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12th Standard English Medium Accountancy Reduced Syllabus Five mark Important Questions - 2021(Public Exam )

Published on: 27/02/2021

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Questions:

Generic 5

21 x 5 = 105

From the following balance sheets of Subha and Sudha who share profits and losses equally. Calculate interest on capital at 6% p.a for the year ending 31^st December 2017.

Balance sheet as.on 31st December 2017
Liabilities	Rs.	Assets	Rs.
Capital accounts:		Fixed assets	60,000
Subha	30,000	Current assets	20,000
Sudha	40,000
P&L App A/C	10,000

	80,000		80,000

Drawing of Shubha and Sudha during the year were Rs.5,000 and Rs.7,000 respectively profit earned during the year was Rs.30,000.

M/s Saniya sport equipment does not keep proper records. From the following information, find out profit or loss and also prepare balance sheet for the year ended 31^st December 2017.

Particulars	31.12.2016 Rs.	31.12.2017 Rs.
Cash in hand	6,000	24,000
Bank overdraft	30,000	-
Stock	50,000	80,000
Sundry creditors	26,000	40,000
Sundry debtors	60,000	1,40,000
Bills payable	6,000	12,000
Furniture	40,000	60,000
Bills receivable	8,000	28,000
Machinery	50,000	1,00,000
Investment	30,000	80,000

Drawings Rs. 10,000 per month for personal use, additional capital introduced during the year Rs. 2,00,000. A bad debts Rs. 2,000 and a provision of 5% it to be made on debtors. Outstanding salary 2,400, prepaid insurance Rs. 700, depreciation charged on furniture @ 10% per annum.

Following is the receipts and payments accounts of Literacy club for the year ended 31^stMarch 2016

Receipts	Rs.	Rs.	Payments	Rs.
To Balance c/d		19,550	By Salary	3,000
			By News papers	2,050
To Subscribtions			By Electricity bill	1,000
2014·2015	1,200		By Fixed deposit	20,000
2015·2016	26,500		(on 1^st July, 2015 @
	500		9% per annum
		28,200	By Books	10,600
			By Rent	6,800
To slae old news paper		1,250	By Furniture	10,500
To Government grants		10,000	By Balance dd	11,200
To sale of old furniture		5,700
(book value Rs.7,000)
To interest on fixed deposits		450
		65,150		65,150

Additional information:
(i) Subscription outstanding as on 31^stMarch, 2015 were Rs. 2000 and on 31^stMarch, 2016 Rs. 2,500.
(ii) On 31^stMarch, 2016 Salary outstanding was Rs. 600 and rent outstanding was Rs. 1,200.
(iii) The club owned furniture Rs. 15,000 and books Rs. 7,000 on 1st April, 2015. Prepare income and expenditure account of the dub for the year ended 31^stMarch 2016 and as certain capital fund on 31^stMarch, 2015. Also prepare a balance sheet as on 31^stMarch, 2016.

From the following Receipt and Payment Account for the year ending 31^stMarch 2015 of crickets club. Prepare Income and Expenditure Account for the same period:

Dr Receipt and Payment Account for the year ending March 31, 2015 Cr
Receipts	Rs	Payments	Rs
To Balance c/d	25,000	By Purchase of furniture (1.7.14)	5,000
Bank	25,000	By Salaries	2,000
To Subscriptions		By Electricity charges	600
2014 1,500		By Postage and stationery	150
2015 10,000		By Purchase of books	2,500
2016 500	12,000	By Entertainment expenses	900
To Donation	2,000	papers (1.7.14	8000
To Hall rent	300	By Miscellaneous expenses	600
To Interest on bank deposits	450	By Balance c/d
To Entrance fees	1,000	Cash	300
		Bank	20,400
	40,750		40,750

The following additional information is available:
(i) Salaries outstanding Rs. 1,500
(ii) Entertainment expenses outstanding Rs. 500
(Hi) Bank interest receivable Rs. 150
(iv) Subscription accrued Rs. 400
(v) 50 percent of entrance fees is to capitalised
(vi) Furniture is to be depreciated at 10percent per annum

Kannan, Rahim and John are partners in a firm sharing profit and losses in the ratio of 5 : 3 : 2. The balance sheet as on 31^st December, 2017 was as follows:

Liabilities	Rs	Rs	Asset	Rs
Capital accounts:			Buildings	90,000
Kannan	1,00,000		Machinery	60,000
Rahim	80,000		Debtors	30,000
John	40,000	2,10,000	Stock	20,000
Workmen compensation fund		30,000	Cash at bank	50,000
Creditors		20,000	Profit and loss A/c (loss)	20,000
		2,70,000		2,70,000

John retires on 1st January 2018, subject to following conditions:
(i) To appreciate building by 10%
(ii) Stock to be depreciated by 5%.
(iii) To provide Rs. 1,000 for bad debts
(iv) An unrecorded liability of Rs. 8,000 have been noticed.
(v) The retiring partner shall be paid immediately.
Prepare revaluation account, partners’ capital account and the balance sheet of the firm after retirement.

Calculate operating profit ratio under the following cases.
Case 1: Revenue from operations Rs 10,00,000, Operating profit Rs.1,50,000.
Case 2: Revenue from operations Rs.15,00,000, Operating cost Rs.12,00,000.
Case 3: Revenue from operations Rs.20,00,000, Gross profit 30% on revenue from operations, Operating expenses Rs.4,00,000

From the following particulars, calculate the trend percentages of Babu Ltd.

