Aarth's Academy of Commerce

2-C/53 NIT Faridabad, 9910355359

SAMPLE PAPER 7
Class 12 - Accountancy
Time Allowed: 3 hours Maximum Marks: 80

General Instructions:

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

2. This question paper is divided into two parts, Part A and B.

3. Part - A is compulsory for all candidates.

4. Part - B has two options i.e. (i) Analysis of Financial Statements and (ii) Computerised Accounting. Students

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must attempt only one of the given options.

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5. Question 1 to 16 and 27 to 30 carries 1 mark each.

6. Questions 17 to 20, 31and 32 carries 3 marks each.

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7. Questions from 21 ,22 and 33 carries 4 marks each

8. Questions from 23 to 26 and 34 carries 6 marks each

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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

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1. For which of the following situations, the old profit sharing ratio of partners is used at the time of admission of a [1]
new partner?

a) When new partner is not able to bring his b) When new partner brings only a part of his
Aa

share of goodwill. share of goodwill.

c) When at the time of admission, goodwill d) When new partner brings his share of
already exists in the balance sheet. goodwill in cash
2. Assertion (A): In the absence of a Partnership Deed or verbal agreement, no interest is to be allowed to partners [1]
on their capital.
Reason (R): If there is a provision for interest on capital in the Partnership Deed, it will be allowed only when
there is a profit in the firm.

a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.

c) A is true but R is false. d) A is false but R is true.

3. Interest on calls-in-arrears is charged according to Table F at: [1]

a) 10% p.a. b) 5% p.a.

c) 12% p. d) 6% p.a

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 OR
Sunbeam Limited issued 4,000, 6% Debentures of ₹ 100 each at ₹ 95 per debenture. 6% Debentures account will be
credited by:

a) ₹ 4,00,000 b) ₹ 3,80,000

c) ₹ 20,000 d) ₹ 4,40,000
4. VK, MK and JK are partners sharing profits equally. Now they have decided to share future profits in their [1]
capital ratio i.e. 5:3:2. Identify, the partners who are sacrificing.

a) MK and JK b) VK and MK

c) Only VK is sacrificing d) VK and JK

OR
Yogesh and Ram are partners. They draw for personal use ₹ 60,000 and ₹ 40,000 respectively. Interest is chargeable
@ 6% p.a. on Drawings. What is the interest on drawings?

a) Yogesh ₹ 300 and Ram ₹ 200 b) Yogesh ₹ 1,200 and Ram ₹ 1,800

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c) Yogesh ₹ 1,800 and Ram ₹ 1,200 d) Yogesh ₹ 3,600 and Ram ₹ 2,400

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5. If any loan or advance is provided by partner then, balance of such Loan Account should be transferred to: [1]

a) Partner’s Current A/c b) Partner’s Capital A/c

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c) B/S Assets side d) B/S Liability Side
6. Debentures for a longer period which are secured by either fixed charge or floating charge on assets they are [1]
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called ________.

a) Secured Debentures b) Unsecured Debentures

c) Un-registered Debentures d) Bearer Debentures

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OR
If we are purchasing assets from the vendor and in payment we are issuing debentures then which account should be
credited while purchasing an asset?
Aa

a) Assets A/c b) Debenture A/c

c) Vendor A/c d) % Debentures Account

7. Assertion (A): Equity shares are those shares that do not preference shares. [1]
Reason (R): Equity shares are the least issued class of shares and carry the minimum risks and rewards of the
business.

a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.

c) A is true but R is false. d) A is false but R is true.

