Time Allowed : 90 Minutes SAMPLE Pay SAMPLE PAPER — 6 Maximum Marys, PART -1 Section - A Instructions : > From question number I t0 18, attempt any 15 questions. QL Q2. Q7. Interest on Partner's Loan will be recorded in (A) Pariner's Current Account (B) Partner's Capital Account (C) Partner's Loan Account (D) Profit & Loss Appropriation Accouny Which of the following is charge against profit? (A) Rent Payable to Partner (B) Interest on Partner's Loan (C) Salary Payable to Partner (D) Interest on Capital . Interest on Capital will be recorded (A) On the Credit side of Capital Accounts (B) On the Credit side of Profit & Loss Appropriation Account (C) On the Credit side of Current Accounts (D) On the Debit side of Current Accounts . During the year, 4 withdrew %5,000 per month in the beginning of every month, whereas B withdrew 215,000 per quarter at the end of every quarter. Interest on Drawings is charged @ 10% p.a. Interest on Drawings will amount to : (A) A 3,250 and B 2,750 (B) A 83,750 and B %2,250 (C) 4 3,250 and B 3,750 (D) 423,250 and B 22,250 . In the Balance Sheet of a Company, amount of Securities Premium Reserve will be : (A) Added to Issued Capital (B) Added to Subscribed and Full Paid Capital (C) Added to Subscribed but not Fully Paid Capital (D) Shown under Reserve and Surplus . Ifa share of 2100 issued at a premium of 220 on which full amount has been called and 780 (including premium) paid is forfeited, Share Capital Account will be debited with (A) % 60 (B) % 80 (©) Z100 (D) 120 A, Band C are partners in the ratio of 2:3 4. If C’s share of profit at the end of the year amounted to %3,60,000, what will be B's share of profits? (A) 23,20,000 (8) 71,60,000 (©) %2,70,000 (D) 21,80,000 Scanned with CamScannersanmLeP® “Os Q9 QB. ‘The formula for valuing goodwill under the Capitalisation of Super Profits method is : (A) Super profit made by the firm multiplied by the normal eet ti (B) Capital Employed by the firm multiplied by the normal rate of return © Capitalised profit of the firm divided by the rate ot fetid (D) Super profit made by the firm divided by the normal rate of return Which of the following is not a feature of a partnership firm : (A) Two oF more persons are carrying common business under an agreement. (B) They are sharing profits and losses in the fixed ratio. (C) Business is carried by all or any of them acting for all as an agent. (D) Limited liability i ). Shruti and Ridhi are partners in partnership firm without any agreement. Shruti has given a loan of 71,00,000 to the firm. At the end of year loss of 240,000 was incurred in the business. Following interest may be paid to Shruti by the firm : (A) @5% Per Annum (B) @ 6% Per Annum (C) @ 6% Per Month (D) As there is a loss in the business, interest can’t be paid |. X and Y are partners in the ratio of 3 : 2. Their capitals are %4,00,000 and %2,00,000 respectively. Interest on capitals is allowed @ 8% p.a. Firm earned a profit of €30,000 for the year ended 31st March 2019. As per partnership agreement, interest on capital is treated a charge on profits. Interest on Capital will be : (A) X %32,000; ¥ 716,000 (B) X 718,000; ¥ 712,000 (C) X %20,000; ¥ 710,000 (D) No Interest will be allowed A Ltd. forfeited 2,000 shares of % 10 each, %8 paid, for non-payment of final call of £2 per share. Out of these, 800 shares were re-issued as fully paid-up in such a way that ¥4,000 were transferred to capital reserve. Shares were re-issued for (A) %3 per share (B) 10 per share (C) 27 per share (D) %8 per share Ravi Ltd, issued a prospectus inviting applications for 2,00,000 shares of 210 each at a premium of 810 per share, payable as follows : On Application %5 (including &3 permium) On Allotment %6 (including %2 premium) On First Call 33 (including @1 premium) On Second & Final Call Balance Amount A shareholder holding 1,500 shares failed to pay the allotment, first call and second & final call money and his shares were forfeited after the final call. In the entry for forfeiture of shares, securities premium reserve account will be debited with: (A) %9,000 (B) 