Particulars	Rs.in thousands
	Year 1	Year 2	Year 3
I EQUITY AND LIABILITIES
1. Shareholders’ Fund	100	127	106
b) Reserves and surplus	30	30	45
2. Non-current liabilities
Long-term borrowings	70	77	84
3. Current liabilities
Trade payables	20	30	40
Total	220	264	275
II ASSETS
1. Non-current assets
a) Fixed assets	100	118	103
b) Non current investments	40	50	60
2. Current assets
Inventories	60	66	72
Cash and cash equivalents	20	20	40
	20	30	40
Total	220	264	275

From the following statement of profit and loss of Dericston Ltd. calculate
(i) Gross profit ratio
(ii) Net profit ratio

**Statement of Profit and Loss**
Particulars	Rs.
I. Revenue from operations	24,00,000
II. Other Income:
Income from investment	70,000
III. Total revenues (I+II)	24,70,000
IV. Expenses:
Purchases of Stock-in-trade	18,80,000
Changes in inventories	- 80,000
Employee benefits expense	2,90,000
Other expenses	1,10,000
Provision for tax	30,000
Total expenses	22,30,000
V. Profit for the year	2,40,000

Mani, Rama and Devan are partners in a firm sharing profits and losses in the ratio of 4 : 3 : 3. Their balance sheet as on 31^st March, 2019 is as follows:

Liabilities	Rs.	Rs.	Asset	Rs.
Capital accounts:			Buildings	80,000
Mani	50,000		Stock	20,000
Rama	50,000		Furniture	70,000
Devan	50,000	1,50,000	Debtors	20,000
Sundry creditors		20,000	Cash in hand	10,000
Profit and loss A/c		30,000
		2,00,000		2,00,000

Mani retired from the partnership firm on 31.03.2019 subject to the following adjustments:
(i) Stock to be depreciated by Rs. 5,000
(ii) Provision for doubtful debts to be created for Rs. 1,000.
(iii) Buildings to be appreciated by Rs. 16,000
(iv) The final amount due to Mani is not paid immediately
Prepare revaluation account and capital account of partners after retirement.

10.

Calculate
(i) Inventory turnover ratio
(ii) Trade receivables turnover ratio
(iii) Trade payables turnover ratio and
(iv) Fixed assets turnover ratio from the following information obtained from Aruna Ltd.

Particulars	As on 31^st March, 2019 Rs.	As on 31^st March, 2019 Rs.
Inventory	3,60,000	4,40,000
Trade receivables	7,40,000	6,60,000
Trade payables	1,90,000	2,30,000
Fixed assets	6,00,000	8,00,000

Additional information:
(i) Revenue from operations for the year Rs. 35,00,000
(ii) Purchases for the year Rs. 21,00,000
(iii) Cost of revenue from operations Rs. 16,00,000.
Assume that sales and purchases are for credit.

11.

The following balance sheet has been prepared from the books of Pearl on 1-4-2018.

Liabilities	Rs.	Assets	Rs.
Capital	2,26,000	Buildings	1,00,000
Sundry creditors:		Furniture	10,000
Maya A/c	24,000	Stock	20,000
		Sundry debtors
		Peter	50,000
		Cash in hand	15,000
		Cash at bank	55,000
	2,50,000		2,50,000

During the year the following transactions took place.
(a) Wages paid by cash Rs. 2,000
(b) Salaries paid by cheque Rs. 5,000
(c) Cash purchases made for Rs. 3,000
(d) Good purchased on credit from Yazhini Rs. 15,000
(e) Goods sold on credit to Jothi Rs. 25,000
(f) Payment made to Yazhini through NEFT Rs. 5,000
(g) Cash received from Peter Rs. 30,000
(h) Cash sales made for Rs. 6,000
(i) Depreciate buildings at 10%
(j) Closing stock on 31.03.2019 Rs. 15,000
You are required to prepare trading and profit and loss account for the year ended 31-03-2019 and a balance sheet as on that date using Tally.

12.

Anand and Balu are partners in a firm sharing profits and losses in the ratio of 7:3. Their balance sheet as on 31st March, 2018 is as follows:

Liabilities	Rs.	Rs.	Assets	Rs.
Capital accounts:			Land	60,000
Anand	50,000		Stock	40,000
Balu	30,000	80,000	Debtors	20,000
Sundry creditors		20,000	Cash in hand	10,000
Profit and loss A/c		30,000
		1,30,000		1,30,000

Chandru is admitted as a new partner on 1.4.2018 by introducing a capital of Rs. 20,000 for 1/4 share in the future profit subject to the following adjustments:
(a) Stock to be depreciated by Rs. 3,000
(b) Provision for doubtful debts to be created for Rs. 2,000.
(c) Land was to be appreciated by Rs. 10,000
Prepare revaluation account and capital account of partners after admission.

13.

From the following details, calculate the value of goodwill at 2 years purchase of super profit:
(a) Total assets of a firm are Rs. 5,00,000
(b) The liabilities of the firm are Rs. 2,00,000
(c) Normal rate of return in this class of business is 12.5 %.
(d) Average profit of the firm is Rs. 60,000

14.

Richard and Rizwan started a business on 1st January 2018 with capitals of Rs. 3,00,000 and Rs. 2,00,000 respectively. According to the Partnership Deed
(a) Interest on capital is to be provided @ 6% p.a.
(b) Rizwan is to get salary of Rs. 50,000 per annum.
(c) Richard is to get 10% commission on profit (after interest on capital and salary to Rizwan) after charging such commission.
(d) Profit-sharing ratio between the two partners is 3:2.
During the year, the firm earned a profit of Rs. 3,00,000.
Prepare profit and loss appropriation account. The firm closes its accounts on 31st December every year.

15.

Following is the Receipts and payments account of Virudhunagar Volleyball Association for the year ended 31^st December, 2018

Dr. Receipts and Payments Account for the year ended 31^st December, 2018 Cr.
Receipts	Rs.	Rs.	Payments	Rs.	Rs.
To balance b/d			By Match expenses		25,000
Cash in hand		5,000	By Upkeep of pavilion		17,000
To Subscription			By Secretary’s honorarium		18,000
2017	10,000		By Bats and balls purchased		22,000
2018	55,000		By Grass seeds		2,000
2019	5,000	70,000	By Fixed deposit		58,000
To Donations		40,000	By Sundry expenses
To Match fund receipts		30,000	By Balance c/d
To Interest on fixed deposit		8,000	Cash in hand	7,000
To Miscellaneous receipts		5,000	Cash at bank	6,000	13,000
		1,58,000			1,58,000

Additional information:
(i) On 1.1.2018, the association owned investments Rs. 10,000, premises and grounds Rs. 40,000, stock of bats and balls Rs. 5,000.
(ii) Subscription Rs. 5,000 related to 2017 is still due.
(iii) Subscription due for the year 2018,Rs. 6,000.
Prepare income and expenditure account for the year ended 31^st December, 2018 and the balance sheet as on that date

16.

