Mock Test: Principles and Practice of Accounting(Paper-1) - Series-II(Dec. 2022) | Mock Tests & Past Year Papers for CA Foundation PDF Download

 Page 1


1 
Test Series: November, 2022 
MOCK TEST PAPER 2 
FOUNDATION COURSE 
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. Prior Period Items need not be separately disclosed in the current statement of profit and loss. 
ii. Capital + Long Term Liabilities= Fixed Assets + Current Assets + Cash- Current Liabilities. 
iii. The sale value of the by-product is credited to Trading Account.  
iv. Discount at the time of retirement of a bill is a gain for the drawee.  
v. If a partner retires, then other partners have a gain in their profit sharing ratio. 
vi. Net income in case of persons practicing vocation is determined by preparing profit and loss 
account.  (6 Statements x 2 Marks = 12 Marks)  
(b) Discuss the limitations which must be kept in mind while evaluating the Financial Statements. 
 (4 Marks) 
(c) From the following information provided by Mr. Shivam for the year ended 31
st
 March,2022. Find 
the unknown figures for the certain items: 
Particulars Amount (`) 
Machinery 10,00,000 
Trade Payables 70,000 
Inventory 56,000 
Total Liabilities including Capital 12,25,000 
Cash at bank 75,000 
Cash in hand ? 
Trade Receivables ? 
Opening Capital 7,50,000 
Profit during the Year  45,000 
Capital introduced during the Year 1,00,000 
Closing Capital ? 
Loans ? 
 Additional information: During the year sales of ` 13,75,000 was made of which `13,15,000 have 
been received. (4 Marks) 
 
© The Institute of Chartered Accountants of India
Page 2


1 
Test Series: November, 2022 
MOCK TEST PAPER 2 
FOUNDATION COURSE 
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. Prior Period Items need not be separately disclosed in the current statement of profit and loss. 
ii. Capital + Long Term Liabilities= Fixed Assets + Current Assets + Cash- Current Liabilities. 
iii. The sale value of the by-product is credited to Trading Account.  
iv. Discount at the time of retirement of a bill is a gain for the drawee.  
v. If a partner retires, then other partners have a gain in their profit sharing ratio. 
vi. Net income in case of persons practicing vocation is determined by preparing profit and loss 
account.  (6 Statements x 2 Marks = 12 Marks)  
(b) Discuss the limitations which must be kept in mind while evaluating the Financial Statements. 
 (4 Marks) 
(c) From the following information provided by Mr. Shivam for the year ended 31
st
 March,2022. Find 
the unknown figures for the certain items: 
Particulars Amount (`) 
Machinery 10,00,000 
Trade Payables 70,000 
Inventory 56,000 
Total Liabilities including Capital 12,25,000 
Cash at bank 75,000 
Cash in hand ? 
Trade Receivables ? 
Opening Capital 7,50,000 
Profit during the Year  45,000 
Capital introduced during the Year 1,00,000 
Closing Capital ? 
Loans ? 
 Additional information: During the year sales of ` 13,75,000 was made of which `13,15,000 have 
been received. (4 Marks) 
 
