CBSE Class 12 Accountancy Question Paper 2024 (Set 2- 67/4/2) Available: Download Solution PDF with Answer Key

When shares valued at Rs. 1,25,000 are issued to vendors against net assets worth Rs. 1,50,000, a gain of Rs. 25,000 results. This gain, which arises from the net assets exceeding the issued share value, is recorded in the Capital Reserve Account, following accounting norms. Quick Tip: When the value of acquired net assets surpasses the consideration paid, the excess is allocated to the Capital Reserve Account, signifying a financial advantage from the transaction.

Under the Indian Partnership Act of 1932, unless otherwise specified in the partnership agreement, the interest on a partner’s loan is calculated at \(6%\ p.a.\). In this case, as no alternate rate is specified, \(6%\ p.a.\) is the interest rate to be applied. Quick Tip: Refer to the Indian Partnership Act, 1932, when the partnership deed does not specify terms. The standard interest rate for a partner's loan is \(6%\ p.a.\) unless stated differently in the agreement.

Step 1: Calculate the required new capital for each partner.
With Vani's retirement, the remaining partners, Ravi and Toni, share the new capital equally. The new capital for each should be \( \frac{2,80,000}{2} = Rs.1,40,000 \).

Step 2: Determine Toni's capital deficiency.
Toni's existing capital is Rs.1,08,000. The deficiency to meet the new requirement is: \[ Rs.1,40,000 - Rs.1,08,000 = Rs.32,000 \] Quick Tip: It is crucial to adjust capital contributions in line with the predefined profit-sharing ratio after any changes in partnership, such as a partner's retirement.

Bearer debentures are securities where the holder's name is not registered; interest is paid to the bearer upon coupon submission. Therefore, Assertion (A) is valid.

Moreover, these debentures can be transferred simply by handing them over, and companies do not keep a record of their holders. Hence, Reason (R) is accurate and illustrates the basis for paying interest upon coupon submission. Quick Tip: Bearer debentures allow for easy transfer as they are not registered to a specific owner, though this increases the risk as no records are kept of ownership.

Step 1: Understanding the time period for interest calculation.
Since Mishu makes drawings at the end of each quarter, the amount is available for interest calculation for a lesser period.

Step 2: Weighted average period for quarterly end drawings.
For quarterly end drawings, the standard weighted average period is 4 ½ months.

Step 3: Matching with options.
Among the given choices, the closest and correct answer is 4 ½ months. Quick Tip: When calculating interest on regular fixed withdrawals, use established average periods: 6 months (beginning of the period), 7.5 months (end of the period), and \(5 \frac{1}{2}\) months (mid-period).

Calculate the Total Amount Due on Allotment (Excluding Ashish's Advance):

Amount due per share (including premium): Rs.3
Number of shares (excluding Ashish's): 6,000 - 200 = 5,800
Total amount due: Rs.3 * 5,800 = Rs.17,400


Calculate the Amount Ashish Paid in Advance:

Ashish paid for First Call and Final Call along with allotment.
Amount paid in advance per share: Rs.3 (First Call) + Rs.2 (Final Call) = Rs.5
Total amount paid in advance: Rs.5 * 200 = Rs.1,000


Calculate the Amount Ashish Paid on Allotment:

Amount due on allotment per share: Rs.3
Ashish's shares: 200
Amount Ashish paid on allotment: Rs.3 * 200 = Rs.600


Calculate the Total Amount Received on Allotment:
\begin{align*
\text{Total amount received &= \text{Amount due (excluding Ashish)

&+ \text{Ashish's allotment payment

&+ \text{Ashish's advance

&= Rs.17,400 + Rs.600 + Rs.1,000

&= Rs.19,000
\end{align*


Therefore, the total amount received on allotment was Rs.19,000.

Answer: (B) Rs.19,000 Quick Tip: When shares are paid in installments, ensure to account for any additional payments made by shareholders at different stages.

Calculate the Called-Up Value per Share:

Face value of each share: Rs.10
Final call not paid: Rs.2
Called-up value per share: Rs.10 - Rs.2 = Rs.8


Calculate the Total Called-Up Value of Forfeited Shares:

Called-up value per share: Rs.8
Number of forfeited shares: 5,000
Total called-up value: Rs.8 5,000 = Rs.40,000


Determine the Minimum Reissue Price:

The minimum reissue price is the amount that has already been called up.
Therefore, the minimum amount at which these shares can be reissued is Rs.8 per share.
Total minimum reissue amount: Rs.8 5,000 = Rs.40,000


Check the Options:

None of the provided options match the calculated minimum reissue amount of Rs.40,000.
However, the question asks for the minimum amount at which the shares can be reissued as fully paid up, meaning the shares are reissued as if the full face value of Rs.10 has been paid.
This means the company can reissue the shares at any price above the amount forfeited.
The amount forfeited is Rs.8 per share, so the minimum reissue price is Rs.8 per share.
Total minimum amount is Rs.8 5000 = Rs.40,000.


