Q1.

A & B are partners sharing pretits in the ratio 3:2 with capital of ₹ 5,00,000 &
3,00,000 resp. Interest on capitl is a greed @ 6% p.a. Bis to be allowed an annual
salary of ₹ 60,000, during the year 2013-14, the profit prior to the calculation of
interest on capitla but after charging B’s salary amounted to ₹ 1,80,000 A provision of
5% of the profit is to be mad ein respect of commission to the manager.
prepare P & L app. a/c showing the distribtin of profit the partners capital account for
the year snding March, 31, 2014
Q2. A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2 with
capitals of ₹ 5,00,000 and ₹ 2,50,000 respectively on 1st April, 2013. Each partner is
entitled to 10% p.a. interest on his capital A is entitled to a commission of 10% on net
profit remans after deducting interest on capitals but before charging any commission
B is entitled to a commission of 8% of net profit remaing after deducting interest on
capitals and after charging all commission. The profits for the year ended 31 st March,
2014 prior to calculation of interest on capital was ₹ 3,75,000 prepare profit and Loss
Appropriation Account.
Q3. From the following Balance sheet of long andshort calcolate interest on capital @8%
p.a. for the year ended 31st March 2012.
balance Sheet as at 31st March 2012
Labilities ₹ Assets ₹
long capital A/c 1,60,00 fixed assets 3,00,00
Short Capital Account 0 Drawing 0
Profit loss app a/c (2011-12) 1,40,00 long 40,000
0 other assets 60,000
1,00,00
0
4,00,00 4,00,00
0 0
During the year, long’s drawing were ₹ 40,000 and short drawing were ₹ 50,000
profit for the year was ₹ 1,50,000
Q4. A, B and C were partners with capitals ₹ 60,000 ₹ 60,000 and ₹ 30,000 resp. Their
current account balance were A ₹ 10,000, B ₹ 5,000 and C ₹ 2000 cds according to
partnership deed 10% of the profit is to be transferred to general reserve and partners
were entitie to interest on capital @ 5% p.a. c being the working partner was also
entitled to salary of ₹ 12,000 p.a. the profits were to be divided as follows.
(a) the first ₹ 20,000 in proportion to their capitals
(b) Next ₹ 30,000 in the ratio of 5:3:2
(c) Remaining profits to be shared equally.
The firm made profit of ₹ 1,80,000 for the year ended 31st march 2014 before
charging any of the above items. prepare profit and loss appropriation a/c and pass
entries.
Q5. X and Y are partners with a profit sharing ratio of 1:2 with capitals of ₹ 4,00,000 and
₹ 6,00,000 resectively. On 1st October, 2004 X and Y granted loans of ₹ 1,00,000 and
₹ 60,000 respectively to the firm. Distribute the profit/losses amongst in partners for
the year ended 31st March, 2005 in credit of the following cases.
Case(a) If the profit before interest for the year amounted to ₹ 12,000
Case (b) If the profit before interest for the year amounted to ₹ 3,000
Case (c) If the loss before interest for the year amounted to ₹ 7,500.
Q6. Calculate the interest on drawings of Mr. Arun @ 10% p.a. for the year ended 31st
march, 2007 in each of the following alternative cases:
 Case (a) If he withdrew ₹ 5,000 p.m. at the end of every month;
Case (b) If he withdrew as follows:
1st June, 2006 20,000
st
31 August, 2006 10,000
31st Oct, 2006 18,000
st
1 Feb, 2007 12,000
Case (c) if he withdrew ₹ 15,000 in the beginning of each quarter;
Q7. P, A and R are the partner in a firm. Find that drawings Q frew ₹ 6,000 at the end of
year month for 6 month ending 30th September 2006.
Q8. A, B and C starting business on 1st July 2006 find that B Drew ₹ 8,000 at the end of
every month for 9 month ending 31st March, 2007
Q9. A and B contribute ₹ 4,00,000 and ₹ 3,00,000 respectively as their capital. they
decide to allow interest on capital @8% p.a. Their respective share of profit 3 : 2 and
the profit for the year is ₹ 42,000 before allowing for interest on capital Show the
distribution of profits (I) Where there is no agreement except for interest capitals, and
(II) Where there is a clear agreement that the interest on capitals will be allowed even
if it involves the firm in loss.
Q10. A, B and C are partners sharing profits and losses in the ratio of 5 : 3 : 1. After the
final accounts have been prepared, it was discovered that interest on drawings had not
been taken into consideration. The interest on drawing of partners amounted to A ₹
800, B ₹ 600 and C ₹ 400. give the necessary adjusting journal entry.
Q11. Anil, Sunil and Sanjay have omitted interest on Capitals for two years ended on 31 st
March, 2014. their fixed capitals in two years were Anil ₹ 80,000, Sunil ₹ 70,000 and
Sanjay ₹ 30,000. rate of interest on Capital is 10% p.a. Their profit Sharing ratios
were in first year 4 : 3 : 2 and in second year 3 : 2 : 1.
Give necessary adjusting entry at the beginning of next year.
Q12. A, B and C were partners in a firm. On 1-4-2010 their capitals stood at ₹ 50,000, ₹
25,000 and ₹ 25,000 respectively. As per the provisions of the partnerhip deed:
(a) C was entitled for a salary of ₹ 1,000 p.m.
(b) Partners were entitled to interest on capial at 5% p.a.
(c) Profits were to be shared in the ratios of capials.
The net profit for the year ended 31-3-2011 of ₹ 33,000 was divided equally without
providing for the above terms.
Pass an adjustment entry to rectify the above error.
Q13. X, Y and Z are partners in a firm sharing profits and losses in the ratio 5 : 3 : 2. Their
capitals (fixed) are ₹ 2,00,000; ₹ 1,50,000; ₹ 1,25,000 respectively. for the year
ended 31st March, 2014 interest on capital was credited to them @ 8% instead of 10%.
\
Give adjusting journal entry.
Q14. The partners of a firm distributed the profits for the year ended 31 st March, 2003, ₹
1,50,000 in the ratio of 2 : 2 : 1 without providing for the following adjustments.
(a) A and B were entitled to a salary of ₹ 1,500 per quarter.
(b) C was entitled to a commission of ₹ 18,000.
(c) A and C had guaranteed a minimum profit of ₹ 50,000 p.a. to B.
(d) Profits were to be shared in the ratio of 3 : 3 : 2.
Pass necessary journal entry for the above adjustments in the books of the firm.
Q15. Ram and Mohan are partners sharing profits and losses in the ratio of 2 : 1. At the end
of third year, i.e., on 31st March, 2011, they decided to take their manager Mr. Sohan
into partnership with effect from 1 st April, 2008. As manager, Sohan was getting
 annual salary of ₹ 24,000. He had also advanced ₹ 30,000 to the firm by way of a
loan on which he was getting interest @ 15% per annum.
During the three years firm’s profits after adjusting salary to Sohan, interest on loan
and interest on the capital of the partners were:
200 Profi ₹ 43,900
9 t
201 Loss ₹ 20,000
0
2011 Profi ₹
t 1,00,000
According to the new agreement, Sohan is to be given annual salary of ₹ 16,800 and
1/5th share in the profits of the firm. Sohan’s loan shall be treated as his Capital from
the beginning and similar to other partners as his capital will carry interest @ 10% per
annum.
Record the journal entry to give effect to the above
Q16. A, B and C are partners in a firm. their profit sharing ratio is 3 : 2 : 1. However, C is
guaranteed a minimum amount of ₹ 10,000 as share of profits every year. Any
deficiency arising on that account shall be met by A. the profits for the two years
ending 31st March, 2010 and 2011 were ₹ 30,000 and ₹ 90,000 respectively. Prepare
Profit and Loss Appropriation Account for the two years.
Q17. A, B and C are partners having capital of ₹ 10,00,000, ₹ 8,00,000 and ₹ 6,00,000 in a
firm and shaving profit Y& loss equally. C is guaranteed a minimum profit of ₹
1,00,000 as a share of profit every year. The firm incurred a loss of ₹ 3,00,000 for the
year ended 31st March 2015.
You are required to show the necessary accounts for division of loss and giving effect
to minimum granted profit to C
Q18. A and B are partners in a firm A is to get a commission of 10% of net profit before
charging any commission. B is to get a commission of 10% on net profit after
charging all commission. Net profit before charging any commission was ₹ 55,000.
find out the commission of A and B.
Q19. Tulsi and Kabir are partners sharing profits in proportion of 3 : 2 with capitals of ₹
8,00,000 and ₹ 6,00,000 respectively. Interest on capitals is agreed at 6% p.a. tulsi is
to be allowed a salary of ₹ 6,000 per month. For the year ended 31 st March, 2014, the
profits prior to calculation of interest on capital but after charging Tulsi’s salary
amounted to ₹ 2,28,000. Manager is to be allowed a commission of 10% of the
profits.
Prepare an account showing the allocation of profits.
Q20. X and Y are in partnership sharing profits and losses in the ratio of 2 : 1. they decided
to admit Z, their manager, as a partner giving him 1/5th share of profit.
Z, while a manager, was receiving a salary of ₹ 25,000 per annum plus a commission
of 10% of the net profit after charging such salary and commission.
It was also agreed that any excess amount which Z receives as a partner (over his
salary and commission) will be borne by X. Profit for the year amounted to ₹
3,22,000. before payment of salary and commission. Prepare a Profit & Loss
Appropriation Account.
Q21. Fill in the missing figures in the following Accounts.
Profit and Loss Account
for the year ended 31st March, 2014
Particulars ₹ Particulars ₹
 To Mgr Commission 10%. 6,00 By Profit for the ……
of ₹ …………….. 0 year .
To net profit T/F to P&L
app a/c
…… ….
Profit and Loss appropriation account
for the year ended 31st March, 2014
Particulars ₹ paritculars ₹
To interest on Capital @ 8% p.a. By Profit & Loss
X A/c
Y
To salary to Y
To profits transferred to Capial
Accounts X 3/5
Y 2/5 10,000

