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196 197Accounts–XII TOPPER Sample Papers196 197Accounts–XII TOPPER Sample Papers
TOPPER SAMPLE PAPER 1
ACCOUNTANCY XII
Time Allowed - 3 Hrs. Max. Marks - 80
General Instructions:-1. This question paper contains two parts A & B only.2. All parts of questions should be attempted at one place.3. There is internal choice in some questions.
PART – A
Q 1. Why is it that the capital account of a partner does not show a ‘Debit Balance’ in spite of regular and consistent losses year after year? (1)
Q 2. Why is goodwill considered an intangible asset but not a fictitious asset? (1)
Q 3. Who should compensate whom in case of a change in the profit sharing ratio of the existing partner? (1)
Q 4. Where will you record the ‘Life Membership Fee’ while preparing the final accounts of not for profit organization? (1)
Q 5. What’s meant by surrender of shares? (1)
Q 6. Young India Club gives the following information during the year 2008 – 09: (3)
Particulars Amnt. Rs
Environment Fund 600000
Environment Fund Investment @ 7% p.a interest 400000
Expenses incurred during the year on Environment Awareness Movement 150000
Donations received towards the Environment Fund 75000
Interest received on fund investment during the year 20000
How will you deal with the above in the books of the club?
Q 7. Bharat Ltd. Issued 8000, 8% Debentures of Rs.100 each. Pass the necessary Journal entries for issue of debentures in the following cases:-
i) When debentures are issued at par and are redeemable at 5% premium.
ii) When debentures are issued at 5% premium and are redeemable at par.
iii) When debentures are issued at 5% premium and are redeemable at 5% premium. (3)
Q 8. A Ltd. Took over Assets of Rs.10,00,000 and creditors of Rs.1,00,000 from B Ltd. and issued Equity Shares of Rs.100 each at a premium of 25% as purchase consideration. Pass necessary Journal entries in the books of A Ltd. (3)
Q 9. X and Y are partners with capital of Rs.1,00,000 and 1,20,000 respectively. On 1st January 09, X gives a loan of Rs.20,000 to the firm and Y introduced Rs.40,000 as additional capital. Profit for the year ended 31st March 09 was Rs.30,400. there is no Partnership Deed. Both X and Y expect interest @ 10% p.a. on the loan and additional capital advanced by them. Show how the profits would be divided. Give reason. (4)
Q 10. State the provision of section 78 of Companies Act 1956. (4)
Q 11. A & B are in Partnership sharing profits in the ratio of 3:2. They decide to change their profit sharing ratio to 2:3. The capital accounts of A & B after all adjustments are Rs.80,000 and
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Rs.60,000.The Capital Account of Partners are to be adjusted on the basis of their new profit sharing ratio. Calculate the amount of actual cash to be paid off or brought in by the partners for adjustment of capital and pass the necessary journal entries. (4)
Q 12. (a) X Ltd. Forfeited 100 shares of Rs.10 each, issued at discount of 10% to Mahesh on which he had paid Rs2 per share. Out of these, 80 shares were reissued at Rs.6 per share to Suresh, Rs.8 paid up. Pass the Journal entries.
(b) On 1st April 07, X Ltd. had 1,000 12% Debenture of Rs. 100 each. Interest on debentures is payable half yearly on 30th September and 31st March. On 1st October 07 the company purchased 300 own debentures at Rs.93 for immediate cancellation. Record the necessary Journal entries on date of purchase. (3+3)
Q 13. Journalize the following transactions relating to realization expenses in connection with the dissolution of partnership of A and B.
(a) Realisation expenses Rs.2500.
(b) Realisation expenses Rs.2500 paid by B.
(c) B was asked to look after the dissolution work for which he was allowed a commission of Rs.2500.
(d) B to borne actual realisation expenses for which he will get Rs.2500. The actual expenses paid by B out of his private funds were Rs.1600.
(e) B agreed to take over the responsibility of completing the dissolution work at an agreed remuneration of Rs.1500 and to bear all realization expenses. Actual realisation expenses amounted to Rs.1000 were paid by the firm.
(f) An unrecorded computer realised Rs.7000. (6)
Q 14. From the following Receipts and Payment Accounts, prepare the final accounts of National club for the year ended 31st March, 2009: (6)
Receipts and Payments Account for the year ended 31.3.09
Receipts Amnt.(Rs.) Payments Amnt(Rs.)
