Answers to Sample Paper 6

1. (a) (A) is correct but (R) is wrong.

2. (d) Only Statements (ii) and (iii) are correct.
3. (c) ` 6,00,000 [` 20,00,000 – ` 14,00,000]
Or
(b) Shibu ` 24,400 ; Bishu ` 17,200

110
4. (d) ` 1,65,000 =` 15, 000 × G
10
Or
(c) Dr. Jyoti’s Capital A/c and Cr. Tapan’s Capital A/c by ` 700.

5. (b) 9% p.a.
6. (b) ` 250
Or
(c) ` 6,00,000 from Statement of Profit & Loss

7. (b) 11:7:6
8. (c) Profit and Loss Suspense A/c
Or
(b) Realisation A/c
Dr. 90,000
To Bank A/c 90,000
9. (a) ` 2,100
10. (b) Credited with ` 1,600
11. (b) ` 15,000

  12.   (b) Date Particulars L.F. Dr. (`) Cr. (`)

Securities Premium A/c Dr. 3,40,000

Statement of Profit & Loss Dr. 7,00,000
To Loss on Issue of Debentures A/c 10,40,000

13. (c) ` 2,50,000

14. (b) Dr. Y’s Capital A/c and Cr. X’s Capital A/c by ` 18,000
15. (c) Credited to Capital Reserve Account
Or
(d) ` 30,000

16. (d) ` 90,000

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17. Journal
Date Particulars L.F. Dr. (`) Cr. (`)

(i) Stock A/c Dr. 8,000

Building A/c Dr. 20,000

Debtors A/c Dr. 12,000

Cash A/c (Bal. Fig.) Dr. 14,000

To Premium for Goodwill A/c 4,000

To Mahesh’s Capital A/c 50,000

(Being Mahesh admitted as a new partner and

brought assets and cash)

(ii) Premium for Goodwill A/c Dr. 4,000

To Mayank’s Capital A/c 2,000

To Manik Capital A/c 2,000

(Being premium divided between sacrificing partners)

(iii) General Reserve A/c 16,000

To Mayank’s Capital A/c 8,000

To Manik’s Capital A/c 8,000

(Being general reserve divided between old partners)

18. Journal
Date Particulars L.F. Dr. (`) Cr. (`)

(i) Incorporation Expenses A/c Dr. 2,00,000

To Promotors’ A/c 2,00,000

(Being amount due to promotors)

(ii) Promotors’ A/c Dr. 2,00,000

To Share Capital A/c 2,00,000

(Being issue of 2,000 shares of ` 100 each)

(iii) Underwriting Commission A/c Dr. 3,00,000

To underwriters’ A/c 3,00,000

(Being amount due to underwriters)

(iv) Underwriters’ A/c Dr. 3,00,000

To Share Capital A/c 3,00,000

(Being issue of 3000 shares of ` 100 each )

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 Or
Journal

Date Particulars L.F. Dr. (`) Cr. (`)

Land A/c Dr. 12,00,000

Plant A/c Dr. 7,40,000
Stock A/c Dr. 6,00,000
Furniture A/c Dr. 4,60,000
To Capital Reserve A/c 3,30,000
To Bills Payable A/c 6,70,000
To TP Ltd. 20,00,000
(Being purchase of assets and liabilities from
TP Ltd.)

TP Ltd. Dr. 20,00,000

To Bank A/c 4,00,000
To Bills Payable A/c 5,00,000
To Equity Share Capital A/c 10,00,000
To Securities Premium A/c 1,00,000
(Being consideration paid by bank draft, bill of
exchange and by issuing 10,000 equity shares of
` 100 each issued at premium of ` 10 each)

Journal
19. Date Particulars L.F. Dr. (`) Cr. (`)
Astha’s Capital A/c Dr. 2,950
Asha’s Capital A/c Dr. 16,450
To Atharva’s Capital A/c 19,400
(Being interest on capital and drawings omitted,
now adjusted)

Working Note:
Statements showing Adjustments
Particulars Atharva (`) Astha (`) Asha (`)

Interest on Capital 9,600 7,200 6,400

Salary — — 7,200
Interest on Drawings (350) (250) (100)
Net Divisible Profit
(` 1,50,000 + ` 700 – ` 23,200 – ` 7,200 = ` 1,20,300 in 3 : 2 : 1 60,150 40,100 20,050
Net amount to be received (Cr.) 69,400 Cr. 47,050 Cr. 33,550 Cr.
Amount already Received (Dr.) (1,50,000 in 3 : 2 : 1) 50,000 Dr. 50,000 Dr. 50,000 Dr.
19,900 Cr. 2,950 Dr. 16,450 Dr.

