Class 12 Accountancy Practice Paper Set 5 with Solutions

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Class 12 Accountancy · Practice Paper SET-5 with Solutions

CBSE PRACTICE PAPER 2026–27 · ACCOUNTANCY (SET – 5)

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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 withdrew ₹ 60,000 during the year in equal amounts at the end of every month. Interest on drawings is charged @ 12% p.a. The interest on drawings is

(a) ₹ 3,600(b) ₹ 4,200(c) ₹ 3,300(d) ₹ 7,200

2. The profit of a firm is ₹ 1,20,000, shared by A, B and C in 3 : 2 : 1. C is guaranteed a minimum profit of ₹ 30,000, the deficiency to be borne by A and B in 3 : 2. A’s final share is

(a) ₹ 60,000(b) ₹ 54,000(c) ₹ 50,000(d) ₹ 48,000

3. Profits of the last three years were ₹ 1,50,000, ₹ 1,80,000 and ₹ 2,10,000. Goodwill at 2 years’ purchase of the average profit is

(a) ₹ 3,60,000(b) ₹ 5,40,000(c) ₹ 1,80,000(d) ₹ 1,20,000

4. A new partner brings ₹ 60,000 as premium for goodwill for 1/4 share in the firm. The goodwill of the firm is valued at

(a) ₹ 60,000(b) ₹ 1,80,000(c) ₹ 15,000(d) ₹ 2,40,000

5. On the admission of a partner, the General Reserve appearing in the Balance Sheet is credited to

(a) all partners’ Capital Accounts in the new ratio(b) old partners’ Capital Accounts in the old ratio(c) old partners’ Capital Accounts in the sacrificing ratio(d) Revaluation Account

6. As per Section 37 of the Indian Partnership Act, 1932, if the amount due to a retired partner is not paid, he is entitled at his option to interest at

(a) 12% p.a. only(b) 9% p.a. only(c) 6% p.a. or the share of profit earned on his amount(d) 8% p.a. or the share of profit

7. On the death of a partner, the policy amount received under a Joint Life Policy in excess of its surrender value is credited to

(a) deceased partner’s Capital Account only(b) surviving partners in the gaining ratio(c) Profit and Loss Account(d) all partners’ Capital Accounts in the old profit-sharing ratio

8. On dissolution, an unrecorded asset taken over by a partner is

(a) debited to that partner’s Capital A/c and credited to Realisation A/c(b) credited to that partner’s Capital A/c and debited to Realisation A/c(c) debited to Bank A/c and credited to Realisation A/c(d) not recorded

9. Shares are allotted to applicants pro rata at 4 shares for every 5 shares applied. An applicant for 800 shares will be allotted

(a) 600 shares(b) 640 shares(c) 720 shares(d) 560 shares

10. The amount received on the issue of 2,000, 9% debentures of ₹ 100 each at a discount of 4% is

(a) ₹ 2,08,000(b) ₹ 2,00,000(c) ₹ 1,92,000(d) ₹ 1,60,000

11. Interest received on loans given by a non-financial company is classified under

(a) Operating activities(b) Financing activities(c) Cash equivalents(d) Investing activities

12. Debt-equity ratio is 0.5 : 1. Total assets ₹ 24,00,000 and current liabilities ₹ 6,00,000. Shareholders’ funds are

(a) ₹ 12,00,000(b) ₹ 6,00,000(c) ₹ 18,00,000(d) ₹ 9,00,000

13. Credit purchases ₹ 18,00,000; opening trade payables ₹ 2,00,000 and closing trade payables ₹ 4,00,000. Trade payables turnover ratio is

(a) 4.5 times(b) 9 times(c) 6 times(d) 3 times

14. Revenue from operations ₹ 20,00,000; gross profit ratio 30%; other operating expenses ₹ 4,00,000. Operating profit ratio is

(a) 30%(b) 10%(c) 20%(d) 15%

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): Interest on partner’s capital is a charge against the profits of the firm.
Reason (R): Interest on capital is allowed only out of profits, as it is an appropriation of profit.

