I

HALF YEARLY EXAMIN ATION , OCTOBER 2022

SUBJECT: ACCOUN T AN CY (055)

Grade: 12 Time: 3 hours

Max.Marks:80
Date:10/10/22

PART A - Accounting for Partnership Firms

Naresh and Namit were partners sharing profits and losses in the ratio of 2: I. Nimisha was I
admitted for 25% share of profits. Nimisha was unable to bring her share of goodwill premium
.
meas. h The1ourn
. al entrv recorded £or goodWI·11 1oremmm
. . given
1s . be!ow:
Date Particular LF Debit Credit
Nimisha's Current Ne. Dr. 45,000
To Naresh' s Capital Ne. 27,000
To Namit's Capital Ne 18,000
(Being entry for goodwill
treatment oassed)
The new profit-sharing ratio ofNaresh, Namit and Nimesha will be:
a) 91:71:18
b) 31:14:15
c) I :2:3
d) 5:3: 2

2 Assertion (A): - Interest on Loan by partner is shown in Profit and Loss Ne. 1
Reason (R): - Interest on Loan by partner is a charge against profits and is to be provided at
fixed rate in absence of any agreement.
a) (A) is correct but (R) is wrong
b) Both (A) and (R) are correct, but (R) is not the correct explanation of (A)
c) Both (A) and (R) are incorrect.
d) Both (A) and (R) are correct, and (R) is the correct explanation of (A)

3. Under _ _ _ method, goodwill is the excess of capitalized value of business over 1

actual capital employed.
a) Capitalization of Super profit
b) Capitalization of Average profit
c) Super profit
d) Average profit

OR

If at the time of admission if there is some unrecorded liability, it will be _ _ _ _ _to

 -Account
-a)-Debited, Revaluation
b) Credited, Revaluation
c) Debited, Goodwill
d) Credited, Partners' Capital

4 Akhil, Bikram and Pawan were partners in a firm sharing profits and losses in the ratio of 4:
3: 2. With effect from 1st April 2022, they agreed to share future profits and losses in the ratio
of 2: 4: 3. Their Balance Sheet shows a balance of advertisement suspense of~ 1,00,000 and
a balance of~ 80,000 in the Workmen Compensation Fund. There was a claim on account of
workmen compensation of ~70,000. Partners have decided, not to show revised values in the
balance sheet and to pass an adjusting entry for it.

Which of the following is the correct treatment of the above?

a) Akhil's Capital Ale. Dr. 10,000

Bikram's Capital Ale. 10,000
To Pawan's Capital Ale 20,000
b) Akhil's Capital Ale. Dr. 20,000
To Bikram's Capital Ale. 10,000
To Pawan's Capital Ale 10,000
c) Bikram's Capital Ale. 10,000
Pawan's Capital Ale 10,000
To Akhil's Capital Ale. 20,000
d) Akhil's Capital Ale. Dr. 1,000
To Bikram's Capital Ale. 1,000
To Pawan's Capital Ale 2,000

OR

Deepika and Tina are partners sharing profits and losses in the ratio of 5:4 with the capitals
oH 25,00,000 and~ 30,00,000 respectively. On 1st December 2021, Deepika and Tina
granted loans of~ 45,000 and 55,000 respectively to the firm. Determine the amount of
loss to be borne by each partner for the year ended 31st March 2022 if the loss before
interest for the year amounted to~ 16,000.
a) Share of Loss Deepika-~ 8,000 Tina-~ 6,000
b) Share of Loss Deepika -~ 10,000 Tina - 8,000
c) Share of Loss Deepika-~ 12,000 Tina-~ 4,000
d) d) Share of Loss Deepika 9,000 Tina-~ 5,000

5 Aan and Mohan are partners sharing profits and losses in the ratio of 3:2. The firm maintains 1
fluctuating capital accounts and the balance of the same as on 31st March 2022 is 4,00,000
and t 3,50,000 for Aan and Mohan respectively. Drawings during the year were 75,000
each. As per the partnership Deed, Interest on capital @ 10% p.a. on Opening Capital has been
allowed to them. Calculate the opening capital of Aan given that the divisible profits during
the year 2021-22 wast 1,57,500.

