TOPPER Sample Papers
223
TOPPER SAMPLE PAPER 3
ACCOUNTANCY
XII
Time Allowed - 3 Hrs. Max. Marks - 80
General Instructions:1. This question paper contains two parts A & B only.
2. All parts of questions should be attempted at one place.
3. There is internal choice in some questions.
Part – A
Q 1. State the nature of Receipts & Payment A/c.
(1)
Q 2. Outgoing partner is compensated for parting with firms future profits by the remaining
partners. In what ratio do the remaining partners contribute to such compensation amount?
(1)
Q 3. List any two items that may appear on the credit side of a partner’s fluctuating capital
account.
(1)
Q 4. Mention any one difference between premium on issue of debentures and premium on
redemption of debentures.
(1)
Q 5. Calculate interest on drawings of X @ 10% p.a. for the year ended 31.12.08 if he withdrew
Rs.6,000 in the beginning of each quarter.
(1)
Q 6. How will you deal with the following items while preparing the final accounts of not for profit
organisation for the year ending 31.03.08
Tournament Fund on 1.04.07 Rs.4,800
9% Tournament Fund Investment Rs.4,800
Donation received for tournament during the year Rs.15,000
Expenses incurred during the year on conducting Tournament Rs.18,000
(3)
Q 7. Y Ltd. forfeited 700 shares of Rs.100 each, issued at a premium of Rs.5 per share for the non
payment of allotment of Rs.35 per share and first call of Rs.20 per share. The second & final
call of Rs.20 has not yet been called. 500 of these shares were reissued as Rs.80 paid up for
Rs.92 per share.
(3)
Q 8. S Ltd. took over assets of Rs.8,50,000 and liabilities of Rs.1,50,000 of C Ltd. at an agreed
price of Rs.7,20,000. The purchase consideration was discharged by issuing 12% Debentures
of Rs.100 each at a premium of 20%. Journalise.
(3)
Q 9. P & Q were partners in a firm sharing profits in the ratio of 7:3. Their fixed capital were PRs.5,00,000 and Q – Rs.8,00,000. For the year ended 2007, interest on capital was credited
@ 12% instead of 10%. Show the necessary adjusting entry with workings.
(3)
Q 10. Following is the Balance Sheet of A & B who were sharing profits & losses as 3:2.
Liabilities
Amount
(Rs.)
Assets
Amount
(Rs.)
Sundry Creditors
20,000
Cash
30,000
Reserves
30,000
Stock
1,00,000
A’s capital
90,000
Debtors
50,000
224
Accounts–XII
B’s capital
60,000
Furniture
20,000
2,00,000
2,00,000
B died on 1.05.02. His heirs would be entitled to :
(a) Capital to his credits at the date of last Balance Sheet
(b) His share of reserve.
(c) His share of profit to the date of death based on the average profit of the last 3 year.
(d) By way of goodwill his share of total profits for the preceding three years.
Profits were-
1999 – Rs.41,800; 2000 – Rs.39,200; 2001 – Rs.45,000
Prepare B’s capital A/c.
(4)
Q 11. On 31.03.03 G Ltd. had Rs.8,00,000 9% debentures due for redemption. The company had a
balance of Rs.3,40,000 in its Debenture Redemption Reserve Account. Pass necessary journal
entries for redemption of debentures.
(4)
Q 12. (a) M Ltd. invited application for issue of 2,00,000, 9% debentures of Rs.100 each at par
on 25.01.09, redeemable at 5% premium after 3 years. The amount was payable on
application and the debentures were issued on 25.01.09. Pass journal entries for the
issue of debentures.
(b) Rs.95,000, 14% debentures of Rs.100 each issued at par and redeemable at 10%
premium were converted into equity shares of Rs.10 each issued at premium of 25%.
Journalise. (2+2)
Q 13. A, B & C were partners in a firm sharing profits in 3:2:1. On 31.03.01, B retired and the
balance in his capital account was Rs.34,000. The other assets & liabilities were as follows:
Cash Rs.10,000; Building Rs.1,00,000; Plant Rs.40,000; Stock Rs.20,000 ; Debtors Rs.20,000;
Investment Rs.30,000. The following was agreed between the partners on B’s retirement:
(i) Building to be appreciated by 20%.
