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Class 12 - Accountancy
Sample paper - 02 (2024-25)

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. Aditi and Bobby were partners with capitals of ₹ 30,000 each. They admitted Chetan as a new partner for 1

4
share in the
profits of the firm. Chetan brought ₹ 48,000 as his capital. On Chetan's admission, the Profit and Loss Account of the
firm showed a credit balance of ₹ 24,000. Value of goodwill of the firm on Chetan's admission will be:
a) ₹ 40,000
b) ₹ 60,000
c) ₹ 75,000
d) ₹ 30,000
2. B and D were partners. According to the provisions of partnership deed, interest on B's capital for the year ended
31.03.2022 was calculated at ₹ 4,000.
The necessary journal entry for transferring interest on B's capital to Profit and Loss Appropriation Account will be:
a)
Profit and Loss Appropriation A/c Dr. ₹ 4,000

To B's Capital A/c ₹ 4,000

b)
Interest on B's Capital A/c Dr. ₹ 4,000

To Profit and Loss Appropriation A/c ₹ 4,000

c)
Profit and Loss Appropriation A/c Dr. ₹ 4,000

To B's Current A/c ₹ 4,000

d)
Profit and Loss Appropriation A/c Dr. ₹ 4,000

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To Interest on B's Capital A/c ₹ 4,000
3. Manmohan Ltd. invited applications for issuing 50,000 equity shares of ₹ 10 each at par. The amount payable per share
was as follows:
On application ₹ 3; on allotment ₹ 4 and on first and final call ₹ 3.
Applications were received for 1,45,000 equity shares. Applications for 20,000 equity shares were rejected and
remaining applicants were allotted shares on a pro-rata basis. Excess application money received with application was
adjusted towards sums due on allotment and first and final call. Amount credited to calls-in-advance account was:
a) ₹ 25,000
b) Nil
c) ₹ 2,25,000
d) ₹ 1,75,000

OR

On 1st April 2021, Narmada Ltd. issued 5,000, 8% Debentures of ₹ 100 each at a premium of 10%. The total amount of
interest on debentures for the year ending 31st March, 2022 will be:
a) ₹ 25,000
b) ₹ 40,000
c) ₹ 20,000
d) ₹ 50,000
4. Niva, Naman and Nityam were partners sharing profits in the ratio of 4 : 3 : 2. Niva and Naman each give 1

9
from their
share to Nityam on reconstitution of the firm. The new profit sharing ratio among Niva, Naman and Nityam will be:
a) 2 : 3 : 4
b) 3 : 4 : 2
c) 4 : 2 : 3
d) 3 : 2 : 4

OR

A and B were partners in a firm sharing profits and losses in the ratio of 3 : 2. On 1st April, 2021 the balances in their
capital accounts were ₹ 1,50,000 and ₹ 2,00,000 respectively. The partnership deed provided that interest on partners
capital will be allowed @ 10% per annum. During the year ended 31st March, 2022, the firm incurred a loss of ₹ 10,000.
Interest on A's capital will be:
a) ₹ 6,000
b) Nil
c) ₹ 15,000
d) ₹ 9,000
5. Amit, Sumit and Kiara are partners sharing profits and losses in the ratio 2 : 2 : 1. Sumit is entitled to a commission of
15% on the net profit after charging such commission. The net profit before charging commission is ₹ 9,20,000. The
amount of commission payable to Sumit will be:
a) ₹ 55,200
b) ₹ 48,000
c) ₹ 1,38,000
d) ₹ 1,20,000
6. The debentures which are payable on the expiry of a specified period either in lump-sum or in instalments during the life
time of the company are known as:
a) Convertible debentures

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b) Redeemable debentures
c) Secured debentures
d) Specific coupon rate debentures

OR

Premier Auto Ltd. purchased assets of the value of ₹ 3,60,000 from Anand Ltd. and made the payment of purchase
consideration by issuing 11% Debentures of ₹ 100 each at a discount of 10%. The number of debentures issued by
Premier Auto Ltd. were:
a) 40,000
b) 36,000
c) 3,600
d) 4,000
7. Vanya Ltd. forfeited 20,000 equity shares of ₹ 100 each for non-payment of first and final call of ₹ 40 per share. The
maximum amount of discount at which these shares can be reissued will be:
a) ₹ 12,00,000
b) ₹ 8,00,000
c) ₹ 20,00,000
d) ₹ 20,000
8. A, B and C were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. C retired and his capital balance
after adjustments regarding reserves, accumulated profits/losses and his share of gain on revaluation was ₹ 2,50,000. C
was paid ₹ 3,22,000 including his share of goodwill. The amount credited to C’s Capital Account, on his retirement, for
goodwill will be:
a) ₹ 24,000
b) ₹ 72,000
c) ₹ 7,200
d) ₹ 36,000

OR

Aman and Chaman are partners in a firm. On 1st July, 2021 Aman advanced a loan of ₹ 6,00,000 to the firm. There is no
partnership deed. On 31st March, 2022, Aman was entitled to get the following amount as interest on loan:
a) ₹ 36,000
b) ₹ 27,000
c) ₹ 9,000
d) ₹ 18,000

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

Mohit and Sonu are equal partner Their capitals as on 1st April, 2020 are 1,00,000 and 2,00,000 respectively. Profits for
the year 2020-21 were ₹ 90,000. As per the agreement, interest on capitals was ₹ 10,000 and ₹ 20,000 respectively and
interest on drawings was ₹ 6,000 and ₹ 10,000 respectively. Mohit’s salary was ₹ 2,000 p.m. and Sonu’s salary was ₹
5,000 p.a.
Accountant, however, committed the mistake and credited the profit in the capital ratio, Without interest on capitals,
drawings and salary.

9. With what amount was Sonu’s account credited with initially?

a) ₹ 45,000

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b) ₹ 30,000
c) ₹ 60,000
d) 90,000
10. What was the total salary required to be credited?
i. ₹ 70,000
ii. ₹ 84,000
iii. ₹ 29,000
iv. ₹ 48,000
a) Option (iv)
b) Option (ii)
c) Option (i)
d) Option (iii)
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11. Mohit and Rohit were partners in a firm with capitals of ₹ 80,000 and ₹ 40,000 respectively. The firm earned a profit of ₹
30,000 during the year. Mohit's share in the profit will be:
a) ₹ 18,000
b) ₹ 15,000
c) ₹ 20,000
d) ₹ 10,000
12. On forfeiture of 100 shares of ₹ 50 each, ₹ 2,500 were credited to share forfeited account. These shares were re-issued at
₹ 25 per share fully paid up. The amount credited to Capital Reserve Account will be:
a) No amount
b) ₹ 5,000
c) ₹ 3,000
d) ₹ 2,500
13. Which of the following statements does not relate to Reserve Capital:
a) It is part of subscribed capital.
b) It is part of uncalled capital of a company.
c) It cannot be used during the lifetime of a company.
d) It can be used for writing off capital losses.
14. Manu and Kanu were partners in a firm, sharing profits and losses in the ratio of 2 : 3. Their fixed capitals were ₹
10,00,000 and ₹ 5,00,000, respectively. They were entitled to an interest on capital @ 10% p.a. The firm earned a profit
of ₹ 60,000 during the year. The amount of interest on capital credited to Kanu will be:
a) ₹ 36,000
b) ₹ 24,000
c) ₹ 40,000
d) ₹ 20,000
15. Mini and Mansi are partners sharing profits in the ratio of 4 : 3. They admitted Nisha as a new partner for
3 th share in
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profits which she acquired 2 th from Mini and 1 th from Mansi. The new profit sharing ratio of Mini, Mansi and Nisha
7 7

