# Oswal 36 Sample Question Papers CBSE Class 12 Accountancy Solutions

1. (c) Assertion (A) is incorrect, but Reason (R) is correct.

Explanation :

Revaluation A/c preparation is not compulsorily because effect of revaluation of assets and liabilities can be adjusted without affecting book values by passing an adjustment entry.

2. (c) 45

Explanation :

Maximum number of partners in partnership can be 50. There are already 5 partners in the firm. Therefore maximum number of partners that can be admitted is 45.

3. (c) 48

Explanation :

$$\text{No. of shares}=\frac{40 ×2 ×400}{2,000}= 48 \text{shares}$$

OR

(a) 30,000 debentures

Explanation :

$$\text{No. of Debenture}=\frac{\text{Amount Payable/Purchase consideration}}{\text{Face value − Discount}}\\= \frac{28,80,000}{100-4}\\= 30,000\space\text{debentures}$$

4. (c) ₹5,000 Debited to Revaluation Account.

Explanation :

Workmen compensation Reserve A/c Dr. 50,000
Revaluation Ac Dr. 5,000
To Claim for Workmen compensation A/c 55,000

OR

(c) 3 : 2

Explanation :

$$X=\frac{5}{10}+\frac{1}{10}=\frac{6}{10}\\[5px]Z=\frac{2}{10}+\frac{1}{5}=\frac{2+2}{10}=\frac{4}{10}\\[5px]\text{Sharing Profit ratio of X and Z = 6 : 4 or 3 : 2}$$

5. (b) (i) and (iii)

Explanation :

The liability of a partner in a partnership firm is unlimited, i.e. his/her private assets can also be used for paying the debts of the firm.

6. (d) Loss on issue of debentures

Explanation :

Premium on redemption of debentures is debited to the loss on issue of debentures A/c

OR

(a) Purchase consideration

Explanation :

Purchase consideration is obtained by adjusting / deducting Capital Reserve from Net assets.

7. (c) Subscribed Capital ≤ Issued Capital

Explanation :

Subscribed capital ≤ Issued capital because no. of shares subscribed can not be more than the number of issued shares.

8. (d) Have a choice to get either (i) or (ii)

Explanation :

As per partnership Act, retiring partner has both options to choose from.

OR

(d) (i), (iii) and (iv)

Explanation:

(i) Loss on sale of fixed assets is a capital loss.
(iii) Undervaluation of closing stock leads to undervaluation of profit.
(iv) Loss due to fire, earthquake is an abnormal loss.
These all are added to calculate normal profit.

9. (b) ₹70,000

Explanation :

$$\text{Rupal’s share}=\frac{1}{4}\\\text{Remaining of share}=1-\frac{1}{4}=\frac{3}{4}\\[5px]\text{New share of Rahul}=\frac{3}{4}×\frac{2}{3}=\frac{6}{12}\\[5px]\text{New share of Rakesh}=\frac{3}{4}×\frac{1}{3}=\frac{3}{12}\\[5px]\text{New Sharing Ratio}=\frac{6}{12}:\frac{3}{12}:\frac{3}{12}= 6 : 3 : 3 = 2 : 1 : 1\\[5px]\text{Rahul’s share of Profit}= 1,60,000×\frac{2}{4}= 80,000\\[5px]\text{Rupal’s share}= 1,60,000×\frac{1}{4}= 40,000\\[5px]\text{Rupal’s deficiency}= 55,000\\\frac{-40,000}{15,000}\\[5px]\text{Deficiency born by Rahul}=15,000×\frac{2}{3}= 10,000\\[5px]\text{Amount Reflected in blank (1) will be = 80,000}\\[5px]\frac{-10,000}{70,000}$$

10. (d) ₹35,000

Explanation :

$$\text{Rupal share of profit} = 1,60,000×\frac{1}{4}= ₹40,000\\[5px]\text{Add:}\space\text{Deficiency}\frac{=15,000}{=55,000}\\[5px]\text{Rahul share of Profit = (1,60,000 – 40,000)}×\frac{3}{4}= 80,000\\[5px]\text{Less :}\space\text{Deficiency 15,000}×\frac{2}{3}= 10,000 = ₹70,000\\[5px]\text{Rakesh share of Profit= (1,60,000 – 40,000)}×\frac{1}{3}= 40,000\\[5px]\text{Less:}\space\text{Deficiency 15,000}×\frac{1}{3}= 5,000= ₹35,000$$

11. (d) ₹95,000

Explanation :

$$\text{B’s capital = ₹70,000}\\\text{Add:}\space \text{Reserve 25,000}×\frac{2}{5}= ₹10,000\\\text{Add:}\space \text{Revaluation profit = 7,500}×\frac{2}{5}= ₹3,000\\\text{Add:}\space \text{Share of goodwill 30,000}×\frac{2}{5}= ₹12,000\\=₹95,000$$

12. (a) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).

