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CBSE Class 12 Accountancy Sample Paper 2024-25

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AccountancyCBSE Class 12 · Sample paper, session 2024-25

CBSE Class 12 Accountancy: sample paper 2024-25

The sample question paper CBSE published for the 2024-25 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_2024_25/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: Accounting for Partnership Firms and Companies; Q1-16 one mark, Q17-20 three marks, Q21-22 four marks, Q23-26 six marks
B-I27-34Part B Option I: Analysis of Financial Statements; Q27-30 one mark, Q31-32 three marks, Q33 four marks, Q34 six marks
B-II27-34Part B Option II: Computerised Accounting; Q27-30 one mark, Q31-32 three marks, Q33 four marks, Q34 six marks

Instructions in brief: All questions compulsory; Part A compulsory, Part B attempt only one option; no overall choice, internal choice in 7 one-mark, 2 three-mark, 1 four-mark and 2 six-mark questions.

Section A

Part A: Accounting for Partnership Firms and Companies; Q1-16 one mark, Q17-20 three marks, Q21-22 four marks, Q23-26 six marks

  1. Q1 · 1 mark · MCQAccounting for Partnership: Basic Concepts

    Anthony a partner was being guaranteed that his share of profits will not be less than ₹ 60,000 p.a. Deficiency, if any was to be borne by other partners Amar and Akbar equally. For the year ended 31st March, 2024 the firm incurred loss of ₹ 1,80,000. What amount will be debited to Amar’s Capital Account in total at the end of the year?

    1. (A)₹ 60,000
    2. (B)₹ 1,20,000
    3. (C)₹ 90,000
    4. (D)₹ 80,000
    Try it first, then show our solutionSolution

    1. No ratio is given, so the three partners share equally: each bears ₹ 60,000 of the ₹ 1,80,000 loss. Anthony must still get ₹ 60,000, so the deficiency is ₹ 60,000 + ₹ 60,000 = ₹ 1,20,000, borne by Amar and Akbar equally (₹ 60,000 each).

    2. Amar is debited with his own loss ₹ 60,000 plus ₹ 60,000 for the guarantee = ₹ 1,20,000. Option (B).

      1 mark

    Answer: (B) ₹ 1,20,000

    Where the marks are

    • Loss share plus half the deficiency on the guarantee (1 mark)

    Open Q1 on its own page

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

    Assertion: Partner’s current accounts are opened when their capital are fluctuating.
    Reasoning: In case of Fixed capitals all the transactions other than Capital are done through Current account of the partner.

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

    1. Current accounts are opened when capitals are fixed, not fluctuating, so the Assertion is false.

    2. Under fixed capitals, everything other than capital introduced or withdrawn (interest, salary, drawings, profit) goes through the current account, so the Reason is true. Option (D).

      1 mark

    Answer: (D) A is false but R is true

    Where the marks are

    • Current accounts belong to the fixed capital method (1 mark)

    Open Q2 on its own page

  3. Answer one of these 2 alternatives.

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

    Forfeiture of shares leads to reduction of _________________Capital.

    1. (A)Authorised
    2. (B)Issued
    3. (C)Subscribed
    4. (D)Called up
    Try it first, then show our solutionSolution

    1. Forfeited shares stop being held by a subscriber; the company cancels the amount called on them from share capital.

    2. So forfeiture reduces the subscribed capital, while authorised and issued capital stay as they were. Option (C).

      1 mark

    Answer: (C) Subscribed

    Where the marks are

    • Forfeiture cancels subscribed shares (1 mark)

    Open Q3(a) on its own page

    OR

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

    Moon ltd. issued 40,000, 10% debentures of ₹100 each at certain rate of discount and were to be redeemed at 20% premium. Exiting balance of Securities premium before issuing of these debentures was ₹12,00,000 and after writing off loss on issue of debentures , the balance in Securities Premium was ₹2,00,000. At what rate of discount these debentures were issued?

    1. (A)10%
    2. (B)5%
    3. (C)25%
    4. (D)15%
    Try it first, then show our solutionSolution

    1. Face value = 40,000 × ₹ 100 = ₹ 40,00,000. Securities Premium used to write off the loss = ₹ 12,00,000 − ₹ 2,00,000 = ₹ 10,00,000, so loss on issue = ₹ 10,00,000.

    2. Premium on redemption = 20% = ₹ 8,00,000, so discount = ₹ 2,00,000 = 5% of face value. Option (B).

      1 mark

    Answer: (B) 5%

    Where the marks are

    • Loss ₹ 10,00,000 less premium on redemption ₹ 8,00,000 = 5% discount (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

    At the time of admission of new partner Vasu, Old partners Paresh and Prabhav had debtors of ₹ 6,20,000 and a provision for doubtful debts (PDD) of ₹ 20,000 in their books. As per terms of admission, assets were revalued, and it was found that debtors worth ₹ 15,000 had turned bad and hence should be written off. Which journal entry reflects the correct accounting treatment of the above situation?

    1. (A)Bad Debts A/c Dr. 15,000; To Debtors A/c 15,000; Prov for D. debts A/c Dr. 15,000; To Bad Debts A/c 15,000
    2. (B)Bad Debts A/c Dr. 15,000; To Debtors A/c 15,000; Revaluation A/c Dr. 15,000; To Prov for doubt debts A/c 15,000
    3. (C)Revaluation A/c Dr. 15,000; To Debtors A/c 15,000
    4. (D)Bad Debts A/c Dr. 15,000; To Revaluation A/c 15,000
    Try it first, then show our solutionSolution

    1. The existing provision of ₹ 20,000 already covers the ₹ 15,000 of bad debts, and no change in the provision is asked for.

    2. Bad debts are written off and charged to the provision, with no effect on the Revaluation Account. Option (A).

      1 mark

    Answer: (A) Bad Debts A/c Dr. 15,000; To Debtors A/c 15,000; Prov for D. debts A/c Dr. 15,000; To Bad Debts A/c 15,000

    Where the marks are

    • Bad debts set off against the existing provision (1 mark)

    Open Q4(a) on its own page

    OR

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

    Ram and Shyam were partners sharing profits and losses in the ratio of 3:2. Their balance sheet shows building at ₹ 1,60,000. They admitted Mohan as a new partner for 1/4th share. In additional information it is given that building is undervalued by 20%. The share of loss/gain of revaluation of Shyam is ____________ & current value of building shown in new balance sheet is _______.

    1. (A)Gain ₹ 12,800, Value ₹ 1,92,000
    2. (B)Loss ₹ 12,800, Value ₹ 1,28,000
    3. (C)Gain ₹ 16,000, Value ₹ 2,00,000
    4. (D)Gain ₹ 40,000, Value ₹ 2,00,000
    Try it first, then show our solutionSolution

    1. "Undervalued by 20%" means book value = 80% of true value. True value = ₹ 1,60,000 × 100/80 = ₹ 2,00,000, a gain of ₹ 40,000.

    2. The gain goes to old partners 3 : 2, so Shyam gets ₹ 16,000; the building appears at ₹ 2,00,000. Option (C).

      1 mark

    Answer: (C) Gain ₹ 16,000, Value ₹ 2,00,000

    Where the marks are

    • True value ₹ 2,00,000 and Shyam's 2/5 of ₹ 40,000 (1 mark)

    Open Q4(b) on its own page

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

    The profit earned by a firm after retaining ₹ 15,000 to its reserve was ₹ 75,000. The firm had total tangible assets worth ₹ 10,00,000 and outside liabilities ₹ 3,00,000. The value of the goodwill as per capitalization of average profit method was valued as ₹ 50,000. Determine the rate of Normal Rate of Return.

    1. (A)10 %
    2. (B)5 %
    3. (C)12 %
    4. (D)8 %
    Try it first, then show our solutionSolution

    1. Transfer to reserve is an appropriation, so average profit = ₹ 75,000 + ₹ 15,000 = ₹ 90,000. Capital employed = ₹ 10,00,000 − ₹ 3,00,000 = ₹ 7,00,000.

    2. Capitalised value = ₹ 7,00,000 + goodwill ₹ 50,000 = ₹ 7,50,000 = ₹ 90,000 × 100/rate, so rate = 12%. Option (C).

      1 mark

    Answer: (C) 12 %

    Where the marks are

    • Profit before transfer to reserve ₹ 90,000 capitalised to ₹ 7,50,000 (1 mark)

    Open Q5 on its own page

  6. Answer one of these 2 alternatives.

    Q6(a) · 1 mark · MCQAccounting for Share Capital

    Mohit had applied for 900 shares, and was allotted in the ratio 3 : 2. He had paid application money of ₹ 3 per share and couldn’t pay allotment money of ₹ 5 per share. First and Final call of ₹ 2 per share was not yet made by the company. His shares were forfeited. The following entry will be passed

    Share Capital A/c Dr. X
    To Share Forfeited A/c Y
    To Share Allotment A/c Z

    Here X, Y and Z are:

    1. (A)₹ 6,000; ₹ 2,700; ₹ 3,300
    2. (B)₹ 4,800; ₹ 2,700; ₹ 2,100
    3. (C)₹ 4,800; ₹ 1,800; ₹ 3,000
    4. (D)₹ 6,000; ₹ 1,800; ₹ 4,200
    Try it first, then show our solutionSolution

    1. Mohit got 600 shares (900 × 2/3). He paid 900 × ₹ 3 = ₹ 2,700; ₹ 1,800 was due on application, so ₹ 900 excess went to allotment.

    2. Allotment due 600 × ₹ 5 = ₹ 3,000, unpaid ₹ 2,100. Share Capital Dr. 600 × ₹ 8 = ₹ 4,800 (only ₹ 8 called); Forfeited ₹ 2,700; Allotment ₹ 2,100. Option (B).

      1 mark

    Answer: (B) ₹ 4,800; ₹ 2,700; ₹ 2,100

    Where the marks are

    • Called-up capital ₹ 4,800, amount paid ₹ 2,700, unpaid allotment ₹ 2,100 (1 mark)

    Open Q6(a) on its own page

    OR

    Q6(b) · 1 mark · MCQAccounting for Share Capital

    A company forfeited 6,000 shares of ₹ 10 each, on which only application money of ₹ 3 has been paid. 4,000 of these shares were re-issued at ₹ 12 per share as fully paid up. Amount of Capital Reserve will be _______.

