Quick Score CTF’s SAMPLE PAPER Solved Paper Time: 3 hours ‘Maximum Marks: 80 General Instructions: 1. This question paper contains two parts A and B. 2. Allparts of the question should be attempted at one place. 3. Show your working clearly, wherever required. PART-A (ACCOUNTING FOR PARTNERSHIP FIRMS & COMPANIES) Ram (aged 30 years), Mohan (aged 27 years) and Sohan (aged 16 years) decided to form a partnership firm. Is the formation of partnership fifm valid? Give reason. 2, Who will compensate whom at the time of change in profit sharing ratio among existin partners? a 3. Give journal entry for settlement of following at the time of dissolution of partnership firm, when: Loan from partner Suresh 820,000. Debit balance of Suresh Capital account £16,000 o 4. What is difference between Capital Reserve and Reserve Capital on the basis of time when it can be used? '5, Sonam Ltd, purchased its own 400, 13% Debentures of face value £500 each from open market (@ 7493 per debentures for cancellation purpose. Brokerage charges 0.5% on purchase price. ‘What will be the Gain/Loss on cancellation of debentures and where it will be transferred? a 6. X and Y are partners sharing profits and losses in the ratio of 5:4. A new partner Z is admitted in a firm, The ratio between Y and Z. will be the same as the ratio between X and Y. Calculate New ratio of X, Y and Z. 7, Sonu and Monu are partners sharing profits and losses in the ratio of 2:3 with capital £6,00,000 and %4,00,000 respectively. The partners are allowed Interest on capital @ 10% pa. and Salary to ‘Sonu 2,500 per month and to Monu £10,000 paa. Show the distribution of profits when profits before any adjustment for the year ended 31-03-2016 was €35,000. Case 1: When Interest on capital and salary are treated as charge against profits. Case 2: When Interest on capital and salary are treated as appropriation of profits. o 8. Amrit Ltd. granted 2,500 options of £10 each on 01-04-2013 at €45 per share when market price was £93 per share. The vesting period was 3 years and the maximum exercise period [Bh creeper At =‘was 4 months. Out of the total options only 2,000 options were exercised by the employees on 31-07-2016. a) Calculate the value of Options. b) Calculate the amount to be written off every year. ‘c)_ Pass necessary Journal entries on 31-03-2016 and 31-07-2016. 4) Identified the one value involved here. 9, Atlas Ltd. redeemed 400, 12% Debentures of 7100 each which were issued at a discount of 5 % by converting them into Equity shares of @10 each at a premium of 25% per shares. ass Journal entries: Case 1: When Debentures were converted into shares before due date of redemption. Case 2: When Debentures were converted into shares on due date of redemption. 10. David Ltd. has an authorized capital of 240,00,000 divided into equity shares of 210 each. ‘The company invited applications for 92,000 shares from public at a premium of 10% and 5,000 shares allotted to vendor Mohan Lid. as fully paid for machinery purchased. ‘The amount payable on these shares was as follows: On application On First Call B 2 Onallotment (441) ‘On Second and Final call @1 Applications for 90,000 shares were received from public. Second and Final call were not made by company. On 2,000 shares first call money was not received and shares forfeited. Out of forfeited shares 1,500 shares were reissued for 87 per share as 9 called up. Shanker holding 800 shares paid second call money with frst call money. ‘Show how Share Capital will appear in Balance Sheet of David Ld. as per Revised Schedule II Part I of Company Act, 2013 and also prepare Notes to Accounts. 11. Khanna, Seth and Mehta were partners in a firm sharing profits in the ratio of §:3:2. On 31-3-2016 their Balance Sheet was as follows: Liabilities Amount (®) Assets ‘Amount ®) Creditors 70,000 | Bank 12,200 Bills Payable 60,000 | Stock 27,800 Capital: Debtors 30,000 Khanna 80,000 Building 1,90,000, Mehta 90,000 1,70,000 | Seth’ Capital 10,000 Advertisement Suspense 30,000 ‘Total 3,00,000, 3,00,000 Seth died on 30-06-2016. The partnership deed provide the following terms on the death of a partner: i) Seth’ share of profit or loss tll the date of death was to be calculated on the basis of the ‘sales. It is also specified that sales during the year 2015-16 were %8,00,000 and profit was £1,60,000. The sales from 01-04-2016 to 30-06-2016 were €3,00,000. CTF Sample Papers: Accountancy 12 [Iii) Goodwill ofthe firm is valued at 3 years purchases ofthe average profits of last 4 years. 