Government of Karnataka

Department of School Education

(Pre-University)

REVISED QUESTION BANK

2024-25

Subject :
Accountancy (30)

II PUC
REVISED QUESTION BANK
COMMITTEE MEMBERS
Coordinator
Sri. Mahabaleshwara Tunga
Principal, Soundarya Composite PU College, AN 0436
Havanur extension, Bengaluru-73

Members
Sri. L G Kumbar
Senior lecturer, Govt. P U College for Boys EE0025
Vijayapura

Sri.V L Kamakar
Senior lecturer, Govt. SSCA PU College - DD0201
K K Koppa, Taluk, District Balagavi.

Sri Sanjeeva
Selection Grade Lecturer - SU0055
Viveka PU College, Kota, Udupi.

Smt. Lakshmi M K
Senior Lecturer, Govt.P.U. College for Girls, Hiriyur – GG0299
Chitradurga District.

**********-------**********

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INDEX

Chapter Name of Chapter Page No. Page No

No. From To

01. ACCOUNTING FOR PARTNERSHIP

BASIC CONCEPTS 01 10

02. RECONSTITUTION OF A PARTNERSHIP FIRM

ADMISSION OF A PARTNER 11 28

03. RECONSTITUTION OF A PARTNERSHIP FIRM

RETIREMENT / DEATH OF A PARTNER 29 49

04. DISSOLUTION OF PARTNERSHIP FIRM 50 69

05. ACCOUNTING FOR SHARE CAPITAL 70 82

06. ISSUE AND REDEMPTION OF DEBENTURES 83 91

07. FINANCIAL STATEMENTS OF A COMPANY 92 103

08. FINANCIAL STATEMENT ANALYSIS 104 114

09. ACCOUNTING RATIOS 115 132

10. CASH FLOW STATEMENT 133 142

*****-----*****
CHAPTER - 01

ACCOUNTING FOR PARTNERSHIP

BASIC CONCEPTS
PART - A
One Mark Questions:
I] Multiple Choice Questions:
1] The agreement between partner may be in
a] Oral
b] Written
c] Oral or Written
d] Duplicate
2] Partnership deed may not contains:
a] Name of the firm
b] Name and address of the partners
c] Profit and loss sharing ratio
d] Ownership of property.
3] If any partner has advanced some money to the firm beyond the amount of his
capital, he shall be entitled to get interest on the amount at the rate of:
a] 5% p.a.
b] 6% p.a.
c] 8% p.a.
d] 7% p.a.
4] Interest on capital is generally provided for, when:
a] The partners contribute unequal amounts of capital but share profits equally.
b] The partners contribute equal amounts of capital but share profit unequally
c] Both (a) & (b) situation
d] The partners contribute equal amounts of capital but withdrawn unequally.
5] When fixed amount is withdrawn on the first day of every month, interest
on total amount for the year ending will be calculated for:
a] 5 & 1/2 months
b] 4 &1/2 months
c] 6 &1/2 months
d] 6 months

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6] When varying amounts are withdrawn at different intervals, the interest is
calculated by using:
a] Simple Method
b] Average Method
c] Product Method
d] Weighted method
7] Adjustment for correction of omission and commission can be made in
a] Profit and loss adjustment account
b] Directly in the Capital Accounts of concerned partners
c] Revaluation account
d] Both (a) & (b) situations.
8] In order to form a Partnership there should be at least,
a] One person
b] Two people
c] Seven people
d] Fifty people
9] The business of a partnership concern may be carried on by
a] Two partners
b] All the partners
c] Any of them acting for all
d] All Partners or any of them acting for all.
10] The agreement between Partners must be to share:
a] Profits
b] Losses
c] Profits and losses
d] Duties and responsibilities
11] The liability of a Partner for acts of the firm is
a] Limited
b] Unlimited
c] Minimum
d] Maximum
12] The partnership Deed should be properly drafted and prepared as per the
provisions of the
a] Partnership Act.
b] Stamp Act
c] Companies Act
d] Registration Act

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13] The clauses of Partnership Deed can be altered with the consent of,
a] Two Partners
b] Ten Partners
c] Twenty Partners
d] All the Partners
14] In absence of partnership deed profits or losses must be shared in
a] Capital proportion
b] Equal
c] Agreed proportion
d] Any other proportion
15] When the dates of withdrawal are not specified, interest on drawings is to be
calculated for the average period of
a] 5 months
b] 6 months
c] 7 months
d] 8 months

II. Fill in the blank questions:

1] Section _________ of the Indian Partnership Act, 1932 defines Partnership.
2] A partnership firm has no separate____________________ entity.
3] In order to form a partnership, there should be at least ________persons of a
common goal.
4] Partnership is the result of _________between two or more persons to do business
and share its profits and losses.
5] It is preferred that the partners have an agreement in___________ .
6] The agreement between partners should be to carry on some _________.
7] Each partner carrying on the business is the principal as well as the
_____________for all other partners.
8] The liability of a partner for his acts is___________
9] In the absence of Partnership deed interest on advance from Partner will be
charged @ ----------percentage per annum.
10] Under _____________method, the capitals of the partners shall remain fixed.
11] Under fluctuating capital method, the partners’ capital account balances
________________from time to time.
12] Profit and Loss appropriation account is merely an extension of ___________
account of firm.

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13] Profit and Loss appropriation account Dr. To_____________________
account.
(Transferring interest on capital to P/L appropriation account).
14] ________________________Account Dr.
To Salary to partners account
(Transferring partners salary to P/L Appropriation A/c)
15] P/L Appropriation A/c Dr.
To Partners Capital /Current A/c.
(______________________

III. Match the followings

A B
a] The partnership Act i] Alteration of partnership deed
b] Consent of all partner ii] Guarantee of profit
c] Interest on drawings in absence of deed iii]1932
d] Each partner has only one account iv] No partner is charged
e] Assurance to minimum v] Fluctuating capital method
amount of profit
vi] 6%
IV. Short Answer Questions :
1] What is a Partnership Firm?
2] Write any one feature of Partnership.
3] State any one content of the Partnership Deed.
4] Mention any one method of maintaining Partners capital.
5] Why is the Profit and Loss Appropriation account prepared?
6] What is the rate of Interest on advances by Partners as per Partnership Act?
7] When do you prepare partners’ Current Accounts in partnership firms?
8] State any one feature of fluctuating capital method.
9] Find out Interest at 5 % p.a. on capital of ₹2,50,000 for 6 months.
10] Give one example for past adjustment.
11] In absence of partnership deeds, the profit or loss of the firm is to be shared
equal. (state true or false)
12] Under Fixed Capital Method the Partners’ Capital Accounts will always show a
debit balance. (state true or false)
13] When a fixed amount is withdrawn during the middle of every month, interest on
the total amount is calculated for 6 months. (state true or false)
14] Profit and Loss appropriation account is merely an extension of the Profit and
Loss Account of a firm. (state true or false)
15] Interest on partners’ capital is debited to Partners’ Capital Accounts. (state true
or false)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 4|Page

PART - B
Two Marks questions:
1] What is partnership?
2] Define Partnership.
3] What is a partnership deed?
4] What is the fixed capital method?
5] What is the fluctuating capital method?
6] State any two differences between fixed and fluctuating capital methods.
7] What is the guarantee of profit to a partner?
8] What do you mean by past adjustments?
9] Name any two methods for calculation of Interest on drawings.
10] When do the Interest on drawings be generally provided to partners?
11] How do you close a profit and loss appropriation account in partnership?
12] State any two special aspects of partnership accounts.

PART - C
Six Marks questions:
Problems on Preparation of P & L Appropriation A/c
1] Shreshtha and Jyeshtha commenced business in partnership on 01.04.2023 with
a capital of `4,00,000 and `3,00,000 respectively agreeing to share profits and
losses in the ratio of 3:2. For the year ending 31.03.2024, they earned the profits
of `66,000 before allowing:
i] Interest on capital at 5% p.a.
ii] Interest on drawings: Shrestha `2,000 and Jyeshtha `1,500
iii] Yearly salary of Shreshtha `6,000 and commission to Jyeshtha `4000.
iv] Their drawings during the year: Shreshtha `40,000 and Jyeshtha
`30,000.
Prepare Profit and Loss Appropriation Account.
(Ans: Profit `24,500)

2] Shivam and Swayam are partners sharing profits in the ratio of 2:1 with capitals
of `2,50,000 and `1,50,000 respectively. Interest on capital is agreed @ 5 % p.a.
Swayam is to be allowed an annual salary of `8,000. During the year 2023-24,
they earned a profits of `30,000. A provision of `2000 is to be made in respect of
commission to the manager. Interest on drawings being; Shivam `2000 and
Swayam `1000.
Prepare Profit and Loss Appropriation Account.
Ans., Profit `3,000

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3] Salim & Khadar are Partners commenced Partnership business on 1.4.2023
sharing profits & losses in the ratio of 3:2 with capitals of `1,00,000 and `80,000
respectively. They earned profits of `25,000 for the year before allowing:
a] Interest on Capitals @ 10% p.a.
b] Interest on drawings: Salim `1,000 & Kadar `800
c] Commission payable to Salim `2000 p.a.
d] Salary payable to Khadar `3000 p.a.
Prepare P & L Appropriation A/c for the year ending 31.03.2024
Ans., profit `3,800

4] Peter & Paul are the partners, sharing profits & losses in the ratio of 2:1 Their
opening capital being `80,000 & `50,000 respectively. They earned a profit of
`20,000 before allowing the following:
a] Interest on capital @ 8% p.a.
b] Interest on drawings: Peter `800, Paul `600
c] Salary to Peter `3,000 p.a.
d] Commission to Paul `2,000 p.a.
Prepare P & L Appropriation A/c
Ans., profit `6,000

5] Shruti and Reshma are partners with Capitals of `3,00,000 and rupees `2,00,000
respectively on 1.4.2023. They agreed to share profits in the ratio of 2:1. For the
year ending 31st March they earned a profit `59,000 before allowing:
i] Interest on capital at 5% per annum.
ii] Interest on drawings Shruti `2500 Reshma `1500.
iii] Partnership salary to Shruti `5000 per annum.
iv] Commission payable to Reshma `500 per month.
Their drawings during the year amounted to Shruti `25000 and Reshma `15000.
prepare a profit and loss appropriation account of the firm.
Ans: profit `27,000

6] Chetan and Devan are partners sharing profits and losses equally with the capitals
of `2,00,000, `1,50,000 respectively on 1.4.2023. Chetan is entitled to a salary of
`10,000 per year. Interest on capital is to be allowed at 6% per annum. Their
drawings during the year were Chetan `12,000 Devan `8,000 interest on the same
being `1,200 and `800 respectively. The profit for the year ended 31st March 2024
amounted to `38,000 before the above adjustments
Prepare Profit and Loss appropriation account
Ans., profit `9,000

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7] Risha and Rakhi are partners in a firm with the capitals of `2,00,000 and
`3,00,000 respectively. As per partnership deed they share profits and losses in
capital ratio. The profit of the firm for the year ended 2023-24 amounted to `33,200
before allowing the following adjustments
i] Salary of `500 per month to Rakhi
ii] Interest on capital at 5% per annum.
iii] Interest on drawings at 6% per annum
During the year
Risha withdrew `7,000 and Rakhi `10,000 for their personal use
Prepare profit and loss appropriation account
Hint : interest is to be calculated for average of 6 months
Ans., profit ` 2,710

8] Sanju and Gulab are partners sharing profits and losses in the ratio 6:4. Their
capitals on 1.4 2023 `2,00,000 and `1,00,000 respectively. They made a profit for
the year ended `89,400 before making the following adjustments:
i] Interest on capital at 8% per annum.
ii] Salary of `1000 per month to each partner
iii] Their drawings during the year `20,000 and `15,000 respectively.
iv] Interest on drawings amounted to `2000 and `1800 respectively.
Prepare a profit and loss appropriation account for the year ended 31st March
2024.
Ans., profit `45,200.

Problems on Calculation of Interest on Drawings

1] Yashasvi and Tapashvi are partners in a firm. During the year ended 31st March
2024 Yashasvi makes the drawings as under Date of Drawings
Amount (`)
01.08.2023 `5,000
31.12.2023 `10,000
31.03.2024 `15,000
Partnership Deed provided that partners are to be charged interest on drawings
@ 12% p.a. Calculate the interest on drawings of Yashasvi under Product Method.
Ans., `700

2] Sahana and Saniya are partners in the firm. Sahana’s drawings for the year 2023-
24 are given as under:
`4,000 on 01.06.2023
`6,000 on 30.09.2023
`2,000 on 30.11.2023

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`3,000 on 01.01.2024
Calculate interest on Sahana’s drawings at 8% p.a. for the year ending 31.03.2024,
under product method.
Ans., ` 620
3] Murthy and Patil are partners in a firm sharing profits and losses in the ratio of
3:2. Murthy withdraws `4,000 quarterly.
i] At the beginning of each quarter
ii] At the end of each quarter
Calculate the interest on drawings at 9% p.a. for the year ending
31.03.2024, under product method.
Ans., I) ` 900 ii) ` 540

4] Calculate interest on drawings of Mr. Kamalakar @10% p.a if he withdrew `1,000

per month by the short cut method:
i] At the beginning of each month
ii] At the end of each month.
Ans ., (i) `650, (ii) `550

5] Calculate interest on drawings of Purohit @10%p.a. if he withdrew `48,000 in a

year evenly.
i] At the beginning of each quarter.
ii] At the end of each quarter.
Ans., i) `3,000, ii) `1,800

6] Vishnu a partner withdrew the following amounts during the year ended March
31st 2024
May 1st 2023 `12000
July 31st 2023 `6000
October 1st 2023 `9000
Calculate interest at 9% per annum on his drawings.
Ans., `1,755

7] Mr. Poorna is a partner in a firm. He withdrew the following amounts during the
year ended 31.3.2024
November 30th 2023 `12000
January 1st 2024 `8000
March 1st 2024 `7000
Interest is to be charged at 6 % per annum. Calculate interest on drawings.
Ans., `395

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8] Anil and Charan are partners sharing profits and losses equally. Anil withdrew
the following amounts on :-
July 1st 2023 `5000
September 1st 2023 `8000
January 1st 2024 `4000
Accounts are closed on 31st March of every year. calculate interest on Anil's
drawings at 7% per annum
Ans., `659.16 or `659

Problems on Guarantee of a Profit to a partner

1] Sachin and Rahul were partners in a firm sharing profits and losses in the ratio of
3:2. They admit Dhoni for 1/6th share in profits and guaranteed that his share of
profits will not be less than `25,000. Total profits of the firm were `90,000.
Calculate share of profits for each partner when the Guarantee is given by a firm.
Prepare Profit and Loss Appropriation Account.
( Ans: Deficiency borne by Sachin, `6,000 and Rahul `4,000)

2] Roja and Usha were partners in a firm sharing profits and losses in the ratio of 3:2.
They admit Sahana for 1/6th share in profits and guaranteed that his share of
profits will not be less than `25,000. Total profits of the firm was `90,000.
Calculate share of profits for each partner when the Guarantee is given by Roja.
Prepare Profit and Loss Appropriation Account.
( Ans: Deficiency borne by Roja `10,000 )

3] Sandya and Neela were partners in a firm sharing profits and losses in the ratio of
3:2. They admit Lalitha for 1/6th share in profits and guaranteed that his share of
profits will not be less than `25,000.
Total profits of the firm were `90,000. Calculate share of profits for each partner
when: Guarantee is given by Sandya and Neela equally.
Prepare Profit and Loss Appropriation account.
( Ans: Deficiency borne by Sandya and Neela each `5,000)

4] Aarav and Neerav share profits and losses in the ratio of 2:1. They admit Sourav
as a partner with ¼ share in profits with a guarantee that his share of profit shall
be at least `25,000. The net profit of the firm for the year ending March 31 st 2016
was `80,000.
Prepare Profit and Loss Appropriation Account.
( Ans: Deficiency Received from Aarav ` 3,333, Neerav `1,667)

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5] Charan and Sharan share profits and losses in the ratio of 3:2. They admit Sachin
into their firm for 1/6 share in profits. Charan personally guaranteed that Sachin’s
share of profit, after charging interest on capital @ 10% p.a. would not be less than
`15,000 in any year. The capital provided was as follows: Charan `1,25,000,
Sharan `1,00,000 and Sachin `75,000. The profit for the year ending March 31st
2016 amounted to `75,000 before providing interest on capital.
Show the Profit and Loss Appropriation A/c if the new profit sharing ratio is 3:2:1
( Ans: Deficiency Received from Charan `7,500 )

6] Sandesh and Kailesh share profits and losses in the ratio of 2:1. From April 01,
2015 they admit Basavesh into their firm who is to be given a share of 1/10 of the
profits with a guaranteed minimum of `50,000. Sandesh and Kailesh continue to
share profits as before but agree to bear any deficiency on account of guarantee to
Basavesh in the ratio of 3:2 respectively. The profits of the firm for the year ending
March 31st, 2016 amounted to `2,40,000.
Prepare Profit and Loss Appropriation Account.
( Ans: Deficiency from Sandesh `15,600, Kailesh `10,400

Key answer for short questions :

MCQ
1] c 2] d 3] b 4] c 5] c 6] c 7] d 8] b 9] d 10] c
11] b 12] b 13] d 14] b 15] b

FILL IN THE BLANKS

1] Section 4 2] Legal 3] 2 4] agreement
5] Writing 6] Trade or business 7] Agent
8] Unlimited 9] 6% 10] Fixed capital
11] Changes 12] P&L A/C
13] Interest on capital account14] P&L appropriation account
15] Transferring profit in appropriation account
MATCH THE FOLLOWING a] iii b] i c] iv d] v e] ii.
TRUE OR FALSE 1] T 2] F 3] T 4] T 5] F

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CHAPTER - 02

RECONSTITUTION OF A PARTNERSHIP FIRM

ADMISSION OF A PARTNER

PART - A
One Mark Questions:
I] Multiple Choice Questions:
1] At the time of admission of a new partner, general reserve appearing in the old
balance sheet is transferred to:
a] All Partners Capital Account
b] New Partner’s Capital Account
c] Old Partners Capital Account
d] Not to be transferred

2] A, B and C are partners in a firm. If D is admitted as a new partner:

a] Old firm is dissolved
b] Old firm and old partnership are dissolved
c] Old partnership is reconstituted
d] Old partnership dissolved

3] On the admission of a new partner, increase in the value of asset is credited to:
a] Profit and Loss Adjustment(Revaluation) Account
b] Asset account
c] Old Partners Capital account
d] New partner’s capital account

4] At the time of admission of a partner, undistributed profits appeared in the

balance sheet of the old firm is transferred to the capital accounts of:
a] Old partners in old profit sharing ratio
b] Old partners in new profit sharing ratio
c] All the partners in new profit sharing ratio
d] All partners capital account equally

5] A and B are partners with capitals of `45,000 each. C is admitted for 1/3rd share
and he brings in `60,000 as his capital. Hidden goodwill is,
a] `60,000
b] `30,000
c] `90,000
d] `45,000

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6] Which of the following are treated as reconstitution of a Partnership Firm?
a] Admission of a partner
b] Change in profit sharing ratio
c] Retirement of a partner
d] All of the above

7] Profit or Loss on revaluation is shared among the partners in the:

a] Old profit sharing ratio
b] New profit sharing ratio
c] Capital ratio
d] Equal ratio

8] Assets and Liabilities are recorded in Balance Sheet after the admission of a
partner at:
a] Original value
b] Revalued value
c] Realisable value
d] Book value as appeared in old balance sheet

9] Old Profit Sharing Ratio - New Profit Sharing Ratio is = _____________

a] Sacrificing ratio
b] Gaining ratio
c] Both the above
d] None of the above

10] In the absence of an agreement to the contrary, it is implied that old partners will
contribute to new partner’s share of profit in the ratio of:
a] Capital
b] Old profit sharing ratio
c] Sacrificing ratio
d] Equally

11] The balance of reserves and other accumulated profits at the time of admission of
a new partner are transferred to:
a] All partners in the new ratio
b] Old partners in the new ratio
c] Old partners in the old ratio
d] Old partners in the sacrificing ratio

12] Revaluation Account is debited for the:

a] increase in provision for doubtful debts
b] increase in the value of building
c] decrease in the amount of creditors
d] transfer of loss on revaluation

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13] A and B are partners sharing profits in the ratio of 3:1. C is admitted into
partnership for 1/4th share. The sacrificing ratio of A and B will be:
a] Equal
b] 3:1
c] 2:1
d] 3:2

14] On the admission of new partner, increase in the value of assets is debited to:
a] Profit and Loss adjustment account
b] Assets account
c] Old partners capital account
d] New partner’s capital account

15] A and B are partners sharing profits in the ratio of 3:1. They admit C for
¼th share in the future profits. The new profit sharing ratio will be:
9 3 4
a] A 16
, B 16
, C 16
8 4 4
b] A , B ,C
16 16 16
10 2 4
c] A 16
, B 16, C16
8 9 10
d] A 16
, B16 , C16

16] X and Y share profits in the ratio of 3:2. Z was admitted as a partner who gets
1/5th share. New profit sharing ratio, if Z acquires 3/20 from X and 1/20 from Y
would be:
a] 9:7:4
b] 8:8:4
c] 6:10:4
d] 10:6:4

17] Asha and Nisha are partners sharing profit in the ratio of 2:1. Asha’s son Ashish
was admitted for 1/4 share of which 1/8 was gifted by Asha to her son. The
remaining was contributed by Nisha. Goodwill of the firm is valued at `40,000.
How much of the goodwill will be credited to the old partners capital account?
a] `2,500 each
b] `5,000 each
c] `20,000 each
d] ` 25,000 each.

18] If average profit is `15,000, Capital employed is `1,00,000 and Normal rate of
return is 10%, then the value of goodwill under capitalization method is;
a] `25,000
b] ` 50,000
c] ` 75,000
d] ` 10,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 13 | P a g e

II. Fill in The Blanks:

1] _______ ratio is used to distribute accumulated profits and losses at the time of
admission of a new partner.
2] Profit or loss on revaluation is shared among the old partners in ____ ratio
3] Old ratio – New ratio = ________
4] Accumulated losses are transferred to the capital accounts of the old partners at
the time of admission in their ____ ratio.
5] General reserve is to be transferred to ______ accounts at the time of admission of
a new partner.
6] Goodwill brought in by new partner in cash is to be distributed among old partners
in _______ ratio.
7] If the amount brought by new partner is more than his share in capital, the excess
is known as _____.
8] _______ Account is debited for the increase in the value of an asset.
9] Unrecorded asset is to be credited to ______ account.
10] Due to change in profit sharing ratio, some partners will gain in future profits while
others will ______.
11] Goodwill is an _______ asset.
12] ______ account is credited for cash brought in by new partner for his share of
goodwill.
13] _____ ratio is required for sharing future profits and also for adjustment of capitals.

III. Match the following type questions:

A B
a Sacrifice ratio i Old share – share sacrificed
b Goodwill ii Share in future profits
c New share iii Old share – New share
d Average profit method iv AS-26
e Right of new partner v Intangible asset
f Shortage of funds vi Valuation of Goodwill
g Accounting for Intangible asset vii Reason for admission

IV. Very short answer questions:

1] What is Partnership?
2] What do you mean by reconstitution of a Partnership Firm?
3] State any one reason for admission of a new partner.
4] State any one right acquired by a newly admitted partner.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 14 | P a g e

5] Why the NPSR is required at the time of admission of a partner?
6] What is Goodwill?
7] State any one factor affecting the value of goodwill.
8] What is normal profit?
9] State any one method of valuation of goodwill.
10] Give the formula for sacrifice ratio.
11] Which account is to be debited to record the increase in the value of an asset?
12] What is Revaluation Account?
13] Which account will be credited when there is a loss on revaluation?
14] Which account will be debited when the cash is brought by a new partner for his
share of goodwill?
15] What is hidden goodwill?

State True or False in following cases:

16] Goodwill brought in cash by new partner is distributed among old partner in their
Sacrificing ratio.
17] In case of admission of a partner, profit or loss on revaluation is transferred to
Old Partners’ Capital Accounts.
18] Accumulated profit is transferred to all partners’ capital Accounts including new
partner.
19] The debit balance of Profit and Loss Account shown in the assets side of the
Balance Sheet will be debited to Old Partners Capital Accounts.
20] Increase in the value of an asset is credited to Revaluation Account
21] The traditional name of Revaluation A/c is ‘Profit and Loss Adjustment A/c’.
22] Goodwill is an intangible asset.
23] Decrease in the value of liability is debited to Revaluation Account.
24] Sacrifice ratio is required to distribute the cash brought by new partner among
old partners for his share of goodwill.
25] Share sacrificed = Old share – New share.

