Mock Test Paper 1 Accounting Series I (May 2025)

 Page 1


1 
Mock Test Paper - Series I: April, 2025 
Date of Paper: 22
nd
 April 2025 
Time of Paper: 2 P.M. to 5 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. Insurance claim received on account of plant and machinery completely 
damaged by fire is a capital receipt. 
ii. Wages paid for erection of machinery are debited to Profit and Loss 
Account.  
iii. The financial statements must disclose all the relevant and reliable 
information in accordance with the Full Disclosure Principle.  
iv. The business of partnership must be carried on by all the partners.  
v. The debit notes issued are used to prepare Sales Return Book.  
vi. When shares are forfeited, the share capital account is debited with called 
up capital of shares forfeited and the share forfeiture account is credited with 
Calls in arrear of shares forfeited. (6 Statements x 2 Marks = 12 Marks)  
(b) What services can a Chartered Accountant provide to the society?      (4 Marks) 
(c) The following are the details of the spare parts of a Paper Factory:  
1-1-2025  Opening Inventory  Nil  
1-1-2025 Purchases  10 units @ ` 300 per unit  
15-1-2025  Issued for consumption  5 units  
1-2-2025  Purchases  20 units @ ` 400 per unit  
 Freight incurred 500 
Page 2


1 
Mock Test Paper - Series I: April, 2025 
Date of Paper: 22
nd
 April 2025 
Time of Paper: 2 P.M. to 5 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. Insurance claim received on account of plant and machinery completely 
damaged by fire is a capital receipt. 
ii. Wages paid for erection of machinery are debited to Profit and Loss 
Account.  
iii. The financial statements must disclose all the relevant and reliable 
information in accordance with the Full Disclosure Principle.  
iv. The business of partnership must be carried on by all the partners.  
v. The debit notes issued are used to prepare Sales Return Book.  
vi. When shares are forfeited, the share capital account is debited with called 
up capital of shares forfeited and the share forfeiture account is credited with 
Calls in arrear of shares forfeited. (6 Statements x 2 Marks = 12 Marks)  
(b) What services can a Chartered Accountant provide to the society?      (4 Marks) 
(c) The following are the details of the spare parts of a Paper Factory:  
1-1-2025  Opening Inventory  Nil  
1-1-2025 Purchases  10 units @ ` 300 per unit  
15-1-2025  Issued for consumption  5 units  
1-2-2025  Purchases  20 units @ ` 400 per unit  
 Freight incurred 500 
2 
15-2-2025  Issued for consumption  10 units  
20-2-2025  Issued for consumption  10 units  
 Find out the value of Inventory as on 31.3.2025, if the company follows Weighted 
Average Method.  (4 Marks) 
 (12 + 4 + 4 = 20 Marks) 
2. (a)  On 1
st
 April,2024, Supervisor & Co. which depreciates its machinery @10% p.a. 
on diminishing balance method, had ` 29,16,000 to the debit of Machinery 
Account. On 1
st
 October, 2024, part of machinery purchased on 1
st
 April, 2022 for 
` 240,000 was sold for ` 1,35,000. 
 Also, a new machinery at a cost of ` 4,50,000 was purchased on 1
st
 October, 2024 
and installed on the same date and installation charges being ` 24,000. 
 The company changed the method of depreciation from diminishing balance 
method to straight line method with effect from 1
st 
April,2024. The rate of 
depreciation remains the same. 
 Show the Machinery Account for the year 2024-25. (10 Marks) 
(b) On 30
th
 September, 2024, the bank account of Sameer, according to the bank 
column of the Cash- Book, was overdrawn to the extent of ` 32,496. On the same 
date the bank statement showed a credit balance of ` 5,39,024 in favour of 
Sameer.  
 An examination of the Cash Book and Bank Statement reveals the following: 
1.  A cheque for ` 1,05,120 deposited on 29
th
 September, 2024 was credited 
by the bank only on 3
rd
 October, 2024 
2. A payment by cheque for ` 1,280 has been entered twice in the Cash Book. 
3. On 29
th
 September, 2024, the bank credited an amount of ` 93,920 
received from a customer of Sameer, but the advice was not received by 
Sameer until 1st October, 2024. 
4. Bank charges amounting to ` 4,640 had not been entered in the Cash 
Book. 
5. On 6
th
 September, 2024, the bank credited ` 1,60,0000 to Sameer in error. 
6. A bill of exchange for ` 11,20,000 was discounted by Sameer with his bank. 
This bill was dishonoured on 28
th
 September, 2024 but no entry had been 
made in the books of Sameer. 
Page 3


