Solutions to Sample Paper 8 1, The accountant is wrong as every partner has the right to inspect the books of accounts and have a copy of it 2. A person can be admitted as a new partner: (a) if it isso agreed in the partnership deed; or (6) if.all partners agree for the admission. 3. 29:16 4. Subscribed but not fully paid up. 5. () Outof Profit (ii) Out of Capital 6. False 7. (©) % 72,000 8. (b) 15,000 9. True 10, Registrar of Companies. L1, 60% of the Debtors = 60% of 1,50,000 = % 90,000. ‘They realised 90%, ie., & 81,000, Remaining % 60,000 realised % 48,000 less 10% commission & 4,800. = Total amount realised is & 1,24,200 (® 81,000 + & 43,200) 12. (d) 800 13. (a) transferred to Realisation A/c as other assets 4. Journal Date Particulars LE] p@® | o® Profit and Loss Ale Dr. 60,000 ‘To Revaluation Loss Ale 30,000 ‘To Karan’s Capital Ale 15,000 To Gunisha’s Capital Ale 10,000 ‘To Jagriti’s Capital Ale 5,000 (Being profit and loss account and revaluation loss transferred to partners’ capital account) Gunisha’s Capital Ale Dr. 40,000 Jagrit’s Capital Ale Dr. 20,000 ‘To Karan’s Capital Ale 60,000 (Being the adjusting entry passed for goodwill) Karan’s Capital Ale Dr. 175,000 ‘To Cash Ale 1,75,000 (Being payment made) Working Notes: Amount payable to Karan = 1,00,000 + 30,000 (profit) ~ 15,000 (revaluation loss) = & 1,15,000 Karan's share of Goodwill = & 1,75,000 ~ & 1,15,000 = € 60,000 Accountaney—12. aOr In the books of Ramesh, Krishna and Rahim Journal Date Particulars Le| De® | c.® Cash Ale Dr. 60,000 ‘To Tanya's Capital Ale 50,000 ‘To Premium for Goodwill Alc 10,000 (Being Capital and goodwill brought in by Tanya) Premium for Goodwill A/c Dr. 10,000 ‘Tanya's Capital Ale Dr. 5,000 ‘To Krishna’s Capital Ave 7,500 ‘To Rahim’s Capital Ale 7,500 (Being the credit for goodwill given to sacrificing partners) Krishna’s Capital Ale Dr. Rahim’s Capital Ale Dr. 2,500 ‘To Cash Ale 5,000 (Being half of the goodwill brought in cash withdrawn by the partners) Working Notes: Sacrificing ratio of Krishna : Rahim dl 15. Calculation of amount to be credited to Income and Expenditure A/c for the year ended 31st March 2019: Particulars con “Amount of subscription received during the year 3,00,000 Less: Subscription received for previous year (30,000) Ada; Subscription outstanding for current year 15,000 Add: Received in advance as on 31-03-2018 12,000 Less: Received in advance as on 31-03-2019 (25,000) Amount of subscription to be credited to Income and Expenditure A/c [__2,72,000 | Note: Subscription in arrears as on 31st March 2019 % 35,000 includes outstanding subscription of € 20,000 for last year. Thus, subscription in arrears for this year is & 15,000, ie,, & 35,000 — % 20,000. Accountancy —12. (216. Balance Sheet of Chetan Ltd. as at 31% March, 2019 Particulars Note’ ‘Current Year Previous Year No. z z EQUITY AND LIABILITIES Sharcholder’s Funds: Share Capital 1 35,00,000 Non-Current Liabilities Long-term Borrowings 2 10,00,000 5,00,000, ASSETS Non-Current Assets Fixed Assets, 3 10,00,000 Current Assets Cash and Cash Equivalents 4 35,00,000 5,00,000 Notes to Accounts: Note! Particulars: No. © 1. | Share Capital Authorised Capital: 50,000 Equity shares of & 100 each Issued Capital 35,000 Equity shares of @ 100 each Subscribed and fully paid capital: 35,000 Equity shares of % 100 each fully called up (10,000 Equity shares issued to vendor against purchase of machinery) Long-term Borrowings ‘Term-loan from bank (Secured by the issue of 8% Debentures of € 100 each) 3. | Fixed Assets (Being required DRR created) Accountancy —12. 