Following is the Receipts and Payments account of Neyveli Science Club for the year ended 31^st December, 2018

Dr. Receipts and Payments Account for the year ended 31^st December, 2018 Cr
Receipts	Rs.	Payments	Rs.	Rs.
To Balance b/d		By Balance b/d
Cash in hand	2,400	Bank overdraft		1,000
To Subscription	8,700	By Postage expenses		200
To Life membership fees	5,000	By Science equipments
To Exhibition fund receipts	7,000	purchased		10,000
To Sale of science		By Laboratory expenses		2,400
equipments (Book value Rs.5,000)	6,000	By Audit fees		3,600
To Miscellaneous income	500	By General charges		1,800
		By Exhibition expenses		5,000
		By Balance c/d
		Cash in hand	200
		Cash at bank	400	600
		Cash at bank	400	600
	29,600			29,600

Additional information:
(i) Opening capital fund Rs. 6,400
(ii) Subscription includes Rs. 600 for the year 2019
(iii) Science equipment as on 1.1.2018 Rs. 5,000
(iv) Surplus on account of exhibition should be kept in reserve for new auditorium.
Prepare income and expenditure account for the year ended 31^st December, 2018 and the balance sheet as on that date

17.

Mayiladuthurai Recreation Club gives you the following details. Prepare Receipts and Payments account for the year ended 31^st March, 2019.

Particulars	Rs.	Particulars	Rs.
Opening cash balance	15,000	Salary of watchman	12,000
Opening bank balance	25,000	Club annual day expenses	15,000
Donations received	48,000	Lighting charges	16,500
Sale of old equipment	26,000	Entertainment expenses	13,500
Refreshment charges	13,000	Billiards table purchased	5,000
Club annual day collections	18,000	Expenses of charity show	3,000
Construction of tennis court	7,000	Sale of investments	12,000
Receipts from charity show	4,000	Closing cash balance	12,000
Rent paid	1,000

18.

From the following Receipts and Payments account of Coimbatore Cricket Club for the year ending 31^st March 2016, prepare income and expenditure account for the year ending 31^st March, 2016 and a balance sheet as on that date.

In the books of Coimbatore Cricket Club Receipts and Payments Account for the year ending 31^stMarch, 2016
Receipts	Rs.	Payments	Rs.
To Balance b/d:		By Maintenance	5,000
Cash at bank	8,000	By Furniture	15,000
To Subscriptions	11,000	By Tournament expenses	1,400
To Sale of old bats and balls	100	By Secretary’s honorarium	4,500
To Subscription for tournament	2,000	By Bats and balls	7,400
To Legacies	20,000	By Balance c/d:
		Cash at bank	7,800
	41,100		41,100

Additional information:
On 1^st April, 2015 the club had stock of balls and bats Rs. 3,000 and an advance subscription of Rs. 500. Surplus on account of tournament should be kept in reserve for permanent pavilion.Subscription due on 31.03.2016 was Rs. 2,000. Stock of bats and balls on 31.3.2016 was Rs. 1,000.

19.

From the following particulars of Poompuhar Literary Association, prepare Receipts and Payments account for the year ended 31^st March, 2019.

Particulars	Rs.	Particulars	Rs.
Opening cash in hand as on 1.4.2018	5,000	Subscriptions received	20,000
Bank overdraft as on 1.4.2018	4,000	Repairs and renewals	2,500
Printing and stationery	1,500	Conveyance paid	2,750
Interest paid	3,250	Books purchased	10,000
Sale of investments	1,000	Insurance premium paid	4,000
Purchase of refreshments	1,500	Sundry receipts	750
Outstanding salary	2,000	Government grants received	6,000
Endowment fund receipts	2,000	Sale of refreshments	1,500
Lighting charges	1,300	Depreciation on buildings	2,000
		Cash at bank on 31.03.2019	2,000

20.

From the following details of Rakesh, prepare Trading and Profit and Loss account for the year ended 31st March, 2019 and a Balance Sheet as on that date.

Particulars	31.3.2018 Rs.	31.3.2019 Rs.
Stock of goods	2,20,000	1,60,000
Debtors	5,30,000	6,40,000
Cash at bank	60,000	10,000
Machinery	80,000	80,000
Sundry creditors	3,70,000	4,20,000

Other details:

Particulars	Rs.	Particulars	Rs.
Rent paid	1,20,000	Cash received from debtors	12,50,000
Discount received	35,000	Drawings	1,00,000
Discount allowed	25,000	Cash sales	20,000
Cash paid to creditors	11,00,000	Capital as on 1.4.2018	5,20,000

21.

Bharathi does not maintain her books of accounts under double entry system. From the following details prepare trading and profit and loss account for the year ending 31^st March, 2019 and a balance sheet as on that date.

**Dr. Cash Book Cr.**
Receipts	Rs.	Payments	Rs.
To balance b/d	32,000	By Purchases A/c	56,000
To Sales A/c	1,60,000	By Creditors A/c	80,000
To Debtors A/c	1,20,000	By General expenses A/c	24,000
		By Wages A/c	10,000
		By Balance c/d	1,42,000
	3,12,000		3,12,000

Other Information:

Particulars	1.4.2018 Rs.	31.3.2019 Rs.
Stock of goods	40,000	60,000
Debtors	38,000	?
Creditors	58,000	52,000
Machinery	1,70,000	1,70,000

Additional information:	Rs
(i) Credit purchases	74,000
(ii) Credit sales	1,40,000
(iii) Opening capital	2,22,000
(iv) Depreciate machinery by 10% p.a.

Generic 2

1 x 2 = 2

22.