PART - C
Problems on calculation of NPSR
1] Anita and Kavita are partners sharing profits in the ratio of 3:2. They admitted
Sunita as a new partner for 1/5th share in future profits of the firm. Calculate new
profit sharing ratio of Anita, Kavita and Sunita. (Ans: 12:8:5)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 15 | P a g e

2] Sudeep and Sandeep are partners in a firm sharing profits and losses in the ratio
of 3:2. They admit Dilip into the partnership for 1/6th share in the profits. Calculate
the new profit sharing ratio. (Ans: 3:2:1)

3] Ajay, Praksh and Santosh are partners sharing profits and losses in the proportion
of 2/8, 3/8 and 3/8. They admit Suresh for 1/4th share. Calculate the new profit
sharing ratio of all partners. (Ans: 6:9:9:8)

4] Ram and Rahim are partners sharing profits in the ratio of 3:2. They admit Rakshit
as a new partner for 1/5th share in the future profits of the firm, which he gets
equally from Ram and Rahim. Calculate new profit sharing ratio of Ram, Rahim
and Rakshit. (Ans: 5:3:2)

5] Vani and Rani are partners sharing profits and losses in the ratio of 3:2. They
admitted Mayuri as a new partner 3/10 share, which she acquired 2/10 from Vani
and 1/10 from Rani. Calculate the new profit sharing ratio. (Ans: 4:3:3)

6] Ravi and Shankar are partners sharing profits and losses in the ratio of 7:3. They
admit Shiva into the partnership. Ravi surrenders 1/2 of his share and Shankar
1/4th of his share in favour of Shiva. Calculate new profit sharing ratio of Ravi,
Shankar and Shiva. (Ans: 14:9:17)

7] Rajesh and Rakesh are partners in a firm sharing profits and losses in the ratio of
3:2. They admit Ramesh as a new partner. Rajesh agrees to surrender 1/4th of his
share and Rakesh agrees to surrender 1/3rd of his share in favour of Ramesh.
Calculate new profit sharing ratio of Rajesh, Rakesh and Ramesh. (Ans: 27:16:17)

8] Amar and Akbar are partners sharing profits and losses in the ratio of 5:3. They
admit Anthoni into the partnership and offer him 1/6th share which he acquired in
the ratio of 3:1 from the old partners. Calculate the new profit sharing ratio.
(Ans: 12:8:4 or 3:2:1)

9] Suresh and Shankar are partners sharing profits and losses in the ratio of 2:1.
They admit Jagadish into the partnership giving him 1/5th share which he acquired
from Suresh and Shankar in 1:2 ratio. Calculate new profit sharing ratio.
(Ans: 9:3:3 or 3:1:1)

10] Sujata and Sangeeta are partners in a firm sharing profits in ratio of 4:1. They
admit Revati as a new partner for 1/4th share in future profits, which she acquired
wholly from Sujata. Calculate the new profit sharing ratio of the all partners.
(Ans: 11:4:5)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 16 | P a g e

Six Marks Problems on sacrifice ratio

1] Anil and Sunil are partners sharing profits and losses in the ratio of 4:3. They admit
Akash into partnership. The new profit sharing ratio is agreed at 7:4:3 respectively.
Find out the sacrifice ratio of old partners. (Ans: 1:2)

2] Sharat and Bharat are partners sharing profits and losses in the ratio of 3:2. They
admit Kamat into partnership and the new ratio was agreed to be 5:4:3. Calculate
the sacrifice ratio. (Ans: 11:4)

3] Avinash and Bhima are partners in a firm sharing profits in the ratio of 5:3. They
admit Chandru as a new partner for 1/7th share in the future profit. The new profit
sharing ratio will be 4:2:1. Calculate the sacrifice ratio of Avinash and Bhima.
(Ans: 3:5)

4] Surekha and Sunita are partners sharing profits and losses in the ration of 5:3.
They admit Savita into the partnership. The new profit sharing ratio is 3:2:1
respectively. Find out the sacrifice ratio of the old partners. (Ans: 3:1)

5] Mohan and Madan are partners sharing profits and losses in the ratio of 3:2. They
admit Murali into the partnership. The new profit sharing ratio is 4:3:3. Calculate
the sacrifice ratio of Mohan and Madan. (Ans: 2:1)

6] Radha and Rukmini are partners in a firm sharing profits and losses in the ratio
of 3:2. They admit Ranjeeta as a new partner for 1/4th share. The new profit sharing
ratio between Radha and Rukmini will be 2:1. Calculate the sacrifice ratio.
(Ans: 2:3)

7] Amir and Salman are partners in a firm sharing profits and losses in the ratio of
3:2. They admit Shaharukh into the partnership. Amir agrees to surrender 1/2nd
of his share and Salman agrees to surrender 1/4th of his share in favour of
Shaharukh. Calculate the sacrifice ratio of Amir and Salman. (Ans: 3:1)

8] Chhaya and Maya are partners sharing profits and losses equally. They admit
Shreya into the partnership. Chhaya agrees to surrender 1/3rd of her share and
Maya agrees to surrender 1/4th of her share to Shreya. Calculate the sacrifice ratio.
(Ans: 4:3)

9] Pujari and Purohit are partners sharing profits and losses in the ratio of 2:1. They
admit Pandit into the partnership and gave him 1/6th share. Pujari and Purohit
agreed to share the remaining share in the ratio of 3:2. Calculate the sacrifice ratio.
(Ans: 5:0 or 1:0)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 17 | P a g e

PART - D
12 Marks Problems :
I] When new partner brings cash for his share of goodwill
1] Maya and Chhaya are partners sharing profits and losses in the ratio of 2:1. Their
Balance Sheet as on 31.3.2024 was as follows:
Balance Sheet as on 31.03.2024
Liabilities ` Assets `
Creditors 20,000 Cash in Hand 8,000
Bills Payable 7,000 Stock 15,000
Reserve Fund 18,000 Debtors 20,000
Capitals: Machinery 30,000
Maya 60,000 Buildings 60,000
Chhaya 40,000 Investments 12,000
Total 145,000 Total 145,000

On 01.04.2024, Shreya is admitted into partnership on the following conditions:

a] Shreya should bring in cash `25,000 as her capital and `15,000 as goodwill
for 1/5th share in future profits. (as per AS-26)
b] Appreciate Buildings at 20% and Stock is revalued at `12,000.
c] Maintain Provision for doubtful debts at 5% on Debtors.
d] Outstanding salary `2,000.
Prepare :
i] Revaluation Account.
ii] Partners’ Capital Accounts &
iii] New Balance Sheet of the firm.
(Ans: Revaluation profit-`6,000 Capital Account Balances:Maya-86,000,
Chhaya-53,000 & Shreya-25,000 New B/S total : `1,93,000)

2] Rekha and Surekha are partners in a firm sharing profits and losses in the ratio
of 3:2. Their balance sheet is given below:
Balance Sheet as on 31.03.2024
Liabilities ` Assets `
Creditors 18,000 Cash at Bank 20,000
O/s Salary 12,000 Sundry debtors 25,000
Reserve Fund 10,000 Less: PDD 2,000 23,000
Capitals: Stock 7,000
Rekha 60,000 Furniture 25,000
Surekha 40,000 100,000 Buildings 50,000
P & L Account 15,000
Total 1,40,000 Total 1,40,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 18 | P a g e

On 01.04.2024, they admit Chandrika as new partner into partnership on the
following terms:
a] She brings in `40,000 as capital and `20,000 towards goodwill for 1/4th
share in future profits. (as per AS26)
b] Depreciate Furniture by 10% and buildings are revalued at `45,000.
c] PDD is increased to `3,500.
d] Prepaid insurance `2,000.
Prepare:
i] Revaluation Account.
ii] Partners’ Capital Accounts &
iii] New Balance sheet as on 01.04.2024.
(Ans: Revaluation Loss -`7,000 Capital Account Balances:Rekha-`64,800,
Surekha-`43,200 & Chandrika-`40,000 New B/S total: `1,78,000)

3] Suresh and Mahesh are partners in a firm sharing profits and losses equally.
Their balance sheet as on 31.03.2024 was as follows.
Balance Sheet as on 31.03.2024
Liabilities ` Assets `
Creditors 40,000 Cash at Bank 10,000
Bills Payable 50,000 Stock 25,000
Reserve Fund 30,000 Debtors 40,000
Profit and Loss A/c 10,000 Less: PDD 2,000 38,000
Capital Accounts: Machinery 20,000
Suresh 40,000 Buildings 92,000
Mahesh 30,000 70,000 Patents 15,000
Total 2,00,000 Total 2,00,000

On 01.04.2024, they admit Ganesh as a new partner for 1/4thshare in the future
profits on the following terms:
a] Ganesh should bring in cash `50,000 as his capital and `20,000 towards
goodwill and goodwill amount is withdrawn by old partners (as per AS26)
b] Depreciate Machinery by 10%.
c] Increase provision for doubtful debts by `4,000.
d] Buildings are revalued at `1,00,000.
Prepare:
i] Revaluation Account
ii] Partners’ Capital Accounts &
iii] New Balance Sheet of the firm.
(Ans: Revaluation profit-`2,000 Capital Account Balances:Suresh-`61,000,
Mahesh-`51,000 & Ganesh-`50,000 New B/S total: `2,52,000)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 19 | P a g e

4] Amith and Sumit are partners in a firm sharing profits and losses in the ratio of
3:2. Their balance sheet as on 31.03.2024 stood as follows:
Balance Sheet as on 31.03.2024
Liabilities ` Assets `
Creditors 40,000 Cash at Bank 21,000
General Reserve 5,000 Bills Receivable 3,000
Capital Accounts: Debtors 18,000
Amit 30,000 Less: PDD 1,000 17,000
Sumit 15,000 Stock 20,000
Buildings 25,000
Machinery 4,000
Total 90,000 Total 90,000

On 01.04.2024, they admit Ranjit as a new partner and offered him 1/5th share
in the future profits on the following terms:
a] He has to bring in `10,000 as his capital and `5,000 towards goodwill. Half
of the goodwill amount is withdrawn by old partners (as per AS26)
b] Stock is reduced by `2,000 and Appreciate buildings by 20%.
c] Maintain 5% PDD on debtors.
d] Provide for outstanding repair bills `100.
Prepare :
i] Revaluation Account
ii] Partners’ Capital Accounts &
iii] New Balance Sheet of the firm.
(Ans: Revaluation profit-`3,000 Capital Account Balances:Amit-`36,300,
Sumit-`19,200 & Ranjit-`10,000 New B/S total: `1,05,600)

5] Anita and Vanita are partners in a firm sharing profits and losses in the ratio of
3:2. Their balance sheet as on 31.03.2024 was as follows.
Balance Sheet as on 31.03.2024
Liabilities ` Assets `
Creditors 20,000 Cash in Hand 5,000
Bills Payable 6,000 Debtors 20,000
Reserve Fund 4,000 Less: PDD 2,000 18,000
Capitals: Stock 17,000
Anita 40,000 Buildings 35,000
Vanita 30,000 70,000 Furniture 25,000
Total 1,00,000 Total 1,00,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 20 | P a g e

On 01.04.2024, Sunita is admitted into partnership on the following terms:
a] She brings `25,000 as capital and `10,000 towards goodwill for 1/6th share
in the future profits. Goodwill amount is withdrawn by old partners
(as per AS-26)
b] Depreciate Furniture at 10% and appreciate Buildings by 20%.
c] Provision for doubtful debts is no longer required.
d] Provide `1,000 for Repair charges.
Prepare :
i] Revaluation Account
ii] Partners’ Capital Accounts &
iii] Balance Sheet of the firm after admission.
(Ans: Revaluation profit-`5,500 Capital Account Balances:Anita-`45,700,
Vanita-`33,800 & Sunita-`25,000 New B/S total: `1,31,500)

6] Tarun and Harish are partners in a firm. Their balance sheet as on 31.03.2024
was as follows:
Balance Sheet as on 31.03.2024
Liabilities ` Assets `
Creditors 1,50,000 Cash at Bank 50,000
General Reserve 50,000 Stock 50,000
Furniture 1,20,000
Capitals: Debtors 40,000
Tarun 1,20,000 Buildings 1,00,000
Harish 80,000 Investments 40,000
Total 4,00,000 Total 4,00,000

On 01.04.2024 Krishna is admitted into the partnership on the following terms:

a] He brings in `60,000 as his capital and `20,000 towards goodwill for 1/4th
share in the future profits. Goodwill is to be withdrawn by the Old Partners.
(as per AS26)
b] Depreciate Furniture by 10% and appreciate Buildings by `22,000.
c] Investments are to be revalued at `50,000.
d] Creditors were unrecorded to the extent of `5,000
Prepare :
i] Revaluation Account
ii] Partners’ Capital Accounts &
iii] New Balance Sheet of the firm.
(Ans: Revaluation profit-`15,000 Capital Account Balances: Tarun - `1,52,500,
Harish-`1,12,500 & Krishna-`60,000 New B/S total: `4,80,000)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 21 | P a g e

7] Pradeep and Sudeep are partners in a firm sharing profits and losses in the ratio
of 3:2. Their balance sheet as on 31.03.2024 was as follows:
Balance Sheet as on 31.03.2024
Liabilities ` Assets `
Creditors 40,000 Cash 25,000
Bills Payable 20,000 Machinery 60,000
General Reserve 25,000 Stock 25,000
Capitals: Debtors 23,000
Pradeep 60,000 Less: PDD 3,000 20,000
Sudeep 40,000 100,000 Buildings 50,000
P & L Account 5,000
Total 1,85,000 Total 1,85,000

On 01.04.2024, they admit Sandeep as new partner and offer him 1/5th share in
the future profits on the following terms:
a] Sandeep has to bring in `30,000 as his capital and `10,000 towards
goodwill. Goodwill amount is withdrawn by the old partners.(as per AS26)
b] Depreciate Machinery by 5%.
c] Appreciate buildings by 10%.
d] PDD is reduced to `2,000 and Stock is to be revalued at `27,000.
Prepare :
i] Revaluation Account
ii] Partners’ Capital Account &
iii] New Balance Sheet of the firm.
(Ans: Revaluation profit-`5,000 Capital Account Balances:Pradeep-`75,000,
Sudeep-`50,000 & Sandeep-`30,000 New B/S total: `2,15,000)

8] Narayan and Gopal are equal partners. Their Balance Sheet as on 31.03.2024
was as follows:
Balance Sheet as on 31.03.2024
Liabilities ` Assets `
Bills Payable 6,000 Cash 2,000
Sundry Creditors 12,000 Stock 23,000
Reserve Fund 2,000 Buildings 40,000
Capitals Accounts: Sundry debtors 25,000
Narayan 40,000 Less: PDD 5,000 20,000
Gopal 30,000 70,000 Furniture 5,000
Total 90,000 Total 90,000
On 01.04.2024, they admit Vinayak as a new partner and offered him 1/4th share
in the profit on the following terms:

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 22 | P a g e

a] He should bring in `30,000 as capital and `20,000 towards goodwill.
b] Half of the goodwill amount is withdrawn by the old partners.(as per AS26)
c] Stock and Furniture to be depreciated by 10% each.
d] PDD is reduced by `3,000 and `200 to be provided for electricity charges
Prepare :
i] Revaluation Account
ii] Partners’ Capital Accounts &
iii] New Balance Sheet of the firm.
(Ans: Revaluation profit/Loss- Nil Capital Account Balances:Narayan-
`46,000, Gopal-`36,000 & Vinayak-`30,000 New B/S total: `1,30,200)

II. When goodwill of the firm is valued

9] Sharavati and Netravati are partners in a firm sharing profits and losses in the
ratio of 3:2. Their Balance Sheet as on 31.03.2024 stood as follows:
Balance Sheet as on 31.03.2024
Liabilities ` Assets `
Bills Payable 14,000 Cash 15,000
Creditors 16,000 Buildings 25,000
General Reserve 5,000 Patents 6,000
Capitals: Machinery 35,000
Sharavati 50,000 Debtors 20,000
Netravati 20,000 Less: Provisions 1000 19,000
Stock 5,000
Total 105,000 Total 105,000

On 01.04.2024, Kaveri is admitted into the partnership for 1/6th share in future
profits on the following terms:
a] Kaveri pays `20,000 as capital. The Goodwill of the firm is valued at `24,000
(as per AS 26)
b] Buildings are appreciated by `5,000
c] Machinery is depreciated by 20%.
d] Provision for doubtful debts is increased by `1,000.
Prepare :
i] Revaluation Account
ii] Partners’ Capital Accounts &
iii] Balance Sheet of the firm after admission.
(Ans : Revaluation Loss- `3,000 Capital Account Balances:Sharavati-`53,600,
Netravati-`22,400 & Kaveri-`16,000 New B/S total: `1,22,000)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 23 | P a g e

10] Malaprabha, Ghataprabha and Hiranyakeshi are partners in a firm sharing
profits and losses in the ratio of 2:1:1. Their Balance Sheet as on 31.03.2024 was
as follows:
Balance Sheet as on 31.03.2024
Liabilities ` Assets `
Creditors 1,00,000 Cash at Bank 17,000
Reserve fund 32,000 Bills Receivable 19,000
Bank OD 8,000 Debtors 1,20,000
Capitals: Less: PDD 6,000 1,14,000
Malaprabha 40,000 Stock 80,000
Ghataprabha 50,000 Buildings 60,000
Hiranyakeshi 60,000
Total 2,90,000 Total 2,90,000

On 01.04.2024, they admit Krishna into the partnership for 1/5th share in future
profits on the following terms:
a] Krishna brings `50,000 as her capital.
b] Goodwill of the firm is valued at `60,000 (as per AS-26)
c] Reduce Stock by 10% and appreciate Buildings to `70,000.
d] Provision for doubtful debts decreased by `2,000.
Prepare :
i] Revaluation Account
ii] Partners’ Capital Accounts &.
iii] New Balance Sheet of the new firm.
(Ans : Revaluation profit- `4,000 Capital Account Balances:Malaprabha-`64,000,
Ghataprabha-`62,000, Hiranyakeshi -`72,000 & Krishna-`38,000 New B/S total: `3,44,000)

11] Arati and Bharati are partners sharing profits and losses in the ratio 2:1. Their
Balance Sheet as on 31.03.2024 was as follows:
Balance Sheet as on 31.03.2024
Liabilities ` Assets `
Creditors 13,000 Cash in Hand 10,000
Bills Payable 8,000 Debtors 6,000
Reserve Fund 9,000 Stock 10,000
Capitals: Furniture 4,000
Arati 20,000 Buildings 40,000
Bharati 20,000 40,000
Total 70,000 Total 70,000
On 01.04.2024, they admit Jayanti into partnership giving her 1/5th share in the
future profits on the following terms:

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 24 | P a g e

a] The new partner should bring `25,000 as her capital.
b] The Goodwill of the firm valued at `30,000. (as per AS26)
c] Value of Buildings is to be appreciated by `7,000 and Furniture to be
depreciated by `1,000
d] Stock is valued at 10% less than the book value and there is an outstanding
printing bill for `500
Prepare :
i] Revaluation Account
ii] Partners’ Capital Accounts &.
iii] Balance Sheet of the new firm.
(Ans : Revaluation profit- `4,500 Capital Account Balances:Arati-`33,000,
Bharati - `26,500 Jayanti-`19,000
New B/S total: `1,00,000)

12] Ramya and Rakshita are partners sharing profits and losses in the proportion of
3/5 and 2/5. Their Balance Sheet as on 31.03.2024 was as follows:
Balance Sheet as on 31.03.2024
Liabilities ` Assets `
Creditors 75,000 Cash at Bank 19,000
Reserve fund 20,000 Stock 39,000
P & L Account 5,000 Debtors 60,000
Capitals: Less: PDD 3,000 57,000
Ramya 60,000 Furniture 10,000
Rakshita 30,000 Buildings 40,000
Machinery 25,000
Total 1,90,000 Total 1,90,000

On 01.04.2024, Rachita is admitted into partnership on the following terms:

a] She should bring `40,000 as capital for 1/6th share and goodwill of the firm
is valued at `24,000 (as per AS26)
b] Depreciate Furniture by 10%.
c] Appreciate Buildings by 20%.
d] PDD is increased by `2,000.
e] Creditors were valued at `77,000, as one bill for goods purchased have been
omitted to record in books.
Prepare :
i] Revaluation Account.
ii] Partners’ Capital Accounts &.
iii] New Balance Sheet of the firm.
(Ans : Revaluation profit- `3,000 Capital Account Balances:Ramya-`79,200,
Rakshita-`42,800 Rachita- `36,000 New B/S total: `2,35,000)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 25 | P a g e

II. Capitals Adjustments Problems:
13] Mahesh and Suresh are equal partners in a firm. Their Balance Sheet as on
31.03.2024 stood as follows:
Balance Sheet as on 31.03.2024
Liabilities ` Assets `
Creditors 40,000 Stock 39,000
Bank Loan 8,000 Debtors 32,000
Less: PDD 2,000 30,000
Capitals: Land & Buildings 40,000
Mahesh 80,000 Machinery 36,000
Suresh 40,000 1,20,000 Motor Car 8,000
Cash at Bank 15,000
Total 1,68,000 Total 1,68,000
On 01.04.2024, Rakesh is admitted into partnership for 1/5th share in profits on
the following terms:
a] Rakesh should bring `26,000 as capital.
b] Goodwill of the firm is valued at `10,000 (as per AS 26)
c] Motor car and Machinery are to be depreciated by 20% and `3,800
respectively.
d] Prepaid rent `600.
e] Provision for doubtful debts is to be maintained at 10%.
f] The Capital Accounts of all the partners are to be adjusted in their new profit
sharing ratio 2:2:1, based on Chandra’s Capital after adjusting goodwill
(Adjustments are to be made in cash)
g] Sacrifice ratio of old partners is 1:1
Prepare :
i] Revaluation Account
ii] Partners’ Capital Account &
iii] New Balance Sheet of the firm
(Ans : Revaluation loss- `6,000 Capital Account Balances:Mahesh-`48,000,
Suresh-`48,000 Rakesh- `24,000 New B/S total: `1,68,000)

14] Ram and Laxman are partners in a firm. Following is their Balance Sheet as on
31.03.2024
Balance Sheet as on 31.03.2024
Liabilities ` Assets `
Creditors 16,000 Cash in Hand 10,000
Bills Payable 4,000 Stock 15,000
Debtors 16,000
Capitals: Less: Provision 500 15,500
Ram 40,000 Furniture 4,500
Laxman 20,000 60,000 Plant & Machinery 20,000
Land & Building 15,000
Total 80,000 Total 80,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 26 | P a g e

On 01.04.2024, Bharat is admitted into partnership on the following terms:
a] Bharat should bring `16,000 as capital.
b] Goodwill of the firm is valued at `6,000.(as per AS26)
c] Provision for doubtful debts is to be increased by `1,000.
d] Machinery is to be depreciated by 10%.
e] Land & Buildings are to be increased by `5,000.
f] Capital Accounts of partners are to be adjusted in their new profit sharing
ratio 3:2:1, based on Bharat’s Capital after adjusting goodwill.
(Adjustments to be made in cash)
g] Sacrifice ratio of old partners is 0:1
Prepare :
i] Revaluation Account
ii] Cash Account
iii] Partners’ Capital Accounts &
iv] New Balance Sheet of the firm.
(Ans : Revaluation profit- `2,000 Cash A/c Balance-`38,000 Capital
Account Balances : Ram-`45,000, Laxman-`30,000 Bharat- `15,000 New
B/S total: `1,10,000)

15] Bhanu and Bhoomi are partners in a firm sharing profit & loss in the ratio of 2:1.
Following is their Balance Sheet as on 31.03.2024.
Balance Sheet as on 31.03.2024
Liabilities ` Assets `
Creditors 20,000 Cash in Hand 37,000
Bills Payable 4,000 Stock 25,000
General Reserve 6,000 Buildings 40,000
Capitals: Debtors 17,000
Bhanu 80,000 Less: PDD 1,500 15,500
Bhoomi 40,000 Furniture 14,500
Plant & Machinery 18,000
Total 1,50,000 Total 1,50,000

On 01.04.2024, Akash is admitted into partnership on the following terms:

a] Akash should bring `29,000 as capital.
b] Goodwill of the firm is valued at `24,000.
c] Stock is to be increased by 10%.
d] Provision for doubtful debts is increased to `2,500.
e] Capital accounts of partners are to be adjusted in their new profit sharing
ratio 3:2:1, based on Akash’s capital after adjusting goodwill
(Adjustments to be made in cash).
f] Sacrifice ratio of old partners is 1:0

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 27 | P a g e

Prepare :
i] Revaluation Account.
ii] Partners’ Capital Accounts &
iii] Balance sheet of the new firm.
(Ans : Revaluation profit- `1,500 Capital Account Balances:Bhanu-`75,000,
Bhoomi-`50,000 Akash- `25,000 New B/S total: `1,74,000)

Key Answers
I.Multiple II. Fill in Blanks III. IV. True or
Choice Matching False
Q.No Ans Q.No Ans Q.No Ans Q.No Ans
1 c 1 Old a iii 16 True
2 c 2 Old b v 17 True
3 a 3 Sacrifice Ratio c i 18 False
4 a 4 Old d vi 19 True
5 b 5 Old partners capital e ii 20 True
6 d 6 Sacrifice f vii 21 True
7 a 7 Hidden goodwill g iv 22 True
8 b 8 Asset 23 False
9 a 9 Revaluation 24 true
10 b 10 Loose 25 True
11 c 11 Intangible
12 a 12 New partner’s capital
13 b 13 New profit sharing
14 b
15 a
16 a
17 b
18 b

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 28 | P a g e

CHAPTER - 03

RECONSTITUTION OF A PARTNERSHIP FIRM

RETIREMENT / DEATH OF A PARTNER

PART - A
One Mark Questions:
I] Multiple Choice Questions:
1] Abhishek, Rajat and Vivek are partners sharing profits in the ratio of 5:3:2. If
Vivek retires, the New Profit Sharing Ratio between Abhishek and Rajat will be–
a] 3:2
b] 5:3
c] 5:2
d] 1:1
2] The old profit sharing ratio among Rajendra, Satish and Tejpal were 2:2:1. The
New Profit Sharing Ratio after Satish’s retirement is 3:2. The gaining ratio is;
a] 3:2
b] 2:1
c] 1:1
d] 2:2
3] Anand, Bahadur and Chander are partners sharing profits equally. On Chander’s
retirement, his share is acquired by Anand and Bahadur in the ratio of 3:2. The
New Profit Sharing Ratio between Anand and Bahadur will be:
a] 8:7
b] 4:5
c] 3:2
d] 2:3
4] In the absence of any information regarding the acquisition of share in the profit
of the retiring/deceased partner by the remaining partners, it is assumed that
they will acquire his/her share in:
a] Old Profit Sharing Ratio
b] New Profit Sharing Ratio
c] Equal Ratio
d] gain ratio

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 29 | P a g e

5] On retirement/death of a partner, the remaining partner(s) who have gained due
to change in profit sharing ratio should compensate the
a] retiring partners only.
b] remaining partners (who have sacrificed) as well as retiring partners.
c] remaining partners only (who have sacrificed).
d] Remaining partners who have gained

6] Amount due to deceased partner is settled in the following manner;

a] Immediate full payment
b] Transferred to Loan Account
c] Partly paid in cash and the balance transferred to Loan A/c
d] All of the above.

7] Deceased partner’s share of profit in the accrued profit may be calculated on the
basis of
a] Last year’s profit
b] average profit of past few years
c] Sales
d] All the above

8] Items to be considered while calculating the amount payable to the deceased

partner is:
a] His share of capital
b] His share of reserve
c] His share of accrued profit
d] All the above

9] Accrued profit is ascertained on the following ways__________

a] Average profit
b] Previous year’s profit
c] On sales
d] All of the above.

10] Amount payable to the Executors of the deceased partner is transferred to:
a] Executors loan account.
b] Executors account.
c] Remaining partners’ capital accounts.
d] deceased partner’s capital account.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 30 | P a g e

II. Fill in the blanks:
1] _______ ratio is used to distribute accumulated profits and losses at the time
of retirement of a partner.
2] Profit or loss on revaluation is shared among the partners in ____ ratio on
retirement of a partner.
3] New ratio – Old ratio = ________
4] Accumulated losses are transferred to the Capital Accounts of the partners at
the time of retirement in their ____ ratio.
5] General reserve is to be transferred to ______ accounts at the time of
retirement of a partner.
6] In the absence of any instruction, Retiring Partner’s Capital A/c is closed by
transferring its balance to _____ A/c
7] ________ ratio is used for adjustment of continuing partner’s capitals.
8] X, Y and Z are the partners sharing profits and losses in the ratio of 3:2:1.
If Y retires, the new ratio of X and Z will be _________.
9] Share gained is calculated by deducting _______ share from the New Share.
10] The ratio in which the remaining partners share future profits after retirement is
called ______ ratio.
11] The balance in the retiring partner’s loan A/c is shown on the ________ side of
the B/S till the last installment is paid.
12] The amount paid to the Retiring Partner in excess of what is due to him is called
_______ goodwill.
13] In the absence of any agreement as the disposal of amount due to retiring
partner, Sec._____of the Indian Partnership Act, 1932 is applicable.
14] Executors account is generally prepared at the time of _______of a partner.
15] Accounting treatment at the time of retirement and death is________.
16] The period from date of the last B/S and the date of the partner’s death is
called ______ period.
17] ______________ account is debited for the transfer of share of accrued profit
of a deceased partner.
18] Amount payable to the Executors of the deceased partner is transferred to
_________account.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 31 | P a g e

III. Match the following type questions:
A B
a Gaining ratio i Outgoing partner receive 6%
interest
b Gained share ii Old share + acquired share
c New share iii Death of a partner
d Executor’s account iv New share – Old share
e Section 37 of partnership v Transfer to Executor’s account
act
f Amount due to deceased vi Required for contribution to
partner retiring partner share of goodwill

IV. One Marks Questions.

1] What do you mean by retirement of a partner?
2] Give the formula for calculating Gain Ratio.
3] Why the Gain Ratio is required on retirement of a partner?
4] Why the New Ratio is required on retirement of a partner?
5] Give the formula for calculation of new profit sharing ratio on retirement of a
partner.
6] What do you mean by hidden goodwill?
7] When do you prepare executors account?
8] How do you close the executors account?
9] Who is an ‘Executor’?
10] Which account is credited for the share of accrued profit of a deceased partner?
11] What is intervening period?

