ACCOUNTS FULL-5 100 MARKS

SECTION: A
1. Under which method the interest on capital keeps on changing during the year due to change in
the capital?
a) Fluctuating capital account method c) current account method
b) Fixed capital account method d) competition
2. Which method is appropriate for the computation of goodwill when every year profit is
increasing?
a) Simple average c) annual growth rate
b) Weighted average d) compound growth rate
3. In which ratio profit/loss of revaluation account is distributed between the partners?
a) Sacrifice ratio b) gain ratio c) new P/L ratio d) old P/L ratio
4. Revaluation account is ___ type of account.
a) Personal b) nominal c) real d) temporary
5. When new partner brings in his share of goodwill in cash___ account is credited.
a) Cash b) premium of goodwill c) goodwill d) capital a/c
6. When only old profit/loss ratio is given, gaining ratio of remaining partners will be ___.
a) 1:1 b) old ratio c) capital ratio d) cannot be calculated
7. How many methods are there for dissolution of a partnership firm?
a) One b) Three c) Two d) Four
8. At what minimum price per share company can issue share according to current provision of
company act?
a) ₹100 b) ₹1000 c) ₹1 d) ₹0.50
9. As per SEBI guidelines, the minimum amount on each share called by company application must
be at least ___ % of the issue price.
a) 25 b) 30 c) 5 d) 20
10. The amount of premium received on issuing debentures at premium is ___
a) Revenue profit c) Revenue loss
b) Capital loss d) Capital profit
11. How many assets are analyzed in the financial statement analysis?
a) 1 b) 2 c) 3 d) 4
12. For which of the following items the ratio is computed in days?
a) For total purchase c) For credit purchase
b) For credit sales d) both (b) and (c)
13. To arrive at liquid assets which of the following is deducted from current assets?
a) Stock c) Debtors
b) Cash and cash equivalent d) Bill’s receivable
14. There are __ types of cash flow.
a) Two b) One c) Three d) Four
15. Cash deposited in bank is _____.
a) Cash outflow of operating activity C) Cash outflow of investing activity
b) Cash outflow of financing activity d) not cash flow
SECTION: B
16. What is the maximum and minimum limit of partners to constitute a partnership firm?
17. What is capitalized profit?
18. What is weighted average profit?
19. How is consolidated profit distributed?
20. Explain with reasons the accounting treatment of reserves and accumulated profit and loss appearing in
the books of the firm at the time of the admission of a new partner.
21. When and why the profit and loss adjustment account is prepared.
22. How would you deal with bad debt return, which is written off earlier?
23. Explain the meaning of realisation account.
24. What is share and share capital?
25. What is meant by debenture discount?
26. Describe the types of financial analysis on the basis of time.
27. What is cost of goods sold.
28. What is ratio?
29. What is operating activity.
30. What is cash and cash equivalent?
SECTION: C (any 4)
31. The closing capital of Raghuveer is Rs. 80,000. In which Rs. 12,500 drawings of current year and profit of
Rs. 17,800 are recorded. What will be the interest at 6% p.a. on the opening capital?
32. Mehta receives his share for time of Pandya, while Bajpai receives his share half of share of Mehta.
Profit of the firm at the end of the year is Rs. 87,500. Determine the share in profit of each partner.
33. Raju, Hasu and Sanju are the partners of a partnership firm. Their profit/loss sharing ratio is 5:4:3. All
the partners have decided to change their profit/loss sharing ratio to 2:2:1. From this information find out
gain ratio.
34. Pass journal entries for the following transactions at the time of dissolution:
1) At the time of dissolution, the book value of goodwill is Rs. 56,000. No amount is realised.
2) The value of laptop is Rs. 35,000. One partner has taken it for Rs. 25,000.
3) Total assets of the firm are Rs. 2,00,000 out of which 40% are current assets (including cash of Rs.
10,000.) book value is realised.