Partner’s capital accounts

Particulars X Y Particulars X Y
To Bal c/d By Bal b/d
By ins on cap
By Salary
By a/c

Q22. A and b are partners sharing profits in the ratio of 3 : 2 Interest on Capital is allowed
at 10% p.a. and charged on drawings at the same rate. Fill up the missing figures in
the following accounts.
Dr. Profit and loss appropriation account Cr.
for the year ended 31st March, 2015
Particulars ₹ Particulars ₹
To Salary to B By profit & Loss A/c (Net Profit)
To By interest on Drawings
To profit transferred to 1,20,00 A 2,500
0 B 1,500
2,84,00
0

Dr. partner’s Capital Accounts Cr.

Particular A B Particulars A B
s
To … … By 16,00 22,00
To … … By Balance b/d 0 0
To … .. By int on ..... ……
To … … capital 80,00 60,00
By 0 0
…… …..

Chapter 2
Q1. Meena purchased simmi’s business from 1st April, 2015. The Profits disclosed by
Simmi’s Business for the last three years were as follows:
Year ending 31st March 2013 - ₹ 40,000 (Including an Abnormal gain of ₹ 5,000)
Year ending 31st March, 2014 - ₹ 50,000 (After charging an Abnormal Loss of
₹ 10,000)
Year ending 31st March, 2015 - ₹ 45,000 (Excluding ₹ 5,000 as annual Insurance
Premium of firm’s Pro-perty now Insured)
Calculate the Value of firm’s goodwill on the basis of 2 years Purchase of the average
Profit for the last three years.
Q2. A and B are partners sharing profits and losses in the ratio of 3 : 2. they agree to take
C into partnership for 1/3rd share. for this purpose, goodwill is to be valued at two
year’s purchases of the average profit of last four years which were as follows:
year ending on 31st March, 2008 50,000 (Profit)
Year ending on 31st March, 2009 1,20,000 (Profit)
st
Year ending 31 March, 2010 1,80,000 (Profit)
Year ending on 31st March, 2011 70,000 (Loss)
On 1 April, 2010 a Motor bike costing ₹ 50,000 was purchased and
st