Balance b/d 15000 Furniture 18000
Sale of old furniture(Book value Rs.6000) 4000 Library Books 10000
Subscription: Salaries 72000
2007-08 18000 General Expenses 18000
2008-09 60000 Electricity charges 12000
2009-10 12000 90000 Newspapers 33800
Sale of waste papers 5000 Postage 3000
Donations(General) 5800 Stationary 40000
Receipts From Advertisement 44000 Audit Fees 8000
Ground Rent 84000 Balance c/d 33000
2,47,800 2,47,800
Balance sheet as on 31st March 08
Liabilities Amt.(Rs.) Assets Amt.(Rs.)
Outstanding Salary 6000 Cash 15000
Capital Fund 6,94,000 Subscription Due 18000
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Library Books 30000
Furniture 37000
Land & Building 600000
7,00,000 7,00,000
Additional Information:-
(i) The club had 750 members each paying an annual subscription of Rs.100.
(ii) On 31st March, 2009 Salaries outstanding amounted to Rs.1200.
(iii) Provide 5% Depreciation on Land and Building.
Q 15. A and B are partners in a firm sharing profits in 2:1 ratio. They admitted C for 1/4th share in profits. C was to bring Rs.30000 as capital and capitals of A and B were to be adjusted in the profit sharing ratio on the basis of C’s capital. The Balance sheet of A and B as on 31st March 2009(before C’s admission) was as under: (8)
Liabilities Rs.(Amnt.) Assets Rs.(Amnt.)
Creditors 20,000 Cash 2,000
Bills Payable 19,000 Debtors 50,000
General Reserve 6,000 Stock 10,000
Capitals A/c’s Machinery 25,000
A 50000 Building 40,000
B 32000 82,000
1,27,000 1,27,000
Other terms of agreement were as under:
(i) C will bring Rs.12000 for his share of goodwill.
(ii) Building was valued at Rs.45000 and Machinery at Rs.23000.
(iii) A provision of Bad debts was created @ 6% on Debtors.
(iv) Capital Accounts of A and B were adjusted by opening current Accounts.
Prepare the Revaluation A/c, Partner’s capital A/c and Balance Sheet of A,B and COR
P,Q,R were partners in a firm sharing profits in the ratio of 3:2:1. On 31st March, 2009 Q retired from the firm. On the date of Q’s retirement the Balance Sheet of the firm was as follows:
Balance sheet of P,Q and R as on 31.3.09
Liabilities Amt.(Rs) Assets Amt.(Rs)
Creditors 27,000 Bank 27,600
Bills Payable 12,000 Debtors 6000
Outstanding Salary 2,200 Less Prov. 400 5,600
Provision for legal claims 6,000 Stock 9,000
Capital A/c’s: Furniture 4,100
P 46000 Premises 96,900
Q 30000
R 20000 96,000
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1,43,200 1,43,200
On Q’s retirement it was agreed that:
(i) Premises will be appreciated by 2% and furniture will be appreciated by Rs.1700. Stock will be depreciated by 10%.
(ii) 5% Provision for Doubtful Debts was to be made on Debtors and Rs.7200 for legal damages.
(iii) Goodwill of the firm was Valued at Rs.24000.
(iv) Rs.20000 from Q’s Capital Account will be transferred to his loan A/c and the balance will be paid to him by cheque.
Prepare the revaluation A/c’s, Partner’s Capital A/c and the Balance Sheet of P and Q after Q’s retirement.
Q 16. Seema Ltd. invited applications for issuing 2,00,000 Equity Shares of Rs.10 each at a premium of Rs.3 per share. The amount was payable as follows: (8)
On Application Rs.5 per Share (including premium)
On Allotment Rs.4 per share.
On First and Final calls- the balance.
Applications for 2,60,000 shares were received. Applications for 20,000 shares were rejected. To the remaining applicants shares were allotted on pro rata basis. Excess money received on applications was adjusted with sum due on allotment. All calls were made and were duly received except the First and Final calls of Mr. Sudhir who applied for 2400 shares. His shares were forfeited. The forfeited shares were reissued for Rs.28000 fully paid-up. Pass the necessary Journal entries for the above transactions in the books of the company.
