» Accounts : CBSE Sample Question Papers

Time allowed: 3 hours
[Maximum marks : 100

Notes :-

(i) This question paper is divided into four parts - I, II, III and IV.
(ii) Part I is compulsory for all candidates and of the remaining parts II, III and IV you can attempt only one part.
(iii) Each part carries 50 marks.
(iv) Each question carries marks indicated against it.

Part I Accounting

Q1) Why is ‘Profit and Loss Appropriation Account’ prepared? (Marks 3)

Q2) What are the alternatives available to a company for the allotment of debentures when there is over- subscription of debentures? (Marks 3)

Q3) A and B were partners sharing profits in the ratio of 3 : 2. They admitted X and Y as new partners. A surrendered 1/3rd of his share in favour of X and B surrendered 1/4th of his share in favour of Y. Calculate the new profit sharing ratio of A, B, X and Y. (Marks 3)

Q4) A and B were partners in firm sharing profits and losses equally. Their firm was dissolved on 15th March 1999, which resulted in a loss of Rs. 30,000. On that date the capital account of A showed a credit balance of Rs. 20,000 and that of B a credit balance of Rs. 30,000. The cash account had a balance of Rs. 20,000. You are required to pass the necessary journal entries for the :
(i) transfer of loss to the capital accounts of the partners and
(ii) making final payment to the partners. (Marks 4)

Q5) M and J are partners in a firm sharing profits in the ratio of 3 : 2. They admitted R as a new partner. The new profit sharing ratio between M, J and R will be 5 : 3 : 2. R brought Rs. 25,000 for his share of goodwill premium. Pass the necessary journal entries for the treatment of goodwill? (Marks 3)

Q6) Suvidha Ltd. purchased machinery worth Rs. 1,98,000 from Suppliers Ltd. The payment was made by issue of 12% debentures of Rs. 100 each. Pass necessary journal entries for the purchase of machinery and issue of debentures when:
(i) Debentures are issued at par.
(ii) Debentures are issued at 10% discount.
(iii) Debentures are issued at 10% premium. (Marks 4)

Q7) X Limited has an authorise capital of Rs. 10,00,000 divided into equity shares of Rs. 10 each. The company invited applications for 50,000 shares. Applications for 40,000 shares were received. All calls were made and were duly received except the final call of Rs. 2 per share on 1000 shares. 500 of the shares on which the final call was not received were forfeited. Show how Share Capital will appear in the Balance Sheet of the company as per Schedule VI Part - I of the Companies Act. 1956? (Marks 5)

Q8) AB Ltd. invited applications for 1,00,000 12% preference shares of Rs. 100 each issued at a discount of 10%. The amount was payable as follows :
On Application Rs. 20
On Allotment Rs. 30
On First and Final Call - balance
Applications for 1,50,000 shares were received. Applications for 30,000 shares were rejected and pro-rata allotment was made to the remaining applicants. All calls were made and were duly received except the first and final call on 1000 shares held by Kumar. His shares were forfeited. Out of the forfeited shares 750 shares were re-issued at Rs. 120 per share fully paid up.
Pass necessary journal entries in the books of AB Ltd.

OR
The following balances appeared in the books of Madhu Ltd. as on 1st April 1997:

The Debenture Redemption Fund Investments were represented by Rs. 1,30,000 9% government securities.
The annual instalment added to the fund was Rs. 20,600. On 31st March 1998 the bank balance before the receipt of interest on investments was Rs. 40,000. On that date all the investments were sold at 84% and the debentures were duly redeemed.
Prepare Debentures Accounts, Debenture Redemption Fund Account, Debenture Redemption Fund Investment Account and Bank Account for 1997-98. The company closes its books on 31st March every year. (Marks 11)

Q9) A, B and C were partners sharing profits in the proportions of 1/2, 1/3 and 1/6 respectively. The Balance Sheet of the firm on 31st March 1998 was as follows :

C retired on the above date on the following terms :
(i) Goodwill of the firm was valued at Rs. 27,000, but it was not to remain in the books of the new firm.
(ii) Value of the patents was to be reduced by 20% and that of Plant and Machinery by 10%.
(iii) Provision for doubtful debts was to be raised to 6%.
(iv) C took over the Investments at a value of Rs. 15,800.
(v) Liability on account of Provident Fund was only Rs. 2,500.
Show the necessary journal entries for the treatment of goodwill, prepare revaluation account, capital accounts of the partners and the Balance Sheet of A and B after C’s retirement. (Marks 14)

OR
Following is the Balance Sheet of Hari, Ram and Shyam as on 31st December 1994.

