Accounting Model Test Paper - 2 (Questions) | Mock Tests & Past Year Papers for CA Foundation PDF Download

 Page 1


MODEL TEST PAPER 2 
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) Amount spent for the construction of temporary huts, which were
necessary for construction of the Cinema House and were
demolished when the Cinema House was ready, is capital
expenditure.
(ii) Accrual concept implies accounting on cash basis.
(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) If individual life policies are taken in the name of the partners and
premium is paid from the firm, then retiring partner is entitled to
surrender value of his policy only.
(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) Differentiate between Book-keeping and Accounting. (4 Marks) 
(c) On 31st March 2024, the Bank Pass Book of Sita showed a balance of
` 3,00,000 to her credit while balance as per cash book was
` 2,55,500. On scrutiny of the two books, she ascertained the
following causes of difference:
(i) She has issued cheques amounting to ` 1,60,000 out of which
only ` 64,000 were presented for payment.
(ii) She received a cheque of ` 10,000 which she recorded in her
cash book but forgot to deposit in the bank.
(iii) A cheque of ` 44,000 deposited by her has not been cleared yet.
(iv) Bank has credited an interest of ` 3,000 while charging ` 500 as
bank charges.
Prepare a bank reconciliation statement      (4 Marks) 
(12 + 4 + 4 = 20 Marks) 
9
Page 2


MODEL TEST PAPER 2 
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) Amount spent for the construction of temporary huts, which were
necessary for construction of the Cinema House and were
demolished when the Cinema House was ready, is capital
expenditure.
(ii) Accrual concept implies accounting on cash basis.
(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) If individual life policies are taken in the name of the partners and
premium is paid from the firm, then retiring partner is entitled to
surrender value of his policy only.
(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) Differentiate between Book-keeping and Accounting. (4 Marks) 
(c) On 31st March 2024, the Bank Pass Book of Sita showed a balance of
` 3,00,000 to her credit while balance as per cash book was
` 2,55,500. On scrutiny of the two books, she ascertained the
following causes of difference:
(i) She has issued cheques amounting to ` 1,60,000 out of which
only ` 64,000 were presented for payment.
(ii) She received a cheque of ` 10,000 which she recorded in her
cash book but forgot to deposit in the bank.
(iii) A cheque of ` 44,000 deposited by her has not been cleared yet.
(iv) Bank has credited an interest of ` 3,000 while charging ` 500 as
bank charges.
Prepare a bank reconciliation statement      (4 Marks) 
(12 + 4 + 4 = 20 Marks) 
9
2. (a) Ambiance ltd. keeps no stock records but a physical inventory of stock
is made at the end of each quarter and the valuation is taken at cost. 
The company’s year ends on 31
st
 March, 2024 and their accounts have 
been prepared to that date. The stock valuation taken on 31
st
 March, 
2024 was however, misleading and you have been advised to value the 
closing stocks as on 31st March, 2024 with the stock figure as on 31st 
December, 2023 and some other information is available to you: 
(i) The cost of stock on 31st December, 2023 as shown by the
inventory sheet was ` 80,000.
(ii) On 31st December, stock sheet showed the following
discrepancies:
(a) A page total of ` 5,000 had been carried to summary sheet
as ` 6,000.
(b) The total of a page had been undercast by ` 400.
(iii) Invoice of purchases entered in the Purchase Book during the
quarter from January to March, 2024 totalled ` 70,000.  Out of this
` 6,000 related to goods received prior to 31st December, 2023.
Invoices entered in April 2024 relating to goods received in
March, 2024 totalled ` 7,000.
(iv) Sales invoiced to customers totalled ` 90,000 from January to
March, 2024.  Of this ` 5,000 related to goods dispatched before
31st December, 2023.  Goods dispatched to customers before
31st March, 2024 but invoiced in April, 2024 totalled ` 4,000.
(v) During the final quarter, credit notes at invoiced value of ` 1,500
had been issued to customers in respect of goods returned during
that period.  The gross margin earned by the company is 25% of
cost.
You are required to prepare a statement showing the amount of stock 
at cost as on 31
st
 March, 2024. (10 Marks) 
(b) M/s. Surya Lights purchased a second-hand machine on 1st January,
2020 for ` 3,20,000.  Overhauling and erection charges amounted to
` 80,000.
Another machine was purchased for ` 1,60,000 on 1
st
 July, 2020.
