SAMPLE QUESTION PAPER - 2

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. When a new partner does not bring his share of goodwill in cash, the amount is [1]
debited to :

a) Current A/c of the New Partner b) Capital A/c of the Old Partners

c) Premium A/c d) Cash A/c

2. Assertion (A): Partnership firm is an organisation where seven or more persons carry [1]
on some business activity on the basis of agreement among them.
Reason (R): The profit or loss arising from the partnership business is shared by the
partners in the agreed ratio.

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. To whom dividend is given at a fixed rate in a company? [1]

a) To preference shareholders b) To debentureholders

c) To equity shareholders d) To promoters

OR
Monika Ltd. issued 50,000, 8% Debentures of ₹ 100 each at certain rate of premium and to
be redeemed at 10% premium. At the time of writing off Loss on Issue of Debentures,
Statement of Profit and Loss was debited with ₹ 2,00,000. At what rate of premium, these
debentures were issued?

a) 4% b) 16%

c) 6% d) 10%

4. A, B and C were partners in a firm sharing profits in 4 : 3 : 2 ratio. They decided to [1]
share future profits in 4 : 3 : 1 ratio. Sacrificing ratio and gaining ratio will be:

a) A Gain 4

72
; B Gain 3

72
;C b) A Sacrifice 4

72
; B Sacrifice 3

72
;
Sacrifice 7

72
C Gain 7

72

c) A Sacrifice 3

72
; B Sacrifice 4

72
; d) A Gain 3

72
; B Gain 4

72
;C
C Gain 7

72
Sacrifice 7

72

OR
Calculate the interest on drawings of Mr. Amit @10% p.a. for the year ended 31.03.2022,
if Mr. Amit withdrew 1200 at the end of each quarter

a) 180 b) 240

c) 220 d) 300

5. Salary or Commission to a partner is an [1]

a) appropriation cum charge b) charge against profits

c) asset d) appropriation out of profits

6. In the Balance Sheet of a company, interest accrued and due on debentures is shown [1]
under the main head

a) Reserves and Surplus b) Share Capital

c) Non-current Liabilities d) Current Liabilities

OR
Diksha Ltd. issued 4,000, 9% Debentures of ₹ 100 each at a discount of 10%, redeemable
at a premium. Discount on Issue of Debentures and Premium on Redemption of
Debentures were accounted for through Loss on Issue of Debentures Account. If the
amount of Loss on Issue of Debentures Account was ₹ 60,000, then the amount of
premium on redemption was:

a) ₹ 60,000 b) ₹ 40,000

c) ₹ 80,000 d) ₹ 20,000

7. Assertion (A): The security premium amount can be used to issue partially paid up [1]
bonus shares.
Reason (R): According to Section 52(2) of the Companies Act, 2013, the amount of
Securities Premium Reserve can be used only for some specific purposes.

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. Remaining partners after a partner retires contribute to retiring partner in [1]

a) New ratio of continuing partners b) Both Sacrificing ratio and New

ratio of continuing partners

c) Sacrificing ratio d) Gaining Ratio

OR
Every partner is bound to attend diligently to his ________ in the conduct of the business.

a) capital b) rights
 c) duties d) meetings

Question No. 9 to 10 are based on the given text. Read the text carefully and answer the [2]
questions:
P, Q and R are partners in a firm. Their capitals are ₹ 30,000, ₹ 20,000 and ₹ 10,000
respectively. As per partnership deed,
i. R is to be allowed remuneration of ₹ 3,000 p.a.
ii. Interest on capital @ 5% p.a.
iii. Profits should be distributed in the ratio of 2:2:1.
Ignoring the above terms, net profit of ₹ 18,000 was distributed among the partners equally

9. How much interest on capital is to be credited to partner P?

a) ₹ 1,500 b) ₹ 1,000

c) ₹ 900 d) ₹ 800

10. How much profit is to be credited to Partner Q after all adjustments?

a) ₹ 1,000 b) ₹ 2,400

c) ₹ 4,800 d) ₹ 1,200

11. Net profit of a firm is ₹ 4,950. Manager is entitled to a commission of 10% on profits [1]
before charging his commission. Manager’s commission will be:

a) ₹ 495 b) ₹ 450

c) ₹ 485 d) ₹ 550

12. Which type of capital will be written after the authorized capital in the balance sheet? [1]

a) Subscribed Capital b) Issued Capital

c) Paid-up Capital d) Called up Capital

13. Persons who start a company are called ________. [1]

a) Auditors b) Directors

c) Promoters d) Shareholders
14. A, B and C are partners sharing profits in 3 : 2 : 1 ratio. C was guaranteed that he will [1]
get minimum of ₹ 20,000 as his share of profit every year. Firm's profit was ₹ 90,000.
Any deficiency in C profit will be compensate by A and B in the ratio of 4 : 1. A's
share of Profit after meeting deficiency will be:

a) 45,000 b) 40,000

c) 44,000 d) 41,000

15. A and B are in partnership sharing profits in the ratio of 3 : 2. They take C as a new [1]
partner. Goodwill of the firm is valued at ₹ 3,00,000 and C brings ₹ 30,000 as his
share of goodwill in cash which is entirely credited to the Capital Account of A. New
profit sharing ratio will be:

a) 5 : 4 : 1 b) 6 : 3 : 1

c) 4 : 5 : 1 d) 3 : 2 : 1

OR
The formula for calculating the sacrificing ratio is:

a) Gaining Ratio - Old Ratio b) Old Share - New Share

c) New Share - Old Share d) Old Ratio - Gaining Ratio

16. ________ is prepared at the time of dissolution. [1]

a) Revaluation Account b) Profit and Loss Appropriation

Account

c) Profit & Loss Account d) Realisation Account

17. Bharti and Sashi are partners in a firm, sharing profits and losses in the ratio of 3 : 2. [3]
On 31st March, 2023 their Balance Sheet was as under:
BALANCE SHEET OF Bharti AND Sashi
as at 31st March, 2023
Liabilities ₹ Assets ₹
Sundry Creditors 13,800 Furniture 16,000
 General Reserve 23,400 Land and Building 56,000
Investment Fluctuation Fund 20,000 Investments 30,000
Bharti's Capital 50,000 Trade Receivables 18,500
Sashi's Capital 40,000 Cash in Hand 26,700
1,47,200 1,47,200
The partners have decided to change their profit sharing ratio to 1 :1 with immediate
effect. For the purpose, they decided that:
i. Investments to be valued at ₹ 20,000.
ii. Goodwill of the firm be valued at ₹ 24,000.
iii. General Reserve not to be distributed between the partners.
You are required to pass necessary Journal entries in the books of the firm. Show
workings.

