Model Paper 3 Accountancy - Model Paper 3

In which circumstances partners' can dissolve the firm without the interference of the court?

Premium for goodwill is not recorded at all on admission of a partners:

Each partner is both an agent and a principal as per:

HR Limited issued 10,000 equity shares @ ₹ 10 each at 10% premium. All shares were subscribed and amount was received. Identity the amount to be transferred to Securities Premium Reserve A/c

DCM Ltd issued 50,000 shares of ₹ 10 each payable as ₹ 2 per share on application, ₹ 3 per share on allotment and ₹ 5 on first and final call. Applications were received for 70,000 shares. It was decided that:
a. to refuse allotment to the applicants for 10,000 shares,
b. to allot 20,000 shares to Mohit who had applied for similar number, and
c. to allot the remaining shares on pro rata basis
Mohit failed to pay the allotment money and Sachin who belonged to Category C and was allotted 3,000 shares paid the call money with allotment.
Calculate the amount received on allotment.

Y Ltd. purchased Machinery Rs. 55,000 from Z Ltd. 10% was paid by Y Ltd. by accepting a Bill of Exchange in favour of Z Ltd. and the balance was paid by issue of 9% Debentures of Rs. 100 each at par, redeemable after five years.
Pass necessary Journal entries in the books of Y Ltd.

Sharma and Verma were partners in a firm sharing profits and losses in the ratio of 3 : 2. Their fixed capitals were ₹ 14,00,000 and ₹ 10,00,000 respectively. The partnership deed provided for the following:
i. Interest on capital @ 10% per annum.
ii. Interest on drawings @ 12% per annum.
During the year ended 31.03.2023, Sharma withdrew ₹ 2,00,000 and Verma withdrew ₹ 1,00,000. After preparing the accounts for the year ended 31.03.2023, it was realised that interest on capital was not allowed and interest on drawings was not charged.
Showing your working notes clearly pass necessary journal entries in the books of the firm to rectify the above error.

The partnership agreement between Maneesh and Girish provides that:
i. Profits will be shared equally;
ii. Maneesh will be allowed a salary of ₹400 p.m;
iii. Girish who manages the sales department will be allowed a commission equal to 10% of the net profits, after allowing Maneesh's salary;
iv. 7% interest will be allowed on partner's fixed capital;
v. 5% interest will be charged on partner's annual drawings;
vi. The fixed capitals of Maneesh and Girish are ₹1,00,000 and ₹80,000, respectively. Their annual drawings were ₹16,000 and ₹14,000, respectively. The net profit for the year ending March 31, 2015, amounted to ₹40,000.
Prepare firm's Profit and Loss Appropriation Account.

Aakash and Anushka were partners in firm sharing profits and losses in the ratio of 4 : 3. They decided to dissolve the firm on 1st May 2023. From the information given below, complete Realisation Account, Partners' Capital Accounts and Bank Account:

REALISATION ACCOUNT
Dr.			Cr.
Particulars		₹	Particulars		₹
To Sundry Assets:			By Sundry Liabilities:
Machinery		5,60,000	Creditors		40,000
Stock		90,000	Aakash's Wife's loan		25,000
Debtors		55,000	By Bank
To Bank:			Machinery		4,80,000
Creditors		______	Debtors		10,000
To Aakash's Capital A/c:			By Aakash's Capital A/c:
Aakash's Wife's loan		34,000	Stock	1,28,000
To Anushka's Capital A/c: Realisation Expenses		7,000	Typewriter	70,000	1,98,000
To Profit transferred to:			By Anushka's Capital A/c:
Aakash's Capital A/c	4,000		Debtors		40,000
Anushka's Capital A/c	3,000	7,000
		7,93,000			7,93,000

PARTNERS' CAPITAL ACCOUNTS
Dr.			Cr.
Particulars	Aakash (₹)	Anushka (₹)	Particulars	Aakash (₹)	Anushka (₹)
To Realisation A/c	______	______	By	______	______
To Bank A/c	4,00,000	4,50,000	By	______
			By	______	______
	______	______		______	______

BANK ACCOUNT
Dr.		Cr.
Particulars	₹	Particulars	₹
To Balance b/d	______	By Realisation A/c	______
To Realisation A/c	4,90,000	By Aakash's Loan A/c	4,000
		By Aakash's Capital A/c	4,00,000
		By Anushka's Capital A/c	______
	______		______