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 Or
Dr. Profit and Loss Appropriation A/c Cr.
Particulars Amount (`) Particulars Amount (`)
To Interest on Capital: By Profit and Loss A/c (Net Profit) 1,80,000
Ashish 7,200 By Interest on drawings
Ayush 5,600 Ashish 300
Piyush 4,800 17,600 Ayush 300
To Salary (Piyush) 12,000 Piyush 300 900
To Profit transferred to:
Ashish 60,520
Ayush 60,520
Piyush 30,260 1,51,300
1,80,900 1,80,900

20. Revaluation A/c

Particulars Amount (`) Particulars Amount (`)
To Plant 4,800 By Loss transferred to: (Bal. Fig.)
To Creditors 2,000 X 10,533
To Bad Debts 4,500 Y 5,267
To Furniture 4,500 15,800
15,800 15,800
Journal entry for loss:
X’s Capital A/c Dr. 10,533
Y’s Capital A/c Dr. 5,267
To Revaluation A/c 15,800
(Being loss on revaluation transferred to X and Y)
21. Balance Sheet
(Extract)
Particulars Note No. Amount (`)
LIABILITIES
1. Shareholders’ Fund
a. Share Capital 1 27,82,000

Note No. Particulars Amount (`)

1 Share Capital
Authorised Capital
50,000 Equity Shares @ ` 100 each 50,00,000
Issued Capital
40,000 Shares @ ` 100 each 40,00,000
Subscribed Capital
Subscribed but not fully paid up
40,000 Shares @ ` 100 each, ` 70 called up 28,00,000
Less: Calls in Arrears A/c 18,000 27,82,000

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22. Journal
Date Particulars L.F. Dr. (`) Cr. (`)
(i) Bank/Cash A/c Dr. 18,000
To Realisation A/c 18,000
(Being payment received from creditors for excess
amount)
(ii) Realisation A/c Dr. 33,000
To Bank/Cash A/c 33,000
(Being payment made to creditors)
(iii) No Entry Required
(iv) Bank/Cash A/c Dr. 18,000
To Realisation A/c 18,000
(Being cash received from Sumit, a partner for
unrecorded asset)

23. Journal of Hariom Ltd.

Date Particulars L.F. Dr. (`) Cr. (`)
(i) Bank A/c Dr. 3,60,000
To Equity Share Application A/c 3,60,000
(Being application money received on 72,000
shares @ ` 5)
(ii) Equity Share Application A/c Dr. 3,60,000
To Equity Share Capital A/c 1,20,000
To Securities Premium A/c 80,000
To Share Allotment A/c 1,00,000
To Bank A/c 60,000
(Being application money transferred to share
capital, securities premium, allotment and refunded)
(iii) Equity Share Allotment A/c Dr. 2,40,000
To Equity Share Capital A/c 1,60,000
To Securities Premium A/c 80,000
(Being share allotment money due)
(iv) Bank A/c Dr. 1,36,500
Calls-in-arrear A/c Dr. 3,500
To Equity Share Allotment A/c 1,40,000
(Being allotment money of ` 6 received except
on 1,000 shares)

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 (v) Equity Share Capital A/c Dr. 7,000
Securities Premium A/c Dr. 2,000
To Calls-in-arrears A/c 3,500
To Shares Forfeited A/c 5,500
(Being 1,000 shares were forfeited)
(vi) Equity Share First and Final Call A/c Dr. 1,17,000
To Equity Share Capital A/c 1,17,000
(Being first call @ ` 3 due on 39,000 shares)
(vii) Bank A/c Dr. 1,17,000
To Equity Share First and Final Call A/c 1,17,000
(Being first and final call money received on
39,000 shares )
(viii) Bank A/c Dr. 3,150
Shares Forfeited A/c Dr. 1,350
To Equity Share Capital A/c 4,500
(Being 450 shares reissued @ ` 7 per share as
fully paid up)
(ix) Shares Forfeited A/c Dr. 1,125
To Capital Reserve A/c 1,125
(Being gain on reissue of forfeited shares transferred
to capital reserve)

