Maharashtra State Board Book Keeping & Accountancy Sample Question Paper - 1 Academic Year: 2024-2025 Note: 1. All Questions are compulsory. 2, The figure to right indicates marks. 3, Draw concept maps with pens on the Answer sheet 4, Start a new question on a new page. Q1 | Attempt all of the following sub-questions: 1A | Select the correct options and rewrite the statements: 1.A.1. As per SEBI guidelines minimum amount payable on share application should be of Nominal Value of shares. 1.10% 2.15% 3.2% 4.5% Solution: As per SEBI guidelines, minimum amount payable on share application should be 5% of Nominal Value of shares. 1.A.2. When there is no partnership agreement between partners, the division of Profits takes place in ratio. 1. Equal 2, capital ratio 3. initial contribution 4, experience and tenure of partnerSolution: When there is no partnership agreement between partners, the divis takes place in equal ratio. 1.A.3. Find the Odd one. 1, The decrease in Furniture 2. Patents written off 3. Increase in Bills Payable 4. RDD written off Solution: RDD written off 1.A4. The Indian Partnership Act is in force since_. 1.1933 2.1932 3.1956 4.1934 5.1984 6.2000 7.1981 Solution: ‘The Indian Partnership Act is in force since 1932. Explanation: The Indian Partnership Act came into force on 1* October 1932 which is applicable to the whole of India except the state of Jammu and Kashmir. 1.A.5. In case of dissolution assets and liabilities are transferred to__A/c. 1. Bank A/c 2, Partner's capital A/c 3. Realisation A/c4, Partner's current A/c Solution: In case of dissolution, assets and liabilities are transferred to Realisation A/c. Explanatio All the assets (except cash or bank balances) are transferred to the debit side, whereas all the liabilities (except bank overdraft) are transferred to the credit side of Realisation Account. Thereafter, at the time of realisation, the assets so realised are shown on the credit side and the settlement of liabilities is shown on the debit side. Q1.B | Answer the following questions in only ‘one’ sentence each: 1.B.1. What do you mean by raising the goodwill at the time of admission of a new partner? Solution: Raising the Goodwill at the time of admission of a new partner means debiting Goodwill Account up to the value it is raised and crediting. Old partners Capital Accounts in their old ratio in the books of the firm 1.B.3. What is New Ratio? Solution: ‘The ratio in which profits or losses are shared by the continuing partners after retirement of a partner is called New Profit Sharing ratio. 1.B.4. Answer in one sentence only. What is dissolution of partnership firm? Solution: Dissolution means termination of the existing relationship between the partners of a firm, It means that the business will come to an end and the firm will wind up its business. Accordingly, all the assets will be realised and liabilities will be paid off. It can be dissolved either voluntarily by the partners or compulsorily by the order of the court. 1.B.5. Partnership deed is silent in respect of sharing of profits and losses; in this, case what will be the ratio in which profits and loss to be shared? Solution:In case if Partnership Deed is silent about the sharing proportion the Profits and Losses to be shared by Partners in Equal Proportion. 1.C | Write a word /term/phrase as a substitute for each of the following statements : 1.C.1, Write a word /phrase/term which can substitute the following statement. Reputation of business measured in terms of money. Solution: Goodwill 1.C.2. Write the Word/Term/Phrase which can substitute the following statement: Debit balance of revaluation Account. Solution: Loss on revaluation 1.C.3. Write the word/phrase/term, which can substitute the following sentence. Donation received for a specific purpose. Solution: Specific donation / Capital receipt. Explanation: Donations are sometimes given for a specific purpose. The donor specifies the purpose for utilising the amount he donated, e.