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Accountancy All India Set 3 2016-2017 CBSE (Arts) Class 12 Question Paper Solution

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Accountancy
All India Set 3
2016-2017 March
Marks: 80

[1]1

P and Q were partners in a firm sharing profits and losses equally. Their fixed capitals were Rs 1,00,000 and Rs 50,000 respectively. The partnership deed provided for interest on capital @ 10% per annum. For the year ended 31st March 2016, the profits of the firm were distributed without providing interest on capital
Pass necessary adjustment entry to rectify the error.

Concept: Division of Profit Among Partners
Chapter: [1.01] Accounting for Partnership Firms
[1]2

X Ltd invited applications for issuing 500, 12 % debentures of `100 each at a discount of 5%. These debentures were redeemable after these years at par. Applications for 600 debentures were received. Prorata allotment was made to all the applications.
Pass necessary journal entries for the issue of debentures assuming that the whole amount was payable with application.

Concept: Issue at Par and Premium and at Discount
Chapter: [1.02] Accounting for Companies
[1]3

Y. Ltd forfeited 1,00 equity shares of Rs 10 each for the non-payment of the first call of Rs 2 per share. The final call of Rs2 per share was yet to be made.

Calculate the maximum amount of discount at which these shares can be reissued.

Concept: Issue at Par and Premium and at Discount
Chapter: [1.02] Accounting for Companies
[1]4

Gupta and Sharma were partners in a firm. They wanted to admit five more members in the firm. List any two categories of individuals other than minors who cannot be admitted by them.

Concept: The Indian Partnership Act 1932
Chapter: [1.01] Accounting for Partnership Firms
[1]5

Distinguish between ‘Fixed Capital Account’ and ‘Fluctuating Capital Account’ on the basis of credit balance

Concept: Methods of Capital Accounts - Fixed and Fluctuating Capital Method
Chapter: [1.01] Accounting for Partnership Firms
[1]6

A and B were partners in the firm sharing profits and losses in the ratio of 4:3. They admitted C as a new partner. The new profit sharing ratio between A, B and C were 3:2:2. A surrendered `1/4` th of his share in favour of C. Calculate B’s sacrifice.

Concept: Admission of a Partner - Sacrifice Ratio and New Ratio
Chapter: [1.01] Accounting for Partnership Firms
[3]7

Kavi, Ravi, Kumar and Guru were partners in the firm sharing profits in the ratio of 3:2:2:1. On 1.2.2017, Guru retired and the new profit sharing ratio decided between Kavi, Ravi and Kumar were 3:1:1. On Guru’s retirement, the goodwill of the firm was valued at Rs 3, 60,000. Showing your working notes clearly, pass necessary journal entry in the books of the firm for the treatment of goodwill on Guru’s retirement

Concept: Retirement Or Death of a Partner - Treatment of Goodwill
Chapter: [1.01] Accounting for Partnership Firms
[3]8

Disha Ltd purchased machinery from Nisha Ltd. and paid to Nisha Ltd. as follows :

1) By issuing 10,000 equity shares of Rs 10 each at a premium of 10%

2) By issuing 200, 9% debentures of  Rs 100 each at a discount of 10%.

3) Balance by accepting a bill of exchange of Rs 50,000 payable after one month.

Pass necessary journal entries in the books of Disha Ltd. for the purchase of machinery and making payment to Nisha Ltd.

Concept: Share Capital - Issue and Allotment of Equity Shares
Chapter: [1.02] Accounting for Companies
[3]9

Ganesh Ltd. is registered with an authorised capital of  Rs 10, 00, 00,000 divided into equity shares of Rs 10 each. Subscribed and fully paid up capital of the company was Rs 6,00,00, 000. For providing employment to the local youth for the development of the tribal areas of Arunachal Pradesh the company decided to Set up hydropower plants there. The company also decided to Open skill development centres in Itanagar, pasighat and Tawang. To meet its new financial requirements, the company decided to issue 1,00,000 equity shares of Rs 10 each and 1,00,000, 9% debentures of Rs  100 each. The debentures were redeemable after five years at par. The issue of shares and debentures was fully subscribed. A shareholder holding 2,000 shares failed to pay the final call of Rs 2 per share.

