Accounts Official Board 2024-2025 ISC (Commerce) Class 12 Question Paper Solution

Shiv, Ravi and Roshan are partners in a firm following the fixed capital method. During the year 2023-24, Shiv withdrew ₹ 15,000 in the middle of each half year; Ravi withdrew ₹ 20,000 to pay for premium of his life insurance policy; Roshan withdrew ₹ 12,000 from his capital.
What is the interest on drawings charged from the partners at the end of the year, if the rate of interest on drawings mentioned in the partnership deed is 6% per annum?

Shiv - ₹ 900; Ravi - Nil; Roshan - ₹ 360

Shiv - ₹ 900; Ravi - ₹ 600; Roshan - Nil

Shiv - ₹ 1,800; Ravi - ₹ 1,200; Roshan - ₹ 720

Shiv - ₹ 900; Ravi - ₹ 1,200; Roshan - ₹ 360

To value the goodwill of a partnership firm at the time of its reconstitution, which one of the following items is added back to the previous year’s profit to find the normal profit?

Gain from sale of shares

Insurance premium paid

Undervaluation of closing stock

Overvaluation of closing stock

Read the following news item regarding issue of shares by TVS Supply Chain and answer the question that follows:

Which of the following options can TVS Supply Chain avail to deal with its over-subscribed shares?

P: Reject all the over-subscribed shares and refund the excess application money.

Q: Allot all shares applied for on a pro-rata basis.

R: Allot all shares applied for.

S: Allot in full to some applicants, allot shares on a pro-rata basis to a few applicants and refund the application money to some applicants.

P, Q and R

Q, R and S

P, R and S

P, Q and S

Premium on Redemption of Debentures is debited to ______.

Debentures Account

Loss on issue of Debentures Account

Debenture holders’ Account

Debenture Application and Allotment Account

Assertion: A partnership firm is said to maintain its accounts by the fixed capital account method when it has a separate capital account and current account for every partner.

Reason: A fixed capital account method is maintained to ensure that the balance in the current account of any partner is not overdrawn at any point of time.

Which one of the following is correct?

Both Assertion and Reason are true and Reason is the correct explanation for Assertion.

Both Assertion and Reason are true but Reason is not the correct explanation for Assertion.

Assertion is true and Reason is false.

Both Assertion and Reason are false.

What does a new partner acquire by contributing his share to the self-generated goodwill of the firm?

At the time of dissolution of a partnership firm on 31^st March 2024, its Bills Payable of ₹ 42,000 due to be paid on 31^st July 2024, was settled at a rebate of ₹ 350.

Calculate the per annum percentage of rebate at which the Bills Payable was settled.

At the time of the dissolution of the partnership firm of Sanjay and Mitali, its Balance Sheet showed Deferred Revenue Expenditure of ₹ 30,000.

Give the journal entry to treat this item.

Read the following news item and answer the questions which follow:

1. Mention the sub-head under which patents would be shown in the Balance Sheet of a company prepared as per Schedule III of the Companies Act, 2013.
2. Give any one other item under the same subhead.

Why is it advisable for an unlisted manufacturing company to start transferring its profits to Debenture redemption reserve from the year of the issue of its non-convertible debentures?

Ajay and Bijoy are two partners sharing profits and losses in the ratio of 2:1.

Additional information:

1. On 1st April 2024, they admitted Sujay as a partner with ½ share in the profits.
2. The Workmen Compensation Reserve to be reduced to ₹ 900 in the reconstituted firm.

You are required to give the accounting treatment of Workmen Compensation Reserve on the date of Sujay’s admission.

Gita and Mita are partners in a firm sharing profits and losses in the ratio of 3:2. An extract of their Balance Sheet as at 31st March 2024, is as follows:

On the admission of Rita as a third partner for 1/4 share in the profits, the assets and liabilities of the firm were revalued as under:

1. Creditors include an amount of ₹ 5,000 received as commission from Ajay. The necessary adjustment to be made.
2. Creditors include ₹ 1,000 due to Nikhil paid by partner Gita privately for which she is not to be reimbursed.
3. The value of machinery, overvalued by ₹ 20,000 in the Balance Sheet, to be revised.
4. Out of the total insurance premium paid, ₹ 6,000 to be treated as prepaid insurance. The amount was earlier debited to Profit & Loss A/c.
5. ₹ 20,000 for damages claimed by a customer had been disputed by the firm. It was agreed at 70% by a compromise between the customer and the firm.
6. The provision for doubtful debts to be increased to ₹ 20,000.