2015-16 70,000 2014-15 90,000 2013-14 250,000 2012-13 70,000 iii) Interest on Capital is to be allowed/charged on credit/debit balance @ 12% paa. ass all the necessary Journal entries at the time of Seth’s death. a 12. Amit and Ramit are partners and sharing profits and losses in the ratio of 3: 2. On 01-04-2016 they decided to share future profits and losses in the ratio of 2:1. An extract of their Balance ‘Sheet as at 31-03-2016 was as follows: Amount @%) Assets Amount (%) Investment Fluctuation Reserve 20,000 | Investment (At cost) 2,00,000 ‘Show the accounting treatment in each of the following cases: 4) Ifthe market value of investment is €2,00,000 ii) Ifthe market value of investment is €1,85,000 iii) If the market value of investment is 71,64,000 iv) Ifthe market value of investment is &2,14,000 * a 13. a) Atul Ltd. purchased business from Som Ltd. by paying in cheque of 88,00,000 and by issuing 2,00,000 Equity Shares of 210 each at a premium of 10%. ‘The business consisted the following assets and liabilities: Building %19,00,000, Machinery %14,00,000, Creditors %1,80,000 ass Journal entries in the books of Atul Ltd. and show your working clearly. b) RajaLtd. obtained a loan from SBI of %40,00,000. The company issued 50,000, 12% Debentures ‘of 7100 each as a collateral security in addition to primary security of machinery. Pass journal entries, assuming that Debentures Suspense Account maintained by company and how these items will be presented in the Balance Sheet of Company if 12% Debentures ‘of 290,00,000 has already been outstanding in the books of company. == 14. Complete the missing items/Figures in the following accounts: Profit and Loss Account For the Year Ended 31-03-2016 Particulars: Amount (%) Particulars Amount (®) ‘To Manager Commission (10% By Profit b/d z on Net Profit before Charging such commission) 20,000 To P/L Appropriation A/c (Net Profit transferred) ? [BB cr sunt rper cocProfit and Loss Appropriation Account For the Year Ended 31-03-2016 Particulars ‘Amount @) Particulars: ‘Amount To Salary Luv ? | By Profit and Loss A/c To Interest on Capital @ 10% p.a. (Net profit) ? Lav 50,000 By Interest on Drawings @ Kush res £80,000 | 12% pa. ‘To Commission Lav 2,400 Kush 8,000] Kush 1,800 4,200 To Divisible Profits (Transferred to Capital A/c) Lav (3/5)? Kush (2/5) _ 2 Partner's Capital Accounts Particulars Lay_| Kush Particulars Lav _| Kush ‘To Drawings 2 2 | By Balance B/D z z ‘To Interest on drawings ? 2 |BySalary 24,000 To Balance c/d 2 2 | By Interest on Capital 2 By Commission 2 2 2__|By P/L Appropriation A/c | z . Sohan and Suresh were partners in a firm sharing profits in the ratio of 7:3. On 31-03-2016 their Balance Sheet was as follows: Liabilities Amount @) ‘Assets Amount ®) Creditors 45.000 | Stock 40,000 Machinery Replacement Reserve 10,000 | Investment 50,000 Bank Overdraft 30,000 | Debtors 55,000 Capital: Building 1,00,000 Sohan 2,00,000 | Machinery 1,30,000 Suresh 1,00,000 | Goodwill 75,000 ‘Workmen Compensation Reserve | 20,000 Current Account (Current Account Sohan 30,000 Suresh 75,000 Total 4,80,000 | Total 4,80,000 On the above date the firm dissolved on the following terms: i) Creditors accepted the debtors in full settlement of their claims. ii) Bank overdraft discharged along with interest of €1,000 and claims paid to a worker 215,000. CTF Sample Papers: Accountancy 12 RH)iii) Sohan took over 50% of the stock at 20% less than book value and remaining stock realized at 110% of book value. iv) Investment sold by an auction for €40,000 and broker's commission €2,000. v) Building and machinery taken over by Suresh at agreed value of %5,00,000. Prepare Realisation Account, Partner's Current Accounts, Partners Capital accounts and Cash account. 