1 
Mock Test Paper - Series I: April, 2025 
Date of Paper: 22
nd
 April 2025 
Time of Paper: 2 P.M. to 5 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. Insurance claim received on account of plant and machinery completely 
damaged by fire is a capital receipt. 
ii. Wages paid for erection of machinery are debited to Profit and Loss 
Account.  
iii. The financial statements must disclose all the relevant and reliable 
information in accordance with the Full Disclosure Principle.  
iv. The business of partnership must be carried on by all the partners.  
v. The debit notes issued are used to prepare Sales Return Book.  
vi. When shares are forfeited, the share capital account is debited with called 
up capital of shares forfeited and the share forfeiture account is credited with 
Calls in arrear of shares forfeited. (6 Statements x 2 Marks = 12 Marks)  
(b) What services can a Chartered Accountant provide to the society?      (4 Marks) 
(c) The following are the details of the spare parts of a Paper Factory:  
1-1-2025  Opening Inventory  Nil  
1-1-2025 Purchases  10 units @ ` 300 per unit  
15-1-2025  Issued for consumption  5 units  
1-2-2025  Purchases  20 units @ ` 400 per unit  
 Freight incurred 500 
2 
15-2-2025  Issued for consumption  10 units  
20-2-2025  Issued for consumption  10 units  
 Find out the value of Inventory as on 31.3.2025, if the company follows Weighted 
Average Method.  (4 Marks) 
 (12 + 4 + 4 = 20 Marks) 
2. (a)  On 1
st
 April,2024, Supervisor & Co. which depreciates its machinery @10% p.a. 
on diminishing balance method, had ` 29,16,000 to the debit of Machinery 
Account. On 1
st
 October, 2024, part of machinery purchased on 1
st
 April, 2022 for 
` 240,000 was sold for ` 1,35,000. 
 Also, a new machinery at a cost of ` 4,50,000 was purchased on 1
st
 October, 2024 
and installed on the same date and installation charges being ` 24,000. 
 The company changed the method of depreciation from diminishing balance 
method to straight line method with effect from 1
st 
April,2024. The rate of 
depreciation remains the same. 
 Show the Machinery Account for the year 2024-25. (10 Marks) 
(b) On 30
th
 September, 2024, the bank account of Sameer, according to the bank 
column of the Cash- Book, was overdrawn to the extent of ` 32,496. On the same 
date the bank statement showed a credit balance of ` 5,39,024 in favour of 
Sameer.  
 An examination of the Cash Book and Bank Statement reveals the following: 
1.  A cheque for ` 1,05,120 deposited on 29
th
 September, 2024 was credited 
by the bank only on 3
rd
 October, 2024 
2. A payment by cheque for ` 1,280 has been entered twice in the Cash Book. 
3. On 29
th
 September, 2024, the bank credited an amount of ` 93,920 
received from a customer of Sameer, but the advice was not received by 
Sameer until 1st October, 2024. 
4. Bank charges amounting to ` 4,640 had not been entered in the Cash 
Book. 
5. On 6
th
 September, 2024, the bank credited ` 1,60,0000 to Sameer in error. 
6. A bill of exchange for ` 11,20,000 was discounted by Sameer with his bank. 
This bill was dishonoured on 28
th
 September, 2024 but no entry had been 
made in the books of Sameer. 
3 
7. Cheques issued upto 30
th
 September, 2024 but not presented for payment 
upto that date totalled ` 1,06,080. 
You are required to prepare a bank reconciliation statement as on that date. 
(10 Marks) 
(10 +10 = 20 Marks) 
3. (a) On 31
st
 March, 2025 the Trial Balance of Mr. Black was as follows: 
Particulars Debit 
(`) 
Particulars Credit 
(`) 
Stock on 1st April,2024  Sundry Creditors 1,50,000 
Raw Materials 2,10,000 Bills Payables 75,000 
Work-in-Progress  95,000 Sale of scrap 25,000 
Finished Goods 1,55,000 Commission received 4,500 
Sundry Debtors 2,40,000 Provision for doubtful debts 16,500 
Carriages on Purchase 15,000 Capital account 10,00,000 
Bills Receivables 1,50,000 Sales 16,72,000 
Wages 1,30,000 Bank overdraft 85,000 
Salaries 1,00,000   
Telephone and Postage 10,000   
Repairs to office furniture 3,500   
Cash at Bank 1,70,000   
Office Furniture 1,00,000   
Repairs to Plant 11,000   
Purchases 8,50,000   
Plant and Machinery 7,00,000   
Rent 60,000   
Lighting 13,500   
General Expenses     15,000    
 30,28,000  30,28,000 
  