will be:
a) 5 : 3 : 2
b) 2 : 3 : 5
c) 2 : 2 : 3
d) 4 : 3 : 3

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OR

Vijay, Ajay and Sanjay are partners in a firm sharing profits and losses in the ratio of 7 : 5 : 8. Sanjay died on 28th
August, 2021. His share in the profits of the firm till the date of his death was determined at ₹ 75,000. It will be debited
to which of the following accounts?
a) Profit and Loss Account
b) Profit and Loss Suspense Account
c) Profit and Loss Adjustment Account
d) Profit and Loss Appropriation Account
16. In which of the following conditions is a partnership firm dissolved by Agreement?
a) In accordance with a contract between the partners
b) When the business of the firm becomes illegal
c) When a partner becomes insane
d) If any one of the partners gives a notice in writing to the other partners
17. A, B and C were partners sharing profits in the ratio of 5 : 4 : 3. They decided to change their profit-sharing ratio to 2 : 2
: 1 w.e.f. 1st April, 2023. On that date, there was a balance of ₹ 3,00,000 in General Reserve and a debit balance of ₹
4,80,000 in the Profit & Loss Account. Pass necessary Journal entries for the above on account of change in the profit-
sharing ratio.
18. Radha and Raman are partners in a firm sharing profits and losses in the ratio of 5:2. Capital contributed by them is Rs.
50,000 and Rs. 20,000 respectively. Radha was given salary of Rs. 10,000 and Raman Rs. 7,000 per annum. Radha
advanced loan of Rs. 20,000 to firm without any agreement to rate of interest in deed while in deed rate of interest on
capital was mentioned as 6% p.a. Profits for the year are Rs. 29,400. Prepare Profit and Loss Appropriation Account for
the year ending 31st March 2015.

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. Garvit Ltd. invited applications for issuing 3,000, 11% Debentures of ₹ 100 each at a discount of 6%. The full amount
was payable on application. Applications were received for 3,600 debentures. Applications for 600 debentures were
rejected and the application money was refunded. Debentures were allotted to the remaining applicants. Pass the
necessary journal entries for the above transactions in the books of Garvit Ltd.

OR

Pass Journal entries in the following cases.

NH Ltd. forfeited 200 shares of ₹ 10 each, issued at a premium of ₹ 5 per share, held by Ravi for non-payment of the
final call of ₹ 3 per share. Of these, 100 shares were reissued to Vishal at a discount of ₹ 4 per share.
20. Calculate goodwill of the firm on the basis of 3 year’s purchase of the average profits of the last five years. The profits of
the last five years were:
Year Amount (₹)
2013-14 4,00,000

2014-15 5,00,000

2015-16 (60,000)

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2016-17 1,50,000

2017-18 2,50,000

Additional Information:
i. On 1st January, 2016, a fire broke out which resulted into a loss of goods of ₹ 3,00,000. A claim of ₹ 70,000 was
received from the insurance company.
ii. During the year ended 31st March, 2018 the firm received an unexpected tax refund of ₹ 80,000.
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21. The authorised capital of Suhas Ltd is Rs. 50,00,000 divided into 25,000 shares of Rs. 200 each. Out of these, the
company issued 12,000 shares of Rs. 200 each at a premium of 10%. The amount per share was payable as follows
Rs. 60 on application
Rs. 60 on allotment (including premium)
Rs. 30 on first call and balance on final call.
Public applied for 11,000 shares. All the money was duly received.
Prepare an extract of balance sheet of Suhas Ltd as per Revised Schedule III, Part I of the Companies Act, 2013
disclosing the above information. Also prepare ‘Notes to accounts’ for the same.
22. Give journal entries in each of the following alternative cases on the dissolution of a firm:
i. Realisation expenses paid by X on behalf of the firm.
ii. Realisation expenses paid by the firm ₹ 1,000. However, the expenses were to be borne by partner X for which he
was to be given a commission of 5% on net cash realised on dissolution. Cash realised from assets was ₹ 2,00,000
and cash paid for liabilities was ₹ 40,000.
iii. General Reserve appearing in the balance sheet was ₹ 20,000.
iv. Sundry Creditors amounted to ₹ 15,000. These were paid at a discount of 2%.
23. Anurag Ltd. invited applications for issuing 1,00,000 equity shares of ₹ 10 each at a premium of 10%. The amount was
payable as follows:
On application ₹ 3 per share
On allotment ₹ 3 per share (including premium)

On first call ₹ 2 per share

On second and final call Balance

Applications for 1,50,000 shares were received. The directors decided to reject applications for 50,000 shares and to
refund the excess application money in full. Gopal, holding 600 shares, failed to pay the first call and the second and
final call.
Pass the necessary journal entries for the above transactions in the books of Anurag Ltd. Open Calls-in-Arrears Account,
wherever necessary.

OR

Sanjay Ltd. invited applications for issuing 80,000 equity shares of ₹ 100 each at a premium. The amount was payable as
follows:
On Application - ₹ 20 per share;
On Allotment - ₹ 60 (including premium) per share;
On First and Final call - ₹ 40 per share.