5 16. Rajat and Ravi are partners sharing profits in capital ratio, their Balance Sheet as on 31-03-2016 vas as follows: Liabilities ‘Amount @) Assets ‘Amount Provision for doubtful debts 40,000 | Debtors 2,00,000. Creditors 12,000 | Bank 60,000 ‘Workmen Compensation Reserve 50,000 | Stock 1,80,000 Employee Provident Fund 18,000 | Machinery 6,10,000 Capital: Patent 10,000 Rajat 7,00,000 Igyestment 20,000 Ravi 3,00,000 10,00,000 | Goodwill 40,000 11,20,000 11,20,000 Ramesh was admitted as a new partner on this date on following terms: i) Hebrings proportionate capital on the basis of total capital of new firm after all adjustments. ii) Goodwill of the firm is valued %40,000. Ramesh is admitted for ¥ share and unable to bring his share of goodwill in cash. iii) Claim on account of workmen compensation was 30,000. iv) To write off bad debts amounting to ®48,000. -y)_ Stock was undervalued by 10%, vi) Patent are valueless. vii) Investment are valued £30,000, Rajat and Ravi took over the investment at this value in their profit sharing ratio. Prepare Revaluation Account, Capital Accounts of partners and Balance sheet of new firm. Hd OR ‘A, Band C are partners in a firm sharing profits and losses in the ratio of 5:3:2. Their Balance Sheet as on 31-03-2016 was as under: ‘Amount (®) Assets Amount (%) Bank 2,000 28,000 | Debtors 10,000 20,000 | Stock 14,000 12,000 | Plants 36,000 10,000 | Goodwill 8,000 70,000 70,000V7. C retired on 01-04-2016 on the following terms: Plant be valued at €48,000. Provident Fund increased by 2,000. ii) A customer whose account was written off as bad 2,000 in the previous year now promised to pay in writing, therefore to be accounted. iii) C’sinterestin the firm is valued at 18,800 after revaluation profits and all others adjustment. iv) The entire sum payable to C is brought in by A and B in such a way, so that their capital remains in new profit sharing ratio of 2:1, while keeping minimum bank balance of 4,000. Prepare Revaluation Account, Capital Accounts of partners, Bank Account and Balance Sheet. [i VD Ltd. issued 8,000 Equity Shares of face value €10 each at 40% premium. Payable as On application 4 (341) On allotment 33 (241) On frst call 33.50 (2.50 +1) ‘And balance on second and final call [All the shares were subscribed for by the public and money due were received except from: ‘Sumit’ holding 100 shares paid only application money. “Mohit holding 200 shares paid upto allotment only. ‘Lalit’ holding 300 shares failed to pay both the calls. “Ramit’ holding 400 shares failed to pay final call only. ‘These shares were forfeited after the final call and were reissued to Gagan at less than 10% of face value. Give journal entries in the books of VD Ltd. and prepare Share Forfeiture Account. a OR Moza Ltd. issued a prospectus offering 2,00,000 Equity Shares of 210 each at a premium of 20% on the following terms: On application 3B On allotment 33 (142) (On first call a (On Second and Final call Balance Application were received for 3,17,000 shares and allotment was made as follows: Alloted shares (A) Allotment in full 38,000 shares (Two applicant paid in full on allotment in respect of 4,000 shares each) (B) Allotment of 2/3 of shares applied for 1,60,000 shares (C) Allotment of % of shares applied for 2,000 shares (D) Cash amounting to 793 ,000 (Being application money received with application for 31,000 shares for which no allotment was made) was returned to the applicant. CTF Sample Papers: Accountancy 12 ))18. 19. a 22. Excess money received on application (to whom share allotted) were adjusted towards allotment and call, as per article of association of the company. Rohit holding 8,000 shares (Category A) paid all his dues alongwith Allotment. Ramesh who belonged to category B failed to pay final call money on his 1,000 shares. These shares were forfeited and reissued to Vrinda @ 9 per share as fully paid. ass all the necessary journal entries in the books of Moza Ltd. 5 PART-B (FINANCIAL STATEMENT ANALYSIS) Give an example of a transaction, a part of which is classified as Investing Activity and another partis classified as Financing Activity. Under