Solution

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Class 12 - Accountancy
Part A:- Accounting for Partnership Firms and Companies
1.
(b) 3 : 2
Explanation:
3:2

OR

(d) A is false but R is true.

Explanation:
Assertion is false because existing goodwill written off in old profit sharing ratio and premium for
goodwill distributed in sacrificing ratio.

2.
(c) A is true but R is false.
Explanation:
Assertion (A) is correct, but Reason (R) is incorrect.

3.
(b) Over subscription
Explanation:
Over subscription

OR
(a) 14,000
Explanation:
14,000
4.
(b) Old profit sharing ratio
Explanation:
Old profit sharing ratio

OR

(b) Interest on Drawings account

Explanation:
Interest on Drawings account

5.
(c) ₹ 4,800
Explanation:
₹4,800

6. (a) ₹ 1,00,000
Explanation:
₹ 1,00,000

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 7.
(d) ₹ 6
Explanation:
₹6
Share capital account debited with called up amount = ₹ 10 - 4 = ₹ 6

8. (a) Profit and Loss Suspense Account will be debited by ₹ 90,000 and Khan's Capital Account will be
credited by ₹ 90,000.
Explanation:
Profit and Loss Suspense Account will be debited by ₹90,000 and Khan’s Capital Account will be
credited by ₹90,000.
OR

(d) ₹ 8,000
Explanation:
₹ 8,000

9.
(c) 6 12 months
Explanation:
time left after first Drawing+Time left after last Drawing
Average Period =
2

=
12+1

= 6 2 months
1

10.
(c) ₹ 60
Explanation:
Re- issue price not be less than the amount unpaid on forfeited shares

OR
(a) ₹ 30, 000
Explanation:
₹30,000
11.
(b) ₹ 15,000
Explanation:
₹ 15,000

12. (b) ₹ 50,000

Explanation:
₹ 50,000
13. (b) ₹ 30,000
Explanation:
₹ 30,000
14. (a) ₹ 80,000
Explanation:
₹ 80,000
15. (a) 1 : 1 : 3
Explanation:

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 1:1:3
New profit sharing ratio = 1 : 1: 3
Monu :- 2 − 1 = 1
5 5 5

Sonu :-
3 2 1
− =
5 5 5

Ram :-
3

16.
(b) Partners' Capital Accounts
Explanation:
Partners' Capital Accounts

17. i. Profit & Loss Appropriation A/c

for the year ended 31st March, 2024
Dr. Cr.
Particulars Amount ₹ Particulars Amount ₹
Interest on Capital: P & L A/c (Net Profit) 14,000
Suman 6,000
Lata 8,000 14,000
14,000 14,000
ii. Profit & Loss Appropriation A/c
for the year ended 31st March, 2024
Dr. Cr.
Particulars Amount ₹ Particulars Amount ₹
Interest on Capital: P & L A/c (Net Profit) 60,000
Suman 12,000
Lata 16,000 28,000
Profit transferred to capital accounts:
Suman 19,200
Lata 12,800 32,000
60,000 60,000
OR
JOURNAL
Date Particulars L.F. Dr. (₹) Cr. (₹)
2023
March 31 Interest on Capital A/c Dr. 12,600
To A's Current A/c 5,400
To B's Current A/c 7,200
(Interest on capital credited to Partners' Current Accounts)
Profit & Loss Appropriation A/c Dr. 12,600
To interest on Capital A/c 12,600
(Interest on capital transferred to Profit & Loss Appropriation Account)

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 Working Notes:
Interest on Capital:
A = 12% of ₹ 60,000 = ₹ 7,200
B = 12% of ₹ 80,000 = ₹ 9,600
Total interest = ₹ 16,800
Since profits are insufficient interest on capital will be distributed in the ratio of ₹ 7,200 : ₹ 9,600 or 3 : 4.
Thus, Interest on Capital allowed to:
A = 7 of ₹ 12,600 = ₹ 5,400; and B = 7 of ₹ 12,600 = ₹ 7,200
3 4

