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General Instructions:

 1) This question paper contains two parts A and B.

2) Part A is compulsory for all.

3) Part B has two options-Option-I Analysis of Financial Statements and Option-II Computerized Accounting.

4) Attempt only one option of Part B.

5) All parts of a question should be attempted at one place. 

Section A

(i) This section consists of 17 questions.​

(ii) All the questions are compulsory.​

(iii) Question Nos. 1 to 6 are very short-answer questions carrying 1 mark each.​

(iv) Question Nos. 7 to 10 carry 3 marks each.​

(v) Question Nos. 11 and 12 carry 4 marks each.​

(vi) Question Nos. 13 to 15 carry 6 marks each.​

(vii) Question Nos. 16 and 17 carry 8 marks each.​

Section B

(i) This section consists of 6 questions.​

(ii) All questions are compulsory​

(iii) Question Nos. 18 and 19 are very short-answer questions carrying 1 mark each.​

(iv) Question Nos. 20 to 22 carry 4 marks.​

(v) Question No. 23 carries 6 marks.​

Question 1
  • Q1

    Suman and Sudha were partners in  a firm sharing profits equally. Their fixed capitals were Rs 50,000 and Rs 25,000 respectively. The partnership deed provided interest on capital at the rate of 12% per annum. For the year ended 31st March, 2016, the profits of the firm were distributed without providing interest on capital.
    Pass necessary adjustment entry to rectify the error.  (1) 

    VIEW SOLUTION

  • Q2

    Z Ltd. forfeited 1000 equity shares of Rs 10 each for the non-payment of the final call of Rs 2 per share. Calculate the maximum amount of discount at which these shares can be reissued.   (1) 

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  • Q3

    State the two situations in which interest on partner's capital is generally provided.  (1) 

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  • Q4

    List the categories of individuals other than the minors who cannot become the members of a partnership firm.   (1) 

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  • Q5

    Reena and Raman are partners in a firm sharing profits in the ratio of 4 : 3. They admitted Roma as a new partner. The new profit sharing ratio between Reena, Raman and Roma was 3: 2: 2. Raman surrendered 13rd of his share in favour of Roma. Calculate Reena's sacrifice.   (1) 

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  • Q6

    Y Ltd. invited applications for issuing 2000, 9% debentures of Rs 100 each at a discount of 10%. The whole amount was payable at the time of application. Applications for 2400 debentures were received and pro-rata allotment was made to all the applicants.  
    Pass necessary journal entries for the issue of debentures.  (1) 

    VIEW SOLUTION

  • Q7

    C India Ltd. purchased machinery from B India Ltd. Payment to B India Ltd. was made as follows:
    (i) By issuing 10,000 equity shares of Rs 10 each at a premium of 20%.
    (ii) By issuing 1000, 9% debentures of Rs 100 each at a discount of 5%.
    (iii) Balance by giving a bank draft of Rs 37,000.

    Pass necessary journal entries in the books of C India Ltd. for the purchase of machinery and payment to B India Ltd.   (3) 

    VIEW SOLUTION

  • Q8

    Raj Motors Ltd. converted its 400, 12% debentures of Rs 100 each issued at a discount of 6% into equity shares of Rs 10 each issued at a premium of 25%. Discount on issue of 12% debentures had not yet been written off.

    Showing your working notes clearly, pass necessary journal entries for the above transactions in the books of Raj Motors Ltd.   (3) 

    VIEW SOLUTION

  • Q9

    Gagan Ltd. is registered with an authorised capital of Rs 15,00,00,000 divided into 1,50,00,000 equity shares of Rs 10 each. Subscribed and fully paid up share capital of the company was Rs 5,00,00,000. For providing employment to the local youth and for the development of rural areas of Jharkhand State, the company decided to set up a food processing unit in Hazaribagh. The company also decided to set up skill development centres at Ranchi, Hazaribagh and Ramgarh. To meet its new financial requirements the company decidded to issue 2,00,000 equity shares of Rs 10 each and 2000, 12% debentures of Rs 1,000 each. The issue of shares and debentures was fully subscribed. A shareholder holding 500 shares failed to pay the final call of Rs 3 per share.

