12 Accountancy sp09

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Class 12 - Accountancy
Sample Paper - 09 (2022-23)
Maximum Marks: 80
Time Allowed: : 3 hours
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. X, Y and Z are partners in a firm who share profits in the ratio of 2:3:5. The firm earned a profit of Rs.1,50,000 for the
year ended December 31, 2004. The profit by mistake was distributed among X, Y and Z in the ratio of 3:2:1
respectively. This error was noted only at the beginning of the next year. Pass necessary Journal entry to rectify the error.
a)
X’s capital A/c ... Dr. 45,000
Y’s capital A/c ... Dr. 5,000
To Z’s capital A/c 50,000
b)
c) No mistake is made by partners
d)
Z’s capital A/c ... Dr. 45,000
To X’s capital A/c 50,000
2. Assertion (A): Unrecorded assets are credited to the revaluation account at the time of admission of a new partner.
Reason (R): Unrecorded assets are gain for the partnership firm because it increases the value of assets.
a) Both A and R are true and R is the correct explanation of A.
b) Both A and R are true but R is not the correct explanation of A.
c) A is true but R is false.
d) A is false but R is true.
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3. Goodwill given in the old Balance Sheet will be:
a) Credited to old Partners Capital accounts
b) Written off to the old partners
c) Written off by the Sacrificing partners
d) Distributed by Gainer partners
OR
The amount of goodwill is paid by the new partner:
a) for purchase of assets
b) for sharing the profit
c) None of these
d) for the payment of capital
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4. Agro Ltd. invited application for 20,000 shares of the value of Rs.10 each. The amount is payable as Rs.3 on application
and Rs.5 on allotment and balance on First and Final call. Applications were received for 30,000 shares. Find out the
amount received on the application.
a) Share Application A/c ... Dr. 40,000
To Share Capital A/c ... 40,000
b) Share Capital A/c ... Dr. ... 10,000
To Share ApplicationA/c ... 10,000
c) Bank A/c ... Dr. 90,000
To Share Application A/c ... 90,000
d) Share Capital A/c ... Dr. 20,000
To Share ApplicationA/c ... 20,000
OR
20,000 shares having face value Rs.10. Shares are issued for public subscription at a premium of 10%. The full amount
was payable on application. Applications were received for 30,000 shares and pro-rata allotment was made. Find the
amount to be adjusted in securities premium?
a) 1,00,000
b) 10,000
c) 30,000
d) 20,000
5. Seashore India Ltd. issued 5000, 8% Debentures of Rs.100 each payable as Rs.20 on Application Rs.30 on Allotment
Rs.50 on First and Final call. All the debentures were applied for and allotted. All the calls were duly received. What will
be the journal entry of First and final call received will be recorded.
a)
Bank A/c Dr. 3,00,000
To Debentures First and Final call A/c 3,00,000
b)
Bank A/c Dr. 50,000
To Debentures First and Final call A/c 50,000

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c)
Bank A/c Dr. 5,00,000
d)
Bank A/c Dr. 2,50,000
6. Nilay and Poppy were partners sharing profits equally. Their firm was dissolved. Nilay agreed to take over 50% of the
stock at 10% less on its book value and the remaining stock was sold at a gain of 15%. Balance sheet show stock
amounted Rs 35000. By what amount Bank A/c (stock realised) should be shown on the credit side of realization
account?
a) ₹20000
b) ₹17750
c) ₹15500
d) ₹20125
OR
If Creditors are given ₹20,000 in the balance sheet. But nothing is mentioned under additional information about the
payment of the same. How much amount will be paid to the creditors?
a) Payment after 10% Discount
b) No Payment to Creditors
c) Half Amount Rs.10,000
d) Full Amount ₹20,000

7. Reissue of forfeited shares can be done at ________.
a) Par and premium only
b) Only at par
c) Par and discount only
d) Par, premium or discount

8. Pass journal entry for receiving application money by company ABC Ltd which issued 5000 10% Debentures of ₹100
each payable as ₹40 on the application and ₹60 on the allotment. Applications were received for 6000 debentures.
Applicants for 500 debentures were sent a letter of regret and money was returned. The allotment was made
proportionately to the remaining applicants. Oversubscription was applied to the amount due on allotment.
a)
Bank A/c Dr. 5,50,000
To Debentures Application A/c 5,50,000
b)
Bank A/c Dr. 2,20,000
c)
Bank A/c Dr. 5,000,000

d)
Bank A/c Dr. 2,40,000

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OR
What journal entry to be passed if a company issues its debentures at a premium and applications are
oversubscribed. Out of which some are rejected and pro-rata allotment made to the remaining. Full amount is payable on
application only.
a)
i. Bank A/c ... Dr.
To Deb. App. & Allot. A/c
To Securities premium reserve A/c

ii. Deb. App. & Allot. A/c ... Dr.
To Debenture A/c
To Bank A/c
b)
i. Bank A/c ... Dr.

To % Debenture A/c
To Securities premium A/c
c)
i. Bank A/c ... Dr.

To % Debenture A/c
To Bank A/c
d)
i. Bank A/c ... Dr.

To % Debenture A/c
To Bank A/c
Question No. 9 to 10 are based on the given text. Read the text carefully and answer the questions:
X, Y and Z are sharing profits and losses in the ratio of 3:2:1. They decide to share future profits and losses in the ratio
of 5:3:2 with effect from 1st April, 2019. On this date, the Balance sheet showed Contingency Reserve ₹ 9,000 and
Deferred Advertisement Expenditure ₹ 30,000. Goodwill was valued at ₹ 4,80,000.
9. What is the journal entry for Deferred Advertisement Expenditure ₹ 30,000
i. Dr. X Capital a/c ₹ 15,000; Dr. Y Capital a/c ₹ 10,000; Dr. Z Capital a/c ₹ 5,000; Cr. Deferred Advertisement
Expenditure a/c ₹ 30,000
ii. Dr. X Capital a/c ₹15,000; Dr. Y Capital a/c ₹ 9,000; Dr. Z Capital a/c ₹ 6,000; Cr. Deferred Advertisement
Expenditure a/c ₹ 30,000
iii. Dr. Z Capital a/c ₹ 10,000; Cr. Y Capital a/c ₹ 10,000
iv. None of these

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a) Option (ii)
b) Option (iv)
c) Option (iii)
d) Option (i)
10. What is the journal entry for Contingency Reserve ₹ 9,000
i. Dr. Contingency Reserve a/c ₹ 9,000; Cr. X Capital a/c ₹ 4,500; Cr. Y Capital a/c ₹ 3,000; Cr. Z Capital a/c ₹ 1,500
ii. Dr. Contingency Reserve a/c ₹ 9,000; Cr. X Capital a/c ₹ 4,500; Cr. Y Capital a/c ₹ 2,700; Cr. Z Capital a/c ₹ 1,800
iii. Dr. Z Capital a/c ₹ 300; Cr. Y Capital a/c ₹ 300
iv. None of these
a) Option (iv)
b) Option (ii)
c) Option (iii)
d) Option (i)
11. While passing the entry for a refund of money if the applications are rejected. Which account should be credited:
a) Debenture Application A/c
b) Debenture Allotment A/c
c) Securities Premium A/c
d) Bank A/c
12. X, Y and Z are partners sharing profits in the ratio of 4:3:2. They admit a new partner M in the partnership firm for
1
3
share in future profit. What will be the new ratio of all the partners?
a) 8 : 6 : 2 : 1
b) 8 : 6 : 5 : 3
c) 8 : 6 : 4 : 2
d) 8 : 6 : 4 : 9
13. Normal profit is calculated to value goodwill
a) None of these
b) by adding abnormal losses
c) by deducting abnormal gains and adding abnormal losses
d) by deducting abnormal gains (profit)