18. Books of Soham, Ashish, Vishesh and Rashi

Journal
Dr. Cr.
Date Particulars L.F.
Amount ₹ Amount ₹
2023 April
General Reserve A/c Dr. 80,000
1
To Soham’s Capital A/c 32,000
To Ashish’s Capital A/c 24,000
To Vishesh’s Capital A/c 16,000
To Rashi’s Capital A/c 8,000
(Distribution of General Reserve in old profit-sharing ratio)
2023 April
Rashi’s Capital A/c Dr. 50,000
1
To Ashish’s Capital A/c 50,000
(Adjustment for Goodwill on account of change in profit
sharing ratio)
Working notes:
Calculation of gain/sacrifice
Gaining Share = New share - Old share
Soham = 5 − 10 = Nil
2 4

Ashish = (Sacrifice)
1 3 −1
− =
5 10 10

Vishesh = 1
−
2
= Nil
5 10

Rashi = (Gain)
1 1 1
− =
5 10 10

19. In the books of Sunrise Ltd.

JOURNAL
Dr. Cr.
Date Particulars L.F. Amount Amount
(₹) (₹)
Sundry Assets A/c Dr. 3,60,000
Goodwill A/c Dr. 2,20,000
To Creditors A/c 1,00,000
To Moonlight Ltd. 4,80,000
(Assets acquired and liabilities taken over from Moonlight Ltd)
Moonlight Ltd. Dr. 4,80,000
Discount on Issue of Debentures A/c Dr. 20,000
To 9% Debentures A/c 5,00,000

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 (Purchase consideration settled by issuing 5,000 9% debentures at
4% discount)
Working Note:
(P urchase Consideration) 4,80,000
No. of debentures = = 96
= 5,000
Issue P rice

20. Calculation of Normal Adjusted Profit

Year Profit (₹) Adjustment (₹) Adjusted Profit (₹)
2019-20 20,000 - 20,000
2020-21 30,000 - 30,000
2021-22 27,000 - 27,000
2022-23 35,000 4,000 39,000
TOTAL 1,16,000
(T otal Adjusted P rof it)
Average Profit =
N o. of years

= ₹ 29,000
1,16,000
=
4

Normal Rate of Return

Normal Profit = Capital Employed ×
100

= ₹ 20,000
10
= 2, 00, 000 ×
100

Super Profit = Average Profit - Normal Profit

= 29,000 - 20,000 = ₹ 9,000
Goodwill = Super Profit × No. of years’ purchase
= 9,000 × 2 = ₹ 18,000

21. Calculation of Amount Received on Allotment: ₹

Allotment money due on 40,000 shares @ ₹ 50 per share 20,00,000
Add: Call money received in advance on 50 shares @ ₹ 20 per share 1,000
Amount received on allotment 20,01,000

22. Date Particulars L.F. Dr. (₹) Cr. (₹)

(a) Realisation A/c Dr. 15,000
To Sharma's Capital A/c 15,000
(Remuneration paid to Sharma)
(b) Realisation A/c Dr. 5,000
To Bank A/c 5,000
(Realisation expenses paid)
(c) Realisation A/c Dr. 2,84,000
To Bank A/c 2,84,000
(Paid realised amount to creditors)
(d) Jain's Capital A/c Dr. 4,500
Sharma's Capital A/c Dr. 9,000
Verma's Capital A/c Dr. 4,500
To Realisation A/c 18,000
(Realisation Loss distributed between partners)

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23. In the Books of X Ltd.
JOURNAL
Date Particulars L.F. Dr. (₹) Cr. (₹)
Bank A/c Dr. 1,44,800
To Equity Share Application A/c
(Application money received on 70,000 shares @ ₹ 2 per share, one 1,44,800
applicant paying the full amount on 600 share)

Equity Shares Application A/c Dr. 1,44,800

To Equity Shares Capital A/c (50,000 × ₹ 2) 1,00,000
To Equity Share Allotment A/c [(₹ 19,800 + (500 × ₹ 2)] 20,800
To Bank A/c (₹ 20,000 + ₹ 1,000) 21,000
To Calls-in-Advance A/c (500 × ₹ 6)
3,000
(Application money adjusted and surplus refunded)