Ram died on 31st March 1995. Under the partnership agreement the executor of Ram was entitled to :
(a) Amount standing to the credit of his capital account.
(b) Interest on capital which amounted to Rs. 62.50.
© His share of goodwill Rs. 3,500.
(d) His share of profit from the closing of the last financial year to the date of death which amounted to Rs. 437.50.
Ram’s executor was paid Rs. 1,800 on 1st April 1995 and the balance in four equal yearly instalments starting from 31/3/1996 with interest @ 6% p.a.
Pass the necessary Journal entries and draw up Ram’s Account to be rendered to his executor and Ram’s Executor’s account till it is finally paid.

SIS OF FINANCIAL STATEMENTS)

Q10) When does flow of funds take place? Explain briefly? (Marks 3)

Q11) A company earns a gross profit of 20% on cost. Its credit sales are twice its cash sales. If the credit sales are Rs. 4,00,000, calculate the gross profit ratio of the company. (Marks 4)

Q12) Find out the sources and application of funds from the details given below extracted from the Balance Sheet of Arun Ltd:

Additional Information :
During the year a piece of machinery costing Rs. 30,000 on which accumulated depreciation was Rs.10,000 was sold for Rs. 25,000 (Marks 5)

Q13) Briefly explain the meaning and significance of any two of the following ratios :
(i) Return on Investment,
(ii) Debt - Equity Ratio and
(iii) Stock Turnover Ratio. (Marks 5)

Q14) Prepare a comparative income statement of X Ltd., with the help of the following information:

(Marks 5)

Q15) What is meant by analysis of financial statements? Briefly explain horizontal analysis.? (Marks 6)

Q16) Calculate any three of the following ratio with the help of he following information :
(i) Operating ratio, (ii) Current ratio, (iii) Capital turnover ratio and (iv) Debt to total funds ratio.
Information: Equity Share Capital Rs. 5,00,000; 12% Debentures Rs. 6,00,000; 9% Preference Share Capital Rs. 3,00,000; General Reserve Rs. 1,00,000; Sales Rs. 10,00,000; Opening stock Rs. 80,000; Purchases Rs. 6,00,000; Wages Rs. 1,00,000; Closing Stock Rs. 1,00,000; Selling and distribution expenses Rs. 20,000; Other current assets Rs. 5,00,000 and Current liabilities Rs.3,00,000 (Marks 6)

Q17) Prepare a Cash Budget of Rama Ltd. for the months of January to March 1999 from the following information:

Additional Information : (i) Expected cash balance as on 1/1/1999 Rs. 75,000 .
(ii) Suppliers allowed credit of two months and a credit of two months is allowed to the customers.
(iii) Lag in payment of wages one month. (Marks 6)

Q18) From the following Balance Sheets of Rajan Ltd., prepare Cash Flow Statement:

Liabilities

1997 (Rs.)

