Mock Test Questions

Test Series: October, 2019
MOCK TEST PAPER – 1

INTERMEDIATE (NEW) : GROUP – I
PAPER – 1: ACCOUNTING
Question No. 1 is compulsory.
Answer any four questions from the remaining five questions.
Wherever necessary suitable assumptions may be made and disclosed by way of a note.
Working Notes should form part of the answer.
(Time allowed: Three hours) (Maximum marks: 100)
1. (a) (i) In the year 2018-19, an entity has acquired a new freehold building with a useful life of 50
years for Rs. 75,00,000. The entity desires to calculate the depreciation charge per annum
using a straight-line method. It has identified the following components (with no residual value
of lifts & fixtures at the end of their useful life) as follows:
Component Useful life (Years) Cost
Land Infinite Rs. 10,00,000
Roof 25 Rs. 15,00,000
Lifts 20 Rs. 7,50,000
Fixtures 10 Rs. 2,50,000
Remainder of building 50 Rs. 40,00,000
Rs. 75,00,000
Calculate depreciation for the year 2018-19 as per componentization method. Also state the
treatment, in case Roof requires replacement at the end of its useful life.
(ii) Entity A, a supermarket chain, is renovating one of its major stores. The store will have more
available space for store promotion outlets after the renovation and will include a restaurant.
Management is preparing the budgets for the year after the store reopens, which include the
cost of remodeling and the expectation of a 15% increase in sales resulting from the store
renovations, which will attract new customers.
Decide whether the remodeling cost will be capitalized or not as per provision of AS 10
“Property plant & Equipment”.
(b) The Accountant of Mobile Limited has sought your opinion with relevant reasons, whether the
following transactions will be treated as change in Accounting Policy or not for the year ended
31st March, 2019. Please advise him in the following situations in accordance with the provisions
of relevant Accounting Standard;
(i) Provision for doubtful debts was created @ 2% till 31st March, 2018. From the Financial year
2018-2019, the rate of provision has been changed to 3%.
(ii) During the year ended 31st March, 2019, the management has introduced a formal gratuity
scheme in place of ad-hoc ex-gratia payments to employees on retirement.
(iii) Till the previous year the furniture was depreciated on straight line basis over a period of 5
years. From current year, the useful life of furniture has been changed to 3 years.
© The Institute of Chartered Accountants of India

(iv) Management decided to pay pension to those employees who have retired after completing
5 years of service in the organization. Such employees will get pension of Rs. 20,000 per
month. Earlier there was no such scheme of pension in the organization.
(v) During the year ended 31st March, 2019, there was change in cost formula in measuring the
cost of inventories.
(c) Mr. Mehul gives the following information relating to items forming part of inventory as on
31-3-2019. His factory produces Product X using Raw material A.
(i) 600 units of Raw material A (purchased @ Rs. 120). Replacement cost of raw material A as
on 31-3-2019 is Rs. 90 per unit.
(ii) 500 units of partly finished goods in the process of producing X and cost incurred till date
Rs. 260 per unit. These units can be finished next year by incurring additional cost of Rs. 60
per unit.
(iii) 1500 units of finished Product X and total cost incurred Rs. 320 per unit.
Expected selling price of Product X is Rs. 300 per unit.
Determine how each item of inventory will be valued as on 31-3-2019. Also calculate the value of
total inventory as on 31-3-2019.
(d) State whether the following statements are 'True' or 'False'. Also give reason for your answer.
(i) Certain fundamental accounting assumptions underline the preparation and presentation of
financial statements. They are usually specifically stated because their acceptance and use
are not assumed.
(ii) If fundamental accounting assumptions are not followed in presentation and preparation of
financial statements, a specific disclosure is not required.
(iii) All significant accounting policies adopted in the preparation and presentation of financial
statements should form part of the financial statements.
(iv) Any change in an accounting policy, which has a material effect should be disclosed. Where
the amount by which any item in the financial statements is affected by such change is not
ascertainable, wholly or in part, the fact need not to be indicated.
(v) There is no single list of accounting policies which are applicable to all circumstances.
(4 Parts x 5 Marks = 20 Marks)
2. (a) M & S Co. of Lucknow has a branch in Canberra, Australia (as an integral foreign operation of M
& S Co.). At the end of 31st March 2019, the following ledger balances have been extracted from
the books of the Lucknow office and the Canberra.
Lucknow office Canberra Branch
(Rs. In thousand) (Aust. Dollars
in thousand)
Dr. Cr. Dr. Cr.
Capital 2,000
Reserves & Surplus 1,000
Land 500
Buildings (Cost) 1,000
Buildings Dep. Reserves 200

Plant and Machinery (Cost) 2,500 200
Plant and Machinery Dep.
Reserves 600 130
Debtors/Creditors 280 200 60 30
Stock as on 1- 4-2018 100 20
Branch Stock Reserve 4
Cash & Bank Balances 10 10
Purchases/Sales 240 520 20 123
Goods sent to Branch 100 5
Managing Partner's Salary 30
Wages and Salary 75 45
Rent 12
Office Expenses 25 18
Commission Receipts 256 100
Branch/HO Current Account 120 7
4,880 4,880 390 390
The following information is also available:
(i) Stock as at 31st March, 2019
Lucknow Rs. 1,50,000
Canberra A$ 3125 (all stock are out of purchases made at Abroad)
(ii) Head Office always sent goods to the Branch at cost plus 25%
(iii) Provision is to be made for doubtful debts at 5%
(iv) Depreciation is to be provided on Buildings at 10% and on Plant and Machinery at 20% on
written down value.
You are required to:
(1) Convert the Branch Trial Balance into rupees by using the following exchange rates:
Opening rate 1 A $ = Rs. 50
Closing rate 1 A $ = Rs. 53
Average rate 1 A $ = Rs. 51.00
For Fixed Assets 1 A $ = Rs. 46.00
(2) Prepare Trading and Profit and Loss Account for the year ended 31st March 2019 showing to
the extent possible H.O. results and Branch results separately.
(b) The following balances were extracted from the books of Beta. You are required to prepare
Departmental Trading Account and general Profit & Loss Account for the year ended
31st December, 2018:
Particulars Deptt. A Deptt. B
Rs. Rs.
Opening Stock 3,00,000 2,40,000
3

Purchases 39,00,000 54,60,000
Sales 60,00,000 90,00,000
General expenses incurred for both the Departments were Rs. 7,50,000 and you are also supplied
with the following information:
(i) Closing stock of Department A Rs. 6,00,000 including goods from Department B for
Rs. 1,20,000 at cost to Department A.
(ii) Closing stock of Department B Rs. 12,00,000 including goods from Department A for
Rs. 1,80,000 at cost to Department B.
(iii) Opening stock of Department A and Department B include goods of the value of
Rs. 60,000 and Rs. 90,000 taken from Department B and Department A respectively at cost
to transferee departments.
(iv) The gross profit is uniform from year to year. (12+8=20 Marks)
3. (a) Ali and Beta were carrying on business, sharing profits and losses equally. The firm’s balance
sheet as at 31-12-2018 was:
Liabilities Rs. Assets Rs.
Sundry Creditors 1,44,000 Stock 1,44,000
Bank Overdraft 84,000 Machinery 3,60,000
Capital A/c: Debtors 1,68,000
Joint Life Policy 21,600
Ali 3,36,000 Leasehold Premises 81,600
Beta 3,12,000 6,48,000 Profit & Loss A/c 62,400
Drawing A/c:
Ali 24,000
Beta 14,400 38,400
8,76,000 8,76,000
The business was carried on till 30-06-2019. The partners withdrew the amounts equal to half the
amount of profit made during the period of six months ended on 30-06-2019, in equal proportion.
The profit was calculated after charging depreciation at 10% p.a. on machinery and after writing
off 5% on leasehold premises. In the half year, sundry creditors were reduced by Rs. 24,000 and
bank overdraft by Rs. 36,000.
On 30-06-2019, stock was valued at Rs. 1,80,000 and debtors at Rs. 1,44,000; the Joint Life Policy
had been surrendered for Rs. 21,600 before 30-06-2019 and other items remained the same as at
31-12-2018.
On 30-06-2019, the firm sold the business to a limited company. The value of goodwill was fixed
at Rs. 2,40,000 and the rest of the assets were valued on the basis of the balance sheet as at
30-06-2019. The company paid the purchase consideration in equity shares of Rs. 10 each.
You are required to prepare:
(i) Balance Sheet of the firm as at 30-06-2019;
(ii) Realisation Account; and
(iii) Partners’ Capital Accounts showing the final settlement between them.