State true or false in the following cases:

12] Profit or loss on revaluation is transferred to All Partners’ Capital Accounts in
case of retirement of a partner.
13] Accumulated profit is transferred to Continuing Partners Capital Accounts.
14] Adjustment of partners’ capitals of the remaining partners is to be made in the
New Ratio.
15] New Share = Old share + share sacrificed.
16] Share gained is computed by deducting Old share from the New Share.
17] Increase in the value of asset is debited to Revaluation Account.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 32 | P a g e

18] Sec 37 of the Indian Partnership Act, 1932 states that the outgoing partner has
an option to receive either interest @ 6% p.a. till the date of payment or such
share of profits which has been earned with his money.
19] Deceased partner’s claim is transferred to his Executor’s Account
20] Deceased partners’ share of profit for the intervening period may be calculated on
the basis of last year’s profit/ average profit of past few years or on the basis of
sales.
21] Deceased partner may be paid in one lump sum or installments with interest.
22] Retirement normally takes place at the end of an accounting period, where as
death of a partner may occur at any time.
23] Amount payable to the Executors of the deceased partner is transferred to
executor’s loan account.

PART- B
TWO MARKS QUESTIONS:
1] Mention any two circumstances for retirement of a partner.
2] What is Gain Ratio?
3] State any two differences between sacrificing ratio and gaining ratio.
4] State any two purposes of calculating new profit sharing ratio.
5] How do you close the Revaluation Account on retirement of a partner?
6] Mention any two modes of disposal of amount due to Retiring Partner.
7] Pass the journal entry to close Retiring Partner’s Capital Account when the
payment is made immediately.
8] Give the journal entry to close Retiring partner capital Account when it is
transferred to Loan A/c.
9] Give the journal entry to close Revaluation Account when there is a profit.
10] Give the journal entry to close Revaluation Account when there is a loss.
11] Why do firms revalue the assets and liabilities on retirement?
12] Why retiring partner is entitled to a share of goodwill of the firm?
13] Pass the journal entry for Deceased Partner’s Share of profits for the intervening
period:
14] Give the meaning of accrued profit.
15] State any two differences between retirement and death of a partner.
16] Write any two ways of settlement of claims of the deceased partner.
17] Write the journal entry to close the deceased partner’s Capital Account.
18] Pass Journal entry for transfer of accrued profit of the deceased partner.
19] Write the journal entry for cash paid immediately to the executors of the deceased
partner.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 33 | P a g e

20] How do you close the executors account when the payment is not made
immediately?
21] A, B, C were partners in a firm sharing profits in the ratio of 5:4:1. The profit of
the firm for the year ending on 31-3-2024 was `12,000. B dies on 30-6-2024.
Calculate B’s share of profit from 1-4-2024 to 30-6-2024.
22] Give the Journal entry when retiring partner’s whole amount is treated as loan.
23] Pass the Journal entry when retiring partner is partly paid in cash and the
remaining amount is treated as loan
24] P, Q and R are partners in a firm sharing profits in the ratio of 3:2:1. R retires
and the balance in his Capital Account after making necessary adjustments
workout to be `60,000. P and Q agreed to pay him `75,000 in full settlement of
his claim. Find out the hidden goodwill.

PART - C
Six marks problems on calculation of Gain Ratio.

1] Ajay, Vijay and Sanjay are partners in a firm sharing profits and losses in the ratio
of 4:3:2. Ajay retires from the firm. Vijay and Sanjay agreed to share future profits
in the ratio of 5:3. Calculate gain ratio of Vijay and Sanjay.
(Ans.Gain Ratio =21:11)

2] Kishan, Ratan and Nayan are partners in a firm sharing profits and losses in the
ratio of 4:3:2. Nayan retires from the firm. Kishan and Ratan agreed to share
equally in future. Calculate gain ratio of Kishan and Ratan (Ans.Gain Ratio = 1:3)

3] Sharat, Bharat and Kamat are Partner’s sharing Profits and Losses in the ratio of
1:1:1. Bharat retires from the Firm. Sharat and Kamat decided to share the profit
in future in the ratio of 4:3. Calculate the Gain ratio. (Ans.Gain Ratio = 5:2)

4] Sahana, Bhavana and Raveena are Partners’ Sharing Profits and Losses in the
proportion of 1/2, 3/10 and 1/5. Bhavana retires from the firm. Sahana and
Raveena decided to share future profits and losses in the ratio of 3:2. Calculate the
Gain Ratio.
(Ans.Gain Ratio = 1:2)

5] Bhumika, Pratixa and Anushka are partners sharing profits and losses in the
proportion of 1/2 , 3/10 and 1/5 respectively. Bhumika retires from the firm.
Pratixa and Anushka decided to share future profits and losses in the ratio of 5:3.
Calculate the Benefit ratio of Pratixa and Anushka. (Ans.Gain Ratio = 13:7)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 34 | P a g e

6] Raja, Rani and Mantri are partners sharing profits and losses in the proportion of
3:2:1 respectively. Raja retires from the firm. Rani and Mantri decided to share
future profits and losses equally. Calculate the Benefit ratio of Rani and Mantri.
(Ans.Gain Ratio = 1:2)

7] Arati, Bharati and Hemavati are partners sharing profits and losses in the ratio of
4:3:2 respectively. Bharati retires from the firm. Arati and Hemavati decided to
share future profits and losses in the ratio of 5:3. Calculate the Gain ratio of Arati
and Hemavati. (Ans.Gain Ratio = 13:11)

8] Puneet, Pankaj and Prakash are partners sharing profits and losses in the ratio of
3:2:1. Puneet retires from the firm and his share is acquired by Pankaj and Prakash
in the ratio of 5:3. Calculate the Gain ratio of Pankaj and Prakash.
(Ans.Gain Ratio = 7:5)

9] Pavan, Madan and Suman are partners sharing profits and losses in the ratio of
5:3:2 respectively. Madan retires from the firm. Pavan and Suman decided to share
equally in future. Calculate the Gain ratio of Pavan and Suman.
(Ans. Gain Ratio = 0:3 or 0:1)

10] Prakash, Ramesh and Suresh are partners sharing profits and losses in the ratio
of 4:2:3 respectively. Suresh retires from the firm. Prakash and Ramesh are decided
to share equally in future. Calculate the Gain ratio of Prakash and Ramesh.
(Ans. Gain Ratio = 1:5)

PART - C

Six marks problems on calculation of NPSR.

1] Raju, Ravi and Roopa are partners sharing profits and losses in the ratio of 3/8,1/2
and 1/8. Raju retires and surrenders 2/3rd of his share in favour of Ravi and the
remaining share in favour of Roopa. Calculate new profit sharing ratio.
(Ans. NPSR= 3:1)

2] Akash, Anil and Adarsh are partners sharing profits and losses in the ratio of 5:3:2.
Anil retires from the firm and his share is acquired by Akash and Adarsh in the
ratio of 2:1. Calculate new profit sharing ratio.(Ans. NPSR= 7:3)

3] White, Black and Green are partners sharing profits and losses in the ratio of 3:2:1.
Black retires. His share is taken by White and Green in the ratio of 3:1. Calculate
new profit sharing ratio. (Ans. NPSR = 3:1)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 35 | P a g e

4] Girish, Mahesh and Varun are Partners Sharing Profits in the ratio of 3:2:1.
Mahesh retires and his share is acquired by Girish and Varun in the ratio of 3:2.
Calculate NPSR (Ans. NPSR = 7:3)

5] Amit, Bhima and Chandra are partners sharing profits and lossed in the ratio of
5:3:2. Bhima retires from the firm. Bhima surrenders 2/3 of his share in favour of
Amit and 1/3 of his share to Chandra. Calculate New profit sharing ratio of Amit
and Chandra. (Ans. NPSR = 7:3)

6] Rajesh, Rakesh and Ramesh are partners sharing profits and losses in the ratio of
4:3:2 respectively. Ramesh retires from the firm. Rajesh and Rakesh are decided to
share Ramesh’s share of profit in the ratio of 2:1. Calculate New profit sharing
ratio of Rajesh and Rakesh. (Ans. NPSR = 16:11)

7] Pankaj, Naresh and Sourabh are partners sharing profits and lossed in the ratio of
6:5:2. Naresh retires from the firm. His share is acquired by Pankaj and Sourabh
equally. Calculate New profit sharing ratio of Pankaj and Sourabh.
(Ans. NPSR = 17:9)

8] Radha, Sheela and Meena are partners sharing profits and lossed in the ratio of
3:2:1. Meena retires from the firm. Her share is acquired by Radha and Sheela in
the ratio of 2:1. Calculate New profit sharing ratio of Radha and Sheela.
(Ans. NPSR = 11:7)

9] Vani, Rani and Soni are partners sharing profits and lossed in the ratio of 5:3:2.
Vani retires from the firm. Her share is acquired by Rani and Soni in the ratio of
2:1. Calculate New profit sharing ratio of Rani and Soni. (Ans. NPSR = 19:11)

10] Lata, Abhishek and Apexa are partners sharing profits and lossed in the ratio of
4:3:2. Apexa retires from the firm. Her share is acquired by Lata and Abhishek in
the ratio of 1:2. Calculate New profit sharing ratio of Lata and Abhishek.
(Ans. NPSR = 14:13)

PART-C

SIX MARKS PROBLEMS: ON DEATH OF PARTNER

1] Rajesh, Rakesh and Ramesh are the partners sharing profits and losses in the ratio
of 3:2:1, Their capitals as on 01.04.2024 were `1,00,000, `90,000 and `60,000
respectively. Rajesh died on 01-10-2024 and the Partnership Deed provided the
following:

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 36 | P a g e

a] Interest on Rajesh’s Capital at 10% p.a.
b] Rajesh’s salary `2,000 p.m.
c] His share of accrued profit up to the date of death based on previous year’s
profit. Firms profit for 2023-24 `24,000
d] His share of Goodwill `12,000 (as per AS26)
Ascertain the amount payable to Rajesh’s Executor by preparing Rajesh’s Capital
A/c
(Ans: Amount payable to Rajesh’s Executors: `1,35,000 )

2] Ram, Rahim and Rakshit are partner’s sharing profits and losses in the ratio of
2:2:1. Their capital balances on 01.04.2024 stood at `90,000, `60,000 and
`40,000 respectively. Mr. Rahim died on 01.07.2024 and partnership deed
provides the following:
a] Interest on capital at 10% p.a.
b] Salary to Rahim `2,000 per month.
c] Rahim’s share of Goodwill(as per AS26)
d] His share of profit up to the date of death on the basis of previous year’s
profit.
i) Total good will of the firm is `60,000
ii) Profit of the firm for the year 2023-24 is `40,000
You are required to ascertain the amount payable to Executors of Rahim by
preparing Rahim’s Capital Account.
(Ans: Amount payable to Executors of Rahim: `95,500 )

3] Dinesh, Mahesh and Ramesh are partners sharing profit and losses in the ratio of
4:3:3. Their capital balances on 01.04.2023 stood `1,00,000, `80,000 and
`50,000 respectively. Dinesh died on 31.12.2023. The partnerships deed provides
the followings:
a] Interest on capital at 12% p.a.
b] He had withdrawn `5,000 up to the date of death.
c] Dinesh’s share of goodwill `5,000 (as per AS26)
d] His share of profit up to the date of death on the basis of previous year
profits.
Previous year’s profits `20,000.
Prepare Dinesh’s Executors Account.
(Ans: Amount payable to Dinesh’s Executors: `1,15,000)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 37 | P a g e

4] Radha, Rukmini and Ranjita are partners sharing profits and losses in the ratio
of 2:2:1. Their capital balances on 01.04.2023 stood at `70,000, `50,000 and
`40,000 respectively. Rukmini died on 01.01.2024. According to partnership
deed, Rukmini’s executors are entitled to get the following:
a] Rukmini’s capital as on 01.04.2023.
b] Interest on capital at 6% p.a.
c] Salary to Rukmini at `1,000 per month.
d] Rukmini’s share of goodwill. Goodwill of the firm is `60,000 (as per AS26)
e] Rukmini is entitled for commission of `4,000 per year
Prepare Rukmini’s Capital Account.
(Ans: Amount payable to Rukmini’s Executors: ` 88,250)

5] Raga, Tala and Shruti were partners sharing profits and losses in the ratio of
6:3:2 respectively. Their capitals on 01.04.2024 stood at `60,000, `30,000 and
`20,000 respectively. Shruti died on 30th Sept 2024. According to partnership
deed, Shruti’s executors are entitled to get the following:
a] The deceased partner’s share of goodwill is `9,000.
b] The deceased partner’s share in accrued profit up to the date of her death
is `4,200
c] Shruti’s commission is `600 p.m. Her drawings up to the date of death
amounted to `7,500.
d] Interest on capital at 10% p.a.
Prepare Shruti’s Capital Account.
(Ans: Amount payable to Shruti’s Executors: `30,300)

6] Veena, Vani and Rani were partners in a firm sharing profits and losses in the
ratio of 5:3:2. On 31st March 2024, their Balance Sheet was as under
Balance Sheet as on 31.3.2024
Liabilities ` Assets `
Creditors 14,000 Cash 8,000
Reserve Fund 6,000 Debtors 11,000
Capitals: Patents 11,000
Veena 30,000 Stock 10,000
Vani 25,000 Machinery 50,000
Rani 15,000 70,000
90,000 90,000
Veena died on 30th Sept 2024. It was agreed between her executors and the
surviving partners that:
a] Goodwill to be valued at two years purchase of the average profits of the
previous four years, which were:

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 38 | P a g e

2020-21 `12,000, 2021-22 `20,000,
2022-23 `13,000, 2023-24 `15, 000 (as per AS26)
b] Share in the profit from the date of last Balance Sheet till to the date of death
to be calculated on the basis of last year’s profit.
c] Interest on capital to be allowed at 12% p.a.
d] Share in the Revaluation Account balance, her share is `5, 000(Cr).
Prepare Veena’s Capital Account.
(Ans: Amount payable to Veena’s Executors: ` 58,550)

7] Ramya, Bhavya and Rakshita were partners sharing profits & losses in the ratio
of 2:1:1. Their balance sheet as on 31.3.2024 was as under:
Balance Sheet as on 31-03-2024
Liabilities ` Assets `

Sundry Creditors 25,000 Cash 6,000

Reserve Fund 20,000 Stock 12,000
Ramya capital 15,000 Debtors 15,000
Bhavya capital 10,000 Investments 15,000
Rakshita capital 10,000 Buildings 32,000
80,000 80,000

The partnership deed provides that in the event of death of partner, her executors
entitled to get the following:
a] The Capital at the date of last Balance Sheet
b] His proportion of reserve fund.
c] Interest on capital @ 12% p.a
d] Her share of profit to the date of death based on the average profits of the last
three years profits.
e] Her share of goodwill. Goodwill of the firm is three years purchase of the
average profit of last 3 years profits, the profits for the last three years were:
2021-22 `16,000, 2022-23- `17,000, and 2023-24 `15,000(as per AS26)
Rakshita died on July 1st, 2024. She had also withdrawn `5000 till to the
date of her death. Prepare Rakshita’s Executors Account.
(Ans: Amount transferred to Rakshita’s Executors Loan A/c : ` 28,300)

8] Sujata, Sangeeta and Revati are partners in a business sharing profits and losses
in the ratio of 2:2:1 respectively. Their Balance Sheet as on March 31, 2024 was
as follows.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 39 | P a g e

Balance Sheet as on March 31,2024.
Liabilities ` Assets `

Sundry Creditors 1,00,000 Cash at Bank 20,000

Reserve Fund 50,000 Stock 30,000
Capital Accounts Sundry Debtors 80,000
Sujata 60,000 Investments 70,000
Sangeeta 1,00,000 Furniture 35,000
Revati 40,000 2,00,000 Buildings 1,15,000
3,50,000 3,50,000

Revati died on 30th Sept 2024. The partnership deed provided the following:
a] The deceased partner will be entitled to her share of profit up to the date of
death calculated on the basis of previous year’s profit.
b] She will be entitled to her share of goodwill of the firm calculated on the basis
of 3 year’s purchase of average of last 4 years’ profit. The profits for the last
four financial years are given below:
For 2020-21 `80,000, for 2021-22 `50,000,
for 2022-23 `40,000, and for 2023-24 `30, 000.(as per AS26)
c] The drawings of the deceased partner up to the date of death is `10,000.
d] Interest on Capital is to be allowed at 12% per annum.
Prepare Revati’s capital Account.
(Ans: Amount payable to Revati’s Executors: `75,400)

9] Pradeep, Sandeep and Sanket are partners sharing profits in the ratio of 3:2:1 and
their Balance Sheet as on 31st March 2024 stood as follows:
Balance sheet as on 31st March,2024
Liabilities ` Assets `
Bills Payable 12,000 Buildings 21,000
Creditors 14,000 Cash in hand 12,000
Reserved Fund 12,000 Bank 13.700
Capitals: Debtors 12,000
Pradeep 20,000 Bills Receivable 4,300
Sandeep 12,000 40,000 Stock 1,750
Sanket 8,000 Investment 13,250

78,000 78,000
Sandeep died on 1st July 2024 and according to the deed of the partnership her
executors are entitled to be paid as under.
a] The capital to his credit at the time of his death and interest there on at 10%
per annum.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 40 | P a g e

b] His proportionate share of reserve fund.
c] His share of profits for the intervening period will be based on the sales
during that period, which were calculated as `1,20,000. The rate of profit
during past three years had been 10% on sales.
d] His share in goodwill to be calculated by taking twice the amount of the
average profit of the last three years. The profits of the previous years were:
2021-22 `9,200
2022-23 `8,000
2023-24 `9,800 (as per AS26)
The investments were sold for `16,250 and his executors were paid on.
Prepare the Sandeep’s Executors Account.
(Ans: Amount paid to Sandeep’s Executors: `27,300)

10] Deepa, Pushpa and Parimala were partners sharing profits and losses in the ratio
of 5:3:2. Their balance sheet as on 31 March 2024 was as follows.
Balance sheet as on 31st March, 2024.
Liabilities ` Assets `

Creditors 14,000 Investments 10,000

Reserve Fund 6,000 Premises 25,000
Capitals: Patents 6,000
Deepa 30,000 Machinery 43,000
Pushpa 30,000 80,000 Debtors 8,000
Parimala 20,000 Bank 8,000
1,00,000 1,00,000

Parimala died on 1st November, 2024. The agreement between the Executors of
Parimala and the continuing partners stated that:
a] Goodwill of the firm be valued at 2 ½ times the average profits of last four
years. The profits of fast four years were: 2020-21 `13,000, 2021-22
`12,000, 2022-23 `16,000, and 2023-24 `15,000.(as per AS26)
b] The share of profit of Parimala should be calculated on the basis of last
year’s profit.
c] `5,000 should be paid immediately and the balance should be transferred to
Executors loan A/c.
Prepare Parimala’s Executor’s Account.
(Ans: Amount transferred to Parimala’s Executors loan A/c: ` 24,950 )

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 41 | P a g e

PART-D
12 Marks Problems
1] Amar, Akbar and Anthoni were partners in a firm sharing profits in the ratio of
2 : 2 : 1. Their Balance Sheet as on March 31, 2024 was as follows:
Balance Sheet as on 31-03-2024
Amount Amount
Liabilities Assets
(`) (`)
Creditors 50,000 Cash 15,000
Reserves 20,000 Debtors 20,000
Amar’s Capital 80,000 Stock 40,000
Akbar’s Capital 60,000 Buildings 1,50,000
Anthoni’s Capital 75,000 Machinery 50,000
Patents 10,000

2,85,000 2,85,000

Akbar retired on March 31, 2024 on the following terms:

a] Goodwill of the firm was valued at `60,000. (as per AS26)
b] Bad debts amounting to `2,000 were to be written off.
c] Patents were considered as valueless.
d] Appreciate Building by 10%.
Prepare :
i] Revaluation Account
ii] Partners’ Capital Accounts and
iii] New Balance Sheet after Akbar’s retirement.
(Ans: Revaluation profit-`3,000 Capital A/c balances-Amar-`73,200
Anthoni-`71,600 Akbar’s Loan-`93,200 New B/S Total-`2,88,000 )
2] Pradeep, Sudeep and Sundar were in partnership sharing profits and losses in
the proportion of 3:2:1. Their Balance Sheet was as follows:
Balance Sheet as on 31-03-2024
Amount Amount
Liabilities Assets
(`) (`)
Trade Creditors 10,000 Cash at Bank 12,500
Bills Payable 3,000 Debtors 15,000
O/S Expenses 5,000 Stock 12,000
General Reserve 12,000 Factory Premises 22,500
Capitals : Machinery 8,000
Pradeep 20,000 Loose Tools 5,000
Sudeep 15,000
Sundar 10,000 45,000
75,000 75,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 42 | P a g e

On April 1, 2024, Sudeep retires from the firm. The terms were:
a] Goodwill of the firm was valued at `6,000. (as per AS26)
b] O/s Expenses to be brought down to `3,750.
c] Machinery and Loose Tools are to be valued at 10% less than their
book value.
d] Factory premises are to be revalued at `25,550.
Prepare :
i] Revaluation Account
ii] Partners’ Capital Accounts and
iii] Balance Sheet of the firm after retirement of Sudeep.
(Ans: Revaluation profit-`3,000 Capital A/c balances-Pradeep-`26,000
Sundar-`12,000 Sudeep’s Loan-`22,000 New B/S Total-`76,750 )

3] Anita, Kavita and Sunita are partners sharing profits in the ratio of 5:3:2. Anita
retired from the firm due to her illness. On that date the Balance Sheet of the firm
was as follows.
Balance Sheet as on March 31, 2024
Amount Amount
Liabilities Assets
(`) (`)
Sundry Creditors 15,000 Bank 8,500
Bills Payable 12,000 Debtors 6,000
Provision for Legal Damages 6,000 Less: PDD 500 5,500
General Reserve 10,000 Stock 9,000
Capitals: Furniture 40,000
Anita 50,000 Premises 80,000
Kavita 30,000
Sunita 20,000 1,00,000
1,43,000 1,43,000
Additional Information:
a] Premises have been appreciated by 20%,
b] Stock depreciated by 10% and provision for doubtful debts was to be made at
10% on debtors.
c] Furniture to be brought up to `45,000.
d] Goodwill of the firm be valued at `40,000 (as per AS26)
e] `35,000 from Anita’s Capital Account be transferred to her Loan Account
and balance be paid through bank. If required, necessary overdraft may be
obtained from Bank.
Prepare :
i] Revaluation A/c,
ii] Partners Capital Accounts and
iii] Balance Sheet of the firm after Anitas’s Retirement.
(Ans: Revaluation profit - `20,000 Capital A/c balances-Kavita-`27,000 Sunita-
`18,000 Anita’s Loan-`35,000 New B/S Total-`1,54,500 )

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 43 | P a g e

4] Following is the Balance Sheet of Arati, Bharati and Jayanti as on March 31st, 2024.
Balance Sheet as on March 31, 2024
Liabilities Amount(`) Assets Amount(`)
Sundry Creditors 20,000 Cash 5,000
O/s Telephone bills 500 Sundry Debtors 15,000
Accounts payable 9,500 Stock 18,000
Profit and Loss A/c 15,000 Land and Building 60,000
Capitals : Office Furniture 25,000
Arati 40,000 Plant and Machinery 42,000
Bharati 60,000
Jayanti 20,000 1,20,000
1,65,000 1,65,000

The partners have been sharing profits in the ratio of 5:3:2. Jayanti decided to
retire from business on April 1, 2024 and her share in the business is to be
calculated as per the following terms:
a] Revaluation of assets : Stock `15,000; Office furniture `24,000; Plant and
Machinery `40,000; Land and Building `70,000.
b] A provision of `1,500 to be created for doubtful debts.
c] The goodwill of the firm is valued at `30,000.
The continuing partners agreed to pay `15,000 as cash on retirement of
Jayanti, to be contributed by continuing partners in the ratio of 3:2. The
balance in the Capital Account of Jayanti will be treated as Loan.
Prepare :i] Revaluation a/c,
ii] Partners Capital Accounts, and
iii] Balance Sheet of the reconstituted firm.
(Ans: Revaluation profit-`2,500 Capital A/c balances: Arati-`54,000 Bharati-
`69,000 Jayanti’s Loan-`14,500 New B/S Total-`1,67,500 )

5] Mohan, Madan and Murali were partners sharing profits and losses in the ratio of
2: 2:1 respectively. Their Balance Sheet as on 31.3.2024 was as under.
Balance Sheet as on 31.03.2024
Liabilities Amount Assets Amount
(`) (`)
Creditors 35,500 Cash at Bank 20,000
Reserves Fund 20,000 Debtors 40,000
Profit & Loss A/c 2,500 Less P.B.D. 2,000 38,000
Capital A/c Stock 15,000
Mohan 50,000 Machinery 25,000
Madan 30,000 Furniture 10,000
Murali 20,000 1,00,000 Buildings 50,000
Total 1,58,000 Total 1,58,000
Murali retired on 1.4.2024 from the firm. The following adjustment are to be
made:

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 44 | P a g e

a] Stock to be increased by 20%.
b] Maintain P.B.D at 10% on debtors.
c] Depreciate Machinery and Furniture by 10% each.
d] Buildings are revalued at `60.000
e] Goodwill of the firm valued at `15,000. (as per AS26)
Prepare:
i] Revaluation Account,
ii] Partners Capital Accounts and
iii] Balance Sheet as on 1.4.2024.
(Ans: Revaluation profit-`7,500 Capital A/c balances-Mohan-`60,500 Madan-
`40,500 Murali’s Loan-`29,000 New B/S Total-`1,65,500 )

6] Anil, Sunil and Ashok are partners sharing profits and losses equally.
Their Balance sheet as on 31.03.2024 was as follows.
Balance Sheets as on 31.03.2024
Liabilities Amount Assets Amount
(`) (`)
Creditors 30,000 Cash 26,000
Bank overdraft 25,000 Bills receivable 28,000
Reserve Fund 15,000 Stock 45,000
Debtors 30,000
Capital Furniture 25,000
Anil 60,000 Machinery 50,000
Sunil 50,000 Profit Loss A/c 6,000
Ashok 30,000 1,40,000

