Pre-Board Papers With MS Accountancy

Marking Scheme links are on each paper
20
Class : 10th
Sub : Accountancy
Disclaimer: These papers are based on the SQP released by CBSE and
published by a private organization just for the practice of the students.
CBSE has not released these papers and CBSE is not related to these papers
in any manner. Publisher of these papers clearly state that these paeprs
are only for practice of students and questions may not be come in main
exam.
CBSE Accountancy Class 12 NODIA Sample Paper 1 Page 1
Sample Paper 1
Accountancy
Class XII Session 2023-24
Time: 3 Hours Max. Marks: 80
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, 31 and 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. The ‘share of premium for goodwill’ brought in by the new partner is divided in which ratio?
(a) In old ratio
(b) In sacrificing ratio
(c) In new ratio
(d) None of these
o
Interest on capital will be paid to the partner only out of______if provided for in the partnership deed.
(a) accumulated profits
(b) profits
(c) goodwill
(d) reserves
2. Ravi, Dhoni and Tony are partners sharing profits in the ratio of 3 : 3 : 2. As per the partnership agreement,
Tony is to get a minimum amount of ` 8,000 as his share of profits every year and any deficiency on this
account is to be personally borne by Ravi. The net profit for the year ended 31st March, 2021 amounted to
` 31,200. Calculate the amount of deficiency to be borne by Ravi.
(a) ` 800
(b) ` 200
(c) ` 100
(d) ` 400
3. Which of the following is/are method(s) of valuation of goodwill?

(i) Average profit method
(ii) Super profit method
(iii) Capitalisation method
(a) (ii) and (iii)
(b) (i), (ii) and (iii)
(c) Only (i)
(d) (i) and (ii)
4. Calculate the interest for the year 2021, when 6% debentures are issued for ` 20,00,000 of ` 100 each.
(a) ` 12,000
Click the Following Button to See the Free MS/Solutions

Page 2 NODIA Sample Paper 1 CBSE Accountancy Class 12
(b) ` 12,00,000
(c) ` 1,60,000
(d) ` 1,20,000
5. A shareholder to whom 9,000 shares of ` 10 per share allotted, failed to pay first and final call of ` 2 per
share. How will it be recorded in the books of company?
(a) ` 18,000 will be credited to Calls-in-arrear A/c
(b) ` 18,000 will be credited to Share Forfeiture A/c
(c) ` 18,000 will be debited to Calls-in-arrear A/c
(d) ` 18,000 will be debited to Share Forfeiture A/c
o
If vendors are issued fully paid shares of ` 1,00,000 in consideration of net assets of ` 1,20,000 the balance
of ` 20,000 will be_______.
(a) credited to Vendor’s Account
(b) credited to Goodwill Account
(c) credited to Profit and Loss Account
(d) credited to Capital Reserve Account
6. Jhunjhun, a partner paid loan of the firm of ` 1,00,000 at the time of dissolution. Pass the journal entry
for this transaction.
(a) Realisation A/c Dr 1,00,000
To Jhunjhun’s Capital A/c 1,00,000
(b) Jhunjhun’s Capital A/c Dr 1,00,000
To Realisation A/c 1,00,000
(c) Realisation A/c Dr 1,00,000
To Loan A/c 1,00,000
(d) None of the above
7. If equal amount is withdrawn by a partner at the end of each month during a period of 6 months, interest
on the total amount will be charged for______months.
(a) 3.5
(b) 6
(c) 2.5
(d) 3
o
A partner withdraws ` 1,600 each on 1st April and 1st October. Interest on his drawings @ 6% p.a. on 31st
March will be
(a) ` 48 (b) ` 192
(c) ` 96 (d) ` 144
8. A firm having the assets of ` 2,00,000 and liabilities of ` 84,000 earns the annual profit of ` 18,000. The
rate of normal profit being 12%, the amount of goodwill by capitalisation of super profit method, will
be________.
(a) ` 34,000
(b) ` 4,080
(c) ` 13,290
(d) ` 36,000

9. Assertion (A): At the time of change in profit sharing ratio, it is important to determine the sacrificing
ratio and gaining ratio.
Reason (R): At the time of change in profit sharing ratio, gaining partner compensates the sacrificing
partner by paying him proportionate amount of goodwill.
Alternatives
(a) Assertion (A) is true, but Reason (R) is false
(b) Assertion (A) is false, but Reason (R) is true
(c) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion
(A)
(d) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of
Assertion (A)
10. If a partner withdraws equal amount at end of each quarter, then______are to be considered for interest
on total drawings.
(a) 4.5 months
(b) 7.5 months
(c) 5.5 months
(d) 6 months
11. TDS refers to______relating to debenture interest.

(a) tax deducted at source
(b) these debentures secured
(c) the debenture security
(d) None of these
o
When debenture amount is received in lumpsum,______is credited with bank account.
(a) Debenture account
(b) Debenture allotment account
(c) Debenture application and allotment account
12. Pappu and Gullu are partners in the ratio of 3 : 2. Their capitals are ` 10,000 and ` 5,000 respectively.
Interest on capitals is allowed @ 8% p.a. Firm incurred a loss of ` 3,000 for the year ended 31st March,
2021. Interest on capital will be
(a) Pappu ` 400; Gullu ` 200
(b) Pappu ` 720; Gullu ` 480
(c) Pappu ` 800; Gullu ` 400
(d) No interest will be allowed
13. Raman, Tapan and Naman are partners in a firm with profit sharing ratio 3 : 2 : 1 respectively. The extract
of their Balance Sheet is as follows
Liabilities Amount (`) Assets Amount (`)

Workmen Compensation Reserve 48,000
At the time of retirement of Naman, if liability for workmen compensation to the extent of ` 24,000 is to
be created, then at what amount will workmen compensation reserve be shown in new balance sheet?
(a) ` 56,000
(b) ` 24,000
(c) ` 52,000
(d) Not to be shown in new balance sheet

o
Mukesh and Rakesh are partners in a firm sharing profits and losses in the ratio of 5 : 1.
An Extract of Balance Sheet

Machinery 4,000
If value of machinery in the balance sheet is undervalued by 20%, then at what value will machinery be
shown in new balance sheet?
(a) ` 3,200
(b) ` 5,000
(c) ` 4,400
(d) ` 4,800
14. David and Jacob are two partners sharing profits in the ratio of 2 : 1. Ronaldo, a new partner admitted for
1/4th share. At the time of admission, loss from revaluation is ` 9,000. Pass a necessary journal entry for
distribution of loss between the partners.
(a) David’s Capital A/c Dr. 9,000

To Jacob’s Capital A/c 9,000
(b) Revaluation A/c Dr. 9,000
To David’s Capital A/c 6,000
To Jacob’s Capital A/c 3,000
(c) Jacob’s Capital A/c Dr. 9,000
To David’s Capital A/c 9,000
(d) David’s Capital A/c Dr. 6,000
Jacob’s Captial A/c Dr. 3,000
To Revaluation A/c 9,000
DIRECTION : Read the following hypothetical situation and answer Q. No. 15 and 16
Goldee Export Limited was incorporated on 1st April, 2020 with registered office in Ahmedabad. The
capital clause of memorandum of association reflected a registered capital of ` 2,00,000 equity shares of `
10 each and 25,000 preference shares of ` 50 each.
Since some large investments were required for building and machinery, the company in consultation with
vendors, M/s Sultan International Limited issued 25,000 equity shares and 5,000 preference shares at par to
them in full consideration of assets acquired. Besides this the company issued 50,000 equity shares for cash
at par payable as 3 on application, ` 2 on allotment, ` 3 on first call and ` 2 on second call.
Till date, second call has not yet been made and all the shareholders have paid except Rishant who did
not pay allotment and calls on his 75 shares and Sonu who did not pay first call on his 50 shares. Shares of
Rishant were then forfeited and out of them 25 shares were reissued at ` 12 per share.
15. How many equity shares of the company have been subscribed?
(a) ` 71,475
(b) ` 74,950
(c) ` 78,340
(d) None of these
16. The amount of security premium reflected in the balance sheet at the end of the year will be_______.
(a) ` 100 (b) ` 250
(c) ` 50 (d) ` 150

17. Samay and Dev are partners in a firm sharing profit and loss equally. On 1st April, 2021, the capital of
the partners were ` 4,00,000 and ` 3,00,000 respectively. The profit and loss appropriation account of the
firm showed a net profit of ` 7,74,000 for the year ended 31st March, 2022. The terms of partnership deed
provided the following
(i) Transfer 10% of distributable profits to reserve fund.
(ii) Interest on capitals @ 6% per annum.
(iii) Interest on drawings @ 6% per annum. Drawings being Samay ` 80,000 and Dev ` 60,000.
(iv) Samay is entitled to a rent of ` 2,000 per month for the use of premises by the firm. It is paid to him
by cheque at the end of every month.
Prepare profit and loss appropriation, account for the year ended 31st March, 2022.
18. Arun, Tarun and Pawan are in partnership sharing profits in the ratio of 4 : 3 : 1. Tarun takes retirement
on 30th June, 2019. The firm’s profits for various years were : 2014 (profits ` 3,24,444), 2015 (profits `
80,000), 2016 (profits ` 10,000), 2017 (losses ` 10,000), 2018 (profits ` 40,000) and 2019 (profits ` 50,000).
Arun and Pawan decided to share future profits in the ratio of 3 : 2. Goodwill is to be valued on the basis
of 2 years’ purchase of average profit of 4 completed years immediately preceding the year of retirement of
a partner. Pass the journal entry to record Tarun’s share of goodwill.
19. Ajanta Engineering Limited invited applications for 4,000 equity shares of ` 10 each at the issue price of
` 10. The amount payable along with application is ` 10. This issue was fully subscribed. Give the journal
entries for the above transactions.
o
A company issued 8,000, 10% debentures of ` 100 each, payable ` 20 on application and the remaining
amount on allotment. The debentures are redeemable after 5 years. All the debentures were applied for and
allotted. All money was received. Give the journal entries.
20. Calculate the value of goodwill by super profit method, when goodwill is to be valued at 2.5 years’ purchase
of the average profits of the last 3 years. Profits of the previous 5 years are given below
2019 – ` 60,000, 2018 – ` 40,000, 2017 – ` 1,10,000
2016 – ` 40,000, 2015 – ` 30,000
Capital investment of the firm is ` 1,00,000 and having rate of return is 20%.
o
Parth and Rajiv are partners sharing profits and losses in the ratio of 3 : 1. Their capitals at the end of the
financial year 2017-2018 were ` 1,50,000 and ` 75,000. During the year 2017-2018, Parth’s drawings were `
20,000 and the drawings of Rajiv were ` 5,000. Profit before charging interest on capital for the year was `
16,000 which was duly credited to their accounts. Rajiv had brought additional capital of ` 16,000 on 1st
October, 2017. Calculate interest on capital @ 12% per annum for the year 2017-2018.
21. United India Limited purchased machinery from Berger Technologies Limited for ` 10,00,000 to start a
business of manufacturing low cost school dresses for children belonging to low income group. It made the
payment as follows
` 2,00,000 by cheque,
5,000, 10% preference shares of ` 100 each at par, and 3,000, 10% debentures of ` 100 each at par.
You are required to pass the journal entries for the transactions.
22. Daksh and Kavya are partners in a firm sharing profits in the ratio of 2 : 3. The balance sheet of the firm
as on 31st March, 2021 is given below
Balance Sheet
as at 31st March, 2021
Liabilities Amount Assets Amount
(`) (`)
Creditors 6,20,000 Bills Receivable 3,60,000
Bills Payable 1,80,000 Stock 16,00,000

Capital A/cs Machinery 18,40,000

Daksh 16,00,000 Land and Building 10,00,000
Kavya 24,00,000 40,00,000
48,00,000 48,00,000
The partners decided to share profits in equal ratio with effect from 1st April, 2021. The following
adjustments were agreed upon
(i) Land and building was valued at ` 16,00,000 and machinery at ` 16,40,000 and were to appear at
revalued amounts in the balance sheet.
(ii) The goodwill of the firm was valued at ` 80,000 but it was not to appear in books.
Prepare revaluation account, partners’ capital account and balance sheet.
23. Nikita Services Private Limited issued 50,000, 10% debentures of ` 100 each at 10% premium to the public
on 1st April, 2019, which are redeemable after 5 years of issue at a premium of 20%. Pass journal entry for
the issue of debentures, for writing-off ‘loss on issue of debentures’ in the same year of issue and prepare
‘loss on issue of debenture account’ also.
24. Riyaz and Imran, who were sharing profits and losses in the ratio of 3 : 1 respectively, decided to dissolve
the firm on 31st March, 2020.
Their balance sheet is as follows
Balance Sheet
Trade Creditors 15,000 Cash at Bank 1,000
Loan from Mrs. Riyaz 5,000 Imran’s Capital 5,000
Riyaz’s Capital 50,000 Profit and Loss A/c 4,000
Other Sundry Assets 60,000
70,000 70,000
The assets (other than cash at bank) realised ` 55,000 and all creditors including loan from Mrs. Riyaz were
paid-off less 5% discount. Realisation expenses amounted to ` 500. Prepare the realisation account, bank
account and the capital account of the partners assuming that both the partners are solvent.
25. Johnson Textiles and Industries Limited invited applications for issuing 75,000 equity shares of ` 100 each
at a premium of ` 30 per share. The amount was payable as follows
On application and allotment – ` 85 per share (including premium)
On first and final call – the balance account
Applications for 1,27,500 shares were received. Applications for 27,500 shares were rejected and shares were
allotted on pro-rata basis to the remaining applicants. Excess money received on application and allotment
was adjusted towards sum due on first and final call. The calls were made.
A shareholder, who applied for 1,000 shares, failed to pay the first and final call money. His shares were
forfeited. All the forfeited shares were re-issued at ` 150 per share fully paid-up.
Pass necessary journal entries for the above transactions in the books of Johnson Textiles and Industries
Limited
o
Zigzak Technologies Limited has been registered with an authorised capital of ` 2,00,000 divided into 2,000
shares of ` 100 each of which 1,000 shares were offered for public subscription at a premium of ` 5 per share
payable as under
On application ` 10; on allotment ` 25 (including premium); on first call ` 40 and on final call ` 30.
Applications were received for 1,800 shares of which applications for 300 shares were rejected outright,
the rest of the applications were allotted 1,000 shares on pro-rata basis. Excess application money was
transferred to allotment.
All the money were duly received except from Naveen, a holder of 200 shares, who failed to pay allotment

and first call money. His shares were later on forfeited and re-issued to Sohan at ` 60 per share, as ` 70
paid-up. Final call has not been made.
Record necessary journal entries.
26. Geeta, Sita and Reeta are partners with profit sharing ratio of 2 : 2 : 1. Their balance sheet is given below
Balance Sheet
as at 31st December, 2021
(`) (`)
Creditors 1,00,000 Bank 60,000
Bills Payable 70,000 Debtors 52,000
Reserve Fund 40,000 (–) Provision for (2,000) 50,000
Doubtful Debts
Workmen Compensation Fund 30,000 Building 2,00,000
Profit and Loss 20,000 Furniture 1,30,000
Provident Fund 20,000 Investment 30,000
Capital A/cs Prepaid Insurance 10,000
Geeta 80,000 Goodwill 20,000
Sita 80,000
Reeta 60,000 2,20,000
5,00,000 5,00,000
Additional Information
(i) Sangeeta comes as a new partner and brings ` 66,750 as capital and his share of goodwill in cash.
(ii) New ratio is 3 : 3 : 2 : 2.
(iii) Goodwill of the firm is ` 50,000.
(iv) Prepaid insurance is no more required.
(v) Provision for doubtful debts is to be increased to ` 5,000.
(vi) Investment is valued at ` 20,000 and is taken over by Geeta.
(vii) Furniture valued at ` 1,00,000.
(viii) Building valued at 120%.
Prepare necessary accounts and balance sheet.
o
Aryan, Shyam and Dalbir are partners with ratio of 5 : 3 : 2.
Balance Sheet
as at ...
(`) (`)
Creditors 1,00,000 Cash in Hand 40,000
Expenses Owing 20,000 Debtors 60,000
Reserve Fund 30,000 Building 1,00,000
Workmen Compensation Fund 10,000 Bills Receivable 40,000
Capital A/cs Goodwill 20,000
Aryan 60,000 Profit and Loss 30,000
Shyam 60,000 Patents 30,000
Dalbir 40,000 1,60,000
3,20,000 3,20,000

(i) Aryan takes retirement.
(ii) New ratio of Shyam and Dalbir is 1 : 1 and goodwill of the firm is valued at ` 60,000.
(iii) Expenses owing increased by ` 10,000.
(iv) Creditors increased to ` 1,05,000.
(v) ` 10,000 bills receivable dishonoured and are not recoverable.
(vi) Patents are now value less.
(vii) ` 20,000 unrecorded investment brought into books.
(viii) ` 10,000 paid to Aryan in cash and balance is transferred to his loan account. Prepare necessary
accounts and balance sheet.
Part B
(Financial Statement Analysis)
27. If current assets are ` 1,00,000, current liabilities are ` 50,000, inventories ` 6,000 and prepaid expenses `
10,000, what is the value of quick assets?
(a) ` 70,000 (b) ` 84,000
(c) ` 58,000 (d) ` 64,000
28. For a company manufacturing garments, procurement of raw material , incurrence of manufacturing
expenses, sale of garments are classified as______ activity.
(a) investing
(b) operating
(c) financing
(d) None of these
o
Which of the following statement(s) is/are true?
(i) Cash flow statement is not a replacement of fund flow statement
(ii) Cash flow statement is a substitute of income statement
(iii) Cash flow statement records only cash items
(iv) Cash flow statement records only cash equivalents items
Select the correct option from the below options
(a) Both (i) and (ii) are correct (b) Only (ii) is correct
(c) Only (i) is correct (d) All of these
29.
Balance Sheet (Extract)

Particulars Note No. 31 March 2020 (`) 31 March 2019 (`)
Share Capital 4,50,000 3,50,000
Reserves and Surplus 1 1,25,000 50,000
Notes to Accounts
Particulars Note No. 31 March 2020 (`) 31 March 2019 (`)
1. Reserve and Surplus
Surplus 1,25,000 50,000
Proposed Dividend – 2020 ` 1,00,000; 2019 ` 62,500
Based on above information given, you are required to find out the value of ‘net profit before tax and
extraordinary items’ to be used while preparing cash flow statement.
(a) ` 2,25,000 (b) ` 1,37,500
(c) ` 1,25,000 (d) ` 50,000

30. Under which head and sub-head will the following items appear in the balance sheet of a company?
(i) Share option outstanding account
(ii) Interest accrued and due on secured loans
(iii) Advances recoverable in cash
31. Livestock is a item of______assets under sub-head fixed assets and the major head non-current assets.
(a) trade receivables
(b) tangible
(c) intangible
(d) inventories
o
Ratio analysis under financial statement analysis is significant as it
(a) ignores qualitative factors
(b) helps in locating weak points of the firm
(c) helps in window-dressing
(d) does not requires any standards
32. Hanuman Group Limited has a current ratio at 3 : 1. Its management is interested in maintaining this ratio
at 4 : 1. What are the two choices to do so?
33. From the following balance sheet of Pratap Foods Limited as at 31st March, 2020 and additional information,
calculate the debtors’ turnover ratio and debt collection period.
Balance Sheet
Particulars 31st March 2020 (`)
I. EQUITY AND LIABILITIES
1. Shareholder’s Funds
(i) Share Capital 5,00,000
(ii) Reserves and Surplus 2,00,000
2. Non-Current Liabilities
(i) Long Term Borrowing 2,00,000
(ii) Deferred Tax Liabilites (Net) 50,000
3. Current Liabilities
(i) Trade Payables 2,00,000
(ii) Short-term Provisions 10,000
Total 11,60,000
II. ASSETS
1. Non-Current Assets :
Fixed Assets (Tangible assets) 7,00,000
2. Current Assets
(i) Trade Receivables 3,50,000
(ii) Inventories 1,10,000
Total 11,60,000
(i) Credit sales of ` 15,00,000 and cash sales of ` 2,50,000.
(ii) Trade receivables in the beginning of the year were ` 4,50,000.

o
Calculate trade receivables turnover ratio from the following information
Cost of revenue from operations ` 4,50,000, Gross profit on sales 20%, Cash sales 25% of net credit sales,
Opening trade receivables ` 60,000, Closing trade receivables ` 90,000.
34. Jaya an alumni of Apex School initiated her startup Super Moon Private Limited in 2020. The net profit
after tax of Super Moon Private Limited for the year ended 31st March, 2020 was ` 3,40,000. Following is
the extract of Balance Sheet of Super Moon Private Limited as at 31st March, 2020
Particulars 31 March 2020 (`) 31 March 2019 (`)

Inventories 69,000 72,000
Trade Receivables 94,000 61,000
Prepaid Expenses 14,000 3,000
Trade payables 82,000 78,000
Provision for Tax 13,000 19,000
Depreciation charged on plant and machinery ` 49,000, insurance claim received ` 20,000 and gain on sale
of investments of ` 8,000 appeared in the statement of profit and loss for the year ended 31st March, 2020.
You are required to
(i) Calculate net profit before tax and extraordinary items.
(ii) Calculate operating profit before working capital changes.
(iii) Calculate cash flow from operating activities.
******

Sample Paper 2
Accountancy
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
PART—A
1. Ganesh and Rakesh are partners sharing profits in the ratio of 2 : 3. Their balance sheet shows machinery
at ` 1,00,000; stock at ` 40,000 and debtors at ` 80,000. Mukesh is admitted and new profit sharing ratio
is agreed at 6 : 9 : 5. Machinery is revalued at ` 70,000 and a provision is made for doubtful debts @ 5%.
Ganesh’s share in loss on revaluation amount to ` 10,000. Revalued value of stock will be
(a) ` 30,000 (b) ` 49,000
(c) ` 31,000 (d) ` 50,000
2. When shares offered to public are subscribed completely, then it is referred to as

(a) undersubscription of shares (b) no subscription of shares
(c) full subscription of shares (d) None of these
o
Which one of the following items is not a part of subscribed capital?
(a) Forfeited shares (b) Bonus shares
(c) Equity shares (d) Preference shares
3. Find the closing balance of capital account from the given information. Opening balance of capital account
as at 1st April, 2019 of Daniel and Nathen are ` 5,00,000 and ` 5,40,000 respectively.
Daniel is entitled to take salary for ` 1,000 per month and Nathen is to take commission for ` 20,000.
(a) Daniel = ` 5,12,000, Nathen = ` 5,60,000 (b) Daniel = ` 5,60,000, Nathen = ` 5,12,000
(c) Daniel = ` 5,40,000, Nathen = ` 5,80,000 (d) Daniel = ` 5,00,000, Nathen = ` 5,40,000
4. Claim of the retiring partner is payable in which of the following form?

(a) Fully transferred to loan account to be paid later with some interest on it
(b) Partly in cash and partly as loan repayable later with agreed interest
(c) Fully in cash
(d) Any of the above method
o
At the time of admission, incoming partner become liable for the______of the firm and also acquires
right on the_______
(a) goodwill, capital (b) liabilities, assets
(c) assets, liabilities (d) None of these

5. A company issued 2,000 equity shares of ` 50 each at par payable as under. On application 20%, on allotment
40%, on first call 10%, on final call-balance. Applications were received for 5,000 shares. Allotment was made
on pro-rata basis. How much amount will be received in cash on allotment?
(a) ` 8,000 (b) ` 10,000
(c) ` 3,000 (d) Nil
6. Tanwar Medicare Private Limited issued 20,000 equity shares of ` 10 each at a premium of ` 2 payable
alongwith application. All the shares were applied and duly allotted. What will be the total amount at the
time of application?
(a) ` 2,00,000 (b) ` 2,40,000
(c) ` 2,20,000 (d) ` 2,60,00
o
Following amounts were payable on issue of shares by a company ` 3 on application, ` 3 on allotment, ` 2 on
first call and ` 2 on final call. Jairaj holding 250 shares paid only application and allotment money whereas
Viraj holding 200 shares did not pay final call. Amount of calls-in-arrear will be
(a) ` 900
(b) ` 3,100
(c) ` 1,900
(d) ` 1,400
7. Assertion (A): A new partner should contribute towards goodwill on his admission.
Reason (R): A new partner gets his share of profits from old partners thus he must compensate the old
partners for the share sacrificed by them.
Alternatives
(c) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(d) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion
(A)
8. Ashok, Trilok and Aalok are partners in profit sharing ratio of 2 : 3 : 4 with effect from 1st April, 2021, they
decided to share profits in 4 : 3 : 3. What is Trilok’s gain/sacrifice?
3 1
(a) Gain 100 (b) Gain 30
1
(c) No gain/sacrifice (d) Sacrifice 30
o
Arjun, Harish and Keshav are partners sharing profits in ratio of 3 : 3 : 2. They agree to admit Raghav into
4 2 1 1
the firm for 7 profit. Raghav acquired his share 7 from Arjun, 7 from Harish and 7 from Keshav. The
share of profit of Harish will be
6 32
(a) 56 (b) 56
5 13
(c) 56 (d) 56
9. Partners’ current account is maintained under

(a) fluctuating capital method (b) fixed capital method
(c) Both (a) and (b) (d) cumulative capital method
o
Neeraj and Pankaj are partners in a firm which develops software for industries. Neeraj’s minor son Rajendra
is a computer wizard. Can he be admitted in the partnership firm?
(a) Yes, if Pankaj agrees (b) Yes, if Neeraj agrees
(c) Yes, if Neeraj and Pankaj both agree (d) No, he cannot be admitted

10. Dhara, Zara, Nora were partners sharing profits in the ratio of 2 : 2 : 1. They decided to share future
profits in the ratio of 7 : 5 : 3 with effect from 1st April, 2020. Their balance sheet as on that date showed a
balance of ` 4,500 in advertisement suspense account for the amount to be debited respectively to the capital
accounts of Dhara, Zara and Nora for writing-off the amount in advertisement suspense account, following
journal entry is passed.
Dhara’s Capital A/c Dr X
Zara’s Capital A/c Dr Y
Nora’s Capital A/c Dr Z
To Advertisement Suspense A/c 45,000
Here X, Y, Z are
(a) ` 1,500, ` 1,500 and ` 1,500 (b) ` 1,800, ` 1,800 and ` 900
(c) ` 2,250, ` 2,250 and Nil (d) ` 2,100, ` 1,500 and ` 900
11. On 28th February, 2020, the first call of ` 2 per share became due on 25,000 equity shares allotted by Mrinal
Trading Private Limited Nakul, a holder of 500 shares did not pay the first call money. Mradul, a holder of
375 shares paid the second and final call of ` 4 per share along with the first call.
Pass the necessary entry only for the amount received by opening calls-in-arrears and calls-in-advance
account in the books of the company.
(a) Equity Share First Call A/c Dr 50,000

Call-in-arrears A/c Dr 1,000
To Bank A/c 49,500
To Calls-in-advance A/c 1,500
(b) Bank A/c Dr 50,500
Calls-in-arrears A/c Dr 1,000
To Equity Share First Call A/c 50,000
(c) Bank A/c Dr 50,500
Calls-in-advance A/c Dr 1,000
To Call-in-arrears A/c 1,500
12. Jaswant Private Limited invited applications for issuing 1,000, 12% debentures of ` 100 each at a discount
of 5%. These debentures were redeemable after three years at par. Applications for 1,200 debentures were
received. Pro-rata allotment was made to all the applicants. Journalise.
(a) Bank A/c Dr 1,00,000

12% Debentures A/c Dr 19,000
To Debenture Application and Allotment A/c 1,14,000
To Discount on Issue of Debentures A/c 5,000
(b) Bank A/c Dr 1,14,000
(c) Debenture Application and Allotment A/c Dr 1,14,000
Discount on Issue of Debentures A/c Dr 5,000
To 12% Debentures A/c 1,00,000
To Bank A/c 19,000
(d) Both (b) and (c)

13. A firm having the assets of ` 4,00,000 and liabilities of ` 1,68,000 earns the annual profit of ` 36,000.
The rate of normal profit being 12%, the amount of goodwill by capitalisation of super profit method, will
be________
(a) ` 27,840 (b) ` 8,160
(c) ` 97,920 (d) ` 68,000
14. A manager gets 5% commission on net profit after charging such commission, gross profit ` 29,000 and
expenses of indirect nature other than manager’s commission are ` 8,000. Amount of commission will be
(a) ` 750 (b) ` 1,100
(c) ` 1,050 (d) ` 1,000
Magan and Jagan entered into partnership on 1st April, 2019. They do not have partnership deed. They
contributed capitals of ` 10,00,000 and ` 6,00,000 respectively. On 31st October, 2019, Magan advanced a
loan of ` 4,00,000 to the firm without any agreement as to interest. Books are closed on 31st March every
year.
Profit and Loss A/c

Dr. for the year ended 31st March, 2020 Cr.
Particulars Amount (`) Particulars Amount (`)
To ... ....... By Net Profit .......
To Net Profit Transferred to Profit and Loss 8,50,000
Appropriation A/c
....... .......
15. What will be interest on loan ?

(a) ` 5,000 (b) ` 2,400
(c) ` 24,000 (d) ` 10,000
16. What will be net profit from profit and loss account ?
(a) ` 8,40,000 (b) ` 8,60,000
(c) ` 8,70,000 (d) ` 8,50,000
17. Sachin, Rajveer and Mohsin were the partners sharing of 5:3:2. on 31st March, 2022 their Balance Sheet was
as under:

Capitals : Leasehold Premises 1,25,000
Sachin 1,50,000 Patents 30,000
Rajveer 1,25,000 Machinery 1,50,000
Mohsin 75,000 3,50,000 Stock 1,90,000
Creditors 1,55,000 Cash at Bank 40,000
Workmen’s Compensation Reserve 30,000
5,35,000 5,35,000
Rajveer died on 1 August, 2022. It was agreed that:
st
(i) Goodwill of the firm is to be valued at ` 1,75,000.

(ii) For the purpose of calculating Rajveer’s share in the profits of 2022-23, the profits should be taken to
have accrued on the same scale as in 2021-22, which were ` 75,000.
(iii) Interest on capital @ 9% p.a.
Prepare Rajveer’s Capital Account to show the amount due to his executors.

18. Reena, Leena, and Neera are partners sharing profits equally. Reena died on 30th April 2022. The firm had
workmen’s compensation reserve of ` 20,000, against which there is claim of ` 2,000 on this date. The firm
has investment of market value of ` 1,90,000 appearing in the books of ` 2,00,000. Investment fluctuation
fund appear at ` 40,000. Pass journal entries for treatment of reserves.
19. Rashmi, Lavanya and Tania were partners in the firm sharing profits and losses equally. On 1st April, 2022,
they mutually decided to give more profit to Rashmi as she was comparatively contributing more time to
the business than other two partners, so they decided to give half the share to Rashmi and decided to share
the remaining profit equally. Following balances appear on this date:
General reserve ` 1,00,000, Profit & Loss A/c (Dr. balance) ` 60,000, Revaluation loss ` 30,000 and Goodwill
is to be valued at 10% more than twice the profit of last year which was ` 50,000. The partners do not want
to show the effect of above changes in the books. Pass the single adjusting entry for the same.
o
Jaspreet and Balbir started their partnership firm sharing profits in the ratio of 3 : 2 on 1st April, 2022. Their
cousin, Simran completed her course in legal studies. So, they requested her to join their firm to provide all
legal advices to which Simran agreed with 1/5th share in profits of the firm. Simran contributed ` 2,00,000
for capital and premium for goodwill. Goodwill of the firm was valued at ` 3,50,000. Jaspreet and Balbir
decided to share the remaining profit in the ratio of 4 : 3. Pass the necessary journal entries if half of the
premium for goodwill credited to the partners is withdrawn by them.
20. Newbi Cloths Limited is registered with an authorised capital of ` 50,00,000 divided into 50,000 equity
shares of ` 100 each. Out of these, the company issued 40,000 shares at a premium of 10%. The amount per
share was payable as follows:
` 30 on application
` 30 (including premium) on allotment.
Balance on first and final call
Public applied for 39,000 shares. Only application and allotment money was called till 31st March, 2022. A
shareholder holding 500 shares did not pay the allotment money. Show the share capital in the Balance Sheet
of Newbi Cloths Limited as at 31st March, 2022 as per Schedule III of Companies Act.
o
Briefly explain the following terms:
(i) ESOP
(ii) Private placement of shares
(iii) Oversubscription of shares
21. Ferox Limited issued 20,000 10% Debentures of ` 100 each at a premium of ` 60 per debenture. The
company received application for 35,000 debentures. 15,000 debentures were rejected and rest were allotted
debentures. The whole money was payable on application. Pass necessary journal entries for the issue of
debentures. Also present it in the balance sheet.
22. Teena and Veena were partners in a firm sharing profits equally. In spite of repeated reminders by the
authorities, they kept evading the taxes. The court ordered for the dissolution of their partnership firm on
31st March, 2022. Teena was deputed to realise the assets and to pay the liabilities. She was paid ` 1,000 as
commission for her services. They were having ` 8,000 (credit balance) in Profit and Loss A/c on the date
of dissolution. From the information given below, complete Realisation A/c, Partners’ Capital A/cs and
Cash A/c.
Dr. Realisation A/c Cr.

Particulars Amount Particulars Amount
(`) (`)
To Building 1,52,000 By Prov. for Doubtful Debts 4,000
Investments 28,600 By Creditors 80,000
Debtors 24,000 By Teena’s Spouse Loan 40,000
Bills Receivable 17,400 By Investments Fluctuation 8,000
Fund

To Goodwill 20,000 By Cash A/c: (Assets realised)

Teena’s Capital A/c (Spouse ...... Debtors 24,000
Loan)
Cash A/c: Building .....
To Creditors ..... Bills Receivable 36,000 2,12,000
Realisation Expenses 2,500 ..... By Veena’s Capital A/c ( 27,000
Investments)
To Teena’s Capital A/c .....
(Commission)
To Profit transferred to:
Teena’s Capital A/c .....
Veena’s Capital A/c ..... .....
3,71,000 3,71,000
Dr. Partner’s Capital A/cs Cr.

Particulars Teena Veena Particulars Teena Veena
(`) (`) (`) (`)
To Realisation A/c ........ By Balance b/d 42,000 42,000
To Cash A/c ........ ........ By Realisation A/c (Profit) ........ ........
By Realisation A/c ........
By Profit and Loss A/c ........ ........
........ ........ ........ ........
Dr. Cash A/c Cr.

To Balance b/d 6,000 By Veena’s Loan A/c 24,000
To Realisation A/c ........ By Realisation A/c (Creditors & ........
Expenses)
By Teena’s Capital A/c ........
By Veena’s Capital A/c ........
........ ........
23. Soltex Chemicals Limited invited applications for 70,000 shares of ` 10 each payable as ` 3 on application,
` 3 on allotment, ` 2 on first call and ` 2 on final call. Public has applied for 1,05,000 shares. Pro-rata
allotment was made to 90,000 shares and rest was rejected.
Rohan the holder of 700 shares failed to pay allotment money and his share were forfeited on further
nonpayment of first call. After forfeiting the shares final call was made.
Sohan the holder of 800 shares failed to pay the final call and his shares were also forfeited. Out of forfeited
shares 900 shares were re-issued for ` 8,000 as fully paid up (including 350 shares of Rohan and Balance of
Sohan).
Prepare Cash Book and pass the journal entries to record the above transactions.
o
Writex Pen Limited invited applications for issuing 50,000 equity shares of ` 10 each. The amount was
payable as follows:
On Application: ` 3 per share On Allotment: ` 4 per share
On First and Final Call: ` 3 per share
Applications were received for 75,000 shares and pro-rata allotment was made as follows:
Applicants for 40,000 shares were allotted 30,000 shares on pro-rata basis.
It was decided to utilise excess application money towards the sums due on allotment.
Rohit, to whom 1,200 shares were allotted out of the group applying for 40,000 shares failed to pay allotment
money. His shares were forfeited immediately after allotment.
Puneet, who had applied for 700 shares out of the group applying for 35,000 shares failed to pay the first
and final call. His shares were also forfeited. Out of the forfeited shares 1,000 shares were re-issued @ ` 8 per
share fully paid up. The re-issued shares included all the forfeited shares of Puneet.
24. The Balance Sheet of P, Q and R sharing profits and losses in the ratio of 5:3:2, as on 31st March, 2022 was
as under:

(`) (`)
Capitals : Land and Building 30,000
P 46,000 Plant and Machinery 35,000
Q 34,000 Stock 12,800
R 25,000 1,05,000 Debtors 16,000
Creditors 15,600 Less : Provision for doubtful debts (800) 15,200
Cash at Bank 27,600
1,20,600 1,20,600
On the same date, Q retires from the firm. The following adjustments were agreed upon:
(a) That an amount of ` 1,100 included in Sundry Debtors be written off as no longer receivable.
(b) That a Provision for Doubtful debts be maintained at an existing rate.
(c) There is an unrecorded liability for outstanding expenses of ` 955.
(d) Plant and Machinery includes a machinery amounted to ` 5,000 which was completely damaged was
sold for ` 1,000. Depreciation to be charged on remaining machinery @ 10%.
(e) Unrecorded furniture amounted to ` 1,000 was accepted by Q towards payment due to him and
balance was transferred to his loan A/c.
(f) Goodwill of the firm was valued at ` 70,000.
You are required to prepare Revaluation A/c, Partners’ Capital A/cs and Balance sheet of the new firm.
o
Romesh and Kiran were partners sharing profits and losses in the ratio of 3 : 2. On 1st April, 2022, Koyal was
admitted for 1/5th share. Balance Sheet of Romesh and Kiran on 31st March, 2022 was as under:

(`) (`)
Capitals : Pland and Machinery 18,000
Romesh 40,000 Furniture 40,000
Kiran 20,000 Profit & Loss A/c 25,000
Employees Provident Fund 10,000 Sundry Debtors 9,000
Workmen Compensation Fund 16,000 Cash in Hand 1,500
Sundry Creditors 7,500
93,500 93,500
On the above date Koyal was admitted with the following terms:
(a) Koyal will bring ` 20,000 for her capital and ` 5,000 for her share of goodwill premium.
(b) Provision for doubtful debts is to be created @ 5%.
(c) There was a liability of ` 6,000 for workmen compensation.
(d) There was a unrecorded furniture for ` 5,000.
Prepare Revaluation A/c, Partners’ Capital A/cs and Balance Sheet of the new firm.

25. Jeet, Pant and Kumar were partners of an architect firm sharing profits in the ratio of 2 : 2 : 1. Their
partnership deed provided the following:
(i) A monthly salary of ` 15,000 each to Jeet and Pant.
(ii) Kumar was guaranteed a profit of ` 5,00,000 and Jeet guaranteed that he will earn an annual fee of
` 2,00,000. Any deficiency arising because of guarantee to Kumar will be borne by Jeet and Pant in
the ratio of 3 : 2.
During the year ended 31st March, 2018 Jeet earned fee of ` 1,75,000 and the profits of the firm amounted
to ` 15,00,000.
Showing your workings clearly prepare Profit and Loss Appropriation Account and the Capital Account of
Jeet, Pant and Kumar for the year ended 31st March, 2018.
26. Pentex Services Private Limited provides its services in South India. Seeing its growth and success, it
decided to expand in other parts of India too, especially North India. This would involve huge expenditure
for which the directors decided to issue ` 40,00,000, 12% Debentures of ` 100 each at par to be redeemed at
5% premium after 6 years. It has a balance of ` 60,000 in securities premium reserve. Answer the following
questions on the basis of the above information.
(i) State the amount of application money received.
(ii) What amount will be debited to “Loss on Issue of Debentures Account”?
(iii) Pass necessary Journal entry for writing off “Loss on Issue of Debentures Account”.
PART—B
Analysis of Financial Statements
27. Empire Innovations Private Limited paid ` 30,000 as installment for machinery purchased on credit which
included interest of ` 5,000. How will this payment be presented while preparing cash flow statement?
(a) It will be shown as investing activity
(b) It will be shown as financing activity
(c) It will be shown as operating activity
(d) Not to be present while preparing cash flow statement
28. What will be the value of shareholder’s fund, if 12% debentures are ` 5,00,000 and debt-equity ratio is 2.5
: 1?
(a) ` 2,00,000 (b) ` 4,00,000
(c) ` 3,00,000 (d) ` 5,00,000
29. A company issued capital. A shareholder paid all money on allotment while first call is not called by
company. Where will you show this advance in balance sheet of the company?
(a) Long-term liability (b) Current liability
(c) Current assets (d) None of these
o
Which of the following is not correct?
(i) Sale of fixed asset (book value ` 40,000) at a loss of ` 5,000 will increase debt-equity ratio.
(ii) Issue of new shares for cash will decrease debt-equity ratio.
(iii) Redemption of debentures for cash will decrease debt-equity ratio.
(iv) Declaration of final dividend will decrease debt-equity ratio.
(a) (i) and (ii) (b) Only (i)
(c) (i) and (iv) (d) Only (iv)
30. If the net profits earned during the year are ` 50,000 and amount of debtors in the beginning and the end
of the year are ` 10,000 and ` 20,000 respectively, then the cash from operating activities will be equal
to_______
(a) ` 60,000 (b) ` 50,000
(c) ` 10,000 (d) ` 40,000
o
In the net profit is ` 35,000 after writing-off goodwill ` 6,000 and loss on sale of furniture ` 1,000, cash flow
from operating activities will be
(a) ` 42,000 (b) ` 35,000
(c) ` 28,000 (d) ` 29,000
31. The firm can make some year end changes to their financial statements, to improve their ratios. Then the
ratios end up being nothing but window dressing.
Briefly explain the limitation of Ratio Analysis highlighted in the above situation. Also explain any two
other limitations of Ratio Analysis apart from the identified above.
32. State any one importance and one limitation of financial statement analysis.
33. List two items each which are recorded under the following head in the Balance Sheet as per Schedule III of
the Companies Act, 2013.
(a) Short-term Provisions
(b) Other Current Liabilities
(c) Other Long-term Liabilities
(d) Long-term provisions
o
From the details given below, calculate Inventory Turnover Ratio and Operating Ratio:
(`)
Opening Inventory 28,000
Closing Inventory 22,000
Purchases 40,000
Revenue from Operations 80,000
Carriage Inwards 4,000
Employees’ Benefit Expenses 4,000
Depreciation 2,000
34. From the following information of Bikanerwala Sweets, prepare a Cash Flow Statement:
Balance Sheet as at 31.03.2022

Particulars Note 31 March 2022 31 March 2021
No. (`) (`)
1. Shareholder’s Funds :
(a) Share Capital 1 1,35,000 1,30,000
(b) Reserves and Surplus 2 22,000 4,000
2. Non-Current Liabilities (10% Debentures) 25,000 21,000
3. Current Liabilities (Trade Payables) 12,500 8,500
Total 1,94,500 1,63,500
II. ASSETS
Property, Plant and Equipments and Intangible Assets:
Property, Plant and Equipment : Tangible Fixed Assets (Net) 41,000 32,000
Intangible Assets (Goodwill) 8,000 10,500
Non-Current Investments 68,000 63,000
2. Current Assets :
Current Investments 49,000 50,000

Cash & Cash Equivalents 4,000 2,000

Other Current Assets 24,500 6,000
Total 1,94,500 1,63,500
Notes to Accounts:

1. Share Capital
Equity shares of ` 10 each 1,35,000 1,30,000
2. Reserves and Surplus
General Reserve 11,000 10,000
Surplus i.e. balance in Statement of Profit and Loss 11,000 (6,000)
22,000 4,000
Additional information:
(i) A machine costing ` 3,000 (depreciation provided thereon ` 400) was sold for ` 2,800. Depreciation
charged, during the year was ` 4,400.
(ii) Debentures were issued on 1st April, 2021.
(iii) Interim dividend of ` 30,000 has been paid during the year.
******

Sample Paper 3
Accountancy
4. Part - B has two options i.e. (i)Analysis of Financial Statements and (ii) Computerised Accounting.
PART—A
1. Victoria Sales Limited purchased an asset from Shivalik Marketing Limited for ` 5,40,000. Victoria Sales
Limited issued 8% debentures of ` 100 each at 10% discount against the payment. Calculate the number of
debentures issued by Victoria Sales Limited.
(a) 60,000 (b) 54,000
(c) 5,400 (d) 6,000
2. Grand Engineers Private Limited invited application for 4,000 equity shares of ` 10 each at the issue price
of ` 10. Complete amount was received on application itself. How the amount received will be shown in
balance sheet?
(a) Cash and cash equivalent = ` 40,000 (b) Shares = ` 40,000
(c) Cash not received = ` 40,000 (d) Amount utilised = ` 40,000
o
Power Marketing Limited bought business of Vaishnavi Marketing Limited and purchase consideration is to
be decided by net asset value method. Total assets and liabilities which were taken over were ` 22,40,000
and ` 4,00,000 respectively. ` 4,00,000 was paid in cash and for the balance amount, 6% debentures of ` 100
each were issued at a premium of 20%. Identify the number of debentures issued
(a) 4,000 debentures (b) 22,400 debentures
(c) 12,000 debentures (d) 20,000 debentures
3. If a partner withdraws consistently at the end of each quarter for a year, average period will be_____
(a) 6.5 (b) 7.5
(c) 4.5 (d) 5.5
o
On 1st April, 2020 P’s capital was ` 10,000. On 1st October, 2020, he introduces additional capital of `
5,000. Interest on capital @ 6% p.a. on 31st March, 2021 will be
(a) ` 900 (b) ` 525
(c) ` 750 (d) ` 450
4. A company is having authorised capital of ` 50,00,000 which is divided into shares of ` 100 each. Company
issued its 30,000 shares to the public @ 10% premium. All the shares are applied by the public and allotted
by the company.
The amount of paid-up share capital will be_______
(a) ` 33,00,000 (b) ` 55,00,000

(c) ` 50,00,000 (d) ` 30,00,000
5. Rupa Publishing Co. purchased a running business from Unnati Publishing Co. for a sum of ` 60,00,000.
Company received from vendor these assets and liabilities in this running business
Plant and machinery ` 40,00,000; furniture ` 5,00,000; debtors ` 8,00,000; land and building ` 20,00,000 and
creditors ` 3,00,000. What will be the amount of goodwill or capital reserve, as per the given information?
(a) Goodwill ` 3,00,000 (b) Capital Reserve ` 3,00,000
(c) Goodwill ` 10,00,000 (d) Capital Reserve ` 10,00,000
6. On the admission of a new partner, increase in the value of assets is debited to

(a) assets account (b) old partners’ capital account
(c) revaluation account (d) None of these
o
At the time of admission of a partner, undistributed profits appearing in the balance sheet of the old firm is
transferred to the capital account of
(a) all the partner in the new profit sharing ratio
(b) old partners in old profit sharing ratio
(c) old partners in new profit sharing ratio
7. Assertion (A): Gaining ratio is the ratio in which one or more partners gain some portion of other partners
share of profit.
Reason (R): New ratio plus sacrificing ratio is gaining ratio.
Alternatives
(a) Assertion (A) is false, but Reason (R) is true
(b) Assertion (A) is true, but Reason (R) is false
(d) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
8. Issue and allotment of shares to a selected group of persons privately and not to public in general through
public issue is known as______of shares.
(a) private placement (b) right issue
(c) employees stock option plan (d) All of these
o
Which category of shares are redeemed after a specific given period according to the terms of issue?
(a) Redeemable preference shares (b) Cumulative preference shares
(c) Irredeemable preference shares (d) Non-cumulative preference shares
9. Please see following :

Debtors 8,00,000
(–) Provision for Doubtful Debts (40,000) 7,60,000
Provision to be maintained @ 10% at the time of change in profit sharing ratio. What is the amount
credited/debited in revaluation account?
(a) Credit ` 80,000 (b) Credit ` 40,000
(c) Debit ` 40,000 (d) Debit ` 80,000
10. Aadil and Tahir are partners in a firm. They admit Zahir for 1/3 share. Zahir brought ` 2,00,000 as his

capital and ` 60,000 for premium. Journalise the transaction.
(a) Zahir’s Capital A/c Dr. 2,00,000

To Bank A/c 2,00,000
(b) Bank A/c Dr. 2,00,000
To Zahir’s Capital A/c 2,00,000
(c) Bank A/c Dr. 2,60,000
To Zahir’s Capital A/c 2,00,000
To Premium for Goodwill A/c 60,000
(d) Zahir’s Capital A/c Dr. 2,00,000
Premium for Goodwill A/c Dr. 60,000
11. Mayur and Ankur are partners sharing profits in the ratio of 3 : 2. They admit Kuber as a new partner. After
his admission, the profit sharing ratio becomes 5 : 5 : 3. On the date of Kuber’s admission, goodwill of the
firm is valued at ` 1,30,000. The amount of goodwill brought in by Kuber will be
(a) ` 1,00,000 (b) ` 30,000
(c) ` 1 ,30,000 (d) ` 50,000
12. In a firm, 10% of net profit after deducting all adjustments, including reserve is transferred to general
reserve. The net profit after all adjustments but before transfer to general reserve is ` 22,000. Calculate the
amount which is to be transferred to reserve.
(a) ` 2,000 (b) ` 1,250
(c) ` 1,100 (d) ` 2,200
13. Elena is a partner in a firm with a fixed capital of ` 80,000. She withdrew ` 5,000 during the financial year.
Journal entry will be
(a) Elena’s Current A/c Dr 5,000

To Drawings A/c 5,000
(b) Elena’s Capital A/c Dr 5,000
(c) Drawings A/c Dr 5,000
To Elena’s Current A/c 5,000
(d) Drawings A/c Dr 5,000
To Elena’s Capital A/c 5,000
14. Goodwill can be_______

(a) self-generated (b) purchased
(c) Both (a) and (b) (d) None of these
o
________is also known as articles of partnership.
(a) Partnership deed (b) Principles of partnership
(c) Partnership prospectus (d) None of these
Aditi and Deepesh are partners in a firm. On 1st April, 2020, their capitals were ` 4,00,000 and ` 6,00,000.
The profit for 2020-21 was ` 5,24,000. Partnership deed provided that interest on drawings/capital to be

calculated @ 10%, Deepesh had drawings of ` 1,00,000. He had withdrew this amount 31st December, 2020.
In addition to this, rent (in case of any partner providing his premises for business) for premises decided to
be ` 8,000 per month. Due to lockdown during pandemic, the partners decided to shut down factory and
shifted to Aditi’s farmhouse on 1st August, 2020.
15. What is amount transferred to profit loss appropriation account?