Show the share capital in the Balance Sheet of the company as per the provisions of Schedule III of the Companies Act, 2013; also identify any two values that the company wishes to propagate

Concept: Share Capital - Issue and Allotment of Equity Shares
Chapter: [1.02] Accounting for Companies
[3]10

Jain Ltd. converted 500, 8% debentures of Rs 100 each issued at a discount of 6% into equity shares of Rs 10 each issued at a premium of Rs 25 per share. Discount on issue of 8% debentures has not yet been written off. Showing your working notes clearly, pass necessary journal entries for conversion of 8% debentures into equity shares.

Concept: Types of Shares - Preference Shares Equity Shares
Chapter: [1.02] Accounting for Companies
[4]11

Madhu and Neha were partners in a firm sharing profits and losses in the ratio of 3: 5. Their fixed capitals were Rs 4, 00,000 and Rs 6,00,000 respectively. On 1.1.2016, Tina was admitted as a new partner for `1/4` th share in the profits. Tina acquired her share of profit from Neha. Tina brought Rs 4, 00,000 as her capital which was to be kept fixed like the capitals of Madhu and Neha. Calculate the goodwill of the firm on Tina's admission and the new profit sharing ratio of Madhu, Neha and Tina. Also, pass necessary journal entry for the treatment of goodwill on Tina's admission considering that Tina did not bring her share of goodwill premium in cash

Concept: Admission of a Partner - Treatment of Goodwill
Chapter: [1.01] Accounting for Partnership Firms
[4]12

Ashok, Babu and Chetan were partners in a firm sharing profits in the ratio of 4:3:3. The firm closes its books on 31st March every year. On 31st December 2016, Ashok died. The partnership deed provided that on the death of a partner his executors will be entitled for the following.

1) Balance in his capital account. On 1.4.2016, there was a balance of Rs 90,000 in Ashok’s Capital Account

2) Interest on Capital @12% per annum

3) His share in the profits of the firm in the year of his death will be calculated on the basis of the rate of net profit on sales of the previous year, which was 25%. The sales of the firm till 31st December 2016 were Rs 4, 00,000.

4) His share in the goodwill of the firm. The goodwill of the firm on Ashok’s death was valued at 4,50,000. The partnership deed also provided for the following deduction from the amount payable to the executor of the deceased partner:

  • His drawings in the year of his death, Ashok’s drawings till 31.12.2016 were Rs 15,000.
  • Interest on drawings @12 % per annum which was calculated on Rs 1,500.

The accountant of the firm prepared Ashok’s Capital Account to be presented to the executor of Ashok but in a hurry, he left it incomplete. Ashok’s Capital Account as prepared by the firm accountant is given below.

Ashok Capital Account
Dr. Cr.
Date                        Particulars Rs Date                        Particulars Rs

2016

Dec 31              _________

Dec 31              _________

Dec 31              _________

 

 

 

15,000

______

______

 

 

2016

April 1               _________

Dec 31              _________

Dec 31              _________

Dec 31              _________

Dec 31              _________

 

90,000

8,300

40,000

90,000

90,000

  3,18,100   3,18,100

Your are required to complete Ashok’s Capital Account.

Concept: Preparation of Deceased Partner's Capital Account, Executor's Account
Chapter: [1.01] Accounting for Partnership Firms
[6]13

Kapil, Mohit, Roshan and Rakesh were partners in firm sharing profits in the ratio of 5:2:2:1. On 1.4.2016 their Balance Sheet was as follows :

Balance Sheet of Kapil, Mohit, Roshan and Rakesh
as on 1.4.2016
Liabilities Rs Assets Rs

Capitals :

Kapil        3,50,000

Mohit       3,00,000

Roshan    2,50,000

Rakesh    2,00,000

Sundry Creditors

Workmen Compensation Reserve

 

 

 

 

11,00,000

50,000

50,000

Fixed Assets

Current Assets

 

 

 

 

 

8,00,000

4,00,000

 

 

 

 

 

  12,00,000   12,00,000

From the above date, the partners decided to share the future profits equally. For this purpose, the goodwill of the firm was valued at Rs 72,000. It was also agreed that:

1) Fixed assets will be depreciated by 10% and the claim against Workmen Compensation Reserve will be estimated at Rs 70,000.

