Mock Test Paper 1 Accounting Series I (January 2025)

 Page 1


1 
Mock Test Paper - Series I: December, 2024 
Date of Paper: 20
th
 December, 2024 
Time of Paper: 10.30 A.M. to 1.30 P.M. 
 
FOUNDATION COURSE 
PAPER – 1: 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) A claim that an enterprise is pursuing through legal process, where 
the outcome is uncertain, is a contingent liability.  
(ii) If the effect of errors committed cancel out, the errors will be called 
compensating errors and the trial balance will disagree. 
(iii) Stock at the end, if appears in the trial balance, is taken only to the 
Balance Sheet.  
(iv)  Re-issue of forfeited shares is allotment of shares but not a sale. 
(v)  Both revenue and capital nature transactions are recorded in the 
Receipts and Payments Account.  
(vi)  Since company has existence independent of its members, it 
continues to be in existence despite the death, insolvency or 
change of members. (6 Statements x 2 Marks = 12 Marks)  
(b) Distinguish between Money Measurement concept and Matching 
concept.   (4 Marks) 
(c) The following are the details of the spare parts of a Chemical Mill:  
1-1-2024  Opening Inventory   Nil  
1-1-2024 Purchases   100 units @ ` 300 per unit  
15-1-2024  Issued for consumption   50 units  
1-2-2024  Purchases   200 units @ ` 400 per unit  
15-2-2024  Issued for consumption   100 units  
20-2-2024  Issued for consumption   100 units  
 Find out the value of Inventory as on 31.3.2024, if the company follows 
Weighted Average Method. (4 Marks) 
  (12+4+4 =20 Marks) 
  
Page 2


1 
Mock Test Paper - Series I: December, 2024 
Date of Paper: 20
th
 December, 2024 
Time of Paper: 10.30 A.M. to 1.30 P.M. 
 
FOUNDATION COURSE 
PAPER – 1: 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) A claim that an enterprise is pursuing through legal process, where 
the outcome is uncertain, is a contingent liability.  
(ii) If the effect of errors committed cancel out, the errors will be called 
compensating errors and the trial balance will disagree. 
(iii) Stock at the end, if appears in the trial balance, is taken only to the 
Balance Sheet.  
(iv)  Re-issue of forfeited shares is allotment of shares but not a sale. 
(v)  Both revenue and capital nature transactions are recorded in the 
Receipts and Payments Account.  
(vi)  Since company has existence independent of its members, it 
continues to be in existence despite the death, insolvency or 
change of members. (6 Statements x 2 Marks = 12 Marks)  
(b) Distinguish between Money Measurement concept and Matching 
concept.   (4 Marks) 
(c) The following are the details of the spare parts of a Chemical Mill:  
1-1-2024  Opening Inventory   Nil  
1-1-2024 Purchases   100 units @ ` 300 per unit  
15-1-2024  Issued for consumption   50 units  
1-2-2024  Purchases   200 units @ ` 400 per unit  
15-2-2024  Issued for consumption   100 units  
20-2-2024  Issued for consumption   100 units  
 Find out the value of Inventory as on 31.3.2024, if the company follows 
Weighted Average Method. (4 Marks) 
  (12+4+4 =20 Marks) 
  