(a) ` 5,00,000 (b) ` 4,88,000
(c) ` 5,24,000 (d) Can’t say
16. What is interest on drawings of Deepesh?

(a) ` 7,500 (b) ` 2,500
(c) ` 10,000 (d) Can’t say
17. Harish and Pratham were partners sharing profits and losses in the ratio of 3 : 1. Mukesh was admitted
into partnership on 1st April, 2022 for 1/3rd share in profits. Mukesh brought in ` 45,000 as goodwill for
her 1/3rd share in profits which was entirely credited to Harish’s capital account. On the day of admission
,Pratham also compensated ` 15,000 to Harish for a share of profit sacrificed by Harish in favour of Pratham.
Following journal entries were passed:
Date Particulars L.F. Dr. (`) Cr. (`)

2022 Cash/Bank A/c Dr. 45,000
April 1 To Premium for Goodwill A/c 45,000
(Being Premium for Goodwill Brought in by Mukesh)
2022 Premium for Goodwill A/c Dr. 45,000
April 1 Pratham’s Capital A/c Dr. 15,000
To Harish’s Capital A/c 60,000
(Being entry for goodwill treatment passed)
Find the new ratio of Harish, Pratham and Mukesh.
18. Amar, Bharat and Satish are partners of the firm Agrawal Sweets. Their capitals as on 1st April, 2021 were
` 90,000; ` 70,000 and ` 50,000 respectively. Partnership deed states that partners are entitled to:
(a) Interest on Capital @ 10% p.a.
(b) Each partner has a right to withdraw up to ` 6,000 p.a. for personal use. Drawings in excess of this
limit will be charged interest @ 12% p.a.
(c) Satish will get a commission of 5% of the net profit.
During the year 2021-2022, firm earned a profit of ` 51,300. Amar, Bharat and Satish’s total annual
drawings were ` 12,000; ` 8,000 and ` 5,000 respectively. Prepare Profit and Loss Appropriation Account.
19. Calculate the value of goodwill valued at two years purchase of the average profit of the past four years. The
profits for the past four years of the firm run by Rajkumar and Ashish are:
Year Profit (`) Adjustment to be made

1. 57,000 Two items ignored to be accounted for:
Outstanding expenses ` 3,000
Accrued Interest earned ` 2,000
2. 74,000 ––
3. 92,000 After including an abnormal gain of ` 3,000
4. 1,16,000 Personal insurance premium ` 18,000 paid for partner wrongly
debited to firm’s account.
Pass journal entry for treatment of goodwill on Neel’s admission into the firm for 1/4th share of profit,
assuming he did not bring any premium for goodwill. Rajkumar and Ashish shared profits in ratio 3 : 2.

o
Neel and Bhuvnesh are partners sharing profits in the ratio 2:1. They admit Pratham for 1/4th share of
profit with a minimum guaranteed amount of ` 20,000. Any deficit will be borne equally. The profits earned
by the firm at the end of the financial year amounted to ` 64,000.
Pass necessary journal entries for the above.
20. RK Machines Limited took over Plant and Machinery of Altech Machine Limited at an agreed price of `
1,90,000 and payment was made by the issue of 9% Debentures of ` 100 each issued at a premium of 10%,
fraction, if any, is paid in cash. Pass necessary journal entries for the above in the books of RK Machines
Limited.
o
Pass journal entries at the time of issued of debentures.
(i) 1,300, 6% debentures of ` 100 each issued at a premium of ` 20 per debenture redeemable at a
premium of ` 35 per debenture.
(ii) 900, 6% debentures of ` 100 each issued at a discount of ` 10 per debenture redeemable at 120%.
21. Neel and Vimal are partners sharing profits and losses in the ratio of 3:2. Their Balance Sheet as at 31st
March, 2022 was as follows:

Outstanding Expenses 12,000 Cash in hand 71,000
Bills Payable 60,000 Debtors 1,50,000
Creditors 96,000 Less : Provision for
Employee Provident Fund 18,000 doubtful debts (25,000) 1,25,000
Investment Fluctuation Fund 20,000 Stock 50,000
Reserve 40,000 Investments (Market value of 1,20,000
investments ` 90,000)
Capital Accounts: Machinery
Neel 2,50,000 Building 60,000
Vimal 1,50,000 Profit & Loss A/c 2,00,000
20,000
6,46,000 6,46,000
On 1st April, 2022 they admitted Rajesh as a partner for 1/5th share in profits on the following terms:
(i) Rajesh will contribute proportionate capital and his share of goodwill in cash.
(ii) The Goodwill of the firm is valued at ` 50,000.
(iii) Provision on debtors was found to be in excess by ` 5,000.
(iv) Outstanding expenses will be increased by ` 1,000.
(v) A liability of ` 6,000 included in Sundry Creditors is not likely to arise.
Prepare Revaluation A/c, Partners’ Capital Accounts and the Balance Sheet of the newly constituted firm.
22. Toolnex Tool Limited issued 50,000; 11% debentures of ` 100 each payable ` 40 on Application and Allotment,
` 30 on First call and ` 30 on Second and Final call.
All debentures were subscribed for by the public and duly allotted.
When the first call was made one debentures holder holding 250 debentures failed to pay the call money
whereas another debentures holder holding 1,200 debentures paid the entire balance along with the first call.
The company maintains Calls-in-Arrears and Calls-in-Advance A/c.
Pass necessary journal entries for both the calls.
23. Pass necessary Journal Entries on the dissolution of a partnership firm in the following cases:
(i) Dissolution expenses ` 800.
(ii) Dissolution expenses ` 800 were paid by Prakash, a partner.
(iii) Harish, a partner was appointed to look after the dissolution work, for which he was allowed a
remuneration of ` 10,000. Harish agreed to bear the dissolution expenses. Actual dissolution expenses
` 9,500 were paid by Harish.
(iv) Rajni, a partner, agreed to look after the dissolution work for a commission of ` 5,000. Rajni agreed
to bear the dissolution expenses. Actual dissolution expenses ` 5,500 were paid by Mohan, another
partner, on behalf of Rajni.
(v) A partner, Kavita, agreed to look after the dissolution process for a commission of ` 9,000. She also
agreed to bear the dissolution expenses. Kavita took over furniture of ` 9,000 for her commission.
Furniture had already been transferred to Realisation Account.
(vi) A debtor, Ramesh, for ` 19,000 agreed to pay the dissolution expenses which were ` 18,000 in full
settlement of his debt.
24. Jagdamba Fabric Limited invited applications for 1,00,000 equity shares of ` 10 each issued at 20% premium
per share. The amount were payable as follows:
On Application ` 4.
On Allotment ` 5 per share. (including premium)
On First & Final call ` 3 per share.
Applications for 2,30,000 shares were received. Allotment was made as under:
Application Allotment
20,000 Nil
1,50,000 50,000
60,000 50,000
Excess application money to be adjusted against allotment and remaining excess money if any to be
refunded. All money were duly received except:
(a) Mahesh to whom 500 shares were allotted in the group applying for 1,50,000 shares did not pay any
amount after application.
(b) Kishore, who applied for 1,200 shares from the group applying for 60,000 shares failed to pay the first
and final call.
All shares on which payments were overdue were forfeited after the final call was made.
50% of the forfeited shares were re-issued @ ` 9 per share fully paid.
Pass necessary Journal entries for the above transaction in the books of Rajesh Limited.
o
Rani Sati Cloths Limited issued a prospectus inviting applications for 50,000 equity shares of ` 10 each at
a premium of
` 4 per share payable as follows:
On Application ` 5 (including premium ` 2)
On Allotment ` 5 (including premium ` 2)
On First and Final Call ` 4
Applications were received for 90,000 shares and prorata allotment was made to applicants of 75,000 shares,
the remaining applications being rejected.
It was decided to utilise the excess application money towards sums due on allotment.
Varsha who applied for 1,800 shares, failed to pay the allotment money due and her shares were forfeited
immediately after allotment.
Neha who was allotted 1,200 shares failed to pay the call money and subsequently her shares were forfeited.
The Directors decided to reissue 50% of forfeited shares held by Varsha for ` 12 per share and 50% of
forfeited shares held by Neha for ` 9 per share.
Pass necessary journal entries in the books of the Company for the above transactions.
25. Following is the Balance Sheet of Alakh, Tanuj and Saroj as on 31st March, 2022 who shared profits in the
ratio 5:4:1.

Capital Accounts: Machinery 2,50,000
Alakh 2,80,000 Investment 84,000
Tanuj 1,70,000 Stock 58,000
Saroj 90,000 Debtors 75,000

Bills Payable 22,000 Bills Receivable 38,000

Sundry Creditors 25,000 Bank 48,000
Workmen’s Compensation Fund 26,000 Goodwill 60,000
6,13,000 6,13,000
Tanuj died on 31st August 2022. Under the terms of the deed the executor of the deceased partner was
entitled to the following:
(i) Amount standing to the credit of the Partner’s Capital Account.
(ii) Interest on Capital at 12% p.a.
(iii) Tanuj had withdrawn ` 23,000 during the current year.
(iv) The deceased partner will be entitled to his share of profit up to the date of death based on the sales
during that period which amounted to ` 2,40,000. The rate of profit during the last three years has
been 10% on Sales.
(v) There was a claim on Workmen’s Compensation of ` 9,000.
(vi) Share of Goodwill was to be calculated by taking twice the amount of profit credited to his account
in the last year less 20%. Profits for the year 2021-2022 ` 72,000.
(vii) Tanuj’s Executors agreed to take over Investment at its book value, 30% of the balance amount due
to be paid immediately and the remaining amount to be transferred to Loan Account to be paid in
two annual instalments with interest @ 10% p.a.
Prepare Tanuj’s Capital A/c to be rendered to his Executor and Executor’s Account as on August 31, 2022.
o
Neel, Rohan and Naman were in partnership sharing profits in the ratio 2:1:1. On 31st March, 2019 their
Balance Sheet was as follows:

(`) (`)
Creditors 15,000 Cash at bank 17,000
Employee Provident Fund 5,000 Book Debts 24,500
Profit & Loss A/c 15,000 Less: Provision for doubtful debts (1,200) 23,300
Capital Accounts: Stock 14,700
Neel 40,000 Machinery 35,000
Rohan 30,000 Land & Building 40,000
Naman 25,000 95,000
1,30,000 1,30,000
On the above date Rohan retired and the following was agreed:
(i) Goodwill of the firm was valued at 2 years’ purchase of super profits. Average profits amounted to `
21,500 and normal rate of return in the industry was 10%.
(ii) Land and Building was to be appreciated by 20% and Machinery was to be reduced to 70%.
(iii) Bad debts amounted to ` 600.
(iv) Rohan was to be paid ` 9,250 on the date of retirement and balance amount to be paid in two equal
instalments together with interest @ 10% p.a.
(v) Capital of the new firm is fixed at ` 90,000. Surplus/Deficit will be adjusted through Bank Accounts.
(vi) There was an unrecorded liability for outstanding legal charges ` 500.
(vii) Creditors worth ` 10,000 allowed a discount of 10% on immediate payment and partners decided to
pay immediately.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the new firm after
Rohan’s retirement.
26. Blume Foods Limited registered with capital of ` 90,00,000 divided into 90,000 equity shares of ` 100 each.
The company issued prospectus inviting applications for 50,000 equity shares of ` 100 each payable as ` 20
on application, ` 30 on allotment, ` 20 on first call and balance on second call. Applications were received for
40,000 shares. Rohit to whom 1600 shares were allotted failed to pay final call money and these shares were
forfeited. Of the forfeited shares, 600 shares were reissued to Daksh, credited as fully paid for ` 90 per share.
(i) Pass journal entries for forfeiture and reissue of shares.

(ii) What amount of shares forfeiture Account will be shown in the Balance Sheet?
(iii) What amount will be shown under the head Shareholders’ Funds in the Balance Sheet?
PART—B
27. Shiv Shakti Industries Limited redeemed ` 1,00,000, 9% debentures at 10% premium. What will be the
amount of ‘Cash flows from financing activities’ ?
(a) ` 1,00,000 (b) ` 10,000
(c) ` 1,10,000 (d) None of these
28. In balance sheet, ‘Trade receivables’ is the sub-head under______

(a) non-current liabilities
(b) current liabilities
(c) non-current assets
(d) current assets
o
Which of the following statements are false?
(i) When all the comparative figures in a balance sheet are stated as percentage of the total, it is termed
as horizontal analysis.
(ii) When financial statements of several years are analysed, it is termed as vertical analysis.
(iii) Vertical analysis is also termed as time series analysis.
Codes
(a) Both (i) and (iii)
(b) Both (ii) and (iii)
(c) Both (i) and (ii)
(d) All three (i), (ii), (iii)
29. If gross profit ratio is 20% and gross profit is ` 1,00,000, what will be the value of Cost of Goods Sold
(COGS)?
(a) ` 3,00,000 (b) ` 3,50,000
(c) ` 4,00,000 (d) ` 2,00,000
o
What is the value of current liabilities, when working capital is ` 4,00,000 and current assets are ` 8,00,000?
(a) ` 4,00,000 (b) ` 12,00,000
(c) ` 2,00,000 (d) ` 1,50,000
30.

Particulars Note No. 31st December, 31st December,
2019 (`) 2018 (`)
EQUITY AND LIABILITIES
Share Capital 1 16,00,000 15,50,000
Notes to Accounts

Particulars 31st December, 31st December,

2019 (`) 2018 (`)
1. Share Capital
Equity Share Capital 15,00,000 13,50,000
12% Preference Share Capital 1,00,000 2,00,000
(i) Price per equity share is ` 10 and these were issued at par.
(ii) Preference shares were redeemed at 10% premium.
How much amount based on the above information, will be shown in financing activity while preparing cash
flow statement?
(a) Inflow ` 50,000 (b) Outflow ` 50,000
(c) Inflow ` 40,000 (d) Outflow ` 40,000
31. State the significance of Analysis of Financial Statements to the Lenders and Employees.
32. Current Ratio of GTS Food Private Limited is 3:1. State giving reasons, which of the following would
improve, reduce or not change the ratio?
(i) Issue of bonus shares out of profits;
(ii) Redemption of Preference Shares out of proceeds from fresh issue of shares of equal amount;
(iii) Revenue from Operations, i.e., Sale of goods for ` 80,000 on credit of 1 month. (Cost of goods `
60,000).
33. Calculate ‘Return on Investment’ and ‘Debt to Equity Ratio’ from the undermentioned information:
Net Profit after Interest and Tax ` 12,00,000
10% Debentures ` 20,00,000
Tax Rate 40%
Capital Employed ` 1,60,00,000
o
Under what head and sub-head will the following items appear in the Balance Sheet of a company as per
Schedule III Part I of the Companies Act, 2013?
(a) Subsidy Reserve (b) Interest on Calls-in-advance
(c) Mastheads and publishing titles (d) Stores and spares
(e) Unpaid dividend (f) Provision for employee benefits
(g) Bank Overdraft (h) Capital Reserve
34. From the following information of Jaipur Products Private Limited, prepare Cash Flow Statement.
Balance Sheet of Jaipur Products Private Limited as at 31.03.2022

No. (`) (`)
(a) Share Capital 3,20,000 2,40,000
(b) Reserves and Surplus 1 1,36,000 1,24,000
Long Term Borrowing – 12% Debentures 2,00,000 1,20,000
3. Current Liabilities:
(a) Trade Payables 88,000 68,000
(c) Short-term Provisions (Provisions for Taxation) 12,000 8,000

Total 7,56,000 5,60,000

II. ASSETS
(a) Property, Plant and Equipments and Intangible assets:
(i) Property, Plant and Equipment - Machines 3,36,000 2,64,000
(ii) Intangible Assets – Goodwill 56,000 80,000
(b) Long-term Investments – 10% Govt.Bonds 64,000 24,000
2. Current Assets
(a) Inventories 40,000 32,000
(b) Trade Receivables 1,56,000 64,000
(c) Cash & Cash Equivalents 1,04,000 96,000
Total 7,56,000 5,60,000
Notes to Accounts:

Reserves 80,000 72,000
Balance in Statement of Profit and Loss 56,000 52,000
1,36,000 1,24,000
(a) Investments costing ` 24,000 were sold for ` 16,000.
(b) Depreciation on Machinery ` 48,000
(c) Tax paid ` 4,800
(d) Debentures were issued and investments were purchased and sold on March 31st 2022.
******

Sample Paper 4
Accountancy
PART—A
1. Ganesh and Rakesh are partners sharing profits in the ratio of 2 : 3. Their balance sheet shows machinery
at ` 1,00,000; stock at ` 40,000 and debtors at ` 80,000. Mukesh is admitted and new profit sharing ratio
is agreed at 6 : 9 : 5. Machinery is revalued at ` 70,000 and a provision is made for doubtful debts @ 5%.
Ganesh’s share in loss on revaluation amount to ` 10,000. Revalued value of stock will be
(a) ` 30,000 (b) ` 49,000
(c) ` 31,000 (d) ` 50,000
2. When shares offered to public are subscribed completely, then it is referred to as

(a) undersubscription of shares (b) no subscription of shares
(c) full subscription of shares (d) None of these
o
Which one of the following items is not a part of subscribed capital?
(a) Forfeited shares (b) Bonus shares
(c) Equity shares (d) Preference shares
3. Find the closing balance of capital account from the given information. Opening balance of capital account
as at 1st April, 2019 of Daniel and Nathen are ` 5,00,000 and ` 5,40,000 respectively.
Daniel is entitled to take salary for ` 1,000 per month and Nathen is to take commission for ` 20,000.
(a) Daniel = ` 5,12,000, Nathen = ` 5,60,000 (b) Daniel = ` 5,60,000, Nathen = ` 5,12,000
(c) Daniel = ` 5,40,000, Nathen = ` 5,80,000 (d) Daniel = ` 5,00,000, Nathen = ` 5,40,000
4. Claim of the retiring partner is payable in which of the following form?

(a) Fully transferred to loan account to be paid later with some interest on it
(b) Partly in cash and partly as loan repayable later with agreed interest
(c) Fully in cash
(d) Any of the above method
o
At the time of admission, incoming partner become liable for the______of the firm and also acquires
right on the_______
(a) goodwill, capital
(b) liabilities, assets
(c) assets, liabilities
(d) None of these
5. A company issued 2,000 equity shares of ` 50 each at par payable as under. On application 20%, on allotment
40%, on first call 10%, on final call-balance. Applications were received for 5,000 shares. Allotment was made
on pro-rata basis. How much amount will be received in cash on allotment?
(a) ` 8,000 (b) ` 10,000
(c) ` 3,000 (d) Nil
6. Tanwar Medicare Private Limited issued 20,000 equity shares of ` 10 each at a premium of ` 2 payable
(a) ` 2,00,000 (b) ` 2,40,000
(c) ` 2,20,000 (d) ` 2,60,00
o
Following amounts were payable on issue of shares by a company ` 3 on application, ` 3 on allotment, ` 2 on
first call and ` 2 on final call. Jairaj holding 250 shares paid only application and allotment money whereas
Viraj holding 200 shares did not pay final call. Amount of calls-in-arrear will be
(a) ` 900
(b) ` 3,100
(c) ` 1,900
(d) ` 1,400
7. Assertion (A): A new partner should contribute towards goodwill on his admission.
Reason (R): A new partner gets his share of profits from old partners thus he must compensate the old
partners for the share sacrificed by them.
Alternatives
(A)
8. Ashok, Trilok and Aalok are partners in profit sharing ratio of 2 : 3 : 4 with effect from 1st April, 2021, they
decided to share profits in 4 : 3 : 3. What is Trilok’s gain/sacrifice?
3 1
(a) Gain 100 (b) Gain 30
1
(c) No gain/sacrifice (d) Sacrifice 30
o
Arjun, Harish and Keshav are partners sharing profits in ratio of 3 : 3 : 2. They agree to admit Raghav into
4 2 1 1
the firm for 7 profit. Raghav acquired his share 7 from Arjun, 7 from Harish and 7 from Keshav. The
share of profit of Harish will be
6 32
(a) 56 (b) 56
5 13
(c) 56 (d) 56
9. Partners’ current account is maintained under

(a) fluctuating capital method (b) fixed capital method
(c) Both (a) and (b) (d) cumulative capital method
o
Neeraj and Pankaj are partners in a firm which develops software for industries. Neeraj’s minor son Rajendra
is a computer wizard. Can he be admitted in the partnership firm?
(a) Yes, if Pankaj agrees (b) Yes, if Neeraj agrees
(c) Yes, if Neeraj and Pankaj both agree (d) No, he cannot be admitted

10. Dhara, Zara, Nora were partners sharing profits in the ratio of 2 : 2 : 1. They decided to share future
profits in the ratio of 7 : 5 : 3 with effect from 1st April, 2020. Their balance sheet as on that date showed a
balance of ` 4,500 in advertisement suspense account for the amount to be debited respectively to the capital
accounts of Dhara, Zara and Nora for writing-off the amount in advertisement suspense account, following
journal entry is passed.
Dhara’s Capital A/c Dr X
Zara’s Capital A/c Dr Y
Nora’s Capital A/c Dr Z
To Advertisement Suspense A/c 45,000
Here X, Y, Z are
(a) ` 1,500, ` 1,500 and ` 1,500 (b) ` 1,800, ` 1,800 and ` 900
(c) ` 2,250, ` 2,250 and Nil (d) ` 2,100, ` 1,500 and ` 900
11. On 28th February, 2020, the first call of ` 2 per share became due on 25,000 equity shares allotted by Mrinal
Trading Private Limited Nakul, a holder of 500 shares did not pay the first call money. Mradul, a holder of
375 shares paid the second and final call of ` 4 per share along with the first call.
Pass the necessary entry only for the amount received by opening calls-in-arrears and calls-in-advance
account in the books of the company.
(a) Equity Share First Call A/c Dr 50,000

Call-in-arrears A/c Dr 1,000
To Bank A/c 49,500
Calls-in-arrears A/c Dr 1,000
Calls-in-advance A/c Dr 1,000
To Call-in-arrears A/c 1,500
12. Jaswant Private Limited invited applications for issuing 1,000, 12% debentures of ` 100 each at a discount
of 5%. These debentures were redeemable after three years at par. Applications for 1,200 debentures were
received. Pro-rata allotment was made to all the applicants. Journalise.
(a) Bank A/c Dr 1,00,000

12% Debentures A/c Dr 19,000
To Discount on Issue of Debentures A/c 5,000
(b) Bank A/c Dr 1,14,000
(c) Debenture Application and Allotment A/c Dr 1,14,000
Discount on Issue of Debentures A/c Dr 5,000
To Bank A/c 19,000

13. A firm having the assets of ` 4,00,000 and liabilities of ` 1,68,000 earns the annual profit of ` 36,000.
The rate of normal profit being 12%, the amount of goodwill by capitalisation of super profit method, will
be________
(a) ` 27,840 (b) ` 8,160
(c) ` 97,920 (d) ` 68,000
14. A manager gets 5% commission on net profit after charging such commission, gross profit ` 29,000 and
expenses of indirect nature other than manager’s commission are ` 8,000. Amount of commission will be
(a) ` 750 (b) ` 1,100
(c) ` 1,050 (d) ` 1,000
Magan and Jagan entered into partnership on 1st April, 2019. They do not have partnership deed. They
contributed capitals of ` 10,00,000 and ` 6,00,000 respectively. On 31st October, 2019, Magan advanced a
loan of ` 4,00,000 to the firm without any agreement as to interest. Books are closed on 31st March every
year.
Profit and Loss A/c

To ... ....... By Net Profit .......
To Net Profit Transferred to Profit and Loss 8,50,000
Appropriation A/c
....... .......
15. What will be interest on loan ?

(a) ` 5,000 (b) ` 2,400
(c) ` 24,000 (d) ` 10,000
16. What will be net profit from profit and loss account ?
(a) ` 8,40,000 (b) ` 8,60,000
(c) ` 8,70,000 (d) ` 8,50,000
17. Sachin, Rajveer and Mohsin were the partners sharing of 5:3:2. on 31st March, 2022 their Balance Sheet was
as under:
Liabilities Amount Assets Amount (`)

(`)
Capitals : Leasehold Premises 1,25,000
Sachin 1,50,000 Patents 30,000
Rajveer 1,25,000 Machinery 1,50,000
Mohsin 75,000 3,50,000 Stock 1,90,000
Creditors 1,55,000 Cash at Bank 40,000
5,35,000 5,35,000
Rajveer died on 1st August, 2022. It was agreed that:
(ii) For the purpose of calculating Rajveer’s share in the profits of 2022-23, the profits should be taken to
(iii) Interest on capital @ 9% p.a.
Prepare Rajveer’s Capital Account to show the amount due to his executors.

18. Reena, Leena, and Neera are partners sharing profits equally. Reena died on 30th April 2022. The firm had
workmen’s compensation reserve of ` 20,000, against which there is claim of ` 2,000 on this date. The firm
has investment of market value of ` 1,90,000 appearing in the books of ` 2,00,000. Investment fluctuation
fund appear at ` 40,000. Pass journal entries for treatment of reserves.
19. Rashmi, Lavanya and Tania were partners in the firm sharing profits and losses equally. On 1st April, 2022,
they mutually decided to give more profit to Rashmi as she was comparatively contributing more time to
the business than other two partners, so they decided to give half the share to Rashmi and decided to share
the remaining profit equally. Following balances appear on this date:
General reserve ` 1,00,000, Profit & Loss A/c (Dr. balance) ` 60,000, Revaluation loss ` 30,000 and Goodwill
is to be valued at 10% more than twice the profit of last year which was ` 50,000. The partners do not want
to show the effect of above changes in the books. Pass the single adjusting entry for the same.
o
Jaspreet and Balbir started their partnership firm sharing profits in the ratio of 3 : 2 on 1st April, 2022. Their
cousin, Simran completed her course in legal studies. So, they requested her to join their firm to provide all
legal advices to which Simran agreed with 1/5th share in profits of the firm. Simran contributed ` 2,00,000
for capital and premium for goodwill. Goodwill of the firm was valued at ` 3,50,000. Jaspreet and Balbir
decided to share the remaining profit in the ratio of 4 : 3. Pass the necessary journal entries if half of the
premium for goodwill credited to the partners is withdrawn by them.
20. Newbi Cloths Limited is registered with an authorised capital of ` 50,00,000 divided into 50,000 equity
shares of ` 100 each. Out of these, the company issued 40,000 shares at a premium of 10%. The amount per
share was payable as follows:
` 30 on application
` 30 (including premium) on allotment.
Balance on first and final call
Public applied for 39,000 shares. Only application and allotment money was called till 31st March, 2022. A
shareholder holding 500 shares did not pay the allotment money. Show the share capital in the Balance Sheet
of Newbi Cloths Limited as at 31st March, 2022 as per Schedule III of Companies Act.
o
Briefly explain the following terms:
(i) ESOP
(ii) Private placement of shares
(iii) Oversubscription of shares
21. Ferox Limited issued 20,000 10% Debentures of ` 100 each at a premium of ` 60 per debenture. The
company received application for 35,000 debentures. 15,000 debentures were rejected and rest were allotted
debentures. The whole money was payable on application. Pass necessary journal entries for the issue of
debentures. Also present it in the balance sheet.
22. Teena and Veena were partners in a firm sharing profits equally. In spite of repeated reminders by the
authorities, they kept evading the taxes. The court ordered for the dissolution of their partnership firm on
31st March, 2022. Teena was deputed to realise the assets and to pay the liabilities. She was paid ` 1,000 as
commission for her services. They were having ` 8,000 (credit balance) in Profit and Loss A/c on the date
of dissolution. From the information given below, complete Realisation A/c, Partners’ Capital A/cs and
Cash A/c.

(`) (`)
To Building 1,52,000 By Prov. for Doubtful Debts 4,000
Investments 28,600 By Creditors 80,000
Debtors 24,000 By Teena’s Spouse Loan 40,000
Bills Receivable 17,400 By Investments Fluctuation 8,000
Fund

To Goodwill 20,000 By Cash A/c: (Assets realised)

Teena’s Capital A/c (Spouse ...... Debtors 24,000
Loan)
Cash A/c: Building .....
To Creditors ..... Bills Receivable 36,000 2,12,000
Realisation Expenses 2,500 ..... By Veena’s Capital A/c ( 27,000
Investments)
To Teena’s Capital A/c .....
(Commission)
To Profit transferred to:
Teena’s Capital A/c .....
Veena’s Capital A/c ..... .....
3,71,000 3,71,000
Dr. Partner’s Capital A/cs Cr.

Particulars Teena Veena Particulars Teena Veena
(`) (`) (`) (`)
To Realisation A/c ........ By Balance b/d 42,000 42,000
To Cash A/c ........ ........ By Realisation A/c (Profit) ........ ........
By Profit and Loss A/c ........ ........
........ ........ ........ ........
Dr. Cash A/c Cr.

To Balance b/d 6,000 By Veena’s Loan A/c 24,000
To Realisation A/c ........ By Realisation A/c (Creditors & ........
Expenses)
By Teena’s Capital A/c ........
By Veena’s Capital A/c ........
........ ........
23. Soltex Chemicals Limited invited applications for 70,000 shares of ` 10 each payable as ` 3 on application,
` 3 on allotment, ` 2 on first call and ` 2 on final call. Public has applied for 1,05,000 shares. Pro-rata
allotment was made to 90,000 shares and rest was rejected.
Rohan the holder of 700 shares failed to pay allotment money and his share were forfeited on further
nonpayment of first call. After forfeiting the shares final call was made.
Sohan the holder of 800 shares failed to pay the final call and his shares were also forfeited. Out of forfeited
shares 900 shares were re-issued for ` 8,000 as fully paid up (including 350 shares of Rohan and Balance of
Sohan).
o
Writex Pen Limited invited applications for issuing 50,000 equity shares of ` 10 each. The amount was
payable as follows:
On Application: ` 3 per share On Allotment: ` 4 per share
On First and Final Call: ` 3 per share
Applications were received for 75,000 shares and pro-rata allotment was made as follows:
It was decided to utilise excess application money towards the sums due on allotment.
Rohit, to whom 1,200 shares were allotted out of the group applying for 40,000 shares failed to pay allotment
money. His shares were forfeited immediately after allotment.
Puneet, who had applied for 700 shares out of the group applying for 35,000 shares failed to pay the first
and final call. His shares were also forfeited. Out of the forfeited shares 1,000 shares were re-issued @ ` 8 per
share fully paid up. The re-issued shares included all the forfeited shares of Puneet.
24. The Balance Sheet of P, Q and R sharing profits and losses in the ratio of 5:3:2, as on 31st March, 2022 was
as under:

(`) (`)
Capitals : Land and Building 30,000
P 46,000 Plant and Machinery 35,000
Q 34,000 Stock 12,800
R 25,000 1,05,000 Debtors 16,000
Creditors 15,600 Less : Provision for doubtful debts (800) 15,200
Cash at Bank 27,600
1,20,600 1,20,600
On the same date, Q retires from the firm. The following adjustments were agreed upon:
(a) That an amount of ` 1,100 included in Sundry Debtors be written off as no longer receivable.
(b) That a Provision for Doubtful debts be maintained at an existing rate.
(c) There is an unrecorded liability for outstanding expenses of ` 955.
(d) Plant and Machinery includes a machinery amounted to ` 5,000 which was completely damaged was
sold for ` 1,000. Depreciation to be charged on remaining machinery @ 10%.
(e) Unrecorded furniture amounted to ` 1,000 was accepted by Q towards payment due to him and
balance was transferred to his loan A/c.
(f) Goodwill of the firm was valued at ` 70,000.
You are required to prepare Revaluation A/c, Partners’ Capital A/cs and Balance sheet of the new firm.
o
Romesh and Kiran were partners sharing profits and losses in the ratio of 3 : 2. On 1st April, 2022, Koyal was
admitted for 1/5th share. Balance Sheet of Romesh and Kiran on 31st March, 2022 was as under:

(`) (`)
Capitals : Pland and Machinery 18,000
Romesh 40,000 Furniture 40,000
Kiran 20,000 Profit & Loss A/c 25,000
Employees Provident Fund 10,000 Sundry Debtors 9,000
Workmen Compensation Fund 16,000 Cash in Hand 1,500
93,500 93,500
On the above date Koyal was admitted with the following terms:
(a) Koyal will bring ` 20,000 for her capital and ` 5,000 for her share of goodwill premium.
(b) Provision for doubtful debts is to be created @ 5%.
(c) There was a liability of ` 6,000 for workmen compensation.
(d) There was a unrecorded furniture for ` 5,000.
Prepare Revaluation A/c, Partners’ Capital A/cs and Balance Sheet of the new firm.

25. Jeet, Pant and Kumar were partners of an architect firm sharing profits in the ratio of 2 : 2 : 1. Their
partnership deed provided the following:
(i) A monthly salary of ` 15,000 each to Jeet and Pant.
(ii) Kumar was guaranteed a profit of ` 5,00,000 and Jeet guaranteed that he will earn an annual fee of
` 2,00,000. Any deficiency arising because of guarantee to Kumar will be borne by Jeet and Pant in
the ratio of 3 : 2.
During the year ended 31st March, 2018 Jeet earned fee of ` 1,75,000 and the profits of the firm amounted
to ` 15,00,000.
Showing your workings clearly prepare Profit and Loss Appropriation Account and the Capital Account of
Jeet, Pant and Kumar for the year ended 31st March, 2018.
26. Pentex Services Private Limited provides its services in South India. Seeing its growth and success, it
decided to expand in other parts of India too, especially North India. This would involve huge expenditure
for which the directors decided to issue ` 40,00,000, 12% Debentures of ` 100 each at par to be redeemed at
5% premium after 6 years. It has a balance of ` 60,000 in securities premium reserve. Answer the following
questions on the basis of the above information.
(i) State the amount of application money received.
(ii) What amount will be debited to “Loss on Issue of Debentures Account”?
(iii) Pass necessary Journal entry for writing off “Loss on Issue of Debentures Account”.
PART—B
28. What will be the value of shareholder’s fund, if 12% debentures are ` 5,00,000 and debt-equity ratio is 2.5
: 1?
(a) ` 2,00,000 (b) ` 4,00,000
(c) ` 3,00,000 (d) ` 5,00,000
o
to_______
(a) ` 60,000 (b) ` 50,000
(c) ` 10,000 (d) ` 40,000
o
(a) ` 42,000 (b) ` 35,000
(c) ` 28,000 (d) ` 29,000
31. The firm can make some year end changes to their financial statements, to improve their ratios. Then the
ratios end up being nothing but window dressing.
Briefly explain the limitation of Ratio Analysis highlighted in the above situation. Also explain any two
other limitations of Ratio Analysis apart from the identified above.
32. State any one importance and one limitation of financial statement analysis.
o
(`)
Purchases 40,000
Depreciation 2,000
34. From the following information of Bikanerwala Sweets, prepare a Cash Flow Statement:
Balance Sheet as at 31.03.2022

No. (`) (`)
(a) Share Capital 1 1,35,000 1,30,000
3. Current Liabilities (Trade Payables) 12,500 8,500
Total 1,94,500 1,63,500
II. ASSETS
Property, Plant and Equipment : Tangible Fixed Assets (Net) 41,000 32,000
Intangible Assets (Goodwill) 8,000 10,500
Non-Current Investments 68,000 63,000
2. Current Assets :
Current Investments 49,000 50,000

Cash & Cash Equivalents 4,000 2,000

Other Current Assets 24,500 6,000
Total 1,94,500 1,63,500
Notes to Accounts:

1. Share Capital
Equity shares of ` 10 each 1,35,000 1,30,000
Surplus i.e. balance in Statement of Profit and Loss 11,000 (6,000)
22,000 4,000
(i) A machine costing ` 3,000 (depreciation provided thereon ` 400) was sold for ` 2,800. Depreciation
charged, during the year was ` 4,400.
(ii) Debentures were issued on 1st April, 2021.
(iii) Interim dividend of ` 30,000 has been paid during the year.
******

Sample Paper 5
Accountancy
4.Part - B has two options i.e. (i) Analysis of Financial Statements and (ii) Computerised Accounting.
PART—A
1. Nisan Industries Limited issued 10,000 equity shares of ` 10 each at a premium of ` 2 payable along
with application. All the shares were applied and duly allotted. Amount at the time of application will
be________
(a) ` 1,00,000 (b) ` 1,20,000
(c) ` 1,10,000 (d) ` 1,30,000
2. Puneet and Lalit are partners in a firm. They share their profits and losses in the ratio of 3 : 2. They have
decided that their new profits (losses) sharing ratio will be 1: 1. At that time their goodwill is valued at `
30,000. Calculate amount of goodwill which will be given by Lalit to Puneet.
(a) ` 2,800 (b) ` 3,000
(c) ` 2,500 (d) ` 2,400
3. Assertion (A): Goodwill is treated as an intangible asset.

Reason (R): Goodwill cannot be seen or touched, it can only be felt.
Alternatives
4. (d)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion
Pass journal entry for amount of ` 60,000 received on allotment of 14% debentures.
(a) 14% Debentures A/c Dr 60,000

To Bank A/c 60,000
To Debentures Allotment A/c 60,000
(c) Debentures Allotment A/c Dr 60,000
To Bank A/c 60,000
(A)
5. _______of a new partner results in reconstitution of the firm.

(a) Death (b) Change in Profit Sharing Ratio
(c) Admission (d) Retirement
o
Decrease in liability at the time of retirement of partner is
(a) credited to revaluation account (b) debited to goodwill account
(c) debited to revaluation account (d) Both (b) and (c)
6. Share of losses is transferred to______under fluctuating capital account method.

(a) partners’ current account (b) profit and loss account
(c) partners’ capital account (d) None of these
o
Need of profit and loss adjustment account is for
(a) charge against profits (b) rectification of errors or omissions
(c) appropriation of profits (d) None of these
7. A partner withdrew ` 2,000 at the beginning of each month from 1st June, 2019 till the end of the accounting
year upto 31st March, 2020. Interest on drawings is 12% per annum. You are required to calculate the
amount of interest.
(a) ` 1,150 (b) ` 1,400
(c) ` 1,100 (d) ` 1,200
8. When debentures are issued at par and are redeemable at a premium, the loss on such an issues debited to
(a) Debentures applications and allotment account (b) Loss on issue of debentures account
(c) Statement of profit and loss (d) All of the above
o
________days notice period is given to a defaulter on forfeiture.
(a) 21 days (b) 28 days
(c) 7 days (d) 14 days
9. Jeet and Meet are partners sharing profits in the ratio of 3 : 1. They admit Abhijeet as a partner who pays
` 8,000 as goodwill, the new profit sharing ratio being 2 : 1 : 1 among Jeet, Meet and Abhijeet. The amount
of goodwill will be credited to
(a) Only Meet (b) Only Jeet
(c) Jeet and Meet as ` 1,500 and ` 2,000 (d) ` 4,000 each
10. Redox Software Limited purchased an asset of ` 7,00,000 from Amba Industries Limited on 1st April, 2020.
` 2,00,000 were paid immediately and the balance by issue of ` 5,25,000, 12% debentures. Pass the journal
entry for payment made.
(a) Amba Industries Limited Dr. 7,00,000

Discount on Issue of Debentures A/c Dr. 25,000
(b) Amba Industries Limited. A/c Dr. 7,25,000
(c) Amba Industries Limited Dr. 7,00,000
o
Birla Pipes & Fitting Limited forfeited 1,000 shares of ` 10 each, ` 7 called-up, issued at a premium of `

2 per share to be paid at the time of allotment, for non-payment of first call of ` 2 per share. Entry on
forfeiture will be
(a) Share Capital A/c Dr. 9,000

To Share First Call A/c 2,000
To Share Forfeiture A/c 7,000
(b) Share Capital A/c Dr. 7,000
(c) Share Capital A/c Dr. 7,200
Securities Premium Reserve A/c Dr. 2,000
(d) Share Capital A/c Dr. 9,000
11. On the basis of the following data, how much final payment will be made to a partner on firm’s dissolution?
Credit balance of capital account of the partner was ` 50,000. Share of loss on realisation amounted to `
10,000. Firm’s liability taken over by him was for ` 8,000
(a) ` 40,000 (b) ` 52,000
(c) ` 32,000 (d) ` 48,000
12. Karim and Wasim are partners in the ratio of 3 : 2. Their capitals are ` 2,000 and ` 1,000 respectively.
Interest on capitals is allowed @ 8% p.a. Firm earned a profit of ` 150 for the year ended 31st March, 2021.
Interest on capital payable for the year is
(a) Karim ` 90; Wasim ` 60 (b) Karim ` 100; Wasim ` 50
(c) Karim ` 160; Wasim ` 80 (d) no interest will be allowed
13. Ranbir and Sarthak are partners in a firm sharing profits and losses in the ratio of 5 : 7 respectively. The
extract of their Balance Sheet of 31st December, 2019 is as follows

Creditors 2,00,000
If creditors amounting to ` 24,000 are to be written-off as they are not likely to be claimed, then at what
value will creditors be shown in new balance sheet?
(a) ` 2,24,000 (b) ` 1,76,000
(c) ` 24,000 (d) None of these
o
Viraj, Gopal and Hitesh were partners in a firm sharing profits in the ratio of 1 : 2 : 2. They decided to
share future profits in the ratio of 7 :5 :3 with effect from 1st April, 2021. Their balance sheet as on that
date showed a balance of ` 22,500 in deferred revenue expenditure account. Entry for writing-off deferred
revenue expenditure is
Viraj’s Capital A/c Dr X
Gopal’s Capital A/c Dr Y
Hitesh’s Capital A/c Dr Z
To Deferred Revenue Expenditure A/c 22,500
Here X, Y, Z are
(a) ` 10,500, ` 7,500 and ` 4,500 (b) ` 11,250, ` 9,000 and 9,000
(c) ` 7,500, ` 7,500 and ` 7,500 (d) ` 4,500, ` 9,000 and ` 9,000

14. A company forfeited 400 shares of ` 10 each on which application money of ` 3 has been paid. Out of these,
200 shares were reissued as fully paid up and ` 400 has been transferred to capital reserve. The rate at which
these shares were reissued is_______
(a) ` 11 per share (b) ` 8 per share
(c) ` 10 per share (d) ` 9 per share
Ansh and Daksh are partners engaged in the business of running fast food corner, sharing profits equally.
Apart from selling at their fast food point. They did home deliveries too. Their initial capital contribution
was ` 1,50,000 and ` 1,00,000 respectively. Over the years, they have build a reputation by selling good
quality products and maintaining the qualities all these years. During the financial year, their profit was `
75,000. Normal rate of return on the business is 20%. Ansh and Daksh decided to calculate the goodwill of
the firm for future purposes.
15. What is the capitalised value of business?

(a) ` 2,50,000 (b) ` 75,000
(c) ` 15,000 (d) ` 3,75,000
16. What is the normal profits of the business?

