Class 12 Accountancy Practice Paper Set 4 with Solutions

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Class 12 Accountancy · Practice Paper SET-4 with Solutions

CBSE PRACTICE PAPER 2026–27 · ACCOUNTANCY (SET – 4)

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CLASS : XIISUBJECT : ACCOUNTANCY (055)ROLL NO. : ..................

Time : 3 Hrs.Session : 2026–27 · Full Syllabus · High LevelM.M. : 80

General Instructions

1. This question paper contains 29 questions. All questions are compulsory. (Theory : 80 marks; Project : 20 marks is assessed separately.)
2. Section A : Q. 1 to 14 are MCQs and Q. 15–16 are Assertion–Reason questions, 1 mark each (16 marks).
3. Section B : Q. 17 to 20 are short answer questions of 3 marks each (12 marks).
4. Section C : Q. 21 to 23 are short answer questions of 4 marks each (12 marks).
5. Section D : Q. 24 to 27 are long answer questions of 6 marks each (24 marks).
6. Section E : Q. 28 and Q. 29 are long answer questions of 8 marks each (16 marks).
7. The paper is of higher difficulty level (application / analysis based) and covers Part A (Partnership Firms and Companies) and Part B (Analysis of Financial Statements, Ratios and Cash Flow Statement).
8. Internal choice (OR) is provided in some questions. Show all working notes clearly. Narrations in journal entries are not required.
9. Detailed Answer Key & Solutions with marking scheme are given at the end of this paper.

SECTION A (16 × 1 = 16 Marks)

Q. 1 to Q. 14 : Multiple Choice Questions (choose the correct option)

1. A partner’s closing capital is ₹ 5,00,000. During the year he withdrew ₹ 60,000, introduced additional capital of ₹ 40,000 and his share of profit was ₹ 90,000. His opening capital was

(a) ₹ 3,70,000(b) ₹ 4,30,000(c) ₹ 4,70,000(d) ₹ 5,10,000

2. A, B and C share profits 5 : 3 : 2. D is admitted and the new ratio becomes 4 : 3 : 1 : 2. The sacrificing ratio of A, B and C is

(a) 1 : 0 : 1(b) 1 : 1 : 1(c) 5 : 3 : 2(d) 4 : 3 : 1

3. An unrecorded liability discovered at the time of admission of a partner is

(a) credited to Revaluation Account(b) debited to old partners’ Capital Accounts directly(c) credited to Goodwill Account(d) debited to Revaluation Account

4. Capital employed ₹ 10,00,000; average profit ₹ 1,40,000; normal rate of return 10%. Goodwill by capitalisation of super profit is

(a) ₹ 14,00,000(b) ₹ 1,00,000(c) ₹ 4,00,000(d) ₹ 40,000

5. A, B and C share profits 4 : 3 : 2. C retires and A and B decide to share profits 3 : 2. Their gaining ratio is

(a) 3 : 2(b) 7 : 3(c) 1 : 1(d) 4 : 3

6. Realisation expenses paid by a partner on behalf of the firm on dissolution are

(a) credited to Realisation Account and debited to that partner’s Capital Account(b) debited to all partners’ Capital Accounts(c) debited to Realisation Account and credited to that partner’s Capital Account(d) debited to Profit and Loss Account

7. As per SEBI guidelines, the minimum subscription for a public issue of shares is

(a) 90% of the issue size(b) 75% of the issue size(c) 51% of the issue size(d) 100% of the issue size

8. Shares of ₹ 100 (₹ 70 called up) on which ₹ 50 per share has been paid are forfeited. The minimum price at which they can be reissued as fully paid is

(a) ₹ 100(b) ₹ 70(c) ₹ 50(d) ₹ 20

9. Debentures are issued to a bank as collateral security for a loan. Interest is payable

(a) on the debentures only(b) on the loan only(c) on both the loan and debentures(d) on neither

10. Revenue from operations ₹ 16,00,000; cost of revenue from operations ₹ 10,00,000; other operating expenses ₹ 2,00,000. Operating profit ratio is

(a) 37.5%(b) 12.5%(c) 75%(d) 25%

11. Which of the following is NOT a cash flow?

(a) Issue of bonus shares(b) Purchase of machinery for cash(c) Receipt of dividend(d) Payment of tax

