THE DEV PUBLIC SCHOOL

SAMPLE QUESTION
PREBOARD PAPER - 3
EXAMINATION
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. M and N are partners sharing profits in the ratio of 5:3. They admit Q as a new partner [1]
for 20% share in the future profits of the firm.
New profit sharing ratio:

a) 3 : 2 : 1 b) 1 : 1 : 1

c) 5 : 3 : 2 d) 5 : 3 : 3

2. Assertion (A): Partnership is a business entity which is not separate from its partners [1]
in any circumstances.
Reason (R): Partners are mutual agents of each other so far as the business of the firm
is concerned.

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. Pawan Ltd. invited applications of 45,000 Equity Shares of 10 each at a premium of ₹ [1]
4. Company received applications of 15,000 in excess. Amount payable as follows: on
Application ₹ 7 (including premium of ₹ 2), on Allotment ₹ 3 (including premium of ₹
1), Balance on first and final call. One shareholder Renu who applied for 600 shares
failed to pay allotment and first and final call money.
Amount of Securities Premium to be debited at the time of forfeiture of shares?

a) Debited by ₹ 900 b) Debited by ₹ 750

c) Debited by ₹ 6500 d) Debited by ₹ 450

OR
Zero Coupon Bonds are issued:

a) At premium b) With Specified Rate of Interest

c) At Zero Interest Rate d) Without Specified Rate of

Interest

4. Vinay, Shweta and Vikas are sharing profits in the ratio of 3 : 2 : 1. As per the new [1]
Agreement, Vikas Acquires th share from Vinay. What will be the new profit sharing
1

ratio of the partners?

a) 3 : 2 : 1 b) 2 : 2 : 1

c) 2 : 3 : 1 d) 1 : 1 : 1

OR
What Interest on capital is to be provided to X & Y, when profits shown by Profit & Loss
Account ₹ 1,500 and capitals invested by X & Y are ₹30,000 and ₹ 20,000 (rate of interest
is 10% p.a.).

a) 900 and 600 b) 3000 and 2000

c) 300 and 200 d) 600 and 900

5. In the absence of a partnership deed, the allowable rate of interest on partner’s loan [1]
account will be:

a) 6% p.a. Simple Interest b) 12% Compounded Annually

c) 6% Simple Interest d) 12% Simple Interest

6. The debentures whose principal amount is not repayable by the company during its [1]
life time, but the payment is made only at the time of Liquidation of the company,
such debentures are called:

a) Irredeemable Debentures. b) Bearer Debentures

c) Redeemable Debentures d) Non-Convertible Debentures

OR
Sujata Ltd. issued 5,000, 7% Debentures of ₹ 100 each at a premium of 10%. According to
the terms of issue, 40% of the amount was payable on application and the balance on
allotment. The issue was fully subscribed and all amounts were duly received. The
amounts received on application and allotment respectively were:

a) ₹ 2,00,000 and ₹ 3,00,000 b) ₹ 2,50,000 and ₹ 3,00,000

c) ₹ 2,00,000 and ₹ 3,50,000 d) ₹ 2,00,000 and ₹ 2,50,000

7. Assertion (A): A company may forfeit the shares for non-payment of calls amount [1]
depend upon the Articles of Association of the company.
Reason (R): Shares can be forfeited only if it is allowed by the Articles of Association
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. When will partner’s Capital Account be debited: [1]

a) Share of goodwill b) Loss on Revaluation

c) General Reserve d) Profit on Revaluation

 OR
According to Profit and Loss Account, the net profit for the year is ₹ 1,40,000. The total
interest on partner’s capital is ₹ 8,000 and a partner is to be allowed commission of ₹
5,000. The total interest on partner’s drawings is ₹ 1,200. The divisible profit as per Profit
and Loss Appropriation Account will be:

a) ₹ 1,44,200 b) ₹ 1,28,200

c) ₹ 1,25,800 d) ₹ 1,41,800

Question No. 9 to 10 are based on the given text. Read the text carefully and answer the [2]
questions:
Ankit, Mohit and Vinod were partners in a firm sharing profits equally. On 1st April, 2020,
their capitals stood at ₹ 2,00,000, ₹ 1,50,000 and ₹ 1,00,000 respectively. As per the
provisions of Partnership Deed:
i. Ankit was entitled to a salary of ₹ 2,500 p.m.
ii. Partners were entitled to interest on capital @ 10% p.a.
The net profit for the year ended 31st March, 2021, ₹ 1,50,000 was distributed among the
partners without providing for the above items.

9. What is the amount of interest on capital of Mohit?

a) ₹ 20,000 b) ₹ 10,000

c) ₹ 15,000 d) ₹ 30,000

10. What is the amount of distributable profit for the partners after providing salary and interest
on capital to the partners?
a) ₹ 25,000 each b) ₹ 15,000 each

c) ₹ 50,000 each d) ₹ 10,000 each

11. When a partner is given guarantee by other partners, loss on such guarantee will be [1]
borne by:

a) Partner with highest profit b) Partners who give the guarantee

sharing ratio

c) Partnership firm d) All the other partners

12. On an equity share of ₹ 10 the company has called up ₹ 8 but ₹ 6 have been received [1]
by the company is forfeited, the capital account should be debited by:

a) ₹ 8 b) ₹ 10

c) ₹ 6 d) ₹ 2

13. HR Limited issued 10,000 equity shares @ ₹ 10 each at 10% premium. All shares [1]
were subscribed and amount was received. Identity the amount to be transferred to
Securities Premium Reserve A/c

a) ₹ 10,000 b) ₹ 1,00,000

c) ₹ 9000 d) ₹ 1000

14. Each partner is both an agent and a principal as per: [1]

a) Oral Agreement b) Provisions of partnership deed

c) Mutual agency relationship d) Written Agreement

15. A and B are partners sharing profit or loss in the ratio of 4 : 1. A surrenders 1

4
of his [1]
share and B surrenders 1

2
of his share in favour of C, a new partner. What will be the
C's share?

a) 1

5
b) 3

c) 3

10
d) 1

10

OR
Premium for goodwill is not recorded at all on admission of a partners:

a) If Brought in cash b) If Brought in kind

c) When new partner does not d) If Paid Privately

bring his share of goodwill

16. In which circumstances partners’ can dissolve the firm without the interference of the [1]
court?
 a) When business of the firm b) Mutual Agreement
cannot be carried on except at a
loss

c) When a partner has become of d) When a partner is found guilty

unsound mind of breath of contract frequently

17. Aman, Bobby and Chandani were partners in a firm sharing profits and losses in the [3]
ratio of 5 : 4 : 1. From 1st April, 2022 they decided to share profits equally. The
revaluation of assets and re-assessment of liabilities resulted in a loss of ₹ 5,000. The
goodwill of the firm on its reconstitution was valued at ₹ 1,20,000. The firm had a
balance of ₹ 20,000 in General Reserve.
Showing your workings clearly pass necessary journal entries on the reconstitution of
the firm.

