This question paper contains 23 questions. This question paper contains two parts A and B. Part A is compulsory for all. Part B has two options: Analysis of Financial Statements and Computerized Accounting. Attempt only one option of Part B.
Part - A
Accounting for Not-for-Profit Organizations, Partnership Firms and Companies
1. Atul and Neera were partners in a firm sharing profits in the ratio of 3 : 2. They admitted Mitali as a new partner. Goodwill of the firm was valued at Rs 2,00,000. Mitali brings her share of goodwill premium of Rs 20,000 in cash, which is entirely credited to Atul’s Capital Account. Calculate the new profit sharing ratio.
2. What is meant by ‘Issued Capital’ ?
What is meant by ‘Employees Stock Option Plan’ ?
3. Differentiate between Dissolution of Partnership and Dissolution of a Partnership Firm on the basis of ‘Court’s Intervention.’
4. What is meant by ‘Gaining Ratio’ on retirement of a partner ?
P, Q and R were partners in a firm. On 31st March, 2018 R retired. The amount payable to R Rs. 2,17,000 was transferred to his loan account. R agreed to receive interest on this amount as per the provisions of Partnership Act, 1932. State the rate at which interest will be paid to R.
5. Chhavi and Neha were partners in a firm sharing profits and losses equally. Chhavi withdrew a fixed amount at the beginning of each quarter. Interest on drawings is charged @ 6% p.a. At the end of the year, interest on Chhavi’s drawings amounted to Rs. 900. Pass necessary journal entry for charging interest on drawings.
6. How are Specific donations treated while preparing final accounts of a ‘Not-For-Profit Organisation’ ?
State the basis of accounting of preparing ‘Income and Expenditure Account’ of a NotFor-Profit Organisation.
7. The capital of the firm of Anuj and Benu is Rs. 10,00,000 and the market rate of interest is 15%. Annual salary to the partners is Rs. 60,000 each. The profit for the last three years were Rs. 3,00,000, Rs. 3,60,000 and Rs. 4,20,000. Goodwill of the firm is to be valued on the basis of two years purchase of last three years average super profits. Calculate the goodwill of the firm.
8. How the following items for the year ended 31st March, 2018 will be presented in the financial statements of Aisko Club :
Additional Information : Interest Accrued on Tournament Fund Investments Rs. 6,000
9. Garvit Ltd. invited applications for issuing 3,000, 11% Debentures of Rs. 100 each at a discount of 6%. The full amount was payable on application. Applications were received for 3,600 debentures. Applications for 600 debentures were rejected and the application money was refunded. Debentures were allotted to the remaining applicants.
Pass the necessary journal entries for the above transactions in the books of Garvit Ltd.
On 1st April 2015, P Ltd. Issued 6,000 12% Debentures of Rs. 100 each at par redeemable at a premium of 7%. The Debentures were to be redeemed at the end of third year. Prepare Loss on issue of 12% Debentures Account.
10. Unilink Ltd. had outstanding Rs. 12,00,000, 9% debentures on 1st April, 2014 redeemable at a premium of 8% in two equal annual instalments starting from 31st March, 2018. The company had a balance of Rs. 3,00,000 in Debenture Redemption Reserve on 31st March, 2017. Pass the necessary journal entries for redemption of debentures in the books of Unilink Ltd. for the year ended 31st March, 2018.
11. Ankit, Bobby and Kartik were partners in a firm sharing profits in the ratio 4 : 3 : 3. The firm was dissolved on 31-3-2018. Pass the necessary Journal entries for the following transactions after various assets (other than cash and bank) and third party liabilities had been transferred to Realisation Account :
- The firm had stock of Rs. 80,000. Ankit took over 50% of the stock at a discount of 20% while the remaining stock was sold off at a profit of 30% on cost.
- A liability under a suit for damages included in creditors was settled at Rs. 32,000 as against only Rs. 13,000 provided in the books. Total creditors of the firm were Rs. 50,000.
- Bobby’s sister’s loan of Rs. 20,000 was paid off along with interest of Rs. 2,000.
- Kartik’s Loan of Rs. 12,000 was settled at Rs. 12,500.
12. Radhika, Bani and Chitra were partners in a firm sharing profits and losses in the ratio of 2 : 3 : 1. With effect from 1st April, 2018 they decided to share future profits and losses in the ratio of 3 : 2 : 1. On that date their Balance Sheet showed a debit balance of Rs. 24,000 in Profit and Loss Account and a balance of Rs. 1,44,000 in General Reserve. It was also agreed that :
- The goodwill of the firm be valued at Rs. 1,80,000.