2 
2. (a) Before preparation of the trial balance, the following errors were found 
in the books of Saraswat & Sons. Give the necessary entries to correct 
them. 
(i) Furniture purchased for office use amounting to ` 20,000 has been 
entered in the purchase day book. 
(ii)  An amount of ` 3,000 due from Satyam, which had been written off 
as bad debts in the previous year, recovered in the current year, 
and had been posted to the personal Account of Satyam. 
(iii)  Minor Repairs made to the building amounting to ` 18,500 were 
debited to the Building Account  
(iv)  Goods purchased from Ram Singh amounting to ` 18,000 have 
remained unrecorded so far. 
(v)  College fees of proprietor's son, ` 15,000 debited to the Audit fees 
Account.  
(vi)  Receipt of ` 4,500 from Kanika credited to the Anita. 
(vii)  Goods amounting to ` 8,900 had been returned by a customer and 
were taken into inventory, but no entry was made in the books. 
(viii)  ` 7,500 paid for wages to workmen for making office furniture had 
been charged to wages account. 
(ix)  Salary paid to a clerk ` 18,000 has been debited to his personal 
account. 
(x)  A purchase of goods from Raghav amounting to ` 20,000 has been 
wrongly entered through the sales book.   (10 Marks) 
(b) S Chand & Associates purchased a machine for ` 3,00,000 on 1.1.2021 
Another machine costing `4,50,000 was purchased on 1.7.2022. On 
31.12.2023 the machine purchased on 1.1.2021 was sold for `1,50,000. 
The company provides depreciation at 15% on Written Down Value 
Method. The company closes its accounts on 31st December every year. 
Prepare – (i) Machinery Account, (ii) Machinery Disposal Account and 
(iii) Provision for Depreciation Account.   (10 Marks) 
  (10 +10 = 20 Marks) 
3.  (a)  P, Q, R and S had been carrying on business in partnership sharing 
profits & losses in the ratio of 4:3:2:1.  They decided to dissolve the 
partnership on the basis of following Balance Sheet as on 30th April, 
2024: 
Liabilities Amount 
(`)  
Assets Amount (`) 
Capital Accounts  Land & building 2,46,000 
 P 2,16,000  Furniture & fixtures 65,000 
 Q 1,44,000 3,60,000 Stock 1,00,000 
  Debtors 72,500 
Page 3


1 
Mock Test Paper - Series I: December, 2024 
Date of Paper: 20
th
 December, 2024 
Time of Paper: 10.30 A.M. to 1.30 P.M. 
 
FOUNDATION COURSE 
PAPER – 1: 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) A claim that an enterprise is pursuing through legal process, where 
the outcome is uncertain, is a contingent liability.  
(ii) If the effect of errors committed cancel out, the errors will be called 
compensating errors and the trial balance will disagree. 
(iii) Stock at the end, if appears in the trial balance, is taken only to the 
Balance Sheet.  
(iv)  Re-issue of forfeited shares is allotment of shares but not a sale. 
(v)  Both revenue and capital nature transactions are recorded in the 
Receipts and Payments Account.  
(vi)  Since company has existence independent of its members, it 
continues to be in existence despite the death, insolvency or 
change of members. (6 Statements x 2 Marks = 12 Marks)  
(b) Distinguish between Money Measurement concept and Matching 
concept.   (4 Marks) 
(c) The following are the details of the spare parts of a Chemical Mill:  
1-1-2024  Opening Inventory   Nil  
1-1-2024 Purchases   100 units @ ` 300 per unit  
15-1-2024  Issued for consumption   50 units  
1-2-2024  Purchases   200 units @ ` 400 per unit  
15-2-2024  Issued for consumption   100 units  
20-2-2024  Issued for consumption   100 units  
 Find out the value of Inventory as on 31.3.2024, if the company follows 
Weighted Average Method. (4 Marks) 
  (12+4+4 =20 Marks) 
  
