Sample Paper Series- I | Mock Tests & Past Year Papers for CA Foundation PDF Download

 Page 1


1 
Test Series: March, 2019 
FOUNDATION COURSE 
MOCK TEST PAPER  
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING 
Question No. 1  is compulsory. 
Answer any four questions from the remaining five questions. 
Wherever necessary, suitable assumptions should be made and disclosed  
by way of note forming part of the answer. 
Working Notes should form part of the answer. 
(Time allowed: 3 Hours) (100 Marks) 
1. (a) State with reasons whether the following statements are True or False: 
(i) When shares are forfeited, the share capital account is debited with c alled up capital of shares 
forfeited and the share forfeiture account is credited with calls in arrear of shares forfeited. 
(iii) Accrual concept implies accounting on cash basis. 
(iii) Finished goods are normally valued at cost or market price whichever is higher. 
(iv)  Discount at the time of retirement of a bill is a gain for the drawee. 
(v)  Partners can share profits or losses in their capital ratio, when there is no agreement. 
(vi)  Receipts and Payments Account highlights total income and expenditure. 
(6 Statements x 2 Marks = 12 Marks)  
(b) Explain Cash and Mercantile system of accounting.  (4 Marks) 
(c) Prepare Journal Entries for the following transactions in the books of Gamma Bros.  
(i) Employees had taken stock worth Rs. 10,000 (Cost price Rs. 7,500) on the eve of Deepawali 
and the same was deducted from their salaries in the subsequent month. 
(ii) Wages paid for erection of Machinery Rs. 8,000. 
(iii) Income tax liability of proprietor Rs. 1,700 was paid out of petty cash. 
(iv) Purchase of goods from Naveen of the list price of Rs. 2,000.  He allowed 10% trade discount, 
Rs. 50 cash discount was also allowed for quick payment. (4 Marks) 
2. (a) M/s Kedar, Profit and loss account showed a net profit of Rs. 8,00,000, after considering the closing 
stock of Rs. 7,50,000 on 31
st
 March, 2017. Subsequently the following information was obtained 
from scrutiny of the books: 
(i) Purchases for the year included Rs. 30,000 paid for new electric fittings for the shop. 
(ii) M/s Kedar gave away goods valued at Rs. 80,000 as free samples for which no entry was 
made in the books of accounts. 
(iii) Invoices for goods amounting to Rs. 5,00,000 have been entered on 27
th
 March, 2017, but the 
goods were not included in stock. 
(iv) In March, 2017 goods of Rs. 4,00,000 sold and delivered were taken in the sales for  
April, 2017. 
(v) Goods costing Rs. 1,50,000 were sent on sale or return in March, 2017 at a margin of profit 
of 33-1/3% on cost. Though approval was given in April, 2017 these were taken as sales for 
March, 2017. 
© The Institute of Chartered Accountants of India
Page 2


1 
Test Series: March, 2019 
FOUNDATION COURSE 
MOCK TEST PAPER  
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING 
Question No. 1  is compulsory. 
Answer any four questions from the remaining five questions. 
Wherever necessary, suitable assumptions should be made and disclosed  
by way of note forming part of the answer. 
Working Notes should form part of the answer. 
(Time allowed: 3 Hours) (100 Marks) 
1. (a) State with reasons whether the following statements are True or False: 
(i) When shares are forfeited, the share capital account is debited with c alled up capital of shares 
forfeited and the share forfeiture account is credited with calls in arrear of shares forfeited. 
(iii) Accrual concept implies accounting on cash basis. 
(iii) Finished goods are normally valued at cost or market price whichever is higher. 
(iv)  Discount at the time of retirement of a bill is a gain for the drawee. 
(v)  Partners can share profits or losses in their capital ratio, when there is no agreement. 
(vi)  Receipts and Payments Account highlights total income and expenditure. 
(6 Statements x 2 Marks = 12 Marks)  
(b) Explain Cash and Mercantile system of accounting.  (4 Marks) 
(c) Prepare Journal Entries for the following transactions in the books of Gamma Bros.  