12. Profit before interest and tax ₹ 4,50,000; capital employed ₹ 15,00,000. Return on capital employed is

(a) 3.33%(b) 45%(c) 30%(d) 15%

13. Current assets ₹ 4,00,000, current liabilities ₹ 2,00,000. Goods worth ₹ 50,000 are purchased on credit. The current ratio becomes

(a) 2 : 1(b) 1.8 : 1(c) 2.25 : 1(d) 1.5 : 1

14. Revenue from operations ₹ 12,00,000; gross profit 25%; opening inventory ₹ 90,000; closing inventory ₹ 1,10,000. Inventory turnover ratio is

(a) 12 times(b) 10 times(c) 8 times(d) 9 times

Q. 15 and Q. 16 : Assertion–Reason Questions

Options: (a) Both A and R are true and R is the correct explanation of A. (b) Both A and R are true but R is not the correct explanation of A. (c) A is true but R is false. (d) A is false but R is true.

15. Assertion (A): Capital Reserve created on reissue of forfeited shares is a capital profit.
Reason (R): Capital Reserve on reissue of forfeited shares can be freely distributed as dividend to shareholders.

16. Assertion (A): In the Indirect Method, the Cash Flow Statement starts with Net Profit before tax.
Reason (R): Non-cash and non-operating items are adjusted to arrive at the operating profit.

SECTION B (4 × 3 = 12 Marks) — Short Answer Questions

17. A, B and C were sharing profits 2 : 2 : 1, but the deed provided equal sharing from 1^st April 2025. The profit of ₹ 3,00,000 for 2025–26 was distributed in 2 : 2 : 1. Calculate the amount of adjustment for each partner and pass the necessary adjusting journal entry.(3)

18. The total assets of a firm (including Goodwill ₹ 1,00,000 and a Profit and Loss A/c debit balance ₹ 50,000) are ₹ 15,00,000 and outside liabilities are ₹ 3,00,000. The average profit before partners’ remuneration is ₹ 2,10,000 and the remuneration to partners is ₹ 30,000. Normal rate of return is 12%. Calculate goodwill at 3 years’ purchase of super profit.(3)

19. Sun Ltd. issued shares of ₹ 100 each at a premium of 20%, payable ₹ 30 on application, ₹ 50 on allotment (including premium), ₹ 30 on first call and ₹ 10 on final call (not yet made). Anil, holding 300 shares, failed to pay the first call and his shares were forfeited. Of these, 200 shares were reissued at ₹ 85 per share as fully paid up. Pass journal entries for forfeiture, reissue and transfer to Capital Reserve.(3)

20. Pass the journal entries : (i) 4,000, 9% debentures of ₹ 100 each issued at par, redeemable at a premium of 10%; (ii) 5,000, 9% debentures of ₹ 100 each issued at a premium of 8% to a vendor in purchase of machinery worth ₹ 5,40,000.(3)

SECTION C (3 × 4 = 12 Marks) — Short Answer Questions

21. Prepare a Common-size Statement of Profit and Loss of Rudra Ltd. for the years ended 31^st March 2025 and 2026. Tax rate is 25%.

Particulars	2024–25 (₹)	2025–26 (₹)
Revenue from operations	15,00,000	18,00,000
Other income	1,00,000	90,000
Cost of materials consumed	8,00,000	9,00,000
Employee benefit expenses	2,00,000	2,70,000
Finance costs	50,000	40,000
Other expenses	1,50,000	1,80,000

(4)

OR

Prepare a Comparative Statement of Profit and Loss of the above company for the two years.

22. From the following, calculate Cash Flow from Operating Activities : Surplus in P&L was ₹ 1,00,000 (opening) and ₹ 2,20,000 (closing); dividend paid ₹ 30,000; provision for tax made ₹ 80,000; tax paid ₹ 70,000; depreciation ₹ 50,000; interest on debentures ₹ 20,000; profit on sale of machinery ₹ 10,000. Trade receivables decreased by ₹ 15,000, inventories increased by ₹ 25,000 and trade payables decreased by ₹ 10,000.(4)

OR

Explain any four objectives (uses) of preparing a Cash Flow Statement.

