Accounting Model Test Paper - 4 (Questions) | Mock Tests & Past Year Papers for CA Foundation PDF Download

 Page 1


MODEL TEST PAPER 4 
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. Subsidy received from the government for working capital by a
manufacturing concern is a revenue receipt.
ii. If the effect of errors committed cancel out, the errors will be called
compensating errors and the trial balance will disagree.
iii. The financial statements must disclose all the relevant and reliable
information in accordance with the Full Disclosure Principle.
iv. Limited Liability Partnership (LLP) is governed by Indian
Partnership Act, 1932.
v. Nominal Accounts are kept under Single Entry System.
vi. A person holding preference shares of a company cannot hold
equity shares of the same company.
(6 Statements x 2 Marks = 12 Marks) 
(b) Differentiate between provision and contingent liability.  (4 Marks) 
(c) Give journal entries to rectify the following errors located in the books of
a trader after preparing the trial balance:
(i) An amount of ` 13,500 received on account of interest was credited
to commission account.
(ii) A sale of ` 5,920 was posted from sales book to the debit of M/s
Kamal traders at ` 5,290.
(iii) ` 44,000 paid for purchase of Air conditioner for the personal use
of proprietor debited to Machinery A/c.
(iv) Goods returned by customer for ` 20,000.  The same have been
taken into stock but no entry passed in the books of accounts.
(4 Marks) 
2. (a)  A Firm purchased an old Machinery for ` 37,000 on 1
st
 January, 2020
and spent ` 3,000 on its overhauling.  On 1
st
 July 2021, another machine 
was purchased for ` 10,000.  On 1
st
 July 2022, the machinery which was 
25
Page 2


MODEL TEST PAPER 4 
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. Subsidy received from the government for working capital by a
manufacturing concern is a revenue receipt.
ii. If the effect of errors committed cancel out, the errors will be called
compensating errors and the trial balance will disagree.
iii. The financial statements must disclose all the relevant and reliable
information in accordance with the Full Disclosure Principle.
iv. Limited Liability Partnership (LLP) is governed by Indian
Partnership Act, 1932.
v. Nominal Accounts are kept under Single Entry System.
vi. A person holding preference shares of a company cannot hold
equity shares of the same company.
(6 Statements x 2 Marks = 12 Marks) 
(b) Differentiate between provision and contingent liability.  (4 Marks) 
(c) Give journal entries to rectify the following errors located in the books of
a trader after preparing the trial balance:
(i) An amount of ` 13,500 received on account of interest was credited
to commission account.
(ii) A sale of ` 5,920 was posted from sales book to the debit of M/s
Kamal traders at ` 5,290.
(iii) ` 44,000 paid for purchase of Air conditioner for the personal use
of proprietor debited to Machinery A/c.
(iv) Goods returned by customer for ` 20,000.  The same have been
taken into stock but no entry passed in the books of accounts.
(4 Marks) 
2. (a)  A Firm purchased an old Machinery for ` 37,000 on 1
st
 January, 2020
and spent ` 3,000 on its overhauling.  On 1
st
 July 2021, another machine 
was purchased for ` 10,000.  On 1
st
 July 2022, the machinery which was 
25
purchased on 1st January 2020, was sold for ` 28,000 and the same day 
a new machinery costing ` 25,000 was purchased.  On 1
st
 July, 2023, 
the machine which was purchased on 1
st
 July, 2021 was sold for ` 2,000. 
Depreciation is charged @ 10% per annum on straight line method.  The 
firm changed the method and adopted diminishing balance method with 
effect from 1
st
 January, 2021 and the rate was increased to 15% per 
annum. The books are closed on 31
st
 December every year. 
Prepare Machinery account for four years from 1
st
 January, 2020. 
(10 Marks) 
(b) Ram Setu 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 31
st
 December, 2023 as shown by the
inventory sheet was ` 7,20,000.
(ii) On 31
st
 December, stock sheet showed the following
discrepancies:
(a) A page total of ` 45,000 had been carried to summary sheet
as ` 54,000.