215,000 (©) %6,000 (D) 210,500 Scanned with CamScanner-- Se f interest on capital but there was.) > ¢ will the interest on cai ment 0 Q. 14. A partnership deed provides for the ey 016, At what rat instead of profits during the year 2019 a w (C) Bank Rate DEAE: Q. 15. Incase capitals are fixed, pick the odd one out for Gr a (A) Capital introduced (B) pee “iso (C) Withdrawal of Capital (D) None o! oe Q.16. Raghu Ltd, forfeited, 3,000 shares of 210 each, issued at _ a Ieee men of allotment money of ®5 per share (including premium) an mea teat 7 Are, The second and final call of %2 has not yet been called. Out o + 1,000 shares ery re-issued as fully paid up for 12 per share. Amount transferred to Capital Reserve will be : (A) 7,000 (B) 23,000 (C) %6,000 (D) %4,000 ? Q.17. Y Ltd. forfeited $00 shares of €100 cach (£75 called-up) issued at a premium of 5% oy Which &45 per share has been paid. Out of these 200 shares were re-issued 0 Z as 275 pai up for %60 per share. What is the amount to be transferred to Capital Reserve? (A) 719,500 (B) = 7,000 (C) ¥ 6,000 (D) 222,000 Q. 18. Which of the following is not shown under the heading ‘Share Capital’ in a Company's Balance Sheet : (A) Subscribed Capital (B) Forfeited Shares Account (C) Calls in Arrears (D) Calls in Advance PART - Section -B Instructions : > From question number 19 to 36, attempt any 15 questions. Q. 19. 4 and B were partners with capitals of %6,00,000 and %4,00,000 respectively. C was admitted for 1/5th share in profits. The journal entry recorded for premium for goodwill brought in by Cis given below : [ pan = oan ‘ [LY Dr c. | | ee ec [rein for Goodwill Aic Dr. 2,00,000 | | To A’s Capital Ave 1,20,000}, To B's Capital Ae $0,000 (Adjustment for premium for goodwill brought in by C) _] Scanned with CamScanner20: Q.23. Qu |. Cand D contribute ¥5,00,000 and &3,00,000 resp. ‘phe new profit sharing ratio will be + 9:10 Ww 2 ©. (B) 19:21 10 (D) 13.755 Pp, Qand R are partners sharing profits in the ratio of neral Reserve appeared in theit books at £180,000, They decided to share future profits in the ratio of 2:32 5 Partners do not want to distribute the general reserve, In the Journal entr (A) Cr. Py £90,000; O by 54,000 and R by €36,000 : (B) Cr. P by £36,000; O by %54,000 and R by 90,000 (©) Dr. R by ¥54,000 and Cr. P by 854,000 (D) Cr. R by £54,000 and Dr, P by 854,000 tively in-a parintership firm by w pat. Theit profit or loss sharing ratio is api : | on Which they agree to allow interest @ 69 3. The profit at the end of the year was %16,000 before allowing interest on capital. If there is a clear agreement that interest on capital will be paid even in case of loss, then D's share will be : (A) Profit 10,000 (B) Profit 36,000 (©) Loss 19,200 (D) Loss $12,800 , According to ‘*Super Profit Method"’, goodwill is calculated by : (A) Number of Years’ Purchase x Average Protit (B) Number of Years’ Purchase x Super Profit (C) Super Profit + Normal Profit (D)_ Super Profit + Normal Rate of Return X' Ltd. invited applications for issuing 50,000 equity shares of £10 each at a premium of, 8 per share. The amount was payable as follows : On Application 2 4 per share (including ¥2 premium) On Allotment + &6 per share (including €3 premium) On First and Final Call: Balance Amount Akash, a shareholder holding 500 shares, did not pay the allotment money and Gaurav, a holder of 800 shares, paid his entire share money alongwith the allotment money. On Allotment, Bank Account will be debited with (A) %3,04,900 (B) %3,03,400 (C) %3,08,200 (D) %3,09,700 Modem Ltd, invited applications for issuing 5,00,000 shares of €10 each at par, The amount was payable as follows : On Application : 3 On Allotment ; 4 On First and Final Call: 3 Applications were received for 6,00,000 shares and pro-rata allotment was made to all the Scanned with CamScannerreceived except first and fj - applicants. All Calls were made and were duly reccived excep! nal caly from Siya who was alloted 1,000 shares. Her shares were forfeited. Amount Credited to Share Forfeiture Account will be : (A) 27,600 (B) %6,400 (C) 