Skip to content

CBSE Class 12 Accountancy Sample Paper 2023-24

questionbuddy.in/cbse/class-12/accountancy/pyq/2023-24-sqp

AccountancyCBSE Class 12 · Sample paper, session 2023-24

CBSE Class 12 Accountancy: sample paper 2023-24

The sample question paper CBSE published for the 2023-24 session, as printed: 42 questions for 80 marks, in sections, with each OR choice shown as an alternative. Try each question first, then open our solution.

54 of 57 questions (counting each OR alternative) have our step-by-step solution so far. We show a solution only after an independent re-solve agrees with it; the rest say "Solution being checked".

Source: official sample question paper from cbseacademic.nic.in: https://cbseacademic.nic.in/web_material/SQP/ClassXII_2023_24/Accountancy-SQP.pdf. Questions are transcribed from that PDF; figures are described in words, so check the official paper for them.

Practise a paper like this, timedMy board paper sets a full paper in this exact format from real board questions, with a timer.Get your written answers markedThe Answer Coach marks a photo of your handwritten answer step by step, like the examiner.

How the paper is set

SectionQuestionsWhat it has
A1-26Part A compulsory: Q1-16 1 mark, Q17-20 3 marks, Q21-22 4 marks, Q23-26 6 marks
B-I27-34Analysis of Financial Statements
B-II27-34Computerised Accounting

Instructions in brief: 34 questions, all compulsory; Part B has two options, attempt only one; internal choice in some questions.

Section A

Part A compulsory: Q1-16 1 mark, Q17-20 3 marks, Q21-22 4 marks, Q23-26 6 marks

  1. Q1 · 1 mark · MCQReconstitution of a Partnership Firm – Admission of a Partner

    A & B are partners sharing profits and losses in the ratio of 3:2. C is admitted for ¼ and for which ₹30,000 and ₹10,000 are credited as a premium for goodwill to A and B respectively. The new profit-sharing ratio of A:B:C will be:

    1. (A)3:2:1
    2. (B)12:8:5
    3. (C)9:6:5
    4. (D)33:27:20
    Try it first, then show our solutionSolution

    1. C gets 1/4. The premium is credited to A and B as ₹ 30,000 : ₹ 10,000, so they sacrificed in the ratio 3 : 1: A gives 3/16 and B gives 1/16.

    2. A = 3/5 − 3/16 = 33/80; B = 2/5 − 1/16 = 27/80; C = 1/4 = 20/80. New ratio = 33 : 27 : 20. Option (D).

      1 mark

    Answer: (D) 33:27:20

    Where the marks are

    • Sacrificing ratio 3 : 1 from the premium credited, new ratio 33 : 27 : 20 (1 mark)

    Open Q1 on its own page

  2. Q2 · 1 mark · Assertion-reasonCompetency-basedAccounting for Partnership: Basic Concepts

    Assertion: Batman, a partner in a firm with four partners has advanced a loan of ₹50,000 to the firm for last six months of the financial year without any agreement. He claims an interest on loan of ₹3,000 despite the firm being in loss for the year.

    Reasoning: In the absence of any agreement / provision in the partnership deed, provisions of Indian Partnership Act, 1932 would apply.

    1. (A)Both A and R are correct, and R is the correct explanation of A.
    2. (B)Both A and R are correct, but R is not the correct explanation of A.
    3. (C)A is correct but R is incorrect.
    4. (D)A is incorrect but R is correct.
    Try it first, then show our solutionSolution

    1. With no agreement, Section 13(d) of the Indian Partnership Act allows interest on a partner's loan at 6% p.a., and it is a charge, payable even in a year of loss. For 6 months: ₹ 50,000 × 6% × 6/12 = ₹ 1,500, not ₹ 3,000.

    2. So Batman's claim of ₹ 3,000 (the Assertion) is wrong, while the Reason (the Act applies when the deed is silent) is true. Option (D).

      1 mark

    Answer: (D) A is incorrect but R is correct.

    Where the marks are

    • Interest on loan at 6% p.a. for 6 months is ₹ 1,500, so A is false and R is true (1 mark)

    Open Q2 on its own page

  3. Answer one of these 2 alternatives.

    Q3(a) · 1 mark · MCQAccounting for Share Capital

    If 10,000 shares of ₹10 each were forfeited for non-payment of final call money of ₹3 per share and only 7,000 of these shares were re-issued @ ₹11 per share as fully paid up, then what is the minimum amount that company must collect at the time of re-issue of the remaining 3,000 shares?

    1. (A)₹21,000
    2. (B)₹9,000
    3. (C)₹16,000
    4. (D)₹30,000
    Try it first, then show our solutionSolution

    1. The final call of ₹ 3 was unpaid, so ₹ 7 per share had been received and forfeited: 10,000 × ₹ 7 = ₹ 70,000. The 7,000 shares reissued at ₹ 11 needed no discount.

    2. The 3,000 shares still held carry ₹ 7 each of forfeited money (₹ 21,000), which is the most discount the company can allow. Minimum to collect = 3,000 × (₹ 10 − ₹ 7) = ₹ 9,000. Option (B).

      1 mark

    Answer: (B) ₹9,000

    Where the marks are

    • Maximum discount equals the ₹ 7 forfeited per share, so minimum collection is ₹ 3 per share (1 mark)

    Open Q3(a) on its own page

    OR

    Q3(b) · 1 mark · MCQIssue and Redemption of Debentures

    On 1st April 2022, Galaxy ltd. had a balance of ₹8,00,000 in Securities Premium account. During the year company issued 20,000 Equity shares of ₹10 each as bonus shares and used the balance amount to write off Loss on issue of Debenture on account of issue of 2,00,000, 9% Debentures of ₹100 each at a discount of 10% redeemable @ 5% Premium. The amount to be charged to Statement of P&L for the year for Loss on issue of Debentures would be:

    1. (A)₹30,00,000.
    2. (B)₹22,00,000.
    3. (C)₹24,00,000.
    4. (D)₹20,00,000.
    Try it first, then show our solutionSolution

    1. Securities Premium left after the bonus issue = ₹ 8,00,000 − 20,000 × ₹ 10 = ₹ 6,00,000. Face value of debentures = 2,00,000 × ₹ 100 = ₹ 2,00,00,000; loss on issue = discount 10% (₹ 20,00,000) + premium on redemption 5% (₹ 10,00,000) = ₹ 30,00,000.

    2. Securities Premium absorbs ₹ 6,00,000; the rest, ₹ 24,00,000, is charged to the Statement of Profit and Loss. Option (C).

      1 mark

    Answer: (C) ₹24,00,000.

    Where the marks are

    • Loss ₹ 30,00,000 less Securities Premium ₹ 6,00,000 left after the bonus issue (1 mark)

    Open Q3(b) on its own page

  4. Answer one of these 2 alternatives.

    Q4(a) · 1 mark · MCQReconstitution of a Partnership Firm – Admission of a Partner

    A, B and C who were sharing profits and losses in the ratio of 4:3:2 decided to share the future profits and losses in the ratio to 2:3:4 with effect from 1st April 2023. An extract of their Balance Sheet as at 31st March 2023 is:

    LiabilitiesAmount(₹)AssetsAmount(₹)
    Workmen Compensation Reserve65,000

    At the time of reconstitution, a certain amount of Claim on workmen compensation was determined for which B's share of loss amounted to ₹5,000. The Claim for workmen compensation would be:

    1. (A)₹15,000
    2. (B)₹70,000
    3. (C)₹50,000
    4. (D)₹80,000
    Try it first, then show our solutionSolution

    1. The claim is met first from the Workmen Compensation Reserve of ₹ 65,000. Any excess is a loss debited to Revaluation A/c and shared in the old ratio 4 : 3 : 2.

    2. B's share of that loss is 3/9 = ₹ 5,000, so the excess is ₹ 15,000 and the claim = ₹ 65,000 + ₹ 15,000 = ₹ 80,000. Option (D).

      1 mark

    Answer: (D) ₹80,000

    Where the marks are

    • Excess of claim ₹ 15,000 found from B's 3/9 share; claim = ₹ 80,000 (1 mark)

    Open Q4(a) on its own page

    OR

    Q4(b) · 1 mark · MCQCompetency-basedAccounting for Partnership: Basic Concepts

    A, B and C are in partnership business. A used ₹2,00,000 belonging to the firm without the information to other partners and made a profit of ₹35,000 by using this amount. Which decision should be taken by the firm to rectify this situation?

    1. (A)A need to return only ₹2,00,000 to the firm.
    2. (B)A is required to return ₹35,000 to the firm.
    3. (C)A is required to pay back ₹35,000 only equally to B and C.
    4. (D)A need to return ₹2,35,000 to the firm.
    Try it first, then show our solutionSolution

    1. Under Section 16(a) of the Indian Partnership Act, a partner must account for any profit made from using the firm's property, and the property itself must be returned.

    2. A must return the ₹ 2,00,000 and hand over the ₹ 35,000 profit to the firm: ₹ 2,35,000 in all. Option (D).

      1 mark

    Answer: (D) A need to return ₹2,35,000 to the firm.

    Where the marks are

    • Personal profit from firm's money belongs to the firm (Section 16) (1 mark)

    Open Q4(b) on its own page

  5. Q5 · 1 mark · MCQAccounting for Partnership: Basic Concepts

    Interest on Partner's loan is credited to:

    1. (A)Partner's Fixed capital account.
    2. (B)Partner's Current account.
    3. (C)Partner's Loan Account.
    4. (D)Partner's Drawings Account.
    Try it first, then show our solutionSolution

    1. Interest on a partner's loan is a charge against profit owed to the partner as a lender, not as an owner.

    2. It is credited to the Partner's Loan Account. Option (C).

      1 mark

    Answer: (C) Partner's Loan Account.

    Where the marks are

    • Credited to the loan account (1 mark)

    Open Q5 on its own page

  6. Answer one of these 2 alternatives.

    Q6(a) · 1 mark · MCQIssue and Redemption of Debentures

    Alexa Ltd. purchased building from Siri Ltd for ₹8,00,000. The consideration was paid by issue of 6% debentures of ₹100 each at a discount of 20%. The 6% Debentures account is credited with:

    1. (A)₹10,40,000
    2. (B)₹10,00,000
    3. (C)₹9,60,000
    4. (D)₹6,40,000
    Try it first, then show our solutionSolution

    1. Debentures issued at a 20% discount are issued at ₹ 80 each. Number issued = ₹ 8,00,000 / ₹ 80 = 10,000.

    2. The 6% Debentures A/c is credited at face value: 10,000 × ₹ 100 = ₹ 10,00,000. Option (B).

      1 mark

    Answer: (B) ₹10,00,000

    Where the marks are

    • 10,000 debentures at face value ₹ 100 (1 mark)

    Open Q6(a) on its own page

    OR

    Q6(b) · 1 mark · MCQIssue and Redemption of Debentures

    Which of the following statements is incorrect about debentures?