On 1st July, 2022, the machine installed on 1st January, 2020 was sold
for ` 1,60,000.  Another machine amounted to ` 60,000 was purchased
and was installed on 30
th
 September, 2022.
Under the existing practice the company provides depreciation @ 20%
p.a. on original cost.  However, from the year 2023 it decided to adopt
WDV method and to charge depreciation @ 15% p.a.  You are required
to prepare Machinery account for the years 2020 to 2023.  (10 Marks)
(10 +10 = 20 Marks) 
10
Page 3


MODEL TEST PAPER 2 
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) Amount spent for the construction of temporary huts, which were
necessary for construction of the Cinema House and were
demolished when the Cinema House was ready, is capital
expenditure.
(ii) Accrual concept implies accounting on cash basis.
(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) If individual life policies are taken in the name of the partners and
premium is paid from the firm, then retiring partner is entitled to
surrender value of his policy only.
(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) Differentiate between Book-keeping and Accounting. (4 Marks) 
(c) On 31st March 2024, the Bank Pass Book of Sita showed a balance of
` 3,00,000 to her credit while balance as per cash book was
` 2,55,500. On scrutiny of the two books, she ascertained the
following causes of difference:
(i) She has issued cheques amounting to ` 1,60,000 out of which
only ` 64,000 were presented for payment.
(ii) She received a cheque of ` 10,000 which she recorded in her
cash book but forgot to deposit in the bank.
(iii) A cheque of ` 44,000 deposited by her has not been cleared yet.
(iv) Bank has credited an interest of ` 3,000 while charging ` 500 as
bank charges.
Prepare a bank reconciliation statement      (4 Marks) 
(12 + 4 + 4 = 20 Marks) 
9
2. (a) Ambiance ltd. keeps no stock records but a physical inventory of stock
is made at the end of each quarter and the valuation is taken at cost. 
The company’s year ends on 31
st
 March, 2024 and their accounts have 
been prepared to that date. The stock valuation taken on 31
st
 March, 
2024 was however, misleading and you have been advised to value the 
closing stocks as on 31st March, 2024 with the stock figure as on 31st 
December, 2023 and some other information is available to you: 
(i) The cost of stock on 31st December, 2023 as shown by the
inventory sheet was ` 80,000.
(ii) On 31st December, stock sheet showed the following
discrepancies:
(a) A page total of ` 5,000 had been carried to summary sheet
as ` 6,000.
(b) The total of a page had been undercast by ` 400.
(iii) Invoice of purchases entered in the Purchase Book during the
quarter from January to March, 2024 totalled ` 70,000.  Out of this
` 6,000 related to goods received prior to 31st December, 2023.
Invoices entered in April 2024 relating to goods received in
March, 2024 totalled ` 7,000.
(iv) Sales invoiced to customers totalled ` 90,000 from January to
March, 2024.  Of this ` 5,000 related to goods dispatched before
31st December, 2023.  Goods dispatched to customers before
31st March, 2024 but invoiced in April, 2024 totalled ` 4,000.
(v) During the final quarter, credit notes at invoiced value of ` 1,500
had been issued to customers in respect of goods returned during
that period.  The gross margin earned by the company is 25% of
cost.
You are required to prepare a statement showing the amount of stock 
at cost as on 31
st
 March, 2024. (10 Marks) 
(b) M/s. Surya Lights purchased a second-hand machine on 1st January,
2020 for ` 3,20,000.  Overhauling and erection charges amounted to
` 80,000.
Another machine was purchased for ` 1,60,000 on 1
st
 July, 2020.
On 1st July, 2022, the machine installed on 1st January, 2020 was sold
for ` 1,60,000.  Another machine amounted to ` 60,000 was purchased
and was installed on 30
th
 September, 2022.
