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

 Page 1


MODEL TEST PAPER 7 
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) A claim that an enterprise is pursuing through legal process, where
the outcome is uncertain, is a contingent liability.
(ii) If the effect of errors committed cancel out, the errors will be called
compensating errors and the trial balance will disagree.
(iii) Stock at the end, if appears in the trial balance, is taken only to the
Balance Sheet.
(iv) Re-issue of forfeited shares is allotment of shares but not a sale.
(v) Both revenue and capital nature transactions are recorded in the
Receipts and Payments Account.
(vi) Since company has existence independent of its members, it
continues to be in existence despite the death, insolvency or
change of members. (6 Statements x 2 Marks = 12 Marks)
(b) Distinguish between Money Measurement concept and Matching
concept. (4 Marks) 
(c) The following are the details of the spare parts of a Chemical Mill:
1-1-2024  Opening Inventory Nil 
1-1-2024 Purchases 100 units @ ` 300 per unit 
15-1-2024  Issued for consumption 50 units 
1-2-2024  Purchases 200 units @ ` 400 per unit 
15-2-2024  Issued for consumption 100 units 
20-2-2024  Issued for consumption 100 units 
Find out the value of Inventory as on 31.3.2024, if the company follows 
Weighted Average Method. (4 Marks) 
(12+4+4 =20 Marks) 
48
Page 2


MODEL TEST PAPER 7 
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) A claim that an enterprise is pursuing through legal process, where
the outcome is uncertain, is a contingent liability.
(ii) If the effect of errors committed cancel out, the errors will be called
compensating errors and the trial balance will disagree.
(iii) Stock at the end, if appears in the trial balance, is taken only to the
Balance Sheet.
(iv) Re-issue of forfeited shares is allotment of shares but not a sale.
(v) Both revenue and capital nature transactions are recorded in the
Receipts and Payments Account.
(vi) Since company has existence independent of its members, it
continues to be in existence despite the death, insolvency or
change of members. (6 Statements x 2 Marks = 12 Marks)
(b) Distinguish between Money Measurement concept and Matching
concept. (4 Marks) 
(c) The following are the details of the spare parts of a Chemical Mill:
1-1-2024  Opening Inventory Nil 
1-1-2024 Purchases 100 units @ ` 300 per unit 
15-1-2024  Issued for consumption 50 units 
1-2-2024  Purchases 200 units @ ` 400 per unit 
15-2-2024  Issued for consumption 100 units 
20-2-2024  Issued for consumption 100 units 
Find out the value of Inventory as on 31.3.2024, if the company follows 
Weighted Average Method. (4 Marks) 
(12+4+4 =20 Marks) 
48
2. (a) Before preparation of the trial balance, the following errors were found
in the books of Saraswat & Sons. Give the necessary entries to correct 
them. 
(i) Furniture purchased for office use amounting to ` 20,000 has been
entered in the purchase day book.
(ii) An amount of ` 3,000 due from Satyam, which had been written off
as bad debts in the previous year, recovered in the current year,
and had been posted to the personal Account of Satyam.
(iii) Minor Repairs made to the building amounting to ` 18,500 were
debited to the Building Account
(iv) Goods purchased from Ram Singh amounting to ` 18,000 have
remained unrecorded so far.
(v) College fees of proprietor's son, ` 15,000 debited to the Audit fees
Account.
(vi) Receipt of ` 4,500 from Kanika credited to the Anita.
(vii) Goods amounting to ` 8,900 had been returned by a customer and
were taken into inventory, but no entry was made in the books.
(viii) ` 7,500 paid for wages to workmen for making office furniture had
been charged to wages account.
(ix) Salary paid to a clerk ` 18,000 has been debited to his personal
account.
(x) A purchase of goods from Raghav amounting to ` 20,000 has been
wrongly entered through the sales book.   (10 Marks)
(b) S Chand & Associates purchased a machine for ` 3,00,000 on 1.1.2021
Another machine costing `4,50,000 was purchased on 1.7.2022. On
31.12.2023 the machine purchased on 1.1.2021 was sold for `1,50,000.
