10, Accountancy - XII Practice Paper 1 (for CBSE Exam. 2019) Part-A Six friends started a partnership business by investing €2,00,000 each, They decided to share profit equally. Name the terms by which they will be called individually and collectively. @ ‘A, Band C were partners in a firm sharing profits in the ratio of 3 : 2 : 1, B was guaranteed a profit of r2,00,000, During the year the firm eared a profit of €84,000. Calculate the net amount of Profit / Loss transferred to the capital accounts of A and C. (1) What is the treatment of 'Sale of Periodicals’ in the financial statements of a not-for-profit organisation? a , P and S were partners in a firm sharing profits in the rato of 4: 3: 3. On August’, 2018,> died. His 20 % share was acquired by H and remaining by S. Calculate the new profit sharing ratio. a How is dissolution of partnership different from dissolution of partnership firm? a Why are irredeemable debentures also known as perpetual debentures? @ P, Q and R were partners sharing profits inthe ratio of 2: 2 : 1. The firm clasés ité books on March'31 every year. On June 30, 2018, R died, The following information is provided on R's death: (i) Balance in his capital account in the beginning of the year was 6, 50,000: (i) He withdrew e60,000 on May 15, 2018 for his personal use, (On the date of death of a partner the partnership deed provided for the following: (2) Interest on capital @ 10 % per annum, (b) Interest on drawings @ 12 % per annum. (© His share in the profit of the firm til the date of deathy to be calculated on the basis of the rate of Net Profit on Sales of the previous year, which was 25 9, The Sales of the firm till June 30, 2018 were 26,00,000, Prepare R's Capital Account on his death to be presented to his executors. @) On April 1, 2015, XY Limited issued «9,00,000 10% debentures at a discount of 9%. The debentures were to be redeemed in three equal annual instalments starting from March 31, 2017. Prepare ‘Discount on Issue of Debenture Account’ for the first two years. Also show your workings clearly @) \V K Limited purchased machinery from Madera Equipment Manufacturers Limitede-Thé Company paid the vendors by issue of ‘some equity shares and debentures and:the:balance through an aceeptance in thelr favour payable after three months. The accountant of the company, while Journaling the above mentioned transactions, left some items blank. You are required to fill in the blanks. @) VK Limited Journal Date _ [Pareles LE_[ be Amount @ |G: Amount @ Machinery Account| De a (Purchased machinery for €7,00,000 from Modern Equipment Manufacturers Limited) Modern Equipment Manufacturers 1 ATE De Loss an isu of 994 Debentures Account Or To te “To SeGurtes Premium Reserve Account ‘ToPremium on Redemption of Debentures AIC (issued e1,00,000 9 56 debentures ata discount of 10% redeemable ata premium of 10 ‘Sh and $0,000 equity shares af £10 each issued at premium of 15 96) oa To « ) Caletiate the amount of stationery to be debited to Income and Expenditure A/c: @ Details ‘Amt. ‘Cash purchases oF sationery 70,000 Payment to creditors of stabonery 61,000, Book value of stationery sold 20,000 Creditors fo stationery on 1.42018 7,000 Creditors for stationery on 31.3.2019 14,750 Stationery on 1.42018, 20,000 Stationery on 31.32019 25,000 ‘Advance pad for stationery to creditors on 31.3.2019 41,000.11, E, Fand G were partners in a firm sharing profits in the ratio of 2 : 2: 1. On March 31, 2018, their firm was dissolved, On the date of dissolution, the Balance Sheet ofthe frm was as follows: Balance Sheet as at March 31, 2018 Liabilities © Assets © | Copia Te capa 300 ¢ 1,30,000 Profit & Loss Account 10,000 F ‘nono 2,30,00 | Lan & Bulking 3,00,000 creiors 5,00 | Future 50,000 Outstanding Expenses 17,000 | Machinery 50,000 Debtors 36,500 Bank 5,000, 252,000 2;52,000 | F was appointed to undertake the process of dissolution for which h@ was allowed a remuneration of 5,000, F agreed to bear the dissolution expenses. Assets realized as follows: () The Land & Building was sold for #1,08,900. (i) Furniture was sold at 25% of book value. (i) Machinery was sold as scrap for 29,000. (iv) Al