Accounting Model Test Paper - 1 (Questions) | Mock Tests & Past Year Papers for CA Foundation PDF Download

 Page 1


MODEL TEST PAPER 1 
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) Accounting Standards for non-corporate entities in India are
issued by the Central Government.
(ii) Subsidy received from the government for working capital by a
manufacturing concern is a revenue receipt.
(iii) Reducing balance method of depreciation is followed to have a
uniform charge for depreciation and repairs and maintenance
together.
(iv) Discount at the time of retirement of a bill is a gain for the drawee.
(v) Business of partnership comes to an end on death of a partner.
(vi) Receipts and Payments Account highlights total income and
expenditure. (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) The balance of Machinery Account of a firm on 1st April, 2023 was
` 28,54,000. Out of this, a plant having book value of ` 2,16,000 as on
1st April, 2023 was sold on 1st July, 2023 for ` 82,000.  On the same
date a new plant was purchased for ` 4,58,000 and ` 22,000 was spent
on its erection. On 1st November, 2023 a new machine was purchased
for ` 5,60,000.  Depreciation is written off @ 15% per annum under the
diminishing balance method.  Calculate the depreciation for the year
ended 31st March, 2024.     (4 Marks)
(12+4+4= 20 Marks)
2. (a) Mr. B h a t t ’ s trial balance as on 31st March, 2024 did not agree.  The
difference was put to a Suspense Account. 
During the next trading period, the following errors were discovered: 
(i) The total of the Purchases Book of one page, ` 5,615 was carried
forward to the next page as ` 6,551.
1
Page 2


MODEL TEST PAPER 1 
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) Accounting Standards for non-corporate entities in India are
issued by the Central Government.
(ii) Subsidy received from the government for working capital by a
manufacturing concern is a revenue receipt.
(iii) Reducing balance method of depreciation is followed to have a
uniform charge for depreciation and repairs and maintenance
together.
(iv) Discount at the time of retirement of a bill is a gain for the drawee.
(v) Business of partnership comes to an end on death of a partner.
(vi) Receipts and Payments Account highlights total income and
expenditure. (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) The balance of Machinery Account of a firm on 1st April, 2023 was
` 28,54,000. Out of this, a plant having book value of ` 2,16,000 as on
1st April, 2023 was sold on 1st July, 2023 for ` 82,000.  On the same
date a new plant was purchased for ` 4,58,000 and ` 22,000 was spent
on its erection. On 1st November, 2023 a new machine was purchased
for ` 5,60,000.  Depreciation is written off @ 15% per annum under the
diminishing balance method.  Calculate the depreciation for the year
ended 31st March, 2024.     (4 Marks)
(12+4+4= 20 Marks)
2. (a) Mr. B h a t t ’ s trial balance as on 31st March, 2024 did not agree.  The
difference was put to a Suspense Account. 
During the next trading period, the following errors were discovered: 
(i) The total of the Purchases Book of one page, ` 5,615 was carried
forward to the next page as ` 6,551.
1
(ii) A sale of ` 462 was entered in the Sales Book as ` 642 and
posted to the credit of the customer.
(iii) A return to creditor, ` 300 was entered in the Returns Inward
Book; however, the creditor's account was correctly posted.
(iv) Cash received from Geet, ` 895 was posted to debit of Meet.
(v) Goods worth ` 1,400 were dispatched to a customer before the
close of the year but no invoice was made out.
(vi) Goods worth ` 1,600 were sent on sale or return basis to a
customer and entered in the Sales Book at the close of the year,
the customer still had the option to return the goods.  The gross
profit margin was 20% on Sale.
(vii) ` 500 due from Mr. Manas was omitted to be taken ·to the trial
balance.
(viii) Sale of goods to Mr. Deep for ` 6,000 was omitted to be recorded.
You are required to give journal entries to rectify the errors in a way so 
as to show the current year's profit or loss correctly (10 Marks) 
(b) The Bank Pass Book of Account No.7749 of Ms. Tina showed an
overdraft of ` 1,34,300 on 31
st
 March 2024. On going through the Pass
Book, the accountant found the following:
(i) A Cheque of `4,320 credited in the pass book on 28
th
 March 2024
being dishonoured is debited again in the pass book on
1
st
 April 2024. There was no entry in the cash book about the
dishonour of the cheque until 15
th
 April 2024.
(ii) Bankers had credited her account with ` 11,200 for interest
collected by them on her behalf, but the same has not been
entered in her cash book.
