CLASS 12 ACCOUNTANCY SAMPLE QUESTION PAPER 2

  Highly Simulated Practice Question Paper for CBSE Class XII Examination
A
Time : 3 hrs
M.M.: 80
• This question paper contains two parts A and B.
• Part A is compulsory for all.
• Part B has two options-Analysis of Financial Statements and Computerised Accounting*.
Attempt only one option of Part B.
• All parts of a question should be attempted at one place.
♦Computerised Accounting has not been covered.
 
Part A
(Accounting for Not-for-Profit Organisations, Partnership Firms and Companies)
 OBJECTIVE TYPE QUESTIONS (1 Mark)
 Multiple choice questions (Q. no. 1 to 4)
There are four options for each question, out of these, only one is correct. You have to identify the
correct option.
1. If a partner withdraws equal amount at end of each quarter, then are to be
considered
for interest on total drawings.
(a) 5.5 months (b) 6 months (c) 4.5 months (d) 7.5 months
Ans.​ ​(c) 4.5 months
Hint​ Time Period = Time left after first drawings + Time left after last drawings/2 = 9+0/2 = 4.5 months
2. X, Y and Z are partners in the ratio of 3 : 5 : 1, respectively. Y retires. His share is purchased by
Z. Find the new profit sharing ratio.
(a) 1 : 2 (b) 1 : 3 (c) 1 : 4 (d) None of these
Ans.​ ​(a) 1 : 2
Hint XYZ
Old ratio 3:5:1
Z’s gained share = Y’s share =5/9; Z's new share = Old share + Gain share =1/9 + 5/9 = 6/9
X’s new share = Old share + Gained share = 3/9 + 0 = 3/9
New profit sharing ratio between X : Z = 3: 6 or 1:2
3. TDS refers to relating to debenture interest.
(a) the debenture security (b) tax deducted at source
(c) these debentures secured (d) None of these
Ans.​ ​(b) tax deducted at source
4. Receipt and payment account shows
(a) income and expenditure (b) profit and loss (c) saving and deficit (d) cash receipts and payments ​Ans.
(d) cash receipts and payments
 
Answer the following (Q. no. 5 to 7)
5. The 'share of premium for goodwill’ brought in by the new partner is divided in which ratio?
Ans.​ ​in sacrificing ratio
6. Amount of debenture redemption reserve is transferred to which account?
Ans.​ ​Capital reserve account
7. How are the following items presented in financial statements of a non-profit organisation
(a) Sport fund - Rs.40,000 (b) Expenses on sports events - Rs.21,000
Ans. ​Balance Sheet
as at...
Liabilities Amt (Rs.) Assets Amt (Rs.)
Sports fund 40,000
(-) Expenses on sports events (21,000) 19,000
 Journalise the following (Q. no. 8 to 9)
Here, we have given some accounting transactions. You have to give the correct journal entry(ies)
for all.
8. A and B are two partners sharing profits in the ratio of 2 : 1. C, a new partner admitted for l/4th
share. At the time of admission, loss from revaluation is Rs. 9,000. Pass a necessary journal entry
for distribution of loss between the partners.
 
Ans. ​JOURNAL
Date Particulars LF Amt ​(Dr) Amt ​(Cr)
A’s Capital A/c Dr 6,000
B’s Capital A/c Dr 3,000
To Revaluation A/c 9,000
(Being loss on revaluation account is transferred to capital
accont)
9. Jhunjhun, a partner paid loan of the firm of Rs. 1,00,000 at the time of dissolution. Pass a
journal entry for this transaction.
Ans. ​JOURNAL
Date Particulars LF Amt ​(Dr) Amt ​(Cr)
Realisation A/c Dr 1,00,000 1,00,000
To Jhunjhun’s Capital A/c (Being loan of firm
paid by the Jhunjhun)
Difference between (Q. no. 10 to 12)
Here, we have given two related terms. You are required to provide distinction between the given
terms. ​10. Revenue receipts and capital receipts in NPO's.
Ans.
Revenue Receipts Capital Receipts
It is recorded on credit side of the incomeIt is not recorded in income and expenditure
and expenditure account. account but it’s affects are recorded in the balance
sheet.
11. Revenue payments and capital payments.
Ans.
Revenue Payments Capital Payments
It is recurring (regular) nature of It is not a recurring nature of expenditure
expenditure.
Recorded on debit side of the incomeNot recorded in income and expenditure account. But, it’s
and expenditure account. effects are recorded in balance sheet.
12. Shares and debentures. ​Ans.
Shares Debentures
Shares are the denomination of share Debentures are the denomination of loan.
capital.
The holders of equity shares are the The holders of debentures are the creditors of the
owners of the company. company.
13. The maximum number of members in a private company can be
Ans.​ 200
 
