.

CBSE BOARD SAMPLE PAPER-1

(Academic Session : 2022 - 2023)

COMMERCE : CLASS-XII

ACCOUNTANCY SOLUTION
1. (C)
5
New Capital of the firm = 60,000 × = ` 3,00,000
1

Calculation of New Profit sharing ratio: Let the profit = 1:

1 4
Remaining profit of X and Y = 1 – =
5 5
5 4 20
X’s new ratio = × = ;
8 5 40
3 4 12
Y’s new ratio = × = ;
8 5 40
1 8
Z = or
5 40
New ratio 20 : 12 : 8 or 5 : 3 : 2 New capital of partners:
5
X’s capital = ` 3,00,000 × = 1,50,000;
10
3
Y’s capital = 3,00,000 × = 90,000
10
2. (C)
Share of A in profit = ` 40,000
Less Deficiency paid to C = ` 5.000.
So net amount received by A = ` 35,000.
3. (A)
Section 52(2) of the Companies Act, 2013 on use of the amount received as premium on securities:
As per section 52(2) of the Companies Act, 2013, use of the amounts received as premium on
securities is restricted to the following purposes only:
• issuing fully paid bonus shares to the members;
• writing off preliminary expenses of the company;
• writing off the expenses of, or the commission paid or discount allowed on any issue of securities
or debentures of the company;
• providing for the premium payable on the redemption of any redeemable Preference Shares of
any debentures of the company;
• in purchasing its own shares i.e., in case of buy back of shares.
OR
(D)
Amount of share capital = 12,000 shares x ` 70 = ` 8,40,000
Calls not received or calls in arrears = 12,000 shares x ` 40 = ` 4,80,000
Amount received which forfeited due to non-payment = 12,000 shares x ` 30 = ` 3,60,000

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4. (C)
Net profit before appropriations = ` 7,87,000
Net Profit After Appropriation (Interest on capital and salary) = ` 7,87,000 – ` 40,000 – ` 75,000 =
6
` 6,72,000 Commission = ` 6,72,000 × = ` 38,000
106
OR
(B)
Adjusted amount:
Increase in Land and Building 50,000
Increase in Creditors 40,000
Increase in Outstanding salaries (5,000)
Decrease in Furniture (50,000)
35,000
Sacrifice/Gaining Ratio = Old ratio – New ratio
2 1 4
U= – =
10 3 30
3 1 1
V= – =
10 3 30
5 1 5
W= – =
10 3 20
5
Amount Credited to W’s capital account = 35,000 × = 5833
30
5. (D)
If partnership deed is silent, then profit will be distributed among all partners equally. No partner
has the right to take any salary, bonus, commission form the firm.
6. (A)
9000 shares × ` 2 per share = ` 18,000 is the amount which remains due or not received from
shareholders. So, it is debited to Call-in-arrears account.
OR
(D)
Convertible debentures are long – term debt instruments issued by a company that can be
converted into equity shares of the company on a future date. In other word, Convertible
debentures are those on which equity shares may be exchanged at the option of the debenture
holder.
7. (B)
Money received on application forfeited due to non-payment of allotment and call: 9000 shares x
` 30 per share = ` 2,70,000
8. (D)
Value of a share = ` 100
Full face value received on shares = 2,00,000 – 9,000 = 1,91,000 shares
Total Amount Received = 1,91,000 shares x ` 100 = ` 1,91,00,000
Partial amount Received = 9,000 shares x ` 30 per share = ` 2,70,000
Amount Transferred to Share capital = ` 1,91,00,000 + ` 2,70,000 = ` 1,93,70,000
9. (A)
10. (B)
Goodwill which is already existed into the books written off through all partner’s capital account.
For this, Partners capital account debited and Goodwill credited (Decrease in Assets).
11. (D)
The correct sequence is Trading and Profit & Loss A/c, Profit & Loss Appropriation Account and
Balance Sheet.
12. (D)
Total Profit during the period of
2,00,000
Death = ` × 60,000 = ` 20,000
6,00,000
1
Share of Deceased Partner = ` 20,000 × = ` 4,000
5
1 4
Remaining profit share of A and R = 1 – =
15 5
Total capital of A and R = ` 45,000 + ` 35000 = ` 80,000
5
New capital of the firm = ` 80,000 × = ` 1,00,000
4
1
G’s Capital = ` 1,00,000 × = ` 20,000
5
13. (A)
Balance = ` 4,50,000 – ` 90,000 = 3,60,000
14. (A)
Calculation of Hidden Goodwill
Total Capital of all partners = ` 90,000 + ` 70,000 + ` 1,00,000 = ` 2,60,000
New capital on the basis of Prateek = ` 1,00,000 × 3/1 = 3,00,000
Value of Good will = ` 3,00,000 – ` 2,60,000 = ` 40,000
15. (C)
Interest on Drawing:
6 6
Mohit = ` 50,000 × × = ` 1,500
100 12
6 6
Rachit = ` 40,000 × × = ` 1,200
100 12
6 6
Mayank= ` 30,000 × × = ` 900
100 12
OR
(C)
Total drawing of year = ` 20,000 × 2 = ` 40,000
Interest on drawing = ` 40,000 × 9/100 × 9/12 = ` 2,700
16. (B)
External liabilities are the liabilities payable anyhow by the firm. If there is no information related
to payment to as such liabilities then it is assumed that these are fully payable.
17. (A) Calculation of new capitals of the existing partners Balance in Asha’s Capital (after all
adjustments) = 1,60,000
Balance in Lata’s Capital = 80,000
Total Capital of the New Firm = 2,40,000
3
Based on the new profit sharing ratio of 3:1 Asha’s New Capital = Rs. 2,40,000 × = 1,80,000
4
 1
Lata’s New Capital= Rs. 2,40,000 × = 60,000
4
Note: The total capital of the new firm is based on the sum of the balance in the capital accounts
of the continuing partners.
(B) Calculation of cash to be brought in or withdrawn by the continuing partners:
Asha Lata
(Rs.) (Rs.)
New Capitals 1,80,000 60,000
Existing Capitals 1,60,000 80,000
(C) Cash to be brought in on (paid off) 20,000
Books of Asha and Lata
Journal
Particulars L.F. Debit Credit
Amount Amount
(`) (`)
Cash A/c Dr. 20,000
To Asha Capital A/c 20,000
(Cash brought by Asha)
Lata's Capital A/c Dr. 20,000
To Cash A/c 20,000
(Surplus capital withdrawn by Lata)

