CBSE Class 12 Accountancy

Revised Datesheet 2021

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CBSE Class 12 Accountancy
Sample Paper 01 (2020-21)

Maximum Marks: 80
Time Allowed: 3 hours

General Instructions:

  1. This question paper comprises two Parts – A and B. There are 32 questions in the question paper. All questions are compulsory.
  2. Part A is compulsory for all candidates.
  3. Part B has two options i.e. (1) Analysis of Financial Statements and (2) Computerized Accounting. You have to attempt only one of the given options.
  4. Question nos. 1 to 13 and 23 to 29 are very short answer type questions carrying 1 mark each.
  5. Question nos. 14 and 30 are short answer type–I questions carrying 3 marks each.
  6. Question nos. 15 to 18 and 31 are short answer type–II questions carrying 4 marks each.
  7. Question nos. 19, 20 and 32 are long answer type–I questions carrying 6 marks each.
  8. Question nos. 21 and 22 are long answer type–II questions carrying 8 marks each.
  9. There is no overall choice. However, an internal choice has been provided in 2 questions of three marks, 2 questions of four marks and 2 questions of eight marks.

  1. Section A
  2. In the absence of a Partnership deed profit sharing ratio will be:
    1. Equal ratio irrespective of partners capitals
    2. Senior partner will get more profit
    3. Profits will not be distributed
    4. Capital Ratio
  3. If a new partner is admitted during the year the profits for the year should be divided between ________ period on an agreed basis.
    1. Equal
    2. Pre-admission and post-admission
    3. New year basis
    4. Old profit sharing
  4. Shareholders are members of the company. Company pay shareholders some amount. What is paid to the Shareholders?
    1. Dividend
    2. Interest
    3. Salary
    4. Debentures
  5. Specific donation is shown in
    1. Trading account
    2. Receipt and payment account
    3. Income and expenditure account
    4. Balance sheet
  6. Unrecorded liability will be shown in:
    1. Debit side of partners’ capital A/c
    2. Debit side of Realisation A/c
    3. Credit side of Realisation A/c
    4. Debit side of cash A/c
  7. At the time of forfeiture of shares, with what amount share capital account will be debited, if shares of Rs.20 on which Rs.16 called and Rs.12 is paid and is forfeited?
    1. 20
    2. 16
    3. 08
    4. 12
  8. At the time of dissolution, a partner cannot take over ________.
    1. Capital of another partner
    2. Liability
    3. Unrecorded assets or liabilities
    4. Asset
  9. When revaluation account is prepared the assets and liabilities appear in the balance sheet of the new firm at their ________ figure.
    1. Market
    2. Old
    3. Revised
    4. Place
  10. On the death of a partner, the amount due to him will be credited to his ________ Account.
  11. Existing Goodwill shown in the balance sheet is debited to the partners at the time of retirement in which ratio.
    1. Old Ratio
    2. Equal Ratio
    3. Gain Ratio
    4. New Ratio
  12. A partner which was retired is not liable for any debts incurred by the firm ________ his retirement.
    1. During
    2. Before
    3. After
    4. All after, during and before
  13. ________ goodwill should not be recognized as an asset because it is not an identifiable resource controlled by an enterprise that can be measured reliably at cost.
    1. Both Purchased and Capitalised value of
    2. Purchased
    3. Capitalised value of
    4. Internally generated
  14. From the following, identify a situation when fixed capitals of the partners may change?
    1. When drawings are made by the partners
    2. When current accounts are opened
    3. When there is a loss in the business
    4. When additional capital is introduced
  15. Prepare Income and Expenditure Account and Balance Sheet for the year ended March 31, 2017, from the following Receipt and Payment Account and Balance Sheet of Solter club:Receipt and Payment Account for the year ending March 31, 2017
    Receipts Amount (Rs) Payments Amount (Rs)
    To Opening cash balance 12,000 By Furniture 4,000
    To Subscription By Telephone expenses 800
    2015-16 2,000 By Salary
    2016-17 22,000 24,000 2015-16 1,000
    To Entrance fees 2,800 2016-17 4,000
    To Locker rent 1,000 By Newspapers 700
    To Life membership fee 1,200 By Sundry expenses 1,000
    To Government grant 11,000 By Defence bonds 18,000
    By Land 20,000
    By Closing cash balance 2,500
    52,000 52,000

    Balance Sheet for the year ending March 31, 2016

    Liabilities Amount (Rs) Assets Amount (Rs)
    Advance locker rent 200 Cash in hand 12,000
    Subscription received in Advance 1,000 Outstanding subscription 3,000
    Outstanding salary 2,000 Building 35,000
    Loan 10,000
    Capital fund 36,800
    50,000 50,000

    OR

    From the following information of a club, show the amounts of match expenses and match fund in the financial statements of the club for the year ended on 31st March 2016

    Amt (Rs.)
    March expenses (paid during the year 2015-2016) 30,000
    Match fund (as at 31st March 2015) 17,000
    Donation for match fund (received during the year 2015-16) 9,000
    Receipt from the sale of match tickets ( received during the year 2015-2016) 3,000
  16. The capital accounts of Molu and Golu showed balances of Rs 40,000 and Rs 20,000 as on April 01, 2016. They shared profits in the ratio of 3:2. They were allowed interest on capital @ 10% p.a. and interest on drawings @ 12%p.a. Golu advanced a loan of Rs 10,000 to the firm on August 01, 2016. During the year, Molu withdrew Rs 1,000 per month at the beginning of every month whereas Golu withdrew Rs 1,000 per month at the end of every month. Profit for the year, before the above-mentioned adjustments, was Rs 20,950. Calculate interest on drawings, show distribution of profits and prepare partner’s capital accounts.ORPappu and Munna are partners in firm sharing profits in the ratio of 3: 2. The Partnership Deed provided that Pappu was to be paid salary of Rs 2,500 per month and Munna was to get a commission of Rs 10,000 per year. Interest on capital was to be allowed @ 5% p.a. and interest on drawings was to be charged @ 6% p.a. Interest on Pappu’s drawings was? 1,250 and on Munna’s drawings Rs 425. Capital of the partners was Rs 2,00,000 and Rs 1,50,000 respectively and was fixed. The firm earned a profit of Rs 90,575 for the year ended 31st March 2004. Prepare the Profit and Loss Appropriation Account of the firm.
  17. Complete the missing figures in the following Extract of Balance Sheet:Morning Stores Ltd.
    Balance Sheet (Extract) as at…