the Debtors were realized at fll value. Creditors were payable on an average of 3 months from th daté of dissolution:\On discharging the Creditors on the date of dissolution, they allowed a discount of 5%. Pass necessary Journal entries for dissolution in the bookS of the firm, “ 12, A, B& Cwere partners in a firm sharing profits & losses in the ratio of 3: 2: 1. On March 31, 2018, their Balance Sheet was as follows: Balance Sheet as at March 31, 2018 Liabilities © ‘Assets © ] pak Fe hess 150000 § Current assets 35,000 8 c 120,900 Reserve Fund ‘000 Crecors 77000 Employees Provident Fund 5,000 2,15,000 215,000 | From April 1, 2018, they detided to share future profits equally For this purpose the followings were agreed upon: (Goodwill of the firm was\valued at x3,00,000. (i) Fixed Assets will be depreciated by 10%. (li) Capitals of the partners will be in proportion to their new profit sharing ratio. For this purpose, Current Accounts will be opened. Pass necessafy Journal entries forthe abave transactions in the books of the firm. @ 13, Prepare Income and Expenditure Account and Balance Sheet as on December 31, 2018: Receipt and Payment Account of Indian Sports Club for the year ending December 31, 2018 Receipts ant ©, Payments ‘ant, To Balance b/d 7,890 | By Salary 11,000 ToSubscriptions 52,000 | By Electric charges 5,500 ToLife membership fee 2,200 | By Billard Table 17500 “To Entrance fee 3,200 | By Office expenses 4100 ‘To Tournament func 26,000 | y Printing & Stationery 2,300 “To Locker Rent 41,250 | By Tournament expenses 18,500, To Sale of old sports equipment (Costing €2,200) 2,500 | By Repair of ground 2,000 To Sale of old newspaper 750 | By Furniture purchased 7,700 To Legacy 137,500 | By Sports equipment 12,000 By Cash in hand 12,690 By Cash at bank 10,000 By Fixed deposit (on 1.10.2018 for 103% pa) 30,000 733,290, 733,290 ‘Other Information: Subscription outstanding was on December 31, 2017 #1,200 and ®3,200 on December 31, 2018, Locker rent outstanding on December 31, 2018 «250. Salary outstanding on December 31, 2018 e000. (On January 1, 2028, club has Builing £36,000, furniture £12,000, Sports equipments £17,500. Depreciation charged on these items @ 1036 (including Purchase).14, L, Mand N are partners in a firm sharing profits & losses in the ratio of 2: 3:5. On April 1, 2017 their fixed capitals were €2,00,000, ¢3,00,000 and €4,00,000 respectively. Their partnership deed provided for the following: () Interest on capital @ 9% per annum. (i) Interest on Drawings @ 12% per annum, {il) Interest on partners’ loan @ 12% per annum, (On July 1, 2017, L brought z1,00,000 as additional capital and N withdrew x1,00,000 from fis Capital, During the year L, M and N withdrew £12,000, 218,000 and «24,000 respectively for their personal use. On January 1, 2018 the firm obtained a Loan of +1,50,000 from M. The Net profit ofthe firm for the year ended March 31, 2018 after charging interest on M's Loan was 85,000 Prepare Profit & Loss Appropriation Account and Partners’ Capital Accounts. © 15, Himanshu and Vikrant are partners in a firm and share profits equally. Their Balance Sheet as on March 31, 2018 is as follows: abilities wo Rises @ Capials Fie ASS 3,60 000 Himanshu 2,00,000, Current Assets ‘40,000 Vikrant 140,000 340,000 Creditors ‘0,000 00,000. 400,000 During the year 2017-18, Himanshu's Drawings were +30,000.and,Vikrant’s Drawings were 40,000. During the year 2017-18 the firm eared profits of €1,00,000. While distributing profits for the year 2017-18, interest on capital (@5 % per annum and interest on drawings @ 12 % per annum were ignored. Showing your workings clearly, pass necessary rectifying entry. ©) 16. ZX Limited invited applications for issuing 5,00,000 Equity shares of #10 each payable at a premium Of e10 each payable with Final call. Amount per share was payable as follows ‘On Application 2 ‘On Allotment 3 ‘On First Call 2 ‘On Second & Final Cal Balance Applications for 8 00,000 shares were fFecelveds Applications for 50,000 shares were rejected and the application money was refunded, Allotment was made to the remaining applicants as follows: Category Number of Shares