Under the existing practice the company provides depreciation @ 20%
p.a. on original cost.  However, from the year 2023 it decided to adopt
WDV method and to charge depreciation @ 15% p.a.  You are required
to prepare Machinery account for the years 2020 to 2023.  (10 Marks)
(10 +10 = 20 Marks) 
10
3. (a)  The details of Assets and Liabilities of Mr. Jalaj as on 31-3-2022 and
31-3-2023 are as follows:
Particulars 31-3-2023
(`) 
31-3-2024
(`) 
Assets: 
Furniture 62,500 
Building 1,25,000 
Stock 1,25,000 3,12,500 
Sundry Debtors 75,000 1,37,500 
Cash in hand 14,000 16,500 
Cash at Bank 75,000 93,750 
Liabilities: 
Loans  1,12,500 87,500 
Sundry Creditors 62,500 1,00,000 
Mr. Jalaj decided to provide depreciation on building by 2.5% and 
furniture by 10% for, the period ended on 31-3-2023. Mr. Jalaj 
purchased jewellery for `30,000 for his daughter in December 2022. He 
sold his car on 30-3-2023 and the amount of `50,000 is retained in the 
business. 
You are required to : 
(i) Prepare statement of affairs as on 31-3-2023 & 31-3-2024.
(ii) Calculate the profit received by Mr. Jalaj during the year ended
31-3- 2024. (8 Marks) 
(b) X,Y and Z are partners sharing profits in the ratio of 3:2:1. Their
Balance Sheet as at 31
st
 March, 2024 stood as:
Liabilities ` Assets `
Capital 
Accounts 
Building 10,00,000 
X 8,00,000 Furniture 2,40,000 
Y 4,20,000 Office 
equipments 
2,80,000 
Z 4,00,000 16,20,000 Stock 2,50,000 
Sundry 
Creditors 
3,70,000 Sundry debtors 3,00,000 
General 
Reserves 
3,60,000 Less: Provision 
for Doubtful 
debts 
30,000 2,70,000 
Joint life policy 1,60,000 
Cash at Bank   1,50,000 
23,50,000 23,50,000 
11
Page 4


MODEL TEST PAPER 2 
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) Amount spent for the construction of temporary huts, which were
necessary for construction of the Cinema House and were
demolished when the Cinema House was ready, is capital
expenditure.
(ii) Accrual concept implies accounting on cash basis.
(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) If individual life policies are taken in the name of the partners and
premium is paid from the firm, then retiring partner is entitled to
surrender value of his policy only.
(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) Differentiate between Book-keeping and Accounting. (4 Marks) 
(c) On 31st March 2024, the Bank Pass Book of Sita showed a balance of
` 3,00,000 to her credit while balance as per cash book was
` 2,55,500. On scrutiny of the two books, she ascertained the
following causes of difference:
(i) She has issued cheques amounting to ` 1,60,000 out of which
only ` 64,000 were presented for payment.
(ii) She received a cheque of ` 10,000 which she recorded in her
cash book but forgot to deposit in the bank.
(iii) A cheque of ` 44,000 deposited by her has not been cleared yet.
(iv) Bank has credited an interest of ` 3,000 while charging ` 500 as
bank charges.
Prepare a bank reconciliation statement      (4 Marks) 
(12 + 4 + 4 = 20 Marks) 
9
2. (a) Ambiance ltd. keeps no stock records but a physical inventory of stock
is made at the end of each quarter and the valuation is taken at cost. 
The company’s year ends on 31
st
 March, 2024 and their accounts have 
been prepared to that date. The stock valuation taken on 31
st
 March, 
2024 was however, misleading and you have been advised to value the 
closing stocks as on 31st March, 2024 with the stock figure as on 31st 
December, 2023 and some other information is available to you: 
(i) The cost of stock on 31st December, 2023 as shown by the
inventory sheet was ` 80,000.
(ii) On 31st December, stock sheet showed the following
discrepancies:
(a) A page total of ` 5,000 had been carried to summary sheet
as ` 6,000.
(b) The total of a page had been undercast by ` 400.
(iii) Invoice of purchases entered in the Purchase Book during the
quarter from January to March, 2024 totalled ` 70,000.  Out of this
` 6,000 related to goods received prior to 31st December, 2023.
Invoices entered in April 2024 relating to goods received in
March, 2024 totalled ` 7,000.
(iv) Sales invoiced to customers totalled ` 90,000 from January to
March, 2024.  Of this ` 5,000 related to goods dispatched before
31st December, 2023.  Goods dispatched to customers before
31st March, 2024 but invoiced in April, 2024 totalled ` 4,000.
(v) During the final quarter, credit notes at invoiced value of ` 1,500
had been issued to customers in respect of goods returned during
that period.  The gross margin earned by the company is 25% of
cost.
