1.

(b) 37,200 and 24,800 respectively

2. (a) (A) is correct but (R) is wrong.
3. (c) Bearer debentures
Or
(a) 12,000
4. (a) New Ratio 14:6:5and Sacrificing ratiol:4
Or

(d) None of these

5. (d) (iüi), (i), (ü)
6. (a) Capital Gain
Or

(b) Credited by the face value of debenture

7. (c) is payable irrespective of profit or loss
8. (c) R 21,000 to A
Or

(b) All partners become insolvent.

9. (d) ? 27,000
10, (b) 81.000

11. (d) R6,000

12. (c) Paid up capital
13. (d) Debenture Suspense Account
14. (b) 3,60,000: 2,40,000: 1,50,000.
15. (a) X (? 1,08,000), Y (? 72,000), Z 60,000
Or

(c) 7,525 each

16. (a) No entry is needed
17. Journal Entries
Date Particulars L.E. Dr. ) Cr. ()
Land and Building A/e Dr. 1,50,000
To Revaluation AC 1,50,000
(For increase in the value of assets recorded)
Revaluation Ale Dr. 65,000
To Debtors A/c 15,000
To Investment A/c 10,000
To Creditors Alc 40,000
(For decrease in the value of assets and increase in the amount of liability
recorded)
Revaluation A/c Dr. 85,000
To X's Capital A/e 42,500
To Y's Capital A/e 34,000
To Z's Capital A/c 8,500
(For profit on revaluation, Le., 150,000 - 65,000 transferred to partners
capitals a/es in 5 : 4:lratio)
18. Calculation of Adjusted Profit

Adjusted Profit
Year ending Profit () Adjustments ()

31-3-2020 30,600 -2,000 28,600

31-3-2021 48,400 -2,000 46,400

31-3-2022 46.600 -2.000 + 2,600 47,200
31-3-2023 34,400 -2,000 - 2,600 29,800

Total Adjusted Profit 1.52,000

Average Adjusted Profits = 1,52,000/4 =38,000

Goodwill = Average Profit x No. of years' purchases
=38,000 × 2=?76,000
Or
Profit and Loss Appropriation A/e
For the year ending 3ist March, 2022

Amount Amount
Particulars Particulars
(8)
To Profit transferred to Capital Accounts of: By Profit as per Profit and Loss Alc 75,800
Ritesh 37,000 Less: Interest on Ritesh' Loan (1,800) 74,000
Mitesh 37,000 74,000

74,000 74,000

In the absence of Partnership Deed

" No Salary is given to any partner
" No Interest on Capital is given to any partner
" Interest on Loan is proided (@ 6% p.a.
19. Calculation of Purchase Consideration:
Nominal value of shares issued = 10,000 × 100 = 10,00,000
Securities premium reserve = ?1,00,000
Bank draft =1.00.000

Purchase consideration =?10,00,000 +71,00,000 + 11,00,000 =722,00,000

Journal Entries in the Books of King Ltd.
Date Particulars L.E Dr. () Cr. ()
() Sundry Assets A/c Dr 25,00,000
Goodwill Alc (Balancing figure) Dr. 3,00,000
To Sundry Liabilities Ale 6,00,000
To Queen Ltd. 22,00,000
(Being the purchase of assets and liabilities of Queen Lid.)
(ii) Qucen LId. Dr. 22,00,000
To Equity Share Capital Alc 10,00,000
To Securities Premium Alc 1,00,000
To Bank Alc 11,00,000
(Being 10,000 Equity Share issued of ? 100 each issued at a premium of 10%
and ? 1100,000 paid by bank draft)
 Books of Amay Ltd.
Journal

Date Particulars LE Dr. () Cr. ()

