Accounting Model Test Paper - 9 (Questions) | Mock Tests & Past Year Papers for CA Foundation PDF Download

 Page 1


MODEL TEST PAPER 9 
FOUNDATION COURSE 
PAPER – 1: ACCOUNTING 
Question No. 1 is compulsory. 
Attempt 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 Ture or False: 
(i) If Closing Stock appears in the Trial Balance then it does not enter 
in Trading Account. It is shown only in the Balance Sheet. 
(ii) If the amount is posted in the wrong account or it is written on the 
wrong side of the account, it is called error of principle.  
(iii) Accounting Standards can override the statute.  
(iv) Promissory Note is different from Bill of Exchange because the 
amount is paid by maker in case of former and by the acceptor in 
the later.  
(v) All errors are rectified by means of journal entries.  
(vi) Revaluation Account is also known as Profit and Loss Adjustment 
Account.  (6 x 2 = 12 Marks) 
 (b) (i)  Define accounting policy. What are the conditions under which a 
company can change its accounting policy? 
(ii)  Explain the following: 
(1) Cash Basis of Accounting  
(2) Going Concern concept  (2 x 2 = 4 Marks) 
(c)  Pass journal entries for the following transactions in the books of Mr. 
Kapil: 
(i)  Purchased goods from Sonu for ` 1,50,000 at a trade discount of 
10% plus CGST and SGST@ 6% each.  
(ii)  Sold goods to Mohit for ` 50,000 and charged CGST and SGST @ 
5% each. Out of the amount due 40% is received by cheque 
immediately. 
(iii)  Goods costing ` 25,000 withdrawn for personal use. Such Goods 
were purchased by paying CGST and SGST @ 6% each. 
(iv)  Machinery purchased from M/s Bright Industries for ` 2,00,000 plus 
CGST and SGST @ 9% each. Paid ` 1,00,000 immediately by 
cheque and balance to be paid after two months. 
 (4 x 1 = 4 Marks)  
64
Page 2


MODEL TEST PAPER 9 
FOUNDATION COURSE 
PAPER – 1: ACCOUNTING 
Question No. 1 is compulsory. 
Attempt 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 Ture or False: 
(i) If Closing Stock appears in the Trial Balance then it does not enter 
in Trading Account. It is shown only in the Balance Sheet. 
(ii) If the amount is posted in the wrong account or it is written on the 
wrong side of the account, it is called error of principle.  
(iii) Accounting Standards can override the statute.  
(iv) Promissory Note is different from Bill of Exchange because the 
amount is paid by maker in case of former and by the acceptor in 
the later.  
(v) All errors are rectified by means of journal entries.  
(vi) Revaluation Account is also known as Profit and Loss Adjustment 
Account.  (6 x 2 = 12 Marks) 
 (b) (i)  Define accounting policy. What are the conditions under which a 
company can change its accounting policy? 
(ii)  Explain the following: 
(1) Cash Basis of Accounting  
(2) Going Concern concept  (2 x 2 = 4 Marks) 
(c)  Pass journal entries for the following transactions in the books of Mr. 
Kapil: 
(i)  Purchased goods from Sonu for ` 1,50,000 at a trade discount of 
10% plus CGST and SGST@ 6% each.  
(ii)  Sold goods to Mohit for ` 50,000 and charged CGST and SGST @ 
5% each. Out of the amount due 40% is received by cheque 
immediately. 
(iii)  Goods costing ` 25,000 withdrawn for personal use. Such Goods 
were purchased by paying CGST and SGST @ 6% each. 
(iv)  Machinery purchased from M/s Bright Industries for ` 2,00,000 plus 
CGST and SGST @ 9% each. Paid ` 1,00,000 immediately by 
cheque and balance to be paid after two months. 
 (4 x 1 = 4 Marks)  
64
2. (a) The Trial Balance of Mr. Sarvesh Kumar as on 31
st
 March,2024 did not tally 
and the difference was posted to Suspense Account. On a scrutiny of the 
books the following errors were detected: 
(i) The total of Sales Returns Book for January 2024 has been casted 
short by ` 1,000.  
(ii) Freight paid for installation of a Machine ` 6,500 was posted to the 
Freight Account as ` 5,600. 
(iii) Goods of the value of ` 2,500 returned by a customer were entered 
in the Sales day Book and posted therefrom to the credit of his 
account.  
(iv) ` 18,000 paid for purchase of old Motorcycle for personal use of  
Mr. Sarvesh Kumar was debited to conveyance account.  
(v) A purchase of ` 6,700 had been posted to creditor’s account as  
` 6,000. 
(vi) Receipt of cash ` 5,000 from Mr. Avinash was posted to the debit 
of his account.  
(vii) A cheque for ` 2,500 received form Mr. Alok had been dishonoured 
and was posted to the debit of Mr. Ashok.  
(viii) Sale of ` 8,500 to Mr. Deepak was recorded in the sales book 
correctly but while posting in ledger credited to his account.  
(ix) The total of “Discount Allowed” column in the cash for the month of 
December 2023 amounting to ` 3,800 was not posted. 
(x) Sale of old office table for ` 2,200 treated as sale of goods. 
 You are required to pass necessary journal entries with narrations to 
rectify the above errors.  (12 Marks) 
(b) On 1
st
 April,2022, LMP Co. which depreciates its machinery @10% p.a. 
on diminishing balance method, had ` 9,72,000 to the debit of Machinery 
Account. On 1
st
 October, 2022, part of machinery purchased on 1
st
 April, 
2020 for ` 80,000 was sold for ` 45,000. 
 Also, a new machinery at a cost of ` 1,50,000 was purchased on 1
st
 