The company provides depreciation at 15% on Written Down Value
Method. The company closes its accounts on 31st December every year.
Prepare – (i) Machinery Account, (ii) Machinery Disposal Account and
(iii) Provision for Depreciation Account. (10 Marks) 
(10 +10 = 20 Marks) 
3. (a)  P, Q, R and S had been carrying on business in partnership sharing
profits & losses in the ratio of 4:3:2:1.  They decided to dissolve the 
partnership on the basis of following Balance Sheet as on 30th April, 
2024: 
Liabilities Amount 
(`) 
Assets Amount (`) 
Capital Accounts Land & building 2,46,000 
P 2,16,000 Furniture & fixtures 65,000 
Q 1,44,000 3,60,000 Stock 1,00,000 
Debtors 72,500 
49
Page 3


MODEL TEST PAPER 7 
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) A claim that an enterprise is pursuing through legal process, where
the outcome is uncertain, is a contingent liability.
(ii) If the effect of errors committed cancel out, the errors will be called
compensating errors and the trial balance will disagree.
(iii) Stock at the end, if appears in the trial balance, is taken only to the
Balance Sheet.
(iv) Re-issue of forfeited shares is allotment of shares but not a sale.
(v) Both revenue and capital nature transactions are recorded in the
Receipts and Payments Account.
(vi) Since company has existence independent of its members, it
continues to be in existence despite the death, insolvency or
change of members. (6 Statements x 2 Marks = 12 Marks)
(b) Distinguish between Money Measurement concept and Matching
concept. (4 Marks) 
(c) The following are the details of the spare parts of a Chemical Mill:
1-1-2024  Opening Inventory Nil 
1-1-2024 Purchases 100 units @ ` 300 per unit 
15-1-2024  Issued for consumption 50 units 
1-2-2024  Purchases 200 units @ ` 400 per unit 
15-2-2024  Issued for consumption 100 units 
20-2-2024  Issued for consumption 100 units 
Find out the value of Inventory as on 31.3.2024, if the company follows 
Weighted Average Method. (4 Marks) 
(12+4+4 =20 Marks) 
48
2. (a) Before preparation of the trial balance, the following errors were found
in the books of Saraswat & Sons. Give the necessary entries to correct 
them. 
(i) Furniture purchased for office use amounting to ` 20,000 has been
entered in the purchase day book.
(ii) An amount of ` 3,000 due from Satyam, which had been written off
as bad debts in the previous year, recovered in the current year,
and had been posted to the personal Account of Satyam.
(iii) Minor Repairs made to the building amounting to ` 18,500 were
debited to the Building Account
(iv) Goods purchased from Ram Singh amounting to ` 18,000 have
remained unrecorded so far.
(v) College fees of proprietor's son, ` 15,000 debited to the Audit fees
Account.
(vi) Receipt of ` 4,500 from Kanika credited to the Anita.
(vii) Goods amounting to ` 8,900 had been returned by a customer and
were taken into inventory, but no entry was made in the books.
(viii) ` 7,500 paid for wages to workmen for making office furniture had
been charged to wages account.
(ix) Salary paid to a clerk ` 18,000 has been debited to his personal
account.
(x) A purchase of goods from Raghav amounting to ` 20,000 has been
wrongly entered through the sales book.   (10 Marks)
(b) S Chand & Associates purchased a machine for ` 3,00,000 on 1.1.2021
Another machine costing `4,50,000 was purchased on 1.7.2022. On
31.12.2023 the machine purchased on 1.1.2021 was sold for `1,50,000.
The company provides depreciation at 15% on Written Down Value
Method. The company closes its accounts on 31st December every year.
