Accounting Model Test Paper - 3 (Answers) | Mock Tests & Past Year Papers for CA Foundation PDF Download

 Page 1


ANSWERS OF MODEL TEST PAPER 3 
FOUNDATION COURSE 
PAPER – 1: ACCOUNTING 
1. (a) (i) True: Insurance claim received on account of plant and machinery 
completely damaged by fire is a capital receipt as it is not obtained 
in course of normal business activities. 
(ii) True: According to Section 52 of the Companies Act, 2013,
Securities Premium Account may be used by the company to write
off preliminary expenses of the company. Thus, the accountant can
use the balance in securities premium account to write off the
preliminary expenses amounting ` 15 lakhs.
(iii) True: The financial statements must disclose all the relevant and
reliable information in accordance with the Full Disclosure
Principle.
(iv) False: In case of admission of new partner in a partnership firm,
profit/loss on revaluation account is transferred to old partners in
their old profit-sharing ratio.
(v) False: The debit notes issued are used to prepare purchases return
book.
(vi) False: Debenture holder does not enjoy voting rights in company.
He is only a creditor of the company.
(b) Change in accounting policy may have a material effect on the items of
financial statements. For example, cost formula used for inventory
valuation is changed from weighted average to FIFO. Unless the effect
of such change in accounting policy is quantified, the financial
statements may not help the users of accounts.
(c) Calculation of depreciation for 5
th
 year
Depreciation per year charged for four years = ` 80,00,000 / 10 =
` 8,00,000
WDV of the machine at the end of fourth year = ` 80,00,000 – ` 8,00,000
× 4 = ` 48,00,000.
Depreciable amount after revaluation = ` 48,00,000 + ` 3,20,000
= ` 51,20,000
Remaining useful life as per previous estimate = 6 years
Remaining useful life as per revised estimate = 8 years
Depreciation for the fifth year and onwards = ` 51,20,000 / 8
= ` 6,40,000.
2. (a) Profit and Loss Adjustment A/c 
`  `  
To Advertisement 
(samples) 
3,20,000 By Net profit 32,00,000 
514
Page 2


ANSWERS OF MODEL TEST PAPER 3 
FOUNDATION COURSE 
PAPER – 1: ACCOUNTING 
1. (a) (i) True: Insurance claim received on account of plant and machinery 
completely damaged by fire is a capital receipt as it is not obtained 
in course of normal business activities. 
(ii) True: According to Section 52 of the Companies Act, 2013,
Securities Premium Account may be used by the company to write
off preliminary expenses of the company. Thus, the accountant can
use the balance in securities premium account to write off the
preliminary expenses amounting ` 15 lakhs.
(iii) True: The financial statements must disclose all the relevant and
reliable information in accordance with the Full Disclosure
Principle.
(iv) False: In case of admission of new partner in a partnership firm,
profit/loss on revaluation account is transferred to old partners in
their old profit-sharing ratio.
(v) False: The debit notes issued are used to prepare purchases return
book.
(vi) False: Debenture holder does not enjoy voting rights in company.
He is only a creditor of the company.
(b) Change in accounting policy may have a material effect on the items of
financial statements. For example, cost formula used for inventory
valuation is changed from weighted average to FIFO. Unless the effect
of such change in accounting policy is quantified, the financial
statements may not help the users of accounts.
(c) Calculation of depreciation for 5
th
 year
Depreciation per year charged for four years = ` 80,00,000 / 10 =
` 8,00,000
WDV of the machine at the end of fourth year = ` 80,00,000 – ` 8,00,000
× 4 = ` 48,00,000.
Depreciable amount after revaluation = ` 48,00,000 + ` 3,20,000
= ` 51,20,000
Remaining useful life as per previous estimate = 6 years
Remaining useful life as per revised estimate = 8 years
Depreciation for the fifth year and onwards = ` 51,20,000 / 8
= ` 6,40,000.
