Series RAC

Code No.
RSPL /1
Candidates must write the Code on
Roll No. the title page of the answer-book

 Please check that this question paper contains 11 printed pages.

 Code number given on the right hand side of the question paper should
be written on the title page of the answer-book by the candidate.
 Please check that this question paper contains 23 questions.
 Please write down the Serial Number of the question before
attempting  it.
 15 minutes time has been allotted to read this question paper.

Accountancy

Time Allowed : 3 hours Maximum Marks : 80

General Instructions :

(i) This question paper contains two parts A and B.

(ii) Part A is compulsory for all.

(iii) Part B has two options — Financial Statement Analysis and

Computerised Accounting.

(iv) Attempt only one option of part B.

(v) All parts of a question should be attempted at one place.

RSPL / 1 1 P.T.O.
 Part A
(Accounting for Partnership Firms and Companies)

*1. Rahul and Ranbir are partners in a firm. Sanjay is admitted into partnership
for an equal share of profit and pays ` 20,000 for his share of goodwill.
The accountant shows the goodwill in the Balance Sheet of the firm.
Is the accountant correct in the treatment given for goodwill? Give
reason. 1

2. Calculate Interest on drawings @ 6% per annum, if a partners withdraws

` 5,000 at the beginning of every alternate month. 1

3. Suman Ltd. has a Paid up Share Capital of ` 50,00,000. It has ` 10,00,000

in its Securities Premium Reserve Account. The Board of Directors
decide to utilize 50% of the reserve for issue of bonus shares to existing
shareholders in the ratio of 1 : 10. Is the decision as per law? 1

4. What is Employee Stock Option Plan? 1

5. Reshma and Richa are partners sharing profits and losses in the ratio of
7:3. They admit Mona for 1/5 share which she acquires in equal proportion
from both the partners.
Find the new profit sharing ratio. 1

6. The firm of Sneha and Saranya was dissolved on 1st January, 2015. It was
agreed that Saranya will undertake the dissolution work for an agreed
remuneration of ` 5,000 and bear the realisation expenses. Dissolution
expenses amounted to ` 3,800.
Pass necessary Journal entry to record the above in the books of the
firm. 1

7. Rishwin Ltd. has an Authorised Capital of ` 20,00,000 divided into Equity

Shares of ` 10 each. The Company invited applications for 70,000 shares.
All calls were made and duly received. Share issue expenses amounted to
` 20,000. 5,000 fully paid Equity shares were issued to Promoters for their
services.
Show how the Share Capital and Assets will appear in the Balance Sheet
of the Company as per Schedule III Part I of the Companies Act 2013.
Also prepare Notes to Accounts for the same. 3

*Value Based Question

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 *8.
Naresh Limited, an established business in Electronics wanted to expand.
The Company acquired the business of Pawan Ltd on April 1, 2015
taking over assets of ` 14,50,000 and creditors of ` 50,000 for a purchase
consideration of ` 12,00,000.
Naresh Ltd. paid ` 1,00,000 in cash and for the balance issued 10,000 10%
Debentures of ` 100 each at a premium of 10%, to be redeemed at par after
5 years. Pass necessary Journal entries in the books of Naresh Limited
for the above mentioned transactions. The Company also decides to
provide laptops to employees working in the office, to increase their
efficiency and to reduce use of paper. What values does the company
communicate? 3

9. Abhilash Ltd. issued 50,000; 9% Debentures of ` 100 each at ` 120 per

debenture on 1st April, 2014. The issue was fully subscribed. In terms of
issue of debentures, interest was payable at the end of the financial year.
TDS was deducted on interest @ 10%.
Pass necessary Journal entries for the above transactions. 3

10. Rohan, Rishabh and Raghav are partners in a firm sharing profits in the
ratio of 2 : 3 : 5. They decide to share future profits and losses in the ratio
of 5 : 3 : 2 with effect from April 1, 2015.
The following items appear in the Balance Sheet as at March 31, 2015.
General Reserve ` 55,000
Profit and Loss Account (Dr.) ` 20,000
Contingency Reserve ` 20,000
Goodwill ` 30,000
Employees Provident Fund ` 25,000
Goodwill was appearing in the Balance Sheet at its full value.
Pass necessary journal entries at the time of reconstitution of the
partnership firm. 3