OR
National Electronics Ltd. Issued 40000 Equity shares of Rs.50 each at a discount of 10%. On these shares payments are to be made as follows: Rs.15 on application, Rs.10 on Allotment(including discount) and Rs.25 on first and final calls. All the amounts have been received but Ashok who is the holder of 600 shares has not paid the first and final calls. Hence his shares have been forfeited. Pass the journal entries in the books of National Electronics Ltd.
PART – BAnalysisoffinancialStatement
Q 17. ‘Analysis of financial Statement ignores price level changes.’ Comment. (1)
Q 18. Dividend paid by a trading company is classified under which activity while preparing the cash flow Statement? (1)
Q 19. The current Ratio of a company is 2:1 state, giving reasons, which of the following would improve, reduce or not change the ratio: (1)
(i) Purchase of land by issuing debentures
(ii) Payment of outstanding liabilities.
Q 20. List any three items that can be shown as ‘contingent liabilities’ in the company’s Balance Sheet. (3)
Q 21. From the following information prepare a comparative Income statement of Blue Bell Ltd.(4)
Particulars 2007 2008
Sales(Rs.) 150% of cost of goods sold 200% of cost of goods sold
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Cost of goods sold 10,00,000 8,00,000
Indirect Expenses 5% of Gross profit 10% of Gross Profit
Rate of Income tax 50% of Net profit before tax 50% of Net profit before tax
Q 22. Calculate any two of the following ratio on the basis of information given below: (4)
(i) Liquid Ratio (ii) Proprietary Ratio (iii) Operating Ratio
Information:
Sales Rs.3,40,000; Cost of goods sold Rs.1,20,000; Selling Expenses Rs.80,000; Administrative Expens es Rs.40,000; Current Assets Rs.1,50,000; Current Liabilities Rs.1,05,000;Closing Stock Rs.10,000; Fixed Assets Rs.2,80,000; Equity Share Capital Rs.2,75,000 and General Reserve Rs.2,00,000.
Q 23. (a) From the following information, calculate Net cash Flow from Financing Activities:
(3+3)
Particulars 2006(Rs) 2007(Rs)
Equity share capital 4,00,000 5,00,000
10% Debentures 1,50,000 1,00,000
Securities Premium 40,000 50,000
Additional Information: Interest paid on debentures Rs.15,000.
(b) Following are the extract from the Balance sheet of XYZ Ltd.
Liabilities 31.3.06(Rs.) 31.3.07(Rs.) Assets 31.3.06(Rs.) 31.3.07(Rs.)
Profit & Loss A/c 1,60,000 2,00,000
Provision for tax 20,000 30,000
Additional Information: Tax paid during the year Rs.24,000. Show how the related items will appear while preparing the cash flow statement.
1. When the capital accounts of partners are fixed, they always show a Credit Balance. (1)
2. Goodwill cannot be seen or touched, it can only be felt. Hence it is treated as an intangible asset. But it is not a fictitious asset because it can be purchased or sold like any other asset. (1)
3. The gaining partner(s) should compensate the sacrificing partner(s). (1)
4. It will be added to capital fund on the liabilities side of the Balance Sheet. (1)
5. It is voluntary return of shares by a shareholder for the purpose of cancellation. (1)
6. Balance Sheet
Liabilities Rs. Assets Rs.
Environment fund 6,00,000Add: Donation received for Environment fund 75,000Add: Interest received 20,000Add: Accrued Interest 8,000Less: Expenses (1,50,000) 5,53,000
Environment fund InvestmentAccrued interest on Environment fund investment
4,00,0008,000
(3)
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7. (i) Journal Entries
Date Particulars L.F. Rs.(Dr.) Rs.(Cr.)
Bank A/c Dr.To Debenture application & allotment A/c(Being Debenture application money received)
8,00,000
8,00,000
Debenture application & allotment A/c Dr.Loss on issue of debenture A/c Dr. To 8% Debentures A/c To Premium on Redemption A/c(Being application money transferred to Debenture A/c.)
8,00,00040,000
8,00,00040,000
(ii)
Date Particulars L.F. Rs.(Dr.) Rs.(Cr.)
Bank A/c Dr. To Debenture application & allotment A/c(Being Debenture application money received)
8,40,000
8,40,000
Debenture application & allotment A/c Dr. To 8% Debentures A/c To Securities Premium A/c(Being application money transferred to Debenture A/c.)