© The Institute of Chartered Accountants of India
2 
2. (a) M/s Avneet took lease of a quarry on 1-4-2019 for ` 2,00,00,000. As per technical estimate the 
total quantity of mineral deposit is 4,00,000 tonnes. Depreciation was charged on the basis of 
depletion method. Extraction pattern is given in the following table: 
Year     Quantity of Mineral extracted 
2019 -20    4,000 tonnes 
2020-21    20,000 tonnes 
2021 -22    30,000 tonnes 
 Show the Quarry Lease Account and Depreciation Account for each year from 2019-20 to  
2021-22.  
(b) M/s Mandeep, Profit and loss account showed a net profit of ` 32,00,000, after considering the 
closing stock of ` 30,00,000 on 31
st
 March, 2022. Subsequently the following information was 
obtained from scrutiny of the books: 
(i) Purchases for the year included ` 1,20,000 paid for new electric fittings for the shop. 
(ii) M/s Mandeep gave away goods valued at ` 3,20,000 as free samples for which no entry was 
made in the books of accounts. 
(iii) Invoices for goods amounting to ` 20,00,000 have been entered on 27
th
 March, 2022, but the 
goods were not included in stock. 
(iv) In March, 2022 goods of ` 16,00,000 sold and delivered were taken in the sales for  
April, 2022. 
(v) Goods costing ` 6,00,000 were sent on sale or return in March, 2022 at a margin of profit of 
33-1/3% on cost. Though approval was given in April, 2022 these were taken as sales for 
March, 2022. 
 You are required to determine the adjusted net profit for the year ended on 31.3.2022 and calculate 
the value of stock on 31
st
 March, 2022.   (10 Marks +10 Marks= 20 Marks) 
3. (a) Mr. Y accepted a bill for ` 50,000 drawn on him by Mr. X on 1
st
 August, 2021 for 3 months.  This 
was for the amount which Y owed to X.  On the same date Mr. X got the bill discounted at his bank 
for ` 49,000. 
 On the due date, Y approached X for renewal of the bill.  Mr. X agreed on condition that ` 10,000 
be paid immediately along with interest on the remaining amount at 12% p.a. for 3 months and that 
for the remaining balance Y should accept a new bill for 3 months.  These arrangements were 
carried through.  On 31
st
 December, 2021, Y became insolvent and his estate paid 40%. 
  Prepare Journal Entries in the books of Mr. X 
(b) From the following details calculate the average due date: 
Date of Bill Amount (`) Usance of Bill 
28
th
 January, 2022 5,000 1 month 
20
th
 March, 2022 4,000 2 months 
12
th
 July, 2022 7,000 1 month 
10
th
 August, 2022 6,000 2 months 
 
© The Institute of Chartered Accountants of India
Page 3


1 
Test Series: November, 2022 
MOCK TEST PAPER 2 
FOUNDATION COURSE 
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. Prior Period Items need not be separately disclosed in the current statement of profit and loss. 
ii. Capital + Long Term Liabilities= Fixed Assets + Current Assets + Cash- Current Liabilities. 
iii. The sale value of the by-product is credited to Trading Account.  
iv. Discount at the time of retirement of a bill is a gain for the drawee.  
v. If a partner retires, then other partners have a gain in their profit sharing ratio. 
vi. Net income in case of persons practicing vocation is determined by preparing profit and loss 
account.  (6 Statements x 2 Marks = 12 Marks)  
(b) Discuss the limitations which must be kept in mind while evaluating the Financial Statements. 
 (4 Marks) 
(c) From the following information provided by Mr. Shivam for the year ended 31
st
 March,2022. Find 
the unknown figures for the certain items: 
Particulars Amount (`) 
Machinery 10,00,000 
Trade Payables 70,000 
Inventory 56,000 
Total Liabilities including Capital 12,25,000 
Cash at bank 75,000 
Cash in hand ? 
Trade Receivables ? 
Opening Capital 7,50,000 
Profit during the Year  45,000 
Capital introduced during the Year 1,00,000 
Closing Capital ? 
Loans ? 
 Additional information: During the year sales of ` 13,75,000 was made of which `13,15,000 have 
been received. (4 Marks) 
 