Explanation :

Securities Premium Reserve is the additional amount charged on the face value of any share when the shares are issued, redeemed, and forfeited.

13. (b) 5%

Explanation :

Discount on Issue of debenture = loss on issue of debenture – Premium on redemption of debenture
= ₹90,000 – ₹60,000 = ₹30,000
$$\text{Discount} (\%)=\frac{30,000}{6,00,000}×100=5\%$$

14. (d) B Capital A/c Dr 10,000

To L Capital A/c 10,000

Explanation :

$$B =\frac{1}{3}-\frac{4}{9}=\frac{3-4}{9}=-\frac{1}{9}(Gain)\\[5px]C=\frac{1}{3}-\frac{3}{9}=0\\[5px]L=\frac{1}{3}-\frac{2}{9}=\frac{3-2}{9}=\frac{1}{9}(Sacrifice)\\[5px]\text{Amount of goodwill to be adjusted}= 90000×\frac{1}{9}= ₹10,000$$

15. (c) ₹1,500

Explanation :

$$\text{Interest on Drawings = Amount × Number of months of drawings ×}\frac{\text{Rate}}{100}×\frac{\text{Average Period}}{12}\\[5px]\text{Where}\\[5px]\text{Interest on Drawings = 4,000 × 9 ×}\frac{10}{100}×\frac{5}{12}= 1,500\\[5px]\text{Average Period}=\frac{\text{Time left after first drawings + Time left last drawings}}{2}\\[5px]=\frac{9+1}{2}= 5\text{months}$$

OR

(d) ₹15,000

Explanation :

$$\text{K’s annual salary = 7,500 × 12 = ₹90,000}\\\text{Profit after charity K’s salary = ₹75,000}\\\text{Net profit}=₹1,65,000\\\text{Manager’s Commission : 1,65,000}×\frac{10}{110}=₹15,000$$

In the event of dissolution of partinership firm, the provision for doubtful debts is transferred to credit side of realisation A/c.

16. (a) Realisation Account

Explanation :

17.

 Date Particulars L. F. Amount Dr. (₹) Amount Cr. (₹) 1/4/2018 Profit and Loss A/cDr 16,000 To P’s Capital A/c 4,000 To Q’s Capital A/c 4,000 To R’s Capital A/c 8,000 1/4/2018 Workmen Compensation Fund A/c Dr 70,000 To Workmen Compensation Claim A/c 50,000 To P’s Capital A/c 5,000 To Q’s Capital A/c 5,000 To R’s Capital A/c 10,000 (Being Compensation settled and distributed) 1/4/2018 P’s Capital A/c Dr 60,000 Q’s Capital A/c Dr 60,000 To R’s Capital A/c 1,20,000 (Being Adjustment of goodwill made)

$$\text{Profit}\space\text{loss}=4,000×\frac{4}{1}=16,000\\[5px]\text{Q’s share}=16,000×\frac{1}{4}=4,000\\[5px]\text{R’s Share}=16,000×\frac{2}{4}=8,000$$
$$\textbf{2. Workmen Compensation fund:}\\[5px]\text{Amount distributed among partner}=5,000×\frac{4}{1}=20,000\\[5px]\text{R’s Share} = 20,000×\frac{2}{4}=10,000\\[5px]\text{Workmen compensation fund = 50,000 + 20,000 = ₹70,000}$$
$$\textbf{3. Goodwill}\\[5px]P=\frac{1}{4}-\frac{2}{5}=\frac{5-8}{20}=-\frac{3}{20}\text{(Gain)}\\[5px]Q=\frac{1}{4}-\frac{2}{5}=\frac{5-8}{20}=-\frac{3}{20}\text{(Gain)}\\[5px]R=\frac{2}{4}-\frac{1}{5}=\frac{10-4}{20}=-\frac{6}{20}\text{(Sacrifice)}\\[5px]\text{Goodwill of firm = 1,20,000}×\frac{20}{6}=₹4,00,000\\[5px]\text{P’s Share = 4,00,000}×\frac{3}{20}=₹60,000\\[5px]\text{P’s Share = 4,00,000}×\frac{3}{20}=₹60,000$$

18.