(b) The total of a page had been undercast by `1,800.
(iii) Invoice of purchases entered in the Purchase Book during the
quarter from January to March, 2024 totalled ` 6,30,000.  Out of
this ` 27,000 related to goods received prior to 31
st
 December,
2023.  Invoices entered in April, 2024 relating to goods received in
March, 2024 totalled ` 36,000.
(iv) Sales invoiced to customers totalled ` 8,10,000 from January to
March, 2024.  Of this ` 45,000 related to goods dispatched before
31
st
 December, 2023.  Goods dispatched to customers before 31
st
March, 2024 but invoiced in April, 2024 totalled ` 36,000.
(v) During the final quarter, credit notes at invoiced value of ` 9,000
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) 
(10 +10 = 20 Marks) 
3. (a) Dr. Gulleria started private practice on 1st April, 2023 with ` 2,00,000 of
his own fund and ` 3,00,000 borrowed at an interest of 12 p.a. on the 
security of his life policies. His accounts for the year were kept on a cash 
basis and the following is his summarized cash account:  
26
Page 3


MODEL TEST PAPER 4 
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. Subsidy received from the government for working capital by a
manufacturing concern is a revenue receipt.
ii. If the effect of errors committed cancel out, the errors will be called
compensating errors and the trial balance will disagree.
iii. The financial statements must disclose all the relevant and reliable
information in accordance with the Full Disclosure Principle.
iv. Limited Liability Partnership (LLP) is governed by Indian
Partnership Act, 1932.
v. Nominal Accounts are kept under Single Entry System.
vi. A person holding preference shares of a company cannot hold
equity shares of the same company.
(6 Statements x 2 Marks = 12 Marks) 
(b) Differentiate between provision and contingent liability.  (4 Marks) 
(c) Give journal entries to rectify the following errors located in the books of
a trader after preparing the trial balance:
(i) An amount of ` 13,500 received on account of interest was credited
to commission account.
(ii) A sale of ` 5,920 was posted from sales book to the debit of M/s
Kamal traders at ` 5,290.
(iii) ` 44,000 paid for purchase of Air conditioner for the personal use
of proprietor debited to Machinery A/c.
(iv) Goods returned by customer for ` 20,000.  The same have been
taken into stock but no entry passed in the books of accounts.
(4 Marks) 
2. (a)  A Firm purchased an old Machinery for ` 37,000 on 1
st
 January, 2020
and spent ` 3,000 on its overhauling.  On 1
st
 July 2021, another machine 
was purchased for ` 10,000.  On 1
st
 July 2022, the machinery which was 
25
purchased on 1st January 2020, was sold for ` 28,000 and the same day 
a new machinery costing ` 25,000 was purchased.  On 1
st
 July, 2023, 
the machine which was purchased on 1
st
 July, 2021 was sold for ` 2,000. 
Depreciation is charged @ 10% per annum on straight line method.  The 
firm changed the method and adopted diminishing balance method with 
effect from 1
st
 January, 2021 and the rate was increased to 15% per 
annum. The books are closed on 31
st
 December every year. 
Prepare Machinery account for four years from 1
st
 January, 2020. 
(10 Marks) 
(b) Ram Setu 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 31
st
 December, 2023 as shown by the
inventory sheet was ` 7,20,000.
(ii) On 31
st
 December, stock sheet showed the following
discrepancies:
(a) A page total of ` 45,000 had been carried to summary sheet
as ` 54,000.
(b) The total of a page had been undercast by `1,800.
(iii) Invoice of purchases entered in the Purchase Book during the
quarter from January to March, 2024 totalled ` 6,30,000.  Out of
this ` 27,000 related to goods received prior to 31
st
 December,
2023.  Invoices entered in April, 2024 relating to goods received in
March, 2024 totalled ` 36,000.
(iv) Sales invoiced to customers totalled ` 8,10,000 from January to
March, 2024.  Of this ` 45,000 related to goods dispatched before
31
st
 December, 2023.  Goods dispatched to customers before 31
st
March, 2024 but invoiced in April, 2024 totalled ` 36,000.