© The Institute of Chartered Accountants of India
2 
2. (a) M/s Avneet took lease of a quarry on 1-4-2019 for ` 2,00,00,000. As per technical estimate the 
total quantity of mineral deposit is 4,00,000 tonnes. Depreciation was charged on the basis of 
depletion method. Extraction pattern is given in the following table: 
Year     Quantity of Mineral extracted 
2019 -20    4,000 tonnes 
2020-21    20,000 tonnes 
2021 -22    30,000 tonnes 
 Show the Quarry Lease Account and Depreciation Account for each year from 2019-20 to  
2021-22.  
(b) M/s Mandeep, Profit and loss account showed a net profit of ` 32,00,000, after considering the 
closing stock of ` 30,00,000 on 31
st
 March, 2022. Subsequently the following information was 
obtained from scrutiny of the books: 
(i) Purchases for the year included ` 1,20,000 paid for new electric fittings for the shop. 
(ii) M/s Mandeep gave away goods valued at ` 3,20,000 as free samples for which no entry was 
made in the books of accounts. 
(iii) Invoices for goods amounting to ` 20,00,000 have been entered on 27
th
 March, 2022, but the 
goods were not included in stock. 
(iv) In March, 2022 goods of ` 16,00,000 sold and delivered were taken in the sales for  
April, 2022. 
(v) Goods costing ` 6,00,000 were sent on sale or return in March, 2022 at a margin of profit of 
33-1/3% on cost. Though approval was given in April, 2022 these were taken as sales for 
March, 2022. 
 You are required to determine the adjusted net profit for the year ended on 31.3.2022 and calculate 
the value of stock on 31
st
 March, 2022.   (10 Marks +10 Marks= 20 Marks) 
3. (a) Mr. Y accepted a bill for ` 50,000 drawn on him by Mr. X on 1
st
 August, 2021 for 3 months.  This 
was for the amount which Y owed to X.  On the same date Mr. X got the bill discounted at his bank 
for ` 49,000. 
 On the due date, Y approached X for renewal of the bill.  Mr. X agreed on condition that ` 10,000 
be paid immediately along with interest on the remaining amount at 12% p.a. for 3 months and that 
for the remaining balance Y should accept a new bill for 3 months.  These arrangements were 
carried through.  On 31
st
 December, 2021, Y became insolvent and his estate paid 40%. 
  Prepare Journal Entries in the books of Mr. X 
(b) From the following details calculate the average due date: 
Date of Bill Amount (`) Usance of Bill 
28
th
 January, 2022 5,000 1 month 
20
th
 March, 2022 4,000 2 months 
12
th
 July, 2022 7,000 1 month 
10
th
 August, 2022 6,000 2 months 
 
© The Institute of Chartered Accountants of India
3 
(c) On 31
st
 December, 2021 goods sold at a sale price of ` 10,500 were lying with customer, Shama 
to whom these goods were sold on ‘sale or return basis’ were recorded as actual sales. Since no 
consent has been received from Shama, you are required to pass adjustment entries presuming 
goods were sent on approval at a profit of cost plus 20%. Present market price is 10% less than 
the cost price. (10 + 5 + 5 = 20 Marks) 
4.  (a) The Balance Sheet of a Partnership Firm M/s Pradeep & Associates consisted of two partners Anil 
and Bharat who were sharing Profits and Losses in the ratio of 5 : 3 respectively. The position as 
on 31-03-2022 was as follows:  
Liabilities  ` Assets  ` 
Anil's Capital  8,20,000 Land & Building  7,60,000 
Bharat's Capital  6,60,000 Plant & Machinery  3,40,000 
Profit & Loss A/c 2,24,000 Furniture  2,18,960 
Trade Creditors  1,09,600 Stock  2,90,520 
   Sundry debtors  1,20,000 
   Cash at Bank  84,120 
 18,13,600  18,13,600 
 On the above date, Dev was admitted as a partner on the following terms:  
(a)  Dev should get 1/5
th
 of share of profits.  
(b) Dev brought ` 4,80,000 as his capital and ` 64,000 for his share of Goodwill. 
(c)  Plant and Machinery would be depreciated by 15% and Land & Buildings would be 
appreciated by 40%.  
(d) A provision for doubtful debts to be created at 5% on sundry debtors.  
(e) An unrecorded liability of ` 12,000 for repairs to Buildings would be recorded in the books of 
accounts.  
(f) Immediately after Dev’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 Dev. 
(b)  Ms. Veena is engaged in business of selling magazines. Several of his customers pay money in 
advance for subscribing his magazines. Information related to year ended 31
st
 March, 2022 has 
been given below: 
 On 1.4.2021 he had a balance of ` 3,00,000 advance from customers of which ` 2,25,000 is related 
to year 2021-22 while remaining pertains to year 2022-23. During the year 2021-22 he made cash 
sales of ` 7,50,000. You are required to compute: 
(i)  Total income for the year 2021-22. 
(ii)  Total money received during the year if the closing balance in Advance from customers 
Account is ` 2,55,000.  (12 + 8 Marks) 
 