16. Assertion (A): Quick ratio is a more stringent test of liquidity than current ratio.
Reason (R): Quick ratio excludes inventories and prepaid expenses from current assets.

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

17. A and B are partners with fixed capitals of ₹ 8,00,000 and ₹ 6,00,000. Net profit for the year is ₹ 2,40,000. The deed provides : interest on capital @ 5% p.a.; interest on drawings is charged (A ₹ 2,000; B ₹ 1,000); salary to A ₹ 36,000 p.a.; profits shared 3 : 2. Prepare the Profit and Loss Appropriation Account.(3)

18. A, B and C share profits 5 : 3 : 2. C retires and A and B decide to share future profits equally. Goodwill of the firm is valued at ₹ 2,00,000. Calculate the gaining ratio and pass the journal entry for the treatment of goodwill.(3)

19. Pass the journal entries : (i) 5,000 equity shares of ₹ 10 each issued at a premium of ₹ 2 to a vendor in purchase of machinery worth ₹ 60,000; (ii) 2,000 equity shares of ₹ 10 each issued at par to the promoters for their services (treat as preliminary expenses).(3)

20. Pass the journal entries : (i) Issue of 3,000, 8% debentures of ₹ 100 each at a premium of 6%, redeemable at a premium of 12%; (ii) Writing off the loss on issue of debentures out of Securities Premium to the extent possible; (iii) Payment of half-yearly interest on these debentures.(3)

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

21. Prepare a Common-size Balance Sheet of Alpha Ltd. as at 31^st March 2025 and 2026.

Particulars	2024–25 (₹)	2025–26 (₹)
Equity share capital	8,00,000	9,00,000
Reserves and surplus	2,00,000	3,00,000
Long-term borrowings	4,00,000	4,00,000
Current liabilities	2,00,000	4,00,000
Fixed assets	9,00,000	11,00,000
Non-current investments	1,00,000	1,00,000
Inventories	2,50,000	3,50,000
Trade receivables	2,00,000	3,00,000
Cash and cash equivalents	1,50,000	1,50,000

(4)

OR

Prepare a Comparative Balance Sheet of the above company (absolute change and percentage change).

22. Calculate Cash Flow from Investing Activities from the following : (i) Net block of plant : 1^st April 2025 ₹ 9,00,000; 31^st March 2026 ₹ 11,00,000; depreciation charged ₹ 1,20,000; (ii) A machine with book value ₹ 1,00,000 was sold at a profit of ₹ 20,000; (iii) Investments of book value ₹ 80,000 were sold at a loss of ₹ 5,000; (iv) New investments of ₹ 1,50,000 were purchased; (v) Interest received ₹ 12,000 and dividend received ₹ 8,000.(4)

OR

Calculate Operating profit before working capital changes : Surplus in P&L opening ₹ 2,00,000, closing ₹ 3,00,000; transfer to General Reserve ₹ 30,000; dividend paid ₹ 40,000; provision for tax made ₹ 70,000; depreciation ₹ 60,000; interest paid ₹ 25,000; profit on sale of land ₹ 15,000; loss on sale of investments ₹ 5,000.

23. The inventory turnover ratio of a company is 5 times and the average inventory is ₹ 4,20,000. Gross profit ratio is 30%. Other operating expenses are 10% of revenue from operations. Interest paid is ₹ 1,00,000 and the tax rate is 30%. Calculate : (i) Cost of revenue from operations, (ii) Revenue from operations, (iii) Gross profit, (iv) Operating profit and Operating profit ratio, (v) Net profit after tax and Net profit ratio.(4)

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

24. A and B share profits 3 : 2. Their Balance Sheet on 31^st March 2026 is given below. C is admitted for 1/4 share (A and B give up in their old ratio) on the following terms : (i) The existing goodwill is to be written off; goodwill of the firm is valued at ₹ 2,40,000 and C brings his share in cash; (ii) Building is appreciated by 10%, Machinery is depreciated by 8% and a provision of 5% is to be made on debtors; (iii) There is a claim of ₹ 24,000 for workmen’s compensation; the rest of the reserve is to be distributed; (iv) General Reserve is to be distributed; (v) C brings ₹ 3,00,000 as capital.
Prepare Revaluation Account and Partners’ Capital Accounts. Also find the new profit-sharing ratio.