October, 2022 and installed on the same date and installation charges 
being ` 8,000. 
 The company changed the method of depreciation from diminishing 
balance method to straight line method on 1
st
 April, 2022. The rate of 
depreciation remains the same. 
 Show the Machinery Account and ascertain the amount chargeable to 
Profit and Loss Account as depreciation in the year 2022-23.  
  (8 Marks) 
  
65
Page 3


MODEL TEST PAPER 9 
FOUNDATION COURSE 
PAPER – 1: ACCOUNTING 
Question No. 1 is compulsory. 
Attempt 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 Ture or False: 
(i) If Closing Stock appears in the Trial Balance then it does not enter 
in Trading Account. It is shown only in the Balance Sheet. 
(ii) If the amount is posted in the wrong account or it is written on the 
wrong side of the account, it is called error of principle.  
(iii) Accounting Standards can override the statute.  
(iv) Promissory Note is different from Bill of Exchange because the 
amount is paid by maker in case of former and by the acceptor in 
the later.  
(v) All errors are rectified by means of journal entries.  
(vi) Revaluation Account is also known as Profit and Loss Adjustment 
Account.  (6 x 2 = 12 Marks) 
 (b) (i)  Define accounting policy. What are the conditions under which a 
company can change its accounting policy? 
(ii)  Explain the following: 
(1) Cash Basis of Accounting  
(2) Going Concern concept  (2 x 2 = 4 Marks) 
(c)  Pass journal entries for the following transactions in the books of Mr. 
Kapil: 
(i)  Purchased goods from Sonu for ` 1,50,000 at a trade discount of 
10% plus CGST and SGST@ 6% each.  
(ii)  Sold goods to Mohit for ` 50,000 and charged CGST and SGST @ 
5% each. Out of the amount due 40% is received by cheque 
immediately. 
(iii)  Goods costing ` 25,000 withdrawn for personal use. Such Goods 
were purchased by paying CGST and SGST @ 6% each. 
(iv)  Machinery purchased from M/s Bright Industries for ` 2,00,000 plus 
CGST and SGST @ 9% each. Paid ` 1,00,000 immediately by 
cheque and balance to be paid after two months. 
 (4 x 1 = 4 Marks)  
64
2. (a) The Trial Balance of Mr. Sarvesh Kumar as on 31
st
 March,2024 did not tally 
and the difference was posted to Suspense Account. On a scrutiny of the 
books the following errors were detected: 
(i) The total of Sales Returns Book for January 2024 has been casted 
short by ` 1,000.  
(ii) Freight paid for installation of a Machine ` 6,500 was posted to the 
Freight Account as ` 5,600. 
(iii) Goods of the value of ` 2,500 returned by a customer were entered 
in the Sales day Book and posted therefrom to the credit of his 
account.  
(iv) ` 18,000 paid for purchase of old Motorcycle for personal use of  
Mr. Sarvesh Kumar was debited to conveyance account.  
(v) A purchase of ` 6,700 had been posted to creditor’s account as  
