Sample Paper

3 Solved

General Instructions: Same instructions as given in Sample Paper - 1.

PART - A 60 Marks
(Accounting for Partnership Firms and Companies)
1. Navya and Radhey are partners in the ratio ` 1 per share. Amount transferred to capital
3 : 2. They admit Shreya as a new partner reserve after forfeiture and re-issue of
1 shares would be:
for th share which she takes from Navya
5 (a) ` 100 (b) ` 300

and Radhey in the ratio 1 : 2. The new ratio (c) ` 400 (d) ` 900
of Navya, Radhey and Shreya will be: OR

(a) 8 : 4 : 1 (b) 8 : 3 : 4 While issuing ..................... type of debentures,

company doesn’t give any undertaking
(c) 3 : 2 : 1 (d) 8 : 4 : 3 1
for the repayment of money borrowed by
2. Assertion (A): The Partnership Act, 1932 issuing such debentures.
does not provide for charging (a) Zero Coupon Rate Debentures
interest on loan to partners. (b) Non-Convertible Debentures
Reasoning (R): Interest on loan by the firm to (c) Secured Debentures
a partner is charged only at (d) Non-Redeemable Debentures 1
the agreed rate of interest. 4. Samiksha, Arshiya and Divya were
(a) Both A and R are true and R is the correct partners in a firm sharing profits and
explanation of A. losses in the ratio of 5 : 3 : 2. With effect
(b) Both A and R are true but R is not the from 1st April, 2023, they agreed to share
correct explanation of A. future profits and losses in the ratio of

(c) A is true but R is false 2 : 5 : 3. Their Balance Sheet showed a

debit balance of ` 50,000 in the Profit and
(d) A is false but R is true 1
Loss Account and a balance of ` 40,000
3. 10,000 shares were issued to public in the Investment Fluctuation Fund.
@ ` 10 per share and ` 2 premium. Due The market value of an investment is
to non-payment of allotment money of ` 30,000 against the book value of ` 50,000.
` 5 (including ` 2 Premium) and ` 3 on first Partners have decided, not to show revised
and final call, 100 shares were forfeited. value in the balance sheet and to pass an
These shares were re-issued at a discount of adjusting entry for it.

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 Which of the following is the correct treatment of the given case?

S. No. Particulars L.F. Debit (`) Credit (`)

(a) Samiksha’s Capital A/c Dr. 9,000

To Arshiya’s Capital A/c 6,000
To Divya’s Capital A/c 3,000
(Being adjusting entry passed)
(b) Arshiya’s Capital A/c Dr. 5,000
To Samiksha’s Capital A/c 2,000
To Divya’s Capital A/c 3,000
(Being adjusting entry passed)
(c) Arshiya’s Capital A/c Dr. 2,000
Divya’s Capital A/c Dr. 1,000
To Samiksha’s Capital A/c 3,000
(Being adjusting entry passed)
(d) Arshiya’s Capital A/c Dr. 6,000
Divya’s Capital A/c Dr. 3,000
To Samiksha’s Capital A/c 9,000
(Being adjusting entry passed)
OR OR
Sohan and Mohan are partners sharing Which of the following statements is
profits and losses in the ratio of 2:3 with incorrect about equity shares?
the capitals of ` 5,00,000 and ` 6,00,000 (a) Equity shareholders sink and swim with
respectively. On 1st January, 2023, Sohan the company.
and Mohan granted loans of ` 20,000 and (b) They get preferential rights in the
` 10,000 respectively to the firm. The loss payment of dividend.
before interest for the year amounted to ` (c) They get dividend as return on their
2,500. The partner's share of loss would be investment.
............. and ................ respectively. (d) Equity shareholders are owners of the
(a) ` 1,250, ` 1,250 (b) ` 1,000, ` 1,500 company. 1
(c) ` 820, ` 1,230 (d) ` 1,180, ` 1,770 1 7. A Ltd. forfeited 600 equity shares of ` 10
each for the non-payment of final call of
5. Vihaan and Mann are partners sharing ` 3 per share. Out of these, 400 shares were
profits and losses in the ratio of 3 : 2. The firm reissued at ` 7.50 per share fully paid up. The
maintains fluctuating capital accounts and amount transferred to capital reserve is:
the balance of the same as on 31st March, (a) ` 3,000 (b) ` 1,200
2023 is ` 4,00,000 and ` 4,65,000 for Vihaan (c) ` 1,800 (d) ` 2,600 1
and Mann respectively. Drawings during
8. Aman, Bina and Chander are partners in
the year were ` 65,000 each. As per the
a firm with capital balances of ` 50,000,
partnership deed, Interest on capital @ 10% ` 70,000 and ` 80,000 respectively on 31st
p.a. on opening capital has been allowed March, 2023. Aman decides to retire from
to them. Calculate the opening capital of the firm on 31st March, 2023. With the
Vihaan given that the divisible profits during help of the information provided, calculate
the year 2023-24 was ` 2,25,000. the amount to be paid to Aman on his
(a) ` 3,30,000 (b) ` 4,40,000 retirement. There existed a general reserve
(c) ` 4,00,000 (d) ` 3,00,000 1 of ` 7,500 in the balance sheet on that date.
The goodwill of the firm was valued at
6. Savitri Ltd. issued 50,000, 8% Debentures of ` 30,000. Gain on revaluation was ` 24,000.
` 100 each at certain rate of premium and to
be redeemed at 10% premium. At the time (a) ` 88,500 (b) ` 90,500
of writing off Loss on Issue of Debentures, (c) ` 65,375 (d) ` 70,500
Statement of Profit and Loss was debited OR
with ` 2,00,000. At what rate of premium, A, B and C are partners. sharing profits
these debentures were issued? and losses in the ratio 3 : 2 : 1. C is given a
(a) 10% (b) 16% guarantee by firm for a minimum profit
(c) 6% (d) 4% of ` 70,000 excluding interest on capital.

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 Partners are entitled to interest on capital (a) A : ` 90,000; B : ` 60,000; C : ` 30,000
which is calculated as ` 30,000, ` 20,000 and (b) A : ` 55,000; B : ` 55,000; C : ` 70,000
` 10,000 for A, B and C respectively. Firm
earned a profit of ` 1,80,000. Each partner (c) A : ` 60,000; B : ` 40,000 C : ` 80,000
will be paid a total amount from profit is: (d) A : ` 66,000; B : ` 44,000 C : ` 70,000 1
9. Puneet and Raju are partners in a clay toys making firm. Their capitals were ₹ 5,00,000 and ₹ 10,00,000
respectively. The firm allowed Puneet to get a commission of 10% on the net profit before charging
any commission and Raju to get a commission of 10% on the net profit after charging all commission.
Following is the Profit and Loss Appropriation Account for the year ended 31st March, 2023.
Profit and Loss Appropriation Account
for the year ended 31st March, 2023
Dr. Cr.
Amount Amount
Particulars Particulars
(`) (`)
To Puneet’s Capital A/c By Profit and Loss A/c X
(Commission) 44,000
(X × 10/100)
To Raju’s Capital A/c Y
(Commission)
To Profit transferred to :
Puneet’s Capital A/c Z
Raju’s Capital A/c Z
Here X, Y, Z are: (IV) Can use money of firm for any purpose.
(a) ` 4,00,000, ` 36,000 and ` 1,60,000 (V) Dividend for any amount of salary.
(b) ` 4,40,000, ` 36,000 and ` 1,80,000 (a) Only (I)
(c) ` 4,40,000, ` 36,000 and ` 1,60,000
(b) Only (II) and (IV)
(d) ` 4,40,000, ` 40,000 and ` 1,80,000
OR (c) Only (I) and (III)
A, B and C are partners sharing profits and (d) Only (I), (III) and (V) 1
losses equally. C was given a guarantee
of minimum profit of ` 10,000. During the 12. Sulekha Ltd. sold its assets of ` 12,00,000
year, firm incurred a loss of ` 9,000. Capital along with liabilities of ` 4,00,000 to
account of B would be ............. Trademart Ltd. for a purchase consideration
(a) debited by ` 10,000 of ` 10,00,000. Trademart Ltd. issued equity
(b) credited by ` 10,000 shares of ` 100 each at a premium of 25%
(c) debited by ` 9,500 and a promissory note of ` 50,000 in favour
of Sulekha Ltd. The number of shares issued
(d) credited by ` 9,5001
by Trademart Ltd. will be:
10. A firm had assets of ` 1,00,000 (including (a) 7,600 shares (b) 6,000 shares
cash ` 10,000), Partners capital account (c) 8,000 shares (d) 7,500 shares1
show a balance of ` 75,000 and reserves
constitute the rest. The normal rate of return 13. As per the Companies Act, 2013, Securities
is 10%. Goodwill of the firm is valued at Premium Balance can be utilised for which
of the following purpose?
` 1,20,000 at 4 years purchase of super
(a) Issuing bonus to existing shareholders to
profit. The amount of average profit will be:
convert partly paid up into fully paid-up
(a) ` 30,000 (b) ` 40,000
bonus shares.
(c) ` 20,000 (d) ` 35,000 1
(b) Providing for Premium payable on
11. Which among the following is/are the rights Redemption of Debentures
of a partner? (c) Writing off all Capitalised Expenditures
(I) Profit & Loss sharing in the agreed ratio. (d) Buy Back of Debentures 1
(II) Every partner have a right of any 14. Ganga and Jamuna are partners sharing
amount of commission. profits in the ratio of 2:1. They admit
(III) Every partner is entitled to interest on Saraswati for 1/5th share in future profits.
loan given to firm at agreed rate of On the date of admission, Ganga’s capital
interest. was ` 1,02,000 and Jamuna’s capital was