18. The partnership agreement between Maneesh and Girish provides that: [3]
i. Profits will be shared equally;
ii. Maneesh will be allowed a salary of ₹400 p.m;
iii. Girish who manages the sales department will be allowed a commission equal to
10% of the net profits, after allowing Maneesh’s salary;
iv. 7% interest will be allowed on partner’s fixed capital;
v. 5% interest will be charged on partner’s annual drawings;
vi. The fixed capitals of Maneesh and Girish are ₹1,00,000 and ₹80,000, respectively.
Their annual drawings were ₹16,000 and ₹14,000, respectively. The net profit for
the year ending March 31, 2015, amounted to ₹40,000.
Prepare firm’s Profit and Loss Appropriation Account.

OR
Sharma and Verma were partners in a firm sharing profits and losses in the ratio of 3 : 2.
Their fixed capitals were ₹ 14,00,000 and ₹ 10,00,000 respectively. The partnership deed
provided for the following:
i. Interest on capital @ 10% per annum.
ii. Interest on drawings @ 12% per annum.
 During the year ended 31.03.2023, Sharma withdrew ₹ 2,00,000 and Verma withdrew ₹
1,00,000. After preparing the accounts for the year ended 31.03.2023, it was realised that
interest on capital was not allowed and interest on drawings was not charged.
Showing your working notes clearly pass necessary journal entries in the books of the firm
to rectify the above error.

19. Y Ltd. purchased Machinery Rs. 55,000 from Z Ltd. 10% was paid by Y Ltd. by [3]
accepting a Bill of Exchange in favour of Z Ltd. and the balance was paid by issue of
9% Debentures of Rs. 100 each at par, redeemable after five years.
Pass necessary Journal entries in the books of Y Ltd.

OR
DCM Ltd issued 50,000 shares of ₹ 10 each payable as ₹ 2 per share on application, ₹ 3
per share on allotment and ₹ 5 on first and final call. Applications were received for 70,000
shares. It was decided that:
a. to refuse allotment to the applicants for 10,000 shares,
b. to allot 20,000 shares to Mohit who had applied for similar number, and
c. to allot the remaining shares on pro rata basis.
Mohit failed to pay the allotment money and Sachin who belonged to Category C and was
allotted 3,000 shares paid the call money with allotment.
Calculate the amount received on allotment.

20. Arun, Bharat and Neeraj are partners in firm sharing profits and losses equally. They [3]
decide to take Dheeraj into partnership from 1st April, 2023 for th share in the future
1

profits. For this purpose, goodwill is to be valued at 100% of the average Annual
profits of the previous three or four years, whichever is higher. The Annual profits for
the purpose of goodwill for the past four years were:
Year Ended Profit (₹)
31st March, 2023 2,88,000
31st March, 2022 1,81,800
31st March, 2021 1,87,200
31st March, 2020 2,53,200
Calculate the value of goodwill.​
21. Royal Ltd. invited applications for issuing 2,00,000 equity shares of ₹ 10 each at a [4]
premium of 25% payable with application. Applications for 4,50,000 shares were
received. Applications for 1,00,000 shares were rejected and money refunded. Pro-rata
allotment was made to the remaining applicants. The amount per share was payable as
follows:
On Application: ₹ 4 per share including premium
On Allotment: ₹ 3.50 per share
Balance on 1st and Final Call.
Excess application money received with applications was adjusted with sums due on
allotment.
Application money in excess of sums due on allotment, if any, was refunded. Raghu,
who had applied for 7,000 shares failed to pay allotment money. His shares were
forfeited immediately after allotment. Afterwards the first and final call was made.
Nandan, who had applied for 10,500 shares, failed to pay the first and final call. His
shares were also forfeited. All the forfeited shares were reissued at ₹ 11.50 fully paid
up, to Meeta.
Pass necessary journal entries for the above transactions in the books of Royal Ltd.

22. Aakash and Anushka were partners in firm sharing profits and losses in the ratio of 4 : [4]
3. They decided to dissolve the firm on 1st May 2023. From the information given
below, complete Realisation Account, Partners' Capital Accounts and Bank Account:
REALISATION ACCOUNT
Dr. Cr.
Particulars ₹ Particulars ₹
To Sundry Assets: By Sundry Liabilities:
Machinery 5,60,000 Creditors 40,000
Stock 90,000 Aakash's Wife's loan 25,000
Debtors 55,000 By Bank
To Bank: Machinery 4,80,000
Creditors ____ Debtors 10,000
To Aakash's Capital By Aakash's Capital
A/c: A/c:
 Aakash's Wife's loan 34,000 Stock 1,28,000
To Anushka's Capital
A/c: 7,000 Typewriter 70,000 1,98,000
Realisation Expenses
By Anushka's Capital
To Profit transferred to:
A/c:
Aakash's Capital A/c 4,000 Debtors 40,000
Anushka's Capital A/c 3,000 7,000
7,93,000 7,93,000
PARTNERS' CAPITAL ACCOUNTS
Dr. Cr.
Particulars Aakash (₹) Anushka (₹) Particulars Aakash (₹) Anushka (₹)
To Realisation A/c ____ ____ By ____ ____
To Bank A/c 4,00,000 4,50,000 By ____
By ____ ____
____ ____ ____ ____
BANK ACCOUNT
Dr. Cr.
Particulars ₹ Particulars ₹
To Balance b/d ____ By Realisation A/c ____
To Realisation A/c 4,90,000 By Aakash's Loan A/c 4,000
By Aakash's Capital A/c 4,00,000
By Anushka's Capital A/c ____
____ ____

23. Prakash Engineering Company issued for public subscription 40,000 Equity shares of [6]
Rs 10 each at a premium of Rs 2 per share, payable as: on application Rs 2 per share
on allotment Rs 5 per share (including premium)
on first call Rs 2 per share
 on final call Rs 3 per share
Applications were received for 75,000 Equity Shares. The shares were allotted on pro-
rata basis to the applicants of 60,000 shares only, remaining applications being
rejected. Money overpaid on an application was utilised towards the sum due on
allotment.
Ashok to whom 3,000 shares were allotted failed to pay the allotment money and the
two calls. Baneet who applied for 3,000 shares paid the calls money along with
allotment money. Pass journal entries to record the above transactions.

OR
i. Sonu Ltd., forfeited 800 shares of ₹ 10 each, ₹ 7.50 paid, for non-payment of Final Call
of ₹ 2.50 per share. Out of these, 600 shares were re-issued as fully paid up in such a
way that ₹ 2,100 were transferred to capital reserve. Pass necessary journal entries.
ii. X Ltd., forfeited 800 shares of ₹ 10 each, ₹ 7.50 called-up, for non-payment of First
Call of ₹ 2.50 per share. Out of these, 600 shares were re-issued for ₹ 6 per share as ₹
7.50 paid up. Pass necessary journal entries.
iii. 400 shares of ₹ 10, on which ₹ 8 has been called and ₹ 6 has been paid, are forfeited.
Out of these, 300 are re-issued for ₹ 7 as fully paid. Pass necessary journal entries.