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Q1) List any two items appearing on the credit side of a partner’s capital account, when capitals are fluctuating. (Marks 2)

Q2) (a) A and B are partners in a firm sharing profits in the ratio of 3 : 2. They had advanced to the firm a sum of Rs. 30,000/- as a loan in their profit sharing ratio on July 1st, 1998. The partnership deed is silent on the question of interest on loan from partners. Compute the interest payable by the firm to the partners, assuming the firm closes its books on December 31st. (Marks 3)

Q2) (b) A, B and C are partners sharing profits in the ratio of 5 : 4 : 1. C is given a guarantee that his share of profits in any given year would be Rs. 5000/-. Deficiency, if any, would be borne by A and B equally. The profits for the year 1998 amounted to Rs. 40000/-. Pass necessary entries in the books of the firm. (Marks 3)

Q3) On April 1st, 1998 an existing firm had assets of Rs. 75,000/- including cash of Rs. 5,000/-. The partner’s capital account showed a balance of Rs. 60,000/- and reserve constituted the rest. If the normal rate of return is 10% and the goodwill of the firm is valued at Rs. 24,000/- at 4 year purchase of super profits, find the average profits of the firm. (Marks 3)

Q4) As a director of a Company you had invited applications for 30,000 equity shares of Rs. 10/- each at a premium of Rs. 2/- each. The total application money received at Rs. 2/- per share was Rs. 72,000/-. Name the kind of subscription. List the three alternatives for allotting these shares. (Marks 3)

Q5) A limited company has issued Rs. 1,00,000/- 9% Debentures at a discount of 6%. These debentures are to be redeemed equally, spread over 5 annual installments. Show Discount on Issue of Debentures A/C for five years. (Marks 5)

Q6) A, B and C were partners in a firm. On 1.1.98 their capitals stood at Rs. 50,000/-, Rs. 25,000/- and Rs. 25,000/- respectively. As per the provisions of the partnership deed :
(a) C was entitled for a salary of Rs. 1,500/- pm.
(b) Partners were entitled to interest on capital at 5% p.a.
© Profits were to be shared in the ratio of capitals.
The net profit for the year 1998 of Rs. 45,000/- was divided equally without providing for the above terms.
Pass an adjustment entry to rectify the above errors. (Marks 4)

Q7) A company offered 10,000 shares of Rs. 10/- each payable as Rs. 2/- on application, Rs. 3/- on allotment, Rs. 3/- on first call and Rs. 2/- on final call.
The public applied for 15,000 shares. The shares were allotted on pro-rata basis to the applicants of 12,000 shares. All shareholders paid the allotted money excepting one shareholder who was allotted 200 shares. These shares were forfeited. The first call was made thereafter. The forfeited shares were re-issued @ Rs. 9 per share Rs. 8/- paid up. The final call was not yet made.
You are required to prepare the cash book and pass journal entries.

OR
On 1.1.95 a company issued 10,000 9% debentures of Rs 100/- each at a discount of 5%. The terms of issue provide for redemption of Rs. 1,00,000/- worth Debentures every year commencing from the end of 1996 either by purchasing in the open market or by draw of lots at the company’s option. The company also wrote off Rs. 10,000/- during the year 1995 and 1996 from the Debentures Discount Account. During the year 1996 the company purchased 400 debentures @ Rs. 95/- and 500 Debentures @ Rs. 96/- for cancellation. Journalise these transactions and also show how you would deal with the profits on redemption of debentures. (Marks 10)

Q8) M and N were partners sharing profits in the ratio of 3 : 2. On the date of dissolution their capitals were - M: Rs. 7,650/-, N: Rs. 4,300/-. The creditors amounted to Rs. 27,500/-. The balance cash was Rs. 760/-. The assets realised Rs. 25,430/-, the expenses on dissolution were Rs. 1,540/-. All partners were solvent.
Close the books of the firm, showing the Realisation, Capital and Cash accounts. (Show the working clearly).

OR

Rohit and Bal sharing profits in the ratio of 5 : 3 had following balance Sheet as on December 31,1998:

On January 1st, 1999, they decided to admit Khosla into the partnership giving him 1/5 th share. He brings in Rs. 25,000/- as his share of capital. The partners decide to revalue the assets as follows :
Goodwill Rs. 25,000/-, Plant Rs. 12,500/-, Debtors Rs. 15,500/-, Stock Rs. 16,250/-, Building Rs. 20,000/-, Furniture Rs. 1,000/-, Bills Receivables Rs. 6,250/-. The partners also decided not to show goodwill in the books of the new firm.
You are required to show the journal entries and prepare the Revaluation A/C. (Marks 12)

Q9) The following figures were extracted from the Trial Balance of X Ltd.
Share Capital 10,000 equity shares of Rs. 10/- each fully paid :

You are required to draw up the liabilities side of the Balance Sheet, according to the requirements of the Companies Act.

