ACCOUNTANCY MODEL TEST PAPER-1
Q1- Is it correct that interest on capital is payable whether there is profit or loss in
the business?
(1)
Q2-*-K ,L & M were partners sharing profits in the ratio of 3:2:1. L Retired, his son
N is admitted as partner in his place. The new profit sharing ratio is 3:3:2. Do you
think that Goodwill is to be valued again? Why & why not?
(1)
Q3- In case admission of a partner which of the following reserves are not
distributed between old partners?
(i)
(ii)
Employees provident fund
Provision for tax
(ii)
(iv)
depreciation Reserve.
All of the above.
(1)
Q4-* According to Indian Partnership Act 1932, if any partner has given some loan
to the firm, he is entitled to take interest on loan @ 6% p.a. What value is
depicted in this provision?
(1)
Q5- 6% Debentures account Rs 6,00,000. Debenture interest Rs.12,000. What
amount should be shown in the statement of Profit and Loss at the end of the
accounting year?
(a) Rs 12,000
(b) Rs 24,000
(c ) Rs 36,000
(d) None of the above.
`
(1)
Q6-*A, B & C were partners having capitals 1,50,000, 75,000 & 50,000. On B’s
retirement share of B was acquired by A & C in the ratio of 1:2.On that day firm’s
Goodwill was valued at Rs 18,000. D was admitted for 1/5 share in profits bringing
1,50,000 as capital & 36,000 as premium. Pass necessary journal entries. (3)
Q7–(a) Is it correct that shares can be forefeited only if the Articles of Association
of the company permits forefeiture?
(3)
(b) Mention any two effects of forefeiture of shares.
Q8 – Impressions Ltd. forefeited 940 equity shares of Rs. 10 each issued at a
premium of Rs. 5 per share for non-payment of allotment money of Rs. 8per
share (including premium of Rs 5) and first & final call of Rs 5 per share. Out of
these 120 shares were reissued at Rs. 12 per share. Show journal entries. (3)
Q9 – *A & B are partners in a partnership firm which deals in mosquito repellents.
They decided to supply their product in different slum areas in order to restrict
water bond diseases.
(4)
a) State three values that are being reflected in this case.
b) B being an active partner claims salary of Rs. 20,000 per month. State
whether his claim is valid or not.
Q 10 – Give reasons for the following:
a)
b)
c)
d)
(4)
When an asset is taken over by a partner, his capital account is debited.
When a liability is discharged by a partner, his capital account is credited.
On the admission of a partner, assets and liabilities of the firm are revalued.
Interest on capital is proportionately allowed to the extent of profits if
there are insufficient profit in the firm.
Q11 – Khanna Ltd. issued 1,50,000 shares of Rs. 10 each at a discount of 10%
payable as Rs. 2, Rs. 3, Rs. 2 and Rs. 2 on application, allotment, first call and final
call respectively. Applications were received for 2,10,000 shares. It was decided
that:
a) Refuse allotment to the applications of 30,000 shares.
b) Allot 30,000 shares to Ayushi who had applied for similar number of shares.
c) Allot the remaining shares on Pro-rata basis.
Ayushi failed to pay the allotment money and Arushi who belonged to category C
was allotted 9,000 shares paid both the calls with allotment. Calculate
(1) Amount received on allotment
(2) Distribution showing allotment of shares.
Q 12. A, B & C were partners in a firm. On 1st April 2014 their fixed capitals were
Rs 75,000,Rs 37,500 & Rs 37,500 respectively. As per the deed(a) All the partners were entitled to receive 5% interest p.a. on capitals.
(b) Profits were divided in their capital ratio.
(c) B was entitled to a salary of Rs 7,500.
The net profits for the year ended 31st March 2013 & 31st March 2014 was Rs
49,500 & Rs 67,500 respectively.Net Profits were provided equally without
providing for the above terms.
Pass an adjustment entry to rectify the above error. Show your workings
clearly.
(6)
Q13- Record necessary entries in the following cases in case of dissolution of
partnership firm :
(i)
(ii)
(iii)
(iv)
(v)
Realisation expenses to be borne by A , a partner for which she was
allowed commission of 2% of net cash realized from dissolution. The net
cash realized from dissolution was 5,00,000 & actual expenses were
37,000.
Sunil, a creditor to whom 32,000 were due to be paid, took over office
equipment at 40,000. Balance was paid by him in cash.