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Applications for 1,20,000 shares were received. Allotment was made on pro-rata basis to all the applicants. Excess
money received on applications was adjusted on sums due to allotment. Siyaram, who had applied for 6,000 shares failed
to pay the allotment money and Harman did not pay first and final call on 800 shares allotted to him. The shares of
Siyaram and Harman were forfeited. 4,200 of these shares were reissued for ₹ 100 per share as fully paid-up. The
reissued shares included all the forfeited shares of Harman. Pass necessary Journal entries for the above transactions in
the books of Sanjay Ltd.
24. Atal and Madan were partners in a firm sharing profits in the ratio of 5 : 3. On 31st March, 2011 they admitted Mehra as
a new partner for 1/5th share in the profit. The new profit sharing ratio was 5 :3 :2 . On Mehra’s admission, the balance
sheet of the firm was as follows

Balance Sheet
as at 31st March, 2011

Liabilities Amt(Rs) Assets Amt(Rs)

Provision for Bad Debt 1,200 Land and Building 1,50,000
Creditors 20,000 Machinery 40,000

Workmen Compensation Fund 32,000 Patents 5,000

Capital A/cs Stock 27,000
Atal 1,50,000 Debtors 47,000

Madan 90,000 2,40,000 Cash 4,200

Profit and Loss A/c 20,000
2,93,200 2,93,200

On Mehra’s admission, it was agreed that

1. Mehra will bring Rs 40,000 as his capital and Rs 16,000 for his share of goodwill premium, half of which was
withdrawn by Atal and Madan.
2. A provision of 2.5% for bad and doubtful debt was to be created.
3. Included in the sundry creditors was an item of Rs 2,500 which was not to be paid.
4. A provision was to be made for an outstanding bill for electricity Rs 3,000.
5. A claim of Rs 325 for damages against the firm was likely to be admitted. Provision for the same was to be made.
After the above adjustment, the capitals of Atal and Madan were to be adjusted on the basis of Mehra’s capital.
Actual cash was to be brought in or to be paid off to Atal and Madan, as the case may be. Prepare revaluation
account, capital accounts of the partners and the balance sheet of the new firm.

OR

L, M and N were partners in a firm sharing profits in the ratio of 2 : 1 : 1. On 1st April, 2013 their balance sheet was as
follows:

Balance Sheet
as at 1st April, 2013

Liabilities Amount Assets Amount

(Rs) (Rs)

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General Reserve 4,40,000 Land 8,00,000
Building
Workmen's Compensation Fund 3,60,000 6,00,000

Creditors 2,40,000 Furniture 2,40,000

Debtors
Capital A/cs
4,00,000
L (-) Provision for Doubtful Debts
3,80,000
6,00,000 20,000
M
Stock 4,40,000
4,80,000

N
15,60,000 Cash 1,40,000
4,80,000

26,00,000 26,00,000
======== =======

On the above date, N retired. The following were agreed:

i. Goodwill of the firm was valued at Rs 6,00,000.
ii. Land was to be appreciated by 40% and building was to be depreciated by Rs 1,00,000.
iii. Furniture was to be depreciated by Rs 30,000.
iv. The liabilities for workmen’s compensation fund was determined at Rs 1,60,000.
v. Amount payable to N was transferred to his loan account.
vi. Capitals of L and M were to be adjusted in their new profit sharing ratio and for this purpose current accounts of the
partners will be opened.

Prepare revaluation account, partner's capital accounts and the balance sheet of the new firm.
25. Gita, Radha and Garv were partners in a firm sharing profits and losses in the ratio of 3:5:2. On 31st March, 2019, their
balance sheet was as follows:

Balance Sheet of Gita, Radha & Garv as on 31st March, 2019

Amount
Liabilities Assets Amount (₹)
(₹)
Sundry Creditors 60,000 Cash 50,000

General Reserve 40,000 Stock 80,000

Capitals : Debtors 40,000
Gita 3,00,000 Investments 30,000

Radha 2,00,000 Buildings 5,00,000

Garv 1,00,000 6,00,000
7,00,000 7,00,000

Radha retired on the above date and it was agreed that:

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a. Goodwill of the firm be valued at ₹ 3,00,000 and Radha’s share be adjusted through the capital accounts of Gita and
Garv.
b. Stock was to be appreciated by 20%.
c. Buildings were found undervalued by ₹ 1,00,000 .
d. Investments were sold for ₹ 34,000 .
e. Capital of the new firm was fixed at ₹ 5,00,000 which will be in the new profit sharing ratio of the partners; the
necessary adjustments for this purpose were to be made by opening current accounts of the partners.

Prepare Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of the reconstituted firm on Radha’s
retirement.
26. Pass necessary journal entries for the following transactions relating to the issue of debentures:
a. Gagan Limited issued ₹ 10,00,000, 9% Debentures of ₹ 100 each at a premium of 5%, redeemable at par after four
years.
b. KS Limited issued ₹ 10,00,000, 10% Debentures of ₹ 100 each at par, redeemable at 10% premium after four years.
c. QR Limited issued ₹ 10,00,000, 9% Debentures of ₹ 100 each at a discount of 10%, redeemable at a premium of 5%
after five years.
Part B :- Analysis of Financial Statements
27. Creditors or suppliers are interested to know the:
a) short-term solvency/liquidity of the concern
b) profitability of the firm in relation to investments
c) effective utilisation of its (firm's) resources
d) profitability of the firm in relation to turnover

OR

Which of the following is fictitious Asset?

a) Preliminary Expense
b) Goodwill
c) Income Tax
d) Loose Tools
28. Which of the following equations is correct:
a) Cost of Revenue from Operations = Revenue from Operations - Gross Profit
b) Cost of Revenue from Operations = Opening Inventory - Net Purchases + Direct Expenses - Closing Inventory
c) Cost of Revenue from Operations = Revenue from Operations + Gross Profit
d) Cost of Revenue from Operations = Opening Inventory + Closing Inventory
29. An investment normally qualifies as cash-equivalent only when from the date of acquisition it has a short maturity period
of:
a) One month or less
b) Three months or less
c) Three months or more
d) One year or less

OR

Paid ₹ 4,00,000 to acquire shares in R.V. Ltd. and received a dividend of ₹ 40,000 after acquisition. These transactions
will result in
a) Cash used in investing activities ₹ 3,60,000.
b) Cash used in investing activities ₹ 4,00,000.

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c) Cash generated from financing activities ₹ 4,40,000.
d) Cash generated from financing activities ₹ 3,60,000.
30. Machinery was purchased for ₹ 10,00,000, paying 40% by issue of equity shares of ₹ 10 each and the balance by a
cheque. This transaction will result in:
a) Decrease in cash and cash equivalents ₹ 10,00,000
b) Cash used in investing activities ₹ 6,00,000.
c) Cash used in investing activities ₹ 10,00,000.
d) Cash generated from financing activities ₹ 4,00,000.
31. State the major headings under which the following items will be put as per Schedule III, Part I of the Companies Act,
2013.
i. Long-term investments
ii. Trade receivables
iii. Motor car
iv. Discount on issue of shares
v. Securities premium reserve
vi. Unclaimed dividend
32. The net profit after interest and tax of a company was ₹1,20,000; Rate of income tax is 40%. The company has 10%
debentures of ₹ 1,00,000. Calculate interest coverage ratio.
33. From the following Balance Sheet of Rohit Ltd., prepare a Common Size Balance Sheet:

Balance Sheet of Rohit Ltd.

as at 31st March, 2021

Particulars Note No. 31st March, 2021 (₹) 31st March, 2020 (₹)
I. Equity and Liabilities