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 ` 73,000. Saraswati brings ` 25,000 as You are required to pass Journal entries for:
her share of goodwill and she agrees to (A) Interest on loan
contribute proportionate capital of the new (B) Interest on Capital
firm. How much capital will be brought by
(C) Interest on drawings 3
Saraswati?
(a) ` 43,750 (b) ` 37,500 19. Anthony Ltd. issued 20,000, 9% Debentures
of ` 100 each at 10% discount to Mithoo
(c) ` 50,000 (d) ` 40,000 1 Ltd. from whom Assets of ` 23,50,000 and
15. Green and Orange are partners. Green Liabilities of ` 6,00,000 were taken over.
draws a fixed amount at the beginning Pass entries in the books of Anthony Ltd., if
of every month. Interest on drawings is these debentures were to be redeemed at
charged @ 8% p.a. At the end of the year, 5% premium.
interest on Green's drawings amounts to OR
` 2,600. Monthly drawings of Green were:
Random Ltd. took over running business
(a) ` 8,000 (b) ` 60,000 of Mature Ltd. comprising of Assets of
(c) ` 7,000 (d) ` 5,000 ` 45,00,000 and Liabilities of ` 6,40,000 for
OR a purchase consideration of ` 36,00,000.
The amount was settled by bank draft
Girdhar, a partner withdrew ` 5,000 in the
of ` 1,50,000 and balance by issuing
beginning of each quarter and interest on
12% preference shares of ` 100 each at
drawings was calculated as ` 1,500 at the 15% premium. Pass entries in the books of
end of accounting year 31st March, 2023. Random Ltd. 3
What is the rate of interest on drawings
charged? 20. Doremon, Shinchan and Nobita are partners
sharing profits and losses in the ratio of
(a) 6% p.a. (b) 8% p.a. 3:2:1. With effect from 1st April, 2024 they
(c) 10% p.a. (d) 12% p.a. 1 agree to share profits equally. For this
16. At the time of dissolution of a firm, purpose, goodwill is to be valued at two
year’s purchase of the average profit of last
Creditors are ` 70,000; Firm’s Capital is
four years which were as follows:
` 1,20,000; Cash Balance is ` 10,000. Other
assets realised ` 1,50,000. Gain/Loss in the Year ending on 31st ` 50,000 (Profit)
realisation account will be: March, 2021
(a) ` 30,000 (Gain) (b) ` 40,000 (Gain) Year ending on 31st ` 1,20,000 (Profit)
(c) ` 40,000 (Loss) (d) ` 30,000 (Loss) 1 March, 2022

17. Ajay, Manish and Sachin were partners Year ending on 31st ` 1,80,000 (Profit)
March, 2023
sharing profits in the ratio 5 : 3 : 2. Their
capitals were ` 6,00,000; ` 8,00,000 and Year ending on 31st ` 70,000 (Loss)
` 11,00,000 as on 1st April, 2023. As per March, 2024
partnership deed, Interest on Capitals were On 1st April, 2023, a Motor Bike costing
to be provided @ 10% p.a. For the year ended ` 50,000 was purchased and debited to
31st March, 2024, profits of ` 2,00,000 were travelling expenses account, on which
distributed without providing for Interest on depreciation is to be charged @ 20% p.a by
Straight Line Method. The firm also paid an
Capitals.
annual insurance premium of ` 20,000 which
Pass an adjustment entry and show the had already been charged to Profit and Loss
workings clearly.  3 Account for all the years.
18. A, K and V are partners in a firm. Their Calculate value of goodwill of the firm.
capitals are ` 1,20,000 , ` 60,000 and OR
` 60,000 respectively. A, B and C are partners sharing profits and
V advanced ` 20,000 by way of loan to the losses in the ratio 3 : 2 : 1. B died on 30th
firm on 1st July 2023. A and K withdrew June, 2023. Their capital balances after
all necessary adjustments are ` 5,00,000,
` 4,000 each in the beginning of each month.
` 4,00,000 and ` 3,00,000. The amount
The partnership deed provides for:
payable to B is still outstanding. A and C
(i) Interest on loan @ 6%p.a. to the partner continued the business till year end and
(ii) Interest on capital @ 10%p.a. earned ` 60,000 as profit. State which of the
(iii) Interest on drawings @ 5%p.a. two options available under section 37 of

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 the Indian Partnership Act, 1932 should be (B) Paavni’s Loan of ` 40,000 was settled by
exercised by executor of B and why?3 giving an unrecorded asset of ` 45,000.
(C) Loan to Charu of ` 60,000 was settled by
21. Altaur Ltd. was registered with an payment to Charu’s brother loan of the
Authorised Capital of ` 4,00,00,000 divided same amount.
in 25,00,000 Equity Shares of ` 10 each
(D) Iknoor’s Loan of ` 80,000 to the firm and
and 1,50,000, 9% Preference Shares of she took over Machinery of ` 60,000 as
` 100 each. The company issued 8,00,000 part payment.
Equity Shares for public subscription at 20%
You are required to pass necessary entries
premium, payable ` 3 on application; ` 7 on
for all the above mentioned transactions.4
allotment (including premium) and balance
on call. Public had applied for 10,00,000 23. OTUA Ltd. was registered with an authorised
shares. Excess applications were sent letters capital of 2,00,000 equity shares of ` 100
of regret. each. The company offered 60,000 shares
for public subscription at 25% premium. The
All the dues on allotment received except
share was payable as ` 40 on application
on 15,000 shares held by Sanju. Another
and balance on allotment, with premium.
shareholder, Rocky paid his call dues along
Public had applied for 85,000 shares. Pro-
with allotment on his holding of 25,000
rata allotment was made in the ratio of 5:4
shares. Call money has not been called yet.
to 75,000 shares and remaining applications
You are required to prepare the Balance
were sent letters of regret.
Sheet of the company as per Schedule III
Mr. Anand, holding 4,000 shares failed to
of Companies Act, 2013, showing Share
pay allotment money and his shares were
Capital balance and also prepare Notes to
forfeited. Out of these, 3,000 shares were re-
Accounts. 4 issued at a discount of ` 20 per share. Pass
22. Charu, Dhwani, Iknoor and Paavni were necessary entries in the books of the OTUA
partners in a firm. They had entered into Ltd.
partnership firm last year only, through a OR
verbal agreement. They contributed capitals Pass journal entries for forfeiture and re-
in the firm and to meet other financial issue in both the following cases.
requirements, few partners also provided (A) Vikram Ltd. forfeited 5,000 shares of
loan to the firm. Within a year, their conflicts Rahul, who had applied for 6,000 shares
arisen due to certain disagreements and for non-payment of allotment money of
they decided to dissolve the firm. The firm ` 5 per share and first and final call of
had appointed Ms. Kavya, who is a financial ` 2 per share. Only application money of
advisor and legal consultant, to carry on the ` 3 was paid by him. Out of these, 3,000
dissolution process. In the first instance, Ms. shares were re-issued @ ` 12 per share
Kavya had transferred various assets and as fully paid.
external liabilities to Realisation A/c. Due to (B) Ratan Ltd. forfeited 3,000 shares of ` 10
her busy schedule; Ms. Kavya has delegated each (issued at ` 2 premium) for non-
this assignment to you, being an intern in payment of first call of ` 2 per share.
her firm. On the date of dissolution, you Final call of ` 3 per share was not yet
have observed the following transactions: made. Out of these, 2,000 shares were
(A) Dhwani’s Loan of ` 50,000 to the firm re-issued at ` 10 per share as fully paid.
was settled by paying ` 42,000.  6
24. X and Y were partners in the firm with profit-sharing ratio of 3: 2. Their balance sheet as at 31st
March, 2024 was as follows:
Balance Sheet
as at 31st March, 2024