Prepare – (i) Machinery Account, (ii) Machinery Disposal Account and
(iii) Provision for Depreciation Account. (10 Marks) 
(10 +10 = 20 Marks) 
3. (a)  P, Q, R and S had been carrying on business in partnership sharing
profits & losses in the ratio of 4:3:2:1.  They decided to dissolve the 
partnership on the basis of following Balance Sheet as on 30th April, 
2024: 
Liabilities Amount 
(`) 
Assets Amount (`) 
Capital Accounts Land & building 2,46,000 
P 2,16,000 Furniture & fixtures 65,000 
Q 1,44,000 3,60,000 Stock 1,00,000 
Debtors 72,500 
49
Cash in hand 15,500 
Sundry creditors 36,000 Capital overdrawn: 
Mortgage loan 1,10,000 R 1,000 
S 6,000 7,000 
5,06,000 5,06,000 
(i) The assets were realized as under: `
Land & building 2,30,000 
Furniture & fixtures  42,000 
Stock  72,000 
Debtors  65,000 
(ii) Expenses of dissolution amounted to ` 7,800.
(iii) Further creditors of ` 18,000 had to be met.
(iv) R became insolvent and nothing was realized from his private
estate.
Applying the principles laid down in Garner Vs. Murray, prepare the 
Realisation Account, Partners’ Capital Accounts and Cash Account.  
(12 Marks) 
(b) Mr. Dilip furnishes the following trial balance and some other information:
Trial Balance as on 31st March, 2024 
Particulars ` `
Capital 19,50,000 
Purchases and Sales 12,90,000 29,10,000 
Opening Inventory 3,30,000 
Freights Inward  1,20,000 
Salaries 6,30,000 
Administration Expenses 4,50,000 
Furniture 10,50,000 
Trade receivables and Trade payables 6,30,000 5,70,000 
Returns 60,000 36,000 
Discount allowed and Received 57,000 27,000 
Bad Debts 15,000 
Investments in Government Securities 3,00,000 
Cash in Hand and Cash at Bank 
Input CGST 
Input SGST 
Output CGST 
Output SGST 
5,67,000 
30,000 
30,000 
      24,000 
     24,000 
50
Page 4


MODEL TEST PAPER 7 
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) A claim that an enterprise is pursuing through legal process, where
the outcome is uncertain, is a contingent liability.
(ii) If the effect of errors committed cancel out, the errors will be called
compensating errors and the trial balance will disagree.
(iii) Stock at the end, if appears in the trial balance, is taken only to the
Balance Sheet.
(iv) Re-issue of forfeited shares is allotment of shares but not a sale.
(v) Both revenue and capital nature transactions are recorded in the
Receipts and Payments Account.
(vi) Since company has existence independent of its members, it
continues to be in existence despite the death, insolvency or
change of members. (6 Statements x 2 Marks = 12 Marks)
(b) Distinguish between Money Measurement concept and Matching
concept. (4 Marks) 
(c) The following are the details of the spare parts of a Chemical Mill:
1-1-2024  Opening Inventory Nil 
1-1-2024 Purchases 100 units @ ` 300 per unit 
15-1-2024  Issued for consumption 50 units 
1-2-2024  Purchases 200 units @ ` 400 per unit 
15-2-2024  Issued for consumption 100 units 
20-2-2024  Issued for consumption 100 units 
Find out the value of Inventory as on 31.3.2024, if the company follows 
Weighted Average Method. (4 Marks) 
(12+4+4 =20 Marks) 
48
2. (a) Before preparation of the trial balance, the following errors were found
in the books of Saraswat & Sons. Give the necessary entries to correct 
them. 
(i) Furniture purchased for office use amounting to ` 20,000 has been
entered in the purchase day book.
(ii) An amount of ` 3,000 due from Satyam, which had been written off
as bad debts in the previous year, recovered in the current year,
and had been posted to the personal Account of Satyam.
(iii) Minor Repairs made to the building amounting to ` 18,500 were
debited to the Building Account
(iv) Goods purchased from Ram Singh amounting to ` 18,000 have
remained unrecorded so far.
(v) College fees of proprietor's son, ` 15,000 debited to the Audit fees
Account.
(vi) Receipt of ` 4,500 from Kanika credited to the Anita.
(vii) Goods amounting to ` 8,900 had been returned by a customer and
were taken into inventory, but no entry was made in the books.
(viii) ` 7,500 paid for wages to workmen for making office furniture had
been charged to wages account.