1. Shareholders' Funds 3,20,000 1,60,000

2. Current Liabilities 80,000 40,000
Total 4,00,000 2,00,000

II. Assets
1. Non-Current Assets 3,00,000 1,50,000
2. Current Assets 1,00,000 50,000

Total 4,00,000 2,00,000

OR

From the following information provided, prepare a comparative statement for the period 2008 and 2009.
Particulars 2008 Amt (Rs.) 2009 Amt (Rs.)
Revenue from Operations 6,00,000 8,00,000
Gross Profit 40% on Revenue from Operations 50% on Revenue from Operations
Administrative Expenses 20% of Gross Profit 15% of Gross Profit

Income Tax 50% 50%

34. From the following Balance Sheet Hitesh Ltd., prepare Cash Flow statement.
Particulars Note No. 31st March, 2023 (₹) 31st March, 2022 (₹)

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I. EQUITY AND LIABILITIES

1. Shareholders' Funds
(a) Share Capital 15,00,000 10,00,000
(b) Reserves and Surplus
7,50,000 6,00,000
(Surplus, i.e., Balance in Statement of Profit and Loss)
2. Non-Current Liabilities
Long-term Borrowings - Bank Loan 1,00,000 ____

3. Current Liabilities
(a) Short-term Borrowings - 12% Debentures ____ 2,00,000
(b) Trade Payables 1,00,000 1,10,000

(c) Short-term provisions 1 95,000 80,000

Total 25,45,000 19,90,000
II. ASSETS

1. Non-Current Assets
(a) Property, Plant and Equipment and Intangible Assets:
(i) Property, Plant and Equipment 2 10,10,000 12,00,000

(ii) Intangible Assets: Goodwill 1,80,000 2,00,000

(b) Non-Current Investments 6,00,000 ____
2. Current Assets

(a) Inventories 1,80,000 1,00,000

(b) Trade Receivables 2,00,000 1,50,000
(c) Cash and Cash Equivalents 3 3,75,000 3,40,000

Total 25,45,000 19,90,000

Notes to Accounts
Particulars 31st March, 2023 (₹) 31st March, 2022 (₹)

1. Short-term Provisions
Provision for Tax 95,000 80,000
2. Property, Plant and Equipment

Land and Building 6,50,000 8,00,000

Plant and Machinery 3,60,000 4,00,000
10,10,000 12,00,000

3. Cash and Cash Equivalents

Cash in Hand 70,000 50,000
Bank Balance 3,05,000 2,90,000

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3,75,000 3,40,000

Additional Information:

i. Contingent Liability: 31st March, 2023 31st March, 2022

Proposed Dividend 20% 15%
ii. Income tax paid during the year includes ₹ 15,000 paid towards Dividend Distribution Tax.
iii. Land and Building of book value ₹ 1,50,000 was sold at a profit of 10%
iv. The rate of depreciation on Plant and Machinery is 10%.
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Class 12 - Accountancy
Sample paper - 02

Solution

Part A:- Accounting for Partnership Firms and Companies

1. (b) ₹ 60,000
Explanation: ₹ 60,000
48,000
Total capital of the firm on the basis of new partner capital = 1
= 48, 000 × 4 = 1, 92, 000

Total capital of all partner = 30,000 + 30,000 + 48,000 + 24,000 = 1,32,000

Goodwill = 1,92,000 - 1,32,000 = ₹ 60,000
2. (d)
Profit and Loss Appropriation A/c Dr. ₹ 4,000
To Interest on B's Capital A/c ₹ 4,000

Explanation:
Profit and Loss Appropriation A/c Dr. ₹ 4,000
To Interest on B's Capital A/c ₹ 4,000
3. (a) ₹ 25,000
Explanation: ₹ 25,000
Excess amount received after share application adjusted = (1,25,000 × 3) - (50,000 × 3) = 2,25,000
Excess amount adjusted on allotment = 2,25,000 - (50,000 × 4) = 25,000
Call in advance amount = 25,000

OR

(b) ₹ 40,000
Explanation: ₹ 40,000 (500000x8%)
4. (d) 3 : 2 : 4
Explanation: 3 : 2 : 4
New profit sharing ratio = 3 : 2 : 4
Niva :-
4 1 3
− =
9 9 9

Naman :- 3

9
−
1

9
=
2

Nityam :- 2
+
1
+
1
=
4

9 9 9 9

OR

(b) Nil
Explanation: Nil
NO interest on capital provided in case of Loss.
5. (d) ₹ 1,20,000
Explanation: ₹ 1,20,000 (920000x15/115)
6. (b) Redeemable debentures
Explanation: Redeemable debentures

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OR

(d) 4,000
Explanation: 4,000
purchase consideration 3,60,000 3,60,000
Number of debenture issued = issuing price
=
100−10
=
90
= 4, 000

7. (a) ₹ 12,00,000
Explanation: These shares can be reissued up to a discount of ₹ 12,00,000.
Note: Maximum amount of discount should be equal to the amount received on these shares, which is ₹ 60 per share or ₹
60 × 20,000 shares = ₹ 12,00,000.
8. (b) ₹ 72,000
Explanation: C's share in Goodwill = ₹ 3,22,000 - ₹ 2,50,000 = ₹ 72,000

OR

(b) ₹ 27,000
Explanation: ₹ 27,000 (600000x6%x9/12)
9. (c) ₹ 60,000
Explanation: ₹ 60,000
10. (d) Option (iii)
Explanation: ₹ 29,000
11. (b) ₹ 15,000
Explanation: In the absence of a partnership deed, profits are to be shared equally among the partners. Therefore,
Mohit’s share of profit will be ₹ 15,000 (i.e. 30,000× )
1

12. (a) No amount

Explanation: No amount, as the amount of forfeiture ₹ 2,500 has been utilised at the time of re-issue.
13. (d) It can be used for writing off capital losses.
Explanation: Reserve Capital is used only in the event of winding up of the company thus; it cannot be used to write off
capital losses of the company.
14. (d) ₹ 20,000
Explanation: ₹ 20,000
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15. (c) 2 : 2 : 3
Explanation: 2 : 2 : 3
New profit sharing ratio
Mini :- − =4

7
2

7
2

Mansi :- 3
−
1
=
2

7 7 7

Nisha :-
3

OR

(b) Profit and Loss Suspense Account

Explanation: Profit and Loss Suspense Account
16. (a) In accordance with a contract between the partners
Explanation: In accordance with a contract between the partners.