Liabilities Amount (`) Assets Amount (`)

Creditors 56,000 Plant and Machinery 70,000
General Reserve 14,000 Buildings 98,000
Capital Accounts : Stock 21,000
X 1,19,000 Debtors 42,000
Y 1,12,000 2,31,000 (-) Provision (7,000) 35,000
Cash in Hand 77,000
3,01,000 3,01,000

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 Z was admitted for 1/6th share on the following terms:
(i) Z will bring ` 56,000 as his share of capital, but was not able to bring any amount to compensate
the sacrificing partners.
(ii) Goodwill of the firm is valued at ` 84,000.
(iii) Plant and Machinery were found to be undervalued by ` 14,000. Building was to brought upto
` 1,09,000.
(iv) All debtors are good.
(v) Capitals of X and Y will be adjusted on the basis of Z’s share and adjustments will be done by
opening necessary current accounts.
You are required to prepare revaluation account and partners’ capital accounts.
OR
A, B and C were partners sharing profits and losses in the ratio 5:3:2. A died on 30th June, 2023.
Entry for treatment of goodwill after his death was passed as follows:

Date Particulars L.F. Debit (`) Credit (`)

B's Capital A/c Dr. 1,80,000
C's Capital A/c Dr. 1,20,000
To A's Capital A/c 3,00,000
(Being entry for goodwill treatment passed at the
time of death of partner)
A’s profit till date of death was estimated as ` 1,20,000, based on the average profits of past three
years. Final dues payable to A’s executor on the date of death was calculated as ` 8,40,000 out of
which ` 2,40,000 was paid immediately by giving him Furniture valued for the same and balance
was to be paid in three equal annual instalments starting from 30th June, 2024, together with
interest rate as specified in Section 37 of Indian Partnership Act, 1932.
Pass necessary entry for profit share to be credited to A’s Capital and also prepare A’s executor’s
account till final settlement.  6
25. Red, White and Blue were partners in a firm sharing profits or losses in the ratio 5 : 3 : 2 respectively.
White being old and due to his health problems decided to retire on 31st March, 2023. At the time of
his retirement, the balance sheet of the firm was as follows:
Balance Sheet
as at 31st March, 2023

Liabilities Amount (`) Assets Amount (`)

Capital A/cs: Land & Building 10,00,000
Red 6,00,000 Stock 2,50,000
White 4,00,000 Debtors: 80,000
Blue 2,00,000 12,00,000 Less: Provision (8,000) 72,000
Creditors 2,50,000 Bank 1,08,000
Outstanding Expenses 50,000 Cash 70,000
15,00,000 15,00,000

Following terms were discussed:

(i) Land & Building to be appreciated by 20%.
(ii) Market value of stock was ` 2,30,000.
(iii) Bad debts of ` 10,000 reported and rest of the debtors are good.
(iv) Goodwill of the firm was valued at ` 1,20,000.
(v) Red and Blue decided to share profits & losses equally in the future and also decided to maintain
capital of ` 12,00,000 in their new ratio. Any adjustment will be done by opening current accounts.
(vi) Amount due to White to be transferred to his loan account.
Prepare revaluation and capital accounts of all partners. 6

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26. Balance Sheet (Extract)
of XYZ Ltd. as at 31st March, 2024
(as per Schedule-III of Companies Act, 2013)

Particulars Note No. 31st March, 2023 31st March, 2024

EQUITY AND LIABILITIES
1. Shareholder's Funds
(a) Share Capital 1 4,40,000 8,40,000
(b) Reserves and Surplus 2 1,50,000 2,30,000
Notes to accounts (for the year ending 31st March, 2023)

Particulars `

Share Capital
1. Authorised Capital
1,00,000 equity shares of ` 10 each 10,00,000
2. Issued Capital
45,000 equity shares of ` 10 each 4,50,000
3. Subscribed Capital
(a) Subscribed and fully paid up
40,000 equity shares of ` 10 each 4,00,000
(b) Subscribed and not fully paid up
5,000 equity shares of ` 10 each 50,000
Less: Calls in arrears (5,000 × 2) 10,000 40,000
4,40,000
Notes to accounts (for the year ending 31st March, 2024)

Particulars `

Share Capital
1. Authorised Capital
1,00,000 equity shares of ` 10 each 10,00,000
2. Issued Capital
85,000 equity shares of ` 10 each 8,50,000
(20,000 equity shares were issued to vendor fully paid)
3. Subscribed Capital
(a) Subscribed and fully paid up
80,000 equity shares of ` 10 each 8,00,000
(b) Subscribed and not fully paid up
3,000 equity shares of ` 10 each 30,000
Less: Calls in arrear (3,000 × 2) 6,000 24,000
Share forfeiture 16,000
8,40,000
Note No. 2 Reserves and Surplus

Particulars Note No. 31st March, 2023 31st March, 2024

Securities Premium 1,50,000 2,30,000
During the year company purchased a Machinery for 2,40,000 and issued equity shares of ` 10 each
at premium to vendor as purchase consideration, shareholders holding 3,000 shares who have not
paid final call of ` 2 were not given a 14 days final notice yet.
(A) What is the total face value of shares (a) ` 2,00,000 (b) ` 4,00,000
issues for cash by the company during
the year 2023-24? (c) ` 8,00,000 (d) ` 3,00,000

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 (B) During the year 2023-24, company (a) ` 16,000 (b) ` 12,000
forfeited .............. shares. (c) ` 4,000 (d) None of these
(a) 3,000 (b) 5,000 (E) What will be the amount in the
(c) 2,000 (d) 4,000 'subscribed and fully paid up' after
reissue of shares?
(C) What will be the number of issued shares
after forfeiture of the shares as on April (a) ` 8,44,000 (b) ` 8,50,000
1, 2024? (c) ` 8,20,000 (d) ` 8,00,000
(a) 80,000 shares (F) What is the amount of uncalled capital
(b) 85,000 shares as on 31st March, 2023 and 31st March,
(c) 45,000 shares 2024?
(d) 83,000 shares (a) ` 4,50,000, ` 1,50,000
(b) ` 5,50,000, ` 1,50,000
(D) If forfeited shares were reissued at ` 8
per share, the amount transferred to (c) ` 1,50,000, ` 55,00,000
capital reserve will be: (d) ` 4,50,000, ` 8,50,000 6