    1. (A)₹ 18,000
    2. (B)₹ 12,000
    3. (C)₹ 30,000
    4. (D)₹ 24,000
    Try it first, then show our solutionSolution

    1. Forfeited amount = ₹ 3 per share. The 4,000 shares are reissued at ₹ 12 (a premium), so no discount is set against forfeiture.

    2. All of their forfeited money goes to Capital Reserve: 4,000 × ₹ 3 = ₹ 12,000. Option (B).

      1 mark

    Answer: (B) ₹ 12,000

    Where the marks are

    • Forfeited ₹ 3 on each of 4,000 reissued shares (1 mark)

    Open Q6(b) on its own page

  7. Q7 · 1 mark · MCQCompetency-basedIssue and Redemption of Debentures

    On 1st April 2019 a company took a loan of ₹80,00,000 on security of land and building. This loan was further secured by issue of 40,000, 12% Debentures of ₹100 each as collateral security. On 31st March 2024 the company defaulted on repayment of the principal amount of this loan consequently on 1st April 2024 the land and building were taken over and sold by the bank for ₹70,00,000. For the balance amount debentures were sold in the market on 1st May 2024. From which date would the interest on debentures become payable by the company?

    1. (A)1st April 2019.
    2. (B)31st March 2024.
    3. (C)1st April 2024.
    4. (D)1st May 2024.
    Try it first, then show our solutionSolution

    1. Debentures issued as collateral security carry no interest while they are only a security.

    2. Interest becomes payable when the bank sells them to outsiders, on 1st May, 2024. Option (D).

      1 mark

    Answer: (D) 1st May 2024.

    Where the marks are

    • Interest runs from the date collateral debentures are actually sold (1 mark)

    Open Q7 on its own page

  8. Answer one of these 2 alternatives.

    Q8(a) · 1 mark · MCQDissolution of Partnership Firm

    Rama, a partner took over Machinery of ₹ 50,000 in full settlement of her Loan of ₹ 60,000. Machinery was already transferred to Realisation Account. How it will effect the Realisation Account?

    1. (A)Realisation Account will be credited by ₹ 60,000
    2. (B)Realisation Account will be credited by ₹ 10,000
    3. (C)Realisation Account will be credited by ₹ 50,000
    4. (D)No effect on Realisation Account
    Try it first, then show our solutionSolution

    1. A partner's loan is not transferred to Realisation A/c. Rama gives up her loan of ₹ 60,000 in exchange for machinery already in the Realisation A/c.

    2. The entry is Rama's Loan A/c Dr. ₹ 60,000 to Realisation A/c, so Realisation is credited ₹ 60,000. Option (A).

      1 mark

    Answer: (A) Realisation Account will be credited by ₹ 60,000

    Where the marks are

    • Value given up (loan ₹ 60,000) credited to Realisation (1 mark)

    Open Q8(a) on its own page

    OR

    Q8(b) · 1 mark · MCQDissolution of Partnership Firm

    Dada, Yuvi and Viru were partners sharing profits and losses in the ratio 3:2:1. Their books showed Workmen Compensation Reserve of ₹ 1,00,000. Workmen Claim amounted to ₹ 60,000. How it will affect the books of Accounts at the time of dissolution of firm?

    1. (A)Only ₹ 40,000 will be distributed amongst partner’s capital account
    2. (B)₹ 1,00,000 will be credited to Realisation Account and ₹ 60,000 will be paid off.
    3. (C)₹ 60,000 will be credited to Realisation Account and will be even paid off. Balance ₹ 40,000 will be distributed amongst partners.
    4. (D)Only ₹ 60,000 will be credited to Realisation Account and will be even paid off
    Try it first, then show our solutionSolution

    1. On dissolution the claim of ₹ 60,000 is a liability: it is credited to Realisation A/c and paid.

    2. The surplus reserve of ₹ 40,000 belongs to the partners and is credited to their capitals. Option (C).

      1 mark

    Answer: (C) ₹ 60,000 will be credited to Realisation Account and will be even paid off. Balance ₹ 40,000 will be distributed amongst partners.

    Where the marks are

    • Claim through Realisation, surplus to partners (1 mark)

    Open Q8(b) on its own page

  9. Q9 · 1 mark · MCQAccounting for Partnership: Basic Concepts

    Ikka, Dukka and Teeka were partners sharing profits and losses in the ratio of 2:2:1. Their fixed Capital balances were ₹ 5,00,000; ₹ 4,00,000 and ₹ 3,00,000 respectively. For the year ended March 31, 2024 profits of ₹ 84,000 were distributed without providing for Interest on Capital @ 10% p.a as per the partnership deed. While passing an adjustment entry, which of the following is correct?

    1. (A)Teeka will be debited by ₹ 4,200
    2. (B)Teeka will be credited by ₹ 4,200
    3. (C)Teeka will be credited by ₹ 6,000
    4. (D)Teeka will be debited by ₹ 6,000
    Try it first, then show our solutionSolution

    1. Interest on capital at 10% would be ₹ 50,000 + ₹ 40,000 + ₹ 30,000 = ₹ 1,20,000, more than the profit of ₹ 84,000. Interest is an appropriation, so the profit is shared in the interest ratio 5 : 4 : 3: Teeka gets ₹ 21,000.

    2. Teeka was given 1/5 × ₹ 84,000 = ₹ 16,800, so he is credited ₹ 4,200. Option (B).

      1 mark

    Answer: (B) Teeka will be credited by ₹ 4,200

    Where the marks are

    • Profit short of interest is shared in the interest ratio (1 mark)

    Open Q9 on its own page

  10. Q10 · 1 mark · MCQDissolution of Partnership Firm

    At the time of dissolution Machinery appears at ₹ 10,00,000 and accumulated depreciation for the machinery appears at ₹ 6,00,000 in the balance sheet of a firm. This machine is taken over by a creditor of ₹ 5,40,000 at 5% below the net value. The balance amount of the creditor was paid through bank. By what amount should the bank account be credited for this transaction?

    1. (A)₹ 60,000.
    2. (B)₹ 1,60,000.
    3. (C)₹ 5,40,000.
    4. (D)₹ 4,00,000.
    Try it first, then show our solutionSolution

    1. Net value = ₹ 10,00,000 − ₹ 6,00,000 = ₹ 4,00,000; taken over at 5% less = ₹ 3,80,000.

    2. Creditor of ₹ 5,40,000 is paid the balance ₹ 1,60,000 through bank. Option (B).

      1 mark

    Answer: (B) ₹ 1,60,000.

    Where the marks are

    • Creditor takes machinery at ₹ 3,80,000; rest paid by bank (1 mark)

    Open Q10 on its own page

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

    Rahul, Samarth and Ayaan were partners sharing profits and losses in the ratio of 5:4:3. Ayaan’s fixed Capital balance as on March 31, 2024 was ₹ 2,70,000. Which of the following items would have affected this Capital balance?

    1. (A)Profit/Loss for the year
    2. (B)Additional Capital introduced
    3. (C)Reduction in Capital due to Capital Adjustment
    4. (D)Both B and C
    Try it first, then show our solutionSolution

    1. Under the fixed capital method, profit, salary, interest and drawings go to the current account.

    2. Only capital introduced or permanently withdrawn changes the fixed capital: B and C. Option (D).

      1 mark

    Answer: (D) Both B and C

    Where the marks are

    • Only capital additions and reductions change fixed capital (1 mark)

    Open Q11 on its own page

  12. Q12 · 1 mark · MCQAccounting for Share Capital

    Shares issued as sweat equity can be
    (I) Issued at par.
    (ii) Issued at discount.
    (iii) Issued at a premium.
    Which of the following is correct?

    1. (A)Only (i) is correct.
    2. (B)Both (i) and (iii) are correct.
    3. (C)All are correct.
    4. (D)Only (ii) is correct.
    Try it first, then show our solutionSolution

    1. Sweat equity shares are issued to employees or directors for know-how or value additions, under Section 54 of the Companies Act, 2013.

    2. They may be issued at par, at a premium or at a discount, so all three are correct. Option (C).

      1 mark

    Answer: (C) All are correct.

    Where the marks are

    • Sweat equity can be issued at par, premium or discount (1 mark)

    Open Q12 on its own page

  13. Q13 · 1 mark · MCQAccounting for Share Capital

    2,000 shares allotted to Ms. Regal, on which ₹ 80 each called up and ₹ 50 paid were forfeited and reissued for ₹ 70 each as ₹ 90 paid up. Amount transferred to capital reserve A/c is

    1. (A)₹ 1,00,000
    2. (B)₹ 60,000
    3. (C)₹ 40,000
    4. (D)₹ 20,000
    Try it first, then show our solutionSolution

    1. Forfeited amount = 2,000 × ₹ 50 = ₹ 1,00,000. Reissue at ₹ 70 as ₹ 90 paid up allows a discount of ₹ 20 a share = ₹ 40,000.

    2. Capital Reserve = ₹ 1,00,000 − ₹ 40,000 = ₹ 60,000. Option (B).

      1 mark

    Answer: (B) ₹ 60,000

    Where the marks are

    • Forfeited ₹ 1,00,000 less discount ₹ 40,000 (1 mark)

    Open Q13 on its own page

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

    Joey, Sam and Tex were partners sharing profits and losses in the ratio 5:3:2. W.e.f 01 April, 2024 they decided to share future profits and losses in the ratio 2:1:1. For which of the following balances Tex will be credited at the time of reconstitution of firm, if the firm decided to continue with available accumulated profits and losses balances.

    1. (A)General Reserve ₹ 2,00,000 and Profit and Loss (Dr.) ₹ 1,20,000
    2. (B)General Reserve ₹ 2,00,000 and Profit and Loss (Cr.) ₹ 2,50,000
    3. (C)Deferred Revenue Expenditure ₹ 50,000 and Profit and Loss (Cr.) ₹ 80,000
    4. (D)Deferred Revenue Expenditure ₹ 50,000 and Profit and Loss (Dr.) ₹ 80,000
    Try it first, then show our solutionSolution

    1. If the balances are kept, the gaining partner compensates the sacrificing partners. Tex goes from 2/10 to 1/4, a gain, so he is debited for net accumulated profits and credited for net accumulated losses.