18. Value of Firm’s Goodwill

Sam’s capital = Rs. 60,000
Sam’s share = Total capital of new firm 5 x ` 60,000 = 3,00,000
Hems + Nem’s + Sam’s = ` 80,000 + ` 50,000 + ` 60,000 = ` 1,90,000
Goodwill of the firm = ` 1,10,000 (` 3,00,000 – ` 1,90,000)
Sam’s share = x ` 1,10,000 = ` 22,000
Books of Hem, Nem, and Sam
Journal
Particulars L.F. Debit Credit
Amount Amount
(`) (`)
Bank A/c Dr. 60,000
To Sam's Capital A/c 60,000
(Cash brought by Sam for his capital)
Goodwill A/c Dr. 1,10,000
To Hem's Capital A/c 66,000
To Nem's Capital A/c 44,000
(Credit given for goodwill to Hem and Nem on
Sam's admission)
 OR
Table Showing Adjustment
Particulars A B C Total
Interest already credited@12% 1,80,000 3,60,000 7,20,000 12,60,000
Interest that should have been
1,50,000 3,00,000 6,00,000 10,50,000
credited@10%
Partners Over credited with 30,000 60,000 1,20,000 2,10,000
By recovering this interest from the
partners, the profits of the firm will be
42,000 63,000 1,05,000 2,10,000
increased by ` 2,10,000. This profit
will be divided in the ratio of 2:3:5.
12,000 3,000 15,000
Net Effect
Cr. Cr. Dr.
Adjustment Entry:
Journal Entry
Particulars L.F. Debit Credit
Amount Amount
(`) (`)
C's Current A/c Dr. 15,000
To A's Current A/c 12,000
To B’s Current A/c 3,000
(Interest excessive charged, now rectified)
19.
Journal
Particulars L.F. Debit Credit
Amount Amount
(`) (`)
As Capital A/c Dr. 9,000
Bs Capital A/c Dr. 6,000
To Goodwill A/c 15,000
(Being existing goodwill written off in the old profit
sharing ratio of old partners 3:2)
Bank A/c Dr. 36,000
To C's Capital 36,000
(Being Capital brought in by C by cheque)
C's Capital A/c Dr. 16,800
To A's Capital A/c 10,080
To B's Capital A/c 6,720
(Being credit given to A and B for C's share of
goodwill in their sacrificing ratio 3 : 2)
Note : Calculation of hidden goodwill
1
C’s Capital for share = 36,000
5
 5
Therefore, the total capital of the new firm on the basis of C’s capital should be 36,000 × =
1
1,80,000
Less: Actual Capital of A, B, and C
A’s Capital + B’s Capital + C’s Capital + Reserves + P&L a/c – Goodwill – Deferred Advertisement
Expenditure = 96,000
Value of hidden goodwill 84,000
C’s share in the hidden goodwill
1
84,000 × = 16,800
5
20.
Journal Entry
Particulars L.F. Debit Credit
Amount Amount
(`) (`)
Share Capital A/c Dr. 20,000
To Share Forfeiture 14,000
To Share Second and Final Call A/c 6,000
(Being 200 share forfeited for non-payment of final
call at ` 30 per share)
Bank A/c Dr. 6,000
Shares Forfeiture A/c Dr. 9,000 15,000
To Share Capital A/c
(Being reissue of 150 shares of ` 100 each, issued
as fully paid for ` 60 each)
Share Forfeiture A/c Dr. 4,500
To Capital Reserve A/c 4,500
(Being profit on reissue of 150 forfeited shares
transferred to capital reserve)
OR
Journal Entry
Particulars L.F. Debit Credit
Amount Amount
(`) (`)
Bank A/c Dr. 18,000
To Debenture Application and Allotment A/c 18,000
(Being application money received on debentures)
Debenture Application and Allotment A/c Dr. 18,000
Loss on Issue of Debenture A/c Dr. 4,000
To 15% Debentures A/c 22,000
To Premium on Redemption of Debentures A/c 2,000
(Being issue of Debentures at 10% discount an
redeemable at 10% premium)
Statement of Profit and Loss Dr. 4,000
To Loss on Issue of Debentures A/c 4,000
(Being loss on issue of Debentures written off)
21. (a) P is bound to pay Rs 20,000 together with profit of Rs 5,000 to the firm because this amount
belongs to the firm.
As per Principal and Agent relationship, P is principal as well as agent to the firm and to Q and R.
As per this rule, any profit earned by an agent (P) by using the firm’s property is attributable to the
firm.
(b) Q is liable to pay Rs 5,000 to the firm. As per the Partnership Act, 1932, every partner of a
partnership firm is liable to the firm for any loss caused by his/her will full negligence.
Here Q is solely responsible for the loss of Rs 1,000 because he used the property of the firm and
also represented himself as a principal rather than an agent to the other partners and to the firm.
(c) P and Q may buy goods from A Ltd.
As per Partnership Act, 1932, a partner has a right to buy and sell goods without consulting the
other partners unless a Public Notice has been given by the partnership firm to restrict the partners
to buy and sell.
(d) C will not be admitted because one of the partners P has not agreed to admit C.
As per Partnership Act, a new partner cannot be admitted into a firm unless all the existing partners
agree on the same decision. In other words, a new partner can be admitted in a partnership firm
with the consent of all the existing partners.