(i) Employees had taken stock worth Rs. 10,000 (Cost price Rs. 7,500) on the eve of Deepawali 
and the same was deducted from their salaries in the subsequent month. 
(ii) Wages paid for erection of Machinery Rs. 8,000. 
(iii) Income tax liability of proprietor Rs. 1,700 was paid out of petty cash. 
(iv) Purchase of goods from Naveen of the list price of Rs. 2,000.  He allowed 10% trade discount, 
Rs. 50 cash discount was also allowed for quick payment. (4 Marks) 
2. (a) M/s Kedar, Profit and loss account showed a net profit of Rs. 8,00,000, after considering the closing 
stock of Rs. 7,50,000 on 31
st
 March, 2017. Subsequently the following information was obtained 
from scrutiny of the books: 
(i) Purchases for the year included Rs. 30,000 paid for new electric fittings for the shop. 
(ii) M/s Kedar gave away goods valued at Rs. 80,000 as free samples for which no entry was 
made in the books of accounts. 
(iii) Invoices for goods amounting to Rs. 5,00,000 have been entered on 27
th
 March, 2017, but the 
goods were not included in stock. 
(iv) In March, 2017 goods of Rs. 4,00,000 sold and delivered were taken in the sales for  
April, 2017. 
(v) Goods costing Rs. 1,50,000 were sent on sale or return in March, 2017 at a margin of profit 
of 33-1/3% on cost. Though approval was given in April, 2017 these were taken as sales for 
March, 2017. 
© The Institute of Chartered Accountants of India
2 
 You are required to determine the adjusted net profit for the year ended on 31.3.2017 and calculate 
the value of stock on 31
st
 March, 2017. 
(b) The M/s LG Transport purchased 10 trucks at Rs. 45,00,000 each on 1st April 2014. On October 
1st, 2016, one of the trucks is involved in an accident and is completely destroyed and  
Rs. 27,00,000 is received from the insurance in full settlement. On the same date, another truck is 
purchased by the company for the sum of Rs. 50,00,000. The company write off 20% on the original 
cost per annum. The company observe the calendar year as its financial year.  
 You are required to prepare the motor truck account for two year ending 31 Dec, 2017. 
 (10 Marks +10 Marks = 20 Marks) 
3. (a) On 1
st
 January, 2018, X’s account in Y’s ledger showed a debit balance of Rs. 5,000.  The following 
transactions took place between Y and X during the quarter ended 31
st
 March, 2018: 
2018   Rs. 
Jan. 11 Y sold goods to X 6,000 
Jan. 24 Y received a promisso ry note from X due after 3 mont h s  5,000 
Feb. 01 X sold goods to Y 10,000 
Feb. 04 Y sold goods to X 8,200 
Feb. 07 X returne d goods to Y 1,000 
March 01 X sold goods to Y 5,600 
March 18 Y sold goods to X 9,200 
March 23 X sold goods to Y 4,000 
 Accounts were settled on 31
st
 March, 2018 by means of a cheque.  Prepare an Account Current to 
be submitted by Y to X as on 31
st
 March, 2018, taking interest into account @ 10% per annum.  
Calculate interest to the nearest multiple of a rupee. 
(b) Mr. B accepted a bill for Rs. 10,000 drawn on him by Mr. A on 1
st
 August, 2017 for 3 months.  This 
was for the amount which B owed to A.  On the same date Mr. A got the bill discounted at his bank 
for Rs. 9,800. 
 On the due date, B approached A for renewal of the bill.  Mr. A agreed on condition that Rs. 2,000 
be paid immediately along with interest on the remaining amount at 12% p.a. for 3 months and that 
for the remaining balance B should accept a new bill for 3 months.  These arrangements were 
carried through.  On 31
st
 December, 2017, B became insolvent and his estate paid 40%. 
