Studymate Solutions to CBSE Board Examination 2018-2019

Series : BVM/1 Code No. 67/1/1

Roll No.

4 Please check that this question paper contains 19 printed pages.

4 Code number given on the right hand side of the question paper should be written on the title page of the answer-book by the candidate.

4 Please check that this question paper contains 23 questions.

4 Please write down the Serial Number of the question before attempting it.

4 15 minute time has been allotted to read this question paper. The question paper will be distributed at 10.15 a.m. From 10.15 a.m. to 10.30 a.m., the students will read the question paper only and will not write any answer on the answer-book during this period.

ACCOUNTANCY[Time allowed : 3 hours] [Maximum marks : 80]

General Instructions:

(i) This question paper contains two parts – A and B.

(ii) Part A is compulsory for all.

(iii) Part B has two options – Analysis of Financial Statements and Computerised Accounting.

(iv) Attempt only one option of Part B.

(v) All parts of a questions should be attempted at one place.

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

Disclaimer: All model answers in this Solution to Board paper are written by Studymate Subject Matter Experts. ThisisnotintendedtobetheofficialmodelsolutiontothequestionpaperprovidedbyCBSE. Thepurposeofthissolutionistoprovideaguidancetostudents.

STUDYmate

2

Part A[Accounting for Partnership Firms and Companies]

1. AtulandNeerawerepartners inafirmsharingprofits in the ratioof3 :2.TheyadmittedMitaliasanewpartner.Goodwillofthefirmwasvaluedat`2,00,000.Mitalibringshershareofgoodwillpremiumof`20,000incash,whichisentirelycreditedtoAtul’sCapitalAccount.Calculatethenewprofitsharingratio.

Ans.Atul :Neera 3:2 Goodwill =` 2,00,000 Mitali’sshare=2,00,000×x=20,000

x=1

10

Atul = − =

−=

35

110

6 110

510

Neera = =

25

410

Mitali = 110

NewRatio=5:4:12. Whatismeantby‘IssuedCapital’?

OR Whatismeantby‘EmployeesStockOptionPlan’?Ans. Issuedcapitalmeanssuchcapitalasthecompanyissuesfromtimetotimeforsubscription–

Section2(50)ofthecompaniesAct2013.OR

ESOPmeansoptiongrantedbythecompanytoitsemployees&employeedirectorstosubscribethesharesatapricethatislowerthanthemarketpricei.e.fairvalue.Itisanoptiongrantedbythecompanybutitisnotanobligationontheemployeetosubscribeit.

3. DifferentiatebetweenDissolutionofpartnershipandDissolutionofaPartnershipFirmonthebasisof‘Court’sIntervention’.

Ans.

Base Dissolution of Partnership Dissolution of FirmCourt’sIntervention Courtdoesnot intervenebecause

partnershipisdissolvedbymutualagreement.

Afirmcanbedissolvedbycourt’sorder.

4. Whatismeantby‘GainingRatio’onretirementofapartner?OR

P,QandRwerepartnersinafirm.On31stMarch.2018Rretired.TheamountpayabletoR`2,17,000wastransferredtohisloanaccount.RagreedtoreceiveinterestonthisamountaspertheprovisionsofPartnershipAct,1932.StatetherateatwhichinterestwillbepaidtoR.

Ans.TheratioinwhichretiringPartner’sShareisdistributedbetweenremainingPartneriscalledgainingratio.

OR Rateofinterestwillbe6%p.a.5. ChhaviandNehawerepartnersinafirmsharingprofitsandlossesequally.Chhaviwithdrew

afixedamountatthebeginningofeachquarter.Interestondrawingsischarged@6%p.a.Attheendoftheyear,interestonChhavi’sdrawingsamountedto`900.Passnecessaryjournalentryforcharginginterestondrawings.

STUDYmate

3

Ans. Date Particulars L.F. Dr. (`) Cr. (`)

ChhaviCapitalA/c Dr. ToInterestonDrawingsA/c(BeingInterestonDrawingsischarged)

900900

6. How are Specific donations treated while preparing final accounts of a ‘Not-For-ProfitOrganisation’?

OR Statethebasisofaccountingofpreparing‘IncomeandExpenditureAccount’ofaNot-For-Profit

Organisation.Ans.Specificdonationistreatedascapitalreceipt&itisshownonliabilitiessideofBalanceSheet.

OR Accrualbasis.7. Thecapital of thefirmofAnujandBenu is`10,00,000and themarket rateof interest is

15%.Annualsalarytothepartnersis`60,000each.Theprofitforthelastthreeyearswere`3,00,000,`3,60,000and`4,20,000.Goodwillofthefirmistobevaluedonthebasisoftwoyearspurchaseoflastthreeyearsaveragesuperprofits.Calculatethegoodwillofthefirm.

