केंद्रीय दिद्यालय संर्ठन , नई दिल्ली

वशक्षा मंत्रालय,भारत सरकार के अधीन स्वायत्य वनकाय

Chapter wise Previous Year Board Asked Questions

कक्षा: बारहवीं / Class : 12th
ववषय : लेखाशास्त्र
Subject : Accountancy
सत्र : 2024-25

प्रेरणा स्त्रोत
डॉ .आर .सेंदिल कुमार कुमार,उपायुक्त
के.दि.सं. क्षेत्रीय कायाालय , भोपाल

मार्ािर्ाक
श्री दितेन्िर दसंह राित
प्राचाया , केंद्रीय दिद्यालय क्र.3 , भोपाल
संकलन
ईशा कविला, स्नातकोत्तर वशक्षक , वाविज्य केंद्रीय ववद्यालय नेिानगर
 FUNDAMENTALS OF PARTNERSHIP

Q MAR
KS
1 (Adjustment on account of omission of the interest on capitals and drawings in the accounts) 3
The capital accounts of Alka and Archana showed credit balances of ₹4,00,000 and ₹3,00,000
respectively, after taking into account drawings and net profit of 2,00,000. The drawings of the partners
during the year 2018-19 were:
(1) Alka withdrew 10,000 at the end of each quarter.
(ii) Archana's drawings were:
31st May, 2018 8,000
1st November, 2018 7,000
1st February, 2019 5,000
Calculate interest on partners' capitals @ 10% p.a. and interest on partners' drawings @ 6% p.a. for the
year ended 31st March, 2019. (C.B.S.E. 2020, Kolkata, Lucknow)
Ans: Opening Capitals 3,40,000 2,20,000
Interest on Capital @ 10% p.a. 34,000 22,000
Interest on Drawings:
Alka's Interest on Drawings = 40,000×6/100×4.5/12= Rs 900
Archana's Interest on Drawings = Rs 625
2 Questions: Puneet and Akshara were partners in a firm sharing profits and losses in the ratio of 2: 3. The 3
following was the balance sheet of the firm as at 31st March, 2019.
Balance Sheet of Puneet and Akshara as at 31st March, 2019 (C.B.S.E. 2020, Delhi)
Liabilities Amount (Rs) Assets Amount (Rs)
Capitals: Sundry Assets 200000
Puneet 90000
Akshara 110000
200000 200000

The profits ₹40,000 for the year ended 31st March, 2019 were divided between the partners without
allowing interest on capital @5% p.a. and commission to Akshara @1,000 per quarter.
The drawings of the partners during the year were:
Puneet ₹2,500 per month.
Akshara ₹10,000 per quarter.
Showing your workings clearly, pass necessary adjustment entry in the books of the firm.
SOLUTION:
Particulrs Dr Cr
Puneet Capital’ sA/c Dr 1,000
To Akshara Capital A/c 1,000

3 Questions: A, B and C were partners sharing profits and losses in the ratio of 2:2: 1. B was guaranteed a 3
profit of ₹10,00,000. The firm earned a profit of 17,50,000 for the year ended 31st March, 2020. Pass
Journal entries and prepare the Profit and Loss Appropriation Account for the year ended 31st March,
2020. (C.B.S.E. 2021, C)
SOLUTION: JOURNAL
Date Particulars LF Dr. Cr.
2020 Profit & Loss A/c Dr. 17,50,000
March To Profit & Loss Appropriation A/c
31 (Transfer of profit) 17,50,000
Profit & Loss Appropriation A/C Dr. 17,50,000
 To A's Capital A/c 5,00,000
To B's Capital A/c 10,00,000
To C's Capital A/c 2,50,000
(Profit distributed as per working note)
B's share in profit is 17,50,000×==₹7,00,000. Since he is guaranteed a minimum profit of ₹10,00,000, he
will get 10,00,000. Remaining profit of ₹7,50,000 will be distributed between A and C in their profit
sharing ratio of 2: 1.
A's share = 7,50,000 × 3 = ₹5,00,000
C's share = =7,50,000× 7,50,000×=₹2,50,000.00

4 Questions: Jay, Vijay and Karan 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 Jay and Vijay.
(ii) Karan was guaranteed a profit of ₹5,00,000 and Jay guaranteed that he will earn an annual fee of
₹2,00,000. Any deficiency arising because of guarantee to Karan will be borne by Jay and Vijay in the
ratio of 3: 2.
During the year ended 31st March, 2018 Jay 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 Accounts
of Jay, Vijay and Karan for the year ended 31st March, 2018. (C.B.S.E. 2022, C)
Ans: Share in Profit
Jai 3,05,800
Vijay 3,59,200
Karan 5,00,000

5 Questions Prem, Param and Priya were partners in a firm. Their fixed capitals were Prem ₹2,00,000; 3
Param ₹3,00,000 and Priya ₹5,00,000. They were sharing profits in the ratio of their capitals. It was
decided that the new profit sharing ratio will be 2:1:2 and its effect will be introduced retrospectively for
the last four years. The profits of the last four years were ₹2,00,000; ₹3,50,000; ₹4,75,000 and ₹5,25,000
respectively.
Showing your calculations clearly, pass a necessary adjustment entry to give effect to the new agreement
between Prem, Param and Priya. (C.B.S.E. 2015, All India)
Solution:
Param's Current A/c Dr. 1,55,000
Priya's Current A/c Dr. 1,55,000
To Prem's Current A/c 3,10,000]

6 QUESTIONS: Read the following hypothetical situation, answer question no. 1 and 2. 3
Richa and Anmol are partners sharing profits in the ratio of 3:2 with capitals of ₹ 2,50,000 and Rs 1,50,000
respectively. Interest on capital is agreed @ 6% p.a. Anmol is to be allowed an annual salary of 12,500.
During the year ended 31 March 2023, the profits of the year prior to calculation of interest on capital
but after charging Anmol's salary amounted to Rs 62,000.A provision of 5% of this profit is to be made in
respect of manager's commission.
Following is their Profit & Loss Appropriation Account (Cbse sample paper 2024)
Particulars (₹) Particulars (₹)
To Interest on Capital By Profit & loss account ----(2)------
Richa _____________ (After manager's
ANMOL commission)
To Anmol's Salary a/c 12,500
To Profit transferred to:
Richa's Capital A/C (1)
Anmol's Capital A/ -------------_-
----------- -----------
 Q.1 The amount to be reflected in blank (1) will be:
a) ₹37,200
b) ₹44,700
c) ₹22,800
d) ₹20,940
Q.2 The amount to be reflected in blank (2) will be:
a) ₹62,000.
b) ₹74,500.
c) ₹71,400.
d) ₹70,775

7 Questions: (cbse compt 2023) 3

On 01.04.2022, Ravi, Kavi and Avi started a partnership firm with fixed capitals of 6,00,000, ₹6,00,000
and 3,00,000 respectively. The partnership deed provided for the following:
(i) Interest on capital @ 10% per annum.
(ii) Interest on drawings @ 12% per annum.
(iii) An annual salary of 1,20,000 to Avi.
(iv) Profits and losses were to be shared in the ratio of their capitals.
The net profit of the firm for the year ended 31.03.2023 was₹ 3,08,000.
Interest on partners' drawings was Ravi₹ 4,800, Kavi ₹4,200 and Avi ₹3,000.
Prepare Profit and Loss Appropriation Account of Ravi, Kavi and Avi for the year ended 31.03.2023.
Ans ; IOC to Ravi Kavi and Avi will be Rs 60000, Rs60000 and Rs 30000
IOD Ravi Kavi and Avi will be Rs 4800, Rs4200 and Rs 3000
Share in Profit: Ravi Kavi and Avi will be Rs 120000, Rs 120000 and Rs 60000

8 Questions: P and Q were partners in a firm sharing profits and losses in the ratio of 2: 1. On 01.04.2022, 3
they admitted R as a new partner for 1/10th share of profits with a guaranteed minimum of 50,000. P
and Q continued to share profits as before but agreed to share any deficiency on account of guarantee
to R in the ratio of 3: 2. The net profit of the firm for the year ended 31.03.2023 was ₹ 3,00,000.
Pass necessary journal entries in the books of P and Q for the above transactions. 3 (cbse compt 2023)
Solution:
P Capital A/c dr 10000
Q Capital A/c Dr 6667
To R Capital A/c 16667

9 Questions (cbse compt 2023) 3

Sharma and Verma were partners in a firm sharing profits and losses in the ratio of 3: 2. Their fixed
capitals were 14,00,000 and 10,00,000 respectively. The partnership deed provided for the following:
(i) Interest on capital @ 10% per annum.
(ii) Interest on drawings @ 12% per annum
During the year ended 31.03.2023, Sharma withdrew and Verma withdrew₹ 1,00,000. After preparing
the accounts for the year ended 31.03.2023, it was realised that interest on capital was not allowed and
interest on drawings was not charged.
Showing your working notes clearly pass necessary journal entries in the books of the firm to rectify the
above error.
Solution:
Interest on Drawings A/c Dr 36000
To Sharma drawings A/c 24000
To Verma Drawings A/c 12000

10 Questions: (cbse compt 2023) 1

 Josh and Jeevan were partners in a firm. During the year ended 31.03.2022 Jeevan withdrew₹ 5,000 per
month starting from 30.06.2021. The partnership deed provided that interest on drawings will be
charged @ 12% per annum. The average number of months for which interest on Jeevan's total drawings
will be charged is:
(a) 6 months
(b) 6 and1/2-months
(c) 4 and 1/2 months
(d) 5 months
11 Q. Which of the following statements are correct: (C.B.S.E. 2021, Delhi) 1
(1) The liability of a partner for acts of the firm is unlimited.
(ii) Private assets of a partner can also be used for paying the debts of the firm.
(iii) Each partner is liable jointly with all other partners and also severally to the third parties for all the
acts of the firm done, while he is a partner.
(iv) The liability of a partner is limited to the extent of his capital contribution.
(A) Only (iii) (B) (i) and (ii)
(C) (i), (ii) and (iii) (D) (i), (ii), (iii) and (iv)

12 Questions. Mohan, Sohan and Suresh were partners in a firm sharing profits in the ratio of 2:2:1. Suresh 1
was guaranteed a profit of ₹70,000. Any deficiency on account of guarantee to Suresh was to be borne
by Mohan and Sohan in 3: 2 ratio. The profit of the firm for the year ended 31.3.2022 amounted to
₹2,00,000. (C.B.S.E. 2023, Rajasthan, U.P.)
Prepare Profit and Loss Appropriation Account of the firm for the year ended 31.3.2022.
[Ans. Share of Profit: Mohan ₹62,000; Sohan ₹68,000 and Suresh ₹70,000.]
13 Questions : Ridhima and Kavita were partners sharing profits and losses in the ratio of 3: 2. Their fixed 1
capitals were 1,50,000 and 2,00,000 respectively. The partnership deed provides for interest on capital
8% p.a. The net profit of the firm for the year ended 31 March, 2023 amounted to 21,000. The amount
of interest on capital credited to the capital accounts of Ridhima and Kavita will be:
(A) ₹ 12,000 and 16,000 respectively.
(B) 10,500 and 10,500 respectively.
(C) 9,000 and 12,000 respectively.
(D) 16,000 and 5,000 respectively. (C.B.S.E. 2024, All India)

14 Questions: Ruchika and Harshita were partners in a firm. Ruchika had withdrawn ₹9,000 at the end of 1
each quarter, throughout the year. The interest to be charged on Ruchika's drawings at 6% p.a. will be:
(A) 540
(B) 2,160
(C) ₹ 1,080
(D) ₹ 810 (C.B.S.E. 2024, All
India)
15 Questions: Read the following hypothetical situation and answer question numbers 1 and 2: 1
Keshav and Hitesh are partners sharing profits and losses in the ratio of 3: 2. On 31 March, 2023 after
division of profit of ₹15,000, their capitals were ₹ 55.000 and ₹45,000 respectively. During the year
Keshav's drawings were ₹1,500 at the beginning of each quarter and Hitesh withdrew ₹9,000 on 1
November, 2022.
After the final accounts have been prepared, it was discovered that interest on capital @ 5% p.a. and
interest on drawings 8% p.a. have not been taken into consideration. (C.B.S.E. 2024, All
India)
(1) Opening capital of Keshav was
(A) 35,000
(B) 39,000
(C) 43,000
(D) 52,000
(2) Amount of interest to be charged on Hitesh's drawings will be:
 (A) ₹225
(B) ₹4,500
(C) ₹300
(D) ₹7,200

16 Questions Mahi, Ruhi and Ginni are partners in a firm sharing profits and losses in the ratio of 6:4: 1. 1
Mahi guaranteed a profit of 50,000 to Ginni. Net profit for the year ending 31 March, 2023 was 1,10,000.
Mahi's share in the profit of the firm after giving guaranteed amount to Ginni will be:
(A) ₹20,000 (C.B.S.E. 2024, All India)
(B) ₹60,000
(C) 40,000
(D) ₹10,000
17 QUESTIONS 1
In the absence of an agreement, partners are entitled to: (Cbse sample paper 2024)
i) Profit share in capital ratio.
ii) Commission for making additional sale.
iii) Interest on Loan & Advances by them to the firm.
iv) Salary for working extra hours.
v) Interest on Capital.
Choose the correct option:
a) Only i), iv) and v).
b) Only ii) and iii).
c) Only iii).
d) Only i) and iii).

18 Questions ( cbse compt 2024) 1

Nikhil and Sharat were partners in a firm sharing profits and losses in the ratio of 4 : 3. Nikhil withdrew ₹
6,000 on the first day of every quarter for the year ended 31st March, 2023. Interest on drawings is to
be charged @ 5% p.a. Interest on Nikhil’s drawings will be calculated for :
(A) 6 months (B) 4.5 months (C) 7.5 months (D) 3 months

19 Questions: 1
Assertion: Batman, a partner in a firm with four partners has advanced a loan of ₹50,000 to the firm for
last six months of the financial year without any agreement. He claims an interest on loan of 23,000
despite the firm being in loss for the year. (Cbse sample paper 2024)
Reasoning: In the absence of any agreement/provision in the partnership deed, provisions of Indian
Partnership Act, 1932 would apply.
a) Both A and R are correct, and R is the correct explanation of A.
b) Both A and R are correct, but R is not the correct explanation of A.
c) A is correct but R is incorrect.
d) A is incorrect but R is correct.

20 Questions: Interest on Partner's loan is credited to: (Cbse sample paper 2024) 1
a) Partner's Fixed capital account.
b) Partner's Current account.
c) Partner's Loan Account.
d) Partner's Drawings Account.

21 Questions (cbse compt 2024) 1

Daksh and Ekansh are partners in a firm sharing profits and losses in the ratio of 3 : 1. Their capitals were
₹ 1,60,000 and ₹ 1,00,000 respectively. As per partnership deed, they were entitled to interest on capital
@ 10% p.a.. The firm earned a profit of ₹ 13,000 for the year ended 31st March, 2023.
Q. Daksh’s interest on capital will be : (A) ₹ 5,000 (B) ₹ 8,000 (C) ₹ 16,000 (D) ₹ 10,000
 Q. Ekansh’s share of profit/loss will be : (A) Nil (B) ₹ 9,750 (Loss) (C) ₹ 3,250 (Loss) (D) ₹ 9,750 (Profit)

22 1
Questions: (cbse compt 2023)
Persons who have entered into partnership with one another are individually called as:
(a)Partners
(b) Members
(c)Firm
(d) Owners

23 Questions: (cbse compt 2023) 1

Madhu and Radha were partners in a partnership firm sharing profits and losses in the ratio of 3: 2.
Madhu withdrew 20,000 in each quarter during the year ended 31.03.2023. Interest on drawings was to
be charged @ 6% p.a. Interest on Madhu's drawings will be :

(a) ₹3,000
(b) ₹2,400
(c) 1,800
(d) ₹4,800

24 Questions: (cbse compt 2023) 1

K and L were partners in a firm. Their partnership deed provided that interest on partner's drawings will
be charged @ 12% per annum. Interest on L's drawings for the year ended 31.03.2022 was calculated at
900.The necessary journal entry for charging interest on L's drawings will be:
Particulars DR CR
(a) Profit and Loss Appropriation A/c Dr. ₹900
To Interest on Drawings A/c ₹900
(b) Interest on Drawings A/c Dr. ₹900
To Profit and Loss Appropriation A/c ₹900
(c) L's Capital/Current A/c Dr. ₹900
To Interest on Drawings A/c ₹900
(d) Interest on Drawings A/c Dr. ₹900
To Partner's Capital/Current A/c ₹900
25 Q. In the absence of partnership deed, at which rate interest is allowed on a partner's loan?(C.B.S.E. 1
2015) Ans. 6% p.a.

26 Q. State the 'liability of a partner' in a partnership firm. (C.B.S.E. 2019, Delhi) 1

Ans. Liability of partners is Unlimited and Several (i.e. personal assets can be utilized to pay off the debts
of the firm).

27 Q. . What is meant by 'mutual agency' in case of partnership? (C.B.S.E. 2019, Chennai) 1

Ans. Mutual agency means every partner works as principal for himself as well as other partners.

28 Q. . Does partnership firm has a separate legal entity? Give reason in support of your answer. 1
(C.B.S.E. 2017, Delhi)
Ans. From legal viewpoint, Partnership firm has no separate legal entity because it is not a body
corporate. Its entity is affected by the retirement, death or insolvency of its partners.
29 Q. What is the maximum number of partners that a partnership firm can have? Name the Act that 1
provides for the maximum number of partners in a partnership firm. (C.B.S.E. 2016, Delhi)
Ans. As per Companies Act, 2013, the maximum number of partners in a partnership firm can be 50.

30 Questions 1
 Q. Gupta and Sharma were partners in a firm. They wanted to admit two more members in the firm. List
the categories of individual other than minors who cannot be admitted by them.(C.B.S.E. 2017, Delhi)1
Ans. (1) Persons of unsound mind;1
(ii) Persons who have been declared insolvent.
31 Q. A group of 40 people wants to form a partnership firm. They want your advice regarding the maximum 1
number of persons that can be there in a partnership firm and the name of the Act under whose
provisions it is given. (C.B.S.E. 2016)
Ans. As per Companies Act, 2013, the maximum number of partners in a partnership firm can be 50.
32 Q. A partnership firm has 50 members. All the partners have agreed to admit Ram and Mohan as new 1
partners. Can Ram and Mohan be admitted? Give reason in support of your answer.
(C.B.S.E. Sample Paper, 2017)
Ans. Ram and Mohan can't be admitted as partners because as per Companies Act, 2013 maximum
number of partners in a firm can be 50.
33 Q. In the absence of partnership deed, what is the ratio in which the profits of a firm are divided among 1
the partners? (C.B.S.E. 2015)
Ans. Equally.