    2. Only (D) is a net loss: Deferred Revenue Expenditure ₹ 50,000 + P&L (Dr.) ₹ 80,000. So Tex is credited. Option (D).

      1 mark

    Answer: (D) Deferred Revenue Expenditure ₹ 50,000 and Profit and Loss (Dr.) ₹ 80,000

    Where the marks are

    • Gaining partner is credited only for net accumulated losses (1 mark)

    Open Q14 on its own page

  15. Answer one of these 2 alternatives.

    Q15(a) · 1 mark · MCQReconstitution of a Partnership Firm – Admission of a Partner

    Rohit, Virat and Shikhar were partners sharing profits and losses in the ratio 3:1:1. Their Capital balance as on March 31, 2024 was ₹ 3,00,000; ₹ 2,70,000 and ₹ 2,50,000 respectively. On the same date, they admitted Hardik as a new partner for 20% share. Hardik was to bring ₹ 80,000 for his share of goodwill and 1/5 of the combined capital of all the partners of new firm. What will be the amount of capital brought in by Hardik on his admission as a new partner?

    1. (A)₹ 2,25,000
    2. (B)₹ 1,80,000
    3. (C)₹ 2,60,000
    4. (D)₹ 3,05,000
    Try it first, then show our solutionSolution

    1. Hardik's ₹ 80,000 for goodwill is credited to the old partners, so their capitals become ₹ 8,20,000 + ₹ 80,000 = ₹ 9,00,000 for an 80% share.

    2. Total capital = ₹ 9,00,000 / 80% = ₹ 11,25,000; Hardik's 1/5 = ₹ 2,25,000. Option (A).

      1 mark

    Answer: (A) ₹ 2,25,000

    Where the marks are

    • Adjusted old capitals ₹ 9,00,000 are 4/5 of the total (1 mark)

    Open Q15(a) on its own page

    OR

    Q15(b) · 1 mark · MCQReconstitution of a Partnership Firm – Retirement/Death of a Partner

    A, B and C were partners sharing profits and losses equally. B died on 31 August, 2023 and total amount transferred to B’s executors was ₹ 13,20,000. B’s executors were being paid ₹ 1,20,000 immediately and balance was to be paid in four equal semi-annual instalments together with interest @ 10% p.a. Total amount of interest to be credited to B’s executors Account for the year ended March 31, 2024 will be?

    1. (A)₹ 70,000
    2. (B)₹ 67,500
    3. (C)₹ 60,000
    4. (D)₹ 77,000
    Try it first, then show our solutionSolution

    1. Balance ₹ 12,00,000 is paid in four half-yearly instalments of ₹ 3,00,000, the first on 29th February, 2024. Interest 1st September to 29th February on ₹ 12,00,000 at 10% for 6 months = ₹ 60,000.

    2. Interest for March on ₹ 9,00,000 = ₹ 7,500. Total for the year = ₹ 67,500. Option (B).

      1 mark

    Answer: (B) ₹ 67,500

    Where the marks are

    • Six months on ₹ 12,00,000 and one month on ₹ 9,00,000 (1 mark)

    Open Q15(b) on its own page

  16. Q16 · 1 mark · MCQReconstitution of a Partnership Firm – Admission of a Partner

    String and Kite were partners sharing profits and losses in the ratio 5:3. They admitted spinner as a new partner. String sacrificed ¼ from his share and Kite sacrificed 1/6 of his share. What will be the new ratio?

    1. (A)6:5:5
    2. (B)9:5:10
    3. (C)15:10:7
    4. (D)35:21:40
    Try it first, then show our solutionSolution

    1. The wording differs: String sacrificed 1/4 from his share (1/4 of the firm), while Kite sacrificed 1/6 of his share (1/6 × 3/8 = 1/16).

    2. String = 5/8 − 1/4 = 6/16; Kite = 3/8 − 1/16 = 5/16; Spinner = 1/4 + 1/16 = 5/16. New ratio 6 : 5 : 5. Option (A).

      1 mark

    Answer: (A) 6:5:5

    Where the marks are

    • String gives 1/4 of the firm, Kite 1/6 of his own share (1 mark)

    Open Q16 on its own page

  17. Q17 · 3 marks · Short answerDissolution of Partnership Firm

    Rusting, a partner of a firm under dissolution was to get a remuneration 2% of the total assets realised other than cash and 10% of the amount distributed to the partners. Sundry assets (including Cash ₹ 8,000) realised at ₹ 1,16,000 and sundry liabilities to be paid ₹ 31,340. Calculate Rustings’s remuneration and Show your workings clearly. Also pass necessary journal entry for remuneration.

    Try it first, then show our solutionSolution

    1. 2% of assets realised other than cash: ₹ 1,16,000 − ₹ 8,000 = ₹ 1,08,000; 2% = ₹ 2,160.

      1 mark

    2. 10% of the amount distributed to partners. After paying liabilities, everything left goes to the partners (Rusting's remuneration is itself credited to a partner): ₹ 1,16,000 − ₹ 31,340 = ₹ 84,660; 10% = ₹ 8,466. Total remuneration = ₹ 2,160 + ₹ 8,466 = ₹ 10,626.

      1 mark

    3. Entry

      ParticularsDr. (₹)Cr. (₹)
      Realisation A/c Dr.10,626
      To Rusting's Capital A/c10,626
      (Being remuneration payable to Rusting)
      1 mark

    Answer: Remuneration ₹ 10,626 (₹ 2,160 + ₹ 8,466); Realisation A/c Dr. ₹ 10,626 to Rusting's Capital A/c

    Where the marks are

    • 2% on non-cash assets realised ₹ 2,160 (1 mark)
    • 10% of ₹ 84,660 = ₹ 8,466 (1 mark)
    • Journal entry (1 mark)

    Open Q17 on its own page

  18. Answer one of these 2 alternatives.

    Q18(a) · 3 marks · Short answerReconstitution of a Partnership Firm – Retirement/Death of a Partner

    A, B and C were partners sharing profits, and losses in the ratio of 2:2:1. C died on 1st July, 2023 on which date the capitals of A, B and C after all necessary adjustments stood at ₹74,000, ₹ 63,750 and 42,250 respectively. A and B continued to carry on the business for six months without settling the accounts of C. During the period of six months from 1 -7-2023, a profit of ₹ 20,500 is earned using the firm’s property. State which of the two options available u/s 37 of the Indian Partnership Act, 1932 should be exercised by executors of C and why?.

    Try it first, then show our solutionSolution

    1. Section 37 gives the executors a choice: a share of the profits made with C's money, or interest at 6% p.a. on it. Total capital = ₹ 74,000 + ₹ 63,750 + ₹ 42,250 = ₹ 1,80,000. Option (i): profit attributable to C's capital = ₹ 20,500 × 42,250/1,80,000 = ₹ 4,812.

      1 mark

    2. Option (ii): interest = ₹ 42,250 × 6/100 × 6/12 = ₹ 1,267.50.

      1 mark

    3. The executors should choose option (i), the share of profit, as ₹ 4,812 is more than ₹ 1,267.50.

      1 mark

    Answer: Option (i): share of profit ₹ 4,812 against interest ₹ 1,267.50; executors should take the share of profit

    Where the marks are

    • Share of profit ₹ 4,812 (1 mark)
    • Interest ₹ 1,267.50 (1 mark)
    • Choice with reason (1 mark)

    Open Q18(a) on its own page

    OR

    Q18(b) · 3 marks · Short answerReconstitution of a Partnership Firm – Admission of a Partner

    Amit and Kartik are partners sharing profits and losses equally. They decided to admit Saurabh for an equal share in the profits. For this purpose, the goodwill of the firm was to be valued at four years' purchase of super profits.
    The Balance Sheet of the firm on Saurabh's admission was as follows:

    LiabilitiesAmount (₹)AssetsAmount (₹)
    Capital Accounts: Amit 90,000; Kartik 50,0001,40,000Fixed Assets (Tangible)75,000
    Creditors5,000Furniture15,000
    General Reserve20,000Stock30,000
    Bills payable25,000Debtors20,000
    Cash50,000
    1,90,0001,90,000

    The normal rate of return is 12% p.a. Average profit of the firm for the last four years was ₹30,000. Calculate Saurabh’s share of goodwill.

    Try it first, then show our solutionSolution

    1. Capital employed = capitals ₹ 1,40,000 + general reserve ₹ 20,000 = ₹ 1,60,000 (also total assets ₹ 1,90,000 − creditors ₹ 5,000 − bills payable ₹ 25,000). Normal profit at 12% = ₹ 19,200.

      1 mark

    2. Super profit = ₹ 30,000 − ₹ 19,200 = ₹ 10,800. Goodwill = 4 × ₹ 10,800 = ₹ 43,200.

      1 mark

    3. Saurabh gets an equal (1/3) share: ₹ 43,200 × 1/3 = ₹ 14,400.

      1 mark

    Answer: Goodwill ₹ 43,200; Saurabh's share ₹ 14,400

    Where the marks are

    • Capital employed and normal profit (1 mark)
    • Super profit and goodwill (1 mark)
    • Saurabh's share (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

    Buddha Limited took over assets of ₹ 40,00,000 and liabilities of ₹ 6,50,000 of Ginny Limited. Buddha Limited issued 30,000, 8% Debentures of ₹ 100 each at 10% discount, to be redeemed at 5% premium along with cheque of ₹ 5,00,000. Pass necessary journal entries in the books of Buddha Ltd.

    Try it first, then show our solutionSolution

    1. Net assets = ₹ 40,00,000 − ₹ 6,50,000 = ₹ 33,50,000. Consideration = 30,000 × ₹ 90 + ₹ 5,00,000 = ₹ 32,00,000, so Capital Reserve = ₹ 1,50,000.