18. Yogesh and Raju are partners in firm sharing profits and losses in the ratio of 3 : 2. [3]
st
Their fixed capitals as on 1 April, 2022, were ₹ 6,00,000 and ₹ 4,00,000 respectively.
Their partnership deed provided for the following :
i. Partners are to be allowed interest on their capitals @ 10% per annum.
ii. They are to be charged interest on drawings @ 4% per annum.
iii. Yogesh is entitled to a salary of ₹ 2,000 per month.
iv. Raju is entitled to a commission of 5% of the correct net profit of the firm before
charging such commission.
v. Yogesh is entitled to rent of ₹ 3,000 per month for the use of his premises by the
firm.
st
The net profit of the firm for the year ended 31 March, 2023, before providing for
any of the above clauses was ₹ 4,00,000. Both partners withdrew ₹ 5,000 at the
beginning of every month for the entire year.
You are required to prepare a Profit and Loss Appropriation Account for the year
st
ended 31 March, 2023.

OR
Ravi and Rahul are partners in a firm. Ravi was to get a commission of 10% on the net
profits before charging any commission. However, Rahul was to get a commission of 10%
 on the net profits after charging all commissions. Fill in the missing figures in the
following Profit and Loss Appropriation Account for the year ended 31st March 2023:
PROFIT AND LOSS APPROPRIATION ACCOUNT
for the year ended 31st March, 2023
Dr. Cr.
Particulars ₹ Particulars ₹
To Ravi's Commission (₹ ____ × 10

100
) 44,000 By Profit & Loss A/c ____
To Rahul's Commission ____
To Profit transferred to:
Ravi's Capital A/c ____
Rahul's Capital A/c ____ ____
____ ____

19. Z Ltd purchased machinery from K Ltd, Z Ltd, paid K Ltd as follows [3]
i. By issuing 5,000 equity shares of ₹ 10 each at a premium of 30%.
ii. By issuing 1,000, 8% debentures of ₹ 100 each at a discount of 10%.
iii. Balance by giving a promissory note of ₹ 48,000 payable after two months.
Pass necessary journal entries for the purchase of machinery and payment to K Ltd
in the books of Z Ltd.

OR
A Ltd. forfeited 600 Equity Shares of ₹ 10 each issued at a premium of 20% to Rajat who
had applied for 720 Equity Shares, for non-payment of allotment money of ₹ 5 per equity
share (including premium) and the first and final call of ₹ 5 per equity share. Out of these,
200 Equity Shares were reissued to Sanjay credited as fully paid for ₹ 9 per equity share.
As per the terms of issue, company was to retain the excess application money to adjust
against calls. Pass Journal entries to record forfeiture and reissue of shares.

20. The profits of a firm for the last five years were: [3]
Year → 2011 2012 2013 2014 2015
Profits (Rs.) 45,000 50,000 52,000 65,000 85,000
 Calculate the value of goodwill on the basis of two years of purchase of weighted
average profits, the weights to be used are 2011-1, 2012-2, 2013-3, 2014-4 and 2015-
5.

21. The authorised capital of Suhas Ltd is Rs. 50,00,000 divided into 25,000 shares of Rs. [4]
200 each. Out of these, the company issued 12,000 shares of Rs. 200 each at a
premium of 10%. The amount per share was payable as follows
Rs. 60 on application
Rs. 60 on allotment (including premium)
Rs. 30 on first call and balance on final call.
Public applied for 11,000 shares. All the money was duly received.
Prepare an extract of balance sheet of Suhas Ltd as per Revised Schedule III, Part I of
the Companies Act, 2013 disclosing the above information. Also prepare ‘Notes to
accounts’ for the same.

22. Gaurav, Saurabh and Vaibhav were partners in a firm sharing profits and losses in the [4]
ratio of 2 : 2 : 1. They decided to dissolve the firm on 31st March, 2018. After
transferring Sundry assets (other than cash in hand and cash at Bank) and third party
liabilities to realisation account, the assets were realized and liabilities were paid off as
follows:
i. A machinery with a book value of ₹ 6,00,000 was taken over by Gaurav at 50% and
stock worth ₹ 5,000 was taken over by a creditor of ₹ 9,000 in full settlement of his
claim.
ii. Land and building (book value ₹ 3,00,000) was sold for ₹ 4,00,000 through a broker
who charged 2% commission.
iii. The remaining creditors were paid ₹ 76,000 in full settlement of their claim and the
remaining assets were taken over by Vaibhav for ₹ 17,000.
iv. Bank loan of ₹ 3,00,000 was paid along with interest of ₹ 21,000.
Pass necessary journal entries for the above transactions in the books of the firm.

23. On 1st April 2023, Saniya Ltd. issued 30,000 Equity Shares of ₹ 10 each at a premium [6]
of ₹ 4 per share, payable as follows:
₹ 6 on application (including ₹ 1 premium),
₹ 2 on the allotment (including ₹ 1 premium),
 ₹ 3 on the first call (including ₹ 1 premium ), and
₹ 3 on second and final call (including ₹ 1 premium).
Applications were received for 45,000 shares, of which applications for 9,000 shares
were rejected and their money was refunded. Rest of the applicants were issued shares
on pro rata basis. Harish, to whom 600 shares were allotted, did not pay the allotment
money and his shares were forfeited after allotment. Manoj, who applied for 1,080
shares did not pay the two calls and his shares were forfeited.
1,200 forfeited shares were reissued as fully paid-up on receipt of ₹ 9 per share, the
whole of Manoj's shares being included.
Prepare Cash Book and Pass necessary Journal entries. Also, show share capital in the
Balance Sheet of the company.

OR
Anmol India Ltd. invited applications for issuing 1,20,000 equity shares of ₹ 10 each at a
premium of ₹ 2 per share. The amount was payable as follows:
On Application ₹ 2 per share
On Allotment ₹ 5 per share (including premium)
On First and Final call Balance
Applications for 1,50,000 shares were received. Shares were allotted to all the applicants
on pro-rata basis. Excess money received on applications was adjusted towards sums due
on allotment. All calls were made. Monu who had applied for 3,000 shares failed to pay
the amount due on allotment and first and final call. Manav who was allotted 2,400 shares
failed to pay the first and final call. Shares of both Monu and Manav were forfeited. The
forfeited shares were reissued at ₹ 9 per share as fully paid-up. Pass necessary journal
entries for the above transactions in the books of Anmol India Ltd.

24. Mohan and Mahesh were partners in a firm sharing profits in the ratio of 3: 2. On 1st [6]
April, 2012, they admitted Nusrat as a partner in the firm. The balance sheet of Mohan
and Mahesh on that date was as under
Balance Sheet
as at 1st April, 2012
Liabilities Amt(Rs) Assets Amt(Rs)
Creditors 2,10,000 Cash in Hand 1,40,000
 Workmen's Compensation Fund 2,50,000 Debtors 1,60,000
General Reserve 1,60,000 Stock 1,20,000
Capital A/cs Machinery 1,00,000
Mohan 1,00,000 Building 2,80,000
Mahesh 80,000 1,80,000
8,00,000 8, 00,000
It was agreed that
i. The value of building and stock be appreciated to Rs 3,80,000 and Rs 1,60,000
respectively.
ii. The liabilities of workmen’s compensation fund was determined at Rs 2,30,000.
iii. Nusrat brought in her share of goodwill Rs 1,00,000 in cash.
iv. Nusrat was to bring further cash as would make her capital equal to 20% of the
combined capital of Mohan and Mahesh after above revaluation and adjustments
are carried out.
v. The future profit sharing ratio will be Mohan 2/5th, Mahesh 2/5th, Nusrat 1/5th.
Prepare revaluation account, partners’ capital accounts and balance sheet of the new
firm. Also, show clearly the calculation of capital brought by Nusrat.