2 
2. (a) Before preparation of the trial balance, the following errors were found 
in the books of Saraswat & Sons. Give the necessary entries to correct 
them. 
(i) Furniture purchased for office use amounting to ` 20,000 has been 
entered in the purchase day book. 
(ii)  An amount of ` 3,000 due from Satyam, which had been written off 
as bad debts in the previous year, recovered in the current year, 
and had been posted to the personal Account of Satyam. 
(iii)  Minor Repairs made to the building amounting to ` 18,500 were 
debited to the Building Account  
(iv)  Goods purchased from Ram Singh amounting to ` 18,000 have 
remained unrecorded so far. 
(v)  College fees of proprietor's son, ` 15,000 debited to the Audit fees 
Account.  
(vi)  Receipt of ` 4,500 from Kanika credited to the Anita. 
(vii)  Goods amounting to ` 8,900 had been returned by a customer and 
were taken into inventory, but no entry was made in the books. 
(viii)  ` 7,500 paid for wages to workmen for making office furniture had 
been charged to wages account. 
(ix)  Salary paid to a clerk ` 18,000 has been debited to his personal 
account. 
(x)  A purchase of goods from Raghav amounting to ` 20,000 has been 
wrongly entered through the sales book.   (10 Marks) 
(b) S Chand & Associates purchased a machine for ` 3,00,000 on 1.1.2021 
Another machine costing `4,50,000 was purchased on 1.7.2022. On 
31.12.2023 the machine purchased on 1.1.2021 was sold for `1,50,000. 
The company provides depreciation at 15% on Written Down Value 
Method. The company closes its accounts on 31st December every year. 
Prepare – (i) Machinery Account, (ii) Machinery Disposal Account and 
(iii) Provision for Depreciation Account.   (10 Marks) 
  (10 +10 = 20 Marks) 
3.  (a)  P, Q, R and S had been carrying on business in partnership sharing 
profits & losses in the ratio of 4:3:2:1.  They decided to dissolve the 
partnership on the basis of following Balance Sheet as on 30th April, 
2024: 
Liabilities Amount 
(`)  
Assets Amount (`) 
Capital Accounts  Land & building 2,46,000 
 P 2,16,000  Furniture & fixtures 65,000 
 Q 1,44,000 3,60,000 Stock 1,00,000 
  Debtors 72,500 
3 
  Cash in hand 15,500 
Sundry creditors 36,000 Capital overdrawn:  
Mortgage loan 1,10,000 R 1,000  
  S 6,000 7,000 
 5,06,000  5,06,000 
(i) The assets were realized as under:   ` 
 Land & building       2,30,000 
 Furniture & fixtures         42,000 
 Stock           72,000 
 Debtors           65,000 
(ii) Expenses of dissolution amounted to ` 7,800. 
(iii) Further creditors of ` 18,000 had to be met. 
(iv) R became insolvent and nothing was realized from his private 
estate. 
 Applying the principles laid down in Garner Vs. Murray, prepare the 
Realisation Account, Partners’ Capital Accounts and Cash Account.  
(12 Marks) 
(b)  Mr. Dilip furnishes the following trial balance and some other information: 
Trial Balance as on 31st March, 2024 
Particulars ` ` 
Capital  19,50,000 
Purchases and Sales 12,90,000 29,10,000 
Opening Inventory 3,30,000  
Freights Inward  1,20,000  
Salaries 6,30,000  
Administration Expenses 4,50,000  
Furniture 10,50,000  
Trade receivables and Trade payables 6,30,000 5,70,000 
Returns 60,000 36,000 
Discount allowed and Received 57,000 27,000 
Bad Debts 15,000  
Investments in Government Securities 3,00,000  
Cash in Hand and Cash at Bank 
Input CGST 
Input SGST 
Output CGST 
Output SGST 
5,67,000 
30,000 
30,000 
 
 
 
      24,000 
     24,000 
Page 4


1 
Mock Test Paper - Series I: December, 2024 
Date of Paper: 20
th
 December, 2024 
Time of Paper: 10.30 A.M. to 1.30 P.M. 
 