Ans. Average Profit = + +3 00 000 3 60 000 4 20 0003

, , , , , ,

= =

10 80 0003

3 60 000, , , ,

Normal Profit = × =10 00 000 15100

1 50 000, , , ,

SuperProfit=AverageProfit–NormalProfit–Remuneration =3,60,000–1,50,000–1,20,000=90,000 Goodwill=S.P.×No.ofyearsPurchased =90,000×2=1,80,0008. Howthefollowingitemsfortheyearended31stMarch,2018willbepresentedinthefinancial

statementsofAiskoClub:

Particulars Debit Amount (`) Credit Amount (`)TournamentFund

TournamentFundInvestments

IncomefromTournamentFundInvestments

TournamentExpenses

–

1,50,000

–

12,000

1,50,000

–

18,000

–

AdditionalInformation: InterestAccruedonTournamentFundInvestments`6,000Ans. Balance Sheet as on 31st March, 2018

Liabilities Amount Assets AmountTournamentFund 1,50,000+Incomefrom T.FundInvestment 18,000+AccruedInterest 6,000–TournamentExpenses –12,000 1,62,000

T.FundInvestmentAccruedInterest

1,50,0006,000

9. GarvitLtd.invitedapplicationsforissuing3,000,11%Debenturesof`100eachatadiscountof 6%. The full amount was payable on application. Applications were received for 3,600debentures. Applications for 600 debentures were rejected and the applicationmoneywasrefunded.Debentureswereallottedtotheremainingapplicants.

PassthenecessaryjournalentriesfortheabovetransactionsinthebooksofGarvitLtd.

STUDYmate

4

OR On1stApril2015,PLtd.Issued6,00012%Debenturesof`100eachatparredeemableata

premiumof7%.TheDebenturesweretoberedeemedattheendofthirdyear.PrepareLossonissueof12%DebenturesAccount.

Ans. Books of Garvit Ltd.

Date Particulars L.F. Dr. (`) Cr. (`)BankA/c Dr. ToDebentureApplication&AllotmentA/c(Beingdebentureapplicationmoneyreceived)

3,38,4003,38,400

DebentureApplication&AllotmentA/c Dr.DiscountonissueofDebentureA/c Dr. To11%DebenturesA/c ToBankA/c(Beingapplicationmoneytransferred)

3,38,40018,000

3,00,00056,400

OR LossonissueofDebenture=6,000×7=` 42,000

Losstobew/operyear=42 000

3,

=` 14,000

Dr. Loss on Issue of Debentures Account Cr.

Date Particulars Amount Date Particulars Amount2015April1 To12%Debenture 42,000

2016March31 ByStatementofProfit&Loss

ByBalancec/d14,00028,000

42,000 42,0002016April1 ToBalanceb/d 28,000

2017March31 ByStatementofProfit&Loss

ByBalancec/d14,00014,000

28,000 28,0002017April1 ToBalanceb/d 14,000

2018March31 ByStatementofProfit&Loss 14,000

14,000 14,000

10. UnilinkLtd.hadoutstanding`12,00,000,9%debentureson1stApril,2014redeemableatapremiumof8%intwoequalannualinstalmentsstartingfrom31stMarch,2018.Thecompanyhadabalanceof`3,00,000inDebentureRedemptionReserveon31stMarch,2017.PassthenecessaryjournalentriesforredemptionofdebenturesinthebooksofUnilinkLtd.fortheyearended31stMarch,2018.

Ans. In the books of Unilink Ltd.Journal

Date Particulars L.F. Dr. (`) Cr. (`)2017

30April DebentureredemptioninvestmentA/c Dr. ToBankA/c(BeingDebentureredemptioninvestmentcreated)

90,00090,000

201831Mar. BankA/c Dr.

ToDebentureredemptioninvestmentA/c(BeingDebentureredemptioninvestmenten-cashed)

90,00090,000

STUDYmate

5

201831Mar. 9%DebentureA/c Dr.

PremiumonRedemptionofDebentureA/c Dr. ToDebentureHolderA/c(Being Debenture redemption amount is due todebentureholder)

6,00,00048,000

6,48,000

201831Mar. DebentureHolderA/c Dr.

ToBankA/c(Beingredemptionamountpaidtodebentureholder)

6,48,0006,48,000

201831Mar. DebentureRedemptionReserveA/c Dr.

ToGeneralReserveA/c(BeingproportionateamountofDRRtransferred)

1,50,0001,50,000

11. Ankit,BobbyandKartikwerepartnersinafirmsharingprofitsintheratio4:3:3.Thefirmwasdissolvedon31-3-2018.Passthe_necessaryJournalentriesforthefollowingtransactionsaftervariousassets(otherthancashandbank)andthirdpartyliabilitieshadbeentransferredtoRealisationAccount:

(i) Thefirmhadstockof`80,000.Ankittookover50%ofthestockatadiscountof20%whiletheremainingstockwassoldoffataprofitof30%oncost.

(ii) A liability under a suit for damages included in creditorswas settled at ` 32,000 asagainstonly`13,000providedinthebooks.Totalcreditorsofthefirmwere`50,000.

(iii) Bobby’ssister’sloanof`20,000waspaidoffalongwithinterestof`2,000. (iv) Kartik’sLoanof`12,000wassettledat`12,500.Ans. In the Books of Firm Journal

Date Particulars L.F. Dr. (`) Cr. (`)(i) AnkitCapitalA/c Dr.

