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Class 12 - Accountancy
Sample Paper - 03 (2023-24)

Maximum Marks: 80
Time Allowed: : 3 hours

General Instructions:

1. This question paper contains 34 questions. All questions are compulsory.

2. This question paper is divided into two parts, Part A and B.
3. Part - A is compulsory for all candidates.
4. Part - B has two options i.e. (i) Analysis of Financial Statements and (ii) Computerised Accounting. Students must
attempt only one of the given options.
5. Question 1 to 16 and 27 to 30 carries 1 mark each.
6. Questions 17 to 20, 31and 32 carries 3 marks each.
7. Questions from 21 ,22 and 33 carries 4 marks each
8. Questions from 23 to 26 and 34 carries 6 marks each
9. There is no overall choice. However, an internal choice has been provided in 7 questions of one mark, 2 questions of three
marks, 1 question of four marks and 2 questions of six marks.

Part A:- Accounting for Partnership Firms and Companies

1. If the new partner brings his share of goodwill in cash, it will be shared by old partners in:
a) Old Profit Sharing Ratio
b) In Capital Ratio
c) New Profit Sharing Ratio
d) Ratio of Sacrifice
2. Assertion (A): If the partnership deed is silent, interest on the partner's loan will be provided @ 6% p.a.
Reason (R): As per Partnership Act, 1932, Partners must have a partnership deed.
a) Both A and R are true and R is the correct explanation of A.
b) Both A and R are true but R is not the correct explanation of A.
c) A is true but R is false.
d) A is false but R is true.
3. Mahajan Ltd. invited applications for issuing 3,20,000 equity shares of ₹ 20 each at par. The amount was payable as
follows:
On Applications : ₹ 6 per share
On Allotment : ₹ 7 per share
On First Call : ₹ 4 per share
On Final Call : ₹ 3 per share
Applications were received for 3,85,000 shares. Applications for 5,000 shares were rejected, full allotment was made to
the applicants for 80,000 shares and pro-rata allotment was made to the remaining applicants. All calls were made and
were duly received except first call and final call from Seema who applied for 5,000 shares and was allotted shares on
pro-rata basis. Her shares were forfeited.
Amount Credited to Share Forfeiture Account will be:
a) ₹ 52,000
b) ₹ 59,000

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c) ₹ 58,000
d) ₹ 65,000

OR

Interest on Debentures is a charge against ________.

a) General Reserve
b) Share Capital
c) Dividend
d) Profit
4. Profit and Loss adjustment account differs from Profit and Loss Appropriation account which is prepared to show the
effect of
a) Change in Capital Accounts
b) Change in Current Accounts
c) Depreciation charged on assets
d) Revaluation of assets and re-assessment of liabilities

OR

If Rs. 3,000 withdrawn by a partner on the first day of every quarter, interest on drawings will be calculated for:
a) 7.5 months
b) 4.5 months
c) 6 months
d) 5.5 months
5. X and Y are partners sharing profits in 3 : 2 ratio. Their capitals were ₹ 50,000 and ₹ 40,000. Interest on capital (charge)
@10% p.a. Loss during the year was ₹ 6,000. What profit or loss is to be shared by the partners?
a) Loss to X ₹ 2,000; Y ₹ 1,000
b) Loss to X ₹ 3,000; Y ₹ 3,000
c) Loss to X ₹ 3,600; Y ₹ 2,400
d) Loss to X ₹ 9,000; Y ₹ 6,000
6. The loss on issue of Debentures is written-off from:
a) Reserve Capital
b) Share Premium Reserve Accoun
c) Secret Reserve
d) Capital Reserve

OR

Zero Coupon Bonds are issued:

a) None of These
b) With Specified Rate of Interest
c) At Zero Interest Rate
d) Without Specified Rate of Interest
7. Assertion (A): A public company must have at least 7 members and there is no limit as to the maximum number of
members.
Reason (R): A private company must have at least 2 members and maximum 200 excluding its present or past
employees.
a) Both A and R are true and R is the correct explanation of A.

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b) Both A and R are true but R is not the correct explanation of A.
c) A is true but R is false.
d) A is false but R is true.
8. How sacrificing ratio is computed which makes it different from gaining ratio on the basis of mode of calculation
a) It is calculated by taking the difference between the old ratio and the new ratio
b) It is calculated by taking the difference of old ratio and gaining ratio
c) It is calculated by taking the difference of new ratio and old ratio
d) It is calculated by taking the difference of gaining ratio and new ratio

OR

In a partnership, manager’s commission is shown in:

a) balance sheet
b) profit and loss account
c) profit and loss appropriation account
d) None of these

Question No. 9 to 10 are based on the given text. Read the text carefully and answer the questions:

Amit and Sumit started a firm on 1st April, 2020 sharing profits equally. Amit withdrew regularly ₹ 2,000 in the
beginning of every month for the year ended 31St March, 2021 and Sumit withdrew the amount as follows.
On 1st July, 2020: ₹ 8,000
On 1st October, 2020: ₹ 10,000
On 1st February, 2021: ₹ 6,000
As per Partnership Deed, interest on drawings is to be charged @ 10% p.a.

9. What is the total amount of drawings of Amit and Sumit?

a) ₹ 50,000
b) ₹ 46,000
c) ₹ 48,000
d) ₹ 52,000
10. Amit’s interest on drawings is ________.
a) ₹ 1,100
b) ₹ 1,400
c) ₹ 1,200
d) ₹ 1,300
11. A, B and C are partners. A’s capital is ₹ 3,00,000 and B’s capital is ₹ 1,00,000. C has not invested any amount as capital
but he alone manages the whole business. C wants ₹ 30,000 p.a. as salary. Firm earned a profit of ₹ 1,50,000. How much
will be each partner’s share of profit:
a) A ₹ 50,000; B ₹ 50,000; C ₹ 50,000
b) A ₹ 90,000; B ₹ 30,000; C ₹ Nil
c) A ₹ 40,000; B ₹ 40,000; C ₹ 40,000
d) A ₹ 60,000; B ₹ 60,000; C ₹ Nil
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12. Nominal share capital is:
A. That part of authorised capital which is issued by the company.

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B. The amount of capital which is actually applied by prospective shareholders.
C. The amount of capital which is paid by the shareholders.
D. The maximum amount of share capital that a company is authorised to issue.
a) Only C
b) Only B
c) Only D
d) Only A
13. If shares of ₹ 4,00,000 are issued for purchase of assets of ₹ 5,00,000, ₹ 1,00,000 will be treated as ________.
a) Loss
b) Profit
c) Discount
d) Premium
14. A partnership deed is silent for the payment of interest on partners’s loan but there was a loss instead of profits during
the year 2013-14. At what rate will the interest on partner’s loan be allowed?
a) 6 % p.a even if the firm incurs loss
b) None of these.
c) As per the partnership deed
d) No interest will be provided
15. How the net worth will be calculated
a) Net Worth = Profit of partners - Net accumulated Profit
b) Net Worth = Capital of partners + Net accumulated Profit
c) Net Worth = Sacrificing share of Partners - Gross accumulated Profit
d) Net Worth = Investment of partners - Net accumulated Profit

OR

When a new partner brings goodwill in Cash, it is credited to:

a) Sacrificing Partner’s Capital A/cs
b) His Capital A/c
c) All Partner’s Capital A/cs
d) Old Partner’s Capital A/cs
16. A partnership firm is compulsorily dissolved:
a) When a partner of the firm dies
b) When a partner transfers his share to some other person without the consent of other partners
c) When a partner of the firm becomes insolvent
d) When the business of the firm is declared illegal
17. Is it necessary to revalue the assets and liabilities if there is a change in profit sharing ratio of the existing partners? Give
reason.
18. In the absence of Partnership Deed, what are the accounting treatments of:
i. Salaries of partners,
ii. Interest on partners' capitals,
iii. Interest on partner's loan,
iv. Division of profit, and
v. Interest on partners' drawings?