      ParticularsDr. (₹)Cr. (₹)
      Sundry Assets A/c Dr.40,00,000
      To Sundry Liabilities A/c6,50,000
      To Ginny Ltd.32,00,000
      To Capital Reserve A/c1,50,000
      (Being business taken over and capital reserve recorded)
      1½ marks

    2. Loss on issue = discount ₹ 3,00,000 + premium on redemption 5% ₹ 1,50,000 = ₹ 4,50,000.

      ParticularsDr. (₹)Cr. (₹)
      Ginny Ltd. Dr.32,00,000
      Loss on Issue of Debentures A/c Dr.4,50,000
      To 8% Debentures A/c30,00,000
      To Premium on Redemption of Debentures A/c1,50,000
      To Bank A/c5,00,000
      (Being purchase consideration discharged)
      1½ marks

    Answer: Assets ₹ 40,00,000 Dr. to Liabilities ₹ 6,50,000, Ginny Ltd. ₹ 32,00,000 and Capital Reserve ₹ 1,50,000; Ginny Ltd. ₹ 32,00,000 and Loss on Issue ₹ 4,50,000 Dr. to 8% Debentures ₹ 30,00,000, Premium on Redemption ₹ 1,50,000 and Bank ₹ 5,00,000

    Where the marks are

    • Business taken over with capital reserve (1½ marks)
    • Discharge by debentures and cheque (1½ marks)

    Open Q19(a) on its own page

    OR

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

    A company forfeited 8,000 shares of ₹ 10 each on which ₹ 8 were called (including ₹ 1 premium) and ₹ 6 was paid (including ₹ 1 premium). Out of these 5,000 shares were re-issued at maximum possible discount. Pass necessary journal entries.

    Try it first, then show our solutionSolution

    1. Called ₹ 8 includes ₹ 1 premium, so ₹ 7 of capital is called; paid ₹ 6 includes ₹ 1 premium, so ₹ 5 of capital is received. Premium has been received, so it is not touched.

      ParticularsDr. (₹)Cr. (₹)
      Share Capital A/c Dr.56,000
      To Share Forfeited A/c40,000
      To Calls in Arrears A/c16,000
      (Being 8,000 shares forfeited)
      1½ marks

    2. Maximum discount on reissue = ₹ 5 per share (the forfeited amount). The 5,000 shares are reissued as ₹ 7 paid up for ₹ 2 each.

      ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.10,000
      Share Forfeited A/c Dr.25,000
      To Share Capital A/c35,000
      (Being 5,000 shares reissued at the maximum discount)
      1½ marks

    Answer: Share Capital Dr. ₹ 56,000 to Share Forfeited ₹ 40,000 and Calls in Arrears ₹ 16,000; Bank ₹ 10,000 and Share Forfeited ₹ 25,000 Dr. to Share Capital ₹ 35,000 (no capital reserve)

    Where the marks are

    • Forfeiture entry (1½ marks)
    • Reissue at maximum discount (1½ marks)

    Open Q19(b) on its own page

  20. Q20 · 3 marks · Short answerReconstitution of a Partnership Firm – Retirement/Death of a Partner

    Bat, Cat and Rat were partners sharing profits and losses in the ratio 5:3:2. Cat retired and on that date there was a balance of Investment of ₹ 4,00,000 and Investment Fluctuation Reserve of ₹ 1,00,000 was appearing in the balance sheet.
    Pass necessary journal entries for Investment Fluctuation reserve in the following cases.
    (i) Market Value of Investments was ₹ 4,80,000.
    (ii) Market Value of Investments was ₹ 3,80,000.
    (iii) Market Value of Investments was ₹ 2,90,000

    Try it first, then show our solutionSolution

    1. (i) Market value ₹ 4,80,000 (rise ₹ 80,000): the whole reserve goes to partners 5 : 3 : 2 and the rise is a revaluation gain.

      ParticularsDr. (₹)Cr. (₹)
      Investment Fluctuation Reserve A/c Dr.1,00,000
      To Bat's Capital A/c50,000
      To Cat's Capital A/c30,000
      To Rat's Capital A/c20,000
      (Being reserve distributed in old ratio)
      Investment A/c Dr.80,000
      To Revaluation A/c80,000
      (Being increase in value of investments)
      Revaluation A/c Dr.80,000
      To Bat's Capital A/c40,000
      To Cat's Capital A/c24,000
      To Rat's Capital A/c16,000
      (Being revaluation gain transferred to partners)
      1 mark

    2. (ii) Market value ₹ 3,80,000 (fall ₹ 20,000): the reserve meets the fall and ₹ 80,000 is left for partners.

      ParticularsDr. (₹)Cr. (₹)
      Investment Fluctuation Reserve A/c Dr.1,00,000
      To Investment A/c20,000
      To Bat's Capital A/c40,000
      To Cat's Capital A/c24,000
      To Rat's Capital A/c16,000
      (Being fall in investments met and balance of reserve distributed)
      1 mark

    3. (iii) Market value ₹ 2,90,000 (fall ₹ 1,10,000): the reserve covers ₹ 1,00,000; the extra ₹ 10,000 is a revaluation loss.

      ParticularsDr. (₹)Cr. (₹)
      Investment Fluctuation Reserve A/c Dr.1,00,000
      Revaluation A/c Dr.10,000
      To Investment A/c1,10,000
      (Being fall in value of investments)
      Bat's Capital A/c Dr.5,000
      Cat's Capital A/c Dr.3,000
      Rat's Capital A/c Dr.2,000
      To Revaluation A/c10,000
      (Being revaluation loss shared in old ratio)
      1 mark

    Answer: (i) IFR ₹ 1,00,000 to partners ₹ 50,000/30,000/20,000; gain ₹ 80,000 to partners ₹ 40,000/24,000/16,000. (ii) IFR ₹ 1,00,000 to Investment ₹ 20,000 and partners ₹ 40,000/24,000/16,000. (iii) IFR ₹ 1,00,000 and Revaluation ₹ 10,000 to Investment ₹ 1,10,000; loss ₹ 5,000/3,000/2,000

    Where the marks are

    • Case (i) (1 mark)
    • Case (ii) (1 mark)
    • Case (iii) (1 mark)

    Open Q20 on its own page

  21. Q21 · 4 marks · Very short answerAccounting for Share Capital

    A company forfeited certain number of shares of Face Value ₹ 10 each, for non-payment of final call money of ₹ 4. These shares were reissued at a discount of ₹ 5 and amount of ₹ 4500 was transferred to capital Reserve account. Pass the necessary journal entries to show the above transactions and prepare Share forfeited account.

    Try it first, then show our solutionSolution

    1. ₹ 6 was paid on each share (₹ 10 less the ₹ 4 final call). Reissue at ₹ 5 discount leaves ₹ 1 per share for Capital Reserve, so ₹ 4,500 / ₹ 1 = 4,500 shares.

      ParticularsDr. (₹)Cr. (₹)
      Share Capital A/c Dr.45,000
      To Share Forfeited A/c27,000
      To Share Final Call A/c18,000
      (Being 4,500 shares forfeited)
      1 mark

    2. Reissue of 4,500 shares at ₹ 5 each.

      ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.22,500
      Share Forfeited A/c Dr.22,500
      To Share Capital A/c45,000
      (Being 4,500 shares reissued at ₹ 5 discount)
      1 mark

    3. Transfer of gain (₹ 6 − ₹ 5 = ₹ 1 a share).

      ParticularsDr. (₹)Cr. (₹)
      Share Forfeited A/c Dr.4,500
      To Capital Reserve A/c4,500
      (Being gain on reissue transferred to Capital Reserve)
      1 mark

    4. Share Forfeited Account

      Particulars₹Particulars₹
      To Share Capital A/c22,500By Share Capital A/c27,000
      To Capital Reserve A/c4,500
      27,00027,000
      1 mark

    Answer: 4,500 shares: Share Capital ₹ 45,000 to Forfeited ₹ 27,000 and Final Call ₹ 18,000; Bank ₹ 22,500 and Forfeited ₹ 22,500 to Share Capital ₹ 45,000; Forfeited ₹ 4,500 to Capital Reserve

    Where the marks are

    • Forfeiture entry (1 mark)
    • Reissue entry (1 mark)
    • Capital reserve entry (1 mark)
    • Share Forfeited Account (1 mark)

    Open Q21 on its own page

  22. Q22 · 4 marks · Very short answerReconstitution of a Partnership Firm – Retirement/Death of a Partner

    X, Y and Z were partners sharing profits and losses equally. Y died on 1st October, 2023 and total amount transferred to Y’s executors was ₹ 15,60,000. Y’s executors were being paid ₹ 3,60,000 immediately and balance was to be paid in four equal quarterly instalments, together with Interest @ 6% p.a. Pass entries till payment of first two instalments.

    Try it first, then show our solutionSolution

    1. 1st October, 2023

      ParticularsDr. (₹)Cr. (₹)
      Y's Capital A/c Dr.15,60,000
      To Y's Executors A/c15,60,000
      (Being amount due transferred to executors)
      Y's Executors A/c Dr.3,60,000
      To Bank A/c3,60,000
      (Being immediate payment made)
      1 mark

    2. 31st December, 2023: balance ₹ 12,00,000 in four quarterly instalments of ₹ 3,00,000. Interest for the quarter = ₹ 12,00,000 × 6% × 3/12 = ₹ 18,000.

      ParticularsDr. (₹)Cr. (₹)
      Interest A/c Dr.18,000
      To Y's Executors A/c18,000
      (Being interest due)
      Y's Executors A/c Dr.3,18,000
      To Bank A/c3,18,000
      (Being first instalment with interest paid)
      1½ marks

    3. 31st March, 2024: interest on ₹ 9,00,000 for 3 months = ₹ 13,500.