14. What will be the adjusting entry to provide for Interest on Partner’s loan?
a) Interest on Parntners Loan A/c Dr.
To partners Loan A/c
b) Parntners Loan A/c Cr.
c) Parntners A/c Dr.
d) Parntners Loan A/c Dr.
To partners Capital A/c

15. Due to the death of a partner, the loss incurred upto the date of death of such a deceased partner will be recorded
_________.
a) Both Debited to outgoing partner capital account as well as in the asset side of balance sheet
b) Debited to deceased partner capital account
c) Balance sheet assets side
d) Revaluation Account
OR

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Firm may continue with the remaining partners after death of partner by purchasing or acquiring the share of ________
partner.
a) Admitted partner
b) Retired partner
c) Deceased partner
d) Both Deceased and Retired partner

16. A and B are partners in a firm. They admit C for share. C is to contribute capital proportionate to his share in the firm.
1
The combined capital of A and B after all adjustment is Rs.36,000. Find out the amount of capital to be contributed by C.
a) ₹6,000
b) ₹8,000
c) ₹9,000
d) ₹7,500
17. Sara, Sita and Meena were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. Sara dies on 30th June,
2017, whereas the firm closes its books on 31st March every year. According to their Partnership Deed Sara’s
representatives would be entitled to get share in the interim profits of the firm calculated on sales basis. Sales and profit
for the year 2016-17 were ₹ 6,00,000 and ₹ 1,80,000 respectively and sales in the year 2017-18, till the date of her death
amounted to ₹ 1,20,000. You are required to:
i. Calculate Sara’s share of interim profit.
ii. Pass the necessary journal entry for giving Sara her share of interim profit.
18. Profits of a firm for the year ended 31st March for the last five years were:
Year Ended 31st March, 2015 31st March, 2016 31st March, 2017 31st March, 2018 31st March, 2019
Profits (₹) 20,000 24,000 30,000 25,000 18,000
Calculate value of goodwill on the basis of three years' purchase of Weighted Average Profit after assigning weights 1, 2,
3, 4 and 5 respectively to the profits for years ended 31st March, 2015, 2016, 2017, 2018 and 2019.
19. Zee Ltd. took over the following assets and liabilities of business of Usha Ltd.
Assets : Machinery-Rs.1,00,000, Furniture Rs.1,80,000 Stock Rs.20,000.
Liabilities : Creditors Rs.80,000
The purchases price was agreed at Rs.1,08,000. This is to settle by issue of 12% Debentures at premium of 20%. Pass
necessary Journal entries.
20. A, B and C were partners sharing profits and losses in the ratio of 7 : 3 : 2. From 1st April 2015, they decided to share
profits and losses in the ratio of 8 : 4 : 3. Goodwill is to be valued at the average of three year’s profits preceding the date
of change in profit sharing ratio. The profits for the years ending 31st March 2012, 2013, 2014 and 2015 were ₹ 52,000,
₹ 48,000, ₹ 60,000 and ₹ 90,000 respectively. Give the necessary journal entry.
21. Akshra Ltd. was incorporated with a share capital of ₹2 crore in shares of ₹100 each. The Company purchased Land &
Building for ₹50,00,000 payable in fully paid shares of the Company. Half of the remaining shares were issued for cash
and were taken up by the public and fully paid for.
Pass necessary journal entries and also show the Balance Sheet of the Company.
22. Sonia, Rohit and Udit are partners sharing profits in the ratio of 5 : 3 : 2. Their Balance Sheet as of March 31, 2017, was
as follows:
Balance Sheet of Sonia, Rohit, and Udit
as of March 31, 2017
Liabilities Amount ₹ Assets Amount ₹

Creditors 30,000 Buildings 2,00,000

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Bills payable 30,000 Machinery 40,000
Bank loan 1,20,000 Stock 1,60,000
Sonia’s husband’s loan 1,30,000 Bills receivable 1,20,000
General reserve 80,000 Furniture 80,000

Capitals: Cash at bank 60,000
Sonia 70,000
Rohit 90,000
Udit 1,10,000 2,70,000
6,60,000 6,60,000
The firm was dissolved on that date. Close the books of the firm with following information:
i. Buildings realised for ₹ 1,90,000, Bills receivable realised for ₹ 1,10,000; Stock realised ₹ 1,50,000; and Machinery
sold for ₹ 48,000 and furniture for ₹ 75,000,
ii. Bank loan was settled for ₹ 1,30,000. Creditors and Bills payable were settled at 10% discount,
iii. Rohit paid the realisation expenses of ₹ 10,000 for which he paid ₹ 12,000 for completing the dissolution process.
Prepare necessary ledger accounts.

23. Super Star Ltd. issued a prospectus inviting applications for 2,000 shares of ₹ 10 each at a premium of ₹ 2 per share,
payable as:
On application - ₹ 3 per share (including ₹ 1 premium),
On allotment - ₹ 4 per share (including ₹ 1 premium),
On first call - ₹ 3 per share

On second and final call - ₹ 2 per share.
Applications were received for 3,000 shares and pro rata allotment was made on the applications for 2,400 shares . It was
decided to utilise excess application money towards the amount due on allotment .
Ramesh, to whom 40 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the
first call, his shares were forfeited.
Rajesh, who applied for 72 shares failed to pay the two calls and on such failure, his shares were forfeited .
Of the shares forfeited, 80 shares were sold to Krishan credited as fully paid-up for ₹ 9 per share, the whole of Ramesh's
shares being included.
Give journal entries to record the above transactions (including cash transactions).
24. A, B, C and D were partners in a firm sharing profits in the ratio of 3 : 2 : 3 : 2. On 1st April, 2016 their balance sheet
was as follows:
Balance Sheet
as at 1stApril, 2016
Liabilities Amit (₹) Assets Amit (₹)

Sundry Creditors 90,000 Fixed Assets 8,25,000
Workmen Compensation Reserve 25,000 Current Assets 3,00,000
Capital A/cs
A 2,00,000
B 2,50,000

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C 2,50,000
D 3,10,000 10,10,000
11,25,000 11,25,000
From the above date the partners decided to share future profits in the ratio of 4 : 3 : 2 : 1. For this purpose the goodwill
of the firm was valued at ₹ 2,70,000.
It was also considered that

i. Claim against workmen compensation reserve will be estimated at ₹ 30,000 and fixed assets will be depreciated by ₹
25,000.
ii. The capitals of the partners will be adjusted according to the new profit sharing ratio by opening current accounts of
the partners.
Prepare the revaluation account, partners’ capital accounts and the balance sheet of the reconstituted firm.
25. Ram, Krishna and Mohan are partners in a firm, sharing profits and losses in the ratio of 3 : 5 : 2. On 31st March, 2014,
their Balance Sheet was as under:
BALANCE SHEET
as at 31st March, 2014
Liabilities ₹ Assets ₹
Creditors 39,200 Land and Building 48,000
General Reserve 16,000 Plant 72,000