Working Notes:
60,000
(i) Number of shares applied by Romil = × 1,500 = 1,000 shares
40,000
`
Money paid by him on application (1,500 × ` 5) 7,500
Money adjusted on application (1,000 × ` 5) 5,000
Excess money 2,500
Amount due by him on allotment (1,000 × ` 6) 6,000
Less: Excess money adjusted 2,500
Money not paid by him on allotment 3,500

(ii) Amount transferred to Capital Reserve = c m – ` 1,350

` 5, 500
1, 000 × 450
= ` 2,475 – ` 1,350
= ` 1,125

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 Or
Journal of Adani Ltd.
Date Particulars L.F. Dr. (`) Cr. (`)
(i) Bank A/c Dr. 1,95,000 1,95,000
To Share Application A/c
(Being application money received on 6,500 shares
@ ` 30 each)
(ii) Shares Application A/c Dr. 1,95,000
To Share Capital A/c 1,20,000
To Share Allotment A/c (45,000 + 15,000) 60,000
To Bank A/c 15,000
(Being the application money on 4,000 shares
transferred to share capital and excess money was
adjusted to share allotment and balance refunded)
(iii) Share Allotment A/c Dr. 2,00,000
To Share Capital A/c 1,20,000
To Securities Premium A/c 80,000
(Being the allotment money due on 4,000 shares
@ ` 50 each including premium of ` 20 each)
(iv) Bank A/c Dr. 1,37,600
Calls in Arrears A/c Dr. 2400
To Share Allotment A/c 1,40,000
(Being allotment money received)
(v) Share First and Final Call A/c Dr. 1,60,000
To Share Capital A/c 1,60,000
(Being first and final call money due on 4,000
Shares @ ` 40 each)
(vi) Bank A/c Dr. 1,51,000
Calls in Arrears A/c Dr. 9,000
To Share First and Final Call A/c 1,60,000
(Being first and final call money received)
(vii) Share Capital A/c Dr. 22,500
Securities Premium A/c Dr. 1,500
To Calls in Arrears A/c 11,400
To Share Forfeiture A/c (3,600 + 9,000) 12,600
(Being 225 shares forfeited due to non-payment
of allotment and first and first call)

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 (viii) Bank A/c Dr. 9,000
Share Forfeiture A/c Dr. 1,000
To Share Capital A/c 10,000
(Being 100 shares reissued @ ` 90 each as fully
paid up)
(ix) Share Forfeiture A/c Dr. 3,725
To Capital Reserve A/c 3,725
(Being the balance of share forfeiture A/c
transferred to capital reserve)

Working Notes:
4,000
(i) Number of shares applied by Parul = × ` 75 = ` 120
2,500

`
Money paid on application (120 × ` 30) 3,600
Application money adjusted (75 × ` 30) 2,250
Excess money 1,350
Money due on allotment (75 × ` 50) 3,750

Less: Adjusted from excess money 1,350
Money not paid by Parul on allotment 2,400

(ii) Total Allotment money due 2,00,000

Less: Application money adjusted 60,000
Amount unpaid by Parul 2,400
Total amount received on Allotment 1,37,600

= c m+c m – ` 1,000
` 3, 600 ` 9, 000
(iii) Amount transferred to Capital Reserve
75 × 75 200 × 25
= ` 3,600 + ` 1,125 – ` 1,000
= ` 4,725 – ` 1,000
= ` 3,725
24. Dr. Revaluation A/c Cr.
Particulars Amount (`) Particulars Amount (`)
To Workmen Compensation Claim 10,000 By Provision for Doubtful Debts 500
To Gain transferred to: By Freehold Premises 12,800
Sudhir 1,980
Kabir 1,320 3,300
13,300 13,300