You are required to prepare the Revaluation Account.

On 1st April 2023, Vishesh Co. Ltd. made an issue, which was fully subscribed, of 8,000, 5% Debentures of ₹ 100 each at a premium of 10% repayable at par at the end of 10 years. The debentures were allotted on 31st August 2023, subscriptions being payable:

10% with Application
50% (along with premium) on Allotment
20% with First Call
Balance on the Second & Final Call

One debenture holder holding 200 debentures paid the First Call with Allotment.

You are required to prepare the Cash Book for the year 2023-24 to record the above issue of debentures. (Ignore interest on debentures).

Mint Ltd. issued 5,000, 6% Debentures of ₹ 100 each to be redeemed at par after five years.

The issue price was payable as follows:

₹ 25 on Application payable on 1st May 2023
₹ 25 on Allotment payable on 1st July 2023
₹ 20 on First Call payable on 1st October 2023

Balance on Second & Final Call payable on 1st February 2024

All these debentures were subscribed and amounts due on them duly received.
One debenture holder holding 1,000 debentures, paid the amount of both the calls with allotment.
According to the Articles of Association of the company, interest @ 12% per annum is payable on calls-in-advance. The interest on calls-in-advance was paid by the company to the debenture holder on 1st February 2024.
The company follows the financial year and closes its books accordingly.

You are required to prepare the following for the year 2023-24:

1. Interest on Calls-in-Advance Account.
2. Second & Final Call Account.

Shyla Ltd., an unlisted manufacturing company, had 30,000, 6% Debentures of ₹ 100 each due for redemption at par on 31^st March 2024. On this date, the company had the required amount in its Debenture Redemption Reserve.
Investment, as required by the law, made on 1st April 2023, earning interest @ 5% per annum, was realised at 97% on the date of redemption and the debentures were redeemed on the due date.
Tax @ 10% on the interest was deducted at the source of the investment.

You are required to prepare the following for the year 2023-24:

1. Debenture Redemption Investment Account.
2. Interest on Debenture Redemption Investment Account.

Anu, Benu and Sara are partners in a firm sharing profits and losses in the ratio of `4/9:2/9:1/3`. Anu retires from the firm on 1st April, 2024. She gives half of her share to Benu and the remaining half to Sara.

On Anu’s retirement, it is decided that goodwill of the firm be valued at two years’ purchase of the average profits of the preceding four years which were as follows:

You are required to calculate:

1. The new profit-sharing ratio of the remaining partners in the reconstituted firm.
2. The firm’s goodwill on the date of Anu’s retirement. 
   (Show the workings clearly with the formula)

Hoody Ltd. made the following borrowings in the year 2023-24:

The terms of the borrowings were:

• The redemption of 8% Debentures to begin from 30th September 2024.
• Interest on Bank Loan and Debentures to be paid annually.

Additional information:

In the year 2023–24, the company defaulted on the payment of the interest on bank loan.

You are required to show the above items in Notes to Accounts accompanying the Balance Sheet of Hoody Ltd. prepared as per Schedule III of the Companies Act, 2013. as at 31st March 2024.

Uma and Aman were partners in a firm sharing profits and losses in the ratio of 2 : 1. They closed their books on 31st March every year. Uma died on 31st July 2024, when the Balance Sheet of the firm was as follows:

According to the terms of their partnership deed:

1. Interest on capital to be allowed to the partners @ 4% per annum.
2. Uma to be allowed a salary of ₹ 250 per month.

The firm’s non-purchased goodwill on the date of Uma’s death was valued at ₹ 12,000.
The amounts due to Uma were transferred to her representative’s loan account.

