Q1) List any two items appearing on the credit side of a partner's current account.  (Marks 2)

Q2) On April 1st, 1998 an existing firm had assets of Rs. 75,000/- including cash of Rs. 5,000/-. The partner's capital account showed a balance of Rs. 60,000/- and reserve constituted the rest. If the normal rate of return is 20% and the goodwill of the firm is valued at Rs. 24,000/- at 4 year purchase of super profits, find the average profits of the firm.
 (Marks 3)

Q4) (a) A and B are partners in a firm sharing profits equally. They had advanced to the firm a sum of Rs. 30,000/- as a loan in their profit sharing ratio on July 1st, 1998. The partnership deed is silent on the question of interest on loan from partners. Compute the interest payable by the firm to the partners, assuming the firm closes its books on December 31st.  (Marks 3)

(b) A, B and C are partners sharing profits in the ratio of 5 : 4 : 1. C is given a guarantee that his share of profits in any given year would be Rs. 5000/-. Deficiency, if any, would be borne by A and B equally. The profits for the year 1998 amounted to Rs. 40000/-. Pass necessary entries in the books of the firm.  (Marks 3)

Q5) M and N were partners sharing profits in the ratio of 3 : 2. On the date of dissolution their capitals were - M: Rs. 7,650/-, N: Rs. 4,300/-. The creditors amounted to Rs. 27,500/-. The balance cash was Rs. 760/-. The assets realised Rs. 25,430/-, the expenses on dissolution were Rs. 540/-. All partners were solvent.
Close the books of the firm, showing the Realisation, Capital and Cash accounts. (Show the working clearly).


OR

Rohit and Bal sharing profits in the ratio of 5 : 3 had following balance Sheet as on December 31,1998:

On January 1st, 1999, they decided to admit Khosla into the partnership giving him 1/5th share. He brings in Rs. 50,000/- as his share of capital. The partners decide to revalue the assets as follows :
Goodwill Rs. 50,000/-, Plant Rs. 25,000/-, Debtors Rs. 31,000/-, Stock Rs. 32,500/-, Building Rs. 40,000/-, Furniture Rs. 2,000/-, Bills Receivables Rs. 12,500/-.
The partners also decided not to show goodwill in the books of the new firm. You are required to show the journal entries and prepare the Revaluation A/C. (Marks 12)

Q6) A, B and C were partners in a firm. On 1.1.98 their capitals stood at Rs. 50,000/-, Rs. 25,000/- and Rs. 25,000/- respectively. As per the provisions of the partnership deed:
(a) C was entitled for a salary of Rs. 1,000/- pm.
(b) Partners were entitled to interest on capital at 5% p.a.
(c) Profits were to be shared in the ratio of capitals.
The net profit for the year 1998 of Rs. 33,000/- was divided equally without providing for the above terms.
Pass an adjustment entry to rectify the above errors.    (Marks 4)

Q13) The following information is provided to you :

From the above information, calculate any three of the following ratios :
(a) Debt Equity Ratio
(b) Capital Turnover Ratio
(c) Interest coverage ratio
(d) Return on Investment
(e) Debt to total funds ratio  (Marks 6)

Q14) What is analysis of financial statements? Briefly explain the techniques of analysing these statements.  (Marks 6)

Q17) State the reasons whether the following would result in an inflow, outflow or no flow of funds. Attempt any four :
(a) Redemption of debentures;
(b) Debentures converted as redeemable preference shares;
(c) Amount transferred to provision for taxation;
(d) Tax refund;
(e) Obtained loan for mortgage.  (Marks 4)

Q18)  From the following Balance Sheet prepare Schedule showing  changes in Working Capital and  Funds Flow Statement:

Balance Sheet

Additional information :
(a) Depreciation charged on Fixed assets was Rs. 60,000/-.
(b) A machine of book value of Rs. 40,000/- was sold for Rs. 25,000/-.  (Marks 12)