 Prepare Journal Entries in the books of Mr. A (10 Marks +10 Marks = 20 Marks) 
4. (a) The Balance Sheet of a Partnership Firm M/s AB & Co consisted of two partners A and B who 
were sharing Profits and Losses in the ratio of 5 : 3 respectively. The position as on 31-03-2018 
was as follows:  
Liabilities  Rs. Assets  Rs. 
A's Capital  4,10,000  Land & Building  3,80,000  
B's Capital  3,30,000  Plant & Machinery  1,70,000  
Profit & Loss A/c 1,12,000  Furniture  1,09,480  
Trade Creditors  54,800  Stock  1,45,260  
  Sundry debtors  60,000  
  Cash at Bank.  42,060  
 9,06,800   9,06,800  
 
© The Institute of Chartered Accountants of India
Page 3


1 
Test Series: March, 2019 
FOUNDATION COURSE 
MOCK TEST PAPER  
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING 
Question No. 1  is compulsory. 
Answer any four questions from the remaining five questions. 
Wherever necessary, suitable assumptions should be made and disclosed  
by way of note forming part of the answer. 
Working Notes should form part of the answer. 
(Time allowed: 3 Hours) (100 Marks) 
1. (a) State with reasons whether the following statements are True or False: 
(i) When shares are forfeited, the share capital account is debited with c alled up capital of shares 
forfeited and the share forfeiture account is credited with calls in arrear of shares forfeited. 
(iii) Accrual concept implies accounting on cash basis. 
(iii) Finished goods are normally valued at cost or market price whichever is higher. 
(iv)  Discount at the time of retirement of a bill is a gain for the drawee. 
(v)  Partners can share profits or losses in their capital ratio, when there is no agreement. 
(vi)  Receipts and Payments Account highlights total income and expenditure. 
(6 Statements x 2 Marks = 12 Marks)  
(b) Explain Cash and Mercantile system of accounting.  (4 Marks) 
(c) Prepare Journal Entries for the following transactions in the books of Gamma Bros.  
(i) Employees had taken stock worth Rs. 10,000 (Cost price Rs. 7,500) on the eve of Deepawali 
and the same was deducted from their salaries in the subsequent month. 
(ii) Wages paid for erection of Machinery Rs. 8,000. 
(iii) Income tax liability of proprietor Rs. 1,700 was paid out of petty cash. 
(iv) Purchase of goods from Naveen of the list price of Rs. 2,000.  He allowed 10% trade discount, 
Rs. 50 cash discount was also allowed for quick payment. (4 Marks) 
2. (a) M/s Kedar, Profit and loss account showed a net profit of Rs. 8,00,000, after considering the closing 
stock of Rs. 7,50,000 on 31
st
 March, 2017. Subsequently the following information was obtained 
from scrutiny of the books: 
(i) Purchases for the year included Rs. 30,000 paid for new electric fittings for the shop. 
(ii) M/s Kedar gave away goods valued at Rs. 80,000 as free samples for which no entry was 
made in the books of accounts. 
(iii) Invoices for goods amounting to Rs. 5,00,000 have been entered on 27
th
 March, 2017, but the 
goods were not included in stock. 
(iv) In March, 2017 goods of Rs. 4,00,000 sold and delivered were taken in the sales for  
April, 2017. 
(v) Goods costing Rs. 1,50,000 were sent on sale or return in March, 2017 at a margin of profit 
of 33-1/3% on cost. Though approval was given in April, 2017 these were taken as sales for 
March, 2017. 
© The Institute of Chartered Accountants of India
2 
 You are required to determine the adjusted net profit for the year ended on 31.3.2017 and calculate 
the value of stock on 31
st
 March, 2017. 
(b) The M/s LG Transport purchased 10 trucks at Rs. 45,00,000 each on 1st April 2014. On October 
1st, 2016, one of the trucks is involved in an accident and is completely destroyed and  
Rs. 27,00,000 is received from the insurance in full settlement. On the same date, another truck is 
purchased by the company for the sum of Rs. 50,00,000. The company write off 20% on the original 
cost per annum. The company observe the calendar year as its financial year.  
 You are required to prepare the motor truck account for two year ending 31 Dec, 2017. 