debited to travelling expenses account, on which depreciation is to be charged @

20% p.a. calculate the value of goodwill.
Q3. On April, 1, 2015 an existing form had assets of ₹ 75,000 including cash of ₹
5,000. the partner’s capital accounts showed a balance of ₹ 60,000 and reserve
constituted the rest. If the normal rate of return is 10% and the goodwill of the
firm is valued at ₹ 24,000 at 4 year’s purchase of super profits, find the average
profits of the firm.
Q4. The following information relates to a partnership firm.
(a) Profit for the last five years:
1996 ₹ 80,000 1999 ₹ 1,50,000
1997 ₹ 1,00,000 2000 ₹ 2,70,000
1998 ₹ 2,00,000
(b) Average capital employed is ₹ 5,00,000
(c) Rate of normal profit 20%.
Find out value of goodwill on basis of
(i) three year’s purchase of average profit.
(ii) Three year’s purchase of sore profit
(iii) Capitalisation of soure profit.
Q5. A and B are partners sharing profits and losses in the ratio of 2 : 1. From April 1,
2008, they decided to share the profits in the ratio of 3 : 2. On that date, profit
and loss account showed a debit balance of ₹ 60,000. Record the necessary
journal entry for the distribution of the balance in the Profit and loss Account.
Q6. P, Q and R sharing profits and losses in the ratio of 3 : 2 : 1, decide to share future
profits and losses in the ratio of 4 : 3 : 2 with effect from 1 st April, 2008. Following
is an extract of their balance Sheet as at 31st March, 2008.
Show the accounting treatment under the following alternative cases:
Case (i) If there is no other information.
Case (ii) If a claim on account of workmen’s compensation is estimated at ₹
24,000.
Q7. P, Q and R sharing profits and losses in the ratio of 3 : 2 : 1, decide to share profits
and losses equally with effect from 1 st April, 2008. following is an extract of their
balance Sheet as at 31st march, 2008.
 Liabilities ₹ Assets ₹
Investment Fluctuation Resere 30,00 Investments (at Cost) 30,00,00
0 0
Show the accounting treatment under the following alternative cases:
Case (i) If there is no other information.
Case (ii) If the market value of Investments is ₹ 5,00,000.
Case (iii) If the market value of Investments is ₹ 4,88,000.
Q8. A, B and C are partners sharing profits and losses in the ratio of 2 : 3 : 4. They
decided to share future profits and losses in the ratio of 4 : 3 : 2. they also decided
to record the effect of the following without affecting their book values.
General Rserve ₹ 40,000
Profit & Loss A/c ₹ 20,000
Advertisement Suspense A/c ₹ 15,000
You are required to give the necessary single journal entry.
Q9. A, B and C are partners sharing profits and losses in the ratio of 3 : 3 : 2 Their
balance sheet as at 31st March, 2003 was as follows:
Liabilities ₹ Assets ₹
Sundry Creditors 28,000 Cash at bank 37,000
Centrel Reserve 36,000 Sundry 41,000
Capital units Debtors 1,20,00
A 2,00,00 Stock 0
B 0 Machinery 1,59,00
C 1,50,00 5,00,00 Building 0
0 0 2,00,00
1,50,00 0
0
5,60,00 5,60,00
0 0
Partners decided that with effect from 1 April, 2003, they would profits and
st

losses in the ratio of 4 : 3 : 2. It was agreed that:

(i) Stock be valued at ₹ 1,10,000
(ii) Machinery is to be depreciated by 10%.
(iii) A provision for doubtful debts is to be made on debtors @ 5%
(iv) Building to be appreciated by 20%.
(v) A liability for ₹ 2,500 included in sundry creditors is not likely to arise.
Partners agreed that the revised values are to be recorded in the books. They do
not, however want to distribute the general reserve. You are required to prepare
journal entries, capital accounts of the partners and the revised balance sheet.
Q10. balance Sheet of X and Y, who share profits and losses as 5 : 3, as at 1 st April, 2015
is
Liabilities ₹ Assets ₹
X’s Capital 52,000 Goodwill 8,000
Y’s Capital 54,000 Machinery 38,000
General Reserve 4,800 Furniture 15,000
Sundry Creditors 5,000 Sundry Debtors 33,000
Employee’s Provident Fund 1,000 Stock 7,000
Workmen Compensation 10,000 bank 25,000
Reserve Advertisement Suspense 800
A/c
 1,26,80 1,26,80
0 0
On the above date, they decided to change their profit-sharing ratio to 3: 5 and
agreed upon
(a) goodwill be valued on the basis of two years purchase of the average profit of
the last three years profits for 2012 -13 - ₹ 7,500; 2013-14 - ₹ 4,000; 2014-15
- ₹ 6,500.
(b) Machinery and Stock be revalued at ₹ 45,000 and ₹ 8,000 respectively.
(c) Claim on account of workmen compensation is ₹ 6,000.
Q11. Balance Sheet of P, Q and R who share profits in the ratio of 2 : 2 : 1 as at 31 st
March, 2015 is
Liabilities ₹ Assets ₹
Creditors 55,000 Land 2,00,00
Bills Payable 17,000 Buildin 0
General Reserve 48,000 g 80,000
Capital A/cs Plant 1,60,00
P 2,40,00 Stock 0
Q 0 Debtors 2,10,00
R 2,00,00 6,00,00 Cash 0
0 0 60,000
1,60,00 10,000
0
7,20,00 7,20,00
0 0
From 1 April, 2015 the partners decided to share the profits equally. for this
st

purpose, the following adjustments were agreed upon:

(a) the goodwill of the firm should be valued at ₹ 60,000.
(b) Land should be valued at ₹ 3,00,000 and Building and Plant should be
depreciated by 5%. Stock valued at ₹ 2,25,000.
(c) Creditors amounted to ₹ 2,000 were not likely to be claimed and hence
should be written off you are required to
(i) record necessary journal entries to give effect to the above agreement,
without opening the Revaluation Account;
(ii) Prepare Capital Accounts of the Partners and
(iii) Prepare Balance Sheet of the firm after reconstitution.

Chapter 3
Q1. X and Y are partners sharing profits in the ratio of 4 : 3. Z joins partnership for
2/7th share in the profits (of which he acquires 3/4 th from X and 1/4th from Y). Z
brings in ₹ 3,00,000 for his capital and ₹ 1,20,000 for goodwill. Half of the
amount of goodwill is withdrawn by the old partners.
Pass necessary journal entries and find out new profit sharing ratio.
Q2. Partners A, B and C share the profit of a business in the ratio of 3 : 2 : 1
respectively. for one sixth share they admit D who brings in ₹ 2,00,000 including
₹ 60,000 for his share of goodwill. Show the journal entries if A, B, C and D decide
to share the profits respectively in the ratio of (a) 15 : 10 : 5 : 6; (b) 5 : 3 : 2 : 2
and (c) 2 : 2 : 1 : 1. Assume that the entire cash brought in by D remains in the
business Give Journal entries.
Q3. X and y are partners sharing profits and losses in the ratio of 3 : 2. They admit Z
into partnership, Z paying a premium of ₹ 1,00,000 for ¼ share of the profits
while X and Y as between themselves sharing profits and losses equally. Give
Journal entries.
Q4. B and C are in partnership sharing profit and losses as 3 : 1. they admit D into the
firm, D paying a premium of ₹ 15,000 for 1/3 rd share of the profits. As between
themselves B & C agree to share the future profit & Losses equally. Defft journal
entries showing appropriation of the premium money.
Q5. X, Y and Z were partners sharing profits and losses as to X one half one third; and
Z one sixth As from 1st April, 2014, they agreed to admit A into partnership for
one – sixth share in profits and losses, which he acquires equally from X and Y ,
and is to bring in ₹ 50,000 for his capital and ₹ 20,000 as premium of goodwill A
paid in his capital money but in respect of premium for goodwill, he could bring
in only ₹ 15,000.
You are required to
(i) Give the Journal entries to carry out the abvoe arrangments, and
(ii) Work out the new profit sharing ratio of the partners.
Q6. X and y are partners in a firm sharing profits and losses in the ratio of 5 : 3
March, 2009, their balance Sheet was as under:
Liabilities ₹ Assets ₹
Creditors 50,000 Bank 29,000
Provident Fund 15,000 Debtors 1,80,000
Workmen’s cump reserve 40,000 Stock 1,25,000
Capitals Premises 1,50,000
X 2,60,000 Advt exp 16,000
Y 1,35,000 3,95,000
5,00,000 5,00,000
On 1 April, 2009, Z is admitted as a partner, X surrenders 1/4 th of his share and
st