2) The Capitals of the partners will be adjusted according to their new profit sharing ratio. For this, Partners' Current Accounts will be opened

Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the reconstituted firm.

Concept: Preparation of Revaluation Account and Balance Sheet
Chapter: [1.01] Accounting for Partnership Firms
[6]14

On 1.4.2015, MKM Ltd. issued 12,000, 11% debentures of `100 each at a discount of 8%, redeemable at a premium of 10% after three years. The company closes its books on 31st March every year. Interest on 11% debentures is payable on 30th September and 31st March every year. The rate of tax deducted at source is 10%.

Pass necessary journal entries for the issue of 11% debentures and debenture interest for the year ended 31.3.2016.

Concept: Issue of Debentures at Par at Premium and at Discount
Chapter: [1.02] Accounting for Companies
[6]15

Pass necessary journal entries on the dissolution of a partnership firm in the following cases :

1) Expenses of dissolution Rs 500 were paid by John, a partner.

2) Joney, a partner, agreed to bear the dissolution expenses for a commission of 750. Actual dissolution expenses 650 were paid by Joney

3) Bony, partner agreed to look after the dissolution work for a remuneration of Rs 3,700. He also agreed to bear the dissolution expenses. Actual dissolution expenses Rs 4,200 were paid by Bony from the firm’s cash.

4) Sony, a partner, was appointed to look after the dissolution work for a remuneration of Rs 10,000. Sony agreed to bear the dissolution expenses. Sony took away stock worth Rs 10,000 as his remuneration. The stock had already been transferred to realisation account.

5) Vikky, a partner, agreed to look after the dissolution work for a remuneration of Rs 12,000. Vikky also agreed to bear the dissolution expenses. Actual dissolution expenses Rs 12,500 were paid by another partner, Clive, on behalf of Vikky.

6) Dissolution expenses were Rs 5,000

Concept: Dissolution of a Partnership Firm
Chapter: [1.01] Accounting for Partnership Firms
[8]16 | Attempt Any One
[8]16.1

C and D are the partner in a firm sharing profits in the ratio of 4:1. On 31.3.2016 their Balance Sheet was as follows :

Balance Sheet of C and D
As on 31.3.2016
Liabilities Rs Assets Rs

Sundry Creditors

Provision for Bad debts

Outstanding Salary

General Reserve

 

Capitals

C             1,20,000

D                80,000

40,000

4,000

6,000

10,000

 

 

 

2,00,000

Cash

Debtors

Stock

Furniture

Plant and Machinery

 

 

 

24,000

36,000

40,000

80,000

80,000

 

 

 

  2,60,000   2,60,000

On the above date, E was admitted for 1/4 th share in the profits on the following terms:

1) E will bring 1, 00,000 as his capital and 20,000 for his share of goodwill premium half of which will be withdrawn by C and D.

2) Debtors 2,000 will be written off as bad debts and a provision of 4% will be created on debtors for bad debts and doubtful debts

3) The stock will be reduced by Rs 2,000, furniture will be depreciated by Rs 4,000 and 10% depreciation will be charged on plant and machinery

4) Investments of 7,000 not shown in the Balance Sheet will be taken into account.

5) There was an outstanding repairs bill of Rs 2,300 which will be recorded in the books.

Pass necessary journal entries for the above transactions in the books of the firm on E’s admission.