23. The current ratio of a company is 2 : 1, its quick ratio is 1.2 : 1 and its inventory is ₹ 4,00,000. Revenue from operations (all on credit) is ₹ 30,00,000 and trade receivables turnover ratio is 10 times. There is no prepaid expense. Calculate : (i) Current liabilities, (ii) Current assets, (iii) Quick (liquid) assets, (iv) Working capital, (v) Trade receivables, (vi) Cash and other current assets.(4)

SECTION D (4 × 6 = 24 Marks) — Long Answer Questions

24. A, B and C share profits 3 : 2 : 1. Their Balance Sheet on 31^st March 2026 is given below. From 1^st April 2026 they decide to share profits equally. It was agreed that : (i) Machinery is appreciated by ₹ 56,000 and Investments are depreciated by ₹ 20,000; (ii) Goodwill of the firm is valued at ₹ 1,80,000; (iii) General Reserve and Profit and Loss A/c are to be distributed; (iv) Capitals are to be adjusted in the new ratio on the basis of the total capital of the firm, by cash.
Prepare Revaluation Account and Partners’ Capital Accounts.

Liabilities	₹	Assets	₹
Creditors	1,20,000	Land and Building	3,50,000
General Reserve	90,000	Machinery	2,44,000
Profit and Loss A/c	30,000	Investments	1,00,000
A’s Capital	4,00,000	Stock	1,60,000
B’s Capital	3,00,000	Debtors	1,90,000
C’s Capital	2,00,000	Cash	96,000
Total	11,40,000	Total	11,40,000

(6)

25. A, B and C share profits 4 : 3 : 2. Their capitals are ₹ 6,00,000, ₹ 4,00,000 and ₹ 3,00,000 and General Reserve is ₹ 1,35,000. C retires on 31^st March 2026 on the following terms : Goodwill of the firm is valued at ₹ 2,70,000 (not in the books); Investments (book value ₹ 80,000) are worth ₹ 1,25,000; an unrecorded liability of ₹ 18,000 is to be provided. A and B will share future profits 3 : 2. C is paid ₹ 96,000 in cash and the balance in three equal annual instalments (with interest @ 10% p.a. on the outstanding balance). Prepare Partners’ Capital Accounts and C’s Loan Account.(6)

26. Kiran Ltd. issued 10,000, 12% debentures of ₹ 100 each at a premium of 5%, redeemable at a premium of 10%, payable : ₹ 30 on application and the balance (including premium) on allotment. Applications were received for 14,000 debentures; applications for 2,000 debentures were rejected and the money was refunded; the remaining applicants were allotted 10,000 debentures pro rata. The excess application money was adjusted towards allotment. Loss on issue of debentures was written off to the extent possible out of Securities Premium. At the end of the term, the debentures were redeemed. Pass journal entries (including cash entries).(6)

27. From the following calculate : (i) Debt-Equity Ratio, (ii) Quick Ratio, (iii) Inventory Turnover Ratio, (iv) Net Profit Ratio, (v) Interest Coverage Ratio, (vi) Return on Capital Employed.
Revenue from operations ₹ 40,00,000; Gross profit 25% of revenue; Other operating expenses ₹ 4,00,000; Interest on 10% long-term debt ₹ 1,00,000; Tax rate 40%. Average inventory ₹ 5,00,000. Shareholders’ funds ₹ 20,00,000; Long-term debt ₹ 10,00,000; Current liabilities ₹ 6,00,000. Current assets ₹ 14,00,000 (Inventory ₹ 5,00,000, Trade receivables ₹ 4,00,000, Cash ₹ 4,00,000, Prepaid expenses ₹ 1,00,000).(6)

SECTION E (2 × 8 = 16 Marks) — Long Answer Questions

28. From the Balance Sheet of Vertex Ltd. and the additional information, prepare a Cash Flow Statement for the year ended 31^st March 2026 (Indirect Method).