11. X, Y and Z are partners in a firm sharing profits in the ratio 5 : 3 : 2.

On 1 st April, 2015 Z retires. The Capital accounts of all partners
after adjustments of Profit, Reserves and Revaluation amounted to X
` 1,50,000; Y ` 1,20,000 and Z ` 84,000. X and Y agreed on the following:
(i) To pay Z ` 1,00,000 in full settlement.
(ii) Capital of the new firm to be fixed @ ` 3,20,000 in their profit sharing ratio.
Pass necessary Journal entry for goodwill and state the amount of actual
cash to be brought in or to be paid to the partners. 4
*Value Based Question

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 12. Aman, Angad and Aryan were partners in a firm sharing profits in the ratio
of 4 : 2 : 1. For the year ending 31st March, 2015 profits were distributed
without providing for the following:
(i) Aman was entitled to a salary of ` 2,000 for each quarter.
(ii) Angad was entitled to a commission of ` 6,000 per annum.
(iii) Aryan’s Medical Insurance Premium amounting to ` 7,000 was to be
paid by the firm.
Pass adjusting journal entry. 4

13. Ahmed and Roshan were partners sharing profits and losses in the ratio of
3 : 2. On 31st March, 2015 they decided to dissolve their partnership firm.
Roshan was appointed to realise the assets and pay off the liabilities. For
this service it was decided that he will be paid ` 5,000 as commission.
Their Balance Sheet as on that date stood as follows:

Liabilities Amount Assets Amount

(`) (`)
Capital Accounts: Machinery 90,000
Ahmed 75,000 Furniture 45,000
Roshan 30,000 Debtors 52,000
Outstanding expenses 10,000 Stock 30,000
Creditors 70,000 Cash at Bank 53,000
Employees’ Provident Fund 50,000 Profit & Loss account 15,000
Bank Loan 50,000
2,85,000 2,85,000
Following was agreed upon:
1. Roshan agreed to take over Furniture at 80% of the book value.
2. Debtors of ` 7,000 proved bad.
3. Ahmed took over ` 20,000 worth of the stock at 10% less than the book
value. The remaining stock was sold at 110%
4. Machinery was sold at a loss of 20%.
5. The Bank Loan was paid along with interest for the year @ 10% p.a
6. Outstanding expenses were settled for ` 8,000.
7. Other liabilities were paid in full.
8. The expenses on Realisation amounted to ` 800.
Prepare Realisation account, Partners Capital accounts and Bank
account to close the books of the firm. 6

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 14. Following is the Balance Sheet of Kiran, Kapil and Keshav as on 31st March,
2015. Their profit sharing ratio is 5 : 4 : 3.

Liabilities Amount Assets Amount

(`) (`)
Creditors 28,000 Bank 45,000
Bills Payable 10,000 Stock 36,000
General Reserve 24,000 Debtors 34,000
Capital Accounts: Furniture 55,000
Kiran 1,50,000 Machinery 64,000
Kapil 1,20,000 Land and Building 1,62,000
Keshav 1,00,000 3,70,000 Goodwill 36,000
4,32,000 4,32,000
Keshav died on 30th September 2015. The Partnership Deed provided for
the following on the death of a partner:
(i) Goodwill of the firm was valued at 1 year’s purchase of the average
profit of the last 3 years. The profit for the year ended 31st March 2015;
31st March 2014 and 31st March 2013 were ` 72,000; ` 58,000 and
` 32,000 respectively.
(ii) Keshav’s share of profit or loss till the date of his death was to be
calculated on the basis of profit or loss for the year ended 31st March, 2015.
(iii) Interest on Capital @ 10% p.a.
(iv) Keshav’s Executor was paid ` 5,500 in cash. The balance was to
be paid in three equal half yearly instalments along with interest
@ 10% p.a. starting from 31st March, 2016.
Pass necessary journal entries at the time of Keshav’s death and prepare
his Executor’s Account till it is finally closed. 6

15. Fill in the missing figures for the following entries in the books of Bharat Ltd.
Journal

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

2014 Bank A/c Dr. ......... .........

Apr 1
To ................................
(Being issue of 10,000 9% Debentures of 100
each at a premium of 20 %)

