Class XII Session 2025-26

Subject - Accountancy
Sample Question Paper - 1

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. Part - A is compulsory for all candidates.

4. Part - B has two options i.e. (i) Analysis of Financial Statements and (ii) Computerised Accounting. Students

must attempt only one of the given options.

5. Question 1 to 16 and 27 to 30 carries 1 mark each.

6. Questions 17 to 20, 31and 32 carries 3 marks each.

7. Questions from 21 ,22 and 33 carries 4 marks each

8. Questions from 23 to 26 and 34 carries 6 marks each

9. 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

1. Gagan, Vinod and Shubham are partners. Juhi is admitted as new partner. Sacrificing ratio of the partners is 1 : 2 [1]
: 1. New profit sharing ratio 2 : 1 : 1 : 1.
What was the old profit sharing ratio of Gagan, Vinod and Shubham?

a) 2 : 1 : 1 b) 9 : 6 : 5

c) 1 : 2 : 1 d) 13 : 14 : 9
2. Assertion (A): In the absence of Partnership Deed, Interest on Loan by partner is not allowed. [1]
Reason (R): Yogesh, a partner in the firm gave a loan of ₹ 10,00,000 to the firm without an agreement as to rate
of interest. Interest on loan by Yogesh will be allowed @ 6% p.a.

a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.

c) A is true but R is false. d) A is false but R is true.

3. Monu Ltd. forfeited 500 shares of ₹ 100 each issued at 40% premium (₹ 70 called up) on which application & [1]
allotment of ₹ 80 each (including premium) has been received. Out of these, 200 shares were reissued for ₹ 65
per share (₹ 70 paid up). What is the amount to be transferred to Capital Reserve?

a) ₹ 15,000 b) ₹ 7,000

c) ₹ 4,500 d) ₹ 2,000

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 OR
Debentures represent the:

a) The Investment of Equity-Shareholders b) Directors’ shares in a company

c) Short-term Borrowings of a Company d) Long-term Borrowings of a Company

4. Revaluation Account will be debited when: [1]

a) Value of fixed asset decreases b) Value of liabilities reduces

c) When provision for doubtful debts decreases d) Value of fixed asset increases
OR
B and A are partners in a firm and sharing the profit & loss in the ratio of 3 : 2 with a capital of ₹ 1,00,000 and ₹
60,000 respectively. Calculate the amount of profit or loss to be distributed among the partner if partnership deed is
silent on interest on capital. Profit for the year is ₹ 50,000.
Profit distribution will be:

a) Profit is to be shared in the ratio of their b) Profit to B = 25,000 and A = 25,000

capital i.e. 5 : 3

c) Profit to B = 20,000 and A = 30,000 d) Profit to B = 30,000 and A = 20,000

5. A partner withdrew ₹ 4,000 per month from 1st July, 2016, on beginning of every month. Accounts are closed at [1]
31st March, 2017.
Calculate interest on drawings while rate of interest is 10% per annum.

a) ₹ 2,200 b) ₹ 1,500

c) ₹ 1,600 d) ₹ 1,800
6. Interest on debentures issued as a collateral security is paid on: [1]

a) Paid up value of debentures b) Face value of debentures

c) No interest is paid d) Nominal value of debenturs

OR
X Ltd. acquired assets of ₹ 20 lakhs and took over creditors of ₹ 20 thousand from Y Ltd. X Ltd. issued 8%
debentures of ₹ 200 each at a discount of 10% as purchase consideration. Number of debentures issued will be:

a) 10,100 b) 9,000

c) 11,000 d) 10,000
7. If 500 shares of ₹ 10 issued at a premium of ₹ 1 on which ₹ 9 (including premium) have been called and ₹ 7 [1]
including premium have been paid are forfeited, the forfeiture account should be credited by:

a) ₹ 3,500 b) ₹ 4,000

c) ₹ 3,000 d) ₹ 4,500
8. What journal entry required to pass to transfer the due amount to the loan account of retiring partner? [1]

a) Partner executor A/c ... Dr. b) Gainer partners A/c ... Dr.
To Retiring partner’s loan A/c To Retiring partner’s loan A/c

c) Retiring Partner’s capital A/c ... Dr. d) Retiring Partner’s capital A/c ... Dr.
To Retiring partner’s loan A/c To Bank A/c

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 OR
What values are involved in the rectification of past adjustments:

a) Not rectifying those errors b) Not shown errors committed

c) Communicating the correct information d) Not admitting errors committed

9. Ravi, a partner, withdraws ₹ 20,000 on 1st April, 2022 and ₹ 40,000 on 1st October, 2022. Interest on Drawings [1]

@ 6% p.a. on 31st March, 2023 will be

a) ₹ 2,400 b) ₹ 1,800

c) ₹ 1,200 d) ₹ 3,600
10. Z Ltd. invited applications for issuing 40,000 equity shares of ₹ 100 each at a premium of ₹ 25 per share. The [1]
amount was payable as follows:
On Application: - ₹ 20 per share (including ₹ 4 premium)
On Allotment: - ₹ 30 per share (including ₹ 5 premium)
On First Call: - ₹ 40 per share (including ₹ 6 premium)
On Second and Final Call: - Balance Amount
Poonam, a shareholder holding 200 shares, did not pay the first and second and final call and her shares were
forfeited after the second and final call.
Calls in Arrears Account will be Credited by:

a) ₹ 11,800 b) ₹ 15,000

c) ₹ 7,000 d) ₹ 8,200
11. X Ltd. forfeited 100 shares of ₹ 10 each, ₹ 8 called-up for non-payment of allotment money of ₹ 5 per share [1]
(including premium of ₹ 2 per share). Out of these, 70 shares were reissued to Ashok as ₹ 8 called-up, for ₹ 10
per share. On forfeiture, Share Forfeiture Account will be:

a) Credited by ₹ 700 b) Debited by ₹ 200

c) Credited by ₹ 500 d) Debited by ₹ 500

12. Shares cannot be offered to public by: [1]

a) A Public Ltd. Company b) A Private Ltd. Company

c) A Non-Banking Company (NBFC) d) One Person Company

13. When partners’ capital accounts are fixed, which one of the following items will be written in the partner’s [1]
capital account?

a) Loan advanced by partner to the firm b) Loan taken by partner from the firm

c) Partner's drawings d) Additional capital introduced by the partner

in the firm
14. Pari, Manisha and Rajni are partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. The balances of [1]

their fixed capital accounts on 1st April, 2022, were: Pari ₹ 1,00,000, Manisha ₹ 1,00,000 and Rajni ₹ 80,000.
After the accounts for the year ended 31st March, 2023, were prepared, it was discovered that interest on capital
@ 10% per annum had been credited to the partners’ current accounts even though it was not provided in the
partnership deed.
The error in Pari’s capital account / current account will be rectified by:

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 a) Crediting her current account with ₹ 1,200 b) Crediting her capital account with ₹ 1,200

c) Debiting her current account with ₹ 1,200 d) Debiting her capital account with ₹ 1,200
15. Ashu and Basu are partners sharing profits and losses in the ratio of 2 : 1. Chetan is admitted as a new partner [1]
with 1