Capital A/cs: Inventory 34,000
Ram 76,800 Trade Marks 26,400
Krishna 69,600 Bills Receivables 39,200

Mohan 54,000 2,00,400 Cash in Hand 24,000
Advertisement Suspense 12,000
2,55,600 2,55,600
Krishna died on 30th September, 2014. An agreement was reached amongst Ram, Mohan and Krishna’s legal
representative that:
i. Goodwill to be valued at 2 year’s purchase of the average profits of the previous three years, which were:
Year: 2011-12 2012-13 2013-14
Profit: ₹ 31,200 ₹ 28,800 ₹ 36,000
ii. Trademarks to be revalued at ₹ 9,200; plant at 80% of its book value and land building at ₹ 57,600.
iii. Krishna’s share of profit to the date of his death to be calculated on the basis of previous year’s profit.
iv. Interest on capital to be provided @ 10% per annum.
v. ₹ 60,080 to be paid in cash to Krishna’s legal representative and balance to be transferred to the legal representative’s
loan account.
You are required to prepare:

i. Revaluation Account.
ii. Krishna’s Capital Account, and
iii. Krishna’s Legal Representative’s Account.

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26. Surya Ltd. issued 2,500, 15% Debentures of ₹100 each at a discount of 10% payable as follows:
₹25 on the application; ₹25 on the allotment and the balance on First Call.
Applications were received for 2,000 debentures and the allotment was made. All the money was duly received.
Expenses on the issue of debentures amounted to ₹8,000. Directors decided to write off 1/5th of Expenses on Issue A/c
and Discount on Issue of Debentures A/c from Statement of Profit and Loss each year.
Pass journal entries (for the first year only).

Part B :- Analysis of Financial Statements
27. Is payment for the purchase of fixed assets will be classified as an operating activity for both finance and non-finance
company?
a) No these are financing activities
b) Yes these are Operating activities
c) Not to be recorded
d) No these are investing activities
OR
A Short term investment of Rs. 20,000 is sold at par. It will result in ________.
a) None of these
b) Outflow of cash
c) Inflow of cash
d) No flow of cash
28. Comparative Financial Statement is an example of
a) Horizontal analysis
b) Vertical Analysis
c) Internal Analysis
d) External analysis
29. Which of the following is not a cash inflow?
a) Sale of asset at loss
b) Interest received on investment
c) Goods purchased in cash
d) Goods sold in cash
OR
The objectives of Cash Flow Statement are

A. Analysis of cash position
B. Short-term cash planning
C. Evaluation of liquidity
D. Comparison of Operating Performance
a) A, B, C, D
b) Both A and C
c) Both A and B
d) Both B and D
30. The analysis of a financial statement by a shareholder is an example of:
a) Internal Analysis
b) Vertical Analysis

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c) External Analysis
d) Horizontal Analysis
31. From the following information of A Ltd. for the year ended 31st March, 2015 prepare Notes to Accounts on Finance
Costs:
₹
(i) Interest paid on Debentures 1,80,000
(ii) Interest paid on Term Loan 3,10,000

(iii) Loan Processing Charges 60,000
(iv) Interest received on Term Deposits 75,000
(v) Discount on Issue of Debentures written off 20,000

(vi) Interest paid on Cash Credit 2,50,000
32. Following information is available for the year ending 31st March, 2018. Calculate Gross Profit Ratio:
₹
Cash Revenue from Operations (Cash Sales) 2,00,000
Purchases: Cash 1,50,000
Credit 4,50,000
Carriage Inwards 6,000
Salaries 75,000
Decrease in Inventory 80,000

Return Outwards 20,000
Wages 50,000
Ratio of Cash Revenue from Operations and Credit Revenue from Operations 1 : 4.
33. Calculate any three of the following ratios with the help of the information given below:
i. Operating Ratio
ii. Gross Profit Ratio
iii. Quick Ratio
iv. Working Capital Turnover Ratio
v. Proprietary Ratio.
Information: Equity share capital ₹ 1,00,000; 8% Preference share capital ₹ 80,000; 9% Debentures ₹ 60,000;
General Reserve ₹ 10,000; Revenue from operation ₹ 2,00,000; Opening Inventory ₹ 12,000 Purchases ₹ 1,20,000;
Wages ₹ 8,000; Closing Inventory ₹ 18,000; Selling and Distribution Expenses ₹ 2000;
Other current assets ₹ 50,000; Fixed assets ₹ 2,12,000 and Current Liabilities ₹ 30,000.
OR
Cash Revenue from Operations ₹1,00,000; Credit Revenue from Operations ₹3,00,000; Gross Profit 30% on Revenue
from Operations; Inventory Turnover Ratio = 2 Times.
Calculate Opening Inventory and Closing Inventory in each of the following cases:

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Case 1: If Opening Inventory is 1
3
rd of the inventory at the end.
Case 2: If Closing Inventory is 25% less than the inventory in the beginning.
Case 3: If Opening Inventory is 75% of Closing Inventory and Closing Inventory is 30% of Revenue from Operations.
34. From the following Balance Sheet Himmat Ltd., prepare Cash Flow statement.
Particulars Note No. 31st March, 2020 31st March, 2019
₹ ₹
1. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital 15,00,000 10,00,000
(b) Reserves and Surplus
7,50,000 6,00,000
(Surplus, i.e., Balance in Statement of Profit and Loss)
2. Non-Current Liabilities
Long-term Borrowings 1 1,00,000 2,00,000
3. Current Liabilities
(a) Trade Payables 1,00,000 1,10,000
(b) Short-term Borrowings 2 95,000 80,000
Total 25,45,000 19,90,000

II.ASSETS
1. Non-Current Assets
(a) Fixed Assets

(i) Tangible Assets 3 10,10,000 12,00,000
(ii) Intangible Assets: Goodwill 1,80,000 2,00,000
(b) Non-Current Investments 6,00,000 -

2. Current Assets
(a) Inventories 1,80,000 1,00,000
(b) Trade Receivables 2,00,000 1,50,000

(c) Cash and Cash Equivalents 3,75,000 3,40,000
Total 25,45,000 19,90,000
Notes to Accounts
Particulars 31st March, 2020 31st March, 2019
₹ ₹
1. Long-term Borrowings
2,000, 10% Debentures of ₹ 100 each - 2,00,000
Bank Loan 1,00,000

1,00,000 2,00,000
2. Short-term Provisions

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Provision for Tax 95,000 80,000

3. Tangible Assets
Land and Building 6,50,000 8,00,000
Plant and Machinery 3,60,000 4,00,000

10,10,000 12,00,000
4. Cash and Cash Equivalents
Cash in Hand 70,000 50,000

Bank Balance 3,05,000 2,90,000
3,75,000 3,40,000
Additional Information:
i. Contingent Liabilitiy: 31st March, 2020 31st March, 2019

Proposed Dividend 20% 15%
ii. Income tax paid during the yaear includes ₹ 15,000 paid towards Dividend Distribution Tax.
iii. Land and Building of book value ₹ 1,50,000 was sold at a profit of 10%
iv. The rate of depreciation on Plant and Machinery is 10%.

