Accounting 12

DELHI PUBLIC SCHOOL Assignment Booklet
Indirapuram, Ghaziabad (Class -XII :

ACCOUNTS)
3 Hours 80
One Paper Marks
Unit
Marks
Part A: Accounting for not for Profit Organisations.
Partnership Firms and Companies
1 Accounting for partnership firms fundamentals 35

Accounting for partnership firms Reconstitution & 25
2 Dissolution Accounting for share Capital
4 Accounting for Debenture
60
Part B: Financial Statement Analysis
56 Analysis of Financial Statements. 12 8

7 Cash Flow Statement Project 20
Work 1: Project File 2: Written Test
3: Viva Voce
(one
4 marks
12 marks
hour) 4
marks 40
MONTH WISE SYLLABUS BREAK UP
April
Accounting Ratios: Meaning, Objectives and Classification.Types of Ratios:-

Liquidity Ratios: Current Ratio, Liquid Ratio.Solvency Ratios: Debt to equity, Total
Assets to Debt, Proprietary Ratio,Interest Coverage Ratio.Activity Ratios: Inventory
Turnover, Debtors Turnover, Working CapitalTurnover, Creditor Turnover.Profitability
Ratios: Gross Profit, Operating Ratio, Operating Profit Ratio,Net Profit Ratio, Return on
Investment.
Unit V : Analysis of Financial Statements
Content:
1 (i) Financial Statements of a Company : Balance Sheet of a Company in
the prescribed form with major headings only (Schedule VI), different items
under each heading.
2 (ii) Financial Analysis: Meaning, Significance and Purpose, Limitations.
(iii) Tools for Financial Analysis :Comparative Statements, Common Size

Statements.
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May
Unit VI : Statement of Changes in Financial Position

1 (i) Content:
2 (ii) Cash Flow Statement: Meaning and Objective, Preparation (only Indirect
Method for operating activities) Adjustment related to depreciation, dividend and
tax, sale and purchase of non-current assets (as per revised standard issued by
ICAI)
3 (i) Goodwill: Nature, Factors affecting and methods of valuation: Average
profit, Super profit and Capitalisation methods.
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July
Unit I : Accounting for Partnership Firms -fundamentals

Content:
1 (i) Nature of Partnership firm: Partnership Deed-meaning, importance.
2 (ii) Provisions of Indian Partnership Act 1932 in the absence of partnership
deed.
(iii) Final Accounts of Partnership: Fixed vs Fluctuating Capital, Division of Profit

among partners, guarantee of profits, past adjustments (relating to
interest on Capital, interest on drawing, salary and profit sharing ratio,
Preparation of Profit and Loss Appropriation Account.
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~ August
Unit II: Accounting for Partnership firms -Reconstitution and
Dissolution
Content:
1 (i) Changes in Profit sharing Ratio among the existing partners-sacrificing
Ratio and Gaining Ratio.
2 (ii) Accounting for Revaluation of Assets and Liabilities and distribution of
reserves and Accumulated Profit.
(iii) Admission of a Partner: Effect of Admission of Partner on change in

Profit Sharing Ratio, Accounting Treatment for Goodwill (as per AS
26), Revaluation of Assets and Liabilities, Treatment of Reserves
(accumulated Profits) and Adjustment of Capitals, Reassessment,
Preparation of Balance Sheet.
Unit II : Accounting for Partnership firms -Reconstitution and Dissolution
Content:
Retirement and death of a Partners:-effect of retirement, death of a partner on change
in profit sharing ratio, treatment of goodwill, treatment for revaluation of assets and
re-assessment of liabilities, adjustment of accumulated profits and reserves.
Calculation of deceased partners share of profit till the date of death, Preparation of
deceased partners Capital account, executors account and preparation of balance
Sheet.
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September
Unit II Dissolution of Partnership firms:-Types of dissolution of firm. Settlement of

account, preparation of realisation accounts and Partners Capital A/c and
Bank/Cash A/c.
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October
Unit III : Accounting for Share Capital
Content:
Share Capital: Meaning, Nature and Types. Accounting for share capital: Issue
and Allotment of Equity and Preference Shares, Private Placement of shares,
public subscription of shares:-Over Subscription and under subscription, issue at
par. premium, Calls in advance, Calls in arrears, issue of shares for
consideration other than cash.
1 (i) Accounting treatment of forfeiture of Shares and re issue of forfeited
shares.
2 (ii) Presentation of Shares Capital and Debenture in Companys Balance
Sheet.
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November
Unit IV : Accounting for Debenture
Content:
1 (i) Issue of debentures at par and premium, issue of debenture for
consideration other than cash, Issue of debentures as collateral security,
Interest on debentures.
1 (ii)Redemption of debenture.
2 (a) Lumpsum Method.
3 (b) Draw of lots.
4 (c) By purchase in the open market.
5 (d) By Conversion
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December Revision
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ASSIGNMENTS
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==== Accounting for Partnership firms -fundamentals
Q.1. What is Partnership deed?
Q.2. Define Partnership.
Q.3. state any two essential elements/ features of partnership.
Q.4. Why is written partnership agreement preferred?
Q.5. If Partnership deed is silent, how much interest on capital is provided?
Q.6. When Partnership deed is absent, what is the rate of interest on loan?
Q.7. Why P&L Appropriation A/c is Prepared?

Q.8. Give two items which may appear on the debit side of a partners
current A/C.
Q.9. Give one point of difference between Partners Capital A/c and
Current A/c.
Q.10. If the Partners Capital Accounts are fixed, Where will you record the
following items:
1 (i) Fresh Capital introduced by a partner.
2 (ii) Share of profit earned by a partner.
Q.11. Simran and Puneet are partners in a firm sharing profits and losses
equally On April 1, 2003 the capitals of the partners were simran-
Rs.2,00,000 and Puneet-Rs.1, 60, 000. The Profit and loss Account of the
firm showed a net profit of Rs.3,75,000 for the year ended March
31,2004.considering the following, Prepare the profit and Loss
Appropriation Account of the firm :
1 (i) Interest on capital to be allowed @ 6% per annum.
2 (ii) Puneets loan account of Rs.1, 00,000 for the whole year.
(iii) Interest on drawings of partners at 6% per annum Drawings being

simran-Rs.40, 000 and Puneet Rs.30, 000
(iv) Transfer 10% of the distributable profits to the Reserve Fund.
Q.12. P,Q and R are three partners of a business. On 31 st Dec 2000 after all the
necessary adjustments, the capital account of P,Q and R stood as Rs.
50,000, Rs. 30,000 Rs. 20,000 respectively. It was discovered that interest
on capital @ 5% per annum. had been omitted. The Profit for the same
year amounted to Rs. 70,000 and the partners drawings had been Rs.
10,000, Rs. 7,500 and Rs. 4,500 respectively for P,Q and R. The Profit
sharing ratio for P: Q: R is
4:1:2 calculate the interest on Capitals and pass an adjustment entry to
provide the interest on capital.
Q.13. Isha and Shilpi were partners sharing profits in the ratio of 3:2 Mini was to
receive a salary of Rs.55 Per annum, plus a commission of 10% on the
profits after charging such salary and commission or 1/5 th of the profits of
the firm, whichever is larger, Any excess of latter (i.e. profits) over the
former (i.e.salary & Commission) is to be bome personally by Isha. Prepare
the profits & Loss Appropriation Account, if profit for the year after
charging Minis salary is Rs, 605.
Q.14. A, B, and C are partners. They admit D and guarantee that his share of
profit will not be less than Rs.20, 000 Profits to be shared as
4:3:3:2 respectively. Total profits were Rs.96, 000. It was agreed that
excess payable to D over his Share will be borne by A, B, and C in the
ratio of 3:2:1 Calculate share of Profit for each Partner.
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==== Valuation of Goodwill and Change in Profit Sharing
Ratio
Q.1. What is meant by reconstitution of a Partnership Firm?

Q.2. Name any four occasions / circumstances when reconstitution of
firm takes place.
Q.3. What type of the asset goodwill is?

Q.4. Name three methods of Valuation of goodwill.
Q.5. X & Y are partners in a firm sharing profits in the ratio of 2:3 TheBalance
Sheet of the Firm as at March 31, 2007 is given belowBalance SheetAs at March
31, 2007
Liabilities Amount Assets Amount
Capital A/c X 8,00,000 Land Building Plant 5,00,000
Y 12,00,000 Creditors Furniture Stock 6,00,000
Out Standing expenses 20,00,000 S.Debtors Cash 8,00,000
3,10,000 1,20,000
70,000 1,80,000
1,50,000
30,000
23,80,000 23,80,000
The Partners Decided to share profit in equal ratio w.e.f. April 1, 2007 The
following adjustment were agreed upon :
1 (i) The Good will of the firm was valued at Rs.4,00,000 but it was not to
appear in books.
2 (ii) Land was Valued at Rs.8,00,000 Plant at 7,20,000 and furniture at
Rs.1,00,000 and were to appear at revalued amount in the balance sheet.
Pass the necessary adjustment entry to give effect to above.
Q.6. The following are the profits of a firm for the last three year
March 31,
Profit Rs.
year ending
4,00,000 (Including on abnormal gain of
2000
Rs.50,000)
5,00,000(after charging an abnormal loss of
2001
Rs.1,00,000)4,00,000(excluding Rs.50,000 Payable on the
2002
insurance of plant & Machinery)
Calculate the Value of firms goodwill on the basis of 2 years Purchase
Q.7.A Firm earns Rs.10,000 as its annual Profits, the rate of normal profit
being 10% The assets of the firm amounted to Rs.80,000 The value of
Goodwill is Rs.45,000. Find the value of outsiders Liabilities.
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==== Admission of a Partner
Q.1. State the two rights acquired by a newly admitted partner.

Q.2. Why is new profit sharing ratio calculated at the time of admission of a
new partner?
Q.3. Define sacrificing ratio in case of admission of a partner.

Q.4. How will you calculate sacrifice made by a partner?
Q.5. Give two Circumstances when sacrificing ratio may be applied.
Q.6. What is hidden Goodwill (Inferred Goodwill)?
Q.7. A and B were the partners sharing profit and losses in the ratio of 21:9, C
was admitted for 9/21 share in the profits. Calculate new profit sharing
ratio of the new partnership firm.
Q.8. A and B are partners in a firm sharing profit and losses in the ratio of 5:3.
A surrenders 1/20th of his share, where as B surrendered 1/24 th of his
share in favour of C, a new partner. Calculate new Profit Sharing Ratio.
Q.9. X and Y are partners sharing profit and losses in the proportion of
7:5 They agree to admit z in to partnership who is to get 1/6 th share in
profit. He acquire this share as 1/24 th from x and 1/8th from y, Calculate
the new profit sharing ratio.
Q.10. A, B, and C share profit and losses in the ratio of 4:3:2 D is admitted with
1/9th share B would retain his original share A and C to share profits and
losses equally in future. Find out new profit sharing ratio.
Q.11. Anil and Vishal are partners sharing Profits in the ratio of 3:2 They
admitted Sumit as a new partner for 1/5 share in the future profit on 1
Jan, 2007 Sumit brings in Rs.1,00,000 as capital and Rs.50,000 for his
share of goodwill, which is taken privately by Anil and Vishal. On that
date there was a balance of Rs.20,000 in general reserve and a balance
of Rs.50,000 in the profit & loss a/c of the firm Calculate new profit
sharing ratio of Anil, Vishal & Sumit. Also pass the necessary journal
entries.
Q.12. Mohan & Sohan are Partners in a firm sharing profit in the ratio of
3:2 They admit karan for 1/5 th share in the profit of the firm, which he get
equally from Mohan and Sohan, Karan brought Rs.15,000 as goodwill for
his share in profits. Calculate the new profit sharing ratio and pass
journal entries for treatment of goodwill.
Q.13. R & T are partners in a firm sharing Profits in the ratio of 3:2 S joins the
firm. R Surrenders 1/4th of his share and T 1/5th of his share in favour of S.
S contributed the following assets towards his capital and for his share of
goodwill stock Rs.40,000 debtors Rs.60,000 land Rs.1,00,000 Plant &
Machinery Rs.60,000 On the date of admission of S, the goodwill of the
firm was valued at Rs.5,20,000 Find the new profit sharing ratio and pass
journal entries.
Q.14. A&B are Partners Sharing Profits and losses equally and having capitals
Rs.2,00,000 and Rs.1,50,000 respectively, C Joins the firm and brings in
Rs.2,00,000 as his capital and 50,000 as his share of goodwill . The new
profits sharing ratio of A,B,C becomes 5:3:2 Journalise .
Q.15. A and B are Partners sharing profit in the ratio of 3:4 Their Balance
Sheet as on Dec 31, 2006 was as underBalance Sheet
Creditors Employees 4,500 Debtors Less : 6,000
Provident Fund 2,980 Provision 200 5800
Work mens compensation
Fund Capital 30,000 15,000 7500
A/c AB Stock Fixed Assets 24,000
1,960 Cash Profit & Loss 16,440
45,000 A/c 700
54,440 54,440
C is admitted for 1/7th Share in future profits, C brings Rs.6, 000 as capital
Rs.3,500 for Goodwill in cash. C acquires his share entirety from B, it was
further agreed that.
1 (i) Employees Provident fund is to be increased by Rs. 1, 500
2 (ii) Creditors are to be paid Rs.300 less.
(iii) All Debtors are good.

1 (iv) Fixed Assets are to be revalued at Rs.21,000
2 (v) Stock included Rs.900 for obsolete items.
Prepare revaluation A/c and Pass Journal entries for treatment of

Goodwill.
Q.16. A&B were Partners Sharing profits in the ratio of 3:1,C was admitted on
1st April 2001 as a partner. The Balance Sheet of A and B on 31.3,2001
before C s admission was as follows.
Balance Sheet As at
31.3, 2001
Liabilities Rs. Assets. Rs.
Capitals : A 20,000 B 10,000 Cash Bills Receivables. 5,000
Bills payable S. Creditors Buildings Car Plant 10,000
Reserve Fund Employee 20,000
Provident Fund 30,000 10,000
15,000 15,000
5,000
8,000
2,000
60,000 60,000
The terms on admission were as follows:

1 (i) C was to pay Rs.30, 000 as capital and Rs.16, 000 as goodwill for
th
1/5 share in profits.
2 (ii) Building was to be revalued at Rs.40,000 and car at Rs.15,000 Plant
was to be written down by Rs.5,000.
(iii) Capitals of all partners of the new firm were to be in the profit
sharing ratio. Give the Revaluation Account, Partners Capital
Accounts and the Balance Sheet of the new firm.
Q.17. Following is the Balance Sheet of A and B who share profits and losses in
the ratio of 3: 2
Balance SheetAs at 31.12.2001
Bills payable Capitals A 15,000 Patents Sundry 15,000 30,000
45,000 B 50,000 95,000 Debtors. Plant and 25,000 10,000
Machinery Furniture
Cash 30,000
1,10,000 1,10,000
On 31.12.2001, they decided to admit C for 1/6 th share into partnership.

He brings Rs.30, 000 as goodwill and introduced one half of the combined
capital of A and B in the new firm. At the time of Cs admission, Furniture
is depreciated by 5% Plant and Machinery is depreciated by 10% and a
Provision of 20% is to be created on Debtors for Doubtful Debts. Prepare
Revaluation A/c, Partners Capital A/c and Balance Sheet after Cs
Admission.
Q.18. following is the Balance Sheet of A and B as on 01.04.2007 who share
profits in the ratio of 3:2
Balance SheetAs on 1.4. 2007
Liabilities. Rs. Assets Rs.

Sundry Creditors Capital 20,000 Cash in Hand Debtors 3,000
Account A 30,000 B 50,000 Stock Furniture Plant 12,000
20,000 and Machinery 15,000
10,000
30,000
70,000 70,000
On that date C is admitted into the partnership on the following

terms.:
(i) That C brings in Rs.50,000 as capital and Rs.5,000 as premium
for goodwill for 1/6th share
(ii) That the value of stock is reduced by 10% while plant and
machinery is appreciated by 10%
(iii) That Furniture is revalued at Rs.9,000

1 (iv) That a provision for doubtful debt is to be created on sundry debtors at 5%
and Rs.200 is to be provided for outstanding electricity bill.
2 (v) Investment worth Rs.1,000 (not mentioned in the Balance sheet )is to be
taken in to account.
3 (vi) A creditor of Rs.100 is not likely to claim his money and is to be written off.
Record necessary journal entries and prepare revised balance sheet.

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Retirement of a partner.
Q. . Define Gaining Ratio in case of retirement /death of a partner.
Q. . Differentiate between sacrificing Ratio and Gaining Ratio.
Q. . How will you calculate gain of a partner?
Q. . Give Circumstances when gaining ratio is applied?
Q. . Why is revaluation A/c prepared at the time of retirement / death of
a partner ?
Q.6. X, Y and Z are partners sharing in the ratio 12:13:5 Z retires and surrenders 1/5 th
of his share in favour of Y and remaining in favour of X, Calculate new
profit sharing ratio and gaining ratio.
Q.7. W, X, Y and Z are sharing profits and losses in the ratio 4:3:2:1 Y retires
and W, X, Z share future profits equally. Calculate Gaining Ratio.
Q.8. A, B, and C are partners sharing profits in the ratio of 4:3:3 On Cs
retirement the value of firms Goodwill was agreed at Rs.30,000 A and B
agreed to share profits and losses in future in the ratio of 7 and 3
respectively. Give necessary journal entry in relation to Goodwill.
Q.9. P, Q, and R were partners sharing profits in the ratio 2:1:2 The Balance
Sheet on 31st Dec.2008 was as under
Liabilities Rs. Assets Rs.
Ps Capital 15,000 Debtors 25,000
Qs Capital 20,000 Stock 15,000
Rs Capital 20,000 Machinery 30,000
Creditors 15,000
70,000 70,000
Q retired on the same day, following terms were decided:

1 (i) Goodwill of the firm is valued at Rs.12,000 and Qs share of the same
adjusted in the accounts of P and R who share future profits in the ratio of 2:1
2 (ii) Create a Provision for 10% on Creditors and Debtors.
(iii) Create a Provision for Discount on Debtors and Creditors of 10% Prepare necessary
account to make the adjustments
Q.10. A, B and C were partners sharing profits and losses in the ratio of their capitals.
The Balance Sheet of the firm as at 31.12.2008 was as follows:

Bills Payable Cash Sundry Assets 5,000
Creditors As Capital 5,000
Bs Capital Cs
Capital
1,000
1,000
3,000
3,000
2,000
10,000 10,000
B retired and
following adjustments were made :

1 (i) Creditors were valued at Rs.2, 000
2 (ii) Bills Payable no longer payable, hence written off.
(iii) B to be paid immediately what is due to him.

(iv) Goodwill of the firm is valued on average profits of last three years. Which
were
(a) Rs.6,000 (c) Rs.1,000

(b) Rs.2,000
You require t give necessary journal entries and prepare
are
d o
balance sheet of the new firm immediately after Bs retirement.
Q.11. A, B and C were Partners in a business sharing profits equally, Cretires on

01.01.1999, When the Balance sheet stood as follows.Balance SheetAs at 01.01.1999
Bills Payable Creditors 2,000 Cash at Bank Bills 3,750
General Reserve Profit and 350 Receivable Debtors Stock in 2,500
Loss A/c Capitals A B 7,500 Trade Furniture & Fixture 6,300
3,000 Building & Land Deferred 700
7,500 Revenue Expenditure 4,000
8,250 16,350
3,000
to his loan account which will be paid in three equal annual installment
together with interest @ 10% p.a. Show the Retiring Partners Capital Account
and his Loan Account till it is paid off.
Q.12. X.Y. and Z were Partners sharing partners in the ratio of 3:2:1
Balance SheetAs at 31st March 2000

General Reserve 18,750 Fixed Assets 75,000
Bills Payable 32,250 Stock Book 10,000
Capital Accounts 35,500 Debts Less: 32,500
XYZ 20,000 Provision Cash 35,000 4,000
15,000 2500
1,21,50
1,21,500
0
On the same date X retires from the firm and the following adjustments were
agreed upon:
1 (i) Goodwill of the firm to be valued at Rs.30,000 and Xs share should be
adjusted in the accounts of Y and Z without opening the goodwill account
2 (ii) Fixed Assets to be written down by 20%, Stock be written up by 10% and
Provision for Doubtful Debts increased to Rs.4,500 Bills Payable to reduced by
Rs. 1, 000.
(iii) Y & Z have to bring sufficient cash to pay off X and to leave a cash balance
of Rs. 1, 750 in the firm.
(iv) Capitals of Y and Z have to be re-adjusted in their new profit sharing ratio
which is 5:3. Show Revaluation account, Partners Capital Accounts and
Balance Sheet of Y and Z after retirement of X.
Death of a Partner:
Q.13. X, Y, and Z were partners sharing profits and losses in the ratio of
5:3:2 respectively. On 31st Dec.1990 their Balance Sheet Stood as under :Z died on 1st May 1991.
It was agreed that:
Sundry Creditors 27,500 Goodwill 12,500
Reserve Fund 15,000 Building 50,000
Capital Accounts : Patents 15,000

ACCOUNTS)
X 75,000 Y 62,500 Z Machinery Stock

37,500 Debtors Cash at
Bank
75,000 25,000
1,75,000 20,000 20,000
2,17,500 2,17,500
1 (i) Goodwill be valued at 2 Years purchase of the average profit of the

last four years which were 1987-Rs.32,500, 1988Rs.30,000, 1989-
Rs.40,000 and 1990-Rs.37,500.
2 (ii) Machinery be Valued at Rs.70,000 Patents at Rs20,000 Building at
Rs.62,500
(iii) For the purpose of calculating Zs share in the profits of 1991, the
profits in 1991 should be taken to have been earned on the same
scale as in 1990
(iv) A sum of Rs.10,500 is to be paid immediately to the executors of Z
and the balance to be paid in four equal half-yearly installments
together with interest @ 10% p.a. Give the necessary journal entries
to record the above transactions and Zs Executors account for
1991.
Q.14. P Q & R were partners sharing profits and loses in the ratio of 5:3:2. On
31st Dec 2001 their Balance Sheet Stood as follows.
Sundry Creditors Reserve 1,92,500 Goodwill Building Patents 87,500
Fund Capitals : P 5,25,000 Q 1,05,000 Machinery Stock Debtors 3,50,000
4,37,500 R 2,62,500 12,25,000 Cash at Bank 2,62,500
5,25,000
17,500
1,40,000
1,40,000
15,22,500 15,22,500
R died on 31st March 2002, the following adjustments were made:

1 (i) Goodwill be Valued at 2 Years Purchase of the last four years
profits which were:-1998-Rs.2,27,000;, 1999Rs.2,10,000;, 2000-
Rs.2,80,000;, 2001-Rs.2,60,000.
2 (ii) Machinery be valued at Rs.2,90,000, Patents be valued at
Rs.4,97,500, Building be valued at Rs.4,37,500.
15
(iii) For the purpose of calculating Rs share in the profits of 2002 should
be taken to have accrued on the same scale as in 2001.
Calculate the amount payable to the executors of the deceased

partner by preparing Rs Capitals A/c and Rs executors A/c.
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Dissolution of Partnership firm:
Q.1. What is the Accounting treatment of Partners loan?

