## General Instructions:

1) This question paper contains two parts A and B.
2) Part A is compulsory for all.
3) Part B has two options – Financial Statements Analysis and Computerized Accounting.
4) Attempt only one option of Part B.
5) All parts of a question should be attempted at one place.

## PART A: ACCOUNTING FOR PARTNERSHIP FIRMS AND COMPANIES

Q1. A, B and C are partners sharing profits and losses in the ratio of 5:3:2. C retired and his capital balance after adjustments regarding reserves, accumulated profits/ losses and gain/loss on revaluation was `2,50,000. C was paid `3,00,000 in full settlement. Afterwards D was admitted for 1/4th share. Calculate the amount of goodwill premium brought by D.

Sol: Goodwill share of C= `3,00,000-`2,50,000= `50,000
Firm’s Goodwill = 50,000x10/2= `2,50,000
D’s share in Goodwill= `2,50,000x1/4= `62,500

Q2. A and B were partners in a firm. They admitted C as a new partner for 20% share in the profits. After all adjustments regarding general reserve, goodwill, gain or loss on revaluation, the balances in capital accounts of A and B were `3,85,000 and `4,15,000 respectively. C brought proportionate capital so as to give him 20% share in the profits. Calculate the amount of capital to be brought by C.

Sol: Combined capital of A and B = `3,85,000+`4,15,000= `8,00,000
C’s share=1/5th of total capital
Remaining share= 1-1/5 =4/5
4/5= `8,00,000
C’s capital= `8,00,000x5/4x1/5= `2,00,000

Q3. A and B are partners. The net divisible profit as per Profit and Loss Appropriation A/c is `2,50,000. The total interest on partner’s drawing is `4,000. A’s salary is `4,000 per quarter and B’s salary is `40,000 per annum. Calculate the net profit/loss earned during this year.

Sol. Net Profit during the year=Divisible profits + Salary to partners – Interest on Drawings = 2,50,000+16,000+40,000-4000= `3,02,000

Q4. ABC Ltd. purchased for cancellation its own 5,000, 9% Debentures of `100 each for `95 per debenture.
Brokerage charges `15,000 were incurred. Calculate the amount to be transferred to capital reserve.
Amount paid for 5,000 Debentures=4,75,000+15,000= `4,90,000
The nominal value of debentures to be redeemed/cancelled= `5,00,000
Amount of profit on redemption to be transferred to capital reserve= `5,00,000--`4,90,000= `10,000

Q5. When can shares held by a shareholder be forfeited?

Answer: Shares held by a shareholder can be forfeited for the non-payment of call money due.

Q6. A partnership firm has 50 members. All the partners have agreed to admit Ram and Mohan as new partners. Can Ram and Mohan be admitted? Give reason in support of your answer.