¢,, Donations for Building Funds, Donations for Prize Funds, Donations for Sports Tournaments, etc. Such Donations should be shown on the Liabilities side of the Balance Sheet. 1.C4. Give a word/term/phrase which can substitute the following statement: A person who represents the deceased partner. Solution: Legal heir or executor Explanation:The person who represents the deceased partner is is legal heir or executor. This person is entitled to receive the amount due to the deceased partner. 1.C.5. Write a word /phrase/term which can substitute the following statement. Legal Agreement in which partners are legally Liable for the acts done by them. Solution: Partnership Deed LD. Give Specimen of Bill of Exchange: 1. Drawer: Mr. Ram Das, Pune 2. Drawee: Mr. Kapil Deo. Mumbai 3. Amount: & 1,05,000 4. Tenure : 3 Months 5. Date of Bi rd March. 2020 6. Date of Acceptance: 7th March, 2020 Solution: Bill of Exchange Stamp Mr. Ram Das Pune 3rd March, 2020 %1,05,000 ‘Three months after date pay to me or my order the sum of Rupees One Lakh Five thousand only for the value received. sd/- (Ram Das) To, Kapil Deo, Mumbai"Accepted" sd/- (Mr. Kapil Deo) Date: 7th March, 2020 Q2.A. Following is the balance sheet of Arun, Suresh and Samyak who were sharing profits and losses equally. Liabilities: Amount (3) | Assets ‘Amount (%) Capital A/c: Goodwill 12,000 ‘Arun 43,600 Plant & Machinery 10,000 Suresh 35,000 Furniture 20,000 Samyak 32,000 Land & Building 70,000 General Reserve | 13,500 Computer 17,500 Creditors 20,300 Debtors 18,000 | 17,100 Bills Payable | 10,600 Less: RDD ‘900 Bank 8,400 155,000 155,000 1,900, Suresh. Solution: iii, Plant & Machinery be revalued at € 9,400. iv. Goodwill of the firm be valued at € 16,500. ii, Debtors were all good and RDD was no longer required. On 1 April 2019, Suresh retired from the firm on the following terms: i. Land and Building be appreciated by 10% and Computer be reduced by % v. Furniture were sold at € 21,800 and part payment of € 15,000 was made to Suresh by RTGS. and balance was transferred to his Loan Account. Prepare Revaluation A/c, Partners’ capital A/c and the Balance Sheet of Arun andDr Revaluation Account cr Particulars ‘Amount (%) | Particulars ‘Amount (3) ‘To Computer A/c 1,900 By Land & Building A/c | 7,000 ‘To Machinery A/c 600 By RDD A/c ‘900 To Partners By Furniture Ac 7,800 Capital A/c (pr Arun 2,400 | 7,200 Suresh 2,400 Samyak 2,400 9,700 9,700 Dr. Partner's Capital Accounts cr i 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 ' 1 1 1 1 ' 1 1 1 1 1 1 1 1 1 1 1 ! 1 1 ! Particular [Arun |Sures |Samya | Particular | Arun | Sures | Samya i s @ h(Z) kD s @ h@ (k® 1 1 1 ' 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 ' 1 1 1 1 ' 1 1 1 1 ' 1 To Bank 15,000 | By Balance | 43,600 | 35,000 32,000 Ale b/d To Suresh 25,400 | ByGeneral [4500 [4500 | 4,500 Loon A/e Reserve Alc To Balance | 52,000 | 43,400 By 2,400 | 2,400 | 2,400 c/a Revaluatio nAfe (Profit) By 1,500 [1,500 | 1,500 Goodwill Alc 52,00 | 43,40 | 40,400 52,00 | 43,40 | 40,400Liabilities Amount(%) [Assets | Amount () Creditors 20,300 Bank 15,200 Bills Payable | 10,600 Debtors | 18,000 Suresh's Loan 25,400 Computer | 15,600 Ale Capital Account: Land& — | 77,000 Building ‘Arun 52,000 Plant& [9,400 Machiner y Suresh, 43,400 Goodwill | 16,500 1,51,700 1,51,700 OR share Profits and Losses in the ratio of their Capital. Balance Sheet as on 31st March, 2019 Liabilities | Amount (3) | Assets ‘Amount (2) Capital A/c: Machinery 20,000 Nana 50,000 Building 55,000 Nani 20,000 Stock 12,000 Sona 30,000 Debtors | 12,000 | 11,000 Creditors | 10,000 Less: RDD | 1,000 Bills Payable | 5,000 Cash 17,000 1,15,000 1,15,000 Sona retires from the business on 1st April 2019 and the following Adjustment were agreed. 1. Stock is to be valued at 92% of its Book Value. ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' It t ' ' ' ' ' ' ' It ' t ' ' It ' t ' ' It ' ' ' ' Il t 2.B. Following is the Balance Sheet of the firm of Nana, Nani and Sona who ' ' It ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' It ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' It6. RDD is to be maintained at 10% on debtors. The value of Building is to be appreciated by 20%, ‘The Goodwill of the firm be fixed at ¥ 12000. Sona's share in the same be adjusted in the accounts of continuing partners in gaining Ratio. The entire Capital of the new firm be fixed at 1,60,000 between Nana and Nani in their New Profit sharing ratio which is fixed at 3:1 making adjustment in Cash. Amount payable to Sona paid in cash. Prepare: Revaluation Account, Partnership Capital Account and Balance Sheet of the reconstituted firm. Solution: Dr In the Books of the Firm cr Revaluation Account Particulars Amount (%) | Particulars | Amount (2) To Stock A/c 960 By Building A/c | 11,000 To RDD A/c 200 To Profit transferred to Partners Capital A/c: Nana 4,920 | 9,840 Nani 1,968 Sona 2,952 11,000 11,000 Dr. Partner's Capital Accounts Cr Particular | Nana Nani Sona | Particulars | Nana Nani Sona s @ @ @ @ @ @ To 3,000 | 600 By Balance | 50,000 | 20,00 | 30,00 Goodwill b/d 0 0 AleToCash - - 36,55 | By 4,920 | 1,968 | 2,952 Ale 2 Revaluati nA/c (Profit) To 1,20,00 | 40,00 | - By : - 3,600 Balance | 0 0 Goodwill cd Ac ByCash | 68,080 | 18,63 Ale 2 1,23,00 | 40,60 | 36,55 1,23,00 | 40,60 | 36,55 Balance Sheet as on 1st April, 2019 Liabi Amount — | Assets Amount i 1 I ' I I 1 I ' I I 1 I ' 1 I 1 ' ! I ' I I i I i I I ' I i I I ' I i I I H @ @ | Creditors 10,000 | Cash 67,160 I 1 I ' I I I I 1 1 I I I 1 I ' I I I I ' I I 1 I ' I I 1 I i I I 1 I ! I I 1 I ! I Bills 5,000 Machinery 20,000 Payable Capital A/c: Stock 12,000 | 11,040 Nana 1,20,000 | 1,60,000 | Less: Reduction | 960 Nani 40,000 Debtors. 12,000 | 10,800 Less: RDD 1,200 Bui ing 55,000 | 66,000 ‘Add: Appreciation | 11,000 1,75,000 1,75,000 Working Note: Calculation of Gaining Ratio: Old Ratio =5:2:3New Ratio = 3:1 Gain Ratio = New Ratio - Old Ratio Nana's Gain Ratio = 1 Nani's Gain Ratio = > 4 Gain Ratio = 10: 2ie.5:1 Q3.A. Dino, Manu and Ramu are Partners Sharing Profits and Losses in the Ratio 2 : 2: 1. They decided to dissolved the firm on 31st March, 2020. When their position was as under. Balance Sheet as on 31st March, 2020 Amount Amount Liabilities Assets @ @ Capital si Me Building 78,000 Dino 26,000 Computer 45,000 Manu 22,000 Debtors 20,000 Ramu —_ 18,000 66,000 Goodwill 35,000 Creditors 80,000 Bank 8,000 Bill Payable 40,000 1,86,000 1,86,000 The firm was dissolved on above date and the following is the result of realisation. i, The Assets were realised as Building % 40,000, Computer % 30,000, Debtors & 10,000. ii, _ Realisation expenses amounted to % 2,000.Prepare Necessary ledger account to close the books of the firm. All partners were insolvent The following amount was recovered from them Dino % 2,000 and Manu % 2,000. i 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 ! Solution: ! Dr In the books of Dino, Manu and Ramu Cr. 1 Realisation Account ' ! Particulars Amount | Particulars ‘Amount ' @ @ 1 ! To Sundry Assets By Bank A/c: ni Afe: 1 ! Building 78,000 | 1,78,000 | Building 40,000 I Computer 45,000 Computer 30,000 I Debtors 20,000 Debtors 10,000 | 80,000 1 1 Goodwill 35,000 By Partner's Capital A/c | (Loss on Realisation ! Transferred.) ! To Bank A/c 2,000 | Dino 40,000 | 1,00,000 1 (Realisation I Expenses Paid) 1 1 Manu 40,000 1 ! Ramu 20,000 I 1,80,000 1,80,000 1 1 1 ! Dr Partner's Capital Accounts cr t Particulars |Dino [Manu | Ramu | Particulars [Dino | Manu | Ramu I @ @ @ @ @ @ t To 40,000 | 40,000 | 20,000 | By Balance | 26,000 | 22,000 | 18,000 1 Realisation b/d I A/c (Loss ! Realisation) ' 1 1 1 1 ' 1 1 1 1 ' 1i 1 ' ' 1 1 ! ! 1 1 ! ' ' ' 1 1 ! ' 1 1 I I 1 ByBank [2,000 | 2,000 I ! ! 1 ais 1 I By 12,000 | 16,000 | 2,000 I I Deficiency I I Ale 1 ! ! ! 40,000 | 40,000 | 20,000 40,000 | 40,000 | 20,000 ' ' ' I I I Dr Bank A/e Ce 1 ! ! ! Particulars ‘Amount (3) | Particulars ‘Amount (3) ! | To Balance b/d 8,000 By Realisation A/c | 2,000 | ! ! ' To Dino's Capital A/c | 2,000 By Creditors A/e | 60,000 ' I I ! To Manu’s Capital A/c | 2,000 By Bills Payable A/c | 30,000 ! I To Realisation A/c | 80,000 I I I ! 