SHORT ANSWER TYPE I QUESTION (3 Marks)
14. Surender, Ramesh, Naresh and Mohan are partners in a firm sharing profits in 2:1:2:1 ratio. On
the retirement of Naresh, the goodwill was valued at Rs. 2,16,000. Surender, Ramesh and Mohan
decided to share future profits equally. Pass the necessary journal entry for the treatment of
goodwill without opening goodwill account.
Or
X, Y and Z are partners sharing profits in the ratio of 4 : 3 : 2. On 1st April, 2017, Y gave a notice to
retire from the firm. X and Z decided to share future profits in the ratio of 1 : 1. The capital
accounts of X and Z after all adjustments showed a balance of Rs. 21,500 and Rs. 40,250
respectively. The total amount to be paid to Y was Rs. 47,750. This amount was to be paid by X
and Z 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.
Ans. ​JOURNAL
Date Particulars LF Amt ​(Dr) Amt ​(Cr)
Ramesh’s Capital A/c Dr 36,000
Mohan’s Capital A/c Dr 36,000
To Naresh’s Capital A/c 72,000
(Being Naresh’s share of goodwill adjusted to remaining
partners)
Working Note
Calculation of Gaining Ratio
Gaining ratio = New share - Old share
Surender = 1/3 - 2/6 = 2-2/6 = 0/6 = 0
Ramesh = 1/3 - 1/6 = 2-1/6 = 1/6, Mohan = 1/3 - 1/6 = 2-1/6 = 1/6
Gaining ratio of Ramesh and Mohan = 1:1
Naresh's share of goodwill = 2,16,000 x 2/6 = Rs. 72,000
Or
JOURNAL
Date Particulars LF Amt ​(Dr) Amt ​(Cr)
2017 Apr Cash A/c Dr 47,750
1
To X’s Capital A/c 33,250
To Z’s Capital A/c 14,500
(Being cash to be paid to Y brought in by X and Z)
Apr 1 Y’s Capital A/c Dr 47,750
To Cash A/c 47,750
(Being cash paid to Y for his capital)
Working Notes
1​ Particulars Amt (Rs.)
Adjusted Capitals of X and Z (Rs. 21,500 + Rs. 40,250) (+) Amount to be Paid to 61.750
Y 47.750
Total Capital of New Firm 1,09,500
2. ​Amount to be Brought in or Withdrawn
Particulars X(Rs.) z​(Rs.)
I. New Capital (Rs. 1,09,500 in new ratio, i.e. 1:1) 54,750 54,750
II. Existing Capitals (21,500) (40,250)
III. Cash to be Brought in (Paid-off) (1 - II) 33,250 14,500
 SHORT ANSWER TYPE II QUESTIONS (4 Marks)
15. Wadhwa Ltd issued 60,000 15% debentures of Rs. 10 each credited as fully paid to the
promoters for their services and issued 15,000, 15% debentures of Rs. 10 each credited as fully
paid to the underwriters for the underwriting services. Journalise these transactions.
Ans. ​JOURNAL
Date Particulars LF Amt ​(Dr) Amt ​(Cr)
Formation Expenses/Goodwill A/c Dr 6,00,000
.To 15% Debentures A/c 6,00,000
(Being 60,000, 15% debentures of Rs. 10 per debenture
issued to promoters for their services)
Underwriting Commission A/c Dr 1,50,000
To Underwriters A/c 1,50,000
(Being underwriting commission due)
Underwriters A/c Dr 1,50,000
To 15% Debentures A/c 1,50,000
(Being 15,000, 15% debentures of Rs. 10 per debenture
issued to underwriters for their services)
16. Prabhu Darbaar Pvt Ltd issued 20,000, 9% debentures of Rs. 100 each to the public at 10%
discount on 1st April, 2018. These debentures are redeemable after 6 years at a premium of 10%.
Pass the necessary journal entries for issue of debentures and writing-off 'loss on issue of
debentures' in same year of issue, if company has a balance of Rs. 1,60,000 in its securities
premium reserve account.
Ans. ​In the Books of Prabhu Darbaar Pvt Ltd
JOURNAL
Date Particulars LF Amt ​(Dr) Amt ​(Cr)
2018 Apr Bank A/c (20,000 x 90) Dr 18,00,000 18,00,000
1 To 9% Debentures A/c
(Being money received on 20,000, 9% debentures @10%
discount)
Apr 1 9% Debentures A/c Dr Discount on Issue of Debentures A/c 18,00,000 20,00,000
Dr Loss on Issue of Debentures A/c Dr 2,00,000 2,00,000
To 9% Debentures A/c (20,000x100) 2,00,000
To Premium on Redemption of Debentures A/c (20,000x10)
(Being money is transferred to 9% debentures account with
the term of issue and redemption)
2019 Mar Securities Premium Reserve A/c Dr Statement of Profit and 1,60,000 4,00,000
31 Loss Dr 2,40,000
To Loss on Issue of Debentures A/c (Being loss on issue of
debentures written-off from securities premium reserve and
profit and loss account)
Working Note
Total loss on issue of debentures account = Discount on issue of debentures + Premium on redemption of
debentures account = 2,00,000 + 2,00,000 = Rs. 4,00,000
17. Pass the necessary journal entries for the following transactions on the dissolution of firm of
Anju, Manju and Sanju (who were sharing profits in the ratio of 2 : 2 :1) after the transfer of all
assets (other than cash) and external liabilities to realisation account.
(i) Debtors were of Rs. 62,100. Anju takes over debtors amounted to Rs. 60,000 at Rs. 58,600 and
the remaining debtors were sold to a debt collecting agency at 50% of the value.
(ii) Sundry assets were of Rs. 58,500. Manju is to take over some sundry assets at Rs. 36,000
(being 10% less than the book value). Sanju is to take over remaining sundry assets at 80% of the
book value.
(iii) Sanju assumes the responsibility of discharge of Mrs Sanju’s loan of Rs. 5,750 together with
accrued interest of Rs. 1,150.
Ans. ​JOURNAL
Date Particulars LF Amt ​(Dr) Amt ​(Cr)
(i) Anju’s Capital A/c Dr 58,600
To Realisation A/c 58,600
(Being some debtors taken over by Anju)
Cash/Bank A/c [(62,100 - 60,000) x 50/100] Dr 1,050
To Realisation A/c 1,050
(Being the remaining debtors sold to a debt collecting
agency)
(ii) Manju’s Capital A/c Dr 36,000
 To Realisation A/c 36,000
(Being sundry assets of value Rs. 40,000 ^36,000x155 j
taken over
by Manju at Rs. 36,000)
Date Particulars LF Amt ​(Dr) Amt ​(Cr)
(iii) Sanju’s Capital A/c [(58,500 - 40,000) x 80/100] Dr 14,800
To Realisation A/c 14,800
(Being the remaining sundry assets taken over by Sanju)
(iv) Realisation A/c Dr 6,900
To Sanju’s Capital A/c (5,750 + 1,150) (Being Mrs 6,900
Sanju’s loan paid by Sanju)
18. Bhagwan and Insaan are two partners in Natural and Sons, a partnership firm
sharing profits in the ratio of 1 : 2. They decided to admit Sagar into the firm for -th
4
share on 1st April, 2019. Sagar brings Rs. 60,000 share of premium for goodwill in cash out of Rs.
90,000. Goodwill already appears Rs. 3,00,000 in the old books of the firm at the time of
admission. Pass journal entries related with goodwill using raising and writing-off method of
goodwill.
Or
Arab, Kharab and Zero are three partners in a firm sharing profits and losses in the ratio of 2 : 3 :
5. They decided to share profits and losses in the ratio of 3 : 5 : 2 from 1st April, 2019. For this
purpose, adjustment of goodwill is required to be done on this date. Goodwill of the firm is valued
at Rs. 6,00,000. Goodwill also appeared in the books of old firm for Rs.4,00,000. Make the
adjustments for goodwill in this situation by the method of raising and writing-off goodwill.
Ans. ​In the Books of Natural and Sons
JOURNAL
Date Particulars LF Amt ​(Dr) Amt ​(Cr)
2019
