—— elements of Accounts : 37) Sacro Std.-12 © Elements of Acccunts * (154) Preliminary,and Board Examination | Time : 3.00 Hours] [Total Marks : 100 instructions + () This question paper contains 6 sections and total 48 questions @) Answers should be written according to the instruction only. ® Figures to the right side indicate full marks for the questions. (4) Use pencil and scale wherever necessary. (5) Use of simple calculitor is permitted. (©) Start new section on a new page. ‘Section- A Questions from 1 to 20 are objective types qustions. Choose the correct answer from the options given and write. Each question carries 1 mark: - What percentage of interest will be paid on the loan lent by the partner to the firm, when no such provision is made in the partnership deed ? (A) 6% B) 9% © 12% (D) No interest 2 What is the interest on drawings of partners for a partner?) (A) An expense (B) Liability (© Income ””"" (D) Loss 3. Which of the following factor is not affected to the valuation of goodwill ? (A) Efficiency of owners of the business (8) Place of business (© Special benefit of business (D) Place of customer 4, Total weighted average profit of a firm’ for last four years is % 45,000. What is the value of goodwill if it is calculated on the basis of weighted average profit of last 2 years purchase ? (a) &9,000 (B) % 22,500 (©) % 90,000 (D) 245,000 5. At the time of the reconstruction of a partnership firm, investments are shown at,....... value in the balance-sheet after the revaluation, (A) Book value (B) Cost value (© Market value (D) Face value 6. Where are the effects given when the value of liabil of a partnership firm ? | (A) Subtract from such liabilities and ‘the revaluation account will be credited. () Subtract from such liabilities and the revaluation account will be debited. (© Addition in such liabilities and the revaluation account will be credited. (©) Addition in such liabilities and the revaluation account will be debited. 7, Revaluation, account is type of account. ) personal (B) nominal ( real Profit or loss of revaluation account is transferred to (a) old partners, equal (©) old partners, sacrificing ratio ities‘ decrease at the time of the reconstruction (D) temporary ACCOUNE IM vse Fatio. (B) all partners, new profit-loss sharing ratio (D) old partners, old ratio“s y 6 Kumar's 7 Star Test Pape, ‘ E 9. Goodwill shown in the balance sheet at the time of the retirement of a partner Is recorded as : (A) shown in new balance sheet, if decided by partners. s (B) debit side of ‘al part capital A ‘aur in their old profit-loss sharing ratio, 2 © credit side of all partners’ capital accounts in their old profit-loss sharing ratio. 2 FS © debit side of retiring partners’ capital account only. 4 . hat is the type of realisation account ? 7 (A) Balance sheet (B) Personal (C) Real (D) Nominal 2 ll. The closing balance of which of the follos ing account is not taken to Realisation account on the diy, § of dissolution of the firm ? (A) Bad debts reserve account (B) Debtors account (© Investment account (D) Bank account i ; 12, At what minimum price per share company can issue shares according to current provisions «, Companies Act ? (a) © 100 (B) = 1000 or () % 0.50 13. As per SEBI guidelines, the minimuin amount on each share called by company on applicatic, must be at least % of the issue price. as (A) 25 (B) 30 os (p) 20 14. On which debentures interest coupons are given with debenture certificate ? (A) Registered debenture (B) Bearer debenture, (©) Convertible debenture (D) Permanent (fixed) debenture 15. The analysis of financial statements are done for decision making by management s.known as ___ (A) Internal Analysis “(B) External Analysis (C) Long-term Analysis (D)_ Vertical Analys 16. If the comparison of financial statements for different years is done then that analysis is known ; (A) External Analysis Horizontal, (B) Time ‘series Analysis (©) Vertical Analysis (D) Intérnal Analysis 17. Liquidity ratio is . (A) measurement of solvency (8) measurement of short-term profitability (C) measurement of profitability (D) measurement of liquidity 18. Which of the following ratio is profitability ratio ? (A) Liquid Ratio (B) Stock turnover (C) Operating ratio (D) Working capital turnover 19. Which of the following transaction is not a operating transaction ? (A) Written off Depreciation (B) Written off Fictitious Assets (C) Written off Intangible Assets (D) Proposed Dividend 20. Increased in current assets and decrease in current liabilities ..... (A) both are cash outflows (B) beth are cash inflows (© are cash outflow and cash inflow respectively (D) are cash inflow and cash outflow respectively 4 : Section - B 3 @ Answer the following question from 21 to 30 in one sentence each. Each question carries 1. mark : F a 21. Profit of a partner is credited to which account under fixed capital account method ? 22. At which value assets-liabilities are shown in’ the balance sheet after revaluation ? 23. Explain accounting treatment of old goodwill appearing in the balance sheet of the firm at the tim’ of the retirement of a partner,7 _a Elements of Accounts 7 24. In which type of partnership, dissolution of firm is done through notice ? 25. Why is realisation account opened ? 26. What is meant by ‘Issue of debentures for consideration other than cash’ ? 27. In which forms ratios can be presented ? 28. _ What is shareholder's funds ? 