Consider the Discount Allowed:

The maximum discount allowed on reissue is the amount forfeited per share, which is Rs.8.
Since the shares are being reissued as fully paid up (Rs.10), the minimum reissue price is Rs.2 per share (Rs.10 - Rs.8).
Total minimum amount: Rs.2 5,000 = Rs.10,000.




Therefore, the minimum amount at which these shares can be reissued as fully paid up is Rs.10,000.

Answer: (B) Rs.10,000 Quick Tip: Accurately track payments made in stages for shares, including any overpayments by shareholders at each phase.

Per the Companies Act, 2013, the Securities Premium Account may be employed for:
1. Eliminating preliminary expenses.
2. Clearing discounts on the issuance of shares or debentures.
3. Distributing fully paid bonus shares to shareholders.
4. Repurchasing shares.

It is not permissible to use the Securities Premium Account for the issuance of partly paid bonus shares. Quick Tip: Consult Section 52 of the Companies Act, 2013 to understand the legal uses of the Securities Premium Account.

The Profit and Loss Appropriation Account is utilized to distribute profits among partners. It records transactions such as interest on capital, interest on drawings, and partner salaries. Conversely, rent paid to a partner is treated as an expense and should be recorded in the Profit and Loss Account, not in the Profit and Loss Appropriation Account. Quick Tip: It's important to distinguish that items related to partner compensation and interest adjustments are accounted for in the Profit and Loss Appropriation Account, whereas rent to a partner is categorized as an expense.

The existing workmen compensation reserve amounting to Rs. 80,000 falls short of covering the claim worth Rs. 1,00,000. This deficit of Rs. 20,000 is recorded as a debit in the Revaluation Account, signifying an adjustment to liabilities. Quick Tip: When liabilities surpass reserves during a partner's admission, retirement, or the firm's dissolution, reconcile the difference using the Revaluation Account.

Calculate the Initial Share of Each Partner:

Total ratio parts: 1 + 1 + 1 = 3
Each partner's initial share: \(\frac{1}{3}\)


Calculate the New Share of Vishesh and Nimesh:

New profit sharing ratio: 4:3
Total ratio parts: 4 + 3 = 7
Vishesh's new share: \(\frac{4}{7}\)
Nimesh's new share: \(\frac{3}{7}\)


Calculate the Gaining Share of Vishesh:
\begin{align
Vishesh's Gaining Share &= \text{New Share - \text{Old Share

&= \frac{4{7 - \frac{1{3

&= \frac{12 - 7{21

&= \frac{5{21
\end{align

Calculate the Gaining Share of Nimesh:
\begin{align
\text{Nimesh's Gaining Share &= \text{New Share - \text{Old Share

&= \frac{3{7 - \frac{1{3

&= \frac{9 - 7{21

&= \frac{2{21
\end{align

Determine the Gaining Ratio:

Gaining ratio of Vishesh and Nimesh: \(\frac{5{21} : \frac{2}{21}\)
Simplify by multiplying by 21: 5:2



Therefore, the gaining ratio of Vishesh and Nimesh is 5:2.

Answer: (C) 5:2 Quick Tip: Calculate the gaining ratio in cases of partner retirement or death by assessing the shift from old to new profit-sharing ratios of the remaining partners.

Preeti acquires a share of \(\frac{1}{4}\), entirely from Gupta.

After the transfer, Gupta's share is reduced to \(4/5 - 1/4 = 11/20\).

Sharma retains his original share of \(1/5 = 4/20\).

Preeti's acquired share is \(\frac{1}{4} = 5/20\).

New profit sharing ratio:

The updated distribution between Gupta, Sharma, and Preeti is \(11:4:5\). Quick Tip: Adjust the profit-sharing ratios appropriately when a new partner joins and takes over a portion of an existing partner’s share.

Step 1: Formula for Interest on Capital
The formula to calculate interest on capital is: \[ Interest = Capital \times Rate \times Time \]
Given:
- Aditi's Capital = Rs. 5,00,000
- Rate of Interest = 10% per annum
- Time = 1 year

Step 2: Computing the Interest on Capital \[ Interest = 5,00,000 \times \frac{10}{100} \times 1 \] \[ = 50,000 \]

Step 3: Adjusting for Available Profit
Total Net Profit = Rs. 81,000

Total Interest on Capital before adjustment:
- Aditi: Rs. 50,000
- Saurabh: Rs. 40,000 \[ Total Interest = 50,000 + 40,000 = 90,000 \]

Since the available profit (Rs. 81,000) is less than the total interest required (Rs. 90,000), interest must be distributed proportionally.