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 Dr. Partners’ Capital A/cs Cr.
Sudhir Kabir Adheer Sudhir Kabir Adheer
Particulars Particulars
(`) (`) (`) (`) (`) (`)
To Advertisement By Balance b/d 1,00,000 80,000 —
Suspense A/c 8,220 5,480 — By General Reserve A/c 5,760 3,840 —
To Bank A/c 4,500 4,500 — By Revaluation A/c 1,980 1,320 —
To Balance c/d (Bal. Fig.) 1,04,020 84,180 47,050 By P
 remium for
Goodwill A/c 9,000 9,000 47,050
1,16,740 94,160 47,050 1,16,740 94,160 47,050

Balance Sheet
Liabilities Amount (`) Assets Amount (`)
Sudhir’s Capital A/c 1,04,020 Freehold Premises 1,72,800
Kabir’s Capital A/c 84,180 Stock 43,000
Adheer’s Capital A/c 47,050 Debtors 28,000
Workmen Compensation Claim 23,000 Less: Provision for
Employees Provident Fund 16,700 Doubtful Debts 1,500 26,500
Creditors 16,400 Bills Receivable 13,500
Bank Loan 40,000 Cash at Bank 75,550
3,31,350 3,31,350

Working Notes:
(i) Combined Capital of Sudhir and Kabir = ` 1,04,020 + ` 84,180 = ` 1,88,200
1 4
Combined Share of Sudhir and Kabir = 1 – 5 = 5
5
Capital of the firm = ` 1,88,200 × 4
5 1
Adheer’s Capital = ` 1,88,200 × 4 × 5 = ` 47,050

(ii) Cash at Bank = ` 19,500 + ` 18,000 – ` 9,000 + ` 47,050 = ` 75,550

Or

Dr. Revaluation A/c Cr.
Amount Amount
Particulars Particulars
(`) (`)
To Provision for Doubtful Debts 2,050 By Premises 27,500
:(28, 000 – 2, 500) × 100
10
– (3, 000 – 2, 500)D
To Outstanding Claim for Damages 2,300
To Creditors 2,000
To Stock 3,800
To Gain transferred to:
Rita 6,940
Gita 6,940
Tabasum 3,470 17,350
27,500 27,500

EAD Accountancy—12
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Dr. Partners’ Capital A/cs Cr.
Gita Rita Tabsum Gita Rita Tabsum
Particulars Particulars
(`) (`) (`) (`) (`) (`)
To Advertisement Suspense A/c 4,800 4,800 2,400 By Balance b/d 1,00,000 1,00,000 50,000
To Rita’s Capital A/c 3,000 – 9,000 By Revaluation A/c 6,940 6,940 3,470
To Cash A/c – 1,14,440 – By Gita’s Capital A/c – 3,000 –
To Balance c/d (Bal. Fig.) 1,38,175 – 1,38,175 By Tabsum’s Capital A/c – 9,000 –
By Cash A/c – – 96,105
1,45,975 1,18,940 1,49,575 1,45,975 1,18,940 1,49,575

Balance Sheet
Liabilities Amount (`) Assets Amount (`)
Creditors 56,000 Cash in Hand 35,000
Bills Payable 20,600 Debtors 28,000
Employees Provident Fund 5,200 Less: Bad Debts 2,500
Outstanding Claim for Damages 2,300 Less: Provision for Doubtful
Capital A/cs: Debts 2,550 22,950
Gita 1,38,175 Stock 75,000
Tabasum 1,38,175 2,76,350 Premises 1,37,500
Investments 90,000
3,60,450 3,60,450

Working Notes:
(i) Calculation of Gaining Ratio:
1 2 1
Gita’s Gain = 2 – 5 = 10
1 1 3
Tabsum’s Gain = 2 – 5 = 10

(ii) Total Capital of New Firm = Adjusted Capital of All Partners + Working Capital – Available Cash
= ` 2,50,000 + ` 17,350 – ` 12,000 + ` 35,000 + ` 14,000
= ` 2,76,350
Capital Contribution in new firm:
1
Gita = ` 2,76,350 × 2 = ` 1,38,175
1
Tabsum = ` 2,76,350 × 2 = ` 1,38,175