Bank /c Dr. 3,60,00
To 12% Debentures Application Alc 3,60,000
(For receipt of application money on 12,000 debentures @30 cach)
12% Debentures Application Alc Dr 3,60,000
To 12% Debentures A/c 3,00,000)
To Debentures Allotment Ale
30,000
To Bank Alc
30,000
(Being debenture application money transferred to debentures account,
excess application money credited to dcbenture allotment account and moncy
refunded for rejected applications)
12% Debentures Allotment A/c Dr. 7,00,000
To 12% Debentures A/c 7,00,000
(For amount due on 10,000 debentures)
Bank A/e Dr 6,70,000
To Debentures Allotment Alc 6,70,000

20. To write off Existing Goodwill: Dr. Ram's Capital A/c by 90,000; Laxman's Capital A/c by 60,000; and Bharat's Capital
Alc by 30,000; Cr. Goodwill A/c by 1,80,000;
To Adjust Goodwill: Gaining Ratio 1: 1; Dr. Ram's Capital Alc and Bharat's Capital A/c by 42,000 cach; Cr. Laxman's
Capital A/c by ? 84,000
To Distribute Profits: Dr. Profit and LoSs Appropriation A/c by 1,20,000; Cr. Ram's Capital A/c by 80,000 and Bharat's
Capital A/c by ? 40,000.
21. Journal

Date Particulars LLE Dr. ) Cr. ()

Bank A/c Dr 2,70,000

April To Debenture Application and Allotment A/c 2,70,000

2022 (For debentureapplication and allotment moncy received on 1,500 debentures (a 135 cach)
Debenture Application and Allotment Alc D 2,70,000

April Loss on Issue of Debentures Alc Dr 45,000

2022 To 9% Debentures A/e 3,00,000

To Premium Payable on Redemption of Debentures A/c 15,000

(For 2,000, 9% debentures of ? I50 cach issued at a discount of 10% redeemable at a

premium of 5% )
31 Securities Premium Reseve Alc Dr 40,000
March Statement of Profit and Loss Dr 5,000
2023 To Loss on Issue of Debentures A/c 45,000
(For loss on issue of debentures written off)
 Balance Sheet of XYZ LId.
as on 31 March 2023 (An Ertract)

Particulars Note No. ()

1, Equity and Liabilities:
Shareholders' fund:

Share Capital
Reserves and Surplus 10,000
Non-Current Liabilities:

Long-term Borrowings 2 3.00,000

Other Long-term Liabilities 15,000

Notes to Accounts:

Reserves and Surplus

Securities Premium Reserve 40,000
Less: Loss on issue of debentures written off (40,000)
Surplus ie, Balance in Statement of Profit and Loss 15,000
Less: Loss on issue of debentures written off (5,000) 10,000

10,000

2. Long-term Borrowings
9% Debentures 3,00,000

3. Other Long-term Liabilities

Premium payable on Redemption of Debentures 15,000

22 Journal Entries

Date Particulars LE Dr. () Cr. ()

Land A/c Dr 20,000

Creditors Ale Dr 3,000
To Revaluation A/c 23,000

(For increase in value of land and decrease in value of creditors transfer to revaluation account)

Revaluation A/c D 5,000

To Building A/c 5,000

(For decrease in value of building transfer to revaluation account)
Revaluation Alc D 18,000

To A's Capital A/e 7.200

To B's Capital A/c 7,200

To C's Capital Alc 3,600

(For profit on revaluation of assets and liabilities transfer to partner's capital accounts in
their old ratio)
 C's Capital Alc Dr 9,000
To A's Capital Alc 7,000
To B's Capital A/c 2,000

(For adjustment of general reserve through partners capital accounts)

C's Capital A/c Dr 13.500

To A's Capital A/c 10,500

To B's Capital A/c 3,000

(For adjustment of goodwill through partners capital accounts)

Working Note:

Calculation of sacrificing ratio:

12-5 7
A's sacrifice - 30

B's sacrifice =-2= 12-10

30 30
6

6- 15
C's sacrifice = 30 = Gain
23. Cash Book
Dr. (Bank Column only) Cr

Amount Amount
Particulars Particulars
()