(v) During the final quarter, credit notes at invoiced value of ` 9,000
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) 
(10 +10 = 20 Marks) 
3. (a) Dr. Gulleria started private practice on 1st April, 2023 with ` 2,00,000 of
his own fund and ` 3,00,000 borrowed at an interest of 12 p.a. on the 
security of his life policies. His accounts for the year were kept on a cash 
basis and the following is his summarized cash account:  
26
Receipts ` Payments `
Own Capital  2,00,000 Medicines Purchased  2,45,000 
Loan  3,00,000 Surgical Equipment  2,50,000 
Prescription Fees  6,60,000 Motor Car  3,20,000 
Visiting Fees 2,50,000 Motor Car Expenses  1,20,000 
Lecture Fees  24,000 Wages and Salaries  1,05,000 
Pension Received 3,00,000 Rent of Clinic  60,000 
General Charges  49,000 
Household Expenses  1,80,000 
Household Furniture  25,000 
Expenses on Daughter's 2,15,000 
college admission  
Interest on Loan  36,000 
Balance at Bank  1,10,000 
Cash in Hand  19,000 
17,34,000 17,34,000 
1/3rd of the motor car expenses may be treated as applicable to the 
private use of car and ` 30,000 of salaries are in respect of domestic 
servants. The stock of medicines in hand on 31st March, 2024 was 
valued at ` 95,000.  
You are required to prepare his private practice income and expenditure 
account and capital account for the year ended 31st March, 2024. Ignore 
depreciation on fixed assets. (8 Marks) 
(b) P Q and R 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 
P 8,00,000 Furniture 2,40,000 
Q 4,20,000 Office 
equipments 
2,80,000 
R 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 
Cash at Bank   3,10,000 
23,50,000 23,50,000 
Q retired on 1
st
 April, 2024 subject to the following conditions: 
27
Page 4


MODEL TEST PAPER 4 
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. Subsidy received from the government for working capital by a
manufacturing concern is a revenue receipt.
ii. If the effect of errors committed cancel out, the errors will be called
compensating errors and the trial balance will disagree.
iii. The financial statements must disclose all the relevant and reliable
information in accordance with the Full Disclosure Principle.
iv. Limited Liability Partnership (LLP) is governed by Indian
Partnership Act, 1932.
v. Nominal Accounts are kept under Single Entry System.
vi. A person holding preference shares of a company cannot hold
equity shares of the same company.
(6 Statements x 2 Marks = 12 Marks) 
(b) Differentiate between provision and contingent liability.  (4 Marks) 
(c) Give journal entries to rectify the following errors located in the books of
a trader after preparing the trial balance:
(i) An amount of ` 13,500 received on account of interest was credited
to commission account.
(ii) A sale of ` 5,920 was posted from sales book to the debit of M/s
Kamal traders at ` 5,290.
(iii) ` 44,000 paid for purchase of Air conditioner for the personal use
of proprietor debited to Machinery A/c.
(iv) Goods returned by customer for ` 20,000.  The same have been
taken into stock but no entry passed in the books of accounts.
(4 Marks) 
2. (a)  A Firm purchased an old Machinery for ` 37,000 on 1
st
 January, 2020
and spent ` 3,000 on its overhauling.  On 1
st
 July 2021, another machine 
was purchased for ` 10,000.  On 1
st
 July 2022, the machinery which was 
25
purchased on 1st January 2020, was sold for ` 28,000 and the same day 
a new machinery costing ` 25,000 was purchased.  On 1
st
 July, 2023, 
the machine which was purchased on 1
st
 July, 2021 was sold for ` 2,000. 
Depreciation is charged @ 10% per annum on straight line method.  The 
firm changed the method and adopted diminishing balance method with 
effect from 1
st
 January, 2021 and the rate was increased to 15% per 
annum. The books are closed on 31
st
 December every year. 
Prepare Machinery account for four years from 1
st
 January, 2020. 