` 6,000. 
(vi) Receipt of cash ` 5,000 from Mr. Avinash was posted to the debit 
of his account.  
(vii) A cheque for ` 2,500 received form Mr. Alok had been dishonoured 
and was posted to the debit of Mr. Ashok.  
(viii) Sale of ` 8,500 to Mr. Deepak was recorded in the sales book 
correctly but while posting in ledger credited to his account.  
(ix) The total of “Discount Allowed” column in the cash for the month of 
December 2023 amounting to ` 3,800 was not posted. 
(x) Sale of old office table for ` 2,200 treated as sale of goods. 
 You are required to pass necessary journal entries with narrations to 
rectify the above errors.  (12 Marks) 
(b) On 1
st
 April,2022, LMP Co. which depreciates its machinery @10% p.a. 
on diminishing balance method, had ` 9,72,000 to the debit of Machinery 
Account. On 1
st
 October, 2022, part of machinery purchased on 1
st
 April, 
2020 for ` 80,000 was sold for ` 45,000. 
 Also, a new machinery at a cost of ` 1,50,000 was purchased on 1
st
 
October, 2022 and installed on the same date and installation charges 
being ` 8,000. 
 The company changed the method of depreciation from diminishing 
balance method to straight line method on 1
st
 April, 2022. The rate of 
depreciation remains the same. 
 Show the Machinery Account and ascertain the amount chargeable to 
Profit and Loss Account as depreciation in the year 2022-23.  
  (8 Marks) 
  
65
3. (a) The Receipts and Payments Account of Vandana Sports Club for the year 
ended 31
st
 March, 2024 are as follows: 
Receipts and Payments Account 
Receipts  Amount 
(`) 
Payment Amount 
(`) 
To Balance b/d 
Cash in hand          5,200 
Cash at Bank      35,500 
To Subscriptions 
To Entrance fees 
To Miscellaneous 
Income  
To Interest on 
Investments 
 
 
40,700 
2,95,000 
50,000 
19,850 
 
8,000 
  
4,13,550 
By Salaries 
By Rent & Electricity 
By Library Books 
By Newspaper & Magazines 
By Sports Equipment 
By Sundry Expenses  
By Balance c/d 
Cash in hand           8,750 
Cash at Bank   53,400 
1,55,000 
69,750 
10,500 
16,600 
28,500 
71,050 
 
 
 62,150 
4,13,550 
 Details of other assets and liabilities are furnished as follows: 
Particulars 31
st
 March 
2023 (`) 
31
st
 March 
2024 (`) 
Salaries Outstanding  10,200 12,400 
Outstanding Rent & Electricity 6,500 7,600 
Investment (8% Govt. Bonds) 1,00,000 1,00,000 
Interest Accrued on Bonds 2,000 2,000 
Subscription receivable 18,700 20,600 
Subscription received in advance 7,000 8,400 
Furniture 65,500  
Sports Equipment 41,500  
Library Books 22,000  
 The closing values of furniture and sports equipment are to be 
determined after charging depreciation at 10% and 15% respectively 
inclusive of additions, if any during the year. The Club’s library books are 
revalued at the end of every year and the value at the end of 31
st
 
