Sample Paper -1 By Dr. Vinod Kumar - S. Dinesh & Co

By Dr. Vinod Kumar Author of : Ultimate Book of Accountancy 12th CBSE

Available at

For CBSE Examination March 2021

ACCOUNTANCY Class – XII

Time allowed: 3 hours Maximum Marks: 80

General Instructions: 1. This question paper contains Two parts A & B. 2. Both the parts are compulsory for all. 3. All parts of questions should be attempted at one place. 4. Marks are given at the end of each question.

Part – A NPO, Partnership, Share Capital and Debentures

1. Vinod (a partner) gets commission on Sale Rs.7,000. This will be recorded in: (a) Profit and Loss Account (b) Profit and Loss Adjustment Account (c) Profit and Loss Suspense Account (d) Profit and Loss Appropriation Account

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2. In case of admission of a partner, new partner compensates the existing partners. Old partner also compensates when: (a) There is loss in the firm (b) He is a Sacrificing partner (c) He is a Gainer Partner (d) His Sacrificing/Gain share is Nil

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3. Which of the following cannot be used by a company to write off its capital losses? (a) Securities Premium Reserve (b) Balance i.e. Surplus in Statement of Profit & Loss (c) Capital Reserve (d) Reserve Capital

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4. Subscription Received during the year by Vinod Welfare Society Rs.4,00,000 Subscription outstanding in the beginning ………………………… Rs.30,000 Subscription outstanding at the end of the year ………………….Rs.50,000 Subscription Shown in Income and Expenditure Account ……Rs.4,40,000 Subscription received in advance in the beginning ……………..Rs.40,000 Subscription received in advance at the end of the year ……..Rs.25,000 During the year some amount of subscription was written off by the organisation. Find out the amount written off during the year due to non-payment. (a) 25,000 (b) 30,000 (c) 15,000 (d) 5,000

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5. At the time of Dissolution of Partnership, A Bill of Exchange of Rs.11,000 under discount was dishonoured as the acceptor had become insolvent and hence the bill had to be met by the firm. Identify the correct entry in this case: (a) B/R A/c Dr. To Realisation A/c

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Sample Paper -1 By Dr. Vinod Kumar


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(b) Realisation A/c Dr. To B/R (c) B/R A/c Dr. To Bank A/c (d) Realisation A/c Dr. To Bank A/c

6. A Ltd. Forfeited 100 shares of 100 each issued at a premium of 50% to be paid at time allotment on which first call of 30 per equity share was not received, final call of 20 are yet to be made. These shares were reissued at 70 per share at 80 paid up Calculate Gain on reissue: (a) 4000 (b) 3000 (c) 5000 (d) 2000

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7. Vinod (a partner), his loan of Rs.15,000 was settled in Rs.13,000 at the time of dissolution of partnership firm. What will be the impact on Realisation Account? (a) Realisation A/c Debit by Rs.2,000 (b) Realisation A/c Credit by Rs.13,000 (c) Realisation A/c Credit by 13,000 and Debit by Rs.2,000 (d) Realisation A/c Credit by Rs.2,000.

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8. Kamlesh and Ravina were partners sharing profits in the ratio of 5:3. They admit Monika as a new partner for 2/10 share in profits. Balance Sheet

Liabilities Amount Assets Amount Stock 56,000

Stock of was overvalued by 12%. What value of Stock will be shown in the Balance Sheet of reconstituted firm? (a) 49,280 (b) 50,000 (c) 62,720 (d) 62,000

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9. DK, AK and PK are partners sharing profits in the ratio of 5:3:2. DK died on 30th September 2020. Calculate his share of profit till the date of his death when sales for previous year 31st March 2020 were Rs.2,00,000 and Profit for that year was Rs.20,000. Sales shows a growth of 20% and percentage of profit earning is reduced by 1%. _________ Amount of profit was calculated for DK.

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10. At the time of retirement/death of a partner his share of goodwill is debited to remaining partners in their: (a) Old Ratio (b) Sacrificing Ratio (c) Gain Ratio (d) Ratio of their capitals

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11. Nirmala, Mona and Ravina were sharing profits in the ratio of 5:3:2. Nirmala died on 31st August 2020. Her share of profit is to be calculated on the basis of sales. Last year’s sale was

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Rs.8,00,000 and sales from 1st April 2020 to the date of her death was Rs.3,00,000. Her amount of profit was calculated Rs.30,000. The percentage of profit on sale was: (a) 5% (b) 10% (c) 15% (d) 20%

12. Vinod a partner, interest on his drawings was charged Rs.720 for average period of 6 months @ 12 p.a. His drawings during the year were: (a) 7,200 (b) 14,400 (c) 14,000 (d) 12,000

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13. Pick the odd one out: (a) Interest on Partners’ Capital (b) Interest on Partners’ Drawings (c) Interest on Partner’s Loan (d) Commission to Partners

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14. From the following information, find out the subscription in arrears for the current year. Subscription received by Vinod Welfare Society during 2019-20 …………….. 1,00,000 Subscription credited to Income and Expenditure A/c for the year ……………1,20,000 Subscription in arrears in the beginning was …………………………………………....8,000 Subscription received in advance in the beginning was …………………………… 20,000 Subscription received in advance at the end of the year ……………………………12,000 Subscription still in arrears for the previous year ………………………………..…. 3,000 OR Find the amount of stationery to be shown in Income and Expenditure Account of Vinod Welfare Society:

Particulars 2019 2020 Creditors for stationery Stock of Stationery

15,000 70,000

60,000 2,00,000

Payment made to creditors during the year Rs.3,00,000. Stationery purchased in cash during the year was 25% of the total purchase of stationery.

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15. Vinod, Kamal and Rohit are partners sharing profits in the ratio of 3:2:1. Their capitals on 1st April 2020 were: Rs.5,00,000; Rs.4,00,000 and Rs.3,50,000 respectively. (i) Vinod withdrew Rs.2,500 in the beginning of every month for personal use. (ii) Kamal withdrew Rs.10,000 at the end of each Quarter for his personal use. (iii) Rohit withdrew Rs.22,500 during the year for his personal use. After preparing accounts, it was found that interest on capital was calculated only 10% p.a. instead of 12% p.a. and interest on drawings 8% p.a. was not charged at all. It was decided to pass a single adjustment entry to correct the above. Give adjustment entry. OR Vinod, Mukesh and Shiv are partners sharing profits in the ratio of 3:2:1. Their capitals on 1st April 2019 were Rs.5,00,000; Rs.3,00,000 and Rs.2,00,000 respectively. As per the partnership deed partners are entitled to 10% p.a. interest on capital. Shiv is guaranteed a minimum profit of Rs.45,000 p.a. deficiency (if any) will be borne by Vinod and Mukesh in the ratio of 3:2. The firm incurred a loss of Rs.90,000 for the year ended 31st March 2020. Give necessary entries giving effect to the minimum guaranteed profit to Shiv.

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16. Vinod Ltd. forfeited 5,000 shares of Rs.10 each, fully called-up, on which they had received

only Rs.35,000. Out of the forfeited shares 125 were reissued for Rs.9 per share fully paid up. Fill the following missing figures:

Date Particulars L.F. Debit Credit Share Capital A/c Dr.

To Share Forfeiture A/c To Calls in Arrears A/c (Being 5,000 shares forfeited for non-payment of Rs.15,000) Bank A/c Dr. Share Forfeiture A/c Dr. To Share Capital A/c (Being 125 forfeited shares reissued) Share Forfeiture A/c Dr. To Capital Reserve (Being gain on reissue of shares)

? ? ? ?

? ? ? ?

.

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17. Vinod and Mohit were partners in a firm sharing profits and losses equally. They dissolved their firm on 31st March 2020. On this date, the Balance Sheet of the firm, apart from realizable assets and outside liabilities showed the following: Vinod’s Capital …………………………………… 1,00,000 Cr. Mohit’s Capital …………………………………….50,000 Dr. Profit & Loss A/c ………………………………….10,000 Dr. Vinod’s Loan to the firm ……………………….15,000 General Reserve ……………………………………7,000 On the dissolution of the firm: (a) Vinod’s Loan was repaid by the firm along with interest of Rs.500. (b) The Dissolution expenses of Rs.1,000 were paid by the firm on behalf of Vinod who had to bear these expenses. (c) An unrecorded asset of Rs.2,000 was taken over by Mohit while Vinod discharged an unrecorded liability of Rs.3,000. (d) The dissolution resulted in a loss of Rs.60,000 from the Realisation of assets and settlement of liabilities. You are required to prepare: (i) Partners Capital Accounts (ii) Vinod’s Loan Account

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18. (a) Sahil and Vinod are partners in a firm having no partnership deed. Sahil has advanced Rs.1,00,000 as loan to the firm. He claimed interest at the usual rate of 10% p.a. as charged by the bank to which Vinod does not agree. State giving reason, which of the two is correct in this case. (b) Give the adjustment entry and closing entry for recording commission allowed to a partner Vinod, when firm follows the fixed capital method.

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19. From the following Receipts and Payments Account of Vinod Welfare Club for the

year ended 31st March 2020 and the additional information, prepare Income and

Expenditure Account and Balance Sheet of the Club.

Receipts Amount Payments Amount To Balance b/d (Cash) To Subscription: 2018-19 75,000 2019-20 1,00,000 2020-21 25,000 To Income from Sports (matches) To Interest on 8% Govt. Securities To Profit from Entertainment To Rent of Hall

50,000

2,00,000 60,000

5,000 25,000 10,000

By Salaries By Stationery By Rates and Taxes By Telephone Charges By 8% Govt. Securities at par By Sundry Expenses By Billiard Table By Furniture By Courier Service Charges By Balance c/d (Cash)

80,000 4,500 1,500 1,000

25,000 38,000

1,00,000 70,000

3,000 27,000

3,50,000 3,50,000

Additional Information:

(i) There are 1000 members, each paying an annual subscription of Rs.125. Subscription in

arrears in the beginning Rs.87,500 and 100 members paid subscription in advance for 2019-20.

(ii) Stock of stationery on March 31, 2019 was Rs.1,500 and on 31st March 2020 Rs.2,000.

(iii) On March 31, 2020 the Rates and Taxes were prepaid to the following January 31, the annual charges being Rs.1,500.

(iv) Value of 8% Government Securities on 31st March 2019 was Rs.75,000 which were

purchased at par on that date. Additional Government Securities worth Rs.25,000 were purchased on 31.3.2020.

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21. Vinod and Ram are partners in a firm sharing profits in the ratio of 3:2. Their Balance Sheet as on 31st March 2020 was as follows:

Liabilities Amount Assets Amount

Sundry Creditors Provision for bad debts Outstanding Salaries General Reserve

20,000 2,000 3,000 5,000

Cash in hand Debtors Stock Furniture

10,000 18,000 22,000 40,000

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20. Give Entries in the following cases assuming that company writes off all its capital losses in the year in which it occurs. (i) Vinod Ltd. took over running business with assets of Rs.6,00,000 and liabilities of Rs.60,000 from Fukrey Ltd for the purchase consideration of Rs.5,50,000. It paid the purchase consideration by issuing 8% debentures of Rs.100 each at 10% premium. (ii) Vinod Ltd. purchased land from King Ltd. for Rs.4,50,000. The consideration was paid by issuing 5% debentures at a discount of 10% (Face value Rs100). (iii) Vinod Ltd. issued 1,000, 6% debentures of Rs.100 each at a discount of 7%, repayable after 5 years at a premium of 10%.


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Workmen Compensation Reserve Capitals: Vinod Ram

20,000 60,000 40,000

Plant and Machinery Deferred Revenue Expenditure

40,000 20,000

1,50,000 1,50,000

On the above date, Divij was admitted for 1/6th share in profits in the following terms:

(i) Divij brings Rs.30,000 as his capital but could not bring anything for his share of goodwill. It was decided to open current account for the same.

(ii) A liability towards workmen compensation was Rs.25,000.

(iii) Debtors Rs.1,500 will be written off as bad and a provision of 5% will be created for bad and doubtful debts.

(iv) Stock was overvalued by 10%; Furniture after admission was Rs.50,325 and Plant and

Machinery appreciated by Rs.10,000.

(v) Creditors of Rs.7,000 were paid in cash and a creditor of Rs.2,000 not recorded in the

books was to be taken into account.

(vi) There is an unrecorded computer which was worth Rs.12,000.

Prepare Revaluation Account and Partners Capital Account. OR X, Y and Z are partners sharing profits in the ratio of 2:2:1. The firm closed its books on 31st March every year. On the above date in 2020, Z retired. According to the provisions of partnership deed, retiring partner is entitled for the following in the event of his retirement: (i) Capital as per the last balance Sheet. (ii) Interest on capital @ 6% per annum till the date of his retirement (it is due for full year) (iii) His share of goodwill to be determined on the basis of three years purchase of the average profits of last four years. The profits of last four years were:

Year 2016-17 2017-18 2018-19 2019-20 Profit 30,000 50,000 40,000 60,000

(iv) There was a balance of General Reserve Rs.20,000 in the Balance Sheet of the firm at the time of his retirement. Which will be retained in the business. (vi) Amount due to Z was paid by giving a cheque. The balance of Z’s Capital Account in the beginning of the year was Rs.60,000 and he took Rs.12,000 for his personal expenses during the year. Interest on his drawings is to be charged @10% p.a. Prepare Z’s Capital Account.