(10 Marks) 
(b) Ram Setu 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 31
st
 December, 2023 as shown by the
inventory sheet was ` 7,20,000.
(ii) On 31
st
 December, stock sheet showed the following
discrepancies:
(a) A page total of ` 45,000 had been carried to summary sheet
as ` 54,000.
(b) The total of a page had been undercast by `1,800.
(iii) Invoice of purchases entered in the Purchase Book during the
quarter from January to March, 2024 totalled ` 6,30,000.  Out of
this ` 27,000 related to goods received prior to 31
st
 December,
2023.  Invoices entered in April, 2024 relating to goods received in
March, 2024 totalled ` 36,000.
(iv) Sales invoiced to customers totalled ` 8,10,000 from January to
March, 2024.  Of this ` 45,000 related to goods dispatched before
31
st
 December, 2023.  Goods dispatched to customers before 31
st
March, 2024 but invoiced in April, 2024 totalled ` 36,000.
(v) During the final quarter, credit notes at invoiced value of ` 9,000
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) 
(10 +10 = 20 Marks) 
3. (a) Dr. Gulleria started private practice on 1st April, 2023 with ` 2,00,000 of
his own fund and ` 3,00,000 borrowed at an interest of 12 p.a. on the 
security of his life policies. His accounts for the year were kept on a cash 
basis and the following is his summarized cash account:  
26
Receipts ` Payments `
Own Capital  2,00,000 Medicines Purchased  2,45,000 
Loan  3,00,000 Surgical Equipment  2,50,000 
Prescription Fees  6,60,000 Motor Car  3,20,000 
Visiting Fees 2,50,000 Motor Car Expenses  1,20,000 
Lecture Fees  24,000 Wages and Salaries  1,05,000 
Pension Received 3,00,000 Rent of Clinic  60,000 
General Charges  49,000 
Household Expenses  1,80,000 
Household Furniture  25,000 
Expenses on Daughter's 2,15,000 
college admission  
Interest on Loan  36,000 
Balance at Bank  1,10,000 
Cash in Hand  19,000 
17,34,000 17,34,000 
1/3rd of the motor car expenses may be treated as applicable to the 
private use of car and ` 30,000 of salaries are in respect of domestic 
servants. The stock of medicines in hand on 31st March, 2024 was 
valued at ` 95,000.  
You are required to prepare his private practice income and expenditure 
account and capital account for the year ended 31st March, 2024. Ignore 
depreciation on fixed assets. (8 Marks) 
(b) P Q and R 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 
P 8,00,000 Furniture 2,40,000 
Q 4,20,000 Office 
equipments 
2,80,000 
R 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 
Cash at Bank   3,10,000 
23,50,000 23,50,000 
Q retired on 1
st
 April, 2024 subject to the following conditions: 
27
(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,2,20,000.
(iii) Provision for doubtful debts is to be created @ 5% on debtors.
(iv) 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 
(v) Amount due to Q is to be transferred to his Loan Account.
Prepare the Revaluation Account, Partners' Capital Accounts and the 
Balance Sheet immediately after Q's retirement. (12 Marks) 
(8 + 12= 20 Marks) 
4. (a)  The following is the Balance Sheet of A, B, C on 31st December, 2023
when they decided to dissolve the partnership: 
Liabilities ` Assets `
Creditors 3,000 Sundry Assets 72,750 
A's Loan 7,500 Cash 750 
Capital Accounts: 
A 22,500 
B 27,000 
C 13,500 
73,500 73,500 
The assets realized the following sums in installments: 
Inst. `
I 1,500 
II 4,500 
III 5,850 
IV 9,000 
V 30,150 
51,000 
The expenses of realization were expected to be `750 but ultimately 
amounted to `600 only. Show how at each stage the cash received 
should be distributed between partners. They share profits in the ratio of 
2:2:1.  (8 Marks) 
28
Page 5


MODEL TEST PAPER 4 
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. Subsidy received from the government for working capital by a
manufacturing concern is a revenue receipt.
ii. If the effect of errors committed cancel out, the errors will be called
compensating errors and the trial balance will disagree.
iii. The financial statements must disclose all the relevant and reliable
information in accordance with the Full Disclosure Principle.
iv. Limited Liability Partnership (LLP) is governed by Indian
Partnership Act, 1932.
v. Nominal Accounts are kept under Single Entry System.
vi. A person holding preference shares of a company cannot hold
equity shares of the same company.