Liabilities	₹	Assets	₹
Creditors	1,50,000	Goodwill	80,000
Workmen’s Compensation Reserve	60,000	Building	4,00,000
General Reserve	1,20,000	Machinery	2,50,000
A’s Capital	5,00,000	Stock	2,00,000
B’s Capital	3,00,000	Debtors	1,40,000
		Cash	60,000
Total	11,30,000	Total	11,30,000

(6)

25. A, B and C are partners sharing profits 5 : 3 : 2 and having fixed capitals of ₹ 6,00,000, ₹ 4,00,000 and ₹ 2,00,000. The deed provides : interest on capital @ 6% p.a.; salary to A ₹ 30,000 p.a.; commission to B @ 5% of net profit (before commission); C is guaranteed a minimum of ₹ 1,00,000 per year (including interest on capital), any deficiency to be borne by A and B in 3 : 2. Net profit for the year was ₹ 4,20,000. Current account balances on 1^st April 2025 : A ₹ 10,000 (Cr), B ₹ 5,000 (Dr), C ₹ 8,000 (Cr). Drawings : A ₹ 40,000; B ₹ 30,000; C ₹ 20,000. Prepare Profit and Loss Appropriation Account and Partners’ Current Accounts.(6)

26. Mehta Ltd. had 8,00,000, 12% debentures of ₹ 100 each, redeemable on 31^st March 2026 at a premium of 10%. The company created a Debenture Redemption Reserve of ₹ 2,00,000 (25%) out of profits and invested ₹ 1,20,000 (15% of the debentures) in specified securities (DRR Investment) as required. On the date of redemption the investments were sold at book value and the debentures were redeemed out of the funds available (the balance was arranged from bank). Pass journal entries for : (a) creation of DRR, (b) investment, (c) due on redemption, (d) payment to debentureholders, (e) sale of investments and (f) transfer of DRR to General Reserve.(6)

27. From the following calculate : (i) Current Ratio, (ii) Liquid Ratio, (iii) Debt-Equity Ratio, (iv) Total Assets to Debt Ratio, (v) Working Capital Turnover Ratio, (vi) Return on Investment (Capital Employed).
Shareholders’ funds ₹ 18,00,000; 10% Long-term debt ₹ 6,00,000; Current liabilities ₹ 6,00,000. Fixed assets ₹ 16,00,000; Non-current investments ₹ 2,00,000; Current assets ₹ 12,00,000 (Inventory ₹ 4,00,000, Trade receivables ₹ 5,00,000, Cash ₹ 2,00,000, Prepaid expenses ₹ 1,00,000). Revenue from operations ₹ 36,00,000; Net profit after tax ₹ 3,00,000; Tax rate 40%; Interest on debt ₹ 60,000.(6)

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

28. From the Balance Sheet of Helix 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	10,00,000	8,00,000
9% Preference share capital	3,00,000	4,00,000
General reserve	1,50,000	1,00,000
Surplus in Statement of P&L	2,10,000	1,50,000
Long-term borrowings (Bank loan)	2,50,000	3,00,000
Trade payables	1,40,000	1,20,000
Provision for tax	50,000	40,000
Total	21,00,000	19,10,000
II. ASSETS
Fixed assets (net)	12,00,000	10,50,000
Non-current investments	1,50,000	1,80,000
Inventories	3,20,000	2,60,000
Trade receivables	2,60,000	2,30,000
Prepaid expenses	20,000	30,000
Cash and cash equivalents	1,50,000	1,60,000
Total	21,00,000	19,10,000

