Sample Paper 2 Accountancy Class 12th PDF

By DeeCee – Divine Classes Sample Paper 2 Accountancy Time Allowed: 3 Hours Maximum Marks: 80 General Instructions: 1. This question paper contains 3...

By DeeCee – Divine Classes Sample Paper 2 Accountancy Time Allowed: 3 Hours Maximum Marks: 80 General Instructions: 1. This question paper contains 34 questions. All questions are compulsory. 2. This question paper is divided into two parts, Part A and B. 3. Questions 1 to 16 and 27 to 30 carry 1 mark each. 4. Questions 17 to 20, 31 and 32 carry 3 marks each. 5. Questions 21, 22 and 33 carry 4 marks each. 6. Questions from 23 to 26 and 34 carry 6 marks each. 7. There is no overall choice. However, an internal choice has been provided in 7 questions of one mark 2 questions of three marks, 1 question of four marks and 2 questions of six marks. Part A (Accounting for Partnership Firms and Companies) Q 1. Raman and Rohit are partners sharing profits and losses in the ratio of 3: 2. They admit Saloni into partnership for 1/4th share. At the time of admission, 'Investment Fluctuation Reserve' is of ₹ 4,000 and investments at ₹ 20,000 appears in the books. Following Journal entry is passed to distribute Investment Fluctuation Reserve': JOURNAL Date Particulars L.F. Dr. (₹) Cr. (₹) Investment Fluctuation Reserve A/c...Dr. 4,000 To Raman's Capital A/c 1,800 To Rohit's Capital A/c 1,200 To Investment A/c 1,000 Market value of the investment will be (a) 16,000. (b) 24,000. (c) 18,000. (d) 19,000. Q 2. In the absence of Partnership Deed, interest on loan of a partner is allowed (a) @ 8% per annum. (b) @ 6% per annum. (c) @interest is allowed. (d) @12% per annum. Q 3. Creditors in Balance Sheet before dissolution were ₹ 2,50,000. Half of the creditors accepted furniture of ₹ 1,50,000 at 10% less than the book value and cash of ₹ 10,000 in full settlement of their 1 By DeeCee – Divine Classes claims. Remaining creditors were paid availing discount of 5%. What will be the amount with which bank will be credited in the Realisation Account for payment to creditors? (a) ₹ 1,18,750. (b) ₹ 1,35,000. (c) ₹ 1,28,750. (d) ₹ 1,25,000. Or Amit, Vidya and Chintan are partners sharing profits and losses in the ratio of 4:3:3. As per the new agreement, Chintan took 1/10th share equally from Amit and Vidya. Due to change in profit-sharing ratio, Vidya's new share is (a) 7/20. (b) 8/20. (c) 5/20. (d) 6/20. Q 4. At the time of admission of Vasu as a partner, old partners Paresh and Prabhav had debtors of ₹ 6,20,000 and provision for doubtful debts ₹ 20,000 in their books. As per the terms of admission, assets were revalued and thus debtors ₹ 15,000 had turned bad and hence were to be written off. Which Journal entry reflects the correct accounting treatment of the above? (a) Bad Debts A/c...Dr. 15,000 To Sundry Debtors A/c 15,000 Provision for Doubtful Debts A/c...Dr. 15,000 To Bad Debts A/c 15,000 (b) Bad Debts A/c...Dr. 15,000 To Sundry Debtors A/c 15,000 Revaluation A/c...Dr. 15,000 To Provision for Doubtful Debts A/c 15,000 (c) Revaluation A/c...Dr. 15,000 To Sundry Debtors A/c 15,000 (d) Bad Debts A/c...Dr. 15,000 To Revaluation A/c 15,000 Or Manav, Nath and Narayan are partners sharing profits & losses in the ratio of 4: 3:2. Nath retired and goodwill of the firm is valued at ₹ 21,600. Following entry is passed for the adjustment of goodwill: Date Particulars L.F. Dr. (₹) Cr. (₹) Manav's Capital A/c Dr. 3,900 Narayan's Capital A/c Dr. 3,300 To Nath's Capital A/c 7,200 (Nath's share of Goodwill adjusted) New profit-sharing ratio of Manav and Narayan will be (a) 12:9. 2 By DeeCee – Divine Classes (b) 10: 8. (c) 5:3 (d) 13:11. Q 5. Janak, Chaman and Anmol are partners sharing profits and losses in the ratio of 3:2:1. They decide to change their profit-sharing ratio to 2:2:1. To give effect to this new profit-sharing ratio, they decided to value goodwill at ₹ 60,000. What will be the necessary Journal entry if goodwill does not appear in the old Balance Sheet and it is not raised and written off? (a) Chaman's Capital A/c Dr. 4,000 Anmol's Capital A/c Dr. 2,000 To Janak's Capital A/c 6,000 (b) Goodwill A/c Dr. 60,000 To Janak's Capital A/c 30,000 To Chaman's Capital A/c 20,000 To Anmol's Capital A/c 10,000 (c) Janak's Capital A/c Dr. 24,000 Chaman's Capital A/c Dr. 24,000 Anmol's Capital A/c Dr. 12,000 To Goodwill A/c 60,000 (d) Janak's Capital A/c Dr. 6,000 To Chaman's Capital A/c 4,000 To Anmol's Capital A/c 2,000 Q 6. A company issued 50,000, 7% Debentures of 100 each at a discount of 5% redeemable after 5 years at premium of 10%. It received applications for 60,000 debentures along with the application money of 50 per debenture. Which of the following Journal entry is correct in context of the above?: (a) Debentures Application A/c Dr. 30,00,000 To Bank A/c 30,00,000 (Application Money received) (b) Bank A/c Dr. 30,00,000 To Debentures Application A/c 30,00,000 (Application Money received) (c) Bank A/c Dr. 30,00,000 To Debentures Application A/c 25,00,000 To Debentures Allotment A/c 5,00,000 (Application Money received, excess application money transferred to Debentures Allotment) (d) Debentures Application A/c Dr. 25,00,000 Debentures Allotment A/c Dr. 5,00,000 To Bank A/c 30,00,000 (Amount received towards application money and allotment money) Or Sun Ltd. intends to issue 40,000, 6% Debentures of ₹ 100 each at par. It may receive the issue price as 3 By DeeCee – Divine Classes (i) Application and Allotment Money. (ii) Application and Allotment Money, separately. (iii) Application Money, Allotment Money and First and Final Call. (iv) Allotment Money. Options: (a) Only (i) (b) Only (ii) (c) Only (i), (ii) and (iii) (d) Only (iv) Q 7. Assertion (A): At the time of admission of a partner, partnership firm is not dissolved. Reason (R): Any one or some or all partners may sacrifice profit-share in favour of the new partner. In the context of above two statements, which of the following is correct? (a) Assertion (A) is correct but Reason (R) is wrong, (b) Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A). (c) Both Assertion (A) and Reason (R) are incorrect. (d) Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A). Q 8. Following Journal entries are passed in the books of Bhuwan Ltd. on issue of debentures: JOURNAL Date Particulars L.F. Dr. (₹) Cr. (₹) Bank A/c Dr. 3,84,000 To Debentures Application and Allotment A/c 