Apr 1 Bhagwan's Capital A/c Dr 1,00,000
Insaan’s Capital A/c Dr 2,00,000
To Goodwill A/c 3,00,000
(Being existing goodwill is written-off in old partners in old 2)
ratio 1
Apr 1 Cash/Bank A/c Dr 60,000
To Premium for Goodwill A/c 60,000
(Being some amount of premium is bring by the Sagar in
cash)
Apr 1 Goodwill A/c (WN 1) Dr 1,20,000
To Bhagwan’s Capital A/c 40,000
To Insaan’s Capital A/c 80,000
(Being raising of goodwill in old ratio, i.e. 1 : 2 in old
 partners)
Apr 1 Bhagwan’s Capital A/c Dr 30,000
Insaan’s Capital A/c Dr 60,000
Sagar's Capital A/c Dr 30,000
To Goodwill A/c 1,20,000
(Being goodwill written-off in new ratio, i.e. 1 : 2 : 1 in all
partners’)
Apr 1 Premium for Goodwill A/c Dr 60,000
To Bhagwan’s Capital A/c 20,000
To Insaan’s Capital A/c 40,000
(Being brought amount of goodwill is distributed between
sacrificing
ratio, i.e. 1 : 2)
Working Notes
1. Goodwill amount not brought by the Sagar = 90,000 - 60,000 = Rs. 30,000
Goodwill of the firm = 30,000 x Reciprocal of Sagar's share = 30,000 x ^ Rs. 120,000
2. ​Calculation of New Profit Sharing Ratio
Let the total share be = 1
Remaining share = 1 - 1/4 = 3/4; Bhagwan's new share = 1/3 x 3/4 = 3/12
insaan's new share = 2/3 x 3/4 = 6/12; Sagar's new share = 1/4 x 3/3 = 3/12
New ratio among Bhagwan, Insaan and Sagar = 3:6:3 or 1:2:1
Or
JOURNAL
Date Particulars LF Amt ​(Dr) Amt ​(Cr)
2019
Apr 1 Goodwill A/c (valued goodwill) Dr 6,00,000
To Arab’s Capital A/c 1,20,000
To Kharab’s Capital A/c 1,80,000
To Zero’s Capital A/c 3,00,000
(Being goodwill is raised in old profit sharing ratio, i.e. 2:3:5)
Apr 1 Arab’s Capital A/c Dr 1,80,000
Kharab’s Capital A/c Dr 3,00,000
Zero’s Capital A/c Dr 1,20,000 6,00,000
To Goodwill A/c
(Being goodwill written-off in new profit sharing ratio, i.e.
3:5:2)
Apr 1 Arab’s Capital A/c Dr 80,000
Kharab’s Capital A/c Dr 1,20,000
Zero’s Capital A/c Dr 2,00,000
To Goodwill A/c (existing goodwill) 5) 4,00,000
 (Being existing goodwill is write-off from the books in old
ratio, i.e. 2 : 3
Working Note
Arab’s sacrificing ratio = Old share - New share = 2/10 - 3/10 = 2-3/10 = -1/10 (Gaining partner)
Kharab’s sacrificing ratio = 3/10 - 5/10 = 3-5/10 = -2/10 (Gaining partner)
Zero’s sacrificing ratio = 5/10 - 2/10 = 5-2/10 = 3/10 (Sacrificing partner)
Gaining ratio between Arab and Kharab is 1 : 2 ; Zero is a sacrificing partner by —.
 LONG ANSWER TYPE I QUESTIONS (6 Marks)
19. From the following receipts and payments account, prepare income and expenditure account
for the year ending 31st December, 2019 and balance sheet
Receipts and Payments Account
Dr fortheyearending31stDecember,2019 Cr
Receipts Amt (Rs.) Payments Amt
(Rs.)
To Balance b/d 4,080 By Salaries 14,400
To Subscriptions 36,120 By Travelling Expenses 3.600
To Donations 1,800 By Stationery 1,380
To Sale of Furniture (Book value Rs. 3,600) 2,400 By Rent 9.600
420
To Entrance Fees 480 By Repairs
3.600
To Life Membership Fees 4,200 By Books Purchased
18,000
To Interest on Investment @ 5% for Full 3,000 By Building Purchased
1,080
Year By Balance c/d
52,080
52,080
Additional Information
Particulars 1 st January, 31st
2019 (Rs.) December,
2019 (Rs.)
(i) Subscription Received in Advance 600 1,920
(ii) Outstanding Subscription 1,200 2,220
(iii) Stock of Stationery 720 480
(iv) Books 8,100 9,900
(v) Furniture 9,600 4,800
(vi) Outstanding Rent 600 1,200
Ans. I​ ncome and Expenditure Account
Dr for the year ending 31 st December, 2019 Cr
Expenditure Amt Income Amt
(Rs.) (Rs.)
To Salaries 14,400By Subscription 36,120
To Travelling Expenses 3,600 (+) Outstanding for Current
To Stationery Consumed Year 2,220
Opening Stock 720 (+) Advance Received in
(+) Purchases 1,380 Previous Year 600
2,100 38,940
(-) Closing Stock (480) 1,620 (-) Outstanding for
To Rent 9,600 Previous Year (1,200)
(+) Outstanding for Current 1,200 37,740
Year
10,800 (-) Advance Received in
(-) Outstanding for Previous (600) 10,200Current Year (1,920) 35,820
Year
By Donations 1,800
To Repairs 420 By Entrance Fees 480
To Books By Interest on Investments 3,000
Opening Stock 8,100
(+) Purchases 3,600
11,700
(-) Closing Stock (9,900) 1,800
To Loss on Sale of Furniture 1,200
(3,600 - 2,400)
To Depreciation on Furniture 1,200
(9,600-3,600-4,800)
To Surplus, i.e. Excess of
Income over Expenditure 6,660
41,100 41,100
Balance Sheet
as at 31 st December, 2019
Liabilities Amt Assets Amt (Rs.)
(Rs.)
Advance Subscription 1,920 Cash . 1,080
Outstanding Rent 1,200 Outstanding Subscription 2,220
Capital Fund 82,500 Stationery 480
(+) Surplus 6,660 89,160Books 9,900
Life Membership Fees 4,200 Furniture 4,800
Investment 60,000
Building 18,000
96,480 96,480
Balance Sheet
as at 31 st December, 2018
Liabilities Amt (Rs.) Assets Amt
(Rs.)
Advance Subscription Outstanding 600 Cash 4,080
Rent Capital Fund (Balancing figure) 600 Outstanding Subscription 1,200
82,500 Stationery 720
Books 8,100
Furniture 9,600
Investment 60,000
83,700 83,700
20. (i) A, B and C shared profits in the ratio of 3 : 2 : 1. The profits of the last three years were Rs.
70,000, Rs. 42,000 and Rs. 53,000 respectively. These profits were by mistake, shared equally for
all the three years. It is now decided to correct the error. Pass necessary journal entry for the
same.
(ii) Prepare profit and loss appropriation account and partners' capital account for the year ended
31st March, 2019 from the following given information Suraj and Arihant are the two partners
sharing profit and losses in the ratio of 1/4 and 3/4 respectively. Terms of their deed are
(a) Allowed interest on capital @ 10% on their respective capital (Suraj introduce
Rs. 6,00,000 on 1st July, 2018 but Arihant introduced Rs. 20,00,000 on 1st April, 2018 as their
capital).
(b) 15% commission is allowed to the manager on profit of the firm.
(c) Suraj is a working partner and taken a salary of Rs. 50,000 per month.
(d) Both the partner withdrew Rs. 50,000 each in the year.
Net profit of the firm is calculated Rs. 80,00,000 on 31st March, 2019.
Or
Ishu and Nishu are partners sharing profits and losses in the ratio of 2 : 1. On 31st December,
2019, the partners decided to dissolve the firm. Complete the realisation account, partners' capital
account and cash account.
Dr Realisation Account Cr
Particulars Amt (Rs.) Particulars Amt (Rs.)
To Sundry Assets A/c By Sundry Liabilities A/c
Debtors 26,000 Provision for Doubtful Debts 2,000
Investments 40,000 Investment Fluctuation 20,000
Fund
Inventory 10,000 Bank Overdraft 30,000 52,000
Plant 10,000 By Ishu’s Capital A/c (Investments 35,000
taken)
Buildings 60,000 1,46,000By Bank A/c (Assets
Realised)
To Bank A/c (Bank Overdraft 30,000Debtors 26,000
Paid)
To Bank A/c (Payment of Inventory 8,500
Compensation
to Employees) 10,000Plant 8,000
To Buildings 1,00,000 1,42,500
 2,29,500 2,29,500

