SAMPLE QUESTION PAPER - 1

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. Aditya and Shiv were partners in a firm with capitals of ₹ 3,00,000 and ₹ 2,00,000, [1]
respectively. Naina was admitted as a new partner th share in the profits of the firm.
1

Naina brought ₹ 1,20,000 for her share of goodwill premium and ₹ 2,40,000 for her
capital. The amount of goodwill premium credited to Aditya will be:

a) ₹ 30,000 b) ₹ 72,000

c) ₹ 40,000 d) ₹ 60,000

2. Assertion (A): A minor cannot be admitted in a firm as a partner. [1]

Reason (R): A minor can participate in the profits of a firm.

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. Madan Ltd. has Issued 20,00,000 Equity shares of ₹ 10 each. Till Date ₹ 8 per share [1]
have been called up and the entire amount received except calls of ₹ 4 per share on
800 shares and ₹ 3 per share from another holder who held 500 shares. What will be
amount appearing as Subscribed but not fully paid capital in the balance sheet of the
company?

a) ₹ 1,59,95,300 b) ₹ 5,700

c) ₹ 1,99,95,300 d) ₹ 1,95,99,000

OR
When a company purchases some assets and not paying cash instead issues debentures as a
payment for the purchase, from the vendors it is known as the issue of:

a) Debentures issued for cash b) Debentures issued for

consideration other than cash

c) Debentures issued as collateral d) Debenture issued in

security consideration of asset

4. X, Y and Z are partners in firm sharing profits in 1 : 2 : 3 ratio. Their Balance Sheet as [1]
at 31.3.2003 showed a balance of Rs. 1,20,000 in General Reserve. From 1.4.2003,
they will share profits equally. Give adjustment entry.

a) Dr. X and Cr. Z by Rs 40,000 b) Dr. X and Cr. Z by Rs 20,000

each each

c) Dr. X and Cr. Z by Rs 2,000 d) Dr. X and Cr. Z by Rs 60,000

each each

OR
The business of a partnership concern may be carried on by all the partners, or any of them
acting for all. The above statement highlights which of the following features of
partnership?

a) Business b) Sharing of profit

c) Agreement d) Mutual Agency

5. A, B and C are partners sharing profits in the ratio of 4 : 3 : 2. Their capitals are fixed. [1]
Profit for the year amounting to ₹ 9,000.
B's share of profit Rs._______ is to be shown in the ________ account.

a) 3,000 / Partners current account b) 9000 / Partners current account

Debit Side Credit Side

c) 3,000 / Partners capital account d) 3,000 / Partners current account

Credit Side Credit Side

6. Maira Ltd. took over assets of ₹ 12,00,000 and liabilities of ₹ 4,00,000 of Subav Ltd. [1]
for an agreed purchase consideration of ₹ 9,00,000. The amount was payable by issue
of 11% debentures of ₹ 100 each at 10% discount. The number of debentures issued
will be:

a) 8,000 b) 9,000

c) 10,000 d) 11,000

OR
Which of the following is correct with respect to debentures?

a) They can be issued partly on b) They cannot be issued as

credit and partly in cash. collateral security.

c) They can be issued for d) They can be issued on credit.

consideration other than cash.

7. Assertion (A): Reserve Capital and Capital Reserve are the same. [1]
Reason (R): Reserve Capital is a part of Subscribed Capital which the Company may
decide to call at the time of winding up of the Company.

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, B and C share profits and losses of the firm equally. B retires from business and his [1]
share is purchased by A and C in the ratio of 2 : 3. New profit sharing ratio between A
 and C respectively would be:

a) 02 : 02 b) 01 : 01

c) 07 : 08 d) 03 : 05

OR
A, B and C were partners in a firm. As per the partnership deed, interest on drawings is to
be charged @ 10% per annum. B withdrew a fixed amount at the end of every quarter.
Interest on his drawings amounted to ₹ 9,000. The amount of his drawings per quarter
were:

a) ₹ 2,40,000 b) ₹ 1,80,000

c) ₹ 60,000 d) ₹ 80,000

Question No. 9 to 10 are based on the given text. Read the text carefully and answer the [2]
questions:
Sumit and Mohit are partners sharing profits and losses in the ratio of 2:1. Their capital
Accounts as at 1st April, 2015 were ₹ 10,00,000 and ₹ 8,00,000 respectively. The partners
are allowed interest on capital @ 5% p.a. Drawings of the partners during the year ended
31st March, 2016 were ₹ 1,44,000 and ₹ 1,00,000 respectively. Mohit is entitled to get a
salary of ₹ 10,000 p.m.
Profit for the year before allowing interest on capital and salary was ₹ 16,00,000. 10% of the
net profit is to be transferred to General Reserve.

9. Find the amount which is to be transferred to General Reserve Account?

a) ₹ 2,00,000 b) ₹ 1,60,000

c) ₹ 1,20,000 d) ₹ 80,000

10. What is the distributable amount of profit which is to be credited to Partners’ Capital
Accounts?
a) ₹ 12,30,000 b) ₹ 16,00,000

c) ₹ 14,40,000 d) ₹ 10,00,000

11. A and B entered into the partnership on 01.09.2020. B draws an equal amount at the [1]
end of every month starting from 31.10.2020 (first drawing made on this date).
 Interest on drawings is charged @ 10% p.a. at the year ended 31.03.2021 Interest on
B's Drawing amounting to ₹ 300.
Monthly Drawings of B were:

a) 14,400 b) 1,500

c) 2,400 d) 1,200

12. Ankit Ltd. Forfeited 1000 equity share of ₹ 100 each issued at a premium of 20% for [1]
non payment of final call of ₹ 30 per share.
State the maximum amount of discount which can be offered at the time of reissue:

a) 70,000 b) 1,30,000

c) 1,00,000 d) 30,000

13. The directors of Neelkamal Ltd. forfeited 70,000 equity shares of ₹ 10 each, ₹ 10 [1]
called-up, for non-payment of final call of ₹ 1 per share. Half of the forfeited shares
were reissued at ₹ 20 per share Fully Paid-up. On reissue of forfeited shares, the
following amount will be transferred to the Capital Reserve Account:

a) ₹ 3,15,000 b) ₹ 4,20,000

c) ₹ 1,40,000 d) ₹ 70,000

14. How drawing against capital is differ from drawings against profit: [1]

a) Drawings against capital will not b) Drawings against capital will

be recorded at all reduce the capital

c) Drawings against capital will d) Drawings against capital will

effect current account reduce the profit

15. Which of the following statement is incorrect? [1]

i. Debit the gainer and credit the sacrificing partner
ii. It is not necessary for a new partner to bring premium for goodwill in cash
iii. Both new partner and gainer partner will compensation the sacrificing partner
iv. It is not necessary to value the goodwill when a new partner is admitted
 a) Option (iv) b) Option (iii)

c) Option (ii) d) Option (i)

OR
Partner’s capital account is debited:

a) to record the P and L account b) to record the general reserve

(Dr.)

c) to record the shortage of capital d) to record the profit on

brought in revaluation

16. At the time of dissolution of a firm, Debtors were ₹ 17,000 out of which ₹ 500 became [1]
bad and the rest realised 60%. Which account will be debited and by how much
amount?

a) Debtors Account by ₹ 7,100 b) Realisation Account by ₹ 16,500

c) Profit and Loss Account by ₹ d) Cash Account by ₹ 9,900

500

17. Anu, Manu, Sonu and Rohan were partners in a firm sharing profits and losses in the [3]
ratio of 1 : 2 : 1 : 2. With effect from 1st April, 2023, they decided to share profits and
losses in the ratio of 2 : 4 : 1 : 3. Their Balance Sheet showed General Reserve of ₹
90,000. The goodwill of the firm was valued at ₹ 4,50,000.
Pass necessary journal entries for the above on account of change in the profit sharing
ratio. Show your working clearly.