Journal

 Date Particulars L. F. Amount Dr. (₹) Amount Cr. (₹) P’s Capital A/c Dr. 12,000 S’s Capital A/c Dr. 9,000 R’s Capital A/c Dr. 1,000 To General Reserve A/c 22,000 (Being adjustment entry passed)

Working Note:

 Particulars P S Amount Dr. (₹) Amount Cr. (₹) Profit wrongly Credited (Dr.) (60,000) (30,000) (30,000) 1,20,000 Interest on Capital @ 10% p.a. 20,000 16,000 12,000 48,000 Salary to Partner (Cr.) 18,000 — 12,000 30,000 Transfer to Reserve (Cr.) — — — 22,000 Share of profit (Cr.) (20,000 in 2 : 1 : 1) 10,000 5,000 5,000 20,000 (12,000) (9,000) (1,000) — Dr. Dr. Dr.

OR

Journal

 Date Particulars L.F. Amount Dr. (₹) Amount Cr. (₹) 1 Interest on Capital A/c Dr. To S’s Capital A/c 4,500 To K’s Current A/c 6,000 (Being Interest on capital credited to partners) 10,500 4,500 6,000 2 Profit & Loss Appropriation A/c Dr. To Interest on Capital A/c 10,500 (Being Interest on capital charged to Profit & Loss Appropriation A/c) 10,500 10,500

Working Note:
Interest on Capital
S = 60000 × 10% = 6000
K = 80000 × 10% = 8000
Total Interest = 14000
Since profit is less than appropriation, than Interest on capital will be distributed in the ratio of appropriations 6000 : 8000 i.e. 3 : 4
$$S=10,500×\frac{3}{7}=₹4,500\\[5px]K=10,500×\frac{4}{7}=₹6,00$$

19.

In the Books of Z Ltd.

Journal

 Date Particulars L.F. Amount Dr. (₹) Amount Cr. (₹) Machinery A/c Dr. To K Ltd. (Being machinery purchased) 2,03,000 2,03,000 K Ltd. Dr. To Equity Share Capital A/c To Securities Premium Reserve A/c (Being 5,000 equity shares of ₹10 each issued at 30% premium) 65,000 50,000 15,000 K Ltd. Dr. Discount on Issue of Debentures A/c Dr. To 8% Debentures A/c (Being 1,000, 8% debentures of ₹100 each issued at 10% discount) 90,000 10,000 1,00,000 K Ltd. Dr. To Bills Payable A/c (Being balance payment made by giving two months’ Promissory note) 48,000 48,000

OR

Journal

 Date Particulars L.F. Amount Dr. (₹) Amount Cr. (₹) 1 Share Capital A/c (150 × 6) Dr. Securities Premium A/c (150 × 4) Dr. To Share forfeited A/c (150 × 2) To call in Arrears A/c (Being shares forfeited) 900 600 300 1200 2 Bank A/c (150 × 15) Dr. To Share Capital A/c To Securities premium A/c (Being Shares reissued @ ₹15) 2,250 1500 750 3 Share forfeited A/c Dr. To Capital Reserve A/c (Being amount transferred) 300 300
 Dr. Share forfeited A/c Cr.
 Particulars Amount (₹) Particulars Amount (₹) To Capital Reserve A/c 300300 By Share capital A/c 300300

20. Goodwill = Average profit × Number of Year purchase = 40,000 × 2 = 80,000
Working Note:

 Year Profit Adjustment Adjusted Profit 2019-20 25,000 -5,000 20,000 2020-21 50,000 +10,000 60,000 2021-22 40,000 -40,000 40,000 Total ₹1,20,000

$$\text{Average profit}=\frac{1,20,000}{3}=₹40,000$$

21.