24. Following was the Balance Sheet of A and B who sharing profits in 2:1 as at 31st [6]
March, 2021
Balance Sheet
Liabilities Rs. Assets Rs.
Creditors 32,950 Cash 600
Capitals: Debtors 4850
A 15,000 Stock 10,000
B 10,000 25,000 Machinery 17,500
Building 25,000
57,950 57,950
C admitted as a partner on the following terms:
a. C was to bring in Rs.7,500 as capital and Rs. 3,000 as his 1/4th share of goodwill.
b. Stock and Machinery were to be reduced by 5%.
 c. A provision was to be created in respect of Debtors Rs. 375.
d. Building was to be appreciated by 10%.
Prepare Revaluation Account, Capital Account and Balance Sheet after admission.

OR
N, S, and B were partners in a firm sharing profits and losses in proportion of , and1

2
1

6
1

respectively. The Balance Sheet of the firm as at 31st March, 2023 was as follows:
Balance Sheet of N, S and B as at 31.3.2023
Liabilities Amount (₹) Assets Amount (₹)
Capital: Freehold Premises 40,000
N 30,000 Machinery 30,000
S 30,000 Furniture 12,000
B 28,000 88,000 Stock 22,000
Bills Payable 12,000 Sundry Debtors 20,000
General Reserve 12,000 Less: Provision for Bad Debts (1,000) 19,000
Sundry Creditors 18,000 Cash 7,000
1,30,000 1,30,000
B retired from the business on the above date and the partners agreed to the following:
i. Freehold premises and stock were to be appreciated by 20% and 15% respectively.
ii. Machinery and furniture were to be depreciated by 10% and 7% respectively.
iii. Provision for bad debts was to be increased by ₹ 1,500.
iv. On B’s retirement goodwill of the firm was valued at ₹ 21,000.
v. The continuing partners decided to adjust their capitals in their new profit-sharing ratio
after retirement of B. Surplus/deficit, if any, in their capital accounts was to be adjusted
through their current accounts.
Prepare Realisation Account, Partners’ Capital Accounts and the Balance Sheet of the
reconstituted firm.

25. Prem, Kumar and Aarti were partners sharing profits in the ratio of 5 : 3 : 2. Their [6]
Balance Sheet as at 31st March, 2019 was as under:
 Balance Sheet of Prem, Kumar and Aarti
as at 31st March, 2019
Liabilities ₹ Assets ₹
Capitals: Building 25,000
Prem 30,000 Plant and Machinery 15,000
Kumar 20,000 Investments 10,000
Aarti 20,000 70,000 Debtors 10,000
General Reserve 8,000 Stock 5,000
Investment Fluctuation Reserve 2,000 Cash 25,000
Sundry Creditors 10,000
90,000 90,000
On the above date, Kumar retired. The terms of retirement were:
i. Kumar sold his share of goodwill to Prem for ₹ 8,000 and to Aarti for ₹ 4,000
ii. Stock was found to be undervalued by ₹ 1,000 and building by ₹ 7,000
iii. Investments were sold for ₹ 11,000.
iv. There was an unrecorded creditor of ₹ 7,000.
v. An amount of ₹ 30,000 was paid to Kumar in cash which was contributed by Prem
and Aarti in the ratio of 2 : 1. The balance amount of Kumar was settled by
accepting a Bill of Exchange in favour of Kumar.
Prepare the Revaluation Account, Capital Accounts of partners and the Balance Sheet
of the reconstituted firm.

26. Ravi Ltd. acquired running business of Amit Ltd. having assets of ₹ 10,00,000 and [6]
liabilities of ₹ 2,50,000. 9% Debentures of ₹ 100 each were issued for the acquisition
of business at a premium of ₹ 20 per debenture. The company issued 10,000,8%
Debentures of ₹ 100 each redeemable at premium of ₹ 20 per debenture after 5 years.
You are required to pass the Journal entries for the above transactions.

Part B :- Analysis of Financial Statements

27. The financial statements of a business enterprise include: [1]

a) All of these b) Profit & Loss Account

 c) Cash Flow Statement d) Balance Sheet

OR
Which of the following will not covered under finance cost?
i. Discount on issue of debentures written off
ii. Interest paid on bank overdraft
iii. Bank charges
iv. Premium payable on redemption of debentures written off

a) Only ii b) Only iv

c) Only iii d) Only i

28. On the basis of following data, the cost of revenue from operations by a company will [1]
be:
Opening Inventory ₹ 70,000; Closing Inventory ₹ 80,000; Inventory Turnover Ratio 6
Times.

a) ₹ 1,50,000 b) ₹ 4,80,000

c) ₹ 4,50,000 d) ₹ 90,000

29. Fly Ltd, a stock broker, purchased 5,000 shares of Tata Housing Ltd. It is: [1]

a) Financing Activity b) Operating Activity

c) General Activity d) Investing Activity

OR
Koval Ltd. is a financing company. Under which activity will the amount of interest paid
on a loan settled in the current year be shown?
i. Investing Activities
ii. Financing Activities
iii. Both Investing and Financing Activities
iv. Operating Activities

a) ii and iii b) i and ii

 c) iii and iv d) only iv

30. payment of bonus to the employees by an insurance company is which type of [1]
activity?
i. Operating Activity
ii. Investing Activity
iii. Financing Activity
iv. Both operating and Financing Activity

a) iv and i b) only i

c) ii and iii d) iii and iv

31. State under which major headings and sub-headings the following items will be [3]
presented in the balance sheet of a company as per Schedule III of the Companies Act
2013.
i. Calls in Advance.
ii. Accrued Interest on Calls in Advance.
iii. Provision for Retirement Benefits
iv. Stores and Spares.
v. Capital Work in Progress.
vi. Design
vii. Securities Premium.

32. The current ratio of Y Ltd is 2 : 1. State with reason, which of the following [3]
transactions would (a) increase, (b) decrease (c) not change the ratio.
i. Trade receivables included debtors of ₹ 40,000 which were received earlier.
ii. Company purchased furniture of ₹ 45,000. The vendor was paid by the issue of
equity shares of ₹ 10 each at par.