18. A and B are partners in a firm. A is entitled to a salary of ₹15,000 p.m. and a [3]
commission of 10% of net profit before charging any commission. B is entitled to a
commission of 10% of net profit after charging his commission. Net profit for the year
ended 31st March 2023 was ₹4,40,000.
You are required to show the distribution of profit.

OR
On March 31, 2017 after the close of accounts, the capitals of Mountain, Hill, and Rock
stood in the books of the firm at ₹ 4,00,000, ₹ 3,00,000 and ₹ 2,00,000, respectively.
 Subsequently, it was discovered that the interest on capital @ 10% p.a. had been omitted.
The profit for the year amounted to ₹ 1,50,000 and the partner’s drawings had been
Mountain: ₹ 20,000, Hill ₹ 15,000 and Rock ₹ 10,000. Calculate interest on capital.

19. Blue Ltd. purchased the assets of Shine Ltd. for ₹ 40,00,000 and took over liabilities [3]
of ₹ 7,00,000 for ₹ 32,40,000. Payment was made by issuing 10% Debentures of ₹ 100
each at a discount of 10%. Pass the necessary Journal entries in the books of Blue Ltd.

OR
Can the forteited shares be reissued at a discount?

20. A and B are partners sharing profits equally. They agree to admit C for equal share. [3]
For this purpose goodwill is to be valued at 150% of the average annual profits of the
last 5 year’s profits.
Profits were:
Year ended ₹
31st March 2019 40,000
31st March 2020 60,000
31st March 2021 1,00,000
31st March 2022 20,000 (Loss)
31st March 2023 1,50,000
It was observed that:
i. During the year ended 31st March 2020, an asset of the original cost of ₹ 2,00,000
with book value of ₹ 1,50,000 was sold for ₹ 1,24,000.
ii. On 1st April, 2021, 2 Computer’s costing ₹ 1,00,000 were purchased and were
wrongly debited to Travelling Expenses. Depreciation on Computers was to be
charged @ 20% p.a. on written down value basis.
Calculate the value of goodwill.

21. Starline Ltd. issued 10,000 shares of ₹ 10 each, payable as ₹ 3 on application, ₹ 4 on [4]
allotment, ₹ 2 on first call and balance on second and final call. Out of the total shares,
500 shares were forfeited.
Calculate the Maximum Permissible Discount and Minimum Reissue Price at the
time of reissue in each of the following cases:
 Case 1. If shares were forfeited for non-payment of Second and Final Call.
Case 2. If shares were forfeited for non-payment of First Call and Second and Final
Call.
Case 3. If shares were forfeited for non-payment of Allotment, First Call and Second
and Final Call.
Case 4. If shares were forfeited for non-payment of Allotment and First Call. Second
and Final Call is not yet made.
Case 5. If shares were forfeited for non-payment of First Call. Second and Final Call
is not yet made.

22. Sumit, Amit and Vinit are partners sharing profit in the ratio of 5 : 3 : 2. Their Balance [4]
Sheet as on March 31, 2017 was as follows:
Balance Sheet of Sunit, Amit and Vinit
as on March 31, 2017
Liabilities Amount ₹ Assets Amount ₹
Capitals: Machinery 80,000
Sumit 40,000 Investments 1,50,000
Amit 50,000 Stock 10,000
Vinit 40,000 1,50,000 Debtors 35,000
Profit and Loss 10,000 Cash at bank 15,000
Mr. Amit’s loan 40,000
Sundry creditors 90,000
2,90,000 2,90,000
The firm was dissolved on that date. Amit took over his wife’s loan. One of the
Creditors for ₹ 2,600 did not claim the amount. Assets realised as follows:
i. Machinery was sold for ₹ 70,000,
ii. Investments with book value of ₹ 1,00,000 were given to Creditors in full
settlement of their account. The remaining Investments were taken over by Vinit at
an agreed value of ₹ 45,000,
iii. Stock was sold for ₹ 11,000 and Debtors for ₹ 3,000 proved to be bad,
 iv. Realisation expenses were ₹ 1,500.
Prepare ledger accounts to close the books of the firm.

23. Street Food Ltd. issued a prospectus offering 10,000 equity shares of ₹ 50 each at par [6]
payable as follows:
₹
On Application 15
On Allotment 10
On First Call 15
On Final Call 10
Rohit, the holder of 500 equity shares did not pay the amount due on both the calls.
These 500 shares were forfeited by the Board of Directors and 300 of these shares
were subsequently re-issued at ₹ 55 per share.
Show the entries in the Cash Book and Journal of the Company.

OR
Viswas Ltd. issued a prospectus inviting applications for 20,000 shares of ₹ 10 each at a
premium of ₹ 4 per share, payable as follows:
On Application ₹ 4 (including premium ₹ 1)
On Allotment ₹ 3 (including premium ₹ 1)
On First Call ₹ 3 (including premium ₹ 1)
On Second and Final Call ₹ 4 (including premium ₹ 1)
Applications were received for 30,000 shares and pro-rata allotment was made on the
applications for 24,000 shares. It was decided to utilise excess application money towards
the sums due on allotment.
X, who was allotted 500 shares, failed to pay the allotment money and on his subsequent
failure to pay the first call, his share were forfeited.
Y, who applied for 1,800 shares, failed to pay the two calls and his shares were forfeited
after the second call. Of the shares forfeited, 1,700 shares were re-issued as fully paid up
for ₹ 8 per share, the whole of Y's shares being included.
Prepare Cash Book, Journal and Balance Sheet.
24. The following is the balance sheet of A, B and C sharing profits and losses in [6]
proportion of 6 : 5 : 3 respectively:-
Liabilities ₹ Assets ₹
Creditors 18,900 Cash 1,890
Bills Payable 6,300 Debtors 26,460
General Reserve 10,500 Stock 29,400
Capitals:- Furniture 7,350
A 35,400 Land & Building 45,150
B 29,850 Goodwill 5,250
C 14,550 79,800
1,15,500 1,15,500
They agreed to take D into partnership and give him th share on the following
1

terms:-
i. That Furniture be depreciated by ₹ 2,920.
ii. An Old Customer, whose account was written off as bad, has promised to pay ₹
2,000 in full settlement of his full debt.
iii. That a provision of ₹ 1,320 be made for outstanding repair bills.
iv. That the value of land and building having appreciated be brought upto ₹ 56,910.
v. That D should bring in ₹ 14,700 as his capital.
vi. That D should bring in ₹ 14,070 as his share of goodwill.
vii. That after making the above adjustments, the capital accounts of old partners be
adjusted on the basis of the proportion of D’s Capital to his share in business, i.e.,
actual cash to be paid off or brought in by the old partners, as the case may be.
Pass the necessary journal entries and prepare the balance sheet of the new firm.