(ii) Plant & Machinery to be depreciated by 10%
(iii) A provision of 5% on debtors to be created for doubtful debts.
(iv) Stock was to be valued at Rs.18,000 and investment at Rs.35,000.
(v) A old photo copier previously written off was sold for Rs.2,000.
(vi) Partners had to pay Rs.5,000 to the family of an employee who died in an accident.
(vii)B was paid Rs.7,500 in cash and the balance in three equal yearly installment with
interest @ 10% p.a.
Prepare Revaluation A/c , B’s capital A/c and B’s loan A/c till it is finally paid. The books are
closed on 31 st March every year.
(6)
Q 14. Prepare an Income & Expenditure Account from the following particulars for the year ended
31.03.08 (6)
Receipts & Payment Account
Receipts
Amount
(Rs.)
Payments
Amount
(Rs.)
Balance b/d
18,000
Salaries
1,20,000
Subscription
Printing
9,820
2006-2007 8,100
Electricity & water
2,000
TOPPER Sample Papers
2007-2008 2,10,000
Sundry Expenses
4,190
2,20,600
Entertainment material
(including Rs.2,000 for 0607)
58,200
Donation for Buildings
42,000
Office Expenses
7,820
Miscellaneous receipts
17,190
Mobile phone bills
2,600
Sale of Old Furniture
( book value Rs.4,000)
6,000
10% Investments
(face value Rs.12,500,
Purchased on 1.10.07)
10,000
Legacies
7,200
Advance for construction of
Building
15,000
Receipts from charity show
55,000
Internal Charges
1,200
Balance c/d
1,35,160
2008-2009
2,500
3,65,990
225
3,65,990
Balance Sheet as at 31.03.07
Liabilities
Amount
(Rs.)
Assets
Amount
(Rs.)
Creditors for entertainment
material
5,000
Cash
18,000
Subscription received in
advance
2,100
Outstanding Subscription
16,000
Building Fund
50,000
10% Investments
(face value Rs.1,50,000)
1,10,000
Capital Fund
2,52,100
Mobile phones
17,000
Musical Instrument
12,200
Computers & printers
56,000
Furniture
80,000
3,09,200
3,09,200
(6)
Q 15. R Ltd. invited applications for issuing 2,00,000 equity shares of Rs.10 each at a discount of
Re.1 payable:
On application Rs.2 per share, On allotment Rs.3 per share, on first & final call Rs.4 per
share.
Application were received for 3,00,000 shares and pro-rata allotment was made to all
applicants as follows:
Applicants for 1,60,000 shares were allotted 1,20,000 shares.
Applicants for 1,40,000 shares were allotted 80,000 shares.
Ekta to whom 1,200 shares were allotted out of the group applying for 1,60,000 shares, failed
to pay the allotment money. Her shares were forfeited immediately after allotment. Manisha
who had applied for 2,800 shares out of the group applying for 1,40,000 shares failed to pay
the first & final call. Her shares were also forfeited. All the forfeited shares were reissued @
Rs.8 per share, as fully paid up. Journalise.
OR
226
Accounts–XII
S Ltd. invited applications for issuing 2,00,000 equity shares of RS.100 each at a premium of
Rs.10 per share. The amount was payable as follows:
On application Rs.40 per share( including premium), On allotment Rs.30 per share, on first
& final call balance.
Application were received for 3,00,000 shares. Applications for 40,000 shares were rejected
and pro-rata allotment was made to remaining applicants.
Manoj who was allotted 2,000 shares failed to pay the allotment and first call money. His
shares were forfeited. The forfeited shares were reissued at Rs.90 per share fully paid up.
Journalise.
(8)
Q 16. A, B and C are partners sharing profits & losses in the ratio of 2:2:1.
Balance Sheet as on 31.03.09
Liabilities
Amount
(Rs.)
Assets
Amount
(Rs.)