33. From the following information obtained from the books of Vichar Ltd., prepare a [4]
Comparative Statement of Profit and Loss for the year ending 31st March, 2019:
Particulars 2018-19 2017-18
Revenue from 300% of cost of materials 200% of cost of materials
operations consumed consumed
Cost of materials
₹ 4,00,000 ₹ 2,00,000
consumed
20% of cost of materials 20% of cost of materials
Other expenses
consumed consumed
Tax rate 50% 50%

OR
From the following Balance Sheet of Sun Ltd. as at 31st March 2023, prepare Common-
Size Balance Sheet:
Note 31st March, 2023 31st March, 2022
Particulars
No. (₹) (₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital 80,00,000 60,00,000
(b) Reserves and Surplus 12,00,000 8,00,000
2. Non-Current Liabilities
Long-term Borrowings 24,00,000 20,00,000
3. Current Liabilities
Short-term Borrowings 4,00,000 12,00,000
Total 1,20,00,000 1,00,00,000
II. ASSETS
1. Non-Current Assets
Property, Plant and Equipment and
Intangible Assets:
(i) Property, Plant and Equipment 80,00,000 60,00,000
(ii) Intangible Assets 4,00,000 12,00,000
2. Current Assets
 (a) inventories 24,00,000 20,00,000
(b) Cash and Cash Equivalents 12,00,000 8,00,000
Total 1,20,00,000 1,00,00,000

34. From the following Balance Sheet of Vehalna Steel Ltd. as at 31st March 2017 and [6]
31st March 2016. Prepare Cash Flow Statement:
Particulars Note No. 31st March 2017 31st March 2016
I EQUITY AND LIABILITY
Share holders fund
Share Capital 1 700000 500000
Reserves and surplus 2 250000 325000
Non Current Liabilities
Long Term Borrowings 3 200000 250000
Current Liabilties
Short Term Provisions 4 74000 49000
1224000 1124000
Assets
Non Current asset
Fixed Asset
MAchinery 500000 300000
Non current investments 200000 140000
Current asset
Invesntories 150000 200000
Trade receivables 204000 174000
Cash 170000 310000
1224000 1124000

Share capital
Equity Share capital 600000 300000
 12% preferance share capital 100000 200000
700000 500000
Reserve and surplus
General Reserve 135000 375000
Surplus 115000 -50000
Long Term Borrowings
9% Debenturs 200000 250000
Short Term Provisions
Proposed Dividend 24000 24000
Provision for Tax 50000 25000
74000 49000
Additional Information
i. Machinery Costing 100000 on which Depreciation charged was 70000 was sold at a
profit of 20% on book value. dep charged during the year amounted to 70000.
ii. Preference shares redeemed at par on 31st march 2017
iii. Debentures were redeeemed on Jan 1 , 2017 and equity shares were issued on april
1,2016
iv. Income tax 45000 was provided
v. Non current investments costing 60000 were sold at a profit of 20%
vi. The company declares and paid interim dividend on equity shares 40 per share out
of generl reserve. It did not propose final dividend on equity shares.
 SOLUTION
SAMPLE QUESTION PAPER - 3
SUBJECT- ACCOUNTANCY (055)
CLASS XII (2024-25)
Part A:- Accounting for Partnership Firms and Companies
1.
(c) 5 : 3 : 2
Explanation:
total share = 1
Q's share = 20/100 = 1/5
remaining share for M and N = 1-1/5 = 4/5
M' new share = 4/5 x 5/8 = 20/40
N' s new share = 4/5 x 3/8 = 12/40
Q share = 1/5 x 8/8 = 8/40
ratio 20:12:8
5:3:2
2.
(d) A is false but R is true.
Explanation:
A is false but R is true.
3.
(d) Debited by ₹ 450
Explanation:
allotted share 450 × 1 = 900
OR
(d) Without Specified Rate of Interest
Explanation:
Without Specified Rate of Interest
4.
(d) 1 : 1 : 1
Explanation:
vinay new share = 3/6 -1/6 = 2/6
vikas new share = 1/6 +1/6 = 2/6
OR
 (a) 900 and 600
Explanation:
900 and 600
5. (a) 6% p.a. Simple Interest
Explanation:
6% p.a. Simple Interest
6. (a) Irredeemable Debentures.
Explanation:
Irredeemable Debentures.
OR

(c) ₹ 2,00,000 and ₹ 3,50,000

Explanation:
₹ 2,00,000 and ₹ 3,50,000
Amount received on application = 5,000× 40 = 2,00,000
Amount received on allotment = 5,000 × 70 (60+10(premium)) = 3,50,000
7. (a) Both A and R are true and R is the correct explanation of A.
Explanation:
articles of the company must authorise about the forfeiture of the shares
8.
(b) Loss on Revaluation
Explanation:
Partner’s capital account will be debited in case of loss on revaluation, drawings,dr balance
of profit and loss and in other cases his account will be credited i.e.
Profit on Revaluation
General Reserve etc.
OR

(b) ₹ 1,28,200
Explanation:
140000-8000-5000+1200 = ₹ 1,28,200
9. (a) ₹ 20,000
Explanation:
₹ 20,000
10. (a) ₹ 25,000 each
Explanation:
₹ 25,000 each
11.
(b) Partners who give the guarantee
Explanation:
Partners who give the guarantee
12. (a) ₹ 8
Explanation:
₹8
share capital account debited with called up amount at the time of forfeiture.
13. (a) ₹ 10,000
Explanation:
Total value of shares = 10,000 × ₹ 10 = ₹ 1,00,000
Premium = 10% of ₹ 1,00,000 = ₹ 10,000
Thus, ₹ 10,000 will be transferred to the securities premium account.
14.
(c) Mutual agency relationship
Explanation:
Mutual agency relationship
15.
(c) 10
3

Explanation:
C's share = A's sacrifice share + B's Sacrifice share
1 4 1 1 4 1 4+2 6
= × + × = + = =
4 5 2 5 20 10 20 20

OR

(d) If Paid Privately

Explanation:
If Paid Privately as firm has no concern
16.
(b) Mutual Agreement
 Explanation:
When all the partners agree to close down the business mutually, hence partners can dissolve
the firm without the interference of the court that is called dissolution by mutual agreement.
17. In the Books of Aman, Bobby and Chandani
JOURNAL
Debit Credit
Date Particulars L.F.
(₹) (₹)
2022 Aman's Capital A/c Dr. 2,500
April1 Bobby's Capital A/c Dr. 2,000
Chandani's Capital A/c Dr. 500
To Revaluation A/c 5,000
(loss on revaluation transferred to partner’s capital in old
ratio)
April1 General Reserve A/c Dr. 20,000
To Aman's Capital A/c 10,000
To Bobby's Capital A/c 8,000
To Chandani's Capital A/c 2,000
(General reserve distributed among the partners in their
old ratio)
April1 Chandani's Capital A/c (₹ 1,20,000 × 7

30
) Dr. 28,000
To Aman's Capital A/c (₹ 1,20,000 × 5

30
) 20,000
To Bobby's Capital A/c (₹ 1,20,000 × 2

30
) 8,000
(adjustment for goodwill)(WN)
Working Notes: Calculation of Gained/(Sacrificed) Profit of each Partner:
Aman (₹) Bobby (₹) Chandani (₹)
(i) Old Ratio 5