35. How would you deal with the following balances disclosed in the balance sheet at the time of
dissolution of a partnership firm? Explain.
a) Provident fund
b) Debit balance of profit/loss account.
c) Workmen accident compensation fund
36. Punjab limited issued 25,000, 11% debentures of Rs. 100 each, the money per debenture was payable
as under.
Rs. 30 application; Rs 35 allotment; and Rs 35 on first and final call.
All the debentures were applied. Joginder, the holder of 800 debentures paid the entire amount on his
holding on allotment. When, Harjitsinh, the holder of 200 debentures failed to pay the allotment and call
amount.
All the amount on allotment and call were duly received on all remaining debentures.
Pass necessary journal entries for the above transactions in the books of company.
SECTION: D (any 3)
37. Rajesh and Harish are partners of a partnership firm. On the basis of their partnership firm’s profit and
other information, determine the value of goodwill on the basis of two years purchase of super profit.
1) Capital employed: Rs. 8,00,000
2) Expected rate of return: 12%
3) Previous year’s profit:
YEAR PROFIT
(Rs)
2014-15 1,20,000
2015-16 90,000
2016-17 1,50,000

38. Pushpa, Pratibha and Bhavna are partners of a partnership firm. They decided to change their profit-loss
sharing ratio from 3:2:1 to 1:1:1. Therefore they decided to make the valuation of goodwill. On the basis of
partnership firm’s profit and other information, determine the value of goodwill on the basis of three years
purchase of super profit.
1) Assets: Rs. 6,00,000 2) Liabilities: Rs. 2,50,000 3) ERR: 10%
4) Actual profit:
YEAR PROFIT
(Rs)
2014-15 80,000
2015-16 70,000
2016-17 90,000
39. Profit and loss statement for the year ending on 31-3-2016 and 31-3-2017 of company are as follow.
From the following information prepare comparative profit and loss statement.
Particular Note no. 31-3-2017 (Rs.) 31-3-2016 (Rs.)
Sales revenue - 45,00,000 52,00,000
Other income - 2.00.000 10,00,000
Net Purchase - 32,00,000 38,00,000
Other expenses (% of sales) - 22% 18%
Change in Stock (2,00,000) (1,00,000)
 Income tax rate 30% 30%
40. From the following information of ‘C’ company Ltd., calculate creditors turnover and payment period in
days. What will be answer if payment period is calculated in terms of weeks and months? (assume 360 days
of the year)
PARTICULARS AMOUNT
Opening balances:
Creditors 45,000
Bill’s payables 15,000
Bill’s receivables 30,000
Debtors 30,000
Closing balances:
Creditors 40,0000
Bill’s payables 20,000
Bill’s receivables 40,000
Debtors 20,000
Balances:
Credit sales 6,00,000
Cash sales 4,00,000
Total sales 10,00,000
Total purchase 6,00,000
Cash purchase 2,40,000
41. From the following details of Brijmohan Ltd., prepare statement showing cash flow from investing
activities:
PARTICULARS 31-3-2017(RS) 31-3-2016(RS)
Investment in 12% debentures of X co. 6,00,000 4,00,000
Machines 4,00,000 2,00,000
Land-building 6,00,000 6,00,000
Furniture 1,00,000 80,000
Patent 80,000 1,00,000
Goodwill 60,000 90,0000
Additional information:
(1) Provide 20% depreciation on machines.
(2) Provide 10% depreciation on furniture.
(3) In the beginning of the year, 40% investments sold for Rs 3,00,000.
(4) Interest received on investments Rs 60,000.