    Particulars Note No. (Rs.)
    Equity And Liabilities
    1. Shareholders’ Funds
    Share Capital
    1 —-
    —-

    Notes to Accounts

    Share Capital
    Authorised Capital
    4,00,000 Equity Shares of Rs. 10 each —-
    10,000 Preference Shares of Rs. 100 each —-
    —-
    Issued Capital
    3,00,000 Equity Shares of Rs. 10 each
    10,000; 10% Preference Shares of Rs. 100 each
    Subscribed Capital
    Subscribed and fully paid-up.
    2,50,000 Equity Shares of Rs. 10 each
    Subscribed but not fully paid-up
    10,000; 10% Preference Shares of Rs. 100 each; Rs. 80 called-up
  18. Balance Sheet of a firm as at 31st March 2019, when it was decided to dissolve the same, was
    Liabilities Rs. Assets Rs.
    Sundry Creditors 14,000 Cash at Bank 640
    General 500 Stock 4,740
    Capital Accounts X 4,000 Debtors 5,540
    Y 3,000 7,000 Machinery 10,580
    21,500 21,500

    Rs. 19,500 were realised from all assets except Cash at Bank. The cost of winding up came to Rs. 440, X and Y shared profits in the ratio of 2 : 1 respectively. Prepare Realisation A/c and Capital Accounts of partners.

  19. Prem, Param and Priya were partners in a firm. Their fixed capitals were Prem Rs 2,00,000; Param Rs 3,00,000 and Priya Rs 5,00,000. They were sharing profits in the ratio of their capitals. The firm was engaged in the sale of ready-to-eat food packets at three different locations in the city, each being managed by Prem, Param and Priya. The outlet managed by Prem was doing more business than the outlets managed by Param and Priya.
    Prem requested Param and Priya for a higher share in the profits of the firm which Param and Priya accepted. It was decided that the new profit sharing ratio will be 2:1:2 and its effect will be introduced retrospectively for the last four years. The profits of the last four years were Rs 2,00,000, Rs 3,50,000, Rs 4,75,000 and Rs 5,25,000 respectively.
    Showing your calculations clearly, pass a necessary adjustment entry to give effect to the new agreement between Prem, Param and Priya.
  20. Following is the Receipts and Payments Account of Women Club for the year ended March 31, 2015. Prepare the Income and Expenditure A/C for the year ended on March 31, 2015, and also the Balance Sheet as on the date:
    Receipts Amount Payments Amount
    To Balance b/d 28,260 By Rent & Taxes 17220
    To Entrance Fees 11,040 By Salaries 18,800
    To Subscriptions 44,000 By Electricity Charges 840
    To Donations 21,220 By General Expenses 2,500
    To Interest 820 By Books 6,240
    To Profit from Entertainment 1,640 By Office Expenses 9,000
    By Investments 28,000
    By Balance c/d 24,380
    1,06,980 1,06,980

    Additional Information:

    1. In the beginning of the year, the club had books worth Rs. 60,000 and Furniture worth Rs. 11,600.
    2. Subscription in arrears on April 1, 2014, were Rs. 1,200 and on March 31, 2015 Rs. 1,400.
    3. Write off Rs. 1,000 as depreciation on Furniture and Rs. 6,000 on Books.
    4. On March 31, 2015 Salaries Rs. 3,000 and Electricity Charges Rs. 4,000 were outstanding.
  21. Rose Ltd. issued 10,000, 10% Debentures of ₹100 each, payable as follows :
    ₹10 on the application, ₹20 on the allotment, ₹30 on the first call and ₹40 on second and final call.
    Arun, who holds 500 debentures failed to pay the amount due on allotment. He, however, pays this amount with the first call money. Dinesh, who holds 800 debentures paid all the calls in advance on the allotment. Pass entries.
  22. Pradip and Subal are partners sharing profits and losses in the ratio of 5 : 3 agreed to take Kuntal on Jan. 1, 1991. Their Balance Sheet on that date was as follows :
    Liabilities (Rs) Assets (Rs)
    Capital Accounts: Machinery 38,000
    Pradip 60,000 Furniture 15,000
    Subal 40,000 1,00,000 Investments 21,000
    Profit and Loss A/c 20,000 Stock 19,000
    Sundry Creditors 18,000 Sundry Creditors 27,000
    Less: Provision 3,000 24,000
    Cash at Bank 21,000
    1,38,000 1,38,000

    The following terms were agreed upon for the purpose of admission :

    1. Kuntal introduced Rs 38,000 as his Capital and necessary amount of Premium for Goodwill in cash. Goodwill valued for the said purpose Rs 45,000.
    2. 1/3rd of the Provision for Doubtful Debts is no longer required.
    3. Machinery and Furniture were depreciated by 5% and 10% respectively.
    4. Last year’s showroom rent for 4 months @ Rs 1,000 p.m. not taken into account and as such it is to be considered now.

    The profit sharing ratio of the partners in the new firm is 4 : 3 : 2.
    Give the necessary Ledger accounts of the new firm.OR

    The Balance Sheet of X and Y As on 31st March, 2021

    Liabilities Rs. Assets Rs.
    Capitals: Land 20000
    X 60000 Furniture 6000
    Y 30000 90000 Stock 12000
    General Reserve 24000 Debtors 80000
    Creditors 16000 Cash 12000
    130000 130000

    X and Y share profit in the ratio of 2:1. They agree to admit P into the firm on the following terms:

    1. P will bring in Rs. 21000 of which Rs. 9000 will be treated as his share of goodwill.
    2. P will be entitled to 1/4th share of profit in future.
    3. A provision is to be created @3% against Debtors.
    4. Furniture is to be depreciated by 5%.
    5. Stock is to be revaluing at Rs. 10500

    Prepare Revaluation Account, Partner’s Capital Account of the new firm.