Q.2. How will you treat accumulated profits / losses at the time of dissolution?
Q.3. Explain the meaning of Realisation A/c.

Q.4. What are the two modes of dissolution?
Q.5. Explain the provisions of sec 48 of the Indian Partnership Act 1932 dealing
with the settlement of accounts and at the time of dissolution of firm.
Q.6. Following is the balance sheet of A & B
as on 31st Dec, 2006. Balance Sheet
Creditors As Loan 20,000 Goodwill Machinery Stock 21,600
As Wife loan 12,000 Debtors Cash in hand Cash 72,000
Capital A/c s. A B 40,000 at Bank 54,000
1,08,000 20,000
8,800
3,600
36,000
72,000 1,80,000 1,80,000
On the above date Partner decided to dissolve the firm. Rs. 1,800 were
considered as bad debts. Stock was sold at 10% less than its book value
and Machinery realised Rs. 1,08,000. Creditors were paid off at discount of
Rs. 720. Expenses on Relisation were of Rs. 1,800. You are required to pass
necessary journal entries & cash A/c to close the books of the firm.
Q.7. X, Y and Z carrying on business as a partnership firm, decided to dissolve
the firm on 31.03.2001, when their Balance Sheet was as follows:
Balance Sheet as on 31. 03. 2001
Creditors 34,000 Cash 25,000
Capital Debtors 62,000
X 1,20,000 Stock 37,000

Y 90,000 Tools 8,000
Z 60,000 2,70,000 Car 12,000
Machinery 60,000
Buildings 1,00,000
3,04,000 3,04,000
The partnership deed provided that profits will be divided in the ratio of
3:2:1 respectively among X, Y and Z; assets realized as under:
Stock Rs. 40,000; Tools Rs. 5,000; Machinery Rs. 78,000, Building Rs.
84,000; Car Rs. 25,000; Goodwill Rs. 60,000; Debtors realised Rs. 59,000.
Creditors were settled at a discount of Rs. 720. There was an unrecorded
assets valued at Rs. 3,000, which was handed over to X for Rs. 2,000.
Prepare Realisation A/c, Partners Capital A/c and Cash A/c.
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==== Accounting for share capital:
Q.1. Define share.

Q.2. What is meant by Called up Capital?
Q.3. What is Reserve Capital?
Q.4. What do you mean by Authorised Capital?
Q.5. Define calls in arrears.
Q.6. Vikas limited purchased the Sundry Assets of M/s Rohit Industries for
Rs.17,60,000 Payable in Fully paid shares of Rs.100 each .What entries will
be made in the books of vikas Limited if such issue is (i)At Par (ii)At
Premium of 10%
Q.7. XYZ Ltd. Issued 20,000 shares of Rs.100each at a premium of Rs.10 per
share payable as follows. Rs.40 on Application Rs.50 on Allotment
(Including Premium) Rs.10 on First Call Rs.10 on Second and Final Call
Applications were received for 25,000 shares. 3,000 shares were rejected
and pro-rata allotment was made to remaining applicants. All money was
duly received except 1,500 shares on which first and final call money was
not received Journalise.
Q.8. Honey Ltd. Forfeited 2,000 shares of Rs.10 each held by Sunita who had
applied for 2500 shares, for non payment of first call money of Rs.2 and
final call of Rs.3 per share. Sunita had paid Rs.3 on application and
Rs.3(including Re 1 as premium) on allotment. Of these forfeited shares.
The company subsequently re-issued 1,500 shares to Ram crediting Rs.8
per share paid, for a payment of Rs.6 per share. Give the journal entries
for forfeiture and re-issue.
Q.9. Rahim Ltd forfeited 200 shares of Rs.25 each (Rs.20 Called up) held by
Karim, for non-payment of allotment money of Rs.10 per share(including
Rs.5 per share as premium) and the first call of Rs.6 per share. Out of
these 120 shares were re-issued to Ram as Rs.20 Called for Rs.16 per
share. Give journal entries for forfeiture and reissue.
Q.10. ABC Ltd issued, 1,00,000 shares of Rs. 10 each Payable as follows : Rs. 2
on application payable on 1st March 06; Rs. 3 on allotment payable on 1st
May 2006; Rs. 2 on first calls payable on 1 st Aug, 2006, and Rs. 3 on
second and final call payable on 1st Dec 2006. All these shares were
subscribed for and amounts received. Akash, who had 500 shares, paid
the amount of two calls along with allotment. Karishma, who had 4,000
shares, paid the amount of first call with the second and final call.
Calculate the amount of interest on calls in advance and calls in arrears
and show the necessary journal entry.
Q.11. Holi Ltd, issued 5,00,000 equity shares of Rs. 10 each at premium of Rs.
5. Net amount is payable as under:
On application Rs. 3 On allotment Rs. 3 On call Rs. 3.50 Application were
received for 8,00,000 shares. Application for 1,00,000 shares were
rejected and the remaining were allotted pro-rata. All the amounts were
duly received but Rajesh could not pay the call money on his 2,000 shares.
These Make entries in the Cash Book and Journal of the company.
Q.12. Arushi Computers Ltd. issued 10,000 equity shares of Rs. 100 each at
premium of Rs. 20. The net amount payable as follows :
On application Rs. 20On allotment Rs. 30On first call Rs. 30
DELHI PUBLIC SCHOOL Indirapuram, Assignment Booklet
Ghaziabad ACCOUNTS) (Class -XII :
On final call Rs. 10
A shareholder holding 200 shares did not pay final call. His shareswere forfeited. Out of
these 150 shares were reissued to Ms. Sonia atRs. 75 per share.Give journal entries in
the books of the company.
Q.13. Vishwas Limited invited applications for Rs.1,25,000 shares at Rs.10 per share.
The amount was payable as follows.
On Application -Rs.3 per share On Allotment -Rs.4 per share On First and Final Call
-Rs.3 per share
Applications were received for 1,87,500 shares and prorata allotment was made as
follows:
CATEGORY I: Applications for 1,00,000 shares were allotted

75,000 shares on prorata basis CATEGORY II:
Applications for 87,500 shares were allotted
50,000 shares on prorata basis
Sneha, to whom 3,000 shares were allotted under Category 1, failed to pay the
allotment money. Her shares were forfeited immediately after allotment. Honey, who
had applied for 1,750 shares under Category II, failed to pay the first and final call
money. His shares were also forfeited. Out of these shares, 2,500 shares were re-
issued @ 8 per share fully paid-up (2,000 Snehas share being included.) Pass the
necessary Journal Entries.
Q.14. Raj Limited invited applications for 50,000 shares of Rs.10 each at a premium of
Rs.20% payable as follows: On Application -Rs.3 per share On Allotment -Rs.5
per share(including premium) On First Call -Rs.1 per share On Second and Final
Call -Rs.3 per share Applications were received for 75,000 shares and pro-rata
allotment was made on 60,000 shares. The remaining applications being
refused. Ram, to whom 2,000 shares were allotted, failed to pay the allotment
money and on his failure to pay first call. His shares were forfeited. Shyam, to
whom 2,500 Shares were allotted, failed to pay the two calls. Of the forfeited
shares, 4000 shares were re-issued to Gita credited as fully paid up for Rs.15 per
share (Whole of Rams Shares being included). Give Journal entries.
============================================
= Accounting for Debentures:
Q.1. Why do Companies issue debentures?

Q.2. State any one point of difference between debenture and bond.
Q.3. Define Debenture.
Q.4. What do you mean by issue of debentures for consideration other
than cash?
Q.5. What is meant by premium on redemption of debentures?

Q.6. XYZ Ltd. Purchased land of book value of Rs. 1,98, 000 from another firm.
It was agreed that purchase consideration be paid by issuing 12%
Debentures of Rs.100 each. Show the necessary journal entries in the
books of XYZ if debentures are issued
(i) At par (ii) At premium of 10%
Q.7. Sagar Ltd. Purchased Assets of Rs.5,20,000 and took over Liabilities of
Rs.50,000 at an agreed value of Rs.4,50,000 from Rahul Ltd., Sagar Ltd.
Issued 12% Debentures at 10% Premium in full satisfaction of the
purchase price. Draft journal entries in the books of Sagar Ltd.
Q.8. S Ltd secured a loan of Rs.1,40,000 from the Raja National Bank by issuing
150, 5% debentures of Rs.1,000 each as collateral security. Prepare
Balance sheet of the Company.
Q.9. Show by the means of journal entries the following cases:

1 (i) X Ltd. Issued 25,000, 12% Debentures of Rs.100 each redeemable at
par.
2 (ii) Y Ltd. Issued 50,000, 12% Debentures of Rs.100 each redeemable at
premium of 5%
(iii) Z Ltd. Issued 20,000, 12% Debentures of Rs.100 each at premium of

3% redeemable at par.
(iv) M Ltd. Issued 10,000, 12% Debentures of Rs.100 each at a premium
of 10% redeemable premium of 5%.
Q.10. Case India Ltd has outstanding 1,00,000, 10% Debentures of Rs. 200 each
on April 01, 2009. The Board of Directors have decided to purchase 20%
own debentures fo cancellation at Rs. 190 each. Assuming there is
sufficient balance in Debenture Redemption Reserve. Record necessary for
the same.
Q.11. Laxmi Ltd issued 2,00,000 8% Debentures of Rs.100 each at a premium of
10% on June 30, 2004. The debentures were fully subscribed. The required
amount to Debenture Redemption Reserve is transferred on 31 st March 04
and debentures were redeemed on due date. Pass necessary journal
entries for the issue and redemption of debentures.
Q.12. AFCONs India Ltd. (an infostructure company) issued 80,000 12% of Rs.
100 each on Jan 1, 2001 redeemable on April 1, 2007. Pass necessary
journal entries for issue and redemption of debentures.
Q.13. On 1st January 2002, A Company issued Rs.2,25,000, 10% debentures of
Rs. 100 each at par. Pass necessary journal entries at the time of
redemption if company is having Rs. 75,000 in debentures redemption
reserve A/c and redemption will be done out of profits and debentures will
be redeemed at the end of 5th year.
=========================================
==== PART B
Analysis of financial statement
Financial statement of a company:
Q.1. What do you understand by financial statements?

Q.2. Which two statements are included in financial statements?
Q.3. What do you mean by contingent Liabilities?
Q.4. Define Income Statement.
Q.5. Give two examples of contingent Liabilities.
Q.6. State the items shown under the head non current liabilities of Liabilities
Side of Companys Balance Sheet.
Q.7. Where will you show Calls in Arrears in Companys Balance sheet?
Q.8. The Following balances have been extracted from the books of Mittal Ltd.
On 31.03.1996 Share Capital Rs.5,00,000 Reserve fund Rs.1,00,000, 15%
Debentures Rs.3,00,000 Creditors, Rs.1,00,000 outstanding Salary
Rs.10,000, Profit & Loss A/c (Dr.) Rs. 10,000 Plant & Machinery
Rs.6,00,000, I.F.C.I Bonds Rs.2,00,000 Raw Materials Rs.1,75,000 and
Discount on Issue of 15% Debentures Rs.25,000 Prepare the Balance
Sheet of the Company as per Revised Schedule VI, Part-I of the companies
Act 1956
Q.9. X Ltd has an authorised Capital of Rs.10, 00,000 Divided into equity shares
of Rs.10 each. The Company invited applications for 50,000 shares.
Applications for 45,000 shares were received. All calls were made and
were duly received except the final call of Rs. 2 per share on 1,000 shares
500 of the shares on Which the final call was not received were forfeited.
Show how share capital will appear in the Balance Sheet of the Company
as per Revised Schedule VI Part-I of the Companies Act 1956.
=============================================
Financial Statement Analysis:

Q.1. What do you mean by analysis of financial Statements?
Q.2. What is the difference between analysis and interpretation of financial
statements?
Q.3. State any two objectives of analysis of financial statement.
Q.4 What do you understand by window dressing in financial statements. ?
Q.5. What is the significance of analysis of financial statement to the trade
creditors.?
Q.6. Discuss the purpose of financial analysis.
Q.7. Briefly explain the interest of share holders in the analysis of financial
statements.
Q.8. Explain Briefly the interest of lenders in the analysis of financial
statements.
Q.9. Explain briefly any three limitations of analysis of financial statement.
Q.10. Explain briefly the advantages of analysis of financial statement.
=========================================
==== Tools for financial statement analysis:
Q.1. What do you understand by comparative statement?
Q.2. What do you understand by comparative income statement / Profit and
loss account?
Q.3. Name any two tools of financial statement analysis.

Q.4. Which item is assumed to be 100 in case of common size income
statement ?
Q.5. Which item is assumed to be 100 in case of common size balance sheet ?
Q.6. What do you mean by inter firm comparison?

Q.7. What do you understand by intra firm comparison?
Q.8. Clarify whether comparative statement is a form of vertical analysis or
horizontal analysis.
Q.9. If Selling and distribution expenses have increased from Rs.50,000 to
Rs.1,00,000 then how much it will increase or decrease in percentage
form.
Q.10. Clarify whether common size statement is a form of vertical analysis or
horizontal analysis.
Q.11. From the given Balance Sheets of XYZ Co. on 31st Dec.2000 and 2001,
prepare a Comparative Balance Sheet.
Balance Sheetas at 31st Dec, 2000 and 2001

Note 2000 Rs. 2001 Rs.
Particulars No.
I. EQUITY & LIABILITIES 1.
Shareholders Fund (a)
Share Capital Reserves &
Surplus 2. Non Current
Liabilities Long term 4,00,000 7,00,000
borrowings 3. Current 6,00,000 5,00,000
Liabilities 10,00,000 13,00,000
1. 4,00,000 6,00,000
Total 24,00,000 31,00,000
II. ASSETS 1. Non Current
Assets
Fixed Assets 2. Current 2. 12,00,000 12,00,000

Assets 12,00,000 19,00,000
Total 24,00,000 31,00,000
Notes to Balance Sheet
1. Long term borrowings

12% Loan 10,00,000 13,00,000
2. Fixed assets Less: 20,00,000 18,00,000

Depreciation 8,00,000 6,00,000
12,00,000 12,00,000
Q.12 From the following data, prepare a Comparative Income Statement Particulars.
Particulars 2000 (Rs.) 2001 (Rs.)

Sales Cost of Material Consumed 15,00,000 19,00,000
Office & Administrative 5,00,000 4,00,000
Expenses Income Tax Ratio 2,50,000 2,54,000
50% 50%
Q.13. Prepare a Common size Balance Sheet from the following: Balance Sheet as at
31st March 2011 and 2012
Particulars Note 31.3.2011 31.3.2012
No.
I. EQUITY & LIABILITIES
1. Shareholders Fund
(a) Share Capital Reserves
& Surplus 2. Non Current
6,00,000 6,00,000
Liabilities Long term
6,80,000 10,00,000
borrowings 3. Current
3,00,000 3,00,000
Liabilities
1. 2. 4,20,000 6,00,000
Total 20,00,000 25,00,000
II. ASSETS 1. Non Current
Assets Fixed Assets 2.
Current Assets Inventories
Trade receivables Cash & 12,00,000 13,56,250
cash equivalents 4,50,000 6,25,000
2,55,000 4,10,000
95,000 1,08,750
Total 20,00,000 25,00,000
Notes to Balance Sheet
1. Reserves & Surplus

General Reserve 7,00,000 10,10,000
Preliminary Exp. (20,000) (10,000)
6,80,000 10,00,000
2. Long term borrowings
10% Debentures 3,00,000 3,00,000
Q.14.Prepare a common size income statement of X Ltd. from the following

information:
Particulars 31.3.201 31.3.201
1 2
Sales Cost of goods sold 15,00,000 18,00,000
Operating expenses 9,24,000 10,86,300
Non operating Income 2,50,650 2,75,760
Non operating expenses 6,000 6,000
30,000 48,000
=============================================
Accounting Ratios:
Q.1. What do you understand by accounting ratio?
Q.2. Give the main advantage of ratio analysis.
Q.3. Give the functional Classification of accounting ratios.
Q.4. What is the purpose of liquidity ratios?Q,5. State the various ways by which a
ratio can be expressed.
Q.6. What do you understand by working capital? How it is calculated?
Q.7. What is the standard which is considered ideal for Current ratio?
Q.8. What is the standard which is considered ideal for quick ratio?
Q.9. Why stock and prepaid expenses are not included in liquid assets?
Q.10. What do you mean by solvency ratios.
Q.11. Which ratio i.e. high or low debt equity ratio is considered better inbusiness ?
Q.12. If debt equity ratio is low what does it indicate?
Q.13. What do you mean by earning per share ?
Q.14. What is the significance of gross profit ratio ?
Q.15. How can the cost of Goods sold be calculated?
Q.16. What do you understand by operating Expenses. ?

Q.17. What is the objective of turnover Ratios?
Q.18. If there is high debtors turnover ratio then What does it indicate?
Q.19. What does working capital turnover ratio indicate?
Q.20.Total Assets Rs.2,20,000 Fixed Assets Rs.1,00,000 Capital Employed
Rs.2,00,000 Calculate Current Ratio.
Q.21. A Firm had Current Assets of Rs.4,10,000 it then paid Creditor of
Rs.50,000 out of Current Assets making the Current Ratio 2.4:1 Ascertain
the amount of current liabilities and Working Capital after Payment.
Q.22 Current Ratio= 1.7:1 Current Assets = Rs. 51,000 Current Liabilities = Rs.
30,000 The accountant is interested in maintaining the current ratio of 2:1
by paying a part of current liability. Calculate the amount of current
Liabilities to be paid.
Q.23.Current Ratio 2.5, Working Capital Rs.60,000 Calculate the amount of
Current Assets and Current liabilities.
Q.24 Compute Debt Equity Ratio from the following ; Total Debts Rs.3, 00,000
Total Assets Rs.5, 40,000 Current Liabilities Rs.70, 000
Q.25.Calculate Total Sales, Credit Sales and inventories, from the
following particulars : Gross Profit (20% of Sales) Rs.1, 05,000 Cash sales Rs.87,
500 Inventory Turnover Ratio 8 times to cost of sales
Q.26. Credit salesRs.1, 50,000

Debtors Turnover Ratio 5 Times Closing Debtors are 3 times in
comparison to opening Debtors Calculate opening and Closing Debtors.
Q.27.A company has a loan of Rs. 20,00,000 as part of its capital employed.
The interest payable on loan is 15% and the ROI of the company is 25%.
The ratio of income tax is 40%. What is the gain to the shareholders due
to the loan raised by the company?
Q.28.If operating Ratio is 23.12, what is operating Profit Ratio?
Q.29.Calculate any three of the following ratios with the help of the information
given below:
1 (i) Operating Ratio (iv) Working Capital
2 (ii) Gross Profit Ratio Turnover Ratio
(iii) Quick Ratio (v) Proprietary Ratio Information:

Equity Share Capital Rs. 1,00,000; 8% Preference share capital Rs. 80,000;
9% Debentures Rs. 60,000; General Reserve Rs. 10,000; Sales Rs.
2,00,000; Opening Stock Rs. 12,000; Purchases Rs. 1,20,000; Wages Rs.
8,000; Closing Stock Rs. 18,000; Selling and Distribution Expenses Rs.
2,000; other current Assets Rs. 50,000; Fixed Assets Rs. 2,12,000 and
Current Liabilities Rs.30,000.
=========================================
==== Cash Flow Statement :
Q.1. What do you mean by cash flow statement?
Q.2. What are the various activities classified as per AS -3 (revised) related to
cash flow Statement?
Q.3 State any one objective of cash flow statement.
Q.4 What do you understand by cash equivalent?
Q.5. what do you mean by cash-flow?
Q.6. What do you mean by cash flow from operating activities?
Q.7. Give two examples of cash flow from operating activities?
Q.8. What do you mean by cash flow from investing activities?
Q.9. Give two examples of cash out flow from investing activities?
Q.10. Give any two examples of cash out flow from financing activities.
Q.11. State the operating activities of a financial enterprise.
Q.12. Name the type of organisation to whom rent received is an operating
activity and also name the type of organisation to whom rent received is
an investing activity.
Q.13. From the following activities, calculate cash flows from financing
activities:
Additional Information:
1 (i) Equity Shares were issued at a premium of 15%.
2 (ii) 12% Preference Shares were redeemed at a Premium of 5%.
(iii) 14% debentures were issued at a discount of 1%.

1 (iv) Interim dividend paid on Equity shares Rs. 90,000.
2 (v) Dividend paid on old preference shares Rs. 24,000.
3 (vi) Interest paid on debentures Rs. 14,000.
(vii) Underwriting commission of Equity shares Rs. 10,000

Q.14. The statement of Profit and Loss of an enterprise for the year ended 31 st
March, 2012 stood as follows:
Particulars Amount
Revenue form operations Add: other 30,000 13,80,000
Income: Dividend Received 10,000 1,60,000
Commission Accrued Profit on sale of 1,20,000 15,40,000
Building Book Value 5,00,000 Sold for 9,30,000 14,52,000
6,20,000 Less: Purchases Changes in (30,000)
inventories (OpeningClosing) 2,50,000
(1,00,000 1,30,000) Manufacturing 1,15,000
wages paid 2,00,000 Add: Outstanding 60,000
50,000 Salaries paid 80,000 Add: 40,000
Outstanding 40,000 1,20,000 Less: 55,000
Prepaid 5,000 Office Expenses Selling 12,000
& Distribution Expenses Depreciation 20,000
Premilinary Expenses
28
Calculate the amount of cash generated from operating activities.