29, Where are the self-constructed assets recorded 7 30. In which activity the received dividend afd interest are recorded 7 Section - C @ Answer the following 31 to 36 questions in short. Each question carries 3 marks : (Any four) 12 31. Ram, Rahim and Ishu are partners of a partnership firm. Their capital as on 1-4-2022 was ¥ 60,000, % 40,000 and % 50,000 respectively. After the distribution of the profit of the year, it was realized that charging of 6% interest on partners capital accounts was missed out. Write an entry for the rectification of error. 32. Dipak, Nilesh and Pratik are the partners of a, partnership firm. Their profit-loss sharing ratio is 1:2: 3, which is decided to change to 2 : 2: 1 respectively for future. Under these circumstances, calculate what gain is received by.which partners ? 33. Explain methods of dissolution without the interference of court. 34, Write journal entries for the following transactions of firm in the case of firms dissolution. (@) Total assets of the firm at the time of dissolution is % 4,00,000. Out of which 40% are current assets (including cash % 20,000). 120% realised for fixed assets. While 80% are realised of current assts, (2) % 40,000 are payable to Aman, but not recorded in th books. The unrecorded asset of ¥ 20,000 is given to him and remaining amount is paid by cheque. (3) Due to which contingencies or happening partnership firm is automatically dissolvd ? 35. On 1-4-2023 Shiv Limited issued 8,000, 7.5% debentures of % 250 each at a discount of 5%. All the debentures aré to be redeemed after 5 years as on 31-3-2028 at a premium of 10%. Write the necessary journal entries in the books of company (without narration). 36. — Prakhar Limited issued 8000 7.5% convertible debentures of % 200 each at pér as on 14-2023, As per the terms of issue of debentures all the debentures will be converted into shares 4 years and for this one equity share of 710 each will be issued at a premium of 2.5% against each debenture. As per the agreed terms all the debentures are converted into shares as on 1-4-2028, Write necessary journal entries in the boos of company. Section - D © Give answer to the following 37 to 41 questions showing calculations wherever necessary. Each question carries 4 marks : (Any Three) 12 37. From the following information of Amar and Akabar's firm, determine the value of goodwill of partnership firm’ on the basis of capitalization of weighted average profit method Additional information : (1) Business assets : % 6,00,000. (2) Business liabilities : % 1,70,000. (3) Normal expected return of business is 10%. Year 2018-19 [2019-20 | 2020-21 | 2021-22 | 2022-23 | Profit @® | "45,000 | 50,000 | 65,000 75,000 90,000 _| 38. From the following information of Mohan and Sohai firm, determine the value of goodwill on the basis of 3 years purchase of last five years weighted average ‘profit. Year 2018-19 [2019-20 | 2020-21 | 2021-22 | 2029-23 Profit (@)_| 1,00,000- | 1,20,000 | (40,000) 60,000 80,0007 y 19 7 Star Tost Pap, Hs 3 Kumar’ = 2o2s of Niemi Limites, g1-3-2022 and 31 89. Profit and toss statement for the year ending on 319-2002 TAN gg, given as follows. Prepare comparative statement of profit Note g-2021 Particulars |_No-_| | 75 000"| fetvo yf Raricitors, 2 Yet | 50,751 Sales revenue 70 Te Other income Expenses : . 36,00,000 Cost of goods cor 2,70,000 2,00.01, Net purchase for re 90,000 70,0145, Changes in stock 5,60,000 4,00,0, 4 Employce benefit expenses 135,000 90,00) Financial cost 105,000 70,0100, Depreciation and amortized amount : Income tax rate 30%. aad 40. On the basis of details given below of Priya Limited, Galculate current ratio and au dai Particulars ‘Amt. @) Particulars ea Debtors -2,20,000 | Farniture 0001 Bills receivables ‘40,000 | Bills payable Tagiad Bad debts reserve 10,000] Short term loan "25,001 Stock: ih 40,000 | Unpaid expenses yon Cash and cash equivalent 60,000 | Creditors 80,000 Machinery 1,50,000 41. From the following information calculate cash flow from operating activities + Particulars '31-3-2023 (%) | 31-3-2022 (%, Profit and Loss A7e 60,000 25,000 General reserve 45,000 35,000 Taxation provision 38,000 48,000 Depreciation fund 42,000 32,000 Goodwill 27,000 38,000 Debtors 49,000 39,000 Creditors 39,000 29,000 Outstanding expenses 12,000 17,000 Prepaid expenses 14,000 10,000 (@® Profit on sale of assets 15,000 (iv) Interest paid on debenture % 32,000 (i) Loss on sale of furniture = 8,000 (v) Dividend payment % 10,000 Gii) Income of rent = 48,000 s . Section - E @ _ Following 42 to 46 questions are essay type questions. Each question carries 8 marks: (Any Three) oi 42. Parnita and Mayuri are the partners sharing profit and loss in the ratio of 2 : 1, Balance sheet of thei firm as on 31-3-2023 was as under : Balancf Sheet Liabilities - Amt. (@) Assets | Amt. @ Capital Accounts : Goodwill i000 Parnita 91,000 Building 1,40,000 Mayuri 84,000 1,75,000 | Furniture "28,000 Capital reserve 14,700 | Stock ‘ 18,200 Workmen saving account 7,000 | Debtors 7 16,800 workmen profit sharing fund 8,400 | Cash oe 56,000 10% Loan from bank 35,000 rE Creditors 39,900 2,680,000 [-2,80,000 | en .Elements of Accounts On 1-4-2023 they admitted Hetanshi as a new partner on the following conditions : Q) New profit and loss sharing ratio is to be kept at 3: 4 : 2. (2) Hetanshi brings € 40,000 as capital. 