Harshit classes Test Series solution

Ans 1. Calculation of C’s share of profit till the date of death:

= Sales till the date of date × His Share × previous year profit/previous year sale
=2,00,000 × 1/5 × 60,000/6,00,0000
=4000
C’a share of profit till the date of death is Rs 4,000
Ans2. B. to issue fully paid up bonus share
Ans3. (b) Debited By 20,000
Ans 4.(c) Credited by 14,000
Ans 5. (a) Purchased Goodwill
Ans 6. (d) No effect on revaluation account
Ans [Link]
Ans 8.
Ans 9. (c) It is shown in balance sheet
And 10. (b) ii. And iii.
Ans 11. (c) Debit loss on issue of debenture by Rs 2,50,000
Ans 12. (b) Rate of dividend are fixed on euity shares
Ans 13. (b) Personal Liabilities
Ans 14. (d) No effect on Revaluation
Ans 15. (B)
Ans 16.(d) (R) is false but (A) is True
Ans 17. Journal
Date Particulars LF Amount dr. Amount cr.

Equity Share Capital A/c Dr. 2,700

SPR A/c Dr. 600
To Equity share forfeiture a/c 1200
To Calls in arrears a/c 2,100
(being 300 shares forfeited for non payment
of allotment and first call money)
Bank a/c Dr. 2,000
Equity share forfeiture a/c Dr. 250
To Equity share capital a/c 2,250
(being 250 shares are reissued for Rs8 per
share as Rs 9 paid up)
Equity share forfeiture a/c Dr. 750
To Capital reserve a/c 750
(Being share forfeiture a/c amount of
reissued share transfer to capital reserve
a/c
Ans 18.
Ans 19.

Balance sheet(Extract)
As at 31st March 2023
 Harshit classes Test Series solution

Particulars Details Amount in Rs

Equity & Liabilities
Non-current Liabilities
1. Long Term Borrowings 3,50,000

Notes To Account :1
Particulars Details Amount in Rs
Long Term Borrowingg:
1. SBI Bank Loan
2. 12% Debenture (3600×100) 50,000
Less: Debenture Suspense 3,60,000
(60,000) 3,00,000
3,50,000
Calculation of Interest on debenture for the 2022-23
=12% Deb × Rate of Interest/100
=3,00,000 × 12/100
=36,000
Interest Payble on debentures At the end of the year is Rs 36,000
Ans 20.
Calculation of Rohan’s share of goodwill:
=Goodwill of the firm × His share
=28,000 × 3/7
=12,000
Journal
Date Particulars LF Amount dr. Amount cr.

Cash a/c Dr. 5,000

Sundry Debtor ‘s a/c Dr. 9,000
Stock a/c Dr. 12,000
Machinary a/c Dr. 5,000
To Rohan’s Capital a/c 19,000
To Premium For Goodwill a/c 12,000
(Being Rohan brings his share of capital and
goodwill)
Premium for goodwill a/c Dr. 12,000
To Sohan’s capital a/c 7,200
To Mohan’s capital a/c 4,800
(Being premium for goodwill distributed to
sacrificing Ratio)

Ans 21.
Past Adjustment Table:
Particulars X Y Z Firm
Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Profit debited to partners 42,000 42,000 42,000 1,26,000
 Harshit classes Test Series solution

capital a/c which is

equally distributed
wrongly
A)10% interest on capital 8,000 6,000 4,000 18,000
credit to partner’s capital
a/c
B) Y’s half yearly salary 6,000 6,000
credit to his cap. a/c
(3,000 × 2)
C)Z’s Commission credit 6,000 6,000
to his cap a/c
D)X’s Commission credit 14,000 14,000
to hi cap a/c
E)Z’s Profit Credit to his 21,100 21,100
cap a/c
Remaining profit 40,600 20,300 60,900
distributed to partner X
and Y’s Capital a/c
Total 42,000 62,600 42,000 32,300 42,000 31,100 1,26,000 1,26,000
Cr. Dr. Dr. -
20,600 9,700 10,900
Rectification Journal Entry:
Journal
Date Particulars LF Amount dr. Amount cr.