Q.15. From the following particulars, calculate cash flows from investing
activities:
Balance Sheet
Purchased Sold
Plant 6,20,000 2,00,000
Investment 2,40,000 80,000
Goodwill 1,00,000
Patents 1,50,000
Interest received on debentures held as investment Rs. 8,000.Interest paid
on debentures issued Rs. 15,000. Dividend received on shares held as
investment Rs. 20,000. Dividend paid on equity sharecapital Rs. 25,000.A
plot of land was purchased out of the surplus funds for
investmentpurposes and was let out for commercial use and rent received
Rs.30,000.
Q.16. From the following balance sheets of ABC Ltd. Prepare cash flow
statement:
Particulars Note 31.3.201 31.3.201
No. 1 2
I. EQUIRY & LIABILITIES 2.
Shareholders Fund (a)
Share Capital (b) Reserves
& Surplus 3. Non Current
Liabilities Long term 1. 2.
borrowings 4. Current 30,000 35,000
Liabilities Trade Payables 3,500 22,000
21,000 25,000
8,500 12,500
Total 63,000 94,500
II. ASSETS Non Current
Assets Machinery Goodwill
Non current Investments
Current Assets Inventories
3. 32,000 41,000
Cash & cash equivalents
10,000 8,000
3,000 8,000
6,000 24,500
12,000 13,000
Total 63,000 94,500
29

ACCOUNTS)
Notes to Accounts
31.3.201 31.3.201
1 2
1. Reserves & Surplus General
Reserve Statement of Profit & 10,000 15,000
Loss Discount on Debentures (6,000) 7,000
(500)
3,500 22,000
2. Long term borrowings 10% 21,000 25,000
Debentures
3. Non current investments 3,000 8,000
10% Investment
Debentures were issued on 31.3.2012Investment were made on 31.3.2012
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
============================================
30
Value based Questions

Accounting for Partnership firms-fundamentals
Q1. (Distribution of profits) After completing their graduation, Ram
and Rahim decided to sell ISI marked electronic goods to
economically weaker sections of the society at low rates. For this,
they decided to form a partnership business as per the provisions
of the Partnership Act, 1932. They further decided to include Julie
who has completed her graduation five years ago but still
unemployed as a third partner without contributing any capital.
On 1.4.2011 all of them formed a partnership on the following
terms:
1 (i) Ram will contribute Rs. 2,00,000 and Rahim Rs. 1,00,000.
2 (ii) They will share the profits in the ration of 1:1:1.
(iii)
Interest on capitals will be allowed @ 6% p.a. The profit of the firm
for the year ended 31st March 2012 was Rs. 3,18,000.
1 (a) Identify four values which according to you motivated them to form a
partnership firm.
2 (b) Prepare Profit and Loss Appropriation Account of the firm for the year
ending 31st March 2012.
Sol1. Values
1 (i) Secularism: By forming partnership of persons from different religion
they proved that they are secular.
2 (ii) Responsibility: By providing ISI marked electronic goods to the
society they proved that they are responsible citizens.
(iii) Empathy: By providing electronic goods at low rates to the weaker

section of the society they showed their empathy towards weaker
section of the society.
(iv) Empowering women entrepreneurship: With the inclusion of Ms. Julie,
who was unemployed, as a third partner showed that they are ready
for empowering women entrepreneurship.
Profit & Loss Appropriation A/c for
the year ended 31st March 2012 Dr.
Cr.
Particulars Rs. Particulars Rs.
To Rams Capital (Interest on 12,000 By Profit & Loss 3,18,000
capital) To Rahims Capital A/c 6,000 A/c
(Interest on Capital)
31
To Profit to transferred to Capital

Accounts: 3,00,000
Ram 1,00,000
Rahim 1,00,000
Julie 1,00,000
Q2.(Distribution of Profit) Salman Khan from West Bengal, Honey

Singh from Punjab, Rajnikant form Chennai and Merry from Goa
formed a partnership without any partnership deed. They
contributed Rs. 5,00,000, Rs. 6,00,000, Rs. 7,00,000 and Rs.
8,00,000 as therir respective capitals. During the year, 2011-12
Honey Singh had used his personal car for marketing purposed for
which he has not charged anything. The profits for the year
ending 31st March 2012 were Rs. 25,00,000. In the absence of
partnership deed they were not in position to distribute the
profits. Salman Khan and Rajnikant proposed the following, to
which they all agree:
1 (i) Honey Singh shall be given commission @ 10% on profit before
charging his commission.
1 (ii)Profits shall be distributed equally.
2 (a) Identify two values which according to you motivated them to from a
partnership firm.
3 (b) Prepare Profit and Loss Appropriation Account of the firm for the year
ending 31st March 2012.
Solution2.
1. (i) Values (any two)
2. (a) Acceptance/tolerance among the partners: By not creating dispute
among themselves.
3. (b) Secularism: By forming a partnership constituting people from
different religion.
4. (c) Respect for law and order: By abiding the provision of the Partnership
Act, 1932 in the absence of partnership deed.
2 (ii) Profit & Loss Appropriation Accountfor the year ended 31 st March
2012
Dr. Cr.
T Honey Singhs Capital A/c 2,50,000 By Net 25,00,00
o 0
(Commission) Profits
T t
Profits transferred capital
o o
Accounts:
Salman Khan
32
5,62,500 Honey Singh 5,62,500 22,50,000

Rajnikant 5,62,500 Merry 5,62,500
25,00,000 25,00,000
Accounting for Partnership-Reconstitution and Dissolution

Q1.(Admission of partner) Aamir and Anuj, belonging to two different
religions and States of the country were close friends; formed
partnership in the year 2007. Their Balance Sheet as at 31 st
March, 2012 was under:
33
Balance Sheet(as on 31st March 2011)

Sundry Creditors 25,000 Cash in hand 15,000
Employees Provident 15,000 Sundry Debtors 10,000
Fund Reserve Fund 20,000 Patents Plant and 75,000
Capital Accounts: Aamir 1,60,00 Machinery 1,20,00
85,000 Anuj 75,000 0 0
2,20,00 2,20,00
0 0
They were sharing profits in the ratio of 3:1 but were continuously
facing problems in administration of the firm so were in need of a
person who could monitor the business by sitting and observing the
CCTVs in the firm. Anuj requested Aamir to admit his friend Zeenat a
differently abled girl as a third partner on the following terms:
1 (i) Zeenat will introduce Rs. 80,000 as her capital and takes 1/3 share in
profits.
2 (ii) Goodwill of the firm is valued at Rs. 24,000, however, and Zeenat
could bring only 50% of her requisite share of goodwill in cash.
(iii)Patents should be written off.

(iv) Plant and Machinery written up by Rs. 1,00,000. Aamir accepted the
proposal. Keeping in view of the accidents which took place in their
factory in the recent past years, they decided to create Workmen
Compensation Reserve to the tune of Rs. 5,000/.
1 (a) Identify four values which according to you motivated them to form a
partnership firm.
2 (b) Prepare Revaluation Account, Partners Capital Accounts and the
Balance sheet of the new firm.
Solution:
(i) Values
1 (a) Secularism: By forming partnership of people from different religions.
2 (b) Entrepreneurial opportunities: By providing entrepreneurial
opportunities to the people from different area of the country.
3 (c) Empathy: By allowing Zeenat a differently abled girl as a third
partner, they showed empathy towards differently able persons.
34
(d) Responsibility: By setting aside a part of their profits for the

creation of Workmens Reserve for the benefits of workers.
(ii) Books of Aamir, Anuj and Zeenat Dr. Revaluation A/c Cr.
To Patents A/c To Profits 75,000 By Plant & Machinery 1,00,000
transferred to: Aamirs 25,000 A/c
Capital A/c 15,000 Anujs
Capital A/c 10,000
1,00,000 1,00,000
Partners Capital Accounts

Particulars Aamir Anuj Zeen Particulars Aamir Anuj Zeen
(Rs.) (Rs.) at (Rs.) (Rs.) a t
(Rs.) (Rs.)
To Aamirs 2,400 By Balance b/d 85,000 75,00 -80,0
Capital To 1,600 By Cash A/c By -2,400 0 00
Anujs 76,00 Zeenats Capital 2,400 -1,60 ----
Capital To 0 A/c By Premium 15,000 0
Balance c/d A/c By 12,000 1,600
Revaluation A/c 10,00
1,16,80
96,200 (Profit) By 0
0
Reserve Fund 8,00
A/c 0
1,16,80 96,200 80,0 1,16,80 96,20 80,0

0 00 0 0 00
By Balance b/d 1,16,80 96,20 80,0
0 0 00
Balance sheet as at 31.3.2012

Sundry Creditors 25,000 Cash in hand 99,000
Employees Provident 15,000 Sundry Debtors 10,000
2,20,00
fund Plant &
0
Capitals A/c s Machinery
Aamir 1,16,800
Anuj 2,89,000
96,200
Zeenat 76,000
35
Q2. (Preparation of Balance Sheet of Reconstituted Firm)

A,B and C were partners sharing profit and losses in the
ratio of 2:2:1 respectively. Below is given their Balance
Sheet as at 31.03.2012: Balance Sheet as at 31.3.2012
Capitals A Machinery 3,75,00
1,70,000 B Typewrite 0
1,30,000 C r Stock 15,000
1,50,000 Bills 4,50,00 Debtors 65,000
Payable Bank Loan 0 Cs Loan 60,000
Profit and Loss A/c 20,000 Cash 5,000
60,000 Goodwill 20,000
30,000 20,000
5,60,00 5,60,00
0 0
On 1-4-2012 C died. A proposes the following clauses to which B

agrees:
1 (i) That C has given a loan of Rs. 1,00,000 to the firm on 1-10-2011 but
the same was not recorded in the books and this fact was also not known
to the executors of C. A and B agree to repay the loan to Cs Executors.
2 (ii) The entire loan taken by C be taken over by A and B in equal ratio.
(iii)
For calculating Cs share in accumulated profits, A proposes that his
share shall be taken as and the remaining profits shall be
distributed between A and B equally.
1 (iv) That the stock to be decreased by 5%.
2 (v) That a Provision for Doubtful Debts to be maintained @ 5% on
debtors.
3 (vi) That the machinery be appreciated by 20%
(vii) That a Provision of Rs. 7,500 be made in outstanding legal charges.

(viii) That the goodwill of the firm is valued at Rs. 16,200.
(ix) That future profits of the firm shall be distributed in equal proportion.
1. (a) Identify values which according to you motivated the remaining
partners in:
2. I. Waiving off Cs Loan
3. II. Repayment of Cs Loan
4. III. Allowing share in accumulated profits.
2 (b) Prepare Revaluation Account, Partners Capital Accounts and revised
Balance Sheet after Cs retirement.
36
Solution: (i)
1 (a) Empathy: By waiving off loan taken by C.
2 (b) Honesty: By paying back loan of Rs. 1,00,000 to the executors of C.
3 (c) Acceptance of others: By agreeing to the proposal of A.
(ii) Revaluation Account

Dr. Cr.
To Stock A/c To Provision for Doubtful Debts A/c To 3,250 By Machinery A/c 75,000
Provision for Outstanding Legal Charges A/c To 3,000
Profit transferred to: As Capital A/c 24,500 Bs 7,500
Capital A/c 24,500 Cs Capital A/c 12,250 61,250
75,000 75,000
Partners Capital Accounts

Particulars A (Rs.) B(Rs.) C(Rs.) Particulars A(Rs.) B(Rs.) C(Rs.)
To Goodwill A/c To 8,000 8,000 4,000 By balance b/d By 1,70,00 1,30,00 1,50,00
Cs Capital A/c To 1,620 1,620 -1,76,4 Profit & Loss A/c 0 7,500 0 7,500 0
Cs Executors A/c -2,500 -2,500 9 0 -- By Revaluation A/c 24,500 24,500 15,000
To Cs Loan A/c To 1,89,88 1,49,88 (Profit) By As -- -- 12,250
Balance c/d 0 0 Capital A/c By Bs 1,620
Capital a/c 1,620
1,89,88 1,62,00 1,80,49 1,89,88 1,62,00 1,80,49

0 0 0 0 0 0
Balance Sheet as at 31st March 2012

Bills Payable Bank Loan Capitals: A 20,000 Machinery Typewriter Stock 4,50,000
1,89,880 B 1,49,880 Provision for 60,000 Debtors 60,000 Less: 15,000
Outstanding Legal Charges Cs 3,39,760 Provision 3,000 Cash 61,750
Executors A/c 7,500 57,000
1,76,490 20,000
6,03,750 6,03,750
Working Notes:
1 (i) Calculation of Gaining Ratio:Gaining Ratio = New Ratio Old RatioAs
Gain = 1/2 2/5 = 1/10Bs Gain = 1/2 2/5 = 1/10So, Gaining Ratio is
1:1
2 (ii) Cs share of Goodwill = 16,200 1/5 = 3,240
37

ACCOUNTS)
Treatment of Goodwill
Dat Particulars L.F. Debit Credit

e (Rs.) (Rs.)
As Capital A/c Dr. Bs Capital A/c Dr. To 1,620
Cs Capital A/c (Being Cs share goodwill 1,620
adjusted among A and B in their gaining 3,240
ratio)
As Capital A/c Dr. Bs Capital A/c Dr. To 2,500

Cs Loan A/c (Being cs Loan to be paid by 2,500
A and B) 5,000
Q3.(Death of a partner) A, B and C were partners in a firm sharing

profits equally. On 1.4.2012 B died. On that date goodwill of the
firm was valued at Rs. 90,000. There was a balance of Rs.
2,70,000 in General Reserve. As executors of B were not
financially stron enough so A proposes that the executors of B
shall be given share of General Reserve and remaining portion
shall be distributed between A and C in new ratio which is equal.
C accepted to it.
(i) Identify two values which according to you motivated them to
introduce such special clauses in the partnership deed.
(ii) Pass necessary journal entries on Bs death.
Solution:(i)
1 (a) Empathy: By giving of the General Reserve to the executors of the
deceased partner.
2 (b) Acceptance from other: By agreeing to the proposal of A.
(i) Journal
Date Particulars L.F. Debit Credit
(Rs.) (Rs.)
1.4.201 General Reserve A/c Dr. To As 2,70,000
2 Capital A/c To Bs Capital A/c To 15,000 1,35,000
Cs Capital A/c (Being general 15,000 67,500
reserve distributed) 67,500
30,000
As
Capital
A/c Dr.
Cs
Capital
A/c Dr.
To Bs
Capital
A/c
(Being
goodwi
ll
adjuste
d)
Q4.(Dissolution)
(i) What journal entries would you pass for the following transactions on
the dissolution of a firm of partners A & B:
38
1 (a) One worker met with an accident and the firm had paid Rs. 5,400 to
the workers as compensation.
2 (b) Rs. 10,000 written off as bad debts in the previous year had paid full
amount.
(ii) Identify the value(s) which according to you motivated the firm to
pay compensation to the injured worker.
(iii) Identify the value(s) which according to you motivated the debtors
previously written off to pay full amount.
Solution:
1 (i) JOURNAL
2 (ii) Responsibility: By paying compensation to the injured worker.
Dat Particulars L.F. Debit Credit

e (Rs.) (Rs.)
Case(i) Realisation A/c Dr. To cash 5,400
A/c (Being compensation paid to the 10,000
injured worker) 5,400
10,000
Case(ii
) Cash
A/c Dr.
To
Realis
ation
A/c
(Being
bad
debts
recove
red
transf
erred
to
realiza
tion
accoun
t)
(iii) Honesty: By repaying the debts which the firm has written off bad in the
previous.
Q5. (Preparation of ledger accounts) A and B
shared profits in the ratio 3:2. Their
Balance Sheet as at 31st March 2011
was as follows: Balance Sheet as at
31.3.2011
Creditors As Loan 70,000 Cash Debtors 80,000 46,000
Profit and Loss 32,000 Less: Prov for D/D 3,600 76,400
A/c Capitals A 50,000 Inventory Bills 1,09,60
2,40,000 B 4,00,00 Receivables Building 0
1,60,000 0 40,000
2,80,00
0
5,52,00 5,52,00
0 0
The firm was dissolved on the above date and the followingtransactions took
place:Assets (except Bills Receivable realized Rs. 4,84,000.Bills receivable
were taken by A at Rs. 35,000.
39
Creditors agreed to take Rs. 65,000. Cost of Realisation was Rs. 2,400.
A Motor Bike (which was bought out of the firms money) was not
shown in the books of the firm. It is now sold for Rs. 10,000. During
the course of dissolution it was noticed by the partners that the firm
had taken goods worth Rs. 5,000 on credit from Mr. Mohit in the year
2007 but both the parties (i.e, the firm and Mr. Mohit) have forgotten
to record the same in their respective books. Instead of charging
interest on the amount due from the firm, Mr. Mohit himself agreed to
accept Rs. 3,500 in full settlement of the claim.
1 (i) Identify the value(s) which according to you motivated the firm to
settle the liabilities.
2 (ii) Identify the values(s) which according to you motivated Mr. Mohit to
accept Rs. 3,500 instead of Rs. 5,000.
(iii)Prepare Realisation Account, Partners Capital Accounts, As Loan Account

and Cash Account.
Solution:
(i) Honesty: By repaying the liability which the creditors did not
have the knowledge.
(ii) Sharing/Compassion: By accepting less which is due.
(iii) Books of A and B
Realisation Account
Dr
. Cr.
To Debtors A/c To Inventory A/c 80,000 By Provision for D/debts 3,600
To B/R A/c To Building A/c To 1,09,600 A/c By Creditors A/c By 70,000
Cash A/c (creditors) To Cash 40,000 Cash a/c (Assets realized) 4,84,000
A/c (Expenses) To Cash A/c To 2,80,000 By As Capital A/c (Bills 35,000
profit transferred to capital 65,000 Receivable) By Cash a/c 10,000
Accounts of: A 13,260 B 8,840 2,400 (Sale of Motorbike)
3,500
22,100
6,02,600 6,02,600
Dr. Cr.
Particulars A (Rs.) B (Rs.) Particulars A (Rs.) B (Rs.)
To Realisation 35,000 By Balance b/d 2,40,000 1,60,00
A/c (B/R) To 2,48,260 1,88,840 By Profit & loss 30,000 0
Cash a/c A/c By 13,260 20,000
(Final Realisation 8,840
40
Payment) A/c (Profit)

2,83,260 1,88,840 2,83,260 1,88,840
As Loan Account Dr. Cr.
Cash Account Dr. Cr.
Parti ular Rs. Particulars Rs.

c s
To 32,000
Cash By b/
A/c 32,000 Balance d
32,000 32,000

To Balance b/d To Realisation 46,000 By Realisation A/c 65,000
A/c (Assets Realised) To 4,84,000 (Creditors) By Realisation 2,400
Realisation A/c (Sale of Bike) 10,000 A/c (Expenses) By 3,500
Realisation A/c By As 32,000
Loan A/c By Capital 4,37,100
Accounts: A 2,48,260 B
1,88,840
5,40,000 5,40,000
Accounting for Share Capital

Q1.Parv Ltd. invited applications for issuing 2,00,000 equity shares of
Rs. 10 each. The amount was payable as follows:On Application
Rs. 3 per share; On Allotment Rs. 5 per share, and on First and
Final call Rs. 2 per share. Applications for 3,00,000 shares were
received and prorata allotment was made to all the applicants. Jai
who was allotted 3,000 shares failed to pay the allotment and call
money. His shares were forfeited. Out of the forfeited shares
2,500 shares were reissued as fully paid up @ Rs. 8 per share.
1 (i) Identify the value which according to you motivated Parv Ltd in
making prorate allotment to all the applicants.
2 (i) Value of Equality: By allotting shares proportionately to all the
applicants.
3 (ii) Books of Parv Ltd.
(ii) Pas the journal entries to record the abov

necessary
s e
transactions.
Solutio
n:
41
DELHI PUBLIC SCHOOL Assignment Booklet (Class

Indirapuram, Ghaziabad -XII :
ACCOUNTS)
Journal
Dat Particulars L.F. Debit (Rs.) Credit

e (Rs.)
Bank A/c Dr. To Equity Share Application A/c 9,00,000 9,00,000
(Being application money received on 9,00,000 6,00,000
3,00,000 equity shares @ Rs. 3 per share) 10,00,000 3,00,000
6,89,500 10,00,000
4,00,000 6,89,500
3,94,000 4,00,000
30,000 3,94,000
20,000 13,500
5,000 10,500
6,250 6,000
25,000
Equity
Share
Applicati
on A/c
Dr. To
Equity
Share
Capital
A/c To
Equity
Share
Allotme
nt A/c
(Being
applicati
on
money
adjusted
)
Equity
Share
allotme
nt A/c
Dr. To
Equity
share
Capital
A/c
(Being
allotme
nt
money
due on
2,00,00
0 equity
shares
@ Rs. 5
per
share)
Bank
A/c Dr.
To
Equity
Share
Allotme
nt A/c
(Being
allotme
nt
money
received
except
on
3,000
shares)
Equity
Share
First and
Final
Call A/c
Dr. To
Equity
Share
Capital
A/c
(Being
first call
money
due on
2,00,00
0 shares
@ Rs. 2
per
share)
Bank
A/c Dr.
To
Equity
Share
First &
Final
Call A/c
(Being
first call
money
received
except
on
3,000
shares)
Equity
Share
Capital
A/c Dr.
To Share
Forfeite
d A/c To
Equity
Share
Allotme
nt A/c To
Equity
Share
First Call
A/c
(Being
3,000
shares
forfeited
for non
paymen
t of
allotme
nt and
first call
money
as per
boards
resolutio
n
dated
.
)
Bank
A/c Dr.
Share
forfeited
A/c Dr.
To
Equity
Share
Capital
A/c
(Being
2,500
share
re-
issued
@ Rs. 8
per
share as
fully
paid up)
Share
Forfeite
d A/c
42
Working Notes:
1 (i) Statement showing adjustment of excess money received on
application
2 (ii) Calculation of total amount received or allotment: Total
Amount due on allotment (2,00,0005) = 10,00,000
Applied Allotted Money Money adjusted Money Refund

received adjusted on on allotment(Rs.) (Rs.)
on application Allotment(Rs.)
(Rs.)
3,00,000 2,00,000 9,00,000 6,00,000 3,00,000
Less:Already received =
3,00,000 7,00,000 Less:not
received from Jai 10,500*
6,89,500 *Calculation of
amount not received for Jai
Amount due on Allotment of
Bajaj (3,0005) = 15,000
Less: Already received =
4,500** 10,500 **Calculation
of amount already received
from Jai Shares applied by Jai
= 4,500 Application money
received on 4,500 shares =
13,500 Less: Adjusted on application = 9,000 Adjusted on allotment =
4,500
Q2.Nandi Ltd. invited applications for issuing 80,000 equity shares
of Rs. 10 each at a premium of Rs. 2 per share. The amount was
payable as follows:
On application Rs. 6 (including premium) per share
43
On allotment Rs. 3 per share and the balance on first and final
call. Applications for 90,000 shares were received. Applications
for 5,000 shares were rejected and pro-rata allotment was made
to the remaining applicants. Over payments received on
application was adjusted towards sums due on allotment. All calls
were made and were duly received except the allotment and final
call on 1,600 shares allotted to Raj. These shares were forfeited
and the forfeited shares were re-issued for Rs. 18,400 fully paid
up.
(i) Which value has been affected by rejecting the applications of the
applicants who had applied for 5,000 shares? Suggest a better
alternative for the same.
(ii) Pass necessary journal entries in the books of Nandi Ltd.
Solution:(i)Values:
1 (a) Value of Equality: Value of equality has been affected by rejecting the
applicants of the retails investors from getting shares of the company.
2 (b) Better Alternative: The better alternative could have been to allot the
shares proportionately to all the applicants so that such applicants may
not be demotivated from investing in the capital of big companies in
future.
(ii) Books of Nandi Ltd.Journal