z.
I a)
b)
c)
3,34,590
3,45,909
3,80,500
d) 3,45,990

6 A and B are partners sharing profits in the ratio of 3:2. They admit C for ¼ share who
contributed~ 30,000 for his share of goodwill. The total value of the goodwill of the finn will
be - - - - - - -
a) n ,20,000
b) ~7,500
c) ~30,000
d) ~15 ,000
OR
At what rate is interest payable on the amount remaining unpaid to the executor of deceased
partner, in absence of any agreement among partner's, when s(he) opts for interest and not
share of profit.
a) 10%
b) 4% \-
c) 16%
d) 6%

7 A and Bare partners. A's share of profit is ~1,25 , 000.The total interest on partner's Drawing 1
is 4,000. A' salary t 4,000 per quarter and B's salary is t 40,000 per annum.
Calculate net divisible profit as per Profit & Loss Appropriation account.
a) tl 12,500
b) n25,ooo
c) ~250,000
d) t85,000
8 Xylo, Yohan and Zia are partners in a finn with capital balances oH 1,50,000, t 2,10,000 and
2,40,000 respectively on 31st March, 2022. Xylo decides to retire from the firm on 31st
March, 2022. With the help of the information provided, calculate the amount to be paid to
Xylo on his retirement. There existed a general reserve of 22,500 in the balance sheet on
that date. The goodwill of the firm was valued at t 90,000.
Gain on revaluation was ~72,000.
a) t2,65,500
b) tz,l I,500
c) ~l,96,125
d) t2,7I,500
OR
Sheilah, Sheena and Secna are partners sharing profits in the ratio of 5:3:2. Sheilah's capital
is~ 5,00,000 and Sheena's capital is ~3 ,00,000. Seena has not invested any amount as capital
but she alone manages the whole business. Seena wants 60,000 p.a. as Interest on capital and

.3
 her profit share, though the deed is silent. Firm earned a profit of N,50,000. How much will
each partner receives as an appropriation of profits?

a) At 1,80,000; B t l ,80,000; Ct 1,80,000

b) At 2,70,000; B t 90,000; Ct 90,000
c) At 2,25,000; B t 1,35,000 and Ct 90,000
d) A t 150,000; B t 150,000 and C t 150,000

Read the foUowing hypothetical situation, Answer Question N o. 9 and 10

Purvi and Rachana are partners in a bamboo amenity making firm . Their capital_s ~ere t
5,00,000 and t 10,00,000 respectively. The firm allowed Purvi to get a comm1ss~ol1: of
I 0% on the net profit before charging any commission and Rachana to get a COJDJlllSSIOD
of 10% on the net profit after charging all commission. Following is the Profit and Loss
Appropriation Account for the year ended 31st March 2022.

Dr. Pro fit an d Loss Amoropnat10n A ccount tior th e vear ended 31 st Marc h 2022 C r.
Particulars Amt Particulars Amt
To Purvi capital (commission) 88,000 By profit and loss -------------
L__xI0/100)
To Rachana capital
(commission)
To profit transferred to
Purvi capital
Rachana capital
------- -- -----
9 Rachana's commission will be: -
• a) t72,000
b) t88,000
c) t79,200
d) t80,000

10 Purvi share of profit will be: -

a) tl,80,000
b) t3,60,000
c) t7,20,000
d) t8,80,000

11 A partners~p firm eai:3ed divisible profit oft 5,00,000, interest on capital is to be provided
to partner 1~ t 30,000, mterest on loan taken from partner is t 50,000 and profit-sharing ratio
of partners 1s 5:3. Sequence the following in correct way.
i. Distribute profits between partners
ii. Charge interest on loan to Profit and Loss Ale
iii. Calculate the Net Profit transfer from Profit & Loss Ale to Profit and Loss
appropriation Ale
1v. Provide interest on capital
 a) i, ii, iii and iv
b) ii, iii, iv and i
c) iii, ii, iv and i
d) ii, iv, iii and i

