Answer Key Paper - 1

Q. No. Marks
EXPECTED ANSWER / VALUE POINTS

PART A
(Accounting for Partnership Firms and Companies)

1. Q. Atul, Beena and Sita were partners in a firm….

Ans. (B) [Link] 1 mark

OR
OR

Q. Rushil and Abheer were partners in a firm….

1 mark
Ans. (C) [Link]

2. Q. Abhay, Boris and Chetan were partners in a firm….

Ans. (A) ₹17,500 1 mark

3. Q. Aavya, Mitansh and Praveen were partners in a firm.

Ans. (D) ₹15,000 1 mark

4. Q. Piyush, Rajesh and Avinash were partners in a firm…

Ans. (D) Old partners in sacrificing ratio 1 mark

5. Q. Alex, Benn and Cole were partners in a firm…

Ans. (A) ₹75,000 1 mark

6. Q. Assertion(A): Each partner is a principal….

Ans. (B) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of
Assertion (A). 1 mark

Read the following………………………..

7. Q. The amount of interest on capital…

Ans. (D) ₹30,000 1 mark

8. Q. Babita’s share in profit….

1 mark
3
 Ans. (C) Nil

9. Q. Alfa Ltd. invited applications for….

Ans. (D) ₹26,00,000 1 mark

10. Q. Reserve capital is that part…

Ans. (C) Uncalled 1 mark

11. Q. Xeno Ltd. issued 25,000 equity shares….

Ans. (C) ₹13,500 1 mark

12. Q. Assertion (A): Irredeemable debentures are also known as…

Ans. (A) Both Assertion (A) and Reason (R) are correct and reason (R) is the correct explanation of
Assertion (A). 1 mark

13. Q.(a) Money received in advance from shareholders…

Ans. (B) Credited to calls in advance account 1 mark

OR
OR

(b) An offer of securities or invitation….

Ans (C) Private placement of shares 1 mark

14. Q. (a) A share of ₹100 on which ₹80 is received….

Ans. (D) ₹20 1 mark

OR
OR

(b) Shiv Ltd. forfeited 500 shares of 10 each….

Ans. (A) ₹3,000 1 mark

4
15. Q. (a) Dan, Elf and Furhan were partners in a firm….

Ans.
Date Particulars Dr. Amount Cr. Amount
(₹) (₹)
1 mark
(C) Furhan’s Capital A/c Dr. 27,000
To Dan’s Capital A/c 27,000

OR OR

(b) Sia, Tom and Vidhi were partners in a firm….

Ans.
Date Particulars Dr. Amount Cr. Amount
(₹) (₹)

(A) Sia’s Capital A/c Dr. 30,000

Tom’s Capital A/c Dr. 20,000
Vidhi’s Capital A/c Dr. 10,000
To Profit & Loss A/c 60,000 1 mark

16. Q. (a) Anju, Divya and Bobby were partners in a firm….

Ans. (C) 3:1 1 mark

OR
OR

Q. (b) Mita, Veena and Atul were partners in a firm….

Ans. (B) 8:7 1 mark

17. Q. Aamir, Bashir and Chirag were partners in a firm…

Ans.
Gain = New share – Old Share
(½ )
Aamir’s Gain= 1/ 3 - 3/8 = -1/24 (sacrifice)

Bashir’s Gain = 2/3 - 3/8 = 7/24 (gain)

(½ )

5
 In the books of Aamir, Bashir and Chirag
JOURNAL
(2)
Date Particulars L.F. Dr. Amount Cr. Amount
(₹) (₹)
Bashir’s Capital A/c Dr. 1,57,500 =3
To Aamir’s Capital A/c 22,500 marks
To Chirag’s Capital A/c 1,35,000
(Goodwill treated on Chirag’s
retirement without opening
Goodwill account)

