SAMPLE PAPER — 1 Time Allowed : 90 Minutes Maximum Marks . 4 PART -I Section -A Instructions : > From question nunber I to 18, attempt any 15 questions. Q. 1. Manager's Commission will be recorded : (A) In Profit & Loss Account (B) In Profit & Loss Appropriation Account (C) In Revaluation Account (D) In Realisation Account Q. 2. Interest on Capital will be recorded : (A) On the Credit Side of Current Accounts (B) On the Debit Side of Current Accounts (C) On the Credit Side of Capital Accounts (D) On the Debit Side of Profit & Loss Account Q.3. Ganga and Triveni were partners with capitals of €2,00,000 and %4,00,000 respectivel Saraswati was admitted for 1/4th share in the profits. Saraswati was unable to bring h share of goodwill premium in cash. The journal entry recorded for goodwill premium given below: Saraswati’s Current A/e To Ganga’s Capital A/c To Triveni’s Capital A/e (Adjustment of goodwill premium on Triveni’s Admission) 10,00 f The new profit sharing ratio will be (A) 17:28:15 (B) 8:37:15 (©) 9:6:5 (D) 6:9:5 Q. 4. Which of the following is correct : (A) A Company does not have separate legal entity. (B) A Company does not have perpetual existence (C) A Company has limited liability, (D) Each shareholder is an agent as well as principal of the Company.. A and B are partners sharing profits in 3:2 wit In case the face value of a share is 2100 and €94 led and 760 have been paid, e face val hare is 100 and €90 have been called and have by ve been paid, the liability of a shareholder holdi ee ‘olding these oe will be limited to : (C) %30 o a . A Company has issued 10,000, 8% Preference Shares, P pany ,000, 8% peerage nee Shares. Preference shareholders are entitled (A) Profit (B) Intere: (C) Dividend i roti if case of loss ) lend in case of profit (D) Dividend in case of loss also . A, Band C i ‘were equal partners, They decided to change the profit sharing ratio to 4 :3 2. For this purpose the goodwill of the firm was valued at &4,50,000. The j ae The journal entry for the treatment of Goodwill on change in profit sharing ratio will be (A) C's Capital Ale. To A’s Capital Alc. i | . (B) C’s Capital A/c. | | | Dr. To 4’s Capital A/c. (© 4’s Capital Ale. * To C’s Capital A/c. |) 4s Capital Ave. To C’s Capital A/c. Dr. A and B are partners. The net divisible profit as per Profit and Loss Appropriation A/c is %2,50,000. The total interest on partner’s drawings is %4,000. A’s salary is 74,000 per quarter and B’s salary is £40,000 per annum, Net profit/loss eared during the year was : (A) 1,98,000 (B) %2,98,000 (C) %3,02,000 (D) %3,06,000 If nothing is stated in partnership deed : (A) Interest on Drawings will be charged @6% p.2. for full year. (B) Interest on Drawings will be charged @6% p.a. for an average period of six months. (C) No interest will be charged on Drawings. (D) Interest on Drawings will be charged @12% p.a. th capitals of €6,00,000 and %4,00,000 10% p.a. and A is also entitled firm, Net Profit earned by the They are entitled to interest on their capitals @ of profit will be : toa rent of €10,000 per month for use of his property by the firm for the year ended 31st March 2020 was €3,00,000. B's share (B) = 72,000 (A) %80,000 (C) %32,000 (D) 1,20,000 respectively.Q.12. Q.14. 