© The Institute of Chartered Accountants of India
Page 4


1 
Test Series: November, 2022 
MOCK TEST PAPER 2 
FOUNDATION COURSE 
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. Prior Period Items need not be separately disclosed in the current statement of profit and loss. 
ii. Capital + Long Term Liabilities= Fixed Assets + Current Assets + Cash- Current Liabilities. 
iii. The sale value of the by-product is credited to Trading Account.  
iv. Discount at the time of retirement of a bill is a gain for the drawee.  
v. If a partner retires, then other partners have a gain in their profit sharing ratio. 
vi. Net income in case of persons practicing vocation is determined by preparing profit and loss 
account.  (6 Statements x 2 Marks = 12 Marks)  
(b) Discuss the limitations which must be kept in mind while evaluating the Financial Statements. 
 (4 Marks) 
(c) From the following information provided by Mr. Shivam for the year ended 31
st
 March,2022. Find 
the unknown figures for the certain items: 
Particulars Amount (`) 
Machinery 10,00,000 
Trade Payables 70,000 
Inventory 56,000 
Total Liabilities including Capital 12,25,000 
Cash at bank 75,000 
Cash in hand ? 
Trade Receivables ? 
Opening Capital 7,50,000 
Profit during the Year  45,000 
Capital introduced during the Year 1,00,000 
Closing Capital ? 
Loans ? 
 Additional information: During the year sales of ` 13,75,000 was made of which `13,15,000 have 
been received. (4 Marks) 
 
© The Institute of Chartered Accountants of India
2 
2. (a) M/s Avneet took lease of a quarry on 1-4-2019 for ` 2,00,00,000. As per technical estimate the 
total quantity of mineral deposit is 4,00,000 tonnes. Depreciation was charged on the basis of 
depletion method. Extraction pattern is given in the following table: 
Year     Quantity of Mineral extracted 
2019 -20    4,000 tonnes 
2020-21    20,000 tonnes 
2021 -22    30,000 tonnes 
 Show the Quarry Lease Account and Depreciation Account for each year from 2019-20 to  
2021-22.  
(b) M/s Mandeep, Profit and loss account showed a net profit of ` 32,00,000, after considering the 
closing stock of ` 30,00,000 on 31
st
 March, 2022. Subsequently the following information was 
obtained from scrutiny of the books: 
(i) Purchases for the year included ` 1,20,000 paid for new electric fittings for the shop. 
(ii) M/s Mandeep gave away goods valued at ` 3,20,000 as free samples for which no entry was 
made in the books of accounts. 
(iii) Invoices for goods amounting to ` 20,00,000 have been entered on 27
th
 March, 2022, but the 
goods were not included in stock. 
(iv) In March, 2022 goods of ` 16,00,000 sold and delivered were taken in the sales for  
April, 2022. 
(v) Goods costing ` 6,00,000 were sent on sale or return in March, 2022 at a margin of profit of 
33-1/3% on cost. Though approval was given in April, 2022 these were taken as sales for 
March, 2022. 
 You are required to determine the adjusted net profit for the year ended on 31.3.2022 and calculate 
the value of stock on 31
st
 March, 2022.   (10 Marks +10 Marks= 20 Marks) 
3. (a) Mr. Y accepted a bill for ` 50,000 drawn on him by Mr. X on 1
st
 August, 2021 for 3 months.  This 
was for the amount which Y owed to X.  On the same date Mr. X got the bill discounted at his bank 
for ` 49,000. 
 On the due date, Y approached X for renewal of the bill.  Mr. X agreed on condition that ` 10,000 
be paid immediately along with interest on the remaining amount at 12% p.a. for 3 months and that 
for the remaining balance Y should accept a new bill for 3 months.  These arrangements were 
carried through.  On 31
st
 December, 2021, Y became insolvent and his estate paid 40%. 
  Prepare Journal Entries in the books of Mr. X 
(b) From the following details calculate the average due date: 
Date of Bill Amount (`) Usance of Bill 
28
th
 January, 2022 5,000 1 month 
20
th
 March, 2022 4,000 2 months 
12
th
 July, 2022 7,000 1 month 
10
th
 August, 2022 6,000 2 months 
 