22. Vinod Ltd. issued for public subscription 50,000 Equity Shares of Rs.10 each at a premium of 50% on face value payable as under: On Application ……………………………………. Rs.5 each On Allotment ………………………………………. Amount along with premium First & final call …………………………………… Rs.3 per share Applications were received for 75,000 shares. Allotment was made to all the applicants on pro-rata basis, excess money (if any) is to be adjusted on allotment only.

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Surinder who applied for 900 shares failed to pay the allotment and call money. The Directors of the company decided to forfeit his shares after the call. Out of the forfeited shares 60% were reissued to Kamlesh as fully paid up at Rs.8 per share. Give journal entries without opening calls in arrears and calls in advance account. OR Vinod Ltd. invited application for 50,000 Equity Shares of Rs.10 each at a premium of 40%, payable as: On Application ……………………………… Rs.4 along with 50% Premium On Allotment ………………………………….Rs.4 along with remaining premium On First & final Call ……………………….. Balance amount Applications were received for 1,00,000 shares and Pro-rata allotment was made to the applicants in proportion of 3:2 after refunding Rs.1,50,000 to the applicants and a letter or regret. The excess money was adjusted towards allotment only. Sonal, to whom 100 shares were allotted, did not pay allotment and call money. Shweta who applied for 75 shares, failed to pay the call money. All these shares were forfeited after the call. All forfeited Shares were reissued @ Rs.8 per share fully paid up. Give necessary entries.

Part – B Financial Statement Analysis

23. Balance Sheet (Extract) Note No. 2020 2019 Short Term Provisions (Provision for Tax)

40,000

30,000

Additional Information: Tax paid during the year Rs.50,000. How much amount of Tax will be added to the profit in operating activities? (a) 30,000 (b) 40,000 (c) 50,000 (d) 60,000

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24. What will be the Current ratio of a company whose Net Working Capital is Rs.9,00,000 and Current Liabilities Rs.3,00,000.

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25. Which of the following is not a part of Cash and Cash Equivalents? (a) Call Money (b) Marketable Securities (c) Cheques in hand (d) Cash Credit

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26. Which of the following is not added/deducted while calculating cash flow from Investing Activities? (a) Purchase of Patents (b) Sale of Patents (c) Amortisation of Patents (d) Sale of Trademarks

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27. Provision for doubtful debts is shown in Balance Sheet, liabilities side under current liabilities and sub-heading ____________

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28. Current Ratio of Vinod Ltd. is 3:1. Company has paid Rs.50,000 to the creditors. It will: (a) Increase the Current Ratio (b) Decrease the Current Ratio

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(c) No Change in Current Ratio

29. If Quick Ratio of Vinod Ltd. is 2:1. Current Liabilities Rs.4,00,000 and Inventories Rs.2,00,000. Current Ratio will be: (a) 1:1 (b) 2:1 (c) 3:1 (d) 2.5:1

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30. Vinod Ltd. has a Current Ratio of 3.5:1 and Quick Ratio of 2:1. If the excess of Current Assets over Quick Assets as represented by Stock is Rs.1,50,000, calculate Current Assets and Current Liabilities. OR Calculate Current Ratio from the following: Shareholders’ Funds ………………………………….Rs.60,000 Non-Current Assets …………………………………..Rs.50,000 Total Assets ……………………………………………..Rs.1,00,000 Non-current Liabilities ……………………………..Rs.20,000

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31. Prepare a Comparative Statement of Profit & Loss from the following details: Particulars Note

No. 31.03.2020 31.03.2019

Revenue from operation 30,00,000 20,00,000 Other income (% of Revenue from operations) 15% 20% Expenses (% of Revenue from operations) 60% 50% Tax 30% 30%

Show working clearly.

OR

Prepare a Comparative Statement of Profit & Loss from the following details: Particulars Note

No. 31.03.2020 31.03.2019

Revenue from operation 10,00,000 5,00,000 Purchase of Stock-in-Trade 6,50,000 2,00,000 Change in Inventories of Stock in Trade 60,000 50,000 Other Expenses 10% of Cost of

Revenue from Operations

20% of Cost of Revenue from Operations

Tax 40% 30%


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32. Vinod Ltd. reported a profit of Rs.90,000 for the year ended 31st March, 2020 after

considering the following:

Tax Provided during the year ……………………….. Rs.3,000

Amortization of Patents …………………………………Rs.12,000

Profit on Sale of Land …………………………………….Rs.5,000

Loss by Fire during the year …………………………. Rs.2,000

The Extract of Balance Sheet is given below:

Particulars 2020 2019 Accounts Receivable Inventories Bank Balance Accounts Payable Expenses payable

20,000 12,000 8,000 9,000 6,000

16,000 15,000 10,000 11,000 5,000

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Provision for Tax Marketable Securities

4,000 5,000

6,000 2,000

Proposed Dividend for year 2019 was Rs.10,000 and for 2020 was Rs.12,000.

You are required to calculate Cash Flow from Operating Activities.

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Sample Paper 2 By Dr. Vinod Kumar For CBSE Examination March 2021





1. One of the partners (Mr. Dev) in a partnership firm has withdrawn Rs 4,500 at the end of each

quarter. Interest on his drawings is to be calculated at the rate of 6% per annum. Interest on his

drawings will be:

(a) 810 (b) 400

(c) 405 (d) 304

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2. Vinod and Sunita were partners sharing profits in the ratio of 3 : 2. They admitted Simran as a new

partner for 3/10th share which she acquired 2/10th from Vinod and 1/10th from Sunita. The

new profit sharing ratio of Vinod, Sunita and Simran will be________ .

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3. When shares are issued and allotted to a selected group of persons privately and not to the public in

general through public issue, it is known as __________

(a) Public Allotment (b) IPO

(c) Right issue (d) Private Placement of Shares

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4. Which of the following is not a capital receipt?

(a) Endowment Fund (b) Government Grants

(c) Life-Membership Fee (d) Donations for Building

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5. Mr. Surinder an old customer whose account for Rs.25,000 was written off as bad debt last year,

paid 80% of the amount at the time of dissolution of firm. The correct entry to record this

transaction will be:

(a) Debtors A/c Dr. 20,000

To Bad Debts Recovered 20,000

(b) Bank A/c Dr. 20,000


(c) Bank A/c Dr. 20,000

To Realisation A/c 20,000

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(d) Realisation A/c Dr. 20,000


6. The Directors of Vinod Ltd. forfeited 70,000 Equity Shares of Rs.10 each, Rs.10 Called up, for

non-payment of final call of Rs.1 per share. Half of the forfeited shares were reissued at Rs.20 per

share fully paid up. On reissue of forfeited shares, the following amount will be transferred to the

Capital Reserve Account:

(a) Rs.70,000 (b) Rs.1,40,000

(c) Rs.4,20,000 (d) Rs.3,15,000

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7. At the time of dissolution of firm, creditors of Rs.38,000 were due, out of which 30,000 were due

after 2 months and remaining were due after 2.5 months but they were paid immediately at a

discount of 6% p.a.

The final amount paid to the creditors:

(a) 34,200 (b) 37,600

(c) 38,000 (d) 37,500

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8. Arvind and Vikram are partners sharing profits in the ratio of 2:1.


Stock 54,000

Stock was found overvalued to the extent of 20%. What amount of stock is to be shown in new

balance sheet of firm at the time of reconstitution?

(a) 54,000 (b) 64,800

(c) 43,200 (d) 45,000

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9. DK, AK and PK are partners in a firm sharing profits and losses in the ratio of 5:3:2. Their books

are closed on March 31st every financial year.

DK died on 30th September 2020. His share of profit upto his death is to be calculated on the basis

of sales till date of his death. Sales for the year ended March 31, 2020 was Rs.2,00,000 and profit

for the same year was 10% on sales, sales shows a growth trend of 20% and percentage of profit

earning is reduced by 1%.

The share of profit credited for deceased partner Rs………….

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10. At the time of retirement of a partner, profit on revaluation will be credited to the capital accounts

of :

(a) Continuing Partners in their old Profit Sharing Ratio

(b) Continuing Partners in their new Profit Sharing Ratio

(c) All Partners in their old Profit Sharing Ratio

(d) Only Retiring Partner

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11. Which of the following account is not prepared at the time of retirement/death of a partner?

(a) Profit and Loss Suspense Account

(b) Profit and Loss Adjustment Account

(c) Profit and Loss Appropriation Account

(d) Realisation Account

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12. Vinod, Ravina and Latika are partners sharing profits in the ratio of 3:2:1. Latika is guaranteed by

both the partners, a minimum profit of Rs.6,000 p.a. The firm incurred a loss of Rs.12,000 for the

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year ended 31st March 2020. How much amount of deficiency is borne by Vinod?

(a) 4,800 (b) 8,000

(c) 5,000 (d) 5,400

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14. How will the following items be treated while preparing the financial statements of a sports club?

Particulars Amount (Rs.)

Prize Fund 44,000

Interest on Prize fund Investments 6,000

Prizes awarded 46,000

Match expenses 64,000

Prize fund Investments 44,000

OR

From the following information of a charitable dispensary, calculate the amount of medicines

consumed during the year that would appear in the Income & Expenditure account for the year

ending 31st March,2019:

Particulars Amount (Rs.)

Stock of Medicines on 01-04-2018 60,000

Creditors for medicines 01-04-2018 40,000

Stock of Medicines on 31-03-2019 10,000

Creditors for medicines 31-03-2019 25,000

Advance for medicines 31-03-2019 22,000

Credit purchase of medicines during the year 2,76,000

Cash purchase of medicines during the year 46,500

.

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15. Jack, Vinod and Kapil were partners sharing profits in the ratio of 3:2:1. Their partnership deed

provided the following:

(a) Jack get a monthly salary of Rs.5,000 per month.

(b) Vinod get a lumpsum commission of Rs.30,000 p.a.

(c) Kapil was guaranteed of Rs.20,000. Any deficiency arising because of guarantee to Kapil will

be borne by Jack and Vinod equally.

(d) Jack guaranteed the firm that he will earn an annual fees of Rs.1,00,000 for the firm. Jack

earned fees of Rs.1,10,000 during the year.

The profit of the firm during 31st March 2020 was Rs.1,80,000 after considering the fees earned by

Jack.

Give entries for the above transactions showing the distribution of profit among the partners.

OR

Vinod, Vikram and Naveen are partners sharing profits in the ratio of 3:2:1.

(i) Vinod withdrew Rs.10,000 in the beginning of every month for his personal expenses.

(ii) Vikram withdrew Rs.10,000 at the end of every month for his personal expenses.

(iii) Naveen withdrew Rs.10,000 in the middle of every month for personal expenses.

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13. Pick the odd one out; keeping in mind Partners’ Capital Account:

(a) Drawings (b) Interest on Drawings

(c) Asset taken over by partner (d) Rent Received by Partner



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It was found that interest on drawings was calculated only @6% p.a. instead of 10% p.a.

It was decided to pass single adjustment entry to rectify the above, assuming that partners capitals

are fixed.

16. Vinod Ltd. issued 40,000 Equity Shares @ 10 each at a premium.:

Date Particulars L.F. Debit

(Amt.)

Credit

(Amt.)

Equity Share Capital A/c Dr.

Securities Premium Reserve A/c Dr.

To Equity Share Second & Final Call A/c

To Forfeited Shares A/c

(Being 2000 shares forfeited due to non-payment of

second & final call of Rs.8 including premium of

Rs.5)

?

?

?

?

Bank A/c Dr.

Forfeited Shares A/c Dr.

To Equity Share Capital A/c

(Being reissued 1500 shares @ 8 per share fully

paid)

?

?

?


To Capital Reserve

(Being transferred to capital reserve)

?

?

Complete the above table and fill the missing amounts

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17. Pass necessary journal entries in the following cases on the dissolution of a partnership firm of

partners A, B and C:

(i) Bank Loan of Rs.46,000 is paid off by the firm.

(ii) B agreed to pay off his wife’s loan Rs.21,000.

(iii) There was an outstanding bill for repairs for Rs.5,000 which was paid off.

(iv) A Debtor whose debt of Rs.10,000 was written off as bad in the books earlier, now paid

Rs.4,000 in full settlement.

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18. Rohit and Ajay are partners. They do not have partnership agreement OR partnership deed. What is

your suggestion to them in the following cases:

(i) Rohit wants to introduce his son Mohit into partnership business. Ajay objects to it.

(ii) Rohit spends more time in the business and Claims that he should get a salary of Rs.24,000 per

month for his extra time.

(iii) Ajay has provided a capital of Rs.4,00,000 whereas Rohit has provided Rs.1,00,000 only as

capital. Rohit however has provided Rs.2,00,000 as loan to the firm. What interest (if any) will be

paid to Rohit.

(iv) Ajay wants that profit should be distributed in the ratio of their capitals by Rohit wants that

profit should be distributed equally.

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19. Given below is the Receipts and payments Account of Vinod Sports Club for the year ended 31.12.2008.