(ix) Salary paid to a clerk ` 18,000 has been debited to his personal
account.
(x) A purchase of goods from Raghav amounting to ` 20,000 has been
wrongly entered through the sales book.   (10 Marks)
(b) S Chand & Associates purchased a machine for ` 3,00,000 on 1.1.2021
Another machine costing `4,50,000 was purchased on 1.7.2022. On
31.12.2023 the machine purchased on 1.1.2021 was sold for `1,50,000.
The company provides depreciation at 15% on Written Down Value
Method. The company closes its accounts on 31st December every year.
Prepare – (i) Machinery Account, (ii) Machinery Disposal Account and
(iii) Provision for Depreciation Account. (10 Marks) 
(10 +10 = 20 Marks) 
3. (a)  P, Q, R and S had been carrying on business in partnership sharing
profits & losses in the ratio of 4:3:2:1.  They decided to dissolve the 
partnership on the basis of following Balance Sheet as on 30th April, 
2024: 
Liabilities Amount 
(`) 
Assets Amount (`) 
Capital Accounts Land & building 2,46,000 
P 2,16,000 Furniture & fixtures 65,000 
Q 1,44,000 3,60,000 Stock 1,00,000 
Debtors 72,500 
49
Cash in hand 15,500 
Sundry creditors 36,000 Capital overdrawn: 
Mortgage loan 1,10,000 R 1,000 
S 6,000 7,000 
5,06,000 5,06,000 
(i) The assets were realized as under: `
Land & building 2,30,000 
Furniture & fixtures  42,000 
Stock  72,000 
Debtors  65,000 
(ii) Expenses of dissolution amounted to ` 7,800.
(iii) Further creditors of ` 18,000 had to be met.
(iv) R became insolvent and nothing was realized from his private
estate.
Applying the principles laid down in Garner Vs. Murray, prepare the 
Realisation Account, Partners’ Capital Accounts and Cash Account.  
(12 Marks) 
(b) Mr. Dilip furnishes the following trial balance and some other information:
Trial Balance as on 31st March, 2024 
Particulars ` `
Capital 19,50,000 
Purchases and Sales 12,90,000 29,10,000 
Opening Inventory 3,30,000 
Freights Inward  1,20,000 
Salaries 6,30,000 
Administration Expenses 4,50,000 
Furniture 10,50,000 
Trade receivables and Trade payables 6,30,000 5,70,000 
Returns 60,000 36,000 
Discount allowed and Received 57,000 27,000 
Bad Debts 15,000 
Investments in Government Securities 3,00,000 
Cash in Hand and Cash at Bank 
Input CGST 
Input SGST 
Output CGST 
Output SGST 
5,67,000 
30,000 
30,000 
      24,000 
     24,000 
50
Output IGST       18,000 
55,59,000 55,59,000 
Additional information 
(i) Inventory as on 31
st
 march,2024 was ` 5,40,000.
(ii) Furniture is depreciated at 15% per annum.
Prepare Trading Account, Profit and Loss Account and Balance Sheet 
as on 31
st
 March, 2024 of Mr. Dilip. (8 Marks) 
(12+8 = 20 Marks) 
4 (a) New State Society showed the following position on 31
st
 March, 2023: 
Balance Sheet as on 31
st
 March, 2023 
Liabilities ` Assets `
Capital fund 15,86,000 Electrical fittings 3,00,000 
Expenses payable 14,000 Furniture 1,00,000 
Books 8,00,000 
Investment in 
securities 
3,00,000 
Cash at bank 50,000 
Cash in hand    50,000 
16,00,000 16,00,000 
The receipts and payment account for the year ended on 31
st
 March, 
2024 is given below: 
` `
To Balance b/d By Electric charges 14,400 
Cash at bank     50,000 By Postage and stationary 10,000 
Cash in hand     50,000 1,00,000 By Telephone charges 10,000 
To Entrance fee 60,000 By Books purchased 1,20,000 
To Membership subscription 
4,00,000 
By Outstanding expenses 
paid 
14,000 
To Sale proceeds of old 
papers 
3,000 
By Rent 
1,76,000 
To Hire of lecture hall 
40,000 
By Investment in 
securities 
80,000 
To Interest on securities 16,000 By Salaries 1,32,000 
By Balance c/d 
Cash at bank 40,000 
Cash in hand   22,600 
6,19,000 6,19,000 
51
Page 5


MODEL TEST PAPER 7 
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) A claim that an enterprise is pursuing through legal process, where
the outcome is uncertain, is a contingent liability.