Balance Sheet of Chaudhary Ltd.

as at

 Particulars Note No. Current Year Previous Year 1. Equity and liabilities1. Share holder’s fund(a) Share capital 1 3,59,94,000

Notes to Accounts:

1. Share Capital
Authorised Capital:
6,00,000 shares of ₹100 each 6,00,00,000
Issued Capital:
60,000 shares of ₹100 each (issued to vendor) 60,00,000
3,00,000 shares of ₹100 each
6,00,00,000
60,00,000
3,00,00,000
3,60,00,000
Subscribed Capital:
Subscribed and Fully paid up:
60,000 shares of ₹100 each (issued to vendor)
2,99,800 shares of ₹100 each
Add: Shares forfeited A/c (200 × 70)
60,00,000
2,99,80,000
14,000
3,59,94,000

22.

Journal

 Date Particulars L.F. Amount Dr. (₹) Amount Cr. (₹) 2013 Apr. 1 Cash A/c Dr. To Somesh's Capital A/c 1,20,000 (Being Somesh brought his capital) 1,20,000 1,20,000 Apr. 1 Somesh's Capital A/c Dr. To Hemant's Capital A/c To Nishant's Capital A/c (Being share of goodwill brought in by Somesh distributed among sacrificing partners in sacrificing ratio 3 : 2) 44,000 26,400 17,600

$$\text{Working Notes:}\\[5px]\textbf{1. Calculation of Profit Sharing Ratio:}\\[5px]\text{Old Ratio = 3 : 2}\\[5px]\text{Somesh’s share}=\frac{1}{5}\\[5px]\text{Let the total share of the firm = 1}\\[5px]\text{Remaining share of the firm}=1-\frac{1}{5}=\frac{4}{5}\\[5px]\text{Hemant’s New Share}=\frac{3}{5}×\frac{4}{3}=\frac{12}{25}\\[5px]\text{Nishant’s New Share}=\frac{2}{5}×\frac{4}{5}=\frac{8}{25}\\[5px]\text{New Profit Sharing Ratio}=\frac{12}{25}:\frac{8}{25}:\frac{1}{5}\\[5px]=\frac{12:8:5}{25}=12:8:5\\[5px]\text{Sacrificing Ratio = Old Ratio – New Ratio}\\[5px]\text{Hemant’s Sacrifice}=\frac{3}{5}-\frac{12}{25}=\frac{3}{25}\\[5px]\text{Nishant’s Sacrifice}=\frac{2}{5}-\frac{8}{25}=\frac{2}{25}\\[5px]\text{Sacrificing Ratio = 3 : 2}$$

$$\textbf{2. Calculation of Somesh’s share of Goodwill:}\\[5px]\text{Total Capitalised Value of Firm = Capital brought in by Somesh × Reciprocal of his share}\\[5px]\text{Total Capitalised Value of Firm}=₹1,20,000×\frac{5}{1}=₹6,00,000\\[5px]\text{Net Worth = Capital of Hemant + Capital of Nishant + Capital of Somesh}\\[5px]\text{Net Worth = ₹1,60,000 + ₹1,00,000 + ₹1,20,000 = ₹3,80,000}\\[5px]\text{Goodwill of the Firm = Total Capitalised Value of the Firm − Net Worth}\\[5px]\text{Goodwill of the Firm = ₹6,00,000 − ₹3,80,000 = ₹2,20,000}\\[5px]\text{Somesh’s share of Goodwill = ₹2,20,000}×\frac{1}{5}=₹44,000\\[5px]\text{Hemant will get = ₹44,000}×\frac{3}{5}=₹26,400\\[5px]\text{Nishant will get = ₹44,000}×\frac{2}{5}=₹17,600$$

23.

In the Books of K.N. Ltd.

Journal

 Date Particulars L.F. Amount Dr. (₹) Amount Cr. (₹) Bank A/c Dr. To Equity Share Application & Allotment A/c (Being application money received on 8,00,000 shares) 24,00,000 24,00,000 Equity Share Application & Allotment A/c Dr. To Equity Share Capital A/c To Equity Share First Call A/c To Bank A/c (Being shares allotted and excess money adjusted on call, balance refunded) 24,00,000 18,00,000 4,50,000 1,50,000 Equity Share First Call A/c Dr. To Equity Share Capital A/c (Being for first call money due) 24,00,000 24,00,000 Bank A/c Dr. To Equity Share First Call A/c (Being first call money received) 19,32,000 19,32,000 Equity Share Capital A/c Dr. To Equity Share First Call A/c To Share Forfeiture A/c (Being 6,000 shares forfeited) 42,000 18,000 24,000 Bank A/c Dr. To Equity Share Capital A/c To Securities Premium Reserve A/c (Being forfeited shares re-issued at `13 per share fully paid) 78,000 60,000 18,000 Equity Share Second and Final Call A/c Dr. To Equity Share Capital A/c To Securities Premium Reserve A/c (Being second and final call due) 35,64,000 17,82,000 17,82,000 Bank A/c Dr. To Equity Share Second and Final Call A/c (Being second and final call money received) 35,64,000 35,64,000 Share Forfeiture A/c Dr. To Capital Reserve A/c (Being gain on re-issue forfeited shares transferred to capital reserve) 24,000 24,000

