Section A

Question 1 :
In sub parts (i) to (iv) choose the correct answer and in sub parts (v) to x) answer the question as
instructed.
(i) Identify the incorrect option, which is not followed at the time of dissolution of a
partnership firm.
a) The assets and outside liabilities are closed and transferred to the realization Account.
b) The loan taken from a partner is transferred to his capital account .
c) The general reserve is credited to partner’s capital account.
d) If no amount is mentioned about realization of intangible assets. It is assumed to have
not realized any amount.
(ii) Momin draws Rs. 10,000 per month on the last day of every month for his personal use
. if Interest is to be charged @ 5 % per annum. Interest chargeable from him in the
accounting year will be
a) Rs. 3,250
b) Rs. 3,500
c) Rs. 3,000
d) Rs. 2,750
(iii) A and B are partners in a firm sharing profits and losses in the ratio of 2 : 3 They admit
c as a partner for 1/4th share, the sacrificing ratio of A and B will be
a) 2 : 3
b) 1 : 1
c) 3 : 2
d) 2 : 1
(iv) Assertion : Interest on calls in advance account is closed by debting it to statement of P
&L
Reason : Interest on calls in advance is an income for the company, hence it is debiting to
statement of P & L
a) Both Assertion and Reason are true and reason is the correct explanation of Assertion.
b) Both Assertion and Reason are true but reason is not the correct explanation of Assertion.
c) Assertion is true and Reason is false.
d) Assertion is false and Reason is true.
(v) Which of the following statements about goodwill is correct
P purchased goodwill arises on the purchase I.e . amount is paid for as
consideration.
Q self generated goodwill is shown in the Balance sheet
R At the time of admission of the partners the incoming partner brings in his share of self
generated goodwill of the firm
S purchased goodwill is to be amortised
Choose the correct answer
a) Q,R,S
b) P,Q,S
c) P,R,S
d) R,S,Q

(vi) Read the following article and answer the question given below kochi- based NBFC
Indel money to raise up to Rs. 200 crore through NCDs ( Non Convertible Debentures)
Kochi- based gold loan NBFC Indel money plans to raise up to Rs. 200 crore through non-
convertible at a coupon rate of 12. 25%

How much DRR and DRI would the company have to create at the time of redemption of
these debentures if the redemption is in Lump sum?

(vii) Green Ltd. Issued 8,000 12 % Debentures of Rs. 100 each at a premium of 5 % Trun had
underwritten the subscription and received Rs. 68 in cash and 178, 12 % Debentures Of
Rs. 100 each at a discount of 6 % as underwriting commission.
What was the rate of percentage of Underwriting commission of Trun?
(viii) The formula for the calculation of goodwill according to the capitalization of the super
profit Method.
(ix) Give the journal entry when remaining partners decide to pay off the retiring partner
privately
(x) What is the minimum price at which a company can reissue its forfeited shares which
were originally issued at par?
(xi)
Question 2
A,M and T are partners in a firm sharing profits and losses in the ratio of 2 : 1 : 2. M retires
from the firm on 31st March 2023. The extract of the balance sheet of the firm showed the
following balances
Balance sheet ( Extract ) of A, M and T
As at 31st March 2023
Liabilities Amt Assets Amt
Capitals Cash at Bank 5,000
A 40,000 Investment
M 30,000 ( market value Rs. 22,000) 15000
T 30,000 1,00,000
Investments 20,000
fluctuation Reserve
Employee Provident 25,000 Plant and Machinery 26,000
Fund
Workmen’s 5,000 Deferred Advertisement 4,000
Compensation Expenditure
Reserve
Additional information :
1) The partners decide to maintain the reserves after adjustment of the difference between the book
value and market value of the investment and adjustment of workmen’s compensation claim , They
will also carry forward the deferred Avertisement expenditure to the new Balance sheet.
2) The Workmen’s compensation claim was determined at Rs. 7,000
3) M was paid 40,000 in full settlement by taking sufficient loan from the bank , such that they are also
able to maintain the bank balance of 15,000
You required to :
1) Pass the adjustment entry for maintaining the reserves and.
2) Calculate the goodwill of the firm.
3) Pass journal entry for treatment of goodwill
Or
Ashi, Manoj and Manaya were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2.
Manoj died and on his death the goodwill of th firm is valued at Rs.7,50,000 Following entry is passed
for Manoj’s share of goodwill.
Particulars L.F Dr. Cr.
Ashi’s capital A/c 90,000
Dr.
Manya’s capital A/c 60,000
Dr.
To Manoj’s capital A/c 1,50,000
(being the share of goodwill of deceased
partner Credited)
The adjusted capital of Ashi, Manoj and Manaya before the above goodwill adjustment was Rs.
5,00,000 , 2,50,000 and 1,50,000 .
The partners decided to pay off the retiring partner’s executor in cash by the amount brought in by
the remaining partners in such a way that their capitals are proportionate to the new profit sharing
ratio and leave a balance of 20,000 in the bank account the bank balance of the firm given in the
balance sheet was Rs. 60,000
You are required to :
1) Calculate the New profit sharing ratio.
2) Calculate the amount to be paid or to be brought in by the continuing partners and pass
necessary journal entries for it.
Question 3:
Y Ltd. Took Over the assets and liabilities of B Ltd.
Journal of y Ltd.