OR

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A, B and C are partners sharing profits in the ratio of 5 : 4 : 1. C is given a guarantee that his share of profits in any year
will not be less than ₹ 20,000. The profit for the year ending 31st March 2023 amounts to ₹ 1,40,000. Amount of
shortfall in the profits given to C will be borne by A and B in the ratio of 3 : 2. Pass necessary journal entry regarding
deficiency borne by A and B.
19. Rohit Ltd. has issued 50,000, 8% debentures of ₹100 each at a discount of 9% on July 1, 2019. The company has a
balance of ₹5,00,000 in securities premium reserve. Pass necessary journal entries for issue of debentures and to write-
off discount/Loss on issue of debentures. The debentures are redeemable after 5 years at a premium of 7%.

OR

SSS Ltd., forfeited 1,000 equity shares of ₹ 100 each for the non-payment of first call ₹ 20 per share and second and
final call of ₹ 25 per share. State
i. Can these shares be reissued?
ii. If yes state the minimum amount at which these shares can be reissued?
iii. If these shares were reissued at ₹ 50 per share fully paid up, what will be the amount of capital reserve?
20. The goodwill of a firm is valued at ₹ 1,35,000 at 3 years' purchase of super profit.
Determine the missing values:
₹3,60,000
Average Profit = 3
= ₹ 1,20,000
Normal Profit = ₹ ________ × 15

100
= ₹ ________
Super Profit = Average Profit - Normal Profit
= ₹ 1,20,000 - ₹ ________ = ₹ ________
Goodwill = Super Profit × No. of Years' Purchase.
21. X Ltd. has offered 50,000 equity shares of ₹ 100 each at a premium of ₹ 20, payable as follows: Application ₹ 50
Allotment ₹ 40 (including premium)
and balance on first and final call.
The bank account of the company has received ₹ 35,00,000 on account of share application money. X Ltd. decided to
allot shares to all the applicants on Pro-rata basis. The balance in calls in arrears account at the time of allotment and first
and final call amounted to ₹ 1,00,000 and ₹ 1,50,000 respectively. These shares were forfeited and re-issued at ^90 per
share as fully paid up. Journalize.
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22. A, B and C are partners sharing profits and losses in the ratio of 3 : 2 : 1. They decided to dissolve their firm on 1st Jan.
2019. Complete the Realisation Account, Loan Account, Capital Accounts and Bank Account from the information
given below:

REALISATION ACCOUNT

Dr. Cr.

Particulars ₹ Particulars ₹
To Sundry Assets: By Sundry Liabilities:

Stock A/c 59,400 Provision for Bad Debts A/c 3,000

Debtors A/c 57,000 Creditors A/c 46,200

Plant and Machinery A/c 1,31,000 2,47,500 Bills Payable A/c 10,800 60,000

To Bank A/c (Liabilities paid off) ? By ?

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To ? By Bank A/c (Assets realised):

Stock 45,000
Goodwill 12,000

Debtors 34,200

Plant and Machinery 90,000 ?

By Loss on realisation transferred to:

A's Capital A/c ?

B's Capital A/c ?

C's Capital A/c 9,450 ?

? ?

LOAN FROM A ACCOUNT

Dr. Cr.

Particulars ₹ Particulars ₹
To ? By Balance b/d ?

? ?

CAPITAL ACCOUNTS

Dr. Cr.
Particulars A B C Particulars A B C

₹ ₹ ₹ ₹ ₹ ₹
To ? ? ? By ? ? ?

To Bank A/c (Final Payment) ? ? ? By Workmen Compensation Reserve ? 3,000 ?

By Bank A/c (Amount brought in) ? 3,900 ?
? 18,900 ? 64,500 ? 61,500

BANK ACCOUNTS

Dr. Cr.
Particulars ₹ Particulars ₹
To Balance b/d ? By Realisation A/c (Liabilities Paid) ?

To Realisation A/c (Sale of unrecorded asset) 15,000 By Realisation A/c (Exp.) 2,400
To ? By Loan From A A/c 57,000
To ? By ?

By ?
? ?

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23. ‘Guru Ltd’ invited applications for issuing 80,000 equity shares of Rs. 10 each at a premium of Rs. 10 per share. The
amount was payable as follows
On application and allotment — Rs. 10 (including Rs. 5 premium)
On first and final call — Rs. 10 (including Rs. 5 premium)
Applications for 1,00,000 share were received. Applications for 10,000 shares were rejected and application money was
refunded. Shares were allotted on pro-rata basis to the remaining applicants. Excess application money received from
applicants to whom .shares were allotted on pro-rata basis was adjusted towards sums due on first and final call. All calls
were made and were duly received except the first and final call money from Kumar who had applied for 1,800 shares.
His shares were forfeited. The forfeited shares were reissued at Rs. 9 per share as fully paid up.
Pass necessary journal entries for the above transactions m the books of ‘Guru Ltd’.

OR

XYZ Ltd. issued a prospectus inviting applications for 2,000 shares of ₹ 10 each at a premium of ₹ 4 per share, payable
as:
On application - ₹ 6 (including ₹ 1 premium)
On allotment - ₹ 2 (including ₹ 1 premium)
On first call - ₹ 3 (including ₹ 1 premium)

On second and final call - ₹ 3 (including ₹ 1 premium)

Applications were received for 3,000 shares and pro-rata allotment was made on the applications for 2,400 shares. It was
decided to utilise excess application money towards the amount due on allotment.
X, to whom 40 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call,
his shares were forfeited.
Y, who applied for 72 shares failed to pay the two calls and on his such failure, his shares were forfeited.
Of the shares forfeited, 80 shares were sold to Z credited as fully paid-up for ₹ 9 per share, the whole of Y's shares being
included. Prepare Journal, Cash Book and the Balance Sheet.
24. A and B are partners sharing profits and losses in the ratio of 3 : 2. On 31st March, 2019, their Balance Sheet was as
follows:
Liabilities ₹ Assets ₹
Creditors 2,50,000 Cash in Hand 25,000
Bills Payable 1,00,000 Cash at Bank 5,75,000

General Reserve 1,50,000 Debtors 50,000

Capital A/cs: Stock 3,00,000
A 8,00,000 Building 5,00,000

B 4,00,000 12,00,000 Machinery 2,00,000

Goodwill 50,000
17,00,000 17,00,000
They admit C as a partner with effect from 1st April, 2019 for 1

3
rd share on the following terms:
i. C will bring in ₹5,00,000 as capital and ₹2,00,000 as his share of goodwill but he actually contributed only ₹1,20,000
towards goodwill.
ii. Building and Machinery to be depreciated by 5%.
iii. Stock to be revalued at ₹4,00,000.

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iv. There is an unrecorded asset worth ₹1,20,000.
v. One month salary of ₹30,000 is outstanding.

Prepare Revaluation Account, Bank Account, Capital Accounts of Partners and the Balance Sheet after the admission of
C.