You are required to prepare a statement showing the amount of stock 
at cost as on 31
st
 March, 2024. (10 Marks) 
(b) M/s. Surya Lights purchased a second-hand machine on 1st January,
2020 for ` 3,20,000.  Overhauling and erection charges amounted to
` 80,000.
Another machine was purchased for ` 1,60,000 on 1
st
 July, 2020.
On 1st July, 2022, the machine installed on 1st January, 2020 was sold
for ` 1,60,000.  Another machine amounted to ` 60,000 was purchased
and was installed on 30
th
 September, 2022.
Under the existing practice the company provides depreciation @ 20%
p.a. on original cost.  However, from the year 2023 it decided to adopt
WDV method and to charge depreciation @ 15% p.a.  You are required
to prepare Machinery account for the years 2020 to 2023.  (10 Marks)
(10 +10 = 20 Marks) 
10
3. (a)  The details of Assets and Liabilities of Mr. Jalaj as on 31-3-2022 and
31-3-2023 are as follows:
Particulars 31-3-2023
(`) 
31-3-2024
(`) 
Assets: 
Furniture 62,500 
Building 1,25,000 
Stock 1,25,000 3,12,500 
Sundry Debtors 75,000 1,37,500 
Cash in hand 14,000 16,500 
Cash at Bank 75,000 93,750 
Liabilities: 
Loans  1,12,500 87,500 
Sundry Creditors 62,500 1,00,000 
Mr. Jalaj decided to provide depreciation on building by 2.5% and 
furniture by 10% for, the period ended on 31-3-2023. Mr. Jalaj 
purchased jewellery for `30,000 for his daughter in December 2022. He 
sold his car on 30-3-2023 and the amount of `50,000 is retained in the 
business. 
You are required to : 
(i) Prepare statement of affairs as on 31-3-2023 & 31-3-2024.
(ii) Calculate the profit received by Mr. Jalaj during the year ended
31-3- 2024. (8 Marks) 
(b) X,Y and Z are partners sharing profits in the ratio of 3:2:1. Their
Balance Sheet as at 31
st
 March, 2024 stood as:
Liabilities ` Assets `
Capital 
Accounts 
Building 10,00,000 
X 8,00,000 Furniture 2,40,000 
Y 4,20,000 Office 
equipments 
2,80,000 
Z 4,00,000 16,20,000 Stock 2,50,000 
Sundry 
Creditors 
3,70,000 Sundry debtors 3,00,000 
General 
Reserves 
3,60,000 Less: Provision 
for Doubtful 
debts 
30,000 2,70,000 
Joint life policy 1,60,000 
Cash at Bank   1,50,000 
23,50,000 23,50,000 
11
Y retired on 1
st
 April, 2024 subject to the following conditions: 
(i) Office Equipments revalued at ` 3,27,000.
(ii) Building revalued at ` 15,00,000. Furniture is written down by `
40,000 and Stock is reduced to Rs,2,00,000 .
(iii) Provision for Doubtful Debts is to be created @ 5% on Debtors.
(iv) The surrender value of Joint Life Policy is ` 1,50,000
(v) Goodwill was to be valued at 3 years purchase of average 4 years
profit which were:
Year `
2020 90,000 
2021 1,40,000 
2022 1,20,000 
2023 1,30,000 
(vi) Amount due to Y is to be transferred to his Loan Account.
Prepare the Revaluation Account, Partners' Capital Accounts and the 
Balance Sheet immediately after Y's retirement. (12 Marks) 
(8 + 12 = 20 Marks) 
4. (a)  P, Q, and R are partners sharing profits and losses as to 2:2:1.  Their
Balance Sheet as on 31
st
 March, 2023 is as follows: 
Liabilities ` Assets `
Capital 
accounts 
Plant and 
Machinery 
1,08,000 
P 1,20,000 Fixtures 24,000 
Q 48,000 Stock 60,000 
R 24,000 1,92,000 Sundry debtors 48,000 
Reserve Fund 60,000 Cash 60,000 
Creditors   48,000 
3,00,000 3,00,000 
They decided to dissolve the business.  The following are the amounts 
realized: 
Particulars `
Plant and Machinery 1,02,000 
Fixtures 18,000 
Stock 84,000 
Sundry debtors 44,400 
Creditors allowed a discount of 5% and realization expenses amounted 
to ` 1,500.  There was an unrecorded asset of ` 6,000 which was taken 
12
Page 5


MODEL TEST PAPER 2 
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) Amount spent for the construction of temporary huts, which were
necessary for construction of the Cinema House and were
demolished when the Cinema House was ready, is capital
expenditure.