    1. (A)Interest on debentures is an appropriation of profits.
    2. (B)Debenture holders are the creditors of a company.
    3. (C)Debentures can be issued to vendors at discount.
    4. (D)Interest is not paid on Debentures issued as Collateral Security.
    Try it first, then show our solutionSolution

    1. Interest on debentures must be paid whether or not there is profit, so it is a charge against profit (a finance cost).

    2. The statement "Interest on debentures is an appropriation of profits" is therefore the incorrect one. Option (A).

      1 mark

    Answer: (A) Interest on debentures is an appropriation of profits.

    Where the marks are

    • Interest on debentures is a charge, not an appropriation (1 mark)

    Open Q6(b) on its own page

  7. Q7 · 1 mark · Assertion-reasonCompetency-basedAccounting for Share Capital

    Assertion (A): A Company is Registered with an authorised Capital of 5,00,000 Equity Shares of ₹10 each of which 2,00,000 Equity shares were issued and subscribed. All the money had been called up except ₹2 per share which was declared as 'Reserve Capital'. The Share Capital reflected in balance sheet as 'Subscribed and Fully paid up' will be Zero.

    Reason (R): Reserve Capital can be called up only at the time of winding up of the company.

    1. (A)Both Assertion (A) and Reason (R) are Correct and Reason (R) is the correct explanation of Assertion (A)
    2. (B)Both Assertion (A) and Reason (R) are Correct, but Reason (R) is not the correct explanation of Assertion (A)
    3. (C)Assertion (A) is incorrect, but Reason (R) is Correct.
    4. (D)Assertion (A) is correct, but Reason (R) is incorrect
    Try it first, then show our solutionSolution

    1. ₹ 2 per share has been kept as Reserve Capital, so only ₹ 8 of each ₹ 10 share is called up. Every share is therefore "subscribed but not fully paid up", and the "subscribed and fully paid up" line is zero.

    2. Reserve capital is the part the company resolves to call only on winding up, which is exactly why those shares stay partly paid. The Reason explains the Assertion. Option (A).

      1 mark

    Answer: (A) Both Assertion (A) and Reason (R) are Correct and Reason (R) is the correct explanation of Assertion (A)

    Where the marks are

    • No share is fully paid because reserve capital is called only on winding up (1 mark)

    Open Q7 on its own page

  8. Answer one of these 2 alternatives.

    Q8(a) · 1 mark · MCQReconstitution of a Partnership Firm – Retirement/Death of a Partner

    G, S and T were partners sharing profits in the ratio 3:2:1. G retired and his dues towards the firm including Capital balance, Accumulated profits and losses share, Revaluation Gain amounted to ₹5,80,000. G was being paid ₹7,00,000 in full settlement. For giving that additional amount of ₹1,20,000, S was debited for ₹40,000. Determine goodwill of the firm.

    1. (A)₹1,20,000
    2. (B)₹80,000
    3. (C)₹2,40,000
    4. (D)₹3,60,000
    Try it first, then show our solutionSolution

    1. The extra ₹ 1,20,000 paid over G's dues is G's share of goodwill.

    2. G's share is 3/6, so goodwill of the firm = ₹ 1,20,000 × 6/3 = ₹ 2,40,000. Option (C).

      1 mark

    Answer: (C) ₹ 2,40,000

    Where the marks are

    • G's goodwill share ₹ 1,20,000 grossed up at 3/6 (1 mark)

    OR

    Q8(b) · 1 mark · MCQAccounting for Partnership: Basic Concepts

    Annu, Banu and Chanu are partners, Chanu has been given a guarantee of minimum profit of ₹8,000 by the firm. Firm suffered a loss of ₹5,000 during the year. Capital account of Banu will be ________ by ₹_________.

    1. (A)Credited, ₹6,500.
    2. (B)Debited, ₹6,500.
    3. (C)Credited, ₹1,500.
    4. (D)Debited, ₹1,500.
    Try it first, then show our solutionSolution

    1. No ratio is given, so profits are shared equally. Each partner's share of the ₹ 5,000 loss = ₹ 1,666.67. Chanu is guaranteed ₹ 8,000, so the deficiency = ₹ 8,000 + ₹ 1,666.67 = ₹ 9,666.67, borne equally by Annu and Banu (₹ 4,833.33 each).

    2. Banu's capital is debited with his loss share ₹ 1,666.67 plus ₹ 4,833.33 = ₹ 6,500. Option (B).

      1 mark

    Answer: (B) Debited, ₹6,500.

    Where the marks are

    • Equal sharing of loss plus deficiency on the guarantee (1 mark)

    Open Q8(b) on its own page

  9. Q9 · 1 mark · MCQCompetency-basedAccounting for Partnership: Basic Concepts

    Read the following hypothetical situation, answer question no. 9 and 10.

    Richa and Anmol are partners sharing profits in the ratio of 3:2 with capitals of ₹2,50,000 and ₹1,50,000 respectively. Interest on capital is agreed @ 6% p.a. Anmol is to be allowed an annual salary of 12,500. During the year ended 31st March 2023, the profits of the year prior to calculation of interest on capital but after charging Anmol's salary amounted to ₹62,000. A provision of 5% of this profit is to be made in respect of manager's commission.

    Following is their Profit & Loss Appropriation Account

    Particulars(₹)Particulars(₹)
    To Interest on Capital: Richa---------By Profit & loss account (After manager's commission)___(2)___
    Anmol---------
    To Anmol's Salary a/c12,500
    To Profit transferred to: Richa's Capital A/c___(1)___
    Anmol's Capital A/c-----------

    The amount to be reflected in blank (1) will be:

    1. (A)₹37,200
    2. (B)₹44,700
    3. (C)₹22,800
    4. (D)₹20,940
    Try it first, then show our solutionSolution

    1. Manager's commission = 5% × ₹ 62,000 = ₹ 3,100. Profit available = ₹ 62,000 + ₹ 12,500 (salary is shown in the appropriation account) − ₹ 3,100 = ₹ 71,400. Interest on capital: Richa ₹ 15,000, Anmol ₹ 9,000.

    2. Divisible profit = ₹ 71,400 − ₹ 24,000 − ₹ 12,500 = ₹ 34,900. Richa's 3/5 = ₹ 20,940. Option (D).

      1 mark

    Answer: (D) ₹20,940

    Where the marks are

    • Divisible profit ₹ 34,900 shared 3 : 2 (1 mark)

    Open Q9 on its own page

  10. Q10 · 1 mark · MCQCompetency-basedAccounting for Partnership: Basic Concepts

    The amount to be reflected in blank (2) will be: (Refer to the Profit & Loss Appropriation Account of Richa and Anmol in Q.9)

    1. (A)₹62,000.
    2. (B)₹74,500.
    3. (C)₹71,400.
    4. (D)₹70,775.
    Try it first, then show our solutionSolution

    1. The profit was given after charging Anmol's salary, which is really an appropriation, so it is added back: ₹ 62,000 + ₹ 12,500 = ₹ 74,500.

    2. Less manager's commission 5% of ₹ 62,000 = ₹ 3,100. Amount credited from the P&L account = ₹ 71,400. Option (C).

      1 mark

    Answer: (C) ₹71,400.

    Where the marks are

    • Salary added back, manager's commission deducted (1 mark)

    Open Q10 on its own page

  11. Q11 · 1 mark · MCQAccounting for Partnership: Basic Concepts

    In the absence of an agreement, partners are entitled to:
    i) Profit share in capital ratio.
    ii) Commission for making additional sale.
    iii) Interest on Loan & Advances by them to the firm.
    iv) Salary for working extra hours.
    v) Interest on Capital.

    Choose the correct option:

    1. (A)Only i), iv) and v).
    2. (B)Only ii) and iii).
    3. (C)Only iii).
    4. (D)Only i) and iii).
    Try it first, then show our solutionSolution

    1. Without an agreement the Act gives no salary, commission or interest on capital, and profits are shared equally, not in capital ratio.

    2. The only right listed is interest at 6% p.a. on loans and advances by partners: item (iii). Option (C).

      1 mark

    Answer: (C) Only iii).

    Where the marks are

    • Only interest on partners' loans is allowed by the Act (1 mark)

    Open Q11 on its own page

  12. Q12 · 1 mark · MCQAccounting for Share Capital

    Rancho Ltd. took over assets worth ₹20,00,000 from PK Ltd. by paying 30% through bank draft and balance by issue of shares of ₹100 each at a premium of 10%. The entry to be passed by Rancho Ltd for settlement will be :-

    1. (A)PK Ltd. Dr. 20,00,000; To Share Capital A/c 12,72,700; To Securities Premium A/c 1,27,270; To Bank A/c 6,00,000; To Statement of P&L 30 (Being settlement of amount due to vendors)
    2. (B)PK Ltd. Dr. 20,00,000; To Share Capital A/c 12,72,700; To Securities Premium A/c 1,27,270; To Bank A/c 6,00,030 (Being settlement of amount due to vendors)
    3. (C)PK Ltd. Dr. 20,00,000; To Share Capital A/c 12,72,700; To Securities Premium A/c 1,27,300; To Bank A/c 6,00,000 (Being settlement of amount due to vendors)
    4. (D)PK Ltd. Dr. 20,00,000; To Share Capital A/c 12,73,000; To Securities Premium A/c 1,27,300; To Bank A/c 5,99,700 (Being settlement of amount due to vendors)
    Try it first, then show our solutionSolution

    1. Bank draft = 30% × ₹ 20,00,000 = ₹ 6,00,000. Balance ₹ 14,00,000 is paid in shares of ₹ 110 each: 14,00,000 / 110 = 12,727.27, so 12,727 shares are issued (share capital ₹ 12,72,700, premium ₹ 1,27,270 = ₹ 13,99,970).

    2. The fraction of a share (₹ 30) is paid in cash, so Bank is credited ₹ 6,00,030. Option (B).

      1 mark

    Answer: (B) PK Ltd. Dr. 20,00,000; To Share Capital A/c 12,72,700; To Securities Premium A/c 1,27,270; To Bank A/c 6,00,030

    Where the marks are

    • Whole shares only; the ₹ 30 fraction paid in cash (1 mark)

    Open Q12 on its own page

  13. Q13 · 1 mark · MCQAccounting for Share Capital

    A company forfeited 3,000 shares of ₹10 each, on which only ₹5 per share (including ₹1 premium) has been paid. Out of these few shares were re-issued at a discount of ₹1 per share were and ₹6,000 were transferred to Capital Reserve. How many shares were re-issued?

    1. (A)3,000 shares
    2. (B)1,000 shares
    3. (C)2,000 shares
    4. (D)1,500 shares
    Try it first, then show our solutionSolution

    1. Forfeited per share = ₹ 5 paid − ₹ 1 premium = ₹ 4 (premium received is never forfeited). Reissue at ₹ 1 discount leaves ₹ 3 per share for Capital Reserve.