March,2024 was ` 30,000. 60% of the Entrance fee is to be capitalized. 
You are required to prepare: 
(i) Income and Expenditure Account for the year ended  
31
st
 March,2024 
(ii) Balance Sheet as on 31
st
 March, 2024 (12 Marks) 
(b) P, Q and R wee partners sharing profit & losses in the ratio of 3:2:1. They 
decided to dissolve the business as on 31
st
 Mrach,2024 when their 
Balance Sheet was as follows: 
Liabilities  Amount (`) Assets Amount (`) 
Capital A/c:  Land & Building  4,85,000 
66
Page 4


MODEL TEST PAPER 9 
FOUNDATION COURSE 
PAPER – 1: ACCOUNTING 
Question No. 1 is compulsory. 
Attempt 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 Ture or False: 
(i) If Closing Stock appears in the Trial Balance then it does not enter 
in Trading Account. It is shown only in the Balance Sheet. 
(ii) If the amount is posted in the wrong account or it is written on the 
wrong side of the account, it is called error of principle.  
(iii) Accounting Standards can override the statute.  
(iv) Promissory Note is different from Bill of Exchange because the 
amount is paid by maker in case of former and by the acceptor in 
the later.  
(v) All errors are rectified by means of journal entries.  
(vi) Revaluation Account is also known as Profit and Loss Adjustment 
Account.  (6 x 2 = 12 Marks) 
 (b) (i)  Define accounting policy. What are the conditions under which a 
company can change its accounting policy? 
(ii)  Explain the following: 
(1) Cash Basis of Accounting  
(2) Going Concern concept  (2 x 2 = 4 Marks) 
(c)  Pass journal entries for the following transactions in the books of Mr. 
Kapil: 
(i)  Purchased goods from Sonu for ` 1,50,000 at a trade discount of 
10% plus CGST and SGST@ 6% each.  
(ii)  Sold goods to Mohit for ` 50,000 and charged CGST and SGST @ 
5% each. Out of the amount due 40% is received by cheque 
immediately. 
(iii)  Goods costing ` 25,000 withdrawn for personal use. Such Goods 
were purchased by paying CGST and SGST @ 6% each. 
(iv)  Machinery purchased from M/s Bright Industries for ` 2,00,000 plus 
CGST and SGST @ 9% each. Paid ` 1,00,000 immediately by 
cheque and balance to be paid after two months. 
 (4 x 1 = 4 Marks)  
64
2. (a) The Trial Balance of Mr. Sarvesh Kumar as on 31
st
 March,2024 did not tally 
and the difference was posted to Suspense Account. On a scrutiny of the 
books the following errors were detected: 
(i) The total of Sales Returns Book for January 2024 has been casted 
short by ` 1,000.  
(ii) Freight paid for installation of a Machine ` 6,500 was posted to the 
Freight Account as ` 5,600. 
(iii) Goods of the value of ` 2,500 returned by a customer were entered 
in the Sales day Book and posted therefrom to the credit of his 
account.  
(iv) ` 18,000 paid for purchase of old Motorcycle for personal use of  
Mr. Sarvesh Kumar was debited to conveyance account.  
(v) A purchase of ` 6,700 had been posted to creditor’s account as  
` 6,000. 
(vi) Receipt of cash ` 5,000 from Mr. Avinash was posted to the debit 
of his account.  
(vii) A cheque for ` 2,500 received form Mr. Alok had been dishonoured 
and was posted to the debit of Mr. Ashok.  
(viii) Sale of ` 8,500 to Mr. Deepak was recorded in the sales book 
correctly but while posting in ledger credited to his account.  
(ix) The total of “Discount Allowed” column in the cash for the month of 
December 2023 amounting to ` 3,800 was not posted. 
(x) Sale of old office table for ` 2,200 treated as sale of goods. 
 You are required to pass necessary journal entries with narrations to 
rectify the above errors.  (12 Marks) 
(b) On 1
st
 April,2022, LMP Co. which depreciates its machinery @10% p.a. 
on diminishing balance method, had ` 9,72,000 to the debit of Machinery 
Account. On 1
st
 October, 2022, part of machinery purchased on 1
st
 April, 
2020 for ` 80,000 was sold for ` 45,000. 
 Also, a new machinery at a cost of ` 1,50,000 was purchased on 1
st
 
