Accounting Model Test Paper - 7 (Answers) | Mock Tests & Past Year Papers for CA Foundation PDF Download

 Page 1


ANSWERS OF MODEL TEST PAPER 7 
FOUNDATION COURSE 
PAPER – 1: ACCOUNTING 
ANSWERS 
1. (a) (i) False: A claim that an enterprise is pursuing through legal process,
where the outcome is uncertain, is a contingent asset. 
(ii) False: If the effect of errors committed cancel out, the errors will
be called compensating errors and the trial balance will agree.
(iii) True: If closing stock appears in trail balance, it depicts that one
aspect of the double entry has been completed, hence it is taken
only to Balance Sheet.
(iv) False: A forfeited share is merely a share available to the company
for sale and remains vested in the company for that purpose only.
Reissue of forfeited shares is not allotment of shares but only a sale
as they have already been allotted earlier.
(v) True: All the receipts and payments whether of revenue or capital
nature are included in Receipt and Payment account.
(vi) True: As per perpetual existence the company has existence
independent of its members, it continues to be in existence despite
the death, insolvency or change of members.
(b) Distinction between Money Measurement concept and Matching
concept
As per Money Measurement concept, only those transactions, which can
be measured in terms of money are recorded. Since money is the medium
of exchange and the standard of economic value, this concept requires that
those transactions alone that are capable of being measured in terms of
money should be recorded in the books of accounts. Transactions and
events that cannot be expressed in terms of money are not recorded in the
business books.
In Matching concept, all expenses matched with the revenue of that period
should only be taken into consideration. In the financial statements of the
organization if any revenue is recognized then expenses related to earn
that revenue should also be recognized.
571
Page 2


ANSWERS OF MODEL TEST PAPER 7 
FOUNDATION COURSE 
PAPER – 1: ACCOUNTING 
ANSWERS 
1. (a) (i) False: A claim that an enterprise is pursuing through legal process,
where the outcome is uncertain, is a contingent asset. 
(ii) False: If the effect of errors committed cancel out, the errors will
be called compensating errors and the trial balance will agree.
(iii) True: If closing stock appears in trail balance, it depicts that one
aspect of the double entry has been completed, hence it is taken
only to Balance Sheet.
(iv) False: A forfeited share is merely a share available to the company
for sale and remains vested in the company for that purpose only.
Reissue of forfeited shares is not allotment of shares but only a sale
as they have already been allotted earlier.
(v) True: All the receipts and payments whether of revenue or capital
nature are included in Receipt and Payment account.
(vi) True: As per perpetual existence the company has existence
independent of its members, it continues to be in existence despite
the death, insolvency or change of members.
(b) Distinction between Money Measurement concept and Matching
concept
As per Money Measurement concept, only those transactions, which can
be measured in terms of money are recorded. Since money is the medium
of exchange and the standard of economic value, this concept requires that
those transactions alone that are capable of being measured in terms of
money should be recorded in the books of accounts. Transactions and
events that cannot be expressed in terms of money are not recorded in the
business books.
In Matching concept, all expenses matched with the revenue of that period
should only be taken into consideration. In the financial statements of the
organization if any revenue is recognized then expenses related to earn
that revenue should also be recognized.
571
 (c)       Chemical Mill 
Calculation of the value of Inventory as on 31-3-2024 
 Receipts Issues Balance 
Date Units Rate Amount Units Rate Amount Units Rate Amount 
  ` `  ` `  ` ` 
1-1-2024 Balance       Nil  
1-1-2024 100 300 30,000    100 300 30,000 
15-1-2024    50 300 15,000 50 300 15,000 
1-2-2024 200 400 80,000    250 380 95,000 
15-2-2024    100 380 38,000 150 380 57,000 
20-2-2024    100 380 38,000 50 380 19,000 
 Therefore, the value of Inventory as on 31-3-2024 = 50 units @ ` 380  
= `19,000 
2. (a)      In the books of Saraswat & Sons 
Journal 
 Particulars L.F. Dr. 
` 
Cr. 
` 
(i) Furniture A/c                Dr.   20,000  
  To Purchases A/c   20,000 
 (Correction of wrong debit to Purchases A/c 
for furniture purchased) 
   
(ii) Satyam A/c          Dr.   3,000  
  To Bad Debts Recovered A/c   3,000 
 (Correction of wrong credit to Personal A/c in 
respect of recovery of previously written off 
bad debts) 
   