Vinod andwas
situation Prashant
found are partners, at the time
. of reconstitution of partnership firm, following
: Balance sheet
liabilities Amt Assets Amt
Debtors 18,000
Less : Provision for
Doubtful Debts -2000 16,000
D ebtors 1500 will be wntten off as bad debts and a provision of 5% will be created for bad
and doubtful debts.
What amount of N et Debtors will be shown in the new Balance sheet of the firm?
a) ~16,500
b) ~18,000
c) ~15,675
d) ~16,000

13 Which of the following is not the mode of dissolution of the firm?

a) By mutual agreement
b) On happening of an event
c) Dissolution by court
d) Retirement of a partner

14 Leena and Bindu are partners sharing profits in the ratio of 5:3 They admit Rajni for 116th 1
share in future profits. On the date of admission, Leena's capital was~ 2,20,000 and Bindu's
capital was 80,000. Rajni brings 60,000 as her share of goodwill and she agrees to
contribute to the combined capital of Leena and Bindu after all adjustments. How much capital
will be brought by Rajni?
a) 72,000
b) 60,000
c) 50,000
d) 40,000
15 Calculate the amount of Shiv quarterly drawings for the year ended 31st March 2022, if
interest on drawings is ~1500 and he withdrew a fixed amount in the beginning of each quarter
when Partnership Deed allows interest on drawings@l 2%p.a.
a. 8,000
b. 60,000
c. 7,000
d. f 5,000
OR

5
 Doraemon, a partner withdrew t 3,000 in the b e ~ g of each month and intere~t °'
drawings was calculated as t 1,950 at the end of accountmg year 31 March 2 0 22 - What 1s the
rate of interest on drawings charged?
a 6%p.a
b. 8%p.a
c. l0%p.a
d. l2%p.a

16 Akash and Birbal, who were partners sharing profits and losses in the proportion of 4/7 and
3/7 respectively, decided to dissolve the partnership finn as at 31 st March, 2022. On the _date
of the dissolution Akash' s Capital was 1,25,030 and Birbal's Capital was t2,070. Creditors
amounted to n3 ,l50 and Cash t4520. Remaining assets realized tl ,24,910 and the expenses
of dissolution were t 1,860.
Gain/Loss in the realisation account will be:
a) t 20,820 (Gain)
b) t 22,680 (Gain)
c) t 20,820 (Loss)
d) t 22,680 (Loss)

17 Abigail, Rebecca and Eva were partners in a firm sharing profits and losses in the ratio 3:4:3. 3
Books were closed on 31st March every year. Rebecca died on 28 th February, 2022. As per
the partnership deed Rebecca's executors are entitled to her share of profit till the date of death
on the basis of Sales turnover. Sales for the year ended 31st March 2021 was t 50,00,000 and
profit for the same year wast 5,50,000. Sales show a positive trend of20% and percentage of
profit earning is reduced by 4%.
Journalise the transaction along with the working notes.

18 a
A, Band C were partners in firm. On 1st April, 2021 the balance in their capital accounts 3
stood at t 8,00,000, t 6,00,000 and t 4,00,000 respectively. As per the provisions of the
partnership deed, partners were entitled to interest on capital@ 5% p.a B's share of profit,
including interest on capital was guaranteed at t 80,000 p.a. Any deficiency arising on that
account was to be met by C. The profits of the firm for the year ending 31st March, 2022
amounted to t2,16,000. Prepare Profit and Loss Appropriation Account for the year ending
31st March, 2022.
OR
Ajay and Vinod are partners in the ratio of3:2. Their fixed Capital were t3,00,000 and
t4,00,000 respectively. After the close of accounts for the year it was observed that the
Interest on Capital which was agreed to be provided at 5% p.a. was erroneously provided
at 10%p.a. Pass an adjusting entry for rectifying the error.

19 The Balance Sheet details of Madhu and Vidhi who are sharing profits in the ratio of 2 : 3 as 3
at 31st March, 2022 is as follows: Bills Payable t 1,50,000; Land and Building t3,00,000;
Machinery t2,80,000; Stock t80,000; Debtors after Provision t2,90,000 (3,00,000-10,000);
Bank t50,000. Madhu and Vidhi decided to admit Gayatri as a new partner from 1st April,
2022 and their new profit-sharing ratio will be 2:3:5. Gayatri brought t 4,00,000 as her capital
and her share of goodwill premium in cash.