8. What is the procedure of settlement of deceased partners executor's account? [1]

a) Both Paid off immediately and balance to be b) Paid off immediately

paid in instalments with interest.

c) Paid in instalments without interest d) Paid in instalments with interest

OR

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 X and Y are partners in a firm sharing profits in 3 : 2. They are entitled to interest on their capitals but the net profit
was not sufficient for this interest, then the net profit will be distributed among partners in:

a) Equally b) Profit Sharing Ratio 3 : 2

c) Agreed Ratio d) Ratio of Appropriation (Ratio of Interest on

capital payable to them)

Question No. 9 to 10 are based on the given text. Read the text carefully and answer the questions: [2]
Govind and Vinod formed a partnership to sell low sodium, plant based vegan snacks. Since both of them had a family,
they decided to withdrew a salary of ₹ 12,000 per quarter. Govind also withdrew ₹ 1,00,000 on 31st December, 2020 to
get his wife treated for Covid 19.
The partnership deed provided for 10% interest on drawings.
Vinod introduced ₹ 50,000 as additional capital on 31st January, 2021. The net distributable profit was ₹ 2,00,000
which was divided by the partners after providing 25% to General Reserve.
9. Total amount of salary credited to partners’ account is ________.

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a) ₹ 12,000 b) ₹ 48,000

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c) ₹ 96,000 d) ₹ 24,000
10. Interest on Govind’s drawings will be ________.

a) ₹ 10,000 b) ₹ 2,500
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c) ₹ 5,000 d) ₹ 7,500
11. Number of partners in a partnership firm may be: [1]
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a) Maximum One Hundred b) Maximum Fifty

c) Maximum Two d) Maximum Ten

12. What type of equity shares can be issued at discount? [1]
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a) Redeemable Equity Shares b) Sweat Equity Shares

c) All type of Equity Shares d) Preference Shares

Aa

13. X Ltd. forfeited 1200 shares of ₹ 10 each, ₹ 6 called up, for non-payment of First Call of ₹ 2 per share. Journal [1]
entry for forfeiture of share will be (Calls in arrear account is not opened)

a) Share capital A/c Dr. 1200 b) Share capital A/c Dr. 7200

To Share forfeiture A/c 4800 To Share forfeiture A/c 4800

To Calls in arrear A/c 7200 To Equity share 1st call

2400
A/c

c) Share capital A/c Dr. 12000 d) Share capital A/c Dr. 7200

To Share forfeiture A/c 4800 To Share forfeture A/c 4800

To Equity share 1st call To Calls in arrear A/c 2400

7200
A/c

14. What average period is used to calculate interest on drawings of equal amounts drawn at the end of each quarter? [1]

a) 7.5 b) 6.5

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 c) 5.5 d) 4.5
15. New profit sharing ratio means [1]

a) Two partner (including new) share future b) All partner(including new) share future
profit and losses profit and losses in this new ratio

c) All partner (excluding old) share future d) Partners will share future profits equally
profit and losses
OR
Generally Sacrificing ratio is used to distribute ________ in case of admission of a new partner.

a) Profit shown by Profit and Loss b) Profit shown by Revaluation Account

Appropriation Account

c) Premium for goodwill d) General Reserve

16. As per the dissolution of Garner Vs. Murray, the solvent partners are to being cash equal to their share of loss: [1]

a) Personal debts b) Bad debts

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c) Realisation d) None of these

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17. P, Q and R are partners sharing profits and losses in the ratio of 5 : 3 : 2. From 1st April, 2023, they decide to [3]

share profits and losses in equal proportions. The partnership deed provides that in the event of any change in
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profit sharing ratio, the goodwill should be valued at three year’s purchase of the average of five year’s profits.

The profits and losses of the preceding five years ending 31st March are:
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Profits: 2019: ₹ 60,000, 2020: ₹ 1,50,000, 2021: ₹ 1,70,000, 2022: ₹ 1,90,000.