Dr Partners' Capital Account Cr

Particulars Ishu Nishu Particulars Ishu Nishu
(Rs.) (Rs.) (Rs.) (Rs.)
To Balance b/d — 30,000By 50,000
To By 37,333 18,667
To Bank A/c (Final By General Reserve A/c
payment)
1,16,333 33,167 1,16,333 33,167
Dr ​Bank Account Cr
Particulars Amt (Rs.) Particulars Amt
(Rs.)
To Balance b/d By
Cash in Hand 6,000 By
Cash at Bank 10,000By Ishu’s Loan A/c 34,000
To Realisation A/c (Assets Realised) 1,42,500By Ishu’s Capital A/c 81,333
By Nishu’s Capital A/c 3,167
1,58,500 1,58,500
Arts.​ ​(i) ​Adjusting Journal Entry
Date Particulars LF Amt ​(Dr) Amt ​(Cr)
C’s Capital A/c Dr 27,500 27,500
To A’s Capital A/c
(Being the adjustment made for profit divided in wrong
ratio)
Adjustment Table
Particulars A(Rs.) B (Rs.)cm
I. Amounts already Recorded (Rs.1,65,000 in 1 : 1 : 1) 55,000 55,000 55,000
II. Amounts which should have been Recorded (Rs. 1,65,000 in 3 : 2 82,500 55,000 27,500
: 1) 27,500 — 27,500
Difference (I - II) (Cr) (Dr)
Working Note
Profit = 70,000 + 42,000 + 53,000 = Rs. 1,65,000 (ii) ​Profit and Loss Appropriation Account
Dr forthe year ended 31 st March, 2019 Cr
Particulars Amt (Rs.) Particulars Amt (Rs.)
To Interest on Capital By Net Profit 80,00,000
Suraj 45,000
Arihant 2,00,000 2,45,000
To Partner’s Salary
Suraj (50,000x12) 6,00,000
To Profit Transferred to
Suraj’s Capital A/c 17,88,750
Arihant’s Capital A/c 53,66,250 71,55,000
80,00,000 80,00,000
Dr Partners' Capital Account ' Cr
Particulars Suraj Arihant Particulars Suraj Arihant
(Rs.) (Rs.) (Rs.) (Rs.)
To Drawings 50,000 50,000By Balance b/d 6,00,000 20,00,000
To Balance c/d 29,83,750 75,16,250 By Interest on Capital 45,000 2,00,000
By Partner’s Salary 6,00,000—
By P & L App. A/c (Profit) 17,88,750 53,66,250
30,33,750 75,66,250 30,33,750 75,66,250
Working Notes
1. Interest on capital of Suraj = 6,00,000 x 10/100 x 9/12 = Rs. 45,000
Interest on capital of Arihant = 20,00,000 x 10/100 = Rs. 2,00,000
2. Suraj's share of profit = 71,55,000 x 1/4 = Rs. 17,88,750
Arihant's share of profit = 71,55,000 x 3/4 = Rs. 53,66,250
Or
Dr Realisation Account Cr
Particulars Amt (Rs.) Particulars Amt (Rs.)
To Sundry Assets A/c By Sundry Liabilities A/c
Debtors 26,000 Provision for Doubtful Debts 2,000
Investments 40,000 Investment Fluctuation 20,000
Fund
Inventory 10,000 Bank Overdraft 30,000 52,000
Plant 10,000 By Ishu’s Capital A/c (Investments 35,000
taken)
Buildings 60,000 1,46,000By Bank A/c (Assets
realised)
To Bank A/c (Bank Overdraft 30,000Debtors 26,000
Paid)
To Bank A/c (Payment of 10,000Inventory 8,500
Compensation
to Employees) Plant 8,000
To ​Profit Transferred to Capital A/cs Buildings 1,00,00 1,42,500
0
Ishu 29,000
Nishu 14,500 43,500
2,29,500 2,29,500
Dr Partners' Capital Account Cr
Particulars Ishu Nishu Particulars Ishu Nishu
(Rs.) (Rs.) (Rs.) (Rs.)
To Balance b/d — 30,000By ​Balance b/d 50,000—
To ​Ishu’s Capital A/c 35,000— By ​Realisation A/c (Profit) 29,000 14,500
To Bank A/c (Final 81,333 3,167 By General Reserve A/c 37,333 18,667
payment)
1,16,333 33,167 1,16,333 33,167