4
th share in the profits which he acquires equally from Ashu and Basu. The new profit sharing ratio
between Ashu, Basu and Chetan will be:

a) 1 : 1 : 1 b) 13 : 2 : 1

c) 13 : 5 : 6 d) 2 : 13 : 5
OR
Which of the following is not distributed among the partners?

a) General reserve b) Retained earnings

c) Workers profit sharing fund d) Contingency reserve

16. On dissolution of the firm sundry assets were of ₹ 1,17,000. Monu took part of sundry assets at ₹ 72,000 (being [1]
10% less than the book value). Sonu took remaining sundry assets at 80% of the book value. Realisation
Account is to be credited with

a) ₹ 84,000 b) ₹ 1,01,600

c) ₹ 72,000 d) ₹ 1,08,000

17. Akash, Aman and Ajay are partners in a firm in the ratio of 3 : 2 : 1. On 1st April, 2023 they decided to share the [3]
profits in future in the ratio of 7 : 5 : 4. On this date, General Reserve is ₹ 38,000 and profit on revaluation of
assets and liabilities being ₹ 34,000. It was decided that adjustments should be made without altering the figures
in the Balance Sheet. Make adjustments by one single journal entry.
18. Yogesh, Ram and Rohit are partners. Each partner regularly withdrew ₹ 20,000 per month as given below: [3]
a. Yogesh withdrew in the beginning of the month;
b. Ram withdrew in the middle of the month; and
c. Rohit withdrew at the end of the month.

Interest on drawings charged for the year ended 31st March, 2023 was ₹ 15,600, ₹ 14,400 and ₹ 13,200
respectively. Determine the rate of interest charged on drawings.
OR
A, B & C are patterns in a firm sharing profits & losses in ratio of 2 : 3 : 5. Their fixed capitals were ₹ 15,00,000, ₹

30,00,000 & ₹ 60,00,000 respectively. For the year ended 31st March 2023, interest was credited 12% intend of 10%.
Pass the necessary adjustment entry.
19. Intex Ltd. issued 10,000, 10% Debentures of ₹ 100 each at a premium of 10%, payable along with application. [3]
Applications were received for all the debentures issued and allotment was made. Pass the Journal entries.
OR
Bansal Heavy Machine Ltd. purchased machine worth ₹ 3,80,000 from Handa Trader. Payment was made as ₹
50,000 cash and remaining amount by issue of equity shares of the face value of ₹ 100 each fully paid at an issue
price of ₹ 110 each.
Give journal entries to record the above transaction.
20. The average profit for last five years of a firm of Suman and Dhawan was ₹ 6,00,000. The normal rate of return [3]
in a similar business is 10%. Goodwill of the firm is valued at ₹ 40,00,000 calculated by capitalisation of super

Page 4 of 30
 profit. Find out the amount of capital employed by the firm.
21. Naveen Ltd. purchased a running business from Suman Ltd. for a sum of ₹ 22,00,000 by issuing 20,000 fully [4]
paid equity shares of ₹ 100 each at a premium of 10%. The assets and liabilities consisted of the following:
Machinery ₹ 7,00,000; Debtors ₹ 2,50,000; Stock ₹ 5,00,000; Building ₹ 11,50,000 and Bills Payable ₹
2,50,000.
Pass necessary Journal entries in the books of Naveen Ltd. for the above transactions.
22. Ram and Shyam were partners in a firm sharing profits in the ratio of 2 : 3 respectively. They become old and no [4]
one was there to look after their business. Therefore, they decided to dissolve the business and donate the
amount available to an NGO who are providing service for growing trees in urban areas to control pollution. On
31st January, 2014, their balance sheet was as follows
Balance Sheet
as at 31st January, 2014

Liabilities Amt (Rs.) Assets Amt (Rs.)

Creditors 65,000 Land 1,20,000

Bills Payable 35,000 Machinery 65,000

Capital A/ cs Goodwill 10,000

Ram 75,000 Stock 25,000

Shyam 75,000 1,50,000 Debtors 20,000

Cash 10,000

2,50,000 2,50,000

Ram paid the creditors at a discount of 15% and Shyam paid bills payable in full. Assets realised as follows:
Land at 20% less; machinery at Rs. 35,000; stock at 25% less and debtors at Rs. 12,500. Expenses on realisation
Rs. 1,750 were paid by Shyam.
Prepare realisation account, partner’s capital accounts and bank account. Also, identify any one value which the
partners communicated to the society.
23. A Ltd. offered to the public 20,000 shares of ₹ 100 each at a premium of ₹ 20 per share payable as follows: [6]

On Application 30

On Allotment 40 (including premium)

On First Call 25, and

On Final Call 25

Issue was over-subscribed and prorata allotment was made to all applicants.
Final Call was not made and a shareholder holding - shares to whom allotment was made on pro-rata basis failed
to pay the allotment and first call money.
His shares were forfeited and were re-issued at - per share as ₹ 75 paid-up.
You are required to fill in the missing figures in the Cash Book and Journal of the Company.
CASH BOOK

Particulars ₹ Particulars ₹

Page 5 of 30
To Share Application A/c ( ____ × ₹ 30) 7,50,000 By Balance c/d ____

To Share Allotment A/c 6,24,000

To Share First Call A/c ____

To Share Capital A/c ____

____ ____

JOURNAL

Date Particulars L.F. Dr. (₹) Cr. (₹)

Share Application A/c Dr. ____

To Share Captial A/c ____

To Share Allotment A/c

____
(Transfer of application money)

Share Allotment A/c Dr. ____

To Share Capital A/c ____

To Securities Premium A/c

(Allotment money due on - shares @ ₹ - per share including premium of ₹ - ____
per share)

Share First Call A/c Dr. ____

To Share Capital A/c

____
(First Call due on - shares @ ₹ - per share)

Share Capital A/c Dr. ____

Securities Premium A/c Dr. ____

To Share Allotment A/c ____

To Share First Call A/c ____

To Share Forfeiture A/c

30,000
(____ shares forfeited for non-payment of Allotment and First Call)

Share Forfeiture A/c Dr. ____

To Share Capital A/c

____
(Forfeited shares reissued at ₹ ____ per share as ₹ ____ paid-up)

Share Forfeiture A/c Dr. 26,000

To Capital Reserve A/c

26,000
(Gain on ____ reissued shares transferred to Capital Reserve A/c)

OR
A company offered 1,00,000 shares of ₹ 10 each payable as ₹ 3 on application, ₹ 2.50 on allotment, ₹ 2.50 on 1st call

Page 6 of 30
 and ₹ 2 on the final call.
The public applied for 1,52,000 shares. The shares were allotted on a pro-rata basis to the applicants of 1,50,000
shares. All shareholders paid the allotment money excepting one shareholder who was allotted 200 shares. These
shares were forfeited. The first call was made thereafter. The forfeited shares were re-issued @ ₹ 9 per share ₹ 8 paid
up. The final call was not yet made.
You are required to pass journal entries.
24. The following was the Balance Sheet of Basant, Akshat and Surendra sharing profits and losses in the proportion [6]
of respectively:
6 5 3
: :
14 14 14