    Show the share capital in the Balance Sheet of the company as per the provisions of Schedule III of the Companies Act, 2013. Also, identify any two values that the company wants to propagate.    (3) 

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  • Q10

    P, Q, R and S were partners in a firm sharing profits in the ratio of 5 : 3 : 1 : 1. On 1st January, 2017, S retired from the firm. On S's retirement the goodwill of the firm was valued at Rs 4,20,000. The new profit sharing ratio between P, Q and R will be 4 : 3 : 3.
    Showing your working notes clearly, pass necessary journal entry for the treatment of goodwill in the books of the firm on S's retirement.    (3) 

    VIEW SOLUTION

  • Q11

    Pankaj and Naresh were partners in a firm sharing profits in the ratio of 3 : 2. Their fixed capitals were Rs 5,00,000 and Rs 3,00,000 respectively. On 1.1.2017, Saurabh was admitted as a new partner for 15th share in the profits. Saurabh acquired his share of profit from Pankaj. Saurabh brought Rs 3,00,000 as his capital which was to be kept fixed like the capitals of Pankaj and Naresh.
    Calculate the goodwill of the firm on Saurabh's admission and the new profit sharing ratio of Pankaj, Naresh and Saurabh. Also, pass necessary journal entry for the treatment of goodwill.   (4) 

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  • Q12

    X, Y and Z were partners in a firm sharing profits in the ratio of 5 : 3 : 2. The firm closes its books on 31st March every year. On 30.9.2016, Z died. The partnership deed provided that on the death of a partner his executors will be entitled to the following :    (4)

    (i) Balance in his capital account and interest @ 12% per annum. On 1.4.2016 balance in Z's Capital account was Rs 80,000.

    (ii) His share in the profits of the firm in the year of his death, which will be calculated on the basis of rate of net profit on sales of the previous year which was 25%. The sales of the firm till 30.9.2016 were Rs 4,00,000.

    (iii) His share on the goodwill of the firm. The goodwill of the firm on Z's death was valued at Rs 3,00,000.

    The partnership deed also provided that the following deductions will be made from the amount payable to the executor of the deceased partner:

    (i) His drawing in the year of his death. Z has withdrawn Rs 30,000 till 30.9.2016.

    (ii) Interest on drawing @ 12% per annum which was calculated as Rs 2,000.

    The accountant of the firm prepared Z's Capital Account to be presented to his executor but in a hurry did not complete it. Z's Capital Account as prepared by the firm's accountant is presented below :
     

    Dr.

    Z’s Capital Account

    Cr.

    Date

    Particulars

    Amount

    (Rs)

    Date

    Particulars

    Amount

    (Rs)

    2016

     

     

    2016

     

     

    Sep. 30

    ……………

    30,000

    April 1

    ……………

    80,000

    Sep. 30

    ……………

    2,000

    Sep. 30

    ……………

    4,800

    Sep. 30

    ……………

    ……...

    Sep. 30

    ……………

    20,000

     

     

     

    Sep. 30

    ……………

    ……...

     

     

     

    Sep. 30

    ……………

    ……...

     

     

    1,64,800

     

     

    1,64,800

     

     

     

     

     

     

     

    You are required to complete Z's Capital Account. 