© The Institute of Chartered Accountants of India
3 
(c) On 31
st
 December, 2021 goods sold at a sale price of ` 10,500 were lying with customer, Shama 
to whom these goods were sold on ‘sale or return basis’ were recorded as actual sales. Since no 
consent has been received from Shama, you are required to pass adjustment entries presuming 
goods were sent on approval at a profit of cost plus 20%. Present market price is 10% less than 
the cost price. (10 + 5 + 5 = 20 Marks) 
4.  (a) The Balance Sheet of a Partnership Firm M/s Pradeep & Associates consisted of two partners Anil 
and Bharat who were sharing Profits and Losses in the ratio of 5 : 3 respectively. The position as 
on 31-03-2022 was as follows:  
Liabilities  ` Assets  ` 
Anil's Capital  8,20,000 Land & Building  7,60,000 
Bharat's Capital  6,60,000 Plant & Machinery  3,40,000 
Profit & Loss A/c 2,24,000 Furniture  2,18,960 
Trade Creditors  1,09,600 Stock  2,90,520 
   Sundry debtors  1,20,000 
   Cash at Bank  84,120 
 18,13,600  18,13,600 
 On the above date, Dev was admitted as a partner on the following terms:  
(a)  Dev should get 1/5
th
 of share of profits.  
(b) Dev brought ` 4,80,000 as his capital and ` 64,000 for his share of Goodwill. 
(c)  Plant and Machinery would be depreciated by 15% and Land & Buildings would be 
appreciated by 40%.  
(d) A provision for doubtful debts to be created at 5% on sundry debtors.  
(e) An unrecorded liability of ` 12,000 for repairs to Buildings would be recorded in the books of 
accounts.  
(f) Immediately after Dev’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 Dev. 
(b)  Ms. Veena is engaged in business of selling magazines. Several of his customers pay money in 
advance for subscribing his magazines. Information related to year ended 31
st
 March, 2022 has 
been given below: 
 On 1.4.2021 he had a balance of ` 3,00,000 advance from customers of which ` 2,25,000 is related 
to year 2021-22 while remaining pertains to year 2022-23. During the year 2021-22 he made cash 
sales of ` 7,50,000. You are required to compute: 
(i)  Total income for the year 2021-22. 
(ii)  Total money received during the year if the closing balance in Advance from customers 
Account is ` 2,55,000.  (12 + 8 Marks) 
 
© The Institute of Chartered Accountants of India
4 
5. (a) The Receipts and Payments account of Silver Stitch Club prepared on 31st March, 2022 is as 
follows: 
Receipts and Payments Account 
 Receipts ` Amount 
` 
 Payments Amount 
` 
To 
To 
 
Balance b/d 
Annual Income from 
Subscription 
Add: Outstanding of last 
year received this year 
 
 
91,800 
 
  3,600 
95,440 
9,000 By 
 
 
By 
 
By 
Expenses (including 
Payment for sports 
material ` 54,000) 
Loss on Sale of Furniture 
(cost price ` 9,000) 
Balance c/d 
 
