Accounting Model Test Paper - 5 (Questions) | Mock Tests & Past Year Papers for CA Foundation PDF Download

 Page 1


MODEL TEST PAPER 5 
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:
1 The balance in petty cash book represents an asset. 
2. Finished goods are normally valued at cost or market price
whichever is higher.
3 Subscriptions received for the current year shall be shown in the
balance sheet as a current asset.
4 When shares are forfeited, the share capital account is debited with
called up capital of shares forfeited and the share forfeiture account
is credited with Calls in arrear of shares forfeited.
5 Discount at the time of retirement of a bill is a gain for the drawee.
6. Bills receivable and bills payable books are type of subsidiary
books. (6 statements x 2 Marks = 12 Marks)
(b) What services can a Chartered Accountant provide to the society?
(4 Marks) 
(c) One of your clients Mr. X asked you to finalize his account for the year
ended 31
st
 March,2024. As a basis for audit, Mr. X furnished you with
the following statement:
Dr. Cr. 
X's Capital 4,668 
X's Drawings 1,692 
Leasehold Premises 2,250 
Sales 8,250 
Due from customers 1,590 
Purchases 3,777 
Purchase Return 792 
Loan from Bank 768 
Trade Expense 2,100 
Trade Payable 1,584 
Bills Payable 300 
33
Page 2


MODEL TEST PAPER 5 
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:
1 The balance in petty cash book represents an asset. 
2. Finished goods are normally valued at cost or market price
whichever is higher.
3 Subscriptions received for the current year shall be shown in the
balance sheet as a current asset.
4 When shares are forfeited, the share capital account is debited with
called up capital of shares forfeited and the share forfeiture account
is credited with Calls in arrear of shares forfeited.
5 Discount at the time of retirement of a bill is a gain for the drawee.
6. Bills receivable and bills payable books are type of subsidiary
books. (6 statements x 2 Marks = 12 Marks)
(b) What services can a Chartered Accountant provide to the society?
(4 Marks) 
(c) One of your clients Mr. X asked you to finalize his account for the year
ended 31
st
 March,2024. As a basis for audit, Mr. X furnished you with
the following statement:
Dr. Cr. 
X's Capital 4,668 
X's Drawings 1,692 
Leasehold Premises 2,250 
Sales 8,250 
Due from customers 1,590 
Purchases 3,777 
Purchase Return 792 
Loan from Bank 768 
Trade Expense 2,100 
Trade Payable 1,584 
Bills Payable 300 
33
Salaries and Wages 1,800 
Cash at Bank 678 
Opening Inventory 792 
Rent and Rates 1,389 
Sales Return 294 
16,362 16,362 
The closing inventory was `1,722. Mr. X claims that he has recorded 
every transaction correctly as the trial balance is tallied. Check the 
accuracy of the above trial balance and give reasons for the errors, if 
any. (4 Marks) 
(12 + 4 + 4 = 20 Marks) 
2. (a) Mr. Manas was unable to agree the Trial Balance last year and wrote off
the difference to the Profit and Loss Account of that year. Next year, he 
appointed a Chartered Accountant who examined the old books and 
found the following mistakes: 
(i) Purchase of a scooter was debited to conveyance account
` 30,000. Mr. Manas charges 10% depreciation on scooter.
(ii) Purchase account was over cast by ` 1,00,000.
(iii) A credit purchase of goods from Mr. Sam for ` 20,000 was entered
as sale.
(iv) Receipt of cash from Mr. Anand was posted to the account of Mr.
Bhaskar ` 10,000.
(v) Receipt of cash from Mr. Paras was posted to the debit of his
account, ` 5,000.
(vi) ` 5,000 due by Mr. Ramesh was omitted to be taken to the Trial
Balance.
(vii) Sale of goods to Mr. Ram for ` 20,000 was omitted to be recorded.
(viii) Amount of ` 23,950 of purchase was wrongly posted as ` 25,930.
Suggest the necessary rectification entries. (10 Marks) 
(b) M/s Dheeraj, Profit and loss account showed a net profit of ` 8,00,000,
after considering the closing stock of ` 7,50,000 on 31
st
 March, 2024.