92,000 92,000 ! 1 1 1 1 ' ' I Dr Creditors A/c ce I 1 1 ! Particulars Amount (3) | Particulars | Amount (®) ! ! To Bank A/c 60,000 | By Balance b/d | 80,000 ! i To Deficiency A/c | 20,000 i 1 ' ' 80,000 80,000 ' 1 1 ! ' I Dr Bills Payable A/c Cr I ' ' It Particulars ‘Amount (3) | Particulars ‘Amount (2) It ! ! I ‘To Bank A/c 30,000 By Balance b/d | 40,000 I I To Deficiency A/c | 10,000 H ! ! ! 40,000 40,000 ! ' ' I I ' ' 1 1 ! ! ' ' 1 1 ' i 1 1 ! ! ' ' 1 1 ' i I I1 1 1 1 1 1 1 1 1 1 I Dr. Deficiency A/c Cr 1 1 Particulars ‘Amount (3) | Particulars ‘Amount (%) ! To Dino's Capital A/c | 12,000 By Creditors A/c | 20,000 I 1 To Manu's Capital A/c | 16,000 By Bills Payable A/c | 10,000 1 1 To Ramu’s Capital A/c | 2,000 ! 30,000 30,000 | 1 1 1 OR | Q3.B. Akshay drew a bill on Deepak for % 25,000 on 23" December, 2019, for 3 { months. Deepak accepted the same and returned it to Akshay. On the due date i the bill was duly honoured by Deepak. 1 1 Give journal entries in the books of Akshay and Deepak under each of the following ! cases: I 1 A. If Akshay retained the bill till maturity. ! B. If Akshay discounted the bill with the bank at 6% pa. on the same day. ! C. If Akshay sent the bill to bank for collection on 23" December, 2019. I 1 D. If Akshay endorsed the bill to his creditor Viren. 1 1 Solution: ! Journal Entries | In the books of Akshay ! Date Particular LF. | Amount | Amount H Dr(®) | Cr ® 1 1 2019 Bills Receivable A/c 25,000 | - ! Dec. 23 1 1 To Deepak's A/c - 25,000 ! (Being bill drawn on Deepak for 3 months | and Acceptance received) ! (a) 2020 | Cash/Bank ...Dr. 25,000 | - I Mar. 26 1 1 1 1 1 1 1 1 1 1 1 1 1 1To Bills Receivable A/c 25,000 (Being Deepak’s Acceptance honoured on the due Date) (b) 2019 |BankA/e ..Dr. 24,625 | - Dec. 23 Discount A/e ..Dr. 375 = To Bills Receivable A/c 25,000 (Being Deepak's Acceptance Discounted with the Bank at 6% p.a. for 3 months) (2019 | Bill Sent for Collection A/c Dr. 25,000 | - Dec. 23 To Bills Receivable A/c 25,000 (Being Deepak's acceptance sent to the bank for collection) 2019 Mar. | Bank A/c ..Dr. 25,000 | - 26 To Bill Sent for Collection A/c 25,000 (Being bill honoured on the due Date) (@) 2019 | Viren’s A/c ..Dr. 25,000 | - Dec. 23 To Bills Receivable A/c 25,000 (Being Deepak’s Acceptance endorsed to Viren) Journal Entries In the books of Deepak Date Particular LF. | Amount | Amount Dr(®) | Cr@® 2019 Akshay's A/e ..Dr. 25,000 | - Dec. 23To Bill Payable A/c 25,000 (Being Bill Accepted) 2020 Mar. | Bill Payable ..Dr. 25,000 | - 26 To Cash/Bank A/c 25,000 (Being our Acceptance honoured on the due date) (b) 2019 | Bill Payable A/c ..Dr. 25,000 | - Dec. 23 To Bank A/e 24,625 To Discount 375 (Being Our Acceptance Discounted with the Bank at 6% p.a. for 3 months) (0) 2019 | Bill Payable A/c ..Dr. 25,000 | - Dec. 23 To Bill Sent for Collection A7e 25,000 (Being Our acceptance sent to the bank for collection) 2019 Mar. | Bill Sent for Collection A/c ...Dr. 25,000 | - 26 To Bank A/c 25,000 (Being our Acceptance honoured on the due Date) (@) 2019 | Bill Payable A/c ..Dr. 25,000 | - Dec. 23 To Viren’s Ac 25,000 (Being Our Acceptance endorsed to Viren)Q4.A. Reliance company Limited invited applications for 50,000 Equity Shares of 2 100 each at par, payable as follows: On Application 30 On Allotment 40 On First & Final Call | ¥ 30 The public applied for 35,000 shares and all these were allotted. All money due were collected with an exception of first & final call on 4000 shares, these were forfeited. All forfeited shares were re-issued by the Directors at & 80 per share. Pass Journal Entries in the Books of Reliance Company Limited. Solution: Journal Entries In the Books of Reliance Co. Ltd. Date Particulars LE Debit Rs. Credit Rs. Bank A/e ..Dr 10,50,000 ‘To Share Application A/c 10,50,000 (Being Application money on 35000 Equity shares & 30 per share received) Equity Share Application ..Dr. 10,50,000 ‘To Equity Share Capital A/c 10,50,000 (Being equity share application