Total 2,10,000 Total 2,10,000

Ashok retired on 1.4.2024 from the business and the following adjustments are to
be made:
a] Goodwill of the firm is valued at `18,000 (as per AS26)
b] Maintain provision for doubtful debts at 5% on Debtors
c] Increase stock by `6,000
d] Depreciate Machinery and Furniture by 10% each.
Prepare
i] Revaluation Account.
ii] All Partners Capital A/cs.
iii] Balance Sheet as on 1.04.2024
(Ans: Revaluation Loss-`3,000 Capital A/c balances-Anil-`59,000 Sunil-`49,000
Ashok’s Loan-`38,000 New B/S Total-`2,01,000 )

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 45 | P a g e

Problems with Capital Adjustments
7] Akash, Prakash and Venkatesh are partners in a firm sharing profits and losses
in proportion of ½, 1/6 and 1/3 respectively. The Balance Sheet on March 31,
2024 was as follows:
Balance Sheet as on March 31, 2024
Amount Amount
Liabilities Assets
(`) (`)
Bills Payable 12,000 Freehold Premises 40,000
Sundry Creditors 18,000 Machinery 30,000
Reserves 12,000 Furniture 15,000
Capital Accounts : Stock 20,000
Akash 40,000 Sundry Debtors 20,000
Prakash 20,000 Less : PBD 1,000 19,000
Venkatesh 28,000 88,000 Cash 6,000
1,30,000 1,30,000

On 01-04-2024, Venkatesh retires from the business and the partners agreed to
the following :
a] Freehold premises and Stock are to be appreciated by 20% and 15%
respectively.
b] Machinery and Furniture are to be depreciated by 10% each.
c] Bad Debts provision is to be increased to `1,500.
d] Goodwill is valued at `24,000 (as per AS26)
e] The continuing partners have decided to adjust their capitals in their new
profit sharing ratio after retirement of Venkatesh. Surplus/deficit, if any, in
their Capital Accounts will be adjusted through cash.
Prepare
i] Revaluation Account.
ii] All Partners Capital A/cs.
iii] New Balance Sheet as on 1.04.2024
(Ans : Revaluation profit- `6,000 Capital A/c balances-Akash- `48,000 Prakash-
`16,000 Venkatesh’s Loan- `42,000 New B/S Total- `1,36,000 )

8] Sachin, Dravid and Ashwin were partners sharing profits in the ratio of 5:3:2
respectively. Their Balance sheet as on 31st March, 2024 was as follows:
Balance sheet as on 31st March, 2024
Liabilities ` Assets `
Sundry Creditors 39,000 Fixed Assets 1,00,000
Reserves 10,000 Stock 40,000
Debtors 30,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 46 | P a g e

Capitals Bills Receivable 10,000
Sachin 70,000 Cash 20,000
Dravid 51,000
Ashwin 30,000
Total 2,00,000 Total 2,00,000

Ashwin retired on 1st April,2024 on the following terms;

a] Stock is revalued at `53,000
b] Depreciate Fixed assets at 5%
c] Provision for doubtful debts is to be made at 10% on debtors.
d] Goodwill of the firm is valued at `40,000 (As per AS26)
e] The continuing partners have decided to adjust their capitals in their new
profit sharing ratio which is agreed by them as 3:2 and their gaining ratio
is 0:1. Surplus/deficit, if any, in their Capital Accounts will be adjusted
through cash.
Prepare i] Revaluation Account.
ii] All Partners Capital A/cs.
iii] New Balance Sheet after retirement of Ashwin.
(Ans: Revaluation profit-`5,000 Capital A/c balances-Sachin-`75,000 Dravid-
`50,000 Ashwin’s Loan-`41,000 New B/S Total-`2,05,000 )

9] Anil, Vishal and Sumit were partners in a firm Sharing profits according to their
capitals. Their Balance sheet as on March 31, 2024 was as under:
Balance Sheet as on March 31, 2024
Liabilities Amount Assets Amount
(`) (`)
Creditors 28,000 Buildings 1,00,000
General Reserve 12,000 Machinery 50,000
Stock 18,000
Anil’s Capital 80,000 Debtors 20,000
Vishal’s Capital 40,000 Less: PDD 1,000 19,000
Sumit’s Capital 40,000 Cash at bank 13,000

2,00,000 2,00,000

On the above date, Vishal decided to retire from the firm and the partners agreed
to the following:
a] Buildings to be appreciated by 20%.
b] Provision for Bad debts to be increased up to 15% on Debtors.
c] Machinery to be depreciated by 20%.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 47 | P a g e

d] Goodwill of the firm is valued at `72,000 (as per AS26)
e] The capital of the new firm be fixed at `1,20,000. The continuing partners
have decided to adjust their capitals in their new profit sharing ratio after
retirement of Vishal. Surplus/deficit, if any, in their Capital Accounts will be
adjusted through cash.
Prepare i] Revaluation Account.
ii] All Partners Capital A/c.
iii] New Balance Sheet after retirement of Vishal
(Ans: Revaluation profit- `8,000 Capital A/c balances-Anil- `80,000 Sumit-
`40,000 Vishal’s Loan-` 63,000 New B/S Total- `2,11,000)

10] Mahesh, Suresh and Sandesh were partners sharing profits in the ratio of 3:2:1
respectively. Their Balance sheet as on 31st March, 2024 was as follows:
Balance sheet as on 31st March, 2024
Liabilities ` Assets `
Sundry Creditors 23,000 Building 45,000
Bills Payable 15,000 Machinery 25,000
Profit and Loss A/c 12,000 Stock 15,000
Capitals Debtors 20,000
Mahesh 40,000 Bills Receivable 10,000
Suresh 30,000 Cash 25,000
Sandesh 20,000
Total 1,40,000 Total 1,40,000
Suresh retired on 1st April,2024 due to illness on the following terms;
a] Depreciate Machinery by 10%
b] Building is revalued at `46,500
c] Provision for doubtful debts is to be made at 10% on debtors.
d] Goodwill of the firm is valued at `48,000 (As per AS26)
e] The capital of the new firm be fixed at `80,000. The continuing partners
have decided to adjust their capitals in their new profit sharing ratio after
retirement of Suresh. Surplus/deficit, if any, in their Capital Accounts will be
adjusted through cash. And retiring partner’s claim is settled immediately.
Prepare
i] Revaluation Account.
ii] All Partners Capital A/c.
iii} New Balance Sheet after retirement of Suresh
(Ans: Revaluation Loss-`3,000 Capital A/c balances-Mahesh-`60,000 Sandesh-
`20,000 Amount paid to Suresh-`49,000 Cash balance-`6,000 New B/S
Total-`1,18,000 )

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 48 | P a g e

Key Answers
Multiple Fill in Blanks Matching True or False
Choice
Q.No Ans Q.No Ans Q.No Ans Q.No Ans
1 b 1 Old a vi 12 True
2 c 2 Old b iv 13 False
3 a 3 Gain Ratio c ii 14 True
4 a 4 Old d iii 15 False
5 b 5 All partners capital e i 16 True
6 d 6 Retiring partner’s loan f v 17 False
7 d 7 New profit sharing 18 True
8 d 8 3:1 19 True
9 d 9 Old 20 True
10 a 10 New profit sharing 21 True
11 d 11 Liability 22 True
12 Hidden 23 True
13 37
14 Death
15 Same/Similar
16 Intervening
17 Profit and loss suspense
18 Executor’s loan

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 49 | P a g e

CHAPTER - 04

DISSOLUTION OF PARTNERSHIP FIRM

PART - A
One Mark Questions:
I] Multiple Choice Questions:
1] On dissolution of a firm, bank overdraft is transferred to:
a] Cash Account
b] Bank Account
c] Realisation Account
d] Partner’s capital Account
2] On dissolution of a firm, partner’s loan account is transferred to:
a] Realisation Account
b] Partner’s Capital Account
c] Partner’s Current Account
d] cash or bank account.
3] After transferring liabilities like creditors and bills payables in the
Realisation Account, in the absence of any information regarding their
payment, such liabilities are treated as:
a] Never paid
b] Fully paid
c] Partly paid
d] Paid at deductible percentage.
4] When realisation expenses are paid by the firm on behalf of a partner,
such expenses are debited to:
a] Realisation Account
b] Partner’s Capital Account
c] Partner’s Loan Account
d] cash or bank account
5] Unrecorded assets, when taken over by a partner are shown in:
a] Debit of Realisation Account
b] Debit of Bank Account
c] Credit of Realisation Account
d] Credit of Bank Account.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 50 | P a g e

6] Unrecorded liabilities, when paid are shown in:
a] Debit of Realisation Account
b] Debit of Bank Account
c] Credit of Realisation Account
d] Credit of Bank Account.
7] The accumulated profits and reserves are transferred to:
a] Realisation Account
b] Partners’ Capital Accounts
c] Bank Account
d] Cash Account.
8] On dissolution of the firm, partner’s capital accounts are closed through:
a] Realisation Account
b] Drawings Account
c] Cash or Bank Account
d] Loan Account.
9] Dissolution of firm means to
a] Breaking of relationship between all the partners
b] Breaking of relationship between one or two partners
c] Breaking the relationship between two out of Five partners
d] Breaking of relationship between two out of four partners
10] Dissolution partnership firm brings
a] To an end of business
b] To the continuation of business
c] To the end of partnership
d] To the continuation of partnership
11] Dissolution of partnership implies that
a] The end of partnership
b] The end of firm
c] The continuation of partnership
d] The continuation of firm
12] Dissolution of partnership may not take place
a] On changes in existing profit sharing ratio
b] On admission of a new partner
c] On intervention of court
d] On retirement of a partner

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 51 | P a g e

13] Dissolution of firm may not take place
a] By an agreement
b] By compulsion
c] By notice
d] By completion of the venture
14] The court may order a partnership firm to dissolve on
a] The death of any partner
b] The insanity of any partner
c] The permanent incapability of any partner
d] The guilty of misconduct of any partner
15] Losses on dissolution including deficiency of capital Shall not be paid
a] Out of profits
b] Out of bank loan
c] Out of partners’ capital
d] Out of partner’s individual contribution

II. Fill in the blank

1] All assets (except cash/bank and fictitious assets) are transferred to the
________side of the realisation account.
2] All ________liabilities are transferred to the credit side of realisation account.
3] Accumulated losses are transferred to the capital account in _________ratio.
4] If a liability is assumed by a partner, such a Partner's Capital Account is to
be_______.
5] If an asset is taken over by a partner such a partner capital account is to
be____.
6] No entry is required when a_____________ accepts a fixed asset in payment
of his dues.
7] When the creditor accepts an asset whose value is much more than the
amount due to him, the excess amount paid will be credited to the
_____________ Account.
8] When the firm has agreed to _______ the partner a fixed amount for
realisation work irrespective of the actual amount spent, such fixed amount
is debited to Realisation Account and Credited to Capital Account.
9] Partner’s loan is ________ to the Realisation Account.
10] Partner’s current accounts balances are transferred to respective Partners’
________ Account

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 52 | P a g e

III. Match the following
A B
a] Breaking of relationship between i] Death of a partner
some of the partners
b] Dissolution by happening of contingencies ii) Dissolution of partnership
c] Partners' loan iii) Debited to Partners'
capital account
d] Assets taken over by a partner iv] Debited to all partners'
capital account
e] profit on realization v] Settled by payment
vi] Credited to all partners’
capital account

IV. Short answer Questions

1] State any one difference between dissolution of partnership and dissolution
of partnership firm.
2] State any one order of settlement of accounts on dissolution.
3] State any one process of dissolution of partnership firm.
4] What is a realisation account?
5] How do you close a realisation account?
6] On what account does the realisation account differ from the revaluation
account
7] State any one way of dissolution of partnership firm.
8] A firm is compulsorily dissolved when a partner decides to retire.
(state true or false)
9] Court can order a firm to be dissolved when a partner becomes insane.
(state true or false)
10] Dissolution of partnership cannot take place without intervention of the
court. (state true or false)
11] Losses, including deficiency of capital shall be paid first out of capital of
partners. (state true or false)
12] Realisation account is prepared to ascertain the net effect of assets
realised and liabilities paid. (state true or false)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 53 | P a g e

PART - D
Questions for 12 Marks:
1] Medha and Vidya are partners sharing profits and losses equally. Their Balance
Sheet as on 31.3.2023 was as follows :
Balance Sheet as on 31. 3. 2023
Liabilities ` Asset `

Bills Payable 10000 Cash at Bank 15,000

Creditors 50,000 Debtors 55,000
Sunanda's loan 25,000 Less: P.B.D. 3,000 52,000
Reserve fund 15,000 Stock 40,000
Capitals :Medha 60,000 Furniture 15,000
:Vidya 80,000 Machinery 25,000
Buildings 81,000
Profit and Loss A/c 12,000
2,40,000 2,40,000

On the above date the firm was dissolved. The following information is available:
a] The assets realised as follows:
Debtors `52,000, Stock `39,000, Machinery `24,000,
Buildings `75,000 and Furniture `13000,
b] Creditors and Bills payable were paid @ 5% discount.
c] Dissolution expenses amounted to `4000.
Prepare:
i] Realisation Account
ii] Partners' Capital Accounts and
iii] Bank Account.
(Ans: Loss on Realization `11,000, Final capital balance paid:
Medha `56,000, Vidya `76,000 and Bank A/c Total `2,18,000.)

2] Anand, Chandu and Vijay are partners sharing profits and losses in the ratio
of 2:2:1. Their Balance Sheet on 31. 3. 2023 was as follows:
Balance Sheet as on 31. 3. 2023
Liabilities ` Assets `
Creditors 15,000 Cash in hand 5,000
Anand's loan 5,000 Cash at Bank 16,000
Bills payable 10,000 Debtors 25,000
Bank loan 8,000 Bills Receivable 5,000
Profit & Loss A/c 22,000 Investment 18,000
Capitals : Anand 20,000 Machinery 25,000
Chandu 20,000 Furniture 16,000
Vijay 10,000
1,10,000 1,10,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 54 | P a g e

On the above date the firm dissolved. The following information is available:
a] Assets Realised:
Debtors `24,000, Bills Receivable `4,000,
Investments `15,000, Machinery `22,000
b] Chandu took the furniture for `10,000.
c] Creditors and Bills Payable are paid at a discount of 5%.
d] Unrecorded Investment realised `4,000.
e] Dissolution expenses `2,250.
Prepare :
i] Realisation Account
ii] Partners' Capital Account and
iii] Bank Account.
(Ans: Loss on Realisation ` 11,000, Final capital balance paid: Anand
`24,400 Chandu `14,400,Vijay ` 12,200 and Bank A/c Total ` 90,000.)

3] Anitha and Sunitha are partners sharing profits and losses equally. Their
Balance Sheet as on 31. 3. 2014 was as follows :
Balance Sheet as on 31. 3. 2023
Liabilities ` Assets `
Bills Payable 6,000 Cash at Bank 6,000
Creditors 20,000 Debtors 28,000
Anitha's loan 5,000 Less : P.B.D. 2,000 26,000
Vanitha’s loan 5,000 Stock 40,000
Reserve fund 30,000 Investments 20,000
Capitals : Furniture 14,000
Anitha 50,000 Buildings 60,000
Sunitha 50,000
1,66,000 1,66,000

On the above date the firm was dissolved. The following information is
available:
a] The assets realised as follows :
Debtors `25,600, Stock `39,000, Building `66,000
b] Anitha took over 50% of investments at 10% less on its book value and
remaining investments were sold at a gain of 20%.
c] Furniture was taken over by Sunitha at `12,000.
d] Anitha agreed to bear all Realisation expenses. For the service Anitha
is paid `2,600. Actual Realisation Expenses amounted to `2,000.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 55 | P a g e

Prepare :
i] Realisation Account
ii] Partners' Capital Accounts and
iii] Bank Account.
(Ans: Profits on Realisation `1,000, Final capital balance paid: Anitha
`59,100 Sunitha `53,500 and Bank A/c Total `1,48,600)

4] Ramya, Kavya and Divya are partners sharing profits and losses in the
ratio of 1:2:1. Their balance sheet as on 31.3.2023was as follows:
Balance sheet as on 31.3.2023
Liabilities ` Assets `
Creditors 20,000 Cash 15,000
Bills Payable 6,000 Debtors 15,000
Bank O/D 4,000 Stock 18,000
Reserve fund 8,000 Furniture 12,000
Vani’s loan 5,000 Machinery 20,000
Capitals: Ramya 42,000 Buildings 60,000
Kavya 35,000
Divya 20,000
1,40,000 1,40,000
On the above date they decided to dissolve the firm:
A] Assets realised as follows : Debtors `13500, Stock `19,800, Buildings
`62,000, Vehicle which was unrecorded also realised `4,000 and
Machinery realised at book value .
b] Furniture was taken over by Ramya at a valuation of `9000
c] Creditors were settled at 10% less. Divya took over Vani’s loan.
d] Interest on Bank O/D due `400 was also paid off.
e] Realisation expenses amounted to `4,000.
Prepare:
1] Realisation A/c
2] Partners Capital Accounts and
3] Cash A/c
(Ans: Profits on Realisation ` 900, Final capital balance paid: Ramya
`35,225. Kavya `39450, Divya `27,225 and Cash A/c Total `1,34,300.)

5] Shruti, Shilpa and Shreya were partners in a firm sharing profits and losses
in the ratio of 2:2:1. They decided to dissolve the firm. Their Balance Sheet
on the date of dissolution was as follows:

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 56 | P a g e

Balance Sheet as on 31. 3. 2023

Liabilities ` Assets `

Creditors 30,000 Cash at Bank 6,000

Bills payable 20,000 Debtors 30,000
Shreya’s Loan 8,000 Stock 30,000
General Reserve 10,000 Furniture 22,000
Capitals: Machinery 20,000
Shruti 40,000 Buildings 50,000
Shilpa 30,000
Shreya 20,000
1,58,000 1,58,000

The assets realised as follows:

a] Debtors realised 10% less than the book value, the Stock realised 15%
more than the book value, Buildings realised `60,000.
b] The Furniture was taken over by Shruti at `20,000.
c] The Machinery was taken over by Shilpa at `15,000.
d] Creditors and Bills Payable were paid off at a discount of 5%.
e] Cost of dissolution amounted to `1,500.
Prepare :
i] Realisation Account
ii] Partners Capital Accounts and
iii] Bank Account
(Ans: Profits on Realization ` 5,500, Final capital balance paid: Shruti
`26,200, Shilpa `21,200, Shreya `23,100 and Bank A/c Total ` 1,27,500.)

6] The following is the Balance Sheet of Disha, Diya and Deepa as on 31.3.2023
Balance Sheet as on 31. 3. 2023
Liabilities ` Assets `
Creditors 15,000 Cash 6,500
Bills payable 1,800 Debtors 8,600
Reserve Fund 6,000 Investments 10,000
Capitls: Stock 13,700
Disha 22,000 Furniture 5,100
Diya 12,000 Buildings 22,900
Deepa 10,000
66,800 66,800

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 57 | P a g e

It was decided to dissolve the partnership firm and the details available
are:
a] Disha took over buildings at `27,750.
b] Deepa took over bills payable at book value.
c] The other assets realised as under:
Debtors `8,000, Investments `8,950, Stock `15,600 and Furniture
`4,500.
d] Realisation expenses amounted to `600.
Prepare :
i] Realisation Account
ii] Partners’ Capital Accounts and
iii] Cash Account.
(Ans: Profits on Realization ` 3,900, Final capital balance paid:
Diya `15,300, Deepa `15,100, Disha brought in cash `2,450 and
Cash A/c Total ` 46,600.

7] Rashmi and Geetha are partners sharing profits and losses in the ratio of
3 : 2. Their Balance Sheet as on 31-3-2023 is as follows :
Balance Sheet as on 31. 3. 2023
Liabilities ` Assets `
Sundry Creditors 10,000 Cash at Bank 5,000
Bills payable 10,000, Bills Receivable 10,000
Rashmi’s Loan 5,000 Sundry Debtors 20,000
Reserve Fund 10,000 Stock 15,000
Capitals: Machinery 15,000
Rashmi 30,000 Furniture 10,000
Geetha 40,000 Goodwill 30,000
1,05,000 1,05,000

On the above date the firm was dissolved.

a] The assets were realised as follows : Bills Receivable `7,500, Sundry
Debtors and Stock @ 10% less than the book value, machinery realized
5% more than the book value, and Goodwill realised for `12,000.
b] Furniture was taken over by Geetha at `8,000.
c] Dissolution expenses were `600.
d] All the liabilities were discharged in full.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 58 | P a g e

Prepare:
i] Realisation A/c
ii] Partners’ Capital Accounts and
iii] Bank A/c
(Ans: Loss on Realisation ` 25,850, Final capital balance paid:
Rashmi`20,490, Geetha `25660, and Bank A/c Total ` 71,750.

8] X, Y and Z are partners sharing profits and losses in the ratio of 3:2:1.
Their Balance Sheet as on 31.3.2023 was as follows:
Balance Sheet as on 31.3.2023
Liabilities ` Assets `

Capitals : Machinery 40,500

X 30,000 Investments 20,830
Y 20,000 Stock in trade 17,550
Z 10,000 Joint Life Policy 14,000
Mrs.Y’s loan 10,000 Debtors 8,700
Creditors 18,500 Profit and loss A/c 1,500
Life Policy Fund 14,000 Cash at bank 5,420
Investment Fluctuation fund 6,000
1,08,500 1,08,500

The firm was dissolved on the above date.

a] Joint life policy is surrendered for `12, 000. Machinery is realised for
`55,000, Stock is realised for `15, 000, Debtors realised `6,150
b] Investments are taken over by Mr. X for `17, 500
c] Mr. Y agrees to discharge his wife’s loan.
d] It is found that an investment not recorded in the books is worth
`3,000. The same is taken over by one of the creditors.
e] Expenses of realisation amounted to `600.
Prepare:
i] Realisation A/c
ii] Partners’ capital Accounts and
iii] Bank A/c
(Ans: Profits on Realization ` 26,470, Final capital balance paid: X `24,985,
Y `38,323, Z ` 14,162 and Bank A/c Total ` 93,570.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 59 | P a g e

9] Amara, Madhura and Prema are partners sharing profits and losses in the
ratio of 2:1:1. Their Balance Sheet as on 31.3.2023 was as follows:
Balance sheet as on 31.3.2023
Liabilities ` Assets `
Bills payable 4,300 Cash in hand 1,000
Creditors 5,700 Bills Receivable 400
Capitals: Stock 20,000
Amara 30,000 Debtors 7,000
Madhura 20,000 Less: PBD 400 6,600
Prema 20,000 Joint Life Policy 4,000
Joint Life Policy Fund 4,000 Machinery 50,000
Prepaid Rent 2,000
84,000 84,000

The firm was liquidated on the above date:

a] Amara took over Joint Life Policy for `5,000
b] Stock realised for `22,000, Debtors realised `4,100 and Machinery
was sold for `58,000.
c] Bills on hand realised in full.
d] One bill for `500 under discount was dishonoured and had to be paid
by the firm.
Prepare:
i] Realization A/c
ii] Partners’ Capital Accounts and
iii] Cash A/c
(Ans : Profits on Realization ` 10,000, Final capital balance paid: Amara
`30,000, Madhura `22,500, Prema `22,500 and Cash A/c Total ` 85,500)

10] Following is the Balance Sheet of Neha, Nisha and Nikki,who share profit
and loss in Proportion of ½ , 1/3 and 1/6. They dissolved their firm on
31.3. 2023.
Balance Sheet as on 31. 3. 2023
Liabilities ` Assets `
Creditors 12,000 Cash 11,000
Bills Payable 13,000 Debtors 8,000
Capitals : Less: PBD 400 7,600
Neha 20,000 Stock 12,400
Nisha 15,000 Furniture 5,000
Nikki 10,000 Motor Van 40,000
Profit and Loss Account 6,000
76,000 76,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 60 | P a g e

The details available are:
a] Assets realised as follows:
Debtors `10,800; Stock `16,000; Furniture `6,000; motor van `45,000.
b] Creditors and Bills payable were paid in full.
c] There was an outstanding bill for repairs which had to be paid for `200.
d) Expenses of realisation amounted to `600.
Prepare :
i] Realisation Account
ii] Partners' Capital Accounts and
iii] Cash Account.
(Ans: Profits on Realization ` 12,000, Final capital balance paid: Neha
`29,000, Nisha `21,000, Nikki ` 13,000 and Cash A/c Total ` 88,800.)

11] Arun, Kiran and Arjun were partners sharing profits and losses equally.
Their Balance Sheet as on 31. 3. 2023 was as follows :
Balance Sheet as on 31. 3.2023
Liabilities ` Assets `
Sundry Creditors 12,000 Cash at bank 6,000
Bank Loan 24,000 Bills Receivable 6,000
Arun’s loan 22,000 Debtors 25,000
Reserve fund 12,000 Stock 20,000
Capitals : Arun 40,000 Investments 8,000
Kiran 30,000 Furniture 10,000
Arjun 20,000 Buildings 85,000
1,60,000 1,60,000
On the above date the firm was dissolved. The following information is
available:
a] The assets were realised as follows: Bills receivable `5,000, Debtors
`23,500, Stock `18,000 and Buildings `95,000.
b] Investments were taken by Kiran at `10,000 and Furniture was taken
over by Arjun at ` 8,000.
c] All the liabilities were paid in full.
d] Dissolution expenses amount to `2,500.
Prepare :
i] Realisation Account
ii] Partners’ Capital Accounts and
iii] Bank Account.
(Ans: Profits on Realization `3,000, Final capital balance paid: Arun
`45,000, Kiran `25,000, Arjun `17,000 and Bank A/c Total `1,47,500.)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 61 | P a g e

12] Mohan, Nagaraju and Prakash are partners sharing profits and losses in
the ratio of 4:3:2. Their Balance sheet as on 31. 3. 2023 was as follows :
Balance Sheet as on 31. 3. 2023

Liabilities ` Assets `

Creditors 25,000 Cash 9,000

Bills Payable 17,000 Debtors 27,000
Prakash’s Loan 10,000 Stock 15,000
Reserve Fund 18,000 Investments 5,000
Capitals : Mohan 30,000 Furniture 14,000
Nagaraj 20,000 Buildings 40,000
Prakash 10,000 Goodwill 20,000
1,30,000 1,30,000

On the above date the firm was dissolved and following information is
available.
a] The assets realised as follows:
Debtors realised 10% less than the book value, Investments realized
20% more than the book value, Buildings realised `60,000, Stock
realised `12,000 and Furniture sold for `15,000.
b] Goodwill is taken over by Mohan at `15,000
c] Creditors and Bills payable are settled at discount of 5% each.
d] Realisation expenses `2,000.
Prepare:
i] Realisation Account
ii] Capital Accounts of Partners and
iii] Cash Account.
(Ans: Profits on Realization 11,400, Final capital balance paid: Mohan
`28067, Nagaraj `29,800, Prakash `16,563 and
Bank A/c Total `1,26,300.)