(a) ` 2,50,000 (b) ` 25,000
(c) ` 50,000 (d) ` 75,000
17. Anil, Sameer and Neeraj were partners in a firm sharing profits and losses in the ratio 5 : 3 : 2. They agreed
to dissolve their partnership firm on 31st March 2021. Anil was deputed to realise the assets and pay the
liabilities. He is entitled to a commission of ` 1,200 for his services. The Balance Sheet of the firm as on this
date was:

(`) (`)
Capital A/cs: Plant and Machinery 30,000
Anil 37,550 Stock 5,500
Sameer 13,450 51,000 Investments 15,000
Investment Fluctuation Fund 4,500 Debtors 7,100
Bills Payable 3,700 Less: Provisions for Bad debts (450) 6,650
Creditors 10,000 Cash 5,600
Neeraj’s Capital A/c 6,450
69,200 69,200
Anil took over investments for ` 12,500. Stock and Debtors realised ` 11,500. Plant and machinery were sold
to Vimal for ` 22,500 for cash. Unrecorded assets realised ` 1,500. Realisation Expenses paid amounted `
800.
Pass necessary journal entries for the above transactions when all the assets (other than cash) and outsider’s
liabilities are transferred to Realisation A/c.
18. X, Y and Z are partners with their fixed capitals as ` 30,000, ` 20,000 and ` 10,000 respectively. According
to the partnership deed, they are entitled to interest on capital @ 5% p.a.. Y is entitled to a salary of ` 800
per month. Z is entitled to a commission of 5% on the profits after charging interest on capital but before
charging the salary payable to Y. The net profits for the year were ` 30,000 distributed in the ratio of capital
without providing any of the above adjustments. The profits were to be shared in the ratio 5 : 3 : 2.
Pass the necessary adjustment entry and show your working clearly.
o

Nitin, Kabir and Suraj are partners sharing profits in the ratio of 3 : 2 : 1. Suraj decided to retire and after
Suraj’s retirement Nitin and Kabir decided to share profits and losses in the ratio of 1 : 3. At the time of
Suraj’s retirement, the goodwill of the firm is valued at ` 1,80,000. Pass necessary journal entries for the
treatment of goodwill. General Reserve ` 21,000 and goodwill ` 24,000 appear in the balance sheet on Suraj’s
retirement.
19. Emkay Industries Limited took over assets of ` 16,00,000 and liabilities of ` 4,00,000 of Marudhar Packaging
Limited for a purchase consideration of ` 13,00,000. The company issued 13,000, 8% debentures of ` 100
each at a discount of 4% in favour of Marudhar Packaging Limited and paid the balance amount by cheque
for purchase consideration.
Pass necessary journal entries for the above transactions in the books of Emkay Industries Limited.
o
Solar Power Energies Limited decided to issue 10,00,000 equity shares of ` 10 each at a premium of 60% to
finance the project. Applications were received for 17,00,000 shares. The company rejected 5,00,000 shares
and made pro-rata allotment to the remaining applicants. The whole of share money payable on application.
Pass necessary journal entries for recording the above transaction.
20. The average capital employed in a partnership business is ` 5,00,000 and the average net profit earned is
` 65,000. The normal rate of return on capital employed is 8% and employees remuneration of ` 20,000 is
expected to be payable in the future. Compute the super profit of the firm and also compute the goodwill
of the firm at 3 years’ purchase of the super profits.
21. Pass necessary journal entries for issue of debentures for the following:
(a) SVF Services Limited issued 1,800, 9% debentures of ` 100 each at a discount of 10% redeemable at a
premium of 5%.
(b) Narayana Technologies Limited issued 20,000, 12% debentures of ` 10 each at a premium of 20%
redeemable at a premium of 10%.
22. P, Q and R are partners in a firm sharing profits in the ratio 3 : 2 : 1. Their Balance Sheet as at 31st March
2022 stood at:

(`)
Creditors 2,80,000 Cash at Bank 1,45,000
General Reserve 30,000 Debtors 1,90,000
Workmen Compensation Reserve 60,000 Stock 1,75,000
Capital A/cs: Investments 2,50,000
P 3,00,000 Buildings 3,10,000
Q 2,20,000
R 1,80,000 7,00,000
10,70,000 10,70,000
Q died on 30 June 2022 and as per deed his executors are entitled to:
th
(a) Amount standing to the credit of his capital account and interest thereon @ 10% p.a.
(b) Share of profits for the intervening period will be based on the sales during that period and average of
three year’s profits earned in the past. Sales for the period were ` 12,00,000. The rate of profit during
past three years had been 10% on sales.
(c) Share of goodwill and goodwill of the firm is valued at ` 4,32,000.
Pass necessary journal entries to transfer amount due to Q to his executor.
23. Alka Polymers Limited invited applications for issuing 1,00,000 equity shares of ` 10 each. The shares were
issued at a premium of ` 20 per share and the amount was payable as follows:
On Application and Allotment ` 14 per share (including premium of ` 10)
On First call ` 8 per share (including premium of ` 5)
On Final call ` 8 per share (including premium of ` 5)
Applications were received for 96,000 shares. A shareholder holding 7,000 shares paid the full amount along
with application and allotment. A Shareholder Ganesh holding 8,000 shares failed to pay both call money
and Vikram holder of 5,000 shares failed to pay final call. The shares on which the dues were not paid were
forfeited.
Pass the necessary journal entries for the above transactions by opening calls-in-advance and calls-in-arrears
account.
o
Advance Technology Limited invited applications for 3,00,000 equity shares of ` 100 each. The amount was
payable as follows:
On Application ` 30 per share
On Allotment ` 50 per share
On First Call ` 10 per share
On Final Call ` 10 per share
Applications were received for 6,00,000 shares and pro-rata allotment was made to the applicants of 5,00,000
shares in the following groups:
A. Applicants of 2,00,000 shares were allotted 1,00,000 shares
B. Applicants of 3,00,000 shares were allotted 2,00,000 shares
The excess amount received on application was adjusted towards amount due on allotment.
A shareholder holding 6,000 shares out of the group A failed to pay allotment and on his subsequent failure
to pay first call his shares were forfeited. Another shareholder who applied for 18,000 shares from group B
did not pay the first and final call. These shares were forfeited after final call.
Pass the necessary journal entries for the above transactions in the books of Advance Technology Limited.
24. Reena and Meena were partners sharing profits and losses in the ratio of 5:3. Their Balance Sheet as at 31st
March, 2019 was as under:

Bills Payable 22,000 Cash in hand 12,000
Creditors 45,000 Cash at Bank 83,000
Workmen Compensation Fund 40,000 Debtors 82,000
General Reserve 70,000 Stock 66,000
Profit and Loss Account 20,000 Investments 60,000
Capital Account: Furniture 75,000
Reena 3,20,000 Machinery 2,25,000
Meena 1,90,000 Goodwill 1,04,000
7,07,000 7,07,000
On 1 April, 2019 they admitted Teena into the partnership firm for 1/4th share which she acquired from
st
Reena and Meena in the ratio of 2:1 respectively. Other adjustments were as follows:
(i) The Goodwill of the firm is valued at ` 96,000 and Teena was unable to contribute her share of
goodwill in cash.
(ii) One customer who owed the firm ` 2,000 became insolvent and nothing could be realised from him.
(iii) Create a provision of 5% for Doubtful Debts.
(iv) 50% of the Investments were taken over by the old partners in their profit sharing ratio. Remaining
Investments were valued at ` 35,000.
(v) Claim on Workmen Compensation was established at ` 16,000.
(vi) One month salary of ` 16,000 was outstanding.
(vii) Teena is to contribute ` 1,20,000 as capital.
(viii) Capital accounts of the partners are to be re-adjusted on the basis
of their profit sharing arrangement and any excess or deficiency is to be transferred to their Current
Account.
o

Anjali, Sneha and Radha are partners sharing profits and losses in the ratio of 5:3:2. Their Balance Sheet as
on 31st March, 2019 stood as under:

Creditors 20,000 Cash in hand 22,000
General Reserve 22,000 Less : Provision for doubtful debts (3,000) 22,000
Captial A/c: Stock 18,000
Anjali 70,000 Investments 30,000
Sneha 50,000 Furniture 20,000
Radha 40,000 Machinery 70,000
Goodwill 30,000
2,12,000 2,12,000
On the above date Sneha retired and the terms of retirement were:
(i) Sneha sells her share of goodwill to Anjali for ` 4,000 and to Radha ` 2,000.
(ii) Stock to be appreciated by 20%.
(iii) Provision for doubtful debts to be increased by 525.
(iv) There is a liability for workmen’s compensation for ` 1,500 and it was to be provided for.
(v) Investments were sold at a loss of 10%.
(vi) Provision for a bill under discount of ` 2,000 was to be made.
(vii) The continuing partners agreed to pay ` 20,000 in cash on retirement to Sneha to be contributed in
their new profit sharing ratio. The balance to be treated as Loan.
(viii) The total capital of the new firm is decided to be ` 1,50,000. Necessary adjustments to be made by
opening Current Accounts.
Prepare Revaluation A/c, Partners’ Capital Accounts and Balance Sheet of the new firm after Sneha’s
retirement.
25. Ronak, Arpit and Madhav are partners in a firm with capital contributions of ` 50,000, ` 40,000 and ` 30,000
respectively. Their partnership agreement provides for the following:
(i) Interest on capitals to be allowed @10% p.a.
(ii) Interest on drawings to be charged @10% p.a.
(iii) Arpit and Madhav are each to be paid salaries @ ` 500 per month.
(iv) Ronak is to be paid a commission of 5% of the net profit.
(v) The remaining profits are to be divided as follows:
40% to Ronak, 30% to Arpit, 20% to Madhav and 10% carried to a Reserve Account. The net profit for the
year ended 31.03.2022 was ` 50,000. Ronak withdrew ` 1,000 per month at the beginning of each month.
Arpit withdrew ` 1,000 per month in the middle of each month and Madhav withdrew ` 1,000 per month at
the end of each month. You are required to prepare the Profit & Loss Appropriation Account for the year
ended 31.03.2022 only.
26. On 1st April, 2021, Wadia Industries Limited issued 40,000, 8% Debentures of ` 50 each at a discount of 6%
redeemable at par after 4 year. The issue was fully subscribed. According to the term of issue, interest on
the debentures is payable yearly on 31st March.
The company has a balance of ` 80,000 in Securities Premium Reserve Account.
On the basis of the above information, answer the following questions:
I. What entry is passed for interest due on Debentures for the year ending 31st March 2022?
(a) Dr. Debentureholders’ A/c; Cr. Debenture Interest ` 1,60,000
(b) Dr. Debenture Interest A/c; Cr. Debentureholders’ A/c ` 1,60,000
(c) Dr. Debenture Interest A/c; Cr. Debenture A/c ` 1,60,000
(d) Dr. Debenture A/c; Cr. Debentureholders’ A/c ` 1,60,000
II. The entry passed for payment of interest on Debentures is:
(a) Dr. Debentureholders’ A/c; Cr. Debenture A/c ` 1,60,000
(b) Dr. Debenture A/c; Cr. Bank A/c ` 1,60,000
(c) Dr. Debentureholders’ A/c; Cr. Debenture Interest A/c ` 1,60,000
(d) Dr. Debentureholders’ A/c; Cr. Bank A/c ` 1,60,000

III. What entry is passed for transferring debentures interest?

(a) Dr. Securities Premium Reserve A/c; Cr. Debenture Interest A/c ` 1,60,000
(b) Dr. Statement of Profit and Loss; Cr. Debenture Interest A/c ` 1,60,000
(c) Dr. Debenture Interest A/c; Cr. Statement of Profit and Loss ` 1,60,000
(d) Dr. Profit and Loss Appropriation A/c; Cr. Debenture Interest A/c ` 1,60,000
IV. While preparing Discount on issue of Debenture A/c _______ amount will be debited.
(a) ` 40,000 (b) ` 2,40,000
(c) ` 80,000 (d) ` 1,20,000
V. To write off discount on issue of debentures through Securities Premium Reserve A/c, following entry
is passed.
(a) Dr. Statement of Profit and Loss; Cr. Discount on Issue of Debenture A/c
(b) Dr. Securities Premium Reserve A/c; Cr. Discount on Issue of Debenture A/c
(c) Dr. Discount on Issue of Debenture A/c; Cr. Securities Premium Reserve A/c
(d) Dr. Discount on Issue of Debenture A/c; Cr. Statement of Profit and Loss
VI. The remaining amount of Discount on Issue of Debentures (`40,000) will be written off through
______.
(a) Debenture Redemption Reserve A/c (b) Statement of Profit and Loss
(c) Capital Reserve (d) Profit on Sale of fixed Assets
PART—B
27. Non-cash transactions are ignored while preparing a cash flow statement because
(a) cash is not involved in non-cash transactions
(b) it shows flow of cash and cash equivalents
(c) Both (a) and (b)
o
Provision for tax is______to net profit in operating activities.
(a) deducted (b) added
(c) no treatment (d) None of these
28. Match the following activities of a manufacturing concern as under cash flow statement:
(i) Purchase of software (1) Operating Activities

(ii) Payment of interest on debentures (2) Financing Activities
(iii) Purchase of stock-in-trade (3) Investing Activities
(a) (i)-3, (ii)-4, (iii)-2 (b) (i)-3, (ii)-2, (iii)-1
(c) (i)-2, (ii)-3, (iii)-1 (d) (i)-1, (ii)-2, (iii)-3
29. Which of the following transactions will improve the quick ratio?
(a) Cash collected from debtors ` 15,000
(b) Sale of goods (costing ` 10,000) for ` 30,000
(c) Purchase of inventory for cash amounted to ` 20,000
o
Calculate revenue from operations, if sales are ` 1,04,00,000; sales return is ` 4,00,000; sale of scrap for `
50,000; dividend received ` 20,000 and interest on fixed deposit amounted to ` 60,000.
(a) ` 1,00,80,000 (b) ` 1,00,50,000
(c) ` 1,00,00,000 (d) ` 1,01,30,000

30. A company reported the following information for the past year
Net profit ` 22,00,000
Depreciation expenses ` 30,000
Gain on sale of truck ` 5,000
Proceeds from sale of truck ` 8,000
Decrease in accounts receivable ` 10,000
What amount will the company report as the cash provided by operating activities in the cash flow statement?
(a) ` 2,30,000 (b) ` 2,20,000
(c) ` 2,35,000 (d) ` 2,25,000
31. Under which major headings and subheadings will the following items be shown in the Balance Sheet of a
company as per Schedule III Part I of the Companies Act 2013?
(a) Capital Reserve (b) Calls-in-arrears
(c) Accrued incomes (d) Calls-in-advance
(e) Trade Marks (f) Provision for Tax
32. (a) Distinguish between Intra-firm Analysis and Inter-firm Analysis.

(b) From the following information, determine opening inventory and closing inventory:
Inventory Turnover Ratio = 5 times
Revenue from operations = ` 29,25,000
Gross Profit on cost = 30%
Closing Stock = ` 40,000 more than the opening inventory
o
(a) Bright International Limited has Current Liabilities of ` 90,000. After purchasing stock-in-trade of `
10,000 on credit, its current ratio become 2 : 1. Determine the size of current assets and working capital
after and before the acquisition of inventories.
(b) Interpret a too high Trade Receivable Turnover ratio.
o
(`)
Purchases 40,000
Depreciation 2,000
34. From the following Balance Sheet of Dhanuka Industries Limited as at 31.03.2022 and 31.03.2021, prepare
a Cash Flow Statement.

No. (`) (`)
(a) Share Capital 6,50,000 5,00,000
(b) Reserves and Surplus 1 1,70,000 80,000

2. Non-Current Liabilities:
(a) Long-term Borrowing 2 4,50,000 3,00,000
(a) Trade Payables 1,00,000 1,20,000
(b) Short-term Provisions 3 2,20,000 1,80,000
Total 15,90,000 11,80,000
II. ASSETS
1. Non-current Assets:
(i) Property, Plant and Equipments: Tangible Assets 5,45,000 3,75,000
(ii) Intangible Assets: Patents 2,20,000 1,80,000
2. Non-current Investments 5,00,000 4,00,000
3. Current Assets:
(a) Current Investments 30,000 60,000
(b) Trade Receivables 60,000 40,000
(c) Inventories 65,000 25,000
(d) Cash & Cash Equivalents 1,70,000 1,00,000
Total 15,90,000 11,80,000
Notes to Accounts:
Particulars 31st March 2022 (`) 31st March 2021 (`)

1. Reserves and Surplus:
Surplus in Statement of Profit and Loss 1,70,000 80,000
1,70,000 80,000
2. Long-term Borrowings:
6% Debentures 4,50,000 3,00,000
4,50,000 3,00,000
3. Short-term Provisions:
Provision for Tax 2,20,000 1,80,000
2,20,000 1,80,000
Additional Information:
(a) During the year, equipment costing ` 5,00,000 was purchased. Loss on sale of equipment amounted to `
60,000. Depreciation charged on them was ` 90,000.
(b) Patents purchased during the year for ` 90,000.
(c) Proposed Dividend as on 31st March 2021 and 2022 amounted to ` 26,000 and ` 30,000 respectively.
******

Sample Paper 6
Accountancy
6.Questions 17 to 20, 31and 32 carries 3 marks each.
Part A
(Accounting for Partnership Firm and Companies)
1. Which of the following shares confer voting rights on its holders ?

(a) Redeemable preference (b) Participatory preference
(c) Equity (d) None of these
2. Krish, Laksh and Jay are partners with capitals’ ` 1,00,000, ` 75,000 and ` 50,000 respectively. On Jay’s
retirement, his share is acquired by Krish and Laksh in ratio of 5 : 3. Gaining ratio will be
(a) 2 : 2 (b) 5 : 3
(c) 3 : 2 (d) None of these
3. Which of the following is not correct in relation to right of a partner?

(i) Right to inspect the books of the firm
(ii) Right to take part in the affairs of the company
(iii) Right to share the profits/losses of the firm
(iv) Right to receive salary at the end of each month
(a) Only (iv) (b) Only (i)
(c) (i) and (ii) (d) (i) and (iv)
4. Interest allowed by the company on the amount of calls-in-advance is_______.

(a) 6% p.a. (b) 8% p.a.
(c) 15% p.a. (d) 12% p.a.
5. Assertion (A): A charitable dispensary run by 10 members is deemed to be a partnership firm.

Reason (R): For a partnership business, there must be a business and there must be sharing of profits
among the partners from such business.
Alternatives
(A)
Assertion (A)

6. At the time of retirement of Kamlesh, value of stock is given ` 60,000 in the balance sheet of the firm. Pass
a journal entry when found stock is undervalued by ` 15,000.
(a) Stock A/c Dr 45,000
(b) Revaluation A/c Dr 45,000
To Stock A/c 45,000
(c) Revaluation A/c Dr 15,000
To Stock A/c 15,000
(d) Stock A/c Dr 15,000
7. Naksh and Daksh are partners in a firm sharing profits in the ratio of 3 : 2. An extract of their Balance
Sheet is as follows

(`) (`)
Investments 40,000
If half of the investments are taken over by Naksh and Daksh in their profit sharing ratio at book value,
what amount of investments will be shown in revised balance sheet?
(a) ` 10,000 (b) ` 80,000
(c) ` 40,000 (d) ` 20,000
8. Kiya RO Water Limited is registered with a capital of 1,00,000 equity shares of ` 10 each. 60,000 equity
shares were offered for subscription to public. Applications were received for 60,000 shares. All calls were
made and amount was duly received except final call of ` 2 on 8,000 shares.
What will be the amount of share capital shown in the balance sheet?
(a) ` 58,400 (b) ` 60,000
(c) ` 6,00,000 (d) ` 5,84,000
o
Future Group Limited has in its Memorandum of Association, capital clause stating that it is formed
with 7,500 equity shares of ` 100 each. The company has issued the entire shares and the public has also
subscribed and paid up for the full amount on application itself. What will be the subscribed capital?
(a) ` 10,000 (b) ` 75,000
(c) ` 7,50,000 (d) ` 1,00,000
9. Joya, Liya and Tiya are partners sharing profits equally. Joya drew regularly ` 2,000 in the beginning of
every month for the six months ended 30th September, 2020. Calculate interest on Joya’s drawings @ 5%
p.a.
(a) ` 175 (b) ` 350
(c) ` 100 (d) ` 600
o
Neeraj, Dheeraj and Sourabh are partners sharing profits in the ratio of 5 : 3 : 2. They have admitted Nitin
into the partnership for 1/6th share. Investment Fluctuation Fund appears in the balance at ` 13,500 and
Investment (cost) at ` 1,50,000 . If the market value of investments is ` 1,45,000.
Investment Fluctuation Fund will be shown at______.
(a) ` 5,000 (b) ` 6,500
(c) ` 13,500 (d) ` 10,000
10. Ishan is a partner of Jiyan firm with a fixed capital of ` 9,00,000. He withdrew ` 60,000 during financial
year 2021-22. What will be the journal entry?
(a) Drawings A/c Dr 60,000
To Ishan’s Capital A/c 60,000
(b) Ishan’s Current A/c Dr 60,000

(c) Ishan’s Capital A/c Dr 60,000

(d) Drawings A/c Dr 60,000
To Ishan’s Current A/c 60,000
11. Somani Wheels Limited called first call money of ` 3.per share on its 50,000 shares. A shareholder holding
2,750 shares failed to pay the amount. How much amount will be due on first call?
(a) ` 1,50,000 (b) ` 1,47,750
(c) ` 1,41,750 (d) ` 1,57,000
o
The following journal entry is appeared in Neelkamal Private Limited.
Bank A/c Dr 2,00,000
Loss on Issue of Debentures A/c Dr 1,00,000
To 12% Debentures 2,50,000
To Premium on Redemption 50,000
Debentures are issued at a discount of
(a) 15% (b) 20%
(c) 5% (d) 10%
12. Tarun and Arun are partners sharing profits in the ratio of 10 : 2. Ankit is admitted and the new profit
sharing ratio is now 10 : 6 : 4. At the date of admission, general reserve appears in the books at ` 48,000.
Arun’s share in the reserve will be
(a) ` 40,000 (b) ` 14,400
o
If a partner withdraws equal amount at the end of each quarter, then_____months are to be considered
for interest on total drawings.
(a) 4.5 (b) 7.5
(c) 5.5 (d) 6
13. Rudra, Sachin and Sahil are partners in a firm sharing profits in the ratio of 5 : 3 : 2. As per partnership
deed, Sahil is to get a minimum amount of ` 1,000 as profit. Net profit for the year is ` 4,000. Calculate
deficiency (if any) to Sahil.
(a) ` 200 (b) ` 150
(c) ` 75 (d) None of these
o
Shaan and Sajan are partners sharing profits in the ratio of 5 : 1. Riyan is admitted and the new profit
sharing ratio is now 5 : 3 : 2. Upon admission, general reserve appears in the books at ` 48,000. Sajan’s
share in the reserve will be_______.
(a) ` 40,000 (b) ` 14,400
14. Hindustan Industries Limited purchased the assets from Bharat Electronics Limited for ` 16,20,000.
Hindustan Industries Limited issued 10% debentures of ` 10 each at 10% discount against the payment.
The number of debentures issued by Hindustan Industries Limited will be
(a) 1,80,000 (b) 1,62,000
(c) 16,200 (d) 18,000
Divya, Aanya and Jaya are partners in a firm sharing profits and losses in the ratio of 4 : 3 : 1. As per the
terms of partnership deed, on the death of any partner, goodwill was to be valued at 50% of the net profits
credited to that partner’s capital account during the last three completed years before her death. Divya
died on 28th February, 2022.

The profits for the last five years were 2017 – ` 60,000, 2018 – ` 97,000, 2019 – ` 1,05,000, 2020 – ` 30,000
and 2021 – ` 84,000.
On the date of Divya’s death, building was found undervalued by ` 80,000, which was to be considered.
Calculate amount of Divya’s share of goodwill in the firm and complete the following journal entries. The
new profit sharing ratio between Aanya and Jaya will be equal.
Journal

Building A/c Dr. ........
To Revaluation A/c ........
(Being the increase in value of building brought into account)
Revaluation A/c Dr. ........
To Divya’s Capital A/c ........
To Aanya’s Capital A/c ........
To Jaya’s Capital A/c ........
(Being the transfer of profit on revaluation to partners’
capital account in their old profit sharing ratio)
Aanya’s Capital A/c Dr.
Jaya’s Capital A/c Dr. ........
To Divya’s Capital A/c ........
(Being Divya’s share of goodwill adjusted in the capital
accounts of gaining partners in their gaining ratio. i.e. 1 : 3)
15. Jaya’s share in revaluation profit/loss will be________.

(a) ` 30,000 (b) ` 10,000
(c) ` 40,000 (d) Nil
16. Divya’s share of goodwill will be_______.

(a) ` 54,750 (b) ` 41,062
(c) ` 13,688 (d) Nil
17. Shree Paper Industries Limited issued 5,000 shares of ` 10 each credited as fully paid to the promoters
for their services and issued 4,000 shares of ` 10 each credited as fully paid to the underwriters for their
underwriting services. Journalise these transactions.
o
Monark Enterprises Limited issued 2,000, 10% debentures of ` 100 each, at a premium of ` 10 per debenture
payable as follows: On application ` 50 ; on allotment ` 60. The debentures were fully subscribed and all
money was duly received. Record the journal entries in the books of company.
18. Camila, Sophia and Ella are partners sharing profits and losses in the ratio of 5 : 3 : 2 respectively. On 31st
March, 2021 their balance sheet was as under
Balance Sheet
Sundry Creditors 1,10,000 Goodwill 50,000
Reserve Fund 60,000 Buildings 2,00,000
Capital A/cs Patents 60,000

Camila 3,00,000 Machinery 3,00,000

Sophia 2,50,000 Stock 1,00,000
Ella 1,50,000 7,00,000 Debtors 80,000
Cash 80,000
8,70,000 8,70,000
Ella retires on the above date. Goodwill of the firm valued at ` 2,50,000.
Record the necessary journal entries on Ella’s retirement, assuming that goodwill is to be adjusted through
partner’s capital accounts.
o
Dhavan and Bhuvan were partners sharing profits in 3 : 2 ratio. Their balance sheet on 31st March, 2021
was as follows
Balance Sheet
Capital A/cs Cash 7,500
Dhavan 1,37,500 Sundry Debtors 30,000
Bhuvan 75,000 2,12,500 Stock 50,000
Creditors 37,500 Land and Building 1,00,000
Plant and Machinery 62,500
2,50,000 2,50,000
They admitted Tarun as partner on the following terms
(i) Tarun is to bring ` 62,500 as capital.
(ii) They will share future profits in 2 : 2 : 1 ratio.
(iii) Assets and liabilities are revalued as
Land and building at ` 1,25,000, depreciate plant and machinery @10% per annum, provision for doubtful
debts ` 2,500, stock at ` 45,000, ` 2,500 be reserved for bills discounted.
Show memorandum revaluation account.
19. Sunil, Aadil and Mona are partners having fixed capitals of ` 2,00,000, ` 1,60,000 and ` 1,20,000 respectively.
They share profits in the ratio of 3 : 1 : 1. The partnership deed provided for the following which were not
recorded in the books.
(i) Interest on capital @ 5% per annum.
(ii) Salary to Sunil ` 1,500 per month and to Mona ` 1,000 per month.
(iii) Transfer of profit to general reserve ` 10,000. Net profit for the year ended 31st March, 2022 was `
1,00,000.
Pass necessary rectifying entry for the above adjustments in the books of the firm. Also show your workings
clearly.
20. Rajesh and Dinesh are two partners in a firm sharing profit and losses in the ratio of 3 : 2. At the time
of distributing the net profit between the partners, interest on capital was credited @18% instead of 8%
wrongly. Now, pass an adjusting journal entry to correct this error. Partners’ capitals are given on 1st April,
2021 as ` 5,00,000 and ` 3,00,000 respectively. Profit on 31st March, 2022 is ` 2,00,000.
21. Hindustan Motor Limited issued 10,000 equity shares of ` 10 each payable at ` 2.50 on application, ` 3 on
allotment, ` 2 on first call and the balance of ` 2.50 on the final call. All the shares were fully subscribed
and paid except of a shareholder having 100 shares who could not pay for the final call. Give journal entries
to record these transactions.
22. Lavina, Taniya and Soniya were partners in a firm sharing profits and losses in the ratio of 3 : 1 : 1. On 1st
April, 2022, their balance sheet stood as under

Balance Sheet
as at 1st April, 2022
(`) (`)
General Reserve 25,000 Land and Building 1,50,000
Profit and Loss A/c 35,000 Machinery 50,000
Machinery Replacement Fund 17,000 Machinery Replacement Fund 17,000
Investments
Investments Fluctuation Reserve 20,000 Furniture 10,000
Workmen’s Compensation Reserve 23,000 Investments (Market value ` 28,000) 30,000
Employees’s Provident Fund 30,000 Current Assets 1,18,000
Creditors 1,00,000 Advertisement Expenditure 25,000
(Deferred revenue)
Capital A/cs
Lavina 1,00,000
Taniya 30,000
Soniya 20,000 1,50,000
4,00,000 4,00,000
They admitted Monika into partnership for 1/5th share of profits on the above date. A claim on account
of workmen’s compensation is estimated at ` 13,000 only. Give the necessary journal entries to adjust the
accumulated profits and losses.
23. Ruchi Enterprises Limited issued 5,000, 9% debentures of ` 100 each at par for cash which are redeemable
at 10% premium and also raised a loan of ` 80,000 from America Bank, for which the company placed with
the bank ` 1,00,000, 9% debentures as collateral security.
As per the terms, the bank is obliged and bound to immediately release the debentures, as soon as the
loan is repaid. How will you show the debentures in the balance sheet of the company assuming that the
company has recorded the issue of debentures as collateral in the books?
Also pass the journal entries.
24. Tilak, Yogesh and Rahim were equal partners. Their balance sheet as at 31st March, 2021 was
Balance Sheet
(`) (`)
Bills Payable 10,000 Bank 10,000
Sundry Creditors 20,000 Stock 10,000
General Reserve 15,000 Furniture and Fixtures 14,000
Profit and Loss A/c 3,000 Sundry Debtors 22,500
Capital A/cs (–) Provison for Doubtful Debts (2,500) 20,000
Tilak 30,000 Buildings 60,000
Yogesh 20,000
Rahim 16,000 66,000
1,14,000 1,14,000
Yogesh retired on 1st April, 2021. Tilak and Rahim decided to continue the business as equal partners on
the following terms
(i) Goodwill of the firm was valued at ` 28,800.
(ii) The provision for bad and doubtful debts to be maintained @ 10% on debtors.
(iii) Buildings to be increased to ` 66,000.
(iv) Furniture and fixtures to be reduced by ` 4,000.
(v) Rent outstanding (not provided for as yet) was ` 750.
The partners decided to bring in sufficient cash in the business to pay-off Yogesh. For this purpose, Tilak
brought ` 12,250 and Rahim ` 26,250.
Prepare the necessary ledger accounts and the balance sheet.
o
Rashmi and Vinod are partners dealing in manufacturing plastic polythenes, with profit sharing ratio of
2 : 1. Their balance sheet as at 31st March, 2020 was as under, when the government banned the plastic
polythene and therefore, they shifted to manufacturing paper bags.
Balance Sheet
(`) (`)
Bills Payable 60,000 Cash in Hand 20,000
Sundry Creditors 60,000 Cash at Bank 80,000
Salaries Outstanding 10,000 Sundry Debtors 40,000
Profit and Loss 30,000 Stock 60,000
Capital A/cs Machinery 1,70,000
Rashmi 1,50,000 Goodwill 90,000
Vinod 1,50,000 3,00,000
4,60,000 4,60,000
They admitted Aakash into partnership on 1st April, 2020. The new profit sharing ratio is agreed as 2 : 1
: 1. Other terms of Aakash’s admission were as under
(i) He will bring in ` 1,20,000, through cheque, as his share of capital and ` 30,000 as his share of
goodwill.
(ii) Machinery is to be appreciated by 10%.
(iii) Stock overvalued by ` 2,000.
(iv) A provision for doubtful debts is to be created at 5% on debtors.
(v) Creditors are unrecorded to the extent of ` 7,000.
Prepare the revaluation account, partners’ capital accounts, bank account and the balance sheet of the new
firm after the admission.
25. Parag Solutions Limited offered for public subscription 10,000 shares of ` 10 each at ` 11 per share. Money
was payable as follows
` 3 on application, ` 4 on allotment (including premium), ` 4 on first and final call.
Applications were received for 12,000 shares and the directors made pro-rata allotment. Saumya, an
applicant for 120 shares, could not pay the allotment and call money and Divya, a holder of 200 shares,
failed to pay the call. All these shares were forfeited.
Out of the forfeited shares, 150 shares (the whole of Saumya shares being included) were issued at` 8 per
share. Record journal entries for the above transactions and prepare the share forfeiture account.
o
Max Technologies Limited invited application for 1,40,000 equity shares of ` 10 each payable as under
On application ` 2 On first call ` 3
On allotment ` 2 On final call ` 3
Applications were received for 2,10,000 shares and pro-rata allotment was made to all the applicants.
All the shareholders paid the amount due with the following exception
(i) Aalok, who was allotted 1,400 shares, failed to pay the allotment and calls.
(ii) Trilok, who was allotted 1,050 shares paid only application and allotment.
These shares were forfeited and subsequently 1,800 shares were reissued as fully paid at a discount of 20%.
Shares reissued include 1,000 shares of Aalok and 800 shares of Trilok.
Pass necessary journal entries.

26. Aarav and Sourav were partners from 1st April, 2017 with capitals of ` 1,20,000 and ` 80,000 respectively.
They shared profits in the ratio of 3 : 2. They carried on business for two years.
In the first year ended 31st March, 2018, they earned a profit of ` 1,00,000 but in the second year ended
31st March, 2019, a loss of ` 40,000 was incurred. As the business was no longer profitable, they dissolved
the firm on 31st March, 2019.
Their balance sheet is as follows
Balance Sheet
(`) (`)
Creditors 40,000 Sundry Assets 2,36,000
Capital A/cs
Aarav 1,24,000
Sourav 72,000 1,96,000
2,36,000 2,36,000
Sundry assets realised ` 2,00,000 and realisation expenses were ` 6,000.
You are required to prepare realisation account, partner’s capital account and cash account.
Part B
27. Which of the following is not an financing cash flow?

(a) Dividend paid on equity shares amounting to ` 24,000
(b) Purchase of investment for ` 40,000 cash
(c) Issue of debentures for ` 75,000 cash
(d) Both (a) and (b)
28. Which of the following is a non-operating income?

(a) Revenue from sale in a trading concern
(b) Profit on the sale of used plant in manufacturing company
(c) Dividend received by an investment company
(d) Premium received by an insurance company
o
Which of the following is highly liquid investment?
(a) Cash equivalent (b) Short-term investment
(c) Cash convertible investment (d) None of these
29. From the following information, you are required to calculate ‘cost of material consumed. Opening inventory
of materials ` 30,00,000; Opening stock-in-trade ` 8,00,000; Material purchased ` 1,00,00,000; Purchase
of stock-in trade ` 60,00,000; Closing inventory of material ` 10,00,000 and Closing inventory of stock `
6,00,000.
(a) ` 1,20,00,000 (b) ` 90,00,000
(c) ` 48,00,000 (d) None of these
o
Gross profit of a firm is ` 9,00,000 and revenue from operations ` 27,00,000. What will be the gross profit
ratio?
(a) 33.3% (b) 33%
(c) 34% (d) 38%

30.

Borrowings: 10% Debentures 6,00,000 Inventories 4,80,000
Trade Payables 9,36,000 Trade Receivables 3,60,000
Short-term Provisions 24,000 Cash and Cash Equivalents 91,200
50% of the debentures are repaid by issuing shares amounting to ` 3,00,000.
Based on the above information, the liquid ratio for the company will be______.
(a) 2 : 1 (b) 1 : 2
(c) 1 : 1 (d) 0.47 : 1
31. Current ratio of a company is 2 : 1 and quick ratio is 1 : 1. If value of inventory is ` 10,000 and prepaid
insurance is ` 5,000, then calculate the value of current assets, current liabilities and liquid assets.
32. Name any three items that can be disclosed under non-current investments.
33. Calculate value of opening stock and closing stock from the following information
Sales ` 5,00,000, Gross profit is 20% of net sales, Return inward is ` 20,000, Return outward is ` 50,000,
Purchases ` 2,50,000 and Opening stock is 2 times of the closing stock.
o
From the following information, calculate debt to capital employed ratio
Particulars Note No. Amount (`)

(i) Share Capital 4,00,000
Long Term Borrowing 1,50,000
3. Current Liabilities: 50,000
Total 7,00,000
II. ASSETS
(i) Fixed Assets 4,00,000
(ii) Non-current Investments 1,00,000
2. Current Assets 2,00,000
Total 7,00,000
34. From the following, calculate the net cash flow from operating activities

No. (`) (`)
(i) Share Capital 1 1,87,500 1,87,500

(ii) Reserves and Surplus 2 77,500 (5,000)

(i) Short-term Borrowings 10,000 12,500
(ii) Trade Payables 30,000 27,500
(iii) Short-term Provisions 12,500 10,000
Total 3,82,500 2,70,000
II. ASSETS
1. Non-Current Assets:
(i) Tangible Fixed Assets (Net) 2,15,000 1,55,000
(ii) Intangible Assets 3,750 10,000
(iii) Non-current Investments 31,250 20,000
2. Current Assets
(i) Current Investments 1,250 3,750
(ii) Inventories 48,750 25,000
(iii) Trade Receivables 50,000 50,000
(iv) Cash and Cash Equivalents 32,500 6,250
Total 3,82,500 2,70,000
Notes to Accounts:
Particulars 2021 (`) 2020 (`)

1. Share Capital
5% Preference Share Capital 50,000 75,000
1,87,500 1,87,500
Statement of Profit and Loss 37,500 (35,000)
Securities Premium Reserve 2,500 ––
77,500 (5,000)
3. Short-term Borrowings
8% Bank Loan 10,000 12,500
4. Short-term Provisions
5. Intangible Assets
Goodwill 3,750 10,000
During the year, a piece of machinery costing ` 15,000 on which depreciation charged was ` 5,000 was sold
for ` 5,000. Depreciation provided on fixed assets ` 15,000. Dividend on equity shares @ 8% was paid on
opening balance.
Income tax ` 11,250 was provided. Additional debentures were issued at par on 1st October, 2019 and bank
loan was repaid on the same date. At the end of the year, preference shares were redeemed at a premium
of 5%.
******

Sample Paper 7
Accountancy
PART—A
1. A Debenture of ` 100 each, issued at ` 40 premium, to be redeemed at half of the premium received on
issue, out of which ` 70 (including ` 10 premium) was called up and paid up. The uncalled Capital will
be_______.
(a) ` 40
(b) ` 30
(c) ` 80
(d) ` 20
o
_______can be issued at discount but______cannot be issued at discount except Sweat Equity
Shares.
(a) Loan, Shares
(b) Debentures, Shares
(c) Debentures, Bonds
(d) Shares, Debentures
2. Asha and Nisha are partner’s sharing profits in the ratio of 2:1. Kashish was admitted for 1/4 share of which
1/8 was gifted by Asha. The remaining was contributed by Nisha.
Goodwill of the firm is valued at ` 40,000. How much amount for goodwill will be credited to Nisha’s Capital
account?
(a) ` 20,000
(b) ` 2,500
(c) ` 40,000
(d) ` 5,000
o
On reconstitution of a firm, any deferred revenue expenditure appearing in the Balance Sheet is:
(a) Realised in Cash (b) Debited to Revaluation A/c
(c) Debited to Partners’ Capital A/cs in old ratio (d) Credited to Partners’ Capital A/cs in new ratio
3. At the time of admission of Sunder, a new partner, Land appearing in the book at ` 2,70,000 which was
found undervalued by 10%. Entry will be:
(a) Dr. Revaluation A/c and Cr. Land A/c by ` 27,000
(b) Dr. Land A/c and Cr. Revaluation A/c by ` 30,000
(c) Dr. Revaluation A/c and Cr. Land A/c by ` 30,000
(d) Dr. Land A/c and Cr. Revaluation A/c by ` 27,000
4. Out of the following which one is not a mode of Dissolution by order of Court:
(a) A partner is found guilty of misconduct.
(b) A partner becomes a person of unsound mind.
(c) When business of the firm becomes unlawful.
(d) The business of firm cannot be carried on except at a loss.
5. ABN India Private Limited decided to issue 50,000 Equity shares. It gave its directors and employees right
to buy 10,000 of the above shares. The type of issue is:
(a) Private Placement
(b) Rights Issue
(c) Public Issue
(d) ESOP
6. Rajesh and Ramesh are sharing profit and losses in the ratio 4:3. They agreed to share profits in the ratio
3:2 in future. Which statement is correct in this regard?
(a) A gained 2/35th share and B sacrificed 2/35th share of profit.
(b) A sacrificed 1/35th share and B gained 1/35th share of profit.
(c) A and B sacrificed 1/35th of their share of profit.
(d) A gained 1/35th share and B sacrificed 1/35th share of profit.
7. Newskart Information Limited issued 40,000, 10% Debentures of ` 100 each at certain rate of discount and
were to be redeemed at Par. Securities Premium of ` 1,50,000 and Current year profit of ` 50,000 were used
to write off Discount on Issue of Debentures. What is the rate of issue per debenture ?
(a) 95% (b) 5%
(c) 6% (d) 10%
o
Ecom Logistics Limited issued 40,000, 11% Debentures of ` 100 each at 10% premium and to be redeemed
at a certain rate of premium. At the time of writing off Loss on Issue of Debentures, Statement of Profit and
Loss was debited with ` 2,00,000. At what rate of premium, these debentures are redeemed?
(a) 5% (b) 15%
(c) 11% (d) 10%
8. Assertion (A): When a new partner is admitted, partnership firm remains continuous. The old partnership
comes to an end and a new partnership agreement comes into existence.
Reason (R): At the time of admission of a partner, the partnership firm dissolves.
(a) Both (A) and (R) are incorrect.
(b) (A) is correct but (R) is wrong.
(c) Both (A) and (R) are correct, and (R) is the correct explanation of (A).
(d) Both (A) and (R) are correct, but (R) is not the correct explanation of (A).
9. A, B and C are partners sharing profits in the ratio 5:3:2. As per the new agreement, A agreed to give 1/2
of his share to B and C in the ratio 3:2. The new profit sharing ratio will be:
(a) 6 : 3 : 3
(b) 5 : 9 : 6
(c) 3 : 2 : 1
(d) None of these
o
Anita and Aliya are partners in a firm. They admit Anandi as a new partner for 1/4th share. They have
a General Reserve of ` 20,000 which they want to continue in the books. The journal entry on Anandi’s
admission will be:

(a) Anandi’s Capital A/c Dr. 5,000

To Anita’s Capital A/c 2,500
To Aliya’s Capital A/c 2,500
(b) Anita’s Capital A/c Dr. 2,500
Aliya’s Capital A/c Dr. 2,500
To Anandi’s Capital A/c 5,000
(c) General Reserve A/c Dr. 20,000
(d) General Reserve A/c Dr. 20,000
To Anandi’s Capital A/c 5,000
10. Harish and Ritesh are equal partners in a firm with capitals of ` 3,00,000 and ` 2,00,000 respectively. As
per the deed, interest on capital @ 10% p.a. is allowed to the partners. During the year firm earned a profit
of ` 25,000.
The profit will be appropriated to the partners as:
(a) ` 30,000 and ` 20,000
(b) ` 15,000, and ` 10,000
(c) ` 12,500 each
(d) None of these
o
Which of the following is distributed among partners on reconstitution of partnership firm?
(a) Taxation Reserve
(b) Provident fund
(c) Provision for doubtful debts
(d) Employees
11. A and B are partners in a firm. The net divisible profit as per Profit and Loss Appropriation A/c is `
2,50,000. The total interest on partner’s drawings were ` 4,000. A is entitled to a salary of ` 4,000 per quarter
and B ` 40,000 per annum. The net profit/loss earned during the year as:
(a) ` 2,10,000
(b) ` 2,90,000
(c) ` 3,08,000
(d) ` 3,02,000
12. Raman, Tapan and Naman are partners in a firm with profit sharing ratio 3 : 2 : 1 respectively. The extract

At the time of retirement of Naman, if liability for workmen compensation to the extent of ` 24,000 is to be
created, then at what amount will workmen compensation reserve be shown in new balance sheet?
(a) ` 56,000 (b) ` 24,000
(c) ` 52,000 (d) Not to be shown in new balance sheet
o
Mukesh and Rakesh are partners in a firm sharing profits and losses in the ratio of 5 : 1.

An Extract of Balance Sheet

Machinery 4,000
If value of machinery in the balance sheet is undervalued by 20%, then at what value will machinery be
shown in new balance sheet?
(a) ` 3,200
(b) ` 5,000
(c) ` 4,400
(d) ` 4,800
13. Out of 8,000 shares of ` 10 each issued by X Ltd. to public, a holder of 300 shares did not pay the allotment
money @ ` 5 each and another shareholder of 800 shares did not pay first and final call money of ` 2 each.
The company forfeited shares of both these shareholders. The amount to be credited to share forfeiture is:
(a) ` 7,300
(b) ` 6,300
(c) ` 7,200
(d) ` 5,800
14. Paper and Pen are partners. Paper draws a fixed amount at the beginning of every month. Interest on
drawings is charged @6 % p.a. At the end of the year 31 March 2022 interest on Paper’s drawings amounts
to ` 1,560. Monthly drawings of Paper were:
(a) ` 7,000
(b) ` 4,000
(c) ` 8,000
(d) ` 60,000
o
Vishu, a partner withdrew ` 4,000 at the end of each quarter and interest on drawings was calculated as `
360 at the end of accounting year 31 March 2022. What is the rate of interest on drawings charged?
(a) 10% p.a.
(b) 12% p.a.
(c) 6% p.a.
(d) 8% p.a.
Amex Export Limited was incorporated on 1st April, 2020 with registered office in Jaipur. The capital clause
of memorandum of association reflected a registered capital of ` 2,00,000 equity shares of ` 10 each and
25,000 preference shares of ` 50 each.
Since some large investments were required for building and machinery, the company in consultation with
vendors, M/s Sultan International Limited issued 25,000 equity shares and 5,000 preference shares at par to
them in full consideration of assets acquired. Besides this the company issued 50,000 equity shares for cash
at par payable as 3 on application, ` 2 on allotment, ` 3 on first call and ` 2 on second call.
Till date, second call has not yet been made and all the shareholders have paid except Rishant who did
not pay allotment and calls on his 75 shares and Sonu who did not pay first call on his 50 shares. Shares of
Rishant were then forfeited and out of them 25 shares were reissued at ` 12 per share.
15. How many equity shares of the company have been subscribed?
(a) ` 71,475 (b) ` 74,950
16. The amount of security premium reflected in the balance sheet at the end of the year will be_______.
(a) ` 100

(b) ` 250
(c) ` 50
(d) ` 150
17. Kiyansh, Ansh and Sriansh are partners in a firm. On 1st April, 2021 the balance in their capital accounts
stood at ` 6,00,000, ` 5,00,000 and ` 4,00,000 respectively. They shared profits in proportion of 4:2:3.
Partners are entitled to interest on capital at 7% p.a. and salary to Ansh and Sriansh at ` 10,000 per
quarter and ` 2,000 per month respectively as per the provisions of the partnership deed. Ansh’s share of
profit excluding interest on capital and salary, is guaranteed at not less than ` 30,000 p.a. Sriansh’s share
of profit including interest on capital but excluding salary is guaranteed at a minimum of ` 60,000 p.a. Any
deficiency arising on that account shall be met by Kiyansh. The profits of the firm for the year ended 31st
March, 2022 amounted to ` 2,59,000.
Prepare Profit and Loss Appropriation Account for the year ended 31st March, 2022.
18. The Balance Sheet of Farha and Safia who were sharing profits and losses in the ratio of 3:2 as at 31st
March, 2022 was:

Sundry Creditors 1,00,000 Cash at Bank 10,000
Profit and Loss A/c 85,000 Debtors 50,000
Farha’s Capital A/c 48,000 Stock 70,000
Safia’s Capital A/c 32,000 Furniture 20,000
Plant and Machinery 1,00,000
Advertisement Suspense 15,000
2,65,000 2,65,000
They admit Razia as a partner from 1st April, 2022 with 1/5th share in the profits of the firm. Razia brings
in ` 50,000 as her capital. Calculate the amount of goodwill and pass necessary journal entries on admission
of new partner.
o
Banny and Daniel are partners in a firm sharing profits in the ratio of 2:1. Their capitals were ` 4,40,000
and ` 2,20,000 respectively. On 1st April, 2021 they admit Zubin as a new partner. The new profit sharing
ratio of Banny, Daniel and Zubin is decided to be 4:2:1. Zubin brings ` 1,20,000 as his capital and ` 60,000
for his share of goodwill. Partners are allowed interest on capitals @ 10% p.a. and are charged interest on
drawings @ 12% p.a. Profits for the year ending 31st March, 2022 before allowing or charging interest was
` 2,40,000. The drawings of the partners were Banny ` 5,000 per month in the beginning of each month,
Daniel ` 15,000 at the end of each quarter and Zubin ` 60,000. Prepare Partners’ Capital accounts for the
year ending 31st March, 2022.
19. Jaswant Enterprises Limited took over assets of ` 7,00,000 and liabilities of ` 2,00,000 from Nexon Private
Limited for a purchase consideration of ` 4,59,500. ` 8,500 were paid through a bank draft of three months
and balance by the issue of equity shares of ` 10 each at a premium of 10%.
Pass necessary journal entries for the above transaction.
o
Flip Photo India Private Limited issued 7,500 11% Debentures of ` 100 each at a premium of 50%. The whole
of the amount was payable on application. Applications for 20,000 Debentures were received. Applications
for 5,000 Debentures were rejected and Debentures were alloted to the remaining applicants on prorata basis.
Pass necessary journal entries for the above transactions.
20. Samson and Ted are partners in a firm sharing profits in the ratio of 3:1. On 1.4.2022 they admitted Patrick
into partnership for 1/4th share in the profits of the firm. Patrick brought his share of goodwill (premium)

in cash. Goodwill of the firm was valued on the basis of 2 years purchase of last three years average profits.
The profits of last three years were:
2019-20 ` 90,000
2020-21 ` 1,30,000
2021-22 ` 86,000
During the year 2021-22 there was a loss of ` 20,000 due to fire which was not accounted for while calculating
the profit.
Calculate the value of goodwill and pass the necessary journal entries for the treatment of goodwill.
21. Complete the following journal entries for issue of Debentures in the following cases:

(a) Bank A/c Dr. ...(1)...
To Debenture Application and Allotment A/c ...(2)...
(Being money received on 200, 7% Debentures at ` 165 each
including ` 15 premium)
Debenture Application and Allotment A/c Dr. ...(3)...
.........................(4).......................A/c Dr. 10,000
To 7% Debenture A/c 30,000
To ....................(5).......................A/c ...(6)...
To Premium on Redemption of Debentures A/c 10,000
(Being issue of 200 Debentures of ` 150 each at a premium
of 10%, redeemable at a premium of ` 50)
(b) Bank A/c Dr. ...(7)...
To Debenture Application and Allotment A/c ...(8)...
(Being application and allotment money received on 900
debentures @ ` 95 each)
.........................(9).........................A/c Dr. ...(10)...
.........................(11).......................A/c Dr. ...(12)...
To 15% Debenture A/c ...(13)...
To Premium on Redemption of Debenture A/c 9,000
(Being issue of debentures at discount of 5%, redeemable at
premium of 10%)
22. Pass necessary journal entries for the following at the time of dissolution of partnership firm of Badri and
Balraj who are sharing profits and losses in the ratio of 3 : 2.
(a) Machinery costing ` 40,000 were taken over by Balraj at 10% less than the book value.
(b) There were unrecorded investment costing ` 30,000 which were taken over by creditors of ` 75,000 in
part payment, rest creditors were paid at 10% discount.
(c) Badri agreed to take ` 3,800 in full settlement of his loan of ` 4,000 given to the firm.
(d) Expenses of realisation ` 15,000 were paid by partner Balraj, of which ` 12,000 were borne by firm.
23. Mrinal Export Private Limited issued 10,000 equity shares of 100 each at a premium of 10 per share payable
as follows: ` 20 on application, ` 40 on allotment, ` 20 on first call and ` 30 on second and final call. 10,000
shares were applied for and allotted. All money due was received with the exception of both calls on 300
shares held by Emily. These shares were forfeited. Give necessary journal entries by opening Calls in Arrears
Account. Also state the minimum reissue price of forfeited shares.
o
Tanwar Private Limited issued 3,00,000 equity shares of ` 10 each at a premium of ` 2 per share, payable
as ` 3 on application, ` 5 on allotment (including premium) and the balance in two calls of equal amount.