FOUNDATION COURSE 
PAPER – 1: 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) A claim that an enterprise is pursuing through legal process, where 
the outcome is uncertain, is a contingent liability.  
(ii) If the effect of errors committed cancel out, the errors will be called 
compensating errors and the trial balance will disagree. 
(iii) Stock at the end, if appears in the trial balance, is taken only to the 
Balance Sheet.  
(iv)  Re-issue of forfeited shares is allotment of shares but not a sale. 
(v)  Both revenue and capital nature transactions are recorded in the 
Receipts and Payments Account.  
(vi)  Since company has existence independent of its members, it 
continues to be in existence despite the death, insolvency or 
change of members. (6 Statements x 2 Marks = 12 Marks)  
(b) Distinguish between Money Measurement concept and Matching 
concept.   (4 Marks) 
(c) The following are the details of the spare parts of a Chemical Mill:  
1-1-2024  Opening Inventory   Nil  
1-1-2024 Purchases   100 units @ ` 300 per unit  
15-1-2024  Issued for consumption   50 units  
1-2-2024  Purchases   200 units @ ` 400 per unit  
15-2-2024  Issued for consumption   100 units  
20-2-2024  Issued for consumption   100 units  
 Find out the value of Inventory as on 31.3.2024, if the company follows 
Weighted Average Method. (4 Marks) 
  (12+4+4 =20 Marks) 
  
2 
2. (a) Before preparation of the trial balance, the following errors were found 
in the books of Saraswat & Sons. Give the necessary entries to correct 
them. 
(i) Furniture purchased for office use amounting to ` 20,000 has been 
entered in the purchase day book. 
(ii)  An amount of ` 3,000 due from Satyam, which had been written off 
as bad debts in the previous year, recovered in the current year, 
and had been posted to the personal Account of Satyam. 
(iii)  Minor Repairs made to the building amounting to ` 18,500 were 
debited to the Building Account  
(iv)  Goods purchased from Ram Singh amounting to ` 18,000 have 
remained unrecorded so far. 
(v)  College fees of proprietor's son, ` 15,000 debited to the Audit fees 
Account.  
(vi)  Receipt of ` 4,500 from Kanika credited to the Anita. 
(vii)  Goods amounting to ` 8,900 had been returned by a customer and 
were taken into inventory, but no entry was made in the books. 
(viii)  ` 7,500 paid for wages to workmen for making office furniture had 
been charged to wages account. 
(ix)  Salary paid to a clerk ` 18,000 has been debited to his personal 
account. 
(x)  A purchase of goods from Raghav amounting to ` 20,000 has been 
wrongly entered through the sales book.   (10 Marks) 
(b) S Chand & Associates purchased a machine for ` 3,00,000 on 1.1.2021 
Another machine costing `4,50,000 was purchased on 1.7.2022. On 
31.12.2023 the machine purchased on 1.1.2021 was sold for `1,50,000. 
The company provides depreciation at 15% on Written Down Value 
Method. The company closes its accounts on 31st December every year. 
Prepare – (i) Machinery Account, (ii) Machinery Disposal Account and 
(iii) Provision for Depreciation Account.   (10 Marks) 
  (10 +10 = 20 Marks) 
3.  (a)  P, Q, R and S had been carrying on business in partnership sharing 
profits & losses in the ratio of 4:3:2:1.  They decided to dissolve the 
partnership on the basis of following Balance Sheet as on 30th April, 
2024: 
Liabilities Amount 
(`)  
Assets Amount (`) 
Capital Accounts  Land & building 2,46,000 
 P 2,16,000  Furniture & fixtures 65,000 
 Q 1,44,000 3,60,000 Stock 1,00,000 
  Debtors 72,500 
3 
  Cash in hand 15,500 
Sundry creditors 36,000 Capital overdrawn:  
Mortgage loan 1,10,000 R 1,000  
  S 6,000 7,000 
 5,06,000  5,06,000 
(i) The assets were realized as under:   ` 
 Land & building       2,30,000 
 Furniture & fixtures         42,000 
 Stock           72,000 
 Debtors           65,000 
(ii) Expenses of dissolution amounted to ` 7,800. 
(iii) Further creditors of ` 18,000 had to be met. 
(iv) R became insolvent and nothing was realized from his private 
estate. 
 Applying the principles laid down in Garner Vs. Murray, prepare the 
Realisation Account, Partners’ Capital Accounts and Cash Account.  
(12 Marks) 
(b)  Mr. Dilip furnishes the following trial balance and some other information: 
Trial Balance as on 31st March, 2024 
Particulars ` ` 
Capital  19,50,000 
Purchases and Sales 12,90,000 29,10,000 
Opening Inventory 3,30,000  
Freights Inward  1,20,000  
Salaries 6,30,000  
Administration Expenses 4,50,000  
Furniture 10,50,000  
Trade receivables and Trade payables 6,30,000 5,70,000 
Returns 60,000 36,000 
Discount allowed and Received 57,000 27,000 
Bad Debts 15,000  
Investments in Government Securities 3,00,000  
Cash in Hand and Cash at Bank 
Input CGST 
Input SGST 
Output CGST 
Output SGST 
5,67,000 
30,000 
30,000 
 
