Set A Answer key

MARKING SCHEME
Q No PART -A Marks
(ACCOUNTING FOR PARTNERSHIP FIRMS AND COMPANIES)
1 (B) Rs. 960,000 OR (D) 2:1 1

2 (D) 30,000 OR (A) 1,20,000 1

3 (A) Deepa’s Capital A/c Dr . 10,000 1
To Frank’s Capital A/c 10,000
OR

(B) Ron’s Capital A/c Dr. 60,000

To Som’s Capital A/c 60,000
4 (B) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of 1
Assertion (A).

5 (B) X-2100,Y-840,Z-1260 OR (D)Rs. 1,800 1

6 (C)5000 1
7 (b) 8000 1
8 (A) NIL 1
9 (A) OLD PARTNER IN OLD RATIO 1
10 (A)37,500 1
11 (A) Vidit will be debited by Rs. 9600 1
12 (B) 6000 1
13 (A) 1/4 OR ( c) 2:2:3 1
14 (C)Assertion (A) is correct, but Reason (R) is incorrect 1
15 (A) 1,00,00,000 1
16 D) NOMINAL CAPITAL 1
17 Hemang's Capital A/c 30,0000 1.5+.5+
To Girdhar's Capital A/c 30,000 .5+.5=3
(Goodwill adjusted to capital account of gaining partner on change in profit sharing ratio)
Gaining share = New Share - Old Share....
Falak's gaining share 3/5-6/10 Nil ....
Hemang's gaining share 2/5-1/10-3/10 (Gain)..

18 Average profit = 3,00,000/4 = 75,000 1+1+1=

Capitalized Value of Average Profits = Average Profits x 100/ Normal Rate of rate =75,000 x 3
100/15 = 5,00,000
Goodwill Capitalized Value of Average Profit's - Net Tangible Assets Goodwill =5,00,000-
4,00,000 =₹ 1,00,000
19 3
i) Sundry Assets A/c Dr 10,00,000
To Sundry Liabilities A/c 1,00,000
To Amrit Ltd 8,00,000
To Capital Reserve A/c 1,00,000
(Business Purchased)
ii) Amrit Ltd A/c Dr 2,60,000
To Bank A/c 2,60,000
(Payment made)
iii) Amrit Ltd Dr 5,40,000
Discount on issue of Debentures A/c 60,000
Loss on issue of debenture 30,000
 To 12 % Debentures A/c 6,00,000
To premium on redemption 30,000

OR
Share capital 70000
To calls in arrear 20000
To forfeited shares A/c 50000

Bank A/c dr. 56000

Forfeited shares A/c Dr. 24000
To share capital A/c 80000

Forfeited shares A/c Dr. 16000

To capital Reserve A/c 16000

20 Option 1st – To get profit share in Proportion of Capital= 50000 X 45,000/1,80,000= 12,500. 3
Option 2nd- To get 6% interest on Capital = 45,000 X 6/100 X 6/12 = 1,350
Option 1st is more beneficial for P as he is getting more amount

Or
Neena's Capital A/c Dr. 250
Ojas's Capital A/c Dr. 500
To Meera's Capital A/c 750
(Omission of Interest on Drawings, now rectified)
Particular Meera Neena Ojas'

Dr cr dr cr dr cr

Interest on Drawings to be 3000 2500 2000

debited
Profits of 7,500 credited in 3750 2250 1500
ratio of5:3:2

Net Effect 750 250 500

21 Balance Sheet of Shringar Ltd. (An Extract) as at 4
particulars Note No. amount

1. EQUITY & LIABILITIES

Shareholders' Funds
Share Capital 1 1,80,000

Notes to Accounts
particulars amount
[Link] Capital
Authorized Capital
50,000 equity shares of 10 each 500000

Issued Capital
20,000 equity shares of 10 each 200000
 Subscribed Capital
Subscribed and fully paid up 1,40,000
14,000 equity shares of 10 each