BALANCE SHEET

Liabilities ₹ Assets ₹

Creditors 18,900 Land & Buildings 50,400

Bills Payable 6,300 Furniture 7,350

Reserve 7,000 Stock 29,400

Capital Accounts: Debtors 26,460

Basant 39,900 Cash at Bank 8,890

Akshat 33,600

Surendra 16,800 90,300

1,22,500 1,22,500

They agreed to take Manish into partnership and give him 1

8
th share of profits on the following terms:
a. That Manish brings in ₹ 16,000 as his Capital.
b. That Furniture be written down by ₹ 920 and stock be depreciated by 10%.
c. That a Provision of ₹ 1,320 be made for outstanding repair bills.
d. That the value of Land and Buildings be written upto ₹ 65,100.
e. That Manish’s share of Goodwill be fixed at ₹ 8,820. Manish brings this amount in Cash.
f. That the Capitals of Basant, Akshat and Surendra be adjusted on the basis of Manish’s Capital by opening
the necessary Current Accounts.
Give the Necessary Journal Entries, the Revaluation Account, Capital Accounts and also the Balance Sheet of
the firm as newly constituted.
OR
Following is the Balance Sheet of Ram, Mohan and Sohan as at 31st March, 2017:

Liabilities ₹ Assets ₹

Sundry Creditors 1,00,000 Tools 30,000

Workmen Compensation Reserve 75,000 Furniture 1,80,000

Capital A/cs: Stock 1,60,000

Ram 2,00,000 Debtors 1,2,000

Mohan 1,00,000 Cash at Bank 80,000

Sohan 1,00,000 4,00,000 Cash in Hand 5,000

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 5,75,000 5,75,000

Ram, Mohan and Sohan shared profit and losses in the ratio of [Link]. Sohan died on 30th June, 2017. As per the
Partnership Deed, the executors of Sohan were to get:
i. Amount standing to the credit of his Capital Account.
ii. Interest on capital which amounted to ₹ 1,50
iii. His share of goodwill ₹ 50,000.
iv. His share of profits from the closing of last financial year till the date of death which was estimated at ₹ 7,500.
Sohan's executors were paid ₹ 14,000 on 1st July, 2017 and the balance in two equal yearly installments from 30th
June, 2018 with interest @ 6% p.a.
Pass necessary Journal entries and draw up Sohan's Capital Account to be rendered to his executors and Sohan's
Executors' Account till it is finally paid.
25. M, N and O were partners in a firm sharing profits and losses equally. Their Balance Sheet on 31st March, 2023 [6]

was as follows:

Liabilities Amount (₹) Assets Amount (₹)

General Reserve 30,000 Plant and Machinery 60,000

Creditors 20,000 Stock 30,000

Capital: Sundry Debtors 95,000

M 70,000 Cash at Bank 40,000

N 70,000 Cash in Hand 35,000

O 70,000 2,10,000

2,60,000 2,60,000

N died on 12th June, 2023. According to the partnership deed, executors of the deceased partner are entitled to:
i. Balance of partner’s capital account.
ii. Interest on capital @ 5% per annum.
iii. Share of goodwill calculated on the basis of twice the average of past three years’ profit and
iv. Share of profits from the closure of the last accounting year till the date of death on the basis of twice the
average of three completed years’ profits before death.

Profits for the years ended 31st March 2021, 2022 and 2023 were ₹ 80,000, ₹ 90,000 and ₹ 1,00,000
respectively. Show the working for deceased partner’s share of goodwill and profits till the date of his death.
Pass the necessary journal entries and prepare N’s Capital Account to be rendered to his executors.
26. Read the text carefully and answer the questions: [6]
Amit Technologies Ltd. issued 5,000; 9% Debentures of ₹ 100 each at a premium of ₹ 20 payable as follows:
i. ₹ 40 including premium of ₹ 10 on application
ii. ₹ 40 including premium of ₹ 10 on allotment
iii. Balance as first and final call.
Applications were received for 5,000 debentures and allotment was made to all the applicants. All the calls were
made, and amounts received.
(a) The amount of money received during application is:

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 a) ₹ 150,000 b) ₹ 2,00,000

c) ₹ 1,00,000 d) ₹ 4,00,000
(b) What amount of the money received in application is transferred to the securities premium reserve
account:

a) ₹ 2,00,000 b) ₹ 1,00,000

c) ₹ 5,00,000 d) ₹ 50,000
(c) ____ is the balance amount per debenture to be received at the first and final call is:

a) ₹ 40 b) ₹ 30

c) ₹ 20 d) ₹ 10
(d) What is the total interest payable on the debentures issued?

a) ₹ 8,000 b) ₹ 45,000

c) ₹ 54,000 d) ₹ 20,000
(e) Above case is an example of

a) Both a and c b) Full subscription

c) Undersubscription d) Oversubscription
(f) What is the total amount received by Amit Technologies Ltd. from the issue of debentures?

a) ₹ 2,40,000 b) ₹ 2,50,000

c) ₹ 2,00,000 d) ₹ 2,80,000
Part B :- Analysis of Financial Statements
27. Which is the following is/are not the objectives of the Financial Statements of a company? [1]
i. It provide information about the economic resources and obligations of a business.
ii. To provide information about the aptitude of the human resources.
iii. To provide information about the cash flow.
iv. To judge the efficiency/effectiveness of the management.
v. To provide information about the activities of the business affecting the society.

a) (ii) only b) (ii) & (iii) only

c) (ii) & (v) only d) (iv) only

OR
Which of the following is not required to be prepared under the Companies Act?

a) Funds Flow Statement b) Balance Sheet

c) Report of Director's and Auditor's d) Statement of Profit and Loss

28. From the following calculate Interest Coverage Ratio: [1]
Net profit after tax ₹ 12,00,000; 10% debentures ₹ 1,00,00,000; Tax Rate 40%.

a) 1.2 times b) 5 times

c) 2 times d) 3 times
29. Paid ₹ 7,00,000 to acquire shares in K.L. Ltd. and received a dividend of ₹ 20,000 after acquisition. These [1]

Page 9 of 30
 transactions will result in

a) Cash used in Investing Activities ₹ b) Cash used in Investing Activities ₹

7,00,000. 6,80,000.

c) Cash generated from Financing Activities ₹ d) Cash generated from Financing Activities ₹
6,80,000. 7,20,000.
OR
Which of the following is added back to net profit to calculate net cash flow from operating activities?

a) Rent Received b) Commission Received

c) Interest Received d) Finance Cost

30. Z Ltd. purchased a building for ₹ 50,00,000 from J. Ltd. paying 40% by the issue of 9% Debentures and the [1]
balance by cheque. The above transaction will result in:

a) Decrease in cash and cash equivalents ₹ b) Cash used in investing activities ₹

20,00,000. 20,00,000.

c) Cash generated from financing activities ₹ d) Cash used in investing activities ₹

20,00,000. 30,00,000.
31. A company has to transfer Rs. 50,000 to Debenture Redemption Reserve out of Surplus, i.e., Balance in [3]
Statement of Profit and Loss. Explain how it will be shown in the financial statements.
32. Calculate Inventory Turnover Ratio from the following: [3]

Cash Revenue from Operations (Cash Sales) 6,00,000

Credit Revenue from Operations (Credit Sales) 4,00,000

Gross Profit 25% on Cost

Closing Inventory: 3 times of Opening Inventory

Opening Inventory: 10% of Cost of Revenue from Operations.
33. From the following Balance Sheet of XX Ltd. prepare a Comparative Balance Sheet as at 31.3.2022: [4]

