Solutions to Sample Paper 12 1. (ce) 2. (d) 30 © 4. (a) @) (0) 6d) @) 7.) 8.) (6) 9. (a) 10. () 1 @) 12. 6) 1B. Wd) (0) 15. (6) © 16. (6) 0,6) Both (A) and (R) are correct and (R) is the correct explanation of (A), Nil or Zero Coupon Rate Debentures Realisation Account or 7 Gaining Partners, Sacrificing Partners None of the above or Credited by the face value of debenture £48,000 (8), (©), i) (A) or 2a “Trading and Profit und Loss Ale Porites ‘moun @ Particulars ‘Amount ® ‘Net Purchases (14,40, 000 810,00) 13,3000 | Sales 00 00 : 120,000| Closing Inventory 10,000 » ‘0,000 Interest on Loan 4.000 6 11,20,000 x © ‘00 To Net profit 18.46,000 73.000 ano 13:14 (i), (i), (@), 33,900 Calls-in-arrears on 500 shares held by X = $00 x & 23,500 Calls-in-arrears on 200 shares held by Y = 200 x £2 =_€400 “33.900_ 13,200 a = 1,56,000 Or = 3,02,000, Realisation Account Accountancy —12. 0w. 18, Journal Date Particulars Le] pee cee) ‘As Capital Ale Dr. 12500 ‘To Realisation Ac 2,500 (Being investments taken over by A) Cash Ne Dr 35,500 ‘TeRealsation Nc 35,500 (Being stock, debtors, plant and machinery and unrecorded assets realised) Realisation Ne Dr 15,700 ToAs Capital Ave 120 ToCah Ae 14500 (Being creditors, bill payable and expenses paid) Dr sas Bs Capital Ale Dr 1995 Cs Capital Ale Dr 1330 ‘To Realisation Ale 6.650 (Being realisation loss distributed among partners) ‘Ns Capital Ave Dr. Bs Capital Ale Dr ToC Capital Ae 7.780 To Cash Ale 26,600 (cing fina payment made to A and B) Journal Date Particulars Le] pre ce.) ‘As Current Ae Dr Sas ‘ToBSs Current Ale sais ToC's Current Ale o (Being the adjustment entry passed) Adjustment Table Particulars Ag Be ce Profit wrongly distributed to be debited 15000 De.| 10.000 Dr.[ 000 Dr. Interest on Capital tobe credited 15m Ce} 1000 cr, 50 Ce Salary: 800 per month =} 9600 er. = ‘Commission 56% of (30,000 3,000) = =] tasoce. Profit distributed in the ratio 53:2 goscr| asiser] — 3210cr Tse Ce | ISAS Cr S000 Ce Neteroet sa7De| Sais Ce ce Accountancy —12. ayw. Or (Being the balance of purchase consideration paid by cheque) Journal Dae Penton a] me | ee Cs Capital Ne onswo ‘AaCapial Ae «ss00 (Beng Chae of gentile tong apt sem) As Copal A De 12000 Bscapial Ae be somo Cacapial At be 000 To Gone Ae 2asoo (Being good iit of Gene Resewe Ae De wo eAsCaptal 1ns00 ToD Capital Ae amo TCs Capi Ae 3300 (Being pene eer dtd in ol at) Gaining Ratio = New Ratio-OW Ratio 33-63 3228 3 en 2 5 6 B Journal In the books of Vasant Ld. Dae Penton Le =e poner De Goodwill Ae be Totiahiies Ae noon ToBeta Lid r30uq00 (Being asc and bis ken oer rom Beta Lian alae ited we pouty Tat De rzaacoo Discount ont of Detetes Ae be 2000 Tos Debentures Ae tsuao0 (Being 1500, debentres of € 100 cach tue a acount f 45 a purchase consideration Tea i De s2p00 ‘Bank Ae somo Accountancy —12 ®Or Journal In the books of Thermal Power Energies Ltd, Date Particulars LE] De® cea Bank Ale Dr 2,72,00,000| {To Equity Share Application and Allotment Alc 2.7,00,000 (Being hate aplication money received on 17,0000 shares @ & 16 pr Share) Equity Share Applieation and Allooment Ale Dr 2.72,00,000, To Equity Share Capital Ae 10,00,000, “To Securities Premium Ate «60,00,000 To Bank Ac 1,12,00,000 (Being share application money received adjusted) Rate of Return 10 8 €5,00,000 x 78 = & 40,000 Normal Profit Capital Employed Adjusted Average Profit = © 