10
4

10
1

10

(ii) New Ratio 1

3
1

3
1

Gain/Sacrifice[(i) - (ii)] 5

30
(Sacrifice) 2

30
(Sacrifice) 30
7
(Gain)
18. Profit and Loss Appropriation Account
For the year ended 31st March,2015
 Amount Amount
Particulars Particulars
(₹) (₹)
By Profit and Loss for
To Partner’s Salary Account 40,000
the year
By Interest on
Maneesh 4,800
Drawings:
Maneesh current
800
account
To Partner’s commission Girish current account 700 1,500
Girish {(40,000 – 4,800) ×
3,520
(10/100)}
To Interest on Capital
Maneesh current account 7,000
Girish current account 5,600 12,600
To Profit transferred to partners
current account:
Maneesh’s Current account 10,290
Girish’s Current account 10,290 20,580
41,500 41,500
Note: Since the rate is 5% and not 5% per annum interest will be charged for full-year
instead of six months.
OR
Books of Sharma and Verma
Journal
Dr. Amount Cr. Amount
Date Particulars L.F.
(₹) (₹)
P & L Adjustment A/c Dr. 2,40,000
To Sharma’s Current A/c 1,40,000
To Verma’s Current A/c 1,00,000
 Dr. Amount Cr. Amount
Date Particulars L.F.
(₹) (₹)
(Interest on Capital transferred to P & L
Adjustment A/c)
Sharma’s Current A/c Dr. 12,000
Verma’s Current A/c Dr. 6,000
To P & L Adjustment A/c 18,000
(Interest on Drawings transferred to P & L
Adjustment A/c)
Sharma’s Current A/c Dr. 1,33,200
Verma’s Current A/c Dr. 88,800
To P & L Adjustment A/c 2,22,000
(Loss on adjustment transferred to Partners’
Capital accounts)
19. This question is of the topic 'Issue of Debentures for consideration other than cash' in which
some some or full payment is made to the creditor in terms of issuing debentures and not by
cash.
In the Books of Y Ltd.
Journal
Dr. Cr.
Date Particulars L.F.
(Rs.) (Rs.)
Machinery A/c Dr. 55,000
To Z Ltd.
55,000
(Being the machinery purchased)
Z Ltd. Dr. 5,500
To Bills payable A/c
(Being the part payment of machinery purchased made in 5,500
cash)
Z Ltd. Dr. 49,500
 Dr. Cr.
Date Particulars L.F.
(Rs.) (Rs.)
To 9% Debentures A/c
(Being the balance payment made by the issue of 495, 9% 49,500
debentures at par)
OR
Applications were received for 70,000 shares and allotment was made as follows:
Category Shares Applied Shares Allotted
(a) 10,000 shares Nil (rejected)
(b) 20,000 shares 20,000 shares allotted
(c) 40,000 shares 30,000 shares allotted (4 : 3)
Total 70,000 shares 50,000 shares
Table Showing Amount Received on Allotment:
Calculation of Amount Received on Allotment ₹
Allotment money due (50,000 shares × ₹ 3) 1,50,000
Less: Excess application money adjusted on allotment (Pro rata allotment) (10,000
20,000
× ₹ 2)
1,30,000
Less: Calls-in-Arrears (Mohit) (20,000 × ₹ 3) (60,000)
Allotment money received 70,000
Add: Calls-in-Advance (3,000 × ₹ 5) 15,000
Amount Received on Allotment including Calls-in-Advance 85,000
20. Average Profits of Previous three years = 2,88,000+1,81,800+1,87,200

3
= 6,57,000

3
= ₹ 2,19,000
Average Profits of Previous Four years = 2,88,000+1,81,800+1,87,200+2,53,200

4
= 9,10,200

4
=₹
2,27,550.
Since, the average profits of the previous four years is greater than the average profits of the
previous three years.
Hence, Goodwill = ₹ 2,27,550.

21. Category Applied Allotted

(I) 1,00,000 0
 (II) 3,50,000 2,00,000
4,50,000 2,00,000
i. Category (II):
Excess amount Received on Application
= (3,50,000 - 2,00,000) × 4
= ₹ 6,00,000
Amount Received on allotment
= (2,00,000 × 3.5)
= ₹ 7,00,000
excess amount of ₹ 6,00,000 adjusted on allotment
ii. Allotment Money not paid by Raghu:
Amount Received on Application = 7,000 × 4 = ₹ 28,000
Amount Adjusted on Application = 4,000 × 4 = ₹ 16,000
Surplus Application money = (28,000 - 16,000) = ₹ 12,000
Allotment Money due but not paid:
= (4,000 × 3.5) - 12,000
= ₹ 2,000
iii. Share allotted to Nandan:
=
2,00,000
× 10, 500
3,50,000

