= == AMPLE Pap SOLUTIONS SAMPLE PAPER — 5 PART A (Accounting for Partnership Firms and Companies) 1, (A)7:2:3 Hint : Firm's Goodwill €4,80,000. Tilak brings in 71,20,000 as his share of ony 1 Oodwil, Hence, Tilak’s share of profit Sacrificing Ratio of Vasudha and Veena 2:1 Hence, Vasudha Sacrifices a1,222 Veena Sacrifices Vasudha’s New Share Veena’s New Share Tilak’s Share As such, new Profit Sharing Ratio 2. Ans. (A) Dr. Side of Realisation Account. OR Ans. (A) 3. Ans. (A) %1,00,000 4, Ans. (C) 71,09,000. 5. Ans. (D) Old Ratio of Xand ¥=7 : 5. OR ‘Ans. (C) 1:2 Hint: Boat’ Sacrifice : 5 1 me 2 Noise’s Sacrifice : + ~ 0 4 12 dor t:2 Hence, Sacrifice Ratio = 35 2 Ans, (C) It can be used for writing off capital losses. OR ad~— ‘Ans. (A) Redeemable equity shares. 7, Ans. (B) 90,000 ts Revalued value of Machinery : 1,80,000 x a = 150,000 Loss on Revaluation of Machinery : 1,80,000 — 1,50,000 = 30,000 Since Total Loss on Revaluation is %40,000, the reduction in the value of Furniture will be £10,000 (i.e., 40,000 ~ 30,000). Hence, Revalued value of Furniture will be 1,00,000 — 10,000 = %90,000. Hit Total Remuneration to Ruchi Less : Salary (%20,000 x 4) Commission Net Profit for the year before commission = 50,000 x = €5,50,000 Profit before charging salary and commission = 5,50,000 + 80,000 = %6,30,000 9, Ans. (B) %7,50,000 Hint: Amount to be raised via debt = $0,00,000 x 2 = %45,00,000 If debentures are issued at 10% discount, 90% of the face value will be received by the company. Since the company wants to raise 745,00,000 via debt, face value of debentures to be issued 100 = 45,00,000 x 4 %50,00,000 Loss on issue of debentures = Discount on issue of debentures + Premium on redemption. . aus Sy = (€50,00,000 x 755) + (%50,00,000 x 755) = €7,50,000 10. Ans. (C) %5,60,000 Hint : Total face value of debentures on which interest is payable : = %20,00,000 (opening balance) + €50,00,000 (Issued in the beginning of this year) = %70,00,000. Hence, interest on debentures for the year = €70,00,000 x 75; = €5,60,000 Interest is always payable on face value whether debentures are issued at discount or premium, 11. Ans. (A) Capital Accounts of Old Partners. 12, Ans. (C) 13/60 Hint: Share Surrendered by P= § Share Surrendered by Q R's Share17. OR Ans, (A) %5,00,000 Hin Ram's Capital after allowing interest on Capital = Closing Capital + Drawings + Divisible Pop ro = £6,00,000 + %85,000— 21,35,000 (2,25 m 000 3 = 5,50,000 3 1FOpening Capital = 100 then, Interest on Capital ‘= Capital after interest on Capital _$,50,000 199 Hence, opening capital ofRam = =""T1g™ = &5,00,000 . Ans. (B) Location of the Customers. |. Ans. (B) 40 per share Hint: Face Value €100~ Called up Face Value 760 Ans, (A) €30,00,000 Ans. (C) 6% Hint: z Premium Payable on redemption = 7,00,000 x 10% 70,000 Less : Amount debited to Statement of Profit & Loss A/e 28,000 Amount of Security premium received 42,000 . i = 42,000 100, +. Security premium(%) 700,000 =6% OR Ans. (D) 4% Hint: Security premium used to write off loss on issue = £1,25,000 — 75,000 = %1,20,000 (i) Calculation of Sacrificing Ratio : " al ‘ D's share is 4, out of which nth is given by B. feminine dam ofthat CL 8 | aes at This 20 share is sacrificied by A and C in the ratio of 2:1 Hence, 4’s Sacrifi ly ee rifice gx dade CsSacrifice — : > xdad wk Gacsifice Rasa of d, B ead <2 xe ek gp 2 or a2: and C 30° 10°30 % 20 or2:2:1 etltion of New Ratio @ Caleulat a = *29 7 20 = 20 he B +397 20> 20 pale C 339720 = 20 15 D420 New Ratio of 4, B, C and D = 