PART - B 20 Marks
(Analysis of Financial Statements)
27. Financial statements are prepared on certain 30. Which of the following statement is
basic assumptions (pre-requisites) known as incorrect?
.......................... . (a) Purchase of goodwill is treated as
(a) Provision of Companies Act, 2013 negative item in investing activities.
(b) Accounting Standards (b) Proposed dividend of current year is
(c) Postulates added in net profit while calculating net
(d) Basis of Accounting profit before tax.
(c) Dividend received on investments is
OR
added in investing activities.
''Showing a better position than what
(d) Income tax refund is a kind of non-
really exists'' refers to ............... limitation of
operating income.
financial statement analysis?
OR
(a) Biased analysis
What will be the effect of payment of interest
(b) Window dressing
on bank loan on cash flow statement?
(c) Ignoring qualitative factors
(I) No effect
(d) Lack of proper standards 1 (II) Inflow under financing activities
28. From the following, calculate Interest (III) Outflow under financing activities
Coverage Ratio. Net profit after tax (IV) Outflow under investing activities
` 12,00,000; 10% debentures ` 1,00,00,000;
(a) (I) and (II) (b) (II) and (III)
Tax Rate 40%
(c) Only (III) (d) Only (IV)1
(a) 1.2 times (b) 3 times
(c) 2 times (d) 5 times 1 31. Classify the following items under Major
heads and Sub-head (if any) in the Balance
29. Statement I: For a financing company,
Sheet of a Company as per Schedule III of
purchasing shares is a part of
the Companies Act, 2013.
operating activities.
(A) Current maturities of long-term debts
Statement II: For a truck trading company,
purchasing of trucks is an (B) Furniture and Fixtures
investing activity. (C) Provision for Warranties
(a) Both the statements are true (D) Income received in advance
(b) Both the statements are false (E) Capital Advances
(c) Only Statement-I is true (F) Advances recoverable in cash within the
(d) Only Statement-II is true1 operation cycle 3

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 32. Complete the Comparative Balance Sheet:
Absolute
2022-23 2023-24 (%)
Particulars Change
(`) (`) Change
(`)
I. EQUITY AND LIABILITIES
1. Shareholder’s Funds
(a) Share Capital 4,00,000 6,00,000 ? ?
(b) Reserves and Surplus ? 3,00,000 50,000 20
2. Non-Current Liabilities
(a) Long-term Borrowings 3,00,000 ? ? 22
3. Current Liabilities
(a) Short-term borrowings 1,50,000 1,84,000 ? ?
(b) Trade Payables ? 5,00,000 1,00,000 ?
Total ? ? ? ?
II. ASSETS
1. Property, Plant & Equipment and
Intangible Assets
(a) Property, Plant and Equipment 8,00,000 10,00,000 ? ?
(b) Intangible Assets ? ? 50,000 25
2. Current Assets
(a) Inventories 4,00,000 5,80,000 ? ?
(b) Cash and Cash Equivalents 1,00,000 ? ? 20
Total ? ? ? ?
3
33. From the following information: OR
Profits after Tax were ` 6,00,000; Tax Calculate the value of current assets, liquid
rate was 40%; 15% Debentures were of ` assets and inventories from the following
20,00,000; 10% Bank Loan was ` 20,00,000; data:
12% Preference Share Capital ` 30,00,000; Working Capital = ` 60,000
Equity Share Capital ` 40,00,000; Reserves Current Ratio = 2.5 : 1
and Surplus were ` 10,00,000; Sales
` 3,75,00,000 and Sales Return ` 15,00,000.
Liquid Ratio = 1.75 : 1 3
Calculate Return on Investment.

34. (A) Calculate cash flow from investing activities from the following data.
31st March, 2023 31st March, 2024
Particulars Note No.
(`) (`)
Property, Plant and Equipments and
Intangible Assets
Plant and Machinery (Book Values) 3,00,000 4,00,000
Additional Information: A Plant costing ` 80,000 (depreciation there on ` 40,000) was sold for
` 32,000. The balances in the provision for depreciation account as on 31st March, 2023 and
2024 were ` 50,000 and ` 70,000 respectively.
(B) From the following information, calculate cash flow from financing activity:

31st March, 2023 31st March, 2024

Particulars
(`) (`)
Equity Share Capital 10,00,000 17,00,000
10% Debentures 2,00,000 3,00,000
Securities Premium 50,000 65,000
Additional Information:
(i) Equity share were issued as bonus in the ratio of 2 : 1 and balance for cash of a premium of 10%.
(ii) Debentures were issued on 30th September, 2023 at a discount of 5% which was written off
against securities premium.
(iii) Interest on debentures was duly paid. 6

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 SOLUTIONS
SAMPLE PAPER - 3

PART - A
1. (d) 8 : 4 : 3 if firm wish to charge on interest. Otherwise, it
Explanation: Old Ratio: is not charged as per Partnership Act, 1933.
Navya : Radhey = 3 : 2
3. (b) ` 300
1 1 1 Explanation:
Sacrifice of Navya = × =
5 3 15
Application money received 100 × 4 = 400
1 2 2 on 100 shares
Sacrifice of Radhey = × = Less: Amount used in discount 100 × 1 = (100)
5 3 15
on Re-issue
3 1 8 Remaining amount trans-
Navya's New share = − = ferred to capital reserve 300
5 15 15
OR
2 2 4
Radhey's New share = − = (d) Non–Redeemable Debentures
5 15 15
New Ratio = 8 : 4 : 3 Explanation: Non–redeemable Debentures
or Irredeemable debentures are also known
2. (a) Both A and R are true and R is the correct as Perpetual Debentures because the
explanation of A. company does not give any undertaking for the
Explanation: If a firm gives loan to a partner, repayment of money borrowed by issuing such
then rate of interest on loan should be agreed debentures.

4. (a) S. No. Particulars L.F. Debit (`) Credit (`)

Samiksha’s Capital A/c Dr. 9,000

To Arshiya’s Capital A/c 6,000
To Divya’s Capital A/c 3,000
(Being adjusting entry passed)
Explanation: 3
Samiksha : Arshiya : Divya Samiksha's Share = 30,000 × = ` 9,000
10
Old Ratio = 5 : 3 : 2
New Ratio = 2 : 5 : 3 2
Samiksha's (Gain/Sacrifice) Arshiya’s share = 30,000 × ` 6,000
=
10
= New Share – Old Share
2 5 –3 1
= − = (Sacrifice) Divya’s share = 30,000 × ` 3,000
=
10 10 10 10
Arshiya's (Gain/ Sacrifice) OR
= New Share – Old Share
5 3 2 (d) ` 1,180, ` 1,770
= − = (Gain)
10 10 10 Explanation:
Divya's (Gain/Sacrifice) Loss of the firm = (2,500)
3 2 1 Less: Interest on Loan = (450)
= − = (Gain)
10 10 10 Total Loss = 2,950
Calculation of Net effect: 2
Profit & Loss balance (Dr.) =  (50,000) Sohan’s Share = 2, 950 × = ` 1,180
5
Investment fluctuation fund
(40,000 – 20,000) = 20,000 3
Mohan’s Share = 2, 950 × = ` 1,770
Net effect (30,000) 5

Sample Paper 3 89

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 Interest on Loan: 7. (c) ` 1,800
Sohan has given ` 20,000 on 1st January, Explanation:
6 3 Amount forfeited per share = ` 7
2023 = 20, 000 × ×
100 12 (–) Loss on reissue per share = ` 2.50
= 300 ` 4.50
Mohan has given ` 10,000 on 1st January, Capital reserve = 4.50 × 400
6 3 = ` 1,800
2023 = 10, 000 × ×
100 12
= 150 8. (d) ` 70,500
Explanation: In the absence of any information
5. (d) ` 3,00,000 the profit sharing ratio will be equal i.e., 1 : 1 : 1.
Explanation: Calculation of Vihaan's Opening So, General Reserve + Goodwill
Capital: + Gain on Revaluation
`
= 7,500 + 30,000 + 24,000
Closing Capital 4,00,000
= ` 61,500
Add: Drawings 65,000
1
61, 500 × = ` 20,500
3 3
Less: Profit share = 2,25,000 × =` (1,35,000)
5 Add: Capital = 50,000
Opening Capital + Interest on Capital 3,30,000 Amount due to Aman = Capital + Share of
Let, Opening Capital be x reserve goodwill in and gain on revaluation =
10 x 50,000 + 20,500 = ` 70,500
Interest on Capital be Aman to be paid = ` 70,500
100
OR
10 x
x+ = 3,30,000 (c) A : ` 60,000; B : ` 40,000 C : ` 80,000
100
Explanation: Total profit available: ` 1,80,000
3,30,000 × 100
x= Less: Interest on capital of A + B + C (60,000)
110
(30,000 + 20,000 + 10,000)
x = ` 3,00,000
Remaining profit for distribution  ` 1,20,000
6. (c) 6%
1
Explanation: C’s share as per share = 1,20,000 ×
6
Premium on redemption of debentures
= ` 20,000
10
= 50,000 × 100 × C’s minimum guaranteed profit = ` 70,000. So,
100
firm will pay his guaranteed amount first i.e.,
= ` 5,00,000 ` 70,000
Statement of Profit and Loss was debited by Amount remaining = 1,20,000 – 70,000 =
` 2,00,000 ` 50,000 for A & B
Rest of the loss on issue of debentures would
3
have been adjusted by Securities Premium A/c A’s share = 50,000 × = ` 30,000
(Premium received on issue) 5
Securities Premium = 5,00,000 – 2,00,000 2
B’s share = 50,000 × = ` 20,000
= ` 3,00,000 5
Rate of Premium on issue A’s total share in profit = 30,000 + 30,000
3,00,000 = 60,000 (Interest on capital + profit)
= × 100 = 6%
50,00,000 B’s total share in profit = 20,000 + 20,000
= 40,000
OR
C’s total share in profit = 10,000 + 70,000
(b) They get preferential rights in the payment
= 80,000
of dividend.
Explanation: Preference shareholders get 9. (b) ` 4,40,000, ` 36,000 and ` 1,80,000
preferential rights in the payment of dividend. 100
Equity shareholders sink and swim with Explanation: X = 44, 000 ×
10
the company as they get money from the
company. = ` 4,40,000