8) Machinery 4, | Cash and Cash Equivalents Cash at Bank Or Journ: Date Particulars Le] pe@ | cw 31 | Statement of Profit and Loss Dr 50,000 March | To Debenture Redemption Reserve A/e 50,00017. Debenture Redemption Investment Ale 30,000 3” April | To Bank Ale 30,000 2019 | (Being investment made in specified seourities) 30 June | Bank Ale Dr. 30.000 2019 | To Debenture Redemption Investment Ale 30,000 (Being debenture redemption investment encashed) 9% Debentures Ale Dr 2,00,000 Premium on Redemption of Debentures Ale Dr 20,000 To Debenturcholders Ale 2.200000 (Being amount due to debenturcholders) Debenturehokders Ale Dr. 2,20,000 ‘To Bank Ale (Being amount paid to debenturcholders) Debenture Redemption Reserve Ale Dr. To General Reserve Ae 50,000 (Being DRR transferred to general reserve) In the books of ABC Ltd. Journal Date Particulars LE] pe@® | @@ 2019 | Bank Ale Dr. 4,60,000 April || To Debenture Application & Allotment Ak 460,000 (Being the amount received for debentures) Debenture application & allotment Ale Dr 4,60,000 Discount on issue of debentures Ale Dr. 40,000 ‘To 10% Debentures Ale 00,000 (Being the amount received on application transferred to debenture ale and loss to discount A/c) Sep 30 | Debenture interest Ale Dr. ‘To Debentureholders Ale 22,500 To TDS Ae 2500 (Being the debenture interest made due) Debenturcholders Ale Dr. TDS Ale Dr To Bank Ale 25,000 (Being the amount of interest paid to debenture holders and TDS to government) Accountancy —12. a2020. | Debenture interest Ale Mar 31] To Debentureholders Ale 22,500 To TDS Alc 2,500 (Being the debenture interest made due) Debenturehokders A‘e Dr. 22,500 TDS Ale Dr. 2,500 To Bank Ale 25,000 (Being the amount of interest paid to debenture holders and TDS to government) Statement of Profit and Loss Ae Dr. 50,000 ‘To Debenture Interest Ale 50,000 (Being the debenture interest transferred to statement of profit and loss) Profit and Loss Appropriation A/e for the year ending 31 March, 2019 Cr Particulars z Particulars x ‘To Interest on Capital @ 6% pa By Profit & Loss Ale 169,150 x 12,000 Less: Interest on X's Loan (1800) | 1,67,380 Y 8,400 Zz 1oso0 | 31,200 To X’s Commission Ale 8,150 To Salary Ave Y @F 2,000 pm. 24,000 Z@ 82500 p.m. 22500 | 46,500 ‘Ta profit transferred to Capital Ale X25 32,600 25 32,600 Zs 16,300 167,350 Dr. Partners’ Capital A/c ce Particulars xy ]z Particulars x ly ]z ® | @ | @ @ |e | @ fio Balance eid 2,82,780|2,05,000]2,89,600|By Cash 2,00,000] 140,000| 20,000] BBy Interest on capital 12,000] 8.400] 10,800] By Salary -| 24,000} 22,500] By Commission 8,150] 4 | By Profit & Loss Appropriation A/c | 32,600] 32,600| 16,300] 2,52,750|2,05,000|2,89,600, 2,52,750|2,05,000]2,89,600| Accountaney—12. 