345 ecg. 20' 39 * 29 3p 96:35:45 (Number of days from March 31 to June 12 = B. B’s share of Profit = 6,30,000 x Bx 2 = z42.009 (i) Gaining Ratio =New Ratio ~ Old Ratio 53 49. Ag “TR 4 s- BS “RB Gaining Ratio -4 82'S Copital Ave (42,000 x p Cs Capital Ave (42,000 x 3 ) ToB’s Capital Ave 's share of profit ‘upto the date of death adjusted into the Capital Aes of 4 and Cin their gaining ratio) ne ; ee Jet ON capitals i always calculated on opening capitals and the same have no Biven, first ofall, itis necessary to calculate the opening capitals : fs als as on 89» 98 31.03.2022 6.00009 eM Which has already been added) ke "0000 shared in the cc 0f3:2:119. Interest on Capital : A 5% on %2,00,000 = 10,000 B 5% on €1,75,000 = & 8,750 C 5% on 21,45,000 = & 7,250 a “Interest on Opening Capitals ‘Less : Interest on Drawings Balance (Cr) jivision of Firm’s loss of €20,700 in the | ratio of 3:2: 1 (Dr) TABLE SHOWING ADJUSTMENT (3.450 6,251 Adjusting Entry :— To B’s Capital A/c | To C’s Capital A/c (The adjustment on account of the omission of the interest on BES) i a: JOURNAL OF ZLTD. aes : Share Capital A/c Dr. 5,000; Securities Premium A/c Dr. 1,000 To Share Allotment A/c?) 2,600) To Share First and Final Call A/c 1,000 ‘To Share Forfeiture A/c 2,A0g (Forfeiture of 500 shares) : Bank Ale?) Dr. 1,560 Share Forfeiture A/c Dr 1,440 | ToShare Capital A/c 3,00) (Reissue of 300 shares) \acinesasllice 2 Working Notes : (1) Excess application money received 600 shares ~ 500 shares = 100 shares x 4 = 8400YS auple PAPER ? @ z ‘Amount due on Allotment = 500 shares x % = 3,000 Less: Excess received on application "400 ‘Allotment money not received 5600 ‘Amount forfeited on 500 shares = %2,400 Assuch, maximum discount on reissue of 300 shares can be : 200 x 300 = v1,440 Reissue Amount = 23,000 ~ %1,440 = 21,560 OR Nexon Ltd. EXTRACT OF BALANCE SHEET as at Notes to Accounts : 20, }| Share Capital | Authorised Capital : 1,00,000 Equity Shares of €10 each "| Issued Capital : 1,00,000 Equity Shares of 210 each _ | Subscribed and Fully Paid Capital : | 99,800 Equity Shares of 210 each Share forfeiture A/c : (200 shares x %6) JOURNAL -) Office Equipment (Computers) A/c | To Shruti’s Capital A/e To Premium for Goodwill A/c +] (Assets contributed by Shruti for her capital and her share =| of goodwill premium) [| Premium for Goodwill Ale | To Preeti’s Capital A/c To Niti’s Capital Ale =| (Goodwill premium transferred to the capital accounts of old partners in sacrificing ratio of |: 9)Working Notes : , 2 Shruti’s share of Goodwill = 6,40,000 x § = 1,60,000 Calculation of Sacrificing Ratio = o) (ii) 230 WHS 1 Preeti = 37g 40 40 3030 MRIS 9 Nii == 573 ~ 40 40 “Thus, Sacrificing Ratio= 1 <9 JOURNAL Profit & Loss Suspense A/c To Gita’s Capital Ale (Share of profit till the date of death) Gita's Capital A/e To Gita’s Executor’s A/c (Capital A’e transferred to Gita’s Executor’s Alc) Gita’s Executor’s A/e To Bank Ale | (Amount paid to Gita’s Executor) Working Note : _1,80,000 _ Ratio of Profit to Sales Te ag OO Interim Profit (From Ist April to 30th June 2022) : 30 1,20,000 x 755 = €36,000 Gita’s Share of Profit = 36,000 x 2. 