OR
What is a contingent liability? Where is it shown in the Balance Sheet? Give three examples of contingent liabilities. (Marks 5)

Q10) Define the terms ‘Funds’ and ‘Flow’ in the context of Funds Flow Statement. (Marks 2)

Q11) Explain the meaning and significance of :
(a) Return on Equity
(b) Interest Coverage Ratio (Marks 4)

Q12) From the following information, prepare a comparative Balance Sheet of Depth Ltd.: (Marks 5)

Q13) The current ratio of a company is 2 : 1. State giving reasons which of the following would improve, reduce, or not change the ratio:
(a) repayment of current liabilities,
(b) purchasing goods on cash,
© sale of office equipment for Rs. 4,000/- (Book value Rs. 5,000/-),
(d) sale of goods Rs. 11,000/- (cost Rs 10,000/-),
(e) payment of dividend. (Marks 5)

Q14) State the reasons whether the following would result in an inflow, outflow or no flow of funds. Attempt any four :
(a) Issue of debentures;
(b) Debentures converted as preference shares;
© Amount transferred to provision for taxation;
(d) Tax refund;
(e) Repaid loan on mortgage. (Marks 5)

Q15) From the following information, prepare a Cash-Budget for the months of January, February and March, 1998:

Selling Price is Rs. 80/- per unit and Purchase Price is Rs. 50/- per unit,
Office Expenses are 1,500/- per month. Drawings are Rs. 600/- per month. Every month 10% of the sales are on credit for one month and the remaining for cash. Cash in hand on January 1, 1998 is Rs. 12,000/-. There is no opening and closing stock. (Marks 6)

Q16) What is analysis of financial statements? State any four of its limitations. (Marks 6)

Q17) The following information is provided to you:

From the above information, calculate any three of the following ratios :
(a) Debt Equity Ratio
(b) Capital Turnover Ratio
© Interest coverage ratio
(d) Return on Investment
(e) Debt to total funds ratio (Marks 6)

Q18) From the following Balance Sheets prepare Schedule showing changes in Working Capital and Funds Flow Statement :

Balance Sheet

Additional information :
(a) Depreciation charged on fixed assets was Rs. 60,000/-.
(b) A machine of book value of Rs. 40,000/- was sold for Rs. 30,000/-. (Marks 12)

Q 1 What is meant by goodwill? Name any two methods of valuation of goodwill. (Marks 2)

Q 2 R and S are partners sharing profits in the ratio of 5 : 3. T joins the firm as a new partner. R gives 1/4 of his share and S gives 2/5 of his share to the new partner. Find out the new ratio. (Marks 3)

Q 3 State any three purposes for which share premium amount can be utilised. (Marks 3)

Q 4 P, Q and R are partners in a firm. Their capital accounts stood at Rs. 30,000, Rs. 15,000 and Rs. 15,000 respectively on 1 January, 1996. As per the provisions of the deed :
(i) R was to be allowed a remuneration of Rs. 3,000 p.a., (ii) Interest at 5 % p.a. was to be provided on capital, (iii) Profits were to be divided in the ratio of 2 : 2 : 1. Ignoring the above terms, net profit of Rs. 18,000 for the year ended 1996 was divided among the three partners equally.
Pass an adjustment entry to rectify the error. Show the working clearly. (Marks 4)

Q 5 X Limited issued 12% debentures of Rs. 10,00,000 at 8% discount redeemable at par. Assume that the debentures are redeemed by drawing method in the following manner:

Prepare discount on issue of debentures account. (Marks 5)

Q 6 Rearrange the following in the form of a company balance sheet as per Schedule VI Part I of the Company Act 1956. (Marks 5)

Q 7 (a) M and N are partners in a firm. M has given a loan of Rs. 8,000 to the firm on 1 April, 1994. The partnership deed is silent upon the question of provision of interest on partner’s loan. Compute the amount of interest payable on the loan advanced by M to the firm assuming the books are closed on 31 December each year.