SECTION: E (any 3)
42. A and B are partners in a firm sharing profit and loss in the ratio of 4:1. Balance sheet of their firm on
31-3-2017 was as under:
Balance sheet
 LIABILITIES AMOUNT(RS) ASSETS AMOUNT(RS)
Capital accounts Land-building 35,000
A 75,000
B 25,000 1,00,000
Current accounts Furniture 30,000
A 8000
B 2000 10,000
Workmen accident compensation fund 5000 Investment 25,000
Creditors 4000 Stock 15,000
Bills payable 1000 Debtors 5500
(-) bad debt reserve 500 5000
Bill’s receivable 2000
Cash-bank 3000
Goodwill 5000
1,20,000 1,20,000
They admitted C as a new partner on above date on the following conditions. They decided to keep their
new profit-loss sharing ratio at 3:1:1.
1
1) C will bring Rs 20,000 as capital for his 5 𝑡ℎ share of profit and Rs 500 as his share of goodwill in cash.
Out of goodwill half amount is to be withdrawn by old partners.
2) Value of land and building is to be increased by 10%. While value of furniture and stock is to be
decreased by 5%.
3) Market value of investment is Rs 35,000, which is to be shown in the books.
4) Provision for doubtful debt is to be made at 10% on debtors.
5) Workmen accident compensation claim is accepted Rs 1000.
6) Dishonor expense of bills receivables Rs 150 and bank charges Rs 300 which are paid but not recorded
in the books.
Prepare necessary accounts and balance sheet after admission of partners.
43. Moon, Star and sun are the partners of a firm. Sun retires on 31-3-2017. Moon and Star will distribute
future profit and loss in the ratio of 5:1. Balance sheet of their firm on 31-3-2017 was a s under:
Balance sheet
LIABILITIES AMOUNT(RS) ASSETS AMOUNT(RS)
Capital accounts Building 2,40,000
Moon 1,60,000
Star 2,00,000
Sun 1,80,000 5,40,000
general reserve 90,000 Machinery 1,30,000
Creditors 60,000 Furniture 80,000
Bills payable 10,000 Stock 45,000
Debtors 30,000
 Bank 1,75,000
7,00,000 7,00,000
Conditions of retirement were as under:
1) Goodwill of the firm is valued at Rs 60,000.
2) Creditors are payable after one month, which are to be paid immediately at 12% discount per annum.
3) Computer, written off from the books is now valued at Rs 12,000. Moon will take over the computer at
this value.
4) After retirement of Sun, Moon and Star will maintain their capital in the new profit and loss sharing
ratio and difference is to be transferred to bank account.
Prepare necessary accounts and balance sheet after retirement.
44. Deep, Jyoti and Geeta are the partners sharing profit-loss in the ratio of their capitals. Balance sheet of
their firm as 31-3-2017 was as under.
Balance sheet
LIABILITIES AMOUNT(RS) ASSETS AMOUNT(RS)
Capital accounts Goodwill 14,000
Deep 1,00,000
Jyoti 1,50,000
Geeta 1,00,000 3,50,000
General reserve 28,000 Land-building 2,90,000
Creditors 60,000 Trademark 60,000
Provident fund 32,000 Stock 50,000
Debtors 40,000
(-) bad debt reserve 6000 34,000
Bank 22,000
4,70,000 4,70,000
Jyoti retired on the above date. Partners decided that,
1) New profit and loss sharing ratio of Deep and Geeta is to be kept at 1:1. Goodwill of the firm valued at
Rs 70,000.
2) Bad debt reserve on debtors is to be reduced up to 10%.
3) Stock is shown in the books at 25% more than its cost, stock to be recorded at cost.
4) Rs.60,000 is paid for trademark during current year, which is for total 6 years.
5) Liability of provident fund is decided at Rs 35,000.
6) Total capital of the new firm is to be kept as the total capital of the old firm. Deep and Geeta will
maintain this capital in their new profit-loss sharing ratio. For this purpose, the difference is to be transferred
to their current accounts.
Prepare necessary accounts and balance sheet after retirement.
45. Siddhapur Isabgul Limited issued 6,00,000 equity shares of Rs 10 each at premium of Rs 7 per share.
The amount was payable as under:
Rs 10 per share on application (including premium)
Rs 4 per share on allotment
Rs 3 per share on final call
Applications were received for 9,00,000 shares. Excess applications were rejected and money paid thereon
was refunded.
