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Series: PTSIND/01/08

Registration No.

Code No. ACO/01/J

Candidates must write the Code on the title page of the answer-book.

Please check that this question paper contains 8 printed pages. Code number given on the right-hand side of the question paper should be written on the title page of the answer-book by the candidate. Please check that this question paper contains 23 questions. Please write down the Serial Number of the question before attempting it.

(XII) Time: 3 hours] General Instructions: (i) This question paper contains three Parts A, B and C. (ii) Part A is Compulsory for all. (iii) Attempt only one part of the remaining Parts B and C. (iv) All parts of question should be attempted at one place. [Maximum marks = 80

Part A Accounting for Not for Profit Organizations, Partnership Firms and Companies 1. 2. 3. 4. 5. 6. What is Membership Subscription? What is Revaluation Account? What is meant by Super Profits? What is meant by a Debenture? What do you mean by Calls-in-Arrear? From the following extract of Receipts and Payment Account and the additional information, you are required to calculate the income from subscription for the year ending 31st March, 2007 and show them in the Income and Expenditure Account, and the Balance sheet of a club. An Extract of Receipts and Payments Account For the year ended 31st March, 2007 Receipts To Subscriptions: 2005-06 2006-07 2007-08 Additional Information: 5,000 30,000 6,000 Rs. Payments Rs. [1] [1] [1] [1] [1]

41,000 Rs. 6,000 5,000 6,000

a) Subscriptions outstanding on 31 March, 2006. b) Subscriptions outstanding on 31st March, 2007 c) Subscriptions received-in-advance on 31st March, 2006. 7. 8.


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Explain the term over-subscription. How is it dealt in accounting records? X Ltd. Issued 20,000 share of Rs. 10 each to the public to be paid as follows: On application Rs. 4 each and on allotment Rs. 6 each.

Application for 24,500 shares was received on 15th March, 2007. Allotment was made on 30th April, 2007 when money received on excess application was refunded. On 30th May, 2007 allotment money was received with the exception of 400 shares. Show the Journal entries in the books of X Ltd. 9. A and B are partners sharing profits in proportion of 3:2 with capitals of A at Rs. 40,000 and of B at Rs. 30,000, respectively. Interest on capital is agreed at 5% per annum. B is to be allowed to an annual salary of Rs. 3,000 which has not been withdrawn. During 2006-07, the profits for the year prior to calculation of interest on capital but after charging Bs salary amounted to Rs. 12,000. A provision of 5% of this amount is to be made in respect of commission to the manager. Prepare an account showing the allocation of profits and Partners Capital Accounts. A and B are partners sharing profits and losses in the ratio of 3:1. Their capitals were: A Rs. 60,000; B Rs. 20,000. They decided to change the profit-sharing ratio to 5:3 with effect from 1.1.2007. The goodwill of the firm is to be valued at 2 years purchase of 3 years average profits. They also decided that their capitals should be proportionate to their profit-sharing ratio. The profits of the firm for 2004, 2005 and 2006 were Rs. 22,000; Rs. 28,000 and Rs. 34,000 respectively. Pass necessary journal entries and prepare Partners Capital Accounts. X Limited was registered on 1st January, 2007 with a capital of Rs. 10,00,000 divided into 1,00,000 equity shares of Rs. 10 each. On 1st February, 2007, it makes an issue of 20,000 share of Rs. 10 each payable as follows: On Application On Allotment Balance on First and Final Calls Rs. 3 Rs. 2 (Due of 1st March) (Due date 1st May) (Due date 31st August)






Applications were received for 26,000 shares. Applications for 6000 shares were out-rightly rejected and allotment was made on 1st April, 2007. All money called was duly received except Mr. Y, a holder of 500 shares, who could not pay allotment and call money. He paid the whole amount on 31st October, 2007 with interest @ 12% per annum. Prepare the Cash Book and pass Journal entries in the books of the company. 12. (a.) Subhash, Mohan, Usha and Rinku are partners sharing profits in ratio of 3:2:3:2. On the retirement of Usha, goodwill was valued at Rs. 2, 40, 000. Ushas share of goodwill will be given to her by adjusting it into the Capital Accounts of Subhash, Mohan and Rinku. Give the necessary entries for the treatment of goodwill when the new profit sharing ratio is 3:1:6.