Particulars	31-03-2026 (₹)	31-03-2025 (₹)
I. EQUITY AND LIABILITIES
Equity share capital	12,00,000	10,00,000
Securities premium	30,000	0
Surplus in Statement of P&L	3,60,000	2,40,000
10% Debentures	4,00,000	3,00,000
Trade payables	1,70,000	1,90,000
Provision for tax	55,000	70,000
Total	22,15,000	18,00,000
II. ASSETS
Fixed assets (net)	13,50,000	11,00,000
Patents	70,000	90,000
Non-current investments	2,00,000	1,50,000
Inventories	3,10,000	2,50,000
Trade receivables	2,10,000	1,60,000
Cash and cash equivalents	75,000	50,000
Total	22,15,000	18,00,000

Additional information : (i) Net profit before tax was ₹ 2,30,000 after charging depreciation ₹ 90,000, patents written off ₹ 20,000 and interest on debentures ₹ 35,000, and after crediting profit on sale of a machine ₹ 10,000 and dividend received ₹ 8,000; (ii) The machine sold had a book value of ₹ 40,000; (iii) Provision for tax made during the year ₹ 60,000; (iv) Dividend paid ₹ 50,000; (v) 20,000 equity shares of ₹ 10 each were issued at a premium of 15% and debentures of ₹ 1,00,000 were issued at par; (vi) Interest on debentures was paid in full; (vii) Investments purchased ₹ 50,000.

(8)

29. X, Y and Z share profits 5 : 3 : 2. They decided to dissolve the firm on 31^st March 2026. The Balance Sheet is given below and the following was agreed : (i) Land and Building realised ₹ 4,60,000 and Plant ₹ 3,00,000; (ii) Stock realised ₹ 2,10,000; (iii) Debtors of ₹ 20,000 proved bad and the rest were collected; (iv) Z took over the Investments at ₹ 90,000; (v) An unrecorded patent was sold for ₹ 25,000; (vi) Creditors were paid ₹ 1,90,000 in full settlement and Outstanding Expenses were paid in full; (vii) Realisation expenses of ₹ 14,000 were paid by Z on behalf of the firm.
Prepare Realisation Account, Partners’ Capital Accounts and Bank Account.

Liabilities	₹	Assets	₹
Creditors	2,00,000	Land and Building	4,00,000
Outstanding Expenses	20,000	Plant	3,60,000
Y’s Loan	1,00,000	Stock	2,40,000
Contingency Reserve	1,00,000	Debtors	1,80,000
X’s Capital	4,00,000	Investments	80,000
Y’s Capital	3,00,000	Cash at Bank	60,000
Z’s Capital	2,00,000
Total	13,20,000	Total	13,20,000

(8)

ANSWER KEY & SOLUTIONS · ACCOUNTANCY PRACTICE PAPER (SET – 4)

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CLASS : XIISUBJECT : ACCOUNTANCY (055)ROLL NO. : ..................

Time : 3 Hrs.Class XII · Session : 2026–27M.M. : 80

SECTION A — Answer Key (1 mark each)

Q.1	(b)	Q.2	(a)	Q.3	(d)	Q.4	(c)
Q.5	(b)	Q.6	(c)	Q.7	(a)	Q.8	(c)
Q.9	(b)	Q.10	(d)	Q.11	(a)	Q.12	(c)
Q.13	(b)	Q.14	(d)	Q.15	(c)	Q.16	(a)

Hints for Q.1–16. (1) Opening = Closing + Drawings − Profit − Additional capital = 5,00,000 + 60,000 − 90,000 − 40,000 = ₹ 4,30,000. (2) A : 5/10 − 4/10 = 1/10; B : 3/10 − 3/10 = 0; C : 2/10 − 1/10 = 1/10 ⇒ 1 : 0 : 1. (3) Unrecorded liability is a loss ⇒ debit Revaluation A/c. (4) Super profit = 1,40,000 − 1,00,000 = 40,000; ÷ 10% = ₹ 4,00,000. (5) A : 3/5 − 4/9 = 7/45; B : 2/5 − 3/9 = 3/45 ⇒ 7 : 3. (6) Payment on behalf of the firm : Dr Realisation, Cr Partner’s Capital. (7) SEBI : 90%. (8) Forfeited amount = ₹ 50, so minimum reissue price = 50 (maximum discount 50). (9) Collateral security : interest only on the loan. (10) Operating profit = 16 − 10 − 2 = 4 lakh ⇒ 4 ÷ 16 = 25%. (11) Bonus shares involve no cash. (12) 4,50,000 ÷ 15,00,000 = 30%. (13) CA = 4,50,000; CL = 2,50,000 ⇒ 1.8 : 1. (14) Cost = 9,00,000; average inventory = 1,00,000 ⇒ 9 times. (15) (c) : A is true, R is false (capital profits are not freely distributable as dividend). (16) (a) : both true and R explains A.