Particulars 31.3.2022 (₹) 31.3.2021 (₹)

I - EQUITY AND LIABILITIES:

1. Shareholders' Funds:

Share Capital 2,00,00,000 1,00,00,000

2. Non-Current Liabilities:

Long-term Borrowings 50,00,000 25,00,000

3. Current Liabilities:

Trade Payables 20,00,000 10,00,000

Total 2,70,00,000 1,35,00,000

II Assets:

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 1. Non-Current Assets:

Fixed Assets 1,70,00,000 85,00,000

2. Current Assets:

Inventories 1,00,00,000 50,00,000

Total 2,70,00,000 1,35,00,000

OR
From the following ‘statement of profit and loss for the year ended 31st March, 2023, prepare a comparative
statement of profit and loss of Fast Services Ltd.:

Particulars Note No 2022-2023 Amt. (₹) 2021-2022 Amt. (₹)

Revenue from Operations 20,00,000 15,00,000

Other Incomes 10,00,000 4,00,000

Expenses 21,00,000 15,00,000

Rate of income tax was 50%.

34. Following are the Balance Sheets of Sunrise Power Ltd. as at 31st March, 2023 and 2022: [6]
Sunrise Power Ltd.
BALANCE SHEET

Particulars Note No. 31st March, 2023 31st March, 2022

₹ ₹

I. EQUITY AND LIABILITIES

1. Shareholders' Funds

(a) Share Capital 24,00,000 22,00,000

(b) Reserves and Surplus 1 6,00,000 4,00,000

2. Non-Current Liabilities

Long-term Borrowings 4,80,000 3,40,000

3. Current Liabilities

(a) Trade Payables 3,58,000 4,08,000

(b) Short-term Provisions 1,00,000 1,54.000

Total 39,38,000 35,02,000

II. ASSETS

1. Non-current Assets

(a) Tangible 2 21,40,000 17,00,000

(b) Intangible 3 80,000 2,24,000

2. Current Assets

(a) Current Investments 4,80,000 3,00,000

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 (b) Inventories 2,58,000 2,42,000

(c) Trade Receivables 3,40,000 2,86,000

(d) Cash and Cash Equivalents 6,40,000 7,50,000

Total 39,38,000 35,02,000

Notes to Accounts

Particulars 31st March 2023 31st March 2022

₹ ₹

1. Reserves and Surplus

Surplus (Balance in Statements of Profit and Loss) 6,00,000 4,00,000

2. Property, Plant and Equipment

Machinery 25,40,000 20,00,000

Less: Accumulated Depreciation (4,00,000) (3,00,000)

21,40,000 17,00,000

3. Intangible Assets

Goodwill 80,000 2,24,000

Additional Information:
During the year a piece of machinery costing ₹ 48,000 on which accumulated depreciation
was ₹ 32,000 was sold for ₹ 12,000. Prepare cash flow statement.

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 Solutions

Part A:- Accounting for Partnership Firms and Companies

1.
(d) 13 : 14 : 9
Explanation:
Old share = New share + sacrifice share
Gagan = 2/5 + 1/4 = 13/20
Vinod = 1/5 + 2/4 = 14/20
Shubham = 1/5 + 1/4 = 9/20

2.
(d) A is false but R is true.
Explanation:
A is false but R is true.
Assertion is false because in the absence of partnership deed interest on loan provided @ 6 % p.a.

3.
(b) ₹ 7,000
Explanation:
₹ 7,000

OR

(d) Long-term Borrowings of a Company

Explanation:
Long-term Borrowings of a Company

4. (a) Value of fixed asset decreases

Explanation:
There are some rules for the preparation of Revaluation Account :
i. When Increase in assets, revaluation A/c is Credited.
ii. When Decrease in the asset , Revaluation A/c is Debited.
iii. When Increase in liabilities, Revaluation A/c is Debited.
iv. When Decrease in liabilities, Revaluation A/c is credited.
OR

(d) Profit to B = 30,000 and A = 20,000

Explanation:
Profit to B = 30,000 and A = 20,000
Distributed in old ratio.

5.
(b) ₹ 1,500
Explanation:
10 5
Interest on Drawings = 4,000 × 9 × 100
×
12
= ₹ 1,500

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 6.
(c) No interest is paid
Explanation:
No interest is paid

OR

(c) 11,000
Explanation:
19,80,000
Number of debentures issued = 180
= 11,000

7.
(c) ₹ 3,000
Explanation:
The forfeiture account should be credited by amount received on forfeited share:
= 500 × 6 (7 - 1 (premium)) = ₹ 3,000

8.
(c) Retiring Partner’s capital A/c ... Dr.
To Retiring partner’s loan A/c

Explanation:
The following journal entry will be recorded for the amount transferred to the retiring partner’s loan account:
Retiring Partner’s capital A/c ... Dr.
To Retiring partner’s loan A/c
(being partner capital balance transferred to loan account )
OR

(c) Communicating the correct information

Explanation:
Adjustments in accounts of the partnership firm may be needed whenever something relating to the past period has to be
corrected. The main purpose of rectification of past adjustments is to communicate the correct information to the users of the
partnership firm.

9. (a) ₹ 2,400
Explanation:
interest on drawing (1st April, 2022) = 20,000× 100
6
= 1,200
Interest on drawing (1st October, 2022) = 40,000× 6

100
×
6

12
= 1,200
total interest on drawing (31st march, 2023) = 1,200 + 1,200 = 2,400
10.
(b) ₹ 15,000
Explanation:
₹

Amount not paid on First Call: 200 Shares × ₹ 40 8,000

Amount no paid on Second & Final Call: 200 Shares × ₹ 35 7,000

15,000

11.
(c) Credited by ₹ 500

Page 14 of 30
 Explanation:
Credited by ₹ 500
share forfeiture account credited with the amount received from the shareholder
(100 × (8 - 3) ) = ₹ 500

12.
(d) One Person Company
Explanation:
One Person Company

13.
(d) Additional capital introduced by the partner in the firm
Explanation:
Additional capital introduced by the partner in the firm

14. (a) Crediting her current account with ₹ 1,200

Explanation:
Crediting her current account with ₹ 1,200
28000X2/5-10000=1200
15.
(c) 13 : 5 : 6
Explanation:
13 : 5 : 6

OR

(c) Workers profit sharing fund

Explanation:
Workers profit sharing fund as it is for workers

16.
(b) ₹ 1,01,600
Explanation:
Realisation account credited with = amount of asset taken over by Monu and Sonu
= 72,000 + {(1,17,000 - 80,000) × 80%}
= 72,000 + 29,600
= 1,01,600

17. General Reserve 38,000

Profit on Revaluation 34,000

72,000
Old Ratio of Akash, Aman and Ajay = 3 : 2 : 1
New Ratio of Akash, Aman and Ajay = 7 : 5 : 4
Sacrifice or Gain:
Akash = − 3

6
= (Sacrifice) 72,000 × = ₹ 4,500 (Cr.)
7

16
3

48
3

48

Aman = 2

6
−
16
5
=
48
1
(Sacrifice) 72,000 × 1

48
= ₹ 1,500 (Cr.)
Ajay = 1

6
−
16
4
=
4

48
(Gain) 72,000 × 4

48
= ₹ 6,000 (Dr.)
In the books of Firm
JOURNAL
Date Particulars L.F. Dr. ₹ Cr. ₹