OR

The Balance Sheet of M/S A, B and C showed as follows:

Liabilities ₹ Assets ₹

Trade Creditors 7,000 Freehold Property 49,000

Capitals Accounts: Plant 15,000
A 22,575 Stock 5,500

B 30,000 Sundry Debtors 6,250

C 18,500 71,075 Less: Bad Debt Provision 100 6,150
Cash at Bank 2,425

78,075 78,075
B agrees to take over the business, A and C retiring on the following terms :
i. That the goodwill of the firm be valued at ₹15,000
ii. That plant and stock be reduced by 10%.
iii. That freehold property be appreciated by ₹ 1,000.
iv. That Provision for doubtful debts be brought up to ^250.
v. B has to bring in sufficient cash to pay offA and C The partners used to share profits in the proportion of 2/5, 2/5 and
1/5.

Show the necessary Journal entries, Partner’s Capital Accounts and Balance Sheet of B after the retirement of A and C.
25. Following is the Balance Sheet of A, B and C as at 31st March, 2014:
Liabilities ₹ Assets ₹
Sundry Creditors 18,000 Tools 6,000

Workmen Compensation Reserve 19,200 Furniture 48,000

Capital Accounts: Stock 36,000
A 60,000 Debtors 36,000

B 30,000 Cash at Bank 30,000

C 30,000 Cash in hand 1,200
1,57,200 1,57,200

B died on 30th June 2014. Under the partnership agreement, the executor of B was entitled to:
i. Amount standing to the credit of his Capital Account.
ii. Interest on Capital which amounted to ₹ 375
iii. His share of goodwill ₹ 21,000.
iv. His share of profit from the closing of the last financial year to the date of death which amounted to ₹ 2,625.

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B’s executor was paid ₹ 20,400 on 1st July 2014 and the balance in four equal yearly instalments starting from 30th June,
2015 with interest @ 6% p.a.
Pass the necessary Journal entries and draw up B’s Account to be rendered to his executor and B's Executor’s Account
till it is finally paid.
26. i. On 1st April, 2019 , Bright Ltd. issued ₹ 4,00,000,6 % Debentures of ₹ 100 each at a discount of 5 %, redeemable
after three years.
The amount per debenture was payable as follows:
On Application - ₹ 80 per debenture
On Allotment - Balance
The debentures were fully subscribed and all money was duly received.
ii. Pass necessary journal entries for issue of debentures.
Disha Ltd. took over assets of ₹ 8,00,000 and liabilities of ₹ 3,00,000 from Kriti Ltd. for a purchase consideration of
₹ 6,00,000. The payment was made by issue of 9 % Debentures of ₹ 100 each at 20 % premium.
Pass the necessary journal entries for the above transactions in the books of Disha Ltd.
Part B :- Analysis of Financial Statements
27. Horizontal Analysis is:
a) Cross Section Analysis
b) Profitability Analysis
c) Time Series Analysis
d) None of these

OR

Which of the following is not the limitation of financial statements?

a. Ignore qualitative aspects.
b. Personal bias.
c. Ignores price level changes.
d. Provide information about the profitability of the business.
a) Option (d)
b) Option (b)
c) Option (a)
d) Option (c)
28. Which of the following is not included in quick assets
a) Cash at bank
b) Stores and spares
c) Cash in hand
d) Drafts in hand
29. Which of the following is shown under Financing Activity?
i. Interest paid
ii. Commission received
iii. Cash received against sale of goods
iv. Cash paid for purchase of goods
a) only i
b) iii and iv
c) iv and i

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d) ii and iii

OR

Cash Receipts from the sale of goods by a trading company come under which activity while preparing a cash flow
statement?
a) Operating Activity
b) Financing Activity
c) Investing Activity
d) Operating and Financing Activities
30. In cash flow statement, the item of interest is shown in
A. Operating Activities
B. Financing Activities
C. Investing Activities
a) Both A and C
b) Both B and C
c) A, B, C
d) Both A and B
31. How will you show the following items in the Balance Sheet of a Company:
i. Calls in Arrears
ii. Calls in Advance
iii. Forfeited Shares
iv. Debenture Sinking Fund
v. Contingent Liability
32. Working Capital Rs. 36,000; Current Ratio 2.8:1; Inventory Rs. 16,000. Calculate Current Assets, Current Liabilities and
Quick Ratio.
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33. From the following Statement of Profit and Loss, prepare Common-size Statement of Profit and Loss and give
comments:
Particulars Note No. 31st March, 2019 (₹) 31st March, 2018 (₹)
I. Income

Revenue from Operations (Net Sales) 12,50,000 10,00,000

II. Expenses
Purchases of Stock-in-Trade 8,70,000 7,20,000

Change in Inventories of Stock-in-Trade (20,000) 30,000

Depreciation and Amortisation Expenses 30,000 20,000
Other Expenses 50,000 30,000

Total 9,30,000 8,00,000

III. Profit before Tax (1 - II) 3,20,000 2,00,000
IV. Less: Income Tax 96,000 60,000

V. Profit after Tax (III-IV) 2,24,000 1,40,000

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OR

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

Particulars 31.3.2023 31.3.2022
₹ ₹

Revenue from Operations 50,00,000 30,00,000

Finance Costs 30,00,000 27,00,000
Employee Benefit Expenses 4,00,000 3,00,000

Other Expenses 40,000 50,000

Income Tax 40% of Net Profit
34. Balance Sheets of Kewal Ltd. as at 31st March 2007 and 31st March 2006 were:
31st March 31st March
Particulars
2007(Rs.) 2006(Rs.)

I. EQUITY AND LIABILITIES

1. Shareholders Funds
(a) Share Capital 10,00,000 7,00,000

(b) Reserves and Surplus: Surplus i.e, Balance in Statement of Profit and
2,50,000 1,50,000
Loss

2. Current Liabilities
Short - term Provisions: Proposed Dividend 50,000 40,000
13,00,000 8,90,000

II. ASSETS
1. Non - Current Assets
Fixed Assets(Tangible) : Plant and Machinery 8,00,000 5,00,000

2. Current Assets
(a) Inventories(Stock) 1,00,000 75,000
(b) Cash and Cash Equivalents 4,00,000 3,15,000

13,00,000 8,90,000
Additional Information :
1. Rs 50,000 depreciation has been charged to Plant and Machinery during the year 2007.
2. A piece of machinery costing Rs. 12,000 (book value Rs. 5,000) was sold at 60% profit on book value.
Prepare a Cash Flow Statement.

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Class 12 - Accountancy
Sample Paper - 03 (2023-24)

Part A:- Accounting for Partnership Firms and Companies

1. (d) Ratio of Sacrifice

2. (c) A is true but R is false.
Explanation: Partnership deed is a voluntary document.
3. (a) ₹ 52,000
Explanation: Scheme of Allotment:
Shares Applied Allotted

Rejected 5,000 Nil

Full Allotment 80,000 80,000

Pro-rata Allotment (3,85,000 - 5,000 - 80,000) 3,00,000 2,40,000

3,85,000 3,20,000

2,40,000
Shares Allotted to Seema = 5,000 × 3,00,000
= 4,000
Entry on Forfeiture of Shares:
Date Particulars L.F. Dr. (₹) Cr. (₹)
Share Capital A/c (4,000 × ₹ 20) 80,000

To Share First Call (4,000 × ₹ 4) 16,000

To Share Final Call (4,000 × ₹3) 12,000

To Share Forfeiture A/c 52,000

OR

(d) Profit
4. (d) Revaluation of assets and re-assessment of liabilities
Explanation: Profit and loss adjustment account are also known as the Revaluation Account. This account is different
from profit and loss appropriation account. Revaluation account is prepared when reconstitution of partnership takes
place i.e. change in existing profit sharing ratio, admission of a new partner, retirement/death of a partner etc.
Revaluation A/c is prepared to record the revaluation of assets or reassessment of Liability.