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Receipts Amount Payments Amount Balance of Cash Balance of Bank Subscriptions Life Membership Fee Tournament Fund Locker Rent Sale of old sports material (costing 5,000) Sale of old newspapers Legacy Entrance Fee

400 3,600

11,000 8,000

15,000 2,000 3,000

2,000

10,000 5,000

Salaries Billiard Table Office Expenses Stationery Tournament Expenses Furniture purchased Sports equipment purchased FD on 1.1.2008 @ 12% p.a. Balance of Cash Balance of Bank

10,000 8,000 3,400 2,700

16,000 5,000 6,000 5,900

200 2,800

60,000 60,000 Additional information:

On 1.1.2008 subscriptions outstanding were Rs.800 and on 31 December 2008 Rs.900.

On 1.1.2008 the club had Building Rs.50,000; Furniture Rs.20,000 and Sports Equipment Rs.14,000.

Charge depreciation @10% on these items (including purchases). Prepare Income and Expenditure

Account.

20. (a) Vinod Limited purchased assets of Fukrey Limited for Rs.8,40,000 and took over the

liabilities (creditors) of Rs.80,000 for an agreed purchase consideration of Rs.8,00,000. Vinod

Limited issued 12% debentures of Rs.100 each at 25% premium for purchase consideration.

Pass necessary Journal entries in the books of Vinod Limited.

OR

Pass necessary Journal entries for Issue of Debentures for the following:

(i) Issued Rs.4,00,000, 9% debentures of Rs.100 each at a premium of 8% redeemable at 10% premium.

(ii) Issued Rs.6,00,000, 9% debentures of Rs.100 each at par, repayable at a premium of

10%.

(iii) Issued Rs.10,00,000, 9% debentures of Rs.100 each at a premium of 5%, redeemable

at par.

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21. Vinod, Gaurav and Swami were partners in a firm sharing profits and losses in the ratio of 6:5:3. Their Balance Sheet as at 31st March, 2020 was as follows:

Liabilities Amount Assets Amount Creditors General Reserve Capitals: Vinod Gaurav Swami

50,400 21,000 70,800 59,700 29,100

Bank Stock Machinery Land and Building

3,780 1,11,720

10,500 1,05,000

2,31,000 2,31,000

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They agreed to admit Chirag into partnership and give him 1/8th share in the profits on the following terms: (i) Chirag will bring Rs.29,400 as his capital and Rs.28,140 as his share of goodwill premium. (ii) Prepare Partners’ capital account assuming that gain on revaluation was Rs.19,040. OR

Following is the Balance Sheet of Aruna, Karuna and Varuna as on 31st March 2020, who have

agreed to share profits and losses in proportion of their capitals:


Capitals : Aruna 2,00,000

Karuna 3,00,000

Varuna 2,00,000

General Reserve

Workmen compensation fund

Sundry Creditors

7,00,000

35,000

15,000

50,000

Land & Building

Machinery

Closing Stock

Debtors 1,10,000

Less : Provision 10,000

Cash at Bank

2,00,000

3,00,000

1,00,000

1,00,000

1,00,000

8,00,000 8,00,000

On March 31st 2020, Aruna desired to retire from the firm and the remaining partners

decided to carry on the business. It was agreed to revalue the assets and re-assess the

liabilities on that date, on the following basis:

(a) Land and Building be appreciated by 30%.

(b) Machinery be depreciated by 20%.

(c) There were Bad Debts of Rs.17,000.

(d) The claim on account of workmen compensation fund was estimated at Rs.8,000.

(e) Goodwill of the firm was valued at Rs.1,40,000 and Aruna’s share of goodwill was

adjusted against the capital accounts of the continuing partners Karuna and Varuna who

have decided to share future profits in the ratio of 4:3 respectively.

Prepare Revaluation Account and Give entry for adjustment of goodwill only.

22. Vinod Ltd. Issued 4000 Equity Shares @10 each at a premium of Rs.40 each payable as:

On Application ……………………….. 25 each (including 50% premium) On Allotment ………………………….. Rs.3 each On First & Final Call ………………… Balance with premium Applications were received for 7,000 shares out of which 1,000 applications were rejected and prorate allotment was made to the remaining applicants. Excess money adjusted towards allotment. Surinder one shareholder who applied for 900 shares did not pay first & final call and his shares were forfeited. Anuj to whom 400 shares were allotted, did not pay first & final call and his shares were also forfeited. 700 shares were reissued (including 50% of Anuj’s shares) @ Rs.8 each fully paid up. Give necessary entries without opening calls in arrears/advance account. OR Vinod Limited invited applications for 4,00,000 of its equity shares of Rs.10 each on the

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following terms : Payable on application Rs.5 per share Payable on allotment Rs.3 per share Payable on first and final call Rs.2 per share Applications for 5,00,000 shares were received. It was decided: (a) to refuse allotment to the applicants for 20,000 shares; (b) to allot in full to applicants for 80,000 shares; (c) to allot the balance of the available shares’ pro-rata among the other applicants; and (d) to utilise excess application money in part as payment of allotment money. One applicant, whom shares had been allotted on pro-rata basis, did not pay the amount due on allotment and on the call, and his 400 shares were forfeited. The shares were reissued @ Rs.9 per share. Show journal and Cash book to record the above. PART-B

23. Balance Sheet (Extract) Equity and Liabilities 31.3.20 31.3.19 Bank Overdraft 40,000 1,00,000

Additional Information: Interest on Bank Overdraft is paid @5% p.a. on 31st March every year. Amount paid against Bank Overdraft on 30th September 2020. How much amount (related to above information) will be shown in Financing Activity for Cash Flow Statement prepared on 31st March 2020? (a) 65,000 (b) 62,500 (c) 65,500 (d) 63,500

[1]

24. If Quick Ratio is 1.5 and Quick Assets are Rs.60,000. Find out the value of Current Liabilities.

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25. Stores and Spare Parts are presented in company’s balance sheet under: (a) Other Current Liabilities (b) Inventories (c) Cash and Cash Equivalents (d) Fixed Tangible Assets

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26. Which of the following is part of Operating Activities? (a) Rent received by a Manufacturing company (b) Rent received by a Trading company (c) Rent received by a Finance company (d) Rent received by a Real Estate company

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27. Claims against the company not acknowledged as debts is ______________ Liability of the firm.

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28. If ____________ Ratio is high, it is considered better for the lenders. (a) Gross Profit Ratio (b) Proprietary Ratio (c) Current Ratio (d) Interest Coverage Ratio

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29. If Debt Equity Ratio of Vinod Ltd is 3:1. Long term Borrowings Rs.4,00,000 and Long-term Provisions are Rs. 2,00,000. Find out the value of Equity (Shareholders Funds). (a) 2,00,000 (b) 4,00,000 (c) 6,00,000 (d) 1,50,000

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30. Find out Debt to Equity Ratio from the following information:

Equity Share Capital is equal to the 40% of Long-term borrowings Long term provisions are equal to 50% of Equity Share Capital Debit balance of Statement of Profit & Loss Rs.40,000 Long-term Borrowings are 2.5 times of General Reserve General Reserve is 80,000 OR From the following information calculate Interest Coverage Ratio.

Profit before Tax and Interest ………………….. 4,40,0000

12% Debentures …………………………………20,00,000

Tax Rate …………………………………………40%

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31. Prepare a Comparative Balance Sheet from the following:

Particulars Note No.

31.03.2020

31.03.2019

1. 2. 3. 4

I. Equity and Liabilities

1. Shareholders’ Funds

(a) Share capital

(b) Reserves and Surplus

2. Non-Current Liabilities

Long term borrowings (Debentures)

3. Current Liabilities

Trade Payables

40,00,000

4,00,000

10,00,000

6,00,000

40,00,000

1,00,000 7,50,000

1,50,000

TOTAL 60,00,000 50,00,000 II. ASSETS

(1) Non-Current Assets

(a) Fixed Assets

(i) Tangible assets

(ii) Intangible assets

(2) CURRENT ASSETS

(a) Inventories

(b) Cash and cash equivalents

40,00,000

10,00,000

6,00,000

4,00,000

35,00,000

10,00,000

4,00,000

1,00,000

TOTAL 60,00,000 50,00,000 Show your working clearly. OR From the following information, prepare a Comparative Statement of Profit and Loss:

Particulars 31st March 2020 31st March 2019

Revenue from Operations 6,00,000 4,50,000

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Other Incomes (% of Revenue from Operations) Expenses (% of Revenue from Operations) Tax Rate

20% 60% 40%

30% 50% 40%

Tax Rate is same in both the years.

32. Prepare a Cash Flow Statement from the following information of Vinod Ltd.

Particulars Note No. 2020 2019

I Equity and Liabilities


(a) Share Capital


2. Non-current Liabilities

Long term Borrowings


(a) Short-term Borrowings

(b) Short-term Provision

Total

II ASSETS

1. Non-current Assets

(a) Fixed Assets:

(i) Tangible Assets

(ii) Intangible Assets

(b) Non-Current Investment

2. Current Assets:

(a) Current Investment

(b) Inventories

(c) Cash and Cash Equivalents

Total

1

2

3

4

5

6

7

8

25,00,000

10,00,000

22,50,000

7,50,000

3,50,000

20,00,000

(2,50,000)

25,00,000

2,50,000

4,50,000

68,50,000 49,50,000

50,15,000

1,00,000

5,00,000

2,50,000

5,35,000

4,50,000

36,00,000

1,50,000

3,75,000

3,00,000

2,25,000

3,00,000

68,50,000 49,50,000

Notes to Accounts

Particulars 2020 2019 1 Reserves and Surplus Surplus i.e. Balance in Statement of P/L

10,00,000

(2,50,000)

2. Long-term Borrowings 12% Debentures

22,50,000

25,00,000

3. Short-term Borrowings Cash Credit

7,50,000

2,50,000

4. Short-term Provision Provision for Tax

3,50,000

4,50,000

5. Tangible Assets Machinery (cost) Less: Accumulated Depreciation

60,15,000 (10,00,000)

41,05,000 (5,05,000)

50,15,000 36,00,000 6. Intangible Assets Trademarks

1,00,000

1,50,000

7. Inventories



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Stock-in-Trade 5,35,000 2,25,000 8. Cash & Cash Equivalents Cash in Hand Marketable Securities

1,50,000 3,00,000

3,00,000

----


(i) Interest paid on Cash Credit Rs.10,000.

(ii) 12% Debentures were redeemed on 31st March 2020.

(iii) Tax paid Rs.3,50,000 during the year.


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Sample Paper – 3 By Dr. Vinod Kumar For CBSE Examination March 2021





1. Vinod (one partner) has withdrawn Rs.60,000 for his son’s marriage. As per the Partnership deed interest on drawings is charged @10% p.a. There was a net loss during the year ending 31st March 2020 Rs.40,000. What decision Accountant should take regarding interest on drawings? (a) Interest on Drawings Rs.6,000 (b) Interest on Drawings Rs.3,000 (c) Interest on Drawings Rs.4,000 (d) No interest on drawings due to loss

[1]

2. Vinod and Arvind are partners sharing profits equally. Their fixed capitals were Rs.2,00,000 and Rs.3,00,000 on 1 April 2019. On 1st April 2020 they admit Vikram for 1/4th share in the profits. Vikram brought Rs.2,00,000 for his capital which was to be kept fixed like the capitals of other partners. The Balance Sheet shows an amount of General Reserve Rs.40,000 and Profit & Loss A/c (Cr. Balance) Rs.20,000. How much amount Vikram should bring for premium for Goodwill? (a) 1,00,000 (b) 25,000 (c) 10,000 (d) 50,000

[1]

3. The Balance of Securities Premium (received on issue of Equity Shares) cannot be used by a company for _____________ (a) Buy-back of its own shares (b) Issuing fully paid bonus shares to the members (c) Payment of Premium on Redemption of Debentures (d) Maintaining working capital of the company

[1]

4. Vinod Welfare Society has provided the following information: Credit purchase of stationery Rs.96,000. Stationery purchased in cash during the year was 20% of the total purchase of stationery. Creditors for stationery in the beginning were Rs.8,000 and at the end were Rs.24,000. Cash purchase of stationery was: (a) Rs.22,400 (b) 19,200 (c) Rs. 24,000 (d) 16,000

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5. At the time of dissolution of Partnership Firm Capital Account of Vinod shows a credit balance of Rs.50,000. Vinod had also advanced a loan to the firm Rs.30,000. From the following, identify the correct entry for the settlement of Vinod’s Loan: (a) Loan by Vinod A/c Dr. 30,000 To Vinod’s Capital A/c 30,000 (b) Vinod’s Capital A/c Dr. 50,000 To Loan by Vinod 30,000 To Realisation A/c 20,000 (c) Loan by Vinod Dr. 30,000 To Bank A/c 30,000 (d) Vinod’s Loan A/c Dr. 20,000 To Vinod’s Capital A/c 20,000

[1]

6. Vinod Ltd. purchased a running business of Anuj Ltd. for a purchase consideration of Rs.9,47,500. The purchase includes assets of Rs.12,00,000 and Liabilities of Rs.3,00,000. An amount of Rs.22,500 was paid by issuing a promissory note (payable after two months) in favor of Anuj Ltd. and the balance amount was paid by issue of Equity Shares of Rs.100 each at a premium of 25%. Find out how many Equity Shares are to be issued: (a) 12,400 (b) 8,400 (c) 9,400 (d) 7,400