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 Y = 4,40,000 – 44,000 12. (a) 7,600 shares
10 Explanation: Net purchase consideration
= 3, 96, 000 × payable in shares = 10,00,000 – 50,000
110
= ` 9,50,000
= ` 36,000
9, 50, 000
Z = 4,40,000 – 44,000 – 36,000 No. of shares =
125
` 3, 60, 000
= = ` 1,80,000 = 7,600 shares
2
13. (b) Providing for Premium payable on
OR
Redemption of Debentures
(c) debited by ` 9,500 Explanation: Securities Premium Account
Explanation: can be used for writing off any preliminary
Total loss = 10,000 + 1,000 = ` 19,000 expenses of the company. To write off
expenses on issue of shares and debentures,
10. (b) ` 40,000 such as commission paid or discount given on
Goodwill the issue of debentures.
Explanation: Super Profit =
4 14. (c) ` 50,000
1, 20, 000 Explanation:
= Ganga’s Capital + Jamuna’s Capital
4
+ Goodwill = 2,00,000
= ` 30,000 1
Saraswati’s share in the firm =
10 5
Normal profit = 1, 00, 000 ×
100 1 4
Remaining share = 1 − =
= ` 10,000 5 5
Average Profit = Super Profit 5
Total Capital of the firm = ` 2, 00, 000 ×
 + Normal Profit 4
= 30,000 + 10,000 = ` 2,50,000
= ` 40,000 1
Saraswati’s share = 2,50,000 ×
5
11. (c) Only (I) and (III)
= ` 50,000
Explanation: Rights of a partner are as follows :
(1) Share of profits and losses in agreed ratio. 15. (d) ` 5,000
(2) Right to take part in the conduct of the Amount × 8 × 6.5×12
Explanation: = ` 2,600
business. 100 × 12
(3) Interest on loan given to firm. Amount = ` 5,000
(4) Right to disallow the admission of new OR
partner. (d) 12% p.a.
Explanation: x = 12%
Related Theory
x 7.5

Rules applicable in the absence of Partnership Deed: 20,000 × × = 1,500
(1) Profits will be equally shared among all the 100 12
partners. x = 12%
(2) No interest on capital is allowed and no interest 16. (d) ` 30,000 (Loss)
on drawings is to be charged.
(3) No partner is entitled to any salary or Explanation: Total assets transferred will be
commission. Capital + Creditors– Cash balance
(4) Interest on the loan by a partner will be paid = 1,20,000 + 70,000 – 10,000 = ` 1,80,000
@ 6% p.a.
Dr. Realisation A/c Cr.

Particulars Amount (`) Particulars Amount (`)

To Assets A/c 1,80,000 By Creditors A/c 70,000
To Bank A/c (Creditor) 70,000 By Bank A/c (Assets realised) 1,50,000
By Loss on realisation A/c 30,000
2,50,000 2,50,000

Sample Paper 3 91

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17. MARKS BREAKDOWN Ch 1
Topic: Past Adjustments
Provide adjustment entry.
Key Steps:
(to get full marks)
Preparation of table showing adjustments (2m)
Recording of correct journal entry (1m)

Journal Entry

Date Particulars L.F. Debit (`) Credit (`)

Ajay's Capital A/c Dr. 52,000

To Manish's Capital A/c 4,000
To Sachin's Capital A/c 48,000
(Being adjustment entry passed)
Working Notes:
Table showing Adjustments

Particulars Ajay (`) Manish (`) Sachin (`) Firm (`)

Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Profits taken 1,00,000 60,000 40,000 2,00,000
back
Interest on 48,000 64,000 88,000 2,00,000
Capital to be
credited
1,00,000 48,000 60,000 64,000 40,000 88,000 2,00,000 2,00,000
52,000 (Dr.) 4,000 (Cr.) 48,000 (Cr.) NIL

Interest on Capitals: 10
Sachin = 11,00,000 ×
10 100
Ajay = 6,00,000 ×
100 = ` 1,10,000
= ` 60,000 Since, total appropriations are more than
profits, profit will be distributed in ratio of
10 appropriation.
Manish = 8,00,000 ×
100 i.e. 60,000 : 80,000 : 1,10,000
= ` 80,000 6 : 8 : 11

18. MARKS BREAKDOWN Ch 1

Topic: IOC, IOD and Interest on Loan
Pass Journal Entries
Key Steps:
(to get full marks)
Interest on Loan (1m)
Interest on Capital (1m)
Interest on Drawings (1m)

Journal Entries

Date Particulars L.F. Debit (`) Credit (`)

(A) Interest on V's Loan A/c Dr. 900
To V's Loan A/c 900
(Being interest transferred to Loan account of V)

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 Profit and Loss A/c Dr. 900
To Interest on Loan A/c 900
(Being interest on loan charged to Profit & Loss
account)
(B) Interest on Capital A/c Dr. 24,000
To A's Capital A/c 12,000
To K's Capital A/c 6,000
To V's Capital A/c 6,000
(Being interest on capital provided to partners)
Profit & Loss Appropriation A/c Dr. 24,000
To Interest on Capital A/c 24,000
(Being interest on Capital charged to Profit & Loss
Appropriation Account)
(C) A's Capital A/c Dr. 1,300
K's Capital A/c Dr. 1,300
To Interest on Drawing A/c 2,600
(Being interest charged from partner's)
Interest on Drawing A/c Dr. 2,600
To Profit & Loss Appropriation A/c 2,600
(Being interest on drawings transferred to profit &
loss appropriation A/c)
Working Notes:
6 9
(i) Interest on loan = 20, 000 × × = ` 900
100 12
5 6.5
(ii) Interest on drawings for both A and K = 48, 000 × × = ` 1,300 each
100 12

19. MARKS BREAKDOWN Ch 8

Topic: Issue of Debentures other than cash
Provide necessary journal entries.
Key Steps:
(to get full marks)
Entry for purchase of assets and liabilities (1½m)
Entry for settlement of purchase consideration (1½m)
Books of Anthony Ltd.
Journal Entries

Date Particulars L.F. Debit (`) Credit (`)

(i) Assets A/c Dr. 23,50,000

Goodwill A/c (Balancing figure) Dr. 50,000
To Liabilities A/c 6,00,000
To Mithoo Ltd. 18,00,000
(Being business purchased of Mithoo Ltd. comprising
of Assets and Liabilities)

(ii) Mithoo Ltd. Dr. 18,00,000

Loss on Issue of Debentures A/c Dr. 3,00,000
To 9% Debentures A/c 20,00,000
To Premium on Redemption of Debentures A/c 1,00,000
(Being debentures issued to Mithoo Ltd. at discount,
redeemable at Premium)

Sample Paper 3 93

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 Working Notes:
Calculation of Purchase Consideration = 20,000 × 100 – (20,00,000 × 10%)
= 20,00,000 – 2,00,000 = ` 18,00,000
OR

MARKS BREAKDOWN Ch 7
Topic: Issue of Shares other than cash
Provide necessary journal entries.
Key Steps:
(to get full marks)
Entry for purchase of Business (1½m)
Entry for settlement of purchase consideration (1½m)

Books of Random Ltd.

