THE INDIAN SCHOOL, KINGDOM OF BAHRAIN

ACCOUNTANCY – PRACTICEE PAPER – 3

1 A and B are partners. A’s share in the divisible profit is Rs.1,25,000. The total interest on partners’ drawings
is Rs.4,000. A’s salary is Rs.4,000 per quarter and B’s salary is Rs.40,000 p.a. The net profit/loss earned
during the year will be?
a) Rs.1,98,000 b) Rs.3,02,000 c) Rs.3,10,000 d) None of these.
OR
A, B, C and D are partners in a firm. They want to expand their business for which additional capital and
more managerial experts are required. For this they want to admit more members in their firm. What is the
maximum number of additional members that can be admitted by them in the firm?
a. 50 b. 100 c. 200 d. 46
2 i) D and E were partners sharing profits and losses in the ratio of 5 : 3. On 1st April, 2023 their capital
accounts showed balances of Rs.3,00,000 and Rs.2,00,000 respectively. Calculate the amount of profit to
be distributed between the partners if the partnership deed provided for interest on capital @10% p.a. and
the firm earned a profit of Rs.45,000 for the year ended 31st March, 2024. The share of profit of D and E
will be:
a. D-Rs.28,125 and E-Rs.16,875 b. D-Rs.3,125 and E-Rs.1,875 (loss) c. D-Rs.30,000 and E-
Rs.15,000 d. D-Rs.27,000 and E-Rs.18,000
OR
ii) Green and Orange are partners. Green draws a fixed amount at the beginning every month. Interest on
drawings is charged 8% p.a. At the end of the year Green’s drawings amounts to Rs.2,600. Monthly
drawings of Green were:
a) Rs.8,000 b) Rs.7,000 c) Rs.60,000 d) Rs.5,000
3 i) In a firm, 10% of net profit after all adjustments, including reserve is transferred to general reserve. Net 1
profit after all adjustments but before transfer to general reserve is Rs.44,000. Amount to be transferred to
reserve is……………….
a. Rs.2,500 b.Rs.4,000 c.Rs.4,400 d. Rs.2.200
ii) Akash Ltd. issued 2,00,000, 6% Debentures of Rs.100 each at certain rate of premium and to be
redeemed at 10% premium. At the time of writing off Loss on issue of debentures, Statement of Profit and
Loss was debited with Rs.8,00,000. At what rate of premium, these debentures were issued?
a. 10% b. 6% c. 16% d. 4%
4 i) Ramesh and Sreejith are sharing profits and losses in the ratio of 3 ; 2. Naufal is admitted with 1/5 th share 1
in the profits of the firm which he gets entirely from Ramesh. Find out the new profit-sharing ratio.
a. 8 : 12 : 5 b. 2 : 2 : 1 c. 2 : 2 : 2 d. 12 : 8 : 5
OR
ii) X and Y are partners in a firm with capital of Rs.18,000 and Rs.20,000. Z brings Rs.10,000 for his share
of goodwill and he is required to bring proportionate capital for 1/3rd share in profits. The capital
contribution of Z will be :
Rs.24,000 b) Rs.18,000 c) Rs.12,667 d) Rs.14,000
5 D, G and P are partners in a firm sharing profits in the ratio of 2 : 2 : 1. G is guaranteed with a minimum
share in the profit of Rs.30,000. During the year ended 31st March, 2021, the firm incurred a net loss of
Rs.60,000. G’s share of profit/loss is short of the guaranteed amount by:
a. Rs.24,000 b. Rs.54,000 c. Rs.6,000 d. none of these
OR
Samsung and Sony were partners in a firm sharing profits and losses in the ratio of 3 : 2. They admitted
Oppo into the firm for 1/5th share of profit and he has been guaranteed with a minimum profit of Rs.30,000
p.a. The Net profit earned by the firm was Rs.75,000. Samsung’s share in the divisible profit will be:
 a) Rs.45,000 b) Rs.40,000 c) 42,000 d) Rs.27,000
6 As per section 52 of the Companies Act, Securities Premium Reserve cannot be utilized for: 1
a. Writing off discount on issue of debentures b. Writing off preliminary expenses c. Issue of fully
paid bonus shares d. Distribution of Dividened
OR
ii) Power Ltd. bought business of Weak ltd. and purchase consideration is decided by net asset value