8) Interest on bank loan is outstanding for one year. (4) Personal expense of Parnita paid by the firm is debited to the profit and loss account ¥ 5,600, (5) Reconstruction expense is paid by Mayuri & 8,400. (6) Goodwill is valued at % 90,000, (7) Parnita and Mayuri will maintain their capital in the new firm in their new profit and loss sharing ratio by taking Hetanshi's capital as base. For this purpose necessary adjustments should be made in partners’ current account. Prepare necessary accounts and balance sheet after admission. 43. Ankita and Nikita are the partners sharing profit and loss in the ratio of 2 : 1. Balance sheet of - their firm as on 31-3-2023 was as under : Balance Sheet Liabilities ‘Amt. @ ‘Assets ‘Amt. @) Capital Accounts : Machinery 64,000 Ankita Furniture 40,000 Nikita 96,000 | Stock 13,600 General reserve 16,800 | Debtors 40,000 Creditors 60,000 | - Bad debt reserve 3,200 36,800 Bills payable 8,000 | Cash-Bank 26,400 1,80,800 1,80,800 ‘They admitted Archita as a new partner-on 1-4-2023 on the following conditions : @ Ankita sacrificed 3 th from her share and Nikita sacrificed } th from her share in favour of Archita. (2) Archita is to bring proportionate capital. (3) Archita is to bring her share of goodwill in cash. Goodwill of the firm is valued at € 90,000. (4) Fixed assets are to be depreciated by 10%. (5) All debtors are good. (6) Insurance premium of % 2,400 out of % 12,000 is to'be carried forward to next year. Prepare necessary accounts and balance sheet after admission of Archita. 44. MN and O are partners sharing profit and loss in the ratio of 5 : 3 : 2. Balance sheet of their firm on 31-3-2023 was as under : Balance Sheet Liabilities Amt. @ ‘Assets Amt. @) Capital Accounts : Building 1,20,000 M 60,000 Machinery 80,000 N 30,000 Stock 30,000 |" oO 50,000 1,40,000 Debtors 40,000 ; - Bad debt reserve 2,000 38,000 Reserve fund 50,000 | Cash 22,000 ‘Workmen profit sharing fund 30,000 Creditors 70,000 2,90,000 2,90,000 O retired on 31-3-2023. Conditions of retirement were as under : () O's profit share will be gained by M and N in the ratio of 2 : 3. (2) Goodwill of the firm is-valued at T 1,00,000. (8) Bad debt reserve on debtors is to be increased by 10%. (4) Building is valued at 110%. ) Value of machinery is to be reduced by 10 %. (6) Annual insurance premium of € 24,000 is paid for the year ended on 30-6-2023. (7) M and N will maintain total capital of the firm & 1,00,000 in their new profit and loss sharing ratio after retirement of O. Prepare necessary accounts and balance sheet after retirement. : tAy ft 10 45. 46, a7. ‘ Kumar's 7 Star Test Papors, Vikeant Atotats Lit of Fannnagar tssuedt 800,000 equity shares of € 10 eaely at a promlum of &'30 py, = shar, The amount was payable as unde! 713 (including premium of & 10) per 7 share on allotment & 4 per share on final call ee Company received share application for 8,00,000 shares and all the SOE Ee werd allottey shares. Vipul, who was allotted 1,500 shares, did not pay money due on allotment H hence I were forfeited by company after allotment, Company reissued all (hese 1,500 shares before Final call &5 per share. : a Hema, who was allotted 500 shares, die! not pay money due on final eall andl therefore her share, were forfeited by company. Company reissued these 600 shares at maximum permissible discount, Pay. journal entries for above transactions in the books of company. ; Mevada Agro Company of Wyara issued 5,00,000 equity shares of & 10 each to public, Company call %3 per share on application, F4 per share on allotment and hare on first and final cal Company received application for 5,75,000 equity shares from pub applications were reject and money paid on them was refunded. i , Viral, who had applied for 2,000 shares, had paid full amount & 10 per share along with application Company had allotted him all the shares applied for. Yagnesh, who was allotted 2,500 shares, had paid amount due on first and final call along with share allotment money. Except this, amount due on allotment and calls were ‘duly received from time to time. Pass necessary journal entries in the books of company for above transactions. Section - F Answer the following 47 to 48 questions. Each question carries 11 marks : From the Trial Balance and adjustments of partnership firm of Saif and Kareena, prepare final accounts of partnership firm. ei ‘Trial Balance of Partnership Firm of Saif and Kareena as on 31-3-2023 share on application; € 23 (including premium of & 20) p., 4 Par ulars Debit balance | Credit balance ® @ Capital Account : Saif - 1,60,000 Kareena - 1,20,000 Current Account : Saif : 10,000 ! Kareena : 40,000 Stock of goods (31-3-2023) 54,600 - Cash balance 560 4 | Current account with bank 14,000 4 Fixed deposit of SBI 80,000 2 Debtots - creditors 36,800 24,000 Salary yf 37,000 a | Land-building 1,20,000 Bett | Plant-machinery * 40,000 * : | Furniture 10,000 a | Insurance premium 2,000 i Leasehold machinery (from 1-4-2022 for 5 years). 60,000 . Stationery and printing 1,200 phy ‘i Bad debts - bad debts reserve ‘ Advertisement expense 1,200 seo 2,000 Travelling expense a me | Trading A/c 2 eribo | Loan of Kareena (from 1-10-2022) i eao00 Discount reserve i i 60 ; 4,68,560 4,68,560_ |Elements of Accounts 1 Adjustments : (1) Saif withdrew goods of % 4,000 for personal usé. It is’ not recorded in the books. (2) Goods of @ 8,000 purchased at the end of the accounting year, which is not recorded. (3) Prepaid insurance is % 400. (4) From debtors % 800 not recoverable, Provide 5% bad debts reserve on debtors. (5) Discount reserve on debtors is not required. (6) Provide depreciation on plant-machin- ery at 20% and on furniture at 5%. 