 
 
      24,000 
     24,000 
4 
Output IGST       18,000 
 55,59,000 55,59,000 
Additional information 
(i) Inventory as on 31
st
 march,2024 was ` 5,40,000. 
(ii) Furniture is depreciated at 15% per annum. 
 Prepare Trading Account, Profit and Loss Account and Balance Sheet 
as on 31
st
 March, 2024 of Mr. Dilip. (8 Marks) 
 (12+8 = 20 Marks) 
4 (a) New State Society showed the following position on 31
st
 March, 2023: 
Balance Sheet as on 31
st
 March, 2023 
Liabilities `   Assets `   
Capital fund 15,86,000 Electrical fittings 3,00,000 
Expenses payable 14,000 Furniture 1,00,000 
  Books 8,00,000 
  Investment in 
securities 
3,00,000 
  Cash at bank 50,000 
   Cash in hand    50,000 
 16,00,000  16,00,000 
 The receipts and payment account for the year ended on 31
st
 March, 
2024 is given below: 
 `    `   
To Balance b/d  By Electric charges 14,400 
Cash at bank     50,000  By Postage and stationary 10,000 
Cash in hand     50,000 1,00,000 By Telephone charges 10,000 
To Entrance fee 60,000 By Books purchased 1,20,000 
To Membership subscription 
4,00,000 
By Outstanding expenses 
paid 
14,000 
To Sale proceeds of old 
papers  
3,000 
By Rent  
1,76,000 
To Hire of lecture hall 
40,000 
By Investment in 
securities 
80,000 
To Interest on securities 16,000 By Salaries 1,32,000 
  By Balance c/d   
  Cash at bank 40,000 
   Cash in hand    22,600 
 6,19,000  6,19,000 
Page 5


1 
Mock Test Paper - Series I: December, 2024 
Date of Paper: 20
th
 December, 2024 
Time of Paper: 10.30 A.M. to 1.30 P.M. 
 
FOUNDATION COURSE 
PAPER – 1: 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) A claim that an enterprise is pursuing through legal process, where 
the outcome is uncertain, is a contingent liability.  
(ii) If the effect of errors committed cancel out, the errors will be called 
compensating errors and the trial balance will disagree. 
(iii) Stock at the end, if appears in the trial balance, is taken only to the 
Balance Sheet.  
(iv)  Re-issue of forfeited shares is allotment of shares but not a sale. 
(v)  Both revenue and capital nature transactions are recorded in the 
Receipts and Payments Account.  
(vi)  Since company has existence independent of its members, it 
continues to be in existence despite the death, insolvency or 
change of members. (6 Statements x 2 Marks = 12 Marks)  
(b) Distinguish between Money Measurement concept and Matching 
concept.   (4 Marks) 
(c) The following are the details of the spare parts of a Chemical Mill:  
1-1-2024  Opening Inventory   Nil  
1-1-2024 Purchases   100 units @ ` 300 per unit  
15-1-2024  Issued for consumption   50 units  
1-2-2024  Purchases   200 units @ ` 400 per unit  
15-2-2024  Issued for consumption   100 units  
20-2-2024  Issued for consumption   100 units  
 Find out the value of Inventory as on 31.3.2024, if the company follows 
Weighted Average Method. (4 Marks) 
  (12+4+4 =20 Marks) 
  