22.
Balance Sheet of Nishant Co. Ltd.
Particulars Current Previous
Year Year
I. EQUITY AND LIABILITIES
1. Shareholders' Funds: 1 42,50,000
(a) Share Capital 2 5,00,000
(b) Reserve and Surplus
II. ASSETS 47,50,000
3
2. Current Assets 47,50,000
(a) Cash and Cash Equivalents
Notes to Account:
Particulars Previous Year
1. Share Capital:
Authorized Capital:
1.00,000 equity shares of ` 100 each 1,00,00,000
Issued Capital:
50.000 equity share of ` 100 each 50,00,000
Subscribed and fully paid
25,000 equity share of ` 100 each 25,00,000
2. Reserve and Surplus
Security Premium Reserve 1,00,000
3. Cash and Cash Equivalents
Cash at Bank (14.000 × 160) 47,50,000
 Journal
Particulars L.F. Debit (`) Credit (`)
Bank a/c Dr 7,50,000
To Equity Share Application A/c : 7,50,000
(Application money received)
Equity Share Application A/ Dr. 7,50,000
To Equity Share Capital A/c 7,50,000
(Application money transferred to share capital)
Equity Share Allotment A/c Dr. 1,50,000
To Equity Share Capital A/c 10,50,000
To Security Premium Reserve A/c 5,00,000
(Money due on the allotment with premium)
Bank A/c Dr. 7,50,000
To Equity Share allotment A/c 7,50,000
(Money received on allotment)
Equity Share First Call A/c Dr. 7,50,000
To Equity Share Capital A/c 7,50,000
(Money due on the first call)
Bank A/c Dr. 7,50,000
To Equity Share 1st Call A/c 7,50,000
(First call money received)
23.
Balance Sheet as of 1st April 2018
Liabilities Amount (`) Assets Amount (`)
Sundry Creditors 40,000 Cash in Hand (WN2) 76,000
Contingency Reserve 2,000 Sundry Debtors 46,000
Capital A/cs: Less : Provision for 44,000
A 63,000 Doubtful Debts 2,000
B 27,000 Stock-in-trade 30,000
C 30,000 1,20,000 Furniture 12,000
1,62,000 1,62,000
Working Notes
Dr. Partners Capital Account Cr.
Particulars A B C Particulars A B C
To Revaluation 26,600 11,400 By Balance b/d 50,000 40,000
A/c (Loss) (WN 4)
To Cash A/c By Premium for 7,000 3,000
(Surplus) 7,000 Goodwill A/c
(Balancing By Reserve A/c 20,000
Figure) By Bank Overdraft A/c 30,000
To Balance c/d 63,000 27,000 30,000 By Cash A/c (Deficit)
(WN 2) (Balancing Figure) 7,000
89,600 45,400 30,000 89,600 45,400 30,000