18. Q. Pearl and Ruby were partners in a firm….

Ans.
Calculation of Normal Adjusted Profit
Year Profit (₹) Adjustment (₹) Adjusted Profit (₹)
2019-20 35,000 - 35,000
2020-21 25,000 - 25,000
2021-22 32,000 - 32,000
2022-23 33,000 (5,000) 28,000
TOTAL 1,20,000

Average Profit= (Total Adjusted Profit)/ No. of years

= 1,20,000/4 = ₹30,000
(1)

Normal Profit= Capital Employed x Normal Rate of Return

100
= 2,50,000 x 10 = ₹25,000 (½)
100

Super Profit = Average Profit – Normal Profit

= 30,000 - 25,000 = ₹5,000 (½)

Goodwill= Super Profit x No. of years’ purchase (1 )

= 5,000 x 3 = ₹15,000
=3
marks

19. Q. (a) Sunrise Ltd. acquired assets of ₹3,60,000…..

Ans.

6
 In the books of Sunrise Ltd.
JOURNAL
Date Particulars L.F Dr. Amount Cr. Amount
(₹) (₹)
Sundry Assets A/c Dr. 3,60,000
Goodwill A/c Dr. 2,20,000
To Creditors A/c 1,00,000 (1 ½ )
To Moonlight Ltd. 4,80,000
(Assets acquired and liabilities taken over
from Moonlight Ltd)
_______________________________

Moonlight Ltd. Dr. 4,80,000

Discount on Issue of (1 )
Debentures A/c Dr. 20,000
To 9% Debentures A/c 5,00,000
(Purchase consideration settled by issuing
5,000 9% debentures at 4% discount)
_______________________________

Working Note: (1/2 )

No. of debentures = (Purchase Consideration) / Issue Price =3
= 4,80,000/ 96 marks
= 5,000

OR
OR

(b) Q. Grapple Ltd. took over assets of ₹25,00,000…..

Ans. In the books of Grapple Ltd.

JOURNAL
Date Particulars L.F. Dr. Amount Cr. Amount
(₹) (₹)
Sundry Assets A/c Dr. 25,00,000
To Liabilities A/c 5,00,000
To Allore Ltd. 18,00,000 (1 ½ )
To Capital Reserve A/c 2,00,000
(Assets acquired and liabilities taken
over from Allore Ltd.)
___________________________
Allore Ltd. Dr. 18,00,000
To 11% Debentures A/c (1 )
15,00,000
To Securities Premium A/c 3,00,000

7
 (Purchase consideration settled by
issuing 15,000 11% debentures at
20% premium)
___________________________

Working Note: (½)

No. of debentures = (Purchase Consideration) / Issue Price
=3
= 18,00,000/ 120
marks
= 15,000

20. Q. (a) Mohan, Suhaan and Adit were partners in a firm….

Ans Solution:
In the Books of Mohan, Suhaan and Adit
JOURNAL
Date Particulars L.F. Dr. Cr.
Amount Amount
(₹) (₹)
Adit’s Current A/c Dr. 1,000
To Suhaan’s Current A/c 1,000 (1)
(Adjustment entry for Interest on Capital credited at
a higher rate)

Working Notes:
Statement of Adjustment
Particulars Mohan Suhaan Adit
₹ ₹ ₹ (2)
Interest on capital to be debited (6,000) (3,000) (3,000)
Profit to be credited now (₹12,000 in [Link]) 6,000 4,000 2,000
=3
Adjustment - 1,000 (1,000)
marks
Cr. Dr.
(NOTE: Full credit be given if working notes are prepared in any other form)

OR
OR

(b) Q. Manoj and Nitin were partners in a firm….