3,84,000 (Application Money received) Debentures Application and Allotment A/c Dr. 3,84,000 Loss on Issue of Debentures A/c Dr. 40,000 To 8% Debentures A/c 4,00,000 To Premium on Redemption of Debentures A/c 24,000 (8% Debentures issued) Based on the above Journal entries, identify the amount of discount on issue of debentures. (a) ₹ 40,000 (b) 24,000 (c) 16,000 (d) Nil Or Choose the correct options in respect of the following statements: 4 By DeeCee – Divine Classes (i) Preference shares can be issued at premium redeemable at premium. (ii) Preference shares can be issued at discount redeemable at par.. (iii) Preference shares can be issued at discount redeemable at premium. (iv) Preference shares can be issued at premium redeemable at par. Options: (a) (i) and (ii) are correct. (b) (i) and (iii) are correct. (c) (i), (iii) and (iv) are correct. (d) (i) and (iv) are correct. Q 9. Identify the correct statement out of the following relating to Premium Payable on Redemption of Debentures: (a) It is loss and is written off in the year debentures are redeemed. (b) Premium on Redemption Account is debited when debentures are redeemed. (c) Loss on Issue of Debentures is provided in the year debentures are redeemed. (d) It is a loss and can be written off from Capital Reserve. Q 10. Himani and Harsha are partners in a firm sharing profits and losses in the ratio 3: 2. They admit Charu as a partner for 1/5th share. The Journal entry passed for Charu's share of goodwill credited to sacrificing partners is: Date Particulars L.F. Dr. (₹) Cr. (₹) Premium for Goodwill A/c Dr. 3,000 Charu's Current A/c Dr. 2,000 To Himani's Capital A/c 2,000 To Harsha's Capital A/c 3,000 (Share of goodwill of Charu adjusted) New profit-sharing ratio of Himani, Harsha and Charu will be (a) 12:8:5 (b) 2:2:1. (c) 13:7:5. (d) 9:6:4. Q 11. Arrange the following steps in their ascending order in the context of reconstitution of partnership: (i) Preparation of Partners' Capital Accounts. (ii) Preparation of Balance Sheet of the reconstituted firm. (iii) Revaluation of Assets and Reassessment of Liabilities. (iv) Preparation of Bank Account. (a) (i); (iii); (ii); (iv). (b) (iii); (ii); (iv); (i). (c) (iv); (iii); (i); (ii). (d) (iii); (i); (iv); (ii). 5 By DeeCee – Divine Classes Q 12. Assertion (A): Raj Ltd. took over running business of Delhi Printers for a consideration of ₹ 13,00,000 to be settled by issue of 9% Debentures of ₹ 100 each at ₹ 115 per debenture. It issued 11,304 Debentures and paid ₹ 40 in cash/by cheque. Reason(R): Debentures are not issued in fractions and therefore, ₹ 40 had to be paid in cash/by cheque. In the context of above two statements, which of the following is correct? (a) Assertion (A) is correct but Reason (R) is wrong. (b) Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A). (c) Both Assertion (A) and Reason (R) are incorrect. (d) Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A). Q 13. Arun, Varun and Vijay are partners in a firm sharing profits and losses in the ratio of 5: 1. Extract of Balance Sheet is as follows: BALANCE SHEET (EXTRACT) Liabilities ₹ Assets ₹ Machinery 40,000 If value of machinery in the Balance Sheet on Varun's retirement is undervalued by 20%, then at what value machinery will be shown in new Balance Sheet? (a) ₹ 44,000 (b) ₹ 48,000 (c) ₹ 32,000 (d) ₹ 50,000 Q 14. Assertion (A): Big Basket Ltd. issued for subscription 2,00,000 Equity Shares of ₹ 5 each at a premium of ₹ 5 per share payable along with application. Applications were received for 3,00,000 Equity Shares and allotment was made to all the applicants on pro rata basis. Amit had applied for 600 Equity shares and will be allotted 200 Equity Shares. Reason(R): Pro rata allotment will be made in the ratio of 3:2, i.e., three shares for two shares applied. Since Amit had applied for 600 Equity Shares, he will be allotted 900 Equity Shares. In the context of above two statements, which of the following is correct? (a) Assertion (A) is correct but Reason (R) is wrong. (b) Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A) (c) Both Assertion (A) and Reason (R) are incorrect. (d) Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A). Q 15. Gross Profit of a partnership firm is ₹ 20,50,000 and indirect expenses other than Manager's Commission is ₹ 70,000. The manager is entitled to commission of 10% on net profit after charging such commission, which amount to 6 By DeeCee – Divine Classes (a) ₹ 1,95,000. (b) ₹ 2,00,000. (c) ₹ 1,80,000. (d) ₹ 1,98,000. Or The interest on Ram's drawings for the year is ₹ 6,000. He withdrew fixed amount in each quarter for the year ended 31st March, 2022. Interest on drawings is charged @ 10% p.a. His quarterly drawing is (a) 25,000. (b) 20,000. (c) 30,000 (d) 35,000 Q 16. Kirloskar Ltd. issued 1,00,000 Equity Shares of ₹ 20 each at premium of ₹ 4 per share. Amount was payable ₹ 8 on application (including ₹ 2 per share as premium), ₹ 8 (including balance premium) on allotment and balance on First and Final Call. It received ₹ 8,00,000 as allotment money and ₹ 7,04,000 as First and Final Call. Shares Subscribed but not fully paid-up are (a) 88,000 Equity Shares. (b) 32,000 Equity Shares. (c) 12,000 Equity Shares. (d) 22,000 Equity Shares. Q 17. Chander and Damini are partners in a firm sharing its profits in the ratio of 3: 2. They admitted Elina as a partner and fixed the new profit-sharing ratio as 3:3:2. At the time of admission of Elina, Debtors and Provision for Doubtful Debt appeared at ₹ 95,000 and ₹ 10,000 , ₹ 7,500 of the debtors proved bad A provision of 5% is to be required on Sundry Debtors for doubtful debts. Pass the necessary Journal entries. Q 18. On 1st April, 2021, Sahil, Sukesh and Mohan start a business in partnership. Sahil invests ₹ 60,000 at first instance but withdraws ₹ 20,000 at the end of six months. Sukesh introduces ₹ 50,000 at first and increases it to ₹ 60,000 at the end of four months but withdraws ₹ 20,000 at the end of eight months. Mohan invests first ₹ 50,000 but increases it by ₹ 40,000 at the end of seven months. During the year ended 31st March, 2022, net profit was ₹ 45,000. Show how the partners should distribute profit on the basis of the capital employed by each partner. Or On 1st April, 2021, John and Robert started business with initial capital of ₹ 20,000 and ₹ 30,000 respectively. The Partnership Deed provides as follows: (i) Profits