Subscribed but not fully paid up

5,000 equity shares of @10 each 50,000
Less: Calls in arrears 5,000 x 2 (10,000) 40,000
1,80,000

22 Realization A/c 4
particulars amount particulars amount
To Sundry Assets By Sundry Liabilities
Building 2,00,000 Bank Loan 2,20,000
Machinery 1,40,000 Creditors 70,000 2,90,000
Furniture 80,000
Debtors 1,20,000 By Bank A/c
Stock 60,000 6,00,000 Building, Machinery &
Furniture 3,44,000
To Bank A/c (Bank loan) 2,20,000 Debtors 1,08,000
To Rohit's Capital A/c Stock 72,000 5,24,000
(Realization Expenses) 14,000 By loss transferred to
Partners' Capital A/c:
Sonia 12,000
Rohit 8,000 20,000

8,34,000 8,34,000
23 Paras’s capital a,/c 6
particulars amount particulars amount
To Paras's Executor's A/c 1,55,000 By Balance b/d 70,000
By General Reserve A/c 20,000
By Manu's Capital A/c
(goodwill) 5,000
By Naresh's Capital A/c
(goodwill) 5,000
By Profit &Loss Suspense A/c 48,000
By Interest on Capital A/c 7,000

1,55,000 1,55,000

Paras's Executor's A/c

particulars amount particulars amount
To Bank A/c 77,500 By Paras 's Capital A/c 1,55,000

To Paras's
Executor's Loan A/c 77,500
 1,55,000 1,55,000

24 Journal 6
DATE PARTICULARS L. AMOUN AMOUN
.F T T
2022 Bank A/c Dr. 22,50,000
April To Debenture Application and Allotment A/c 22,50,000
1 (Application money on 8% Debentures received)

2022 Debenture Application and Allotment A/c Dr. 22,50,000

April Discount on issue of Debentures A/c Dr. 2,50,000
1 To 8% Debentures A/c 25,00,000
(Debentures application money transferred to 8%
Debentures Account)

2023
March Securities Premium A/c Dr. 1,70,000
31 Statement of Profit and Loss Dr. 80,000
To Discount on issue of Debentures A/c 2,50,000
(Discount on issue of debentures written off)

Discount on issue of Debentures A/c

DATE PARTICULAR J AMOUN DATE PARTICULARS J AMOUNT
S F T F
2022 TO 8% 2,50,000 2023 By Securities 1,70,000
April 1 Debentures A/ March Premium A/c
31 By Statement of 80,000
Profit and Loss
2,50,000 2,50,000
25 Books of Diamond Ltd 6
JOURNAL
DATE PARTICULARS L..F AMOUNT AMOUNT
Bank A/c Dr. 1,80,000
To Share Application A/c 1,80,000
(Application money received on 45,000
shares))

Share Application A/c. Dr. 1,80,000

To Share Capital A/c 80,000
To Share Allotment A/c 80,000
To Calls in Advance A/c 20,000

(Application money transferred to Share

capital A/c, excess money received adjusted
towards allotment and call)
Share Allotment A/c Dr. 80,000
To Share Capital A/c 80,000
Amount due on allotment)
Bank A/c Dr.
To Share Allotment A/c
(Amount received on Allotment) ------

Share First and Final Call A/c Dr.

To Share Capital A/c 40000
(Amount due on 20,000 shares on First and 40000
Final Call)

Bank A/c Dr.

Calls in Arrears A/c Dr. 19000
Calls in Advance A/c Dr. 1000
To Share First and Final Call A/c 20000
(Amount received on First and Final Call) 40000
Alternatively
Bank A/c Dr.
Calls in Advance A/c Dr. 19000
To Share First and Final Call A/c 20000
(Amount received on First and Final Call) 39000

Share Capital A/c Dr.

To Calls in Arrears A/c 5000
To Forfeited Shares A/c 1000
(Forfeiture of 500 shares for non- payment 4000
of call money)

Alternatively

Share Capital A/cDr.

