ISC ACCOUNTS SAMPLE PAPER YEAR-2021
Time: Three Hrs.
(Candidates are allowed additional 15 minutes for Only reading the paper. They must NOT start writing during this time.)
(Part I of Section A is Compulsory. Answer any 4 Questions from Part II of Section A and
any two questions from Section B)
The intended marks for questions or parts of questions are given in the brackets [ ].
Transactions should be recorded in the answer book. All calculations should be shown clearly.
All working, including rough work, should be done on the same page as, and adjacent to, the rest of the answer.
PART I of ACCOUNTS SAMPLE PAPER
Answer all questions.
Question 1 [6×2]
Answer briefly each of the following questions:
- Give any two differences between Authorised Capital and Subscribed Capital.
- What is the accounting treatment of ‘Loss on Issue of Debentures’?
- Give any two differences between a Company’s Balance Sheet and a Firm’s Balance Sheet.
- Mention, in brief, SEBI Guideline regarding Debenture Redemption Reserve.
- What do you understand by operating cycle?
- Why is goodwill considered to be an intangible asset and not a fictitious asset?
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PART II ACCOUNTS SAMPLE PAPER
Answer any four questions.
Karan, Ali and Deb are partners in a firm sharing profits and losses in the ratio of 3:2:1. On 31st March, 2020, their Balance Sheet was as under:
Balance Sheet of Karan, Ali and Deb As at 31st March, 2020 
Investment Fluctuation Reserve
Less: Provision for Doubtful Debts (1000)
Cash at Bank
Karan Retire on 30th September, 2018.
An agreement was reached amongst Ali, Deb and Karan that:
(a) Building be revalued at Rs. 1,20,000.
(b) Furniture be depreciated by Rs. 2,000.
(c) To write off the Provision for Doubtful Debts since all debtors were good.
(d) Investments be valued at Rs. 64,000.
(e) Goodwill of the firm be valued at Rs.2,40,000.
(f) Amount payable to Karan to be transferred to his loan account.
You are required to:
- Pass journal entries on the date of Karan’s Retirement
- Prepare the Interim Balance Sheet of the reconstituted firm.
Bharat Ltd. invited applications for the issue of 50,000 Equity shares of Rs.10 each at a premium of Rs. 3 per share, payable as follows:
On Application Rs. 4
On Allotment The balance (including premium Rs.3)
Applications were received for 70,000 shares and pro-rata allotment was made to the remaining applicants after refunding application money to 10,000 share applicants.
Nicholas, who was allotted 2,500 shares, failed to pay the allotment money and his shares were forfeited.
Out of these forfeited shares,2,000 shares were reissued as fully paid-up @ Rs. 8 per share.
You are required to:
- Pass journal entries in the books of the company.
- Prepare Calls-in-arrears Account.
- Prepare Share Forfeiture Account. 
- Following balances have been extracted from the books of BHARAT Ltd. as at 31st March, 2020:
|Equity Share Capital (Fully paid shares of Rs. 100 each)
Security Premium Reserve
Statement of Profit and Loss (Dr)
Tangible Fixed Assets (at cost)
Accumulated Depreciation till date
Long term debt
You are required to prepare as at 31st March, 2020:
(i) The Balance Sheet of Universe Ltd. as per Schedule III of the Companies Act, 2013.
(ii) Notes to Accounts. 
(B) Rachit Ltd. took over assets of Rs. 9,00,000 and liabilities of Rs.2,40,000 of Mohit Ltd. at an agreed value of Rs. 6,30,000. Rachit Ltd. issued 10% Debentures of Rs. 100 each at a discount of 10% to Mohit Ltd. in full satisfaction of the price. Rachit Ltd. writes off any capital losses incurred during a year, at end of that financial year. You are required to pass the necessary journal entries to record the above transactions in the books of Rachit Ltd. 