8
 Ans. In the Books of Manoj and Nitin
JOURNAL
Date Particulars L.F. Dr. Cr.
Amount Amount
(₹) (₹)
Manoj’s Capital A/c Dr. 2,000 (1)
To Nitin’s Capital A/c 2,000
(Adjustment entry for omission of Interest on
Capital and Interest on Drawings)

Working Notes:
Calculation of Opening Capital
Particulars Manoj Nitin
₹ ₹
Closing Capital 90,000 80,000
Add: Drawings 40,000 20,000 (½ )
Less: Profit (₹30,000 in 2:1) (20,000) (10,000)
Opening Capital 1,10,000 90,000

Statement of Adjustment
Particulars Manoj Nitin
₹ ₹
Amount to be credited
Interest on Capital 11,000 9,000
Less: Interest on Drawings (3,000) (2,000)
8,000 7,000
(1½ )
Amount to be debited now (₹15,000 in 2:1) (10,000) (5,000)
Adjustment (2,000) 2,000
Dr Cr
=3
(NOTE: Full credit be given if working notes are prepared in any other form) marks

21. Q. Shivalik Ltd. was registered with an authorised capital….

Ans. Shivalik Ltd.

BALANCE SHEET (extract)
As at ……
Particulars Note Amount
No. (₹)
I Equity and Liabilities
1. Shareholders’ Funds
(a) Share Capital 1 4,68,000 (1)

9
 Notes to Accounts:
Particulars Amount
₹
1. Share Capital
Authorised Capital
1,00,000 equity shares of ₹10 each 10,00,000 (1)

Issued Capital
50,000 equity shares of ₹10 each 5,00,000 (1 )

Subscribed Capital
Subscribed & fully paid-up
46,000 equity shares of ₹10 each 4,60,000
(1)
Add: Share Forfeiture A/c 8,000
4,68,000
=4
marks

22. Q. Archana, Vandana and Arti were partners in a firm….

Ans.
Dr Realisation A/c Cr
Particulars Amount Particulars Amount
₹ ₹
To Investments A/c 80,000 By Creditors A/c (½) 60,000
To Plant A/c 1,00,000
To Stock (½) 40,000 By Bank A/c (½)
To Debtors A/c 50,000 Debtors 40,000
Stock 50,000
To Bank (½) 60,000 Plant 60,000 1,50,000
To Arti’s Capital A/c (½) 20,000
By Vandana’s capital A/c (½) 18,000
By Archana’s capital A/c (½) 54,000

By Loss transferred to Partners’

Capital A/c: (½)
Archana 34,000
Vandana 20,400
Arti 13,600 68,000 =4
3,50,000 3,50,000 marks

23. Q. Azhar, Sumit and Robit were partners in a firm….

10
Ans.
Dr. Robit’s Capital A/c Cr.
Particulars Amount Particulars Amount
₹ ₹
To Robit’s Executor’s A/c / Legal 41,650 By Bal b/d 20,000 (½)
Representatives A/c (½) By General Reserve A/c 12,000 (1)
By Interest on Capital A/c 500 (1)
By Azhar’s Capital A/c 6,300 (1)
By Sumit’s Capital A/c 2,100 (1)
By P&L Suspense A/c 750 (1)

41,650 41,650
=6
marks

Working Notes:
(i) Goodwill = 3 x 56,000 = 42,000
4
Robit’s Share in firm’s Goodwill = 42,000 x 1/5 = 8,400
Gaining ratio between Azhar and Sumit = 3:1

(ii) Robit’s Share in the Profit upto the date of death = 15,000 x 1/5 x 3/12
= 750
NOTE: No marks to be awarded for the working note .

11
24. Q. on 1st April, 2022, Zubian Ltd. issued….

Ans. (a) Books of Zubian Ltd.