48. Following is the trial balance of Parth Ltd. as on 31-3-2023 : Particulars Debit @ | Credit @ Sales 11,25,000 Employee benefit expenses 1,95,000 Inventories 1,65,000 Finance costs 26,250 Security premium 60,000 Fixed assets - tangible 12,00,000 Trade payables 90,000 Equity share capital 7,50,000 Trade receivables 60,000 Other income 30,000 Long-term borrowings 5,25,000 Cash and bank balance ‘90,000 > | Depreciation 33,750 Cost of goods sold 6,00,000 Non-current investments 2,10,000 25,80,000 | _25,80,000 From the above information, prepare final accounts of the company for the year ended on 31-3-2023 as per schedule-III of Companies Act, 2013. Notes to the accounts are not required. ooo 1, “W) Nointerest 6 fe (@ 11. (D) Bank account 2. (A) An expense 12 © %1 s 3. (D) Place of customer 13. (A) 25 4. (A) 79,000 (© 40,000 - 14. (B) Bearer debenture z 5. (©) Market value 15. (A) Internal Analysis 6. (A) Subtract from such liabilities and the revaluation account will be credited. 16. (C) Vertical Analysis (A) Wori2on tel, 7. (B) nominal 17, (D) measurement of liquidity 8 @) old partners, old ratio 18. (C) Operating ratio i 9. (B) debit side of all partners’ capital accounts in their old profit-loss sharing ratio. 19. (D) Proposed Dividend 10. (C) Real 20. (A) both are cash outflows Section - B 21, Profit of a partner is credited to which account under fixed capital account method ? > Profit of a partner is credited to current account under fixed capital account method.ee “708 Kumar's 7 Star Test Pape, 22 Eler 22. At which value assets-liabilities are shown in the balance sheet ae biipren hate evaluation, 32+ > Assets and liabilities are shown at their actual (market) values in the balance ee ts vali, 23, Explain accounting treatment of old goodwill appearing in the balance sheet o! th time of the retirement ner. ol ‘he redrement of « partner, goodwill appear in the| balance sheet ofa firm distribute among partners in their old profit- loss ratio, Journal entry for that. All partners’ capital A/e Dr. To Goodwill A/c a (Being old goodwill amount distributed among partnership their old profit-loss ratio) 24. In which type of partnership, dissolution of firm Is done through notice ? a * __ In the partnership at will, the dissolution can be done through notice. 25. — Why is realisation account opened ? * To give the accounting effects of the money realised and amount paid during dissolution of partnership firm, the realisation account is opened. 26. What is meant by ‘Issue of debentures for consideration other than cash’ * When company issues debentures against purchase of assets like Land-Building, plant anj machinery, purchase of business etc. than it is known as ‘Issue of debentures for consideration ‘other than cash." 27. _ In which forms ratios can be presented ? > Ratios can be presented in the following ways. @) In terms of proportion (2) In terms of percentage (3) In terms of times (4) In terms of fraction (5) In terms of days/weeks/months. 28. What is shareholder's funds ? * ___ Shareholder's funds is owner's funds only which includes, equity shares capital, preference share capital reserves and surplus and deducted debit balance of P & L A/c. 34. 29. Where are the self-constructed assets recorded ? ; > Self-constructed assets are recorded in activities of cash outflow of investing activities. 30. In which activity the received dividend and interest are recorded ? > In investing activities, the received dividend and interest are recorded, seg Section - C f 31. Particulars Ram (@) | Rahim @% | Ishu @ | Total @ | Capital of Partners 60,000 40,000 |* “50,000 | Interest on Capital @ 6% (Amt. receivable) . 3,600 2,400 3,000 9,000 | Total interest on Capital ¥ 9,000, | equally dist. among partners (Amt. received) 3,000 3,000 3,000 9,000, Difference of amount 600 600 = a Rectification Entry : Journal Proper Date Particulars LE | Debit %) | Credit &) 31-3-23 Rahim’s Capital/Current A/e Dr. 600 To Ram’s Capital/Current A/é 600: (Being interest on capital @ 6% is ommited, now rectified)Elements of Accounts 3 32. Name of the] Old] New | Sacrifice done by Partner Sacrifice oF Partner Share Share = Old share — New share Gain of a Pranter ce 2 1 2 Dipak 2 t =2 Gain : 2 Nilesh 2 2 = Gain ; 1 3 1 Pratik = S ue i ra 5 3 =5 Sacrifice Here, Gain of Dipak = %, Nilesh = 2, and Sacrifice of Pratik = 35 - 33. (Normal Dissolution/Dissolution without interference of Court : It is as under : @ a ii By agreement : When all partners agree to dissolve the firm, partnership firm can be dissolved at any point of time. It is voluntary dissolution. i) Dissolution on happenings of certain contingencies : (a) If arrangement for a fixed term, by-the expiry of that term. (b) If arrangement to’carry out specific aim, by the completion thereof. i). Dissolution by notice : Where the partnership is at will, the firm may be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm. (iv) Dissolution as per act : In the following conditions compulsory dissolution is taken place by the act. (a) When all the partners of the firm become insolvent, or except one, all partners become insolvent. (b) When business of firm becomes illegal, this also. brings dissolution of a partnership firm, E.g. If a firm doing business of Tobacco and government put restriction through law on this business, then this business automatically become illegal and dissolve. (c) When any partner be- comés mental weak or due to his death. Partnership is going to end and firm dissolve. (v) Dissolution