Subsequently the following information was obtained from scrutiny of the
books:
(i) Purchases for the year included ` 30,000 paid for new electric
fittings for the shop.
(ii) M/s Dheeraj gave away goods valued at ` 80,000 as free samples
for which no entry was made in the books of accounts.
(iii) Invoices for goods amounting to ` 5,00,000 have been entered on
27
th
 March, 2024, but the goods were not included in stock.
34
Page 3


MODEL TEST PAPER 5 
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:
1 The balance in petty cash book represents an asset. 
2. Finished goods are normally valued at cost or market price
whichever is higher.
3 Subscriptions received for the current year shall be shown in the
balance sheet as a current asset.
4 When shares are forfeited, the share capital account is debited with
called up capital of shares forfeited and the share forfeiture account
is credited with Calls in arrear of shares forfeited.
5 Discount at the time of retirement of a bill is a gain for the drawee.
6. Bills receivable and bills payable books are type of subsidiary
books. (6 statements x 2 Marks = 12 Marks)
(b) What services can a Chartered Accountant provide to the society?
(4 Marks) 
(c) One of your clients Mr. X asked you to finalize his account for the year
ended 31
st
 March,2024. As a basis for audit, Mr. X furnished you with
the following statement:
Dr. Cr. 
X's Capital 4,668 
X's Drawings 1,692 
Leasehold Premises 2,250 
Sales 8,250 
Due from customers 1,590 
Purchases 3,777 
Purchase Return 792 
Loan from Bank 768 
Trade Expense 2,100 
Trade Payable 1,584 
Bills Payable 300 
33
Salaries and Wages 1,800 
Cash at Bank 678 
Opening Inventory 792 
Rent and Rates 1,389 
Sales Return 294 
16,362 16,362 
The closing inventory was `1,722. Mr. X claims that he has recorded 
every transaction correctly as the trial balance is tallied. Check the 
accuracy of the above trial balance and give reasons for the errors, if 
any. (4 Marks) 
(12 + 4 + 4 = 20 Marks) 
2. (a) Mr. Manas was unable to agree the Trial Balance last year and wrote off
the difference to the Profit and Loss Account of that year. Next year, he 
appointed a Chartered Accountant who examined the old books and 
found the following mistakes: 
(i) Purchase of a scooter was debited to conveyance account
` 30,000. Mr. Manas charges 10% depreciation on scooter.
(ii) Purchase account was over cast by ` 1,00,000.
(iii) A credit purchase of goods from Mr. Sam for ` 20,000 was entered
as sale.
(iv) Receipt of cash from Mr. Anand was posted to the account of Mr.
Bhaskar ` 10,000.
(v) Receipt of cash from Mr. Paras was posted to the debit of his
account, ` 5,000.
(vi) ` 5,000 due by Mr. Ramesh was omitted to be taken to the Trial
Balance.
(vii) Sale of goods to Mr. Ram for ` 20,000 was omitted to be recorded.
(viii) Amount of ` 23,950 of purchase was wrongly posted as ` 25,930.
Suggest the necessary rectification entries. (10 Marks) 
(b) M/s Dheeraj, Profit and loss account showed a net profit of ` 8,00,000,
after considering the closing stock of ` 7,50,000 on 31
st
 March, 2024.
Subsequently the following information was obtained from scrutiny of the
books:
(i) Purchases for the year included ` 30,000 paid for new electric
fittings for the shop.
(ii) M/s Dheeraj gave away goods valued at ` 80,000 as free samples
for which no entry was made in the books of accounts.
(iii) Invoices for goods amounting to ` 5,00,000 have been entered on
27
th
 March, 2024, but the goods were not included in stock.
34
(iv) In March, 2024 goods of ` 4,00,000 sold and delivered were taken
in the sales for April, 2024.
(v) Goods costing ` 1,50,000 were sent on sale or return in March,
2024 at a margin of profit of 33-1/3% on cost. Though approval was
given in April, 2024 these were taken as sales for March, 2024.