    VIEW SOLUTION

  • Q13

    Singh, Jain, Sharma and Gupta were partners in a firm sharing profits in the ratio of 4 : 3 : 2 : 1. On 1.4.2016 their Balance Sheet was as follows:    (6)

    Balance Sheet of Singh, Jain, Sharma and Gupta

    as at 1.4.2016

    Liabilities

    Amount

    (Rs)

    Assets

    Amount

    (Rs)

    Capitals:

     

    Fixed Assets

    1,60,000

    Singh

    50,000

     

    Current Assets

    90,000

    Jain

    40,000

     

     

     

    Sharma

    40,000

     

     

     

    Gupta

    40,000

    1,70,000

     

     

     

     

     

     

    Sundry Creditors

    45,000

     

     

    Workmen Compensation Reserve

    35,000

     

     

     

    2,50,000

     

    2,50,000

     

     

     

     

    From the above date the partners decided to share the future profits equally. For this purpose the goodwill of the firm was valued at Rs 60,000. Partners also agreed that:

    (i) Claims against Workmen Compensation Reserve was estimated at Rs 40,000 and depreciation of Rs 15,000 will be charged on fixed assets.

    (ii) Capitals of the partners will be adjusted according to the new profit sharing ratio for which current accounts will be opened.

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

     

    VIEW SOLUTION

  • Q14

    On 1.4.2015, Neena Ltd. issued 800, 9% debentures of Rs 100 each at a discount of 5%, redeemable at a premium of 8% after five years. The company closes its books on 31st March every year. Interest on 9% debentures is payable on 30th September and 31st March. Rate of tax deducted at source is 10%.
    Pass necessary journal entries for the issue of 9% debentures and payment of interest on 9% debentures for the year ended 31st March, 2016.   (6) 

    VIEW SOLUTION

  • Q15

    Pass necessary journal entries on the dissolution of a firm in the following cases:    (6)

    (i) Satish, a partner, agreed to do the dissolution work for which he was allowed a commission of Rs 18,000. He also agreed to bear the dissolution expenses. Actual dissolution expenses paid by Satish were Rs 9,000.
    (ii) Suleman, a partner, paid the dissolution expenses Rs 750.
    (iii) Dissolution expenses were Rs 500.
    (iv) Sandhya was appointed to look after the dissolution work on a remuneration of Rs 3,000. She agreed to bear the dissolution expenses. Actual dissolution expenses Rs 2,750 were paid by Sunil, another partner on behalf of Sandhya.
    (v) Seema, a partner, agreed to do the dissolution work for a commission of Rs 4,500. She also agreed to bear the dissolution expenses. Seema took away stock of the same amount as her commission. The stock had already been transferred to realisation account.
    (vi) Santosh, a partner, agreed to bear the dissolution expenses for a commission of Rs 6,000. Actual dissolution expenses Rs 4,500 were paid from the firm's bank account. 

    VIEW SOLUTION

  • Q16


    A and Z are partners in a firm sharing profits in the ratio of 7 : 3. Their Balance Sheet as on 31.3.2016 was as follows was as follows:    (8)

    Balance Sheet of A and Z
    as on 31.3.2016
    Liabilities
    Amount
    (Rs)
    Assets
    Amount
    (Rs)
    Sundry Creditors
    60,000
    Cash
    36,000
    Provision for Bad Debts
    6,000
    Debtors
    54,000
    Outstanding Wages
    9,000
    Stock
    60,000
    General Reserve
    15,000
    Furniture
    1,20,000
     
     
    Plant & Machinery
    120,000
    Capitals:
     
     
     
    A
    1,20,000
     
     
     
    Z
    1,80,000
    3,00,000
     
     
     
    3,90,000
     
    3,90,000
     
     
     
     

    On the above date B was admitted for 14th share in the profits on the following terms:
    (i) B will bring Rs 90,000 as his capital and Rs 30,000 as his share of goodwill premium, half of which will be withdrawn by A and Z.
    (ii) Debtors Rs 4,500 will be written off and a provision of 5% will be created on debtors for bad and doubtful debts.
    (iii) Outstanding wages will be paid off.
    (iv) Stock will be depreciated by 10%, furniture by Rs 1,500 and Machinery by 8%.
    (v) Investments of 7,500 not shown in the Balance Sheet will be reccorded.
    (vi) A creditor of Rs 6,300 not recorded in the books was to be taken into account.