34 Assertion (A):- Commission provided to partner is shown in Profit and Loss A/c. 1
Reason (R):- Commission provided to partner is charge against profits and is to be provided at fixed
rate.
a) (A) is correct but (R) is wrong
b) Both (A) and (R) are correct, but (R) is not the correct explanation of (A)
c) Both (A) and (R) are incorrect.
d) Both (A) and (R) are correct, and (R) is the correct explanation of (A) cbse sample paper 2022-
23
35 Sohan and Mohan are partners sharing profits and losses in the ratio of 2:3 with the capitals of 1
5,00,000 and 6,00,000 respectively. On 1st January 2022, Sohan and Mohan granted loans of 20,000
and 10,000 respectively to the firm. Determine the amount of loss to be borne by each partner for the
year ended 31st March 2022 if the loss before interest for the year amounted to ₹2,500.
a) Share of Loss Sohan-1,250 Mohan -₹1,250
b) Share of Loss Sohan-₹ 1,000 Mohan -₹1,500
c) Share of Loss Sohan 820 Mohan-₹1,230
d) Share of Loss Sohan-1,180 Mohan-1,770 cbse sample paper 2022-
23
36 Vihaan and Mann are partners sharing profits and losses in the ratio of 3:2. The firm maintains 1
fluctuating capital accounts and the balance of the same as on 31st March 2022 is 4,00,000 and
4,65,000 for Vihaan and Mann respectively. Drawings during the year were₹65,000 each. As per the
partnership Deed, Interest on capital @ 10% p.a. on Opening Capital has been allowed to them.
Calculate the opening capital of Vihaan given that the divisible profits during the year 2021-22 was
2,25,000.
a) 3,30,000
b) ₹4,40,000
c) ₹4,00,000 cbse sample paper 2022-23
d) ₹3,00,000
37 X and Y are partners. Y draws a fixed amount at the beginning of every 1 month. Interest on drawings is
charged @8% p.a. At the end of the year interest on Y's drawings amounts to 2,600. Monthly drawings
of Y were:
a) ₹8,000
b) ₹60,000
c) ₹7,000
d) ₹5,000 PB-1 BHOPAL REGION 2024-25
38 Vaibhavi, a partner withdrew 5,000 in the beginning of each quarter and interest on drawings was
calculated as 1,500 at the end of accounting year 31March2022.Whatisthe rate of interest on drawings
charged?
a) 6%p.a.
b) 8%p.a.
c) 10%p.a
d) 12%p.a. PB-1 BHOPAL REGION 2024-25
39 Assertion (A):- Commission provided to partner is shown in Profit and Loss A/c.
Reason(R):- Commission provided to partner is charge against profits and is to be provided at fixed
rate.
a) (A) is correct but(R)is wrong
b) Both(A) and (R) are correct, but(R)is not the correct explanation of(A)
c) Both (A) and (R) are incorrect.
D )Both(A)and(R)are correct, and (R) is the correct explanation of (A) PB-1 BHOPAL REGION 2024-25
 Board Asked Questions
Goodwill
1. Rishi and Suman were partners in a firm. Their capitals were: Rishi ₹ 1,20,000 and Suman ₹
80,000. The normal rate of return in similar business is 12%. The profits of the last four years
were:
2019-20 Rs33000
2020-21 Rs22000
2021-22 Rs31000
2022-23 Rs34000

Calculate goodwill of the firm based on:

(a) Three years' purchase of the last four years' average profits.
(b) Capitalisation of super profit. (2023-2024)
2. Sunny and Rohan were partners in a firm sharing profits and losses in the ratio of 2 : 1. Their books
showed that the capital employed on 31st March, 2023 was ₹ 7,00,000. The average profits earned by the
firm were ₹ 90,000. Calculate the value of goodwill on the basis of 5 years purchase of super profits
assuming that the normal rate of return is 10%.
(2023-2024)
3. Amit and Kartik are partners sharing profits and losses equally. They decided to admit Saurabh for an
equal share in the profits. For this purpose, the goodwill of the firm was to be valued at four years'
purchase of super profits. The Balance Sheet of the firm on Saurabh's admission was as follows:
Liabilities Amount (₹) Assets Amount(₹)
Capital Accounts Fixed Assets (Tangible) 75,000
Amit 90,000 Furniture 15,000
Kartik 50,000 1,40,000 Stock 30,000
Creditors 5,000 Debtors 20,000
General Reserve 20,000 Cash 50,000
Bills payable 25,000
Total 1,90,000 1,90,000
The normal rate of return is 12% p.a. Average profit of the firm for the last four years was ₹30,000.
Calculate Saurabh’s share of goodwill. (2024-25 Sample)
4. Kamini, Lata and Meera were partners in a firm sharing profits and losses equally. Neel was admitted as
a
new partner for an equal share in the profits of the firm. Neel brought his share of capital and premium
for goodwill in cash. On the date of admission of Neel, goodwill appeared in the books at ₹ 1,20,000.
The
existing goodwill is to be written off among :
(a) Old partners in old ratio.
(b) New partners in new ratio.
( c) Sacrificing partners in sacrificing ratio.
(d) Old partners in sacrificing ratio. (2023-2024
Compartment)
5. Asha and Babita were partners in a firm. Their capitals were ₹ 1 ,00,000 and ₹ 10,00,000 respectively.
The normal rate of return was 15%. The profits of the last four years were :
2019 – 20 ₹2,50,000
2020 – 21 ₹(50000)
2021 – 22 ₹8,00,000
2022 – 23 ₹5,00,000
The closing stock for the year 2022 – 23 was undervalued by ₹ 1,00,000. Goodwill is to be valued at two
years purchase of the last four years’ average super profits. Calculate the value of goodwill.
(2023-2024
Compartment)

6. Pearl and Ruby were partners in a firm with a combined capital of ₹2,50,000. The normal rate of return
was 10%. The profits of the last four years were as follows :
2019 -20 ₹35,000
2020 -21 ₹25,000
2021- 22 ₹32,000
2022- 23 ₹33000
The closing stock of the year 2022-23 was overvalued by ₹5000. Goodwill is to be valued at three
years purchase of the last four years’ average super profits. Calculate the value of goodwill. (2022-
2023)

7. On 1st April, 2023, a partnership firm had assets of ₹ 2,00,000 including cash of ₹ 6,000 and bank
balance of ₹ 14,000 . The Partner’s Capital accounts showed a balance of ₹ 1,90,000 and reserves
constituted the rest. If the normal rate of return is 10% and the goodwill of the firm is valued at ₹ 60,000 at
4 years purchase of super profits, find the average profit of the firm . (2022-
2023 Compartment)
8. On 1st April, 2022, the capital of the firm of Ashu and Madhav is ₹1,50,000. The normal rate of return on
capital employed is 10%. Average profits of the firm are ₹ 23,500. Calculate goodwill of the firm based on
three years purchase of super profits. (2021-2022 )
1

QUESTION BANK–CHANGE IN PROFIT SHARING RATIO AMONG THE EXISTING PARTNERS

Q.NO. QUESTIONS
Q.1 X and Y were partners in a firm sharing profits in the ratio of 5 : 3. With effect from 1 st April 2003 they agree to share
profits equally. Calculate the individual partner’s gain or sacrifice due to change in ratio.
Ans.1 X sacrifice and Y gain 1/8th share.
Q.2 X sold his business to Y. Calculate the value of Goodwill taking into consideration the following factors;
(a) Goodwill is valued at three years of the average profits of the last four years. Profits of the last four years 2009
– Rs.40,000, 2010 – Rs. 58,000, 2011 – Rs. 53,000 , 2012- Rs.62000.
(b) Abnormal loss of Rs. 2,000 due to theft has reduced the profits of the year 2009.
(c) A speculative and lottery profit of Rs.5, 000 was received during the year 2011 which was included in that year’s
profit.
(d) Profits of the year 2012 were reduced by Rs.10, 000 on such a machinery which was destroyed by fire during
the year.

Ans.2 Goodwill Rs. 1, 62,000

Q.3 A,B, C are partners sharing profits and losses equally. They agree to admit D for equal share. For this purpose goodwill
is to be valued at 3 year’s purchase of average profits of last 5 years which were as follows:
Year ending on 31st March 2007 Rs.60,000 (Profit)
Year ending on 31st March 2008 Rs.1,50,000 (Profit)
Year ending on 31st March 2009 Rs.20,000 (Loss)
Year ending on 31st March 2010 Rs.2,00,000 (Profit)
Year ending on 31st March 2011 Rs.1,85,000 (Profit)
On 1st October 2010 a computer costing Rs.40,000 was purchased and debited to office expenses account on
which depreciation is to be charged @25% p.a. Calculate the value of Goodwill.
Ans.3 Goodwill Rs.3,66,000.
Q.4 Following information is available about the business of a firm:
(a) Profits: In 2013 Rs.40,000 , 2014 Rs.50,000 , 2015 Rs.60,000.
(b) Recurring income of Rs. 4,000 is included in the profits of 2014.
(c) Profits of 2013 have been reduced by Rs.6,000 because goods were destroyed by fire.
(d) Goods have not been insured but it is thought them in future. The insurance premium is estimated at Rs.400
per year.
(e) Reasonable remuneration of the proprietor of business is Rs.6,000 per year but it has not been taken into
account for calculation of above mentioned profits.
(f) Profits of 2015 include Rs.5,000 income on investment.
Goodwill is agreed to be valued at two year’s purchase of the weighted average profits of the past three years. The
appropriate weights to be used are :- 2103 :- 1 , 2014:- 2 , 2015:- 3.
Ans.4 Goodwill Rs. 88,200.
Q.5 (a) P , Q and R sharing profits in the ratio of 3 : 2 : 1 they decide to share future profits and losses in the
ratio of 4 : 3 : 2 with effect from 1st April 2012 Following is an extract of their Balance sheet as at 31st March
2012:
liabilities Amount Assets Amount (Rs.)
(Rs.)
Workmen Compensation Reserve 3,00,000
Show the accounting treatment if a claim on account of workmen’s compensation is estimated at
Rs.1,20,000.
(b) They also decided that 55 of the profit of the firm will be devoted for providing school uniform to the
students belonging to low income group admitted to private school as per the provision pf right to
Education act 2009. Identify the two values involves in making such a decision.
Q.6 A,B and C are partners sharing profits and losses in the ratio of 2 : 5 : 5. From 1st January 2015 they decided
to share profit and losses in the ratio of 3 : 5 ; 7. You are required to fill the following journal entry:
Date Particulars L.F. Amount(Dr.) Rs. Amount (Cr.)
Rs.
2003 A’s Capital A/c Dr. ---------------------
Jan.1 B,s Capital A/c Dr. 90,000
To C’s Capital A/c -------------------
( Adjustment for goodwill due to change in
profit sharing ratio)
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Q.7 A , B and C are partners sharing profits in the ratio of 7 : 5 : 4. From 1st January 2003 they decided to share
profits and losses in the ratio of 3 : 2 : 1. You are required to fill up the following journal entries:
Date Particulars L.F. Amount(Dr.) Rs. Amount
(Cr.) Rs.
2003 A’s Capital A/c Dr. ----------------------
Jan.1 B,s Capital A/c Dr. --------------------
To C’s Capital A/c 7,200
( Adjustment for goodwill due to change in profit
sharing ratio)
Q.8 P, Q and R are partners in a firm and sharing Profits and losses in the ratio of 5 : 4 : 3. On 31 st March 2003
their Balance sheet was as follows:-
Liabilities Amount(Rs.) Assets Amount (Rs.)
Sundry Creditors 50,000 Cash at Bank 40,000
Outstanding expenses 5,000 Sundry Debtors 2,10,000
General Reserve 75,000 Stock 3,00,000
Capital account: Furniture 60,000
P 4,00,000 Plant and Machinery 4,20,000
Q 3,00,000
R 2,00,000 9,00,000
10,30,000 10,30,000
st
It was decided that with effect from 1 April 2003 the profit sharing ratio will be 4 : 3 : 2.For this purpose
the following revaluation were made:-
(i) Furniture be taken at 80% of its book value.
(ii) Stock be appreciated by 20%.
(iii) Plant and Machinery be valued at Rs.4,00,000.
(iv) Create provision for doubtful debt for Rs.10,000 on debtors.
(v) Outstanding expenses be increased by Rs.3,000.

Partners agreed that altered values are not to be recorded in the books and they also do not want to
distribute the general reserve.
You are required to post a single journal entry to give the effect of the above. Also prepare the revised
Balance sheet.
Ans.8 Profit on revaluation Rs.15,000. Adjustment for Revaluation and General Reserve Single entry Debit P’s capital A/c by
Rs.2,500 and Credit R’s Capital A/c by Rs.2,500 Balance sheet total Rs.10,30,000.
Q.9 X and Y are partners sharing profits and losses in the ratio of 4 : 3. Their Balance Sheet as at 31st December
2013 stood as follows:-
Liabilities Amount (Rs.) Assets Amount (Rs.)
Sundry Creditors 28,000 Cash 20,000
Reserve 42,000 Sundry Debtors 1,20,000
Capital Account Stock 1,40,000
X – 2,40,000 Fixed Assets 1,50,000
Y – 1,20,000 3,60,000
4,30,000 4,30,000
st
They decided that with effect from 1 January 2014 they will share profits and losses in the ratio of 2 : 1.
For this purpose they decided that ;-
(i) Fixed Assets are to be depreciated by 10%.
(ii) A provision for bad and doubtful debt create @6% on debtors.
(iii) Stock be valued at Rs.1,90,000.
(iv) An amount of Rs. 3,700 included in creditors not likely to be claimed.

Partners decided to record the revised values in the books. However they do not want to disturb the
reserves. You are required to prepare journal entries Capita Accounts of the partners and the Revised
Balance Sheet.
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Ans.9 Profit on Revaluation Rs.31,500. Adjustment for Reserve Debit X Capital A/c by Rs.4,000 and Credit Y’s
Capital A/c by Rs.4,000. Balance of capital A/c X- Rs.2,54,00, Y-Rs.1,37,500. Total of Balance Sheet
Rs.4,57,800.
Q.10 X , y and Z are partners sharing profits and losses in the ratio of 7 : 5 : 4. Their Balance Sheet as at 31st March
2013 Stood as follows:-

Liabilities Amount(Rs.) Assets Amount(Rs.)

Capital Account Sundry Assets 6,00,000
X- 2,00,000
Y- 1,50,000
Z- 1,20,000 4,70,000
General Reserve 75,000
Profit and Loss A/c 15,000
Creditors 40,000
6,00,000 6,00,000
st
Partners decided that with effect from 1 April 2013 they will share profits and losses in the ratio of 3 : 2 :
1. For this purpose goodwill of the firm was valued at Rs.1,50,000. The partners do not want to record the
goodwill and also do not want to distribute the general reserve and profits.
Pass a single journal entry to record the change and prepare a revised Balance Sheet.
Ans.10 Debit X by Rs.15,000 and Y by Rs. 5,000 Credit Z by Rs. 20,000. Total of Balance Sheet Rs. 6,00,000.
Q.11 Arun and Varun were partners sharing profits in the ratio of 2 : 3. With effect from 1st May 2003 they agreed to share profits in the
ratio of 1 : 2. For this purpose the goodwill of the firm is to be valued at two year’s purchase of the average profits of the last three
years which were Rs.1,50,000 , Rs. 1,40,000 and Rs. 2,20,000 respectively. Reserve appear in the books at Rs.1,10,000. Partners
neither want to show goodwill in the books nor want to distribute the reserves. You are required to give effect to the change
by passing a single journal entry.
Ans.11 Debit Varun’s Capital A/c Rs.30,000 and Arun’s Capital a/c Rs.30,000. And gaining ratio of Varun 1/15 and Sacrificing
ratio of Arun 1/15.
Q.12 X , Y and Z were sharing profits and losses in the ratio of 5 : 3 : 2. They decided to share future profits and losses in
the ratio of 2 : 3 : 5 with effect from 1st April 2014. They decided to record the effect of the following without effecting
their book values:-
(i) profit and loss Account Rs.24,000.
(ii) Advertisement Suspense Account Rs.12,000.
Pass necessary adjusting journal entry.
Ans.12 Debit Z,s Capital A/c 3,600 and Credit X’s Capital A/c 3,600. Gaining ratio of Z -1/10 and Sacrificing ratio of X – 1/10.
Q.13 A , B and C are partners sharing profits equally. From 1st April 2008 they decided to share profits in the ratio of 3 : 4 :
5. On that date profit and loss account showed a credit balance of Rs. 90,000. Partners do not to distribute the profit
and loss Account balance but prefer to record the change by an adjustment entry.You are required to give the
adjusting entry.
Ans.13 Debit C’s Capital A/c Rs.7,500 and Credit A’s Capita A/c rs.7,500. C’s Gaining Ratio1/12 and A’s Sacrificing Ratio 1/12.
Q.14 P , Q and R are partners in a firm sharing profits equally. They decided that in future R will get 1/7 th share in profits.
On the day of change firm’s goodwill is valued at Rs.42,000. Give Journal Entries in the books of the firm due to
change in profit sharing ratio.
Ans.14 New Ratio 3/7, 3/7, 1/7 P and Q gain 2/21 each and R sacrifice 4/21.Debit P and Q by Rs.4,000 each and Credit R by
Rs.8,000.
Q.15 A , B and C are partners sharing profits and losses in the ratio of 1 : 2 : 3. From 1st April 2008 they decided to share the
profits in the ratio of 2 :3 : 4. On that date the firm’s Balance sheet showed the following balances :-
(a) Profit and Loss Account Debit balance Rs.90,000.
(b) Profit and Loss account Credit balance Rs.90,000.
Pass necessary journal entries in both the condition and give proper working notes.
Ans. (a) Debit A’s Capital a/c by Rs.15,000 , B’s Capital A/c by Rs. 30,000 , and C’s Capital a/c by Rs. 45,000.
15 (b) Credit A’s Capital a/c by Rs.15,000 , B’s Capital A/c by Rs. 30,000 , and C’s Capital a/c by Rs. 45,000.
Q.16 A and B are partners in a firm sharing profits in the ratio of 3 : 2. On 31 st March 2003 their Balance Sheet showed a
general Reserve of Rs. 54,000. On that date they decided to admit C as a new partner. The new profit sharing ratio
among A , B and C will be 4 : 3 : 2. Record the necessary journal entries in the books of the firm under the following
circumstances :-
(i) When they want to transfer general reserve in their capital Account.
(ii) When they don’t want to transfer general reserve in their Capital Account and prefer to record an adjustment
entry for the same.
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Ans.16 (i) General Reserve A/c Dr. Rs. 54,000 , Cr.A’s Capital A/c 32,400 and B’s Capital A/c Rs.21,600
(ii) Dr. C’s Capital A/c 12,000 Cr. A’s Capita A/c 8,400 and Cr. B’s Capital A/c 3,600.
Q.17 Q.8 A ,B and C are partners in a firm Sharing profits and losses in the ratio of 4 : 3 : 2 they decided to share future
profits and losses in the ratio of 2 : 3 : 4 with effect from 1 st April 2008. An extract of their Balance Sheet as at 31st
March 2008 is as follows:-
liabilities Amount (Rs.) Assets Amount (Rs.)
Investment Fluctuation Reserve 54,000 Investment (at cost) 6,00,000
Show the accounting treatment under the following alternative cases:-
Case (i) If there is no other information.
Case (ii) If the market value of investment is Rs. 6,00,000.
Case (ii) If the market value of the Investment is 5,91,000.
Ans.17 Case (i) and Case (ii) Credit A’s Capital A/c by Rs. 24,000 , B’s Capital A/c by Rs.18,000 and C,s Capital A/c by Rs.12,000.
Case (iii) Credit A’s Capital A/c by Rs.20,000 , B’s Capital A/c by Rs.15,000 and C,s Capital A/c by Rs.10,000.
Q.18 A and B are partners in a firm Sharing profits and losses in the ratio of 2 : 3 they decided to share future profits and
losses equally with effect from 1st April 2008. An extract of their Balance Sheet as at 31st March 2008 is as follows:-
liabilities Amount (Rs.) Assets Amount (Rs.)
Workmen Compensation Reserve 40,000
Show the accounting treatment under the following alternative cases:-
Case (i) If there is no other information.
Case (ii) If a claim on account of Workmen’s Compensation is estimated at Rs.25,000.
Ans.18 Case (i) Credit A’s Capital A/c by Rs.16,000 and B’s Capital A/c by Rs.24,000.
Case (ii) Credit A’s Capital A/c by Rs.6,000 and B’s Capital A/c by Rs.9,000.and Balance showed a balance Workmen’s
Compensation at the liabilities side Rs.15,000.
Q.19 Meera, Myra and Neera 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, 2019. Their Balance Sheet as on that date showed a balance of Rs.
45,000 in Advertisement Suspense Account. The amount to be debited respectively to the capital accounts of Meera,
Myra and Neera for writing off the amount in Advertisement Suspense Account will be :
(A) Rs. 18,000, Rs. 18,000 and Rs. 9,000 (B) Rs. 15,000, Rs. 15,000 and Rs. 15,000
(C) Rs. 21,000, Rs. 15,000 and Rs. 9,000 (D) Rs. 22,500, Rs. 22,500 and Nil
Q.20 Milan, Khilan and Silam 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 1 st April, 2019. After the revaluation of assets and re-assessment of liabilities,
Revaluation Account showed a loss of Rs. 15,000. The amount to be debited in the capital account of Milan because
of loss on revaluation will be : (A) Rs. 15,000 (B) Rs. 6,000 (C) Rs. 7,000 (D) Rs. 5,000
Q.21 Red, Blue and White 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 1 st April, 2019. Their Balance Sheet as on that date showed a balance of Rs. 22,500 in Deferred Revenue
Expenditure Account. The amount to be debited respectively to the capital accounts of Red, Blue and White for writing off Deferred
Revenue Expenditure will be :
(A) Rs. 7,500, Rs. 7,500, and Rs. 7,500 (B) Rs. 4,500, Rs. 9,000, and Rs. 9,000
(C) Rs. 10,500, Rs. 7,500, and Rs. 4,500 (D) Rs. 11,250, Nil, and Rs. 11,250
Q.22 Samiksha, Ash and Divya were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. With effect from 1st April, 2019,
they agreed to share future profits and losses in the ratio of 2 : 5 : 3. Their Balance Sheet showed a debit balance of Rs. 50,000 in
the Profit and Loss Account and a balance of Rs. 40,000 in the Investment Fluctuation Fund. For this purpose, it was agreed that :
(i) Goodwill of the firm be valued at Rs. 3,00,000. (ii) Investments of book value of Rs. 5,00,000 be valued at Rs. 4,80,000. Pass the
necessary journal entries to record the above transactions in the books of the firm.
Q.23 Yash and Karan were partners in an interior designer firm. Their fixed capitals were Rs. 6,00,000 and Rs. 4,00,000 respectively.
There were credit balances in their current accounts of Rs. 4,00,000 and Rs. 5,00,000 respectively. The firm had a balance of Rs.
1,00,000 in General Reserve. The firm did not have any liability. They admitted Radhika into partnership for th 4 1 share in the
profits of the firm. The average profits of the firm for the last five years were Rs. 5,00,000. Calculate the value of goodwill of the
firm by capitalization of average profits method. The normal rate of return in the business is 10%.
Q.24 A, B, C and D were partners in a firm sharing profits in the ratio of 3 : 2 : 3 : 2. On 1.4.2016, their Balance Sheet was as follows :
Balance Sheet of A, B, C and D as on 1.4.2016
Liabilities Amount(Rs.) Assets Amount(Rs.)
Capitals : 10,10,000 Fixed Assets 8,25,000
A-2,00,000 Current Assets 3,00,000
B-2,50,000
C-2,50,000
D-3,10,000
Sundry Creditors 90,000
Workmen Compensation Reserve 25,000
11,25,000 11,25,000
From the above date the partners decided to share the future profits in the ratio of 4 : 3 : 2 : 1. For this purpose the goodwill of
the firm was valued at Rs. 2,70,000. It was also considered that : (i) The claim against Workmen Compensation Reserve has been
5

estimated at Rs. 30,000 and fixed assets will be depreciated by Rs. 25,000. (ii) Adjust the capitals of the partners according to the
new profit sharing ratio by opening Current Accounts of the partners. Prepare Revaluation Account, Partners’ Capital Account
and the Balance Sheet of the reconstituted firm.
 CBSE XII COMPILED BY SUDHIR SINHA
ACCOUNTANCY RETIREMENT OF PARTNER