money on 35000 shares transferred to Equity share Capital) Equity Share Allotment A/c ..Dr. 14,00,000 To Equity Share Capital A/c 14,00,000 (Being equity share allotment money on 35000 shares % 40 per Share due) Bank A/c ..Dr. 14,00,000‘To Equity Share Allotment A/c 14,00,000 (Being Allotment money on 35000 equity shares 2.40 per Share received) Equity Share First & Final Call A/e ..Dr. 10,50,000 To Equity Share Capital A/c 10,50,000 (Being equity share allotment money on 35000 shares % 30 per share due ) Bank A/e ..Dr 9,30,000 To Equity Share First & Final Call A/c 9,30,000 (Being Equity Share First & Final Call money on 31,000 equity Shares @ % 30 per share received) Equity Share Capital A/e ..Dr. 4,00,000 To Equity Share First & Final Call A/c 1,20,000 ‘To Share Forfeiture A/c 2,80,000 (Being forfeiture of 4000 equity shares due to non-payment of first & final call) BankA/e ..Dr 3,20,000 Share Forfeiture A/c ..Dr. 80,000 To Equity Share Capital A/c 4,00,000 (Being re-issue for 4000 forfeited shares @ 280 per share) Share Forfeiture A/c ..Dr. 2,00,000 ‘To Capital Reserve A/c 2,00,000 (Being balance on share forfeiture A/c transferred to capital reserve A/c)OR 4.B. Give comparison between Manual Accounting Process and Computerized Accounting Process. Solution: Basis of Manual Accounting Computerized Accounting Difference 1. Meaning Manual accounting isthe __| In this system of computerized system in which we maintain physical register of journal and ledger for keeping the records of each business transaction. accounting, we use computer and different accounting software for digital record of each business transactions. 2. Calculation make total of In this system, all calculations are done manually. For example, to find the balance of any ledger account. We will make total of the debit and credit side and then we will find its difference for showing balance. In computerized accounting system, our duty is to record the business transactions manually in the database. All the calculations are done by computer system. We need not calculate each account's balance, itis calculated automatically by computerized accounting system. 3. Ledger Accounts Ledger accounts are prepared by posting transactions in appropriate ledger manually with the help of journal. There may be mistakes while transferring the amount manually. In computerized accounting system, once a voucher is entered it will automatically be printed. Thus there is no chance of taking or transferring wrong amount. ial Balance In this system of accounting, we have to take the balances Computerized accounting system will produce Trial Balance automatically.ofall ledger A/c, in Trial Balance Statement. 5. Adjustment Entries Record Both adjustment journal entries and its posting in the ledger accounts will be done manually one by one. Only adjustment entries will be passed in the computerized accounting system, posting in the Ledger accounts will be done automatically. 6. Financial Statements We have to make the financial statements manually by carefully transferring Trial Balance’s figures into Trading, Profit and Loss Account and Balance Sheet. We need not prepare financial statement manually; financial statements will be generated automatically. It will also automatically change after each voucher entry in the system. This facility is not available in the manual accounting system. 7. Closing the Books After the year end accountants prepare financial statements for the accounting period. The balances are to be carried forward manually, to next year, In computerized accounting software financial reports are auto-generated for the accounting period. The balances are automatically carried forward to next year. Q5.A. Rakesh, Mahesh & Mukesh were partners in a firm sha ing profits and losses in the ratio of 3 : 2: 1 respectively. Balance Sheet as on 31st March, 2019 as under: Liabilities | Amount (%) | Assets Amount (3) Capital A/c: Plant & Machinery 40,000 Rakesh 30,000 Motor Truck 20,000 Mahesh 20,000 Investment 18,000 