1,26,000 
 
3,600 
 
18,09,000 
 Less: Prepaid of last year 1,800 93,600  
  
To Other fees 
 
36,000    
To Donation for Building  18,00,000    
   19,38,600   19,38,600 
Additional information: 
Silver Stitch Club had balances as on 1.4.2021 : - 
Furniture ` 36,000; Investment at 5% ` 5,40,000; 
Sports material ` 1,33,200; 
Balance as on 31.3.2022 : Subscription Receivable ` 5,400; 
Subscription received in advance ` 1,800; 
Stock of sports material ` 36,000. 
Do you agree with above Receipts and Payments account? If not, prepare correct Receipts and 
Payments account and Income and Expenditure account for the year ended 31
st
 March, 2022 and 
Balance Sheet on that date.  
(b)   The following mistakes were located in the books of a concern after its books were closed and a 
Suspense Account was opened in order to get the Trial Balance agreed: 
(i) Sales Day Book was overcast by ` 7,000. 
(ii) Legal Expenses ` 7,670 paid to Mr. Bansal was debited to her personal account. 
(iii) General expenses ` 4,900 was posted in the General Ledger as ` 9,400. 
(iv) A Bill Receivable for ` 1,550 was passed through Bills Payable Book. The Bill was given by 
Jai. 
(v) Cash received from Deepak was debited to Vivek ` 7,500. 
(vi) A sale of ` 25,000 to Reema was wrongly debited to the Account of Shikha. 
(vii) While carrying forward the total of one page of the Purchases Book to the next, the amount 
of ` 21,690 was written as ` 21,960. 
(viii) ` 7,000 due by Mr. Surya was omitted to be taken to trial balance. 
 Find out the nature and amount of the Suspense Account and Pass entries (including narration) 
for the rectification of the above errors in the subsequent year’s books. (12 + 8 = 20 Marks) 
 
© The Institute of Chartered Accountants of India
Page 5


1 
Test Series: November, 2022 
MOCK TEST PAPER 2 
FOUNDATION COURSE 
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. Prior Period Items need not be separately disclosed in the current statement of profit and loss. 
ii. Capital + Long Term Liabilities= Fixed Assets + Current Assets + Cash- Current Liabilities. 
iii. The sale value of the by-product is credited to Trading Account.  
iv. Discount at the time of retirement of a bill is a gain for the drawee.  
v. If a partner retires, then other partners have a gain in their profit sharing ratio. 
vi. Net income in case of persons practicing vocation is determined by preparing profit and loss 
account.  (6 Statements x 2 Marks = 12 Marks)  
(b) Discuss the limitations which must be kept in mind while evaluating the Financial Statements. 
 (4 Marks) 
(c) From the following information provided by Mr. Shivam for the year ended 31
st
 March,2022. Find 
the unknown figures for the certain items: 
Particulars Amount (`) 
Machinery 10,00,000 
Trade Payables 70,000 
Inventory 56,000 
Total Liabilities including Capital 12,25,000 
Cash at bank 75,000 
Cash in hand ? 
Trade Receivables ? 
Opening Capital 7,50,000 
Profit during the Year  45,000 
Capital introduced during the Year 1,00,000 
Closing Capital ? 
Loans ? 
 Additional information: During the year sales of ` 13,75,000 was made of which `13,15,000 have 
been received. (4 Marks) 
 