(iii) Repairs A/c         Dr.   18,500  
  To Building A/c   18,500 
 (Correction of wrong debit to building A/c for 
repairs made) 
   
(iv) Purchases A/c         Dr.   18,000  
   To Ram Singh A/c   18,000 
 (Purchases of goods from Ram Singh 
remained unrecorded) 
   
(v) Drawings A/c        Dr.  15,000  
  To Audit Fees A/c   15,000 
 (Correction of wrong debit to Audit Fees A/c 
for college fees of proprietor’s son) 
   
  
572
Page 3


ANSWERS OF MODEL TEST PAPER 7 
FOUNDATION COURSE 
PAPER – 1: ACCOUNTING 
ANSWERS 
1. (a) (i) False: A claim that an enterprise is pursuing through legal process,
where the outcome is uncertain, is a contingent asset. 
(ii) False: If the effect of errors committed cancel out, the errors will
be called compensating errors and the trial balance will agree.
(iii) True: If closing stock appears in trail balance, it depicts that one
aspect of the double entry has been completed, hence it is taken
only to Balance Sheet.
(iv) False: A forfeited share is merely a share available to the company
for sale and remains vested in the company for that purpose only.
Reissue of forfeited shares is not allotment of shares but only a sale
as they have already been allotted earlier.
(v) True: All the receipts and payments whether of revenue or capital
nature are included in Receipt and Payment account.
(vi) True: As per perpetual existence the company has existence
independent of its members, it continues to be in existence despite
the death, insolvency or change of members.
(b) Distinction between Money Measurement concept and Matching
concept
As per Money Measurement concept, only those transactions, which can
be measured in terms of money are recorded. Since money is the medium
of exchange and the standard of economic value, this concept requires that
those transactions alone that are capable of being measured in terms of
money should be recorded in the books of accounts. Transactions and
events that cannot be expressed in terms of money are not recorded in the
business books.
In Matching concept, all expenses matched with the revenue of that period
should only be taken into consideration. In the financial statements of the
organization if any revenue is recognized then expenses related to earn
that revenue should also be recognized.
571
 (c)       Chemical Mill 
Calculation of the value of Inventory as on 31-3-2024 
 Receipts Issues Balance 
Date Units Rate Amount Units Rate Amount Units Rate Amount 
  ` `  ` `  ` ` 
1-1-2024 Balance       Nil  
1-1-2024 100 300 30,000    100 300 30,000 
15-1-2024    50 300 15,000 50 300 15,000 
1-2-2024 200 400 80,000    250 380 95,000 
15-2-2024    100 380 38,000 150 380 57,000 
20-2-2024    100 380 38,000 50 380 19,000 
 Therefore, the value of Inventory as on 31-3-2024 = 50 units @ ` 380  
= `19,000 
2. (a)      In the books of Saraswat & Sons 
Journal 
 Particulars L.F. Dr. 
` 
Cr. 
` 
(i) Furniture A/c                Dr.   20,000  
  To Purchases A/c   20,000 
 (Correction of wrong debit to Purchases A/c 
for furniture purchased) 
   
(ii) Satyam A/c          Dr.   3,000  
  To Bad Debts Recovered A/c   3,000 
 (Correction of wrong credit to Personal A/c in 
respect of recovery of previously written off 
bad debts) 
   
(iii) Repairs A/c         Dr.   18,500  
  To Building A/c   18,500 
 (Correction of wrong debit to building A/c for 
repairs made) 
   
(iv) Purchases A/c         Dr.   18,000  
   To Ram Singh A/c   18,000 
 (Purchases of goods from Ram Singh 
remained unrecorded) 
   
(v) Drawings A/c        Dr.  15,000  
  To Audit Fees A/c   15,000 
 (Correction of wrong debit to Audit Fees A/c 
for college fees of proprietor’s son) 
   
  
572
(vi) Anita             Dr.   4,500  
  To Kanika    4,500 
 (Correction of wrong credit to Anita instead of 
Kanika) 
   
(vii) Returns Inwards / Sales Return A/c     Dr.  8,900  
  To Customer/Debtors A/c   8,900 
 (Entry of goods returned by customer and 
taken in inventory omitted from records) 
   
(viii) Furniture A/c         Dr.   7,500  
  To Wages A/c   7,500 
 (Wages paid to workmen for office furniture 
wrongly charged to wages a/c now rectified) 
   
(ix) Salaries A/c         Dr.   18,000  
  To Clerk’s (Personal) A/c   18,000 
 (Correction of wrong debit to Clerk’s personal 
A/c for salaries paid) 
   