 (10 Marks +10 Marks = 20 Marks) 
3. (a) On 1
st
 January, 2018, X’s account in Y’s ledger showed a debit balance of Rs. 5,000.  The following 
transactions took place between Y and X during the quarter ended 31
st
 March, 2018: 
2018   Rs. 
Jan. 11 Y sold goods to X 6,000 
Jan. 24 Y received a promisso ry note from X due after 3 mont h s  5,000 
Feb. 01 X sold goods to Y 10,000 
Feb. 04 Y sold goods to X 8,200 
Feb. 07 X returne d goods to Y 1,000 
March 01 X sold goods to Y 5,600 
March 18 Y sold goods to X 9,200 
March 23 X sold goods to Y 4,000 
 Accounts were settled on 31
st
 March, 2018 by means of a cheque.  Prepare an Account Current to 
be submitted by Y to X as on 31
st
 March, 2018, taking interest into account @ 10% per annum.  
Calculate interest to the nearest multiple of a rupee. 
(b) Mr. B accepted a bill for Rs. 10,000 drawn on him by Mr. A on 1
st
 August, 2017 for 3 months.  This 
was for the amount which B owed to A.  On the same date Mr. A got the bill discounted at his bank 
for Rs. 9,800. 
 On the due date, B approached A for renewal of the bill.  Mr. A agreed on condition that Rs. 2,000 
be paid immediately along with interest on the remaining amount at 12% p.a. for 3 months and that 
for the remaining balance B should accept a new bill for 3 months.  These arrangements were 
carried through.  On 31
st
 December, 2017, B became insolvent and his estate paid 40%. 
 Prepare Journal Entries in the books of Mr. A (10 Marks +10 Marks = 20 Marks) 
4. (a) The Balance Sheet of a Partnership Firm M/s AB & Co consisted of two partners A and B who 
were sharing Profits and Losses in the ratio of 5 : 3 respectively. The position as on 31-03-2018 
was as follows:  
Liabilities  Rs. Assets  Rs. 
A's Capital  4,10,000  Land & Building  3,80,000  
B's Capital  3,30,000  Plant & Machinery  1,70,000  
Profit & Loss A/c 1,12,000  Furniture  1,09,480  
Trade Creditors  54,800  Stock  1,45,260  
  Sundry debtors  60,000  
  Cash at Bank.  42,060  
 9,06,800   9,06,800  
 
© The Institute of Chartered Accountants of India
3 
 On the above date, C was admitted as a partner on the following terms:  
(a)  C should get 1/5
th
 of share of profits.  
(b) C brought  Rs. 2,40,000 as his capital and Rs. 32,000 for his share of Goodwill. 
(c)  Plant and Machinery would be depreciated by 15% and Land & Buildings would be 
appreciated by 40%.  
 A provision for doubtful debts to be created at 5% on sundry debtors.  
 An unrecorded liability of Rs. 6,000 for repairs to Buildings would be recorded in the books of 
accounts.  
(d) Immediately after C’s admission, Goodwill brought by him would be adjusted among old 
partners. Thereafter, the capital accounts of old partners would be adjusted through the 
current accounts of partners in such a manner that the capital accounts of all the partners 
would be in their profit sharing ratio. 
 Prepare Revaluation A/c, Capital Accounts of the partners, New profit sharing ratio and Balance 
Sheet of the Firm after the admission of C. 
(b)  Mr. Kotriwal is engaged in business of selling magazines. Several of his customers pay money in 
advance for subscribing his magazines. Information related to year ended 31st March 2017 has 
been given below: 
 On 1.4.2016 he had a balance of Rs.2,00,000 advance from customers of which Rs.1,50,000 is 
related to year 2016-17 while remaining pertains to year  2017-18. During the year 2016-17 he 
made cash sales of Rs. 5,00,000. You are required to compute: 
(i)  Total income for the year 2016-17. 