13] Harish and Suresh are partners sharing profits and losses equally. They
agreed to dissolve their partnership on 31.3.2023. Their Balance Sheet
was as follows;

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 62 | P a g e

Balance Sheet as on 31. 3. 2023
Liabilities ` Assets `
Creditors 25,000 Cash at bank 14,000
Bills Payable 10,000 Bills Receivable 5,000
Suresh’s Loan 10,000 Stock 18,000
Reserve fund 5,000 Debtors 25,000
Capitals: Harish 40,000 Less: PBD 3,000 22,000
Suresh 30,000 Buildings 23,000
Machinery 38,000
1,20,000 1,20,000

On the above date firm was dissolved. The following information is

available :
i] Stock `25,000, Debtors `20,000, Bills Receivable `4,000 and
Machinery ` 33,000.
ii] Creditors are taken over by Harish at book value.
iii] Bills payable were paid by the firm at 5% discount.
iv] Suresh paid the realisation expenses of `1000 and he was to get a
remuneration of `2,000 for completing dissolution process.
Prepare:
a] Realisation Account
b] Partners’ Capital Accounts and
c] Bank Account.
(Ans: Realisation loss `2,500, Final Capital balances paid: Harish `66,250,
Suresh `33,250 and Bank A/C Total `1,19,000.)

14] Appu, Abhi and Akash were partners in a firm sharing profit and losses in
the ratio of 2:1:1. Their Balance Sheet on the date of dissolution was as
follows:
Balance Sheet as on 31.3.2023
Liabilities ` Assets `
Creditors 20,000 Bank 8,000
Loan from Appu 5,000 Debtors 20,000
Loan from Akshay 2,000 Stock 25,000
P&L A/c 6,000 Furniture 10,000
Capital A/C Machinery 15,000
Appu 20,000
Abhi 15,000
Akash 10,000
78,000 78,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 63 | P a g e

The following information is available:
a] The assets were realized as follows: Debtors realized at 10% less and
stock realized 10% more than the book value
b] Furniture was taken over by Appu at an agreed value of `8000.
c] Machinery was taken over by Abhi at `12000.
d] Creditors were paid off at a discount of 5% each.
e] Cost of dissolution amounted to `500
Prepare:
a] Realisation A/c
b] Partners Capital Accounts and
c] Bank A/c
(Ans: Realisation loss `4,000, Final Capital balances paid: Kamal `13,000,
Vimal `3,500, Nirmal `10,500, Bank A/C Total `53,500.)

15] Akash , Prithvi and Sagar are partners sharing profits and losses in ratio
of 1/2, 1/3 and 1/6 . They agreed to dissolve their firm on 31.3.2023, on
which date the Balance Sheet was as follows:
Balance Sheet as on 31.3.2023
Liabilities ` Assets `
Creditors 18,000 Cash in hand 6,000
Bills Payable 18,000 Bills Receivable 6,000
Akash’s Loan 12,000 Stock 20,000
Capitals : Debtors 25,000
Akash 45,000 Investment 8,000
Prithvi 30,000 Furniture 10,000
Sagar 15,000 Buildings 75,000
Reserve Fund 12,000
1,50,000 1,50,000

The following information is available.

a] Assets realised as follows : Bills Receivable ₹5,000, Stock ₹18,000,
Furniture `8,000, Buildings `80,000, Investments `10,000.
b] Debtors for `2,500 proved to be bad.
c] All liabilities were paid in full.
d] Firm had to pay `3,000 for outstanding salary not provided for earlier.
e] Cost of dissolution amounted to `2,500.
Prepare:
1] Realisation A/c
2] Partners’ Capital Accounts and
3] Bank A/c
(Ans: Realisation loss `6000, Final Capital balances paid: Akash `48000,
Prithvi `32000 and Sagar `16000, Bank A/c Total `149500.)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 64 | P a g e

16] The following is the Balance Sheet of Hari, Giri and Suri as on 31.3.2023:
Balance sheet as on 31.3.2023
Liabilities ` Assets `
Creditors 2,400 Cash 2,000
Bills Payable 5,400 Bank 4,000
Capitals : Bills Receivable 4,000
Hari 10,000 Stock 9,400
Giri 11,000 Debtors 3,000
Suri 6,200 Less :PBD 300 2,700
Land and Buildings 12,000
Profit and Loss A/C 900
35,000 35,000

The firm is dissolved on the above date.

a] The assets realised as follows:
a. B/R `3,850.
b. Debtors 5% less than book value.
c. An unrecorded asset realised `150.
b] Suri took over Land and Buildings at 10% more than the book value.
c] The Bills Payable are taken over by Hari.
d] Expenses of realisation are `450.
Prepare:
1] Realisation A/c
2] Partners’ Capital Accounts and
3] Bank A/c
(Ans: Realisation profits `900, Final Capital balances paid: Hari `15,400,
Giri `11,000, Suri brought in `7,000, Bank A/C Total `29,250.)

17] Thanu and Sonu are partners sharing profits and losses in the ratio of 5:3
They agreed to dissolve their firm on 31.3.2023, on which date the
Balance Sheet was as follows:
Balance Sheet as on 31.3.2023
Liabilities ` Assets `
Sundry Creditors 62,000Cash at Bank 16,000
Bills Payable 32,000Stock 75,000
Bank Loan 50,000Sundry Debtors 55,000
Capitals : Investments 70,000
Thanu 1,10,000 Motor Car 90,000
Sonu 90,000 Machinery 45,000
Reserve Fund 16,000 Fixtures 9,000
3,60,000 3,60,000
On the above date the firm is dissolved and the following agreement was made:

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 65 | P a g e

Thanu agree to pay the bank loan and took away the sundry Debtor Sundry
Creditors accepts Stock and paid ` 10,000 to the firm.
Machinery is taken over by Sonu for `40,000 and agreed to pay Bills Payable at a
discount of 5%. Motor Car was taken over by Thanu for `60,000. Investment
realized `76,000 and Fixtures `4,000. The expenses of realization amounted to
`2,200.
Prepare: 1] Realisation A/c
2] Partners’ Capital Accounts and
3] Bank A/c
(Ans: Realisation loss `37,600, Final Capital balances paid: Tanu
`31,500, Sonu `72,300, and Bank A/C Total `1,06,000 .)

18] Appu, and Arasu were partners in a Firm. Their Balance Sheet as on
31.3.2023 was as follows:
Balance Sheet as on 31.3.2023
Liabilities ` Assets `
Creditors 10,000
Cash 5,000
Bills Payable 6,000
Debtors 15,000
Bank O/D 4,000
Stock 18,000
Mrs. Arasu’s Loan 5,000
Furniture 12,000
Profit & Loss A/c 8,000
Machinery 20,000
Capitals: Buildings 50,000
Appu 52,000 Goodwill 10,000
Arasu 45,000
1,30,000 1,30,000

On the above date, they decided to wind up the firm. The following
information is available.
a] Debtors realied less 10%, stock realised 10% more and building realized
`62,000. Vehicle which was unrecorded realised `4,000
b] Furniture was taken over by Anil at a valuation of `9,000.
c] Creditors to be settled at 10% less and interest on Bank O/D due `500 also
to be paid off.
d] Arasu took over his wife’s loan
e] Dissolution expenses amounted to `3,000
Prepare:
1] Realization A/c
2] Partners’ Capital Accounts and
3] Cash A/c
(Ans: Realisation profits ` 800, Final Capital balances paid: Appu ` 47,400,
Arasu `54,400, Cash A/C Total `1,24,300)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 66 | P a g e

19] Ganga and Yamuna partners in a Firm, sharing profits and losses equally.
They agreed to dissolve their firm on 31.3.2023, on which date the Balance
Sheet was as follows:
Balance sheet as on 31.3.2023
Liabilities ` Assets `
Creditors 50,000 Cash at bank 25,000
Bills Payable 30,000 Bills Receivable 20,000
Reseve Fund 10,000 Stock 30,000
Capitals : Debtors 40,000
Ganga 75,000 Buildings 50,000
Yamuna 60,000 Motor car 20,000
Furniture 40,000
2,25,000 2,25,000
a] Assets realised as follows:
Stock `30,400, B/R `19,000, Furniture `33,000, Debtors realised
`42,600(with interest) and `2,000 were recovered for bad debts
written off last year.
b] Ganga took over Buildings at `60,000, Yamuna agreed to take over
motor car at `26,600
c] All the liabilities were paid in full
d] Realisation expenses were amounted to `5,000
Prepare:
1] Realisation A/c
2. Partners’ Capital Accounts and
3. Bank A/c
(Ans: Realisation profits `8,600, Final Capital balances paid:
Ganga `24,300, Yamuna `42,700, and Bank A/C Total `1,52,000.)

20] Anu and Tanu are partners sharing profits and losses 3:2 . They agreed to
dissolve their firm on 31.3.2023 when their Balance Sheet was as follows:
Balance Sheet as on 31.3.2023
Liabilities ` Assets `
Capitals : Machinery 70,000
Anu 90,000 Investments 50,000
Tanu 80,000 1,70,000 Stock 22,000
Reserve Fund 10,000 Sundry Debtors 1,03000
Creditors 60,000 Cash at bank 15,000
Bills Payable 20,000
2,60,000 2,60,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 67 | P a g e

The assets and liabilities were disposed of as follows:
a] Machinery were given to creditors in full settlement of their account and
Stock were given to Bills Payable in full settlement.
b] Tanu took over Investments at book value. Sundry Debtors of book value
`50,000 were taken over by Anu at 10% less and remaining Debtors
realised `51,000.
c] Realisation expenses were amounted to `2,000
Prepare:
1] Realisation A/c
2] Partners’ Capital Accounts and
3] Bank A/c
(Ans: Realisation Loss `21,000, Final Capital balances paid: Anu
`38,400, Thanu `25,600, and Bank A/C Total `66,000.

21] Sanjay and Veneet are partners sharing profits and losses in the ratio of
3:2 . On 31.3.2023 their Balance Sheet was as follows:
Balance Sheet as on 31.3.2023
Liabilities ` Assets `

Capitals : Plant 90,000

Sanjay 1,50,000 Debtors 60,000
Vineet 1,20,000 2,70,000 Furniture 32,000
Creditors 80,000 Stock 60,000
Bills Payable 30,000 Investments 70,000
Bills Receivable 36,000
Cash in hand 32,000
3,80,000 3,80,000

On the above date the firm was dissolved. Sanjay was appointed to realise
the assets. Sanjay was to receive 6% commission on the sale of assets
(except cash) and was to bear all expenses of realisation.
a] Sanjay realised the assets as follows:
Plant `72,000, Debtors `54,000, Furniture `18,000, Stock 90% of
book value, Investments `76,000 and Bills Receivable `31,000.
b] One of the Creditors for `1,300 did not claim the amount.
c] Expenses of realisation amounted to `4,500.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 68 | P a g e

Prepare:
1] Realisation A/c
2] Partners’ Capital Accounts and
3] Cash A/c
(Ans: Realisation Loss `60,000, Final Capital balances paid: Sanjay
`1,27,800, Vineet `96,000 and Cash A/C Total `3,37,000.)

Key answer for short questions :

MCQ
1] c 2] d 3] b 4] b 5] c 6] a 7] b 8] c 9] 10]
11] a 12] c 13] d 14] a 15] b

True or False
8] F 9] T 10] F 11] F 12] T

FILL IN THE BLANKS

1] debit 2] external 3] profit sharing 4] credited
5] debited 6] creditor 7] realization 8] pay
9] not transferred 10] capital
MATCH THE FOLLOWING
a] ii b] i c] v d] iii e] vi

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 69 | P a g e

CHAPTER - 05

ACCOUNTING FOR SHARE CAPITAL

PART - A
One Mark Questions:
I] Multiple Choice Questions:
1] Equity share holders are :
a] Creditors
b] Customer of the company
c] Owners
d] Debtors
2] Nominal share capital is :
a] That part of the authorised capital which is issued by the company.
b] The amount of capital which is actually applied for by the prospective
shareholders
c] The maximum amount of share capital which a company is authorized
to issue.
d] The amount actually paid by the shareholders.
3] Interest on calls in arrears is charged according to “Table F” at:
a] 10%
b] 6%
c] 8%
d] 11%
4] Money received in advance from shareholders before it is actually called-up
by the directors is :
a] Debited to calls in advance account
b] Credited to calls in advance account
c] Debited to calls account
d] Credited to calls account
5] Shares can be forfeited:
a] For non- payment of call money
b] For failure to attend meeting
c] For failure to repay the loan to the bank
d] For which shares are pledged as a security.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 70 | P a g e

6] The profit on reissue of forfeited shares is transferred to :
a] general reserve
b] capital redemption reserve
c] capital reserve
d] revenue reserve
7] Balance of share forfeited account is shown in the balance sheet under the
item :
a] Current liabilities and provisions
b] Reserves and Surplus
c] Share capital
d] Unsecured loan
8] Issue of share capital is a part of :
a] Reserve capital
b] Unissued capital
c] Authorised capital
d] Uncalled capital
9] Maximum numbers of members in a private company is
a] 40
b] 200
c] 70
d] 100
10] An instances when more applications are received than the number offered
to the public
a] Less offers
b] over subscription
c] under subscription
d] More offer
11] Paid up capital is a part of
a] Called up capital
b] Reserve capital
c] Authorised capital
d] Subscribed capital
12] If a shareholder fails to pay call money, it is called
a] First call
b] Calls in advance
c] Calls in arrears
d] First and final call

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 71 | P a g e

13] From the date of issue of prospectus the company to get minimum
subscription with in
a] 120 days
b] 130 days
c] 100 days
d] 125 days
14] The amount received in advance is a ____________of the company.
a] Liability
b] Assets
c] Expenses
d] Income

II. Fill in the blanks:

1] A company is an _________________person.
2] ___________is the part of the issued capital.
3] The directors of a company must be a _________.
4] Call money received in advance I called__________.
5] __________is the minimum paid up capital of a Public Company.
6] Minimum paid up capital of a private company is _________
7] ___________months must elapse between two calls.
8] __________is the minimum number of members in a private company.
9] Capital Reserve are created out of ___________________.
10] The amount of buy back of shares in any financial year should not exceed
__________%of the paid up capital.
11] Profit on forfeiture of shares is transferred to_______ account.

III. MATCH THE F0LLOWING:

A B
1] Equity shares (i) unpaid calls
2] Common seal (ii) amount less than the nominal/face value of shares
3] Shares (iii) excess amount
4] Prospectus (iv) liability of the company
5] Subscribed capital (v) steps in the procedure of share issue
6] Allotment of shares (vi) part of issued capital
7] premium (vii) fractional part of the capital

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 72 | P a g e

8] calls in Arrears (viii) ordinary shares
9] calls in advance (ix) an invitation to the public by new company
10] issue of shares at (x) official signature of the company
discount

IV. VERY SHORT ANSWER QUESTIONS:

1] State any one kind of company.
2] What is issued capital?
3] What is buy-back of shares?
4] Share application account is a liability account.(true or false)
5] When the Reserve Capital is used?
6] What is Over subscription?
7] What is under subscription?
8] What is issue of shares at Par?
9] What is issue of shares at Premium?
10] When the shares are forfeited?
11] State any one type of shares.
12] Expand OPC.
13] Share application account is a liability account. (true/false)
14] Company’s share are generally transferable (true/ false)
15] Paid up capital may exceed called capital. (true/false)
16] Forfeiture of shares is cancellation of the rights of shareholders. (true/false)
17] The Articles of the Association must authorize the company for the buy-
back of shares. (true/false)
PART-B
1] What is company?
2] State any two features of company.
3] What is Prospectus?
4] What is calls in arrears?
5] Stat any two methods of issue of shares.
6] What is issue of shares for consideration other than cash?
7] What is forfeiture of shares?
8] Give the journal entry for transfer of profit on re-issue of forfeited shares.
9] Name any two categories of share capital.
10] Give the journal entry for transfer of Share application money.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 73 | P a g e

12 MARKS PROBLEMS
1] Konica company Ltd., issued 10,000 shares of ₹100 each. The amount
was payable as follows:
` 10 per share on application

`40 per share on allotment

`50 per share on first and final call.

All the shares were allotted and money duly received except the first and
final call on 2000 shares. The directors forfeited these shares and re-issue
at `80 per share as fully paid up.
Pass the necessary journal entries in the books of Konica Company Ltd.

2] White company ltd., issued `20,000 equity shares of `10 each. The
amount payable is as follows:
`2 per share on application

`3 per share on allotment

`5 per share on first and final call.

All shares were subscribed and the money duly received except the first
and final call on 500 shares. The directors forfeited these shares and then
these forfeited shares were re issued at `7 per share as fully paid up.
Pass the necessary journal entries.

3] ‘Z’ co. Ltd., has a Registered Capital of `5,00,000 divided into equity
shares of `10 each. Of these, 40,000 shares were issued to the public. The
amount was payable as follows:
On application `2
On allotment `5
On first and final call `3
All the shares were subscribed and the money duly received except the
first and final call on 2000 shares. These shares were forfeited and re-
issued at `8 per share as fully paid –up. Pass the journal entries in the
books of the company.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 74 | P a g e

4] GN company Ltd., issued 10,000 equity shares of `10 each, payable as
follows:
`3 per share on application,
`3 per share on allotment
`4 per share on first and final call.
All the share were subscribed and the money duly received with the
exception of first and final call on 1000 shares. The directors forfeited
these shares and reissued them at ` 9 per share as fully paid up.
Pass the necessary journal entries in the books of the company.

5] The Gama Company Ltd issued 60,000 Equity Shares of `10 each. share
payable as follows:
On application `3
On allotment `3
On first and final call `4
All the Shares were subscribed and the money duly received except the first
and final call money on 1,500 shares held by Mr. Sudesh. These Shares were
forfeited and only were re-issued to Mr. Naresh at `8 per share, as fully paid.
Pass the necessary journal entries.

6] ‘A’ Company issued 5,000 Equity shares of `100. The amount was payable
as follows:
On application `20
On allotment `40
On first call and final call `40 All the shares were subscribed and the
money duly received except final call money on 200 Equity Shares held by
Dinesh. These shares were forfeited and then re-issued to Mahesh at `80
per share, fully paid-up.
Pass the journal entries.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 75 | P a g e

ISSUE OF SHARES AT PREMIUM
(WITH FORFEITURE AND REISSUE)
1] Supreme co. ltd., issued 10,000 shares of `100 each at a premium of `10
per share. The amount was payable as follows:
On application `20 per share
On allotment `50 per share (including premium)
On first and final call `40 per share
All the shares were subscribed and the money duly received except the
first and final call on 500 shares. The Directors forfeited these shares and
reissued them as fully paid at `80 per share.
Pass the necessary journal entries in the books of the Supreme company.

2] Estrun co. Ltd., issued 40,000 equity shares of `10 each at a premium of
`2 per share. The amount was payable as follows.

`2 on application

`6 on allotment (including premium)

`4 on first and final call

All the shares were subscribed and the money duly received except the
first and final call on 2000 equity shares. The directors forfeited these
shares and reissued them as fully paid up at `8 per share.
Pass the necessary journal entries in the books of the company.

3] XYZ Co. Ltd. issued 30,000 equity shares of `10 each at a premium of
Re.1 per share to the public. The amount payable was payable as follows:
`2 on application

`5 on allotment (including premium)

`4 on first and final call

All the shares were subscribed and the money duly received except the
first and final call on 2,000 shares. The Directors forfeited these shares
and re-issued them as fully paid-up at `8 per share. Pass the necessary
Journal entries in the books of a company.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 76 | P a g e

4] Sun India Ltd. issued 20,000 Equity Shares of `100 each at premium of
`10 each.
The amount payable was as follows:
`20 on application
`50 on allotment (including premium)
`40 on first and final call
All the shares were subscribed and money duly received except the first
and final call on 1,000 shares. The Directors forfeited these shares and re-
issued them as fully paid at `90 per share.
Pass the journal entries regarding issue, forfeiture and reissue of Equity
Shares.

5] Harsha Co. Ltd. issued 10,000 Preference Shares of `100 each at a

premium of `5 per share, the amount was payable as follows:
`10 on application
`50 on allotment (including premium)
`45 on first and final call
All the shares were subscribed and the money duly received except the
first and final call on 500 shares. The Directors forfeited these shares and
re-issued at `80 each fully paid. Pass the necessary Journal entries in the
books of the company.

6] Mandya Sugar Co. Ltd. issued 40,000 equity shares of `10 each premium
of
`2 per share. The amount was payable as follows:
`2 on application
`6 on allotment (including premium)
`4 on first and final call
All the shares were subscribed and the money duly received except the
first and final call on 2,000 equity shares. The Directors forfeited these
shares and re-issued them as fully paid-up at `8 per share. Pass the
necessary Journal entries in the books of the company.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 77 | P a g e

7] Sagar Company Ltd. issued 10,000 shares of `100 each at a premium of
`10 per share. The amount was payable as follows:
On applications `20
On allotments `50(including premium)
On First and Final call `40
All the shares were subscribed and the money duly received except the
first and final call on 500 shares. The Directors forfeited these shares and
re-issued them as fully paid at `80 per share. Pass the Journal entries in
the books of the company.

8] The Rajesh Trading Company Ltd issued 10,000 shares of `10 each at
premium of
`2 per share payable as follows:
On application `2
On allotment `6[including premium]
On first and final call `4
All the shares were subscribed and the money duly received except the
first and final call on 1,000 shares. These shares were forfeited and only
800 shares are re-issued at `8 each as fully paid-up.
Pass the journal entries in the books of the company.

9] A Mining Company Ltd, invited applications for 50,000 equity shares of

`100 each at premium `10 per share. The amount was payable as follows:
On application `20
On allotment `60 [including premium]
On first and final call `30
All the shares were subscribed and money duly received with the exception
of the first and final call on 5,000 shares and the Directors forfeited these
shares and re-issued as fully paid at `70 per share. Pass the journal
entries in the books of the company.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 78 | P a g e

OVER SUBSCRIPTION
ISSUE OF SHARES AT PAR (FROFEITURE AND REISSUE)
1] HB co. ltd., issued 10,000 equity shares of `100 each. The amount was
payable is as follows:
On application `20
On allotment `30
On first and final call `50
Application were received for 12000 shares. Excess application money
refunded. The money was duly received except the first and final call on
1000 shares. The directors forfeiture these share and reissued at `80 per
share as fully paid up.
Pass the necessary journal entries in the books of the company.

2] Excellent Company Ltd., issued 10,000 Equity shares of `10 each. The
amount was payable as follows:
On application `2
On allotment `3 and
On first and final call `5
Application were received for 12,000 Equity shares. The directors refunded
excess application money on 2000 Shares. All the money was duly received
except the first and final call money on 1000 shares held by Niraj. His shares
were forfeited by the Directors of the company. These shares were re-issued
at `8 per share as fully paid.
Pass the necessary journal entries.

3] Avtar Company Ltd., has a Registered capital of `5,00,000 divided into

equity shares of `10 each of these, 40,000 shares were issued to the
public. The amount was payable as follows:
`2 on application
`5 on allotment and
`3 on first and final call.
Application were received for 45,000 shares. Excess money on 5000 shares
were refunded and the money was duly received except the first and final
call on 500 shares held by Tejas. The directors forfeited these share and re-
issued to Sanjay at `8 per share as fully paid up.
Pass the necessary journal entries in the books of Avtar co. Ltd.,

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 79 | P a g e

4] ABC company Ltd., issued 20,000 Equity shares of `10 each. The amount
was payable is as follows:
On application `2
On allotment `3
On first and final call `5
Applications were received for 25,000 shares, excess money application
money refunded and the money was duly received except the first and final
call on 500 shares held by Akash. The Directors forfeited these share and
then re issued to sagar at `7 per share as fully paid-up.
Pass the necessary journal entries.

5] AB co. ltd., issued 10,000 equity shares of `100 each. The amount was
payable is as follows:
On application `2
On allotment `3
On first and final call `5
Application were received for 12000 shares. Excess application money
refunded. The money was duly received except the first and final call on 500
shares. The directors forfeiture these share and reissued at `8 per share as
fully paid up.
Pass the necessary journal entries in the books of the company.

UNDER SUBSCRIPTION
ISSUE OF SHARES AT PAR (FROFEITURE AND REISSUE)
1] Sunshine Company Ltd., issued 10,000 shares of `10 each payable as
follows:
`3 per share on application
`3 per share on allotment
`4 per share on I and final call
The company received applications for only 9000 shares and all the shares
were allotted and the money duly received except the first and final call on
500 shares. These share were forfeited and re issued to Madhu as fully paid
at `9 per share.
Give necessary journal entries in the books of the company.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 80 | P a g e

2] Novelties Ltd., invited applications for 10,000 shares of `100 each payable
as follows:
On Application `25
On allotment `40
On first and final call `35
The application received for only 9000 shares and all the shares were
allotted and the money duly received except the first and final call on 100
shares. These shares were forfeited and reissued at `9 per share fully paid.
Give necessary journal entries in the books of the company.

3] Anand company Ltd., issued 10,000 shares of `100 each. The net amount
payable as follows:
`20 on application
`40 per share on allotment
`40 on share first and final call
The application received for only 9000 shares and a shareholder holding 200
shares did not pay final call. His shares were forfeited. All the shares were
reissued to Mr. Rakshith at `75 per share. Give journal entries in the books
of the company.

4] Fine art Co. Ltd., issued 50,000 shares of `10 each to public. The amount
payable as follows:
On application `4
On allotment `3
On first call and final call `3
The application received for only 45000 shares All the shares were
subscribed and the money duly received except final call money on 500
shares. These shares were forfeited and then re-issued at `8 per share, fully
paid-up.
Pass the journal entries.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 81 | P a g e

5] Fine art Co. Ltd., issued 50,000 shares of `100 each to public. The
amount payable as follows:
On application `20
On allotment `40
On first call and final call `40
The application received for only 45000 shares All the shares were
subscribed and the money duly received except final call money on 500
shares. These shares were forfeited and then re-issued at `8 per share, fully
paid-up.
Pass the journal entries.

Key answer for short questions :

MCQ
1. b. 2. c. 3. a. 4. b. 5. a. 6. c. 7. c. 8. c. 9. b. 10. b. 11. a.
12. c. 13. a`. 14. a.