2 ble by the issue of equity shares of d of the followin: T10 each, XS paid. The : ER articular BOOK Fale i s 7 20,00,000 Plant & Machinery 6,00,000 Stock 3,00,000 Sundry Debtors 5,00,000/ Subject to Provision x for Doubtful Debts @5%) Sundry Creditors 4,00,000, 4,00,000. How many equity shares will be issued to Y Ltd. : (A) 3,20,000 (B) 3,60,000 (C) 4,00,000 (D) 4,50,000 Gain/Loss on revaluation is shared by : (A) All partners in case of change in profit sharing ratio (B) All partners in case of admission of a new partner including new partner. (C) Remaining partners in case of retirement of a partner (D) All partners in case of dissolution of a firm . Which of the following is true regarding interest on capital to a partner when the firm maintains fluctuating capital accounts? (A) Debit Partner's Loan A/c and Credit P & L Appropriation A/c. (B) Debit P & L A/c and Credit Partner’s Capital A/c. (C) Debit P & L Appropriation A/c and Credit Partner's Capital A/c. (D) Debit P & L Appropriation A/c and Credit Partner’s Current A/c. X Lid. offered 1,00,000 Equity Shares of %10 each, of these 99,500 shares were subscribed. The amount was payable as 5 on application, %3 on allotment and balance on first call. Kishan holding 3,000 shares and Geeta holding 2,000 shares have defaulted on first call, what is the amount of money received on first call? (A) 71,89,000 (B) %2,83,500 (C) %1,90,000 (D) 71,99,000 . Pick the odd one out of the following : (A) Interest allowed on a loan taken by the firm from a partner. (B) Rent due to a partner of the firm for using his premises for business purposes. (C) Salary due to the manager of the firm. (D) Transfer of General Reserve : . Net Assets minus Capital Reserve is : (A) Goodwill (B) Total assets (C) Purchase consideration (D) Liquid assetsssued! a prospectus inviti a3 Ged Toe So cag beets inviting applications for 40,000 shares. Applications were sai ao shau Applications for 2,000 shares were rejected and pro-rata made to the remaining applicants. If Ganesh has been allotted 1,500 shares, how many shares he must have applied for? w i hase (B) 1,800 shares +875 shares (D) 1,200 shares Q. 18. Interest on Calls in Arrears Account is closed by (A) Crediting it to Statement of Profit & Loss, (B) Crediting it to Profit & Loss Appropriation Account. (C) Debiting it to Profit & Loss Appropriation Account. (D) Debiting it to Statement of Profit & Loss. PART Section -B Instructions : > From question number 19 to 36, attempt any 15 questions. Q. 19. X and ¥ are partners in the ratio of 2: 1. Their capitals are %3,00,000 and %2,00,000 respectively. Interest on capitals is allowed @ 9% p.a. Firm earned a profit of $30,000 for the year ended 31st March 2019. Interest on Capital will be : (A) X %27,000; ¥ 18,000 (B) ¥ %20,000; ¥ 710,000 (C) X 18,000; ¥ $12,000 (D) No Interest will be allowed. Q. 20. A and B are partners in a firm. They admit C as a partner with 1/Sth share in the profits of the firm. C brings €1,50,000 as his share of capital. The value of the total assets of the firm is €5,50,000 and outside liabilities are valued at 770,000 on that date. C’s share of hidden goodwill will be : (A) %2,70,000 (B) %54,000 (C) %1,20,000 (D) 224,000 |. A company issued 20,000 equity shares of %10 each at par payable as under : On application @3; on allotment €2; on fist call €4 and on final call €1 per share. Applications were received for 65,000 shares. Applications for 15,000 were rejected and pro-rata allotment was made to the applicants for 50,000 shares. How much amount will be received in cash on first call? Excess application money is adjusted towards amount due on allotment and calls. (A) %80,000 (C) 30,000 Q.22, X Ltd. forfeited 1,000 shares of €10 each for non-payment of final call of €3 each. After reissue of 600 of these shares, £3,000 were transferred to Capital Reserve. Shares were (B) %50,000 (D) Nil reissued for :SAMPLE PAPER — 1 Q.17. Q.18. SP-19 issued a prospectus inviting applications for 40,000 shares. Applications were X Ltd, received for 50,000 shares, Applications for 2,000 shares were rejected and pro-rata allotment was made to the remaining applicants. If Ganesh has been allotted 1,500 shares, how many shares he must have applied for? (A) 1,250 shares (B) 1,800 shares (C) 1,875 shares (D) 1,200 shares Interest on Calls