1/3 rd of his share in favour of Z. Goodwill is valued at ₹ 1,60,000. Z bring in only

2/5 th of his share of goodwill in cash and ₹ 1,50,000 as his capital. following
terms are agreed upon.
(i) Premises is to be increased to ₹ 2,00,000 and stock by ₹ 5,000.
(ii) Creditors proved at ₹ 60,000, one bill for goods purchased having been
omitted from the books.
(iii) Outstanding rent amounted to ₹ 12,000 and prepaid salaries ₹ 2,000.
(iv) Liability on account of provident fund was only ₹ 10,000.
(v) Liability for Workmen’s Compensation Claim was ₹ 16,000.
Prepare Revaluation A/c, Capital A/cs and the opening balance Sheet. Also
calculate the new profit sharing ratios.
Q7. Asin and Shreya are partners in a firm. They admit Ajay as a new partner with
1/5th share in the profits of the firm. Ajay brings ₹ 5,00,000 as his share of
capital. The value of the total assets of the firm was ₹ 15,00,000 and outside
liabilities were valued at ₹ 5,00,000 on that date. Give the necessary journal
entry to record goodwill at theh time of Ajay’s admission. Also show your
workings.
Q8. Following figures have been extracted from the books of X and y who share profit
and losses in the ratio of 7 : 3.
X’s capital ₹ 3,00,000
Y’s Capital ₹ 1,50,000
 Reserve ₹ 1,60,000
Profit & Loss Account ₹ 40,000
Advertisement Expenditure ₹ 10,000
On this date, they admit Z for 1/5 th share and the new profit sharing ratio
is agreed at 3 : 1 : 1 Z brings in ₹ 3,00,000 as his capital. Pass journal entry for
recording goodwill.
Q9. Rajesh and Ravi are partners sharing profits in the ratio of 3 : 2 Their balance
Sheet stood as under as at 31st march, 2012
balance Sheet
Liabilitie ₹ Assets ₹
s
Creditors 3,85,00 Cash 20,000
dsub 0 Stock 1,50,00
capitals 40,000 Prepaid insurance 0
Rajesh Debtors 94,00 15,000
Ravi 2,90,00 Proviso 0
0 machinery 4,000 90,000
1,50,00 Building 1,90,00
0 Furniture 0
3,50,00
0
50,000

8,65,00 8,65,00
0 0
Raman is admitted as a new partner introducing a capital of ₹ 1,60,000. The new
profit-sharing ratio is decided as 5 : 3 : 2. Raman is unable to bring in any cash for
Goodwill So, it is decided to value the goodwill on the basis of Raman’s share in
the proifts and the capital contributed by him. following revaluations are made
(i) Stock to depreciate 5%
(ii) Provision for doubtful debts is to be ₹ 5,000.
(iii) Furniture to depreciate 10%
(iv) Buildings are valued at ₹ 4,00,000.
Show the necessary Ledger Accounts and the balance Sheet of the new firm.
Q10. Mohan and Sohan are in partnership sharing profits in the proportion of 3/5 and
2/5 respectively.
The balance sheet is as follows:
Liability ₹ Assts ₹
Capital Mohan 2,00,000 Cash 65,000
Sohan 1,00,000 Debtors 1,00,000
Creditors 40,000 Prov 40,000 60,000
Stock 1,50,000
Plant 65,000

They decided to admit Rohan to 1/3rd share on terms that he is to pay into the
business ₹ 1,00,000 as Goodwill and sufficient capital to give him 1/3 rd share of
the total capital of the new firm. It was agreed that Provision for bad debts be
 reduced to ₹ 10,000, that the stock be revalued at ₹ 2,00,000; and that the plant
be reduced to ₹ 50,000.
Prepare necessary ledger accounts and show the balance sheet of the new
partnership.
Q11. Mohan and Mahesh were partners in a firm sharing profits in the ratio of 3 : 2. On
1st April, 2012 they admitted Nusrat as a partner in the firm. The balance sheet of
Mohan and Mahesh on that date was as under.
balance sheet of mohan and Mahesh
as on 1st April 2012
Liabilities ₹ Assets ₹
Creditors 2,10,00 Cash 1,40,00
Workman compfund 0 Debtor 0
reserve 2,50,00 s 1,60,00
capital 0 Stock 0
Mohan 1,60,00 Mach 1,20,00
Mahesh 0 0
1,00,00
1,00,00 0
0 2,80,00
80,000 0

it was agreed that:

(i) The value of Building and Stock be appreciated to ₹ 3,80,000 and ₹
1,60,000 respectivley.
(ii) the liability of workmen’s compensation fund was determined at ₹
2,30,000
(iii) Nusrat brought in her share of goodwill ₹ 1,00,000 in cash.
(iv) Nusrat was to bring further cash as would make her capital equal to 20%
of the combined capital of Mohan and Mahesh after above revaluation and
adjustments are carried out.
(v) The future profit sharing ratio will be Mohan 2/5th Mahesh 2/5th, Nusrat
1/5th.
Prepare Revaluation Account, Partner’s Capital Accounts and balance Sheet of the
new firm. Also show clearly the calculation of capital brought by Nusrat.
Q12. A and B are partners sharing profits in the proportion of 3 : 2. their balance Sheet
as at 31st March, 2012 was as follows:
Liabilities ₹ Assets ₹
Criditors 63,000 Bank 5,000
O/s 4,000 Debtors 30,00 29,000
salary 10,000 Prov 0 40,000
Reserve 50,000 Stock 1000 80,000
Cap A 30,000 T marks 75,000
B Buildin
g
1,57,00 1,57,00
0 0
They agree to admit C as a new partner on the following terms:
(i) C will be given 2/9th share of profit and he will bring ₹ 50,000 for his
share of capital and goodwill.
 (ii) Goodwill of the firm will be calculate at 2 ½ year’s purchase of the average
super profits of last four years. Profits of the last four years are ₹ 40,000;
₹ 40,000; ₹ 55,000 and ₹ 65,000 respectively. Normal profits that can be
earned with the capital employed are ₹ 14,000.
(iii) Half the amount of goodwill is withdrawn by old partners.
(iv) 15% of the general reserve is to remain as a provision against doubtful
debts.
(v) Outstanding salaries be increased to ₹ 6,000, Stock is to be reduced by
20% and Buildings be increased by 20%. trade Marks be written off by
50%.
(vi) New profit sharing ratio of partners will be 4 : 3 : 2 and the capital
accounts of A and B will be adjusted on the basis of C’s capital by bringing
in or withdrawing cash, as the case may be.
(vii) Partner sdecide to use 5% of the profits every year for providing clean
drinking water in a nearby locality inhabited by weaker sections of the
society.
(a) Prepare necessary accounts and the opening balance sheet of the firm.
(b) Also identify the values involved in the questions.
Q13. D and E were partners in a firm sharing profits in 3 : 1 ratio on 1-4-2007 they
admitted F as a new partner for 1/4th share in the firm which he acquired from D.
Their balance sheet as at that date was as follows:
Liabilities ₹ Assets ₹
Creditors 54,000 Building 50,000
Capitals 1,70,00 Machine 60,000
D 1,00,00 0 Stock 15,000
E 0 32,000 Debtors 40,00
General reserve 70,000 Less Provision 0
Bad debts 37,000
Investments 3,000 50,000
Cash 44,000
2,56,00 2,56,00
0 0
F will bring ₹ 40,000 as his capital and the other terms agreed upon were:
(i) Goodwill of the firm was valued at ₹ 24,000.
(ii) Land and Building were valued at ₹ 70,000.
(iii) Provision for bad debts was found to be in excess by ₹ 800.
(iv) A liability for ₹ 2,000 included in creditors was not likely to arise.
(v) The capital of the partners be adjusted on the basis of F’s contribution of
capital to the firm.
(vi) Excess or shortfall, if any, to be transferred to current accounts.
Prepare Revaluation Account, Partner’s Capital Accounts and the balance Sheet of
the new firm.
Q14. X and Y are partners sharing profits in the ratio of 2 : 1. Their balance sheet as at
31st march, 2012 was as follows:
Liability ₹ Assets ₹
Sundry Creditors 25,000 Cash at bank 5,000
Reserve 18,000 Sundry 15,000
Capital debtor 10,000
X 75,000 Stock 8,000
 Y 62,000 Investments 5,000
Typerwriter 1,37,00
Fixed Assets 0
1,80,00 1,80,00
0 0
They admit Z into partnership from 1st April, 2012 on the following terms
(i) Z brings in ₹ 40,000 as his capital and he is given 1/4th share in profits.
(ii) Z brings in ₹ 15,000 for goodwill, half of which is withdrawn by old
partners.
(iii) Investments are valued at ₹ 10,000. X takes over Investments at this
value.
(iv) Type rwriter is to be depreciated by 20% and fixed Assets by 10%
(v) An old customer whose account was written off as bad debts, has
promised to pay ₹ 1,000.
(vi) By bringing in or withdrawing cash, the Capitals of X and y are to be made
proportionate to that of Z on their profit sharing basis.
Pass journal entries, prepare capital accounts and new B/S of the firm.
Q15. A and B are partners with capitals of ₹ 6,50,000 and ₹ 4,50,000 respectively.
They admit C as a partner with 1/5th share in the profits of the firm. Fill in the
missing figures to record Capital and Goodwill.
Journal entries
Dat Particulars L.F. Dr. Cr.
e (₹) (₹)
bank a/c
To C’s capital a/c
(₹ 4,00,000 brought by C capatial )
C’s a/c
To
To
(C’s share of goodwill credited a and B share
ratio)
Q16. A and B are partners sharing profits in the ratio of 5 : 3. They admit C into the
firm for 3/10th profit which he takes 2/10th from A and 1/10th from B and brings
a part of his share of premium for goodwill in Cash. Goodwill account does not
appear in the books of A and B. Fill in the missing information in the following
journal entries and compute the new ratio of A, b and C.
Journal
Dat Particulars L.F. Dr. (₹) Cr. (₹)
e
bank a/c
to promotion for goodwill a/c
( )
Prem for goodwill 1,20,00
C’s current a/c 0
To – A/c 3,30,00
To – A/c 0
( )
Q17. Given below is the balance Sheet of A and B, who carrying on partners business
as on March, 31, 2015. A and B share profits and losses in the ratio of 3 : 2
 Liabilities ₹ Assets ₹
Bills payable 6,000 Cash 28,750
Creditors 30,000 Debtors 80,000
o/s Exp 14,000 Stock 30,000
Cap Plant 1,00,000
A 2,00,000 Building 1,50,000
B 1,50,000 3,50,000 Goodwill 11,250

4,00,000 4,00,000

On that date, they agree to admit C as a partner on the following terms

(a) C will get 1/4th share in profits
(b) New profit sharing ratio shall be 3 : 3 : 2
(c) Goodwill shall be valued on 2 ½ year’s purchase of the past four years’
average profits, which were ₹ 17,000; ₹ 14,000; ₹ 15,000 and ₹ 20,000
respectively. C is not to bring goodwill in Cash.
Complete the revaluation account, partner’s capital accounts and the opening
balance Sheet given below.
Revaluation account
Particulars ₹ Particulars ₹
T stock …. By Profit a/c 20,000
To creditors …. By Builidng
To profit T/F to cap
A 20,000
B … ….

Capital Accounts
Particulars ₹ ₹ ₹
To Goodwill (w/o) By Bad b/d
to Baat 40,00 By C’s current
0 a/c (Goodwill)
By cash a/c

balance sheet (after Admission)

as at 1st April 2015
Liabilities ₹ Assets ₹
Bills Payable … Cash ….
Creditors 31,000 Sundry Debtors ….
Outstanding exp Stock 25,000
capital Plant
A Buildings
B C’s current a/c
C