Equity Share Allotment A/c (50,000 × ₹ 2) Dr. 1,00,000

To Equity Share Capital A/c
1,00,000
(Allotment money due on 50,000 shares @ ₹ 2 per share)

Bank A/c Dr. 71,200

Calls-in-Arrears A/c Dr. 8,000
To Equity Share Allotment A/c (₹ 1,00,000 - ₹ 20,800)
79,200
(Allotment money received except on 5,000 shares)

Equity Share Capital A/c (5,000 × ₹ 4) Dr. 20,000

To Forfeiture Share A/c (6,000 × ₹ 2) 12,000
To Calls-in-Arrears A/c
(5,000 shares, ₹ 4 paid forfeited for non-payment of allotment 8,000
money)

Bank A/c Dr. 20,000

To Equity Share Capital A/c
20,000
(5,000 shares forfeited reissued for ₹ 20,000; ₹ 4 per share paid-up)

Share Forfeiture A/c Dr. 12,000

To Capital Reserve A/c
12,000
(Gain on reissue transferred to Capital Reserve)

Equity Shares First Call A/c (50,000 × ₹ 3) Dr. 1,50,000

To Equity Shares Capital A/c
1,50,000
(First call money due on 50,000 shares @ ₹ 3 per share)

Bank A/c Dr. 1,48,500

Calls-in-Advance A/c Dr. 1,500
To Equity Shares First Call A/c
1,50,000
(First call money received, advance received earlier adjusted)

Equity Share Second and Final Call A/c Dr. 1,50,000

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 To Equity Share Capital A/c 1,50,000
(Second and final call money due on 50,000 shares @ ₹ 3 per share)

Bank A/c Dr. 1,48,500

Calls-in-Advance A/c Dr. 1,500
To Equity Share Second and Final Call A/c
Second and final call money received and advance received earlier 1,50,000
adjusted)

Working Notes:

1. Analysis of Receipt of Application Money

Shares
Shares Excess Adjusted on Second
Category Applied First Call Refund
Allotted Money Allotment Call
For
10,000 × ₹ 2 ₹
1. 10,000 Nil ____ ____ ____
= ₹ 20,000 20,000
9,900 × ₹ 2 =
2. 59,400* 49,500 ₹ 19,800 ____ ____ ____
₹ 19,800

100 ×₹ 2 500 × ₹ 2 = ₹ 500 × ₹ 3 500 × ₹ 3 = ₹

3. 600 500
= ₹ 200 1,000 = ₹ 1,500 ₹ 1,500 1,000*
₹ 3,000 (Calls-in- ₹
Total 70,000 50,000 ____ ₹ 20,800
Advance) 21,000
*The applicant for 600 shares (who was allotted 500 shares) has been refunded application money
(including Calls-in-Advance) for 100 shares, i.e., ₹ 6,000 - ₹ 5,000 = ₹ 1,000.
50,000 shares have been allotted to applicants for 60,000 shares. This includes an applicant for 600
shares who was allotted 500 shares. Hence, applicants for 59,400 {i.e., 60,000 - 600) shares were
allotted 49,500 (i.e., 50,000 - 500) shares.
2. Calculation of allotment money not paid by Govind:
(a) No. of shares allotted to Govind = = 5,000 shares.
50,000
× 6, 000
60,000

₹
(b) Application money received on shares applied (6,000 × ₹ 2) 12,000
Less: Application money due on shares allotted (5,000 × ₹ 2) (10,000)
Excess application money adjusted on allotment 2,000
(c) Allotment money due on shares allotted (5,000 × 2) 10,000
Less: Excess application money adjusted (b) (2,000)
Allotment money due on allotment but not paid by Govind 8,000
(5) Total amount due on allotment: 50,000 x ₹ 2 = ₹1,00,000
Less : Excess received on application (10,000 x ₹ 2) = ₹ 20,000
Less : Excess received from Gaurav to be adjusted on allotment ₹ 800
20,800
79,200
Less : Not received on allotment (8,000)
Net amount received on allotment in Cash 71,200
24. In the books of Gita and Garv
Dr. Revaluation A/c Cr.