Calculate quick ratio: Total current liabilities Rs. 2,40,000; Total current assets Rs. 4,50,000; Inventories Rs. 70,000; Prepaid expenses Rs. 20,000.

Generic 3

3 x 3 = 9

23.

Sara Company issues 10,000 equity shares of Rs.10 each payable fully on application. Pass journal entries if the shares are issued
(i) at par
(ii) at a premium of Rs.2 per share.

24.

From the following information calculate capital gearing ratio:

**Balance Sheet (Extract) as on 31.03.2018**
Particulars	Rs.
I. EQUITY AND LIABILITIES
1. Shareholders' funds
(a) Share capital
Equity share capital	4,00,000
5% Preference share capital	1,00,000
(b) Reserves and surplus
General reserve	2,50,000
Surplus	1,50,000
2. Non-current liabilities
Long-term borrowings (6% Debentures)	3,00,000
3. Current liabilities
(a) Trade payables	1,20,000
Provision for tax	30,000
Total	13,50,000

25.

Calculate trend percentages for the following particulars of Kurinji Ltd.

Particulars	Rs.in thousands
	2015-16	2016-17	2017-18
Revenue from operations	120	132	156
Other income	50	38	65
Expenses	100	135	123

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Answers Key:

Generic 5

21 x 5 = 105

Particulars	Sudha Rs.	Sudha Rs.
Capital on 31^st December 2017	30,000	40,000
Add: Drawings	5,000	7,000
	35,000	47,000
Less: Profit already credited	15,000	15,000
Capital on 1^st January 2017	20,000	32,000

Calculation of interest on capital:
Subha: On opening capital = Rs.20,000 x \(\frac{6}{100}\) = Rs.1,200
Sudha: On opening capital = Rs.32,000 x \(\frac{6}{100}\) = Rs.1920

Statement of affairs as on 31^st December 2016
Liabilities	Rs.	Assets	Rs.
Bank overdraft	30,000	Cash in hand	6,000
Sundry creditors	26,000	Stock	50,000
Bills payable	6,000	Sundry Debtors	60,000
Capital (Balancing figure)	1,82,000	Furniture	40,000
		Bills receivable	8,000
		Machinery	50,000
		Investment	30,000
	2,44,000		2,44,000

Statement of affairs as on 31^st December 2017
Liabilities	Rs.	Assets	Rs.	Rs.
Sundry creditors	40,000	Cash in hand		24,000
Bills payable	12,000	Stock		80,000
Outstanding salary	2,400	Debtors	1,40,000
Capital (Balancing figure)	4,33,400	Less: Bad debts	2,000
			1,38,000
		Less: Provision @5%	6,900	1,31,100
		Furniture	60,000
		Less: Depreciation @10%	6,000	54,000
		Bills receivable		28,000
		Prepaid insurance		700
		Machinery	1,00,000
		Less: Depreciation @10%	10,000	90,000
		Investment		80,000
	4,87,800			4,87,800

Statement showing profit or loss for the year ending 31st December 2017
Particulars	Rs.
Capital at the end of the year	4,33,400
Add: Drawings during the year (10,000 x 12)	1,20,000
	5,53,400
Less: Additional capital introduced in the year	2,00,000
Adjusted closing capital	3,53,400
Less: Capital in the beginning of the year	1,82,000
Profit for the year 2017	1,71,400

Balance sheet as on 31^st March 20
Liabilities	Rs	Assets	Rs
(balancing figure)	43,550	Cash in hand	19,550
(balancing figure)		Subscription outstanding	2,000
		Furniture	15,000
		Books	7,000
	43,550		43,550

Dr Income and Expenditure Account for the year ended 31^stMarch 2 Cr
Expenditure	Rs.	Rs.	Income	Rs.	Rs.
To Salary	3,000		By Subscriptions	26,500
Add: Outstanding	600	3,600	Add: Outstanding for 2015-16	1,700	28,200
To Newspapers		2,050	By Sale of old newspaper		1,250
To Rent		6,800	By Interest on fixed deposit	450
Add: Outstanding	1,200	8,000	Add: Accrued interest	900	1,350
To Loss on sale of
furniture (7000 - 5700)		1,300
To Surplus		24,850
(Excess of income over
expenditure)
		40,800			40,800

Balance sheet as on 31^st March, 2016
Liabilities	Rs.	Rs.	Assets	Rs.	Rs.
Salary outstanding		600	Cash in hand		11,200
Rent outstanding		1,200	Subscription outstanding
Subscription			for 2014 - 15	800
received in advance		500	(2000 - 1200)
Capital fund	43,550		for 2015 - 16	1,700	2,500
Add: Surplus	24850	68,400	Fixed depo		20,000
			Accrued interest on fixed
			deposit		900
			Furniture (15000-7000 + 10,500		18,500
			Books (7,000 + 10,600		17,600
		70,700			70,700

Dr In the books of Cricket club Income and Expenditure Account for the year ending 31.3.2 Cr
Expenditure	Rs.	Rs.	Income	Rs.	Rs
To Salaries	2,000		By Subscriptions		10,400
			By Donation		2,000
Add: Outstanding	1,500	3,500	By Entrance fees		500
To Telephone charges		300	(50% of 1000)
To Electricity charges		600	By Bank interest	450
To Entertainment expenses	900		Add: Outstanding interest	150	600
			By Interest on investment		200
Add: Outstanding expense	500	1,400	By Hall rent		300
To Miscellaneous expenses		600
To Depreciation on furniture		375
To Surplus (Excess of income		7,075
over expenditure)
		14,000			14,000

Dr Revaluation A/c Cr
Particulars	Rs	Particulars	Rs	Rs
To stock A/c	1,000	By Building A/c		9,000
To Deptors A/c	1,000	By Loss on revaluation transferred to
To Unrecorded liability A/c	8,000
		Kannans capital A/c	500
		Rahim's capital A/c	300
		John's capital A/c	200
				1,000
	10,000			10,000