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1 
Mock Test Paper - Series I: April, 2025 
Date of Paper: 22
nd
 April 2025 
Time of Paper: 2 P.M. to 5 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. Insurance claim received on account of plant and machinery completely 
damaged by fire is a capital receipt. 
ii. Wages paid for erection of machinery are debited to Profit and Loss 
Account.  
iii. The financial statements must disclose all the relevant and reliable 
information in accordance with the Full Disclosure Principle.  
iv. The business of partnership must be carried on by all the partners.  
v. The debit notes issued are used to prepare Sales Return Book.  
vi. When shares are forfeited, the share capital account is debited with called 
up capital of shares forfeited and the share forfeiture account is credited with 
Calls in arrear of shares forfeited. (6 Statements x 2 Marks = 12 Marks)  
(b) What services can a Chartered Accountant provide to the society?      (4 Marks) 
(c) The following are the details of the spare parts of a Paper Factory:  
1-1-2025  Opening Inventory  Nil  
1-1-2025 Purchases  10 units @ ` 300 per unit  
15-1-2025  Issued for consumption  5 units  
1-2-2025  Purchases  20 units @ ` 400 per unit  
 Freight incurred 500 
2 
15-2-2025  Issued for consumption  10 units  
20-2-2025  Issued for consumption  10 units  
 Find out the value of Inventory as on 31.3.2025, if the company follows Weighted 
Average Method.  (4 Marks) 
 (12 + 4 + 4 = 20 Marks) 
2. (a)  On 1
st
 April,2024, Supervisor & Co. which depreciates its machinery @10% p.a. 
on diminishing balance method, had ` 29,16,000 to the debit of Machinery 
Account. On 1
st
 October, 2024, part of machinery purchased on 1
st
 April, 2022 for 
` 240,000 was sold for ` 1,35,000. 
 Also, a new machinery at a cost of ` 4,50,000 was purchased on 1
st
 October, 2024 
and installed on the same date and installation charges being ` 24,000. 
 The company changed the method of depreciation from diminishing balance 
method to straight line method with effect from 1
st 
April,2024. The rate of 
depreciation remains the same. 
 Show the Machinery Account for the year 2024-25. (10 Marks) 
(b) On 30
th
 September, 2024, the bank account of Sameer, according to the bank 
column of the Cash- Book, was overdrawn to the extent of ` 32,496. On the same 
date the bank statement showed a credit balance of ` 5,39,024 in favour of 
Sameer.  
 An examination of the Cash Book and Bank Statement reveals the following: 
1.  A cheque for ` 1,05,120 deposited on 29
th
 September, 2024 was credited 
by the bank only on 3
rd
 October, 2024 
2. A payment by cheque for ` 1,280 has been entered twice in the Cash Book. 
3. On 29
th
 September, 2024, the bank credited an amount of ` 93,920 
received from a customer of Sameer, but the advice was not received by 
Sameer until 1st October, 2024. 
4. Bank charges amounting to ` 4,640 had not been entered in the Cash 
Book. 
5. On 6
th
 September, 2024, the bank credited ` 1,60,0000 to Sameer in error. 
6. A bill of exchange for ` 11,20,000 was discounted by Sameer with his bank. 
This bill was dishonoured on 28
th
 September, 2024 but no entry had been 
made in the books of Sameer. 
3 
7. Cheques issued upto 30
th
 September, 2024 but not presented for payment 
upto that date totalled ` 1,06,080. 
You are required to prepare a bank reconciliation statement as on that date. 
(10 Marks) 
(10 +10 = 20 Marks) 
3. (a) On 31
st
 March, 2025 the Trial Balance of Mr. Black was as follows: 
Particulars Debit 
(`) 
Particulars Credit 
(`) 
Stock on 1st April,2024  Sundry Creditors 1,50,000 
Raw Materials 2,10,000 Bills Payables 75,000 
Work-in-Progress  95,000 Sale of scrap 25,000 
Finished Goods 1,55,000 Commission received 4,500 
Sundry Debtors 2,40,000 Provision for doubtful debts 16,500 
Carriages on Purchase 15,000 Capital account 10,00,000 
Bills Receivables 1,50,000 Sales 16,72,000 
Wages 1,30,000 Bank overdraft 85,000 
Salaries 1,00,000   
Telephone and Postage 10,000   
Repairs to office furniture 3,500   
Cash at Bank 1,70,000   
Office Furniture 1,00,000   
Repairs to Plant 11,000   
Purchases 8,50,000   
Plant and Machinery 7,00,000   
Rent 60,000   
Lighting 13,500   
General Expenses     15,000    
 30,28,000  30,28,000 
  