Additional information : (i) Net profit before tax ₹ 2,56,000 after charging depreciation ₹ 1,10,000, interest on bank loan ₹ 30,000 and loss on sale of investments ₹ 5,000, and after crediting profit on sale of a fixed asset ₹ 12,000 and dividend received ₹ 6,000; (ii) The fixed asset sold had a book value of ₹ 60,000; (iii) Investments costing ₹ 50,000 were sold and new investments of ₹ 20,000 were purchased; (iv) Provision for tax made ₹ 70,000; (v) Dividends paid : equity ₹ 40,000 and preference ₹ 36,000; ₹ 50,000 transferred to General Reserve; (vi) Equity shares of ₹ 2,00,000 were issued at par, preference shares of ₹ 1,00,000 were redeemed at par and ₹ 50,000 of the bank loan was repaid; interest was paid in full.

(8)

29. A, B and C share profits 2 : 2 : 1. They decided to dissolve the firm on 31^st March 2026. The Balance Sheet is given below and the following was agreed : (i) Land realised ₹ 3,60,000, Furniture ₹ 1,10,000, Stock ₹ 1,95,000 and Debtors ₹ 1,05,000; (ii) B took over the Investments at ₹ 95,000; (iii) A computer not recorded in the books was taken over by C at ₹ 12,000; (iv) Creditors were paid ₹ 1,50,000 in full settlement; (v) Bank Loan was repaid along with interest of ₹ 4,000; (vi) Realisation expenses of ₹ 16,000 were paid by the firm.
Prepare Realisation Account, Partners’ Capital Accounts and Bank Account.

Liabilities	₹	Assets	₹
Creditors	1,60,000	Land	3,00,000
Bank Loan	1,00,000	Furniture	1,50,000
General Reserve	50,000	Stock	2,10,000
A’s Capital	3,00,000	Debtors	1,20,000
B’s Capital	2,00,000	Investments	90,000
C’s Capital	1,00,000	Cash	40,000
Total	9,10,000	Total	9,10,000

(8)

ANSWER KEY & SOLUTIONS · ACCOUNTANCY PRACTICE PAPER (SET – 5)

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

Hints for Q.1–16. (1) Equal monthly drawings at the end of each month ⇒ average period = 5.5 months; 60,000 × 12% × 5.5/12 = ₹ 3,300. (2) C’s share = 20,000, deficiency 10,000 borne by A (3/5 = 6,000) ⇒ A = 60,000 − 6,000 = ₹ 54,000. (3) Average = 1,80,000 × 2 = ₹ 3,60,000. (4) Goodwill = 60,000 ÷ 1/4 = ₹ 2,40,000. (5) General Reserve belongs to old partners in the old ratio. (6) Section 37 : 6% p.a. or share of profit. (7) JLP surplus is credited to all partners in the old ratio. (8) Asset taken over : Dr Partner’s Capital, Cr Realisation. (9) 800 × 4/5 = 640. (10) 2,000 × 96 = ₹ 1,92,000. (11) Interest received (non-financial company) is investing. (12) E + 0.5E = 24,00,000 − 6,00,000 = 18,00,000 ⇒ E = ₹ 12,00,000. (13) 18,00,000 ÷ 3,00,000 = 6 times. (14) Operating profit = 6,00,000 − 4,00,000 = 2,00,000 ⇒ 10%. (15) (d) : A is false (interest on capital is an appropriation, not a charge), R is true. (16) (a) : both true and R explains A.

SECTION B — Solutions (3 marks each)

17. Interest on capital : A = 8,00,000 × 5% = 40,000; B = 6,00,000 × 5% = 30,000. Profit available = 2,40,000 + 3,000 − 70,000 − 36,000 = ₹ 1,37,000 (3 : 2) ⇒ A 82,200; B 54,800.