(iii) Out of ` 82,000 paid in by Ms. Tina in cash and by cheques on
31
st
 March 2024 cheques amounting to ` 30,000 were collected
on 7
th
 April, 2024.
(iv) Out of Cheques amounting to ` 31,200 drawn by her on
27
th
 March, 2024 a cheque for ` 10,000 was encashed on 3rd
April, 2024.
(v) Bankers seems to have given here wrong credit for ` 2,000 paid
in by her in Account No. 8765 and a wrong debit in respect of a
cheque for ` 1,200 against her account No.8765.
(vi) A cheque for ` 4,000 entered in Cash Book but omitted to be
banked on 31
st
 March, 2024.
(vii) A Bill Receivable for ` 20,800 previously dishonoured (Discount
` 800) with the Bank had been dishounoured but advice was
received on 1
st
 April, 2024.
2
Page 3


MODEL TEST PAPER 1 
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) Accounting Standards for non-corporate entities in India are
issued by the Central Government.
(ii) Subsidy received from the government for working capital by a
manufacturing concern is a revenue receipt.
(iii) Reducing balance method of depreciation is followed to have a
uniform charge for depreciation and repairs and maintenance
together.
(iv) Discount at the time of retirement of a bill is a gain for the drawee.
(v) Business of partnership comes to an end on death of a partner.
(vi) Receipts and Payments Account highlights total income and
expenditure. (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) The balance of Machinery Account of a firm on 1st April, 2023 was
` 28,54,000. Out of this, a plant having book value of ` 2,16,000 as on
1st April, 2023 was sold on 1st July, 2023 for ` 82,000.  On the same
date a new plant was purchased for ` 4,58,000 and ` 22,000 was spent
on its erection. On 1st November, 2023 a new machine was purchased
for ` 5,60,000.  Depreciation is written off @ 15% per annum under the
diminishing balance method.  Calculate the depreciation for the year
ended 31st March, 2024.     (4 Marks)
(12+4+4= 20 Marks)
2. (a) Mr. B h a t t ’ s trial balance as on 31st March, 2024 did not agree.  The
difference was put to a Suspense Account. 
During the next trading period, the following errors were discovered: 
(i) The total of the Purchases Book of one page, ` 5,615 was carried
forward to the next page as ` 6,551.
1
(ii) A sale of ` 462 was entered in the Sales Book as ` 642 and
posted to the credit of the customer.
(iii) A return to creditor, ` 300 was entered in the Returns Inward
Book; however, the creditor's account was correctly posted.
(iv) Cash received from Geet, ` 895 was posted to debit of Meet.
(v) Goods worth ` 1,400 were dispatched to a customer before the
close of the year but no invoice was made out.
(vi) Goods worth ` 1,600 were sent on sale or return basis to a
customer and entered in the Sales Book at the close of the year,
the customer still had the option to return the goods.  The gross
profit margin was 20% on Sale.
(vii) ` 500 due from Mr. Manas was omitted to be taken ·to the trial
balance.
(viii) Sale of goods to Mr. Deep for ` 6,000 was omitted to be recorded.
You are required to give journal entries to rectify the errors in a way so 
as to show the current year's profit or loss correctly (10 Marks) 
(b) The Bank Pass Book of Account No.7749 of Ms. Tina showed an
overdraft of ` 1,34,300 on 31
st
 March 2024. On going through the Pass
Book, the accountant found the following:
(i) A Cheque of `4,320 credited in the pass book on 28
th
 March 2024
being dishonoured is debited again in the pass book on
1
st
 April 2024. There was no entry in the cash book about the
dishonour of the cheque until 15
th
 April 2024.
(ii) Bankers had credited her account with ` 11,200 for interest
collected by them on her behalf, but the same has not been
entered in her cash book.
(iii) Out of ` 82,000 paid in by Ms. Tina in cash and by cheques on
31
st
 March 2024 cheques amounting to ` 30,000 were collected
on 7
th
 April, 2024.
(iv) Out of Cheques amounting to ` 31,200 drawn by her on
27
th
 March, 2024 a cheque for ` 10,000 was encashed on 3rd
April, 2024.
(v) Bankers seems to have given here wrong credit for ` 2,000 paid
in by her in Account No. 8765 and a wrong debit in respect of a
cheque for ` 1,200 against her account No.8765.
(vi) A cheque for ` 4,000 entered in Cash Book but omitted to be
banked on 31
st
 March, 2024.
(vii) A Bill Receivable for ` 20,800 previously dishonoured (Discount
` 800) with the Bank had been dishounoured but advice was
received on 1
st
 April, 2024.