8,40,0008,00,000
40,000
(iii)
Date Particulars L.F. Rs.(Dr.) Rs.(Cr.)
Bank A/c Dr. To Debenture application & allotment A/c(Being Debenture application money received)
8,40,0008,40,000
Debenture application & allotment A/c Dr.Loss on issue of debenture A/c Dr. To 8% Debentures A/c To Securities Premium A/c To Premium on Redemption A/c(Being application money transferred to Debenture A/c.)
8,40,00040,000
8,00,00040,00040,000
(1/2 x 6)
8. Journal Entries
Date Particulars L.F. Rs.(Dr.) Rs.(Cr.)
Assets A/c Dr. To Creditors A/c To B Ltd. (Being A ltd. took over the assets & liabilities of B ltd.)
10,00,000
1,00,0009,00,000
B Ltd. Dr. To Equity shares capital A/c To Securities Premium A/c(Being 7,200 shares issued to B Ltd. at premium)
9,00,000
7,20,0001,80,000
(1+2)
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9. Profits to be divided between X & Y = 30,400 – (20,000 x 6/100)
= 30,400 – 1,200
= 29,200
As the partnership deed is silent, the profits should be shared equally among the partners after deducting interest on partner’s loan @ 6% p.a.
X’s share of profit = 29,200/2 = Rs.14,600
Y’s share of profit = 29,200/2 = Rs.14,600 (3)
10. Under provisions of section 78 of Company’s Act 1956, the amount of securities premium may be used only for the following purposes:
(i) In writing off the preliminary expenses of the company
(ii) For writing off the expenses, commission or discount allowed on issue of shares or debentures of company
(iii) For issuing fully paid bonus shares to the shares holders of the company.
(iv) For buy back of its own shares (1 x 4)
11. Partners’ Capital A/c
Particulars A B Particulars A B
To cashTo balance c/d
24,00056,000
---84,000
By balance b/dBy cash
80,000---
60,00024,000
80,000 84,000 80,000 84,000
Journal Entries
Date Particulars L.F. Rs.(Dr.) Rs.(Cr.)
A’s capital A/c Dr. To cash A/c (Being cash withdrawn by A)
24,000
24,000
Cash A/c Dr. To B’s capital A/c(being cash brought in by B)
24,000
24,000
A’s new (adjusted) capital = (80,000 + 60,000) x 2/5 = 1,40,000 2/5 = 56,000
B’s new (adjusted) capital = (80,000 + 60,000) x 3/5 = 1,40,000 3/5 = 84,000 (2+2)
12. (a) Journal Entries
Date Particulars L.F. Rs.(Dr.) Rs.(Cr.)
Share Capital A/c Dr. To Share Forfeited A/c To Calls in Arrears A/c To Share Discount A/c (being shares forfeited)
1,000
200700100
Bank A/c Dr.Share Forfeited A/c Dr.Share Discount A/c Dr.To Share Capital A/c (being 80 shares reissued)
480 80 80
640
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Share Forfeited A/c Dr. To Capital Reserve A/c (being balance of shares forfeited A/c transferred to capital reserve A/c )
80
80
(b) Journal Entries
Date Particulars L.F. Rs.(Dr.) Rs.(Cr.)
1.10.07
Own Debentures A/c Dr. To bank A/c (being 300 own debentures purchased from open market for immediate cancellation)
27,900
27,900
12% Debentures A/c Dr. To Own Debentures A/c To profit on cancellation(being debentures cancelled )
30,000
27,900 2,100
Profit on cancellation A/c Dr. To Capital Reserve A/c (being profit on cancellation transferred to capital reserve A/c )
2,100
2,100
(3+3)13. Journal Entries
Date Particulars L.F. Rs.(Dr.) Rs.(Cr.)
(a)Realisation A/c Dr. To Bank A/c (being realisation expenses paid)
2,500
2,500
(b)Realisation A/c Dr. To B’s capital A/c (being realisation expenses paid by partner B)
2,500
2,500
(c )Realisation A/c Dr. To B’s capital A/c (being B was allowed commission)
2,500
2,500
(d)Realisation A/c Dr. To B’s capital A/c (being actual realization expenses were borne by B)
2,500
2,500
(e) i
Realisation A/c Dr. To B’s capital A/c (being remuneration allowed to B for dissolution proceedings)
1,500
1,500
iiB’s capital A/c Dr. To cash A/c (being actual realization expenses paid by the firm)
1,000
1,000
(f)Bank A/c Dr. To realization A/c (being unrecorded computer realized)
7,000
7,000
(1x6 = 6)
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14. Income & Expenditure A/c
For the year ending 31.03.08
Particulars Rs. Particulars Rs.