2. Calculation of New Profit-sharing Ratio and Proportionate Capital

1 3 1
C joins the firm for th share of profits. Therefore, th ( i.e.. 1 – ) will be shared by A and B in
4 4 4
the ratio of 7:3.
 3 7 21 3 3 9 1 10
As new share = × = ; Bs new share = × = C’s share = or . New Profit-sharing
4 10 40 4 10 40 4 40
4
Ratio = 21 : 9: 10. Total Capital of the new firm on the basis of C’s Capital = 30,000 × = 1,20,000.
1
21 9
A’s Capital in New Firm = 1,20,000 × = 63,000; B’s Capital in New Firm = 1,20,000 × = 27,000.
40 40
3. The partners decide to retain 20% of Reserve as Contingency Reserve. Therefore, the balance,
i.e.. 8,000 is distributed between the old partners in their old profit-sharing ratio.
Dr. Revaluation Account Cr.
Particulars Amount Particulars Amount
(`) (`)
To Stock A/c (50,000 × 40/100) 20,000 By Loss transferred to:
To Furniture A/c (30,000 × 60/100) 18,000 As Capital A/c (38,000 × 7/10)
26,600
B's Capital A/c (38,000 × 3/10)
11,400 38,000
38,000 38,000
24.
Books of Arti Ltd.
Journal Entry
Particulars L.F. Debit (`) Credit (`)
Bank A/c Dr. 7,00,000 7,00,000
To Share Application A/c
(Being application money received on 1,40,000 shares
per share)
Share Application A/c Dr. 7,00,000 4,00,000
To Share Capital A/c 2,80,000
To share Allotment a/c 20,000
To Bank A/c
(Being application money transferred to share capital
and excess application money adjusted to share
allotment and returned the balance)
Share Allotment A/c Dr. 7,00,000 4,00,000
To Share Capital A/c 3,00,000
To Securities Premium Reserve A/c
(Being allotment money due on 80,000 share per
share including premium *4 per share)
Bank A/c Dr. 7,20,000 4,20,000
Calls-in-Arrears A/c Dr. 3,20,000
To Share Allotment A/c
(Being allotment money received except on 900
shares)
Share Capital A/c Dr. 4,33,400 4,40,000
Securities Premium Reserve A/c Dr. 6,600
To Calls-in-Arrears A/c
To Share Forfeited A/c
(Being 900 shares of Rajiv forfeited on non-payment of
allotment money)
Working Notes:
Adjustment of excess application money towards allotment money:
Allotment money not paid by Rajiv Clearly, Rajiv belongs to category
(i) – pro – rata basis = 80,000 : 60,000 = 4 : 3.
3
Number of shares applied for = 1,200. Therefore, number of share allotted = 1,200 × = 900
4
Excess application money = (1,200 – 900) × ` 5 = ` 1,500
Unpaid allotment money = (900 × ` 9) – ` 1500 = ` 6,600
Balance Sheet of Arti Ltd.
Particulars Current Previous
Year (`) Year(`)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds: 1 7,97,000
(a) Share Capital 2 3,16,400
(b) Reserve and Surplus
Notes Accounts:
Particulars Current Year Previous
(`) Year(`)
(1) Shareholders' Capital: 20,00,00
Authorized capital 8,00,000
2,00,000 equity shares of ` 10 each
issued capital
80,000 equity shares of ` 10 each issued to public
Subscribed Capital 7,91,000
Subscribed and fully paid capital 6,0000 7,97,000
79,100 equity shares of ` 10 each
Add: Shares forfeited A/c
(2) Reserve and Surplus 3,16,000
Securities Premium Reserve (3,20,000 – 3,600)
OR
Journal
Date Particulars L.F. Debit (`) Credit (`)
Entry for forfeiture of 500 shares in all cases
Share Capital A/c (500 × ` 8) Dr. 4,000
To Forfeited Shares A/c (500 × ` 5) 2,500
To Shares First Call A/c (500 × ` 3) 1,500
(Being 500 shares forfeited for non-payment of
first call)
Bank A/c (500 × ` 5) Dr. 2,500
Forfeited Shares A/c (500 × ` 3) Dr. 1,500
To Share Capital A/c 4,000
(Being 500 shares reissued for ` 5 per share)
Case 1 Forfeited Shares A/c Dr. 1,000
To Capital Reserve A/c 1,000
(Being Gain on reissue transferred to Capital
reserve)
 Bank A/c (500 × ` 9) Dr. 4,500
To Share Capital A/c (500 × ` 8) 4,000
To Security Premium A/c (500 × ` 1) 500
(Being 500 forfeited shares reissued for ` 9 per
Case 2 share, ` 8 called up)
Forfeited Shares A/c Dr. 2,500
To Capital Reserve A/c 2,500
(Being Gain on reissue transferred to Capital
reserve)
Bank A/c (500 × ` 8) Dr. 4,000
Forfeited Shares A/c (500 × ` 1) Dr. 1,000
To Share Capital A/c 5,000
(Being 500 shares reissued for ` 8 per share, as
Case 3 fully paid)
Forfeited Shares A/c Dr. 1,000
To Capital Reserve A/c 1,000
(Being Gain on reissue transferred to Capital
reserve)