2
(viii) A Bill for ` 40,000 was retired /paid by the bank under a rebate of
` 700 but the full amount of the bill was credited in the bank
column of the Cash Book.
(ix) A Cheque for ` 9,600 deposited into bank but omitted to be
recorded in Cash Book and was collected by the bank on
31
st
 March, 2024.
Prepare Bank Reconciliation Statement as on 31
st
 March, 2024. 
(10 Marks) 
(10 +10 = 20 Marks) 
3. (a)  Lucky does not maintain proper books of accounts.  However, he
maintains a record of his bank transactions and also is able to give the 
following information from which you are required to prepare his final 
accounts for the year 2023: 
1.1.2023 31.12.2023 
` ` 
Debtors 1,02,500   - 
Creditors   - 46,000 
Stock 50,000 62,500 
Bank Balance   - 50,000 
Fixed Assets 7,500 9,000 
Details of his bank transactions were as follows: 
` 
Received from debtors 3,40,000 
Additional capital brought in 5,000 
Sale of fixed assets (book value ` 2,500) 1,750 
Paid to creditors 2,80,000 
Expenses paid 49,250 
Personal drawings 25,000 
Purchase of fixed assets 5,000 
No cash transactions took place during the year.  Goods are sold at 
cost plus 25%.  Cost of goods sold was ` 2,60,000.  (10 Marks) 
(b) Arun, Varun and Tarun are in partnership, sharing profits and losses
equally.
Tarun died on 30th June 2023.  The Balance Sheet of Firm as at
31
st
 March 2023 stood as:
Liabilities Amount Assets Amount 
Creditors 20,000 Land and Building 1,50,000 
General Reserve 12,000 Investments 65,000 
3
Page 4


MODEL TEST PAPER 1 
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) Accounting Standards for non-corporate entities in India are
issued by the Central Government.
(ii) Subsidy received from the government for working capital by a
manufacturing concern is a revenue receipt.
(iii) Reducing balance method of depreciation is followed to have a
uniform charge for depreciation and repairs and maintenance
together.
(iv) Discount at the time of retirement of a bill is a gain for the drawee.
(v) Business of partnership comes to an end on death of a partner.
(vi) Receipts and Payments Account highlights total income and
expenditure. (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) The balance of Machinery Account of a firm on 1st April, 2023 was
` 28,54,000. Out of this, a plant having book value of ` 2,16,000 as on
1st April, 2023 was sold on 1st July, 2023 for ` 82,000.  On the same
date a new plant was purchased for ` 4,58,000 and ` 22,000 was spent
on its erection. On 1st November, 2023 a new machine was purchased
for ` 5,60,000.  Depreciation is written off @ 15% per annum under the
diminishing balance method.  Calculate the depreciation for the year
ended 31st March, 2024.     (4 Marks)
(12+4+4= 20 Marks)
2. (a) Mr. B h a t t ’ s trial balance as on 31st March, 2024 did not agree.  The
difference was put to a Suspense Account. 
During the next trading period, the following errors were discovered: 
(i) The total of the Purchases Book of one page, ` 5,615 was carried
forward to the next page as ` 6,551.
1
(ii) A sale of ` 462 was entered in the Sales Book as ` 642 and
posted to the credit of the customer.
(iii) A return to creditor, ` 300 was entered in the Returns Inward
Book; however, the creditor's account was correctly posted.
(iv) Cash received from Geet, ` 895 was posted to debit of Meet.
(v) Goods worth ` 1,400 were dispatched to a customer before the
close of the year but no invoice was made out.
(vi) Goods worth ` 1,600 were sent on sale or return basis to a
customer and entered in the Sales Book at the close of the year,
the customer still had the option to return the goods.  The gross
profit margin was 20% on Sale.
(vii) ` 500 due from Mr. Manas was omitted to be taken ·to the trial
balance.
(viii) Sale of goods to Mr. Deep for ` 6,000 was omitted to be recorded.
You are required to give journal entries to rectify the errors in a way so 
as to show the current year's profit or loss correctly (10 Marks) 
(b) The Bank Pass Book of Account No.7749 of Ms. Tina showed an
overdraft of ` 1,34,300 on 31
st
 March 2024. On going through the Pass
Book, the accountant found the following:
(i) A Cheque of `4,320 credited in the pass book on 28
th
 March 2024
being dishonoured is debited again in the pass book on
1
st
 April 2024. There was no entry in the cash book about the
dishonour of the cheque until 15
th
 April 2024.