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Class 12 - Accountancy
Sample Paper - 09 (2022-23)
Solution
Part A:- Accounting for Partnership Firms and Companies

1. (a)
Explanation: Distribution of profit:
i. Actual distribution of profit in 2:3:5 Ratio = X Rs.30,000; Y Rs.45,000 and Z Rs.75,000
ii. Wrongly distributed in 3:2:1 Ratio = X Rs.75,000; Y Rs.50,000 and Z Rs.25,000
iii. Adjustment : X Dr.45,000; Y Dr.5,000 and Z Cr.50,000.
Entry will be:
2. (d) A is false but R is true.
Explanation: A is false but R is true.

3. (b) Written off to the old partners
Explanation: Goodwill existing in the old balance sheet of a partnership firm before admitting a new partner will be
written off to the capital accounts of the old partners in their old profit sharing ratio. This Goodwill belongs to old
partners only.
OR
(b) for sharing the profit
Explanation: New partner paid amount of goodwill for sharing the profit.
4. (c) Bank A/c ... Dr. 90,000
To Share Application A/c ... 90,000
Explanation: Amount received by the company on application is ₹90,000. i.e. 30,000 (Applications received) × 3 =
90,000
OR
(d) 20,000
Explanation: Security premium amount = 10 × 10%= 1
Amount to be adjusted in securities premium ₹20,000.
i.e. 20,000 Shares × Premium ₹1 = 20,000
5. (d)
Bank A/c Dr. 2,50,000

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Explanation: First and Final call money = Rs. 50 per debenture
No of Debentures = 5000
Final call amount = 5000 × 50 = 250000

Bank A/c Dr. 2,50,000

6. (d) ₹20125
Explanation: Actual stock transferred to the debit side of realization account ₹35,000.
Stock taken over by partner 50% of 35,000 = 17,500 - 1750 (17500 × 10%) = 15,750
Remaining stock = 35,000 - 17,500 = 17,500
Realised value of stock = 17,500 + 2625 (17500 × 15%) = 20,125
OR
(d) Full Amount ₹20,000
Explanation: All liabilities will be paid at the time of dissolution of a partnership firm. Whether some information is
given or not about the payment of the same. In this case, nothing is mentioned about the payment of creditors but it is
mandatory to pay the full amount ₹20,000 to the creditors.
Entry Will be:
Realisation A/c ... Dr
To Bank A/c
7. (d) Par, premium or discount
Explanation: Forfeited shares can be reissued at par, premium or discount. Directors of the company have authority to
reissue forfeited shares at par, premium or discount. Max discount allowed on the reissue of shares is the amount
credited to forfeited shares.
8. (d)
Bank A/c Dr. 2,40,000
Explanation: Applications are received for 6000 shares
Application money is Rs.40
So application money is received for full subscribed share whether it is oversubscribed or undersubscribed
Bank A/c Dr. 2,40,000
OR
(d)
i. Bank A/c ... Dr.

To % Debenture A/c
To Bank A/c
Explanation: The following journal entry will be recorded in the books:
i. Bank A/c ... Dr. (with application money received)

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To % Debenture A/c (face value)
To Securities premium reserve A/c (premium)
To Bank A/c (amount rejected)

At the time of allotment excess money should be refunded so bank account will be credit with that amount.
9. a. (d) Option (i)
Explanation: Dr. X Capital a/c ₹ 15,000; Dr. Y Capital a/c ₹ 10,000; Dr. Z Capital a/c ₹ 5,000; Cr. Deferred
Advertisement Expenditure a/c ₹ 30,000
10. a. (d) Option (i)
Explanation: Dr. Contingency Reserve a/c ₹ 9,000; Cr. X Capital a/c ₹ 4,500; Cr. Y Capital a/c ₹ 3,000; Cr. Z
Capital a/c ₹ 1,500
11. (d) Bank A/c
Explanation: When a company reject excess debenture applications received and paid back their money, in such a case
bank account should be credited with the amount to be refunded to the applicants.
Entry will be:
Debenture App. & Allot. A/c ... Dr
Discount of Issue of Debenture A/c ... Dr
To % Debenture A/c
To Security Premium A/c
To Bank A/c (Refund of money)

12. (d) 8 : 6 : 4 : 9
Explanation: Calculation of the new ratio:
Let the profit be = 1
Remaining profit after M’s share = 1 - 1
3
= 2
X's new share = 4
9
× 2
3
= 27
8

Y's new share = × =
3 2 6
9 3 27
Z's share of profit = 2
9
×
2
3
= 4
27

M's new share = 1
3
or 9

27
New ratio of X, Y, Z & M will be 8 : 6 : 4 : 9
Now, divide this remaining profit in X, Y and Z to find out the new ratio
13. (c) by deducting abnormal gains and adding abnormal losses
Explanation: by deducting abnormal gains and adding abnormal losses

14. (a) Interest on Parntners Loan A/c Dr.
Explanation: Inerest on partner’s loan is a charge against the profit. It should be shown in the debit side of Profit and
Loss account and credit side of Partner’s Loan account. In a normal situation Interest on partner’s loan should not be
shown in the partners capital account or partners current account.
15. (a) Both Debited to outgoing partner capital account as well as in the asset side of balance sheet
Explanation: The amount of loss due to the deceased partner (up to the date of his death) will be debited to deceased
partner capital account and same will be shown in the asset side of the balance sheet as Profit and Loss suspense account.
OR
(c) Deceased partner
Explanation: Reconstitution of partnership takes place at the time of retirement or death of a partner. A firm may

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continue its business even after the death of a partner, with the consent of continuing partners. In such a case, the share
of a deceased partner will be purchased or acquired or gained by the remaining partner in gaining ratio.
16. (c) ₹9,000
Explanation: Amount to be brought by C as his capital:
Let total share be 1
Remaining Share = 1 - 1
5
= 4
Reciprocal of remaining share = 5
Capital brought by C = 36,000 × 5

×
1
5
= 9,000
4
Profit (Last Year)
17. i. Ratio of Profit to Sales = × 100
Sales (Last Year)
1,80,000
= 6,00,000
× 100 = 30%
ii. Profit upto the date of death = 1,20,000 × = ₹ 36,000
30
100
iii. Sara's share of profit = 36,000 × = ₹ 14,400 2
JOURNAL ENTRIES
Dr. Cr.
Date Particulars L.F.
(₹) (₹)
2017 June
Profit & Loss Suspense A/c Dr. 14,400
30
To Sara's Capital A/c 14,400

(Sara's share of profit up to the date of death transfer to profit and loss

suspense account)
18. Calculation of goodwill-
Year Profit (Rs.) × Weight = Product (Rs.)
2015 20,000 × 1 = 20,000
2016 24,000 × 2 = 48,000

2017 30,000 × 3 = 90,000
2018 25,000 × 4 = 1,00,000
2019 18,000 × 5 = 90,000

Total 15 3,48,000
Weighted Average Profit = Total Product of Profit

Total of weight
3,48,000
=
15
= ₹ 23,200
Goodwill = Weighted Average Profit × Number of Year's of Purchase
= 23,200 × 3 = ₹ 69,600
19. Books Of Zee Ltd.
Journal
Date Particulars L.F. Debit (Rs.) Credit (Rs.)
Machine A/c Dr. 1,00,000 ...
Furniture A/c Dr. 1,80,000 ...