OR
Radha, Manas and Arnav were partners in a firm sharing profits and losses in the ratio of 3
: 1 : 1. Their Balance Sheet as at 31st March, 2019 was as follows:
Balance Sheet of Radha, Manas and Arnav
as at 31st March, 2019
 Liabilities (₹) Assets (₹)
Capitals: Furniture 4,60,000
Radha 4,00,000 Investments 2,00,000
Manas 3,00,000 Stock 2,40,000
Arnav 2,00,000 9,00,000 Sundry Debtors 2,20,000
Investment
Less: Provision for
Fluctuation 1,10,000 (10,000) 2,10,000
Doubtful Debts
Fund
Creditors 2,50,000 Cash 1,50,000
12,60,000 12,60,000
Manas retired on 1st April, 2019. It was agreed that:
i. Stock was to be appreciated by 20%
ii. Provision for doubtful debts was to be increased to ₹ 15,000.
iii. Value of furniture was to be reduced by ₹ 3,000.
iv. Market value of investments was ₹ 1,90,000.
v. Goodwill of the firm was valued at ₹ 2,00,000 and Manas's share was adjusted in the
accounts of Radha and Arnav.
vi. Manas was paid ₹ 68,000 in cash and the balance was transferred to his loan account.
vii. Capitals of Radha and Arnav were to be in proportion to their new profit sharing ratio.
Surplus/deficit, if any, in their capital accounts was to be adjusted through current
accounts.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the
reconstituted firm.

25. Puneet, Pankaj and Pammy are partners in a business sharing profits and losses in the [6]
ratio of 2 : 2 : 1 respectively. Their balance sheet as on March 31, 2019 was as
follows:
Books of Puneet, Pankaj and Pammy
Balance Sheet as on March 31, 2019
Liabilities Amount ₹ Assets Amount ₹
 Sundry Creditors 1,00,000 Cash at Bank 20,000
Capital Accounts: Stock 30,000
Puneet 60,000 Sundry Debtors 80,000
Pankaj 1,00,000 Investments 70,000
Pammy 40,000 2,00,000 Furniture 35,000
Reserve 50,000 Buildings 1,15,000
3,50,000 3,50,000
Mr. Pammy died on September 30, 2017. The partnership deed provided the
following:
i. The deceased partner will be entitled to his share of profit up to the date of death
calculated on the basis of previous year’s profit.
ii. He will be entitled to his share of goodwill of the firm calculated on the basis of 3
years’ purchase of average of last 4 years’ profit. The profits for the last four
financial years are given below:
for 2015–16; ₹ 80,000; for 2016–17, ₹ 50,000; for 2017–18, ₹ 40,000; for 2018–19,
₹ 30,000.
The drawings of the deceased partner up to the date of death amounted to ₹ 10,000.
Interest on capital is to be allowed at 12% per annum. Surviving partners agreed
that ₹ 15,400 should be paid to the executors immediately and the balance in four
equal yearly instalments with interest at 12% p.a. on the outstanding balance.
Show Mr. Pammy’s Capital account, his Executor’s account till the settlement of
the amount due.

26. Satnam Ltd. purchased Building worth ₹ 5,00,000, Plant worth ₹ 4,60,000 and [6]
Furniture worth ₹ 2,20,000 from Gurnam Ltd. for a purchase consideration of ₹
12,60,000. Satnam Ltd. paid the purchase consideration by issuing 10% debentures
of₹ 100 each. Pass the necessary journal entries in the books of Satnam Ltd. for the
acquisition of assets and issue of 10% debentures when:
a. Debentures were issued at par.
b. Debentures were issued at premium of 25%.
c. Debentures were issued at a discount of 10%.

Part B :- Analysis of Financial Statements

27. Which of the following is not a limitation of financial statement analysis? [1]

a) Qualitative aspect is ignored b) To assess the financial position

and profitability

c) Historical analysis d) Ignores price level changes

OR
Which of the following is not a part of Finance Cost (in Statement of Profit and Loss)?

a) Loss on Issue of Debentures b) Interest Paid on Debentures

c) Bank Charges d) Interest Paid on Public Deposits

28. A Company’s Current Ratio is 2.4 : 1 and Working Capital is ₹ 5,60,000. If its Liquid [1]
Ratio is 1.5, what will be the value of Inventory?

a) ₹ 6,40,000 b) ₹ 3,60,000

c) ₹ 6,00,000 d) ₹ 2,00,000

29. Which of the following is not concerned with Financing Activity? [1]

a) Sale of Non-current investment b) Increase in Securities Premium

c) Loan taken from bank d) Issue of Equity Shares

OR
If a machine whose original cost is ₹ 40,000 having accumulated depreciation ₹ 12,000,
were sold for ₹ 34,000 then while preparing Cash Flow Statement its effect on cash flow
will be:

a) Cash flow from investing b) Cash flow from financing

activities ₹ 34,000 activities ₹ 34,000

c) Cash flow from investing d) Cash flow from financing

activities ₹ 6,000 activities ₹ 6,000

30. While calculating the cash flow statement from investment activities following items [1]
should be added except?
 a) Cash paid for purchase of Non- b) Interest received
current Investment

c) Cash received from sale of fixed d) Cash received from sale of

assets investments

31. Under what main heads and sub-heads, will the following items appear in the balance [3]
sheet of a company as per Schedule III, Part I of the Companies Act, 2013
i. Mining rights
ii. Encashment of employees earned leave payable on retirement
iii. Vehicles

32. From the following, calculate Debt to Capital Employed Ratio: [3]
₹
9% Debentures 2,00,000
8% Public Deposits 5,00,000
Long-term Provisions 2,00,000
Equity Share Capital 8,00,000
Reserves and Surplus 5,00,000

33. From the following Statement of Profit and Loss of RJ Ltd., prepare a Comparative [4]
Statement of Profit and Loss for the year ended 31st March, 2022:
RJ Ltd.
Statement of Profit and Loss for the year ended 31st March, 2022
2021 - 22 2020 - 21
Particulars Note No.
₹ ₹
Revenue from Operations 20,00,000 15,00,000
Employee Benefit Expenses 8,00,000 4,00,000
Other Expenses 2,00,000 1,00,000
Tax Rate 50%

OR
 Convert the following particulars into Common Size Statement of Profit & Loss and
interpret the changes in 2023:
Particulars Note No. 31.3.2023 31.3.2022
Revenue from Operations 18,00,000 15,00,000
Other Income 72,000 45,000
Cost of Materials Consumed 8,64,000 6,60,000
Employee Benefit Expenses 1,80,000 1,80,000
Other Expenses 54,000 1,05,000

34. Read the following hypothetical text and answer the given questions on the basis of [6]
the same.
In 2011, two young Indian entrepreneurs, Vaishali Bhatia and Vivek Bhatia decided to
start an online auto portal. At that time, there were no major players in the market and
they saw an opportunity to fill the gap. They used a user-friendly website and mobile
app which made it easy for users to research and buy cars. It was converted into a
company 'Car Easy Ltd.' in 2018.
From the following Balance Sheet of the company as on 31st March, 2022, calculate
'Cash Flows From Operating Activities'.
Balance Sheet of 'Car Easy Ltd' as at 31st March, 2022
31.3.2022 31.3.2021
Particulars Note No.
(₹) (₹)
I Equity and Liabilities:
1. Shareholders' Funds
(a) Share Capital 9,00,000 3,00,000
(b) Reserves and Surplus 1 75,000 3,60,000
2. Non-Current Liabilities
Long-term Borrowings 2 2,40,000 1,80,000
3. Current Liabilities
(a) Trade Payables 18,000 60,000
(b) Short-term Provisions 3 2,04,000 2,10,000
Total 14,37,000 11,10,000
II Assets:
1. Non-Current Assets
Fixed Assets 4 10,08,000 5,76,000
2. Current Assets
(a) Inventories 3,54,000 3,87,000
(b) Cash and Cash Equivalents 75,000 1,47,000
Total 14,37,000 11,10,000
Notes to Accounts:
31.3.2022 31.3.2021
Note No. Particulars
(₹) (₹)
1 Reserve and Surplus
Surplus i.e. Balance in Statement of Profit and Loss 75,000 3,60,000
75,000 3,60,000
2 Long-term Borrowings
10% Debentures 2,40,000 1,80,000
2,40,000 1,80,000
3 Short-term Provisions
Provision for Tax 2,04,000 2,10,000
2,04,000 2,10,000
4 Fixed Assets
Machinery 11,52,000 6,45,000
Accumulated Depreciation (1,44,000) (69,000)
Total 10,08,000 5,76,000
Additional Information:
i. 10% Debentures were issued on 31st March, 2021.
ii. Tax of ₹ 80,000 was paid during the year.
 SOLUTION
SAMPLE QUESTION PAPER - 1
SUBJECT- ACCOUNTANCY (055)
CLASS XII (2024-25)
Part A:- Accounting for Partnership Firms and Companies
1.
(d) ₹ 60,000
Explanation:
Sacrificing ratio = 1 : 1
Aditya share in premium on goodwill = ₹ 1,20,000 × = ₹ 60,000
1

2. (a) Both A and R are true and R is the correct explanation of A.