To Share Application Alc 10,50,000 By Share Application Alc 1,25,000

To Share Allotment Ale 3,71,000By Balance cld 22,00,500
To Share First Call A/c 4,92,500
To Share Second and Final Call Alc 3,94,000
To Share Capital Ae 18,000

23,25,500 23,25,500

Journal
Date Particulars LE Dr. ) Cr. ()
Share Application A/e Dr. 9,25,000
To Share Capital Alc 6,00,000
To Share Allotment Alc 3,25,000
(For the application money on 20,000 shares were transfer to capital and excess
money was adjusted to share allotment and beyond it were refunded)
Share Allotment A/c Dr. 7,00,000
To Share Capital A/e 6,00,000
To Securities Premium Reserve Ac 1,00,000

(For the allotment money was due on 20,000 shares @35 each including premium
of ? 5 each)
 Share First Call Ac Dr. 5,00,000
To Share Capital A/c 4,00,000
To Securities Premium Reserve A/c 1,00,000
(For the first call money was due on 20,000 shares @ 25 each including premium
of 5 each)
Share Capital Ale Dr. 16,000
Securities Premium Reserve Ale Dr. 2,000
To Share Allotment A/c 4,000
To Share First Call A/c 5,000
To Share Forfeiture A/c 9,000
(For 200 shares were forfeited due to non-payment of allotment and first call)
Share Second and Final Call Alc Dr. 39,600
To Share Capital Alc 39,600
(For the second and final call money was due on 19,800 shares a ? 20 each)
Share Capital Ale Dr. 10,000

Securities Premium Reserve Alc Dr. S00

To Share First Call Alc 2,500

To Share Second and Final Call Alc 2,000
To Share Forfeiture Ale 6,000
(For 100 shares were forfeited due to non-payment of first call and second call)
Share Forfeiture A/c Dr. 2.000

To Share Capital A/C 2,000

(For 200 shares were reissued @ ? 90 each as fully paid up)

Share Forfeiture Alc Dr. 8.500

To Capital Reserve Alc 8,500

(For the balance of share forfeited account was transfer to capital reserve account)

Working notes:
Calculation of money received on allotment: (7

Total money due on allotment (20,000 x 35) 7.00,000

Less: Money adjusted from application 3.25,000

Less: Money not paid by Ansh 4,000*

Money received on allotment 3,71,000

Number of shares Applied by Ansh (15,000/10,000 × 200) = 300 shares
(3)

Application money paid by him (300 x 30) 9.000

Application money was adjusted (200 x 20) 6.000

Excess Money (9,000 - * 6,000) 3,000

Money due on allotment by him (200 x 35) 7,000
Less: Already received (3,000)
Money not paid by him on allotment 4,000*
 Or

Journal of XY Ltd.

() Date Particulars LLE Dr. () Cr. ()

Share Capital A/e Dr 32,000

Securities Premium Reserve Alc Dr 4,000
To Share Allotment Alc 12,000
Share First Call Ae 12,000
To Share forfeiture A/c 12,000
(For 400 shares were forfeited due to non-payment of allotment and first call)
Bank A/e Dr 11,200
Share forfeiture A/e Dr 1,600
To Share Capital Alc 12,800
(For 160 shares were reissued @ of 70 each as ? 80 paid up)

Share forfeiture A/e Dr 3,200

To Capital Reserve A/e 3,200
(For the balance of share forfeiture Alc was transfer to capital reserve A/c)

(i) Calculation of money received on Allotment: (?)