(b) P, R and S are in partnership sharing profits in the ratio of 4 : 3 : 1 respectively. It is provided in the partnership deed that, on the death of any partner, his share of goodwill is to be valued at half of the profits credited to his account during the previous four completed years. R dies on January, 1997. The firm’s profit for the last four years 1993 : Rs. 1,20,000, 1994 : Rs. 80,000, 1995 : Rs. 40,000, 1996 : Rs. 80,000, Determine the amount that should be credited to R in respect of his share of goodwill. (Marks 3 + 3)

Q 8 K Limited has been registered with an authorised capital of Rs. 2,00,000 divided into 2000 shares of Rs. 100 each of which, 1000 shares were offered for public subscription at a premium of Rs. 5 per share, payable as under :
Rs
on application 10
on allotment 25 (including premium)
on first call 40
on final call 30

Applications were received for 1800 shares, of which applications for 300 shares were rejected outright; the rest of the applications were allotted 1000 shares on pro-rata basis. Excess application money was transferred to allotment.

All the monies were duly received except from Sundar, holder of 100 shares, who failed to pay allotted and first call money. His shares were later forfeited, and reissued to Shyam at Rs. 60 per share Rs. 70 paid up. Final call has not been made.

Pass necessary cash book and journal entries in the books of K Limited.

OR

M Ltd. issued on January 1, 1992 1000 12% debentures of Rs. 100 each repayable at the end of 3 years at a premium of 5%. It was decided to create a sinking fund for the redemption of debentures. The investment are expected to earn interest at 5% p.a.
Reference to the sinking fund table shows that Re. 0.37209 invested at 5% p.a. amounts to Re. 1 at the end of three years, the investments were sold at Rs. 70,000 and the debentures were redeemed. Prepare debentures account, sinking fund account and sinking fund investment account for the three years. (Marks 10)

Q 9 J, S and R were in partnership sharing profits and losses in the ratio of 3 : 2 : 1. Their Balance Sheet as on 31 December, 1994 was as follows :

It was agreed to dissolve the firm, and the terms of the dissolution were :
(i) J took over building at book value and agreed to pay off creditors.
(ii) Accrued interest was not collected whereas there was a contingent liability of Rs. 600 which was meet.
(iii) Other assets realised : plant: Rs. 25,000; stock : Rs. 5,000; debtors: Rs. 4,600
(iv) Realisation expenses: Rs. 600
Prepare realisation account, capital accounts and cash account.

OR

A, B and C were carrying on partnership business sharing profits in the ratio of 3 : 2 : 1 respectively. On 31 December, 1996, the Balance Sheet of the firm stood as follows:

B retired on the above mentioned date on the following terms :
(i) Building to be appreciated by Rs. 7,000.
(ii) Provision for doubtful debts to be made 5% on debtors.
(iii) Goodwill of the firm is valued at Rs. 18,000 and adjustment in this respect to be made in the continuing partner’s capital accounts without raising goodwill account.
(iv) Rs. 3,000 to be paid to B immediately and the balance in his capital account to be transferred to his loan account.
Prepare revaluation account, capital accounts, cash account, and the balance sheet after B’s retirement. (Marks 12)

Q 10 Indicate which of the following transactions would result in (a) Source, (b) Use, and © Neither Source nor use of the fund :
(i) Collection from debtors Rs. 5,000, (ii) Sale of old machinery Rs. 2,000, (iii) Redemption of debentures Rs. 10,000. (Marks 3)

Q 11 Compute cash from operations from the following details : (Marks 3)

Q 12 Explain briefly the meaning and significance of (i) Return on Investment, and (ii) Fixed Assets Turnover Ratio. (Marks 4)

Q 13 Prepare a Comparative Income Statement from the following information: (Marks 5)