Cash/BankA/c Dr. ToRealisationA/c(Beinghalfstocksold&halfstocktakenbyAnil)

32,00052,000

84,000

(ii) RealisationA/c Dr. ToCash/BankA/c(Beingcreditorandcontingentliabilitiessettled)

69,00069,000

(iii) RealisationA/c Dr. ToCash/BankA/c(BeingBobby’ssister’sloanpaidoffalongwithinterest)

22,00022,000

(iv) Kartik’sLoanA/c Dr.RealisationA/c Dr. ToCash/BankA/c(BeingKartik’sloanpaidoff)

12,000500

12,500

12. Radhika,BaniandChitrawerepartners inafirmsharingprofitsand losses in theratioof2:3:1.Witheffectfrom1stApril,2018theydecidedtosharefutureprofitsandlossesintheratioof3:2:1.OnthatdatetheirBalanceSheetshowedadebitbalanceof`24,000inProfitandLossAccountandabalanceof`1,44,000inGeneralReserve.Itwasalsoagreedthat:

(a) Thegoodwillofthefirmbevaluedat`1,80,000. (b) TheLand(havingbookvalueof`3,00,000)willbevaluedat`4,80,000. Passthenecessaryjournalentriesfortheabovechanges.

STUDYmate

6

Ans. In the Books of Firm Journal

Date Particulars L.F. Dr. (`) Cr. (`)(i) Radhika’sCapitalA/c Dr.

Bani’sCapitalA/c Dr.Chitra’sCapitalA/c Dr. ToProfit&LossA/c(BeingbalanceofP/LA/cwrittenoff)

8,00012,0004,000

24,000

(ii) GeneralReserveA/c Dr. ToRadhika’sCapitalA/c ToBani’sCapitalA/c ToChitra’sCapitalA/c(BeingG.R.distributed)

1,44,00048,00072,00024,000

(iii) LandA/c Dr. ToRevaluationA/c(Beinglandappreciated)

1,80,0001,80,000

(iv) RevaluationA/c Dr. ToRadhika’sCapitalA/c ToBani’sCapitalA/c ToChitra’sCapitalA/c(Beingprofitofrevaluationdistributed)

1,80,00060,00090,00030,000

(v) Radhika’sCapitalA/c Dr. ToBani’sCapitalA/c(Being current goodwill adjusted profit of revaluationdistributed)

30,00030,000

Working Note: GainingRatio=NewRatio–OldRatio

Radhika’sG.R. = − =36

26

16

Bani’sG.R. = − = −26

36

16

Chitra’sG.R. = − =16

16

0

SoRadhikagainby16&Banisacrificeby

16

AdjustmentamountofGoodwill

Radhika&Banieach=1,80,000×16=30,000

STUDYmate

7

13. FromthefollowingReceiptsandPaymentsAccountandadditionalinformation,prepareIncomeandExpenditureAccountandBalanceSheetofSearsClub,NoidaasonMarch31.2018.

ReceiptsandPayments&AccountofSearsClubfortheyearended31-3-2018Receipts Amount Payment Amount

ToBalanceb/dToSubscriptions2016-17 40,0002017-18 94,0002018-19 7,200ToDonationsforbuildingToInterestonInvestmentsToGovernmentGrantToSaleofoldfurniture(Bookvalue`4.000)

20,000

1,41,20040,000

80017,4001,600

ByStationeryBy12%InvestmentsByElectricityexpensesByExpensesonlecturesBySportsEquipmentByBooksByBalancec/d

23,4008,000

10,60030,00059,00040,00050,000

2,21,000 2,21,000 AdditionalInformation: (i) Theclubhas200memberseachpayinganannualsubscriptionof̀ 1,000.̀ 60,000were

inarrearsforlastyearand25memberspaidinadvanceinthelastyearforthecurrentyear.

(ii) Stockofstationeryon1-4-2017was`3,000andon31-3-2018was`4,000.Ans. In the books of Sears Club, Noida

Income and Expenditure A/c Dr. for the year ended 31.3.208 Cr.

Particulars Amount (`) Particulars Amount (`)ToLossonsaleoffurnitureToStationery 23,400+Openingstock 3,000–Closingstock 4,000ToElectricityexpensesToExp.onlecturesToSurplus

2,400

22,40010,60030,000

1,52,960

BySubscription 1,41,200–Openingo/s 60,000+Closingo/s(W/N) 1,01,000+OpeningAdv. 25,000–ClosingAdv. 7,200ByInterestoninv. 800+Accruedinterest 160ByGovt.grant

2,00,000

96017400

2,18,360 2,18,360Balance Sheet

as at 31st March, 2018

Liabilities Amount Assets AmountDonationforbuildingAdvancesubscriptionCapitalfund 62,000Add:Surplus 1,52,960

40,0007,200

2,14,960

CashinhandOutstandingsubscriptionStockofstationery12%InvestmentAccruedinterestonInvestmentBooksSportsEquipment

50,0001,01,000

4,0008,000160

40,00059,000

2,62,160 2,62,160

STUDYmate

8

Working Note 1:

Liabilities Amount Assets AmountAdvancesubscriptionCapitalfund(B/F)

25,00062,000

CashinhandOutstandingsubscriptionStockofstationeryFurniture

20,00060,0003,0004,000

87,000 87,000 Working Note 2: Totalsubscriptionperannum(1000×200) = 2,00,000 –Alreadyreceivedinadvanceinlastyear = 25,000 = 1,75,000 –Receivedincurrentyear = 94,000 o/sofcurrentyear(2018)=81,000 Remainingo/soflastyear(2017) = 20,000 (60,000–40,000) Totalo/sason31.3.2018 = 1,01,00014. Giriija,YatinandZubinwerepartnerssharingprofitsintheratio5:3:2.Zubindiedon1st

August,2015.AmountduetoZubin’sexecutorafteralladjustmentswas̀ 90,300.Theexecutorwas paid `10,300incashimmediatelyandthebalanceintwoequalannualinstalmentswithinterest@6%p.a.startingfrom31stMarch,2017.Accountsarcclosedon31stMarcheachyear

PrepareZubin’sExecutor’sAccounttillheisfinallypaid.Ans. Dr. Zubin’s Executor’s A/c Cr.