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Stock A/c Dr. 20,000 ...
To Creditors A/c ... 80,000

To Capital Reserve A/c (Balancing Figure) ... 1,12,000
To Usha Co. Ltd. ... 1,08,000
(Being Business purchased of Usha Ltd.) ... ...

Usha Co. Ltd Dr. 1,08,000 ...
To 12% Debentures A/c ... 90,000
To Security Premium A/c ... 18,000

(Being issue of 900 Dentures of Rs. 100 each at premium of 20%) ... ...
Calculations :
Net assets = Total assets- Liabilities
= Rs.3,00,000 – Rs.80,000
= Rs.2,20,000
Capital Reserve = Net assets – Purchase consideration
= Rs.2,20,000 – Rs.1,08,000
= Rs.1,12,000.
Number of Debenture issued= Purchase consideration / Issue Price of Debenture
= 108000/(100+20)
= 900
₹48,000 + 60,000 + 90,000
20. Value of goodwill = 3
= ₹ 66,000
Old Ratio of A, B, and C = 7 : 3 : 2
New Ratio of A, B, and C = 8 : 4 : 3
Sacrifice or Gain:
A= (Sacrifice)
7 8 35 − 32 3
− = =
12 15 60 60
B= (Gain)
3 4 15 − 16 1
− = =
12 15 60 60
10 − 12
C = (Gain)
2 3 2
− = =
12 15 60 60
In the books of Firm
Journal
Dr. Cr.
Date Particular L.F.
(₹) (₹)
2015 April
B's Capital A/c (1/60 of ₹ 66,000) Dr. 1,100
1
C's Capital A/c (2/60 of ₹ 66,000) Dr. 2,200
To A's Capital A/c (3/60 of ₹ 66,000)
(Adjustment for goodwill due to change in profit sharing ratio)(Refer Working 3,300
Note)
21. Journal of Akshra Ltd.
Date Particulars L.F. Dr. (₹) Cr. (₹)

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Land and Building A/c Dr. 50,00,000
To Vendors A/c 50,00,000
(Purchase of Land and Building from .........)
Vendors A/c Dr. 50,00,000

To Share Capital A/c 50,00,000
(Issue of 50,000 shares of ₹100 each fully paid to Vendors)
Bank A/c Dr. 75,00,000

To Share Application and Allotment A/c 75,00,000
(Application money received for 75,000 shares @ ₹100 per share)
Share Application and Allotment A/c Dr. 75,00,000

To Share Capital A/c 75,00,000
(Transfer of application money on the allotment of shares)
BALANCE SHEET OF AKSHRA LTD.
as at ....................
Particulars Note No. Current Year Previous Year

I. EQUITY AND LIABILITIES: ₹ ₹
Shareholder's Funds:
(a) Share Capital 1 1,25,00,000

1,25,00,000
II. ASSETS:
(1) Non-Current Assets:

Fixed Assets:
(i) Tangible Assets 2 50,00,000
(2) Current Assets:

Cash and Cash Equivalents 3 75,00,00
1,25,00,000
Notes to Accounts:
₹
(1) Share Capital
Authorised Capital:
2,00,000 Shares of ₹100 each 2,00,00,000

Issued Subscribed and fully paid Capital:
1,25,000 Shares of ₹100 each fully paid
(Out of these 50,000 shares have been allotted as fully paid up for consideration other than cash) 1,25,00,000
(2) Fixed Assets

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(i) Tangible Assets
Land and Buildings 50,00,000

(3) Cash and Cash Equivalents:
Cash at Bank 75,00,000
22. Books of Sonia, Rohit and Udit
Realisation Account
Dr. Cr.
Particulars Amount ₹ Particulars Amount ₹

Buildings 2,00,000 Creditors 30,000
Machinery 40,000 Bills payable 30,000
Stock 1,60,000 Bank loan 1,20,000

Bills receivable 1,20,000 Sonia’s husband’s loan 1,30,000
Furniture 80,000 Bank:
Bank (Bank Loan) 1,30,000 Buildings 1,90,000

Bank (creditors and Bills payable) 54,000 Bills receivable 1,10,000
Bank (Sonia’s husband's loan) 1,30,000 Stock 1,50,000
Rohit’s capital (reslisation expenses) 12,000 Machinery 48,000

Furniture 75,000
Loss transferred to capital accounts:
Sonia 21,500
Rohit 12,900
Udit 8,600 43,000
9,26,000 9,26,000
Partners Capital Accounts
Dr. Cr.
Date Particulars J.F. Sonia ₹ Rohit ₹ Udit ₹ Date Particulars J.F. Sonia ₹ Rohit ₹ Udit ₹
Realisation
21,500 12,900 8,600 Balance b/d 70,000 90,000 1,10,000

(Loss)
Realisation (remune-
Bank 88,500 1,13,100 1,17,400 - 12,000 -
ration)
General
40,000 24,000 16,000

reserve
1,10,000 1,26,000 1,26,000 1,10,000 1,26,000 1,26,000
Bank Account

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Dr. Cr.
Date 2017 Particulars Amount ₹ Date 2017 Particulars Amount ₹
Balance b/d 17,000 Realisation (bank loan) 1,30,000
Realisation (assets realised) 1,89,000 Realisation (creditors and bills payable) 54,000
Realisation (Sonia’s husband loan) 1,30,000
Sonia’s capital 88,500
Rohit’s capital 1,13,100

Udit’s capital 1,17,400
6,33,000 6,33,000
Note: No entry has been recorded in firm’s books for the actual realisation expenses incurred by Rohit because he gets
₹ 12,000 as his remuneration which has been duly accounted for.
23. Issued capital 2,000 shares of ₹ 10 each at premium of ₹ 2 Applied shares 3,000
Allotment made as: Payable as:
Applied Allotted Application ₹ 3 (2 + 1)

2,400 2,000 Allotment ₹ 4 (3 + 1)
600 NIL First Call ₹3
Final Call ₹2
3,000 2,000 ₹ 12 (10 + 2) per share
Books of Super Star Ltd.
Journal
Dr. Cr.
Date Particulars L.F.
(₹) (₹)
Bank A/c Dr. 9,000

To Share Application A/c 9,000
(Share application money received for 3,000 shares at ₹ 3 per share including ₹ 1

premium)
Share Application A/c Dr. 9,000
To Share Capital A/c 4,000
To Securities Premium A/c 2,000

To Share Allotment A/c 1,200
To Bank A/c 1,800
(Share application money of 2,000 shares transferred to Share Capital and securities
premium at ₹ 2, and ₹ 1 each respectively, ₹ 1,800 adjusted on allotment and
remaining ₹ 1,200 refunded)
Share Allotment A/c Dr. 8,000

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To Securities Premium A/c 2,000
(Allotment due on 2,000 shares at ₹ 4 per share including ₹ 1 premium)
Bank A/c Dr. 6,664