    2. Shares reissued = ₹ 6,000 / ₹ 3 = 2,000. Option (C).

      1 mark

    Answer: (C) 2,000 shares

    Where the marks are

    • Gain of ₹ 3 per reissued share (1 mark)

    Open Q13 on its own page

  14. Q14 · 1 mark · MCQReconstitution of a Partnership Firm – Admission of a Partner

    X and Y are partners in a firm with capital of ₹18,000 and ₹20,000. Z brings ₹10,000 for his share of goodwill and he is required to bring proportionate capital for 1/3rd share in profits. The capital contribution of Z will be:

    1. (A)₹24,000.
    2. (B)₹19,000.
    3. (C)₹12,667.
    4. (D)₹14,000.
    Try it first, then show our solutionSolution

    1. Z's ₹ 10,000 premium for goodwill is credited to X and Y, so their capitals become ₹ 18,000 + ₹ 20,000 + ₹ 10,000 = ₹ 48,000 for a 2/3 share.

    2. Total capital = ₹ 48,000 × 3/2 = ₹ 72,000; Z's 1/3 = ₹ 24,000. Option (A).

      1 mark

    Answer: (A) ₹24,000.

    Where the marks are

    • Old capitals after crediting goodwill give total ₹ 72,000 (1 mark)

    Open Q14 on its own page

  15. Answer one of these 2 alternatives.

    Q15(a) · 1 mark · MCQAccounting for Partnership: Basic Concepts

    A and B are partners. B draws a fixed amount at the end of every quarter. Interest on drawings is charged @15% p.a. At the end of the year interest on B's drawings amounted to ₹9,000. Drawings of B were:

    1. (A)₹24,000 per quarter.
    2. (B)₹40,000 per quarter
    3. (C)₹30,000 per quarter
    4. (D)₹80,000 per quarter
    Try it first, then show our solutionSolution

    1. Drawings at the end of each quarter are outstanding for an average of 4.5 months. Interest = 4 × Q × 15% × 4.5/12 = 0.225 Q.

    2. 0.225 Q = ₹ 9,000, so Q = ₹ 40,000 per quarter. Option (B).

      1 mark

    Answer: (B) ₹40,000 per quarter

    Where the marks are

    • Average period of 4.5 months on four quarterly drawings (1 mark)

    Open Q15(a) on its own page

    OR

    Q15(b) · 1 mark · MCQCompetency-basedAccounting for Partnership: Basic Concepts

    Shyam, Gopal & Arjun are partners carrying on garment business. Shyam withdrew ₹10,000 in the beginning of each quarter. Gopal, withdrew garments amounting to ₹15,000 to distribute it to flood victims, and Arjun withdrew ₹20,000 from his capital account. The partnership deed provides for interest on drawings @ 10% p.a. The interest on drawing charged from Shyam, Gopal & Arjun at the end of the year will be

    1. (A)Shyam- ₹4,800; Gopal- ₹1,000; Arjun- ₹2,000.
    2. (B)Shyam- ₹4,800; Gopal- ₹1,000; Arjun- ₹2,000.
    3. (C)Shyam- ₹2,500; Gopal- ₹750; Arjun- Nil.
    4. (D)Shyam- ₹4,800; Gopal- Nil; Arjun- Nil.
    Try it first, then show our solutionSolution

    1. Shyam: ₹ 10,000 at the start of each quarter, average period 7.5 months: ₹ 40,000 × 10% × 7.5/12 = ₹ 2,500. Gopal: goods of ₹ 15,000 are drawings, date unknown, so 6 months: ₹ 750.

    2. Arjun withdrew capital, not drawings, so no interest. Shyam ₹ 2,500; Gopal ₹ 750; Arjun Nil. Option (C).

      1 mark

    Answer: (C) Shyam- ₹2,500; Gopal- ₹750; Arjun- Nil.

    Where the marks are

    • Average periods 7.5 and 6 months; capital withdrawal bears no interest on drawings (1 mark)

    Open Q15(b) on its own page

  16. Q16 · 1 mark · MCQDissolution of Partnership Firm

    On the day of dissolution of the firm 'Roop Brothers' had partner's capital amounting to ₹1,50,000, external liabilities ₹35,000, Cash balance ₹8,000 and P&L A/c (Dr.) ₹7,000. If Realisation expense and loss on Realisation amounted to ₹5,000 and ₹25,000 respectively, the amount realised by sale of assets is:

    1. (A)₹1,64,000
    2. (B)₹1,45,000
    3. (C)₹1,57,000
    4. (D)₹1,50,000
    Try it first, then show our solutionSolution

    1. Other assets (excluding cash and the P&L debit balance) = capital ₹ 1,50,000 + liabilities ₹ 35,000 − cash ₹ 8,000 − P&L ₹ 7,000 = ₹ 1,70,000.

    2. Realisation A/c: assets ₹ 1,70,000 + expenses ₹ 5,000 − loss ₹ 25,000 = amount realised ₹ 1,50,000 (liabilities paid at book value cancel out). Option (D).

      1 mark

    Answer: (D) ₹1,50,000

    Where the marks are

    • Book value of assets ₹ 1,70,000 adjusted for expenses and loss (1 mark)

    Open Q16 on its own page

  17. Q17 · 3 marks · Short answerReconstitution of a Partnership Firm – Retirement/Death of a Partner

    Anshul, Babita and Chander were partners in a firm running a successful business of car accessories. They had agreed to share profits and losses in the ratio of 1/2 : 1/3 : 1/6 respectively. After running business successfully and without any disputes for 10 years, Babita decided to retire due to old age and the Anshul and Chander decided to share future profits and losses in the ratio of 3 : 2. The accountant passed the following journal entry for Babita share of goodwill and missed some information. Fill in the missing figures in the following Journal entry and calculate the gaining ratio.

    DateParticularsL.FDrCr
    Anshul's Capital A/c Dr----------
    Chander's Capital A/c Dr21,000
    To Babita's Capital A/c------------
    (Chander's share of Goodwill debited to the amounts of continuing partners in their gaining ratio)
    Try it first, then show our solutionSolution

    1. Gaining ratio. Old ratio 1/2 : 1/3 : 1/6 = 3 : 2 : 1. New ratio of Anshul and Chander 3 : 2. Gain: Anshul 3/5 − 1/2 = 1/10 = 3/30; Chander 2/5 − 1/6 = 7/30. Gaining ratio = 3 : 7.

      1 mark

    2. Chander's ₹ 21,000 is 7/10 of Babita's share of goodwill, so Babita's share = ₹ 21,000 × 10/7 = ₹ 30,000 and Anshul's 3/10 = ₹ 9,000.

      1 mark

    3. Completed entry

      ParticularsDr. (₹)Cr. (₹)
      Anshul's Capital A/c Dr.9,000
      Chander's Capital A/c Dr.21,000
      To Babita's Capital A/c30,000
      (Being Babita's share of goodwill debited to the continuing partners in their gaining ratio)
      1 mark

    Answer: Gaining ratio 3 : 7; Anshul's Capital A/c Dr. ₹ 9,000, Chander's Capital A/c Dr. ₹ 21,000, to Babita's Capital A/c ₹ 30,000

    Where the marks are

    • Gaining ratio 3 : 7 (1 mark)
    • Anshul ₹ 9,000 (1 mark)
    • Babita credited ₹ 30,000 (1 mark)

    Open Q17 on its own page

  18. Answer one of these 2 alternatives.

    Q18(a) · 3 marks · Short answerAccounting for Partnership: Basic Concepts

    P, Q and R were partners with fixed capital of ₹40,000, ₹32,000 and ₹24,000. After distributing the profit of ₹48,000 for the year ended 31st March 2022 in their agreed ratio of 3 : 1 : 1 it was observed that:
    (1) Interest on capital was provided at 10% p.a. instead of 8% p.a.
    (2) Salary of ₹12,000 was credited to P instead of Q.
    You are required to pass a single journal entry in the beginning of the next year to rectify the above omissions.

    Try it first, then show our solutionSolution

    1. Adjustment table. Interest was given at 10% instead of 8%, so 2% must be taken back: P ₹ 800, Q ₹ 640, R ₹ 480 (total ₹ 1,920). That ₹ 1,920 becomes profit, shared 3 : 1 : 1 (₹ 1,152, ₹ 384, ₹ 384). The ₹ 12,000 salary is reversed from P and given to Q.

      ParticularsP (₹)Q (₹)R (₹)
      Excess interest on capital taken back (Dr.)800640480
      Salary wrongly credited taken back (Dr.)12,000
      Salary due (Cr.)12,000
      Profit share of ₹ 1,920 (Cr.)1,152384384
      Net effect11,648 (Dr.)11,744 (Cr.)96 (Dr.)
      2 marks

    2. Single rectifying entry (1st April, 2022)

      ParticularsDr. (₹)Cr. (₹)
      P's Current A/c Dr.11,648
      R's Current A/c Dr.96
      To Q's Current A/c11,744
      (Being adjustment for excess interest on capital and salary credited to the wrong partner)
      1 mark

    Answer: P Dr. ₹ 11,648 and R Dr. ₹ 96, to Q ₹ 11,744

    Where the marks are

    • Adjustment table with net effect (2 marks)
    • Single adjusting entry (1 mark)

    Open Q18(a) on its own page

    OR

    Q18(b) · 3 marks · Short answerAccounting for Partnership: Basic Concepts

    Cheese and Slice are equal partners. Their capitals as on April 01, 2022 were Rs. 50,000 and Rs. 1,00,000 respectively. After the accounts for the financial year ending March 31, 2023 have been prepared, it is observed that interest on capital @ 6% per annum and salary to Cheese @ ₹5,000 per annum, as provided in the partnership deed has not been credited to the partners' capital accounts before distribution of profits.

    You are required to give necessary rectifying entries using P&L adjustment account.

    Try it first, then show our solutionSolution

    1. Interest on capital at 6%: Cheese ₹ 3,000, Slice ₹ 6,000.

      ParticularsDr. (₹)Cr. (₹)
      Profit and Loss Adjustment A/c Dr.9,000
      To Cheese's Capital A/c3,000
      To Slice's Capital A/c6,000
      (Being interest on capital omitted earlier, now provided)
      1 mark

    2. Salary to Cheese

      ParticularsDr. (₹)Cr. (₹)
      Profit and Loss Adjustment A/c Dr.5,000
      To Cheese's Capital A/c5,000
      (Being salary omitted earlier, now provided)
      1 mark

    3. Close the adjustment account (debit ₹ 14,000) equally.

      ParticularsDr. (₹)Cr. (₹)
      Cheese's Capital A/c Dr.7,000
      Slice's Capital A/c Dr.7,000
      To Profit and Loss Adjustment A/c14,000
      (Being loss on adjustment transferred to partners equally)
      1 mark

    Answer: P&L Adjustment Dr. ₹ 9,000 to Cheese ₹ 3,000 and Slice ₹ 6,000; P&L Adjustment Dr. ₹ 5,000 to Cheese; Cheese and Slice Dr. ₹ 7,000 each to P&L Adjustment ₹ 14,000

    Where the marks are

    • Interest on capital entry (1 mark)
    • Salary entry (1 mark)
    • Transfer of ₹ 14,000 equally (1 mark)

    Open Q18(b) on its own page

  19. Answer one of these 2 alternatives.

    Q19(a) · 3 marks · Short answerIssue and Redemption of Debentures

    Pioneer Fitness Ltd. took over the running business of Healthy World Ltd. having assets of ₹10,00,000 and liabilities of ₹1,70,000 by:
    a) Issuing 8,000 8% Debentures of ₹100 each at 5% premium redeemable after 6 years @ ₹110; and
    b) Cheque for ₹50,000.
    Pass the Journal entries in the books of Pioneer Fitness Ltd.