SECTION B — Solutions (3 marks each)

17. Distributed (2 : 2 : 1) : A 1,20,000; B 1,20,000; C 60,000. Should have been (1 : 1 : 1) : 1,00,000 each (1). Adjustment : A = 1,00,000 − 1,20,000 = (20,000) ; B = (20,000); C = +40,000 (1).

Particulars	Dr. (₹)	Cr. (₹)
A’s Capital/Current A/c   Dr	20,000
B’s Capital/Current A/c   Dr	20,000
To C’s Capital/Current A/c		40,000

(1)

18. Capital employed = Assets − Goodwill − Fictitious asset (P&L debit) − Outside liabilities = 15,00,000 − 1,00,000 − 50,000 − 3,00,000 = ₹ 10,50,000 (1). Profit after partners’ remuneration = 2,10,000 − 30,000 = 1,80,000; Normal profit = 12% × 10,50,000 = 1,26,000; Super profit = 54,000 (1). Goodwill = 54,000 × 3 = ₹ 1,62,000 (1).

19. Capital called per share = 30 + (50 − 20) + 30 = ₹ 90; amount paid = 30 + 50 = 80 (including premium 20) ⇒ capital paid = ₹ 60; call unpaid = ₹ 30.

Particulars	Dr. (₹)	Cr. (₹)
Share Capital A/c   Dr (300 × 90)	27,000
To Calls-in-Arrears A/c (300 × 30)		9,000
To Share Forfeiture A/c (300 × 60)		18,000
Bank A/c   Dr (200 × 85)	17,000
Share Forfeiture A/c   Dr (200 × 15)	3,000
To Share Capital A/c (200 × 100)		20,000
Share Forfeiture A/c   Dr (200 × 60 − 3,000)	9,000
To Capital Reserve A/c		9,000

(1 + 1 + 1)

20. (i) Loss on issue = premium on redemption = 4,000 × 10 = ₹ 40,000.

Particulars	Dr. (₹)	Cr. (₹)
Bank A/c   Dr	4,00,000
Loss on Issue of Debentures A/c   Dr	40,000
To 9% Debentures A/c		4,00,000
To Premium on Redemption of Debentures A/c		40,000
(ii) Machinery A/c   Dr	5,40,000
To Vendor A/c		5,40,000
Vendor A/c   Dr	5,40,000
To 9% Debentures A/c (5,000 × 100)		5,00,000
To Securities Premium A/c (5,000 × 8)		40,000

(1½ + 1½)

SECTION C — Solutions (4 marks each)

21. Common-size Statement of P&L (% of Revenue from operations) :

Particulars	2024–25 (₹)	2025–26 (₹)	2024–25 (%)	2025–26 (%)
Revenue from operations	15,00,000	18,00,000	100.00%	100.00%
Other income	1,00,000	90,000	6.67%	5.00%
Total Revenue	16,00,000	18,90,000	106.67%	105.00%
Cost of materials consumed	8,00,000	9,00,000	53.33%	50.00%
Employee benefit expenses	2,00,000	2,70,000	13.33%	15.00%
Finance costs	50,000	40,000	3.33%	2.22%
Other expenses	1,50,000	1,80,000	10.00%	10.00%
Total Expenses	12,00,000	13,90,000	80.00%	77.22%
Profit before tax	4,00,000	5,00,000	26.67%	27.78%
Tax (25%)	1,00,000	1,25,000	6.67%	6.94%
Profit after tax	3,00,000	3,75,000	20.00%	20.83%

(4)
OR Comparative Statement :

Particulars	2024–25 (₹)	2025–26 (₹)	Absolute change (₹)	% change
Revenue from operations	15,00,000	18,00,000	3,00,000	20.00%
Other income	1,00,000	90,000	(10,000)	-10.00%
Total Revenue	16,00,000	18,90,000	2,90,000	18.12%
Cost of materials consumed	8,00,000	9,00,000	1,00,000	12.50%
Employee benefit expenses	2,00,000	2,70,000	70,000	35.00%
Finance costs	50,000	40,000	(10,000)	-20.00%
Other expenses	1,50,000	1,80,000	30,000	20.00%
Total Expenses	12,00,000	13,90,000	1,90,000	15.83%
Profit before tax	4,00,000	5,00,000	1,00,000	25.00%
Tax (25%)	1,00,000	1,25,000	25,000	25.00%
Profit after tax	3,00,000	3,75,000	75,000	25.00%