OR
Akul, Bakul and Chandan were partners in a firm sharing profits in the ratio of 2 : 2 : 1. On
st
31 March 2023 their Balance Sheet was as follows:
Balance Sheet of Akul, Bakul and Chandan as on 31-3-2023
Amount Amount
Liabilities Assets
(₹) (₹)
Sundry Creditors 45,000 Cash at Bank 42,000
Employees Provident
13,000 Debtors 60,000
Fund
Less: Provision for doubtful
General reserve 20,000 (2,000) 58,000
debts
Capitals: Stock 80,000
 Akul 1,60,000 Furniture 90,000
Bakul 1,20,000 Plant and Machinery 1,80,000
Chandan 92,000 3,72,000
4,50,000 4,50,000
Bakul retired on the above date and it was agreed that:
i. Plant and Machinery was undervalued by 10%.
ii. Provision for doubtful debts was to be increased to 15% on debtors.
iii. Furniture was to be decreased to ₹ 87,000.
iv. Goodwill of the firm was valued at ₹ 3,00,000 and Bakul’s share was to be adjusted
through the capital accounts of Akul and Chandan.
v. Capital of the new firm was to be in the new profit sharing ratio of the continuing
partners.
Prepare Revaluation account, Partners’ Capital accounts and the Balance Sheet of the
reconstituted firm.

25. Gita, Radha and Garv were partners in a firm sharing profits and losses in the ratio of [6]
3:5:2. On 31st March, 2019, their balance sheet was as follows:
Balance Sheet of Gita, Radha & Garv as on 31st March, 2019
Amount
Liabilities Assets Amount (₹)
(₹)
Sundry Creditors 60,000 Cash 50,000
General Reserve 40,000 Stock 80,000
Capitals : Debtors 40,000
Gita 3,00,000 Investments 30,000
Radha 2,00,000 Buildings 5,00,000
Garv 1,00,000 6,00,000
7,00,000 7,00,000
Radha retired on the above date and it was agreed that:
a. Goodwill of the firm be valued at ₹ 3,00,000 and Radha’s share be adjusted through
the capital accounts of Gita and Garv.
 b. Stock was to be appreciated by 20%.
c. Buildings were found undervalued by ₹ 1,00,000 .
d. Investments were sold for ₹ 34,000 .
e. Capital of the new firm was fixed at ₹ 5,00,000 which will be in the new profit
sharing ratio of the partners; the necessary adjustments for this purpose were to be
made by opening current accounts of the partners.
Prepare Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of the
reconstituted firm on Radha’s retirement.

26. Pass the necessary journal entries for the issue of debentures for the following [6]
transactions:
i. Anand Ltd. issued 800, 9% Debentures of ₹ 500 each at a premium of 20%, to the
vendors for machinery purchased from them costing ₹ 4,80,000.
ii. Dawar Ltd. issued 5,000, 7% Debentures of ₹ 200 each at a premium of 5%,
redeemable at a premium of 10%.
iii. Novelty Ltd. issued 1,000, 8% Debentures of ₹ 100 each at a discount of 5%,
redeemable at a premium of 10%.

Part B :- Analysis of Financial Statements

27. Which objective is useful for the external users of financial statements? [1]

a) Assessing the Managerial b) Inter-firm Comparison

Efficiency

c) Assessing the Short-term and d) Assessing the Earning Capacity

Long-term Solvency of the Firm or profitability

OR
Under which heading the item bills discounted but not yet matured will be shown in the
balance sheet of a company?

a) Current Assets b) Contingent Liabilities

c) Current Liability d) Unamortised Expenditure

28. The ratio of Current Assets (₹ 10,00,000) to Current Liabilities (₹ 4,00,000) is 2.5 : 1. [1]
The accountant of the firm is interested in maintaining a Current Ratio of 1.8 : 1, by
acquiring some Current Assets on Credit. Current asset acquired will be:

a) 2,80,000 b) 3,00,000

c) 3,50,000 d) 1,50,000

29. The objectives of Cash Flow Statement are [1]

A. Analysis of cash position
B. Short-term cash planning
C. Evaluation of liquidity
D. Comparison of Operating Performance

a) A, B, C, D b) Both A and C

c) Both A and B d) Both B and D

OR
Which of the following item is not added or deducted while preparing a cash flow
statement?

a) Dividend Received b) Bonus shares issued

c) Dividend Paid d) Purchase of goodwill

30. Value of copyrights was Rs.68,000 in the year 31st March 2015 but after one year on [1]
31st March 2016 value of copyrights was Rs.1,00,000. How it will affect the cash flow
statement?

a) Add Rs. 1,00,000 in investing b) Less Rs. 32,000 in investing

activities activities

c) Add Rs. 32,000 in investing d) Less Rs.1,00,000 in investing

activities activities
31. Name any two items that are shown under the head ‘other current liabilities’ and any [3]
two items that are shown under the head ‘other current assets’ in the balance sheet of a
company as per Schedule III of the Companies Act, 2013.

32. Working Capital ₹ 9,00,000; Total Debts (Liabilities) ₹ 19,50,000; Long-Term Debts ₹ [3]
15,00,000. Calculate Current Ratio.

33. From the following Statement of Profit and Loss, prepare Common-size Statement of [4]
Profit and Loss and give comments:
Note 31st March, 2023 31st March, 2022
Particulars
No. (₹) (₹)
I. Income
Revenue from Operations (Net
12,50,000 10,00,000
Sales)
II. Expenses
Purchases of Stock-in-Trade 8,70,000 7,20,000
Change in Inventories of Stock-
(20,000) 30,000
in-Trade
Depreciation and Amortisation
30,000 20,000
Expenses
Other Expenses 50,000 30,000
Total 9,30,000 8,00,000
III. Profit before Tax (I - II) 3,20,000 2,00,000
IV. Income Tax 96,000 60,000
V. Profit after Tax (III - IV) 2,24,000 1,40,000

OR
From the following Statement of Profit and Loss of PP Ltd. prepare a Common Size
Statement of Profit and Loss for the year ended 31.3.2021 and 31.3.2022:
2021-2022 2020-2021
Particulars
(₹) (₹)
Revenue from operations 20,00,000 10,00,000
 Other Income 5,00,000 5,00,000
Expenses 10,00,000 7,00,000
Tax Rate 50%

