Solution

ACCOUNTNACY REVISION EXAM I ( DEC) - FULL PORTION

Class 12 - Accountancy
Part A:- Accounting for Partnership Firms and Companies
1.
(c) Nominal Account
Explanation:
Revaluation Account or profit & loss adjustment account is Nominal Account. Revaluation account is opened by the firm to
record the gains and losses arising from the revaluation of assets and reassessment of liabilities at the time of reconstitution of
the firm. Hence, the output is either a profit or a loss, so it is a nominal account.

2.
(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
Explanation:
Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).

3. (a) NIL.
Explanation:
Because premium paid at the time of allotment
4.
(d) Dr. Z and Cr. X by ₹ 9,000
Explanation:
Adjustment amount = 35,000 + 15,000 - 20,000 = 30,000
3
X's :- 30,000 × = 9,000 (sacrifice)
10
3
Y's :- 30,000 × 10
= 9,000 (gain)

5.
(c) P ₹ 42,000; Q ₹ 28,000; R ₹ 20,000
Explanation:
P ₹ 42,000; Q ₹ 28,000; R ₹ 20,000
P= 45000-3000=42000
Q=30000-2000=28000
R=15000+3000+2000=20000

6. (a)
Sundry Assets A/c Dr.

To Sundry Liabilities A/c

To Vendor's A/c

Explanation:
When the purchase consideration is equal to net assets while purchasing business from vendor the Asset Account is debited and
the Liability Account and Vendor Account are credited.
OR

(b) Secured
Explanation:
Secured

1 / 18
 7. (a) Both A and R are true and R is the correct explanation of A.
Explanation:
Both A and R are true and R is the correct explanation of A.
8.
(b)
P's Capital A/c Dr. 5,000

Q's Capital A/c Dr. 1,000

To R's Capital A/c 6,000

Explanation:
P's Capital A/c Dr. 5,000

Q's Capital A/c Dr. 1,000

To R's Capital A/c 6,000

Gaining ratio = New ratio - Old ratio 5 : 1
15−10
P :- 5

8
−
5

12
=
24
=
5

24
9−8
Q :- 3

8
−
4

12
=
24
=
24
1

OR
(a) A (Loss) ₹ 1,60,000; B (Profit) ₹ 1,50,000; C (Loss) ₹ 80,000
Explanation:
₹

Loss for the year 80,000

6 10
Add : Interest on A's Loan = 2, 00, 000 × 100
×
12
10,000

Net Loss 90,000

Distribution of Profit/Loss
Particulars A B C

Loss of ₹ 90,000 divided in 4 : 3 : 2 (40,000) (30,000) (20,000)

Since B is guaranteed a minimum profit of ₹ 1,50,000 whereas loss debited to his Capital
(1,20,000) 1,80,000 (60,000)
A/c is ₹ 30,000, hence he will beCredited by ₹ 1,80,000 borne by A and C in 4 : 2

(1,60,000) 1,50,000 (80,000)

9. (c) Option (ii)

Explanation:
6 months
10. (b) ₹ 21,000
Explanation:
₹ 21,000
11.
(d) Ratio of Appropriation (Ratio of Interest on capital payable to them)
Explanation:
Ratio of Appropriation (Ratio of Interest on capital payable to them)

12. (a) ₹ 39,70,000

Explanation:
Subscribed and Fully Paid Capital: ₹

3,97,000 equity shares of ₹ 10 each 39,70,000

2 / 18
 Share Forfeited Account will be ignored.
13.
(b) 1,00,000
Explanation:
Total no of equity shares 2,000
application 25 and allotment 25 = 50
money received = 2,000 × 50 = 1,00,000

rate × 5.5
14. (a)
100 × 12
Explanation:
In the case of drawings, when a fixed amount is withdrawn at the end of the last day of every month, interest in drawings will
be calculated as follows:
period af ter 1st installment + period af ter last installment 11+0
Step 1. Average Time Period = 2
= 2
= 11

2
= 5.5
Rate 5.5
Step 2. Total Drawings × 100
×
12

15.
(b) A ₹ 60,000; B ₹ 30,000
Explanation:
C's share in goodwill = 3,00,000 × 3

10
= ₹ 90,000
Sacrificing ratio =12 : 6 or 2 : 1
A= × = 3

5
1

3
×
3
=
15
4

4
12

60

B= 2

5
×
1

4
=
2

20
×
3

3
=
6

60

A's share = 90,000 × 2

3
= ₹ 60,000
B's share = 90,000× 1

3
= ₹ 30,000

OR

(d) 10,000
Explanation:
Amount of goodwill brought by C = 5000 x 2/1 = 10,000

16.
(c) ₹ 19,000
Explanation:
Realisation will be credited with the amount of ₹ 19,000 as taken over investment.