RSPL / 1 5 P.T.O.
 ................................ Dr. .........
To 9% Debenture A/c 10,00,000
To ................................ .........
(Being acceptance of 10,000 9% Debentures
of ` 100 each @ ` 120 per Debenture)
2015 ................................ Dr. .........
Mar 31
To ................................ .........
(Being purchase of 500 own debentures @
` 95 each, 300 own debentures @ ` 97 each
and 200 own debentures @ ` 98 each for
immediate cancellation)
Mar 31 ................................ Dr. 500
To ................................ 500
(Being the expenses met for purchase of
debentures paid)
Mar 31 ................................ Dr. .........
To ................................ .........
To ................................ .........
(Being cancellation of own 1,000 9%
debentures purchased)
Mar 31 ................................ Dr. .........
To ................................ .........
(Being the profit on cancellation of own
debentures transferred )
6

16. Akhil and Sameer were partners sharing profits and losses in the ratio of
4 : 1. Their Balance Sheet as at 31st March, 2015 stood as under:

Liabilities Amount Assets Amount

(`) (`)
Capital Accounts: Goodwill 25,000
Akhil 2,25,000 Machinery 1,40,000
Sameer 1,75,000 Furniture 82,000
General Reserve 40,000 Investments 50,000
Workmen Compensation Fund 20,000 Stock 60,000

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 Employees Provident Fund 20,000 Debtors 74,000
Bills Payable 50,000 Cash at Bank 95,000
Creditors 20,000 Cash in hand 24,000

5,50,000 5,50,000
On 1st April, 2015 they admitted Hisham into the partnership firm for
1/4th share which he acquired from Akhil and Sameer in the ratio of
3 : 1 respectively. Other adjustments were as follows:
(i) The Goodwill of the firm is valued at ` 60,000 and Hisham contributed
half of his share of goodwill in cash.
(ii) One customer who owed the firm ` 4,000 became insolvent and nothing
could be realised from him.
(iii) Create a provision of 10% for Doubtful Debts.
(iv) Partners decided to take 50% of the Investments in their old profit
sharing ratio. Remaining Investments were valued at ` 20,000.
(v) Claim on Workmen Compensation was established at ` 15,000.
(vi) Hisham is to contribute ` 1,00,000 as Capital.
(vii) Capital accounts of the partners are to be re-adjusted on the basis of
their profit sharing arrangement and any excess or deficiency is to be
transferred to their Current Account.
Prepare Revaluation A/c, Partners’ Capital Accounts and the Balance
Sheet of the newly constituted firm.

OR
Suchita, Sanjana and Reshma are partners sharing profits and losses in the
ratio of 5 : 4 : 1. Their Balance Sheet as on 31st March, 2015 stood as under:
Liabilities Amount Assets Amount
(`) (`)
Capital Accounts: Machinery 2,72,000
Suchita 2,20,000 Furniture 1,16,000
Sanjana 1,50,000 Investments 50,000
Reshma 80,000 (Market Value 25,000)
General Reserve 30,000 Debtors 25,000
Investment Fluctuation Fund 20,000 Less: Prov. 3,000 22,000
9% Loan 50,000 Stock 70,000
Creditors 20,000 Cash at hand 30,000
Bills Payable 10,000 Profit and Loss A/c 20,000
5,80,000 5,80,000

RSPL / 1 7 P.T.O.
 On the above date Sanjana retired and the terms of retirement were:

(i) Sanjana sells her share of goodwill to Suchita and Reshma equally.
The goodwill of the firm was valued at ` 30,000.

(ii) Stock to be appreciated by 10%.

(iii) 10% of the General Reserve is to be transferred to Provision for doubtful

debts.

(iv) Interest on Loan is outstanding for 6 months.

(v) Provision for a bill under discount of ` 2,000 was to be made.

(vi) The total capital of the new firm is decided to be ` 3,00,000. Necessary
adjustments to be made by opening Current Accounts.

Prepare Revaluation A/c, Partners’ Capital Accounts and Balance Sheet

of the new firm after Sanjana’s retirement. 8

17. Avinash Ltd. invited applications for 30,000 Equity shares of ` 100 each
issued at a premium of ` 10 per share. The amount was payable as follows:
On Application ` 30 (including ` 5 as premium)
On Allotment ` 30 per share (including ` 5 as premium)
Balance on First & Final call
The issue was oversubscribed by 20,000 shares. Applications for 5,000
shares were rejected and pro rata allotment was made to the remaining
applicants. Excess application money was adjusted towards sums due on
allotment.
Richa to whom 500 shares were allotted failed to pay the allotment money
and her shares were forfeited immediately after allotment. Rani who applied
for 2,250 shares failed to pay the first and final call. Her shares were also
forfeited after the first & final call was made.
Out of the forfeited shares 1,000 were re-issued @ ` 110 per share fully
paid up. The re-issued shares included 50 % of shares held by both the
defaulters, Richa and Rani.
Journalise the above transactions.