(b) Explain the nature of Limited Liability Partnership. Who can be a designated partner in a Limited
Liability Partnership? (16+4 = 20 Marks)
4. (a) The premises of Anmol Ltd. caught fire on 22nd January 2017, and the stock was damaged. The
firm makes account up to 31st March each year. On 31st March, 2016 the stock at cost was
Rs. 6,63,600 as against Rs. 4,81,100 on 31st March, 2015.
Purchases from 1st April, 2016 to the date of fire were Rs. 17,41,350 as against Rs. 22,62,500 for
the full year 2015-16 and the corresponding sales figures were Rs. 24,58,500 and Rs. 26,00,000
respectively. You are given the following further information:
(i) In July, 2016, goods costing Rs. 50,000 were given away for advertising purposes, no entries
being made in the books.
(ii) During 2016-17, a clerk had misappropriated unrecorded cash sales. It is estimated that the
defalcation averaged Rs. 1,000 per week from 1st April, 2016 until the clerk was dismissed on
18th August, 2016.
(iii) The rate of gross profit is constant.
You are required to calculate the value of stock in hand on the date of fire with the help of above
information.
(b) Akash Ltd. had 4,000 equity share of X Limited, at a book value of Rs. 15 per share (face
value of Rs. 10 each) on 1st April 2018. On 1st September 2018, Akash Ltd. acquired 1,000
equity shares of X Limited at a premium of Rs. 4 per share. X Limited announced a bonus and right
issue for existing share holders.
The terms of bonus and right issue were -
(1) Bonus was declared, at the rate of two equity shares for every five equity shares held on 30 th
September, 2018.
(2) Right shares are to be issued to the existing shareholders on 1 st December, 2018. The
company issued two right shares for every seven shares held at 25% premium. No dividend,
was payable on these shares. The whole sum being payable by 31 st December, 2018.
(3) Existing shareholders were entitled to transfer their rights to outsiders, either wholly or in part.
(4) Akash Ltd. exercised its option under the issue for 50% of its entitlements and sold the
remaining rights for Rs. 8 per share.
(5) Dividend for the year ended 31st March 2018, at the rate of 20% was declared by the company
and received by Akash Ltd., on 20th January 2019.
(6) On 1st February 2019, Akash Ltd., sold half of its share holdings at a premium of Rs. 4 per
share.
(7) The market price of share on 31.03.2019 was Rs. 13 per share.
You are required to prepare the Investment Account of Akash Ltd. for the year ended 31 st March,
2019 and determine the value of shares held on that date assuming the investment as current
investment.
(c) Mr. Aman is running a business of readymade garments. He does not maintain his books of
accounts under double entry system. While assessing the income of Mr. Aman for the financial
year 2018-19, Income Tax Officer feels that he has not disclosed the full income earned by him
from his business. He provides you the following information:

On 31st March, 2018
Sundry Assets Rs. 16,65,000
Liabilities Rs. 4,13,000
On 31st
March, 2019
Sundry Assets Rs. 28,40,000
Liabilities Rs. 5,80,000
Mr. Aman’s drawings for the year 2018-19 Rs. 32,000 per month
Income declared to the Income Tax Officer Rs. 9,12,000
During the year 2018-19, one life insurance policy of Mr. Aman was matured and amount received
Rs. 50,000 was retained in the business.
State whether the Income Tax Officer's contention is correct. Explain by giving your working.
(6 +10 + 4 = 20 Marks)
5. (a) J Ltd. presents you the following information for the year ended 31st March, 2019:
(Rs. in lacs)
(i) Net profit before tax provision 36,000
(ii) Dividend paid 10,202
(iii) Income-tax paid 5,100
(iv) Book value of assets sold 222
Loss on sale of asset 48
(v) Depreciation debited to P & L account 24,000
(vi) Capital grant received - amortized to P & L A/c 10
(vii) Book value of investment sold 33,318
Profit on sale of investment 120
(viii) Interest income from investment credited to P & L A/c 3,000
(ix) Interest expenditure debited to P & L A/c 12,000
(x) Interest actually paid (Financing activity) 13,042
(xi) Increase in working capital 67,290
[Excluding cash and bank balance]
(xii) Purchase of fixed assets 22,092
(xiii) Expenditure on construction work 41,688
(xiv) Grant received for capital projects 18
(xv) Long term borrowings from banks 55,866
(xvi) Provision for Income-tax debited to P & L A/c 6,000
Cash and bank balance on 1.4.2018 6,000
Cash and bank balance on 31.3.2019 8,000
You are required to prepare a cash flow statement as per AS-3 (Revised).

(b) Futura Ltd. had the following items under the head “Reserves and Surplus” in the Balance Sheet
as on 31st March, 2019:
Amount Rs. in lakhs
Securities Premium Account 80
Capital Reserve 60
General Reserve 90
The company had an accumulated loss of Rs. 250 lakhs on the same date, which it has disclosed
under the head “Statement of Profit and Loss” as asset in its Balance Sheet. Comment on accuracy
of this treatment in line with Schedule III to the Companies Act, 2013.
(c) PQ Ltd., a non-investment company has been incurring losses for the past few years. The company
provides the following information for the current year:
(Rs. in lakhs)
Paid up equity share capital 180
Paid up Preference share capital 30
Reserves (including Revaluation reserve Rs. 15 lakhs) 225
Securities premium 60
Long term loans 60
Deposits repayable after one year 30
Application money pending allotment 1080
Accumulated losses not written off 30
Investments 270
PQ Ltd. has only one whole-time director, Mr. Hello. You are required to calculate the amount of
maximum remuneration that can be paid to him as per provisions of Part II of Schedule XIII, if no
special resolution is passed at the general meeting of the company in respect of payment of
remuneration for a period not exceeding three years. (12+4+4=20 Marks)
6. Answer the following:
(a) Following items appear in the Trial Balance of Beta Ltd. as on 31st March, 2017:
Particulars Amount
3,000 Equity Shares of Rs. 100 each 3,00,000
Securities Premium (collected in cash) 40,000
Capital Redemption Reserve 30,000
General Reserve 1,00,000
The company decided to issue to equity shareholders bonus shares at the rate of 1 share for every
3 shares held. Company decided that there should be the minimum reduction in free reserves.
Pass necessary Journal Entries in the books of Beta Ltd.
(b) ABC Ltd. has entered into a binding agreement with XYZ Ltd. to buy a custom-made machine
amounting to Rs. 4,00,000. As on 31st March, 2018 before delivery of the machine, ABC Ltd. had
to change its method of production. The new method will not require the machine ordered and so
it shall be scrapped after delivery. The expected scrap value is ‘NIL’.
Show the treatment of machine in the books of ABC Ltd.

(c) Suhana Ltd. issued 12% secured debentures of Rs. 100 Lakhs on 01.05.2018, to be utilized as
under:
Particulars Amount (Rs. in lakhs)
Construction of factory building 40
Purchase of Machinery 35
Working Capital 25
In March 2019, construction of the factory building was completed and machinery was installed
and ready for its intended use. Total interest on debentures for the financial year ended 31.03.2019
was Rs. 11,00,000. During the year 2018-19, the company had invested idle fund out of money
raised from debentures in banks' fixed deposit and had earned an interest of Rs. 2,00,000.
Show the treatment of interest under Accounting Standard 16 and also explain nature of assets.
OR
Beta Ltd. is a full tax free enterprise for the first ten years of its existence and is in the second year
of its operation. Depreciation timing difference resulting in a tax liability in year 1 and 2 is
Rs. 1,000 lakhs and Rs. 2,000 lakhs respectively. From the third year it is expected that the timing
difference would reverse each year by Rs. 50 lakhs. Assuming tax rate of 40%, find out the
deferred tax liability at the end of the second year and any charge to the Profit and Loss account.
(d) The Board of Directors of a Company decide to issue minimum number of equity shares of Rs. 9
to redeem Rs. 5,00,000 preference shares. The maximum amount of divisible profits available for
redemption is Rs. 3,00,000.
Calculate the number of shares to be issued by the company to ensure that provisions of Section
55 are not violated. Also determine the number of shares if the company decides to issue shares
in multiples of Rs. 50 only. (4 Parts x 5 Marks = 20 Marks)

Test Series: May, 2020
MOCK TEST PAPER – 1
(Time allowed: Three hours) (Maximum Marks: 100)
1. (a) State whether the following statements are 'True' or 'False'. Also give reason for your answer.
financial statements. They are usually not specifically stated because their acceptance and
use are assumed.
statements should not form part of the financial statements.
ascertainable, wholly or in part, the fact need to be indicated.
(v) There is a single list of accounting policies which are applicable to all circumstances.
(b) The Investment portfolio of XYZ Ltd. as on 31.03.2020 consisted of the following:
(Rs. in lacs)
Current Investments Cost Fair Value as on 31.03.2020
(1) 1000 Equity Shares of A Ltd. 5 7
(2) 500 Equity Shares of B Ltd. 10 15
(3) 1000 Equity Shares of C Ltd. 15 12
Total 30 34
Give your comments on the following:

(i) The company wants to value the above portfolio at Rs. 30 lakhs being lower of cost or fair
market value.
(ii) Company wants to transfer 1000 Equity Shares of C Ltd. from current investments to long
term investments on 31.03.2020 at cost of Rs. 15 lakhs.
(c) Viva Ltd. received a specific grant of Rs. 30 lakhs for acquiring the plant of Rs. 150 lakhs during
2016- 17 having useful life of 10 years. The grant received was credited to deferred income in the
balance sheet and was not deducted from the cost of plant. During 2019-20, due to non-
compliance of conditions laid down for the grant, the company had to refund the whole grant to
the Government. Balance in the deferred income on that date was Rs. 21 lakhs and written down

value of plant was Rs. 105 lakhs. What should be the treatment of the refund of the grant and the
effect on cost of the fixed asset and the amount of depreciation to be charged during the year
2019-20 in profit and loss account?
(d) Mohan Ltd. has an existing freehold factory property, which it intends to knock down and
redevelop. During the redevelopment period, the company will move its production facilities to
another (temporary) site.
The following incremental costs will be incurred:
Setup costs of Rs. 5,00,000 to install machinery in the new location.
Rent of Rs. 15,00,000
Removal costs of Rs. 3,00,000 to transport the machinery from the old location to the temporary
location.
Mohan Ltd. wants to seek your guidance as whether these costs can be capitalized into the cost of
the new building. You are required to advise in line with AS 10 “Property, Plant and Equipment”.
2. On 31st March, 2020, SR Ltd. provides the following ledger balances after preparing its Profit &Loss
Account for the year ended 31st March, 2020.
Particulars Amount (Rs.)
Debit Credit
Equity Share Capital, fully paid shares of Rs. 50 each 80,00,000
Calls in arrear 15,000
Land 25,00,000
Buildings 30,00,000
Plant & Machinery 24,00,000
Furniture &Fixture 13,00,000
Securities Premium 15,00,000
Profit & Loss Account 5,80,000
Loan from Public Finance Corporation (Secured by Hypothecation
26,30,000
of Land)
Other Long Term Loans 22,50,000
Short Term Borrowings 4,60,000
Inventories: Finished goods 45,00,000
Raw materials 13,00,000
Trade Receivables 17,50,000
Advances: Short Term 3,75,000
Trade Payables 8,13,000
Provision for Taxation 3,80,000
Dividend payable 70,000
Cash in Hand 70,000
Balances with Banks 4,14,000
Total 1,76,24,000 1,76,24,000