$$\textbf{1. Shares allotted to Rakesh = 6,000}\\\text{Shares Applied}=(\frac{4 00 000}{3 00 000}×6,000)=8,000\\\text{Amount paid on application and allotment = 8,000 × ₹3 = ₹24,000}\\\text{Less: Adjusted 6,000 × ₹3 = (₹18,000)}\\\text{Excess with company = ₹6,000}\\\text{First call money due 6,000 × ₹4 = ₹24,000}\\\text{Less: Excess money adjusted = (₹6,000)}\\\text{Not Paid on call = ₹18,000}\\\textbf{2. Calculation of First Call amount received:}\\\text{Due on first call = ₹24,00,000}\\\text{Less: Adjusted = (₹4,50,000)}\\₹19,50,000\\\text{Less: Not received from Rakesh = (₹18,000)}\\\text{Received in first call = ₹19,32,000}\\\textbf{3. Amount transferred to Capital Reserve}=(\frac{6,000}{6,000}×24,000)– Nil = ₹24,000$$

OR

(i)

Journal

 Date Particulars L.F. Amount Dr. (₹) Amount Cr. (₹) Equity Share Capital A/c Dr. To Calls-in-Arrears A/c To Share Forfeited A/c (Being 200 equity share forfeited) 2,000 1,200 800 Bank A/c Dr. Share Forfeited A/c Dr. To Equity Share Capital A/c (Being 200 forfeited equity shares reissued) 1,500 500 2,000 Share Forfeited A/c Dr. To Capital Reserve A/c (Being profit on reissue of 200 forfeited shares transferred to capital reserve) 300 300

(ii)

Journal

 Date Particulars L.F. Amount Dr. (₹) Amount Cr. (₹) Equity Share Capital A/c Dr. To Share Allotment A/c (100 × ₹2) To Share First Call A/c (300 × ₹3) To Share Second & Final Call A/c (600 × ₹4) To Share Forfeited A/c(Being 600 shares forfeited) 6,000 200 9002,4002,500 Bank A/c Dr. To Share Capital A/c To Securities Premium Reserve A/c (Being 600 forfeited shares reissued at ₹11 per share as fully paid-up) 6,600 6,000600 Share Forfeited A/c Dr. To Capital Reserve A/c (Being profit on reissue of 600 forfeited shares transferred to capital reserve) 2,500 2,500

24.

 Dr. Realisation A/c Cr. Particulars Amount (₹) Particulars Amount (₹) To Bills Receivable A/c 10,000 By Provision for doubtful debts A/c 12,000 To Stock A/c 78,000 By Loan A/c 15,000 To Debtors A/c 2,42,000 By Creditor A/c 60,000 To Other Assets A/c (Creditors) 1,70,000 By Cash A/c (Debtor) 21,000 To Cash A/c (Realisation expenses) 2,700 By A's Capital A/c To C’s capital A/c (loan + Interest) 18,000 B/R 8,000 To A’s Capital A/c (Creditors) 60,000 Debtors 1,72,000 1,80,000 Stock 70,000 Other Assets 72,000 1,42,000 By C’s capital A/c 81,000 By Loss on Realisation transferred to A 41,820 B 13,940 C 13,940 69,700 5,80,700 5,80,700

Partner’s Capital A/c

 Particulars A B C Particulars A B C To Realisation A/c 1,80,000 1,42,000 81,000 By balance b/d 2,75,000 1,00,000 70,000 To Realisation A/c (loss) 41,820 13,940 13,940 By Realisation A/c 60,000 — 18,000 To Cash A/c 1,13,180 — — By Cash A/c — 6,940 6,940 3,35,000 1,55,940 94,940 3,35,000 1,55,940 94,940