    Try it first, then show our solutionSolution

    1. Net assets = ₹ 10,00,000 − ₹ 1,70,000 = ₹ 8,30,000. Consideration = 8,000 debentures at ₹ 105 (₹ 8,40,000) + cheque ₹ 50,000 = ₹ 8,90,000, so goodwill = ₹ 60,000.

      ParticularsDr. (₹)Cr. (₹)
      Sundry Assets A/c Dr.10,00,000
      Goodwill A/c Dr.60,000
      To Sundry Liabilities A/c1,70,000
      To Healthy World Ltd.8,90,000
      (Being business of Healthy World Ltd. taken over)
      1½ marks

    2. Premium on redemption = ₹ 10 × 8,000 = ₹ 80,000, a loss on issue.

      ParticularsDr. (₹)Cr. (₹)
      Healthy World Ltd. Dr.8,90,000
      Loss on Issue of Debentures A/c Dr.80,000
      To 8% Debentures A/c8,00,000
      To Securities Premium A/c40,000
      To Premium on Redemption of Debentures A/c80,000
      To Bank A/c50,000
      (Being consideration paid by 8,000 8% debentures at 5% premium redeemable at ₹ 110, and a cheque)
      1½ marks

    Answer: Assets ₹ 10,00,000 and Goodwill ₹ 60,000 Dr. to Liabilities ₹ 1,70,000 and Healthy World ₹ 8,90,000; Healthy World ₹ 8,90,000 and Loss on Issue ₹ 80,000 Dr. to 8% Debentures ₹ 8,00,000, Securities Premium ₹ 40,000, Premium on Redemption ₹ 80,000, Bank ₹ 50,000

    Where the marks are

    • Purchase of business with goodwill ₹ 60,000 (1½ marks)
    • Discharge by debentures and cheque with loss on issue (1½ marks)

    Open Q19(a) on its own page

    OR

    Q19(b) · 3 marks · Short answerAccounting for Share Capital

    Lilly Ltd. forfeited 100 shares of ₹10 each issued at 10% premium (₹8 called up) on which a shareholder did not pay ₹3 of allotment (including premium) and first call of ₹2. Out of these 60 shares were reissued to Ram as fully paid for ₹8 per share and 20 shares to Suraj as fully paid up @ ₹12 per share at different intervals of time.

    Prepare Share Forfeiture account.

    Try it first, then show our solutionSolution

    1. Per share ₹ 8 was called. Unpaid: allotment ₹ 3 (₹ 2 capital + ₹ 1 premium) and first call ₹ 2. Capital received = ₹ 8 − ₹ 4 = ₹ 4, so ₹ 400 is forfeited on 100 shares.

      1 mark

    2. Ram's 60 shares are reissued as fully paid ₹ 10 shares for ₹ 8: discount ₹ 2 each (₹ 120) is met from forfeiture; the rest of their forfeited ₹ 240, i.e. ₹ 120, goes to Capital Reserve. Suraj's 20 shares at ₹ 12 need no discount, so all ₹ 80 forfeited on them goes to Capital Reserve. ₹ 80 on the 20 shares not reissued is carried down.

      1 mark

    3. Share Forfeiture Account

      Particulars₹Particulars₹
      To Share Capital A/c (discount to Ram)120By Share Capital A/c400
      To Capital Reserve A/c (Ram's shares)120
      To Capital Reserve A/c (Suraj's shares)80
      To Balance c/d80
      400400
      1 mark

    Answer: Share Forfeiture A/c: credited ₹ 400; debited ₹ 120 (discount to Ram), ₹ 120 and ₹ 80 to Capital Reserve, balance c/d ₹ 80

    Where the marks are

    • Forfeited amount ₹ 400 (1 mark)
    • Discount and capital reserve on Ram's shares (1 mark)
    • Capital reserve on Suraj's shares and balance ₹ 80 (1 mark)

    Open Q19(b) on its own page

  20. Q20 · 3 marks · Short answerAccounting for Partnership: Basic Concepts

    Calculate goodwill of a firm on the basis of three years purchases of the Weighted Average Profits of the last four years. The profits of the last four years were:

    Years (ending 31st march)2020202120222023
    Amount28,00027,00046,90053,810

    a) On 1st April, 2020 a major plant repair was undertaken for ₹10,000 which was charged to revenue. The said sum is to be capitalized for goodwill calculation subject to adjustment of depreciation of 10% on reducing balance method.
    b) For the purpose of calculating Goodwill the company decided that the years ending 31.03.2020 and 31.03.2021 be weighted as 1 each (being COVID affected) and for year ending 31.03.2022 and 31.03.2023 weights be taken as 2 and 3 respectively.

    Try it first, then show our solutionSolution

    1. Adjusted profits. The repair of 1st April, 2020 falls in the year ending 31st March, 2021, so ₹ 10,000 is added back that year and depreciation at 10% on reducing balance is charged: ₹ 1,000 (2021), ₹ 900 (2022), ₹ 810 (2023).

      YearGiven profit (₹)Adjustment (₹)Adjusted profit (₹)
      202028,000Nil28,000
      202127,000+10,000 − 1,00036,000
      202246,900− 90046,000
      202353,810− 81053,000
      1 mark

    2. Weighted average. 28,000 × 1 + 36,000 × 1 + 46,000 × 2 + 53,000 × 3 = ₹ 3,15,000; weights total 7; weighted average profit = ₹ 45,000.

      1 mark

    3. Goodwill = ₹ 45,000 × 3 = ₹ 1,35,000.

      1 mark

    Answer: Goodwill = ₹ 1,35,000 (weighted average profit ₹ 45,000 × 3)

    Where the marks are

    • Adjusted profits (1 mark)
    • Weighted average profit ₹ 45,000 (1 mark)
    • Goodwill ₹ 1,35,000 (1 mark)

    Open Q20 on its own page

  21. Q21 · 4 marks · Long answerAccounting for Share Capital

    Atishyokti Ltd. company was registered with an authorized capital of ₹20,00,000 divided into 2,00,000 Equity Shares of ₹10 each, payable ₹3 on application, ₹6 on allotment (including ₹1 premium) and balance on call. The company offered 80,000 shares for public subscription. All the money has been duly called and received except allotment and call money on 5,000 shares held by Manish and call money on 4,000 shares held by Alok. Manish's shares were forfeited and out of these 3,000 shares were re-issued ₹9 per share as fully paid up. Show share capital in the books of the company. Also prepare notes to accounts.

    Try it first, then show our solutionSolution

    1. Working. Manish's 5,000 shares paid only ₹ 3 application money, so ₹ 15,000 is forfeited. 3,000 are reissued at ₹ 9 (discount ₹ 1); ₹ 6,000 stays in Share Forfeiture A/c for the 2,000 shares not reissued. Shares now issued = 80,000 − 5,000 + 3,000 = 78,000. Alok's 4,000 shares owe the call of ₹ 2 (₹ 10 − ₹ 3 − ₹ 5): calls in arrears ₹ 8,000.

      Balance Sheet (extract)

      ParticularsNote No.₹
      I. Equity and Liabilities
      1. Shareholders' Funds
      (a) Share Capital17,78,000
      1 mark

    2. Note 1: Share Capital

      Particulars₹
      Authorised Capital: 2,00,000 equity shares of ₹ 10 each20,00,000
      Issued Capital: 80,000 equity shares of ₹ 10 each8,00,000
      1 mark

    3. Subscribed Capital

      Particulars₹
      Subscribed and fully paid up: 74,000 equity shares of ₹ 10 each7,40,000
      Subscribed but not fully paid up: 4,000 equity shares of ₹ 10 each, fully called (40,000) less calls in arrears (8,000)32,000
      1 mark

    4. Add: Share Forfeiture A/c (2,000 shares × ₹ 3) ₹ 6,000. Total share capital = ₹ 7,40,000 + ₹ 32,000 + ₹ 6,000 = ₹ 7,78,000.

      1 mark

    Answer: Share Capital ₹ 7,78,000 (fully paid 74,000 shares ₹ 7,40,000; 4,000 shares ₹ 40,000 less calls in arrears ₹ 8,000; Share Forfeiture ₹ 6,000)

    Where the marks are

    • Balance Sheet extract (1 mark)
    • Authorised and issued capital (1 mark)
    • Subscribed fully paid and not fully paid (1 mark)
    • Share Forfeiture ₹ 6,000 (1 mark)

    Open Q21 on its own page

  22. Q22 · 4 marks · Long answerDissolution of Partnership Firm

    Sun and Kiran are partners sharing profits and losses equally. They decided to dissolve their firm. Assets and Liabilities have been transferred to Realisation Account. Pass necessary Journal entries for the following:

    a) All partners are agreed that the process of realisation at the time dissolution will be accomplished by Sun for which he will be paid ₹10,000 along with the amount of expense which amounted to 2% of total value realised from the Assets on dissolution. Some assets were sold for Cash at a cumulative Value of ₹12,00,000 and the remaining were taken over by creditors at a valuation of ₹3,00,000.
    b) Deferred Advertisement Expenditure A/c appeared in the books at ₹28,000.
    c) Out of the Stock of ₹1,20,000; Kiran (a partner) took over 1/3 of the stock at a discount of 25% and 50% of remaining stock was took over by a Creditor of ₹30,000 in full settlement of his claim. Balance amount of stock realized at ₹25,000.
    d) An outstanding bill for repairs and renewal of ₹3,000 was settled through an unrecorded asset which was valued at ₹10,000. Balance being settled in Cash.

    Try it first, then show our solutionSolution

    1. (a) Remuneration ₹ 10,000 + expenses 2% of (₹ 12,00,000 + ₹ 3,00,000) = ₹ 30,000, payable to Sun.

      ParticularsDr. (₹)Cr. (₹)
      Realisation A/c Dr.40,000
      To Sun's Capital A/c40,000
      (Being remuneration and expenses payable to Sun)
      1 mark

    2. (b) Deferred advertisement expenditure is a fictitious asset, not transferred to Realisation A/c; it is written off equally.

      ParticularsDr. (₹)Cr. (₹)
      Sun's Capital A/c Dr.14,000
      Kiran's Capital A/c Dr.14,000
      To Deferred Advertisement Expenditure A/c28,000
      (Being deferred advertisement expenditure written off)
      1 mark

    3. (c) Kiran takes 1/3 of stock (₹ 40,000) at 25% less = ₹ 30,000. Half of the rest (₹ 40,000) goes to a creditor of ₹ 30,000 in full settlement: no entry. The remaining stock realises ₹ 25,000.