Applied Number of Shares Allotted 1 200,000, 150,000 1 5,50,000, 3,50,000 Excess application money received with applications Was adjusted towards sums due on allotment, Balance, if any was adjusted towards future calls. Govind, a shareholder belonging to category 1, to whom 1,500 shares were allotted, paid his entire share money with allotment. Manohar belonging to category II, who had applied for 11,000 shares failed to pay ‘Second & Final Call money’. Manchars shares were forfeited after the final cal. The forfeited shares were relssued at €10 per share as fully paid up. ‘Assuming that the company maintains *Calls in Advance Account” and "Calls in Arrears Account’, pass necessary Journal entries for the above transactions in the books of ZX Limited, @) oR (2) AX Limited forfeited 6,000 shares of ¢10 each for non-payment of Fist cal of «2 per share. The Final cal of «3 per share was ‘yt to be made. The Final call was made after Forfeited of these shares. Of the forfeited shares, 4,000 shares were reissued ‘ate9 per share as fully pad up. Assuring that the company maintains Calls in Advance Account! and Calls in Arrears Account, prepare "Share Forfeited Account” in the books of AX Limited. (b), BG Limited issued 2,00,000 equity shares of #20 each at a premium of tS per share. The shares were allotted in the proportion of 5: 4 of shares applied and alloted to all the applicants. Deepak, who had applied for 900 shares, failed to pay Allotment money of #7 per share including premium) and on his failure to pay ‘Fist & Final Call’ of «2 per share, his shares were forfeited. 400 of the forfeited shares were reissued at €15 per share as fully paid up Showing your working clearly, pass necessary Journal entries for the Forfeited and relssue of Deepak’s shares in the books of 8G Limited, The company maintains ‘Call in Arrears’ Account’ (©) ML Limited forfeited 1,200 shares of ¢10 each allotted to Ravi for Non-payment of ‘Second & Final Call’ of eS per share (including premium of x2 per share), The forfeited shares were reissued for 210,800 as fully paid up. Pass necessary Journal entries for reissue of shares in the books of ML Limited,v7, 18, 19, 20. 2 ‘A, B & C were partners in a firm sharing profits & losses in proportion to their fixed capitals. Their Balance Sheet as at March 31, 2018 was as follows: Uabiities w ass o_] capil Bank 21000 a 500,000 Stock 9,000 8 3,00,000 Debtors 1 c 200.000 10,00,000 | Less: Provision for Doubtful Debts 1.500 13,500 General Reserve 75,000 | NS Loan 35,500 Creditors 23,000 | Plant & Machinery 200,000 Outstanding Salary 7,000| Land & Building 600,000 BS Loan 15,000 | Profit & Loss Account (Forte year ending 3ist March 2018) 241,000 11,20,000 20,000 Ir the Gate OF abave Balance SHeRt, Teed Tron Whe Tra OF Ere ToTOWing TEAMS () Goodwil of the firm willbe valued at two years purchase of the Average Profits of last three years. The Profits for the year fended March 31, 2016 & March 31, 2017 were 00,000 & €3,00,000 respectively (i) Provision for Bad Debts will be maintained at 5% of the Debtors. (ii) Land & Building willbe appreciated by ©90,000 and Plant & Machinery Will be reduced to e1,80,000, (iv) A agreed to repay his Loan, (v) The loan repaid by A was to be utlized to pay C. The balance 6fthe amount payable tolCWas transferred to his Loan Account bearing interest @ 12% per annum. Prepare Revaluation Account, Partners’ Capital Accounts, Partners! Current Accounts and the Balance Sheet of the reconstituted firm, @) OR P & K were partners in a firm. On March 31, 2018 their Balance Sheet was as follows: Liabilities @ eset @ Capa Bank 18,000 P 3,00,000 Stock 19,000 k 200,000 500,000 | Datars 22,000 General Reserve 100,009 Less: Provision for Doubt‘ Debts 1.500 20,500 Creditors '50,000 | Unexpired Insurance 5,000 Outstanding Expenses 8,000 | Shares in x Limited 65,000 Loan 420,000 )Plant & Machinery 248,500 Profit & Loss Account (Prof for 2017-18) '55,000] Land & Buicing 560,000 33,000 3,33,000 (On April 1, 2018, they decided to admit C as @ new partner for 1/4th share in profits on the following terms: (CS Loan will be converted into his capital (i) C will bring his