Solutions to Sample Paper 6 1 ©) 2 (6) 3 @ (6) 4@ 6) 5) 6. @) © 7. (6) 8 @) ) 10. ©) 31:29 credited to Revaluation Ale Reserve capital Or m4 Date Partiooars LE] De® ® Realisation Ale Dr 3.000 ToAS Capital Ale 3000 Or Date Particulars Le] De® @ ©) | ¥sCapital ave Dr ToX's Capital Ae 13 €2,39,500 Or & 1,50,000 25% of the issue price of share Gaining Ratio of M and O 1:7; L Sacrifices WS or 337,800 #10500 = 12,000 Interest on Capital Salary Amit 5,000 . Sumit = 10,000 = 20.000 Ratio of Appropriations = __€15,000 20,000 or 3:4 Sumit’s salary = 4 x & 21,000 = & 12,000 Deficiency = & 80,000 ~ € 56,000 = & 24,000 Deficiency borne by Q = & 9,600 Q's share of profit after bearing deficiency = & 2,24,000 ~ € 9,600 =F 214,400 Accountancy —12. a12, (¢) Amount due on allotment (10,000(s) x & 3) = 30,000 B. 4, 15, 16, 1. Less: Excess application money (2,000(8) x & 2) 24,00 © 26,000 Less: Amount received 4s allotment £18500 Calls.in-arrears 27500 Shares on which allotment money not received (6) Credited to (b) As Sacrificing share Bys Sacrificing share = 2500 = 9.500 shares S00 = 2,500 sh Therefore, only B will get the premium for goodwill. (6) P must return & 1,75,000 to the firm. Or (6) Both (A) and (R) are correct but (R) is not the correct explanation of (A). (@) Partner's Loan Ale In the Books of Snoopy, Emily and Maria Amount not received on allotment Allotment money per share Journal Date Particulars LE) me@ cee) Savopy/s Capital Ale Dr 15,000 Bly Capital Ate Dr 6,000 Te Goodwill Ae 21,000 (Being old goodwill writen off Cash Ne De To Maria's Capital Alc 1.00.00, Ts Premium for Goodwill 49,000 (Being the eapital and premium for goodwill brought in by the new partner) Premium for Goodwill Ae Dr 9,000 amily’ Capital Ale Dr 35,000 To Snoopy’s Capital Ale 84000 (Being the entry passe for goodwill to compensate the sacrificing partner)18, Working Notes: Sacrifice/gai Snoopy = 5/7 ~ 13135 = 1235 (Sacrifice) Emily = 27 - 15135 5/35 (Gain) Mati us in) Premium brought by Maria = % 49,000 Goodwill of the firm = € 49,000 x 5 = & 245,000 Amount to be compensated by Emily to Snoopy for goodwill = 245,000 x 5/35 Profit and Loss Appropriation Ale De for the year ended 3151 March, 2022 ce Amount Amount Prticlars Particulars © © To terest on Capital AG ByNetproialtercharging Cosalary S00 A 120000 x 1200 Add Cssatary —10000_| 90000 3B (e000 2000 © eessoon x 1) 00 LO00 95 30,000 ToCsSalary 100 “To Divisible Prot teansfereed to Capital As A:7500-9.00 000 1: si.000 6.000 s.000 25.00 + 15.000 4000 i 190.00 1.9.00 ‘The deficiency of @ 15,000 will be borne by A and B in the ratio of 3: 2. Note: C’s share of divisible profit is & 25,000 whereas the minimum guaranteed amount is & 40,000 excluding salary. (For rectification made for omission of interest on capital an interest on drawings) Or Journal pebit | Credit Date Particulars LE | Amount | Amount ® @ Tanuj’s Capital Ale 3604 Panka’s Capital Ac 2.864 To Akhils Capital Ae 6528 Accountan: @)Adjustment Table Tana} Pankaj kil Firm Particolars Dr cr Dr. cr. Cle ja Interest on Capital —| 16.00] —| 16800 =| 70 | assool | =| 1200 960] = —| 3300 Net Loss 22:1) 18.464 18.464] =| 92x S —| 46.100 Net Balances =] 3,6 =| 2868] 6.528] = a = (Os) wx] (ce 1se64| 19,664] 19.664] 19,664] 16,720] 16,720] 49,520] 49,520 Particulars ‘Tanw Pankaj Akhil Closing capital 2,50,000 2.60000 ra (2,000) (9,000) (45,000) a 40,000 4,000 32,000 Opening Capital 200,000 2,10,000 2.09,000 In the books of BMO Ltd, Journal Date Particulars Le] pee c@) © — [Rank Ac De. 460,000 ‘To Debenture Application and Allotment Ae 40.000 (Being application money seceved) ebentre Application and Allrment Ae De 40,000 1o 6% Debentures Ale s4on.000 1 Securities Premium Ale cao (Being Debentures issued at Premium redeemable at par) [Bank ve Dr 5,70,000 To Debentures Application and Allotment Ale 5,70,000 (Bcing application money received) Debenture Application and Allotment Ac De s.70,000 Discount on sve of Dehenture Ale Dr 30,000 Loss on Issue of Debenture Ale De 1.20.00, To 6% Debentures Ale 6.00,000 ‘To Premium on Redemption of Debentures A’e (Being debentures issued at discount redeemable at premium) Accountaney—12. 