Journal Entries

Date Particulars L.F. Debit (`) Credit (`)

(i) Assets A/c Dr. 45,00,000

To Liabilities A/c 6,40,000
To Mature Ltd. 36,00,000
To Capital Reserve A/c (balancing figure) 2,60,000
(Being business purchased of Mature Ltd.
comprising of Assets and Liabilities)
(ii) Mature Ltd. Dr. 36,00,000
To Bank A/c 1,50,000
To 12% Preference Share Capital A/c 30,00,000
(30,000 × 100)
To Securities Premium A/c (30,000 × 15) 4,50,000
(Being debentures issued to Mature Ltd. at 15%
premium)
Working Note:
34, 50, 000

No. of shares = = 30,000 shares @ (100 + 15 each)
115

20. MARKS BREAKDOWN Ch 2

Topic: Calculation of Goodwill and Average Profit Method
Identify value of goodwill
Key Steps:
(to get full marks)
Calculation of adjusted net profit (1m)
Calculation of average profit (1m)
Calculation of goodwill (1m)

Calculation of Adjusted Profit

Year ended Profit/ Loss Adjustments Adjusted Profit (`)

31st March,2021 50,000 –––– 50,000
31st March,2022 1,20,000 –––– 1,20,000
31st March,2023 1,80,000 –––– 1,80,000
31st March,2024 (70,000) (+)50,000 – 10,000 (30,000)
Total 3,20,000

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 Goodwill = Average Profits × No. of years Purchase
Total Adjusted Profits
Average Profits =
Number of years

3, 20, 000
=
4

= ` 80,000
Goodwill = Average Profit × No. of Years Purchase
Goodwill = 80,000 × 2
= ` 1,60,000

Related Theory
 There are three methods of valuing goodwill:
(1) Average Profit Method
(2) Super Profit Method
(3) Capitalisation Method
OR

MARKS BREAKDOWN Ch 5
Topic: Death of a Partner
Write 2 options available and give reason
Key Steps:
(to get full marks)
Explanation of provisions U/S 37 (1m)
Calculation (1m)
Correct opinion (1m)

As per Section 37, Indian Partnership Act, 1932 the executor of B was entitled to:
(1) Interest @ 6% p.a. on outstanding balance i.e.,
6 9
4, 00, 000 × × = ` 18,000
100 12
4, 00, 000
(2) Proportionate share in profits = 60, 000 ×
(5, 00, 000 + 4, 00, 000 + 3, 00, 000 )

4, 00, 000
= 60, 000 ×
12, 00, 000
= ` 20,000
Conclusion: The executor should opt second option i.e., to take ` 20,000 as profit.

21. MARKS BREAKDOWN Ch 7

Topic: Preparation of Balance Sheet
Make Balance Sheet and Notes to Accounts
Key Steps:
(to get full marks)
Preparation of Balance Sheet (2m)
Preparation of Notes to Accounts (2m)

Books of Altaur Ltd.

Balance Sheet (Extract) as at..........

Particulars Note No. Current Year (`) Previous Year (`)

I. EQUITY AND LIABILITIES
1. Shareholder’s Funds:
Share Capital 1 63,25,000 –

Sample Paper 3 95

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 Notes to Accounts:

Particulars Amount (`)

1. Share Capital
Authorised Share Capital
25,00,000 Equity Shares @ ` 10 each 2,50,00,000
1,50,000, 9% Preference Shares @ ` 100 each 1,50,00,000
4,00,00,000
Issued Share Capital
8,00,000 Equity Shares @ ` 10 each 80,00,000
Subscribed Share Capital
(i) Subscribed and Fully Paid up ––––
(ii) Subscribed but not Fully Paid up
8,00,000 Equity Shares @ ` 8 each 64,00,000
Less: Calls in Arrears (15,000 × 5) (75,000) 63,25,000

22. MARKS BREAKDOWN Ch 6

Topic: Recording of Journal entries
Pass journal entries
Key Steps:
(to get full marks)
Entry for Settlement of Dhwani's loan (1m)
Entry for Paavni's loan settlement (1m)
Entry for Charu's loan settlement (1m)
Entry for Iknoor's loan settlement (1m)

In the books of Charu, Dhwani, Iknoor and Paavni

Journal Entries

Date Particulars L.F. Debit (`) Credit (`)

(A) Dhwani's Loan A/c Dr. 50,000
To Bank A/c 42,000
To Realisation A/c 8,000
(Being dhwani’s Loan of ` 50,000 settled at
` 42,000)
(B) Paavni's Loan A/c Dr. 40,000
To Realisation A/c 40,000
(Being loan of ` 40,000 settled by giving an
unrecorded asset)
(C) Realisation A/c Dr. 60,000
To Charu's Loan A/c 60,000
(Being loan to Charu was settled by payment to
Charu’s brother Loan)
(D) Iknoor's Loan A/c Dr. 80,000
To Realisation A/c 60,000
To Bank A/c 20,000
(Being Iknoor’s Loan of ` 80,000 and Machinery
was given as part payment and rest through bank)

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23. MARKS BREAKDOWN Ch 7
Topic: Recording of Journal Entries
Prepare Journal
Key Steps:
(to get full marks)
Entry for receipt of application (1m)
Entry for allotment of shares (1m)
Entry for calls in arrears (1m)
Entry for forfeiture of shares (1m)
Entry for reissue of shares (1m)
Entry for amount transferred to capital reserve (1m)

In the books of OTUA Ltd.

Journal Entries

Date Particulars L.F. Debit (`) Credit (`)

(i) Bank A/c (85,000 × 40) Dr. 34,00,000
To Equity Share Application A/c 34,00,000
(Being application money received on 85,000
shares)

(ii) Equity Share Application A/c Dr. 34,00,000

To Equity Share Capital A/c (60,000 × 40) 24,00,000
To Equity Share Allotment A/c 6,00,000
To Bank A/c (10,000 × 40) 4,00,000
(Being application money transferred to share
capital, share allotment and excess money
refunded)

(iii) Equity Share Allotment A/c (60,000 × 85) Dr. 51,00,000

To Equity Share Capital A/c (60,000 × 60) 36,00,000
To Securities Premium A/c (60,000 × 25) 15,00,000
(Being allotment due on 60,000 shares with
Premium)

(iv) Bank A/c Dr. 42,00,000

Calls in Arrears A/c Dr. 3,00,000
To Equity Share Allotment A/c 45,00,000
(Being allotment received on 56,000 shares)

(v) Equity Share Capital A/c (4,000 × 100) Dr. 4,00,000

Securities Premium A/c (4,000 × 25) Dr. 1,00,000
To Share Forfeiture A/c 2,00,000
To Calls in Arrears A/c 3,00,000
(Being 4,000 shares forfeited for non–payment of
allotment money)

(vi) Bank A/c (3,000 × 80) Dr. 2,40,000

Share Forfeiture A/c (3,000 × 20) Dr. 60,000
To Equity Share Capital A/c (3,000 × 100) 3,00,000
(Being 3,000 shares re–issued @ ` 80 per share)

(vii) Share Forfeiture A/c Dr. 90,000

To Capital Reserve A/c 90,000
(Being gain on re–issue of forfeited shares
transferred to capital reserve)

Sample Paper 3 97

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 Working Notes:
1. Calculation of calls in arrears
5
Mr. Anand applied for = 4,000 × = 5,000 shares
4
Excess application money received = (5,000 – 4,000) × 40
= 1,000 × 40 = ` 40,000
Allotment due (4,000 × 85) = 3,40,000
Less: Excess (40,000)
Calls in arrear 3,00,000
2. Calculation of gain on reissue of shares
Profit on forfeiture of 3,000 share
2,00,000
= × 3,000 = 1,50,000
4,000
Less: Discount on reissue (60,000)
Transfer to Capital Reserve ` 90,000

OR

MARKS BREAKDOWN Ch 7
Topic: Recording of Journal Entries
Pass Journal Entries.
(A) Key Steps:
(to get full marks)
Entry for forfeiture (1m)
Entry for reissue (1m)
Entry for capital reserve (1m)
(B) Key Steps:
(to get full marks)
Entry for foreiture (1m)
Entry for reissue (1m)
Entry for capital reserve (1m)

(A) In the books of Vikram Ltd.