[1]

7. Vinod, a partner is to receive commission 4% of the value of net assets realized as remuneration for completing the dissolution work and was to bear realization expenses. Realisation expenses were Rs.30,000 paid by Vinod. The net assets realized Rs.5,00,000. How much amount is to be credited to Vinod’s Capital Account? (a) 30,000 (b) 20,000 (c) 50,000 (d) 10,000

[1]

8. Vinod and Surinder are partners in a firm sharing profits and losses in the ratio of 2:1. On 1st April 2020, they decided to share profits and losses equally. On that date, their balance sheet showed a debit balance of Profit and Loss Account Rs.30,000. How Surinder’s Capital Account will be affected by the change in profit sharing ratio? (a) Surinder’s Capital A/c Debit Rs.10,000 (b) Surinder’s Capital A/c Debit Rs.5,000 (c) Surinder’s Capital A/c Credit Rs.10,000 (d) Surinder’s Capital A/c Credit Rs.5,000

[1]

9. Modi, Shah and Pappu were partners sharing profits in 1:2:2. Pappu died on 1st April 2020. His share of profit is to be calculated on the basis of average profits of last four years less 20%. The profits/losses of last four year were:

Year 31.3.2017 31.3.2018 31.3.2019 31.3.2020 Profit/loss 40,000 60,000 35,000 (15,000) loss

___________ amount of his share of profit was paid to the executor of Pappu on the above-mentioned date.

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10. On Retirement/Death of a partner, who will compensate? (a) All Partners (b) All Partners except outgoing partner (c) Only Gainer Partners (d) Only Sacrificing Partners

[1]

11. KK, PP and MM are partners sharing profits in the ratio of 4:3:2. KK died and Gaining Ratio of PP and MM was calculated as 21/72 and 11/72. What is the new Ratio of PP and MM? (a) 5:3 (b) 4:3 (c) 2:3 (d) 3:2

[1]

12. Arvind, Vinod and Vikram are partners sharing profits in the ratio of 3:2:1. Vikram is guaranteed a minimum profit of Rs.60,000. The firm incurred a loss of Rs.1,20,000 during the year. How much total amount is to be debited to Vinod’s Capital Account (including deficiency)? (a) 40,000 (b) 72,000 (c) 32,000 (d) 64,000

[1]

13. Pick the wrong statement: (a) Guaranteed amount will be paid to the partner whether there is profit or loss (b) Interest on Capital (appropriation) is not calculated in case of loss (c) Temporary current account can be opened when capitals are fluctuating (d) Interest on Drawings is not calculated in case of loss

[1]

14. From the following information find out the Match Expenses made during the year: An Extract of Income and Expenditure Account For the year ended 31st March 2020

Expenditure Amount Income Amount To Deficiency on Match Fund 3,000

Other information: Opening balance of Match Fund …………………………….…… Rs.4,24,000 Sale of Match Tickets …………………………………………..………Rs.4,73,000 Donation for Match fund received during the year……….. Rs.1,00,000 OR Present the following items in the Balance Sheet of Vinod Welfare Society as at 31st March 2020: Capital Fund on 1st April 2019 ………………………………………………….. Rs.8,00,000 Building Fund on 1st April 2019 …………………………………………………Rs.5,00,000 Donation Received for Building …………………………………………………Rs.4,00,000 Expenditure on Construction of Building Rs.10,00,000. The construction work was completed at the end of financial year.

[3]

15. Vinod and Kamlesh are partners Their capitals at the year ending 31st March 2020 were Rs.8,00,000 and Rs.7,00,000. Their Drawings during the year were Rs.50,000 each. Interest on capital was provided @10% per annum on opening capitals and profit was divided in the ratio of 3:2. The profit for the year was Rs.4,00,000. It was found that there was no partnership deed and accountant was advised to rectify the errors by passing a single adjustment entry.

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OR AK and TK started a partnership firm on 1st April 2019. AK brought in Plant and Machinery valued at Rs.5,00,000 whereas TK brought in Furniture costing Rs.50,000 and Rs.7,00,000 in Cash. Since the business needed more funds, TK gave a loan of Rs.2,00,000 to the firm on 30th June 2019. Their Partnership Deed provided for: (a) Interest on capital to be allowed @10% per annum (b) Interest on Drawings to be charged @6% per annum (c) AK to be given a commission of 4% on the corrected net profit before charging commission. (d) TK to be given a salary of Rs.12,000 per annum. TK withdrew Rs.5,000 at the end of every month and AK withdrew Rs.30,000 on 1st August 2019. The net profit of the firm, for the year 2019-20 after debiting TK’s salary of Rs.12,000 per annum but before considering any interest due to and due from the partners was Rs.4,00,000. You are required to prepare: (i) Profit and Loss Appropriation Account (ii) Partners Capital Account

16. Complete this journal by filling missing figures: Date Particulars L.F. Debit

(Amt.) Credit (Amt.)

Share Capital A/c Dr. To Share Forfeiture A/c To Calls in Arrears A/c (Being 5,000 shares forfeited face value Rs.10 for non-payment of final call of Rs.15,000) Bank A/c Dr. Share Forfeiture A/c Dr. To Share Capital A/c (Being 125 forfeited shares reissued @9 per share) Share Forfeiture A/c Dr. To Capital Reserve (Being Gain on reissue transferred)

? ? ? ?

? ? ? ?

..

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17. Give Entries for the following at the time of Dissolution of Firm: The Book value of assets (other than cash and bank) transferred to realization account is Rs.3,00,000. Half of the assets are taken over by a partner Vinod at a discount of 20%. Out of the remaining assets 40% sold at a profit of 30% on cost. 5% of the balance being obsolete, realized nothing and remaining assets are handed over to a creditor in full settlement of his claim.

[4]

18. Vinod and Singh started a partnership business on 1st July 2019. They contributed Rs.5,00,000 and Rs.4,00,000 respectively. Profit sharing ratio was decided 3:2 and other terms of the partnership agreement are as given under: (i) Interest on Capital is to be allowed @4% p.a. (ii) Singh is to get annual salary of Rs.24,000.

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(iii) Vinod withdrew Rs.40,000 for personal use on 1st January 2020. Interest on drawings is to be charged @6% p.a. The profit for the year ended 31st March 2020, before making above appropriations was Rs.29,400. Prepare Profit and Loss Appropriation Account and Partners Capital Account for the year ended 31st March 2020.

19. From the following Receipts and Payments Account of Vinod Welfare Club for the year

ended 31st March 2020 and the additional information, prepare Income and Expenditure Account and Balance Sheet of the Club.

Receipts Amount Payments Amount To Balance b/d: Cash in hand 19,000 Bank Balance 21,000 To Donation towards Sports Fund To Subscription To Legacy (Specific) To Interest on Sports Fund Investment To Sale of old newspapers To Sale of Grass To Sale of Drama Tickets To Life Membership Fee

40,000 50,000

2,00,000 1,00,000

4,000 2,000 4,000

30,000 70,000

By Salaries By Furniture By Billiard Table By Books By Sports Expenses By Drama Expenses By Rent By Defence Bonds 1.7.2019 By Stationery By Balance c/d: Cash in hand 5,000 Bank Balance 10,000

90,000 1,00,000

70,000 45,000 50,000 40,000 15,000 55,000 20,000

15,000 5,00,000 5,00,000


(i) On 1st April 2019, Sports Fund was Rs.70,000 and 10% Sports Fund Investment Rs.70,000.

(ii) Information about Stationery:

1st April 2019 31st March 2020 Stock of Stationery Creditors for Stationery

15,000 6,500

18,000 9,500

(iii) Interest accrued on Defence Bonds Rs.3,500.

[6]

20. On 1st April, 2019, Vinod Ltd. issued 8,000, 9% Debentures of Rs.1,000 each at a discount of

6%, redeemable at a premium of 5% after three years. The company closes its books on 31st

March every year. Interest on 9% Debentures is payable on 30th September and 31st March every year. The rate of tax deducted at source is 10%.

Pass necessary journal entries for the issue of debentures and debenture interest for the year ended 31st March 2020.

OR

Vinod Ltd. purchased machinery from Fukrey Ltd. and paid as follows: (i) By issuing 5,000 Equity Shares of Rs.10 each at a premium of 30%. (ii) By issuing 1,000, 8% Debentures of Rs.100 each at a discount of 10%.

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(iii) Balance by giving a promissory note of Rs.48,000 payable after two months. Pass necessary journal entries for the purchase of machinery and payment made.

21. Vinod and Kumar are partners sharing profits and losses in the ratio of 3:2 respectively. On

31st March 2020 their Balance Sheet was as follows:

Liabilities Amount Assets Amount Capital A/cs: Vinod 6,00,000 Kumar 3,00,000 Creditors Bills Payable General Reserve

9,00,000 2,00,000 1,00,000

50,000

Goodwill Machinery Building Stock Debtors Bank Balance

50,000 2,50,000 6,00,000 2,00,000 1,30,000

20,000 12,50,000 12,50,000

They admit Yuvraj as a partner with effect from 1st April 2020 for 1/3rd share on the following

terms:

(i) Yuvraj bring in Rs.5,00,000 as his capital. His share of premium for goodwill to be

calculated on the basis of three years’ purchase of last five years average profits. The profits for the last five years were:

Year 2015-16 2016-17 2017-18 2018-19 2019-20 Profit 2,50,000 2,00,000 3,75,000 (1,25,000) 2,50,000

The profit of 2016-17 was calculated after charging Rs.50,000 abnormal loss of goods by fire.

Yuvraj brings only 60% towards premium for goodwill and for remaining amount adjustment

is to be made by opening his current account.

(ii) Building was overvalued by 20% and stock was undervalued by 20%.

(iii) There is an unrecorded delivery Van worth Rs.70,000.

Prepare Revaluation Account and Partners Capital Account.

OR

MK, AK and JK are partners in a firm, sharing profits and losses in the ratio of 3:1:1. Their

Balance Sheet as at 31st March 2020 was as follows:

Liabilities Amount Assets Amount Capital A/cs: MK 70,000 AK 50,000 JK 50,000 Trade Creditors General Reserve Investment Fluctuation Reserve Provision for doubtful debts

1,70,000 15,000

6,000 9,000 5,000

Cash at Bank Sundry Debtors Investment (at cost) Plant & Machinery Goodwill

40,000 30,000 35,000 88,000 12,000

2,05,000 2,05,000

MK retired on 1st April, 2020 subject to the following adjustments:

(i) Goodwill of the firm to be valued at Rs.20,000

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(ii) Mohit to take over the investment at the market value Rs.40,000.

(iii) 25% of the General Reserve to be transferred to Provision for doubtful debts and the

balance to be distributed amongst all the partners.

(iv) Creditors to be paid Rs.3,000 less.

(v) Investment Fluctuation Reserve not to be distributed. For this it was decided that the

remaining partners would compensate the retiring partner through their capital accounts.

(vi) MK to be paid Rs.20,000 immediately on retirement and the balance to be transferred to his loan account.

Pass journal entries on the date of MK’s retirement.

22. Vinod Fabrics Ltd. has authorised capital of Rs.50,00,000 divided into 5,00,000 Equity Shares of Rs.10 each. Company offered 3,00,000 shares of Rs.10 each at a premium of 20% per share. The amount was payable as follows: On Application …………………………………… Rs.2 per share along with 50% premium On Allotment ………………………………………Rs.3 per share On First & Final Call …………………………….Balance with remaining premium Applications for 3,50,000 shares were received. Applications for 25,000 shares were rejected and pro rata allotment was made to the remaining applicants. Over payments on application were adjusted towards sums due on allotment. All calls were made and duly received except allotment and final call on 15,000 shares allotted to Surinder. These shares were forfeited. Afterwards, half of the forfeited shares were reissued for Rs.82,500 as fully paid up. Give entries in the books of Vinod Fabrics Ltd. without opening calls in arrears/advance account. OR

Vinod Ltd. Invited applications for issuing 10 Lakhs Equity Shares Face Value Rs.10 each at a premium of 10% payable as follows: On Application and Allotment ……………………… 30% of face value along with premium On First Call ………………………………………………….40% of face value On Second and Final call ………………………………. Balance Applications were received 50% in excess and prorate allotment was made to all the applicants. Excess application money was adjusted on the sums due on calls. Nidhi who had applied for 6,000 shares did not pay the first call and second & final call. Her shares were forfeited. Out of the forfeited shares 90% were reissued at Rs.8 per share fully paid up. Give necessary journal entries by opening calls in advance/arrear account. PART- B

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23. Redemption of Debentures is shown by way of deduction under __________ activities while preparing Cash Flow Statement.

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24. Which of the following items is not part of Inventories? (a) Loose Tools (b) Stores and Spares (c) Work in progress (d) Capital work in progress

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25. Mining Rights are shown under which heading while preparing Balance Sheet of a company? (a) Contingent Assets (b) Contingent Liability (c) Other Current Assets (d) Non-current Assets

[1]

26. Purchase of goods for cash will increase the Current Ratio. Is this statement correct? Give reason in support of your answer.