October, 2022 and installed on the same date and installation charges 
being ` 8,000. 
 The company changed the method of depreciation from diminishing 
balance method to straight line method on 1
st
 April, 2022. The rate of 
depreciation remains the same. 
 Show the Machinery Account and ascertain the amount chargeable to 
Profit and Loss Account as depreciation in the year 2022-23.  
  (8 Marks) 
  
65
3. (a) The Receipts and Payments Account of Vandana Sports Club for the year 
ended 31
st
 March, 2024 are as follows: 
Receipts and Payments Account 
Receipts  Amount 
(`) 
Payment Amount 
(`) 
To Balance b/d 
Cash in hand          5,200 
Cash at Bank      35,500 
To Subscriptions 
To Entrance fees 
To Miscellaneous 
Income  
To Interest on 
Investments 
 
 
40,700 
2,95,000 
50,000 
19,850 
 
8,000 
  
4,13,550 
By Salaries 
By Rent & Electricity 
By Library Books 
By Newspaper & Magazines 
By Sports Equipment 
By Sundry Expenses  
By Balance c/d 
Cash in hand           8,750 
Cash at Bank   53,400 
1,55,000 
69,750 
10,500 
16,600 
28,500 
71,050 
 
 
 62,150 
4,13,550 
 Details of other assets and liabilities are furnished as follows: 
Particulars 31
st
 March 
2023 (`) 
31
st
 March 
2024 (`) 
Salaries Outstanding  10,200 12,400 
Outstanding Rent & Electricity 6,500 7,600 
Investment (8% Govt. Bonds) 1,00,000 1,00,000 
Interest Accrued on Bonds 2,000 2,000 
Subscription receivable 18,700 20,600 
Subscription received in advance 7,000 8,400 
Furniture 65,500  
Sports Equipment 41,500  
Library Books 22,000  
 The closing values of furniture and sports equipment are to be 
determined after charging depreciation at 10% and 15% respectively 
inclusive of additions, if any during the year. The Club’s library books are 
revalued at the end of every year and the value at the end of 31
st
 
March,2024 was ` 30,000. 60% of the Entrance fee is to be capitalized. 
You are required to prepare: 
(i) Income and Expenditure Account for the year ended  
31
st
 March,2024 
(ii) Balance Sheet as on 31
st
 March, 2024 (12 Marks) 
(b) P, Q and R wee partners sharing profit & losses in the ratio of 3:2:1. They 
decided to dissolve the business as on 31
st
 Mrach,2024 when their 
Balance Sheet was as follows: 
Liabilities  Amount (`) Assets Amount (`) 
Capital A/c:  Land & Building  4,85,000 
66
P                                3,55,000  
Q                               2,20,000 
R                                1,25,000 
General Reserve  
Employees Provident Found 
Trade Creditors 
 