Date Particulars Amount (`)

Date Particulars Amount (`)

2015Aug.12016

March31

ToBankA/c

ToBalancec/d

10,300

83,200

2015Aug.12016

March31

ByZubin’sCapitalA/c

ByInterestdue

80 000 6100

812

, × ×

90,300

3,200

93,500 93,5002017

March31

March31

ToBankA/c

ToBalancec/d

48,000

40,000

2017April12017

March31

ByBalanceb/d

ByInterestdue

80 000 6100

, ×

83,200

4,800

88,000 88,0002018

March31 ToBankA/c 42,4002017April12018

March31

ByBalanceb/d

ByInterestdue

40 000 6100

, ×

40,000

2,400

42,400 42,400

Note : Interestonloanhasbeencalculatedonsimpleinterestbasis.

STUDYmate

9

15. SonuandRajatstartedapartnershipfirmonApril1,2017.Theycontributed` 8,00,000and` 6,00,000respectivelyastheircapitalsanddecidedtoshareprofitsandlossesintheratioof3:2.ThepartnershipdeedprovidedthatSonuwastobepaidasalaryof`20,000permonthandRajatacommissionof5%onturnover.Italsoprovidedthatinterestoncapitalbeallowed@8%p.a.Sonuwithdrew`20,000on1stDecember,2017andRajatwithdrew`5,000attheendofeachmonth.Interestondrawingswascharged@6%p.a.ThenetprofitasperProfitandLossAccountfortheyearended31stMarch,2018was`4,89,950.Theturnoverofthefirmfortheyearended31stMarch,2018amountedto`20,00,000.PassnecessaryjournalentriesfortheabovetransactionsinthebooksofSonuandRajat.

OR Jay,VijayandKaranwerepartnersofanarchitectfirmsharingprofitsintheratioof2:2:1.

Theirpartnershipdeedprovidedthefollowing: (i) Amonthlysalaryof`15.000eachtoJayandVijay. (ii) Karanwasguaranteedaprofitof`5,00,000andJayguaranteedthathewillearn/an

annualfeeof`2,00,000.AnydeficiencyarisingbecauseofguaranteetoKaranwillbebornebyJayandVijayintheratioof3:2.

Duringtheyearended31stMarch,2018Jayearnedfeeof̀ 1,75,000andtheprofitsofthefirmamountedto`15,00,000.

ShowingyourworkingsclearlyprepareProfitandLossAppropriationAccountandtheCapitalAccountofJay,VijayandKaranfortheyearended31stMarch2018.

Ans. In the Book of Sonu and RajatJournal

Date Particular LF Dr(`) Cr(`)2018

March31

ProfitandlossA/c Dr. ToP/LAppropriationA/c(BeingProfittransferredfromP/LA/ctoP/LApp.A/c)

4,89,9504,89,950

March31 InterestonCapitalA/c Dr. ToSonu’sCapitalA/c ToRajat’sCapitalA/c(BeinginterestonCapitalallowed)

1,12,00064,00048,000

March31 P/LAppropriationA/c Dr. TointerestoncapitalA/c(BeinginterestoncapitaltransferredtoP/Lappropriation

A/c)

1,12,0001,12,000

March31 Sonu’scapitalA/c Dr.Rajat’scapitalA/c Dr. Tointerestondrawings

4001,650

2,050March31 InterestonDrawings Dr.

ToP/LappropriationA/c(BeingIODtransferredtoP/Lapp.A/c)

2,0502,050

March31 SalaryA/c Dr. ToSonu’sCapitala/c(BeingSalaryallowedtosonu)

2,40,0002,40,000

March31 Commission Dr. ToRajat’sCapitalA/c(BeingcommissionallowedtoRajat)

1,00,0001,00,000

STUDYmate

10

March31 ProfitandLossAppropriation Dr. ToSalary ToCommission(Beingsalaryandcommission....toP/Lapp.A/c)

3,40,0002,40,0001,00,000

March31 P/LAppropriationA/c Dr. ToSonu’sCapitalA/c ToRajata’sCapitalA/c(BeingProfitdistributed)

40,00024,00016,000

InterestonCapital:

Sonu=8 00 000 8100

64 000, , ,× =

Rajat=6 00 000 8100

48 000, , ,× =

InteretonDrawings:

Sonu=20 000 6100

412

400, × × =

Rajat= 5000 12 6100

5 512

×( )× ×.

60 000 6100

5 512

1650, .× × =

CommissiontoRajat=20 00 000 5100

1 00 000, , , ,× =

ProfitofP/LAppropriationA/c=Totalofcredit–TotalofDebit (4,89,950+2,050)–(1,12,000+3,40,000) =4,92,000–4,52,000 =40,000

OR Dr. P & L Appropriation A/c Cr.