[1]

27. Accrued Commission of Rs.60,000 will come under which heading while preparing Balance sheet of a company. (a) Inventories (b) Trade Receivables (c) Other Non-current Assets (d) Other Current Assets

[1]

28. Purchase of Patents would result in: (a) Inflow (b) Outflow (c) No Flow of cash (d) None of the above

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29. While doing Financial Statement Analysis, Historical Analysis of the financial statements is considered as: (a) An Advantage (b) A Limitation (c) Objective (d) Types of financial statement analysis

[1]

30. Calculate the ‘Total Assets to Debt ratio’ from the following information: Current Assets Rs.11,00,000; Working Capital Rs.6,50,000; Shareholders’ Funds Rs.7,50,000 Total Debts Rs.19,50,000; Reserves and Surplus Rs.2,50,000. OR A company had Current Assets of Rs.3,00,000 and Current Liabilities Rs.1,40,000. Afterwards it purchased goods worth Rs.20,000 on credit. Calculate the current ratio after the purchase of goods.

[3]

31. Prepare a Comparative Statement of Profit & Loss from the following details: Particulars Note

No. 31.03.2020 31.03.2019

Revenue from operation 30,00,000 20,00,000 Other income (% of Revenue from operations) 15% 20% Expenses (% of Revenue from operations) 60% 50% Tax 30% 30%


OR

Prepare a Comparative Statement of Profit & Loss from the following details: Particulars Note No. 31.03.2020 31.03.2019

Revenue from operation 10,00,000 5,00,000 Purchase of Stock-in-Trade 6,50,000 2,00,000 Change in Inventories of Stock in Trade 60,000 50,000 Other Expenses 10% of Cost of

Revenue from Operations

20% of Cost of Revenue from Operations

Tax 40% 30%


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32. Following are the Balance Sheets of Vinod Limited for the year ended 31st March 2019 and 2020:

Particulars 2020 2019

I. Equity and Liabilities (1) Shareholders Funds: (a) Share Capital 1 (b) Reserves & Surplus 2 (2) Non-current Liabilities: Long term borrowings 3 (3) Current Liabilities: (a) Short-term Borrowings 4 (b) Trade Payables (c) Short-term Provision 5 Total

II. Assets (1) Non-current Assets: (a) Fixed Assets: (i) Tangible Assets 6 (ii) Intangible Assets 7 (b) Non-current Investment (2) Current Assets: (a) Current Investments (a) Inventories (b) Trade Receivables (c) Cash and Cash Equivalents

Total

8,00,000 3,50,000

2,50,000

60,000

2,40,000 80,000

8,00,000 (40,000)

2,00,000

1,00,000 1,90,000

50,000

17,80,000 13,00,000

8,00,000 20,000

2,50,000

5,000 3,05,000 3,00,000 1,00,000

6,00,000 50,000

2,00,000

20,000 2,30,000 1,60,000

40,000

17,80,000 13,00,000

Notes to Accounts:

Particulars 2020 2019

1. Share Capital Equity Share Capital 6% Preference Share Capital

5,00,000 3,00,000

5,00,000 3,00,000

8,00,000 8,00,000

2. Reserves and Surplus Securities Premium Reserve General Reserve Surplus i.e. Balance in Statement of P/L

10,000 1,40,000 2,00,000

20,000 (60,000)

3,50,000 (40,000)

3. Long-term Borrowings 8% Debentures

2,50,000

2,00,000

4. Short-term Borrowings 8% Bank Loan

60,000

1,00,000

5. Short-term Provisions Provision for Tax

80,000

50,000

[6]


Available at

6. Tangible Assets Plant and Machinery

8,00,000

6,00,000

7. Intangible Assets Patents

20,000

50,000

Prepare a Cash Flow Statement after taking into account the following adjustment:

(a) At the end of the year Non-current investments were sold for Rs.1,50,000 (including 50% profit).

(b) Income tax Rs.1,00,000 was provided

(c) Additional debentures were issued at premium on 1st April 2019.

(d) Bank Loan was repaid on 1st October 2019.

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(1) (d) Profit and Loss Appropriation Account 1 Mark

Reason: Whether a partner get commission on sales OR Net profit, it comes

in Profit and Loss Appropriation Account. Because partner is allowed to take

commission only if there is some profit in the business. Commission on sale

is also treated as Appropriation for a partner.

(2) (c) He is a Gainer Partner 1 Mark

Reason: There is a rule, Gainer partner debit and sacrificing partner credit.

So if he is gainer, he will also compensate to the sacrificing partner.

(3) (d) Reserve Capital 1 Mark

(4) (d) 5,000 Subscription written off 1 Mark

Note: 4,40,000 + 30,000 + 25,000 – 4,00,000 – 50,000 – 40,000

(5) (d) Realisation A/c Dr. 1 Mark

To Bank A/c

(6) (a) 4000 1 Mark

(7) (d) Realisation A/c Credit by Rs.2,000 1 Mark

(8) (b) 50,000 1 Mark

Note: 56,000 x 12/112 = 6,000 (now 56,000 – 6,000)

(9) 5,400 1 Mark

Note: Expected Sale = 2,00,000 + 20% Growth = 2,40,000

Marking Scheme -1


Expected Profit = Last year profit 10% - 1% = 9%

His Share of profit = 2,40,000 x 9/100 x 5/10 x 6/12 = 5,400

(10) (c) Gain Ratio 1 Mark

(11) (d) 20% 1 Mark

Note: 30,000 x 10/5 = 60,000 Total profit for that period

60,000/3,00,000 x 100 = 20%

It means profit was calculated 20% on sales i.e. 3,00,000 x 20/100 = 60,000

Her share = 60,000 x 5/10 = 30,000

(12) (d) 12,000 1 Mark

(13) (c) Interest on Partner’s Loan 1 Mark

(14) Subscription Account 3 Marks

Particulars Amount Particulars Amount To Subscription in Arrear To Income & Expenditure A/c To Advance Subscription

8,000 1,20,000

12,000

By Advance Subscription By Bank A/c By Subscription in Arrears For 2019 3,000 For 2020 17,000

20,000 1,00,000 20,000

1,40,000 1,40,000

OR

Creditors for Stationery Account

Particulars Amount Particulars Amount To Bank To Bal. c/d

3,00,000 60,000

By Bal. b/d By Stationery A/c (Purchase. Bal. fig.)

15,000 3,45,000

3,60,000 3,60,000

Cash Purchase 3,45,000 x 100/75 = 4,60,000


4,60,000 x 25/100 = 1,15,000

Now: Opening Stock 70,000 + credit purchase 3,45,000 + cash purchase

1,15,000 – Closing stock 2,00,000 = 3,30,000

Stationery to be debited to Income and Expenditure Account Rs.3,30,000

(15) Adjustment Table 4 Marks

Particulars Vinod Kamal Rohit Total Profit

Should get 2% p.a. Interest on capital Less: Interest on Drawings

10,000 (1,300)

8,000 (1,200)

7,000 (900)

8,700 6,800 6,100 21,600 Profit 21,600 wrongly distributed in 3:2:1

10,800 7,200 3,600

2,100 Dr. 400 Dr. 2,500 Cr.

Vinod’s Capital A/c Dr. 2,100 Kamal’s Capital A/c Dr. 400 To Rohit’s Capital A/c 2,500 OR Vinod’s Capital A/c Dr. 45,000 Mukesh’s Capital A/c Dr. 30,000 Shiv’s Capital A/c Dr. 15,000 To Profit and Loss A/c 90,000 (Being loss distributed among the partners) Vinod’s Capital A/c Dr. 36,000 Mukesh’s Capital A/c Dr. 24,000 To Shiv’s Capital A/c 60,000 (Being adjustment made for deficiency) 16. Journal

Date Particulars L.F. Debit Credit Share Capital A/c Dr.

To Share Forfeiture A/c 50,000

35,000


To Calls in Arrears A/c (Being 5,000 shares forfeited for non-payment of Rs.15,000) Bank A/c Dr. Share Forfeiture A/c Dr. To Share Capital A/c (Being 125 forfeited shares reissued) Share Forfeiture A/c Dr. To Capital Reserve (Being Gain on reissue of shares)

1,125 125

750

15,000

1,250

750

2+1+1 17. Partners’ Capital Account

Particulars Vinod Mohit Particulars Vinod Mohit To Balance b/d To Realisation A/c To P&L A/c To Realisation Loss To Bank (Exp.) To Bank A/c (Bal. Fig. paid)

5,000 30,000 1,000 70,500

50,000 2,000 5,000 30,000

By Balance b/d By Realisation A/c By Gen. Reserve By Bank A/c (Bal. fig.)

1,00,000 3,000 3,500

3,500 83,500

1,06,500 87,000 1,06,500 87,000

Vinod’s Loan Account

Particulars Amount Particulars Amount To Bank A/c 15,500 By Balance b/d

By Realisation A/c 15,000

500 15,500 15,500

3+1 18. (a) Vinod is correct because in the absence of partnership deed, interest on loan cannot be more than 6% p.a. 2 (b) (i) Vinod’s Commission A/c Dr. 1 To Vinod’s Current A/c (ii) Profit and Loss Appropriation A/c Dr. 1 To Vinod’s Commission A/c (19) Ans. Income and Expenditure Account 6

Expenditure Amount Income Amount To Salaries To Stationery Consumed To Rates and Taxes

80,000 4,000 1,500

By Subscription By Income from sports matches By Interest 5,000+1,000

1,25,000 60,000

6,000


1,000

38,000 3,000

98,500

By Profit from Entertainment By Rent of Hall

25,000 10,000

2,26,000 2,26,000

Balance Sheet (Closing)

Liabilities Amount Assets Amount Advance subscription Capital Fund: Opening balance 2,02,750 Add: Surplus 98,500

25,000

3,01,250

Cash in hand Stock of Stationery Prepaid Rates and Taxes 8% Government Securities Interest Accrued Subscription Billiard Table Furniture

27,000 2,000 1,250

1,00,000 1,000

25,000 1,00,000

70,000 3,26,250 3,26,250

Balance Sheet (opening)

Liabilities Amount Assets Amount Advance Subscription Capital Fund (Balancing Figure)

12,500 2,02,750

Cash in hand Stock of Stationery Prepaid Rates & Taxes 8% Government Securities Subscription

50,000 1,500 1,250

75,000 87,500

2,15,250 2,15,250

Calculation of Subscription in arrears at the end:

Subscription Account

Particulars Amount Particulars Amount To Subscription in Arrear (Opening) To Income & Expenditure A/c To Advance Subscription

87,500 1,25,000

25,000

By Advance Subscription By Bank By Subscription in Arrears at the end

12,500 2,00,000

25,000

2,37,500 2,37,500

(20) Journal 6

Date Particulars L.F. Debit Credit (i)

Assets A/c Dr. Goodwill A/c Dr. To Liabilities A/c To Fukrey Ltd. (Being assets and liabilities acquired)

6,00,000 10,000

60,000 5,50,000

(1,500 – 1,250 + 1,250) To Telephone charges To Sundry Expense To Courier Service Charges To Surplus (Bal. Fig.)


(ii) (iii)

Fukrey Ltd. Dr. To 8% Debentures A/c To Securities Premium Reserve (Being purchase consideration paid by issuing debentures) Land A/c Dr. To King Ltd. (Being land purchased) King Ltd. Dr. Discount on issue of Debentures A/c To 5% Debentures A/c (Being consideration paid through debentures) Statement of P/L Dr. To Discount on issue of Debentures (Being Discount written off) Bank A/c Dr. To Debentures App. & Allot. A/c (Being debentures issued at discount) Debentures App. & Allot. A/c Dr. Discount on issue of Debentures A/c Dr. Loss on issue of Debentures A/c Dr. To 6% Debentures A/c To Premium on Redemption of Deb. A/c (Being debentures issued at discount, redeemable at premium) Statement of P/L Dr. To Loss on issue of Debentures A/c To Discount on issue of Debentures (Being loss written off)

5,50,000

4,50,000

4,50,000 50,000

50,000

93,000

93,000 7,000

10,000

17,000

5,00,000 50,000

4,50,000

5,00,000

50,000

93,000

1,00,000 10,000

10,000 7,000

(21) Revaluation Account 8

Particulars Amount Particulars Amount

To Workmen Comp. Reserve To Provision for bad debts To Stock To Creditors To Profit transferred to: Vinod 13,800 Ram 9,200

5,000 325 2,000 2,000 23,000

By Furniture By Plant & Machinery By Office Equipment (computer)

10,325 10,000 12,000

32,325 32,325


Partners’ Capital Account

Particulars Vinod Ram Divij Particulars Vinod Ram Divij

To Def. Exp. To Bal. c/d

12,000 64,800

8,000 43,200

30,000

To Bal. b/d To Cash A/c To Rev. A/c To Gen. Res.

60,000 13,800 3,000

40,000 9,200 2,000

30,000

76,800 51,200 30,000 76,800 51,200 30,000

To Bal. c/d

69,000

46,000

30,000

By Bal. b/d By Divij’s Current A/c

64,800 4,200

43,200 2,800

30,000

69,000 46,000 30,000 69,000 46,000 30,000

OR Z’s Capital Account


To Drawings A/c To Interest on Drawings To Bank A/c (Bal. Final Payment)

12,000 600

82,000

By Balance b/d By Interest on Capital By X’s Capital A/c (Goodwill) By Y’s Capital A/c (Goodwill) By X’s Capital A/c (Gen. Res) By Y’s Capital A/c (Gen. Res.)