Step 4: Applying the Proportional Reduction Formula \[ Reduction Factor = \frac{Available Profit}{Total Interest} = \frac{81,000}{90,000} = 0.9 \]

Step 5: Computing Adjusted Interest \[ Adjusted Interest for Aditi = 50,000 \times 0.9 = 45,000 \]

Final Answer: Rs. 45,000 Quick Tip: Interest on capital should be computed based on the starting balance in the partner’s capital account, unless otherwise directed.

Step 1: Using the Interest on Capital Formula
The formula for interest on capital is: \[ Interest = Capital \times Rate \times Time \]
Given:

- Aditi’s capital = Rs. 5,00,000

- Saurabh’s capital = Rs. 4,00,000

- Rate = 10% per annum

- Time = 1 year


Step 2: Calculating Interest for Aditi and Saurabh \[ Interest for Aditi = 5,00,000 \times \frac{10}{100} \times 1 = 50,000 \] \[ Interest for Saurabh = 4,00,000 \times \frac{10}{100} \times 1 = 40,000 \]

Step 3: Finding the Ratio \[ Ratio = \frac{50,000}{40,000} = \frac{5}{4} \]

Thus, the ratio in which interest is provided is 5:4.

Final Answer: 5:4 Quick Tip: Always verify the partnership agreement for specific terms that may modify the standard method of capital distribution.

In the fixed capital method, the capital account reflects only the initial contribution by the partners. All other transactions, such as profit, loss, or interest, are recorded separately in the current account. This ensures that the capital account consistently maintains a credit balance. Therefore, both Assertion (A) and Reason (R) are correct, and Reason (R) effectively explains Assertion (A). Quick Tip: The fixed capital method streamlines bookkeeping by distinguishing between capital contributions and operational activities.

Calculate Vanya's Interest on Capital:
\begin{align*
\text{Vanya's Interest &= \text{Capital \times \text{Rate

&= Rs.5,00,000 \times 8%

&= Rs.40,000
\end{align*

Calculate Aanya's Annual Salary:
\begin{align*
\text{Aanya's Annual Salary &= \text{Monthly Salary \times 12

&= Rs.5,000 \times 12

&= Rs.60,000
\end{align*

Calculate the Total Appropriations:
\begin{align*
\text{Total Appropriations &= \text{Vanya's Interest + \text{Aanya's Salary

&= Rs.40,000 + Rs.60,000

&= Rs.1,00,000
\end{align*

Calculate the Divisible Profit:
\begin{align*
\text{Divisible Profit &= \text{Net Profit - \text{Total Appropriations

&= Rs.1,75,000 - Rs.1,00,000

&= Rs.75,000
\end{align*

Calculate Vanya's Share of Divisible Profit:
\begin{align*
\text{Vanya's Share &= \frac{\text{Vanya's Ratio{\text{Total Ratio \times \text{Divisible Profit

&= \frac{3{3+2 \times Rs.75,000

&= \frac{3{5 \times Rs.75,000

&= Rs.45,000
\end{align*


Therefore, Vanya's share in divisible profit is Rs.45,000.

Answer: (A) Rs.45,000 Quick Tip: Ensure that appropriations, such as interest on capital and partner salaries, are subtracted before allocating the remaining profit to partners.

Step 1: Understanding the Given Data

- Omkar’s salary = Rs. 20,000 per annum

- Shiva’s salary = Rs. 50,000 per annum

- Net profit after charging salaries = Rs. 5,60,000


Step 2: Calculating the Total Profit Before Salaries \[ Total Profit = Net Profit + (Omkar’s Salary + Shiva’s Salary) \] \[ = 5,60,000 + (20,000 + 50,000) = 6,30,000 \]

Step 3: Allocating Profit Between Omkar and Shiva
Since the profit-sharing ratio is not mentioned, we assume it is 1:1 (equal sharing). \[ Omkar’s Share = \frac{6,30,000}{2} = 3,00,000 \]

Step 4: Computing Omkar’s Total Credit \[ Omkar’s Total Credit = Salary + Profit Share \] \[ = 20,000 + 2,80,000 = 3,00,000 \]

Final Answer: Rs. 3,00,000 Quick Tip: When calculating profit distribution, include appropriations like salaries before dividing the remaining profit based on the profit-sharing ratio.

Step 1: Determine the realizable amount:

Good debtors = Rs. 34,000 - Rs. 1,000 = Rs. 33,000

Realized amount = 60% of Rs. 33,000 = Rs. 19,800


Step 2: Record the realization entry:

Cash A/c is debited with the realized amount of Rs. 19,800. Quick Tip: First, subtract bad debts from total debtors, then calculate the realizable value as a percentage of the remaining balance.