You are required to prepare:

1. Uma’s Capital Account.
2. Uma’s Loan Account.

Ravi, Ali and Siya are partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2.
Ali retired from the firm on 31^st March 2024, when the capitals of the partners before the following necessary adjustments stood at:

Ravi ₹ 23,000
Ali ₹ 12,000
Siya ₹ 9,000

Adjustments:

1. The firm’s goodwill to be valued at ₹ 21,600.
2. Loss on revaluation of assets and liabilities to be ₹ 2,700.

On the date of Ali’s retirement, the firm had:

General Reserve of ₹ 6,300
Cash & Bank Balance of ₹ 18,600

It was decided that Ali be paid through cash brought in by Ravi and Siya in such a manner so as to make their capitals proportionate to their new profit sharing ratio and a minimum Cash & Bank Balance of ₹ 10,000 to be maintained in the reconstituted firm.

You are required to pass journal entries to record the above transactions.

Mihir and Farhan were partners in a firm sharing profits and losses equally. They dissolved their partnership firm on 31^st March 2024.
On this date, the Balance Sheet of their firm, apart from the realisable assets and outside liabilities, showed the following:

On the date of dissolution:

1. The firm, upon realisation of assets and settlement of liabilities, suffered a loss of ₹ 10,000.
2. The amount paid to settle the liabilities exceeded the amount realised from the sale of the assets by ₹ 8,000.
3. Stock worth ₹ 3,000 was taken over by Farhan.
4. Mihir discharged the Bills Payable, recorded in the books at ₹ 5,000, at a rebate of ₹ 100.
5. There was a workmen compensation claim of ₹ 4,000.

You are required to prepare on the date of dissolution of the firm:

1. The Partners’ Capital Accounts.
2. The Bank Account to determine its balance at bank as shown in the Balance Sheet as at 31^st March 2024, represented by ‘?’.

Tim and Leena started a partnership business on 1^st July 2023, with fixed capital contributions of ₹ 3,00,000 and ₹ 2,50,000 respectively.

On 1^st January 2024, they decided that:

The total fixed capital of the firm to be ₹ 6,00,000 contributed by the partners in the profit-sharing ratio. Accordingly on 1^st January 2024, Tim and Leena introduced or withdrew capital.

Their partnership deed contained the following clauses:

1. Interest on capital to be allowed @ 10% per annum to both the partners.
2. Rent @ ₹ 2,000 per month to Tim for the use of his premises for business purposes.
3. 10% of the Trading Profit to be transferred to General Reserve.
4. The profit-sharing ratio of the partners to be 3 : 2.

The trading profit of the firm for the first year of the partnership after considering all charges against profits was ₹ 1,50,000.

You are required to pass journal entries for the year 2023-24.

(A) Nida and Pia, each doing business as sole proprietors, started a partnership on 1^st April 2023, with capital contributions of ₹ 5,00,000 and ₹ 4,00,000.

Their partnership deed contained the following clauses:

1. Interest on capital to be allowed @ 10% per annum to both the partners.
2. Annual commission of 30,000 to be allowed to Nida.
3. Interest on drawings to be charged @ 4% per annum.
4. The profit-sharing ratio to be 3 : 2.

Nida withdrew 10,000 during the year 2023-24.

The trading profit of the firm for the year ending 31^st March 2024, was 70,640 before considering accrued interest on investments of ₹ 1,600.

Although the accountant had recorded the drawings made by the partners, he distributed the profits before charging interest on drawings from Nida but after considering the following:

• Accrued interest on investments of ₹ 1,600.
• Allowing the appropriations of interest on capital and commission.

You are required to prepare the following for the year 2023-24:

1. Profit and Loss Appropriation Account as prepared by the accountant of the firm.     [5.5]
2. Nida’s Drawings Account.     [2]

(B) At the beginning of the next financial year, the accountant realised his error of not having charged interest on drawings from Nida. He rectified the error by passing a single adjustment entry.     [2.5]

You are required to give the rectified adjustment entry passed by the accountant.