Page 15 of 30
 2023
Ajay's Capital A/c Dr. 6,000
April 1

To Akash's Capital A/c 4,500

To Aman's Capital A/c

(The adjustment for general reserve and revaluation of assets and liabilities on change in 1,500
profit sharing ratio)
18. Calculation of Percentage of Interest on Yogesh Drawings
12+1
Average month = 2
= 13

2
= 6.5 month
avg month
Interest on Yogesh Drawings = Drawings × Percentage × 12
P ercentage
15,600 = 20,000 × 12 × 100
×
6.5

12

Percentage = 15600×12×100

20,000×12×6.5

= 12%
Calculation of Percentage of Interest on Ram Drawings
11.5+0.5
Average month = 2
= 12

2
= 6 month
avg month
Interest on Ram Drawings = Drawings × Percentage × 12
P ercentage
14,400 = 20,000 × 12 × 100
×
6

12

Percentage = 14400×12×100

20,000×12×6

= 12%
Calculation of Percentage of Interest on Rohit's Drawings
11+0
Average month = 2
= 11

2
= 5.5 month
avg month
Interest on Rohit Drawings = Drawings × Percentage × 12
P ercentage
13,200 = 20,000 × 12 × 100
×
5.5

12

Percentage = 13200×12×100

20,000×12×5.5

= 12%
OR
TABLE SHOWING ADJUSTMENT
A (₹) B (₹) C (₹) Total

Partners Over credited with 2% interest 30,000 60,000 1,20,000 2,10,000

By recovering this interest from partners, profits will be increased by ₹ 2,10,000 &
42,000 63,000 1,05,000 2,10,000
divided in [Link]

12,000 3,000 15,000

Net effect ____
Cr. Cr. Dr.
Journal
Date Particulars L.F. A (₹) B (₹)

1 April 2023 C’s Current A/c Dr. 15,000

To A’s Current A/c 12,000

To B’s Current A/c

3,000
(Interest excessive charged, now rectified)
19. JOURNAL OF INTEX LTD.
Date Particular L.F. Dr. (₹) Cr. (₹)

Bank A/c Dr. 11,00,000

To Debentures Application and Allotment A/c

11,00,000
(Application money received for 10,000; 10% Debentures)

Debentures Application and Allotment A/c Dr. 11,00,000

Page 16 of 30
 To 10% Debentures A/c 10,00,000

To Securities Premium A/c 1,00,000

(10,000; 10% Debentures allotted at a premium of 10%)

OR
Book of Bansal Heavy Machine Ltd
Date Particulars L.F. Dr. (₹) Cr. (₹)

Machinery A/c Dr. 3,80,000

To Cash A/c 50,000

To Handa Traders 3,30,000

(Machine purchased from Handa Traders paid ₹50,000 in cash immediately)

Handa Trader Dr. 3,30,000

To Equity Share Capital A/c 3,00,000

To security premium A/c 30,000

(3,000 share issued at ₹110; face value of ₹100 each to Handa Traders in consideration of
amount due to him for machinery purchased)
Working Notes:-
i. Number of shares issued
Amount payable
=
Issue price
3,30,000
=
110
= 3,000 shares
20. Goodwill of the firm = Super Profit × 100

Normal rate of return

100
40,00,000 = Super Profit × 10

Super profit = ₹ 4,00,000

Super Profit = Average Profit - Normal Profit
4,00,000 = 6,00,000 - Normal Profit
Normal Profit = ₹ 2,00,000
Normal Rate of Return
Normal Profit = 100
× Capital Employed
2,00,000 = 10

100
× Capital Employed
Capital Employed = ₹ 20,00,000
21. In the books of Naveen Ltd.
JOURNAL ENTRIES
Date Particulars L.F. Dr. (₹) Cr. (₹)

i Machinery A/c Dr. 7,00,000

Debtors A/c Dr. 2,50,000

Stock A/c Dr. 5,00,000

Building A/c Dr. 11,50,000

To Bills Payable A/c 2,50,000

To Suman Ltd. 22,00,000

To Capital Reserve A/c (Balancing Figure)

1,50,000
(Being business purchased from Suman Ltd.)

ii Suman Ltd. A/c Dr. 22,00,000

To Equity Share Capital A/c 20,00,000

To Security Premium A/c 2,00,000

Page 17 of 30
 (Being purchase consideration paid to Suman Ltd.)

22. Dr Realisation Account Cr

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

To Sundry Assets A/c By Sundry Liabilities A/c

Land 1,20,000 Creditors 65,000

Machinery 65,000 Bills Payable 35,000 1,00,000

Goodwill 10,000 By Cash A/c

Stock 25,000 Land (1,20,000-20% of 1,20,000) 96,000

Debtors 20,000 2,40,000 Machinery 35,000

To Ram's Capital (Creditors) (65 ,000 -15% of

55,250 Stock (25,000-25% of 25,000) 18,750
65,000)

To Shyam's Capital A/c (Bills payable) 35,000 Debtors 12,500 1,62,250

By Loss on Realisation
To Shyam's Capital A/c (Expenses on realisation) 1,750
Transferred to

Ram's Capital A/c 27,900

Shyam's Capital A/c 41,850 69,750

3,32,000 3,32,000

Dr. Partners' Capital Account Cr

Ram Shyam Ram Shyam

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

To Realisation A/c (Loss on

27,900 41,850 By Balance b/d 75,000 75,000
realisation)

By Realisation A/c (Liabilities

To Cash/Bank A/c (Final Payment) 1,02,350 69,900 55,250 35,000
discharged)

By Realisation A/c (Expenses paid) --- 1,750

1,30,250 1,11,750 1,30,250 1,11,750

Dr Cash/Bank Account Cr

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

To Balance b/d 10,000 By Ram's Capital A/c (Final Payment) 1,02,350

To Realisation A/c (Assets Realised)

1,62,250 By Shyam's Capital A/c (Final Payment) 69,900
(96000+35000+18750+12500)

1,72,250 1,72,250
Note : Question do not specify who will bear realisation expenses or agreement of partner to settle liability, then if expenses or
liability is paid by the partner then they should be reimbursed.
Goodwill appearing in the Balance Sheet , treated as like any other asset and transferred to Realisation Account at Book Value.
Question is silent about the realisation of Goodwill, it is assumed that Goodwill has not realised any amount.
23. A Ltd.
CASH BOOK
Particulars L.F. ₹ Particulars L.F. ₹

To Share Application A/c (25,000 × ₹ 30) 7,50,000 By Balance c/d 19,10,000

To Share Allotment A/c 6,24,000

Page 18 of 30
To Share First Call A/c (19,200 × ₹ 25) 4,80,000

To Share Capital A/c (800 × ₹ 70) 56,000

19,10,000 19,10,000
JOURNAL
Date Particulars L.F. Dr. Cr.