17. i. Date Particulars L.F. Dr.(₹) Cr.(₹)

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General Reserve A/c Dr. 3,00,000

To A's Capital A/c 1,25,000

To B's Capital A/c 1,00,000

To C's Capital A/c 75,000

ii.
Date Particulars L.F. Dr.(₹) Cr.(₹)

A's Capital A/c Dr. 2,00,000

B's Capital A/c Dr. 1,60,000

C's Capital A/c Dr. 1,20,000

To Profit & Loss A/c 4,80,000

18. Profit and Loss Appropriation Account

For the year ended on 31st March, 2015

Particulars Amount Particulars Amount

Rs. Rs.
To Interest on Capital: By Profit and Loss A/c 29,400

Radha 3,000 (-) Interest on Radha's Loan 1,200 28,200

Raman 1,200 4,200

To Partner’s Salary

Radha 10,000

Raman 7,000 17,000

To Profits transferred to capital

Radha 5,000

Raman 2,000 7,000

28,200 28,200

OR

Profit and Loss Appropriation A/c

for the year ended 31.3.2022

Dr. Cr.
Particulars Amount (₹) Particulars Amount (₹)

To Profit transferred to Partners’ Capital A/c’s: By Profit & Loss A/c (Net Profit) 2,00,000

Mohan 80,000
Less: Guarantee to Suresh (18,000) 62,000

Sohan 80,000

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Less: Guarantee to Suresh (12,000) 68,000

Suresh 40,000

Add: Guarantee from Mohan 18,000

Add: Guarantee from Sohan 12,000 70,000

2,00,000 2,00,000
Total profit = ₹ 2,00,000
Suresh Share in profit = 2, 00, 000 × 1

5
= 40,000
Deficiency = 70,000 - 50,000 = 30,000
Mohan's share in deficiency = 30, 000 × 3

5
= 18,000
Sohan's share in deficiency = = 12,000
2
30, 000 ×
5

19. Journal of Garvit Ltd.

Date Particular L.F. Dr. (₹) Cr. (₹)

Bank A/c Dr. 3,38,400

To Debenture Application and Allotment A/c 3,38,400

(Being application money received on 3,600 debentures)

Debenture Application and Allotment A/c Dr. 3,38,400

Discount/Loss on issue of Debentures A/c Dr. 18,000

To 11% Debentures 3,00,000

To Bank A/c 56,400

(Being application money adjusted)

OR

Books of NH Limited
Journal

Date Particulars L.F. Dr. (₹) Cr. (₹)

Share Capital A/c (200 × ₹ 10) Dr. 2,000

To Share Forfeiture A/c (200 × ₹ 7) 1,400

To Calls-in-Arrears A/c (200 × ₹ 3)
600
(200 shares of ₹ 10 each forfeited for non-payment of ₹ 3 each)

Bank A/c Dr. 600

Share Forfeiture A/c (100 × ₹ 4) Dr. 400

To Share Capital A/c (100 × ₹ 10)

1,000
(100 shares of ₹ 10 each re-issued at ₹ 6 per share fully paid-up)

Share Forfeiture A/c Dr. 300

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To Capital Reserve A/c (₹ 700- ₹ 400) 300
(Balance in share forfeiture of 100 shares transferred to capital reserve)
Working Notes:-
Share Forfeiture of re-issued shares

Share Forfeiture Cr. ₹7 per share

Share Forfeiture Dr. ₹ (4) per share

Balance in Share Forfeiture after re-issue ₹3 per share

Capital Reserve = Balance in Share Forfeiture after re-issue (per share) × No. of shares re-issued
= ₹ 3 × 100 = ₹ 300.

20. Total Profits of last 5 years: ₹

2013-14 4,00,000

2014-15 5,00,000
2015-16 (-₹ 60,000 + Abnormal Loss of 3,00,000 - claim received 70,000) 1,70,000

2016-17 1,50,000

2017-18 (₹ 2,50,000 - Abnormal Gain ₹ 80,000) 1,70,000

13,90,000
Average Profit = ₹ 13,90,000 ÷ 5 = ₹ 2,78,000
Goodwill = Average Profit × Number of Year's Purchase
= ₹ 2,78,000 × 3 = ₹ 8,34,000.
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21. Extract of Balance Sheet

as at...

Particulars Note No. Amt (₹)

I. EQUITY AND LIABILITIES :

Shareholders' Funds :

( a ) Share Capital 1 22,00,000

( b ) Reserves and Surplus 2 2,20,000

24,20,000

II. ASSETS
Current Assets

Cash and Cash Equivalents 3 24,20,000

24,20,000
Notes to Accounts
Particulars Amt (₹)

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( 1 ) Share Capital
Authorised Capital :

25,000 Shares of ₹200 each 50,00,000

Issued Capital :
12,000 Shares of ₹200 each 24,00,000

Subscribed Capital :

Subscribed and Fully Paid-up

22,00,000
11,000 Shares of Rs. 200

(2) Reserves and Surplus :

Securities Premium Reserve 2,20,000

(3) Cash and Cash Equivalents :

Cash at Bank 24,20,000

22. JOURNAL

Date Particulars L.F. Dr. (₹) Cr. (₹)

(i) Realisation A/c Dr. ____

To X's Capital A/c

____
(Realisation expenses paid by X on behalf of the firm)

(ii) X's Capital A/c Dr. 1,000

To Bank A/c
1,000
(Payment of realisation expenses by the firm on behalf of the partner)

Bank A/c Dr. 2,00,000

To Realisation A/c
2,00,000
(Assets realised)

Realisation A/c Dr. 40,000

To Bank A/c
40,000
(liabilities paid off)

Realisation A/c Dr. 8,000

To X’s Capital A/c

8,000
(5% Commission payable to X on ₹ 1,60,000 i.e., on ₹ 2,00,000-₹ 40,000)

(iii) General Reserve A/c Dr. 20,000

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To Partner's Capital A/cs

20,000
(General reserve credited to partner's capital accounts in profit sharing ratio)

(iv) Realisation A/c Dr. 14,700

To Bank A/c
14,700
(Payment of Creditors amounting to ₹ 15,000 at 2% discount)

23. Journal Entries

In the Books of Anurag Ltd.

Particulars L.F. Dr. Cr.