Loss : 2023: ₹ 70,000.
Give the necessary journal entry to record the above change.
18. L, M and N partners have omitted interest on capitals for three years ended on 31st March, 2023. Their fixed [3]
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capitals in three years were L ₹40,000, M ₹ 25,000, N ₹ 15,000. Rate of interest on capital is 12% p.a. Their
profit-sharing ratios were 2021 - 5 : 2 : 1, 2022 - 3 : 2 : 1, 2023 - 2 : 1 : 1. Give the necessary adjusting entry.
Aa

OR
Mohan, Sohan and Suresh were partners in a firm sharing profits in the ratio of 2 : 2 : 1. Suresh was guaranteed a
profit of ₹ 70,000. Any deficiency on account of guarantee to Suresh was to be borne by Mohan and Sohan in 3 : 2
ratio. The profit of the firm for the year ended 31.3.2022 amounted to ₹ 2,00,000.
Prepare Profit and Loss Appropriation Account of the firm for the year ended 31.3.2022.
19. Z Ltd purchased machinery from K Ltd, Z Ltd, paid K Ltd as follows [3]
i. By issuing 5,000 equity shares of ₹ 10 each at a premium of 30%.
ii. By issuing 1,000, 8% debentures of ₹ 100 each at a discount of 10%.
iii. Balance by giving a promissory note of ₹ 48,000 payable after two months.
Pass necessary journal entries for the purchase of machinery and payment to K Ltd in the books of Z Ltd.
OR
A company forfeited 200 shares of ₹ 20 each, ₹ 15 per share called-up on which ₹ 10 per share had been paid.
Directors reissued all the forfeited shares to B as ₹ 15 per share paid-up for a payment of ₹ 10 each.
Give Journal entries in the books of the company for forfeiture and reissue of shares.
20. A and B are partners sharing profits and losses in the ratio of 3 : 2. They agree to take C into a partnership for [3]

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 1

3
rd share. For this purpose, goodwill is to be valued at two year’s purchase of the average profit of last four
years which were as follows:

Year ending on 31st March 2020 50,000 (Profit)

Year ending on 31st March 2021 1,20,000 (Profit)

Year ending on 31st March 2022 1,80,000 (Profit)

Year ending on 31st March 2023 70,000 (Loss)

On 1st April, 2022 a Motor bike costing ₹ 50,000 was purchased and debited to travelling expenses account, on
which depreciation is to be charged @ 20% p.a.
The firm also paid an annual insurance premium of ₹ 20,000 which had already been charged to Profit and Loss
Account for all the years. Calculate the value of goodwill.
21. What amount of gain on reissue will be transferred to Capital Reserve under the following situations? [4]

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i. 3,000 shares of ₹ 10 each of Ritik was forfeited by crediting ₹ 5,000 to Forfeited Shares Account. Out of

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these, 1,800 shares were reissued to Manish for ₹ 9 per share fully paid-up.
ii. Z Ltd. forfeited 20 shares of ₹ 100 each 60 (₹ 60 called-up) issued at par to Jay on which he paid ₹ 20 per
share. Out of these, 15 shares were reissued to Raman as ₹ 60 paid-up for ₹ 45 per share.
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22. Give the necessary journal entries for the following transactions on the dissolution of the firm of Amit and Rahul [4]
on 31st March, 2023, after the transfer of various assets (other than cash) and the third party liabilities to
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Realisation Account. They shared profits and losses in the ratio of 2 : 1.

i. There was a bill of exchange of ₹ 10,000 under discount. The bill was received from Dinesh who became
insolvent.
ii. Bills Payable of ₹ 30,000 falling due on 30th April, 2023 was discharged at ₹ 29,550.
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iii. Creditors of ₹ 30,000 took an over stock of ₹ 10,000 at 10% discount and the balance was paid to them in
cash.
Aa

iv. There was an old typewriter that had been written off completely. It was estimated to realize ₹ 600. It was
taken away by Rahul at 25% less than the estimated price.
v. Amit agreed to take over the responsibility of completing dissolution at an agreed remuneration of ₹ 1,000
and to bear all realization expenses. Actual realisation expenses ₹ 800 were paid by the firm.
vi. Loss on realization was ₹ 54,000.
23. Kerala Silk Ltd. issued a prospectus inviting applications for 40,000 shares of ₹ 10 each at a premium of ₹ 8 per [6]
share, payable as follows:

On Application ₹ 6 (including ₹ 2 premium)

On Allotment ₹ 6 (including ₹ 2 premium)

On First Call ₹ 3 (including ₹ 2 premium)

On Second & Final Call ₹ 3 (including ₹ 2 premium)

Applications were received for 80,000 shares and pro-rata allotment was made on the applications for 70,000
shares. It was decided to utilise excess application money towards the sums due on allotment.
X, to whom 1,200 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay

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 the first call his shares were forfeited.
Y, who applied for 3,500 shares failed to pay the two calls and on his such failure, his shares were also forfeited.
Of the shares forfeited, 2,500 shares were reissued as fully paid up for ₹ 9 per share, the whole of Y's shares
being included. Prepare Cash Book and Journal entries.
OR
New India Steel Ltd. invited applications for 50,000 equity shares of ₹ 10 each at a premium of ₹ 4 per share. The
amount was payable as follows:

On Application ₹ 4 (including premium ₹ 2)

On Allotment ₹ 6 (including premium ₹ 2)

On First and Final Call Balance

Applications for 60,000 shares were received. Allotment was made to all the applicants on a pro-rata basis. Excess
application money was adjusted towards sums due on allotment. Pankaj, to whom 500 shares were allotted, failed to
pay allotment and call money. Ajay, to whom 1,000 shares were allotted, failed to pay the call money. These shares
were forfeited. Out of the forfeited shares 1,200 shares (including all shares of Ajay) were re-issued at 10% discount

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as fully paid-up.

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Pass the necessary journal entries in the books of the company by opening Calls in Arrears A/c wherever necessary.
24. Pradip and Subal are partners sharing profits and losses in the ratio of 5 : 3 agreed to take Kuntal on Jan. 1, [6]
1991. Their Balance Sheet on that date was as follows :
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Liabilities (Rs) Assets (Rs)

Capital Accounts: Machinery 38,000

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Pradip 60,000 Furniture 15,000

Subal 40,000 1,00,000 Investments 21,000

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Profit and Loss A/c 20,000 Stock 19,000

Sundry Creditors 18,000 Sundry Creditors 27,000

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Less: Provision 3,000 24,000

Cash at Bank 21,000

1,38,000 1,38,000

The following terms were agreed upon for the purpose of admission :
a. Kuntal introduced Rs 38,000 as his Capital and necessary amount of Premium for Goodwill in cash.
Goodwill valued for the said purpose Rs 45,000.
b. 1/3rd of the Provision for Doubtful Debts is no longer required.
c. Machinery and Furniture were depreciated by 5% and 10% respectively.
d. Last year’s showroom rent for 4 months @ Rs 1,000 p.m. not taken into account and as such it is to be
considered now.
The profit sharing ratio of the partners in the new firm is 4 : 3 : 2.
Give the necessary Ledger accounts and the Balance Sheet of the new firm.
OR
Ankush, Bhuvesh and Mukul were partners in a firm sharing profits in the proportion of and respectively.
1 1 1
,
2 3 6

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 Mukul retired on 1st April, 2023. The balance sheet of the firm on the date of Mukul’s retirement was as follows:
BALANCE SHEET

as on 1st April, 2023

Liabilities (₹) Assets (₹)

Sundry Creditors 12,600 Bank 4,100

Employee's Provident Fund 3,000 Debtors 30,000

General Reserve 9,000 Less: Provision for Doubtful Debts (1,000) 29,000

Capital A/c's Stock 25,000

Ankush 40,000 Investments 10,000

Bhuvesh 36,500 Patents 5,000

Mukul 20,000 96,500 Machinery 48,000

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1,21,100 1,21,100

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It was agreed that:
i. Goodwill will be valued at ₹ 27,000.
ii. Depreciation of 10% was to be provided on machinery.
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iii. Patents were to be reduced by 20%.
iv. An old photocopier previously written off was sold for ₹ 600
v. Mukul took over investments for ₹ 15,800.
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vi. Ankush and Bhuvesh decided to adjust their capitals in proportion of their profit sharing ratio by opening current
accounts.
Prepare revaluation account and partners’ capital accounts on Mukul’s retirement.
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25. X, Y and Z are partners sharing profits and losses in the ratio of 3 : 2 : 1. Balance Sheet of the firm as at 31st [6]
March, 2023 was as follows:
Aa