To salaries 72,000Less O/s (Beg.) 6,000Add O/s (End) 1,200To General expensesTo Electricity chargesTo NewspapersTo PostageTo StationeryTo Audit feesTo Depreciation on Land & Building To Loss on sale of furniture
67,20018,00012,00033,8003,000
40,0008,000
30,000
2,000
By Subscription 60,000Add: O/s (end) 15,000By sale of waste paperBy DonationsBy Receipts from advertisementBy Ground rentBy Deficit
75,0005,0005,800
44,00084,000
200
2,14,000 2,14,000
Balance Sheet
Liabilities Rs. Assets Rs.
Capital Fund 6,94,000Less deficit 200Outstanding salaryAdvance Subscriptions
6,93,8001,200
12,000
CashSubscription DueLibrary BooksFurnitureLand & Building 6,00,000Less: Dep. 30,000
33,00015,00040,00049,000
5,70,000
7,07,000 7,07,000
(6)
15. Revaluation A/c
Particulars Rs. Particulars Rs.
To MachineryTo Provision for doubtful debts
2,0003,000
By Buildings5,000
5,000 5,000
Partners’ Capital A/c
Particulars A B C Particulars A B C
To Current A/cTo balance c/d
2,00060,000
8,00030,000 30,000
By balance b/dBy cash A/c By premium A/c By Reserves
50,000
8,0004,000
32,000
4,0002,000
30,000
62,000 38,000 30,000 62,000 38,000 30,000
Balance Sheet
As on 1st April 2008
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Liabilities Rs. Assets Rs.
CreditorsBills PayableA’s capital B’s capital C’s capital A’s current A/cB’s current A/c
20,00019,00060,00030,00030,0002,0008,000
Cash (2000+30000+12000)Debtors 50,000 Less: Provision for doubtful debts 3,000Stock MachineryBuilding
44,000
47,00010,00023,00045,000
1,69,000 1,69,000
Working Notes:
C’s capital = 30,000
C’s share = ¼
Capital of the firm = 30,000 x 4/1 = 1,20,000
New profit sharing ratio = 2:1:1
A’s new capital = 1,20,000 x 2/4 = 60,000
B’s new capital = 1,20,000 x 1/4 = 30,000
C’s new capital = 1,20,000 x 1/4 = 30,000 (2+3+3)
OR
Revaluation A/c
Particulars Rs. Particulars Rs.
To StockTo provision for legal charges To profit transferred toP – 819Q – 546R - 273
9001,200
1,638
By Provision for doubtful debtsBy PremisesBy Furniture
1001,9381,700
3,738 3,738
Partners’ Capital A/c
Particulars P Q R Particulars P Q R
To Q’s capital To Q’s Loan A/c To Bank A/c
To balance c/d
12,000
34,819
20,00026,546
4,000
16,273
By balance b/d By revaluation ProfitBy P’s capital By R’s capital
46,000
819
30,000
54612,0004,000
20,000
273
46,819 46,546 20,273 46,819 46,546 20,273
Balance Sheet
As on 31.03. 2008
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Liabilities Rs. Assets Rs.
CreditorsBills PayableOutstanding salaryprovision for legal claims P’s capital R’s capital Q’s Loan A/c
27,00012,0002,2007,200
34,81916,27320,000
Bank (27,600 – 26,546) Debtors 6,000 Less: Provision for doubtful debts 3,00 Stock FurniturePremises
1,054
5,7008,1005,800
98,838
1,19,492 1,19,492
(2+3+3)
16. Journal Entries
Date Particulars L.F. Rs.(Dr.) Rs.(Cr.)