2. (a) Profit and Loss Adjustment A/c 
`  `  
To Advertisement 
(samples) 
3,20,000 By Net profit 32,00,000 
514
To Sales 8,00,000 By Electric fittings 1,20,000 
(goods approved 
in April to 
By Samples 3,20,000 
be taken as April 
sales) 
By Stock 
(Purchases of 
March  
20,00,000 
To Adjusted net 
profit 
67,20,000       not included in 
      stock) 
By Sales (goods 
sold in March 
wrongly taken 
as April sales) 
16,00,000 
By Stock (goods 
sent on approval 
basis not included in 
stock) 
6,00,000 
78,40,000 78,40,000 
Calculation of value of inventory on 31
st
 March, 2024 
`  
Stock on 31
st
 March, 2024 (given) 30,00,000 
Add: Purchases of March, 2024 not included in the 
stock 
20,00,000 
Goods lying with customers on approval basis  6,00,000 
56,00,000 
(b) (i) Cash Book (Bank Column) 
Date Particulars Amount Date Particulars Amount 
2023 ` 2023 ` 
Sept. 
30 
Sept. 
30 
To Party A/c  64,000 By Balance b/d 16,248 
To Customer A/c By Bank charges 2,320 
(Direct deposit) 4,69,600 By Customer A/c 5,60,000    
To Balance c/d   44,968 (B/R dishonoured) 
5,78,568 5,78,568 
(ii) Bank Reconciliation Statement as on 30th September, 2023
Particulars Amount 
` 
Overdraft as per Cash Book 44,968 
Add: Cheque deposited but not collected upto 
30
th
 Sept., 2023 52,56,000 
53,00,968 
515
Page 3


ANSWERS OF MODEL TEST PAPER 3 
FOUNDATION COURSE 
PAPER – 1: ACCOUNTING 
1. (a) (i) True: Insurance claim received on account of plant and machinery 
completely damaged by fire is a capital receipt as it is not obtained 
in course of normal business activities. 
(ii) True: According to Section 52 of the Companies Act, 2013,
Securities Premium Account may be used by the company to write
off preliminary expenses of the company. Thus, the accountant can
use the balance in securities premium account to write off the
preliminary expenses amounting ` 15 lakhs.
(iii) True: The financial statements must disclose all the relevant and
reliable information in accordance with the Full Disclosure
Principle.
(iv) False: In case of admission of new partner in a partnership firm,
profit/loss on revaluation account is transferred to old partners in
their old profit-sharing ratio.
(v) False: The debit notes issued are used to prepare purchases return
book.
(vi) False: Debenture holder does not enjoy voting rights in company.
He is only a creditor of the company.
(b) Change in accounting policy may have a material effect on the items of
financial statements. For example, cost formula used for inventory
valuation is changed from weighted average to FIFO. Unless the effect
of such change in accounting policy is quantified, the financial
statements may not help the users of accounts.
(c) Calculation of depreciation for 5
th
 year
Depreciation per year charged for four years = ` 80,00,000 / 10 =
` 8,00,000
WDV of the machine at the end of fourth year = ` 80,00,000 – ` 8,00,000
× 4 = ` 48,00,000.
Depreciable amount after revaluation = ` 48,00,000 + ` 3,20,000
= ` 51,20,000
Remaining useful life as per previous estimate = 6 years
Remaining useful life as per revised estimate = 8 years
Depreciation for the fifth year and onwards = ` 51,20,000 / 8
= ` 6,40,000.