in Arrears Account is closed by (A) Crediting it to Statement of Profit & Loss, (B) Crediting it to Profit & Loss Appropriation Account. (C) Debiting it to Profit & Loss Appropriation Account. (D) Debiting it to Statement of Profit & Loss. PART Section -B Instructions : > From question number 19 to 36, attempt any 15 questions. Q.19. X and Y are partners in the ratio of 2: 1. Their capitals are €3,00,000 and %2,00,000 respectively. Interest on capitals is allowed @ 9% p.a. Firm earned a profit of €30,000 for the year ended 31st March 2019. Interest on Capital will be : (A) X 27,000; ¥ 218,000 (B) X%20,000; ¥ £10,000 (C)_X 218,000; ¥ 212,000 (D) No Interest will be allowed. . A and B are partners in a firm. They admit C as a partner with 1/Sth share in the profits of the firm. C brings €1,50,000 as his share of capital. The value of the total assets of the firm is %5,50,000 and outside liabilities are valued at %70,000 on that date. C’s share of hidden goodwill will be : (A) %2,70,000 (B) %54,000 (C) 21,20,000 (D) %24,000 . A company issued 20,000 equity shares of %10 each at par payable as under : On application %3; on allotment 22; on first call €4 and on final call €1 per share. Applications were received for 65,000 shares. Applications for 15,000 were rejected and pro-rata allotment was made to the applicants for 50,000 shares. How much amount will be received in cash on first call? Excess application money is adjusted towards amount due on allotment and calls. (A) 280,000 (B) 750,000 (C) 330,000 (D) Nil - X Ltd, forfeited 1,000 shares of 10 each for non-payment of final call of €3 each. After reissue of 600 of these shares, €3,000 were transferred to Capital Reserve. Shares were reissued for :Q.23. Q.25. Q. 27. SAMPLE PAPER — (B) 24,800 (D) %4,000 1 ratio. During the year ended 31st March, (A) 1,200 (C) %3,600 A and B were partners sharing profits in 2 : y 2021, 4’s drawings were £10,000 per month drawn in the beginning of every month and B’s drawings were €10,000 per month drawn at the end of every month. After the preparation of final accounts, it was discovered that interest on drawings @ 12% p.a. was not taken into consideration. In the adjustment entry : (A) A will be Debited by %7,800 and B will be Debited by 76,600 (B) A will be Credited by 9,600 and B will be Credited by 74,800 (C) A will be Credited and B will be Debited by &1,800 (D) A will be Debited and B will be Credited by 71,800 |. A, B and C were partners in a firm. On 1-4-2020 their capitals stood at %5,00,000, %2,50,000 and %2,50,000 respectively. As per the provisions of the partnership deed : (a) Partners were entitled to interest on capital at 6% p.a. (b) Profits were to be shared in the ratios of capitals. The net profit for the year ended 31.3.2021 of %3,00,000 was divided equally without providing for the above items. In the adjustment entry to rectify the error : (A) Dr. A %50,000; Cr. B 25,000 and Cr. C 25,000. (B) Cr. A %50,000; Dr. B 25,000 and Dr. C $25,000 (C) Cr. A 210,000; Dr. B & 5,000 and Dr. C % 5,000 (D) Cr. A %40,000; Dr. B 20,000 and Dr. C %20,000 A, Band C were partners sharing profits in the ratio of 4 : 3 : 2. It was provided that B’s share of profit will not be /ess than %1,50,000 per annum. The losses for the year ended 31st March, 2021 were 780,000, before allowing interest on Loan of €2,00,000 taken from A on Ist June, 2020. Share of each partner’s profit/loss will be : (A) A (Loss) %1,40,000; B (Profit) €1,20,000; C (Loss) 70,000 (B) A (Loss) &1,20,000; B (Profit) €1,80,000; C (Loss) 60,000 (C) A (Loss) €1,60,000; B (Profit) =1,50,000; C (Loss) 80,000 (D) 4 (Loss) %1,80,000; B (Profit) %1,50,000; C (Loss) %90,000 . On Ist April, 2021 partner’s capital accounts showed a balance of 7,00,000 while the general reserve amounted to %1,00,000. If the normal rate of return is 15% and the goodwill of the firm is valued at €1,60,000 at 4 year’s purchase of super profit, find the average profits of the firm. (A) %1,45,000 (B) 21,30,000 (C) %1,60,000 (@) ® 80,000 X Ltd, invited applications for issuing 1,60,000 shares of 710 each at par. The amount was payable as follows :SAMPLE PAPER — 2 y BR Q. 30. On Application Le On Allotment 4 On First and Final Call 3 Applications were received for 2,40,000 shares and pro-rata allotment was made to all the applicants. All calls were made and were duly received except allotment and first and final call from Aditya who was allotted 800 shares, His shares were forfeited. Amount Credited to Share Forfeiture Account will be (A) %2,400 (B) 33,600 (©) 21,200 (D) %2,000 . Goodluck Ltd. invited applications for issuing 80,000 shares of 10 each at a premium of 5 per share. The amount was payable as follows : On Application %5 (including premium %3) On Allotment 7 (including premium %2) On First and Final Call 3 Applications were received for 1,00,000 shares and pro-rata allotment was made to all the applicants. All calls were made and were duly received except allotment and first and final call from Vidya who was allotted 3,200 shares. Her shares were forfeited. Amount Credited to Share Forfeiture Account will be : (A) % 4,000 (B) %10,400 (C) 20,000 (D) 213,600 A, B and C were partners sharing profits in the ratio of 2: 2 : 1. They decided to share future profits in the ratio of 7 : 5 : 3 with effect from Ist April, 2019. Their Balance Sheet as on that date showed Workmen Compensation Reserve of %60,000 and a balance of 90,000 in Advertisement Suspense Account. In the adjusting entry : (A) Dr. A %2,000; C %2,000 (B) Dr. A %14,000; Dr. B 10,000; Dr. C 6,000 (C) Dr. A €12,000; Dr. B 12,000; Dr. C 76,000 (D) Cr. A %2,000; C 2,000 A and B are partners sharing profits in the ratio of 11:4. C was admitted. 4 surrendered ii of his share and B ith of his share in favour of C. C brings 716,500 as his share of goodwill. Amount of goodwill premium credited to A will be : (A) 210,500 (B) @ 8,250 (©) & 4,400 (D) 712,100 X and Y are partners sharing profits and losses in the ratio of 3 : 2. They admit Z into partnership, Z paying a premium of 2,00,000 for 1/4 share of the profits while Yand Y as between themselves sharing profits and losses equally. Goodwill Credited to X will be : (A) €1,20,000 (B) %1,80,000 (C) %1,00,000 () % 20,000. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R) : Assertion (A) Partnership is a voluntary association. Reason (R) Partnership deed is oral or written agreement. In the context of the above two statements, which of the following is correct? Codes : (A) Both (A) and (R) are correct and (R) is the correct explanation of (A). (B) Both (A) and (R) are correct but (R) is not the correct explanation of (A). (C) Only (A) is correct. (D) Both (A) and (R) are wrong. . Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R) : Assertion (A) A Company is an artificial person having separate entity. Reason (R) Shares of'a Company are freely transferable except in case of private companies. In the context of the above two statements, which of the following is correct? Codes : (A) Both (A) and (R) are true, but (R) is not the correct explanation of (A). (B) Both (A) and (R) are true and (R) is the correct explanation of (A). (C) Both (A) and (R) are false. (D) (A) se, but (R) is true, }. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R) Assertion (A) Pro-rata allotment of shares means that smaller number of shares are allotted to each applicant according to the number of shares applied by him. Reason (R) As per SEBI Guidelines minimum subscription should be atleast 90% of the authorised capital, In the context of the above statements, which one of the following is correct? Codes : (A) Both (A) and (R) are true, but (R) is not the correct explanation of (A).SAMPLE PAPER — 1 Q.36. (B) Both (A) and (R) are true and (R) is a correct explanation of (A). (C) Both (A) and (R) are false. (D) (A) is true, but (R) is false, . Given below are two statements, one labelled as Assertion (A) and the other labelled as R son (R) Assertion (A) Revaluation Account is a real account. Reason (R) An unrecorded liability is credited to Revaluation Account. In the context of the above two statements, which of the following is correct? Codes : (A) Both (A) and (R) are correct and (R) is the correct reason of (A). (B) Both (A) and (R) are correct but (R) is not the correct reason of (A). (C) Only (R) is correct. (D) Both (A) and (R) are wrong, Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R) : Assertion (A) we of partnership firm, charge against profit indicates expenses to be debited to Profit In & Loss Account. Reason (R) Interest on Partner's Loan to the firm and rent paid to a partner are charge against profit. In the context of the above two statements, which of the following is correct? Codes : (A) (A) and (R) both are correct and (R) correctly explains (A). (B) Both (A) and (R) are correct but (R) does not correctly explain (A). (C) Both (A) and (R) are incon (D) (A) is correct but (R) is incorrect. Section - C Instructions : > From question number 37 to 41, attempt any 4 question Case Based MCQ Young India Ltd. deals in electronic goods. It needs €10,00,00,000 for its expansion plan.Q.38. SAMPLE PAPER. | this amount as follows : 50% from Industrial Development Bank of India 40% of the remaining amount from Axis Bank Remaining amount by issue of equity shares of €10 It decided to issue equity shares at 20% premium, The prospectus was issued to public ribedl by 5,00,000 shares, Answer the following questions considering that the cntire amount was payable on application : It decided to rais and the issue was oversubs . How many equity shares were offered to the public? (A) 30,00,000 Shar (B) 50,00,000 Shares (C) 25,00,000 Shares (D) None of the above What is the total amount collected on application? (A) %3,00,00,000 (B) %3,60,00,000 (C) %2,50,00,000 (D) %5,00,00,000 Case Based MCQs On Ist January 2021, Ravi, Mohan and Shreya entered into partnership with fixed capitals of %3,00,000, %2,00,000 and %1,00,000 respectively. Their partnership deed provided for the following : (a) Salary to Ravi @ %20,000 per month. (b) Rent to Mohan for the use of his property for business purpose @ %5,000 per month, (c) Manager is to be allowed a commission of 10% of the profit of the firm. Profit for the year ended 31st March, 2021 before providing for the above adjustments amounted to %3,45,000. |. Remuneration to Manager will be : (A) 230,000 (B) %33,000 (C) %34,500 (D) %27,000 ). Interest on Capital allowed to partners will be : (A) @ 12%pa. B) @6%pa. (©) @W%pa (D) No Interest will be allowed . Shreya’s share of profit will be : (A) %79,000 (B) 80,000 (C) 239,500 (D) 240,000PART -II Section -A Analysis of Financial Statements Instructions : > From question number 42 to 48, attempt any 5 questions. Qa. Operating Ratio is : (A) Cost of Revenue from Operations + Selling Expenses/Net Revenue from Operations (B) Cost of Revenue from Operations + Operating and Non Operating Expenses/Net Revenue from Operations (C) Cost of Revenue from Operaions + Operating Expenses/Net Revenue from Operations (D) Cost of Revenue from Operations — Operating Expenses/Net Revenue from Operations . Match the following : (| Interest Coverage Ratio (a) | Liquidity Ratio (ii) [Proprietary Ratio ()| Solvency Ratio (iii) | Working Capital Turnover Ratio ()| Activity Ratio (@) [Profitability Ratio