(ii) If the effect of errors committed cancel out, the errors will be called
compensating errors and the trial balance will disagree.
(iii) Stock at the end, if appears in the trial balance, is taken only to the
Balance Sheet.
(iv) Re-issue of forfeited shares is allotment of shares but not a sale.
(v) Both revenue and capital nature transactions are recorded in the
Receipts and Payments Account.
(vi) Since company has existence independent of its members, it
continues to be in existence despite the death, insolvency or
change of members. (6 Statements x 2 Marks = 12 Marks)
(b) Distinguish between Money Measurement concept and Matching
concept. (4 Marks) 
(c) The following are the details of the spare parts of a Chemical Mill:
1-1-2024  Opening Inventory Nil 
1-1-2024 Purchases 100 units @ ` 300 per unit 
15-1-2024  Issued for consumption 50 units 
1-2-2024  Purchases 200 units @ ` 400 per unit 
15-2-2024  Issued for consumption 100 units 
20-2-2024  Issued for consumption 100 units 
Find out the value of Inventory as on 31.3.2024, if the company follows 
Weighted Average Method. (4 Marks) 
(12+4+4 =20 Marks) 
48
2. (a) Before preparation of the trial balance, the following errors were found
in the books of Saraswat & Sons. Give the necessary entries to correct 
them. 
(i) Furniture purchased for office use amounting to ` 20,000 has been
entered in the purchase day book.
(ii) An amount of ` 3,000 due from Satyam, which had been written off
as bad debts in the previous year, recovered in the current year,
and had been posted to the personal Account of Satyam.
(iii) Minor Repairs made to the building amounting to ` 18,500 were
debited to the Building Account
(iv) Goods purchased from Ram Singh amounting to ` 18,000 have
remained unrecorded so far.
(v) College fees of proprietor's son, ` 15,000 debited to the Audit fees
Account.
(vi) Receipt of ` 4,500 from Kanika credited to the Anita.
(vii) Goods amounting to ` 8,900 had been returned by a customer and
were taken into inventory, but no entry was made in the books.
(viii) ` 7,500 paid for wages to workmen for making office furniture had
been charged to wages account.
(ix) Salary paid to a clerk ` 18,000 has been debited to his personal
account.
(x) A purchase of goods from Raghav amounting to ` 20,000 has been
wrongly entered through the sales book.   (10 Marks)
(b) S Chand & Associates purchased a machine for ` 3,00,000 on 1.1.2021
Another machine costing `4,50,000 was purchased on 1.7.2022. On
31.12.2023 the machine purchased on 1.1.2021 was sold for `1,50,000.
The company provides depreciation at 15% on Written Down Value
Method. The company closes its accounts on 31st December every year.
Prepare – (i) Machinery Account, (ii) Machinery Disposal Account and
(iii) Provision for Depreciation Account. (10 Marks) 
(10 +10 = 20 Marks) 
3. (a)  P, Q, R and S had been carrying on business in partnership sharing
profits & losses in the ratio of 4:3:2:1.  They decided to dissolve the 
partnership on the basis of following Balance Sheet as on 30th April, 
2024: 
Liabilities Amount 
(`) 
Assets Amount (`) 
Capital Accounts Land & building 2,46,000 
P 2,16,000 Furniture & fixtures 65,000 
Q 1,44,000 3,60,000 Stock 1,00,000 
Debtors 72,500 
49
Cash in hand 15,500 
Sundry creditors 36,000 Capital overdrawn: 
Mortgage loan 1,10,000 R 1,000 
S 6,000 7,000 
5,06,000 5,06,000 
(i) The assets were realized as under: `
Land & building 2,30,000 
Furniture & fixtures  42,000 
Stock  72,000 
Debtors  65,000 
(ii) Expenses of dissolution amounted to ` 7,800.