(ii) Bankers had credited her account with ` 11,200 for interest
collected by them on her behalf, but the same has not been
entered in her cash book.
(iii) Out of ` 82,000 paid in by Ms. Tina in cash and by cheques on
31
st
 March 2024 cheques amounting to ` 30,000 were collected
on 7
th
 April, 2024.
(iv) Out of Cheques amounting to ` 31,200 drawn by her on
27
th
 March, 2024 a cheque for ` 10,000 was encashed on 3rd
April, 2024.
(v) Bankers seems to have given here wrong credit for ` 2,000 paid
in by her in Account No. 8765 and a wrong debit in respect of a
cheque for ` 1,200 against her account No.8765.
(vi) A cheque for ` 4,000 entered in Cash Book but omitted to be
banked on 31
st
 March, 2024.
(vii) A Bill Receivable for ` 20,800 previously dishonoured (Discount
` 800) with the Bank had been dishounoured but advice was
received on 1
st
 April, 2024.
2
(viii) A Bill for ` 40,000 was retired /paid by the bank under a rebate of
` 700 but the full amount of the bill was credited in the bank
column of the Cash Book.
(ix) A Cheque for ` 9,600 deposited into bank but omitted to be
recorded in Cash Book and was collected by the bank on
31
st
 March, 2024.
Prepare Bank Reconciliation Statement as on 31
st
 March, 2024. 
(10 Marks) 
(10 +10 = 20 Marks) 
3. (a)  Lucky does not maintain proper books of accounts.  However, he
maintains a record of his bank transactions and also is able to give the 
following information from which you are required to prepare his final 
accounts for the year 2023: 
1.1.2023 31.12.2023 
` ` 
Debtors 1,02,500   - 
Creditors   - 46,000 
Stock 50,000 62,500 
Bank Balance   - 50,000 
Fixed Assets 7,500 9,000 
Details of his bank transactions were as follows: 
` 
Received from debtors 3,40,000 
Additional capital brought in 5,000 
Sale of fixed assets (book value ` 2,500) 1,750 
Paid to creditors 2,80,000 
Expenses paid 49,250 
Personal drawings 25,000 
Purchase of fixed assets 5,000 
No cash transactions took place during the year.  Goods are sold at 
cost plus 25%.  Cost of goods sold was ` 2,60,000.  (10 Marks) 
(b) Arun, Varun and Tarun are in partnership, sharing profits and losses
equally.
Tarun died on 30th June 2023.  The Balance Sheet of Firm as at
31
st
 March 2023 stood as:
Liabilities Amount Assets Amount 
Creditors 20,000 Land and Building 1,50,000 
General Reserve 12,000 Investments 65,000 
3
Capital Accounts: Stock in trade 15,000 
Arun 1,00,000 Trade receivables   35,000 
Varun 75,000 Less: Provision for 
doubtful debt     (2,000) 
33,000 
Tarun 75,000 Cash in hand 7,000 
Cash at bank 12,000 
2,82,000 2,82,000 
In order to arrive at the balance due to Tarun, it was mutually agreed 
that: 
(i) Land and Building be valued at ` 1,75,000
(ii) Debtors were all good, no provision is required
(iii) Stock is valued at ` 13,500
(iv) Goodwill will be valued at one Year's purchase of the average
profit of the past five years.  Tarun's share of goodwill be adjusted
in the account of Arun and Varun.
(v) Tarun's share of profit from 1
st
 April 2023, to the date of death be
calculated on the basis of average profit of preceding three years.
(vi) The profit of the preceding five years ended 1
st
 March were:
2023  2022   2021 2020 2019 
25,000 20,000 22,500 35,000 28,750 
You are required to prepare: 
(1) Revaluation account
(2) Capital accounts of the partners and
(3) Balance sheet of the Firm as at 1
st
 July, 2023. (10 Marks) 
(10 + 10 = 20 Marks) 
4 (a) Amar, Akbar and Antony are in partnership.  The following is their
Balance Sheet as at March 31, 2024 on which date they dissolved their
partnership.  They shared profit in the ratio of 5:3:2.
Liabilities ` Assets ` 
Creditors 80,000 Plant and machinery 60,000 
Loan A/c –  Amar 20,000 Premises 80,000 
Capital A/cs - Amar 1,00,000 Stock 60,000 
Akbar 30,000 Debtors 1,20,000 
Antony    90,000 
3,20,000 3,20,000 
It was agreed to repay the amounts due to the partners as and when 
the assets were realised, viz.  