share of goodwill premium by ¢heque. Goddwill the firm will be calculated on the basis of Average Profits of previous three years. Profits forthe year ended March 31, 2016 and March 31, 2017 were 55,000 and e1,00,000, respectively, (ii) 10% depreciation will be charged @h Plant & Machinery and Land & Building will be appreciated by 5%. (iv) Capitals of P & will be adjusted on the basis C’s capital. Adjustments be done through bank and in case required overdraft faclity be availed. Pass necessary Journal entries on C’s admission. ® Part B Give any two examples of cash inflows from operating activities other than cash receipts from sale of goods & rendering of services: ( P P Limited is Share Boker Company. 6 G Limite is engaged in manufacturing of packaged food. PP Limited purchased 5,000 equity shares of t100 each of Savita Limited. GG Limited also purchased 10,000 equity shares of ¢100 each of Savita Limited Forthe purpose of preparing their respectve Cash How Statements, under which category ofactities the purchase of shares wil be dasiied by PP Limited and G G Limited? @ For the financial year ending March 31, 2018, the accountant ofa company isnot certain about the presentation ofthe following items under relevant Major Heads & Sub Heads f any, in its Balance Sheet (i) Securities Premium Reserve (i) Calls in Advance (i) Stores & Spares {@) Advice the accountant of the company under which Major Heads and Sub Heads if any, he should present the above items in the Balance Sheet ofthe company, (b) How will Stores & Spares be treated in ratio analysis? (4) For the year ended March 31, 2018, Net Profit after tax of K X Limited was 6,00,000. The company has +40,00,000 12% Debentures of 100 each, Calculate Interest Coverage Ratio assuming 40% tax rate. State is significance aso, Will the Interest Coverage Ratio change if curing the year 2018-19, the company decides to redeem debentures of ¢5,00,000 and expects to maintain the same rate of Net Profit and assume that the Tax rate will not change. (4) 422, 23, Following is the Statement of Profit & Loss of X L Limited for the year ended March 31, 2018: ‘Statement of Profit & Loss for the year ended March 31, 2018 Particulars Notes to Accounts 2056-17 Amount 2017-18 Amount (@® Revenue from Operations 50,00,000 80,00,000, Expenses: (@)_ Employee Beneft Expenses: Revenue trom Operations (©) Other Expenses 10,00,000 12,00,000 Tax Rate 40.9% Prepare Comparative Statement of Profit & Loss of XL Limited, a From the following Balance Sheet of Ajanta Limited as on March 31, 2018, prepare a Cash Flow Statement: Particulars Note No. 33-2007 1. Equity and Liabilities (2) Shareholders Funds (@) Equity Share Capital 10,00,000 (6) Reserves and Surplus 1 320,000 (2) Non-Current Liabilities 240,000 Long-Term Borrowings: 9% Debentures (@) Current Liaities (@) Trade Payables 2 180,000 2,40,000 (©) Other Cueren Lables 3 1,80,000 460,000 Total 19,20,000 7,60,000, TT Assets (2) Non Curent Assets (2) Freed Assets “Tangle assets 4 133,40,000, 12,00,000 (©) Non-Currert Investments 5 2,40,000 460,000 (2) Current assets (2) Inventories 1,20,000 3,60,000 (©) Trade Recevables 160,000 560,000 (€) Cash and Cash Equivalents 69,000, ‘0,000 Total 19;20,000 317,60,000. Notes to Accounts Note No, | Partieulars 33-2018 T Reserves and Surplus General Reserve 120,000 1,20,000 Balance in Statement of Prot 8 Loss 120,000 = 240,000 720,000 z “Frade Payables Creditors 140,000 120,000 Bills Payable ‘40,000 120,000 380,000 240,000 3 ‘Other Current Liabilities Outstanding Rent 4,80,000 160,000 a “Tangible Assets Plant & Machinery 14,90,000 13,00,000 Accumulated Deprection (1,50,000) (4,00,000) 33,40,000 12,00,000 5 Won-Current Tavestments Snares in XYZ Limited 2,40,000 1,60,000 2,40,000 60,000 ‘Additional Information: (@) During the year 2017-18, a machinery costing *50,000 and accumulated depreciation thereon #15,000 was sold for 132,000. (b) 9 % Debentures +80,000 were issued on April 1, 2017 ©Individually: Partners Collectively: Firm Net Amount of Loss transferred to: A's Capital Account: ¢87,000 (C5 Capital Accouit «29,000 Sale of Periodicals isan item of recurring nature and shown as the