2. (a) Profit and Loss Adjustment A/c 
`  `  
To Advertisement 
(samples) 
3,20,000 By Net profit 32,00,000 
514
To Sales 8,00,000 By Electric fittings 1,20,000 
(goods approved 
in April to 
By Samples 3,20,000 
be taken as April 
sales) 
By Stock 
(Purchases of 
March  
20,00,000 
To Adjusted net 
profit 
67,20,000       not included in 
      stock) 
By Sales (goods 
sold in March 
wrongly taken 
as April sales) 
16,00,000 
By Stock (goods 
sent on approval 
basis not included in 
stock) 
6,00,000 
78,40,000 78,40,000 
Calculation of value of inventory on 31
st
 March, 2024 
`  
Stock on 31
st
 March, 2024 (given) 30,00,000 
Add: Purchases of March, 2024 not included in the 
stock 
20,00,000 
Goods lying with customers on approval basis  6,00,000 
56,00,000 
(b) (i) Cash Book (Bank Column) 
Date Particulars Amount Date Particulars Amount 
2023 ` 2023 ` 
Sept. 
30 
Sept. 
30 
To Party A/c  64,000 By Balance b/d 16,248 
To Customer A/c By Bank charges 2,320 
(Direct deposit) 4,69,600 By Customer A/c 5,60,000    
To Balance c/d   44,968 (B/R dishonoured) 
5,78,568 5,78,568 
(ii) Bank Reconciliation Statement as on 30th September, 2023
Particulars Amount 
` 
Overdraft as per Cash Book 44,968 
Add: Cheque deposited but not collected upto 
30
th
 Sept., 2023 52,56,000 
53,00,968 
515
Less: Cheques issued but not presented for payment 
upto 30
th 
Sept., 2023 (53,04,000) 
Credit by Bank erroneously on 6th Sept.  (80,000) 
Credit balance as per bank statement  83,032 
Note: Bank has credited Akhil by 80,000 in error on 6
th 
September, 2023. 
If this mistake is rectified in the bank statement, then this will not be 
deducted in the above statement along with ` 53,04,000 resulting in 
credit balance of ` 3,032 as per pass-book.   
3. (a) Manufacturing A/c 
Particulars ` Particulars ` 
To Raw Material Consumed 
    (Balancing Figure) 
9,15,000 By Trading A/c 
 (W.N. 4) 
18,32,000 
To Wages (W.N. 2) 3,15,000 
To Depreciation (W.N. 1) 3,95,000 
To Direct Expenses 
 (W.N. 3) 
2,07,000 
18,32,000 18,32,000 
Raw Material A/c 
Particulars ` Particulars ` 
To Opening Stock 
A/c 
1,27,000 By Raw Material 
    Consumed (from  
   Manufacturing A/c above) 
9,15,000 
To Creditors A/c  
(W.N. 5) 
14,40,000 By Closing Stock A/c 
(Balancing Figure) 
6,52,000 
15,67,000 15,67,000 
Working Notes: 
(1) Since purchase of Machinery worth ` 12,00,000 has been omitted.
So, depreciation omitted from being charged  = 12,00,000 X 15%
= ` 1,80,000 
Correct total depreciation expense = ` (2,15,000+1,80,000) 
= 3,95,000 
(2) Wages worth ` 50,000 will be excluded from manufacturing account
as they pertain to office and hence will be charged P&L A/c. So the
revised wages amounting ` 3,15,000 will be shown in
manufacturing account.
(3) Expenses to be excluded from direct expenses:
Office Electricity Charges (80,000 X 25%) 20,000 
Delivery Charges to Customers 22,000 
516
Page 4


ANSWERS OF MODEL TEST PAPER 3 
FOUNDATION COURSE 
PAPER – 1: ACCOUNTING 
1. (a) (i) True: Insurance claim received on account of plant and machinery 
completely damaged by fire is a capital receipt as it is not obtained 
in course of normal business activities. 
(ii) True: According to Section 52 of the Companies Act, 2013,
Securities Premium Account may be used by the company to write
off preliminary expenses of the company. Thus, the accountant can
use the balance in securities premium account to write off the
preliminary expenses amounting ` 15 lakhs.
(iii) True: The financial statements must disclose all the relevant and
reliable information in accordance with the Full Disclosure
Principle.