Bank A/c Dr. To Share application A/c(Being share application money received on 2,60,000 shares)
13,00,00013,00,000
Share Application A/c Dr. To Share Capital To Securities premium A/c To Share Allotment To Bank(Being application money transferred)
13,00,0004,00,0006,00,0002,00,0001,00,000
Share Allotment A/c Dr. To share capital A/c (Being allotment due on 2,00,000 shares )
8,00,0008,00,000
Bank A/c Dr. To share allotment A/c (Being allotment money received)
6,00,0006,00,000
Share First & final call A/c Dr. To share capital A/c (Being share first call due)
8,00,0008,00,000
Bank A/c Dr.Calls in arrears A/c Dr. To share first & final call (Being call money received )
7,92,0008,000
8,00,000
Share capital A/c Dr. To Share forfeiture A/c To Calls in arrears A/c(Being shares forfeited)
20,00012,0008,000
Bank A/c Dr. To Share capital A/c To securities premium A/c(Being shares reissued)
28,00020,0008,000
Share forfeited A/c Dr. To Capital Reserve A/c( Being share forfeited A/c transferred to capital reserve A/c)
12,00012,000
(1 x8 = 8)
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OR
Journal Entries
Date Particulars L.F. Rs.(Dr.) Rs.(Cr.)
Bank A/c Dr. To Share application A/c(Being share application money received on 40,000 shares)
60,000060,0000
Share Application A/c Dr. To Share Capital(Being application money transferred)
60,000060,0000
Share Allotment A/c Dr.Discount on shares A/c Dr. To share capital A/c (Being allotment due on 40,000 shares )
2,00,0002,00,000
4,00,000
Bank A/c Dr. To share allotment A/c (Being allotment money received)
2,00,0002,00,000
Share First & final call A/c Dr. To share capital A/c (Being share first call due)
10,00,00010,00,000
Bank A/c Dr.Calls in arrears A/c Dr. To share first & final call (Being call money received )
9,85,00015,000
10,00,000
Share capital A/c Dr. To Share forfeiture A/c To Calls in arrears A/c To Discount on shares A/c (Being shares forfeited)
30,00012,00015,0003,000
Bank A/c Dr.Discount on shares A/c Dr.Share forfeited A/c Dr. To Share capital A/c(Being shares reissued)
17,0002,0001,000
20,000
Share forfeited A/c Dr. To Capital Reserve A/c( Being share forfeited A/c transferred to capital reserve A/c)
7,0007,000
Calculation of capital reserve = 12,000 x 400/600 – 1,000 = 7,000 (1 x 8 = 8)
PART – B
17. Figures contained in financial statements do not show the affects of changes in the price level. As a result misleading picture may be obtained by making a comparison of figures of past year with current year figures. (1)
18. Financing Activity (1)
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19. (i) No change
(ii) Ratio will improve (1/2 x 2)
20. (i) Claim against the company not acknowledged as debt
(ii) Uncalled liability on shares partly paid
(iii) Arrears of fixed cumulative dividend (1x3)
21. Comparative Income Statement
Particulars 2007(Rs.) 2008(Rs.) Absolute change Percentage
SalesLess: Cost of goods sold
15,00,00010,00,000
16,00,0008,00,000
1,00,000(2,00,000)
6.6620
Gross profitLess: Indirect expenses
5,00,00025,000
8,00,00080,000
3,00,00055,000
60220
Net profit before taxLess: Tax payable
4,75,0002,37,500
7,20,0003,60,000
2,45,0001,22,500
51.551.5
Net profit after tax 2,37,500 3,60,000 1,22,500 51.5
(1x4)
22. (i) Liquid ratio = Liquid assets/current liabilities
= 1,50,000 – 10,000 / 1,05,000 = 1.3 : 1
(ii) Proprietary ratio = Share holders’ fund / Total assets
= 2,75,000+2,00,000 / 2,75,000+2,00,000+1,05,000
= 4,75,000 / 5,80,000 = 0.81 : 1
(iii) Operating Ratio = Cost of goods sold + operating expenses / Net sales x 100
= 1,20,000+80,000+40,000 / 3,40,000 x 100
= 2,40,000 / 3,40,000 x 100 = 70.5% (2+2)
23. (a) Cash flow from financing activities
Particulars Amount
Issue of Equity share capital ( with securities premium)Redemption of debenturesInterest paid on debentures
1,10,000(50,000)(15,000)
Cash flow from financing activities 45,000
(b) Provision for Tax A/c
Particulars Rs. Particulars Rs.
To cashTo balance c/d
24,00030,000
By balance b/dBy P & L A/c
20,00034,000
54,000 54,000
Net profit during the year = 40,000
Add: Tax made during the year = 34,000
N/P before tax = 74,000 (3+3)