Particulars Amount (`) Particulars Amount (`)Salary Jay 1,80,000 Vijay 1,80,000ProfitT/FtoJay’sCapitalA/c 4,66,000LessDef. –1,60,200Vijay’sCapitalA/c 4,66,000LessDef. –1,06,800Karan’sCapitalA/c 2,33,000Add:Def.byJay 1,60,200Def.byVijay 1,06,800

3,60,000

3,05,800

3,59,200

5,00,000

NetprofitasperP&LA/cJay’scapitalA/c(grossfee)

15,00,00025,000

15,25,000 15,25,000

STUDYmate

11

Partners’ Capital Account

Particulars Jay Vijay karan Particulars Jay Vijay karan

ToP&LAppro.A/c

ToBalancec/d

25,000

4,60,800 5,39,200 5,00,000

BySalary

ByP&LAppro.A/c

1,80,000

3,05,800

1,80,000

3,59,200 5,00,000

4,85,800 5,39,200 5,00,000 4,85,800 5,39,200 5,00,000

Profittodistributed=`11,65,000 GuaranteetoKaran=`5,00,000 Deficiencysomeby=5,00,000–2,33,000

JayandVijay = 2,67,000

3:2

16. DFLtd.invitedapplicationforissuing50,000sharesof`10eachatapremiumof` 2pershare.Theamountwaspayableasfollow:

OnApplication : `3pershare(includingpremium`1) OnAllotment : `3pershare(includingpremium`1) OnFirstcall : `3pershare OnSecondandFinalCall : Balanceamount Applicationfor70,000shareswerereceived.Allotmentwasmadeonthefollowingbasis. Applicationsfor5,000shares–Full Applicationsfor50,000shares–90% Balanceoftheapplicationswererejected.`1,11,000werereceivedonaccountofallotment.The

amountofallotmentduefromtheshareholderstowhomshareswereallottedonproratabasiswasfullyreceived.Afewshareholderstowhomshareswereallottedinfull,failedtopaytheallotmentmoney.̀ 1,20,000werereceivedonfirstcall.Directorsdecidedtoforfeitthosesharesonwhichallotmentandcallmoneywasdue.Halfoftheforfeitedshareswerere-issued@̀ 8persharefullypaidup.Finalcallwasnotmade.

PassthenecessaryjournalentriesfortheabovetransactionsinthebookofDFLtd.OR

EFLtd.invitedapplicationsforissuing80,000equitysharesof`50eachatapremiumof20%.Theamountwaspayableasfollows:

OnApplication : `20pershare(includingpremium`5) OnAllotment : `15pershare(includingpremium`5) OnFirstCall : `15pershare OnSecondandFinalcall : Balanceamount Applicationsfor1,20,000shareswerereceived.Applicationsfor20.000shareswererejected

andpro-rataallotmentwasmadetotheremainingapplicants. Seema,holding4,000sharesfailedtopaytheallotmentmoney.Afterwardsthefirstcallwas

made.Seemapaidallotmentmoneyalongwiththefirstcall.Sahajwhohadappliedfor2,500sharesfailedtopaythefirstcallmoney.Sahaj’sshareswereforfeitedandsubsequentlyreissuedtoGeetafor` 60pershare,`50persharepaidup.Finalcallwasnotmade.

PassnecessaryjournalentriesfortheabovetransactionsinthebooksofEFLtd.byopeningcalls-in-arrearsaccount

STUDYmate

12

Ans.Errorinoption(A)as8,000shareholdershavenotpaidallotmentamount(` 1,11,000)whereasonly5,000sharesholdershavenotpaidallotmentamountasperquestion.

OR In the Books of Firm Journal Entries (EF Ltd.)

Date Particulars L.F. Dr. (`) Cr. (`)BankA/c Dr. ToEquityShareApplicationA/c(Beingapplicationamountreceived)

24,00,00024,00,000

EquityShareApplicationA/c Dr. ToEquityShareCapitalA/c ToBankA/c ToEquityShareAllotmentA/c ToSecurityPremiumReserveA/c(Beingapplicationamountadjusted)

24,00,00012,00,0004,00,0004,00,0004,00,000

EquityShareAllotmentA/c Dr. ToEquityShareCapitalA/c ToSecurityPremiumReserveA/c(Beingallotmentamountdue)

12,00,0008,00,0004,00,000

BankA/c Dr.CallsinArrearA/c Dr. ToEquityShareAllotmentA/c(12,00,000–4,00,000)(Beingallotmentamountreceived)

7,60,00040,000

8,00,000

EquityShareICallA/c Dr. ToEquityShareCapitalA/c(Beingfirstcallamountdue)

12,00,00012,00,000

BankA/c Dr. ToEquityShareICallA/c ToCallsinArrearA/c(40,000–30,000)(Beingfirstcallamountreceived)

12,10,00012,00,000

10,000

EquityShareCapitalA/c(2,000×40) Dr. ToShareForfeitureA/c ToCallsinArrearA/c(Beingshareforfeited)

80,00050,00030,000

BankA/c(2,000×60) Dr. ToEquityShareCapitalA/c(2,000×50 ToSecurityPremiumReserveA/c(BeingshareReissued)

1,20,0001,00,00020,000

ShareForfeitureA/c Dr. ToCapitalReserveA/c(BeingForfeitureamounttransferredtoCapitalReserve)

50,00050,000

17. Akul,BakulandChandanwerepartnersinafirmsharingprofitsintheratioof2:2:1.On31stMarch,2018theirBalanceSheetwasasfollows:

Balance Sheet of Akul. Bakul and Chandan as on 31-3-2018Liabilities Amount Assets Amount