4
Page 5


MODEL TEST PAPER 1 
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) Accounting Standards for non-corporate entities in India are
issued by the Central Government.
(ii) Subsidy received from the government for working capital by a
manufacturing concern is a revenue receipt.
(iii) Reducing balance method of depreciation is followed to have a
uniform charge for depreciation and repairs and maintenance
together.
(iv) Discount at the time of retirement of a bill is a gain for the drawee.
(v) Business of partnership comes to an end on death of a partner.
(vi) Receipts and Payments Account highlights total income and
expenditure. (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) The balance of Machinery Account of a firm on 1st April, 2023 was
` 28,54,000. Out of this, a plant having book value of ` 2,16,000 as on
1st April, 2023 was sold on 1st July, 2023 for ` 82,000.  On the same
date a new plant was purchased for ` 4,58,000 and ` 22,000 was spent
on its erection. On 1st November, 2023 a new machine was purchased
for ` 5,60,000.  Depreciation is written off @ 15% per annum under the
diminishing balance method.  Calculate the depreciation for the year
ended 31st March, 2024.     (4 Marks)
(12+4+4= 20 Marks)
2. (a) Mr. B h a t t ’ s trial balance as on 31st March, 2024 did not agree.  The
difference was put to a Suspense Account. 
During the next trading period, the following errors were discovered: 
(i) The total of the Purchases Book of one page, ` 5,615 was carried
forward to the next page as ` 6,551.
1
(ii) A sale of ` 462 was entered in the Sales Book as ` 642 and
posted to the credit of the customer.
(iii) A return to creditor, ` 300 was entered in the Returns Inward
Book; however, the creditor's account was correctly posted.
(iv) Cash received from Geet, ` 895 was posted to debit of Meet.
(v) Goods worth ` 1,400 were dispatched to a customer before the
close of the year but no invoice was made out.
(vi) Goods worth ` 1,600 were sent on sale or return basis to a
customer and entered in the Sales Book at the close of the year,
the customer still had the option to return the goods.  The gross
profit margin was 20% on Sale.
(vii) ` 500 due from Mr. Manas was omitted to be taken ·to the trial
balance.
(viii) Sale of goods to Mr. Deep for ` 6,000 was omitted to be recorded.
You are required to give journal entries to rectify the errors in a way so 
as to show the current year's profit or loss correctly (10 Marks) 
(b) The Bank Pass Book of Account No.7749 of Ms. Tina showed an
overdraft of ` 1,34,300 on 31
st
 March 2024. On going through the Pass
Book, the accountant found the following:
(i) A Cheque of `4,320 credited in the pass book on 28
th
 March 2024
being dishonoured is debited again in the pass book on
1
st
 April 2024. There was no entry in the cash book about the
dishonour of the cheque until 15
th
 April 2024.
(ii) Bankers had credited her account with ` 11,200 for interest
collected by them on her behalf, but the same has not been
entered in her cash book.
(iii) Out of ` 82,000 paid in by Ms. Tina in cash and by cheques on
31
st
 March 2024 cheques amounting to ` 30,000 were collected
on 7
th
 April, 2024.
(iv) Out of Cheques amounting to ` 31,200 drawn by her on
27
th
 March, 2024 a cheque for ` 10,000 was encashed on 3rd
April, 2024.
(v) Bankers seems to have given here wrong credit for ` 2,000 paid
in by her in Account No. 8765 and a wrong debit in respect of a
cheque for ` 1,200 against her account No.8765.
(vi) A cheque for ` 4,000 entered in Cash Book but omitted to be
banked on 31
st
 March, 2024.
(vii) A Bill Receivable for ` 20,800 previously dishonoured (Discount
` 800) with the Bank had been dishounoured but advice was
received on 1
st
 April, 2024.
2
(viii) A Bill for ` 40,000 was retired /paid by the bank under a rebate of
` 700 but the full amount of the bill was credited in the bank
column of the Cash Book.
(ix) A Cheque for ` 9,600 deposited into bank but omitted to be
recorded in Cash Book and was collected by the bank on
31
st
 March, 2024.
Prepare Bank Reconciliation Statement as on 31
st
 March, 2024. 