Mukesh 10,000 Bank Loan | 20,000 Debtors 16,000 | 14,000 Creditors | 8,000 Less: RDD 2,0001 1 1 1 1 1 1 1 1 i Bills Payable | 18,000 Bank 14,000 { 1,06,000 1,06,000 1 1 Mukesh Died on 30th June, 2019 and following adjustments were made: ! i, Assets were revalued as: Plant & Machinery % 44,000, Motor Truck % 18,000, I Investment & 17,000. ! ii, All debtors were good. ! ili, Goodwill of the firm valued at two times the average profits of the last five i years. No Goodwill account to be shown in the books of the firm. ! iv. Mukesh's share of profit up to his death to be calculated on the basis of ! average profits last two years. 1 v. Five years Profits were - I year 2 6,000, Il year % 11,000, Ill year & 7,000, IV year % 12,000, V year € 24,000 respectively. 1 Prepare Revaluation A/c, Partners Capital A/c and Balance Sheet as on 1 st July, I 2019. I Solution: { Dr Revaluation Account Cr Particulars ‘Amount (%) | Particulars ‘Amount (3) t To Motor Truck 2,000 By Plant & Machinery | 4,000 I To Investment 1,000 By RDD A/c 2,000 To Partners i Capital A/c (profit): ! Rakesh 1,500 | 3,000 I Mahesh 7,500 I Mukesh 500 ' 6,000 6,000 | i Dr Partner's Capital Accounts cr. 1 1 ' 1 1 1 1 i 1 1 1 1 i 1Particula | Rakes | Mahes |Mukes | Particulars | Rakes | Mahes | Mukes rs n@ |n@ [h@ h@ [h@ |he@ To 2,400 | 1,600 By Balance | 30,000 | 20,000 | 10,000 Mukesh's b/d Capital Afc To 15,250 | By 1,500 | 1,000 | 500 Mukesh's Revaluation Executors A/c (Profit) Ale To 29,100 | 19,400 By Rakesh's 2,400 Balance Capital A/c cfd (Goodwill) By Mahesh’s 1,600 Capital A/c (Goodwil 0 By Profit & 750 Loss Suspense A/c 31,50 | 21,00 | 15,250 31,50 | 21,00 | 15,250 0 0 0 0 Balance Sheet as on Ast July, 2019 Liabilities ‘Amount | Assets ‘Amount @ @ Capital Account: Plant & Machinery 44,000 Rakesh 29,100 Motor Truck 18,000 Mahesh 19,400 Debtors 16,000Mukesh’s Executors Loan | 15,250 Investment 17,000 A/c Creditors 8,000 Bank 14,000 Bank Loan 20,000 Profit & loss Suspense 750 Afe Bills Payable 18,000 1,09,750 1,09,750 Working Note: 1. Valuation of Goodwill: Total Profits = 6,000 + 12,000 + 7,000 + 11,000 + 24,000 = % 60,000 60,000 Average Profit = °° = & 12,000 Goodwill = 12,000 x 2 = = 24,000 1 6 Goodwill is divided and debited to Rakesh and Mahesh’s Capital A/c in the Ratio of 3:2 Mahesh’s Share in Goodwill = 24,000 x 4,000 Rakesh = 4,000 x 2 = ¥2,400 2 Mahesh = 4,000 x = 2. Calculation of Mukesh’s Share in profit from 1st April, 2019 to 1st July, 2019 21,600 Total profit of current year = average profit of last 2 year profit 12, 000 + 24,000 2 _ 36,000 2= % 18,000 Proportional Profit = 18, 000 x = = 24,500 Mukesh’s Share in profit = 4,500 x 2 = 750 5.B, Prem, Verma, Sharma, were partners sharing profits and losses in the ratio 2: 1: 1 Their Balance Sheet as on 31st March 2019 is as follows. Balance Sheet as on 31st March, 2019 Liabilities Amount (%)| Assets | Amount (2) Creditors, 20,000 Premises | 2,40,000 Bank Loan 90,000 Debtors | 2,00,000 Bill Payable 10,000 Furniture | 60,000 General Reserve | 64,000 Stock | 1,00,000 Capital Accounts: Cash 2,00,000 Prem 2,40,000 Verma 2,00,000 Sharma 1,76,000 8,00,000 8,00,000 years. 1. Prem died on 30th June 20: Prem’s share of profit is to be calculated on the average profit of the last two 2. Prem’s share in the Goodwi at three times of the average profits of the last four years. The profits were. 19 and the following adjustments were made Il of the firm be given him. Goodwill will be valued 2015-16 | € 1,60,000 2016-17 %1,20,000 2017-18 | % 80,000 2018-19 40,000 3. Premises be valued at € 2,80,000 and R.D.D. of € 8,000 be created on debtors. 4, Drawing of Prem up to the date of his death were € 15000 per month.5. Interest on capital is allowed at 10% pa. and to be charged on drawing at % 4000. 6. The amount due to Prem be transferred to his executors loan account. Prepare: Prem's Capital Account, Give worl Interest on capital. 