6)1. Income and Expenditure A/e Dr. Jor the year ended 31 March, 2019 Cr Expenditure © Income ® To Salary to Coaches 1.25,000 'By Subseription 135,850 Add: Outstanding Salary —_25,000 | 1,50,000| Add: Outstanding for current year $2,000 ‘To Upkeep of Lawns 3,000] Less: Outstanding for previous year (28,000) | 1,59,850 ‘To Electricity Charges 13,000 | By Entrance Fee 24,800 To Telephone Expenses 2,400 | By Locker Rent 1,350 To Printing and Stationery 10,000 | By Sale of Old Sports Material 300 ‘To Loss on Sale of Sports Equipments 200 | By Legacy 4,500 To Depreciation By Deficit (.e. excess of expenditure over income) | 38,500 Building 28,500 Furniture 16.400 Sports Equipments 5,800 | 50,700 229,300 229,300 Balance Sheet as at 31st March 2018 Liabilities x Assets z Capital Fund (Balancing figure) 8,06,350 | Building 5,70,000, Furniture 1,20,000 Sports Equipments 0,000 Outstanding Subscription 28,000 Cash at Bank 28,350 8,06,350 §,06.350 Balance Sheet as at 31st March 2019 Liabilities z ‘Assets = Capital Fund 506,350 Building 3,70,000 Less : Deficit (38500) | 767,850] Less : Depreciation @ S% (28,500) ‘Tournament Fund 84,000 Furniture 1.20.00 Less: Tournament Expenses (42,000) | 42,000] Add : Purchases 44,000 Less : Depreciation @ 10% (16,400) | 1,47,600 Life Membership Fee 14,000 Outstanding Salary of Coaches 25,000 | Sports Equipments Less : Sold off Less : Depreciation @ 10 52,200 Outstanding Subscription 52,000 Cash at Bank |_s5.s50| SAS.850 548,850 Accountancy 12. 6)20. Dr Revaluation Ale Paniculars z Particulars z ‘To Bad Debts Ale 3,000 | By Machinery Ale 8,000 ‘To Provision for Bad Debts Alc 1,800 | By Loss transferred to Capital Ae ‘To Furniture Ale 3,000] Anil 2250 To Stock Ae 5.000] — Suni 1500 Keshav 730 4500 12500 Dr. Partners’ Capital Ale cr Particulars | Anil | Sunil | Keshav Particulars nil] Sunit [Keshav el|el|e o|el|e ‘To Revaluation Ae | 2.250] 1.500] 750] By Balance bia 45,000 | 30,000 | 40,000 ToGoodwill Ae | 15,000] 10,000] 5,000] By Workmen Compensation 2,100| 1,400] 700 ‘To Sunil's Capital Ac 6,000| Reserve Ale To Current Ale 1.290 12,210 By Investment Fluctuation Fund A’e | 3,000] 2,000 1,000 ToBatance cd | 4,350] 26610 | 17,740 By Keshav’s Capital Ale 6,000 By Anil's Current Ale 13,500 1,600 | 39.400 41,700 61,600 39.400 | 41,700 Balance Sheet abies t ‘Asis zt Capital Ales: Machinery 50,000 Anil 44.350 Investments 20.000 Sunil 26,610 Furniture 5,000 Keshav 88,700 | Debtors 30,000 \Workmen Compensation Claim 15,800] Less: Provision for Bad debts (1500) | 28,500 Sundry Creditors 42,00 | Stock 15,000 Sunils Current Ale 1,290 | Bank 28,000 Keshav's Current Ale 12210] nits Current Ae 13,500 7,60,000 7,60,000 Working Notes: Geaining/Sacrificng ratio: 30-30 Anil . @ 20-18 _ 2 go 8 = 2. Sacrtie (gj) Sain Accountancy —12. ”Calculation of closing capital: Adjusted Capital of Anil Adjusted Capital of Sunil Adjusted Capi Total Capital of the Firm al of Keshav z 30,850 27,900 29,950 88,700 of Anil, Sunil and Keshav in the ratio 5 : 3 : 2 is & 44,350, € 26,610 and & 17,740 respectively. Or Dr. Realisation Ale Cr Particulars z Particulars z To Sundry Assets By Provision for doubtful debts 3,000 Investments 120,000 By Investment Fluctuation Fund 90,000 Fixed Assets 180,000 By Trade payables 35,000 Stock 15,000 By Gurleen’s brother's loan 18,000 Debtor 100 By Gurleen’s Capital Ale ‘To Gurleen’s Capital Ale (Gurleen’s brother's A/c) Fixed Assets 57,600 To Parth’s Capital A/c (realisation expenses) 1,000] Investments 57,000] 1,14,600 To Bank (Trade Payables) 16,625 | By Bank( debtors) 13.500 To Profit transferred to Capital Ales By Parth’s Capital Ale Parth 29,030 Fixed