RETIREMENT OF PARTNER – CBSE QUESTION BANK

1 L, M and N were partners in a firm sharing profit & losses in the ratio of 2:2:3 . On 31st
March 2023, their Balance Sheet was as follows:
Amount Amount
Liabilities (₹) Assets (₹)
Creditors 80,000 Land and Building 5,00,000
Bank overdraft 22,000 Machinery 2,50,000
Employees provident Fund 38,000 Furniture 3,50,000
Long term debts 2,00,000 Investment 1,00,000
Capital A/cs: Stock 4,00,000
L 6,25,000 Debtors 2,00,000
M 4,00,000 Bank 20,000
N 5,25,000 15,50,000 Deferred Advertisement Exp 70,000
18,90,000 18,90,000

On 31st March 2023, M retired from the firm and remaining partners decided to carry on
business. It was decided to revalue assets and liabilities as under:
a) Land and Building be appreciated by₹ 2,40,000 and Machinery be depreciated 10%.
b) 50% of investments were taken by the retiring partner at book value.
c) Provision for doubtful debts was to be made at 5% on debtors.
d) Stock will be valued at market price which is ₹1,00,000 less than the book value.
e) Goodwill of the firm be valued at ₹5,60,000. L and N decided to share future profits and
losses in the ratio of 2:3.
f) The total capital of the new firm will be ₹32,00,000 which will be in proportion of profit -
sharing ratio of L and N.
g) Gain on revaluation account amounted to ₹1,05,000.
Prepare Partner’s Capital accounts and Balance sheet of firm after M’s retirement.
[CBSE SAMPLE PAPER 2024)

2 Anshul, Babita and Chander were partners in a firm running a successful business of car
accessories. They had agreed to share profits and losses in the ratio of 1/2 : 1/3 : 1/6
respectively. After running business successfully and without any disputes for 10 years,
Babita decided to retire due to old age and the Anshul and Chander decided to share future
profits and losses in the ratio of 3 : 2. The accountant passed the following journal entry for
Babita share of goodwill and missed some information. Fill in the missing figures in the
following Journal entry and calculate the gaining ratio.

Anshul’s Capital A/c Dr …………

Chander’s Capital A/c Dr 21,000
To Babita’s Capital A/c …………..
(Chander’s share of Goodwill debited to amounts of continuing partners in their gaining
ratio) [CBSE SAMPLE PAPER 2024)

3 Mark, Musk and Alen were partners in a firm sharing profits in 2:2:1 ratio, On 31.3.2023
Alen retires from the firm. On the date of Alen’s retirement the Balance Sheet of the firm was
as follows:
Balance Sheet of Mark, Musk and Alen as at 31.3.2023.
Liabilities Amount(₹) Assets Amount(₹)
Creditors 54,000 Bank 55,000
Bill payable 24,000 Debtors 12,000
Outstanding Rent 4,400 Less: Provision 800 11,200
 CBSE XII COMPILED BY SUDHIR SINHA
ACCOUNTANCY RETIREMENT OF PARTNER

Provision for legal claims 12,000 Stock 18,000

Capitals Furniture 8,200
Mark 92,000 Premises 1,94,000
Musk 60,000
Alen 40,000 1,92,000
2,86,400 2,86,400
On Alen’s retirement it was agreed that:
(a) Premises will be appreciated by 5%.
(b) Furniture will be appreciated by ₹2,000.
(c) Stock will be depreciated by 10%.
(d) Provision for bad debts was to be made at 5% on debtors.
(e) Provision legal damages to be made for ₹14,400.
(f) Goodwill of the firm is valued at ₹48,000.
(g) ₹50,000 from Alen’s Capital A/c will be transferred to his Loan A/c and balance will be
paid by cheque.
Prepare Revaluation A/c, Partners Capital A/c’s and Balance Sheet of Mark and Musk after
Alen’s Retirement. [CBSE ADDITIONAL QUESTIONS FOR PRACTICE 2023]

4 Reyansh, Aayushman and Sabhya were partners in a firm sharing profits and losses in the
ratio of 5 : 3 : 2. Their Balance Sheet as at 31st March, 2022 was as under :

Amount Amount
Liabilities (₹) Assets (₹)
Sundry Creditors 2,20,000 Cash 1,60,000
General Reserves 1,20,000 Debtors 1,80,000
Less: Prov for
Capital A/cs: D/D 20,000 1,60,000
Reyansh 6,00,000 Stock 2,00,000
Aayushman 5,00,000 Machinery 6,00,000
Sabhya 3,00,000 14,00,000 Building 4,00,000
Patents 1,20,000
Profit and Loss A/c 1,00,000
17,40,000 17,40,000

Reyansh retired on the above date and it was agreed that:

(i) Goodwill of the firm on Reyansh’s retirement was valued at ₹12,00,000.
(ii) Aayushman and Sabhya will share future profits in the ratio of 2 : 3.
(iii) An unrecorded creditor of ₹40,000 will be taken into account.
(iv) Debtors of ₹30,000 will be written off as bad debts.
(v) Amount payable to Reyansh was to be transferred to his loan amount.
Pass necessary journal entries for the above transactions in the books of the firm.
[CBSE (Main Exam 2023), 6 Marks]

5 Suman, Vivek and Vinod were partners in a firm sharing profits and losses in the ratio of
5:3:2. Suman retired on 1st April, 2022. After making all adjustments relating to revaluation,
goodwill and accumulated profits, etc., the capital accounts of Vivek and Vinod showed
credit balances of ₹3,60,000 and ₹1,40,000 respectively.
It was decided to adjust the capitals of Vivek and Vinod in their new profit sharing ratio.
Pass necessary journal entries for bringing in or withdrawal of the necessary amounts. Show
your working clearly. [CBSE (Main Exam 2023), 3 Marks]

6 B, P and T were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. On
31.03.2022, their Balance Sheet was as follows:
 CBSE XII COMPILED BY SUDHIR SINHA
ACCOUNTANCY RETIREMENT OF PARTNER

Balance Sheet of B, P and T as at 31st March, 2022

Liabilities (₹) Assets (₹)
Creditors 1,40,000 Bank 1,44,000
General Reserves 2,00,000 Stock 66,000
Workmen Compensation Fund 90,000 Debtors 1,50,000
Capital A/cs: Less: Prov 20,000 1,30,000
B 4,00,000 Furniture 70,000
P 2,00,000 Machinery 2,20,000
T 1,00,000 7,00,000 Land and Building 5,00,000
11,30,000 11,30,000

On the above date, B retired from the firm on the following terms:
(i) Goodwill of the firm will be valued at <3,60,000 and B’s share will be adjusted without
opening goodwill account.
(ii) Furniture will be reduced to ₹60,000.
(iii) A claim of ₹1,00,000 was admitted for workmen’s compensation.
(iv) B was paid ₹20,000 through a cheque and the balance was transferred to his loan account.
Prepare Revaluation Account and Partner’s Capital Accounts.
[CBSE (Comptt Exam 2023), 6 Marks]

7 Heena, Meena and Tina are partners in a firm sharing profits and losses equally. Their
Balance Sheet on April 1st, 2020 was as follows:
Balance Sheet of Heena, Meena & Tina as on 1st April, 2020
Liabilities (₹) Assets (₹)
Bills Payable 12,000 Building 40,000
Sundry Creditors 18,000 Machinery 30,000
General Reserves 12,000 Furniture 12,000
Capital A/cs: Stock 22,000
Heena 30,000 Debtors 20,000
Meena 30,000 Less Provision 1,000 19,000
Tina 28,000 88,000 Bank 7,000
1,30,000 1,30,000

Tina retired from the firm on the above date and the following was agreed upon:
a) Building was to be appreciated by 20%.
b) Machinery was to be depreciated by ₹1,500.
c) Provision for doubtful debts was to be increased to ₹1,500.
d) Goodwill was valued at ₹21,000 on Tina's retirement and the same was to be treated
without opening goodwill account.
e) The balance in Tina's Capital account will be transferred to her Loan account
Prepare Revaluation Account and Partners' Capital Accounts.
[CBSE (Main Exam 2022), 5 Marks]

8 Madhu, Tina and Neha were partners in a firm sharing profits and losses in the ratio of
4:3:3. On 31st March, 2022, Tina retired and her share was taken over by Madhu and Neha
in the ratio of 2 : 1. Calculate the new profit sharing ratio of Madhu and Neha.
[CBSE (Comptt Exam 2022, SET A), 2 Marks]
 CBSE XII COMPILED BY SUDHIR SINHA
ACCOUNTANCY RETIREMENT OF PARTNER

9 A, B and C were partners a firm sharing profits and losses in the ratio of 3:2:1. On 31st
March, B retired from the firm. On B’s retirement the goodwill of the firm was valued at
₹1,80,000.
Calculate B’s share of goodwill and pass necessary journal entry for the same without
opening goodwill account. [CBSE (Comptt Exam 2022, SET A), 2 Marks]

10 P, Q, R and S were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2 : 1.
On 31st March 2022, P retired from the firm. P’s share was taken over by Q, R and S in the
ratio of 1 : 2 : 3. Calculate the new profit sharing ratio of Q, R and S.
[CBSE (Comptt Exam 2022, SET B), 2 Marks]

11 Geeta, Seeta and Meeta were partners a firm sharing profits and losses in the ratio of 2:2:1.
On 31st March, 2022, Meeta retired from the firm. On Meeta’s retirement the goodwill of the
firm was valued at 3 years’ purchase of average profits of the last 5 years. The profits of the
last 5 years were:
Year Profit (₹)
2017-2018 70,000
2018-2019 80,000
2019-2020 90,000
2020-2021 1,00,000
2021-2022 1,10,000
Calculate Meeta’s share of Goodwill and pass necessary journal entry for the same without
opening goodwill account. [CBSE (Comptt Exam 2022, SET B), 2 Marks]

12 Sharad, Sharma, Singh and Shree were partners in a firm sharing profits and losses in the
ratio of 4 : 3 : 2 : 1. The firm closes its books on 31st March every year. On 31st March,
2022 Shree retired and his share was taken over by Sharad, Sharma and Singh in the ratio
of 2 : 3 : 4. Calculate the new profit sharing ratio of the remaining partners after Shree’s
retirement. [CBSE (Comptt Exam 2022, SET C), 2 Marks]

13 Verma, Dharma and Karma were partners in a firm sharing profits and losses in the ratio of
4 : 3 : 3. The firm closes its books on 31st March every year. On 31st March, 2022, Veena
retired. On Veena’s retirement, the goodwill of the firm was valued at ₹2,70,000.
Pass the necessary journal entry for the treatment of Goodwill on Veena’s retirement without
opening goodwill account. [CBSE (Comptt Exam 2022, SET C), 2 Marks]

14 Ravi, Mohan and Pandey were partners in a firm sharing profits and losses in the ratio of
7:8:9. On 31st March, 2022, their Balance Sheet was as follows:
Balance Sheet of Ravi, Mohan and Pandey as at 31st March, 2022
Liabilities (₹) Assets (₹)
Creditors 1,41,000 Bank 27,000

General Reserves 24,000 Stock 91,000

Debtors 2,10,000
Capital A/cs: Less: Prov 10,000 2,00,000
Ravi 3,00,000 Machinery 3,00,000
Mohan 4,00,000 Land and Building 10,00,000
Pandey 8,43,000 15,43,000 Profit and Loss 90,000
17,08,000 17,08,000

On 31st March, 2022, Mohan retired from the firm on the following terms:
(i) Goodwill of the firm was valued at ₹4,80,000.
 CBSE XII COMPILED BY SUDHIR SINHA
ACCOUNTANCY RETIREMENT OF PARTNER

(ii) Mohan’s share of goodwill will be credited to his account without opening goodwill
account.
(iii) Debtors of ₹10,000 will be written off and a provision of 10% for bad and doubtful debts
will be created on debtors.
(iv) Machinery will be depreciated by 10% and land and building will be appreciated by 5%.
(v) The balance of Mohan’s capital account will be transferred to his loan account.
Prepare Revaluation Account and Mohan’s Capital Account on Mohan’s retirement in the
books of the firm.
[CBSE (Comptt Exam 2022), 5 Marks]

15 X, Y and Z were partners sharing profits and losses in the ratio of 5:3:2. Their balance sheet
as at 31st March 2020 was as follows:
Balance Sheet of Heena, Meena & Tina as on 31st March, 2020
Liabilities (₹) Assets (₹)
Creditors 66,500 Land 3,00,000
Bills Payable 10,000 Furniture 10,000
Profit and Loss Account 22,500 Debtors 20,000
Capital A/cs: Less: Prov 500 19,500
X 1,20,000 Stock 20,000
Y 97,000 Patents 45,000
Z 71,000 2,88,000 Bank 50,000
4,44,500 4,44,500
On the above date, Z retired. The terms of retirement were:
1. Goodwill of the firm was valued at ₹80,000.
2. Land will be appreciated by 10% and furniture will be depreciated by 5%.
3. Provision for legal claims will be made at ₹61,000.
4. 90,000 from Z’s capital account will be transferred to his loan account and the
balance will be paid to him by cheque.
Prepare Revaluation Account and Partner’s Capital Account.
[CBSE (Comptt Exam 2021), 8 Marks]

CBSE EXAM’S MULTIPLE-CHOICE QUESTIONS

1 G, S and T were partners sharing profits in the ratio 3:2:1. G retired and his dues towards
the firm including Capital balance, Accumulated profits and losses share, Revaluation Gain
amounted to ₹5,80,000. G was being paid ₹7,00,000 in full settlement. For giving that
additional amount of ₹1,20,000, S was debited for ₹40,000. Determine goodwill of the firm.
(a). ₹1,20,000 (b). ₹80,000
(c). ₹2,40,000 (d). ₹ 3,60,000
[CBSE SAMPLE PAPER 2024, 1 MARK]

2 Aman, Aadhar and Avinash were partners and sharing profits in the ratio of 3 : 2 : 1. Avinash
retired from the firm on 1st July, 2022. On the date of Avinash’s retirement, the balance
sheet showed a debit balance of ₹1,20,000 in the Profit and Loss Account. For calculating
the amount payable to Avinash, this balance will be transferred:
(a) To the debit side of the capital accounts of Aman and Aadhar in old profit sharing ratio.
(b) To the debit side of the capital accounts of Aman, Aadhar and Avinash in old profit
sharing ratio.
(c) To the credit side of the capital accounts of Aman and Aadhar in new profit sharing ratio.
(d) To the credit side of the capital accounts of Aman and Aadhar in their gaining ratio.
CBSE (Main Exam 2023]
 CBSE XII COMPILED BY SUDHIR SINHA
ACCOUNTANCY RETIREMENT OF PARTNER

3 Nidhi, Kunal and Kabir are partners in a firm sharing profits in the ratio of 2 : 1 : 2. Kunal
retired and the balance in his capital account after making necessary adjustments on
account of reserves, revaluation of assets and reassessment of liabilities was ₹80,000. Nidhi
and Kabir agreed to pay him ₹1,00,000 in full settlement of his claim. Kunal’s share of
goodwill of the firm, on his retirement was:
(a) ₹4,000 (b) ₹20,000
(c) ₹16,000 (d) ₹1,80,000
CBSE (Main Exam 2023, Set A]

4 Gurpreet, Vishal and Ananya are partners in a firm sharing profits in the ratio of 2 : 3 : 1.
Vishal retires and the balance in his capital account after making necessary adjustments on
account of reserves, revaluation of assets and re-assessment of liabilities is ₹1,20,000.
Gurpreet and Ananya agreed to pay him ₹1,80,000 in full settlement of his claim. Vishal’s
share of Goodwill of the firm, on his retirement is:
(a) ₹1,20,000 (b) ₹60,000
(c) ₹30,000 (d) ₹15,000
CBSE (Main Exam 2023, Set B]

5 Gaurav, Sonu and Anita are partners in a firm sharing profits in the ratio of 4 : 3 : 2. Sonu
retires and the balance in his capital account after making necessary adjustments on
account of reserves, revaluation of assets and re-assessment of liabilities is ₹4,00,000.
Gaurav and Anita agreed to pay him 4,60,000 in full settlement of his claim. Sonu’s share
of goodwill of the firm, on his retirement is:
(a) ₹20,000 (b) ₹60,000
(c) ₹1,80,000 (d) ₹1,20,000
CBSE (Main Exam 2023, Set C]

6 Pooja, Nita and Anita were partners in a firm sharing profits and losses in the ratio of 3:2:1.
Pooja retired and her share is taken up by Nita and Anita equally. The new profit sharing
ratio of Nita and Anita will be:
(a) 2 : 1 (b) 7 : 5
(c) 1 : 1 (d) 3 : 2 CBSE (Main Exam 2023]

7 Madhu, Tina and Neha were partners in a firm sharing profits and losses in the ratio of
4:3:3. On 31st March, 2022, Tina retired and her share was taken over by Madhu and Neha
in the ratio of 2 : 1. Calculate the new profit sharing ratio of Madhu and Neha.
CBSE (Comptt Exam 2023, Set A]

8 X, Y and Z were partners in a firm sharing profits in the ratio of ½, 1/3 and 1/6
irrespectively. Z decided to retire from the firm. On the date of his retirement, Workmen
Compensation Reserve of ₹1,20,000 was appearing in the balance sheet of the firm. The
claim on account of workmen compensation was determined at ₹67,500. Excess of claim
amount over the reserve will be
(a) Debited to revaluation account (b) Credited to revaluation account.
(c) Debited to partner’s capital account. (d) Credited to partner’s capital account
CBSE (Comptt Exam 2021]
1