as per contract : Dissolution of a partnership firm can be done on the basis of prede- termined contract between the partners. [Date| Particulars LE Debit (@)| Credit (®) () | @_ Realisation Ave Dr 3,80,000 To Fixed Assets A/c 2,40,000 To Current Assets A/c 1,40,000 (Being Assets A/c are closed and transferred to Realisation A/c) (i) Cash/Bank A/e Dr 4,00,000 To Realisation A/c 4,00,000 (Being amount realised from fixed assets % 2,88,000 and current assets @ 1,12,000) @ Realisation A/c Dr 20,000 ‘To Bank A/c «| 20,000 (Being unrecorded creditors are paid) () | Cash/Bank Alo” Dr. 60,000 To Realisation A/c 60,000 (Being realised from sale of goodwill) Total '8,60;000 | 8,60,000= Kumar's 7 Star Test Paper, 14 al entries in the books of Shiv Limited 35. Journal entries | ae ee Date Particulars 1-4-23 [Bank Ale Dr 19,00,000 ey ‘To Debenture application and allotment A/c (8,000 debentures x ¥ 237.50) : 0,000 1-4-23 Debenture application and allotment A/e Dr. .. 00 Discount on debenture A/c Dr. ae (8,000 debentures x € 12.50) Loss on issue of debentures A/c 2,00,000, (8,000 debentures x € 25) To 7.5% Debentures A/c 100.000 (6,000 debentures x % 250) To Premium on redemption of debenture A/c (8,000 debentures x € 25) 31-3-28 |7.5% debenture A/é Dr. -20,00,000 Premium on redemption of debenture A/c Dr 2,00,000 To Debenture holders A/c 22,00,000 31-3-28 |Debentureholders A/c Dr 22,00,000 To Bank A/c 22,00,000 (6,000 debentures x & 275) | , 2,00,000 37 Total 85,00,000 | 85,00,000 36. ° Calculation : “Total amount received on issue of debnetures 8000 debentures x % 200 = ¥ 16,00,000 Price of each equity share to be issued against debentures Price per share of equity share 10 original price + 2.50 premium 312.50 28,000 shares No, of equity share to beissued against debentures 4 Journal Entries in the Books of Company Particulars” LE Debit @ | Credit @ Date 14-23 Bank A/e Dr. 16,00,000 . ‘To Debentures application and allotement 16,00,000 (Being receipt of application money on 8000 debentures of % 200 each. 1-4-23 ‘Debentures application and allotment A/c Dr. 16,00,000 ‘To 7.5 debentures A/c 16,00,000 (Being application money transfer to debnture) 7.5% debentures A/c Dr. 16,00,000, To Debentureholders A/c 16,00,000 (Being 8000 debentures to be converted at | face value into equity shares) | 38= Elements of Accounts 15 1-4-28 Debentureholders A/c Dr. 16,00,000 ‘To Equity share capital A/c 12,80,000 (2,28,000 shares x % 10) To Securities premium reserve A/c 3,20,000 ,28,000 shares x € 2.50) (Being 1,28,000 shares at ¥ 10 each at a premium of 25% on it issued against 8,000 debentures) Total 64,00,000 | _64,00,000 Section - D 37. Statement showing computation of Goodwill Step No. Particulars B Amount (%)| Q) | Capital employed : Total Assets Less : Total Liabilities Net Assets/Capital Employed 4,30,000 (2) | Expected rate of return (3) _| Weighted average profit : Year | Profit(®) | Weight | Weighted Profit @) 2018-19 | 45,000 45,000 2019-20 | 50,000 1,00,000 2020-21 | 65,000" 1,95,000 2021-22 | 75,000 3,00,000 2022-23 | 90,000 4,50,000 Total 15 10,90,000 4,30,000 10% oeene Total weighted profit _ 10,90,000 Weighted average profit = “Total weight = 1 = % 72,667 72,667 Average Profit Expected rate of return 72,667 10 (5) | Goodwill = Capitalized profit — Capital employed = & 7,26,670 ~ & 4,30,000 = ¥ 2,96,670 2,96,670 x 100 (4) | Capitalized profit x 100 = % 7,26,670 7,26,670 38. Here, figure (amount) given in bracket for the year 2018-19 showing loss. It is substracted while "calculation of total profit. otal Profit, __ 1,00,000+1,20,000 + (40,000) + 60,000 + 80,000, Average Profit = Woof Years = + 1,20,000 + (40,000) +60,000+80,000 _ 320,000 Z = Noof Years 3 =: Average profit Goodwill = 64,000 Average profit x No. of years of purchase = % 64,000 x 3 = & 1,92,000oF Kumar's 7 Star Test Pa, 16 39. Comparative Profit-Loss Statement of Nirma Limited for the year ending Ele on 31-3-2022 and 31-3-2023 Saas neeasal | “4 31-32 CFE Particulars Note] 81-8-2022 | SI-S-5028) oreare @| Deena 1 4 | 4 5 (4-3) 6 (Sx, () Sales revenue 45,00,000 | 60,75,000 15,75,000 35.5), (I) Other income 10,00,000 | _7,00,000_| (3,00,000) (30.09, (HD) Total Income (I + 1) 55,00,000 | 67,75,000 | 12,75,000 23.1 (dV) Expenses : (i) Changes in stock 70,000 90,000 20,000 28.57 Gi) Employees benefit expenses 4,00,000 | 5,60,000 | —1,60,000 40. (iii) Cost of goods consumed 30,00,000 | 36,00,000 6,00,000 20.05 Gv) Net purchase for resale 2,00,000 | 2,70,000 “70,000 35.05 (v) Financial cost 90,000 1,35,000 45,000 50.09 (vi) Depreciation and amortized amount 70,000 | _1,05,000 35,000 ‘Total expenses 38,30,000 | 47,60,000 9,30,000 (V)- Profit before tax (III - IV) 16,70,000 | 20,15,000 3,45,000 (VD Less : Income tax (30%) 5,01,000 6,04,500 1,03,500 (VID Profit after tax (V- VI) 11,69,000 | 14,10,500 2,41,500 40. Current Assets : © Current Liabil Debtors 2,20,000 Creditors, E Bills receivables —40,000 Bills payable 2,60,000 Short term loan Less : Bad debts reserve 0,000 Unpaid expenses 2,50,000 ~*~ Total Current Liabilities Stock : 40,000 Liquid Assets = Total current Assets — Stock Cash & Cash equivalent __60,000 + 2 83,50,000—¢ 40,000 ‘Total Current Assets 3,50,000 = %3,10,000 : | _Current Assets (@ Current ratio= Current Liabilities 1,75,000 Liquid Asset: 3,10,000 (4) Liquid Ratio = Girrent abies "1.75,000277"2 41. Cash flow from Operating Activities for the year ending on 31-3-2023 Particulars @ @| Closing balance of profit and loss Ae 60,000 | Less : Opening