25.
Dr. Revaluation Account Cr.
Particulars Amount Particulars Amount
(`) (`)
To Provision for Doubtful Debts A/c 12,000 By Furniture A/c 3,750
To Plant and Machinery A/c By Stock-in-Trade A/c 3,200
By Advertising Expenses A/c 2,100
By Loss on Revaluation
transferred to:
A's Capital A/c 2,100
B's Capital A/c 1,400
Cs Capital A/c 700 4,200
12,000 12,000
Dr. Partners Capital Account Cr.
Particulars A B C Particulars A B C
To Partner's Current A/c 5,000 By Balance b/d 1,20,000 80,000 40,000
To C's Capital A/c (WN 1) 5,000 8,000 2,500
To Revaluation A/c 2,100 1,400 700 15,000 10,000 5,000
To C's Capital A/c (WN 2) 5,000
To C's Executors' A/c 17,000 17,000
To Balance c/d 1,40,900 69,100
1,43,000 92,500 67,000 1,43,000 92,500 67,000
 Dr. C’s Executors’ Account Cr.
Date Particulars Amount Date Particulars Amount
2017 2017
Dec 31 To Bank: A/c June 30 By Cs Capital A/c 61,300
(30,650 + 3,065) 33,715
2018 Dec. 31 By Interest A/c (@ 10% for 3,065
Mar. 31 To Balance c/d 31,416 6 months) (61,300 ×
10/100 × 6/12)
2018
Mar. 31 By Interest A/c* 766
65,131 65,131
2018 2018
June 30 To Bank A/c 32,182 April 1 By Balance b/d 31,416
June 30 By Interest A/c
(30,650 × 10/100 × 3/12) 766
32,182 32,182
26.
Journal of A Ltd.
Date Particulars L.F. Debit Credit
(`) (`)
2021
Oct. 1 Sundry Assets A/c Dr. 4,30,000
Goodwill A/c (Balancing Figure) Dr. 40,000
To Sundry liabilities A/c 60,000
To Garg Ltd. 3,80,000
(Being Assets and liabilities of Garg Ltd. token over for a
consideration of ` 3,80,000)