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Particulars Amount (₹) Particulars Amount (₹)
By Stock A/c 16,000
By Building A/c 1,00,000
By Investments A/c 4,000
To Profit on revaluation transfer to:
Gita’s Capital A/c 36,000
Radha’s Capital A/c 60,000
Garv’s Capital A/c 24,000 1,20,000
1,20,000 1,20,000
Partner’s Capital A/c
Dr. Cr.
Radha Radha
Particulars Gita (₹) Garv (₹) Particulars Gita (₹) Garv (₹)
(₹) (₹)
To Radha’s Capital
90,000 60,000 By balance b/d 3,00,000 2,00,000 1,00,000
A/c
To Radha’s Loan A/c 4,30,000 By Gita’s Capital A/c 90,000
To balance c/d 3,00,000 2,00,000 By Garv’s Capital A/c 60,000
By General Reserve
12,000 20,000 8,000
A/c
By Revaluation A/c 36,000 60,000 24,000
By Current A/c 42,000 1,28,000
3,90,000 4,30,000 2,60,000 3,90,000 4,30,000 2,60,000
Working Notes:
i. Calculation of Radha’s Share of Goodwill on her retirement
Goodwill of the firm on retirement = ₹ 3,00,000

Radha’s Share of Goodwill of firm = ₹ (3,00,000× 10 ) = ₹ 1,50,000

5

Gaining ratio will be the same as the new profit-sharing ratio i.e. 3: 2
ii. Adjustment of Capital of partners
Total Capital of the new firm after retirement = ₹ 5,00,000

Gita’s New Capital = ₹ (5,00,000 × ) = ₹ 3,00,000

3

Garv’s New Capital = ₹ (5,00,000 × 5 ) = ₹ 2,00,000

2

Existing Capitals of Gita and Garv are ₹ 2,58,000 and ₹ 72,000

Amount to be debited to Gita’s Current A/c = New Capital – Old Capital
= ₹ ( 3,00,000 – 2,58,000) = ₹ 42,000
Amount to be debited to Garv’s Current A/c = New Capital – Old Capital
= ₹ ( 2,00,000 – 72,000) = ₹ 1,28,000
Balance Sheet as at 31st March 2019
Liabilities Amount (₹) Assets Amount (₹)
Sundry Creditors 60,000 Stock 96,000
Radha’s Loan A/c 4,30,000 Building 6,00,000

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 Capital A/c's of partner Debtors 40,000
Gita 3,00,000 Current A/c's of partner
Garv 2,00,000 5,00,000 Gita 42,000
Garv 1,28,000 1,70,000
Cash 84,000
(50,000 + 34,000)
9,90,000 9,90,000
25. Revaluation Account
Particulars Amount Particulars Amount
₹ ₹
To Provision for doubtful debts A/c 2,000 By Stock 10,000
To Workmen's compensation claim A/c 10,000 By Cash/ Bad Debts Recovered 15,000
To Profit transferred to: By Creditors 27,000
Madhuri’s Capital A/c 30,000
Arsh’s Capital A/c 10,000 40,000
52,000 52,000
Partners Capital Accounts
Particulars Madhuri Arsh Jyoti Particulars Madhuri Arsh Jyoti
₹ ₹ ₹ ₹ ₹ ₹
To Investments
22,000 By Balance b/d 3,00,000 2,00,000 ____
A/c
By Premium for
To Balance c/d 3,60,000 1,98,000 30,000 10,000 ____
goodwill A/c
By Revaluation A/c 30,000 10,000 ____
3,60,000 2,20,000 3,60,000 2,20,000
To Balance c/d 3,60,000 1,98,000 1,86,000 By Balance b/d 3,60,000 1,98,000 ____