The following additional information was also provided in respect of the above balances:
(1) 50,000 fully paid equity shares were allotted as consideration for land.
(2) The cost of assets were:
Building Rs. 32,00,000
Plant and Machinery Rs. 30,00,000
Furniture and Fixture Rs. 16,50,000
(3) Trade Receivables for Rs. 4,86,000 due for more than 6 months.
(4) Balances with banks include Rs. 56,000, the Naya bank, which is not a scheduled bank.
(5) Loan from Public Finance Corporation repayable after 3 years.
(6) The balance of Rs. 26,30,000 in the loan account with Public Finance Corporation is inclusive of
Rs. 1,34,000 for interest accrued but not due. The loan is secured by hypothecation of land.
(7) Other long-term loans (unsecured) include:
Loan taken from Nixes Bank Rs. 13,80,000
(Amount repayable within one year Rs. 4,80,000)
Loan taken from Directors Rs. 8,50,000
(8) Bills Receivable for Rs. 1,60,000 maturing on 15th June, 2020 has been discounted.
(9) Short term borrowings include:
Loan from Naya bank Rs. 1,16,000 (Secured)
Loan from directors Rs. 48,000
(10) Transfer of Rs. 35,000 to general reserve has been proposed by the Board of directors out of the
profits for the year.
(11) Inventory of finished goods includes loose tools costing Rs. 5 lakhs (which do not meet definition
of property, plant & equipment as per AS 10)
You are required to prepare the Balance Sheet of the Company as on March 31st 2020 as required
under Part – I of Schedule III of the Companies Act, 2013. Ignore previous year figures. (20 Marks)
3. (a) From the following information, prepare Trading and Profit & Loss Account for the year ended
31.03.2020 and the Balance Sheet as at 31.03.2020 of M/s Prasad & Co., a proprietorship firm.
Assets & Liabilities As on 01.04.2019 As on 31.03.2020
Creditors 20,000 15,000
Outstanding Expenses 600 800
Fixed Assets 12,000 13,000
Stock 10,000 12,000
Cash in hand 7,500 2,000
Cash at Bank 2,500 10,000
Debtors ? 18,000

Details of the year’s transactions are as follows:
(1) Discounts allowed to Debtor 4,000
(2) Returns from debtors 1,450
(3) Bad debts 500
(4) Total sales (Cash and Credit) 72,000
(5) Discount allowed by creditors 700
(6) Returns to creditors 400
(7) Receipts from debtors paid into Bank 76,000
(8) Cash purchases 1,000
(9) Expenses paid by cash 9,000
(10) Drawings by cheque 500
(11) Purchase of Fixed Assets by cheque 4,000
(12) Cash deposited into bank 5,000
(13) Cash withdrawn from bank 9,000
(14) Cash in hand at 31.03.2020 2,000
(15) Payments to creditors by cheque 60,000
No assets were sold during the year. Any difference in cash account to be considered as cash
sales.
(b) From the following details of Western Branch Office of M/s. XYZ Corp. for the year ending
31st March, 2020, ascertain branch stock reserve in respect of unrealized profit in opening stock
and closing stock:
(i) Goods are sent to the branch at invoice price and branch also maintains stock at the same
price.
(ii) Sale price is cost plus 40%.
(iii) Invoice price is cost plus 15%.
(iv) Other information from accounts of branch:
Opening Stock as on 01-04-2019 3,45,000
Goods sent during the year by Head Office to Branch 16,10,000
Sales during the year 21,00,000
Expenses incurred at the branch 45,000
(16 + 4 = 20 Marks)
4. (a) On 1st April, 2019, Mr. Vijay had 30,000 Equity shares in X Ltd. (the company) at a book value of
Rs. 4,50,000 (Face Value Rs. 10 per share). On 22nd June, 2019, he purchased another 5000
shares of the same company for Rs. 80,000.
The Directors of X Ltd. announced a bonus of equity shares in the ratio of one share for seven
shares held on 10th August, 2019.

On 31st August, 2019 the Company made a right issue in the ratio of three shares for every eight
shares held, on payment of Rs. 15 per share. Due date for the payment was 30 th September,
2019, Mr. Vijay subscribed to 2/3rd of the right shares and sold the remaining of his entitlement to
Viru for a consideration of Rs. 2 per share.
On 31stOctober,2019, Vijay received dividends from X Ltd. @ 20% for the year ended 31 st March,
2019. Dividend for the shares acquired by him on 22ndJune,2019 to be adjusted against the cost
of purchase.
On 15th November, 2019 Vijay sold 20,000 Equity shares at a premium of Rs. 5 per share.
You are required to prepare Investment Account in the books of Mr. Vijay for the year ended 31st
March, 2020 assuming the shares are being valued at average cost.
(b) On 2.6.2019, there occurred a fire in the warehouse of Mr. White and his total stock was
destroyed by fire. However, following information could be obtained from the records saved:
Rs.
Stock at cost on 1.4.2018 10,80,000
Stock at 90% of cost on 31.3.2019 12,96,000
Purchases for the year ended 31.3.2019 51,60,000
Sales for the year ended 31.3.2019 72,00,000
Purchases from 1.4.2019 to 2.6.2019 18,00,000
Sales from 1.4.2019 to 2.6.2019 38,40,000
Sales up to 2.6.2019 includes Rs.6,00,000 (invoice price) being the goods not dispatched to the
customers. Purchases up to 2.6.2019 includes a machinery acquired for Rs.1,20,000. However, it
does not include goods worth Rs. 2,40,000 received from suppliers, as invoice not received up to
the date of fire. These goods have remained in the godown at the time of fire. The insurance
policy is for Rs. 9,60,000 and it is subject to average clause.
You are required to ascertain the amount of claim for loss of stock applying average clause.
(10 + 10 = 20 Marks)
5. (a) Prepare Cash Flow Statement of Tom & Jerry Ltd. for the year ended 31 stMarch, 2020, in
accordance with AS-3 (Revised) from the following Summary Cash Account:
Summary Cash Account
Rs. in '000 Rs. in'000
Balance as on 01.04.2019 210
Receipts from Customers 16,596
Sale of Investments (Cost Rs. 90,000) 102
Issue of Shares 1,800
Sale of Fixed Assets 768
19,476
Payment to Suppliers 12,204
5

Purchase of Investments 78
Purchase of Fixed Assets 1,380 ,
Wages & Salaries 414
Selling & Administration Expenses 690
Payment of Income Tax 1,458
Payment of Dividends 480
Repayment of Bank Loan 1,500
Interest paid on Bank Loan 300 (18,504)
Balance as on 31.03.2020 972
(b) The capital structure of a AP Ltd. consists of 20,000 Equity Shares of Rs.10 each fully paid up
and 1,000 8% Redeemable Preference Shares of Rs.100 each fully paid up (issued on 1.4.20X1).
Undistributed reserve and surplus stood as: General Reserve Rs. 80,000; Profit and Loss
Account Rs. 20,000; Investment Allowance Reserve is Rs. 10,000 out of which Rs. 5,000 is not
ascertained as free reserve; Cash at bank amounted to Rs. 98,000. Preference shares are to be
redeemed at a Premium of 10% and for the purpose of redemption, the directors are empowered
to make fresh issue of Equity Shares at par after utilising the undistributed reserve and surplus,
subject to the conditions that a sum of Rs. 20,000 shall be retained in general reserve and which
should not be utilised.
Pass Journal Entries to give effect to the above arrangements and also show how the relevant
items will appear in the Balance Sheet of the company after the redemption carried out.
(8+12 = 20 Marks)
6. (a) Rau Ltd. purchased a plant for US$ 1,00,000 on 01st February 2020, payable after three months.
Company entered into a forward contract for three months @ Rs. 49.15 per dollar. Exchange rate
per dollar on 01st Feb. was Rs. 48.85. How will you recognize the profit or loss on forward
contract in the books of Rau Ltd.?
OR
Omega Ltd., has a normal wastage of 4% in the production process. During the year 2019-20, the
Company used 12,000 MT of raw material costing Rs. 150 per MT. At the end of the year 630 MT
of wastage was ascertained in stock. The accountant wants to know how this wastage is to be
treated in the books.
You are required to compute the amount of normal and abnormal loss and treatment thereof in
line with AS 2 “Valuation of inventories”.
(b) M/s. Kodam Enterprises purchased a generator on hire purchase from M/s. Sanctum Ltd. on
1stApril, 2019. The hire purchase price was Rs.48,000. Down payment was Rs.12,000 and the
balance is payable in 3 annual instalments of Rs.12,000 each payable at the end of each
financial year. Interest is payable @ 8% p.a. and is included in the annual payment of Rs.12,000.
Depreciation at 10% p.a. is to be written off using the straight line method.
You are required to calculate the cash price of the generator and the interest paid on each
instalment.