(6 Statements x 2 Marks = 12 Marks) 
(b) Differentiate between provision and contingent liability.  (4 Marks) 
(c) Give journal entries to rectify the following errors located in the books of
a trader after preparing the trial balance:
(i) An amount of ` 13,500 received on account of interest was credited
to commission account.
(ii) A sale of ` 5,920 was posted from sales book to the debit of M/s
Kamal traders at ` 5,290.
(iii) ` 44,000 paid for purchase of Air conditioner for the personal use
of proprietor debited to Machinery A/c.
(iv) Goods returned by customer for ` 20,000.  The same have been
taken into stock but no entry passed in the books of accounts.
(4 Marks) 
2. (a)  A Firm purchased an old Machinery for ` 37,000 on 1
st
 January, 2020
and spent ` 3,000 on its overhauling.  On 1
st
 July 2021, another machine 
was purchased for ` 10,000.  On 1
st
 July 2022, the machinery which was 
25
purchased on 1st January 2020, was sold for ` 28,000 and the same day 
a new machinery costing ` 25,000 was purchased.  On 1
st
 July, 2023, 
the machine which was purchased on 1
st
 July, 2021 was sold for ` 2,000. 
Depreciation is charged @ 10% per annum on straight line method.  The 
firm changed the method and adopted diminishing balance method with 
effect from 1
st
 January, 2021 and the rate was increased to 15% per 
annum. The books are closed on 31
st
 December every year. 
Prepare Machinery account for four years from 1
st
 January, 2020. 
(10 Marks) 
(b) Ram Setu 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 31
st
 December, 2023 as shown by the
inventory sheet was ` 7,20,000.
(ii) On 31
st
 December, stock sheet showed the following
discrepancies:
(a) A page total of ` 45,000 had been carried to summary sheet
as ` 54,000.
(b) The total of a page had been undercast by `1,800.
(iii) Invoice of purchases entered in the Purchase Book during the
quarter from January to March, 2024 totalled ` 6,30,000.  Out of
this ` 27,000 related to goods received prior to 31
st
 December,
2023.  Invoices entered in April, 2024 relating to goods received in
March, 2024 totalled ` 36,000.
(iv) Sales invoiced to customers totalled ` 8,10,000 from January to
March, 2024.  Of this ` 45,000 related to goods dispatched before
31
st
 December, 2023.  Goods dispatched to customers before 31
st
March, 2024 but invoiced in April, 2024 totalled ` 36,000.
(v) During the final quarter, credit notes at invoiced value of ` 9,000
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) 
(10 +10 = 20 Marks) 
3. (a) Dr. Gulleria started private practice on 1st April, 2023 with ` 2,00,000 of
his own fund and ` 3,00,000 borrowed at an interest of 12 p.a. on the 
security of his life policies. His accounts for the year were kept on a cash 
basis and the following is his summarized cash account:  
26
Receipts ` Payments `
Own Capital  2,00,000 Medicines Purchased  2,45,000 
Loan  3,00,000 Surgical Equipment  2,50,000 
Prescription Fees  6,60,000 Motor Car  3,20,000 
Visiting Fees 2,50,000 Motor Car Expenses  1,20,000 
Lecture Fees  24,000 Wages and Salaries  1,05,000 
Pension Received 3,00,000 Rent of Clinic  60,000 
General Charges  49,000 
Household Expenses  1,80,000 
Household Furniture  25,000 
Expenses on Daughter's 2,15,000 
college admission  
Interest on Loan  36,000 
Balance at Bank  1,10,000 
Cash in Hand  19,000 
17,34,000 17,34,000 
1/3rd of the motor car expenses may be treated as applicable to the 
private use of car and ` 30,000 of salaries are in respect of domestic 
servants. The stock of medicines in hand on 31st March, 2024 was 
valued at ` 95,000.  