      ParticularsDr. (₹)Cr. (₹)
      Interest A/c Dr.13,500
      To Y's Executors A/c13,500
      (Being interest due)
      Y's Executors A/c Dr.3,13,500
      To Bank A/c3,13,500
      (Being second instalment with interest paid)
      1½ marks

    Answer: Transfer ₹ 15,60,000 and pay ₹ 3,60,000; 31.12.2023 interest ₹ 18,000, pay ₹ 3,18,000; 31.03.2024 interest ₹ 13,500, pay ₹ 3,13,500

    Where the marks are

    • Transfer and immediate payment (1 mark)
    • First instalment with interest (1½ marks)
    • Second instalment with interest (1½ marks)

    Open Q22 on its own page

  23. Answer one of these 2 alternatives.

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

    K.N. Ltd. invited applications for issuing 6,00,000 equity shares of ₹10 each at a premium of ₹3 per share. The amount was payable as follows: On Application and Allotment - ₹3 per share; On First Call -₹4 per share; On Second and Final Call — Balance (including premium). The issue was oversubscribed by 1,50,000 shares. Applications for 50,000 shares were rejected and the application money was refunded. Shares were allotted to the remaining applicants as follows:
    Category I: Those who had applied for 4,00,000 shares were allotted 3,00,000 shares on pro-rata basis.
    Category II: The remaining applicants were allotted the remaining shares.
    Excess application money received with applications was adjusted towards sums due on first call. Rakesh to whom 6,000 shares were allotted (out of Category I) failed to pay the first call money. His shares were forfeited. The forfeited shares were re-issued at ₹13 per share fully paid up after the second call. Pass necessary journal entries for the above transactions in the books of K.N. Ltd.

    Try it first, then show our solutionSolution

    1. Applications = 6,00,000 + 1,50,000 = 7,50,000 shares; 50,000 rejected. Category I applied for 4,00,000 and got 3,00,000 (excess 1,00,000 × ₹ 3 = ₹ 3,00,000 to first call); Category II got what it applied for.

      ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.22,50,000
      To Share Application and Allotment A/c22,50,000
      (Being application money received on 7,50,000 shares)
      Share Application and Allotment A/c Dr.22,50,000
      To Equity Share Capital A/c18,00,000
      To Share First Call A/c3,00,000
      To Bank A/c1,50,000
      (Being application money adjusted and excess refunded)
      1 mark

    2. Rakesh (6,000 shares) applied for 8,000; his excess ₹ 6,000 reduces his call of ₹ 24,000, leaving ₹ 18,000 unpaid.

      ParticularsDr. (₹)Cr. (₹)
      Share First Call A/c Dr.24,00,000
      To Equity Share Capital A/c24,00,000
      (Being first call due)
      Bank A/c Dr.20,82,000
      Calls in Arrears A/c Dr.18,000
      To Share First Call A/c21,00,000
      (Being first call received except on 6,000 shares)
      1½ marks

    3. Rakesh paid ₹ 18,000 + ₹ 6,000 = ₹ 24,000 towards ₹ 7 of capital called per share.

      ParticularsDr. (₹)Cr. (₹)
      Equity Share Capital A/c Dr.42,000
      To Share Forfeited A/c24,000
      To Calls in Arrears A/c18,000
      (Being 6,000 shares forfeited)
      1 mark

    4. Second and final call ₹ 6 (₹ 3 capital + ₹ 3 premium) on the remaining 5,94,000 shares.

      ParticularsDr. (₹)Cr. (₹)
      Share Second and Final Call A/c Dr.35,64,000
      To Equity Share Capital A/c17,82,000
      To Securities Premium A/c17,82,000
      (Being second and final call due)
      Bank A/c Dr.35,64,000
      To Share Second and Final Call A/c35,64,000
      (Being second and final call received)
      1 mark

    5. Reissue at ₹ 13 fully paid: no discount, so the whole ₹ 24,000 forfeited goes to Capital Reserve.

      ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.78,000
      To Equity Share Capital A/c60,000
      To Securities Premium A/c18,000
      (Being forfeited shares reissued at ₹ 13)
      Share Forfeited A/c Dr.24,000
      To Capital Reserve A/c24,000
      (Being balance transferred to Capital Reserve)
      1½ marks

    Answer: Application ₹ 22,50,000 (₹ 18,00,000 capital, ₹ 3,00,000 to first call, ₹ 1,50,000 refunded); first call ₹ 24,00,000, ₹ 20,82,000 received; forfeiture ₹ 42,000 to Forfeited ₹ 24,000 and Arrears ₹ 18,000; second call ₹ 35,64,000; reissue ₹ 78,000; Capital Reserve ₹ 24,000

    Where the marks are

    • Application entries (1 mark)
    • First call entries (1½ marks)
    • Forfeiture (1 mark)
    • Second call entries (1 mark)
    • Reissue and capital reserve (1½ marks)

    Open Q23(a) on its own page

    OR

    Q23(b) · 6 marks · Long answerIssue and Redemption of Debentures

    Answer the following.

    1. a)

      Pass the necessary journal entries for 'Issue of Debenture' for the following:
      i. Arman Ltd. issued 750, 12% Debentures of ₹100 each at a discount of 10% redeemable at a premium of 5%.
      ii. Sohan Ltd. issued 800, 9% Debentures of ₹100 each at a premium of 20 per debenture redeemable at a premium of ₹10 per Debenture.

      4 marks
    2. b)

      X Ltd. obtained a loan of ₹4,00,000 from IDBI Bank. The company issued 5,000 9%. Debentures of ₹100 each as a collateral security for the same. Show how these items will be presented in the Balance Sheet of the company.

      2 marks
    Try it first, then show our solutionSolution

    1. (a)(i) Arman Ltd.: issue price ₹ 90; loss on issue = discount ₹ 7,500 + premium on redemption ₹ 3,750 = ₹ 11,250.

      ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.67,500
      To Debenture Application and Allotment A/c67,500
      (Being application money received)
      Debenture Application and Allotment A/c Dr.67,500
      Loss on Issue of Debentures A/c Dr.11,250
      To 12% Debentures A/c75,000
      To Premium on Redemption of Debentures A/c3,750
      (Being 750 debentures issued at 10% discount, redeemable at 5% premium)
      2 marks

    2. (a)(ii) Sohan Ltd.: issue price ₹ 120 (₹ 96,000); premium on issue ₹ 16,000; premium on redemption ₹ 8,000 is a loss on issue.

      ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.96,000
      To Debenture Application and Allotment A/c96,000
      (Being application money received)
      Debenture Application and Allotment A/c Dr.96,000
      Loss on Issue of Debentures A/c Dr.8,000
      To 9% Debentures A/c80,000
      To Securities Premium A/c16,000
      To Premium on Redemption of Debentures A/c8,000
      (Being 800 debentures issued at ₹ 20 premium, redeemable at ₹ 10 premium)
      2 marks

    3. (b) Balance Sheet of X Ltd. (extract)

      ParticularsNote No.₹
      I. Equity and Liabilities
      Non-current Liabilities: Long-term Borrowings14,00,000

      Note 1: Long-term Borrowings — Loan from IDBI Bank ₹ 4,00,000 (secured by the issue of 5,000 9% debentures of ₹ 100 each as collateral security).

      2 marks

    Answer: (a)(i) Bank ₹ 67,500; Loss on Issue ₹ 11,250; Debentures ₹ 75,000; Premium on Redemption ₹ 3,750. (a)(ii) Bank ₹ 96,000; Debentures ₹ 80,000; Securities Premium ₹ 16,000; Loss on Issue and Premium on Redemption ₹ 8,000. (b) Loan from IDBI ₹ 4,00,000 under long-term borrowings, noted as secured by collateral debentures

    Where the marks are

    • Entries for Arman Ltd. (2 marks)
    • Entries for Sohan Ltd. (2 marks)
    • Balance Sheet presentation of loan and collateral debentures (2 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 – Retirement/Death of a Partner

    Meghna, Mehak and Mandeep were partners in a firm whose Balance Sheet as on 31st March, 2023 was as under:

    Balance Sheet

    LiabilitiesAmountAssetsAmount
    Creditors28,000Cash27,000
    General Reserve7,500Debtors20,000
    Capitals: Meghna 20,000; Mehak 14,500; Mandeep 10,00044,500Stock28,000
    Furniture5,000
    80,00080,000

    Mehak retired on this date under following terms:
    (i) To reduce stock and furniture by 5% and 10% respectively.
    (ii) To provide for doubtful debts at 10% on debtors.
    (iii) Goodwill was valued at ₹12,000.
    (iv) Creditors of Rs.8,000 were settled at Rs.7,100.
    (v) Mehak should be paid off and the entire sum payable to Mehak shall be brought in by Meghna and Mandeep in such a way that their capitals should be in their new profit-sharing ratio and a balance of Rs.25,000 is maintained in the cash account.
    Prepare Revaluation Account and partners’ capital accounts of the new firm.

    Try it first, then show our solutionSolution

    1. Revaluation Account (no ratio is given, so partners share equally)

      Particulars₹Particulars₹
      To Stock A/c (5%)1,400By Creditors A/c (8,000 − 7,100)900
      To Furniture A/c (10%)500By Loss transferred to:
      To Provision for Doubtful Debts A/c2,000Meghna's Capital A/c1,000
      Mehak's Capital A/c1,000
      Mandeep's Capital A/c1,000
      3,9003,900
      2 marks

    2. Workings. General reserve ₹ 2,500 each. Mehak's share of goodwill = ₹ 12,000 × 1/3 = ₹ 4,000, paid ₹ 2,000 each by Meghna and Mandeep. Mehak is due ₹ 14,500 + 2,500 + 4,000 − 1,000 = ₹ 20,000. Cash before new money = 27,000 − 7,100 − 20,000 = −₹ 100, so ₹ 25,100 must come in to leave ₹ 25,000. Capitals before that: Meghna ₹ 19,500, Mandeep ₹ 9,500; total ₹ 54,100 in equal shares = ₹ 27,050 each, so Meghna brings ₹ 7,550 and Mandeep ₹ 17,550.