(ii) Accrual concept implies accounting on cash basis.
(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) If individual life policies are taken in the name of the partners and
premium is paid from the firm, then retiring partner is entitled to
surrender value of his policy only.
(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) Differentiate between Book-keeping and Accounting. (4 Marks) 
(c) On 31st March 2024, the Bank Pass Book of Sita showed a balance of
` 3,00,000 to her credit while balance as per cash book was
` 2,55,500. On scrutiny of the two books, she ascertained the
following causes of difference:
(i) She has issued cheques amounting to ` 1,60,000 out of which
only ` 64,000 were presented for payment.
(ii) She received a cheque of ` 10,000 which she recorded in her
cash book but forgot to deposit in the bank.
(iii) A cheque of ` 44,000 deposited by her has not been cleared yet.
(iv) Bank has credited an interest of ` 3,000 while charging ` 500 as
bank charges.
Prepare a bank reconciliation statement      (4 Marks) 
(12 + 4 + 4 = 20 Marks) 
9
2. (a) Ambiance ltd. keeps no stock records but a physical inventory of stock
is made at the end of each quarter and the valuation is taken at cost. 
The company’s year ends on 31
st
 March, 2024 and their accounts have 
been prepared to that date. The stock valuation taken on 31
st
 March, 
2024 was however, misleading and you have been advised to value the 
closing stocks as on 31st March, 2024 with the stock figure as on 31st 
December, 2023 and some other information is available to you: 
(i) The cost of stock on 31st December, 2023 as shown by the
inventory sheet was ` 80,000.
(ii) On 31st December, stock sheet showed the following
discrepancies:
(a) A page total of ` 5,000 had been carried to summary sheet
as ` 6,000.
(b) The total of a page had been undercast by ` 400.
(iii) Invoice of purchases entered in the Purchase Book during the
quarter from January to March, 2024 totalled ` 70,000.  Out of this
` 6,000 related to goods received prior to 31st December, 2023.
Invoices entered in April 2024 relating to goods received in
March, 2024 totalled ` 7,000.
(iv) Sales invoiced to customers totalled ` 90,000 from January to
March, 2024.  Of this ` 5,000 related to goods dispatched before
31st December, 2023.  Goods dispatched to customers before
31st March, 2024 but invoiced in April, 2024 totalled ` 4,000.
(v) During the final quarter, credit notes at invoiced value of ` 1,500
had been issued to customers in respect of goods returned during
that period.  The gross margin earned by the company is 25% of
cost.
You are required to prepare a statement showing the amount of stock 
at cost as on 31
st
 March, 2024. (10 Marks) 
(b) M/s. Surya Lights purchased a second-hand machine on 1st January,
2020 for ` 3,20,000.  Overhauling and erection charges amounted to
` 80,000.
Another machine was purchased for ` 1,60,000 on 1
st
 July, 2020.
On 1st July, 2022, the machine installed on 1st January, 2020 was sold
for ` 1,60,000.  Another machine amounted to ` 60,000 was purchased
and was installed on 30
th
 September, 2022.
Under the existing practice the company provides depreciation @ 20%
p.a. on original cost.  However, from the year 2023 it decided to adopt
WDV method and to charge depreciation @ 15% p.a.  You are required
to prepare Machinery account for the years 2020 to 2023.  (10 Marks)
(10 +10 = 20 Marks) 
10
3. (a)  The details of Assets and Liabilities of Mr. Jalaj as on 31-3-2022 and
31-3-2023 are as follows:
Particulars 31-3-2023
(`) 
31-3-2024
(`) 
Assets: 
Furniture 62,500 
Building 1,25,000 
Stock 1,25,000 3,12,500 
Sundry Debtors 75,000 1,37,500 
Cash in hand 14,000 16,500 
Cash at Bank 75,000 93,750 
Liabilities: 
Loans  1,12,500 87,500 
Sundry Creditors 62,500 1,00,000 
Mr. Jalaj decided to provide depreciation on building by 2.5% and 
furniture by 10% for, the period ended on 31-3-2023. Mr. Jalaj 
purchased jewellery for `30,000 for his daughter in December 2022. He 
sold his car on 30-3-2023 and the amount of `50,000 is retained in the 
business. 