Oct. 1 Garg Ltd Dr. 3,80,000

Discount on Issue of Debentures A/c Dr. 20,000
To 10% Debentures A/c 4,00,000
(Being 4.000, 10% Debentures of ` 100 each issued at a
discount of 10% to Garg Ltd.)
Oct. 1 Bank a/c Dr. 4,50,000
To Bank Loan A/c 4,50,000
(Being loan token from bank)
Oct 1 Debentures Suspense A/c Dr. 5,00,000
To 11% Debentures A/c 5,00,000
(Being 5,000 11% Debentures of ` 100 each issued as
collateral security)
Oct 1 Bank A/c Dr. 5,00,000
To Debentures Application and Allotment A/c 5,00,000
(Being Application money received for 5,000 debentures)
Oct. 1 Debentures Application and Allotment A/c Dr. 5,00,000
Loss on issue of Debentures A/c Dr. 25,000
To 11% Debentures A/c 5,00,000
To Premium on Redemption of Debentures A/c 25,000
(Being 5,000. 12% Debentures issued at par and
redeemable at 5% premium)
 2022
Mar. 31 Debenture Interest A/c Dr. 50,000
To Debenture holders' A/c 50,000
(Being Interest due on Debentures for the half year ended
31st March. 2022)
Mar. 31 Debenture holders" A/c Dr. 50,000
To Bank A/c 50,000
(Being interest paid to Debenture holders)
Mar. 31 Statement of Profit & Loss A/c Dr. 50.000 50.000
To Debentures' interest A/c
(Being transfer of Debentures' interest to Statement of
Profit and Loss)
Securities Premium A/c Dr. 40,000
To Discount on issue of Debentures A/c 20,000
To Loss on issue of Debentures A/c 20,000
(Discount and loss on issue of Debentures written off)
Part B
Financial Statement Analysis
27. (A)
Inter firm comparison means comparison between two companies. This is an advantage of financial
statement analysis.
OR
(A)
Change in inventories = Opening Inventories – Closing Inventories.
28. (B)
Current Assets
Current assets =
CurrentLiabilities
Current Assets
(Given) =
3,50,000
Current assets = ` 3,50,000 x 3 = ` 10,50,000
29. (C)
Tax Paid During the year = ` 50,000 + ` 65,000 – ` 75,000 = ` 40,000
OR
(B)
Purchase or sale of machinery is an investing activity.
In this case, because of purchase of machinery, flow of cash is outward.
30. (B)
The direct method is one of two accounting treatments used to generate a cash flow statement.
The statement of cash flows direct method uses actual cash inflows and outflows from the
company’s operations, instead of modifying the operating section from accrual accounting to a
cash basis.
31.
Items Headings Sub-Headings
Share Issue Expenses (to be written off in next Current assets Other Current assets
12 months)
Share Issue Expenses (to be written off in after Non Current Other Non Current
12 months) assets assets
Premium on Redemption of Debentures Non Current Other Long term
liabilities Liabilities
Debit balance of Statement of Profit and Loss Shareholder's Reserve and Surplus
Funds
Loan from bank Non Current Long term Borrowing
liabilities
Loan Repayable on demand Current liabilities Short term Borrowing
32. It is to be known that an ideal quick ratio is 1:1. If it is more, it is considered to be better. The idea
is that for every rupee of current liabilities, there should atleast be one rupee of liquid assets.
This ratio is better test of short term financial position of the company than the current ratio, as it
considers only those assets which can be easily and readily converted into cash. Inventory is not