420, Or In the books of Vikram Ltd, Journal Particulars Le| De® ou Bank Ac De 456000 To Debenture Application and Allotment Alc 456,000 (Being application received for 4800, 8% debentures @ 895 per debenture) Debenture Application and Allotment Ne De 4456000 April! | Loss on Issue of Debentures Ale De 72000 ‘To 8% Debentures Ale «430,000 To Premium on Redemption of Debentures Ale 48,000 (Being 4800, 8% debentures of¢ 100 each issued at a discount of 5% redeemable ata premium of 10%) 202 | Securities Premium Ale De 0.000 March 31 | statement of Profit and Loss De 22000 To Loss on Issue of Debentures Ave 2,000 (Being ss on issue of debentures writen of Dr Realisation Aje Particulars Amount @) Particulars Amount @) ‘To Sundry Ass By Provision for dt 1000 Stock 12000 By Sundry Liabilities Plant 50000 Creditors 0,000 Investments 10,00 Ms, as Loan 10,000 40,000 Good 5.00 By A’sCapital Ave 8.000 Debtors 15,00 75,00 | By Cash ToAs Capital Ae 2000} Debtors 16500 To Cash Stock S00 Mrs. A's Loan 10.00 Plant 27,000 Creditors 25.500 38.500] Good 4000 55.500 (£30,000 30.000 % 5 XY By Loss transferred to Capital Als: A 4400 r iu 1,000 1.155500 115,500 Accountancy —12. 6)a1, Balance Sheet of Sapphire Ltd, (an extraet) March, 2022 Current Year | Previous Year Note No, zs a ‘Shareholders Funds 1 40000 Notes to Accounts: Particulars ‘Amount @) (1), Share Capital Authorised Capital: 1,000 Equity Shares of 100 each 1,00,000, Issued Capita 500 Equity Shares of 100 each 50,000 bserbed Capital Subseibed but not fully paid up 500 Equity Shares of € 100 each, € 80 called up 40,000 In the books of Neha, Pooja and Anju Journal Date Particulars Le] De® ce ‘General Reserve Ale De ‘Workmen Compensation Reserve De ‘To Liability against Workmen Compensation Reserve Ac ‘To Neba's Capital Ac To Poo} Capital Ae “To Anjus Capital Ac (Being reserve distribute in old profit sh ‘Neha Capital Ate De 1.20 Pooja Capital Al Dr 1,800) Anjus Capital Ave ratio) 1200) To Profit and Loss Ne 4200 (Being debit balance of Profit and Loss Afewritten of) ‘Neha Capital Ate De 1.800) To Pooja’ Capital Ale 1500 Te Anis Capital Ave 300 (Being gain on assets revalued transferred without disturbing assets count) Calculation of gain/sacrifice: Neha’s gain 6/28, Pooja’s sacrifice 5/28, Anju’s sacrifice 1/28, Accountant 6In the books of Malabar Ltd, Journal Date Particulars Le[ bw ce@) Bank Alc Dr 3,.00,000| To Equity Share Application Ale 3,00,000, (Being application money received on 150,00 shares @ & 2 exch) "Equity Share Application Ale Dr 3,0,000 To Equity Share Allotment Ale 1,00:000 To Equity Share Capital Ac 1.30.00 To Bank Ave so.000 (Being application money adjusted) ‘Equity Share Allotment A/c Dr 3.75,000 To Equity Share Capital Ac 2.25.00 To Securities Premium 1.30.00 (Being the alloment money due on 75,000 shares @ & 5 per share including premium of 2 per share) Tank Ale Dr 27.280 To Equity Share Allotment Ate 2.280 (Being allotment money roeived, te, & 375,00 —& 100,00 82.750) ‘Equity Share Fist and Final Call Ac Dr 3,75,000 ‘To Fauity Share Capital Nc 375,000 (Being the frst and final call money due on 75,000 shares @ € Sper share) Bank Ale Dr 3.06,250 ‘To Equity Share First