4 
The following additional information is available: 
Stocks on 31
st
 March,2025 were: 
Raw material ` 1,62,000 
Finished goods ` 1,81,000 
Work-in-progress  ` 78,000 
 Salaries and wages unpaid for the year ended 31
st
 March,2025 were ` 9,000 and 
` 20,000 respectively.  Rent is to be charged as to 3/4 to factory and 1/4 to office.  
Lighting is to be charged as to 2/3 to factory and 1/3 to office. 
 Prepare the Manufacturing Account, Trading Account and Profit and Loss Account 
for the year ended on 31
st
 March,2025. (10 Marks) 
(b) X, Y and Z wee partners sharing profit & losses in the ratio of 3:2:1. They decided 
to dissolve the business as on 31
st
 March,2025 when their Balance Sheet was as 
follows: 
Liabilities  Amount 
(`) 
Assets Amount 
(`) 
Capital A/c: 
X                            14,20,000 
Y                             8,80,000 
Z                             5,00,000 
General Reserve  
Employees Provident Fund 
Trade Creditors 
 
 
 
28,00,000 
6,00,000 
2,40,000 
4,96,000 
Land & Building  
Machinery 
Furniture  
Stock 
Trade Debtors 
Cash & Bank 
19,40,000 
7,52,000 
4,20,000 
2,23,200 
6,24,000 
1,76,800 
 41,36,000  41,36,000 
 The following information is given to you: 
(i) There was an unrecorded investment which was sold for ` 1,20,000. 
(ii) One of the creditors agreed to take over some items of furniture of Book 
value ` 1,00,000 at ` 96,000. The rest of the creditors were paid at a 
discount of 5%.  
(iii) Out of the trade debtors ` 36,000 proved bad, remaining were fully 
realized.  
(iv) The other assets were realised as under: 
Page 5