  23. RK Ltd invited applications for issuing 70,000 equity shares of Rs. 10 each at a premium of Rs. 35 per share. The amount was payable as follows
    On application – Rs. 15 per share (including Rs. 12 premium)
    On Allotment – Rs. 10 per share (including Rs. 8 premium)
    On first and final call – Balance
    Applications for 65,000 shares were received and allotment was made to all applicants. A shareholder Ram, who was allotted 2,000 shares, failed to pay the allotment money. His shares were forfeited immediately after allotment. Afterwards, the first and final call was made. Sohan, who had 3,000 shares, failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares 4,000 shares were re-issued @ Rs. 50 per share fully paid-up. The reissued shares included all the shares of Ram. Pass necessary journal entries for the above transactions in the books of RK Ltd.ORPrakash Engineering Company issued for public subscription 40,000 Equity shares of Rs 10 each at a premium of Rs 2 per share, payable as: on application Rs 2 per share
    on allotment Rs 5 per share (including premium)
    on first call Rs 2 per share
    on final call Rs 3 per share
    Applications were received for 75,000 Equity Shares. The shares were allotted on pro-rata basis to the applicants of 60,000 shares only, remaining applications being rejected. Money overpaid on an application was utilised towards the sum due on allotment.
    Ashok to whom 3,000 shares were allotted failed to pay the allotment money and the two calls. Baneet who applied for 3,000 shares paid the calls money along with allotment money. Pass journal entries to record the above transactions.
  24. Section B
  25. For purpose of preparing a cash flow statement, which of the following is not considered as a cash equivalent?
    1. An investment in Bonds
    2. Marketable securities
    3. Commercial paper
    4. Treasury Bills
  26. State two Current Assets, which are not considered to be Liquid Assets.
  27. Analysis of Financial statements suffers from the limitation of window dressing which means….
    1. All of these
    2. may overvalue closing stock to show higher profits
    3. hide some vital information
    4. show items at incorrect value to portray better profitability
  28. A Ltd. engaged in the business retailing of Air-Conditioners, invested Rs. 25, 00,000 in the shares of a manufacturing company. Dividend received on this investment will be:
    1. Cash flow from investing activities
    2. Cash flow from operating activities
    3. Cash Equivalent
    4. Cash flow from financing activities
  29. Fill in the blanks:A ________ asset arises when Accounting Income is less than Taxable income.
  30. The Current Ratio of Vinod Limited is 2:1. The company purchased a Computer by paying cash for office use. What will be the effect on Ratio?
    1. Increase
    2. Decrease
    3. No change
    4. Nil
  31. A high Debt to Equity Ratio means…….
    1. The firm has no debts at all
    2. The firm depends upon Equity only
    3. The firm is free from debts
    4. The firm depends upon borrowings/debts
  32. From the following compare Current Ratio:
    S.No. Items (Rs.) S.No. Items (Rs.)
    1. Total Assets 1,00,000 3. Non – Current Liabilities 20,000
    2. Shareholder’s Funds 60,000 4. Non – Current Assets 50,000

    OR

    On basis of the following information, calculate

    1. Debt equity ratio
    2. Working capital turnover ratio
    information Amt (Rs.)
    Revenue from operations 60,00,000
    Cost of revenue operations 45,00,000
    Other current assets 11,00,000
    Current liabilities 4,00,000
    Paid-up share capital 6,00,000
    6% debentures 3,00,000
    9% loan 1,00,000
    Debenture redemption reserve 2,00,000
    Closing inventory 1,00,000
  33. Prepare Comparative and Common Size income statement from the following information for the year‘s ended March 31, 2008, and 2009.
    Particulars 2008 (Rs.) 2009 (Rs.)
    1.Net Sales 8,00,000 10,00,000
    2.Cost of Goods Sold 60% of sales 60% of sales
    3.Indirect Expenses 10% of Gross profit 10% of Gross Profit
    4.Income Tax rate 50% 60%

    OR

    Prepare a Comparative Statement of Profit and Loss from the following information:

    Particulars 31st March 2013 (Rs.) 31st March 2012 (Rs.)
    Revenue from Operations 200% of Raw Materials Consumed 175% of Raw Materials Consumed
    Expenses:
    Cost of Materials Consumed 5,00,000 3,00,000
    Other Expenses 5% of Revenue from operations 5% of Revenue from Operations
    The rate of Income-tax 50% of Net Profit before Tax 50% of Net Profit before Tax
  34. Following is the balance sheet of Wisben Ltd as on 31st March 2012.
    Particulars Note No. 2012 Amt (Rs.) 2011 Amt (Rs)
    I. EQUITY AND LIABILITIES
    l. Shareholders’ Funds
    (a) Share Capital 7,00,000 6,00,000
    (b)Reserves and Surplus (Balance m statement of profit and loss) 2,00,000 1,10,000
    2.Non-current Liabilities
    Long-term Borrowings 3,00,000 2,00,000
    3.Current Liabilities
    Trade Payables 30,000 25,000
    Total 12,30,000 9,35,000
    II. ASSETS
    1.Non-current Assets
    Fixed Assets
    Tangible Assets 11,00,000 8,00,000
    2.Current Assets
    (a) Inventories 70,000 60,000
    (b) Trade Receivable 32,000 40,000
    (c)Cash and Cash Equivalents 28,000 35,000
    Total 12,30,000 9,35,000

    Additional Information:
    During the year, a piece of machinery of the book value of Rs. 80,000 was sold for Rs.65,000.
    Depreciation provided on tangible assets during the year amounted to Rs. 2,00,000.
    Prepare a cash flow statement.