(iv) False: In case of admission of new partner in a partnership firm,
profit/loss on revaluation account is transferred to old partners in
their old profit-sharing ratio.
(v) False: The debit notes issued are used to prepare purchases return
book.
(vi) False: Debenture holder does not enjoy voting rights in company.
He is only a creditor of the company.
(b) Change in accounting policy may have a material effect on the items of
financial statements. For example, cost formula used for inventory
valuation is changed from weighted average to FIFO. Unless the effect
of such change in accounting policy is quantified, the financial
statements may not help the users of accounts.
(c) Calculation of depreciation for 5
th
 year
Depreciation per year charged for four years = ` 80,00,000 / 10 =
` 8,00,000
WDV of the machine at the end of fourth year = ` 80,00,000 – ` 8,00,000
× 4 = ` 48,00,000.
Depreciable amount after revaluation = ` 48,00,000 + ` 3,20,000
= ` 51,20,000
Remaining useful life as per previous estimate = 6 years
Remaining useful life as per revised estimate = 8 years
Depreciation for the fifth year and onwards = ` 51,20,000 / 8
= ` 6,40,000.
2. (a) Profit and Loss Adjustment A/c 
`  `  
To Advertisement 
(samples) 
3,20,000 By Net profit 32,00,000 
514
To Sales 8,00,000 By Electric fittings 1,20,000 
(goods approved 
in April to 
By Samples 3,20,000 
be taken as April 
sales) 
By Stock 
(Purchases of 
March  
20,00,000 
To Adjusted net 
profit 
67,20,000       not included in 
      stock) 
By Sales (goods 
sold in March 
wrongly taken 
as April sales) 
16,00,000 
By Stock (goods 
sent on approval 
basis not included in 
stock) 
6,00,000 
78,40,000 78,40,000 
Calculation of value of inventory on 31
st
 March, 2024 
`  
Stock on 31
st
 March, 2024 (given) 30,00,000 
Add: Purchases of March, 2024 not included in the 
stock 
20,00,000 
Goods lying with customers on approval basis  6,00,000 
56,00,000 
(b) (i) Cash Book (Bank Column) 
Date Particulars Amount Date Particulars Amount 
2023 ` 2023 ` 
Sept. 
30 
Sept. 
30 
To Party A/c  64,000 By Balance b/d 16,248 
To Customer A/c By Bank charges 2,320 
(Direct deposit) 4,69,600 By Customer A/c 5,60,000    
To Balance c/d   44,968 (B/R dishonoured) 
5,78,568 5,78,568 
(ii) Bank Reconciliation Statement as on 30th September, 2023
Particulars Amount 
` 
Overdraft as per Cash Book 44,968 
Add: Cheque deposited but not collected upto 
30
th
 Sept., 2023 52,56,000 
53,00,968 
515
Less: Cheques issued but not presented for payment 
upto 30
th 
Sept., 2023 (53,04,000) 
Credit by Bank erroneously on 6th Sept.  (80,000) 
Credit balance as per bank statement  83,032 
Note: Bank has credited Akhil by 80,000 in error on 6
th 
September, 2023. 
If this mistake is rectified in the bank statement, then this will not be 
deducted in the above statement along with ` 53,04,000 resulting in 
credit balance of ` 3,032 as per pass-book.   
3. (a) Manufacturing A/c 
Particulars ` Particulars ` 
To Raw Material Consumed 
    (Balancing Figure) 
9,15,000 By Trading A/c 
 (W.N. 4) 
18,32,000 
To Wages (W.N. 2) 3,15,000 
To Depreciation (W.N. 1) 3,95,000 
To Direct Expenses 
 (W.N. 3) 
2,07,000 
18,32,000 18,32,000 
Raw Material A/c 
Particulars ` Particulars ` 
To Opening Stock 
A/c 
1,27,000 By Raw Material 
    Consumed (from  
   Manufacturing A/c above) 
9,15,000 
To Creditors A/c  
(W.N. 5) 
14,40,000 By Closing Stock A/c 
(Balancing Figure) 
6,52,000 
15,67,000 15,67,000 
Working Notes: 
(1) Since purchase of Machinery worth ` 12,00,000 has been omitted.