(x) Purchases A/c        Dr.   20,000  
 Sales A/c          Dr.   20,000  
  To Raghav A/c 
(Correction of wrong entry in the sales Book 
for purchases of goods from Raghav) 
  40,000 
(b)       S Chand & Associates 
    Dr.       Machinery Account      Cr. 
Date Particulars Amount 
(`) 
Date Particulars Amount 
(`) 
1.1.2021 To Bank A/c 3,00,000 31.12.2021 By Balance c/d 3,00,000 
  3,00,000   3,00,000 
1.1.2022 To Balance 
b/d 
3,00,000    
1.7.2022 To Bank A/c 4,50,000 31.12.2022 By Balance c/d 7,50,000 
  7,50,000   7,50,000 
1.1.2023 To Balance 
b/d 
7,50,000 31.12.2023 By Machinery 
Disposal A/c 
3,00,000 
   31.12.2023 By Balance c/d 4,50,000 
  7,50,000   7,50,000 
1.1.2024 To Balance 
b/d 
4,50,000    
 
  
573
Page 4


ANSWERS OF MODEL TEST PAPER 7 
FOUNDATION COURSE 
PAPER – 1: ACCOUNTING 
ANSWERS 
1. (a) (i) False: A claim that an enterprise is pursuing through legal process,
where the outcome is uncertain, is a contingent asset. 
(ii) False: If the effect of errors committed cancel out, the errors will
be called compensating errors and the trial balance will agree.
(iii) True: If closing stock appears in trail balance, it depicts that one
aspect of the double entry has been completed, hence it is taken
only to Balance Sheet.
(iv) False: A forfeited share is merely a share available to the company
for sale and remains vested in the company for that purpose only.
Reissue of forfeited shares is not allotment of shares but only a sale
as they have already been allotted earlier.
(v) True: All the receipts and payments whether of revenue or capital
nature are included in Receipt and Payment account.
(vi) True: As per perpetual existence the company has existence
independent of its members, it continues to be in existence despite
the death, insolvency or change of members.
(b) Distinction between Money Measurement concept and Matching
concept
As per Money Measurement concept, only those transactions, which can
be measured in terms of money are recorded. Since money is the medium
of exchange and the standard of economic value, this concept requires that
those transactions alone that are capable of being measured in terms of
money should be recorded in the books of accounts. Transactions and
events that cannot be expressed in terms of money are not recorded in the
business books.
In Matching concept, all expenses matched with the revenue of that period
should only be taken into consideration. In the financial statements of the
organization if any revenue is recognized then expenses related to earn
that revenue should also be recognized.
571
 (c)       Chemical Mill 
Calculation of the value of Inventory as on 31-3-2024 
 Receipts Issues Balance 
Date Units Rate Amount Units Rate Amount Units Rate Amount 
  ` `  ` `  ` ` 
1-1-2024 Balance       Nil  
1-1-2024 100 300 30,000    100 300 30,000 
15-1-2024    50 300 15,000 50 300 15,000 
1-2-2024 200 400 80,000    250 380 95,000 
15-2-2024    100 380 38,000 150 380 57,000 
20-2-2024    100 380 38,000 50 380 19,000 
 Therefore, the value of Inventory as on 31-3-2024 = 50 units @ ` 380  
= `19,000 
2. (a)      In the books of Saraswat & Sons 
Journal 
 Particulars L.F. Dr. 
` 
Cr. 
` 
(i) Furniture A/c                Dr.   20,000  
  To Purchases A/c   20,000 
 (Correction of wrong debit to Purchases A/c 
for furniture purchased) 
   
(ii) Satyam A/c          Dr.   3,000  
  To Bad Debts Recovered A/c   3,000 
 (Correction of wrong credit to Personal A/c in 
respect of recovery of previously written off 
bad debts) 
   
(iii) Repairs A/c         Dr.   18,500  
  To Building A/c   18,500 
 (Correction of wrong debit to building A/c for 
repairs made) 
   
(iv) Purchases A/c         Dr.   18,000  
   To Ram Singh A/c   18,000 
 (Purchases of goods from Ram Singh 
remained unrecorded) 
   
(v) Drawings A/c        Dr.  15,000  
  To Audit Fees A/c   15,000 
 (Correction of wrong debit to Audit Fees A/c 
for college fees of proprietor’s son) 
   
  
572
(vi) Anita             Dr.   4,500  
  To Kanika    4,500 
 (Correction of wrong credit to Anita instead of 
Kanika) 
   