Q18. Revaluation Entries

(i) Bad debts provision is to be reduced by ₹ 10,000.
(ii) ₹ 2,000 out of total creditors of ₹ 20,000 are not to be paid.
 (iii) There is an outstanding bill for repairs for ₹ 1200.
(iv) Debtors are all good therefore no provisionis required on debtors.
(v) Stock include ₹ 3,000 for obsolete items.
(vi) Accruad income of ₹ 4,000 is to be taken into account
(vii) Patents are values
(viii) Building was found under valued by ₹ 50,000 and machinery overload by
₹ 20,000
(ix) Part of the stock which had been included at a cost of ₹ 10,000 had been
badly damaged in storage & could only expect to sealie ₹ 2,000.
(x) Machinery was overvalued by 10% and machinery given in B/s 1,10,000.
(xi) let original value x over
(xii) Advt. Exp of ₹ 1,206 are to be carried forward to next accounting period.
(xiii) Exp dr in p& L a/c includes a sum of ₹ 2,000 paid for B’s personal Exp
(xiv) A bill of exchange of ₹ 4,000 which was previously discounted with the
banker, was dishonoured on march 31, 2015 Buty no entry has been
passed for that
(xv) Exp. on Revaluation ₹ 2,100 paid by A Rev. a/c ₹ 2100 they a’s capital cr
(xvi) bank charges had been overlooked and amt to ₹ 200 for the year
(xvii) A credit for good for ₹ 800 had been omitted from both purchase and
creditors at though the goods had been correctly included in stck.
(xviii) No entry has been made in respect of a debt 300 recovered from ravi a
customer which was previously written off as bad in previously
(xix) 5% provision for discount on debtors and 5% provision for doubtful debts
(xx) General Reserve will appear in book in newton at its organically value
gaining to certify
(xxi) g.r. 10000, 20% used to make provision for d/d

Part B
Q1. The authorised capital of mercury ltd is ₹ 15,00,000 divided into 1,50,000 equity
shares of ₹ 10 each. Out of these the company issued 1,00,000 equity shares for
subscription to the public. The public applied for 98,000 equity shares and all the
money was duly received. how will you show the share capital A/c in the balance
sheet of star ltd. as per serviced a schedule XI – Part I of the companies Act. 1956,
Also prepare notes to account for the same.
Q2. Moon Ltd. is registered with capital of ₹ 40,00,000 divided into 4,00,000 equity
shares of ₹ 10 each. The company issued 2,00,000 equity shares for subscription
to the public. The public applied for 1,90,000 equity shares and all the money
was duly received, except the final call of ₹ 2 per share on 5,000 shares. 1,000 of
the shares on which the final call was not received, were forfeited. Show how
“Share capital” will appear in the Balance Sheet of the company. Also prepare
‘Notes to Accounts’ for the same.
Q3. Ankit Ltd. was registered with an authorised capital of ₹ 1,20,00,000 divided into
1,20,000 Equity Shares of ₹ 100 each . The company issued 6,000 Equity shares
as fully paid to the vendor for purchases of building and 50,000 Equity Share
were subscribed for by the public. All the calls were made and were duly received
except the second and final call of ₹ 20 per share on 700 shares. Show how
“Share Capital” will appear in the balance Sheet of the Company. Also prepare
Notes to Accounts for the same.
Q4. X Ltd has an authorised capital of ₹ 15,00,000 divided into 1,00,000 Equity
shares of ₹ 10 each and 50,000 9% Preference Shares of ₹ 10 each. the company
invited applications for all the preference shares and 90,000 equity shares. All
the preference shares were subscribed, called and paid, while subscriptions were
received for only 85,000 equity shares. During the first year, ₹ 8 per share were
called. Ram holding 1,000 shares and Shyam holding 2,000 shares did not pay the
first coll of ₹ 2. shyam’s share were forfeited after the first call and later on 1,500
of the forfeited shares will reissued at ₹ 6 per share ₹ 8 called op
Show share capital in the balance Sheet as per serviced schedule VI as at 31 st
March, 2013 or prepare relevant notes to account.
Q5. Venus Ltd. has the following balance in Reserves and Surplus
Amt. (₹)
Debenture Redemption Reserve 4,00,00
General Reserve 0
Surplus, i.e. balance in the statement of profit and loss 2,00,00
0
6,00,00
0
During the year, the company earned a profit of ₹ 3,00,000. It decided to
appropriate ₹ 1,20,000 towards Debenture Redemption Reserve and ₹ 80,000
towards General Reserve. Show how it will be shown in the Notes to Accounts on
Reserve and Surplus.

Chapter
Q1. From the following balance Sheets, Prepare a Comparative Balance Sheet
Particulars Note NO. 31.3.2015 31.3.2014
(₹) (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
(a) Share capital 4,00,000 6,00,000
(b) Reserves and Surplus 2,00,000 2,50,000
2. Non-Current Liabilities
Long – term Borrowings 3,00,000 2,00,000
3. Current Liabilities
(a) Trade Payables 1,50,000 90,000
(b) Other – current liabilities 60,000 54,000
(c) Short term provisions 40,000 34,000
Total 11,50,000 11,28,000
II. Assets
1. Non- Current Assets
(a) Fixed Assets
Tangible Assets 6,00,000 5,40,000
(b) Non-Current Investments 2,00,000 2,00,000
2. Current Assets
(a) Inventories 1,00,000 1,50,000
(b) Trade Receivables 2,00,000 2,00,000
(c) Cash and Cash – Equivalents 50,000 38,000

Total 11,50,000 11,28,000

Q2. Prepare Comparative Statement of Profit and Loss from the following
Particulars Note No. 31st March, 2015 31st March, 2014
(₹) (₹)
Revenue from Operations 15,00,000 12,00,000
Other Income 3,00,000 2,00,000
Cost of Materials Consumed 5,00,000 4,00,000
Change in Inventories of Finished 1,00,000 50,000
Goods, Work – in – Progress 20% 20%
Q3.
Other Expenses (% of Cost of Revenue 40% 40%
from Operations)
Tax Rate
From the following Statement of profit and loss of Earth Ltd. for the years
ended 31st March, 2015 and 2014, prepare Common size statement of Profit and
loss.
Particulars Note 31.3.2015 31.3.2014
No. (₹) (₹)
I. Revenue from Operation 40,00,000 35,00,000
II. Other Income 2,00,000 1,00,000
III. Total Revenue (I +II) 42,00,000 36,00,000
iv. Expenses:
Cost of materials Consumed
Change in Inventories of Finished goods 15,00,000 12,00,000
and work-in-progress 2,00,000 1,00,000
Employees Benefit Expenses 5,00,000 4,00,000
Other Expenses 3,00,000 2,10,000
Total Expenses 25,00,000 19,10,000
V. Profit before Tax (III – IV) 17,00,000 16,90,000
Additional information: Other Expenses include provision for Tax of ₹ 1,10,000
for the year ending 31st March, 2014 and ₹ 1,50,000 for the year ending 31st
March, 2015.
Q4. From the following Balance Sheets prepare a common Size balance sheet.
Particulars Note NO. 31.3.2015 31.3.2014
(₹) (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
(a) Share capital 10,00,000 5,00,000
(b) Reserves and Surplus 1,00,000 2,00,000
2. Non-Current Liabilities
Long – term Borrowings 8,00,000 4,50,000
3. Current Liabilities
(a) Trade Payables 2,00,000 2,00,000
(b) Other – current liabilities 2,00,000 1,50,000
(c) Short term provisions 1,00,000 1,00,000
Total 24,00,000 16,00,000
II. Assets
1. Non- Current Assets
(a) Fixed Assets 8,00,000 6,00,000
(b) Non-Current Investments 6,00,000 3,00,000
2. Current Assets
(a) Inventories 4,00,000 3,50,000
(b) Trade Receivables 3,00,000 2,00,000
(c) Cash and Cash – Equivalents 3,00,000 1,50,000
Total 24,00,000 16,00,000
Q5. Jai ltd is into the business of share manufacturing on the occasion of its silver
jubilee it decided to distribute 1000 share free of cost to the student belonging to
iconomically weaker section of the society following is the comparati as totment
of profit & loss of the company.
Comparative statement of Profit & Loss
for the year ended 31st march, 2011 or 2012
Particulars Not 2010-11 2011-12 a percentage
e incom change
No. e income
2 3 4 5
A B B–A C/A × 100
=C =D
I. Revenue from … …. ….. …..
Operation 60,000 80,000 …… …..
II. Other Income …. ….. …… ….
III. Total Revenue (I
+II) ……. …… …… …….
IV. Expenses:
Cost of materials 2,80,000 3,48,000 …… ……
Consumed ….. ….. …… ……
Other Expenses 9,80,000 10,43,200 …… ……..
(10% of cost of
total consumed)