Journal Entries

Date Particulars L.F. Debit (`) Credit (`)

(i) Share Capital A/c (5,000 × 10) Dr. 50,000
To Share Forfeiture A/c 18,000
To Calls in Arrears A/c 32,000
(Being 5,000 shares forfeited for non–payment of
allotment and call money)
(ii) Bank A/c Dr. 36,000
To Share Capital A/c 30,000
To Securities Premium A/c 6,000
(Being 3,000 shares reissued @ ` 12 per share)
(iii) Share Forfeiture A/c Dr. 10,800
To Capital Reserve A/c 10,800
(Being gain on reissue of forfeited shares transferred
 18, 000 
to capital reserve)  × 3, 000 = ` 10, 800 
 5, 000 

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 (B) In the books of Ratan Ltd.
Journal Entries

Date Particulars L.F. Debit (`) Credit (`)

(i) Share Capital A/c (3,000 × 7) Dr. 21,000
To Share Forfeiture A/c 15,000
To Calls in Arrears A/c (3,000 × 2) 6,000
(Being 3,000 shares forfeited for non–payment of
first call money)
(ii) Bank A/c Dr. 20,000
To Share Capital A/c 20,000
(Being 2,000 shares re–issued @ ` 10 per share)
(iii) Share Forfeiture A/c Dr. 10,000
To Capital Reserve A/c 10,000
(Being gain on re–issue of forfeited shares transferred
 15, 000 
to capital reserve)  3, 000 × 2, 000 = ` 10, 000 
 

Caution
 Students generally forget to multiply the number of reissued shares while calculating the amount to be transferred to
Capital Reserve. So, they must be careful about this step.

24. MARKS BREAKDOWN Ch 4

Topic: Admission of a Partner
Make Revaluation A/c & Partner's Capital A/c.
Key Steps:
(to get full marks)
Revaluation A/c (2m)
Partner's Capital A/c (3m)
Working notes (1m)

Dr. Revaluation A/c Cr.

Particulars Amount (`) Particulars Amount (`)

To Partner's Capital A/c By Plant and Machinery A/c 14,000
X 19,200 By Building A/c 11,000
Y 12,800 32,000 By Provision for Doubtful Debts A/c 7,000
32,000 32,000

Dr. Partner's Capital A/c Cr.

Particulars X (`) Y (`) Z (`) Particulars X (`) Y (`) Z (`)

To Y's Current — 24,000 — By Balance b/d 1,19,000 1,12,000 —
A/c By Bank A/c — — 56,000
To Balance c/d 1,68,000 1,12,000 56,000 By General reserve 8,400 5,600 —
A/c
By Z's Current A/c 8,400 5,600 —
(Goodwiil)
By Revaluation A/c 19,200 12,800 —
By X's Current A/c 13,000 — —
1,68,000 1,36,000 56,000 1,68,000 1,36,000 56,000

Sample Paper 3 99

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 Working Notes:
1 1
Z's share of goodwill = 84,000 × = ` 14,000 New Ratio: Z's Share =
6 6

6 1 5
Total capital of firm = 56,000 × = ` 3,36,000 Remaining share = 1 – =
1 6 6
5 3 15
3 X's new share = × =
X's share of new capital = 3,36,000 × 6 5 30
6
5 2 10
= ` 1,68,000 Y's new share = × =
6 5 30
2
Y's share of new capital = 3,36,000 × 15 10 5
6 New Ratio = : : = 15 : 10 : 5
30 30 30
= ` 1,12,000 =3:2:1
OR

MARKS BREAKDOWN Ch 5
Topic: Deceased Partner's Executor's A/c
Pass journal entry & Make Executor A/c
Key Steps:
(to get full marks)
Recording of journal entry for A's share of profit (1m)
Preparation of A's Executor's A/c (5m)

Journal Entry

Date Particulars L.F. Debit (`) Credit (`)

2023
June 30 Profit and Loss Suspense A/c Dr. 1,20,000
To A's Capital A/c 1,20,000
(Being share of profit provided till the date of his
death)
Dr. A's Executor A/c Cr.

Date Particulars Amount (`) Date Particulars Amount (`)

2023 2023
June 30 To Furniture A/c 2,40,000 June 30 By A's Capital A/c 8,40,000
2024 2024
Mar. 31 To Balance c/d 6,27,000 Mar. 31 By Interest A/c 27,000
 6 9
 6, 00, 000 × 100 × 12 

8,67,000 8,67,000
2024 2024
June 30 To Bank A/c 2,36,000 Apr. 1 By Balance b/d 6,27,000
2025 (2,00,000 + 36,000) June 30 By Interest A/c 9,000
Mar. 31 To Balance c/d 4,18,000  6 3
 6, 00, 000 × 100 × 12 
2025
Mar. 31 By Interest A/c 18,000
 6 9
 4, 00, 000 × 100 × 12 

6,54,000 6,54,000

100 Accountancy Class XII

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 2025 To Bank A/c 2,24,000 2025
June 30 (2,00,000 + 24,000) Apr. 1 By Balance b/d 4,18,000
2026 June 30 By Interest A/c 6,000
Mar. 31 To Balance c/d 2,09,000 2026  6 3
Mar. 31  4, 00, 000 × 100 × 12 

By Interest A/c 9,000

 6 9
 2, 00, 000 × 100 × 12 

4,33,000 4,33,000

2026 To Bank A/c 2,12,000 2026

June 30 Apr. 1 By Balance b/d 2,09,000
June 30 By Interest A/c 3,000
 6 3
 2, 00, 000 × 100 × 12 

2,12,000 2,12,000

Caution
 Students generally make mistakes in calculating number of months for charging interest. So, they should be careful
while calculating number of months.

25. MARKS BREAKDOWN Ch 5

Topic: Preparation of Revaluation and Partners' Capital Account
Make Revaluation A/c & Partner's Capital A/c
Key Steps:
(to get full marks)
Revaluation A/c (2m)
Partner's Capital A/c (3m)
Working notes (1m)
Dr. Revaluation A/c Cr.

Particulars Amount (`) Particulars Amount (`)

To Stock A/c 20,000 By Land & Building A/c 2,00,000
To Bad debts A/c 2,000
To Profit transferred to Partner’s
Capital A/c:
Red 89,000
White 53,400
Blue 35,600 1,78,000
2,00,000 2,00,000
Dr. Partner's Capital A/c Cr.

Red White Blue Red White Blue

Particulars Particulars
(`) (`) (`) (`) (`) (`)
To White’s Capital By Balance b/d 6,00,000 4,00,000 2,00,000
A/c (Goodwill) 36,000 By Blue’s Capital A/c
To Red’s Current A/c 89,000 (Goodwill) — 36,000 —
To White’s Loan A/c 4,89,400 By Revaluation A/c 89,000 53,400 35,600
To Balance c/d 6,00,000 — 6,00,000 By Blue's Current A/c 4,00,400
6,89,000 4,89,400 6,36,000 6,89,000 4,89,400 6,36,000

Sample Paper 3 101

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 Working Notes:
(i) Old ratio = 5 : 3 : 2
New ratio = 1 : 1
Gaining ratio = New ratio – Old ratio
1 5
Red’s Gain = − =0
2 10
1 2 3
Blue’s Gain = − =
2 10 10
(ii) Treatment of Goodwill
3
White’s share of Goodwill = 1,20,000 × = ` 36,000
10
Since, only Blue is gaining, so only he will compensate to white for his share of goodwill.