60,000 3,600

13,500 13,500

2,000 2,000

94,600 94,600

Note: Goodwill = 45,000 average profit x 3 = 1,35,000 Z’s share of goodwill = 1,35,000 x 1/5 = 27,000

(22) Journal 8 Marks

Date Particulars L.F. Debit Credit Bank A/c Dr.

To Equity Share Application A/c (Being Application money received) Equity Share Application A/c Dr. To Equity Share Capital A/c To Equity Share Allotment A/c (Being share application money adjusted) Equity Share Allotment A/c Dr. To Equity Share Capital A/c To Security Premium Reserve A/c (Being Allotment due) Bank A/c Dr. To Equity Share Allotment A/c (Being allotment received)

3,75,000

3,75,000

3,50,000

2,22,300

3,75,000

2,50,000 1,25,000

1,00,000 2,50,000

2,22,300


Equity Share First & Final Call A/c Dr. To Equity Share Capital A/c (Being call due) Bank A/c Dr. To Equity Share First & Final Call A/c (Being call money received) Equity Share Capital A/c Dr. Securities Premium Reserve A/c Dr. To Equity Share Allotment A/c To Equity Share First & Final Call A/c To Share Forfeiture A/c (Being 600 shares forfeited) Bank A/c Dr. Share Forfeiture A/c Dr. To Equity Share Capital A/c (Being reissue of forfeited shares) Share Forfeiture A/c Dr. To Capital Reserve (Being gain on forfeiture transferred capital reserve)

1,50,000

1,48,200

6,000 2,700

2,880 720

1,800

1,50,000

1,48,200

2,700 1,800 4,200

3,600

1,800

OR

Date Particulars L.F. Debit Credit Bank A/c Dr.

To Equity Share Application A/c (Being Application money received) Equity Share Application A/c Dr. To Equity Share Capital A/c To Securities Premium Reserve To Bank A/c To Equity Share Allotment A/c (Being share application money adjusted) Equity Share Allotment A/c Dr. To Equity Share Capital A/c To Security Premium Reserve A/c (Being Allotment due) Bank A/c Dr. To Equity Share Allotment A/c (Being allotment received)

6,00,000

6,00,000

3,00,000

1,49,700

6,00,000

2,00,000 1,00,000 1,50,000 1,50,000

2,00,000 1,00,000

1,49,700


Equity Share First & Final Call A/c Dr. To Equity Share Capital A/c (Being call due) Bank A/c Dr. To Equity Share First & Final Call A/c (Being call money received) Equity Share Capital A/c Dr. Securities Premium Reserve A/c Dr. To Equity Share Allotment A/c To Equity Share First & Final Call A/c To Share Forfeiture A/c (Being 100 shares forfeited) Equity Share Capital A/c Dr. To Equity Share First & Final Call A/c To Share Forfeiture A/c (Being 50 shares forfeited) Bank A/c Dr. Share Forfeiture A/c Dr. To Equity Share Capital A/c (Being reissue of forfeited shares) Share Forfeiture A/c Dr. To Capital Reserve (Being gain on forfeiture transferred capital reserve)

1,00,000

99,700

1,000 200

500

1,200 300

800

1,00,000

99,700

300 200 700

100 400

1,500

800

(23) (d) 60,000 1 Mark (24) Current Ratio 4:1 1 Mark (25) (d) Cash Credit 1 Mark (26) (c) Amortisation of Patents 1 Mark (27) Short-term Provisions 1 Mark (28) (a) Increase the Current Ratio 1 Mark (29) (d) 2.5:1 i.e. 4,00,000 x 2 = 8,00,000 and Current assets 8,00,000 + 2,00,000 = 10,00,000 (Current Ratio = 10,00,000/4,00,000 = 2.5:1) 1 Mark (30) Current Assets Rs.3,50,000 and Current Liabilities Rs.1,00,000 3 Mark OR Current Assets = 1,00,000 – 50,000 = 50,000


Current Liabilities = 1,00,000 – 60,000 – 20,000 = 20,000 Current Ratio = 50,000/20,000 = 2.5:1 (31) Comparative Statement of Profit & Loss 4 Marks


31.03.2019 `

31.03.2020 `

Absolute Change

(Increase or Decrease)

`

Percentage change


1 2 3 4 5

A B (B-A)=C %

i. Revenue from Operations 20,00,000 30,00,000 10,00,000 50 ii. Other Income 4,00,000 4,50,000 50,000 12.5 iii. Total Revenue (i+ii) 24,00,000 34,50,000 10,50,000 43.75 iv. Expenses 10,00,000 18,00,000 8,00,000 80 v. Profit before Tax (iii-iv) Less: Tax

14,00,000 4,20,000

16,50,000 4,95,000

2,50,000 75,000

17.85 17.85

Profit after tax 9,80,000 11,55,000 1,75,000 17.85

OR Comparative Statement of Profit & Loss


31.03.2019 `

31.03.2020 `

Absolute Change


`

Percentage change


1 2 3 4 5

A B (B-A)=C %

i. Revenue from Operations 5,00,000 10,00,000 5,00,000 100 ii. Expenses: (a) Purchase of Stock in Trade (b) Change in Inventories (c) Other Expense

2,00,000 50,000 50,000

6,50,000 60,000 71,000

4,50,000 10,000 21,000

225 20 42

Total Expenses 3,00,000 7,81,000 4,81,000 160.33

iii. Profit before Tax (i-ii) Less: Tax

2,00,000 60,000

2,19,000 87,600

19,000 27,600

9.50 46.00 Profit after tax 1,40,000 1,31,400 (8,600) (6.14)

(32) Cash Flow from Operating Activities 6 Marks

Particulars Amount Profit before tax 90,000 + 3,000 + 10,000 Add: Amortisation of Patents Loss by fire Less: Profit on Sale

1,03,000 12,000 2,000 (5,000)

Operating profit before working capital changes Add: Decrease in Inventories Add: Increase in Expenses Payable Less: Accounts Receivable Less: Accounts Payable

1,12,000 3,000 1,000 (4,000) (2,000)

Cash Generated from Operating Activities Less: Tax

1,10,000 (5,000)

Cash Flow From Operating Activities 1,05,000

Working Note:


Provision for Taxation Account Particulars Amount Particulars Amount To Bank A/c (Tax paid) To Bal. c/d

5,000 4,000

By balance b/d By Statement of P/L (Provision made for tax)

6,000 3,000

9,000 9,000

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MARKING SCHEME -2

1. (c) 405 i.e. 4,500 x 4 = 18,000 (Now 18,000 x 6/100 x 4.5/12) 1 Mark

2. New Profit sharing ratio of Vinod, Sunita and Simran = 4 : 3 : 3. 1 Mark

3. (d) Private Placement of Shares. 1 Mark

4. (b) Government Grants 1 Mark

5. (c) Bank A/c Dr. 20,000 To Realisation A/c 20,000 1 Mark 6. (d) Rs.3,15,000 1 Mark

Prize fund 44,000

+ Interest on Prize

Fund Investment 6,000

Less Prizes awarded (46,000)

4,000

Prize Fund investment 44,000

Note: Match expenses Rs.64,000 will be shown in Income and Expenditure Account.

OR

Balance Sheet


To Balance b/d

To Cash/bank A/c

60,000

46,500

By Income & Expenditure A/c

(medicines consumed)

3,72,500

7. (b) 37,600 1 Mark

8. (d) 45,000 1 Mark

9. 5,400 1 Mark

Working Note:

Calculation of DK’s Share of Profit =

Expected sales for 2020-21 = 2,00,000 + 40,000 (2,00,000 x 20/100) = 2,40,000

Expected profit % for 2020-21 = 10% - 1% = 9%

DK’s Share of profit = 2,40,000 x 9/100 x 5/10 x 6/12 = 5,400

10. (c) All Partners in their old Profit-Sharing Ratio 1 Mark

11. (d) Realisation Account 1 Mark

12. (a) 4,800 1 Mark

13. (d) Rent Received by Partner 1 Mark

14. Balance Sheet 3 Marks





To Creditors A/c 2,76,000 By Balance c/d 10,000

3,82,500 3,82,500

Calculation of Amount of Medicines Consumed = Opening Stock of Medicines +

Purchases (Cash +Credit) - Closing Stock of Medicines

= 60,000+ (2,76,000+46,500) -10,000 = 3,72,500

15. Entries

Date Particulars L.F. Debit Credit

Jack’s Salary A/c Dr.

To Jack’s Capital A/c

(Being Salary paid to Jack)

Profit and Loss Appropriation A/c Dr.

To Jack’s Salary A/c

(Being transferred to P/L App. A/c)

Vinod’s Commission A/c Dr.

To Vinod’s Capital A/c

(Being commission paid)


To Vinod’s Commission A/c

(Being transferred to P/L App. A/c)


To Jack’s Capital A/c

To Vinod’s Capital A/c

To Kapil’s Capital A/c

(Being distribution of profit made)

Jack’s Capital A/c Dr.

Vinod’s Capital A/c Dr.

To Kapil’s Capital A/c

(Being adjustment on Guarantee made)

60,000

60,000

30,000

30,000

90,000

2,500

2,500

60,000

60,000

30,000

30,000

45,000

30,000

15,000

5,000

½ + ½ + ½ + ½ + 1 + 1

OR

Particulars Vinod Vikram Naveen

Interest on Drawings 4% p.a. 2,600 2,200 2,400

Correct Distribution of profit will be

2,600 + 2,200 + 2,400 = 7,200 in 3:2:1

3,600

2,400

1,200

1,000 Cr. 200 Cr. 1,200 Dr.




Naveen’s Current A/c Dr. 1,200

To Vinod’s Current A/c 1,000

To Vikram’s Current A/c 200

16. Journal 2+1+1


(Amt.)

Credit

(Amt.)

Equity Share Capital A/c Dr.

Securities Premium Reserve A/c Dr.

To Equity Share Second & Final Call A/c

To Forfeited Shares A/c

(Being 2000 shares forfeited due to non-

payment of second & final call of Rs.8

including premium of Rs.5)

20,000

10,000

16,000

14,000

Bank A/c Dr.


To Equity Share Capital A/c

(Being reissued 1500 shares @ 8 per share

fully paid)

12,000

3,000

15,000


To Capital Reserve

(Being transferred to capital reserve)

7,500

7,500

17. Journal


(Amt.)

Credit

(Amt.)

Realisation A/c Dr.

To Bank A/c

46,000

46,000

Realisation A/c Dr.

To B’s Capital A/c

21,000

21,000

Realisation A/c Dr.

To Bank A/c

5,000

5,000

Bank A/c Dr.

To Realisation A/c

4,000

4,000

1 mark for each entry

18. Suggestions: 1+1+1+1

(i) Rohit cannot admit his Son as partner if Ajay objects to it.




(ii) Rohit is not entitled to any salary

(iii) No interest on capital. On Interest on partner’s loan will be allowed @6% p.a.

(iv) Profits are to be shared equally

19. Income and Expenditure Account 6 marks

Expenditure Amount Income Amount To Salaries To Office Expenses To Stationery To Loss on sale of sports material To Depreciation on Building To Depreciation on Furniture To Dep.on Sports Equipment To Tournament Expenses

10,000 3,400 2,700 2,000 5,000 2,500 2,000 1,000

By Subscriptions 11,000 + 900 – 800 By Locker Rent By Sale of old newspapers By Entrance Fee By Accrued interest By Deficit

11,100 2,000 2,000 5,000 708 7,792

28,600 28,600

20. (a) Journal

Sundry Assets A/c Dr. 8,40,000

Goodwill A/c (Bal. Fig) 40,000

To Liabilities A/c 80,000

To Fukrey Limited 8,00,000

Fukrey Limited 8,00,000

To 12% Debentures A/c 6,40,000

To Securities premium 1,60,000

No. of debentures issued = 8,00,000/125 = 6,400 2.5+2.5+1

OR

Case 1

Case 2

Bank A/c Dr. 4,32,000

To Deb. App. & Allot. A/c 4,32,000

Deb. App. & Allot A/c 4,32,000

Loss on issue of deb. 40,000

To 9% Debenture A/c 4,00,000

To Securities premium reserve 32,000

To premium on Redemption 40,000

Bank A/c Dr. 6,00,000



Loss on issue of deb. 60,000




Case 3


To premium on Redemption 60,000

Bank A/c Dr. 10,50,000




To Securities premium reserve 50,000

1 mark each

21. Partners’ Capital Account

Particulars Vinod Gaurav Swami Chirag Particulars Vinod Gaurav Swami Chirag To Bal.c/d

1,00,020

84,050

43,710

29,400

By Bal. b/d By G.Res. By Rev. By Bank By Prem.

