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Accountancy Foreign Set 1 2016-2017 CBSE (Science) Class 12 Question Paper Solution

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Accountancy
Foreign Set 1
2016-2017 March
Marks: 80

[1]1

State the two situations in which interest on partner's capital is generally provided.

Chapter: [1.02] Accounting for Companies
Concept: Accounting for Share Capital
[1]2

Reena and Raman are partners in a firm sharing profits in the ratio of 4 : 3. They admitted Roma as a new partner. The new profit sharing ratio between Reena, Raman and Roma was 3: 2: 2. Raman surrendered `1/3rd `of his share in favour of Roma. Calculate Reena's sacrifice.

Chapter: [1.02] Accounting for Companies
Concept: Accounting for Share Capital
[1]3

Suman and Sudha were partners in  a firm sharing profits equally. Their fixed capitals were Rs 50,000 and Rs 25,000 respectively. The partnership deed provided interest on capital at the rate of 12% per annum. For the year ended 31stMarch, 2016, the profits of the firm were distributed without providing interest on capital.
Pass necessary adjustment entry to rectify the error. 

Chapter: [1.02] Accounting for Companies
Concept: Accounting for Share Capital
[1]4

Y Ltd. invited applications for issuing 2000, 9% debentures of Rs 100 each at a discount of 10%. The whole amount was payable at the time of application. Applications for 2400 debentures were received and pro-rata allotment was made to all the applicants.  
Pass necessary journal entries for the issue of debentures. 

Chapter: [1.02] Accounting for Companies
Concept: Accounting for Share Capital
[1]5

Z Ltd. forfeited 1000 equity shares of Rs 10 each for the non-payment of the final call of Rs 2 per share. Calculate the maximum amount of discount at which these shares can be reissued.

Chapter: [1.02] Accounting for Companies
Concept: Accounting for Share Capital
[1]6

List the categories of individuals other than the minors who cannot become the members of a partnership firm

Chapter: [1.02] Accounting for Companies
Concept: Accounting for Share Capital
[3]7

Raj Motors Ltd. converted its 400, 12% debentures of Rs 100 each issued at a discount of 6% into equity shares of Rs 10 each issued at a premium of 25%. Discount on issue of 12% debentures had not yet been written off.

Showing your working notes clearly, pass necessary journal entries for the above transactions in the books of Raj Motors Ltd.

Chapter: [1.02] Accounting for Companies
Concept: Interest on Debentures
[3]8

P, Q, R and S were partners in a firm sharing profits in the ratio of 5 : 3 : 1 : 1. On 1st January, 2017, S retired from the firm. On S's retirement the goodwill of the firm was valued at Rs 4,20,000. The new profit sharing ratio between P, Q and R will be 4 : 3 : 3.
Showing your working notes clearly, pass necessary journal entry for the treatment of goodwill in the books of the firm on S's retirement.

Chapter: [1.01] Accounting for Partnership Firms
Concept: Change in the Profit Sharing Ratio Among the Existing Partners
[3]9

C India Ltd. purchased machinery from B India Ltd. Payment to B India Ltd. was made as follows:
(i) By issuing 10,000 equity shares of Rs 10 each at a premium of 20%.
(ii) By issuing 1000, 9% debentures of Rs 100 each at a discount of 5%.
(iii) Balance by giving a bank draft of Rs 37,000.

Pass necessary journal entries in the books of C India Ltd. for the purchase of machinery and payment to B India Ltd.  

Chapter: [1.02] Accounting for Companies
Concept: Accounting for Share Capital
[3]10

Gagan Ltd. is registered with an authorised capital of Rs 15,00,00,000 divided into 1,50,00,000 equity shares of Rs 10 each. Subscribed and fully paid up share capital of the company was Rs 5,00,00,000. For providing employment to the local youth and for the development of rural areas of Jharkhand State, the company decided to set up a food processing unit in Hazaribagh. The company also decided to set up skill development centres at Ranchi, Hazaribagh and Ramgarh. To meet its new financial requirements the company decidded to issue 2,00,000 equity shares of Rs 10 each and 2000, 12% debentures of Rs 1,000 each. The issue of shares and debentures was fully subscribed. A shareholder holding 500 shares failed to pay the final call of Rs 3 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 wants to propagate. 