1g of Prem’s share in Goodwill, and Solution: Dr Prem’s Capital Account Cr. Particulars ‘Amount (3) | Particulars “Amount (%) To Drawings A/e | 45,000 ByBalanceb/d | 2,40,000 To Interest on 4,000 By General 32,000 Drawings Reserve A/c To Prem’s Executors | 4,02,500 | By Profit and Loss | 16,000 loan A/c Adjustment A/c Bylntereston | 6,000 Capital A/e By Goodwill A/c | 1,50,000 By Profit and Loss | 7,500 Suspense A/c 4,51,500 4,51,500 Working Note: 1. Calculation of Prem’s share in the goodwill of the Firm: Total Profit ‘a. Average Profit = No. of Years _ 4,00, 000 4 = 71,00,000 b. Goodwill of Firm = Average Profit x No. of Year Purchases= 1,00,000 « 3 = €3,00,000 «. Prem’s Share of Goodwill = Goodwill of the firm x Prem's share = 3,00,000 x 2 = 1,50,000 2. Calculation of Prem's share in the profit: Average Profit of the last two years Total Profit a. Average Profit = ————— No. of Years _ 80,000 + 40, 000 - 2 _ 1,20,000 7 2 = 760,000 b. Average Profit = & 60,000 3 months profit is = 60,000 x = % 15,000 Prem’s share is ; = 15,000 x Z = £7,500 3. Calculation of Interest on Prem’s Capital: Prem died on 30th June 2019 His capital balance is 2,40,000 for three months 2,40,000 x 2°. x 3 - 6,000 40,000 x =~ x = = 26, 100 ~ 12 Q6. The following is the Receipts and Payments Account of Young Pensioner's Association. Leh for the year ended 31st March, 2020. Dr Receipts and Payments Account for _| Cr. the year ending 31st March 2020Receipts Amount | Amount | Payments Amount 3 z z To Balance b/d 7,000 | By Stationery 8,000 To Subscriptions By Postage 1,000 2018-19 5,000 [90,000 | By Picnic Exp 8,000 2019-20 83,000 By Salaries 8,000 2020-21 2,000 By Annual General | 4,500 meeting Expenses To Entrance fees 13,000 _| By Traveling 7,500 (Capital Receipt) Exp To Donations 60,000 | By Rent 12,000 To Legacies 40,000 | By Charity 7,800 To Interest on Deposit 7,000 | BySundryExp. | 3,200 To Picnic Receipts 10,000 | By Fixed Deposit | 1,10,000 By Furniture 50,000 ByBalancec/d | 7,000 2,27,000 2,27,000 Adjustments: pa 1,700. 3. Outstanding picnic receipts & 7,500. 4, Stock of stationery on 1-4-2019 was % 350 and on 31st March, 2020 was 1. Outstanding subscription for current year % 7,000. 2. Furniture was purchased on 1st Oct, 2019 and itis to be depreciated by 10 % 5. 50 % of legacies and full amount of donations are to be capitalised. With the above information, you are required to prepare Income and Expenditure Account for the year ended 31st March 2020.Solution: Dr. In the Books of Young Cr Pensioner’s Association, Leh. Income and Expenditure Account for the year ended 31st March, 2020 Expenditure | Amount | Amount | Income Amount | Amount z z z z To Stationery By Subscriptions 83,000 | 90,000 used Opening stock | 350 6,650 | Add: Outstanding | 7,000 ‘Add: Purchases | 8,000 By Legacies 40,000 | 20,000 8,350 Less: 50% 20,000 Capitalised Less: Closing | 1,700 By Interest on 7,000 stock Deposits Receipts To Picnic Exp. 8,000 Add: Outstanding | 7,500 To Salaries 8,000 To Annual 4,500 General meeting Expenses To Traveling Exp. 7,500 To Rent 12,000 To Charity 7,800 To Sundry Exp. 3,200 To Depr. on 2,500 Furniture 1 1 1 ' 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 ! 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 To Postage 1,000 | By Picnic 10,000 | 17,500 ' 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 ' 1 1 1 1 ! 1 1 1 1 ! 1To Surplus 73,350 (Excess of Income over Exp) 134,500 1,34,500 Working Note: Calculation of Depr. on Furniture 10 % Depr. on 8 50,000 for 6 months & 2,500. Hint: Picnic Receipts + Outstanding Receipts are credited to Income and Expenditure A/c and Picnic Expenses are deducted from Picnic Receipts. z Picnic Receipts 10,000 ‘Add: Outstanding 7,500 17,500 Less: Picnic Expenses | 8,000 9,500 Q7. Sun and Moon are partners sharing profits and losses equally. From the following trial balance and additional information prepare trading and Profit and Loss Account for the year ended 31st march 2020 and balance sheet as on that date. Trial Balance as on 31st March, 2020 Debit Balance Amount (3) | Credit Balance ‘Amount (3) Stock (1/4/2019) | 65,000 General Reserve 14,500 Bills Receivable 28,000 Capital: Wages and Sala 9,000 Sun 1,60,000 Sundry Debtors | 1,32,500 | Moon 1,20,000Bad-debts 1,000 Creditors 98,000 Purchases 1,48,000 | RD.D. 1,800 Motor car 68,000 Sales 2,85,500 Machinery 114,800 | Outstanding Wages 700 Audit Fees: 1,200 Purchases Returns 4,000 Sales Return 2,000 Discount 1,800 Discount 2,300 Building 75,000 Cash at Bank 12,000 10% Investment | 20,000 (Paid for 9 months) Royalties 3,000 6,86,300 6,86,300 Adjustment and Additional Information: 1. 