70,800 9,000 8,160

12,060

59,700 7,500 6,800

10,050

29,100 4,500 4,080

6,030

29,400

1,00,020 84,050 43,710 29,400 1,00,020 84,050 43,710 29,400

2 marks for each partner

OR

Revaluation Account

Particulars Amount Particulars Amount To Machinery A/c

To Bad Debts

60,000

7,000

By Land and Building

By Revaluation Loss transfer to:

Aruna 2,000

Karuna 3,000

Varuna 2,000

60,000

7,000

67,000 67,000

Entry for Goodwill: Karuna’s Capital A/c Dr. 20,000 Varuna’s Capital A/c Dr. 20,000 To Aruna’s Capital A/c 40,000

22. Journal 8 Marks

Bank A/c Dr. 1,75,000

To Sh. Application A/c 1,75,000

(Being application money received)

Sh. Application A/c Dr. 1,75,000

To Securities Premium Reserve 80,000

To Sh. Capital A/c 20,000

To Bank A/c 63,000

To Sh. Allotment A/c 12,000




(Being application money adjusted)

Sh. Allotment A/c Dr. 12,000


(Being allotment due)

Bank A/c Dr Nil

To Sh. Allotment A/c Nil

(Being allotment adjusted)

First & Final Call A/c Dr. 88,000


To Securities Premium Reserve 80,000

(Being Call amount due)

Bank A/c Dr. 66,000

To First & Final Call A/c 66,000

(Being call received)

Sh. Capital A/c Dr. 6,000

Securities Premium Reserve Dr. 12,000

To First & Final Call 13,200

To Sh. Forfeiture A/c 4,800

(Being 600 shares forfeited)

Sh. Capital A/c Dr. 4,000

Securities Premium Reserve Dr. 8,000

To First & Final Call 8,800

To Sh. Forfeiture A/c 3,200

(Being 400 shares forfeited)

Bank A/c Dr. 4,000

Sh. Forfeiture A/c Dr. 1,000


(Being reissue of 500 shares of Surinder)

Bank A/c Dr. 1,600

Sh. Forfeiture A/c Dr. 400


(Being reissue of 200 shares of Anuj)

Sh. Forfeiture A/c Dr. 4,200

To Capital Reserve 4,200

(Being transfer to reserve)

OR

Date Particulars L.F. Debit (Amt.) Credit (Amt.)




Share Application A/c Dr.

To Share Capital A/c

To Share Allotment A/c

(Being application money adjusted)

Share Allotment A/c Dr.


(Being allotment money due)

Share First Call A/c Dr.


(Being first call money due)

Share Capital A/c Dr.

To Share Forfeiture

To Share Allotment

To Share First Call

(Being 400 shares forfeited by the company)

Share Forfeiture A/c Dr.


(Being reissue of 400 shares)

Share Forfeiture A/c Dr.

To Capital Reserve

(Being amount transferred to capital reserve)

24,00,000

12,00,000

8,00,000

4,000

400

2,100

20,00,000

4,00,000

12,00,000

8,00,000

2,500

700

800

400

2,100

Cash Book (Bank Column)

Date Particulars Amount Date Particulars Amount

To Sh. Application A/c

To Sh. Allotment A/c

To 1st Call

To Sh. Capital

25,00,000

7,99,300

7,99,200

3,600

By Sh. Application

By Bal. c/d

1,00,000

40,02,100

41,02,100 41,02,100

23. (d) 63,500 1 mark

24. Current Liabilities Rs.40,000 i.e. 60,000/1.5 1 mark

25. (b) Inventories 1 mark

26. (d) Rent received by a Real Estate company 1 mark

27. Contingent Liability 1 mark

28. (d) Interest Coverage Ratio 1 mark




29. (a) Rs.2,00,000 1 mark

30. Long-term Borrowings = 80,000 x 2.5 = 2,00,000 ½ mark

Equity Share Capital = 2,00,000 x 40/100 = 80,000 ½ mark

Long-term Provision = 80,000 x 50/100 = 40,000 ½ mark

Shareholders’ Funds = Equity Share Capital 80,000 + General Reserve 80,000 – Loss

40,000 = 1,20,000 ½ mark

Debt = Long-term Borrowings 2,00,000 + Long-term Provision 40,000 = 2,40,000

½ mark

Debt Equity Ratio = Debt/Equity

Debt Equity Ratio = 2,40,000/1,20,000 = 2:1 ½ mark

OR

Interest Coverage Ratio = Profit before Interest and Tax/Interest on Debentures

= 4,40,000/2,40,000 = 1.83

31. Common Size Balance Sheet 4 marks


31.03.2020

31.03.2019

% 2020

% 2019

1. 2. 3. 4 5 6

I. Equity and Liabilities


(a) Share capital


2. Non-Current Liabilities

Long term borrowings


Trade Payables

40,00,000

4,00,000 10,00,000 6,00,000

40,00,000

1,00,000 7,50,000 1,50,000

66.67

6.67

16.67

10

80

2

15

3

TOTAL 60,00,000 50,00,000 100 100 II. ASSETS

(1) Non-Current Assets

(a) Fixed Assets

(i) Tangible assets

(ii) Intangible assets

(2) CURRENT ASSETS

(a) Inventories

(b) Cash and cash equivalents

40,00,000

10,00,000 6,00,000

4,00,000

35,00,000

10,00,000 4,00,000

1,00,000

66.67 16.67

10 6.67

70 20

8 2

TOTAL 60,00,000 50,00,000 100 100




OR

Comparative Statement of Profit & Loss

Particulars Note

No.

31.3.2019 31.3.2020 Absolute

Change

%

Change

I. Revenue from Operations

II. Other Income

4,50,000

1,35,000

6,00,000

1,20,000

1,50,000

(15,000)

33.33

(11.11)

III. Total Revenue (I+II)

IV. Expenses

5,85,000

2,25,000

7,20,000

3,60,000

1,35,000

1,35,000

23.07

60.00

V. Profit before Tax

VI. Tax

3,60,000

1,44,000

3,60,000

1,44,000

Nil

Nil

Nil

Nil

VII. Profit after Tax (V-VI) 2,16,000 2,16,000 Nil Nil

32. Cash Flow Statement 6 marks

Particulars Detail Amount A. Cash Flow from Operating Activities Profit before tax 10,00,000 + Loss 2,50,000 + 2,50,000 Provision for tax Add: Depreciation Trademarks written off Interest on Cash Credit Interest on Debentures

15,00,000 4,95,000

50,000 10,000

3,00,000

16,95,000

(20,35,000)

4,40,000

Operating Profit before working capital changes Less: Increase in Inventories

23,55,000 (3,10,000)

Cash Generated from Operations Less: Tax paid

20,45,000 (3,50,000)

Cash Flow from Operating Activities B. Cash Flow from Investing Activities Purchase of Machinery Purchase of Non-current investment Cash used in Investing Activities C. Cash Flow from Financing Activities Issue of Shares Redemption of Debentures Interest on Debentures Interest on Cash Credit Increase in Cash Credit Cash Flow from Financing Activities

(19,10,000) (1,25,000)

5,00,000 (2,50,000) (3,00,000)

(10,000) 5,00,000

A+B+C Opening Cash & Cash Equivalents 3,00,000+ 3,00,000

1,00,000 6,00,000

Closing Cash & Cash Equivalents 2,50,000 + 4,50,000 7,00,000

Provision for Tax Account





To Bank A/c (tax paid)

To Bal. c/d

3,50,000

3,50,000

By Bal. b/d

By Statement of P/L

(Provision Bal. Fig.)

4,50,000

2,50,000

7,00,000 7,00,000

ULTIMATE BOOK OF ACCOUNTANY

IS

AVAILABLE ON AMAZON



Marking Scheme Sample Paper - 3

1. (b) Interest on Drawings Rs.3,000 1 mark

Working Note: 60,000 x 10/100 x 6/12

2. (b) 25,000 1 mark

Working Note: Total Capital 2,00,000 x 4/1 = 8,00,000

Combined Capital = 2,00,000 + 3,00,000 + 2,00,000 = 7,00,000

Firm’s Goodwill = 8,00,000 – 7,00,000 = 1,00,000

His share = 1,00,000 x ¼ = 25,000

3. (d) Maintaining working capital of the company 1 mark 4. (c) Rs. 24,000 1 mark Working Note: 96,000 x 100/80 = 1,20,000 Total Purchase Cash Purchase = 1,20,000 x 20/100 = 24,000 5. (c) Loan by Vinod Dr. 30,000 To Bank A/c 30,000 1 mark Note: Vinod’s Capital Account is showing positive balance. Hence, his loan will be paid first before the payment of his capital. 6. (d) 7,400 1 mark Working Note: 9,47,500 – 22,500 = 9,25,000 9,25,000/125 = 7,400 7. (b) 20,000 1 mark Note: 5,00,000 x 4/100 = 20,000 Realisation expenses are paid and borne by him so no entry. 8. (a) Surinder’s Capital A/c Debit Rs.10,000 1 mark 9. Average Profit = 40,000 + 60,000 + 35,000 – 15,000 = 1,20,000/4 = 30,000 His share of profit = 30,000 – 20% = 24,000 24,000 x 2/5 = 9,600 1 mark 10. (c) Only Gainer Partners 1 mark 11. (a) 5:3 1 mark Note: old share + gain share 12. (b) 72,000 1 mark Note: 40,000 share of loss + 32,000 deficiency amount 13. (d) Interest on Drawings is not calculated in case of loss 1 mark



14. Opening balance of Match Fund …………………………….…… Rs.4,24,000 Add: Sale of Match Tickets …………………………………..………Rs.4,73,000 Add: Donation for Match Fund …………………………..……….. Rs.1,00,000 Add: Deficiency on Match Fund ……………………………………Rs.3,000 Total Match Expenses 10,00,000 3 marks OR Balance Sheet as at 31st March 2020 (Extract only) Liabilities Amount Assets Amount Capital Fund 8,00,000 Add: Transfer From Building Fund 9,00,000 Building Fund 5,00,000 Add: Donation 4,00,000 Total 9,00,000 Less: Transfer to Capital fund 9,00,000

17,00,000 Nil

Building 10,00,000

15. Vinod’s Capital A/c Dr. 30,000 To Kamlesh’s Capital A/c 30,000 Analytical Table

Particulars Vinod Kamlesh Wrongly taken: Interest on capital Profit

62,000 1,68,000

58,000 1,12,000

Total 2,30,000 1,70,000 Correct Distribution of Profit in 1:1 2,00,000 2,00,000 30,000 Dr. 30,000 Cr. Working Note: Total Closing Capital of Vinod and Kamlesh Add: Drawings Less: Profit

15,00,000 1,00,000 (4,00,000)

Total Capital at the beginning of the year 12,00,000 Interest on Capital = 10% of 12,00,000 Divisible Profit 4,00,000 – 1,20,000 = 2,80,000 2,80,000 was divided in 3:2 ratio

1,20,000 2,80,000

Calculation of opening capital and interest on capital (Detail explanation)

Particulars Vinod Kamlesh Closing Capital Add: Drawings Less: Profit

8,00,000 50,000 (1,68,000)

7,00,000 50,000 (1,12,000)

Total 6,82,000 6,38,000



Less: Interest on capital (Vinod 6,82,000 x 10/110) (Kamlesh 6,38,000 x 10/110)

(62,000) (58,000)

Opening capital 6,20,000 5,80,000 (1+1+1+1)

OR

Profit and Loss Appropriation Account

Particulars Amount Particulars Amount To TK’s Salary To Interest on Capital AK 50,000 TK 75,000 To AK’s Commission To Profit Transferred to: AK 1,26,365 TK 1,26,365

12,000

1,25,000 16,120

2,52,730

By Profit b/d 4,00,000 + 12,000 – 9,000 By Interest in Drawings AK 1,200 TK 1,650

4,03,000

2,850

4,05,850 4,05,850 Note: AK’s Commission 4,03,000 x 4/100 = 16,120


Particulars AK TK Particulars AK TK To Drawings To Int. on Drawings To Bal. c/d

30,000 1,200 6,61,285

60,000 1,650 9,01,715

By Plant & Mach. By Furniture By Bank By Interest on Cap. By Salary By Commission By P/L App. A/c

5,00,000 50,000 16,120 1,26,365

50,000 7,00,000 75,000 12,000 1,26,365

6,92,285 9,63,365 6,92,485 9,63,365

16. Journal

Date Particulars L.F. Debit (Amt.)

Credit (Amt.)

Share Capital A/c Dr. To Share Forfeiture A/c To Calls in Arrears A/c (Being 5,000 shares forfeited for non-payment of Rs.15,000) Bank A/c Dr. Share Forfeiture A/c Dr. To Share Capital A/c (Being 125 forfeited shares reissued @9 per share)

50,000

1,125 125

35,000 15,000

1,250



Share Forfeiture A/c Dr. To Capital Reserve (Being Gain on reissue transferred)

750

750

1 ½ + 1 ½ + 1

17 Journal


Credit (Amt.)