CBSE QUESTIONS DEATH OF A PARTNER

Q-1 An account operated to ascertain the loss or gain at the time of death of a Partner is
called
(a) Realisation Account (b) Executors Account
(c) Revaluation Account (d) Deceased Partners capital account
Q-2 A, B and C are partners in a firm sharing profits and losses in the ratio of 2:2:1. On
March, 31, 2018 C died. Accounts are closed on December 31st every year. The sales for the
year 2017 was Rs. 6,00,000 and the profits were Rs. 60,000. The sales for the period for the
period January 1, 2018 to March 31st 2018 were Rs.2,00,000. The share of deceased Partner
in the current year’s profit on the basis of sales is
(a) Rs.20,000 (b) Rs. 8,000 (c) Rs. 3,000 (d) Rs. 4,000
Q-3 A, B and C were partners sharing profits and losses in the ratio of 2:2:1. Books are
closed on 31st March every year. C died on November 5, 2018. Under the Partnership deed
the executors of the deceased partner are entitled to his share of profit to the date of death
calculated on the basis of last year’s profit. Profit for the year ended 31 st March, 2018 was
Rs. 2,14,000. C’s share of profit will be
(a) Rs.28,000 (b) Rs.32,000 (c) Rs.28,800 (d) Rs.48,000
Q-4 On death of a Partner, the remaining partner(s) who have gained due to change in
profit sharing ratio should compensate the
(a) Deceased partner only (b) Remaining partners (who have sacrificed) as well as
deceased partner
(c) Remaining partners only (who have sacrificed) (d) None of the above
Q-5 Which account is opened to transfer deceased partner’s share of profit to his capital
account
(a) P&L Adjustment account (b) P&L Appropriation account
(c) P&L Suspense account (d) None of the above
Q-6 Kiran, umesh and Aditya were in Partnership firm. Suddenly on October 31,2018, Kiran
died. Amount payable to her on that date amounted to Rs. 1,05,000. Rs. 5000 was paid
immediately and balance was paid in 4 equal annual instalments along with interest @ 12%
p.a.starting from 31st October 2019. Calculate the interest due as on 31st March, 2019.
Financial year was followed as accounting year by the firm.
(a) Rs. 2,500 (b) Rs.3,000 (c) Rs.4,500 (d) Rs. 3,750
Q-7 Karan, Aman and Girish were Partners with capitals of Rs. 3,00,000’; Rs.2,50,000 and
Rs.2,00,000 respectively as on 31st March, 2018. Aman died, partners decided to pay the
entire amount to Aman’s Executor but they only had Rs.50,000 cash and rest of the amount
was to be brought in by Karan and Girish in such a way that their future capital will be equal.
Calculate the amount to be brought in by Karan and Girish.
(a) Rs.50,000 by Karan and Rs.1,50,000 by Girish
(b) Rs.50,000 by Girish and Rs.1,50,000 by Karan
(c) Rs.25,000 by Karan and Rs.1,25,000 by Girish
(d) Rs.25,000 by Girish and Rs.1,25,000 by Karan
Q.1 Puneet, Purav and Parth were partners in a firm sharing profits and losses in the ratio of 4:3:1.
The firm closes its books on 31st March every year. As per the terms of partnership deed, on the
death of any partner, the Goodwill of the firm will be calculated on the basis of 3 times the average
2

profits of last 4 years. Puneet died on 1st July, 2021. The profits for last four years were: Year 2017-
18 Profit Rs. 90,000 ,2018-19 Rs.1,00,000 ,2019-20 Rs. 1,30,000 ,2020-21 Rs.80,000 Puneet's share of
profit upto the date of death was to be calculated on the basis of previous year's profit.
(i) Calculate goodwill of the firm and Puneet's share of goodwill.
(ii) Calculate Puneet's share in the profits of the firm till the date of his death.
(iii) Pass necessary journal entries for the treatment of goodwill without opening goodwill account
and for Puneet's share of profit at the time of his death.
Q.2 X, Y and Z were partners in a firm. The firm closes its books on 31st March every year. On 31st
December, 2021, X died. The partnership deed provided that the share of deceased partner in the
profit of the firm till the date of his death will be calculated on the basis of last years’s profit. The
profit for the year ended 31.3.2021 was ` 6,00,000. Calculate X’s share in the profit of the firm till the
date of his death and pass the necessary journal entry for the same in the books of the firm.
Q.3 P. Q and R were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 3. P died on
30th June, 2021. The partnership deed provided that on the death of a partner, his share in the
profits of the firm till the date of his death will be calculated on the basis of the average profits of
the last five years. The profits of the last five years were: Year ` 2016-2017 Rs.2,00,000 2017-
2018 Rs.3,00,000 2018-2019 Rs. 4,00,000 2019-2020 Rs.5,00,000 2020-2021 Rs.6,00,000 The firm
closes its books on 31st March every year. Calculate P's share in the profits of the firm and pass
necessary journal entry for the same.
Q.4 Ramya, Avanya and Kamma were partners in a firm sharing profits in the ratio of 2:2:1
respectively. On 31st March, 2018, their balance sheet was as under: Balance Sheet as at 31st
March, 2018
Liabilities Amount(Rs.) Assets Amount
(Rs.)
Capitals: Fixed assets 5,20,000
Ramya 3,90,000 Debtors 3,80,000
Ananya 4,00,000 Stock 2,30,000
Kamna 3,00,000 Cash 5,60,000
Reserve fund 3,00,000
Creditors 3,00,000
16,90,000 16,90,000
Ananya died on 30th August, 2013. It was agreed between her executors and the remaining partners
that: (i) Goodwill of the firm be valued at 3 years’ purchase of average profits for the last three
years. The average profits were ` 6,00,000. (ii) Interest on capital be provided at 12% p.a. (iii) Her
share in the profits up to the date of death will be calculated on the basis of average profits for the
last three years.
Prepare Ananya’s Capital Account as on 30th August, 2018.
Q.1 Ram, Mohan and Sohan were partners in a firm sharing profits and losses in the ratio of 5:3:2.
On 31St March 2014 their Balance Sheet was as under:-
Liabilities Amount(Rs.) Assets Amount(Rs.)
Ram’s Capital 1,50,000 Leasehold 1,25,000
Mohan’s Capital 1,25,000 Patents 30,000
Sohan ‘s Capital 75,000 Machinery 1,50,000
Creditors 1,55,000 Stock 1,90,000
Workmen’s Compensation 30,000 Cash at Bank 40,000
Reserve
5,35,000 5,35,000
st
Sohan died on 1 August 2014 It was agreed that:
3

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

(ii) Machinery be valued at Rs.1,40,000,Patents at Rs.40,000,Leasehold at Rs.1,50,000 on
this date.
(iii) For the purpose of calculating Sohan’s share in the profit of 2014-15 the profit should
be taken to have accrued on the same scale as in 2013-14,which were Rs.75,000.

Prepare Sohan’s Capital Account and Revaluation Account.

Q.2 Risha and Nisha were partners. The partnership deed provides:
(i) That the account be balanced on 31st December each year.
(ii) The profits be divided as follows:
Risha one-half, Nisha one-third, and carried to Reserve account one-sixth.
(iii) That the even of the death of a partner her executor will be entitled to the following:-
(a) The capital to her credit at the date of death.
(b) Her proportion of profit to date of death based on the average profits of the last
three completed years.
(c) Her share of Goodwill based on three year’s purchase of the average profits for the
three preceding completed years.
st
On 31 December 2006 the Trial Balance was as under:-
Particulars Amount(Dr.Rs.) Amount(Cr.Rs.)
Risha’s Capital 90,000
Nisha’s Capital 60,000
Reserves 30,000
Biils Receivables 50,000
Investments 40,000
Cash 1,10,000
Creditors 20,000
The profits for the three years were: 2004 Rs.4,200,2005 R.3,900, 2006 Rs.4,500. Nisha died on 31 st
May 2007. Draw up the deceased partner’s Capital A/c and Executor’s A/c.
Q.3 X, Y and Z were partners sharing profits in the ratio 3:2:1 on 31st March 2008 their Balance Sheet
stood as under:-
Liabilities Amount(Rs.) Assets Amount(Rs.)
X’s Capital 75,000 Cash at Bank 70,000
Y’s Capital 70,000 Investments 50,000
Z‘s Capital 50,000 Patents 15,000
Creditors 72,000 Stock 25,000
General Reserve 24,000 Debtors 20,000
Buildings 75,000
Machinery 36,000
2,91,000 2,91,000

Z died on May 31st 2008. It was agreed that:-

(a) Goodwill was valued at 3 year’s purchase of the average profits of the last five years which
were 2003 -Rs.40,000, 2004-Rs.40,000,2005-Rs.30,000,2006-Rs.40,000 and 2007-Rs.50,000.
(b) Machinery was valued at Rs.70,000, Patents at Rs. 20,000 and Buildings at Rs.66,000.
(c) For the purpose of calculating Z’s share of profits till the date of death it was agreed that the
same be calculated based on the average profits for the last 2 rears.
4

(d) The executor of the deceased partner is to be paid the entire amount due by mean of a
cheque.
Prepare Z’s Capital Account to be rendered to the executor and also a Journal entries for the
transactions.
Q.4 Khanna , Seth and Mehta were partners in a firm sharing profits in the ratio of 3 :2 : 5. On 31-12-
2010 the Balance Sheet of the firm was as follows:-
Liabilities Amount(Rs.) Assets Amount(Rs.)
Khanna’s Capital 3,00,000 Cash at Bank 45,000
Seth’s Capital 2,00,000 Stock 30,000
Mehta”s Capital 5,00,000 Debtors 1,20,000
General Reserve 1,00,000 Buildings 5,00,000
Loan to Seth 50,000 Machinery 1,70,000
Creditors 75,000 Goodwill 3,00,000
Profit and Loss A/c 60,000
12,25,000 12,25,000

On 14th March 2011 Seth died.

The partnership deed provided that on the death of a partner the executor of the deceased partner is
entitled to:-
(i) Balance in the Capital Account.
(ii) Share in profits up to the date of death on the basis of last year’s profit.
(iii) His share in the profit and loss on revaluation of assets and liabilities which were as
follows:
(a) Land and Building was to be appreciated by Rs.1,20,000.
(b) Machinery was to be depreciated to Rs.1,30,000 and Stock to Rs.25,000.
(c) A provision of 2.5% for bad and doubtful debts was to created on debtors.
(iv) The net amount payable to Seth’s executors was transferred to his loan account which
was to be paid later.
Prepare Revaluation Account, Partners Capital Account, Seth’s Executors Account and the Balance
Sheet of Khanna and Mehta Who decided to continue the business keeping their capital balances in
their new profit sharing ratio. Any surplus or deficit to be transferred to Current account of the
partners.
Q.5 Following is the Balance sheet of A, B, and C as at 31st December 2004:
Liabilities Amount(Rs.) Assets Amount(Rs.)
A’s Capital 60,000 Tools 6,000
B’s Capital 30,000 Furniture 48,000
B’s Capital 30,000 Stock 36,000
Workmen Compensation Reserve 19,200 Debtors 36,000
Creditors 18,000 Cash at Bank 30,000
Cash in Hand 1,200
157,200 1,57,200

B died on 31st March 2005. Under the partnership agreement the executor of B was entitled to:-
(a) Amount standing to the credit of his Capita Account.
(b) Interest on Capital which amounted to Rs.375.
(c) His share of goodwill Rs.21,000.
5

(d) His share of profit Rs.20,400 on 1st April 2005 and last financial year to the date of death which
amounted to Rs.2,625.
B’s executor was paid Rs. 20,400 on 1st April 2005 and the balance in four equal yearly instalments
starting from 31-03-2006 with interest @6% p.a.
Pass necessary journal entries and draw up B’s Account to be rendered to his executor and B’s
Executor’s account till it is finally paid.

Q.1 Assertion: If new profit sharing ratio of remaining partner is not given
Reason: It will assume that the remaining partner continue to share profit and losses in the new ra
(A) Both Assertion and reason are true and reason is correct explanation of assertion.
(B) Assertion and reason both are true but reason is not the correct explanation of assertion.
(C) Assertion is true, reason is false.
(D) Assertion is false, reason is true.
Q.2 Assertion: gaining Ratio is calculated when a partner Retires or Dies Reason: Gaining
ratio is calculated only by one method
(A) Both Assertion and reason are true and reason is correct explanation of assertion.
(B) Assertion and reason both are true but reason is not the correct explanation of assertion.
(C) Assertion is true, reason is false.
(D) Assertion is false, reason is true.
Q.3 Assertion: retiring partner is entitled to his share of goodwill at the time of retirement. Reason:
goodwill earned by the firm is result of efferts of all existing partners in the past
(A) Both Assertion and reason are true and reason is correct explanation of assertion.

(B) Assertion and reason both are true but reason is not the correct explanation of assertion.
(C) Assertion is true, reason is false.
(D) Assertion is false, reason is true.
Q.4 Assertion: At the time of retirement Revaluation account is prepared
Reason: revaluation and Reessement is made by the method other than Admission of partner
(A) Both Assertion and reason are true and reason is correct explanation of assertion.
(B) Assertion and reason both are true but reason is not the correct explanation of assertion.
(C) Assertion is true, reason is false.
(D) Assertion is false, reason is true.
6

Assertion: retiring partner is entitled to Interest @10 %p.a. till the loan is paid off
Reason:Instead of Interest he may take that share of profit which has been earned by the firm by the amou
him
(A) Both Assertion and reason are true and reason is correct explanation of assertion.
(B) Assertion and reason both are true but reason is not the correct explanation of assertion.
(C) Assertion is true, reason is false.
(D) Assertion is false, reason is true.

Assertion (A): On retirement, the old partnership agreement comes to an end and a new partnership agree
comes into existence between the remaining partners.
Reason (R): Retirement of the partnership leads to the reconstitution of the firm.
(A) Both Assertion and reason are true and reason is correct explanation of assertion.
(B) Assertion and reason both are true but reason is not the correct explanation of assertion.
(C) Assertion is true, reason is false.
(D) Assertion is false, reason is true.

Assertion (A): When goodwill is not appearing in the books, retiring or deceased partner’s capital account i
credited with his share of goodwill and gaining partners’ capital accounts are to be debited in gaining ratio.
Reason (R): Goodwill needs to be compensated by the gaining partners in the gaining ratio.
A) Both Assertion and reason are true and reason is correct explanation of assertion.
(B) Assertion and reason both are true but reason is not the correct explanation of assertion.
(C) Assertion is true, reason is false.
(D) Assertion is false, reason is true.

Assertion (A): Ram, Rahim and Ron share profits in the ratio 2:3:5. Ram decides to retire. The new profit-sh
ratio is 3:5. If the profit earned was Rs1,50,000 before retirement. Rahim’s share is Rs 45,000.
Reason (R): The profits are shared in the new profit-sharing ratio.
A) Both Assertion and reason are true and reason is correct explanation of assertion.
(B) Assertion and reason both are true but reason is not the correct explanation of assertion.
(C) Assertion is true, reason is false.
(D) Assertion is false, reason is true

Assertion (A): Unrecorded outstanding repair bill at time of death of partner is recorded on debit side of
Revaluation a/c.
Reason (R): Increase in capital of partner is recorded on credit side of Capital account.
A) Both Assertion and reason are true and reason is correct explanation of assertion.
(B) Assertion and reason both are true but reason is not the correct explanation of assertion.
(C) Assertion is true, reason is false.
(D) Assertion is false, reason is true
7
 DISSOLUTION OF PARTNERSHIP FIRM (CBSE EXAM QUESTION BANK)
CBSE XII
ACCOUNTANCY DISSOLUTION OF PARTNERSHIP FIRM
Question 1. Ankit, Bobby and Kartik were partners in a firm sharing profits in the ratio 4:3:3.
The firm was dissolved on 31-3-2018. Pass the necessary Journal entries for the following
transactions after various assets (other than cash and bank) and third-party liabilities had been
transferred to Realisation Account:
(i) The firm had stock of ₹80,000. Ankit took over 50% of the stock at a discount of 20%
while the remaining stock was sold off at a profit of 30% on cost.
(ii) A liability under a suit for damages included in creditors was settled at ₹32,000 as
against only ₹13,000 provided in the books. Total creditors of the firm were ₹50,000.
(iii) Bobby’s sister’s loan of ₹20,000 was paid off along with interest of ₹2,000.
(iv) Kartik’s Loan of ₹12,000 was settled at ₹12,500. [CBSE MAIN SET A 2019]

Question 2. Gaurav, Saurabh and Vaibhav were partners in a firm sharing profits and losses
in the ratio of 2:2:1. They decided to dissolve the firm on 31st March, 2018. After transferring
Sundry assets (other than cash in hand and cash at Bank) and third-party liabilities to
realisation account, the assets were realized and liabilities were paid off as follows:
(i) A machinery with a book value of ₹6,00,000 was taken over by Gaurav at 50% and stock
worth ₹5,000 was taken over by a creditor of ₹9,000 in full settlement of his claim.
(ii) Land and building (book value ₹3,00,000) was sold for ₹4,00,000 through a broker who
charged 2 % commission.
(iii) The remaining creditors were paid ₹76,000 in full settlement of their claim and the
remaining assets were taken over by Vaibhav for ₹17,000.
(iv) Bank loan of ₹3,00,000 was paid along with interest of ₹21,000.
Pass necessary journal entries for the above transactions in the books of the firm.
[CBSE MAIN SET B 2019]

Question 3. Ravi, Shankar and Madhur were partners in a firm sharing profits in the ratio of
7:2:1. On 31st March, 2018, the firm was dissolved, after transferring sundry assets (other than
cash in hand and cash at bank) and third-party liabilities in the realization account the following
transactions took place.
(i) Debtors amounting to ₹1,40,000 were handed over to a debt collection agency which
charged 5% commission. The remaining debtors were ₹47,000, out of which debtors of
₹17,000 could not be recovered because the same became insolvent.
(ii) Creditors amounting to ₹5,000 were paid ₹3,500 in full settlement of their ₹claim and
balance creditors were handed over stock of ₹90,000 in full settlement of their claim of
₹95,000.
(iii) A bills receivable ₹2,000 discounted with the bank was dishonoured by its acceptor and
the same had to be met by the firm.
(iv) Profit on realisation amounted to ₹6,000.
Pass necessary journal entries for the above transactions in the books of Ravi, Shankar and
Madhur. [CBSE MAIN SET C 2019]

Question 4. Ravi and Mukesh were partners in a firm sharing profits and losses equally. On
31st March, 2019 their firm was dissolved. On the date of dissolution their Balance Sheet
showed stock of ₹60,000 and creditors of ₹70,000. After transferring stock and creditors to
realisation account the following transactions took place: a) Ravi took over 40% of total stock at
20% discount.
b) 30% of total stock was taken over by creditors of ₹20,000 in full settlement.
c) Remaining stock was sold for cash at a profit of 25%.
d) Remaining creditors were paid in cash at a discount of 10%.
Pass necessary journal entries for the above transactions in the books of the firm.
[CBSE COMPARTMENT SET A 2019]
 CBSE XII

ACCOUNTANCY DISSOLUTION OF PARTNERSHIP FIRM

Question 5. Singh and Jain were partners in a firm sharing profits and losses in the ratio of
3:7. On 31st March, 2019 their firm was dissolved. On the date of dissolution, the Balance
Sheet showed stock of ₹90,000 and creditors of ₹1,00,000. After transferring the assets (other
than cash in hand and cash at bank) and third-party liabilities to realisation account the
following transactions took place:
a) Singh took over 50% of the total stock at 10% discount.
b) 20% of the total stock was taken over by creditors of ₹20,000 in full settlement.
c) Remaining stock was sold for cash at 10% loss.
d) Remaining creditors were paid by cheque at a discount of 5%.
Pass necessary journal entries for the above transactions in the books of the firm.
[CBSE COMPARTMENT SET B 2019]