1 
Mock Test Paper - Series I: April, 2025 
Date of Paper: 22
nd
 April 2025 
Time of Paper: 2 P.M. to 5 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. Insurance claim received on account of plant and machinery completely 
damaged by fire is a capital receipt. 
ii. Wages paid for erection of machinery are debited to Profit and Loss 
Account.  
iii. The financial statements must disclose all the relevant and reliable 
information in accordance with the Full Disclosure Principle.  
iv. The business of partnership must be carried on by all the partners.  
v. The debit notes issued are used to prepare Sales Return Book.  
vi. When shares are forfeited, the share capital account is debited with called 
up capital of shares forfeited and the share forfeiture account is credited with 
Calls in arrear of shares forfeited. (6 Statements x 2 Marks = 12 Marks)  
(b) What services can a Chartered Accountant provide to the society?      (4 Marks) 
(c) The following are the details of the spare parts of a Paper Factory:  
1-1-2025  Opening Inventory  Nil  
1-1-2025 Purchases  10 units @ ` 300 per unit  
15-1-2025  Issued for consumption  5 units  
1-2-2025  Purchases  20 units @ ` 400 per unit  
 Freight incurred 500 
2 
15-2-2025  Issued for consumption  10 units  
20-2-2025  Issued for consumption  10 units  
 Find out the value of Inventory as on 31.3.2025, if the company follows Weighted 
Average Method.  (4 Marks) 
 (12 + 4 + 4 = 20 Marks) 
2. (a)  On 1
st
 April,2024, Supervisor & Co. which depreciates its machinery @10% p.a. 
on diminishing balance method, had ` 29,16,000 to the debit of Machinery 
Account. On 1
st
 October, 2024, part of machinery purchased on 1
st
 April, 2022 for 
` 240,000 was sold for ` 1,35,000. 
 Also, a new machinery at a cost of ` 4,50,000 was purchased on 1
st
 October, 2024 
and installed on the same date and installation charges being ` 24,000. 
 The company changed the method of depreciation from diminishing balance 
method to straight line method with effect from 1
st 
April,2024. The rate of 
depreciation remains the same. 
 Show the Machinery Account for the year 2024-25. (10 Marks) 
(b) On 30
th
 September, 2024, the bank account of Sameer, according to the bank 
column of the Cash- Book, was overdrawn to the extent of ` 32,496. On the same 
date the bank statement showed a credit balance of ` 5,39,024 in favour of 
Sameer.  
 An examination of the Cash Book and Bank Statement reveals the following: 
1.  A cheque for ` 1,05,120 deposited on 29
th
 September, 2024 was credited 
by the bank only on 3
rd
 October, 2024 
2. A payment by cheque for ` 1,280 has been entered twice in the Cash Book. 
3. On 29
th
 September, 2024, the bank credited an amount of ` 93,920 
received from a customer of Sameer, but the advice was not received by 
Sameer until 1st October, 2024. 
4. Bank charges amounting to ` 4,640 had not been entered in the Cash 
Book. 
5. On 6
th
 September, 2024, the bank credited ` 1,60,0000 to Sameer in error. 
6. A bill of exchange for ` 11,20,000 was discounted by Sameer with his bank. 
This bill was dishonoured on 28
th
 September, 2024 but no entry had been 
made in the books of Sameer. 
3 
7. Cheques issued upto 30
th
 September, 2024 but not presented for payment 
upto that date totalled ` 1,06,080. 
You are required to prepare a bank reconciliation statement as on that date. 
(10 Marks) 
(10 +10 = 20 Marks) 
3. (a) On 31
st
 March, 2025 the Trial Balance of Mr. Black was as follows: 
Particulars Debit 
(`) 
Particulars Credit 
(`) 
Stock on 1st April,2024  Sundry Creditors 1,50,000 
Raw Materials 2,10,000 Bills Payables 75,000 
Work-in-Progress  95,000 Sale of scrap 25,000 
Finished Goods 1,55,000 Commission received 4,500 
Sundry Debtors 2,40,000 Provision for doubtful debts 16,500 
Carriages on Purchase 15,000 Capital account 10,00,000 
Bills Receivables 1,50,000 Sales 16,72,000 
Wages 1,30,000 Bank overdraft 85,000 
Salaries 1,00,000   
Telephone and Postage 10,000   
Repairs to office furniture 3,500   
Cash at Bank 1,70,000   
Office Furniture 1,00,000   
Repairs to Plant 11,000   
Purchases 8,50,000   
Plant and Machinery 7,00,000   
Rent 60,000   
Lighting 13,500   
General Expenses     15,000    
 30,28,000  30,28,000 
  