V. Profit before Tax

(III – IV)
you are required to
(a) fill in the blank in the comparative statement of profit or loss
(b) identify the volume involved
Q6. Following is the comparative balance sheet of solve ltd. for two conductive years
Comparatice balance Sheet of nova ltd.
Particulars Note 31-3- 31-3- Absolte Percentage
NO. 2014 2015 change Change
(Income
2 3 4 5
A B B - A = C C/A × 100
=D
I. Equity and Liabilities
1. Shareholders’ Funds
(a) Share capital 80,000 10,00,000 2,85,000 …..
Equity share capital 3,00,000 ----
(b) Reserves and Surplus
2. Non-Current Liabilities …… 8,50,000 1,70,000 …..
Long – term Borrowings 2,20,000 ……. ….. (2500)
3. Current Liabilities
(a) Trade Payables
Total …….. …….
II. Assets
1. Non- Current Assets
 fixed assets …...... 10,92,500 1,42,500 …….
(a) tangible Assets …… 4,77,000 (53,000) ……..
(b) Intangible Assets
2. Current Assets
(a) Trade Receivables 4,00,000 ….. 5,00,000 …….
(b) Cash and Cash – 1,20,000 …… 8.75
Equivalents
Total …….. ……. ……… ……
as at 31 March, 2014 & 2015
st

Youe are required to

(a) fill in the missing figures in the comparative balance sheet
(b) Compute the total asset to debt ratio for the years.

Chapter
Q1. Calculate Current ratio from the following information:
particulars ₹
total assets 8,00,000
Non-current Assets 6,50,000
Shareholder’s funds 6,00,000
None-Current Liabilities 80,000
Q2. Working Capital ₹ 2,00,000, Tota Assets = ₹ 8,00,000, non – current
assets = ₹ 5,00,000 Calculate current ratio.
Q3. Calculate Current ratio
Particlurs fund 3,00,000
total Assets 4,50,000
Non – current liabilities 70,000
Non current Assets 2,50,000
Q4. The current ratio is 2 : 1 state giving reasons which of the following transaction
would improce, reduce & not change the current ratio.
(a) Repayment of current liability
(b) Purchase of goods on credit
(c) Sale of an office typewriter (Book Value = ₹ 4,000) for ₹ 3,000 only
(d) Sale of merchandise (goods) costing ₹ 10,000 for ₹ 11,000.
(e) Payment of dividend
Q5. Z ltd has a current ratio of 3.5 : 1 & quick ratio of 1.5 : 1 It the excoss of current
assets over quick assets as represented by stock is ₹ 60,000. Calculate current
assts and current liabilities.
Q6. From the following information, calculate current ratio.
Particolars ₹
Total Assets 3,00,000
Long term liabilities 80,000
Share holders’ fund 2,00,000
Non-current assets 2,60,000
Q7. Ratio of current assts (₹ 3,00,000) to current liabilities (₹ 2,00,000) is 1.5 : 1 The
accountant of the firm is interested in maintaining a current Ratio of 2 : 1 by
paying off a part of the Current liabilities. Compute amount of Current liabilities
the should be paid so that the Current + ratio at the local 2 : 1 may be
maintained.
Q8. the Quick ratio of a company is 2 : 1 state givne reasons (for any 4) which of the
following would improve reduce or not change the ratio.
(i) purchas of machinery for cash
(ii) Purchase of goods on credit
(iii) Sale of furniture of cost
(iv) Sale of goods at a profit
(v) cash received from trade receivable

Q9. Shareholders fund ₹ 4,00,000, reserve & surplus ₹ 2,00,000, Total debt ₹
11,40,000 current liabilities ₹ 3,40,000 calculate debt to equity ratio.
Q10. From the following balance sheet of pluto ltd, calculate debt to Equity Ratio.

Particulars Note NO. 31.3.2014

(₹)
I. Equity and Liabilities
1. Shareholders’ Funds
(a) Share capital 7,00,000
(b) Reserves and Surplus (60,000)
2. Non-Current Liabilities
(a) Long – term Borrowings 6,00,000
(b) Long – term Provisions 2,00,000
3. Current Liabilities
(a) Short term borrowings 1,80,000
(b) Trade payable 50,000
Total 16,70,000
II. Assets
1. Non- Current Assets
(a) Fixed Assets 5,70,000
(b) Non-Current Investments 1,00,000
2. Current Assets
(a) Current Inventories 2,00,000
(b) Inventories 3,00,000
(c) Trade Receivables 1,20,000
(c) Cash and Cash – Equivalents 3,80,000
Total 16,70,000
Notes to Accounts
1. Share Capital
Equity Share Captial 4,00,00
Preference Share Capital 0 7,00,00
3,00,00 0
0
2. Long term Borrowings
5,00; 11% Debentures of ₹ 100 5,00,00
each 0 6,00,00
Loan from bank 1,00,00 0
0