Bills Payable
40,000
Cash
10,000
Sundry Creditors
1,50,000
Stock
Outstanding Expenses
10,000
Debtors
Less: P/D/D
A’s capital
2,00,000
Plant & Machinery
2,00,000
B’s capital
2,00,000
Land & Buildings
4,00,000
C’s capital
1,00,000
40,00
51,000
1,000
7,00,000
50,000
7,00,000
The firm was dissolved on 31.03.09 on the following terms
(i) Stock was taken over by one of the creditors at a discount of 10%.
(ii) The remaining creditors were paid at a discount of 5%.
(iii) Debtors realized Rs.49,000: Plant & Machinery Rs.1,00,000 and Land & Buildings
Rs.3,00,000.
(iv) Bills payable were discharged at a discount of 2% and the outstanding expenses were
paid in full.
(v) Realisation expenses of Rs.5,000 were paid by B.
(vi) The firm had a JLP which was surrendered for RS.50,000.
Prepare Realisation A/c, partners’ capital A/c and Cash A/c.
OR
P and Q are partners in a firm sharing profits & losses in the ratio of 3:1. Their Balance Sheet
as on 31.03.09 was as follows:
Liabilities
Amount
(Rs.)
Assets
Amount
(Rs.)
Sundry Creditors
75,000
Cash
5,000
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Reserves
8,000
Bank
40,000
P’s capital
60,000
Stock
40,000
Q’s capital
32,000
Debtors
32,000
Furniture
2,000
Buildings
50,000
Profit & Loss A/c
6,000
1,75,000
1,75,000
They admit R as a partner for 1/5 share in profits on the following terms:
(i) Goodwill of the firm valued at Rs.40,000 and R brings his share og goodwill in cash.
(ii) The value of stock and Furniture be reduced by 10%.
(iii) A provision for Doubtful debts be created @ 5% on debtors.
(iv) Building be appreciated by 20%.
(v) The total capital of the new firm was fixed at Rs.2,50,000, which will be shared by the
partners in their new profit sharing ratio.
th
Prepare Revaluation A/c, Partners’ capital A/c and Balance Sheet of the new firm.
(8)
PART – B
Q 17. What is the impact of a purchase of a fixed assets on a current ratio?
(1)
Q 18. Dividend received by a financing company will be classified under which activity? (1)
Q 19. Explain the term Cash Equivalent.
(1)
Q 20. List any three items that can be shown under the heading ‘Reserves & Surplus’ in a company’s
Balance Sheet.
(3)
Q 21. With the help of following information prepare a comparative income statement:
Particulars
2007(Rs.)
2008(Rs.)
Sales
50,000
80,000
Cost of goods sold
60% of sales
70% of sales
Indirect expenses
10% of G.P
10% of G.P
Rate of income tax
50% of N.P
50% of N.P
(4)
Q 22. Calculate the following ratio from the details given below:
(i) Current Ratio
(ii) Liquid Ratio
(iii) Operating Ratio
(iv) Gross Profit Ratio
Details: Current assets Rs.70,000; Sales Rs.1,40,000; Cost of goods sold Rs.68,000; Net
working capital Rs.30,000; Inventories Rs.30,000
(4)
228
Accounts–XII
Q 23. Prepare a Cash Flow Statement from the given Balance Sheets:
Liabilities
2007
2008
Assets
2007
2008
Share capital
Reserves
Profit & Loss A/c
Bank Loan
Creditors
Bills Payable
Prov. For Tax
4,00,000
1,00,000
61,000
1,40,000
2,80,000
20,000
60,000
5,00,000
1,20,000
61,200
--2,60,000
10,400
70,000
Machinery
Debtors
Business Premises
Stock
Cash
3,00,000
2,00,000
4,00,000
1,60,000
1,000
3,38,000
1,48,000
3,80,000
1,28,400
27,200
10,61,000
10,21,600
10,61,000
10,21,600
Additional information:
1.
2. Depreciation on Machinery Rs.28,000.
3. Provision for tax was made Rs.66,000.
(6)
1. Real accounts
(1)
2. Gaining Ratio
(1)
3. (i) Interest on partners’ capital
Dividend paid during the year Rs.46,000.