65,000 ~ & 20,000 (Remuneration) = 745,000 Super Profit = Average Profit ~ Normal Profit = % 45,010 —& 40,0002 5,000 Thus, Goodwill = ¥5,000 x 3=¥ 15,000 a. Journal @ In the Books of M Ltd. Date Particulars LE De@ cee) Bank Ale Dr 1,62,000 To Debenture Application and Allotment Alc exon (Being subscription received for 1800, 9% debentures of€ 100 each) Debenture Application and Allotment Ale Dr 1,62,000 Discount on Issue of Debentures Ale Dr 18,00 {Loss on Issue of Debentures Ae Dr 9,000 To 9% Debentures Av 1,80,000 ‘To Premium on Redemption of Debentutes Ale 93,000 (Being 1800, 9%% debentures of & 100 each issued at @ discount of 10% redeemable ata premium of 5%) Oy Journal In the Books of A Ltd, Date Particulars Le] De® ce Bank Ale Dr 2.40000 To Debenture Application and Allotment Ave 2,4,000 (Being subscription received for 20000, 12% debentures of 100 each) Debenture Application and Allotment Ale Dr 2.40000 Loss on Issue of debentures Ave Dr 20,000 ‘To 12% Debenture Ale 200,000 “To Securities Premium Ale 0,000 To Premium on Redemption of Debentures Ave 20,000 (Being 2,000, 125 debentures of @ 10 each isued at a premium of 20% redeemable ata prensium of 10%) Accountancy —12. «22. De Journal ce Date Particulars LE Dr @ cc) ‘General Reserve Ale Dr TBs Capital Ave (Being general reserve credited to BS Ale) Workmen Compensation Fund Dr ‘BS Capital Ave (Being workmen compensation fund credited) Interest on Capital Ae Dr ‘TBS Capital Ave (Being interest on capital credited to B's Nc) Profit and Loss Suspense Ale Dr. ‘ToBs Capital Ave (Being B's share of profit credited to his account) ‘As Capital Ale Dr Cs Capital Ae Dr TBs Capital Ale (Being B's shar of goodwill eredited ta his account) BS Capital Ale Dr ‘TBs Executor’ Ave (Being amount due to Bis transferred to Bs executors Ale) 10,000 20000 soo 4000 1,08,000 35000 439500 10,000 20,000 5.500 40,000 144000 Working notes: 10 (@ Bs share of profit tll the date of death = 12,00,000 x [> x = 2 (6) Bs share of goodwill = 432,000 x = = 144,000 This will be contributed by A and C in the ratio 3 : 2B. In the books of Surya Ltd. Journal % 40,000 © 1,08,000 and & 36,000. Date Particulars LE De @ Bank Ale Dr Share Application and Allotment Ale ToCallsin-advance Ne (Being money received on application and allotment on 96,000 shares @ 14 each along with callin advance on 7,000 shares) Share Application and Allotment Ale Dr Te Share Capital Ave “Te Securities Premium Ale (Being application and allotment ‘Share Fint Call Ae Dr To Share Capital Ae ‘Te Securities Premium Ale (Being share first call due on 96,000 shares @ ¥ 8 per share inc premium of 5) ing a Accountancy —12 ® 1456,000 13,4,000 768,00 1.12000 34000 960,000 288,000 430,000Bank Ale Callsinadvance ie Calls inarrears Ae Ti Shate Fits Call A (Being share fist 1 money received) Dr. Dr Dr. ‘Share Final Cal Ae ‘ToShare Capital Ale ‘Te Securities Premium Ale (Being share final call due on 96,000 shares @ € 8 each including premium of 5) Dr Bank Ale Calls-i-advance Ne call Share Final Call Ale arrears Ne (Being share final eall money received) Dr Dr. Dr ‘Share Capital Ae Securities Premium Ale ‘o Share Forfeiture A’e ToCallsinarrears Nc (Being 13,00 shares forfeited for non-payment ofthe due amount) Dr Dr 648.00 6,000 68,000 768,000 608.00 56,000 105,000 768,000 288,000 430,000 768,000 67.000 168,000, Or In the books of