You are required to determine the adjusted net profit for the year ended 
on 31.3.2024 and calculate the value of stock on 31
st
 March, 2024.  
(10 Marks) 
(10 +10 = 20 Marks) 
3. (a)  The trial balance of Saurav as at 31st March, 2024 is as follows:
Particulars Dr. Cr. 
` ` 
Saurav’s capital account - 1,91,725 
Stock 1
st
 April, 2023 1,17,000  - 
Sales - 9,74,000 
Returns inward 21,500  - 
Purchases 8,04,250  - 
Returns outward  - 14,500 
Carriage inwards 49,000  - 
Rent & taxes 11,750  - 
Salaries & wages 23,250  - 
Sundry debtors 60,000  - 
Sundry creditors  - 37,000 
Bank loan @ 14% p.a.  - 50,000 
Bank interest 2,750  - 
Printing and stationary expenses 36,000  - 
Bank balance 20,000  - 
Discount earned  - 11,100 
Furniture & fittings 12,500  - 
Discount allowed 4,500  - 
General expenses 28,625  - 
Insurance   3,250  - 
Postage & telegram expenses 5,825  - 
Cash balance 950  - 
Travelling expenses 2,175  - 
Drawings 75,000  - 
12,78,325 12,78,325 
35
Page 4


MODEL TEST PAPER 5 
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:
1 The balance in petty cash book represents an asset. 
2. Finished goods are normally valued at cost or market price
whichever is higher.
3 Subscriptions received for the current year shall be shown in the
balance sheet as a current asset.
4 When shares are forfeited, the share capital account is debited with
called up capital of shares forfeited and the share forfeiture account
is credited with Calls in arrear of shares forfeited.
5 Discount at the time of retirement of a bill is a gain for the drawee.
6. Bills receivable and bills payable books are type of subsidiary
books. (6 statements x 2 Marks = 12 Marks)
(b) What services can a Chartered Accountant provide to the society?
(4 Marks) 
(c) One of your clients Mr. X asked you to finalize his account for the year
ended 31
st
 March,2024. As a basis for audit, Mr. X furnished you with
the following statement:
Dr. Cr. 
X's Capital 4,668 
X's Drawings 1,692 
Leasehold Premises 2,250 
Sales 8,250 
Due from customers 1,590 
Purchases 3,777 
Purchase Return 792 
Loan from Bank 768 
Trade Expense 2,100 
Trade Payable 1,584 
Bills Payable 300 
33
Salaries and Wages 1,800 
Cash at Bank 678 
Opening Inventory 792 
Rent and Rates 1,389 
Sales Return 294 
16,362 16,362 
The closing inventory was `1,722. Mr. X claims that he has recorded 
every transaction correctly as the trial balance is tallied. Check the 
accuracy of the above trial balance and give reasons for the errors, if 
any. (4 Marks) 
(12 + 4 + 4 = 20 Marks) 
2. (a) Mr. Manas was unable to agree the Trial Balance last year and wrote off
the difference to the Profit and Loss Account of that year. Next year, he 
appointed a Chartered Accountant who examined the old books and 
found the following mistakes: 
(i) Purchase of a scooter was debited to conveyance account
` 30,000. Mr. Manas charges 10% depreciation on scooter.
(ii) Purchase account was over cast by ` 1,00,000.
(iii) A credit purchase of goods from Mr. Sam for ` 20,000 was entered
as sale.
(iv) Receipt of cash from Mr. Anand was posted to the account of Mr.
Bhaskar ` 10,000.
(v) Receipt of cash from Mr. Paras was posted to the debit of his
account, ` 5,000.
(vi) ` 5,000 due by Mr. Ramesh was omitted to be taken to the Trial
Balance.
(vii) Sale of goods to Mr. Ram for ` 20,000 was omitted to be recorded.
(viii) Amount of ` 23,950 of purchase was wrongly posted as ` 25,930.
Suggest the necessary rectification entries. (10 Marks) 
(b) M/s Dheeraj, Profit and loss account showed a net profit of ` 8,00,000,
after considering the closing stock of ` 7,50,000 on 31
st
 March, 2024.