Calculate the Discount per Debenture:
\begin{align*
\text{Discount per Debenture &= \text{Face Value \times \text{Discount Rate

&= Rs.100 \times 4%

&= Rs.4
\end{align*

Calculate the Issue Price per Debenture:
\begin{align*
\text{Issue Price per Debenture &= \text{Face Value - \text{Discount per Debenture

&= Rs.100 - Rs.4

&= Rs.96
\end{align*

Calculate the Number of Debentures Issued:
\begin{align*
\text{Number of Debentures &= \frac{\text{Asset Value{\text{Issue Price per Debenture

&= \frac{Rs.24,00,000{Rs.96

&= 25,000
\end{align*


Therefore, the number of debentures issued to the vendor were 25,000.

Answer: (B) 25,000 Quick Tip: When debentures are issued at a discount, deduct the discount from the face value to find the effective issue price.

Step 1: Understanding the Given Data
- Number of Debentures Issued = 10,000
- Face Value of Each Debenture = Rs. 100
- Issue Price of Each Debenture (including 10% premium) = \[ 100 + 10% of 100 = 100 + 10 = Rs. 110 \]
- Redemption Price of Each Debenture (including 10% premium) = \[ 100 + 10% of 100 = 100 + 10 = Rs. 110 \]

Step 2: Computing the Loss on Issue of Debentures
Loss on issue of debentures arises when debentures are redeemed at a premium. It is calculated as: \[ Loss = (Redemption Price - Issue Price) \times Number of Debentures \] \[ = (110 - 100) \times 10,000 \] \[ = 10 \times 10,000 = Rs. 1,00,000 \]

Final Answer: Rs. 1,00,000 Quick Tip: The loss on issue of debentures arises when debentures are redeemed at a premium higher than the premium received during issuance.

The agreed rate of interest prevails unless there is a specific agreement to change it. Therefore, the interest on the loan will be paid to Nisha at the agreed rate of 10% p.a.

Answer: (B) 10% p.a. Quick Tip: In the absence of a partnership agreement, always rely on the default provisions outlined in the Indian Partnership Act, 1932.

Journal Entries:





Quick Tip: Reserves and revaluation losses should always be distributed using the old profit-sharing ratio, while goodwill adjustments must be based on the gaining ratio.

Journal Entries:


\begin{tabular{|l|p{8cm|r|r|
\hline
Date & Particulars & Debit (Rs.) & Credit (Rs.)
\hline
1st May, 2023 & Plant and Machinery A/c & 4,50,000 & --

& To Bank A/c & -- & 50,000

& To Ish Ltd. A/c & -- & 4,00,000

& \textit{(Purchase of Plant and Machinery with part payment through cheque) & &
\hline
1st May, 2023 & Ish Ltd. A/c & 4,00,000 & --

& Discount on Issue of Debentures A/c & 1,00,000 & --

& To 6% Debentures A/c & -- & 5,00,000

& \textit{(Settlement of remaining amount by issuing debentures at a 20% discount) & &
\hline
\end{tabular Quick Tip: If debentures are issued at a discount, the amount by which the nominal value exceeds the issue price is classified as a "Discount on Issue of Debentures" and is accounted for as a loss.

Quick Tip: When forfeited shares are reissued at a discount, the forfeited amount is utilized to cover the discount. Any surplus balance from forfeiture is credited to the Capital Reserve account.

Step 1: Calculate Capital Employed
\[ Capital Employed = Aayush's Capital + Krish's Capital + General Reserve \]
\[ = 90,000 + 50,000 + 20,000 = 1,60,000 \]

Alternatively,
\[ Capital Employed = Total Assets - External Liabilities (Loan + Creditors) \]
\[ = 1,90,000 - (25,000 + 5,000) = 1,60,000 \]

Step 2: Calculate Normal Profit
\[ Normal Profit = 12% of Capital Employed \]
\[ = \frac{12}{100} \times 1,60,000 = 19,200 \]

Step 3: Calculate Super Profit
\[ Super Profit = Average Profit - Normal Profit \]
\[ = 30,000 - 19,200 = 10,800 \]

Step 4: Calculate Goodwill
\[ Goodwill = Super Profit \times Years of Purchase \]
\[ = 10,800 \times 4 = 43,200 \]

Step 5: Vansh’s Share of Goodwill

Since Vansh is admitted for an equal share, his share in the goodwill will be:
\[ Vansh's Share = \frac{Goodwill}{3} \]
\[ = \frac{43,200}{3} = 14,400 \] Quick Tip: To value goodwill using the super profit method, first calculate normal profit. Subtract it from average profit to find super profit, and then multiply by the years' purchase factor to compute goodwill.

Quick Tip: When a partner retires, the remaining partners adjust the retiring partner’s share of goodwill in their gaining ratio through their capital accounts.