(i) (ii) (iii) (iv)

Realisation A/c Dr. To Sundry Assets A/c (Being assets transferred to Realisation A/c) Vinod’s Capital A/c Dr. To Realisation A/c (Being asset taken over by partner) Bank A/c Dr. To Realisation A/c (Being assets sold) No Entry Note: No entry for obsolete assets and assets handed over to creditors

3,00,000

1,20,000

78,000

--

3,00,000

1,20,000

78,000

--

1 mark each = 4

18. Profit and Loss Appropriation Account

Particulars Amount Particulars Amount To Profit Transferred to: Vinod Singh

10,000 20,000

By Profit b/d By Int. on drawings: Vinod

29,400

600 30,000 30,000 Note: Total amount due to Vinod (interest on capital) = 15,000

Total amount due to Singh (Interest on capital 12,000 + Salary 18,000) = 30,000

But profit is only 30,000 (so it will be divided in the ratio of appropriations i.e. 15,000 : 30,000 OR 1:2


Particulars Vinod Singh Particulars Vinod Singh To Drawings To Int. on Drawings To Balance c/d

40,000 600

4,69,400

4,20,000

By Bank A/c By P/L App. A/c

5,00,000 10,000

4,00,000 20,000

5,10,000 4,20,000 5,10,000 4,20,000



19. Income and Expenditure Account

Expenditure Amount Income Amount To Stationery Consumed To Salaries To Drama Expenses To Rent To Surplus (Balancing Figure)

20,000 90,000 40,000 15,000 74,500

By Interest accrued on Defence Bonds By Subscription By Sale of old newspapers By Sale of Grass By Sale of Drama Ticket

3,500 2,00,000

2,000 4,000

30,000 2,39,500 2,39,500

Balance Sheet (Closing)

Liabilities Amount Assets Amount Legacy Creditors for Stationery Sports Fund 70,000 Add: Donation 50,000 Add: Interest received 4,000 Add: Interest Accrued 3,000 Less: Sports Exp. (50,000) Capital Fund: Opening Balance 48,500 Add: Surplus 74,500 Add: Life Membership Fee 70,000

1,00,000 9,500

77,000

1,93,000

Furniture Billiard Table Books Defence Bonds Interest Accrued Stock of Stationery Sports Fund Investment Interest Accrued on Fund Cash in hand Bank Balance

1,00,000 70,000 45,000 55,000

3,500 18,000 70,000

3,000 5,000

10,000

3,79,500 3,79,500

Balance Sheet (Opening)

Liabilities Amount Assets Amount To Creditors for Stationery To Sports Fund To Capital Fund (Bal. Fig.)

6,500 70,000 48,500

Cash in hand Bank Balance Stock of Stationery Sports Fund Investment

19,000 21,000 15,000 70,000

1,25,000 1,25,000

20. Journal


Credit (Amt.)

1 April

Bank A/c Dr. To Deb. App. & Allot. A/c (Being application money received) Deb. App. & Allot. A/c Dr. Loss on issue of Deb. A/c Dr. To 9% Debentures A/c To Premium on Redemption of Deb. A/c (Being debentures issued at discount, redeemable at premium)

75,20,000

75,20,000 8,80,000

75,20,000

80,00,000 4,00,000



30 Sept. 31 March 2020

Debentures Interest A/c Dr. To Debenture holders A/c To TDS Payable A/c (Being interest payable) Debenture holders A/c Dr. TDS Payable A/c Dr. To Bank A/c (Being interest paid) Debenture Interest A/c Dr. To Debenture holders A/c To TDS Payable A/c (Being interest payable) Debenture holders A/c Dr. TDS Payable A/c Dr. To Bank A/c (Being interest paid) Statement of P/L Dr. To Debenture Interest (Being interest transferred to Statement of P/L) Statement of P/L Dr. To Loss on issue of Debentures A/c (Being discount on issue of debentures written off)

3,60,000

3,24,000 36,000

3,60,000

3,24,000 36,000

7,20,000

8,80,000

3,24,000 36,000

3,60,000

3,24,000 36,000

3,60,000

7,20,000

8,80,000

OR


Credit (Amt.)

Machinery A/c Dr. To Fukrey Ltd. (Being machinery purchased 65,000 + 90,000 + 48,000) Fukrey Ltd. Dr. To Equity Share Capital A/c To Securities Premium Reserve (Being issue of 5000 Equity Shares) Fukrey Ltd. Dr. Discount on issue of Deb. A/c Dr. To 8% Debentures A/c (Being 1000 debentures issued)

2,03,000

65,000

90,000 10,000

2,03,000

50,000 15,000

1,00,000



Fukrey Ltd. Dr. To Bills Payable A/c (Being balance payment adjusted) Securities Premium Reserve Dr. To Discount on issue of Deb. A/c (Being loss written off)

48,000

10,000

48,000

10,000

21. Revaluation Account

Particulars Amount Particulars Amount To Building To Profit transferred: Vinod 12,000 Kumar 8,000

1,00,000

20,000

By Stock By Delivery Van

50,000 70,000

1,20,000 1,20,000


Particulars Vinod Kumar Yuvraj Particulars Vinod Kumar Yuvraj To Goodwill To Bal.c/d

30,000 7,32,000

20,000 3,88,000

5,00,000

By Bal. b/d By Bank By Rev. A/c By Reserve By Premium By Yuvraj’s Current A/c

6,00,000 12,000 30,000 72,000 48,000

3,00,000 8,000 20,000 48,000 32,000

5,00,000

7,62,000 4,08,000 5,00,000 7,62,000 4,08,000 5,00,000

OR

Journal


Credit (Amt.)

MK’s Capital A/c Dr. AK’s Capital A/c Dr. JK’s Capital A/c Dr. To Goodwill A/c (Being goodwill written off) AK’s Capital A/c Dr. JK’s Capital A/c Dr. To MK’s Capital A/c (Being MK compensated for goodwill share) General Reserve Dr. To Prov. For doubtful debts To MK’s Capital A/c

7,200 2,400 2,400

6,000 6,000

6,000

12,000

12,000

1,500 2,700



To AK’s Capital A/c To JK’s Capital A/c (Being General reserve adjusted) Investment A/c Dr. Creditors A/c Dr. To Revaluation A/c (Being gain on revaluation) Revaluation A/c Dr. To MK’s Capital A/c To AK’s Capital A/c To JK’s Capital A/c (Being gain on revaluation transferred to partners) AK’s Capital A/c Dr. JK’s Capital A/c Dr. To MK’s Capital A/c (Being MK compensated for his share in IFR and GR) MK’s Capital A/c Dr. To Investment A/c (Being investment taken over by MK) MK’s Capital A/c Dr. To Bank A/c To MK’s Loan A/c (Being MK’s Capital A/c Closed)

5,000 3,000

8,000

2,700 2,700

40,000

47,700

900 900

8,000

4,800 1,600 1,600

5,400

40,000

20,000 27,700

22. Journal


Credit (Amt.)

Bank A/c Dr. To Sh. Application A/c (Being Application money received) Sh. Application A/c Dr. To Sh. Capital A/c To Securities premium Reserve To Sh. Allotment A/c To Bank A/c (Being Application money adjusted) Sh. Allotment A/c Dr.

10,50,000

10,50,000

9,00,000

10,50,000

6,00,000 3,00,000 75,000 75,000



To Sh. Capital A/c (Being allotment due) Bank A/c Dr. To Sh. Allotment A/c (Being allotment received) Sh. First & Final Call A/c Dr. To Sh. Capital A/c To Securities Premium Reserve (Being call money due) Bank A/c Dr. To Sh. First & Final Call (Being call money due) Sh. Capital A/c Dr. Securities premium Reserve Dr. To Sh. Forfeiture A/c To Sh. Allotment A/c To Sh. First & Final Call (Being shares forfeited by the company) Bank A/c Dr. To Sh. Capital A/c To Securities Premium Reserve (Being reissued shares) Sh. Forfeiture A/c Dr. To Capital Reserve (Being gain on reissue transferred to capital reserve 7,500/15,000 x 33,750)

7,83,750

18,00,000

17,10,000

1,50,000 15,000

82,500

16,875

9,00,000

7,83,750

15,00,000 3,00,000

17,10,000

33,750 41,250 90,000

75,000 7,500

16,875

OR

Journal


Credit (Amt.)

Bank A/c Dr. To Sh. Application & Allot. A/c (Being Application money received) Sh. Application & Allot. A/c Dr. To Sh. Capital A/c To Securities premium Reserve To Sh. Calls in Advance A/c (Being Application money adjusted) Sh. First Call A/c Dr.

60,00,000

60,00,000

40,00,000

60,00,000

30,00,000 10,00,000 20,00,000



To Sh. Capital A/c (Being first call due) Bank A/c Dr. Calls in Arrears A/c Dr. Calls in Advance A/c Dr. To Sh. First Call A/c (Being first call received) Sh. Second & Final Call A/c Dr. To Sh. Capital A/c (Being final call money due) Bank A/c Dr. Calls in Arrears A/c Dr. To Sh. Second & Final Call (Being call money due) Sh. Capital A/c Dr. To Sh. Forfeiture A/c To Sh. Calls-in Arrears A/c (Being shares forfeited by the company) Bank A/c Dr. Share Forfeiture A/c Dr. To Sh. Capital A/c (Being reissued shares) Sh. Forfeiture A/c Dr. To Capital Reserve (Being gain on reissue transferred to capital reserve)

19,92,000 8,000

20,00,000

30,00,000

29,88,000 12,000

40,000

28,800 7,200

10,800

40,00,000

40,00,000

30,00,000

30,00,000

20,000 20,000

36,000

10,800

23. Financing Activities

24. (d) Capital work in progress 25. (d) Non-current Assets

26. No change in current ratio because no effect on current assets and current liabilities. Only one current asset is converted into another current asset.

27. (d) Other Current Assets

28. (b) Outflow

29. (b) A Limitation

30. Total Assets to Debt ratio = Total Assets / Debt



Total Assets = Shareholders’ Funds +Total Debt

= 7,50,000 + 19,50,000 = 27,00,000

Debt = Total Debt – Current Liabilities

19,50,000 - 4,50,000 = 15,00,000

Total Assets to Debt ratio = 27,00,000/ 15,00,000 = 1.8: 1

OR

Current Assets = 3,00,000 + 20,000 = 3,20,000

20,000 is added in current assets as increase in stock

Current Liabilities = 1,40,000 + 20,000 = 1,60,000

20,000 is added in current liability as increase in creditors

Current Ratio = Current Assets/Current Liabilities

= 3,20,000/1,60,000 = 2:1

31. Comparative Statement of Profit & Loss 4 Marks


31.03.2019

` 31.03.2020

` Absolute Change


`

Percentage change


1 2 3 4 5

A B (B-A)=C %

i. Revenue from Operations 20,00,000 30,00,000 10,00,000 50 ii. Other Income 4,00,000 4,50,000 50,000 12.5 iii. Total Revenue (i+ii) 24,00,000 34,50,000 10,50,000 43.75 iv. Expenses 10,00,000 18,00,000 8,00,000 80 v. Profit before Tax (iii-iv) Less: Tax

14,00,000 4,20,000

16,50,000 4,95,000

2,50,000 75,000

17.85 17.85

Profit after tax 9,80,000 11,55,000 1,75,000 17.85

OR Comparative Statement of Profit & Loss


31.03.2019 `

31.03.2020 `

Absolute Change


`

Percentage change


1 2 3 4 5

A B (B-A)=C %

i. Revenue from Operations 5,00,000 10,00,000 5,00,000 100 ii. Expenses: (a) Purchase of Stock in Trade (b) Change in Inventories (c) Other Expense

2,00,000 50,000 50,000

6,50,000 60,000 71,000

4,50,000 10,000 21,000

225 20 42

Total Expenses 3,00,000 7,81,000 4,81,000 160.33

iii. Profit before Tax (i-ii) Less: Tax

2,00,000 60,000

2,19,000 87,600

19,000 27,600

9.50 46.00 Profit after tax 1,40,000 1,31,400 (8,600) (6.14)



32. Cash Flow Statement

Particulars Details (Rs.) Amount (Rs.)

A. Cash Flow From Operating Activities Net Profit before Tax (see note) Adjustment for Non-cash and Non-operating items: Less: Gain on Sale Add: Interest on Debentures Add: Interest on Bank loan Add: Patents amortised Operating Profit before Working Capital Changes Less : Increase in Inventories Less : Increase in Trade Receivables Add : Increase in Trade Payables Cash Flow from Operating Activities Less: Tax Cash from operating activities B. Cash Flow From Investing Activities Purchase of Plant & Machinery Non-current investment sold Non-current investment purchased Cash used in investing activities C. Cash Flow From Financing Activities Debentures Securities Premium Reserve Bank loan Interest on Debentures Interest on Bank Loan Dividend Cash used in Financing Activities D. Net increase in cash & cash equivalents Add : Cash & Cash equivalents in the beginning E. Cash & Cash Equivalents at the end

4,98,000 (50,000) 20,000 6,400 30,000 5,04,400 (75,000) (1,40,000) 50,000 3,39,400 70,000 (2,00,000) 1,50,000 (1,50,000) 50,000 10,000 (40,000) (20,000) (6,400) (18,000)

2,69,400 (2,00,000) (24,400) 45,000 60,000

1,05,000

Calculation of Profit = 2,00,000 + 60,000 loss + 1,20,000 Reserve + 18,000 Dividend +

1,00,000 Tax

Working Note: Non-current Investment


To Balance b/d To Gain on sale To Bank (Purchase)

2,00,000 50,000 1,50,000

By Bank A/c By Balance c/d

1,50,000 2,50,000

4,00,000 4,00,000

Provision for Tax Account




To Bank A/c (Tax paid bal. fig.) To Bal. c/d

70,000 80,000

By Balance b/d By Statement of P/L (Provision)

50,000 1,00,000

1,50,000 1,50,000

Documents

Sample Paper -1 By Dr. Vinod Kumar - S. Dinesh & Co