method. Total assets and liabilities were taken over were Rs.22,40,000 and Rs.4,00,000 respectively.
Rs.4,00,000 was paid in cash and for the balance amount 6% debentures of Rs.100 each were issued at a
premium of 20%. Identify the number of debentures issued:
a. 4000 debentures b. 22, 400 debentures c. 12,000 debentures d. 20,000 debentures
7 i) Roston Ltd. took over machinery costing Rs.1,80,000 of Star enterprises Ltd. at an agreed price of 1
Rs.1,62,000 and payment made to Roston Ltd. by the issue of 6% debentures of Rs.100 each at premium of
20%. The number of debentures issued in favour of the Star enterprise Ltd. will be:
a. 1,800 b. 1,650 c. 1,950 d. 3,600
OR
ii)Debentures that do not carry any charge or security on assets of the company are known as_______.
(a) Registered Debentures (b) Convertible Debentures (c) Unsecured Debentures (d) Secured
Debentures
8 i) JK Ltd. forfeited 500 shares of Rs.10 each issued at a premium of 10% for non-payment of allotment
money of Rs.5 per share (including premium) and first and final call of Rs.3 per share. On forfeiture of
these shares, ‘Share Forfeiture Account’ will be credited with:
a. Rs.7,000 b. Rs.1,400 c. Rs.3,200 d. Rs.2,000
OR
ii) Automotive Ltd. issued 50,000 Equity Shares of Rs.50 each at premium of Rs.5 per share. The amount
was payable Rs.20 on application, Rs.20 (including premium) on allotment and balance on first and final
call. How much minimum application money, the company must receive to allot the shares?
a) Rs.10,00,000 b) Rs.9,00,000 c) Rs.8,00,000 d) Rs.7,00,000
9 i)A, B and C who were sharing profits and losses in the ratio of 4 : 3 : 2 decided to share future profits and
losses in the ratio of 2 : 3 : 4 w.e.f. 1st April, 2023. An extract of their balance Sheet as at 31st March, 2023
is
Workmen compensation Reserve Rs.65,000
At the time of reconstitution, a certain amount of claim on workmen compensation was determined for
which B’s share of loss amounted to Rs.5,000. The claim for workmen compensation would be:
a. Rs.15,000 b) Rs.70,000 c) Rs.50,000 d) Rs.80,000.
OR
ii) P, Q and R are partners sharing profits in the ratio of 5 : 3 : 2. They have admitted S into the partnership
for 1/6th share. Investment Fluctuation Fund appears in the Balance Sheet at Rs.13,500 and Investment
(Cost) at Rs.1,50,000. If the market value of investments is Rs.1,45,000. The amount to be credited with
partners’ capital account will be:
a.Rs.5,000 b. Rs.8,500 c. Rs13,500 d.10,000
10 Assertion (A) : A charitable dispensary run by 10 members is deemed to be a partnership firm.
Reason (R ): For a partnership business, there must be a business and there must be sharing profits among
the partners from such business.
a. Assertion (A) is true, but Reason (R) is false b. Assertion (A) is false, but Reason (R ) is true c. Both
assertion (A) and Reason (R ) are true and Reason (R ) is the correct explanation of Assertion (A) d. Both
assertion (A) and Reason (R ) are true but Reason (R ) is not the correct explanation of Assertion (A)
11 i) M and N were partners with capitals of 40,000 each. They admitted C as a new partner for 1/5th share in
the profits of the firm. C brought Rs.80,000 as his capital. On C’s admission, the Profit and Loss Account
of the firm showed a debit balance of Rs.10,000. Value of goodwill of the firm on C’s admission will be:
a) Rs.2,50,000 b) Rs.2,40,000 c) Rs.2,30,000 d) Rs.4,00,000
 OR
ii) On April 1, 2021 an existing firm had assets of Rs.75,000 including cash of Rs.5,000. The Partner’s
capital account showed a balance of Rs.60,000 and reserve constituted the rest. If the normal rate of
return is 10% and the goodwill of the firm is valued at Rs.24,000 at 4 year’s purchase of super profits.