FILL IN THE BLANKS

1. Artificial 2. Subscribed capital 3. Shareholders 4. Calls in advance
5. 5 lakhs 6. 1 lakh 7. One 8. Two
9. Capital profit. 10 . 25 11. Capital reserve

MATCH THE FOLLOWING

1] viii 2] x 3] vii 4] iv 5] vi 6] v 7] iii 8] i 9] iv 10] ii

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 82 | P a g e

CHAPTER - 06

ISSUE AND REDEMPTION OF DEBENTURES

PART - A
One Mark Questions:
I] Multiple Choice Questions:
1] Debentures which are transferable by mere delivery are:
a] Registered debentures
b] First debentures
c] Bearer debentures
d] Secured debentures
2] Debenture holders are
a] Owners of the company
b] Lenders of the company
c] Debtors of the company
d] Trustees of the company
3] Excess value of net assets over purchase considerations at the time of
purchase of business is credited to:
a] General reserve
b] Capital reserve
c] Vendor’s account
d] Assets account.
4] Own debentures are those debentures of the company which:
a] The company allots to its own promoters
b] The company allots to its Director
c] The company purchases from the market and keeps them as investment
d] The company allots to the public.
5] Premium on Redemption of Debentures A/C is _______ A/c
a] Assets
b] Income
c] Liability
d] Expenses

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 83 | P a g e

6] loss on issue of debentures is treated as:
a] intangible assets
b] currents assets
c] current liability
d] miscellaneous expenses
7] in the event of liquidation of the company, the debenture holders have
priority
a] interest
b] principal amount
c] both (a) and (b) above
d] discount
8] debentures cannot be redeemed at:
a] premium
b] Discount
c] Par
d] More than 10% premium
9] Debentures cannot be redeemed out of:
a] Profits
b] Provisions
c] Capital
d] Reserves
10] A company issued 2,000, 8% debentures of `100 each at par value
redeemable at 10% premium. 8% stands for:
a] Rate of Dividend
b] Rate of tax
c] Rate of interest
d] Rate of TDS
11] X company Ltd, purchased machinery for `20,000, payable `6,500 in cash
and the balance by issue of 12% debentures of `100 each at a discount of
10%. How many debentures would be required to issue to the vendor?
a] 155 debentures of `100 each
b] 150 debentures of `100 each
c] 135 debentures of `100 each
d] 145 debentures of `100 each

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 84 | P a g e

12] XYZ company Ltd issued 5,000 6% debentures of ₹100 each at Par and are
redeemable at 10% premium. Premium on redemption will be debited at the
time of issue of debentures to:
a] Loss on Issue of Debentures A/c
b] Share Discount A/c
c] Security premium A/c
d] General reserve A/c
13] Methods of Redemption of Debentures are:
a] By annual drawings
b] By profit
c] By payment in lump sum
d] By using general reserve fund
14] If the market price of the Debentures is more than the face value, at the
time of Redemption this will be a capital loss and is transferred to;
a] Capital reserve
b] General reserve
c] Profit on redemption of Debentures
d] Loss on Redemption of Debentures
15] The following journal entry appears in the books of a company.
Bank A/c Dr. 9,50,000
Loss on issue of debentures A/c Dr. 1,50,000
To 8% Debentures A/c 10,00,000
To premium on Redemption of debentures A/c 1,00,000
In this case, Debentures are issued at a discount of _________%
a] 15%
b] 5%
c] 10%
d] 8%

II. FILL IN THE BLANKS:

1] Debentures issued as collateral security will be debited to ________A/c
2] Discount on issue of debentures is a __________ assets
3] Coupon rate is ___ at which the amount is paid by the company on its
debentures.
4] When all the debentures are redeemed, Debenture redemption reserve A/c
is credited to _____A/c.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 85 | P a g e

5] NBFC registered with the RBI create redemption reserve equivalent to at
least ________ of the value of outstanding debentures issued through
public issue.
6] Withdrawal from Debenture Redemption Reserve is permissible only after
_____ of debentures have been redeemed.
7] In case of conversion of the debentures into shares, Debenture holders’
A/c is debited and ___________ A/c is credited.
8] If own debentures are purchased by the company for the ________ purpose,
own debentures will be shown as an asset in the Balance Sheet.
9] Debentures which are transferable by mere delivery are called _________
debentures.
10] Debentures A/c is shown under the head ________ in the Balance Sheet.

III. MATCH THE FOLLOWING

A B
1] secured debentures (i) discharge of liability
2] Irredeemable debentures (ii) Capital loss
3]discount on issue of debenture is (iii Terms of issue of debentures
4] Issued at par and redeemable at par (iv) perpetual debentures
5] redemption of debentures (v) type of debentures

IV. VERY SHORT ANSWER QUESTIONS:

1] What is meant by Debentures?
2] What is bond?
3] What is coupon Rate?
4] What do you mean by Zero coupon rate debentures?
5] What is meant by issue of debentures for consideration other than cash?
6] What do you mean by the issue of debentures as a collateral security?
7] Name any one method of redemption of debentures.
8] What do you mean by redemption of debentures?
9] Expand D R R.
10] Expand D R F I.
11] Expand A I F Is.
12] State any one type/kind of debentures.
13] Debenture holders are not the members of the company.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 86 | P a g e

14] Redemption of debentures is made by the company is accordance with the
terms of issue. [State True or False]
15] A company can issue irredeemable debentures. [State True or False]
16] Debenture is a part of loaned capital. [State True or False]
17] Debenture holders have voting rights. [State True or False]
18] Debentures bear fixed interest. [State True or False]
19] Debentures cannot be issued at a discount for more than 10% of the face
value. [State True or False]
20] Loss on issue of debentures is a revenue loss. [State True or False]

PART-D
12 MARKS PROBLEMS
1] Give the journal entries for the following:
a] Issue of `2,00,000, 10% debentures of `100 each at par and
redeemable at a premium of 5%.
b] Issue of `2,00,000, 10% debentures of `100 each at a discount of 5%
but redeemable at a par.
c] Issue of `2,00,000, 10% debentures of `100 each at a premium of 5%
and redeemable at a par.
d] Issue of `2,00,000, 10% debentures of `100 each at a premium of 5%
and redeemable at a premium of 5%.

2] Pass the journal entries for the followings:

a] Issue of `50,000, 8% debentures of `100 each at a discount of 10%
and redeemable at a par.
b] Issue of `50,000, 8% debentures of `100 each at a premium of 10%
and redeemable at a par.
c] Issue of `50,000, 8% debentures of `100 each at a premium of 10%
and redeemable at a premium of 10%.
d] Issue of `50,000, 8% debentures of `100 each at a discount of 10%
and redeemable at a premium of 10%.

3] Give the necessary journal entries for the following:

a] Issue of `1,00,000, 10% debentures of `100 each at a discount of
10% and redeemable at par.
b] Issue of `2,00,000, 10% debentures of `100 each at a premium of
10% and redeemable at a premium of 10%.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 87 | P a g e

c] Issue of `3,00,000, 10% debentures of `100 each at a premium of
10% but redeemable at par.
d] Issue of `4,00,000, 10% debentures of `100 each at par and
redeemable at a premium of 10%.

4] Pass the necessary journal entries for the followings:

a] Issue of 300, 8% debentures of `100 each at a premium of 10% and
redeemable at a par.
b] Issue of 300, 8% debentures of `100 each at par but redeemable at
a premium of 10%.
c] Issue of 300, 8% debentures of `100 each at a discount of 10% and
redeemable at a premium of 10%.
d] Issue of 300, 8% debentures of `100 each at a premium of 5% and
redeemable at a premium of 5%.

5] Give the journal entries for the followings:

a] Issue of 1000, 12% debentures of `100 each at par but redeemable at
a premium of 8%.
b] Issue of 1000, 12% debentures of `100 each at par and redeemable at
par.
c] Issue of 1000, 12% debentures of `100 each at a discount of 10% but
redeemable at par.
d] Issue of 1000, 12% debentures of `100 each at a discount of 5% but
redeemable at a premium of 5%.

Problems on Issue of Debentures and Debentures interest

1] Alpha Company Ltd issued 1,000, 10% debentures of `100 each on April
01, 2016 at a discount of 10% redeemable at a premium of 10%. Pass
journal entries relating to the issue of debentures and debentures interest
for the period ending March 31, 2017 assuming that interest was paid half
yearly on September 30 and March 31 and tax deducted at source is 10%.

2] Suvidha Company Ltd issued 3,000, 8% debentures of `100 each on April

01, 2016 at par and redeemable at a premium of 5%. Give journal entries
relating to the issue of debentures and debenture interest assuming that
interest was paid annually on 31st March 2017 and 31stMarch 2018 for two
years and tax deducted at source is 20%.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 88 | P a g e

3] XYZ Company Ltd. issued 2,000, 12% debentures of `100 each on April 01,
2016 at a premium of 10% and redeemable at par. Give journal entries
relating to the issue of debentures and debenture interest assuming that
interest was paid annually on 31st March 2017 and 31st March 2018 for two
years and tax deducted at source is 20%.

4] ABC Company Ltd issued 1,000, 9% debentures of `100 each on April 01,
2016 at a discount of 10 and redeemable at par. Give journal entries relating
to the issue of debentures and debenture interest assuming that interest
was paid half yearly on September 30thand March 31st and tax deducted at
source is 30%.

5] MN Company Ltd issued 3,000, 8% debentures of `100 each on April 01,

2016 at par and redeemable at a premium of 5%. Give journal entries
relating to the issue of debentures and debenture interest assuming that
interest was paid annually on 31st March 2017 and 31stMarch 2018 for two
years and tax deducted at source is 20%.

Problems on Redemption of Debentures (payment in lump-sum)

1] Pass necessary journal entries at the time of Redemption of Debentures in
each of the following cases.
a] A Company Ltd., issued 10,000, 8% debentures of `100 each at par
and redeemable at par at the end of five years out of capital.
b] B Company Ltd., issued 4,000, 12% debentures of `100 each at par.
These debentures are redeemable at 10% premium at the end of four
years.
c] C Company Ltd., issued 10% debentures of the total face value of
`3,00,000 at a premium of 5% to be redeemed at par at the end of
four years.
d] D Company Ltd., issued `2,00,000, 10% debentures at a discount of
5% but redeemable at a premium of 5% at the end of 5 years.
e] E Company Ltd., issued 1,000, 8% debentures of `100 each at a
premium of 5% to be redeemed at par at the end of 4 years.

2] Give the necessary journal entries at the time of Redemption of Debentures

for the following transactions.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 89 | P a g e

a] P Company Ltd., issued 10% debentures of the total value of
`2,00,000 at a premium of 5% to be redeemed at par at the end of
four years.
b] Q Company Ltd., issued 15,000, 9% debentures of `100 each at par
and redeemable at par at the end of five years.
c] R Company Ltd., issued 5,000, 12% debentures of `100 each at par.
These debentures are redeemable at 10% premium at the end of four
years.
d] S Company Ltd., issued 8% debentures of `4,00,000 at a premium of
10% to be redeemed at par at the end of four years.
e] T Company Ltd issued `2,00,000,12% debentures at a discount of 5%
but redeemable at a premium of 5% at the end of 5 years.

3] Pass necessary journal entries at the time of Redemption of Debentures in

each of the following cases.
A Company Ltd., issued 10,000, 8% debentures of `100 each at par and
redeemable at par at the end of 5 years out of capital.
B Company Ltd., issued 4,000, 12% debentures of `100 each at par.
These debentures are redeemable at 10% premium at the end of 4 years.
C Company Ltd., issued 10% debentures of the total face value of
`2,00,000 at a premium of 5% to be redeemed at par at the end of
four years.
D Company Ltd., issued `3,00,000, 10% debentures at a discount of 5%
but redeemable at a premium of 5% at the end of 5 years.
E Company Ltd., issued 1,000, 8% debentures of `100 each at a
premium of 5% to be redeemed at par at the end of 4 years.

4] Give the necessary journal entries at the time of redemption in each of the
following cases:
a] X Ltd., issued 5,000, 9% debentures of `100 each at Par and
redeemable at par at the end of 5 years out of capital.
b] X ltd., issued 1,000, 12% debentures of `100 each at par. These
debentures are redeemable at 10% premium at the end of 4 years.
c] X Ltd. Issued 12% debentures of the total face value of `1,00,000 at
Premium of 5% to be redeemed at par at the end 4 years.
d] X ltd. Issued `1,00,000, 12% debentures at a discount of 5% but
redeemable at a premium of 5% t the end of 5 years.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 90 | P a g e

e] X Ltd., issued 4,000, 10% debentures of `100 each at Par and
redeemable at par at the end of 4 years out of capital.

5] Give the necessary journal entries at the time of redemption in each of the
following cases:
a] Ganga Company Ltd., issued 10,00, 8% debentures of `100 each at
par and redeemable at par at the end of 5 years out of capital.
b] Tunga ltd., issued 1,000, 12% debentures of `100 each at par. These
debentures are redeemable at 10% premium at the end of 4 years.
c] Yamuna Company Ltd., issued `3,00,000, 10% debentures at a
discount of 5% but redeemable at a premium of 5% at the end of 5
years.
d] Bhadra Co. Lltd. Issued 12% debentures of the total face value of
`2,00,000 at Premium of 5% to be redeemed at par at the end 4 years.
Kaveri Company Ltd., issued 1,000, 10% debentures of `100 each at a
premium of 5% to be redeemed at par at the end of 4 years.

Key answer for short questions :

MCQ
1. c. 2. b. 3. b. 4. c. 5. c. 6. d. 7. c. 8. b. 9. b. 10. c. 11. b.
12. a. 13. c. 14. d. 15. b

FILL IN THE BLANKS

1. Debentures 2. Fictitious 3. Rate of interest 4. General reserve
5. 25%, 6.10% 7.Share capital 8. Investment 9. Bearer
10. Long term borrowings

MATCH THE FOLLOWING

1] v 2] iv 3] ii 4] iii 5] i

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 91 | P a g e

CHAPTER - 07

FINANCIAL STATEMENTS OF A COMPANY

PART - A
One Mark Questions:
I] Multiple Choice Questions:
1] Balance sheet of a company is required to be prepared in the format given
in _____
a] Schedule III Part II
b] Schedule III Part I
c] Schedule III Part III
d] Schedule III Part IV
2] Which of the following is not required to be prepared under the Companies
Act?
a] Statement of Profit and Loss
b] Balance Sheet
c] Report of Director’s and Auditor’s
d] Fund flow statement
3] External users of financial statements do not include:
a] Shareholders
b] Banks
c] Creditors
d] Government
4] Securities premium reserve appears in a company’s balance sheet under:
a] Share Capital
b] Long- term provisions
c] Reserves and Surplus
d] Short-term provisions
5] 8% Debentures appear in a company’s balance sheet under the sub head _
a] Long-term provisions
b] Long-term borrowings
c] Other current liabilities
d] Other long-term liabilities

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 92 | P a g e

6] Which of the following is shown under the head “fixed assets”?
a] Inventories
b] Trade receivables
c] Cash and cash equivalents
d] Goodwill
7] Non-current assets are:
a] Expected to use in the business for long period
b] Involved in entities operating cycle
c] Primarily held for trading
d] Cash and cash equivalents
8] Current Assets does not include:
a] Short term investments
b] Inventories
c] Buildings
d] Cash and cash equivalents
9] Current liabilities are to be paid within_____ month
a] 3 months.
b] 6 months.
c] 9 months.
d] 12 months.
10] Short-term borrowings appear in a company’s Balance Sheet under the
head
a] Current Assets
b] Current Liabilities
c] Non-Current Liabilities
d] Non-Current Assets

II. Fill in the blanks:

1] _______ statements are the basic and formal annual report.
2] Financial statements include__________ and Balance sheet.
3] Income statement and ___________ are the financial statements.
4] The object of preparation of balance sheet is to ascertain the_____.
5] Income statement is prepared to ascertain____________.
6] Share capital appears under the head_____________.
7] Capital reserve is shown under____________ head.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 93 | P a g e

8] Debit balance of statement of profit and loss shall be shown as _____ figure
under surplus head.
9] Loans which are repayable within _____months are called as short term
borrowings.
10] Fixed assets are classified as tangible and ___________ assets.

III. Match the following

A B
a] Financial statements i) Purchases of goods
b] Long-term borrowings ii) Employee Benefit Expenses
c] Provision for taxation iii) Formal annual reports
d] Revenue from operations iv) Debentures
e] Purchase of Stock-in-trade v) Sale of products
vi) Short-term provisions

Very Short Answer Questions:

1] Name any one type of financial statements.
2] State any one feature of financial statements.
3] Name any one internal user of financial statements.
4] Write any one objective of financial statements.
5] State any one type of reserve.
6] Give an example for non-current asset.
7] Where do you record the money received against share warrants?
9] How do you treat credit balance of income statement under the head
surplus?
10] Write any one feature of current asset.
11] How do you treat preliminary expenses?
12] The original cost is the basis of recording transactions. (State true or false)
13] Going concern postulates assumes that the enterprise exists for a longer
period of time. (State true or false)
14] The financial statements do not show current financial condition of a
business. (State true or false)
15] While preparing financial statements, inventories valued at market price or
cost price whichever is less. (State true or false)
16] Rounding off of figures in financial statements is not mandatory. (State
true or false)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 94 | P a g e

PART-B
1] Give the meaning of financial statements.
2] Mention two types of financial statements.
3] State any two features of financial statements.
4] Write any two objectives of financial statements.
5] State any two benefits of financial statements.
6] Give any two limitations of financial statements.
7] State any 2 postulates.
8] How will you disclose the following items in the Balance Sheet of a
Company?
a] Loose Tools
b] Proposed dividends.
9] State any two differences between current assets and non-current assets.
10] Mention any two items which are shown under the head of non-current
liabilities.
PART-C
1] From the following information prepare statement of profit and loss for the
year ended 31-03-2024 as per Schedule III of Companies Act, 2013.
Particulars `
Revenue from operations 5,00,000
Purchase of goods 3,00,000
Salaries to employees 40,000
Leave encashment 10,000
Rent and taxes 30,000
Repairs to machinery 20,000
Tax 30%
(Answer: `70,000)

2] From the following details you are required to prepare Statement of Profit
and Loss for the year ended 31-03-2024 as per Schedule III of Companies
Act, 2013.
Particulars `
Plant and Machinery 40,000
Furniture 20,000
Share Capital 4,00,000
Sales 3,00,000
Purchases 1,80,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 95 | P a g e

Trade payables 30,000
Depreciation on plant and machinery 4,000
Amortisation of goodwill 6,000
Interest on debentures 30,000
Interest on borrowings 20,000
Tax 30%
(Answer: `42,000)

3] From the following balances, prepare Statement of Profit and Loss for the
year ending 31st March 2024 as per Schedule III of Companies Act, 2013.
Particulars `
Sales 10,00,000
Cash purchases 2,00,000
Credit purchases 4,00,000
Purchases returns 20,000
Power and fuel 30,000
Consumption of stores 50,000
Interest on bank loan 30,000
Tax 30%
(Answer: `2,17,000)

4] From the following trial balance, prepare Statement of Profit and Loss for the
year ending 31st March 2024 as per Schedule III of Companies Act, 2013.
Sl.no Accounts Head Debit(`) Credit(`)
1 Sales 10,00,000
2 Salaries 90,000
3 Wages 1,10,000
4 Stock (on 01/04/2023) 1,50,000
5 Purchases 4,00,000
6 Bank Overdraft 2,00,000
7 12% Debentures 1,00,000
(Issued on 01/04/2023)
8 Plant and Machinery 1,60,000
9 Depreciation on plant and machinery 16,000
10 Equity Share Capital 2,00,000
(Shares of `10/-each)
11 7% Preference Share Capital 1,00,000
12 Land 6,74,000
Total 16,00,000 16,00,000
Note: Tax rate 30% (Answer: `1,55,400)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 96 | P a g e

5] From the following balance, prepare Statement of Profit and Loss for the
year ending 31st March 2024 as per Schedule III of Companies Act, 2013.
Particulars `

Cash sales 2,00,000

Credit sales 3,00,000
Sales returns 20,000
Cost of materials consumed 3,00,000
Buildings 2,00,000
Machinery 1,50,000
Bad debts 5,000
Tax 30%

Note: Charge depreciation on buildings and machinery at 10% each.

(Answer: `98,000)

6] From the following trial balance and other information, Statement of Profit
and Loss for the year ending 31st March 2024 as per Schedule III of
Companies Act, 2013.
Sl. No. Particulars Debit (`) Credit(`)
1 Land and buildings 4,00,000
2 Trade receivables 1,00,000
3 Trade payables 2,00,000
4 10% Debentures (01/04/2023) 3,00,000
5 Sales 15,00,000
6 Net purchases 10,00,000
7 Wages and salaries 50,000
8 Contribution to provident fund 10,000
9 Plant and machinery 2,00,000
10 Goodwill 2,40,000
Total 20,00,000 20,00,000

Adjustments:
1] Tax rate 30%
2] Depreciation on plant and machinery at 10% and amortization of
goodwill by `24,000.
(Answer : `2,56,200)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 97 | P a g e

7] From the following information prepare statement of profit and loss for the
year ended 31-03-2024 as per Schedule III of Companies Act, 2013.
Particulars `
Revenue from operations 3,85,000
Purchase of goods 97,000
Other Incomes 75,000
Employee benefits expense 1,03,000
Interest on loan 30,000
Interest on debentures 20,000
Depreciation and amortization expense 83,000
Other expenses 1,08,000
Tax 30%

(Answer: `13,300)

8] From the following information prepare statement of profit and loss for the
year ended 31-03-2024 as per Schedule III of Companies Act, 2013.
Particulars `
Sales 9,47,000
Cost of materials consumed 3,25,000
Salaries and wages 1,75,000
Interest on bank overdraft 16,000
Depreciation on tangible assets 40,000
Amortisation of intangible assets 50,000
Rent, Rate and Taxes 40,000
Tax 30%

(Answer: `2,10,700)

9] From the following information prepare statement of profit and loss for the
year ended 31-03-2024 as per Schedule III of Companies Act, 2013.
Particulars `
Revenue from operations 6,35,000
Purchases 2,72,000
Salaries 1,00,000
Contribution to provident fund 50,000
Depreciation on tangible assets 60,000
Rent 25,000
Administration expense 50,000
Tax 30%

(Answer: `52,500)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 98 | P a g e

10] From the following information prepare statement of profit and loss for the
year ended 31-03-2024 as per Schedule III of Companies Act, 2013.
Particulars `
Revenue from operations 8,70,000
Purchases 4,50,000
Salaries 95,000
Finance costs 30,000
Depreciation on tangible assets 40,000
Rent 25,000
Administration expenses 30,000
Tax 30%

(Answer: `1,40,000)

Problems on Preparation of Balance Sheet

1] You are required to prepare a Balance Sheet from the following information
as per the provisions of the Companies Act, 2013 in Schedule III.
Particulars `
Equity Share Capital of `10 each 3,50,000
Securities premium 10,700
General reserve 50,000
15% Debentures 1,25,000
Trade payables 59,000
Other current liabilities 92,400
Fixed assets 4,05,900
Inventories 48,500
Trade receivables 95,000
Cash at bank 1,37,700
(Answer: `6,87,100)

2] From the following information, prepare Balance Sheet of Jindal Company

Ltd as at 31/03/2024 as per Schedule III of Companies Act, 2013.
Particulars `
Share Capital 10,00,000
Reserves and Surplus 5,00,000
10% Debentures 5,00,000
Creditors 2,00,000
Bills payable 3,00,000
Fixed Assets 15,00,000
Trade receivables 5,00,000
Short term investments 2,00,000
Cash and cash equivalents 3,00,000
(Answer: ` 25,00,000)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 99 | P a g e

3] From the following information, prepare Balance Sheet for the year ending
31st March 2024 as per Schedule III of Companies Act, 2013.
Particulars `
Inventories 7,00,000
Equity Share Capital 16,00,000
Plant and Machinery 8,00,000
Preference Share Capital 6,00,000
General Reserve 6,00,000
Creditors 3,50,000
Provision for taxation 2,50,000
Land and Buildings 26,00,000
Cash at bank 5,00,000
12% Debentures 12,00,000
(Answer: `46,00,000)

4] From the following trial balance, prepare Balance Sheet of Star ltd., for the
year ending 31st March 2024 as per Schedule III of Companies Act, 2013.
Sl. No. Particulars Debit (`) Credit (`)
1 Equity Share Capital - 2,00,000
2 Preference Share Capital - 3,00,000
3 Reserves and Surplus - 3,00,000
4 Sales - 5,00,000
5 Other non-current liabilities - 2,00,000
6 Tangible assets 4,00,000 -
7 Intangible assets 2,50,000 -
8 Salaries 90,000 -
9 Printing and stationery 30,000 -
10 Rent 80,000 -
11 Purchases 3,00,000 -
12 Trade Receivables 3,50,000 -
Total 15,00,000 15,00,000
(Answer: `10,00,000)

5] From the following information, prepare Balance Sheet Surya ltd., for the
year ending 31st March 2024 as per Schedule III of Companies Act, 2013.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 100 | P a g e

Particulars `
Equity Share Capital 20,00,000
Inventories 14,00,000
Plant and Machinery 10,00,000
Preference Share Capital 12,00,000
Debenture Redemption Reserve 6,00,000
Outstanding Expenses 3,00,000
Proposed Dividend 5,00,000
Land and Buildings 20,00,000
Current Investments 8,00,000
Cash equivalents 10,00,000
Short term loan from Z ltd., 4,00,000
Public Deposit 12,00,000
(Answer : `62,00,000)

6] Prepare a Balance Sheet of White Ltd., as on 31st March 2024 as per

Schedule III of Companies Act, 2013 from the following information:
Particulars `
General Reserve 3,00,000
10% Debentures 3,00,000
Balance in Statement of Profit and Loss 1,20,000
Depreciation on fixed assets 70,000
Gross Block 9,00,000
Current Liabilities 2,50,000
Preliminary Expenses 30,000
6% Preference Share Capital 5,00,000
Cash and cash equivalents 6,10,000
(Answer: `14,70,000)
7] You are required to prepare a Balance Sheet from the following information
as per the provisions of the Companies Act, 2013 in Schedule III.
Particulars `
Equity Share Capital 9,56,000
Preliminary expenses 2,40,000
Discount on issue of share 20,000
Goodwill 30,000
10%Debentures 2,00,000
Stock-in-trade 1,40,000
Loose tools 12,000
Trade receivables 1,20,000
Cash at Bank 1,35,000
Motor vehicles 4,75,000
Provision for taxation 16,000
(Answer: `11,72,000)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 101 | P a g e

8] You are required to prepare a Balance Sheet from the following information
as per the provisions of the Companies Act, 2013 in Schedule III.
Particulars `
Share Capital 9,00,000
Reserves and Surplus 72,560
8% Debentures 3,00,000
Trade payables 97,000
Other current liabilities 63,000
Buildings 6,25,000
Furniture 3,81,850
Inventories 1,23,800
Trade receivables 2,15,370
Cash at Bank 86,540
(Answer: `14,32,560)

9] You are required to prepare a Balance Sheet from the following information
as per the provisions of the Companies Act, 2013 in Schedule III.
Particulars `
Equity Share Capital of `10 each 7,00,000
Reserves and Surplus 2,10,000
Short-term borrowings 2,25,000
Trade payables 1,95,000
Short-term provision 1,09,175
Buildings 5,04,000
Goodwill 2,32,000
Inventories 1,45,000
Trade receivables 2,45,000
Cash and cash equivalents 2,25,000
Short-term loans and advances 88,175

(Answer: `14,39,175)

10] You are required to prepare a Balance Sheet from the following information
as per the provisions of the Companies Act, 2013 in Schedule III.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 102 | P a g e

Particulars `
Equity Share Capital of `10 each 4,00,000
Reserve and Surplus 1,24,750
10% Debentures 1,00,000
Trade payables 85,000
Short-term provisions 1,13,750
Furniture 3,00,000
Plant and Machinery 1,85,500
Short-term investments 45,000
Trade receivables 1,60,000
Cash at bank 1,33,000
(Answer: `8,23,500)

11] You are required to prepare a Balance Sheet from the following information
as per the provisions of the Companies Act, 2013 in Schedule III.
Particulars `
Equity Share Capital of `10 each 3,50,000
Securities premium 10,700
General reserve 50,000
15% Debentures 1,25,000
Trade payables 59,000
Other current liabilities 92,400
Fixed assets 4,05,900
Inventories 48,500
Trade receivables 95,000
Cash at bank 1,37,700
(Answer: `6,87,100)

Key answer for short questions:

MCQ
1. b, 2. d, 3. a, 4. c, 5. d, 6. d, 7. a, 8. c, 9. d, 10. b.