Particulars	₹	Particulars	₹
Interest on Capital : A	40,000	Profit and Loss A/c (Net profit)	2,40,000
B	30,000	Interest on Drawings : A	2,000
Salary to A	36,000	B	1,000
Profit transferred to A’s Current A/c (3/5)	82,200
Profit transferred to B’s Current A/c (2/5)	54,800
Total	2,43,000	Total	2,43,000

(Interest/Salary 1, Drawings 1, Distribution 1)

18. Gain : A = 1/2 − 5/10 = 0; B = 1/2 − 3/10 = 2/10 ⇒ B alone gains (gaining ratio 0 : 1) (1). C’s share of goodwill = 2/10 × 2,00,000 = ₹ 40,000 (1), to be paid by B.

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

(1)

19. Share Capital = 5,000 × 10 = 50,000; Securities Premium = 5,000 × 2 = 10,000.

Particulars	Dr. (₹)	Cr. (₹)
(i) Machinery A/c   Dr	60,000
To Vendor A/c		60,000
Vendor A/c   Dr	60,000
To Equity Share Capital A/c		50,000
To Securities Premium A/c		10,000
(ii) Preliminary Expenses A/c   Dr	20,000
To Promoters A/c		20,000
Promoters A/c   Dr	20,000
To Equity Share Capital A/c		20,000

(2 + 1)

20. Issue price ₹ 106; Bank = 3,000 × 106 = 3,18,000; Securities Premium = 18,000; Premium on redemption = 3,000 × 12 = 36,000 = Loss on issue; interest = 3,00,000 × 8% × 6/12 = 12,000.

Particulars	Dr. (₹)	Cr. (₹)
(i) Bank A/c   Dr	3,18,000
Loss on Issue of Debentures A/c   Dr	36,000
To 8% Debentures A/c		3,00,000
To Securities Premium A/c		18,000
To Premium on Redemption of Debentures A/c		36,000
(ii) Securities Premium A/c   Dr	18,000
To Loss on Issue of Debentures A/c		18,000
(iii) Interest on Debentures A/c   Dr	12,000
To Bank A/c		12,000

(1 + 1 + 1)

SECTION C — Solutions (4 marks each)

21. Common-size Balance Sheet (% of Balance Sheet total) :

Particulars	2024–25 (₹)	2025–26 (₹)	2024–25 (%)	2025–26 (%)
Equity share capital	8,00,000	9,00,000	50.00%	45.00%
Reserves and surplus	2,00,000	3,00,000	12.50%	15.00%
Long-term borrowings	4,00,000	4,00,000	25.00%	20.00%
Current liabilities	2,00,000	4,00,000	12.50%	20.00%
Total	16,00,000	20,00,000	100%	100%
Fixed assets	9,00,000	11,00,000	56.25%	55.00%
Non-current investments	1,00,000	1,00,000	6.25%	5.00%
Inventories	2,50,000	3,50,000	15.62%	17.50%
Trade receivables	2,00,000	3,00,000	12.50%	15.00%
Cash and cash equivalents	1,50,000	1,50,000	9.38%	7.50%
Total	16,00,000	20,00,000	100%	100%

(4)
OR Comparative Balance Sheet :

Particulars	2024–25 (₹)	2025–26 (₹)	Absolute change (₹)	% change
Equity share capital	8,00,000	9,00,000	1,00,000	12.50%
Reserves and surplus	2,00,000	3,00,000	1,00,000	50.00%
Long-term borrowings	4,00,000	4,00,000	0	0.00%
Current liabilities	2,00,000	4,00,000	2,00,000	100.00%
Total	16,00,000	20,00,000	4,00,000	25.00%
Fixed assets	9,00,000	11,00,000	2,00,000	22.22%
Non-current investments	1,00,000	1,00,000	0	0.00%
Inventories	2,50,000	3,50,000	1,00,000	40.00%
Trade receivables	2,00,000	3,00,000	1,00,000	50.00%
Cash and cash equivalents	1,50,000	1,50,000	0	0.00%
Total	16,00,000	20,00,000	4,00,000	25.00%

(4)

22. Working : 11,00,000 = 9,00,000 + P − 1,20,000 − 1,00,000 ⇒ Purchases = ₹ 4,20,000 (1). Sale of machine = 1,00,000 + 20,000 = ₹ 1,20,000; sale of investments = 80,000 − 5,000 = ₹ 75,000 (½).