Date particulars I/f Dr Cr

Sundry Assets A/c Dr 8,40,000
To Sundry Liabilities ?
To ……………………………………. ?
To…………………………………….. ?
 (Being assets of Rs. 8,40,000 and liabilities of Rs. 80,000 of B
Ltd taken over by y Ltd. For a purchase consideration of Rs.
7,20,000)

B Ltd. A/c Dr 7,20,000

…………….. Dr -----------
To 10 % Debentures A/c 8,00,000
To premium on Redemption of Debentures A/c -----------
(Being issue of debentures of Rs. 100 each at a discount of
10% to be redeemable at a premium of 5%)

Capital Reserve A/c Dr 40,000

Statement of P & L Dr ---------
To Loss on issue of debentures 1,20,000
(being loss on issue of debentures written off )
You are required to :
Fill in the missing information and rewrite the journal entries.
Or
ABC Ltd required Rs. 39,00,000 for expansion.
The company planned to get the required amount by issuing some number of debentures of Rs. 100 each at a
premium of 30% The debentures were to be redeemed at a premium of 20 %.
You are required to :
1. Calculate the number of debentures to be issued by the company.
2. Prepare the loss on issue of debentures A/c
Question 4 :
Pink Ltd.( a Listed NBFC ) has 20,000,8 % Debentures of Rs.100 each due for redemption at premium of 5 %
p.a.on 31st march,2024,
The debenture Redemption Investment as required by the law was made in fixed deposit of a bank on 30th
April,2023.
The Debenture Redemption Investment was realized on the date of redemption at 98% and the debentures
were redeemed.
You are required to pass journal entries for redemption of debentures for the year 23-24 ( Interest was paid
on debentures on the date of redemption)
Question 5:
Following information is given for partnership firm of vijay and Arun .
Average capital Employed – Rs. 10,00,000
Average profit of the firm – Rs 1,70,000
Normal Rate of Return (NRR)-11% p.a.
Remuneration to each partner to be treated as a charge on profit – Rs. 2,500 p.m.
Assets ( Excluding goodwill) – Rs. 10,50,000 and out side liabilities – Rs. 1,25,000
You are required to calculate
1> Value of firm goodwill on the basis of capitalization of average profit method
2> Mention any one point of difference between average capital employed and net assets
Question 6:
Following is the information giver by Kulsum Ltd. As at 31st March 2024

Particulars Rs.
12 % bank loan ( loan taken on 1/4/23) 15,00,000
10% debentures (Rs 100 each ) 7,50,000
Equity shares (Rs. 10 each ) 20,00,000
Unclaimed dividend 50,000
Debenture Redemption Investment 37,500
Cash and bank balances 12,50,000
Goodwill 80,000
Fixed deposits accepted 4,50,000
Securities premium 20,000
Surplus in statement of p & l 6,20,000
Underwriting commission 25,000
Marketable securities 30,000
Plant and machinery 40,47,500
Additional information:
1. The debentures of Rs 10,00,000 were issued on 1st October 2018 and are Redeemable at par in 4 equal
yearly installments the first lot was redeemed on 1st October 2023
2. The company had not paid the interest on bank loan till the balance sheet date
3. Proposed Dividend for the year ending 31/3/2024 was @ 18% p. a On the face value of the equity
shares.
You are required to:
1. Show the relevant notes to accounts for Reserves and surplus and long term Borrowings
2. Shoe the Assets side of the Balance sheet
Question 7 :
Vina and Tina are partners in a firm sharing profits and losses in the ratio of 4:3 they admit Bina for 1/3 share
in the profits of the firm
On the date of Bina’s admission.
a) The capitals of Vina and Tina were Rs. 80,000 and Rs. 60,000 respectively
b) Deferred advertisement expenditure was Rs. 14,000
c) The balance sheet showed creditors of Rs. 30,000. The creditors were settled by paying Rs. 23,000 in
full settlement
d) Goodwill of the firm is valued at 84,000
e) vina brings in cash Rs. 84,000 in total for her capital and the share of goodwill.
You are required to :
1. Prepare partner’s capital A/c
2. Prepare cash A/c and calculate the opening balance If the closing balance is Rs. 91,000.
Question 8:
Kamar and Prem had the following Balance sheet as at 31st March 2024