Concept: Statement of Profit and Loss and Balance Sheet in the Prescribed Form with Major Headings and Sub Headings
Chapter: [2.01] Analysis of Financial Statements
[8]16.2
Balance Sheet of Sameer, Yasmin and Saloni
As on 31.3.2016
Liabilities Rs Assets Rs

Creditors

General Reserve

Capitals:

   Sameer         3,00,000

   Yasmin          2,50,000

   Saloni           1,50,000

 

 

1,10,000

60,000

 

 

 

7,00,000

 

 

Cash

Debtors                90,000

Less: Provision     10,000

Stock

Machinery

Building

Patents

Profit and Loss Account

80,000

 

80,000

1,00,000

3,00,000

2,00,000

60,000

50,000

  8,70,000   8,70,000

On the above date, Sameer retired and it was agreed that:

1) Debtors of 4,000 will be written off as bad debts and a provision of 5% on debtors for bad and doubtful debts will be maintained

2) An unrecorded creditor of 20,000 will be recorded.

3) Patents will be completely written off and 5% depreciation will be charged on stock, machinery and
building.

4) Yasmin and Saloni will share future profits in the ratio of 3:2

5) Goodwill of the firm on Sameer’s retirement was valued at  Rs 5, 40,000.

Pass necessary journal entries for the above transactions in the books of the firm on Sameer’s retirement

Concept: Statement of Profit and Loss and Balance Sheet in the Prescribed Form with Major Headings and Sub Headings
Chapter: [2.01] Analysis of Financial Statements
[8]17 | Attempt Any One
[8]17.1

VXN Ltd invited application for issuing 50,000 equity shares of `10 each as a premium of 8 per share. The amount was payable as follows :

On Application: Rs 4 per share (including Rs 3 premiums)
On Allotment: Rs 6 per share (including Rs 3 premiums)
On First Call: Rs 5 per share (including Rs 1 premium)
On second and final Call: Balance Amount

The issue was fully subscribed Gopal a shareholder holding 200 shares did not pay the allotment money and Madhav, a holder of 400 shares paid his entire share money along with the allotment money. Gopal’s Shares were immediately forfeited after allotment, Afterwards, the first call was made Krishna, a holder of 100 shares, failed to pay the first call money and Giridhar, a holder of 300 shares, paid the second call money also along with the first call. Krishna’s shares were forfeited immediately after the first call. A second and final call was made afterwards and was duly received. All the forfeited shares were reissued at Rs 9 per share fully paid up.

Pass necessary journal entries for the above transaction in the books of the company.

Concept: Share Capital - Issue and Allotment of Equity Shares
Chapter: [1.02] Accounting for Companies
[8]17.2

JJK Ltd invited application or issuing 50,000 equity shares of 10 each at par. The amount was payable as follows:

On Application: Rs 2 per share
On Allotment: Rs 4 per share
On first and Final Call: Balance Amount

The issue was oversubscribed three times. Applications for 30% shares were rejected and money refunded. 

The allotment was made to the remaining applicants as follows:

Category No. of Shares Applied No. of shares Allotted
I 80,000 40,000
II 25,000 10,000

Excess money paid by the applicants who were allotted shares was adjusted towards the sums due on allotment.

Deepak, a shareholder belonging the Category I, who had applied for 1,000 shares, failed to pay the
allotment money. Raju, a shareholder holding 100 shares, also failed to pay the allotment money. Raju belonged to category II. Shares of both Deepak and Raju were forfeited immediately after allotment. Afterwards, first and final call was made and was duly received. The forfeited shares of Deepak and Raju were reissued at 11 per share fully paid up
Pass necessary journal entries for the above transactions in the books of the company

Concept: Over Subscription of Shares
Chapter: [1.02] Accounting for Companies
[1]18

Give the meaning of 'Cash Flow statement'.

Concept: Concept of Cash Flow Statement
Chapter: [2.02] Cash Flow Statement
[1]19

Will 'Net decrease in working capital' other than cash and cash equivalents, increase, decrease or not change Cash Flow from Operating Activities? Give reason in support of your answer.

Concept: Concept of Cash Flow Statement
Chapter: [2.02] Cash Flow Statement
[4]20

State any one limitation of Analysis of Financial Statement.

