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M.32 An Aid to Accountancy—CBSE XII

Following was agreed among the partners on B’s retirement:
(a) Building to be appreciated by 20%.
(b) Plant and Machinery to be depreciated by 10%.
(c) A provision of 5% on debtors to be created for doubtful debts.
(d) Stock was to be valued at ` 1,80,000 and Investments at ` 3,50,000.
(e) An old photocopier previously written off was sold for ` 20,000.
(f) Partners had to pay ` 50,000 to the family of an employee who died in an accident.
B was paid ` 1,00,000 in cash and the balance in three equal yearly instalments
with interest @ 10% p.a. starting from 31st March, 2016.
Pass the necessary Journal entries to record the above adjustments, prepare B’s Loan
Account till it is finally paid. The firm closes its book on 31st March every year. (8)

PART B
ANALYSIS OF FINANCIAL STATEMENTS
18. What is meant by a ‘non-cash transaction’? Give one example of a non-cash transaction.
(1)
19. ‘Cash advances and loans’ made by financial enterprises will be shown under which
type of activity while preparing Cash Flow Statement? Give reason in support of your
answer. (1)
20. (a) Moon Ltd. has Calls-in-Arrears of ` 5,00,000 and Calls-in-Advance of ` 2,00,000.
The company wants to show the Net Balance of ` 3,00,000 under the head Current
Assets. Is this the correct way of presentation?
(b) Mention any two objectives of Financial Statements.
(c) What is meant by Operating Cycle? (1 + 2 + 1)
21. (a) Comparative Statements consider the qualitative aspects in the analysis. Do you
agree with the given statement?
(b) From the following information, prepare Comparative Statement of Profit and Loss:

Particulars 31st March, 2017 31st March, 2018
Revenue from Operations ` 6,00,000 ` 9,00,000
Cost of Raw Materials Consumed 60% of Revenue from Operations 50% of Revenue from Operations
Other Expenses as % of (Revenue from
Operations less Cost of Materials Consumed) 20% 15%
Income Tax 40% 40%
(1 + 3)
22. (a) X Ltd. has a Current Ratio of 3 : 1 and Quick Ratio of 1.2 : 1. If the Working Capital
is ` 1,80,000, calculate value of Current Assets and Inventory.
(b) From the following information, calculate Inventory Turnover Ratio:
Revenue from Operations : ` 4,00,000;
Gross Profit: 25% of Cost;
Inventory in the beginning is 1/3rd of the Closing Inventory which is 30% of
Revenue from Operations. (2 + 2)