OR

(a) 7.5 months

Explanation: When a partner draws a fixed amount at the beginning of each quarter for his personal use then the
average period will be calculated as:
T ime after first drawing + T ime after the last drawing 12 months + 3 months
Time after first drawing + 2
= 2

and the average period will be = = 7.5 Months.

15

5. (d) Loss to X ₹ 9,000; Y ₹ 6,000

Explanation: Loss to X ₹ 9,000; Y ₹ 6,000
6. (d) Capital Reserve

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OR

(d) Without Specified Rate of Interest

Explanation: Without Specified Rate of Interest
7. (b) Both A and R are true but R is not the correct explanation of A.
Explanation: Both A and R are true but R is not the correct explanation of A.
8. (a) It is calculated by taking the difference between the old ratio and the new ratio
Explanation: Sacrificing Ratio is calculated by deducting new share from the old share. Gaining ratio is calculated by
deducting old share from the new share.

OR

(b) profit and loss account

Explanation: profit and loss account
9. (c) ₹ 48,00
10. (d) ₹ 1,30
11. (a) A ₹ 50,000; B ₹ 50,000; C ₹ 50,000
12. (c) Only D
Explanation: Nominal Share Capital:- The maximum amount of share capital that a company is authorised to issue.
13. (d) Premium
14. (a) 6 % p.a even if the firm incurs loss
Explanation: 6 % p.a even if the firm incurs loss
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15. (b) Net Worth = Capital of partners + Net accumulated Profit
Explanation: Net worth is the net amount engaged in the business. To find out the net worth of a business following
formula should be used:
Capitals of all old partners including new partner + Reserves and profits - losses (accumulated losses and fictitious
assets) - Fictitious assets - Deferred revenue expenditure.

OR

(a) Sacrificing Partner’s Capital A/cs

Explanation: When a new partner brings goodwill in Cash, it is credited to Sacrificing Partner’s Capital Accounts.
16. (d) When the business of the firm is declared illegal
Explanation: When the business of the firm is declared illegal
17. Yes, It is necessary to revalue the assets and liabilities if there is a change in profit sharing ratio of the existing partners.
The reason for revaluation of assets and reassessment of liabilities is that any increase or decrease in the value of assets
and liabilities up to the date of change in profit-sharing ratio is for the period before the change in profit-sharing ratio.
Therefore, it is shared by the partners in their old profit-sharing ratio.

18. Items Provision in the absence of partnership deed

(a) Salaries to partners No salary will be allowed to partners.

(b) Interest on partners No interest will be allowed to partners on their capital.

(c) Interest on partner loan 6% p.a interest will be allowed

(d) Distribution of profit profits will be shared equally

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(e) Interest on partner's drawings No interest will be charged on the drawings of partners.

OR

Profit of ₹ 1,40,000 divided in the ratio of 5 : 4 : 1

A's Share: ₹ 1,40,000× = ₹ 70,000
5

10

B's Share: ₹ 1,40,000× 4

10
= ₹ 56,000
C's Share: ₹ 1,40,000× = ₹ 14,000
1

10

C's share in profits amounts to ₹ 14,000 whereas the minimum guaranteed amount is ₹ 20,000. Hence, the deficiency of
₹ 6,000 will be borne by A and B in the ratio of 3 : 2. The adjustment entry will be as follows:

ADJUSTMENT ENTRY

Date Particulars L.F Dr. (₹) Cr. (₹)

A's Capital A/c Dr. 3,600

2023, March 31

B's Capital A/c Dr. 2,400

To C's Capital A/c

6,000
(Deficiency of C met by A and B in the ratio of 3 : 2)

19. JOURNAL

Date Particulars L.F. Dr. (₹) Cr. (₹)

2019 July 01 Bank A/c Dr. 45,50,000

To Debenture Application and Allotment A/c 45,50,000

(Debenture application money received)

July 01 Debenture Application and Allotment A/c Dr. 45,50,000

Loss on Issue of Debenture A/c Dr. 8,00,000

To 8% Debenture A/c 50,00,000

To Premium on Redemption of Debentures A/c 3,50,000

(Debenture application money transferred on allotment)

July 01 Securities Premium Reserve A/c Dr. 5,00,000

Statement of Profit and Loss Dr. 3,00,000

To Loss and Issue of Debentures A/c 8,00,000

(Loss and Issue of Debentures written-off)

OR

i. Yes, these shares can be reissued as forfeited shares can be reissued by the company.
ii. Forfeited shares can be reissued at any rate of discount. The only condition is that the amount of discount allowed on
the reissue of the forfeited shares must not exceed the amount forfeited on such shares. In this case, shares must be
reissued at a minimum price of ₹ 45 per share (i.e, 100 - 55), otherwise the loss from discount on these shares will
exceed the amount forfeited on these shares.

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iii. Calculation of Amount to be Transferred to Capital Reserve :
Amount forfeited (1,000 × 55) = ₹55,000

(-) Discount on reissue (l,000 × 50) = ₹(50,000)

Therefore, Gain on reissue to be transferred to capital reserve = ₹5,000
₹3,60,000
20. Average Profit = 3
= ₹ 1,20,000
₹ 75,000 (Normal Profit) = ₹ _________ (Capital Employed) × 15/100
Capital Employed = ₹ 75,000 × 100/15 = ₹ 5,00,000
Goodwill = Super Profit × No. of Years' Purchase
₹ 1,35,000 = Super Profit × 3
₹1,35,000
Super Profit = 3
₹ 45,000
Normal Profit = Average Profit - Super Profit
= ₹ 1,20,000 - ₹ 45,000 = ₹ 75,000

21. JOURNAL OF X LTD.

Date Particulars L.F. Dr. (₹) Cr. (₹)

1. Bank A/c Dr. 35,00,000

To Equity Share Application A/c 35,00,000

(Application money received for 70,000 shares @ ₹ 50 each)

2. Equity Share Application A/c Dr. 35,00,000

To Equity Share Capital A/c 25,00,000

To Equity Share Allotment A/c 10,00,000

(Shares allotted on proportionate bases)

3. Equity Share Allotment A/c Dr. 20,00,000

To Equity Share Capital A/c 10,00,000

To Securities Premium A/c 10,00,000

(Share allotment money including premium due)

4. Bank A/c Dr. 9,00,000

Calls in Arrears A/c Dr. 1,00,000

To Equity Share Allotment A/c 10,00,000

(Allotment money received, except for 5,000 shares)

5. Equity Shares First and Final Call A/c Dr. 15,00,000

To Equity Shares Capital A/c 15,00,000

(Share first and final call money due)

6. Bank A/c Dr. 13,50,000

Calls in Arrears A/c Dr. 1,50,000

To Equity Shares First and Final Call A/c 15,00,000

(First and Final call money received, except for 5,000 shares)

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7. Equity Share Capital Dr. 5,00,000

Securities Premium A/c Dr. 1,00,000

To Calls in Arrears A/c 2,50,000

To Shares Forfeited A/c 3,50,000

(5,000 shares forfeited for non-payment of allotment money and first and final call
money)
8. Bank A/c Dr. 4,50,000