Date Particulars L.F. Dr. (Rs.) Cr.(Rs.)
Bank A/c Dr. To Share Application A/c (Being 5,40,000 5,40,000
amount received on application) 5,40,000 3,20,000
2,40,000 1,60,000
2,05,800 30,000
2,05,800 30,000
4,200 2,40,000
2,05,800
Share
Applicati
on A/c
Dr. To
Share
Capital
A/c To
Securiti
es
Premiu
m A/c To
Share
Allotme
nt A/c To
Bank
A/c
(Being
applicati
on
money
adjusted
)
Share
Allotme
nt A/c
Dr. To
Share
Capital
A/c
(Being
the
amount
due on
allotme
nt)
Bank
A/c Dr.
To Share
Allotme
nt A/c
(Being
the
amount
received
on
allotme
nt) OR
Bank
A/c Dr.
Calls in
Arrears
A/c
44
Dr. To share allotment A/c (Being the amount 2,40,000 2,10,000

received on allotment) 2,35,200 2,40,000
2,35,200 2,35,200
4,800 2,40,000
16,000 7,000
16,000 4,200
18,400 4,800
7,000 7,000
9,000
16,000
2,400
7,000
Share
First and
Final
Call A/c
Dr. To
Share
Capital
A/c
(Being
the
amount
due on
First and
final
call)
Bank
A/c Dr.
To Share
First and
Final
Call A/c
(Being
amount
received
on first
and final
call) OR
Bank
A/c Dr.
Calls-in-
arrears
A/c Dr.
To Share
First and
Final
Call A/c
(Being
amount
received
on first
and final
call)
Share
Capital
A/c Dr.
To Share
forfeited
A/c To
Share
Allotme
nt A/c To
Share
first Call
A/c
(Being
1,600
shares
forfeited
) OR
Share
Capital
A/c Dr.
To Share
Forfeite
d A/c To
Calls in
Arrears
A/c
(Being
1,600
shares
forfeited
)
Bank
A/c Dr.
To Share
Capital
A/c To
Securiti
es
Premiu
m A/c
(Being
1,600
shares
re-
issued)
Share
forfeited
A/c Dr.
To
Capital
Reserve
A/c
(Being
balance
in share
forfeited
transferr
ed to
capital
reserve)
45
1 (i) Which value has been affected by rejecting the applications of the
applicants who had applied for 1,000 debentures? Suggest a better
alternative for the same.
2 (ii) Pass necessary journal entries in the books of Aamir Ltd.
Solution:
(i) Values:
(a) Value of Equality: Value of Equality has been affected by
rejecting the applicants of the retails investors from getting
debentures of the company.
(b) Better Alternative: The better alternative could have been to allot the
debentures proportionately to all the applicants so that such
applicants may not be demotivated from investing in the big
companies in future.
Books of Aamir Ltd.
Journal
Dat Particulars L.F. Debit(Rs.) Credit(Rs.)
e
Bank A/c Dr. To Debenture 2,00,000 2,00,000
Application A/c (Being application 2,00,000 1,25,000
money received) 3,75,000 50,000
3,25,000 25,000
3,75,000
3,25,000
Debent
ure
applica
tion
A/c Dr.
To 12%
Debent
ures
A/c To
Debent
ure
Allotm
ent A/c
To
Bank
A/c
(Being
applica
tion
money
transfe
rred)
Debent
ure
Allotm
ent A/c
Dr. To
12%
Debent
ures
(Being
allotm
ent
money
made
due)
Bank
A/c Dr.
To
Debent
ure
Allotm
ent A/c
(Being
allotm
ent
money
receive
d)
Q2.(Collateral Security) On 1 January 2012, Mahesh Ltd. took a loan of

Rs.10,00,000 frkom the State Bank of India for which the Company
placed with the Bank, 10% debentures of Rs. 12,00,000 as collateral
security. As per the terms the Bank is obliged and
46
bound to immediately release the debentures, as soon as the loan
is repaid.
1 (i) Identify the value which according to you motivated the State Bank
of India to insist the company for issuing debentures of Rs. 12,00,000 as
against loan of Rs.10,00,000 as collateral security.
2 (ii) Pass necessary journal entries and prepare Balance Sheet of the
Company.
Solution:
1 (i) Safety: By taking debentures of Rs. 12,00,000 against a loan of
Rs.10,00,000 from the State Bank of India would be able to realize full
amount by selling the debentures in case company fails to repay loan.
2 (ii) Books of Mahesh Ltd.Journal
Dat Particulars L.F. Debit(Rs.) Credit(Rs.)

e
Bank A/c Dr. To Bank Loan A/c (Being 10,00,000 10,00,000
loan of Rs.10,00,000 taken from State 12,00,000 12,00,000
Bank of India)
10%
Debent
ures
A/c Dr.
To
Debent
ures
Suspen
se A/c
(Being
issuanc
e of
12,000,
10%
Debent
ures as
collater
al
security
)
Dat Particulars Note (Rs.)

e No. (Rs.)
1. EQUITY AND LIABILITIES Non-Current 10,00,000
Liabilities 10,00,000
10,00,000
Notes
to
Balance
Sheet:
Non
Current
Liabiliti
es Bank
Loan
(Secure
d by
12,000,
10%
Debent
ures of
Rs. 100
each
issued
a
collater
al
security
to State
Bank of
India)
Q3.(creation of Debenture Redemption Reserve)On 1-4-2011, JMD Ltd. issued

90,000; 10% Debentures of Rs. 100 each at par,
47
redeemable at par at the end of 2012. Keeping in view of the
guidelines issued by SEBI, and in the interest of
Debentureholders, Company has decided to create Debenture
Redemption Reserve equivalent to 50 percent of the nominal
value of the debentures in the year in which debentures were
issued.
1 (i) Identify the value which according to you motivated the company by
making prorata allotment of debentures to all the applicants.
2 (ii) Pass the necessary journal entries to record the above transactions.
Solution:
1 (i) Respect for law: By creating Debenture Redemption Reserve as per
the requirement of SEBI Guidelines.
2 (ii) Books of JMD Ltd.Journal
Dat Particulars L.F. Debit (Rs.) Credit (Rs.)

e
(i) Bank A/c Dr. To Debenture Application 90,00,000 90,00,000
and Allotment A/c (Being application 90,00,000 90,00,000
money received) 45,00,000 45,00,000
(ii) Debent
ure
Applica
tion
and
Allotme
nt A/c
Dr. To
10%
Debent
ures
A/c
(Being
applicat
ion
money
transfer
red)
(iii) Profit
and
Loss
A/c To
Debent
ure
Redem
ption
Reserve
A/c
(Being
Debent
ure
Redem
ption
Reserve
created
)
Analysis of Financial Statement Q1. (Current

Ratio)
Shiv Shakti ltd has furnished the following information : Current Ratio
= 1.7:1 Current Assets = Rs 51,000
48
1 (a) Sharing : By paying dividend, Company shares its profits with the
shareholders.
2 (b) Responsibility : Company fulfills its responsibility towards
shareholders by paying part of profits in the form of dividend to
shareholders who had invested their money in the company.
Q3.(Return on Investments) Shiva Ltd has furnished the following

information: 6% Debentures = Rs 5,50,000 Fixed Assets = Rs
8,00,000 Current Assets = Rs 5,40,000 Current Liabilities = Rs
3,70,000 Profit before interest = Rs 6,51,000 Tax rate = 50% The
Management of Shiva Ltd. desires to declare dividend on profits
after complying all legal provisions.
1 (i) Identify the value which motivated the Management to declare

dividend on profits and that too after complying all legal provisions.
2 (ii) Calculate Return on Investment.
Solution:
(i) Values :
1 (a) Sharing : In paying dividend, Company shares its profits with the
shareholders.
2 (b) Responsibility : Company fulfills its responsibility towards
shareholders by paying part of profits in the form of dividend to
3 (c) Respect for law : By declaring dividend on profits after paying interst
and tax, Management has shown its respect for law.
(ii) Return On Investment: Profit

before Interest, Tax and
Dividend x 100 Capital
Employed Capital Employed =
Net Fixed Assets + Working
Capital = Rs 8,00,000 + (Rs
5,40,000 Rs 3,70,000) = Rs
9,70,000
Return on Investment = 6,51,000 = 67.11%
9,70,000
50
Q4.(Interest Coverage Ratio) PQR Ltd has furnished the following
information: Net profit before interest and tax Rs 4,00,000 Rate of
income tax 30% 10% Debentures Rs 10,00,000 The Interest
Coverage Ratio acceptable in the same type of business is 5
times. Hence, the management decided to redeem some of the
debentures so that the interest coverage ratio of the company
could be 5 times
1 (i) Identify the value which motivated the Management to increase the
interest coverage ratio to 5 times.
2 (ii) Calculate interest coverage ratio of the company before redeeming
debentures.
(iii) Calculate the amount of debentures to be redeemed.

Solution:
1 (i) Safety : By increasing interest coverage ratio from 4 times to 5
times, management is providing margin of safety to the long term debts.
2 (ii) Calculation of Interest Coverage Ratio before redeeming the
debentures Interest Coverage Ratio = Profit before interest and tax
Interest
Obligation = Rs
4,00,000 Rs 1,00,000
= 4 times
(iii) Calculation of amount of Debentures
to be redeemed Interest Coverage
Ratio = Profit before interest and tax
Interest Obligation 5 = 4,00,000
Interest obligation Therefore Interest
Obligation = Rs 80,000 To maintain Interest Coverage Ratio, Interest
obligation should be Rs 80,000 which represents Debentures of Rs
8,00,000. Hence, PQR Ltd. should redeem Rs 2,00,000 (Rs 10,00,000
Rs 8,00,000) debentures.
CASH FLOW
STATEMENT Q5. (Treatment of
Dividend) The following in the
Balance Sheets of Vinshu Ltd.
BALANCE SHEET
51
I. EQUITY AND LIABILITIES Share 15,000

Capital Trade Payable Reserves and 2,700 780
Surplus Total II. ASSETS Land and 18,480
Buildings Trade Receivables 1,950 1,950
Inventories Cash and Cash Equivalents 2,700
Total 10,380
18,480
11,000
4,200 600
15,800
1,500 3,600
2,400 8,300
15,800
Additional Information :After examining the financial position of the

company for the year2011-12, it was resolved that an interim dividend
of Rs 2,500 to be paidto all shareholders of the company.
1 (i) Identify two value(s) which according to you motivated the
Management to pay interim dividend to all shareholders of the company.
2 (ii) Prepare Cash Flow Statement as per AS-3 (revised).
SOLUTION :
(i)
1 (a) Sharing : In paying interim dividend, the company shares its profits
with the shareholders.
2 (b) Responsibility: Company fulfills its responsibility towards
shareholders by paying par of profits in the form of dividend to
(ii) Cash Flow Statementfor the year ended 31st
March, 2012
Rs R
s
A. Cash flows from Operating Activities : Net Profit 2,680
Before Tax and Extraordinary Items
Adjustments :
Operating Profit Before Working Capital Changes Add : 2,680
Decrease in current assets : Decrease in Trade 150
Receivables Add : Increase in current liabilities Less :
Increase in current assets
52
DELHI PUBLIC SCHOOL Indirapuram, Ghaziabad ACCOUNTS) Assignment Booklet

(Class -XII :
Less Increase in Inventories Decrease in current (300)

: liabilities : Decrease in Trade Payables Cash (1,500)
from Operating Activities 1,03
0
B. Cash flows from Investing Activities : Purchase of (450)

Land & Building Cash used in Investing Activities (450)
(450)
C. Cash flows from Financing Activities : Issue of

Share Capital Dividend paid 4,000
(2,500)
Cash from Financing Activities 1,500
2,080 8,300
10,380
Net increase in cash & cash equivalents Cash & cash

equivalents at the beginning of the period (31.3.2011)
Cash & cash equivalent at the end of the period
(31.3.2012)
Working Notes:Calculation of Profit Before Tax and Extraordinary Items :

Net Profit during the year 180
Add : Dividend Paid 2,500
2,680
Q6.(Treatment of Tax) From the following Balance Sheets of Hind Ltd., you
are required to prepare Cash Flow Statement as per AS3(Revised)
Balance Sheets
Particulars Note Rs. Rs.
No.
I. EQUITY AND LIABILITIES
Share Capital Reserves & 64,000
Surplus Bank Loan Trade 60,000 19,600
Payables 11,600 4,000
7,200 4,000
Total 78,800 91,600
II. ASSETS Land and Building
40,000 40,000
53
Plant and Machinery Inventories 15,200 23,200

Trade Payables Cash & Cash 8,400 5,600
Equivalents 12,000 14,400
3,200 8,400
Total 78,800 91,600
For the year 2011-12, total tax assessed by the Accounts Department ofthe
Company was Rs. 2,500. The Management, without trying tomanipulate the
accounts, paid the entire tax.
1 (i) Management of the Company did not try to insist the Accounts
Department to manipulate the accounts and paid the proper tax. Identify the
value which according to you motivated the Management to pay proper tax.
2 (ii) Prepare Cash Flow Statement as per AS3 (Revised).
Solution:
(i) Values:
1 (a) Honesty: In paying the proper tax company proves that it is honest.
2 (b) Responsibility: By paying the proper tax company has fulfilled its
responsibility towards nation.
(ii) Cash Flow Statement

Particulars Rs. Rs.
A. Cash flows from Operating activities:
Profit Before Tax and Extraordinary Items 10,500
Adjustments
Operating Profit Before Working Capital Changes 10,500
Add: Decrease in current assets:
Stock 2,800 2,800
Add: Increase in current liability:
13,300
Less: Increase in Current assets:
Debtors 2,400
Less: Decrease in Current liability:
Bills Payable 3,200 (5,600)
Cash from Operating Activities 7,700
Less: Tax paid (2,500)
Net Cash from Operating Activities B. Cash flows from 5,200
Investing activities: (8,000)
Purchase of Plant & Machinery
Cash used in Investing Activities C. Cash flows from (8,000
Financing activities: )
Issue of Share Capital 4,000
Raising of Bank Loan 4,000
Net Cash from Financing Activities 8,000
54
Working Notes:Calculation of Profit before tax and Extraordinary

items:
Rs.
Net Profit during the year 8,000
Add: Tax Paid 2,500
10,500
55
Questions based on change in pattern of question
paper
Q.1. A and B are partners sharing profits in the ratio of 3:2 with
capitals of Rs.3,20,000 and 2,60,000. On 1st April, 2013, they
admit C into partnership. A surrenders 1/5th of his share and B
surrenders 2/5th of his share in favour of C. C brings in Rs.
1,40,000 for goodwill and the proportionate amount of Capital in
Cash. Partners are entitled to interest of Capital @ 5% p.a.
Profits for the year ending 31st March, 2014 before allowing
interest on capitals amounted to Rs. 3,00,000. Pass journal
entries for above mentioned transactions.
Solution:
Date Particulars L. Dr.(R.) Cr.(Rs.
F. )
2013 4,20,0 2,80,0
April 1 00 00
1,40,0 1,40,0
00 00
3,00,0 60,000
00 80,000
50,000 3,00,0
Bank A/c Dr. To Cs Capital A/c To 00
Premium for Goodwill A/c (The amount of 19,000
capital and goodwill/premium brought in 17,000
Cash) 14,000
April 2 Premiu
m for
Goodwi
ll A/c
Dr. To
As
Capital
A/c To
Bs
Capital
A/c
(Goodw
ill
credite
d to old
partner
s in
sacrifici
ng ratio
i.e.,
3:4)
2014 Profit &
March Loss
31 A/c Dr.
To
Profit
and
Loss
Approp
riation
A/c
(Transf
er of
profit
and
loss to
Approp
riation
A/c)
March Interest
31 on
Capital
A/c Dr.
To As
Capital
A/c To
Bs
Capital
A/c To
Cs
Capital
A/c
(Interes
t on
partner
s
capitals
)
56

ACCOUNTS)
=
B 5% on Rs. 3,40,000 Rs. 17,000
=
C 5% on Rs. 2,80,000 Rs. 14,000
Rs. 50,000
(iv) Net Profit after interest on Capital = Rs. 3,00,000

Rs. 50,000 = Rs. 2,50,000
Q.2. A and B were partners sharing profits in the ratio of 2:1. Their capitals
were Rs.4,00,000 and Rs.2,00,000 respectively. On 1st April, 2013 they
admit C into partnership and decide that the profit sharing ratio
between B and C shall be same as between A and B. C brings in
Rs.1,20,000 as his capital and necessary amount for goodwill
based on 2 years purchase of last three years average profits.
The profits were as follows: Year ending
31 March 2010 Rs. 1,00,000 (including an abnormal gain of Rs.20,000)31 st
st
March 2011 Rs. 2,00,000 (after charging an abnormal loss of Rs.60,000)31 st

March 2012 Rs. 40,000 (Loss)31st March 2013 Rs. 4,10,000
Partners are allowed 10% p.a. interest on Capitals and are charged on
Drawings @ 12% p.a. Profit for the year ending 31st March, 2014 before
allowing or charging interest was Rs. 2,40,000 and Drawings of the
partners for the year ending 31st March, 2014 were: A Rs. 5,000 per
month in the beginning of each month. B Rs. 15,000 at the end of each
quarter C Rs. 60,000 You are required to prepare
1 (i) Profit & Loss Appropriation A/c, and
2 (ii) Partners Capital Accounts
Solution: Profit & Loss Appropriation AccountDr. for the year ending
31st March, 2014 Cr.

To Interest on Capital A/c By Profit & Loss A/c 2,40,00
0
A By Interest on
44,000 Drawings:
B 78,000 A 3,900
22,000 B 2,700 10,200
58
April 1 To Premium for Goodwill A/c (The 42,000

amount of capital and goodwill/premium 18,000
brought in cash) 24,000
42,000 3,52,200
3,52,200 31,800
72,200 22,400
72,2000 18,000
2,80,000 72,200
1,22,000
78,000
80,000
Premiu
m for
Goodwil
l A/c Dr.
To Bs
Capital
A/c To
Cs
Capital
A/c
(Goodwi
ll/premi
um
credited
to old
partner
s in
their
sacrifici
ng ratio,
i.e., 3:4)
2014 Profit
March and
31 Loss A/c
Dr. To
Profit
and
Loss
Appropr
iation
A/c (The
transfer
of Profit
to Profit
and
Loss
Appropr
iation
Account
)
March Interest
31 on
Capital
A/c Dr.
To Bs
Capital
A/c To
Cs
Capital
A/c To
Ds
Capital
A/c (The
interest
on
partner
s
Capitals
)
March Profit
31 and
Loss
Appropr
iation
A/c Dr.
To
Interest
on
Capital
A/c (The
transfer
of
interest
on
Capital
to Profit
and
Loss
Appropr
iation
Account
)
March Profit
31 and
Loss
Appropr
iation
A/c Dr.
To Bs
Capital
A/c To
Cs
Capital
A/c To
Ds
Capital
A/c (The
transfer
of credit
balance
of Profit
and
Loss
appropri
ation
Account
to
partner
s
Capital
Account
s)
PROFIT AND LOSS APPROPRIATION ACCOUNT for the

Dr year ended 31st March, 2014 Cr.
.
To Interest on Captials: B(10% 31,800 By Profit & Loss 3,52,20
on Rs. 3,18,000) C(10% on Rs. 22,400 A/c 0
2,24,000) D(10% on Rs. 18,000
1,80,000) To Profit transferred
to Capital Accounts: B
1,22,000
67
in partnership and should be entitled to 1/3rd profits of the firms.

The balances in the books of B and M were as follows:
Sundry Creditors 8,000 Land & Building 50,000
Bank overdraft 13,000 Furniture Stock Sundry 7,000
Capital Accounts: 38,000 Debtors 9,000
BM 19,000 12,000
78,000 78,000
For the purpose of Bs retirement and Ls admission the assets of the

firm were revalued as under :-Land & Building Rs.65,000; Furniture
Rs.5,500; Stock Rs.8,500; and Sundry Debtors Rs.10,000. Goodwill was
valued at Rs. 10,000. Other terms agreed were that enough money
should be introduced to enable B to be paid out and leave Rs.5,000 for
working capital after paying off Bank Overdraft and that M and L should
respectively provide such sums as would make their capitals
proportionate to their shares of profit. B agreed to make his son L a gift
by transfer from his capital account of half the amount which L had to
provide. Set out the necessary Journal entries in the books of the firm
and prepare new balance sheet.
Solution: JOURNAL
Dat Particulars L.F. Dr.(Rs.) Cr.(Rs.)
e
Land & Building Dr. To Revaluation A/c 15,000 15,000
(Increase in the value of land & building) 4,000 1,500
11,000 500
6,667 2,000
7,333
3,667
6,667
Revalua
tion A/c
Dr. To
Furnitur
e A/c To
Stock
A/c To
Provisio
n for
Bad
debts
(Reduct
ion in
the
value of
assets)
Revalua
tion A/c
Dr. To
Bs
Capital
A/c To
Ms
Capital
A/c
(Profit
on
revalua
tion
transfer
red)
Ms
Capital
A/c Dr.
To Bs
Capital
A/c
69
(Retiring partners Capital A/c credited by 3,333 3,333
his share of goodwill i.e. 2/3rd of Rs. 10,000 16,000 16,000
and debited to continuing partners Capital 54,000 38,000
A/c) 13,000 16,000
36,000 13,000
(2) (3) 36,000
Ls
Capital
A/c Dr.
To Ms
Capital
A/c
(Incomi
ng
partner
s
Capital
A/c
debited
by his
share
of
goodwil
l ie.e.
1/3rd of
Rs.
10,000
and
credite
d to Ms
Capital
A/c)
Bs
Capital
A/c Dr.
To Ls
Capital
A/c
(Gift by
B on
half the
amount
which L
had to
provide
)
Cash
A/c Dr.
To Ms
Capital
A/c To
Ls
Capital
A/c
(Cash
brought
in by M
and L)
Bank
Overdr
aft A/c
Dr. To
Cash
A/c
(Payme
nt of
bank
overdra
ft)
Bs
Capital
A/c Dr.
To Cash
A/c
(amoun
t due to
B paid
off)
Dr. REVALUATION ACCOUNT Cr.