and Losses will be shared in the ratio of 2: 3 as between John and Robert. (ii) Partners will be entitled to interest on capital @ 6% p.a. (iii) Interest on drawings will be charged at 8% p.a. 7 By DeeCee – Divine Classes During the year ended 31st March, 2022, the firm earned net profit of ₹ 19,280. The partners withdrew during the year ₹ 3,000 each at the end of every quarter commencing from 30th June. You are required to pass necessary Journal entries for interest and distribution of profit. Q 19. Volvo Ltd. issued 20,000, 9% Debentures of ₹ 100 each as collateral security for a loan of ₹ 15,00,000 from HDFC Bank. The company was unable to repay the loan on which interest payable was ₹ 5,00,000 as on 31st March, 2022. HDFC Bank, on 31st March, 2022, exercised the right vested in it by way of debentures being issued as collateral security. Pass Journal entries in the books of Volvo Ltd. on 31st March, 2022. Or Z Ltd. purchased machinery from K Ltd. Z Ltd. paid K Ltd, as follows: (i) By issuing 5,000 equity shares of ₹ 10 each at a premium of 30%. (ii) By issuing 1000, 8% Debentures of ₹ 100 each at a discount of 10%. (iii) Balance by giving a promissory note of ₹ 48,000 payable after two months. Pass necessary journal entries for the purchase of machinery and payment to K Ltd. in the books of Z Ltd. Ignore writing off discount on issue of debentures. Q 20. Nirmala, Divisha and Sara were partners in a firm sharing profits and losses in the 3:4:3. Books were closed on 31st March every year. Sara died on 1st February, 2022. As per the partnership deed, Sara's executors are entitled to her share of profit till the date of death on the basis of Sales turnover. Sales for the year ended 31st March, 2021 was 10,00,000 and profit for the same year was 1,20,000. Sales show a positive trend of 20% and percentage of profit earning is reduced by 2%. Journalise the transaction along with the working notes. Q 21. A, B and C are partners, sharing profits in the ratio of 4:3: 2. D is admitted for 2/9 share of profits and brings ₹ 3,00,000 as his capital and his share of goodwill in cash. The new profit-sharing ratio will be A: B: C: D 3:2:2:2. Goodwill of the firm is valued at 150% of the average profits of last three years, which were as follows: Year ended 31st March, 2018 (after charging loss by fire ₹ 60,000) 45,000 Year ended 31st March, 2019 2,40,000 Year ended 31st March, 2020 3,00,000 On 1st January 2020, a motorbike costing ₹ 80,000 was purchased and was wrongly debited to travelling expenses. Depreciation on motorbike was to be charged @25% p.a. Journalise the above arrangement in the books. Q 22. Ravi, Shankar and Madhur were partners in a firm sharing profits in the ratio of 7:2:1. On 31st March, 2018, the firm was dissolved, after transferring sundry assets (other than cash in hand and cash at bank) and third-party liabilities in the realization account the following transactions took place: 8 By DeeCee – Divine Classes (i) Debtors amounting to ₹ 1,40,000 were handed over to a debt collection agency which charged 5% commission. The remaining debtors were ₹ 47,000, out of which debtors of ₹ 17,000 could not be recovered because the same became insolvent. (ii) Creditors amounting to ₹ 5,000 were paid ₹ 3,500 in full settlement of their claim and balance creditors were handed over stock of ₹ 90,000 in full settlement of their claim of ₹ 95,000. (iii) A bills receivable ₹ 2,000 discounted with the bank was dishonoured by its acceptor and the same had to be met by the firm. (iv) Profit on realisation amounted to ₹ 6,000. Pass necessary journal entries for the above transactions in the books of Ravi, Shankar and Madhur. Q 23. (a) Ravi Ltd., forfeited 800 shares of ₹ 10 each, ₹ 7.50 paid, for non-payment of Final Call of ₹ 2.50 per share. Out of these, 600 shares were re-issued as fully paid up in such a way that ₹ 2,100 were transferred to capital reserve. Pass necessary journal entries. (b) X Ltd., forfeited 800 shares of ₹ 10 each, 7.50 called-up, for non-payment of First Call of ₹ 2.50 per share. Out of these, 600 shares were re-issued for ₹ 6 per share as ₹ 7.50 paid up. Pass necessary journal entries. (c) 400 shares of ₹ 10, on which ₹ 8 has been called and ₹ 6 has been paid, are forfeited. Out of these, 300 are re-issued for ₹ 7 as fully paid. Pass necessary journal entries. Or KS Ltd. invited applications for issuing 1,60,000 equity shares of ₹ 10 each at a premium of ₹ 6 per share. The amount was payable as follows: On Application - ₹ 4 per share (including premium ₹ 1 per share) On Allotment - ₹ 6 per share (including premium 3 per share) On First and Final Call - Balance. Applications for 3,20,000 shares were received, Applications for 80,000 shares were rejected and application money refunded. Shares were allotted on pro-rata basis to the remaining applicants. Excess money received with applications was adjusted towards sums due on allotment. Jain holding 800 shares, failed to pay the allotment money. His shares were forfeited immediately after allotment. Afterwards the first call was made. Gupta who had applied for 1,200 shares failed to pay the final call. These shares were also forfeited. Out of the forfeited shares 1,000 shares re-issued at ₹ 8 per share fully paid up. The re-issued shares included all the forfeited shares of Jain. Assuming that the Company maintains Calls in Arrears Account, pass necessary Journal entries for the above transactions in the books of KS Ltd. Q 24. P & K were partners in a firm. On March 31, 2017 their Balance Sheet was as follows: BALANCE SHEET as at March 31, 2017 9 By DeeCee – Divine Classes Liabilities Rs Assets Rs Capitals: Bank 18,000 P 3,00,000 Stock 19,000 K 2,00,000 5,00,000 Debtors 22,000 General Reserve 1,00,000 Less: Provision for D.D. 1,500 20,500 Creditors 50,000 Unexpired Insurance 5,000 Outstanding Expenses 8,000 Shares in K Limited 65,000 C's Loan 1,20,000 Plant & Machinery 1,45,500 Profit & Loss Account (Profit for 55,000 Land & Building 5,60,000 2016-17) 8,33,000 8,33,000 On April 1, 2017, they decided to admit C as a new partner for 1/4th share in profits on the following terms: (i) C's Loan will be converted into his capital. (ii) C will bring his share of goodwill premium by Cheque. Goodwill of the firm will be calculated on the basis of Average Profits of previous three years. Profits for the year ended March 31, 2015 and March 31, 