To Share Allotment A/c 6,664
(Allotment received for 1960 shares after adjustment of excess application money)
Share First Call A/c Dr. 6,000

(First call due on 2,000 shares of at ₹ 3 per share)
Bank A/c Dr. 5,700

To Share First Call A/c 5,700
(Share First Call received for 1,900 shares)
Share Capital A/c Dr. 320

Securities Premium A/c Dr. 40
To Share Forfeiture A/c (144 - 40) 104
To Share Allotment A/c 136

To Share First Call A/c 120
(40 shares of ₹ 10 each, ₹ 8 called-up for non-payment of money due on allotment and

first including Re 1 premium)
Share Final Call A/c Dr. 3,920
(Final call due on 1,960 shares at ₹ 2 each)

Bank A/c Dr. 3,800
To Share Final Call A/c 3,800
(Final call received for 1,900 shares)

Share Capital A/c Dr. 600
To Share Forfeiture A/c 300
To Share First Call A/c 180

To Share Final Call A/c 120
(60 shares forfeited for the non-payment of first call and final call money)
Bank A/c Dr. 720

Share Forfeiture A/c Dr. 80
To Share Capital A/c 800
(80 shares of ₹ 10 each re-issued at ₹ 9 per share fully paid-up)

Share Forfeiture A/c Dr. 224
To Capital Reserve A/c 224

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(Balance in Share Forfeiture Account of 80 re-issued shares transferred to Capital
Reserve)
Working Notes:-
Ramesh’s Shares
2,400
Number of shares applied = 2,000
× 40 = 48 shares
Money received on Application (48 shares × ₹ 3) = ₹ 144
Less: Application money adjusted to Share Capital (40 shares × ₹ 2) = ₹ 80

Less: Securities Premium (40 shares × Re 1) = ₹ 40
Excess money Application = ₹ 24
Allotment due (40 shares × ₹ 4) = ₹ 160
Less: Excess money on Application = ₹ 24

Calls-in-Arrears = ₹ 136
Rajesh’s Shares
2,000
Number of shares allotted = 2,400
× 72 = 60 shares
Share Allotment
Money due on Allotment (2,000 shares × ₹ 4) 8,000
Less: Excess application money adjusted 1,200

Less: Calls-in-Arrears 136
Money received on Allotment 6,664

Share First Call
Money due on First Call (2,000 shares × ₹ 3) 6,000
Less: Calls-in-Arrears on Ramesh (40 shares × 3) 120
Less: Calls-in-Arrears on Rajesh (60 shares × 3) 180

Money received on First Call 5,700
Share Final Call
Money due on Final Call (1,960 shares × ₹ 2) 3920
Less: Calls in Arrest on Rajesh (60 shares × ₹ 2) 120

Money received on Final Call 3,800
Capital Reserve
Ramesh
Money received from Ramesh 144
Less: Securities Premium (40 shares × Re 1) 40
Share Forfeiture Cr. 104
Share forfeiture 40 × ₹ 1 Dr. 40

Capital Reserve of Ramesh 64
Rajesh
Share Forfeiture Cr. ₹ 5 per share

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Share Forfeiture Dr. ₹ 1 per share
Share Forfeiture after re-issue ₹ 4 per share

Capital Reserve on Rajesh’s shares = Share Forfeiture after re-issue (per share) × No. of shares re-issued
= ₹ 4 × 40
= ₹ 160
Total Capital Reserve = Capital Reserve of 40 shares of Ramesh + Capital Reserve of 40
shares of Rajesh
= 64 + 160
= ₹ 224
24. Dr Revaluation Account Cr

Amt Amt
Particulars Particulars
(₹) (₹)
By Loss on Revaluation Transferred to Capital

To Depreciation on Fixed Assets A/c 25,000
A/ cs
To Provision for Workmen Compensation

5,000 A 9,000
Fund
B 6,000
C 9,000
D 6,000 30,000
30,000 30,000
Dr Partner's Capital Account Cr
Particulars A(₹) B (₹) C (₹) D (₹) Particulars A (₹) B (₹) C (₹) D (₹)
To Revaluation A/c
9000 6000 9000 6000 By Balance b/d 2,00,000 2,50,000 2,50,000 3,10,000
(loss)
To C's Cap. A/c 27,000 - - - By A's Cap. A/c - - 27,000 -
To D's Cap. A/c - 27,000 - - By B's Cap. A/c - - - 27,000
By Current A/c
To Current A/cs
- - 72,000 2,33,000 (Balancing 2,28,000 77,000 - -
(Balancing Figure)
Figure)
To Balance c/d 3,92,000 2,94,000 1,96,000 98,000
4,28,000 3,27,000 2,77,000 3,37,000 4,28,000 3,27,000 2,77,000 3,37,000
Balance Sheet
as at 1st April, 2016
Liabilities Amit (₹) Assets Amit (₹)
Capital A/Cs Fixed Assets 8,25,000

A 3,92,000 (-) Depreciation (25,000) 8,00,000
B 2,94,000 Current Assets 3,00,000
C 1,96,000 Current A/Cs
D 98,000 9,80,000 A 2,28,000

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Current A/Cs D 77,000 3,05,000
C 72,000
D 2,33,000 3,05,000
Workmen Compensation Reserve 30,000
Sundry Creditors 90,000
14,05,000 14,05,000
Working Note:
Calculate of Sacrificing/(Gaining) Share
Sacrificing/(Gaining) Share = Old Share - New Share
3 4 3−4 1
A = − = = ( ) Gain
10 10 10 10
2 3 2−3 1
B = − = = ( ) Gain
10 10 10 10
C =
3
10
−
2
10
=
3−2
10
=
1
10
Gain
2 1 2−1 1
D = − = = Gain
10 10 10 10
Calculation of Goodwill
A's share of goodwill = = ₹ 27,000
1
270, 000 ×
10
B's share of goodwill = 270, 000 ×

1
10
= ₹ 27,000
C's share of goodwill = 270, 000 ×

1
10
= ₹ 27,000
D's share of goodwill = 270, 000 ×

1
10
= ₹ 27,000
Calculation of Adjusted Capitals
Adjusted Capital of A = ₹ 1,64,000
Adjusted Capital of B = ₹ 2,17,000
Adjusted Capital of C = ₹ 2,68,000
Adjusted Capital of D = ₹ 3,31,000
Total Combined Capital = ₹ 1,64,000 + ₹ 2,17,000 + ₹ 2,68,000 + ₹ 3,31,000 = ₹ 9,80,000
New Capital of A = = ₹ 392,000
4
9, 80, 000 ×
10
New Capital of B = 9, 80, 000 ×

3
10
= ₹ 294,000
New Capital of C = 9, 80, 000 ×

2
10
= ₹ 1,96,000
New Capital of D = 9, 80, 000 ×

1
10
= 98,000
Journal Entry Showing Adjustment for Goodwill

A's Capital A/c Dr 27,000
B's Capital A/c Dr 27,000
To C's Capital A/c 27,000
To D's Capital A/c 27,000

While posting in ledger, it has been assumed than A pays to C and B pays to D.
25. Revaluation Account
Particulars Amount (₹) Particulars Amount (₹)
To Trademark A/c 7,200 By Land & Building A/c 9,600
To Plant A/c 14,400 By Revaluation Loss transferred to Capital Accounts:
Ram 3,600