(10 Marks) 
(10 +10 = 20 Marks) 
3. (a)  Lucky does not maintain proper books of accounts.  However, he
maintains a record of his bank transactions and also is able to give the 
following information from which you are required to prepare his final 
accounts for the year 2023: 
1.1.2023 31.12.2023 
` ` 
Debtors 1,02,500   - 
Creditors   - 46,000 
Stock 50,000 62,500 
Bank Balance   - 50,000 
Fixed Assets 7,500 9,000 
Details of his bank transactions were as follows: 
` 
Received from debtors 3,40,000 
Additional capital brought in 5,000 
Sale of fixed assets (book value ` 2,500) 1,750 
Paid to creditors 2,80,000 
Expenses paid 49,250 
Personal drawings 25,000 
Purchase of fixed assets 5,000 
No cash transactions took place during the year.  Goods are sold at 
cost plus 25%.  Cost of goods sold was ` 2,60,000.  (10 Marks) 
(b) Arun, Varun and Tarun are in partnership, sharing profits and losses
equally.
Tarun died on 30th June 2023.  The Balance Sheet of Firm as at
31
st
 March 2023 stood as:
Liabilities Amount Assets Amount 
Creditors 20,000 Land and Building 1,50,000 
General Reserve 12,000 Investments 65,000 
3
Capital Accounts: Stock in trade 15,000 
Arun 1,00,000 Trade receivables   35,000 
Varun 75,000 Less: Provision for 
doubtful debt     (2,000) 
33,000 
Tarun 75,000 Cash in hand 7,000 
Cash at bank 12,000 
2,82,000 2,82,000 
In order to arrive at the balance due to Tarun, it was mutually agreed 
that: 
(i) Land and Building be valued at ` 1,75,000
(ii) Debtors were all good, no provision is required
(iii) Stock is valued at ` 13,500
(iv) Goodwill will be valued at one Year's purchase of the average
profit of the past five years.  Tarun's share of goodwill be adjusted
in the account of Arun and Varun.
(v) Tarun's share of profit from 1
st
 April 2023, to the date of death be
calculated on the basis of average profit of preceding three years.
(vi) The profit of the preceding five years ended 1
st
 March were:
2023  2022   2021 2020 2019 
25,000 20,000 22,500 35,000 28,750 
You are required to prepare: 
(1) Revaluation account
(2) Capital accounts of the partners and
(3) Balance sheet of the Firm as at 1
st
 July, 2023. (10 Marks) 
(10 + 10 = 20 Marks) 
4 (a) Amar, Akbar and Antony are in partnership.  The following is their
Balance Sheet as at March 31, 2024 on which date they dissolved their
partnership.  They shared profit in the ratio of 5:3:2.
Liabilities ` Assets ` 
Creditors 80,000 Plant and machinery 60,000 
Loan A/c –  Amar 20,000 Premises 80,000 
Capital A/cs - Amar 1,00,000 Stock 60,000 
Akbar 30,000 Debtors 1,20,000 
Antony    90,000 
3,20,000 3,20,000 
It was agreed to repay the amounts due to the partners as and when 
the assets were realised, viz.  
4
April 15, 2024 ` 60,000 
May 1, 2024 ` 1,46,000 
May 31, 2024  ` 94,000 
Prepare a statement showing how the distribution should be made 
under maximum loss method.  
(10 Marks) 
(b) The following information of M/s. Zara Club are related for the year
ended 31
st
 March, 2024:
(1)
Balances As on 
01-04-2023
(`) 
As on 
31-3-2024
(`) 
Stock of Sports Material 6,75,000 10,12,500 
Amount due for Sports Material 6,07,500 8,77,500 
Subscription due 1,01,250 1,48,500 
Subscription received in advance 81,000 47,250 
(2) Subscription received during the year `  33,75,000 
(3) Payments for Sports Material during the year `  20,25,000 
You are required to: 
(A) Ascertain the amount of Subscription and Sports Material that will
appear in Income & Expenditure Account for the year ended
31.03.2024 and
(B) Also show how these items would appear in the Balance Sheet as
on 31.03.2024.  (10 Marks)
(10 + 10 = 20 Marks)
5. (a)  From the following information, draw up a Trial Balance in the books of
Shri Hari Om as on 31
st
 March,2024: 
Particulars Amount 
(`) 
Particulars Amount 
(`) 
Capital 4,20,000 Purchases 1,08,000 
Discount Allowed 3,600 Carriage Inward 26,100 
Carriage Outwards 6,900 Sales 1,80,000 
Return Inward 900 Return Outwards 2100 
Rent and Taxes 3,600 Plant and Machinery 2,42,100 
Stock on 1
st
 April 
2023 
46,500 
Sundry Debtors 
60,600 
Sundry Creditors 36,000 Investments 10,800 
Commission Received 5,400 Cash in Hand 300 
5