Dr Capital Account Cr
Particulars	Kannan Rs	Rahim Rs	John Rs	Particulars	Kannan Rs	Rahim Rs	John Rs
To Profit and Loss A/c	10,000	6,000	4,000	By Balance b/d	1,00,000	80,000	40,000
To Revaluation A/c	500	300	200	By Workmens Compensation fund	15,000	9,000	6,000
To Bank	-	-	41,800	compensation
To Balance c/d	1,04,500	82,700	-	fund	15,000	9,000	6,000

	1,15,000	89,000	46,000		1,15,500	89,000	46,000
				By Balance b/d	1,04,500	82,700

Balance Sheet as on 31st December 2017
Liabilities	Rs	Rs	Assets	Rs	Rs
Capital accounts			Buildings	90,000
			Add:Appreciation	9,000	99,000
Kannan	1,04,500		Machinary		60,000
Rahim	82,700	1,87,200
			Deptors	30,000
Sudry creditors		20,000	Less,Bad debts	1,000	29,000
Unrecorded liability		8,000
			Stock	20,000
			Less: Depreciation	1,000	19,000

			Cash at bank	50,000
			Less: Amount paid to John	41,800	8,200
		2,15,200			2,15,200

Case 1: Operating ration = \(\cfrac { Operating\quad profit }{ Revenuefrom\quad operations } \times 100\)
= \(\cfrac { 1,50,000 }{ 10,00,000 } \times 100=15\)%
Case 2: Operating profit ratio = \(\cfrac { Operating\quad profit }{ Revenuefrom\quad operations } \times 100\)
= \(\cfrac { 3,00,000 }{ 15,00,000 } \times 100=20\)%
Operating profit = Revenue from operations – Operating Cost
= 15,00,000 – 12,00,000 = Rs.3,00,000
Case 3:Operating profit ratio = \(\cfrac { Operating\quad profit }{ Revenuefrom\quad operations } \times 100\)
= \(\cfrac { 2,00,000 }{ 20,00,000} \times 100=10\)
Gross profit = \(20,00,000\times \cfrac { 30 }{ 100 } \) = Rs.6,00,000
Operating profit = Gross profit – Operating expenses
Operating profit = Rs.6,00,000 – 4,00,000 = Rs.2,00,000

Trends analysis for Babu ltd
Particular	Rs. in thousands			Trends percentage
Particular	Year 1	Year 2	Year 3	Year 1	Year 2	Year 3
I Equity and liabilities
1. Shareholder's fund
a. Share capital	100	127	106	100	127	106
b. Reserve and surplus	30	30	45	100	100	150
2. Non-current liabilities
Long-term borrowings	70	77	84	100	110	120
3. Current liabilities
Trade payables	20	30	40	100	150	200
Total	220	264	275	100	120	125
II. Assets
1. Non-current assets
a. Fixed assets	100	118	103	100	118	103
b. Non -investment	40	50	60	100	125	150
2. Current assets
Inventories	60	66	72	100	110	120
Cash and cash equivalents	20	30	40	100	150	200
Total	220	264	275	100	120	125

Gross profit ratio = \(\frac { Gross\ profit }{ Revenue\ from\ operations } \) x 100
Gross profit = Revenue from operations - Cost of revenue from operations
Cost of revenue from operations = Purchases of stock-in-trade + Change in inventories
= 18,80,000 + (-80,000)
= Rs.18,00,000
Gross profit = 24,00,000 - 18,00,000 = Rs.6,00,000
∴ Gross profit ratio = \(\frac { 6,00,000 }{ 24,00,000 } \) x 100 = 25%
(ii) Net profit ratio = \(\frac { Net\ profit\ after\ tax }{ Revenue\ from\ operations } \) x 100
= \(\frac { 2,40,000 }{ 24,00,000 } \) x 100 = 10%

Dr. Revaluation Account Cr.
Particulars	Rs.	Rs.	Particulars	Rs.
To Stock A/c		5,000	By Buildings A/c	16,000
To Provision for doubtful debts A/c		1,000
To Profit on revaluation transferred to
Mani’s capital A/c (4/10)	4,000
Rama’s capital A/c (3/10)	3,000
Devan’s capital A/c (3/10)	3,000	10,000
		16,000		16,000

Dr. Capital Account Cr.
Particulars	Mani Rs.	Rama Rs.	Devan Rs.	Particulars	Mani Rs.	Rama Rs.	Devan Rs.
To Mani’s loan A/c	66,000			By Balance b/d	50,000	50,000	50,000
To Balance c/d		62,000	62,000	By Revaluation A/c	4,000	3,000	3,000
				By Profit and loss A/c	12,000	9,000	9,000
	66,000	62,000	62,000		66,000	62,000	62,000
				By Balance b/d		62,000	62,000

10.

(i) Inventory turnover ratio =  \(\frac { Cost\ of\ revenue\ from\ operations }{ Average\ inventory } \)
Cost of revenue from operations = Rs.16,00,000
Average inventory = \(\frac { Opening\ inventory+Closing\ inventory }{ 2 } \)
= \(\frac { 3,60,000+4,40,000 }{ 2 } =\frac { 8,00,000 }{ 2 } \) = 4,00,000
∴ Inventory turnover ratio =  \(\frac { 16,00,000 }{ 4,00,000 } \) = 4 times
(ii) Trade receivables turnover ratio = \(\frac { Credit\ revenue\ from\ operations }{ Average\ trade\ receivables } \)
Credit revenue from operations = Rs.35,00,000
Average trade receivables = \(\\ \frac { Opening\ trade\ receivables+Closing\ trade\ receivables }{ 2 } \)
= \(\frac { 7,40,000+6,60,000 }{ 2 } =\frac { 14,00,000 }{ 2 } \)
= Rs.7,00,000
∴ Trade receivables turnover ratio =\(\frac { 35,00,000 }{ 7,00,000 } \) = 5 times
(iii) Trade payables turnover ratio = \(\frac{Net credit purchases}{Average trade payables}\)
Net credit purchases = Rs.21,00,000
Average trade payables = \(\frac { Opening\ trade\ payables+Closing\ trade\ payables }{ 2 } \)
= \(\frac { 1,90,000+2,30,000 }{ 2 } \)
= \(\frac { 4,20,000 }{ 2 } \)= Rs.2,10,000
∴ Trade payables turnover ratio =  \(\frac { 21,00,000 }{ 2,10,000 } \) = 10 times
(iv) Fixed assets turnover ratio = \(\frac { Revenue\ from\ operations }{ Average\ fixed\ assets } \)
Revenue from operations = Rs.35,00,000
Average fixed assets = \(\frac { Opening\ fixed\ assets+Closing\ fixed\ assets }{ 2 } \)
= \(\frac { 6,00,000+8,00,000 }{ 2 } =\frac { 14,00,000 }{ 2 } \) = Rs.7,00,000
∴ Fixed assets turnover ratio = \(\frac { 35,00,000 }{ 7,00,000 } \).