CBSE Class 12 Accountancy
Sample Paper 01 (2020-21)


Solution

  1. Section A
  2. (a) Equal ratio irrespective of partners capitals
    Explanation: When there is no Partnership deed or Partnership deed is prepared but it is silent on profit sharing ratio, in such case rules of Indian Partnership Act, 1932 will be applicable. According to which, profits or losses will be shared by the partners equally irrespective of their capitals. we can say Profit sharing ration will be Equal.
  3. (b) Pre-admission and post-admission
    Explanation: When a new partner is admitted in a partnership firm during the year (in between) in such a case profit for that year should be divided into two parts i.e. Pre-admission and post-admission profit. Pre-admission profit belongs to the old partners in the old ratio only and post-admission profit will be shared by all the partners (including new partner) in the new profit sharing ratio.
  4. (a) Dividend
    Explanation: The dividend is paid to the shareholders. The dividend is paid to the shareholder in return to their capital subscribed in the company.
    Interest is paid to the Debenture holders.
  5. (d) Balance sheet
    Explanation: Donation received for any specific purpose is called specific donation which is to be shown in the liability side of a balance sheet of a non-profit organisation.
  6. (b) Debit side of Realisation A/c
    Explanation: Any unrecorded liability (which is not given in the balance sheet or which was not recorded earlier) will be shown on the debit side of realization account. It will be paid by the firm at the time of dissolution or might be paid by a partner.
    Entry will be:
    Realisation A/c … Dr.
    To Bank A/c
  7. (b) 16
    Explanation: Share Capital account will be debited with ₹16
    Since till now called up the price on Share is Rs 16.
    Share capital account should be debited with the called up amount and not with the face value or paid-up amount.
    Share forfeiture account is credited with the unpaid amount.
  8. (a) Capital of another partner
    Explanation: At the time of dissolution of partnership firm, a partner may take asset, liability or unrecorded assets/liability at the agreed price but cannot take the capital of any other partner.
  9. (c) Revised
    Explanation: The balance sheet is prepared with the new values of assets and liabilities. At the time of reconstitution of partnership firm, all assets and liabilities are shown at a revised value.
  10. Executor’s
  11. (a) Old Ratio
    Explanation: At the time of retirement, goodwill given in the balance sheet (Fictitious) should be debited to the partners in their old profit sharing ratio (including the outgoing partner). Such distribution is called writing off the goodwill.
  12. (c) After
    Explanation: Once a partner retires from a partnership firm, he will not be liable for any debt or liability of the firm due after his retirement as he is no longer a partner now in the firm. He is responsible for the debts and other liabilities up to the date of his retirement only and not after that.
  13. (d) Internally generated
    Explanation: As per the Accounting Standard-26 issued by ICAI regarding intangible assets, goodwill should be recorded in the books of accounts only when some money or money’s worth is paid for it. Internally generated goodwill should not be recorded in the books because nothing is paid for It.
  14. (d) When additional capital is introduced
    Explanation: Fixed capitals of the partners will remain fixed but there are two situations when fixed capitals of the partners may change:

    1. When additional capital is introduced by the partners
    2. When capital is withdrawn permanently under an agreement. (Amount Withdrawn out of Capital)
  15. Books of Solter Club
    Income and Expenditure Account

    for the year ending on March 31, 2017

    Dr. Cr.
    Expenditure Amount (Rs) Income Amount (Rs)
    To Telephone Expenses 800 By Subscription 22,000
    To Salary 4,000 Add: Advance Received in 2015 1,000 23,000
    To Newspapers 700 By Entrance Fees 2,800
    To Sundry Expenses 1,000 By Locker Rent 1,000
    To Surplus (Balancing figure) 31,500 Add: Advance Received in 2015 200 1,200
    (excess of income over expenditure) By Government Grants 11,000
    38,000 38,000

    Balance Sheet of Solter Club
    as of March 31, 2017

    Liabilities Amount (Rs) Assets Amount (Rs)
    Capital Fund 36,800 Subscription Still Outstanding for 2015 (Rs 3,000 – Rs 2,000) 1,000
    Add: Life Membership Fees 1,200 Furniture 4,000
    Add: Surplus 31,500 69,500 Defense Bonds 18,000
    Salary Still Outstanding for 2015 1,000 Land 20,000
    Loan 10,000 Building 35,000
    Cash in Hand 2,500
    80,500 80,500

    OR

    Dr. Match Fund Account Cr.
    Particulars J.F. Amt. (Rs.) Particulars J.F. Amt. (Rs.)
    To Match Expenses 30,000 By Balance b/d 17,000
    By Donation for Match Fund 9,000
    By Receipts from Sale of Match Tickets 3,000
    By Income and Expenditure A/c 1,000
    30,000 30,000

    Expenses on account of a match exceed the balance in match fund by Rs.1000. This amount will be debited to income and expenditure account.

  16. Profit and Loss Appropiation Account
    Dr. Cr.
    Particulars Amount (₹) Particulars Amount (₹)
    To Interest on Capital By Profit and Loss Account (Net profit)
    (20950 – 400), Interest on Golu’s loan
    {10,000 ×× (6/100) ×× (8/12)
    20,550
    Molu 4,000 By Interest on Drawings
    Golu 2,000 6,000 Molu 780
    Golu 660 1,440
    To Profit transferred to
    Molu’s Capital {15,990 ×× (3/5)} 9,594
    Golu’s Capital {15,990 ×× (2/5)} 6,396 15,990
    21,990 21,990
    Partners’ Capital Account
    Dr. . Cr.
    Particulars Molu (₹) Goli (₹) Particulars Molu (₹) Golu (₹)
    To Drawings 12,000 12,000 By Balance b/d 40,000 20,000
    To Interest on Drawing 780 660 By Interest on Capital 4,000 2,000
    To Balance c/d 40,814 15,736 By Profit and Loss Appropriation 9,544 6,396
    53,594 28,396 53,594 28,396

    Working Note:
    Interest on Molu’s Drawing = Total Drawings ×  Rate 100×132×12 Rate 100×132×12
    12,000×12100×132×1212,000×12100×132×12
    = ₹ 780
    Interest on Golu’s Drawings = Total Drawing ××  Rate 100×112×12 Rate 100×112×12
    12,000×12100×112×1212,000×12100×112×12
    = ₹ 660OR

    The profit and loss appropriation account is an extension of the profit and loss account. The main intention of preparing a profit and loss appropriation account is to show the distribution of profits among the partners.