₹ ₹

Share Application A/c Dr. 7,50,000

To Share Captial A/c 6,00,000

To Share Allotment A/c

1,50,000
(Transfer of application money)

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

To Share Capital A/c 4,00,000

To Securities Premium A/c

(Allotment money due on 20,000 shares @ ₹ 40 per share including premium of ₹ 20 per 4,00,000
share)

Share First Call A/c Dr. 5,00,000

To Share Capital A/c

5,00,000
(First Call due on 20,000 shares @ ₹ 25 per share)

Share Capital A/c (800 × ₹ 75 Called up) Dr. 60,000

Securities Premium A/c (800 × ₹ 20) Dr. 16,000

To Share Allotment A/c 26,000

To Share First Call A/c (800 × ₹ 25) 20,000

To Share Forfeiture A/c

30,000
(800 shares forfeited for non-payment of Allotment and First Call)

Share Forfeiture A/c (800 × ₹ 5) Dr. 4,000

To Share Capital A/c

4,000
(Forfeited shares reissued at ₹ 70 per share as ₹ 75 paid-up)

Share Forfeiture A/c Dr. 26,000

To Capital Reserve A/c

26,000
(Profit on 800 reissued shares transferred to Capital Reserve A/c)
Working Notes:

i. ₹

Total amount due on allotment: 20,000 shares @ ₹ 40 8,00,000

Total amount due on anved on application: 5,000 shares @ ₹ 30 1,50,000

Balance Due 6,50,000

Less Amount received on allotment 6,24,000

Amount not received on allotment 26,000

ii. Calculation of number of shares forfeited:

Total amount forfeited (as per forfeiture entry) is ₹ 30,000

Page 19 of 30
 30,000
As the defaulter has paid only application money, he must have applied for 30
= 1,000 shares
20,000
Number of shares allotted to the applicant of 1,000 shares = 25,000
× 1, 000 = 800 shares

As such, number of shares forfeited are 800.

iii. ₹

Total amount forfeited 30,000

Amount Transferred to Capital Reserve 26,000

Loss on Re-issue 4,000

4,000
Loss on Reissue per share = 800
= ₹ 5 per share.

As such, the shares must have been reissued at ₹ 75 - ₹ 5 = ₹ 70 per share. 26,000

OR
JOURNAL
Date Particulars L.F. Dr. (₹) Cr. (₹)

Bark A/c Dr. 4,56,000

To Share Application A/c

(Application money received on 1,52,000 shares @ ₹ 3 per 4,56,000
share)

Share Application A/c Dr. 4,56,000

To Share Capital A/c 3,00,000

To Share Allotment A/c 1,50,000

To Bank A/c
6,000
(Application money adjusted)

Share Allotment A/c Dr. 2,50,000

To Share Capital A/c

2,50,000
(Allotment money due on 1,00,000 shares @ ₹ 2.50)

Bank A/c Dr. 99,800

Calls in Arrears A/c Dr. 200

To Share Allotment A/c

1,00,000
(Allotment money received on 99,800 shares)

Share Capital A/c (200 × ₹ 5.50) Dr. 1,100

To Calls in Arrears A/c 200

To Share Forfeiture A/c

900
(Forfeiture of 200 shares for non-payment of allotment money)

Share 1st Call A/c Dr. 2,49,500

To Share Capital A/c

2,49,500
(First call money due on 99,800 shares @ ₹ 2.50)

Bank A/c Dr. 2,49,500

To Share 1st Call A/c

2,49,500
(First call money received on 99,800 shares @ ₹ 2.50)

Page 20 of 30
 Bank A/c Dr. 1,800

To Share Capital A/c 1,600

To Securities Premium A/c

200
(Re-issue of 200 shares @ ₹ 9 per share; ₹ 8 paid up)

Share Forfeiture A/c Dr. 900

To Capital Reserve A/c

900
(Transfer of profit on reissue)
Working Notes:
i. Excess amount received from the holder of 200 shares on application:
The shareholder who has been allotted 200 shares must have applied for more shares.
If shares allotted were 1,00,000, shares applied for were = 1,50,000
1,50,000
∴ If shares allotted were 200, shares applied for were = 1,00,000
× 200 = 300 shares
Excess application money received from him:
300 shares - 200 shares = 100 shares × ₹ 3 = ₹ 300

ii. ₹

Amount due on allotment on these shares = 200 shares × ₹ 2.50 500

Less: Excess received on these shares on application (300)

Amount not received on allotment 200

iii. Amount received on allotment:
Total amount due on allotment = 1,00,000 shares × ₹ 2.50 2,50,000

Less: Excess received on application (1,50,000)

1,00,000

Less: Amount not received on allotment (200)

Net amount received on allotment in cash 99,800

24. IN THE BOOKS OF THE FIRM

JOURNAL ENTRIES
Amount Amount
Date Particulars L.F.
Dr. Cr.

General Reserve A/c Dr. 7,000

To Basant's Capital A/c 3,000

To Shaym's Capital A/c 2,500

To Surendra's Capital A/c 1,500

(Being general reserve transfer to old partner's capital account in old profit sharing ratio)

Revaluation A/c Dr. 5,180

To Furniture A/c 920

To Stock A/c 2,940

To Outstanding Repairs A/c 1,320

(Being decrease in the value of assets and provision made of outstanding repair recorded
through revaluation account)

Land and Building A/c Dr. 14,700

To Revaluation A/c 14,700

Page 21 of 30
 (Being increase in the value of land and building recorded through revaluation account)

Revaluation A/c Dr. 9,520

To Basant's Capital A/c 4,080

To Shaym's Capital A/c 3,400

To Surendra's Capital A/c 2,040

(Being profit on revaluation transfer to old partners capital account in old profit sharing
ratio)

Bank A/c Dr. 24,820

To Manish's Capital A/c 16,000

To Premium for Goodwill A/c 8,820

(Being capital and goodwill introduced by Manish through bank)

Premium for Goodwill A/c Dr. 8,820

To Basant's Capital A/c 3,780

To Shaym's Capital A/c 3,150

To Surendra's Capital A/c 1,890

(Being goodwill credited to old partner's capital account in old profit sharing ratio)

Basant's Capital A/c Dr. 2,760

To Basant's Current A/c 2,760

(Being excess capital credited to the current account)

Shaym's Capital A/c Dr. 2,650

To Shaym's Current A/c 2,650

(Being excess capital credited to the current account)

Surendra's Current A/c Dr. 1,770

To Surendra's Capital A/c 1,770

(Being excess capital credited to the current account)

Revaluation Account
Dr. Cr.

Particulars Amount Particulars Amount

To Furniture A/c 920 By Land and Building A/c 14,700

To Stock A/c 2,940

To Outstanding Repairs A/c 1,320

Capital Account balances:

Basant 4,080

Akshat 3,400

Surendra 2,040 9,520

14,700 14,700
Partner's Capital Account

Page 22 of 30
 Dr. Cr.

Particulars Basant Akshat Surendra Manish Particulars Basant Akshat Surendra Manish

To Balance c/d 50,760 42,650 22,230 16,000 By Balance b/d 39,900 33,600 16,800 ____

By Reserve A/c 3,000 2,500 1,500 ____

By Revaluation A/c 4,080 3,400 2,040 ____

By premium for
3,780 3,150 1,890 ____
Goodwill A/c

By F's Current A/c ____ ____ ____ 16,000

50,760 42,650 22,230 16,000 50,760 42,650 22,230 16,000

To Current A/c
2,760 2,650 ____ ____ By Balance b/d 50,760 42,650 22,230 16,000
(Balancing figure)

By Current A/c
To Balance c/d 48,000 40,000 24,000 16,000 1,770
(Balancing figure)

50,760 42,650 24,000 16,000 50,760 42,650 24,000 16,000

Partner's Current Account
Dr. Cr.