Dr Bank Account Cr
Particulars Amt Particulars Amt (Rs.)
(Rs.)
To Balance b/d By ​Realisation A/c (Bank 30,000
Overdraft)
Cash in Hand 6,000 By ​Realisation A/c 10,000
(Compensation
Cash at Bank 10,000to Employees)
To Realisation A/c (Assets Realised) 1,42,500By Ishu’s Loan A/c 34,000
By Ishu’s Capital A/c 81,333
By Nishu’s Capital A/c 3,167
1,58,500 1,58,500
 
LONG ANSWER TYPE II QUESTIONS (8 Marks)
21. Raja Ltd invited applications for 1,00,000 equity shares of Rs. 10 each. The shares were issued
at a premium of Rs. 5 per share. The amount was payable as follows On application and allotment
Rs. 8 per share (including premium Rs. 3).
The balance including premium on the first and 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
(i) Applicants for 80,000 shares were allotted 60,000 shares.
(ii) Applicants for 60,000 shares were allotted 40,000 shares.
E who belonged to the first category and was allotted 300 shares, failed to pay the first call
money.
Q, 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 re-issued @ Rs. 12 per share
fully paid-up. Pass necessary journal entries and prepare cash book.
Or
On 1st June, 2019, Kartik Ltd offered for subscription 50,000 equity shares of Rs. 100 each at a
premium of Rs. 20 per share payable as given below
On application Rs. 20 per share, on allotment (including premium) Rs. 50 per share and two
months after allotment Rs. 50 per share.
Applications were received for 84,000 shares. On 1st July, 2019, the Directors proceeded to allot
shares proportionately. Of these, application for 4,500 shares were accompanied with full amount
and hence, were accepted in full and the balance allotment was made on pro-rata basis.
Excess amount paid by applicants was utilised towards allotment and call money due from them.
One of the applicants to whom 300 shares were allotted proportionately, failed to pay the call
money. His shares were forfeited on 30th November, 2019 and subsequently issued @ Rs. 130 per
share.
Record entries relating to these transactions in the journal of the company.
Ans.
Dr Cash Book Cr
Particulars Amt (Rs.) Particulars Amt (Rs.)
To Share Application and Allotment A/c 12,00,000 By Share Application and Allotment 80,000
(Application and allotment money on A/c (Refund on 10,000 share
1,50,000 shares) applications @ Rs. 8 per share)
To Share First and Final Call A/c (WN 3,78,100By Balance c/d 15,04,100
3)
■ To Share Capital A/c (Re-issue of 5,000
500
shares)
To Securities Premium Reserve A/c 1,000
15,84,100 15,84,100
JOURNAL
Date Particulars LF Amt ​(Dr) Amt ​(Cr)
Share Application and Allotment A/c Dr 11,20,000
To Share Capital A/c (1,00,000 x Rs. 5) 5,00,000
To Securities Premium Reserve A/c (1,00,000 x Rs. 3) 3,00,000
To Calls-in-Advance A/c (40,000 x Rs. 8) 3,20,000
(Being the transfer of application and allotment money to
share capital account and surplus transferred to
calls-in-advance account)
Share First and Final Call A/c (1,00,000 x 7) Dr 7,00,000
To Share Capital A/c (1,00,000x5) 5,00,000
To Securities Premium Reserve A/c (1,00,000x2) (Being the 2,00,000
first and final call due on 1,00,000 shares)
Calls-in-Advance A/c Dr 3,20,000
To Share First and Final Call A/c 3,20,000
(Being calls-in-advance adjusted to share first and final calls
account)
Date Particulars LF Amt ​(Dr) Amt ​(Cr)
Share Capital A/c (500 x Rs. 10) Dr 5,000
Securities Premium Reserve A/c (500 x Rs. 2) Dr 1,000
To Forfeited Shares A/c 4,100
 To Share First and Final Call A/c 1,900
(Being the forfeiture of 300 shares of P and 200 shares of
Q for non-payment of calls money)
Forfeited Shares A/c Dr 4,100
To Capital Reserve A/c (WN 4) 4,100
(Being the balance of shares forfeited transferred to capital
reserve)
Working Notes
1. Number of shares applied by P=80,000/60,000 x 300 = 400 shares Number of shares applied by Q =
60,000/40,000 x 200 = 300 shares
2. The surplus application and allotment money paid by P and Q which is adjusted on the first and the
final call = 200 xRs. 8 = Rs. 1,600.
3. ​Calculation of First and Final Call Money Received Amt (Rs.)
Amount due on first and final call (1,00,000 x Rs. 7) 7,00,000
(-) Calls-in-advance (3,20,000)
3,80,000
(-) Not paid by P and Q (500 x Rs. 7 - Rs. 1,600) (1,900)
3,78,100

4. ​Calculation of Amount Forfeited on 500 Shares 3,200 2,300

P applied for 400 shares and paid @ Rs. 8 (900)
(-) Transferred to securities premium reserve on 300 shares @ Rs. 3
Q applied for 300 shares and paid @ Rs. 8 2,400 1,800
(-) Transferred to securities premium reserve on 200 shares allotted to him (600)
Rs. 3
Amount to be forfeited 4,100
Or
JOURNAL
Date Particulars LF Amt ​(Dr) Amt ​(Cr)
2019
Jun 1 Bank A/c (79,500 x 20) + (4,500 x 120) Dr 21,30,000 21,30,000
To Equity Share Application A/c (Being share
application money received)
Jul 1 Equity Share Application A/c Dr 21,30,000 10,00,000
To Equity Share Capital A/c (50,000 x 20) 9.05,000
To Equity Share Allotment A/c (6,80,000 + 2,25,000) 2.25,000
To Calls-in-Advance A/c (4,500 x 50)
(Being adjustment of share application money)
Jul 1 Equity Share Allotment A/c (50,000 x 50) Dr 25,00,000 15.00. 000
To Equity Share Capital A/c (50,000 x 30) 10.00. 000
 To Securities Premium Reserve A/c (50,000 x 20)
(Being balance of allotment money due, including
premium)
Jul 1 Bank A/c Dr 15,90,000 15,90,000
To Equity Share Allotment A/c (Being balance of share
allotment money received)
Date Particulars LF Amt ​(Dr) Amt ​(Cr)
Sep 1 Equity Share First and Final Call A/c (50,000 x 50) Dr 25,00,000 25,00,000
To Equity Share Capital A/c (Being share first and
final call money due)
Sep 1 Bank A/c Dr Calls-in-Advance A/c Dr 22,60,000 24,85,000
To Equity Share First and Final Call A/c (Being share first 2,25,000
and final call money received after adjustment of
calls-in-advance and calls-in-arrears)
Nov 30 Equity Share Capital A/c (300x100) Dr 30,00015,000
To Equity Share First and Final Call A/c (300x50) 15,000
To Share Forfeited A/c (300 x 50)
(Being forfeiture of 300 shares)
Nov 30 Bank A/c (300 x 130) Dr 39,000 30,000
To Equity Share Capital A/c (300 x 100) 9,000
To Securities Premium Reserve A/c (300 x 30)
(Being re-issue of 300 forfeited shares @ Rs. 130
each)
Nov 30 Share Forfeited A/c Dr 15,000 15,000
To Capital Reserve A/c
(Being balance of share forfeited account
transferred to capital reserve)

Working Note Amt​(Rs.)