(ii)  Total money received during the year if the closing balance in Advance from customers 
Account is Rs. 1,70,000. (12 Marks + 8 Marks = 20 Marks) 
5. (a) A doctor, after retiring from govt. service, started private practice on 1
st
 April, 2017 with Rs.  20,000 
of his own and Rs.  30,000 borrowed at an interest of 15% per annum on the security of his life 
policies. His accounts for the year were kept on a cash basis and the following is his summarized 
cash account: 
 Rs.   Rs.  
Own capital 20,000 Medicines purchased  24,500 
Loan 30,000 Surgical equipments 25,000 
Prescription fees 52,500 Motor car 32,000 
Gifts from patients 13,500 Motor car expenses 12,000 
Visiting fees 25,000 Wages and salaries 10,500 
Fees from lectures 2,400 Rent of clinic 6,000 
Pension received 30,000 General charges 4,900 
  Household expenses 18,000 
  Household Furniture 2,500 
  Expenses on daughter’s 
marriage 
21,500 
  Interest on loan 4,500 
  Balance at bank 11,000 
 _______ Cash in hand     1,000 
 1,73,400  1,73,400 
© The Institute of Chartered Accountants of India
Page 4


1 
Test Series: March, 2019 
FOUNDATION COURSE 
MOCK TEST PAPER  
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING 
Question No. 1  is compulsory. 
Answer any four questions from the remaining five questions. 
Wherever necessary, suitable assumptions should be made and disclosed  
by way of note forming part of the answer. 
Working Notes should form part of the answer. 
(Time allowed: 3 Hours) (100 Marks) 
1. (a) State with reasons whether the following statements are True or False: 
(i) When shares are forfeited, the share capital account is debited with c alled up capital of shares 
forfeited and the share forfeiture account is credited with calls in arrear of shares forfeited. 
(iii) Accrual concept implies accounting on cash basis. 
(iii) Finished goods are normally valued at cost or market price whichever is higher. 
(iv)  Discount at the time of retirement of a bill is a gain for the drawee. 
(v)  Partners can share profits or losses in their capital ratio, when there is no agreement. 
(vi)  Receipts and Payments Account highlights total income and expenditure. 
(6 Statements x 2 Marks = 12 Marks)  
(b) Explain Cash and Mercantile system of accounting.  (4 Marks) 
(c) Prepare Journal Entries for the following transactions in the books of Gamma Bros.  
(i) Employees had taken stock worth Rs. 10,000 (Cost price Rs. 7,500) on the eve of Deepawali 
and the same was deducted from their salaries in the subsequent month. 
(ii) Wages paid for erection of Machinery Rs. 8,000. 
(iii) Income tax liability of proprietor Rs. 1,700 was paid out of petty cash. 
(iv) Purchase of goods from Naveen of the list price of Rs. 2,000.  He allowed 10% trade discount, 
Rs. 50 cash discount was also allowed for quick payment. (4 Marks) 
2. (a) M/s Kedar, Profit and loss account showed a net profit of Rs. 8,00,000, after considering the closing 
stock of Rs. 7,50,000 on 31
st
 March, 2017. Subsequently the following information was obtained 
from scrutiny of the books: 
(i) Purchases for the year included Rs. 30,000 paid for new electric fittings for the shop. 
(ii) M/s Kedar gave away goods valued at Rs. 80,000 as free samples for which no entry was 
made in the books of accounts. 
(iii) Invoices for goods amounting to Rs. 5,00,000 have been entered on 27
th
 March, 2017, but the 
goods were not included in stock. 
(iv) In March, 2017 goods of Rs. 4,00,000 sold and delivered were taken in the sales for  
April, 2017. 
(v) Goods costing Rs. 1,50,000 were sent on sale or return in March, 2017 at a margin of profit 
of 33-1/3% on cost. Though approval was given in April, 2017 these were taken as sales for 
March, 2017. 
© The Institute of Chartered Accountants of India
2 
 You are required to determine the adjusted net profit for the year ended on 31.3.2017 and calculate 
the value of stock on 31
st
 March, 2017. 