(ii) Partners’ share of profit
(1/2 x 2)
4. Premium on issue of debentures is a capital profit whereas premium on redemption of
debentures is a capital loss.
(1)
5. Interest on X’s drawings = (6,000 x 4) x 10/100 x 7.5/12
6.
Balance Sheet
= Rs.1,500
Liabilities
(1)
Rs.
Assets
Tournament fund
4,800
Add: Donation received for
Tournament fund
15,000
Add: Accrued Interest 432
Less: Expenses
(18,000)
Rs.
Tournament fund Investment
Accrued interest on Tournament
fund investment
4,800
432
2,232
7.
Date
(1/2 x 6 = 3)
Journal Entries
Particulars
Share Capital A/c
Securities premium A/c
To Share Forfeited A/c
To Calls in Arrears A/c
(being 700 shares forfeited)
L.F.
Dr.
Dr.
Rs.(Dr.)
Rs.(Cr.)
56,000
3,500
21,000
38,500
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Bank A/c
To Share Capital A/c
To Securities premium A/c
(being 500 shares reissued)
Dr.
46,000
40,000
6,000
Share Forfeited A/c
Dr.
To Capital Reserve A/c
(being balance of shares forfeited A/c transferred to
capital reserve A/c )
15,000
15,000
8.
(1x3=3)
Journal Entries
Date
Particulars
L.F.
Rs.(Dr.)
Assets A/c
Dr.
Goodwill A/c
Dr.
To Liabilities A/c
To C Ltd.
(Being S ltd. took over the assets & liabilities of C ltd.)
8,50,000
20,000
C Ltd.
Dr.
To 12% Debentures A/c
To Securities Premium A/c
(Being 600 debentures issued to C Ltd. at premium)
7,00,000
Rs.(Cr.)
1,50,000
7,20,000
6,00,000
1,20,000
9. (2+1)
Adjustment Table
P
Q
Total
Amt. already credited(2%)
Amt to be credited (7:3)
10,000
18,200
16,000
7,800
26,000
26,000
Difference
8,200
8,200
---
Journal Entry
Particulars
L.F
Q’s Current A/c
To P’s Current A/c
Dr.
Dr. (Rs.)
8,200
10.
(2+1)
B’s Capital A/c
Particulars
To B’s executor A/c
Rs.
Particulars
1,28,000
1,28,000
11.
Cr. (Rs.)
8,200
Journal Entries
By
By
By
By
balance b/d
A’s capital A/c
Reserves
P & L Suspense A/c
Rs.
60,000
50,400
12,000
5,600
1,28,000
(1x4 = 4)
230
Accounts–XII
Date
Particulars
L.F.
Profit & Loss Appropriation A/c
To Debenture Redemption Reserve A/c
(being Debenture Redemption Reserve created)
Dr.
9% Debentures A/c
To Debentures holders A/c
(Being debentures redeemed)
Dr.
Debentures holders A/c
To Bank A/c
(Being Debentures holders paid)
Dr.
Rs.(Dr.)
Rs.(Cr.)
60,000
60,000
8,00,000
8,00,000
8,00,000
8,00,000
Debenture Redemption Reserve A/c
To general reserve
(Being D.R.R. transferred to general reserve)
4,00,000
4,00,000
12.
(1x4=4)
(a)
Date
Particulars
L.F.
Bank A/c
To Debenture application & allotment A/c
(Being Debenture application money received)
Dr.
Rs.(Cr.)
2,00,00,000
2,00,00,000
Debenture application & allotment A/c
Dr.
Loss on issue of debenture A/c
Dr.
To 9% Debentures A/c
To Premium on Redemption A/c
(Being application money transferred to Debenture
A/c.)
Rs.(Dr.)
2,00,00,000
10,00,000
2,00,00,000
10,00,000
(b)
Date
Particulars
L.F.
Rs.(Dr.)
14% Debentures A/c
Dr.
Premium on redemption A/c
Dr.