Total money due on allotment (60,000 x?5) 3.00,000

Less: Money adjusted from application (40,000)

Less: Money not paid by R (10,000 x 5) (S0,000)
Add: Advance money paid byT (3,000 x 4) 12,000
Money received on allotment 2,22,000
Note: N0. of shares allotted to T = 50,000/70,000 × 4,200 = 3,000 shares.
24. Dr. Revaluation Ac Cr.
Amount Amount
Particulars Particulars

To Stock 5,000 By Building 10,800

To Furniture 7,000 By Loss transfer to Capital A/c: (Bal. fig.)
To Ansh Capital A/c 3,500 Ansh 8,560
To Provision for Bad Debts 1,000 Vansh 2,140 10,700
To Investment 5,000
21,500 21,500

Dr. Partners Capital A/cs Cr.

Ansh Vansh Tez Particulars

Ansh Vansh Tez
Particulars
(()
To Goodwill A/c 4,800 1,200 By Balance bjd 1,20,000 80,000
To Advertisement Suspense A/c 6,000 1,500 By General Reserve Alc 9,600 2,400

To Revaluation A/c (Loss) 8,560 2,140| By Revaluation Ac (Expenses) 3,500

To Bank Alc (Withdrawal of Goodwill) 8,000 2,000 By Bank Alc 1,00,000

To Balance c/d (Bal. fig.) 1,21,740 79,560 1,00,000 By Premium for Goodwill Alc 16,000 4,000
1,49,100 86,400 1,00,000 1,49,100 86,400| 1,00,000
 Or

Dr. Partner's Capital Accounts Cr

Y X Y
Particulars Particulars
() e ) )
To X's Capital Alc (Goodwill) 9,600 By Balance b/d 50,000 40,000 20,000

To Z's Capital A/c (Goodwill) 4,800 By Workmen

To Bank A/c 3.200 Compensation Reserve Alc 1,200 1,800 3,000

To X's Loan Alc 60,000 By Investment Fluctuation
To Balance c/d (Bal. fig.) 31,000 33,800 Reserve Alc 2,400 3,600 6,000

To Y's Capital (Goodwill) 9,600 4,800

63,200 45,400 33,800 63,200 45,400 33,800

Balance sheet
Amount Amount
Liabilities Assets
()
Creditors 46,000 Furniture and Fixtures 55,000
Claim Against Workmen Compensation Reserve 4,000 Equipments 15,000
X's Loans 60,000 Investments 22,000
Capital Accounts: Machinery 18,000
31,000 Stock 12,000
33,800 64,800 Debtors 30,000|
|Less: Provision for Doubtful Debts (3,000) 27,000
Bank 25,800

1,74,800 1,74,800

25. Dr. Revaluation A/c Cr.

Amount Amount
Particulars Particulars
)
To Sundry Assets A/e (WN (iiü)) 3,30,000 By Creditors 40,000
To Cash Alc (Expenses) 7,000 By Cash Alc (Assets Realised) 3,20,000
To Cash A/c (Creditors) 40,000 By Loss transferred to: (Bal. fig.)
P's Capital Alc (4/10) 6,800
Q's Capital Alc (3/10) 5,100
R's Capital A/c (3/10) 5,100 17,000
3,77,000 3,77,000

Dr. Partners Capital A/es (After Dissolution) Cr

P R P R
Particulars Particulars
() )
To Revaluation A/c (Loss) 6,800 5,100 5,100| By Balance b/d (WN1) 1,20,000 1,35,000 35,000|
To Cash Alc (Bal. Fig.) 1,13,200| 1I,29,000 29,000
(Final Payment)
1,20,000 35,000 35,000 1,20,000 1,35,000 35,000
 Dr. Cash A/e (After Dissolution) Cr.