17. Features of goodwill:

i. Goodwill is an intangible asset, which means that it cannot be seen or felt.
ii. Goodwill cannot be separated from the business and therefore cannot be realised separately without disposing of the business
as a whole.
18. PROFIT & LOSS APPROPRIATION ACCOUNT
for the year ended 31st March, 2023
Dr. Cr.

Particulars ₹ Particulars ₹

By Profit & Loss A/c

To Ram's Capital A/c (Commission) 25,000 1,25,000
(Net Profit transferred)

To Profit transferred to Yogesh's Capital A/c 1,00,000

1,25,000 1,25,000

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 Note: Yogesh is guaranteed minimum profit of ₹ 1,00,000. Since distributable profit of the firm for the year is ₹ 1,00,000 (₹
1,25,000 - ₹ 25,000), it will be credited to Yogesh's Capital/Current Account. Remaining partners, Mohit and Ram will not get any
share of profit.
OR
a. Salaries of Partners - No Salary Is Payable To Any Partner.
b. Interest on Partners Capital - No interest on capital is allowed or paid to any partner.
c. Interest on Partners Loan - Interest on Partner's Loan is allowed @ 6% to the partners.
d. Division of Profit - Profit are divided equally.
e. Interest on Partner's drawings - No interest on Partner's drawings is charged from the Partners.
f. Interest on loan given to partner - No interest charged on loan given to partner.
19. JOURNAL OF VINAY LTD.
Date Particulars L.F. Dr. (₹) Cr. (₹)

Land and Building A/c Dr. 84,00,000

Plant and Machinery A/c Dr. 36,00,000

To M.P. Ltd. 1,10,00,000

To Capital Reserve A/c (Bal. Fig.)

10,00,000
(Assets taken over from M.P. Ltd.)

M.P. Ltd. Dr. 1,10,00,000

To Bank A/c 20,00,000

To 8% Debentures A/c 75,00,000

To Securities Premium A/c

(Purchase consideration discharged by issuing 8% Debentures at a premium and 15,00,000
Cheque)
₹1,10,00,000− ₹20,00,000
Note: Number of Debentures to be Issued = = 75,000 Debentures
₹120
OR
Application 25 Balancing Figure

Allotment 30

First Call 20

Final Call 25 Un-called

100
Called-up ₹ 75 per share
Books of X Limited
JOURNAL
Date Particulars L.F. Dr. (₹) Cr (₹)

Equity Share Capital A/c (900× 75) Dr. 67,500

To Share Forfeiture A/c 22,500

To Calls-in-Arrears A/c
(900 shares of ₹ 100 each ₹ 75 called-up, forfeited for the non-payment sum of allotment ₹ 30 45,000
and first call ₹ 20 per share)

Bank A/c Dr. 81,000

To Share Capital A/c 67,500

To Securities Premium A/c

13,500
(900 shares of ₹ 100 each re-issued as ₹ 75 paid-up for ₹ 90 each)

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 Share Forfeiture A/c Dr. 22,500

To Capital Reserve A/c

22,500
(Balance of Share Forfeiture Account after re-issue, transferred to Capital Reserve Account)
Working Notes:-
Share forfeiture Account Credit
= Share application money received for 900 shares
= ₹ 25 × 900 shares
= ₹ 22,500
Calculation of Capital reserve
Share forfeiture Account Credit = ₹ 22,500
Share forfeiture Account Debit = NIL
Capital Reserve = ₹ 22,500.
20. Calculation Of Goodwill as per Super Profit Method
Normal rate of Return
Normal Profits = Capital Employed × 100
15
i.e., 1,00,000 × 100
= ₹ 15,000
30,000 + 36,000 + 42,000
Average Profits = 3
= ₹ 36,000
Super Profits = Average Profits - Normal Profits
= ₹ 36,000 - ₹ 15,000 = ₹ 21,000
Goodwill = Super Profits × Number of year's purchase
= ₹ 21,000 × 2 = ₹ 42,000
21. In the Books of K Ltd.
JOURNAL
Date Particulars L.F. Dr. (₹) Cr. (₹)

Sundry Assets A/c Dr. 15,00,000

Goodwill A/c (Balancing Figure) Dr. 3,68,500

To Sundry Liabilities A/c 5,00,000

To P Ltd.
13,68,500
(Business purchased from P Ltd.)