2016 were 55,000 and 1,00,000 respectively. (iii) 10% depreciation will be charged on Plant & Machinery and Land & Building will be appreciated by 5%. (iv) Capitals of P & K will be adjusted on the basis C's capital. Adjustments be done through bank and if required, overdraft facility be availed. Pass necessary Journal entries on C's admission. Or Leena, Madan and Naresh were partners in a firm sharing profits and losses in the ratio of 2:2:3. On 31st March, 2015, their Balance Sheet was as follows: Liabilities ₹ Assets ₹ Trade Creditors 1,60,000 Land and Building 10,00,000 Bank Overdraft 44,000 Machinery 5,00,000 Long-term Debts 4,00,000 Furniture 7,00,000 Employees Provident Fund 76,000 Investments 2,00,000 Capitals: Closing Stock 8,00,000 Leena 12,50,000 Sundry Debtors 4,00,000 Madan 8,00,000 Bank 80,000 Naresh 10,50,000 31,00,000 Deferred Advertisement Expenditure 1,00,000 37,80,000 37,80,000 On 31st March, 2015, Madan retired from the firm and the remaining partners decided to carry on the business. It was decided to revalue assets and liabilities as under: (i) Land and Building be appreciated by ₹ 2,40,000 and Machinery be depreciated by 10%. (ii) 50% of Investments were taken over by the retiring partner at book value. (iii) An old customer Mohit whose account was written off as bad debt has promised to pay ₹ 7,000 in settlement of his full debt of ₹ 10,000. (iv) Provision for Doubtful Debts was to be made at 5% on debtors. 10 By DeeCee – Divine Classes (v) Closing Stock will be valued at market price which is ₹ 1,00,000 less than the book value. (vi) Goodwill of the firm be valued at ₹ 5,60,000 and Madan's share of goodwill be adjusted in the accounts of Leena and Naresh. Leena and Naresh decided to share future profits and losses in the ratio of 3:2. (vii) The total capital of the new firm will be ₹ 32,00,000 which will be in the proportion of the profit-sharing ratio of Leena and Naresh. (viii) Amount due to Madan was settled by accepting a Bill of Exchange in his favour payable after 4 months. Prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of the firm after Madan's retirement. Q 25. P, Q and R are partners in a firm sharing profits in the ratio of 2:2:1. Balance Sheet of the firm as at 31st March, 2020 was as under: BALANCE SHEET Liabilities Amount Assets Amount Creditors 55,000 Cash 30,750 Capital Accounts: Debtors 80,000 P 1,50,000 Less: Provision for Q 1,00,000 Doubtful 4,000 76,000 R 50,000 3,00,000 Stock 90,000 Plant 1,40,000 Patents 18,250 3,55,000 3,55,000 R retires on this date and P and Q decided to share future profits and losses in the ratio of 3:2. Following adjustments were agreed: (i) An amount of ₹ 5,000 included in Debtors be written off as bad debts. (ii) Provision for doubtful debts be maintained at the existing rate. (iii) Stock be reduced to ₹ 82,000. (iv) Plant be reduced by ₹ 10,000. (v) Patents are valueless. (vi) A provision of ₹ 5,000 be made for repairs. (vii) An old computer previously written off was sold for ₹ 6,000 as scrap. (viii) At the time of retirement an amount of ₹ 20,000 has been paid to an employee injured in an accident. You are required to give necessary journal entries for above adjustments and prepare Revaluation Account. Q 26. On 1.4.2015, J. K. Ltd. Issued 8,000, 9% debentures of 1,000 each at a discount of 6% redeemable at a premium of 5% after three years. The company closes its books on 31st March every year. Interest on 9% debentures is payable on 30th September and 31st March every year. Pass necessary journal entries for the year ended 31.3.2016. 11 By DeeCee – Divine Classes Part B (Analysis of Financial Statements) Q 27. Current Liability as per Schedule III of the Companies Act, 2013 is that liability which is (a) Expected to be settled in the company's normal operating cycle. (b) Due to be settled within 12 months after the reporting date, i.e., Balance Sheet date. (c) Held primarily for the purpose of being traded. (d) All of the above. Or Match entries in Group I with entries in Group II and select the correct answer using the codes given below the lists: Group I Group II 1. Interest accrued on Investments A. Current Liabilities-Short-term Borrowings. 2. Bank Overdraft B. Property, Plant and Equipment and Intangible Assets-Intangible Assets. 3. Trade Mark C. Current Assets-Inventories. 4. Stores and Spares Current Assets-Other Current Assets Codes: 1 2 3 4 1 2 3 4 (a) C B D A (b) D C B A (c) D A B C (d) D A C B Q 28. Which of the following transactions will result into Flow of Cash? (a) Deposited ₹ 10,000 into bank. (b) Withdrew Cash from Bank ₹ 14,500. (c) Sale of machinery at book value of ₹ 74,000 at a loss of ₹ 9,000. (d) Issued 50,000, 9% Debentures for the vendor of machinery. Q 29. A Statement of Assets (Current and Non-current), Liabilities (Current and Non-current) and Equity (i.e., Shareholders' Funds) indicating the financial position of an enterprise at a given date is known as (a) Income Statement. (b) Balance Sheet. (c) Cash Flow Statement. (d) Funds Flow Statement. Or Which one of the following is correct? (i) Aggregate of shareholders' funds and long-term debts is known as capital employed. 12 By DeeCee – Divine Classes (ii) The main objective of computing Operating Profit Ratio is to determine the operational efficiency of the management. (iii) Operating Ratio= 100 - Operating Profit Ratio. (iv) While calculating Trade Receivables Turnover Ratio, ‘Provision for Doubtful Debts’ is deducted from the total amount of Trade Receivables. (a) All are correct., (b) All are incorrect. (c) Only (i) and (iii) are correct. (d) Except (iv) all are correct. Q 30. From the following information, calculate the inflow of cash by sale of Machinery Particulars 31st March, 2022 (₹) 31st March, 2021 (₹) Machinery 10,00,000 15,00,000 Additional Information: (i) Depreciation charged on Machinery was ₹ 2,00,000. (ii) Machinery purchased during the year ₹ 1,50,000. (iii) Part of Machinery sold at a profit of ₹ 60,000. (a) 5,00,000. (b) 5,10,000. (c) 4,50,000 (d) 5,20,000. Q 31. State the major heads and sub-heads (if any) under which the following items will be shown in the Balance Sheet of a company as per Schedule III of Companies Act, 2013: (i) Provision for Tax. (ii) Loan payable on demand. (iii) Computer and related equipment. (iv) Goods acquired for trading. (v) Capital Advances. (vi) Current Maturities of Long-term