    Pass necessary journal entries for the above transactions in the books of the firm on B’s admission.
    OR
    N, S and G were partners in a firm sharing profits and losses in the ratio of 2 : 3 : 5. On 31.3.2016 their Balance Sheet was as under:
    Balance Sheet of N, S and G
    as on 31.3.2016
    Liabilities
    Amount
    (Rs)
    Assets
    Amount
    (Rs)
    Creditors
    1,65,000
    Cash
    1,20,000
    General Reserve
    90,000
    Debtors
    1,35,000
     
    Capitals:
     
    Less Provision
    15,000
    1,20,000
    N
    2,25,000  
    Stock
    1,50,000
    S
    3,75,000  
    Machinery
    4,50,000
    G
    4,50,000 10,50,000
    Patents
    90,000
     
     
    Building
    3,00,000
     
     
    Profit & Loss Account
    75,000
     
    13,05,000
     
    13,05,000
     
     
     
     

    G retired on the above date and it was agreed that:
    (i) Debtors of Rs 6,000 will be written off as bad debts and a provision of 5% on debtors for bad and doubtful debts will be maintained.
    (ii) Patents will be completely written off and stock, machinery and building will be depreciated by 5%.
    (iii) An unrecorded creditor of Rs 30,000 will be taken into account.
    (iv) N and S will share the future profits in the ratio of 2 : 3 ratio.
    (v) Goodwill of the firm on G’s retirement was valued at Rs 90,000.
    Pass necessary journal entries for the above transactions in the books of the firm on G’s retirement. 

    VIEW SOLUTION

  • Q17

    BBG Ltd. invited applications for issuing 2,00,000 equity shares of Rs 10 each at a premium of Rs 10 per share. The amount was payable as follows:    (8)
     

    On Application − Rs 4 per share (including Rs 2 premium)
    On Allotment − Rs 5 per share (including Rs 2 premium)
    On First call − Rs 5 per share (including Rs 3 premium)
    On Second and final call − Balance amount

    The issue was fully subscribed. Raghu, a shareholder holding 1000 shares, failed to pay the allotment money and Rahim, another shareholder holding 1500 shares, paid his entire share money along with allotment. Raghu's shares were forfeited immediately after allotment. Afterwards, the first call was made Deenanath, a shareholder holding 500 shares, failed to pay the first call money and Dayal, a shareholder holding 600 shares, paid his second call money along with the first call. Deenanath's shares were forfeited immediately after the first call. Later on the second call was made which was duly received.

    Pass necessary journal entries for the above transactions in the books of BBG Ltd.
     
    OR

    Joy Ltd. invited applications for issuing 20,000 equity shares of Rs 10 each at par. The amount was payable as follows:
     
    On Application − Rs 3 per share
    On Allotment − Rs 4 per share
    On First and find call − Balance amount

    The issue was oversubscribed by three times. Applications for 20% shares were rejected and the money was refunded. Allotment was made to the remaining applicants as ffollows:
     
    Category No. of Shares Applied No. of Shares Allotted
    I 30,000 15,000
    II 18,000 5,000

    Excess money received with applications was adjusted towards sums due on allotment. Money in excess to sums due on allotment was adjusted towards sums due on first and final call and any money in excess to sums due on first and final call was refunded. Kavi, a shareholder who had applied for 600 shares, failed to pay the remaining allotment money and his shares were immediately forfeited. Kavi belonged to Category I.

    Afterwards the first and final call was made. Gupta, who had applied for 400 shares, failed to pay the first and final call. Gupta also belonged to Category I.

    Shares of Gupta were also forfeited after the first and final call. The forfeited shares were reissued at Rs 12 per share fully paid up.

    Pass necessary journal entries for the above transactions in the books of Joy Ltd. 

    VIEW SOLUTION