To Debentures holders A/c
(Being amt. due to Debentures holders on conversion)
95,000
9,500
Debentures holders A/c
Dr.
To Equity share capital A/c
To Securities premium A/c
(Being issue of 8,360 equity shares at a premium of
25%)
1,04,500
Rs.(Dr.)
1,04,500
83,600
20,900
(1 x 4 = 4)
13. Revaluation A/c
Particulars
To
To
To
To
To
Plant & Machinery
Provision for doubtful debts
Stock
Liability for compensation
profit (b/fig)
Rs.
Particulars
4,000
1,000
2,000
5,000
15,000
27,000
By Buildings
By Investments
By Photo Copier
Rs.
20,000
5,000
2,000
27,000
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B’s Capital A/c
Particulars
C
Particulars
A
To Cash
To B’s loan A/c
7,500
31,500
By balance b/d
By Revaluation
profit
34,000
5,000
39,000
39,000
B’s Loan A/c
Date
Particulars
Amt.
Date
Particulars
31.03.02
To bank A/c
To Balance c/d
13,650
21,000
34,650
1.04.01
31.03.02
By B’s capital
By interest
31.03.03
To bank A/c
To Balance c/d
12,600
10,500
23,100
11,550
1.04.02
31.03.03
By Balance b/d
By Interest
31,500
3,150
34,650
21,000
2,100
23,100
31.03.04
To bank A/c
1.04.03
31.03.04
By Balance b/d
By Interest
10,500
1,050
11,550
11,550
Amt.
(2+1+3)
14.
Income & Expenditure A/c
For the year ending 31.03.08
Particulars
To
To
To
To
To
To
To
To
To
Printing
salaries
Electricity & water
Sundry expenses
Entertainment material
Office expenses
Mobile phone bills
Internal charges
Surplus
Rs.
Particulars
9,820
1,20,000
2,000
4,190
56,200
7,820
2,600
1,200
98,085
Rs.
By Subscription
2,10,000
Add: Advance subs.
2,100
By Miscellaneous receipts
By profit on sale of furniture
By Receipts from charity show
By interest on invest. 15,000
Add: Accrued interest
625
2,12,100
17,190
2,000
55,000
15,625
3,01,915
3,01,915
15.
Date
(1/2 x 12 = 6)
Journal Entries
Particulars
L.F.
Bank A/c
To Share application A/c
(Being share application money received on
3,00,000 shares)
Dr.
Share Application A/c
To Share Capital
To Share Allotment
(Being application money transferred)
Dr.
Rs.(Dr.)
Rs.(Cr.)
6,00,000
marks
½
6,00,000
6,00,000
½
4,00,000
2,00,000
232
Accounts–XII
Share Allotment A/c
Discount on shares A/c
To share capital A/c
(Being allotment due on 2,00,000 shares )
Dr.
Dr.
Bank A/c
Calls in arrears A/c
To share allotment A/c
(Being allotment money received)
Dr.
Dr.
Share capital A/c
To Share forfeiture A/c
To Calls in arrears A/c
To Discount on shares A/c
(Being shares forfeited)
Dr.
Share First & final call A/c
To share capital A/c
(Being share first call due)
Dr.
Bank A/c
Calls in arrears A/c
To share first & final call
(Being call money received )
Dr.
Dr.
6,00,000
2,00,000
½
8,00,000
3,97,200
2,800
1
4,00,000
7,200
1
3,200
1,200
2,800
7,95,200
½
7,95,200
7,88,800
6,400
1
7,95,200
Share capital A/c
To Share forfeiture A/c
To Calls in arrears A/c
To Discount on shares A/c
(Being shares forfeited)
Dr.
Bank A/c
Discount on shares A/c
Share forfeited A/c
To Share capital A/c
(Being shares reissued)
Dr.
Dr.
Dr.
16,000
1
8,000
1,600
6,400
22,400
2,800
2,800
1
28,000
Share forfeited A/c
Dr.
To Capital Reserve A/c
( Being share forfeited A/c transferred to capital
reserve A/c)
5,200
1
5,200
OR
Journal Entries
Date
Particulars
L.F.