Question 6. Amrit and Preet were partners in a firm sharing profits and losses in the ratio of
5:3. On 31st March, 2019 their firm was dissolved. On the date of dissolution their Balance
Sheet showed stock of ₹2,00,000 and creditors of ₹1,20,000. After transferring assets (other
than cash in hand and cash at bank) and third-party liabilities to realisation account the
following transactions took place.
a) 40% of the total stock was taken over by Amrit at 10% less than book value.
b) 20% of the total stock was taken over by a creditor of ₹50,000 in full settlement of his
account.
c) The remaining creditors were paid at a discount of ₹5,000.
d) The remaining stock was sold for cash for ₹90,000.
Pass necessary journal entries for the above transactions in the books of the firm.
[CBSE COMPARTMENT SET C 2019]

Question 7. Pass the necessary journal entries for the following transactions on the dissolution
of the partnership firm of Tony and Rony after the various assets (other than cash) and external
liabilities have been transferred to Realization Account:
(i) An unrecorded asset of ₹2,000 and cash ₹3,000 was paid for liability of ₹6,000 in full
settlement.
(ii) 100 shares of ₹10 each have been taken over by partners at market value of ₹20 per
share in their profit sharing ratio, which is 3 : 2.
(iii) Stock of ₹30,000 was taken over by a creditor of ₹40,000 at a discount of 30% in full
settlement.
(iv) (iv) Expenses of realisation ₹4,000 were to be borne by Rony. Rony used the firm’s cash
for paying these expenses. [CBSE MAIN SET A 2020]

Question 8. Rakesh, Ram and Rohan were partners sharing profits in the ratio of 5 : 3 : 2. On 31 st
March, 2018, their Balance Sheet was as follows :
Balance Sheet of Rakesh, Ram and Rohan as at 31st March, 2018
Liabilities (₹) Assets (₹)
Creditors 70,000 Land and Building 3,50,000
Rohan’s Loan 20,000 Stock 3,00,000
Mrs Rohan’s Loan 20,000 Debtors 2,00,000

Capital A/cs: Less: Prov. for 10,000 1,90,000

b/d 70,000
Rakesh 4,00,000 Cash
Ram 3,00,000
 Rohan 1,00,000 8,00,000
9,10,000 9,10,000

The firm was dissolved on the above date on the following terms:

CBSE XII

ACCOUNTANCY DISSOLUTION OF PARTNERSHIP FIRM

a) Land and building and stock were sold for ₹6,00,000. Debtors were realised at 10% less than the
book value.
b) Mrs. Rohan’s loan was settled by giving her an unrecorded computer of ₹22,000.
c) Rakesh paid off one of the creditors ₹20,000 in settlement of ₹30,000.
d) Rohan’s loan was fully settled at ₹18,500.
Prepare Realisation Account. [CBSE MAIN SET B 2020]
[Loss on Realisation Account: ₹28,500]

Question 9. Mona and Sona were partners in a firm sharing profits in the ratio of 2 : 3. On 31st March,
2019, their Balance Sheet was as under :
Balance Sheet of Mona and Sona as at 31st March, 2019
Liabilities (₹) Assets (₹)
Creditors 2,10,000 Land and Building 6,00,000
Employees’ Provident Fund 2,00,000 Debtors 3,10,000
Capital A/cs: Less: Prov. for b/d 10,000 3,00,000
Mona 4,00,000 Bank 3,10,000
Sona 6,00,000 10,00,000 Stock 2,00,000

14,10,000 14,10,000
The firm was dissolved on 1st April, 2019 and the assets and liabilities were settled as follows:
(i) Half of the creditors accepted 50% of the stock. Remaining creditors were paid in full.
(ii) The remaining stock was realised at 90% and debtors realised 80% of their book value.
(iii) Sona took over the responsibility to realise the assets and discharge the liabilities at a
remuneration of ₹20,000 and was to bear all expenses of realisation. She paid realisation expenses of
₹18,000 out of her personal account.
(iv) Land and Building realised ₹7,00,000.
Prepare Realisation Account. [CBSE MAIN SET C 2020]
[Profit on Realisation Account: ₹23,000]

Question 10. Give the necessary journal entries for the following transactions in case of
dissolution of a partnership firm after various assets (other than cash and bank) and third
party liabilities have been transferred to Realisation Account:
(i) Dissolution expenses ₹5,000 were paid by the firm.
(ii) An unrecorded computer not appearing in the books of accounts realised ₹2,200.
(iii) A creditor for ₹1,40,000 accepted building valued at ₹1,80,000 and paid to the firm
₹40,000.
(iv) Loss on realisation ₹10,000 was divided between the partners Subhi and Sudha in the
ratio of 4 : 1. [CBSE COMPTT SET A 2020]

Question 11. Suman and Rajan were partners in a firm sharing profits and losses in the ratio
of 3 : 1. The firm was dissolved on 31st March, 2019. Pass the necessary Journal entries for
the following transactions after various assets (other than cash in hand and at bank) and third
party liabilities have been transferred to Realisation Account:
(i) Dissolution expenses ₹10,000 were paid by the firm.
(ii) Rajan had given a loan of ₹60,000 to the firm for which he accepted ₹58,000 in full
settlement.
(iii) The firm had a debit balance of ₹40,000 in the Profit and Loss Account on the date of
dissolution.
(iv) Profit on realisation was ₹12,000. [CBSE COMPTT SET B 2020]
CBSE XII

ACCOUNTANCY DISSOLUTION OF PARTNERSHIP FIRM

Question 12. Radha and Mudit were partners in a firm sharing profits and losses in the ratio
of 3 : 2. The firm was dissolved on 31st March, 2019. Pass the necessary Journal entries for
the following transactions after various assets (other than cash in hand and cash at bank) and
third party liabilities have been transferred to Realisation Account:
(i) A creditor of ₹70,000 accepted furniture valued at ₹1,50,000 and paid to the firm ₹80,000.
(ii) Bank loan of ₹90,000 was settled along with interest ₹9,000.
(iii) Realisation expenses amounting to ₹8,000 were paid by Mudit.
(iv) Loss on realisation was ₹20,000. [CBSE COMPTT SET C 2020]

Question 13. Pass the necessary journal entries for the following transactions in case of
dissolution of the partnership firm of X and Y after various assets (other than cash and bank)
and third party liabilities have been transferred to Realisation Account:
(i) Dissolution expenses were 4,000.
(ii) Machinery of the book value of 50,000 was sold in the market for 47,000 for which a
commission of 500 was paid to the broker.
(iii) A creditor for 70,000 accepted stock valued at 90,000 and paid to the firm 20,000.
(iv) Loss on realisation 40,000 was divided between the partners X and Y in the ratio of 5: 3.
[CBSE COMPTT SET A 2021]

Question 14. Chanda, Tara and Nisha were partners in a firm sharing profits and losses in
the ratio of 3: 2:1. They decided to dissolve the firm on 31 st March, 2021. Pass necessary
Journal Entries for the following transactions after all assets (other than cash and bank) and
third-party liabilities have been transferred to Realisation Account.
(i) A typewriter completely written off from the books was sold for ₹9,000.
(ii) Chanda took over stock worth ₹96,000 at ₹84,000.
(iii) Nisha was to get remuneration of ₹42,000 for completing the dissolution process.
(iv) Creditors of ₹23,500 took over all the investments at ₹10,000. Remaining amount was
paid to them in Cash.
(v) Sundry Creditors amounting to ₹40,000 were settled at a discount of 10%.
[CBSE 2022 MAIN TERM-2]

Question 15. B, C and D 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 B, C and D as at 31st March, 2022

Liabilities (₹) Assets (₹)
Creditors 1,20,000 Land and Building 11,00,000
Profit and Loss A/c 2,000 Debtors 2,00,000
Capital A/cs: Less: Prov. for b/d 5,000 1,95,000
B 13,00,000 Bank 17,000
C 2,00,000 17,00,000 Stock 4,50,000

D 2,00,000 Furniture 60,000

18,22,000 18,22,000
On the above date the firm was dissolved. The Assets were realised and the Liabilities were paid
off as follows:
(i) Debtors were sold to a debt collection agency at 10% less than the book value.
(ii) Stock ₹2,00,000 was taken over by B at ₹90,000 less than its book value and the
remaining stock realised ₹1,80,000.
(iii) Furniture was taken over by C for ₹65,000.
 CH- ISSUE OF SHARES
PREVIOUS YEAR BOARD QUESTION

1 Beeta Ltd. offered for subscription 1,00,000 equity shares of ₹ 10 each at a 1

premium of 100% payable entirely on application. Applications were received for
5,00,000 equity shares. The company decided to allot the shares on pro-rata basis to
all the applicants. The amount received by the company on application was :
(A) ₹ 1,00,00,000
(B) ₹ 20,00,000
(C) ₹ 1,20,00,000
(D) ₹ 80,00,000
( CBSE COMPT.PAPER 2024)

2 The amount of share capital which a company is authorised to issue by its 1

Memorandum of Association is called :
(A) Issued capital (C) Reserve capital
(B) Subscribed capital (D) Nominal capital
( CBSE COMPT.PAPER 2024)

3 Money not received from shareholders on allotment or calls is : 1

(A) debited to calls in advance account.
(B) credited to calls in advance account.
(C) debited to calls in arrears account.
(D) credited to calls in arrears account.
( CBSE COMPT.PAPER 2024)

4 Sinoy Ltd. issued 20,000 shares of ₹ 10 each at a premium of ₹ 6. The amount was 1
payable as follows :

On Application – ₹7 per share (including premium ₹ 1 per share)

On Allotment – ₹ 5 per share (including premium ₹ 2 per share)
On First and Final call – Balance

The issue was fully subscribed. All the money was duly received except the
allotment and first and final call on 1,000 shares. These shares were forfeited. On
forfeiture of these shares, the ‘Securities Premium Account’ will be debited by :

(A) ₹ 2,000
(B) ₹ 3,000
(C) ₹ 5,000
(D) ₹ 20,000
( CBSE COMPT.PAPER 2024)
5 Alfa Ltd. invited applications for 50,000 equity shares of ₹ 10 each at a premium of 1
30%. The whole amount was payable on application. Applications were received
for 2,50,000 shares. The company decided to allot the shares on a pro-rata basis to
all the applicants. The amount refunded by the company was :
(A) ₹32,50,000
(B) ₹ 39,00,000
(C) ₹15,60,000
(D) ₹ 26,00,000
( CBSE Q.P MAIN 2024)

6 Reserve capital is that part of _________ capital which cannot be called except at 1
the time of winding up of the company.
(A) Issued
(B) Called up
(C) Uncalled
(D) Nominal
( CBSE Q.P MAIN 2024)

7 An offer of securities or invitation to subscribe securities to a select group of 1

persons is termed as :
(A) Buy back of shares
(B) Employee stock option plan
(C) Private placement of shares
(D) Sweat Equity
( CBSE Q.P MAIN 2024)

8 Xeno Ltd. issued 25,000 equity shares of ₹ 10 each. The amount was payable as 1
follows :
On Application- ₹4 per share
On Allotment- ₹ 5 per share
On First and Final call- Balance

All the shares offered were applied for and allotted. All the money due on allotment
was received except on 1,500 shares. These shares were forfeited immediately after
allotment. First and final call was not yet made. At the time of forfeiture, Share
Capital Account will be debited by :
(A) ₹ 15,000
(B) ₹ 24,000
(C) ₹ 13,500
(D) ₹ 18,000
( CBSE Q.P MAIN 2024)
9 A share of ₹ 100 on which ₹ 80 is received is forfeited for non-payment of final call 1
of ₹ 20. The minimum price at which this share can be reissued is :
(A) ₹ 120
(B) ₹ 100
(C) ₹ 80
(D) ₹ 20
( CBSE Q.P MAIN 2024)

10 Shiv Ltd. forfeited 500 shares of ₹ 10 each on which ₹ 7 per share 1

was paid. These shares were reissued for ₹ 9 per share fully paid. Amount
transferred to Capital Reserve Account will be :
(A) ₹ 3000
(B) ₹ 5000
(C) ₹ 4500
(D) ₹ 3500
( CBSE Q.P MAIN 2024)

11 If 10,000 shares of ₹10 each were forfeited for non-payment of final call money of
₹3 per share and only 7,000 of these shares were re-issued @₹ 11 per share as fully
paid up, then what is the minimum amount that company must collect at the time of
re-issue of the remaining 3,000 shares?
a) ₹ 21,000
b) ₹ 9,000
c) ₹ 16,000
d) ₹ 30,000
(CBSE S.P 2024)

12 Assertion (A):A company is registered with an authorised capital of 5,00,000 1

equity shares of ₹ 10 each of which 2,00,000 Equity shares were issued and
subscribed. All the money had been called up except ₹2 per share which was
declared as ‘Reserve Capital’. The Share Capital reflected in balance sheet as
‘Subscribed and Fully paid up’ will be Zero.
Reason ( R ) :- Reserve Capital can be called up only at the time of winding up of
the company.
(a) Both Assertion (A) and Reason (R) are Correct and Reason (R) is the correct
explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are Correct, but Reason (R) is not the
correct explanation of Assertion (A)
(c) Assertion (A) is incorrect, but Reason (R) is Correct.
(d) Assertion (A) is correct, but Reason (R) is incorrect
(CBSE S.P 2024)
13 A company forfeited 3,000 shares of ₹10 each, on which only ₹5 per share 1
(including ₹1 premium) has been paid. Out of these few shares were re-issued at a
discount of ₹1 per share were and ₹6,000 were transferred to Capital Reserve. How
many shares were re-issued?
a) 3,000 shares
b) 1,000 shares
c) 2,000 shares
d) 1,500 shares
(CBSE S.P 2024)

14 A share of ₹ 10 each, issued at ₹ 4 premium out of which ₹ 7 (including ₹ 1 1

premium) was called up and paid up. The uncalled Capital will be ___________.
a) ₹ 7 per share
b) ₹ 4 per share
c) ₹ 8 per share
d) ₹ 3 per share
(CBSE S.P 2023)

15 Attire Ltd, issued a prospectus inviting applications for 12,000 shares of ₹10 each 1
payable ₹3 on application, ₹ 5 on allotment and balance on call. Public had applied
for certain number of shares and application money was received. Which of the
following application money, if received restricts the company to proceed with the
allotment of shares, as per SEBI guidelines?
a) ₹ 36,000
b) ₹ 45,000
c) ₹ 30,000
d) ₹ 32,400
(CBSE S.P 2023)

16 If 10,000 shares of ₹10 each were forfeited for non-payment of final call money of 1
₹ 3 per share and only 7,000 shares were re-issued @ ₹ 11 per share as fully paid
up, then what is the amount of maximum possible discount that company can allow
at the time of re-issue of the remaining 3,000 shares?
a) ₹ 28,000
b) ₹ 21,000
c) ₹ 9,000
d) ₹ 16,000
(CBSE S.P 2023)

17 As per Companies Act 2013, Securities Premium Balance can be utilised for which 1
of the following purpose?
a) Issuing bonus to existing shareholders to convert partly paid up into fully paid-
up bonus shares.
b) Providing for Premium payable on Redemption of Debentures.
c) Writing off all Capitalised Expenditures
d) Buy Back of Debentures
(CBSE S.P 2023)
18 Forfeiture of shares leads to reduction of _________________Capital. 1
A. Authorised
B. Issued
C. Subscribed
D. Called up
(CBSE S.P 2025)

19 Mohit had applied for 900 shares, and was allotted in the ratio 3 : 2. He had paid 1
application money of ₹ 3 per share and couldn’t 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

Share Capital A/c Dr. X

To Share Forfeited A/c Y
To Share Allotment A/c Z

Here X, Y and Z are:

A. ₹ 6,000; ₹ 2,700; ₹ 3,300
B. B. ₹ 4,800; ₹ 2,700; ₹ 2,100
C. C. ₹ 4,800; ₹ 1,800; ₹ 3,000
D. D. ₹ 6,000; ₹ 1,800; ₹ 4,200
(CBSE S.P 2025)

20 Shares issued as sweat equity can be 1

(I) Issued at par.
(II) Issued at discount.
(III) Issued at a premium.
Which of the following is correct?

A. Only (i) is correct.

B. Both (i) and (iii) are correct.
C. All are correct.
D. Only (ii) is correct.
(CBSE S.P 2025)

21 2,000 shares allotted to Ms. Regal, on which ₹ 80 each called up and ₹ 50 paid 1
were forfeited and reissued for ₹ 70 each as ₹ 90 paid up. Amount transferred to
capital reserve A/c is
A. ₹ 1,00,000
B. ₹ 60,000
C. ₹ 40,000
D. ₹ 20,000
(CBSE S.P 2025)
22 Raja Ltd. purchased machinery for ₹ 25,00,000 from Sharma Ltd. The payment to 1
Sharma Ltd. was made by issue of equity shares of
₹ 10 each at a premium of 25%. The amount to be credited to the “Securities
Premium Reserve Account”on issue of equity shares will be :
(a) ₹ 25,000
(b) ₹ 50,000
(c) ₹ 62,500
(d) ₹ 5,00,000
( CBSE COMPT.PAPER 2023)

23 BB Ltd. forfeited 4000 shares of ₹ 10 each for non-payment of final call of 1

₹ 5 per share. The forfeited amount was ₹ 20,000. The minimum amount per share
at which these shares can be re-issued will be :
(a) ₹6
(b) ₹7
(c) ₹5
(d) ₹4
( CBSE COMPT.PAPER 2023)

24 At the time of forfeiture of shares, share capital account is debited with : 1

(a) Uncalled amount on shares
(b) Paid up amount on shares
(c) Called up amount on shares
(d) Unpaid amount on shares
( CBSE Q.P MAIN 2023)

25 A Company forfeited 1000 shares of 10 each, 7 called up for non-payment of first 1

call of 2 per share. All these shares were reissued at 5 per share 7 paid up. The
amount transferred to Capital Reserve Account was:
(a) ₹2,000
(b) ₹ 3000
(c) ₹ 4000
(d) ₹ 5000
( CBSE Q.P MAIN 2023)

26 Net Assets minus capital reserve is : 1

(a) Purchase consideration
(b) Goodwill
(c) Total Assets
(d) Liquid Assets
( CBSE Q.P MAIN 2023)

27 When a company issues shares at a premium, the company can collect securities 1
premium along with the following:
(a) Application money
(b) Allotment money
(c) Call money
(d) Any of the above
( CBSE Q.P MAIN 2023)
28 On forfeiture of 100 shares of Rs. 50 each, Rs.2, 500 were credited to share 1
forfeiture account.These shares were reissued at Rs.25 per share fully paid up. The
amount credited to ‘Capital Reserve Account’ will be:
A. 2,500
B. 5,000
C. 3,000
D. No amount
( KVS PRE BOARD DEHRADUN REG. 2024)

29 The Authorised capital of Navratna Ltd is Rs 50,00,000 divided into 25,000 shares 3
of Rs200 each .Out of these ,the company issued 12,000 shares of Rs 200 each at a
premium of 10%.The amount per share was payable as follows:-
Rs 60 on application, Rs 60 on allotment (including premium),Rs 30 on first call
and balance on final call. Public applied for 11,000 shares .All the money was duly
received.
Prepare an extract of the Balance sheet of Navratna Ltd as per Schedule III Part I of
the Companies Act,2013 disclosing the Share capital. Also prepare ‘Notes to
Accounts’ for the same.
( KVS PRE BOARD DEHRADUN REG. 2024)

30 A company forfeited 8,000 shares of ₹ 10 each on which ₹ 8 were called (including 3

₹ 1 premium) and ₹ 6 was paid (including ₹ 1 premium). Out of these 5,000 shares
were reissued at maximum possible discount. Pass necessary journal entries.
(CBSE S.P 2025)

31 Lilly Ltd. forfeited 100 shares of ₹10 each issued at10% premium (₹8 called up ) 3
on which a shareholder did not pay ₹3 of allotment (including premium) and first
call of ₹2. Out of these 60 shares were reissued to Ram as fully paid for ₹8 per
share and 20 shares to Suraj as fully paid up @ ₹12 per share at different intervals
of time. Prepare Share Forfeiture account.
(CBSE S.P 2024)

32 A company forfeited certain number of shares of Face Value ₹ 10 each, for 4

nonpayment of final call money of ₹ 4. These shares were reissued at a discount of
₹ 5 and amount of ₹ 4500 was transferred to capital Reserve account.

