Answers to Sample Paper 12 (©) %1,200 2. (a) credited to Partner's Capital Ale (©) €14,15,000 z Amount due on final call (29,800 x 50) 140,000 Amount received with allotment (500 x €50) (25,000) Amount unpaid on final call (1000 x 50) _ (50,000) Amount received on final call 14.15,000 or () F600 (&) ©24,000 and ® 15,000 or (@) all partners except one of the firm become insolvent. (a) (A) is correct but (R) is wrong. es or () %6,000 7. (&) 9,000 () Revaluation Loss of €1,25,000 or (© 4:5 . (bd) ©7500 Mona Nisha Priyanka Amount Already received 22,500 Dr. 22,500 Dr. 45,000 Dr. taken back % 90,000 in 1: 1: 2) Amount to be received 30,000 Cr, 30,000 Cr. 30,000 Cr. % 90,000 in L 1 1) Net Adjustment 7,500 Cr. 7,500 Cr. 15,000 Dr. 10, a. 2. 2B. 4. (@) Priyanka's Capital A’e Dr. 15,000 ‘To Mona's Capital A/c 7,500 ‘To Nisha’s Capital Ale 7,500 (@) Dissolution of Partnership Firm (&) Issuing partly paid bonus shares to shareholders (@) Allof the above (®) 18:10:7 ‘Arya’s profit Share =1/5 which is entirely sacrificed by Advika as she has been credited with full goodwill, Drought in by Arya. Advik 7 1S Raabbya’s New Share = 2/5 x 5/5 = 10/35 ‘Axya’s new share = 1/5 7/7 = 7135 New Ratio = 18: 10:7 835 New share EAD Accountaney—12 015. (a) % 60,000, € 60,000, % 40,000 or (6) Loss of &1,50,000 will be divided among A and B in 3 1, 16, (b) Ajay’s Current A/e will be credited by & 6,000, or @ 4 u. Journal Date Particulars Le | bre@® C® General Reserve Ale Dr. 45,000 ‘Workmen Compensation Reserve Ale Dr. 30,000 ‘Tos Copital Ave 45,000 ‘To B's Capital Ae 22,500 To C's Capital Ale 7,500 (Being general reserve and workmen compensation reserve transferred to partners capital account in old rato) ‘As Capital Ale Dr 18,000 BYs Capital Ave Dr. 3,000 (C's Capital Ae Dr. 3,000 ‘To Profit and Loss Ave 12,000 ‘To Advertisement Suspense Ale 18,000 (Being advertisement suspense and profit and loss balances transferred to partners capital account in od ratio) 18, Profit and Loss Appropriation A/c Dr Jor the year ending 31* March, 2023 cr Particulars “Amount (@) Particulars ‘Amount ®) ‘To Interest on Capital: ‘By Net Profit 2,0,000 As Capital Ave Bis Capital Ave C's Capital Ale 50,000 ‘To Salary: B's Capital Ale (1,000 > 12) 12,000 ‘To Commission Cs Capital Ave 5,000 ‘Ta profit transferred to: As Capital Ave 65,500 Less: Deficiency of B 5.108) 61,400 B's Capital Ave 39,900 Ada: Received from A 45,000 C's Capital Ae 26,600 200,000 2.0000 EAD Accountaney—12 @19. or In the books of Pawni, Samyra and Karan Journal Date Particulars br®) ® Provision for Doubtful Debts Ale De 2,000 Revaluation Ave De 3,000 To Debtors Ale 5.000 (Being Bad debts writen off) Debtors Ale Dr 000 To Bank Ae 8,000 (Being bill discounted with the bank dshonoured) Prepaid Insurance Ale De 4,000 To Revaluation Alc 4,000 (Being insurance related to next year recorded as prepaid) Revaluation Ae De 1,000 ‘To Pawni's Capital Ae 400 ‘To Samyra's Capital Ac 00 “To Karan’s Capital Ave 200 (Being revaluation profit transferred to old partness) Pavnils Capital Ale Dr 6.000 Samyra’s Capital Ale Dr. 6,000 ‘To Karan’s Capital Ale 12,000 (Being agjustment of goodwill atthe time of retirement) In the books of Virat Limited Journal Date Particulars br) cre 1.42022 | Bank Ale Dr 9,0,000 ‘To Debenture Application and Allotment Ale 9.00,000 (Being application money received) 1.42022 | Debenture Application and Allotment Ale Dr 9,00,000 Diseount on issue of Debentures Ale Dr 1,00,000 ‘To 9% Debentures Ale 10.00.00 (Bing debentures issued at discount) 31,3.2023 | Interest on Debentures Ae Dr 0,000 “To Debentureholders’ Ave 90,000 (Being interest due on ® 10,06,000) 31.3208 | Debenturcholders’ Ae De 90,000 To Bank Ale 90,000 (Being interest paid to dchenture holders) 31,3.2023 | Statement of Profit and Loss Ae Dr 0,000 To Interest on Debenture Ale 90,000 (Being interest on debentures) 313.2023 | Statement of Profit and Loss Dr 100,000 ‘To Discount on Issue of Debentures Ale 1,00,000 (Being discount on Issue of debentures written off) EAD Accountaney—12 °or (a) Rejection of excess applications ~ In this, some applications are accepted in full and excess applications are rejected and their application money is refunded. In the above example, 20,000 shares are rejected and money is refunded. (6) Prorata allotment ~ In this, proportionate allotment is made to all applicants. In the above example, prorata allotment of 50,000 shares is done to applicants of all 70,000 shares, ie, 5 shares are alloted to an applicant of 7 shares. (©) Acombination of above two alternatives ~ This means the company can reject some of the excess applications and give prorata allotment to the remaining applicants. In the example, the company can reject 10,000 shares and give prorata allotment of 50,000 shares to applicants of 60,000 shares. 20. Journal Date Particulars Le | pe@® | e@ (| Radhika’s Capital Ale Dr 8,000 Bani’s Capital Ale De. 12,000 Chitra’s Capital Ave De 4,000 ‘To Profit and Loss Ave 24,000 (For debit balance of profit and loss account transferred to all partner's capital account in old ratio) (i) | General Reserve Ave Dr 144,000 ‘To Radhika’s Capital Ale 48,000 ‘To Bani’s Capital Ale 72,000 ‘To Chitra’s Capital Ae 24,000 (For general reserve transferred to partners capital account in old satio) ii) | Radhika’s Capital Ale Dr 30,000 ‘To Bani's Capital Ale 30,000 (For adjustment for goodwill made for change in prot sharing ratio) () (@ [Land Ave Dr 1,80,000 ‘To Revaluation Ave 1,80,000 (For land appreciated) (@) | Revaluation Ave De 1,80,000 ‘To Radhika’s Capital Ae 60,000 ‘To Ban's Capital Aic 0,000 ‘To Chitra’s Capital Ae 30,000 (For revaluation profit transferred to partners capital account in old ratio) Working Notes: Caleulation of gain/saerifi Radhika = 2-2-4 (gain), Bani = 3-2-4 (sacrifice), Chitra = 4-4 = 0 21. Balance Sheet of Reality Ltd. (an extract) sat 31 March, 2023 Note No. | Current Year | Previous Year ‘Equity and Liabilities © @ Shareholders’ Funds: Share Capital 1 492,000 Reserves and Surplus 2 21,000 EAD Accountaney—12 ®Notes to Accounts: Nae Tareas nom © (| Sare Capa Aare Capa 0 Eu Shares of 10 ah 11m sed Capit Soo uy Shares of 100 ach son “oo uty Shresote cash sso “ut Forced share (0 0 ed ee (2) | nemes an ups Seca remium Reser spon ipa een ssi | _ 210 22, When payments made in the yearly isalent of € 20000 each nding interes Boks ef Amrndes Mohinder and Jopndr be Mahinde' Loan Account ce. Date Particulars a Amount | Date Particulars aE " @ @ Bard tram] Taytneresae(teoo0rx22)] | nano i 30 am vearat | no sank ae sings) | [anon Yer | y Bann a0 Tosco’ ae u ° » wyincraac(earame2)] | sas io ase aaa vest] rosa dactaing te) | [ang] seat sans at tals cl iss 2 Byres. A (23854312 304s io Sasa eae veartv|totank ae gs08 e201) | [a8a05 Yara By Bane ne Tea 2 Bmore. Ae (816808 207 io a0 sas 2. Tne books of Tis i Toaral Dat Panes | me | ee Tinka pe} | 100 Tou Share Appaon Ae S00 ing appeation nn eee on 17800 srs @ 3 at tly Shae Appleone pe] | somo (ting appeation nog ase) EAD Accountaney—12 ©Equity Share Allotment Ave ‘To Equity Share Capital Alc ‘To Securities Premium Ae (Being the allotment money due on 80,000 shares @ & 450 per share.) Bank