4 
The following additional information is available: 
Stocks on 31
st
 March,2025 were: 
Raw material ` 1,62,000 
Finished goods ` 1,81,000 
Work-in-progress  ` 78,000 
 Salaries and wages unpaid for the year ended 31
st
 March,2025 were ` 9,000 and 
` 20,000 respectively.  Rent is to be charged as to 3/4 to factory and 1/4 to office.  
Lighting is to be charged as to 2/3 to factory and 1/3 to office. 
 Prepare the Manufacturing Account, Trading Account and Profit and Loss Account 
for the year ended on 31
st
 March,2025. (10 Marks) 
(b) X, Y and Z wee partners sharing profit & losses in the ratio of 3:2:1. They decided 
to dissolve the business as on 31
st
 March,2025 when their Balance Sheet was as 
follows: 
Liabilities  Amount 
(`) 
Assets Amount 
(`) 
Capital A/c: 
X                            14,20,000 
Y                             8,80,000 
Z                             5,00,000 
General Reserve  
Employees Provident Fund 
Trade Creditors 
 
 
 
28,00,000 
6,00,000 
2,40,000 
4,96,000 
Land & Building  
Machinery 
Furniture  
Stock 
Trade Debtors 
Cash & Bank 
19,40,000 
7,52,000 
4,20,000 
2,23,200 
6,24,000 
1,76,800 
 41,36,000  41,36,000 
 The following information is given to you: 
(i) There was an unrecorded investment which was sold for ` 1,20,000. 
(ii) One of the creditors agreed to take over some items of furniture of Book 
value ` 1,00,000 at ` 96,000. The rest of the creditors were paid at a 
discount of 5%.  
(iii) Out of the trade debtors ` 36,000 proved bad, remaining were fully 
realized.  
(iv) The other assets were realised as under: 
5 
Land & Building  ` 21,00,000 
Machinery ` 6,80,000 
Furniture Remaining taken over by X at ` 3,00,000 
Stock ` 2,40,000 
(v) Expenses of dissolution amounted to ` 74,800. 
(vi) There was an outstanding bill for repairs which had to be paid for ` 14,000. 
You are required to prepare: 
(1) Realisation A/c 
(2) Cash & Bank A/c 
(3) Partner’s Capital A/c in the books of partnership firm. (10 Marks) 
 (10 + 10 = 20 Marks) 
4.  (a)  Alpha and Beta are partners, sharing profits and losses in the proportion of 3/4
th
 
and 1/4
th
 As at 31
st
 March, 2025, following is the Balance Sheet of Alpha and Beta. 
Balance Sheet as at 31
st
 March, 2025 
Liabilities  (`) Assets (`) 
Capital accounts   Land and building 7,50,000 
Alpha 8,55,000  Office furniture    30,000 
Beta 4,65,000 13,20,000 Sundry Debtors 4,80,000 
   Stock 6,00,000 
General reserve  1,80,000 Bills receivable 90,000 
Creditors  11,25,000 Cash in hand 3,45,000 
   Cash at bank 3,30,000 
              
  26,25,000  26,25,000 
 They agreed to take Gama into Partnership on 1
st
 April, 2025 on the following terms: 
(i) Goodwill is to be valued at ` 6,00,000. Gama is unable to bring cash for 
his share of goodwill. So, it was decided that due credit for goodwill be 
given to Alpha and Beta for their sacrifice in favour of Gama through 
Gama’s current account. 
(ii) Gama pays ` 4,20,000 as his capital for 1/5
th
 share in the future profits. 
(iii) Stock and Furniture to be reduced by 10%.