income side of the Income and Expenditure Account. Ratio of H, Pand Sis 4: 3:3 Hs Gain = 3/10 x 20/100 = 3/50 H's new share = Hold share + H's Gain = 4/10 + 3/50 = 23/50 S'S Gain = 3/10 x 80/100 = 12/50 S's new share = $s old share + S's Gain = 3/0 + 12/50 = 27/50 New Profit sharing Ratio of H and Sis 23 : 27, In case of dissolution of partnership, the firm continue to do business but with a changed agreement. In case of dissolution of partnership firm, the firm ceases to exis, the assets of the firm are realised and its liabilities are discharged. Irredeemable debentures are called perpetual debentures because these are not repayable during the life span of the company. R's Capital Account Date Particulars 3F | Amount] Date Paniculars 3] Amount 2018 © 2018 © 5n30 | To rawings NE 203900 | Aor 1 | By Banos b7a 50,000 un30 | To interest on Drawings AVC 900° un 30 [by interest on capital Ale 16,250 un30_| To Rs Exestors Ae 636,50 |un30_|by Prof Lose Suspense NC 30,000 696,250 696,250 Discount on Issue of 10 % Debentures Account Date Particulars 3F ] Amount | Date Particulars 3] Amount © © eis [Wo 10 % Debentures NE 1,000 [2018 [By Statement of rot Loss 7.000 hort iar at.” | By Balance el Son0 an00 000 2016 | 10 Batnce bys 54000] 2017 | By statement of Prost & Loss 77,000 for aro. | By alone eis 7000 54000 54,000 Working Notes Year ended Debentires outstanding Ratio Discount amount written off HE March 2018 900,00 3 3yBx 81000 = 27,000 31 March 2016 930,000 3 5y9x 81000 = 27,000 31 March 2017 600,000 2 2/% 81000 = 18,000 3 March 2018 3,00,000 1 19x 81000 = 9,000 Vk Limited Journal Date Partculara LF [ Br Amount @ | Gr Amount ahinery Account o: 790,00 To Modem quent Manufacturers Lmted 700,000 ern ny a 7000 a int Mansur) adem Equipment Manufacturers Ltd. A/C b: 685,000 $000 Loss on ssue of 9 Debentures Account ob: ; 09 9 Debentures account 400,000 To Eeuty Save Copal Account 500,000 ‘To Securities Premium Reserve Account 73,000 To Premium on Redemption of Debentures A/C 10,000 rans 0300 9st Sct 0 rede ta prenum f 106an Soto aq shows a Ota ead rama 5%) Togem Equipment Hancfacrers Ld, A'C o 35,000 ; “oils Payable court 3,000 toapane ls Madan aspen Manas nt)10, Ft 12. Details ‘Ant. © Payment to creditors of Satonery 62,000 Less: Advance paid for stationery to creditors on 31.3.2019 (23,000) Less: Crectors fr statonery on 1.42018 (7,000) Add; rectors for stationery on 31.3.2019, 14,750 Creat purchases of stationery during the year 57,750 ‘Add: Cash purchases of stationery 10,000 Less: Book value of stationery sald (20,000) Add: Stationery on 14.2018 20,000 Less: Stationery on 31.32019 (25,000) ‘Amount of stationery consumed to be debited to Income and Expenditure A/e 42,750 “Journal Date | Particulars LF | Dr. Amount (@) | Cr. Amount (2) | Realisation Account Be 2,76,500 To Land & Buléing Account 1,00,000 To Furniture Account 50,000, To Machinery Account 90,000, To Debtors Account 36,500, (nividual assets accounts closed by transferring thelr balanceS to Reallsation ecount Creditors Account De 45,000 Outstanding Expenses Account De 7/000 To Realsation Account «62,000 (individual eral Unb tes courts cose by watering thet blots o Reason eco’) ‘Bank Account De 366,900 To Realsation Account 166,300 Assets realized and destorscoleted) Realisation Account De 59,750 To Bank Account - (Cedtrs ald at a dscount of §%4 and payee ltaning exoense 59750 Realisation Account De 5,000 “To F's Capital Account 5, (Rentnration pad to Yor undertaking ssi paces) 09 ES Capital Account| De 44.940 5 Capital Acount Or 44940 Gs Copal Account De 22470 To Realisation Account 112,350 (toss on Reason wanted to pare? Cantal cous) ES Capital Account De 4,000 Fs Capital Account De 4,000 G5 Capieal Account De 2,000 To Pri & Lass Account 10,000, (rf Less Act Watered to prter Capra Recounts Bank Account| De 24970 To G's Capital Account (nal coment resived from G) 24970, Capital Acount De 5 Capital Account Oe To Bank Account (eal cay rade to € and F) Journal Date Particulars LF | Dr. Amount (e)_[ Gr. Amount (=) ] Ci Capital Account De 50,000 To AS Captal Account 50,000 (Mreatrent of god due to change profe sharing rato) Reserve Fund