You are required to prepare his private practice income and expenditure 
account and capital account for the year ended 31st March, 2024. Ignore 
depreciation on fixed assets. (8 Marks) 
(b) P Q and R 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 
P 8,00,000 Furniture 2,40,000 
Q 4,20,000 Office 
equipments 
2,80,000 
R 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 
Cash at Bank   3,10,000 
23,50,000 23,50,000 
Q retired on 1
st
 April, 2024 subject to the following conditions: 
27
(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,2,20,000.
(iii) Provision for doubtful debts is to be created @ 5% on debtors.
(iv) 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 
(v) Amount due to Q is to be transferred to his Loan Account.
Prepare the Revaluation Account, Partners' Capital Accounts and the 
Balance Sheet immediately after Q's retirement. (12 Marks) 
(8 + 12= 20 Marks) 
4. (a)  The following is the Balance Sheet of A, B, C on 31st December, 2023
when they decided to dissolve the partnership: 
Liabilities ` Assets `
Creditors 3,000 Sundry Assets 72,750 
A's Loan 7,500 Cash 750 
Capital Accounts: 
A 22,500 
B 27,000 
C 13,500 
73,500 73,500 
The assets realized the following sums in installments: 
Inst. `
I 1,500 
II 4,500 
III 5,850 
IV 9,000 
V 30,150 
51,000 
The expenses of realization were expected to be `750 but ultimately 
amounted to `600 only. Show how at each stage the cash received 
should be distributed between partners. They share profits in the ratio of 
2:2:1.  (8 Marks) 
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(b) The following are the balances as at 31st March, 2024 extracted from
the books of Mr. Chauhan.
Particulars ` Particulars `
Plant and Machinery 39,100 Bad debts recovered 900 
Furniture and Fittings 20,500 Salaries 45,100 
Bank Overdraft 1,60,000 Salaries payable 4,900 
Capital Account 1,30,000 Prepaid rent 600 
Drawings 16,000 Rent 8,600 
Purchases 3,20,000 Carriage inward 2,250 
Opening Stock 64,500 Carriage outward 2,700 
Wages 24,330 Sales 4,30,600 
Provision for doubtful 
debts 
6,400 Advertisement 
Expenses  
6,700 
Provision for Discount 
on debtors 
2,750 Printing and 
Stationery 
2,500 
Sundry Debtors 2,40,000 Cash in hand 2,900 
Sundry Creditors 95,000 Cash at bank 6,250 
Bad debts 2,200 Office Expenses 20,320 
Interest paid on loan 6,000 
Additional Information: 
1. Purchases include sales return of ` 5,150 and sales include
purchases return of ` 3,450.
2. Free samples distributed for publicity costing ` 1,650.
3. Wages paid in the month of April for installation of plant and
machinery amounting to ` 900 were included in wages account.
4. Create a provision for doubtful debts @ 5% and provision for
discount on debtors @ 2.5%.
5. Depreciation is to be provided on plant and machinery @ 15% p.a.
and on furniture and fittings @ 10% p.a.
6. Closing stock as on 31
st
 March, 2024 is ` 2,50,000.
Prepare a Trading and Profit and Loss Account for the year ended 
31
st
 March, 2024, and a Balance Sheet as on that date.  (12 Marks) 
(8+12= 20 Marks) 
5. (a)  Bharat owed ` 50,000 to Katen. On 1
st
 October, 2023, Bharat accepted
a bill drawn by Katen for the amount at 3 months. Katen got the bill 
discounted with his bank for ` 49,500 on 3
rd
 October, 2023. Before the 
due date, Bharat approached Katen for renewal of the bill. Katen agreed 
on the conditions that `25,000 be paid immediately together with interest 
on the remaining amount at 12% per annum for 3 months and for the 
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