Pass the necessary journal entries to show the above transactions and prepare Share
forfeited account.
(CBSE S.P 2025)
33 Shivalik Limited was registered with an authorized capital of ₹ 10,00,000 divided 4
into equity shares of ₹ 10 each.It offered 50,000 equity shares to the public. The
amount was payable as follows :
On Application– ₹ 2 per share
On Allotment– ₹ 6 per share
On First and Final call- Balance

The issue was fully subscribed. All the amounts were duly received except the
allotment and first and final call money on 4,000 equity shares. These equity shares
were forfeited.
Present the Share Capital in the Balance Sheet of the company as per Schedule III,
Part I of Companies Act, 2013. Also prepare ‘Notes to Accounts’ for the same.
( CBSE Q.P MAIN 2024)

34 Atishyokti Ltd. company was registered with an authorized capital of ₹ 20,00,000 4

divided into 2,00,000 Equity Shares of ₹ 10 each, payable ₹ 3 on application, ₹ 6 on
allotment (including ₹ 1 premium) and balance on call. The company offered
80,000 shares for public subscription. All the money has been duly called and
received except allotment and call money on 5,000 shares held by Manish and call
money on 4,000 shares held by Alok. Manish’s shares were forfeited and out of
these 3,000 shares were re-issued ₹ 9 per share as fully paid up.

Show share capital in the books of the company. Also prepare notes to accounts.
(CBSE S.P 2024)

35 Altaur Ltd. was registered with an authorised Capital of ₹ 4,00,00,000 divided in 4

25,00,000 Equity Shares of ₹ 10 each and 1,50,000, 9% Preference Shares of ₹ 100
each. The company issued 8,00,000 Equity Shares for public subscription at 20%
premium, payable ₹ 3 on application; ₹ 7 on allotment (including premium) and
balance on call. Public had applied for 10,00,000 shares. Excess Applications were
sent letters of regret. All the dues on allotment received except on 15,000 shares
held by Sanju. Another shareholder Rocky paid his call dues along with allotment
on his holding of 25,000 shares.
You are required to prepare the Balance Sheet of the company as per Schedule III
of Companies Act, 2013, showing Share Capital balance and also prepare Notes to
Accounts.
(CBSE S.P 2023)
36 MM Ltd. is registered with an authorised share capital of ₹10,00,00,000 was 4
divided into 1,00,00,000 equity shares of ₹ 10 each. The company invited
applications for issuing 10,00,000 equity shares. The amount per share was payable
as follows :
On Application - ₹ 3 per share
On Allotment - ₹ 4 per share
On First and Final Call - ₹ 3 per share
The issue was fully subscribed. All calls were made and were duly received except
the first and final call on 1000 shares.
Present the share capital in the Balance Sheet of the company as per the provisions
of Schedule III Part I of the Companies Act, 2013 and also prepare Notes to
Accounts.
( CBSE COMPT.PAPER 2023)

37 Shringar Ltd. was registered with an authorised capital of ₹ 5,00,000 divided into 4
equity shares of ₹ 10 each. The company issued a prospectus inviting applications
for 20,000 equity shares. The amount was payable as follows :
On Application – ₹ 3 per share
On Allotment – ₹ 5 per share
On First and Final call – Balance

Applications were received for 19,000 equity shares and allotment was made to all
the applicants. All the amounts were duly received except the first and final call on
5,000 shares.
Present the share capital in the Company’s Balance Sheet as per Schedule III,
Part I of Companies Act, 2013. Also prepare ‘Notes to Accounts’ for the same.
( CBSE COMPT.PAPER 2024)

38 Saraswati Ltd. has an authorised capital of 10,00,000 divided into equity shares of 4
10 each. Subscribed and fully paid up share capital of the company was 4,00,000.
To meet its new financial requirements, the company issued 20,000 equity shares of
₹ 10 each which were payable as follows: 3 on application; 3 on allotment, 2 on
first call and 2 on second and final call. The issue was fully subscribed. The
allotment money was payable on 1st May 2021, first call money on 1st August
2021 and final call on 1st October 2021. X whom 1000 shares were allotted, did not
pay the allotment and call money; Y an allotee of 600 shares, did not pay the two
calls; and Z whom 400 shares were allotted, did not pay the final call.

Present the share capital 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.
( CBSE Q.P MAIN 2023)
39 Diamond Ltd. issued a prospectus inviting applications for 20,000 shares of ₹ 10 6
each. The amount was payable as follows :
On Application- ₹ 4 per share
On Allotment- ₹ 4 per share
On First and Final call- Balance

Applications for 45,000 shares were received and allotment was made as follows :
Category(i) – Applicants for 35000 shares were allotted 15,000 shares
Category (ii) – Applicants for 10,000 shares were allotted 5,000 shares.
It was decided that excess money received on application be adjusted towards sum
due on allotment and calls.
Amar, an applicant of Category (ii), who was allotted 500 shares, failed to pay the
first and final call. His shares were forfeited and subsequently reissued at ₹ 2 per
share as fully paid up.
Pass necessary journal entries to record the above transactions in the books
of Diamond Ltd.
( CBSE COMPT.PAPER 2024)

40 Pearl Ltd. issued a prospectus inviting applications for 40,000 shares of ₹ 10 each 6
at a premium of 20%. The amount was payable as follows :

On Application- ₹ 5 per share

On Allotment- ₹ 5 per share( including premium)
On First and Final call- Balance

Applications for 60,000 shares were received and allotment was made on a pro-rata
basis to all the applicants. Excess money received on application was adjusted
towards the amount due on allotment.
Sameer who had applied for 1,200 shares failed to pay the allotment money. His
shares were forfeited immediately after allotment. All the forfeited shares were
reissued at ₹ 7 per share as ₹ 8 paid up. First and final call was not yet made.
Pass necessary journal entries to record the above transactions in the book
of Pearl Ltd. Open ‘Calls in Arrears Account’ wherever necessary.
( CBSE COMPT.PAPER 2024)
41 Qumtan Ltd. invited applications for issuing 1,00,000 equity shares of ₹ 10 each at 6
a premium of ₹ 6 per share. The amount
was payable as follows :
On Application and Allotment ₹ 8 per share
(including premium ₹ 3)
On First and Final call Balance (including premium)

Applications for 1,60,000 shares were received. Applications for 10,000 shares
were rejected and pro-rata allotment was made to the remaining applicants. Excess
money received on application and allotment was returned. Dheeraj, who was
allotted 200 shares, failed to pay the first and final call money. His shares were
forfeited. All the forfeited shares were reissued at ₹ 5 per share fully paid up.
Pass necessary journal entries in the books of Qumtan Ltd.
( CBSE Q.P MAIN 2024)

42 Printkit Limited invited applications for issue of 80,000 equity shares of ₹ 10 each. 6
The amount was payable as follows :

On Application- ₹ 3 per share

On Allotment- ₹ 2 per share
On First and Final call- Balance

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 :
Category A Applicants for 80,000 shares were allotted 40,000 shares.
Category B Applicants for 60,000 shares were allotted 40,000 shares.
Excess money received on application was adjusted towards amount due on
allotment and first and final call. All the amounts due on allotment and first and
final call were duly received.
Pass necessary journal entries in the books of Printkit Limited.
( CBSE Q.P MAIN 2024)

43 The Directors of Rockstar Ltd. invited applications for 2,00,000 Shares of ₹ 10 6

each, issued at 20% premium. Share was payable as ₹ 5 on application, ₹ 4
(including premium) on allotment and balance on call. Public had applied for
3,20,000 shares out of which applications for 20,000 shares were rejected and
remaining were alloted on pro-rata basis. Simba, an applicant of 15,000 shares
failed to pay allotment and call money. His shares were forfeited and out of these
6,000 shares were reissued at a discount of ₹2 per share. Journalise.
(CBSE S.P 2024)
44 Shaktimaan Ltd. invited applications for issuing 1,00,000 Shares of ₹ 10 each at a 6
premium of ₹2 per share. The amount was payable as₹ 4 on application (including
premium); ₹ 5 on Allotment and balance on call. Applications were received
shares for 1,80,000 of which Applications for 30,000 shares were rejected and
remaining applicants were allotted on pro-rata basis. Manthan, holding 5,000
shares failed to pay call money and his shares were forfeited. Out of these 2,000
shares were re-issued at premium of ₹ 3 per share.
Prepare Cash Book and pass necessary entries.
(CBSE S.P 2024)

45 OTUA Ltd. was registered with an authorised capital of 2,00,000 equity shares of ₹ 6
100 each. The company offered 60,000 shares for public subscription at 25%
premium. The share was payable as ₹ 40 on application and balance on allotment,
with premium. Public had applied for 85,000 shares. Pro-rata allotment was made
in the ratio of 5:4 and remaining applications were sent letters of regret.

Mr. Anand holding 4,000 shares failed to pay allotment money and his shares were
forfeited. Out of these 3,000 shares were re-issued at a discount of ₹ 20 per share.
Pass necessary entries in the books of the OTUA Ltd.
(CBSE S.P 2023)

46 Pass entries for forfeiture and re-issue in both the following cases. 6

(a) Vikram Ltd. forfeited 5,000 shares of Rahul, who had applied for 6,000 shares
for non-payment of allotment money of ₹ 5 per share and first and final call of
₹ 2 per share. Only application money of ₹ 3 was paid by him. Out of these
3,000 shares were re-issued @ ₹ 12 per share as fully paid.

(b) Ratan Ltd. forfeited 3,000 shares of ₹ 10 each (issued at ₹ 2 premium) for non-
payment of first call of ₹ 2 per share. Final call of ₹ 3 per share was not yet
made. Out of these 2,000 shares were re-issued at ₹ 10 per share as fully paid.
(CBSE S.P 2023)
47 CCL Ltd. invited applications for issuing 75,000 equity shares of ₹ 10 each at a 6
premium of ₹ 3 per share.
The amount was payable as follows :
On Application - ₹ 2 per share
On Allotment - ₹ 6 per share ( including premium)
On First Call - ₹ 3 per share
On Second and Final Call- Balance

Applications for 1,20,000 shares were received. Application for 45,000 shares were
rejected and the excess application money was refunded. Full allotment was made
to remaining applicants. All moneys due were received except for Harish, a
shareholder holding 2000 shares, who failed to pay the first and second and final
call money.
Pass necessary journal entries for the above transactions in the books of the
company.
( CBSE COMPT.PAPER 2023)

48 Pass necessary journal entries for the forfeiture and reissue of shares in the 6
following cases :
(i) CC Ltd. forfeited 10,000 shares of ₹ 10 each, ₹ 8 called up, for non-payment of
allotment money of ₹ 3 per share and first call of ₹ 3 per share. Out of these, 2000
shares were reissued for ₹ 7 per share, ₹ 8 paid up.
(ii) GG Ltd. forfeited 2000 shares of ₹ 10 each fully called up, issued at a premium
of 10% on which only application money of ₹ 3 per share was received. Out of
these, 500 shares were re-issued at ₹ 11 per share, fully paid up.
( CBSE COMPT.PAPER 2023)
49 K.N. Ltd. invited applications for issuing 6,00,000 equity shares of ₹10 each at a 6
premium of ₹3 per share. The amount was payable as follows:
On Application and Allotment - ₹3 per share;
On First Call -₹4 per share;
On Second and Final Call — Balance (including premium).

The issue was oversubscribed by 1,50,000 shares. Applications for 50,000 shares
were rejected and the application money was refunded. Shares were allotted to the
remaining applicants as follows:
Category I: Those who had applied for 4,00,000 shares were allotted 3,00,000
shares on pro- rata basis.
Category II: The remaining applicants were allotted the remaining shares.

Excess application money received with applications was adjusted towards sums
due on first call. Rakesh to whom 6,000 shares were allotted (out of Category I)
failed to pay the first call money. His shares were forfeited. The forfeited shares
were re-issued at ₹13 per share fully paid up after the second call.
Pass necessary journal entries for the above transactions in the books of K.N. Ltd.
(CBSE S.P 2025)
50 6
Balance Sheet (Extract) Of XYZEE ltd
as at 31.03.2024 (as per schedule -III of Companies Act 2013)

Note No. 31.03.2023 31.03.2024

I.Equity and Liabilities

1. Shareholder’s Fund

a) Share Capital 1 44,90,000 54,90,000

b) Reserve and Surplus 2 2,00,000 3,60,000

Note no.1 (For year ending 31.03.2023)

Share Capital

1). Authorised Share Capital

8,00,000 Equity Shares of Rs. 10 each 80,00,000

2).Issued Share Capital

4,50,000 Equity Shares of Rs. 10 each 45,00,000

3). Subscribed Share Capital

a). Subscribed and Fully paid

Rs.10 per share on 4,45,000 Equity Shares 44,50,000

b). Subscribed and not Fully paid

Rs. 10 per share on 5,000 Equity shares 50,000
Less not paid:
Rs. 2 per share on 5,000 Equity shares. -10,000 44,90,000

Note no.1 (For year ending 31.03.2024)

Share Capital

1). Authorised Share Capital

8,00,000 Equity Shares of Rs. 10 each 80,00,000

2).Issued Share Capital

5,50,000 Equity Shares of Rs. 10 each
(Out of these 40,000 shares were issued to the vendors as
 consideration for Capital asset purchased) 55,00,000

3). Subscribed Share Capital

a). Subscribed and Fully paid

Rs.10 per share on 5,45,000 Equity Shares 54,50,000

b). Subscribed and not Fully paid

Rs. 10 per share on 5,000 Equity shares 50,000
Less not paid:
Rs. 2 per share on 5,000 Equity shares. -10,000 54,90,000

Note No. 2 -Reserve and Surplus

31.03.2023 31.03.2024

1.Capital Reserve Nil 40,000

2.Securities Premium 2,00,000 3,20,000

During the year the company took over the business of Quipa Ltd. with Assets of
Rs. 12,00,000/- and Liabilities of Rs.7,30,000. Purchase consideration was paid in
cash and by issue of equity shares at par. The entire transaction resulted in Capital
reserve of Rs.40,000.

Q1. What is the total face value of Shares issued by the Company during the year
2023-24.
A). Rs.10,00,000
B). Rs. 6,00,000
C). Rs. 9,50,000
D). Rs. 11,20,000

Q2. Shares issued for cash during the year were issued at _______. (assuming they
were issued together)?
A). Rs.10
B). Rs.8
C). Rs.12
D). Rs.11.20

Q3. On April 1, 2024, the company forfeited all the defaulting shares. What amount
will appear in the Share Forfeiture account at the time of forfeiture?
A). Rs.40,000
B). Rs. 50,000
C). Rs.10,000
D). Rs. 60,000

Q4. What will be the number of Issued shares, as on April 1,2024, after the
forfeiture of these shares?
A). 5,45,000 shares
B). 5,50,000 shares.
C). 4,45,000 shares.
D). 5,05,000 shares.

Q5. If 2,000 of the forfeited shares were issued at Rs. 14 per share, what will be the
amount of securities premium and Capital reserve respectively as on April 1, 2024?
A). Rs, 3,20,000, Rs.40,000
B). Rs.3,28,000, Rs.56,000
C). Rs.3,28,000, Rs.80,000
D). Rs.3,20,000, Rs.80,000

Q6. What will be the amount in the "Subscribed and Fully paid" after the reissue of
these 2000 shares?
A). Rs.54,50,000
B). Rs.55,00,000
C). Rs.54,70,000
D). Rs.54,80,000

(CBSE S.P 2025)

 51 Ganga Ltd. invited applications for issuing 10,000 equity shares of 10 each. The 6
amount per share was payable as follows: 2 on application, 3 on allotment, 3 on
first call and 2 on second and final call. Applications were received for 15,000
shares. The applications for 3,000 shares were rejected and application money
refunded. The shares were allotted on pro-rata basis to the applicants of 12,000
shares. Excess money received with applications was adjusted towards sums due on
allotment. All shareholders paid the allotment money except one shareholder who
was allotted 200 shares. These shares were forfeited. The first call was made
thereafter and duly received. The second and final call was not yet made.

Pass Journal entries for the above transactions in the books of Ganga Ltd. Open
Calls-in-Arrears Account wherever required.
( CBSE Q.P MAIN 2023)

52 Mukund Ltd. invited applications for issuing 50,000 equity shares of ₹ 10 each at 6
10% premium. The amount per share was payable as follows: 3 on application, 3
(including premium) on allotment and balance amount on first and final call.
Applications were received for 1,20,000 shares and shares were allotted on pro-rata
basis to all the applicants. The excess money received on application was adjusted
towards sums due on allotment only. Application money in excess to sums due on
allotment was refunded. A shareholder who had applied for 6,000 shares, could not
pay the call money and his shares were forfeited.
Pass necessary Journal entries for the above transactions in the books of Mukund
Ltd.
( CBSE Q.P MAIN 2023)