      ParticularsDr. (₹)Cr. (₹)
      Kiran's Capital A/c Dr.30,000
      To Realisation A/c30,000
      (Being stock taken over by Kiran)
      Bank A/c Dr.25,000
      To Realisation A/c25,000
      (Being balance of stock realised)
      1 mark

    4. (d) The creditor for ₹ 3,000 takes the unrecorded asset worth ₹ 10,000 and pays the firm the ₹ 7,000 difference.

      ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.7,000
      To Realisation A/c7,000
      (Being unrecorded asset settled against the outstanding bill and balance received)
      1 mark

    Answer: (a) Realisation Dr. ₹ 40,000 to Sun; (b) Sun and Kiran Dr. ₹ 14,000 each to Deferred Advertisement ₹ 28,000; (c) Kiran Dr. ₹ 30,000 to Realisation, no entry for creditor, Bank Dr. ₹ 25,000 to Realisation; (d) Bank Dr. ₹ 7,000 to Realisation

    Where the marks are

    • Entry (a) (1 mark)
    • Entry (b) (1 mark)
    • Entries for (c) (1 mark)
    • Entry (d) (1 mark)

    Open Q22 on its own page

  23. Answer one of these 2 alternatives.

    Q23(a) · 6 marks · Long answerAccounting for Share Capital

    The Directors of Rockstar Ltd. invited applications for 2,00,000 Shares of ₹10 each, issued at 20% premium. Share was payable as ₹5 on application, ₹4 (including premium) on allotment and balance on call. Public had applied for 3,20,000 shares out of which applications for 20,000 shares were rejected and remaining were alloted on pro-rata basis.
    Simba, an applicant of 15,000 shares failed to pay allotment and call money. His shares were forfeited and out of these 6,000 shares were reissued at a discount of ₹2 per share.
    Journalise.

    Try it first, then show our solutionSolution

    1. Issue price ₹ 12. Applications for 3,00,000 shares were allotted 2,00,000 (pro rata 3 : 2). Excess application money = 1,00,000 × ₹ 5 = ₹ 5,00,000, adjusted against allotment.

      ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.16,00,000
      To Share Application A/c16,00,000
      (Being application money received on 3,20,000 shares)
      Share Application A/c Dr.16,00,000
      To Share Capital A/c10,00,000
      To Share Allotment A/c5,00,000
      To Bank A/c1,00,000
      (Being application money transferred, excess adjusted and rejected applications refunded)
      1 mark

    2. Simba applied for 15,000 and got 10,000 shares; his excess ₹ 25,000 covers part of his ₹ 40,000 allotment, leaving ₹ 15,000 unpaid.

      ParticularsDr. (₹)Cr. (₹)
      Share Allotment A/c Dr.8,00,000
      To Share Capital A/c4,00,000
      To Securities Premium A/c4,00,000
      (Being allotment money due)
      Bank A/c Dr.2,85,000
      Calls in Arrears A/c Dr.15,000
      To Share Allotment A/c3,00,000
      (Being allotment money received except from Simba)
      1 mark

    3. Call ₹ 3 per share; Simba owes 10,000 × ₹ 3 = ₹ 30,000.

      ParticularsDr. (₹)Cr. (₹)
      Share First and Final Call A/c Dr.6,00,000
      To Share Capital A/c6,00,000
      (Being call money due)
      Bank A/c Dr.5,70,000
      Calls in Arrears A/c Dr.30,000
      To Share First and Final Call A/c6,00,000
      (Being call money received except from Simba)
      1 mark

    4. Forfeiture of Simba's 10,000 shares. Following the marking scheme, the ₹ 15,000 unpaid on allotment is taken as unpaid premium, so capital received = ₹ 50,000 (application) + ₹ 20,000 (allotment) = ₹ 70,000.

      ParticularsDr. (₹)Cr. (₹)
      Share Capital A/c Dr.1,00,000
      Securities Premium A/c Dr.15,000
      To Share Forfeited A/c70,000
      To Calls in Arrears A/c45,000
      (Being Simba's 10,000 shares forfeited)
      1½ marks

    5. Reissue of 6,000 shares at ₹ 8 (discount ₹ 2).

      ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.48,000
      Share Forfeited A/c Dr.12,000
      To Share Capital A/c60,000
      (Being 6,000 forfeited shares reissued at ₹ 2 discount)
      1 mark

    6. Forfeited on 6,000 shares = 6,000 × ₹ 7 = ₹ 42,000; less discount ₹ 12,000 = ₹ 30,000 gain.

      ParticularsDr. (₹)Cr. (₹)
      Share Forfeited A/c Dr.30,000
      To Capital Reserve A/c30,000
      (Being gain on reissue transferred to Capital Reserve)
      ½ mark

    Answer: Bank ₹ 16,00,000; application transfer ₹ 10,00,000 capital, ₹ 5,00,000 to allotment, ₹ 1,00,000 refund; allotment ₹ 8,00,000 due, ₹ 2,85,000 received; call ₹ 6,00,000 due, ₹ 5,70,000 received; forfeiture: Share Capital ₹ 1,00,000 and Securities Premium ₹ 15,000 Dr. to Share Forfeited ₹ 70,000 and Calls in Arrears ₹ 45,000; reissue Bank ₹ 48,000 and Forfeited ₹ 12,000; Capital Reserve ₹ 30,000

    Where the marks are

    • Application entries (1 mark)
    • Allotment entries (1 mark)
    • Call entries (1 mark)
    • Forfeiture entry (1½ marks)
    • Reissue entry (1 mark)
    • Transfer to Capital Reserve (½ mark)

    Open Q23(a) on its own page

    OR

    Q23(b) · 6 marks · Long answerAccounting for Share Capital

    Shaktimaan Ltd. invited applications for issuing 1,00,000 Shares of ₹10 each at a premium of ₹2 per share. The amount was payable as ₹4 on application (including premium); ₹5 on Allotment and balance on call. Applications were received shares for 1,80,000 of which Applications for 30,000 shares were rejected and remaining applicants were allotted on pro-rata basis.
    Manthan, holding 5,000 shares failed to pay call money and his shares were forfeited. Out of these 2,000 shares were re-issued at premium of ₹3 per share.
    Prepare Cash Book and pass necessary entries.

    Try it first, then show our solutionSolution

    1. Applications for 1,50,000 shares were allotted 1,00,000 (pro rata 3 : 2). Application money ₹ 4 = ₹ 2 capital + ₹ 2 premium. Excess = 50,000 × ₹ 4 = ₹ 2,00,000 to allotment.

      ParticularsDr. (₹)Cr. (₹)
      Share Application A/c Dr.6,00,000
      To Share Capital A/c2,00,000
      To Securities Premium A/c2,00,000
      To Share Allotment A/c2,00,000
      (Being application money transferred and excess adjusted)
      1 mark

    2. Allotment, call and calls in arrears

      ParticularsDr. (₹)Cr. (₹)
      Share Allotment A/c Dr.5,00,000
      To Share Capital A/c5,00,000
      (Being allotment money due)
      Share First and Final Call A/c Dr.3,00,000
      To Share Capital A/c3,00,000
      (Being call money due)
      Calls in Arrears A/c Dr.15,000
      To Share First and Final Call A/c15,000
      (Being call unpaid by Manthan on 5,000 shares)
      1 mark

    3. Forfeiture and gain on reissue. Manthan paid ₹ 7 of capital per share: ₹ 35,000 forfeited. 2,000 shares reissued at ₹ 13 (₹ 3 premium), so the full 2,000 × ₹ 7 = ₹ 14,000 goes to Capital Reserve.

      ParticularsDr. (₹)Cr. (₹)
      Share Capital A/c Dr.50,000
      To Share Forfeited A/c35,000
      To Calls in Arrears A/c15,000
      (Being Manthan's 5,000 shares forfeited)
      Share Forfeited A/c Dr.14,000
      To Capital Reserve A/c14,000
      (Being gain on reissue of 2,000 shares transferred to Capital Reserve)
      1½ marks

    4. Cash Book (bank column)

      Particulars₹Particulars₹
      To Share Application A/c (1,80,000 × ₹ 4)7,20,000By Share Application A/c (refund)1,20,000
      To Share Allotment A/c3,00,000By Balance c/d12,11,000
      To Share First and Final Call A/c2,85,000
      To Share Capital A/c (reissue)20,000
      To Securities Premium A/c (reissue)6,000
      13,31,00013,31,000
      2½ marks

    Answer: Journal: application ₹ 6,00,000 to capital ₹ 2,00,000, premium ₹ 2,00,000, allotment ₹ 2,00,000; allotment ₹ 5,00,000; call ₹ 3,00,000; calls in arrears ₹ 15,000; forfeiture ₹ 50,000 to Forfeited ₹ 35,000 and Calls in Arrears ₹ 15,000; Capital Reserve ₹ 14,000. Cash Book balance ₹ 12,11,000 (receipts ₹ 13,31,000, refund ₹ 1,20,000)

    Where the marks are

    • Application entry (1 mark)
    • Allotment, call and arrears entries (1 mark)
    • Forfeiture and capital reserve (1½ marks)
    • Cash Book (2½ marks)

    Open Q23(b) on its own page

  24. Answer one of these 2 alternatives.

    Q24(a) · 6 marks · Long answerReconstitution of a Partnership Firm – Admission of a Partner

    Rajinder and Vijay were partners in a firm sharing profits in the ratio 3:2. On 31st March 2023 their balance sheet was as follows:

    LiabilitiesAmount (₹)AssetsAmount (₹)
    Capital A/cs: Rajinder 3,00,000; Vijay 1,50,0004,50,000Fixed Assets (Tangible)3,60,000
    Goodwill50,000
    Investments40,000
    Current A/cs: Rajinder 50,000; Vijay 10,00060,000Stock74,000
    Debtors 1,00,000 Less: Provision for Doubtful Debts 4,00096,000
    Creditors75,000Bank25,000
    General Reserve60,000
    6,45,0006,45,000

    With an aim to expand business it is decided to admit Ranvijay as a partner on 1st April 2023 on the following terms:
    a) Provision for doubtful debts is to be increased to 6% of debtors.
    b) An outstanding bill for repairs ₹50,000 to be accounted in the books
    c) An unaccounted interest accrued of ₹7500 be provided for.
    d) Investment were sold at book value.
    e) Half of stock was taken by Rajinder at ₹42,000 and remaining stock was also to be revalued at the same rate.
    f) New profit-sharing ratio of partners will be 5:3:2.
    g) Ranvijay will bring ₹1,00,000 as capital and his share of goodwill which was valued at twice the average profit of the last three years ended 31st March 2023, 2022 and 2021 were ₹1,50,000, ₹1,30,000 and ₹1,70,000 respectively.
    Pass necessary journal entries.

    Solution being checked. We show a solution only after an independent check agrees with it.