Particulars Basant Akshat Surendra Particulars Basant Akshat Surendra

To Capital A/c ____ ____ 1,770 By Capital A/c 2,760 2,650 ____

To Balance c/d 2,760 2,650 ____ By Balance c/d 1,770

2,760 2,650 1,770 2,760 2,650 1,770

Balance Sheet
Dr. Cr.

Liabilities Amount Assets Amount

Bills Payable 6,300 Cash at Bank 33,710

Creditors 18,900 Debtors 26,460

Outstanding Repairs 1,320 Stock 26,460

Basant's Current A/c 2,760 Furniture 6,430

Akshat's Current A/c 2,650 Land & Building 65,100

Capital Account balances: Surendra's Current A/c 1,770

Basant 48,000

Akshat 40,000

Surendra 24,000

Manish 16,000 1,28,000

1,59,930 1,59,930
Working Notes.1
Manish's Share = 1

Balance of profit for other partners = 1 - 1

8
=
7

Basant's Ratio = 7

8
×
6

14
= 3

Akshat's Ratio = 7

8
×
5

14
= 5

16
7 3 3
Surendra's Ratio = 8
×
14
= 16

Manish's Ratio = 1

Page 23 of 30
New Ratio = 3

8
:
5

16
:
3

16
:
1

New Ratio = [Link]

16
=[Link]
OR
IN THE BOOKS OF THE FIRM
JOURNAL ENTRIES
Date Particulars L.F. Dr. (₹) Cr. (₹)

2017

June
Profit and Loss Suspense A/c Dr. 1,500
30
To Sohan's Capital A/c 1,500

(Being the interest credited to Sohan's Capital Account up to 30th June

June
Ram's Capital A/c Dr. 25,000
30
Mohan's Capital A/c Dr. 25,000

To Sohan's Capital A/c 50,000

(Being Sohan's share of goodwill credited to his Capital Account)

June
Profit and Loss Suspense A/c Dr. 7,500
30
To Sohan's Capital A/c Dr. 7,500

(Being the share of profit credited)

June
Workmen Compensation Reserve A/c Dr. 75,000
30
To Ram's Capital A/c 30,000

To Mohan's Capital A/c 30,000

To Sohan's Capital A/c 15,000

(Being Workmen Compensation Reserve credited to Old Partners' Capital Accounts)

June
Sohan's Capital A/c Dr. 1,74,000
30
To Sohan's Executors' A/c 1,74,000

(Being the transfer of balance in Sohan's Capital Account to Sohan's Executors'

Dr.
Account)

July 1 Sohan's Executors' A/c Dr. 14,000

To Bank A/c 14,000

(Being the amount paid to Sohan's Executors)

SOHAN'S CAPITAL ACCOUNT
Dr. Cr.

Date Particulars ₹ Date Particulars ₹

2017 2017

June 30 To Sohan's Executors' A/c 1,74,000 April 1 By balance b/d 1,00,000

June 30 By Profit and Loss Suspense A/c 1,500

June 30 By Ram's Capital A/c 25,000

Page 24 of 30
 June 30 By Mohan's capital A/c 25,000

June 30 By Profit and Loss Suspense A/c 7,500

June 30 By Workmen Compensation Reserve A/c 15,000

1,74,000 1,74,000
SOHAN'S EXECUTORS' ACCOUNT
Dr. Cr.

Date Particulars ₹ Date Particulars ₹

2017 July 1 To Bank A/c 14,000 2017 June 30 By Sohan's Capital A/c 1,74,000

By Interest A/c
2018 March 31 To Balance c/d 1,67,200 2018 March 31 7,200
[(₹ 1,74,000 - ₹ 14,000) × 6

100
×
9

12
)

1,81,200 1,81,200

To Bank A/c
2018 June 30 89,600 2018 April 1 By Balance b/d 1,67,200
(₹ 80,000 + ₹ 7,200 + ₹ 2,400)

By Interest A/c
2018 June 30 2,400
(₹ 1,60,000 × 6

100
×
3

12
)

By Interest A/c
2019 March 31 To Balance c/d 83,600 2019 March 31 3,600
(₹ 80,000 × 6

100
×
9

12
)

1,73,200 1,73,200

To Bank A/c
2019 June 30 84,800 2019 April 1 By Balance b/d 83,600
(₹ 80,000 + ₹ 3,600 + ₹ 1,200)

By Interest A/c
2019 June 30 1,200
(₹ 80,000 × 6

100
×
3

12
)

84,800 84,800
Notes:
i. Total amount due to Sohan's Executors ₹ 1,60,000 is payable in two equal annual installments. Therefore, yearly instalment =
₹ 1,60,000/2 = ₹ 80,000 plus interest.
25. In the books of M, N and O
JOURNAL
Date Particulars L/F Dr. (₹) Cr. (₹)

2023
June General Reserve A/c (30,000 × 1

3
) Dr. 10,000
12

To N's Capital A/c

10,000
(Being share of general reserve given to N)

Interest on Capital A/c Dr. 700

To N's Capital A/c

700
(Being share of general reserve given to N)

M's Capital A/c (60,000 × 1

2
) Dr. 30,000

O's Capital A/c (60,000 × 1

2
) Dr. 30,000

To N's Capital A/c 60,000

Page 25 of 30
 (Being amount of goodwill adjusted in gaining ratio)

Profit and Loss Suspense A/c Dr. 12,000

To N's Capital A/c

12,000
(Being N's share of profit transferred to his capital account)

N's Capital A/c Dr. 1,52,700

To N's Executor's A/c

1,52,700
(Being amount due to N transferred to N's executor's account)
N's Capital A/c
Date Particulars Amount (₹) Date Particulars Amount (₹)

2023 June 12 To N's Executor's Account A/c 1,52,700 2023 By Balance b/d 70,000

June 12 By General Reserve A/c 10,000

June 12 By Interest on Capital A/c 700

June 12 By M's Capital A/c 30,000

June 12 By O's Capital A/c 30,000

June 12 By Profit and Loss Suspense A/c (Profit) 12,000

1,52,700 1,52,700
Working Notes:
Whenever a partner exits a partnership, the books of accounts of such a firm have to be settled. The outgoing partner or his legal
representatives have to be paid their dues. This means a revaluation of assets and liabilities must be done. Goodwill is to be
calculated at average profit method and interest on capital is also to be calculated.
i. Calculation of Interest on N's Capital
5 73
Interest on N's capital = 70, 000 × ×
100 365
= ₹ 700
ii. Calculation of Goodwill
3 years total profit = 80,000 + 90,000 + 1,00,000 = ₹ 2,70,000
2,70,000
Average profit = 3
= ₹ 90,000
Firm's Goodwill = Average profit × Number of Year's Purchase = 90,000 × 2 = ₹ 1,80,000
N's share of goodwill = 1, 80, 000 × = ₹ 60,0001

iii. Calculation on N's Share of Profit

N's share of profit = (90,000 × 2)× 73

365
×
1

3
= ₹ 12,000
26. Read the text carefully and answer the questions:
Amit Technologies Ltd. issued 5,000; 9% Debentures of ₹ 100 each at a premium of ₹ 20 payable as follows:
i. ₹ 40 including premium of ₹ 10 on application
ii. ₹ 40 including premium of ₹ 10 on allotment
iii. Balance as first and final call.
Applications were received for 5,000 debentures and allotment was made to all the applicants. All the calls were made, and
amounts received.
(i) (b) ₹ 2,00,000
Explanation:
5000 × ₹ 40 = ₹ 2,00,000
(ii) (d) ₹ 50,000
Explanation:
5000 × ₹ 10 = ₹ 50,000