balance of profit and loss A/c 25,000 Profit of current year 35,000 Add : Non-cash expenses and provisions General reserve (45,000 - 35,000) 10,000 : Depreciation (42,000 - 32,000) 10,000 Taxation provision (of curent year) 38,000 : Goodwill (38,000 - 27,000) 11,000 | Loss on sale of furniture 8,000 | iElements of Accounts 417 Interest paid on debentures 32,000 Dividend payment 10,000 | __1,19,000 1,54,000 Less : Non-operating incomes : Profit on sale of assets 15,000 Income of rent 48,000 63,000 Profit (cash flow) before changes in working capital 91,000 Add: Increase in current liabilities Creditors (39,000 ~ 29,000) 10,000 1,01,000 Less : Increase in current assets Debtors (49,000 - 39,000) 10,000 100 - 10,000) 4,000 Outstanding expenses (17,000 - 12,000) 5,000 19,000 82,000 Less : Tax paid of previous year 48,000 Cash flow from Operating Activities 34,000 Section - E 42, Debit ‘Revaluation Account Credit Particulars Amt. @ ~_ Particulars Amt. @) ‘To Interest on loan A/c 3,500 | By Parnita’s capital A/c 5,600 To Capital A/c - Mayuri 8,400 | By Loss : Old partners’ capital A/c (Recounstiuction exp. paid) Parnita 4,200 Mayuri 2.100 6,300 17,900 11,900 Debit ‘Partners Capital Account Credit Particulars Parnita | Mayuri |Hetanshil Particulars _ Parnita | Mayuri | Hetanshi| @ @ ® @ @ @ To Goodwill A/c 14,000 7,000 —. |ByBalance b/f 91,000 84,000 y To Revaluation A/c 5,600 - - |ByCash A/c ys - 40,000 To Revaluation A/c 4,200 2,100 — |By Capital - Loss o reserve A/c 9,800, 4,900 = To Parnita’s [By Revaluation A/c 8,400 ss capital A/c - 10,000 | . 20,000 [By Mayuri’s To Partners 2 capital A/c 10,000 = = current A/c 47,000 - - |ByHetanshi’s To Balance c/f 60,000 80,000 40,000 capital A/c 20,000 - - [By Partners’ current A/c a 1,800 20,000 1,30,800 99,100 | 60,000 1,30,800 99,100, 60,000 Debit Cash Account Credit Particulars Amt. @ Particulars Amt. @ To Balance b/f 56,000 ‘To Hetanshi’s capital A/c 40,000 | By Balance c/f 96,000 ‘96,000 ‘96,000,> =F . Kumar's 7 Star Teg, by Balance Sheet as on 1-4-2023 after admission "I Liabilities Amt. @ Assets Capital Accounts : Building Pamita 60,000 Furniture ' Mayuri 80,000 Stock Hetanshi ~40,000 | 1,80,000 | Debtors Workmen saving account 7,000 | Cash balance Workmen profit sharing fund 8,400 | + Cash brought by 10% Loan from bank 35,000 | _Hetanshi : Outstanding int. on bank loan 3,500 | Current A/c: Mayuri Creditors 39,900 Hetanshi Current A/c - Pamita 47,000 3,20,800 Note : () Sacrificing Ratio ; Old ratio of Panita and Mayuri “Sacrifice of Parnita Sacrifice of Mayuri 1. New ratio of Pamita, Mayuri and Hetanshi = Sacrifice of partner = Old share - New share 32429 |B (2) New Goodwill : : | Here, valuation of goodwill is % 90,000. So, | 3 Goodwill receivable by Parnita = % 90,000 x 97 % 30,000 Goodwill given to Mayuri = % 90,000 x 3 =%10,000 2 Goodwill given to Hetanshi = 790,000 x 9. % 20,000 _ °*_Entry for Goodwill :- Mayuris’ Capital A/c Dr. 10,000 Hetanshis’ Capital A/c ‘Dr. 20,000 ‘To Pamita’ Capital A/c 30,000 (3) Capital of New partners : 2 : Hetanshis’ capital at 5 part = € 40,000 9 a i = % 40,000 x > = & 1,80, Capital of firm at 1 part = (2) 2 #0000, 3 w, Capital of Parnita’ = % 1,80,000 x 3 = x 60,009 Now, Pi 9 a 4 Capital of Mayuri = 7 1,80,000 x — = % 80,000 P} 9 oS- Elements of Accounts 19 43. Debit Revaluntion Account Great’ Particulars Amt. @), Particulars ‘Amt @ | To Machinery A/c (Depreciation) 6,400 | By Bad debts reserve Ave 3,200 ‘To Fumiture A/e (Depreciation) 4,000 | By Prepaid insurance premium A/c 2,400 By Loss : Old partners’ capital A/e Ankita 3,200 Nikita 1,600 4,800 10,400 10,400 Debit 5 Partners Capital Account Credit Particulars ‘Ankita | Nikita | Archita] ‘Particulars ‘Ankita_| Nikita’ | Archita : ® ®& @. i @_- @. ® To Revaluation By Balance b/F_. | 64,000 | 32,000 = Alc - Loss 3,200 | 1,600 - [By Cash A/c - - 43,500 -| By General reserve A/c 11,200 | 5,600 - ToBalancec/f | 79,500 | 51,000]. 43,500] By Premium for goodwill A/c 7,500:| 15,000 - 82,700 52,600 43,500) 82,700, 52,600. 43,500 Debit Cash-Bank Account Credit Particulars Amt. @ Particulars ‘Amt. @) To Balance b/f 2 26,400 To Archita’s capital A/c 43,500 By Balance c/f 92,400 To Premium for goodwill A/c 22,500 92,400 92,400 Balance Sheet as on 1-4-2023 after admission Liabilities Amt. @) Assets : Amt. @) Capital Accounts : Machinery : 64,000 Ankita 79,500 ~ Depreciation —6.400 57,600 Nikita 51,000 Furniture 40,000 Archita ‘43,500 | 1,74,000| —_ ~ Depreciation 4,000 36,000 Creditors 60,000 | Stock 13,600 Bills Payable 8,000 | Debtors 40,000 Cash-Bank 92,400 Prepaid Insurance Premium 2,400 2,42,000 2,42,000, Note : (2) Sacrificing Ratio : 1 3 Sacrifice by Ankita = 55 ; Sacrifice by Nikita = > v- Sacrificing ratio : 1: 2 Archita’s share = Ankitas sacrifice + Nikita’s sacrifice = ++ 2-31 (2) Goodwill : 12°12 12-4 Goodwill amount to be brought by Archita = 90,000 x 3 = % 22,500 Archita’s goodwill amount, distributed among old partners in the sacrificing ratio = 1 : 2 ita'e o 1 Ankitas goodwill amt, = 22,500 x 3 = % 7,500 ; Nikita’s goodwill amt, = 22,500 x > = % 15,000y j 44. De 20 (3) Archita’s capital : Ankita’s capital in new firm Nikita’s capital in‘new firm Total capital Archita’s share in profit 3 For > share of Ankita and Nikita -> Capital = 1,30,500 1 +. For @ share of Archita ; ki 1 1. total share in profit of Ankita and Nikita =1 ~ 3 > Capital = Kumar's 7 Star Test pa, 3 “4 1 = 1,30,500 x > @ “a 4 x 5 =% 43,500 Revaluation Account G. Particulars Amt. @ Particulars Amt. & ‘To Bad