      1½ marks

    3. Partners' Capital Accounts

      ParticularsMeghna (₹)Mehak (₹)Mandeep (₹)ParticularsMeghna (₹)Mehak (₹)Mandeep (₹)
      To Revaluation A/c1,0001,0001,000By Balance b/d20,00014,50010,000
      To Mehak's Capital A/c2,0002,000By General Reserve A/c2,5002,5002,500
      To Cash A/c20,000By Meghna's Capital A/c2,000
      To Balance c/d27,05027,050By Mandeep's Capital A/c2,000
      By Cash A/c7,55017,550
      30,05021,00030,05030,05021,00030,050
      2½ marks

    Answer: Revaluation loss ₹ 3,000 (₹ 1,000 each); Mehak paid ₹ 20,000; Meghna brings ₹ 7,550 and Mandeep ₹ 17,550; closing capitals ₹ 27,050 each

    Where the marks are

    • Revaluation Account (2 marks)
    • Goodwill, amount due and cash needed (1½ marks)
    • Partners' capital accounts (2½ marks)

    Open Q24(a) on its own page

    OR

    Q24(b) · 6 marks · Long answerAccounting for Partnership: Basic Concepts

    Varun and Vivek were partners in a firm sharing profits in the ratio of 3:2. The balance in their capital and current accounts as on 1st April, 2022 were as under:

    ParticularsVarun(₹)Vivek(₹)
    Capital accounts3,00,000 (Cr.)2,00,000 (Cr.)
    Current accounts1,00,000 (Cr.)28,000 (Dr)

    The partnership deed provided that Varun was to be paid a salary of ₹ 5,000 p.m. whereas Vivek was to get a commission of ₹ 30,000 for the year. Interest on capital was to be allowed @ 8% p.a. whereas interest on drawings was to be charged @ 6% p.a. The drawings of Varun were ₹ 3,000 at the beginning of each quarter while Vivek withdrew ₹ 30,000 on 1st September, 2022. The net profit of the firm for the year, 2022-23, before making the above adjustments was ₹ 1,20,000.
    Prepare Profit and Loss Appropriation Account and Partners' Capital and Current Accounts.

    Try it first, then show our solutionSolution

    1. Workings. Salary Varun ₹ 60,000; commission Vivek ₹ 30,000; interest on capital Varun ₹ 24,000, Vivek ₹ 16,000: total ₹ 1,30,000. Interest on drawings: Varun ₹ 12,000 × 6% × 7.5/12 = ₹ 450; Vivek ₹ 30,000 × 6% × 7/12 = ₹ 1,050. Profit available = ₹ 1,20,000 + ₹ 1,500 = ₹ 1,21,500, less than the appropriations, so it is shared in their ratio 84,000 : 46,000 = 42 : 23: Varun ₹ 78,508, Vivek ₹ 42,992.

      1½ marks

    2. Profit and Loss Appropriation Account for the year ended 31st March, 2023

      Particulars₹Particulars₹
      To Varun's Current A/c (salary and interest, scaled down)78,508By Profit and Loss A/c1,20,000
      To Vivek's Current A/c (commission and interest, scaled down)42,992By Interest on Drawings: Varun450
      By Interest on Drawings: Vivek1,050
      1,21,5001,21,500
      2 marks

    3. Partners' Capital Accounts stay at ₹ 3,00,000 and ₹ 2,00,000 (balance b/d carried down unchanged).

      ParticularsVarun (₹)Vivek (₹)ParticularsVarun (₹)Vivek (₹)
      To Balance c/d3,00,0002,00,000By Balance b/d3,00,0002,00,000
      3,00,0002,00,0003,00,0002,00,000
      ½ mark

    4. Partners' Current Accounts

      ParticularsVarun (₹)Vivek (₹)ParticularsVarun (₹)Vivek (₹)
      To Balance b/d28,000By Balance b/d1,00,000
      To Drawings A/c12,00030,000By P&L Appropriation A/c78,50842,992
      To Interest on Drawings A/c4501,050By Balance c/d16,058
      To Balance c/d1,66,058
      1,78,50859,0501,78,50859,050
      2 marks

    Answer: Profit available ₹ 1,21,500 shared 42 : 23: Varun ₹ 78,508, Vivek ₹ 42,992; capitals unchanged; current accounts Varun ₹ 1,66,058 (Cr.), Vivek ₹ 16,058 (Dr.)

    Where the marks are

    • Interest on drawings and shortfall worked out (1½ marks)
    • P&L Appropriation Account (2 marks)
    • Capital accounts (½ mark)
    • Current accounts (2 marks)

    Open Q24(b) on its own page

  25. Q25 · 6 marks · Long answerDissolution of Partnership Firm

    Sunny and Bobby were partners in a firm sharing profits and losses in the ratio of 3:2, their balance sheet as at 31st March, 2012:

    LiabilitiesAmountAssetsAmount
    Creditors1,90,000Bank5,000
    Bills Payable1,10,000Fixed Deposits70,000
    Employees provident fund50,000Stock86,000
    Mrs. Sunny’s Loan55,000Investments1,04,000
    Bobby’s Loan85,000Debtors 1,77,000 less Provision for D/D 12,0001,65,000
    Investment Fluctuation Fund30,000Other Fixed Assets3,80,000
    Capitals: Sunny 2,20,000; Bobby 1,20,0003,40,000Deferred Revenue Expenditure35,000
    Sunny’s Loan15,000
    8,60,0008,60,000

    The firm was dissolved on 31st March, 2012. The assets were realized and the liabilities were paid as under:
    (a) Sunny promised to pay off Mrs. Sunny’s Loan
    (b) Bobby took away stock at 20% discount and 80% of the investments at 10% discount.
    (c) Dharam, a debtor of Rs. 60,000 had to pay the amount due 2 months after the date of dissolution. He was allowed a discount of 9% p.a. for making immediate payment.
    (d) Creditors were paid Rs.1,75,000 in full settlement of their claim.
    (e) 90% of Other fixed assets realised Rs. 1,98,000 and remaining were realised at discount of 15%.
    (f) Balance of investments were sold at 75% value and Fixed Deposits were realised at 110%.
    (g) There was an old furniture which has been written off completely from the books, Bobby took away the same for Rs. 41,000 against his loan and balance to him was given in cash.
    (h) Realisation expenses Rs. 20,000 were paid by Sunny and Bobby equally on behalf of the firm.
    You are required to prepare Realisation A/c

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

  26. Q26 · 6 marks · Case-basedCompetency-basedAccounting for Share Capital

    Balance Sheet (Extract) of XYZEE ltd as at 31.03.2024 (as per schedule -III of Companies Act 2013)

    Note no.31.03.202331.03.2024
    I- Equity & Liabilities
    1. Shareholders Funds
    a). Share Capital144,90,00054,90,000
    b). Reserves and Surplus22,00,0003,60,000

    Note no.1 (For year ending 31.03.2023) Share Capital
    1). Authorised Share Capital: 8,00,000 Equity Shares of Rs. 10 each: 80,00,000
    2). Issued Share Capital: 4,50,000 Equity Shares of Rs. 10 each: 45,00,000
    3). Subscribed Share Capital
    a). Subscribed and Fully paid: Rs.10 per share on 4,45,000 Equity Shares: 44,50,000
    b). Subscribed and not Fully paid: Rs. 10 per share on 5,000 Equity shares: 50,000; Less not paid: Rs. 2 per share on 5,000 Equity shares: -10,000; Total 44,90,000

    Note no.1 (For year ending 31.03.2024) Share Capital
    1). Authorised Share Capital: 8,00,000 Equity Shares of Rs. 10 each: 80,00,000
    2). Issued Share Capital: 5,50,000 Equity Shares of Rs. 10 each: 55,00,000 (Out of these 40,000 shares were issued to the vendors as consideration for Capital asset purchased)
    3). Subscribed Share Capital
    a). Subscribed and Fully paid: Rs.10 per share on 5,45,000 Equity Shares: 54,50,000
    c) Subscribed and not Fully paid: Rs. 10 per share on 5,000 Equity shares: 50,000; Less not paid: Rs. 2 per share on 5,000 Equity shares: -10,000; Total 54,90,000

    Note no. 2 - Reserves and Surplus

    31.03.202331.03.2024
    Capital ReserveNil40,000
    Securities Premium2,00,0003,20,000

    During the year the company took over the business of Quipa Ltd. with Assets of Rs. 12,00,000/- and Liabilities of Rs.7,30,000. Purchase consideration was paid in cash and by issue of equity shares at par. The entire transaction resulted in Capital reserve of Rs.40,000.

    1. Q1

      What is the total face value of Shares issued by the Company during the year 2023-24.

      1. (A)Rs.10,00,000
      2. (B)Rs. 6,00,000
      3. (C)Rs. 9,50,000
      4. (D)Rs. 11,20,000
      1 mark
    2. Q2

      Shares issued for cash during the year were issued at _______. (assuming they were issued together)?

      1. (A)Rs.10
      2. (B)Rs.8
      3. (C)Rs.12
      4. (D)Rs.11.20
      1 mark
    3. Q3

      On April 1, 2024, the company forfeited all the defaulting shares. What amount will appear in the Share Forfeiture account at the time of forfeiture?

      1. (A)Rs.40,000
      2. (B)Rs. 50,000
      3. (C)Rs.10,000
      4. (D)Rs. 60,000
      1 mark
    4. Q4

      What will be the number of Issued shares, as on April 1,2024, after the forfeiture of these shares?

      1. (A)5,45,000 shares
      2. (B)5,50,000 shares.
      3. (C)4,45,000 shares.
      4. (D)5,05,000 shares.
      1 mark
    5. Q5

      If 2,000 of the forfeited shares were issued at Rs. 14 per share, what will be the amount of securities premium and Capital reserve respectively as on April 1, 2024?

      1. (A)Rs, 3,20,000, Rs.40,000
      2. (B)Rs.3,28,000, Rs.56,000
      3. (C)Rs.3,28,000, Rs.80,000
      4. (D)Rs.3,20,000, Rs.80,000
      1 mark
    6. Q6

      What will be the amount in the "Subscribed and Fully paid" after the reissue of these 2000 shares?