FILL IN THE BLANKS

1. Financial, 2. Statement of profit and loss, 3. Balance sheet
4. Financial status of the enterprise, 5. Profitability of enterprise,
6.Shareholders’ fund, 7. Reserves and Surplus, 8. Negative,
9.twelve, 10. Intangible.

MATCH THE FOLLOWING - a. iii, b. iv, c. vi, d. v, e, i.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 103 | P a g e

CHAPTER - 08

FINANCIAL STATEMENT ANALYSIS

PART - A
One Mark Questions:
I] Multiple Choice Questions:
1] The financial statements of a business enterprise include:
a] Balance sheet
b] Statement of Profit and Loss.
c] Cash flow statement
d] All the above.
2] Which of these are not the method of financial statement analysis?
a] Ratio analysis
b] Comparative analysis
c] Trend analysis
d] Capitalisation method
3] From financial statement analysis, the creditors are interested to know
a] Liquidity
b] Profit
c] Efficiencies
d] Share capital
4] Comparative statement are also known as
a] Dynamic Analysis
b] Vertical Analysis
c] External Analysis
d] Horizontal Analysis
5] Common Size Statements are also known as:
a] Vertical Analysis
b] Dynamic Analysis
c] Horizontal Analysis
d] External Analysis

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 104 | P a g e

6] Percentage of each liability to the total liabilities is shown in:
a] Common Size Balance Sheet
b] Common Size Income statement
c] Comparative Balance Sheet
d] Comparative Income statement
7] Tangible assets of the company increased from `4,00,000 to `5,00,000.
What is the Percentage of change?
a] 20%
b] 25%
c] 33%
d] 50%
8] In a common-size balance sheet, total equity and liabilities are assumed to
be equal to:
a] 1,000
b] 100
c] 10
d] 1
9] Common Size Statements are useful in comparison of:
a] Intra-firm for the same or several years
b] Inter-firm over different years
c] Both (a) & (b) above
d] None of the above
10] An Annual Report is issued by a company to its:
a] Directors
b] Auditors
c] Shareholders
d] Management

II. Fill in the blanks:

1] The term analysis means _____________ of financial data
2] Interpretation means explaining the _____________ and significance of the
data.
3] Comparative analysis is also known as ________________ analysis.
4] Common Size Statement is also known as _________
5] The term ‘financial analysis’ includes both ‘analysis and _____________’

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 105 | P a g e

6] The statement showing the profitability and financial position for different
periods of time in a comparative form is known as________________
7] The statement which indicate the relationship of different items of financial
statement with a common item is called______________.
8] It is possible to assess the profitability, solvency and efficiency through the
technique of____________ analysis
9] Percentage of each asset to the total assets is shown in ___________
Balance Sheet.
10] Analysis and interpretation are _____________ to each other

III. Match the following

A B
a] Trend Analysis i) Comparative Statements
b] Horizontal statement ii) Ratio analysis
c] Vertical statement iii) Common Size Statement
iv) Tools of Analysis of Financial Statements
IV. Very Short Answer Type Questions:
1] What do you mean by Financial Statement Analysis?
2] State any one object of Financial Statement Analysis.
3] State any one technique of Financial Statement Analysis.
4] State any one user of Financial Analysis.
5] What is Vertical Analysis?
6] What is Horizontal Analysis?
7] State any one importance of Financial analysis.
8] State any one limitation of Financial Analysis.
9] Give the meaning of analysis
10] Give the meaning of interpretation
11] The Financial Statements of a business enterprise include Cash Flow
Statement. (State True or False)
12] Financial Analysis is used only by the creditors. (State True or False)
13] In a Common Size Statement, each item is expressed as a percentage of
same common base. (State True or False)
14] Financial data will be comparative only when same accounting principles
are used. (State True or False)
15] Non-monetary aspects are ignored in financial analysis. (State True or False)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 106 | P a g e

PART-D
1] From the following information of Soundarya Company Ltd., Prepare a
Comparative Income Statement for the years 2023 and 2024
Particulars 2023 ` 2024 `
Revenue from operations 7,25,000 8,15,000
Less: Sales returns 25,000 15,000
7,00,000 8,00,000
Other revenue income 1,200 8,000
Total Revenue (A) 7,01,200 8,08,000
Employee benefits Expense 5,95,000 6,15,000
Depreciation 12,700 12,500
Finance costs 23,000 24,000
Other expenses 1,500 2,000
Total Expenses (B) 6,32,200 6,53,500
Profit Before Tax (C=A-B) 69,000 1,54,000

2] From the following information, prepare Comparative Statement of Profit

and Loss for the year ending 31st March 2023 and 31st March 2024 of Raju
Co. Ltd.,
Particulars 31-3-2023 31-3-2024
` `
Revenue from operations 8,00,000 9,00,000
Other income 20,000 40,000
Employee benefits expense 1,00,000 1,20,000
Cost of materials consumed 4,00,000 5,00,000
Finance costs 30,000 20,000
Depreciation 70,000 70,000
Other expenses 20,000 30,000
Income tax 30% 30%

3] From the following information, prepare Comparative Statement of Profit

and Loss for the year ending 31st March 2023 and 31st March 2024 of
Hema Co. Ltd.,
Particulars 31-3-2023 31-3-2024
` `
Revenue from operations 6,00,000 8,00,000
Other Income 60,000 70,000
Purchases of stock-in--trade 3,00,000 5,00,000
Employee benefits expense 1,00,000 1,50,000
Finance costs 30,000 40,000
Depreciation 50,000 60,000
Income tax 30% 30%

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 107 | P a g e

4] Prepare Comparative Income statement of GPR Co. Ltd., from the following
information.
Particulars 31-3-2023 31-3-2024
` `
Revenue from operations 21,50,000 25,00,000
Purchases of stock-in-trade 13,00,000 14,50,000
Employee benefits expense 2,10,000 1,80,000
Finance costs 1,40,000 1,20,000
Other expenses 1,90,000 2,50,000
Income tax 93,000 1,50,000

5] Prepare Comparative Income statement of PMT Co. Ltd., from the following
information.
Particulars 31-3-2023 31-3-2024
` `
Revenue from operations 4,00,000 6,00,000
Other income 50,000 60,000
Purchases of stock-in-trade 2,00,000 2,50,000
Employee benefits expense 19,000 22,000
Depreciation 6,000 8,000
Other expenses 11,000 14,000
Income tax 64,200 1,09,800

Problems on Comparative Balance Sheet.

6] The followings are the Balance Sheets of Alpha Ltd., as at March 31st 2023
and 2024
Particulars March 31st2023 March 31st 2024
` `
I. Equity and Liabilities
Equity Share Capital 2,00,000 4,00,000
Reserves and Surplus 1,00,000 1,50,000
Long term loans 2,00,000 3,00,000
Current Liabilities 1,20,000 1,70,000
Total 6,20,000 10,20,000
II. Assets:
Fixed Assets 2,00,000 5,00,000
Non-current investment 1,00,000 1,25,000
Current Assets 2,55,000 3,25,000
Term loans and advances 65,000 70,000
Total 6,20,000 10,20,000

You are required to prepare a Comparative Balance Sheet.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 108 | P a g e

7] From the following information, Prepare Comparative Position Statement
(Balance Sheet)
Particulars 31-3-2023 ` 31-3-2024 `
Share Capital 4,00,000 5,00,000
General reserve 50,000 60,000
Secured loan 15,000 20,000
Current liabilities 50,000 70,000
Buildings 2,00,000 2,50,000
Machinery 1,50,000 2,00,000
Stock 1,00,000 1,10,000
Trade receivables 65,000 90,000

8] The following is the Balance sheet of Sun Star Co., Ltd., as on 31-3-2023
and 31-3-2024. Prepare Comparative Balance Sheet.
Particulars March 31st2023 March 31st 2024
` `
I. Equity and Liabilities:
Equity Share Capital 5,50,000 10,50,000
Reserves and Surplus 2,00,000 2,50,000
Non-Current Liabilities
Long term loans 1,00,000 2,50,000
Current Liabilities
Trade payables 1,50,000 3,00,000
Total 10,00,000 18,50,000
II. Assets:
Non-Current Assets
Fixed Assets:
Tangible assets 5,00,000 10,00,000
Long-term investments 2,00,000 2,50,000
Current Assets
Inventories 2,25,000 3,25,000
Trade receivables 75,000 2,75,000

Total 10,00,000 18,50,000

9] From the following information, Prepare Comparative Balance Sheet

Particulars 31-3-2023 ` 31-3-2024 `
Share Capital 8,00,000 10,00,000
Reserves and Surplus 1,00,000 1,20,000
Long term borrowings 50,000 50,000
Trade payables 80,000 1,00,000
Fixed Assets 7,00,000 9,00,000
Inventories 2,00,000 1,80,000
Trade receivables 1,00,000 1,50,000
Cash and cash equivalents 30,000 40,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 109 | P a g e

10] The following is the Balance sheet of Star Co., Ltd., as on 31-3-2023 and
31-3-2024. Prepare Comparative Balance Sheet.
Particulars March 31st2023 March 31st 2024
` `
I. Equity and Liabilities:
Equity Share Capital 6,00,000 8,00,000
Reserves and Surplus 3,30,000 2,22,000
Non-Current Liabilities
Long term borrowings 3,50,000 5,00,000
Current Liabilities
Trade payables 1,55,000 1,75,000
Total 14,35,000 16,97,000
II. Assets:
Non-Current Assets
Fixed Assets:
Tangible assets 8,14,000 9,25,000
Current Assets
Inventories 2,50,000 3,50,000
Trade receivables 3,50,000 3,40,000
Cash and cash equivalents 21,000 82,000
Total 14,35,000 16,97,000

Problems on Common Size Income Statement

1] From the following information prepare Common Size Income Statement:
Particulars 31-3-2023 ` 31-3-2024 `

Net Revenue from operations 60,000 86,000

Other income 300 400
Total Revenue (A) 60,300 86,400
Cost of Materials consumed 18,000 20,000
Employee benefits expense 9,000 10,000
Finance cost 3,000 3,400
Other expenses 6,300 6,600
Total Expense (B) 36,300 40,000
Profit before tax (A-B) 24,000 46,400
Less: Income Tax 7,200 13,920
Surplus 16,800 32,480

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 110 | P a g e

2] From the following information, prepare Common Size Statement of Profit
and Loss for the year ending 31st March 2023 and 31st March 2024.
Particulars 31-3-2023 ` 31-3-2024 `
Revenue from operations 5,00,000 4,00,000
Other income 20,000 10,000
Cost of Materials consumed 3,00,000 2,00,000
Employee benefits expense 60,000 40,000
Finance cost 10,000 15,000
Depreciation 20,000 25,000
Other expenses 40,000 30,000
Tax Rate 40% 40%

3] From the following information, prepare Common Size Statement of Profit

and Loss for the year ending 31st March 2023 and 31st March 2024.
Particulars 31-3-2023 31-3-2024
` `
Revenue from operations 10,00,000 15,00,000
Other income 2,00,000 1,80,000
Cost of Materials consumed 5,00,000 9,00,000
Employee benefits expense 40,000 50,000
Finance cost 30,000 40,000
Other expenses 40,000 80,000
Tax Rate 30% 30%

4] From the following information, prepare Common Size Statement of Profit

and Loss for the year ending 31st March 2023 and 31st March 2024.
Particulars 31-3-2023 31-3-2024
` `
Revenue from operations 3,50,000 4,50,000
Purchases of stock-in-trade 1.90,000 2,15,000
Employee benefits expense 50,000 72,000
Finance cost 20,000 17,000
Other expenses 10,000 12,000
Tax Rate 40% 40%

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 111 | P a g e

5] From the following information, prepare Common Size Statement of Profit
and Loss for the year ending 31st March 2023 and 31st March 2024.

Particulars 31-3-2023 31-3-2024

` `
Revenue from operations 5,00,000 7,00,000
Other Income 20,000 30,000
Cost of materials consumed 3,00,000 4,00,000
Employee benefits expense 50,000 70,000
Depreciation and amortisation expense 20,000 22,000
Other expenses 40,000 50,000
Income tax 33,000 56,400

Problems on Common Size Balance Sheet

1] From the following Balance sheet of Rajesh Exports Ltd., as on 31-3-2023
and 31-3-2024, prepare Common Size Balance Sheet.
Particulars March 31st2023 March 31st 2024
` `
I. Equity and Liabilities:
Equity Share Capital 5,00,000 6,00,000
Reserves and Surplus 3,00,000 3,50,000
Non-Current Liabilities
Long term loans 4,00,000 3,00,000
Current Liabilities 2,50,000 3,25,000
Total 14,50,000 15,75,000
II. Assets:
Non-Current Assets
Fixed Assets:
Tangible assets 5,50,000 7,00,000
Intangible assets 2,00,000 2,50,000
Current Assets 7,00,000 6,25,000
Total 14,50,000 15,75,000

2] From the following Balance sheet of Karnataka Company Ltd., prepare

Common Size Balance Sheet as on 31-3-2023 and 31-3-2024.
Particulars March 31st2023 March 31st 2024
` `
I. Equity and Liabilities:
Equity Share Capital 8,50,000 10,00,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 112 | P a g e

Reserves and Surplus 1,00,000 50,000
Non-Current liabilities
Long term borrowings 4,50,000 5,75,000
Current Liabilities
Short term borrowings 1,50,000 2,25,000
Total 15,50,000 18,50,000
II. Assets:
Fixed Assets
Tangible assets 7,50,000 9,00,000
Intangible assets 4,00,000 4,50,000
Current Assets
Inventories 1,00,000 2,00,000
Other current assets 3,00,000 3,00,000
Total 15,50,000 18,50,000

3] From the following Balance Sheets of Indian Industries Ltd., prepare

Common size Balance Sheet.
Particulars 31-03-2023 31-03-2024
` `
Share Capital 2,00,000 2,50,000
Reserves 1,00,000 1,50,000
Long term loans 2,00,000 1,00,000
Trade payables 3,00,000 4,00,000
Total 8,00,000 9,00,000
Buildings 2,00,000 2,50,000
Plant 2,00,000 2,50,000
Inventories 3,50,000 3,25,000
Cash & cash equivalents 50,000 75,000
Total 8,00,000 9,00,000

4] From the following Balance sheet of Rajesh Exports Ltd., as on 31-3-2023

and 31-3-2024, prepare Common Size Balance Sheet.
Particulars March 31st2023 March 31st 2024
` `
I. Equity and Liabilities:
Equity Share Capital 13,00,000 16,00,000
Reserves and Surplus 6,00,000 6,00,000
Non-Current Liabilities
Long term borrowings 6,00,000 7,00,000
Current Liabilities
Trade payables 11,50,000 16,50,000
Total 36,50,000 45,50,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 113 | P a g e

II. Assets:
Non-Current Assets
Fixed Assets:
Tangible assets 11,00,000 16,00,000
Intangible assets 11,00,000 16,00,000
Non-current investments 11,00,000 11,00,000
Current Assets
Inventories 3,50,000 2,50,000
Total 36,50,000 45,50,000

5] From the following Balance sheet of Raju Co. Ltd., as on 31-3-2023 and
31-3-2024, prepare Common Size Balance Sheet.
Particulars March 31st2023 March 31st 2024
` `
I. Equity and Liabilities
Shareholders’ Fund
Equity Share Capital 12,00,000 15,00,000
Reserves and Surplus 5,00,000 5,00,000
Non-Current Liabilities
Long term borrowings 5,00,000 6,00,000
Current Liabilities
Trade payables 10,50,000 15,50,000
Total 32,50,000 41,50,000
II. Assets:
Non-Current Assets
Fixed Assets:
Tangible assets 10,00,000 15,00,000
Intangible assets 10,00,000 15,00,000
Non-current investments 10,00,000 10,00,000
Current Assets
Other current assets 2,50,000 1,50,000
Total 32,50,000 41,50,000

Key answer for short questions:

MCQ
1. d, 2. d, 3. a, 4. d, 5. a, 6. b, 7. b, 8. b, 9. c, 10. c.

FILL IN THE BLANKS

1. Simplification, 2. meaning, 3. Horizontal, 4. vertical, 5. interpretation,
6. comparative statement, 7. Common size statement, 8. Ratio analysis,
9. common size, 10. complimentary.

MATCH THE FOLLOWING

a. iv, b. iii, c. i,

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 114 | P a g e

CHAPTER - 09

ACCOUNTING RATIOS
PART - A
One Mark Questions:
I] Multiple Choice Questions:
1] The following group of ratios are primarily measure risk:
a] liquidity, activity, and profitability
b] liquidity, activity, and inventory
c] liquidity, activity, and debt
d] liquidity, debt and profitability
2] The _________ ratios are primarily measures of return:
a] liquidity
b] activity
c] debt
d] profitability
3] The _________ of business firm is measured by its ability to satisfy its short term
obligations as and when they become due:
a] activity
b] liquidity
c] debt
d] profitability
4] _________ ratios are a measure of the speed with which various accounts are
converted into revenue from operations or cash:
a] Activity
b] Liquidity
c] Debt
d] Profitability
5] The two basic measures of liquidity are:
a] inventory turnover and current ratio
b] current ratio and liquid ratio
c] gross profit margin and operating ratio
d] current ratio and average collection period
6] The _________ is a measure of liquidity which excludes _______, generally the least
liquid asset:
a} current ratio, trade receivable
b] liquid ratio, trade receivable
c] current ratio, inventory
d] liquid ratio, inventory

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 115 | P a g e

7] The _________ is useful in evaluating credit and collection policies.
a] average payment period
b] current ratio
c] average collection period
d] current asset turnover
8] The ___________ measures the activity of a firm’s inventory.
a] average collection period
b] inventory turnover
c] liquid ratio
d] current ratio
9] The ___________ may indicate that the firm is experiencing stock outs and lost
sales.
a] average payment period
b] inventory turnover ratio
c] average collection period
d] quick ratio
10] ABC Co. extends credit terms of 45 days to its customers. Its credit collection
would be considered poor if its average collection period was,
a] 30 days
b] 36 days
c] 47 days
d] 37 days
11] ___________ are especially interested in the average payment period, since it
provides them with a sense of the bill-paying patterns of the firm.
a] Customers
b] Stockholders
c] Lenders and suppliers
d] Borrowers and buyers
12] The __________ ratios provide the information critical to the long run operation of
the firm
a] liquidity
b] activity
c] solvency
d] profitability
13] Dividend payout ratio refers to proportion of earnings that are distributed to the ;
a] Share holders
b] Debenture holders
c] Creditors
d] Lenders

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 116 | P a g e

14] Trade payables turnover ratio indicates
a] Payments of Trade payables
b] Payment to Creditors
c} Payment of Bank Loan
d] Payment of Bills Payable
15] Liquidity ratios are expressed in;
a] Pure ratio form
b] Percentage
c] Rate or Time
d] Integer
16] Current ratio is 2:1, current assets are `82,000.What will be Current liabilities?
a] `20,000
b] `38,000
c] `15,000
d] `41,000.

II. Fill in the blanks :

1] Accounting Ratios are an important tool of ______
2] A___________ is a mathematical number calculated as a reference to
relationship of two or more numbers.
3] _________can be expressed as a fraction, proportion, percentage and a
number of times.
4] If a ratio is compared with one variable from the statement of Profit and
Loss and another variable from the Balance Sheet, it is called_____________
5] Quick Ratio is also known as______________Ratio.
6] Ratios are means to an end rather than the ___________.
7] Current ratio is the proportion of ____________ to current liabilities.
8] _________ ratios are calculated to measure the short term solvency of the
business.
9] The quick assets are those assets which are quickly convertible into _____
10] The ___________ ratios are preliminary measures of return.
11] Ratio of gross profit to revenue from operations is known as __________
ratio.
12] _______ ratio measures the relationship between long term debt and equity.
13] Proprietary ratio expresses relationship of proprietor’s funds to __________
14] The _______________ratio measures the activity of a firm’s inventory.
15] The _________________ is useful in evaluating credit and collection policies.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 117 | P a g e

III. Match the following :
A B
a. Liquidity Ratios i. Quick or Liquid Ratio
b. Solvency Ratios ii. Can be measured by activity
Ratios
c. Efficiency iii. Long-term in nature.
d. Acid-Test Ratio iv. Short-term in nature
e. Debt Equity Ratio v. Relates net profit to revenue
from operations
f. Net Profit Ratio vi. Expressed in times

g. Price/Earning Ratio vii. Earning per share

h. Book value per share viii. Relationship between long-
term debt and equity

i. Advertisement ix. Financial expenses

j. Interest paid x. Operating expenses
xi. Expressed in rupees

Very Short Answer Type Questions:

1] Give the meaning of Ratio Analysis.
2] State any one objective of ratio analysis.
3] State any one use of ratio analysis.
4] Mention any one limitation of ratio analysis.
5] Mention any one type of ratio.
6] Give one example for current assets.
7] Give one example for current liability.
8] What is current ratio?
9] What is quick ratio?
10] Name any one type of turnover ratio.
11] Give the meaning of net profit ratio.
12] Give the meaning of dividend payout ratio.
13] What is activity ratio?
14] State one significance of interest coverage ratio.
15] Expand EPS.
16] Expand ROI.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 118 | P a g e

17] A ratio reflects quantitative and qualitative aspects of results
(State True or False).
18] Net profit refers to profit after tax (PAT)(State True or False).
19] State any one profitability ratio.
20] Solvency refers to the ability of the enterprise to meet its current
obligations (State True or False ).
21] Purchase of goods will increase the cost of Revenue from operations (State
True or False).
22] The only purpose of financial reporting is to keep the managers informed
about the progress of operations (State True or False).
23] Analysis of data provided in the financial statements is termed as financial
analysis (State True or False).
24] Long-term borrowings are concerned about the ability of a firm to
discharge its obligations to pay interest and repay the principal amount
(State True or False).
25] A ratio is always expressed as a quotient of one number divided by another
(State True or False).
26] Ratios help in comparisons of a firm’s results over a number of accounting
periods as well as with other business enterprises.
27] A ratio reflects only quantitative aspect of results (State True or False).
28] Liquidity ratios are essentially short-term in nature (State True or False).
29] Current ratio is the proportion of current assets to current liabilities (State
True or False).
30] The quick assets are those assets which cannot be quickly converted into
cash (State True or False).
31] A higher interest coverage ratio ensures safety of interest of debts
(State True or False).
32] The liquidity ratios are preliminary measures of return
(State True or False).
33] Higher gross profit ratio is always a good sign (State True or False).
34] Dividend payout ratio refers to the proportion of earning distributed to the
shareholders (State True or False)
35] Price Earnings Ratio =Market price of share / Earnings per share (State
True or False).

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 119 | P a g e

PART- D
Twelve Marks Problems :
1] Following is the Trading and Profit and Loss Account for the year ending
31st March, 2024
Particulars ` Particulars `

To Opening Stock 10,000 By Sales 1,00,000

To Purchases 55,000 By Closing Stock 15,000
To Gross profit 50,000
1,15,000 1,15,000
To Admin. Expenses 15,000 By Gross Profit 50,000
To Selling Expenses 12,000
To Interest 3,000
To Net Profit 20,000
50,000 50,000

Balance Sheet as at 31st March ,2024

Liabilities ` Assets `

Equity Share Capital 60,000 Land and Building 50,000

Debentures 40,000 Plant and Machinery 30,000
Profit and Loss A/c 20,000 Furniture 20,000
Creditors 25,000 Stock 15,000
Bills Payable 15,000 Sundry Debtors 15,000
Bills Receivable 12,500
Cash in Hand 17,500

1,60,000 1,60,000

Calculate:
a] Current Ratio, b] Debt Equity Ratio,
c] Stock Turnover Ratio, d] Trade Receivable Turnover Ratio,
e] Gross Profit Ratio , and f] Net Profit Ratio.
Answers:
a] Current Ratio = 1.5: 1
b] Debt Equity Ratio = 0.5:1
c] Stock Turnover Ratio = 4 times
d] Trade Receivable Turnover Ratio = 3.64 times
e] Gross Profit Ratio = 50 %
f] Net Profit Ratio = 20 %

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 120 | P a g e

2] The following is the summarized Profit and Loss Account for the year
ended 31 March, 2024 and Balance sheet as on that date.
Trading and Profit and Loss Account for the year ended 31st March, 2024
Dr. Cr.
Particulars ` Particulars `
To Opening Stock 65,000 By Sales 2,00,000
To Purchases 1,00,000 By Closing Stock 15,000
To Gross profit 50,000
2,15,000 2,15,000
To Administrative Expenses 15,000 By Gross Profit 50,000
To Selling Expenses 12,000
To Interest 3,000
To Net Profit 20,000
50,000
50,000

Balance Sheet as on 31st March ,2024

Liabilities ` Assets `

Equity Share Capital 80,000 Land and Building 50,000

L. T. Borrowings 20,000 Plants and Machinery 30,000
Profit and Loss A/c 20,000 Furniture 20,000
Creditors 25,000 Stock 15,000
Bills Payable 15,000 Sundry Debtors 15,000
Bills Receivable 12,500
Cash in Hand 17,500

1,60,000 1,60,000

You are required to calculate:

a] Liquid Ratio, b] Proprietary Ratio,
c] Stock Turnover Ratio, d] Trade Payable Turnover Ratio,
e] Gross Profit Ratio and f] Operating Ratio.
Answers:
a] Liquid Ratio =1.13 : 1
b] Proprietary Ratio = 0.83: 1
c] Stock Turnover Ratio = 3.75 times
d] Trade Payables Turnover Ratio = 2.5 times
e] Gross Profit Ratio = 25 %
f] Operating Ratio = 88.5 %

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 121 | P a g e

3] From the following information, calculate:
a] Current Ratio,
b] Interest Coverage Ratio,
c] Trade Receivables Turnover Ratio,
d] Trade Payables Turnover Ratio,
e] Earnings Per Share, and
f] Dividend Payout Ratio.
Particulars `
Inventory 1,00,000
70,000 Equity Share of `10 each 7,00,000
Revenue from Operations 5,00,000
Net Purchases 4,00,000
Net Profit Before Tax 3,51,000
13% Debentures 3,00,000
Net Profit after tax but before dividend 1,75,000
Trade Receivables 50,000
Trade Payables 75,000
Dividend declared @ 15% --------

Answers:
a] Current Ratio = 2:1
b] Interest Coverage Ratio = 10 times
c] Trade Receivables Turnover Ratio = 10 times
d] Trade Payables Turnover Ratio = 5.33 times
e] Earnings Per Share = `2.50
f] Dividend Payout Ratio = `0.60

4] From the following information, calculate

a] Quick Ratio,
b] Interest Coverage Ratio,
c] Inventory Turnover Ratio,
d] Trade Receivables Turnover Ratio,
e] Return On Shareholders Fund, and
f] Book Value Per Share.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 122 | P a g e

Particulars `

Revenue from Operations 3,00,000

Cost of Revenue from operations 2,40,000
Inventory at the end 62,000
Trade payables 16,000
Inventory in the beginning 58,000
Trade receivables 32,000
Net Profit After Tax 1,00,000
Share Capital 6,00,000
(Equity share of `10 each)
10% Debentures 4,00,000
Net Profit Before Tax 2,00,000

Answers:
a] Quick ratio = 2:1
b] Interest Coverage Ratio = 6 times
c] Inventory Turnover Ratio = 4 times
d] Trade Receivables Turnover Ratio = 9.38 times
e] Return On Shareholders Fund = 14.29 %
f] Book Value Per Share = `11.67

5] X Ltd., presented the following Trading and Profit &Loss account for the
year ended 31.3.2024.
Trading and Profit and Loss A/c for the year ending 31-3-2024
Dr. Cr.
Particulars ` Particulars `
To Opening Stock 2,00,000 By Sales 10,00,000
To Purchases 7,00,000 By Closing Stock 4,00,000
To Wages 1,00,000
To Gross profit 4,00,000
14,00,000 14,00,000

ToAdministrative Expenses 3,00,000 By Gross Profit 4,00,000

To Selling & Distribution Exp. 40,000 By Profit on sale of plant 20,000
To Net Profit 80,000
4,20,000 4,20,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 123 | P a g e

Additional information :
i] On 31.03.2024, Debtors : `2,00,000 and Creditors : `3,00,000.
ii] Share Capital `1,00,000 and Capital Employed ` 9,00,000.