(4)

22. NPBT = Increase in surplus 1,20,000 + Dividend 30,000 + Provision for tax 80,000 = ₹ 2,30,000 (1).

Cash Flow from Operating Activities	₹
Net profit before tax	2,30,000
Add : Depreciation	50,000
Add : Interest on debentures	20,000
Less : Profit on sale of machinery	(10,000)
Operating profit before working capital changes	2,90,000
Decrease in trade receivables	15,000
Increase in inventories	(25,000)
Decrease in trade payables	(10,000)
Cash generated from operations	2,70,000
Less : Tax paid	(70,000)
Net cash from operating activities	2,00,000

(3)
OR Objectives (any four) : (i) shows the cash inflows and outflows of the year; (ii) explains the reasons for change in cash balance; (iii) helps in assessing the liquidity and ability to pay dividends and obligations; (iv) helps in short-term cash planning and budgeting; (v) shows the reasons for difference between profit and cash; (vi) useful for comparison between periods/firms (1 each).

23. Let CL = x ⇒ CA = 2x; Quick assets = 1.2x ⇒ Inventory = 2x − 1.2x = 0.8x = 4,00,000 ⇒ x = 5,00,000. (i) CL = ₹ 5,00,000 (½); (ii) CA = ₹ 10,00,000 (½); (iii) Quick assets = ₹ 6,00,000 (½); (iv) Working capital = 10,00,000 − 5,00,000 = ₹ 5,00,000 (½); (v) Trade receivables = 30,00,000 ÷ 10 = ₹ 3,00,000 (1); (vi) Cash and other current assets = 6,00,000 − 3,00,000 = ₹ 3,00,000 (1).

SECTION D — Solutions (6 marks each)

24. Revaluation profit = 56,000 − 20,000 = ₹ 36,000 (1). Sacrifice/Gain : A = 3/6 − 2/6 = 1/6 (sacrifice); B = 2/6 − 2/6 = 0; C = 1/6 − 2/6 = −1/6 (gain). Goodwill adjustment = 1/6 × 1,80,000 = ₹ 30,000, C pays A (1).
Revaluation Account

Particulars	₹	Particulars	₹
Investments A/c	20,000	Machinery A/c	56,000
Profit transferred : A’s Capital (3/6)	18,000
B’s Capital (2/6)	12,000
C’s Capital (1/6)	6,000
Total	56,000	Total	56,000

Partners’ Capital Accounts (3)

Particulars	A (₹)	B (₹)	C (₹)	Particulars	A (₹)	B (₹)	C (₹)
C’s Capital (goodwill)			30,000	Balance b/d	4,00,000	3,00,000	2,00,000
Bank A/c (excess capital withdrawn)	1,56,000			General Reserve (3 : 2 : 1)	45,000	30,000	15,000
Balance c/d	3,52,000	3,52,000	3,52,000	Profit and Loss A/c	15,000	10,000	5,000
				Revaluation Profit	18,000	12,000	6,000
				A’s Capital (goodwill)	30,000
				Bank A/c (shortfall brought)			1,56,000
Total	5,08,000	3,52,000	3,82,000	Total	5,08,000	3,52,000	3,82,000

Working : Capitals before adjustment : A = 5,08,000; B = 3,52,000; C = 1,96,000; total = 10,56,000. New capital of each (1 : 1 : 1) = 10,56,000 ÷ 3 = ₹ 3,52,000. A has a surplus of ₹ 1,56,000 (withdraws); C has a shortfall of ₹ 1,56,000 (brings in cash); B no change (1).