214,400 In the Books of Kochi Fabrics Ltd. JOURNAL, | Bank Ave (9,000 x a To Share Application A/c (Application money received for 9,000 shares @ @1 per share) ‘Share Application A/c To Share Capital Ale (Share application money transferred to share capital account) Share Allotment A/e (9,000 x 2) ‘To Share Capital Ale |(Alloument money due @ 2 per share)Jon 100 shares nls (8.900% €2) + 200 7) Pee in-ATTEa Nic (100 x &2) en ‘Allotment A/c share a Callsin-Advance A/c (200 x 87) iver Gadore Tools Ltd. JOURNAL, -| Bank Ae ‘To Share Application A/c (Application money received) Share Application A/c To Share Capital A/c (Application money transferred to share capital) Dr. Dr. Dr. «money received on 8,900 shares and Calls-in-Advance ved on 200 shares @ €7 per share, allotment money in arrear being transferred to Calls in Arrears Account) Share Allotment A/c To Share Capital A/e To Securities Premium A/e (Allotment money due) Bank A/c To Share Allotment A/c (Allotment money received except for 1,000 shares) ‘Share First Call A/e To Share Capital A/c First call money due) Bank A/e _To Share First Call A/e | Girst call money received except on 1,500 shares) Dr. Share Final Call A/e | To Share Capital A/c | (Share final call due) {Bank A/e _To Share Final Call A/e Final call money received except on 1,800 shares) ‘Share Capital A/c (1,800 x €10) Securities Premium A/c To Share Allotment A/e To Share First Call A/c To Share Final Call Ale To Forfeited Shares A/c calls money) Dr. (Share finalcallduey Dr. |(Final call money received except on 1,800 shares) _1 Dr. Dr. {1800 shares forfeited due to non-payment of alloument and 1,00,000 1,00,000 5,00,000 4,95,000 3,00,000, 2,95,500 4,00,000 3,92,800 18,000 3,000 1,00,000) 2,00,000: 3,00,000 495,000) 3,00,000) 295,500} 4,00,000 3,92,800| 5,000] 4,500} 7,200) 4,300]162 HY Bank Alc (1,800 x €9) Fi “| Forfeited Shares A/c (1,800 x @1) Dr. To Share Capital le (Forfeited shares re-issued ata discount of 10%) Forfeited Shares Ale To Capital Reserve (Transfer of profit on re-issue) Dr. Solution to Alternate Q. 23 : Journal of Sukanya Ltd. Bank Ave “| To Equity Share Application and Allotment A/e (Application and allotment money received on 96,000 shares @ @14 per share) Equity Share Application and Allotment A/c To Equity Share Capital A/c (96,000 x 4) To Securities Premium A/c (96,000 x 10) (Application money adjusted) Equity Share First Call A/e To Equity Share Capital A/e (96,000 x %3) To Securities Premium A/c (96,000 x %5) (First call money due) _ [Bank Ale To Equity Share First Call A/c _ | (First call money received on 89,000 shares) [Equity Share Second and Final Call A/c To Equity Share Capital Ale To Securities Premium A/c (Second and final call money due) Bank Ale ‘Fo Equity Share Second and Final Call A/e (Second and final call money received on 84,000 shares) Equity Share Capital A/e (12,000 x 810) Dr. Securities Premium A/c {(7,000 x %10) + (5,000 x &5)] To Equity Share First Call Ale (7,000 x %8) Yo Equity Share Second and Final Call A/c (12,000 x %8)} Yo Forfeited Shares A/e |(7,000 x 4) + (5,000 x &7)] (7,000 shares forleited for non-payment of two calls and an shares forfeited for non-payment of second and final z 13,44,000| 7,68,000 7,12,000) 7,68,000 6,72,000 1,20,000) 95,000Dr. nik Ale ove Shares Ale a ‘To Equity Share Capital Ale reissue oF § 000 shares at 28 per share fully paid-up) S : - feited ; a Capital Reserve Mfc“ Transfer of gain on reissue of forfeited shares to Capital Reserve) ag Note: # Calelation of Gain on reissue of forfeited shares to be transferred to Capital Reserve : (Gal Amount forfeited on 7,000 shares of Rohit it 1,000 Amount forfeited on 1,000 shares of Namit (35,000 x 5,000 Less: Reissue discount (8,000 x %2) Gain on reissue to be transferred to Capital Reserve JOURNAL {Revaluation A/c To Stock A‘e | || To Provision for Doubtful Debts Ale To Outstanding