(c) A Limited company with subscribed capital of Rs. 5,00,000 consisting of 50,000 Equity shares of
Rs. 10 each; called up capital Rs. 7.50 per share. A bonus of Rs. 1,25,000 declared out of
General Reserve to be applied in making the existing shares fully paid up. You are required to
pass necessary Journal Entries (with narration) for this issue of bonus shares.
(d) XYZ Ltd. has issued 1,000, 12% convertible debentures of Rs. 100 each redeemable after a
period of five years. According to the terms & conditions of the issue, these debentures were
redeemable at a premium of 5%. The debenture holders also had the option at the time of
redemption to convert 20% of their holdings into equity shares of Rs. 10 each at a price of Rs. 20
per share and balance in cash. Debenture holders amounting Rs. 20,000 opted to get their
debentures converted into equity shares as per terms of the issue.
You are required to calculate the number of shares issued and cash paid for redemption of Rs.
20,000 debenture holders and also pass journal entry for conversion and redemption of
debentures. (4 Parts x 5 Marks = 20 Marks)

Test Series: October, 2020
MOCK TEST PAPER
1. (a) Om Ltd. purchased an item of property, plant and equipment for US $ 50 lakh on 01.04.2019 and
the same was fully financed by the foreign currency loan [US $] repayable in five equal instalments
annually. (Exchange rate at the time of purchase was 1 US $ = ` 60]. As on 31.03.2020 the first
instalment was paid when 1 US $ fetched ` 62.00. The entire loss on exchange was included in
cost of goods sold. Om Ltd. normally provides depreciation on an item of property, plant and
equipment at 20% on WDV basis and exercised the option to adjust the cost of asset for exchange
difference arising out of loan restatement and payment. Calculate the amount of exchange loss,
its treatment and depreciation on this item of property, plant and equipment.
(b) On 01.04.2017, XYZ Ltd. received Government grant of ` 100 Lakhs for an acquisition of new
machinery costing ` 500 lakhs. The grant was received and credited to the cost of the assets. The
life span of the machinery is 5 years. The machinery is depreciated at 20% on WDV method. The
company had to refund the entire grant in 2 nd April, 2020 due to non-fulfilment of certain conditions
which was imposed by the government at the time of approval of grant. How do you deal with the
refund of grant to the Government in the books of XYZ Ltd. as per AS 12?
(c) (i) Entity A carried plant and machinery in its books at ` 2,00,000 which were destroyed in a fire.
These machines were insured 'New for old' and were replaced by the insurance company with
new machines of fair value ` 20,00,000. The old destroyed machines were acquired by the
insurance company and the company did not receive any cash compensation. State, how
Entity A should account for the same?
(ii) Omega Ltd, a supermarket chain, is renovating one of its major stores. The store will have
more available space for store promotion outlets after the renovation and will include a
restaurant. Management is preparing the budgets for the year after the store reopens, which
include the cost of remodelling and the expectation of a 15% increase in sales resulting from
the store renovations, which will attract new customers.
Decide whether Omega Ltd. can capitalize the remodelling cost or not as per provisions of
AS 10 “Property plant & Equipment”.
(d) What do you mean by the term “cash and cash equivalent” as per AS 3? From the following
information of XYZ Limited, calculate cash and cash equivalent as on 31-03-2019.
Particulars Amount (`)
Cash balance with Bank 10,000
Fixed Deposit created on 01-11-2018 and maturing on15-07-2019 75,000
Short Term Investment in highly liquid Sovereign Debt Mutual fund made on 1,00,000
01-03-2019 (having maturity period of less than 3 months)
Bank Balance in a Foreign Currency Account in India $ 1,000

(Conversion Rate:
on the day of deposit ` 69/USD; ` 70/USD as on 31-03-2019)
Debentures purchased of ` 10 lacs of A Ltd., which are redeemable on 90,000
31st October, 2019
Shares of Alpha Ltd. purchased on 1 st January, 2019 60,000
2. (a) Shree Ltd. has authorized capital of ` 50 lakhs divided into 5,00,000 equity shares of ` 10 each.
Their books show the following balances as on 31 st March, 2020:
` `
Inventory 1.4.2019 6,65,000 Bank balance in Current Account 20,000
Discounts & Rebates allowed 30,000 Cash in hand 8,000
Carriage Inwards 57,500 Interest (bank overdraft) 1,11,000
Patterns 3,75,000 Calls in Arrear @ `2 per share 10,000
Rate, Taxes and Insurance 55,000 Equity share capital 20,00,000
Furniture & Fixtures 1,50,000 (2,00,000 shares of ` 10 each)
Purchases 12,32,500 Bank Overdraft 12,67,000
Wages 13,68,000
Freehold Land 16,25,000 Trade Payables (for goods) 2,40,500
Plant & Machinery 7,50,000 Sales 36,17,000
Engineering Tools 1,50,000 Rent (Cr.) 30,000
Trade Receivables 4,00,500 Transfer fees received 6,500
Advertisement 15,000 Profit & Loss A/c (Cr.) 67,000
Commission & Brokerage (Dr.) 67,500 Repairs to Building 56,500
Business Expenses 56,000 Bad debts 25,500
You are required to prepare Statement of Profit & Loss for the year ended 31 st March, 2020 and
Balance Sheet as on that date in line with Schedule III to the Companies Act, 2013 after considering
the following:
The inventory (valued at cost or market value, which is lower) as on 31 st March, 2020 was
` 7,08,000. Outstanding liabilities for wages ` 25,000 and business expenses ` 36,000.
Charge depreciation on closing written down value of Plant & Machinery @ 5%, Engineering Tools
@ 20%; Patterns @ 10%; and Furniture & Fixtures @10%. Provide 25,000 as doubtful debts after
writing off ` 16,000 as additional bad debts. Provide for income tax @ 30%.
(b) Medha Ltd. took a loan from bank for ` 10,00,000 to be settled within 5 years in 10 equal half yearly
instalments with interest. First instalment is due on 30.09.2020 of ` 1,00,000. Determine how the
loan will be classified in preparation of Financial Statements of Medha Ltd. for the year ended 31st
March, 2020 according to Schedule III. (16 + 4 = 20 Marks)
3. (a) (i) Mr. Vijay entered into the following transactions of purchase and sale of equity shares of JP
Power Ltd. The shares have paid up value of ` 10 per share.
Date No. of Shares Terms
01.01.2019 600 Buy @ ` 20 per share
15.03.2019 900 Buy @ ` 25 per share
20.05.2019 1000 Buy @ ` 23 per share
2

25.07.2019 2500 Bonus Shares received
20.12.2019 1500 Sale @ ` 22 per share
01.02.2020 1000 Sale @ ` 24 per share
Addition information:
(1) On 15.09.2019 dividend @ ` 3 per share was received for the year ended 31.03.2019.
(2) On 12.11.2019 company made a right issue of equity shares in the ratio of one share for
five shares held on payment of ` 20 per share. He subscribed to 60% of the shares and
renounced the remaining shares on receipt of ` 3 per share.
(3) Shares are to be valued on weighted average cost basis.
You are required to prepare Investment Account for the year ended 31.03.2019 and
31.03.2020.
(ii) Whether the accounting treatment 'at cost' under the head ‘Long Term Investments’ without
providing for any diminution in value is correct and in accordance with the provisions of
AS 13. If not, what should have been the accounting treatment in such a situation? What
methodology should be adopted for ascertaining the provision for diminution in the value of
investment, if any. Explain in brief. (8 + 4 =12 Marks)
(b) A fire occurred in the premises of M/s. Fireproof on 31 st August, 2020. From the following particulars
relating to the period from 1 st April, 2020 to 31 st August, 2020, you are requested to ascertain the
amount of claim to be filed with the insurance company for the loss of stock. The concern had taken
an insurance policy for ` 60,000 which is subject to an average clause.
`
(i) Stock as per Balance Sheet at 31-03-2020 99,000
(ii) Purchases 1,70,000
(iii) Wages (including wages for the installation of a machine ` 3,000) 50,000
(iv) Sales 2,42,000
(v) Sale value of goods drawn by partners 15,000
(vi) Cost of goods sent to consignee on 16 th August, 2020, lying unsold with 16,500
them
(vii) Cost of goods distributed as free samples 1,500
While valuing the stock at 31 st March, 2020, ` 1,000 were written off in respect of a slow moving
item. The cost of which was ` 5,000. A portion of these goods were sold at a loss of
` 500 on the original cost of ` 2,500. The remainder of the stock is now estimated to be worth the
original cost. The value of goods salvaged was estimated at ` 20,000. The average rate of gross
profit was 20% (on sales) throughout. (8 Marks)
4. (a) The following balances were extracted from the books of Beta. You are required to prepare
Departmental Trading Account and general Profit & Loss Account for the year ended
31st March, 2020:
` `
Opening Stock 3,00,000 2,40,000
Purchases 39,00,000 54,60,000
Sales 60,00,000 90,00,000