2 
2. (a) Before preparation of the trial balance, the following errors were found 
in the books of Saraswat & Sons. Give the necessary entries to correct 
them. 
(i) Furniture purchased for office use amounting to ` 20,000 has been 
entered in the purchase day book. 
(ii)  An amount of ` 3,000 due from Satyam, which had been written off 
as bad debts in the previous year, recovered in the current year, 
and had been posted to the personal Account of Satyam. 
(iii)  Minor Repairs made to the building amounting to ` 18,500 were 
debited to the Building Account  
(iv)  Goods purchased from Ram Singh amounting to ` 18,000 have 
remained unrecorded so far. 
(v)  College fees of proprietor's son, ` 15,000 debited to the Audit fees 
Account.  
(vi)  Receipt of ` 4,500 from Kanika credited to the Anita. 
(vii)  Goods amounting to ` 8,900 had been returned by a customer and 
were taken into inventory, but no entry was made in the books. 
(viii)  ` 7,500 paid for wages to workmen for making office furniture had 
been charged to wages account. 
(ix)  Salary paid to a clerk ` 18,000 has been debited to his personal 
account. 
(x)  A purchase of goods from Raghav amounting to ` 20,000 has been 
wrongly entered through the sales book.   (10 Marks) 
(b) S Chand & Associates purchased a machine for ` 3,00,000 on 1.1.2021 
Another machine costing `4,50,000 was purchased on 1.7.2022. On 
31.12.2023 the machine purchased on 1.1.2021 was sold for `1,50,000. 
The company provides depreciation at 15% on Written Down Value 
Method. The company closes its accounts on 31st December every year. 
Prepare – (i) Machinery Account, (ii) Machinery Disposal Account and 
(iii) Provision for Depreciation Account.   (10 Marks) 
  (10 +10 = 20 Marks) 
3.  (a)  P, Q, R and S had been carrying on business in partnership sharing 
profits & losses in the ratio of 4:3:2:1.  They decided to dissolve the 
partnership on the basis of following Balance Sheet as on 30th April, 
2024: 
Liabilities Amount 
(`)  
Assets Amount (`) 
Capital Accounts  Land & building 2,46,000 
 P 2,16,000  Furniture & fixtures 65,000 
 Q 1,44,000 3,60,000 Stock 1,00,000 
  Debtors 72,500 
3 
  Cash in hand 15,500 
Sundry creditors 36,000 Capital overdrawn:  
Mortgage loan 1,10,000 R 1,000  
  S 6,000 7,000 
 5,06,000  5,06,000 
(i) The assets were realized as under:   ` 
 Land & building       2,30,000 
 Furniture & fixtures         42,000 
 Stock           72,000 
 Debtors           65,000 
(ii) Expenses of dissolution amounted to ` 7,800. 
(iii) Further creditors of ` 18,000 had to be met. 
(iv) R became insolvent and nothing was realized from his private 
estate. 
 Applying the principles laid down in Garner Vs. Murray, prepare the 
Realisation Account, Partners’ Capital Accounts and Cash Account.  
(12 Marks) 
(b)  Mr. Dilip furnishes the following trial balance and some other information: 
Trial Balance as on 31st March, 2024 
Particulars ` ` 
Capital  19,50,000 
Purchases and Sales 12,90,000 29,10,000 
Opening Inventory 3,30,000  
Freights Inward  1,20,000  
Salaries 6,30,000  
Administration Expenses 4,50,000  
Furniture 10,50,000  
Trade receivables and Trade payables 6,30,000 5,70,000 
Returns 60,000 36,000 
Discount allowed and Received 57,000 27,000 
Bad Debts 15,000  
Investments in Government Securities 3,00,000  
Cash in Hand and Cash at Bank 
Input CGST 
Input SGST 
Output CGST 
Output SGST 
5,67,000 
30,000 
30,000 
 