and Final Call Ae 3.6250 (Being the first call money received except on 1750 shares) Eguity Share Capital Ae Dr 17500 Securities Premium Ale Dr 150 ‘To Share Forfeiture Ale 7500 iy Share Allotment Ave 2750 ity Share First and final Cal Ae 8750 (Being shares forfeited for non-payment of allotment and call) Pank Ale Dr 7,00 Shate Forfeiture Ale Dr. 3,000 To Equity Share Capital Ale 10,000 (Being 1,000 ofthe forfeited shares reissued @& 7 per share fully paid up) are Forfeiture Ale Dr 730 To Capital Reserve Alc 780 (cing balance of share forfeiture transfered to Capital Reserve Ac) Working notes: Calculation of Capital Reserve: Ram's forfeited amount = & 2,500 Kritis forfeited amount for 1,000 shares 250 x 5,000 1,250 1,000) € 2,500 + € 1,250 -& 3,000 = € 750, Accountancy —12. aOr In the Books of TTC Lid, Journal Date Particolars| Le [pee @ Bank Ale Dr 9,0,000 ‘To Share Application Ale 9,0,000 (Being application money received on 300,00 shares) ‘Share Application Ne Dr 9,00,000 To Share Capital Ave 300,000 “To Securities Premium Ale 1.50,000 To Bank Ave 0,000 ‘To Share Allotment Ae 390,000 (Being application money adjusted and surphs refunded) Share Allotment Ale Dr 450,000 To Share Capital Ave 450,000 (Being allotment money du on 150,000 shares @ €3 per share) Bank Ae Dr 00 CallsincAnrears Ne Dr 3,000 ‘To Share Allotment Alc 60,000 To Callsin-Advance Ne 15,000 (icing allotment money and callin advance received) ‘Shate First and Final Call Ae Dr 750,000 ‘To Share Capital Ale 750,000 (ing cll money due) Bank Ac Dr 758.000 CalleinAdvance Ae Dr 15,000 Calle-insArrears Ac Dr 20,000 To Share First and Final Ale 750,000 (Being call money received) Share Capital Ale Dr 0,000 To Shares Forfeited Ale 17.000 ‘To Calls.in- Arrears Ale 23,000 (Being 4,00 shares forfeited for non-payment of allotment and call Money) Bank Ale Dr 19,000 Shares forfeited Alc Dr 1.000 “To Share Capital Ae 20,000 (Being 200 shates were reissued as flly psd for £9.50 per share) ‘Shares forfeited Ale Dr 7500 To Capital Reserve Ate 7500 (Bing transfer of Shares Forfeited Af to Capital Reserve) Accountancy —12. )4. De Revaluation Ale Ce Particulars Amount @) Particulars Amount @) “To Stock 500 | By Land and Building 2.300 Te Provision for doubtful debts 150 (58% of 5,000 -€ 100) To outstanding claim for damages 750 “To profit transferred to Capital As: a a5 Y 300 Zz 225 900 2,300 2300 Dr, Partners’ Capital Ales Ce x Y Zz x Y Zz Particulars Particoars| (Onto o) GL Gi To Ys Capital Ave 1350) =| 4080] By Balance bd 25,000 20.000] 15,000 To Ys Loan Ale =| 25,00 — | By xs Capital Ac =| 13s0 - ‘Tobalance cfd (Bal. fi) 24s =| anars | By 2s capital ave =| 4050 - By Revaluation Ave soo| 225 25,75 | 25,700 25,75 | _25,700 Gaining ratio = New ratio - Old r a rtm [Te [Se] rome | | Se Accountancy —12. 9)2s. Journal Entries Dr cr Date Particulars LE rc) ®@ As Capital Dr. 6000 Bs Capital Dr. 4000 ‘To C's Capital 10,000 (For treatment of goodwill on death of C) Profit and Loss Suspense Ale Dr. 13,000 To C's Capital Ale 13,000 (For C's share of profit till the time of his death) Profit and Loss Suspense Ale Dr. 9000 To A's Capital Ale 4500 To Bs Capital Ale 3,000 ‘To C’s Capital Ave 1.500 (For distribution of profit on revaluation in partners old ratio) Cs Capital Ale Dr. 50,000 To Cash Ale 25,000 To C’s Loan Ale 25,000 (For 50% paid immediately and balance transfer to his loan Alc) 26. (i) No. of debentures issued = ©4750 _ 5.009 debentures 195 « Journal Date Partcuars te | ma | cm Securities Premium Ade De 2no00 Statement of Profit and Loss be S000 ‘To Discount on Isue of Shares Ale 2500 (Dsing discount on ss of debenture written off) (iii) No interest will be allowed on debentures issued as collateral security. 