25. (i) Goodwill = ` 1,20,000

7
Alex’s share of goodwill = ` 1,20,000 × 10 = ` 84,000
Juely’s Capital A/c Dr. 56,000
Tom’s Capital A/c Dr. 28,000
To Alex’s Capital A/c 84,000
(Being adjustment of goodwill through capital accounts)

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 6 7
(ii) Profit and Loss Suspense A/c = ` 80,000 × × = ` 28,000
12 10
Profit and Loss Suspense A/c Dr. 28,000
To Alex’s Capital A/c 28,000
(Being share of profit till death transferred to Alex’s capital account)
(iii) Amount to be transferred to Alex’s executors’ A/c ` 2,22,600
Working Note:

Dr. Alex’s Capital A/c Cr.

Particulars Amount (`) Particulars Amount (`)

To Goodwill A/c 54,600 By Balance b/d 1,40,000
To B’s Executors’ A/c (Bal. Fig.) 2,22,600 By General Reserve A/c 25,200
By Juely’s Capital A/c (Goodwill) 56,000
By Tom’s Capital A/c (Goodwill) 28,000
By Profit and Loss Suspense A/c 28,000
2,77,200 2,77,200

26. Journal

Date Particulars L.F. Dr. (`) Cr. (`)

Bank A/c Dr. 26,00,000

To Debenture Application A/c 26,00,000
(Being application amount received on 40,000
debentures)
Debenture Application A/c Dr. 26,00,000
To 9% Debentures A/c 26,00,000
(Being application money transferred to debentures
account)
Debentures Allotment A/c Dr. 11,20,000
Loss on Issue of Debentures A/c Dr. 6,80,000
To 7% Debentures A/c
Premium on Redemption of Debentures A/c 14,00,000
(Being allotment of 40,000 debentures issued at 4,00,000
discount and redeemable at premium)
Bank A/c Dr. 11,20,000
To Debenture Allotment A/c
(Being allotment money received on 40,000
debentures) 11,20,000

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 Dr. Loss on Issue of Debentures A/c Cr.

Amount Amount
Particulars Particulars
(`) (`)

To 7% Debenture A/c 2,80,000 By Statement of Profit and Loss 6,80,000

To P
 remium on Redemption of
Debentures A/c 4,00,000

6,80,000 6,80,000

27. (c) Interest paid on loan.

Or

(d) (iv); (i); (ii); (iii)

28. (a) ` 6,000

29. (c) Statement I is correct and Statement II is incorrect.

Or

(b) ‘Conversion of ` 2,00,000 debentures into shares.

30. (c) Cash flow from investing activities ` 46,000

31. Items Major Heads Sub-heads

(i) Bills Payable Current Liabilities Trade Payables

(ii) Unpaid Dividends Current Liabilities Other Current Liabilities
(iii) Provision for Taxation Current Liabilities Short-term Provisions
(iv) Investment in Mutual Funds Non-current Assets Non-current Investments-Other
Investments
(v) Stores and Spares Current Assets Inventories
(vi) Debentures maturing in current year Current Liabilities Other Current Liabilities

32. (a) (i) Decrease: Current Assets and Current Liabilities both increase with same amount.

(ii) Decrease: Current Assets decrease with the amount of loss.

(iii) Decrease: Current Assets decrease with the amount of redemption.
20
(b) Gross Profit = ` 3,00,000 × 100 = ` 60,000

Cost of Revenue from Operations = Revenue from Operations – Gross Profit

= ` 3,00,000 – ` 60,000 = ` 2,40,000

Cost of Revenue from Operation
Inventory Turnover Ratio =
Average inventory

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 ` 2, 40, 000
5 = Average Inventory

` 2, 40, 000
Average Inventory = 5 = ` 48,000

Opening Inventory + Closing Inventory

Average Inventory =
2
x + x + ` 54, 000
` 48,000 = 2
2x + ` 54, 000
` 48,000 = 2
` 48,000 = x + ` 27,000

x = ` 48,000 – ` 27,000

= ` 21,000

Closing Inventory = ` 21,000 + ` 54,000

= ` 75,000
Quick Assets
Quick Ratio =
Current Liabilities
0.8 Quick Assets
1 = ` 40,000
Quick Assets = ` 40,000 × 0.8 = ` 32,000