By Bank A/c(2) 1,86,000

3,60,000 1,98,000 1,86,000 3,60,000 1,98,000 1,86,000

Balance Sheet of Madhuri, Arsh and Jyoti
as on 31st March 2022
Liabilities (₹) Assets (₹)
Capitals: Machinery 4,70,000
Madhuri 3,60,000 Investments 88,000
Arsh 1,98,000 Debtors 1,20,000
Jyoti 1,86,000 7,44,000 Less: Provision for doubtful debts (12,000) 1,08,000
Workmen’s compensation claim 70,000 Stock 1,50,000

Creditors 1,63,000 Cash and Bank(3) 2,71,000

Employees Provident Fund 1,10,000

10,87,000 10,87,000

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Working Notes:
i. Entries for Bad Debts recovered :
Bank A/c Dr. 15,000
To Bad Debts recovered A/c 15,000

Bad Debts recovered A/c Dr. 15,000

To Revaluation A/c 15,000
There will be no effect of the bad debts recovered on the amount of debtors appearing in the
balance sheet.
ii. Total Capital of Madhuri and Arsh after adjustment = ₹ 3,60,000 + ₹ 1,98,000 = ₹ 5,58,000
Jyoti is given 14 th share of profits.
Thus, for th share of profits the Capital = ₹ 5,58,000
3

Total Capital of the Firm = 5,58,000 × = ₹ 7,44,000

4

Jyoti's Capital for th Share = 7,44,000 × = ₹ 1,86,000

1 1

4 4

Cash & Cash Balance = 30,000 + 15,000 (Bad Debts Recovered)

+ 1,86,000 + 40,000 = ₹ 2,71,000
OR
Revaluation Account
Particulars ₹ Particulars ₹
To Provision for Doubtful Debts 7,000 By Plant and Machinery 20,000
To Furniture 3,000
To Profit transferred:
Akul 4,000
Bakul 4,000
Chandan 2,000 10,000
20,000 20,000
Capital Accounts
Particulars Akul Bakul Chandan Particulars Akul Bakul Chandan
₹ ₹ ₹ ₹ ₹ ₹
To Bakul Capital
80,000 40,000 By Balance b/d 1,60,000 1,20,000 92,000
A/c
To Bakul loan A/c 2,52,000 By General Reserve 8,000 8,000 4,000
To Balance c/d 92,000 58,000 By Revaluation A/c 4,000 4,000 2,000
By Akul Capital A/c 80,000
By Chandan Capital
40,000
A/c
1,72,000 2,52,000 98,000 1,72,000 2,52,000 98,000
To Bank A/c 8,000 By Balance b/d 92,000 58,000
To Balance c/d 1,00,000 50,000 By Bank A/c 8,000
1,00,000 58,000 1,00,000 58,000
Balance Sheet
as at 31st March 2023
Liabilities Amount (₹) Assets Amount (₹)

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 Sundry Creditors 45,000 Cash at bank 42,000
Employees Provident Fund 13,000 Debtors 60,000
Bakul's Loan 2,52,000 Less: Provision for Doubtful Debts (9,000) 51,000
Capital Accounts: Stock 80,000
Akul 1,00,000 Furniture 87,000
Chandan 50,000 1,50,000 Plant and Machinery 2,00,000
4,60,000 4,60,000
Total capital of Akul and Chandan after Bakul's retirement:-
= ₹ 92,000 + ₹ 58,000
= ₹ 1,50,000
distributed in new ratio after Bakul retirement in 2 : 1.
26. Journal of X Ltd.
Date Particulars L.F. Dr. (₹) Cr. (₹)
(i) Bank A/c Dr. 1,60,000
To Bank Loan A/c 1,60,000
(Loan taken from SBI)

Debenture Suspense A/c Dr. 2,00,000

To 12% Debentures A/c 2,00,000
(12% Debentures issued in favour of SBI as a collateral security)

(ii) Bank A/c Dr. 1,10,000

To Debenture Application and Allotment A/c 1,10,000
(Application money received on 1,000 12% Debentures)

Debenture Application and Allotment A/c Dr. 1,10,000

Loss on issue of Debentures A/c Dr. 5,000
To 12% Debentures A/c 1,00,000
To Securities Premium Reserve A/c 10,000
To Premium on redemption of debentures A/c 5,000
(Allotment of 12% debentures at a premium, redeemable at a premium)