You are required to : 
(i) Prepare statement of affairs as on 31-3-2023 & 31-3-2024.
(ii) Calculate the profit received by Mr. Jalaj during the year ended
31-3- 2024. (8 Marks) 
(b) X,Y and Z are partners sharing profits in the ratio of 3:2:1. Their
Balance Sheet as at 31
st
 March, 2024 stood as:
Liabilities ` Assets `
Capital 
Accounts 
Building 10,00,000 
X 8,00,000 Furniture 2,40,000 
Y 4,20,000 Office 
equipments 
2,80,000 
Z 4,00,000 16,20,000 Stock 2,50,000 
Sundry 
Creditors 
3,70,000 Sundry debtors 3,00,000 
General 
Reserves 
3,60,000 Less: Provision 
for Doubtful 
debts 
30,000 2,70,000 
Joint life policy 1,60,000 
Cash at Bank   1,50,000 
23,50,000 23,50,000 
11
Y retired on 1
st
 April, 2024 subject to the following conditions: 
(i) Office Equipments revalued at ` 3,27,000.
(ii) Building revalued at ` 15,00,000. Furniture is written down by `
40,000 and Stock is reduced to Rs,2,00,000 .
(iii) Provision for Doubtful Debts is to be created @ 5% on Debtors.
(iv) The surrender value of Joint Life Policy is ` 1,50,000
(v) Goodwill was to be valued at 3 years purchase of average 4 years
profit which were:
Year `
2020 90,000 
2021 1,40,000 
2022 1,20,000 
2023 1,30,000 
(vi) Amount due to Y is to be transferred to his Loan Account.
Prepare the Revaluation Account, Partners' Capital Accounts and the 
Balance Sheet immediately after Y's retirement. (12 Marks) 
(8 + 12 = 20 Marks) 
4. (a)  P, Q, and R are partners sharing profits and losses as to 2:2:1.  Their
Balance Sheet as on 31
st
 March, 2023 is as follows: 
Liabilities ` Assets `
Capital 
accounts 
Plant and 
Machinery 
1,08,000 
P 1,20,000 Fixtures 24,000 
Q 48,000 Stock 60,000 
R 24,000 1,92,000 Sundry debtors 48,000 
Reserve Fund 60,000 Cash 60,000 
Creditors   48,000 
3,00,000 3,00,000 
They decided to dissolve the business.  The following are the amounts 
realized: 
Particulars `
Plant and Machinery 1,02,000 
Fixtures 18,000 
Stock 84,000 
Sundry debtors 44,400 
Creditors allowed a discount of 5% and realization expenses amounted 
to ` 1,500.  There was an unrecorded asset of ` 6,000 which was taken 
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over by Q at ` 4,800.  An amount of ` 4,200 due for GST had come to 
notice during the course of realization and this was also paid. 
You are required to prepare: 
(i) Realization Account.
(ii) Partners’ Capital Accounts.
(iii) Cash Account. (8 Marks) 
(b) From the following balances and particulars of Navel College, prepare
Income & Expenditure Account for the year ended March, 2024 and a
Balance Sheet as on the date :
Particulars Amount 
(`) 
Amount 
(`) 
Security Deposit - Students - 1,55,000 
Capital Fund - 13,08,000 
Building Fund 19,10,000 
Tuition Fee Received 8,10,000 
Government Grants 5,01,000 
Interest & Dividends on Investments - 1,75,000 
Hostel Room Rent  - 1,65,000 
Mess Receipts (Net) 2,05,000 
College Stores - Sales  - 7,60,000 
Outstanding expenses - 2,35,000 
Stock of Stores and Supplies (opening) 3,10,000 - 
Purchases - Stores & Supplies 8,20,000 - 
Salaries - Teaching  8,75,000 - 
Salaries - Research  1,25,000 - 
Scholarships 85,000 - 
Students Welfare expenses  37,000 - 
Games & Sports expenses 52,000 - 
Other investments 12,75,000 - 
Land 1,50,000 - 
Building 15,50,000 - 
Plant and Machinery  8,50,000 - 
Furniture and Fittings  5,40,000 - 
Motor Vehicle 2,40,000 - 
Provision for Depreciation :  - 
Building - 4,90,000 
Plant & Equipment - 5,05,000 
Furniture & Fittings - 3,26,000 
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