Bank A/c Dr. 4,50,000

To Equity Share Application A/c

4,50,000
(Amount received on Application)

Equity Share Application A/c Dr. 4,50,000

To Equity Share Capital 3,00,000

To Bank
1,50,000
(Amount Transferred to Share Capital)

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

To Equity Share Capital A/c 2,00,000

To Security Premium
1,00,000
(Share Allotted)

Bank A/c Dr. 3,00,000

To Equity Share Allotment
3,00,000
(Amount Received of Share Allotment)

Equity Share First Call A/c Dr. 2,00,000

To Equity Share Capital

2,00,000
(Amount Called on First Call)

Bank A/c Dr. 1,98,800

Call in Arrear A/c Dr. 1,200

To Equity Share First Call
2,00,000
(Amount Received on First Call)

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Equity Share Second And Final Call A/c Dr. 3,00,000
To Equity Share Capital A/c
3,00,000
Amount Called on Second & Final Call)

Bank A/c Dr. 2,98,200

Call in Arrear A/c Dr. 1,800

To Equity Share Second & Final Call

3,00,000
(Amount Received on Second & Final Call)

OR

JOURNAL

Date Particulars LF Dr. (₹) Cr. (₹)

i. Bank A/c (1,20,000 × 20) Dr. 24,00,000

To Equity Share Application A/c

24,00,000
(Being application money received)

ii. Equity Share Application A/c (1,20,000 × 20) Dr. 24,00,000

To Equity Share Capital A/c (80,000 × 20) 16,00,000

To Equity Share Allotment A/c (40,000 × 20)

8,00,000
(Being application money transferred)

iii. Equity Share Allotment A/c (80,000 × 60) Dr. 48,00,000

To Equity Share Capital A/c (80,000 × 40) 32,00,000

To Securities Premium Reserve A/c (80,000 × 20)
16,00,000
(Being allotment money due)

iv. Bank A/c (48,00,000 - 8,00,000 - 2,00,000) Dr. 38,00,000

To Equity Share Allotment A/c
38,00,000
(Being allotment money received)

v. Equity Share First and Final Call A/c Dr. 32,00,000

To Equity Share Capital A/c (80,000 × 40)

32,00,000
(Being first and final call money due)

vi. Bank A/c [(80,000 - 4,000 shares - 800 shares) × 40] Dr. 30,08,000

To Equity Share First and Final Call A/c

30,08,000
(Being first and final call money received)

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vii. Equity Share Capital A/c (4,800 × 100) Dr. 4,80,000

Securities Premium Reserve A/c (4,000 × 20) Dr. 80,000

To Share Forfeiture A/c (6,000 × 20) + (800 × 60) 1,68,000

To Equity Share Allotment A/c 2,00,000

To Equity Share First and Final Call A/c (4,800 × 40)

1,92,000
(Being shares forfeited for non-payment)

viii. Bank A/c (4,200 × 100) Dr. 4,20,000

To Equity Share Capital A/c
4,20,000
(Being shares reissued @ ₹ 100 per shares)

ix. Share Forfeiture A/c 1,50,000

To Capital Reserve A/c

1,50,000
(Being share forfeiture to capital reserve account)
Working Note:-
Calculation of allotment money not paid by Siyaram
80,000
Number of shares allotted to Siyaram = 1,20,000
× 6, 000 = 4, 000 shares
Money not paid on allotment ₹

Money paid on application (6,000 × 20) 1,20,000

(-) Amount adjusted on allotment (4,000 × 20) (80,000)

Excess application money adjusted on allotment 40,000

Money due on allotment (4,000 × 60) 2,40,000

(-) Excess application money adjusted (40,000)

Money not paid on allotment by Siyaram 2,00,000

Money received on allotment

Total amount due on allotment (80,000 × 60) 48,00,000
(-) Excess application money adjusted (8,00,000)

40,00,000

(-) Money not received from Siyaram on allotment (2,00,000)

38,00,000
3,400
Amount forfeited on Siyaram 3,400 shares = 1, 20, 000 ×
4,000
1,02,000

Amount forfeited on Harman’s 800 shares 48,000

1,50,000

24. Dr Revaluation Account Cr

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Particulars Amt(Rs) Particulars Amt(Rs)
To Provision for Outstanding Electricity Bill
3,000 By Creditors A/c 2,500
A/c

By Provision for Bad and Doubtful Debts

To Provision for Claim for Damages A/c 325 25
A/c
By Loss Transferred to

Atal's Capital A/c(800×5/8) 500

Madan's Capital A/c(800×3/8) 300 800

3,325 3,325

Dr Partners’ Capital Account Cr

Atal Madan Mehra Atal Madan Mehra

Particulars Particulars
(Rs) (Rs) (Rs) (Rs) (Rs) (Rs)
To Cash A/c 5,000 3,000 __ By Balance b/d 1,50,000 90,000 __

(Goodwill is withdrawn) By Cash A/c __ __ 40,000

To Profit and Loss A/c 12,500 7,500 __ By Premium for Goodwill A/c 10,000 6,000
To Revaluation
500 300 __ __
A/c (Loss)

By Workmen Compensation
20,000 12,000
Fund A/c

To Cash A/c (Balancing

62,000 37,200 __ __
figure)
To Balance c/d 1,00,000 60,000 40,000

1,80,000 1,80,000 40,000 1,80,000 1,80,000 40,000

Balance Sheet
as at 31st March, 2011

Liabilities Amt (Rs) Asset Amt (Rs)

Outstanding Electricity Bill 3,000 Debtors 47,000

Creditors (20,000-2,500) 17,500 (-) Provision for Doubtful Debts (1,175) 45,825

Bank Overdraft 47,000 Land and Building 1,50,000

Provision for Claim for Damages 325 Machinery 40,000

Capital A/cs Patents 5,000

Atal 1,00,000 Stock 27,000

Madan 60,000
Mehra 40,000 2,00,000

2,67,825 2,67,825

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Working Note
Calculation of Sacrificing Ratio
Sacrificing Ratio = Old Share - New Share
Atal's sacrifice = 5 5 25−20 5
− = =
8 10 40 40

Madan s sacrifice =
3 3 15−12 3
− = =
8 10 40 40

Sacrificing ratio =5:3

Dr Cash Account Cr
Particulars Amt(Rs) Particulars Amt(Rs)

To Balance b/d 4,200 By Atal's Capital A/c 5,000

To Mehra's Capital A/c 40,000 By Madan's Capital A/c 3,000

To Premium for Goodwill A/c 16,000 By Atal's Capital A/c 62,000

To Bank Overdraft A/c 47/000 By Madan's Capital A/c 37,200

(Balancing figure)

1,07,200 1,07,200

Calculation of Adjustment of Capital

Mehra’s share = 2 /1 0 ; Mehra’s capital = Rs 40,000
For 2 / 10th share, capital = 40,000
Total capital = 40, 000 × 10

2
= Rs2, 00, 000

Atal's new capital = 200, 000 × 5

= 1, 00, 000
10

Madan’s new capital =

3
2, 00, 000 × = Rs60, 000
10

Mehra’s new capital = 2, 00, 000 ×

2

10
= Rs40, 000

OR

Revaluation Account

Amount
Particulars Particulars Amount
(Rs)
(Rs)

To Building A/c
1,00,000 By Land A/c 3,20,000

To Furniture A/c 30,000

To Profit transferred to Capital A/cs

L 95,000

M 47,500

N 47,500 1,90,000

3,20,000 3,20,000
======= =======

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Partners’ Capital Accounts

L M N L M N
Particulars Particulars
Amount Amount Amount Amount Amount Amount
(Rs) ( Rs) ( Rs) ( Rs) ( Rs) ( Rs)

To N's Capital A/c 1,00,000 50,000 By Balance b/d 6,00,000 4,80,000 4,80,000

To N's Loan A/c 8,37,500 By General Reserve 2,20,000 1,10,000 1,10,000

To M's Current
1,20,000 By Revaluation A/c ( Profit) 95,000 47,500 47,500
A/c (?)