Amount received on 79,500 shares @ Rs. 20 per share 15,90,000
(-) Adjustment of application money for 45,500 allotted shares @ Rs. 20 (9,10,000)
Remaining amount adjusted on allotment for 45,500 shares 6,80,000
Amount received on 4,500 allotted shares @ Rs. 120 per share 5,40,000
(-) Adjustment of application money (4,500 shares x Rs. 20 per share) (90,000)
4,50,000
(-) Adjustment of allotment money (4500 x 50) (2,25,000)
Remaining amount adjusted with call, i.e. calls-in-advance 2,25,000
22. The balance sheet of A, B and C, who were sharing profits in the ratio of 5 : 3 : 2 as at 31st
March, 2019 was as follows
Balance Sheet
as at 31st March, 2019
Liabilities Amt (Rs.) Assets Amt (Rs.)
Creditors 1,10,000Bank 88,000
Employees Provident Fund 22,000Debtors 2,20,000
Profit and Loss A/c 1,87,000Stock 1,76,000
Capital A/cs Fixed Assets 1,32,000
A 88,000
B 1,36,400
C 72,600 2,97,000
6,16,000 6,16,000
A retired on 31st March, 2019. It was agreed that
(i) Goodwill of the firm was valued Rs. 1,76,000.
(ii) Fixed assets are to be depreciated by Rs. 5,500.
(iii) Make a provision for doubtful debts at 5% on debtors.
(iv) New profit sharing ratio of B and C will be 2 : 3.
(v) A liability for claim, included in creditors for Rs. 22,000 is settled at Rs.17,600.
The amount to be paid to A by B and C in such a way that their capitals are proportionate to their
profit sharing ratio and leave a balance of Rs. 33,000 in the bank. Prepare revaluation account and
partners' capital account.
Or
X and Y were partners in a firm sharing profits in the ratio of 3 : 2. On 1st April, 2019, they
admitted Z as a partner in the firm. The balance sheet of X and Y on that date was as under
Balance Sheet
as at 1st April, 2019
Liabilities Amt (Rs.) Assets Amt (Rs.)
Creditors 1,05,000Cash in Hand 70,000
Workmen’s Compensation 1,25,000Debtors 80,000
Fund
General Reserve 80,000Stock 60,000
Capital A/cs Machinery 50,000
X 50,000 Building 1,40,000
Y 40,000 90,000
4,00,000 4,00,000
It was agreed that
(i) The value of building and stock be appreciated to Rs. 1,90,000 and Rs. 80,000 respectively.
(ii) The liabilities of workmen's compensation fund was determined at Rs. 1,15,000.
(iii) Z brought in her share of goodwill Rs. 50,000 in cash.
(iv) Z was to bring further cash as would make her capital equal to 20% of the combined capital of
X and Y after above revaluation and adjustments are carried out.
(v) The future profit sharing ratio will be X 2/5th, Y 2/5th and Z l/5th.
Prepare revaluation account, partners' capital accounts and balance sheet of the new firm. Also,
show clearly the calculation of capital brought by Z.
Ans.
Dr Revaluation Account Cr
Particulars Amt Particulars Amt
(Rs.) (Rs.)
To Fixed Assets 5,500 By Creditors 4,400
To Provision for Doubtful Debts 11,000By Loss Transferred to
A’s Capital A/c 6,050
B’s Capital A/c 3,630
C’s Capital A/c 2,420 12,100
16,500 16,500
Dr Partners'Capital Account Cr
Particulars A (Rs.) B (Rs.) C(Rs.) Particulars A (Rs.) B (Rs.) C(Rs.)
To Revaluation A/c 6,050 3,630 2,420 By Balance b/d 88,000 1,36,400 72,600
(Loss) By Profit and Loss 93,500 56,100 37,400
A/c
To A's Capital A/c — 17,600 70,400By B’s Capital A/c 17,600— —
To Bank 2,63,450 4,510 — By C’s Capital A/c 70,400— —
To Balance c/d — 1,66,760 2,50,140By Bank A/c — — 2,12,960
2,69,500 1,92,500 3,22,960 2,69,50 1,92,500 3,22,960
0
Working Notes
1. Calculation of Gaining Ratio
Gaining ratio = New ratio - Old ratio
B= 2/5 - 3/10 = 4-3/10 = 1/10, C = 3/5 - 2/10 = 6-2/10 = 4/10 => Gaining ratio =1:4
2. A's share of goodwill = 1,76900x 5/10 = Rs. 88,000 to be contributed by B and C in 1 :4.
3. ​Calculation ​of​ ​New Capital Amt (Rs.)
Capital after adjustment of A 2,63,450
Capital after adjustment of B 1,71,270
Capital after adjustment of C 37,180
(+) Bank 33,000
5,04,900
(-) Already in bank (88,000)
4,16,900
B's new capital = 4,16,900x 2/5 =Rs.1,66,760; C's new capital = 4,16,900x 3/5 =Rs. 2,50,140
Or
Dr Revaluation Account Cr
Particulars Amt Particulars Amt
(Rs.) (Rs.)
To Profit Transferred to Capital A/cs 70,000By Building A/c 50,000
 X 42,000 Y 28,000 By Stock A/c 20,000
70,000 70,000
Dr Partners'Capital Account Cr
Particulars X (Rs.) Y (Rs.) Z(Rs.)Particulars X(Rs.) Y (Rs.) Z(Rs.)
To Balance c/d 1,96,000 1,04,000 60,000By Balance b/d 50,000 40,000—
By Revaluation A/c 42,000 28,000—
By General Reserve 48,000 32,000—
A/c
By Workmen’s
Compensation Fund 6,000 4,000
A/c
By Premium for
Goodwill A/c 50,000— —
By Cash A/c 60,000
1,96,000 1,04,000 60,000 1,96,000 1,04,000 60,000
Balance Sheet
as at 31st March, 2019
Liabilities Amt (Rs.) Assets Amt (Rs.)
Creditors 1,05,000Building 140,000
Liabilities for Workmen’s Compensation 1,15,000(+) Appreciation 50,000 1,90,000
Fund
Capital A/cs Stock 60,000
X 1,96,000 (+) Appreciation 20,000 80,000
Y 1,04,000 Machinery 50,000
•Z 60,000 3,60,000Debtors 80,000
Cash in Hand (70,000 + 1,80,000
50,000 + 60,000)
5,80,000 5,80,000
Working Notes
1. Calculation of Sacrificing Ratio
Sacrificing ratio = Old share - New share
X = 3/5 - 2/5 = 3-2/5 = 1/5; Y 2/5 - 2/5 = 2-2/5 = Nil
Here, the entire sacrifice has been made by X.
2. ​Calculation of Cash Brought in by Z as her Capital
Adjusted capital of X = Rs. 1,96,000 Adjusted capital of Y = Rs.1,04,000 Total adjusted capital ​Rs.
3,00,000
Z’s capital should be equal to 20% of the combined adjusted capital of X and Y, i.e.
3,00,000 x 20% =Rs. 60,000
 