P Ltd. Dr. 13,68,500

To Bills Payable A/c 25,500

To Equity Share Capital A/c (10,744 × ₹ 100) 10,74,400

To Securities Premium A/c (10,744 × ₹ 25)

(Bills payable of ₹ 25,500 and 10,744 equity shares of ₹ 100 each issued at a premium 2,68,600
of 25% against purchase consideration)
Note: Number of equity shares to be issued = (Purchase consideration - Payment through Promissory Note) ÷ Issue price =
₹ (13,68,500−25,500)
= 10,744 shares.
₹ 125
22. Realisation Account
Particulars ₹ Particulars ₹

To Sundry Assets By Creditors 50,400

Buildings 23,500 By A (investments) 18,000

Furniture 6,500 By Cash A/c (Assets Realised)

Stock 20,100 Fixed Assets 29,700

Debtors 62,600 Stock and Debtors 80,000 1,09,700

Investments 16,000 1,28,700 By Capital A/cs Losses

5 / 18
 To Cash A/c- A 1,000

Creditors = (50,400 - 800) = 49,600 B 1,000

Bills dishonoured 1,500 C 1,000 3,000

Expenses 1,300 52,400

1,81,100 1,81,100
Cash Account
Particulars ₹ Particulars ₹

To Balance b/d 3,700 By Realisation A/c 52,400

To Realisation A/c 1,09,700 By Capital A/c A 25,000

To A's Loan A/c 10,000 B 28,000

C 18,000 71,000

1,23,400 1,23,400
Partner's Capital Accounts
Particulars A (₹) B (₹) C (₹) Particulars A (₹) B (₹) C (₹)

To Real. A/c 18,000 - - By Balance b/d 40,000 25,000 15,000

To Real. Loss 1,000 1,000 1,000 By Reserves 4,000 4,000 4,000

To Cash A/c 25,000 28,000 18,000

44,000 29,000 19,000 44,000 29,000 19,000

23. Issued capital 40,000 shares of ₹ 10 each at premium of ₹ 2
Applied ₹ 60,000 shares
Allotment made as: Payable as:

Applied Allotted Application ₹2

48,000 40,000 Allotment ₹ 5 (3 + 2)

12,000 NIL First Call ₹2

60,000 40,000 Second and Final Call ₹3

₹12 (10 + 2) per share

Books of Riya Limited
Journal Entries
Date Particulars L.F. Dr. (₹) Cr. (₹)

Bank A/c Dr. 1,20,000

To Equity Share Application A/c

1,20,000
(Application money received for 60,000 shares at ₹ 2 each)

Equity Share Application A/c Dr. 1,20,000

To Equity Share Capital A/c 80,000

To Equity Share Allotment A/c 16,000

To Bank A/c
(Share application of 40,000 shares transferred to share capital, ₹ 16,000 adjusted on 24,000
allotment and remaining ₹ 24,000 refunded)

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

To Equity Share Capital A/c 1,20,000

6 / 18
 To Securities Premium A/c 80,000
(Share allotment due on 40,000 shares at ₹ 5 each including ₹ 2 premium)

Bank A/c Dr. 1,76,640

To Equity Share Allotment A/c

1,76,640
(Share allotment received on all shares except on 1,600 Shares held by Raj)

Equity Share First Call A/c Dr. 80,000

To Equity Share Capital A/c

80,000
(First call due on 40,000 shares at ₹ 2 each)

Bank A/c Dr. 72,800

To Equity Share First Call A/c

72,800
(First call received on 36,400 shares and holders of 3,600 failed to pay it)

Equity Share Second and Final Call A/c Dr. 1,20,000

To Equity Share Capital A/c

1,20,000
(Second and final call due on 40,000 shares at ₹ 3 each)

Bank A/c Dr. 1,09,200

To Equity Share second and Final Call A/c

(Second and final call received on 36,400 shares and holders of 3,600 shares failed to pay 1,09,200
it)

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

Securities Premium A/c (1,600 share × ₹ 2 ) Dr. 3,200

To Share Forfeiture A/c 3,840

To Equity Share Allotment A/c 7,360

To Equity Share first Call A/c (1,600 share × ₹ 2) 3,200

To Equity Share Second and Final Call A/c

4,800
(1600 shares held by Raj forfeited for non-payment amount due including premium)