SundryCreditorsEmployeesProvidentFundGeneralreserveCapitals: Akul 1,60,000 Bakul 1,20,000 Chandan 92,000

45,00013,00020,000

3,72,000

CashatBankDebtors 60,000Less:Provisionfordoubtfuldebts 2,000StockFurniturePlantandMachinery

42,000

58,00080,00090,000

1,80,0004,50,000 4,50,000

STUDYmate

13

Bakulretiredontheabovedateanditwasagreedthat: (i) PlantandMachinerywasundervaluedby10%. (ii) Provisionfordoubtfuldebtswastobeincreasedto15%ondebtors. (iii) Furniturewastobedecreasedto`87,000. (iv) Goodwillofthefirmwasvaluedat̀ 3,00,000andBakul’ssharewastobeadjustedthrough

thecapitalaccountsofAkulandChandan. (v) Capitalofthenewfirmwastobeinthenewprofitsharingratioofthecontinuingpartners. Prepare Revaluation account, Partners’ Capital accounts and the Balance Sheet of the

reconstitutedfirm.OR

SanjanaandAlokwerepartnersinafirmsharingprofitsandlossesintheratio3:2.On31stMarch,2018theirBalanceSheetwasasfollows:

Balance Sheet of Akul. Bakul and Chandan as on 31-3-2018Liabilities Amount Assets Amount

CreditorsWorkmen’sCompensationFundCapitals: Sanjana 5,00,000 Alok 4,00,000

60,00060,000

9,00,000

CashDebtors 1,46,000Less:Provisionfordoubtfuldebts 2,000StockInvestmentsFurniture

1,66,000

1,44,0001,50,0002,60,0003,00,000

10,20,000 10,20,000 On1stApril,2018,theyadmittedNidhiasanewpartnerfor1/4thshareintheprofitsonthe

followingterms: (a) Goodwillofthefirmwasvaluedat`4,00,000andNidhibroughtthenecessaryamountin

cashforhershareofgoodwillpremium,halfofwhichwaswithdrawnbytheoldpartners. (b) Stockwastobeincreasedby20%andfurniturewastobereducedto90%. (c) Investmentsweretobevaluedat`3,00,000.Aloktookoverinvestmentsatthisvalue. (d) Nidhibrought̀ 3,00,000ashercapitalandthecapitalsofSanjanaandAlokwereadjusted

inthenewprofitsharingratio. Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of the

reconstitutedfirmonNidhi’sadmission.Ans. Dr. Revaluation A/c Cr.

Particulars Amount Particulars AmountToProvisionforD/DToFurnitureToProfit: Akul 4,000 Bakul 4,000 Chandan 2,000

7,0003,000

10,000

ByPlantandMachineryA/c 20,000

20,000 20,000 Dr. Partners’ Capital Account Cr.

Particulars Akul Bakul Chandan Particulars Akul Bakul Chandan

ToBakul’sCapitalToLoanA/cToBankA/c’ToBalancec/d

80,000

1,00,000

2,52,00040,000

8,00050,000

ByBalanceb/dByAkul’sCapitalByChandan’sCapitalByG/RByRevaluationA/cByBankA/c

1,60,000

8,0004,0008,000

1,20,00080,00040,0008,0004,000

92,000

4,0002,000

1,80,000 2,52,000 98,000 1,80,000 2,52,000 98,000

STUDYmate

14

Balance Sheet (as at 31/3/18)Liabilities Amount Assets Amount

CreditorsEmployeesProvidentFundBakul’sLoanCapitals: Akul 1,00,000 Chandan 50,000

45,00013,000

2,52,000

1,50,000

PlantandMachinery 1,80,000 +20,000Debtors(60,000–9,000)StockFurniture(90,000–3,000)Bank(42,000+8,000–8,000)

2,00,00051,00080,00087,00042,000

4,60,000 4,60,000OR

Dr. Revaluation A/c Cr.

Particulars Amount (`) Particulars Amount (`)To FurnitureTo Profit: Sanjana 24,000 Alok 16,000

30,000

40,000

ByStockByInvestment

30,00040,000

30,000 70,000 Dr. Partners’ Capital A/c Cr.

Particulars Sanjana Alok Nidhi Particulars Sanjana Alok Nidhi

ToCashA/c

ToInvestment

ToCashA/c

ToBal.c/d

30,000

50,000

5,40,000

20,000

3,00,000

3,60,000 3,00,000

ByBalanceb/d

ByCash

ByPrem.forG/W.A/c

ByWorkm.Comp.Fund

ByRevaluationA/c

ByCashA/c*

5,00,000

60,000

36,000

24,000

4,00,000

40,000

24,000

16,000

2,00,000

3,00,000

6,20,000 6,80,000 3,00,000 6,20,000 6,80,000 3,00,000

Balance Sheet of New Firm As at 31.3.2018

Liabilities Amount (`) Assets Amount (`)CreditorsCapitalA/c Sanjana 5,40,000 Alok 3,60,000 Nidhi 3,00,000

60,000

12,00,000

Cash 1,66,000+Nidhi’sCapital 3,00,000+Prem.forGoodwill 1,00,000(–)Prem.forGoodwill (30,000)(–)Alok’sCapital (20,000)(–)Sanjana’sCapital (50,000)(+)Alok’sCapital 2,00,000Debtors (1,46,000–2,000)Stock (1,50,000+30,000)Furniture (3,00,000–30,000)

6,66,0001,44,0001,80,0002,70,000

12,60,000 12,60,000

Part B

18. Mevo Ltd., a financial enterprise had advanced a loan of `3,00,000, invested `6,00,000 insharesoftheothercompaniesandpurchasedmachineryfor`9,00,000.Itreceiveddividendof`70,000oninvestmentinshares.Thecompanysoldanoldmachineofthebookvalueof`79,000atalossof`10,000.