Liabilities ₹ Assets ₹

Creditors 21,000 Cash at Bank 5,750

Workmen Compensation Reserve 12,000 Debtors 40,000

Investments Fluctuation Reserve 6,000 Less: Provision for Doubtful Debts (2,000) 38,000

Capital A/cs; Stock 30,000

X 68,000 Investment (Market Value ₹ 17,600) 15,000

Y 32,000 Patents 10,000

Z 21,000 1,21,000 Machinery 50,000

Goodwill 6,000

Advertisement Expenditure 5,250

1,60,000 1,60,000

Z retired on 1st April, 2023 on the following terms:

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 i. Goodwill of the firm is to be valued at ₹ 34,800.
ii. Value of Patents is to be reduced by 20% and that of machinery to 90%.
iii. Provision for doubtful debts is to be created @ 6% on debtors.
iv. Z took over the investment at market value.
v. Liability for Workmen Compensation to the extent of ₹ 750 is to be created.
vi. A liability of ₹ 4,000 included in creditors is not to be paid.
vii. Amount due to Z to be paid as follows:
₹ 5,067 immediately, 50% of the balance within one year and the balance by a draft for 3 Months.
Give necessary Journal entries for the treatment of goodwill, prepare Revaluation Account, Capital Accounts
and the Balance Sheet of the new firm.
26. Give the journal entries at the time of issue of debentures in the following cases: [6]
i. Issued ₹ 5,00,000, 12% debentures at par and redeemable at par after 5 years.
ii. Issued ₹ 8,00,000, 11% debentures at 6% discount, redeemable at par after 4 years.
iii. Issued ₹ 10,00,000, 14% debentures at 5% premium, redeemable at par after 4 years.

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iv. Issued ₹ 20,00,000, 12% debentures at par, redeemable at 5% premium after 3 years.
v. Issued ₹ 12,00,000, 13% debentures at 4% discount, redeemable at 6% premium after 3 years.

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Part B :- Analysis of Financial Statements
27. Financial analysis becomes useless because it: [1]
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a) measures the Solvency b) lacks Qualitative Analysis

c) makes a comparative study d) measures the profitability

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OR
Gain (Profit) on sale of fixed assets by a non-financial company is shown in the Statement of Profit and Loss as:

a) Receivables b) Revenue from Operations

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c) Receipts d) Other Income

28. Working Capital ₹ 2,50,000; Current ratio 2.6 : 1; Prepaid expense ₹ 6,250. Liquid ratio will be: [1]
Aa

a) 2.56 : 1 b) 2.6 : 1

c) 1.56 : 1 d) 1.6 : 1
29. In cash flow statement, the item of interest is shown in [1]
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
OR
While preparing Cash Flow Statement, Interest received by a finance company is classified as:

a) Operating activity b) Investing activity

c) Cash and cash equivalents d) Financing activity

30. While calculating the cash flow statement from investment activities following items should be added except? [1]

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 a) Cash paid for purchase of Non-current b) Interest received
Investment

c) Cash received from sale of fixed assets d) Cash received from sale of investments
31. Compute Revenue from Operations, Other Income and Total Revenue for a financial company from the [3]
following particulars:

Interest on loans given 40,00,000

Fees received for arranging loans 5,00,000

Miscellaneous Income 15,000

Profit on sale of Building 2,00,000

Profit on sale of Investments 1,20,000

32. From the following information calculate any two of the following ratios: [3]

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i. Gross Profit Ratio,

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ii. Working Capital Turnover Ratio, and
iii. Proprietary Ratio
Information:
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Paid-up capital ₹ 8,00,000

Current assets ₹ 5,00,000

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Credit Revenue from Operations ₹ 3,00,000

Cash Revenue from Operations 75% of Credit Sales

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9% Debentures ₹ 3,40,000

Current liabilities ₹ 2,90,000

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Cost of Revenue from Operations ₹ 6,80,000

33. Prepare a comparative statement of profit and loss from the following information extracted from the statement [4]
of profit and loss of Fun Sports Ltd for the year ended 31st March, 2015.