Equity Share Capital A/c (2,000 share × ₹ 10) Dr. 20,000

To Equity Share Forfeiture A/c 10,000

To Equity Share First Call A/c (2,000 share × ₹ 2) 4,000

To Equity Share Second and Final Call A/c

6,000
(2,000 shares held by Suraj forfeited for non-payment of amount due)

Bank A/c (3,600 share × ₹ 8) Dr. 28,800

Share Forfeiture A/c Dr. 7,200

To Equity Share Capital A/c (3,600 share × ₹ 10)

36,000
(3,600 shares of ₹ 10 each re-issued at ₹ 8 per share fully paid-up)

Share Forfeiture A/c Dr. 6,640

To Capital Reserve A/c (3,840+10,000-7,200)

6,640
(Balance in Share Forfeiture transferred to Capital Reserve)
Working Notes:
Raj’s shares

7 / 18
 48,000
Number of shares applied by Raj = 40,000
× 1, 600 = 1,920 shares

Money received on Application (1,920 shares × ₹ 2) ₹ 3,840

Less: Application money transferred to Share Capital (1,600 shares × ₹ 2) ₹ 3,200

Excess money on Application ₹ 640

Share Allotment due (1,600 shares × ₹ 5) ₹ 8,000

Less: Excess money on Application ₹ (640)

Calls-in-Arrears on Allotment ₹ 7,360

Share Allotment
Share Allotment due (40,000 shares × ₹ 5) 2,00,000

Less: Excess money on Application (16,000)

1,84,000

Less: Calls-in-Arrears by Raj (7,360)

Money received on Allotment 1,76,640

Share First Call
Share First Call due (40,000 shares × ₹ 2) 80,000

Less: Calls-in-Arrears by Raj and Suraj (3,600 shares × ₹ 2) (7,200)

Money received on First Call 72,800

Share Final Call
Share Final Call due 40,000 Shares × ₹ 3 1,20,000

Less: Calls-in-Arrears by Raj and Suraj (3,600 shares × ₹ 3) (10,800)

Money received on Second and Final Call 1,09,200

Capital Reserve
Share Forfeiture on Raj’s shares (money received on application) 3,840

Share Forfeiture on Suraj’s shares (2,000 shares × ₹ 5) 10,000

13,840 Cr.

Less: Share Forfeiture (7,200) Dr.

Capital Reserve 6,640

OR
Books of Concept Stationary Ltd.
JOURNAL
Date Particulars L.F. Dr. (₹) Cr. (₹)

Bank A/c Dr. 28,00,000

To Share Application and Allotment A/c 28,00,000

(Application and allotment money received on 4,00,000 shares)

Share Application and Allotment A/c Dr. 28,00,000

To Share Capital A/c (3,00,000 × ₹ 7) 21,00,000

To Calls in Advance A/c (60,000 × ₹ 7) 4,20,000

To Bank A/c (40,000 × ₹ 7) 2,80,000

(Application and allotment money transferred to share capital, Calls-in-Advance and the
balance refunded)

8 / 18
Share First and Final Call A/c Dr. 18,00,000

To Share Capital A/c (3,00,000 × ₹ 3) 9,00,000

To Security Premium A/c (3,00,000 × ₹ 3) 9,00,000

(First and final call due including premium)

Bank A/c Dr. 13,38,000

Calls in Advance A/c Dr. 4,20,000

Calls-in-Arrears A/c (18,000 + 24,000) Dr. 42,000

To Share First and Final Call A/c 18,00,000

(First and final call money received)

OR

Bank A/c Dr. 13,38,000

Calls-in-Advance A/c Dr. 4,20,000

To Shares First and Final Call A/c 17,58,000

(First and final call money received)

Share Capital A/c Dr. 40,000

Securities Premium A/c Dr. 12,000

To Forfeited Shares A/c 28,000

To Shares First and Final Call A/c 24,000

(4,000 shares forfeited)

OR

Share Capital A/c Dr. 40,000

Securities Premium A/c Dr. 12,000

To Forfeited Shares A/c 28,000

To Calls-in-Arrears A/c 24,000

(4,000 shares forfeited)

Share Capital A/c Dr. 44,000

Securities Premium A/c Dr. 13,200

To Forfeited Shares A/c 39,200

To Shares First and Final Call A/c 18,000

OR

Share Capital A/c Dr. 44,000

Securities Premium A/c Dr. 13,200

To Forfeited Shares A/c 39,200

To Calls-in-Arrears A/c 18,000

(4,400 shares forfeited)