6
 Following were the adjustments after her admission-
a) Goodwill of the firm was valued at t 3 00 000.
b) Lan~ ~d Building was found undervaiued by t 26,000.
1Provision for d~ubtful debts was to be made equal to 5% of the debtors .
. ) Th~re was a claim oft 6,000 on account of workmen compensation.
Their capital balances after adjustments: Madhu t5,98,000, Vidh.i N, 17,000, Gayathri
N,00,000. Prepare the Balance Sheet of the reconstituted firm.

OR
Kanika, Disha and Kabir were partners sharing profits in the ratio of 2 : I : 1. On 31st March,
2022, their Balance Sheet details are as follows: Trade Creditors t53,000; Employees
Provident Fund t47,000; Bank t60,000;Debtors t 60,000;Stock fl ,00,000;Fixed Assets
n,40,000.
Kanika retired on 1st April, 2022 . For this purpose, the following adjustments were agreed
upon:
a) Fixed Assets were to be increased to f 3,00,000.
b) Stock was to be valued at 120%.
c) Their capital balances after adjustments: Disha? 80,000, Kabir f 60,000, Kanika Loan
?3,00,000.
Prepare the Balance Sheet of the reconstituted firm.
3
20 X and Y are partners in a firm. They admit Z into partnership for equal share. It was
agreed that goodwill will be valued at three years purchase of average profit oflast five
ro 1ts or e ast fi1ve, ears 1were:
years. Pfiiithl
31st 31st 31st
Year 3pt , 315
March March (
March
Ended March March 2022
2019 2020 2021
2018 1,77,000
1,60,000 1,50,000 65,000
Profit (90,000)
Books of Account of the firm revealed that:
(i) The firm had gain (profit) off 50,000 from sale of machinery sold in the year
ended 31st March, 20 I 9. The gain (profit) was credited in Profit and Loss
Account.
(ii) There was an abnormal loss oH 20,000 incurred in the year ended 31st March,
2020 because of a machine becoming obsolete in accident.
(iii) Overhauling cost of second-hand machinery purchased on 1st July, 2020
amounting to ?I,00,000 was debited to Repairs Account. Depreciation is charged
@20% p.a. on Written Down Value Method.
Calculate the value of goodwill.

21 Shabir, David and Charu were partners in a firm supplying school uniforms who shared profits 4
in the ratio of 5:3 :2. Shabir suggested to start supplying low cost school uniforms to the
students who belonged to low income group and admitted to the private schools of the city as
st
per the provisions of Right to Education Act 2009. On I April, 2021 David requested to
increase the share of profit of Charu, a specially ab led partner having good knowledge of cost-
reduction methods. Shabir agreed to it and the new profit-sharing ratio was decided 2:5:3. For
this purpose it was agreed that the goodwill is valued at t76,000. The stock (book value
 N0,000) was to be depreciated by 8%. Creditors am?unting to t900 was not likely to be
claimed. Liability on account of workmen compensat10n amounted to t8,000. Investments
(book value ~38,000) were revalued at N0,000.
Based on the above case study, Answer the following questions:
a. Calculate the Profit /Loss on Revaluation.
b. Find out the sacrificing partner/s and his/her share of sacrifice.
c. Evaluate the amount by which Gaining Partner/s will compensate Sacrificing
partner /s for adjustment of goodwill on account of change in profit sharing
ratio.

22 Adiraj and Karan were partners in a firm sharing profits and losses in the ratio 3: 2. On 31st 4
March, 2022 the firm was dissolved. After the transfer of assets (other than cash in hand and
at bank) and third-party liabilities to the Realization Account, the following information was
provided:
i. Furniture of~ 70,000 was sold fort 68,000 by auction and auctioneer's commission
amounted to t 2,000.
ii. Adiraj ' s loan amounting to ~35,000 was paid.
m . Out of the stock of~ 80,000, Karan 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.
iv. A bills receivable of ~3 ,000 under discount was dishonored as the acceptor had become
insolvent and hence the bill had to be met by the firm.
Pass the necessary journal entries for the above transactions.