 
 
      24,000 
     24,000 
4 
Output IGST       18,000 
 55,59,000 55,59,000 
Additional information 
(i) Inventory as on 31
st
 march,2024 was ` 5,40,000. 
(ii) Furniture is depreciated at 15% per annum. 
 Prepare Trading Account, Profit and Loss Account and Balance Sheet 
as on 31
st
 March, 2024 of Mr. Dilip. (8 Marks) 
 (12+8 = 20 Marks) 
4 (a) New State Society showed the following position on 31
st
 March, 2023: 
Balance Sheet as on 31
st
 March, 2023 
Liabilities `   Assets `   
Capital fund 15,86,000 Electrical fittings 3,00,000 
Expenses payable 14,000 Furniture 1,00,000 
  Books 8,00,000 
  Investment in 
securities 
3,00,000 
  Cash at bank 50,000 
   Cash in hand    50,000 
 16,00,000  16,00,000 
 The receipts and payment account for the year ended on 31
st
 March, 
2024 is given below: 
 `    `   
To Balance b/d  By Electric charges 14,400 
Cash at bank     50,000  By Postage and stationary 10,000 
Cash in hand     50,000 1,00,000 By Telephone charges 10,000 
To Entrance fee 60,000 By Books purchased 1,20,000 
To Membership subscription 
4,00,000 
By Outstanding expenses 
paid 
14,000 
To Sale proceeds of old 
papers  
3,000 
By Rent  
1,76,000 
To Hire of lecture hall 
40,000 
By Investment in 
securities 
80,000 
To Interest on securities 16,000 By Salaries 1,32,000 
  By Balance c/d   
  Cash at bank 40,000 
   Cash in hand    22,600 
 6,19,000  6,19,000 
5 
 You are required to prepare Income and Expenditure account for the 
year ended 31
st
 March, 2024 after making the following adjustments: 
 Membership subscription included ` 20,000 received in advance. 
 Provide for outstanding rent ` 8,000 and salaries ` 6,000. 
 Books to be depreciated @ 10% per annum including additions. The 
additions to the books were made on 01.04.2023.  Electrical fittings and 
furniture are also to be depreciated @ 10% per annum. 
 60% of the entrance fees is to be capitalized. 
 Interest on securities is to be calculated @ 15% p.a. including purchases 
made on 1.10.2023 for ` 80,000.  (8 Marks) 
(b)  The following is the Balance Sheet of M/s. Krishna Bros as at  
31st March, 2024, they share profit and losses equally: 
Balance Sheet as at 31st March, 2024 
Liabilities  ` Assets   ` 
Capital  Amit 24,600 Machinery  30,000 
 Lalit 24,600 Furniture  16,800 
 Sumit 27,000 Fixture  12,600 
General Reserve  9,000 Cash  9,000 
Trade payables  14,100 Inventories  5,700 
   Trade receivables 27,000  
   Less: Provision for 
Doubtful debts  
1,800 25,200 
      
  99,300   99,300 
 Sumit died on 1st April, 2024 and the following agreement was to be put 
into effect. 
(a) Assets were to be revalued: Machinery to ` 35,100; Furniture to  
` 13,800; Inventory to ` 4,500. 
(b) Goodwill was valued at ` 18,000 and was to be credited with his 
share, without using a Goodwill Account.  
(c) ` 6,000 is to be paid to the executors of the dead partner on 5th 
April, 2024. 
(d) After death of Sumit, Amit and Lalit shares the profit equally. 
You are required to prepare: 
(i) Journal Entry for Goodwill adjustment. 
(ii)   Revaluation Account, Capital Accounts of the partners and Balance 
Sheet after the death of Sumit.  (12 Marks)  
  (8 +12 = 20 Marks)