Alternatively, the forfeiture entries can be combined as follows:

9 / 18
 Share Capital A/c (8,400 × ₹ 10) Dr. 84,000

Security Premium A/c (8,400 × ₹ 3) Dr. 25,200

To Calls-in-Arrears/Shares First and Final Call A/c 42,000

To Forfeited Shares A/c 67,200

(8,400 shares forfeited)

Bank A/c Dr. 58,800

Forfeited Shares A/c Dr. 25,200

To Share Capital A/c 84,000

(8,400 shares reissued for ₹ 7 per share fully paid-up)

Share Forfeiture A/c Dr. 42,000

To Capital Reserve A/c 42,000

(Gain on reissue of shares transferred to capital reserve)

Working Notes
1. Calculation of First and Final Call Money not paid by Veni:
2,80,000
(i) Number of shares applied by Veni = 4,400 × 2,20,000
= 5,600 Shares

(ii) Excess application and allotment money adjusted on first and final call [(5,600 - 4,400) × ₹ 7 ₹ 8,400

(iii) Amount due on first and final call (4,400 × ₹ 6) ₹ 26,400

Less: Excess application and allotment money adjusted on first and final call (ii) ₹ 8,400

Money not paid by Veni ₹ 18,000

2. Calculation of First and Final Call Money received:
Amount due on first and final call (3,00,000 Shares × ₹ 6) ₹ 18,00,000

Less: Excess application and allotment money (Calls-in-Advance) adjusted ₹ 4,20,000

₹ 13,80,000

Less: Money not paid by Arun (4,000 × ₹ 6) ₹ 24,000

Money not paid by Veni ₹ 18,000 ₹ 42,000

First and Final Call Money Received ₹ 13,38,000

24. Revaluation A/c

Amount Amount
Particulars Particulars
(Rs) (Rs)

To Stock A/c 27,400 By Land and Building A/c 35,000

To Furniture A/c 16,000 By Plant and Machinery A/c 6,750

To Investments A/c 7,300 By Loss Transferred to Capital A/cs

To Liability against Bills O 7,977

Receivable Discounted 7,004 R 5,318

S 2,659 15,954

57,704 57,704
====== =======
Partner's Capital A/c
Particulars O R S H Particulars O R S H

10 / 18
 Amount Amount Amount Amount Amount Amount Amount Amount
(Rs) (Rs) (Rs) (Rs) (Rs) (Rs) (Rs) (Rs)

To Current A/c 75,000 50,000 By Balance b/d 1,75,000 1,50,000 1,25,000

To Balance c/d 1,00,000 1,00,000 50,000 50,000 By cash A/c 50,000

1,75,000 1,50,000 1,25,000 50,000 1,75,000 1,50,000 1,25,000 50,000

====== ======= ======= ====== ======= ====== ====== ======
Partner's Current A/c
O R S O R S
Particulars Amount Amount Amount Particulars Amount Amount Amount
(Rs) (Rs) (Rs) (Rs) (Rs) (Rs)

To Balance b/d 7,000 By Balance b/d 4,000 6,000

To Revaluation A/c (Loss) 7,977 5,318 2,659 By General Reserve A/c 7,500 5,000 2,500

To Balance c/d 97,023 45,015 82,008 By Profit and Loss A/c 3,500 2,333 1,167

By Premium for Goodwill A/c 15,000

By Capital A/c 75,000 50,000 75,000

1,05,000 57,333 84,667 1,05,000 57,333 84,667

======= ====== ====== ======= ====== ======
Working Note:
When a new partner is admitted he/she acquires his/her share in profit from the existing partners. As a result, the profit sharing
ratio in the new firm is decided mutually between the existing partners and the new partner.
i. Calculation of Sacrificing Ratio
Old ratio = 3:2:1; New ratio = 2:2 :1:1
Sacrificing Ratio = Old Share - New Share
3 2 1
O = − =
6 6 6

R=
2

6
−
2

6
= Nil
1 1
S = − = Nil
6 6

Here, only O has sacrificed his 1

6
th share.
Over a period of time, a business firm develops a good name and reputation among the customers. This help the business earn
some extra profits as compared to a newly set up business. In accounting capitalised value of this extra profit is known as
goodwill.
i. Adjustment of Goodwill
1
H's share of goodwill = 90, 000 × 6
= Rs15, 000

As only O has sacrificed his share, therefore, he will get = Rs15,000

ii. Adjustment of Capital
Total Capital of the Firm = H’s Capita× Reciprocal of His share
6
= 50, 000 × = Rs3, 00, 000
1