    OR

    Q24(b) · 6 marks · Long answerReconstitution of a Partnership Firm – Retirement/Death of a Partner

    L, M and N were partners in a firm sharing profit & losses in the ratio of 2:2:3. On 31st March 2023, their Balance Sheet was as follows:

    LiabilitiesAmount(₹)AssetsAmount(₹)
    Creditors80,000Land and Building5,00,000
    Bank overdraft22,000Machinery2,50,000
    Long term debts2,00,000Furniture3,50,000
    Capital A/Cs: L-6,25,000; M-4,00,000; N-5,25,00015,50,000Investments1,00,000
    Employees provident fund38,000Stock4,00,000
    Debtors2,00,000
    Bank20,000
    Deferred Advertisement Expenditure70,000
    18,90,00018,90,000

    On 31st March 2023, M retired from the firm and remaining partners decided to carry on business. It was decided to revalue assets and liabilities as under:
    a) Land and Building be appreciated by ₹2,40,000 and Machinery be depreciated 10%.
    b) 50% of investments were taken by the retiring partner at book value.
    c) Provision for doubtful debts was to be made at 5% on debtors.
    d) Stock will be valued at market price which is ₹1,00,000 less than the book value.
    e) Goodwill of the firm be valued at ₹5,60,000. L and N decided to share future profits and losses in the ratio of 2:3.
    f) The total capital of the new firm will be ₹32,00,000 which will be in proportion of profit-sharing ratio of L and N.
    g) Gain on revaluation account amounted to ₹1,05,000.

    Prepare Partner's Capital accounts and Balance sheet of firm after M's retirement.

    Try it first, then show our solutionSolution

    1. Workings. Revaluation gain ₹ 1,05,000 (L&B +2,40,000, machinery −25,000, provision −10,000, stock −1,00,000) shared 2 : 2 : 3 = ₹ 30,000, ₹ 30,000, ₹ 45,000. Deferred advertisement ₹ 70,000 written off 2 : 2 : 3. M's goodwill share = 5,60,000 × 2/7 = ₹ 1,60,000. Gains: L 2/5 − 2/7 = 4/35, N 3/5 − 3/7 = 6/35 (ratio 2 : 3), so L pays ₹ 64,000 and N ₹ 96,000. New capitals: L 2/5 × 32,00,000 = ₹ 12,80,000; N ₹ 19,20,000.

      1 mark

    2. Partners' Capital Accounts

      ParticularsL (₹)M (₹)N (₹)ParticularsL (₹)M (₹)N (₹)
      To Deferred Advertisement Exp. A/c20,00020,00030,000By Balance b/d6,25,0004,00,0005,25,000
      To Investments A/c50,000By Revaluation A/c30,00030,00045,000
      To M's Capital A/c64,00096,000By L's Capital A/c64,000
      To M's Loan A/c5,20,000By N's Capital A/c96,000
      To Balance c/d12,80,00019,20,000By Bank A/c (balancing figure)7,09,00014,76,000
      13,64,0005,90,00020,46,00013,64,0005,90,00020,46,000
      2½ marks

    3. Balance Sheet as at 31st March, 2023 (after M's retirement). Bank = 20,000 + 7,09,000 + 14,76,000 = ₹ 22,05,000.

      Liabilities₹Assets₹
      Creditors80,000Land and Building7,40,000
      Bank Overdraft22,000Machinery2,25,000
      Long-term Debts2,00,000Furniture3,50,000
      Capital: L12,80,000Investments50,000
      Capital: N19,20,000Stock3,00,000
      Employees' Provident Fund38,000Debtors 2,00,000 less provision 10,0001,90,000
      M's Loan5,20,000Bank22,05,000
      40,60,00040,60,000
      2½ marks

    Answer: M's Loan ₹ 5,20,000; L brings ₹ 7,09,000 and N ₹ 14,76,000; capitals L ₹ 12,80,000, N ₹ 19,20,000; Balance Sheet total ₹ 40,60,000

    Where the marks are

    • Workings for revaluation, goodwill and new capitals (1 mark)
    • Partners' capital accounts (2½ marks)
    • Balance Sheet ₹ 40,60,000 (2½ marks)

    Open Q24(b) on its own page

  25. Q25 · 6 marks · Long answerReconstitution of a Partnership Firm – Retirement/Death of a Partner

    Sandeep, Maheep and Amandeep were partners in a firm sharing profits in the ratio of 2: 2: 1. The firm closes its books on 31st March every year. On 30th June, 2020 Maheep died. The partnership deed provided that on the death of a partner his executors will be entitled to the following:
    a) Balance in his capital account which amounted to ₹1,15,000 and interest on capital till date of death which amounted to ₹5,000.
    b) His share in the profits of the firm till the date of his death amounted to ₹20,000.
    c) His share in the goodwill of the firm. The goodwill of the firm on Maheep's death was valued at ₹1,50,000.
    d) Loan to Maheep amounted ₹20,000.
    It was agreed that the amount will be paid to his executor in three equal yearly instalments with interest @10% p.a. The first instalment was to be paid on 30.06.2021.

    Calculate the amount to be transferred to Maheep's executors Account and prepare the executor's account till it is finally settled.

    Try it first, then show our solutionSolution

    1. Amount due to the executors. Capital ₹ 1,15,000 + interest on capital ₹ 5,000 + profit share ₹ 20,000 + goodwill 2/5 × ₹ 1,50,000 = ₹ 60,000, less loan to Maheep ₹ 20,000 = ₹ 1,80,000. Each instalment repays ₹ 60,000 of principal plus interest at 10% p.a.

      2 marks

    2. Maheep's Executors Account

      Particulars₹Particulars₹
      31.03.2021 To Balance c/d1,93,50030.06.2020 By Maheep's Capital A/c1,80,000
      31.03.2021 By Interest A/c (9 months)13,500
      1,93,5001,93,500
      30.06.2021 To Bank A/c (1st instalment)78,00001.04.2021 By Balance b/d1,93,500
      31.03.2022 To Balance c/d1,29,00030.06.2021 By Interest A/c (3 months)4,500
      31.03.2022 By Interest A/c (9 months)9,000
      2,07,0002,07,000
      30.06.2022 To Bank A/c (2nd instalment)72,00001.04.2022 By Balance b/d1,29,000
      31.03.2023 To Balance c/d64,50030.06.2022 By Interest A/c (3 months)3,000
      31.03.2023 By Interest A/c (9 months)4,500
      1,36,5001,36,500
      30.06.2023 To Bank A/c (3rd instalment)66,00001.04.2023 By Balance b/d64,500
      30.06.2023 By Interest A/c (3 months)1,500
      66,00066,000

      Instalments: ₹ 60,000 + interest on ₹ 1,80,000 for a year (₹ 18,000) = ₹ 78,000; ₹ 60,000 + ₹ 12,000 = ₹ 72,000; ₹ 60,000 + ₹ 6,000 = ₹ 66,000.

      4 marks

    Answer: Amount transferred ₹ 1,80,000; instalments ₹ 78,000 (30.06.2021), ₹ 72,000 (30.06.2022) and ₹ 66,000 (30.06.2023), closing the account

    Where the marks are

    • Amount due ₹ 1,80,000 (2 marks)
    • Executors account with interest split at 31st March each year (4 marks)

    Open Q25 on its own page

  26. Q26 · 6 marks · Long answerIssue and Redemption of Debentures

    On July 01, 2022, Panther Ltd. issued 20,000, 9% Debentures of ₹100 each at 8% premium and redeemable at a premium of 15% in four equal instalments starting from the end of the third year. The balance in Securities Premium on the date of issue of debentures was ₹80,000. Interest on debentures was to be paid on March 31 every year.

    Pass Journal entries for the financial year 2022-23. Also prepare Loss on Issue of Debentures account.

    Try it first, then show our solutionSolution

    1. Issue (1st July, 2022): 20,000 debentures at ₹ 108 = ₹ 21,60,000; premium on redemption 15% = ₹ 3,00,000.

      ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.21,60,000
      To Debenture Application and Allotment A/c21,60,000
      (Being application money received)
      Debenture Application and Allotment A/c Dr.21,60,000
      Loss on Issue of Debentures A/c Dr.3,00,000
      To 9% Debentures A/c20,00,000
      To Securities Premium A/c1,60,000
      To Premium on Redemption of Debentures A/c3,00,000
      (Being 20,000 9% debentures issued at 8% premium, redeemable at 15% premium)
      2 marks

    2. Interest (31st March, 2023) for 9 months: ₹ 20,00,000 × 9% × 9/12 = ₹ 1,35,000.

      ParticularsDr. (₹)Cr. (₹)
      Debenture Interest A/c Dr.1,35,000
      To Debenture holders A/c1,35,000
      (Being interest due for 9 months)
      Debenture holders A/c Dr.1,35,000
      To Bank A/c1,35,000
      (Being interest paid)
      Statement of Profit and Loss Dr.1,35,000
      To Debenture Interest A/c1,35,000
      (Being interest transferred)
      1½ marks

    3. Write-off in the year of issue: Securities Premium available = ₹ 80,000 + ₹ 1,60,000 = ₹ 2,40,000; balance ₹ 60,000 from the Statement of Profit and Loss.

      ParticularsDr. (₹)Cr. (₹)
      Securities Premium A/c Dr.2,40,000
      Statement of Profit and Loss Dr.60,000
      To Loss on Issue of Debentures A/c3,00,000
      (Being loss on issue written off)
      1 mark

    4. Loss on Issue of Debentures Account

      Particulars₹Particulars₹
      01.07.2022 To Premium on Redemption of Debentures A/c3,00,00031.03.2023 By Securities Premium A/c2,40,000
      31.03.2023 By Statement of Profit and Loss60,000
      3,00,0003,00,000
      1½ marks

    Answer: Bank ₹ 21,60,000; allotment with Loss on Issue ₹ 3,00,000 to Debentures ₹ 20,00,000, Securities Premium ₹ 1,60,000, Premium on Redemption ₹ 3,00,000; interest ₹ 1,35,000; loss written off ₹ 2,40,000 from Securities Premium and ₹ 60,000 from the Statement of Profit and Loss

    Where the marks are

    • Issue entries (2 marks)
    • Interest entries (1½ marks)
    • Write-off entry (1 mark)
    • Loss on Issue of Debentures account (1½ marks)

    Open Q26 on its own page

Section B-I

Analysis of Financial Statements

  1. Answer one of these 2 alternatives.

    Q27(a) · 1 mark · MCQAnalysis of Financial Statements

    'Freedom to Choose of method of depreciation' refers to which limitation of financial statement analysis.

    1. (A)Historical analysis.
    2. (B)Qualitative aspect ignored.
    3. (C)Not free from bias.
    4. (D)Ignore Price level Changes.
    Try it first, then show our solutionSolution

    1. The analyst's results depend on accounting policies the firm chose, such as the method of depreciation, which reflect personal judgement.

    2. This is the limitation that financial statement analysis is not free from bias. Option (C).

      1 mark

    Answer: (C) Not free from bias.

    Where the marks are

    • Choice of depreciation method makes the statements judgement-based (1 mark)

    Open Q27(a) on its own page

    OR

    Q27(b) · 1 mark · MCQAccounting Ratios

    ............ is included in current assets while preparing balance sheet as per revised Schedule III but excluded from current assets while calculating Current Ratio

    1. (A)Debtors.
    2. (B)Cash and Cash Equivalent.
    3. (C)Loose tools and Stores and spares.
    4. (D)Prepaid Expense.
    Try it first, then show our solutionSolution

    1. Schedule III shows loose tools and stores and spares under Inventories, a current asset.

    2. For the current ratio they are left out of current assets, as they are not meant to be turned into cash. Option (C).

      1 mark

    Answer: (C) Loose tools and Stores and spares.