Ale ‘To Equity Share Allotment Ale (Being allotment money received) ‘Equity Share First and Final Call Ale ‘To Equity Share Capital Ale (Being the first and final call money due on 80,000 shares @ & per share) Bank Ale ‘To Equity Share Fist and Final Call Ale (Being the first call money received) Equity Share Capital Ae (3,200 x 10) Securities Premium Alc ‘To Share Forfeiture Ale ‘To Equity Share Allotment Alc ‘To Equity Share First and final Call Ale (Shares forfeited for non-payment of allotment and call) Bank Ale Share Forfeiture Ale ‘To Equity Share Capital Alc (Being 2,400 of the forfeited shares reissued @ €8 per share fully paid up) Dr, Share Forfeiture Ale ‘To Capital Reserve Ale (Balance of share forfeiture transferred to Capital Reserve A/c) Dr. 360,000, 1,18,200 4,00,000, 3,84,000 32,000 1,800 19,200 43800 7200 160,000 2,00,000 118,200 4.00.00 3.84,000 16,000 1,800 16,000 24,000 7200 or In the books of Maxima Ltd. Journal Date Particulars LE De® ce @ Bank Ae ‘To Share Application Ae (Application money received on 92,0410 shares) ‘Share Application Ale ‘To Share Capital Alc To Bank Ale ‘To Share Allotment Alc (Application money adjusted and surplus refunded) Share Allotment Ale ‘To Share Capital Ale ‘To Securities Premium Ale (Allotment money due) Bank Ale ‘To Share Allotment A/c {Allotment money received) Share First and Final Call Ale ‘To Share Capital Ae (Call money dive ) 2,76,000 2,76,000 1,90,000 2,40,000 2,76,000 1,80,000 6,000 0,000 180,000 1,20,000 1,90,000 2.40.00 EAD Accountaney—12 624. Bank Ave Dr ~2,12,000] ‘To Share First and Final Ale 2,12,000 (Call money received ) Share Capital Ae Dr. 40,000 Securities Premium Alc Dr. 8,000 ‘To Shares forfeited Ave 12,000 ‘To Share Allotment A‘e 20,000 ‘To Share First and Final Call Ave 16,000 (Being 4,000 shares forfeited for non-payment of allotment and call Money) Bank Ave Dr 16,000 Shares forfeited Ale Dr 4,000 ‘To Share Capital Ave 20,000 (Being 2,000 shares were reissued as fully paid for ® 8 per share) Shares forfeited Ale De 2,000 ‘To Capital Reserve Ave 2,000 (Being tansfer of Shares Forfeited Ale to Capital Reserve) ‘Working Notes: Share Allotment money due: 3,00,000 Less: allotment money received on application: (& 90,000) Less: Share allotment money received &1,90,000) Share allotment money not received : 20,000 No. of shares on which allotment money not received and forfeited = € 20,000/5 = 4,000 shares Dr. Realisation Ale cr. Particulars Amount @) Particulars Amount @ ‘To Stock Ale «6,000 | By Provision for Doubt Debis 2,000 ‘To Investments Ale 10,000 | By Sundry Creditors Ale 30,000 ‘To Debtors Ave 20,000 | By Bills Payable Aic 8,000 ‘To Plant Ave 20,000 | By Mrs. Viehal’s Loan Ale 10,000 ‘To Building Ave 15,000 | By Mrs. Achal's Loan 5 ‘To Goodwill Ale 4,000 | By Investment Fluctuation Reserve Ale 1,000 ‘To Achal's Capital Ae: By Achal Capital Ae (stock) 5,000 Mrs Achal’s Loan, 5,000 By Vichal’s Capital Av: ‘Commission 1,000 6,000 | Investments 4500 ‘To Bank Av: ~ “Typewriter 300 4,800 Creditors 29,880 By Bank Ae Bills payable 7.960 Debtors 19,000 Mrs Viehals Loan 10,000 47810| Plant 25,000 ‘To Profit uf to: | Building 40,000 Achals Capital Ale 15,748 Goodwill 6,000 Vichals Capital Ale 15,748 31,490 Investments 4500 94,500 1,60,300 160,300 EAD Accountaney—12 ”Dr. Partners’ Capital Ales cr ‘chal | Vichal ‘Achal | Vichal Particulars Particulars ® ®. ®@ @ ‘To Realisation fc 5,000 4,800 | By Balance b/d 10,000 | 10,000 ‘To Advertisement By General Reserve 5,000 5,000 Suspense Ale 1.250 1,250) Hy Realisation Ae 6,900 ‘o Bank Ne 30,95 | 24695 | By Realisation