Page 26 of 30
 (iii) (a) ₹ 40
Explanation:
₹ 40
(iv) (b) ₹ 45,000
Explanation:
₹50,000×9
100
= ₹ 45,000
(v) (b) Full subscription
Explanation:
Full subscription
(vi) (a) ₹ 2,40,000
Explanation: ₹ 2,40,000
Part B :- Analysis of Financial Statements
27.
(c) (ii) & (v) only
Explanation:
(ii) & (v) only

OR
(a) Funds Flow Statement
Explanation:
as all other are part of annual report of the company
28.
(d) 3 times
Explanation:
P rof it bef ore interest and tax 30,00,000
Interest coverage ratio = = 10,00,000
= 3 Times
Interest on long term debt

12,00,000
profit before interest and tax = 1−0.4
+ 10,00,000 = 30,00,000
Interest on long term debt = 1,00,00,000 × 10% = 10,00,000

29.
(b) Cash used in Investing Activities ₹ 6,80,000.
Explanation:
Cash used in Investing Activities ₹ 6,80,000.
= 7,00,000(amount paid for purchase of share) - 20,000 (dividend received on share)
= 6,80,000

OR

(d) Finance Cost

Explanation:
Finance Cost

30.
(d) Cash used in investing activities ₹ 30,00,000.
Explanation:
Cash used in investing activities ₹ 30,00,000.

31. Net profit for the current year will be transferred and added to the existing balance of Surplus under Reserves and Surplus.
Rs.50,000 transferred to D.R.R. will be shown as appropriation out of Surplus which will be added to existing balances (if any)
under DRR.

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 Balance under Surplus and D.R.R. will be added and shown against Reserves and Surplus.
32. Gross Profit is 25% on cost. Therefore, goods costing ₹ 100 is sold for ₹ 125.
Hence, if Revenue from Operations are ₹ 125,
Cost of Revenue from Operations = ₹ 100
If Revenue from Operations are ₹ 10,00,000
Cost of Revenue from Operations = × 10, 00, 000 = ₹ 8,00,000
100

125

Opening Inventory is 10% of cost of Revenue from Operations

Opening Inventory = × 8, 00, 000 = ₹ 80,000
10

100

Closing Inventory = 80,000 × 3 = ₹ 2,40,000

Opening Inventory+Closing Inventory
Average Inventory = 2
80,000+2,40,000
= 2
= ₹ 1,60,000
cost of Revenue from operations
Inventory Turnover Ratio =
Average Inventory
8,00,000
= 1,60,000
= 5 times
33. XX Ltd.
Comparative balance sheet
as at 31st March, 2021 and 2022

31st March 31st March Absolute change Percentage Change

Particulars
2021 (A) 2022 (B) (C = B - A) (D = × 100)
C

I. Equity and Liabilities

1. Shareholder's funds:

Share capital 1,00,00,000 2,00,00,000 1,00,00,000 100

2. Non Current Liabilities

Long term Borrowing 25,00,000 50,00,000 25,00,000 100

3. Current Liabilities

Trade Payable 10,00,000 20,00,000 10,00,000 100

Total 1,35,00,000 2,70,00,000 1,35,00,000 100

II. Assets

1. Non Current Assets:

Fixed Assets 85,00,000 1,70,00,000 85,00,000 100

2. Current Assets:

Inventories 50,00,000 1,00,00,000 50,00,000 100

Total 1,35,00,000 2,70,00,000 1,35,00,000 100

OR
COMPARATIVE STATEMENT OF PROFIT & LOSS
for the years ended 31st march, 2022 and 2023
Note 31st March, 31st March, Absolute Change Percentage Change
Particulars
No. 2022 (₹) 2023 (₹) (Increase/Decrease) (₹) (Increase/Decrease) (%)

(A) (B) (C= B - A) (D= C

× 100)
A

Revenue From
I. 15,00,000 20,00,000 5,00,000 33.33
Operation

II. Other Income 4,00,000 10,00,000 6,00,000 150.00

Total Revenue (I
III. 19,00,000 30,00,000 11,00,000 57.89
+ II)

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 IV. Expenses 15,00,000 21,00,000 6,00,000 40.00

Profit Before Tax

V. 4,00,000 9,00,000 5,00,000 125.00
(III - IV)

VI. Tax (50%) 2,00,000 4,50,000 2,50,000 125.00

Profit after Tax

VII. 2,00,000 4,50,000 2,50,000 125.00
(V - VI)
34. Cash Flow Statement
for the year ending 31st March,2023
Particulars ₹ ₹

I. Operating Activities:

Net Profit (before Tax and Extraordinary Items) 2,00,000

(+) Depreciation on Machinery [W.N.(ii)] 1,32,000

(+) Loss on Sale of Machinery 4,000

(+) Goodwill Amortized 1,44,000 2,80,000

Operating Profit before Change in Working Capital 4,80,000

(-) Increase in Current Assets and Decrease in Current Liabilities

Decrease in Trade Payables (50,000)

Decrease in Short-term Provisions (54,000)

Increase in Inventories (16,000)

Increase in Trade Receivables (54,000) (1,74,000)

Net Cash Flow from Operating Activities (I) 3,06,000

II. Investing Activities :

Machinery Purchased (5,88,000)

Machinery Sold 12,000 (5,76,000)

Net Cash Flow used in Investing Activities (II) (5,76,000)

III. Financing Activities :

Issue of Shares 2,00,000

Loan Taken 1,40,000 3,40,000

Net Cash Flow from Financing Activities (III) 3,40,000

Net Cash Flow [ I + II + III ] 70,000

(+) Opening Cash and Cash Equivalent (Cash 7,50,000 + Current Investments 3,00,000) 10,50,000

Closing Cash and Cash Equivalent (Cash 6,40,000 + Current Investments 4,80,000) 11,20,000
Working Notes :
(i) Machinery Account
Particulars ₹ Particulars ₹

To Balance b/d 20,00,000 By Provision for Depreciation A/c 32,000

To Bank A/c (Purchase) 5,88,000 By Bank A/c (Sale) 12,000

(Balancing figure) By Statement of Profit and Loss (Loss) 4,000

By Balance c/d 25,40,000

25,88,000 25,88,000

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 (ii) Provision for Depreciation Account
Particulars ₹ Particulars ₹

To Machinery A/c (Depreciation on Machinery sold) 32,000 By Balance b/d 3,00,000

4,00,000 By Depreciation A/c (Statement of Profit and Loss) 1,32,000

(Balancing figure)

4,32,000 4,32,000

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