To Balance c/d 10,35,000 5,17,500 By L's Capital A/c 1,00,000

- By M's Capital A/c 50,000

By Workmen's Compensation
1,00,000 50,000 50,000
Fund A/c

By L's Current A/c(Balancing

1,20,000
figure)

11,35,000 6,87,500 8,37,500 11,35,000 6,87,500 8,37,500

======== ======= =======

Balance Sheet
as at 1st April, 2013

Liabilties Amount Assets Amount

(Rs) ( Rs)

Land
Capital A/cs
8,00,000

L (+) Appreciation
11,20,000
10,35,000 3,20,000

M Building
15,52,500
5,17,500 6,00,000
(-) Depreciation
Liabilities for Workmen Compensation Fund 1,60,000 5,00,000
1,00,000

Furniture
Creditors 2,40,000
2,40,000

(-) Depreciation
L's Current Account 1,20,000 2,10,000
30,000

Debtors
N's Loan Account
4,00,000

(-) Provision for Doubtful Debts 3,80,000

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20,000

Stock 4,40,000
M's Current A/c 1,20,000

Cash 1,40,000

29,10,000 29,10,000
========= =========

Working Notes:
A partner ceases to be a partner on his retirement or death and as such, the amount of claim of the retiring partner or the
d5ceased partner has to be settled by the firm. The problems that arise at the time of retirement of a partner from the firm
are:
(1) Ascertainment of new profit sharing ratio,
(2) Ascertainment of gaining ratio,
(3) Treatment of goodwill,
(4) Adjustment for revaluation of assets and liabilities,
(5) Adjustment in respect of unrecorded assets and liabilities,
(6) Adjustment in respect of accumulated profits/losses,
(7) Methods of payment to retiring partner.
i. Finn’s goodwill = Rs 6,00,000
N’s share of goodwill = 6,00,000 × = 1,50,000 to be contributed by L and M in gaining ratio i.e.,2 :1;
1

L = 1,50,000 × =Rs 1,00,000; M =1,50,000 × = Rs 50,000

2

3
2

ii. Calculation of Proportionated Capital

L’s capital after all adjustment = 9,15,000
M’s capital after all adjustment = 6,37,500
Total capital of new firm = Rs 15,52,500
L’s new capital = 15,52,500 × = Rs 10,35,000
2

M’s new capital = 15,52,500 × = Rs 5,17,500

1

25. In the books of Gita and Garv

Dr. Revaluation A/c Cr.

Particulars Amount (₹) Particulars Amount (₹)

By Stock A/c 16,000

By Building A/c 1,00,000

By Investments A/c 4,000

To Profit on revaluation transfer to:

Gita’s Capital A/c 36,000

Radha’s Capital A/c 60,000

Garv’s Capital A/c 24,000 1,20,000

1,20,000 1,20,000

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Partner’s Capital A/c

Dr. Cr.
Particulars Gita (₹) Radha (₹) Garv (₹) Particulars Gita (₹) Radha (₹) Garv (₹)

To Radha’s Capital A/c 90,000 60,000 By balance b/d 3,00,000 2,00,000 1,00,000

To Radha’s Loan A/c 4,30,000 By Gita’s Capital A/c 90,000

To balance c/d 3,00,000 2,00,000 By Garv’s Capital A/c 60,000

By General Reserve A/c 12,000 20,000 8,000

By Revaluation A/c 36,000 60,000 24,000

By Current A/c 42,000 1,28,000

3,90,000 4,30,000 2,60,000 3,90,000 4,30,000 2,60,000

Working Notes:
i. Calculation of Radha’s Share of Goodwill on her retirement
Goodwill of the firm on retirement = ₹ 3,00,000

Radha’s Share of Goodwill of firm = ₹ (3,00,000× ) = ₹ 1,50,000

5

10

Gaining ratio will be the same as the new profit-sharing ratio i.e. 3: 2
ii. Adjustment of Capital of partners
Total Capital of the new firm after retirement = ₹ 5,00,000

Gita’s New Capital = ₹ (5,00,000 × ) = ₹ 3,00,000

3

Garv’s New Capital = ₹ (5,00,000 × ) = ₹ 2,00,000

2

Existing Capitals of Gita and Garv are ₹ 2,58,000 and ₹ 72,000

Amount to be debited to Gita’s Current A/c = New Capital – Old Capital
= ₹ ( 3,00,000 – 2,58,000) = ₹ 42,000

Amount to be debited to Garv’s Current A/c = New Capital – Old Capital

= ₹ ( 2,00,000 – 72,000) = ₹ 1,28,000

Balance Sheet as at 31st March 2019

Liabilities Amount (₹) Assets Amount (₹)

Sundry Creditors 60,000 Stock 96,000

Radha’s Loan A/c 4,30,000 Building 6,00,000

Capital A/c's of partner Debtors 40,000

Gita 3,00,000 Current A/c's of partner

Garv 2,00,000 5,00,000 Gita 42,000

Garv 1,28,000 1,70,000

Cash 84,000

(50,000 + 34,000)

9,90,000 9,90,000

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26. Journal

Debit Credit
Date Particulars L.F.
Amount (₹) Amount (₹)

(a) Bank A/c Dr. 10,50,000

To Debenture Application and Allotment A/c 10,50,000

(Debenture application money received on 10,000 9% debentures)

Debenture Application and Allotment A/c Dr. 10,50,000

To 9% Debentures A/c 10,00,000

To Securities premium/Securities premium reserve A/c 50,000

(Debenture application money transferred to debentures A/c and

securities premium A/c)

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

To Debenture Application and Allotment A/c 10,00,000

(Debenture application money received on 10,000 10% debentures)

Debenture Application and Allotment A/c Dr. 10,00,000

Loss on issue of Debentures A/c Dr. 1,00,000

To 10% Debentures A/c 10,00,000

To Premium on redemption of Debentures A/c 1,00,000

(Debenture application money transferred to debentures A/c)

(c) Bank A/c Dr. 9,00,000

To Debenture Application and Allotment A/c 9,00,000

(Debenture application money received on 10,000 9% debentures)

Debenture Application and Allotment A/c Dr. 9,00,000

Loss on issue of Debentures A/c Dr. 1,50,000

To 9% Debentures A/c 10,00,000

To Premium on redemption of Debentures A/c 50,000

(Debenture application money transferred to debentures A/c)

OR

Debenture Application and Allotment A/c Dr. 9,00,000

Discount on issue of Debentures A/c Dr. 1,00,000

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Loss on issue of Debentures A/c Dr. 50,000
To 9% Debentures A/c 10,00,000

To Premium on redemption of Debentures A/c 50,000

(Debenture application money transferred to debentures A/c)

Part B :- Analysis of Financial Statements
27. (a) short-term solvency/liquidity of the concern
Explanation: short-term solvency/liquidity of the concern

OR

(a) Preliminary Expense

Explanation: Preliminary expenses are those expenses which are incurred during the formation of the company.
Benefits of such expenses extend for more than one accounting year, therefore, such expenses are not fully debited to
statement of profit and loss in any single year but it is written off over each year in part.
28. (a) Cost of Revenue from Operations = Revenue from Operations - Gross Profit
Explanation: Cost of Revenue from Operations = Revenue from Operations - Gross Profit
29. (b) Three months or less
Explanation: Cash Equivalent: An investment qualifies as cash equivalent when it has a maturity period of three
months or less from the date of its acquisition.