    Profit and Loss Appropriation Account
    for the year ended 31st March 2004

    Dr. Cr.
    Particulars (Rs) Particulars (Rs)
    To Pappu’s Salary 30,000 By Net Profit as per Profit and Loss A/c 90,575
    To Munna’s Commission 10,000 By Interest on Drawings:
    To Interest on Capitals: Pappu 1,250
    Pappu 10,000 Munna 425 1,675
    Munna 7,500 17,500
    To Profit transferred to:
    Pappu’s Current A/c 20,850
    Munna’s Current A/c 13,900 34,750
    92,250 92,250
  17. Morning Stores Ltd.
    Balance Sheet (Extract) as at…

    Particulars Note No. (Rs.)
    Equity And Liabilities
    1. Shareholders’ Funds
    Share Capital
    1 33,00,000
    33,00,000

    Notes to Accounts

    Share Capital
    Authorised Capital
    4,00,000 Equity Shares of Rs. 10 each 40,00,000
    10,000 Preference Shares of Rs. 100 each 10,00,000
    50,00,000
    Issued Capital
    3,00,000 Equity Shares of Rs. 10 each 30,00,000
    10,000; 10% Preference Shares of Rs. 100 each 10,00,000
    40,00,000
    Subscribed Capital
    Subscribed and fully paid-up.
    2,50,000 Equity Shares of Rs. 10 each
    25,00,000
    Subscribed but not fully paid-up
    10,000; 10% Preference Shares of Rs. 100 each; Rs. 80 called-up
    8,00,000
    33,00,000
  18. Realisation Account
    Particulars Rs. Particulars Rs.
    To Sundry Assets By Sundry Creditors 14,000
    Machinery 10,580 By Bank A/c (Assets Realised) 19,500
    Stock 4,740 By Loss Transferred:
    Debtors 5,540 20,860 X 1,200
    To Bank A/c 14,000 Y 600 1,800
    Expenses 440 14,440
    35,300 35,300

    Partners Capital Accounts

    Particulars A (Rs.) B (Rs.) Particulars A (Rs.) B (Rs.)
    To Realisation – Loss 1,200 600 By Balance b/d 4,000 3000
    To Realisation A/c 3,133 2,567 By Reserve 333 167
    4,333 3,167 4,333 3,167
  19. Journal
    Particulars LF Dr. Cr.
    Param’s Capital A/c……Dr. 155000
    Priya’s Capital A/c……Dr. 155000
    To Prem’s Capital A/c 310000
    (Being Profit adjusted from old to new ratio.)

    Statement showing the distribution of profit

    Ratio Prem Param Priya Total
    Previous Ratio 2:3:5 310000 Dr. 465000 Dr. 775000 Dr. 1550000 Cr.
    New Ratio 2:1:2 620000 Cr. 310000 Cr. 620000 Cr. 1550000 Dr.
    310000 Cr. 155000 Dr. 155000 Dr.

    Total Profit = 200000 + 350000 + 475000 + 525000 = 1550000

  20. Balance Sheet
    as on 31st March, 2014

    Liabilities Amount Assets Amount
    Cash 28,260
    Subscriptions Outstanding 1,200
    Capital Fund (Bal. Fig.) 1,01,060 Books 60,000
    Furniture 11,600
    1,01,060 1,01,060

    Income & Expenditure A/C
    For the year ended on March 31, 2015

    Expenditure Amount Income Amount
    To Rent & Taxes 17,220 By Subscription 44,000
    To Salaries 18,800 Add: Outstanding (End) 1,400
    Add: Outstanding 3,000 21,800 45400
    To Electricity Charges 840 Less: Outstanding (Beginning) 1,200 44,200
    Add: Outstanding 400 1,240 By Entrance Fees 11,040
    To General Expenses 2,500 By Donations 21,220
    To Office Expenses 9,000 By Interest 820
    To Depreciation on: By Profit from Entertainment 1,640
    Books 6,000
    Furniture 1,000 7,000
    To Surplus 20,160
    78,920 78,920

    Balance Sheet
    as on 31st March 2015

    Liabilities Amount Assets Amount
    Capital Fund 1,01,060 Cash 24,380
    Add: Surplus 20,160 1,21,220 Subscriptions o/s 1,400
    Salaries outstanding 3,000 Furniture 11,600
    Electricity charges outstanding 400 Less Depreciation 1,000 10,600
    Book 60,000
    Add Addition 6,240
    Less Depreciation 6,000 60,240
    Investments 28,000
    Total 1,24,620 Total 1,24,620
  21. JOURNAL OF ROSE LTD.
    Date Particulars L.F. Dr. (₹) Cr. (₹)
    1. Bank A/c Dr. 1,00,000
    To 10% Debentures Application A/c 1,00,000
    (Application money received on 10,000 debentures @ ₹10 per debenture)
    2. 10% Debenture Application A/c Dr. 1,00,000
    To 10% Debenture A/c 1,00,000
    (Application money transferred)
    3 10% Debenture Allotment A/c Dr. 2,00,000
    To 10% Debenture A/c 2,00,000
    (Allotment due)
    4 Bank A/c Dr. 2,46,000
    To 10% Debenture Allotment A/c 1,90,000
    To Calls in Advance A/c 56,000
    (Allotment money received on 9,500 debentures @20 per debenture; plus call received in advance on 800 debentures @ ₹70 per debenture)
    5 10% Debentures First Call A/c Dr. 3,00,000
    To 10% Debentures A/c 3,00,000
    (First call due on 10,000 debentures @ ₹30 each)
    6. (i) Bank A/c Dr. 2,76,000
    Calls in Advance A/c 24,000
    To 10% Debentures First Call A/c 3,00,000
    (First, call money received after adjusting the advance of first call @ ₹30 per debenture on 800 debenture of Dinesh)
    (ii) Bank A/c Dr. 10,000
    To 10% Debentures Allotment A/c 10,000
    (Receipt of arrears of allotment in respect of 500 debentures)
    7. 10% Debenture Second & Final Call A/c Dr. 4,00,000
    To 10% Debentures A/c 4,00,000
    (Second and final call due on 10,000 debentures @₹40 per debenture)
    8. Bank A/c Dr. 3,68,000
    Call in Advance A/c Dr. 32,000
    To 10% Debentures Second & Final Call A/c 4,00,000
    (Second call money received after adjusting the advance of second call @ ₹40 per debenture on 800 debentures of Dinesh)
  22. Books of Pradip, Subal and Kuntal
    Revaluation 
    Account