23 The Balance Sheet of Sindhu, Rahul and Kamlesh, who were sharing profits in the ratio of 3: 6
3: 4 resoectivelv, as at 31st March, 2022 was as follows :
Liabilities
General Reserve
Assets t
10,000 Cash 32,000
Bills Payable 20,000 Stock
Loan 88,000
24,000 Investments 94,000
Capital A/cs: Land and Building
Sindhu 1,20,000 1,20,000
Sindhu's Loan 20,000
Rahul 1,00,000
Kamlesh 80 000 3,00,000
3,54,000
3,54,000
Smdhu died on 31st July 2022. The partnership deed provided for the following on the
death of a partner:
(a) Goodwill of the firm be valued at two years' purchase of average profits for the last
three years. The average profit which was t80,000.
(b) Sindhu' s share of profit till the date of her death was to be calculated on the basis of
sales. Sales for the year ended 31st March 2022 amounted to t 8,00,000 and that
from 1st April to 31st July 2022 t 3,00,000. The profit for the year ended 31st
March 2022 was t 2,00,000.
(c) Interest on capital was to be provided @6% p.a.
Prepare Sindhu' s Capital Account to be rendered to his executor.
OR
 Naresh and Sukesh are partners with .
Naresh had withdrawn tS0 . capi~s of ~3,00,000 each as on 31st March, 2022.
besides the drawings again;t000 ca ~:mst capital on 1st October, 2021 and also ~1,00,000
capital is to be allowed@ P · Sukesh also had drawings of ,1,00,000. Interest on
0
f
distributed. Pass the journal101/o ~-a e~ profit for the year wast 2,00,000, which is yet to be
entnes 1or mterest on capital and distribution of profit.

24 Sushma, Gautam
On 31st M th~"ka were partners m
h and K . a firm sharmg
. profits in the ratio of 5: 3: 2. 6
arc • 2022 , eu Balance Sheet was as follows:
Balance Sheet of Sushma Gau tamand Kan ika as at 31st March, 2022
Liabilities
'f Assets f
60,000 Cash at Bank 1,40,000
Creditors
Sundry Debtors 1,60,000
Employees' Provident
2,40,000
Fund 40,000 Stock
2,00,000
Profit and Loss Account 1,00,000 Investments
Fixed Assets 3,60,000
Capital: Sushma 3,00,000
Gautam 2,50,000
Kanika 3,50,000 9,00,000
11,00,000
11,00,000
On the above date, Sushma retired and it was agreed that:
(i) Fixed Assets will be reduced to 2,90,000.
(ii) A provision of 5% on debtors for bad and doubtful debts will be created.
(iii) Stock was to be valued at~ 2,18,000. Sushma took over the stock at this value.
(iv) Goodwill of the firm on Sushma's retirement was valued at~ 8,00,000. Sushma's share
of goodwill was treated by debiting Gautam and Kanika's Capital Accounts.
(v) Sushma was paid cash brought by Gautam and Kanika in such a way as to make their
capitals in the profit-sharing ratio and a balance of ~58,000 to be left in the bank.
(vi) Gautam and Kanika will share the future profits in the ratio of 2: 3.
Prepare Revaluation Account and Partners' Capital Accounts of the reconstituted firm.
OR
X and Y were partners in the profit-sharing ratio of 3: 2. Their balance sheet as at March 31,
2022 was as follows:
Balance Sheet as at March 31, 2022
Assets f
Liabilities f
56,000 Plant and Machinery 70,000
Creditors 98,000
General Reserve 14,000 Buildings
Stock 21,000
Capital: 42,000
1,19,000 Debtors
X 7,000 35,000
y 1,12,000 2,31,000 (-) Provision
Cash in Hand 77,000

3,01,000
3,01,000
Z was admitted for 116th share on the following terms:
1. Z will bring 56,000 as his share of capital, but was not able to bring any amount to
compensate the sacrificing partners.
11. Goodwill of the firm is valued at~ 84,000.
 111.Plant and Machinery were found to be undervalued by t 14,000, Building was to
brought up to~ 1,09,000.
1v. All debtors are good.
v. Capitals ofX and Y will be adjusted on the basis of Z ' s share and adjustments will be
done by opening necessary current accounts.