37,000 (D) %8,400 : X Ltd. forfeited 5,000 shares of %10 each issued at a premium of %6 Per share ie non-payment of final cal of €5 per share (neluding premium 2). OF the forfeited gan” 4,000 were reissued at a discount of 20% as fully paid up. Amount Credited to Capital Reserve will be = (A) 312,000 (B) 44,000 (C) 236,000 (D) %20,000 Revaluation Account or Profit and Loss Adjustment A/c is a (A) Real Account (B) Personal Account (C) Nominal Account (D) Real as well as Personal Account - On 31st March, 2021, the balances in the Capital Accounts of Aditi and Chanda after making adjustments for profits and drawings were %4,00,000 and €2,50,000 Tespectively Subsequently, it was discovered that the interest on capital had been omitted, The profit for the year ended on 31st March, 2021 was @1,50,000. During the year, Aditi and Chanda each withdrew 25,000 per month, Interest on capital was to be allowed @ 10% per annum The profit-sharing ratio of partners was 2 : 1. Interest on Capitals will be : (A) Aditi %44,000 and Chanda %24,000 (B) Aditi 224,000 and Chanda 214,000 (C) Aditi 840,000 and Chanda %25,000 (D) Aditi £36,000 and Chanda %26,000 . Value of goodwill of a firm at 3 times of super profits is %54,000. Average profits of the firm are 60,000 (after an abnormal loss of %8,000). Normal rate of return is 10%, Capital invested in the firm will be : (A) %3,40,000 (B) %5,00,000 (C) %4,20,000 (D) ¥8,60,000 . A and B are partners in a firm with Capitals of %5,00,000 and %2,00,000 respectively. They share profits in the ratio of 2 : 1. C is admitted as a Partner. 4 and B surrender 4 of their respective share in favour of C. C is to bring his share of premium for goodwill in cash, The goodwill of the firm is estimated at 760,000, B’s Capital Account will show a balance of (A) %2,15,000 (B) %2,10,000 (C) %2,30,000 (D) %2,20,000 Scanned with CamScannerQi Q.32. Q33, gurya Ltd. invited applications for issuing 3,00, + vas payable as follows : ,000 shares of 210 each at p: ‘as pay : wes PY On Application e On Allotment se st and Final Call Applications were received for 4,00,000 shares and pro-rata allotment was made to all the applicants. All calls Were made and were duly received except first and final call from Kamal who applied for 2,000 shares. His shares were forfeited Amount Credited to Share Forfeiture Account will be : (a) ©16,000 (B) 313,500 (©) @12,000 (D) 210,500 Vivek Ltd. invited applications for issuing 4,00,000 equity shares of 210 each at a premium of £20 per share. The amount was payable as follows : On Applications On Allotment On First Call On Second and Final Call + 85 per share (including %2 premium) : 86 per share (including 74 premium) 2&9 per share (including 27 premium) : Balance Amount A shareholder holding 1,000 shares did not pay the first call and second and final call money and his shares were forfeited after the final call. Share Forfeiture Account will be Credited by : (A) 211,000 (B) 219,000 (C) & 5,000 (D) = 7,000 Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R) : Assertion (A) Amount of securities premium can be returned to equity shareholders in cash. Reason (R) Securities premium is usually charged when market price of the shares is more than their face value. In the context of the above two statements, which of the following is correct? Codes : (A) Both (A) and (R) are correct and (R) is the correct reason of (A). (B) Both (A) and (R) are correct but (R) is not the correct reason of (A). (C) Only (R) is correct. (D) Both (A) and (R) are wrong. Z Limited issued 20,000 shares of €100 each. The due amount was ree! except for 500 shares on which 275 per share was received. These 500 shares were forfeited and 300 shares were reissued for €60 each fully paid-up. Scanned with CamScannerQs. SAMPLE Pappy ws or rns PAPER © Balance in Forfeited Shares Account will be : (A) &15,000 (B) 37,500 (©) & (D) %10,500 en below are two statements, one labelled as Assertion (A) and the other labelled 4, Reason (R) : Sacrifice Ratio = Old Ratio — New Ratio Reason (R) The ratio in which the old partners surrender their share of profit is led sacrificing ratio, In the context of the above two statements, which of the following is correct? Codes : (A) Both (A) and (R) are correct and (R) is the correct reason of (A). (B) Both (A) and (R) are correct but (R) is not the correct reason of (A). (C) Only (R) is correct. (D) Both (A) and (R) are wrong. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R) : Assertion (A) Partnership firm has no separate legal entity. Reason (R) Registration of partnership firm is optional and not compulsory. In the context of the above two statements, which of the following is correct? Codes : (A) Both (A) and (R) are true, but (R) is not the correct explanation of (A). (B) Both (A) and (R) are true and (R) is the correct explanation of (A). (C) Both (A) and (R) are false. (D) (A) is false, but (R) is true. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R) : Assertion (A) Liability ofa partner in the partnership firm is limited. Reason (R) Personal assets of a partner cannot be utilized to pay off the debts of the firm In the context of the above two statements, which of the following is correct? Codes : (A) Both (A) and (R) are correct and (R) is the correct reason of (A). Scanned with CamScannercant (B) Both (A) and (R) are correct but (Ry) is not the ; (6) Only Ris caren. he correct reason of (A). (D) Both (A) and (R) are wrong, PART -1 Section —C Instructions = = From question number 37 to 41, attempt any 4 questions. Q.37. Radhey Ltd. offered 4,40,000 equity shares of 210 each to the public at a premium of 22 per share. The amount per share was payable as %3 on application; %5 (including premium) on allotment; and the balance on first and final call. 4,00,000 shares were subscribed by the public. All calls were made. A shareholder holding 2,000 shares failed to pay the first and final call money. His share were forfeited. Subscribed and Fully Paid Capital will be : (A) %39,80,000 (B) 247,76,000 (C) %39,92,000 (D) 247,88,000 Q.38. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R) : Assertion (A) Dividend cannot be paid on calls in advance. Reason (R) Preference Shareholders get interest at a fixed rate. In the context of the above two statements, which of the following is correct? Codes (A) (A) and (R) both are correct and (R) correctly explains (A). (B) Both (A) and (R) are correct but (R) does not explain (A). (C) Both (A) and (R) are incorrect. (D) (A) is correct but (R) is incorrect. Case Based MCQs A, B and C are in partnership. On Ist April, 2020 their capitals were : A %10,00,000 (Credit), B %6,00,000 (Credit) and C %1,00,000 (Debit). As per partnership deed interest on capital is to be allowed @ 8% pa. and interest on drawings is to be charged @ 10% p.a. ‘You find that : o (i) On Ist January, 2021, 4 withdrew 71,50,000 against Capital; (ii) B withdrew %10,000 p.m. during the year. (iii) C withdrew 21,20,000 during the year. Scanned with CamScanner%5,63,000 21 amounted t© March, 2021 amo questions : s will amount {0 : (B) ) 50 00 ae @ a (© Nil 3, |. Interest on 4’s Capital will amount to: (A) 80,000 (©) %68,000 *h Partn (A) %1,30,000 (©) %1,49,000 (B) &77,000 (p) 274,000 share of profit will be : (B) 71,351,250 PART - Il a Analysis of Financial Statements Section -A Instructions : > From question number 42 to 48, attempt any 5 questions. Q. 42. While preparing the Balance Sheet of a Company which of the following is shown under “Long term Borrowings’. (A) 6% Debentures (B) Premium Payable on Redemption of Debentures (C) Provision for Eamed Leave (D) Debenture Redemption Reserve Q. 43. Which of the following is not a limitation of analysis of financial statements : (A) Lack of qualitative analysis (B) Investment Decisions (©) Price level changes ignored (D) Window dressing Q. 44. While calculating Current Ratio, Current Assets do not include : (A) Loose Tools (B) Patents (C) Computer Software (D) All of these Q.45. If Debt-Equity Ratio is 1.8 : 1, what will be the effect of the following : (i)|Sale of Fixed Asset (Book value] (a)| Increase %2,00,000) at a loss of 710,000 | 1 | (i |Redemption