11.

Following steps are to be followed to enter the transactions in Tally ERP 9
1. To create company:
Company Info > Create Company
Type the Name as Peral and keep all other fields as they are and choose 'Yes' to accept.
2. To maintain accounts only:
Gateway of Tally > F11 Accounting Features > General > Maintain accounts only: Yes > Accept Yes
3. To create ledger accounts with opening balances:
Gateway of Tally > Masters > Accounts Info> Ledgers> Single Ledger> Create

Creation of	Name	Under	Opening balance	Accept
Bright’s Capital A/c	Bright’s Capital A/c	Capital Account	2,26,000	Yes
Ramesh A/c (Sundry creditors)	Ramesh A/c	Sundry Creditors	24,000	Yes
Machinery A/c	Machinery A/c	Fixed Assets	1,00,000	Yes
Furnitures A/c	Furnitures A/c	Fixed Assets	10,000	Yes
Opening stock	Opening stock	Stock-in -Hand	20,000	Yes
Shankar A/c (Sundry debtors)	Shankar A/c	Sundry Debtors	50,000	Yes
Cash in hand	Cash	Cash-in-Hand	15,000	Yes
Cast at bank	Bank	Bank Accounts	55,000	Yes

Note:
Cash account need not be created as it is a default ledger. Only the opening balance has to be recorded by altering the cash account.
To record the opening balance of Cash
Gateway of Tally > Masters > Accounts Info > Ledgers > Single Ledger > Alter

After creating the ledgers and recording the opening balances of ledger accounts the balance sheet of Bright is shown as in the following figure:

4. To create ledger accounts for transactions

Creation of	Name	Under	Accept
Wages A/c	Wages A/c	Direct Expenses	Yes
Salaries A/c	Rent A/c	Indirect Expenses	Yes
Purchases A/c	Purchases A/c	Purchases Account	Yes
Senthamarai A/c	Senthamarai A/c	Sundry Creditors A/c	Yes
Sales A/c	Sales A/c	Sales Account	Yes
Pushparaj A/c	Pushparaj A/c	Sundry Debtors A/c	Yes
Depreciation A/c	Depreciation A/c	Indirect Expenses	Yes

5. To enter transactions through vouchers
Gateway of Tally > Transactions > Accounting Vouchers
Example: Wages of Rs. 2,000 paid by Cash
F5: Payment Voucher
Account: Cash
Particulars: Wages A/c
Amount: Rs. 2,000
Narration: Wages paid by cash
Accept: Yes
In the similar way, record the other transactions. Use Payment Voucher for Salaries paid and payment to Senthamarai.
Use Purchase Voucher for credit purchases from Senthamarai and cash purchases.
Use Sales Voucher for credit sales to Pushparaj and cash sales.
Use Receipt Voucher for cash received from Shankar.
Use Journal Voucher for depreciation.
To record closing stock:
Since maintain accounts only is set to 'Yes' and integrate accounts and inventory is set to "No" under accounting features. Stock has to be recorded manually. Hence the closing stock has to be recorded by altering the stock account and while entering the data of closing stock, the date of opening stock has to be entered. The following procedure is to be followed:
Gateway of Tally > Masters > Accounts Info > Ledgers > Single Ledger > Alter > Stock > Closing balance > Date (opening date) > Amount > Accept Yes

6. To view reports:
(i) To view Profit and Loss Account:
F10: A/c Reports > Profit & Loss A/c > Alt + F1 (detailed) (or)
Gateway of Tally > Report > Profit & Loss A/c > Alt + F1 (detailed)

(ii) To view Balance sheet:
F10: A/c Reports > Balance sheet > Alt + F1 (detailed) (or)
Gateway of Tally > Reports > Balance Sheet > Alt + F1 (detailed)

12.

**Dr. Revaluation Account Cr.**
Particulars	Rs.	Rs	Particulars	Rs.
To		3,000	By Land A/c	10,000
To Provision for doubtful debts		2,000
To Profit on revaluation transferred to
Anand’s capital A/c (7/10)	3,500
Balu’s capital A/c (3/10)	1,500	5,000
		10,000		10,000

**Dr. Capital Account Cr.**
Particulars	Anand Rs.	Balu Rs.	Chandru Rs.	Particulars	Anand Rs.	Balu Rs.	Chandru Rs.
To Balance c/d	74,500	40,500	20,000	By Balance b/d	50,000	30,000	-
				By Bank A/c	-	-	20,000
				By Revaluation A	3,500	1,500	-
				By Profit and loss A/c	21,000	9,000	-
	74,500	40,500	20,000		74,500	40,500	20,000
				By Balance b/d	74,500	40,500	20,000

13.

Goodwill = Super profit \(\times\) Number of years of purchase
Super profit = Average profit - Normal profit
Normal profit = Capital employed \(\times\) Normal rate of return
Capital employed = Fixed asset + Current assets - Current liabilities
5,00,000 - 2,00,000 = Rs. 3,00,000
Normal profit = 3,00,000 x 12.5%
= Rs. 37,500
Super profit = 60,000 - 37,500 = Rs. 22,500
Goodwill = 22,500 \(\times\) 2
= Rs. 45,000

14.