The average profit of the firm will be:
a) Rs.10,000 b) Rs.5,000 c) Rs.13,500 d) Rs.12,500
12 i)Interest allowed by the company on the amount of calls-in-advance is -----------------------
a. 6% p.a. b. 10% p.a. c. 15% p.a. d. 12% p.a.
OR
ii) RS ltd. forfeited shares of Rs. 100 each issued at a premium of 20% for the non-payment of first call of
Rs.30 per share and final call of Rs.10 per share. The minimum price at which this share can be reissued is:
a. Rs.40 b. Rs.60 c. Rs.20 d. Rs.100
13 i) A, B and C have been sharing profits in the ratio of 8 : 5 : 3. A retires. B takes 3/16th share from A and C
takes 5/16th share from A. The gaining ratio will be:
a. 5:3 b. 1: 1 c. 2 : 1 d. 3 : 5
OR
ii) Navya and Radhey were partners sharing profits and losses in the ratio of 3: 1. Shreya was admitted for
1/5th share in the profits. Shreya was unable to bring her share of goodwill premium in cash. The journal
entry recorded for goodwill premium is given below:
Shreya’s Current A/c Dr. 24,000
To Navya Capital A/c 8,000
To Radhey Capital A/c 16,000 The new profit-sharing ratio will be:
a) 41: 7: 12 b) 13:12: 10 c) 3:1: 1 d) 5:3: 2
14 A, B and C were partners in a firm sharing profits and losses in the ratio of 1/2 : 1/3: 1/6respectively. B
retired and A and C decided to share future profits and losses in the ratio of 3 : 2. Fill in the missing figures
in the following journal entry;
Journal
A’s Capital A/c Dr. …………………..
C’s Capital A/c Dr. 21,000
To B’s Capital A/c …………………
(B’s share of goodwill is adjusted through the
the capital of A and C)
a. Rs.3,000 and Rs.24,000; b. Rs.9,000 and Rs.30,000; c. Rs.11,000 and Rs.40,0000; d. None of
these OR
ii) A, B and C were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. C retired and his
capital balance after adjustments was Rs.2.50,000. C was paid Rs.3,22,000 including his share of goodwill.
The amount credited to C’s capital account, on his retirement, for goodwill be:
a.Rs.72,000 b. Rs.7,200 c. Rs.24,000 d. Rs.36,000
15 i) At the time of dissolution of a firm, firm’s total assets were Rs.5,00,000, creditors were Rs.1,00,000.
Realisation expenses amounted to Rs.10,000. Assets realised 20% more than the book value and creditors
were paid 5% less. Gain/loss on realisation will be:
a) Gain Rs.95,000 b) Loss Rs.75,000 c) Gain Rs.4,95,000 d) Loss Rs.1,00,000
OR
ii) At the time of dissolution of a firm, creditors are Rs.70,000, firm’s capital is Rs.1,20,000. Cash balance
is Rs.10,000. Other assets realised Rs.1,50,000. Gain/Loss in the realisation account will be:
a) Rs.30,000 (gain); b) Rs.40,000 (gain) c) Rs.40,000 (loss) d) Rs.30,000(Loss)
16 i) On the death of a partner, his share in the profits of the firm till the date of death is transferred to the….
a. Debit of P& L A/c b. Credit of P & L A/c c. Credit of His Capital A/c d. Debit of P& L
Suspense A/c OR
ii) A, B and C were partners sharing profit in the ratio of 3 : 2 : 1. B died on 30 th June, 2022. Profit share of
 the deceased partner from the beginning of the financial year was to be estimated based on sales up to the
date of death and profit of the previous year. Net profit earned in the previous year was 20% of net sales.
Net sale for the period ended 30th June, 2022 was Rs.6,00,000. The profit share will be :
a. Rs.35,000 b. Rs.40,000 c.Rs.20,000 d. Rs.60,000
17 Arjun and Krishna are partners sharing profits in the ratio of 2 : 1. Their combined capital on 1 st April 2023 3
was Rs.3,84,000. Interest on capital is agreed @5% p.a. The profits prior to interest on capital but after
charging Krishna’s salary Rs.45,000. Fill in the missing figures in the following accounts as on 31 st March
2024.
Profit and Loss Appropriation A/c for the year ended 31st March 2024