Quick Tip: When interest on capital is missed, an adjustment is made by debiting the Profit and Loss Adjustment Account and crediting the partners’ capital accounts accordingly.

Quick Tip: When shares are forfeited, the amount is subtracted from share capital, and securities premium is calculated only on shares issued at a premium.

% Correct Answer
Rohan’s Capital Account:


\begin{tabular{|l|r|r|
\hline
Date & Particulars & Amount (Rs.)
\hline
1st April, 2023 & Balance b/d & 3,00,000

30th September, 2023 & General Reserve (1/6 share) & 3,000

30th September, 2023 & Goodwill (1/6 share of Rs. 90,000) & 15,000

30th September, 2023 & Profit till date (1/6 of Rs. 67,500) & 11,250

\hline
30th September, 2023 & To Executors A/c & 3,29,250

\hline
Total & & 3,29,250
\hline
\end{tabular


Workings:

Goodwill: Average profit = \( \frac{45,000 + 90,000 + 1,35,000}{3} = 90,000 \)

Goodwill of the firm = \( 90,000 \times 2 = 1,80,000 \)

Rohan's share = \( \frac{1}{6} \times 1,80,000 = 30,000 \).
Profit till death: Average profit = 90,000

Profit up to 30th September = \( 90,000 \times \frac{6}{12} = 45,000 \).

Rohan's share = \( \frac{1}{6} \times 45,000 = 7,500 \). Quick Tip: Distribute goodwill and reserves among partners according to their profit-sharing ratio, and calculate the share of profit for the deceased partner for the period leading to their death.

Journal Entries:


\begin{tabular{|l|p{8cm|r|r|
\hline
Date & Particulars & Debit (Rs.) & Credit (Rs.)
\hline
-- & Bank A/c & 16,00,000 & --

& To Share Application A/c & -- & 16,00,000

& \textit{(Receipt of application money for 3,20,000 shares) & &
\hline
-- & Share Application A/c & 16,00,000 & --

& To Share Capital A/c & -- & 10,00,000

& To Share Allotment A/c & -- & 5,00,000

& To Bank A/c & -- & 1,00,000

& \textit{(Adjustment of application money for 2,00,000 shares, refund for 20,000 shares) & &
\hline
-- & Share Allotment A/c & 8,00,000 & --

& To Share Capital A/c & -- & 6,00,000

& To Securities Premium A/c & -- & 2,00,000

& \textit{(Allotment due, including premium) & &
\hline
-- & Bank A/c & 7,40,000 & --

& To Share Allotment A/c & -- & 7,40,000

& \textit{(Receipt of allotment money except for Kavita’s Rs. 60,000) & &
\hline
-- & First and Final Call A/c & 10,00,000 & --

& To Share Capital A/c & -- & 10,00,000

& \textit{(Due for first and final call) & &
\hline
-- & Bank A/c & 9,25,000 & --

& To First and Final Call A/c & -- & 9,25,000

& \textit{(Receipt of first and final call money except for Kavita’s Rs. 75,000) & &
\hline
-- & Share Capital A/c & 90,000 & --

& Securities Premium A/c & 30,000 & --

& To Share Forfeiture A/c & -- & 45,000

& To Calls in Arrears A/c & -- & 75,000

& \textit{(15,000 shares forfeited due to non-payment by Kavita) & &
\hline
\end{tabular Quick Tip: Forfeited shares require adjustments in the share capital, premium, and arrears accounts. Ensure the entries correspond to the unpaid amounts.

Journal Entries:


\begin{tabular{|l|p{8cm|r|r|
\hline
Date & Particulars & Debit (Rs.) & Credit (Rs.)
\hline
-- & Bank A/c & 7,20,000 & --

& To Share Application A/c & -- & 7,20,000

& \textit{(Receipt of application money for 1,80,000 shares) & &
\hline
-- & Share Application A/c & 7,20,000 & --

& To Share Capital A/c & -- & 4,00,000

& To Share Allotment A/c & -- & 2,80,000

& To Bank A/c & -- & 40,000

& \textit{(Adjustment of application money for 1,00,000 shares, refund for 30,000 shares) & &
\hline
-- & Share Allotment A/c & 5,00,000 & --

& To Share Capital A/c & -- & 5,00,000

& \textit{(Allotment money due) & &
\hline
-- & Bank A/c & 5,00,000 & --

& To Share Allotment A/c & -- & 5,00,000

& \textit{(Receipt of full allotment money) & &
\hline
-- & First and Final Call A/c & 1,00,000 & --

& To Share Capital A/c & -- & 1,00,000

& \textit{(First and final call due) & &
\hline
-- & Bank A/c & 95,000 & --

& To First and Final Call A/c & -- & 95,000

& \textit{(Receipt of first and final call except for Mansi’s Rs. 5,000) & &
\hline
-- & Share Capital A/c & 50,000 & --

& Securities Premium A/c & 10,000 & --

& To Share Forfeiture A/c & -- & 35,000

& To Calls in Arrears A/c & -- & 25,000

& \textit{(5,000 shares forfeited due to Mansi’s non-payment) & &
\hline
\end{tabular Quick Tip: Ensure proper pro-rata adjustments for oversubscription and accurate treatment of forfeited shares when calculating forfeiture amounts.