Subsequently the following information was obtained from scrutiny of the
books:
(i) Purchases for the year included ` 30,000 paid for new electric
fittings for the shop.
(ii) M/s Dheeraj gave away goods valued at ` 80,000 as free samples
for which no entry was made in the books of accounts.
(iii) Invoices for goods amounting to ` 5,00,000 have been entered on
27
th
 March, 2024, but the goods were not included in stock.
34
(iv) In March, 2024 goods of ` 4,00,000 sold and delivered were taken
in the sales for April, 2024.
(v) Goods costing ` 1,50,000 were sent on sale or return in March,
2024 at a margin of profit of 33-1/3% on cost. Though approval was
given in April, 2024 these were taken as sales for March, 2024.
You are required to determine the adjusted net profit for the year ended 
on 31.3.2024 and calculate the value of stock on 31
st
 March, 2024.  
(10 Marks) 
(10 +10 = 20 Marks) 
3. (a)  The trial balance of Saurav as at 31st March, 2024 is as follows:
Particulars Dr. Cr. 
` ` 
Saurav’s capital account - 1,91,725 
Stock 1
st
 April, 2023 1,17,000  - 
Sales - 9,74,000 
Returns inward 21,500  - 
Purchases 8,04,250  - 
Returns outward  - 14,500 
Carriage inwards 49,000  - 
Rent & taxes 11,750  - 
Salaries & wages 23,250  - 
Sundry debtors 60,000  - 
Sundry creditors  - 37,000 
Bank loan @ 14% p.a.  - 50,000 
Bank interest 2,750  - 
Printing and stationary expenses 36,000  - 
Bank balance 20,000  - 
Discount earned  - 11,100 
Furniture & fittings 12,500  - 
Discount allowed 4,500  - 
General expenses 28,625  - 
Insurance   3,250  - 
Postage & telegram expenses 5,825  - 
Cash balance 950  - 
Travelling expenses 2,175  - 
Drawings 75,000  - 
12,78,325 12,78,325 
35
The following adjustments are to be made: 
(1) Provision for bad and doubtful debts be created at 5% and for
discount @ 2% on sundry debtors.
(2) Personal purchases of Saurav amounting to ` 1,500 had been
recorded in the purchases day book.
(3) Depreciation on furniture & fittings @ 10% shall be written off.
(4) Included amongst the debtors is ` 7,500 due from Sunder and
included among the creditors ` 2,500 due to him.
(5) A quarter of the amount of printing and stationary expenses is to
be carried forward to the next year.
(6) Credit purchase invoice amounting to ` 1,000 had been omitted
from the books.
(7) Stock on 31.03.2024 was ` 1,96,500.
(8) Interest on bank loan shall be provided for the whole year.
You are required to prepare Trading & Profit and Loss Account for the 
year ended 31.03.2024.  (12 Marks) 
(b) The following is the Balance Sheet of M/s. Vivek Bros as at 31st March,
2024, they share profit and losses equally:
Balance Sheet as at 31st March, 2024 
Liabilities ` Assets ` 
Capital Amit 24,600 Machinery 30,000 
Puneet 24,600 Furniture 16,800 
Sumit 27,000 Fixture 12,600 
General 
Reserve 
9,000 Cash 9,000 
Trade 
payables 
14,100 Inventories 5,700 
Trade receivables 27,000 
Less: Provision for 
Doubtful debts  
 1,800 25,200 
99,300 99,300 
Sumit died on 1st April, 2024 and the following agreement was to be put 
into effect. 
(a) Assets were to be revalued: Machinery to ` 35,100; Furniture to
` 13,800; Inventory to ` 4,500.
(b) Goodwill was valued at ` 18,000 and was to be credited with his
share, without using a Goodwill Account.
36
Page 5


MODEL TEST PAPER 5 
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:
1 The balance in petty cash book represents an asset. 
2. Finished goods are normally valued at cost or market price
whichever is higher.
3 Subscriptions received for the current year shall be shown in the
balance sheet as a current asset.
4 When shares are forfeited, the share capital account is debited with
called up capital of shares forfeited and the share forfeiture account
is credited with Calls in arrear of shares forfeited.