A and B are partners in a firm, sharing profits and losses in the ratio of 3:1 On 31st March, 2020, their Balance Sheet was as under:
Balance Sheet of A&B As at 31st March, 2020
|Plant & Machinery
Sundry Debtors 57,000
Less Provision for Doubtful Debts (3000)
Cash at Bank
Profit & Loss A/c
C was taken as a partner for ¼ th share, with effect from 1st April, 2020, subject to the following adjustments:
(a) Plant and Machinery was found to be overvalued by Rs. 16,000. It was to be shown in the books at the correct value.
(b) Provision for Doubtful Debts was to be reduced by Rs. 2,000.
(c) Creditors included an amount of Rs. 2,000 received as commission from Mohit. The necessary adjustment was required to be made.
(d) Goodwill of the firm was valued at Rs. 60,000. C was to bring in cash, his share of goodwill along with his capital of Rs. 1,00,000.
(e) Inventory depreciated by Rs. 3,000.
You are required to prepare:
- Revaluation Account.
- Partners’ Capital Accounts.
- Balance Sheet of the reconstituted firm. 
A, B and C are equal partners in a firm, their Balance Sheet as on 31st March 2018 was as follows:
|Workmen Compensation Reserve||6,000||Building||1,25,000|
|C||90,000||Advertisement Suspense A/c||3,000|
On that date they agree to take D as equal partner on the following terms:
- D should bring in Rs. 1,60,000 as his capital and goodwill. His share of goodwill is valued at Rs. 60,000.
- Goodwill appearing in the books must be written off.
- Provision for loss on stock and provision for doubtful debts is to be made at 10% and 5% respectively.
- The value of building is to taken Rs. 2,00,000.
- Machinery and Stock depreciated by 5 % and 10% respectively.
You are required to prepare
2.Partner’s Capital Accounts,
- Balance Sheet of the new firm. 
- Jay Ltd took over Assets of 25,00,000 and liabilities of 6,00,000 of Vijay Ltd. Jay Ltd paid the purchase consideration by issuing 10,000 equity shares of 100 each at a premium of 10% and 11,00,000 by Bank Draft. Calculate Purchase consideration and pass necessary Journal entries in the books of Jay Ltd. 
(A) Roshan, Mahesh, Gopi and Jai are partners sharing profits and losses in the ratio of 3:3:2:2. The balances of capital accounts on 1st April, 2019 were: Roshan Rs. 8,00,000, Mahesh Rs. 5,00,000 Gopi Rs. 6,00,000 and Jai Rs. 6,00,000. After the accounts for the year ended 31st March, 2020 were prepared, it was discovered that interest on capital @ 12% per annum as provided in the partnership deed had not been credited to the partners’ capital accounts before the distribution of profits. You are required to rectify the error by passing a single adjusting journal entry. 
(B) Following is the Balance sheet of X and Y who share profits in the ratio of 4:1 as on 31st march 2020
Balance sheet of X and Y
|Bank overdraft||6,000||Debtors 17,000
Less provision 2000
|X’s Brother’s loan||8,000||Stock||15,000|
|Investment Fluctuation fund||
|Profit and Loss a/c||10,000|
The firm was dissolved on the above date and the following was decided—
- X agreed to pay off his brother’s loan
- Debtors of Rs 5000 proved bad.
- Other assets realized as follows—Investments 10% less, and Goodwill at 60%.
- One of the creditors for Rs 5000 was paid only Rs 3000.
- Building was auctioned for Rs 30,000 and the auctioneer’s commission amounted to Rs 1000.
- Y took over part of the stock at Rs 4000(being 20% less than the book value)Balance stock realized 50%
- Realisation expenses amounted to Rs 1,000.
You are required to prepare…
- Realisation account,
- Partner’s capital accounts
- Bank account. 
- List any four items that are shown under the sub-head ‘Other Current Assets’ in the Balance Sheet of a company prepared as per Schedule III of the Companies Act, 2013. 