Particulars 31st March, 2015 Amt (Rs.) 31st March, 2014 Amt (Rs.)

Revenue from Operations 70,00,000 50,00,000

Employee Benefit Expenses 35,00,000 20,00,000

Depreciation 8,00,000 5,00,000

Other Expenses 16.,00,000 12,00,000

Tax Rate 40% 40%

OR
Prepare a Common Size Statement of Profit & Loss from the following:

Particulars Note No. 31st March 2022 31st March 2023

Revenue from Operations 48,00,000 30,00,000

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 Purchase of Stock in Trade 32,64,000 21,00,000

Change in Inventories (1,92,000) (90,000)

Other Expenses 3,36,000 1,50,000

Other Income 72,000 60,000

Income Tax (40%)

34. From the following Balance Sheet and information of Fly Ltd., prepare Cash Flow Statement: [6]

Note 31st March, 31st March,

Particulars
No. 2023 (₹) 2022 (₹)

I. EQUITY AND LIABILITIES

1. Shareholders' Funds

(a) Share Capital 1 4,50,000 5,00,000

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(b) Reserves and Surplus 2 2,55,000 1,00,000

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2. Non-Current Liabilities

Long-term Borrowings (10% Debentures) 2,00,000 1,00,000

3. Current Liabilities
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(a) Trade Payables 1,33,000 46,000
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(b) Other Current Liabilities 3 5,000 10,000

(c) Short-term Provisions (Provision for Tax) 12,000 24,000

Total 10,55,000 7,80,000

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II. ASSETS

1. Non-Current Assets
Aa

(a) Property, Plant and Equipment and Intangible Assets: -

6,20,000 5,10,000
Property, Plant and Equipment

(b) 10% Investments 80,000 30,000

2. Current Assets

(a) Current Investments 10,000 8,000

(b) Inventories 90,000 1,00,000

(c) Trade Receivables 4 1,85,000 90,000

(d) Cash and Cash Equivalents 70,000 42,000

Total 10,55,000 7,80,000

Notes to Accounts

Particulars 31st March, 2023 (₹) 31st March, 2022 (₹)

1. Share Capital

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 Equity Share Capital 3,50,000 3,00,000

12% Preference Share Capital 1,00,000 2,00,000

4,50,000 5,00,000

2. Reserves and Surplus

Securities Premium Reserve 5,000 ____

Surplus, i.e., Balance in Statement of Profit and Loss 2,50,000 1,00,000

3. Other Current Liabilities

Premium on Redemption of Preference Shares 5,000 10,000

4. Trade Receivables

Sundry Debtors 2,00,000 1,00,000

Less: Provision for Doubtful Debts 15,000 10,000

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1,85,000 90,000

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You are informed that during the year:
i. A machine with a book value of ₹ 40,000 was sold for ₹ 25,000.
ii. Depreciation charged during the year was ₹ 70,000
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iii. Preference Shares were redeemed an 31st December, 2022 at a premium of 5%.
iv. An Interim Dividend @ 15% was paid on Equity Shares on 31st January, 2023.
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v. Dividend @ 12% was proposed on Preference Shares for the year ended 31st March, 2023 on ₹ 1,00,000 and
for the year ended 31st March, 2022 on ₹ 2,00,000.
vi. Fresh Equity Shares were issued at a premium of 10% on 31st March, 2023.
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Aa

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