Exp. A/c Decrease in the value of assets and increase in outstanding exp.) Building Ave To Revaluation A/c {Increase in the Value of building) Workanen Compensation Reserve Ale Revaluation Ale To Provision for Workmen Compensation Claim Ale (Shortt in the provision for claim charged to revaluation count) Revaluation Ave Toa's Cepital Ale T0B's Capital Ale TC's Capital A‘e Mranster og brofit on revaluation in old ratio of 2 : 2 : 1) (Note 1) 4 Oe ee ital Ale Dr Hs Capital Ale Dr. Dr. ae Adveitisement Suspense Ale “isement Suspense Account written off) : 28,000 7,000ioe ‘ment Sus- ee By Revaluation pense Alc : 00| Ale fo A’s Capital ; is By C’s Capital. Ale Ale ‘To B’s Capital Working Notes = Dr. \To Stock A/c By Building | Provision for Doubtful Debts Ac } | to Outstanding Exp. A/e To Provision for Workmen ‘Compensation Claim A/c ‘To Profit transferred to : | A’s Capital Ale [Bsc Ale f L Cs Capital Ale z Q)_ Value of Goodwill 1,20,000 Reserves 60,000 1,80,000 Old Ratio of 4, Band C 2: 2:1 New Ratio of 4, Band C1: 1:1 Sacrifice or Gain ia = 5 Sacrifice Lo rT Sacrifice 2 15 Gainunt PAPER = ~qaion to Alternate Q. 24 Cr. By Sundry Creditors A/c By Accrued Income A/c By Loss transferred to : X's Capital Ale Y's Capital Ale Bs Copital A’c Dr. PARTNER’S CAPITAL ACCOUNTS cr z = z To Profit & Loss [By Balance bid ‘Ale 15,000] 10,000} 5,000|By X's Capital |= “To Revaluation Ne ea | Ale (Loss) 21,000) 14,000} 7,000) (Goodwill) ars "To F's Capital By 2’s Capital | ale : a Ale Goodwill) | 20,000 20,000] (Goodwill) To Y's Loan Ale “To Balence cid | 2,64,000] 1,38,000 | 20,000 Working Notes : (1) Y's share of Goodwill = 1,20,000 x } = %40,000 X Gains = 1 6 1 6 u ZGains Gaining Ratio = Hence, X’s Capital A/c and 2°s Capital A/e will be debited by €20,000 each. 25, Dr. REVALUATION ACCOUNT cr.Working Note : Calculation of Hidden Goodwill : Total Capital of the firm on the basis of Charan’s Capital = 16,000 x T Less : Total Capital of Amit, Barun and Charan (%22,400 + 715,600 + 716,000) Value of Firm’s Goodwill Charan’s Share of Goodwill = 10,000 x + Sacrificing/Gaining Ratio = _ 16-10 ae Amit Sa 3p Saerifice a x i Barun = = = Gain 1 Chi 7 sy aran a aon > Gain Entry for Goodwill : Charan's Current A/e (10,000 x3 Barun’s Capital Al (10,000 000 39)26. JOURNAL OF TAPSI LTD. Bank A/c Dr. To Equity Share Application A/e (Application money received) Equity Share Application Ale De *| To Equity Share Capital A/c | Application money transferred to Share Capital A/e) Equity Share Allotment A/e Dr —| To Equity Share Capital A/c _| (Allotment due on 50,000 shares @ %5 per share) Bank A/c Dr. | Calls in Arrears Ave Dr, _| To Equity Share Allotment A/c (Allotment money received except on 200 shares @ €5 per = | share) -- | Equity Share First and Final Call Ale Dr. To Equity Share Capital A/c (Final call due on 50,000 shares @ €2 per share) [Bank Ale Dr. ‘| Calls in Arrears A/e Dr. To Equity Share First and Final Call A/e (Final call received except on 300 shares @ &2 per share) Equity Share Capital A/e Dr. To Calls in Arrears Ale To Share Forfeiture A/c (Forfeiture of 200 shares) Bank A/c Dr. Share Forfeiture A/c Dr. ‘To Equity Share Capital A/e issue of 140 shares at €7 per share) Re- -| Share Issue Exp. Ale Dr. ‘To Bank Ale (Expenses incurred on issue of shares) Statement of Profit and Loss A/e Dr. To Share Issue Exp. A/e (Share fssue exp, written of!) Securities Premium A/e Dr. z 1,50,000 249,000 1,000 | | \ 1,900,000, 99,400 600! 