So, depreciation omitted from being charged  = 12,00,000 X 15%
= ` 1,80,000 
Correct total depreciation expense = ` (2,15,000+1,80,000) 
= 3,95,000 
(2) Wages worth ` 50,000 will be excluded from manufacturing account
as they pertain to office and hence will be charged P&L A/c. So the
revised wages amounting ` 3,15,000 will be shown in
manufacturing account.
(3) Expenses to be excluded from direct expenses:
Office Electricity Charges (80,000 X 25%) 20,000 
Delivery Charges to Customers 22,000 
516
Total expenses not part of Direct Expenses 42,000 
=> Revised Direct Expenses = ` (2,49,000 - 42,000) 
= ` 2,07,000 
Fuel charges are related to factory expenses and also freight 
inwards are incurred for bringing goods to factory/ godown so they 
are part of direct expenses. 
(4) Revised Balance to be transferred to Trading A/c:
Particulars ` 
Current Balance transferred 17,44,000 
Add: Depreciation charges not recorded earlier 1,80,000 
Less: Wages related to Office (50,000) 
Less: Office Expenses (42,000) 
Revised balance to be transferred 18,32,000 
(5) Creditors A/c 
Particulars ` Particulars ` 
To Bank A/c 23,50,000 By Balance b/d 15,70,000 
To Balance 
c/d 
6,60,000 
By Raw Materials A/c 
(Bal. figure) 14,40,000 
30,10,000 30,10,000 
(b) 
Particulars Ram Lakhan Bharat Total 
Profit of 
firm 
I. Amount already credited:
Share of profit (in the ratio
of 1:1:1) (2022-23, 2023-24)
78,000 78,000 78,000 2,34,000 
II. Amount which should have been
credited:
C’s Salary (2022-23, 2023-24)
Interest on Capital (2022-23,
2023-24)
Share of Profit
 15,000 
87,000 
7,500 
43,500 
30,000 
7,500 
43,500 1,74,000 
1,02,000 51,000 81,000 
Net effect (I-II) (24,000) 27,000 (3,000) - 
The necessary journal entry will be: 
Particulars Debit (`) Credit (`) 
Lakhan’s Current A/c 27,000 
To Ram’s Current A/c 24,000 
517
Page 5


ANSWERS OF MODEL TEST PAPER 3 
FOUNDATION COURSE 
PAPER – 1: ACCOUNTING 
1. (a) (i) True: Insurance claim received on account of plant and machinery 
completely damaged by fire is a capital receipt as it is not obtained 
in course of normal business activities. 
(ii) True: According to Section 52 of the Companies Act, 2013,
Securities Premium Account may be used by the company to write
off preliminary expenses of the company. Thus, the accountant can
use the balance in securities premium account to write off the
preliminary expenses amounting ` 15 lakhs.
(iii) True: The financial statements must disclose all the relevant and
reliable information in accordance with the Full Disclosure
Principle.
(iv) False: In case of admission of new partner in a partnership firm,
profit/loss on revaluation account is transferred to old partners in
their old profit-sharing ratio.
(v) False: The debit notes issued are used to prepare purchases return
book.
(vi) False: Debenture holder does not enjoy voting rights in company.
He is only a creditor of the company.
(b) Change in accounting policy may have a material effect on the items of
financial statements. For example, cost formula used for inventory
valuation is changed from weighted average to FIFO. Unless the effect
of such change in accounting policy is quantified, the financial
statements may not help the users of accounts.
(c) Calculation of depreciation for 5
th
 year
Depreciation per year charged for four years = ` 80,00,000 / 10 =
` 8,00,000
WDV of the machine at the end of fourth year = ` 80,00,000 – ` 8,00,000
× 4 = ` 48,00,000.