P, a partner, paid creditors 51,000 in full settlement of their claim
60,000.
A debtor, Sam , whose debt of 18,600 was written off in the books, paid
15,000 in full settlement.
There was a stock of 90,000. Ram, a partner took over 50% of the stock
at 10% discount & remaining stock was sold at 40% profit of book value.
(1+2+1+1+1)
Q14(a) Ritvik Ltd. Purchased assets of 5,00,000 & took over liabilities of 90,000.
The purchase consideration was paid by the issue of 4,000 9%
debentures of 100 each at a discount of 5%. Journalise the above
transaction.
(b) A Ltd. purchased for cancellation 2,50,000 of its 12% debentures at
92.Journalise.
(6)
Q15- X & Y were partners in a firm sharing profits & losses in the ratio of 3:2.
On 31st March 2014, their balance sheet stood as follows:
BALANCESHEET
As at 31st march, 2014
Liabilities
Assets
Capitals
Furniture
30,000
X
70,000
Investments
40,000
Y
60,000
1,30,000
Stock
46,000
General Reserve
20,000
Debtors
38,000
Bank Loan
90,000
-Prov. For d/d 4,000
34,000
Cash
90,000
2,40,000
2,40,000
th
On the same date Z was admitted for 1/4 share in profits & losses on the
following terms:
(a) Z bring proportionate capital after all adjustments & 14,000 for goodwill.
(b) Furniture was valued at 27,000.
(c) Half of the investments were taken over by X & Y in their profit sharing
ratio & remaining valued at 26,000.
(d) New Profit sharing ratio would be 3:3:2.
Prepare Revaluation Account, Partners’ capital Accounts and balance sheet
after Z’s admission.
(8)
OR
Following is the Balance sheet of A,B & C as at 31st March 2014, who share
profits & losses in the ratio of 2:1:1.
BALANCESHEET
Liabilities
Assets
Capitals
Land & Building
2,00,000
A 2,00,000
Machinery
3,00,000
B 3,00,000
Stock
1,00,000
C 2,00,000
7,00,000
Debtors
1,10,000
General reserve
35,000
Less:Prov. For d/d10,000
1,00,000
Workmen’s
Cash at Bank
1,00,000
compensation
Reserve
Sundry creditors
15,000
50,000
8,00,000
8,00,000
On the same date C gave a notice for his retirement which was agreed upon.
The other terms which were agreed on retirement were:
(a) Land & Building is to be appreciated by 30%.
(b) Machinery to be depreciated by 20%.
(c) There are bad debts of 17,000.
(d) Goodwill of the firm was valued at 2,80,000 & C’s share of goodwill to be
adjusted against the capital account of continuing partners capital
accounts.
(e) The total capital of the new firm will be same as before & will be new profit
sharing ratio of 4:3.
Prepare Revaluation account, Partners’ capital Accounts & Balance Sheet of
the firm after C’s retirement.
Q16- X Ltd. invited applications for issuing 2,00,000 equity shares of Rs 10 each.
The amount was payable as follows:
Application 2.50, allotment 5.00, First & final call 2.50.
Applications for 3,50,000 shares were received & the allotment was made as
follows:
Category
Shares applied
Shares allotted
I
50,000
40,000
II
1,00,000
60,000
III
2,00,000
1,00,000
All the shares were allotted on pro rata basis & the excess money was adjusted
towards sum due on allotment. Madhu who belonged to category I & to whom
800 shares were allotted failed to pay the allotment money. Her shares were
forfeited immediately after the allotment was not received. Pooja who belonged
to category III & who had applied for 400 shares failed to pay the final call. Her
shares were also forfeited after the final call. Out of the forfeited shares, 80%
shares were reissued as fully paid up @ 9 per share. The reissued shares included
all the forfeited shares of pooja.
Pass necessary journal entries in the books of X Ltd.
(8)
OR
M Ltd. issued 30,000 shares of 10 each at a discount of 1 each(to be adjusted at
the time of allotment) payable as follows:
Application- 3, allotment- 2 First & final call -4.
Applications were received for 40,000 shares. Allotment was made as follows:
IApplications for 5,000 shares were allotted in full.
IIApplications for 15,000 shares were allotted 10,000 shares on prorata
basis.
IIIApplications for 20,000 shares were allotted 15,000 shares.