**Dr. Profit and loss appropriation account for the year ended 31st December 2018 Cr.**
Particulars	Rs.	Rs.	Particulars	Rs.
To Interest on capital A/c			By Profit and loss A/c	3,00,000
Richard (3,00,000 x 6%)	18,000
Rizwan (2,00,000 x 6%)	12,000	30,000
To Salary to Rizwan		50,000
To Commission to Richard		20,000
To Partners’ capital A/c (profit)
Richard (3/5)	1,20,000
Rizwan (2/5)	80,000	2,00,000
		3,00,000		3,00,000

Calculation of commission:
Profit before commission = 3,00,000 – (50,000 + 30,000) = Rs. 2,20,000
Commission = Net profit before commission \(\times\) \(\frac { Rate\quad of\quad commission }{ (100+Rate\quad of\quad commission) } \)
Commission = 2,20,000 \(\times\) \(\frac { 10 }{ 110 } \) = Rs. 20,000

15.

In the books of Virudhunagar volleyball Association Balance sheet as on 31^st December 2017
Liabilities	Rs	Assets	Rs
Capital fund	75,000	Investment	10,000
(Balancing figure)		Subscription
		Outstanding
		(10,000+5000)	15,000
		Cash in hand	5,000
		Premises and grounds	40,000
		Stock of bats and bal	5,000
	75,000		75,000

Dr Income and Expenditure Account for the year ended 31^st December 2018 Cr
Expenditure	Rs	Income	Rs	Rs
To Upkeep of pavilion	17,000	By Subscription current year	55,000
To Secretary's honorarium	18,000	Add: Outstanding	6,000
To Bats and balls 22,0			61,000
Less: Stock 5,000	17,000
To Grass seeds	2,000	Less: Advance	5,000	56,000
To Sundry expenses	3,000	By Donations		40,000
To Excess of income over		By Interest on fixed deposit		8,000
expenditure (surplus	52,000	By Miscellaneous recei		5,000
	1,09,000			1,09,000

Balancesheet as on 31^stDecember 2018
Liabilities	Rs	Rs	Assets	Rs	Rs
Capital fund	75,000		Fixed deposit		58,000
Add Excess of income over			Cash in hand	7,000
expenditure (Surplus)	52,000		Cash at bank	6,000	13,000
		1,27,000	Investments
			Premises and
Subscriptions received in		5,000	grounds		40,000
advance			Stock of bats and balls		5,000
			Subscriptions
			Subscriptions		6,000
		1,32,000			1,32,000

16.

Dr In the books of Neyveli science club Income and Expenditure Account for the year ended 31^st December 2018 Cr
Expenditure	Rs	Income	Rs	Rs
To Postage expenses	200	By Subscription	8,700
To Laboratory expenses	2,400	Less: Subscription
To Secretary's honorarium	5,000	advance	600	8,100
To Audit fees	3,600	By Profit on sale of
To General charges	1,800	science equipment
		books		1,000
		By Miscellaneous
		income		500
		By Reserve fund	7,000
		Less: Exhibition	5,000	2,000
		expenses
		By Excess of
		expenditure ov		1400
	13,000	income (deficit)		13,000

Balance sheet as on 31^stDecember 2018
Liabilities	Rs	Rs	Assets	Rs	Rs
Opening capital	6,400		Cash in hand 200	200
Less: Excess of expenditure			Cash at bank 400	400	600
over income (deficit	1,400	5,000	Science equipment		10,000
Life membership fees		5,000
Subscription advance		600
		10,600			10,600

17.

Dr In the books of Mayiladuthurai Recreation club Receipts and Payments Account for the year ended 31^st March, 2019 Cr
Receipts	Rs.	Rs.	Payments	Rs.
To Balance b/d			By Refreshments charges	l3,000
Cash in hand	15,000		By Construction of tennis
Cash at bank	25,000	40,000	cocert	7,000
To Donation received		48,000	By Rent paid	1,000
To Sale of old equipment		26,000	By Salary of watchman	12,000
To Club annual day			By Club annual day expenses	15,000
To Receipts from charity show		4,000	By Entertainment expenses	13,500
To Sale of investments		12,000	By Billiards table purchased	5,000
			By Expenses of charity show	3,000
			By Balance cld
			Cash in hand	12,000
			Cash at bank	50,000
		1,48,000		1,48,000

18.

To find the opening capital fund, opening balance sheet should be prepared.

In the books of Coimbatore Cricket Club Balance sheet as on 31^st March, 2015
Liabilities	Rs.	Assets	Rs.
Capital fund	10,500	Stock of balls and bats	3,000
(Balancing figure)		Cash at bank	8,000
Subscription received in advance	500
	11,000		11,000

Dr. Income and Expenditure Account for the year ended 31st March, 2016 Cr.
Expenditure	Rs.	Rs.	Income	Rs.	Rs.
To Maintenance		5,000	By Subscriptions	11,000
To Secretary’s honorarium		4,500	Add: Received in advance
To Bats and balls	7,400		in 2014-15 for 2015-16	500
Add: Opening stock	3,000			11,500
	10,400		Add: Outstanding for 2015-16	2,000	13,500
Less: Closing stock	1,000	9,400	By Sale of old bats and balls		100
			By Excess of expenditure
			over income (deficit)		5,300
		18,900			18,900

Balance sheet as on 31^st March, 2016
Liabilities	Rs.	Rs.	Assets	Rs.
Capital fund	10,500		Furniture	15,000
Less : Excess of expenditure			Stock of balls and bats	1,000
over income (deficit)	5,300	5,200	Subscriptions outstanding	2,000
Reserve for Pavilion Fund			Cash at bank	7,800
Subscriptions for tournament	2,000
Less: Tournament Expenses	1,400	600
Legacies		20,000
		25,800		25,800

19.