Assets 1,08,000 Gurleen 43,545 | 72,575] Investments 7,000 | 1,65,000 439.100 459,100 Dr. Partners’ Capital A/e Cr Particulars Parth | Gurleen Particulars Parth | Gurleen To Realisation Ale 1,65,000 | 1,14,600 | By Balance bid 1,17,000 | 7,20,000 ‘To Bank Ale 67,845 | By Realisation Alc (Profit) 79,030] 43,545 By Realisation A‘c 1,000] 18,900 By Bank Ale 17,970 1,65,000 | 1,82,485 1,653,000 | 1,82,445 Dr. Bank Ale Cr Particulars z Particulars z To Balance b/d 53,000 | By Realisation Ale 16,625 To Realisation Ale 13,500 | By Gurleen’s Capital Ale 67.845 ‘To Parth’s Capital Ale 17,970 84470 3470 Accountancy —12. (6)21. Dr. ‘To Karizma’s Executor Ale 1,88,200 | By Revaluation Ale Karizma's Capital Ale Cr Particulars z Particulars z "To Karizma’s Loan Ae By Balance b/d 7,00,000 ‘To Interest on Loan Ale By General Reserve 80,000 By Priya’s Capital Ac 33,600 By Raj’ Capital Ale 16,800 AG By P&L Suspense Ale (42,0002 «5 5,600 2,39,200, a 239,200 Dr Karizma's Executor's Loan Alc cr. Date Particulars z Date Particalars z 2019 March 31 [To Balance ed 7,92,000] 2018 Aug By Karizma’s Executor Are | 180,000] 2019 Mar31_ {py interest Ave 792,00) 2019 Aug 1 | Bank A/c (90.000 + 18,000) 1.08000] 2019 April 1 |By Balance bia 1,92,000 2020 March 31 [To Balance cid 96,000] 2019 Aug [By Interest Ai 6,000] 2020 March 31 [By Interest Ale 6,000] 2204000 204,000 2020 Aug 1 |e Bank A‘e (90.000 + 9,000) | 99,000] 2020 April 1. |By Balance bia 46,000 2020 Aug [By Interest Ai 00 39,000 Note: Immediate payment should be made through Karizma’s executor A/c, which not prepared as not asked, Or Dr. Revaluation Ale cr Particulars z Particulars x To Machinery Ale 10.500 | By Land and Building 8,000 ‘To Outstanding Legal Charges 500 | By Creditors 1,000 By Loss transferred to Gopal 1,000 Rajnish 500 Lokesh 2,000 1,000 11,000 Accountaney—12. 9)22. Dr. Partners’ Capital A/e Cr Particulars Gopal | Rajnish | Lokesh Particulars Gopal | Rajnish | Lokesh To Rajnish’s Capital Ale | 3.500 By Balance b/d 40,000] 30,000] 25,000 To Revaluation Ale 1,000] 500 By Profit & Loss Ae 7500! 3,750) 3,750 To Bank Alc 9.250 By Gopal’s Capital Alc 3.500 To Rajnish’s Loan Ai 29,250 By Lokesh’s Capital Ale 1,750 To Balance cid 60,000 30,000 | By Bank Ave 17,000 3,500 64,500] 39,000] 32,250 64,500] 39,000] 32,250 Balance Sheet as at 31 March, 2019 Liabilities z Assets z Creditors 5,000 | Bank ‘Outstanding Legal Expenses 500 | Stock 14,700 Employee Provident Fund 000 | Debtors 23,900 Rajnish’s Loan Ale Less: Provision for doubiful debts _(600) | 23300 Capitals: Machinery Gopal 60,000 Land and Building 48,000 Lokesh 30,000 [1.29750] Working Notes: Dr. Bank Ave cr, Particulars z Particulars z ‘To Balance b/d 17,000 | By Creditors ‘To Gopal’ Capital A/c To Lokesh’s Capital Ale 17,000 | By Rajnish's Capital Afe 3,500 | By Balance eid 37,500 19.250 37,500 Super Profit = %21,S00~ 10% of @ 110,000 © 10,500 [Capital employed = € 95,000 + & 15,000 (P & L-AVe)] Goodwill = 2 x 10,500 = ¥ 21,000 Rajnish's share of Goodwill = 1/4 x 21,000 = & 5.250 In the books of Best Construction Ltd. Dr. Cash Ale cr Particulars z Particulars z To Share Application Ale 3,00,000 | By Balance eid 531.800 To Share Allotment Ale 92,000 ‘To Share First and Final Call Ae 1.10,400 To Share Capital Ale 18,000 To Share Capital Ale 11.400 531,800 531,800 