RML Company Journal Date Particulars LE, De®) oe @) Bank Ale To Share Application Ate (Being share aplication money received on 6,00,00 shares @ 230 each) Dr. ‘Share Application Ale “To Share Capital Ae ToBank Alc ‘To Share Allotment Ale (Being share application money adjusted) Dr ‘Share Allotment Ale ‘To Share Capital Ae (Being share allotment money dve on 300,000 shares @ 280 each) Dr Bunk A’e ‘To Share Allotment Ale (Being share allotment money recesed) Dr ‘Share First Call A’e ‘To Share Capital Ae Dr Accountaney—12. © 1,80,00,00 1.80,00,000 1,50,0,000 8.80.00, 30,00,000, 1.3n0,000, 0,00,00 30,00,000 «69,00,000 1.50,00,000 88,80,000Bank Ale “To Share First Call Ae (Being share fis all money recive ‘Share Capital Ae Dr “To Share Forfeiture Ne To Share Allotment Ale Te Share Firs Call Ne (Being 6,000 shares forfeited for non payment of share allotment and fis all) ‘Share Final Cal Ale Dr To Share Capital Ae (Being share second call due on 294,000 shares @ € 10 each) Bank Ale “To Share Final Call Ae Dr (Being share second call money eceived) ‘Share Capital Ave “To Share Forfeiture Nc “To Share First Call Ae “To Share Final Call Ae Dr (Being 12,000 shares forfeited due to non-payment of fest and final ell) 28.30,000 5.40.00, 3,60:000 120,000 0.000 29,40,000 29,40,000 28.20,000, 28,20,000 12,0,000 9,60,000 1.200000 120,000 Working Notes: 1. Amount due on share allotment Less: Amount already received with application Less: Amount unpaid by holder of 6,000 shares. Amount due on allotment (6000 x % 50) 3,00,000 Excess of application money paid by him: (6000 x 30) (4,80,000) _1,20,000 38,80,000, 2. Group Il, Prorata allotment is done in ratio = 3:2. = Share holder who applied for 18,000 shares is a holder of 18,000 x — = 12,000 shares 3. Amount received on share first call: Amount due on share first call 330,00,000 Less: Amount not received (18000 x 10) =1,80,000 28,20,000 24, Dr Revaluation Ale cr 5 ‘Amount “Amount Particulars a Particulars a "To Bad Debts Ave 2000 | By Investments Ale 5000 ‘To Provision on Debtors Ale 44000 | By Loss transferred te: ‘To Outstanding Salary Ale 16900] Abba 14 Rin 6315 1700 7 Accountan: °Dr Partners’ Capital Ales Ce ke ‘Abba [Rite [Sonat ke ‘Abba [iw [Sonat Particulars @ @ i ie @ ® @ oes] G35 =| By Batance bie 3.20000 190,000 . ‘To Investments Ate 13750] 11.250 — | By Bank Ave - =] 120000 ‘To Goodwill Ae 65,000] 39,000 | By Sonats Current Ale 16000] S000 : To Current Ave sosts | 4412 | By Reserve Ale 48,7510] 26250 . To Balance eld 220.000] 1,40,000 | 120,000 | By Workmen Compensat Fund Ale 15.0] 9000 - By Profit Loss Ale 12500] 7.500 - “407250 2,40,750] 120,000 407250] 240,750 [120,000 Balance Sheet of the new firm Liabilities Amount @ Asets ‘Amount Bills Payable 22,00 | Cast 12000 Creditors 45,000 | Bank 203,000 Salary outstanding 16,000 | Debtors 0,000 ‘Workmen Compensation laim 16000 | Las: Provision fr doubfl debs, ——_(,000) 6000 Curtent Account Stock 66,000 ‘Abia oars Investments 35,000 in au 1,370 | Furniture 75,000 Capital Account Machinery 225,000 ‘Abha 2.20.00 Sonal’ Current Ale 24000 Rit 1.40,000 Sonal 120000 | __4.80,000 7.16000 7.16000 ‘Working Notes: 1. Goodwill of the firm = © 96,000 Sonal’s share of goodwill = 1/4 of 96,000 = € 24,000 2. Bank balance: 83,000 +1,20,000 = & 2,03,000 3. Adjustment of Capital ‘Sonal Capital for 1/4" share 1,20,000 Total Capital of the