26. MARKS BREAKDOWN Ch 7

Topic: Issue of Shares
Answer on the basis of given information (1m+1m+1m+1m+1m+1m)
Value Points:
(to get full marks)
(A) Calculate total face value of shares
(B) Find number of forfeited shares
(C) Find number of shares issued
(D) Calculate amount transferred to Capital Reserve
(E) Calculate amount of subscribed and fully paid
(F) Calculate amount of uncalled capital
(A) (a) ` 2,00,000
Explanation: Total shares issued during 31st March, 2024 = 40,000 shares
Shares issued to Vendor = 20,000 shares
Shares issued for cash = 40,000 – 20,000 = 20,000
Face value of shares issued for cash = 20,000 × 10 = ` 2,00,000
(B) (c) 2,000
Explanation: No. of not fully paid up shares on 31st March, 2023 = 5,000
(–) No. of not fully paid up shares on 31 March, 2024 = 3,000
No. of shares forfeited = 2,000
(C) (d) 83,000 shares
Explanation: No. of issued shares after forfeiture of shares = 85,000 – 2,000 = 83,000 shares
(D) (b) ` 12,000
Explanation: Loss on reissue of shares = 2,000 × 2 = ` 4,000
Amount transferred to Capital Reserve = 16,000 – 4,000 = ` 12,000
(E) (c) ` 8,20,000
Explanation: Amount in subscribed and fully paid up = ` 80,000 + (2,000 × 10) = ` 8,20,000
(F) (b) ` 5,50,000, ` 1,50,000
Explanation: Amount of uncalled capital on 31st March, 2023 = 10,00,000 – 4,50,000 = ` 5,50,000
Amount of uncalled capital on 31st March, 2024 = 10,00,000 – 8,50,000 = ` 1,50,000

PART - B
27. (c) Postulates OR
Explanation: Financial statements are (b) Window dressing
prepared on certain basic assumptions (pre– Explanation: Some companies in order to
cover up their bad financial position resort to
requisites) known as postulates such as going window dressing which involves showing a
concern postulate, money measurement financial position than what really exists by
postulate, realisation postulate, etc. changing the values in balance sheet.

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28. (b) 3 times activities as a financing company deals in
Explanation: Net profit after tax = ` 12,00,000 raising and investing funds as its normal course
Net profit before tax be x of operations.
x – 0.40x = 12,00,000 = x = ` 20,00,000
For a truck trading company, purchase of
Profit before tax = ` 20,00,000
trucks is a part of its operating activity as the
Interest on debentures = ` 1,00,00,000 × 10%
= ` 10,00,000 business deals in buying and selling of trucks.
Profit before tax and interest = ` 30,00,000 30. (b) Proposed dividend of current year is added
(20,00,000 + 10,00,000) in net profit while calculating net profit
Interest coverage ratio
before tax.
Net profit before interest and tax
= Explanation: Proposed dividend of previous
Interest expenses
year is added back in net profit while
30, 00, 000 calculating net profit before tax.
Interest Coverage Ratio = = 3 times
10, 00, 000 OR
(c) Only (III)
29. (c) Only Statement-I is true Explanation: Bank loan is a part of financing
Explanation: For a financing company, activities and payment of interest on bank loan
purchasing shares is a part of operating will result in outflow under financing activities.

31. MARKS BREAKDOWN Ch 9

Topic: Major headings and sub-headings
Identify Sub-heads and Major Heads (½m+½m+½m+½m+½m+½m)

Item Heading Sub-Heading

(A) Current maturities of long-term debts Current Liabilities Short-term Borrowings
(B) Furniture and Fixtures Non–Current Assets Property, Plant and Equipments
and Intangible Assets: (Property,
Plant and Equipment)
(C) Provision for Warranties Non–Current Liabilities Long-Term Provisions
(D) Income received in advance Current Liabilities Other Current Liabilities
(E) Capital Advances Non–Current Assets Long-term Loans and advances
(F) Advances recoverable in cash within Current Assets Short-term Loans and advances
the operation cycle.

32. MARKS BREAKDOWN Ch 10

Topic: Comparative Balance Sheet
Overall evaluation of missing blanks (3m)

Comparative Balance Sheet

as at 31st March, 2023 and 2024
2022-23 2023-24 Absolute %
Particulars
(`) (`) Change (`) Change
I. EQUITY AND LIABILITIES
1. Shareholder’s Funds
(a) Share Capital 4,00,000 6,00,000 2,00,000 50
(b) Reserves and Surplus 2,50,000 3,00,000 50,000 20
2. Non-Current Liabilities
(a) Long-term Borrowings 3,00,000 3,66,000 66,000 22
3. Current Liabilities
(a) Short-term borrowings 1,50,000 1,84,000 34,000 22.67
(b) Trade Payables 4,00,000 5,00,000 1,00,000 25
Total 15,00,000 19,50,000 4,50,000 30

Sample Paper 3 103

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 II. ASSETS
1. Property, Plant & Equipment and
Intangible Assets
(a) Property, Plant and Equipment 8,00,000 10,00,000 2,00,000 25
(b) Intangible Assets 2,00,000 2,50,000 50,000 25
2. Current Assets
(a) Inventories 4,00,000 5,80,000 1,80,000 45
(b) Cash and Cash Equivalents 1,00,000 1,20,000 20,000 20
Total 15,00,000 19,50,000 4,50,000 30

OR
33. MARKS BREAKDOWN Ch 11
Topic: Ratio Analysis MARKS BREAKDOWN Ch 11

Calculate Return on Investment Topic: Accounting Ratios

Key Steps: Calculate Current assets, liquid assets and inventories
(to get full marks) Key Steps:
Correct formula (1m) (to get full marks)
Calculation (2m) Correct formula (1m)
Correct Answer (1m) Calculation (2m)
Return on Investment Correct Answers (1m)
Current Ratio = 2.5 : 1
EBIT
= ×100 Let Current assets = 2.5x
Capital Employed
Current liabilities = x
15, 00, 000 Working capital = Current Assets
= × 100
, 20, 00, 000
1  – Current Liabilities
= 12.5% 60,000 = 2.5x – x
Interest = (15% of 20,00,000) 60,000 = 1.5x
 + (10% of 20,00,000) = 3,00,000 + 2,00,000 60, 000
x=
= ` 5,00,000. 1.5
Capital Employed = 12% Preference Share x = 40,000
Capital + Equity Share Capital + Reserves Current assets = 2.5 × 40,000 = ` 1,00,000
and Surplus + 15% Debentures + 10% Bank Current liabilities = ` 40,000
Loan = 30,00,000 + 40,00,000 + 10,00,000 + Liquid assets = 1.75 × 40,000 = ` 70,000
20,00,000 + 20,00,000 = ` 1,20,00,000 Inventories = Current assets
EBIT = Profits after Tax + Tax + Interest  – Liquid assets
= 6,00,000 + 4,00,000 + 5,00,000 = 1,00,000 – 70,000
= ` 15,00,000 = ` 30,000

34. MARKS BREAKDOWN Ch 12

Topic: Preparation of Cash Flow Statement
Calculation of cash flow from operating activities and financing activities (3m+3m)
Value Points:
(to get full marks)
(A) Preparation of Plant & Machinery A/c
(B) Calculation of interest.
(A) Calculation of Cash flow from Investing activities
Particulars Amount (`)
Proceeds from sale of plant 32,000
(–) Payment for purchase of plant (2,00,000)
Net Cash used in investing activities (1,68,000)

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Working Notes:
Book value of asset sold = 80,000 – 40,000 = ` 40,000
Loss on sale of Plant = 40,000 – 32,000 = ` 8,000
Dr. Plant and Machinery Account Cr.
Particulars Amount (`) Particulars Amount (`)
To balance b/d (3,00,000 + 50,000) 3,50,000 By Provision for depreciation 40,000
To Bank A/c (Purchase) (Balancing 2,00,000 By Bank A/c 32,000
figure) By Loss on Sale of Machinery A/c 8,000
By Balance c/d (4,00,000 + 70,000) 4,70,000
5,50,000 5,50,000
(B) Calculation of Cash flow from Financing activities
Particulars Amount (`)
Proceeds from issue of share capital (including premium) (2,00,000 + 20,000) 2,20,000
Proceeds from issue of 10% debentures (1,00,000 – 5,000) 95,000
Less: Interest paid on 10% debentures (25,000)
Net Cash flow from financing activities 2,90,000
Working Notes:

10 6
1. Interest on 10% debentures = 2, 00, 000 × × = ` 10,000
100 12

10 6
= 3, 00, 000 × × = ` 15,000
100 12
Total interest = ` 25,000
2. B
 onus shares were issued in the ratio 2 : 1 which means for the equity shares of ` 10,00,000, ` 5,00,000
equity shares were issued as bonus against which no cash had been received, Rest ` 2,00,000 shares
were issued to public at a premium of 10%.

Sample Paper 3 105

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