Applications were received for 4,00,000 shares and pro-rata allotment was made to all the applicants. The
excess application money was adjusted towards allotment. Baldev who was allotted 800 shares failed to pay
both the calls and his shares were forfeited after the second call. Record necessary journal entries in the
books of Tanwar Private Limited by opening Calls in Arrears Account.
24. Robin, Tanish and Lakshit were partners sharing profits and losses in the ratio of 5:3:2. Their Balance Sheet
as on 31st March, 2022 was as under:

Capital Account : Plant and Machinery 30,000
Robin 30,000 Premises 20,000
Tanish 30,000 Investment 10,000
Lakshit 20,000 80,000 Goodwill 5,000
Contingency Reserve 8,000 Patent 6,000
Employee Provident Fund 4,000 Stock 13,000
Sundry Creditors 10,000 Sundary Debtors 6,000
Cash at Bank 10,000
Advertisement Suspense A/c 2,000
1,02,000 1,02,000
Lakshit died on 31-5-2022. The agreement between the executor of Lakshit and the partners stated that;
Goodwill of the firm was to be valued at 2 1 2 times of the average profits of last four years. The profits of
four years were: 2018-19 ` 13,000; 2019-20 ` 12,000, 2020-21 ` 16,000 and 2021-22 ` 15,000. The patents are
to be valued at ` 8,000, Machinery at ` 25,000 and Premises ` 25,000. The share of profit of Lakshit should
be calculated on the basis of the profit of last year.
Calculate Lakshit’s share of:
(a) profit for the period till the time of his death.
(b) goodwill.
(c) profit or loss on revaluation of assets and liabilities.
(d) accumulated profits and losses
Also pass necessary journal entries for the above settlement along with amount payable to Lakshit’s executor.
o
Lalit and Aditi were partners in a firm with capital of 1,20,000 and 1,60,000 respectively. On 1st April, 2022
they admitted Gurleen as a partner for 1/4th share in profits on his payment of 2,00,000 as his capital and
` 90,000 as his share of goodwill.
On that date the creditors of the firm were ` 60,000 and Bank overdraft was ` 15,000. Their assets apart
from Cash included Stock ` 10,000, Debtors ` 40,000, Plant and Machinery ` 80,000, Land and Building
` 2,00,000. It was agreed that Stock should be depreciated to 8,000, Plant and Machinery by 20%, ` 5,000
should be written off as bad debts and Land and Building should be appreciated by 25%.
Prepare the Revaluation Account and Capital Accounts of Partners.
25. Ranbir and Vishal are partners sharing profits in the ratio of 2 : 1. Gopal is admitted into the firm for 1/4
share of profits. Gopal brings in ` 20,000 in respect of his capital. The capitals of old partners Ranbir and
Vishal, after all adjustments relating to goodwill, revaluation of assets and liabilities, etc., are ` 45,000 and
` 15,000 respectively. It is agreed that partners’ capitals should be according to the new profit sharing ratio.
Determine the new capitals of Ranbir and Vishal and record the necessary journal entries assuming that
the partner whose capital falls short, brings in the amount of deficiency and the partner who has an excess,
withdraws the excess amount.
26. Navratna Limited (pharmaceutical company) appointed marketing expert, Ms Ankita as the CEO of the
company, with a target to penetrate their roots in the rural regions. Ms Ankita discussed the ways and

means to achieve target of the company with financial, production and marketing departmental heads and
asked the finance manager to prepare the budget.
After reviewing the suggestions given by all the departmental heads, the finance manager proposed
requirement of an additional fund of 52,50,000.
Navratna Limited is a zero-debt company. To avail the benefits of financial leverage, the finance manager
proposed to include debt in the capital structure. After deliberations, on April 1, 2021, the board of directors
had decided to issue 6% Debentures of 100 each to the public at a premium of 5%, redeemable after 5 years
at 110 per share.
You are required to answer the following questions:
(i) Pass Journal entry for the allotment of debentures.
(ii) Pass Journal entry to write off loss on issue of debentures.
(iii) Prepare Loss on Issue of Debentures Account.
PART—B
27. What will be the effect of Issue of Bonus shares on Debt to Equity Ratio?
(a) Decrease
(b) Increase
(c) Neither increase nor decrease
(d) Either increase or decrease
28. Which of the following ratios is not a solvency ratio?

(a) Proprietary Ratio
(b) Total Assets to Debt Ratio
(c) Current Ratio
(d) Debt to Equity Ratio
o
What is the importance of financial statements analysis for creditors?
(a) to know long-term solvency
(b) to know profitability
(c) to know short-term solvency
(d) None of these
29. Nisaan Industries Limited is carrying on a mutual fund business. It invested ` 10,00,000 in shares of a
company and received a dividend of 10%. Cash Flow from Investing Activities will be.
(a) ` 1,00,000
(b) ` 10,00,000
(c) ` 2,000
(d) Nil
o
Issue of equity shares is shown under_______ in Cash Flow Statement.
(a) operating activities
(b) financing activities
(c) investing activities
(d) None of these
30. From the following information find out the amount of goodwill written off:
31st March, 2022 31st March, 2021
Goodwill ` 2,00,000 ` 3,00,000

Purchase of Goodwill during the year ` 30,000.
(a) ` 3,30,000
(b) ` 1,00,000
(c) ` 1,30,000
(d) ` 30,000
31. State the heads under which following items are depicted in Statement of Profit and Loss.
(i) Interest paid
(ii) Carriage inwards
(iii) Audit fee
32. State any three objectives of financial statements analysis?
33. From the following information, Compute Debt Equity Ratio and Current ratio.
Long-term Borrowings ` 3,00,000
Current Liabilities ` 50,000
Inventory ` 6,000
Prepaid Expenses ` 4,000
Non-current Assets ` 3,60,000
Current Assets ` 90,000
o
Under which of the major heads will the following items be shown while preparing Balance Sheet of a
company as per Schedule III of the Companies Act 2013:
(a) Stores and spares (b) Unclaimed dividend
(c) Interest accrued but not due on borrowings (d) Calls-in-advance
(e) Loose tools (f) Provision for tax
(g) Computer software (h) Current maturities of long-term borrowings
34. From the following Balance Sheets of Daksha Industries Limited as on 31st March, 2022 and 31st March,
2021, prepare Cash Flow Statement as per AS-3 (Revised).

No. (`) (`)
(a) Equity Share Capital 1 12,00,000 8,00,000
(b) Reserves and Surplus 4,00,000 3,50,000
2. Non-Current Liabilities :
(a) Long-term Borrowings 4,40,000 3,50,000
3. Current Liabilities :
(a) Short-term Borrowings (Bank Overdraft) 30,000 45,000
(b) Trade Payables 60,000 50,000
(c) Short-term Provisions 2 84,000 60,000
Total 22,14,000 16,55,000
II. ASSETS
Property, Plant and Equipments and Intangible Assets
Property, Plant and Equipments : Fixed Tangible Assets 12,00,000 9,00,000
2. Current Assets :

(a) Current Investments (Marketable) 84,000 60,000

(b) Inventories 2,00,000 1,00,000
(c) Trade Receivables 3,10,000 2,30,000
(d) Cash and Cash Equivalents 4,20,000 3,65,000
Total 22,14,000 16,55,000
(a) Depreciation charged on tangible fixed assets was ` 1,20,000.
(b) During the year, company paid interest ` 36,000 on its long term borrowings.
******

Sample Paper 8
Accountancy
PART—A
1. Badal and Deepesh are partners sharing profits and losses in the ratio 4 : 1. Samay was manager who received
the salary of ` 2,000 pm in addition to a commission of 5% on net profits after charging such commission.
Profit for the year is ` 3,39,000 before charging salary. What will be the total remuneration of Samay ?
(a) ` 43,500 (b) ` 38,000
(c) ` 39,000 (d) ` 44,000
2. Calculate interest for the year, when 6% debentures are issued for ` 10,00,000 of ` 100 each.
(a) ` 80,000 (b) ` 6,00,000
(c) ` 6,000 (d) ` 60,000
o
A company can charge interest @_______% p.a. on calls-in-arrears and allow @_______% p.a. on
calls-in-advance.
(a) 12, 10 (b) 5, 6
(c) 8, 10 (d) 10, 12
3. Workmen Compensation Reserve (WCR) appears in the balance sheet of Uday and Abhey who share profits
in the ratio of 2 : 3 at ` 40,000. Vijay is admitted and the new profit sharing ratio is 1 : 1 : 1.
If the claim on account of WCR is estimated at ` 50,000, then
(a) the difference of ` 10,000 will be debited to Uday’s capital account
(b) the difference of ` 10,000 will debited to Abhey’s capital account
(c) the difference of ` 10,000 will be debited to revaluation account
4. Assertion (A): Goodwill is treated as an asset of the firm.

Reason (R): Goodwill helps a business to earn more profits and attract more customers.
Alternatives
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion
(A)

5. At the time of forfeiture of shares, share capital account will be debited with______value.
(a) called-up (b) uncalled
(c) received (d) None of these
o
For writing-off loss on issue of debentures, first of all company use its______and deficiency is met from
surplus balance of statement of profit and loss.
(a) general reserves (b) securities premium reserves
(c) capital reserve (d) Either (a) or (b)
6. Ascertain the correct sequence of deductions of the following items from the profit of the partnership firm.
(i) Interest on capital
(ii) Commission paid to a partner
(iii) Interest on loan from partner
(a) (ii), (iii), (i) (b) (iii), (ii), (i)
(c) (i), (ii), (iii) (d) None of these
o
In the context of debit side of profit and loss appropriation account, pick odd one out.
(a) Interest on Drawings (b) Partner’s Commission
(c) Interest on Capital (d) Partners’ Salaries
7. Rajesh Steel Limited issued 20,000, 9% debentures of ` 50 each at a discount of 8%, redeemable at par at
any time after 9 years. Record journal entry in the books of Rajesh Steel Limited for transferring debentures
application money to debenture account.
(a) Debenture Application A/c Dr. 9,20,000

(b) Debenture Application A/c Dr. 9,20,000
Loss on Issue of Debentures A/c Dr. 1,80,000
To Premium on Redemption of Debentures A/c 1,00,000
(c) Debenture Application and Allotment A/c Dr. 9,20,000
8. Harsh Enterprises Limited purchased assets of ` 12,60,000 from Crown Sales Limited. Harsh Enterprises
Limited paid this amount by issuing equity shares of ` 100 each at premium of 20%. You are required to
find out the amount of premium.
(a) ` 2,10,000 (b) ` 12,60,000
(c) ` 10,50,000 (d) None of these
9. Umesh and Suresh are partners sharing profits equally. They admit Yogesh into partnership for equal share.
It was agreed that the firm’s goodwill will be valued at two years’ purchase of average normal profit of the
last three years. Profits of the business for last three years ended on 31st March were
2018 — ` 80,000 (after charging an abnormal loss ` 20,000)
2019 — ` 1,50,000 (including an abnormal gain ` 50,000)
2020 — ` 1,00,000
The value of goodwill will be______
(a) ` 3,00,000 (b) ` 2,50,000
(c) ` 1,00,000 (d) ` 2,00,000

10. Kings Marketing Private Limited is registered with 1,00,000 shares and invited public to apply for the
complete registered capital. Per share value is ` 10 which is payable as ` 2 on application, ` 5 on allotment
and rest on first and final call. What will be the amount that the company will receive till allotment?
(a) ` 10,00,000 (b) ` 7,00,000
(c) ` 2,00,000 (d) ` 5,00,000
11. On 1st January, 2020, a partner advanced a loan of ` 20,000 to the firm. In the absence of agreement,
interest on loan on 31st March, 2020 will be
(a) Nil (b) ` 600
(c) ` 300 (d) ` 1,200
12. Net profit of a firm is ` 9,900. Manager is entitled to a commission of 10% on profit; before charging his
commission. Manager’s commission will be
(a) ` 1,100 (b) ` 970
(c) ` 990 (d) ` 900
o
David is a partner in a firm. He withdraw regularly ` 4,000 every month for the six months ending 31st
March, 2020. If interest on drawings is charged @ 8% p.a., the interest charged will be
(a) ` 560 (b) ` 400
(c) ` 480 (d) ` 960
13. The firm of Virender and Mahender earned a profit of ` 3,25,000 during the year ending on 31st March,
2019. They have decided to donate 10% of this profit to an NGO working for senior citizens. Pass the journal
entry.
(a) Virender’s Capital A/c Dr. 1,46,250

Mahender’s Capital A/c Dr. 1,46,250
To Profit and Loss Appropriation A/c 2,92,500
(b) Profit and Loss Appropriation A/c Dr. 32,500
To Mahender’s Capital A/c 16,250
To Virender’s Capital A/c 16,250
(c) Profit and Loss Appropriation A/c Dr. 2,92,500
To Virender’s Capital A/c 1,46,250
To Mahender’s Capital A/c 1,46,250
14. At the time of change in profit sharing ratio, accumulated_____are______in partners’capital account.
(a) losses, credited (b) profits, debited
o
‘Profit and loss adjustment account’ is_______in nature.
(a) personal (b) real
(c) nominal (d) Both (a) and (b)
DIRECTION : Direction Read the following hypothetical situation and answer Q. No. 15 and 16
3
Donald and Edmond are partners sharing profits in the ratio of 3 : 2. They admit Ziff into the firm for 10 th
2 1
profit,which he takes 10 th from Donald and 10 th from Edmond and brings a part of his share of premium
for goodwill in cash.

Journal

Bank A/c Dr. 1,20,000
To Premium for Goodwill A/c 1,20,000
(Being share of goodwill brought in by Ziff)
Premium for Goodwill A/c Dr. .........
Ziff’s Current A/c Dr. 3,30,000
To Donald’s Capital A/c .........
To Edmond’s Capital A/c .........
(Being premium for goodwill credited to old partners)
15. What will be the new profit sharing ratio of Donald, Edmond and Ziff ?
(a) 3 : 3 : 4 (b) 3 : 4 : 3
(c) 3 : 3 : 3 (d) 4 : 3 : 3
16. What will be the amount credited to Donald’s capital account ?

(a) ` 3,00,000 (b) ` 3,30,000
(c) ` 1,20,000 (d) ` 1,50,000
17. Jack and Luke are partners in a firm sharing profit and losses in the ratio of 2 : 1. They decide to admit
Ryan as a new partner for 1/3 share on 01.04.2022. For this purpose goodwill of the firm is to be valued on
the basis of two years’ purchase of the average profits/losses for the last 3 years. The profit/loss of the firm
for the last three years were:
Year ending Profit/(Loss) (`)
31st March 2020 3,00,000
31st March 2021 (1,00,000)
31st March 2022 2,50,000
(a) There was an abnormal loss of ` 30,000 in the year ended 31st March, 2020.
(b) Closing Stock as on 31st March, 2022 was overvalued by ` 30,000.
Calculate the value of goodwill.
18. Devesh and Nitesh are partners in a firm sharing profits in the ratio 2:3. Their Balance Sheet as at 31”

(`)
Bank Overdraft 10,000 Cash 32,000
Salary Outstanding 5,000 Debtors 48,000
General Reserve 4,000 doubtful debts (2,000) 46,000
Capital Account : Stock 35,000
Devesh 80,000 Prepaid expenses 21,000
Nitesh 1,20,000 2,00,000 Investments 60,000
Furniture 38,000
2,32,000 2,32,000

On the above date they admitted Sarvesh as a partner for 1/4th share in the business which he acquires
equally from Devesh and Nitesh. Following are the required adjustments:
(a) Sarvesh will contribute ` 60,000 as his share of capital and ` 30,000 towards goodwill.
(b) Stock is overvalued by ` 5,000.
(c) Market value of investments is ` 54,000.
(d) Provision for doubtful debts to be maintained at 5% on debtors.
Pass necessary journal entries on Sarvesh’s admission.
o
Sudesh, Bhavesh and Sarvesh are partners sharing profits in the ratio 5 : 3 : 2. Their Balance Sheet as at
31st March 2022 stood as follows.

Capital A/cs: Land and Building 4,25,000
Sudesh 2,50,000 Investments 70,000
Bhavesh 2,50,000 Computers 95,000
Sarvesh 2,00,000 7,00,000 Furniture and Fittings 40,000
General Reserve 3,000 Sundry Debtors 1,20,000
Investment Fluctuation Fund 10,000 Cash at Bank 80,000
8,30,000 8,30,000
On this date, the partners decided to share profits equally. They, further, agreed upon the following terms:
(i) The goodwill of the firm is valued at ` 90,000.
(ii) Market price of investments is ` 62,000.
(iii) The liability against workmen compensation reserve was found to be ` 50,000.
(iv) Land and building and furniture and fittings is to be reduced by 10%.
(v) Computers is to be reduced to 40%.
Pass necessary journal entries to give effect to the above transactions.
19. GER Electrical Limited 2,500, 9% Debentures of ` 100 each on 1st April, 2022 redeemable at a premium of
8% after 3 years. The issue was fully subscribed.
According to the terms of the prospectus ` 40 is payable on application and the balance on allotment of
debentures, Record the necessary entries regarding issue of Debentures.
o
Baldev Enterprises Limited issued 30,000, 12% debentures of ` 100 each on 1st April 2021. The issue was
subscribed by public for 25,000 debentures. Pass journal entries for interest due and paid for the full year
as on 31st March 2022.
20. On 1-4-2020, Jaxon and Parker, entered into partnership for supplying laboratory equipments to government
schools situated in remote and backward areas. They contributed capitals of ` 80,000 and ` 50,000 respectively
and agreed to share the profits in the ratio of 3 : 2. The partnership deed provided that interest on capital
shall be allowed at 9% per annum. During the year, the firm earned a profit of ` 7,800.
Showing your calculations clearly, prepare ‘Profit and Loss Appropriation Account’ of Jaxon and Parker for
the year ended 31-3-2022.
21. Sivan Technologies Limited purchased assets of the book value of ` 4,00,000 and took over the liabilities
of ` 50,000 from Juke Exports Private Limited It was agreed that the purchase consideration, settled at `
3,80,000, be paid by issuing 9% debentures. What journal entries will be made if the debentures are issued:
(a) at par
(b) at discount of 10%,
(c) at premium of 10%.
It was agreed that any fraction of debentures will be paid in cash.

22. Snehal, Suchita and Sindhu were partners sharing profits and losses in the ratio of 3:2:1. The firm was
dissolved on 31st March 2022. After transfer of assets and liabilities to Realisation A/c the following
transactions took place.
Give journal entries in the books on dissolution of the firm.
(a) Suchita’s Loan to the firm ` 30,000 was settled at ` 28,500.
(b) Workmen Compensation Reserve – ` 40,000. A liability equal to 60% of the reserve was settled.
(c) Sindhu was to receive 5% of the value of assets realised as remuneration for completing the dissolution
work and was to bear realisation expenses. Realisation expenses were ` 5,500 that was paid by Sindhu.
Assets realised ` 60,000.
(d) The Balance Sheet disclosed a footnote, contingent liability for ` 5,000 in respect of a bill discounted.
The bill was received from Megha. On the date of dissolution, Megha was declared insolvent and was
not able to pay the amount due. The bill had to be met by the firm.
23. Surya Industries Limited invited applications for 50,000 equity shares of ` 10 each at a premium of 10%
payable along with allotment. The amounts were payable as follows:
On Application ` 4 per share.
On Allotment ` 4 per share (including premium)
On First & Final call - balance
Applications for 70,000 shares were received, of which 10,000 shares were rejected and the remaining
applicants were given pro-rata allotment. Excess application money was applied towards sums due on
allotment.
Nitin to whom 1,500 shares were allotted failed to pay the allotment money. His shares were forfeited
immediately after allotment. The forfeited shares were reissued @ 8 per share as fully paid-up. Afterwards
the final call was made. Deepti who had applied for 1800 shares failed to pay the final call. Her shares were
also forfeited.
Journalise the above transactions.
o
Ocean Power Limited invited applications for 1,00,000 Equity shares of ` 10 each payable as under:
On Application ` 4 per share
On Allotment ` 3 per share
On First Call ` 2 per share
On Final Call ` 1 per share
All payments due on application, allotment and calls have been received with the following exceptions.
Rohit, a holder of 1,000 shares, failed to pay allotment and call money.
Mohit, a holder of 500 shares, failed to pay the amount due on first call and final call.
Luhit, a holder of 300 shares, failed to pay final call. The shares of all the above defaulters were forfeited.
Pass necessary journal entries in the books of the Company for the above transactions.
24. Tarun, Varun and Arun are partners in a firm sharing profits in the ratio 5:4:1. Their Balance Sheet as at
31st March, 2022 was as follows:

Capital Accounts: Goodwill 27,000
Tarun 85,000 Land 64,000
Varun 54,000 Machinery 34,000
Arun 36,000 1,75,000 Patenrts 2,000
Outstanding Expenses 14,000 Debtors 50,000
Creditors 47,000 Bank 54,000
2,56,000 2,56,000
It was agreed that Tarun will retire on the following terms:
(i) The Goodwill of the firm is valued at two years purchase of the average annual profits of the preceding
three years. The profits for the last three years were ` 34,000, ` 42,000 and ` 50,000.
(ii) Provision for doubtful debts at 10% on Debtors to be created.

(iii) Land revalued at ` 82,000 and Machinery at ` 24,000.

(iv) Sundry Creditors have agreed to accept 5% less.
(v) Patents were valueless.
Prepare Revaluation A/c and Partners’ Capital Accounts
o
Following is the Balance Sheet of Luna, Nora and Elena as on 31” March, 2022 who shared profits in the
ratio 3 : 2 : 1. They decided to dissolve their firm.

Capital Accounts: Bank 69,500
Luna 1,70,000 Accruced Interest 3,500
Nora 1,40,000 Debtors 72,000
Elena 1,20,000 Less : Provision for
Investment Fluctuation Reserve 24,000 doubtful debts (8000) 64,000
Loan 32,000 Stock 70,000
Employees Provident Fund 42,000 Investment 75,000
Bills Payable 18,000 Furniture 98,000
Sundry Creditors 26,000 Machinery 1,32,000
Goodwill 60,000
5,72,000 5,72,000
Agreed terms of dissolution were as follows:
(i) Sundry Creditors agreed to take over an unrecorded asset as full and final payment.
(ii) Nora took over half the stock at 10% discount and also agreed to settle the Bills Payable.
(iii) Remaining stock realised 55% of the book value.
(iv) ` 7,000 of Debtors proved bad.
(v) Other assets realised:
Machinery : ` 1,15,050
Furniture : ` 76,000
Accrued Interest : Full amount
Goodwill ` 24,000.
(vi) Investments were sold in the market at a loss of 10%.
(vii) Firm had to pay ` 6,300 for outstanding rent which was not provided for in the books.
(viii) Realisation expenses were ` 3,000 paid by Elena.
Prepare Realisation A/c and Partners’ Capital Accounts.
25. Mayank, Aryan and Farhan were the partners sharing of 5:3:2. on 31st March, 2022 their Balance Sheet was
as under:

Capitals: Leasehold Premises 1,25,000
Mayank 1,50,000 Patents 30,000
Aryan 1,25,000 Machinery 1,50,000
Farhan 75,000 3,50,000 Stock 1,90,000
Creditors 1,55,000 Cash at bank 40,000
5,35,000 5,35,000
Aryan died on 1st August, 2022. It was agreed that:
(ii) Machinery to be valued at ` 1,40,000; Patents at ` 40,000; Leasehold Premises at ` 1,00,000 on this
date.

(iii) For the purpose of calculating Aryan’s share in the profits of 2022-23, the profits should be taken to
(iv) Interest on capital @ 9% p.a.
Prepare Aryan’s Capital Account to show the amount due to his executors.
26. Virat Fabric Company dealing in manufacture ladies garments decided to manufacture masks, gloves and
other precautionary kits for people for which it required more of additional funds. Since the company has
already raised money through shares equal to its authorised capital, the company decided to raise the
additional funds through issue of ` 40,00,000; 7% debentures of ` 100 each at a discount of 6%, redeemable
at a premium of 5% after five years. The amount was payable as follows:
On Application – ` 30
On Allotment – The Balance amount
Answer the following questions on the basis of the above information:
(i) Pass journal entry for allotment of debentures.
(ii) Prepare ‘Loss on Issue of Debentures Account.’
(iii) What entry will be passed for writing off the interest on debentures?
PART—B
27. The Liquidity ratio of a concern is 1.5:1, and it purchased goods of ` 50,000 for cash. What will be the ratio ?
(a) either increase or decrease
(b) increase
(c) decrease
(d) not change
28. Om Tools Private Limited had investment of ` 68,000 as on 31.3.2021 and investment of ` 56,000 as
on 31.3.2022. During the year, Om Tools Private Limited sold 40% of its investments being held in the
beginning of period at a profit of ` 16,800. Determine cash flow from investing activities.
(a) ` 28,800 (b) ` 72,800
29. Thakkar Tools Private Limited sold its machinery used in business at a profit of ` 42,000. How will it be
shown in the Statement of Profit and Loss?
(a) Other income (b) Finance costs
(c) Revenue from operations (d) None of these
o
Revenue from sale of scrap iron cutting of manufacturing will be shown under
(a) Other income (b) Cost of materials consumed
(c) Revenue from operations (d) None of these
30. Where will a manufacturing company record dividend/interest received while preparing Cash Flow Statement?
(a) Investing Activities (b) Financing Activities
(c) Operating Activities (d) None of these
o
Sale of Marketable Securities at par would result in
(a) outflow (b) no flow
(c) inflow (d) None of these
31. Explain any three importance of analysis of financial statements.

32. Give major heading and sub-heading under which following items will be shown in a Company’s Balance
Sheet as per Schedule III, Part I of the Companies Act 2013:
(a) Preliminary Expenses
(b) Goodwill
(c) Long-term Investments
(d) Securities Premium
(e) Bank overdraft
(f) Encashment of Employees Earned Leave payable on retirement
33. The current ratio of a company is 2 : 1. State giving reasons which of the following would improve, reduce
or not change the ratio:
(i) Repayment of trade payables.
(ii) Sale of Motor vehicles at a loss of 20%.
(iii) Sale of goods at a profit of 10%.
(iv) Purchase of Machinery for ` 10,000 on credit of 2 months.
o
From the following information calculate the Working Capital Turnover Ratio and Fixed Assets Turnover
Ratio.
Cost of Revenue from Operations ` 5,00,000
Gross Profit Ratio 20%
Fixed Assets ` 5,00,000
Capital Employed ` 7,50,000
34. Following is the Balance Sheet of Vidhata Enterprises Private Limited as on 31st March, 2022 and 2021.
Balance Sheet of Vidhata Enterprises Private Limited

as on 31st March 2022 and 2021
No. (`) (`)
(a) Share Capital 19,60,000 14,00,000
Long-term Borrowings 7,00,000 1,96,000
(a) Trade Payables 1,40,000 84,000
(b) Short-term Provisions 2 1,12,000 84,000
Total 36,12,000 23,24,000
II. ASSETS
1. Property, Plant and Equipments and Intangible Assets
(a) Fixed Assets
(i) Tangible Assets 3 22,40,000 12,60,000
(ii) Intangible Assets 4 1,96,000 2,80,000
2. Current Assets :
(a) Inventories 3,50,000 2,80,000
(b) Trade Receivables 7,00,000 4,20,000
(c) Cash and Cash Equivalents 1,26,000 84,000
Total 36,12,000 23,24,000

Notes to Accounts :
Note No. Particulars 31 March 2022 31 March 2021

(`) (`)
Surplus i.e.., Balance in Statement of Profit and Loss 7,00,000 5,60,000
Provision for Tax 1,12,000 84,000
3. Tangible Assets
Machinery 24,64,000 14,00,000
Less : Accumulated Depreciation (2,24,000) (1,40,000)
22,40,000 12,60,000
Goodwill 1,96,000 2,80,000
Prepare Cash Flow Statement after taking into account the following adjustment:
Tax paid during the year amounted to ` 98,000.
******

Sample Paper 9
Accountancy
Part A
(Accounting for Partnership Firms and Companies)
1. A partner drew ` 8,000 at the end of every month. Interest on drawings is 15% per annum. Calculate interest
on drawings for the year ending 31st March, 2019.
(a) ` 6,600 (b) ` 7,200
(c) ` 7,800 (d) ` 1,200
2. What will be the journal entry for issue of 2,000, 12% debentures of ` 100 each at a premium of 10%?
(a) To Debentures Application and Allotment A/c Dr. 2,20,000

To Security Premium Reserve A/c 20,000
(b) Bank A/c Dr. 2,20,000
To Debentures Application and Allotment A/c 2,20,000
(c) Debentures Application and Allotment A/c Dr. 2,20,000
3. Vidhata Industries Limited invited applications for 8,000 shares of ` 10 each at the issue price of ` 10.
Applications were received for 7,600 shares. What will be the amount received on application?
(a) ` 72,000 (b) ` 84,000
(c) ` 80,000 (d) ` 76,000
4. If a fixed amount is withdrawn by a partner on the first day of every month, interest on the total amount
is charged for______months.
1
(a) 5 2 (b) 12
1
(c) 6 (d) 6 2
5. How many days notice period is given to a defaulter in forfeiture?

(a) 21 days (b) 28 days
(c) 7 days (d) 14 days
o
________interest is allowed by the company on the amount of calls-in-advance.
(a) 6% p.a. (b) 8% p.a.
(c) 12% p.a. (d) 15% p.a.
6. Assertion (A): A private company restricts the right to transfer its shares.
Reason (R): A private company is allowed to make any invitation to the public to subscribe for any securities
of the company.
Alternatives
(A)
7. Tannu and Annu are partners in a firm. They share their profits in 2 : 3 ratio. The accountant of the firm,
finalised the profit and loss and capital account and presented the accounts to them. Tannu disagreed
with accounts because Tannu’s capital account showed negative balance. Tannu is in doubt, this cannot be
happen. Give your opinion.
(a) Tannu is correct (b) Accountant is defaulter
(c) Tannu is wrong (d) None of these
o
Sleeping partners________
(a) take active part in the conduct of the business but provide no capital. However, share profits and losses
in the agreed ratio
(b) do not take any part in the conduct of the business and contribute no capital. However, share profits
and losses in the agreed ratio
(c) take active part in the conduct of the business but provide no capital. However, salary is paid to them
(d) do not take any part in the conduct of the business but provide capital and share profits and losses in
the agreed ratio
8. Dalbir and Vivek are partners in a firm. They decided to dissolve the firm. Assets other than cash ` 1,60,000,
cash ` 25,000, total liabilities ` 1,75,000. On dissolution, assets realised ` 1,25,000 and liabilities paid `
1,40,000. Net profit or loss on realisation is
(a) loss ` 25,000 (b) loss ` 15,000
(c) profit ` 25,000 (d) No profit no loss
o
Naresh, Kamlesh and Rakesh were in partnership sharing profits and losses equally. Kamlesh retires. After
adjustments, his capital account shows a credit balance of ` 1,20,000 as on 1st April, 2012. The balance due
to Kamlesh is to be paid in three equal instalments together with interest @ 5% per annum. Amount to be
paid to Kamlesh on 30th March, 2013 will be
(a) ` 46,000 (b) ` 54,000
(c) ` 60,000 (d) ` 40,000
9. Ekta and Yukta were partners sharing profits and losses in the ratio of 3 : 2. On 31st December, 2019, the
extract of their Balance Sheet is as follows

Land and Building 1,00,000
At the time of admission of new partner Latika, if the value of land and building is to be appreciated by 10%,
then what will be the amount of land and building which is to be shown in new balance sheet?
(a) ` 10,000 (b) ` 1,10,000
(c) ` 90,000 (d) ` 1,00,000
10. Company can utilise premium received on issue of debentures for which purpose?
(a) For writing-off preliminary expenses (b) Writing-off discount allowed on issue
o
Which of the following is correct with regard to usage of balance of share forfeiture account?
(i) Provide for discount given at the time of reissue
(ii) Write-off preliminary expenses

(iii) Write-off bad debts
(a) Only (iii) (b) (i) and (ii)
(c) (i) and (ii) (d) Only (i)
11. Arjun and Tarun are two partners sharing profits in the ratio of 2 : 1. Arun, a new partner is admitted for
1/4th share. At the time of admission, loss from revaluation is ` 4,500. Entry for distribution of loss is
Arjun’s Capital A/c Dr. X

Tarun’s Capital A/c Dr. Y
To Revaluation A/c Z
Here X, Y, Z are
(a) ` 3,500, ` 1,000, ` 4,500 respectively (b) ` 1,000, ` 3,500, ` 4,500 respectively
(c) ` 3,000, ` 1,500, ` 4,500 respectively (d) ` 1,500, ` 3,000, ` 4,500 respectively
12. For which purpose, sacrificing ratio is used in case of admission of a partner?
(a) To distribute revaluation profit (b) To distribute balance in profit and loss account
(c) To distribute reserves (d) To distribute goodwill
o
At the time of death of a partner, the adjustment of goodwill is done in which ratio?
(a) Gaining ratio (b) Sacrificing ratio
(c) Old profit sharing ratio (d) None of these
13. Goodwill of firm is ` 53,750. Find the number of years’ purchased if the average profits are ` 21,500.
(a) 2 (b) 2.5
(c) 1 (d) 1.5
14. Jack and Mack are partners with the profit sharing ratio of 1 : 2. They decided to change this ratio to 2
: 1 with effect from 1st April, 2021. In adjustment entry, Mack’s account will be______by______
assuming goodwill of firm is valued at ` 15,000.
(a) credited, ` 10,000 (b) debited , ` 10,000
(c) debited, ` 5,000 (d) credited, ` 5,000
Sahil and Naveen are partners in a firm engaged in the sale of readymade garment. This capital contribution
was ` 5,00,000 each with profit sharing ratio of 1 : 1. Kavya joined as a partner without capital for 1/3rd
share in the profits of the firm. She is blind by birth but having good management qualities.
They decided to sell products at a discount of 15% on maximum retail price to the people living below
poverty line. They also decided to open new retail shops in the naxal affected areas of the country. New jobs
of sales persons will be reserved for the girls belonging to scheduled castes and scheduled tribes.
The new partnership agreement provides for the following
(i) 10% of the trading profit will be donated to Prime Minister Relief Fund.
(ii) 10% of the trading profit will be donated to National Blind Relief Fund.
(iii) Sahil withdrew ` 2,500 per month at the beginning of every month and Naveen withdrew ` 2,500 per
month at the end of every month. Interest is charged on Sahil’s and Naveen’s drawings @ 10% p.a.
(iv) 10% of distributable profit will be transferred to Reserve Fund.
Trading profit for the year 31st March, 2021 was ` 5,00,000.
15. What will be the interest charged on Sahil’s and Naveen’s drawings ?
(a) ` 1,500, ` 2,050 (b) ` 1,375, ` 1,625
(c) ` 1,550, ` 1,500 (d) ` 1,625, ` 1,375
16. What will be the amount transferred to reserve fund ?

(a) ` 48,400 (b) ` 42,800

(c) ` 90,000 (d) ` 48,700
17. Badri and Aadya are partners in a firm. Their capitals are: Badri ` 30,000 and Aadya ` 20,000. During the
year ended 31st March, 2020, the firm earned a profit of ` 15,000. Assuming that the normal rate of return
is 20%, calculate the value of goodwill of the firm of Badri and Kornal.
(i) By capitalisation method; and
(ii) By super profit method, if the goodwill is valued at 4 years’ purchase of super profit.
18. Nakul and Rahul decided to start a partnership firm. They contributed capitals of ` 2,00,000 and ` 1,00,000
on 1st April, 2017. Nakul expressed his willingness to admit Varun as a partner without capital, Rahul
agreed to this. On 1st October, 2017, Rahul granted a loan of ` 1,20,000 to the firm.
The terms of partnership were as follows
(i) Nakul, Rahul and Varun will share profits in the ratio of 2 : 2 : 1.
(ii) Interest on capital @ 6% per annum. Interest on drawings @ 5%.
(iii) Nakul to get a monthly salary of ` 6,000 and Rahul to get salary of ` 4,000 per quarter.
(iv) 10% of the profits before charging interest on drawings but after making appropriations are to be
transferred to general reserve.
Due to shortage of capital, Nakul contributed ` 50,000 on 30th September, 2017 and Rahul contributed `
20,000 on 1st January, 2018 as additional capital. The profit of the firm for the year ended 31st March, 2018
was ` 3,37,800. Drawings of Nakul and Rahul were ` 50,000 and ` 40,000 respectively.
Prepare profit and loss appropriation account for the year ending 31st March, 2018.
19. Saket, Balbir and Vanraj are partners sharing profit in the ratio of 6 : 4 : 2. They have decided to share
profits equally since 1st April, 2020 and following transactions should be recorded in the books
(i) Contingent liability worth ` 7,000 proved to be actual liability and was to be paid by the firm.
(ii) Bill of ` 2,000 discounted with the bank has been dishonoured by the drawee.
(iii) Contingent liability worth ` 25,000 was undertaken by Balbir for ` 15,000.
(iv) The firm lost a litigation case and was ordered to pay a penalty of ` 16,000 which was paid.
o
Vasant, Daljit and Anant were partners in a firm sharing profits in the ratio of 2 : 2 : 1. Vasant died on 31st
March, 2020. The balance sheet of the firm on that date was as under
Balance Sheet
General Reserve 45,000 Debtors 52,000
Workmen’s Compensation Fund 20,000 Furniture 2,40,000
Capital A/cs Plant 3,50,000
Vasant 2,00,000 Profit and Loss A/c 55,000
Daljit 3,00,000
Anant 1,00,000 6,00,000
7,45,000 7,45,000
On Vasant’s death, a claim of ` 12,000 was accepted for workmen’s compensation.
Pass necessary journal entries for general reserve, profit and loss account and workmen’s compensation fund,
in the books of the firm
20. Prince Industries Limited is authorised with a capital of ` 50,00,000 divided into 50,000 shares of ` 100
each. The company issued 30,000 shares to the public for subscription. The company received application
for 25,000 shares. In 1st year, ` 80 is called by the company.
Bhupesh and Sandesh are two shareholders holding 2,000 and 4,000 shares respectively. Both the shareholders
did not paid first call money of ` 20 per share. Sandesh’s shares forfeited by the company after first call and
later on 3,000 shares out of forfeited were re-issued at ` 60 per share as ` 80 called-up.
Show the following
(i) Share capital in the balance sheet of the company as per Schedule III, Part I of the Companies Act

2013.
(ii) Also prepare notes to accounts for the same.
o
Amber Industries Limited issued 2,000, 10% debentures of ` 100 each, at a premium of ` 10 per debenture
payable as follows On application ` 50 ; on allotment ` 60. The debentures were fully subscribed and all
money was duly received. Record the journal entries.
21. Anupam Enterprises Limited decided to expand its business and for this purpose it opened a new unit in
the remote areas of Assam. To finance the project, it issued 1,50,000 shares of ` 10 each, payable as ` 3 on
application, ` 2 on allotment, ` 2 on first call and the balance ` 3 on second and final call. The shares were
fully subscribed and all the amount due was received. Pass necessary journal entries.
22. Viraj, Ranbir and Yuvraj were partners in a firm sharing profits in the ratio of 5 : 3 : 2. Goodwill appeared
in their books at a value of ` 60,000 and general reserve at ` 20,000. Ranbir decided to retire from the firm.
On the date of his retirement, goodwill of the firm was valued at ` 2,40,000. The new profit sharing ratio
decided among Viraj and Yuvraj was 2 : 3. Record necessary journal entries on Ranbir’s retirement.
23. Vikram and Akram are partners sharing profits and losses in the ratio of 1:1. Following is their balance sheet
Balance Sheet
as at ...
(`) (`)
Creditors 1,00,000 Cash 50,000
Employees Provident Fund 50,000 Machine 1,00,000
Bills Payable 50,000 Stock 80,000
Capital A/cs Patents 20,000
Vikram 2,00,000 Investment 50,000
Akram 1,00,000 3,00,000 Goodwill 20,000
Profit and Loss 20,000
6,00,000 6,00,000
(i) Kabir comes for 1/6th share and brings capital of ` 1,00,000 and proportionate share in goodwill.
(ii) Goodwill of the firm is valued at ` 1,20,000.
(iii) Half the premium is withdrawn by old partners.
(iv) ` 20,000 unrecorded typewriter brought into books.
(v) Make ` 5,000 provision for unforseen liabilities.
(vi) Bills payable paid-off.
(vii) Building was found undervalued by ` 40,000.
Prepare revaluation account, partners’ capital accounts, cash account and balance sheet of the new firm.
o
Tarun, Varun and Arun are partners with 2 : 2 : 1 ratio.
Balance Sheet
(`) (`)
Creditors 60,000 Cash in Hand 30,000
General Reserve 20,000 Bank 20,000


Capital A/cs Building 1,00,000
Tarun 60,000 Investment 20,000
Varun 40,000 Deferred Revenue Expenses 10,000
Arun 40,000 1,40,000
2,30,000 2,30,000
(i) Arun takes retirement.
(ii) New profit sharing ratio between Tarun and Varun is 11 : 9 and goodwill of the firm is valued at `
40,000.
(iii) Investment is taken over by Arun at ` 15,000.
(iv) ` 6,000 worth unrecorded typewriter is taken by Tarun at ` 5,000.
(v) Building increase by 10%.
(vi) ` 10,000 paid to Arun in cash and the balance transferred to his loan account. Prepare necessary
accounts and balance sheet.
24. Green India Private Limited issued 10,00,000 shares of ` 10 each at a premium of ` 4 per share payable as
follows
` 4 on application ` 6 on allotment
` 4 on call
Applications were received for 14,00,000 shares and pro-rata allotment was made as follows
To the applicants of 10,00,000 shares, 8,00,000 shares were issued and for the rest, 2,00,000 shares were
issued. All money due were received except the allotment and call money from Tanuj who had applied for
15,000 shares (out of the group of 10,00,000 shares). All his shares were forfeited. 7,500 of the forfeited shares
were re-issued for ` 8 per share fully paid-up.
Pass necessary journal entries for the above transactions.
o
Blue Housing Corporation Limited invited applications for 8,00,000 equity shares of ` 10 each at a premium
of ` 40 per share. The amount was payable as follows
On application — ` 35 per share (including ` 30 premium)
On allotment — ` 8 per share (including ` 4 premium)
On first and final call — Balance
Applications for 7,70,000 shares were received. Shares were allotted to all the applicants.
Lalit to whom 70,000 shares were allotted failed to pay the allotment money. His shares were forfeited
immediately after allotment.
Afterwards, the first and final call was made. Amit, the holder of 5,000 shares failed to pay the first and final
call. His shares were also forfeited. Out of the forfeited shares 10,000 shares were reissued at ` 50 per share
fully paid-up. The re-issued shares included all the shares of Amit.
Pass necessary journal entries for the above transactions in the books of Blue Housing Corporation Limited.
25. Pass the necessary journal entries for the issue of debentures in the following cases
(i) 20,000, 12% debentures of ` 50 each issued at 10% premium, repayable at 20% premium.
(ii) 15,000, 10% debentures of ` 100 each issued at 10% premium, repayable at par.
(iii) 20,000, 12% debentures of ` 50 each issued at par, repayable at 10% premium.
26. Josaf, Lucas and Jaxon were partners in a firm sharing profits in the ratio of 2 : 2 : 1. On 28th February,
2019, their firm was dissolved. On this date, firm’s balance sheet is as follows
Balance Sheet
as at 28th February, 2019
Creditors 1,60,000 Sundry Assets 2,60,000
Capital A/cs Jaxon’s Capital A/c 46,000
Josaf 1,50,000 Cash at Bank 14,000

Lucas 10,000 1,60,000

3,20,000 3,20,000
Jaxon took over the assets at ` 1,30,000. Realisation expenses ` 10,000 were paid by Josaf. Creditors of `
1,60,000 were paid by Josaf at ` 1,50,000. You are required to prepare realisation account, partner’s capital
account and cash account.
Part B
27. Superia Leasing and Finance Limited is a financial company which provides loan and invest into shares. At
the year end, company received ` 50,000 interest on loan. Where will be the amount of interest presented?
(a) Activity arising from interest will be shown in operating activity
(b) Activity arising from interest will be shown in investing activity
(c) Activity arising from interest will be shown in financing activity
28. If operating ratio of a company is 80%, which of the following will increase the operating ratio?
(i) Credit purchases of goods ` 5,000 (ii) Sales return ` 200
(iii) Payment to creditors ` 1,000 (iv) Selling expenses ` 800
(v) Cash sales ` 10,000 (vi) Purchase return ` 100
(a) (ii), (iii) and (vi) (b) (i), (ii), (iii), (iv) and (v)
(c) (i) and (ii) (d) (i), (ii) and (iv)
o
Which one of the following is not an item of securities premium reserve?
(a) Securities premium reserve (b) Share options outstanding account
(c) Revaluation reserve (d) None of these
29. A firm has inventory turnover of 3 and cost of revenue from operations is ` 1,35,000. If the inventory
turnover is increased to 5, it would result in________
(a) increase in cost of goods sold by ` 10,000
(b) decrease in inventory by ` 45,000
(c) increase in inventory by ` 27,000
(d) decrease in inventory by ` 18,000
30. Century Textiles Limited made an operating profit of ` 1,85,500 after charging depreciation of ` 31,200.
During that year, trade payables increased by ` 26,600 and inventory increased by ` 40,300. There was no
change to trade receivables. Assuming that no other factors affected it, what would be the cash generated
from operations?
(a) ` 2,25,800 (b) ` 2,43,300
(c) ` 2,03,000 (d) ` 2,30,400
o
Following is the extract from the balance sheet of Avantika Equipments Limited.
Particulars 31st March, 2020 (`) 31st March, 2019 (`)

Surplus i.e. Balance in Statement of Profit and Loss 9,00,000 6,00,000
Proposed dividend for the year 2019 ` 3,00,000 and 2020 ` 3,50,000
Calculate net profit before tax and extraordinary items.
(a) ` 2,50,000 (b) ` 3,50,000
(c) ` 6,50,000 (d) ` 6,00,000
31. (i) How the earning capacity of a business is assessed by financial statement analysis?
(ii) How does subjectivity become a limitation of financial statement analysis?
32. Draw notes to accounts for change in inventories of Pravesh Infotech Private Limited for the year ended 31st
March, 2020 from the following information and determine the amount that will be shown in the statement
of profit and loss against change in inventories of finished goods, work-in-progress
Particulars Opening Inventory (`) Closing Inventory (`)

Finished Goods 5,00,000 4,00,000
Work-in-progress 9,00,000 10,00,000
Stock-in-trade 15,00,000 14,00,000
33. From the following information, calculate any two of the following ratios
(i) Debt to equity ratio (ii) Working capital turnover ratio (iii) Return on investment
Equity share capital ` 25,000, general reserve ` 2,500, balance of statement of profit and loss after interest
and tax ` 7,500, 9% debentures ` 10,000, creditors ` 7,500, land and building ` 32,500, equipments ` 7,500,
debtors ` 7,250, cash ` 2,750, revenue from operations, i.e. sales for the year ended 31st March, 2020 was `
50,000, tax rate is 50%.
o
Assuming that debt to equity ratio is 2 : 1. State giving reasons, whether this ratio will increase or decrease
or will have no change in each one of the following cases
(i) Sale of fixed asset (book value ` 40,000) at a loss of ` 5,000.
(ii) Issue of new shares for cash.
(iii) Redemption of debentures for cash.
(iv) Declaration of final dividend.
34. From the balance sheet and information given below, prepare cash flow statement
Balance Sheet
Particulars 31st March 2020 31st March 2019
(`) (`)
Creditors 35,200 32,000
Tanvir’s Loan –– 20,000
Loan from Bank 40,000 32,000
Capital 1,22,400 1,00,000
Total 1,97,600 1,84,000
II. ASSETS
Cash 5,600 8,000
Debtors 40,000 24,000
Stock 20,000 28,000
Land 40,000 32,000
Machinery 44,000 64,000
Building 48,000 28,000
Total 1,97,600 1,84,000
During the year, machine costing ` 8,000 (Accumulated Depreciation ` 2,400) was sold for ` 4,000. The
provisions for depreciation against machinery as on 31st March, 2019 and 31st March, 2020 were ` 20,000
and ` 32,000 respectively. Net profit for the year amounting to ` 36,000.
******

Sample Paper 10
Accountancy
PART—A
1. _______is prepared on dissolution of a partnership firm to determine profit/loss on realisation of assets

and settlement of liabilities of the firm.
(a) Realisation A/c
(b) Profit and Loss A/c
(c) Revaluation A/c
(d) Profit and Loss Appropriation A/c
o
Arvind and Chetak are partners sharing profits in the ratio 3 : 2. Piyush is admitted. Arvind surrenders 1/6
from his share and Chetak surrendered 1/4th of his share. Piyush’s share of profit will be:
(a) 7/12 (b) 4/15
(c) 5/9 (d) 2/13
2. Royal Enterprises Limited forfeited 160 shares of ` 10 each, on which only application money of ` 2 was paid.
These shares were reissued for ` 9 per share. The amount transferred to capital reserve will be:
(a) ` 320 (b) ` 180
o
Maximum discount allowed on reissue of shares can be______the amount forfeited on such shares.
(a) less than
(b) equal to
(c) more than
(d) None of these
3. Which is not related to ‘Dissolution of Partnership Firm’ ?