Bank A/c
To Share application A/c
(Being share application money received on
3,00,000 shares)
Dr.
Share Application A/c
To Share Capital
To Securities premium A/c
To Share Allotment
To Bank
(Being application money transferred)
Dr.
Rs.(Dr.)
Rs.(Cr.)
1,20,00,000
1,20,00,000
½
1,20,00,000
1
60,00,000
20,00,000
24,00,000
16,00,000
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Share Allotment A/c
Dr.
To share capital A/c
(Being allotment due on 2,00,000 shares )
60,00,000
Bank A/c
Calls in arrears A/c
To share allotment A/c
(Being allotment money received)
Dr.
Dr.
35,64,000
36,000
Share First & final call A/c
To share capital A/c
(Being share first call due)
Dr.
Bank A/c
Calls in arrears A/c
To share first & final call
(Being call money received )
Dr.
Dr.
Share capital A/c
To Share forfeiture A/c
To Calls in arrears A/c
(Being shares forfeited)
Dr.
Bank A/c
Share forfeiture A/c
To Share capital A/c
(Being shares reissued)
Dr.
Dr.
80,00,000
79,20,000
80,000
1
80,00,000
2,00,000
1
84,000
1,16,000
1,80,000
20,000
1
2,00,000
Working notes:
Manoj applied for = 2,60,000/2,00,000 x 2,000 = 2,600
Unpaid allotment by Manoj = (2,000 x 30) – 600 x 40 = 36,000
Unpaid first call = 2,000 x 40 = Rs.80,000
16.
Realisation A/c
To B’s Capital (realization exp.)
1
80,00,000
To debtors
To stock
To Plant & machinery
To Land & Building
To Cash
Creditors
1,08,300
O/S Expenses
10,000
Bills payable
39,200
1
36,00,000
Share forfeited A/c
Dr.
To Capital Reserve A/c
( Being share forfeited A/c transferred to capital
reserve A/c)
Particulars
½
60,00,000
Rs.
64,000
Particulars
40,000
51,000
2,00,000
4,00,000
1,57,500
5,000
7,00,000
By provision for bad debts
By creditors
By Bills payable
By O/s Expenses
By Cash
Debtors
49,000
Plant & Mach. 1,00,000
Land & Building 3,00,000
JLP
50,000
By LossA – 61,400
B – 61,400
C – 30,700
1
64,000
Rs.
1,000
1,50,000
40,000
10,000
4,99,000
1,53,500
7,00,000
234
Accounts–XII
Partners’ Capital A/c
Particulars
A
B
C
Particulars
A
B
C
To
realization
loss
To cash
61,400
61,400
30,700
2,00,000
2,00,000
5,000
1,00,000
1,38,600
1,43,600
69,300
By balance
b/d
By
realization
2,00,000
2,05,000
1,00,000
2,00,000
2,05,000
1,00,000
Cash A/c
Particulars
Rs.
To balance b/d
To realization
Particulars
10,000
4,99,000
By
By
By
By
Rs.
A’s capital
B’s capital
C’s capital
realization
1,57,500
1,38,600
1,43,600
69,300
5,09,000
5,09,000
(8)
OR
Revaluation A/c
Particulars
Rs.
Particulars
Rs.
To Stock
To Provision for doubtful debts
To Furniture
To profit transferred to
P- 3,150
Q - 1050
4,000
1,600
200
By Buildings
10,000
4,200
10,000
10,000
Partners’ Capital A/c
Particulars
P
Q
To profit & loss
To balance c/d
4,500
1,50,000
1,500
50,000
1,54,500
R
51,500
50,000
Particulars
P
Q
R
By balance b/d
By cash A/c
By premium
A/c
By revaluation
Profit
By Reserves
By Cash
60,000
--6,000
32,000
---2,000
--50,000
------
3,150
1,050
6,000
79,350
2,000
14,450
1,54,500
51,500
50,000
---
50,000
Cash A/c
Particulars
To
To
To
To
To
balance b/d
R’s capital
Premium
P’s capital
Q’s capital
Rs.