2, 3. 4, 5. 6. Closing Stock 40,000. . Depreciate Building and Machinery @ 5% and 3% respectively. Bills Receivable included dishonoured bill of € 3000. . Goods worth € 1000 taken by sun for personal use was not entered in the books of accounts. Write off = 1800 as Bad debts and maintain R.D.D. at 5% on Sundry Debtors, Goods of ® 6000 were sold but no entry was made in the books of accounts. Solution: ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' It t ' ' ' ' ' ' ' It ' t ' ' It ' t ' ' It ' ' ' ' i ' Advertisement 4,500 ' ' It ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' It ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' Iti 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Dr. In the Books of Sun and Moon cr. 1 I ‘Trading and Profit and Loss A/c I ! for the year ended 31st March 2020 ! 1 1 1 Particulars ‘Amount | Particulars ‘Amount 1 1 1 ! @ @ 1 1 To Opening 65,000 _| By Sales 2,85,500 | 2,89,500 1 | Stock | I To Purchases | 1,48,000 | 1,43,000 | Add: Unrecorded | 6,000 I ' Sales ' 1 ! I Less: Purchase | 4,000 2,91500 I i Return i | Less: Goods | 1,000 Less: Sales 2,000 | ! taken for Return ! i personal use i 1 ! ! To Royalties 3,000 _| By Closing Stock 40,000 ! i To Wages and 9,000 i 1 Salaries 1 1 1 ! To Gross Profit 1,09,500 ! 1 1 “ ! 3,29,500 3,29,500 ! i To 4,500 |6,000 | By Gross Profit 1,09,500 i ! Advertisement b/d ! | ‘Add: o/s for 3 | 1,500 By Interest 2,000 H 1 months Accrued on 1 I Investment I 1 1 1 To Audit fees 1,200 | By Discount 1,800 1 1 1 1 To 1 I Depreciation ' ' on: ' 1 1 I Bui 3,750 | 7,194 I 1 1 1 1 ' ' 1 1 1 1 1 1 1 1 ' i 1 1 1 1 1 1 1 1 ' i 1 1Machinery | 3,444 To Bad debts 1,000 7,985 (old) Add: New Bad | 1,800 Debts Add: New 6,985 RDD 9,785 Less: RDD 1,800 (old) To Discount 2,300 To Net Profit (Transferred to Capital A/c’s) Sun 44311 [88,621 Moon 44,310 113,300 1,13,300 Balance Sheet as on 31st March, 2020 Liabilities Amount | Assets ‘Amount @ @ Capitals: Sun 1,60,000 | 2,03,311 | Building 75,000 71,250 ‘Add: Net Profit Less: (Goods taken over by sun of Personal use) 44,311 1,000 Less: Depreciation 5% Machinery 3,750 114,800 | 1,11,356Capital Moon 1,20,000 | 1,64,310 | Less: Depreciation | 3,444 3% Add: Net Profit 44,310 Bills Receivable 28,000 25,000 General Reserve 14,500 Less: Bills 3,000 Receivable Dishonoured o/s 1500 | Motor Car 68,000 Advertisement Exp. (3 months) Creditors 98,000 | Cash at Bank 12,000 Outstanding 700 Closing Stock 40,000 Wages Sundry Debtors 1,32,500 | 1,32,715 ‘Add: Bills 3,000 Receivable 1,35,500 Add: Unrecorded | 6,000 Sales 1,41,500 Less: Bad debts 1,800 (New) 1,39,700 Less: RDD 5% 6,985 (new) 10% Investment | 20,000 | 22,000 ‘Add: Interest 2,000 Accrued 482,321 4,82,3211 1 1 1 1 1 1 1 1 1 I Working Notes: 1 1 1. Adjustment No. 3, 5, and 6 are co-related with sundry debtors. So, wl 1 calculating RDD 5% on Sundry Debtors, Amount of dishonour of Bills 3,000 and ' goods sold but not recorded % 6,000 will be added into the Sundry Debtors, then ! new Bad Debts will be deducted and then less RDD (New) 5% 6,985 after 5% RDD 1 should be calculated. ! Ist effected Sundry Debtors 1,32,500 I 1 ‘Add: Bills dishonoured 3,000 ! Add: Unrecorded sales 6,000 I 141,500 I 1 ‘Less: Bad debts (New) 1,800 ! 1,39,700 ! Less: RD.D (New) 5% 6,985 i ! (Shown on Assets side of Balance Sheet) | €1,32,715 ! 1 1 2. 1 1 ‘2nd effected Sundry Debtors | 1,000 | ‘Add: Bad debts (New) 1,800 I 1 Add: New RDD 6,985 ' 1 9,785 ! Less: RDD (Old) 1,800 H 1 (Shown on Debit side 77,985 1 of Profit and Loss A/c) I 1 1 1 1 1 1 1 1 1 1 1 1 ' 1 1 1 1 i 1 1 1 1 i 1