(a) Calculation of gaining ratio (b) Payment of realisation expenses
(c) Court’s intervention (d) Settlement of Assets and Liabilities
4. In the absence of partnership deed, a partner is entitled to get interest on his capital in firm at:
(a) 6% p.a. (b) 12% p.a.
(c) 10% p.a. (d) None of these

5. Shristi Housing Limited offered ` 20,00,000 Equity Shares of ` 10 each, of these ` 19,80,000 shares were
subscribed. The amount was payable as ` 3 on application, ` 4 an allotment and balance on first call. If a
shareholder holding 3,000 shares has defaulted on first call, what is the amount of money received on first
call?
(a) ` 5,91,000 (b) ` 6,09,000
(c) ` 9,000 (d) ` 5,85,000
6. On admission of a new partner, the general reserve appearing in the books will be distributed among:
(a) All partners in new ratio.
(b) Old partners in old ratio.
(c) Old partners in sacrificing ratio.
(d) Gaining partners in gaining ratio.
7. Ankit had been allotted for 600 shares by a Jagjeet and Co. on pro rata basis which had issued two shares
for every three applied. He had paid application money of ` 3 per share and could not pay allotment money
of ` 5 per share. First and final call of ` 2 per share was not yet made by the company. His shares ‘were
forfeited. The following entry will be passed:
Equity Share Capital A/c Dr `X
To Share Forfeited A/c `Y
To Equity Share Allotment A/c `Z
Here X, Y and Z are:
(a) ` 4,800; ` 2,700; ` 2,100 respectively
(b) ` 6,000; ` 2,700; ` 3,000 respectively
(c) ` 7,200; ` 2,700; ` 4,500 respectively
(d) ` 9,000; ` 2,700; ` 4,500 respectively
8. A share of ` 100 issued at a premium of 20% is forfeited due to non-payment of final call of ` 30. The amount
transferred to Share forfeiture A/c on forfeiture of shares is:
(a) ` 30 (b) ` 70
(c) ` 90 (d) ` 50
o
Debentures cannot be issued at
(a) Par (b) Discount
(c) Premium (d) None of these
9. Assertion (A): Company has to pay interest on calls in advance @12% p.a. for amount adjusted towards
calls (if any).
Reason (R): In case of shares issued on pro-rata basis, excess money received at the time of application can
be utilised till allotment only.
10. During Dissolution of a Partnership Firm, there exists a Machinery worth ` 50,000, Furniture worth `
20,000 and creditors ` 15,000 and Patents ` 5,000 in the books of the firm. Machinery realized 80% and the
realization expenses amounted to ` 3,000. The profit or loss on realization will be:
(a) ` 18,000 Loss
(b) ` 38,000 Profit
(c) ` 23,000 Profit
(d) ` 23,000 Loss

11. The goodwill of a Raj Electricals is ` 54,000 valued at 4 years purchase of super profit. The capital employed
of firm is ` 2,00,000 and normal rate of return is 10%. The average profit of firm is:
(a) ` 33,500 (b) ` 20,000
(c) ` 24,500 (d) ` 23,500
12. Nakul, one of the partner has drawn ` 500 per month in the middle of each month during the year. Interest
on drawings is to be calculated @ 8% p.a. Interest on his drawings will be:
(a) ` 260 (b) ` 240
(c) ` 275 (d) ` 270
o
Neeraj, Suraj and Raj sharing profits in the ratio 3 : 2 : 1. Raj retired from the firm. Goodwill of the firm
is valued at ` 60,000. Raj’s share of goodwill will be contributed by Neeraj and Suraj as:
(a) ` 2,000 and ` 8,000
(b) ` 5,000 each
(c) ` 6,000 and ` 4,000
(d) None of these
13. At the time of admission of new partner Pooja, Old partners Kiran and Shalu had debtors of ` 6,20,000 and
a provision for doubtful debts of ` 20,000 in their books. As per terms of admission, assets were revalued,
and it was found that debtors worth ` 15,000 had turned bad and hence should be written off. Which journal
entry reflects the correct accounting treatment of the above situation.
(a) Revaluation A/c Dr. 15,000
To Sundry Debtors A/c 15,000
(b) Bad Debt A/c Dr. 15,000
(c) Bad Debts A/c Dr. 15,000
To Sundry Debtors 15,000
Provision for Doubtful Debts A/c Dr. 15,000
To Bad Debts A/c 15,000
(d) Bad Debt A/c Dr. 15,000
To Sundry Debtors 15,000
Revaluation A/c Dr. 15,000
To Provision for Doubtful Debts A/c 15,000
14. Vikas, Aakash and Prakash are partners, their partnership deed provides for interest on drawings at 8%
per annum. Aakash withdrew a fixed amount in the middle of every month and his interest on drawings
amounted to ` 4,800 at the end of the year. What was the amount of his monthly drawings?
(a) ` 1,20,000
(b) ` 10,000
(c) ` 48,000
(d) ` 5,000
o
Abhishek and Sachin are partners sharing profit in the ratio 3 : 1. On 31st March 2021, firm’s net profit
is ` 1,25,000. The partnership deed provided interest on capital to Abhishek and Sachin ` 15,000 and
10,000 respectively and Interest on drawings for the year amounted to ` 6000 from Abhishek and ` 4000
from Sachin. Abhishek is also entitled to commission @10% on net divisible profits. Calculate profit to be
transferred to Partners’ Capital A/cs.
(a) ` 1,10,000
(b) ` 1,07,000
(c) ` 90,000
(d) ` 1,00,000

Sagar and Daman were in partnership sharing profits and losses in the ratio 2 : 1. They admitted Aalia as
a new partner. Aalia brought ` 1,20,000 as her share of goodwill premium, which was entirely credited to
Sagar’s Capital Account. On the date of admission, goodwill of the firm was valued at ` 3,60,000 and there
was a debit balance of ` 30,000 in the Profit and Loss A/c.
15. Which of the following is the entry for distribution of premium?

(a) Dr. Sagar’s Capital A/c ` 1,20,000, Cr. Premium for Goodwill A/c ` 1,20,000
(b) Dr. Premium for Goodwill ` 1,20,000; Cr. Daman’s Capital A/c ` 1,20,000
(c) Dr. Premium of Goodwill ` 1,20,000; Cr. Sagar’s Capital A/c ` 80,000, Cr. Daman’s Capital A/c `
40,000
(d) Dr. Premium for Goodwill ` 1,20,000, Cr. Sagar’s Capital A/c ` 1,20,000
16. The new partner brings premium for goodwill to acquire her share in_________.
(a) liabilities of the firm (b) profits of the firm
(c) expenses of the firm (d) assets of the firm
17. Arjun and Virat are partners in a firm sharing profits in the ratio 2:1 Their combined capital on 1st April
2021 was ` 3,84,000. Interest on capital is agreed @ 5% p.a. The profits of the year prior to interest on capital
but after charging Virat’s salary amounted ` 45,000. Fill in the missing figures in the following accounts as
on 31st March 2022.
Profit and Loss Appropriation A/c

Dr. for the year ending 31st March 2022 Cr.
To Interest on Capital : By Net Profit 57,000
Arjun 12,000
Virat 7,200 ........
To Salary (Virat) .......
To Divisible Profit :
Arjun .......
Virat ....... .......
....... .......
Dr. Partners’ Capital A/cs Cr.

Particulars Arjun Virat Particulars Arjun Virat
(`) (`) (`) (`)
To Balance c/d ........ ........ By Balance b/d ........ ........
By Interest on Capital A/c ........ ........
By Profit and Loss ........ ........
Appropriation A/c
By Salary A/c ........
........ ........ ........ ........
18. Following is the Balance Sheet of Vivek, Hitesh and Abir as on 31st March, 2022.

Capital Accounts : Machinery 1,16,000
Vivek 1,50,000 Stock 64,000

Hitesh 80,000 Debtors 73,000

Abir 70,000 Bank 78,000
Sundry Creditors 25,000 Goodwill 30,000
Workmen’s Compensation Fund 36,000
3,61,000 3,61,000
Hitesh died on 30 June 2022. Under the terms of the deed the executor of the deceased partner was entitled
th
to the following:
(i) Amount standing to the credit of the Partner’s Capital Account.
(ii) Interest on Capital at 12% p.a.
(iii) Share of goodwill. Goodwill is valued at ` 1,80,000.
(iv) There was a claim on Workmen’s Compensation of ` 18,000.
(v) Share of profit from the closing of the last financial year to the date of death based on last year’s
profits, which was ` 93,000.
Pass the necessary Journal entries for the above settlement.
o
Divya, Monika and Devika were partners sharing profits and losses in the ratio of 2:3:2. On 1st April, 2022
they decided to change their profit sharing ratio as 2:1:1. On this date their Balance sheet showed the
following balances: General Reserve ` 40,000; Workmen Compensation Reserve ` 13,000; (Liability against
this was ` 4,000) Profit and Loss A/c (Dr. balance) ` 4,200 The assets of the firm were revalued and they
resulted in a gain of ` 8,400. The partners had decided to distribute all the Reserves and Profit and Loss
A/c but to leave the assets at their original amount. Show the effect of the above adjustments in the books
of the partnership firm by passing journal entries.
19. Gupta Trading Company has an Authorised Capital of ` 20,00,000 divided into Equity Shares of ` 10 each.
The Company invited applications for 1,00,000 shares. Applications for 95,000 shares were received. All calls
were made and all amounts were duly received except the final call of ` 4 per share on 2,000 shares. 1,000 of
the shares on which the final call was not received were forfeited. Show how the Share Capital will appear
in the Balance Sheet of the company as per Schedule III Part I of the Companies Act 2013. Also prepare
Notes to Accounts for the same.
o
Jagdish & Sons. has Securities Premium Reserve ` 36,00,000 appearing in its Balance Sheet.
You are required to suggest ways in which the Company can utilise the Securities Premium amount.
20. Lucky, Jacky and Micky were partners in a firm having capitals of ` 50,000; ` 50,000; and ` 1,00,000
respectively. Their current account balances were Lucky : ` 10,000 (Cr.); Jacky : ` 5,000 (Cr.) and Micky :
` 2,000 (Dr.). Drawings made during the year were ` 2,000, ` 3,000 and ` 1,500 respectively. According to
the partnership deed, the partners were entitled to an interest on capital 5% p.a. Micky, being the working
partner, was also entitled to a salary of ` 6,000 p.a. The profits were to be divided as follows:
(a) The first ` 20,000 in proportion to their capitals.
(b) Next ` 30,000 in the ratio of 5:3:2.
(c) Remaining profits to be shared equally.
The firm made a profit of ` 1,56,000 for the year ended 3151 March 2019 before charging any of the above
items. Prepare the Profit and Loss Appropriation A/c.
21. On 1st April 2021, Krishna Group of Limited issued 8,000 9% Debentures of ` 100 each at a discount of 6%
redeemable at a premium of 5% after five years. Pass journal entries for the issue and payment of interest
on debentures for the year ended 31st March 2022.
22. Bhakti, Pari and Tripti were partners sharing profits and losses in the ratio of 3:2:1. The firm was dissolved
on 31st March 2022. After transfer of assets and liabilities to Realisation A/c the following transactions took
place.
Give journal entries in the books on dissolution of the firm.
(a) Pari’s Loan to the firm ` 30,000 was settled at ` 28,500.
(b) Workmen Compensation Reserve – ` 40,000. A liability equal to 60% of the reserve was settled.
(c) Tripti was to receive 5% of the value of assets realised as remuneration for completing the dissolution
work and was to bear realisation expenses. Realisation expenses were ` 5,500 that was paid by Tripti.
Assets realised ` 60,000.
(d) The Balance Sheet disclosed a footnote, contingent liability for ` 5,000 in respect of a bill discounted.
The bill was received from Khushi. On the date of dissolution, Khushi was declared insolvent and was
not able to pay the amount due. The bill had to be met by the firm.
23. Raman Pharmaceutical Co. Limited invited applications for 30,000 equity shares of ` 100 each issued at a
premium of ` 20 per share. The amount were payable as follows:
On Application ` 40 (including ` 10 as premium).
On Allotment ` 40 (including ` 10 as premium).
On First call ` 20.
On Second and Final call ` 20.
Applications for 40,000 shares were received and pro-rata allotment was made on the applications for 35,000
shares. Excess application money is to be utilised towards allotment.
Ajay to whom 600 shares were allotted failed to pay the allotment money and his shares were forfeited after
allotment.
Aman who applied for 1,050 shares failed to pay the first call and his shares were forfeited after the first call.
The Second and Final call was not yet made.
Of the shares forfeited 1,000 shares were reissued as fully paid for ` 80 per share which included the whole
of Ajay’s shares.
Journalise the above transaction.
o
(a) Insta Education Private Limited purchased Land costing ` 27,00,000 from Akash Ltd. Insta Education
Private Limited paid 30% of the amount by cheque and the balance was paid by issue of Equity shares
of ` 100 each at a premium of 20%. Pass necessary journal entries.
(b) Techno Enterprises Limited forfeited 500 equity shares of ` 100 each for non-payment of first call of
` 20 and final call of ` 10 per share. State:
(i) Can these shares be reissued?
(ii) If yes, state the minimum amount at which these shares can be reissued.
(iii) If these shares were reissued at ` 50 per share fully paid-up, what will be the amount of Capital
Reserve?
24. James and Thomas are partners sharing profits and losses in the ratio of 3:2. Their Balance Sheet as at 31st
Outstanding Expenses 20,000 Cash 8,000

Workmen Compensation Fund 70,000 doubtful debts (20,000) 1,00,000
General Reserve 40,000 Investments 1,00,000
Capital Accounts: Furniture 60,000
James 2,00,000 Machinery 3,08,000
Thomas 1,60,000
6,56,000 6,56,000
On 1st April, 2022 they admitted Cooper as a partner for 1/10th share in profits which he acquired equally
from James and Thomas on the following terms:
(i) Cooper is to bring ` 50,000 as Capital and it was decided that the capital of all partners shall be in
proportion to their profit sharing ratio on the basis of Cooper’s Capital. Any deficiency or excess of
capital will be adjusted through opening Current Accounts.

(ii) The Goodwill of the firm is valued at ` 60,000 and Cooper will contribute his share of goodwill in
cash.
(iv) Outstanding expenses will be reduced to ` 6,000.
(v) Depreciate stock by 5%.
(vi) Market value of investments was ` 70,000.
Prepare Revaluation A/c and Partners’ Capital Accounts of the newly constituted firm.
o
Sohail, Hafiz and Bashir are partners sharing profits and losses in the ratio of 3:2:1. Their Balance Sheet as
on 31st March, 2022 stood as under:

Bills Payable 90,000 Cash 44,000
Creditors 36,000 Debtors 70,000
General Reserve 18,000 Less : Provision for
Investment Fluctuation Fund 4,000 doubtful debts (10,000) 60,000
Capital A/cs: Stock 80,000
Sohail 1,40,000 Investments 44,000
Hafiz 1,60,000 Furniture 48,000
Bashir 1,00,000 Machinery 2,48,000
Goodwill 24,000
5,48,000 5,48,000
On the above date Hafiz retired. It is agreed that:
(i) Goodwill of the firm will be valued at ` 90,000.
(ii) Value of Machinery and Furniture to be depreciated by 5%.
(iii) Provision for doubtful debts to be maintained at 20% on Sundry Debtors.
(iv) Out of total insurance paid, premium amounting to the extent of ` 1,000 to be treated as prepaid
insurance. This was earlier debited to the Profit and Loss Account.
(v) The total capital of the new firm is decided to be ` 2,40,000. Necessary adjustments to be made in
cash.
(vi) Hafiz will be paid 20% of the total amount due to him in cash and the balance will be transferred to
his Loan Account.
Prepare Revaluation A/c and Partners’ Capital Accounts of the reconstituted firm.
25. Shivam, Jeevan and Naveen are partners sharing profits in the ratio of 3:2:1. On 1st April, 2022 Shivam gave
a notice to retire from the firm. Jeevan and Naveen decided to share future profits, in the ratio of 2:3. The
capital accounts of Jeevan and Naveen after all adjustments showed a balance of ` 64,000 and ` 1,00,000
respectively. The total amount to be paid to Shivam was ` 1,23,000. This amount was to be paid by Jeevan
and Naveen in such a way that their capitals become proportionate to their new profit sharing ratio.
Pass necessary Journal entries for the above transactions in the books of the firm. Show your working clearly.
26. Ojas Films Private Limited dealing in manufacture ladies garments decided to manufacture masks, gloves
and other precautionary kits for people for which it required more of additional funds. Since the company
has already raised money through shares equal to its authorised capital, the company decided to raise the
additional funds through issue of ` 40,00,000; 7% debentures of ` 100 each at a discount of 6%, redeemable
at a premium of 5% after five years. The amount was payable as follows:
On Application – ` 30
On Allotment – The Balance amount
Answer the following questions on the basis of the above information:
(i) Pass journal entry for allotment of debentures.
(ii) Prepare ‘Loss on Issue of Debentures Account.’
(iii) What entry will be passed for writing off the interest on debentures?

PART—B
27. Match the following
A. Sale of Patents (1) Operating Activity

B. Profit on sale of Investments (2) Investing Activity
(3) Financing Activity
(4) Cash and Cash Equivalents
(a) A-4; B-4
(b) A-4; B-1
(c) A-3; B-1
(d) A-2; B-2
28. If fixed tangible assets whose original cost is ` 40,000 having accumulated depreciation ` 12,000 were sold
for ` 34,000 then while preparing cash flow statement its effect on cash flow will be:
(a) Cash flow from financing activities ` 6,000
(b) Cash flow from investing activities ` 34,000
(c) Cash flow from investing activities ` 6,000
(d) Cash flow from financing activities ` 34,000
o
While preparing cash flow statement by indirect method, which of the following items are added back to
profit during the year to arrive at operating profit:
(a) Increase in inventory
(b) Decrease in outstanding expenses
(c) Transfer to general reserve
(d) Increase in creditors
29. Gross Profit Ratio of a Company is 25%. Cost of revenue from operations are 3/4th of revenue from
operations. If revenue from operations is ` 60,00,000, the Gross Profit of the company will be:
(a) ` 15,00,000
(b) ` 25,00,000
(c) ` 11,25,000
(d) ` 45,00,000
30. Calls-in-advance appears in a company’s Balance sheet under:

(a) Reserves and surplus
(b) Current liabilities
(c) Share capital
(d) Long-term Provision
o
Determine Operating Ratio, if Operating Expenses is ` 60,000, Revenue from Operations is ` 9,00,000 and
Cost of Revenue from operations is ` 6,60,000.
(a) 20% (b) 80%
(c) 11% (d) 15%
31. (a) Calculate Interest Coverage Ratio from the following information.
Net Profit after Interest and Tax ` 9,60,000

12% Debentures ` 20,00,000

10% Loan from IDBI ` 12,00,000
Tax Rate 40%
(b) Gross Profit ratio of a company was 25%. Its credit revenue from operations were ` 18,00,000 and its
cash revenue from operations were 10% of the total revenue from operations. If the indirect expenses
of the company were ` 50,000 calculate its net profit ratio.
32. Distinguish between Horizontal Analysis and Vertical Analysis.
33. How are the following items represented in a Company’s Balance Sheet?
(i) Debit balance in Statement of Profit and Loss
(ii) Interest accrued and due on Debentures
(iii) Capital Advances
(iv) Computer Software under development
(v) Bank overdraft
(vi) Interest accrued on Investment
(vii) Prepaid Rent
(viii) Outstanding Salary
o
(a) What is meant by Financial Statement Analysis?
(b) The Quick Ratio of a company is 2 : 1. State with reason, whether the following transaction will
increase, decrease or not change in the quick ratio.
(i) Insurance Premium paid in advance ` 2,000.
(ii) Purchase of loose tools of ` 5,100.
34. Following is the Balance Sheet of Sundram Packaging Private Limited as at March 31, 2021 and 2022.

No. (`) (`)
(a) Share Capital 24,00,000 20,00,000
Long-term Borrowings 4,00,000 3,00,000
(a) Short-term Borrowing (Bank Overdraft) 40,000 20,000
(b) Trade Payables 70,000 30,000
(b) Provisions for Taxation 2,50,000 1,50,000
Total 40,60,000 32,00,000
II. ASSETS
1. Non-Current Assets
(a) Property, Plant and Equipments and Intangible Assets:
(i) Property, Plant and Equipments: Machinery 2 21,40,000 16,20,000
2. Current Assets :
(a) Inventories 5,60,000 3,50,000
(c) Cash and Cash Equivalents 3,90,000 3,00,000

Total 40,60,000 32,00,000
Notes to Accounts:

2. Property, Plant and Equipments
Machinery 23,30,000 17,70,000
Less: Accumulated Depreciation (1,90,000) (1,50,000)
21,40,000 16,20,000
3 Intangible Assets
Goodwill 3,20,000 4,00,000
Prepare a Cash Flow Statement after taking into account the following adjustment:
Proposed dividend as on 31st March 2021 and 2022 are ` 2,10,000 and ` 2,50,000 respectively.
******

Sample Paper 11
Accountancy
PART—A
1. Vikas and Suhas were partners in a firm. They share profits in the ratio of 2 : 3. Their capital account
balance as on 1st April, 2020 was ` 5,00,000 and ` 10,00,000. Additional capital introduced by them, Vikas
= ` 1,50,000, Suhas = ` 1,00,000. Entry for the additional capital introduced is
Bank A/c Dr X
To Vikas’s Capital A/c Y
To Suhas’s Capital A/c Z
Here X, Y, Z are
(a) ` 5,00,000, ` 3,00,000, ` 2,00,000 (b) ` 5,00,000, ` 2,00,000, ` 3,00,000
(c) ` 2,50,000, ` 1,50,000, ` 1,00,000 (d) ` 2,50,000, ` 1,00,000, ` 1,50,000
2. Assertion (A): Partnership firm has no separate legal entity.

Reason (R): Partnership firm is affected by the retirement, death or insolvency of its partners.
Alternatives
(A)
3. Kartik has given guarantee to Ritik for minimum ` 5,000 profit. At year end, the firm suffered loss and
Ritik’s share in the loss was ` 1,000. Calculate amount of deficiency to be borne by Kartik.
(a) ` 5,000 (b) ` 6,000
4. Debentures are issued at par with the condition that redemption will also be at par. Journalise it.
(a) Debenture Application and Allotment A/c Dr
To X% Debentures A/c
(b) Bank A/c Dr
To Debenture Application and Allotment A/c
5. If the debit side of realisation account exceeds the credit side, then it signifies
(a) loss on realisation (b) profit on realisation

(c) neither profit nor loss (d) None of these
o
Need for valuation of goodwill arises for a partnership firm in which of the following situation(s)?
(i) At the time of change in profit sharing ratio
(ii) At the time of death/retirement of a partner
(iii) At the time of admission of a partner
(a) (i) and (ii) (b) (ii) and (iii)
(c) Only (i) (d) All of these
6. On an equity share of ` 50, the company has called-up ` 40 but only ` 30 have been received by the company
and the share is forfeited. In this case, share capital account should be debited by
(a) ` 30 (b) ` 10
(c) ` 50 (d) ` 40
7. Ramesh and Jagesh are sharing profits and losses in the ratio of 3 : 2. Aklesh is admitted with 1/5th share
in profits of the firm which he gets entirely from Ramesh. Find out the new profit sharing ratio.
(a) 8 : 12 : 5 (b) 2 : 2 : 1
(c) 2 : 2 : 2 (d) 12 : 8 : 5
o
Sunil and Kapil are partners sharing profits and losses in the ratio of 5 : 3. On admission, Anil brings `
35,000 as cash and ` 21,500 against goodwill. New profit ratio between Sunil, Kapil, Anil is 7 : 5 : 4. The
sacrificing ratio of Sunil and Kapil will be
(a) 1 : 3 (b) 4 : 5
(c) 5 : 9 (d) 3 : 1
8. What will be the journal entry for shares re-issued at discount?
(a) Share Capital A/c Dr.

To Bank A/c
To Share Forfeiture A/c
(b) Share Capital A/c Dr.
Securities Premium Reserve A/c Dr.
To Bank A/c
(c) Bank A/c Dr.
To Share Capital A/c
To Securities Premium Reserve A/c
(d) Bank A/c Dr.
Share Forfeiture A/c Dr.
To Share Capital A/c
9. Gautam and Padam contribute ` 50,000 and ` 30,000 respectively in a partnership firm by way of capital
on which they agree to allow interest @ 8% p.a. Their profit or loss sharing ratio is 3 : 2. The profit at the
end of the year was ` 1,400 before allowing interest on capital. If there is a clear agreement that interest on
capital will be paid even in case of loss, then Padam’s share of profit or loss will be
(a) loss ` 3,000 (b) loss ` 2,000
(c) profit ` 3,000 (d) profit ` 2,000
10. State the order of share capitals of the following types according to the Schedule III, Part I of the companies
balance sheet.
(i) Subscribed share capital

(ii) Authorised/Registered share capital

(iii) Issued share capital
(a) (ii) - (iii) - (i) (b) (iii) - (ii) - (i)
(c) (i) - (ii) - (iii) (d) No specified order
o
Subscribed capital_______
(a) is that part of subscribed capital which has been called-up on the shares
(b) is that part of subscribed capital which has not yet been called-up on the shares
(c) is that part of authorised capital which is issued to the public for subscription
(d) is that part of issued capital which has been actually subscribed by the public
11. Praveen and Naveen are partners sharing profits in the ratio of 3.2. They admit Fardeen as a new partner.
After his admission, the profit sharing ratio becomes 5 : 5 : 3. On the date of Fardeen’s admission, goodwill
of the firm is valued at ` 13,00,000. The amount of goodwill brought in by Fardeen will be
(a) ` 10,00,000 (b) ` 3,00,000
(c) ` 5,00,000 (d) ` 13,00,000
12. If vendors are issued fully paid shares of ` 62,500 in consideration of net assets of ` 75,000, the balance
(a) ` 12,500 will be credited to goodwill account
(b) ` 12,500 will be credited to statement of profit and loss
(c) ` 12,500 will be credited to capital reserve account
(d) ` 12,500 will be credited to securities premium reserve account
o
A company has issued 5,000 equity shares of ` 10 each and it has called the total nominal (face) value. It
has received the total amount, except the final call of ` 3 on 250 equity shares.
Equity shares not received will be shown as_______
(a) 250 equity shares will be shown as issued share capital
(b) 250 equity shares will be shown as subscribed and fully paid up
(c) 250 equity shares will be shown as subscribed but not fully paid up
13. Yash, Harsh and Kalpit are partners sharing profits and losses in the ratio of 2 : 2 : 1. Kalpit retires on 31st
December, 2019. Extract of the balance sheet of the firm as at 31st December, 2019 is as follows

Land and Building 40,00,000
If the land and building is revalued at ` 48,00,000 how will you show the effect of change in value of land
and building in revaluation account?
(a) Land and Building A/c ` 48,00,000 (Cr)
(b) Land and Building A/c ` 48,00,000 (Dr)
(c) Land and Building A/c ` 8,00,000 (Cr)
(d) Land and Building A/c ` 8,00,000 (Dr)
14. Realisation account is prepared at the time of_______

(a) change in profit sharing ratio (b) dissolution of a firm
(c) dissolution of partnership only (d) admission of a partner
o
Existing goodwill written-off at the time of admission of a partner, is transferred to partners’ capital
accounts in their_______
(a) new profit sharing ratio (b) sacrificing ratio
(c) gaining ratio (d) old profit sharing ratio

Rakhi, Sakhi and Pakhi were partners in a firm trading in electrical appliances. They were sharing profits
in the ratio of 5 : 3 : 2. Their fixed capitals on 1st April, 2020 were ` 6,00,000, ` 8,00,000 and ` 16,00,000
respectively. After the flood in Uttarakhand, all partners decided to help the flood victims personally. For
this, Rakhi withdrew ` 40,000 from the firm on 15th September, 2020. On the same date, Sakhi instead of
withdrawing cash from the firm, took some appliances amounting to ` 48,000 from the firm and distributed
those to the flood victims. On the other hand, Pakhi withdrew ` 4,00,000 from her capital on 1st January,
2021 and provided a mobile medical van in the flood affected area. The partnership deed provides for
charging interest on drawings @ 6% per annum. Interest on capital was a allowed @ 10%.
15. Interest on Rakhi’s capital will be

(a) ` 1,00,000 (b) ` 1,60,000
(c) ` 60,000 (d) ` 80,000
16. Interest on Sakhi’s drawings will be

(a) ` 1,560 (b) ` 2,880
(c) ` 1,300 (d) ` 1,440
17. Vijay, Bhavesh and Anoop are partners sharing profits in the ratio 6:3:1 and they decided to share future
profits and losses in the ratio 5:3:2 with the effect from 1st April 2020. Following items appear in the Balance
Sheet as at 31st March 2020.
`
General Reserve 45,000
Profit and Loss Account (Dr.) 12,000
Advertisement Suspense A/c 18,000
Pass necessary journal entries to give effect to the change in profit sharing ratio.
18. Arun, Daksh and Ishan are partners in a firm sharing profits in their capital ratio. On 1st April, 2019 their
capital stood at ` 5,00,000, ` 3,00,000 and ` 2,00,000 respectively. Partners are entitled to interest on capital
@ 5% p.a.; Salary to Daksh @ ` 1,000 per month and a commission of ` 5,000 to Ishan as per the provisions
of partnership deed. Daksh’s share of profit, including interest on capital but excluding salary is guaranteed
by Arun at not less than ` 60,000 p.a. The profits of the firm for the year was ` 2,00,000. Prepare Profit and
Loss Appropriation A/c for the year ended 31st March 2020.
o
Sneha, Preeti and Rakesh are partners in a firm sharing profits in the ratio 2:2:1. Following adjustments of
revaluation of assets and liabilities and goodwill is agreed upon Rakesh’s retirement:
(a) To write off Bad Debts amounting to ` 5,000. In the books of accounts, Debtors appear at ` 80,000
and Provision for Doubtful debts at ` 2,000.
(b) A bills receivable amounting to ` 8,000 discounted from the bank is dishonoured.
(c) Insurance premium amounting to ` 16,000 was debited to Profit and Loss Account, of which ` 4,000
is related to the next year.
(d) Goodwill of the firm is valued at ` 60,000.
Pass the necessary journal entries for the above adjustments.
19. On 1st April, 2021, Future Industries Limited issued 10,000, 9% debentures of ` 100 each at a discount of
10% redeemable at par after six years:
Interest is paid annually on 31st March every year.
Pass necessary journal entries for issue and interest for the year ended 31st March 2022.
o
What are the options for a company to deal with over subscription of share applications?
20. Veena, Renu and Sonam were partners in a firm sharing profits and losses in the ratio of 2 : 3 : 1. With
effect from 1st April, 2018 they decided to share future profits and losses in the ratio of 3 : 2 : 1. On that
date their Balance Sheet showed a debit balance of ` 24,000 in Profit and Loss Account and a balance of `

1,44,000 in General Reserve. It was also agreed that:

(a) The goodwill of the firm be valued at ` 1,80,000.
(b) The land (having book value of ` 3,00,000) will be valued at ` 4,80,000.
Pass the necessary journal entries for the above changes.
21. Max Services Limited has an authorised capital of 11,000 equity shares of ` 100 each. It issued 5,000 equity
shares to public for subscription payable ` 30 on application, ` 30 on allotment and ` 20 on first call and
balance on final call. The whole of the issue was called for by the company and all the money was duly
received except first and final call money on 500 shares and these shares were forfeited. Out of the forfeited
shares, 300 shares were reissued for ` 110 each fully paid up.
Show Share Capital and Reserves and Surplus in the Balance Sheet of the company as per Schedule III of
Companies Act, 2013 as at 31st March, 2022.
22. John, Johny and Janardhan are partners in a firm sharing profits in the ratio 3 : 2 : 1. Their Balance Sheet
as at 31st March 2022 stood at:

(`)
Creditors 2,80,000 Cash at Bank 1,45,000
General Reserve 30,000 Debtors 1,90,000
Workmen Compensation Reserve 60,000 Stock 1,75,000
Capital A/cs: Investments 2,50,000
John 3,00,000 Buildings 3,10,000
Johny 2,20,000
Janardhan 1,80,000 7,00,000
10,70,000 10,70,000
Johny died on 30 June 2022 and as per deed his executors are entitled to:
th
(a) Amount standing to the credit of his capital account and interest thereon @ 10% p.a.
(b) Share of profits for the intervening period will be based on the sales during that period and average of
three year’s profits earned in the past. Sales for the period were ` 12,00,000. The rate of profit during
past three years had been 10% on sales.
(c) Share of goodwill and goodwill of the firm is valued at ` 4,32,000.
Pass necessary journal entries to transfer amount due to Johny to his executor.
23. Sangam Handicrafts Limited invited application for issuing 80,000 equity shares of ` 10 each at a premium
of ` 2.50 each. The amount was payable as follows:
On Allotment ` 4.50 per share (including premium).
On First and Final Call balance amount.
Applications for 1,70,000 shares were received. Applications for 10,000 shares were rejected and money
received from them was refunded. Shares were allotted on pro-rata basis to the remaining applicants. Excess
money received with applications was adjusted towards sum due on allotment. Anju who had applied for
2,400 shares failed to pay the allotment and call money and Manju who was allotted 2,000 shares failed to
the money due on call. All the shares on which money was due were forfeited. 2,400 forfeited shares were
reissued @ ` 8 per share fully paid up, including all shares of Anju.
Pass the necessary journal entries in the books of the company for the above transactions.
o
Platina Limited invited applications for issuing 60,000 shares of ` 10 each at a premium of ` 2 per share.
The amount was payable as follows:
On Application: ` 3 per share

On Allotment: ` 5 per share (including premium)
On First and Final Call: Balance

Applications were received for 92,000 shares. Allotment was made on the following basis:
(a) To applicants for 40,000 shares – Full
(b) To applicants for 50,000 shares – 40%
(c) To applicants for 2,000 shares – Nil
` 1,90,000 was realised on account of allotment (excluding the amount carried from application money)
and ` 2,12,000 on account of call. The directors decided to forfeit shares of those applicants to whom full
allotment was made and on which both allotment and call money was overdue. 50% of the forfeited shares
were reissued as fully paid up at ` 8 per share.
Pass the journal entries to record the above transactions in the books of the company.
24. Pankaj and Sanjay were partners in a firm. They decided to dissolve the firm. Pankaj was deputed to realise
the assets and to pay the liabilities and bear the realisation expenses. He was paid ` 1,000 as commission for
his services. Actual expenses of dissolution paid by Pankaj were ` 1,500.
Further, following was agreed upon:
(a) Stock is overvalued by ` 1,000. Pankaj took away stock at the market value and agreed to pay Mrs.
Pankaj’s loan.
(b) Sanjay took away half of the investments at 10% discount and an old typewriter which had been
written off completely from the books for ` 300.
(c) Creditors and bills payable were due on an average basis of two month after 31st March, but they were
paid immediately on 31st March, at a discount of 3% p.a.
(d) Plant was undervalued by 20% and realised at actual value, other assets realised-Building ` 40,000,
Debtors ` 19,000, Goodwill ` 6,000 and remaining investment ` 4,500.
Complete the given accounts of the firm.

(`) (`)
To Stock A/c 6,000 By Provision for Doubtful Debts 2,000
To Investments A/c 10,000 By Sundry Creditors A/c 30,000
To Debtors A/c 20,000 By Bills Payable A/c 8,000
To Plant A/c 20,000 By Mrs. Sanjay’s Loan A/c 10,000
To Building A/c 15,000 By Mrs. Pankaj’s Loan 5,000
To Goodwill A/c 4,000 By Investment Fluctuation Reserve 1,000
A/c
To Pankaj’s Capital A/c: By Pankaj Capital A/c (stock) ..........
Mrs Pankaj’s Loan .......... By Sanjay’s Capital A/c:
Commission 1,000 .......... Investments ..........
To Bank A/c: Typewriter .......... ..........
Creditors .......... By Bank A/c:
.................... .......... .......... Debtors ..........
Mrs Sanjay’s Loan 10,000 .......... Plant ..........
To Profit t/f to: Building ..........
Pankaj’s Capital A/c .......... Goodwill ..........
Sanjay’s Capital A/c .......... .......... Investments .......... ..........
........... ...........
Dr. Partners’ Capital A/cs

Particulars Pankaj Sanjay Particulars Pankaj Sanjay
(`) (`) (`) (`)
............................ .......... .......... By Balance b/d 10,000 10,000

To Advertisement By General Reserve A/c .......... 5,000

Suspense A/c 1,250 1,250 ........................ ..........
............................ .......... .......... ........................ .......... ..........
36,745 30,745 36,745 30,745
Dr. Bank A/c Cr.

To Balance b/d 8,500 By Realisation A/c 47,810
To Realisation A/c ......... ............................. .........
............................. .........
1,03,000 1,03,000
o
Nisha, Mahak and Shilpa are partners sharing profits and losses in the ratio of 5:3:2. Their Balance Sheet
as on 31st March, 2019 stood as under:

General Reserve 22,000 Less : Provision for doubtful debts (3,000) 22,000
Captial A/c: Stock 18,000
Nisha 70,000 Investments 30,000
Mahak 50,000 Furniture 20,000
Shilpa 40,000 Machinery 70,000
Goodwill 30,000
2,12,000 2,12,000
On the above date Mahak retired and the terms of retirement were:
(i) Mahak sells her share of goodwill to Nisha for ` 4,000 and to Shilpa ` 2,000.
(iii) Provision for doubtful debts to be increased by 525.
(vii) The continuing partners agreed to pay ` 20,000 in cash on retirement to Mahak to be contributed in
their new profit sharing ratio. The balance to be treated as Loan.
(viii) The total capital of the new firm is decided to be ` 1,50,000. Necessary adjustments to be made by
opening Current Accounts.
Prepare Revaluation A/c, Partners’ Capital Accounts and Balance Sheet of the new firm after Mahak’s
retirement.
25. Akhil, Vijay and Vipin were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. On 31st
March, 2022 their Balance Sheet was as follows:
Balance Sheet of Akhil, Vijay and Vipin as on 31.03.2022

Creditors 3,00,000 Fixed Assets 4,50,000
General Reserve 1,50,000 Stock 1,50,000
Capitals: Debtors 2,00,000

Akhil 2,00,000 Bank 1,50,000

Vijay 2,00,000
Vipin 1,00,000 5,00,000
9,50,000 9,50,000
Vijay died on 12.6.2022. According to the partnership deed, the legal representatives of the deceased partner
were entitled to the following:
(i) Balance in his Capital Account.
(ii) Interest on Capital @ 12% p.a.
(iii) Share of goodwill. Goodwill of the firm on Vijay’s death was valued at ` 60,000.
(iv) Share in the profits of the firm till the date of his death, calculated on the basis of last year’s profit.
The profit of the firm for the year ended 31.3.2022 was ` 5,00,000.
Prepare Vijay’s Capital Account to be presented to his representatives.
26. Oracle Systems Limited issued ` 10,00,000 8% debentures as follows:

(i) Sundry Subscribers for cash at 90%. ` 5,50,000
(ii) Vendor of Machinery for ` 2,00,000 in satisfaction of his claim ` 2,00,000
(iii) Bankers as collateral security for a bank loan worth ` 20,00,000
for which principal security is Business Premises worth ` 22,50,000 ` 2,50,000
The issue (i) and (ii) are redeemable after 5 years at 10% premium. Pass necessary journal entries in the
above cases.
PART—B
27. Securities premium reserve is shown on the liabilities side in the balance sheet under the head.
(a) Share Capital (b) Current Liabilities
(c) Reserve and Surplus (d) General Reserve
o
Which of the following does not indicate long-term financial solvency?
(a) Debt ratio (b) Liquidity ratio
(c) Equity ratio (d) Debt-equity ratio
28. Calculate operating ratio, if Cost of revenue from operations ` 50,000, Revenue from operations ` 1,50,000
and Operating expenses ` 20,000.
(a) 46.7% (b) 48.1%
(c) 42.2% (d) 45%
29. Which of the following is not an investing cash flow?

(a) Sale of 2,500 shares (held as investment) for ` 15 each
(b) Purchase of equipment for ` 500 cash
(c) Purchase of marketable securities for ` 25,000 cash
(d) Sale of land for ` 28,000 cash
o
Paid ` 4,00,000 to acquire shares in Vasundhara Enterprises Limited and received a dividend of ` 40,000
after acquisition. These transactions will result in
(a) Cash generated from financing activities ` 4,40,000
(b) Cash used in investing activities ` 3,60,000
(c) Cash generated from financing activities ` 3,60,000
(d) Cash used in investing activities ` 4,00,000

30. From the following information, calculate the amount of cash flow from financing activities.

Securities Premium Reserve 5,20,000 5,00,000
12% Debentures 2,00,000 3,00,000
Interest paid on debentures ` 36,000.
(a) ` 2,20,000 (b) ` 84,000
(c) ` 1,36,000 (d) ` 36,000
31. Under which major heads the following items will appear in the Statement of Profit and Loss of a Company?
(i) Sale of scrap material (ii) Income from interest on investment
(iii) Gratuity paid (iv) Interest paid on Debentures
(v) Goodwill written off (vi) Selling and Distribution Expenses
32. On the basis of the given information, calculate Operating Ratio.
`
Cash Revenue from Operations 4,00,000
Credit Revenue from Operations 2,00,000
Cost of Revenue from Operations 3,90,000
Depreciation 3,000
Purchase of stock-in-trade 40,000
33. The proprietary ratio of Essel Industries Limited is 0.80: 1.

State with reasons whether the following transactions will increase, decrease or not change the proprietary
ratio:
(i) Obtained a loan from bank ` 2,00,000 payable after five years.
(ii) Purchased machinery for cash ` 75,000.
(iii) Redeemed 5% redeemable preference shares ` 1,00,000.
(iv) Issued equity shares to the vendors of machinery purchased for ` 4,00,000.
o
From the given information calculate the following:
(i) Cost of revenue from operations
(ii) Opening and closing inventory
(iii) Quick Assets
(iv) Current Assets
Information:
Inventory turnover ratio 6 times, Inventory at the end is ` 6,000 more than the inventory in the beginning,
Revenue from operations (all credits) ` 2,40,000, Gross profit 25% on cost, Current liabilities ` 80,000, Quick
ratio 0.80 : 1.
34. From the following Balance Sheets of Time Technoplast Limited as at 31st March 2021 and 31st March 2022,
prepare Cash Flow Statement.

No. (`) (`)
(a) Share Capital 5,50,000 4,20,000


Long-term Borrowings 2 3,20,000 4,00,000
(a) Short term Borrowings 3 50,000 20,000
(b) Trade Payables 80,000 1,05,000
(c) Short-term Provisions 25,000 18,000
Total 11,00,000 10,23,000
II. ASSETS
(a) Property, Plant and Equipments and Intangible Assets
Property, Plant and Equipment – Fixed Assets 5 3,70,000 2,81,000
(b) Non-Current Investments 1,50,000 1,90,000
2. Current Assets:
(c) Cash and Cash Equivalents 1,80,000 72,000
Total 11,00,000 10,23,000
Notes to Accounts:

Surplus i.e. Balance in Statement of Profit and Loss 75,000 60,000
Bank Loan 3,20,000 4,00,000
3. Short-term Borrowings:
Bank overdraft 50,000 20,000
4. Short-term Provisions:
Provision for Taxation 25,000 18,000
5. Property, Plant and Equipments – Fixed Assets:
Building 1,50,000 1,80,000
Machinery 2,20,000 1,01,000
3,70,000 2,81,000
1. During the year, tax paid ` 24,000.
2. Depreciation provided on Building and Machinery amounted to ` 30,000 and ` 32,000 respectively.
3. A machine of book value ` 30,000 was sold for ` 9,000.
4. Proposed dividend of current year and previous year were ` 12,000 and ` 18,000 respectively.
******

Sample Paper 12
Accountancy
PART—A
4 4 1
1. Gopal, Tushar and Mohit are partners sharing profits and losses in the ratio of 10 , 10 and 5 . Tushar
retires from the firm, Gopal and Mohit decided to share future profits and losses in the ratio of 3 : 2.
Calculate gaining ratio.
(a) 3 : 2 (b) 2 : 1
(c) 1 : 2 (d) 1 : 1
2. Golu and Sonu are partners sharing profits and losses in the ratio of 3 : 2. Chanu is admitted for 1/5th share
in profits of the firm which he gets entirely from Golu. Find out the new profit sharing ratio.
(a) 8 : 12 : 5
(b) 2 : 2 : 1
(c) 2 : 2 : 2
(d) 12 : 8 : 5
3. Dalajit and Manjeet are partners sharing profits equally. Interest on Dalajit’s drawings is ` 3,250 and
Manjeet’s drawings is ` 2,750. 10% of distributable profit is transferred to reserve fund. Profit for the year
is ` 10,00,000. Amount transferred to reserve fund will be
(a) ` 1,00,300 (b) ` 99,400
(c) ` 1,00,000 (d) ` 1,00,600
4. With context to debit side of partners’ current account, pick the odd one out.
(a) Interest on Drawings
(b) Salary
(c) Drawings
(d) None of these
o
At the time of change in profit sharing ratio, workmen compensation reserve existing in the balance sheet
against which no liabilities exist, is transferred to capital account of partners in their______.
(a) sacrificing ratio
(b) gaining ratio
(c) old profit sharing ratio
(d) new profit sharing ratio

5. Net profit is always taken after_______in the profit and loss appropriation account.
(a) manager’s commission
(b) interest on partner’s loan
(d) None of these
o
When partners’ capital accounts are fixed, which one of the following items will be written in the partner’s
capital account?
(i) Partner’s drawings
(ii) Additional capital introduced by the partner in the firm
(iii) Loan taken by partner from the firm
(iv) Loan advanced by partner to the firm
(a) Only (ii)
(b) (i) and (iii)
(c) (i) and (ii)
(d) (iii) and (iv)
6. Diwakar, a director of the company proposed in a board meeting that to inculcate the habit of savings
among people, he wanted to bring a special issue of shares. His proposal was accepted by the company. The
company issued 35,000 shares of ` 100 each, payable ` 30 on application, ` 50 on allotment and ` 20 on call.
Prabhakar, a shareholder holding 25 shares could not pay his call money and Sudhakar another shareholder
holding 30 shares paid the call money with allotment. Prabhakar, paid the amount due to him after four
months explaining the reason for this delay, the company did not charge any interest from him. Calculate
the amount received by the company on allotment.
(a) ` 17,50,600 (b) ` 24,50,000
(c) ` 17,50,000 (d) ` 10,50,000
7. Sagar, Javed and Happy are partners sharing profits in the ratio of 3 : 2 : 1. They agree to admit Sahil into
the firm. Sagar, Javed and. Happy agreed to give 1/3 rd, 1/6 th and 1/9 th share of their profit. The share
of profit of Sahil will be
(a) 1/10
(b) 12/54
(c) 11/54
(d) 13/54
8. Assertion (A): Partnership agreement in writing is considered as desirable.

Reason (R): Written partnership agreement serves as a evidence in the court of law.
Alternatives
(A)
Assertion (A)
9. Total capital specified in capital clause is ` 50,00,000 which is divided in 35,000 equity shares of ` 100
each and 15,000, 10% preference shares of ` 100 each. The company issued 10,000 equity shares and 5,000
preference shares. The public subscribed for 9,000 equity shares and 4,500 preference shares out of the
issued shares. What will be the subscribed capital amount?
(a) ` 9,00,000
(b) ` 50,00,000
(c) ` 13,50,000
(d) ` 50,000

10. Issued 10,000 shares of ` 100 each to the Ghanshyam Food Limited @10% premium and paid ` 2,00,000 in
cash for a consideration of running business purchased. Journalise this transaction.
(a) Ghanshyam Food Limited Dr. 13,00,000

To Cash A/c 13,00,000
(b) Share Capital A/c Dr. 10,00,000
Securities Premium Reserve A/c Dr. 1,00,000
Cash A/c Dr. 2,00,000
To Ghanshyam Food Limited 13,00,000
(c) Ghanshyam Food Limited Dr. 13,00,000
To Share Capital A/c 10,00,000
To Securities Premium Reserve A/c 1,00,000
To Cash A/c 2,00,000
(d) Ghanshyam Food Limited Dr. 13,00,000
To Share Capital A/c 13,00,000
11. Vandana Cconsumer Products Limited has purchased an asset costing ` 22,00,000. Vendor issued 10%
debentures of ` 100 each at 10% premium as consideration against asset purchased. Calculate number of
debentures to be issued.
(a) 20,000 debentures (b) 26,000 debentures
(c) 22,000 debentures (d) 24,000 debentures
o
Shree Electronics Limited called first call money of ` 3 per share on its 50,000 shares. A shareholder holding
2,750 shares failed to pay the amount. How much amount will be due on first call?
(a) ` 1,50,000 (b) ` 1,47,750
(c) ` 1,41,750 (d) ` 1,57,000
12. Total capital employed in the firm is ` 4,00,000, reasonable rate of return is 15% and profit for the year is
` 6,00,000. The value of goodwill of the firm as per capitalisation method would be
(a) ` 36,00,000 (b) ` 41,00,000
(c) ` 21,00,000 (d) ` 6,00,000
13. During the year 2019-20, Vidhata Industries Limited issued 12% debentures of ` 100 each as per the details
given. A machine was purchased for ` 2,18,500. The Vendor was paid by the issue of 1,900 debentures at a
premium of 15%, to be redeemed at par. The entry for the payment will be
(a) Vendor’s A/c Dr. 2,18,500

To Securities Premium Reserve A/c 28,500
(b) Vendor A/c Dr. 2,18,500
To Machinery A/c 2,18,500
(c) 12% Debentures A/c Dr. 1,90,000
To Vendor’s A/c 2,18,500
(d) Machinery A/c Dr. 2,18,500
To Vendor’s A/c 2,18,500

On 28th February, 2020, the first call of ` 2 per share became due on 25,000 equity shares allotted by Zerox
Enterprises Limited. Jack, a holder of 500 shares did not pay the first call money. Mack, a holder of 375
shares paid the second and final call of ` 4 per share along with the first call.
Journal entry for the amount received will be_______
(a) Bank A/c Dr. 50,500

Calls-in-advance A/c Dr. 1,000
To Calls-in-arrear A/c 1,500
(b) Equity Share First Call A/c Dr. 50,000
Calls-in-arrear A/c Dr. 1,000
To Bank A/c 49,500
(c) Bank A/c Dr. 50,500
Calls-in-arrear A/c Dr. 1,000
14. Peter and Daneal are partners in a firm sharing profits and losses in the ratio of 5 : 7 respectively. Their
balance sheet shows creditors at ` 1,00,000. If creditors amounting to ` 12,000 are to be written-off as they
are not likely to be claimed, what will be the new value of creditors to be shown in new balance sheet?
(a) ` 1,12,000 (b) ` 88,000
o
Atif and Latif are partners sharing profits and losses as 2 : 1. Aabid is admitted and profit sharing ratio
becomes 4 : 3 : 2. Goodwill is valued at ` 94,500. Aabid brings required goodwill in cash. Goodwill amount
will be credited to
(a) Atif ` 21,000
(b) Atif ` 94,500
(c) Atif ` 14,000 and Latif ` 7,000
(d) Atif ` 12,000 and Latif ` 9,000
Harry and Terry are partners in a firm. Harry gets commission of 10% on the net profits before charging
any commission and Harry gets are commission of 10% on the net profits after charging all commission.
Profit and Loss Appropriation A/c

(`) (`)
To Harry’s Commission A/c 1,65,000 By Profit and Loss A/c (Net .........
profits)
To Terry’s Commission A/c .........
To Profit Transferred to
Harry’s Capital A/c .........
Terry’s Capital A/c ......... .........
......... .........