34. Calculate Cash Flow from Operating Activities from the following information: [6]
Opening Balances Closing Balances
Particulars
(₹) (₹)
Surplus, i.e., Balance in Statement of Profit
30,000 35,000
and Loss
General Reserve 10,000 15,000
Provision for Depreciation on Machinery 30,000 35,000
Outstanding Expenses 5,000 3,000
Goodwill 20,000 10,000
Trade Receivables (Sundry Debtors) 40,000 35,000
Machinery costing ₹ 20,000 having book value of ₹ 14,000 was sold for ₹ 18,000
during the year.
 SOLUTION
SAMPLE QUESTION PAPER - 2
SUBJECT- ACCOUNTANCY (055)
CLASS XII (2024-25)
Part A:- Accounting for Partnership Firms and Companies
1. (a) Current A/c of the New Partner
Explanation:
Current A/c of the New Partner as we have to receive money from new partner
2.
(d) A is false but R is true.
Explanation:
A partnership firm is a form of organisation where two or more persons carry on some
business activity on the basis of agreement among them.
3. (a) To preference shareholders
Explanation:
To preference shareholders
OR
(c) 6%
Explanation:
Amount of Premium payable at the time of Redemption @ 10% = ₹ 5,00,000
Out of this amount, ₹ 2,00,000 have been debited to Statement of Profit & Loss. It means ₹
3,00,000 have been written off from Securities Premium.
₹3,00,000
Rate of Premium = ₹50,00,000
× 100 = 6%
4. (a) A Gain 4

72
; B Gain 72
3
; C Sacrifice 7

72

Explanation:
A Gain 72
4
; B Gain 3

72
; C Sacrifice 7

72

Sacrificing ratio = Old ratio - New ratio

(−4)
A :- 4

9
−
4

8
=
32−36

72
=
72
Gain
(−3)
B :- 3

9
−
3

8
=
24−27

72
=
72
Gain
C :- 2

9
−
1

8
=
16−9

72
=
7

72

OR
(a) 180
Explanation:
4,800 X 10/100 X 4.5/12 = 180
5.
(d) appropriation out of profits
Explanation:
In a normal situation, salary or commission paid to a partner is treated as an appropriation. It
means salary or commission is paid only when there is profit and amount of salary or
commission cannot be more than the profits. So we can say that in the case of profit,
commission or salary to a partner can be provided.
6.
(d) Current Liabilities
Explanation:
In the Balance Sheet of a company, interest accrued and due on debentures is shown under
the main head Current Liabilities.
OR

(d) ₹ 20,000
Explanation:
₹ 20,000
Discount on issue of debenture = (4,000 × 100) × 10% = 40,000
Premium on redemption = Loss on issue of debenture - Discount on issue of debenture
Premium on redemption = 60,000 - 40,000 = 20,000
7.
(d) A is false but R is true.
Explanation:
According to Section 52(2) of the Companies Act, 2013, the amount of Securities Premium
Reserve can be used only for the following purposes:
i. To issue fully paid-up bonus shares to the shareholders.
ii. To write off preliminary expenses of the companies.
iii. To write off the commission paid or expenses on issue of shares/debentures.
iv. To pay premium on the redemption of preference shares or debentures of the company.
v. Buy-back of equity shares and other securities as per Section 68.
8.
(d) Gaining Ratio
 Explanation:
At the time of retirement or death of a partner, remaining partners compensate retired partner
in Gaining Ratio so that retired partner to contribute to future profits.
OR

(c) duties
Explanation:
duties
9. (a) ₹ 1,500
Explanation:
₹ 1,500
10. (c) ₹ 4,800
Explanation:
₹ 4,800
11. (a) ₹ 495
Explanation:
Commission = 4,950 × 10

100
= ₹ 495
12.
(b) Issued Capital
Explanation:
Types of share capital to be written under head Share Capital in order in the balance sheet is
as follows:
i. Authorized Capital
ii. Issued Capital
iii. Subscribed Capital
iv. Subscribed and fully paid-up capital
v. Subscribed and not fully paid-up capital
13.
(c) Promoters
Explanation:
Promoters
14.
(d) 41,000
 Explanation:
A’s share = 45,000

Deficiency to be born by A = 4,000

A's share of Profit after meeting deficiency will be: 45000 - 4000 = 41,000
15. (a) 5 : 4 : 1
Explanation:
C brings 30,000 as goodwill so his share will be 1/10 which is given by A only as goodwill
credited to A only.
A 's new share = 3/5 -1/10 = 5/10
B' share = 2/5 x 2/2 = 4/10 ( Same as earlier)
OR

(b) Old Share - New Share

Explanation:
as old share is higher in sacrifice
16.
(d) Realisation Account
Explanation:
Realisation Account
17. IN THE BOOKS OF BHARTI AND SASHI
JOURNAL
Debit Credit
Date Particulars L.F.
Amount (₹) Amount (₹)
2023
March
Investment Fluctuation Fund A/c Dr. 20,000
31
To Investments A/c 10,000
To Bharti’s Capital A/c 6,000
To Sashi’s Capital A/c 4,000
(Being depreciation in the value of investment
provided for and excess amount distributed)
 March
Sashi’s Capital A/c (24,000 × 1
) Dr. 2,400
31 10

To Bharti’s Capital A/c (24,000 × 1

10
) 2,400
(Being adjustment for goodwill due to change
in profit-sharing ratio)

March
Sashi’s Capital A/c (23,400 × 1
) Dr. 2,340
31 10

To Bharti’s Capital A/c (23,400 × 1

10
) 2,340
(Being adjustment for general reserve not
distributed)
Working Notes:
Calculation of Change in Profit Sharing Ratio
Particulars Bharti Sashi
Old Ratio 3

5
2

New Ratio 1

2
1

Gain/Sacrifice ( – )=
3

5
1

2
1

10
(Sacrifice) ( – ) = (−
2

5
1

2
1

10
) (Gain)
18. PROFIT AND LOSS APPROPRIATION ACCOUNT
for the year ended 31st March, 2023
Dr. Cr.
Particulars ₹ Particulars ₹
To Interest on Capital By Profit & Loss A/c (Net
4,00,000
A/c Profit)
Yogesh's Current A/c 60,000 Less: Rent 36,000 3,64,000
Raju's Current A/c 40,000 1,00,000 By Interest on drawings
To Salary Yogesh Current A/c 1,300
Yogesh's Current A/c 24,000 Raju's Current A/c 1,300 2,600
To Commission
Raju's Current A/c 18,200
 To Profit transferred
to:
Yogesh's Current A/c 1,34,640
Raju's Current A/c 89,760 2,24,400
3,66,600 3,66,600
W.N.:
i. Interest on Drawings: 60, 000 × 4

100
×
6.5

12
= ₹1,300
ii. Commission = 5% on ₹3,64,000 = ₹18,200.
OR
PROFIT AND LOSS APPROPRIATION A/C
for the year ended 31st March, 2023
Dr. Cr.
Particulars ₹ Particulars ₹
To Ravi's Commission (₹ 4,40,000 By Profit & Loss
44,000 4,40,000
×
10

100
) Account
To Rahul's Commission
36,000
(₹ 3,96,000× 10

110
)
To Profit transferred to Capital
Account
Ravi's Capital A/c 1,80,000
Rahul's Capital A/c 1,80,000 3,60,000
4,40,000 4,40,000
Working Notes:
i. Calculation of profit before charging any commission:-
Ravi's Commission @ 10% on the net profits before charging any commission = 44,000
∴ Total Profit before charging any commission = ₹ 44,000 × 100

10
= ₹ 4,40,000
ii. Calculation of Rahul's commission:-
Profit after charging Ravi's Commission = ₹ 3,96,000 (₹ 4,40,000 - ₹ 44,000)
Commission of Rahul = ₹ 3,96,000 × 110
10
= ₹ 36,000

19. Purchase Consideration: ₹

(i) 5,000 Equity Shares @ ₹13 65,000
(ii) 1,000 Debentures @ ₹ 90 90,000
(iii) Promissory Note 48,000
2,03,000

Journal of Z Ltd.
(i) Machinery A/c Dr. 2,03,000
To K Ltd 2,03,000
(Machinery purchased from K Ltd.)