Explanation:
Both A and R are true and R is the correct explanation of A.
3. (a) ₹ 1,59,95,300
Explanation:
Amount appearing as Subscribed but not fully paid up
{₹ 20,00,000 × 8 - (800 × 4) - (500 × 3)} = ₹ 1,59,95,300
OR
(b) Debentures issued for consideration other than cash
Explanation:
When a company purchases some assets and instead of paying cash issue debentures as a
payment for the purchase from the vendors it is known as the issue of debentures for
consideration other than cash.
Asset A/c ... Dr.
To vendor A/c
Vendor A/c ... Dr.
To debentures A/c
4.
(b) Dr. X and Cr. Z by Rs 20,000 each
Explanation:
Adjustment of General Reserve at the time of change in profit sharing ratio:
Old Ratio = 1:2:3 and New Ratio 1:1:1
X= 1

6
- 1

3
= 1

6
Gain
Y= 2

6
- 1

3
= No Sacrifice/No Gain
 Z= 3

6
- 1

3
= 1

6
Sacrifice
Share of General reserve = 120000 × 1

6
= 20000
OR

(d) Mutual Agency

Explanation:
Mutual Agency
5.
(d) 3,000 / Partners current account Credit Side
Explanation:
3,000 / Partners current account Credit Side
6.
(c) 10,000
Explanation:
(9,00,000)/90= 10,000
OR

(c) They can be issued for consideration other than cash.

Explanation:
They can be issued for consideration other than cash.
7.
(d) A is false but R is true.
Explanation:
A is false but R is true.
8.
(c) 07 : 08
Explanation:
07 : 08
OR

(c) ₹ 60,000
Explanation:
Suppose Total Drawings are X
Interest on Drawings = x × 10

100
×
4.5

12
= 9,000
 = 45x

1,200
= 9,000
45x = 9,000 × 1,200
x= 9,000×1,200

45
= 2,40,000
Qaurterly Drawings = 2,40,000 ÷ 12 = ₹ 60,000
9. (b) ₹ 1,60,000
Explanation:
₹ 1,60,000
10. (a) ₹ 12,30,000
Explanation:
₹ 12,30,000
11.
(d) 1,200
Explanation:
300 = Total drawings X 10/100 X 2.5/12
total drawings = 14400
monthly drawings = 14,400/12 = Rs. 1200
12. (a) 70,000
Explanation:
maximum discount on re-issue = amount forfeited on the re-issued share
= 1000 shares × 70
= 70000
13. (a) ₹ 3,15,000
Explanation:
Amount transferred to capital reserve account = 6,30,000

70,000
× 35,000 = 3,15,000
(half forfeited share reissued)
14.
(b) Drawings against capital will reduce the capital
Explanation:
The main difference between drawings against profit and drawings against capital is:
i. Drawings against capital will reduce the amount of capital but not the profit because it is
withdrawn from capital only.
ii. Drawings against profit will reduce the amount of profit but not the capital.
15. (a) Option (iv)
Explanation:
 goodwill must be valued at time of admission
OR
(a) to record the P and L account (Dr.)
Explanation:
to record the P and L account (Dr.) as it is written off in old ratio
16.
(d) Cash Account by ₹ 9,900
Explanation:
Cash Account by ₹ 9,900
17. Books of Anu, Manu, Sonu and Rohan
Journal
Dr. Cr.
Date Particulars L.F.
Amount ₹ Amount ₹
2023
General Reserve A/c Dr. 90,000
April 1
To Anu’s Capital A/c 15,000
To Manu’s Capital A/c 30,000
To Sonu’s Capital A/c 15,000
To Rohan’s Capital A/c 30,000
(Distribution of General Reserve in old profit-
sharing ratio)
2023
Anu’s Capital A/c Dr. 15,000
April 1
Manu’s Capital A/c Dr. 30,000
To Sonu’s Capital A/c 30,000
To Rohan’s Capital A/c 15,000
(Adjustment for Goodwill on account of change
in profit sharing ratio)
Working notes:
Calculation of gain/ sacrifice
Gaining Share = New share - Old share
Anu = 10
2
−
1

6
=
1

30
(Gain)
 Manu = 4

10
−
2

6
=
2

30
(Gain)
Sonu = 1

10
−
1

6
=
−2

30
(Sacrifice)
Rohan = 10
3
−
2

6
=
−1

30
(Sacrifice)
18. PROFIT AND LOSS APPROPRIATION ACCOUNT
st
for the year ended 31 March, 2023
Dr. Cr.
Particulars ₹ Particulars ₹
By Profit & Loss A/c (Net
To A's Salary A/c 1,80,000 4,40,000
Profit)
To A's Commission A/c (₹ 4,40,000
44,000
×
10

100
)
To B's Commission A/c (₹ 4,40,000
40,000
×
10

100
)
To Profit transferred to Capital A/c
A's Capital A/c 88,000
B's Capital A/c 88,000 1,76,000
4,40,000 4,40,000
OR
Interest on Capital is calculated on the opening balance of capital, if additional capital is not
given. Therefore, first of all opening capital will be calculated from the closing capital.
Statement showing calculation of Opening Capital:
Particulars Mountain Hill Rock
Closing Capital 4,00,000 3,00,000 2,00,000
Add: Drawings 20,000 15,000 10,000
4,20,000 3,15,000 2,10,000
Less: Profit (1:1:1) (50,000) (50,000) (50,000)
Opening Capital 3,70,000 2,65,000 1,60,000
Calculation of Interest on Capital @ 10% p.a. is as follows:
Mountain 3,70,000 × 10

100
= ₹ 37,000
Hill 2,65,000 × 10

100
= ₹ 26,500
 Rock 1,60,000 × 10

100
= ₹ 16,000
19. In the books of Blue Ltd.
Journal Entries
Debit Amount Credit Amount
Date Particulars L.F.
(₹) (₹)
Sundry Assets A/c Dr. 40,00,000
To Sundry Liabilities A/c 7,00,000
To Shine Ltd. 32,40,000
To Capital Reserve A/c
60,000
(business purchase of Shine Ltd.)

