# 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 | 300 300 | By Share capital A/c | 300 300 |

**20. Goodwill = Average profit × Number of Year purchase = 40,000 × 2 = ₹80,000Working 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 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 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 | 200 900 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 paid-up) | 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 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:

- 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 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 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:

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

## 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 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: 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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