OR

A, B and C were partners in a firm sharing profits in the ratio of 5:3:2. On 31-3-2019 their Balance Sheet was as follows:

Balance Sheet of A, B and C as on 31st March, 2019

 Liabilities Amount (₹) Assets Amount (₹) Creditors 42,000 Land and Building 1,24,000 Investment Fluctuation Fund 20,000 Motor Vans 40,000 Profit & Loss Account 80,000 Investments 38,000 Capitals: Machinery 24,000 A 1,00,000 Stock 30,000 B 80,000 Debtors 80,000 C 40,000 Less: Provision for Bad Debts 6,000 74,000 2,20,000 Cash 32,000 3,62,000 3,62,000

On the above date B retired and A and C agreed to continue the business on the following terms:

1. Goodwill of the firm was valued at ₹1,02,000.
2. There was a claim of ₹8,000 for Workmen’s Compensation.
3. Provision for bad debts was to be reduced by ₹2,000.
4. Y will be paid ₹8,200 in cash and the balance will be transferred in his loan account which will be
paid in four equal yearly instalments together with interest @ 10% p.a.
5. The new profit-sharing ratio between X and Z will be 3:2 and their capitals will be in their new
profit-sharing ratio.

The capital adjustments will be done by opening current accounts.
P repare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the reconstituted firm.

Ans.

 Dr. Revaluation A/c Cr. Particulars Amount (₹) Particulars Amount (₹) To Workmen Compensation Claim 8,000 By Provision for Bad Debts A/c 2,000 By Loss Transfer to A's Capital A/c 3,000 B's Capital A/c 1,800 C's Capital 1,200 6,000 8,000 8,000
 Dr. Partner’s Capital A/c Cr. Particulars A B C Particulars A B C To Revaluation A/c 3,000 1,800 1,200 By balance b/d 1,00,000 80,000 40,000 To B’s Capital A/c 10,200 — 20,400 By Profit & Loss A/c 40,000 24,000 16,000 (Goodwill) By Investment 10,000 6,000 4,000 To Cash A/c — 8,200 — fluctuation funds To B’s Loan A/c — 1,30,600 — By A’s Capital A/c — 10,200 — To A’s current A/c 31,680 — — By C’s capital A/c — 20,400 — To Balance c/d 1,05,120 — 70,080 By C’s current A/c — 31,680 1,50,000 1,40,600 91,680 1,50,000 1,40,600 91,680

Balance Sheet

 Liabilities Liabilities Amount (₹) Assets Amount (₹) B’s loan 1,30,600 Land & Building 1,24,000 Workmen compensation Claim 8,000 Motor vans 40,000 A’s Current A/c 31,680 Investments 38,000 Creditors 42,000 Machinery 24,000 Capital: Stock 30,000 A 1,05,120 Debtors 80,000 C 70,080 1,75,200 Less: Provision (4,000) 76,000 Cash 23,800 C’s Current A/c 31,680 3,87,480 3,87,480

Working Note:

 1. Capital Adjustment A C Total Existing capital after all adjustment 1,36,800 38,400 = 1,75,200 New capital in 3 : 2 1,05,120 70,080 = 1,75, 200 31,680 31,680 Withdraw Introduce

$$\text{2. Calculation of Sacrificing and gaining ratio}\\[5px]A\space\frac{3}{5}-\frac{5}{10}=\frac{1}{10}\text{(Gain)}\\[5px]C\space\frac{2}{5}-\frac{2}{10}=\frac{2}{10}\text{(Gain)}\\[5px]\text{B’s Share of goodwill = 1,02,000}×\frac{3}{10}=₹30,600$$

25.

 Date Particulars L.F. Amount Dr. (₹) Amount Cr. (₹) 1. M’s Capital A/c Dr N’s Capital A/c Dr O’s Capital A/c Dr To Profit & Loss A/c (Being loss distributed) 15,000 30,000 15,000 60,000 2. M’s Capital A/c Dr O’s Capital A/c Dr To N’s Capital A/c (Being adjustment entry for goodwill is passed) 1,00,000 1,00,000 2,00,000 3. Profit & Loss Suspense A/c Dr To N’s Capital A/c (Being share of profit credited) 25,000 25,000 4. N’s Capital A/c Dr To N’s Executor A/c (Being amount transferred to N’s Executor A/c) 1,85,000 1,85,000

Working Note:
$$\text{1. Share of profit = 1,00,000}×\frac{2}{4}×\frac{6}{12}= ₹25,000\\[5px]\text{2. N’s Executor Balance = –10,000 – 30,000 + 2,00,000 + 25000 = ₹1,85,000}$$

26. (a)

Jornal of Books Ltd.