Shares Forfeited A/c Dr. 50,000

To Share Capital A/c 5,00,000

(5,000 Forfeited shares reissued at ₹ 90 per share, as fully paid up)

9. Shares Forfeited A/c Dr. 3,00,000

To Capital Reserve A/c 3,00,000

(Gain on reissue transferred to Capital Reserve)

22. REALISATION ACCOUNT

Dr. Cr.
Particulars ₹ Particulars ₹

To Sundry Assets: By Sundry Liabilities:

Stock A/c 59,400 Provision for Bad Debts A/c 3,000

Debtors A/c 57,000 Creditors A/c 46,200

Plant and Machinery A/c 1,31,000 2,47,500 Bills Payable A/c 10,800 60,000

To Bank A/c (Liabilities paid off) 63,000 By Bank A/c (Sale of unrecorded asset) 15,000
To Bank A/c (Expenses of realisation) 2,400 By Bank A/c (Assets realised):

Stock 45,000

Goodwill 12,000
Debtors 34,200

Plant and Machinery 90,000 1,81,200

By Loss on realisation transferred to:

A's Capital A/c 3/6 28,350

B's Capital A/c 2/6 18,900

C's Capital A/c 1/6 9,450 56,700

3,12,900 3,12,900

LOAN FROM A ACCOUNT

Dr. Cr.

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Particulars ₹ Particulars ₹

To Bank A/c 57,000 By Balance b/d 57,000

57,000 57,000

CAPITAL ACCOUNTS

Dr. Cr.
Particulars A B C Particulars A B C

₹ ₹ ₹ ₹ ₹ ₹

To Realisation A/c (Loss) 28,350 18,900 9,450 By Balance b/d 60,000 12,000 60,000
To Bank A/c (Final
36,150 - 52,050 By Workmen Compensation Reserve 4,500 3,000 1,500
Payment)

By Bank A/c (Amount brought in) - 3,900 -

64,500 18,900 61,500 64,500 18,900 61,500

BANK ACCOUNTS

Dr. Cr.

Particulars ₹ Particulars ₹

To Balance b/d 10,500 By Realisation A/c (Liabilities Paid) 63,000

To Realisation A/c (Sale of unrecorded asset) 15,000 By Realisation A/c (Exp.) 2,400

To Realisation A/c (Assets realised) 1,81,200 By Loan From A A/c 57,000

To B's Capital A/c 3,900 By A's Capital A/c 36,150

By C's Capital A/c 52,050

2,10,600 2,10,600
Working Notes:
(6) First of all, Cr. side of Realisation A/c will be completed and the total of Cr. side ₹ 3,12,900 will be put on Dr. side
and the missing figure on Dr. side will be 'Liabilities paid' off ₹ 63,000.
(12) Cr. side of Bank A/c will be completed and the total of Cr. side ₹ 2,10,600 will be put on Dr. side and the missing
figure will be the opening balance of ₹ 10,500.

23. JOURNAL

Amt Amt
Date Particulars L.F
(Dr.) (Cr.)

1. Bank A/c (1,00,000 × 10) Dr. 10,00,000 ....

To Equity Share Application and Allotment A/c .... 10,00,000

(Being application money received on 1,00,000 snares) .... ....

2. Equity Share Application and Allotment A/c Dr. 10,00,000 ....

To Equity Share Capital A/c (80,000 × 5) .... 4,00,000

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To Securities Premium Reserve A/c (80,000 × 5) .... 4,00,000
To Equity Share First and Final Call A/c .... 1,00,000

To Bank A/c (10,000 × 10) .... 1,00,000

(Being application money transferred to share capital account and excess money is
.... ....
adjusted in final call account)

3. Equity Share First and Final Call A/c Dr. 8,00,000 ....

To Equity Share Capital A/c (80,000 × 5) .... 4,00,000

To Securities Premium Reserve A/c (80,000 × 5) .... 4,00,000

(Being amount due on first and final call) .... ....

4. Bank A/c Dr. 6,86,000 ....

To Equity Share First and Final Call A/c .... 6,86,000

(Being amount received on first and final call) .... ....

5. Equity Share Capital A/c (1,600 × 10) Dr. 16,000 ....

Securities Premium Reserve A/c (1,600 × 5) Dr. 8,000 ....

To Equity Share Forfeiture A/c .... 10,000

To Equity Share First and Final Call A/c (Being Kumar's share forfeited) .... 14,000
6. Bank A/c (1,600 × 9) Dr. 14,400 ....

Equity Share Forfeiture A/c Dr. 1,600 ....

To Equity Share Capital A/c (1,600 × 10) .... 16,000

(Being forfeited shares reissued for Rs. 9 as fully paid up) .... ....

7. Equity Share Forfeiture A/c Dr. 8,400 ....

To Capital Reserve A/c .... 8,400

(Being excess amount on forfeiture transferred to capital reserve) .... ....
Working Notes:-

1. Computation Table

Money Received on Money Transferred Money Transferred to Excess

Shares Shares
Categories Application @ Rs. to Share Capital @ Securities / Premium Application
Applied Allotted
10 each Rs. 5 each Reserve Money
I 10,000 - 1,00,000 1,00 - -

II 90,000 80,000 9,00,000 4,00,000 1,00,000

1,00,000 80,000 10,00,000 10,00,000 4,00,000 1,00,000

2. Calculation of Amount not Received on First and Final Call:-
80,000
Shares allotted to Kumar = 90,000
× 1, 800 = 1, 600 Shares

Amount received on 1,800 shares @ Rs. 10 each 18,000

Amount transferred to share capital account (1,600× 5) 8,000

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Amount transferred to securities premium account (1,600 × 5) 8,000

Excess money received on application 2,000

Amount due on first and final call for 1,600 shares of Kumar @ Rs. 10 each 16,000

Amount not received on securities premium 8,000

Amount not received on first and final call 6,000

3. Calculation of Amount Credited in Share Forfeiture Account:-
Amount received on application and allotment 18,000

(-) Amount received for securities premium 8,000

Amount to be credited in share forfeiture account 10,000

OR

Applied shares 3,000

Allotment made as: Payable as:
Applied Allotted Application ₹ 6 (5 + 1)

2,400 2,000 Allotment ₹ 2 (1 + 1)

600 NIL First Call ₹ 3 (2 + 1)

Final Call ₹ 3 (2 + 1)

3,000 2,000 ₹ 14 (10 + 4) per share

Cash Book

Dr. Cr.