Part B
(Financial Statement Analysis)
 
OBJECTIVE TYPE QUESTIONS (1 Mark)
 Answer the following (Q. no. 23 to 24)
23. Cash flow statement is based upon which basis of accounting?
Ans.​ ​Accrual basis of accounting
24. Interest received is considered as which type of activity?
Ans.​ ​It should be considered as cash inflow under investing activities.
 
State true or false (Q. no. 25 to 26)
Here, we ​have given some statements. You are required to mention whether these statements are
true or false.
25. Debt-equity ratio is a short-term solvency ratio.
Ans. False. Debt-equity ratio is a long-term solvency ratio.
26. Accrued incomes are recorded under other current assets.
Ans.​ ​True. Because accrued income is a part of current assets.
27. Ideal current ratio for a better financial position of company is
Ans.​ 2:1
28. Which of the following item(s) can be presented on the assets side of the balance sheet of
company?
(a) Sundry Debtors (b) Public Deposits (c) Live Stock (d) Both (a) and (c)
Ans.​ ​(d) Both (a) and (c)
29. Match the following.
Column 1 Column II
A. Gross Profit (i) Current Assets - Current Liabilities
B. Working Capital (ii) Sundry Debtors + Bills Receivables
C. Trade Receivables (iii) Net .Sales - COGS
Ans.​ ​A-(iii), B-(i), C-(ii)
 SHORT ANSWER TYPE I QUESTION (3 Marks)
30. Name any three items that can be disclosed under non-current investments.
Or​ From the following information given, prepare common size statement of profit and loss
Particulars 2018 Amt 2019 Amt
(Rs.) (Rs.)
Revenue from Operations 10,00,000 12,50,000
Depreciation and Amortisation 20,000 30,000
Changes in Inventories of Stock-in-trade 30,000 (20,000)
Other Expenses 30,000 50,000
Purchases of Stock-in-trade 7,20,000 8,70,000
Tax 50,000 50,000
Ans.​ ​The items that can be disclosed under non-current investments are (any three)
(i) Investment in equity instruments
(ii) Investment in mutual funds
(iii) Investment in debentures or bonds
(iv) Investment in property
Or
Common Size Statement
for the year ended 2018 and 2019
Particulars Absolute Amounts Percentage of Revenue
from Operations ​(Net
Sales)
2018 (Rs.) 2019 (Rs.) 2018(%) 2019(%)
1. Revenue from Operations (Net Sales) 10,00,000 12,50,000 100.00 100.00
II. Expenses 7,20,000 8,70,000 72.00 69.60
(a) Purchases of Stock-in-Trade
(b) Changes in Inventories of Stock-in-Trade 30,000 (20,000) 3.00 (160)
(c) Depreciation and Amortisation 20,000 30,000 2.00 2.40
(d) Other Expenses 30,000 50,000 3.00 4.00
Total Expenses 8,00,000 9,30,000 80.00 74.40
III. Profit Before Tax (I-II) 2,00,000 3,20,000 20.00 25.60
(-) Tax (50,000) (50,000) (5.00) (4.00)
IV. Profit after Tax 1,50,000 2,70,000 15.00 21.60
 