(ii) K Ltd Dr. 65,000

To Equity Share Capital A/c 50,000
To Securities Premium A/c 15,000
(Part payment made by issue of 5,000 equity shares of ₹ 10 each at
₹ 13)

(iii) K Ltd A/c Dr. 90,000

Discount on Issue of Debentures A/c Dr. 10,000
To 8% Debentures A/c 1,00,000
(Part payment made by issue of ₹ 1,00,000 debentures at 10%
discount)

(iv) K Ltd. Dr. 48,000

To Bills Payable A/c 48,000
(Balance payment made by giving promissory note)

(v) Securities Premium A/c Dr. 10,000

To Discount on Issue of Debentures A/c 10,000
(Discount on issue of debentures written off)
OR
JOURNAL OF A LTD.
Dr. Cr.
Date Particulars L.F.
(₹) (₹)
 Share Capital A/c Dr. 6,000
Securities Premium A/c Dr. 1,200
To Forfeited Shares A/c 1,440
To Shares Allotment A/c 2,760
To Shares First and Final Call A/c
(600 shares forfeited for non-payment of allotment and call 3,000
money) (WN1)

Bank A/c Dr. 1,800

Forfeited Shares A/c Dr. 200
To Share Capital A/c
(200 forfeited shares reissued as fully paid-up for ₹ 9 per 2,000
share)

Forfeited Shares A/c Dr. 280

To Capital Reserve A/c
280
(Transfer of gain on reissue to Capital Reserve) (WN 2)
Working Notes:
1. Calculation of the amount due but not paid as allotment: ₹
(a) Total No. of shares applied 720
(b) Total money paid on application (720 × ₹ 2) 1,440
(c) Excess application money [₹ 1,440 - (600 × ₹ 2)] 240
(d) Total amount due on allotment (600 × ₹ 5) 3,000
(e) Amount due but not paid on allotment (₹ 3,000 - ₹ 240) 2,760
2. Amount transferred to Capital Reserve:
Amount forfeited on 600 shares 1,440
₹1,440
∴ Amount forfeited on 200 shares ( 600
× 200 ) 480
Less: Discount allowed on 200 shares reissued (200)
Gain on reissue to be transferred to Capital Reserve 280
20. STEP 1;
Calculation of total weighted profit
 Year Profit (Rs.) Weights Weights Profit
(A) (B) (C) (D) = (B X C)
Rs. Rs.
2011 45,000 1 45,000
2012 50,000 2 1,00,000
2013 52,000 3 1,56,000
2014 65,000 4 2,60,000
2015 85,000 5 4,25,400
Total 15 9,86,400
STEP 2;
Total weighted profit
Weighted Average Profit =
Total of weights

= 9,86,400

15
= Rs. 65,760
STEP 3;
Goodwill = Weighted Average Profit x No. of years purchase
= 65760 x 2 = Rs.1,31,520
21. Extract of Balance Sheet
as at...
Particulars Note No. Amt (₹)
I. EQUITY AND LIABILITIES :
Shareholders' Funds :
( a ) Share Capital 1 22,00,000
( b ) Reserves and Surplus 2 2,20,000
24,20,000
II. ASSETS
Current Assets
Cash and Cash Equivalents 3 24,20,000
24,20,000
Notes to Accounts
 Particulars Amt (₹)
( 1 ) Share Capital
Authorised Capital :
25,000 Shares of ₹200 each 50,00,000
Issued Capital :
12,000 Shares of ₹200 each 24,00,000
Subscribed Capital :
Subscribed and Fully Paid-up
11,000 Shares of Rs. 200 22,00,000
(2) Reserves and Surplus :
Securities Premium Reserve 2,20,000
(3) Cash and Cash Equivalents :
Cash at Bank 24,20,000
22. JOURNAL
Date Particulars Dr. (₹) Cr. (₹)
(i) Gaurav's Capital A/c Dr. 3,00,000
To Realisation A/c 3,00,000
(Being machinery taken over by partner)
No entry for Stock taken by Creditor
(ii) Bank A/c Dr. 3,92,000
To Realisation A/c 3,92,000
(Being Land and Building sold)
Realisation A/c Dr. 76,000
To Bank A/c 76,000
(Being payment made to creditors)
Vaibhav's Capital A/c Dr. 17,000
To Realisation A/c 17,000
(Being assets taken over by partner)
 Realisation A/c Dr. 3,21,000
To Bank A/c 3,21,000
(Being bank loan paid along with interest ₹ 21,000)
23. In the Books of Saniya Ltd.
CASH BOOK
Dr. Cr.
Particulars ₹ Particulars ₹
To Equity Shares Application A/c By Equity Shares Application
2,70,000 54,000
(45,000 × ₹ 6) A/c (9,000 shares x ₹ 6)
To Equity Shares Allotment A/c (WN 1) 23,520 By Balance c/d 4,21,320
To Equity Shares First Call A/c (WN 2)
85,500
(28,500 shares × ₹ 3)
To Equity Shares Second and Final Call
85,500
A/c (WN 2) (28,500 shares × ₹ 3)
To Equity Share Capital A/c (1,200
10,800
shares × ₹ 9)
4,75,320 4,75,320
JOURNAL
Date Particulars L.F. Dr. (₹) Cr. (₹)
Equity Shares Application A/c Dr. 2,16,000
To Equity Share Capital A/c (30,000 × ₹ 5) 1,50,000
To Securities Premium A/c (30,000 × ₹ 1) 30,000
To Equity Shares Allotment A/c (6,000 × ₹ 6)
36,000
(Application money adjusted)

Equity Shares Allotment A/c (30,000 × ₹ 2) Dr. 60,000

To Equity Share Capital A/c (30,000 × ₹ 1) 30,000
To Securities Premium A/c (30,000 × ₹ 1)
30,000
(Allotment money due on 30,000 shares)

Equity Share Capital A/c (600 × ₹ 6) Dr. 3,600

Securities Premium A/c (WN 5) Dr. 480
To Equity Shares Allotment A/c [WN 1 (b)] 480
To Forfeited Shares A/c
(600 shares of Harish forfeited for non-payment of 3,600
allotment money)

Equity Shares First Call A/c (29,400 × ₹ 3) Dr. 88,200

To Equity Share Capital A/c (29,400 × ₹ 2) 58,800
To Securities Premium A/c (29,400 × ₹ 1)
29,400
(First call money due on 29,400 shares)

Equity Shares Second and Final Call A/c (29,400 × ₹ 3) Dr. 88,200
To Equity Share Capital A/c (29,400 × ₹ 2) 58,800
To Securities Premium A/c (29,400 × ₹ 1)
29,400
(Second and final call due on 29,400 shares)