Debts. Q 32. The Current Ratio of a company is 2.1: 1.2. State with reasons which of the following transactions will increase, decrease or not change the ratio: (i) Redeemed 9% debentures of 1,00,000 at a premium of 10%. (ii) Received from debtors 17,000. (iii) Issued 2,00,000 equity shares to the vendors of machinery. (iv) Accepted bill of exchange drawn by the creditors ₹ 7,000. Or 13 By DeeCee – Divine Classes From the following details, calculate Opening Inventory: Closing Inventory ₹ 60,000; Total Revenue from Operations ₹ 5,00,000 (including cash revenue from operations ₹ 1,00,000); Total purchases ₹ 3,00,000 (including credit purchases ₹ 60,000). Goods are sold at a profit of 25% on cost. Q 33. Following is the statement of Profit and Loss of Sun India Ltd. for the year ended 31st March, 2015: Particulars Note 31-3-2015 31-3-2014 No. Revenue from Operations 25,00,000 20,00,000 Other Incomes 1,00,000 5,00,000 Employee benefits expenses 60% of Total Revenue 50% of Total Revenue Other expenses 10% of Employee 20% of Employee benefits expenses benefits expenses Tax Rate 50% 40% You are required to prepare a comparative statement of profit and loss of sun india ltd. from the given statement of profit and loss. (3) Or From the following statement of profit and loss of sun ltd., for the years ended 31st march, 2022 and 2023, prepare a common size statement: Particulars Note 2022-23 2021-22 No. Revenue from Operations 30,00,000 20,00,000 Expenses 22,80,000 15,60,000 Other Incomes 3,60,000 4,00,000 Additional Information: Expenses include Provision for tax of 5,60,000 for the year ending 31st March 2022 and 10,80,000 for the year ending 31st March, 2023. Q 34. Following are the Balance Sheets of Aakashvani Ltd., prepare Cash Flow Statement for the year ended 31st March, 2022: Particulars Note 31st March, 31st March, 2021 No. 2022 (₹) (₹) I. EQUITY AND LIABILITIES 1. Shareholders' Funds (a) Share Capital 25,00,000 20,00,000 (b) Reserves and Surplus 1 6,00,000 4,50,000 2. Non-Current Liabilities Long-term Borrowings 2 5,00,000 8,00,000 3. Current Liabilities (a) Trade Payables 70,000 90,000 (b) Other Current Liabilities 3 40,000 30,000 Total 37,10,000 33,70,000 II. ASSETS 1. Non-Current Assets 14 By DeeCee – Divine Classes (a) Property, Plant and Equipment and Intangible 4 22,50,000 18,00,000 Assets: (i) Property, Plant and Equipment 5 4,00,000 6,00,000 (ii) Intangible Assets 3,00,000 5,00,000 (b) Non-current Investments 2,00,000 1,50,000 (c) Long-term Loans and Advances 2. Current Assets (a) Current Investments 2,50,000 1,50,000 (b) Inventories 1,80,000 70,000 (c) Trade Receivables 70,000 80,000 (d) Cash and Cash Equivalents 60,000 20,000 Total 37,10,000 33,70,000 Notes to Accounts Particulars 31st March, 2022 31st March, 2021 (₹) (₹) 1. Reserves and Surplus General Reserve 2,00,000 1,40,000 Securities Premium 2,50,000 2,00,000 Surplus, i.e., Balance in Statement of Profit & Loss 1,50,000 1,10,000 6,00,000 4,50,000 2. Long-term Borrowings 8% Debentures 5,00,000 8,00,000 3. Other Current Liabilities Dividend Payable 40,000 30,000 4. Property, Plant and Equipment Land and Building 15,00,000 10,00,000 Plant and Machinery 9,00,000 9,00,000 Accumulated Depreciation (1,50,000) (1,00,000) 22,50,000 18,00,000 5. Intangible Assets Goodwill 4,00,000 6,00,000 Additional Information: (i) Dividend proposed for 31st March, 2021 was ₹ 1,50,000 and for 31st March, 2022 was ₹ 2,00,000. (ii) Goodwill amortized during the year was ₹ 2,40,000. (iii) 8% Debentures were redeemed on 30th September, 2021 at 10% premium. 15 By DeeCee – Divine Classes Answer Key Part A (Accounting for Partnership Firms and Companies) Ans 1. (d) 19,000. Ans 2. (b) @ 6% per annum. Ans 3. (c) ₹ 1,28,750. Or Ans. (c) 5/20. Ans 4. (a) Bad Debts A/c...Dr. 15,000 To Sundry Debtors A/c 15,000 Provision for Doubtful Debts A/c...Dr. 15,000 To Bad Debts A/c 15,000 Or Ans. (c) 5:3 Ans 5. (a) Chaman's Capital A/c Dr. 4,000 Anmol's Capital A/c Dr. 2,000 To Janak's Capital A/c 6,000 Ans 6. (b) Bank A/c Dr. 30,00,000 To Debentures Application A/c 30,00,000 (Application Money received) Or Ans. (c) Only (i), (ii) and (iii) Ans 7. (b) Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A). Ans 8. (c) 16,000 Or Ans. (d) (i) and (iv) are correct. Ans 9. (b) Premium on Redemption Account is debited when debentures are redeemed. Ans 10. (c) 13:7:5. Ans 11. (d) (iii); (i); (iv); (ii) 16 By DeeCee – Divine Classes Ans 12. (d) Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A). Ans 13. (d) ₹ 50,000 Ans 14. (c) Both Assertion (A) and Reason (R) are incorrect. Ans 15. (c) ₹ 1,80,000 Or Ans. (c) ₹ 30,000 Ans 16. (c) 12,000 Equity Shares. Ans 17. JOURNAL Date Particulars L.F. Dr. (₹) Cr. (₹) Bad Debts A/c Dr. 7,500 To Debtors A/c 7,500 (Bad Debts written-off) Provision for Doubtful Debts A/c Dr. 7,500 To Bad Debts A/c 7,500 (Bad Debts transferred to Provision for Doubtful Debts A/c) Revaluation A/c Dr. 1,875 To Provision for Doubtful Debts A/c 1,875 (Short Provision for Doubtful Debts credited) Chander's Capital A/c Dr. 1,125 Damini's Capital A/c Dr. 750 1,875 To Revaluation A/c (Loss on Revaluation transferred to partners in their old profit-sharing ratio) Ans 18. PROFIT & LOSS APPROPRIATION ACCOUNT for the year ending 31st March, 2022 Particulars ₹ Particulars ₹ To Profit transferred to Capital By Profit & Loss A/c (Net Profit) 45,000 A/cs Sahil (3/10) 13,500 Sukesh (3/10) 13,500 Mohan (4/10) 18,000 45,000 45,000 45,000 Working Note: Calculation of Effective Contribution (Capital): Sahil : 60,000 for 6 months = 3,60,000 17 By DeeCee – Divine Classes 40,000 for 6 months = 2,40,000 6,00,000 Sukesh: ₹ 50,000 for 4 months = 2,00,000 ₹ 60,000 for 4 months = 2,40,000 ₹ 40,000 for 4 months = 1,60,000 6,00,000 Mohan ₹ 50,000 for 7 months = ₹ 3,50,000 ₹ 90,000 for 5 months = ₹ 4,50,000 8,00,000 Profit-sharing of Sahil, Sukesh and Mohan =6: 6: 8 Or 3: 3: 4. Or Ans. JOURNAL Date Particulars L.F. Dr. (₹) Cr. (₹) 2022 Interest on Capital A/c Dr. 3,000 March To John's Capital A/c 1,200 31 To Robert's Capital A/c 1,800 (Interest on Capital @ 6% is credited to Partners Capital Accounts) John's Capital A/c Dr. 360 Robert's Capital A/c Dr. 360 To Interest on Drawings A/c 720 (Interest on drawings @ 8% pa charged) (Note) Profit & Loss Appropriation A/c Dr. 3,000 To Interest on Capital A/c 3,000 (Transfer of Interest on Capital to Profit & Loss Appropriation Account) Interest on