Depreciable amount after revaluation = ` 48,00,000 + ` 3,20,000
= ` 51,20,000
Remaining useful life as per previous estimate = 6 years
Remaining useful life as per revised estimate = 8 years
Depreciation for the fifth year and onwards = ` 51,20,000 / 8
= ` 6,40,000.
2. (a) Profit and Loss Adjustment A/c 
`  `  
To Advertisement 
(samples) 
3,20,000 By Net profit 32,00,000 
514
To Sales 8,00,000 By Electric fittings 1,20,000 
(goods approved 
in April to 
By Samples 3,20,000 
be taken as April 
sales) 
By Stock 
(Purchases of 
March  
20,00,000 
To Adjusted net 
profit 
67,20,000       not included in 
      stock) 
By Sales (goods 
sold in March 
wrongly taken 
as April sales) 
16,00,000 
By Stock (goods 
sent on approval 
basis not included in 
stock) 
6,00,000 
78,40,000 78,40,000 
Calculation of value of inventory on 31
st
 March, 2024 
`  
Stock on 31
st
 March, 2024 (given) 30,00,000 
Add: Purchases of March, 2024 not included in the 
stock 
20,00,000 
Goods lying with customers on approval basis  6,00,000 
56,00,000 
(b) (i) Cash Book (Bank Column) 
Date Particulars Amount Date Particulars Amount 
2023 ` 2023 ` 
Sept. 
30 
Sept. 
30 
To Party A/c  64,000 By Balance b/d 16,248 
To Customer A/c By Bank charges 2,320 
(Direct deposit) 4,69,600 By Customer A/c 5,60,000    
To Balance c/d   44,968 (B/R dishonoured) 
5,78,568 5,78,568 
(ii) Bank Reconciliation Statement as on 30th September, 2023
Particulars Amount 
` 
Overdraft as per Cash Book 44,968 
Add: Cheque deposited but not collected upto 
30
th
 Sept., 2023 52,56,000 
53,00,968 
515
Less: Cheques issued but not presented for payment 
upto 30
th 
Sept., 2023 (53,04,000) 
Credit by Bank erroneously on 6th Sept.  (80,000) 
Credit balance as per bank statement  83,032 
Note: Bank has credited Akhil by 80,000 in error on 6
th 
September, 2023. 
If this mistake is rectified in the bank statement, then this will not be 
deducted in the above statement along with ` 53,04,000 resulting in 
credit balance of ` 3,032 as per pass-book.   
3. (a) Manufacturing A/c 
Particulars ` Particulars ` 
To Raw Material Consumed 
    (Balancing Figure) 
9,15,000 By Trading A/c 
 (W.N. 4) 
18,32,000 
To Wages (W.N. 2) 3,15,000 
To Depreciation (W.N. 1) 3,95,000 
To Direct Expenses 
 (W.N. 3) 
2,07,000 
18,32,000 18,32,000 
Raw Material A/c 
Particulars ` Particulars ` 
To Opening Stock 
A/c 
1,27,000 By Raw Material 
    Consumed (from  
   Manufacturing A/c above) 
9,15,000 
To Creditors A/c  
(W.N. 5) 
14,40,000 By Closing Stock A/c 
(Balancing Figure) 
6,52,000 
15,67,000 15,67,000 
Working Notes: 
(1) Since purchase of Machinery worth ` 12,00,000 has been omitted.
So, depreciation omitted from being charged  = 12,00,000 X 15%
= ` 1,80,000 
Correct total depreciation expense = ` (2,15,000+1,80,000) 
= 3,95,000 
(2) Wages worth ` 50,000 will be excluded from manufacturing account
as they pertain to office and hence will be charged P&L A/c. So the
revised wages amounting ` 3,15,000 will be shown in
manufacturing account.