Liabilities Amt Assets Amt

Capital Plant and Machinery 1,00,000
Kamar 75,000 Loan to prem 8,000
Prem 50,000 1,25,000 Prem’s current A/c 15,000
Kamar’s current A/c 20,000 Prepaid expenses 4,000
Workmen’s 12,000 Cash at bank 60,000
compensation Reserve
Creditors 45,000 Deferred advt 25,000
Expenditure
Mrs prem’ s loan 10,000
2,12,000 2,12,000
Additional information:
1. The creditors took plant machinery of Rs. 50,000 in full settelment of their claim.
2. Prem agreed to pay off wife’s Loan
3. Workmen’s compensation claim was Rs. 15,000
4. Prem also agreed to carry out the dissolution for a remuneration . so as to set off his current A/ c
balance . He also agreed to bear the dissolution expenses . The dissolution expenses paid by the firm
was Rs. 6,000
You are required to prepare:
1. Realisation Account
2. Part6ner’s capital Account
Question 9:
(i) On 31st March 2024 the balances in the capital accounts of Hanuman and Burman were 7,00,000
and 6,00,000 respectively
a) Drawings of Hanuman and Burman for the year were Rs. 1,50,000 and Rs 1,00,000
Respectively
b) Burman introduced capital of Rs. 2,00,000 on1st October 2023
c) Interest on drawings were Rs. 15,000 and Rs. 10,000 respectively
d) Share of profit for each partners was 1,50,000
e) In april,2024the partners realized that interest on capital @ 10% per annum wasn’t allowed
to the partners.
You are required to rectify the lapse in accounting by passing journal Entries
(ii) Bimal and Sanjay are partners sharing profits and losses in the ratio of 3: 2. Bimal contributed a
capital of 5,00,000 and Sanjay contributed capital of 15,00,000 . Sanjay also contributed
Rs.2,00,000 as loan.
The partnership deed provides for interest on capital @ 8 % p.a salary to Bimal @ Rs. 12,000 per
month commission of 56,000 per year to Bimal .
Net profit for the year ended 31st March ,2024 was Rs 90,000 before providing for the
appropriation.
Pass the journal entries in the books of the firm.
Or
Bhim and Nakul were doing business as proprietors, and started a partnership on 1st April , 2023.
Bhim brought in machinery valued at Rs. 5,50,000 where as Nakul brought in cash Rs. 8,00,000
Mid-Year on 30-09-2023, Nakul invested 1,00,000 as loan, but claimed interest @20 % p.a. (agreed upon
because the firm needed working capital )
(i) Interest on capital allowed @ 10% p. a. and interest on drawings @ 10 % p.a. to be charged only
on the monthly uniform drawings of each partner.
(ii) Loan capital, if introduced , bears interest.
(iii) Bhim was entitled to a commission of 2% on the gross profit of the firm ( Gross profit was equal to
5 times the year’s Net profit in the first year)
(iv) The maximum permissible amount of monthly drawings is Rs. 5,000 each while Nakul withdrew
this amount , Bhim drew only 3,000 per month.
(v) The firm’s manager was to be allowed a fixed salary of Rs. 4,000 per month and commission of
10% on the net profit after charging his commission
(vi) Net profit before any of the above adjustment was Rs. 4,10,000 for the year 2023-24
You are required to :
Prepare profit and loss appropriation A/c
Partner’s capital A/c
Nakul’s loan a/c
Question 10:
Armaan Ltd. Invited applications for 20,000 shares of Rs 100 each , issued at 20 % premium.
Share was payable as follows
On- application – Rs.50
On allotment –Rs.40( including premium)
On 1st and final call – balance
Applications were received for 32,000 shares out of which applications for 2,000 shares were refused
allotment and remaining were allotted on pro rata basis Sanjay an applicant of 1,500 shares failed to pay
the allotment money and call money.
His shares were forfeited and out of these 600 shares were reissued at a discount of Rs. 20 per share
Pass the necessary journal entries
Or
Pinki ltd. Invited applications for 10,000 equity shares of Rs. 10 each at a premium of Rs. 4 per share the
amount was payable as follows.
On Application Rs. 6 ( including premium Rs. 2 )
On Allotment Rs. 6 ( including premium Rs. 2 )
Balance on first and final call
Applications for 18,000 shares were received . Allotment was made to all the applicants on pro- rata basis
Akash , to whom 360 shares were allotted to pay allotment and call money.
Bhusan , to whom 400 shares were allotted failed to pay the call money.
Their shares were forfeited and afterwards 350 shares were re-issued
(including all shares of Akash) @ Rs. 8 per share fully paid up.
You are required to pass journal Entries in the books of pink Ltd
Section-B
Question 11.
In sub parts (i) and (ii) choose the correct option and in sub parts (iii) to (v) answer the questions as
instructed.
(i) Which of the following come under cash and cash equivalent