Journal Entries:


\begin{tabular{|l|p{8cm|r|r|
\hline
Date & Particulars & Debit (Rs.) & Credit (Rs.)
\hline
1st April, 2023 & Bank A/c & 90,000 & --

& To Chahat’s Capital A/c & -- & 90,000

& \textit{(Chahat’s capital contribution) & &
\hline
1st April, 2023 & Bank A/c & 30,000 & --

& To Anikesh’s Capital A/c & -- & 21,000

& To Bhavesh’s Capital A/c & -- & 9,000

& \textit{(Goodwill premium contributed by Chahat, credited in the old ratio of 7:3) & &
\hline
1st April, 2023 & Outstanding Wages A/c & 9,000 & --

& To Bank A/c & -- & 9,000

& \textit{(Payment of outstanding wages) & &
\hline
1st April, 2023 & Revaluation A/c & 6,000 & --

& To Stock A/c & -- & 6,000

& \textit{(Reduction in stock by 10%) & &
\hline
1st April, 2023 & Revaluation A/c & 6,300 & --

& To Creditors A/c & -- & 6,300

& \textit{(Recognition of unrecorded creditor) & &
\hline
1st April, 2023 & Anikesh’s Capital A/c & 1,260 & --

& Bhavesh’s Capital A/c & 540 & --

& To Revaluation A/c & -- & 1,800

& \textit{(Transfer of revaluation loss to partners’ capital accounts in the ratio 7:3) & &
\hline
\end{tabular Quick Tip: Before admitting a new partner, adjust for revaluation losses and unrecorded liabilities. Ensure goodwill is allocated among existing partners according to their profit-sharing ratio.

Revaluation Account:


\begin{tabular{|l|r|l|r|
\hline
Particulars & Amount (Rs.) & Particulars & Amount (Rs.)
\hline
To Building A/c (Depreciation) & 3,54,000 & By Land A/c (Appreciation) & 3,60,000

To Provision for Doubtful Debts & 6,000 & &

To Workmen’s Compensation Reserve & 4,00,000 & &

Total & 7,60,000 & Total & 3,60,000
\hline
\end{tabular


Partners’ Capital Accounts:


\begin{tabular{|l|r|r|r|r|
\hline
Particulars & Prina (Rs.) & Qadir (Rs.) & Kian (Rs.) & Total (Rs.)
\hline
Balance b/d & 9,60,000 & 8,40,000 & 9,00,000 & 27,00,000

General Reserve & 2,10,000 & 60,000 & 30,000 & 3,00,000

Goodwill (Adjustment for Qadir) & 7,00,000 & -- & 5,00,000 & 12,00,000

Revaluation Loss & (4,90,000) & (1,40,000) & (70,000) & (7,00,000)

Adjusted Balance & 13,80,000 & -- & 13,60,000 & 27,40,000
\hline
\end{tabular Quick Tip: Any revaluation gains or losses should be allocated among partners according to their previous profit-sharing ratio. Ensure that the retiring partner’s share of goodwill and revaluation is adjusted before making final settlements.

Journal Entries:


\begin{tabular{|l|p{8cm|r|r|
\hline
Date & Particulars & Debit (Rs.) & Credit (Rs.)
\hline
-- & Realisation A/c & 19,000 & --

& To Sudha’s Capital A/c & -- & 19,000

& \textit{(Sudha agrees to settle her husband's loan) & &
\hline
-- & Bank A/c & 7,500 & --

& To Realisation A/c & -- & 7,500

& \textit{(Recovery of bad debt from debtor) & &
\hline
-- & Shiva’s Capital A/c & 13,300 & --

& To Realisation A/c & -- & 13,300

& \textit{(Shiva takes over investments) & &
\hline
-- & Realisation A/c & 18,000 & --

& To Bank A/c & -- & 18,000

& \textit{(Unrecorded creditor of Rs. 20,000 settled at a 10% discount) & &
\hline
-- & Realisation A/c & 1,500 & --

& To Sudha’s Capital A/c & 1,050 & --

& To Shiva’s Capital A/c & 450 & --

& \textit{(Distribution of Veligare Ltd. shares among partners in profit-sharing ratio) & &
\hline
-- & Realisation A/c & 3,400 & --

& To Bank A/c & -- & 3,400

& \textit{(Payment of realization expenses by Sudha) & &
\hline
-- & Realisation A/c & 3,000 & --

& To Sudha’s Capital A/c & -- & 3,000

& \textit{(Remuneration given to Sudha for realization duties) & &
\hline
\end{tabular Quick Tip: During dissolution, all activities like asset realization, liability settlement, and expense payments are recorded through the Realisation Account.