General expenses incurred for both the Departments were ` 7,50,000 and you are also supplied
with the following information:
(i) Closing stock of Department A ` 6,00,000 including goods from Department B for ` 1,20,000
at cost to Department A.
(ii) Closing stock of Department B ` 12,00,000 including goods from Department A for ` 1,80,000
at cost to Department B.
(iii) Opening stock of Department A and Department B include goods of the value of ` 60,000 and
` 90,000 taken from Department B and Department A respectively at cost to transferee
departments.
(iv) The gross profit is uniform from year to year.
(b) Ram carried on business as retail merchant. He has not maintained regular account books.
However, he always maintained ` 10,000 in cash and deposited the balance into the bank account.
He informs you that he has sold goods at profit of 25% on sales.
Following information is given to you:
Assets and Liabilities As on 1.4.2019 As on 31.3.2020
Cash in Hand 10,000 10,000
Sundry Creditors 40,000 90,000
Cash at Bank 50,000 (Cr.) 80,000 (Dr.)
Sundry Debtors 1,00,000 3,50,000
Stock in Trade 2,80,000 ?
Ram’s capital 3,00,000
Analysis of his bank pass book reveals the following information:
(a) Payment to creditors ` 7,00,000
(b) Payment for business expenses ` 1,20,000
(c) Receipts from debtors ` 7,50,000
(d) Loan from Laxman ` 1,00,000 taken on 1.10.2019 at 10% per annum
(e) Cash deposited in the bank ` 1,00,000
He informs you that he paid creditors for goods ` 20,000 in cash and salaries ` 40,000 in cash.
He has drawn ` 80,000 in cash for personal expenses. During the year Ram had not introduced
any additional capital. Surplus cash if any, to be taken as cash sales.
You are required to prepare: (i) Trading and Profit and Loss Account for the year ended 31.3.2020.
(ii) Balance Sheet as at 31 st March, 2020. (8 + 12 = 20 Marks)
5. (a) The partners of Ojasvi Enterprises decided to convert the partnership firm into a Private Limited
Company Tejasvi (P) Ltd. with effect from 1 st January, 2019. However, company could be
incorporated only on 1 st June, 2019. The business was continued on behalf of the company and
the consideration of ` 6,00,000 was settled on that day along with interest @ 12% per annum. The
company availed loan of ` 9,00,000 @ 10% per annum on 1 st June, 2019 to pay purchase
consideration and for working capital. The company closed its accounts for the first time on
31st March, 2020 and presents you the following summarized profit and loss account:
` `
Sales 19,80,000
Cost of goods sold 11,88,000
Discount to dealers 46,200
4

Directors’ remuneration 60,000
Salaries 90,000
Rent 1,35,000
Interest 1,05,000
Depreciation 30,000
Office expenses 1,05,000
Preliminary expenses (to be written off in first year itself) 15,000
17,74,200
Profit 2,05,800
Sales from June, 2019 to December, 2019 were 2½ times of the average sales, which further
increased to 3½ times in January to March quarter, 2019. The company recruited additional work
force to expand the business. The salaries from July, 2019 doubled. The company also acquired
additional showroom at monthly rent of ` 10,000 from July, 2019.
You are required to prepare a statement showing apportionment of cost and revenue between pre-
incorporation and post-incorporation periods.
(b) L Ltd. has its head office at Mumbai and two branches at Pune and Goa. The branches purchase
goods independently. Pune branch makes a profit of one third on cost and Goa branch makes a
profit of 20% on sales. Goods are also supplied by one branch to another at the respective sales
price. From the following particulars, prepare the Trading and Profit and Loss Account of Pune
branch and find out the profit or loss made by it considering the reserve for unrealised profits:
Particulars Pune Branch ` Goa Branch `
Opening Stock 40,000 30,000
Purchases (Including Inter Branch transfers) 2,00,000 2,50,000
Sales 2,80,000 2,95,625
Chargeable Expenses 15,000 27,500
Closing Stock 30,000 43,500
Office and Administration Expenses 13,250 7,000
Selling and Distribution Expenses 15,000 10,000
Information:
(i) Opening stock at Pune Branch includes goods of ` 10,000 (invoice price) taken from Goa
Branch,
(ii) Opening stock at Goa Branch includes goods of invoice price ` 17,000 taken from Pune
Branch,
(iii) The Pune Branch sales includes transfer of goods to Goa Branch at selling price ` 20,000
(iv) The sales of Goa Branch include transfer of goods to Pune Branch at selling price ` 15,000.
(v) Closing stock at Pune Branch includes goods received from Goa Branch (invoice price
` 5,000.
(vi) Closing stock at Goa Branch includes goods of ` 4,000 (invoice price).
(c) Ganesh Ltd. has head office at Delhi (India) and branch at New York. New York branch is an
integral foreign operation of Ganesh Ltd. New York branch furnishes you with its trial balance as
on 31st March, 2020 and the additional information given thereafter:
Dr. ($) Cr. ($)
Stock on 1st April, 2019 300 –

Purchases and sales 800 1,500
Sundry Debtors and creditors 400 300
Bills of exchange 120 240
Sundry expenses 1,080 –
Bank balance 420 –
Delhi office A/c – 1,080
3,120 3,120
The rates of exchange may be taken as follows:
 on 1.4.2019 @ ` 40 per US $
 on 31.3.2020 @ ` 42 per US $
 average exchange rate for the year @ ` 41 per US $.
New York branch account showed a debit balance of ` 44,380 on 31.3.2020 in Delhi books and
there were no items pending reconciliation.
You are asked to prepare trial balance of New York in ` in the books of Ganesh Ltd.
(10 + 6 + 4 = 20 Marks)
6. (a) The following are the extracts from the Balance Sheet of ABC Ltd. as on 31st March, 2020.
Share capital: 40,000 Equity shares of ` 10 each fully paid – ` 4,00,000; 1,000 10% Redeemable
preference shares of ` 100 each fully paid – ` 1,00,000.
Reserve & Surplus: Capital reserve – ` 50,000; Securities premium – ` 50,000; General reserve –
` 75,000; Profit and Loss Account – ` 35,000
On 1st April 2020, the Board of Directors decided to redeem the preference shares at par by
utilisation of reserve.
You are required to pass necessary Journal Entries including cash transactions in the books of the
company.
(b) The following extract of Balance Sheet of X Ltd. as on 31.3.2020 (a non-investment company) was
obtained:
Liabilities `
Issued and subscribed capital:
20,000, 14% preference shares of ` 100 each fully paid 20,00,000
1,20,000 Equity shares of ` 100 each, ` 80 paid-up 96,00,000
Capital reserves (` 1,50,000 is revaluation reserve) 1,95,000
Securities premium 50,000
15% Debentures 65,00,000
Unsecured loans: Public deposits repayable after one year 3,70,000
Investment in shares, debentures, etc. 75,00,000
Profit and Loss account (debit balance) 15,00,000
You are required to compute Effective Capital as per the provisions of Schedule V to Companies
Act, 2013.

(c) Mr. Aman is running a business of readymade garments. He does not maintain his books of
accounts under double entry system. While assessing the income of Mr. Aman for the financial
year 2018-19, Income Tax Officer feels that he has not disclosed the full income earned by him
from his business. He provides you the following information:
On 31st March, 2018
Sundry Assets `16,65,000
Liabilities `4,13,000
On 31st March, 2019
Sundry Assets `28,40,000
Liabilities `5,80,000
Mr. Aman’s drawings for the year 2018-19 `32,000 per month
Income declared to the Income Tax Officer `9,12,000
During the year 2018-19, one life insurance policy of Mr. Aman was matured and amount received
` 50,000 was retained in the business.
State whether the Income Tax Officer's contention is correct. Explain by giving your working.
OR
On April, 2017, X Ltd. sells a Trucks on hire purchase basis to Transporters & Co. for a total
1st
purchase price of ` 18,00,000 payable as to ` 4,80,000 as down payment and the balance in three
equal annual instalments of ` 4,40,000 each payable on 31st March 2018, 2019 and 2020.
The hire vendor charges interest @ 10% per annum.
You are required to ascertain the cash price of the truck for Transporters & Co. Calculations may
be made to the nearest rupee.
(d) ABC Ltd. has entered into a binding agreement with XYZ Ltd. to buy a custom -made machine
amounting to Rs. 4,00,000. As on 31st March, 2020 before delivery of the machine, ABC Ltd. had
to change its method of production. The new method will not require the machine ordered and so
it shall be scrapped after delivery. The expected scrap value is ‘NIL’. Show the treatment of
machine in the books of ABC Ltd. (4 Parts x 5 Marks = 20 Marks)

Test Series: March, 2021
MOCK TEST PAPER 1
1. (a) HIL Ltd. was making provision for non-moving stocks based on no issues having occurred for the
last 12 months upto 31.03.2019. The company now wants to change it and make provision based
on technical evaluation during the year ending 31.03.2020. Total value of stock on 31.3.20 is Rs.
120 lakhs. Provision required based on technical evaluation amounts Rs. 3.00 lakhs. However,
provision required based on 12 months (no issues) is Rs. 4.00 lakhs. You are required to discuss
the following points in the light of Accounting Standard (AS)-1:
(i) Does this amount to change in accounting policy?
(ii) Can the company change the method of accounting?
(iii) Explain how it will be disclosed in the annual accounts of HIL Ltd. for the year 2019-20.
(b) Viva Ltd. received a specific grant of Rs. 30 lakhs for acquiring the plant of Rs. 150 lakhs during
2016-17 having useful life of 10 years. The grant received was credited to deferred income in the
balance sheet and was not deducted from the cost of plant. During 2019-20, due to non-
compliance of conditions laid down for the grant, the company had to refund the whole grant to
the Government. Balance in the deferred income on that date was Rs. 21 lakhs and written down
value of plant was Rs. 105 lakhs. What should be the treatment of the refund of the grant and the
effect on cost of the fixed asset and the amount of depreciation to be charged during the year
2019-20 in profit and loss account?
(c) Neon Enterprise operates a major chain of restaurants located in different cities. The company
has acquired a new restaurant located at Chandigarh. The new-restaurant requires significant
renovation expenditure. Management expects that the renovations will last for 3 months during
which the restaurant will be closed.
Management has prepared the following budget for this period –
Salaries of the staff engaged in preparation of restaurant before its opening Rs. 7,50,000
Construction and remodelling cost of restaurant Rs. 30,00,000
Explain the treatment of these expenditures as per the provisions of AS 10 "Property, Plant and
Equipment".
(d) In a production process, normal waste is 5% of input. 5,000 MT of input were put in process
resulting in wastage of 300 MT. Cost per MT of input is Rs. 1,000. The entire quantity of waste
and finished output is in stock at the year end. State with reference to Accounting Standard, how
will you value the inventories in this case? What will be treatment for normal and abnormal
waste? (4 parts x 5 Marks = 20 Marks)
2. (a) On 1st April, 2019, Rajat has 50,000 equity shares of P Ltd. at a book value of Rs. 15 per share
(face value Rs. 10 each). He provides you the further information:
(1) On 20th June, 2019 he purchased another 10,000 shares of P Ltd. at Rs. 16 per share.