Calculate:
a] Current Ratio, b] Proprietary Ratio,
c] Inventory Turnover Ratio, d] Trade Payables Turnover Ratio,
e] Gross Profit Ratio and f] Operating Ratio.
Answers:
a] Current Ratio = 2:1
b] Proprietary Ratio = 0.2:1
c] Inventory Turnover Ratio = 2 times
d] Trade Payables Turnover Ratio = 2.33 Times
e] Gross Profit Ratio = 40 %
f] Operating Ratio = 94 %

6] From the following details, calculate.

a] Current Ratio,
b] Debt to Capital Employed Ratio,
c] Investment Turnover Ratio,
d] Fixed Assets Turnover Ratio,
e] Return On Investment and
f] Earnings Per Share.

Particulars `
Equity Share Capital at `10 each 4,00,000
12% Preference Share Capital 1,00,000
Reserves and Surplus 1,84,000
10% Debentures 4,00,000
Current Liabilities 1,00,000
Fixed Assets 9,50,000
Current Assets 2,34,000

Net Profit after tax was `1,50,000. Revenue from operations for the year
was `30,00,000 and tax amounted to `50,000.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 124 | P a g e

Answers:
a] Current ratio = 2.34:1
b] Debt to Capital Employed Ratio = 0.37:1
c] Investment Turnover Ratio = 2.77 times
d] Fixed Assets Turnover Ratio = 3.16 times
e] Return On Investment = 22.14 %
f] Earnings Per Share = `3.45

7] The followings are the summarized Profit and Loss Account for the year
ended 31.03.2024 and Balance Sheet as on that date:
Trading and Profit and Loss a/c for the year ending 31.03.2024
Dr. Cr.
Particulars ` Particulars `

To Opening Stock 20,000 By Sales 2,00,000

To Purchases 1,10,000 By Closing Stock 30,000
To Gross profit 1,00,000
2,30,000 2,30,000

To Administrative Expenses 30,000 By Gross Profit 1,00,000

To Interest 10,000
To Selling Expenses 20,000
To Net Profit 40,000
1,00,000 1,00,000

Balance Sheet as at 31.03.2024

Liabilities ` Assets `

Share Capital 1,60,000 Land and Buildings 1,00,000

Debentures 40,000 Plant and Machinery 60,000
Profit and Loss A/c 40,000 Furniture 40,000
Creditors 50,000 Stock 30,000
Bills Payable 30000 Sundry Debtors 30,000
Bills Receivable 25,000
Cash at bank 35,000

3,20,000 3,20,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 125 | P a g e

You are required to calculate :
a] Liquid ratio,
b] Debt to Capital Employed Ratio,
c] Inventory Turnover Ratio,
d] Trade Receivables Turnover Ratio,
e] Net Profit Ratio, and
f] Operating Ratio.

Answers:
a] Liquid ratio = 1.13:1
b] Debt to Capital Employed Ratio = 0.17:1
c] Inventory Turnover Ratio = 4 times
d] Trade Receivables Turnover Ratio = 3.64 times
e] Net Profit Ratio = 20 %
f] Operating Ratio = 75 %

8] From the given information, you are required to calculate the following
Ratios:
a] Current Ratio,
b] Total Assets to Debt Ratio,
c] Trade Payables Turnover Ratio,
d] Investment Turnover Ratio,
e] Price Earning Ratio, and
f] Book Value Per Share.
Trading and Profit and loss A/c for the year ending 31-3-2024
Dr. Cr.
Particulars ` Particulars `

To Opening Stock 3,000 By Sales 40,000

To Purchases 30,000 By Closing Stock 5,000
To Gross profit 12,000
45,000 45,000

To Sundry Expenses 2,000 By Gross Profit 12,000

To Net Profit 10,000
Total 12,000 Total 12,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 126 | P a g e

Balance Sheet as at 31-3-2024
Liabilities ` Assets `
Eq. Share Capital 20,000 Land and Building 5,000
( `10 each) Plant and Machinery 5,000
Reserve and Surplus 3,000 Stock 5,000
Debentures 1,000 Debtors 8,000
Creditors 5,000 Cash 6,000
29,000 29,000

Earning Per Share `2.50,and Market price of Share `30

Answers:
a] Current Ratio = 3.8:1
b] Total Assets to Debt Ratio = 29:1
c] Trade Payables Turnover Ratio = 6 times
d] Investment Turnover Ratio = 1.67 times
e] Price Earnings Ratio = 12 times
f] Book Value Per Share = `11.50

9] From the following information, you are required to calculate:

a] Current Ratio ,
b] Debt Equity Ratio,
c] Capital Employed Turnover Ratio,
d] Working Capital Turnover Ratio,
e] Operating Profit Ratio and
f] Book Value Per Share.
Particulars `

Revenue from Operations 20,00,000

Equity Share Capital (`10 each) 5,00,000
Current Assets 4,00,000
Operating Profit 16,00,000
13% Debentures 1,00,000
Reserve & Surplus 1,00,000
10% Preference Shares of `10 2,00,000
Current Liabilities 3,00,000
Plant and Machinery 3,00,000
Furniture 5,00,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 127 | P a g e

Answers:
a] Current Ratio = 1.33:1 or 4:3
b] Debt Equity Ratio = 0.13:1
c] Capital Employed Turnover Ratio = 2.22 times
d] Working Capital Turnover Ratio = 20 times
e] Operating Profit Ratio = 80 %
f] Book Value Per Share = `12

10] From the following information, calculate:

a] Quick Ratio,
b] Proprietary Ratio,
c] Fixed Assets Turnover Ratio,
d] Working Capital Turnover Ratio,
e] Book Value Per Share and
f] Dividend Payout Ratio.
Particulars `
Sales(Revenue from operations) 6,00,000
Stock 1,00,000
Current Assets (including stock) 4,00,000
Fixed Assets 8,00,000
70,000 Equity shares of `10 each 7,00,000
Net profit after tax but before dividend 1,75,000
Debentures 125,000
Current Liabilities 200,000
Earnings Per Share `2.50
Dividend declared @ 15% --

Answers:
a] Quick Ratio =1.5:1 or 3:2
b] Proprietary Ratio =0.88:1
c] Fixed Assets Turnover Ratio =0.75 times
d] Working Capital Turnover Ratio = 3 times
e] Book Value Per Share = `12.50
f] Dividend Payout Ratio = `0.60

11] From the following particulars, calculate:

a] Current Ratio,
b] Debt to Capital Employed Ratio,
c] Trade Receivables Turnover Ratio,
d] Trade Payables Turnover Ratio,
e] Operating Ratio and
f] Net Profit Ratio.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 128 | P a g e

Particulars `

Revenue from operations 10,00,000

Gross profit 2,00,000
Inventory 1,50,000
Net credit revenue from operations 6,00,000
Trade receivables 1,50,000
Net Credit Purchases 5,00,000
Trade payables 2,50,000
Operating expenses 1,00,000
Net profit 1,00,000
Debentures 2,00,000
Share Capital 4,00,000
Answers:
a] Current Ratio = 1.2:1
b] Debt to Capital Employed ratio = 0.29:1
c] Trade Receivables Turnover ratio = 4 times
d] Trade Payables Turnover ratio = 2 times
e] Operating Ratio = 90 %
f] Net Profit Ratio = 10 %
12] From the following particulars, calculate:
a] Quick Ratio,
b] Interest Coverage Ratio,
c] Net Assets Turnover Ratio,
d] Fixed Assets Turnover Ratio,
e] Operating Profit Ratio and
f] Return on Investment.
Particulars `

Revenue from operations 60,00,000

Net fixed assets 30,00,000
Operating profit 5,00,000
Profit after interest and tax 3,00,000
Interest and tax expenses 2,00,000
Capital employed 40,00,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 129 | P a g e

Quick Assets 20,00,000
Current Liabilities 10,00,000
10 % Debentures 10,00,000

Answers:
a] Quick Ratio = 2:1
b] Interest Coverage Ratio = 5 times
c] Net Assets Turnover Ratio = 1.5 times
d] Fixed Assets Turnover Ratio = 2 times
e] Operating Profit Ratio = 8.33 %
f] Return On Investment = `12.50

13] Following are the Trading and Profit and Loss A/c and Balance Sheet
relating to Uttam Cement Co., Ltd., for the year ending 31-03 2024;
Trading and Profit and Loss A/c
Dr. for the year ending 31-03-2024 Cr.
Particulars ` Particulars `
To Opening Stock A/c 25,000 By Sales A/c 300,000
,, Purchases ,, 175,000 ,, Closing Stock A/c 50,000
,, Freight ,, 35,000
,, PandL A/c(GrossProfit) 115,000
350,000 350,000
,, Selling Expenses ,, 35,000 ,,Trading A/c (Gross 115,000
profit)
,, Administrative ,, ,, 25,000
,, Interest ,, 5,000
,, Net Profit ,, 50,000
1,15,000 1,15,000

Balance Sheet as on 31-03- 2024

Liabilities ` Assets `
Share Capital 300,000 Building 200,000
Profit and Loss A/c 50,000 Machinery 100,000
10%Debentures 50,000 Inventory 50,000
Creditors 60,000 Debtors 70,000
Bills Payable 40,000 Bank 80,000
5,00,000 5,00,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 130 | P a g e

You are required to calculate :
a] Quick Ratio,
b] Proprietary Ratio,
c] Inventory Turnover Ratio,
d] Trade Receivables Turnover Ratio,
e] Gross Profit Ratio and
f] Operating Ratio.
Answers:
a] Quick Ratio = 1.5:1
b] Proprietary Ratio = 0.88:1
c] Inventory Turnover Ratio = 4.93 times
d] Trade Receivables Turnover Ratio = 4.29 times
e] Gross Profit Ratio = 38.33 %
f] Operating Ratio = 81.67 %

14] From the following Balance Sheet and additional information, calculate;
a] Current Ratio , b] Debt Equity Ratio,
c] Investment Turnover Ratio, d] Trade Payables Turnover Ratio,
e] Net Profit Ratio and f] Earnings Per Share.
Balance Sheet as on 31-03-2024
Liabilities ` Assets `
Bills Payable 20,000 Cash 20,000
Creditors 60,000 Bank 35,000
Profit and Loss A/c (PAT) 70,000 Debtors 50,000
General Reserve 50,000 Stock 45,000
12% Debentures 1,00,000 Furniture 70,000
Equity Share Capital 2,00,000 Plant and Machinery 1,20,000
( of Rs. 10 each ) Land and Building 1,60,000
5,00,000 5,00,000

Additional information:
a] Net credit purchases `400,000.
b] Revenue from operations `12,60,000
Calculate
a] Current Ratio, b] Debt Equity Ratio,
c] Investment Turnover Ratio, d] Trade Payables Turnover Ratio,
e] Net Profit Ratio and f] Earnings Per Share.
Answers.
a] Current Ratio = 1.88:1
b] Debt Equity Ratio = 0.3:1

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 131 | P a g e

c] Investment Turnover Ratio = 3 times
d] Trade Payables Turnover Ratio = 5 times
e] Net Profit Ratio = 5.56 %
f] Earnings Per share = `3.50

15] From the followings details, calculate:

a] Current Ratio, b] Interest Coverage Ratio,
c] Fixed Assets Turnover Ratio, d] Working Capital Turnover Ratio,
e] Operating Profit Ratio and f] Return On Investment.
Particulars `
Equity Share Capital 2,00,000
Preference Share Capital 50,000
Reserve Fund 92,000
10 % Debentures 2,00,000
Current Liabilities 50,000
Fixed Assets 4,75,000
Current Assets 117,000
Net Profit After Tax 75,000
Revenue from operations 15,00,000
Amount of tax 25,000
Operating Profit 4,50,000

Answers :
a] Current Ratio = 2.34:1
b] Interest Coverage Ratio = 6 times
c] Fixed Assets Turnover Ratio = 3.16 times
d] Working Capital Ratio = 22.39 times
e] Operating Profit Ratio = 30 %
f] Return On Investment = 22.14 %

Key answer for short questions :

MCQs
1-d , 2-d, 3-b, 4-a, 5-b, 6-d, 7-c, 8-b, 9-b, 10-c, 11-c, 12-c, 13-a, 14-a, 15-a, 16-d.
Fill in the blanks:
1.Financial Analysis 2.ratio 3.Ratio 4.Comparativr Ratio
5.Acid Test Ratio 6.End itself 7-current assets 8-Liquidity
9.cash 10.Profitabilty 11.gross profit 12.Debt Equity
13-net assets 14.Inventory Turnover 15.Average collection period.
Match the following:
a- iv, b- iii , c- ii , d- i , e- viii , f- v , g- vi , h- xi , i- x, j- ix
True or False :
17-False, 18-True, 20-False, 21-True , 22- False, 23-True, 24- True , 25- False , 26- True, 27-True ,
28- True , 29- True , 30-False, 31- True , 32- False , 33- True , 34- True , 35- True.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 132 | P a g e

CHAPTER - 10

CASH FLOW STATEMENT

PART - A
One Mark Questions:
I] Multiple Choice Questions:
1] Example of cash inflows from investing activities is-
a] Cash receipts from disposal of fixed assets.
b] Interest paid in cash for loans & advances.
c] Dividend paid to shareholders.
d] Purchase of fixed assets.

2] Which one of the following is not a cash outflow from operating activities?
a] Cash payments to suppliers for goods and services.
b] Cash payments to and on behalf of the employees.
c] Cash payments to acquire fixed assets.
d] Cash payments to an Insurance Company for premium.

3] Which of the following is not a cash inflow from investing activities?

a] Cash receipts from disposal of fixed assets.
b] Cash receipts from sale of goods and rendering of services.
c] Interest received in cash from loans and advances.
d] Dividend received from investments in other enterprises.

4] Cash receipts from customers means:

a] Revenue from operations – opening trade receivables +
closing trade receivables.
b] Revenue from operations + opening trade payables –
closing trade payables.
c] Revenue from operations + opening trade receivables –
closing trade receivables.
d] Revenue from operations - opening trade receivables -
closing trade receivables.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 133 | P a g e

5] Purchases means:
a] Cost of revenue from operations + opening inventory – closing inventory.
b] Cost of revenue from operations – opening inventory + closing inventory.
c] Cost of revenue from operations – opening trade receivables + closing
trade receivables.
d] Cost of revenue from operations - opening inventory - closing inventory.

6] Purchase of land and building by paying cash is :

a] non cash item
b] operating activity
c] financing activity
d] investing activity.

7] Issue of Debentures for cash is:

a] cash outflow
b] cash inflow
c] operating activity
d] investing activity.

8] Repayment of bank loan is:

a] operating activity
b] investing activity
c] financing activity
d] non cash transaction

9] Best example for extraordinary items:

a] salary paid
b] tax paid
c] rent paid
d] loss due to theft

10] Buy back of its own equity shares by a Company is

a] cash outflow
b] operating activity
c] cash inflow
d] investing activity

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 134 | P a g e

11] Which of the following is not a cash inflow?
a] Decrease in debtors
b] Issue of shares
c] Decrease in creditors
d] Sale of fixed asset

12] Investment costing `10,000 sold for `12,000. The amount shown in
investing activity is
a] `2,000
b] `10,000
c] `12,000
d] `2,200

II. Fill in the blanks questions;

1] Purchase of any asset by paying cash is _______________.
2] Collection of cash from trade receivables is _____________.
3] Operating activities constitute the ___________activities of an enterprise.
4] ____________activities relate to purchase and sale of fixed assets.
5] Indirect method of ascertaining cash flows from operating activities begins
with the amount of___________.
6] Cash flow statement prepared by ________ method is used by most companies
in practice in case of operating activities.
7] Cash Flow Statement helps in _________ of cash flows.
8] Generally _________ activities result in determination of net profit or loss.
9] Payment of _____ on operating profit should be classified as operating activity.
10] Changes in working capital arise due to fluctuation in amount of ----assets.
11] Cash paid to and on behalf of ______ should be classified as operating activity.
12] _________ item may be operating/investing/financing activity.

III. Match the following ;

A B
a) Cash Flow Statement prepared i. Extraordinary item
b) Cash flow statement shows ii. Transactions related to
long-term investment of cash
c) Cash equivalents mean iii. Example for operating activity

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 135 | P a g e

d) Operating activities iv. Non-cash item
e) Investing activities v. Inflows and outflows of cash

f) Earthquake vi. As per A.S-3 (AS-3)

g) Depreciation vii. Convertible into cash
h) Issue of Shares viii. Cash outflow
i) Salary paid ix. Main activities
j) Redemption of Debentures x. Cash inflow
xi. As per A.S-26 (AS-26)

I. Very short answers Questions:

1] Mention any one benefit of cash flow statement.
2] Give the meaning of cash flows.
3] Give an example for investing activities.
4] Give an example for cash outflows from financing activities.
5] Give an example for extraordinary item.
6] Expand ICAI.
7] Extraordinary items are recurring in nature. (State True or False)
8] Cash flow statement is a first important financial statement. (State True or
False)
9] An enterprise should report cash flows from operating activities either by
using direct method or indirect method. (State True or False)
10] According to revised AS -3, preparation and presentation of cash flow
statement is mandatory for all listed companies. (State True or False)
11] What is the main objective cash flow statement?.
12] Name the tool of financial information about sources and uses of cash and
cash equivalents.
13] Give an example for cash outflow of investing activities.
14] State any one example of cash inflow from operating activity.
15] Dividend paid is an investing activity (State True or False).

PART – B
Two Marks Questions:
1] What is cash flow statement?
2] State any two uses of cash flow statement.
3] Write any two objectives of preparing cash flow statement.
4] What do you mean by investing activities?
5] Mention any two activities which are classified as per AS-3.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 136 | P a g e

6] Write any two examples for financing activities.
7] If revenue from operations are `48,000, opening trade receivables are `8,000
and closing trade receivables are `6,000, calculate cash receipts from
customers.
8] If purchases are `72,000, opening trade payables are `12,000 and closing
trade payables are `9,000, calculate cash payments to suppliers.
9] Give the meaning of financing activities.
10] What are the two methods of ascertaining cash flows from operating activities?
11] Write any two cash inflows for investing activities.
12] Write any two cash outflows for financing activities.
13] State any two examples of operating activities.
14] Name any two items to be added back to net profit/loss, while calculating
cash flow from operating activities under indirect method.
15] Write any two items to be deducted from net profit/loss while calculating cash
flow from operating activities under indirect method.
16] What are operating activities?
PART – C
Six Marks Problems
Problems on Operating activities.
1] Anand Ltd., arrived at a net income of `5,00,000 for the year ended March
31,2024. Depreciation for the year was `2,00,000. There was a profit of
`50,000 on assets sold which was transferred to statement of profit and loss.
Trade Receivables increased during the year `40,000 and Trade Payables also
increased by `60,000.
Compute the cash flow from operating activities by the indirect method.
(Ans: `6,70,000)

2] Statement of Profit or Loss of Yamuna Ltd., for the year ended March 31,2024
Particulars Note No. Amount (`)
i. Revenue from operations. 10,00,000
ii. Expenses :
Cost of materials consumed 1 50,000
Purchases of stock-in-trade 5,00,000
Other expenses 2 3,00,000
Total expenses 8,50,000
iii. Profit Before Tax 1,50,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 137 | P a g e

Additional information:
a] Trade receivables decreased by `30,000 during the year.
b] Prepaid expenses increased by `5,000 during the year.
c] Trade payables increased by `15,000 during the year.
d] Outstanding expenses increased by `3,000 during the year.
e] Other expenses included depreciation of `25,000.
Compute net cash from operations for the year ended March 31, 2024
by the indirect method.
(Ans: cash from operations `2,18,000)

3] Compute cash from operations from the following information.

i] Profit for the year 2023-24 is a sum of `10,000 after providing for
depreciation of `2,000.
ii] The current assets and liabilities of the business for the year ended
March 31, 2023 & 2024 are as follows-
Particulars March March
31,2023 (`) 31,2024 (`)
Trade receivables 14,000 15,000
Provision for Doubtful Debts 1,000 1,200
Trade payables 13,000 15,000
Inventories 5,000 8,000
Other current assets 10,000 12,000
Expenses payable 1,000 1,500
Prepaid expenses 2,000 1,000
Accrued income 3,000 4,000
Income received in advance 2,000 1,000

(Ans: Cash from operations: `7,700)

4] Net Profit of L G Co., Ltd., is `700,000 after charging depreciation of

`150,000. Profit of `60,000 on asset sold was transferred to Statement of
P/L.Trade payables decreased during the year by `45,000 and trade
receivables also decreased by `55,000.
Calculate cash flows from operating activities by the indirect method.
(Ans: `8,00,000)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 138 | P a g e

5] Following is the Statement of P & L of Manjunath Co., Ltd., for the year
ending 31-03-2024:
Particulars Note No. Particulars
Revenue from operations 9,00,000
Expenses:
Purchases 3,60,000
Employee Benefit Expenses 2,40,000
Depreciation & Amortisation expenses 50,000
Total expenses 6,50,000
Profit before tax 2,50,000

Additional information:
a] During the year ,prepaid expenses decreased by `28,000.
b] During the year , outstanding expenses are also decreased by `22,000.
c] Trade payables increased by `40,000 during the year.
(Ans : `346,000)

Problems on Investing Activities:

6] National Trading Company Ltd., has given the following information:
Plant as on 1/4/2023 `1,20,000
Plant as on 31/3/2024 `1,50,000
Accumulated depreciation on 1/4/2023 ` 60,000
Accumulated depreciation on 31/3/2024 `40,000
During the year, a plant costing `60,000 with accumulated depreciation of
`25,000 was sold for `30,000.
Calculate cash flow from investing activities.
(Ans: Cash used in investing activities `60,000 )

7] From the following particulars, calculate cash flow from investing activities.
Particulars Purchased Sold
` `
Plant 4,40,000 50,000
Investments 1,80,000 1,00,000
Goodwill 2,00,000 --------
Patents ---------- 1,00,000

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 139 | P a g e

Interest received on debentures held as investments `60,000
Dividend received on shares held as investment `10,000
A plot of land had been purchased for investment purpose and was let out
for commercial use and rent received `30,000
(Ans: Cash used in investing activities `4,70,000)

8] From the following information, calculate cash flow from investing activities.
Particulars 2023 (`) 2024 (`)
Machine at cost 5,00,000 9,00,000
Accumulated depreciation 3,00,000 4,50,000

In the year 2024, machine costing `2,00,000 was sold at a profit of

`1,50,000. Depreciation charged on machine during the year 2024
amounted to `2,50,000.
(Ans: Cash used in investing activities `3,50,000 )

9] From the following particulars, calculate cash flows from investing activities:
Particulars Purchased ` Sold `
Machinery 200,000 -
Investments 150,000 60,000
Patents _ 50,000
Land 100,000 _
Dividend received on shares held as investments `35,000.
Interest received on debentures held as investments `20,000.
(Ans: Cash used in investing activities `285,000)

10] From the following particulars , calculate cash flow from investing activities
a] Machinery purchased `450,000.
b] Investments sold `600,000.
c] Dividend received on shares held as investment `35,000.
d] Furniture purchased for `27,000.
e] Interest received on debentures held as investment `58,000.
f] Income tax paid `50,000.
(Ans: Cash flow from investing activities `2,16,000)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 140 | P a g e

Problems on Financing Activities.
11] From the following information, calculate cash flows from financing
activities.
April 01, 2023 March 31, 2024
Particulars ` `
Equity share capital 20,00,000 30,00,000
Secured loan 9,00,000 16,00,000
During the year secured loan repaid `4,00,000 with interest of `20,000
and paid dividend of `50,000.
(Ans: Cash flow from financing activities `16,30,000 )

12] From the following information, calculate cash flow from financing activities.
April 01,2023 March 31,2024
Particulars ` `
Debentures 8,00,000 10,00,000
Preference share capital 3,00,000 5,00,000
During the year, the company redeemed debentures of Rs.1,00,000.
(Ans: Cash flow from financing activities `4,00,000 )

13] From the following information, calculate cash flows from financing
activities:
Particulars 2023 (` ) 2024 (`)
Equity share capital 28,00,000 35,00,000
Bank loan 12,50,000 7,50,000

(Ans: Cash flow from financing activities ` 2,00,000 )

14] From the following, ascertain cash flows from financing activities:
Particulars 01-04-2023 (`) 31-03-2024 (`)
Equity Share Capital 5,00,000 7,50,000
L. T. Borrowings 3,00,000 4,50,000
During the year, borrowings repaid `1,00,000
and interest paid on them `20,000
(Ans: Cash flow from financing activities `2,80,000)

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 141 | P a g e

15] From the following information, calculate cash flow from financing activities
Particulars 01-04-2023(`) 31-03-2024(`)
Preference Share Capital 4,00,000 5,00,000
Equity Share Capital 6,00,000 8,00,000
Secured Loan 4,50,000 3,50,000
10%Debentures 3,00,000 4,50,000
During the year dividend paid `80,000 and interest paid `70,000.
(Ans: Cash flow from financing activities `2,00,000)

Key answer for short questions :

MCQs:
1.(a) 2.(c) 3.(b) 4. (c) 5.(b) 6.(d) 7.(b) 8.(c) 9.(d) 10.(a)
11.(c) 12.(c).

Fill in the Blanks:

1.cash outflow 2.cash inflow 3.primary 4.Investing
5.net profit or loss 6.Indirect 7.balancing 8.operating
9.tax 10. Current 11.employees 12.interest

Match the following:

a- vi b-v c-vii d-ix e-ii f-I g-iv h-x i-iii j-viii.

True or False:
7.False 8.False 9.True 10.True 15.False.

REVIESED QUESTION BANK (DPUE) – 2024-25 II - PUC 142 | P a g e