Oswal 36 Sample Question Papers CBSE Class 12 Accountancy Solutions
1. (c) Assertion (A) is incorrect, but Reason (R) is correct.
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
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
$$\text{No. of shares}=\frac{40 ×2 ×400}{2,000}= 48 \text{shares}$$
OR
(a) 30,000 debentures
$$\text{No. of Debenture}=\frac{\text{Amount Payable/Purchase consideration}}{\text{Face value − Discount}}\\= \frac{28,80,000}{1004}\\= 30,000\space\text{debentures}$$
4. (c) ₹5,000 Debited to Revaluation Account.
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
$$X=\frac{5}{10}+\frac{1}{10}=\frac{6}{10}\\[5px]Z=\frac{2}{10}+\frac{1}{5}=\frac{2+2}{10}=\frac{4}{10}\\[5px]\text{Sharing Profit ratio of X and Z = 6 : 4 or 3 : 2}$$
5. (b) (i) and (iii)
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
Premium on redemption of debentures is debited to the loss on issue of debentures A/c
OR
(a) Purchase consideration
Purchase consideration is obtained by adjusting / deducting Capital Reserve from Net assets.
7. (c) Subscribed Capital ≤ Issued Capital
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)
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
$$\text{Rupal’s share}=\frac{1}{4}\\\text{Remaining of share}=1\frac{1}{4}=\frac{3}{4}\\[5px]\text{New share of Rahul}=\frac{3}{4}×\frac{2}{3}=\frac{6}{12}\\[5px]\text{New share of Rakesh}=\frac{3}{4}×\frac{1}{3}=\frac{3}{12}\\[5px]\text{New Sharing Ratio}=\frac{6}{12}:\frac{3}{12}:\frac{3}{12}= 6 : 3 : 3 = 2 : 1 : 1\\[5px]\text{Rahul’s share of Profit}= 1,60,000×\frac{2}{4}= 80,000\\[5px]\text{Rupal’s share}= 1,60,000×\frac{1}{4}= 40,000\\[5px]\text{Rupal’s deficiency}= 55,000\\\frac{40,000}{15,000}\\[5px]\text{Deficiency born by Rahul}=15,000×\frac{2}{3}= 10,000\\[5px]\text{Amount Reflected in blank (1) will be = 80,000}\\[5px]\frac{10,000}{70,000}$$
10. (d) ₹35,000
$$\text{Rupal share of profit} = 1,60,000×\frac{1}{4}= ₹40,000\\[5px]\text{Add:}\space\text{Deficiency}\frac{=15,000}{=55,000}\\[5px]\text{Rahul share of Profit = (1,60,000 – 40,000)}×\frac{3}{4}= 80,000\\[5px]\text{Less :}\space\text{Deficiency 15,000}×\frac{2}{3}= 10,000 = ₹70,000\\[5px]\text{Rakesh share of Profit= (1,60,000 – 40,000)}×\frac{1}{3}= 40,000\\[5px]\text{Less:}\space\text{Deficiency 15,000}×\frac{1}{3}= 5,000= ₹35,000$$
11. (d) ₹95,000
$$\text{B’s capital = ₹70,000}\\\text{Add:}\space \text{Reserve 25,000}×\frac{2}{5}= ₹10,000\\\text{Add:}\space \text{Revaluation profit = 7,500}×\frac{2}{5}= ₹3,000\\\text{Add:}\space \text{Share of goodwill 30,000}×\frac{2}{5}= ₹12,000\\=₹95,000$$
12. (a) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
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%
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
$$B =\frac{1}{3}\frac{4}{9}=\frac{34}{9}=\frac{1}{9}(Gain)\\[5px]C=\frac{1}{3}\frac{3}{9}=0\\[5px]L=\frac{1}{3}\frac{2}{9}=\frac{32}{9}=\frac{1}{9}(Sacrifice)\\[5px]\text{Amount of goodwill to be adjusted}= 90000×\frac{1}{9}= ₹10,000$$
15. (c) ₹1,500
$$\text{Interest on Drawings = Amount × Number of months of drawings ×}\frac{\text{Rate}}{100}×\frac{\text{Average Period}}{12}\\[5px]\text{Where}\\[5px]\text{Interest on Drawings = 4,000 × 9 ×}\frac{10}{100}×\frac{5}{12}= 1,500\\[5px]\text{Average Period}=\frac{\text{Time left after first drawings + Time left last drawings}}{2}\\[5px]=\frac{9+1}{2}= 5\text{months}$$
OR
(d) ₹15,000
$$\text{K’s annual salary = 7,500 × 12 = ₹90,000}\\\text{Profit after charity K’s salary = ₹75,000}\\\text{Net profit}=₹1,65,000\\\text{Manager’s Commission : 1,65,000}×\frac{10}{110}=₹15,000$$
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
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) 
$$\text{Profit}\space\text{loss}=4,000×\frac{4}{1}=16,000\\[5px]\text{Q’s share}=16,000×\frac{1}{4}=4,000\\[5px]\text{R’s Share}=16,000×\frac{2}{4}=8,000$$
$$\textbf{2. Workmen Compensation fund:}\\[5px]\text{Amount distributed among partner}=5,000×\frac{4}{1}=20,000\\[5px]\text{R’s Share} = 20,000×\frac{2}{4}=10,000\\[5px]\text{Workmen compensation fund = 50,000 + 20,000 = ₹70,000}$$
$$\textbf{3. Goodwill}\\[5px]P=\frac{1}{4}\frac{2}{5}=\frac{58}{20}=\frac{3}{20}\text{(Gain)}\\[5px]Q=\frac{1}{4}\frac{2}{5}=\frac{58}{20}=\frac{3}{20}\text{(Gain)}\\[5px]R=\frac{2}{4}\frac{1}{5}=\frac{104}{20}=\frac{6}{20}\text{(Sacrifice)}\\[5px]\text{Goodwill of firm = 1,20,000}×\frac{20}{6}=₹4,00,000\\[5px]\text{P’s Share = 4,00,000}×\frac{3}{20}=₹60,000\\[5px]\text{P’s Share = 4,00,000}×\frac{3}{20}=₹60,000$$
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  300 300 
By Share capital A/c  300 300 
20. Goodwill = Average profit × Number of Year purchase = 40,000 × 2 = ₹80,000
Working Note:
Year  Profit  Adjustment  Adjusted Profit 
201920  25,000  5,000  20,000 
202021  50,000  +10,000  60,000 
202122  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 liabilities 1. 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 reissued 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 reissue 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 CallsinArrears 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  200 900 2,400 2,500 