(2) On 1st August, 2019, P Ltd. issued one equity bonus share for every six shares held by the
shareholders.
(3) On 31st October, 2019, the directors of P Ltd. announced a right issue which entitles the
holders to subscribe three shares for every seven shares at Rs. 15 per share. Shareholders
can transfer their rights in full or in part.
Rajat sold 1/3rd of entitlement to Umang for a consideration of Rs. 2 per share and subscribed the
rest on 5th November, 2019.
You are required to prepare Investment A/c in the books of Rajat for the year ending
31st March, 2020.
(b) A fire engulfed the premises of a business of M/s Kite in the morning, of 1 st October, 2019. The
entire stock was destroyed except, stock salvaged of Rs. 50,000. Insurance Policy was for
Rs. 5,00,000 with average clause.
Stock in hand on 31st March, 2019 Rs. 3,50,000
The following information was obtained from the records saved for the period from
1st April to 30th September, 2019:
Rs.
Sales 27,75,000
Purchases 18,75,000
Carriage inward 35,000
Carriage outward 20,000
Wages 40,000
Salaries 50,000
Additional Information:
(1) Sales upto 30th September, 2019, includes Rs. 75,000 for which goods had not been
dispatched.
(2) On 1stJune, 2019, goods worth Rs. 1,98,000 sold to Hari on approval basis which was
included in sales but no approval has been received in respect of 2/3rd of the goods sold to
him till 30th September, 2019.
(3) Purchases upto 30th September, 2019 did not include Rs. 1,00,000 for which purchase
invoices had not been received from suppliers, though goods have been received in
godown.
(4) Past records show the gross profit rate of 25% on sales.
You are required to prepare the statement of claim for loss of stock for submission to the
Insurance Company. .
(c) Identify four differences between Hire Purchase and Installment Payment agreement.
(8 + 8 + 4 = 20 Marks)
3. (a) Moon Star has a branch at Virginia (USA). The Branch is a non-integral foreign operation of the
Moon Star. The trial balance of the Branch as at 31st March, 2020 is as follows:
Particulars US $
Dr. Cr.
Office equipments 48,000
Furniture and Fixtures 3,200

Stock (April 1, 2019) 22,400
Purchases 96,000
Sales --- 1,66,400
Goods sent from H.O 32,000
Salaries 3,200
Carriage inward 400
Rent, Rates & Taxes 800
Insurance 400
Trade Expenses 400
Head Office Account --- 45,600
Sundry Debtors 9,600
Sundry Creditors --- 6,800
Cash at Bank 2,000
Cash in Hand 400
2,18,800 2,18,800
The following further information is given:
(1) Salaries outstanding $ 400.
(2) Depreciate office equipment and furniture & fixtures @10% p.a. at written down value.
(3) The Head Office sent goods to Branch for Rs.15,80,000.
(4) The Head Office shows an amount of Rs. 20,50,000 due from Branch.
(5) Stock on 31st March, 2020 -$21,500.
(6) There were no transit items either at the start or at the end of the year.
(7) On April 1, 2018 when the fixed assets were purchased the rate of exchange was
Rs. 43 to one $. On April 1, 2019, the rate was 47 per $. On March 31, 2020 the rate was
Rs. 50 per $. Average rate during the year was Rs. 45 to one $.
Prepare Trial balance incorporating adjustments given converting dollars into rupees and
Trading, Profit and Loss Account for the year ended 31 st March, 2020 of the Branch as would
appear in the books of Moon Star for the purpose of incorporating in the main Balance Sheet.
(b) Archana Enterprises maintain their books of accounts under single entry system. The Balance-
Sheet as on 31st March, 2018 was as follows :
Liabilities Amount (Rs.) Assets Amount (Rs.)
Capital A/c 6,75,000 Furniture & fixtures 1,50,000
Trade creditors 7,57,500 Stock 9,15,000
Outstanding expenses 67,500 Trade debtors 3,12,000
Prepaid insurance 3,000
Cash in hand & at bank 1,20,000
15,00,000 15,00,000

The following was the summary of cash and bank book for the year ended 31st March, 2019:
Receipts Amount (Rs.) Payments Amount (Rs.)
Cash in hand & at Bank 1,20,000 Payment to trade creditors 1,24,83,000
on 1st April, 2018
Cash sales 1,10,70,000 Sundry expenses paid 9,31,050
Receipts from trade 27,75,000 Drawings 3,60,000
debtors
Cash in hand & at Bank on
31st March, 2019 1,90,950
1,39,65,000 1,39,65,000
Additional Information:
(i) Discount allowed to trade debtors and received from trade creditors amounted to
Rs. 54,000 and Rs. 42,500 respectively (for the year ended 31st March, 2019).
(ii) Annual fire insurance premium of Rs. 9,000 was paid every year on 1st August for the
renewal of the policy.
(iii) Furniture & fixtures were subject to depreciation @ 15% p.a. on diminishing balance
method.
(iv) The following are the balances as on 31st March, 2019:
Stock Rs. 9,75,000
Trade debtors Rs. 3,43,000
Outstanding expenses Rs. 55,200
(v) Gross profit ratio of 10% on sales is maintained throughout the year.
You are required to prepare Trading and Profit & Loss account for the year ended
31st March, 2019, and Balance Sheet as on that date. (8 + 12 = 20 Marks)
4. (a) The following balances were extracted from the books of Beta. You are required to prepare
Departmental Trading Account and General Profit & Loss Account for the year ended
31st December, 2020:
Rs. Rs.
Opening Stock 3,00,000 2,40,000
Purchases 39,00,000 54,60,000
Sales 60,00,000 90,00,000
General expenses incurred for both the Departments were Rs. 7,50,000 and you are also
supplied with the following information:
(i) Closing stock of Department A Rs. 6,00,000 including goods from Department B for
Rs. 1,20,000 at cost to Department A.
(ii) Closing stock of Department B Rs. 12,00,000 including goods from Department A for
Rs. 1,80,000 at cost to Department B.
(iii) Opening stock of Department A and Department B include goods of the value of
Rs. 60,000 and Rs. 90,000 taken from Department B and Department A respectively at cost
to transferee departments.
(iv) The gross profit is uniform from year to year.
4

(b) The capital structure of AP Ltd. consists of 20,000 Equity Shares of Rs.10 each fully paid up and
1,000 8% Redeemable Preference Shares of Rs.100 each fully paid up.
Undistributed reserve and surplus stood as: General Reserve Rs. 80,000; Profit and Loss
Account Rs. 20,000; Investment Allowance Reserve is Rs. 10,000 out of which Rs. 5,000 is not
ascertained as free reserve; Cash at bank amounted to Rs. 98,000.
Preference shares are to be redeemed at a Premium of 10% and for the purpose of redemption,
the directors are empowered to make fresh issue of Equity Shares at par after utilizing the
undistributed reserves and surplus, subject to the condition that a sum of Rs. 20,000 shall be
retained in general reserve which should not be utilized.
You are required to pass Journal Entries to give effect to the above arrangements and also show
how the relevant items will appear in the Balance Sheet of the company after the redemption is
carried out. (8 + 12 = 20 Marks)
5. (a) From the following particulars furnished by Alpha Ltd., prepare the Balance Sheet as on
31st March 2020 as required by Part I, Schedule III of the Companies Act, 2013.
Particulars Debit Rs. Credit Rs.
Equity Share Capital (Face value of Rs. 100 each) 50,00,000
Call in Arrears 5,000
Building 27,50,000
Plant & Machinery 26,25,000
Furniture 2,50,000
Loan from State Financial Corporation 7,50,000
Inventory:
Raw Materials 2,50,000
Finished Goods 10,00,000 12,50,000
Provision for Taxation 6,40,000
Trade receivables 10,00,000
Short term Advances 2,13,500
Profit & Loss Account 4,33,500
Cash in Hand 1,50,000
Cash at Bank 12,35,000
Unsecured Loan 6,05,000
Trade payables (for Goods and Expenses) 8,00,000
Loans & advances from related parties 2,00,000
The following additional information is also provided:
(i) 10,000 Equity shares were issued for consideration other than cash.
(ii) Trade receivables of Rs. 2,60,000 are due for more than 6 months.
(iii) The cost of the Assets were:
Building Rs. 30,00,000, Plant & Machinery Rs. 35,00,000 and Furniture Rs. 3,12,500
(iv) The balance of Rs. 7,50,000 in the Loan Account with State Finance Corporation is inclusive
of Rs. 37,500 for Interest Accrued but not Due. The loan is secured by hypothecation of
Plant & Machinery.
5