(vii) Returns Inwards / Sales Return A/c     Dr.  8,900  
  To Customer/Debtors A/c   8,900 
 (Entry of goods returned by customer and 
taken in inventory omitted from records) 
   
(viii) Furniture A/c         Dr.   7,500  
  To Wages A/c   7,500 
 (Wages paid to workmen for office furniture 
wrongly charged to wages a/c now rectified) 
   
(ix) Salaries A/c         Dr.   18,000  
  To Clerk’s (Personal) A/c   18,000 
 (Correction of wrong debit to Clerk’s personal 
A/c for salaries paid) 
   
(x) Purchases A/c        Dr.   20,000  
 Sales A/c          Dr.   20,000  
  To Raghav A/c 
(Correction of wrong entry in the sales Book 
for purchases of goods from Raghav) 
  40,000 
(b)       S Chand & Associates 
    Dr.       Machinery Account      Cr. 
Date Particulars Amount 
(`) 
Date Particulars Amount 
(`) 
1.1.2021 To Bank A/c 3,00,000 31.12.2021 By Balance c/d 3,00,000 
  3,00,000   3,00,000 
1.1.2022 To Balance 
b/d 
3,00,000    
1.7.2022 To Bank A/c 4,50,000 31.12.2022 By Balance c/d 7,50,000 
  7,50,000   7,50,000 
1.1.2023 To Balance 
b/d 
7,50,000 31.12.2023 By Machinery 
Disposal A/c 
3,00,000 
   31.12.2023 By Balance c/d 4,50,000 
  7,50,000   7,50,000 
1.1.2024 To Balance 
b/d 
4,50,000    
 
  
573
Dr.     Provision for Depreciation Account    Cr. 
Date  Particulars  Amount 
(`) 
Date Particulars Amount 
(`) 
31.12.2021 To Balance c/d 45,000 31.12.2021 By Depreciation 
A/c 
45,000 
  45,000   45,000 
31.12.2022 To Balance c/d 1,17,000 1.1.2022 By Balance b/d 45,000 
   31.12.2022 By Depreciation 
A/c 
(` 38,250 + 
` 33,750) 
72,000 
  1,17,000   1,17,000 
31.12.2023 To Machinery 
Disposal A/c 
 
1,15,762 1.1.2023 By Balance b/d 1,17,000 
31.12.2023 To Balance c/d 96,188 31.12.2023 
31.12.2023 
By Depreciation 
A/c (WN 1) 
By Depreciation on 
machinery sold 
(WN 2) 
62,438 
 
32,512 
  2,11,950   2,11,950 
   1.1.2024 By Balance b/d 96,188 
Dr.      Machinery Disposal Account           Cr.  
Date Particulars Amount 
(`) 
Date Particulars Amount 
(`) 
31.12.2023 To Machinery 
A/c 
3,00,000 31.12.2023 By Provision for 
Depreciation A/c 
1,15,762 
   31.12.2023 By Bank A/c 1,50,000 
   31.12.2023 By Profit & Loss 
A/c (Loss on 
Sale) 
34,238 
  3,00,000   3,00,000 
 Working Notes: 
1. Depreciation for the machine purchased on 1.7.2022. 
For the year 2022 (Used for 6 months) = ` 4,50,000 x 15% x 
12
6
  
= ` 33,750 
For the year 2023 (Used for full year) = ` 4,16,250 x15 % = ` 62,438 
2. Depreciation for the machine purchased on 1.1.2021. 
 Depreciation for the year 2021 = ` 3,00,000 x 15% = ` 45,000 
 Depreciation for the year 2022  = `2,55,000 x15% = ` 38,250 
 Depreciation for the year 2023 = ` 2,16,750 x15% =` 32,512 
  