(b.) A, B and C are equal partners in a firm whose books are closed on 31st December every year. A died on 31st March, 2007 and according to the agreement, his share of profits from the closing of the last accounting year till the date of death is to be calculated on the basis of the average profits of the last three years. Net profits of the last 3 years were Rs. 8, 000; Rs. 11,000; and Rs. 17,000. Calculate As share of profits and pass the necessary Journal entry. 13. The Receipts and Payments Account of Delhi Football Club for the year ending 31st March, 2007 is shown in the following table.
Receipts To Balance b/d (1.4.2006) To Subscriptions Received To Interest To Sale of Furniture To Donations for Club Building Rs. 48,000 2,46,000 2,000 10,000 60,000 Payments By Purchase of Balls By Tournament Fees By Affiliation Fees By Rent Playground By Refreshment Expenses By Traveling Expenses By Investment By Salaries By Miscellaneous Expenses By Balance c/d (31.3.2007) 3,66,000 Rs. 80,000 10,000 2,000 5,000 4,000 30,000 1,00,000 12,000 8,000 1,15,000 3,66,000


Prepare the Clubs Income and Expenditure Account for the year ending 31st March and a Balance Sheet as on that date, after taking the following information into account: (i) Subscriptions received include Rs. 10,000 for the year 200506 and Rs. 8,000 for the year 200708, Rs. 16,000 are still outstanding for the year 200607. (ii) The book value of furniture sold was Rs. 14,000. (iii) Interest earned but not received amounted to Rs. 500. (iv) Rent of playground due but not paid for the current year amounted to Rs. 6,000, Rs. 1,000 was paid for the year 200506. (v) Salary outstanding for the year 200607 is Rs. 5,000. (vi) Stock of balls on 31st March, 2007 was Rs. 4,000. 14. (a) A limited company issued Rs. 1,00,000, 9% debentures at a discount of 6%. These debentures are to be redeemed equally, spread over 5 annual installments. Show the Discount on Issue of Debentures Account for 5 years.


(b) Lotus Co. Ltd. took over assets of Rs. 2, 50, 000 and liabilities of Rs. 30, 000 of Gone-by Co. for the purchase consideration of Rs. 3, 30, 000. The Lotus Co. Ltd. paid the purchase consideration by issuing debentures of Rs. 100 each at 10% premium. Give journal entries in the books of the Lotus Co. Ltd. 15. Mahesh, Naresh and Suresh were in partnership sharing profits and losses equally. Suresh died on 30th June, 2007. The Balance Sheet of the firm on 31st March, 2007 stood as follows:
Liabilities Creditors General Reserve Capital A/cs: Mahesh Naresh Suresh 30,000 20,000 20,000 70,000 88,900 Rs. 12,900 6,000 Assets Cash at Bank Debtors Stock Investment (At cost) Freehold Property Good will Rs. 5,000 10,000 10,000 5,000 40,000 18,900 88,900


Additional Information: (a) On the date of death, freehold property is valued at Rs. 58,000. Investments are valued at Rs. 4,700 and stock is valued at Rs. 9,400. (b) Goodwill is to be valued at one years purchase of the average profits of the past 5 years. (c) Sureshs share of profits to the date of his death is to be calculated on the basis of average profits of the proceeding 3 years. The profits of the last 5 years are as under: 200203 Rs. 11,500; 20034 Rs. 14,000; 20045 Rs. 9,000; 200506 Rs. 8,000; 200607 Rs. 10,000. You are required to pass Journal entries and to show Capital Account of Suresh. Also, set out the Balance Sheet of the remaining partners. Or X, Y and Z are partners sharing profits in the ratio of their capitals. Y retired from the firm on 31st March, 2007, the date on which the Balance sheet of the firm was as follows:

Liabilities Sundry Creditors Bill Payable Outstanding Slavery Capitals A/cs: X Y Z 30,000 24,000 18,000

Rs. 4,000 2,500 500

Assets Cash Debtors Less: Provision for Bad Debts Stock Machinery Land and Buildings