Particulars Amount () Particulars Amount ()

To Realisation A/e (Assets Realised) 3,20,000 By Realisation A/c (Expenses) 7,000

By Realisation A/c (Creditors) 40,000

By P's Capital Alc (Final Payment) 1,13,200

By Q's Capital Alc (Final Payment) 1,29,900

By R's Capital Alc (Final Payment) 29,900

3,20,000 3,20,000

Working notes:
(i) Calculation of Partners' Capitals as on 31st March, 2021, i.e., date of dissolution:
Dr. Partners' Capital A/es (Before Dissolution) Cr

Particulars P) R) Particulars PO) Q) R)

To Profit and Loss Alc (Loss) 60,000 45,000 45,000 By Balance b/d 2,00,000| 2,00,000 1,00,000
To Drawings A/c 20,000 20,000 20,000

To Balance c/d (Bal. fig.) 1,20,000 1,35,000 35,000

2,00,000 2,00,000 2,00,000 2,00,000 2,00,000 2,00,000
(ii) In case of loss, interest on capital will not be allowed.
(ii) Calculation of Sundry Assets as on 31st March, 2023:
Memorandum Balance sheet
as at 31st March, 2023
Liabilities Amount ) Assets Amount ()
Creditors 40,000 Sundry Asscts (Balancing Figure) 3,30,000O
Capital A/cs:
P 1.20,00)
1,35,00
R 35,000 2,90,000
3,30,000 3,30,000

26 I. Charge against profits

II. Statement of Profit and Loss Dr. 76,000
To Interest on Debentures A/c 76,000
III. 9,000
IV. They are lenders of the company.
27. (c) S5% [Operating Profit = Gross Profit -Operating Expenses = 9,00,000 75,000 = 8,25,000
8,25,000
Operating Profit Ratio 15,00,000 X 100 = 55%1

Or
(c) Current Liabilities
28. (c) Sale of scrap
29. (c) 1-(iüi), 2-(i), 3-(iü)
Or
(c) Statement I is correct and Statement II is incorrect.

30. (d) Short Term Borrowings

31. S. No. Items Major Head Sub Head

() Public Deposits Non-Current Liabilities Long-term Borrowings

(ü) Interest accrued but not due Current Liabilities Other Current Liabilities
(iii) Securities Premium Reserve Shareholders Fund Reserves and Surplus
(iv) Stores and spares Current Assets Inventory
(v) Debenture maturing current financial year Current Liabilities Other Current Liabilities

(vi) Securities Premium Shareholders' Fund Reserves and Surplus

32. (a) Inventory Turnover Ratio = 7.64 times, i.e., Z 16,80,000 + 2,20,000.
(b) Working Capital Turnover Ratio = 3.57 times Le., 7 25,00,000+7,00,000
33. Comparative Statement of Profit and Loss
as at 31st March, 2022 and 2023

Absolute Change Percentage

Note 2021-2022 2022-2023 (Increase or Change (Increase
Particulars
No. (() Decrease) or Decrease)
(%)
I. Revenue from Operations 4,00,000 7,20,000 3,20,000 80,00

II. Expenses
(a) Cost of Materials Consumed 2,00,000 2,40,000 40,000 20.00
(b) Other Expenses 20,000 48,000 28,000 140.00

Total Expenses 2,20,000 2,88,000 68,000 30,91

III, Profit before Tax (|- I) 1,80,000 4,32,000 2,52,000 140,00

IV. Less: Tax @ 50% 90,000 2,16,000 1,26,000 140,00

V. Net Profit after Tax (|ll -IV) 90,000 2,16,000 1,26,000 140.00

Working Notes:

Particulars 2021-22 2022-23

(Ü) Revenue from Operations 2,00,000 × 200/I00 = 4,(00,000 2,00,(000 x 300/10) = ? 7.20,000
(ü) Oher Expenses 2,00,000 x 10/100 = 20,000 2,40,000 x 20/100 =48,000

Or
Comparative Statement of Profit and Loss
for the year ended 3Ist March, 2022 and 2023
31st 31st Absolute Change Percentage Change
March, March, (Increase or (Increase or
Note 2022 2023 Decrease) Decrease)
Particulars ) () (%)
No.