Particulars Rs. Particulars Rs.

Interest on Capital: P& L A/c 57,000
Arjun 12,000
Krishna 7,200 …………
Salary (Krishna): …………
Divisible Profit:
Arju ….. ……….
Krishna …………… ………..
………….. …………….
Partners’ Capital Accounts
Particulars Arjun Krishna Particulars Arjun Krishna
To Balance c/d ……………… Balance b/d ……… ………
Interest on Capital A/c ……….. ……….
Salary A/c ………. ……….
P& L Appropriation A/c ……….. ……….
…………… …………. ……… ……….
OR
ii) A, B and C were partners sharing profits and losses in the ratio of 2 : 3 : 2. On 1st April, 2023 they
decided to change their profit sharing ratio as 2 : 1 : 1. On this date their Balance sheet showed the
following balances General Reserve Rs.40,000; Workmen Compensation Reserve Rs.25,000 (Liability
against this was Rs.11,000); Profit and Loss A/c (Dr. Balance) Rs.4,200. The assets of the firm were
revalued, and they resulted in a gain of Rs.8,400. The partners had decided to distribute all the Reserves
and P&L A/c but to leave the assets at their original amount. Show the effect of the above adjustments in
the books of the partnership firm by passing journal entries.
18 Boss products Ltd. registered with capital of Rs.90,00,000 divided into 90,000 equity shares of 100 each. 3
The company issued prospectus inviting applications for 50,000 shares Rs.100 each payable as Rs.20 on
application, Rs.30 allotment, Rs.20 on first call and balance on second call.
Applications were received for 45,000 shares. Amal to whom 1,500 shares were allotted failed to pay final
call money and these shares were forfeited. Out of these forfeited shares, 500 shares were reissued to Adil,
credited as fully paid for Rs.90 per share.
Present the Share Capital as per Schedule III of Companies Act, 2013. Also prepare notes to Share Capital.
19. i)JK Ltd. invited applications for issuing 7,500, 12% debentures of Rs.100 each at a premium of Rs.35 per 3
debenture. The full amount was payable on application. Applications were received for 10,000 debentures.
The co. made the allotment on pro-rata basis.
OR
ii) Orange Ltd. issued 25,000 shares of Rs.10 each credited as fully paid to the promoters for their services.
It also issued 15,000 shares of Rs.10 each credited as fully paid to the underwriters for their commission.
Give journal entries.
20. Rajesh, Anu and Manu are partners sharing profits in the ratio of 3 ; 2 : 1. On 1 st April 2023 Rajesh gave a
notice to retire from the firm. Anu and Manu decided to share future profits in the ratio of 2 : 3. The capital
 accounts of Anu and Manu after all adjustments showed a balance of Rs.64,000 and 1,00,000 respectively.
The total amount to be paid to Rajesh was Rs.1,23,000. This amount was to be paid by Anu and Manu in
such a way that their capitals become proportionate to their new profit-sharing ratio. Pass necessary Journal
entries for the above transactions in the books of the firm. Show your working clearly.
21 X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2. They decided to share future
profits and losses in the ratio of 2 : 3 : 5 with effect from 1st April , 2023. Following items were appear in
the Balance Sheet as at 31st March, 2023.
General Reserve - Rs.1,50,000; Advertisement Suspense A/c – Rs.1,00,000; Contingency Reserve –
Rs.50,000; Profit and Loss Account (Dr.) – Rs.75,000.
Give an adjustment entry for the above.
22 Fill in the missing information in the journal entries given below:
In the books of Max. Steel Limited
Journal
Date Particulars Dr. Rs. Cr. Rs.
Bank A/c Dr. …………..
To………………………… ………..
(Being application money received on 1,00,000 shares of
Rs.5 per application including Rs. Per premium
Equity Share Application A/c Dr. …………..
To Equity Share Capital A/c …………..
To……………………… …………..
To……………………… 1,25,000
To……………………… …………..
(Being application money adjusted 25,000 application
were rejected and pro-rata allotment was made in the ratio
of 3 : 2 to the remaining applicants. Excess of application
money was adjusted towards Share Allotment A/c)
…………………………… A/c Dr. ………….
To Equity Share Capital A/c …………..
To……………………. …………..