Shine Ltd. A/c Dr. 32,40,000

Discount on Issue of Debentures A/c
Dr. 3,60,000
(36,000 × 10)
To 10% Debentures A/c
(36,000, 10% debentures issued as 36,00,000
purchase consideration)
OR
Yes, they can be reissued at a discount. And the discount limit is limited. This is different in
different cases.
i. Originally issued at par or premium. But now reissued at a discount. Condition for a
discount is; the amount of discount should be less than or equal to the amount standing to
the credit of forfeited shares account.
ii. When the shares were originally issued at a discount and now are reissued at discount, the
maximum amount of discount should be less than or equal to the amount credited to the
Forteited shares account and the original discount together.
20. Calculation of Adjusted Profits
Particulars 2019 2020 2021 2022 2023
₹ ₹ ₹ ₹ ₹
Profits 40,000 60,000 1,00,000 (20,000) 1,50,000
Add: Loss on Sale of Asset 26,000
 Add: Cost of Computers wrongly charged
1,00,000
to P & L A/c
(20,000) (16,000)
Less: Depreciation on Computers (1) (2)

Adjusted Profits 40,000 86,000 1,00,000 60,000 1,34,000

40,000 + 86,000 + 1,00,000 + 60,000 + 1,34,000
Average Profit = 5

= = ₹ 84,000
4,20,000

Value of Goodwill = 84,000 × 150

100
= ₹ 1,26,000
Working Note:
i. Depreciation on Computers for the year ended 31.3.2022 = 20% on ₹ 1,00,000 = ₹ 20,000
ii. Depreciation on Computers for the year ended 31.3.2023: 20% on (₹ 1,00,000 - ₹ 20,000)
= ₹ 16,000
21. Table Showing Maximum Permissible Discount and Minimum Reissue Price
Maximum Permissible Discount is Minimum Reissue
Case Amount Forfeited
Amount Forfeited Price
₹3+₹4+2=₹9 ₹ 10 - ₹ 9 = ₹ 1 per
1. ₹ 9 per share
per share share
₹ 3 + ₹ 4 = ₹ 7 per ₹ 10 - ₹ 7 = ₹ 3 per
2. ₹ 7 per share
share share
₹ 10 - ₹ 3 = ₹ 7 per
3. ₹ 3 per share ₹ 3 per share
share
₹ 10 - ₹ 3 = ₹ 7 per
4. ₹ 3 per share ₹ 3 per share
share
₹ 3 + ₹ 4 = ₹ 7 per ₹ 10 - ₹ 7 = ₹ 3 per
5. ₹ 7 per share
share share
22. Books of Amit, Sumit and Vinit
Realisation Account
Dr. Cr.
Particulars Amount ₹ Particulars Amount ₹
Machinery 80,000 Sundry creditors 90,000
Investments 1,50,000 Mrs.Amit’s loan 40,000
Stock 10,000 Bank:
Debtors 35,000 Machinery 70,000
Amit’s Capital (wife’s loan) 40,000 Stock 11,000
Bank (realisation expenses) 1,500 Debtors 32,000 1,13,000
Vinit’s capital (investment) 45,000
Loss transferred to:
Amit’s capital 14,250
Sumit’s capital 8,550
Vinit’s capital 5,700 28,500
3,16,500 3,16,500
Partners Capital Accounts
Dr. Cr.
Amit Sumit Vinit Amit Sumit Vinit
Date Particulars J.F. Date Particulars J.F.
₹ ₹ ₹ ₹ ₹ ₹
Realisation
- - 45,000 Balance b/d 40,000 50,000 60,000
Investment
Realisation
Realisation (Mrs.
14,250 8,550 5,700 40,000 - -
(loss) Amit’s
loan)
Profit and
Bank 70,750 44,450 11,300 5,000 3,000 2,000
Loss

85,000 53,000 62,000 85,000 53,000 62,000

Bank Account
Dr. Cr.
Date Amount Date Amount
Particulars Particulars
2017 ₹ 2017 ₹
Realisation
Balance b/d 15,000 1,500
(expenses)
 Realisation (assets
1,13,000 Amit’s capital 70,750
realised)
Sumit’s capital 44,450
Vinit’s capital 11,300
1,28,000 1,28,000
Note: No entry has been made for the investments taken over by the creditors as per rules.
23. CASH BOOK
Dr. Cr.
Particulars L.F. ₹ Particulars L.F. ₹
To Equity Share Application A/c 1,50,000 By Balance b/d 5,04,000
To Equity Share Allotment A/c 1,00,000
To Equity Share First Call A/c 1,42,500
To Equity Share Final Call A/c 95,000
To Equity Share Capital A/c 15,000
To Securities Premium Reserve 1,500
5,04,000 5,04,000
JOURNAL
Date Particulars L.F. Dr. (₹) Cr. (₹)
Equity Share Application A/c Dr. 1,50,000
To Equity Share Capital A/c
1,50,000
(Application money transferred)

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

To Equity Share Capital A/c
1,00,000
(Allotment money due)

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

To Equity Share Capital A/c
1,50,000
(First call money due)

Equity Share Final Call A/c Dr. 1,00,000

 To Equity Share Capital A/c
1,00,000
(First Call money due)

Equity Share Capital A/c Dr. 25,000

To Equity Share First Call A/c 7,500
To Equity Share Final Call A/c 5,000
To Share Forfeiture A/c
12,500
(Forfeiture of 500 shares)

Sharen Forfeiture A/c Dr. 7,500

To Capital Reserve A/c
(Profit on reissue of 300 shares transferred to Capital 7,500
Reserve)
BALANCE SHEET OF STREET FOOD LTD
as at ________
Particulars Note No. Current Year Previous Year
I. EQUITY AND LIABILITIES: ₹ ₹
Shareholder's Funds
(a) Share Capital 1 4,95,000
(b) Reserves and Surplus 2 9,000
5,04,000
II. ASSETS:
Current Assets:
Cash and Cash Equivalents 3 5,04,000
Notes to Accounts:
₹
(1) Share Capital:
Issued Share Capital:
10,000 Equity Shares of ₹ 50 each 5,00,000
Subscribed and Fully Paid Capital:
9,800 Equity Shares of ₹ 50 each fully paid 4,90,000
Add: Share Forfeiture A/c 5,000 4,95,000
(2) Reserves and Surplus:
Securities Premium Reserve A/c 1,500
Capital Reserves A/c 7,500
9,000
(3) Cash and Cash Equivalents:
Cash at Bank 5,04,000
(4) Only that amount of profit is transferred from Share Forfeiture A/c to Capital Reserve A/c
which belongs to the re-issued shares. In this question, only 300 shares have been re-issued,
as such, the profit on only 300 shares will be transferred to Capital Reserve Account. This has
been calculated as under:
As Profit on forfeiture of 500 shares = ₹ 12,500
Therefore, Profit on the forfeiture of 300 shares = ₹ 300
12,500
×
500

= ₹ 7,500
∴ Transfer to Capital Reserve = ₹ 7,500
OR
CASH BOOK
Dr. Cr.
Particulars L.F. ₹ Particulars L.F. ₹
To Share Application A/c (30,000 By Share Application A/c
1,20,000 24,000
× ₹ 4) (6,000 × ₹ 4)
(4)
To Share Allotment A/c 42,900 By Balance c/d 2,78,500
To Share First Call A/c (18,000
54,000
× ₹ 3)
To Share Second and Final Call
72,000
A/c (18,000 × ₹ 4)
To Share Capital A/c (1,700 × ₹
13,600
8)
To Balance b/d 2,78,500
3,02,500 3,02,500
JOURNAL
Date Particulars L.F. Dr. (₹) Cr. (₹)
Share Application A/c (24,000 × ₹ 4) Dr. 96,000
To Share Capital A/c (20,000 × ₹ 3) 60,000
To Securities Premium Reserve A/c (20,000 × ₹ 1) 20,000
To Share Allotment A/c (4,000 × ₹ 4)
(Amount received on application transferred to Share
16,000
Capital A/c, Securities Premium Reserve A/c, Share
Allotment A/c and excess refunded)