 Date Particulars L.F. Amount Dr. (₹) Amount Cr. (₹) 1. Bank A/c DrTo Debenture Application and allotment A/c 5,52,000 5,52,000 2. Debenture Application & Allotment A/c Dr Discount on issue of Debenture A/c DrTo 10% Debenture A/c(Being adjustment entry for goodwill is passed) 5,52,00048,000 6,00,000

Discount on Issue of Debenture A/c

 Particular ₹ Particular ₹ To 10% Debentures A/c 48,000 By Statement of Profit & loss 48,000 48,000 48,000

(b)

Journal of Sunita Ltd.

 Date Particulars L.F. Amount Dr. (₹) Amount Cr. (₹) 1. Assets A/c DrGoodwill A/c DrTo Liabilities A/cTo Sangeeta Ltd.(Being business Purchased) 8,00,00060,000 1,00,0002,60,000 2. Sangeeta Ltd. DrDiscount on issue of Debenture A/c DrTo 12% Debenture A/c(Being debenture issued) 7,60,00040,000 8,00,000

Working Notes:
$$\text{No. of Debentures}=\frac{\text{Amount Payable}}{\text{FaceValue −Discount}}\\[5px]=\frac{7,60,000}{100-5}= 8,000 \text{Debentures}$$

## Part - B

(Analysis of Financial Statement)

(Option-I)

27. (d) It identifies the reasons for change in the financial position of the firm.

Explanation :

All other options amounts to limitation of financial analysis.

OR

(c) Operating Ratio

Explanation :

Some types of profitability ratios asset
(i) Gross profit Ratio
(ii) Net Profit Ratio
(iii) Operating Ratio
(iv) Operating Profit Ratio

28. (d) 2,50,000

Explanation :

Let cost of Revenue from operation be 100
Gross profit be 20
the Revenue from operation is 120
$$\text{Gross Profit}=\frac{15, 00, 000× 20}{120}= ₹2,50,000$$

29. (b) Cash flow from Operating Activity

Explanation :

For a financing company, receipts of divided is considered as operating activity.

OR

(b) Inflow in financing activities

Explanation :

Sweat equity shares are issued at discount to the employees or directors of the company and thus issue of sweat equity shares will result in inflow in financing activities sweat equity shares can also be issued for consideration other than cash.

30. (d) Interest received on Investments

Explanation :

While calculating operating profits before working capital changes, interest received gain/profit are deducted from net profit.

31.

 Particular Major Head Sub-Head (a) Calls in Arrear Shareholders fund Share Capital by way of deduction (b) Patents being developed by the company Non-current Assets Property, Plant & Equipment and Intangible Assets Intangible Assets under development (c) Losses tools Current Assets Inventories (d) Premium on redemption of debentures Non-current Liabilities Other non-current liabilities (e) Licences & Franchise Non-Current Assets Property, Plant & Equipment and Intangible Assets Intangible Assets (f) Work in Progress Current Assets Inventories

32.

(i) Redeemed 9% Debenture of ₹1,00,000 at a premium of 10%.
Increase : Redemption of debentures in current year is considered as short term borrowings i.e. current liabilities. Both current Assets and current liabilities be reduced by same amount and ratio will increase.

(ii) Received from debtors ₹17,000 No change: It will increase cash and decrease debtors with the same amount and those is no change in current Assets and current liabilities.

(iii) Issued ₹2,00,000 equity share to the vendors of machinery No change: No affect on Current Assets and current liabilities.

33.

Common size Balance Sheet of Academy Ltd.

for the year ended 31/3/2019

 Particulars Absolute Amount Percentage of Balance Sheet to 2018-19 2017-18 2018-19 2017-18 I. Equity and Liabilities (1) Shareholder’s Fund 10,00,000 5,00,000 45.46 45.46 (2) Non-current Liabilities 7,00,000 3,00,000 31.82 27.27 (3) Current Liabilities 5,00,000 3,00,000 22.72 27.27 Total 22,00.000 11,00,000 100 100 II. ASSETS (1) Non-current Assets 13,00,000 6,00,000 59.10 54.54 (2) Current Assets 9,00,000 5,00,000 40.90 45.46 Total 22,00.000 11,00,000 100 100

OR

Following information is extracted from the Statement of Profit and Loss of Youth Ltd. for the year ended 31st March, 2019. Prepare Comparative Statement of Profit and Loss.