 
7,00,000 
1,50,000 
60,000 
1,24,000 
Machinery 
Furniture  
Stock 
Trade Debtors 
Cash & Bank 
1,88,000 
1,05,000 
55,800 
1,56,000 
44,200 
 10,34,000  10,34,000 
 The following information is given to you: 
(i) There was an unrecorded investment which was sold for ` 30,000. 
(ii) One of the creditors agreed to take over some items of furniture of 
Book value ` 25,000 at ` 24,000. The rest of the creditors were paid 
at a discount of 5%.  
(iii) Out of the trade debtors ` 9,000 proved bad, remaining were fully 
realized.  
(iv) The other assets were realised as under: 
Land & Building  ` 5,25,000 
Machinery ` 1,70,000 
Furniture Remaining taken over by P at ` 75,000 
Stock ` 60,000 
(v) Expenses of dissolution amounted to ` 18,700. 
(vi) There was an outstanding bill for repairs which had to be paid for  
` 3,500. 
You are required to prepare: 
(1) Realisation A/c 
(2) Cash & Bank A/c 
(3) Partner’s Capital A/c in the books of partnership firm. (8 Marks) 
4. (a) Anu and Manu are carrying on business in partnership and sharing profits 
& losses in the ratio of 5:3. The firm’s Balance Sheet as on 31
st 
March, 2024 
was as follows: 
Balance Sheet as on 31
st
 March,2024 
Liabilities  Amount (`) Assets Amount 
(`) 
Capital Accounts: 
 Anu 
 Manu 
Long Term Loan 
Trade Payables 
Outstanding liabilities 
 
 
2,80,000 
2,50,000 
2,00,000 
1,19,500 
16,200 
Building  
Machinery 
Furniture 
Trade Receivables 
Inventories 
Investments 
Cash & Bank 
3,80,000 
1,43,000 
85,000 
1,64,000 
48,400 
15,200 
30,100 
 8,65,700  8,65,700 
67
Page 5


MODEL TEST PAPER 9 
FOUNDATION COURSE 
PAPER – 1: ACCOUNTING 
Question No. 1 is compulsory. 
Attempt 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 Ture or False: 
(i) If Closing Stock appears in the Trial Balance then it does not enter 
in Trading Account. It is shown only in the Balance Sheet. 
(ii) If the amount is posted in the wrong account or it is written on the 
wrong side of the account, it is called error of principle.  
(iii) Accounting Standards can override the statute.  
(iv) Promissory Note is different from Bill of Exchange because the 
amount is paid by maker in case of former and by the acceptor in 
the later.  
(v) All errors are rectified by means of journal entries.  
(vi) Revaluation Account is also known as Profit and Loss Adjustment 
Account.  (6 x 2 = 12 Marks) 
 (b) (i)  Define accounting policy. What are the conditions under which a 
company can change its accounting policy? 
(ii)  Explain the following: 
(1) Cash Basis of Accounting  
(2) Going Concern concept  (2 x 2 = 4 Marks) 
(c)  Pass journal entries for the following transactions in the books of Mr. 
Kapil: 
(i)  Purchased goods from Sonu for ` 1,50,000 at a trade discount of 
10% plus CGST and SGST@ 6% each.  
(ii)  Sold goods to Mohit for ` 50,000 and charged CGST and SGST @ 
5% each. Out of the amount due 40% is received by cheque 
immediately. 
(iii)  Goods costing ` 25,000 withdrawn for personal use. Such Goods 
were purchased by paying CGST and SGST @ 6% each. 
(iv)  Machinery purchased from M/s Bright Industries for ` 2,00,000 plus 
CGST and SGST @ 9% each. Paid ` 1,00,000 immediately by 
cheque and balance to be paid after two months. 
 (4 x 1 = 4 Marks)  
64
2. (a) The Trial Balance of Mr. Sarvesh Kumar as on 31
st
 March,2024 did not tally 
and the difference was posted to Suspense Account. On a scrutiny of the 
books the following errors were detected: 
(i) The total of Sales Returns Book for January 2024 has been casted 
short by ` 1,000.  
(ii) Freight paid for installation of a Machine ` 6,500 was posted to the 
Freight Account as ` 5,600. 
(iii) Goods of the value of ` 2,500 returned by a customer were entered 
in the Sales day Book and posted therefrom to the credit of his 
account.  
(iv) ` 18,000 paid for purchase of old Motorcycle for personal use of  
Mr. Sarvesh Kumar was debited to conveyance account.  
(v) A purchase of ` 6,700 had been posted to creditor’s account as  
` 6,000. 
(vi) Receipt of cash ` 5,000 from Mr. Avinash was posted to the debit 
of his account.  
(vii) A cheque for ` 2,500 received form Mr. Alok had been dishonoured 
and was posted to the debit of Mr. Ashok.  
(viii) Sale of ` 8,500 to Mr. Deepak was recorded in the sales book 
correctly but while posting in ledger credited to his account.  
(ix) The total of “Discount Allowed” column in the cash for the month of 
December 2023 amounting to ` 3,800 was not posted. 
(x) Sale of old office table for ` 2,200 treated as sale of goods. 
 You are required to pass necessary journal entries with narrations to 
rectify the above errors.  (12 Marks) 
(b) On 1
st
 April,2022, LMP Co. which depreciates its machinery @10% p.a. 
on diminishing balance method, had ` 9,72,000 to the debit of Machinery 
Account. On 1
st
 October, 2022, part of machinery purchased on 1
st
 April, 
2020 for ` 80,000 was sold for ` 45,000. 
 Also, a new machinery at a cost of ` 1,50,000 was purchased on 1
st
 