Chapter: [1.02] Accounting for Companies
Concept: Disclosure of Share Capital in Company’S Balance Sheet (Horizontal Form)
[4]11

Pankaj and Naresh were partners in a firm sharing profits in the ratio of 3 : 2. Their fixed capitals were Rs 5,00,000 and Rs 3,00,000 respectively. On 1.1.2017, Saurabh was admitted as a new partner for `1/5th` share in the profits. Saurabh acquired his share of profit from Pankaj. Saurabh brought Rs 3,00,000 as his capital which was to be kept fixed like the capitals of Pankaj and Naresh.
Calculate the goodwill of the firm on Saurabh's admission and the new profit sharing ratio of Pankaj, Naresh and Saurabh. Also, pass necessary journal entry for the treatment of goodwill.  

Chapter: [1.01] Accounting for Partnership Firms
Concept: Change in the Profit Sharing Ratio Among the Existing Partners
[4]12

X, Y and Z were partners in a firm sharing profits in the ratio of 5 : 3 : 2. The firm closes its books on 31st March every year. On 30.9.2016, Z died. The partnership deed provided that on the death of a partner his executors will be entitled to the following :    

(i) Balance in his capital account and interest @ 12% per annum. On 1.4.2016 balance in Z's Capital account was Rs 80,000.

(ii) His share in the profits of the firm in the year of his death, which will be calculated on the basis of rate of net profit on sales of the previous year which was 25%. The sales of the firm till 30.9.2016 were Rs 4,00,000.

(iii) His share on the goodwill of the firm. The goodwill of the firm on Z's death was valued at Rs 3,00,000.

The partnership deed also provided that the following deductions will be made from the amount payable to the executor of the deceased partner:

(i) His drawing in the year of his death. Z has withdrawn Rs 30,000 till 30.9.2016.

(ii) Interest on drawing @ 12% per annum which was calculated as Rs 2,000.

The accountant of the firm prepared Z's Capital Account to be presented to his executor but in a hurry did not complete it. Z's Capital Account as prepared by the firm's accountant is presented below : 

Dr.

                      Z’s Capital Account

Cr.

 Date

    Particulars

Amount

(Rs)

Date

   Particulars

 Amount

(Rs)

2016

 

 

2016

 

 

Sep. 30

……………

30,000

April 1

……………

80,000

Sep. 30

……………

2,000

Sep. 30

……………

4,800

Sep. 30

……………

……...

Sep. 30

……………

20,000

 

 

 

Sep. 30

……………

……...

 

 

 

Sep. 30

……………

……...

 

 

1,64,800

 

 

1,64,800

 

 

 

 

 

 

 

You are required to complete Z's Capital Account. 


 

Chapter: [1.01] Accounting for Partnership Firms
Concept: Preparation of Revaluation Account and Balance Sheet
[6]13

Manu, Hary, Ali and Reshma were partners in a firm sharing profits in the ratio of 2 : 2 : 1 : 5. On 1.4.2016 their Balance Sheet was as follows: 

                                 Balance Sheet of Manu, Hary, Ali and Reshma

as on 1.4.2016

           Liabilities

Amount

(Rs)

             Assets

Amount

(Rs)

Capitals:

 

Fixed Assets

8,00,000

Manu

2,00,000

 

Current Assets

2,40,000

Hary

2,50,000

 

 

 

Ali

1,50,000

 

 

 

Reshma

3,50,000 9,50,000

 

 

 

 

 

 

Sundry Creditors

45,000

 

 

Workmen Compensation Reserve

45,000

 

 

 

10,40,000

 

10,40,000

 

 

 

 

From the above date partners decided to share future profits equally. For this purpose the goodwill of the firm was valued at Rs 40,000. The partners also agreed for the following:

(i) Claims against Workmen Compensation Reserve was estimated at Rs 50,000. Fixed assets were to be depreciated by 10%.

