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Practice Test Papers PTP.3

Practice Test Paper 2

1. XYZ Ltd. purchased its own debentures from the market for investment for a consideration
of ` 5,00,000. Under which activity and how will this payment be shown in the Cash Flow
Statement? (1)
2. Avon Securities Ltd., a company dealing in shares and other financial instruments had made
strategic investment of ` 5 lakhs in Bull Securities Ltd., a company having membership of
BSE. It later sold these shares at a gain of ` 2,00,000. Under which head will the sale and
gain be shown in Cash Flow Statement? (1)
3. Under which main-head and sub-head of the Balance Sheet will the following items
be shown?
(i) Share Application Money
(ii) Debentures with maturity period of 12 months
(iii) Computer Software
(iv) Preference Share Capital (4)
4. (a) State any two objectives of Ratio Analysis.
(b) Opening Inventory ` 40,000; Closing Inventory ` 50,000; Revenue from Operations
` 6,00,000; Gross Profit Ratio 25%.
Calculate Inventory Turnover Ratio. (4)
5. XYZ Ltd. is in the business of manufacturing and selling carpets, decided to set up a new
manufacturing unit in Jammu and Kashmir. It decided to do so because of the natural
calamity struck in the state. It decided to employ factory staff from the local population
after giving them adequate training to develop the weaving skill in them. Each trainee
was paid stipend during the training period. Its Comparative Statement of Profit & Loss
for the years ended 31st March, 2023 and 2024 was as follows:

Particulars Note 31st March, 31st March, Absolute Change Percentage Change
No. 2023 2024 (Increase or (Increase or
` ` Decrease) (`) Decrease) (%)
I. Revenue from Operations 17,50,000 25,00,000 7,50,000 42.86
II. Other Income 40,000 50,000 10,000 25.00
III. Total Revenue (I + II) 17,90,000 25,50,000 7,60,000 42.46
IV. Expenses
(a) Cost of Materials Consumed 10,50,000 15,00,000 4,50,000 42.86
(b) Employees Benefit Expenses 3,80,000 4,00,000 20,000 5.26
(c) Other Expenses 75,000 1,00,000 25,000 33.33
Total Expenses 15,05,000 20,00,000 4,95,000 32.89
V. Profit before Tax (III – IV) 2,85,000 5,50,000 2,65,000 92.98
VI. Less: Tax 95,000 1,50,000 55,000 57.89
VII. Profit after Tax (V – VI) 1,90,000 4,00,000 2,10,000 110.53

Additional Information:
Employees Benefit Expenses include Wages of ` 2,00,000 and ` 1,90,000 in the years ended
31st March, 2024 and 2023 respectively.
Calculate Gross Profit Ratio for the two years. (4)