Drawings A/c Dr. 720 To Profit & Loss Appropriation A/c 720 (Transfer of Interest on drawings to Profit & Loss Appropriation Account) Profit & Loss Appropriation A/c Dr. 17,000 To John's Capital A/c 6,800 To Robert's Capital A/c 10,280 (Profit transferred to Partners' Capital Accounts in their profit-sharing ratio 2:3) Ans 19. Volvo Ltd. 18 By DeeCee – Divine Classes JOURNAL Date Particulars L.F. Dr. (₹) Cr. (₹) 2022 9% Debentures A/c Dr. 20,00,0000 March To Debentures Suspense A/c 31 (Entry for debentures issued as collateral security 20,00,000 reversed) March Loan from HDFC Bank Dr. 15,00,000 31 Outstanding Interest A/c Dr. 5,00,000 To 9% Debentures A/c 20,00,000 (Conversion of debentures issued as collateral security into Debentures) Or Ans. Purchase Consideration: ₹ (i) 5,000 Equity Shares @ ₹ 13 65,000 (ii) 1,000 Debentures @ ₹ 90 90,000 (iii) Promissory Note 48,000 2,03,000 Journal of Z Ltd. Date Particulars L.F. Dr. (₹) Cr. (₹) (i) Machinery A/c Dr. 2,03,000 To K Ltd. 2,03,000 (Machinery purchased from K Ltd.) (ii) K Ltd. Dr. 65,000 To Equity Share Capital A/c 50,000 To Securities Premium Reserve A/c 15,000 (Part payment made by issue of 5,000 equity shares of ₹ 10 each at ₹ 13) (iii) K Ltd. Dr. 90,000 Discount on Issue of Debentures A/c Dr. 10,000 To 8% Debentures A/c 1,00,000 (Part payment made by issue of ₹ 1,00,000 debentures at 10% discount) (iv) K Ltd. Dr. 48,000 To Bills Payable A/c 48,000 (Balance payment made by giving promissory note) Ans 20. JOURNAL 19 By DeeCee – Divine Classes Date Particulars L.F. Dr. (₹) Cr. (₹) 2022 Profit & Loss Suspense A/c Dr. 30,000 Feb. 1 To Sara's Capital A/c 30,000 (Sara's share of profit allowed till the date of her death) Working Note: Profit % to sales turnover for the year ended 31st March, 2021 = 1,20,000/10,00,000 x 100 = 12% Estimated sales for the year ended 31st March 1.2022 = 10,00,000 + 20% of 10,00,000 = 12,00,000 Estimated sales till 1st February, 2022 = 12,00,000 × 10/12 = 10,00,000 Profit percentage ( 12 - 2 ) = 10% Profit amount till 1st February, 2022 = 10% of 10,00,000 = 1,00,000 Sara's share of profit till 1st February, 2022 = 1,00,000 x 3/10 = 30,000 Ans 21. Books of A, B, C and D JOURNAL Date Particulars L.F. Dr. (₹) Cr. (₹) Bank A/c Dr. 3,80,000 To D's Capital A/c 3,00,000 To Premium for Goodwill A/c 80,000 (Amount of capital and goodwill/premium brought in cash) Premium for Goodwill A/c 80,000 To A's Capital A/c 40,000 To B's Capital A/c 40,000 (Amount of goodwill/premium transferred to old partners in sacrificing ratio, i.e., 1:1) Working Notes: (i) Calculation of Goodwill: Profit for the year ended 31st March, 2018: 45,000 Add: Abnormal Loss 60,000 1,05,000 Profit for the year ended 31st March, 2019: 2,40,000 Profit for the year ended 31st March, 2020: 3,00,000 Add: Cost of Motorbike wrongly debited to P & L A/c 80,000 3,80,000 20 By DeeCee – Divine Classes Less: Depreciation on Motorbike for 3 months: 80,000 X 25/100 X 3/12 5,000 3,75,000 7,20,000 Average Profit : 7,20,000/3 = 2,40,000 Firm's Goodwill: 2,40,000 X 150/100 = 3,60,000 D's Share = 3,60,000 X 2/9 = 80,000 (ii) Calculation of Sacrificing Ratio: Sacrificing Ratio = Old Ratio - New Ratio Thus, A's Sacrifice Ratio = 4/9 – 3/9 = 1/9 B's Sacrifice Ratio = 3/9 – 2/9 = 1/9 C's Sacrifice Ratio = 2/9 – 2/9 = 0 Ans 22. JOURNAL Date Particulars L.F. Dr. (₹) Cr. (₹) 2018 Bank A/c Dr. 1,63,000 March To Realisation A/c 1,63,000 31 (Amount received from debtors) (i) (ii) Realisation A/c Dr. 3,500 To Bank A/c 3,500 (Payment made to creditors) (iii) Realisation A/c Dr. 2,000 To Bank A/c 2,000 (Discounted bill dishonoured) (iv) Realisation A/c Dr. 6,000 To Ravi's Capital A/c 4,200 To Shankar's Capital A/c 1,200 To Madhur's Capital A/c 600 (Profit on Realisation transferred to partners capital accounts) Ans 23. (a) JOURNAL Date Particulars L.F. Dr. (₹) Cr. (₹) Share Capital A/c (800 x 10) Dr. 8,000 To Share Final Call A/c (800 x 2.50) 2,000 To Share Forfeiture A/c (800 x 7.50) 6,000 (Forfeiture of 800 shares) Bank A/c Dr. 3,600 Share Forfeiture A/c Dr. 2,400 To Share Capital A/c 6,000 (Re-issue of 600 shares @ 6 per share as fully paid up) Share Forfeiture A/c Dr. 2,100 To Capital Reserve A/c 2,100 21 By DeeCee – Divine Classes (Gain on 600 re-issued shares transferred to Capital Reserve) (b) JOURNAL Date Particulars L.F. Dr. (₹) Cr. (₹) Share Capital A/c (800 x 7.50) Dr. 6,000 To Share First Call A/c (800 x 2.50) 2,000 To Share Forfeiture A/c (800 x 5) 4,000 (Forfeiture of 800 shares) Bank A/c Dr. 3,600 Share Forfeiture A/c Dr. 900 To Share Capital A/c 4,500 (Re-issue of 600 shares @ 6 per share as 7.50 paid up) Share Forfeiture A/c Dr. 2,100 To Capital Reserve A/c 2,100 (Gain on 600 re-issued shares transferred to Capital Reserve) (c) JOURNAL Date Particulars L.F. Dr. (₹) Cr. (₹) Share Capital A/c Dr. 3,200 To Calls in Arrears A/c 800 To Share Forfeiture A/c 2,400 (Forfeiture of 400 shares) Bank A/c Dr. 2,100 Share Forfeiture A/c Dr. 900 To Share Capital A/c 3,000 (Re-issue of 300 shares at 7 as fully paid) Share Forfeiture A/c Dr. 900 To Capital Reserve A/c 900 (Gain on re-issue of 300 shares transferred to Capital Reserve) Or Ans. JOURNAL OF AS.LTD. Date Particulars L.F. Dr. (₹) Cr. (₹) Bank A/c (3,20,000 x 4) Dr. 12,80,000 To Equity Share Application A/c 12,80,000 (Application money received on 3,20,000 shares) Equity Share Application A/c Dr. 12,80,000 22 By DeeCee – Divine Classes To Equity Share Capital A/c (1,60,000 x 3) 4,80,000 To Securities Premium Reserve A/c (1,60,000 x 1) 1,60,000 To Equity Share Allotment A/c (80,000 × 4) 3,20,000 To Bank A/c (80,000 x 4) 3,20,000 (Application money adjusted & surplus refunded) Equity Share Allotment A/c Dr. 9,60,000 To Equity Share Capital A/c 4,80,000 To Securities Premium Reserve A/c 4,80,000 (Share allotment made due) Bank A/c Dr. 6,36,800 Calls in Arrears A/c Dr. 3,200 To Equity Share Allotment A/c 6,40,000 (Allotment money received except on 800 shares) Equity Share Capital A/c (800 x 6) Dr. 4,800 Securities Premium Reserve A/c (800 × 3) Dr. 2,400 To Calls in Arrears A/c 3,200 To Forfeited Shares A/c 4,000 (800 shares of Jain forfeited after allotment) Equity Share First & Final Call A/c (1,59,200 x 6) Dr. 9,55,200 To Equity Share Capital A/c (1,59,200 × 4) 6,36,800 To Securities Premium Reserve A/c (1,59,200 x 2) 3,18,400 (First & final call due on 1,59,200 shares) Bank A/c (1,58,400 x 6) Dr. 9,50,400 Calls in Arrears A/c (800 x 76) Dr. 4,800 To Equity Share First & Final Call A/c 9,55,200 (First & final call money received except on 800 shares held by Gupta) Equity Share Capital A/c (800 x 10) Dr. 8,000 Securities Premium Reserve A/c (800 x 2) Dr. 1,600 To Calls in Arrears A/c (800 x 6) 4,800 To Forfeited Shares A/c 4,800 (800 shares of Gupta forfeited for non-payment of call money) Bank A/c Dr. 8,000 Forfeited Shares A/c Dr. 2,000 To Equity Share Capital A/c 10,000 (1,000 shares reissued @ ₹ 8 per share fully paid up) Forfeited Shares A/c Dr. 3,200 To Capital Reserve A/c 3,200 (Gain on reissue of forfeited shares transferred to capital reserve) Working Notes: 2,40,000 (1) (a) Total Number of shares applied by Jain = 800 x 1,60,000 = 1,200 shares Excess application money received: 1,200 shares - 800 shares = 400 shares x 4 = 1,600 23 By DeeCee – Divine Classes (b) Allotment money due from Jain = 800 x 6 4,800 Less: Excess received on application stage 1,600 Allotment money not received 3,200 (c) Total amount due on allotment: 1,60,000 shares x 6 9,60,000 Less: Excess received on application 3,20,000 6,40,000 Less: Amount not received from Jain on allotment 3,200 Net Amount received on allotment in cash 6,36,800 1,60,000 (2) Gupta was allotted = 1,200 x 2,40,000 = 800 shares (3) Calculation of Profit on Re-issue to be transferred to Capital Reserve: Amount forfeited on Re-issued shares Jain (800 shares) 4,000 200 Gupta (200 shares) [4,800 x 800] 1,200 Total Forfeited amount on 1,000 shares 5,200 Less: Discount on Re-issue 2,000 Profit on Re-issue to be transferred to Capital Reserve 3,200 Ans 24. JOURNAL Date Particulars L.F. Dr. (₹) Cr. (₹) 2017 C's Loan A/c Dr. 1,20,000 April 1 To C's Capital A/c 1,20,000 (C's Loan Account transferred to his Capital Account) Bank A/c Dr. 17,500 To Premium for Goodwill A/c 17,500 (New partner C brings in his share of goodwill) Premium for Goodwill A/c Dr. 17,500 To P's Capital A/c 8,750 To K's Capital A/c 8,750 (Premium for Goodwill transferred to old partners' Capital Accounts in their sacrificing ratio) Revaluation A/c Dr. 14,550 To Plant & Machinery A/c 14,550 (Decrease in the value of Plant & Machinery) Land & Building A/c Dr. 28,000 24 By DeeCee – Divine Classes To Revaluation A/c 28,000 (Increase in the value of Land & Building) Revaluation A/c Dr. 13,450 To P's Capital A/c 6,725 To K's Capital A/c 6,725 (Profit on revaluation transferred to partners' capital accounts) General Reserve A/c Dr. 1,00,000 To P's Capital A/c 50,000 To K's Capital A/c 50,000 (General Reserve transferred to partners' capital accounts) Profit & Loss A/c Dr. 55,000 To P's Capital A/c 27,500 To A's Capital A/c 27,500 (Profit & Loss Account transferred to partners' capital accounts) P's Capital A/c Dr. 2,12,975 K's Capital A/c Dr. 1,12,975 To Bank A/c 3,25,950 (Cash returned on adjustment of Capitals) Dr. PARTNER'S CAPITAL ACCOUNTS Cr. Particulars P K C Particulars P K C To Bal. c/d 3,92,975 2,92,975 1,20,000 By Bal. b/d 3,00,000 2,00,000 By C's Loan 1,20,000 By Premium for Goodwill 8,750 8,750 By Revaluation 6,725 6,725 By General Reserve 50,000 50,000 By P & L 27,500 27,500 3,92,975 2,92,975 1,20,000 3,92,975 2,92,975 1,20,000 To Bank 2,12,975 1,12,975 By Bal. b/d 3,92,975 2,92,975 1,20,000 To Bal. c/d 1,80,000 1,80,000 1,20,000 3,92,975 2,92,975 1,20,000 3,92,975 2,92,975 1,20,000 Or SOLUTION: Dr. REVALUATION ACCOUNT Cr. Particulars ₹ Particulars ₹ To Machinery A/c 50,000 By Land and Building A/c 2,40,000 To Closing Stock A/c 1,00,000 By Sundry Debtors A/c 7,000 25 By DeeCee – Divine Classes To Provision for Doubtful Debts A/c (5% on 4,07,000) 20,350 To Profit on Revaluation transferred to: Leena's Capital A/c 21,900 Madan's Capital A/c 21,900 Naresh's Capital A/c 32,850 76,650 2,47,000 2,47,000 Dr. PARTNERS' CAPITAL ACCOUNTS Cr. Particulars Leena Madan Naresh Particulars Leena Madan Naresh To Deferred 28,571 28,571 42,858 By Balance b/d 12,50,000 8,00,000 10,50,000 Advertisement By Revaluation 21,900 21,900 32,850 Expenditure A/c (Profit) A/c By Leena's 1,60,000 16,000 To Madan's 1,60,000 Capital A/c Capital A/c To Naresh's 16,000 Capital A/c To Investments A/c 1,00,000 To Bills Payable A/c To Bal. c/d 8,53,329 10,67,329 10,55,992 12,71,900 9,81,900 10,98,850 12,71,900 9,81,900 10,98,850 To Bal. c/d 19,20,000 12,80,000 By Balance b/d 10,67,329 10,55,992 By Bank A/c (Bal. Fig.) 8,52,671 2,24,008 19,20,000 12,80,000 19,20,000 12,80,000 Ans 25. Books of P, Q and R JOURNAL Date Particulars L.F. Dr. (₹) Cr. (₹) 2020 Bad Debts A/c Dr. 5,000 April To Debtors A/c 5,000 1 (Bad Debts written off) April Provision for Doubtful Debts A/c Dr. 4,000 1 Revaluation A/c (5,000-4,000) Dr. 1,000 To Bad Debts A/c 5,000 (Transfer of bad debts) April Revaluation A/c (Note 1) Dr. 3,750 26 By DeeCee – Divine Classes 1 To Provision for Doubtful Debts A/c 3,750 (Provision created @ 5% on 75,000) April Revaluation A/c Dr. 36,250 1 To Stock A/c 8,000 To Plant A/c 10,000 To Patents A/c 18,250 (Reduction in the value of assets) April Revaluation A/c Dr. 5,000 1 To Provision for Repairs A/c 5,000 (Provision made for repairs) April Bank A/c Dr. 6,000 1 To Revaluation A/c 6,000 (Sale of old computer previously written off) April Revaluation A/c Dr. 20,000 1 To Bank A/c 20,000 (Compensation paid to an injured employee) April P's Capital A/c Dr. 24,000 1 Q's Capital A/c Dr. 24,000 R's Capital A/c Dr. 12,000 To Revaluation A/c 60,000 (Transfer of loss on revaluation) Dr. REVALUATION ACCOUNT Cr. Particulars ₹ Particulars ₹ To Bad Debts A/c 1,000 By Bank A/c 6,000 To Provision for Doubtful Debts By Loss on Revaluation transferred A/c 3,750 to: To Stock A/c 8,000 P's Capital A/c 24,000 To Plant A/c 10,000 Q's Capital A/c 24,000 To Patents A/c 18,250 R's Capital A/c 12,000 60,000 To Provision for Repairs A/c 5,000 To Bank A/c 20,000 66,000 66,000 Ans 26. JOURNAL OF J. K. Ltd. Date Particulars L.F. Dr. (₹) Cr. (₹) 2015 Bank A/c Dr. 75,20,000 April 1 To Debenture Application & Allotment A/c 75,20,000 (Amount received on application) April 1 Debenture Application & Allotment A/c Dr. 75,20,000 Loss on Issue of Debentures A/c Dr. 8,80,000 To 9% Debentures A/c 80,00,000 4,00,000 27 By DeeCee – Divine Classes To Premium on Redemption of Debentures A/c (Issue of Debentures at 6% discount and redeemable at 5% premium) Sept. Interest on Debentures A/c Dr. 3,60,000 30 To Debentureholders A/c 3,60,000 (Half-yearly interest due on