All the shareholders paid the amount due on allotment & call except X (who was
allotted 1,000 shares under category II) & Y(who was allotted 1,500 shares under
category III). They did not pay any money due on allotment & call. Their shares
were forfeited & reissued at 6 per share as fully paid up.
Pass necessary journal entries to record the above transactions.
PART B- FINANCIAL STATEMENT ANALYSIS
Q17- Anjali Ltd. extends a credit of 45 days to its customers.Its credit collection
will be considered poor if its average collection period was
(1)
a) 30 days b) 40 days c) 36 days d) 54 days.
Q18- Which of the following transactions will not be shown in cash flow
statement?
(a) Issue of 5% preference shares.
(b) Conversion of Debentures into shares.
(c) Dividend proposed on equity shares.
(d) Income tax refund received.
(1)
Q19- Give one transaction which is shown as an operating activity for finance &
non finance companies.
(1)
Q20- Under which heads & sub heads the following items will appear in the
Balance sheet of a company as per Revised Schedule VI Part I of Companies Act
1956:
(3)
(a) Unpaid dividend (b) Share Forfeiture Account (c) Advance to subsidiary
Q21- Prepare Comp[arative Statement of Profit & Loss from the following
information:
Particulars
31.03.2014
31.03.2013
Revenue from operations
Other income
Cost of materials consumed
37,50,000
4,50,000
60% of revenue from operations
(4)
25,00,000
5,00,000
50% of revenue from operations
Other expenses
Tax rate
10% of revenue from operations
50%
10% of revenue from operations
50%
Q22- From the following information calculate Gross Profit ratio Inventory at the beginning of the year
60,000.
Inventory at the end of the year
1,00,000.
Inventory turnover ratio
8 times
Revenue from operations
25% above cost.
(4)
Q23- From the Balance Sheet Of Shiv Ltd. Prepare Cash flow statement:
Particulars
Note 31.03.2012
31.03.2013
no
Equity & Liabilities
1. Shareholders’ funds
(a) Share Capital
1
4,60,000
8,50,000
(b) Reserves & surplus
2
2,31,000
1,54,000
2. Non current liabilities
(a) Long term borrowings
3
2,00,000
1,80,000
3. Current Liabilities
(a)short term provision
4
9,000
16,000
9,00,000
12,00,000
Assets
1. Non current assets
a) Fixed Assets
2. Current Assets
a) Inventories
b) Trade receivables
c) Cash & cash equivalents
Notes to Accounts:
Note
Particulars
no.
1.
Share Capital
Equity Share Capital
8% preferential Capital
5,00,000
7,00,000
2,10,000
1,40,000
50,000
9,00,000
3,00,000
1,40,000
60,000
12,00,000
31.03.2012
4,00,000
60,000
31.03.2013
7,50,000
1,00,000
Reserves and Surplus
Balance of Statement of Profit & Loss
General Reserves
1,61,000
70,000
Long Term Borrowings
10% Debentures
2,00,000
Short Term Provision
Proposed Dividend
9,000
Additional Information:
a) Depreciation charged on Fixed Assets was Rs. 15,000.
b) Machine of book value of Rs. 80,000 sold for Rs. 50,000.
c) Interim dividend paid Rs. 12,000
74,000
80,000
1,80,000
16,000
(6)
SOLUTION
Q1- No.
Q2-Yes Goodwill is to be revalued as profit sharig ratio is changing.Gaining partner
will compensate the sacrificing partner.
Q3-(d)
Q4- Assured return on capital employed.
Q5 – (c)
Q6Date
Particulars
A’s capital A/c-------Dr
C’s capital A/c-------Dr
To B’s capital A/c
(B’s share goodwill adjusted
through capital accounts.)
B’s capital A/c------------Dr
To B’s Loan A/c
(B’s capital t/f to loan account.)
Cash A/c ---------------Dr
To D’s capital A/c
To premium for Goodwill a/c
(Being amount contributed as
capital & goodwill.)
Premium for Goodwill A/c ---Dr
To A’s capital A/c
To C’s capital A/c
(Being premium t/f to capital
accounts in sacrificing ratio.)
L.F
Dr.
Cr.
2,000
4,000
6,000
81,000
81,000
1,86,000
1,50,000
36,000
36,000
16,000
20,000
Q7- (a) Yes
(b)The name of the shareholder is removed from the register
The amount forfeited is transferred to share forfeiture account.