5 Discount at the time of retirement of a bill is a gain for the drawee.
6. Bills receivable and bills payable books are type of subsidiary
books. (6 statements x 2 Marks = 12 Marks)
(b) What services can a Chartered Accountant provide to the society?
(4 Marks) 
(c) One of your clients Mr. X asked you to finalize his account for the year
ended 31
st
 March,2024. As a basis for audit, Mr. X furnished you with
the following statement:
Dr. Cr. 
X's Capital 4,668 
X's Drawings 1,692 
Leasehold Premises 2,250 
Sales 8,250 
Due from customers 1,590 
Purchases 3,777 
Purchase Return 792 
Loan from Bank 768 
Trade Expense 2,100 
Trade Payable 1,584 
Bills Payable 300 
33
Salaries and Wages 1,800 
Cash at Bank 678 
Opening Inventory 792 
Rent and Rates 1,389 
Sales Return 294 
16,362 16,362 
The closing inventory was `1,722. Mr. X claims that he has recorded 
every transaction correctly as the trial balance is tallied. Check the 
accuracy of the above trial balance and give reasons for the errors, if 
any. (4 Marks) 
(12 + 4 + 4 = 20 Marks) 
2. (a) Mr. Manas was unable to agree the Trial Balance last year and wrote off
the difference to the Profit and Loss Account of that year. Next year, he 
appointed a Chartered Accountant who examined the old books and 
found the following mistakes: 
(i) Purchase of a scooter was debited to conveyance account
` 30,000. Mr. Manas charges 10% depreciation on scooter.
(ii) Purchase account was over cast by ` 1,00,000.
(iii) A credit purchase of goods from Mr. Sam for ` 20,000 was entered
as sale.
(iv) Receipt of cash from Mr. Anand was posted to the account of Mr.
Bhaskar ` 10,000.
(v) Receipt of cash from Mr. Paras was posted to the debit of his
account, ` 5,000.
(vi) ` 5,000 due by Mr. Ramesh was omitted to be taken to the Trial
Balance.
(vii) Sale of goods to Mr. Ram for ` 20,000 was omitted to be recorded.
(viii) Amount of ` 23,950 of purchase was wrongly posted as ` 25,930.
Suggest the necessary rectification entries. (10 Marks) 
(b) M/s Dheeraj, Profit and loss account showed a net profit of ` 8,00,000,
after considering the closing stock of ` 7,50,000 on 31
st
 March, 2024.
Subsequently the following information was obtained from scrutiny of the
books:
(i) Purchases for the year included ` 30,000 paid for new electric
fittings for the shop.
(ii) M/s Dheeraj gave away goods valued at ` 80,000 as free samples
for which no entry was made in the books of accounts.
(iii) Invoices for goods amounting to ` 5,00,000 have been entered on
27
th
 March, 2024, but the goods were not included in stock.
34
(iv) In March, 2024 goods of ` 4,00,000 sold and delivered were taken
in the sales for April, 2024.
(v) Goods costing ` 1,50,000 were sent on sale or return in March,
2024 at a margin of profit of 33-1/3% on cost. Though approval was
given in April, 2024 these were taken as sales for March, 2024.
You are required to determine the adjusted net profit for the year ended 
on 31.3.2024 and calculate the value of stock on 31
st
 March, 2024.  
(10 Marks) 
(10 +10 = 20 Marks) 
3. (a)  The trial balance of Saurav as at 31st March, 2024 is as follows:
Particulars Dr. Cr. 
` ` 
Saurav’s capital account - 1,91,725 
Stock 1
st
 April, 2023 1,17,000  - 
Sales - 9,74,000 
Returns inward 21,500  - 
Purchases 8,04,250  - 
Returns outward  - 14,500 
Carriage inwards 49,000  - 
Rent & taxes 11,750  - 
Salaries & wages 23,250  - 
Sundry debtors 60,000  - 
Sundry creditors  - 37,000 
Bank loan @ 14% p.a.  - 50,000 
Bank interest 2,750  - 
Printing and stationary expenses 36,000  - 
Bank balance 20,000  - 
Discount earned  - 11,100 
Furniture & fittings 12,500  - 
Discount allowed 4,500  - 
General expenses 28,625  - 
Insurance   3,250  - 
Postage & telegram expenses 5,825  - 
Cash balance 950  - 
Travelling expenses 2,175  - 
Drawings 75,000  - 
12,78,325 12,78,325 
35
The following adjustments are to be made: 
(1) Provision for bad and doubtful debts be created at 5% and for
discount @ 2% on sundry debtors.