574
Page 5


ANSWERS OF MODEL TEST PAPER 7 
FOUNDATION COURSE 
PAPER – 1: ACCOUNTING 
ANSWERS 
1. (a) (i) False: A claim that an enterprise is pursuing through legal process,
where the outcome is uncertain, is a contingent asset. 
(ii) False: If the effect of errors committed cancel out, the errors will
be called compensating errors and the trial balance will agree.
(iii) True: If closing stock appears in trail balance, it depicts that one
aspect of the double entry has been completed, hence it is taken
only to Balance Sheet.
(iv) False: A forfeited share is merely a share available to the company
for sale and remains vested in the company for that purpose only.
Reissue of forfeited shares is not allotment of shares but only a sale
as they have already been allotted earlier.
(v) True: All the receipts and payments whether of revenue or capital
nature are included in Receipt and Payment account.
(vi) True: As per perpetual existence the company has existence
independent of its members, it continues to be in existence despite
the death, insolvency or change of members.
(b) Distinction between Money Measurement concept and Matching
concept
As per Money Measurement concept, only those transactions, which can
be measured in terms of money are recorded. Since money is the medium
of exchange and the standard of economic value, this concept requires that
those transactions alone that are capable of being measured in terms of
money should be recorded in the books of accounts. Transactions and
events that cannot be expressed in terms of money are not recorded in the
business books.
In Matching concept, all expenses matched with the revenue of that period
should only be taken into consideration. In the financial statements of the
organization if any revenue is recognized then expenses related to earn
that revenue should also be recognized.
571
 (c)       Chemical Mill 
Calculation of the value of Inventory as on 31-3-2024 
 Receipts Issues Balance 
Date Units Rate Amount Units Rate Amount Units Rate Amount 
  ` `  ` `  ` ` 
1-1-2024 Balance       Nil  
1-1-2024 100 300 30,000    100 300 30,000 
15-1-2024    50 300 15,000 50 300 15,000 
1-2-2024 200 400 80,000    250 380 95,000 
15-2-2024    100 380 38,000 150 380 57,000 
20-2-2024    100 380 38,000 50 380 19,000 
 Therefore, the value of Inventory as on 31-3-2024 = 50 units @ ` 380  
= `19,000 
2. (a)      In the books of Saraswat & Sons 
Journal 
 Particulars L.F. Dr. 
` 
Cr. 
` 
(i) Furniture A/c                Dr.   20,000  
  To Purchases A/c   20,000 
 (Correction of wrong debit to Purchases A/c 
for furniture purchased) 
   
(ii) Satyam A/c          Dr.   3,000  
  To Bad Debts Recovered A/c   3,000 
 (Correction of wrong credit to Personal A/c in 
respect of recovery of previously written off 
bad debts) 
   
(iii) Repairs A/c         Dr.   18,500  
  To Building A/c   18,500 
 (Correction of wrong debit to building A/c for 
repairs made) 
   
(iv) Purchases A/c         Dr.   18,000  
   To Ram Singh A/c   18,000 
 (Purchases of goods from Ram Singh 
remained unrecorded) 
   
(v) Drawings A/c        Dr.  15,000  
  To Audit Fees A/c   15,000 
 (Correction of wrong debit to Audit Fees A/c 
for college fees of proprietor’s son) 
   
  
572
(vi) Anita             Dr.   4,500  
  To Kanika    4,500 
 (Correction of wrong credit to Anita instead of 
Kanika) 
   
(vii) Returns Inwards / Sales Return A/c     Dr.  8,900  
  To Customer/Debtors A/c   8,900 
 (Entry of goods returned by customer and 
taken in inventory omitted from records) 
   
(viii) Furniture A/c         Dr.   7,500  
  To Wages A/c   7,500 
 (Wages paid to workmen for office furniture 
wrongly charged to wages a/c now rectified) 
   
(ix) Salaries A/c         Dr.   18,000  
  To Clerk’s (Personal) A/c   18,000 
 (Correction of wrong debit to Clerk’s personal 
A/c for salaries paid) 
   
(x) Purchases A/c        Dr.   20,000  
 Sales A/c          Dr.   20,000  
  To Raghav A/c 
(Correction of wrong entry in the sales Book 
for purchases of goods from Raghav) 
  40,000 
(b)       S Chand & Associates 
    Dr.       Machinery Account      Cr. 
Date Particulars Amount 
(`) 
Date Particulars Amount 
(`) 
1.1.2021 To Bank A/c 3,00,000 31.12.2021 By Balance c/d 3,00,000 
  3,00,000   3,00,000 
1.1.2022 To Balance 
b/d 
3,00,000    
1.7.2022 To Bank A/c 4,50,000 31.12.2022 By Balance c/d 7,50,000 
  7,50,000   7,50,000 
1.1.2023 To Balance 
b/d 
7,50,000 31.12.2023 By Machinery 
Disposal A/c 
3,00,000 
   31.12.2023 By Balance c/d 4,50,000 
  7,50,000   7,50,000 
1.1.2024 To Balance 
b/d 
4,50,000    
 