© The Institute of Chartered Accountants of India
2 
2. (a) M/s Avneet took lease of a quarry on 1-4-2019 for ` 2,00,00,000. As per technical estimate the 
total quantity of mineral deposit is 4,00,000 tonnes. Depreciation was charged on the basis of 
depletion method. Extraction pattern is given in the following table: 
Year     Quantity of Mineral extracted 
2019 -20    4,000 tonnes 
2020-21    20,000 tonnes 
2021 -22    30,000 tonnes 
 Show the Quarry Lease Account and Depreciation Account for each year from 2019-20 to  
2021-22.  
(b) M/s Mandeep, Profit and loss account showed a net profit of ` 32,00,000, after considering the 
closing stock of ` 30,00,000 on 31
st
 March, 2022. Subsequently the following information was 
obtained from scrutiny of the books: 
(i) Purchases for the year included ` 1,20,000 paid for new electric fittings for the shop. 
(ii) M/s Mandeep gave away goods valued at ` 3,20,000 as free samples for which no entry was 
made in the books of accounts. 
(iii) Invoices for goods amounting to ` 20,00,000 have been entered on 27
th
 March, 2022, but the 
goods were not included in stock. 
(iv) In March, 2022 goods of ` 16,00,000 sold and delivered were taken in the sales for  
April, 2022. 
(v) Goods costing ` 6,00,000 were sent on sale or return in March, 2022 at a margin of profit of 
33-1/3% on cost. Though approval was given in April, 2022 these were taken as sales for 
March, 2022. 
 You are required to determine the adjusted net profit for the year ended on 31.3.2022 and calculate 
the value of stock on 31
st
 March, 2022.   (10 Marks +10 Marks= 20 Marks) 
3. (a) Mr. Y accepted a bill for ` 50,000 drawn on him by Mr. X on 1
st
 August, 2021 for 3 months.  This 
was for the amount which Y owed to X.  On the same date Mr. X got the bill discounted at his bank 
for ` 49,000. 
 On the due date, Y approached X for renewal of the bill.  Mr. X agreed on condition that ` 10,000 
be paid immediately along with interest on the remaining amount at 12% p.a. for 3 months and that 
for the remaining balance Y should accept a new bill for 3 months.  These arrangements were 
carried through.  On 31
st
 December, 2021, Y became insolvent and his estate paid 40%. 
  Prepare Journal Entries in the books of Mr. X 
(b) From the following details calculate the average due date: 
Date of Bill Amount (`) Usance of Bill 
28
th
 January, 2022 5,000 1 month 
20
th
 March, 2022 4,000 2 months 
12
th
 July, 2022 7,000 1 month 
10
th
 August, 2022 6,000 2 months 
 
© The Institute of Chartered Accountants of India
3 
(c) On 31
st
 December, 2021 goods sold at a sale price of ` 10,500 were lying with customer, Shama 
to whom these goods were sold on ‘sale or return basis’ were recorded as actual sales. Since no 
consent has been received from Shama, you are required to pass adjustment entries presuming 
goods were sent on approval at a profit of cost plus 20%. Present market price is 10% less than 
the cost price. (10 + 5 + 5 = 20 Marks) 
4.  (a) The Balance Sheet of a Partnership Firm M/s Pradeep & Associates consisted of two partners Anil 
and Bharat who were sharing Profits and Losses in the ratio of 5 : 3 respectively. The position as 
on 31-03-2022 was as follows:  
Liabilities  ` Assets  ` 
Anil's Capital  8,20,000 Land & Building  7,60,000 
Bharat's Capital  6,60,000 Plant & Machinery  3,40,000 
Profit & Loss A/c 2,24,000 Furniture  2,18,960 
Trade Creditors  1,09,600 Stock  2,90,520 
   Sundry debtors  1,20,000 
   Cash at Bank  84,120 
 18,13,600  18,13,600 
 On the above date, Dev was admitted as a partner on the following terms:  
(a)  Dev should get 1/5
th
 of share of profits.  
(b) Dev brought ` 4,80,000 as his capital and ` 64,000 for his share of Goodwill. 
(c)  Plant and Machinery would be depreciated by 15% and Land & Buildings would be 
appreciated by 40%.  
(d) A provision for doubtful debts to be created at 5% on sundry debtors.  
(e) An unrecorded liability of ` 12,000 for repairs to Buildings would be recorded in the books of 
accounts.  
(f) Immediately after Dev’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 Dev. 
(b)  Ms. Veena is engaged in business of selling magazines. Several of his customers pay money in 
advance for subscribing his magazines. Information related to year ended 31
st
 March, 2022 has 
been given below: 
 On 1.4.2021 he had a balance of ` 3,00,000 advance from customers of which ` 2,25,000 is related 
to year 2021-22 while remaining pertains to year 2022-23. During the year 2021-22 he made cash 
sales of ` 7,50,000. You are required to compute: 
(i)  Total income for the year 2021-22. 
(ii)  Total money received during the year if the closing balance in Advance from customers 
Account is ` 2,55,000.  (12 + 8 Marks) 
 