Journal Entries:


\begin{tabular{|l|p{8cm|r|r|
\hline
Date & Particulars & Debit (Rs.) & Credit (Rs.)
\hline
-- & Bank A/c & 3,60,000 & --

& Discount on Issue of Debentures A/c & 40,000 & --

& To 11% Debentures A/c & -- & 4,00,000

& \textit{(400 debentures issued at a 10% discount, redeemable at par) & &
\hline
-- & Loss on Issue of Debentures A/c & 40,000 & --

& To Discount on Issue of Debentures A/c & -- & 40,000

& \textit{(Transfer of loss on debentures to the Loss on Issue of Debentures Account) & &
\hline
-- & Bank A/c & 4,50,000 & --

& Discount on Issue of Debentures A/c & 50,000 & --

& To 10% Debentures A/c & -- & 5,00,000

& To Premium on Redemption A/c & -- & 50,000

& \textit{(500 debentures issued at a 10% discount, redeemable at a 10% premium) & &
\hline
-- & Securities Premium A/c & 75,000 & --

& To Loss on Issue of Debentures A/c & -- & 75,000

& \textit{(Adjusting loss against the Securities Premium Account) & &
\hline
\end{tabular Quick Tip: When debentures are issued at a discount and redeemed at a premium, both the discount and premium must be reflected in the Loss on Issue of Debentures Account.

To determine the cash flows from investing activities, we account for both the cash outflows for purchases and the cash inflows from sales:

Cash Outflows:

Investments purchased = Rs. 2,00,000
Goodwill purchased = Rs. 3,00,000
Total cash outflow = Rs. 2,00,000 + Rs. 3,00,000 = Rs. 5,00,000

Cash Inflows:

Investments sold = Rs. 1,80,000
Total cash inflow = Rs. 1,80,000



Net Cash Flow: \[ Net cash flow = Cash inflows - Cash outflows = Rs. 1,80,000 - Rs. 5,00,000 = Outflow of Rs. 3,20,000. \] Quick Tip: When calculating cash flows from investing activities, consider all asset purchases as outflows and all asset sales as inflows. The net result will reflect the cash flow from investing activities.

Financing activities refer to the inflow and outflow of funds associated with long-term borrowings or equity-related transactions. Statement II highlights the significance of separately reporting cash flows from financing activities to offer insights into funding sources and resource distribution. Both statements are accurate. Quick Tip: Financing activities encompass raising funds through equity or debt, as well as repaying loans or distributing dividends.

The payment of employee benefit expenses is considered a regular part of business operations. As a result, it is classified as an outflow from operating activities in the cash flow statement. Quick Tip: Operating activities encompass cash flows linked to the core business functions, including both revenue generation and expenses.

The quick ratio is determined by the formula: \[ Quick Ratio = \frac{Quick Assets}{Current Liabilities} \]
When goods are purchased for cash, quick assets (such as cash) decrease, since inventory is not counted as a quick asset. This reduces the numerator, which results in a lower quick ratio. Quick Tip: Quick assets do not include inventories or prepaid expenses. The primary components are cash and receivables.

Ratio analysis entails calculating different financial ratios to assess a business's profitability, solvency, and operational efficiency. These ratios offer valuable insights into the company’s financial health. Quick Tip: Important ratios include the current ratio, debt-equity ratio, and gross profit ratio, among others.

The quick ratio, often called the Acid Test Ratio, excludes inventory and prepaid expenses, offering a more conservative measure of liquidity. Quick Tip: The quick ratio is calculated as: \[ Quick Ratio = \frac{Quick Assets}{Current Liabilities} \]

As per Schedule III, Part I of the Companies Act, 2013:

Design: Being an intangible asset, it is classified under \textit{Intangible Assets within the \textit{Non-Current Assets section.
Unpaid Dividend: This is considered a liability and is reported under \textit{Other Current Liabilities in the \textit{Current Liabilities section.
Capital Work-in-Progress: It is listed under \textit{Non-Current Assets, as it represents ongoing capital expenditure. Quick Tip: Always consult Schedule III, Part I of the Companies Act, 2013, for the proper classification and presentation of items in the Balance Sheet.