Current Assets = ` 32,000 + ` 75,000

= ` 1,07,000
` 1, 07, 000
Current Ratio = ` 40, 000 = 2.675:1
33. Common-size Statement of Profit and Loss
for the years ended 31st March 2022 and 2023
Percentage of Revenue
Absolute Amount
from Operations
Particulars
31.03.2022 31.03.2023 31.03.2022 31.03.2023
(`) (`) (%) (%)

I. Revenue from Operations 1,00,000 1,00,000 100 100

II. Employee Benefit Expenses 70,000 74,800 70 74.80

Other Expenses 8,000 9,800 8 9.8
III. Total Expenses (I + II) 78,000 84,600 78 84.6

IV. Profit before Tax (I – III) 22,000 15,400 22 15.4

V. Tax 11,000 7,700 11 7.7

VI. Profit after Tax (IV – V) 11,000 7,700 11 7.7

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 Or

Comparatives Statement of Profit and Loss

for the years ended 31st March 2022 and 2023
Absolute Percentage
Change Change
31.03.2022 31.03.2023
Particulars (Increase or (Increase or
(`) (`)
Decrease) Decrease)
(`) (%)
I. Revenue from Operations 12,00,000 20,00,000 8,00,000 66.67
II. Other Income 9,00,000 12,00,000 3,00,000 33.33
III. Total Revenue (I + II) 21,00,000 32,00,000 11,00,000 52.38
IV. Expenses 10,00,000 13,00,000 3,00,000 30.00
V. Profit before Tax (III – IV) 11,00,000 19,00,000 8,00,000 72.73

34. Note: Short term provisions are assumed to be provision for tax.

Cash Flow Statement of Vednta Ltd.

for the year ended 31st, March, 2023

Particulars Amount (`) Amount (`)

A. Cash Flow from Operating Activities
Net Profit before Tax 75,000
Add: Non-cash and Non-operating expenses:
Depreciation on Machinery 33,000
Goodwill written off 36,000
Loss on sale of Machinery 1,000
Interest on bank loan 5,100
Operating Profit before Working Capital Changes 1,50,100
Adjustment for Current Assets and Current Liabilities:
Increase in Trade Receivables (13,500)
Increase in Inventories (4,000)
Decrease in Trade Payables (12,500)
Net Cash inflow from Operating Activities before Tax 1,20,100
Less: Tax paid (38,500)
Net Cash inflow from Operating Activities 81,600
B. Cash Flow from Investing Activities
Sale of Machinery 3,000
Purchased of Machinery (1,47,000)
Net Cash outflow from Investing Activities (1,44,000)

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 C. Cash Flow from Financing Activities
Cash proceeds from issue of Equity Shares 50,000
Raising of Bank Loan 35,000
Interest on Bank Loan (5,100)
Net Cash Inflow from Financing Activities 79,900
D. Net Increase in Cash and Cash Equivalents (A + B + C) 17,500
Add: Opening Balance of Cash and Cash Equivalents (1,87,500 + 75,000) 2,62,500
E. Closing balance of Cash and Cash Equivalents (1,60,000 + 1,20,000) 2,80,000

Working Notes:
(i) Calculation of Profit before Tax:
(`)
Balance as per Statement of Profit and Loss 50,000

Add: Provision for Tax (Current year) 25,000

Net Profit before Tax 75,000

(ii) Calculation of Sale of Furniture:

Dr. Machinery Account Cr.
Amount Amount
Particulars Particulars
(`) (`)
To Balance b/d 5,00,000 By Bank A/c (Sale) 3,000
To Bank A/c (Purchase) (Bal. Fig.) 1,47,000 By Accumulated Depreciation A/c 8,000
By Statement of Profit and Loss (Loss) 1,000
Balance c/d 6,35,000
6,47,000 6,47,000

Dr. Accumulated Depreciation A/c Cr.

Amount Amount
Particulars Particulars
(`) (`)
To Machinery A/c (Sold part depreciation) 8,000 By Balance b/d 75,000
To Balance c/d 1,00,000 By S
 tatement of Profit and Loss 33,000
(Depreciation) (Bal. Fig.)
1,08,000 1,08,000

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