New profit sharing ratio = 2:2:1:1

O's new capital = 3, 00, 000 × = Rs1, 00, 000
2

R's new capital = 3, 00, 000 × 2

6
= Rs1, 00, 000

S's new capital = 3, 00, 000 × 1

6
= Rs50, 000

H's new capital = 3, 00, 000 × 1

6
= Rs50, 000

OR
IN THE BOOKS OF THE FIRM
JOURNAL ENTRIES
Date Particulars L.F. Dr. (₹) Cr. (₹)

2023
A's Capital A/c Dr. 6,000
April 1

11 / 18
 B's Capital A/c Dr. 4,000

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

To Profit & Loss A/c

(Transfer of loss appearing in the Balance Sheet in old partners capital account in old 12,000
profit sharing ratio)

C's Capital A/c Dr. 50,000

To B's Capital A/c

50,000
(B's share of goodwill debited to C, as he alone has gained)

Plant and Machinery A/c Dr. 50,000

To Revaluation A/c
50,000
(Increase in the value of Plant and Machinery recorded through revaluation account)

Revaluation A/c Dr. 68,000

To Stock A/c 30,000

To Debtors A/c 30,000

To Workmen's Compensation A/c

(Decrease in the value of assets and provision made for Workmen's Compensation 8,000
recorded through revaluation account)

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

B's Capital A/c Dr. 6,000

C's Capital A/c Dr. 3,000

To Revaluation A/c
(Transfer of loss on revaluation transfer to old partner account in old profit sharing 18,000
ratio)

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

To B's Loan A/c

2,00,000
(Transfer of B's Capital to his Loan Account)
PARTNER'S CAPITAL ACCOUNTS
Dr. Cr.

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

To Profit & Loss A/c 6,000 4,000 2,000 By Balance b/d 2,00,000 1,60,000 1,40,000

To B's Capital A/c 50,000 By C's Capital A/c 50,000

To Revaluation A/c 9,000 6,000 3,000

To B's Loan A/c 2,00,000

To Balance c/d 1,85,000 85,000

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

BALANCE SHEET OF A AND C
as at 1st April, 2023
Liabilities ₹ Assets ₹

Creditors 52,000 Bank 70,000

Outstanding Expenses 10,000 Debtors 50,000

12 / 18
 Workmen's Compensation 8,000 Stock 1,20,000

B's Loan (at 18% p.a.) 2,00,000 Plant and Machinery 3,00,000

Capital Account balances:

A 1,85,000

C 85,000 2,70,000

5,40,000 5,40,000
New Ratio - Old Ratio
3−3
A= − =1

2
3

6
=0 6
1 1 3−1 2
C= 2
−
6
= 6
= 6
2
Only C gain 6
th share.
25. Books of Ram, Shyam, and Hari
Revaluation Account
Dr. Cr.

Particulars Amt(Rs) Particulars Amt(Rs)

To investments A/c ( working note under) 1,000 By Building A/c 10,000

To Stock A/c( 4,000 x 7%) 280 By Provision for Doubtful Debts A/c 1,600

To Profit transferred to: ( as all debtors were good then no need of p.f.b.d)

Ram's Capital A/c (10,320 x 1/3) 3,440

Shyam's Capital A/c(10,320 x 1/3) 3,440

Hari's Capital A/c(10,320 x 1/3) 3,440 10,320

11,600 11,600
Partner's Capital Accounts
Dr. Cr.

Particulars Ram(Rs) Shyam(Rs) Hari(Rs) Particulars Ram(Rs) Shyam(Rs) Hari(Rs)

To Goodwill( given in old

1,000 1,000 1,000 By Balance b/d 51,000 40,000 40,000
balance sheet)

To Hari's Capital A/c 2,000 -- -- By Reserve A/c 8,000 8,000 8,000

To Cash A/c ( paid By Revaluation

-- -- 13,440 3,440 3,440 3,440
immediaterely) A/c(Profit)

By Profit and Loss

To Hari's Loan A/c -- -- 40,000 1,000 1,000 1,000
A/c

By Ram's Capital
To Balance c/d 60,440 51,440 -- -- -- 2,000
A/c

63,440 52,440 54,440 63,440 52,440 54,440

By Balance b/d 60,440 51,440 ---

Balance Sheet
as at 1.4.2003
Liabilities Amt(Rs) Assets Amt(Rs)

Creditors 24,400 Cash 86,560

Ram's Capital 60,440 Debtors(28,400 + 1,600) 30,000

Shyam's Capital 51,440 Stock(4,000 - 280) 3,720

13 / 18
Hari's Loan 40,000 Computers 9,000

Bills Payable 90,000 Building(1,00,000+10,000) 1,10,000

Investments(30,000-3000) 27,000

2,66,280 2,66,280
Hari's Loan Account
Dr. Cr.