JOURNAL
Date Particulars L.F Dr. Amount Cr. Amount
(₹) (₹)
2022 (i)
Apr 1 Bank A/c Dr. 10,60,000
To Debenture Application & 10,60,000
Allotment A/c (1)
(Application money received on 10,000, 7%
Debentures)
_______________________________
Apr 1 (ii)
Debenture Application &
Allotment A/c Dr. 10,60,000
Loss on issue of Issue of
Debentures A/c Dr. 40,000
To 7% Debentures A/c 10,00,000 (2)
To Securities Premium A/c 60,000
To Premium on Redemption of 40,000
Debentures A/c
(Debentures issued at 6% premium,
redeemable at 4% premium on redemption)
________________________________
(iii)
2023
Securities Premium A/c Dr.
Mar 31 40,000
To Loss on Issue of Debentures A/c
40,000
(Loss on issue of debentures written off) (1)
________________________________

(b)
Dr Loss on Issue of Debentures A/c Cr
Date Particulars Amount Date Particulars Amount
₹ ₹
1.4.22 To Premium on 40,000 31.3.23 By Securities 40,000
Redemption of Premium A/c
Debentures A/c (2)
40,000 40,000

=6
marks

12
25. Q. (a) Qumtan Ltd. invited applications….

Ans. In the Books of Qumtan Ltd.

JOURNAL
Date Particulars L.F Dr. Cr. Amount
Amount (₹)
(₹)
(i)
Bank A/c Dr. 12,80,000
To Equity Share Application and 12,80,000
Allotment A/c
(Application and allotment money received on
1,60,000 shares)
________________________________
(ii)
Equity Share Application and
Allotment A/c Dr. 12,80,000
To Equity Share Capital A/c 5,00,000
To Securities Premium A/c 3,00,000
To Bank A/c 4,80,000
(Application money transferred to Share Capital
and Securities Premium; excess amount returned)
________________________________
1x6
(v)
Equity Share First & Final Call A/c Dr.
8,00,000
To Equity Share Capital A/c
5,00,000
To Securities Premium A/c
3,00,000
(Share First & Final Call money due)
________________________________
(vi)
Bank A/c Dr.
7,98,400
Calls- in- Arrears A/c Dr.
1,600
To Equity Share First & Final Call A/c
8,00,000
(Share first and final call money received except
on 200 shares)

Alternatively
Bank A/c Dr. 7,98,400
To Equity Share First & Final Call A/c 7,98,400
(Share first and final call money received except
on 200 shares)
________________________________________
(vii)
Equity Share Capital A/c Dr. 2,000
Securities Premium A/c Dr. 600
To Calls- in- Arrears A/c 1,600
To Share Forfeiture A/c 1,000

13
 (200 equity shares forfeited for non-payment of
first and final call)

Alternatively
Equity Share Capital A/c Dr. 2,000
Securities Premium A/c Dr. 600
To Equity Share First and Final Call A/c 1,600
To Share Forfeiture A/c 1,000
(200 equity shares forfeited for non-payment of
first and final call)
_____________________________________
(viii)
1,000
Bank A/c Dr.
1,000
Share Forfeiture A/c Dr.
2,000
To Equity Share Capital A/c
(200 forfeited shares reissued) =6
_____________________________________ marks

OR
OR

(b) Printkit Limited invited applications…..

Ans
In the books of Printkit Limited
JOURNAL
Date Particulars L.F Dr. Amount Cr. Amount
(₹) (₹)
(i)
Bank A/c Dr. 4,50,000
(½)
To Equity Share Application A/c 4,50,000
(Application money received on 1,50,000shares)
___________________________________
(ii)
Equity Share Application A/c Dr. 4,50,000
To Equity Share Capital A/c 2,40,000
To Equity Share Allotment A/c 1,40,000
To Calls-in- Advance A/c 40,000 (1½)
To Bank A/c 30,000
(Application money transferred to Share Capital
and excess amount adjusted to Share Allotment
A/c and calls-in-advance; application money on
10,000 shares refunded)
________________________________
(iii)
Equity Share Allotment A/c Dr. 1,60,000

To Equity Share Capital A/c 1,60,000 (1)

(Allotment money due on 80,000 shares)