OR

(a) Cash used in investing activities ₹ 3,60,000.

Explanation: Cash used in investing activities ₹ 3,60,000 (400000 - (40000))
30. (b) Cash used in investing activities ₹ 6,00,000.
Explanation: Cash used in investing activities ₹ 6,00,000.
31. Discount on issue shares is deducted from securities premium reserve on the liability side under the head shareholder's
fund.
Sl.No. Items Major Headings

(i) Long-term Investments Non-current Assets (investments)

(ii) Trade Receivables Current Assets

(iii) Motor Car Non-current Assets( fixed assets)

Discount on Issue of Adjusted through securities premium reserve on the liability side.( Shareholder's
(iv)
Shares fund)

Securities Premium
(v) Shareholders' Funds (Reserves and surplus)
Reserve

(vi) Unclaimed Dividend Current Liabilities. ( Other current liabilities)

32. Interest on long term debt = 1,00,000 × 10% = 10,000
1,20,000
Profit before interest and tax = 1−0.4
+ 10,000 = 2,10,000
Net profit Before interest and tax 2,10,000
Interest coverage ratio = I nterest on debt
=
10,000
= 21 times

33. In the books of Rohit Ltd.

Common Size Balance Sheet
as at 31st March, 2021

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Absolute Amounts (₹) Percentage of Balance Sheet Total (%)

Particulars Note No.
31.03.2020 31.03.2021 31.03.2020 31.03.2021

I. Equity and Liabilities

1. Shareholders' Funds 1,60,000 3,20,000 80 80

2. Current Liabilities 40,000 80,000 20 20

Total 2,00,000 4,00,000 100 100

II. Assets

1. Non-Current Assets 1,50,000 3,00,000 75 75

2. Current Assets 50,000 1,00,000 25 25

Total 2,00,000 4,00,000 100 100

OR

Comparative Statement of Profit and Loss

for the year ended 31st March, 2009

31st
31st Absolute Change Percentage Change
Particulars March, 2008
March, 2009 (Increase or Decrease) (Increase or Decrease)
(Rs.)
(Rs.) (Rs.) (%)
I. Revenue from Operations
6 ,00,000 8,00,000 2,00,000 33.33
(Sales)

II.Total Revenue 6,00,000 8,00,000 2,00,000 33.33

III. Expenses:

(a) Cost of Revenue from

3,60,000 4,00,000 40,000 11.11
Operations
(b) Administrative Expenses 48,000 60,000 12,000 25.00

IV. Total Expenses (a+b) 4,08,000 4,60,000 52,000 12.74

V. Profit before Tax ( I I - IV ) 1,92,000 3,40,000 1,48,000 77.08

VI. Income Tax @ 50% (96,000) (1,70,000) (74,000) (77 08)

VII. Profit after Tax ( V- VI) 96,000 1,70,000 74,000 77.08

Working Note

2008 2009

Revenue from operations 6,00,000 8,00,000

( - ) Gross profit (2,40,000) (4,00,000)

Cost of revenue from operations 3,60,000 4,00,000

Administrative expenses 20% on Gross profit i e 48,000 15% on Gross profit i e. 60,000

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Comparative statement of P&L A/c is prepared as per Schedule 3, Part 1 of the Companies Act,2013. A comparative
statement is a document that compares a particular financial statement with prior period statements or with the same
financial report generated by another company. Analysts and business managers use the income statement, balance
sheet and cash flow statement for comparative purposes. The process reveals trends in the financials and compares one
company's performance with another business.

34. Hitesh Ltd.

CASH FLOW STATEMENT
for the year ended 31st March, 2023

Particulars ₹ ₹
I. Cash Flow from Operating Activities

Closing Balance of Surplus, i.e., Balance in Statement of Profit and Loss 7,50,000

Less: Opening Balance of Surplus, i.e., Balance in Statement of Profit and Loss 6,00,000

1,50,000

Add: Provision for Tax 95,000

Dividend Paid 1,50,000

Net Profit before Tax and Extraordinary Activities 3,95,000

Add: Non-cash/Non-operating Expenses:

Depreciation 40,000

Goodwill Amortised 20,000 60,000

4,55,000

Less: Non-operating Income:

Gain on Sale of Land and Building 15,000

Operating Profit before Working Capital Changes 4,40,000

Less: Decrease in Current Liabilities and Increase in Current Assets:

Trade Payables 10,000

Trade Receivables 50,000

Inventories 80,000 1,40,000

Cash Generated from Operating Activities 3,00,000

Less: Income Tax Paid (₹ 80,000 - ₹ 15,000) 65,000

Cash Flow from Operating Activities 2,35,000

II. Cash Flow from Investing Activities

Proceeds from Sale of Land and Building 1,65,000

Purchase of Non-current Investments (6,00,000)

Cash Used in Investing Activities (4,35,000)

III. Cash Flow from Financing Activities

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Proceeds from Issue of Shares 5,00,000

Payment for Redemption of 10% Debentures (2,00,000)

Proceeds from Bank Loan 1,00,000

Payment of Dividend (1,50,000)

Payment of Dividend Distribution Tax (15,000)

Cash flow from Financing Activities 2,35,000

IV. Net Increase in Cash and Cash Equivalents (I + II + III) 35,000

Add: Opening Cash and Cash Equivalents 3,40,000

V. Closing Cash and Cash Equivalents 3,75,000

W.N.:
i. It is assumed that 10% Debentures have been redeemed in the beginning of the year, therefore, interest is not
provided.

ii. LAND AND BUILDING ACCOUNT

Dr. Cr.

Particulars ₹ Particulars ₹

To Balance b/d 8,00,000 By Bank A/c (Sale) (₹ 1,50,000 + ₹ 15,000) 1,65,000

To profit and loss A/c 15,000 By Balance c/d 6,50,000

8,15,000 8,15,000

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