(Being money due on allotment @Rs.5 per share

including Rs.2 for premium)
Bank A/c Dr. ………….
To Equity Share Allotment A/c ………..
(Being amount received on allotment except on 500
shares allotted to Suraj)
…………………………………. A/c Dr. …………..
To Equity Share Capital A/c ……………
To………………………. ……………
(Being First and final call amount due @Rs.5 per share
including Rs.1 for premium)
Bank A/c Dr. ………….
To Equity Share First and Final Call A/c …………..
(Being First and Final Call amount received except shares
held by Suraj and Sumit who applied for 1,500 shares
Share Capital A/c Dr. ……………
…………………………….. A/c Dr. ……………
To………………………….. …………..
To Share First & Final Call A/c …………..
 To…………………………. …………..
(Being shares of Suraj and Sumit forfeited)
………………………….A/c Dr. ………….
To Equity Share Capital A/c ……………
(Being re-issue of 1000 forfeited shares @ Rs.11 per
share fully paid up. These shares included all the shares
held by Suraj)
Shares forfeited A/c Dr. ………….
To Capital Reserve A/c …………..
(Being profit made on forfeited shares transferred to
Capital Reserve A/c
OR
Beta Ltd. invited applications for 40,000 shares of Rs.100 each at a premium of Rs.20 per share. Amount
payable on application Rs.40; on allotment Rs.40 (including premium); on first call Rs.25 and second and
final call Rs.15. Applications were received for 50,000 shares and allotment was made on pro-rata basis.
Excess money on application was adjusted against the sums due on allotment.
Dan to whom 600 shares were allotted failed to pay the allotment money and his shares were forfeited after
allotment. Chris, who applied for 1000 shares failed to pay the two calls and his shares were forfeited. Of
the shares forfeited, 1200 shares were sold to Dev for Rs.85 per share as fully paid, the whole of Dan’s
shares being included.
Record necessary journal entries.
23 Black and White were partners in a firm sharing profits in the ratio of 3 : 1. On 1st April, 2023 their Balance 6
Sheet was as follows:
Liabilities Rs. Assets Rs.
Capitals: Plant and Machinery 4,70,000
Black - 3,00,000 Investments 1,10,000
White - 2,00,000 5,00,000 Debtors 1,20,000
Workmen’s Compensation Fund 60,000 Less: Provision 10,000 1,10,000
Creditors 1,90,000 Stock 1,40,000
Employees’ Provident Fund 1,10,000 Cash 30,000

8,60,000 8,60,000
st th
On 1 April, 2023 they admitted Orange into partnership for 1/4 share in the profits of the firm. Orange
brought proportionate capital and Rs.40,000 as her share of goodwill premium.
The following terms were agreed upon:
a. Provision for doubtful debts was to be maintained at 10% on debtors.
b. Stock was undervalued by Rs.10,000.
c. An old customer whose account was written off as bad debts, paid Rs.15,000.
d. 20% of the investments were taken over by White at Rs.25,000.
e. Claim on account of workmen’s compensation amounted to Rs.70,000.
f. Creditors included a sum of Rs.27,000 which was not likely to be claimed.
Prepare Revaluation Account and Partners Capital Accounts.

1. Sneha, Alka and Megha were partners sharing profits and losses in the ratio of their capitals. Their
Balance Sheet as on 31st March 2023 stood under:
Liabilities Amount Assets Amount
Creditors 30,000 Cash in hand 32,000
Bills Payable 12,000 Debtors 20,000
General Reserve 18,000 Less: Provision (1,000) 19,000
Capitals: Stock 28,000
 Sneha 90,000 Investments 46,000
Alka 60,000 Furniture 25,000
Megha 30,000 Machinery 90,000
2,40,000 2,40,000
On the above date Sneha retired. Goodwill of the firm is valued at Rs.30,000 and is to be adjusted in
the Capital accounts of Alka and Megha who decide to be equal partners in future. Fill in the
missing information in the Revaluation Account, Partners Capital Accounts and the Blance Sheet of
the new firm after Sneha’s retirement.
Revaluation A/c
Particulars Amount Particulars Amount
Provision for debtors A/c ………. Investments 5,000
Machinery A/c ………. ………………. ………….
…………………………. 2,000 Loss transferred:
Sneha’s Capital A/c ………………
Alka’s Capital A/c ………………
Megha’s Capital A/c ………………
…………… …………….

Partners Capital Accounts

Particulars S A M Particulars S A M
Sneha’s Capital A/c ……… ……. Balance c/d ……… ……… ……….
…………………… ……… ……….. ……. ……………… …….. ……….. ………..
Cash A/c 15,000 Alka’s Capital ………
Sneha’s Loan A/c …….. Megha’s ……….
Balance c/d ……….. ………. Capital
………. ………. ………. ………. ………. ……….