Concept: Concept of Financial Statement Analysis
Chapter: [2.01] Analysis of Financial Statements
[4]21

The proprietary ratio of M Ltd. is 0.80:1 State with reasons whether the following transactions will increase, decrease or not change the proprietary ratio:

1) Obtained a loan from bank Rs 2, 00,000 payable after five years.

2) Purchased machinery for cash Rs 75,000

3) Redeemed 5% redeemable preference shares Rs 1,00,000

Issued equity shares to the vendors of machinery purchased for Rs 4,00,000.

Concept: Share Capital - Issue and Allotment of Equity Shares
Chapter: [1.02] Accounting for Companies
[4]22

Financial Statements are prepared following the constituent accounting concepts principles procedures and also the legal environment in which the business organisation operate. These statements are the source of information on the basis of which conclusions are drawn about the profitability and financial position of a company so that their users can easily understand and use them in their economic decisions in a meaningful way.

From the above statements identify any two values that a company should observe while preparing its financial statements. Also, State under which major headings and sub-headings the following items will be presented in the Balance Sheet of a company as per Schedule III of the Companies Act 2013

(1) Capital Reserve
(2) Calls-in-Advance
(3) Loose Tools
(4) Bank overdraft

Concept: Concept of Financial Statements
Chapter: [2.01] Analysis of Financial Statements
[6]23

From the following Balance Sheet as SRS Ltd and the additional information as in 31.3.2016, prepare a Cash Flow Statements :

Balance Sheet of SRS Ltd as at 31-3-2016
Particulars Note
No.

31-03-2016

Rs

31-03-2015

Rs

I. Equity and Liabilities

   1. Shareholder’s Funds

       (a) Share Capital

       (b) Reserve and Surplus

   2. Non - Current Liabilities

      (a) Long-term borrowings

   3. Current Liabilities

      (a) Short-term borrowings

      (b) Short-term provisions

 

 

 

1

 

2

 

3

4

 

 

4,50,000

1,25,000

 

2,25,000

 

75,000

1,00,000

 

 

3,50,000

50,000

 

1,75,000

 

37,500

62,500

Total   9,75,000 6,75,000

II. Assets

    1. Non – Current Assets

       (a) Fixed Assets

           Tangible assets

           Intangible

       (b) Non – Current Investments

    2. Current Assets

     (a) Current Investments

     (b) Inventories

     (c) Cash and Cash

 

 

 

5

6

 

 

 

7

 

 

7,32,500

50,000

75,000

 

20,000

61,000

36,500

 

4,52,500

75,000

50,000

 

35,000

36,000

26,500

Total   9,75,000 6,75,000

 

Note No Particulars

31-3-2016

Rs

31-3-2015

Rs

1

 

Reserve and Surplus

(Surplus i.e. Balance in Statement of Profit and Loss)

1,25,000

 

50,000

 

    1,25,000 50,000

2

 

Long term borrowings :

12 % Debentures

 

2,25,000

 

1,75,000

    2,25,000 1,75,000

3

 

Short-term borrowings :

Bank Overdraft

 

75,000

 

37,500

    75,000 37,500

4

 

Short-term provisions

Provisions for tax

 

1,00,000

 

62,500

    1,00,000 62,500

5

 

 

Tangible Assets

Machinery

Accumulated Depreciation

 

8,37,500

(1,05,000)

 

5,22,500

(70,000)

    7,32,500 4,52,500

6

 

Intangible Assets

Goodwill

 

50,000

 

75,000

    50,000 75,000

7

 

Inventories

Stock in trade

 

61,000

 

36,000

    61,000 36,000

Additional Information:

1) Rs 50,000, 12% debentures were issued on 31.3.2016

2) During the year a piece of machinery costing Rs40,000 on which accumulated depreciation was Rs 20,000 was sold at a loss of Rs 5,000.

Concept: Statement of Profit and Loss and Balance Sheet in the Prescribed Form with Major Headings and Sub Headings
Chapter: [2.01] Analysis of Financial Statements

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