To Furniture A/c To Stock A/c To 1,500 By Land & Building 15,000
Provision for Bad Debts To Profits 500 A/c
transferred to Capital A/cs: B 2/3 2,000
7,333 M 1/3 3,667 11,000
15,000 15,000
Dr. CAPITAL ACCOUNTS Cr.

B M L B M L
Rs. Rs. Rs. Rs. Rs. Rs.
To Bs 52,000 6,667 38,000 19,000
Capital A/c 16,000 By Balance 7,333 3,667
To Balance b/d By Rev. 6,667
70
(6) Other Expenses:
1,500
Carriage Inwards
900
Carriage Outwards
1,200 Discount (Dr.)

Rent 1,650
1,800 Add :
Outstanding 150 General Expenses 5,500
9,900
Less: Prepaid Insurance 1,000
74
Practice Paper I PART A

Accounting for
Partnership firms and
Companies
Q.1. Is rent paid to a partner a charge on profit or an appropriation of profit?
Why? [1]
Q.2. Under what circumstances premium paid by the incoming partner would
never be recorded in the books of accounts?
[1]
Q.3. A,B and C are partners sharing profits in the ratio of 3:2:1. B retires. What
is the gaining Ratio?
[1]
Q.4. If the retiring partner is not paid immediately on retirement how should his
capital account be shown in subsequent balance sheet?
[1]
Q.5. When all the debentures have been redeemed then balance of Debenture
Redemption Reserve is transferred to which account?
[1]
Q.6. Name the part of capital which company actually demands from its
shareholders or subscribers.
[1]
Q.7. Give the meaning of Minimum subscription.
[1]
Q.8. Reena, Meena and Sheena were partners in the ratio of 5:3:2. Their fixed
capital were Rs. 10,00,000, Rs. 20,00,000 and Rs. 40,00,000 respectively.
For the year 2009, interest on capital was credited to them @ 12% instead
of 10%. Pass the necessary adjustment entry.
[3]
Q.9. The capital of Ram and Shyam in the business of partnership was Rs.
1,40,000 and the rate of interest in the market was 15%. Salary of Ram
and Shyam was Rs. 8,400 each. The three years profits of the firm were
Rs. 42,000, Rs, 50,400 and Rs. 58,800. Calculate the value of goodwill on
the basis of 2 years purchase of the past 3 years average super profits. [3]
Q.10. Sonu Ltd. purchased a building for Rs. 2,70,000. Half the amount was paid
in cash and for remaining half by issue of 11% debentures
75
of 100 each at a premium of Rs. 10. Pass necessary journal entries.
[3]
Q.11. On 1st April, 2013, Tulsian Ltd. had 1,000, 12% Debentures of Rs. 100
each. On 1st Oct 2013, the company purchased 300 own debentures at Rs.
93 for the investment purpose and sold the same @ 99 after few months.
Interest of Debenture is payable half yearly on 30th sep and 31st March.
Record the necessary journal entries on date of purchase and sale. [3]
Q.12. Jimmy Davis Ltd. invited application for 30,000 shares of Rs. 10 each
payable as follows:
[3+1=4] On Application Rs. 3 (on 1st April, 2011) On Allotment
Rs. 2 (on 1st July, 2011) On First Call Rs. 3 (on 1st Dec, 2011) On Final Call
Rs. 2 (on 31st March, 2012) The issue was fully subscribed and shares were
allotted to all the applicants. Mr. Vikas holding 2000 shares, paid the whole
of the amount due along with allotment. Interest was paid to the
shareholders on 31st March, 2012.
1 (i) Calculate the amount of interest on calls in advance?
2 (ii) Which value is highlighted in the above problem?
Q.13. [2+2=4]
1 (i) A,B and C were partners sharing profits in the ratio of 5:4:3. C retired
due to his prolonged illness and his share was taken up by A and B in the
ratio of 3:2. Find out new Ratio.
2 (ii) C faced financial difficiulties after his retirement. His son Rakesh was
an unemployed commerce graduate and hence A and B decided to Admit
Rakesh into partnership by offering him 1/5 share in profit Mention the two
values involved in admitting Rakesh as a partner.
Q.14. X Ltd. forfeited 1,000 equity shares of Rs. 10 each issued at a premium of
Rs. 3 per share for the non payment of final call of Rs. 6 per share
(including Premium). The forfeited shares were reissued as fully paid up
for Rs. 7 per share. [4]
Q.15. X and Y were partners in a firm sharing profits in the ratio of 3:1. On
1.3.2010 they admitted Z as a new partner for 1/4 th share in the profits.
The new profit sharing ratio will be 2:1:1. Z brought in Rs. 2,00,000 as his
capital and Rs. 50,000 for his share of goodwill in cash. On Zs admission
goodwill account appeared in the books of the
76
firm at Rs. 30,000. Pass necessary journal entries in the books of the firm.
[4]
Q.16. Following is the Balance Sheet of X, Y and Z who are partners sharing
profits in the ratio of 2:2:1, as on 31st March 2012:
[6]
Balance Sheet As
at 31.03.2012
Creditors Profit and Loss 40,000 Goodwill Fixed 30,000
A/c General Reserve 13,000 Assets Stock S. 60,000
Capitals X 17,000 Y 25,000 1,50,000 Debtors Cash at 10,000
Z 15,000 57,000 Bank 20,000
1,40,000
2,60,000 2,60,000
Y died on 10th June 2012, according to the Deed, his legal representatives were
entitled to:
1 (i) Balance in Capital Account.
2 (ii) Share of goodwill valued on the basis of thrice the average of the
past 4 years profits.
(iii) Share in profits upto the date of death on the basis of average profits
for the past 4 years.
(iv) Interest on Capital @ 12% p.a. Profits for the years ending on 31 st
March of 2008, 2009, 2010 and 2011 respectively were Rs. 20,000,
Rs. 15,000, Rs. 17,000 and Rs. 19,000. Prepare Ys capital A/c and
Ys executors A/c.
Q.17. A and B are partners dealing in manufacturing plastic polythene were
sharing profits in the ratio of 3:2. Their capitals are Rs. 70,000 and Rs.
50,000 respectively. The government banned the plastic polythene and
therefore they shifted to manufacturing paper bags. Their sale was going
down consistently as compared to previous years. They employed a new
marketing manager to uplift the sales volume from the current year. To
motivate the manager, firm provided him 5% commission on net profit
earned during the year. Net profit earned during the year was Rs.
2,00,000. The firm also admitted one new partner C, who is a marketing
expert, for 1/4th share with a guarantee of minimum profit of Rs. 50,000
every year as he needed this money for her daughters marriage.
[4+2=6]
77
1 (i) Prepare Profit and Loss Appropriation A/c to show the effect of the
above transactions.
2 (ii) Identify the values which according to you are highlighted in
the above problem.

Q.18. Y Ltd. invited application for issuing 10,000 equity shares of Rs. 100 each
at a premium of Rs. 30. The amount was payable as follows:
[8] On application Rs. 20 per share On allotment Rs. 44
per share and the balance on first and final call. Applications for 13,000
shares were received. Applications for 500 shares were rejected and
prorata allotment was made to the remaining applicants. Over payments
received with applications were adjusted towards sums due on allotment.
All calls were made and were duly received except kanwar who had
applied for 250 shares failed to pay allotment and call money. His shares
were forfeited. The forfeited shares were reissued at Rs. 22,000 fully paid
up. Pass necessary journal entries in the books of the company.
OR X Ltd. issued 50,000 shares of Rs. 10 each at a premium of
Rs. 2 per share payable as follows: Rs. 3 on Application Rs. 6 on Allotment
(including Premium) And Rs. 3 on call. Applications were received for
75,000 shares and a pro-rata allotment was made as follows: To the
applicants of 40,000 shares, 30,000 shares were issued and for the rest
20,000 share were issued. All moneys due were received except the
allotment and call money from Ram who had applied for 1,200 shares (out
of the group of 40,000 shares). All his shares were forfeited. The forfeited
shares were re issued for Rs. 7 per share fully paid up. Pass necessary
journal entries for the above transactions.
Q.19. Following is ther Balance sheet of A and B as on 30 th June 2012 and profit
sharing ratio is 3:2.
[8] Balance Sheet as at 30.06.12
78
Mrs. As Loan Bs Loan 20,000 Investments Debtors 15,300

Investment fluctuation 12,000 17,000 Less: 15,000
fund General Reserve As 4,000 Provision 2,000 Bills 18,700
capital Bs Capital 2,000 Receivables Cash 3,000
20,000 P&L A/c Goodwill 4,000
20,000 2,000
1,18,00 1,18,00
0 0
The firm was dissolved on 30th June 2012 and the following was agreed upon:
1 (i) A agreed to pay off his wifes loan.
2 (ii) Debtors realised Rs. 12,000.
(iii) B took away all investments at Rs. 13,500.

1 (iv) Building realised Rs. 76,000.
2 (v) S. Creditors payable after two months were paid immediately at 10%
discount.
3 (vi) Bills Receivable were settled at a loss of Rs. 700.
(vii) Realisation expenses amounted to Rs. 2,500.

Prepare Realisation A/c, Partners Capital A/c and Cash A/c.
OR B and C were partners sharing profits in the ratio of 3:2.
Their Balance Sheet as on 31.3.2011 was as follows:
Balance SheetOf B & C as on 31.3.2011
Liabilities Amount Assets Amoun
t
Capital B 60,000 C Land & Building 80,000
40,000 Provision for Machinery 20,000
bad debts Creditors 1,00,00 Furniture 10,000
0 1,000 Debtors Cash 25,000
60,000 Profit & Loss 16,000
A/c 10,000
1,61,00 1,61,00
0 0
D was admitted to the partnership for 1/5 th share in the profit on the following
terms:
1 (i) The new profit sharing ratio was decided as 2:2:1.
2 (ii) D will bring Rs. 30,000 as his capital and Rs. 15,000 for his share of
goodwill.
(iii) Half of goodwill amount was withdrawn by the partner who sacrificed
his share of profit in favour of D.
79
1 (iv) A provision of 5% for bad and doubtful debts was to be maintained.

2 (v) An item of Rs. 500 included in s. creditors was not likely to be paid.
3 (vi) A provision of Rs. 800 was to be made for claim for damages against
the firm.
After making the above adjustments the capital accounts of B

and C were to be adjusted on the basis of Ds capital. Actual
cash was to be brought in or to be paid off as the case may be.
Prepare Revaluation A/c, Partners Capital A/c and Balance Sheet
of the new firm
Part B (Analysis of Financial statement)
Q.20. If current Ratio of a company is 2:1, state giving reason whether cash
collected from Debtors would improve, Reduce or have no effect on the
ratio. [1]
Q.21. How will you treat Redemption of Debentures while preparing cash flow
statement as Per As-3 (Revised)?
[1]
Q.22. Under which type of activity will you classify purchase of shares of
another company while preparing cash flow statement?
[1]
Q.23. Rearrange the following in the form of a company Balance Sheet as per
revised schedule V, Part I of the Companies Act, 1956.
[3]
General Reserve 3,000Debentures 3,000Profit & Loss A/c (Cr.)
1,200Depreciation on fixed Assets 700Gross fixed Assets 9,000Current
Liabilities 2,500
Q.24. Prepare Common Size Statement of Profit & Loss from the following
information:
[4]
Particulars 2011 2012
Revenue from 1,00,00 1,30,0
operations 0 00
Cost of Material
80,000 84,000
Consumed
Other Expenses 12,000 9,000
80
Q.25. [2+2=4]
1. (i) A business has a Current Ratio of 3:1 and a Quick Ration of
2. 1.8:1. If the Working Capital is Rs. 1,60,000 calculate the total current
assets and stock.
2 (ii) The following information is provided to you:
Share Capital 1,60,000

G. Reserve 80,00015% Loan 1,00,000Sales for the year
2,00,000Tax paid during the year 40,000Profit after Interest and
tax 80,000
From the above information calculate Debt Equity Ratio.
Q.26. From the following summarised Balance of Vishnu Ltd. Prepare Cash Flow
Statement as per AS-3 (Revised):
[6]
Note 2012
Particulars (Rs.) 2011 (Rs.)
No.
EQUITY AND LIABILILITES (1)
Shareholders funds (a) Share
Capital (b) Reserves and Surplus 1,02,00
(2) Non Current Liabilities Long 84,000
0
Term Borrowings (3) Current 22,560
1234 36,000
Liabilities Trade Payables Short 4,800
5 6,600
Term Provisions 36,000
28,800
18,000
16,800
Total 1,90,20 1,65,360

0
ASSETS Non Current Assets
(a) Fixed Assets Tangible
Assets Current Assets (a)
Inventories (b) Trade Receivables
(c) Cash and Cash equivalents
1,18,80 1,32,000
0 8,400 2,400
33,600 27,600
678 29,400 3,360
Total 1,90,20 1,65,360
0
81
Notes:
Particulars 31.3.2012 31.3.2011
(Rs.) (Rs.)
1. Share Capital Equity Share
Capital 8 % Preference Share 72,000 60,000
Capital 30,000 24,000
1,02,000 84,000
2. Reserves and Surplus General
Reserve Profit & Loss 20,400
15,600 16,800 5,760
36,000 22,560
3. Long term borrowings Bank
Loan 6,600 4,800
6,600 4,800
4. Trade Payables Creditors Bills
Payable 18,000 21,960
10,800 14,040
28,800 36,000
5. Short term Provision Income
tax Provision 16,800 18,000
16,800 18,000
6. Tangible Assets Building Plant
96,000 97,200
22,800 34,800
1,18,800 1,32,000
7. Trade receivables Debtors Bills
Receivables 19,200
14,400 24,000 3,600
33,600 27,600
8. Cash & Cash equivalents Cash
Bank 16,200
13,200 1,200 2,160
29,400 3,360
Additional information
1 (i) Tax paid during the year 2011-12 Rs. 14,400.
2 (ii) Depreciation on plant charged during the year 2011-12 was Rs. 14,400.
82
Practice Paper 2
Q1.If the partners capitals are fixed, where will you record the interest charged
on drawings?
[1]
Q2.State the ratio in which the partners share the accumulated profits when
there is a change in the profit sharing ratio amongst existing partners. [1]
Q3.At what rate is interest payable on the amount remaining unpaid to the
executor of deceased partner?
[1]
Q4.Give the Journal entry to distribute Workmen Compensation Reserve or Rs.
70,000 at the time of retirement of Neeti when there is a claim of Rs.
25,000 against it. The firm has three partners Raveena, Neeti and Rajat.
[1]
Q5.What is meant by Calls-in-Arrears?
[1]
Q6.At what rate is interest paid by the company on calls-in-advance, if it has not
prepared its own Articles of Association?
[1]
Q7.What is meant by issue of debentures as collateral security?
[1]
Q8.Mohan, Neeraj and Peeyush are partners in a firm. They contributed Rs.
75,000 each as capital three years ago. At that time peeyush agree to look
after the business as Mohan and neeraj were busy. The profits for the past
three years were Rs. 45,000, Rs. 30,000 and Rs. 60,000 respectively. While
going through the books of accounts, Mohan noticed that profit had been
distributed in 1:1:2 ratio. When he enquired from Peeyush about this,
Peeyush answered that since he looked after the business he should get
more profit. Mohan disagreed and it was decided to distributed profits
equally with retrospective effect for the last three years.
[2+1=3]
1 (i) You are required to make necessary corrections in the books of
accounts of Mohan, Neeraj and Peeyush by passing an adjustment entry.
2 (ii) Identify the value which is being ignored by Peeyush.
83
Q9.Pass the necessary Journal entries for the issue of 7% debentures in the
following cases:
[3]
1 (i) 200 Debentures of Rs. 150 each issued at 10% premium redeemable
at Rs. 200 each.
2 (ii) 200 Debentures of Rs. 200 each issued at a premium of 10%
redeemable at par.
[3]
Q10. Tuteja Constructions Ltd. had an outstanding balance of Rs. 1,26,00,000,
9% debentures of Rs. 200 each redeemable at a premium of 3%.
According to the terms of redemption, the company redeemed 50% of the
above debentures by converting them into shares of Rs. 10 each at a
discount of 10%. Record the entries for redemption of Debentures in the
books of Tuteja Constructions Ltd.
[3]
Q11.Asin and Shreyas are partners in a firm. They admit Ajay as a new partner
with 1/5th share in the profits of the firm. Ajay brings Rs. 5,00,000 as his
share of capital. The value of the total assets of the firm was Rs. 15,00,000
and outside liabilities were valued at Rs. 5,00,000 on that date. Give the
necessary Journal entry to record goodwill at the time of Ajays admission.
Also show your workings.
Q12.Nikhil Ltd. purchased a running business from Sonia Ltd. for a sum of Rs.
22,00,000 by issuing 20,000 fully paid equity shares of Rs. 100 each at a
premium of 10%. The assets and liabilities consisted of the following:
Machinery Rs. 7,00,000, Debtors Rs. 2,50,000, Stock Rs. 5,00,000,
Building Rs. 11,50,000 and Bills Payable Rs. 2,50,000. Pass necessary
Journal entries in the books of Nikhil Ltd. for the above transactions.
[4]
Q13.Nandan, John and Rosa are partners sharing profits in the ratio of
4:3:2. On 1st April 2012, John gave a notice to retire from the firm. Nandan
and Rosa decided to share future profits in the ration of 1:1. The capital
accounts of Nandan and Rosa after all adjustments showed a balance of
Rs. 43,000 and Rs. 80,500 respectively. The total amount to be paid to
John was Rs. 95,500. This amount was to be paid by Nandan and Rosa in
such a way that their capitals become proportionate to their new profit
sharing ratio. Pass necessary
84
Journal entries in the books of the firm for the above transactions. Show
your working clearly. [4]
Q14.The authorized capital of Suhas Ltd. is Rs. 50,00,000 divided into 25,000
shares of of Rs. 200 each. Out of these, the company issued 12,000 shares
of Rs. 200 each at a premium of 10%. The amount per share was payable
as follows: [4] Rs. 60 on application Rs. 60 on allotment (including
premium) Rs. 30 on first call and Balance on final call Public applied for
11,000 shares. All the money was duly received. Prepare an extract of
Balance Sheet of Suhas Ltd. as per Revised Schedule VI Part I of the
Companies Act 1956 disclosing the above information. Also prepare notes
to accounts for the same.
Q15.Ahmed, Bheem and Daniel are partners in a firm. On 1st April 2011 the
balance in their capital accounts stood at Rs. 8,00,000, Rs. 6,00,000 and
Rs. 4,00,000 respectively. They shared profits in the proportion of 5:3:2
respectively. Partners are entitled to interest on capital @ 5% per annum
and salary to Bheem @ Rs. 3,000 per month and a commission of Rs.
12,000 to Daniel as per the provisions of the partnership deed. Ahmads
share of profit, excluding interest on capital, is guaranteed at not less than
Rs. 25,000 p.a. Bheems share of profit, including interest on capital but
excluding salary, is guaranteed at not less than Rs. 55,000 p.a. Any
deficiency arising on that account shall be met by Daniel. The profits of
the firm for the year ended 31st March 2012 amounted to Rs. 2,16,000.
Prepare Profit and Loss Appropriation Account for the year ended 31 st
March 2012.
[6]
Q16.The Balance Sheet of Sindhu, Rahul and Kamlesh, who were sharing profits
in the ratio of 3:3:4 respectively, as on 31st March 2012 was as follows: [6]
(Rs.) (Rs.)
General Reserve Bills 10,000 Cash Stock 32,000
Payable Loan Capitals: 20,000 Investments 88,000
Sindhu 24,000 Land and 94,000
Building 1,20,000
20,000
85
1,20,000 Rahul 1,00,000 3,00,000 Sindhus Loan
Kamlesh 80,000
3,54,000 3,54,000
Sindhu died on 31st July 2012. The partnership deed provided for the
following on the death of a partner:
1 (i) Goodwill of the firm be valued at two years purchase of average
profits for the last three years which were Rs. 80,000.
2 (ii) Sindhus share of profit till the date of his death was to be calculated
on the basis of sales. Sales for the year ended 31 st March 2013 amounted
to Rs. 8,00,000 and that from 1st April to 31st July 2012 Rs. 3,00,000. The
profit for the year end 31st March 2012 was Rs. 2,00,000.
(iii)Interest on capital was to be provided @ 6% p.a.