© The Institute of Chartered Accountants of India
4 
5. (a) The Receipts and Payments account of Silver Stitch Club prepared on 31st March, 2022 is as 
follows: 
Receipts and Payments Account 
 Receipts ` Amount 
` 
 Payments Amount 
` 
To 
To 
 
Balance b/d 
Annual Income from 
Subscription 
Add: Outstanding of last 
year received this year 
 
 
91,800 
 
  3,600 
95,440 
9,000 By 
 
 
By 
 
By 
Expenses (including 
Payment for sports 
material ` 54,000) 
Loss on Sale of Furniture 
(cost price ` 9,000) 
Balance c/d 
 
1,26,000 
 
3,600 
 
18,09,000 
 Less: Prepaid of last year 1,800 93,600  
  
To Other fees 
 
36,000    
To Donation for Building  18,00,000    
   19,38,600   19,38,600 
Additional information: 
Silver Stitch Club had balances as on 1.4.2021 : - 
Furniture ` 36,000; Investment at 5% ` 5,40,000; 
Sports material ` 1,33,200; 
Balance as on 31.3.2022 : Subscription Receivable ` 5,400; 
Subscription received in advance ` 1,800; 
Stock of sports material ` 36,000. 
Do you agree with above Receipts and Payments account? If not, prepare correct Receipts and 
Payments account and Income and Expenditure account for the year ended 31
st
 March, 2022 and 
Balance Sheet on that date.  
(b)   The following mistakes were located in the books of a concern after its books were closed and a 
Suspense Account was opened in order to get the Trial Balance agreed: 
(i) Sales Day Book was overcast by ` 7,000. 
(ii) Legal Expenses ` 7,670 paid to Mr. Bansal was debited to her personal account. 
(iii) General expenses ` 4,900 was posted in the General Ledger as ` 9,400. 
(iv) A Bill Receivable for ` 1,550 was passed through Bills Payable Book. The Bill was given by 
Jai. 
(v) Cash received from Deepak was debited to Vivek ` 7,500. 
(vi) A sale of ` 25,000 to Reema was wrongly debited to the Account of Shikha. 
(vii) While carrying forward the total of one page of the Purchases Book to the next, the amount 
of ` 21,690 was written as ` 21,960. 
(viii) ` 7,000 due by Mr. Surya was omitted to be taken to trial balance. 
 Find out the nature and amount of the Suspense Account and Pass entries (including narration) 
for the rectification of the above errors in the subsequent year’s books. (12 + 8 = 20 Marks) 
 
© The Institute of Chartered Accountants of India
5 
6. (a) Hari Om Limited registered with an authorised equity capital of ` 4,00,000 divided into 4,000 shares 
of ` 100 each, issued for subscription of 2,000 shares payable at ` 25 per share on application,  
` 30 per share on allotment, ` 20 per share on first call and the balance as and when required. 
Application money on 2,000 shares was duly received and allotment was made to them. The 
allotment amount was received in full, but when the first call was made, one shareholder failed to 
pay the amount on 200 shares held by him and another shareholder with 100 shares, paid the 
entire amount on his shares. The company did not make any other call. Give the necessary journal 
entries in the books of the company to record these transactions.  (10 Marks) 
(b) On 1
st
 January, 2021 Peanut Ltd. issued 12% debentures of the face value of ` 40,00,000 at 10% 
discount. Debenture interest after deducting tax at source @10% was payable on 30
th
 June and 
31
st
 December every year. All the debentures were to be redeemed after the expiry of five years 
period at 5% premium. 
 Pass necessary journal entries for the year 2021. (5 Marks) 
(c) State the causes of difference between the balance shown by the pass book and the cash book. 
OR 
Which subsidiary books are normally used in a business? (5 Marks) 
 
 
© The Institute of Chartered Accountants of India