Accountancy —12. (10)Journ: Date Particulars LE Dr a® ‘Share Application Ale Dr. ‘To Share Capital Ale ‘To Securities Premium Reserve Ae ‘To Share Allotment Alc (Being application money adjusted) ‘Share Allotment Alc Dr. ‘To Share Capital Ale ‘To Securities Premium Reserve Ale (Being the alloiment money due on 20,000 shares @ 6,82 premium) ‘Share First and Final Call Ale Dr, To Share Capital Ale ‘To Securities Premium Reserve Ale (Being the first and final call money due on 20,000 shares @ @ 4 per share, €2 premium) ‘Share Capital Ale Dr. Securities Premium Reserve A/c Dr. ‘To Share Allotment Ale ‘To Share first & Final Call Ale ‘To Share Forfeiture Ale (Being 1,600 shares forfeited for non-payment of allotment money) ‘Share Forfeiture Ale Dr. ‘To Share Capital Ale (Being loss on reissue of 1,000 shares) ‘Share Forfeiture Ale Dr. ‘To Share Capital Ave (Being loss on reissue of 600 shares) ‘Share Forfeiture Ale Dr. ‘To Capital Reserve Alc (20,800 ~ 2,600) (Balance of share forfeiture translerred to Capital Reserve A/c) 3,00,000 160,000 1,20,000 32,000 6400 2,000 600 18,200 2,00,000 40,000 60,000 120,000 ‘40,000 80,000 40,000 8,000 9,600 20,800 2,000 18,200 Working Notes: Shares applied = 2,000 Allotted = 2,000 x 4/5 = 1,600 Money due on allotment = 1,600 x 8 = 12,800 sed with application 400 x 12 = 4,800 Amount unpaid on allotment = % 8,000 Amount unpaid on First Call = & 9,600. Excess ree Or In the books of Bright Ltd. Dr. Cash Book Cr Particulars z Particulars "To Equity Share Application Ale 7,20,000 | By Balance e/a ‘To Equity Share Alloument Ale 7,204,000 ‘To Share First and Final call Ale 7,00,000 ‘To Equity Share Capital Ale 33,000 21,73,000 21,73,000 21,73,000 Accountancy —12. anyDr. Equity Share Capital Ve Cr Particulars z Particulars z "To Share forfeiture Ale 30,000 | By Equity Share Application Ale 360,000 ‘To Share First & final call Ale 20,000 | By Equity Share Allotment Alc 720,000 ‘To Balance cid 17,80,000 | By Equity Share First & Final eall Ale 720,000 By Bank Ale 30,000 18,30,000 18,30,000 Dr. Shares Forfeited Ale Cr Particulars z Particulars z To Capital Reserve Ale 18,000 | By Equity Share Capital Ae 30,000 ‘To Balance eid 12,000 30,000 30,000 2B. WO, >), (i)>@ 24. Depreciation = & 42,000 + & 12,000 + % 37,500 = € 91,500 Amortisation = & 12.400 + & 4,800 = € 17,200 Depreciation and Amoritisation Expenses = © 1,08,700 25. Employees and Trade Unions are interested in assessing profitability of the concern which help them in negotiating and entering into wage agreement with employers. 26, False, d 27. Issue of shares and dividend paid. 28, (b) Cash inflow of € 1,60,000 29, Vertical format and Schedule III (Part 1) 30. Current ratio = Current Assets/Current Liabilities 3 Current Liabilities (CL) = Current Assets (CA) Quick ratio = Quick Assets/Current Liabilities quick asset is reduced by the amount of cash paid for loose tools. = Current Assets ~ inventory/Current Liabilities 2 = (3 CL—40,000)/CL 2CL= 3CL-40,000 CL = 40,000 Current Assets = 3 x 40,000 = 1,20,000 Or Ror = Net Profit before Interest and Tax 199 Net Revenue from operations, 4, Net Profit before Tax = 120,000 x 7 2,00,000, Net Profit before interest and tax = 2,00,000 + 18,000 = 2,18,000 Share Capital + Reserves = 3,00,000 + 1,54,000 + 2,00,000= 6,54,000 218,000 654,000 Capital