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Model Test Paper 19

Time Allowed: 3 Hours Max. Marks: 80

General Instructions:
As per Model Test Paper 1

PART A
ACCOUNTING FOR NOT-FOR-PROFIT ORGANISATIONS,
PARTNERSHIP FIRMS AND COMPANIES
1. After making adjustment of income and expenses related to Prize Fund, the
fund balance is negative. Where will it be shown in the financial statements of
Not-for-Profit Organisation?
Or
State with reason whether Income and Expenditure Account records all revenue
incomes received and revenue expenditures paid during the current year. (1)

2. State the reason for bringing goodwill by a new partner at the time of his admission.
Or
Ravi wants to retire from the firm. General Reserve of ` 50,000 exists in the books. Ravi
wants that it should be divided among all the partners. While remaining partners Kavi
and Chavi want that reserve should remain intact to meet the future contingencies.
Whose view is correct and why? (1)
3. Arti and Bharti are partners sharing profits and losses in the ratio of 2 : 3 with capitals
of ` 5,00,000 and ` 2,50,000 respectively. The Partnership Deed provides for interest
on capital @ 6% p.a. and the profit for the year is ` 37,500.
State giving reason how much amount of interest on capital will be allowed to each
partner. (1)
4. Sangam Ltd. has ` 50,00,000, 9% Debentures of ` 100 each of which half the debentures
are due for redemption at a premium of 5%. The company has in its Debentures
Redemption Reserve a balance of ` 2,50,000. State the amount of profit required to be
transferred to Debentures Redemption Reserve (DRR).
Or
State any two differences between a Share and a Debenture. (1)
5. If new partner has to bring proportionate capital which is not given, how can it be
determined? (1)
6. Dev, one of the partners was to receive 2% of the net cash realised from dissolution and was
to bear realisation expenses. Realisation expenses were ` 2,500. The assets (including
Cash at Bank ` 7,500) realised ` 3,82,500 and cash paid to outsiders’ liabilities ` 1,00,000.
Pass the necessary Journal entry for Dev’s remuneration for the dissolution process.
(1)
7. On 1st April, 2017, Strong Ltd. issued 5,000, 10% Debentures of ` 100 each at a
discount of 10% redeemable at a premium of 5%. It has a balance of ` 1,00,000 in the
Securities Premium Reserve. The company decides to write off discount or loss on issue
of debentures in the year ended 31st March, 2018.