25. Gaining ratio : A = 3/5 − 4/9 = 7/45; B = 2/5 − 3/9 = 3/45 ⇒ 7 : 3 (1). Goodwill of C = 2/9 × 2,70,000 = 60,000 (A 42,000; B 18,000). Revaluation profit = 45,000 − 18,000 = 27,000 (4 : 3 : 2 ⇒ 12,000; 9,000; 6,000) (1). Amount due to C = 3,00,000 + 30,000 + 6,000 + 60,000 = ₹ 3,96,000; paid 96,000; balance ₹ 3,00,000 to Loan A/c (1).
Partners’ Capital Accounts (2)

Particulars	A (₹)	B (₹)	C (₹)	Particulars	A (₹)	B (₹)	C (₹)
Goodwill (gain by A 42,000, B 18,000)	42,000	18,000		Balance b/d	6,00,000	4,00,000	3,00,000
Bank A/c			96,000	General Reserve (4 : 3 : 2)	60,000	45,000	30,000
C’s Loan A/c			3,00,000	Revaluation Profit	12,000	9,000	6,000
Balance c/d	6,30,000	4,36,000		A’s & B’s Capital (goodwill)			60,000
Total	6,72,000	4,54,000	3,96,000	Total	6,72,000	4,54,000	3,96,000

C’s Loan Account (1)

Particulars	₹	Particulars	₹
Bank (Instalment 1 : 1,00,000 + interest 30,000)	1,30,000	C’s Capital A/c (balance transferred)	3,00,000
Bank (Instalment 2 : 1,00,000 + interest 20,000)	1,20,000	Interest — Year 1 (10% × 3,00,000)	30,000
Bank (Instalment 3 : 1,00,000 + interest 10,000)	1,10,000	Interest — Year 2 (10% × 2,00,000)	20,000
		Interest — Year 3 (10% × 1,00,000)	10,000
Total	3,60,000	Total	3,60,000

26. Working : Issue price ₹ 105; allotment = 105 − 30 = ₹ 75 (including premium ₹ 5). Pro rata 5 : 6 (10,000 of 12,000). Application money received = 14,000 × 30 = 4,20,000; required = 10,000 × 30 = 3,00,000; refund = 2,000 × 30 = 60,000; excess adjusted to allotment = 60,000. Allotment due = 7,50,000, received = 6,90,000. Loss on issue = redemption premium = 1,00,000, of which 50,000 is written off against Securities Premium (1).

Particulars	Dr. (₹)	Cr. (₹)
Bank A/c   Dr	4,20,000
To Debenture Application A/c		4,20,000
Debenture Application A/c   Dr	4,20,000
To 12% Debentures A/c (10,000 × 30)		3,00,000
To Bank A/c (refund 2,000 × 30)		60,000
To Debenture Allotment A/c		60,000
Debenture Allotment A/c   Dr (10,000 × 75)	7,50,000
To 12% Debentures A/c (10,000 × 70)		7,00,000
To Securities Premium A/c (10,000 × 5)		50,000
Bank A/c   Dr	6,90,000
To Debenture Allotment A/c		6,90,000
Loss on Issue of Debentures A/c   Dr	1,00,000
To Premium on Redemption of Debentures A/c (10,000 × 10)		1,00,000
Securities Premium A/c   Dr	50,000
To Loss on Issue of Debentures A/c		50,000
12% Debentures A/c   Dr	10,00,000
Premium on Redemption of Debentures A/c   Dr	1,00,000
To Debentureholders A/c		11,00,000
Debentureholders A/c   Dr	11,00,000
To Bank A/c		11,00,000

(Application 1½, Allotment 2, Loss/premium 1, Redemption 1½)

27. Working : Gross profit = 10,00,000; Cost of revenue = 30,00,000; PBIT = 10,00,000 − 4,00,000 = 6,00,000; PBT = 5,00,000; Tax = 2,00,000; PAT = ₹ 3,00,000; Quick assets = 14,00,000 − 5,00,000 − 1,00,000 = 8,00,000; Capital employed = 20,00,000 + 10,00,000 = 30,00,000 (1).

Ratio	Working	Answer
(i) Debt-Equity	10,00,000 ÷ 20,00,000	0.5 : 1
(ii) Quick Ratio	8,00,000 ÷ 6,00,000	1.33 : 1
(iii) Inventory Turnover	30,00,000 ÷ 5,00,000	6 times
(iv) Net Profit Ratio	3,00,000 ÷ 40,00,000 × 100	7.5%
(v) Interest Coverage	6,00,000 ÷ 1,00,000	6 times
(vi) ROCE	6,00,000 ÷ 30,00,000 × 100	20%

(5, ⅚ each)

SECTION E — Solutions (8 marks each)

28. Working notes : (i) Fixed assets purchased : 13,50,000 = 11,00,000 + P − 90,000 − 40,000 ⇒ P = ₹ 3,80,000 (1). (ii) Tax paid = Opening provision 70,000 + Provision made 60,000 − Closing provision 55,000 = ₹ 75,000 (1). (iii) Shares : 20,000 × 10 = 2,00,000 at 15% premium ⇒ premium 30,000 (matches Securities Premium) (½). (iv) Check : surplus 2,40,000 + (2,30,000 − 60,000) − 50,000 = ₹ 3,60,000 ✓.