(ii) Capitals of the partners were to be adjusted according  to the new profit sharing ratio, for this necessary cash will be brought or paid.

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

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

On 1.4.2015 PPR Ltd. issued 1500, 10% debentures of Rs 100 each at a discount of 3%, redeemable at a premium of 8% after three years. The company closes its books on 31st March every year. Interest on 10% debentures is payable on 30th September and 31st March. Rate of tax deducted at source is 10%.

Pass necessary journal entries for the issue of 10% debentures and interest for the year ended 31.3.2016

Chapter: [1.02] Accounting for Companies
Concept: Meaning and Concept of Debentures
[6]15

Pass necessary journal entries on the dissolution of a firm in the following cases :  (6)

(i) Dissolution expenses were Rs 700.
 
(ii) Dissolution expenses Rs 1,100 were paid by partner 'A'.

(iii) Partner 'B' agreed to do the work of dissolution for a commission of Rs 2,000. He also agreed to bear the dissolution expenses. Actual dissolution expenses Rs 2,100 were paid by B.

(iv) Partner 'C' was appointed to look after the dissolution work for a remuneration of Rs 10,000. He also agreed to bear the dissolution expenses. Actual dissolution expenses Rs 9,800 were paid from the firm's bank account.

(v) Partner 'D' was appointed to look after the dissolution work for a remuneration of Rs 15,000. He also agreed to bear the dissolution expenses. Actual dissolution expenses Rs 13,000 were paid by partner 'E' on behalf of partner 'D'.

(vi) Partner 'F' was appointed to look after the process of dissolution for a remuneration of Rs 9,000. He also agreed to pay the dissolution expenses. 'F' took away furniture of Rs 9,000 as his remuneration. Furniture had already been transferred to realisation account.

Chapter: [1.01] Accounting for Partnership Firms
Concept: Dissolution of a Partnership Firm - Settlement of Accounts
[8]16 | Attempt any one of the following
[8]16.1

A and Z are partners in a firm sharing profits in the ratio of 7 : 3. Their Balance Sheet as on 31.3.2016 was as follows was as follows: 

                                  Balance Sheet of A and Z

                                       as on 31.3.2016

         Liabilities

Amount

(Rs)

              Assets

Amount

(Rs)

Sundry Creditors

60,000

Cash

36,000

Provision for Bad Debts

6,000

Debtors

54,000

Outstanding Wages

9,000

Stock

60,000

General Reserve

15,000

Furniture

1,20,000

 

 

Plant & Machinery

120,000

Capitals:

 

 

 

A

1,20,000

 

 

 

Z

1,80,000

3,00,000

 

 

 

3,90,000

 

3,90,000

 

 

 

On the above date B was admitted for `1/4` share in the profits on the following terms:
(i) B will bring Rs 90,000 as his capital and Rs 30,000 as his share of goodwill premium, half of which will be withdrawn by A and Z.
(ii) Debtors Rs 4,500 will be written off and a provision of 5% will be created on debtors for bad and doubtful debts.
(iii) Outstanding wages will be paid off.
(iv) Stock will be depreciated by 10%, furniture by Rs 1,500 and Machinery by 8%.

(v) Investments of 7,500 not shown in the Balance Sheet will be reccorded.
(vi) A creditor of Rs 6,300 not recorded in the books was to be taken into account.