new firm = % 4,80,000 New ratio: ‘Abha’s old share 5/8, “Abha’s sacrilice 2/3 of 14 = 2/12 Abha’s new share = 5/8 2/1 2 Ritu’s new share = 3/8 — 1/12 = 7/24 Sonal’s share New Ratio = ‘Abha’s Capital 64 1:7:6 1/24 4,80,000 7124 x 4,80,000Or Dr, Revaluation Ale Cr. i ‘Amount i “Amount Particulars a Particulars 5 Te Provision for debtors 325 | By Stock 3.00 To Workmen Compensation Clana 1,500 | By Loss transferred to: ‘To Lass on sale of Investment 3000} Megha’ Capital Ac 173 Ta Provision for Bills discounted 2000] Anitas Capital Ae 1027 Richa’s Capital Ae 685 70s 7005 Dr, Partners’ Capital Ales cr ‘Megha | Anita | Richa ‘Megha | Anita | Richa fame oe lela aaa £ gig "Te Goods Ae 15,000] 9,000] 6000 | By Balance bid “7o000 | 50,000 | 46,000 ‘To Anitals Capital Nc 4.000 2.000 | By Genera Reserve 1yo00} 600) 4.400 To Revaluation Ae (Los)| 1,713] 1,027] 685 | By Meghals Capital (Goodwill) -| 40m) - ToCash At =| 20000] —| ByRichas Capital Goodway =| ion] ‘To AniasLoan Ae -| 3253] —| Bycash Ae 14000] =] 6,000 ‘ToBakane ett 1.05,000 45,000 | By Current Ae soris| =| 328s 1273] 62600 | 3.68 i2sn3| @c00| 3.688 Balance Sheet of the new firm Liabilities “Amount Assets Amount ® © Creditors 27000 | Cash at hand (2,000 + 27,000) 9.000 Bill Payable Debtors ‘Workmen Compensation claim Less: Prison or doubles aaTs Provision for bill discounted Stock 21,600 Anita's Loan Ale Furiture 20,000 Capital Ave Machinery 70.000 Mehga 105,000 “Megha's Current Ae 30713 Richa, 45.000 1,50,000 | Richas Current Ave 3.285 2.16073 216078 ‘Working Notes: Calculation of New Ratio: Gaining Ratio = 4000:2000 or 2:1 Megh 5/10 + 2/10 = 7/10 Richa’s new share = 2/10 + 1/10 = 3/10 New Ratio of Megha and Richa is 7:3. (Capital of the firm = & 1,50,000 ‘Megha’s Capital 7/10 of 1,50,000 = & 1,05,000 [Richa’s Capital 3/10 of 1,50,000 = & 45,000 's new share Accountan: ®26, 27, 29, 30, a. Profit and Loss Appropriation Ae Dr, for the year ended 31st March, 2022 cr. a ee — ‘To Interest on Capital @ 10% pa By Net Profit as per Profit and Loss Ale 50,000 Basu 5,000 By Interest on Drawings AVe Harish 44900 Basu 650 Jadhav 3000} 12,000) Harish 600 To Salary Ae Jadhav 550, 1.800 Harish 6,000 Jadhav 6000} 12,000 To Commission (Basu) 2.500 “Yo Profit transferred to Reserve (109% of 25,300) Basu's Capital Ale (409% of 25300) 10,120 Harishs Capital Ale 30% of 25.300) 7,590 Jadhav’s Capital Ae 20% of 25300) _ 5,060 | 252300 51,800) S10 1. (©) Dr. Debenture Interest Alc: Cr. Debentureholders’ A‘e € 1,60,000 M. (b) Dr. Debentureholders’ Ale; Cr. Bank AVe & 1,60,000 IML, (c)__Dr. Statement of Profit and Loss; Cr. Debenture Interest Ale 8 1,60,000 WW. (&) &1,20,000 V. (d) Dr. Securities Premium Reserve Ave; Cr. Discount on Issue of Debenture Ale VL. (d) Statement of Profit and Loss (6) Cost of material consumed. or as Long-term Debts = € 500,000 ~ 2,00,000 = & 3,00,000 Equity = € 8,00,000 ~ = 3,00,000 = & 5,00,000 3,00,000 _ Debt-Pquity Ratio = 2 5n ony = 3:5, (3,21 (2) Short-term Borrowings Or (6) no flow of cash (b) Amortization of a patent (@) To know the managerial efficiency. (®) To make comparative study with other similar firms. Accountaney—12. (10)2, Particulars Major head Sub head (o) Capital Reserve seholders' Fund Reserves and Surphas (6) Callsin-arears Subscribed but not fly paid up (©) Accrued tacome Current Asses ther Current Assets (2) Callsinadvance Current