Equity Share Capital A/c (900 × ₹ 10) Dr. 9,000

Securities Premium A/c (900 × ₹ 2) Dr. 1,800
To Equity Shares First Call A/c (900 × ₹ 3) 2,700
To Equity Shares Second and Final Call A/c (900 × ₹ 3) 2,700
To Forfeited Shares A/c
(900 shares of Manoj forfeited for non-payment of both 5,400
the calls)

Forfeited Shares A/c (1,200 × ₹ 1) Dr. 1,200

To Equity Share Capital A/c
(Discount on reissue adjusted against the credit balance of 1,200
Forfeited Shares Account)

Forfeited Shares A/c Dr. 6,000

To Capital Reserve A/c (WN 3)
6,000
(Gain (profit) on reissue transferred to Capital Reserve)
BALANCE SHEET OF SANIYA LTD. as at ...
Particulars Note No. ₹
I. EQUITY AND LIABILITIES
Shareholders' Funds
Share Capital 1 2,98,800
Notes to Accounts
Particulars ₹
1. Share Capital
Authorised Capital
...Equity Shares of ₹ 10 each ...
Issued Capital
30,000 Equity Shares of ₹ 10 each 3,00,000
Subscribed Capital
Subscribed and Fully Paid-up
29,700 Equity Shares of ₹ 10 each 2,97,000
Forfeited Shares A/c 1,800
2,98,800
Working Notes:

1. (a) Excess amount received from Harish on application:

600 shares were allotted to Harish
Therefore, he must have applied for = = 720 share
36,000
× 600
30,000

Excess application money received from Harish:

(720 shares - 600 shares) × ₹ 6 = 120 Shares × ₹ 6 = ₹ 720.
(b) Amount due but not paid by Harish on allotment: ₹
600 shares × ₹ 2 1,200
Less: Excess application money adjusted on allotment
[₹ 600 as a part of Share Capital (600 × ₹ 1) and balance ₹ 120 as a part of 720
securities Premium]
Amount due but not paid by Harish 480
(c) Amount received on allotment:
 Total amount due on allotment (30,000 × ₹ 2) 60,000
Less: Excess application money adjusted (6,000 × ₹ 6) (36,000)
24,000
Less: Amount due but not paid by Harish [WN 1(b)] (480)
Net amount received on allotment 23,520
2. Manoj applied for 1,080 shares.
Therefore, he must have been allotted = = 900 shares
30,000
× 1, 080
36,000

He has not paid first and second and final call money, as such
a. First call money will be received on 29,400 shares - 900 shares as Manoj = 28,500
shares.
b. Second and final call money will be received on 29,400 shares - 900 shares of Manoj =
28,500 shares
3. Amount Transferred to Capital Reserve:
1,200 shares have been reissued which include 900 shares of Manoj and the
₹
balance 300 of Harish.
(a) Amount forfeited in respect of Manoj's shares 5,400
(a) Amount forfeited in respect of Harish's shares (₹3, 600 × 300

600
) 1,800
7,200
Less: Loss on reissue of 1,200 shares @ ₹ 1 each (1,200)
Gain on reissue to be transferred to Capital Reserve 6,000
4. Balance in Forfeited Shares Account:
Profit on 600 shares of Harish 3,600
Therefore, the balance of Forfeited Shares A/c on 300 unissued shares
₹3,600 1,800
( × 300)
600

It should be noted that forfeited amount of shares not yet reissued will be shown in the
Balance Sheet as a part of Capital.
5. Securities premium on 600 shares allotted to Harish = 600 × ₹ 1 = ₹ 600, out of this ₹ 120
is already received as surplus application money. Balance of ₹ 480 has not been received
by the company. Therefore, at the time of forfeiture, Securities Premium Account will be
debited by ₹ 480 to cancel it, because Securities Premium Account was credited at the time
of allotment. This should also be considered at the time of forfeiture of Manoj's shares.
 OR
Working Note 1.
Amount to
No. of No. of Excess amount Amount to
be received Amount
Category Shares shares received on be adjusted
On Refunded
Applied Allotted Application on allotment
Allotment
1,20,000
30,000 Shares
I. 1,50,000 1,20,000 shares × 5 = 60,000 Nil
× 6 = 60,000
6,00,000
TOTAL 1,50,000 1,20,000 60,000 Nil
Working Note 2.
Monu:
No. of shares Applied = 3,000 shares
1,50,00 share
No. of shares Allotted = 3,000 shares × = 2,400 shares
1,20,000 share

Excess amount on share application received = (3,000 - 2,400) 600 shares × ₹ 2 = ₹ 1,200
Amount to be received on Allotment = 2,400 shares × ₹ 5 = ₹ 12,000
Outstanding on allotment = ₹ 12,000 - ₹ 1,200 = ₹ 10,800
Manav:
No. of shares Allotted = 2,400 shares
1,50,00 share
No. of shares Applied = 2,400 shares × = 3,000 shares
1,20,000 share

Amount due on 1st and Final Call = 2400 shares × ₹ 5 = ₹ 12,000

Working Note 3.
Amount transfer to Capital Reserve = 18,000 - 4,800 = ₹ 3,200
In The Books Of Anmol India Ltd.
Journal
Date Particulars L.F. Dr. (₹) Cr. (₹)
1. Bank A/c Dr. 3,00,000
To Equity Share Application A/c
(Being Amount Received on application of share @ 2 3,00,000
per share on 1,50,000 shares)

2. Equity Share Application A/c Dr. 3,00,000

 To Equity Share Capital A/c 2,40,000
To Equity shares Allotment A/c
(Being amount transfer to capital a/c and adjustment 60,000
of pro-rata made)

3. Equity Share Allotment A/c Dr. 6,00,0000

To Equity share Capital A/c 3,60,000
To Security Premium Reserve A/c
(Being Amount on allotment Due on 1,60,000 shares 2,40,000
@ 6 each including ₹ 3 as premium)

4. Bank A/c Dr. 5,29,200

To Equity Share Allotment A/c (6,00,000 - 60,000 -
10,800) 5,29,200
(Being amount received on Allotment)

5. Equity Share First & Final call A/c Dr. 6,00,000

To Equity share Capital A/c
6,00,000
(Being amount Due on First & Final Call Recorded)

6. Bank A/c Dr. 5,76,000

To Equity Share First & Final call A/c (6,00,000 -
12,000 - 12,000) 5,76,000
(Being Amount received on First and Final calls)

7. Equity Share Capital A/c Dr. 48,000

Security Premium Reserve A/c Dr. 4,800
To Equity Share Forfeited A/c 18,000
To Equity Share Allotment A/c 10,800
To Equity Share First & Final call A/c
(Being shares forfeited on which amount of call not 24,000
received)

8. Bank A/c Dr. 43,200

Equity Share Forfeited A/c 4,800
 To Equity Share Capital A/c
(Being shares Forfeited on which amount of call not 48,000
received)

9. Equity Share Forfeited A/c Dr. 13,200

To Capital Reserve A/c
(Being amount of share forfeited transfer to Capital 13,200
Reserve transfer A/c)