Date Particulars Bank (₹) Date Particulars Bank (₹)

Share Application (3,000 shares × ₹ 6) 18,000 Share Application (600 shares × ₹ 6) 3,600

Share Allotment (see note-2) 1,568

Share First Call (see note-4) 5,700

Share Final Call (see note-5) 5,700

Share Capital (80 shares × ₹ 9) 720 Balance c/d 28,088

31,688 31,688

Journal Entries

Date Particulars L.F. Dr. (₹) Cr. (₹)

Share Application A/c Dr. 14,400

To Share Capital A/c 10,000

To Securities Premium A/c 2,000

To Share Allotment A/c 2,400

(Share application money of 2,000 shares transferred to Share Capital and Securities

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Premium at ₹ 5 and ₹ 1 each respectively and ₹ 2,400 adjusted on allotment)
Share Allotment A/c Dr. 4,000

To Share Capital A/c 2,000

To Securities Premium A/c 2,000

(Allotment due on 2,000 shares at ₹ 2 each including ₹ 1 premium)

Share First Call A/c Dr. 6,000

To Share Capital A/c 4,000

To Securities Premium A/c 2,000

(First call due on 2,000 shares at ₹ 3 each including ₹ 1 premium)

Share Capital A/c (40 shares × ₹ 8) Dr. 320

Securities Premium A/c Dr. 72

To Share Forfeiture A/c 240

To Share Allotment A/c 32

To Share First Call A/c 120

(40 shares of ₹ 10 each ₹ 8 called with premium forfeited for non-payment of

amount due)
Share Final Call A/c Dr. 5,880

To Share Capital A/c 3,920

To Securities Premium A/c 1,960

(Final call due on 1,960 shares at ₹ 3 each including ₹ 1 premium)

Share Capital A/c Dr. 600

Securities Premium A/c Dr. 120

To Share Forfeiture A/c 360

To Share First Call A/c 360

(60 shares forfeited for non-payment of amount due)

Bank A/c Dr. 720

Share Forfeiture A/c Dr. 80

To Shares Capital A/c 800

(80 shares of ₹ 10 each re-issued at ₹ 9 per share fully paid-up)

Share Forfeiture A/c Dr. 400

To Capital Reserve 400

(Balance of 80 reissued shares in Share Forfeiture Account transferred to Capital
Reserve)
As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.

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XYZ Ltd.
Balance Sheet

Particulars Note No. ₹

I. Equity and Liabilities

1. Shareholders’ Funds

a. Share Capital 1 19,920

b. Reserves and Surplus 2 8,168

2. Non-Current Liabilities

3. Current Liabilities

Total 28,088

II. Assets

1. Non-Current Assets

2. Current Assets

a. Cash and Cash Equivalents 3 28,088

Total 28,088

NOTES TO ACCOUNTS
Note No. Particulars ₹

1 Share Capital
Authorised Share Capital

...shares of ₹ 10 each -

Issued Share Capital

2,000 shares of ₹ 10 each 20,000

Subscribed, Called-up and Paid-up Share Capital

1,980 shares of ₹ 10 each 19,800

Add: Shares Forfeited (20 shares × ₹ 6) 120 19,920

2 Reserves and Surplus

Securities Premium 7,768

Capital Reserve 400 8,168

3 Cash and Cash Equivalents

Cash at Bank 28,088

Working Notes:
1. X’s Shares
2,400
Number of share applied by X = 2,000
× 40 = 48 shares

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Money received on application (48 shares × ₹ 6) = 288
Less: Money transferred to Shares Capital (40 shares × ₹ 5) = 200

Less: Securities Premium (40 shares × ₹ 1) = 40

Excess money on application from X = 48

Utilisation of excess application money received from X

Share Capital due on Allotment (40 shares × ₹ 1) = 40

Less: Excess money on Application from X = 48

Excess money after adjustment of Share Capital on Allotment =8

Securities Premium due on Allotment (40 shares × ₹ 1) = 40

Less: Excess money after adjustment of Share Capital on Allotment =8

Calls-in-Arrears of Securities Premium on Allotment = 32

2. Share Allotment
Money due on allotment (2,000 shares × ₹ 2) = 4,000

Less: Excess money on Application = 2,400

= 1,600
Less: Calls-in-Arrears on X‘s shares (securities premium) = 32

Money received on allotment = ₹ 1,568

3. Y’s Shares
2,000
Number of shares allotted = 2,400
× 72 = 60 shares
4. Share First Call
Money due on Share First Call (2,000 shares × ₹ 3) = 6,000
Less: Calls-in-Arrears on X‘s shares (40 shares × ₹ 3) = 120

Less: Calls-in-Arrears on Y’s shares (60 shares × ₹ 3) = 180

Money received on Share First Call = 5,700

5. Share Final Call
Money due on share Final Call (1,960 shares × ₹ 3) = 5,880

Less: Calls-in-Arrears on Y’s shares (60 shares × ₹ 3) = 180

Money received on Share Final Call = 5,700
Capital Reserve
X’s shares
Money received from X for 40 shares = 288
Less: Securities Premium adjusted on Application = 40

Less: Securities Premium adjusted on Allotment =8

Balance in the Share Forfeiture before re-issue of shares Cr. = 240

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Share Forfeiture Credit = ₹ 6 per share
240

40

Share forfeiture Debit = ₹ 1 per share

= ₹ 5 per share
Capital Reserve on re-issue of 20 shares = ₹ 5 × 20 shares = ₹ 100
Y’s Shares
Share Forfeiture on 60 Shares of Y
Share Forfeiture Credit ₹ 6 per share

Less: Share Forfeiture Debit ₹ 1 per share

₹ 5 per share
Capital Reserve on re-issue of 60 shares of Y = ₹ 5 × 60 shares = ₹ 300
Total Capital Reserve on 80 shares = Capital Reserve on re-issue of 20 shares of X + Capital Reserve on re-issue of 60
shares of Y
= 100 + 300 = ₹ 400

24. REVALUATION ACCOUNT

Dr. Cr.

Particulars ₹ Particulars ₹

To Building A/c 25,000 By Stock A/c 1,00,000

To Machinery A/c 10,000 By Unrecorded Asset A/c 1,20,000

To Outstanding Salary A/c 30,000

To Gain (Profit) transferred to

As Capital A/c (3/5) 93,000

B's Capital A/c (2/5) 62,000 1,55,000

2,20,000 2,20,000

BANK ACCOUNT

Dr. Cr.

Particulars ₹ Particulars ₹

To Balance b/d 5,75,000 By Balance c/d 11,95,000

To C's Capital A/c 5,00,000

To Premium for Goodwill A/c 1,20,000

11,95,000 11,95,000

PARTNERS' CAPITAL ACCOUNTS

Dr. Cr.

A B C A B C
Particulars Particulars
₹ ₹ ₹ ₹ ₹ ₹

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To Goodwill A/c 30,000 20,000 ... By Balance b/d 8,00,000 4,00,000 ...
(Existing)

To A's Capital A/c

... ... 48,000 By General Reserve A/c 90,000 60,000 ...
(Goodwill)

To B's Capital A/c

... ... 32,000 By Revaluation A/c 93,000 62,000 ...
(Goodwill)

By Premium for Goodwill A/c

To Balance c/d 10,73,000 5,82,000 4,20,000 72,000 48,000 ...
(In sacrificing ratio)

By Bank A/c (Capital) ... .... 5,00,000

By C's Capital A/c (WN 3) 48,000 32,000 ....

11,03,000 6,02,000 5,00,000 11,03,000 6,02,000 5,00,000

BALANCE SHEET OF THE NEW FIRM as at 1st April, 2019

Liabilities Assets ₹ ₹

Bills Payable 1,00,000 Cash in Hand 25,000

Creditors 2,50,000 Cash at Bank 11,95,000

Outstanding Salary 30,000 Stock 4,00,000

Capital A/cs: Debtors 50,000

A 10,73,000 Unrecorded Asset 1,20,000

B 5,82,000 Building 4,75,000

C 4,20,000 20,75,000 Machinery 1,90,000

24,55,000 24,55,000
Working Notes:

OR

IN THE BOOKS OF THE FIRM

JOURNAL ENTRIES

Date Particulars L.F. Dr. (₹) Cr. (₹)

Revaluation A/c Dr. 2,200

To Plant A/c 1,500

To Stock A/c 550

To Provision for Doubtful Debts A/c 150

(Decrease in the value of assets recorded through revaluation account)

Freehold Property A/c Dr. 1,000

To Revaluation A/c 1,000

(Increase in the value of freehold property recorded through revaluation account)

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A's Capital A/c Dr. 480

B's Capital A/c Dr. 480

C's Capital A/c Dr. 240

To Revaluation A/c 1,200

(Transfer of loss on revaluation to old partners capital account in old profit sharing
ratio)

B's Capital A/c Dr. 9,000

To A's Capital A/c 6,000

To C's Capital A/c 3,000

(A and C's share of goodwill debited to B's Capital Account)

Bank A/c Dr. 46,930

To B's Capital A/c 46,930

(Amount brought in by B)

A's Capital A/c Dr. 28,095

C's Capital A/c Dr. 21,260

To Bank A/c 49,355

(Amount paid off to A and C)

PARTNERS CAPITAL ACCOUNTS

Dr. Cr.