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 OR
Amaya Ltd. invited applications for 1,00,000 Equity shares of ` 10 each
issued at 20% premium per share. The amount was payable as follows:
On Application ` 3
On Allotment ` 5 per share (including premium)
On First & Final call ` 4 per share
Applications for 1,80,000 shares were received. Allotment was made as under:
Category Application Allotment
A 10,000 Nil
B 1,10,000 50,000
C 60,000 50,000

Excess application money to be adjusted against allotment.

All money was duly received except:

(a) Aseem to whom 500 shares were allotted in Category B did not pay any
amount after application.
(b) Samira, who applied for 1,800 shares from Category C failed to pay the
first and final call.
All shares on which payments were overdue were forfeited after the final
call was made.
All the forfeited shares of Aseem and 50% of Samira’s were re-issued
@ ` 9 per share fully paid.
Pass necessary Journal entries for the above transactions in the books
of Amaya Limited. 8

PART B
(Analysis of Financial Statements)
18. Under which type of activity will you classify interest paid on Long Term
Borrowing while preparing Cash Flow Statement? 1

19. What is meant by “Cash Equivalents” while preparing Cash Flow

Statement? 1

20. (a) Under which Sub-heading will the following items are shown in the
Balance Sheet of a Company as per Schedule II of Company’s Act
2013. 4
(i) Capital Redemption Reserve (ii) Goodwill
(iii) Long Term Loans (iv) Loose Tools

RSPL / 1 9 P.T.O.
 (b) Explain in brief how the Analysis of Financial Statements is useful to
potential Investor and Lenders.

21. From the following Income Statement of Adarsh Limited prepare

Common-size Income Statement: 4

Particulars Note 31st March, 2015 31st March, 2014

No. (`) (`)

I. Revenue from Operations 1,80,000 1,20,000

II. Other Income 18,000 6,000
III. Total Revenue 1,98,000 1,26,000
IV. Expenses:
Cost of Material Consumed 1,08,000 80,000
Finance Cost 18,000 12,000
Other Expenses 3,000 3,000
V. Total Expenses 1,29,000 95,000
VI. Profit before Tax (III-V) 69,000 31,000

22. From the information given below calculate (i) Inventory Turnover Ratio
and (ii) Operating Ratio: 4

Particulars Amount (`)

Opening Inventory 44,000

Closing Inventory 56,000

Purchases 1,83,000

Revenue from Operations 3,36,250

Revenue from Operations Return 30,000

Office expenses 10,000

Selling and Distribution expenses 6,000

Carriage Inwards 4,000

RSPL / 1 10
 23. From the following Balance Sheet of Raaga Limited for the years ended
31st March, 2015 and 31st March, 2014 prepare Cash Flow Statement.

Particulars Note Year ended Year ended

No. 31st March, 31st March,
2015 (`) 2014 (`)
I. Equity & Liabilities
1. Shareholders’ Funds:
(a) Equity Share Capital 1,13,000 79,000
(b) Reserves and Surplus 1 74,000 40,000
2. Current Liabilities:
Trade Payables 19,500 15,500
Total 2,06,500 1,34,500
II. Assets
1. Non-Current Assets:
Fixed Assets 1,40,000 80,000
2. Current Assets:
(a) Inventories 25,000 18,000
(b) Trade Receivables 34,500 31,500
(c) Cash & Cash Equivalents 7,000 3,000
(d) Other Current Assets 2 — 2,000
Total 2,06,500 1,34,500
Notes to Accounts:
Particulars Year ended 31st Year ended 31st
March, 2015 (`) March, 2014 (`)
1. Reserve and Surplus:
  General Reserve 45,000 25,000
  Surplus, i.e., Statement of Profit & Loss 29,000 15,000
Total 74,000 40,000
2. Other Current Assets:
  Share Issue Expenses — 2,000
Total — 2,000
Additional Information:
1. Asset costing ` 10,000 with a book value of ` 6,000 was sold at a profit
of ` 2,000.
2. Depreciation for the year ended 31 st March, 2015 amounted to
` 25,500.
3. Interim Dividend of ` 7,000 was paid during the year. 6

RSPL / 1 11