Cash Flow from Investing Activities	₹
Purchase of plant	(4,20,000)
Sale of machine	1,20,000
Sale of investments	75,000
Purchase of investments	(1,50,000)
Interest received	12,000
Dividend received	8,000
Net cash used in investing activities	(3,55,000)

(2½)
OR NPBT = Increase in surplus 1,00,000 + Transfer to reserve 30,000 + Dividend 40,000 + Provision for tax 70,000 = ₹ 2,40,000 (1).

Operating profit before working capital changes	₹
Net profit before tax	2,40,000
Add : Depreciation	60,000
Add : Interest paid	25,000
Add : Loss on sale of investments	5,000
Less : Profit on sale of land	(15,000)
Operating profit before working capital changes	3,15,000

(3)

23. (i) Inventory turnover = Cost ÷ Average inventory ⇒ Cost = 5 × 4,20,000 = ₹ 21,00,000 (½). (ii) Cost = 70% of revenue ⇒ Revenue = 21,00,000 ÷ 0.7 = ₹ 30,00,000 (½). (iii) Gross profit = 9,00,000 (½). (iv) Other operating expenses = 3,00,000 ⇒ Operating profit = 6,00,000; Operating profit ratio = 20% (1). (v) PBT = 6,00,000 − 1,00,000 = 5,00,000; Tax = 1,50,000 ⇒ PAT = ₹ 3,50,000; Net profit ratio = 3,50,000 ÷ 30,00,000 × 100 = 11.67% (1½).

SECTION D — Solutions (6 marks each)

24. Working : Revaluation profit = 40,000 − 20,000 − 7,000 = ₹ 13,000. Workmen’s Compensation Reserve 60,000 − claim 24,000 = ₹ 36,000 to A and B (the claim of ₹ 24,000 remains as a liability). C’s share of goodwill = 1/4 × 2,40,000 = ₹ 60,000. New ratio : A = 3/5 × 3/4 = 9/20; B = 2/5 × 3/4 = 6/20; C = 5/20 ⇒ 9 : 6 : 5. Sacrifice 3/20 : 2/20 = 3 : 2 (goodwill 36,000 : 24,000) (1½).
Revaluation Account (1½)

Particulars	₹	Particulars	₹
Machinery A/c (8% × 2,50,000)	20,000	Building A/c (10% × 4,00,000)	40,000
Provision for Doubtful Debts (5% × 1,40,000)	7,000
Profit transferred : A’s Capital (3/5)	7,800
B’s Capital (2/5)	5,200
Total	40,000	Total	40,000

Partners’ Capital Accounts (3)

Particulars	A (₹)	B (₹)	C (₹)	Particulars	A (₹)	B (₹)	C (₹)
Goodwill written off (3 : 2)	48,000	32,000		Balance b/d	5,00,000	3,00,000
Balance c/d	5,89,400	3,59,600	3,00,000	Bank (Capital)			3,00,000
				General Reserve (3 : 2)	72,000	48,000
				Workmen’s Comp. Reserve surplus (3 : 2)	21,600	14,400
				Revaluation Profit	7,800	5,200
				Bank (Goodwill ₹ 60,000, 3 : 2)	36,000	24,000
Total	6,37,400	3,91,600	3,00,000	Total	6,37,400	3,91,600	3,00,000

25. Working : Distributable profit = 4,20,000 − 72,000 (interest) − 30,000 (salary) − 21,000 (commission) = ₹ 2,97,000 (5 : 3 : 2) ⇒ A 1,48,500; B 89,100; C 59,400 (1½). C’s total = 12,000 + 59,400 = 71,400; guaranteed 1,00,000 ⇒ deficiency ₹ 28,600, borne by A (3/5 = 17,160) and B (2/5 = 11,440) (1).
Profit and Loss Appropriation Account (2)