Cosmic Ltd. issued 40,000 equity shares of ₹ 10 each at a premium of ₹ 1 per share payable:

On Application   ₹ 3

On Allotment   ₹ 4 (including premium)

On First and Final Call   Balance 3

The public applied for 60,000 shares. Pro-rata allotment was made to the applicants of 50,000 shares. Where no allotment was made, money was to be refunded in full.

One shareholder who had applied for 500 shares did not pay the allotment money and his shares were forfeited after the allotment stage. The company was able to immediately reissue all the forfeited shares at ₹ 5 per share.

Three months later, the First and Final Call was made to all the shareholders.

You are required to:

1. Pass journal entries to record the above transactions in the books of the company.     [8.5]
2. Prepare the Calls-in-arrears Account.     [1.5]

NM Co. Ltd. issued a prospectus inviting applications for 12,000 shares of ₹ 10 each at a premium of ₹ 1 per share.
The public applied for 30,000 shares. The company made pro-rata allotment on 24,000 shares. A shareholder who had applied for 2,000 shares, was allotted 1,000 shares. After having paid ₹ 4 per share on application, he did not pay the allotment money of ₹ 5 per share (including premium).
On his subsequent failure to pay the first call of ₹ 1 per share, his shares were forfeited.
These shares were reissued at the rate of ₹ 7 per share ₹ 9 paid up.
The company incurred ₹ 5,000 as share issue expenses.

Based on the information given above and the ledger accounts given below, answer the questions that follow:

You are required to:

1. Draw the ledger accounts given above filling up the missing information represented by ‘?’.     [3]
2. What is the balance left in the Securities Premium A/c after all the transactions relating to the shares have been completed by NM Co. Ltd?     [1]
3. Give the journal entries for:     [6]
   1. The amount due on allotment.
   2. The amount received on allotment.
   3. Transferring the net gain made on reissue of shares to Capital Reserve Account.

Red Health, an ambulance aggregator has paid its employees only half their January salaries. The company has gone in for funding. In response to queries from Mint, Red Health’s founder and CEO said, “Our funding round is closed and we are waiting money to be wired by this week. On the basis of that, and to manage our working capital, we had given a choice to our old employees to hold their salaries back.”

The original Current Ratio and Quick Ratio of Red Health are more than one. Which one of the following will be correct for the month of January 2024 if the company had held back the salaries of its employees for the same month?

Both Current Ratio and Quick Ratio will decrease.

Both Current Ratio and Quick Ratio will increase.

No change in the Quick Ratio but the Current Ratio will increase.

No change in the Current Ratio but the Quick Ratio will increase.

On 1st April 2023, Tarzan Ltd. purchased 7,000, 7% Debentures of ₹ 100 each of Tintin Ltd. It received interest of ₹ 7,000 on these debentures on 31st March 2024.

How will this information be presented in the Cash Flow Statement of Tarzan Ltd. for the year 2023-24?

P: ₹ 70,000 as cash outflow in Investing Activity

Q: ₹ 70,000 as cash outflow in Financing Activity

R: ₹ 7,000 as cash inflow in Investing Activity

S: ₹ 7,000 as cash ouflow in Operating activity

Only P and R

Only P and S

Only P and Q

Only R and S

According to the ratings agency, Crisil, the food and grocery players will cap their debt raising in FY 25 in order to ensure that one of the key debt protection metrics, the interest cover, remains healthy in line with the previous fiscal’s level of 13 times.

You are required to give the formula to calculate the interest cover.

While preparing the Cash Flow Statement, the accountant of Red Hill Co. Ltd. was undecided about the impact of amortisation of discount on issue of debentures of ₹ 10,000 on the company’s Net Operating Profit before working capital changes.

What should the accountant do to resolve this issue? Give a reason for your answer.

Read the news item given below and answer the questions that follow:

1. Mention whether Advertising income is an operating income or a non-operating income for InShorts.
2. What is the percentage increase in loss of InShorts in the fiscal year 2022-23 as compared to 2021-22?

Following are the particulars of Richmond Ltd.