Particulars Amt(Rs.) Particulars Amt(Rs.)

31.3.2004 To Cash A/c(10,000 + 4,000) 14,000 01.4.2003 By Hari's Capital A/c 40,000

By Interest A/c
31.3.2004 To Balance c/d 30,000 31.3.2004 4,000
(10% on Rs 40,000)

44,000 44,000

31.3.2005 To Cash A/c(10,000 + 3,000) 13,000 01.4.2004 By Balance b/d 30,000

By Interest A/c
31.3.2005 To Balance c/d 20,000 31.3.2005 3,000
(10% on Rs 30,000)

33,000 33,000

31.3.2006 To Cash A/c(10,000 + 2,000) 12,000 01.4.2005 By Balance b/d 20,000

By Interest A/c
31.3.2006 To Balance c/d 10,000 31.3.2006 2,000
(10% on Rs 20,000)

22,000 22,000

31.3.2007 To Cash A/c(10,000 + 1,000) 11,000 01.4.2006 By Balance b/d 10,000

By Interest A/c
31.3.2007 1,000
(10% on Rs 10,000)

11,000 11,000
Working Note:
Instalment of Loan = 40,000 / 4 =10,000
calculation of Investment for revaluvation
investment given 30,000
investment reduce by 10% i.e 30,000 x 10 % = 3,000 & investment fluctuatiom reserve = 2,000 so investment in
revaluation 1,000.
Old ratio between Ram & Shyam & Hari = 1:1:1
New ratio = 2:1.
Gaining ratio = New ratio - Old ratio
Ram's share = 2/3 -1/3 = 1/3
Shyam's share = 1/3 -1/3 = 0
So the entry will be
i. Calculation of Goodwill
Profit for 2000-01 ? 9,000

Profit for 2001-02 ? 6,000

Profit for 2002-03 ? 3,000

? 18,000
18,000
Average Profit = 3
= Rs 6,000
ii. Goodwill = 6,000 so Hari's share = 6,000 x 1/3 = 2,000
iii. Treatment of Goodwill
Date Particulars L.F. Dr.(Rs.) Cr.(Rs.)

14 / 18
 1.4.2003 Ram’s Capital A/c Dr. 2,000

To Hari’s Capital A/c

2,000
(Being Hari’s share of goodwill adjusted to Ram’s capital account)
26. JOURNAL
Date Particulars L.F. Dr .(₹) Cr.(₹)

2022
Bank A/c Dr. 8,00,000
July 1

To Debentures Application A/c

8,00,000
(Application money received on 20,000, 7% Debentures @ ₹ 40 per debenture)

Debentures Application A/c Dr. 8,00,000

To 7% Debentures A/c
8,00,000
(Allotment of 7% Debentures made

Debentures Allotment A/c Dr. 8,00,000

To 7% Debentures A/c 6,00,000

To Securities Premium A/c

2,00,000
(Debentures allotment money along with premium due)

Bank A/c Dr. 8,00,000

To Debentures Allotment A/c

8,00,000
(Debentures allotment money received)

2023 March
Debentures Interest A/c Dr. 73,500
31

To Debenture holders' A/c

(Interest on debentures @ 7% p.a. for 9 months on ₹ 14,00,000, being the paid-up 73,500
amount of debentures)

Debenture holders' A/c Dr. 73,500

To Bank A/c
73,500
(Interest paid to debenture holders)

Statement of Profit & Loss (Finance Cost) Dr. 73,500

To Debentures Interest A/c

73,500
(Interest on debentures transferred)
Part B :- Analysis of Financial Statements
27. (a) Management
Explanation:
Management
OR

(d) (A)
Explanation:
When liability is due to be settled within 12 months or operating cycle period from the closing date of the previous accounting
period it is shown under the current liabilities.

