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M.106 An Aid to Accountancy—CBSE XII

Liabilities ` Assets `

Trade Creditors 58,000 Goodwill 1,00,000
Bills Payable 59,000 Furniture 12,000
A’s Loan 8,000 Stock 1,67,000
Capital A/cs: Debtors 2,80,000
A 2,37,500 Less: Provision for Doubtful Debts 7,000 2,73,000
B 1,72,500 Investments 50,000
C 1,30,000 5,40,000 Bank 62,000
Cash in Hand 1,000
6,65,000 6,65,000
A retired on 1st April, 2018 on the following terms:
(a) His Capital Account was credited with ` 30,000 for his share of goodwill.
(b) Furniture and Stock were each depreciated by 10%.
(c) Provision for Doubtful Debts was increased to 5%.
(d) Investments were appreciated by 2%.
(e) A was paid on 7th April, 2018.
The partners after the retirement of A agreed to write off goodwill from the books, to
share profits and losses equally and to equalise their contributions to the partnership
fund of capital. They also decided to bring in sufficient amount to pay A and to maintain
Cash in Hand at ` 1,000.

You are required to prepare Revaluation Account, Partners’ Capital Accounts and
Balance Sheet of B and C after A’s retirement. (8)

PART B

ANALYSIS OF FINANCIAL STATEMENTS
18. ‘An enterprise may hold securities and loans for dealing or trading purposes in which
case they are similar to inventory acquired specifically for resale.’ Is the statement
correct? Cash flows from such activities will be classified under which type of activity
while preparing Cash Flow Statement? (1)
19. Give the meaning of ‘Cash Equivalents’ for the purpose of preparing Cash Flow
Statement. (1)
20. (a) Give the major headings under which following items will be shown in a company’s
Balance Sheet as per Schedule III of the Companies Act, 2013:
(i) Trade Receivables;
(ii) Provision for Tax;
(iii) Preliminary Expenses;
(iv) Loose Tools;
(v) Interest accrued on investments; and
(vi) Goodwill.
(b) State how Financial Statement Analysis is not free from personal bias. (3 + 1)