Employed \d Surplus + Long term Borrowings x 100 = 33.3 ROL Accountancy —12. (12)3. Comparative Balance Sheet of Deep Ltd. as at 31% March 2018 and 2019 Particulars Note] 31 March | 31% March Absolute | Percentage No. 2018 2019 Change ‘Change ® ® ® (%) 1. EQUITY AND LIABILITIES 1. Shareholders’ Funds: (@) Share Capital 28,00,000 25,00,000 (3,00,000) (0.7) (6) Reserve and Capital 7,50,000 8,00,000 50,000 6.66 2. Non-Current Liabilities: Long-term Borrowings, 8,00,000 12,00,000 4,00,000 0 3. Current ‘Trade Payables 10,00,000 7,50,000 (2,50,000) 25) 53,50,000 52,50.000| __(1,00,000) (1.86) HL. ASSETS 1, Non-Current Assets: Fixed Assets 30,00,000 36,00,000 6,00,000 20 2. Current Assets: Trade Receivables 12,00,000 8,00,000] —_(4,00,000) (333) Cash and Cash Equivalents 11,50,000 850,000] _(3,00,000) (26.08) 53,50,000 52,50,000| __,00,000) (1.86) Or (a) Fixed Assets (Tangible Assets (ii) Intangible Assets (ii) Capital Work-in-Progress (i) Intangible Assets under development Non-Current Investments Deferred Tax Assets (Net) Long-term Loans and Advances Other Non-Current Assets ©) Items Major head Sub head i (iv)_ Provision for warranties (@ Bank Drafts in hand ii) Share forfeiture amount Current Assets Current Liabilities Share Ca Cash and Cash Equivalents Other Current Liabilities Subscribed Capital Long-term Provisions Accountancy —12. (13)32. ‘Cash Flow Statement of GNK Industries Ltd. for the year ended 31 March, 2019 Sr.No. Particulars z z (A) | Cash Flow from Operating activities: 1. Net Profit before tax and Extraordinary items 3,44,000 Adjustments for non-cash and non-operating items: Add: Loss on sale of Fixed Assets 7,000 Depreciation on Fixed Tangible Assets 70,000| 77,000 Operating profit before change in working capital 421,000] Add: Inerease in current liabilities and Decrease in current assets Less: Decrease in current liabilities and Increase in current assets Outstanding Expenses: (30,000) Trade Payables: (10,000) Inventory (24,000) Trade Receivables 80,000) | (1,44,000) Cash generated from Operating Activities 2,77,000 Less: Income Tax Paid (60,000) Net Cash Flow from Operating Activities 2,17,000] 2,17,000 (8) _| Cash Flow from Investing activities: Purchase of Fixed Tangible Assets 395,000) Purchase of Investments, (100,000) Sale of Fixed Tangible Assets 18,000 Net Cash used in Investing Activities (4,77,000)] (4,77,000) (C)_| Cash flow from Financing Activ Proceeds from issue of Share Capital 3,00,000 Proceeds from issue of Long Term Borrowings 50,000] Repayment of Bank Overdraft (15,000) Proposed Dividend Paid (20,000) Net Cash from Financing Activities 3.15,000] _3.15,000 (D) | Net increase in eash and cash equivalents (a + b + 6) &) | Add: Cash and Cash equivalents at the beginning (8) _| Cash and Cash equivalents atthe end Working Notes: Net Profit before tax and Extraordinary items: Net profit for the current year (& 4,50,000 ~@ 3,00,000) = @ 1,50,000 Add: ‘Transfer to General Reserve = 1,00,000 Proposed Dividend Paid 2 20,000 Provision for Tax made Accountancy —12. (1a)Fixed Tangible Assets A/e Dr. Particulars z Particulars z ‘To Balance b/d 9,00,000 | By Depreciation Ave 70,000 ‘To Bank Ale (Purchases) 3,95,00 | By Bank Alc (Sales) 18,000 By Statement of Profit and Loss 7,000 By Balance fd 12,00,000 12.95.00 12,95,000 Accountancy —12 (15)