Q 14 The debt-equity ratio of X Ltd. is 1 : 2. Which of the following would increase, decrease or not change the debt-equity ratio :
(a) Issue of Equity Shares, (b) Cash received from debtors, © Sale of goods on cash basis, (d) Redemption of Debentures, (e) Purchases of goods on credit. (Marks 5)

Q 15 What is meant by analysis of financial statements? How is it important from the viewpoint of creditors and management? (Marks 6)

Q 16 From the following information calculate Stock Turnover Ratio, Operating Ratio and Capital Turnover Ratio : (Marks 6)

Q 17 From the following, prepare a Cash Budget for January, February and March, 1998:

Estimated cash balance on 1 January 1998 Rs. 10,000. In January a new machinery is to be purchased at Rs. 20,000 on credit, to be paid in two equal installments in February and March. (Marks 6)

Q 18 From the following Balance Sheet, prepare (i) Schedule of changes in Working Capital and (ii) Funds Flow Statement :

Balance Sheet

Additional information :

(a) Plant costing Rs. 15,000 was sold for Rs. 6,000. Accumulated Depreciation on the same was Rs. 5,000.
(b) No Depreciation was provided on Buildings during the year. (Marks 12)

Q1) Give any three points of distinction between revaluation account and realisation account. (Marks 3)

Q2) Can forfeited shares be issued at a discount? If so, to what extent? (Marks 3)

Q3) Ashoka Ltd. purchased machinery costing Rs. 1,35,000. It was agreed that the purchase consideration be paid by issuing 12% debentures of Rs. 100 each. Assume debentures have been issued (i) at par and (ii) at a discount of 10%. Give necessary journal entries. (Marks 3)

Q4) X, Y and Z are partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. Their fixed capitals were Rs. 3,00,000, Rs. 2,00,000 and Rs. 1,00,000 respectively. For the year 1996 interest on capital was credited to them @ 10% p.a. instead of 8% p.a.. Showing your working notes clearly, pass the necessary adjusting journal entry. (Marks 4)

Q5) A, B and C were partners in a firm sharing profits in proportion of their capitals which were Rs. 4,00,000, Rs. 3,00,000 and Rs. 2,00,000 respectively. They had a joint life policy of Rs. 2,70,000 on which the annual premium paid was considered as an expense. On 1.1.1996, B died. On that date there was a debit balance of Rs. 90,000 in their Profit and Loss Account. Pass necessary journal entries on B’s death. (Marks 4)

Q6) X, Y and Z were partners in a firm sharing profits in the ratio of 3 : 2 : 1. Z retired and the new profit sharing ratio between X and Y was 1 : 2. On Z’s retirement the goodwill of the firm was valued at Rs. 30,000. Pass necessary journal entry for the treatment of goodwill on Z’s retirement without opening goodwill account.
They admitted C into partnership on this date. New profit sharing ratio is agreed as 3 : 2 : 1. C brings proportionate capital after the following adjustments :
(i) C brings Rs. 10,000 in cash as his share of goodwill.
(ii) Provision for doubtful debts is to be reduced by Rs. 2,400.
(iii) There is an old typewriter valued at Rs. 2,600. It does not appear in the books of the firm. It is now to be recorded.
(iv) Patents are valueless.
Prepare Revaluation A/c, Capital and the opening Balance Sheet of A, B and C.

OR

A, B and C were partners in a firm and shared profits in the ratio of 3 : 2 : 1. On 31.12.1996 their Balance Sheet was as follows:

On this date the firm was dissolved. A was appointed to realise the assets. A was to receive 5% commission on the sale of assets (except cash) and was to bear all expenses of realisation.

A realised the assets as follows :

Debtors Rs. 30,000, Stock Rs. 26,000, Investments 75% of book value, Plant Rs. 42,750. Expenses of realisation amounted to Rs. 4,100.

Commission received in advance was returned to the customers after deducting Rs. 3,000.
Firm had to pay Rs. 7,200 for outstanding salary not provided for earlier. Compensation paid to employees amounted to Rs. 9,800. This liability was not provided for in the above Balance Sheet. Rs. 25,000 had to be paid for Providend Fund.