(iv) According to Sindhus will, the executors should donate his
share to Matri Chaya an orphanage for girls. Prepare Sindhus
Capital Account to be rendered to his executor. Also identify the value
being highlighted in the question.
Q17.Starplus Company issued for public subscription 1,50,000 shares of the
value of Rs. 100 each at a premium of Rs. 20 payable per share as follows:
[8] The company received applications for 3,00,000 shares. The allotment
was done as under:
1 (i) Applicants of 30,000 shares were allotted 10,000 shares.
2 (ii) Applicants of 1,40,000 shares were allotted 10,000 shares.
(iii) Remaining applicants were allotted 60,000 shares.After adjusting

excess money in allotment, the money was returned.Hari, a shareholder
who had applied for 7,000 shares of group (b),failed to pay allotment and
call money. Roshan, another shareholderwho was allotted 6,000 shares,
paid the call money along with theallotment. Roshan also belonged to
group (b).Pass necessary journal entries to record the above transactions
inthe books of the company. Show your working notes clearly.
OR
Record the Journal entries for forfeiture and reissue in the following cases:
(i) X Ltd. forfeited 200 shares of Rs. 100 each, Rs. 70 called up, on
which the shareholders had paid application and allotment
86
money of Rs. 50 per share. Out of these, 150 shares were reissued to
Naresh as Rs. 70 paid up for Rs. 80 per share.
(ii) Y Ltd. forfeited 180 shares of Rs. 10 each, Rs. 8 called up, issued at a
premium of Rs. 2 per share to R for non-payment of allotment money
of Rs. 5 per share (including premium). Out of these, 160 shares
were re-issued to Sanjay as Rs. 8 called up for Rs.10 per share fully
paid up.
(iii) Z Ltd. forfeited 30 shares of Rs. 100 each issued at a discount of Rs.
10 per share for non-payment of first and final call money of Rs. 30
per share. Out of these, 20 shares were reissued at Rs. 30 per share
fully paid up.
Q18.Sarthak and Vansh are partners sharing profits in the ratio of 2:1. Since
both of them are specially abled sometimes they find it difficult to run the
business on their own. Mansi, a common friend, decides to help them.
Therefore they admit her into partnership for 1/3 rd share in profits. She
brings Rs. 60,000 for goodwill and proportionate capital. At the time of
admission of Mansi, the Balace Sheet of Sarthak and Vansh was as under:
[8]
(Rs.) (Rs.)
Capital Accounts: Plant Furniture 66,000
Sarthak 70,000 Investments Stock 30,000
Vansh 60,000 Debtors 38,000 40,000
General Reserve 1,30,000 Less:Prov.forB/Debts 46,000
Bank Loan 18,000 4,000 Cash 34,000
Creditors 18,000 22,000
72,000
2,38,000 2,38,000
It was decided to
1 (i) Reduce the value of Stock by Rs. 10,000.
2 (ii) Plant is to be valued at Rs. 80,000.
(iii) An amount of Rs. 3,000 included in Creditors was not payable.

(iv) Half of the Investments were taken over by Sarthak and
remaining were valued at Rs. 25,000. Prepare Revaluation Account, Partners
Capital Accounts and Balance Sheet of reconstituted firm. Identify the value being
conveyed in the question.
87
OR
Prashant and Rajesh were partners in a firm sharing profits in the ratio of
3:2. In spite of repeated reminders by the authorities, they kept dumping
hazardous material into a nearby river. The court ordered for the
dissolution of their partnership firm on 31st March 2012. Prashant was
deputed to realize the assets and to pay the liabilities. He was paid Rs.
1,000 as commission for his services. The financial position of the firm on
31st March 2012 was as follows:
(Rs.) (Rs.)
Creditors Mrs. 80,000 Building Investments 1,20,000
Prashants loan 40,000 Debtors 34,000 Less: 30,600
Rajeshs Loan 24,000 Prov. For D/D 4,000 Bills 30,000
Investment 8,000 Receivable Cash Profit 37,400
Fluctuation Fund 84,000 and Loss A/c Goodwill 6,000
Capitals: Prashant: 8,000
42,000 Rajesh : 4,000
42,000
2,36,000 2,36,000
Following was agreed upon:

1 (i) Prashant agreed to pay off his wifes loan.
2 (ii) Debtors realized Rs. 24,000.
(iii) Rajesh took away all investments at Rs. 27,000.

1 (iv) Building realized Rs. 1,52,000.
2 (v) Creditors were payable after 2 months. They were paid immediately at
10% discount.
3 (vi) Bills Receivable were settled at a loss of Rs. 1,400.
(vii) Realisation expenses amounted to Rs. 2,500. Prepare Realisation Account,

Partners Capital Accounts and Cash Account to close the books of the firm.
Identify the value being conveyed in the question.
PART B(Financial Statements Analysis)
Q19.Under which type of activity will you classify Commission and Royalty Received
while preparing Cash Flow Statement.
[1]
88
Q20. Give an example of the activity which remains financing activity for
every enterprise.
[1]
Q21.State any one limitation of financial statements analysis.
[1]
Q22. Under what heads and sub-heads will the following items appear in
the Balance Sheet of a company as per Revised Schedule VI Part I of
the Companies Act 1956:
[1]
1 (i) Debentures; (iii) Calls-in-advance
2 (ii) Loose tools;
Q23.[3]
1 (i) Compute Debtors Turnover Ratio form the following information:
Total Sales Rs. 5,20,000, Cash Sales 60% of the Credit Sales, Closing
Debtors Rs. 80,000, Opening Debtors are 3/4th of Closing Debtors.
2 (ii) Current liabilities of a company are Rs. 1,60,000. Its Liquid ratio is
1.5:1 and Current ratio is 2.5:1. Calculate Quick assets and Current
assets.
Q24. From the following statement of Profit and Loss of Moontrack Ltd., for the
years ended 31st March 2011 and 2012, prepare a Comparative Statement
of Profit and Loss. [4]
Particulars Note No. 2011-12 2010-
(Rs.) 11(Rs.)
Revenue from operations 40,00,000 24,00,000
Other Incomes 24,00,000 18,00,000
Expenses 16,00,000 14,00,000
Q25. Following are the Balance Sheets of Krishtec Ltd. for the year ended 31 st March
2011 and 2012:
[6]
Particulars 2011-12 2010-11
(Rs.) (Rs.)
I. Equity and Liabilities
(1) Shareholders Funds:
(a) Share Capital 12,00,000 8,00,000
Reserv an
(b) Surplus (Profit 3,50,000 4,00,000
e d
and Loss Balance)
(2) Non Current Liabilities:
Long term borrowings 4,40,000 3,50,000
(3) Current Liabilities:
89
DELHI PUBLIC SCHOOL Assignment Booklet Indirapuram, Ghaziabad (Class -XII : ACCOUNTS)
Trade Payables 60,000 50,000

Total 20,50,000 16,00,000
II. Assets (1) Non-Current Assets: (a) Fixed
Assets: (i) Tangible Assets (2) Current Assets:
(a) Inventories (b) Trade Receivables (c) Cash
& Cash equivalents
12,00,000 9,00,000
2,00,000 1,00,000
3,10,000 2,30,000
3,40,000 3,70,000
Total 20,50,000 16,00,000
Prepare a Cash Flow Statement after taking into account the following adjustments:
1 (i) The company paid interest Rs. 36,000 on its long term borrowings.
2 (ii) Depreciation charged on tangible fixed assets was Rs. 1,20,000.
Practice Paper
3 General Instructions
1 (i) Attempt all the parts of a question together.
2 (ii) Marks are indicated against the question.
=============================================================================
PART A Accounting for Partnership firms
and Companies
Q.1. Reconstitution of partnership firm includes:
[1]
1 (i) change in profit sharing (iii) retirement of a partner ratio (iv) all the
above
2 (ii) admission of a partner
Q.2. What type of asset is Goodwill?

[1]
1 (i) Current assets (iii) Non-current tangible
2 (ii) Non-current intangible assets
(iv) Cash & cash equivalents

assets
Q.3. Identify the situation in which Securities Premium Reserve cannot
be applied:
[1]
1 (i) To buy its equity shares
2 (ii) To issue bonus shares
(iii) To pay dividend

(iv) To write off premium on redemption of debentures
Q.4. On dissolution of a firm, bank overdraft is transferred to _______
[1]
1 (i) Cash account (iii) Realization account
2 (ii) Bank account (iv) Partners Capital account
Q.5. Sonu, Abu and Charu were partners sharing profits in the ration of
1/2, 3/10 and 1/5. Sonu retired from the firm. Calculate gaining
ratio of Abu and Charu.
[1]
(i) 2:1 (ii) 1:1 (iii) 2:3 (iv) 3:2
Q.6. HM Ltd issued 2,000, 12% debentures of Rs. 100 each on 1-4-12.
The issue was fully subscribed. According to the terms of issue,
interest on the debentures is payable half-yearly on 30 th Sept and
31st March. Pass journal entries related to the debenture interest
for the half-yearly ending 31-3-13 and transfer of interest to the
statement of profit and loss. [3]
Q.7. Mona, Nisha and Poonam are partners in a firm. They contributed
Rs. 50,000 each as capital three years ago. At that time Poonam
agreed to look after the business as Mona and Nisha were busy.
The profits for past 3 years are Rs. 15,000; Rs. 25,000 and Rs.
50,000 respectively. While going through the books of accounts
mona noticed that the profit had been distributed in the ratio of
1:1:2. Being enquired, Poonam told that since she looked after
the business, she should get more profit. Mona disagreed and it
was decided to distribute profit equally retrospectively for the
last 3 years. [2+1=3]
1 (i) Pass necessary adjustment entry.
2 (ii) Identify the value which was not practiced by Poonam.
Q.8. Tanuja Ltd has an outstanding balance of Rs. 5,00,000, 7%

debentures of Rs. 100 each redeemable at a premium of 10%.
According to the terms of redemption, the company redeemed
30% of the above debentures. Record the entries for redemption
of debentures in the books of Tanuja Ltd. [3]
Q.9.
[4]
(i) Green Valley Ltd. offered 5,00,000 shares to public for subscription.
Applications were received for 7,50,000 shares and pro rata
allotment was made to the applicants of 6,00,000 shares. Arushi
applied for 4,800 shares and Navya was allotted 3,000 shares.
From the above information, calculate:
1 (a) How many applications have been rejected altogether?
2 (b) What is the pro rata ratio?
3 (c) How many shares were allotted to Arushi?
4 (d) How many shares were applied by Navya?
(ii) Which value has been affected by rejecting the 1,50,000
applications.
Q.10.Nandan, John and Rosa are partners sharing profits in the ratio of
4:3:2. On 1st April 2012, John gave a notice to retire from the firm.
Nandan and Rosa decided to share future profits in the ratio of
1:1. The capital accounts of Nandan and Rosa after all
adjustments showed a balance of Rs. 43,000 and Rs. 80,500
respectively. The total amount to be paid to John was Rs. 95,500.
This amount was to be paid by Nandan and Rosa in such a way
that their capitals become proportionate to their new profit
sharing ratio. Pass necessary Journal entries in the books of the
firm for the above transactions. Show your working clearly.
[4]
Q.11. Aruna and Barkha are partners in a firm sharing profits in the
ratio of 7:5. On April 1, 2010 they admit chandrika as a new
partner for 1/6th share. The new ratio will be 13:7:4. Chandrika
contributed the following assets towards his capital and for her
share of goodwill: Stock Rs. 60,000; Debtors Rs. 80,000; Land Rs.
2,00,000; Plant and Machinery Rs. 1,20,000. On the date of
admission of chandrika, the goodwill of the firm was valued at Rs.
7,50,000. Record necessary journal entries in the books of the
firm on Chandrikas admission and prepare Chandrikas capital
account. [4]
Q.12. The Balance Sheet of Sindhu, Rahul and Kamlesh, who were
sharing profits in the ratio of 3:3:4 respectively, as on 31 st March
2012 was as follows: [6]
Liabilities Amount(Rs. Assets Amount
) (Rs.)
General Reserve Bills 10,000 Cash Stock 32,000
Payable Loan Capitals: 20,000 Investments 88,000
Sindhu 1,20,000 Rahul 24,000 Land and 94,000
1,00,000 Kamlesh 80,000 3,00,000 Building 1,20,000
Sindhus Loan 20,000
3,54,000 3,54,000
Sindhu died on 31st July 2012. The partnership deed provided for
the following on the death of a partners:
1 (i) Goodwill of the firm be valued at two years purchase of average
profits for the last three years which were Rs. 80,000.
2 (ii) Sindhus share of profit till the date of his death was to be calculate
on the basis of sales. Sales for the year ended 31 st March 2012 amounted
to Rs. 8,00,000 and that from 1st April to 31st July 2012 Rs. 3,00,000. The
profit for the year ended 31st March 2012 was Rs. 2,00,000.
(iii)Interest on capital was to be provided @ 6% p.a.

(iv) According to Sindhus will, the executors would donate his share to
Maitri Chhaya an orphanage for girls.
Prepare Sindhus Capital Account to be rendered to his executor.
Also identify the value being highlighted in the question.
Q.13. Ali, Bimal and Deepak are partners in a firm. On 1 st April, 2011
their capital accounts stood at Rs. 4,00,000, Rs. 3,00,000 and Rs.
2,00,000 respectively. They shared profits and losses in the
proportion of
5:3:2. Partners are entitled to interest on capital @ 10% per
annum
and salary to Bimal and Deepak @ Rs. 2,000 per month and Rs.
3,000 per quarter respectively as per the provision of the
partnership deed. Bimals share of profit (excluding interest on
capital but including salary) is guaranteed at a minimum of Rs.
50,000 p.a. Any deficiency arising on that account shall be met by
Deepak. The profits of the firm for the year ended 31st March,
2012 amounted to Rs. 2,00,000. Prepare Profit and Loss
Appropriation Account for the year ended on 31st March, 2012. [6]
Q.14.Pass necessary journal entries for the following transactions in
the books of Krishna Ltd.
[6]
1 (i) Purchased furniture for Rs. 2,50,000 from M/s Gopal. The payment
was made by issuing equity shares of Rs. 10 each at a premium of 25%.
2 (ii) Purchased a running business from Aman Ltd. for a sum of Rs.
15,00,000. The payment of Rs. 12,00,000 made by issue of fully paid
equity shares of Rs. 10 each and balance by a bank draft. The assets and
liabilities consisted of:
Plant Rs. 3,50,000; Stock Rs. 4,50,000; Land & Building Rs.
6,00,000; Creditors Rs. 1,00,000.
Q.15. Sudarshan 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:
[8] On application and allotment Rs. 8 per share
(including premium Rs. 3). Balance including premium on the first
and final call. 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 (i) Applicants for 80,000 shares were allotted 60,000 shares; and
2 (ii) Applicants for 60,000 shares were allotted 40,000 shares.
Excess application and allotment money could be utilized for calls.

X, who belonged to the first category and was allotted 300
shares, failed to pay the first call 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
necessary Cash-Book and Journal entries.
OR
Give Journal entries for forfeiture and reissue of shares:
1 (i) X Ltd. forfeited 600 shares of Rs. 10 each Rs. 7 called up on which
Mahesh has paid application and allotment money of Rs. 5 per share. Of
these, 400 shares were re-issued to Naresh as fully paid up for Rs. 6 per
share.
2 (ii) X Ltd. forfeited 500 shares of Rs. 10 each (Rs. 6 calledup) issued at
a discount of 10% to Ram on which he has paid Rs. 3 per share. Out of
these 300 shares were re-issued to Z as Rs. 8 paid up for Rs. 6 per share.
(iii) X Ltd. forfeited 1,000 shares of Rs. 10 each issued at 10% premium
to Shyam (Rs. 9 called up) on which he did not pay Rs. 3 of allotment
(including premium) and first call of Rs. 2. Out of these, 600 shares
were re-issued to Ram as fully paid up for Rs. 8 per share.
Q.16.On 1-1-1988, X, Y and Z started business sharing profits and
losses in
3:2:1 ratio. Inspite of repeated reminders by the authorities, they
kept dumping hazardous material into a nearby river. They
contributed Rs. 1,00,000, Rs. 80,000 and Rs. 40,000 respectively
as their capital which was deposited into Bank. Each Partner
withdrew Rs. 15,000 during the year. The firm was dissolved on
31st December, 1988. X took up the stock at an agreed price of Rs.
25,000. Y took up furniture at RS. 5,000 and Z took up debtors at
Rs. 18,500. Creditors were paid off and then remained a balance
of Rs. 14,000 in the Bank Account. Prepare the necessary
accounts to show the distribution of cash at Bank and of the
further cash brought in by any of the partners. Also identify the
value not followed in the Question.
[8]
OR
Ram and Shyam are partners sharing profits in the ratio of 3:1.
They admitted Mohan, a handicapped unemployed engineering
graduate as a partner. Their Balance Sheet on 31-3-09 was as
follows:
BALANCE SHEET
Liabilities Amount(Rs. Assets Amoun
) t
Creditors Employees 2,800 1,200 Cash at Bank Debtors 6,500 2,000
Provident Fund General 2,000 10,000 Less: Prov. for D/D 500 Stock 6,000
Reserve Capitals: Ram 6,000 Investments 3,000
Shyam 4,000 5,000
16,000 16,000
They decided to admit Mohan on April 1 st 2009 for 1/5th share on the
following terms:
(i) Mohan shall bring Rs. 6,000 as his share of premium.
95
(ii) That unaccounted accrued income of Rs. 100 be provided for.

(iii) The market value of investments was Rs. 4,500.
1 (iv) A debtor whose dues of Rs. 500 was written off as bad debts paid Rs. 400
in full settlement.
2 (v) Mohan to bring in capital to the extent of 1/5th of the total capital of the
new firm.
Prepare Revaluation A/c, Partners Capital

A/cs and the Balance Sheet of the new
firm. Also, identify the values observed in
this question. Part B (Analysis of
Financial statement)
Q.17. Which of the following will be an Investing Activity for a Mutual
Fund Company?
[1]
1 (i) Dividend received on (iii) Issuing 9% Debentures investments (iv)
Purchase of computer
2 (ii) Dividend paid
Q.18. You are a long term creditor of A Ltd. What will be your area of
interest while analyzing financial statements?
[1]
1 (i) Liquidity (iii) Profitability
2 (ii) Solvency (iv) None of the above
Q.19. Which ratio is calculated to judge the solvency of the company?

[1]
1 (i) Debt Equity ratio (iii) Quick Ratio
2 (ii) Current Ratio (iv) Inventory Turnover Ratio
Under what heads and sub-heads the following items will appear in
the Balance Sheet: [3]
1 (i) Security deposits for telephones
2 (ii) Employees earned leave payable on retirement
(iii) Uncalled liabilities on Partly paid shares.
Q.19. From the following Statement of Profit and Loss for the year
ended 31-3-13. Prepare a Comparative Statement of Profit and
Loss of Y Ltd. :
[4]
Particulars No 201213 201112
.
Revenue from 20,00,00 15,00,00
Operations Other 0 4,00,000
Income Expenses 10,00,00 15,00,00
0 0
21,00,00
0
Rate of Income Tax 50%.

Q.20. [2+2=4]
96
1 (i) Compute Working Capital Turnover Ratio from the following

information: Cash Revenue from Operations Rs. 1,30,000; Credit Revenue
from Operations Rs. 3,80,000; Revenue from Operations Returns Rs.
10,000; Liquid Assets Rs. 1,40,000; Current Liabilities Rs. 1,05,000 and
Inventory Rs. 90,000.
2 (ii) Calculate Debt-equity Ratio from the following information: Total
Assets Rs. 3,50,000; Total Debt Rs. 2,50,000 and Current Liabilities Rs.
80,000.
Q.21. Prepare Cash Flow Statement on the basis of the information

given in the balance sheet of ABC Ltd., as at 31.03.2012 and
2011. [6]
31-3- 31-3-
Note
Particulars 2012 2011
No.
(Rs.) (Rs.)
EQUITY AND LIABILILITES (1) Shareholders
funds (a) Share Capital (b) Reserves and Surplus
(2) Non Current Liabilities Long Term
Borrowings (3) Current Liabilities Trade Payable
12
70,000 60,000
44,000 8,000
50,000 50,000
25,000 9,000
Total 1,89,000 1,27,000
ASSETS Non Current Assets (a) Fixed Assets (i)
Tangible Assets (b) Non Current Investments
Current Assets (a) Current Investments
(Marketable) (b) Inventories (c) Cash and Cash
equivalents
98,000 84,000
16,000 6,000
18,000 20,000
49,000 12,000
8,000 5,000
Total 1,89,000 1,27,000
Notes to Accounts
Particulars 31.3.201 31.3.201
2 (Rs.) 1 (Rs.)
1. Reserves and Surplus General Reserve Surplus
i.e. Balance in statement of Profit & Loss 30,000 20,000
14,000 (12,000)
44,000 8,000
Additional information
(i) Depreciation provided on tangible assets (Machinery) during the year
Rs. 8,000.
Indirapuram, Ghaziabad (Class -XII : ACCOUNTS)
(ii) Interest paid on debentures of Rs. 5,000.
HALF YEARLY EXAMINATION
Q.1. A and B are partners with capital of Rs. 5,00,000 and 3,00,000
respectively. Interest payable on capital was 10% p.a. Find
interest on capital for both partners when the profit earned by
the firm is Rs. 48,000. [1]
1 (i) 50,000 and 30,000(iii) no interest will be paid
2 (ii) 30,000 and 18,000(iv) none of the above
Q.2. Simran and Reema are partners sharing profit and losses in the
ratio of 2:1. They acquired a running business with assets and
liabilities valued at Rs. 5,00,000 and Rs. 3,00,000 paying a
consideration of Rs. 4,00,000. The accountant debited the
difference of Rs. 2,00,000 to goodwill account. Is he correct in
doing so? Why?
[1]
Q.3. A and B are partners sharing profit in the ratio of 3:2. Their
capital are Rs. 60,000 and Rs. 40,000. They admit C, a new
partner, who will get 1/6th share in the profit of the firm. C brings
in Rs. 25,000 as capital. What is the value of hidden Goodwill?
[1]
(i) 30,00 (ii) 25,00 (iii) 15,00 (iv) 10,00 000
0
Q.4. Gaining ratio is the difference between:
[1]
1 (i) new profit sharing ratio and old profit sharing ratio.
2 (ii) new profit sharing ratio and sacrificing ratio.
(iii) new capital ratio and old capital ratio.