(iii) Machinery A/c Dr. 4,60,000

To Beta Ltd. A/c 4,60,000
(Machinery purchased on credit)

Beta Ltd. Dr. 4,60,000

To 9% Debentures A/c 4,00,000
To Securities Premium Reserve A/c 60,000
(Purchase consideration discharged by issuing 9% Debentures at a
premium)
OR
a. Books of Ahilaan Ltd.
JOURNAL

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 Date Particulars L.F. Dr. (₹) Cr. (₹)
2022 April
(i) Bank A/c Dr. 10,70,000
1
To Debenture Application & Allotment A/c 10,70,000
(Application money received on 10,000, 7% Debentures)
April 1 (ii) Debenture Application & Allotment A/c Dr. 10,70,000
Loss on issue of Debentures A/c Dr 30,000
To 7% Debentures A/c 10,00,000
To Securities premium A/c 70,000
To Premium on redemption of Debentures A/c 30,000
(Debentures issued at 6% premium, redeemable at 4%
premium on redemption)
2023
(iii) Securities Premium A/c Dr. 20,000
March 31
Statement of profit and loss A/c Dr. 10,000
To Loss on Issue of Debentures A/c 30,000
(Loss on issue of debentures written off)
b. Loss on Issue of Debentures A/c
Dr Cr
Amount Amount
Date Particulars Date Particulars
₹ ₹
To Premium on Redemption of By Securities Premium
1.4.22 30,000 31.3.23 20,000
Debentures A/c A/c
By statement of profit
31.3.23 10,000
and loss
30,000 30,000
Part B :- Analysis of Financial Statements
27. (a) Capital Advances
Explanation:
Capital Advances
28.
(b) Ratio Analysis
Explanation:
Study of relationship between various items is known as Ratio Analysis. It is represented by a
percentage.

OR

(d) Preliminary Expense

Explanation:
The expenses incurred when a company is formed and before the start of any business operations
are termed as preliminary expenses, they are a good example of fictitious assets which are written off
every year from the profits earned by the business. Preliminary expenses include Legal cost,

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 Professional fees, Stamp duty, Printing fees, Registration cost of the company. Preliminary expenses
are shown on the Assets side of the balance sheet of a Company.

29.
(c) Cash withdrawn from the bank ₹ 7,000
Explanation:
Cash withdrawn from the bank ₹ 7,000

OR

(b) Financing Activities

Explanation:
Financing Activities

30. (a) Cash receipts from sale of goods ₹ 94,000

Explanation:
Cash receipts from sale of goods ₹ 94,000
Net profit before interest and tax
31. i. Return on Investment = × 100
Capital Employed
Net profit before interest and tax = Net profit after interest and tax + tax + interest
₹6,00,000
= 1−0.4
+ ₹ 60,000
= ₹ 10,60,000
Capital Employed = ₹ 20,00,000
₹10,60,000
Return on Investment (Return on Capital Employed) = × 100
₹20,00,000
= 53%
ii. Debt Equity Ratio =
Debt

Equity

Equity = Capital Employed - Debt

= ₹ 20,00,000 - ₹ 10,00,000
= ₹ 10,00,000
₹10,00,000
Debt Equity Ratio =
₹10,00,000
=1:1
OR
Revenue from Operations
Working Capital Turnover Ratio =
Working Capital
₹24,00,000
= = 4 Times.
₹6,00,000
Calculation of Cost of Revenue from Operations:
Let Cost of Revenue from Operations be ₹ 100; Gross Profit will be ₹ 20
When Gross Profit is ₹ 20; Cost of Revenue from Operations ₹ 100
When Gross Profit is ₹ 4,00,000; Cost of Revenue from Operations = ₹ 4,00,000 × = ₹ 20,00,000
100