Balance Sheet of the firm after retirement as at 31.03.2023

Liabilities Amount Assets Amount
Creditors 30,000 Cash in hand ……….
Bills Payable 12,000 Debtors 20,000
Claim for damages 2,000 Less: Provision (1,500) 18,500
Sheha’s Loan A/c ………. Stock 28,000
Alka’s Capital A/c ………… Investments ……….
Megha’s Capital A/c ………… Furniture 25,000
Machinery 81,000
Prepaid Insurance 2,000

………….. …………
24 Arun, Varun and Karan were partners in a firm sharing profits in the ratio of 4 : 3 : 3. On 31.3.2023, their 4
Balance Sheet was as follows:
Liabilities Rs. Assets Rs.
Creditors 17,000 Cash 8,000
Bills Payable 12,000 Goodwill 9,000
Karan’s Loan 28,000 Bills Receivables 13,000
Capitals: Furniture 27,000
Arun 70,000 Machinery 1,25,000
Varun 68,000 1,38,000 Karan’s Capital 13,000
 1,95,000 1,95,000
On 30.9.2023, Karan died. The partnership deed provided for the following to the executors of the deceased
partner:
a. His share in the goodwill of the firm calculated on the basis of three years purchase of the average
profits of the last four years. The profits of the last four years were: Rs.1,90,000; Rs.1,70,000;
Rs.1,80,000 and Rs.1,60,000 respectively.
b. His share in the profits of the firm till the date of his death calculated on the basis of the average
profits of the last four years.
c. Interest @8% p.a. on the credit balance, if any, in his capital account.
d. Interest on his loan @12% p.a.
Prepare Karan’s Capital Account to be presented to his executors.
25 Tejas Ltd. dealing in manufacture electronics goods decided to manufacture some innovative toys for which 6
it required more of additional funds. Since the company has already raised money through shares equal to
its authorised capital, the company decided to raise the additional funds through issue of Rs.40,00,000; 9%
debentures of Rs.100 each at a discount of 6%, redeemable at a premium of 5% after five years. The
amount was payable as follows:
On Application – Rs.30
On Allotment – The balance amount.
Answer the following questions on the basis of the above information:
(i) Pass journal entry for allotment of debentures.
(ii) Prepare ‘Loss on Issue of Debentures Account.’
(iii) What entry will be passed for writing off the interest on debentures?
OR
ii) On 1st July, 2023 Bhagat ltd. issued 5,000, 10% Debentures of Rs.100 each at a discount of 10%,
redeemable at 5% premium after 5 years. On the same date, Bhagat Ltd. completed the following
transactions also:
a. It purchased business of Swami Ltd. by taking over sundry assets of Rs.4,50,000 and sundry
liabilities of Rs.70,000 for the purchase consideration of Rs.4,80,000. It paid the purchase
consideration by issuing 10% Debentures at 5% discount.
b. The Co. borrowed a loan of Rs.1,00,000 from SBI for 5 years and issued 10% Debentures of
Rs.1,50,000 to Bank as a collateral security.
The interest on debentures is paid half yearly on 30th September and 31st March every year. You are
required to pass the journal entries in the books of Bhagat Ltd. to record the above transactions for the year
ended 31st March 2024 assuming that the company has sufficient balance in its Securities Premium Reserve
Account to write off loss on issue of debentures.
26. Charu, Dhwani, Iknoor and Paavni were partners in a firm. They had entered partnership firm last year 6
only, through a verbal agreement. They contributed Capitals in the firm and to meet other financial
requirements, few partners also provided loan to the firm. Within a year, their conflicts arisen due to certain
disagreements, and they decided to dissolve the firm. The firm had appointed Ms. Kavya, who is a financial
advisor and legal consultant, to carry on the dissolution process. In the first instance, Ms. Kavya had
transferred various assets and external liabilities to Realisation A/c. Due to her busy schedule; Ms. Kavya
has delegated this assignment to you, being an intern in her firm. On the date of dissolution, you have
observed the following transactions:
(i) Dhwani’s Loan of ₹ 50,000 to the firm was settled by paying ₹ 42,000.
(ii)Paavni’s Loan of ₹ 40,000 was settled by giving an unrecorded asset of ₹45,000.
(iii)Loan to Charu of ₹ 60,000 was settled by payment to Charu’s brother loan of the same amount.
(iv)Iknoor’s Loan of ₹ 80,000 to the firm and she took over Machinery of ₹60,000 as part payment.
(v) Charu was deputed to do the dissolution work for a commission of Rs.10,000 and agreed to bear the