15. What will be the net profit before charging commission?

(a) ` 16,50,000 (b) ` 12,65,000
(c) ` 18,00,000 (d) ` 13,50,000
16. What will be Terry’s Commission ?

(a) ` 1,48,500
(b) ` 1,50,000
(c) ` 1,65,000
(d) ` 1,35,000
17. Jack, Rony and Danny are partners. Their capitals as on 1st April, 2021 were Jack ` 1,00,000, Rony `
2,00,000 and Danny ` 3,00,000. Profits for the year 2020-2021 amounting to ` 1,20,000 were distributed in
the ratio of capitals without providing for the following
(i) Interest on capitals Jack ` 10,000, Rony ` 20,000, Danny ` 30,000.
(ii) Interest on drawings Jack ` 6,000, Rony ` 10,000, Danny ` 16,000.
(iii) Jack’s salary of ` 2,000 per month and Rony’s commission of ` 8,000.
The partnership deed was silent as to the sharing of profits and losses. Pass the necessary single adjusting
entry.
18. Naresh Exports Limited issued 60,000, 15% debentures of ` 10 each credited as fully paid to the promoters
for their services and issued 15,000, 15% debentures of ` 10 each credited as fully paid to the underwriters
for the underwriting services. Journalise these transactions.
o
City Corporation Limited issued 40,000 equity shares of ` 10 each at a premium of ` 2 payable alongwith
the application. All the shares were applied and duly allotted. Pass necessary journal entries.
19. The partnership agreement between Girraj and Neeraj provides that.
(i) Profits will be shared equally.
(ii) Girraj will be allowed a salary of ` 400 per month.
(iii) Neeraj who manages the sales department will be allowed a commission equal to 10% of the net
profits, after allowing Girraj’s salary.
(iv) 7% interest will be allowed on partners’ fixed capital.
(v) 5% interest will be charged on partners’ annual drawings.
(vi) The fixed capitals of Girraj and Neeraj are ` 1,00,000 and ` 80,000 respectively. Their annual drawings
were ` 16,000 and ` 14,000 respectively. The net profit for the year ending 31st March, 2006 amounted
to ` 40,000.
Prepare firm’s profit and loss appropriation account.
20. Kavita, Sunita, Vinita and Nikita are partners in a firm sharing profits in 2:1:2:1 ratio. On the retirement
of Vinita, the goodwill was valued at ` 2,16,000. Kavita, Sunita and Nikita decided to share future profits
equally. Pass the necessary journal entry for the treatment of goodwill without opening goodwill account.
o
Tommy, Jerry and Harry are partners sharing profits in the ratio of 4 : 3 : 2. On 1st April, 2021, Jerry
gave a notice to retire from the firm. Tommy and Harry decided to share future profits in the ratio of 1
: 1. The capital accounts of Tommy and Harry after all adjustments showed a balance of ` 21,500 and `
40,250 respectively.
The total amount to be paid to Jerry was ` 47,750. This amount was to be paid by Tommy ` 33,250 and
by Harry ` 14,500. Pass necessary journal entries in the books of the firm for the above transactions. Show
your working clearly.
21. Sheetal Industries Limited purchased assets of ` 6,30,000 from Mahanagar Gas Limited. Sheetal Industries
Limited issued equity shares of ` 100 each fully paid in consideration. What journal entries will be made,
if the shares are issued (i) at par and (ii) at premium of 20%.

22. Pass the necessary journal entries for the following transactions on the dissolution of firm of Ruby, Lily and
Robin (who were sharing profits in the ratio of 2 : 2 : 1) after the transfer of all assets (other than cash)
and external liabilities to realisation account.
(i) Debtors were of ` 62,100. Ruby takes over debtors amounted to ` 60,000 at ` 58,600 and the remaining
debtors were sold to a debt collecting agency at 50% of the value.
(ii) Sundry assets were of ` 58,500. Lily is to take over some sundry assets at ` 36,000 (being 10% less
than the book value). Robin is to take over remaining sundry assets at 80% of the book value.
(iii) Robin assumes the responsibility of discharge of Mrs. Robin’s loan of ` 5,750 together with accrued
interest of ` 1,150.
23. Rekha and Surekha are partners sharing profits and losses in the ratio of 2 : 1. On 31st December, 2019,
the partners decided to dissolve the firm. Their Balance Sheet is as follows
Balance Sheet
Liabilities Amount (`) Assets Amount
(`)
Rekha’s Capital A/c 50,000 Debtors 26,000
Investment Fluctuation Fund 20,000 (–) Provision for D. Debts (2,000) 24,000
Bank Overdraft 30,000 Investments 40,000
General Reserve 56,000 Inventory 10,000
Rekha’s Loan A/c 34,000 Plant 10,000
Buildings 60,000
Surekha’s Capital A/c 30,000
Cash in Hand 6,000
Cash at bank 10,000
1,90,000 1,90,000
The assets were realised as follows
Debtors ` 26,000, Inventory ` 8,500, Plant ` 10,000, Buildings ` 1,00,000. Investment were taken over by
Rekha at ` 35,000. Compensation was paid to employees ` 10,000.
Prepare realisation account, partners’ capital account and bank account.
24. Sangam Limited invited applications for 1,00,000 equity shares of ` 10 each. The shares were issued at a
premium of ` 5 per share. The amount was payable as follows
On application and allotment 8 per share (including premium 3).
The balance including premium on the first and final call.
Applications for 1,50,000 shares were received. Applications for 10,000 shares were rejected and pro-rata
allotment was made to the remaining applicants on the following basis
(i) Applicants for 80,000 shares were allotted 60,000 shares.
(ii) Applicants for 60,000 shares were allotted 40,000 shares.
Raju, who belonged to the first category and was allotted 300 shares, failed to pay the first call money.
Anuj, who belonged to the second category and was allotted 200 shares, also failed to pay the first call
money. Their shares were forfeited. The forfeited shares were re-issued @ ` 12 per share fully paid-up. Pass
necessary journal entries and prepare cash book.
o
On 1st June, 2019, Kisan Polypipe Limited offered for subscription 50,000 equity shares of ` 100 each at a
premium of ` 20 per share payable as given below
On application ` 20 per share, on allotment (including premium) ` 50 per share and two months after
allotment ` 50 per share.
Applications were received for 84,000 shares. On 1st July, 2019, the Directors proceeded to allot shares
proportionately. Of these, application for 4,500 shares were accompanied with full amount and hence, were
accepted in full and the balance allotment was made on pro-rata basis. Excess amount paid by applicants
was utilised towards allotment and call money due from them. One of the applicants to whom 300 shares
were allotted proportionately, failed to pay the call money. His shares were forfeited on 30th November,
2019 and subsequently issued @ ` 130 per share. Record entries relating to these transactions in the journal
of the company.
25. The balance sheet of Tanish, Danish and Satish, who were sharing profits in the ratio of 5 : 3 : 2 as at 31st
March, 2020 was as follows
Balance Sheet
(`) (`)
Creditors 1,10,000 Bank 88,000
Employees Provident Fund 22,000 Debtors 2,20,000
Profit and Loss A/c 1,87,000 Stock 1,76,000
Capital A/cs Fixed Assets 1,32,000
Tanish 88,000
Danish 1,36,400
Satish 72,600 2,97,000
6,16,000 6,16,000
Tanish retired on 31st March, 2020. It was agreed that
(i) Goodwill of the firm was valued ` 1,76,000.
(ii) Fixed assets are to be depreciated by ` 5,500.
(iii) Make a provision for doubtful debts at 5% on debtors.
(iv) New profit sharing ratio of Danish and Satish will be 2 : 3.
(v) A liability for claim, included in creditors for ` 22,000 is settled at ` 17,600.
The amount to be paid to Tanish ` 2,63,450 and to Danish ` 4,510 and cash brought in by Satish ` 2,12,960
by leaving a balance of ` 33,000 in the bank.
Prepare revaluation account and partners’ capital account.
o
Anant and Jayant were partners in a firm sharing profits in the ratio of 3 : 2. On 1st April, 2020, they
admitted Hemant as a partner in the firm. The balance sheet of Anant and Jayant on that date was as
under
Balance Sheet
(`) (`)
Creditors 1,05,000 Cash in Hand 70,000
Workmen’s Compensation Fund 1,25,000 Debtors 80,000
Capital A/cs Machinery 50,000
Anant 50,000 Building 1,40,000
Jayant 40,000 90,000
4,00,000 4,00,000
It was agreed that
(i) The value of building and stock be appreciated to ` 1,90,000 and ` 80,000 respectively.
(ii) The liabilities of workmen’s compensation fund was determined at ` 1,15,000.
(iii) Hemant brought in her share of goodwill ` 50,000 in cash.
(iv) Hemant was to bring cash ` 60,000 as his capital.
(v) The future profit sharing ratio will be Anant 2/5th, Jayant 2/5th and Hemant 1/5th.
Prepare revaluation account, partners’ capital accounts and balance sheet of the new firm.

26. Aahuja Private Limited issued 20,000, 9% debentures of ` 100 each to the public at 10% discount on 1st
April, 2018. These debentures are redeemable after 6 years at a premium of 10%.
Pass the necessary journal entries for issue of debentures and writing-off ‘loss on issue of debentures’ in
same year of issue, if company has a balance of ` 1,60,000 in its securities premium reserve account and
also prepare loss on issue of debentures account.
Part B
27. Suvidha Construction Private Limited is a financial company which provides loan and invest into shares. At
the year end, company received ` 80,000 interest on loan. Where will be the amount of interest presented?
(a) Activity arising from interest will be shown in financing activity
(b) Activity arising from interest will be shown in operating activity
(c) Activity arising from interest will be shown in investing activity
28. Gross profit is 20% of the net sales. Calculate the value of net sales, if cost of goods sold is ` 50, 000.
(a) ` 62, 500
(b) ` 65, 000
(c) ` 60, 000
(d) ` 50,000
29. Liquid ratio is calculated as

Current Assets - Liquid Assets
(a) Current Liabilities
Current Assets - Inventories - Prepaid Expenses
(b) Current Liabilities
Current Assets - Fictitious Assets
(c) Current Liabilities
Current Assets - Current Liabilities
(d) Current Assets
o
Livestock is shown under which sub-head?
(a) Trade receivables
(b) Tangible fixed assets
(c) Intangible fixed assets
(d) Inventories
30. Which of the following is not an investing cash flow?

(a) Sale of 2,500 shares (held as investment) for ` 15 each
(b) Purchase of equipment for ` 500 cash
(c) Purchase of marketable securities for ` 25,000 cash
(d) Sale of land for ` 28,000 cash
o
Vivek Consultancy Private Limited purchased furniture for ` 20,00,000 paying 60% by issue of equity
shares of ` 10 each and the balance by a cheque. This transaction will result in
(a) Increase in cash and cash equivalents ` 8,00,000.
(b) Cash used in investing activities ` 8,00,000.
(c) Cash used in investing activities ` 20,00,000.
(d) Cash generated from financing activities ` 12,00,000.

31. What is meant by analysis of financial statements? State any two advantages of analysis of financial
statements.
32. Freedom Resourcing Private Limited is in the process of preparing its balance sheet as per Schedule III,
Part I of the Companies Act, 2013 and provides its true and fair view of the financial position.
(i) Under what head and sub-head will the company show stores and spares and loose tools in its balance
sheet?
(ii) What is the accounting treatment of stores and spares and loose tools, when the company will
calculate its inventory turnover ratio?
(iii) What is the objective of this analysis?
33. Calculate the amount of opening trade receivables and closing trade receivables from the following figures
Trade Receivables Turnover Ratio = 5 times; Gross Profit Ratio = 20%
1
Opening Trade Receivables were 3 rd of Closing Trade Receivables.
1
Cash Revenue from Operations being 4 th of Credit Revenue from Operations.
Cost of Revenue from Operations is ` 10,00,000.
o
(i) From the following information, calculate Inventory Turnover Ratio : Net Sales ` 40,000; Average
Inventory ` 5,500; Gross Loss on Sales is 10%.
(ii) From the following information, calculate Inventory Turnover Ratio : Total Sales ` 22,000; Sales
Return ` 2,000; Gross Profit ` 5,000; Closing Inventory ` 6,000; Excess of Closing Inventory over
Opening Inventory ` 2,000.
34. From the following balance sheet of Unique Projects Private Limited as on 31st Maich, 2022 and 2021,
prepare a cash flow statement
Balance Sheet
as at 31st March, 2021 and 2022
Particulars Note no. 31st March 2022 31st March 2021
(`) (`)
(i) Share Capital 1,30,000 90,000
(ii) Reserves and Surplus 1 84,000 48,000
Trade Payables 22,000 17,400
Total 2,36,000 1,55,400
II. ASSETS
Fixed Assets 1,66,000 93,400
2. Current Assets
(i) Inventories 26,000 22,000
(ii) Trade Receivables 39,000 36,000
(iii) Cash and Cash Equivalents 5,000 4,000
Total 2,36,000 1,55,400
Notes to Accounts

Particulars 2022 (`) 2021 (`)

Balance of Statement of Profit and Loss 30,000 20,000
Preliminary Expenses (1,000) (2,000)
84,000 48,000
(i) Depreciation charged on fixed assets for the year 2021-22 was ` 20,000.
(ii) Income tax ` 5,000 has been paid during the year.
******

Sample Paper 13
Accountancy
Part A
1. Which amongst the following shares confer voting rights on its holders?
(a) Redeemable preference shares (b) Participatory preference shares
(c) Equity shares (d) None of the above
o
When shares offered to public are completely subscribed, it is_______.
(a) under subscription of shares
(b) no subscription of shares
(c) full subscription of shares
(d) None of these
2. Loss on issue of debentures is written-off out of

(a) discount on issue of debentures account
(b) securities premium reserve
(c) general reserve and statement of profit and loss account
o
Shares for consideration other than cash can be issued at
(a) discount (b) par
(c) premium (d) Both (b) and (c)
3. When capitals of partners are fixed, drawings are recorded in_______

(a) profit and loss appropriation account
(b) partners’ capital account
(c) partners’ current account
(d) None of these
o
No interest is to be charged on drawings from the partners in case of________.
(a) an oral agreement between partners including interest clause
(b) no interest clause in deed
(c) absence of deed

4. What will be the correct sequence of events?

(i) Forfeiture of shares
(ii) Default on calls
(iii) Reissue of shares
(iv) Amount transferred to capital reserve
(a) (ii), (i), (iii), (iv)
(b) (i), (iv), (ii), (iii)
(c) (iii), (iv), (i) (ii)
(d) (ii), (iv), (i), (iii)
5. Assertion (A): Interest on loan is recorded in profit and loss account.

Reason (R): Interest on loan is a charge against profit.
Alternatives
(A)
Assertion (A)
reserve. The net profit after all adjustments but before transfer to general reserve is ` 88,000. Calculate the
amount which is to be transferred to reserve.
(a) ` 8,800 (b) ` 4,400
(c) ` 5,000 (d) ` 8,000
7. If a share of ` 10 on which ` 8 has been paid up is forfeited, it can be reissued at the minimum price
of_______
(a) ` 5 per share (b) ` 2 per share
(c) ` 10 per share (d) ` 8 per share
8. What will be the entry for writing-off goodwill at the time of retirement?
(a) Goodwill A/c (Appeared goodwill) Dr
To Old. Partner’s Capital/Current A/c (In old ratio)
(b) Goodwill A/c Dr
To Old Partner’s Capital A/c (In new ratio)
(c) Old Partner’s Capital/Current A/c (In old ratio) Dr
To Goodwill A/c
9. Nora, Liza and Luna are partners sharing profits in the ratio of 5 : 3 : 2. They have admitted Elena into
1
the partnership for 6 th share. An extract of their balance sheet on 1st April, 2020 is as follows

Investment Fluctuation Fund 27,000 Investments (cost) 3,00,000
If the market value of investments is ` 2,90,000, then the Investment Flucuation Fund will be shown in the
balance sheet of the firm at
(a) ` 10,000 (b) ` 13,000
(c) ` 27,000 (d) ` 20,000

10. Pass the necessary entry for the following transaction.

A furniture of ` 6,000 (book value) is taken by Jeet, who is a partner of Royals.
(a) Furniture A/c Dr 6,000
To Jeet’s Capital A/c 6,000
(b) Furniture A/c Dr 6,000
To Cash A/c 6,000
(c) Jeet’s Capital A/c Dr 6,000
To Furniture 6,000
(d) Cash A/c Dr 6,000
To Furniture A/c 6,000
11. Karan and Manan were in partnership sharing profits and losses in the ratio of 2 : 1. They admitted Rehaan
as a new partner. Rehaan brought ` 10,000 as her share of goodwill premium, which was entirely credited
to Karan’s capital account. On the date of admission, goodwill of the firm was valued at ` 30,000. Calculate
the new profit sharing ratio.
(a) 1:1:1 (b) 3:2:1
(c) 1:2:1 (d) 2:1:1
12. Samar and Jigar were partners in a firm sharing profits and losses in the ratio of 2 : 1. With effect from 1st
January, 2020, they decided to share profits and losses equally. Individual partner’s gain or sacrifice due to
change in the ratio will be
1 1
(a) Gain by Samar 2 , Sacrifice by Jigar 2
1 1
(b) Sacrifice by Samar 2 Gain by Jigar 2
1 1
(c) Gain by Samar 6 , Sacrifice by Jigar 6
1 1
(d) Sacrifice by Samar 6 , Gain by Jigar 6
13. Supreme Technologies Limited invited applications for issuing 600, shares of ` 100 each at a premium of
` 50 per share. The full amount was payable on application. Applications were received for 800 shares.
Applications for 200 shares were rejected and application money was refunded. Shares were allotted to the
remaining applicants. Journal entry for adjusting the application money received in the books of Supreme
Technologies Limited is as follows
Share Application and Allotment A/c Dr A
To Share Capital A/c B
To Securities Premium Reserve A/c C
To Bank A/c D
Here A, B, C, D are
(a) ` 60,000, ` 30,000, ` 15,000, ` 15,000 respectively
(b) ` 60,000, ` 15,000, ` 15,000, ` 30,000 respectively
(c) ` 1,20,000, ` 30,000, ` 30,000, ` 60,000 respectively
(d) ` 1,20,000, ` 60,000, ` 30,000, ` 30,000 respectively
o
Jagan Finance and Leasing Limited has in its Memorandum of Association, capital clause stating that it is
formed with 75,000 equity shares of ` 100 each. The company has issued the entire shares and the public
has also subscribed and paid-up for the full amount on application itself. What will be the subscribed
capital?
(a) ` 1,00,000 (b) ` 7,50,000
(c) ` 75,00,000 (d) ` 10,00,000
14. Rachit, Suchit and Ajit are partners in the ratio of 5:3:2. Before Suchit’s salary of ` 3,400 firm’s profit is `
19,400. How much in total, Suchit will receive from the firm?
(a) ` 4,800 (b) ` 3,400
(c) ` 8,200 (d) ` 8,000

o
Ghanshyam is a partner in a firm. He withdraws regularly ` 6,000 at the end of every month for the six
months ending 31st March, 2021. If interest on drawings is charged @ 10% p.a., the interest charged will be
(a) ` 1,050 (b) ` 750
(c) ` 1,800 (d) ` 900
DIRECTION
: Read the following hypothetical situation and answer Q. No. 15 and 16
Surya and Nakul are partners engaged in the business of manufacturing and selling electrical appliances.
They share profits and losses in 3 : 2 ratio. Their initial fixed capital contribution was ` 6,00,000 and `
4,00,000 respectively. At the end of first year their profit was ` 6,00,000 before allowing the remuneration
of ` 15,000, per quarter to Surya and ` 10,000 per half year to Nakul. The performance for first year was
providing and encouraging, therefore, they decided to expand the area of operations. For this purpose,
they needed additional machinery and a person to support. After six months of the accounting year they
decided to admit Pranav as a new partner and offered him 20% as a share of profits along with monthly
remuneration of ` 12,500, Pranav was bought ` 6,50,000 for capital and ` 3,50,000 for premium for goodwill.
Besides this Pranav extended ` 5,00,000 as loan for two years.
15. Upon the admission of Pranav, the sacrifice for providing his share of profits would be done by
(a) Surya and Nakul equally (b) Surya and Nakul in the ratio of 3 : 2
(c) Only Surya (d) Only Nakul
16. Pranav will be entitled to a remuneration of______at the end of the year.
(a) ` 75,000 (b) ` 70,000
(c) ` 55,000 (d) ` 65,000
17. Camila and Andrew are partners in a firm sharing profit and loss in the ratio of 3 : 2. The balances in their
capital and current accounts as on 1st April, 2021 were as under
Items Camila (`) Andrew (`)

Capital accounts 3,00,000 2,00,000
Current accounts (Cr) 1,00,000 80,000
The partnership deed provides that Camila is to be paid salary @ ` 500 per month whereas, Andrew is
to get a commission of ` 40,000 for the year. Interest on capital is to be credited at 6% per annum. The
drawings of Camila and Andrew for the year were ` 30,000 and ` 10,000, respectively. The net profit of
the firm before making these adjustments was ` 2,49,000. Interest on Camila’s drawings was ` 750 and
Andrew’s drawings was ` 250. Prepare profit and loss appropriation account.
18. Kabra Minerals Limited issued 20,000, 9% debentures of ` 100 each at a discount of 4% payable ` 30 on
application and the balance on allotment. The debentures are redeemable after 5 years. Give necessary
journal entries for the issue of debentures.
o
Macro Power Limited purchased the assets of Damodar Industries Limited for ` 1,00,000 payable in fully
paid equity shares of ` 10 each. What entries will be passed in the books of Macro Power Limited if such
issue is
(i) at par (ii) at a premium of 25%
19. Dhruv, Gaurav and Sourav are partners sharing profits and losses in the ratio of 2 : 2 : 1. Gaurav retires
from the firm on 31st March, 2020. On the date of Gaurav’s retirement, the following balances appeared
in the books of the firm
Advertisement suspense account ` 25,000
Contingency reserve ` 15,000
Workmen’s compensation reserve ` 20,000
Loss in business account ` 15,000

Pass the necessary journal entries for the adjustment of these items on Gaurav’s retirement.
o
Tanay and Sanay are partners sharing profits and losses in the ratio of 5 : 1. They agreed to admit Uday
as a partner. Profits will be shared equally in future. Uday brought in ` 60,000 as a premium for his share
in profits. Pass necessary journal entries in the books of the firm.
20. Saagar and Balveer are partners in the ratio of 3 : 2. The firm maintains fluctuating capital accounts and
the balance of the same as on 31st March, 2020 amounted to ` 1,60,000 and ` 1,40,000 for Saagar and
Balveer respectively. Their drawings during the year were ` 30,000 each.
As per partnership deed, interest on capital @10% p.a. on opening capitals had been provided to them.
Calculateopening capitals of partners given that their profits were ` 90,000.
21. Radiant Impex Limited with a registered capital of ` 50,00,000 in shares of ` 10 each issued 2,00,000 of such
shares, payable ` 3 per share on application, ` 2 per share on allotment and ` 3 per share on first call. All
the amounts payable on allotment were duly received. On the first call being made, one shareholder paid
the entire balance in his holding of 6,000 shares. Give journal entries to record the transactions.
22. Henry, Jaxon and Mathew were partners in a firm sharing profits in 2 : 2 : 1 ratio. Henry died on 1st July,
2019. On that date, the goodwill of the firm was valued at ` 22,500. On the death of a partner, his share
of profit in the year of death was to be calculated on the basis of the average profits of the last four years.
The profit for the last four years were
2015-16 80,000
2016-17 72,000
2017-18 84,000
2018-19 56,000 (Loss)
Pass necessary journal entries
23. On 1st April, 2020, Radix Films and Media Limited made an issue of 3,00,000 equity shares of ` 10 each
at a premium of ` 4 per share, payable as follows
` 6 on application (including ` 1 premium)
` 2 on allotment (including ` 1 premium)
` 3 on first call (including ` 1 premium)
` 3 on second and final call (including ` 1 premium)
Applications were received for 4,50,000 shares, of which applications for 90,000 shares were rejected and
their money was refunded. Rest of the applicants were issued shares on pro-rata basis and their excess
money was adjusted towards allotment.
Thomas, to whom 6,000 shares were allotted, failed to pay the allotment money and his shares were
forfeited after allotment. Emily, who applied for 10,800 shares failed to pay the two calls and on her such
failure, her shares were forfeited.
12,000 forfeited shares were re-issued as fully paid on receipt of ` 9 per share, the whole of Emily’s shares
being included.
Prepare the cash book and pass the necessary journal entries.
o
Vaibhav Nutrition Limited issued 40,000 equity shares of ` 10 each at a premium of ` 2.50 per share. The
amount was payable as follows
On application ` 2 per share, on allotment ` 4.50 per share (including premium) and on call ` 6 per share.
Owing to heavy subscription, the allotment was made on pro-rata basis as follows
(i) Applicants for 20,000 shares were allotted 10,000 shares.
(ii) Applicants for 56,000 shares were allotted 14,000 shares.
(iii) Applicants for 48,000 shares were allotted 16,000 shares.
It was decided that the excess amount received on applications would be utilised on allotment and the
surplus would be refunded.
Aditi, to whom 1,000 shares were allotted and who belongs to category (i), failed to pay allotment money.
Her shares were forfeited after the call. Pass the necessary journal entries in the books of Vaibhav Nutrition
Limited for the above transactions.

24. Sahas and Lakshay were partners in a firm sharing profits and losses in the ratio of 4 : 3. The following is
the balance sheet of the firm as on 31st December, 2020.
Balance Sheet
(`) (`)
Sundry Creditors 20,000 Cash 14,800
Bank Overdraft 17,000 (–) Provision for Doubtful Debts (300) 20,200
Capital A/cs Stock 20,000
Sahas 70,000 Plant 40,000
Lakshay 60,000 1,30,000 Building 75,000
1,70,000 1,70,000
They agreed to admit Hardik as a partner with effect from 1st January, 2020 for 1/4th share in profits on
the following terms
(i) Hardik will bring in ` 47,183 as his capital.
(ii) Building is to be appreciated by ` 14,000 and plant to be depreciated by ` 7,000.
(iii) The provision on debtors is to be raised to ` 1,000.
(iv) The goodwill of the firm has been valued at ` 21,000.
Prepare revaluation account, partners’ capital account and balance sheet of the firm immediately after
Hardik’s admission.
o
Girish, Satish and Manish are partners with profit sharing ratio 5 : 3 : 2. Their balance sheet is as follows
Balance Sheet
as at ...
General Reserve 30,000 Furniture 40,000
Reserve for Contingency 20,000 Investment 30,000
Provident Fund 40,000 Prepaid Insurance 10,000
Capital A/cs Goodwill 20,000
Girish 40,000 Patents 30,000
Satish 30,000 Profit and Loss 40,000
Manish 30,000 1,00,000
3,70,000 3,70,000
(i) Manish takes retirement, new ratio of Girish and Satish is 3:2.
(ii) ` 10,000 given to Manish in cash and balance transferred to Manish’s loan account.
(iii) Prepaid insurance is no more required.
(iv) ` 10,000 unrecorded typewriter has to be shown in the balance sheet.
(v) Investment is valued at ` 20,000 and is taken over by Girish at this value.
(vi) Make 5% provision for discount on creditors.
(vii) Outstanding repair bills due ` 10,000.
(viii) Provident fund decreased by 10,000.
(ix) Accrued commission ` 5,000.

(x) Building increased by 20%.

(xi) Goodwill of the firm valued at ` 40,000.
Prepare necessary ledgers.
25. The balance sheet of Hitesh, Nitesh and Chandresh on the date of dissolution was as follows
Balance Sheet
as at ...
(`) (`)
Employees Provident Fund 26,000 Debtors 41,600
Outstanding Expenses 13,000 Stock 54,600
Capital A/cs Prepaid Expenses 2,600
Hitesh 1,05,950 Furniture 13,000
Surjeet 76,050 1,82,000 Machinery 1,09,200
Profit and Loss A/c 19,500
Nitesh’s Capital A/c 26,000
2,73,000 2,73,000
Chandresh was appointed to realise the assets and pay the liabilities. He was entitled to receive 5%
commission on the amounts realised from sale of assets. He was also to bear the expenses of realisation.
Assets realised as follows
Machinery – ` 91,000; Debtors – ` 26,000; Furniture – ` 9,750; Stock at 60% of its book value. Expenses of
realisation amounted to ` 1,950. An office typewriter realised ` 3,250 which was not shown in the books of
accounts. There was a contingent liability of ` 6,500 for bills discounted for which ` 2,600 had to be paid.
Prepare realisation account.
26. (i) Galaxy Industries Limited bought the business of Balaji Industries Limited on 1st April, 2015 consisting
of sundry assets of ` 11,20,000 and creditors of ` 2,00,000. ` 2,00,000 was paid in cash on 3rd April, 2015
and for the balance, 6% debentures were issued at a premium of 20% on 5th April, 2015. Pass necessary
journal entries in the books of Galaxy Industries Limited for the above mentioned transactions.
(ii) Narayan Enterprises Limited has 20,000, 9% debentures of ` 100 each outstanding in the books of
accounts as on 31st March, 2017, to be redeemed on 31st March, 2022. Show how will you disclose
debentures in the balance sheet.
Part B
27. The net amount of source or use of cash when a fixed asset (having book value ` 1,20,000) is sold at a loss
of ` 40,000 in term of cash flow will be________
(a) ` 80,000 (b) ` 1,60,000
(c) ` 1,20,000 (d) ` 40,000
28. If debt equity ratio is 2 : 1, which of the following will have no effect on it?
(i) Purchase on fixed assets by taking loan of ` 10,00,000
(ii) Sale of fixed assets at a loss of ` 30,000
(iii) Issue of bonus shares
(iv) Declaration of final dividend
(a) Only (iii)
(b) (i), (ii) and (iv)
(c) (i) and (ii)
(d) (iii) and (iv)

o
Which of the following is not an item of sub-head other current liabilities in balance sheet?
(a) Outstanding expenses
(b) Advance income
(c) Creditors
29. Assuming that debt to equity ratio is 2 : 1, which of the following transaction will have no effect on it?
(a) Issue of bonus shares
(b) Declaration of final dividend
(c) Purchase on fixed assets by taking loan of ` 10,00,000
(d) Sale of fixed assets at a loss of ` 30,000
o
Financial statement analysis includes______and_______of financial statements.
(a) preparation, analysis
(b) analysis, preparation
(c) analysis, interpretation
(d) preparation, interpretation
30.

EQUITY AND LIABILITIES
12% Debentures 2,00,000 1,60,000
Interest on debentures is paid on half yearly basis on 30th September and 31st March each year. Debentures
were redeemed on 30th September, 2019. How much amount (related to above information) will be shown
in financing activity for cash flow statement prepared on 31st March, 2020?
(a) Outflow ` 61,600
(b) Outflow ` 64,000
(c) Outflow ` 40,000
(d) Inflow ` 42,600
31. Explain any three items of reserves that are shown under the heading ‘reserves and surplus’ in the balance
sheet of a company as per Schedule III of the Companies Act, 2013.
32. State, giving reason, which of the following transactions would increase, decrease or not change the stock
turnover ratio.
(i) Sale of goods for ` 25,000 (costing ` 20,000).
(ii) Increase in the value of closing stock by ` 12,000.
(iii) Goods purchased for ` 50,000.
33. From the following information, calculate any two of the following ratios
(i) Debt to equity ratio (ii) Working capital turnover ratio (iii) Return on investment
Equity share capital ` 25,000, general reserve ` 2,500, balance of statement of profit and loss after interest
and tax ` 7,500, 9% debentures’ ` 10,000, creditors ` 7,500, land and building ` 32,500, equipments ` 7,500,
debtors ` 7,250, cash ` 2,750, revenue from operations, i.e. sales for the year ended 31st March, 2019 was
` 25,000, tax rate is 50%.
o

From the following data, calculate Gross Profit Ratio, Current Ratio, Quick Ratio and Debt to Equity
Ratio.
Revenue from Operations ` 30,000, Cost of Revenue from Operations (Cost of Goods Sold) ` 20,000; Net
Profit ` 3,000; Current Assets ` 6,000; Inventory ` 1,000; Current Liabilities ` 2,000; Share Capital ` 5,000
and Debentures ` 2,500.
34. From the following summarised balance sheets of Sunteck Finance Limited as on 31st March, 2021 and
2022, you are required to prepare the cash flow statement

No. (`) (`)
Share Capital 35,00,000 30,00,000
Reserves and Surplus 1 23,00,000 15,00,000
Long-term Borrowings: 15% Debentures 10,00,000 15,00,000
Trade Payables 12,50,000 8,00,000
Short-term Provisions 2 3,80,000 3,50,000
Other Current Liabilities 3 60,000 50,000
Total 84,90,000 72,00,000
II. ASSETS
Fixed Assets 4 47,50,000 40,00,000
Long-term Investments (At cost) 9,00,000 9,00,000
2. Current Assets
Inventories 13,50,000 10,00,000
Trade Receivables 12,25,000 11,25,000
Cash and Cash Equivalents 2,65,000 1,75,000
Total 84,90,000 72,00,000
Notes to Accounts:
Note No. Particulars 31st March 2022 (`) 31st March 2021 (`)
Balance in Statement of Profit and Loss 22,50,000 15,00,000
Capital Reserve (Profit on sale of investments) 50,000 ––
23,00,000 15,00,000
Provision for Tax 3,80,000 3,50,000
3. Other Current Liabilities
Outstanding Expenses 60,000 50,000
60,000 50,000
4. Fixed Assets
Fixed Assets (at cost) 60,00,000 50,00,000

(–) Accumulated Depreciation (12,50,000) (10,00,000)

47,50,000 40,00,000
(i) During the year ended 31st March, 2022, fixed assets with a net book value of ` 50,000 (accumulated
depreciation ` 1,50,000) were sold for ` 40,000.
(ii) During the year ended 31st March, 2022, investments costing ` 4,00,000 were sold.
(iii) Debentures were redeemed at a premium of 10%.
(iv) Tax of ` 3,75,000 was paid.
(v) Debenture interest paid during the year ended 31st March, 2022 was ` 1,50,000.
(vi) Proposed dividend for the year 2021 ` 1,50,000 and 2022 ` 1,70,000
******

Sample Paper 14
Accountancy
PART—A
1 2 1
1. Madhav, Girish and Jatin are partners sharing profits in the ratio of 2 , 5 and 10 . If Jatin retires and his
share is taken up by Madhav, then the new ratio of remaining partners will be_______
(a) 3 : 2 (b) 5 : 4
(c) 2 : 3 (d) 1 : 1
2. Sunrise Corporate Private Limited issued 20,000 equity shares of ` 10 each at a premium of ` 2 payable
(a) ` 2,40,000 (b) ` 2,60,000
(c) ` 2,00,000 (d) ` 2,20,000
3. Which account is debited, when some amount of any installment of share capital is not received from any
shareholder by the company?
(a) Cash
(b) Share Allotment
(c) Calls-in-advance
(d) Calls-in-arrears
o
One of the conditions, in addition to others, for allotment of shares is
(a) full subscription by public
(b) full payment on application
(c) resolution in general meeting
(d) receiving minimum subscription
4. Girish, Shrish and Manish are partners in a firm without any agreement. They have contributed ` 2,500, `
1,500 and ` 1,000 by way of capital in the firm. Girish was unable to work for six months in a year due to
illness. At the end of year, firm earned a profit of ` 750. Girish’s share in the profit will be
(a) ` 188
(b) ` 250
(c) ` 125
(d) ` 375

5. A company Aaditya Developers Private Limited has 9% debentures of ` 10,00,000 and share capital of `
7,50,000. For the year ended 31st March, 2020, the company suffered a loss of ` 5,00,000. The directors of
the company requested the debenture holders to forego their interest, but they disagreed. What should the
directors do?
(a) Do not pay, it is not compulsory
(b) If debenture holders agree, then do not pay
(c) Pay interest whether they earn profits or occur losses
o
Securities premium reserve account cannot be utilised for which of the following purpose?
(i) Amortisation of preliminary expenses
(ii) Distribution of dividend
(iii) Issue of fully paid bonus shares
(iv) Buy-back of own shares
(a) (ii) and (iii)
(b) (iii) and (iv)
(c) (i) and (ii)
(d) Only (ii)
6. Half yearly interest payable on 4,000, 12% debentures of ` 100 each on 30th September, 2019.
Company paid due interest on this date. Journalise it.
(a) Interest on Debentures A/c Dr 40,000

To Bank A/c 40,000
(b) Interest on Debentures A/c Dr 24,000
To Debentureholders’ A/c 24,000
(c) Debentureholders’ A/c Dr 24,000
To Bank A/c 24,000
7. In the profit and loss appropriation account, net profit is always taken after
(a) Manager’s Commission
(b) Interest on Partner’s Loan
(d) None of these
o
Profit and loss adjustment account is needed for_______
(a) charge against profits
(b) rectification of errors or omissions
(c) appropriation of profits
(d) None of these
8. Gajanand, Anand and Devanand are partners sharing profits and losses in the ratio of 2 : 2 : 1. The extract

Stock 2,40,000
If the value of stock is to be reduced by ` 40,000, then what will be the amount of stock at which it will be
shown in reconstituted balance sheet?

(a) ` 40,000
(b) ` 2,00,000
(c) ` 2,40,000
(d) ` 2,80,000
o
Ravi and Yuvi are partners in a firm sharing profits equally. Their capitals were ` 45,000 and ` 50,000
1
respectively. Hari was admitted for 3 rd share in profits/losses and brought ` 85,000 as capital. Calculate
the amount of goodwill.
(a) ` 1,60,000
(b) ` 75,000
(c) ` 2,55,000
(d) Can’t be determined
9. Gopal draws ` 20,000 each in 1st April, 2020, 1st July, 2020, 1st October, 2020 and 1st January, 2021. For
the year ended 31st March, 2021 interest on drawings @ 8% per annum will be
(a) ` 9,600
(b) ` 4,000
(c) ` 5,400
(d) ` 3,200
10. Pass journal for issue of 10,000, 15% debentures of ` 100 each at a premium of 5% which are redeemable
after 3 years of issue @ 10% premium.
(a) 15% Debentures A/c Dr. 10,000

Securities Premium Reserve A/c Dr. 500
Premium on Redemption of Debentures A/c Dr. 1,000
To Debentures Application and Allotment A/c 10,500
To Loss on Issue of Debentures A/c 1,000
(b) Debenture Application and Allotment A/c Dr. 11,500
To 15% Debentures A/c 10,000
To Securities Premium Reserve A/c 500
(c) Debenture Application and Allotment A/c Dr. 10,500
Loss on Issue of Debentures A/c Dr. 1,000
To 15% Debentures A/c 10,000
To Securities Premium Reserve A/c 500
11. Calvin, Justin and Devin are partners in a firm sharing profits equally. With effect from 1st April, 2021, they
decided to share profits in the ratio 3 : 2 : 1. In adjustment entry, what will be the treatment and amount
for Justin if goodwill of firm is ` 5,000?
(a) Credit ` 5,000
(b) Debit ` 10,000
(c) Debit ` 5,000
(d) No treatment

12. Aadesh and Sudesh are partners sharing profits and losses in the ratio of 7 : 5. They agree to admit Devesh
their manager, into partnership who is to get 1/6th share in the profits. He acquires this share as 1/24th
from Aadesh and 1/8th from Sudesh. The new profit sharing ratio will be
(a) 7 : 13 : 4
(b) 7 : 5 : 6
(c) 5 : 7 : 6
(d) 13 : 7 : 4
13. Assertion (A): Interest on partner’s capital may be shown in profit and loss account.
Reason (R): If partners treat interest on capital as a charge, it is to be paid compulsorily.
Alternatives
(A)
1
14. Lucky and Jacky are partners sharing profit or loss in ratio of 2 : 1. Lucky surrenders 4 th of his share and
1
Jacky surrenders 3 rd of his share in favour of Nicky a new partner. What will be Nicky’s share?
13
(a) 36
5
(b) 18
7
(c) 12
5
(d) 12
o
Riyaz and Fiyaz are sharing profits and losses in the ratio of 3 : 2. Siraz is admitted with 1/5th share in
profits of the firm which he gets entirely from Zehaan. Find out the new profit sharing ratio.
(a) 2 : 2 : 1
(b) 2 : 2 : 2
(c) 12 : 8 : 5
(d) 8 : 12 : 5
DIRECTION : Read the following hypothetical situation and answer Q.No. 15 and 16
Zoya, Riya and Priya decided to start a partnership to manufacture toys. Zoya contributed ` 10,000 and
Riya contributed ` 5,000 as their capital. Priya is specially abled but is very creative and intelligent.
She did not contribute any capital.
The terms of partnership were as follows
(i) Zoya, Riya, Priya will share profit in 2 : 2 : 1 ratio.
(ii) Interest on capital will be provided to Zoya, Riya @ 6% p.a.
Due to shortage of capital, Zoya contributed ` 2,500 Riya on 30th September, 2020 and contributed ` 1,000
on 1st January, 2021 as additional capital.
Dr. Profit and Loss Appropriation A/c Cr.

To Interest on Capital
Zoya ...........
Riya ...........
To Salary (Zoya) 1,200
To Profit Transferred to Capital A/cs

Zoya ...........
Riya ...........
Priya ...........
........... ...........
15. Interest on capital allowed to Zoya and Riya will amount to

(a) Zoya ` 150, Riya ` 60
(b) Zoya ` 750, Riya ` 360
(c) Zoya ` 600, Riya ` 300
(d) Zoya ` 675, Riya ` 315
16. Show the distribution of profit between Zoya, Riya, Priya.

(a) Zoya = ` 5,868, Riya = ` 5,868, Priya = ` 2,934
(b) Zoya = ` 5,700, Riya = ` 5,750, Priya = ` 5,000
(c) Zoya = ` 5,000, Riya = ` 6,000, Priya = ` 5,500
17. Rashmi, Lavina and Shekhar were partners in a firm manufacturing denim jeans situated in Noida. They
were sharing profits and losses in the ratio of 5:3:2. They were doing good business and were interested in its
expansion in Agra. For this Lavina took the responsibility and visit to Agra by his own car. While returning,
her car met with an accident. After one month of treatment, on 1-07-22 she died. It was agreed between
Lavina’s Executor and the remaining partners
(i) Goodwill of the firm be valued at 2 1 2 year purchase of average profit for the last three years. The
profit of the last three years was 2019-20 ` 40,000; 2020-21 ` 60,000; 2021-22 ` 74,000 respectively.
(ii) Profit of deceased partner upto the date of death will be calculated on the basis of profit of the last
year.
Rashmi and Shekhar also decided to pay the entire amount immediately to the executors of Lavina. Based
on the above information you are required to answer the following questions.
I. Calculate Lavina’s share of goodwill.
II. In which ratio the Amount of goodwill will be compensated by remaining partners?
III. Find Lavina’s share of Profit till the date of death.
18. Pawan, Jeevan and Madan are partners in a firm. Their capital accounts on 1st April, 2022, stood at `
2,00,000, ` 1,20,000 and ` 1,60,000 respectively. Each partner withdrew ` 15,000 during the financial year
2021-22.
As per the provisions of their partnership deed:
(a) Interest on capital was to be allowed @ 5% per annum.
(b) Interest on drawings was to be charged @ 4% per annum.
(c) Profits and losses were to be shared in the ratio 5:4:1.
The net profit of ` 72,000 for the year ended 31st March 2022, was divided equally amongst the partners
without providing for the terms of the deed.
You are required to pass a single adjustment entry to rectify the error (Show workings clearly).
o
Aman and Bunty are partners in a firm. The firm maintains fluctuating capital accounts and the balance of
the same as on 31-03-2022 amounted to ` 1,60,000 and ` 1,40,000 for Aman and Bunty respectively. Their
drawings during the year were ` 30,000 each.
As per partnership deed interest on capital @25% p.a. on opening capitals had been provided to them.
Calculate opening capitals of partners given that their profits were ` 90,000. Show your workings clearly.
Also pass journal entries for providing interest on partners’ capitals.
19. Earth Limited purchased a machinery from Moon Limited and the purchase consideration was paid as
follows:
(a) By issuing 5,000, 11% Debentures of ` 100 each at a discount of 10%.
(b) Balance by giving a promissory note of ` 1,82,000 after 3 months.
Pass necessary journal entries for the purchase of machinery and payment to Moon Limited in the books of
Earth Limited.
o
Complete the following journal entries:
Journal Entries

Equity Share Capital A/c Dr. .........
Securities Premium A/c Dr. .........
To Calls-in-Arrears A/c .........
To____________ .........
(For 13,000 equity shares of ` 50 each issued at a premium
of ` 8 per share forfeited for the non-payment of allotment
money (including premium) of ` 23 and first and final call of
` 20 per share were not made)
_______________ Dr. .........
To____________ .........
To____________ .........
(For the forfeited shares reissued at ` 55 per share fully paid
up)
Share Forfeited A/c Dr. .........
To Capital Reserve A/c .........
(For profit on forfeited shares transferred to capital reserve)
20. Disha, Laxmi and Archana are partners sharing profits and losses in the ratio of 3:2:1. With effect from
1st April, 2022 they agree to share profits equally. For this purpose, goodwill is to be valued at two year’s
purchase of the average profit of last 2 years which were as follows:
Year ending on 31st March, 2021 ` 1,90,000 (Profit)
Year ending on 31st March, 2022 ` 70,000 (Loss)
On 1st April, 2021 a Laptop costing ` 50,000 was purchased and debited to internet expenses account, on
which depreciation is to be charged @ 20% p.a by Straight Line Method.
Journalise the transaction along with the working notes.
21. From the following information fill empty spaces.

Share Capital A/c Dr. ........
Securities Premium A/c Dr. 1,000
To Share Forfeiture A/c ........
To Call in Arrears A/c 3,500
Being_____shares forfeited for non-payment of ` _____
including premium of ` 2 per share)
Bank A/c Dr. ........
Share Forfeiture A/c Dr. ........
To Share Capital A/c ........
(Being______shares reissued at ` 9 per share as fully paid)
Share forfeiture A/c Dr. 600

To Capital Reserve A/c 600

(Being forfeiture money transferred to capital reserve)
Dr. Share Forfeiture A/c Cr.