I
 ACCOUNTING FOR DEBENTURES
CBSE SAMPLE PAPERS 2022,2023 &2024
CBSE COMPARTMENT PAPER 2023 &2024

1 While issuing ___________ type of Debentures, company doesn’t give any undertaking 1
for the repayment of money borrowed by issuing such debentures.
(CBSE 2022-23,SP)
a) Zero Coupon Rate Debentures b) Non-Convertible Debentures c) Secured
Debentures d) Non-Redeemable Debentures
2 Savitri Ltd. issued 50,000, 8% Debentures of ₹ 100 each at certain rate of premium and 1
to be redeemed at 10% 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 were issued?
a) 10% b) 16% c) 6% d) 4%
Or (CBSE-2022-23,SP)
Durga Ltd. issued 80,000, 10% Debentures of ₹ 100 each at certain rate of discount and
were to be redeemed at 20% premium. Existing balance of Securities Premium before
issuing of these debentures was ₹ 25,00,000 and after writing off Loss on Issue of
Debentures, the balance in Securities Premium was ₹ 5,00,000. At what rate of
discount, these debentures were issued? (CBSE 2024-25, SP)
a) 10% b) 5% c) 25% d) 15%
3 Moon ltd. issued 40,000, 10% debentures of ₹100 each at certain rate of discount and 1
were to be redeemed at20% premium. Exiting balance of Securities premium before
issuing of these debentures was ₹12,00,000 and after writing off loss on issue of
debentures, the balance in Securities Premium was ₹2,00,000. At what rate of discount
these debentures were issued? (CBSE-2024-25,SP)
A.) 10% B.) 5% C.) 25% D.) 15%
4 On 1st April 2019 a company took a loan of ₹80,00,000 on security of land and building. 1
This loan was further secured by issue of 40,000, 12% Debentures of ₹100 each as
collateral security. On 31st March 2024 the company defaulted on repayment of the
principal amount of this loan consequently on 1st April 2024 the land and building were
taken over and sold by the bank for ₹70,00,000. For the balance amount debentures
were sold in the market on 1st May 2024. From which date would the interest on
debentures become payable by the company? (CBSE-2024-25 SP)
A.) 1st April 2019. B.)31st March 2024. C.) 1st April
2024. D.) 1st May 2024.
5 Those debentures where a charge is created on the assets of the company for the 1
purpose of payment in case of default are known as : (CBSE COMP 2024)
(A) Secured Debentures (B) Registered Debentures
(C) Specific Coupon Rate Debentures (D) Redeemable Debentures
6 Nagar Ltd. issued 6,000, 11% Debentures of ₹ 100 each at a discount of 10% 1
redeemable at a premium. ‘Discount on issue of debentures’ and ‘Premium on
redemption of debentures’ were accounted for through ‘Loss on issue of debentures
account’. If the amount of ‘Loss on issue of debentures’ was ₹90,000, then the amount
of premium on redemption of debentures was : (CBSE COMP. 2024)
(A) ₹ 60,000 (B) ₹ 90,000 (C) ₹ 1,20,000 (D) ₹ 30,000
7 On 1st April, 2022 Surya Ltd. issued 10,000, 12% Debentures of ₹ 100 each at a 1
premium of 5%. The total amount of interest on debentures for the year ended 31st
March, 2023 will be : (CBSE COMP. 2024)
(A) ₹ 1,20,000 (B) ₹ 50,000 (C) ₹ 1,00,000 (D) ₹ 1,26,000
8 K.C. Ltd. took over office furniture of ₹90,000, office equipment of ₹1,80,000 from J.C. 1
Ltd. and its liabilities of ₹20,000 for a purchase consideration of ₹3,60,000. The
 ACCOUNTING FOR DEBENTURES
CBSE SAMPLE PAPERS 2022,2023 &2024
CBSE COMPARTMENT PAPER 2023 &2024
payment to J.C. Ltd. was made by issue of 9% debentures of ₹50 each at a discount of
10%.The amount to be debited to discount on issue of debenture account: (CBSE2023)
(a) ₹36,000 (b) ₹40,000 (c) ₹27,000 (d) ₹ 90,000
9 Assertion (A) : Interest on bearer debentures is paid to a person who produces the 1
interest coupon attached to such debentures. Reason (R) : Bearer debentures are
debentures which can be transferred by way of delivery and the company does not
keep any record of the debenture holders. 1 Select the correct answer from the
following : (CBSE 2023)
(a) Assertion (A) is correct, but Reason (R) is wrong.
(b) Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct
explanation of Assertion (A).
(c) Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct
explanation of Assertion (A).
(d) Both Assertion (A) and Reason (R) are wrong.
10 Read the following hypothetical situation and answer questions number 1 and 2 on the 1
basis of given information. On 1st April, 2022, Zaira Ltd. issued 5000, 8% Debentures of
₹100 each at 5% premium, redeemable at a premium of 10% after 3 years. (CBSE
2023COMP)
1. The total interest due on debentures for the year ending 31st March, 2023 will be :
(a) ₹40,000 (b)₹ 25,000 (c) ₹50,000 (d)₹75,000
2. which of the following amount ?
(a)₹75,000 (b) ₹40,000 (c)₹50,000 (d)₹ 25,000
11. Vedesh Ltd. purchased a running business of Vibhu Enterprises for a sum of ₹ 3
12,00,000. Vedesh Ltd. paid ₹ 60,000 by drawing a promissory note in favour of Vibhu
Enterprises., ₹1,90,000 through bank draft and balance by issue of 8% debentures of ₹
100 each at a discount of 5%. The assets and liabilities of Vibhu Enterprises consisted of
Fixed Assets valued at ₹ 17,30,000 and Trade Payables at ₹ 3,20,000. You are required
to pass necessary journal entries in the books of Vedesh Ltd.
OR (CBSE TERM-II -2022)
Youth Ltd. took a loan of ₹ 15,00,000 from State Bank of India against the security of
tangible assets. In addition to principal security, it issued 10,000 11% debentures of ₹
100 each as collateral security. Pass necessary journal entries for the above
transactions, if the company decided to record the issue of 11% debentures as
collateral security and show the presentation in the Balance Sheet of Youth Ltd.
12 Anthony Ltd. issued 20,000, 9% Debentures of ₹ 100 each at 10% discount to Mithoo 3
Ltd. from whom Assets of ₹ 23,50,000 and Liabilities of ₹ 6,00,000 were taken over.
Pass entries in the books of Anthony Ltd. if these debentures were to be redeemed at
5% premium.
Or (CBSE-2022-23)
Random Ltd. took over running business of Mature Ltd. comprising of Assets of ₹
45,00,000 and Liabilities of ₹ 6,40,000 for a purchase consideration of ₹ 36,00,000. The
amount was settled by bank draft of ₹ 1,50,000 and balance by issuing 12% preference
shares of ₹ 100 each at 15% premium. Pass entries in the books of Random Ltd.
13 Buddha Limited took over assets of ₹ 40,00,000 and liabilities of ₹ 6,50,000 of Ginny 3
Limited. Buddha Limited issued 30,000, 8% Debentures of ₹ 100 each at 10% discount,
to be redeemed at 5% premium along with cheque of ₹ 5,00,000. Pass necessary
journal entries in the books of Buddha Ltd.
Or (CBSE-2024-25)
A company forfeited 8,000 shares of ₹ 10 each on which ₹ 8 were called (including ₹ 1
premium) and ₹ 6 was paid (including ₹ 1 premium). Out of these 5,000 shares were
reissued at maximum possible discount. Pass necessary journal entries.
 ACCOUNTING FOR DEBENTURES
CBSE SAMPLE PAPERS 2022,2023 &2024
CBSE COMPARTMENT PAPER 2023 &2024
14 (a) Sheetal Ltd. purchased building worth ₹ 2,0,000, plant and machinery worth ₹ 3
2,00,000, furniture worth ₹ 40,000 and took over liabilities of ₹ 30,000 from
Poonam Ltd. for a purchase consideration of ₹ 4,40,000. The purchase
consideration was paid by issuing 12% Debentures of ₹ 100 each at a premium
of 10%. Pass the necessary journal entries in books of Sheetal Ltd. to record the
above transactions.
OR (CBSE COMP.2024)
(b) On 1st April, 2023, Simple Ltd. took over assets of ₹ ,00,000 and liabilities of ₹
1,00,000 from Temur Ltd. at an agreed value of ₹ 16,00,000. Simple Ltd. paid the
amount to Temur Ltd. as follows :
(i) Issued a bank draft of ₹ 1,00,000.
(ii) Issued 8% Debentures of ₹ 100 each at a premium of 50% in satisfaction of the
balance amount of purchase consideration. Pass the necessary journal entries in the
books of Simple Ltd. to record the above transactions.
15. Yogadatra Ltd. (pharmaceutical company) appointed marketing expert, Mr. Kartikay as 6
the CEO of the company, with a target to penetrate their roots in the rural regions. Mr.
kartikay 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.
Yogadatra Ltd. 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 April1,2020, 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)Calculate the number of debentures to be issued to raise additional funds.
(ii) Pass Journal entry for the allotment of debentures.
(iii)Pass Journal entry to write off loss on issue of debentures.
(iv)Calculate the amount of annual fixed obligation associated with debentures.
(v) Prepare Loss on Issue of Debentures Account. (CBSE 2023-24,SP)
16 Health2Wealth Ltd. had share capital of ₹ 80,00,000 divided in shares of ₹ 100 each and 6
20,000, 8% Debentures of ₹ 100 each as part of capital employed. The company need
additional funds of ₹ 55,00,000 for which they decided to issue debentures in such a
way that they got required funds after issuing debentures of the same class as earlier,
at 10% premium. These debentures were to be redeemed at 20% premium after 4
years. These debentures were issued on 01 October, 2021. You are required to
(a) Pass entries for issue of Debentures.
(b) Prepare Loss on Issue of Debentures Account assuming there was existing balance
of Securities Premium Account of ₹ 2,80,000.
(c) Pass entries for Interest on debentures on March 31, 2022 assuming interest is
payable on 30 September and 31 March every year. (CBSE 2023-24,SP)
17 a) Pass the necessary journal entries for 'Issue of Debenture' for the following: 6
i. Arman Ltd. issued 750, 12% Debentures of ₹100 each at a discount of 10%
redeemable at a premium of 5%.
ii. Sohan Ltd. issued 800, 9% Debentures of ₹100 each at a premium of 20 per
debenture redeemable at a premium of ₹10 per Debenture.
b) X Ltd. obtained a loan of ₹4,00,000 from IDBI Bank. The company issued 5,000 9%.
Debentures of ₹100 each as a collateral security for the same. Show how these items
will be presented in the Balance Sheet of the company. (CBSE 2023-24)
 ACCOUNTING FOR DEBENTURES
CBSE SAMPLE PAPERS 2022,2023 &2024
CBSE COMPARTMENT PAPER 2023 &2024
18 On 1st April, 2022, Ardhaan Ltd. issued 10,000, 9% Debentures of ₹ 100 each at a 6
discount of 5%, redeemable at a premium of 10% after five years. The company had a
balance of ₹ 80,000 in Securities Premium Account. (CBSE COMP. 2024)
(a) Pass necessary journal entries for issue of debentures and for writing off ‘Loss on
Issue of Debentures’ utilising Securities Premium Account at the end of first year itself.
(b) Prepare ‘Loss on Issue of Debentures Account’ for the year ended 31st March, 2023.
 ANALYSIS OF FINANCIAL STATEMENTS
1 ‘Freedom to choose of methods of depreciation’ refers to which limitation of financial 1
statements analysis-
(a) Historical analysis
(b) Qualitative aspect ignored
(c) Not free from bias
(d) Ignore Price Level changes

CBSE 2023/ DELHI

2 Which of the following are not the tools of Financial Analysis? 1
(i) Cash Flow Statement (ii) Income Statement
(iii) Balance Sheet (iv) Ratio Analysis
(a) (i) & (ii)
(b) (ii) & (iv)
(c) (ii) & (iii)
(d) (iii) & (iv)

CBSE 2023/ COMPTT

3 Financial statements are prepared on certain basic assumptions (pre-requisites) known 1
as _____.
(a) Provision of Companies Act 2013
(b) Accounting standards
(c) Postulates
(d) Basis of accounting
Which of the following is a tool of Financial Analysis?
(i) Cash Flow Statement (ii) Statement of P/L
(iii) Notes to Accounts (iv) Balance Sheet

CBSE 2023/ OUTSIDE DELHI

4 Which of the following is not a limitation of analysis of financial statements 1
(a) It is just a study of the reports of the company
(b) It does not consider price level changes
(c) It ascertains the relative importance of different components of the financial
position of the firm.
(d) It may be misleading without the knowledge of the changes in accounting
procedures followed by the firm.
5 Which of the following is a tool of Financial Analysis? 1
(i) Statement of P/L (ii) Balance Sheet
(iii) Ratio Analysis (iv) Notes to Accounts

CBSE 2023/ DELHI

6 When an analyst analysis the financial statements of an enterprises over a number of 1
years. The analysis is called _______________ analysis.
(a) Static
(b) External
(c) Horizontal
(d) Vertical
7 Classify the following items under major heads & sub-heads (if any) in the Balance Sheet 3
of a company as per Schedule III, Part-I of the Companies Act 2013:
(a) Licenses and Franchise
(b) Loans Repayable on Demand
(c) Accrued Income
CBSE 2023/ COMPTT
8 Classify the following items under major heads & sub-heads (if any) in the Balance Sheet
of a company as per Schedule III, Part-I of the Companies Act 2013:
(a) Goodwill
(b) Debenture Redemption Reserve
(c) Licenses & Franchise
CBSE 2023/ OUTSIDE DELHI
8 Under which major heads & sub heads will the following items be placed in the Balance 3
Sheet of a company as per Schedule III, Part-I of the Companies Act 2013:
(a) Computer software
(b) Unclaimed dividend
(c) Loose Tools
CBSE 2023/ DELHI
9 Under which major heads & sub heads will the following items be placed in the Balance 3
Sheet of a company as per Schedule III, Part-I of the Companies Act 2013:
(a) Patents
(b) Capital reserve
(c) Prepaid rent
CBSE 2024/ COMPTT
10 Find the heads & sub-heads under which the following items will appear in the balance 3
sheet of a company, as per Schedule –iii, Part-I of Companies Act 2013-
(a) Furniture & Fixtures
(b) Advance paid to contractor for building under construction
(c) Accrues incomes
(d) Loans repayable on demand to bank
(e) Employees earned leaves payable on retirement
(f) Employees earned leaves encashable
CBSE 2024/ DELHI
11 Under which major heads & sub heads will the following items be placed in the Balance 3
Sheet of a company as per Schedule III, Part-I of the Companies Act 2013:
(a) Stores & Spares
(b) Calls in advance
(c) Income received in advance
CBSE 2024/ OUTSIDE DELHI
12 Under which major heads & sub heads will the following items be placed in the Balance 3
Sheet of a company as per Schedule III, Part-I of the Companies Act 2013:
(a) Prepaid Rent
(b) Mortgage Loan
(c) Computer software

13 Under which major heads & sub heads will the following items be placed in the Balance 3
Sheet of a company as per Schedule III, Part-I of the Companies Act 2013:
(a) Cheques – Drafts on hand
(b) Work in Progress
(c) Balance in Statement of P/L
 15 Classify the following items under major heads & sub-heads (if any) in the balance sheet 3
of a company as per Schedule III of Companies Act 2013-
(a) Loose tools
(b) Prov for retirement benefits
(c) Capital advances
(d) Loan repayable on demand
(e) Prepaid insurance
(f) Shares in listed companies

16 Classify the following items under major heads & sub-heads (if any) in the balance sheet 3
of a company as per Schedule III of Companies Act 2013-
(a) Current maturities of long term debts
(b) Furnitures & Fixtures
(c) Prov for Warranties
(d) Advance incomes received
(e) Capital advances
(f) Advances recoverable in cash within operation cycle

17 Classify the following items under major heads & sub-heads (if any) in the Balance Sheet 3
of a company as per Schedule III, Part-I of the Companies Act 2013:
(a) Bank balance
(b) Public deposits
(c) Bank overdraft

18 Classify the following items under major heads & sub-heads (if any) in the Balance Sheet 3
of a company as per Schedule III, Part-I of the Companies Act 2013:
(a) Copyrights
(b) Interest accrued on investments
(c) Long term investments in shares

19 Classify the following items under major heads & sub-heads (if any) in the Balance Sheet 3
of a company as per Schedule III, Part-I of the Companies Act 2013:
(a) Calls in advance
(b) Creditors
(c) Securities Premium Reserve

COMPARATIVE & COMMON SIZE

STATEMENTS
1 Complete the Comparative Statement of P/L 3
Particulars 2022-23 2023-24 Absolute change % change
Revenue from Operations 16,00,000 20,00,000 ? ?
(-) Employees Benefits Exps 8,00,000 ? ? 25%
(-) Other exps 2,00,000 ? (1,00,000) ?
Profit before Tax 6,00,000 ? ? 50%
(-) Tax (@30%) ? ? 90,000 ?
Profit before Tax 4,20,000 ? 2,10,000 ?
CBSE 2025/ SAMPLE PAPER
2 4

CBSE 2023/ OUTSIDE DELHI

3 From the following information, prepare Common Size Statement of P/L for the year 4
ended 31-03-23:
Particulars 31-03-23 31-03-22
Revenue from Operations 40,00,000 20,00,000
Purchase of stock in trade 24,00,000 12,00,000
Change in inventories (% of purchase of stock in trade) 25% 20%
Other Expenses 2,00,000 1,60,000
Rate of Tax 40% 40%
CBSE 2023/ OUTSIDE DELHI

4 4

CBSE 2023/ DELHI

5 4

CBSE 2023/ DELHI

6 From the following information, prepare Common Size Statement of P/L of A Ltd & B Ltd for 4
the year ended:
Particulars A Ltd B Ltd
Revenue from Operations 20,00,000 10,00,000
Other Incomes 3,00,000 80,000
Expenses 10,40,000 4,80,000
Rate of Tax 40% 40%
CBSE 2023/ COMPTT
7 From the following Statement of P/L of Shikha Ltd, prepare Comparative Statement of P/L 4
for the year ended 31-03-2023:
Statement of P/L (for the year ended 31-03-2023)
Particulars 2022-23 2023-24
Revenue from Operations 32,00,000 20,00,000
Expenses: Employee benefits exps 9,60,000 6,00,000
Other exps 6,40,000 4,00,000
Rate of Tax 50% 50%
CBSE 2024/ COMPTT
8 From the information extracted from the Statement of P/L of Zee Ltd for the year ended 4
31-03-22 and 31-03-23, prepare a Common Size Statement of P/L-
Particulars 2022-23 2023-24
Revenue from Operations 8,00,000 10,00,000
Gross Profit 60% 70%
Other exps 2,20,000 2,60,000
Rate of Tax 50% 50%
CBSE 2024/ SAMPLE PAPER
9 From the following information, prepare Comparative Statement of P/L- 4
Particulars 2022-23 2023-24
Revenue from Operations 10,00,000 8,00,000
Other Incomes 2,20,000 1,50,000
Cost of material consumed 4,00,000 3,00,000
Change in inventories of finished goods & WIP 2,00,000 1,00,000
Other exps (% of cost of revenue from operations) 15% 10%
Tax rate 30% 30%
CBSE 2024/ SAMPLE PAPER
10 From the given balance sheet of moonlight ltd, prepare a common size balance sheet: 4
Balance Sheet of Moonlight Ltd (as at 31-03-2023):
Particulars 31-03-2023 31-03-2024
I- EQUITY & LIABILITIES
1. Shareholders’ Funds-
(a) Share Capital 12,00,000 5,00,000
2. Non-Current Liabilities-
(a) Long Term Borrowings 2,00,000 3,00,000
3. Current Liabilities-
(a) Trade Payables 6,00,000 2,00,000
TOTAL 20,00,000 10,00,000
II- ASSETS
1. Non-Current Assets-
(a) Fixed Assets/ Property, Plant & Equipments & Intangible 14,00,000 7,00,000
Assets
2. Current Assets-
(a) Trade Receivables 4,00,000 2,50,000
(b) Inventories 2,00,000 50,000
TOTAL 20,00,000 10,00,000
CBSE 2024 / COMPTT
11 From the following particulars of Accent Ltd, prepare Comparative Statement of P/L for the 4
year ended 31-03-2023:
Particulars 2022-23 2021-22
Revenue from Operations 25,00,000 20,00,000
Employee benefits exps 5,00,000 4,00,000
Other exps 2,50,000 2,00,000
Rate of Tax 50% 50%
CBSE 2024 / COMPTT
 CHAPTER-RATIO ANALYSIS
PREVIOUS YEAR CBSE BOARD/SAMPLE PAPER
Q. NO. QUESTIONS

Q1. Calculate Gross Profit Ratio from the following information Revenue from Operations ₹ 10,00,000;
Purchases ₹ 3,60,000; Carriage Inwards ₹ 50,000; Employee benefit Expenses ₹ 1,00,000 (including Wages
of ₹ 60,000); Opening Inventory ₹ 60,000 and Average Inventory ₹ 80,000.

OR

Profit after tax amounted to ₹ 6,00,000, and tax rate was 20%. If earnings before interest and tax was ₹
10,00,000 and Nominal Value of Debentures amounted to ₹ 25,00,000 (assuming the only debt of the
company), determine the rate of interest on debentures Hint Gross Profit 57%

(CBSE SAMPLE PAPER 2025)

Q2. As on 31.02.2024 the following information of Bartan Manfacturing ltd. is available . Net profit ratio 40%
Operating profit ratio 50% On 1st April 2024 it was came to notice that the accountant had omitted
recording the interest received on investment of Rs. 2,00,000 for the financial year 2023-24. The required
rectification was done. What will be the effect of the same on Net Profit and operating profit ratio?

A. Net Profit ratio will increase and Operating Profit ratio will decrease

B. Both Net Profit ratio and Operating Profit ratio will increase

C. Net Profit ratio will increase and Operating Profit ratio will have no change

D. Net Profit ratio will remain same and Operating Profit ratio will increase Hint (C)

(CBSE SAMPLE PAPER 2025)

Q3. a) A company had a liquid ratio of 1.5 and current ratio of 2 and inventory turnover ratio 6 times. It had
total current assets of ₹8,00,000. Find out annual sales if goods are sold at 25% profit on cost.

b) Calculate debt to capital employed ratio from the following information. Shareholder funds ₹
15,00,000 8% Debenture ₹ 7,50,000 Current liabilities ₹ 2,50,000 Non -current Assets ₹ 17,50,000 Current
Assets ₹7,50,000 Hint Debt to Capital employed ratio = 1/3 = 0.33 : 1

(CBSE SAMPLE PAPER 2024)

Q4. Debt-Equity Ratio of Dhamaka Ltd is 3 : 1. Which of the following will result in decrease in this ratio?

a) Issue of Debentures for Cash of ₹2,00,000.

b) Issue of Debentures of ₹3,00,000 to Vendors from whom Machinery was purchased.

c) Goods purchased on Credit of ₹1,00,000.

d) Issue of Equity Shares of ₹2,00,000. Hint D

(CBSE SAMPLE PAPER 2024)

Q5. Determine Return on Investment and Net Assets Turnover ratio from the following information:- Profits
after Tax were ₹ 6,00,000; Tax rate was 40%; 15% Debentures were of ₹20,00,000; 10% Bank Loan was ₹
20,00,000; 12% Preference Share Capital ₹ 30,00,000; Equity Share Capital ₹ 40,00,000 ; Reserves and
Surplus were ₹ 10,00,000; Sales ₹ 3,75,00,000 and Sales Return ₹ 15,00,000.

Or

Debt to Capital Employed ratio is 0.3:1. State whether the following transactions, will improve, decline or
will have no change on the Debt to Capital Employed Ratio. Also give reasons for the same.