(2) Personal purchases of Saurav amounting to ` 1,500 had been
recorded in the purchases day book.
(3) Depreciation on furniture & fittings @ 10% shall be written off.
(4) Included amongst the debtors is ` 7,500 due from Sunder and
included among the creditors ` 2,500 due to him.
(5) A quarter of the amount of printing and stationary expenses is to
be carried forward to the next year.
(6) Credit purchase invoice amounting to ` 1,000 had been omitted
from the books.
(7) Stock on 31.03.2024 was ` 1,96,500.
(8) Interest on bank loan shall be provided for the whole year.
You are required to prepare Trading & Profit and Loss Account for the 
year ended 31.03.2024.  (12 Marks) 
(b) The following is the Balance Sheet of M/s. Vivek Bros as at 31st March,
2024, they share profit and losses equally:
Balance Sheet as at 31st March, 2024 
Liabilities ` Assets ` 
Capital Amit 24,600 Machinery 30,000 
Puneet 24,600 Furniture 16,800 
Sumit 27,000 Fixture 12,600 
General 
Reserve 
9,000 Cash 9,000 
Trade 
payables 
14,100 Inventories 5,700 
Trade receivables 27,000 
Less: Provision for 
Doubtful debts  
 1,800 25,200 
99,300 99,300 
Sumit died on 1st April, 2024 and the following agreement was to be put 
into effect. 
(a) Assets were to be revalued: Machinery to ` 35,100; Furniture to
` 13,800; Inventory to ` 4,500.
(b) Goodwill was valued at ` 18,000 and was to be credited with his
share, without using a Goodwill Account.
36
(c) ` 6,000 is to be paid to the executors of the dead partner on 5th
April, 2023.
(d) After death of Sumit, Amit and Puneet share profit equally.
You are required to prepare: 
(i) Journal Entry for Goodwill adjustment.
(ii) Revaluation Account and Capital Accounts of the partners.
(8 Marks) 
(12 + 8 = 20 Marks) 
4. (a) A and B are partners in a firm, sharing Profits and Losses in the ratio of
3 : 2.  The Balance Sheet of A and B as on 31.3.2024 was as follow: 
Liabilities Amount ` Assets Amount ` 
Sundry Creditors 25,800 Building 52,000 
Bill Payable 8,200 Furniture 11,600 
Bank Overdraft 18,000 Stock-in-Trade  42,800 
Capital Accounts: Debtors 70,000 
A  88,000 Less: Provision  400 69,600 
B  72,000 1,60,000 Investment 5,000 
_______ Cash  31,000 
2,12,000 2,12,000 
‘C’ was admitted to the firm on the above date on the following terms: 
(i) He is admitted for 1/6th share in future profits and to introduce a
Capital of ` 50,000.
(ii) The new profit sharing ratio of A, B and C will be 3 : 2 : 1
respectively.
(iii) ‘C’ is unable to bring in cash for his share of goodwill, they decide
to calculate goodwill on the basis of C’s share in the profits and the
capital contribution made by him to the firm.
(iv) Furniture is to be written down by ` 1,740 and Stock to be
depreciated by 5%.  A provision is required for Debtors @ 5% for
Bad Debts.  A provision would also be made for outstanding wages
for ` 3,120.  The value of Buildings having appreciated be brought
upto ` 58,400.  The value of investment is increased by ` 900.
(v) It is found that the creditors included a sum of ` 2,800, which is not
to be paid off.
Prepare the following: 
(i) Revaluation Account.
(ii) Partners’ Capital Accounts.
(iii) Balance Sheet of New Partnership firm after admission of ‘C’.
(12 Marks) 
37