Share Allotment A/c (20,000 × ₹ 3) Dr. 60,000

To Share Captial A/c (20,000 × ₹ 2) 40,000
To Securities Premium Reserve A/c (20,000 × ₹ 1)
20,000
(Amount due on Allotment)

Share First Call A/c (20,000 × ₹ 3) Dr. 60,000

To Share Capital A/c (20,000 × ₹ 2) 40,000
To Securities Premium Reserve A/c (20,000 × ₹ 1)
20,000
(Amount due on First Call)

Share Capital A/c (500 × ₹ 7 Called up) Dr. 3,500

Securities Premium Reserve A/c (500 × ₹ 2) Dr. 1,000
To Share Allotment A/c 1,100
To Share First Call A/c (500 × ₹ 3) 1,500
To Share Forfeiture A/c
(500 shares of X forfeited for non-payment of Allotment 1,900
and First Call)

Share Second and Final Call A/c (19,500 × ₹ 4) Dr. 78,000

To Share Capital A/c(19,500 × ₹ 3) 58,500
To Securities Premium Reserve A/c
19,500
(Amount due on second and Final Call on 19,500 shares)

Share Capital A/c (1,500 × ₹ 10) Dr. 15,000

 Securities Premium Reserve A/c (1,500 × ₹ 2) Dr. 3,000
To Share First Call A/c (1,500 × ₹ 3) 4,500
To Share Second and Final Call A/c (1,500 × ₹ 4) 6,000
To Share Forfeiture A/c
((1,500 shares of Y forfeited for non-payment of First and 7,500
Second Call)

Share Forfeiture A/c (1,700 × ₹ 2) Dr. 3,400

To Share Capital A/c
3,400
(Loss on re-issue of 1,700 shares)
(5)
Share Forfeiture A/c Dr. 4,860
To Capital Reserve A/c
(Transfer of profit on 700 re-issued shares transferred to 4,860
Capital Reserve A/c)
BALANCE SHEET OF VISWAS LTD.
as at ________
Particulars Note no. Current Year Previous Year
I. EQUITY AND LIABILITIES: ₹ ₹
Shareholder's Funds
(a) Share Capital 1 1,98,140
(b) Reserves and Surplus 2 80,360
2,78,500
II ASSETS:
Current Assets:
Cash and Cash Equivalents 3 2,78,500
Notes to Accounts:

1. (1) Share Capital ₹

Authorised: ____
Issued:
20,000 shares of ₹ 10 each fully paid 2,00,000
Subscribed & Fully Paid Capital
19,700 Shares of ₹ 10 each 1,97,000
(6)
Add: Share Forfeiture A/c 1,140 1,98,140
(2) Reserves and Surplus:
Capital Reserve A/c 4,860
Securities Premium Reserve A/c 75,500
80,360
(3) Cash and Cash Equivalents
Cash at Bank 2,78,500

(4) (A) X must have applied for = 600 Shares

24,000
× 500
20,000

Excess Application money received from X:

600 shares - 500 shares = 100 shares × ₹ 4 400
(B) Amount due from X on allotment : 500 shares × ₹ 3 1,500
Less: Excess received from X on application (400)
Amount not received from X on allotment 1,100
(C) Total amount due on allotment = 20,000 shares × ₹ 3 60,000
Less: Excess received on applications 16,000
Balance due 44,000
Less: Amount not received from X on allotment 1,100
Net amount received on allotment in Cash 42,900

(5) 1,700 Re-issued shares include 1,500 shares of Y and the balance 200 shares
of X.
Profit on 200 shares of X = 200 760
1,900
×
500

Profit on 1,500 shares of Y 7,500

8,260
Less: Loss on Re-issue of 1,700 shares @ ₹ 2 3,400
Amount transferred to Capital Reserve 4,860
 (6) Profit on 300 unissued shares of X to be shown on the liabilities side of the
Balance Sheet:
1,140
1,900
× 300
500

24. JOURNAL
Date Particulars L.F. Dr. (₹) Cr. (₹)
General Reserve A/c Dr. 10,500
To A's Capital A/c 4,500
To B's Capital A/c 3,750
To C's Capital A/c 2,250
(General reserve transferred to old partner's capital accounts)

Revaluation A/c Dr. 4,240

To Furniture A/c 2,920
To Provision for Repairs A/c 1,320
(Reduction in the value of assets and a provision made for
outstanding repairs bills)

Debtors A/c* Dr. 2,000

Land & Building A/c Dr. 11,760
To Revaluation A/c 13,760
(Increase in the value of assets)

Revaluation A/c Dr. 9,520

To A's Capital A/c 4,080
To B's Capital A/c 3,400
To C's Capital A/c 2,040
(The transfer of profit on revaluation to old partner's Capital
A/cs)

A's Capital A/c Dr. 2,250

B's Capital A/c Dr. 1,875
C's Capital A/c Dr. 1,125
 To Goodwill A/c 5,250
(Goodwill appearing in the books written off)

Cash A/c Dr. 28,770

To D’s Capital A/c 14,700
To Premium for Goodwill A/c 14,070
(The amount brought in cash by D being ₹ 14,700 for capital
and ₹ 14,070 for goodwill)

Premium for Goodwill A/c Dr. 14,070

To A's Capital A/c 6,030
To B's Capital A/c 5,025
To C's Capital A/c 3,015
(Goodwill brought in by D credited to old partners)

A’s Capital A/c Dr. 3,660

B's Capital A/c Dr. 3,400
To Cash A/c 7,060
(Cash withdrawn by A and B)
(3)
Cash A/c Dr. 1,320
To C’s Capital A/c 1,320
(Cash brought in by C)
REVALUATION ACCOUNT
Dr. Cr.
Particulars ₹ Particulars ₹
To Furniture A/c 2,920 By Land & Buildings A/c 11,760
To Provision for Repairs 1,320 By Debtors A/c 2,000
To Profit transferred to :
A’s Capital A/c 4,080
B’s Capital A/c 3,400
C’s Capital A/c 2,040 9,520
13,760 13,760
CAPITAL ACCOUNTS
Dr. Cr.
Particulars A B C D Particulars A B C D
₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹
To Goodwill
2,250 1,875 1,125 By Balance b/d 35,400 29,850 14,550 ____
A/c
To Balance By General
47,760 40,150 20,730 14,700 4,500 3,750 2,250 ____
c/d Reserve A/c
By Revaluation
4,080 3,400 2,040 ____
A/c
By Cash A/c ____ ____ ____ 14,700
By Premium for
6,030 5,025 3,015 ____
goodwill A/c
50,010 42,025 21,855 14,700 50,010 42,025 21,855 14,700
To Cash A/c
3,660 3,400 ____ ____ By Balance b/d 47,760 40,150 20,730 14,700
(B/f)
By Cash A/c
____ ____ 1,320 ____
(B/f)
To Balance
44,100 36,750 22,050 14,700
c/d
47,760 40,150 22,050 14,700 47,760 40,150 22,050 14,700
BALANCE SHEET
As at ________
Liabilities ₹ Assets ₹
(4)
Creditors 18,900 Cash 24,920
Bills Payable 6,300 Debtors 28,460
Provision for Repairs 1,320 Stock 29,400
Capital Account balances:- Furniture 4,430
 A 44,100 Land & Buildings 56,910
B 36,750
C 22,050
D 14,700 1,17,600
1,44,120 1,44,120
New profit sharing ratio will be calculated as under :
Share given to D = 1