      1. (A)Rs.54,50,000
      2. (B)Rs.55,00,000
      3. (C)Rs.54,70,000
      4. (D)Rs.54,80,000
      1 mark
    Try it first, then show our solutionSolution

    1. Q1. Issued capital rose from ₹ 45,00,000 to ₹ 55,00,000: shares of face value ₹ 10,00,000 were issued. (A)

      1 mark

    2. Q2. Net assets of Quipa Ltd. = ₹ 12,00,000 − ₹ 7,30,000 = ₹ 4,70,000; capital reserve ₹ 40,000, so consideration = ₹ 4,30,000 (40,000 shares ₹ 4,00,000 + cash ₹ 30,000). The other 60,000 shares were issued for cash; Securities Premium rose ₹ 1,20,000, i.e. ₹ 2 a share, so the issue price was ₹ 12. (C)

      1 mark

    3. Q3. The 5,000 partly paid shares have paid ₹ 8 each (₹ 2 unpaid): Share Forfeiture = ₹ 40,000. (A)

      1 mark

    4. Q4. Forfeiture reduces subscribed capital; issued capital still shows 5,50,000 shares. (B)

      1 mark

    5. Q5. 2,000 shares reissued at ₹ 14: premium ₹ 4 each = ₹ 8,000, so Securities Premium = ₹ 3,28,000. Forfeited ₹ 8 × 2,000 = ₹ 16,000 goes to Capital Reserve: ₹ 40,000 + ₹ 16,000 = ₹ 56,000. (B)

      1 mark

    6. Q6. Fully paid shares = 5,45,000 + 2,000 = 5,47,000 × ₹ 10 = ₹ 54,70,000. (C)

      1 mark

    Answer: Q1 (A) ₹ 10,00,000; Q2 (C) ₹ 12; Q3 (A) ₹ 40,000; Q4 (B) 5,50,000 shares; Q5 (B) ₹ 3,28,000 and ₹ 56,000; Q6 (C) ₹ 54,70,000

    Where the marks are

    • 1 mark for each of the six answers (6 marks)

    Open Q26 on its own page

Section B-I

Part B Option I: Analysis of Financial Statements; Q27-30 one mark, Q31-32 three marks, Q33 four marks, Q34 six marks

  1. Answer one of these 2 alternatives.

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

    When an analyst analysis the financial statements of an enterprise over a number of years, the analysis is called ______________analysis.

    1. (A)Static
    2. (B)External
    3. (C)Horizontal
    4. (D)Vertical
    Try it first, then show our solutionSolution

    1. Analysing the same firm's statements across several years compares each item over time.

    2. That is horizontal (dynamic) analysis; vertical analysis compares items within one year. Option (C).

      1 mark

    Answer: (C) Horizontal

    Where the marks are

    • Analysis over a number of years is horizontal (1 mark)

    Open Q27(a) on its own page

    OR

    Q27(b) · 1 mark · MCQAccounting Ratios

    ------------will result in increase in Liquid Ratio without affecting the Current Ratio.

    1. (A)Sale of Stock at cost price
    2. (B)Sale of stock at loss
    3. (C)Sale of stock at profit
    4. (D)Sale of investments at cost
    Try it first, then show our solutionSolution

    1. Selling stock at cost swaps inventory for cash of the same amount: current assets and current liabilities do not change, so the current ratio is unchanged.

    2. Cash is a liquid asset and inventory is not, so the liquid ratio rises. Option (A).

      1 mark

    Answer: (A) Sale of Stock at cost price

    Where the marks are

    • Stock to cash at cost leaves current assets unchanged but raises liquid assets (1 mark)

    Open Q27(b) on its own page

  2. Q28 · 1 mark · MCQAccounting Ratios

    As on 31.02.2024 the following information of Bartan Manfacturing ltd. is available .
    Net profit ratio 40%
    Operating profit ratio 50%
    On 1st April 2024 it was came to notice that the accountant had omitted recording the interest received on investment of Rs. 2,00,000 for the financial year 2023-24. The required rectification was done. What will be the effect of the same on Net Profit and operating profit ratio?

    1. (A)Net Profit ratio will increase and Operating Profit ratio will decrease
    2. (B)Both Net Profit ratio and Operating Profit ratio will increase
    3. (C)Net Profit ratio will increase and Operating Profit ratio will have no change
    4. (D)Net Profit ratio will remain same and Operating Profit ratio will increase
    Try it first, then show our solutionSolution

    1. Interest received on investments is non-operating income. Recording it raises net profit, so the net profit ratio increases.

    2. Operating profit excludes non-operating income, so the operating profit ratio does not change. Option (C).

      1 mark

    Answer: (C) Net Profit ratio will increase and Operating Profit ratio will have no change

    Where the marks are

    • Non-operating income affects net profit only (1 mark)

    Open Q28 on its own page

  3. Answer one of these 2 alternatives.

    Q29(a) · 1 mark · MCQCash Flow Statement

    While computing cash from operating activities, which of the following item(s) will be added to the net profit?
    (i) Decrease in value of inventory
    (ii) Increase in share capital
    (iii) Increase in the value of trade receivables
    (iv) Increase in the amount of outstanding expenses

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

    1. A decrease in inventory and an increase in outstanding expenses both release cash, so they are added.

    2. An increase in share capital is a financing item, and an increase in receivables is deducted. Option (D).

      1 mark

    Answer: (D) Only (i) and (iv)

    Where the marks are

    • Decrease in current assets and increase in current liabilities are added (1 mark)

    Open Q29(a) on its own page

    OR

    Q29(b) · 1 mark · MCQCash Flow Statement

    Which of the following statements is correct?

    1. (A)Investments in shares are excluded from cash equivalents unless they are in, substance, cash equivalents.
    2. (B)Short-term marketable securities which can be readily converted into cash are not treated as cash equivalents
    3. (C)In case of a financial enterprise, interest received, and dividend received are classified as investing activities while dividend paid and interest paid on debentures are operating activities.
    4. (D)Provision for tax made during the year should be classified as an outflow from operating activity.
    Try it first, then show our solutionSolution

    1. AS 3 excludes equity investments from cash equivalents unless they are cash equivalents in substance (e.g. preference shares bought shortly before their redemption date), so (A) is right.

    2. (B) is wrong (such securities are cash equivalents), (C) is wrong (for a financial enterprise interest and dividend received are operating), and (D) is wrong (tax paid, not provided, is the outflow). Option (A).

      1 mark

    Answer: (A) Investments in shares are excluded from cash equivalents unless they are in, substance, cash equivalents.

    Where the marks are

    • AS 3 treatment of investments in shares (1 mark)

    Open Q29(b) on its own page

  4. Q30 · 1 mark · MCQCash Flow Statement

    Statement-I: ‘Shree Ltd.’ was carrying on a business of packaging in Delhi and earned good profits in the past years. The company wanted to expand its business and required additional funds. To meet its requirements the company issued equity shares of ₹30,00,000. It purchased a computerized machine of ₹20,00,000. During the current year the Net Profit of the company was ₹15,00,000. Cash flows from operating, investing and financing activities from the above transactions will be ₹15,00,000: (₹20,00,000); ₹30,00,000 respectively.
    Statement-II: The patents of X Ltd. increased from ₹3,00,000 in 2021-22 to ₹3,50,000 in 2022-23. It will be taken as purchase of Patents of 50,000 and will be shown under Cash outflow from Investing Activities.

    1. (A)Both the statements are true.
    2. (B)Both the statements are false.
    3. (C)Only Statement-I is true.
    4. (D)Only Statement-II is true.
    Try it first, then show our solutionSolution

    1. Statement I: with no other adjustments given, net profit ₹ 15,00,000 is the operating inflow, the machine ₹ 20,00,000 is an investing outflow and the share issue ₹ 30,00,000 a financing inflow. True.

    2. Statement II: an increase in patents (with no amortisation given) is treated as a purchase, an investing outflow of ₹ 50,000. True. Option (A).

      1 mark

    Answer: (A) Both the statements are true.

    Where the marks are

    • Classification of profit, machine purchase, share issue and patents (1 mark)

    Open Q30 on its own page

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

    Find the heads and sub-heads under which the following items will appear in the balance sheet of a company as per Schedule III, Part I of Companies Act, 2013?
    a) Furniture and Fixture
    b) Advance paid to contractor for building under construction
    c) Accrued Income
    d) Loans repayable on demand to Bank
    e) Employees earned leaves payable on retirement
    f) Employees earned leaves encash able

    Try it first, then show our solutionSolution

    1. (a) Furniture and fixtures: Non-current Assets, Property, Plant and Equipment. (b) Advance to contractor for building under construction: Non-current Assets, Long-term Loans and Advances (a capital advance).

      1 mark

    2. (c) Accrued income: Current Assets, Other Current Assets. (d) Loans repayable on demand to bank: Current Liabilities, Short-term Borrowings.

      1 mark

    3. (e) Earned leave payable on retirement: Non-current Liabilities, Long-term Provisions. (f) Earned leave encashable: Current Liabilities, Short-term Provisions.

      1 mark

    Answer: Furniture: NCA, PPE; advance to contractor: NCA, Long-term Loans and Advances; accrued income: CA, Other Current Assets; loans repayable on demand: CL, Short-term Borrowings; leave on retirement: NCL, Long-term Provisions; leave encashable: CL, Short-term Provisions

    Where the marks are

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

    Open Q31 on its own page

  6. Q32 · 3 marks · Short answerAnalysis of Financial Statements

    Complete the Comparative Statement of Profit and Loss:

    Particulars2022-232023-24Absolute change% change
    Revenue from Operations16,00,00020,00,000??
    Less: Employees Benefit Expenses8,00,000??25%
    Less: Other Expenses2,00,000?(1,00,000)?
    Profit before tax6,00,000??50%
    Tax @30%??90,000?
    Profit after tax4,20,000?2,10,000?
    Try it first, then show our solutionSolution

    1. Revenue: change ₹ 4,00,000 = 25%. Employee benefit expenses up 25%: ₹ 10,00,000 (change ₹ 2,00,000). Other expenses fall ₹ 1,00,000 to ₹ 1,00,000 (−50%).

      1 mark

    2. Profit before tax 2023-24 = 20,00,000 − 10,00,000 − 1,00,000 = ₹ 9,00,000 (change ₹ 3,00,000, 50%). Tax at 30%: ₹ 1,80,000 and ₹ 2,70,000 (change ₹ 90,000, 50%). Profit after tax ₹ 4,20,000 and ₹ 6,30,000 (change ₹ 2,10,000, 50%).