27. (b) 4 times Or () Proprietor's funds and Total Assets 28, (b) Non-current Liabilities 29. (c) Inflow of @ 8,000 Or () An outflow of & 7,50,000 30, (b) Financing Activity. Accountaney—12. (10)31. (a) Inventory of finished goods means goods manufactured within the business lying unsold and inventory of stock- in-trade means goods purchased from outside the business for the purpose of resale lying unsold, (b) Other Current Assets ~ Dividend receivable, prepaid expenses Reserves and Surplus ~ Securities Premium, Capital Reserve 32, Proposed dividend for the current year is shown as a contingent shareholders. Ie it is subject to approval by the ‘Two items shown as contingent liabilit (8) Claims against the company not acknowledged as debts. (i) Bills receivable discounted from bank not yet due for payment. Profit before Interest & Tax 33, (a) Interest Coverage Ratio - i es Fixed Interest Charges = NA8.000 15.5 times 80,000 Working Notes: Profit afer Interest & Tax . Profit before Tax = smo Profit before Tax = © 10,0000 Add: Debentute Interest = 80,000 Profit Before Interest & Tax = 10,80,000 Debt (6) Debt to Capi al Employed Ratio = ——————Pebt_ Capital Employed (Debt + Equity) 10% Debentures (& 1,00,000) + 8% Public Deposits (& 2,50,000) + Long-term Provisions (& 1,00,000) = Debt + Equity (Equity Share Capi + Reserves and Surplus) 000, z ee = = dd % 450,000 + %6,50,000 ~ x 11,00,000 Or Aye oe ati Revenue from operations fet Assets or Capital Employed Turnover Ratio = —— SOR OPES _ ae Capital Employed or Net Assets = 40,00,000 ~ €12,70,000 = 3.14 Times Working Not Net Assets = & 25,00,000 + % 3,00,000 + 2,50,000 + & 1,75,000 + & 1,25,000 + & 1,40,000 + & 1,20,000 + % 80,000 ~ @ 3,60,000 ~ & 20,000 — & 40,000 = & 12,70,000, Accountancy —12. ayCash Flow Statement of Unitech Industries Ltd, for the year ended 31 March, 2022 Particulars Amount @) | Amount re inary items (note 1) x90 Adjustments for non-cash and non-operating items: Adil: Depreciation on Fixed Tangible Assets sa000 Amortisation of Goodwill 2500 Interest on Long Term Borrowings 1,500 Operating profit before change in working capital 190 Ada: Increase in current bilities and Decrease in current as Trade Payable 4.000 Less: Decrease in current lsbilities and Increase in current assets Other Current Assets (1600) (Cash generated from Operating Activites 9.400 Less: Income Tax paid 6500) [Net Cash Flow from Operating Activities B00 8.900 1, | Cas flow from Investing Activities: Purchase of Fed Tangible Assets (note 2) (39,000) Purchase of Investments (2.000) Net Cash used in investing Activities (4,000) (46,000) | Cash flow from Financing Activities: Proceeds from issue of Share Capital 5,000 Proceeds from ise of Long-term Borrowings 2.000 Interest paid on Long-term Borrowings (100) Dividend paid aon [Net Cash fom Financing Activities 3.08 3.100 D. | Net inerease in Cash and Cash equivalents (A+B+C) rp 1.000 E, | Add: Cash and Cash equiv F, | Cash and Cash equivalents 73.000 Working notes: 1. Net Profit before tax and Extraordinary items: [Net profit for the current year ( % 22,00) ~ & 4,000) = © 18,000 Ada: Provision for Tax (note 3) 27.500 ‘Adal: Proposed Dividend, 2.400 @27.900 2. Dr Property, Plant and Equipments (Machinery) Ale Cr Particulars ‘Amount ®) Particulars Amount @) To Balance bd 132,00 | By Depreciation Ale 3000) To Bank Ale Purehase) (Bal fg) 39,000 | By Balance ld 1.41,000 171,000 1.71000) 3. Dr. Provision for Tax Ale cr Particulars Amount @) Partieolars ‘Amount @) To Bank Ae 5500 | By Balance bid ‘3000 To Balance ld 10,000 | By Statement of Profit and Loss Ave (Bal. le) 7500 15,500) 15500