    Dr. Cr.
    Particulars (Rs) Particulars (Rs)
    To Machinery 1,900 By Provision for Doubtful Debts 1,000
    To Furniture 1,500 By Loss on Revaluation:
    To Outstanding Rent 4,000 Pradip (6,400 x 5/8) 4,000
    Subal (6,400 x 3/8) 2,400 6,400
    7,400 7,400

    Capital Accounts

    Dr. Cr.
    Particulars Pradip
    (Rs)
    Subal
    (Rs)
    Kuntal
    (Rs)
    Particulars Pradip
    (Rs)
    Subal
    (Rs)
    Kuntal
    (Rs)
    To Loss on Revaluation (5:3) 4,000 2,400 By Balance b/d 60,000 40,000
    By Profit and loss (5:3) 12,500 7,500
    By Bank 48,000
    To Balance c/d 76,625 46,975 48,000 By Goodwill A/c (13 : 3) 8,125 1,875
    80,625 49,375 48,000 80,625 49,375 48,000

    Balance Sheet
    as at 1st Jan, 1990

    Liabilities (Rs) Assets (Rs)
    Capital Accounts: Machinery (38,000 – 1,900) 36,100
    Pradip 76,625 Furniture (15,000 -1,500) 13,500
    Subal 46,975 Investments 21,000
    Kuntal 48,000 1,61,000 Stock 19,000
    Sundry Creditors 18,000 Sundry debtors 27,000
    Outstanding Rent 4,000 Less: Provision for Doubtful Debts 2,000 25,000
    Cash at Bank (21,000 + 48,000 + 10,000) 79,000
    1,93,600 1,93,600

    Working Notes:
    Calculation of Sacrificing Ratio of Pradip and Subal :

    Sacrificing ratio = Old profit sharing Ratio – New profit Sharing Ratio
    Pradip’s sacrificing Ratio = 5/8 – 4/9 = 45/72 – 32/72 = 13/72.
    Subal’s sacrificing Ratio = 3/8 – 3/9 = 27/72 – 24/72 = 3/72
    Therefore, sacrificing ratio = 13 : 3.

    Kuntal’s share of Premium for Goodwill :
    Kuntal’s share of profit is 2/9 Hence, his share of Premium for Goodwill = Rs 45,000 ×× 2/9 = Rs 10,000.
    Pradip’s share in goodwill = 10,000 x 13/16 = 8,125.
    Subal’s share in goodwill = 10,000 x 3,16 = 1,875.

    OR

    Revaluation Account

    Particulars Rs. Particulars Rs.
    To Provision 1700 By Loss Transfer:
    To Furniture 2100 X 2800
    To Stock 1500 Y 1400 4200
    4200 4200

    Partner’s Capital Accounts

    Particulars X Y P Particulars X Y P
    To Revaluation 2800 1400 By Balance b/d 60000 30000
    To Balance c/d 79200 39600 12000 By Cash 12000
    By Premium for goodwill 6000 3000
    By General Reserve 16000 8000
    82000 41000 12000 82000 41000 12000

    Balance Sheet

    Liabilities Rs. Assets Rs.
    Capitals: Land 20000
    X 79200 Furniture 5700
    Y 39600 Stock 10200
    P 12000 130800 Debtors 80000
    Creditors 16000 Less: Provision 2400 77600
    Cash 33000
    146800 146800
  23. JOURNAL
    Date Particular L.F. Amt. (Dr) Amt. (Cr)
    Bank A/c (65,000 ×× 15) Dr. 9,75,000
    To Equity Share Application A/c 9,75,000
    (Being application money received.)
    Equity Share Application A/c Dr. 9,75,000
    To Equity Share Capital A/c (65,000 ×× 3) 1,95,000
    To Securities Premium Reserve A/c (65,000 ×× 12) 7,80,000
    (Being application money transferred.)
    Equity Share Allotment A/c Dr. 6,50,000
    To Equity Share Capital A/c (65,000 ×× 2) 1,30,000
    To Securities Premium Reserve A/c (65,000 ×× 8) 5,20,000
    (Being share allotment money due.)
    Bank A/c Dr. 6,30,000
    To Equity Share Allotment A/c 6,30,000
    (Being allotment money received.)
    Equity Share Capital A/c (2,000 ×× 5) Dr. 10,000
    Securities Premium Reserve A/c (2,000 ×× 8) Dr. 16,000
    To Equity Share Allotment A/c (2,000 ×× 10) 20,000
    To Share Forfeiture A/c (2,000 ×× 3) 6,000
    (Being shares forfeited.)
    Equity Share First and Final Call A/c (63,000 ×× 20) Dr. 12,60,000
    To Equity Share Capital A/c (63,000 ×× 5) 3,15,000
    To Securities Premium Reserve A/c (63,000 ×× 15) 9,45,000
    (Being first and final call due.)
    Bank A/c Dr. 12,00,000
    To Equity Share First and Final Call A/c (60,000 ×× 20) 12,00,000
    (Being first and final call received.)
    Equity Share Capital A/c (3,000 ×× 10) Dr. 30,000
    Securities Premium Reserve A/c (3,000 ×× 15) Dr. 45,000
    To Equity Share First and Final Call A/c (3,000 ×× 20) 60,000
    To Share Forfeiture A/c (3,000 ×× 5) 15,000
    Being shares forfeited.)
    Bank A/c (4,000 ×× 50) Dr. 2,00,000
    To Equity Share Capital A/c (4,000 ×× 10) 40,000
    To Securities Premium Reserve A/c (4,000 ×× 40) 1,60,000
    (Being 4000 share reissued.)
    Share Forfeiture A/c Dr. 16,000
    To Capital Reserve A/c (W.N.) 16,000
    (Being share forfeiture transferred to capital reserve.)