dissolution expenses. The actual dissolution expense came at Rs.12,000, paid by Charu.
(vi) The creditors of Rs.90,000 were paid by Rs.40,000 in cash and Investment at Rs.45,000 for the full
 settlement.
You are required to pass necessary entries for all the above-mentioned transactions.
OR
ii) Ashish and Kanav were partners in a firm sharing profits and losses in the ratio of 3:2. On 31st March,
2023 their balance sheet was as follows:
Liabilities Rs. Assets Rs.
Trade Creditors 42,000 Bank 35,000
Employees Provident Fund 60,000 Stock 24,000
Mrs. Ashish’s Loan 9,000 Debtors 19,000
Kanav’s Loan 35,000 Furniture 40,000
Workmen Compensation Fund 20,000 Plant 2,10,000
Investment Fluctuation Reserve 4,000 Investments 32,000
Capitals: Profit and Loss A/c 10,000
Ashish 1,20,000
Kanav 80,000
3,70,000 3,70,000
On the above date, they decided to dissolve the firm.
a) Ashish agreed to take over furniture at Rs.38,000 and pay off Mrs. Ashish’s loan.
b) Debtors realised Rs.18,500 and plant realised 10% more.
c) Kanav took over 40% of the stock at 20% less than the book value. Remaining stock was sold at a
gain of 10%.
d) Trade creditors took over investments in full settlement.
e) Kanav agreed to take over the responsibility of completing dissolution at a n agreed remuneration of
Rs.12,000 and to bear realisation expenses. Actual expenses of realisation amounted to Rs.8,000.
Prepare Realisation Account or Pass Journal entries for the above.
27 There are current liabilities Rs.3,00,000; Current Ratio 3 : 1 and Liquid Ratio 1 : 1 of a company. The value 1
of inventory will be:
a. Rs.1,50,000 b. Rs.4,50,000 c. Rs.3,00,000 d. Rs.6,00,000
28. Dolphin Ltd. purchased machinery of Rs.2,00,000 issuing a cheque of Rs.50,000 and 8% debentures of
Rs.1,50,000. In the cash flow statement, the transaction will be shown as:
a. Outflow under investing activity Rs.2,00,000; inflow under financing activity Rs.1,50,000
b. Outflow under investing activity Rs.50,000
c. Inflow of Rs.1,50,000 as financing activity d. None of the above
29 i) Which of the following transactions does not affect current ratio? 1
a. Credit sale of goods b. Cash sales of goods c. amount received from debtors d. All of these
OR
ii)If Total sales are Rs.2,50,000 and credit sales are 25% of cash sales. The amount of credit sales is:
a. Rs.50,000 b. Rs.2,50,000 c. Rs.16,000 d. Rs.3,00,000
30 i) KK Ltd. a manufacturing co. obtained a loan of Rs.6,00,000, advanced a loan of Rs.1,00,000 and 1
purchased machinery for Rs.5,00,000. Calculate the amount of Cash Flow from financing activities.
a. Cash inflow Rs.5,00,000 b. Cash inflow Rs.6,00,000 c. Cash outflow Rs.5,00,000 d.
Cash outflow Rs.6,00,000 OR
ii) Which of the following transactions will result into flow of cash?
a. Cash withdrawn from bank Rs.20,000 b. Issued Rs.20,000, 9% debentures for the vendors of
machinery c. Received Rs.19,000 from debtors d. Deposited cheques of Rs.10,000 into bank
31 From the following information, prepare Comparative Statement of Profit & loss: 4
Particulars 2022-23 2021-22
 Revenue from Operations 10,00,000 8,00,000
Other Income 2,20,000 1,50,000
Cost of Materials consumed 4,00,000 3,00,000
Change in inventories of finished goods and work in progress 2,00,000 1,00,000
Other Expenses (% of cost of Revenue from Operations) 15% 10%
Tax Rate 30% 30%
32 Under which major headings and sub-headings will the following items be shown in the Balance Sheet of a 3
company as per Schedule III Part I of the Companies act, 2013:
a. Debit balance in Statement of P & L b. Loan repayable on demand c. Capital advances d.
Mining Rights/Software d. Loose Tools & Spare parts e. Bonds/Debentures f. Provision for
employee benefits
33 i) a. From the following details, calculate Interest Coverage Ratio: 4
Net profit after tax Rs.7,00,000; 6% Debentures of Rs.20,00,000 Tax Rate 30%.
ii) b. Calculate the Gross profit Ratio:
Average Inventory Rs.80,000; Inventory Turnover Ratio – 6 times; Selling price – 25% of cost.
OR
Assuming that the Debt to Equity ratio of a company is .50 : 1. State whether this ratio would increase,
decrease or remain unchanged in the following cases:
a. Purchase of fixed assets on a credit of 3 months.
b. Issue of new shares for cash.
c. Purchased machinery and paid to vendors by issue of equity shares.
d. Obtained 8% long-term loan.
34 Prepare a Cash Flow Statement from the following Balance Sheet of Magic Ltd.