(v) Balance at Bank includes Rs. 10,000 with Omega Bank Ltd., which is not a Scheduled
Bank.
(vi) Transfer Rs. 20,000 to general reserve as proposed by Board of directors.
(b) XYZ Ltd. has issued 1,000, 12% convertible debentures of Rs. 100 each redeemable after a
period of five years. According to the terms & conditions of the issue, these debentures were
redeemable at a premium of 5%. The debenture holders also had the option at the time of
redemption to convert 20% of their holdings into equity shares of Rs. 10 each at a price of Rs. 20
per share and balance in cash. Debenture holders amounting Rs. 20,000 opted to get their
debentures converted into equity shares as per terms of the issue.
You are required to calculate the number of shares issued and cash paid for redemption of
Rs. 20,000 debenture holders and also pass journal entry for conversion and redemption of
debentures. (15+5=20 Marks)
6. (a) Omega Limited has borrowed a sum of US $ 10,00,000 at the beginning of Financial Year
2019-20 for its residential project at 4 %. The interest is payable at the end of the Financial Year.
At the time of availment of loan exchange rate was Rs. 56 per US $ and the rate as on 31st
March, 2020 was Rs. 62 per US $. If Omega Limited had borrowed the loan in India in Indian
Rupee equivalent, the pricing of loan would have been 10.50%.
You are required to compute Borrowing Cost and exchange difference for the year ending
31st March, 2020 as per applicable Accounting Standards.
(b) The following extract of Balance Sheet of X Ltd. (a non-investment company) was obtained:
Balance Sheet (Extract) as on 31st March, 2020
Liabilities Rs.
20,000, 14% preference shares of Rs. 100 each fully paid 20,00,000
1,20,000 Equity shares of Rs. 100 each, Rs. 80 paid-up 96,00,000
Capital reserves (Rs. 1,50,000 is revaluation reserve) 1,95,000
Unsecured loans: Public deposits repayable after one year 3,70,000
You are required to compute Effective Capital as per the provisions of Schedule V to Companies
Act, 2013.
OR
Following items appear in the Trial Balance of Hello Ltd. as on 31st March, 2020:
Particulars Amount
9,000 Equity Shares of Rs.100 each 9,00,000
Securities Premium 80,000
Capital Redemption Reserve 1,40,000
Profit and Loss Account (Cr. Balance) 90,000

The company decided to issue to equity shareholders bonus shares at the rate of 1 share for
every 3 shares held. Company decided that there should be the minimum reduction in free
reserves. You are required to give the necessary Journal Entries in the books Hello Ltd.
(c) Prepare cash flow from investing activities as per AS 3 of M/s Subham Creative Limited for year
ended 31.3.2019.
Particulars Amount (Rs.)
Machinery acquired by issue of shares at face value 2,00,000
Claim received for loss of machinery in earthquake 55,000
Unsecured loans given to associates 5,00,000
Interest on loan received from associate company 70,000
Pre-acquisition dividend received on investment made 52,600
Debenture interest paid 1,45,200
Term loan repaid 4,50,000
Interest received on investment (TDS of Rs. 8,200 was deducted on the 73,800
above interest)
Book value of plant & machinery sold (loss incurred Rs. 9,600) 90,000
(d) Explain in brief, the alternative measurement bases, for determining the value at which an
element can be recognized in the Balance Sheet or Statement of Profit and Loss.
(e) M/s. Kodam Enterprises purchased a generator on hire purchase from M/s. Sanctum Ltd. on
1stApril, 2019. The hire purchase price was Rs.48,000. Down payment was Rs.12,000 and the
balance is payable in 3 annual instalments of Rs.12,000 each payable at the end of each
financial year. Interest is payable @ 8% p.a. and is included in the annual payment of Rs.12,000.
Depreciation at 10% p.a. is to be written off using the straight line method.
You are required to calculate the cash price of the generator and the interest paid on each
instalment. (4 Parts x 5 Marks = 20 Marks)

Test Series: April, 2021
MOCK TEST PAPER 2
1. (a) (i) “In determining the cost of inventories, it is appropriate to exclude certain costs and
recognize them as expenses in the period in which they are incurred”. Provide examples of
such costs as per AS 2 ‘Valuation of Inventories’.
(ii) X Limited purchased goods at the cost of Rs. 40 lakhs in October, 2020. Till March, 2021,
75% of the stocks were sold. The company wants to disclose closing stock at Rs. 10 lakhs.
The expected sale value is Rs. 11 lakhs and a commission at 10% on sale is payable to the
agent. Advise, what is the correct value of closing stock to be disclosed as at 31.3.2021.
(b) Ram Ltd. purchased machinery for Rs. 80 lakhs (useful life 4 years and residual value Rs. 8
lakhs). Government grant received was Rs. 32 lakhs. The grant had to be refunded at the
beginning of third year. Show the Journal Entry to be passed at the time of refund of grant and
the value of the fixed assets in the third year and the amount of depreciation for remaining two
years, if the grant had been credited to Deferred Grant A/c.
(c) Mohan Ltd. has an existing freehold factory property, which it intends to knock down and
redevelop. During the redevelopment period the company will move its production facilities to
another (temporary) site.
The details of the incremental costs which will be incurred are: Setup costs of Rs. 5,00,000 to
install machinery in the new location; Rent of Rs. 15,00,000; Removal costs of Rs. 3,00,000 to
transport the machinery from the old location to the temporary location.
Mohan Ltd. wants to seek your guidance as whether these costs can be capitalized into the cost of
the new building. You are required to advise in line with AS 10 “Property, Plant and Equipment”.
(d) State whether the following statements are 'True' or 'False' in line with the provisions of AS 1.
Also give reason for your answer.
financial statements. They are usually specifically stated because their acceptance and use
are not assumed.
statements should form part of the financial statements.
ascertainable, wholly or in part, the fact need not to be indicated.
(v) There is no single list of accounting policies which are applicable to all circumstances.
(4 parts x 5 Marks = 20 Marks)

2. (a) A Ltd. purchased on 1 st April, 2020 8% convertible debenture in C Ltd. of face value of
Rs. 2,00,000 @ Rs. 108. On 1st July, 2020 A Ltd. purchased another Rs. 1,00,000 debentures
@ Rs. 112 cum interest. On 1st October, 2020 Rs. 80,000 debentures were sold @ Rs. 105. On
1st December, 2020, C Ltd. give option for conversion of 8% convertible debentures into equity
share of Rs. 10 each. A Ltd. received 5,000 equity shares in C Ltd. in conversion of 25%
debentures held on that date. The market price of debenture and equity share in C Ltd. on 31st
December, 2020 is Rs. 110 and Rs. 15 respectively. Interest on debenture is payable each year
on 31st March, and 30th September. Prepare investment account in the books of A Ltd. on
average cost basis for the accounting year ended 31 st December, 2020.
(b) A fire engulfed the premises of a business of M/s Preet on the morning of 1 st July 2020. The
building, equipment and stock were destroyed and the salvage recorded the following:
Building – Rs. 4,000; Equipment – Rs. 2,500; Stock – Rs. 20,000. The following other
information was obtained from the records saved for the period from 1 st January to 30th June
2020:
Rs.
Sales 11,50,000
Sales Returns 40,000
Purchases 9,50,000
Purchases Returns 12,500
Cartage inward 17,500
Wages 7,500
Stock in hand on 31st December, 2019 1,50,000
Building (value on 31st December, 2019) 3,75,000
Equipment (value on 31st December, 2019) 75,000
Depreciation provided till 31st December, 2019 on:
Building 1,25,000
Equipment 22,500
No depreciation has been provided after December 31 st 2019. The latest rate of depreciation is
5% p.a. on building and 15% p.a. on equipment by straight line method.
Normally business makes a profit of 25% on net sales. You are required to prepare the
statement of claim for submission to the Insurance Company.
(c) A acquired on 1st January, 2020 a machine under a Hire-Purchase agreement which provides for
5 half-yearly instalments of Rs. 6,000 each, the first instalment being due on 1st July, 2020.
Assuming that the applicable rate of interest is 10 per cent per annum, calculate the cash value
of the machine. All working should form part of the answer. (8 + 8 + 4 = 20 Marks)
3. (a) DM Delhi has a branch in London which is an integral foreign operation of DM. At the end of the
year 31st March, 2021, the branch furnishes the following trial balance in U.K. Pound:
Particulars £ £
Dr. Cr.
Fixed assets (Acquired on 1st April, 2017) 24,000
Stock as on 1st April, 2020 11,200
Goods from head Office 64,000
Expenses 4,800