Step 1: Formula for Operating Profit Ratio
\[ Operating Profit Ratio = \left( \frac{Operating Profit}{Revenue from Operations} \right) \times 100 \]

Step 2: Calculation of Cost of Revenue from Operations
\[ Revenue from Operations = Cost of Revenue from Operations + Gross Profit \]
\[ 10,00,000 = Cost of Revenue from Operations + 25% of Cost of Revenue from Operations \]
\[ Cost of Revenue from Operations = Rs. 8,00,000 \]

Step 3: Calculation of Operating Profit
\[ Operating Profit = Revenue from Operations - Cost of Revenue from Operations - Operating Expenses \]
\[ = 10,00,000 - 8,00,000 - 18,000 - 2,000 \]
\[ = Rs. 1,80,000 \]

(Note: Loss by theft is not an operating expense and is ignored.)

Step 4: Calculation of Operating Profit Ratio
\[ Operating Profit Ratio = \left( \frac{1,80,000}{10,00,000} \right) \times 100 \]
\[ = 18% \]

Correct Answer: (Operating Profit Ratio = 18%) Quick Tip: The Operating Profit Ratio indicates how efficiently a company is managing its core business activities. It excludes non-operating items like income and expenses.

N/A Quick Tip: In a common size balance sheet, every item is expressed as a percentage of the total assets or total liabilities, helping to understand their relative significance.

N/A Quick Tip: In a comparative statement, calculate the percentage change using the formula: \[ Percentage Change = \frac{Current Year - Previous Year}{Previous Year} \times 100 \]

N/A Quick Tip: To determine cash flows from operating activities, include adjustments for non-cash items, changes in working capital, and tax provisions.

In Excel, absolute cell references are denoted by placing a
( sign before both the column and row references (e.g.,
)A
(1). Mixed references, on the other hand, use the
) sign only before either the column or the row reference (e.g.,
(A1 or A
)1). Quick Tip: Absolute references (
(A
)1) lock both the column and row, while mixed references (
(A1 or A
)1) lock only one of them.

In Excel, mathematical operations are performed based on the following order of precedence: Parentheses, Exponents, Multiplication/Division (evaluated left to right), and Addition/Subtraction (evaluated left to right). Quick Tip: Use the acronym PEMDAS (Parentheses, Exponents, Multiplication/Division, Addition/Subtraction) to remember the order of operations in Excel.

In Excel 2007, the .xls format offers 65,536 rows and 256 columns, while the .xlsx format allows for 1,048,576 rows and 16,384 columns. Quick Tip: The .xlsx format in Excel supports a significantly larger grid compared to the older .xls format.

Generic software is designed for general use and is not tailored to individual user needs, which makes it more vulnerable to data fraud and privacy concerns due to the absence of customized security features. Quick Tip: Generic software offers less security than customized software, which is specifically developed to meet the needs of particular users or organizations.

A legend in a graph is used to describe the different data series represented. It provides labels for the colors, patterns, or symbols used in the chart to differentiate between various data series. Quick Tip: A chart’s data series is made up of multiple data points, each visually representing a piece of data.

In Excel, labels are text, special characters, or descriptive details that help identify rows or columns. Labels cannot be used in mathematical calculations. Quick Tip: Labels enhance clarity in Excel spreadsheets but are not considered numerical values.

\renewcommand{\arraystretch{1.5
\begin{tabular{|p{3cm|p{7cm|p{7cm|
\hline
VLOOKUP Syntax & Error & Reason
\hline
(i) \texttt{=VLOOKUP(B1, B2:E8, 2, 0) & Error: \texttt{\#N/A & The lookup value \texttt{B1 is not found in the first column of the range \texttt{B2:E8. The first column must contain the lookup value.
\hline
(ii) \texttt{=SQRT(VLOOKUP(B5, B8:E8, 2, 0) - 100000) & Error: \texttt{\#N/A & The lookup value \texttt{B5 is missing in the first column of the range \texttt{B8:E8. The lookup value must be in the first column.
\hline
(iii) \texttt{=VLOOKUP(A2, A2:A8, 2, 0) & Error: \texttt{\#VALUE! & The column index (\texttt{2) exceeds the number of columns in the range \texttt{A2:A8, which only has one column.
\hline
(iv) \texttt{=VLOOKUP(B2, B3:E4, 5, 0) & Error: \texttt{\#REF! & The column index (\texttt{5) is invalid since the range \texttt{B3:E4 only contains 2 columns.
\hline
(v) \texttt{=VLOOKUP(B2, A2:E8, 0, 0) & Error: \texttt{\#VALUE! & The column index (\texttt{0) is not valid. It must be a positive integer greater than or equal to \texttt{1.
\hline
(vi) \texttt{=VLOOKUP(B2, B2:E8, 2, 0)/0 & Error: Division by zero & The formula attempts to divide by zero, which results in an undefined operation.
\hline
\end{tabular Quick Tip: \textbf{Quick Tip:} Ensure the lookup value appears in the first column of the table array. The column index should align with the structure of the table array. Avoid division by zero or incorrect references to ranges.