Y’s Capital a/c Dr. 9,700

Z’s Capital a/c Dr. 10,900
To X’s Capital a/c 20,600
(Being adjustment entry made for
rectification)
Ans 22. Balance Sheet (Extract) as on…………..
Particulars Note No. Amount
Equity & Liability -
Share holders Fund -
Share Capital 1 2,44,000
Notes to Account:
Particulars Rs.
Authorized Capital
(20,000 shares of Rs. 25 each) 5,00,000
Issued Capital -
(10,000 shares of Rs. 25 each 2,50,000
Subscribed capital:
-
 Harshit classes Test Series solution

Subscribed and fully paid up 2,40,000

9,600 shares of Rs.25 each -
Subscribed but not fully paid up capital -
100 shares of Rs.25 each fully called up 2500 -
Less: calls in arrear 100 ×15 1500 -
1000 -
Add: Share Forfeiture 300×10 3,000 4000
Total 2,44,000

Ans 23.
Calculation of deceased partner’s share of profit till the date of death:
Average profit for last 2 year :
= (65,000+75,000)/2
=70,000
Sohan’s share of profit =Av. Profit × his share × working months/12
=70,000 × 2/10 × 4/12
=4,667
Calculation of sohan’s share of goodwill
=Previous 3 year profit × his share – 10%
=(65,000+75,000+1,00,00) × 2/10 – 10%
=48,000 – 4,800
=43,200
Journal
Date Particulars LF Amount dr. Amount cr.

Profit and loss Suspense a/c Dr. 4,667

To Sohan’s cap. a/c 4,667
(Being profit of sohan given to sohan’s capital
a/c)
Interest on capital a/c Dr. 1,500
To Sohan’s cap. a/c 1,500
(Being interest on cap. given to sohan
Ans 24.
Journal
Date Particulars LF Amount dr. Amount cr.

- A’s capital a/c Dr. 1,800

To realization a/c 1,800
(Being stock worth Rs 2,000 taken by A at
1,800)
Realization a/c Dr. 3,000
To Bank a/c 3,000
(Being bank loan paid)
 Harshit classes Test Series solution

X’s loan a/c Dr. 20,000

To Realisation a/c 20,000
(being x’s loan settled)
Bank a/c Dr. 2,500
To realization a/c 2,500
(Being old computer which is not recorded in
books was realized at Rs 2,500
---No Entry will be passed---
(being creditor of Rs 6,000 accepted furniture
at Rs 5,000 in Full settlement)
Realization a/c Dr. 2,000
To b’s capital a/c 2,000
(Being realization exp. Paid by ‘B’a partner)

Ans 25.
Dr. Revaluation a/c Cr.
Particular’s Amount Particular’s Amount
To Plan a/c 40,000 By loss on revaluation transfer to
To Provision for bad debts a/c 1,000 partner’s capital a/c:
To workmen compensation claim a/c 10,000 A’s capital a/c: 44,000
To provision for o/s legal charges a/c 7,000 B’s capital a/c: 16,000 60,000
To stock a/c 2,000

60,000 60,000
Dr. Partner’s capital a/c Cr.
Particular’s A B C Particular’s A B C
To Revaluation a/c 44,000 16,000 By Balance B/d 2,00,000 1,00,000
(loss) By general reserve 1,10,000 40,000
To bank a/c 55,000 20,000 By premium for
(withdrawal) Goodwill a/c 1,10,000 40,000
To Balance C/d 3,21,000 1,44,000 By bank a/c 1,16,250
(Balancing fig.) (c’s capital)

4,20,000 1,80,000 4,20,000 1,80,000

Working Note:
Calculation of new ratio
C’s share= 1/5
Remaining share after deduction of C’s share =(1 - 1/5)
=4/5
New Share:
A = 4/5 × 11/15 = 44/75
B = 4/5 × 4/15 = 16/75
C = 1/5 × 15/15 =15/75
 Harshit classes Test Series solution