Rs. 5,400 5,600 10,000 28,000 30,000

72,000 79,000 79,000

The following adjustments were made: (i) Building appreciated by 20%; stock depreciated by 10%; provision for doubtful debts was to be 5%; and a reserve for legal charges payable was to be made at Rs. 900. (ii) Goodwill of the firm be valued at Rs. 12,000 and Ys share in it be adjusted into the Capital Account of X and Z without opening Goodwill Account. (iii) Rs. 24,000 from Ys Capital Account be transferred to his Loan Account and balance be paid in cash. (iv) New Profit-sharing ratio of X and Z is decided to be 3:2. Give the necessary Ledger Accounts and the Balance Sheet of the firm after Ys retirement. 16. Sudershan Ltd. invited applications for 1, 00, 000 Equity shares of Rs. 10 each. The shares were issued at a premium of Rs. 5 per share. The amount was payable as follows: On application and allotment Rs. 8 per share (including premium Rs. 3). The balance including premium on the First and the Final Calls. Applications for 1, 50, 000 shares were received. Applications for 10, 000 shares were rejected and pro rata allotment was made to the remaining applicants on the following basis: 1. Application for 80,000 shares was allotted 60,000 shares; and 2. Application for 60,000 shares was allotted 40,000 shares. X, who belonged to the first category and was allotted 300 shares, failed to pay the First Calls money. Y who belonged to the second category and was allotted 200 shares also failed to pay the First Call money. Their shares were forfeited. The forfeited shares were reissued @ Rs. 12 per share fully paid up. Pass the necessary Journal entries and prepare the cash book. Or


A company issued for public subscription 40,000 equity shares of Rs. 10 each at a premium of Rs. 2 per share payable as under: On Application Rs. 2 per share On Allotment Rs. 5 per share (including premium) On First and Final Call Rs. 5 per share Applications were received for 60,000 shares. Allotment was made on pro rata basis to all the applicants. Money overpaid on application was applied towards sum due on allotment. A, to whom, 1,000 shares were allotted failed to pay the allotment and call money. B to whom 2,000 shares were allotted failed to pay the final call. The shares of A and B were subsequently forfeited after the first and final call was made. 2,000 of the forfeited shares were reissued @ Rs. 8 per share as fully paid. The reissued shares included all of As shares. Pass Journal entries in the books of the company to record the above transactions. Part - B Financial Statement Analysis 17. 18. State one objective of Analysis of Financial Statements. Which statement shows inflows and outflows of cash and Cash Equivalents during a specific period? Define Operating activities. From the following Balance Sheet of Royal Industries 31st March, 2006 and 2007, prepare a Comparative Balance Sheet.
Liabilities Current Liabilities Reserve Loans Share Capital 31.3.2006 (Rs.) 1,00,000 1,00,000 3,00,000 5,00,000 10,00,000 31.3.2007 (Rs.) 2,00,000 1,00,000 2,00,000 10,00,000 15,00,000 10,00,000 15,00,000 Assets Current Assets Fixed Assets 31.3.2007 (Rs.) 2,00,000 8,00,000



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19. 20.




31.3.2007 (Rs.) 3,00,000 12,00,000


Accounting ratios ignore qualitative factors and are also not comparable if different firms follow different accounting policies. Comment. A business has current ratio 3:1 and quick ratio 1.2:1. If the working capital is Rs. 1, 80,000; calculate the current liabilities and stock. 7





From the following Balance Sheet of XYZ Ltd. Prepare a Cash Flow Statement:
Liabilities 1.4.2006 31.3.2007 Assets (Rs.) (Rs.) 1,40,000 Goodwill 28,000 Plant and Machinery 60,000 Investments 1,00,000 Stock 44,000 Debtors 6,000 Cash at Bank Discount on Issue 14% 36,000 3,14,000 52,000 Debenture 4,30,000 2,000 3,14,000 3,000 4,30,000 24,000 40,000 60,000 30,000 4,000 1.4.2006 (Rs.) 40,000 1,64,000 12,000 16,000 32,000 48,000 31.3.2007 (Rs.) 32,000 2,16,000 31,000 22,000 22,000 50,000

Equity Share Capital 1,20,000 Profit and Loss A/c General Reserve 14% Debenture Creditors Bills Payable Provision for Depreciation

Additional Information: (a) Investments costing Rs. 12,000 were sold for Rs. 11,000. (b) Rs. 1,000 is written off from discount on issue of 14% debentures. (c) Debenture interest paid Rs. 14,000.