  
573
Dr.     Provision for Depreciation Account    Cr. 
Date  Particulars  Amount 
(`) 
Date Particulars Amount 
(`) 
31.12.2021 To Balance c/d 45,000 31.12.2021 By Depreciation 
A/c 
45,000 
  45,000   45,000 
31.12.2022 To Balance c/d 1,17,000 1.1.2022 By Balance b/d 45,000 
   31.12.2022 By Depreciation 
A/c 
(` 38,250 + 
` 33,750) 
72,000 
  1,17,000   1,17,000 
31.12.2023 To Machinery 
Disposal A/c 
 
1,15,762 1.1.2023 By Balance b/d 1,17,000 
31.12.2023 To Balance c/d 96,188 31.12.2023 
31.12.2023 
By Depreciation 
A/c (WN 1) 
By Depreciation on 
machinery sold 
(WN 2) 
62,438 
 
32,512 
  2,11,950   2,11,950 
   1.1.2024 By Balance b/d 96,188 
Dr.      Machinery Disposal Account           Cr.  
Date Particulars Amount 
(`) 
Date Particulars Amount 
(`) 
31.12.2023 To Machinery 
A/c 
3,00,000 31.12.2023 By Provision for 
Depreciation A/c 
1,15,762 
   31.12.2023 By Bank A/c 1,50,000 
   31.12.2023 By Profit & Loss 
A/c (Loss on 
Sale) 
34,238 
  3,00,000   3,00,000 
 Working Notes: 
1. Depreciation for the machine purchased on 1.7.2022. 
For the year 2022 (Used for 6 months) = ` 4,50,000 x 15% x 
12
6
  
= ` 33,750 
For the year 2023 (Used for full year) = ` 4,16,250 x15 % = ` 62,438 
2. Depreciation for the machine purchased on 1.1.2021. 
 Depreciation for the year 2021 = ` 3,00,000 x 15% = ` 45,000 
 Depreciation for the year 2022  = `2,55,000 x15% = ` 38,250 
 Depreciation for the year 2023 = ` 2,16,750 x15% =` 32,512 
  
574
3. (a) (i)      Realisation Account 
Particulars Amount 
(`) 
Particulars Amount 
(`) 
To  Land and building 
To  Furniture and fixtures 
To  Stock 
To  Debtors 
2,46,000 
   65,000 
1,00,000 
   72,500  
By  Sundry creditors 
By  Mortgage loan 
By  Cash account -  
 Land and building 
   36,000 
1,10,000 
 
2,30,000 
To  Cash A/c (expenses on 
dissolution) 
To  Cash A/c (creditors   
` 36,000 + ` 18,000) 
To  Cash A/c (Mortgage 
loan) 
7,800 
 
   54,000 
 
1,10,000        
 Furniture & fixtures 
 Stock 
 Debtors 
By  Partners’ capital 
 accounts (Loss 
4:3:2:1) 
 P =     40,120 
   42,000 
   72,000 
   65,000 
   Q =    30,090 
 R =    20,060 
 S =    10,030 
 
1,00,300 
 
 6,55,300   6,55,300 
Partners’ Capital Accounts 
Particulars P Q R S Particulars P Q R S 
 ` ` ` `  ` ` ` ` 
To Balance b/d       -       - 1,000 6,000 By Balance b/d 2,16,000 1,44,000   
To Realization 
A/c  (Loss) 
 
40,120 
 
 30,090 
 
20,060 
 
10,030       
By Cash A/c 
     (realization 
     loss)  
 
 
  40,120 
 
 
 30,090 
 
 
   - 
 
 
10,030 
To R’s Capital 
A/c 
(Deficiency) 
  
12,636 
 
   8,424 
 
      - 
 
      - 
By P’s Capital 
     A/c  
By Q’s Capital 
A/c 
   
12,636 
  8,424 
 
To Cash A/c 2,03,364 1,35,576       -       - By Cash A/c      6,000 
 2,56,120 1,74,090 21,060 16,030  2,56,120 1,74,090 21,060 16,030 
 Note: P, Q and S brought cash to make good, their share of the loss on 
realization.  However, in actual practice they will not be bringing any cash, 
only a notional entry will be made. 
Cash Account 
Particulars Amount 
(`) 
Particulars Amount 
(`) 
To  Balance b/d 
To  Realization A/c: 
 Land and building 
 Furniture & fixtures 
   15,500 
 
2,30,000 
42,000 
By  Realization A/c: 
 Expenses on 
dissolution 
 Creditors (36,000 + 
18,000) 
 Mortgage loan  
 
     7,800 
   
 54,000 
1,10,000  
  Stock    72,000 By  P’s capital A/c 2,03,364 
575