Account De 18,000, To AS Capital Account 9,000 To BS Capital Account 6,000 To Cs Capital Acount 3,000 (Reserve Fund ursfered to partners! captal accounts nthe ol pot staring ato) Revaluation Recount De 18,000 “To Fixed Assets Account 18,000 (Revaluation of ed sts on chonge in pot shag ratio) 'NS Capital Account De 9,000 BS Capital Account De 6,000 (Cs Capital Account De 3,000 18,000 To Revaluation Account " (oss on revaluation tansered to partes’ capt scours)13, 14 Ts Capa Reoare m eo Sons Cen Accoun win apy apn of creer) 62,000 Cs curertAcourt m 61,000 ‘oc captal acount tate spy prin of ae eet) 60,000 a Income and Expenditure A/c for year ended 31 Dec, 2018 Ee Expenditure Tt. Taeome CoA} Tosa p00 3 SunScnS = na: Outsaning 11000] 12,000 | "'ess, opening Slstacing (3200) To Depreaaton ‘Ad Cating atstanding “L2aa]—s4o00 euling 3,600 8 Profit Sale of Sports Eaupment 200 rartare 1970 8y Sale of Ot Nevepapers 750 Sports Equpment 2z| 6300 | ayEnrance Fees 3,200 To tlecric Charges 5,500 | By Accind iteresOn Pld Deposk 50 Te ofce Expenses 100 | @2;000<10%93/2) Te Pintng and Stationery 200 | yocter Rent 1254 Te Repair of Grund 2000, | A: Oustandia sa] ,s00 To Supls (Baring Nou 2.00 60,500 000 Balance Sheet ad on 31 Dec, 2038 Tsbiiies Aa) eset mat Sar esanding 3,000 [Bars abe 17500 Tourament Ford 26,000 Cashin hand 12.690 Lest Tourament Expres s00)| 7500 | cath atbonk 10,00 Capital Fund 74590 Fred Desost 10%. 20,000 Ad fe Membership Fees 2200 Accra irerest on Fad Depost 750 A Legacy 37500 sabscrigtionostanding 3.200 a Srplus 26300 | 1.40550 | Locker Rent outstanding 250 Buling sx,000 Lee: Deprecialon casan] 32,400 Future 12000 ed: Purchases 7700 Lest Depreciation 1970| 770 Sports Equpment 17300 ‘ad Purchases 12.000 tes Sale 2,200) ess: Depreciation ‘ 24570 Tas;p90 7a9,090 Notes Balance Shook as on 34 Dec) 2017 Liabilities ‘Amt. ‘Assets ‘Amt.(@)_ | Gina Find 748% | Gash and tank Balance 7090 Sbscptons oustanding 11200 Balding 36,000 Future 32,000 Spots Eaupment 17500 74550 74,590 Prat & Loss Appraplation Account forthe Year ended March 3, 2018 abies ‘amount Tasets ‘amount To irre on Cpa By Bove Las Ror Net PRT 5,000 Us cunt Account 24750 By Interest on Parte Dravngs Hs curent account 27.000 US curent Account zn NS carent Account 22250 | 21000] Ms curent Account 1.080 To Prof vrsfered to NS Curent Account so a0 Us curt Account 18 Hs Curent account ain NS curent Account zo 2240 7.240 eo15, 16, De Partners’ Capital Account ce Date [Particulars [ t@ [ M@ [ N@ | Date | Particulrs | 1@ | M@ | NO 17.2017 [To Bank Ale 700,000 | 14.2017 [By Balance b/d | 2,00,000 |73,00,000 | 400,000 31.3.2018 | To Balance ed | 3,00,000 | 3,00,000 | 3,00,000 [1.72017 | ey Banke | 100,000 400,000 '3,00,000"| 300,000 | 400,000 Journal Date | Particulars EF | DrAmount @ [Cr Amount @® 2018 | Vikrant' Capital Account De 1/550 prt | To Himanshu's Capital Account 1,550 (acheter atest on Capt an nec on ravings for previous yea) ‘Working Notes: ‘Statement of Opening Capital Particulars Himanshu Amount (| vikrant Amount Closing Capital 2,00,000 1,40,000 Add: Drawings 30,000 "40,000 Less: Profit akeady Distributed (0,000) (50,000) (Opening Capital 1,80, 000 1,30,000 ‘Statement Showing Adjustinent Particulars Himanshu Amount (2) | Vikrant Amount () | Total Amount @ Profit to be recovered De 5650 5,650 11,300 12 % Interest on Drawings De 4,800 2,400 4.200 Total] oe 7,50 8.050 75,500. 3% Interest on Capital ce 9,000 6,500 15,500. Adjustment 3.550 (G7) 1,550 (OF Journal Date Particulars LL | Or. Amount (2 | cr Amount (© Bank Aecour De 16,00,000 To Equity Share Application Account, 16,00,000 (Gopleaten money reves) equity Share Appication Account De 16,00,000, “To Equity Share Capital Account 10,00,000 ‘To Equity Share Allotment Account 500,000 “To Bank Account 1/90,000 (Appleaten monay transfered to Egy Share Captal account, Equty shire Alltmne accu ard remaining srount linde) Equity Share Allotment Accoue De 15,00,000 “Te Equity Share Capital Account 15,00,000, (atotment money cue on 80,000 eau shares 8 eat) Bank Account De 10,22,500 To Equity Share Allatment Account 10,00,000 To Gals in Advance Account 22,500 (aterment money teed lrg wth Ctss