You are required to prepare revaluation account and partners' capital account.

25 Michael, Jackson and John were partners in a firm sharing profits in the ratio of 3: I: I. On 6
31st March, 2021, they decided to dissolve their firm. On that date their Balance Sheet was
as follows:
.
Balance Sheet of Michael, Jackson and John as at 31 3 2021 ..
Liabilities f Assets f
Creditors 11,500 Bank 6,000
Loan 3,500 Debtors 48,400
Capital:
Less: Provision for
Michael 50,000 Doubtful Debts (2400) 46,000
Jackson 25,000 Stock in trade
John 16,000
14,000 89,000 Furniture
2,000
Sundry Assets 34,000
1,04,000 1,04,000
It was agreed that:
1. Michael was to take over Furniture at~ 2,600 and Debtors amounting to t 40,000 at
34,400 and the Creditors oH 10,000 were to be paid by him at this figure.
u. Jackson was to take over all the stock in trade at~ 14,000 and some of the other
Sundry Assets at 28,800 (being 10% less than book value).
m. John was to take over the remaining Sundry Assets at 90% of the book value and
assumed the responsibility for the discharge of the loan.
1v. The remaining debtors were sold to a debt collecting agency for 50% of the book
value. The expenses of dissolution 600 were paid by John.

Prepare Realisation Account and Partners' Capital Accounts.

26 A, B and C are partners in a firm sharing profits in the ratio of 3 :2: I. On 31st March 2019, 6
C retired. The amount payable to C is agreed to be paid in two yearly instalments oH 2,00,000
each including interest @ 10% p.a. on the outstanding balance during the first two years and
the balance including interest in the third year. Books are closed on 31st March every year.
Prepare C ' s Loan Account till it is finally paid.

C's Loan ale

Date Particulars Date Particulars

31-03-20 ? ? 01-04-19 ? ?
? ? 31-03-20 By Interest 45,000

Jo
 I
? ?
31-03-21 ? ? 01-04-20 ? ?
? ? 31-03-21 ? ?

? ?
01-04-21 ? ?
31-03-22 ? ? ?
31-03-22 ?

?
?

PART B - Analysis of Financial Statements

27 Comparison of values of one period with those of another period for the same finn i s _
a) Intra firm comparison
b) Inter firm c.omparison
c) Pattern comparison
d) Trend comparison
OR
Which one of the following is correct?
1. ROI = Net Profit after tax and dividend/ capital employed x 100
ii. Fixed Asset Turnover ratio reflects relationship between revenue from operations
and capital employed.
111. A low Trade Payables Turnover ratio indicates that creditors are not paid in time

a) All are correct

b) i and ii are correct
c) only iii is correct
d) i and iii are correct

28 From the following calculate Operating Profit Ratio

Revenue from Operations ~4,50,000, Gross Profit 25% on Cost, Operating Expenses
t22,500.
a) 15%
b) 10%
c) 5%
d) 20%

29 Why is depreciation added back to Net profit while preparing Cash Flow Statement?
a) Depreciation increases profit but does not impact cash flow, a non-cash expense.
b) Depreciation reduces profit but does not impact cash flow, a non-cash expense.
c) Depreciation reduces profit but does impact cash flow, a cash expense.
d) Depreciation results in no flow of cash as it' s a cash and cash equivalent

II
 OR .
Following are the details for Provision for Tax. If Tax paid during e year is
th 50,000, How
this transaction will be reflected in Cash Flow Statement.
31-03-22 31-03-21
Provision for Tax 70 000 40 000

a) t70,000 will be added to Net Profit and N0,000 will be deducted from Cash
generated from Operations.
b) t40,000 will be added to Net Profit and t70,000 will be deducted from Cash
generated from Operations.
c) t50,000 will be added to Net Profit and t80,000 will be deducted from Cash
generated from Operations.
d) t80,000 will be added to Net Profit and {50,000 will be deducted from Cash
generated from Operations.