ComputeCashflowsfromInvestingActivities.

STUDYmate

15

Ans.

Particulars AmountPurchaseofMachinery

SaleofMachinery

DividendReceivedon

Purchaseofshare(Investment)

Caseusedininvestingactivities

(9,00,000)

69,000

70,000

(6,00,000)

13,61,000

Note : Asitisclearlymentionedthatsharesarepurchasedforinvestment,Theyhavebeentreatedasinvestingactivities

19. Givethemeaningof‘CashEquivalents’forthepurposeofpreparingCashFlowStatement.Ans. “Castequivalents”meansshorttermhighlyliquidinvestmentsthatarereadilyconvertibleinto

knownamountofcash&whicharesubjecttoaninsignificantriskofchangesinvalue. ForEx-shorttermmarketablesecurities. The primary purpose of the statement of cash flows is to provide information about cash

receipt,cashpayments,andthenetchangeincashresultingfromtheoperating,investingandfinancingactivitiesofacompanyduringtheperiod.

20. Explainbrieflyanyfourobjectivesof‘AnalysisofFinancialstatements’.OR

Stateunderwhichmajorheadingsandsub-headingswillthefollowingitemsbepresentedintheBalanceSheetofacompanyasperSchedule-Ill,Part-IoftheCompaniesAct,2013.

(i) PrepaidInsurance (ii) InvestmentinDebentures (iii) Calls-in-arrears (iv) Unpaiddividend (v) CapitalReserve (vi) LooseTools (vii) Capitalwork-in-progress (viii) Patentsbeingdevelopedbythecompany.Ans.Fourobjectiveof‘AnalysisofFinancialstatementsareasfollow: (a) Toassessthecurrentprofitabilityandoperationalefficiencyofthefirmasawholeaswell

asitsdifferentdepartmentssoastojudgethefinancialhealthoffirm. (b) Toascertainthefinancialpositionoffirm. (c) Toidentifythereasonsforchangeintheprofitabilityandfinancialpositionofthefirm. (d) ToJudgetheabilityofthefirmtorepayitsdebtandassessingtheshot-termaswellas

thelongtermliquiditypositionofthefirm.OR

Items Major heads Sub-heads1.Prepaidinsurance CurrentAssets OthercurrentAssets2.Investmentindebenture Non-currentAssets Non-currentinvestment3.CallsinArrears ShareholdersFund Subscribedcapital (less from

subscribebutnotfullypaid)4.Unpaiddividend Currentliabilities Othercurrentliabilities5.CapitalReserve ShareholderFund Reserve&Surplus6.Loosetools CurrentAssets Inventories7.Capitalworkinprogress NonCurrentAssets FixedAssets

(Capitalworkinprogress)

STUDYmate

16

8.Patentbeingdevelopedbythecompany.

Non-currentAssets FixedAssets(intangibleassetunderdevelopment)

21. (a) CalculateRevenuefromoperationsofBNLtd.Fromthefollowinginformation: Currentassets `8,00,000. Quickratiois 1.5:1 Currentratiois 2:1 Inventoryturnoverratiois 6times Goodsweresoldataprofitof25%oncost. (b) The Operating ratio of a company is 60%. State whether ‘Purchase of goods costing

`20,000’willincrease,decreaseornotchangetheoperatingratio.OR

(a) Calculate‘TotalAssetstoDebtratio’fromthefollowinginformation: ` EquityShareCapital 4,00,000 LongTermBorrowings 1,80,000 Surplusi.e.BalanceinstatementofProfitandLoss 1,00,000 GeneralReserve 70,000 CurrentLiabilities 30,000 LongTermProvisions 1,20,000 (b) TheDebtEquityratioofacompanyis1:2.Statewhether‘Issueofbonusshares’will

increase,decreaseornotchangetheDebtEquityRatio.Ans. (a) CurrentAssets` 8,00,000 QuickRatio=1.5:1 CurrentRatio=2:1 Inventoryturnoverratio=6times CurrentRatio=2:1

⇒21=

Current AssetsCurrent liabilities

⇒21

8 00 000=

, ,CurrentLiabilites

Currentliabilities=` 4,00,000 Quickratio=1.5:1

⇒Quick Assets

CurrentLiabilites=

1 51.