- The Land (having book value of Rs. 3,00,000) will be valued at Rs. 4,80,000.
Pass the necessary journal entries for the above changes.
13. From the following Receipts and Payments Account and additional information, prepare Income and Expenditure Account and Balance Sheet of Sears Club, Noida as on March 31, 2018.
Additional Information :
- The club has 200 members each paying an annual subscription of Rs. 1,000. Rs. 60,000 were in arrears for last year and 25 members paid in advance in the last year for the current year.
- Stock of stationery on 1-4-2017 was Rs. 3,000 and on 31-3-2018 was Rs. 4,000.
14. Giriija, Yatin and Zubin were partners sharing profits in the ratio 5 : 3 : 2. Zubin died on 1st August, 2015. Amount due to Zubin’s executor after all adjustments was Rs. 90,300. The executor was paid Rs. 10,300 in cash immediately and the balance in two equal annual instalments with interest @ 6% p.a. starting from 31st March, 2017. Accounts are closed on 31st March each year.
Prepare Zubin’s Executors Account till he is finally paid.
15. Sonu and Rajat started a partnership firm on April 1, 2017. They contributed Rs. 8,00,000 and Rs. 6,00,000 respectively as their capitals and decided to share profits and losses in the ratio of 3 : 2.
The partnership deed provided that Sonu was to be paid a salary of rs. 20,000 per month and Rajat a commission of 5% on turnover. It also provided that interest on capital be allowed @ 8% p.a. Sonu withdrew Rs. 20,000 on 1st December, 2017 and Rajat withdrew Rs. 5,000 at the end of each month. Interest on drawings was charged @ 6% p.a.
The net profit as per Profit and Loss Account for the year ended 31st March, 2018 was Rs. 4,89,950. The turnover of the firm for the year ended 31st March, 2018 amounted to Rs. 20,00,000. Pass necessary journal entries for the above transactions in the books of Sonu and Rajat.
Jay, Vijay and Karan were partners of an architect firm sharing profits in the ratio of 2 : 2 : 1. Their partnership deed provided the following :
- A monthly salary of Rs. 15,000 each to Jay and Vijay.
- Karan was guaranteed a profit of Rs. 5,00,000 and Jay guaranteed that he will earn an annual fee of Rs. 2,00,000. Any deficiency arising because of guarantee to Karan will be borne by Jay and Vijay in the ratio of 3 : 2.
During the year ended 31st March, 2018 Jay earned fee of Rs. 1,75,000 and the profits of the firm amounted to Rs. 15,00,000.
Showing your workings clearly prepare Profit and Loss Appropriation Account and the Capital Account of Jay, Vijay and Karan for the year ended 31st March, 2018.
16. DF Ltd. invited applications for issuing 50,000 shares of Rs. 10 each at a premium of Rs. 2 per share. The amount was payable as follows :
On Application : Rs. 3 per share (including premium Rs. 1)
On Allotment : Rs. 3 per share (including premium Rs. 1)
On First call : Rs. 3 per share
On Second and Final Call : Balance amount
Application for 70,000 shares were received. Allotment was made on the following basis.
Applications for 5,000 shares - Full
Applications for 50,000 shares - 90%
Balance of the applications were rejected. Rs. 1,11,000 were received on account of allotment. The amount of allotment due from the shareholders to whom shares were allotted on prorata basis was fully received. A few shareholders to whom shares were allotted in full, failed to pay the allotment money. Rs. 1,20,000 were received on first call. Directors decided to forfeit those shares on which allotment and call money was due. Half of the forfeited shares were re-issued @ Rs. 8 per share fully paid up. Final call was not made.
Pass the necessary journal entries for the above transactions in the book of DF Ltd.
EF Ltd. invited applications for issuing 80,000 equity shares of Rs. 50 each at a premium of 20%. The amount was payable as follows :
On Application : Rs. 20 per share (including premium Rs. 5)
On Allotment: Rs. 15 per share (including premium Rs. 5)
On First Call : Rs. 15 per share
On Second and Final call : Balance amount
Applications for 1,20,000 shares were received. Applications for 20,000 shares were rejected and pro-rata allotment was made to the remaining applicants.
Seema, holding 4,000 shares failed to pay the allotment money. Afterwards the first call was made. Seema paid allotment money along with the first call. Sahaj who had applied for 2,500 shares failed to pay the first call money. Sahaj’s shares were forfeited and subsequently reissued to Geeta for Rs. 60 per share, Rs. 50 per share paid up. Final call was not made.