Particulars A (₹) B (₹) C (₹) Particulars A (₹) B (₹) C (₹)

To Revaluation A/c 480 480 240 By Balance b/d 22,575 30,000 18,500

To A's Capital A/c 6,000 By B's Capital A/c 6,000 3,000

To C's Capital A/c 3,000 By Bank A/c 46,930

To Bank A/c 28,095 21,260

To Balance c/d 67,450

28,575 76,930 21,500 28,575 76,930 21,500

BALANCE SHEET OF B
as at ...

Liabilities ₹ Assets ₹

Trade Creditors 7,000 Sundry Debtors 6,250

B's Capital 67,450 Less: Provision for doubtful debts 250 6,000

Stock 4,950
Plant 13,500

Freehold Property 50,000

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74,450 74,450
W.N.:
₹

Amount required to pay off A 28,095

Amount required to pay off C 21,260

49,355

Amount available 2,425

Amount required to be brought in by B 46,930
i. Calculation of New Profit-sharing Ratio:
C's share = 1/3; Remaining share = 1 - 1/3 = 2/3, which is shared by A and B in their old ratio, i.e., 3 : 2. Thus, A's
New Share = 3/5 × 2/3 = 2/5; B's New Share = 2/5 × 2/3 = 4/15
Thus, New Profit-sharing Ratio of A, B and C = 2/5 : 4/15 :1/3 or 6 :4 : 5. 2.
ii. Sacrificing Ratio will be the same as old ratio among old partners since nothing else is specifically mentioned except
the share of new partner. Thus, Sacrificing Ratio of A and B is same as old ratio, i.e., 3 : 2.
iii. C has brought ₹80,000 short as goodwill. So, his Capital Account is debited and A's and B's Capital Accounts are
credited in the Sacrificing Ratio. Thus, A and B get credit for the full amount of C's share of goodwill in the
Sacrificing Ratio.
Alternatively, unpaid amount of Premium for Goodwill ₹80,000 can be adjusted through C's Current Account by
passing the following entry:
₹ ₹

Cs Current A/c Dr. 80,000

To A's Capital A/c 48,000

To B's Capital A/c 32,000

In such a case the Current A/c of C will show a debit balance and it is shown on the assets side of the reconstituted
Balance Sheet and its total would be ₹25,35,000.

25. IN THE BOOKS OF THE FIRM

JOURNAL ENTRIES

Date Particulars L.F. Dr. (₹) Cr. (₹)

2014

June
Workmen Compensation Reserve A/c Dr. 6,400
30

To B's Capital A/c 6,400

(Transfer of B's share of reserve to his Capital Ac)

June
Interest on Capital A/c Dr. 375
30

To B's Capital A/c 375

(Interest credited to his Capital A/c provided for)

June A's Capital A/c Dr. 10,500

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30

C's Capital A/c Dr. 10,500

To B's Capital A/c 21,000

(Adjustment of B's share of goodwill into the Capital A/cs of A and C in their
gaining ratio i.e., equally)

June
Profit & Loss Suspense A/c Dr. 2,625
30

To B's Capital A/c 2,625

(Transfer of profit till his death)

June
B's Capital A/c Dr. 60,400
30

To B's Executor's A/c 60,400

(Amount due to B transferred to his Executor's A/c)

July 1 B's Executor's A/c Dr. 20,400

To Bank A/c 20,400

(Amount paid to B's Executor)

B's CAPITAL A/C

Dr. Cr.
Date Particulars ₹ Date Particulars ₹

2014 2014

June 30 To B's Executor's A/c 60,400 April 1 By Balance b/d 30,000

June 30 By Workmen Compensation Reserve A/c 6,400

June 30 By Interest on Capital A/c 375

June 30 By A's Capital A/c 10,500

June 30 By C's Capital A/c 10,500

June 30 By Profit & Loss Suspense A/c 2,625

60,400 60,400

B's EXECUTOR'S A/C

Dr. Cr.

Date Particulars ₹ Date Particulars ₹

2014 July 1 To Bank A/c 20,400 2014 June 30 By B's Capital A/c 60,400

2015 March 2015 March By Interest A/c

To Balance c/d 41,800 1,800
31 31 (60,400 - 20,400) × 6

100
×
9

12

62,200 62,200

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2015 June 30 To Bank A/c 12,400 2015 April 1 By Balance b/d 41,800
(10,000 + 1,800 + 600)

2016 March By Interest A/c

To Balance c/d 31,350 2015 June 30 600
31 40, 000 ×
6

100
×
3

12

2016 March By Interest A/c

1,350
31 30, 000 ×
6

100
×
9

12

43,750 43,750

To Bank A/c
2016 June 30 11,8000 2016 April 1 By Balance b/d 31,350
(10,00 + 1,350 + 450)
2017 March By Interest A/c
To Balance c/d 20,900 2016 June 30 450
31 30, 000 ×
6

100
×
3

12

2017 March By Interest A/c

900
31 20, 000 ×
6

100
×
9

12

32,700 32,700

To Bank A/c (10,000 + 900 +

2017 June 30 11,200 2017 April 1 By Balance b/d 20,900
300)

2018 March By Interest A/c

To Balance c/d 10,450 2017 June 30 300
31 20, 000 ×
6

100
×
3

12

2018 March By Interest A/c

450
31 10, 000 ×
6

100
×
9

12

21,650 21,650
To Bank A/c (10,000 + 450 +
2018 June 30 10,600 2018 April 1 By Balance b/d 10,450
150)

By Interest A/c
2018 June 30 6 3
150
10, 000 × ×
100 12

10,600 10,600
Notes:
i. Total amount due to B9s Executor’s is ₹ 40,000 payable in 4 instalments. Hence, yearly instalment = 40,000 ÷ 4 =
₹ 10,000 plus interest.
26. i. Journal of Bright Ltd.
Date Particulars L.F. Dr. (₹) Cr. (₹)

2019 Apr.
Bank A/c Dr. 3,20,00,000
1

To Debenture Application A/c 3,20,00,000

(Application money received on 4,00,000 debentures)

Debenture Application A/c Dr. 3,20,00,000

To 6% Debentures A/c 3,20,00,000

(Application money on 6% debentures transferred to Debentures

account)

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Debenture Allotment A/c Dr. 60,00,000

Discount on issue of Debentures A/c Dr. 20,00,000

To 6% Debentures A/c 80,00,000

(Allotment money due on 6% debentures)

Bank A/c Dr. 60,00,000

To Debenture Allotment A/c 60,00,000

(Allotment money received on 6% Debentures)

ii. Disha Ltd.
Journal
Date Particulars L.F. Dr. (₹) Cr. (₹)
2019 Apr.
Sundry Assets A/c Dr. 8,00,000
1

Goodwill A/c Dr 1,00,000

To Sundry Liabilities A/c 3,00,000

To Kriti Ltd. A/c 6,00,000

(Assets and liabilities taken over from Kriti Ltd.)