Q8-Amount forfeited 1,880, Amount t/f to capital reserve- 240.
Q9-(a) Spreading health awareness among slum dwellers
Initiative, Fulfillment of social responsibility.
(b) B’s claim is not valid because salary is not given to any partner in
absence of partnership deed.
Q10- The value of asset is charged from his capital account.
His claim is increased over the firm by the liability discharged by him.
Q11- calls in arrears (Ayushi) 90,000, calls in advance (Arushi) 36,000, Allotment
received 3,36,000.
Q12- C’s current A/c Debit 13,500, A’s current A/c credit 12,000 B’s current a/c
credit 1,500.
Q13Date
Particulars
L.F
Dr
Cr
A
Realisation A/c
10,000
To A’s capital A/c
10,000
(Being commission paid on 5,00,000@
2%)
B
Cash A/c
Dr
8,000
To Realisation A/c
8,000
(Being typewriter given to creditor &
balance in cash)
C
Realisation A/c
Dr
51,000
To P’s capital A/c
51,000
(Being creditors paid by P.)
D
Cash A/c
Dr
15,000
To Realisation A/c
15,000
(Being debtor paid 15,000 in full
settlement.)
E
Ram
Dr
40,500
Bank A/c
Dr
63,000
To Realisation A/c
1,03,500
(Being stock realized.)
Q14-(a) Assets A/c ----Dr 5,00,000
To Liabilities A/c
90,000
To Vendors A/c
3,80,000
To Capital Reserve A/c
30,000
(Being Business purchased from vendor.)
Vendors A/c Dr
3,80,000
Discount on issue of debentures a/c-Dr20,000
To 9% Debentures A/c
4,00,000
(Being purchase consideration paid by issue of 4,000 9% debentures at a
discount of 5%.)
(c) Own Debentures A/c Dr 2,30,000
To Bank A/c
2,30,000
(Being 2,500 own debentures purchased @ 92 each.)
12% Debentures A/c Dr
2,50,000
To own Debentures A/c
2,30,000
To profit on cancellation of
debentures A/c
20,000
(Being 2,500 own debentures cancelled.)
Profit on cancellation of debentures A/c Dr 20,000
To capital reserve A/c
20,000
(Being profit on cancellation t/f to capital reserve.)
Q15- Revaluation A/c profit- 3,000, Partners capital accounts X- 84,400, Y62,600, Z – 49,000, Balancesheet total- 2,86,000.
OR
Revaluation A/c Loss- 7,000, Partner’s capital accounts A- 4,00,000,
B- 3,00,000, C’s Loan a/c 2,80,750, Balancesheet- 10,30,750.
Q16- capital reserve- 2,575 or capital reserve- 3,000.
Q17- (d)
Q18 – (b)
Q19 – salary paid to an employee.
Q20- unpaid dividend
current liabilities
Share forfeiture account Shareholders’
funds
other current liabilities
Share capital
Advance to subsidiary
Q21 –
Non current assets
Long term loans &
Advances
Comparative statement profit & Loss
Particulars
Note
No.
I. Revenue from
Operations
II. Other Income
III. Total Revenue (I-II)
IV. Less: Expenses
a) Cost of materials
Consumed
b) Other Expenses
Total Expenses (a+b)
V. Profit before Tax (IIIIV)
VI. Less: Tax @ 50%
VII. Profit After Tax(V-VI)
31.03.2013
21.03.2014
25,00,000
37,50,000
Absolute
Change
(Increase or
Decrease)
12,50,000
5,00,000
30,00,000
4,50,000
42,00,000
(50,000)
12,00,000
10
40%
12,50,000
22,50,000
10,00,000
80%
2,50,000
15,00,000
15,00,000
3,75,000
26,25,000
15,75,000
1,25,000
11,25,000
75,000
50%
75%
5%
7,50,000
7,50,000
7,87,500
7,87,500
37,500
37,500
5%
5%
Q 22. Gross Profit Ratio 20%
Q 23. Cash used in operating activities Rs. 76,000
Cash used in Investing activities Rs. 2,45,000
Net cash flow from Financing activities Rs. 3,31,000
Fixed Assets purchased Rs. 2,95,000
Percentage
Change
(Increase or
Decrease)
50