(A) (B (C=B-A) (D-x 100)

I. Revenue from Operations (Net Sales) 48,00,000 60,00,000 12,00,00O 25.00

Expenses
(a) Cost of Materials Consumed (WN) 24.00,000 36,00,00O 12,00,00O S0.00

(b) Other Expenses (WN) 3.60,000 2,40,000 (1,20,000) (33.33)

Total Expenses 27,60,000 38,40,000 10,80,000 39.13
III. Profit before Tax 20,40,000 21,60,000 1,20,000 5.88
IV. Income Tax 8,16,000 6,48,000 1,68,000 20.59
Net Profit after Tax (II- IV) 12,24,000 15,12,000 2,88,000 23.53
 Working Notes:
1. Cost of Material Consumed and Other Expenses:
Year Cost of Material Consumed () Other Expenses ()
2021-22 50% of 48,00,000 =24,00,000 15% of (R 48,00,000- 24,00,000) =? 3,60,000
2022-23 60% of 60,00,000 = 36,00,000 10% of (R 60,00,000 - 36,00,000) = 2,40,000

2. Tax Eypenses:
2021-22:40% of? 20,40,000 = 8,16,000
2022-23: 30% of? 21.60,000 = 6.48,000
34. Cash Flow Statement of XYZ Ltd.
for the year ended 3lst March 2022
Note Amount Amount
Sr. No. Particulars
No. () ()
(A) Cash flow from (or used in) Operating activities:
Net Profit before tax and extraordinary items 8,15,00
Adjustments for Non-Cash and Non-Operating Items:
Add: Loss on Sale of Fixed Assets 8,000
Depreciation on Fixcd Tangible Assets 60.000
Interest on debentures 27,(0X)
Operating profit before working capital changes 9,10,000
Add: Increase in current liabilities and decrease in current assets
Less: Decrease in current liabilities liabilities and
Increase in current assets
Other Current Liabilities (10,000)
Trade Payable (.30,000)
Inventory (1.30,000)
Trade Receivables (1.50,000 )
Cash generated from Operating Activities 4,90,(000
Less: Tax paid (60,000)
Cash flow from Operating Activities 4.30,(000 4,30,000)
(B) Cash flow from (or used in) Investing activities:
Sale of Plant and Machinery 8,000
Purchase of Plant and Machinery (1,86,000O)
Purchase of Building (3,50,000)
Purchase of Goodwill (1,60,000)
Cash used in Investing Activities (6.88,000) (6,88,000)
(C) Cash flow from (or used in) Financing activities:
Proceeds from issue of Share Capital 3,00,000
Proceeds from issue of 9% Debentures 4,00,000
Proceeds from Bank Overdrafts 10,000

Redemption of Preference Share (1,00,000)

Proposed Dividend Paid (40,000)
Payment of Interest on Debenture (27,000)
Cash flow from Financing Activities 5,43,000 5,43,000
(D) Net Increase in Cash and Cash equivalents (A + B + C) 2,85,000
(E) Add: Cash and Cash Equivalents at the beginning of the year (Cash + Bank
+ Marketable Securities) 2,65,000
(F) Cash and Cash Equivalents at the end of the year (Cash + Bank + Marketable
Securities) 5,50,000
Working Notes:
Net Profit for the current year (? 4,50,000 + (? 50,000)] 75,00,000

Transfer to General Reserve 2,00,000

Provision for Tax 7 75,000
Proposed dividend 40,000
Net Profit before tax and extraordinary items 8,15,000

Dr. Property, Plant and Equipment (Plant and Machinery) Alc Cr.
Amount Amount
Particulars Particulars
()
To Balance b/d 1,20,000 By Depreciation A/c 60,000

To Bank A/c (Purchases) 1,86,000By Bank Alc (Sales) 8,000

By Statement of Profit and Loss 8,000

By Balance c/d 2,30,000

3,06,000 3,06,000

Dr. Provision for Tax Alc Cr.

Amount Amount
Particulars Particulars
() ()
To Cash Alc (Tax Paid) 60,000 By Balance b/d 65,000

To Balance cld 80,000 By Statement of Profit and Loss (Provision made) 75,000

1,40,000 1,40,000