    Working Note:
    Calculation of amount to be transferred to capital reserve:-

    Amount of Ram’s 2,000 forfeited shares = 6,000
    Amount of Sohan’s 2,000 forfeited share (15,000×2,0003,000)=10,000(15,000×2,0003,000)=10,000
    Amount to be transferred to capital reserve = Rs. 16,000

    OR

    Issue of Shares is the process in which companies allot new shares to shareholders. Shareholders can be either individuals or corporates. The company follows the rules prescribed by the Companies Act 2013 while issuing the shares. Issue of Prospectus, Receiving Applications, Allotment of Shares are three basic steps of the procedure of issuing the shares. The process of creating new shares is known as Allocation or allotment.
    There are mainly two types of Shares which are discussed in short as follows:-
    A preference share is one which carries two exclusive preferential rights over the other type of shares, i.e. equity shares.
    Equity share is a share that is simply not a preference share. So shares that do not enjoy any preferential rights are thus equity shares. They only enjoy equity, i.e. ownership in the company.
    The journal entries for the issue of shares is as follows:-

    In the books of Prakash Engineering Company
    Journal

    Date Particulars L.F. Dr.(Rs) Cr.(Rs)
    Bank A/c Dr. 1,50,000
    To Equity Share Application A/c
    (Being the application money received on 75,000 Equity Shares @ Rs. 2 per share)
    1,50,000
    Equity Share Application A/c Dr. 1,50,000
    To Equity Share Capital A/c (40,000 ×× Rs. 2) 80,000
    To Equity Share Allotment A/c (20,000 ×× Rs. 2) 40,000
    To Bank A/c (15,000 ×× Rs. 2)
    (Being the application money adjusted)
    30,000
    Equity Share Allotment A/c Dr. 2,00,000
    To Equity Share Capital A/c 1,20,000
    To Securities Premium Reserve A/c
    (Being the allotment money due on 40,000 shares)
    80,000
    Bank A/c Dr. 1,58,000
    To Equity Share Allotment A/c (WN 1, 2 and 3) 1,48,000
    To Calls-in-Advance A/c (2,000 shares ×× Rs 5)(WN 4)
    (Being the allotment money received except for 3,000 shares allotted to Ashok and calls-in-advance is received on 2,000 shares of Baneet)
    10,000
    Equity Share First Call A/c Dr. 80,000
    To Equity Share Capital A/c
    (Being the first call money due on 40,000 shares)
    80,000
    Bank A/c Dr. 70,000
    Calls-in-Advance A/c 4,000
    To Equity Share First Call A/c
    [Being the first call money received except on 3,000 shares (Rs. 80,000 – Rs. 6,000 – Rs. 4,000 (Calls-in-Advance)]
    74,000
    Equity Share Final Call A/c Dr. 1,20,000
    To Equity Share Capital A/c
    (Being the final call money due on 40,000 shares)
    1,20,000
    Bank A/c Dr. 1,05,000
    Calls-in-Advance A/c Dr. 6,000
    To Equity Share Final Call A/c
    (Being the final call money received except on 3,000 shares held by Ashok)
    1,11,000

    Working Notes:

    1. 40,000 shares were allotted to the applicants for 60,000 shares
      Number of shares applied by Ashok = 60,000/40,000 ×× 3,000 = 4,500 Shares
      Therefore, application money paid by Ashok = 4,500 ×× Rs. 2 = (Rs.) 9,000
    2. Money due from Ashok on allotment: (Rs)
      Money paid on an application (WN 1) 9,000
      Less: Amount adjusted on an application (3,000 ×× Rs. 2) 6,000
      Excess application money 3,000
      Money due on the allotment (3000 ×× Rs. 5) 15,000
      Less: Excess application money adjusted (3,000)
      Money not paid by Ashok 12,000
    3. Money received on allotment:
      Total amount due on allotment 2,00,000
      Less: Excess application money adjusted (40.000)
      1,60,000
      Less: Money not paid by Ashok (WN 2) (12,000)
      1,48,000
  24. Section B
  25. (a) An investment in Bonds
    Explanation: An investment in the bond is part of investing activities as it is a long term investment and not linked with cash equivalents. It is a non-current asset.
  26. Inventories (Stock) and Prepaid expenses.
  27. (a) All of these
    Explanation: Window dressing is the limitation of accounting which is directly concerned with:

    1. hide some vital information
    2. show items at incorrect value to portray better profitability
    3. may overvalue closing stock to show higher profits
  28. (a) Cash flow from investing activities
    Explanation: Cash flow from investing activities
  29. Deferred tax
  30. (b) Decrease
    Explanation: Cash is paying so current assets will decrease as a result current ratio is also decrease.
  31. (d) Firm depends upon borrowings/debts
    Explanation: A high Debt to Equity Ratio means a business has been aggressive in financing its growth with debt. Aggressive leveraging practices are often associated with high levels of risk
  32. Current Ratio
    Current AssetsCurrent LiabilitiesCurrent AssetsCurrent Liabilities
    50,00020.00050,00020.000
    2.5 : 1
    Working Note;
    Current Liabilities = Total Assets – Shareholders’ Funds – Non-current Liabilities
    = 1,00,000 – 60,000 – 20,000
    = Rs. 20,000Current Assets = Total Assets – Non-current Assets
    = 1,00,000 – 50,000
    = Rs. 50,000OR