    Where the marks are

    • Loose tools and stores and spares excluded for current ratio (1 mark)

    Open Q27(b) on its own page

  2. Q28 · 1 mark · MCQAccounting Ratios

    Debt-Equity Ratio of Dhamaka Ltd is 3 : 1. Which of the following will result in decrease in this ratio?

    1. (A)Issue of Debentures for Cash of ₹2,00,000.
    2. (B)Issue of Debentures of ₹3,00,000 to Vendors from whom Machinery was purchased.
    3. (C)Goods purchased on Credit of ₹1,00,000.
    4. (D)Issue of Equity Shares of ₹2,00,000.
    Try it first, then show our solutionSolution

    1. Debt-equity ratio = long-term debt / shareholders' funds. Debentures (for cash or to vendors) raise debt and the ratio; goods bought on credit change only current liabilities, so the ratio is unchanged.

    2. Issuing equity shares raises shareholders' funds with debt unchanged, so the ratio falls. Option (D).

      1 mark

    Answer: (D) Issue of Equity Shares of ₹2,00,000.

    Where the marks are

    • Equity issue increases the denominator only (1 mark)

    Open Q28 on its own page

  3. Answer one of these 2 alternatives.

    Q29(a) · 1 mark · MCQCash Flow Statement

    Statement I:- Sale of Marketable Securities will result in no flow of Cash.
    Statement II:- Debentures issued as collateral security will result in inflow of cash.

    1. (A)Both Statements are correct.
    2. (B)Both Statements are incorrect.
    3. (C)Statement I is correct and Statement II is incorrect.
    4. (D)Statement I is incorrect and Statement I is correct.
    Try it first, then show our solutionSolution

    1. Marketable securities are cash equivalents, so selling them only converts one form of cash into another: no cash flow. Statement I is correct.

    2. Debentures issued as collateral security bring in no cash at all, so Statement II is incorrect. Option (C).

      1 mark

    Answer: (C) Statement I is correct and Statement II is incorrect.

    Where the marks are

    • Cash-equivalent conversion and collateral debentures (1 mark)

    Open Q29(a) on its own page

    OR

    Q29(b) · 1 mark · MCQCash Flow Statement

    What will be the effect of issue of Bonus shares on Cash Flow Statement?

    1. (A)No effect
    2. (B)Inflow in Financing Activity
    3. (C)Inflow in Operating activity
    4. (D)Inflow in Investing Activity
    Try it first, then show our solutionSolution

    1. A bonus issue capitalises reserves; no cash comes in or goes out.

    2. So it has no effect on the cash flow statement. Option (A).

      1 mark

    Answer: (A) No effect

    Where the marks are

    • Bonus issue is a non-cash transaction (1 mark)

  4. Q30 · 1 mark · MCQCash Flow Statement

    Aditya Sunrise Ltd. provides you the following information:

    Particulars31.3.2023(₹)31.3.2022(₹)
    10% Bank LoanNil1,00,000

    Additional Information:
    1. Equity Share Capital raised during the year ₹3,00,000;
    2. 10% Bank Loan was repaid on 01.04.2022.
    3. Dividend received during the year was ₹20,000.
    4. Dividend Proposed for the year 2021-22 was ₹50,000 but only ₹20,000 was approved by the Shareholders.
    Find out the cash flow from Financing Activities.

    1. (A)₹1,50,000
    2. (B)₹2,00,000
    3. (C)₹1,70,000
    4. (D)₹1,80,000
    Try it first, then show our solutionSolution

    1. Financing inflow: equity shares ₹ 3,00,000. Outflows: bank loan repaid ₹ 1,00,000 (on 1st April, so no interest accrues for the year) and dividend paid for 2021-22, which is the approved ₹ 20,000.

    2. Dividend received is an investing activity. Net = 3,00,000 − 1,00,000 − 20,000 = ₹ 1,80,000. Option (D).

      1 mark

    Answer: (D) ₹ 1,80,000

    Where the marks are

    • Only the approved dividend is paid; dividend received is investing (1 mark)

    Open Q30 on its own page

  5. Q31 · 3 marks · Short answerFinancial Statements of a Company

    Classify the following items under Major heads and Sub heads (If any) in the balance sheet of a Company as per schedule III of the Companies Act 2013.
    i. Loose Tools
    ii. Loan repayable on demand
    iii. Provision for Retirement benefits
    iv. Pre-paid Insurance
    v. Capital advances
    vi. Shares in Listed Companies

    Try it first, then show our solutionSolution

    1. (i) Loose Tools: Current Assets, sub-head Inventories. (ii) Loan repayable on demand: Current Liabilities, Short-term Borrowings.

      1 mark

    2. (iii) Provision for retirement benefits: Non-current Liabilities, Long-term Provisions. (iv) Prepaid insurance: Current Assets, Other Current Assets.

      1 mark

    3. (v) Capital advances: Non-current Assets, Long-term Loans and Advances. (vi) Shares in listed companies: Non-current Assets, Non-current Investments.

      1 mark

    Answer: Loose tools: CA, Inventories; loan repayable on demand: CL, Short-term Borrowings; provision for retirement benefits: NCL, Long-term Provisions; prepaid insurance: CA, Other Current Assets; capital advances: NCA, Long-term Loans and Advances; shares in listed companies: NCA, Non-current Investments

    Where the marks are

    • ½ mark for each correctly classified item (3 marks)

    Open Q31 on its own page

  6. Q32 · 3 marks · Short answerAccounting Ratios

    a) A company had a liquid ratio of 1.5 and current ratio of 2 and inventory turnover ratio 6 times. It had total current assets of ₹8,00,000. Find out annual sales if goods are sold at 25% profit on cost.
    b) Calculate debt to capital employed ratio from the following information.
    Shareholder funds ₹15,00,000
    8% Debenture ₹7,50,000
    Current liabilities ₹2,50,000
    Non-current Assets ₹17,50,000
    Current Assets ₹7,50,000

    Try it first, then show our solutionSolution

    1. (a) Current liabilities = ₹ 8,00,000 / 2 = ₹ 4,00,000; liquid assets = 1.5 × ₹ 4,00,000 = ₹ 6,00,000; inventory = ₹ 2,00,000. Cost of revenue from operations = 6 × ₹ 2,00,000 = ₹ 12,00,000. Gross profit 25% on cost = ₹ 3,00,000. Sales = ₹ 15,00,000.

      2 marks

    2. (b) Capital employed = shareholders' funds ₹ 15,00,000 + debentures ₹ 7,50,000 = ₹ 22,50,000 (also non-current assets + current assets − current liabilities). Debt to capital employed = ₹ 7,50,000 / ₹ 22,50,000 = 0.33 : 1.

      1 mark

    Answer: (a) Revenue from operations ₹ 15,00,000; (b) Debt to capital employed ratio 0.33 : 1

    Where the marks are

    • Sales ₹ 15,00,000 (2 marks)
    • Debt to capital employed 0.33 : 1 (1 mark)

    Open Q32 on its own page

  7. Answer one of these 2 alternatives.

    Q33(a) · 4 marks · Long answerAnalysis of Financial Statements

    From the information extracted from the statement of Profit & Loss of Zee Ltd for the year ended 31st March 2022 and 31st March 2023, prepare a common size statement of profit & loss:

    ParticularsNote No.2022-23(₹)2021-22(₹)
    Revenue from operations8,00,00010,00,000
    Gross Profit60%70%
    Other Expenses2,20,0002,60,000
    Tax Rate50%50%
    Try it first, then show our solutionSolution

    1. Cost of revenue from operations = revenue × (1 − gross profit %): 2022-23 ₹ 8,00,000 × 40% = ₹ 3,20,000; 2021-22 ₹ 10,00,000 × 30% = ₹ 3,00,000. Tax at 50% of profit before tax.

      1 mark

    2. Common Size Statement of Profit and Loss of Zee Ltd.

      Particulars2021-22 (₹)2022-23 (₹)2021-22 (%)2022-23 (%)
      Revenue from operations10,00,0008,00,000100100
      Less: Cost of revenue from operations3,00,0003,20,0003040
      Less: Other expenses2,60,0002,20,0002627.5
      Total expenses5,60,0005,40,0005667.5
      Profit before tax4,40,0002,60,0004432.5
      Less: Tax (50%)2,20,0001,30,0002216.25
      Profit after tax2,20,0001,30,0002216.25
      3 marks

    Answer: PAT ₹ 2,20,000 (22%) in 2021-22 and ₹ 1,30,000 (16.25%) in 2022-23; expenses 56% and 67.5% of revenue

    Where the marks are

    • Cost of revenue from gross profit % (1 mark)
    • Common size statement with percentages (3 marks)

    Open Q33(a) on its own page

    OR

    Q33(b) · 4 marks · Long answerAnalysis of Financial Statements

    From the following information, prepare comparative statement of Profit & Loss

    ParticularsNote No.2022-23(₹)2021-22(₹)
    Revenue from operations10,00,0008,00,000
    Other Income2,20,0001,50,000
    Cost of materials consumed4,00,0003,00,000
    Change in inventories of finished goods and work in progress2,00,0001,00,000
    Other Expenses (% of cost of Revenue from Operations)15%10%
    Tax Rate30%30%

    Solution being checked. We show a solution only after an independent check agrees with it.

  8. Q34 · 6 marks · Long answerCash Flow Statement

    Prepare a Cash Flow Statement from the following Balance Sheets of Arya Ltd.:

    ParticularsNote31.3.2023(₹)31.3.2022(₹)
    I. Equity and Liabilities:
    (1) Shareholders' Funds: a) Share Capital110,00,0008,00,000
    b) Reserves and Surplus26,40,0005,40,000
    (2) Non-Current Liabilities: Long-term Borrowings1,50,0001,00,000
    (3) Current Liabilities: a) Trade Payables330,00012,000
    b) Short-term Provisions30,00028,000
    Total18,50,00014,80,000
    II. Assets: (1) Non-Current Assets: a) Property, Plant and equipment and intangible assets: Property, Plant and Equipment47,75,0004,90,000
    b) Non-current Investments90,00050,000
    (2) Current Assets: a) Inventory6,20,0004,13,000
    b) Trade receivables3,20,0004,94,000
    c) Cash & Cash Equivalents45,00033,000
    Total18,50,00014,80,000

    Notes to Accounts:

    Particulars31.3.202331.3.2022
    1. Reserves & Surplus: General Reserve5,00,0004,30,000
    Capital Reserve60,00050,000
    Surplus i.e. balance in statement of profit and loss80,00060,000
    6,40,0005,40,000
    2. Long-term Borrowings: 10% Debentures1,50,0001,00,000
    3. Short-term Provisions: Provision for tax30,00028,000
    4. Tangible Assets: Plant and Machinery7,75,0004,90,000

    Additional Information:
    1. Tax provided during the year is ₹17,000.
    2. Depreciation charged on plant and Machinery during the year amounted to ₹1,20,000.
    3. Non-current Investments costing ₹30,000 were sold for ₹40,000 during the year. Gain on sale of Investments was credited to Capital Reserve.
    4. Additional Debentures were issued on 31.03.2023.