Prepare Realisation Account, Capital Accounts and Cash Account.

Q7) The following balances have been extracted from the books of Rama Ltd. on 31.12.1996 :
Share Capitals Rs. 10,00,000, Share Premium Rs. 1,00,000 12% Debentures Rs. 5,00,000 Creditors Rs. 2,00,000, proposed dividend Rs. 50,000, Profit and Loss Account (Dr.) Rs. 50,000, Live Stock Rs. 9,00,000, Government Bonds Rs. 4,00,000, Work in progress Rs. 4,00,000 and Discount on issue of 12% Debentures Rs. 1,00,000.
Prepare the Balance Sheet of the Company as per Schedule VI Par I of the Companies Act 1956.
(Marks 5)

Q8) A and B were partners with profit sharing ratio of 2 : 1. The Balance Sheet of the firm on 31.3.1996 was as follows :

They admitted C into partnership on this date. The new profit sharing ration is agreed as 3 : 2 : 1.
C brings in proportionate capital after the following adjustments:
i) C brings Rs. 10,000 in cash as his share of goodwill.
ii) Provision for doubtful debts is to be reduced by Rs. 2,400.
iii) There is an old typewriter valued at Rs. 2,600. It does not appear in the books of the firm.
It is now to be recorded.
iv) Patents are now valueless. Prepare Revaluation Account, Capital Accounts and the opening
Balance Sheet of A, B and C. (Marks 12)

OR

A, B and C were partners in a firm and shared profits in the ratio of 3 : 2 : 1. On 31st December, 1996 their Balance Sheet was as follows:

On this date the firm was dissolved. A was appointed to realise the assets. A was to received commission on sale of assets (except cash) and was to bear all expenses of realisation.
A realised the assets as follows:
Debtors Rs. 30,000, Stock Rs. 26,000, Investments 75% of books value, Plants Rs. 42,750. For realisation amounted to Rs. 4,100. Commission received in advance was returned to the customer deducting Rs. 3,000. Firm had to pay Rs. 7,200 for outstanding salary no provided Compensation
paid to employees amounted to Rs. 9,800. This liability was not provided for the Balance Sheet Rs. 25,000 had to be paid for Provident Fund.
Prepare Realisation Account, Capital Accounts and Cash Account.

Q9) XY Ltd. invited applications for issuing 50,000 equity shares of Rs. 10 each.
The amount was payable as follows :
On Application Rs. 3 per share
On Allotment Rs. 4 per share
On First and Final Call Rs. 3 per share
Applications were received for 75,000 shares and pro-rata allotment was made as follows :
Applicants for 40,000 shares were allotted 30,000 shares on pro-rata basis.
Applicants for 35,000 shares were allotted 20,000 shares on pro-rata basis.
Ramu to whom 1,200 shares were allotted out of the group applying for 40,000 shares failed to pay the allotment money. His shares were forfeited immediately after allotment.
Shamu who had applied for 700 shares out of the group applying for 35,000 shares failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares 1,000 shares were re-issued @ Rs. 8 per share fully paid up. The re-issued shares included all the forfeited shares of Shamu.
Pass necessary journal entries to record the above transactions. (Marks 12)

OR

The Balance Sheet of Seema Ltd. disclosed, the following information on 1.1.1995:
15% Debentures Rs. 15,00,000
Debenture Redemption Fund Rs. 11,60,000
15% Debenture Redemption Fund Investment Rs. 11,60,000

The annual contribution to the Debenture Redemption Fund was Rs. 1,30,000 for the year 1995 and 1996. The debentures were redeemable on 31st December, 1996. On 31st December, 1996 the investments were sold for Rs. 13,80,000 and the debentures were redeemed.

Prepare Debenture Account, Debenture Redemption Fund Account and Debenture Redemption Fund Investment Account for the year 1995 and 1996.