Receipts Amount (`) Payments Amount (`)
To Share Capital A/c ............
To Capital reserve A/c 600 By Share Capital A/c 1,500
To Balance c/d 600
1,500 1,500
(Face value of share is ` 10 each)
22. Pass necessary journal entries in the following cases on the dissolution of a partnership firm of partners
Rakesh, Gopal, Sudhir and Manish:
(i) Realization expenses of ` 5,000 were to borne by Rakesh, a partner. However, it was paid by Gopal.
(ii) Investments costing ` 25,000 (comprising 1000 shares), had been written off from the books completely.
These shares are valued at ` 20 each and were divided amongst the partners.
(iii) Gopal’s loan of ` 50,000 settled at ` 48,000.
(iv) Machinery (book value ` 6,00,000) was given to creditor at a discount of 20%.
23. Bandhan Group Limited issued a prospectus inviting applications for 5,00,000 equity shares of ` 10 each
issued at a premium of 10% payable as:
` 3 on Application
` 5 on Allotment (including premium) and ` 3 on call.
Applications were received for 6,60,000 shares.
Allotment was made as follows:
(a) Applicants of 4,00,000 shares were allotted in full.
(b) Applicants of 2,00,000 shares were allotted 50% on pro rata basis.
(c) Applicants of 60,000 shares were issued letters of regret.
A shareholder to whom 500 shares were allotted under category (a) paid full amount on shares allotted to
him along with allotment money. Another shareholder to whom 1,000 shares were allotted under category
(b) failed to pay the amount due on allotment. His shares were immediately forfeited. These shares were then
reissued at ` 14 per share as ` 7 paid up. Call has not yet been made.
Journalise.
o
Kamal Footworks Limited has offered 50,000 equity shares of ` 100 each at a premium of ` 20, payable as
follows:
Application ` 50
Allotment ` 40 (including premium) and balance on first and final call.
The bank account of the company has received ` 35,00,000 on account of share application money.
Kamal Footworks Limited decided to allot shares to all the applicants on pro rata basis. The balance in calls
in arrears account at the time of allotment and first and final call amounted to ` 1,00,000 and ` 1,50,000
respectively. These shares were forfeited and re-issued at ` 90 per share as fully paid up. Journalize.
24. Isha and Disha are partners in a firm sharing profits and losses in the ratio of 3:2. Their Balance Sheet as
at 31st March, 2022 stood as follows:
Balance Sheet
(`) (`)
Capital Account: Plant and Machinery 1,20,000

Isha 60,000 Land and Building 1,40,000

Disha 80,000 1,40,000 Debtors 1,90,000
Current Accounts: Less: Provision for
Isha 10,000 Doubtful debts (40,000) 1,50,000
Disha 30,000 40,000 Stock 40,000
General Reserve 1,20,000 Cash 30,000
Workmen’s Compensation Reserve 50,000 Goodwill 20,000
Creditors 1,50,000
5,00,000 5,00,000
They agreed to admit Manoj into partnership for 1/5th share of profits on 1st April, 2022, on the following
terms:
(a) All Debtors are good.
(b) Value of land and building to be increased to ` 1,80,000.
(c) Value of plant and machinery to be reduced by ` 20,000.
(d) The liability against Workmen’s Compensation Fund is determined at ` 20,000 which is to be paid
later in the year.
(e) Mr. Sunil, to whom ` 40,000 were payable (already included in above creditors), drew a bill of
exchange for 3 months which was duly accepted.
(f) Manoj to bring in capital of ` 1,00,000 and ` 10,000 as premium for goodwill in cash. Journalize.
o
Aayush, Dhruv and Ishan are partners sharing profits in the ratio of 3:2:1. Dhruv retired from the firm. On
that date the Balance Sheet of the firm was as follows:
Balance Sheet as on March 31, 2022

General Reserve 12,000 Furniture 41,000
Outstanding Salary 2,200 Premises 80,000
Provision for Legal Damages 6,000 Debtors 6,000
Capitals Less: Provision for Doubtful debts (400) 5,600
Aayush 46,000
Dhruv 30,000
Ishan 20,000
1,43,200 1,43,200
• Premises to be appreciated by 20%, Stock to be depreciated by 10% and Provision for doubtful debts
was to be maintained @5% on Debtors. Further, provision for legal damages is to be increased by `
1,200 and furniture to be brought up to ` 45,000.
• Goodwill of the firm is valued at ` 42,000.
• ` 26,000 from Dhruv’s Capital account be transferred to his loan account and balance to be paid
through bank; if required, necessary loan may be obtained from bank.
• New profit sharing ratio of Aayush and Ishan is decided to be 5:1.
Prepare Revaluation Account and Partners Capital Accounts.
25. Jatin, Nimit and Vaman entered into partnership on 1st April 2021 with a capital of ` 3,00,000, ` 2,00,000
and ` 1,00,000 respectively. In addition to capital Vaman has advanced a loan of ` 1,00,000. Since they had

no agreement to guide them, they faced following issues during and at the end of the year.
(a) Jatin and Nimit demanded to share profits in the ratio of their capital contribution, Vaman is not in
agreement with this proposal.
(b) Nimit, being working partner, demands a lump sum payment of ` 40,000 as remuneration for which
other others partners are not in agreement.
(c) Jatin wanted interest on capital to be provided @8% pa but Nimit and Vaman did not agree.
(d) Vaman wanted that interest on loan be paid to him @ 10% pa but Jatin and Nimit wanted to pay @ 5%
p.a.
You are required to suggest and help them resolve these issues.
26. (a) Naresh Exports Limited took over business of Life Care Enterprises on 1-04-2022. The details of the
agreement regarding the assets and liabilities to be taken over are:
Particulars Book Value (`) Agreed Value (`)

Building 20,00,000 35,00,000
Plant and Machinery 12,00,000 8,00,000
Stock 4,00,000 4,00,000
Trade receivables 5,00,000 4,00,000
Creditors 2,00,000 3,00,000
Outstanding Expenses 50,000 1,00,000
It was decided to pay for purchase consideration as ` 7,00,000 through cheque and balance by issue of
2,00,000, 9% Debentures of ` 20 each at a premium of 25%. Journalize.
(b) On April 1, 2019 Dox Limited issued, 10,000, 8% Debentures of ` 100 each at premium of 5%, to be
redeemable at a premium of 10%, after 5 years. The entire amount was payable on application. The issue
was oversubscribed to the extent of 10,000 debentures and the allotment was made proportionately to
all the applicants. The securities premium amount has not been utilized for any other purpose during
the year. Give journal entries for the issue of debentures and writing off loss on issue of debentures.
Also state any other 2 uses of securities premium apart from writing off Discount or Loss on issue of
Debentures.
PART—B
27. What are the principle revenue producing activities for an insurance company?
(a) Payment of Claims
(b) Receipt of Premium
(d) None of these
28. Which of the following transactions will result into flow of cash?
(a) Received ` 19,000 from debtors
(b) Deposited cheques of ` 10,000 into bank
(c) Cash withdrawn from bank ` 20,000
(d) Issued 20,000, 9% debentures to the vendor of machinery
o
Which of the following transactions will not result into flow of cash?
I. Issue of equity shares of ` 1,00,000
II. Purchase of machinery of ` 1,75,000
III. Redemption of 9% debentures of ` 3,50,000
IV. Cash deposited into bank ` 15,000
(a) II and III (b) I and III
(c) Only IV (d) I and II

Τotal Assets
29. Debt is used for calculating
(a) Debt-turnover Ratio
(b) Total Assets of Debt Ratio
(c) Debtors Turnover Ratio
(d) Debt-equity Ratio
30. A company’s revenue from operations is ` 20,00,000, cost of revenue from operations is ` 14,00,000 and
indirect expenses are ` 2,00,000,then what is the amount of the gross profit?
(a) ` 5,00,000
(b) ` 6,00,000
(c) ` 16,00,000
(d) ` 3,00,000
o
Which one of the following is correct?
(i) A ratio is an arithmetical relationship of one number to another number.
(ii) Liquid ratio is also known as acid test ratio.
(iii) Ideally-accepted current ratio is 1 : 1.
(iv) Debt-equity ratio is the relationship between outsider’s funds and shareholder’s funds.
In the context of the above statements, which of the following options is correct?
(a) Only (ii), (iii) and (iv) are correct
(b) Only (ii) and (iv) are correct
(c) All (i), (ii), (iii) and (iv) are correct
(d) Only (i), (ii) and (iv) are correct
31. State any three limitations of analysis of financial statements.
32. Current ratio of Supreme India Private Limited is 3:2. Accountant wants to maintain it at 2:1. Following
options are available to him. State the impact of each option and also state which option will fulfil the
objective.
(i) He can repay bills payable
(ii) He can purchase goods on credit
(iii) He can take short-term loan
33. Calculate proprietary ratio, if Total assets to Debt ratio is 2:1. Debt is ` 5,00,000. Equity shares capital is
0.5 times of debt. Preference Shares capital is 25% of equity share capital. Net profit before tax is ` 10,00,000
and rate of tax is 40%.
o
From the following information, calculate Interest Coverage Ratio.
Profit after interest and tax and dividend ` 7,50,000
Rate of income tax 25%
10% Preference Shares ` 4,00,000
9% Debentures ` 8,00,000
Equity Shares ` 10,00,000
Dividend allowed at the rate of 20% on equity shares
34. Read the following hypothetical text and answer the given questions on the basis of the same:
Atal Financed Company started to provide finance training in online and offline mode in 2019. The main
objective was to improve financial literacy in India. It has acquired funding through equity and borrowing
from banks Balance sheets for year ending 31st March 2021 and 2022 are as follows:


No. (`) (`)
(a) Share Capital 2,00,000 2,50,000
2. Non-Current Liabilities:
Long-term Borrowings 2 1,00,000 80,000
(a) Trade Payables 3 60,000 1,60,000
(b) Other Current Liabilities 4 25,000 20,000
Total 4,35,000 5,80,000
II. ASSETS
(a) Property, Plant and Equipments and Intangible Assets 5 1,50,000 2,00,000
(i) Property, Plant and Equipment : Tangible Assets 6 10,000 2,000
(ii) Intangible Assets 1,00,000 1,30,000
(b) Long-term Loans and Advances
2. Current Assets:
(b) Trade Receivables 40,000 60,000
(c) Cash and Cash Equivalents 65,000 98,000
Total 4,35,000 5,80,000
Notes to Accounts:

12% Debentures 1,00,000 80,000
3. Trade Payables
Creditors 40,000 60,000
Bills Payable 20,000 1,00,000
60,000 1,60,000
5. Property, Plant and Equipments
Machinery 2,00,000 2,60,000
Less: Provision for Depreciation (50,000) (60,000)
1,50,000 2,00,000
6. Intangible Fixed Assets
Goodwill 10,000 2,000

(a) During the year a piece of machinery with a book value of ` 30,000; provision for depreciation on it
` 10,000 was sold at a loss of 50% on book value.
(b) Debentures were redeemed on 31st March 2022.
You are required to calculate
(i) Operating profit before working capital changes
(ii) Cash flow from operating activities
(iii) Cash flow from investing activities
(iv) Cash flow from financing activities
(v) Closing cash and cash equivalents
******

Sample Paper 15
Accountancy
PART—A
1. Assertion (A): New profit sharing ratio is calculated even for old partners, at the time of admission of a
partner.
Reason (R): A new partner acquires his share in profits from old partners which reduced old partners’s share
in profits.
Alternatives
(A)
2. The capital balance of a partner at the end of the year (after adjusting for his drawings ` 1,750 and his share
in the profit ` 1,150) is ` 6,000. Interest on capital is payable to him at 5°% per annum. What will be the
amount of interest on capital?
(a) ` 300 (b) ` 270
3. To compensate the deceased partner’s executor, deceased partner’s share of goodwill is______to his
capital account.
(a) debited (b) credited
(c) not recorded (d) None of these
o
A new partner is admitted in the firm
(a) for acquiring additional managerial skills
(b) to benefit from the goodwill of the admitted partner
(c) for procuring additional capital
(d) All of the above
4. Santosh Industries Limited forfeited 200 shares of ` 10 each (which were issued at par) held by Zen for
non-payment of allotment money of ` 4 per share. The called-up value per share was ` 9. On forfeiture, the
amount debited to share capital account will be
(a) ` 200 (b) ` 1,800

(c) ` 1,000 (d) ` 800
5. A company issued 5,000 equity shares of ` 10 each. Amount is payable as ` 2 on application, ` 5 on allotment
and ` 3 on first and final call. A shareholder who had 500 shares failed to pay allotment and first call amount
on due date. What will be the amount received by company against issue of shares?
(a) ` 50,000 (b) ` 30,000
(c) ` 10,000 (d) ` 46,000
6. Navrang Textiles Private Limited called first call money of ` 3 per share on its 50,000 shares. A shareholder
holding 2,750 shares failed to pay the amount. How much amount will be due on first call?
(a) ` 1,50,000 (b) ` 1,47,750
(c) ` 1,41,750 (d) ` 1,57,000
7. Interest on drawings is charged @ 6% p.a. on total drawings of each partner and Surya a partner withdrew
` 10,000 during a year. Interest on drawings will be_______
(a) ` 50 (b) ` 300
(c) ` 100 (d) ` 600
o
Tanish is a partner in a firm. His drawings during the year ended 31st March, 2021 were ` 36,000. If interest
on drawings is charged @ 9% p.a. the interest charged will be
(a) ` 1,620 (b) ` 324
(c) ` 162 (d) ` 3,240
8. Kanchan Investment Limited purchased a machinery of ` 5,00,000 from Sanyog Finance Private Limited.
Kanchan Investment Limited issued equity shares of ` 1,000 each fully paid in consideration. Pass the
necessary journal entry for purchase of machinery only.
(a) Sanyog Finance Private Limited Dr 5,00,000

To Machinery A/c 5,00,000
(b) Machinery A/c Dr 5,00,000
To Cash A/c 5,00,000
(c) Machinery A/c Dr 5,00,000
To Sanyog Finance Private Limited 5,00,000
o
700 shares of ` 10 each were reissued as ` 9 paid up for ` 7 per share. Journalise
(a) Bank A/c Dr 4,900

Share Forfeiture A/c Dr 1,400
To Share Capital A/c 6,300
Share Forfeiture A/c Dr 2,100
Share Discount A/c Dr 1,400
(d) Bank A/c Dr 4,900

9. Krish, Bhavish and Satish are partners in a firm sharing profits in ratio of 2 : 1 : 3. They decided to share
profits in ratio of 4 : 5 : 3. What was Krish’s gain/sacrifice?
(a) Gain 2/12 (b) Gain 2/6
(c) No gain/sacrifice (d) Sacrifice 2/6
10. Jatin and Yatin are partners in a firm sharing profits and losses in the ratio of 7 : 5 respectively. The extract

Fixed Assets 16,50,000
If value of fixed assets in the balance sheet is undervalued by 20%, then at what value will fixed assets be
shown in reconstituted balance sheet?
(a) ` 14,85,000 (b) ` 1,65,000
(c) ` 3,30,000 (d) ` 20,62,500
11. Sohan and Rohan gave a guarantee of ` 50,000 as profit to Mohan. Sohant the end, deficiency of ` 10,000
occured in Mohan’s profit. Journalise.
(a) Sohan’s Capital A/c Dr 5,000

Rohan’s Capital A/c Dr 5,000
To Mohan’s Capital A/c 10,000
(b) Sohan’s Capital A/c Dr 10,000
To Rohan’s Capital A/c 10,000
(c) Mohan’s Capital A/c Dr 10,000
To Sohan’s Capital A/c 5,000
(d) Mohan’s Capital A/c Dr 10,000
12. Average profit of a business over the last five years was ` 30,000. The normal yield on capital invested in
such a business is estimated at 10% p.a. The net capital invested in the business is ` 2,50,000. Amount of
goodwill, if it is based on 3 years’ purchase of last 5 years super profits will be
(a) ` 90,000 (b) ` 15,000
(c) ` 75,000 (d) ` 50,000
13. Retiring partner’s share of goodwill is debited to remaining partners capital/current account in
their________
(a) new ratio (b) old ratio
(c) sacrificing ratio (d) gaining ratio
o
For which purpose, sacrificing ratio is used in case of admission of a partner?
(a) To distribute goodwill (b) To distribute revaluation profit
(c) To distribute reserves (d) To distribute balance in profit and loss account
14. Which alternative(s) is/are available to the company in case of over-subscription?

(a) Some excess shares are rejected and some shares are adjusted on pro-rata basis.

(b) Excess shares are full rejected.

(c) Excess shares are fully adjusted on pro-rata basis.
(d) All of the above
o
As per Table F, the company is required to pay______interest on the amount of calls-in-arrears.
(a) 5% p.a. (b) 10% p.a.
(c) 6% p.a. (d) 12% p.a.
Rishi, Tarak and Nakul were partners engaged in the business of manufacturing and selling low cost
medicines. They shared profits in the ratio of 1 : 2 : 3. Their initial fixed capital contribution on 1st April,
2020 were A ` 60,000; B ` 90,000 and C ` 2,00,000. Rishi provides her personal office to the firm for business
use charging yearly rent of ` 30,000. Rishi was also allowed a salary of ` 2,000 per month.
Interest on capital is provided @ 8%. p.a. Rishi withdrews ` 1,000 in the beginning of each month, Tarak
withdrews ` 1,000 at the end of each month and Nakul withdrews ` 4,800 in the beginning of each quarter.
Interest is charged on their drawings @ 10% p.a. Tarak was allowed a commission of 10% of net profit as
shown in profit and loss account, after charging such commission. Nakul was guaranteed a profit of ` 60,000
after making all adjustments. The net profit for the year ended 31st March, 2021 was ` 2,06,000 before
making above adjustments.
15. What is the net profit of the year ?

(a) ` 2,36,000 (b) ` 1,46,000
(c) ` 1,76,000 (d) ` 2,06,000
16. What will be the total interest on drawings?

(a) ` 2,400 (b) ` 7,200
(c) ` 9,600 (d) ` 4,800
17. Raman, Sohan and Jagan are partners sharing profits in the ratio 5 : 4 : 1. Jagan died on 30th November
2022. While settling his account, the assets and liabilities were reassessed as follows:
Book Value (`) Revalued at (`)

Land and Building 5,00,000 6,50,000
Debtors 70,000 55,000
Creditors 80,000 1,20,000
Pass journal entries to give effect to this revaluation of assets and liabilities and market value of investment
was decreased by ` 10,000.
18. Calculate the goodwill of a firm on the basis of two years purchases of the average profit of last four years.
Profits for the last four years ended 31st March were:
(`)
31.3.2019 30,600
31.3.2020 48,400
31.3.2021 46,600
31.3.2022 34,400
Additional Information :
(a) The closing stock for the year ended 31st March, 2021 was undervalued by ` 2,600.
(b) The cost of management expenses per annum ` 2,000 should be made for the purpose of goodwill
valuation.

o
Tarun and Varun started a business on 1st April, 2021 and contribute the capital of ` 2,00,000 and ` 1,50,000
respectively. On 1st July, 2021, Tarun gave a loan of ` 40,000 and Varun introduced a fresh capital of `
60,000. Profit for the year ended 31st March, 2022 was ` 75,800. There is no partnership deed. Both Tarun
and Varun expected interest @ 12% per annum on loan and additional capital advanced by them. Varun also
asked for a monthly salary of ` 2,000 as he spent additional over time on regular basis.
Show the distribution of profit and prepare Profit and Loss Appropriation A/c. Justify your answer.
19. Deepak Fitness Limited took over Assets of ` 25,00,000 and liabilities of ` 6,00,000 of Blue Wellness Limited.
Deepak Fitness Limited paid the purchase consideration by issuing 10,000 equity shares of ` 100 each at a
premium of 10% and ` 11,00,000 by bank draft.
Calculate purchase consideration and pass necessary Journal entries in the books of Deepak Fitness Limited.
o
Balram India Limited invited applications for issuing 10,000, 8% debentures of ` 100 each. The amount was
payable as follows:
` 30 on application and ` 70 on allotment. The public applied for 12,000 debentures. Applications for 8,000
debentures were accepted in full; applications for 3,000 debentures were allotted 2,000 debentures and the
remaining applications were rejected. All money were duly received.
Pass the necessary journal entries in the books of the company for the above transactions.
20. Divakar, Sudhakar and Prabhakar are partners sharing profits in the ratio of 3: 2:1. Goodwill is appearing
in the books at a value of ` 1,80,000. Laxman retires and at the time of his retirement, goodwill is valued
at ` 2,52,000. Divakar and Prabhakar decided to share future profits in the ratio of 2:1. The Profit for the
first year after Sudhakar’s retirement amounts to ` 1,20,000. Give the necessary Journal entries to record
goodwill and to distribute the profit. Show your calculations clearly.
21. On 1st April 2021, Laxman Organic Limited issued 2,000, 9% debentures of ` 150 each at a discount of 10%
redeemable after 5 years at a premium of 5%. All the debentures were subscribed for. The company has a
balance of Securities Premium Reserve ` 40,000 and surplus, i.e. balance in Statement of Profit and Loss `
15,000.
Pass the journal entries for issue of debentures and writing off the loss on issue of debentures. Also prepare
extract of Balance Sheet as at 31st March 2022.
22. Aalok, Sudhir and Kabir were partners in a firm sharing profits in the ratio of 2 : 2 : 1. Their Balance Sheet
as at March 31, 2022 was as follows:
Balance Sheet
as at March 31, 2022
(`)
Creditors 30,000 Land 80,000
Bills Payable 40,000 Building 55,000
Outstanding Expenses 25,000 Plant 1,00,000
Capital: Debtors 25,000
Aalok 50,000 Cash 5,000
Sudhir 60,000
Kabir 70,000 1,80,000
3,05,000 3,05,000
From 1st April, 2022 they decided to share profit in the ratio 1 : 2 : 3. For this purpose, it was agreed that:
(i) The goodwill of the firm should be valued at ` 45,000.

(ii) Land was undervalued by ` 20,000. Building was overvalued by 10%.

(iii) Creditors amounting to ` 3,000 were not to be paid.
Partners decided to record the revised values in the books. However, they do not want to disturb the reserve.
You are required to record necessary journal entries for the above adjustment.
23. A company was registered with nominal capital of ` 50,00,000 in equity shares of ` 100 each. 20,000 shares
were issued to the public at a premium of ` 10 per share, payable as:
` 30 on application
` 35 on allotment (including ` 5 premium)
` 25 on First call (including ` 5 premium)
The balance on Second and final call.
Applicants were received for 35,000 shares and Allotment was made as follows:
List I. Applications for 5,000 shares were allotted in full.
List II. Applications for 15,000 shares were allotted 5,000 shares on pro-rata basis.
List III. Applications for 15,000 shares were allotted 10,000 shares on pro-rata basis.
Money overpaid on application was employed on account of sums due on allotment only. Any money in
excess to allotment was refunded.
Kailash (belonging to List III), holding 200 shares, failed to pay the allotment and first call. The company
forfeited his shares after the first call.
Sagar (belonging to List II) who applied 300 shares, failed to pay two calls and company forfeited his share
after the final call.
Of the shares forfeited 200 shares (including all of Sagar) were reissued to Pooja as ` 90 per share.
Prepare the cash book and pass necessary journal entries in the books of the company.
o
(i) Gujarat India Limited forfeited 400 shares of ` 100 each, issued at 10% premium (to be paid at the time
of allotment) for non-payment of allotment money of ` 30 (including premium) and first call of ` 30 per
share. The second and final call of ` 20 has not yet been called. Out of these, 160 shares were re-issued
as ` 80 paid-up for ` 70 per share. Journalise.
(ii) Global Farm Limited issued 60,000 shares of ` 10 each at a premium of 10% payable as, ` 2 per share
on application, on allotment ` 5 (including premium) and ` 2 each on first and final call. Applications
were received for 90,000 shares. It was decided to:
(a) Refuse allotment to the applications for 10,000 shares.
(b) Allot 10,000 shares to R who had applied for similar number.
(c) Allot the remaining shares on pro-rata basis.
R failed to pay the allotment money. T who belonged to the category ‘c’ and had applied for 4,200 shares
paid both the calls with allotment. Calculate the amount received on allotment.
24. Jagan and Magan are partners in a firm sharing profits in the ratio of 4 : 1. On 31st March, 2022, their
Balance Sheet was as follows:
Balance Sheet of Jagan and Magan as on 31-03-2022

Provision for Bad Debts 4,000 Debtors 43,000
Outstanding Salary 6,000 Stock 40,000
Investment Fluctuation Reserve 10,000 Investment 80,000
Employee Provident Funds 15,000 Furniture 60,000
General Reserve 12,000 Building 36,000
Capital: Goodwill 6,000
Jagan 1,20,000 Advertisement Suspense A/c 7,500
Magan 80,000
2,00,000

2,87,000 2,87,000
On the above date, Dhavan was admitted for 1/4th share in the profits on the following terms:
(i) Dhavan brought ` 1,00,000 as his capital and ` 20,000 for his share of premium, half of which is
withdrawn by Jagan and Magan.
(ii) Stock will be reduced to ` 35,000 furniture will be depreciated by ` 7,000 and 30% appreciation will be
recorded in building.
(iii) Debtors ` 3,000 will be written off as bad debts and a provision of 5% will be created on debtors for bad
and doubtful debts.
(iv) Investments will be recorded at its market value of ` 65,000.
(v) Revaluation expenses of ` 3,500 will be paid by Jagan on behalf of the firm.
Prepare Revaluation Account and Partners’ Capital Accounts of the new firm.
o
Mahendra, Surendar and Rajendar were partners in a firm sharing profits in the ratio of 2 : 3 : 5. On
31.3.2022 their Balance Sheet was as follows:

(`) (`)
Creditors 46,000 Furniture and Fixtures 55,000
Investment Fluctuation Reserve 15,000 Equipments 15,000
Workmen Compensation Reserve 10,000 Investments 25,000
Capitals: Machinery 18,000
Mahendra 50,000 Stock 12,000
Surendar 40,000 Debtors 30,000
Rajendar 20,000 1,10,000 Less: Provision for (3,000) 27,000
Doubtful Debts
Bank 29,000
1,81,000 1,81,000
On the above date, Mahendra retired and Surendar and Rajendar agreed to continue the business on the
following terms:
(i) Goodwill of the firm was valued at ` 48,000.
(ii) There was a claim of ` 4,000 for workmen’s compensation.
(iii) Market value of investment was ` 22,000.
Mahendra will be paid ` 3,200 through cheque and the balance will be transferred in his loan account. The
new profit sharing ratio between Surendar and Rajendar will be 3 : 2.
Prepare Partners’ Capital A/cs and Balance Sheet of the new firm.
25. Rohit, Mohit and Shobhit commenced business on 1st April, 2020 with capitals of:
Rohit – ` 2,00,000; Mohit – ` 2,00,000 and Shobhit – ` 1,00,000.
Profits are shared in the ratio of 4 : 3 : 3. Capital carried interest @ 5% p.a. During the year 2020-21, the
firm suffered a loss of ` 1,50,000 before allowing interest on capital. Drawings of each partner during the
year were ` 20,000.
On 31st March, 2021, the partners agreed to dissolve the firm as it was no longer profitable. The creditors
on that date were ` 40,000. The assets realised a net value of ` 3,20,000 and the expenses of realisation were
` 7,000.
Prepare Realisation Account, Partners’ Capital Accounts and Cash Account along with necessary working
to close the books of the firm.
26. KGN Group Limited issued 10,000, 8% debentures of ` 100 each on 1st April 2022 redeemable at a premium
of 10% after 4 years. The issue was subscribed by 95%.
According to the terms of issue, interest on the debentures is payable half-yearly on 30th September and
31st March.
I. What is nature of interest on debentures?

II. What journal entry will be passed for writing off the interest on debentures at the end of the year?
III. At the time of issue of debentures what amount will be credited to premium on redemption of debenture
A/c?
IV. What is the ownership status of Debentureholders in a company?
PART—B
27. Chitra Enterprises Limited has prepared cash flow statement which represent cash inflow and outflow for
the company. Which of the following is an example of cash from investing activities of Chitra Enterprises
Limited?
(a) Advances made by financial enterprise
(b) Cash advances and loans made to third party
(c) Cash advances and loans made by financial firms
28. Outstanding salaries are recorded as an item of sub-head_____in balance sheet.

(a) Trade Payables (b) Short-term Borrowings
(c) Short-term Provisions (d) Other Current Liabilities
o
Which of the following liabilities are taken into account for acid test ratio?
(i) Redeemable Debentures (ii) Outstanding Expenses
(iii) Bills Payable (iv) Bank Overdraft
(v) Trade Creditors
(a) (i), (ii), (iii), (iv) and (v) (b) (v), (iv), (iii) and (ii)
(c) (v), (iii) and (ii) (d) (i), (iii), (iv) and (v)
29. 12% debentures of ` 6,00,000, current assets ` 3,00,000 and shareholder’s fund is ` 10,00,000. What is the
value of debt-equity ratio?
(a) 0.7 : 1 (b) 0.6 : 1
(c) 0.8 : 1 (d) 0.5 : 1
30. Finox Infotech Private Limited purchased machinery of ` 10,00,000 issuing a cheque of ` 2,50,000 and 10%
debentures of ` 7,50,000. In the cash flow statement, the transaction will be shown as
(a) outflow under investing activity ` 2,50,000
(b) inflow of ` 7,50,000 as financing activity
(c) outflow under investing activity ` 10,00,000, inflow under financing activity as receipt for debentures `
7,50,000
o
Paid ` 4,00,000 to acquire shares in Divya Technologies Limited and received a dividend of ` 40,000 after
acquisition. These transactions will result in
(a) cash used in investing activities ` 3,60,000
(b) cash generated from financing activities ` 3,60,000
(c) cash used in investing activities ` 4,00,000
(d) cash generated from financing activities ` 4,40,000
31. Name the ‘Major head’ and ‘Sub-head’ in which the following items will be presented in the balance sheet
of a company as per Schedule III, part-I of the Companies Act, 2013.
(i) Public Deposits
(ii) Interest accrued but not due

(iii) Goodwill
(iv) Stores and spares
(v) Debentures maturing current financial year
(vi) Securities Premium
32. From the following information, calculate Return on Investment.

Equity Share Capital ` 10,00,000; Profit after Interest and Tax ` 2,60,000; 12% Debentures ` 4,00,000;
General Reserve ` 75,000; Creditors ` 75,000; Land and Building ` 12,50,000; Debtors ` 1,20,000; Plant and
Machinery ` 3,50,000; Bank ` 90,000.
Revenue from Operations for the year was ` 25,00,000 and Tax paid 35%.
33. Briefly explain the significance of analysis of financial statement to (i) the Finance Manager and (ii) Trade
Payables.
o
(a) From the following information calculate inventory turnover ratio:
Revenue from operations ` 16,00,000; Average Inventory ` 2,20,000; Gross Loss Ratio 5%.
(b)Rate of Gross profit on cost of a company is 25%. Its Gross profit is ` 5,00,000 Its shareholders’ Funds
are ` 12,00,000; Current liabilities are ` 3,00,000 and current Assets are ` 10,00,000.
Calculate its Working Capital Turnover ratio.
34. Prepare a Cash Flow Statement from the following Balance Sheet of City India Limited
Balance Sheet of City India Limited

No. (`) (`)
(a) Share Capital 1 10,00,000 8,00,000
(b) Reserves and Surplus 2 7,50,000 50,000
(a) Short term Borrowings 4 50,000 40,000
(b) Trade Payables 2,50,000 3,80,000
(c) Short-term Provisions (Provision for Tax) 80,000 65,000
(d) Other Current Liabilities 1,50,000 1,60,000
Total 27,80,000 15,95,000
II. ASSETS
(a) Property, Plant and Equipments: Tangible Assets 5 12,80,000 8,20,000
(b) Intangible Assets (Goodwill) 1,60,000 ––
2. Current Assets:
(a) Short-term Investment (Marketable Securities) 2,90,000 1,60,000
(b) Inventories 4,10,000 2,80,000
(c) Trade Receivables 3,80,000 2,30,000

(d) Cash and Cash Equivalents 6 2,60,000 1,05,000

Total 27,80,000 15,95,000
Notes to Accounts:
Note No. Particulars 31st March 2022 (`) 31st March 2021 (`)
1. Share Capital:
10% Preference Share Capital 3,00,000 4,00,000
10,00,000 8,00,000
2. Reserves and Surplus:
General Reserve 3,00,000 1,00,000
Balance in Statement of Profit and Loss 4,50,000 (50,000)
7,50,000 50,000
9% Debentures 5,00,000 1,00,000
4. Short-term Borrowings:
Bank Overdraft 50,000 40,000
5. Property, Plant and Equipments (Tangible Assets):
Plant and Machine 2,30,000 1,20,000
Building 10,50,000 7,00,000
12,80,000 8,20,000
6. Cash and Cash Equivalents:
Cash in hand 80,000 40,000
Cash at Bank 1,80,000 65,000
2,60,000 1,05,000
Note: Dividend proposed for the year 2020-21 and for 2021-22 are ` 40,000 and ` 60,000 respectively.
(a) Depreciation of ` 60,000 was provided on plant and machinery during the year.
(b) A machine costing ` 40,000 (accumulated depreciation provided thereon ` 24,000) was sold for ` 8,000
during the year.
(c) New debentures were issued on 1st October, 2021
(d) Tax ` 60,000 was paid during the year.
******

Sample Paper 16
Accountancy
Part A
1. Cathal, Mikel and Pavel are partners sharing profits in the ratio of 3 : 2 : 1. They agree to admit Rasul into
1 1 1
the firm. Cathal, Mikel and Pavel agreed to give 3 rd, 6 th and 9 th share of their profit. The share of
profit of Rasul will be
11 13
(a) 54 (b) 54
1 12
(c) 10 (d) 54
o
What will be the amount of interest, if a partner withdrew ` 1,000 at the end of each month from 1st June,
2019 till the end of the accounting year upto 31st March, 2020? Interest on drawings is 12% per annum.
(a) ` 550 (b) ` 600
(c) ` 575 (d) ` 700
reserve. Net profit after all adjustments but before transfer to general reserve is ` 44,000. Amount to be
transferred to reserve is______.
(a) ` 2,500 (b) ` 4,000
(c) ` 4,400 (d) ` 2,200
3. State the right order of deductions for presenting correct view of the profit and loss appropriation account.
(i) Interest on the partner’s loan.
(ii) Manager’s commission on net profit.
(iii) Interest on partner’s capital.
(a) (i) " (ii) " (iii) (b) (ii) " (iii) " (i)
(c) (iii) " (i) " (ii) (d) (i) " (iii) " (ii)
4. Truth Technologies Limited purchased a Machinery from Krishna Polypipes Limited for ` 2,25,000. Truth
Technologies Limited. immediately paid ` 45,000 by bank draft and the balance by issue of preference shares
of ` 100 each at 20% premium for the purchase consideration of machinery. Number of preference shares
issued will be_______.
(a) 1,500 (b) 15,000
(c) 1,800 (d) 18,000
5. Saahas, Tanwar and Jagat are partners in a firm sharing profits in the ratio of 5 : 3 : 2. As per partnership

deed, Jagat is to get a minimum amount of ` 10,000 as profit. Net profit for the year is ` 40,000. Calculate
deficiency (if any) to Jagat.
(a) ` 950 (b) ` 2,000
6. Assertion (A): Change in profit sharing ratio among existing partners results in reconstitution of partnership
firm.
Reason (R): The relationship among partner changes at the time of change in profit sharing ratio.
Alternatives
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion
(A)
(c) Assertion (A) is true, but. Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true
7. Amount payable on shares can be received in installments by the company. What is the first installment
called?
(a) Application money (b) Allotment money
(c) First call money (d) Second call money
o
A company wants to issue debentures in the upcoming month. For the issue, the company has to create
debenture trust deed. But the accountant of the company does not know its meaning. Tell the meaning of
debenture trust deed.
(a) It shows the list of debenture holders
(b) It protects the interest of debenture holders
(c) It is created after public subscription
(d) It tells that in case of losses, there will be no interest
8. Galaxy Technologies Limited issued 10,000, 8% debentures of ` 10 each, payable on application and
redeemable at par at any time after 6 years. Record the entries for the application money received in the
books of Galaxy Technologies Limited.
(a) Bank A/c Dr. 80,000

To Debenture Application and Allotment A/c 80,000
(b) Bank A/c Dr. 1,00,000
9. Finrise Management Solutions Private Limited invited applications for issuing 6,000, 12% debentures of `
100 each at a premium of ` 50 per debenture. The full amount was payable on application. Applications
were received for 8,000 debentures.
Applications for 2,000 debentures were rejected and application money was refunded.
Debentures were allotted to the remaining applicants. Based on the information, pass the journal entry for
adjusting the application money received in the books of Finrise Management Solutions Private Limited.
(a) Bank A/c Dr. 12,00,000

(b) Debenture Application and Allotment A/c Dr. 9,00,000

(c) Debenture Appilcation and Allotment A/c Dr. 12,00,000

To Securities Premium Reserve A/c 3,00,000
To Bank A/c (2,000 # 150) 3,00,000
10. Aadi, Harsh and Jacob are partners sharing profits equally. Aadi drew regularly ` 4,000 in the beginning of
every month for the six months ended 30th September, 2020. Calculate interest on Aadi’s drawings @ 5%
p.a.
(a) ` 200 (b) ` 1,200
(c) ` 350 (d) ` 700
11. Good Luck Textiles Limited is registered with a capital of 10,00,000 equity shares of ` 10 each. 6,00,000
equity shares were offered for subscription to public. Applications were received for 6,00,000 shares.
All calls were made and amount was duly received except final call of ` 2 on 80,000 shares.
What will be the amount of share capital shown in the balance sheet?
(a) ` 60,00,000 (b) ` 58,40,000
(c) ` 5,84,000 (d) ` 6,00,000
o
If a share of ` 10 on which ` 8 has been called and ` 6 is paid is forfeited, the share capital account should
be debited with
(a) ` 8 (b) ` 10
(c) ` 6 (d) ` 2
12. Find the closing balance of capital account from the given information.
Opening balance of capital account as at 1st April, 2020 of Jaffar and Aabid are ` 5,00,000 and ` 5,40,000
respectively. Jaffar is entitled to take salary for ` 1,000 per month and Aabid is to take commission for `
20,000.
(a) Jaffar = ` 5,40,000, Aabid = ` 5,80,000 (b) Jaffar = ` 5,00,000, Aabid = ` 5,40,000
(c) Jaffar = ` 5,12,000, Aabid = ` 5,60,000 (d) Jaffar = ` 5,60,000, Aabid = ` 5,12,000
13. Ishaan and Raghav are partners in a firm sharing profits in the ratio of 3 : 2. An extract of their Balance
Sheet is as follows

Investments 20,000
If half of the investments are taken over by Ishaan and Raghav in their profit sharing ratio at book value,
what amount of investments will be shown in revised balance sheet?
(a) ` 20,000 (b) ` 10,000
(c) ` 5,000 (d) ` 40,000
o
Shaan and Vivaan are partners sharing profits in the ratio of 10 : 2. Divaan is admitted and the new profit
sharing ratio is now 10 : 6 : 4. At the date of admission, general reserve appears in the books at ` 24,000.
Vivaan’s share in the reserve will be
(a) ` 4,000 (b) ` 20,000
14. Which of the following appears in profit and loss appropriation account?
(i) Interest on partner’s capital.
(ii) Interest on the partner’s loan.
(ii) Manager’s commission on net profit.

(a) (i), (ii), (iii) (b) (ii), (iii), (i)

(c) (iii), (ii), (i) (d) Only (i)
o
Other than minors,_______categories of individuals cannot be admitted in a partnership firm.
(a) person of unsound mind (b) person disqualified by the law
DIRECTION : Read the following hypothetical situation and answer Q. No. 15 and 16.
Aman and Naman are partners with capitals of ` 6,50,000 and ` 5,50,000 respectively. They admit Tarun as
a partner with 1/4th share in the profit of the firm. Following journal entries are passed.
Journal

Bank A/c Dr. 6,50,000
To Tarun’s Capital Ltd 6,50,000
(Being amount of capital brought in by Tarun)
Tarun’s Current A/c Dr. .........
To Aman’s Capital A/c .........
To Naman’s Capital A/c .........
(Being Tarun’s share of goodwill credited to sacrificing partners
in their sacrificing ratio)
15. What will be the total capital of the firm ?

(a) ` 18,50,000 (b) ` 22,50,000
(c) ` 26,00,000 (d) ` 24,50,000
16. What will be the Tarun’s share of goodwill ?

(a) ` 2,50,000 (b) ` 1,87,500
(c) ` 1,67,500 (d) ` 1,62,500
17. Tanish and Manish are partners sharing the profits and losses in the ratio of 3 : 2 with capitals of ` 24,000
and ` 12,000. On 1st July, 2019, Tanish and Manish granted loans of ` 48,000 and ` 18,000, respectively to
the firm. Show the distribution of profits/losses for the year 2019, if the profits before any interest for the
year amounted to ` 1,800.
18. On 1st April, 2019, Aahuja Private Limited was formed with an authorised capital of ` 5,00,000 divided into
50,000 equity shares of ` 10 each. The company issued prospectus inviting applications for 45,000 equity
shares. The company received applications for 42,500 equity shares.
During the first year, ` 8 per share were called. Shaan holding 500 shares and Rihan holding 1,000 shares
did not pay the first call of ` 2 per share. Rihan’s shares were forfeited after the first call and later on 750
of the forfeited shares were re-issued at ` 6 per share, ` 8 called-up.
Show the following
(i) Share capital in the balance sheet of the company as per Schedule III, Part I of the Companies Act,
2013.
(ii) Also prepare notes to accounts for the same.
o
Vanraj Poly Pipes Limited invited applications for issuing 3,000, 12% debentures of ` 100 each at a premium
of ` 50 per debenture. The full amount was payable on application. Applications were received for 4,000
debentures. Applications for 1,000 debentures were rejected and application money was refunded. Debentures
were allotted to the remaining applicants. Pass necessary journal entries for the above transactions in the
books of Vanraj Poly Pipes Limited.

19. Khush, Devika, Monika and Luv are partners. Their capital accounts on 1st April, 2019 were ` 60,000, `
1,00,000, ` 1,60,000 and ` 2,00,000 respectively. After the accounts for the year ended 31st March, 2020 have
been prepared, it is discovered that interest @ 5% as provided in the partnership agreement has not been
credited to partners’ capital accounts before distributing profits. So, it is decided to make adjusting entry
at the beginning of the next year.
Give the necessary journal entry along with working notes.
20. Following is the balance sheet of Naksh, Uplaksh and Laksh as at 31st December, 2019.
Balance Sheet
Sundry Creditors 3,000 Tools 1,000
Reserve Fund 3,200 Furniture 8,000
Capial A/cs Stock 6,000
Naksh 10,000 Debtors 6,000
Uplaksh 5,000 Cash at Bank 5,000
Laksh 5,000 20,000 Cash in Hand 200
26,200 26,200
Uplaksh died on 31st March, 2020. Under the partnership agreement, he was entitled to the following
amounts
(i) Amount standing to the credit of his capital account.
(ii) Interest on capital, which amounted to ` 62.50.
(iii) His share of goodwill ` 3,500.
Draw up Uplaksh’s account
o
Taahir, Zahir and Sabir are partners sharing profits in the ratio of 1 : 2 : 3. Sabir retires and her capital, after
making adjustments for reserves and profits on revaluation stands at ` 2,20,000. Taahir and Zahir agreed to
pay her ` 2,50,000 in full settlement of her claim.
Record necessary journal entry for the treatment of goodwill, if the new profit sharing ratio is decided at
1 : 3. Also, calculate gaining ratio of Taahir and Zahir and hidden goodwill of the firm.
21. Given below is the balance sheet of Ayush and Girish who are partners in a firm sharing profits in the ratio
of 3:2.
Balance Sheet
Sundry Creditors 3,00,000 Land and Building 4,00,000
Profit and Loss A/c 1,00,000 Plant and Machinery 3,00,000
Ayush 4,00,000 Debtors 1,80,000
Girish 2,00,000 6,00,000 Bank 50,000
10,00,000 10,00,000
On the same date, Karan is admitted as a partner on the following terms
(i) Ayush gives 1/3rd of his share, while Girish gives 1/10th from his share to Karan.
(ii) Goodwill is valued at 2 years’ purchase of the average profits of the last 5 years, which were ` 50,000
(loss); ` 1,20,000; ` 10,000 (loss); ` 3,00,000 and ` 3,40,000 respectively. Karan does not bring his
share of goodwill in cash.
Pass necessary journal entries.

22. Johnson India Limited forfeited 1,200 equity shares of ` 10 each issued at a premium of 20% to Jonny who
had applied for 1,440 equity shares, for non-payment of allotment money of ` 5 per equity share (including
premium) and the first and final call of ` 5 per equity share. Out of these, 400 equity shares were re-issued
to Tony credited as fully paid for ` 9 per equity share.
Give journal entries to record forfeiture and re-issue of shares assuming that Johnson India Limited follows
the policy of adjusting excess application money towards other sums due on equity shares.
23. Orient Food Products Limited offered for public subscription 20,000 equity shares of ` 10 each at a premium
of 10% payable as ` 2 on application, ` 4 on allotment (including premium), ` 3 on first call and ` 2 on
second and final call.
Applications for 26,000 shares were received. Applications for 4,000 shares were rejected. Pro-rata allotment
was made to the remaining applicants. Both the calls were made and all the money was received except the
final call on 500 shares which were forfeited. 300 of the forfeited shares were later on re-issued as fully paid
up at ` 9 per share. Give journal entries.
o
Disha India Plastics Limited issued a prospectus inviting applications for 20,000 shares of ` 10 each at a
premium of ` 2 per share payable as follows
On application ` 2, on allotment ` 5 (including premium), on first call ` 3, on second and final call ` 2.
Applications were received for 30,000 shares and pro-rata allotment was made on the applications for 24,000
shares. Money overpaid on application was employed on account of sum due on allotment.
Jagat, to whom 400 shares were allotted, failed to pay the allotment money and on his subsequent failure
to pay the first call, his shares were forfeited. Lakshay, the holder of 600 shares, failed to pay the two calls
and his shares were forfeited after the second call. Of the shares forfeited, 800 shares were sold to Pranay
credited as fully paid for ` 9 per share, the whole of Jagat’s shares being included. Show the journal entries.
24. Neel and Veer are two partners sharing profits and losses in the ratio of 3 : 2. Their balance sheet as at 31st
March, 2020 is as follows
Balance Sheet
Capital A/cs Land and Building 3,00,000
Neel 3,00,000 Furniture 1,60,000
Veer 2,00,000 5,00,000 Bills Receivable 40,000
General Reserve 2,00,000 Sundry Debtors 55,000
Sundry Creditors 60,000 Cash at Bank 85,000
Bills Payable 40,000 Stock 2,00,000
Workmen Compensation Fund 40,000
8,40,000 8,40,000
Balveer is to be admitted as a partner with effect from 1st April, 2020 on the following terms
(i) Balveer will bring in ` 2,00,000 as capital and ` 1,20,000 as premium for goodwill for 1/5th share of
profit.
(ii) Half premium withdrawn by old partners.
(iii) The assets will be revalued as, land and building ` 4,50,000; furniture ` 1,20,000; stock ` 1,50,000.
(iv) The claim of a creditor for ` 40,000 is settled at ` 35,000.
(v) Bills payable paid-off by raising bank loan.
You are required to show the revaluation account, partners capital accounts and the balance sheet of the
new firm.
o

Girish, Harish and Satish were carrying out a business as partners and sharing profits in the ratio of 2 : 1 : 1.
Their balance sheet as at 31st December, 2019 is as follows
Balance Sheet
(`) (`)
Bills Payable 10,600 Buildings 70,000
Sundry Creditors 11,000 Plant and Machinery 78,000
Girish 75,000 Debtors 22,000
Harish 50,000 (–) Provision for Doubtful Debts (400) 21,600
Satish 55,000 1,80,000 Bank 7,500
Profit and Loss A/c 1,400 Cash 9,900
2,03,000 2,03,000
Girish decided to retire on that date because of health problems. In this regard, following adjustments were
agreed upon
(i) The value of buildings to be increased to ` 96,000.
(ii) The provision for bad and doubtful debts on debtors to be maintained at 3%.
(iii) Plant and machinery should be valued at 20% less.
(iv) Goodwill of the firm is valued at ` 36,000 and Girish’s share is to be adjusted in the remaining
partners’ accounts.
You are required to prepare revaluation account, partners’ capital accounts and balance sheet.
25. What journal entries would be passed for the following transactions on the dissolution of a firm of partners
Utkarsh and Varsha, after various assets and third party liabilities have been transferred to realisation
account?
(i) Workmen compensation reserve stood at ` 6,000 and liability in respect of it was ascertained at `
6,000.
(ii) There was no workmen compensation reserve and firm had to pay ` 1,500 as compensation to the
workers.
(iii) Building (Book value ` 50,000) sold for ` 80,000 through a broker who charged 2% commission.
(iv) Investments (Book value ` 4,000) realised 150%.
26. (i) On 1st April, 2020, Diwakar Housing Private Limited issued 50,00,000, 10% debentures of ` 100 each
at a discount of 10%. These debentures were redeemable at a premium of 5% after four years. Pass
necessary journal entries for issue of debentures.
(ii) Fortune Health Private Limited issued 6,000, 12% debentures of ` 100 each to its vendor Dhruv
and Sons. These debentures are issued @ 15% premium for the consideration of plant purchased. A
cheque of ` 3,50,000 also issued to that vendor. Pass the necessary journal entries of the above given
information.
Part B
27. If the value of current assets is twice the current liabilities and working capital is ` 80,000, what will be the
value of current liabilities?
(a) ` 90,000
(b) ` 70,000
(c) ` 80,000
(d) ` 40,000

28. Which of the following is correct?

(i) Forfeited shares account is shown under the head shareholders’ funds.
(ii) Interest accrued and due on debentures is shown under the head other current liabilities.
(iii) Loose tools are shown under the head current liabilities.
(a) Only (ii) (b) (i) and (iii)
(c) (i) and (ii) (d) All are correct
o
According to you, purchase of inventory on credit will cause the quick ratio to
(a) increase (b) vitiate results
(c) decrease (d) remain unchanged
29. Anjali Education Limited made an operating profit of ` 2,00,000 after charging depreciation of ` 22,000.
During that year, trade payables increased by ` 27,200 and inventory increased by ` 75,000. There was no
change in trade receivables. Assuming that no other factors affected it, what would be the cash generated
from operations?
(a) ` 2,49,200 (b) ` 2,22,000
(c) ` 1,74,200 (d) ` 1,47,000
o
Moonlight Technologies Limited redeemed ` 1,00,000, 9% debentures at 10% premium. What will be the
amount of ‘Cash flows from financing activities’ ?
(a) ` 1,00,000 (b) ` 10,000
(c) ` 1,10,000 (d) None of these
30. Calculate the amount of tax paid, from the following information, for the purpose of preparation of cash
flow statement.