Rage on 1,500 Shares) Equity Share st Call Account De 10,00,000 “To Equity Share Capital Account 10,00,000 (Fest Cal money de 50,000 equity shes £2 each) ‘Bank Account De 9,87,000 Cals in. Advance Account De 3,000 10,00,000 ee EU Share Ft Cal Account Equity Share Final Call Actount Be 65,00,000 “To Equity Share Capital Account 15,00,000 To Secures Premium Reserve Account 50,00,000 (ra al mee due on 50,000 eat shares @ £13 each incu orerium of £10 each) Bank Accoure De 63,89,500 Cals in Advance Account De 19,500 Callin Arrears Account Dr 93,000 “To Equity Share Final Call Account 65,00,000 (nal cal maney reese) Equity Share Captal Account De 70,000 Secures Premium Reserve Account De 70,000 To Share Forfeited Account. 4,000 To Cals in Arrears Account 9000 Bank Account De 70,000 “To Equity Share Capital Account 70,000 (Fetes Soares o Vanonar reissued) Share Forfeited Account De 49,000 “To Capital Reserve Account 49,000 (shore ead account rane to capt rseve scour17 oR @ Share Forfeited Account Particulars ‘Amount @ [Particulars ‘Amount @. To Share Capital Account 4,000 By Share Capital AE 30,000, To Capital Reserve A/C 16,000, ‘To Balance cfd 10,000 30,000) 30,006) © Journal Date [Particulars LF |r Amount (| er Amount (© ‘Share Captal Account D: 14,400 Secures Premium Reserve Dr 2,160 "To Share Forftted Account 12,960 ‘To Calls mn Arrears Account 3,600 (gn Sate tata Bank Account De 6,000 Share Forfetted Account De 2,000 8,000 “To Share Capital Account (400 Share e-aaed @ £1502 auity Share Allotment Account OF 15,00,000 “To Equity Share Capital Account 15,00,000, (aletmant mney cus on 5,090 sau shares &3 each) Share Forfeited Account B: 5200 To Capital Reserve Account 5,200 (coin on reise offerte shares transfered to captal reserve econ) Working Notes: (Sc te Stare are aloe in he proportion of 574 Ufo fo | (A) elmer Noney gue on 720 500 applied shores, sores sited are 5 900 = 720 Shares Less: Already receved (@)Appeaton Money Receved on 900 Shares = 900 x 16 = 1,400 ‘Alourant Money not recaved ‘amount adjusted on Apaeation = 720 "16 sno (iy cate tn Aor ‘mount to be adused on Atmert = 280 iorsent Money Fst & al Call Money © Journal Date [Particulars LF_[ Dr. Amount @ | Gr Amount nk Aecoure De 10,800 ‘Share Forfeited Account De 1,200 “To Snare Capital Account 12,000, (1.200 Sars e-suad fr 4080035 uly pid ub) ‘Share Forfetee Account De 7200 “To Capital Reserve Account 7,200 on on e5s oetled Shares tans to etal reswve aunt) Revaluation Account Particulars ‘Amount ©). Particulars ‘Amount (2 To Pant & Machinery 720,000, By Provison for Doubtful Debis 750 To Profit transferred to Partners’ Current Aédounts By Land & Bulding 90,000 A 35,375 8 21,225 ° 4.150 70750 90,750 30,750) Partners’ Current Accounts Date [Particulars x 3 © | bate [Particulars x B c 2018 | Te Cs Current Account| 36,250) 22,950 2018 [By Revaluation Account | 35,378] 21,205] 14,150 Mar 31 | To Profit & Loss a/c | 1,20/500) 72,300) 48,200 | Mar 32 | By AS Current Account 38,250, To C's Capital Account 42,150 By BS Current Account 22950 By General Reserve | 37500] 22,500] 15,000, By Balance c/é asa7s| 51,595 158,750 | 95,250 90,350 158,750 95,250 | 90,350 Partners’ Current Accounts Date [Particulars a 5 © | Date | Particulars a 5 € 2018 | Te Bank Account 35,500 | 2018 [By Balance bia 5,00,000| 3,00,000 | 2,00,000 iar 31 | To Cs Loan Account 2,06,650 | Mar 33 | By Cs Current Account 42,150 To Balance cid 5,00,000 | 3,00,000 2,42,150 | 3,00,000 | 242,350 5,00,000 | 3,00,000 | 2,42,350 10Balance Sheet as at March 31, 2018 18, 19, 20, Particulars: ‘Amount (2) Particulars ‘Amount (2 Capitals Bank 21,000, a 5,00,000 Stack 9,000 8 300,000 | —8,00,000 | Debtors 15,000 Cs Loan 206,650 _| Less: Provision for D. Debts 750 14,250 Creditors 23,000. | Plant & Macrinery 1,80,000 Ouistanding Salary 7,000. | Land & Bulging 90,000 Bs Loan 15,000. | as Current Account 85,875 BS Current Account 51,525 70,51,650 10/51,650 OR Journal Date Particulars TE [br Amount (@ | cr. Amount @ Ce Lean Recount De 1,20,000 “To Cs Capital Account 1,20,000 (oan account transfers 0 his capt! scroune) Bank Account De 17,500 "To Premium for Goodwill Account 137,500 (van gama © binge n he share of good) Premium for Goodwill Account De 17,500 To Ps Capital Account 8,750 To K's Capital Account 8750 (Prema fr God Care to opine’ captal accounts n War sel rat) Revaluation Account Dr 145550 “Te Plant & Machinery Recount 14,550 (Govauston of Plant & Macher on admission of naw pare) Land & Bullaing Account De 28,000, To Revaluation Accoun 28,000 (Revauston of Land Buling on adnision of new per Revaluation Account De 13450 To P's Capital Account 6725 To KS Capital Account 6.725 (Profit or revaustion transfered to parr’ cpl accounts) ‘Geneval Reserve Account De 1,00,000 “To Ps Capital Account 50,000 To KS Copital Account 50,000 (canelRessive tarred to pont’ captal scrunt Profit & Lass Account Be 55,000 Ta Ps Capital Account, 27,500 To K's Capital Account 27/500 (Prof ss ezunt are to pater! capitol secunt) Ps Capital Account Dr 2,12,975 i Captal Account De 12.975 "Te Bark Account, 3,25,950 (Cosh pad te Pana K Yor ads of eit) (@Royaties (i) Commission Received (I) Sale of Scrap (any two) For P P Limited: Investing Activity ForG.G Limited: Investing Activity (@) [SNe Teme: Major Head Sub Head o ‘Secures Premium Reserve Shareholders Funds Reserves & Surplus (ia alsin Advances ‘Current abies ‘Other Current Lables i [Stores & Spares, Current Assets Trventory (b) > Stores & Spares is not inéluded in inventory in the ratio analysis. Net Profit before Interest and Tax Tree on Lng Te von (100 = Tax rate) (100 - 40) * 6,00,000 = 10,00,000 Net Profit before Interest & Tax = Net Profit before tax-+ Interest on Long Tetm Debts = 10,00,000 + 4,80,000 = 14,80,000 14,80,000 80,000 ‘Stnincance of Interest Coverage Rati Tt reveals the rumber of times Interest on Long Term Debts i covered by the profits alae. A higher ratio ensures safety of interest on Long Term Debts. “The Interest coverage ratio wl improve the company decides to redeem 500,000 debentures assuming that Net Prof ster Interest andthe tax rate wil be same Interest Coverage Ratio = Net Profit before tax = x Net Profit after tax Interest Coverage Ratio 3.08 Times 12. 23. Comparative Statement of Profit & Loss for the year ended March 31, 2017 and 2018 Particulars 201637 | 2017-18 ] Absolute | % Change ‘Amount («) | Amount (| change (®) Revenue from Operations 50,00,000 | 60,00,000 [> 30,00,000 Bo Less: Expenses: (2) Employee Benefit Expenses 5,00,000 | 8,00,000 | 3,00,000 60% (0) Other Expenses 10,00,000 | _12,00,000- | _2,00,000 20% “Total Expenses: 15,00,000 | 20,00,000 | _5,00,000_ | 33.33% Tak Profit before Tox 35,00,000 [60,0000 | —25,00,000 [71 43% Less: Tax 14,00,000 (| 24{00,000_| to,00,000_| 71.43% Nat Profit after Tax 21,00,0000 [~36,00,000 | ~15,00,000 [71.43% ‘Cash Flow Statement for the year ended 3ast March, 2018 Particulars Details “Amount © © T CASH FLOW FROM OPERATING ACTIVITIES Surplus: Balance in the Statement of Profit & Loss 1,20,000 Adjustment for Depreciation 5,000 Loss on sale of Machinery 3,000 Interest on Debentures 24,800 Operating Proft before changes in working capital 2,26,800 ‘Add: Decrease in Inventories 40,000 ‘Add: Increase in Outstanding Rent 20/000 ‘Add: Increase in Creditors 20/000 Less: Decrease in sills Payable (20,900) Cash Flow from Operating Actes 26.800 I. CASH FLOW FROM INVESTING ACTIVITIES Purchase of Machinery Sale of Machinery Purchase of Shares in XYZ Umited ash Flow ffom Investing Actvties (288,000) TII CASH FLOW FROM FINANCING ACTIVITIES Issue of 9 % Debentures 80,000 Interest on Debentures (28,800) Cash Flow from Financing Actives i200 Net Cash Flow (20,000) ‘Add: Opening Balance of Cash and Cash Equivalents 80,000 Closing Balance of Cash and Cash Equivalents 60,000 ‘Working Notes: Plant & Machinery Account Particulars ‘Amount (2) [Particulars “Amount (2) To Balance b/d 13,00,000,, | By Bank Account 32,000 Ta Bank Account 240,000 "| By Accumulated Deprecation Account 15,000 By Statement of Profit & Loss 3,000 By Balance cfd 14,80,000 35 40/000) 15 40,000 “Recumulated Depreciation Account Particulars “Amount (©) _[ Particulars ‘Amount (2 "To Prank, & Machinery Accoure 15,000 | By Balance b/d 100,000 ToBalance dd 1,50,000_| By Statement of Profit & Loss 65,000, 7,65,000 755,000 12