= 6,000 Shares
Journal Entry
Particulars L.F. Amount (Dr.) Amount (Cr.)
Bank A/c Dr. 18,00,000
To equity Share application 18,00,000
(Amount Received on Application)
Equity share application A/c Dr. 18,00,000
To equity share Capital A/c 8,00,000
To Equity share allotment A/c 6,00,000
To Bank A/c 4,00,000
(Amount transferred to share capital)
Equity Share allotment A/c Dr. 7,00,000
 To equity Share Capital 2,00,000
To Security Premium A/c 5,00,000
(Amount transferred to share capital)
Bank A/c Dr. 98,000
To equity share allotment 98,000
(Amount Received on allotment)
Equity Share Capital A/c Dr. 20,000
To Equity Share allotment 2,000
To Equity Share forfeiture 18,000
(Share forfeited for non payment)
Equity share first & final call A/c Dr. 9,80,000
To Equity Share Capital 9,80,000
(Share first & final Call due)
Bank A/c Dr. 9,50,000
To Equity Share first & final call 9,50,000
(Amount received on first & final call)
Equity Share Capital A/c Dr. 60,000
To Equity Share forfeiture 30,000
To Equity Share First and final call 30,000
(share forfeited for non payment of call money)
Bank A/c Dr. 1,15,000
To Equity Share Capital 1,00,000
To Security Premium A/c 15,000
(Share Reissued to Meeta)
Equity Share forfeiture A/c Dr. 48,000
To Capital Reserve 48,000
(Amount transferred to capital reserve)
22. REALISATION ACCOUNT
Dr. Cr.
Particulars ₹ Particulars ₹
To Sundry Assets: By Sundry Liabilities:
Machinery 5,60,000 Creditors 40,000
Stock 90,000 Aakash's Wife's Loan 25,000
Debtors 55,000 By Bank A/c:
To Bank (Creditors) (Balancing figure) 40,000 Machinery 4,80,000
To Aakash's Capital A/c (Aakash's
34,000 Debtors 10,000
wife's Loan)
To Anushka's Capital A/c (Realisation By Aakash's Capital
7,000
Expenses) A/c:
To Profit transferred to: Stock 1,28,000
Aakash's Capital A/c 4,000 Typewriter 70,000 1,98,000
By Anushka's Capital
Anushka's Capital A/c 3,000 7,000
A/c:
Debtors 40,000
7,93,000 7,93,000
PARTNER'S CAPITAL ACCOUNTS
Dr. Cr.
Aakash Anushka Aakash Anushka
Particulars Particulars
(₹) (₹) (₹) (₹)
To Realisation A/c By Balance b/d
1,98,000 40,000 5,60,000 4,80,000
(Assets Taken) (Balancing figure)
By Realisation A/c
To Bank A/c 4,00,000 4,50,000 34,000
(Wife Loan)
By Realisation A/c
7,000
(Realisation Expenses)
By Realisation A/c
4,000 3,000
(Profit on Realisation)
 5,98,000 4,90,000 5,98,000 4,90,000
BANK ACCOUNT
Dr. Cr.
Particulars ₹ Particulars ₹
To Balance b/d (Balancing figure) 4,04,000 By Realisation A/c (Creditors) 40,000
To Realisation (Assets realised) By Aakash's Loan A/c 4,000
Machinery 4,80,000 By Aakash's Capital A/c 4,00,000
Debtors 10,000 4,90,000 By Anushka's Capital A/c 4,50,000
8,94,000 8,94,000
Verification of Missing Figures
BALANCE SHEET
st
as at 31 March, 2023
Liabilities ₹ Assets ₹
Capitals: Machinery 5,60,000
Aakash 5,60,000 Stock 90,000
Anushka 4,80,000 Debtors 55,000
Creditors 40,000 Bank 4,04,000
Aakash's Wife Loan 25,000
Aakash's Loan 4,000
11,09,000 11,09,000
23. Issue of Shares is the process in which companies allot new shares to shareholders.
Shareholders can be either individuals or corporates. The company follows the rules
prescribed by Companies Act 2013 while issuing the shares. Issue of Prospectus, Receiving
Applications, Allotment of Shares are three basic steps of the procedure of issuing the shares.
The process of creating new shares is known as Allocation or allotment.
There are mainly two types of Shares which are discussed in short as follows:-
Preference share is one which carries two exclusive preferential rights over the other type of
shares, i.e. equity shares.
Equity share is a share that is simply not a preference share. So shares that do not enjoy any
preferential rights are thus equity shares. They only enjoy equity, i.e. ownership in the
company.
The journal entries for the issue of shares is as follows:-
In the books of Prakash Engineering Company
Journal
Date Particulars L.F. Dr.(Rs) Cr.(Rs)
Bank A/c Dr. 1,50,000
To Equity Share Application A/c
(Being the application money received on 75,000 Equity 1,50,000
Shares @ Rs. 2 per share)
Equity Share Application A/c Dr. 1,50,000
To Equity Share Capital A/c (40,000 × Rs. 2) 80,000
To Equity Share Allotment A/c (20,000 × Rs. 2) 40,000
To Bank A/c (15,000 × Rs. 2)
30,000
(Being the application money adjusted)
Equity Share Allotment A/c Dr. 2,00,000
To Equity Share Capital A/c 1,20,000
To Securities Premium Reserve A/c
80,000
(Being the allotment money due on 40,000 shares)
Bank A/c Dr. 1,58,000
To Equity Share Allotment A/c (WN 1, 2 and 3) 1,48,000
To Calls-in-Advance A/c (2,000 shares × Rs 5)(WN 4)
(Being the allotment money received except for 3,000
10,000
shares allotted to Ashok and calls-in-advance is received
on 2,000 shares of Baneet)
Equity Share First Call A/c Dr. 80,000
To Equity Share Capital A/c
80,000
(Being the first call money due on 40,000 shares)
Bank A/c Dr. 70,000
Calls-in-Advance A/c 4,000
Date Particulars L.F. Dr.(Rs) Cr.(Rs)
To Equity Share First Call A/c
[Being the first call money received except on 3,000
74,000
shares (Rs. 80,000 - Rs. 6,000 - Rs. 4,000 (Calls-in-
Advance)]
Equity Share Final Call A/c Dr. 1,20,000
To Equity Share Capital A/c
1,20,000
(Being the final call money due on 40,000 shares)
Bank A/c Dr. 1,05,000
Calls-in-Advance A/c Dr. 6,000
To Equity Share Final Call A/c
(Being the final call money received except on 3,000 1,11,000
shares held by Ashok)
Working Notes:
1. 40,000 shares were allotted to the applicants for 60,000 shares
Number of shares applied by Ashok = 60,000/40,000 × 3,000 = 4,500 Shares
Therefore, application money paid by Ashok = 4,500 × Rs. 2 = (Rs.) 9,000

2. Money due from Ashok on allotment: (Rs)

Money paid on an application (WN 1) 9,000
Less: Amount adjusted on an application (3,000 × Rs. 2) 6,000
Excess application money 3,000
Money due on the allotment (3000 × Rs. 5) 15,000
Less: Excess application money adjusted (3,000)
Money not paid by Ashok 12,000

3. Money received on allotment:

Total amount due on allotment 2,00,000
Less : Excess application money adjusted (40.000)
1,60,000
Less: Money not paid by Ashok (WN 2) (12,000)
 1,48,000
OR
a. JOURNAL
Date Particulars L.F. Dr. (₹) Cr. (₹)
Share Capital A/c (800 × ₹ 10) Dr. 8,000
To Share Final Call A/c (800 × ₹ 2.50) 2,000
To Share Forfeiture A/c (800 × ₹ 7.50)
6,000
(Forfeiture of 800 shares)
(1)
Bank A/c Dr. 3,600
Share Forfeiture A/c Dr. 2,400
To Share Capital A/c
6,000
(Re-issue of 600 shares @ ₹ 6 per share as fully paid up)

Share Forfeiture A/c Dr. 2,100

To Capital Reserve A/c
2,100
(Gain on 600 re-issued shares transferred to Capital Reserve)
Note (1)
Forfeited amount on 800 shares = ₹ 6,000 ₹
Forfeited amount on 600 shares = 4,500
6,000
∴ × 600
800

Less: Transferred to Capital Reserve 2,100

Loss on Re-issue 2,400
Per share loss on re-issue = = ₹ 4 per share.
2,400

600

Hence, Shares are re-issued at ₹ 10 - ₹ 4 = ₹ 6 per share.

b. JOURNAL
Dr. Cr.
Date Particulars L.F.
(₹) (₹)
Share Capital A/c (800 × ₹ 7.50) Dr. 6,000
To Share First Call A/c (800 × ₹ 2.50) 2,000
To Share Forfeiture A/c (800 × ₹ 5)
4,000
(Forfeiture of 800 shares)
 Bank A/c Dr. 3,600
Share Forfeiture A/c Dr. 900
To Share Capital A/c
4,500
(Re-issue of 600 shares @ ₹ 6 per share as ₹ 7.50 paid up)
(2)
Share Forfeiture A/c Dr. 2,100
To Capital Reserve A/c
(Gain on 600 re-issued shares transferred to Capital 2,100
Reserve)
Note (2)
Forfeited amount on 800 shares = ₹ 4,000 ₹
∴ Forfeited amount on 600 shares = ₹ 4, 000 × 600