debts reserve A/e 4,000 | By Building A/e 12,000 ‘To Machinery A/c 8,000 | By Prepaid insurance To Profit : Partners capital A/c premium A/c 6,000 M 3,000 N 1,800 o 1.200 6,000 18,000 Dr. Partners’ Capital Accounts t Particulars M N 0 Particulars M N oO @© @© © @ @ @ To O's Capital A/c 8,000 | 12,000 — | By Balance b/f 60,000 | 30,000 | 50,00) (Goodwill) By Reserve Fund A/e’ | 25,000 | 15,000 | 1000) To O's Loan A/c = - | 81,200] By Revaluation A/e 3,000 | 1,800 | 1,29) To Cash Ale 22,000 - = [By M’s Capital A/c - - 8,000 To Balance c/f 58,000 | 42,000 - |) dew goodwill) By N’s Capital A/c - = | 12,00 (New goodwill By Cash A/c - 7,200 - 88,000 _| 54,000 | 81,200] 88,000 | 54,000 | 81,200 Cash Account - cr. Particulars Amt. @ Particulars Amt. @ To Balance b/d 22,000. | By M's Capital A/c 22,000 ‘To N's Capital A/c 7,200 | By Balance cfd 29,200 5 Balance sheet as on 1-4-2023 after retirement 2 Capital-Liabilities Amt. @ Assets Capital Accounts : Building 1,32,000 M Machinery N . 42,000" | 1,00,000 | Stock ‘Workmens’ profit sharing func 30,000 | Debtors 40,000 Creditors 70,000 | - BDR 6.000 O's Loan A/c 81,200 | Prepaid Insurance Premium 3 Cash balance 2,81,200zjements of Accounts 1 Note: (1) Gaining Ratio = Old ratio of M, N and O = ‘After retirement of O, his shi 13:2. ‘are will be obtained by M and N in the ratio of = 2:3 1/ 1-2-1 Gain of N= } Gain of M=§-37> 6 Gaining ratio of M and N = 26=2:3 ‘New Share = Old share + Gain 42544 29, _ 3, 6154621 New share of M= y+ g5= 59 New share of N= jh +g5="378-24 =, New profit - loss sharing ratio of M and N = 29:21. (2) Share of goodwill of O % 1,00,000 x # % 20,000 which will be given to M and N in their yharing ratio of M gaining ratio (2: 3). . i (3) Total capital of New firm 1,00,000 which will be kept in new profit-loss sI and N (29: 21). New capital of M = 1,00,000 x 23= 58,000 New capital of N = & 1,00,000 x 24= 42,000 For this M will withdrawn % 22,000 cash and N will bring € 7,200 cash. 45, Necessary Calculation : (1) At the time of Application : Share capital 8,00,000 shares x73 = % 24,00,000 Premium ,00,000 shares x 710 = % __80,00,000_ Bank A/c = 1,04,00,000_ (2) At the time of Allotment : Share capital 8,00,000 shares x73 = % _ 24,00,000 Premium 8,00,000 shares x 720 = © _1,60,00,000 = 1,84,00,000 Less : Calls in Arrears (Vipul) 1,500 shares x 223 = © %_34,500 Bank A/c = 7,83,65,500 (3) Share Forfetture Vipul : 1,500 shares x Application money % 3 z 4,500 (4) At the time of Final call : 8,00,000 shares x 4 %~ 32,00,000 Less : Calls in Arrears (Hema) 500 sharesx%4 = & 2,000 Bank A/c % 31,968,000, (5) Share Forfeiture : ele 6,000 Hema : 500 shares x Application %3 and allotment money = Journal entries in the books of Vikrant Metals Ltd. Particulars LE] Debit @| Credit @ Bank Ale Dr. 1,04,00,000 To Equity share application A/c 1,04,00,000 (Being application money received on 8,00,000 shares at € 13 , ah per share) 2. | Equity share application A7e Dr e 2 1,04,00, ‘To Equity share capital A/c et | ahenings To Securities premium A/c 4 80,00, (Being received amount transferred to share capital and ee securitiés premium account) Date lLa carrer A, : 1,114,00,000 Elon i Kumar's 7 Star Toat p, 46. Equity share allotment Wve a an, “Wo Kaulty share capital Are btn | To Securities premium Ale hs M0 ay (ing amount due on altoament on 800,000 shares al & 2 per share) 5 AGS P Bank Ale en ee bese Calls int arnears Ae Dr. ta ‘To Equity share allotment Ave MAO, Being amount received on all other shares except 1,500 shares held by Vipul) Tquity share capital ATS Dr end Sceurities premium A/c Dr. i ‘To Share forfeiture Ale Asn To Share allotment A/e My (Being forfeited 1,500 shares of Yipul after due formalities) Bank A7e ‘Dr. 7,500 | . Share forfeiture A/e Dr. 1,500, To Equity share capital Ave 9.0, Geing reissued forfeited shares of Vipul at & 5 per share) ‘Share forfeiture A7¢ ‘Dr. + 3,000 To Capital reserve A/e 3.0, (Being excess amount of share forfeiture accotint transferred to capital reserve account) 8, [Equity share final call A/c Dr 32,00,000 To Equity share capital A/c 32,00,00 Being amount due on alloted 8,00,000 shares for final call) 9. [Bank Ave Dr 31,98,000 Call-in-arrears A/c . Dr. 2,000 To Equity share final call A/c | 32,00,00 (Being amount received except on 500.shares held by Hema) 10. [Equity share capital A/c Dr. 5,000 To Share forfeiture A/c 3.00 To Equity share final call A/c 2,001 (Being forfeited 500 shares of Henia being non-payment of £ final call amount) ni. [Bank Are Dr 2,000 Share forfeiture A/c Dr 3,000 To Equity share capital A/c 5.000 (Being reissued share of Hema by allowing maximum discount) Total 6,40,61,000 | 6,40,61,000 Calculation of amount for different instalments : : t (Q) At the time of Application : 575,000. %3. - 17,2500 + Additional amount at the time of application - Bank A/e (Viral) = Application rejected (2) At the time of Allotment : + Additional amount at the time of allotment (yagnesh) 2,000 x %7. 75,000 x % 3 5,00,000 x 4 2,500 x & 3 1 17,39,00" 2,25,00" 15,14,000 =20,00,000 7,500 20,07,500 omElements of Accounts 8 — Amount received of allotment at the time of application (Viral) 2j00p xa At the time of First and Final call: 5,00,000 x 73 ~ Amount received in advance at the time of application (Viral) 2,000 x 3 — Amount received in advance at the time of allotment (Yagnesh) 2,500 x 73 Journal entries in the books of Mevada Agro Company 23 8,000 6,000 7,500 Particulars LE | Debie @ Credit &) | Date 2. 