In the books of Poompuhar Literary Association
Dr. Receipts and Payments Account for the year ended 31st March, 2019 Cr
Receipts	Rs.	Payments	Rs.
To Balance b/d		By Balance b/d
Cash in hand	5,000	Bank overdraft	4,000
To Sale of investments	1,000	By Printing and stationery	1,500
To Endowment fund receipts	2,000	By Interest paid	3,250
To Subscriptions received	20,000	By Purchase of refreshments	1,500
To Sundry receipts	750	By Lighting charges	1,300
To Government grants received	6,000	By Repairs and renewals	2,500
To Sale of refreshments	1,500	By Conveyance paid	2,750
		By Books purchased	10,000
		By Insurance premium paid	4,000
		By Balance c/d
		Cash at bank	2,000
		Cash in hand	3,450
	36,250		36,250

Note: As outstanding salary and depreciation are non-cash items, both are to be excluded inreceipts and payments account.

20.

Dr Total Debtors account Cr
Particulars	Rs.	Particulars	Rs
To Balance b/d	5,30,000	By Cash received	12,50,000
To Credit sales	13,85,000	By Discounts allowed	25,000
(balancing figure)		By Balance c/d	6,40,000
	19,15,000		19,15,000

Dr Total Creditors account Cr
Particulars	Rs.	Particulars	Rs
To Cash (paid)	11,00,000	By Balance b/d	3,70,000
To Discount received	35,000	By Credit purchases	11,85,000
To Balance c/d	4,20,000	(balancing figure)
	15,55,000		15,55,000

Dr. In the Books of Rakash Trading and Profit and loss account for the year ended 31st March 2019 Cr.
Particulars	Rs.	Particulars	Rs
To Opening stock	2,20,000	By Sales
To Purchases	11,85,000	Cash sales 20,000
To Gross profit c/d	1,60,000	Credit sales 13,85,000	14,05,000
		By Closing stock	1,60,000
	15,65,000		15,65,000
To Rent paid	1,20,000	By Gross Profit b/d	1,60,000
To Discount allowed	25,000	By Discount received	35,000
To Net profit (transferred to capital account)	50,000
	1,95,000		1,95,000

Balance sheet as on 31st March 2019
Liabilities	Rs.	Rs.	Assets	Rs.
Sundry creditors		4,20,000	Debtors	6,40,000
Capital	5,20,000		Cash at bank	10,000
Add: Net profit	50,000		Machinery	80,000
	5,70,000		Closing stock	1,60,000
Less: Drawings	1,00,000	4,70,000
		8,90,000		8,90,000

21.

Dr. In the books of Bharathi
Total debtors account Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	38,000	By Cash A/c (received)	1,20,000
To Sales A/c (credit)	1,40,000	By Balance c/d (balancing figure)	58,000
	1,78,000		1,78,000
To Balance b/d	58,000

**Dr. Trading and Profit and Loss Account for the year ended 31st March, 2019 Cr.**
Particulars		Rs.	Particulars		Rs.
To Opening stock		40,000	By Sales
To Purchases			Cash	1,60,000
Cash	56,000		Credit	1,40,000	3,00,000
Credit	74,000	1,30,000	By Closing stock		60,000
To Wages		10,000
To Gross profit c/d		1,80,000
		3,60,000			3,60,000
To General expenses		24,000	By Gross profit b/d		1,80,000
To Depreciation on machinery		17,000
To Net profit transferred to capital a/c		1,39,000
		1,80,000			1,80,000

**Balance Sheet as on 31st March, 2019**
Liabilities	Rs.	Rs.	Assets	Rs.	Rs.
Capital	2,22,000		Cash		1,42,000
Add: Net profit	1,39,000	3,61,000	Stock of goods		60,000
Creditors		52,000	Debtors		58,000
			Machinery	1,70,000
			Less: Depreciation	17,000	1,53,000
		4,13,000			4,13,000

Generic 2

1 x 2 = 2

22.

Quick ratio = \(\frac { Quick\quad assets }{ Current\quad liabilities } \)
Quick assets = Current assets - Inventories - Prepaid expenses
= Rs.4,50,00 + Rs.70,000 - Rs.20,000
= Rs.3,60,000
Quick ratio = \(\frac { 3,60,000 }{ 2,40,000 } \) = 1:5:1

Generic 3

3 x 3 = 9

23.

(i) Issued at par

In the books of Sara Company Journal entries
Particulars		Debit Rs.	Credit Rs.
Bank A/c (10,000 x10)	Dr.	1,00,000
To Equity share application A/c			1,00,000
(Application money received)
Equity share application A/c	Dr.	1,00,000
To Equity share capital A/c			1,00,000
(Application money transferred to share capital)

(ii) Issued at a premium

Particulars		Debit Rs.	Credit Rs.
Bank A/c (10,000 × 12)	Dr.	1,20,000
To Equity share application A/c			1,20,000
(Application money received)
Equity share application A/c	Dr.	1,20,000
To Equity share capital A/c (10,000 × 10)			1,00,000
To Securities premium A/c (10,000 × 2)			20,000
(Application money transferred to share capital)

24.

Capital gearing ratio = \(\frac { Funds\ bearing\ fixed\ interest\ and\ fixed\ dividend }{ Equity\ Shareholder's\ funds } \)
Funds bearing fixed = 5% Preference capital + 6% Debentures
interest or fixed dividend = Rs.1,00,000 + Rs.3,00,000
= Rs.4,00,000
Equity shareholder's funds = Equity share capital + General reserve + Surplus
= Rs.4,00,000 + Rs.2,50,000 + Rs.1,50,000
= Rs.8,00,000
Capital gearing ratio = \(\frac { 4,00,000 }{ 8,00,000 } \) = 0.5 : 1

25.

Trend analysis for Kurinji Ltd
Particulars	Rs.in thousands			Trend percentages
	2015-16	2016-17	2017-18	2015-16	2016-17	2017-18
Revenue from operations	120	132	156	100	110	130
Add: Other income	50	38	65	100	76	130
Total revenue	170	170	221	100	100	130
Less: Expenses	100	135	123	100	135	123
Profit	70	35	98	100	50	140

Computation of trend percentage for revenue from operations:
For 2016-17: \(\cfrac { 132 }{ 120 } \times 100=110\)%
For 2017-18: \(\cfrac { 156 }{ 120 } \times 100=130\)%