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

N, S and G were partners in a firm sharing profits and losses in the ratio of 2 : 3 : 5. On 31.3.2016 their Balance Sheet was as under:

Chapter: [1.01] Accounting for Partnership Firms
Concept: Preparation of Revaluation Account and Balance Sheet
[8]16.2

N, S and G were partners in a firm sharing profits and losses in the ratio of 2 : 3 : 5. On 31.3.2016 their Balance Sheet was as under: 

                                         Balance Sheet of N, S and G

                                                 as on 31.3.2016

       Liabilities

Amount

(Rs)

             Assets

Amount

(Rs)

Creditors

1,65,000

Cash

1,20,000

General Reserve

90,000

Debtors

1,35,000

 

Capitals:

 

Less Provision

15,000

1,20,000

N

2,25,000  

Stock

1,50,000

S

3,75,000  

Machinery

4,50,000

G

4,50,000 10,50,000

Patents

90,000

 

 

Building

3,00,000

 

 

Profit & Loss Account

75,000

 

13,05,000

 

13,05,000

 

 

 

G retired on the above date and it was agreed that:
(i) Debtors of Rs 6,000 will be written off as bad debts and a provision of 5% on debtors for bad and doubtful debts will be maintained.
(ii) Patents will be completely written off and stock, machinery and building will be depreciated by 5%.
(iii) An unrecorded creditor of Rs 30,000 will be taken into account.
(iv) N and S will share the future profits in the ratio of 2 : 3 ratio.
(v) Goodwill of the firm on G’s retirement was valued at Rs 90,000.
Pass necessary journal entries for the above transactions in the books of the firm on G’s retirement.

Chapter: [1.01] Accounting for Partnership Firms
Concept: Preparation of Revaluation Account and Balance Sheet
[8]17 | Attempt any one of the following
[8]17.1

BBG Ltd. invited applications for issuing 2,00,000 equity shares of Rs 10 each at a premium of Rs 10 per share. The amount was payable as follows:  

On Application − Rs 4 per share (including Rs 2 premium)
On Allotment − Rs 5 per share (including Rs 2 premium)
On First call − Rs 5 per share (including Rs 3 premium)
On Second and final call − Balance amount 

The issue was fully subscribed. Raghu, a shareholder holding 1000 shares, failed to pay the allotment money and Rahim, another shareholder holding 1500 shares, paid his entire share money along with allotment. Raghu's shares were forfeited immediately after allotment. Afterwards, the first call was made Deenanath, a shareholder holding 500 shares, failed to pay the first call money and Dayal, a shareholder holding 600 shares, paid his second call money along with the first call. Deenanath's shares were forfeited immediately after the first call. Later on the second call was made which was duly received.

Pass necessary journal entries for the above transactions in the books of BBG Ltd.

Chapter: [1.02] Accounting for Companies
Concept: Issue of Debentures at Par at Premium and at Discount
[8]17.2


Joy Ltd. invited applications for issuing 20,000 equity shares of Rs 10 each at par. The amount was payable as follows:
 

On Application − Rs 3 per share
On Allotment − Rs 4 per share
On First and find call − Balance amount


The issue was oversubscribed by three times. Applications for 20% shares were rejected and the money was refunded. Allotment was made to the remaining applicants as ffollows: 

Category No. of Shares Applied No. of Shares Allotted
I 30,000 15,000
II 18,000 5,000

Excess money received with applications was adjusted towards sums due on allotment. Money in excess to sums due on allotment was adjusted towards sums due on first and final call and any money in excess to sums due on first and final call was refunded. Kavi, a shareholder who had applied for 600 shares, failed to pay the remaining allotment money and his shares were immediately forfeited. Kavi belonged to Category I.

Afterwards the first and final call was made. Gupta, who had applied for 400 shares, failed to pay the first and final call. Gupta also belonged to Category I.

Shares of Gupta were also forfeited after the first and final call. The forfeited shares were reissued at Rs 12 per share fully paid up.

Pass necessary journal entries for the above transactions in the books of Joy Ltd.

Chapter: [1.02] Accounting for Companies
Concept: Issue of Debentures at Par at Premium and at Discount
[1]18

What is meant by 'Cash Flow from Investing Activities'?  