24. Dr Revaluation Account Cr

Particulars Amt(Rs) Particulars Amt(Rs
To Profit Transferred to Capital A/cs By Building A/c 1,00,000
Mohan 84,000 By Stock A/c 40,000
Mahesh 56,000 1,40,000
1,40,000 1,40,000
Dr Partners’ Capital Account Profit Cr
Mohan Mahesh Nusrat Mohan Mahesh Nusrat
Particulars Particulars
(Rs) (Rs) (Rs) (Rs) (Rs) (Rs)
To Balance
3,92,000 2,08,000 1,20,000 By Balance b/d 1,00,000 80,000 __
c/d
By Revaluation A/c
84,000 56,000 __
(Profit)
By General Reserve
96,000 64,000 __
A/c
By Workmen's
Compensation Fund 12,000 8,000
A/c
’By Premium for
1,00,000
Goodwill lA/c
By Cash A/c __ __ 1,20,000
3,92,000 2,08,000 1,20,000 3,92,000 2,08,000 1,,20,000
 Balance Sheet
as at 1st April, 2012
Liabilities Amt (Rs) Assets Amt (Rs)
Creditors 2,10,000 Building 2,80,000
Liabilities for Workmen's (+)
2,30,000 1,00,000 3,80,000
Compensation Fund Appreciation
Capital A/cs Stock 1,20,000
(+)
40,000 1,60,000
Appreciation
Mohan 3,92,000 Machinery 1,00,000
Mahesh 2,08,000 Debtors 1,60,000
Nusrat 1,20,000 7,20,000 Cash in Hand 3,60,000
11,60,000 11,60,000
Working Note
Calculation of Sacrificing Ratio
Sacrificing Ratio = Old Share - New Share
Mohan = 3

5
−
2

5
=
3−2

5
=
1

5
; Mahesh = 2

5
−
2

5
=
2−2

5
= Nil

Here, the entire sacrifice has been made by Mohan.

so the full premium for goodwill will be received by Mohan.
Cash Account
Particulars Amt(Rs) Particulars Amt(Rs)
To Balance b/d 1,40,000 By Balance c/d 3,60,000
To Premium for Goodwill A/c 1,00,000
To Nusrat's Capital A/c 1,20,000
3,60,000 3,60,000
Calculation of Cash Brought in by Nusrat as her Capital
Adjusted capital of Mohan 3,92,000
Adjusted capital of Mahesh 2,08,000
Total adjusted capital Rs 6,00,000
Nusrat's capital should be equal to 20% of the combined adjusted capital of Mohan and
Mahesh i.e. 6,00,000× 20% =Rs 1,20,000
OR
Revaluation Account
Particulars ₹ Particulars ₹
To Provision for Doubtful Debts 7,000 By Plant and Machinery 20,000
To Furniture 3,000
To Profit transferred:
Akul 4,000
Bakul 4,000
Chandan 2,000 10,000
20,000 20,000
Capital Accounts
Particulars Akul Bakul Chandan Particulars Akul Bakul Chandan
₹ ₹ ₹ ₹ ₹ ₹
To Bakul
80,000 40,000 By Balance b/d 1,60,000 1,20,000 92,000
Capital A/c
To Bakul loan By General
2,52,000 8,000 8,000 4,000
A/c Reserve
By Revaluation
To Balance c/d 92,000 58,000 4,000 4,000 2,000
A/c
By Akul Capital
80,000
A/c
By Chandan
40,000
Capital A/c
1,72,000 2,52,000 98,000 1,72,000 2,52,000 98,000
To Bank A/c 8,000 By Balance b/d 92,000 58,000
To Balance c/d 1,00,000 50,000 By Bank A/c 8,000
1,00,000 58,000 1,00,000 58,000
 Balance Sheet
as at 31st March 2023
Amount Amount
Liabilities Assets
(₹) (₹)
Sundry Creditors 45,000 Cash at bank 42,000
Employees Provident
13,000 Debtors 60,000
Fund
Less: Provision for Doubtful
Bakul's Loan 2,52,000 (9,000) 51,000
Debts
Capital Accounts: Stock 80,000
Akul 1,00,000 Furniture 87,000
Chandan 50,000 1,50,000 Plant and Machinery 2,00,000
4,60,000 4,60,000
Total capital of Akul and Chandan after Bakul's retirement:-
= ₹ 92,000 + ₹ 58,000
= ₹ 1,50,000
distributed in new ratio after Bakul retirement in 2 : 1.
25. In the books of Gita and Garv
Dr. Revaluation A/c Cr.
Particulars Amount (₹) Particulars Amount (₹)
By Stock A/c 16,000
By Building A/c 1,00,000
By Investments A/c 4,000
To Profit on revaluation transfer to:
Gita’s Capital A/c 36,000
Radha’s Capital A/c 60,000
Garv’s Capital A/c 24,000 1,20,000
1,20,000 1,20,000
Partner’s Capital A/c
Dr. Cr.
 Radha Garv Radha Garv
Particulars Gita (₹) Particulars Gita (₹)
(₹) (₹) (₹) (₹)
To Radha’s
90,000 60,000 By balance b/d 3,00,000 2,00,000 1,00,000
Capital A/c
To Radha’s By Gita’s
4,30,000 90,000
Loan A/c Capital A/c
By Garv’s
To balance c/d 3,00,000 2,00,000 60,000
Capital A/c
By General
12,000 20,000 8,000
Reserve A/c
By Revaluation
36,000 60,000 24,000
A/c
By Current A/c 42,000 1,28,000
3,90,000 4,30,000 2,60,000 3,90,000 4,30,000 2,60,000
Working Notes:
i. Calculation of Radha’s Share of Goodwill on her retirement
Goodwill of the firm on retirement = ₹ 3,00,000
Radha’s Share of Goodwill of firm = ₹ (3,00,000× 5

10
) = ₹ 1,50,000
Gaining ratio will be the same as the new profit-sharing ratio i.e. 3: 2
ii. Adjustment of Capital of partners
Total Capital of the new firm after retirement = ₹ 5,00,000
Gita’s New Capital = ₹ (5,00,000 × ) = ₹ 3,00,000
3

Garv’s New Capital = ₹ (5,00,000 × ) = ₹ 2,00,000

2

Existing Capitals of Gita and Garv are ₹ 2,58,000 and ₹ 72,000

Amount to be debited to Gita’s Current A/c = New Capital – Old Capital
= ₹ ( 3,00,000 – 2,58,000) = ₹ 42,000
Amount to be debited to Garv’s Current A/c = New Capital – Old Capital
= ₹ ( 2,00,000 – 72,000) = ₹ 1,28,000
Balance Sheet as at 31st March 2019
Liabilities Amount (₹) Assets Amount (₹)
 Sundry Creditors 60,000 Stock 96,000
Radha’s Loan A/c 4,30,000 Building 6,00,000
Capital A/c's of partner Debtors 40,000
Gita 3,00,000 Current A/c's of partner
Garv 2,00,000 5,00,000 Gita 42,000
Garv 1,28,000 1,70,000
Cash 84,000
(50,000 + 34,000)
9,90,000 9,90,000
26. i. JOURNAL
Date Particulars L.F. Dr. (₹) Cr. (₹)
Vendors Dr. 4,80,000
To 9% Debentures A/c 4,00,000
To Securities Premium Reserve A/c 80,000
(Purchase consideration discharged by issuing 9%
Debentures at a premium)
ii. Dawar Ltd.
JOURNAL
Date Particulars L.F. Dr. (₹) Cr. (₹)
Bank A/c Dr. 10,50,000
To Debenture Application and Allotment A/c 10,50,000
(Application money received on 5,000 7%
Debentures)