Pass necessary journal entries for the above transactions in the books of EF Ltd. by opening calls-in-arrears account.
17. Akul, Bakul and Chandan were partners in a firm sharing profits in the ratio of 2 : 2 : 1. On 31st March, 2018 their Balance Sheet was as follows :
Bakul retired on the above date and it was agreed that :
- Plant and Machinery was undervalued by 10%.
- Provision for doubtful debts was to be increased to 15% on debtors.
- Furniture was to be decreased to Rs. 87,000.
- Goodwill of the firm was valued at Rs. 3,00,000 and Bakul’s share was to be adjusted through the capital accounts of Akul and Chandan.
- Capital of the new firm was to be in the new profit sharing ratio of the continuing partners.
Prepare Revaluation account, Partners’ Capital accounts and the Balance Sheet of the reconstituted firm.
Sanjana and Alok were partners in a firm sharing profits and losses in the ratio 3 : 2. On 31st March, 2018 their Balance Sheet was as follows :
On 1st April, 2018, they admitted Nidhi as a new partner for 1/4th share in the profits on the following terms :
- Goodwill of the firm was valued at Rs. 4,00,000 and Nidhi brought the necessary amount in cash for her share of goodwill premium, half of which was withdrawn by the old partners.
- Stock was to be increased by 20% and furniture was to be reduced to 90%.
- Investments were to be valued at Rs. 3,00,000. Alok took over investments at this value.
- Nidhi brought Rs. 3,00,000 as her capital and the capitals of Sanjana and Alok were adjusted in the new profit sharing ratio.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of the reconstituted firm on Nidhi’s admission.
Part - B
Option - I: Analysis of Financial Statements
18. Mevo Ltd., a financial enterprise had advanced a loan of Rs. 3,00,000, invested Rs. 6,00,000 in shares of the other companies and purchased machinery for Rs. 9,00,000. It received dividend of Rs. 70,000 on investment in shares. The company sold an old machine of the book value of Rs. 79,000 at a loss of Rs. 10,000. Compute Cash flows from Investing Activities.
19. Give the meaning of ‘Cash Equivalents’ for the purpose of preparing Cash Flow Statement.
20. Explain briefly any four objectives of ‘Analysis of Financial Statements’.
State under which major headings and sub-headings will the following items be presented in the Balance Sheet of a company as per Schedule-III, Part-I of the Companies Act, 2013.
- Prepaid Insurance
- Investment in Debentures
- Unpaid dividend
- Capital Reserve
- Loose Tools
- Capital work-in-progress
- Patents being developed by the company
21. (a) Calculate Revenue from operations of BN Ltd. From the following information :
Current assets Rs. 8,00,000.
Quick ratio is 1.5 : 1
Current ratio is 2 : 1.
Inventory turnover ratio is 6 times.
Goods were sold at a profit of 25% on cost.
(b) The Operating ratio of a company is 60%. State whether ‘Purchase of goods costing Rs, 20,000’ will increase, decrease or not change the operating ratio.
(a) Calculate ‘Total Assets to Debt ratio’ from the following information :
Equity Share Capital 4,00,000
Long Term Borrowings 1,80,000
Surplus i.e. Balance in statement of Profit and Loss 1,00,000
General Reserve 70,000
Current Liabilities 30,000
Long Term Provisions 1,20,000
(b) The Debt Equity ratio of a company is 1 : 2. State whether ‘Issue of bonus shares’ will increase, decrease or not change the Debt Equity Ratio.
22. From the following information extracted from the Statement of Profit and Loss for the years ended 31st March, 2017 and 2018, prepare a Comparative Statement of Profit & Loss.
23. From the following Balance Sheet of Kiero Ltd. and the additional information as on 31-3-2018, prepare a Cash Flow Statement :
Notes to Accounts
Additional Information :
12% debentures were issued on 1st September, 2017.
Part - B
Option - II: Computerised Accounting
18. What is meant by ‘Data base design’ ?
19. What is meant by a ‘Summary Query’ ?
20. Why is it necessary to have safety features in accounting software ? Explain any two tools which provide data security.
21. Explain “Null Values and Complex attributes”.
Explain closing entries and adjusting entries.
22. Explain ‘Transparency control’ and ‘Scalability’ as features of Computerized Accounting System.
Explain ‘Payroll Accounting Subsystem’ & ‘Costing Subsystem’.
23. Name and explain the function which returns the future value of an investment which has constant payment and interest.