(i) Sale of Equipments costing ₹ 10,00,000 for ₹ 9,00,000.

(ii) Purchased Goods on Credit for ₹ 1,00,000 for a credit of 15 months, assuming operating cycle
is of 18 months.

(iii) Conversion of Debentures into Equity Shares of ₹ 2,00,000 Hint ROI ₹ 15,00,000 Net Asset 3
times

OR

(i) Ratio will improve. Reason – Capital Employed will decrease and Debt will remain same
(ii) Ratio will remain same. Reason – Both Debt and Capital Employed will remain same.
(iii) Ratio will decline. Reason – Debt will decrease but Capital Employed will remain
same. (iv) Ratio will decline. Reason – Capital Employed will increase but Debt will
remain same

(CBSE SAMPLE PAPER 2023)

Q6. From the following calculate Interest coverage ratio Net profit after tax Rs 12,00,000; 10% debentures Rs
1,00,00,000; Tax Rate 40% a) 1.2 times b) 3 times c) 2 times d) 5 times Hint b

(CBSE SAMPLE PAPER 2023)

Q7.

Hint Quick ratio 1.5:1 Inventory turnover ratio 8 times

(CBSE BOARD PAPER 2024 SET 1)

Q8. The Quick Ratio of a company is 1 : 2. Which of the following transactions

will result in an increase in this ratio ? 1
(A) Cash received from debtors
(B) Sold goods on credit
(C) Purchased goods on credit
(D) Purchased goods on cash Hint B)
(CBSE BOARD PAPER 2024 SET 1)
Q9. (i) Calculate Gross Profit Ratio from the following information :
Inventory Turnover Ratio : 6 times
Average Inventory : Rs.4,00,000
Goods are sold at a profit of 25% on cost (Hint 20%)
OR
(ii) The Current Ratio of a company is 2 : 1. State giving reasons,
which of the following transactions would improve, reduce or not
change the ratio :
(a) Purchased goods on credit Rs.40,000
(b) Sale of furniture of Rs.8,000 at a loss of Rs.2,000
(c) Cash received from trade receivables Rs.15,000
(d) Issued equity shares Rs.6,00,000 hint A) Reduce b) Improve c) No change d) improve
(CBSE BOARD PAPER 2023 SET 1)

Q10. From the following Proprietor ratio is

Current Assets Rs.20,00,000
Non-Current Assets Rs.40,00,000
Long Term Borrowings Rs.25,00,000
Proprietary Ratio 25%
(a) 10,00,000 (b) 14,00,000
(c) 24,00,000 (d) 15,00,000 Hint d)
(CBSE BOARD PAPER 2023 SET 1)
Q11. X Ltd. has a Current ratio of 3·5 : 1 and Quick ratio of 2 : 1. If excess of Current
Assets over Quick Assets is represented by inventories of ₹ 16,000 and prepaid
expenses of ₹ 8,000, calculate :
(a) Current Liabilities
(b) Current Assets
(c) Quick Assets Hint a)Rs.16000 b) Rs 56000 c) Rs.32000
(CBSE COMPT. PAPER 2024 SET 1)

Q12. The Quick Ratio of a company is 1 : 1. Which of the following transactions will
result in increase of this ratio ?
(A) Purchase of inventory ₹ 1,50,000 through cheque
(B) Sold inventory on credit ₹ 50,000
(C) Outstanding expenses of ₹ 40,000 paid
(D) Machinery purchased for cash ₹ 50,000 Hint B)
(CBSE COMPT. PAPER 2024 SET 1)
Q13.

Hint Operating ratio 60% Interest coverage ratio 5 times or i)Increase ii) Decrease iii) No change iv) increase

(CBSE COMPT. PAPER 2024 SET 1)

Q14. (i) Which of the following is not a Solvency Ratio ?
(a) Interest Coverage Ratio
(b) Return on Investment
(c) Debt to Capital Employed Ratio
(d) Total Assets to Debt Ratio (Hint b)
OR
(ii) Which of the following are known as Efficiency Ratios ?
(a) Liquidity Ratios
(b) Solvency Ratios
(c) Activity Ratios
(d) Profitability Ratios
Hint c)

(CBSE COMPT PAPER 2023 SET 1)

Q15. Calculate Opening and closing inventory from the following information:
Revenue from operation-₹5,00,000 ; Gross profit-20% of Revenue from operation,
Return inwards -₹20,000 ; Return outwards -₹50,000 ; Purchases -₹2,50,000 ; Opening
inventory is 2 times of the closing inventory.
OR
From the following information Calculate
(i) Current ratio
(ii) Working capital Turn over ratio Hint Current ratio2.5:1 Working capital turnover ratio 5 times
( 1st Pre Board kv Chennai Region 2024-25)
Q16. From the following information, calculate inventory Turnover Ratio. Revenue
from operations Rs.2,00,000
GP 25% on cost
Opening inventory 1/3th of the closing inventory
Closing inventory 30% of the revenue from operation
OR
Gross profit ratio of a company was 20%. Its credit revenue from operation was
Rs.18,00,000 and its cash revenue from operation was 10% of the total revenue from
operation. If the indirect expenses of the company were Rs.50,000, calculate net
profit ratio of the company) Hint Inventory turnover ratio 4 times or Net profit ratio 17.5%
(ERNAKULAM REGION 1ST PRE BOARD 2024-25)

Q17. As on 31.02.2024, the following information is available relating to Giva Ltd. Proprietary Ratio
0.6:1
Debt Equity Ratio 2:1
The Board of Directors decided to redeem10% Debentures of Rs.2,00,000. what will
be the effect of the same on Proprietary Ratio and Debt Equity Ratio of the
company?
a. Proprietary Ratio will increase and Debt Equity Ratio will decrease
b. Proprietary Ratio will decrease and Debt Equity Ratio will increase
c. Proprietary Ratio will increase and No change in Debt Equity Ratio
d. No change in Proprietary Ratio and Debt Equity Ratio will decrease Hint A)
(ERNAKULAM REGION 1ST PRE BOARD 2024-25
Q18. (a) The net profit after interest and tax of a company was Rs. 1,20,000;
Rate of income tax is 40%. The company has 10% debentures of Rs.
1,00,000. Calculate interest coverage ratio.
(b) From the following information related to a company calculate
inventory turnover ratio : Opening inventory Rs. 20,000; Closing
inventory Rs. 22,000; Purchases Rs. 80,000; Wages Rs. 9,000;
Carriage outwards Rs. 2,000; Returns outwards Rs. 1,000; Revenue
from operations Rs. 80,000; Carriage inwards Rs. 4,000; Rent Rs.
5,000. Hint Calculate interest coverage ratio.
21 times. inventory turnover ratio 4.29
CBSE COMPT SET B 2023

Q19. Which of the following is not a solvency ratio

a)Return to Investment
b)Interest coverage ratio
c)Proprietary Ratio
d)Total assets to debt ratio Hint A)
CBSE SET C 2023

Q20. Y Ltd. has a Current Ratio of 3.5 : 1 and Quick Ratio of 2 : 1. If excess of current assets over quick
assets represented by inventory is Rs.48,000, calculate current assets and current liabilities.
(b) Calculate Debt to Equity Ratio : Shareholder Funds Rs.2,00,000 Reserves and Surplus
Rs.1,00,000 Total Debt Rs.4,00,000 Current Liabilities Rs. 100000 Hint CA-1,12,000 CL Rs. 32000
Debt to equity 1.5:1
CBSE SET C 2023
 CH- CASH FLOW STATEMENT
PREVIOUS YEARS BOARD QUESTIONS

Q1 While computing cash from operating activities, which of the following item(s) 1
will be added to the net profit?
(i) Decrease in value of inventory
(ii) Increase in share capital
(iii) Increase in the value of trade receivables
(iv) Increase in the amount of outstanding expenses

A. Only (i)
B. Only (i) and (ii)
C. Only (i) and (iii)
D. Only (i) and (iv)
ANS - D. Only (i) and (iv) (CBSE SAMPLE PAPER 2025)
Q2 Statement-I: ‘Shree Ltd.’ was carrying on a business of packaging in Delhi and 1
earned good profits in the past years. The company wanted to expand its
business and required additional funds. To meet its requirements the company
issued equity shares of ₹30,00,000. It purchased a computerized machine of
₹20,00,000. During the current year the Net Profit of the company was
₹15,00,000. Cash flows from operating, investing and financing activities from
the above transactions will be ₹15,00,000: (₹20,00,000); ₹30,00,000
respectively.
Statement-II: The patents of X Ltd. increased from ₹3,00,000 in 2021-22 to
₹3,50,000 in 2022-23. It will be taken as purchase of Patents of 50,000 and will
be shown under Cash outflow from Investing Activities.

A. Both the statements are true.

B. Both the statements are false.
C. Only Statement-I is true.
D. Only Statement-II is true.
ANS - A. - Both the statements are true. (CBSE SAMPLE PAPER 2025)
Q3 Which of the following transactions will result in cash outflow from operating 1
activities ?
(A) Payment to creditors
(B) Proceeds from sale of investments
(C) Dividend received by a non-finance company
(D) Depreciation charged on furniture
ANS - (A) Payment to creditors (CBSE COMP. 2024)
Q4 Sale of patents of ₹ 50,00,000 will result in : 1
(A) Cash inflow of ₹ 50,00,000 from financing activities
(B) Cash outflow of ₹ 50,00,000 from financing activities
(C) Cash outflow of ₹ 50,00,000 from investing activities
(D) Cash inflow of ₹ 50,00,000 from investing activities
ANS - (D) Cash inflow of ₹50,00,000 from investing activities
(CBSE COMP. 2024)
Q5 Identify which of the following transactions will result in Cash Inflow from 1
Operating Activities
(A) Payment to creditors
 (B) Interest received by a non-finance company
(C) Dividend received by a non-finance company
(D) Amount received from debtors
ANS - (D) Amount received from debtors (CBSE 2024- 67/1/1)
Q6 The transaction acquisition of machinery by issue of equity shares of 1
₹5,00,00,000
(A) Cash inflow of ₹5,00,00,000 from financing activities
(B) Cash outflow of ₹5,00,00,000 from financing activities
(C) Cash outflow of ₹5,00,00,000 from investing activities
(D) No flow of cash
Ans - (D) No flow of cash (CBSE 2024- 67/1/1)
Q7 Statement I : Issue of Debentures will result in inflow of cash. 1
Statement II : Issue of Debentures to the vendors for purchase of machinery will
result in outflow of cash. Choose the correct option from the following :
(A) Both statements are correct.
(B) Both statements are incorrect.
(C) Statement I is correct and Statement II is incorrect.
(D) Statement I is incorrect and Statement II is correct.
ANS - (C) Statement I is correct and Statement II is incorrect.
(CBSE 2024- 67/2/1)
Q8 What will be the effect of ‘Purchase of Marketable Securities for Cash” on 1
Cash Flow Statement ?
(A) No effect
(B) Inflow from financing activities
(C) Outflow from investing activities
(D) Outflow from financing activities
ANS - (A) No effect (CBSE 2024- 67/2/1)
Q9 Paid 5,00,000 to acquire shares in Neligare Industries and received a dividend 1
of 30,000 after acquisition.
(A) Cash outflow from financing activities 4,70,000
(B) Cash inflow from investing activities 4,70,000
(C) Cash inflow from financing activities 4,70,000
(D) Cash outflow from investing activities 4,70,00
ANS - (D) Cash outflow from investing activities 4,70,00 (CBSE 2024- 67/2/1)
Q10 Statement I : Issue of fully paid bonus shares out of Securities Premium 1
Account will result in inflow of cash.
Statement II : Cash withdrawn from bank will result in inflow of cash.
In the context of the above two statements, choose the correct option :
(A) Both statement I and statement II are correct
(B) Both statement I and statement II are incorrect
(C) Statement I is correct and statement II is incorrect
(D) Statement I is incorrect and statement II is correct
ANS - (B) Both statement I and statement II are incorrect (CBSE 2024- 67/3/1)
Q11 ‘Dividend paid by a finance company’ is classified under which of the 1
following :
(A) Operating Activities
(B) Investing Activities
(C) Financing Activities
(D) Cash and Cash Equivalents
ANS - (C) Financing Activities (CBSE 2024- 67/3/1)
Q12 (a) From the following information, calculate Cash flow from Operating 6
Activities.

Particulars 31 March 31 March

2023 2024
Surplus i.e Balance in 6,00,000 5,00,000
Statement of Profit and Loss
Provision for Tax 1,00,000 1,20,000
Trade Receivables 2,00,000 2,40,000
Trade Payables 1,50,000 2,00,000
Goodwill 2,00,000 1,50,000
Additional Information:- Proposed Dividend for the year ended March 31, 2023
and March 31, 2024 was ₹ 1,50,000 and ₹ 1,80,000 respectively.

(b) From the following information calculate the Cash from Investing Activities
Particulars 31 March 31 March
2023 2024
Machinery (Cost) 20,00,000 28,00,000
Accumulated Depreciation 4,00,000 6,50,000
Additional Information:-
(i) Machinery costing ₹ 50,000 (Book Value ₹ 40,000) was lost by fire and
insurance claim of ₹ 32,000 was received.

(ii) Depreciation charged during the year was ₹ 3,50,000.

(iii)A part of Machinery costing ₹ 2,50,000 was sold at a loss of ₹ 20,000
(CBSE SAMPLE PAPER 2025)

ANS – (a) Cash flow from operating activities = 1,30,000

(a) Investing Activities
Sale of Machinery 1,40,000
Claim received from Insurance Company 32,000
Machinery Purchased (11,00,000)

Cash Outflow from Investing Activities (9,28,000)

Q13 From the following particulars of Ruparel Ltd., calculate ‘Cash Flow from 6
Investing Activities’. Show your working clearly.
Particulars 31 March 31 March
2023 2022
Goodwill 3,00,000 1,00,000
Patents 1,60,000 2,80,000
Machinery 12,40,000 10,20,000
10% Investments 1,60,000 60,000
Additional Information :
(i) Patents of ₹ 1,20,000 were sold at book value.
(ii) Depreciation charged during the year on machinery was ₹ 1,40,000. A
machine having a book value of ₹ 80,000 was sold for ₹ 50,000.
(iii) On 31.03.2023, 10% investments were purchased for ₹ 1,80,000 and some
investments were sold at a profit of ₹ 20,000.
(iv) Interest received on investments was ₹ 6,000.
 (CBSE COMP. 2024)

ANS - Net cash used in Investing Activities = (5,44,000)

Q14. From the following particulars, calculate ‘Cash Flow from Operating 6
Activities’.
Particulars ₹
Surplus i.e. Balance in Statement of Profit and Loss 6,28,000
Provision for Tax 1,50,000
Proposed Dividend for the previous year 72,000
Depreciation 1,40,000
Loss on Sale of Machinery 30,000
Gain on Sale of Investments 20,000
Dividend Received on Investments 6,000
Increase in Current Liabilities 1,61,000
Increase in Current Assets (other than cash and cash 6,00,000
equivalents)
Decrease in Current Liabilities 64,000
Income Tax Paid 1,18,000
(CBSE 2024- 67/1/1)
ANS – 3,73,000
Q15. (a) Calculate Cash Flows from Investing Activities from the following 6
information :

Particulars 31 March 31 March 2022

2023
Plant and Machinery 4,10,000 3,00,000
Goodwill 1,80,000 80,000
Additional Information :
A machine costing ₹85,000 (depreciation provided thereon ₹5,000) was sold
for₹ 62,000. Depreciation charged during the year amounted to ₹48,000.

(b) Calculate ash Flows From Financing Activities from the following
information :

Particulars 31 March 31 March 2022

2023
Equity Share Capital 15,00,000 10,00,000
Bank Overdraft 90,000 1,20,000
Loan from Bank 7,00,000 6,00,000
Additional Information :
(i) Interest paid on bank loan amounted to ₹ 60,000.
(ii) Dividend paid ₹1,10,000.

(CBSE 2024- 67/3/1)

ANS – (a) Net Cash used in Investing Activities = (2,66,000)
(b) Net Cash Inflow from Financing Activities = 4,00,000
Q16. From the figures given in the Balance Sheet and additional information, 6
calculate ‘Cash Flows from Investing activities’ and ‘Cash flows from
Financing Activities’.

Particulars Note 31.3.2022 31.3.2021

No.
I Equity and Liabilities :
1. Shareholder’s Funds
(a) Equity Share Capital 8,00,000 6,00,000
(b) Reserves and Surplus 1 2,00,000 50,000
2. Non-Current Liabilities
Long-term Borrowings 2 4,00,000 3,00,000
3. Current Liabilities
(a) Trade Payables 40,000 45,000
(b) Bank Overdraft 1,00,000 85,000
(c) Short-term Provisions 3 30,000 20,000
Total 15,70,000 11,00,000
II Assets :
1. Non-Current Assets
Fixed Assets
(i) Tangible Assets 6,00,000 5,00,000
(ii) Intangible Assets 5 50,000
2. Current Assets
(a) Inventories 5,00,000 4,00,000
(b) Trade Receivables 4,00,000 90,000
(c) Cash and Cash Equivalents 70,000 60,000
Total 15,70,000 11,00,000

Notes to Accounts :
Particulars 31.3.2022 31.3.2021
1 Reserve and Surplus
Surplus i.e. Balance in Statement of 2,00,000 50000
Profit and Loss
2,00,000 50000
2 Long-term Borrowings
10% Debentures 4,00,000 3,00,000
4,00,000 3,00,000
3 Short-term Provisions
Provision for tax 30,000 20,000
30,000 20,000
4 Tangible Assets
Machinery 7,00,000 6,50,000
Less : Accumulated Depreciation (1,00,000) (1,50,000)
6,00,000 5,00,000
5 Intangible Assets
Goodwill - 50,000
Additional Information :
 (i) A piece of machinery costing ₹1,60,000 was sold at a loss of ₹ 20,000.
Depreciation charged during the year amounted to ₹40,000.
(ii) ₹1,00,000, 10% debentures were issued on 31.3.2022.
(CBSE COMP. 2023)
ANS Net Cash used in Investing activities – (1,60,000)
Net Cash flow from Financing activities– 2,85,000
Q17 Read the following hypothetical text and answer the given questions on the 6
basis of the same. In 2011, two young Indian entrepreneurs, Vaishali Bhatia and
Vivek Bhatia decided to start an online auto portal. At that time, there were no
major players in the market and they saw an opportunity to fill the gap. They
used a user-friendly website and mobile app which made it easy for users to
research and buy cars. It was converted into a company ‘Car Easy Ltd.’ In
2018.
From the following Balance Sheet of the company as on 31st March, 2022,
calculate ‘Cash Flows From Operating Activities”.

Particulars Note 31.3.2022 31.3.2021

No.
I Equity and Liabilities :
(a) Share Capital 9,00,000 3,00,000
(b) Reserves and Surplus 1 1,75,000 3,60,000
2. Non-Current Liabilities 2
Long-term Borrowings 2,40,000 1,80,000
3. Current Liabilities
(a) Trade Payables 18,000 60,000
(b) Short-term Provisions 3 2,04,000 2,10,000
Total 14,37,000 11,10,000
II Assets :
1. Non Current Assets
Fixed Assets 4 10,08,000 5,76,000
2. Current Assets
(a) Inventories 3,54,000 3,87,000
(b) Cash and Cash Equivalents 75,000 1,47,000
Total 14,37,000 11,10,000

Notes to Accounts:
NOTE PARTICULARS 31.3.2022 31.3.2021
NO.
1 Reserve and Surplus
Surplus i.e. Balance in Statement of 75,000 3,60,000
Profit and Loss
75,000 3,60,000
2 Long-term Borrowings
10% Debentures 2,40,000 1,80,000
2,40,000 1,80,000
3 Short-term Provisions
Provision for Tax 2,04,000 2,10,000
2,04,000 2,10,000
4 Fixed Assets
 Machinery 11,52,000 6,45,000
Accumulated Depreciation (1,44,000) (69,000)
Total 10,08,000 5,76,000
Additional Information :
(i) 10% Debentures were issued on 31st March, 2021.
(ii) Tax of 80,000 was paid during the year.

(CBSE 2023)
ANS - Net cash outflow/used in operating activities = (2,01,000)