Q.5. Mona, Nisha and Priyanka are partners in a firm. They contributed
Rs. 50,000 each as capital three ago. At that time Priyanka
agreed to look after the business as Mona and Nisha were busy.
The profits for the past three years were Rs. 15,000, Rs. 25,000
and Rs. 50,000 respectively. While going through the books of
accounts Mona noticed that profit has been distributed in the
ratio of 1:1:2. When she enquired from Priyanka about this,
Priyanka answered that since she looked after the business she
should get more profit. Mona disagreed and it was decided to
distribute profit equally, retrospectively for the last three years.
[3]
(i) You are required to make necessary corrections in the books of
accounts of Mona, Nisha and Priyanka by passing an adjustment
entry.
last five years. These profits were:

[4]
Year 2010 2011 2012 2013 2014
Profits 3,00,000 7,00,000 10,00,000 14,00,000 12,00,000
(loss)
On 1st January, 2014, a car purchased for Rs. 2,00,000 was by
mistake debited to travelling expenses. Depreciation chargeable
thereon is @ 25% P.a. Calculate the value of goodwill after
adjusting the above.
Q.9. B, C and D were partners in a firm sharing profit in the ratio of

5:3:2. On 31st March, 2014, their Balance Sheet was as follows:
[4]
Creditor Bills 43,000 Cash Stock 10,200
Payable General 17,000 Debtors Land and 24,500
Reserve Capital 70,000 Building Profit and 27,300
A/c B 40,000 C 1,42,000 Loss A/c 1,40,000
50,000 D 52,000 70,000
2,72,000 2,72,000
B died on 30th June, 2014. The partnership deed provided for the following
on the death of a partner.
1 (i) Goodwill of the firm was to be valued at 3 years purchase of the
average profit of last 5 years. The profit for the years ended 31 st March,
2013, 2012, 2011 and 2010 were Rs. 70,000, Rs. 60,000, Rs. 50,000 and
Rs. 40,000 respectively.
2 (ii) Bs share of profit or loss till the date of his death was to be
calculated on the basis of the net profit or loss for the year ended 31 st
March, 2014.
(iii) According to Bs will, the executors should donate his share to An

old Age home.You are required prepare Bs Capital Account.
Q.10.A, B and C were partners in a firm. On 1 st April, 2012, their fixed
capitals stood at Rs. 50,000, Rs. 25,000 and Rs. 25,000
respectively as per the provision of partnership deed.
[6]
1 (i) C was entitled for a salary of Rs. 5,000 p.a.
2 (ii) All the partners were entitled to interest on capital at 5% p.a.
(iii) Profits were to be shared in the ratio of capitals Net profit for the
year ended 31st March, 2013 of Rs. 33,000 and 31st March, 2014 of
Rs. 45,000 was divided equally without providing for the above
terms. Pass an adjustment Journal entry to be rectify the above error.
Q.11. [2+4=6]
1 (i) A and B are partners sharing profit in the ratio 5:4. They admit C for
1/3rd share, which he acquires in equal proportion from both. Find new
profit sharing ratio and sacrificing ratio.
2 (ii) Saloni and Shrishti were partners in a firm sharing profits in the ratio
7:3. Their capitals were Rs. 2,00,000 and Rs. 1,50,000 respectively. They
admitted Aditi on 1st April, 2013 as a new partner for 1/6th share in future
profits. Aditi brought Rs. 1,00,000 as her capital. Calculate the value of
goodwill of the firm and record necessary journal entries for the above
transaction on Aditis admission.
Q.12. X and Y were partners in a firm sharing profits in the ratio of 2:1.
Their Balance Sheet as on 31st March, 2014 was as follows:
[8]
Liabilities Rs. Asset Rs.
Sundry Creditors 59,000 Cash Debtors 15,000 Less: Prov. 18,250
Capital A/c X 45,000 for D/Debts 250 Stock Land and 14,750
27,000 Y 18,000 Building Profit and Loss A/c 32,000
30,000
9,000
1,04,000 1,04,000
Z was admitted to the partnership with effect form 1 st April, 2014 on the following
terms:
1. (i) He will bring Rs. 15,000 as his capital for one fourth share and pay
Rs. 6,000 for goodwill, half of which was to be withdrawn by X and
2. Y.
2 (ii) There is likely to be a claim against the firm for damages, a provision
of Rs. 1,500 was to be made for the same.
(iii) A bill for Rs. 1,300 for electric charges has been omitted, now it is to be
provided for.
1 (iv) A provision for 5% on Debtors was to be created for doubtful debts.
2 (v) Included in Sundry Creditors was an item of Rs. 1,200 which was not
to be paid and therefore had to be written back.
After making the above adjustments, the capital accounts of X and Y were
to be adjusted on the basis of Zs capital. Actual cash was to be
brought in or to be paid off as the case may be. X donated his share
of profit in Prime Minister Relief Fund.
Prepare Revaluation Account, Capital
Account and Balance Sheet on the new
firm. Also identify value. OR
The balance sheet of Madan and Mohan, who share profits and
losses in the ratio of 3:2. On 31st March, 2014 was as follows:
Creditors Workmen 28,000 Cash at Bank Debtors 10,000
Compensation Reserve 12,000 65,000 Less:Prov. for 60,000
General Reserve Capital 20,000 Doubtful debts 5,000 30,000
A/c Madan 60,000 Mohan 1,00,000 Stock Investments 50,000
40,000 Patents 10,000
1,60,000 1,60,000
They decided to admit Gopal, a physically handicap, on 1 st April, 2014 for

1/4th share on the following term:
(i) Gopal shall bring Rs. 20,000 as his share of premium for goodwill.
(ii) That unaccounted accrued income of Rs. 1,000 be provided for.
(iii) The market value of investments was Rs. 45,000.
(iv) A debtor whose due of Rs. 5,000 were written off as bad debt paid
Rs. 4,000 in full settlement.
(v) A claim of Rs. 3,000 on account of workmen compensation to be
provided for.
(vi) Patents were overvalued by Rs. 2,000.
(vii) Gopal to bring in equal to 1/4 th of total capital of the new firm after all
adjustments. Prepare Revaluation Account, Capital Accounts and Balance
sheet. Also identify the value being highlighted in this case.
Q.13. The Balance Sheet of X, Y and Z who were sharing profits in

the ratio
5:3:2 at 31st March, 2014.
[8]
Creditor 50,000 Cash at Bank 40,000
1,00,00
Employees Provident fund 10,000 Sundry Debtors
0
Profit and loss A/c 85,000 Stock 80,000
Xs Capital 40,000 Fixed Assets 60,000
Ys Capital Zs Capital 62,000

33,000
2,80,000 2,80,000
X retired on the same date on the following terms:
1 (i) Goodwill of the firm is to be valued at Rs. 80,000 and Xs share of the
same be adjusted to that of Y and Z who are going to share the future
profits in the ratio of 2:3.
2 (ii) Fixed Assets are to be depreciated to Rs. 57,500.
(iii) Make a provision for Doubtful debts at 5% on debtors.

1 (iv) A liability for claim, included in creditors for Rs. 10,000 is settled at
Rs. 8,000.
2 (v) The amount to be paid to X by Y and Z in such a way that their
capital are proportionate to their profit sharing ratio and leave a balance
of Rs. 15,000 in the Bank Account.
X decided to donate 50% of his share to school. Prepare Revaluation

Account, Partners Capital Accounts and the balance sheet of new firm.
Also identify the value being highlighted in this case.
OR
Following is the balance sheet of Aruna, Karuna and Varuna as at 31 st
March, 2014, who have agreed to share profit and losses in proportion
of their capitals.
Balance Sheet
Liabilities Rs. Asset Rs.
Capitals A/c Aruna Land and Building 2,00,000
2,00,000 Karuna Machinery Closing Stock 3,00,000
3,00,000 Varuna Debtors 1,10,000 Less: 1,00,000
2,00,000 General Prov. for D/Debts 10,000 1,00,000
Reserve Womens 7,00,000 Cash at Bank 1,00,000
Compensation Fund 35,000
Sundry Creditor 15,000
50,000
8,00,000 8,00,000
On 31st March 2014, Aruna desired to retire form the firm and the
remaining partners decided to carry on the business. It was agreed to
revaluate the assets and reassess the liabilities on the following basis:
(i) Land and building to be appreciated by 30%.
104
(ii) Machinery be depreciated by 20%.

(iii) There were bad debts of Rs. 17,000.
1 (iv) The claim on account of workmen compensation was estimated at Rs.
8,000.
2 (v) Goodwill of the firm was valued at Rs. 1,40,000 and Arunas share of
goodwill be adjusted against the capital account of continuing partners
Karuna and Varuna who have decided to share future profits in the ratio of
4:3 respectively.
3 (vi) Capital of the new firm in total will be the same as before the
retirement of Aruna and will be in the new profit sharing ratio.
(vii)Amount due to Aruna be settled by paying Rs. 50,000 in cash and

the balance by transferring to her loan account which will be paid
later on.
Prepare Revaluation Account, Capital Account and Balance Sheet.
Also identify the value being highlighted in this case.
PART B
Q.14. Purchase of fixed assets for cash is an example of:
[1]
1 (i) Cash flow from financing activities.
2 (ii) Cash flow from investing activities.
(iii)Cash flow from operating activities.

(iv) None of the above.
Q.15. Cash receipts from sale of long term investment is shown in the
cash flow statement under:
[1]
1 (i) Cash flow from investing activities.
2 (ii) Cash flow from operating activities.
(iii) Cash flow from financing activities.

(iv) Cash equivalents.
Q.16. How is window dressing a limitation of Financial Statement
Analysis? [1]
Q.17. What is meant by analysis of comparative Balance Sheet?
[1]
Q.18. How are the following items shown while preparing the Balance
Sheet of a company:
[4]
(i) Calls in arrears (ii) Debentures
(iii) Land and Building (vi) Stores and spare parts

1 (iv) Govt. Securities (vii) Forfeited shares account
2 (v) Commission Received in (viii) Live Stock advance
Q.19. From the following information, compute:
[4]
(i) Debt to Equity Ratio
Long-term borrowing 2,00,000
Long-term Provision 1,00,000
Current Liabilities 50,000
Non Current Assets 3,60,000
Current Assets 90,000
(ii) The current ratio of X Ltd. is 2:1. State with reason which of the following
transaction would
(a) Increase (b) Descreas (c) Not e change
1 Included in the trade payables was a bill payable of Rs. 9,000 which was
met on maturity
2 Company issued 1,00,000 equity shares of Rs. 10 each to vendors of
machinery purchased.
Q.20. From the following information taken from state of profit and loss
of Rose products Ltd. for the year ended 31 March, 2014 and
2013. Prepare common size statement of Profit and Loss:
[4]
Particulars 31st March 2014 31st March 2013
Revenue from operations 14,00,000 11,00,000
Other Incomes 4,00,000 3,00,000
Expenses 11,00,000 12,00,000
Rate of Income Tax was 50%.
Q.21. From the following determine the opening inventory and closing
inventory. Inventory Turnover Ratio is 5 times, Revenue from
operations Rs. 2,00,000. Gross profit Ratio 25%. Closing Inventory
is more by Rs. 4,000 than opening inventory.
[4]
Q.22. From the following information, calculate cash flow from
investing activities of X Ltd.
[4]
1 (i) Half of the investments held in the beginning of the year were sold at
10% profit.
2 (ii) Depreciation on fixed assets was 1,00,000 for the year.
(iii) Interest received on investments Rs. 35,000.
(iv) Dividend received on investments Rs. 25,000.
Q.23. From the following balance sheets of Varun Ltd. as at 31/3/15 and
31/3/14. Prepare cash flow statement.
[6]
Particulars Note 313 313
No. 15 14
I EQUITIES AND LIABILILITES
Shareholders funds (i) Share Capital (ii)
Reserve and Surplus Non Current
Liabilities Long term borrowing: Bank 1,50,0 1,25,0
Loan Current Liabilities (i) Trade Payables 00 00
(ii) Short term provision 75,000 60,000
20,000
80,000 70,000
25,000 15,000
123
Total 3,50,0 2,70,0
00 00
II ASSETS Non Current Assets (i) Fixed
Assets (ii) Long term Investments Current
30,000
Assets (i) Cash (ii) Trade Receivables
10,000
(Debtors) (iii) Inventories (Stocks)
1,00,0 20,000
00 15,000
90,000 50,000
1,20,0 98,000
00 87,000
Total 3,50,0 2,70,0
00 00
31/3/1
Notes to Accounts 31/3/15 4
1. Reserve and Surplus Surplus i.e. Balance in
statement of Profit and loss General Reserve
60,000 50,000
15,000 10,000
75,000 60,000
2. Trade Payables Creditor Bills Payable
45,000 50,000
35,000 20,000
80,000 70,000
Additional information:
1 (i) During the year 5,000 depreciation was charged on fixed assets.
2 (ii) Company has paid Rs. 12,000 interim dividend during the year.
(iii) Tax provided during the year Rs. 20,000.

1st Preboard
PART A Accounting for Partnership firms and

Companies
Q.1. Is there any limit on number of partners in a firm?
[1]
Q.2. A, B and C are partners sharing profits in ratio 3:2:1. They agreed to share
profits in ratio 4:3:2 in future. Calculate each partners sacrifice and gain.
[1]
Q.3. How is Deferred Revenue Expenditure treated in the books of accounts at

the time of dissolution of firm?
[1]
Q.4. What is meant by minimum subscription?

[1]
Q.5. X Ltd. made prorata allotment of shares of Rs.50 each issued at par in
ratio 5:4. Ram failed to pay allotment money and his share were forfeited.
3/4th of his forfeited shares were reissued for Rs. 4020 with maximum
permissible discount of Rs. 1980 as fully paid. How many shares have
been allotted to Ram? [1]
Q.6. A, B and C were partners in a firm sharing profits and losses in the ratio
3:2:1. On 1st January, 2014, A died due to heart attack so B and C decided
to admit D, son of A as a partner in the firm at 1/5 th share of profit. On his
date, General Reserve appeared in the balance sheet at Rs. 24,000. It was
decided to keep 25% of general reserve as provision for doubtful debt.
Pass necessary journal entry for recording General Reserve in the books.
New profit sharing ratio of B, C and D was 2:1:1 and identify the value
involved in taking D, son of A as a new partner.
[1]
Q.7. S.S. Ltd. has a paid up share capital of Rs. 60,00,000 and a balance of Rs.
15,00,000 in the securities premium A/c. The company management does
not want to carry over this balance. State the purpose for which this
balance can be utilized? [3]
Q.8. P and Q are partners sharing profits in the ratio of 3:2. P is a nonworking
partner. He contributed Rs. 5,00,000 as capital. Q did not contribute any
capital. The partnership deed provides interest on capital @ 10% p.a. and
salary to Q as Rs. 2,500 p.m. The net profit before
providing interest on capital and salary amounts to Rs. 40,000 for theyear
ended 31st March, 2015.Show the distribution of profit for the year by
preparing a suitableaccount. [3]
Q.9. Moti Ltd. has an authorized capital of Rs. 5,00,000 divided into equity
shares of Rs. 10 each. The company offered for public subscription shares
of Rs. 3,00,000. The issue was fully subscribed. The amount payable on
shares were Rs. 3 on application, Rs. 3 on allotment and balance in two
calls of Rs. 2 each. A shareholder holding 200 shares failed to pay
allotment and share first call. His shares were forfeited. The company did
not make the final call. Show how share capital will be shown in the
balance sheet of the company including notes to accounts as at 31 st
March, 2015. [3]
Q.10.X Ltd. was formed on 1-4-2014 with authorized capital of Rs. 20,00,000
divided into equity shares of Rs. 100 each.
[3]
1 (i) It issued 6000 shares to promoters.
2 (ii) It also purchased Building from Gupta and Co. for Rs. 11,00,000 and
issued shares at premium of 10%. Pass journal entries to record the
transaction.
(iii)X Ltd. decided to give free Tablets worth Rs. 5,00,000 to the
disabled students of nearby schools.State the values involved in
such decisions.
Q.11. Sonika, Monika and Manisha were partners in a firm sharing profits in the
ratio 2:2:1 respectively. On 31st March, 2013 their Balance Sheet was as
follows: [4]
Balance Sheet as on 31st March, 2013
LIABILITIES Rs. ASSETS Rs.
Capitals:-Monika 1,80,000 Sonika Fixed Assets 3,60,000
1,50,000 Manisha 90,000 Reserve Stock Debtors 60,000
Fund Creditors Cash 1,20,000
2,70,000
4,20,000
1,50,000
2,40,000
8,10,000 8,10,000
Monika died on 30th June, 2013. It was agreed between the executors
and the remaining partners that:
1 (i) Goodwill of the firm be valued at 3 years purchase of average profits
for the last 4 years. The average profits were Rs. 2,00,000.
2 (ii) Interest on capital be provided at 12% p.a.
110
(iii) Her share in the profits upto the date of death will be calculated on
the basis of average profits for the last 4 years. Prepare Monikas
capital Accounts as on 30th June, 2013.
Q.12. Compute interest on drawings of Ramesh @ 10% p.a. for the year ended
31st March 2014 if he withdrew Rs. 3,000 pm for first six months in the
beginning of each month and he withdrew Rs. 3,000 pm for the later 6
months at the end of each month. [4]
Q.13.
[6]
1 (i) A business earned average profit of Rs. 1,00,000 during the last few
years. The normal rate of return on capital employed in the similar type of
business is 10%. The assets of business were Rs. 10,00,000 and external
liabilities were Rs. 1,80,000. Calculate the value of Goodwill of the firm by
super profit method, if the goodwill is valued at 2 years purchase of
super profit.
2 (ii) X and Y are partners having capitals Rs. 1,00,000 and Rs. 80,000
respectively. Interest on Capital is allowed @ 6% p.a. Their profit sharing
ratio is 2:3. The profit for the business before providing interest on capital
for the year is Rs. 9,000. Show the relevant account to provide interest on
capital of partners when partnership deed is silent about treatment of
interest on capital.
Q.14.SS Ltd. issued 35,000, 10% Debentures of 100 each. Give journal entries
in the following cases when:
[6]
(i)
1 (a) The debentures were issued at premium of 20%.
2 (b) The debentures were issued as collateral security to bank against a
loan of Rs. 30,000
(ii) Jain Ltd. issued 750, 12% Debentures of Rs. 100 each at a discount
of 10% redeemable at premium of 5%.
Q.15. E and F are Partners in a firm sharing profits in the ratio of 3:2. From the
missing information given below, complete Realisation Account, Partners
Capital Account and Cash Account.
[6]
Dr. Realisation AccountCr.
To Building A/c ,00,000 By Creditors A/c 25,00
0
To Plant A/c 40,000 By outstanding expense A/c 5,000
27,00
To Stock A/c 30,000 By Es Capital A/c (Stock taken
0
40,00
To Debtors A/c 45,000 over) 0
To cash A/c (expenses 7,500 By Fs Capital A/c (Debtors taken

To paid) Fs capital A/c over) By Cash A/c: Plant 30,000
To (creditors) Es capital Building 85,500 By Capital A/c: E
A/c (A/s expenses) 3/5 F 2/5 1,15,5
00
2,52,5 52,500
00
Partners Capital Account

Particulars E F articulars E F
To Realisation A/c (Assets By balance 90,000 25,000
taken over) To Realisation 40,700 b/d By 5,000
A/c (Loss) To Cash A/c (Final Reali satio
Payment) n A/c
(Liability
taken )
95,000 1,45,000 95,000 1,45,000
Cash Account
To balance b/d sset 25,00 B realization A/c (Expense
To Realisation A/c s 0 y paid) Es Capital A/c 86,800
(Arealized) 15,00 B (Final Payment) Fs
0 y Capital A/c (Final
B Payment)
y
40,50 1,40,500
0
Q.16.Modern Ltd. issued prospectus inviting applications for 50,000 shares of Rs. 10
each payable Rs. 3 on application, Rs. 4 on allotment and balance on call.
Applications were received for 65,000 shares and allotment was made as
under: [8]
1 (i) To applicants of 10,000 shares full;
2 (ii) To applicants of 20,000 shares 15,000 shares
(iii) To applicants of 30,000 shares 25,000 shares

(iv) To applicants of 5,000 shares Nil
The shares were fully called and paid up except allotment and call not paid
by those who applied for 2,000 shares under group applying for 20,000
shares. These shares were forfeited and 1,000 shares were reissued at Rs.
8 per share.
1 (a) Show journal entries.
2 (b) Which value has been affected by rejecting the applicants for 5,000
shares? Can there be some better alternative for the same?

OR
X Ltd. issued 2,000 shares of Rs. 10 each at a premium of Rs. 2 per share
payable Rs. 2 on application, Rs. 5 on allotment (including premium) Rs. 3
on first call and Rs. 2 on second call. Applications were received for 3,000
shares and pro-rata allotment was made among applicants for Rs. 2,400
shares. Money overpaid was adjusted on sum due on allotment. R who
was allotted 40 shares failed to pay allotment and first call and his shares
were forfeited. M holding 60 shares failed to pay two calls and his shares
were forfeited after second call. Of the forfeited shares, 80 shares were
reissued to k as fully paid up at Rs. 8 per share, the whole of Rs share
were included.
1 (i) Pass necessary journal entries.
2 (ii) Which value has been affected by the forfeiture of shares of R just
after the share first call? Can there be some better alternative?
Q.17. P and Q are partners in a firm sharing profits and Losses in the ratio of
3:1. Their Balance Sheet as on 31st March, 2014 was as follows:
[8] Balance Sheet as on 31st March, 2014
Creditors Workmen 13,000 Cash Debtors 16,000 Less: 6,000
Compensation Fund 4,000 Prov. for D/D (500) Stock 15,500
Investment Fluctuation 1,000 Investment Goodwill 18,500
Reserve General Reserve 2,000 6,000
Capital A/c: P 16,000 Q 30,000 4,000
14,000
50,000 0,000
R is admitted on 1/5th share in profit on the following terms:

1 (i) Market value of investment is taken as Rs. 4,200
2 (ii) Accrued interest amounts to Rs. 200.
(iii) Provision for doubtful debt was in excess to Rs. 200.

