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Model Test Papers M.231

(ii) The Van sold during the year had originally cost ` 40,000 in 2015–16 and had
been depreciated @ 25% p.a. on the Reducing Balance Method for exactly two
years up to the date of sale.
(iii) Capital Fund as on 1st April, 2017: ` 1,66,820.
Prepare—
(a) an Income and Expenditure Account for the year ended 31st March, 2018.
(b) a Balance Sheet as at 31st March, 2018. (6)

14. X, Y and Z were in partnership sharing profits and losses in the ratio of 2 : 1 : 2. Their
fixed capitals were ` 2,00,000, ` 1,50,000 and ` 2,00,000 respectively. The firm closes
its books on 31st March every year. On 31st March, 2016, Y died. The executor of a
deceased partner according to the agreement was entitled for the following:
(i) Interest on capital from the first day of the accounting year till the date of his
death @ 10% p.a.
(ii) His share of goodwill: The goodwill of the firm was valued at ` 3,00,000 on
Y’s death.
(iii) His share of profits: The profit of the firm for the year ended 31st March, 2016
was ` 1,50,000.
According to Y’s will the executor should donate his share paid by the firm to a ‘Home
for physically challenged children’. Executor was paid the sum due in two equal annual
instalments with interest @ 10% p.a. beginning 31st March, 2017.
Prepare Y’s Capital Account as on 31st March, 2016 to be presented to his
executor and his Executor’s Loan Account for the year ending 31st March, 2017 and
31st March, 2018. (6)
15. X and Y were partners in a firm sharing profits in the ratio of 3 : 2. The Court ordered
for the dissolution of the firm on 31st March, 2018 since Y became permanently
incapable to work. X was deputed to realise the assets and to pay the liabilities. He
was paid ` 1,000 as remuneration for his services. The financial position of the firm
as at 31st March, 2018 was as follows:

Liabilities ` Assets `

Capital A/cs: Building 1,20,000
X 42,000 Investments 30,600
Y 42,000 84,000 Goodwill 4,000
Investment Fluctuation Reserve 8,000 Debtors 34,000
Mrs. X’s Loan 40,000 Less: Provision for Doubtful Debts 4,000 30,000
Y’s Loan 24,000 Bills Receivable 37,400
Sundry Creditors 80,000 Cash at Bank 6,000
Profit and Loss A/c 8,000
2,36,000 2,36,000