Ac as7as| 15,745 36745 _ 30,745 36745 | 30,745 Dr. Bank Ae cx Particolars ‘Amount @ Patiala ‘Amount ©) To Balance bid 8.500] By Realisation Ave 47810 ‘To Realisation Ae 94500 | By Acha's Capital Ae 30495 By Vicha’s Capital Ac 24695 103,000 103,000 or Dr. Revaluation Ale cr Particulars Amount @ Particulars “Amount @® To Prossion on Debtors 2,000 | By Land and Building 10,000 ‘To Machinery 000 | By Stock 2,000 “To Profit ransfered to: Prepaid Rent 1,000 Ns Capital Ale 4800 Bs Capital Ale 1.200 73,000 000 Dr Partners’ Capital Alcs cr a )® ) © a )® ) eee o || @ Particulars ® |e | He Goodwi Ate 16000) 4000 By Balance bid 275,000] 96,000 Ho Balance od 2.75;800) 99,200| 100000 |By Bank A’c 1,00,000 By Premium for Goodwill Ate] 12,000) 600,000 By Revaluation Ale 44800| 1.20 2,91,800) 103,200) 100,000 291,800| 103200) 10,000 Balance Sheet of the new firm Tinbltes ‘Amount @) Assets ‘Amount © Creditors 351000 | Cash at Bank (42,000 + 1,0,000 + 18,000) | 160,000 Bills Payable 40,000 Cash in Hand 12,000 Provision on Debtors 6,000 | Debtors 56,000 Capital As Stock 40,000 A 247.800 | Prepaid Rent 1,000 B 198,200 | Furniture 52,000 c 1,00,00 | Machinery 75,000 Land and Building 1,60,000 556,000 356,000 EAD Accountaney—12 625. Dn Karan’s Capital Account ce ‘Amo “Amount Date Particulars * Date Particulars & & 208 2008 Sune 12 | to Karan’ Exccuor's Ale sano | June 12 | By Balance bd 2.00000 (Bal. fig.) ne 12__| By Interest on Capital A/c 4,800 ByPranav’sCapital Ae(Goosi | 16000 By Rain's Capital Ale $00 (Goodwith ByPIL Suspense At 40,000 By General Reserve Ac 0,000 3.28800 3.2800 Working Not , won (a) Interest on Capital = € 2.00000 x 22.73. = ¥ 4.800 ©) Capital = 24 axe (Kara's Goodwit = € 60.000 x 2 = & 2400 (©) Profit il the date of death = € 5,00,000 x 3x2 = & 40,000 26. Journat Date Particulars LE Dr. @) cr Bank Ale Dr Ta 8% Debentures Application and Allotment A& 4.95000 (Gcing money received on ise of debentures) (| 8% Debentures Application and Allotment Ale Dr 495,000 Loss on Issue of Debentures Ale Dr. 1,10,000 a 8% Debentures Ae 5.50,000 Ts Premium on Redemption of Debentures Al 5,000 (Geng debentucs alloted at 10% discout, redeemable at 10% prenum) (| Machinery Ave Dr 2,0,000 Ta Vendor Al 2,00,000 (Gcng machinery purchase) Vendor Ae De 2,0,000 Loss on Ins of Debentures Ne Dr. 20,000 iy 8% Debentures Ave 2,00,000 Ta Premium on Redemption of Debentures Ale 20,000 (Geng 85 debentures ised at par for consideration other than cash, redeemable a premium of 10%) (wi) [Bank ave Dr 20,0,000 To Bank Loan Ae 20,0,000 (Bing oan taken fom bank) Debentre Suspense Ale De 2.50.00 Ta 80% Debentures Ae 2.50,000 (Ging 8% debenture sued a collateral secu) EAD Accountaney—12 ®27. @) © 28. (a) 29. (b) @ 30, (a) 3. @) wi) (i) @) O) i) 2 ) (wo) None of these or Proposed Dividend Revenue from operations @).@), or Statement I is incorrect and Statement II is correct. %15,00,000 Revenue from Operations Other Income Employees Benefit Expenses Finance Costs Depreciation and Amortization Expenses Other Expenses Obtained loan from bank will decrease in the proprietary ratio because sharcholder’s fund remains unchanged but total assets have increased, Purchase of machinery for cash will not change the proprietary ratio because shareholder's fund and total assets have not changed Issue of shares against machinery purchased will increase the proprietary ratio because shareholder's funds and total assets have increased by same amount. 