Lihiites Other Current Liatiiies (0) Trade Marks Nom-Cureat Asets Intangible Asets (Provision foe Tax Correa Lites Shorten Provisions (@) Intra-tirm Analysis is comparison of financial statement of an enterprise for two or more accoui whereas, Inter-firm Analysis is a comparison of fi accounting period. periods, incial statements of two or more enterprises for the same (6) Revenue from operations = & 29,25,000 and Gross Profit on cost is 30% (given) Let cost be 100% then GP = 30% = Revenue from operations is 130%, If Revenue from operation 130% is 29,25,000 Cost of Revenue from operations 130 Cost of Revenue from Operations Inventory Turnover Ratio ‘Average Inventory 250, 00) ‘Average Inventory Average Inventory = 4,50,000 Let Opening Inventory be x Closing inventory will be x + 40,000 5 ste $40,000 = 4,50,000 2 = 2x + 40,000 = 9,00,000 $.60.000 _ 430,000 2 Opening inventory = & 430,000 ‘Closing inventory = € 470,000 Or (@) Let current assets after acquisition of inventories be x Current Ratio = _CurTent Assets (Current Lial 90,000 + 10,000Working capital after acquisition = © 2,00,000 — & 1,00,000 = & 1,00,000 2,00,000 ~ € 10,000 Current assets before acquisition of inventories = €1,90,000 Working capital before acquisition = & 1,90,000 ~ 90,000 100,000 (6) A “too high trade receivable turnover ratio’ shows efficient collection policy of the concern and working capital, unnecessarily being tied up in trade receivables. RK. Ltd Cash Flow Statement Jor the year ended 31st March 2022 Se. No, Particulars Amount ‘Amount @ @ ‘AL | Cash ows from Operating Activities: [Net Profit before Tax and Extraordinary Tens (WN1) 336,000 Add: Depreciation of Equipments 9,000 Amortisation of Patents so. Interest on Debentures 18.000 Losson Sale of Equipments co. ‘Operating profit before working capital changes San ‘Les: Increase in Trade Recetables (20.000) Increase in Inventories (4.000) Deerease in Trade Payables (20.000) ‘Cash flows fom operations 474.000 Les: Tax pai 80.000) Net cas flows from operating activites 294,000 1B, | Cash ows tom Investing Active Purchase of Patents (50,000) Purchase of Equipment (6.00,000) Sale of Equipment 1.80,000 Purchase of Non-current Investment 00,000) Net sh used in investing activities (6.10,000) (Cash flows from Financing Activites: Issue of Share Capital 150.00 Issue of Debentures 150,000 Proposed Dividend pad (26,000) Interest on Debentures paid (18,000) Net Cash flows from financing activities 256,000 D__ | Netincreae in Cash and Cash Equivalents (A +B + ©) B, | 4d: Opening Cash and Cash Equivalents (1,00,000 + 60,000) | Closing Cash and Cash Equivalents (170,000 + 30,000)Working Notes: 1, Calculation of Net Profit before Tax and Extraordinary Items: Particlars Amount ®) ‘Surplus as per Statement of Profit and Loss 90,000 Ad Provision for Tax 2.20,000 Proposed dividend 26,00 [Net Profit before Tax and Extraordin 3.36000 Dr, Patent Ale Cr = ‘Amount a ‘Amount ® @ ‘To Balance bid 1,80,000 | By Statement of Profit and Loss (Amortsation) 0,000 To Bank Ale 90,000 | By Balance ed 2.20.00 2.70000 2.70000 3 Dr Equipment Ale cr. Partieoars| Amount Particulars ae ® @ “To Balance Wid 3,75,000 | By Statement of Profit and Loss (Depreciation) 0,000 ‘ToBank Ale 5,0,000 | By Bank Ale (Balancing fig.) 1,80,000 By Statement of Profit and Loss (Loss om sale) 0.000 By Balance cid 545,000 875.000 875,000