(b) The M/s LG Transport purchased 10 trucks at Rs. 45,00,000 each on 1st April 2014. On October 
1st, 2016, one of the trucks is involved in an accident and is completely destroyed and  
Rs. 27,00,000 is received from the insurance in full settlement. On the same date, another truck is 
purchased by the company for the sum of Rs. 50,00,000. The company write off 20% on the original 
cost per annum. The company observe the calendar year as its financial year.  
 You are required to prepare the motor truck account for two year ending 31 Dec, 2017. 
 (10 Marks +10 Marks = 20 Marks) 
3. (a) On 1
st
 January, 2018, X’s account in Y’s ledger showed a debit balance of Rs. 5,000.  The following 
transactions took place between Y and X during the quarter ended 31
st
 March, 2018: 
2018   Rs. 
Jan. 11 Y sold goods to X 6,000 
Jan. 24 Y received a promisso ry note from X due after 3 mont h s  5,000 
Feb. 01 X sold goods to Y 10,000 
Feb. 04 Y sold goods to X 8,200 
Feb. 07 X returne d goods to Y 1,000 
March 01 X sold goods to Y 5,600 
March 18 Y sold goods to X 9,200 
March 23 X sold goods to Y 4,000 
 Accounts were settled on 31
st
 March, 2018 by means of a cheque.  Prepare an Account Current to 
be submitted by Y to X as on 31
st
 March, 2018, taking interest into account @ 10% per annum.  
Calculate interest to the nearest multiple of a rupee. 
(b) Mr. B accepted a bill for Rs. 10,000 drawn on him by Mr. A on 1
st
 August, 2017 for 3 months.  This 
was for the amount which B owed to A.  On the same date Mr. A got the bill discounted at his bank 
for Rs. 9,800. 
 On the due date, B approached A for renewal of the bill.  Mr. A agreed on condition that Rs. 2,000 
be paid immediately along with interest on the remaining amount at 12% p.a. for 3 months and that 
for the remaining balance B should accept a new bill for 3 months.  These arrangements were 
carried through.  On 31
st
 December, 2017, B became insolvent and his estate paid 40%. 
 Prepare Journal Entries in the books of Mr. A (10 Marks +10 Marks = 20 Marks) 
4. (a) The Balance Sheet of a Partnership Firm M/s AB & Co consisted of two partners A and B who 
were sharing Profits and Losses in the ratio of 5 : 3 respectively. The position as on 31-03-2018 
was as follows:  
Liabilities  Rs. Assets  Rs. 
A's Capital  4,10,000  Land & Building  3,80,000  
B's Capital  3,30,000  Plant & Machinery  1,70,000  
Profit & Loss A/c 1,12,000  Furniture  1,09,480  
Trade Creditors  54,800  Stock  1,45,260  
  Sundry debtors  60,000  
  Cash at Bank.  42,060  
 9,06,800   9,06,800  
 
© The Institute of Chartered Accountants of India
3 
 On the above date, C was admitted as a partner on the following terms:  
(a)  C should get 1/5
th
 of share of profits.  
(b) C brought  Rs. 2,40,000 as his capital and Rs. 32,000 for his share of Goodwill. 
(c)  Plant and Machinery would be depreciated by 15% and Land & Buildings would be 
appreciated by 40%.  
 A provision for doubtful debts to be created at 5% on sundry debtors.  
 An unrecorded liability of Rs. 6,000 for repairs to Buildings would be recorded in the books of 
accounts.  
(d) Immediately after C’s admission, Goodwill brought by him would be adjusted among old 
partners. Thereafter, the capital accounts of old partners would be adjusted through the 
current accounts of partners in such a manner that the capital accounts of all the partners 
would be in their profit sharing ratio. 
 Prepare Revaluation A/c, Capital Accounts of the partners, New profit sharing ratio and Balance 
Sheet of the Firm after the admission of C. 