Particulars	₹	Particulars	₹
Interest on Capital : A (6,00,000 × 6%)	36,000	Profit and Loss A/c (Net profit)	4,20,000
B (4,00,000 × 6%)	24,000
C (2,00,000 × 6%)	12,000
Salary to A	30,000
Commission to B (5% × 4,20,000)	21,000
Profit transferred : A’s Current A/c (1,48,500 − 17,160)	1,31,340
B’s Current A/c (89,100 − 11,440)	77,660
C’s Current A/c (59,400 + 28,600)	88,000
Total	4,20,000	Total	4,20,000

Partners’ Current Accounts (1½)

Particulars	A (₹)	B (₹)	C (₹)	Particulars	A (₹)	B (₹)	C (₹)
Balance b/d		5,000		Balance b/d	10,000		8,000
Drawings	40,000	30,000	20,000	Interest on Capital	36,000	24,000	12,000
Balance c/d	1,67,340	87,660	88,000	Salary	30,000
				Commission		21,000
				Profit (P&L Appropriation)	1,31,340	77,660	88,000
Total	2,07,340	1,22,660	1,08,000	Total	2,07,340	1,22,660	1,08,000

26. Working : DRR = 25% × 8,00,000 = 2,00,000; Investment = 15% × 8,00,000 = 1,20,000; Premium on redemption = 10% × 8,00,000 = 80,000. DRR is a reserve created out of profits (not a charge), and is transferred to General Reserve after redemption.

Particulars	Dr. (₹)	Cr. (₹)
(a) Profit and Loss A/c   Dr	2,00,000
To Debenture Redemption Reserve A/c		2,00,000
(b) DRR Investment A/c   Dr	1,20,000
To Bank A/c		1,20,000
(c) 12% Debentures A/c   Dr	8,00,000
Premium on Redemption of Debentures A/c   Dr (8,00,000 × 10%)	80,000
To Debentureholders A/c		8,80,000
(e) Bank A/c   Dr	1,20,000
To DRR Investment A/c		1,20,000
(d) Debentureholders A/c   Dr	8,80,000
To Bank A/c		8,80,000
(f) Debenture Redemption Reserve A/c   Dr	2,00,000
To General Reserve A/c		2,00,000

((a) 1, (b) 1, (c) 1½, (e) 1, (d) 1, (f) ½)

27. Working : Total assets = 16,00,000 + 2,00,000 + 12,00,000 = ₹ 30,00,000 = 18,00,000 + 6,00,000 + 6,00,000; Quick assets = 12,00,000 − 4,00,000 − 1,00,000 = 7,00,000; Working capital = 12,00,000 − 6,00,000 = 6,00,000; PBT = 3,00,000 ÷ 0.6 = 5,00,000; PBIT = 5,60,000; Capital employed = 18,00,000 + 6,00,000 = 24,00,000 (1).

Ratio	Working	Answer
(i) Current Ratio	12,00,000 ÷ 6,00,000	2 : 1
(ii) Liquid Ratio	7,00,000 ÷ 6,00,000	1.17 : 1
(iii) Debt-Equity	6,00,000 ÷ 18,00,000	0.33 : 1
(iv) Total Assets to Debt	30,00,000 ÷ 6,00,000	5 : 1
(v) Working Capital Turnover	36,00,000 ÷ 6,00,000	6 times
(vi) Return on Investment	5,60,000 ÷ 24,00,000 × 100	23.33%

(5, ⅚ each)

SECTION E — Solutions (8 marks each)

28. Working notes : (i) Fixed assets purchased : 12,00,000 = 10,50,000 + P − 1,10,000 − 60,000 ⇒ P = ₹ 3,20,000 (1). (ii) Tax paid = 40,000 + 70,000 − 50,000 = ₹ 60,000 (1). (iii) Investments : 1,50,000 = 1,80,000 − 50,000 + P ⇒ purchased ₹ 20,000 ✓. (iv) Transfer to General Reserve is a non-cash appropriation. (v) Check : surplus 1,50,000 + NPAT 1,86,000 − 50,000 − 76,000 = ₹ 2,10,000 ✓.