5,000
50,000
8,000
79,350
14,450
1,56,800
Particulars
Rs.
By Balance c/d
1,56,800
1,56,800
TOPPER Sample Papers
Balance Sheet
As on 1st April 2008
Liabilities
Rs.
Assets
Creditors
P’s capital
Q’s capital
R’s capital
75,000
1,50,000
50,000
50,000
Rs.
Cash
Bank
Debtors
Less: Provision for
doubtful debts
Stock
Furniture
Building
1,56,800
40,000
32,000
1,600
3,25,000
235
30,400
36,000
1,800
50,000
3,25,000
(8)
PART – B
17. Current ratio will decline
(1)
18. Operating Activity
(1)
19. These are short term highly liquid investments that are readily convertible into known amount
of cash.
(1)
20. (i) Capital Reserves
(ii) Securities premium
(iii) Capital redemption reserve
21.
(1 x 3 = 3)
Comparative Income Statement
Particulars
2007(Rs.)
2008(Rs.)
Absolute change
Percentage
Sales
Less: Cost of goods sold
50,000
30,000
80,000
56,000
30,000
26,000
60
86.67
Gross profit
Less: Indirect expenses
20,000
2,000
24,000
2,400
4,000
400
20
20
Net profit before tax
Less: Tax payable
18,000
9,000
21,600
10,800
3,600
1,800
20
20
9,000
10,800
1,800
20
Net profit after tax
(1 x 4 = 4)
22. (i) Current Ratio
= Current assets/Current liabilities
Current liabilities = Current assets – Net working capital
= 70,000 – 30,000 = 40,000
Current ratio = 70,000 / 40,000 = 1.75:1
(ii) Liquid Ratio
= Liquid assets/Current liabilities
Liquid assets = Current assets – Inventories
= 70,000 – 30,000 = 40,000
Liquid ratio
= 40,000 / 40,000 = 1:1
(iii) Operating Ratio = Cost of goods sold + Operating expenses / Sales x 100
= 68,000 / 1,40,000 x 100 = 48.57%
(iv) Gross profit ratio = Gross profit / Net sales x 100
236
Accounts–XII
Gross profit = Sales – cost of goods sold
= 1,40,000 – 68,000 = 72,000
Gross profit ratio = 72,000 / 1,40,000 x 100 = 51.43%
(1 x 4 = 4)
23.
Calculation of Profit before tax
Profit earned during the year
=
Rs.200
Add: Transfer to reserve
= Rs.20,000
Add: dividend paid
= Rs.46,000
Add: Tax made
Cash Flow Statement
= Rs.66,000
= Rs.1,32,200
Particulars
Amount(Rs.)
(A) Cash flow from Operating Activities
Net profit before tax
Add: Non operating expenses
Depreciation
Add: Decrease in stock
Add: Decrease in debtors
Less: Decrease in creditors
Less: Decrease in Bills payable
Operating profit before tax
Less: tax paid
Cash flow from Operating Activities
Amount(Rs.)
1,32,200
48,000
48,000
31,600
52,000
(20,000)
(9,600)
(B) Cash Flow from Investing Activities
Purchase of Machinery
Cash used in Investing Activities
(66,000)
(C) Cash flow from Financing Activities
Issue of share capital
Bank loan repaid
Dividend paid
Cash used in Financing Activities
1,00,000
(1,40,000)
(46,000)
1,02,000
2,34,200
56,000
1,78,200
(66,000)
(86,000)
26,200
1,000
27,200
Net increase in cash ( A+B+C)
Add: Opening balance of cash & equivalents
Closing balance of cash & equivalents
Provision for taxation A/c
Particulars
Rs.
Particulars
Rs.
To cash A/c
To Balance c/d
56,000
70,000
By Balance b/d
By P & L A/c
60,000
66,000
1,26,000
1,26,000
Machinery A/c
Particulars
Rs.
Particulars
Rs.
To Balance b/d
To Bank (pur.)
3,00,000
66,000
By Depreciation
By balance c/d
28,000
3,38,000
3,66,000
3,66,000
(6)