capital are part of financing activites
31. i. All assets, that are expected to be realised within 12 months from the date of the Balance
Sheet, shall be treated as Current Assets. Hence, trade receivables in case of (i), (iii) and
(vii) shall be treated as current assets.
ii. Assets that are expected to be realised in more than 12 months from the date of Balance
Sheet:
a. If the period of realisation of asset is less than the period of operating cycle, the asset
shall be treated as Current Asset. Hence, trade receivables in case of (ii) and (vi) shall
be treated as Current Assets.
b. If the period of realisation of asset is more than the period of operating cycle, the asset
shall be treated as Non-Current Asset. Hence, trade receivables in case of (iv) and (v)
shall be treated as Non-Current Assets.
Long - term Debts
32. Debt-Equity Ratio =
Equity (Shareholders' Funds)

Long-term Debts = Long-term Borrowings

= ₹ 1,50,000
Equity = Share capital + Reserves and surplus + Share application money pending allotment
= ₹ 8,00,000 + ₹ 1,00,000 + ₹ 2,00,000 = ₹ 11,00,000
Debt Equity Ratio = 1,50,000

11,00,000
= 0.136 : 1
33. Comparative statement
Profit & Loss for 31st March 2022
 Absolute Percentage
Note 31/3/22 31/3/22
Particular change change
No ₹ (A) ₹ (B)
(C = B - A) (D = C

A
× 100 )
(I) Revenue from
20,00,000 26,00,000 60,00,000 30%
operation
(II) Expense
Employe Benefit
5,00,000 6,00,000 1,00,000 20%
expense
Other expense 10,00,000 12,00,000 2,00,000 20%
Profit before tax 5,00,000 8,00,000 3,00,000 60%
Less:- Tax @ 50% (2,50,000) (4,00,000) 1,50,000 60%
Profit after tax 2,50,000 4,00,000 1,50,000 60%
OR
Comparative Statement of Profit and Loss
for the year ended 31st March, 2015
Percentage
Absolute Change
Change
(Increase or
Particulars 2014 2015 (Increase or
Decrease)
Decrease)
(Rs.)
(Rs.)
(I) Revenue from Operations 8,00,000 12,00,000 4,00,000 50.00
(II) Total Income 8,00,000 12,00,000 4,00,000 50.00
(III) Expenses
a) Purchases of Stock-in-trade 5,20,000 7,80,000 2,60,000 50.00
b) Changes in Inventories of
80,000 40,000; (40,000) (50.00)
Stock-in-trade
c) Other Expenses 48,000 82,000 34,000 70.83
(IV)Total Expenses (a+b+c) 6,48,000 9,02,000 2,54,000 39.20
(V) Profit before Tax (II - IV) 1,52,000 2,98,000 1,46,000 96.05
(VI) Tax (60,800) (89,400) (28,600) (47.04)
 Percentage
Absolute Change
Change
(Increase or
Particulars 2014 2015 (Increase or
Decrease)
Decrease)
(Rs.)
(Rs.)
(IV) Profit after Tax (V-VI) 91,200 2,08,600 1,17,400 128.73
Working Note
2014 2015
Purchases of stock-in-trade 5,20,000 7,80,000
Changes in investors of stock-in-
80,000 40,000
trade
Cost of revenue from operations 6,00,000 8,20,000
Other expenses 48,000 82,000
(8% of cost of (10% of cost of revenue from
revenue) operations)
34. Cash flow Statement
Particulars Amount (₹) Amount (₹)
Cash flow from Operating Activity
Net Loss after tax (95,000)
(+) Provision for tax 51,000
Net loss before tax (44,000)
(+) Loss on sale of Machinery 18,000
(+) Depreciation 45,000
(+) Interest on Long term loan 7,500
Operating Profit before working capital Changes 26,500
(-) Decrease in trade payable (14,000)
(-) Increase in Inventories (7,000)
(+) Decrease in trade Receivable 14,000
(+) decrease in other current asset 4,000
Cash generated form operation 23,500
(-) tax paid (53,000)
Cash outflow from operating activity (29,500)

Cash flow from Investing Activity

Purchase of Machinery (2,69,000)
Sale of Machinery 62,000
Cash outflow form Investing Activity (2,07,000)
Cash inflow from financing activity 2,12,500
Net Decrease in Cash & Cash equivalent (24,000)
(+) opening cash & Cash equivalent 49,000
Closing Cash & Cash equivalent 25,000
Machinery A/c
Particulars Amount (₹) Particulars Amount (₹)
To balance b/d 2,15,000 By Provision for depreciation 20,000
To Bank 2,69,000 By Bank 62,000
By loss on sale 18,000
By balance c/d 3,84,000
4,84,000 4,84,000
Accumulated Depreciation A/c
Particulars Amount (₹) Particulars Amount (₹)
To Machinery A/c 20,000 By Bal b/d 23,000
By Depreciation 45,000
To Bal c/d 48,000
68,000 68,000
Provision for tax
Particulars Amount (₹) Particulars Amount (₹)
By Bal b/d 70,000
To Bank 53,000
 By Statement of
51,000
Profit & Loss
To Bal c/d 68,000
1,21,000 1,21,000
Interest on Long term loan:
= 60,000 × 10

100
×
3

12
+ 80,000 × 10

100
×
9

12

= 1,500 + 6,000
= 7,500