 Particulars 2018 – 19 (₹) 2017 – 18 (₹) Revenue from Operations 30,00,000 24,00,000 Other Incomes (15% of Revenue from Operations) (15% of Revenue from Operations) 25% of Revenue from Operations Expenses (60% of Revenue from Operations) 50% of Revenue from Operations Taxes (40%) (40%)

Ans.

Corporative Statement of Profit & Loss of Youth Ltd. as at 31/3/19

 Particulars 31/3/2018 31/3/2019 Absolute Change Percentage Change (%) I. Revenue from operation 24,00,000 30,00,000 6,00,000 25.00 II. Other Income 6,00,000 4,50,000 (1,50,000) (25.00) III. Total Revenue (I + II) 30,00,000 34,50,000 4,50,000 15.00 IV. Expenses 15,00,000 18,00,000 3,00,000 20.00 V. Profit before Tax (III – IV) 15,00,000 16,50,000 (1,50,000) 10.00 VI. Less Taxes 6,00,000 6,60,000 (60,000) 10.00 VII. Profit after Tax (V – VI) 9,00,000 9,90,000 90,000 10.00

34. Cash flow Statement of Unnati Ltd. for the year ended 31/3/2022

 Particulars Amount (₹) Amount (₹) (A) Cash flow from Operating Activities Net Profit before tax & Extraordinary item 1,70,000 Add: Non-cash & non-operating expenses Goodwill amortised 40,000 Depreciation machinery 70,000 Interest paid on 15% Debentures 30,000 Loss on Sale of machine 20,000 Operating Profit before working capital changes 3,30,000 Add: Increase in trade payable 15,000 Add: Decrease in Inventories 50,000 Cash generated from operations 3,95,000 Less : Tax paid (40,000) Cash inflow from operating activities 3,55,000 (B) Cash flow from Investing Activities Purchase of Machine (4,30,000) Sale of Machine 1,40,000 Cash used in Investing activities (2,90,000) (C) Cash flow from Financing Activities Issue of share 2,00,000 Redemption of Debenture (50,000) Interest paid on 15% Debenture (30,000) Dividend paid (80,000) Decrease in Bank overdraft (30,000) Cash inflow from financing activities 10,000 Net Increase in cash & cash equivalent (A + B + C) 75,000 Add: Opening balance of cash & cash equivalent 50,000 Closing balance of cash & cash equivalent 1,25,000

Working Note:
$$\text{1. Calculation of Net Profit before tax and extra ordinary item.}\space\space\space\textbf{₹}\\[5px]\text{Profit as per statement of profit and loss}\space\space\space(20,000)\\[5px]\text{Add: Transfer to general Reserve}\space\space\space50,000\\[5px]\text{Add: Provision for tax}\space\space\space60,000\\[5px]\text{Add: Proposed Dividend}\space\space\space80,000\\1,70,000$$

2.

 Dr. Machine A/c Cr. Particulars Amount (₹) Particulars Amount (₹) To Balance b/d 12,90,000 By statement of Profit & loss 20,000 To Bank A/c (Balancing figure) 4,30,000 (loss on sale) By Accumulate Depreciation A/c 40,000 By Bank A/c 1,40,000 By Balance c/d 15,20,000 17,20,000 17,20,000
 Dr. Accumulated Depreciation A/c Cr. Particulars Amount (₹) Particulars Amount (₹) To Machine A/c 40,000 By Balance b/d 90,000 To Balance c/d 1,20,000 By Depreciation A/c (Balancing figure) 70,000 1,60,000 1,60,000

3. Interest on debentures = 2,00,000 × 15% = 30,000

 Dr. Provision for Tax Cr. Particulars Amount (₹) Particulars Amount (₹) To Bank A/c (Balancing figure) 40,000 By Balance b/d 80,000 To Balance c/d 1,00,000 By Statement of Profit & loss 60,000 1,40,000 1,40,000

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