- At the time of reconstitution of a partnership firm, goodwill was valued on the basis of three years’ purchase of the weighted average profits of the last four years. The profits and losses of the preceding four years were:
Year Profit Weights
2013-14 Rs. 42,000 1
2014-15 Rs. 47,000 2
2015-16 Rs. 53,000 3
2016-17 Rs. 45,000 4
While valuing the goodwill of the firm it was found that the closing stock of the year 2014-15 was overvalued by Rs. 7,000. You are required to calculate the value of goodwill on the date of reconstitution of the firm. 
- Transactions at the time of issue:Journalize the followings….
- 1000, 5% Debentures issued at Rs. 100 each repayable at Rs. 100 each.
- 2000, 6% Debentures issued at Rs. 95 each, repayable at Rs. 100 each
- 3000, 9% Debentures issued at Rs. 105 each , repayable at Rs. 100 each
- 4000, 12% Debentures issued at Rs. 100 each, payable at Rs. 110 each.
- 5000, 7 % Debentures issued at Rs. 95 each, Repayable at Rs. 115 each 
SECTION B (20 Marks)
Answer any two questions.
From the following data, calculate Current ratio and Liquid Ratio
|Liquid Assets||Rs. 75,000|
|Inventories(Includes Loose Tools of Rs.10,000)||Rs. 25,000|
|Working Capital||Rs. 60,000|
|Calculate amount of Opening Trade Receivables and Closing Trade Receivables from|
|the following figures:|
|Trade Receivable Turnover ratio||5 times|
|Cost of Revenue from Operations||Rs. 8,00,000|
|Gross Profit ratio||20%|
|Closing Trade Receivables were Rs. 40,000 more than in the beginning|
|Cash sales being ¼ times of Credit sales|
Under which major heads and subheads of the Balance Sheet of a company, will the following items be shown:-
- Loose Tools
- Unclaimed Dividend
- Interest on Calls in Arrears
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|From the following Balance Sheet of R Ltd., Prepare a Common Size Statement Balance Sheet As at 31st March, 2017 and 2018.|
|Particulars||Note no.||31.3.2018 (Rs.)||31.3.2017 (Rs.)|
|I EQUITY AND LIABILITIES
1. Shareholder’s Funds:
a. Share Capital
b. Reserve and Surplus
2. Current Liabilities:
a. Trade Payable
1. Non-Current Assets:
a. Fixed Assets:
i. Tangible Assets
j. ii. Intangible Assets
2. Current Assets
b. Trade Receivables
c. Cash and Cash Equivalents
(A) What is meant by the term Cash Equivalents as per Accounting Standard 3? 
(B) The Current Ratio of a company is 2:1. State whether the Current Ratio will improve, decline or will not change in the following cases: 
(i) Bill Receivable of Rs. 2,000 endorsed to a creditor is dishonoured.
(ii) Rs. 8,000 cash collected from Debtors of Rs. 8,500 in full and final settlement.
(C)From the following information, prepare a Comparative Statement of Profit and Loss of BHARAT Ltd: 
|Revenue from Operations||5,00,000||4,50,000|
|Cost of Material consumed||2,70,000||2,50,000|
|Interest from Investments||50,000||50,000|
|Employee Benefit Expenses||80,000||50,000|
From the following information of Sarita Ltd, calculate: 
|(i) Cash from Operating Activities.|
|(ii) Cash from Financing Activities|
|Provisions for Tax||15,000||10,000|
|Cash in Hand||50,000||75,000|
|Furniture (at book value)||1,20,000||1,60,000|
|Balance of Statement of Profit and Loss(Cr.)||2,50,000||2,40,000|
|During the year 2017-18:|
- A piece of furniture costing 30,000 (accumulated depreciation Rs. 3,000) was sold
for Rs. 25,000.
- Tax of 19,000 was paid.
- Interim Dividend of 4,000 was paid.
- The company paid 3,000 as interest on debentures.
ACCOUNTS SAMPLE PAPER