October, 2022 and installed on the same date and installation charges 
being ` 8,000. 
 The company changed the method of depreciation from diminishing 
balance method to straight line method on 1
st
 April, 2022. The rate of 
depreciation remains the same. 
 Show the Machinery Account and ascertain the amount chargeable to 
Profit and Loss Account as depreciation in the year 2022-23.  
  (8 Marks) 
  
65
3. (a) The Receipts and Payments Account of Vandana Sports Club for the year 
ended 31
st
 March, 2024 are as follows: 
Receipts and Payments Account 
Receipts  Amount 
(`) 
Payment Amount 
(`) 
To Balance b/d 
Cash in hand          5,200 
Cash at Bank      35,500 
To Subscriptions 
To Entrance fees 
To Miscellaneous 
Income  
To Interest on 
Investments 
 
 
40,700 
2,95,000 
50,000 
19,850 
 
8,000 
  
4,13,550 
By Salaries 
By Rent & Electricity 
By Library Books 
By Newspaper & Magazines 
By Sports Equipment 
By Sundry Expenses  
By Balance c/d 
Cash in hand           8,750 
Cash at Bank   53,400 
1,55,000 
69,750 
10,500 
16,600 
28,500 
71,050 
 
 
 62,150 
4,13,550 
 Details of other assets and liabilities are furnished as follows: 
Particulars 31
st
 March 
2023 (`) 
31
st
 March 
2024 (`) 
Salaries Outstanding  10,200 12,400 
Outstanding Rent & Electricity 6,500 7,600 
Investment (8% Govt. Bonds) 1,00,000 1,00,000 
Interest Accrued on Bonds 2,000 2,000 
Subscription receivable 18,700 20,600 
Subscription received in advance 7,000 8,400 
Furniture 65,500  
Sports Equipment 41,500  
Library Books 22,000  
 The closing values of furniture and sports equipment are to be 
determined after charging depreciation at 10% and 15% respectively 
inclusive of additions, if any during the year. The Club’s library books are 
revalued at the end of every year and the value at the end of 31
st
 
March,2024 was ` 30,000. 60% of the Entrance fee is to be capitalized. 
You are required to prepare: 
(i) Income and Expenditure Account for the year ended  
31
st
 March,2024 
(ii) Balance Sheet as on 31
st
 March, 2024 (12 Marks) 
(b) P, Q and R wee partners sharing profit & losses in the ratio of 3:2:1. They 
decided to dissolve the business as on 31
st
 Mrach,2024 when their 
Balance Sheet was as follows: 
Liabilities  Amount (`) Assets Amount (`) 
Capital A/c:  Land & Building  4,85,000 
66
P                                3,55,000  
Q                               2,20,000 
R                                1,25,000 
General Reserve  
Employees Provident Found 
Trade Creditors 
 