Royal Ltd. invited applications for issuing 2,00,000 equity shares of ₹ 10 each at a premium of 25% payable with application. Applications for 4,50,000 shares were received. Applications for 1,00,000 shares were rejected and money refunded. Pro-rata allotment was made to the remaining applicants. The amount per share was payable as follows:
On Application: ₹ 4 per share including premium
On Allotment: ₹ 3.50 per share
Balance on 1^st and Final Call.
Excess application money received with applications was adjusted with sums due on allotment.
Application money in excess of sums due on allotment, if any, was refunded. Raghu, who had applied for 7,000 shares failed to pay allotment money. His shares were forfeited immediately after allotment. Afterwards the first and final call was made. Nandan, who had applied for 10,500 shares, failed to pay the first and final call. His shares were also forfeited. All the forfeited shares were reissued at ₹ 11.50 fully paid up, to Meeta.
Pass necessary journal entries for the above transactions in the books of Royal Ltd.

Ravi Ltd. acquired running business of Amit Ltd. having assets of ₹ 10,00,000 and liabilities of ₹ 2,50,000. 9% Debentures of ₹ 100 each were issued for the acquisition of business at a premium of ₹ 20 per debenture. The company issued 10,000,8% Debentures of ₹ 100 each redeemable at premium of ₹ 20 per debenture after 5 years. You are required to pass the Journal entries for the above transactions.

Prem, Kumar and Aarti were partners sharing profits in the ratio of 5 : 3 : 2. Their Balance Sheet as at 31^st March, 2019 was as under:

Balance Sheet of Prem, Kumar and Aarti
as at 31st March, 2019
Liabilities		₹	Assets	₹
Capitals:			Building	25,000
Prem	30,000		Plant and Machinery	15,000
Kumar	20,000		Investments	10,000
Aarti	20,000	70,000	Debtors	10,000
General Reserve		8,000	Stock	5,000
Investment Fluctuation Reserve		2,000	Cash	25,000
Sundry Creditors		10,000
		90,000		90,000

On the above date, Kumar retired. The terms of retirement were:
i. Kumar sold his share of goodwill to Prem for ₹ 8,000 and to Aarti for ₹ 4,000
ii. Stock was found to be undervalued by ₹ 1,000 and building by ₹ 7,000
iii. Investments were sold for ₹ 11,000.
iv. There was an unrecorded creditor of ₹ 7,000.
v. An amount of ₹ 30,000 was paid to Kumar in cash which was contributed by Prem and Aarti in the ratio of 2 : 1. The balance amount of Kumar was settled by accepting a Bill of Exchange in favour of Kumar.
Prepare the Revaluation Account, Capital Accounts of partners and the Balance Sheet of the reconstituted firm.

Following was the Balance Sheet of A and B who sharing profits in 2 : 1 as at 31st March, 2021

Balance Sheet
Liabilities		Rs.	Assets	Rs.
Creditors		32,950	Cash	600
Capitals:			Debtors	4850
A	15,000		Stock	10,000
B	10,000	25,000	Machinery	17,500
			Building	25,000
		57,950		57,950

C admitted as a partner on the following terms:
a. C was to bring in Rs.7,500 as capital and Rs. 3,000 as his 1/4th share of goodwill.
b. Stock and Machinery were to be reduced by 5%.
c. A provision was to be created in respect of Debtors Rs. 375.
d. Building was to be appreciated by 10%.
Prepare Revaluation Account, Capital Account and Balance Sheet after admission.

i. Sonu Ltd., forfeited 800 shares of ₹ 10 each, ₹ 7.50 paid, for non-payment of Final Call of ₹ 2.50 per share. Out of these, 600 shares were re-issued as fully paid up in such a way that ₹ 2,100 were transferred to capital reserve. Pass necessary journal entries.
ii. X Ltd., forfeited 800 shares of ₹ 10 each, ₹ 7.50 called-up, for non-payment of First Call of ₹ 2.50 per share. Out of these, 600 shares were re-issued for ₹ 6 per share as ₹ 7.50 paid up. Pass necessary journal entries.
iii. 400 shares of ₹ 10, on which ₹ 8 has been called and ₹ 6 has been paid, are forfeited. Out of these, 300 are re-issued for ₹ 7 as fully paid. Pass necessary journal entries.