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 paidup) 
6,600  6,000 600 

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 3132019 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:
 Goodwill of the firm was valued at ₹1,02,000.
 There was a claim of ₹8,000 for Workmen’s Compensation.
 Provision for bad debts was to be reduced by ₹2,000.
 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.  The new profitsharing ratio between X and Z will be 3:2 and their capitals will be in their new
profitsharing 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 Dr To 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 Dr To 10% Debenture A/c (Being adjustment entry for goodwill is passed) 
5,52,000 48,000 
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 Dr Goodwill A/c Dr To Liabilities A/c To Sangeeta Ltd. (Being business Purchased) 
8,00,000 60,000 
1,00,000 2,60,000 

2.  Sangeeta Ltd. Dr Discount on issue of Debenture A/c Dr To 12% Debenture A/c (Being debenture issued) 
7,60,000 40,000 
8,00,000 
Working Notes:
$$\text{No. of Debentures}=\frac{\text{Amount Payable}}{\text{FaceValue −Discount}}\\[5px]=\frac{7,60,000}{1005}= 8,000 \text{Debentures}$$
Part  B
(Analysis of Financial Statement)
(OptionI)
27. (d) It identifies the reasons for change in the financial position of the firm.
All other options amounts to limitation of financial analysis.
OR
(c) Operating Ratio
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
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
For a financing company, receipts of divided is considered as operating activity.
OR
(b) Inflow in financing activities
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
While calculating operating profits before working capital changes, interest received gain/profit are deducted from net profit.
31.
Particular  Major Head  SubHead  
(a)  Calls in Arrear  Shareholders fund  Share Capital by way of deduction 
(b)  Patents being developed by the company  Noncurrent Assets  Property, Plant & Equipment and Intangible Assets Intangible Assets under development 
(c)  Losses tools  Current Assets  Inventories 
(d)  Premium on redemption of debentures  Noncurrent Liabilities  Other noncurrent liabilities 
(e)  Licences & Franchise  NonCurrent 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  
201819  201718  201819  201718  
I. Equity and Liabilities  
(1) Shareholder’s Fund  10,00,000  5,00,000  45.46  45.46 
(2) Noncurrent 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) Noncurrent 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 31^{st} 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: Noncash & nonoperating 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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