Choose the correct option : A Md WE) W)O BHO WH iO OOM W@ i) OVA WO GiI@ |. Proposed Dividend for Current Year is : (A) Current Liability (B) Contingent Liability (C) Commitment (D) Short-term Provision . A transaction involving decrease in Debt-Equity Ratio and increase in Current Ratio is (A) Issue of Debentures against the purchase of Fixed Assets (B) Redemption of Preference Shares for Cash. (C) Issue of Equity Shares for Cash. (D) Issue of Debentures for Cash.Q. 46. Q.48. Match the follow (| Proposed Dividend for Current year_| (a)[Contingent Liability (ii)|Uncalled Liability on partly paid} (6) shares ( Commitments )| Current Liabilities S Choose the correct option : (A) (a) (ii) (6) (B) (a) (i () (C) (b) (i) (e) (D) Me) (ii) (6) . Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R) : Assertion (A) Financial Statements show profitability through Balance Sheet and financial position through Statement of Profit and Loss. Reason (R) Financial Statements are recorded facts and they are prepared according to certain accounting conventions. In the context of the above two statements, which of the followi ing is correct? Codes : (A) Both (A) and (R) are true, but (R) is not the correct explanation of (A). (B) Both (A) and (R) are true and (R) is the correct explanation of (A). (C) Both (A) and (R) are false, (D) (A)is Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R) : Assertion (A) se, but (R) is true. {Current ratio is 1.2: 1, payment of trade Creditors improves the Current Ratio. Reason (R) Mquick ratio is 0.8 : 1, purchase of goods on credit will reduce this ratio, In the context of the above two statements, which of the following is correct? Codes : (A) Both (A) and (R) are correct and (R) is the correct reason of (A) (B) Both (A) and (R) are correct but (R) is not the correct reason of (A), (©) Only (R) is correct (D) Both (A) and (R) are wrong,SAMPLE PAPER PART -II Section -B Instructions : > From question number 49 t0 55, attempt any 6 questions. Q.49. Inventory %3,00,000 (excluding loose tools £90,000); Trade Receivables €1,10,000; Trade Payables €1,80,000; Prepaid Expenses 240,000 and Goodwill is £45,000. Current Ratio will be : (A) 2.75:1 (3:1 . Calculate fixed assets from the following : Share Capital %7,00,000; Reserve & Surplus ¥3,00,000; Current Assets 1,50,000; Proprietary Ratio 0.8 : 1. (A) %12,50,000 (B) %11,00,000 (©) %14,00,000 (D) € 650,000 Q. 51. Revenue from Operations €8,00,000; Inventory Turnover Ratio 5 Gross Profit 25%. Find ut the value of Closing Inventory, if Closing Inventory is 820,000 more than the Opening (B) 25:1 (D) 3.25:1 2 a 3 Inventory : (A) %1,40,000 (B) %1,18,000 (©) %1,30,000 (D) %1,38,000 Net Revenue from Operations Credit Revenue from Operations Gross Profit Office Expenses Selling Expenses Loss by Fire Operating Ratio will be : (A) 70% (B) 85% (C) 90% (D) 95% Long-term Borrowings Bank Overdraft ‘Shareholder’s Funds General Reserve Securities Premium ReseryeDebt-Equity Ratio will be : (B) 12:1 (A) 2:1 (C) 0.9:1 (D) 15:1 Current Ratio of a Company is 2.4: | and its Current Liabilities are %2,00,009, : Subsequently, it sold goods costing %1,00,000 at a profit of 40%, half of which was on Credit. Current ratio will be : (A) 3.121 (B) 24:1 (©) 26:1 (D) 25:1 Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R) : Assertion (A) Gain on purchase of a running business is Capital profit. Reason (R) Such profit is not available for distribution of cash dividend among the shareholders of the Company. In the context of the above two statements, which of the following is correct? Codes : (A) Both (A) and (R) are correct and (R) is the correct reason of (A). (B) Both (A) and (R) are correct but (R) is not the correct reason of (A). (©) Only (R) is correct. (D) Both (A) and (R) are wrong.