To Share First & Final Call A/c 5000
To Forfeited Shares A/c 1000
(Forfeiture of 500 shares for non- payment 4000
of call money)

Bank A/c Dr. 1000

Forfeited Shares A/c Dr. 4000
To Share Capital A/c
5000
(Shares re-issued @2 per share as fully paid
up)

Forfeited Shares A/c Dr

To Capital Reserve A/c ------
(Gain on re-issue of shares transferred to -------
capital reserve)
OR
AMOUNT RECEIVED
APPLICATION – 3,00,000
ALLOTEMENT-98000
 RE-ISSUED ON SHARES-5600
CAPITAL RESERVE- 5200
1. Bank A/c Dr 3,00,000
To Share Application A/c 3,00,000
2. Share Application A/c Dr 3,00,000
To Share Capital A/c 2,00,000
To Share Allotment A/c 1,00,000
3. Share Allotment A/c Dr 2,00,000
To Share Capital A/c 1,60,000
To Securities Premium A/c 40,000
4. Bank A/c Dr 98,000
Calls in Arrears A/c Dr 2,000
To Share Allotment A/c 1,00,000
5. Share Capital A/c Dr 6400
Securities Premium A/c Dr 1600
To Calls in Arrears A/c 2,000
To Share Forfeiture A/c 6,000
[Link] A/c Dr 5,600
Share Forfeiture A/c Dr 800
To Share Capital A/c 6,400
7. Share Forfeiture A/c Dr 5,200
To Capital Reserve A/c 5,200

26 Revaluation A/c 6
Rs.
To provision 1600 By plant & 6600
Machinery
To profit 5000
Partner’s capital A/c
A V M A V M
To 1,92000 112,000 76000 By balance 144000 80,000
Balance b/d
c/d
By general 30,000 20,000
reserve
By 3000 2000
investment
flu. reserve
By 12000 8000
premium
for
goodwill
By bank 76,000
A/c
By 3000 2000
revaluation
OR

Journal Entries on Retirement of Trisha

 1. For decrease in value of Fixed Assets

Revaluation A/c Dr 80,000

To Fixed Assets A/c 80,000

2. For stock taken over by Trisha

Trisha’s Capital A/c Dr 80,000

Revaluation A/c Dr 20,000
To Stock A/c 1,00,000

3. For loss on revaluation

Trisha’s Capital A/c Dr 41667

Urvi’s Capital A/c Dr 33,333
Varsha’s Capital A/c Dr 25,000
To Revaluation A/c 1,00,000

4. For distribution of General Reserve

General Reserve A/c Dr 1,50,000

To Trisha’s Capital A/c 62,500
To Urvi’s Capital A/c 50,000
To Varsha’s Capital A/c 37,500

5. For adjustment of goodwill

Urvi’s Capital A/c Dr 6,667

Varsha’s Capital A/c Dr 35,000
To Trisha’s Capital A/c 41,667

7. For payment made to Trisha

Trisha’s Capital A/c Dr 50,000

To Bank A/c 50,000

8. For transfer of balance to Trisha’s Loan Account

Trisha’s Capital A/c Dr 1,82,500

To Trisha’s Loan A/c 1,82,500

Partner Old Share New Share Sacrifice

Urvi 20/60 24/60 –4/60 (gain)
Varsha 15/60 36/60 –21/60 (gain)
Gaining Ratio = Urvi : Varsha = 4 : 21
PART –B (FINANCIAL STATEMENT ANALYSIS)

27 (D)Cash inflow of ₹ 50,00,000 from investing activities 1

OR
 (A)Operating activities
28 (B)Sold inventory on credit 50,000 1
29 (A)Payment to creditors 1
30 © It ascertains the relative importance of different components of the financial position of the 1
firm.
OR
(B) Turnover ratios

31 ITEMS MAJOR HEAD SUB HEAD 3

A Losse Tools Current Assets Inventories
B Unpaid dividend Current liabilities Other current liabilities

C Copyrights and patent Non-Current Assets PPE(Intangible)

D Land and building Non current assets PPE(Tangible)

E Outstanding salaries Current liabilities Other current liabilities

F Capital advances Non current Assets Long term loans and advances

33 Opening Inventory 10,00,000 4

Closing Inventory =Opening inventory +2x Opening inventory

==10,00,000 +20,00,000
=30,000,000
Average Inventory= Opening inventory+ Closing Inventory
10.00.000+30.00.000/2
=20,00,000.