QuickAssets=1.5×` 4,00,000 =` 6,00,000 So,Inventory=CurrentAssets–QuickAssets =` 8,00,000–` 6,00,000 =` 2,00,000. InventoryTurnoverRatiois6times

⇒Cost of goods sold(CRFO)

Inventory times

Average= 6

⇒ costofgoodsold(CRFO)=` 2,00,000×6 =` 12,00,000. Goodsweresoldataprofitof25%oncost. Profit=25%oncost

=25

100 ×` 12,00,000

STUDYmate

17

=` 3,00,000 Revenuefromoperation=cost(CRFO)+profit =` 12,00,000+` 3,00,000 =` 15,00,000 (b) Theoperating ratiowillnot change, as therewill be equal increase inpurchasesand

closinginventoryandhencecostofrevenuefromoperationwillremainunchanged.OR

(a) TotalAssetstoDebtRatio =Total Assets

Debt

=9 00 0003 00 000, ,, ,

=3times WhereTotalAssets=Totalliabilities =Sharecapital+longtermborrowings+surplus+GeneralReserve+CurrentLiabilities

+Longtermprovisions =` 4,00,000+` 1,80,000+` 1,00,000+` 70,000+` 30,000+` 1,20,000 =` 9,00,000 Debt=Longtermborrowings+longtermprovision =` 1,80,000+` 1,20,000 =` 3,00,000 (b) Debtequityratioofacompanywillnotchangeduetoissueofbonusshares,asneither

thedebtnorequityiseffectedbecauseR&Sisconvertingintosharecapital. 22. FromthefollowinginformationextractedfromtheStatementofProfitandLossforyearsended

31stMarch,2017and2018,prepareaComparativeStatementofProfit&Loss.

Particulars 2017-18 2016-17RevenuefromoperationsOtherincomes(%ofrevenuefromoperations)Employeebenefitexpenses(%ofTotalRevenue)Taxrate

`6,00,00020%40%50%

`5,00,00020%30%50%

Ans.Comparativestatementofprofit&lossfortheyearended31stMarch17&18.

Particulars Note No.

2016-17 (`)

2018-19 (`)

AbsoluteChange

PercentageChange

I. Revenuefromoperation

II. Add:otherincomes

III. TotalRevenue(I+II)

IV. Expense

Employeebenefitexpense

V. ProfitbeforeTax(III-IV)

Len:Tax(50%)

VI. ProfitAfterTax

5,00,000

1,00,000

6,00,000

1,20,000

1,00,000

20,000

20.00

20.006,00,000 7,20,000 1,20,000 20.00

1,80,000 2,88,000 1,08,000 60.00

4,20,000 4,32,000 12,000 02.85

2,10,000 2,16,000 6,000 02.852,10,000 2,16,000 6,000 02.85

STUDYmate

18

23. FromthefollowingBalanceSheetofKieroLtd.andtheadditionalinformationason31.3.2018,prepareaCashFlowStatement:

Kiero Ltd.Balance Sheet as at 31st March, 2018

Particulars Note No. 31-3-2018 (`) 31-3-2017 (`)I. Equity and liabilities: (1) Shareholders’ Funds: (a) ShareCapital (b)ReservesandSurplus (2) Non-current Liabilities Long-termborrowings (3) Current Liabilities (a) Short-termborrowings (b) Short-termprovisions

1

2

34

7,90,0004,60,000

5,00,000

1,15,0001,18,000

5,80,0001,20,000

3,00,000

42,00046,000

Total 19,83,000 10,88,000II. Assets: (1) Non-current Assets: Fixed Assets: (i) Tangible (ii) Intangible (2) Current Assets: (a) CurrentInvestments (b) TradeInventories (c) Cash&CashEquivalents

56

9,80,0002,68,000

1,40,0004,40,0001,55,000

6,35,0001,70,000

70,0001,50,00063,000

Total 19,83,000 10,88,000 Notes to Accounts:

Note No. Particulars 31-3-2018 (`) 31-3-2017 (`)1 Reserves and Surplus

Surplus(BalanceinStatementofProfit&Loss)GeneralReserve

3,20,0001,40,000

60,00060,000

4,60,000 1,20,0002 Long-term borrowings:

12%Debentures 5,00,000 3,00,0005,00,000 3,00,000

3 Short-term borrowings:BankOverdraft 1,15,000 42,000

1,15,000 42,0004 Short-term provisions:

Provisionfortax 1,18,000 46,0001,18,000 46,000

5 Tangible Assets:PlantandMachineryLess:AccumulatedDepreciations

11,00,000(1,20,000)

7,50,000(1,15,000)

9,80,000 6,35,0006 Intangible Assets:

Goodwill 2,68,000 1,70,0002,68,000 1,70,000

Additional Information: 12%debentureswereissuedon1stSeptember,2017.

STUDYmate

19

Ans. Cash Flow Statement

Particular Amount (Rs.) Amount (Rs.) NetprofitasperP&LA/c Add: GeneralReserve Provisionfortax

2,60,00080,000

1,18,000

Net Profitbeforetaxandextraordinaryitems Add:Depreciation Interestondebenture

4,58,0005,000

50,000OperatingprofitbeforeworkingcapitalchangesAdd:DecreaseinC.A.andIncreaseinC.L.Less:IncreaseinC.A.anddecreaseinC.L.IncreaseinTradeReceivable

5,13,000NIL

(2,90,000)CashGeneratedfromoperationsLess:Taxpaid

2,23,000(46,000)

A. Cash flow from operating activities 1,77,000PurchaseofPlantandMachineryPurchaseofGoodwill

(3,50,000)(98,000)

B. Cash used in investing activities (4,48,000) Bankoverdraft Issueofsharescapital Issueofdebentures Paymentofinterestondebenture

73,0002,10,0002,00,000(50,000)

C. Cash flow from financing activities 4,33,000 A+B+C Netincreaseincashandcashequivalents Add:OpeningCashandCashequivalents(63,000+70,000)

1,62,000

1,33,000ClosingCashandCashequivalents(1,55,000+1,40,000) 2,95,000

vvvvv