(b)  Mr. Kotriwal is engaged in business of selling magazines. Several of his customers pay money in 
advance for subscribing his magazines. Information related to year ended 31st March 2017 has 
been given below: 
 On 1.4.2016 he had a balance of Rs.2,00,000 advance from customers of which Rs.1,50,000 is 
related to year 2016-17 while remaining pertains to year  2017-18. During the year 2016-17 he 
made cash sales of Rs. 5,00,000. You are required to compute: 
(i)  Total income for the year 2016-17. 
(ii)  Total money received during the year if the closing balance in Advance from customers 
Account is Rs. 1,70,000. (12 Marks + 8 Marks = 20 Marks) 
5. (a) A doctor, after retiring from govt. service, started private practice on 1
st
 April, 2017 with Rs.  20,000 
of his own and Rs.  30,000 borrowed at an interest of 15% per annum on the security of his life 
policies. His accounts for the year were kept on a cash basis and the following is his summarized 
cash account: 
 Rs.   Rs.  
Own capital 20,000 Medicines purchased  24,500 
Loan 30,000 Surgical equipments 25,000 
Prescription fees 52,500 Motor car 32,000 
Gifts from patients 13,500 Motor car expenses 12,000 
Visiting fees 25,000 Wages and salaries 10,500 
Fees from lectures 2,400 Rent of clinic 6,000 
Pension received 30,000 General charges 4,900 
  Household expenses 18,000 
  Household Furniture 2,500 
  Expenses on daughter’s 
marriage 
21,500 
  Interest on loan 4,500 
  Balance at bank 11,000 
 _______ Cash in hand     1,000 
 1,73,400  1,73,400 
© The Institute of Chartered Accountants of India
4 
 You are required to prepare his capital account and income and expenditure account for the year 
ended 31
st
 March, 2018 and balance sheet as on that date. One-third of the motorcar expense may 
be treated as applicable to the private use of car and Rs. 3,000 of the wages and salaries are in 
respect of domestic servants. 
 The stock of mediciness in hand on 31
st
 March, 2018 was valued at Rs. 9,500.     
(b) From the information given below, calculate (i) Current Ratio and (ii) Debt to Equity Ratio: 
 Net Profit of the year Rs. 80,000, Fixed Assets Rs. 2,00,000; Closing Inventory Rs. 10,000; Other 
Current Assets Rs. 1,00,000; Current Liabilities Rs. 30,000; Share Capital Rs. 1,70,000; 12% 
Debenture Rs. 60,000.  (15 Marks +5 Marks = 20 Marks) 
6. (a) Mohan Ltd. invited applications for 15 lakhs shares of Rs. 100 each payable as follows : 
  Rs. 
On Application 20 
On Allotment (on 1st June, 2017) 30 
On First Call (on 1st Nov., 2017) 30 
On Final Call (on 1st March., 2018) 20 
 All the shares were applied for and allotted. A shareholder holding 30,000 shares paid the whole 
of the amount due along with allotment.  
 You are required to prepare the journal entries for the above-mentioned transactions, assuming 
all sums due were received. Interest was paid to the shareholder concerned on 1
st
 March, 2018. 
(b) Riya Limited issued 20,000 14% Debentures of the nominal value of Rs.1,00,00,000 as follows: 
(a) To sundry persons for cash at 90% of nominal value of Rs. 50,00,000. 
(b) To a vendor for purchase of fixed assets worth Rs. 20,00,000 – Rs. 25,00,000 nominal value. 
(c) To the banker as collateral security for a loan of Rs. 20,00,000 – Rs. 25,00,000 nominal value. 
You are required to prepare necessary journal entries Journal Entries. 
(c) From the following particulars, prepare a Bank Reconciliation Statement for Pathak Ltd. As on 
31.3.2017 
(1) Balance as per cash book is Rs. 1,20,000. 
(2) Cheques issued but not presented in the bank amounts to Rs. 68,000. 
(3) Bank charges amounts to Rs. 300. 
(4) Interest credited by bank amounts to Rs. 1,500. (10 + 5 + 5 = 20 Marks) 
OR 
(c) Difference between Going Concern Concept and Cost Concept. 
© The Institute of Chartered Accountants of India