1 (iv) A claim of workmens compensation for Rs. 1,000 be provided.
2 (v) R is to bring Rs. 10,000 as goodwill share.
113
(vi) Total capital of the firm was agreed as Rs. 50,000 to be adjusted in
their profit sharing ratio. R brings his capital in cash but capital of
others partners be adjusted by opening current accounts.
Prepare Revaluation A/c, Capital A/c and the Balance sheet of New firm.
OR
X, Y and Z are partners sharing profits in ratio 2:2:1. X
decided to retire from the firm on 31st March 2014. Their
Balance Sheet stood as under: Balance Sheet
Liabilities Amount Assets mount
Capital A/c: X Freehold Premises Machinery 50,000
40,000 Y 30,000 Z Furniture Stock Sundry Debtors 40,000
30,000 Reserve 24,000 Less: Prov. for D/d 15,000
Bills Payable (1,000) Bank 25,000
1,00,000
Sundry Creditors 23,000
10,000
14,000
12,000
45,000
1,67,000 1,67,000
The other terms agreed were:

1 (i) Freehold premises and stock are to be appreciated by 10%.
2 (ii) Machinery and Furniture are to be depreciated by 10% and 6%
respectively.
(iii) Bad debts is to be increased to Rs. 1,500 and provision for discount be
created at 2%.
1 (iv) A claim for damages Rs. 150 is accepted.
2 (v) Prepaid Insurance Rs. 500 has to be accounted for.
3 (vi) Goodwill is valued at Rs. 20,000 on retirement of x from the firm.
(vii) The continuing partners have decided to adjust their capitals in

their profit sharing ratio 3:2 after retirement of x
new
.
Surplus/deficit, if i their capita Accounts b adju
any,
n l e sted
through current accounts.
Prepare Revaluation Accounts, Partners

Capital Accounts and draw the Balance
Sheet Reconstituted firm. Part B
(Financial statement Analysis)
Q.27. Identify the following into:
[1]
1 (i) Operating Activities(iii) Financing Activities
1 (ii) Investing Activities(iv) Cash equivalents
2 (a) Dividend received by financing company
3 (b) Dividend received by Non-finance Company
Q.28. Give an example of activity which remains financing activity for every
enterprise. [1]
DELHI PUBLIC SCHOOL Assignment Booklet (Class -XII :
Indirapuram, ACCOUNTS)
Ghaziabad
Q.29. [4] th head presente an

(i) List e major s which are d under Equity d
Liabilities in the balance sheet of a company as per schedule III part I to the companies
act 2013.
(ii) What is the importance of analysis of financial statements from the point
of view of employees and trade union?
Q.30. From the following statements of profit and loss of Delta Ltd. for the year
ended 31st March, 2014 and 2015, prepare common size Income
statement. [4]
Particulars Note 2015 2014

No. (Rs.) (Rs.)
I Revenue from Operations (sales) II 18,00,000 15,00,000
Expenses: Purchase of stock in trade 11,00,000 8,40,000
Change in inventories of stock in trade (40,000) 60,000
Employees Benefit Expenses 1,00,000 80,000
Depreciation and Amortization 80,000 70,000
Expenses Other Expenses 1,15,000 1,00,000
Total 13,55,000 11,50,000

III Profit (I II) 4,45,000 3,50,000
Q.31. A companys inventory turnover ratio is 5 times. Stock at the end is Rs.
20,000 more than that at the beginning. Revenue from operations i.e.
sales are Rs. 8,00,000. Rate of gross profit on cost is , current liabilities
Rs. 2,40,000 and Acid Test Ratio is 0.75:1. Calculate current Ratio. [4]
Q.32. Prepare Cash Flow Statement on the basis of the information given in the
Balance Sheets of ABC Ltd. as at 31.3.2012 and 2011.
[6]
Particulars Note No. 31314 31313
I EQUITIES AND LIABILITIES
Shareholders funds
10,00,00
(a) Share Capital 14,00,000
0
(b) Reserves and Surplus Non-current 5,00,000 4,00,000
Liabilities
Long term borrowings 1 6,00,000 2,00,000
Current Liabilities
Short term provisions 2 80,000 60,000

Total 25,80,000 16,60,000
II ASSETS Non Current Assets (a) Fixed
Assets (i) Tangible Assets (ii) Intangible
Assets Current Assets (a) Inventories (b)
Trade Receivables (c) Cash and Cash
equivalents 34 16,00,000 9,00,000
1,40,000 2,00,000
2,50,000 2,00,000
5,00,000 3,00,000
90,000 60,000
Total 25,80,000 16,60,000
Notes to Accounts:
Particulars 31.3.2012 31.3.2011

1. Long Term Borrowing 9% Public deposit
6,00,000 2,00,000
2. Short term Provisions Prov. for tax
80,000 60,000
3. Tangible Fixed Assets: Machinery
16,00,000 9,00,000
4. Intangible Assets: Goodwill
1,40,000 2,00,000
(i) Depreciation provided on fixed tangible assets (Machinery Rs.

2,00,000).
(ii) Interest paid on deposits Rs. 45,000.
2nd Preboard
PART A Accounting for Partnership firms and
Companies
Q.1. A, B and C were partners in a firm sharing profits in the ratio of 5:3:2. On
1st January, 2015 they admitted E as a new partner for 1/10 th share in the
profits. On Es admission, the profit and loss account of the firm was
showing a debit balance of Rs. 40,000 which was credited by the
accountant of the firm to the capital accounts of A, B and C in their profit
sharing ratio. Did the accountant give correct treatment? Give reason in
support of your answer.
[1]
Q.2. Z ltd forfeited 50 shares of Rs. 100 each issued at 10% premium on which
allotment money of Rs. 30 per share (including premium) and first call of
Rs. 30 per share were not received and the second and final call of Rs. 20
per share was not yet called. 20 of these shares were re-issued as Rs. 80
paid-up for Rs. 70 per share. With what amount will the share capital
account be debited on forfeiture? [1]
Q.3. How is the gain (profit) on re-issue of shares dealt with?

[1]
Q.4. From the amount payable to the legal representative of the deceased
partner, state any two deductions which need to be made.
[1]
Q.5. How will goodwill account appearing in the balance sheet be treated in
case of dissolution of the firm?
[1]
Q.6. Accountant of the firm has debited interest on partners loan to the profit
and loss appropriation account and credited it to the partners capital
account. Is the accountant correct in doing so? Give reason.
[1]
Q.7. Complete the following Journal entries:

[3]
Dat Particulars L.F. Dr. (Rs.) Cr. (Rs.)
e
(i) Plant & Machinery A/c Dr. Building A/c 4,00,000
S.Debtors Stock A/c Bank A/c To S. 4,00,000
Creditors A/c To M/s Maheshwari 3,00,000
Brothers To Capital Reserve A/c 5,00,000
Dr. Dr. Dr. 2,00,000
Dr.
2,00,000
13,00,000
(ii) (Being the assets and liabilities taken over)

To --------
To --------
(Being
the
payment
made to
M/s.
Mahesh
wari
Brothers
by issue
of
10,000,
10%
debentur
es of Rs.
100 each
at a
premium
of 30%)
Q.8. Complete the following Journal entries:

[3]
Dat Particulars L.F. Dr. (Rs.) Cr. (Rs.)
e
(i) Share Capital A/c Dr. To forfeited shares A/c To 200
Share Allotment A/c To Share First Call A/c (Being
the forfeiture of 100 shares Rs. 9 called up, on
which allotment money of Rs. 3 and first call money
of Rs. 4 have not been received)
300
(ii) Dr. Dr. To
--------
(Being
the
reissue
of 100
shares
fully paid
up at Rs.
8)
(iii) Share
forfeited
A/c Dr. To
Capital
Reserve
Q.9. P, Q and R are partners in a firm. They contributed Rs. 50,000 each as
capital three years ago. At that time, R agreed to look after the business
as P and Q were busy. The profits for the past three years were Rs. 15,000,
Rs. 15,000 and Rs. 50,000 respectively. While going through the book of
accounts, P noticed that the profit had been distributed in the ratio of
1:1:2. When she enquired from R about this, R answered that since she
looked after the business she should get more profit. P disagreed and it
was decided to distribute profit equally retrospectively for the last three
years. [3]
1 (i) You are required to make necessary correction in the books of
accounts of P, Q and R by passing an adjustment entry.
2 (ii) Identify the value which was not practiced by R while distributing
profits.
Q.10. On 1st April, X ltd. granted 10,000 employees stock options at Rs. 40,
when the market price of the share was Rs. 130 and the face value of a
share is 10. The options were to be exercised between 15 th March and 31st
March, 2015. On 18th March, 2015, the employees exercised their option
for 9,000 shares only. On the same date the company also issued 12%
debentures of Rs. 100 each at a premium of 10% in full settlement of
purchase consideration of Rs. 5,50,000 to Y Ltd. These debentures are
redeemable at a premium of 5%. Give necessary journal entries of X Ltd.
on 18.3.2015. [3]
Q.11. A and B decided to start a partnership firm to manufacture low cost jute
bags as plastic bags were creating many environmental problems. They
contributed capitals of Rs. 1,00,000 and Rs. 50,000 on 1 st April, 2012 for
this. A expressed his willingness to admit C as a partner without capital,
who is specially abled but a very creative and intelligent friend of his. B
agreed to this. The terms of partnership were as follows:
[4]
1 (i) A, B and C will share profits in the ratio 2:2:1.
1. (ii) Interest on capital will be provided @ 6% per annum. Due to
shortage of capital, A contributed Rs. 25,000 on 30 th September, 2012
and B contributed Rs. 10,000 on 1st January, 2013 as additional capital.
The profit of the firm for the year ended 31st March, 2013 was Rs.
1,68,900.
2. (a) Prepare profit and loss appropriation account for the year
ending 31st March, 2013.
3. (b) Identify any two values which the firm wants to communicate
to the society.
Q.12. D, L and F were partners in a firm sharing profits and losses equally. Their
balance sheet at 31st December, 2010 was as follows:
[4]
Balance Sheetas at 31st December, 2010
Liabilities Amt (Rs.) Assets Amt (Rs.)

Capitals A/cs D 35,000 L 35,000 F Machinery Stock 30,000
35,000 Reserve Sundry Creditors Debtors Cash at 15,000
Bank Cash in hand 47,500
20,000
1,05,000
17,500
15,000
10,000
1,30,000 1,30,000
L died on 14th March, 2011. According to the partnership deed, executors of the
deceased partner are entitled to:
(i) Balance of partners capital account.
(ii Interest on capital @ 5% per annum.
)
119
(iii) Share of goodwill calculated on the basis of twice the average of past
three years profits.
(iv) Share of profits from the closure of the last accounting year till the
date of death on the basis of twice the average of three completed
years profits before death. Profits for 2008, 2009 and and 2010 were
Rs. 40,000, Rs. 45,000 and Rs. 50,000 respectively. Show the
working for deceased partners share of goodwill and profits till the
date of his death.
Prepare Ls capital account to be rendered to his executors.
Q.13.
[6]
(i) Amar, Akbar and Anthony sharing profits and losses in the ratio of
4:3:2, decide to share future profits and losses in the ratio of 2:3:4
with effect from 1st April, 2010.
An extract of their balance sheet as at 31st March, 2011 is as follows:
Liabilites Amt (Rs.) Assets Amt (Rs.)
Workmen Compensation 12,600
Reserve
Show the accounting treatment under the following alternative cases.

Case 1. If there is no claim made against workmens compensation
reserve. Case 2 If a claim on account of workmens compensation is
estimated at Rs. 3,600.
(ii) A and B are partners sharing profits and losses in the ratio of 7:3. A
surrenders 2/10th from his share and B surrenders 1/10th from his
share in favour of C, a new partner. Calculate a new profit sharing
ratio and sacrificing ratio.
Q.14. Prince, Queen and Raja commenced business on 1st January, 2005 with
capitals of Prince Rs. 2,00,000, Queen Rs. 2,00,000 and Raja Rs. 1,00,000.
Profits are shared in the ratio of 4:3:3. Capital carried interest @ 5% per
annum during the year 2005, the firm suffered a loss of Rs. 1,50,000
before allowing interest on capital. Drawings of each partner during the
year were Rs. 20,000. On 31st December, 2005, the partners agreed to
dissolve the firm as it was no longer profitable. The creditors on that date
were Rs. 40,000. The assets realised a net value of Rs. 3,20,000 and the
expenses of realisation were Rs. 7,000. Prepare the realisation account,
partners capital account and cash account alongwith necessary working
to close the books of the firm.
[6]
Q.15.
[6]
1 (i) ABC ltd. issued 25,000 10% debentures of Rs. 100 each as on 1 st
April 2014. Give Journal entries if the debentures were issued at Premium
of 20%.
2 (ii) Leo Ltd had issued 10,000 9% debentures of Rs. 100 each which
were due for redemption on 31st March, 2008. The company has in its
debenture redemption reserve account a balance of Rs. 2,50,000. Record
the necessary journal entries at the time of redemption of debentures.
Q.16. Sun-Moon Ltd invited applications for 12,000 shares of Rs. 100 each to be
issued at a premium of 10% payable as follows:
[8] On application Rs. 25 On allotment Rs. 40 On
first and final call Rs. 35 Applications were received for 10,000 shares and
all of these were accepted. All the money due was received except the
first and final call on 100 shares which were forfeited. 60 of these forfeited
shares were reissued @ Rs. 90 per share credited as fully paid. You are
required to
1 (i) Pass the necessary journal entries.
1. (ii)Prepare the balance sheet of the company.
OR
2. Capricon Ltd was registered with an authorized capital of Rs. 20,00,000

divided in equity shares of Rs. 10 per share. It invited applications for
issuing 1,00,000 equity shares at a premium of Rs. 2 per share. The
amount was payable as follows: On application Rs. 4 per share
(including premium) On allotment Rs. 3 per share Balance on 1 st and
final call. Applications were received for 1,30,000 shares. Applications
for 10,000 shares were rejected and the application money received on
them was refunded. Pro-rata allotment was made to the remaining
applications. Amount overpaid on these applications was adjusted
towards the amount due on allotment. S, who had applied for 1,200
shares, failed to pay the allotment and call money. The company
forfeited his shares, out of which, 800 shares were re-issued to R at Rs.
9 per share fully paid-up. You are required to:
2 (a) Pass the journal entries in the books of the company.
3 (b) Prepare the share allotment account.
Q.17. Aman, Naman and Raman were in partnership sharing profits in

proportion to their capitals. Their balance sheet on 31st March, 2008 was
as follows: [8]
Liabilities Amount Assets mount

Creditors Reserve Capital 15,600 Cash Debtors 20,000 Less: 16,000
A/c: Aman 90,000 Naman 6,000 Prov. for D/D (400) Stock 19,600
60,000 Raman 30,000 1,80,00 Machinery Buildings 18,000
0 48,000
1,00,000
2,01,60 2,01,600
0
On the above date Naman retired owing ill health and the following adjustments
were agreed upon:
1 (i) Buildings be appreciated by 10%.
2 (ii) Provision for doubtful debts be increased to 5% on debtors.
(iii) Machinery be depreciated by 15%.

1 (iv) Goodwill of the firm be valued at Rs. 36,000 and be adjusted into the
capital accounts of Aman and Raman who will share profits in the future in
the ratio of 3:1.
2 (v) A provision be made for outstanding repairs bill of Rs. 3,000.
3 (vi) Included in the value of creditors is Rs. 1,800 for an outstanding
legal claim, which is not likely to arise.
(vii) Out of the insurance premium paid Rs. 2,000 is for the next year. The
amount was debited to profits and loss account.
(viii) The partners decide to fix the capital of the new firm as Rs. 1,20,000 in the
profit sharing ratio.
(ix) Naman to be paid Rs. 9,000 in cash and balance to be transferred
to his loan account. Prepare the Revaluation A/c, partners capital A/c and
the balance sheet of the new firm after Namans retirement.
OR
Radha and Meera were partners
sharing profits equally. Their balance
sheet as at 31st March, 2011 was:
Balance Sheet as at 31st March, 2011
Creditors 1,00,000 Cash in hand 24,000
Bills Payable 30,000 Cash at bank 30,000
Outstanding Expenses 6,000 Sundry Debtors 40,000
Capital A/c: Less: Prov. for D/d (1,000) 39,000
Radha 1,20,000 Stock 40,000
Meera 80,000 2,00,000 Furniture 20,000
Plant and Machinery 36,000
Balance Sheet
as at 31st March, 2008
Building 1,47,000
3,36,000 3,36,000
Meenu is admitted as a partner from 1st April, 2011 on the following terms:
1 (i) Meenu will get 1/5th share in profits and she will bring in Rs. 40,000 as
his capital and Rs. 10,000 as his share of goodwill.
2 (ii) Goodwill brought in by Meenu will be withdrawn by Radha and
Meera.
(iii) The provision for doubtful debts should be brought upto 5% on debtors.
1 (iv) Machinery be depreciated by Rs. 4,000 and furniture by 12.5%.
2 (v) Stock be valued at Rs. 46,000.
3 (vi) Land and building be appreciated by 20%.
(vii)Investment of Rs. 4,000 which did not appear in books should be

duly recorded. Record the necessary journal entries and prepare the
balance sheet of the new firm.
Part B (Financial statement Analysis)
Q.18. XYZ Ltd purchased a building for Rs. 10,00,000 and paid the consideration
by issue of equity shares. The accountant has shown purchase of building
as investing activity and issue of equity shares as financing activity. Is he
correct in doing so? Give reason. [1]
Q.19. Give one transaction which may result into outflow of cash and one which
may result into no flow of cash.
[1]
Q.20
[4]
.
(i) List the items which are shown under the heading current
liabilities as per schedule III Part I of the Companies Act, 2013.
(ii) State any one objective of financial statement analysis.
Q.21 [4]
.
(i) From the following information, calculate inventory turnover
ratio. Revenue from operations Rs. 8,00,000, average
inventory Rs. 1,10,000, gross loss on revenue from operations
is 10%.
(ii) Calculate total assets to debt ratio:
Shareholders funds Rs. 14,00,000, total debts Rs. 18,00,000,
current liabilities Rs. 2,00,000.
Q.22. From the following information, prepare comparative statement of profit

and loss and also calculate net profit ratio.
[4]
Revenue from operations

6,00,000
8,00,000
Other Income
2,00,000
4,00,000
Cost of Material Consumed (% of Operating
50%
60%
revenue)
10%
20%
Other Expenses
30%
30%
Tax Rate
Q.23. From the following balance sheet of Dhan Laxmi Ltd. as at 31 st March,
2012 and 2013, prepare cash flow statement.
[6]
Note N 31st March, 31st March,
Particulars o. 2012 (Rs.) 2013 (Rs.)
I EQUITIES AND LIABILITIES Shareholders

funds (a) Share Capital (b) Reserves and
Surplus Non-current Liabilities Long term 46,000 85,000
borrowings (10% Debentures) 12 24,000 17,000
20,000 18,000
Total 90,000 1,20,000
II ASSETS Non Current Assets Fixed 50,000 70,000

Assets Current Assets (a) Inventories (b) 21,000 25,000
Trade Receivables (c) Cash and Cash 14,000 19,000
equivalents 5,000 6,000
Total 90,000 1,20,000
Notes to Accounts:
31s March, 2012 31s March, 2013
Particulars t
(Rs.) t
(Rs.)
1. Share Capital Equity Share Capital 8%
Preference Share Capital
40,000 6,000 75,000 10,000
46,000 85,000
2. Reserves and Surplus Balance in
Statement of Profit and Loss General Reserve
17,000 7,000 12,000 5,000
24,000 17,000
1 (i) During the year machine costing Rs. 8,000 was sold for Rs. 5,000.
2 (ii) Dividend paid Rs. 8,000.
124
Identify the value shown by the company in paying dividend.
CBSE Board 2013-14 67/3

125
126
127
128
Q.11.
129
130
131
132
133
Q.16.
134
135
137
138
139
140
141
142
143
144
145
147
148
149
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150

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DELHI PUBLIC SCHOOL Assignment Booklet

Indirapuram, Ghaziabad (Class -XII :

1 Accounting for partnership firms fundamentals 35

4 Accounting for Debenture

Part B: Financial Statement Analysis

56 Analysis of Financial Statements. 12 8

MONTH WISE SYLLABUS BREAK UP

Accounting Ratios: Meaning, Objectives and Classification.Types of Ratios:-

(iii) Tools for Financial Analysis :Comparative Statements, Common Size

Unit VI : Statement of Changes in Financial Position

Unit I : Accounting for Partnership Firms -fundamentals

(iii) Final Accounts of Partnership: Fixed vs Fluctuating Capital, Division of Profit

Unit II: Accounting for Partnership firms -Reconstitution and

(iii) Admission of a Partner: Effect of Admission of Partner on change in

Unit II Dissolution of Partnership firms:-Types of dissolution of firm. Settlement of

Q.2. Define Partnership.

Q.3. state any two essential elements/ features of partnership.

Q.4. Why is written partnership agreement preferred?

Q.5. If Partnership deed is silent, how much interest on capital is provided?

Q.7. Why P&L Appropriation A/c is Prepared?

(iii) Interest on drawings of partners at 6% per annum Drawings being

Q.1. What is meant by reconstitution of a Partnership Firm?

Q.3. What type of the asset goodwill is?

Rs.1,00,000)4,00,000(excluding Rs.50,000 Payable on the

Q.1. State the two rights acquired by a newly admitted partner.

Q.3. Define sacrificing ratio in case of admission of a partner.

(iii) All Debtors are good.

Prepare revaluation A/c and Pass Journal entries for treatment of

The terms on admission were as follows:

On 31.12.2001, they decided to admit C for 1/6 th share into partnership.

Liabilities. Rs. Assets Rs.

On that date C is admitted into the partnership on the following

(iii) That Furniture is revalued at Rs.9,000

Record necessary journal entries and prepare revised balance sheet.

Q retired on the same day, following terms were decided:

Liabilities Rs. Assets Rs.

following adjustments were made :

(iii) B to be paid immediately what is due to him.

(a) Rs.6,000 (c) Rs.1,000

Q.11. A, B and C were Partners in a business sharing profits equally, Cretires on

Liabilities Rs. Assets Rs.

DELHI PUBLIC SCHOOL Assignment Booklet

X 75,000 Y 62,500 Z Machinery Stock

1 (i) Goodwill be valued at 2 Years purchase of the average profit of the

R died on 31st March 2002, the following adjustments were made:

Calculate the amount payable to the executors of the deceased

Q.1. What is the Accounting treatment of Partners loan?

Q.3. Explain the meaning of Realisation A/c.

X 1,20,000 Stock 37,000

Q.1. Define share.

On final call Rs. 10

CATEGORY I: Applications for 1,00,000 shares were allotted

Q.1. Why do Companies issue debentures?

Q.5. What is meant by premium on redemption of debentures?

Q.9. Show by the means of journal entries the following cases:

(iii) Z Ltd. Issued 20,000, 12% Debentures of Rs.100 each at premium of

Q.1. What do you understand by financial statements?

Financial Statement Analysis:

Q.3. Name any two tools of financial statement analysis.

Q.6. What do you mean by inter firm comparison?

Balance Sheetas at 31st Dec, 2000 and 2001

Fixed Assets 2. Current 2. 12,00,000 12,00,000