3 Comparative Statement of Profit and Loss as at 31st March, 2022 and 2023 Note | 3t3tMareh, [31st Mareh, | Absolute | Percentage Particulars Noe) a0 2028 Change | Change ® © @ T. Revenue from Operations 18,0000] 24,00,000] 600,000 33.33 HL, Other Income 430,000] 360.000] (20,000) (20.00) IL, Total Revenue + 1) z2s0000/—27,60,000] 5.10.00 m7 IV. Expenses (WN (i) soo00] 1440.00) 540,000 0.00 Y._ Profit before Tax (I —1¥) 7350.00) 13,2000] (30,000) (222) Vi. Tax 528000] (12,000) @2 VIL, Profit ater Tax =D) si0000| 792.000 (18,000) (2) ‘Working Notes: () Other Income 25 Sst March, 2022 = € 18,00,000 x 25, = &4,50,000 Sst March, 2023 = & 24,0000 x 15 = @ 3,60,000 (Expenses: Sst March, 2022 = € 18,00,000 x = = & 9,00,000 3st March, 2023 = € 24,00,000 x 8 = &14,40,000 EAD Accountancy—12 (10)or Comparative Balance Sheet fas at 31st March 2022 and 2023 Nowe | 21¢March, [ S1stMarch, ] Absolute] Percentage Particulars Nie | 2022 2023 Change | Change ® ® ®. (%) TL. EQUITY AND LIABILITIES 1. Shareholders’ Funds: (2) Share Capital 10,00,000 | 12,00,000 | 2,00,000 20,00 ()_ Reserves and Surplus 15,00,000 | 20,00,000 | 5,00,000 3333 2, Non-Current Liabit ‘Long-term Borrowings 20.00.00 | 25,90,000 | 500,000 25.00 3. Current Liabilities: Trade Payables 30,00,000 | _27,00,000 | __(3,00,000) (20.00) Total 75,00,000 | 84,00,000 | __9,00,000 12.00 TI, ASSETS: 1, Non-Current Assets: Property, Plant and Equipment and Intangible Assets (@) Property, Plant and Equipment 40.00.00 | 50,00,000 | 10,00,000 25.00 @) Intangible Assets 5,00,000 | §,00,000 = — 2, Current Assets: (a) Trade Receivables 25,00,000 | 25,00,000 = - (@) Cash and Cash Equivalents ,00,000 | __4,00,000 | _(,00,000) (20.00) Total 30,00,000 | 40,00,000 100,00 1000 Cash Flow Statement for the year ended March 31, 2023 Particulars ‘Amount @) | Amount ®) ‘A | Cash ow from (oF used in) Operating Activites: Closing balance of surpios 75.000 Less: Opening balance of Surpls (60,000) 15,000 Adds Provision for Tax made 31,000 Proposed dividend approved and paid 18,000 Net profit before Tax and Extraordinary items 64,000 Add: Non-Cash and Non-Operating Expenses: Interest on Debentures 48,000 Depreciation 2.000 Loss on Sale of Machinery 21,000 Operating Profit before Working Capital changes 1,95,000 Add: Decrease in Trade Receivables 100,000, Les: Increase in Inventories (20,000) Decrease in Tade Payables (25,000) Cash generated from operations 250,000 Less: Tax paid 24.000 Net Cash flows from Operating Actvitios 226000] 2,26,000 EAD Accountaney—12 coCash flows from (or used in) Inve Purchase of Machinery Sale of Non-Current Investments (181,000) Sale of Machinery 40,000 Net Cash used in Investing Activities 9,000 ©. | Cash flow from (or used in) Financing Activities: 132,000] (1,32,000) Issue of Share Capital 1,30,000 Payment of Bank Loan (80,000) Raised Bank Overdraft 30,000 Interest on Debentures (48,000) Dividend Paid (48,000) Net Cash flow from Financing Activities 14,000 14,000 1D, _ | Not Increase in Cash and Cash Equivalents (A+B+C) B, | Cash and Cash Equivaents inthe beginning of the year 108,000 | Cash and Cash Equivalents at the end of the year 72,000 1,80,000 Working Notes: Dr. Provision for Taxation Ale Cr. Particulars Amount @) Particulars ‘Amount (®) ‘To Bank Ale (Tis Paid) 24,000 | By Balance bid 18,000 To Balance eld 25,000 | By Statement of Profit and Loss 31,000 (Provision made) (Balancing Figure) 29,000 49,000 Dr. Machinery Ale Cr. Particulars ‘Amount (®) Particulars ‘Amount (2) ‘To Balance bid 1,01,000 ] By Bank Ale 9,000) ‘To Bank Ale (Purchase of Machine) 1,81,000 | By Statement of Profit and Loss 21,000 (Balancing Figure) By Depreciation Alc 32,000 By Balance cfd 220,000 282,000 282,000 EAD Accountaney—12 (2)