Cash Flow Statement of Helix Ltd. for the year ended 31-03-2026	₹	₹
A. Cash flow from operating activities
Net profit before tax	2,56,000
Add : Depreciation	1,10,000
Add : Interest on bank loan	30,000
Add : Loss on sale of investments	5,000
Less : Profit on sale of fixed asset	(12,000)
Less : Dividend received	(6,000)
Operating profit before working capital changes		3,83,000
Increase in inventories	(60,000)
Increase in trade receivables	(30,000)
Decrease in prepaid expenses	10,000
Increase in trade payables	20,000
Cash generated from operations		3,23,000
Less : Tax paid	(60,000)
Net cash from operating activities		2,63,000
B. Cash flow from investing activities
Purchase of fixed assets	(3,20,000)
Sale of fixed asset (60,000 + 12,000)	72,000
Sale of investments (50,000 − 5,000)	45,000
Purchase of investments	(20,000)
Dividend received	6,000
Net cash used in investing activities		(2,17,000)
C. Cash flow from financing activities
Issue of equity share capital	2,00,000
Redemption of preference shares	(1,00,000)
Repayment of bank loan	(50,000)
Interest paid	(30,000)
Dividend paid (40,000 + 36,000)	(76,000)
Net cash used in financing activities		(56,000)
Net decrease in cash and cash equivalents (A + B + C)		(10,000)
Add : Opening cash and cash equivalents		1,60,000
Closing cash and cash equivalents		1,50,000

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

29. Realisation Account (3)

Particulars	₹	Particulars	₹
Land A/c	3,00,000	Creditors A/c	1,60,000
Furniture A/c	1,50,000	Bank Loan A/c	1,00,000
Stock A/c	2,10,000	Bank A/c (Land)	3,60,000
Debtors A/c	1,20,000	Bank A/c (Furniture)	1,10,000
Investments A/c	90,000	Bank A/c (Stock)	1,95,000
Bank A/c (Creditors paid)	1,50,000	Bank A/c (Debtors)	1,05,000
Bank A/c (Loan + interest)	1,04,000	B’s Capital A/c (Investments taken)	95,000
Bank A/c (Expenses)	16,000	C’s Capital A/c (Computer taken)	12,000
		Loss : A’s Capital (2/5)	1,200
		B’s Capital (2/5)	1,200
		C’s Capital (1/5)	600
Total	11,40,000	Total	11,40,000

Partners’ Capital Accounts (3)

Particulars	A (₹)	B (₹)	C (₹)	Particulars	A (₹)	B (₹)	C (₹)
Realisation (Loss)	1,200	1,200	600	Balance b/d	3,00,000	2,00,000	1,00,000
Realisation (Assets taken)		95,000	12,000	General Reserve (2 : 2 : 1)	20,000	20,000	10,000
Bank A/c	3,18,800	1,23,800	97,400
Total	3,20,000	2,20,000	1,10,000	Total	3,20,000	2,20,000	1,10,000

Bank Account (2)

Particulars	₹	Particulars	₹
Balance b/d	40,000	Realisation (Creditors)	1,50,000
Realisation (Land)	3,60,000	Realisation (Loan + interest)	1,04,000
Realisation (Furniture)	1,10,000	Realisation (Expenses)	16,000
Realisation (Stock)	1,95,000	A’s Capital A/c	3,18,800
Realisation (Debtors)	1,05,000	B’s Capital A/c	1,23,800
		C’s Capital A/c	97,400
Total	8,10,000	Total	8,10,000

Loss on realisation = 11,40,000 − 11,37,000 = ₹ 3,000, shared 2 : 2 : 1.

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