Debenture Application and Allotment A/c Dr. 10,50,000

Loss on issue of Debentures A/c Dr. 1,00,000
To 7% Debentures A/c 10,00,000
To Securities Premium Reserve A/c 50,000
To Premium on redemption of debentures A/c 1,00,000
 (Allotment of 7% debentures at a premium,
redeemable at a premium)
iii. Novelty Ltd.
JOURNAL
Date Particulars L.F. Dr. (₹) Cr. (₹)
Bank A/c Dr. 95,000
To Debenture Application and Allotment A/c 95,000
(Application money received on 1,000, 8% Debentures)

Debenture Application and Allotment A/c Dr. 95,000

Loss on issue of Debentures A/c Dr. 15,000
To 8% Debentures A/c 1,00,000
To Premium on redemption of debentures A/c 10,000
(Allotment of 8% debentures at a discount, redeemable
at a premium)
Alternatively:
Debenture Application and Allotment A/c Dr. 95,000
Discount on issue of Debentures A/c Dr. 5,000
Loss on issue of Debentures A/c Dr. 10,000
To 8% Debentures A/c 1,00,000
To Premium on redemption of debentures A/c 10,000
(Allotment of 8% debentures at a discount, redeemable
at a premium)
Part B :- Analysis of Financial Statements
27.
(d) Assessing the Earning Capacity or profitability
Explanation:
Assessing the Earning Capacity or profitability
OR

(b) Contingent Liabilities

 Explanation:
Contingent Liabilities
28.
(c) 3,50,000
Explanation:
Let the Current Assets acquired on credit = X
10,00,000 + X / 2,50,000 + X = 1.8 / 1
X = 6,87,500
29. (a) A, B, C, D
Explanation:
A, B, C, D
OR

(b) Bonus shares issued

Explanation:
Issue of bonus shares will not affect the preparation of cash flow statement as in this
transaction no cash involved. There is no cash inflow or outflow of cash.
30.
(b) Less Rs. 32,000 in investing activities
Explanation:
Increase in the value of copyrights means the company has purchased copyrights (Non-
Current Assets). So Less Rs. 32,000 in investing activities. Increase or decrease in the value
of non-current assets is shown under-investing activity.
31. The two items shown under the head 'other current Liabilities are
i. Call in Advance
ii. Outstanding Expense
The two items shown under the head 'other current assets' are
i. Accrued Income
ii. Prepaid expenses
32. Total Assets = 19,50,000
Current Liabilities = Total Debts - Long term debts
= 19,50,000 - 15,00,000
= 4,50,000
Working capital = Current Assets - Current Liabilities
9,00,000 = Current Assets - 4,50,000
 Current Assets = 13,50,000
Current Ratio = 13,50,000

4,50,000
=3:1
33. COMMON-SIZE STATEMENT OF PROFIT AND LOSS
for the year ended 31st March, 2022 and 2023
Percentage of Revenue
Note
Particulars Absolute Amounts from Operations (Net
No.
Sales)
31st March, 31st March, 31st March, 31st March,
2022 (₹) 2023 (₹) 2022 (%) 2023 (%)
Revenue from
I. Operations (Net 10,00,000 12,50,000 100.00 100.00
Sales)
II. Expenses
(a) Purchases of
7,20,000 8,70,000 72.00 69.60
Stock-in-Trade
(b) Change in
Inventories of Stock- 30,000 (20,000) 3.00 (1.60)
in-Trade
(c) Depreciation and
Amortisation 20,000 30,000 2.00 2.40
Expenses
(d) Other Expenses 30,000 50,000 3.00 4.00
Total Expenses 8,00,000 9,30,000 80.00 74.40
Profit before Tax (I -
III. 2,00,000 3,20,000 20.00 25.60
II)
IV. Income Tax 60,000 96,000 6.00 7.68
Profit after Tax (III -
V. 1,40,000 2,24,000 14.00 17.92
IV)
Revenue from operations is taken as 100% and all other percentages are calculated on a
revenue basis.
OR
 Common Size Statement of Profit & Loss
Percentage of Revenue from
Absolute Amount
Note Operation
Particulars
No. 31st March, 31st March, 31st March, 31st March,
2021 2022 2021 (%) 2022 (%)
I. Revenue from
10,00,000 20,00,000 100 100
Operations
II. Other Income 5,00,000 5,00,000 50 25
III. Total Revenue
15,00,000 25,00,000 150 125
(I + II)
IV. Expenses 7,00,000 10,00,000 70 50
V. Profit before tax
8,00,000 15,00,000 80 75
(III - IV)
VI. Income Tax
4,00,000 7,50,000 40 37.5
(50%)
VII. Profit after tax
4,00,000 7,50,000 40 37.5
(V - VI)
34. CASH FLOW FROM OPERATING ACTIVITIES
Particulars ₹
Net Profit before Tax and Extraordinary Items (WN 1) 10,000
Add: Non-Cash Expenses
Depreciation on Machinery (WN 3) 11,000
Goodwill Amortised 10,000 21,000
Less: Non-Operating Incomes 31,000
Gain (Profit) on Sale of Machinery (WN 2) 4,000
Operating Profit before Working Capital Changes 27,000
Add: Decrease in Current Assets:
Trade Receivables (Sundry Debtors) 5,000
32,000
 Less: Decrease in Current Liabilities
Outstanding Expenses (2,000)
Cash Flow from Operating Activities 30,000
W.N:

i. Calculation of Net Profit before Tax and Extraordinary Items: ₹

Net Profit for the year (₹ 35,000 - ₹ 30,000) 5,000
Add: Transfer to General Reserve 5,000
Net Profit before Tax and Extraordinary Items 10,000
ii. MACHINERY ACCOUNT
Dr. Cr.
Particulars ₹ Particulars ₹
To Balance b/d 20,000 By Bank A/c 18,000
By Provision for Depreciation
To profit and loss A/c (Balancing A/c
4,000 6,000
Figure) (Depreciation on Sold Plant, i.e.,
₹ 20,000 - ₹ 14,000)
24,000 24,000
iii. PROVISION FOR DEPRECIATION ON MACHINERY ACCOUNT
Dr. Cr.
Particulars ₹ Particulars ₹
To Machinery A/c 6,000 By Balance b/d 30,000
By Depreciation A/c
To Balance b/d 35,000 11,000
(Statement of Profit and Loss) (Bal. Fig.)
41,000 41,000
iv. Accumulated depreciation on the machinery sold is adjusted by debiting to provision for
depreciation on machinery account and crediting it on machinery account.