      1 mark

    3. Comparative Statement of Profit and Loss

      Particulars2022-23 (₹)2023-24 (₹)Absolute change (₹)% change
      Revenue from Operations16,00,00020,00,0004,00,00025
      Less: Employee Benefit Expenses8,00,00010,00,0002,00,00025
      Less: Other Expenses2,00,0001,00,000(1,00,000)(50)
      Profit before tax6,00,0009,00,0003,00,00050
      Tax @ 30%1,80,0002,70,00090,00050
      Profit after tax4,20,0006,30,0002,10,00050
      1 mark

    Answer: Employee expenses ₹ 10,00,000; other expenses ₹ 1,00,000 (−50%); PBT ₹ 9,00,000; tax ₹ 1,80,000 and ₹ 2,70,000; PAT ₹ 6,30,000 (+50%)

    Where the marks are

    • Expense figures (1 mark)
    • Profit and tax figures (1 mark)
    • Completed statement (1 mark)

    Open Q32 on its own page

  7. Answer one of these 2 alternatives.

    Q33(a) · 4 marks · Very short answerAccounting Ratios

    Calculate Gross Profit Ratio from the following information
    Revenue from Operations ₹ 10,00,000; Purchases ₹ 3,60,000; Carriage Inwards ₹ 50,000; Employee benefit Expenses ₹ 1,00,000 (including Wages of ₹ 60,000); Opening Inventory ₹ 60,000 and Average Inventory ₹ 80,000.

    Try it first, then show our solutionSolution

    1. Closing inventory: average ₹ 80,000 = (60,000 + closing)/2, so closing = ₹ 1,00,000.

      1 mark

    2. Cost of revenue from operations = opening inventory 60,000 + purchases 3,60,000 + carriage inwards 50,000 + wages 60,000 − closing inventory 1,00,000 = ₹ 4,30,000.

      1½ marks

    3. Gross profit = ₹ 10,00,000 − ₹ 4,30,000 = ₹ 5,70,000; gross profit ratio = 5,70,000 / 10,00,000 × 100 = 57%.

      1½ marks

    Answer: Gross profit ratio 57% (gross profit ₹ 5,70,000 on revenue ₹ 10,00,000)

    Where the marks are

    • Closing inventory (1 mark)
    • Cost of revenue from operations (1½ marks)
    • Gross profit and ratio (1½ marks)

    Open Q33(a) on its own page

    OR

    Q33(b) · 4 marks · Very short answerAccounting Ratios

    Profit after tax amounted to ₹ 6,00,000, and tax rate was 20%. If earnings before interest and tax was ₹ 10,00,000 and Nominal Value of Debentures amounted to ₹ 25,00,000 (assuming the only debt of the company), determine the rate of interest on debentures

    Try it first, then show our solutionSolution

    1. Tax at 20% means profit after tax is 80% of profit before tax: PBT = ₹ 6,00,000 / 0.8 = ₹ 7,50,000; tax = ₹ 1,50,000.

      1½ marks

    2. Interest = EBIT − PBT = ₹ 10,00,000 − ₹ 7,50,000 = ₹ 2,50,000.

      1½ marks

    3. Rate of interest = ₹ 2,50,000 / ₹ 25,00,000 × 100 = 10%.

      1 mark

    Answer: Interest ₹ 2,50,000; rate of interest on debentures 10%

    Where the marks are

    • Tax ₹ 1,50,000 / PBT ₹ 7,50,000 (1½ marks)
    • Interest ₹ 2,50,000 (1½ marks)
    • Rate 10% (1 mark)

    Open Q33(b) on its own page

  8. Q34 · 6 marks · Long answerCash Flow Statement

    Answer the following.

    1. (a)

      From the following information, calculate Cash flow from Operating Activities.

      Particulars31 March 202331 March 2024
      Surplus i.e Balance in Statement of Profit and Loss6,00,0005,00,000
      Provision for Tax1,00,0001,20,000
      Trade Receivables2,00,0002,40,000
      Trade Payables1,50,0002,00,000
      Goodwill2,00,0001,50,000

      Additional Information:-
      Proposed Dividend for the year ended March 31, 2023 and March 31, 2024 was ₹ 1,50,000 and ₹ 1,80,000 respectively.

      3 marks
    2. (b)

      From the following information calculate the Cash from Investing Activities

      Particulars31 March 202331 March 2024
      Machinery (Cost)20,00,00028,00,000
      Accumulated Depreciation4,00,0006,50,000

      Additional Information:-
      (i) Machinery costing ₹ 50,000 (Book Value ₹ 40,000) was lost by fire and insurance claim of ₹ 32,000 was received.
      (ii) Depreciation charged during the year was ₹ 3,50,000.
      (iii) A part of Machinery costing ₹ 2,50,000 was sold at a loss of ₹ 20,000.

      3 marks
    Try it first, then show our solutionSolution

    1. (a) Change in surplus = (₹ 1,00,000). Add back the dividend for 2022-23 paid this year ₹ 1,50,000 and tax provided ₹ 1,20,000: profit before tax = ₹ 1,70,000. Add goodwill written off ₹ 50,000: operating profit before working capital changes = ₹ 2,20,000.

      1 mark

    2. Add increase in trade payables ₹ 50,000; less increase in trade receivables ₹ 40,000: cash generated = ₹ 2,30,000. Less tax paid ₹ 1,00,000 (provision ₹ 1,00,000 + ₹ 1,20,000 − ₹ 1,20,000): cash flow from operating activities ₹ 1,30,000.

      2 marks

    3. (b) Accumulated depreciation: 4,00,000 + 3,50,000 − 10,000 (machine lost) − closing 6,50,000 = ₹ 90,000 on the machine sold. Machine sold: book value 2,50,000 − 90,000 = ₹ 1,60,000, sold at ₹ 20,000 loss for ₹ 1,40,000.

      Particulars₹Particulars₹
      To Balance b/d20,00,000By Accumulated Depreciation (machine lost)10,000
      To Bank A/c (purchases, balancing figure)11,00,000By Insurance claim32,000
      By Loss by fire8,000
      By Bank A/c (sale)1,40,000
      By Loss on sale20,000
      By Accumulated Depreciation (machine sold)90,000
      By Balance c/d28,00,000
      31,00,00031,00,000
      2 marks

    4. Investing activities: sale of machinery ₹ 1,40,000 + insurance claim ₹ 32,000 − purchase ₹ 11,00,000 = net cash used (₹ 9,28,000).

      1 mark

    Answer: (a) Cash flow from operating activities ₹ 1,30,000; (b) net cash used in investing activities ₹ 9,28,000 (purchase ₹ 11,00,000, sale ₹ 1,40,000, insurance claim ₹ 32,000)

    Where the marks are

    • Profit before tax and operating profit (1 mark)
    • Cash from operating activities ₹ 1,30,000 (2 marks)
    • Machinery account with purchase ₹ 11,00,000 (2 marks)
    • Cash used in investing activities ₹ 9,28,000 (1 mark)

    Open Q34 on its own page

Section B-II

Part B Option II: Computerised Accounting; Q27-30 one mark, Q31-32 three marks, Q33 four marks, Q34 six marks

  1. Answer one of these 2 alternatives.

    Q27(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 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 Q27(a) on its own page

    OR

    Q27(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, DataMaker
    2. (B)Design, Layout, Format
    3. (C)Format, Layout, Label
    4. (D)Design, DataMaker, 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 (1 mark)

  2. Q28 · 1 mark · MCQSpreadsheet

    Which formulae would result in TRUE if C4 is less than 10 and D4 is less than 100?

    1. (A)=AND(C4>10, D4>10)
    2. (B)=AND(C4>10, C4<100).
    3. (C)=AND(C4>10, D4<10).
    4. (D)=AND (C4<10, D4,100)

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

  3. Answer one of these 2 alternatives.

    Q29(a) · 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 a formula.

    2. It shows 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 Q29(a) on its own page

    OR

    Q29(b) · 1 mark · MCQSpreadsheet

    When navigating in a workbook, 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]

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

  4. Q30 · 1 mark · MCQUse of Spreadsheet in Business Applications

    What category of functions is used in this formula: =PMT (C10/12, C8, C9,1)

    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)

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

    State any three types of Accounting Vouchers used for entry.

    Try it first, then show our solutionSolution

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

      1 mark

    2. Receipt voucher: for all money received in cash or by bank.

      1 mark

    3. Payment voucher: for all payments by cash or bank. (Purchase, sales and journal vouchers are also accepted.)

      1 mark

    Answer: Any three of: Contra, Receipt, Payment, Purchase, Sales and Journal vouchers

    Where the marks are

    • 1 mark for each voucher (3 marks)

    Open Q31 on its own page

  6. Q32 · 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. Scalability and data volume: how much data will be stored and how fast it will grow; a desktop database suits small volumes.

      1 mark

    2. Collaboration and accessibility: how many users will capture or use the data at the same time and whether access is over a LAN or the Internet; many simultaneous users need a server database.

      1 mark

    3. Security and data integrity: how sensitive the data is and what control over access and backup is needed, along with the hardware and operating system available.

      1 mark

    Answer: Scalability (volume and growth of data), collaboration/accessibility (number of users and access over LAN/Internet), and security/data integrity (with available hardware)

    Where the marks are

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

    Open Q32 on its own page

  7. Answer one of these 2 alternatives.

    Q33(a) · 4 marks · Very short 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. Accuracy and speed: calculations and postings are automatic and reports are instant.

      1 mark

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

      1 mark

    4. Security and quick decision making: access is password-controlled and up-to-date information supports decisions.

      1 mark

    Answer: Any four: simple and integrated; accuracy and speed; scalability; instant reporting; security; quick decision making; reliability

    Where the marks are

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

    Open Q33(a) on its own page

    OR

    Q33(b) · 4 marks · Very short answerSpreadsheet

    Explain the use of ‘Conditional Formatting’.

    Try it first, then show our solutionSolution

    1. Conditional formatting changes the format of cells automatically when their values meet a rule.

      1 mark

    2. It helps visualise data, for example with colour scales and data bars.

      1 mark

    3. It helps check for specific information and highlight top values or differences.

      1 mark

    4. It makes data more informative and readable, so exceptions stand out for decision making.

      1 mark

    Answer: Conditional formatting formats cells that meet a rule: it helps visualise data, highlight specific or top values and differences, and makes data more readable

    Where the marks are

    • 1 mark for each use explained (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.

      2 marks

    Answer: SLM charges a fixed amount on original cost; WDV charges a fixed rate on the falling book value. Differences: amount, base, book value reaching zero, rate, 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.