    1. Debt Equity Ratio: is computed to assess long term financial soundness of the enterprise. The ratio expresses the relationship between external equities i.e., external debts and internal equities i.e. shareholder’s funds of the enterprise.
      = Debt  Equity = Debt  Equity  = Long-term Debts or Loans  Shareholders” Funds = Long-term Debts or Loans ∗ Shareholders” Funds ∗∗
      =4,00,0008,00,000=1:2=4,00,0008,00,000=1:2
      *Long-term Debt = 6% Debentures + 9% Loan
      = 3,00,000 + 1,00,000 = Rs. 4,00,000
      **Shareholders’ Funds = Paid-up Share Capital + Debenture Redemption Reserve
      = 6,00,000 + 2,00,000 = Rs. 8,00,000
    2. Working Capital Turnover Ratio: shows the relationship between working capital and revenue from operations or net sales. The objective of computing the ratio is to ascertain whether or not working capital has been effectively used in making sales.
      = Revenue from Operations  Working Capital” = Revenue from Operations  Working Capital” 
      =60,00,0008,00,000=60,00,0008,00,000 = 7.5 times
      *Working Capital = Current Assets** – Current Liabilities
      = 12,00,000 – 4,00,000 = Rs. 8,00,000
      **Current Assets = Other Current Assets + Closing Inventory
      = 11,00,000 + 1,00,000 = Rs. 12,00,000
  33. Comparative Income statement
    Particular 2008 Amount (Rs) 2009 Amount (Rs) Change in Amount (Rs) Change in Percentage (%)
    Net Sales 8,00,000 10,00,000 2,00,000 25%
    Less: Cost of Goods Sold 4,80,000 6,00,000 1,20,000 25%
    Gross Profit 3,20,000 4,00,000 80,000 25%
    Less: Indirect Expenses 32,000 40,000 8,000 25%
    Operating Profit (Profit Before Tax) 2,88,000 3,60,000 72,000 25%
    Less: tax 1,44,000 2,16,000 72,000 50%
    Profit after tax 1,44,.000 1,44,000 ———- ————

    Common Size Income Statement

    Particulars 2008 Amount (Rs) 2009 Amount (Rs) Percentage of Net sales in P.Y. (%) Percentage of Net sales in C.Y. (%)
    Net Sales 8,00,000 10,00,000 100% 100%
    Less: Cost of Goods Sold 4,80,000 6,00,000 60% 60%
    Gross Profit 3,20,000 4,00,000 40% 40%
    Less: Indirect Expenses 32,000 40,000 4% 4%
    Operating Profit (Profit Before Tax) 2,88,000 3,60,000 36% 36%
    Less: tax 1,44,000 2,16,000 18% 21.6%
    Profit after tax 1,44,.000 1,44,000 18% 14.4%

    OR

    Comparative Statement of Profit and Loss
    for the years ended 31st March 2012 and 2013

    Particulars Note No. 31st March 2012 Amount (Rs.) 31st March 2013 Amount (Rs.) Absolute Change (Increase/ Decrease) Amount (Rs.) Percentage Change (Increase/ Decrease) (%)
    (A) (B) (C = B – A) (D = CA×100CA×100)
    I. Revenue from Operations(Total Revenue) 5,25,000 10,00,000 4,75,000 90.47
    II. Expenses:
    (a) Cost of Materials Consumed 3,00,000 5,00,000 2,00,000 66.67
    (b) Other Expenses 26,250 50,000 23,750 90.47
    III.Total Expenses: 3,26,250 5,50,000 2,23,750 68.58
    IV. Net Profit before Tax(I – III) 1,98,750 4,50,000 2,51,250 126.41
    Less:Income Tax 99,375 2,25,000 1,25,625 126.41
    V. Net Profit after Tax 99,375 2,25,000 1,25,625 126.41

    A Comparative Income Statement shows the operating results for a number of accounting periods and helps the reader of such statement to compare the results over the different periods for better understanding and also for detailed analysis of variation of line-wise items of Income Statement.

  34. Wisben Ltd.
    Cash Flow Statement
    (for the year ended 31st March 2012)
    Particulars Amt (Rs)
    I.Cash Flow from Operating Activities
    Net Profit before tax and Extraordinary Items(2,00,000 – 1,10,000) 90,000
    Adjustments for Non-Cash And Non-Operating Items
    (+) Loss on sale of Machinery 15,000
    (+) Depreciation 2,00,000 2,15,000
    Operating Profit before Working Capital Changes 3,05,000
    (+) Decrease in Current Assets and Increase in Current Liabilities
    Trade Receivables 8,000
    Trade Payable 5,000
    (-) Increase in Current Assets and Decrease in Current Liabilities
    Inventories (10,000) 3,000
    Net Cash Flow from Operating Activities 3,08,000
    II.Cash Flow from Investing Activities
    Proceeds from Sale of Machinery 65,000
    Payment for Purchases of Tangible Assets (W.N.) (5,80,000)
    Net Cash Used in Investing Activities (5,15,000)
    III.Cash Flow from Financing Activities
    Proceeds from Issue of Share Capital 1,00,000
    Proceeds from Long-term Borrowings 1,00,000
    Net Cash Flow from Financing Activities 2,00,000
    Net Decrease in Cash and Cash Equivalents [I+II+III] (7,000)
    (+)Cash and Cash Equivalents in the Beginning of the year 35,000
    Cash and Cash Equivalents art the End of the Year 28,000

    Working Note:

    Fixed Asset Account
    Particulars Amt (Rs) Particulars Amt (Rs)
    To Balance b/d 8,00,000 By Bank A/c (Sale) 65,000
    To Bank A/c (Purchases) 5,80,000 By Depreciation A/c 2,00,000
    (Balancing figure) By Statement of Profit and Loss (80,000- 65,000) 15,000
    (Loss on sale)
    By Balance c/d 11,00,000
    13,80,000 13,80,000

    Note:

    • Above Cash Flow Statement is prepared as per Accounting standard – 3 (Revised) by Indirect Method.
    • Non-Operating Expenses and losses are those expenses and losses which are debited to Statement of Profit and loss but are not incurred on operating activities of the enterprise. Example: Interest on long term borrowings, goodwill, patents amortised, loss on the sale of fixed asset and investment etc.
X