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Krishna 6,000
Mohan 2,400 12,000

21,600 21,600
Krishna's Capital Account
Particulars Amount (₹) Particulars Amount (₹)

To Revaluation A/c 6,000 By Balance b/d 69,600
To Legal Representative's Loan A/c 60,080 By General Reserve A/c 8,000
To Krishna's Legal Representative A/c 56,200 By Profit & Loss A/c 9,000
By Interest on Capital A/c 3,480
By Goodwill A/c 32,200
1,22,280 1,22,280
Balance Sheet
Liabilities Amount (₹) Assets Amount (₹)

Creditors 39,200 Land and Buildings 57,600
Capital Account balances:- Advertisement Suspense 12,000
Ram 51,192 Plant 57,600
Mohan 36,928 88,120 Inventory 34,000
Bank Overdraft 36,080 Trademarks 19,200
Legal Representative's 56,200 Bills Receivables 39,200

Loan A/c
2,19,600 2,19,600
W.N.:
i. Goodwill = ₹ 31,200 + ₹ 28,800 + ₹ 36,000 = ₹ 96,600
= ₹ 64,400
2
= 96, 600 ×
3
Krishna's Goodwill = ₹64, 400 × 5
10
= ₹ 32,200
ii. Interest on Capital = ₹69, 600 × 10
100
×
6
12

= ₹ 3,480
iii. Share of Profit = ₹36, 000 × 6
12
×
10
5

= ₹ 9,000
⇒ Profit & Loss Suspense A/c = ₹ 9,000
iv. Ram's Capital After Revaluation = ₹ 76,800 + ₹ 4,800 - ₹ 19,320 = ₹ 62,280
v. Mohan's Capital after Revaluation = ₹ 54,000
vi. Cash to be Paid ₹ 60,080 + ₹ 3,200 (Reserve)
Cash at Bank ₹ 24,000 - ₹ 12,880 (Goodwill)
Bank OD ₹ 36,080 = ₹ 44,320
26. JOURNAL OF SURYA LTD.

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Date Particulars L.F. Dr. (₹) Cr. (₹)
Bank A/c Dr. 50,000
To 15% Debenture Application 50,000
(Application money received for 2,000 debentures @ ₹25 each)

15% Debenture Allotment A/c Dr. 50,000
To 15% Debentures A/c 50,000
(Application money transferred)
15% Debenture Allotment A/c Dr. 50,000
Discount on Issue of Debentures A/c Dr. 20,000

(Allotment due)
Bank A/c Dr. 50,000
To 15% Debentures Allotment A/c 50,000
(Amount received on allotment)
15% Debentures First & Final Call A/c Dr. 80,000

(First & Final Call due)
Bank A/c Dr 80,000
To 15% Debentures First & Final Call A/c 80,000
(Amount received on First & Final Call)
Expenses on Issue A/c Dr. 8,000
To Bank A/c 8,000

(Expenses paid on issue of debentures)
Statement of Profit & Loss Dr. 5,600
To Discount on Issue of Debenture A/c 4,000
To Expenses on Issue A/c 1,600
(1/5th of 'Discount on debentures' and 1/5th of 'expenses on issue' written off)

It should be noted that in case, the full amount of a debenture is received in one instalment, the amount should be
credited to 'Debenture Application & Allotment A/c', instead of 'Debenture Application A/c'.
Part B :- Analysis of Financial Statements
27. (d) No these are investing activities
Explanation: Purchase of fixed assets will be classified as investing activity for both companies (finance and non-
finance company). As fixed Assets are Non-Current Investment for company.
OR
(d) No flow of cash
Explanation: There will be no flow of cash because short term investment and cash both are part of cash and cash

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equivalents. The decrease in investment and increase in cash will keep Cash and Cash Equivalents are same. Hence we
can say there is no flow of cash.
28. (a) Horizontal analysis
Explanation: Comparative financial statement is an example of Horizontal analysis because it requires comparative
financial statements of two or more accounting periods.
29. (c) Goods purchased in cash
Explanation: Goods purchase in cash is not a cash inflow as in this transaction cash is going out. Hence it is not cash
inflow.
OR
(a) A, B, C, D
Explanation: A, B, C, D
30. (c) External Analysis
Explanation: The analysis of a financial statement by a shareholder is an external analysis.

31. Notes to Accounts of statement of profit and loss account:
Year ended 31.3.2015
Particulars ₹
₹
Finance Costs:
(i) Interest Expenses:
Interest paid on Debentures 1,80,000

Interest paid on Term Loan 3,10,000
Interest paid on Cash Credit 2,50,000 7,40,000
(ii) Other Borrowing Costs:
Loan Processing Charges 60,000
Discount on Issue of Debentures written off 20,000 80,000
Total 8,20,000
32. Revenue from Operations = Cash Revenue from Operations + Credit Revenue from Operations
= ₹ 2,00,000 + ₹ 2,00,000 × = ₹ 10,00,000
Net Purchases = Cash Purchases + Credit Purchases - Return Outwards
= ₹ 1,50,000 + ₹ 4,50,000 - ₹ 20,000 = ₹ 5,80,000
Cost of Revenue from Operations = Purchases + (Opening Inventory - Closing Inventory) + Direct Expenses
= Purchases + Decrease in Inventory + Direct Expenses
= ₹ 5,80,000 + ₹ 80,000 + ₹ 6,000 + ₹ 50,000 = ₹ 7,16,000
Gross Profit = Revenue from Operations - Cost of Revenue from Operations
= ₹ 10,00,000 - ₹ 7,16,000 = ₹ 2,84,000
2,84,000
Gross Profit Ratio = = = 28.4%
Gross Profit
× 100 × 100
Revenue from Operations 10,00,000
33. Operating ratio shows the efficiency of a company's management by comparing the total operating expense of a
company to net sales.
Cost of Revenue from Operations + Operating Expenses

Operating Ratio = × 100
Net Revenue from Operations

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Cost of Revenue from Operations = Opening Inventory + Purchases + Wages - Closing Inventory
= ₹ 12,000 + ₹ 1,20,000 + ₹ 8,000 - ₹ 18,000
= ₹ 1,22,000
1,22,000+{2,000( selling expenses)
Operating Ratio = 2,00,000
× 100 = 62%
Gross profit ratio (GP ratio) is a profitability ratio that shows the relationship between gross profit and total net sales
revenue.
Gross profit
Gross Profit Ratio = Net Revenue from Operations
× 100
Gross Profit = Net Revenue from Operations - Cost of Revenue from Operations
= ₹ 2,00,000 - ₹ 1,22,000 = ₹ 78,000
78,000
Gross Profit Ratio = 2,00,000
× 100 = 39%
Quick ratio is an indicator of a company’s short-term liquidity position and measures a company’s ability to meet its
short-term obligations with its most liquid assets.
Liquid Assets
Quick ratio =
Current Liabilities
50,000
=
30,000
= 1.67 : 1
Working capital turnover is a ratio that measures how efficiently a company is using its working capital to support a
given level of sales.
Cost of Revenue from Operations