You are required to calculate the absolute change and percentage change of the following items at the end of the year 2023-24 vis-a-vis the closing amounts of the year 2022-23:

1. Revenue from operations
2. Purchases of stock in trade
3. Closing inventory of stock-in-trade

Calculate the Gross Profit of Saturn Ltd. from the particulars given below:

Calculate the Trade Receivables Turnover Ratio of Planet Ltd. from the particulars given below:

Bajaj Hindustan Sugar, one of the largest sugar and ethanol producers, in order to revive the company, has offered to invest ₹ 2,500 crore as fresh equity of which ₹ 1,000 crore has already been infused.

What will be the effect of this decision of Bajaj Hindustan Sugar on its following ratios?

1. Proprietary Ratio
2. Debt to Total Assets Ratio

Calculate the Earning per share of Hemisphere Ltd. from the particulars given below:

From the following information of Realty Ltd., you are required to calculate the company’s Cash and Cash Equivalent as on 31st March 2024, by preparing a Cash Flow Statement (as per AS 3).

1. Net profit before tax was ₹ 14,00,000.
2. Tax of ₹ 5,00,000 was paid.
3. The opening inventory was higher than the closing inventory by ₹ 50,000.
4. The Trade Creditors showed a decrease of ₹ 20,000 on 31st March 2024, when compared to the amount of Trade Creditors on 31st March 2023.
5. Plant & Machinery on 31st March 2023, and 31st March 2024, amounted to ₹ 20,00,000 and ₹ 26,00,000 respectively.
6. New machinery was purchased for ₹ 9,00,000; the purchase consideration being 4% debentures of the face value of ₹ 100 each issued at a discount of 10%.
7. The 4% debentures on 31st March 2023, and 31st March 2024, amounted to ₹ 5,00,000 and ₹ 20,00,000 respectively.
8. ₹ 60,000 was paid by the company for interest on debentures against the amount due of ₹ 80,000.
9. Investments of ₹ 5,00,000 were purchased on 30th November 2023, on which interest of ₹ 40,000 was earned and received.
10. The cash and cash equivalent as on 31st March 2023, was ₹ 3,15,000.

Read the following information of Celestial Ltd., and answer the questions that follow:

Notes to Accounts:

Additional information:

1) During the year 2023-24, the company paid tax of ₹ 2,50,000.

2) An extract of the Balance Sheets of the company as at 31st March 2023, and as at 31st March 2024 is as follows:

1. State the reason for a part of the accumulated depreciation being written off by the company.     [1]
2. What is the cash flow of interest on debentures?     [1]
3. Calculate Cash from Investing Activities.     [1.5]
4. Calculate Cash from Operating Activities.     [2.5]

What is the cell reference for a range of cells that starts in cell B1 and goes over to column G and down to row 10?

B1-G10

B1.G10

B1;G10

B1:G10

Which property describes the various characteristics of an entity?

ER Diagram

Column

Relationship

Attribute

How can the records of a spreadsheet be:

1. Imported?
2. Exported?

Give the description of the following two errors in Excel:

1. # NULL
2. # NUM

Give the meaning of Database design.

What does the PMT function calculate?

What is the utility of Freeze Panes in spreadsheets?

What do you understand by Data Model?

List the components of storage manager.

Give any two differences between DELETE command and TRUNCATE command.

Premier Furniture Ltd. runs a furniture store in city C. The store has three Sales Executives, SE1, SE2 and SE3.
The company has a policy of awarding incentives. SE2 was awarded an incentive as from 1^st April 2023, equal to 10% of his monthly Basic Pay. The incentive was combined with Other Allowances.
Another policy of Premier Furniture Ltd. is that an employee can increase his portion of PF contribution from 10% to 15% of the Basic Pay. The contribution of the employer remains the same at 10% of the Basic Pay.
SE1 accordingly increased his PF contribution from 1^st April 2023, itself, to 15%.
The payroll summary representing the cumulative position of the three executives at the end of the year 2023-24 is as follows:

Based on the above transactions and the information given in the spreadsheet, answer the following questions:

1. PF contribution of SEI in Cell G2.     [2]
2. Net Salary of SEl in Cell K2.     [2]
3. Other Allowances (excluding the incentive) earned by SE2 in Cell E3.     [2]
4. Gross Salary of SE3 in Cell J4.     [2]