800
3,000
Less: Loss on re-issue of 600 shares @ ₹ 1.50 each (900)
2,100
c. JOURNAL
Particulars L.F. Dr. (₹) Cr. (₹)
Share Capital A/c Dr. 3,200
To Calls in Arrears A/c 800
To Share Forfeiture A/c
2,400
(Forfeiture of 400 shares)

Bank A/c Dr. 2,100

Share Forfeiture A/c Dr. 900
To Share Capital A/c
3,000
(Re-issue of 300 shares at ₹ 7 as fully paid)

Share Forfeiture A/c(3) Dr. 900

To Capital Reserve A/c
900
(Gain on re-issue of 300 shares transferred to Capital Reserve)
Note (3)
₹ ₹
Forfeited amount on 400 shares 2,400
 ∴ Forfeited amount on 300 shares ₹ 2, 400 × 300

400
1,800
Less: Loss on re-issue of 300 shares @ ₹ 3 each (900)
900
24. Revaluation Account
Particulars Rs. Particulars Rs.
To Stock 500 By Building 2500
To Machinery 875
To Provision 375
To Profit Transfer:
A 500
B 250 750
2500 2500
Partner's Capital Accounts
Particulars A B C Particulars A B C
To Balance c/d 17500 11250 7500 By Balance b/d 15000 10000 -
By Cash - - 7500
By Premium for Goodwill 2000 1000 -
By Revaluation 500 250 -
17500 11250 7500 17500 11250 7500
Balance Sheet of new firm
Liabilities Rs. Assets Rs.
Creditors 32950 Building 27500
Capital: Machinery 16625
A 17500 Stock 9500
B 11250 Debtors 4850
C 7500 36250 Less: Provision 375 4475
Cash 11100
69200 69200
 OR
REVALUATION ACCOUNT
Dr. Cr.
Particulars (₹) Particulars (₹)
To Machinery A/c (₹ 30,000 × By Freehold Premises A/c (₹ 40,000 ×
3,000 8,000
10%) 20%)
To Furniture A/c (₹ 12,000 × 7%) 840 By Stock A/c(₹ 22,000 × 15%) 3,300
To Provision for Bad Debts A/c 1,500
To Profit transferred to Capital
A/cs:
N (₹ 5,960 × 3

6
) 2,980
S (₹ 5,960 × 1

6
) 993
B (₹ 5,960 × 2

6
) 1,987 5,960
11,300 11,300
PARTNERS' CAPITAL ACCOUNT
Dr. Cr.
Particulars N(₹) S(₹) B(₹) Particulars N(₹) S(₹) B(₹)
To B's Capital
5,250 1,750 ____ By Balance b/d 30,000 30,000 28,000
A/c
To S's current
15,000 By Reserves A/c 6,000 2,000 4,000
A/c
To B's loan A/c 40,987 By Revaluation A/c 2,980 993 1,987
By N's Capital A/c (₹ 7,000
____ ____ 5,250
×
3

4
)
By S's Capital A/c (7,000 ×
____ ____ 1,750
1

4
)
To balance c/d 48,730 16,243 By N's current A/c 15,000

53,980 32,993 40,987 53,980 32,993 40,987

 BALANCE SHEET of N and S
as at 1st April 2023
Liabilities (₹) Assets (₹)
Capitals A/cs: Freehold Premises 40,000
N 48,730 Add: Appreciation 8,000 48,000
S 16,243 64,973 Machinery 30,000
S's Current A/c 15,000 Less: Depreciation (3,000) 27,000
B's Loan A/c 40,987 Furniture 12,000
Bills Payable 12,000 Less: Depreciation (840) 11,160
Sundry Creditors 18,000 Stock 22,000
Add: Appreciation 3,300 25,300
Sundry Debtors 20,000
Less: Provision for Bad Debts (2,500) 17,500
Cash 7,000
N's Current A/c 15,000
1,50,960 1,50,960
Working Notes:
i. Profit sharing Ratio = 1

2
:
1

6
:
1

3
= 3:1:2

6
=3:1:2
ii. Goodwill of the firm = ₹ 21,000; B’s share of Goodwill = 21,000 × 2

6
= ₹ 7,000.
iii. Old ratio = 3 : 1 : 2
new ratio after B retirement 3 : 1
iv. Gaining ratio = New ratio - Old ratio
v. Gaining ratio Narang = 3

4
- 3

6
= 18

24
- 12

24
= 6

24

vi. S's gaining ratio = 1

4
- 1

6
= 6

24
- 4

24
= 24
2

i.e., gaining ratio = 3 : 1

Dr. Cr.
Date Particular L.F.
vii. (₹) (₹)
N's capital a/c Dr. 5,250
S capital a/c Dr. 1,750
To B's capital a/c 7,000
 (goodwill be given to retiring partner in gaining ratio of old
partner)
Capital adjustment:
viii. Total capital of N and S after all adjustment:
N’s Capital = ₹ 33730; S’s Capital = ₹ 31,243; Total Capital = ₹ 64,973
New profit - sharing ratio i.e., 3 : 1
N’s Capital = 64,973 × 3

4
= ₹ 48,730; S’s Capital = 64,973 × 1

4
= ₹ 16,243 that balance is
to be shown in balance sheet as well as in capital A/c.
25. REVALUATION ACCOUNT
Dr. Cr.
Particular ₹ Particular ₹
To Sundry Creditors A/c 7000 By Stock A/c 1,000
To Gain on Revaluation
By Building A/c 7,000
transferred to:
By Investment A/c (Profit on Sale of
Prem's Capital A/c 1,000 1,000
Investments)
Kumar's Capital A/c 600
Aarti's Capital A/c 400 2,000
9,000 9,000
PARTNER'S CAPITAL ACCOUNT
Dr. Cr.
Prem Kumar Aarti Prem Kumar Aarti
Particulars Particulars
(₹) (₹) (₹) (₹) (₹) (₹)
To Kumar's
8,000 ____ 4,000 By balance b/d 30,000 20,000 20,000
Captial A/c
By General Reserve
To Cash A/c ____ 30,000 ____ 4,000 2,400 1,600
A/c
To Bills By Investment
____ 5,600 ____ 1,000 600 400
payable A/c Fluctuation Reserve
To Balance c/d 48,000 ____ 28,400 By Revaluation A/c 1,000 600 400
 By Prem's Capital
____ 8,000 ____
A/c (Goodwill)
By Aarti's Capital
____ 4,000 ____
A/c (Goodwill)
By Cash 20,000 ____ 10,000
56,000 35,600 32,400 56,000 35,600 32,400
Balance Sheet of Prem and Aarti
st
as at 31 March 2019
Dr. Cr.
Liabilities (₹) Assets (₹)
Sundry Creditors 17,000 Cash 36,000
Bills Payable 5,600 Stock 6,000
Capitals: Debtor 10,000
Prem's 48,000 Plant & Machinery 15,000
Aarti's 28,400 76,400 Building 32,000
99,000 99,000
Working Notes:
i. Entry for sale of Investments:
Bank A/c Dr. 11,000
To Investments A/c 11,000
ii. Entry for transfer of profit on Investments:
Investments A/c Dr. 1,000
To Revaluation A/c 1,000
26. Journal
Amount Amount
Date Particulars L.F.
(Dr.) (Cr.)
1) Assets A/c Dr. 10,00,000
To Liabilities A/c 2,50,000
To Amit Ltd A/c 7,50,000
 (Business of Amit Purchase of Comprising Assets &
Liabilities)