(3) Expenses to be excluded from direct expenses:
Office Electricity Charges (80,000 X 25%) 20,000 
Delivery Charges to Customers 22,000 
516
Total expenses not part of Direct Expenses 42,000 
=> Revised Direct Expenses = ` (2,49,000 - 42,000) 
= ` 2,07,000 
Fuel charges are related to factory expenses and also freight 
inwards are incurred for bringing goods to factory/ godown so they 
are part of direct expenses. 
(4) Revised Balance to be transferred to Trading A/c:
Particulars ` 
Current Balance transferred 17,44,000 
Add: Depreciation charges not recorded earlier 1,80,000 
Less: Wages related to Office (50,000) 
Less: Office Expenses (42,000) 
Revised balance to be transferred 18,32,000 
(5) Creditors A/c 
Particulars ` Particulars ` 
To Bank A/c 23,50,000 By Balance b/d 15,70,000 
To Balance 
c/d 
6,60,000 
By Raw Materials A/c 
(Bal. figure) 14,40,000 
30,10,000 30,10,000 
(b) 
Particulars Ram Lakhan Bharat Total 
Profit of 
firm 
I. Amount already credited:
Share of profit (in the ratio
of 1:1:1) (2022-23, 2023-24)
78,000 78,000 78,000 2,34,000 
II. Amount which should have been
credited:
C’s Salary (2022-23, 2023-24)
Interest on Capital (2022-23,
2023-24)
Share of Profit
 15,000 
87,000 
7,500 
43,500 
30,000 
7,500 
43,500 1,74,000 
1,02,000 51,000 81,000 
Net effect (I-II) (24,000) 27,000 (3,000) - 
The necessary journal entry will be: 
Particulars Debit (`) Credit (`) 
Lakhan’s Current A/c 27,000 
To Ram’s Current A/c 24,000 
517
To Bharat’s Current A/c 3,000 
(Salary to Bharat, Interest on capital charged 
and profit shared among partners in the ratio of 
capital)  
(c) Total Profit for 3 years = (` 17,000) + ` 50,000+` 75,000= ` 1,08,000.
Average profits = 
TotalProit 1,08,000
36,000
No. of years 3
?=
`
`
Average Profits for Goodwill = ` 36,000 – Proprietor Remuneration 
= ` 36,000 – ` 6,000 = ` 30,000 
Normal Profit=Interest on Capital employed 
= ` 20,000 (i.e. ` 2,00,000 x10/100) = ` 20,000 
Super Profit = Average Profit-Normal Profit = ` 30,000 – ` 20,000 
= ` 10,000 
Goodwill = Super Profit x No of years purchases = ` 10,000 x 2 = 
` 20,000 
4. (a) Revaluation A/c 
` ` 
To  Plant & Machinery 
(1,70,000 x 15%) 
25,500 By  Land & Building 
A/c 
1,52,000 
To  Provision for Bad & 
Doubtful Debts (60,000 
x 5%) 
3,000 
To  Outstanding Repairs to 
Building 
6,000 
To  X’s Capital A/c (5/8) 73,438 
To  Y’s Capital A/c (3/8) 44,062 
1,52,000 1,52,000 
Partners Capital A/c 
X Y Z X Y Z 
To X’s 
Capital A/c 
- - 20,000 By Balance 
b/d 
4,10,000 3,30,000 - 
To Y’s 
Capital A/c 
12,000 
By Revaluation 
A/c 
73,438 44,062 - 
To Y’s 
Current A/c 
- 68,062 
By Profit & 
Loss A/c 
70,000 42,000 - 
To Balance 
c/d 
6,00,000 3,60,000 2,40,000 By Bank - - 2,72,000 
By Z’s Capital 
A/c 
20,000 12,000 - 
By X’s Current 
A/c 
26,562 - - 
6,00,000 4,28,062 2,72,000 6,00,000 4,28,062 2,72,000 
518