payment of bonus to the employees by an insurance company is which type of activity?
i. Operating Activity
ii. Investing Activity
iii. Financing Activity
iv. Both operating and Financing Activity

Koval Ltd. is a financing company. Under which activity will the amount of interest paid on a loan settled in the current year be shown?
i. Investing Activities
ii. Financing Activities
iii. Both Investing and Financing Activities
iv. Operating Activities

Fly Ltd, a stock broker, purchased 5,000 shares of Tata Housing Ltd. It is:

On the basis of following data, the cost of revenue from operations by a company will be:
Opening Inventory ₹ 70,000; Closing Inventory ₹ 80,000; Inventory Turnover Ratio 6 Times.

Which of the following will not covered under finance cost?
i. Discount on issue of debentures written off
ii. Interest paid on bank overdraft
iii. Bank charges
iv. Premium payable on redemption of debentures written off

The current ratio of Y Ltd is 2 : 1. State with reason, which of the following transactions would (a) increase, (b) decrease (c) not change the ratio.
i. Trade receivables included debtors of ₹ 40,000 which were received earlier.
ii. Company purchased furniture of ₹ 45,000. The vendor was paid by the issue of equity shares of ₹ 10 each at par.

State under which major headings and sub-headings the following items will be presented in the balance sheet of a company as per Schedule III of the Companies Act 2013.
i. Calls in Advance.
ii. Accrued Interest on Calls in Advance.
iii. Provision for Retirement Benefits
iv. Stores and Spares.
v. Capital Work in Progress.
vi. Design
vii. Securities Premium.

From the following information obtained from the books of Vichar Ltd., prepare a Comparative Statement of Profit and Loss for the year ending 31^st March, 2019;

Particulars	2018-19	2017-18
Revenue from operations	300% of cost of materials consumed	200% of cost of materials consumed
Cost of materials consumed	₹ 4,00,000	₹ 2,00,000
Other expenses	20% of cost of materials consumed	20% of cost of materials consumed
Tax rate	50%	50%

From the following Balance Sheet of Vehalna Steel Ltd. as at 31st March 2017 and 31st March 2016. Prepare Cash Flow Statement:

Particulars	Note No.	31st March 2017	31st March 2016
I EQUITY AND LIABILITY
Share holders fund
Share Capital	1	700000	500000
Reserves and surplus	2	250000	325000
Non Current Liabilities
Long Term Borrowings	3	200000	250000
Current Liabilties
Short Term Provisions	4	74000	49000
		1224000	1124000
Assets
Non Current asset
Fixed Asset
Machinery		500000	300000
Non current investments		200000	140000
Current asset
Invesntories		150000	200000
Trade receivables		204000	174000
Cash		170000	310000
		1224000	1124000

Share capital
Equity Share capital	600000	300000
12% preferance share capital	100000	200000
	700000	500000
Reserve and surplus
General Reserve	135000	375000
Surplus	115000	-50000
Long Term Borrowings
9% Debenturs	200000	250000
Short Term Provisions
Proposed Dividend	24000	24000
Provision for Tax	50000	25000
	74000	49000

Additional Information
i. Machinery Costing 100000 on which Depreciation charged was 70000 was sold at a profit of 20% on book value. dep charged during the year amounted to 70000.
ii. Preference shares redeemed at par on 31st march 2017
iii. Debentures were redeeemed on Jan 1, 2017 and equity shares were issued on april 1,2016
iv. Income tax 45000 was provided
v. Non current investments costing 60000 were sold at a profit of 20%
vi. The company declares and paid interim dividend on equity shares 40 per share out of generl reserve. It did not propose final dividend on equity shares.

Assertion (A): A company may forfeit the shares for non-payment of calls amount depend upon the Articles of Association of the company.
Reason (R): Shares can be forfeited only if it is allowed by the Articles of Association of the company.

Assertion (A): Partnership is a business entity which is not separate from its partners in any circumstances.
Reason (R): Partners are mutual agents of each other so far as the business of the firm is concerned.