14
 ________________________________
(iv)
Bank A/c Dr. 20,000
To Equity Share Allotment A/c 20,000
(1)
(Allotment money received after adjusting
excess application money)
___________________________________
(v)
Equity Share First & Final Call A/c Dr. 4,00,000
To Equity Share Capital A/c 4,00,000 (1)
(Share First & Final Call money due)
___________________________________
(vi)
Bank A/c Dr. 3,60,000
Calls- in- Advance A/c Dr. 40,000
To Equity Share First & Final Call A/c
(1)
4,00,000
(Share first and final call money received after
adjusting calls- in- advance)
___________________________________
=6
marks

26. Q. (a) Shubhi and Revanshi were partners in a firm….

Ans.
Dr. REVALUATION A/c Cr.
Particulars Amount Particulars Amount
₹ ₹
To Fixed Assets A/c ½ 27,000 By Stock A/c ½ 7,000
By Loss transferred to
Partners Capital A/c: ½ (1½ )
Shubhi- 12,000 20,000
Revanshi- 8,000

27,000 27,000

15
Dr. PARTNERS’ CAPITAL A/c Cr.
Particulars Shubhi Revanshi Pari Particulars Shubhi Revanshi Pari
₹ ₹ ₹ ₹ ₹ ₹
To Revaluation 12,000 8,000 By Bal b/d 60,000 32,000
(4½ )
A/c ½ ½
To Cash A/c ½ 6,000 By General 18,000 12,000
To Bal c/d 1 Reserve A/c
90,000 60,000 50,000 ½
By Cash A/c 50,000
½
By Premium
for Goodwill 30,000 20,000
A/c ½ =6
By Cash A/c marks
4,000
½
1,08,000 68,000 50,000 1,08,000 68,000 50,000

OR
OR
(b)Rishi, Shashi and Trishi were partners in a firm….

Dr. REVALUATION A/c Cr.

Particulars Amount Particulars Amount
₹ ₹
To Fixed Assets A/c ½ 24,000 By Stock A/c ½ 6,000
(1 ½ )
By Loss transferred to
Partners Capital A/c: ½
Rishi- 9,000
Shashi- 3,000 18,000
Trishi- 6,000

24,000 24,000

Dr. PARTNERS’ CAPITAL A/c Cr.

Particulars Rishi Shashi Trishi Particulars Rishi Shashi Trishi
₹ ₹ ₹ ₹ ₹ ₹
To Revaluation 9,000 3,000 6,000 By Bal b/d ½ 36,000 30,000 20,000
A/c ½ By General (4 ½ )
To Stock A/c ½ 26,000 Reserve A/c ½ 15,000 5,000 10,000
To Shashi’s 1,800 1,200 By Rishi’s Capital
Capital A/c ½ A/c ½
1,800
To Shashi’s Loan By Trishi’s Capital
9,000
A/c ½ A/c ½
40,200 22,800 1,200
To Bal c/d ½

51,000 38,000 30,000 51,000 38,000 30,000

=6
marks

16
 PART B
OPTION - I
(Analysis of Financial statements)

27. Q. The quick ratio of a company is …..

1 mark
Ans. (B) Sold goods on credit

28. Q. Identify which of the following transactions….

Ans. (D) Amount received from debtors 1 mark

29. Q. (a) Analysis of Financial Statements is useful…

Ans. (B) Trade Payables 1 mark

OR
OR

(b)______________________ratios are calculated to determine…..

1 mark
Ans. (C) Solvency

30. Q. (a) The transaction ‘Acquisition of machinery……

Ans. (D) No flow of cash 1 mark

OR
OR
(b)The transaction ‘ Capital Gains tax….

Ans. (B) Investing Activities 1 mark

31. Q. Classify the following items under major heads….

Ans.
Item Major Heads Sub heads
½ mark
(a) Long Term Loans Non –Current Liabilities Long Term Borrowings each
from Bank
(b) Loose Tools Current Assets Inventories
=3
(c) Outstanding Current Liabilities Other Current Liabilities marks
Expenses

17
32. Q. From the given information, calculate …..