2) Amit Ltd A/c Dr. 7,50,000

To 9% Debenture A/c (6,250 × 100) 6,25,000
To Securities Premium Reserve A/c (6,250 × 20) 1,25,000
(6,250 Debentures @ ₹ 100 each of 20% Premium
issued)

3) Bank A/c (10,000 × 100) Dr. 10,00,000

To Debenture App. & Allot. A/c 10,00,000
(10,000 Debenture @ ₹ 100 each issued)

4) Debenture App. & Allot. A/c Dr. 10,00,000

Loss on issue of Debenture A/c Dr. 2,00,000
To 8% Debenture A/c 10,00,000
To Premium on redemption of Deb. A/c 2,00,000
(Deb. App transferred to Deb A/c)

5) Securities Premium Reserve A/c Dr. 1,25,000

Statement of Profit & Loss A/c Dr. 75,000
To Loss on issue of Debenture A/c 2,00,000
(Loss on issue of Debenture written off)
Part B :- Analysis of Financial Statements
27. (a) All of these
Explanation:
Financial statements of an enterprise include a balance sheet, profit & loss a/c and cash flow
statement.
OR

(c) Only iii

Explanation:
Bank charges will not be covered under the finance costs.
28.
(c) ₹ 4,50,000
Explanation:
C ost of good sold C ost of good sold
Inventory turnover ratio = =
75,000
Average I nventory

Cost of good sold = ₹ 75,000 × 6 times = ₹ 4,50,000

Opening inventory+closing inventory
Average inventory = 2
=
70,000+80,000

2
= ₹ 75,000
29.
(d) Investing Activity
Explanation:
receiving brokerage is main activity but purchase of shares is part of investment
OR

(d) only iv
Explanation:
Taking and granting loans is main activity for financial company .so transactions related to
loans will be as operating activities
30.
(b) only i
Explanation:
Payment of bonus to the employees by an insurance company or any other company is
regarded as cash flow from operating activities.
Items of balance Heads of balance
S.No. Sub-heads of balance sheet
31. sheet sheet
i. Calls in Advance Current Liabilities Other Current Liabilities
Accrued Interest on
ii. Current Liabilities Other Current Liabilities
Calls in j Advance
Provision for Non-Current
iii. Long-term Provisions
Retirement Benefits Liabilities
iv. Stores and Spares Current Assets Inventory
Property, Plant and Equipment and
Capital Work in Non Current
v. Intangible Assets — Capital Work in
Progress Liabilities
Progress
 Non-Current Property, Plant and Equipment and
vi. Design
Assets Intangible Assets - Intangible Assets
Shareholder’s
vii. Securities Premium Reserve and Surplus
Funds
32. i. Not change the ratio Simultaneous increase and decrease by the same amount in current
assets will not effect the value of current assets or current liabilities therefore, there is no
effect on the current ratio. Because first debtors are reduced from Rs40000 and by the
same amount cash will be increased.
ii. Not Change the ratio Issue of shares for furniture purchased do not effect either current
assets or current liabilities. Because Shares are a part of Share Capital which is classified
under Shareholder's Fund & furniture is Fixed asset. Therefore, the current ratio will not
change.
33. Vichar Ltd.
Comparative Statement of Profit and Loss
st st
for the years ended 31 March 2018 and 31 March 2019
Percentage
2017-18 2018-19 Absolute
Increase/Decrease (%)
Particulars (₹) (₹) Increase/Decrease (₹)
C
(A) (B) (C = B - A) (D = × 100)
A

Revenue from
4,00,000 12,00,000 8,00,000 200
operations
Total Revenue 4,00,000 12,00,000 8,00,000 200
Less expenses:
Cost of materials
2,00,000 4,00,000 2,00,000 100
consumed
Other expenses 40,000 80,000 40,000 100
Total expenses 2,40,000 4,80,000 2,40,000 100
Net Profit before
1,60,000 7,20,000 5,60,000 350
Tax
Less Tax Paid 80,000 3,60,000 2,80,000 350
Net Profit after
80,000 3,60,000 2,80,000 350
Tax
 OR
COMMON-SIZE BALANCE SHEET OF SUN LTD. as at 31st March 2022 and 2023
Percentage of Balance
Absolute Amounts
Sheet Total
Note
Particulars 31st 31st 31st 31st
No.
March, March, March, March,
2022 (₹) 2023 (₹) 2022 (%) 2023 (%)
I. EQUITY AND
LIABILITIES
1. Shareholders' Funds
(a) Share Capital 60,00,000 80,00,000 60.00 66.67
(b) Reserves and Surplus 8,00,000 12,00,000 8.00 10.00
2. Non-Current Liabilities
Long-term Borrowings 20,00,000 24,00,000 20.00 20.00
3. Current Liabilities
Short-term Borrowings 12,00,000 4,00,000 12.00 3.33
Total 1,00,00,000 1,20,00,000 100.00 100.00
II. ASSETS
1. Non-Current Assets
Property, Plant and Equipment
and Intangible Assets:
(i) Property, Plant and
60,00,000 80,00,000 60.00 66.67
Equipment
(ii) Intangible Assets 12,00,000 4,00,000 12.00 3.33
2. Current Assets
(a) Inventories 20,00,000 24,00,000 20.00 20.00
(b) Cash and Cash Equivalents 8,00,000 12,00,000 8.00 10.00
Total 1,00,00,000 1,20,00,000 100.00 100.00
34. Cash Flow Statement
I. Cash flow from operating activities : Rs. Rs.
Net Profit before Tax 234000
+ Depreciation 70000
- Profit on sale of machinery -6000
+ Interest on debenture 21375
Operating profit before Working capital changes 307375
+ Inventories 50000
- Trade Receivables -30000
Cash Generated from operating activity 327375
- Tax Paid 20000 307375
II. Cash Flow from Investing activities :
Purchase of machinery -300000
Purchase of non current investment -120000
Sale of machinery 36000
Sale of non current investment 72000 -312000
III. Cash Flow from Financing activities :
Issue of shares 300000
Redemption of preference shares -100000
Redemption of debentures -50000
Preference dividend -24000
Equity dividend -240000
Interest -21375 -135375
Net Cash Flow -140000
+ Opening 310000
Closing 170000