Chapter: [2.01] Analysis of Financial Statements
Concept: Cash Flow Analysis
[1]19

J.K. Ltd. purchased machinery on deferred payment basis. During the year ended 31.3.2016 the company paid in instalment of Rs 4,00,000 which included interest of Rs 40,000. While preparing cash flow statement, under which type of activities will this payment be classified? Also, mention the amount involved in each activity.

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

What is meant by 'Analysis of Financial Statements'? State any two objectives of such an analysis.

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

State with reason whether the following transactions will increase, decrease or not change the 'Return on Investment': 

(i) Purchase of machinery worth Rs 2,00,000 by issue of equity shares.
(ii) Charging depreciation of Rs 5,000 on machinery.
(iii) Redemption of debentures in cash Rs 70,000.
(iv) Converting Rs 50,000, 9% debentures into equity shares.

Chapter: [2.02] Cash Flow Statement
Concept: Concept of Cash Flow Statement
[4]22

Financial statements are prepared following the consistent accounting concepts, principles, procedures and also the legal environment in which the business organisations 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.

From the above statement 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:  


(i) Calls-in-arrears
(ii) Calls-in-advance
(iii) Gain on reissue of forfeited equity shares
(iv) Trade payables to be settled beyond 12 months from the date of Balance Sheet

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

Following is the Balance Sheet of J.M. Ltd. as at 31.3.2016:   

                         J.M. Ltd. Balance Sheet as at 31.3.2016

                Particulars

NoteNo.

31.03.2016

(Rs)

31.03.2015

(Rs)

I. Equity and Liabilities :

(1) Shareholder's Funds:

     

(a) Share Capital

 

2,25,000

1,75,000

(b) Reserves and Surplus

1

62,500

25,000

       

(2) Non-current Liabilities:

     

Long-Term Borrowings

2

1,12,500

87,500

       

(3) Current Liabilities:

     

(a) Short-term Borrowings

3

37,500

18,750

(b) Short-term Provisions

4

50,000

31,250

Total

  4,87,500

3,37,500

II. Assets:

     

(1) Non-current Assets:

     

(a) Fixed Assets:

     

(i) Tangible

5

3,66,250

2,28,750

(ii) Intangible

6

25,000

37,500

       

(b) Non-current Investments

 

37,500

25,000

       

(2) Current Assets:

     

(a) Current Investments

 

10,000

17,500

(b) Inventories

7

30,500

18,000

(c) Cash and Cash Equivalents

 

18,250

10,750

Total

 

4,87,500

3,37,500

 

            Notes to Accounts :

 

Note

No.

                          Particulars

31.03.2016

(Rs)

31.03.2015

(Rs)

(1)

Reserves and Surplus

 

 

 

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

62,500 25,000

 

 

62,500 25,000

 

 

 

 

(2)

Long-term Borrowings

 

 

 

12% Debentures

1,12,500

87,500

 

 

1,12,500

87,500

 

 

 

 

(3)

Short-term Borrowings

 

 

 

Bank overdraft

37,500 18,750

 

 

37,500 18,750

 

 

 

 

(4)

Short-term Provisions

 

 

 

Proposed Dividend

50,000 31,250

 

 

50,000 31,250

 

 

 

 

(5)

Tangible Assets

 

 

 

Machinery

4,18,750 2,63,750

 

Accumulated Depreciation

(52,500) (35,000)

 

 

3,66,250 2,28,750

 

 

 

 

(6)

Intangible Assets

 

 

 

Goodwill

25,000 37,500

 

 

25,000

37,500

 

 

 

 

(7)

Inventories

 

 

 

Stock in Trade

30,500 18,000

 

 

30,500 18,000

 

 

Additional Information :
 
(1) Rs 25,000, 12% Debentures were issued on 31.3.2016.
 
(2)  During the year a piece of machinery costing Rs 20,000 on which accumulated depreciation was Rs 10,000 was sold at a loss of Rs 2,500.
 
Prepare a Cash Flow Statement.
Chapter: [1.02] Accounting for Companies
Concept: Accounting for Share Capital

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