Ans.
(a) Quick Ratio= Quick Assets ½
Current Liabilities

Quick assets = Current Assets – Inventory

= 4,00,000 – 1,00,000
= ₹3,00,000 ½

Quick Ratio = 3,00,000 = 1.5:1 ½

2,00,000 (1 ½ )

(b) Inventory Turnover Ratio = Cost of Revenue from Operations ½

Average Inventory

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

= 10,00,000 – 2,00,000
= ₹ 8,00,000 ½

Inventory Turnover Ratio = 8,00,000 = 8 times ½ (1 ½ )

1,00,000
=3
marks
33. Q. (a) From the given Balance Sheet of Geox Ltd., ………

Ans. Geox Ltd

Common size Balance Sheet
As at March 31, 2022 and March 31, 2023
Particulars Absolute Amounts Percentage of Total Assets
31.3.2022 31.3.2023 31.3.2022 31.3.2023
(₹) (₹) (%) (%)
I - Equity and Liabilities:
1. Shareholders’ Funds
(a) Share Capital 2,50,000 4,00,000 50 50 (½)
2. Non- Current Liabilities
(a) Long Term Borrowings 1,50,000 2,00,000 30 25 (½)
3. Current Liabilities
(a) Trade Payables 1,00,000 2,00,000 20 25 (½)
TOTAL 5,00,000 8,00,000 100 100
(½)
II – Assets:
1. Non – Current Assets
(a) Fixed Assets/Property, Plant
and Equipment and Intangible
Assets
3,50,000 4,00,000 70 50 (½)
2. Current Assets
18
 (a) Inventories 70,000 2,00,000 14 25 (½)
(½)
(b) Trade Receivables 80,000 2,00,000 16 25
(½)
TOTAL 5,00,000 8,00,000 100 100
=4
marks

OR OR

(b)Q. From the following information, prepare a Comparative Statement of Profit and Loss…

Ans. Comparative Statement of Profit & Loss

For the year ended March 31, 2023
Particulars 2021- 22 2022-23 Absolute Percentage
(₹) (₹) Increase or Increase or
Decrease (₹) Decrease(%)
I Revenue from Operations 8,00,000 10,00,000 2,00,000 25 (½)
II Less: Expenses
(½)
Employee Benefit Expenses 1,00,000 2,50,000 1,50,000 150
(½)
Other Expenses 4,00,000 5,50,000 1,50,000 37.5

III Profit before Tax 3,00,000 2,00,000 (1,00,000) (33.3) ( 1)

IV Less: Tax @ 50% 1,50,000 1,00,000 (50,000) (33.3) (½)
V Profit after Tax 1,50,000 1,00,000 (50,000) (33.3) (1)
=4
marks

19
34. Q. From the following information….

Ans.
Cash Flows from Operating Activities
Particulars Details Amount
₹ ₹
Net Profit before Tax and Extraordinary items 8,50,000
Adjustments for Non- Cash and Non- operating items
Add: Depreciation
1,40,000 (½ )
Loss on Sale of Machinery
30,000 (½ )
Less: Gain on Sale of Investments
(20,000) (½ )
Dividend Received on Investments (½ )
(6,000)
Operating profit before Working Capital changes
9,94,000

Add: Increase in Current Liabilities

Less: Increase in Current Assets 1,61,000 (½ )
Decrease in Current Liabilities (6,00,000) (½ )
Cash generated from operations (64,000) (½ )
Less: Income Tax paid 4,91,000
(1,18,000) (½ )
Net cash inflows from Operating Activities
3,73,000 (1)

Calculation of Net Profit before Tax and Extraordinary items

Surplus = 6,28,000
(1)
+ Provision for Tax = 1,50,000
+ Proposed Dividend = 72,000 =6
8,50,000 marks