Kriti Ltd.'s A/c Dr.

To 9% Debentures A/c 60,00,000

To Securities Premium Reserve A/c 5,00,000

To 6% Debentures A/c 1,00,000

(Purchase consideration discharged by issuing 9% Debentures at a

premium)
Part B :- Analysis of Financial Statements
27. (c) Time Series Analysis
Explanation: Horizontal analysis is a time series analysis because it shows comparison of financial data for several
years.

OR

(a) Option (d)

Explanation: Provide information about the profitability of the business. as it is objective of financial statements
28. (b) Stores and spares
Explanation: Quick assets do not include inventories. Stores and spares is the part of inventories. Only liquid assets are
considered in quick assets and stores and spares are considered as illiquid.
29. (a) only i
Explanation: Interest paid. As interest paid is related to borrowings of the company

OR

(a) Operating Activity

Explanation: Cash Receipts from the sale of goods by a trading company come under operating activities of a company.
As it is an operating transaction of the company.

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30. (b) Both B and C
Explanation: Both B and C
31. i. Calls in Arrears: It is deducted from subscribed but not fully paid Capital in balance sheet.
ii. Calls in Advance: It is shown under the head ‘Current Liabilities’ under sub-head ‘Other Current Liabilities’.
iii. Forfeited Shares: It is a part of Share Capital under the head ‘Shareholder’s Funds’. However, it is not added to
Subscribed Capital but shown separately below Subscribed Capital in Notes to Accounts.
iv. Debenture Sinking Fund: It is shown under the head ‘Reserves and Surplus’ on the equities and liabilities side in
balance sheet.
v. Contingent Liability: It appears in notes to accounts below the balance sheet and not shown in balance sheet.
32. Current Ratio = Current Assets

Current Liabilities
=
2.8

Let the Current Liabilities be Rs. x

The Current Assets will be Rs. 2.8 x
Working Capital = Current Assets – Current Liabilities
36,000 = 2.8 X – X = 1.8 X
36,000
X = Current Liabilities= 1.8
= Rs. 20,000
First calculate Current Assets than find Quick Ratio as follows:-
Quick Assets/ Liquid Assets
Quick Ratio = Current Liabilities

Current Assets= 2.8 x 20,000

Liquid Assets = Current Assets – Inventory
Rs. 56,000 – 16,000 = Rs. 40,000
RS .40,000
Quick Ratio = RS ⋅20,000
= 2:1

33. COMMON-SIZE STATEMENT OF PROFIT AND LOSS for the year ended 31st March, 2018 and 2019

Note
Particulars
No.

31st March, 31st March, 31st March, 31st March,

2018 (₹) 2019 (₹) 2018 (%) 2019 (%)

I. Revenue from Operations (Net

10,00,000 12,50,000 100.00 100.00
Sales)

II. Expenses

(a) Purchases of Stock-in-Trade 7,20,000 8,70,000 72.00 69.60

(b) Change in Inventories of

30,000 (20,000) 3.00 (1.60)
Stock-in-Trade

(c) Depreciation and Amortisation

20,000 30,000 2.00 2.40
Expenses

(d) Other Expenses 30,000 50,000 3.00 4.00

Total 8,00,000 9,30,000 80.00 74.40

III. Profit before Tax (I - II) 2,00,000 3,20,000 20.00 25.60

IV. Less: Income Tax 60,000 96,000 6.00 7.68

V. Profit after Tax (III - IV) 1,40,000 2,24,000 14.00 17.92

Revenue from operations is taken as 100% and all other percentages are calculated on a revenue basis.

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OR

COMPARATIVE STATEMENT OF PROFIT & LOSS

for the years ended 31st March 2022 and 2023

Note Absolute Change Percentage Change

S.No. Particulars 20221-22 2022-23
No. (Increase or Decrease) (Increase or Decrease)

1 2 3 4 5

100 = D
C
A B (B - A = C) A
×

₹ ₹ ₹ %
Revenue from
I. 30,00,000 50,00,000 20,00,000 66.67
Operations

II. Less: Expenses

Employee Benefit
3,00,000 4,00,000 1,00,000 33.33
Expenses

Finance Costs 27,00,000 30,00,000 3,00,000 11.11

Other Expenses 50,000 40,000 (10,000) (20.00)

Total Expenses 30,50,000 34,40,000 3,90,000 12.79

Profit/Loss before
III. (50,000) 15,60,000 16,10,000 3,220.00
Tax (I - II)
IV. Less: Tax ____ 6,24,000 6,24,000 ____

Profit/Loss after tax

V. (50,000) 9,36,000 9,86,000 1,972.00
(III - IV)

34. Cash Flow Statement

Particulars (Rs.) (Rs.)

(A) Cash Flow from Operating Activities

Net Profit before Tax and Extraordinary Items (WN 1 ) 1,50,000

Adjustment for Non-Cash and Non-Operative Items :

Add . Depreciation on Plant and Machinery 50,000

Less: Profit on Sale of Machinery (WN 2) (3,000)

Operating Profit before Working Capital Changes 1,97,000

Less : Increase in Inventories (Stock) (25,000)

Cash Generated from Operations 1,72,000

Less: Tax Paid ---

Cash Flow from Operating Activities 1,72,000

(B) Cash Flow from Investing Activities

Sale of Plant and Machinery

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Purchase of Plant and Machinery (WN 2 ) 8,000

Cash Flow from Investing Activities (3,55,000)

(C) Cash Flow from Financing Activities --- (3,47,000)

The issue of Share Capital

Dividend Paid 3,00,000

Cash Flow from Financing Activities (40,000)

Net Increase Cash and Cash Equivalents (A + B + C) 2,60,000

Add: Opening Cash and Cash Equivalents 3,15,000

Closing Cash and Cash Equivalents 4,00,000
Working Notes :
Cash Flow (CF) is the increase or decrease in the amount of money a business, institution, or individual has. In finance,
the term is used to describe the amount of cash (currency) that is generated or consumed in a given time period. There
are many types of CF, with various important uses for running a business and performing financial analysis. Assessing
the amounts, timing and uncertainty of cash flows is one of the most basic objectives of financial reporting.
Understanding the cash flow statement – which reports operating cash flow, investing cash flow and financing cash flow
— is essential for assessing a company’s liquidity, flexibility and overall financial performance.
1. Calculation of Net Profit before Tax and Extraordinary Items :
(Rs.)

Closing Balance as per Surplus, i.e., Balance in Statement of Profit and Loss 2,50,000

Less: Opening Balance as per Surplus, i.e., Balance in Statement of Profit and Loss 1,50,000

1,00,000

Add: Proposed Dividend (Current Year) 50,000

Net Profit before Tax 1,50,000

=======
2. Plant and Machinery Account
Dr. Cr.

Particulars (Rs.) Particulars (Rs.)

To Balance b/d 5,00,000 By Depreciation A/c 50,000

Statement of Profit and Loss(Profit) 3,000 By Bank A/c(Sale) (Rs 5,000 + 60% of 5,000) 8,000

To Bank A/c(Purchases Bal. Fig.) 3,55,000 By Balance c/d 8,00,000

8,58,000 8,58,000
====== ======

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