of Debentures for cash | (b)| Decrease | | (iiiy| Purchase of a fixed asset by taking a] (c)|No change | long-term Joan 7 Scanned with CamScannerspoose the Correct Option : “ ao W@ (iii) (ce) ® @j@ Gd) (iii) (b) © a@ GC) (iif) (a) » HO MO (ia Match the Following : a {]Debentures redeemable after two] (@|Long term provision years (i| Debentures redeemable within one] (6)|Short term provision year Git)| Provision for Provident Fund (©| Other current liability (j) [Outstanding Salary (@ [Long term borrowings Choose the Correct Option : (A) @@ Gi) (ii) @) (©) (B) MO) GA) (iii) (d) (iv) (0) OVM™M WO (i)@ WO OvV@™ WO (iii) (6) (iv) (6) Q.47. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R) : Assertion (A) Purchase of a fixed asset on long-term deferred basis will increase the Debt Equity Ratio. Reason (R) Buy-back of its own shares by a Company will decrease the Proprietary’s Ratio. In the context of the above two statements, which of the following is correct? Codes : (A) Both (A) and (R) are correct and (R) is the correct reason of (A). (B) Both (A) and (R) are correct but (R) is not the correct reason of (A). (C) Only (R) is correct. (D) Both (A) and (R) are wrong. Q.48, Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R) : Assertion (A) Reason (R) Purchase of goods for cash will not affect the Operating Ratio, In the context of the above two statements, which of the following is correct? Scanned with CamScannerCoutes * (A) Both (A) and (R) are true, but (R) isnot the correct Sees (B) Both (A) and (R) are true and (R) is the correct explanation of (A). (C) Both (A) and (R) are false. (D) (A)is false, but (R) is true, PART - Il Section -B Instructions : > From question number 49 to 55, attempt any 6 questions. Q.49, Q. 50. What will be the Current Ratio from the following : Liquid Assets %1,00,000; Inventory 90,000 (including loose tools %15,000); Prepaig Expenses %5,000; Working Capital €1,20,000. (A) 15:1 (B) 3.25:1 (C) 3:1 (D) 1.625: 1 A Company's Liquid Assets are %6,00,000, Inventory is %1,50,000 and its Current Liabilities are %4,00,000, Subsequently, it purchased goods for %1,00,000 on credit, Quick Ratio will be (A) 15:1 (B) 1.2:1 (©) 14:1 (D) 17:1 | Pasticalars se Ee Revenue from Operations 5,00,000 Cost of Revenue from Operations 3,10,000), Otfice Expenses 40,000) Selling Expenses 30,000 Loss by Fire 20,000) Operating Profit Ratio will be : (A) 20% (B) 30% (C) 24% (D) 38% iz z - 16,00,000 | 8,00,000 | General Resere 4,00,000 | Profit & Loss Balance (2,00,000)| Proprietary Ratio 08:1 Scanned with CamScanner| Current ratio of Cadila Ltd, is 2.4: Total Assets will be : (A) €19,20,000 Arch (©) €35,00,000 ee 1, Accountant wants to maintain it at 2 : 1. Following options are available (i He can repay the creditors (ii). He can purchase goods on credit (ii) He can take short term loan from the bank Choose the correct option, (A) Only (0 is correct (B) Only (ii) is correct (C) Only (@ and (iti) are correet (D) Only (i and (iii) are correct . Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R) : Assertion (A) ‘A minor cannot be admitted as a partner. Reason (R) A minor can participate in the profits of the firm. In the context of the above two statements, which of the following is correct? Codes : (A) Both (A) and (R) are true, but (R) is not the correct explanation of (A). (B) Both (A) and (R) are true and (R) is the correct explanation of (A). (©) Both (A) and (R) are false. (D) (A) is false, but (R) is true. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R) : Assertion (A) If there are five partners in a firm, a new partner cannot be admitted even if one partner does not agree to this. Reason (R) In case of change in profit sharing ratio goodwill is adjusted in sacrificing and gaining ratio, In the context of the above two statements, which of the following is correct? Codes : (A) (A) and (R) both are correct and (R) correctly explains (A). (B) Both (A) and (R) are correct but (R) does not explain (A). (C) Both (A) and (R) are incorrect. (D) (A) is correct but (R) is incorrect. Scanned with CamScanner