Balance of profits = 1 - 1

8
=
7

A’s new share = 7

8
×
6

14
= 3

B’s new share = 7

8
×
5

14
= 16
5

C’s new share = 7

8
×
3

14
= 16
3

D's share = 1

A:B:C:D= 3

8
:
5

16
:
3

16
:
1

8
= 6

16
:
5

16
:
3

16
:
2

16

D brings in ₹14,700 as Capital according to his th share of profit. Therefore, according to

1

D’s Capital, the total Capital of the new firm will be = 14,700 × 8

1
= ₹ 1,17,600
∴ A's Capital in new firm = 1,17,600 × 6

16
= ₹ 44,100
B's Capital in new firm = 1,17,600 × 5

16
= ₹ 36,750
C's Capital in new firm = 1,17,600 × 3

16
= ₹ 22,050
D's Capital in new firm = 1,17,600 × 2

16
= ₹ 14,700
Notes:
1. A’s Capital in the new firm should be ₹ 44,100, whereas his existing capital shown by his
Capital A/c is ₹ 47,760. Therefore, his excess Capital ₹ 47,760 - ₹ 44,100 = ₹ 3,660 will be
refunded to him.
2. B's Capital in the new firm should be ₹36,750, whereas his existing capital shown by his
Capital A/c is ₹ 40,150. Therefore, his excess Capital ₹ 40,150 - ₹ 36,750 = ₹ 3,400 will be
refunded to him.
3. C's Capital in the new firm should be ₹ 22,050, whereas his existing capital is only ₹
20,730. Therefore, he will bring in ₹ 22,050 - ₹ 20,730 = ₹ 1,320.

4. Calculation of Cash Balance : ₹

Opening Balance 1,890
Add: Capital and goodwill brought in by D 28,770
Add: Cash brought in by C 1,320
 31,980
Less: Amount paid to A 3,660
Less: Amount paid to B 3,400 7,060
Closing Balance 24,920
OR
REVALUATION ACCOUNT
Dr. Cr.
Particulars (₹) Particulars (₹)
To Furniture 3,000 By Stock 48,000
To Provision for doubtful debts 5,000
To Profit transferred to partners capital A/c
Radha’s Capital A/c 24,000
Manas’s Capital A/c 8,000
Arnav’s Capital A/c 8,000 40,000
48,000 48,000
Partner's Capital Account
Dr. Cr.
Radha Manas Arnav Radha Manas Arnav
Particulars Particulars
(₹) (₹) (₹) (₹) (₹) (₹)
To Manas’s
30,000 ____ 10,000 By balance b/d 4,00,000 3,00,000 2,00,000
Capital A/c
By Investment
To Cash A/c ____ 68,000 ____ Fluctuation 60,000 20,000 20,000
Reserve
To Manas’s By Revaluation
____ 3,00,000 ____ 24,000 8,000 8,000
loan A/c
To Balance By Radha
4,54,000 ____ 2,18,000 ____ 30,000 ____
c/d Capital A/c
By Arnav
____ 10,000 ____
Capital A/c
 4,84,000 3,68,000 2,28,000 4,84,000 3,68,000 2,28,000
To Arnav’s
____ ____ 50,000 By balance b/d 4,54,000 ____ 2,18,000
Current A/c
To balance By Radha’s
5,04,000 ____ 1,68,000 50,000 ____ ____
c/d current A/c
5,04,000 2,18,000 5,04,000 2,18,000
Balance Sheet of the reconstituted firm
st
as on 1 April 2019
Liabilities (₹) Assets (₹)
Capital A/c of partners Furniture 4,57,000
Radha 5,04,000 Investments 1,90,000
Arnav 1,68,000 6,72,000 Stock 2,88,000
Manas’s Loan 3,00,000 Debtors 2,20,000
Arnav’s Current A/c 50,000 Less Provision for doubtful debts (15,000) 2,05,000
Creditors 2,50,000 Cash 82,000
Radha’s Current A/c 50,000
12,72,000 12,72,000
Adjusted Capital of:
Arnav = ₹ 4,54,000
Radha = ₹ 2,18,000
Total = ₹ 6,72,000
Arnav's capital = ₹ 6,72,000 × 3

4
= ₹ 5,04,000
Radha's capital = ₹ 6,72,000 × 1

4
= ₹ 1,68,000
25. Pammy’s Capital Account
Dr. Cr.
Particulars Amount ₹ Particulars Amount ₹
To Drawings 10,000 By Balance b/d 40,000
To Pammy Executor’s A/c 75,400 By Profit and Loss (Suspense) 3,000
By Puneet’s Capital A/c 15,000
By Pankaj’s Capital A/c 15,000
 By Interest on Capital 2,400
By Reserve 10,000
85,400 85,400
Pammy’s Executor Account
Dr. Cr.
Amount Amount
Date Particulars J.F. Date Particulars J.F.
₹ ₹
2017- 2017-
18 18
By Pammy’s Capital
Sep. 30 To Bank 15,400 Sep. 30 75,400
A/c
Mar. Mar.
To Balance c/d 63,600 By Interest 3,600
31 31
79,000 79,000
2018- 2018-
19 19
April
Sep. 30 To Bank 22,200 By Balance b/d 63,600
01
(15,000 + 3,600 +
Sep. 30 By Interest 3,600
3,600)
Mar. Mar.
To Balance c/d 47,700 By Interest 2,700
31 31
69,900 69,900
2019- 2019-
20 20
April
Sep. 30 To Bank 20,400 By Balance b/d 47,700
01
Mar.
To Balance c/d 31,800 Sep. 30 By Interest 2,700
31
 Mar.
By Interest 1,800
31
52,200 52,200
2020- 2020-
21 21
April
Sep. 30 To Bank 18,600 By Balance b/d 31,800
01
(15,000 + 1,800 +
Sep. 30 By Interest 1,800
1,800)
Mar. Mar.
To Balance c/d 15,900 By Interest 900
31 31
34,500 34,500
2021- 2021-
22 22
April
Sep. 30 To Bank 16,800 By Balance b/d 15,900
01
(15,000 + 900 + 900) Sep. 30 By Interest 900
16,800 16,800
Working Notes:
i. Pammy’s Share of Profit
Previous Year’s × Profit Proportionate × Period Share of Deceased Partner = 30,000 × 6

12

×
1

5
= 3,000
ii. Pammy’s Share of Goodwill
Goodwill of the firm = Average Profit ´ Numbers of Year’s Purchase
Average Profit = 80,000+50,000+40,000+30,000

4
= 2,00,000

4
= 50,000
Goodwill of the firm = 50,000 × 3 = ₹ 1,50,000
Pammy's share = 1,50,000 × 1

5
= 30,000
iii. Gaining Ratio = New Ratio – Old Ratio
Puneet’s Share = 2

4
- 2

5
= 2

20

Pankaj’s Share = 2

4
- 2

5
= 2

20

Gaining Ratio between Puneet and Pankaj = 2 : 2 or 1 : 1

 iv. Interest on Capital for 6 months, i.e. from April 1, 2007 to September 30, 2007
Amount of Capital × Rate of Interest × Period = 40,000 × 12

100
×
6

12
= 2,400
v. Interest Amount
The firm closes its books every year on March 31, while instalments to Pammy’s Executor
are paid on September 30 every year.
Amount outstanding on 30 September = 75,400 – 15,400 = ₹ 60,000
Calculation of Interest:
Periods Amount Oustanding Yearly Interest For 6 Months
2017-18 60,000 60,000 × 12

100
= 7,200 7,200 × 6

12
= 3,600
2018-19 45,000 45,000 × 12

100
= 5,400 5,400 × 6

12
= 2,700
2019-20 30,000 30,000 × 12

100
= 3,600 3,600 × 6

12
= 1,800
2020-21 15,000 15,000 × 12

100
= 1,800 1,800 × 6

12
= 900
26. In the books of
Satnam Ltd.
Particulars L.F. Dr. (₹) Cr. (₹)
Building A/c Dr. 5,00,000
Plant A/c Dr. 4,60,000
Furniture A/c Dr. 2,20,000
Goodwill A/c Dr. 80,000
To Gurnam Ltd. 12,60,000
(Business purchased from Gurnam Ltd.)