Debtors 4,800
Creditors 3,200
Cash at bank 1,200
Head Office Account 22,800
Purchases 12,000
Sales 96,000
1,22,000 1,22,000
In head office books, the branch account stood as shown below:
London Branch A/c
Particulars Amount Particulars Amount
Rs. Rs.
To Balance b/d 20,10,000 By Bank A/c 52,16,000
To Goods sent to branch 49,26,000 By Balance c/d 17,20,000
69,36,000 69,36,000
The following further information is given:
(a) Fixed assets are to be depreciated @ 10% p.a. on WDV.
(b) On 31st March, 2021:
Expenses outstanding - £ 400
Prepaid expenses - £ 200
Closing stock - £ 8,000
(c) Rate of Exchange:
1st April, 2017 - Rs. 70 to £ 1
1st April, 2020 - Rs. 76 to £ 1
31st March, 2021 - Rs. 77 to £ 1
Average - Rs. 75 to £ 1
You are required to prepare: (1) Trial balance, incorporating adjustments of outstanding and
prepaid expenses, converting U.K. pound into Indian rupees; and (2) Trading and profit and loss
account for the year ended 31 st March, 2021 of London branch as would appear in the books of
Delhi head office of DM.
(b) The following is the Balance Sheet of Chirag as on 31 st March, 2020:
Liabilities Rs. Assets Rs.
Capital Account 48,000 Building 32,500
Loan 15,000 Furniture 5,000
Creditor 31,000 Motor car 9,000
Stock 20,000
Debtors 17,000
Cash in hand 2,000
Cash at bank 8,500
94,000 94,000

A riot occurred on the night of 31 st March, 2021 in which all books and records were lost. The
cashier had absconded with the available cash. He gives you the following information:
(a) His sales for the year ended 31st March, 2021 were 20% higher than the previous year’s
sales. He always sells his goods at cost plus 25%; 20% of the total sales for the year ended
31st March, 2021 were for cash. There were no cash purchases.
(b) On 1st April, 2020 the stock level was raised to Rs. 30,000 and stock was maintained at this
new level all throughout the year.
(c) Collection from debtors amounted to Rs. 1,40,000 of which Rs. 35,000 was received in
cash, Business expenses amounted to Rs. 20,000 of which Rs. 5,000 was outstanding on
31st March, 2021 and Rs. 6,000 was paid by cheques.
(d) Analysis of the Pass Book revealed the Payment to Creditors Rs. 1,37,500, Personal
Drawing Rs. 7,500, Cash deposited in Bank Rs. 71,500, and Cash withdrawn from Bank
Rs. 12,000.
(e) Gross profit as per last year’s audited accounts was Rs. 30,000.
(f) Provide depreciation on Building and Furniture at 5% and Motor Car at 20%.
(g) The amount defalcated by the cashier may be treated as recoverable from him.
You are required to prepare the Trading and Profit and Loss Account for the year ended 31 st
March, 2021 and Balance Sheet as on that date. (8 + 12 = 20 Marks)
4. (a) X Ltd has three departments A, B and C. From the particulars given below compute: (i) the
values of stock as on 31st Dec. 2020 and (ii) the departmental results showing actual amount of
gross profit.
A B C
Rs. Rs. Rs.
Stock (on 1.1. 2020) 24,000 36,000 12,000
Purchases 1,46,000 1,24,000 48,000
Actual sales 1,72,500 1,59,400 74,600
Gross Profit on normal selling price 20% 25% 33 1/3%
During the year ended 31st Dec. 2020, certain items were sold at discount and these discounts
were reflected in the value of sales shown above. The items sold at discount were:
A B C
Rs. Rs. Rs.
Sales at normal price 10,000 3,000 1,000
Sales at actual price 7,500 2,400 600
(b) Surya Limited (a listed company) recently made a public issue in respect of which the following
information is available:
(a) No. of partly convertible debentures issued- 2,00,000; face value and issue price- Rs. 100
per debenture.
(b) Convertible portion per debenture- 60%, date of conversion- on expiry of 6 months from the
date of closing of issue.
(c) Date of closure of subscription lists- 1.5.2020, date of allotment- 1.6.2020, rate of interest
on debenture- 15% payable from the date of allotment, value of equity share for the purpose
of conversion- Rs. 60 (Face Value Rs. 10).
(d) Underwriting Commission- 2%.
4

(e) No. of debentures applied for- 1,50,000.
(f) Interest payable on debentures half-yearly on 30th September and 31st March.
Write relevant journal entries for all transactions arising out of the above during the year ended
31st March, 2021 (including cash and bank entries).
(c) Manu Ltd. gives the following information as at 31 st March, 2021:
Rs.
Issued and Subscribed capital:
24,000 12% Preference shares of Rs. 10 each fully paid 2,40,000
2,70,000 Equity shares of Rs. 10 each, Rs. 8 paid up 21,60,000
Reserves and surplus:
Capital Redemption Reserve 1,20,000
Securities premium (collected in cash) 75,000
Profit and Loss Account 6,00,000
On 1st April, 2021, the Company has made final call @ Rs. 2 each on 2,70,000 equity shares.
The call money was received by 20 th April, 2021. Thereafter, the company decided to capitalize
its reserves by way of bonus at the rate of one share for every four shares held. You are required
to prepare necessary journal entries in the books of the company on 30th April, 2021 for these
transactions. (6 + 10 +4 = 20 Marks)
5. (a) You are required to prepare a Balance Sheet as at 31 st March 2020, as per Schedule III of the
Companies Act, 2013, from the following information of Mehar Ltd.:
Particulars Amount Particulars Amount
(Rs.) (Rs.)
Term Loans (Secured) 40,00,000 Investments (Non-current) 9,00,000
Trade payables 45,80,000 Profit for the year 32,00,000
Cash and Bank Balances 38,40,000 Trade receivables 49,00,000
Staff Advances 2,20,000 Miscellaneous Expenses 2,32,000
Other advances (given by Co.) 14,88,000 Loan from other parties 8,00,000
Provision for Taxation 10,20,000 Provision for Doubtful Debts 80,000
Securities Premium 19,00,000 Stores 16,00,000
Loose Tools 2,00,000 Finished Goods 30,00,000
General Reserve 62,00,000 Plant and Machinery (WDV) 2,14,00,000
Additional Information: -
1. Share Capital consists of-
(a) 1,20,000 Equity Shares of Rs. 100 each fully paid up.
(b) 40,000, 10% Redeemable Preference Shares of Rs. 100 each fully paid up.
2. Write off the amount of Miscellaneous Expenses in full, amounting Rs. 2,32,000.
(b) Sneha Ltd. was incorporated on 1 st July, 2019 to acquire a running business of Atul Sons with
effect from 1st April, 2019.

During the year 2019-20, the total sales were Rs. 24,00,000 of which Rs. 4,80,000 were for the
first six months. The Gross profit of the company for the year was Rs. 3,90,800. The expenses
charged to the Statement of Profit & Loss Account included the following:
(i) Director's fees Rs. 30,000
(ii) Bad debts Rs. 7,200
(iii) Advertising Rs. 24,000 (under a contract amounting to Rs. 2,000 per month)
(iv) Salaries and General Expenses Rs. 1,28,000
(v) Preliminary Expenses written off Rs. 10,000
(vi) Donation to a political party given by the company Rs. 10,000.
Prepare a statement showing pre-incorporation and post-incorporation profit for the year ended
31st March, 2020. (14+6=20 Marks)
6. (a) A company incorporated in June 2020, has setup a factory within a period of 8 months with
borrowed funds. The construction period of the assets had reduced drastically due to usage of
technical innovations by the company and the company is able to justify the reasons for the
same. Whether interest on borrowings for the period prior to the date of setting up the factory
should be capitalized although it has taken less than 12 months for the assets to get ready for
use. You are required to comment on the necessary treatment with reference to AS 16.
(b) XYZ Ltd. proposes to declare 10% dividend out of General Reserves due to inadequacy of profits
in the year ending 31-03-2020.
From the following particulars ascertain the amount that can be utilized from general reserves,
according to the Companies Rules, 2014: (Rs.)
8,00,000 Equity Shares of Rs. 10 each fully paid up 80,00,000
General Reserves 25,00,000
Revaluation Reserves 6,50,000
Net profit for the year 1,42,500
Average rate of dividend during the last five years has been 12%.
OR
X Ltd. (a non-investment company) provides the following information as on 31st March, 2020
was obtained:
Rs.
15,000, 14% preference shares of Rs. 100 each fully paid 15,00,000
1,20,000 Equity shares of Rs. 100 each, Rs. 80 paid-up 96,00,000
Capital reserves (Rs. 1,50,000 is revaluation reserve) 1,95,000
You are required to compute Effective Capital as per the provisions of Schedule V to the
Companies Act, 2013.

(c) Following is the cash flow abstract of Alpha Ltd. for the year ended 31 st March, 2021:
Cash Flow (Abstract)
Inflows Rs. Outflows Rs.
Opening cash and bank balance 80,000 Payment for Account Payables 90,000
Share capital – shares issued 5,00,000 Salaries and wages 25,000
Collection from Trade Payment of overheads 15,000
Receivables 3,50,000 Machinery acquired 4,00,000
Debentures redeemed 50,000
Sale of Machinery 70,000 Bank loan repaid 2,50,000
Tax paid 1,55,000
______ Closing cash and bank balance 15,000
10,00,000 10,00,000
Prepare Cash Flow Statement for the year ended 31 st March, 2021 in accordance with AS 3.
(d) Opening Balance Sheet of Mr. A is showing the aggregate value of assets, liabilities and equity
Rs. 8 lakh, Rs. 3 lakh and Rs. 5 lakh respectively. During accounting period, Mr. A has the
following transactions:
(1) Earned 10% dividend on 2,000 equity shares held of Rs. 100 each
(2) Paid Rs. 50,000 to creditors for settlement of Rs. 70,000
(3) Rent of the premises is outstanding Rs. 10,000
(4) Mr. A withdrew Rs. 9,000 for his personal use.
You are required to show the effect of above transactions on Balance Sheet in the form of Assets
- Liabilities = Equity after each transaction.

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Test Series: October, 2019

MOCK TEST PAPER – 1

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