included in liquid assets as it may take a lot of time before it is converted into cash.
Quick ratio thus is a more rigorous test of liquidity than the current ratio and, when used together
with current ratio, it gives a better picture of the short-term financial position of the firm.
20
33. Gross Profit = ` 6,00,000 × = ` 1,20,000
100
Total Revenue from Operations = Cost of Revenue from Operations + Gross Profit = ` 6,00,000 +
1,20,000 = ` 7, 20,000
CreditRevenue fromOperations
Trade Receivables Turnover Ratio =
Average TradeRececievables
` 5,40,000
Average Trade Receivables = = ` 90,000
100
Total of Opening and Closing Trade Receivables = ` 90,000 × 2 = ` 1,80,000
Since Opening Trade Receivables are 1/4th of Closing Trade Receivables, ratio between Opening
Trade Receivables and Closing Trade Receivables will be 1:4
1
Opening Trade Receivables = ` 1,80,000 × = ` 36,000
5
4
Closing Trade Receivables = ` 1,80,000 × = ` 1,44,000
5
OR
NetRevenue fromOperations
Working Capital Turnover Ratio =
Working Capital
Net Revenue from Operations = Cost of Revenue from Operations + Gross Profit
Revenue from Operations include a profit of 20% on Revenue from Operations therefore goods
R80 must have been sold for ` 100. As such, If cost of Revenue from Operations is ` 80, Revenue
from Operations ` 100. If cost of Revenue from Operations is ` 10,00,000, Revenue from
100
Operations are × 10,00,000 = ` 12,50,000
80
Working Capital = Current Assets – Current Liabilities = ` 1,75,000 – ` 50,000 = ` 1,25,000
` 12,50,000
Working Capital Turnover Ratio = = 10 Times
` 1,25,000
34.
Cash Flow Statement of Mohan Ltd.
for the year ended 31st March, 2021 as per AS-3
Particulars Amount (`) Amount (`)
1. Cash Flow from Operating Activities:
Profit as per the Balance Sheet (2,00,000 – 1,60,000) 40,000
Proposed Dividend 70,000 1,10,000
Net Profit before Taxation and Extraordinary items -
Adjustments:
Depreciation 70,000
Loss on sale of machine 10,000 80,000
Operating Profit before Working Capital changes 1,90,000
Add: Decrease in current assets 40,000
Debtors 40,000
2,30,000
Less: Increase in Current Assets
Inventories (20,000)
Bills Receivables (10,000)
Less. Decrease in Current liabilities
Trade Payables (20,000) – 50,000
Net Cash from Operations 1,80,000
Cash Flow from Investing Activities 20,000
Proceeds from Sale of Fixed Assets
Purchase of fixed Assets (2,80,000)
Net Cash outflow from Investing activity (2,60,000)
Cash Flow from Financing Activities
Issue of shares 1,00,000
Bank Loan Paid – 20,000
Dividend Paid (60,000)
Net Cash from Financing Activities 20,000
Net Decrease in Cash and Cash Equivalents (A + B + C) (60,000)
Add: Cash and Cash Equivalents in the beginning 90,000
Cash and Cash equivalents at the end 30,000
Dr. Fixed Account A/c Cr.
Particulars Amount (`) Particulars Amount (`)
To Balance b/d 4,00,000 By Bank A/c 20,000
To Bank A/c (Balancing figure) 2,80,000 By Profit and Loss A/c 10,000
Accumulated Depreciation 50,000
By Balance c/d 6,00,000
6,80,000 6,80,000
Dr. Investment Account Cr.
Particulars Amount (`) Particulars Amount (`)
To Fixed Assets 50,000 By Balance b/d 80,000
To Balance c/d 1,00,000 By Profit and Loss A/c 70,000
(Balance figure)
1,50,000 6,80,000