Particulars Note 31.03.2023 31.03.2022

No.
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds:
a) Share Capital 32,00,000 27,20,000
b) Reserves and Surplus 4,80,000 6,40,000
2. Non-Current Liabilities”
Long-term Borrowings 3,20,000 1,60,000
3. Current Liabilities:
a) Short term Borrowings 32,000 40,000
b) Trade Payables 80,000 1,60,000
c) Other Current Liabilities 80,000 64,000

41,92,000 37,84,000
II. ASSETS
1. Non-Current Assets
a. Property, Plant and Equipment:
i. Tangible Assets 12,80,000 14,40,000
ii. Intangible Assets 9,60,000 8,00,000
b. Non-Current Investments 4,80,000 4,00,000
2. Current Assets
i. Inventories 1,60,000 -----
ii. Trade Receivables 5,12,000 4,40,000
iii. Cash and Cash Equivalents 8,00,000 7,04,000

41,92,000 37,84,000
 Notes to Accounts:
Particulars 31.03.2023 31.03.2022
1. Reserves and Surplus
Surplus i.e. Balance in Statement of P & L 4,80,000 6,40,000
2. Long-term Borrowings
9% Debentures 3,20,000 1,60,000
3. Other Current Liabilties
Outstanding Expenses 80,000 64,000
4. Intangible Assets
Goodwill 9,60,000 8,00,000

Additional information:
(a) Depreciation of Rs.1,60,000 was provided on Tangible Assets during the year.
(b) A Machine costing Rs. 40,000 (accumulated depreciation provided thereon Rs. 24,000) was sold for
Rs.8,000 during the year.
(c) Debentures has been issued on April 1, 2021.
OR
ii) a. From the following information, calculate cash flows from investing and financing activities:
Particulars 2022 (Rs.) 2023 (Rs.)
Machine at cost 5,00,000 9,00,000
Accumulated Depreciation 3,00,000 4,50,000
Equity Share Capital 28,00,000 35,00,000
Bank loan 12,50,000 7,50,000
In year 2023, machine costing Rs.2,00,000 was sold at a profit of Rs.1,50,000. Depreciation charged on
machine during the year 2023 amounted to Rs.2,50,000.
b. Calculate Cash flows from operating activities from the following information.
Statement of Profit and Loss for the year ended March 31, 2023
Particulars Note No. Amount (Rs.)
i. Revenue from Operations 50,000
ii. Other Income 1 5,000
iii. Total Revenue ( i + ii ) 55,000
iv. Expenses:
Cost of Materials Consumed 15,000
Employees Benefits Expenses 10,000
Depreciation and Amortization Expenses 2 7,000
Other Expenses 3 21,000
53,000
v. Profit before Tax (iii – iv) 2,000

Notes to Accounts:
1. Other Income: Profit on sale of Machinery Rs.2,000 and Income Tax Refund Rs.3,000.
2. Depreciation Rs.5,000 and Goodwill Amortized Rs.2,000.
3. Other Expenses: Rent Rs.10,000; Loss on sale of equipment Rs.3,000 and Provision for Taxation
Rs.8,000.
Additional Information:
April 01, 2022 31st March, 2023
Provision for Taxation 10,000 13,000
Rent Payable 2,000 2,500
Trade Payables 21,000 25,000
Trade receivables 15,000 21,000
Inventories 25,000 22,000