SHORT ANSWER TYPE II QUESTION (4 Marks)
31. From the following balance sheet, calculate the ratios.
(i) Debt-equity ratio (ii) Proprietary ratio (iii) Total assets to debt ratio
Balance Sheet
as at...
Particulars Amt (Rs.)
I. ​EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Equity Share Capital 30,00,000
(b) Reserves and Surplus 12,00,000
2. ​Non-current Liabilities
Long-term Borrowings (12% Debentures) 10,00,000
3. ​Current Liabilities
(a) Short-term Borrowings 4,00,000
(b) Trade Payables 24,00,000
Total 80,00,000
II. ​ASSETS
1. Non-current Assets
(a) Fixed Assets 33,00,000
(b) Long-term Investments 3,20,000
2. ​Current Assets
(a) Inventories 18,20,000
(b) Trade Receivables 24,80,000
(c) Cash and Cash Equivalents 80,000
Total 80,00,000
Or
(i) Current ratio of a company is 2 :1 and quick ratio is 1 :1. If value of inventory isRs. 10,000 and
prepaid insurance is Rs. 5,000, then calculate the value of current assets, current liabilities and
liquid assets.
(ii) Calculate value of opening stock and closing stock from the following information Sales Rs.
5,00,000, gross profit is 20% of net sales, return inward is Rs. 20,000, return outward is Rs. 50,000,
purchases Rs. 2,50,000 and opening stock is 2 times of the closing stock
Ans.​ (i) Debt-Equity Ratio = Debt*/Equity** = 10,00,000/42,00,000 = 0.238:1
*Debt = Long-term Borrowings (Debentures) 10,00,000
**Equity = Equity Share Capital + Reserves = 30,00,000 +12,00,000 = Rs. 42,00,000
(n) Proprietary Ratio = Shareholders' Funds */Total Assets** = 42,00,000/ 80,00,000 = 0.525:1
* Shareholders’ Funds = Share Capital + Reserves = 30,00,000 +12,00,000 = ​1​42,00,000
** Total Assets = Non-current Assets + Current Assets =Rs. 80,00,000
(​MI​) Total Assets to Debt Ratio = = Total Assets/Debt = 80,00,000/10,00,000 = 8:1
Or
(i) Current Ratio (CR) =2:1
CR = Current Assets (CA)/Current Liabilities (CL) = 2/1
= CA/CL = 2/1; CA = 2CL
Quick Ratio (QR) = 1:1
QR = Liquid Assets (LA)/Current Liabilities (CL) = 1/1
LA/CL = 1/1; LA = CL
CA -Inventories-Prepaid Insurance=CL [(??) LA =CA - Inventories - Prepaid
Expenses]
CA-10,000-5,000 = CL; CA = CL + 15,000 ...(ii)
From (i) and (ii) equation
2CL = CL + 15,000; 2CL - CL = 15,000; CL =Rs. 15,000 Put in equation (i)
CA = 2(15,000); CA=Rs. 30,000
LA = CA - Inventories - Prepaid Insurance
LA = 30,000 -10,000 -5,000; LA=Rs. 15,000
(ii) Gross Profit (GP) = Net Sales x 20/100 = (Sales - Return Inward) x 20/100
20 2 = (5,00,000 - 20,000) x — = 4,80,000 x — v 100 10
GP=Rs. 96,000
Cost of Goods Sold (COGS) = Net Sales - Gross Profit
= 4,80,000 - 96000 COGS =Rs. 3,84,000 Let the value of closing stock = x then, opening stock is = 2x
COGS = Opening Stock + Purchases - Return Outward + Direct Expenses - Closing Stock COGS = 2x +
2,50,000 - 50,000 + 0 - x; 3,84,000 = 2,00,000 + x; x = 384,000 -2,00,000 x =Rs. 1,84,000 = Closing stock
So that, opening stock is = 2(1,84,000)= Rs. 3,68,000
LONG ANSWER TYPE I QUESTION (6 Marks)
32. From the following, calculate the net cash flow from operating activities
Particulars Note 31 st March, 31st March,
No. 2019 Amt 2018 Amt
(Rs.) (Rs.)
1. EQUITY AND LIABILITIES
1. ​Shareholders’ Funds
(a) Share Capital 1 1,87,500 1,87,500
(b) Reserves and Surplus 2 77,500 (5,000)
2. ​Non-current Liabilities ​(8% Debentures) 65,000 37,500
3. ​Current Liabilities
(a) Short-term Borrowings 10,000 12,500
(b) Trade Payables 30,000 27,500
(c) Short-term Provisions 12,500 10,000
Total 3,82,500 2,70,000
II. ​ASSETS
1. Non-current Assets
(a) Tangible Fixed Assets (Net) 2,15,000 1,55,000
(b) Intangible Assets 3,750 10,000
(c) Non-current Investments 31,250 20,000
2. ​Current Assets
(a) Current Investments 1,250 3,750
(b) Inventories 48,750 25,000
(c) Trade Receivables 50,000 50,000
(d) Cash and Cash Equivalents 32,500 6,250
Total 3,82,500 2,70,000
Notes to Accounts
Particulars 2019 (Rs.) 2018 (Rs.)
1​. Share Capital
Equity Share Capital 1,37,500 1,12,500
5% Preference Share Capital 50,000 75,000
1,87,500 1,87,500
2. ​Reserves and Surplus
General Reserve 37,500 30,000
Statement of Profit and Loss 37,500 (35,000)
Securities Premium Reserve 2,500 —
77,500 (5,000)
3. ​Short-term Borrowings
8% Bank Loan 10,000 12,500
4. Short-term Provisions
Provision for Tax 12,500 10,000
5. ​Intangible Assets
Goodwill 3,750 10,000
Additional Information
During the year, a piece of machinery costing Rs. 15,000 on which depreciation charged was Rs.
5,000 was sold for Rs. 5,000. Depreciation provided on fixed assets Rs.15,000. Dividend on equity
shares @ 8% was paid on opening balance. Income tax Rs. 11,250 was provided. Additional
debentures were issued at par on 1st October, 2018 and bank loan was repaid on the same date.
At the end of the year, preference shares were redeemed at a premium of 5%.
​ alculation of Net Cash Flow from Operating Activities
Ans. C
Particulars Amt ​(Rs.)
1. Cash Flow from Operating Activities
Net Profit before Tax 1,04,000
(+) Adjustment for Non-cash and Non-operating Items Depreciation on 15,000
Fixed Assets
Loss on Sale of Machinery 5,000
Interest on Debentures 4,100
[(37,500 x 8/100) + (Rs. 27,500 x 8/100 x 6/12)] 900
Interest on Bank Loan [(Rs. 12,500 x 8/100 x 6/12) + (Rs. 10,000 x 8/100 x
6/12)]
Goodwill Amortised 6,250
Premium on Redemption of Preference Shares 1,250 32,500
Operating Profit before Working Capital Changes 1,36,500
(-) ​Increase in Current Assets and Decrease Current Liabilities ​Inventories (23,750)
​ rade
(+) ​Decrease in Current Assets and Increase in Current Liabilities T 2,500
Payables
Net Cash Flow from Operating Activities before Tax 1,15,250
(-)Tax Paid (8,750)
Net Cash Inflow from Operating Activities after Tax 1,06,500
Working Notes
1​. Calculation of Net Profit before Tax
Particulars Amt (Rs.)
Closing Balance of Profit and Loss A/c 37,500
(+) Opening Balance of Profit and Loss A/c (Debit) 35,000
(+) Transfer to Reserve 7,500
(+) Dividend on Equity Shares 9,000
(+) Dividend on Preference Shares 3,750
(+) Provision for Tax 11,250
Net Profit before Tax 1,04,000
2. Dr Tangible Fixed Assets Account Cr
Particulars Amt (Rs.) Particulars Amt (Rs.)
To Balance b/d 1,55,000By Depreciation A/c 15,000
To Bank A/c (Purchases) 85,000By Bank A/c (Sale) 5,000
By Profit and Loss (Loss) 5,000
By Balance c/d 2,15,000
2,40,000
2,40,000
3
Dr Provision for Tax Account Cr
Particulars Amt (Rs.) Particulars Amt (Rs.)
To Bank A/c (Balancing figure) 8,750 By Balance b/d 10,000
(Tax paid during the year) 12,500By Profit and Loss A/c (Tax made 11,250
To Balance c/d during
21,250the year) 21,250