980 420 20,000 15,000 5.000,2k SAMPLE Papp eR Working Note : 5 (Only 200 shares willbe forfeited because allotment as well a8 cal money has not bog shares Selon Part B : Analysis of Financial Statements 27. Ans. (C) 70% Proprietary Ratio Sharcholder’s Funds ity Share Capital ~ Dr. Bal. of Stax 3,00,000 ~ 20,000 = 2,80,000 See Total Assets = Shareholder’s Funds + Debentures + Cu = 2,80,000 + 90,000 + 30,000 = 4,00,000 2,80,000, = 90% 100 = 70% HTENt Liabilities Proprietary Ratio 28. Ans. (C) 21% Hint : Cost of Revenue from Operations = 2,00,000 + 42,00,000 + §,20,000 + 60,099» me 240,009, = 47,40,000 Gross Profit = 60,00,000 — 47,40,000 = 12,60,000 12,60,000 i = 12,60,000_ =219 Gross Profit Ratio 50,00, 000" * 100 = 21% OR Ans. (B) Ignores Quantitative aspects. 29. Quick ratio will improve because current liabilities remain unchanged wheres tiguig assets are increased. z 30. Ans. (B) 780,000 OR (i) Acquisition of fixed asset by issue of debentures or shares. (ii) Conversion of debentures into shares.| AMPLE ek Se ae sees on ek ee a “Ja, Gross Profit is 20% on cost. Therefore goods costing %100 is sold for 2120, . . 00 Cost of Revenue from Operations = +55 x 6,00,000 = &5,00,000 Closing Inventory is 25% of Sales 25 Closing Inventory = F090 * 600,000 = %1,50,000 2 Opening Inventory = 3% 1,50,000 = 21,00,000 Opening Invent i ‘Average Inventory = SPRING Trventory + Closing Inventory 1,00. _ 1,0 000 +1.50.000 _ 24 95.099 ; Cost of Revenue from Operations : = Cost of Reve 2 Inventory Tumover Ratio Average Inventory 5,00,000 _ 4. 1,25,000 ~ 4 times, OR There will be equal increase in Purchases and Closing Inventory and hence! ‘ost of Revenue from Operations will remain unchanged, There will be equal decrease in Purchases and Closing Inventory and henee Cost of Revenue from Operations will remain unchanged. Gross Profit = 90,000 - %54,000 = $36,000 36,000 a ‘ c.000 * 100 = 40% "| Since the existing G.P. Ratio of the Company is 30%, it will increase. COMPARATIVE STATEMENT OF PROFIT & LOSS Jor the year ended 31st March 2022 and 2023 Revenue from Operationsay TL Less: Expenses: Cost of Mater (Revenne from Operations Jess Gross Profit) Other Expenses Total Expenses 640,000 Mi, Profit before Tax (T= Ul) 3,60,000 IV. Less: Tax 1,80,000 LX. roi ater Ta l=) 1.8000 a ‘Solution to Alternate Q. 3 COMMON SIZE STATEMENT OF PROFIT & Logs for the year ended 31st March, 2023 1. Revenue from Operations "11. Employee Benefit Expenses Other Expenses Total Expenses IV. Profit before Tax (I- Ill) 5 34. CALCULATION OF CASH FLOW FROM OPERATING ACTIVITIES for the year ending 31st March, 2022 Net Profit before tax (Note 1) ‘Adjustments for non-cash and non-operating items = Add: — Goodwill written off Depreciation on Plant Less; Profit on Sale of Plant Operating profit before working capital changes Add: — Decrease in Current Assets : Prepaid Expenses Increase in Current Liabilities : Outstanding Expenses Trade Payables Less; Increase in Current Assets : ‘Trade Receivables Net Cash from operating activities+: (1) Calculation of Net Profit before tax : “©” ‘Net Loss for the Current Year (50,000 — 40,000) (10,000) Transfer to General Reserve To Balance b/d “To Profit on Sale of Plant PLANT ACCOUNT (On Original Cost) )) By Bank Alc By Provision for Depreciation A/c | (Being the Depreciation on | | Plant Sold) 32,000] } —_| @ Dr. PROVISION FOR DEPRECIATION ON PLANT ACCOUNT Cr To Plant A/e (Being the transfer of Depreciation on Plant Sold) ‘To Balance c/d | | ~ | By Balance b/d. By Depreciation A/c (Balancing. Figure — Being the Current Year’s| Depreciation)