Siddharaj, who was allotted 6000 shares, did not pay money due on allotment and hence his shares were
forfeited after allotment. Jaysinh, who was allotted 4000 shares, did not pay money due on final call and
hence his shares were forfeited after final call. Allotment and final call amount were received on remaining
shares.
Company reissued 6000 shares of Siddharaj at Rs 7 per share to Minal and 400 shares of Jaysinh at Rs 6 per
share to Rudra.
Pass necessary journal entries in the books of company to record above transactions and also prepare shares
forfeiture account.

46. Dipak limited issued 5,00,000 equity shares of Rs 10 each at a premium of Rs 25 per share. Amount
payable on share was as under.
On application Rs 13 per share (including premium Rs 10)
On allotment Rs 17 per share (including premium Rs 15)
On first call Rs 2 per share
On final call Rs 3 per share
Applications were received for total 5,80,000 shares. Excess applications were rejected and amount paid
thereon was refunded.
Anup, who was allotted 4000 shares, could not pay allotment money hence shares were forfeited after
allotment.
Purvi, who was allotted 3000 shares, could not pay first call money and hence her shares were forfeited after
first call.
Amount due on final call on remaining shares was received in full.
Pass necessary journal entries in books of company for recording above transactions.
SECTION: F
47. Shiv and Shankar are partners of a firm sharing profit-loss in the equal proportion. From the following
trial balance as on dated 31-3-2017 and adjustments prepare final accounts of the firm.
Trial balance of partnership firm of Shiv and Shankar as on 31-3-2017
PARTICULARS DEBIT(RS) CREDIT(RS)
Capital and drawings
Shiv 10,000 1,00,000
Shankar 20,000 1,20,000
opening stock 60,000
Purchase and sales 61,000 80,000
Custom duty 20,000
Weighing machine charges/ Tolai 1000
 Provident fund and contribution to provident fund 1000 4000
Dead stock 22,000
Salary-wages 12,000
Loan of Shiv (from 1-7-2016) 20,000
Mahajan Lago 2000
Factory building 1,00,000
Depreciation on factory building 10,000
Insurance premium 1200
Prepaid insurance 600
Demurrage 200
Cash and bank 6000 18,000
Bills 30,000 14,000
Customers and traders 20,000 16,000
Professional tax 1000
Outstanding salary 1400
Bad debt and bad debt reserve 1400 6000
TOTAL 3,79,400 3,79,400
ADJUSTMENTS:
1) The value of closing stock is Rs 40,000, but market value is 20% less than book value.
2) Goods were received of Rs 1000, but invoice is not recorded in the purchase book.
3) 10% interest is payable on capital and 5% interest is chargeable on drawings.
4) Provide bad debts reserve of Rs 3000 and keep 10% discount reserve on debtors.
5) Shiv has withdrawn goods of Rs 1000 and Shankar has withdrawn goods of Rs 200 for personal use
recorded in sales books as credit sales.
6) As per partnership deed, interest on capital is payable, even if there is loss.

48. Following is the balance sheet of Keyur Ltd. As on 31-3-2017:

PARTICULARS DEBIT(RS) CREDIT(RS)
Equity share capital 2,40,000
Office and sales expenses 24,000
Purchase 4,26,000
10% debentures 1,20,000
Sales 9,60,000
Software 1,20,000
Wages 24,000
Debenture interest 12,000
Salary 3,00,000
Bank overdraft 14,400
Land-building 2,28,000
 Opening stock 36,000
Discount received 15,600
Debtors 1,80,000
TOTAL 13,50,000 13,50,000
Other information: -
(1) Closing stock Rs 42,000.
(2) Make provision for tax at 50% of net profit.
From the above information, prepare final accounts of the company for the year ending on 31st March 2017
as per schedule -3 and Companies Act 2013. Notes to the accounts are not required.