20

Revenue from Operations = Cost of Revenue from Operations + Gross Profit

= ₹ 20,00,000 + ₹ 4,00,000 = ₹ 24,00,000.
Working Capital = Current Assets - Current Liabilities
= ₹ 12,00,000 - ₹ 6,00,000 = ₹ 6,00,000.
32. The balance sheet prepared and items are allocated as per schedule 3 of the company's act , 2013 in
order to bring uniformity.
Items Major Heads
(i) Provision for Tax Current Liabilities - short term provisions
(ii) Loans Payable on Demand Current Liabilities - other current liabilities

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 (iii) Computer and Related Equipment Non-current Assets (fixed assets)
(iv) Goods Acquired for Trading Current Assets- inventory
33. Common Size Balance Sheet of L.X. Ltd. as at 31st March, 2018 and 2019
Percentage of Balance Sheet
Absolute Amount Changes
Note total
Particulars
No. 31st March, 31st March, 31st March, 31st March,
2018 (₹) 2019 (₹) 2018 (%) 2019 (%)
Equity and
I.
Liabilities
Shareholder’s
1. 10,00,000 20,00,000 50.00 40
Funds
Non - Current
2. 5,00,000 20,00,000 25.00 40
Liabilities
3. Current Liabilities 5,00,000 10,00,000 25.00 20
Total 20,00,000 50,00,000 100.00 100
II. Assets
Non - Current
1. 12,50,000 30,00,000 62.50 60
Assets
2. Current Assets 7,50,000 20,00,000 37.50 40
Total 20,00,000 50,00,000 100.00 100.00
OR
Common Size Statement of Profit & Loss
Percentage of Revenue from
Absolute Amount
Note Operation
Particulars
No. 31st March, 31st March, 31st March, 31st March,
2021 2022 2021 2022
I. Revenue from
20,00,000 25,00,000 100 100
Operations
II. Other Income 2,00,000 3,00,000 10 12
III. Total Revenue (I + II) 22,00,000 28,00,000 110 112
IV. Expenses 1,00,000 3,00,000 5 12
V. Profit before tax (III
21,00,000 25,00,000 105 100
- IV)
VI. Income Tax (50%) 10,50,000 12,50,000 52.5 50
VII. Profit after tax (V -
10,50,000 12,50,000 52.5 50
VI)
34. Cash Flow Statement of R.M. Ltd.
As at 31st March, 2017
Particulars Details (₹) Amount (₹)
[Link] flows from Operating Activities:
Net Profit before Tax and extraordinary items (note-1) 2,45,000
Add: Depreciation on Plant & Machinery 10,000

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Add: Interest on Debentures 18,000
Operating profit before the working Capital changes 2,73,000
Less: Increase in Trade Receivables (50,000)
Increase in Inventories (80,000)
Decrease in Trade Payables (10,000)
Cash generated from Operations 1,33,000
Less: Tax Paid (80,000)
Net Cash From Operating Activities 53,000
B. Cash flows from Investing Activities:
Sale of Plant & Machinery 30,000
Purchase of Plant & Machinery (1,50,000)
Purchase of Goodwill (80,000)
Purchase of Non Current Investments (5,00,000)
Net Cash used in investing activities (7,00,000)
[Link] flows from financing Activities
Issue of shares 5,00,000
Redemption of Debentures (1,00,000)
Interest on Debentures paid (18,000)
Cash flows from Financing Activities 3,82,000
Net Decrease in Cash and Cash Equivalents (2,65,000)
Add: Opening Balance of Cash and Cash equivalents 6,40,000
Closing Balance of Cash and Cash equivalents 3,75,000
Working Notes:
Note-1:Net Profit before tax & Extraordinary items
Net Profit during the year 1,50,000
Add: Prov. for Tax made 95,000
2,45,000
Plant and Machinery A/c
Particulars ₹ Particulars ₹
To Balance b/d 11,40,000 By Accumulated Dep. A/c 50,000
To Bank A/c (B.F.) 1,50,000 By Bank A/c 30,000
By Balance c/d 12,10,000
12,90,000 12,90,000
Accumulated Depreciation A/c
Particulars ₹ Particulars ₹
To Plant and Machinery A/c 50,000 By Balance b/d 2,40,000
To Balance c/d 2,00,000 By Statement of P & L(Bal. Fig.) 10,000
2,50,000 2,50,000

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