which type of activity will you classify “Corporate dividend tax paid by company” while preparing the Cash Flow Statement? Under which heading and subheading will you show the following items in the Financial Statement of Company as per Revised Schedule IT of Company Act 2013. (i) Sale of Scrap (i) Unclaimed Dividend (Gli) Computer software (iv) Discount on issue of Debentures written off Il a) What do you mean by Liquidity Ratio? b) From the following information calculate Opening Trade Receivable and Closing Trade Receivable. ‘Trade Receivable Turnover Ratio 4 Times Cost of Revenue From operation 6,40,000 Gross Profit Ratio 20% Cash Revenue From Operation 1/3 of credit Revenue From Operation Closing Trade Receivable are 2 times more than opening ‘Trade Receivable. fio Sumit is working as Managing director in Lalit Plastic Ltd. For the last five years company had been consistentlyearning good profits and pay the appropriate tax on times to government. ‘Now the company has decided to open schools for girls to promote girls education and also contributes towards the cleanliness of the locality. Prepare a Common size Statement of Profit and Loss from the following information: ‘Also Identify any two values which are being communicated to the society in the above case. Particulars 31-03-2016 Revenue From Operations 40,00,000 Other Income 10,00,000 ‘Cost of material consumed 20,00,000 Purchases of stock in trade 6,00,000, Change in Inventories (200,000) f Employee benefit expenses 4,00,000 Income Tax 40% f= [BB cove sampte papers: accountancy 1223. Following are the Balance Sheet of Mohan Ltd. as at 31-03-2016 and 31-03-2015, prepare Cash. flow Statement. Particulars Note No. | 31-03-2016 | 31-03-2015 1. EQUITY AND LIABILITIES 1. Shareholder Fund (a) Share Capital (b) Reserve & Surplus 2. Non-current Liabilities: (a) Long term Borrowings 3. Current Liabilities (@) Short Term Borrowings (b) Trade Payables (©) Other Current Liabilities (@ Short term Provisions TOTAL IL ASSETS: 1.Non-Current Assets: (a) Fixed Assets 4) Tangible Assets ii) Intangible Assets (b) Non-current Investments (©) Long Term Loans and Advances 2. Current Assets 1 15,00,000 | 12,00,000 9,00,000} _7,00,000 3 '8,00,000} — 6,00,000 4 20,000) 10,000 2,00,000} — 1,20,000 3,80,000| — 2,80,000 6 2,00,000| _1,90,000 -40,00,000 | _31,00,000 10,00,000 —_9,00,000 8 200,000} 1,40,000 7,00,000} — 3,00,000 600,000} 2,50,000 (i) Equity Share Capital (i) Preference Share Capital (@) Current Investments 9 4,00,000] —3,00,000 (b) Inventory 240,000] — 2,70,000 (€) Trade Receivables, 680,000 800,000 (@) Cash and Cash Equivalents 130,000] 90,000 (e) Other Current Assets 10 50,000 50,000, TOTAL 40,00,000 | _31,00,000 Notes to Accounts; 31-03-2016 | 31-03-2015 1. Share Capital 9,00,000} — 5,00,000 6,00,000| 700,000 15,00,000| _12,00,000 2. Reserve and Surplus (i) General Reserve (ii). Profit and Loss (ii) Securities Premium Reserve 6,30,000} 4;30,000 2,30,000} — 2,70,000 40,000| _---- 9,00,000 | _7,00,000 CFS Sample Papers: Accountancy 12, BI)3. Long term borrowings: 6,00,000 | 2,80,000 2,00,000| _3,20,000 8,00,000| 6,00,000 4. Short Term Borrowings (i) _ Bank Overdraft 20,000| 10,000 5. Other Current Liabilities (@) Outstanding Expenses 3,80,000| _2,80,000 6. Short Term Provision (i) Provision for Taxation 130,000] 1,40,000 (ii)_Proposed Divided 70,000| 50,000 2,00,000| _1,90,000 7. Tangible Assets, (i) Machinery 10,00,000 _8,50,000 Less: (-) Accumulated Depreciation {4,00,000) | (3,00,000) 600,000] 5,50,000 (ii) Furniture 4,00,000| _3,50,000 10,00,000| _9,00,000 8. Intangible Assets (i) Goodwill 160,000} 40,000 (ii)_Trade Mark 40,000 | _ 1,00,000 2,00,000| —_1,40,000 9, Current Investment (i) Marketable Securities 4,00,000| _3,00,000 10. Other Current Assets (i) _ Prepaid Insurance 50,000] 50,000 Additional Information: i) Dividend paid during the year 45,000. ii) During the year machinery costing 2,00,000 (Accumulated depreciation 80,000) sold for 750,000. iii) Provision for taxation made during the year €1,50,000. iv) Debentures were issued on 01-04-2015 and Bank loan also repaid on 01-04-2015. a [ER crrsampte per Accountancy 12