(iii) Further creditors of ` 18,000 had to be met.
(iv) R became insolvent and nothing was realized from his private
estate.
Applying the principles laid down in Garner Vs. Murray, prepare the 
Realisation Account, Partners’ Capital Accounts and Cash Account.  
(12 Marks) 
(b) Mr. Dilip furnishes the following trial balance and some other information:
Trial Balance as on 31st March, 2024 
Particulars ` `
Capital 19,50,000 
Purchases and Sales 12,90,000 29,10,000 
Opening Inventory 3,30,000 
Freights Inward  1,20,000 
Salaries 6,30,000 
Administration Expenses 4,50,000 
Furniture 10,50,000 
Trade receivables and Trade payables 6,30,000 5,70,000 
Returns 60,000 36,000 
Discount allowed and Received 57,000 27,000 
Bad Debts 15,000 
Investments in Government Securities 3,00,000 
Cash in Hand and Cash at Bank 
Input CGST 
Input SGST 
Output CGST 
Output SGST 
5,67,000 
30,000 
30,000 
      24,000 
     24,000 
50
Output IGST       18,000 
55,59,000 55,59,000 
Additional information 
(i) Inventory as on 31
st
 march,2024 was ` 5,40,000.
(ii) Furniture is depreciated at 15% per annum.
Prepare Trading Account, Profit and Loss Account and Balance Sheet 
as on 31
st
 March, 2024 of Mr. Dilip. (8 Marks) 
(12+8 = 20 Marks) 
4 (a) New State Society showed the following position on 31
st
 March, 2023: 
Balance Sheet as on 31
st
 March, 2023 
Liabilities ` Assets `
Capital fund 15,86,000 Electrical fittings 3,00,000 
Expenses payable 14,000 Furniture 1,00,000 
Books 8,00,000 
Investment in 
securities 
3,00,000 
Cash at bank 50,000 
Cash in hand    50,000 
16,00,000 16,00,000 
The receipts and payment account for the year ended on 31
st
 March, 
2024 is given below: 
` `
To Balance b/d By Electric charges 14,400 
Cash at bank     50,000 By Postage and stationary 10,000 
Cash in hand     50,000 1,00,000 By Telephone charges 10,000 
To Entrance fee 60,000 By Books purchased 1,20,000 
To Membership subscription 
4,00,000 
By Outstanding expenses 
paid 
14,000 
To Sale proceeds of old 
papers 
3,000 
By Rent 
1,76,000 
To Hire of lecture hall 
40,000 
By Investment in 
securities 
80,000 
To Interest on securities 16,000 By Salaries 1,32,000 
By Balance c/d 
Cash at bank 40,000 
Cash in hand   22,600 
6,19,000 6,19,000 
51
You are required to prepare Income and Expenditure account for the 
year ended 31
st
 March, 2024 after making the following adjustments: 
Membership subscription included ` 20,000 received in advance. 
Provide for outstanding rent ` 8,000 and salaries ` 6,000. 
Books to be depreciated @ 10% per annum including additions. The 
additions to the books were made on 01.04.2023.  Electrical fittings and 
furniture are also to be depreciated @ 10% per annum. 
60% of the entrance fees is to be capitalized. 
Interest on securities is to be calculated @ 15% p.a. including purchases 
made on 1.10.2023 for ` 80,000.  (8 Marks) 
(b) The following is the Balance Sheet of M/s. Krishna 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 
Lalit 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.
(c) ` 6,000 is to be paid to the executors of the dead partner on 5th
April, 2024.
(d) After death of Sumit, Amit and Lalit shares the profit equally.
You are required to prepare:
(i) Journal Entry for Goodwill adjustment.
(ii) Revaluation Account, Capital Accounts of the partners and Balance
Sheet after the death of Sumit.  (12 Marks)
(8 +12 = 20 Marks)
52