debentures) Sept. Debentureholders A/c Dr. 3,60,000 30 To Bank A/c 3,60,000 (Payment of interest) 2016 Interest on Debentures A/c Dr. 3,60,000 March To Debentureholders A/c 3,60,000 31 (Half-yearly interest due on debentures) March Debentureholders A/c Dr. 3,60,000 31 To Bank A/c 3,60,000 (Payment of interest) March Statement of Profit & Loss Dr. 16,00,000 31 To Loss on Issue of Debentures A/c 8,80,000 To Interest on Debentures A/c 7,20,000 (Loss on issue and Interest transferred to Statement of Profit and Loss) Part B (Analysis of Financial Statements) Ans 27. (d) All of the above. Or Ans. 1 2 3 4 (c) D A B C Ans 28. (c) Sale of machinery at book value of ₹ 74,000 at a loss of ₹ 9,000. Ans 29. (b) Balance Sheet. Or (d) Except (iv) all are correct. Ans 30. (b) 5,10,000. Ans 31. S. No. Item Major Head Sub-head (i) Provision for Tax. Current Liabilities Short-term Provisions (ii) Loan payable on demand. Current Liabilities Short-term Borrowings 28 By DeeCee – Divine Classes (iii) Computer and related equipment. Non-current Assets Property, Plant and Equipment and Intangible Assets Property, Plant and Equipment (iv) Goods acquired for trading. Current Assets Inventories (v) Capital Advances. Non-current Assets Long-term Loans and Advances (vi) Current Maturities of Long-term Debts. Current Liabilities Short-term Borrowings Ans 32. S. No. Current Ratio will Reason (i) Increase Debentures are shown as Current Liabilities in previous year's Balance Sheet and after redemption in the current year current ratio will increase since there will be an equal decrease in both current liabilities and current assets. (ii) Not Change Neither the Current assets nor the current liabilities are affected, since there is a conversion of one current liability into another current liability. (iii) Not Change Neither the Current assets nor the current liabilities are affected. (iv) Not Change Neither the Current assets nor the current liabilities are affected, since there is a conversion of one current liability into another current liability. Or Calculation of Cost of Revenue from Operations: Let Cost of Revenue from Operations = 100 Gross Profit = 25 Revenue from Operations = 125 If Revenue from Operations is 125, then Cost of Revenue from Operations is = 100 If Revenue from Operations is ₹ 5,00,000, then Cost of Revenue from Operations is = 100/125 x 5,00,000 = ₹ 4,00,000 Cost of Revenue from Operations = Purchase + Opening Inventory - Closing Inventory 4,00,000 = 3,00,000 + Opening Inventory - 60,000 4,00,000 = 2,40,000 + Opening Inventory Opening Inventory = 1,60,000 29 By DeeCee – Divine Classes Ans 33. Comparative Profit & Loss of Sun India Ltd. Note 2013-14 2014-15 Absolute Percentage No. Change Change (%) (Rs) I. Revenue from Operations 20,00,000 25,00,000 5,00,000 25 II. Add: Other Incomes 5,00,000 1,00,000 (4,00,000) (80) III. Total Income 25,00,000 26,00,000 1,00,000 4 IV. Less: Expenses Employee benefits expenses 12,50,000 15,60,000 3,10,000 24.8 Other expenses 2,50,000 1,56,000 (94,000) (37.6) Total expenses 15,00,000 17,16,000 2,16,000 14.4 V. Profit before Tax 10,00,000 8,84,000 (1,16,000) (11.6) (III – IV) VI. Less: Tax 4,00,000 4,42,000 42,000 10.5 VII. Profit after Tax 6,00,000 4,42,000 (1,58,000) (26.33) Or Common size statement of profit and loss Absolute Amount Percentage of Revenue from Operations Note 2021-22 2022-23 2021-22 2022-23 No. (Rs) (Rs) (%) (%) I. Revenue from Operations 20,00,000 30,00,000 100 100 II. Add: Other Incomes 4,00,000 3,60,000 20 12 III. Total Income 24,00,000 33,60,000 120 112 IV. Less: Expenses 10,00,000 12,00,000 50 40 V. Profit before Tax 14,00,000 21,60,000 70 72 (III – IV) VI. Less: Income Tax 5,60,000 10,80,000 28 36 VII. Profit after Tax 8,40,000 10,80,000 42 36 Answer 34. Aakashvani Ltd. CASH FLOW STATEMENT for the year ended 31st March, 2022 Particulars Detail (₹) 1. Cash Flow from Operating Activities Net Profit before Tax and Extraordinary Items (WN 1) 2,50,000 Adjustment for Non-cash and Non-Operating Items: Goodwill Amortized 2,40,000 Interest on Debentures (WN 2) 52,000 Depreciation Charged 50,000 30 By DeeCee – Divine Classes Operating Profit before Working Capital Changes 5,92,000 Add: Decrease in Current Assets and Increase in Current Liabilities: Trade Receivables 10,000 6,02,000 Less: Increase in Current Assets and Decrease in Current Liabilities: Inventories (1,10,000) Trade Payables (20,000) (1,30,000) Cash Generated from Operations 4,72,000 Less Tax Paid Nil Cash Flow from Operating Activities 4,72,000 4,72,000 II. Cash Flow from Investing Activities Purchase of Land and Building (5,00,000) Purchase of Goodwill (WN 3) (40,000) Proceeds from Sale of Non-current Investments 2,00,000 Loans and Advances Given (50,000) Cash Used in Investing Activities (3,90,000) (3,90,000) II. Cash Flow from Financing Activities Proceeds from Issue of Shares 5,00,000 Securities Premium (WN 5) 80,000 Redemption of 8% Debentures (3,00,000 + 30,000) (3,30,000) Interest on Debentures (52,000) Dividend Paid (WN 4) (1,40,000) Cash Flow from Financing Activities 58,000 58,000 IV. Net Increase in Cash and Cash Equivalents (I+II+III) 1,40,000 Add: Cash and Cash Equivalents (Opening) ( 20,000+ 1,50,000) 1,70,000 V. Closing Cash and Cash Equivalents ( 60,000+2,50,000) 3,10,000 Working Notes: ₹ 1. Net Profit before Tax and Extraordinary Items: Net Profit as per Statement of Profit & Loss (₹ 1,50,000 - ₹ 1,10,000) 40,000 Add: Transfer to General Reserve 60,000 Proposed Dividend (Previous years) 1,50,000 Net Profit before Tax and Extraordinary Items 2,50,000 2. Interest on Debentures: (8,00,000 x 8% x 6/12) + (5,00,000 × 8% x 6/12) = 32,000 + 20,000 = 52,000 3. Dr. GOODWILL ACCOUNT Cr. Particulars ₹ Particulars ₹ To Balance b/d 6,00,000 By Statement of Profit & Loss 2,40,000 To Bank A/c (Balancing Figure) 40,000 By Balance c/d 4,00,000 6,40,000 6,40,000 31 By DeeCee – Divine Classes 4. Dr. DIVIDEND PAYABLE ACCOUNT Cr. Particulars ₹ Particulars ₹ To Bank A/c (Balancing Figure) 1,40,000 By Balance b/d 30,000 To Balance c/d 40,000 By Surplus, i.e., Balance in Statement 1,50,000 of Profit & Loss A/c (Proposed Dividend of previous year) 1,80,000 1,80,000 5. Dr. SECURITIES PREMIUM ACCOUNT Cr. Particulars ₹ Particulars ₹ To Premium on Redemption of 30,000 By Balance b/d 2,00,000 Debentures A/c By Share Application and 80,000 To Balance c/d 2,50,000 Allotment, A/c (Balancing Figure) 2,80,000 2,80,000 32