    Try it first, then show our solutionSolution

    1. Net profit before tax. Increase in surplus ₹ 20,000 + transfer to general reserve ₹ 70,000 + tax provided ₹ 17,000 = ₹ 1,07,000. The ₹ 10,000 gain on sale of investments went straight to Capital Reserve, so it is not in this profit.

      1 mark

    2. A. Operating activities

      Particulars₹
      Net profit before tax1,07,000
      Add: Depreciation1,20,000
      Add: Interest on debentures (10% of 1,00,000)10,000
      Operating profit before working capital changes2,37,000
      Add: Increase in trade payables18,000
      Add: Decrease in trade receivables1,74,000
      Less: Increase in inventory(2,07,000)
      Cash generated from operations2,22,000
      Less: Tax paid (28,000 + 17,000 − 30,000)(15,000)
      Cash flow from operating activities2,07,000
      2 marks

    3. B. Investing activities. Plant purchased = 7,75,000 + 1,20,000 − 4,90,000 = ₹ 4,05,000. Investments purchased = 90,000 − (50,000 − 30,000) = ₹ 70,000. Sale of investments ₹ 40,000. Net cash used = (₹ 4,35,000).

      1½ marks

    4. C. Financing activities. Shares issued ₹ 2,00,000 + debentures issued ₹ 50,000 − interest paid ₹ 10,000 (new debentures issued on 31st March earn none this year) = ₹ 2,40,000.

      1 mark

    5. Net increase = 2,07,000 − 4,35,000 + 2,40,000 = ₹ 12,000; opening cash ₹ 33,000 + ₹ 12,000 = closing cash ₹ 45,000.

      ½ mark

    Answer: Operating ₹ 2,07,000; investing (₹ 4,35,000); financing ₹ 2,40,000; net increase ₹ 12,000 (₹ 33,000 to ₹ 45,000)

    Where the marks are

    • Net profit before tax ₹ 1,07,000 (1 mark)
    • Cash from operating activities ₹ 2,07,000 (2 marks)
    • Investing activities (₹ 4,35,000) (1½ marks)
    • Financing activities ₹ 2,40,000 (1 mark)
    • Reconciliation of cash (½ mark)

    Open Q34 on its own page

Section B-II

Computerised Accounting

  1. Q27 · 1 mark · MCQUse of Spreadsheet in Business Applications

    Which formulae would result in TRUE if C3 is less than 14 and D4 is less than 200?

    1. (A)=AND(C3>14,D4>20)
    2. (B)=AND(C3>14,C4<200)
    3. (C)=AND(C3>14, D4<20)
    4. (D)=AND(C3<14,D4,200)

    Solution being checked. We show a solution only after an independent check agrees with it.

  2. Answer one of these 2 alternatives.

    Q28(a) · 1 mark · MCQSpreadsheet

    When navigating in a work book, which command is used to move to the beginning of the current row?

    1. (A)[Ctrl]+[Home]
    2. (B)[Page Up]
    3. (C)[Home]
    4. (D)[Ctrl]+[Backspace]
    Try it first, then show our solutionSolution

    1. [Ctrl]+[Home] jumps to cell A1, [Page Up] moves one screen up, and [Ctrl]+[Backspace] brings the active cell back into view.

    2. Pressing [Home] alone moves to the first cell (column A) of the current row. Option (C).

      1 mark

    Answer: (C) [Home]

    Where the marks are

    • [Home] goes to the start of the row (1 mark)

    Open Q28(a) on its own page

    OR

    Q28(b) · 1 mark · MCQSpreadsheet

    Which function results can be displayed in Auto Calculate?

    1. (A)SUM and AVERAGE
    2. (B)MAX and LOOK
    3. (C)LABEL and AVERAGE
    4. (D)MIN and BLANK
    Try it first, then show our solutionSolution

    1. Auto Calculate shows quick results for the selected cells in the status bar without entering a formula.

    2. It shows functions such as SUM and AVERAGE (along with COUNT, MIN and MAX). Option (A).

      1 mark

    Answer: (A) SUM and AVERAGE

    Where the marks are

    • Status bar shows SUM and AVERAGE (1 mark)

    Open Q28(b) on its own page

  3. Q29 · 1 mark · MCQUse of Spreadsheet in Business Applications

    What category of functions is used in this formula:=PMT(D11/15,D12,D 12,5)

    1. (A)Logical
    2. (B)Financial
    3. (C)Payment
    4. (D)Statistical
    Try it first, then show our solutionSolution

    1. PMT works out the periodic payment on a loan from rate, number of periods and present value.

    2. It belongs to the Financial category of functions. Option (B).

      1 mark

    Answer: (B) Financial

    Where the marks are

    • PMT is a financial function (1 mark)

  4. Answer one of these 2 alternatives.

    Q30(a) · 1 mark · MCQUse of Spreadsheet in Business Applications

    The syntax of PMT Function is ___________

    1. (A)PMT(rate,pv,nper, [fv],[type])
    2. (B)PMT(rate,nper,pv,[fv],[type])
    3. (C)PMT(rate,pv,nper,[type],[fv])
    4. (D)PMT(rate,nper,pv,[type],[fv])
    Try it first, then show our solutionSolution

    1. PMT takes the interest rate per period first, then the number of periods, then the present value; future value and type are optional.

    2. So the syntax is PMT(rate, nper, pv, [fv], [type]). Option (B).

      1 mark

    Answer: (B) PMT(rate,nper,pv,[fv],[type])

    Where the marks are

    • Correct argument order of PMT (1 mark)

    Open Q30(a) on its own page

    OR

    Q30(b) · 1 mark · MCQGraphs and Charts for Business Data

    In Excel, the chart tools provide three different options ____________, __________ and __________ for formatting.

    1. (A)Layout, Format, Data Maker
    2. (B)Design, Layout, Format
    3. (C)Format, Layout, Label
    4. (D)Design, Data Maker, Layout
    Try it first, then show our solutionSolution

    1. When a chart is selected, Excel shows Chart Tools with contextual tabs for changing the chart.

    2. The three tabs are Design, Layout and Format. Option (B).

      1 mark

    Answer: (B) Design, Layout, Format

    Where the marks are

    • Chart Tools tabs Design, Layout, Format (1 mark)

  5. Q31 · 3 marks · Short answerOverview of Computerised Accounting System

    State any three requirements which should be considered before making an investing decision to choose between 'Desktop database' or 'Server database'.

    Try it first, then show our solutionSolution

    1. What data is to be stored, how much of it, and how it will grow, which decides whether a single-user desktop database is enough.

      1 mark

    2. Who will capture, modify and use the data and how often: many users working at the same time need a server database.

      1 mark

    3. How it will be accessed (over a LAN or the Internet, or by other front-end applications) and what hardware and operating system are available.

      1 mark

    Answer: Any three: what data is to be stored; who will capture or modify it and how often; who will use it and for what tasks; whether other front-end applications will use it; access over LAN/Internet; available hardware and operating system

    Where the marks are

    • 1 mark for each of any three relevant considerations (3 marks)

    Open Q31 on its own page

  6. Q32 · 3 marks · Short answerOverview of Computerised Accounting System

    'Accounting Vouchers used for entry in Tally software'
    Define any three types of vouchers which form the basis of entry in Tally software.

    Try it first, then show our solutionSolution

    1. Contra voucher: records transfers between cash and bank accounts, such as cash deposited into or withdrawn from the bank.

      1 mark

    2. Payment voucher: records all payments made by cash or bank.

      1 mark

    3. Receipt voucher: records all money received in cash or by bank.

      1 mark

    Answer: Contra, Payment and Receipt vouchers (Journal, Sales and Purchase vouchers are also accepted)

    Where the marks are

    • 1 mark for each voucher defined (3 marks)

    Open Q32 on its own page

  7. Answer one of these 2 alternatives.

    Q33(a) · 4 marks · Long answerSpreadsheet

    Explain the use of 'Conditional Formatting'.

    Try it first, then show our solutionSolution

    1. Conditional formatting changes the look of a cell or range automatically when a condition on its value is met.

      1 mark

    2. It highlights the information needed, for example values above a limit or overdue amounts.

      1 mark

    3. It can apply colour scales, data bars and icon sets to show the size of values at a glance.

      1 mark

    4. By drawing attention to exceptions and trends, it helps decision making.

      1 mark

    Answer: Conditional formatting changes the appearance of cells that meet a condition: it highlights needed information, applies colour scales/data bars/icons, and helps decision making

    Where the marks are

    • 1 mark for each use explained (4 marks)

    Open Q33(a) on its own page

    OR

    Q33(b) · 4 marks · Long answerOverview of Computerised Accounting System

    State the features of Computerized Accounting system.

    Try it first, then show our solutionSolution

    1. Simple and integrated: all business activities are linked and reports come from one set of data.

      1 mark

    2. Transparency and control: every transaction can be traced and access is controlled.

      1 mark

    3. Accuracy and speed: calculations and postings are automatic and reports are instant.

      1 mark

    4. Scalability and reliability: it copes with growing volumes and gives dependable results.

      1 mark

    Answer: Simple and integrated; transparency and control; accuracy and speed; scalability; reliability

    Where the marks are

    • 1 mark for each of four features (4 marks)

    Open Q33(b) on its own page

  8. Q34 · 6 marks · Long answerUse of Spreadsheet in Business Applications

    Describe two basic methods of charging depreciation. Differentiate between both of them.

    Try it first, then show our solutionSolution

    1. Straight line method: a fixed amount of depreciation is charged every year, worked out from the asset's cost, salvage value and useful life.

      1 mark

    2. Written down value method: a fixed rate is applied to the asset's book value at the start of each year, so the charge falls every year (also called the declining balance method).

      1 mark

    3. Differences. (1) Amount: equal every year under SLM; decreasing every year under WDV. (2) Base: original cost under SLM; book value each year under WDV.

      2 marks

    4. (3) Book value can reach zero under SLM but never under WDV. (4) The rate is usually lower under SLM and higher under WDV. (5) SLM suits assets with low repairs and little risk of obsolescence; WDV suits assets that become obsolete quickly with changing technology.

      2 marks

    Answer: SLM charges a fixed amount on original cost; WDV charges a fixed rate on the falling book value. Differences: amount (equal vs falling), base (cost vs book value), book value reaching zero, rate (lower vs higher), suitability

    Where the marks are

    • Straight line method explained (1 mark)
    • Written down value method explained (1 mark)
    • Any four differences (4 marks)

    Open Q34 on its own page

Source: official sample paper, cbseacademic.nic.in. Chapter tags and solutions are ours. Spotted a transcription error? Write tosupport@questionbuddy.in.