Case (a) Gurnam Ltd. A/c Dr. 12,60,000

To 10% Debenture 12,60,000
(10% debenture issued to Gurnam ltd.)

Case (b) Gurnam Ltd. A/c Dr. 12,60,000

To 10% Debenture (10,080 × 100) 10,08,000
To Security Premium 2,52,000
(10% debenture issued to Gurnam ltd at 25% premium)

Case (c) Gurnam Ltd. A/c Dr. 12,60,000

 Discount on Issue of Debenture A/c Dr. 1,40,000
To 10% Debenture (14,000 × 100) 14,00,000
(10% debenture issued to Gurnam Ltd at discount)
Working Notes:-
Case (b)
Number of Debenture Issued
= =
12,60,000 12,60,000

100+125 125

= 10,080
Case (c)
Number of Debenture Issued
=
12,60,000 12,60,000

100−10 90

= 14,000
Part B :- Analysis of Financial Statements
27.
(b) To assess the financial position and profitability
Explanation:
Statement of profit and loss shows whether the enterprise is earning adequate profits and
whether the profits have increased or decreased as compared to previous years whereas
balance sheet shows the position of the business as regards to the payment of its short term as
well as long term liabilities. Different ratios are also calculated. Hence, to assess the
profitability and solvency is one of the objective of the financial statement analysis.
Other options i.e. historical analysis, ignores price level changes, ignores qualitative aspect
are the limitations of financial statement analysis.
OR

(c) Bank Charges

Explanation:
Bank charges is a part of other expenses in the statement of profit and loss I statement.
28.
(b) ₹ 3,60,000
Explanation:
Current ratio = C .A

C .L

Current asset = 2.4 C.L

Working capital = Current Asset - Current liabilities
 5,60,000 = 2.4 C.L - C.L
C.L = = ₹ 4,00,000
5,60,000

1.4

C.A = 2.4 × ₹ 4,00,000 = ₹ 9,60,000

Quick ratio = Q.A

C .L

Q.A = ₹ 4,00,000 × 1.5 = ₹ 6,00,000

Q.A = C.A - Inventory
Inventory = ₹ 9,60,000 - ₹ 6,00,000 = ₹ 3,60,000
29. (a) Sale of Non-current investment
Explanation:
Sale of investment is not concerned with financing activities in the Cash Flow statement. It is
concerned with investing activities Because the sale of fixed assets is shown under Investing
Activity.
OR
(a) Cash flow from investing activities ₹ 34,000
Explanation:
Cash flow from investing activities ₹ 34,000
30. (a) Cash paid for purchase of Non-current Investment
Explanation:
Cash paid for the purchase of investment is deducted in investing activities while preparing a
cash flow statement. It showed an outflow of cash in investing activities. But Cash received
from the sale of fixed assets. Cash received from the sale of investments, Interest received are
inflow hence added.

31. Sl.no Items Major Headings Sub-headings

Non-current Fixed Assets
(i) Mining Rights
Assets (Intangible assets)
Encashment of Employees Earned Leave Non-current
(ii) Long-term Provisions
Payable on Retirement Liabilities
Non-current Fixed Assets (Tangible
(iii) Vehicles
Assets assets)
This classification of assets is given as per revised schedule 3 of the company's act,2013 in
order to bring uniformity in classification and to ensure international standards. This
classification is given in part 1 of the schedule.
32. Capital employed = Shareholder fund + Non-current liability
Capital employed = 8,00,000 + 5,00,000 + 2,00,000 + 5,00,000 + 2,00,000
Capital employed = 22,00,000
Debt = 2,00,000 + 5,00,000 + 2,00,000 = 9,00,000
Debt to Capital employed Ratio = Debt
= 9,00,000

22,00,000
= 0.41 : 1
C apital employed

33. comparative statement of profit and loss

31st March, 31st March, Absolute Percentage
Note 2021 2022 Change Change
Particulars
No. (D = C
× 100)
(A) (B) (C = B - A) A

(%)
I. Revenue from
15,00,000 20,00,000 5,00,000 33.33
Operations
II. Expenses
Employee Benefit
4,00,000 8,00,000 4,00,000 100
Expenses
Other Expenses 1,00,000 2,00,000 1,00,000 100
Total 5,00,000 10,00,000 5,00,000 100
III. Profit before tax
10,00,000 10,00,000 - -
(I - II)
Less:- Tax (50%) 5,00,000 5,00,000 - -
IV. Profit after tax
5,00,000 5,00,000 - -
(III - IV)
OR
COMMON SIZE STATEMENT OF PROFIT AND LOSS
for the year ended 31 March 2022 and 2023
% of Balance Sheet
Absolute Amounts
Note Total
Particulars
No. 2021- 2022- 2021- 2022-
2022 2023 2022 2023
Revenue from Operations 15,00,000 18,00,000 100 100
Other Income 45,000 72,000 3 4
 Total Revenue 15,45,000 18,72,000 103 104
Less: Expenses
Cost of Materials Consumed 6,60,000 8,64,000 44 48
Employee Benefit Expenses 1,80,000 1,80,000 12 10
Other Expenses 1,05,000 54,000 7 3
Total Expenses 9,45,000 10,98,000 63 61
Profit before Tax (Total Revenue -
6,00,000 7,74,000 40 43
Total Expenses)
Working Note:-
For the year of 2021-22
i. Cost of Materials Consumed = 100 = 44%
6,60,000
×
15,00,000

ii. Employee Benefit Expenses = 100 = 12%

1,80,000
×
15,00,000

iii. Other Expenses = 100 = 7%

1,05,000
×
15,00,000

For the year of 2022-23

i. Cost of Materials Consumed = 100 = 48%
8,64,000
×
18,00,000

ii. Employee Benefit Expenses = 100 = 10%

1,80,000
×
18,00,000

iii. Other Expenses = 100 = 3%

54,000
×
18,00,000

34. Calculation of ‘Cash Flows from operating activities’

for the year ended 31st March, 2022
Details Amount
Particulars
(₹) (₹)
Net Loss before tax and extraordinary items (2,11,000)
Add : Non-cash and Non-operating expenses :
Depreciation on machinery 75,000
Interest on Debentures 24,000 99,000
Net Loss before changes in working capital (1,12,000)
Add : Decrease in Current Assets and Increase in Current Liabilities
:
Decrease in Inventories 33,000
Less : Increase in Current Assets and Decrease in Current
Liabilities:
Trade Payables (42,000) (9,000)
Cash generated from operations (1,21,000)
Less : Tax paid (80,000)
Net cash outflow/used in operating activities (2,01,000)
Provision for Tax A/c
Dr. Cr.
Particulars (₹) Particulars (₹)
To Bank A/c 80,000 By Balance b/d 2,10,000
To Balance c/d 2,04,000 By Statement of Profit & Loss 74,000
2,84,000 2,84,000
Working Notes:
Calculation of net profit before tax:
(₹)
Net Loss (2,85,000)
Add provision for Tax 74,000
Net loss before tax (2,11,000)