3: 6. Bank A/c Dr. 17,39,000 To Equity share application A/c (Being receipt of share application money for 5,75,000 equity shares at % 3 per share and advance payment from Viral at ¢ 7 per share on 2,000 shares.) Equity share application A/c To Equity share capital A/c ‘To Equity share allotement A/c To Call in advanve A/c To Bank A/c (Being transfer of application money to share capital account, received 800 shares‘amount in advance and |_refunded rejected shares’ money) Equity share allotment A/c Dr. 20,00,000 To Equity share capital A/c (Being amount due on alloted shares) Bank A/c (20,00,000 + 7,500 — 8,000) Dr. To Equity share allotment A/c To Calls in advance A/c (Being due amount received on after deducting Viral + % 8,000 allotment plus Yagnesh’s & 7,500 for calls in advance.) Equity share first and final call A/c To Equity share capital A/c (Being first and final call money is due’on ‘alloted shares) Bank A/c (15,00,000 — 13,500) Dr. 14,86,580, ‘Calls in advance A/c Dr. 13,500 ‘To Equity share first and final call A/c (Being due amount received on first and final call in due time) Dr. 17,39,000 19,99,500 Dr. 15,00,000 17,39,000 15,00,000 8,000 6,000 2,25,000 20,00,000 19,92,000 7,500 15,00,000 15,00,000 Total 1,04,85,500 1,04,85,500— Kumar's 7 Star Tost Pap, 28 : Section =:Fi 5 Eler a7. Revised Trading Account of partnership firm of Saif and Kareena Dr for the year ending on 31-3-2023 Pc Particulars ‘Amt. @ Particulars Amt, ‘To Unrecorded purchase 8,000 By Balance b/d G1 any, - Goods withdrawn (Saif) 4,000 4,000 To Profit and Loss A/c 57,000 (Revised gross profit) — ps [_61,000 ShiA0 Profit and Loss Account of partnership firm of Saif and Kareena Dr. for the year ending on 31-3-2023 Cr Particulars ‘Amt. @) Particulars Amt. (7 ‘Administrative expenses = By Trading Ave 57.40 To Salary 37,000 | (Gross profit) To Insurance premium 2,000 By Discount reserve on debtors 7 = Prepaid Insurance Prem. _400 1,600 | By Current account (divisible loss) To Stationery and Printing 1,200 Saif 3,270 To Travelling expense 800 Kareena 3270 | 654 Selling-Distribution expense : ‘To Advertisement expense 1,200 Financial expense : To Interest on Kareena’s loan 1,800 Other expenses and losses : To Bad debts (TB.) 400 + BD. (A) 800 + BDR (A) | 1.800 3,000 - BDR (TB) 2,000 1,000 To Depreciation : Plant-Machinery 8,000 Furniture 500 8,500 To Written off lease hold machinery 12,000 65,100 65,100 Dr Partners’ Current Accounts Cr Saif] Kareena 5 Saif ]Kareena Date Particulars Date Particul > ® ® Ronee @® | & 1-4-22 |To Balance b/d = | 10,000 | 1-4-22 By Balance b/d 40,000] = - | To Drawing A/c 31-3-23 | By Balance c/d = | asaz0 (Goods) 4,000} = 31-3-23|To Profit andLossale | 3,270| 3,270 (Divisible Loss) '31-3-23 |To Balance c/d 32,730] 40,000 [13,270 40,000] 13,270 ae =Elements of Accounts ao Balance sheet of partnership firm of Saif and Kareena as on 31-3-2028 Capital - Liabilities Amt. @ ‘Assets - Receivables Amis Capital Accounts ¢ Non-current Assets : ©) | Saif 1,60,000 Fixed Assets : Kareena 120,000 | 2,80,000) Land-Building 120,000 Current Account : Plant-Machinery 40,000 Saif 32,730| _ - Depreciation — 8,000 | 32,000 Non-current Liabilities : Furniture 10,000 Loan of Kareena 60,000]. - Depreciation 500 9,500 Current Liabilities : Leaschold machinery 60,000 Creditors 24,000 = written off 12,000 | 48,000 ‘+ Unree. purchase 8,000 32,000 | Investments + O/s interest on loan of Kareena 1,800 | Fixed deposits of SBI 80,000 Current Assets : Closing Stock 54,600 Debtors 36,800 “= B.D. (A) —800 \ 36,000 - B.D.R. (A) 1.800 34,200 Cash balance y 560 Current account with bank 14,000 Prepaid insurance premium 400 Current A/c - Kareena 13,270 4,06,530 4,06,530 Note : (1) Here, partners transactions with the firm like interest on capital, interest on drawing, Profit and loss appropriation A/c is not prepared here. (2) Discount reserve on debtors is not required (Adj, 5) . It is shown on credit side Of profit and loss A/c: (8) Here, profit and loss ratio is not given. . divisible loss is distributed interest on current account, salary etc. are not given. equally among partners. (4), Period for leasehold machinery is for 5 years 60,000 «. Current year's written off amount = = % 12,000. 48. Statement of Profit and Loss of Parth Limited for the year ending on 31-3-2023 Particulars Note | Amount | Amount ? No. @ @ “Assets = I. Revenue from operation - Sales 11,25,000 I Other income * 30,000 IIL. Total Revenue (I+ II) 11,55,000, Iv. Expenses : Cost of goods sold 6,00,000 Employees benefit expenses 1,95,000 Financial cost 26,250 Depreciation 33,750 Other expenses - Total Expenses 8,55,000 V. Profit before tax (III - IV) 3, 00,000 VI. Provision for tax — Vil. Total Profit (Transferred to balance sheet) 3,00,000 "nn EZ Kumar's 7 Star Test Pape, Elen Balance sheet of Parth Limited as on 31-3-2023 nt ini Note : Particulars Ne. @ ® T. Equity and Liabilities ¢ (@) Shareholders’ Funds : (a) Share Capital (Equity share capital) (b) Reserve and surplus 11,10,009, (Profit + Secuitities premium) (2) Non-Current Liabilities : 525,000 Long-term borrowings - loan Tin (8) Current Liabilities : 80,00, 7 (b) Trade Payables uh Ins (@) Short-term provisions i ET) Tl. Assets : Q)_ Non-Current Assets : . . (a) Fixeds asset - Tangible : 12,00,000 70,000 () Non-current Investments |_~ 2,10,000 } 14,10. (2) Current Assets : e (b) Inventories 1,65,000 (©) Trade receivables 60,000 ; (@ Cash and cash equivalent : 5 (Cash and bank balance) 90,000 | __3,15,000 ‘Toul 17,25,000_ 5 2 ooo 3.