Q10) Give any three points of distinction between “Funds Flow Statement” and “Cash Flow Statement".

Q11) The following is the position of the current assets and current liabilities of Z Ltd.:

The company incurred a loss of Rs. 45,000 during the year. Calculate cash from operations.

Q12) How does ratio analysis become less effective due to price level changes? (Marks 4)

Q13) A Company has a loan of Rs. 20,00,000 as part of its Capital employed. The interest payable on the loan is 15% and the ROI of the company is 25%. The rate of income tax is 40%. What is the gain to the share-holder due to loan raised by the company? (Marks 5)

Q14) Following are the Balance Sheets of Radha Ltd. as on 31.12.1995 and 31.12.1996.

You are required to prepare a comparative Balance Sheet on the basis of the information given in the above Balance Sheets. (Marks 5)

Q15) “Analysis of Financial Statement is affected by window dressing and the personal ability of the analyst.” Comment. (Marks 6)

Q16) The following are the summarised profit and loss A/c of Hindustan Products for the year ended 31.12.1996 and the Balance Sheet of the Company as on that date:

PROFIT AND LOSS ACCOUNT

BALANCE SHEET

Calculate the following ratios :
(i) Quick Ratio (ii) Stock Turnover Ratio and (iii) Return on Shareholders Investments

formation prepare Cash Budget for the month of April, May and June, 1997.

Q1) Define partnership. State the main provisions of the Partnership Act relating to partnership accounts in the absence of partnership deed. (Marks 3)

Q2) A and B are partners sharing profits in the ratio of 3 : 2 with capitals of Rs. 50,000 and Rs. 30,000 respectively. Interest on capital is agreed @ 6% p.a. B is to be allowed an annual salary of Rs. 2,500. During 1995, the profits of the year prior to calculation of interest on capital but after charging B’s salary amounted to Rs. 12,500. A provision of 5% of the profits is to be made in respect of manager’s commission.
Prepare an account showing the allocation of profits and partner’s capital account. (Marks 5)

Q3) A and B are partners sharing profits in the ratio of 3 : 2. C is admitted as a partner. The new profit - sharing ratio among A, B and C is 4 : 3 : 2. Find out the sacrificing ratio.

Q4) Mention the items that may appear on the debit side of the capital account of a partner when the capitals are fluctuating. (Marks 2)

Q5) A, B and C are partners sharing profits and losses in the ratio of 2 : 3 : 5. On 31st March, 1995, their Balance Sheet was as follows :

They admit D into partnership on the following terms :
1. Furniture, Investments and Machinery to be depreciated by 15%.
2. Stock is revalued at Rs. 48,000.
3. Goodwill to be valued at Rs. 26,000.
4. Outstanding rent amounted to Rs. 1,800.
5. Prepaid salaries Rs. 800.
6. D to bring Rs. 32,000 towards capital for 1/6 share and partners to re-adjust their capital accounts on the basis of their profit-sharing ratio.
7. Adjustment of capitals to be made by cash.
Prepare Revaluation Account, Partners, Capital Accounts, Cash Account and Balance Sheet of the new firm.

ners sharing profits and losses in the ratio of 3 : 2 : 1. On 31st March, 1995, their Balance Sheet was as follows :

The firm was dissolved on 1st April, 1995.
1. There was a Joint Life Policy of Rs. 60,000. The policy was surrendered for Rs. 15,000.
2. The assets were realised as under : Stock Rs. 47,000; Goodwill Rs. 12,000; Debtors 60% of the book value; Machinery Rs. 90,000.
3. Liabilities were paid in full.
4. The expenses on realisation amounted to Rs. 400.
You are required to prepare the Realisation A/c, Partners’ Capital Accounts, and Bank A/c. headings will you show the following items in the Balance Sheet of the company:
(i) Goodwill (ii) Unclaimed Dividends
(iii) Provision for Tax (iv) Share Premium Account
(v) Loose Tools./strong> Explain the meaning of “Debentures issued as collateral security” by company. Show its treatment in Balance Sheet. (Marks 3)