Hence new ratio between A,B and C is 44:16:15

Now, calculation of C’s share of capital:
Firm’s capital = (A’s capital balance + B’s capital balance) × 75/60
=(3,21,000 + 1,44,000) × 75/60
= 4,65,000 × 75/60
=5,81,250
C’s capital;
=Firm’s capital × His share
= 5,81,250 × 15/75
= 1,16,250
Ans 26. Pro-rata table
No. of No. of Money Share Share Share first Bank
application shares Received on capital Allotment and final (Refund
received allotted application call money)
5,000 - 10,000 - - - 10,000
20,000 20,000 40,000 40,000 - - -
1,20,000 30,000 2,40,000 60,000 1,50,000 30,000 -

1,45,000 50,000 2,90,000 1,00,000 1,50,000 30,000 10,000

A’s share
2,000 500 4,000 1,000 2,500 500 -
B’s share
1,000 1,000 2,000 2,000 - - -
Journal
In the books of S Ltd.
Date Particulars LF Amount dr. Amount cr.

- Bank A/c Dr. 2,90,000

To Equity share application A/c 2,90,000
(Being share application money received)
Equity share application A/c Dr. 2,90,000
To bank A/c 10,000
To Equity share capital A/c 1,00,000
To Equity share allotment A/c 1,50,000
To Equity share first & final call A/c 30,000
(Being application money capitalized)
Equity share allotment A/c Dr. 2,50,000
To Equity share capital A/c 2,00,000
To Security premium reserve A/c 50,000
(Being allotment money Due)
Bank A/c Dr. 95,000
Calls in Arrears A/c Dr. 5,000
To Equity share allotment A/c 1,00,000
(Being allotment money received )
 Harshit classes Test Series solution

Equity share first & final call A/c Dr. 2,50,000

To Equity share capital A/c 2,00,000
To Security premium reserve A/c 50,000
(Being first & final call due)
Bank A/c Dr. 2,13,000
Calls in Arrears A/c Dr. 7,000
To Equity share first & final call A/c 2,20,000
(Being first & final call money received)
Equity share capital A/c Dr. 10,000
Security premium reserve A/c Dr. 2,000
To Share forfeiture A/c 2,000
To Calls in Arrears A/c 10,000
(Being B’s share Forfeited)
Equity share capital A/c Dr. 5,000
Security premium reserve A/c Dr. 500
To Share forfeiture A/c 3,500
To Calls in Arrears A/c
(Being A’s share Forfeited) 2,000
Bank A/c Dr. 10,200
Equity share forfeiture A/c Dr. 1,800
To Equity share capital A/c 12,000
(Being 1,200 share are reissued including all
b’s share)
Equity share forfeiture A/c Dr. 1,600
To capital reserve A/c 1,600
(Being share forfeiture amount transfer to
capital reserve A/c)
Ans 27. No Flow
Ans 28. D)To judge the variations in the accounting practices of the business followed by different
enterprises.
Ans 29. B
Ans 30. Added to
Ans 31.
Items Head Sub-Head
Investment in shares Current Assets Current Investment
Finished goods Current Assets Inventory
Accrued incomes Current Assets Other current assets
Proposed dividend - Notes to
Account(Contingent
Liability)
Vehicle Property,Plant and Fixed Assets(Tangible)
Equipment
Provision for Employees Non- Current Liability Long Term Provision
Benefits
 Harshit classes Test Series solution

Ans 32.
Ans 33. A)Calculation of Proprietary ratio:
Share holder’s fund =(Non- current assets + current assets) – (long term borrowing + long term
provision + current liability
=(3,60,000 + 90,000) – (2,00,000 + 1,00,000 + 50,000)
= 4,50,000 – 3,50,000
= 1,00,000
Share holder’s fund amounted to Rs 1,50,000
Total Assets =(Non- current assets + current assets)
=(3,60,000 + 90,000)
= 4,50,000
Proprietary ratio = Share holder’s fund×100/Total assets
1,00,000
= 4,50000
×1000
= 22.22%
B) Quick ratio is 1.2:1
i. Improve
ii. Improve