Working Capital Turnover Ratio =
Working Capital
Working Capital = Closing Inventory + Other Current Assets - Current Liabilities
= ₹ 18,000 + ₹ 50,000 - ₹ 30,000 = ₹ 38,000
1,22,000
= 38,000
= 3.21 times
Proprietary ratio (also known as the equity ratio) is the proportion of shareholder's equity to total assets.
Proprietary Ratio =
Shareholders' Funds
Total Assets
Shareholder’s Funds = Equity Share Capital + Preference Share Capital + General Reserve
= ₹ 1,00,000 + ₹ 80,000 + ₹ 10,000
= ₹ 1,90,000
Total Assets= Closing Inventory + Other Current Assets + Fixed Assets
= ₹ 18,000 + ₹ 50,000 + ₹ 2,12,000
= ₹ 2,80,000
1,90,000
Proprietary Ratio = 2,80,000
× 100 = 67.86%
OR
Revenue from Operations = Cash Revenue from Operations + Credit Revenue from Operations
= ₹1,00,000 + ₹3,00,000 = ₹4,00,000.
Cost of Revenue from Operations = Revenue from Operations - Gross Profit
= ₹4,00,000 - (4, 00, 000 ×
30
)
100
= ₹4,00,000 - ₹1,20,000 = ₹2,80,000.
cost of Revenue from Operations

Inventory Turnover Ratio = Average Inventory

₹2,80,000
2 =
Average Inventory

₹2,80,000
Average Inventory = 2
= ₹ 1,40,000.
Case 1: If Opening Inventory is 1/3rd of the Inventory at the end.
Let Closing Inventory be x
Opening Inventory = of x or
1 x
∴
3 3
Opening Inventory + Closing Inventory


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x
+x
₹1,40,000 = 3
₹1,40,000 × 2 = x
3
+ x
₹2,80,000 = 4x
4x = ₹ 2,80,000 × 3 = ₹ 8,40,000
₹8,40,000
x= 4
= ₹ 2,10,000 (Closing Inventory).
₹2,10,000
∴ Opening Inventory = 3
= 70,000.
Case 2: If Closing Inventory is 25% less than the Inventory in the beginning.
Let Opening Inventory be x
Closing Inventory = x - 0.25x = 0.75x
Opening Inventory + Closing Inventory


x+0.75x
1,40,000 = 2

2,80,000 = 1.75x
₹2,80,000
x =
1.75
= 1,60,000 (Opening Inventory).
∴ Closing Inventory = 0.75 x ₹1,60,000 = ₹1,20,000.
Case 3: If Opening Inventory is 75% of Closing Inventory and Closing Inventory is
30% of Revenue from Operations.
Closing Inventory = 30% of Revenue from Operations
= 30% of ₹4,00,000 = ₹1,20,000.
Opening Inventory = 75% of ₹1,20,000 = ₹90,000
34. In The Books Of Himmat Ltd.
CASH FLOW STATEMENT
for the year ended 31st March, 2020
Particulars ₹ ₹
I. Cash Flow from Operating Activities
Closing Balance of Surplus, i.e., Balance in Statement of Profit and Loss 7,50,000
Less: Opening Balance of Surplus, i.e., Balance in Statement of Profit and Loss 6,00,000
1,50,000
Add: Provision for Tax 95,000
Dividend Paid 1,50,000
Net Profit before Tax and Extraordinary Activities
Add: Non-cash/Non-operating Expenses:
Depreciation 40,000
Goodwill Amortised 20,000 60,000
4,55,000
Less: Non-operating Income:
Gain on Sale of Land and Building 15,000
Operating Profit before Working Capital Changes 4,40,000
Less: Decrease in Current Liabilities and Increase in Current Assets:

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Trade Payables 10,000
Trade Receivables 50,000
Inventories 80,000 1,40,000
Cash Generated from Operating Activities 3,00,000

Less: Income Tax Paid (₹ 80,000 - ₹ 15,000) 65,000
Cash Flow from Operating Activities 2,35,000
II. Cash Flow from Investing Activities
Proceeds from Sale of Land and Building 1,65,000
Purchase of Non-current Investments (6,00,000)
Cosh Used in Investing Activities (4,35,000)

III. Cash Flow from Financing Activities
Proceeds from Issue of Shares 5,00,000
Payment for Redemption of 10% Debentures (2,00,000)
Proceeds from Bank Loan 1,00,000
Payment of Dividend (1,50,000)
Payment of Dividend Distribution Tax (15,000)

Cash Used in Financing Activities 2,35,000
IV. Net Increase in Cash and Cash Equivalents (I + II + III) 35,000
Add: Opening Cash and Cash Equivalents 3,40,000
V. Closing Cash and Cash Equivalents 3,75,000

W.N.:
i. It is assumed that 10% Debentures have been redeemed in the beginning of the year, therefore, interest is not
provided.
ii. LAND AND BUILDING ACCOUNT
Dr. Cr.
Particulars ₹ Particulars ₹
To Balance c/d 8,00,000 By Bank A/c (₹ 1,50,000 + ₹ 15,000) 1,65,000
To profit and loss A/c 15,000 By Balance c/d 6,50,000
8,15,000 8,15,000

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12 Accountancy sp09

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Sample Paper - 09 (2022-23)

Time Allowed: : 3 hours

1. This question paper contains 34 questions. All questions are compulsory.

Part A:- Accounting for Partnership Firms and Companies

a) Both A and R are true and R is the correct explanation of A.

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

c) A is true but R is false.

d) A is false but R is true.

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a) Credited to old Partners Capital accounts

b) Written off to the old partners

c) Written off by the Sacrificing partners

d) Distributed by Gainer partners

The amount of goodwill is paid by the new partner:

a) for purchase of assets

b) for sharing the profit

d) for the payment of capital

a) Share Application A/c ... Dr. 40,000

To Share Capital A/c ... 40,000

b) Share Capital A/c ... Dr. ... 10,000

To Share ApplicationA/c ... 10,000

c) Bank A/c ... Dr. 90,000

To Share Application A/c ... 90,000

d) Share Capital A/c ... Dr. 20,000

To Share ApplicationA/c ... 20,000

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a) Payment after 10% Discount

c) Half Amount Rs.10,000

d) Full Amount ₹20,000

a) Par and premium only

c) Par and discount only

d) Par, premium or discount

To Debentures Application A/c 5,00,000

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To Deb. App. & Allot. A/c

To Securities premium reserve A/c

To Deb. App. & Allot. A/c

To % Debenture A/c

To Deb. App. & Allot. A/c

To % Debenture A/c

To Deb. App. & Allot. A/c

To % Debenture A/c

To Securities premium reserve A/c

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a) Debenture Application A/c

b) Debenture Allotment A/c

c) Securities Premium A/c

b) by adding abnormal losses

c) by deducting abnormal gains and adding abnormal losses

d) by deducting abnormal gains (profit)

a) Interest on Parntners Loan A/c Dr.

To partners Loan A/c

b) Parntners Loan A/c Cr.

To partners Loan A/c

c) Parntners A/c Dr.

To partners Loan A/c

d) Parntners Loan A/c Dr.

To partners Capital A/c

b) Debited to deceased partner capital account

c) Balance sheet assets side

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d) Both Deceased and Retired partner