Cash Flow Statement of Vertex Ltd. for the year ended 31-03-2026	₹	₹
A. Cash flow from operating activities
Net profit before tax	2,30,000
Add : Depreciation	90,000
Add : Patents written off	20,000
Add : Interest on debentures	35,000
Less : Profit on sale of machine	(10,000)
Less : Dividend received	(8,000)
Operating profit before working capital changes		3,57,000
Increase in inventories	(60,000)
Increase in trade receivables	(50,000)
Decrease in trade payables	(20,000)
Cash generated from operations		2,27,000
Less : Tax paid	(75,000)
Net cash from operating activities		1,52,000
B. Cash flow from investing activities
Purchase of fixed assets	(3,80,000)
Sale of machine (40,000 + 10,000)	50,000
Purchase of investments	(50,000)
Dividend received	8,000
Net cash used in investing activities		(3,72,000)
C. Cash flow from financing activities
Issue of equity shares (2,00,000 + premium 30,000)	2,30,000
Issue of debentures	1,00,000
Interest paid	(35,000)
Dividend paid	(50,000)
Net cash from financing activities		2,45,000
Net increase in cash and cash equivalents (A + B + C)		25,000
Add : Opening cash and cash equivalents		50,000
Closing cash and cash equivalents		75,000

(Operating 3, Investing 1½, Financing 1½, Net change/closing cash ½)

29. Realisation Account (3)

Particulars	₹	Particulars	₹
Land and Building A/c	4,00,000	Creditors A/c	2,00,000
Plant A/c	3,60,000	Outstanding Expenses A/c	20,000
Stock A/c	2,40,000	Bank A/c (Land and Building)	4,60,000
Debtors A/c	1,80,000	Bank A/c (Plant)	3,00,000
Investments A/c	80,000	Bank A/c (Stock)	2,10,000
Bank A/c (Creditors paid)	1,90,000	Bank A/c (Debtors)	1,60,000
Bank A/c (Outstanding Expenses paid)	20,000	Bank A/c (Patent)	25,000
Z’s Capital A/c (Expenses paid by Z)	14,000	Z’s Capital A/c (Investments taken)	90,000
		Loss : X’s Capital (5/10)	9,500
		Y’s Capital (3/10)	5,700
		Z’s Capital (2/10)	3,800
Total	14,84,000	Total	14,84,000

Partners’ Capital Accounts (3)

Particulars	X (₹)	Y (₹)	Z (₹)	Particulars	X (₹)	Y (₹)	Z (₹)
Realisation (Loss)	9,500	5,700	3,800	Balance b/d	4,00,000	3,00,000	2,00,000
Realisation (Investments)			90,000	Contingency Reserve (5 : 3 : 2)	50,000	30,000	20,000
Bank A/c	4,40,500	3,24,300	1,40,200	Realisation (Expenses paid)			14,000
Total	4,50,000	3,30,000	2,34,000	Total	4,50,000	3,30,000	2,34,000

Bank Account (2) (Y’s loan is paid before the capital)

Particulars	₹	Particulars	₹
Balance b/d	60,000	Realisation (Creditors)	1,90,000
Realisation (Land and Building)	4,60,000	Realisation (Outstanding Expenses)	20,000
Realisation (Plant)	3,00,000	Y’s Loan A/c	1,00,000
Realisation (Stock)	2,10,000	X’s Capital A/c	4,40,500
Realisation (Debtors)	1,60,000	Y’s Capital A/c	3,24,300
Realisation (Patent)	25,000	Z’s Capital A/c	1,40,200
Total	12,15,000	Total	12,15,000

Loss on realisation = 14,84,000 − 14,65,000 = ₹ 19,000, shared 5 : 3 : 2.

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