Provision for Income Tax 3,00,000 4,20,000
Provision for Income tax made during the year 2019-20 was ` 4,27,000.
(a) ` 4,20,000 (b) ` 4,70,000
(c) ` 3,00,000 (d) ` 3,50,000
31. Under which head and sub-head will the following items appear in the balance sheet of a company
(i) Computer software under development
(ii) Unclaimed dividends
(iii) Provision for tax
32. From the following balance sheet, calculate the given ratios.
(i) Debt-equity ratio
(ii) Proprietary ratio
Balance Sheet
Particulars 31st March 2020 (`)
(i) Equity Share Capital 45,00,000
2. Non-current Liabilities

Long-term Borrowings 27,00,000

(i) Short-term Borrowings 6,00,000
(ii) Trade Payables 33,00,000
Total 1,20,00,000
II. ASSETS
1. Non-current Assets
(i) Fixed Assets: Tangible Assets 49,50,000
(ii) Long-term Investments 4,80,000
2. Current Assets
(i) Inventories 27,30,000
(ii) Trade Receivables 37,20,000
(iii) Cash and Cash Equivalents 1,20,000
Total 1,20,00,000
33. Inventory turnover ratio is 3 times. Sales are ` 18,000, opening inventory is ` 200 more than the closing
inventory. Calculate opening and closing inventory when goods are sold at 20% profit on cost.
o
A company had a liquid ratio of 1.5 and current ratio of 2 and inventory turnover ratio 6 times. It has total
current assets of ` 80,000 in the year 2020. Find out revenue from operations (Net Sales), if goods are sold
at 25% profit on cost.
34. The summarised balance sheet of Sanskar Enterprises Limited as at 31st March, 2019 and 2020 were as
under
Balance Sheet
as at 31st March, 2019 and 2020
Particulars Note 31st March 2020 31st March 2019
No. (`) (`)
1. Shareholder’s Funds 2,25,000 2,25,000
(i) Share Capital 1,89,000 1,78,000
(ii) Reserves and Surplus 1
2. Non-current Liabilities
Mortage Loan 1,35,000 ––
(i) Trade Payables 67,000 84,000
(ii) Short-term Provisions : Provision for Taxation 5,000 37,500
Total 6,21,000 5,24,500
II. ASSETS
1. Non-current Assets
(i) Fixed Assets 1,60,000 2,00,000
(ii) Non-current Investments 30,000 25,000
2. Current Assets

(i) Inventories 1,05,000 1,20,000

(ii) Trade Receivables 2,27,500 1,05,000
(iii) Cash and Cash Equivalents 98,500 74,500
Total 6,21,000 5,24,500
Notes to Accounts:
Note No. Particulars 2020 (`) 2019 (`)

General Reserve 1,55,000 1,50,000
Statement of Profit and Loss 34,000 28,000
1,89,000 1,78,000
Provision for Taxation 5,000 37,500
(i) Investments costing ` 4,000 were sold during the year 2019-20 for ` 4,250.
(ii) Provision for taxation made during the year was ` 4,500.
(iii) During the year, part of the fixed assets costing ` 5,000 was sold for ` 6,000 and the profit was
included in the statement of profit and loss.
(iv) Dividend paid during the year amounted to ` 20,000.
You are required to prepare the cash flow statement.

Sample Paper 17
Accountancy
PART—A
1. If partners’ capitals are fixed, drawings will be recorded in

(a) partners’ current account (b) partners’ capital account
(c) profit and loss appropriation account (d) None of these
o
________goodwill is the excess of desired total capital of firm over the actual combined capital of all
partners.
(a) Hidden (b) Old
(c) Premium (d) Share
2. The share of retiring partner after all adjustments is ` 50,000. He is paid ` 75,000. His share of goodwill is
(a) ` 75,000 (b) ` 25,000
o
Samar and Amar were partners in a firm sharing profits and losses in the ratio of 3 : 1. They admitted Babar
as a new partner. Samar sacrificed 1/4th of his share and Amar sacrificed 1/4th of her share in favour of
Babar. Babar’s share in the profits of the firm will be
(a) 1/8 (b) 1/4
(c) 7/16 (d) 5/8
3. If Dalajit pays ` 75,000 as his share of goodwill privately to Manjit, an existing partner, the treatment will
be
(a) goodwill account will be debited by ` 3,00,000
(b) goodwill account will be credited by ` 75,000
(c) goodwill account will be debited by ` 75,000
(d) no entry will be passed
4. In case of guarantee to a partner by firm, sacrifice for the guarantee will be made by_______
(a) only that partner who has maximum profit (b) all partners in profit or loss sharing ratio
(c) all partners equally (d) All of these

5. Assertion (A): Manager’s commission is transferred to the debit of profit and loss account.
Reason (R): Managers commission is a charge against profit
Alternatives
(A)
6. A company has issued debentures as collateral security for securing loan from HFPC bank. The company
fails to repay the loan alongwith interest. What is/are the option(s) available for the bank?
(a) It has to use primary security first
(b) If primary security is insufficient, then it can use debentures
(c) It can use debentures
o
Share application account is a_______in nature.
(a) personal account (b) nominal account
(c) real account (d) None of these
7. Param Enterprises Limited issued 2,50,000 shares of ` 10 each at a premium of ` 2 payable as
On application `3
On allotment ` 4 (including premium)
On first call `3
On second and final call `2
Mr. Ishwar who holds 1,000 shares failed to pay the first call money. The company has forfeited the 1,000
shares after the first call. On forfeiture, the amount debited to share capital account will be________
(a) ` 3,000 (b) ` 12,000
(c) ` 8,000 (d) ` 10,000
8. Charan and Harish are partners, sharing profits/losses in the ratio of 3 : 2. Mrs. Charan has given a loan of
` 4,00,000 to the firm and the firm also obtained a loan of ` 2,00,000 from Harish. The firm was dissolved
and its assets were realised for ` 5,00,000. State the order of payment of Mrs. Charan’s loan and Harish’s
loan with reason, if there were no other creditors of the firm.
(a) Both will be paid proportionately (b) Firm is not entitled to pay at dissolution
(c) Firstly, Mrs. Charan’s loan will be paid (d) Firstly, Harish’s loan will be paid
o
Which of the following is correct?
(i) A minor cannot be admitted as a partner.
(ii) A minor can be admitted as a partner, only into the benefits of the partnership.
(iii) A minor can be admitted as a partner but his rights and liabilities are same of adult partner.
(a) Only (iii) (b) Only (ii)
(c) Only (i) (d) (i) and (iv)
9. The subscribed share capital of Satvik Development Private Limited is ` 80,00,000 divided in shares of `
100 each. There were no calls-in-arrears till the final call was made. The final call was paid on 77,500 shares.
The calls-in-arrears amounted to ` 62,500. Calculate the final call per share.
(a) ` 25 (b) ` 35
(c) ` 20 (d) ` 30

o
Authorised capital of a company is ` 2,50,000 which is divided in 1,750 equity shares of ` 100 each and 750,
10% preference shares of ` 100 each. The company issued 1,000 equity shares and 5,00 preference shares.
The public subscribed for 450 equity shares and 225 preference shares out of the issued shares. Subscribed
share capital will be_______
(a) ` 45,000 (b) ` 67,500
(c) ` 2,50,000. (d) ` 2,500
10. According to profit and loss account, the net profit for the year is ` 1,500. The total interest on partners
capital is ` 180 and interest on partner’s drawings is ` 20. The net profit as per profit and loss appropriation
account will amount to
(a) ` 1,700 (b) ` 1,300
(c) ` 1,340 (d) ` 1,960
11. Daksh and Naksh are partners in the ratio of 3 : 2. Their capitals are ` 1,00,000 and ` 50,000 respectively.
Interest on capitals is allowed @ 8% p.a. Firm earned a profit of ` 7,500 for the year ended 31st March, 2021.
As per partnership agreement, interest on capital is treated a charge on profits. Interest on capital will be
(a) Daksh ` 4,500; Naksh ` 3,000 (b) Daksh ` 5,000; Aakash ` 2,500
(c) Daksh ` 8,000; Aakash ` 4,000 (d) No interest will be allowed
12. What will be the entry for receiving application and allotment money on 1,200, 10% debentures of ` 100
each issued at a premium of 10% and redeemable at a premium of 5%.
(a) 10% Debentures A/c Dr. 1,32,000

(b) Bank A/c Dr. 1,32,000
13. Karan, Manan and Naveen are partners sharing profits and losses in the ratio of 5 : 3 : 2. Naveen retired
and his capital balance after adjustments regarding reserves, accumulated profits/losses and gain/loss on
revaluation was ` 5,00,000. Naveen was paid ` 6,00,000 in full settlement. Afterwards, Sravan was admitted
for 1/4th share. The amount of goodwill premium brought by Sravan will be______
(a) ` 1,00,000 (b) ` 5,00,000
(c) ` 2,00,000 (d) ` 1,25,000
14. Pass the journal entry for amount of first call, ` 90,000 received after deducting calls-in-arrears of ` 6,000.
(a) Bank A/c Dr. 96,000

(b) Bank A/c Dr. 90,000
Calls-in-arrears A/c Dr. 6,000
(c) Share First Call A/c Dr. 96,000
To Bank A/c 90,000
To Calls-in-arrears A/c 6,000

DIRECTION : Read the following hypothetical situation and answer Q.No. 15 and 16
Gothic Pharma Limited is a partnership business with Parul, Kiara and Anika as partners engaged in
production and sales of readymade garments. Their capital contributions were ` 5,00,000, ` 5,00,000, `
8,00,000 respectively with the profit sharing ratio of 5 : 5 : 8. As they are now looking forward to expanding
their business, it was decided that they would bring in sufficient cash to double their respective capitals.
This was duly followed by Parul and Kiara, but due to unavoidable reasons, Anika could not do so and
ultimately it was agreed that a new partner, Khushi should be admitted who would bring in the amount that
Anika could not bring and whose share of profits will be the half of Anika’s share which would be sacrified
by Anika only. Consequent to this agreement, Khushi was admitted and she brought in the required capital
and ` 30,000 as premium for goodwill.
15. What will be the new profit sharing ratio of the partners?
(a) 5 : 5 : 8 : 8 (b) 5 : 5 : 4 : 4
(c) 1 : 1 : 1 : 1 (d) None of these
16. What is the amount of capital brought in by the new partner Khushi?
(a) ` 8,00,000 (b) ` 4,00,000
(c) ` 5,00,000 (d) ` 3,00,000
17. Rahul, Deepak and Hemant are partners in a firm. Total capital employed is ` 5,40,000 contributed by them
in their profit sharing ratio. Deepak retires from the firm. On the day of retirement the firm had a balance
of ` 90,000 in the General Reserve Account. Deepak took one of the unrecorded assets of the firm valued at
` 54,000 in part payment and balance amount was paid in cash.
Pass necessary entries on Deepak’s retirement.
18. Renu, Madhu and Usha are parters sharing profits in the ratio of 5 : 4 : 1. Usha is given a guarantee that
her share of profit, in any year will not be less than ` 5,000. The profits for the year ending March 31, 2022
amounts to ` 35,000. Shortfall if any, in the profits guaranteed to Usha is to be borne by Renu and Madhu
in the ratio of 3 : 2. Record necessary journal entry to show distribution of profit among partner.
o
X, Y and Z were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. The partnership deed
provides for charging interest on drawings @10% p.a. The drawings of X, Y and Z during the year ending
31st March, 2020 amounted to ` 20,000, ` 30,000 and ` 50,000 respectively. After the final accounts have been
prepared, it was discovered that interest on drawings had not been charged. Pass the necessary adjustment
entry to rectify the omission of interest on drawings. Also show your working notes clearly.
19. Amber Fertilizers Limited issued 3,000, 10% Debentures of ` 100 each as fully paid to the underwriters for
underwriting commission. Journalise the above in the books of Amber Fertilizers Limited.
o
KGN Industries Limited purchased business of M/s Gurukripa Breweries for a purchase consideration of `
4,80,000. The following assets and liabilities were taken over:
`
Plant and Machinery 4,50,000
Furniture 80,000
Inventories 1,70,000
Sundry Liabilities 1,90,000
The purchase consideration was paid partly by accepting a bill of ` 30,000 and partly by the issue of 9%
debentures of ` 100 each at a discount of 10%.
Pass necessary journal entries for the above transactions in the books of KGN Industries Limited.
20. Following is the Balance Sheet of Naman, Ankush and Harshad as on 31st March, 2020. Their profit sharing
ratio is 2:2:1.


Capital Accounts: Land and Building 2,00,000
Naman 1,20,000 Profit and Loss A/c 64,000
Ankush 1,20,000
Harshad 52,000 2,92,000
3,44,000 3,44,000
Ankush died on 30 June 2022. The Partnership Deed provided for the following on the death of a partner:
th
(i) Goodwill of the firm was valued at 2 years’ purchase of the average profit of the last 5 years. The
profit for the year ended 31st March 2021; 31st March 2020; 31st March 2019 and 31st March 2018 were
` 20,000; ` 32,000; ` 44,000 and ` 88,000 respectively.
(ii) Ankush’s share of profit or loss till the date of his death was to be calculated on the basis of profit or
loss for the year ended 31st March, 2022.
Pass Journal entries to transfer net amount to executor’s A/c
21. Aries Agro Limited has an authorised capital of ` 50,00,000 divided into equity shares of ` 100 each. The
company invited applications for 40,000 shares, applications for 36,000 shares were received. All calls were
made and duly received except for 500 shares on which the final call of ` 20 was not received. The company
forfeited 200 shares on which final call was not received. Show how share capital will appear in the balance
sheet of the company. Also prepare ‘Notes to Accounts’ for the same.
22. Arti and Preeti were partners sharing profits and losses in the ratio of 3:2. The court ordered for the
dissolution of their partnership firm. Preeti took the responsibility of realisation. She was paid ` 1,000 as
commission for this service.
Their Balance Sheet as on that date stood as follows:
Balance Sheet
as at 31st March 2022
(`)
Outstanding expenses 12,000 Cash at Bank 29,000
Employee’s Provident Fund 12,000 Stock 52,000
Bank Loan 70,000 Furniture 20,000
Capital Accounts: Machinery 33,000
Arti 50,000 Profit and Loss account 36,000
Preeti 30,000
2,08,000 2,08,000
Following was agreed upon:
(i) Arti agreed to take over furniture at 90% of the book value.
(ii) ` 5,000 of debtors proved bad.
(iii) Preeti took over ` 30,000 worth of the stock at ` 22,800. The remaining stock was sold at a loss of
10%.
(iv) Machinery was taken over by creditors in full settlement of their claim.
(v) The Bank Loan was paid along with interest of ` 3,000.
(vi) Other liabilities were paid in full.
(vii) The expenses on realisation amounted to ` 800.
Prepare Realisation account.

23. Fill in the missing information in the journal entries given below:
In the books of Max Steel Limited
Journal

Bank A/c Dr. ..........
To ...................................... ..........
(Being application money received on 1,00,000 shares @ ` 5
per application including ` 2 for premium)
Equity Share Application A/c Dr. ..........
To Equity Share Capital A/c ..........
To ...................................... ..........
To ...................................... 1,25,000
To ...................................... ..........
(Being application money adjusted. 25,000 applications were
rejected and pro-rota allotment was made in the ratio of 3:2
to the remaining applicants. Excess of application money was
adjusted towards Share Allotment a/c)
............................................. Dr. ..........
To ...................................... ..........
(Being money due on allotment @ ` 5 per share including `
2 for premium)
Bank A/c Dr. ..........
To Equity Share Allotment A/c ..........
(Being amount received on allotment except on 500 shares
allotted to Amit)
............................................. Dr. ..........
To ...................................... ..........
(Being First & final call amount due @ ` 5 per share including
` 1 for premium )
Bank A/c Dr. ..........
To Equity Share First & Final Call A/c ..........
(Being First & final call amount received except shares held
by Amit and Sumit who applied for 1,500 shares)
Share Capital A/c Dr. ..........
............................................. Dr. ..........
To ...................................... ..........
To Share First & Final Call A/c ..........
To ...................................... ..........
(Being shares of Amit and Sumit forfeited for non-payment
of amount due)
............................................. Dr. 11,000

To ...................................... ..........
(Being re-issue of 1,000 forfeited shares @ ` 11 per share fully
paid. These shares included all shares held by Amit)
Share forfeited A/c Dr. ..........
To Capital Reserve A/c ..........
(Being Profit made on forfeited shares transferred to capital
reserve)
o
Fill in the missing information in the Journal entries given below:
(a)
Journal

............................................. Dr. ..........
To Share Allotment A/c ..........
...................................... ..........
...................................... 2,500
(Being forfeiture of 500 equity shares of ` 50 (` 30 called
up) for non-payment of allotment money of ` 20 per share
(including ` 5 per share premium and first call of ` 10 share)
............................................. Dr. ..........
............................................. Dr. ..........
............................................ ..........
(Being 200 shares reissued as ` 30 called up for ` 25 per share)
............................................. Dr. ..........
............................................ ..........
(Being gain on reissue of forfeited shares if any, transferred to
capital reserve)
(b)
Journal
....................................... Dr. ..........
...................................... ..........
...................................... ..........
...................................... 15,000
(Being forfeiture of 4,000 shares of Kamlesh who had applied
for 5,000 shares on account of non-payment of allotment
money ` 5 (including ` 2 premium) and First Call ` 2. Only
` 3 per share was received with application)
Bank A/c Dr. 24,000
............................................. Dr. ..........
To Share Capital A/c ..........
(3000 shares reissued as fully paid shares for ` 8 per share)

............................................. Dr. ..........

............................................ ..........
(Being gain on reissue of forfeited shares transferred to capital
reserve)
24. Anita and Sunita were partners sharing profits and losses in the ratio of 5:3. Their Balance Sheet as at 31st
March, 2022 was as under:

Profit and Loss Account 20,000 Investments 60,000
Capital Accounts: Furniture 75,000
Anita 3,20,000 Machinery 2,25,000
Sunita 1,90,000 Goodwill 1,04,000
7,07,000 7,07,000
On 1st April, 2022 they admitted Swati into the partnership firm for 1/4th share which she acquired from
Anita and Sunita in the ratio of 2:1 respectively. Other adjustments were as follows:
(i) The Goodwill of the firm is valued at ` 96,000 and Swati was unable to contribute her share of
goodwill in cash.
(ii) One customer who owed the firm ` 2,000 became insolvent and nothing could be realised from him.
(iii) Create a provision of 5% for Doubtful Debts.
(iv) 50% of the Investments were taken over by the old partners in their profit sharing ratio. Remaining
Investments were valued at ` 35,000.
(v) Claim on Workmen Compensation was established at ` 16,000.
(vi) One month salary of ` 16,000 was outstanding.
(vii) Swati is to contribute ` 1,20,000 as capital.
o
Kanak, Mahima and Sudha are partners sharing profits and losses in the ratio of 5:3:2. Their Balance Sheet
as on 31st March, 2022 stood as under:

General Reserve 22,000 Less: Provision for doubtful debts (3,000) 22,000
Capital A/c: Stock 18,000
Kanak 70,000 Investments 30,000
Mahima 50,000 Furniture 20,000
Sudha 40,000 Machinery 70,000
Goodwill 30,000
2,12,000 2,12,000
On the above date Mahima retired and the terms of retirement were:
(i) Mahima sells her share of goodwill to Kanak for ` 4,000 and to Sudha ` 2,000.
(iii) Provision for doubtful debts to be increased by ` 525.

(vii) The continuing partners agreed to pay ` 20,000 in cash on retirement to Mahima to be contributed
in their new profit sharing ratio. The balance to be treated as Loan.
Prepare Revaluation A/c and Partners’ Capital Accounts.
25. Manoj, Mohit and Mukul were partners in a firm sharing profits in the ratio of 5:1:4. Their Balance Sheet
as on 31st March 2022 was as follows:
Balance Sheet of Manoj, Mohit and Mukul

as at 31st March 2020
Creditors 1,47,000 Land 5,40,000
Bills Payable 33,000 Building 2,70,000
General reserve 2,10,000 Plant 1,90,000
Capitals: Stock 75,000
Manoj 5,00,000 Debtors 60,000
Mohit 1,00,000 Bank 15,000
Mukul 1,60,000 7,60,000
11,50,000 11,50,000
From 1st April, 2022 Manoj, Mohit and Mukul decided to share future profits equally. For this it was agreed
that:
(i) Goodwill of the firm be valued at ` 1,80,000.
(ii) Land to be revalued at ` 6,00,000 and building to be depreciated by 10%.
(iii) Creditors of ` 15,000 were not likely to be claimed and hence be written-off.
Prepare Revaluation Account and Partners’ Capital Accounts.
26. You are required to pass the journal entries relating to the issue of the debentures in the books of Kevin
Pharma Limited, under the following cases:
(i) 120, 8% debentures of ` 1,000 each are issued at 5% discount and repayable at par. Balance in
Securities Premium Reserve is ` 10,000.
(ii) 150, 7% debentures of ` 1,000 each are issued at 5% discount and repayable at premium of 10%.
Balance in Securities Premium Reserve is ` 20,000.
(iii) 80, 9% debentures of ` 1,000 each are issued at 5% premium.
PART—B
2
27. If current liabilities are ` 9,000 and current assets are 3 rd of current liabilities, then the current ratio
is_______
(a) 1 : 1 (b) 1 : 2
(c) 0.67 : 1 (d) 0.33: 1
28. Which of the following is correct in relation to the tools of vertical analysis?
(i) Ratio Analysis
(ii) Comparative statements
(iii) Common size statements
Codes
(a) Both (i) and (ii) (b) Only (i)
(c) Only (iii) (d) Both (i) and (iii)

o
In balance sheet, ‘Bank overdraft’ is an item of sub-head
(a) Short-term Borrowings
(c) Short-term Provisions
(d) Trade Payables
29. Buland Securities Private Limited has the opening balance of furniture ` 4,00,000 and closing balance `
4,20,000 and depreciation opening and closing balance ` 1,00,000 and ` 1,10,000.
During the year, a furniture costing ` 40,000 with its accumulated depreciation of ` 24,000 was sold for `
20,000. Calculate purchase value of furniture.
(a) ` 60,000 (b) ` 66,000
(c) ` 52,000 (d) ` 68,000
o
Vikas Engineering Limited has the machinery opening balance of ` 35,00,000 and closing balance of `
47,60,000.
Depreciation for the year was ` 4,00,000. Calculate purchase value of machinery.
(a) ` 32,60,000
(b) ` 22,40,000
(c) ` 38,00,000
(d) ` 16,60,000
30.

6% Debentures –– 6,00,000
5% Debentures 10,00,000 ––
6% debentures were redeemed on 1st July, 2019 and new 5% debentures were issued on the same date at a
discount of 5%.
You are required to calculate the amount of interest on debentures to be mentioned under financing activity.
(a) ` 46,500 (b) ` 9,000
(c) ` 50,000 (d) ` 37,500
31. Under which heads will the following items will appear in the Balance Sheet of a Company?
(a) Shares Option Outstanding Account
(b) Unclaimed Dividend
(c) Advances recoverable in cash
(d) Share Forfeiture A/c
(e) Calls-in-arrears
(f) Machinery (under construction)
32. The following information of Virat Industries Limited has been provided.
Gross Profit Ratio 15%
Inventory velocity = 2 times
Trade Receivables velocity = 3 months
Gross Profit = ` 60,000
Closing inventory is equal to Opening inventory
Determine:
(i) Revenue from Operations
(ii) Closing inventory

33. (a) From the following information, compute Debt to Capital Employed Ratio.
`
Capital Employed 43,50,000
Investment 2,40,000
Plant 7,00,000
Trade Receivables 4,00,000
Cash and Cash Equivalents 3,60,000
Equity Share Capital 22,50,000
8% Debentures 18,00,000
Capital Reserve 3,40,000
Surplus (Balance in Statement of Profit and Loss) (50,000)
(b) From the following information related to 2021-22, compute Fixed Assets Turnover Ratio.
`
Equity share capital 6,00,000
General reserve 1,50,000
Balance in Statement of Profit and Loss (Dr.) 2,50,000
12% Debenture 4,50,000
Creditors 1,40,000
Revenue from Operations for the year 2021-22 were ` 30,00,000.
o
(a) From the following information calculate operating ratio:
Revenue from Operations ` 6,80,000; Rate of Gross Profit on cost 25%; Selling expenses ` 1,44,000;
Administrative expenses ` 73,000.
(b) With the help of the following information, calculate return on Investment; Net Profit after interest and
Tax ` 9,00,000; 10% Debentures ` 12,00,000; Tax @ 40%; Capital Employed ` 82,20,000.
34. Prepare a Cash Flow Statement from the following Balance Sheet of Mayur Textiles Limited.

No. (`) (`)
(a) Share Capital 32,00,000 27,20,000
(a) Short term Borrowings (Cash Credit) 32,000 40,000
(b) Trade Payables 80,000 1,60,000
(c) Other Current Liabilities 3 80,000 64,000
Total 41,92,000 37,84,000
II. ASSETS

(a) Property, Plant and Equipments and Intangible Assets

(i) Property, Plant and Equipments: Tangible Assets 12,80,000 14,40,000
(b) Non-Current Investments 4,80,000 4,00,000
2. Current Assets:
(a) Inventories 1,60,000 ––
(c) Cash and Cash Equivalents 8,00,000 7,04,000
Total 41,92,000 37,84,000
Notes to Accounts:

2. Long-term Borrowings
9% Debentures 3,20,000 1,60,000
Goodwill 9,60,000 8,00,000
(a) Depreciation of ` 1,60,000 was provided on Tangible Assets during the year.
(b) A Machine costing ` 40,000 (accumulated depreciation provided thereon ` 24,000) was sold for ` 8,000
during the year.
(c) Debentures has been issued on April 1, 2021.
******

Sample Paper 18
Accountancy
PART—A
1. Debentures that do not carry any charge or security on assets of the company are known as_______.
(a) Registered Debentures
(b) Convertible Debentures
(c) Unsecured Debentures
(d) Secured Debentures
2. What will be the correct sequence of events?

(i) Forfeiture of shares
(ii) Default on Calls
(iii) Re-issue of shares
(iv) Amount transferred to capital reserve
Options:
(a) (iii), (iv), (i), (ii) (b) (ii), (i), (iii), (iv)
(c) (ii), (iv), (i), (iii) (d) (i), (iv), (ii), (iii)
o
At the time of Issue of Debentures for consideration other than cash, Net Assets minus Capital Reserve is:
(a) Goodwill (b) Purchase Consideration
(c) Liquid Assets (d) Total Assets
3. In a partnership firm, a partner withdrew ` 5,000 per month on the first day of every month during the year
for personal expenses. If interest on drawings is charged @ 6% p.a., the interest charged will be:
(a) ` 1,650 (b) ` 1,800
(c) ` 1,950 (d) ` 3,600
4. Radico Corporation Limited took over machinery costing ` 1,80,000 of Blue Enterprises Limited at an
agreed price of ` 1,62,000 and payment made to Blue Enterprises Limited by the issue of_______6%
debentures of ` 100 each at premium of 20%. The number of debentures issued in favour of Blue Enterprises
Limited will be:
(a) 1800 (b) 1350
(c) 1300 (d) None of the above
o
________is the maximum amount of share capital that a company can raise in its life time.
(a) Issued Capital (b) Authorised capital
(c) Subscribed Capital (d) None of these

5. At the time of Dissolution of a Partnership Firm, there exists an office equipment worth ` 68,000 in the
books of the firm and its realized value is not given.
In this situation the realized value of office equipment will be :
(a) Market Value
(b) Fair Value
(c) Nil
(d) 68,000
6. As per Section 52 of Companies Act 2013, Securities Premium cannot be utilised for:
(a) Writing off discount on issue of securities
(b) Writing off preliminary expenses
(c) Writing off capital losses
(d) Issue of fully paid bonus shares
7. Koshik and Arvind are the partners in a firm sharing profits and losses in the ratio of 5:3. Zahir is admitted
who acquires 1/3rd of Arvind’s share. The new ratio among partners will be:
(a) 5 : 2 : 1
(b) 1 : 4 : 5
(c) 4 : 5 : 1
(d) 5 : 4 : 1
o
In the absence of agreement to contrary, the profit sharing ratio will be:
(a) equal
(b) in ratio of work done
(c) in ratio of capital
(d) none of these
8. Assertion (A): At the time of change in profit sharing ratio among the existing partners, the adjustment
entry to be passed in all situations is :
Gaining Partners’ Capital/Current A/cs Dr.
To Sacrificing Partners’ Capital/Current A/cs
Reason(R): The above adjustment entry is passed only when profit exists on the day of change in profit
sharing ratio. In case of loss the reverse entry is passed.
9. Harish, Girish and Satish were three partners sharing profits in the ratio of 3:2:1. At the end of the year,
they distributed the profits equally. The profit for the year was ` 1,20,000. The adjustment entry to rectify
the error will be:
(a) Satish’s Capital A/c Dr. 20,000
To Harish’s Capital A/c 20,000
(b) Harish’s Capital A/c Dr. 60,000
Girish’s Capital A/c Dr. 40,000
Satish’s Capital A/c Dr. 20,000
To Profit and Loss Appropriation A/c 1,20,000
(c) Harish’s Capital A/c Dr. 20,000
To Satish’s Capital A/c 20,000
(d) None of these
o

If loan from a partner Chetan ` 65,000 appears in balance sheet and his capital balance is ` 15,000 (Dr.)
then amount payable to him is:
(a) ` 50,000 (b) ` 80,000
(c) ` 15,000 (d) ` 65,000
10. Balraj and Devraj are partners in a firm sharing profits in the ratio of 5 : 3. They admitted Hemraj as a
new partner. The new profit sharing ratio will be 4 : 3 : 2. The firm’s goodwill on Hemraj’s admission was
valued at ` 1,26,000. But Hemraj could not bring any amount of goodwill in cash. Credit will be given to:
(a) Balraj ` 1,02,375; Devraj ` 23,625 (b) Balraj ` 22,750; Devraj ` 5,250
(c) Balraj ` 16,000; Devraj ` 12,000 (d) Balraj ` 17,500; Devraj ` 10,500
11. The subscribed share capital of Info Edge India Limited is ` 1,00,00,000 of ` 100 each. There were no calls in
arrears till the final call was made. The final call made and it was paid on 97,500 shares. The calls in arrears
amounted to ` 75,000. The per share final call was:
(a) ` 30 (b) ` 45
(c) ` 20 (d) ` 35
12. If total assets are ` 2,00,000; total liabilities are ` 40,000; amount realised on sale of assets is ` 1,75,000 and
realisation expenses are ` 3,000, the profit or loss on realisation will be:
(a) Loss ` 25,000 (b) Loss ` 28,000
(c) Loss ` 68,000 (d) Profit ` 12,000
13. At the time of reconstitution of a partnership firm, recording of an unrecorded liability will lead to:
(a) Loss to the existing partners
(b) Gain to the existing partners
(c) Neither gain nor loss to the existing partners
o
Vikas, Yogesh and Kunal are partners in the ratio of 5:3:2. If Yogesh’s share of profit at the end of the year
amounted to ` 1,50,000, what will be Vikas’s share of profits?
(a) ` 2,50,000
(b) ` 5,00,000
(c) ` 3,00,000
(d) ` 1,50,000
14. On dissolution of a firm, its Balance Sheet revealed Total Creditors ` 65,000, Total capital ` 50,000, Cash
Balance ` 8,000. Its assets were realized at 12% less than the Book Value. Loss on realization will be:
(a) ` 3,600
(b) ` 11,400
(c) ` 12,840
(d) ` 11,000
DIRECTION : Read the following hypothetical situation, Answer Question No. 15 and 16.
Uday and Abhey are partners with capitals of 2,00,000 and 1,00,000 respectively. The distribution of profit
is according to following provisions of the deed.
(a) Partners are entitled to interest on capital @ 5% p.a.
(b) Abhey being a working partner was also allowed a yearly salary of ` 20,000.
(c) Profits were to be divided as follows:
(i) First ` 30,000 in proportion to their capitals
(ii) Next ` 20,000 in the ratio of 3:2
(iii) Remaining profits to be shared equally.
Uday’s share in divisible profit is ` 39,500.

15. What is the total appropriations to Abhey for interest on capital and salary ?
(a) ` 29,500 (b) ` 18,000
(c) ` 25,000 (d) ` 25,500
16. What is the share of divisible profit going to Abhey ?

(a) ` 32,500
(b) ` 25,500
(c) ` 28,500
(d) ` 25,000
17. Gaurav, Sourav and Karan are partners in a firm. Total capital employed is ` 5,40,000 contributed by them
in their profit sharing ratio. Sourav retires from the firm. On the day of retirement the firm had a balance
of ` 90,000 in the General Reserve Account. Sourav took one of the unrecorded assets of the firm valued at
` 54,000 in part payment and balance amount was paid in cash.
Pass necessary entries on Sourav’s retirement.
18. From the following Balance Sheet of Carlos and Justin, calculate interest on capital and interest on drawings
@ 5% per annum for the year ended 31st March, 2022.

Capital Accounts : Sundry Assets 1,84,000
Carlos 90,000
Justin 70,000
Profit and Loss Appropriation A/c 24,000
(2021-2020)
1,84,000 1,84,000
During the year, Carlos withdrew ` 2,000 at the beginning of every month and Justin withdrew ` 15,000
during the year. The profits for the year ended 31st March, 2022 were ` 84,000.
o
Mathew, Henry and Jaxon are partners sharing profits and losses in the ratio of 3:2:1. From 31st March 2022,
they decided to share profits and losses equally.
The partnership deed provides that in the event of any change in the profit sharing ratio, the goodwill should
be valued at two years’ purchase of the average profits of the preceding five years. The profits and losses for
the preceding years are 2017-18 profit ` 90,000, 2018-19 profit ` 70,000, 2019-20 loss ` 30,000, 2020-21 profit
` 50,000 and 2021-22 profit ` 70,000.
It was realised that the following omission was made.
A computer purchased on October 1st 2021 for ` 25,000 was wrongly considered as revenue expenditure and
debited to Profit and Loss Account, on which depreciation is to be charged @ 20% p.a.
Calculate value of goodwill after the above adjustment and give journal entry for treatment of goodwill on
change in profit sharing ratio.
19. Dhruv Industries Limited acquired assets of ` 25,00,000 and took over creditors of ` 5,00,000 from Simon
Enterprises for a purchase consideration of ` 24,00,000. The consideration was paid by the issue of 9%
Debentures of ` 100 each at a premium of 20%, to be redeemed at par after 5 years.
Pass the necessary Journal entries for the above transactions.
o
Kabra Minerals Limited has an authorised capital of ` 10,00,000 divided into Equity Shares of ` 10 each.
The company invited applications for 50,000 shares. Applications for 48,000 shares were received. All calls
were made and duly received except the final call of ` 3 per share on 1,000 shares. These shares on which
the final call was not received were forfeited. Show how the Share Capital will appear in the Balance Sheet
of the company as per Schedule III Part I of the Companies Act, 2013. Also prepare Notes to Accounts for
the same.

20. Neel, Nihal and Nimit were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. On 31st
March, 2022 their Balance Sheet was as follows:

Creditors 3,00,000 Fixed Assets 4,50,000
General Reserve 1,50,000 Stock 1,50,000
Capitals: Debtors 2,00,000
Neel 2,00,000 Bank 1,50,000
Nihal 2,00,000
Nimit 1,00,000 5,00,000
9,50,000 9,50,000
Nihal died on 12.6.2022. According to the partnership deed, the legal representatives of the deceased partner
were entitled to the following:
(i) Balance in his Capital Account.
(ii) Interest on Capital @ 12% p.a.
(iii) Share of goodwill. Goodwill of the firm on Nihal’s death was valued at ` 60,000.
(iv) Share in the profits of the firm till the date of his death, calculated on the basis of last year’s profit.
The profit of the firm for the year ended 31.3.2022 was ` 5,00,000.
Prepare Nihal’s Capital Account to be presented to his representatives.
21. A company issued 5,000 equity shares of ` 10 each at a premium of ` 2 payable ` 2 on application, ` 5 on
allotment and ` 5 on call. All money was duly received except for the following:
Kushal a holder of 200 shares paid only the application money.
Praveen a holder of 300 shares paid the application and allotment money.
All the above shares were forfeited by the company after the call was made and later 400 shares including
all shares of Kushal were reissued at ` 90 per share.
Pass journal entries for forfeiture and reissue of shares.
22. Navya, Divya and Somya were partners sharing profits and losses in the ratio of their capitals. Their Balance
Sheet as on 31st as March, 2022 stood under:

General Reserve 18,000 Less : Provision for Bad debts (1,000) 19,000
Capital A/c : Stock 28,000
Navya 90,000 Investments 46,000
Divya 60,000 Furniture 25,000
Somya 30,000 Machinery 90,000
2,40,000 2,40,000
On the above date Navya retired.
Goodwill of the firm is valued at ` 30,000 and is to be adjusted in the Capital accounts of Divya and Somya
who decide to be equal partners in future.
Fill in the missing information in the Revaluation Account, Partners’ Capital Accounts and the Balance
Sheet of the new firm after Navya’s retirement.
Dr. Revaluation A/c Cr.

To Provision for debtors A/c ............ By Investments A/c 5,000
To Machinery A/c ............ ........................................ ...........

.................................... 2,000 By Loss transferred to :

Navya’s Capital A/c ...........
Divya’s Capital A/c ...........
Somya’s Capital A/c ...........
........... ...........
Dr. Partners’ Capital A/cs Cr.

Particulars Navya Divya Somya Particulars Navya Divya Somya
(`) (`) (`) (`) (`) (`)
By Navya’s Capital A/c ........ ........ By Balance b/d ........ ........ ........
.......................... ......... ........ ........ ........................... ........ ........ ........
By Cash 15,000 By Divya’s Capital A/c ........
By Navya’s Loan A/c ........ By Somya’s Capital A/c
To Balance c/d ........ ........ ........
........ ........ ........ ........ ........ ........
Balance Sheet of the new firm

Creditors 30,000 Cash in hand ........
Claim for damages 2,000 Less : Provision (1,500) 18,500
Navya’s Loan A/c ........ Stock 28,000
Capital A/cs Investments ........
Divya ........ Furniture 25,000
Somya ........ ........ Machinery 81,000
Prepaid Insurance 2,000
........ ........
23. Vibha Nutrition Limited with an Authorised Capital of ` 6,00,000 invited applications for 40,000 equity
shares of ` 10 each payable ` 3 on Application ` 4 on allotment (including premium of ` 1) and ` 4 on First
and Final Call. The issue was oversubscribed by 20,000 shares.
Allotment was made as under:
To applicants of 30,000 shares – 30,000 shares
To applicants of 5,000 shares – Nil
To balance applicants – 10,000 shares
Excess money received on application was adjusted against sums due on allotment and call. All money was
duly received. Give journal entries to record the above transactions and show Share Capital in the Balance
Sheet of the Company.
o
Jain Industries Limited offered for public subscription 20,000 Equity shares of ` 100 each at ` 110 per share.
The amount were payable as follows:
On Allotment ` 40 per share (including ` 10 as premium).
On First & Final call ` 40.
Applications for 24,000 shares were received and pro-rata allotment was made.
Zafar, an applicant for 240 shares, failed to pay the allotment and call money.
Riyaz, a holder of 400 shares, failed to pay the first and final call.
All these shares on which amount was unpaid, were forfeited.

Out of the forfeited shares 300 (the whole of Zafar’s share being included) were reissued @ ` 80 per share
fully paid up. Journalise the above transactions and prepare share forfeited A/c.
24. Omkaar and Samarth are partners sharing profits and losses in the ratio of 3:2. Their Balance Sheet as at
31st March, 2022 was as follows:

Outstanding Expenses 20,000 Cash in hand 8,000
Workmen Compensation Fund 70,000 doubtful debts (20,000) 1,00,000
General Reserve 40,000 Investments 1,00,000
Capital Accounts : Furniture 60,000
Omkaar 2,00,000 Machinery 3,08,000
Samarth 1,60,000
6,56,000 6,56,000
On 1 April, 2022 they admitted Charan as a partner for 1/10 share in profits which he acquired equally
st th
from Omkaar and Samarth on the following terms:

(i) Charan is to bring ` 50,000 as Capital and it was decided that the capital of all partners shall be in
proportion to their profit sharing ratio on the basis of Charan’s Capital. Any deficiency or excess of
capital will be adjusted through opening Current Accounts.
(ii) The Goodwill of the firm is valued at ` 60,000 and Charan will contribute his share of goodwill in
cash.
(iv) Outstanding expenses will be reduced to ` 6,000.
(v) Depreciate stock by 5%.
(vi) Market value of investments was ` 70,000.
o
Manoj, Vicky and Darshit are partners sharing profits and losses in the ratio of 3:2:1. Their Balance Sheet
as on 31st March, 2022 stood as under :

General Reserve 18,000 Less : Provision for doubtful
Investment Fluctuation Fund 4,000 debts (10,000) 60,000
Capital A/cs : 1,40,000 Stock 80,000
Manoj 1,60,000 Investments 44,000
Vicky 1,00,000 Furniture 48,000
Darshit Machinery 2,48,000
Goodwill 24,000
5,48,000 5,48,000
On the above date Vicky retired. It is agreed that:
(i) Goodwill of the firm will be valued at ` 90,000.
(ii) Value of Machinery and Furniture to be depreciated by 5%.
(iii) Provision for doubtful debts to be maintained at 20% on Sundry Debtors.
(iv) Out of total insurance paid, premium amounting to the extent of ` 1,000 to be treated as prepaid
insurance. This was earlier debited to the Profit and Loss Account.

(v) The total capital of the new firm is decided to be ` 2,40,000. Necessary adjustments to be made in
cash.
(vi) Vicky will be paid 20% of the total amount due to him in cash and the balance will be transferred to
his Loan Account.
Prepare Revaluation A/c, Partners’ Capital Accounts and Balance Sheet of Manoj and Darshit after Vicky’s
retirement.
25. Dhruv, Harshil and Kabir are partners sharing profits in the ratio 3 : 2 : 1. On 1st April, 2022 their Balance
Sheet stood as follows:

Capitals: Goodwill 30,000
Dhruv 43,000 Machinery 42,000
Harshil 30,000 Investments 24,000
Kabir 40,000 1,13,000 Furniture 8,000
Investmetn Fluctuation Fund 10,000 Debtors 33,000
Workmen Compensation Reserve 20,000 Stock 20,000
1,85,000 1,85,000
On the above data, they decided to share the future profits in the ratio 5 : 3 : 2. For this purpose, the
goodwill of the firm was valued at ` 1,80,000. The partners also agreed for the following terms:
(a) Claim against workmen compensation reserve was valued at ` 15,800.
(b) A debtor of ` 3,000 turned bad. A provision of 5% on debtors is to be created.
(c) Assets were revalued as follows: Machinery ` 50,000; Investments ` 20,000; Furniture ` 5,000 and
Stock ` 15,000. Prepare Revaluation A/c and Partners’ Capital A/cs.
26. Sampann Education Private Limited, an educational company was incorporated on 1st April 2005 with
registered office in New Delhi. The company raised the funds by issue of shares specified under capital
clause of Memorandum of Association. The company is in need to purchase a building worth ` 22,00,000 to
open a new branch. Since the company is a zero-debt company, the directors decided to avail the benefits of
financial leverage by issuing 12% debentures of ` 100 each at 10% premium against the purchase of building
from the vendor (Surya). These debentures are to be redeemed at 5% premium after 5 years.
You are required to answer the following questions:
(i) State the amount credited to securities premium account while issuing debentures.
(ii) Pass journal entry for issue of debentures to Surya.
(iii) Pass journal entry to write off ‘Loss on Issue of Debentures Account’.
PART—B

o
29. What will be the value of shareholder’s fund, if 12% debentures are ` 5,00,000 and debt-equity ratio is
2.5 : 1 ?
(a) ` 2,00,000
(b) ` 4,00,000
(c) ` 3,00,000
(d) ` 5,00,000
to_______
(a) ` 60,000 (b) ` 50,000
(c) ` 10,000 (d) ` 40,000
o
(a) ` 42,000 (b) ` 35,000
(c) ` 28,000 (d) ` 29,000
31. Under which main heads and sub-heads of Equity and Liabilities are the following items shown in the
Balance Sheet of a company as per Schedule III:
(i) Unclaimed Dividend
(ii) Calls-in-Arrears
(iii) Interest Accrued but not due on Debentures
(iv) Arrears of Fixed Cumulative Preference Dividends
(v) Employees provident fund
(vi) Debentures due for redemption in the current financial year
32. “The limitation of financial statements also form the limitations of the Ratio Analysis”Explain the statement
and also explain any two other limitations of Ratio Analysis apart from the identified above.
33. (a) From the following information calculate the Inventory Turnover Ratio.
Revenue from Operations – ` 2,00,000
Gross Profit 25% on cost
Opening Inventory is 1/3rd of the value of the Closing Inventory Closing inventory is 30% of Revenue
from Operations.
(b) Net Profit ratio of a company was 10%. Its indirect expenses were ` 40,000 and its cash revenue from
operations were ` 1,50,000. The credit revenue from operations was 60% of the total revenue from
operations. Calculate the Gross profit ratio of the company.
o
(a) Net Profit after Interest and Tax was ` 4,00,000, Rate of Tax is 20%. The company has 12% debentures
of ` 8,00,000. Equity Share Capital amount to ` 12,00,000. Calculate interest coverage ratio.
(b) The Gross Profit Ratio of a company is 60%. Its gross profit is ` 9,60,000. Total Assets are ` 12,00,000,
Current Assets ` 8,00,000 and Current Liabilities ` 5,60,000. Calculate Working Capital Turnover
Ratio.

34. From the following information, calculate Net Cash from Operating Activities and Investing Activities:

Surplus, i.e. Balance in Statement of Profit and Loss 2,50,000 10,00,000
Trade Payables 1,00,000 3,75,000
Current Assets (Trade Receivables and Inventories) 11,50,000 13,00,000
Property, Plant & Equipment: Tangible Assets (Machinery) 21,25,000 23,30,000
Accumulated Depreciation 10,62,500 11,00,000
(i) A Machinery having a net book value of ` 1,00,000 (Depreciation provided thereon ` 1,62,500) was
sold at a loss of ` 20,000.
(ii) Tax paid during the year ` 75,000.
******

Pre-Board Papers With MS Accountancy

Uploaded by

Copyright:

Available Formats

Pre-Board Papers With MS Accountancy

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Pre-Board Papers With MS Accountancy

Uploaded by

Copyright:

Available Formats

Marking Scheme links are on each paper

3. Which of the following is/are method(s) of valuation of goodwill?

Click the Following Button to See the Free MS/Solutions

Click the Following Button to See the Free MS/Solutions

11. TDS refers to______relating to debenture interest.

Liabilities Amount (`) Assets Amount (`)

Click the Following Button to See the Free MS/Solutions

An Extract of Balance Sheet

(a) David’s Capital A/c Dr. 9,000

Click the Following Button to See the Free MS/Solutions

Click the Following Button to See the Free MS/Solutions

Capital A/cs Machinery 18,40,000

Click the Following Button to See the Free MS/Solutions

Click the Following Button to See the Free MS/Solutions

Balance Sheet (Extract)

Click the Following Button to See the Free MS/Solutions

Click the Following Button to See the Free MS/Solutions

Particulars 31 March 2020 (`) 31 March 2019 (`)

Click the Following Button to See the Free MS/Solutions

2. When shares offered to public are subscribed completely, then it is referred to as

4. Claim of the retiring partner is payable in which of the following form?

Click the Following Button to See the Free MS/Solutions

9. Partners’ current account is maintained under

Click the Following Button to See the Free MS/Solutions

(a) Equity Share First Call A/c Dr 50,000

(a) Bank A/c Dr 1,00,000

Click the Following Button to See the Free MS/Solutions

Profit and Loss A/c

15. What will be interest on loan ?

Liabilities Amount (`) Assets Amount (`)

(i) Goodwill of the firm is to be valued at ` 1,75,000.

Click the Following Button to See the Free MS/Solutions

Dr. Realisation A/c Cr.

Click the Following Button to See the Free MS/Solutions

To Goodwill 20,000 By Cash A/c: (Assets realised)

Dr. Partner’s Capital A/cs Cr.

Dr. Cash A/c Cr.

Liabilities Amount Assets Amount

Liabilities Amount Assets Amount

Click the Following Button to See the Free MS/Solutions

Balance Sheet as at 31.03.2022

Click the Following Button to See the Free MS/Solutions

Cash & Cash Equivalents 4,000 2,000

Particulars 31 March 2022 (`) 31 March 2021 (`)

Click the Following Button to See the Free MS/Solutions

Click the Following Button to See the Free MS/Solutions

(c) ` 50,00,000 (d) ` 30,00,000

6. On the admission of a new partner, increase in the value of assets is debited to

9. Please see following :

Liabilities Amount (`) Assets Amount (`)

Click the Following Button to See the Free MS/Solutions

capital and ` 60,000 for premium. Journalise the transaction.

(a) Zahir’s Capital A/c Dr. 2,00,000

(a) Elena’s Current A/c Dr 5,000

14. Goodwill can be_______

Click the Following Button to See the Free MS/Solutions

15. What is amount transferred to profit loss appropriation account?

16. What is interest on drawings of Deepesh?

Date Particulars L.F. Dr. (`) Cr. (`)

Year Profit (`) Adjustment to be made