P Marketable Securities Sold

Q Cash credit taken
R cash deposited into bank
S purchase of inventory on credit
a) P&Q
b) Q&R
c) P&R
d) R&S
 (ii) Mention Whether interim dividend paid to equity shareholders would result in
a) Inflow of cash
b) Outflow of cash
c) No flow of cash
(iii) A company has quick ratio of 1.8:1 . Mention whether this ratio will improve / reduce/ not change
after it sells a machine worth Rs. 1, 20,000 at a loss of Rs. 30,000
(iv) State if the creditors would prefer lending to a company with a high debt to equity ratio or low
debt to equity ratio . Give a reason
(v) An Extract of the balance sheet of Newton Ltd. Shows:

31.03.2024 31.03.2023
Share capital ( Equity shares @ Rs. 10 each) 8,00,000 5,00,000
Securities premium 70,000 1,70,000
In the year 2023-24 the company raised its share capital by issuing Bonus shares to the
shareholders at the beginning of the year in the ratio of 1:5 (one bonus share was issued for every
5 equity shares) the Balance shares were issued for cash to the public.
How many shares were issued for cash by the company?
Question 12 :
Find out cash flow from investing activity and Financing activity
Particulars 31.03.2023 Rs. 31.03.2022 Rs.
Equity share capital 10,00,000 8,00,000
8% pref, share capital 1,50,000 2,00,000
10% Debentures 4,00,000 3,00,000
Securities premium 10,000 -
Plant & Machinery 10,30,000 8,50,000
Accumulated Depreciation on Plant & Machinery 2,68,000 2,20,000
Additional information:
(i) New shares and debentures were issued on March 31, 2023 The shares were issued at a premium
and debentures at a discount.
(ii) Under writing commission on issue of shares was Rs. 5,000 and discount on issue of debentures
Rs. 5,000 the underwriting commission and discount was written off form securities premium
(iii) Proposed Dividend on Equity share capital was
For 31st March , 2022 @ 15 %
For 31st March , 2023, @ 20%
(iv) Preference shares were redeemed on March 31, 2023, Dividend on preference shares was paid at
the time of redemption.
Question 13:
From the following information taken from income statement of Grey Ltd. For The year ended 31 st
March 2023 and 2024 prepare a comparative statement of profit and loss
Particulars 31st March 2024 31st March 2023
Revenue from operation 14,00,000 11,00,000
Other income 4,00,000 3,00,000
Expenses 11,00,000 12,00,000

Rate of income tax was 50 %

Question : 14
Answer any 3 questions
(i) A little extra is a start – up that manufactures Artificial jewellery look at the following
image and answer the question given below

Assuming that the Revenue from operation (sales ) is Rs. 5,00,000 and the inventory turn
over ratio is 8 times.
Calculate the Average Inventory of the company
(ii) Calculate the trade receivable turnover ratio from the following information Opening
trade receivable Rs. 75,000, cash received from debtors Rs. 5,25,000, closing trade
receivable Rs. 1,12,5000, sales Return Rs. 37,500
(iii) The Revenue from Operation of Marico Marginally reduced to Rs. 2,476 crores from Rs.
2,496 crores
Which Activity Ratio of the company will get affected by this ( assuming Revenue from
Operation is all in cash ) ?
(iv) Net profit after interest but before tax Rs. 1,40,000, 15 % long term debts Rs. 4,00,000 ,
shareholders funds Rs. 2,40,000 Tax rate 50% calculate return on Investment