30 From the following information find out the outflow of Cash when Non-current Investments
costing t60,000 were sold at a profit of 20%.
31st March, 2022 31st March, 2021
Non-current Investment t 2,00,000 t 1,40,000
a) t72,000
b) ~l ,20,000
c) ~12,000
d) 60,000

3I Pineapple Clothing is a US-based clothing manufacturer of women's and children's apparel, 3

known for its unique prints and designs intended for everyday use and for special occasions
is interested to know the short-tenn solvency of Ajio, an E-commerce company, on whose e-
platform Pineapple Clothing are going to sell their clothes.
Identify the party interested in the Financial statement analysis of Ajio in the above situation.
Explain any two other parties interested in Financial Statement Analysis.

32 Under which major heads and sub-heads will the following items be presented in the 3
Balance Sheet of the company as per Schedule III, Part I of the Companies Act, 2013?
1. Bank Overdraft
ii. Subsidy Reserve
iii. Capital Redemption Reserve
iv. Mining Rights
v. Patents
vi. Debit balance in the Statement of Profit and Loss

33 On the basis of the following infonnation calculate:

4
(i) Debt to Equity Ratio; and
(ii) Working Capital Turnover Ratio.
Information: .
Revenue from Operations: Cash Sales - t 40,00,000; Credit Sales - t 20,00,000;
 Cost of Revenue from Operations - 35,00,000; Other Current Assets - t 8,00,000;
Current Liabilities - t 4,00,000; Share Capital - t 17,00,000; 6% Debentures - t 3,00,000;
9%Loan from Bank- t 7,00,000; Debenture Redemption Reserve-t 3,00,000;

,
Closing Inventory - 1,00,000.
OR
Inventory Turnover ratio is 3 items. State whether the following transactions, will improve,
decline or will have no change on the Inventory Turnover Ratio. Also give reasons for the
same.
a) Sale of Goods for t20,000 (cost t 16,000)
b) Increase in the value of Closing Inventory by t20,000
c) Goods purchased for N0,000
d) Purchase return tl0,000

34 from the following Balance Sheet of Mayur Ltd. and the additional information as at 31st 6
March, 2022.
MayurLtd.
Balance Sheet as at 31st March,. 2022
Particulars Note 31.3.2022 31.3.2021
no. t t
I Equity and liabilities:
1. Shareholders' funds:
(a) Share Capital 30,00,000 20,00,000
(b) Reserves and Surplus 1 3,00,000 4,00,000
2. N on-current liabilities:
Long term borrowings 2 400,000 3,00,000
3. Current Liabilities:
(a) Trade Payables 1,70,000 2,50,000
(b) Short-term Provisions 3 76,000 64,000
Total 39.46.000 30.14.000
II Assets
N on-Current Assets:
Fixed Assets:
1. (i) Tangible 4 29,00.000 23,00,000
2. (ii) Intangible 5 2,70,000 1,60,000
Current Assets:
(a) Inventories 2,20,000 2,30,000 1
(b) Trade Receivables 1,10,000 1,30,000
(c) Cash and Cash Equivalents 4,46,000 1,94,000
Total 39.46.000 30,14,000

Notes to Accounts:
Note Particulars 31.3.2022 31.3.2021
no. t t
I. Reserves and Surplus:
Surnlus (Balance in Statement of 3,00,000 4,00,000

13
 Profit and Loss
2. Long-term Borrowings:
9% Debentures 4,00 000 300,000
3. Short-term Provisions:
Provision for Tax 76 000 64-1000
4. Tangible Assets:
Machinery 36,00,000 28,00,000
Accumulated Depreciation (1,QQ,QQQ) (5,00,QQQ)
29,00 000 23_,_00-1000
5. Intangible Assets:
.. I Goodwill 2 70 000 l_,_60 000
Additional Informatwn:
(i) During the year, a piece of machinery costing ~4,00,000 on which accumulated
depreciation was~ 73,000 was sold for~ 3,10,000.
(ii) 9% Debentures of~ 1,00,000 were issued on 31st March, 2022.
You are required to:
1. Calculate Net Profit before tax and extraordinary items.
2. Calculate Operating profit before working capital changes.
3. Calculate Cash flow from Investing activities.
4. Calculate Cash flow from Financing activities.
5. Calculate closing cash and cash equivalents .

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