Gross Profit 25% of Revenue from operations

80,00.000 x 25/100
=20,00,000
Cost of Revenue from Operations =Revenue from Operations- Gross Profit
=80,00,000-20,00,000
=60,00,000
Inventory turnover Ratio = Cost of Revenue from Operations/ Average Inventory
=60,00,000/20,00,000
=3 Times
OR
Net profit after interest and tax= Rs. 44,000
Tax paid = Rs. 44,000
Net Profit before tax= Rs. 88,000
Net Profit before interest & Tax= 88000 +12000=Rs. 1,00,000
Capital employed=Rs, 4,00,000
ROI= 1,00,000/4,00,000 x100= 25 %
32 Common Size Balance Sheet of Moonlight Ltd. as at 31.3.2022 and 31.3.2023 3
Particulars Note Absolute Absolute % of Balance % of Balance
No. Amount Amount Sheet Total Sheet Total
31.3.2022 31.3.2023 31.3.2022 31.3.2023

I. Equity and Liabilities:

1. Shareholders' Funds
(a) Share Capital 500000 1200000 50 60
2. Non-current liabilities
(a) Long term borrowings 300000 200000 30 10
 3. Current Liabilities
(a) Trade Payables 200000 600000 20 30

TOTAL 10,00,000 20,00,000 100 100

II. Assets:
[Link]-current Assets 7,00,000 14,00,000 70 70
(a) Fixed Assets/Property,
Plant and Equipment and
Intangible Assets
[Link] Assets
(a) Trade Receivables
(b) Inventories 2,50,000 4,00,000 25 20
50,000 2,00,000 5 10

TOTAL 10,00,000 20,00,000 100 100

OR
Comparative Statement of Profit and Loss of Account Ltd. for the year ended 31.3.2023
Particulars Note 2021-22 .2022-23 Absolute % Increase/
No. Increase/Dec Decrease
rease
I. Revenue from Operations 20,00,000 25,00,000 5,00,000 25
II. EXPENSES
Employee benefit expenses 4,00,000 5,00,000 1,00,000 25
Other expenses 2,00,000 2,50,000 50,000 25
TOTAL EXPENSES 6,00,000 7,50,000 1,50,000 25
III. Profit before Tax (I-II) 14,00,000 17,00,000 3,50,000 25
IV. Less: Tax @50% 8,75,000 1,75,000 25
7,00,000
V. Profit after Tax (III-IV) 7,00,000 8,75,000 1,75,000 25

34 6
Cash flow from Investing Activities
Particulars Amount Amount

Purchase of goodwill (2,00,000)

Proceeds from sale of patents 1,20,000
Proceeds from sale of machinery 50,000
Purchase of machinery (4,40,000)
Purchase of 10% investments (1,80,000)
Proceeds from sale of 10% investments 1,00,000
Interest received on 10% investments 6,000

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

Machinery A/C
Particulars Amount Particulars Amount

To Balance b/d 10,20,000 By Depreciation A/c 1,40,000

To Bank/Cash A/c 4,40,000 By Bank/Cash A/c 50,000
By Statement of Profit and Loss 30,000
(Bal. Fig.) By Balance c/d 12,40,000
14,50,000 14,50,000
 10 % INVESTMENT A/C
Particulars Amount Particulars Amount

To Balance b/d 60,000 By Bank/Cash A/c 1,00,000

By Statement of Profit 20,000 By Balance c/d(Bal. Fig.) 1,60,000
and Loss
To Bank/Cash A/c 1,80,000

(Bal. Fig.)
2,60,000 2,60,000