15 / 18
28.
(b) 1 : 1
Explanation:
Ideal liquid ratio is 1:1 i.e. Liquid assets should be equal to the current liabilities. In other words it represents a more stringent
test for the liquidity of a company in comparison to the current ratio

29. (a) Increase in Creditors

Explanation:
Increase in Creditors
OR

(c) Outflow ₹ 61,600

Explanation:
Cash flow from financing activities:
Redemption of debentures ₹ 40,000

Interest on debentures ₹ 21,600

₹ 61,600
Interest on debentures
= 1,60,000 x + 40,000 ×
12

100
12

100
×
6

100

= ₹ 19,200 + ₹ 2,400
= ₹ 21,600

30.
(c) Payment of Wages
Explanation:
Payment of Wages results into outflow of cash

31. EXTRACT OF COMPANY'S BALANCE SHEET

AS AT 31 MARCH 2017
Current Year Previous Year
Particulars Note No.
₹ ₹

Assets

Non-Current Assets

Deferred Tax Assets 2,00,000

Current Assets

Inventories (Loose Tools + Goods in Transit) 60,20,000

Other Current Assets (Prepaid Exp. + Interest Accrued on Investment) 25,000

32. Rate of Credit Sale of cash sale = 4

Credit Sale
= 4

1
Cash Sale

10,00,000
Cash Sale = 4
= 2,50,000
Total Sale = Cash Sale + Credit Sale = 2,50,000 + 10,00,000 = 12,50,000
Cost of good sold = 5,80,000 + 20,000 + 1,00,000 + 20,000 = 7,20,000
Gross Profit = Sale - Sale of good sold
= 12,50,000 - 7,20,000
= 5,30,000
Gross P rof it 5,30,000
Gross Profit ratio = = 12,50,000
× 100
N et Sale

= 42 . 4%

16 / 18
33. Vichar Ltd.
Comparative Statement of Profit and Loss
for the years ended 31st March 2018 and 31st March 2019

2017-18 (₹) 2018-19 (₹) Absolute Increase/Decrease (₹) Percentage Increase/Decrease (%)
Particulars C
(A) (B) (C = B - A) (D = × 100)
A

Revenue from operations 4,00,000 12,00,000 8,00,000 200

Total Revenue 4,00,000 12,00,000 8,00,000 200

Less expenses:

Cost of materials consumed 2,00,000 4,00,000 2,00,000 100

Other expenses 40,000 80,000 40,000 100

Total expenses 2,40,000 4,80,000 2,40,000 100

Net Profit before Tax 1,60,000 7,20,000 5,60,000 350

Less Tax Paid 80,000 3,60,000 2,80,000 350

Net Profit after Tax 80,000 3,60,000 2,80,000 350

OR
COMPARATIVE STATEMENT OF PROFIT & LOSS
for the years ended 31st March 2022 and 2023
Note Absolute Change (Increase Percentage Change (Increase
S.No. Particulars 20221-22 2022-23
No. or Decrease) or Decrease)

1 2 3 4 5

A B (B - A = C)
C
× 100 = D
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 Tax

III. (50,000) 15,60,000 16,10,000 3,220.00
(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 FROM OPERATING ACTIVITIES
Particulars ₹ ₹

Cash flows from Operating Activities:

Net Profit before Tax (₹ 3,50,000 - ₹ 2,00,000) 1,50,000

Add: Provision for Tax 50,000

2,00,000

17 / 18
Add: Non - Cash and Non-operating Expenses:

Depreciation on Provided (WN 2) 40,000

Loss on sale of Machinery 18,000

Goodwill Amortised 5,000 63,000

Operating Profit before working Capital Charges 2,63,000

Add: Increase in Current Liabilities: Trade Payables 17,000

2,80,000

Less: Increase in Current Assets:

Inventory 75,000

Trade Receivables 67,000 1,42,000

Cash Generated from Operating 1,38,000

Less: Tax Paid 30,000

Cash Flow From Investing Activities: 1,08,000

Working Notes:
1. MACHINERY ACCOUNT
Dr. Cr.

Particulars ₹ Particulars ₹

To Balance b/d 2,00,000 By Accumulated Depreciation A/c 20,000

By Loss on Sale of Machinery A/c

To Bank A/c (Purchases) (Bal. Fig.) 1,60,000 18,000
(Statement of Profit & Loss)

By Bank A/c (Sale) 42,000

By Balance c/d

2,80,000

3,60,000 3,60,000
2. ACCUMULATED DEPRECIATION ACCOUNT
Dr. Cr.

Particulars ₹ Particulars ₹

To Machinery A/c 20,000 By Balance b/d 80,000

By Depreciation A/c
To Balance c/d 1,00,000 40,000
(Statement of Profit & Loss) (Bal. Fig.)

1,20,000 1,20,000

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