Q11. Share holders found ₹ 1,30,000, Total debt ₹ 1,90,000. Current liabilities ₹
30,000 Calculate Total Assets to Debt ratio
Q12. Calculate Proprietary Ratio
Particulars ₹
Equity share capital 8,70,000
Preference share capital 4,00,000
reserve of surplus 50,000
12% Debentures 4,00,000
Current Assets 5,00,000
Tangible Assets 12,00,000
Intangible Assets 5,00,000
Q13. Moon Ltd has 15% long term loan of ₹ 1,00,000 The profit after interest and after
tax is ₹ 80,000 calculate Intereest coverage ratio If tax paid during the year is ₹
40,000.
Q14. RK Ltd has 15% Debentures of ₹ 1,00,000 12% long term long loan of ₹ 1,00,000
Its profit after interest and after tax is ₹ 97,200 Calculate Interest coverage ratio
if tax rate is 40%.
Q15. Calculate Inventory turnover ratio
Opening inventory of Materials 2,00,000
Closing inventory of materials 1,50,000
Purchase at materials 6,30,000
Opening inventory of finished goods 70,000
Closing inventory of finished goods 90,000
Opening inventory of work in progress 40,000
Closing inventor of work in progress
wages 30,000
Carriage in wards 10,000
Q16. Calculate opening & Closing inventory from the following in formation. Revenue
from operation (total sales) ₹ 60,000, gross profit 25% inventory turnover ratio
5 times closing inventory is ₹ 12,000 more than the opening inventory
Q17. ₹ 2,40,000 is the cast of Revenue from operation ₹ 4,00,000. Inventory
Turnovers ratio 8 times calculate the value of opening inventory and closing
inventory in loan of the following cases
(a) If closing inventory was ₹ 10,000 more than the opening invenoory
(b) If closing inventory was 4 times of the opening inventory.
(c) If closing inventory was 2 times more than the opening inventory.
Q18. From the following information, calculate trad receivable Turnvers ratio.
Cost of revenue from operation ₹ 3,00,000
Gross Profit 33% of cost
Opening debtors ₹ 1,25,000
Closing debtors ₹ 75,000
Q19. From the following information
Trade receivable turnover ratio 4 times
Cost of Revenue from operation ₹ 3,00,000
Gross Profit 25%
Opening Debtors ₹ 40,000
Calculate closing Debtors if cash Revenue from operation is 20% of total
revenue from operations.
Q20. The following information is given for ABC Ltd. Trade Receivabel Turnover Ratio
3 times Revenue from operation ₹ 3,00,000. then Calculate opening debtors and
closing debtors in each of following cases
 (a) If closing debtor were ₹ 1,00,000 in excess of opening debtors
(b) If closing debtors were 3 times of the opening debtors.
(c) If closing debtors were 3 times more than the opening debtors.
(d) If closing debtors were 1/3rd of the opening debtors.
Q21. Calculate Gross Profit Ratio
Revenue from Operations (Net Sales) ₹ 4,00,000
Gross Profit 25% on cost
Q22. the following information is given for X ltd.
Average inventory 1,22,500
Inventory Turnover Ratio 4 times
Average Trade Receivable 1,12,000
Trade Recivable turnover Ratio 5 times
Q23. Calculate operating Profit Ratio.
Opening Inventory 1,00,000
Purchases 6,00,000
Employees Benefit Expnses 60,000
Closing Inventory 35,000
Other Expenses 40,000
Revenue from operation 9,00,000
Q24. From the following information Calculate Return on Investment Net profit after
tax ₹ 2,40,000, Tax Rate 50% Revenue from operation ₹ 20,00,000; 15% long
term Borrowings ₹ 8,00,000, Equity Share Capital ₹ 1,50,000; Reserve & surplus
₹ 1,50,000 18% preference share capital 1,00,000
Q25. From the following Balance Sheet of XYZ Ltd. calculate Return on Investment:
Particulars Note NO. 31.3.2014
(₹)
I. Equity and Liabilities
1. Shareholders’ Funds
(a) Share capital 20,00,000
(b) Reserves and Surplus 1 11,00,000
2. Non-Current Liabilities
Long – term Borrowings 2 15,00,000
3. Current Liabilities
(a) Short term borrowings 2,40,000
(b) Trade payable 3,10,000
Total 51,50,000
II. Assets
1. Non- Current Assets
Fixed Assets 41,00,000
2. Current Assets
(a) Current Inventories 5,50,000
(b) Inventories 3,00,000
(c) Cash and Cash – Equivalents 2,00,000
Total 51,50,000

Notes to Accounts

Amt. (₹)
1. Reserves and Surplus
 General Reserve 4,00,00
Surplus in the statement of profit and loss 0 11,00,00
2. Long term borrowings 7,00,00 0
15,000; 10% Debentures of ₹ 100 each 0
15,00,00
0
The Surplus in the Statement of Profit and Loss includes profit of ₹ 4,02,000 for
the current period.
Q26. Calculate Return on Investment & Debt Equity Ratio from the following
Net profit after interest and tax 6,00,000
10% Debentures 10,00,000
Tax Rate 40%
Capital Employed 80,00,000
Q27. Calculate Current Ratio of a company from the following information inventory
(Stock) Turnover Ratio 4 times inventory (Stock) in the beginning was ₹ 20,000
loss than inventory at the end. Revenue from operation (net sales) ₹ 6,00,000;
Gross profit Ratio 25% Current liabilities ₹ 60,000 and quick ratio is 0.75 : 1
Q28. Umesh ltd debt equity ratio is 2 : 1 state with reason whether this will increase
decrease or there will be no change in it due to the following transactions:
(i) If track payable of ₹ 5000 was paid
(ii) Issued equity shares of ₹ 2,00,000
(iii) Issued 9% Debenture of ₹ 1,00,000
Q29. From the following details, calculate opening inventory closing inventory ₹
60,000; Total Revenue from operations ₹ 5,00,000 (Including cash revenue from
operation ₹ 1,00,000) total purchase ₹ 3,00,000 (Including credit purchase ₹
60,000) goods are sold at a profit of 25% on cost
Q30. From the following statement of profit and loss of ayus ltd for the year ended 31 st
March, 2015. compute the operating ratio.
Particulars Note No. Amt (₹)
I. Revenue from Operation 20,00,000
II. Expenses
Cost of Material Consumed 12,00,000
Changes in Inventories of Finished Goods and work in 1
progress 1,00,000
Employees Benefit Expenses 60,000
Finance Cost 2 1,00,000
Other Expenses 40,000
Total Expenses 15,00,000
III. Profit from Operations ( I – II) 5,00,000

Note to Accounts

Particulars Amt. (₹)

1. Changes in Inventories of Finished Goods and woirk in progress
opening inventory 1,50,000
Less closing inventory 50,000
1,00,000
2. other expenses
Administrative expenses 12,000
Selling and distribution Expenses 18,000
Loss on Sale of machinery 10,000
40,000