 
7,00,000 
1,50,000 
60,000 
1,24,000 
Machinery 
Furniture  
Stock 
Trade Debtors 
Cash & Bank 
1,88,000 
1,05,000 
55,800 
1,56,000 
44,200 
 10,34,000  10,34,000 
 The following information is given to you: 
(i) There was an unrecorded investment which was sold for ` 30,000. 
(ii) One of the creditors agreed to take over some items of furniture of 
Book value ` 25,000 at ` 24,000. The rest of the creditors were paid 
at a discount of 5%.  
(iii) Out of the trade debtors ` 9,000 proved bad, remaining were fully 
realized.  
(iv) The other assets were realised as under: 
Land & Building  ` 5,25,000 
Machinery ` 1,70,000 
Furniture Remaining taken over by P at ` 75,000 
Stock ` 60,000 
(v) Expenses of dissolution amounted to ` 18,700. 
(vi) There was an outstanding bill for repairs which had to be paid for  
` 3,500. 
You are required to prepare: 
(1) Realisation A/c 
(2) Cash & Bank A/c 
(3) Partner’s Capital A/c in the books of partnership firm. (8 Marks) 
4. (a) Anu and Manu are carrying on business in partnership and sharing profits 
& losses in the ratio of 5:3. The firm’s Balance Sheet as on 31
st 
March, 2024 
was as follows: 
Balance Sheet as on 31
st
 March,2024 
Liabilities  Amount (`) Assets Amount 
(`) 
Capital Accounts: 
 Anu 
 Manu 
Long Term Loan 
Trade Payables 
Outstanding liabilities 
 
 
2,80,000 
2,50,000 
2,00,000 
1,19,500 
16,200 
Building  
Machinery 
Furniture 
Trade Receivables 
Inventories 
Investments 
Cash & Bank 
3,80,000 
1,43,000 
85,000 
1,64,000 
48,400 
15,200 
30,100 
 8,65,700  8,65,700 
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 They decided to admit Ranu as a partner with effect from 1
st
 April, 2024 
on the following terms:  
(i) Ranu will be paid 1/5 share in the future profits and new profit 
sharing ratio would be 5:3:2. 
(ii) Ranu will bring ` 1,00,000 as his capital. 
(iii) Goodwill of firms is to be valued at 2 years’ purchase of average 
profit of past 3 years and Ranu will bring his share of goodwill in 
cash. The profits of past 3 years ending on 31
st
 March were as 
under: 
31
st
 March,2022 ` 87,000 
31
st
 March,2023 ` 1,06,000 
31
st
 March,2024 ` 1,22,000 
(iv) It was also agreed that the partners will not withdraw their share of 
goodwill nor will the goodwill appear in the books of account.  
(v) It was also decided to value the assets: 
 Building is to be appreciated by ` 50,000 and Machinery is to be 
depreciated by 10%. Furniture is revalued at ` 80,000. Investments at  
` 16,000 and Inventories at ` 47,500. 
 Provision for doubtful debts is to be created on debtors @ 5%. 
 You are required to prepare Revaluation Account, Partners’ Capital 
Accounts and Balance Sheet of the reconstituted firm as on 1
st
April, 
2024. (12 Marks) 
(b) Harshit Traders are carrying on the retail business of electrical goods. 
They keep their books of account under single entry system. The 
Balance Sheet as on 31
st
March, 2023 was as follows:  
Liabilities  Amount (`) Assets Amount 
(`) 
Capital A/c 
Trade Creditors 
Salary payable 
 
6,05,000 
75,200 
9,000 
Motor Vehicle  
Furniture  
Stock in trade 
Trade Debtors 
6% Investments 
Cash in hand & at 
Bank 
1,10,000 
73,500 
1,70,800 
1,45,400 
60,000 
1,29,500 
 6,89,200  6,89,200 
 
  
68