Arts (English Medium) Class 12 - CBSE Important Questions for Accountancy

Which of the following are not tools of Financial Analysis?

1. Cash Flow Statement
2. Income Statement
3. Balance Sheet
4. Ratio Analysis

From the following details obtained from the financial statements of JN Ltd. calculate 'interest coverage ratio'. Net profit after tax Rs.2, 00,000; 12% Long-Term Debt Rs.40, 00,000; Rate of tax 40%.

From the following information calculate inventory turnover ratio; Revenue from operations Rs.16,00,000; Average Inventory Rs.2,20,000; Gross Loss Ratio 5%.

From the Following information , compute Debt-Equity Ratio:

                                              Rs.

Long Term Borrowings          2,00,000

Long Term Provision             1,00,000

Current Liabilities                    50,000

Non-Current-Assets              3,60,000

Current -Assets                       90,000

The quick ratio of a company is 1.5: 1. A state with reason which of the following transactions would

i. increase:
ii. decrease or
iii. not change the ratio

a. Paid rent Rs 3,000 in advance.
b. Trade receivables included a debtor Shri Ashok who paid his entire amount due Rs 9,700.

From the following information, calculate the value of opening and closing inventory:

Inventory Turnover Ratio - 4 times.

Gross Profit = 20% on Revenue from Operations.

Revenue from Operations = ₹ 10,00,000.

Opening inventory is 25% of the inventory at the end.

Debt-Equity Ratio of Z Ltd. is 2: 1. State with reason whether the following transactions will improve, decline or will not change the debt-equity ratio:

1. Conversion of ₹ 3,00,000, 9% debentures into equity shares.
2. Cash received from debtors ₹ 1,00,000.
3. Redemption of ₹ 10,00,000, 11% debenture.
4. Purchase of goods on credit ₹ 4,00,000.

Vikas, Vishal and Vaibhav were partners in a firm sharing profits in the ratio of 2:2:1. The firm closes its books 31st March every year. On 31-12-2015 Vaibhav died. On that date his Capital account showed a credit balance of Rs. 3, 80,000 and Goodwill of the firm was valued at 1, 20,000. There was a debit balance of Rs. 50,000 in the profit and loss account. Vaibhav's share of profit in the year of his death was to be calculated on the basis of the average profit of last five years. The average profit of last five years was Rs. 75,000.

Pass necessary journal entries in the books of the firm on Vaibhav's death.

Kumar, Gupta and Kavita were partners in the firm sharing profits and losses equally. The firm was engaged in the storage and distribution of canned juice and its godowns were located at three different places in the city. Each godown was being managed individually by Kumar, Gupta and Kavita. Because of increase in business activities at the godown managed by Gupta, he had devoted more time. Gupta demanded that his share in the profits of the firm be increased, to which Kumar and Kavita agreed. The new profit sharing ratio was agreed to be 1: 2: 1. For this purpose, the goodwill of the firm was valued at two years purchase of the average profits of last five years. The profits of the last five years were as follows :

You are required to:

1) Calculate the goodwill of the firm

2) Pass necessary Journal Entry for the treatment of goodwill on the change in profit sharing ratio of Kumar, Gupta and Kavita.

Hemant and Nishant were partners in the firm sharing profits in the ratio of 3:2. Their capitals were Rs 1,60,000 and Rs 1,00,000 respectively. They admitted Somesh on 1st April 2013 as a new partner for 1/5 share in the future profits. Somesh brought Rs 1,20,000 as his capital. Calculate the value of goodwill of the firm and record necessary journal entries for the above transactions on Somesh's admission.

Describe two basic methods of charging depreciation.

Differentiate between the straight line method and the written-down value method.

A and B were partners in a firm sharing profits equally. Their capitals were : A ₹ 1,20,000 and B ₹ 80,000. The annual rate of interest is 20%. The profits of the firm for the last three years were ₹ 34,000; ₹ 38,000 and ₹ 30,000. They admitted C as a new partner. On C's admission the goodwill of the firm was valued at 2 years purchase of the super profits.

Calculate the value of goodwill of the firm on C's admission. 

Indu, Vijay, and Pawan were partners in a firm sharing profits in the ratio of 4 : 3 : 3. They admitted Subhash into partnership with effect from 1^st April, 2022. New profit sharing ratio among Indu, Vijay, Pawan, and Subhash will be 3 : 3 : 2 : 2. An extract of their Balance Sheet as at 31^st March, 2022, is given below:

Which of the following is the correct accounting treatment of ‘investment fluctuation reserve’ at the time of Subhash’s admission?

Aayush and Aarushi are partners sharing profits and losses in the ratio of 3 : 2. They admitted Naveen into partnership for 1/4^th share. Goodwill of the firm was to be valued at three years' purchase of super profits. Average net profit of the firm was ₹ 20,000. Capital investment in the business was ₹ 50,000 and Normal Rate of Return was 10%. Calculate the amount of Goodwill premium brought by Naveen. 

Vikas, Vishal and Vaibhav were partners in a firm sharing profits in the ratio of 2:2:1. The firm closes its books 31st March every year. On 31-12-2015 Vaibhav died. On that date his Capital account showed a credit balance of Rs. 3, 80,000 and Goodwill of the firm was valued at 1, 20,000. There was a debit balance of Rs. 50,000 in the profit and loss account. Vaibhav's share of profit in the year of his death was to be calculated on the basis of the average profit of last five years. The average profit of last five years was Rs. 75,000.

Pass necessary journal entries in the books of the firm on Vaibhav's death.

Manav, Nath and Narayan were partners in a firm sharing profits in the ratio of 1: 2: 1. The firm closes its books on 31st March every year. On 30th September, 2015 Nath died. On that date his capital account showed a debit balance of Rs.5,000. There was a debit balance of Rs.30,000 in the profit and loss account. The goodwill of the firm was valued at Rs.3,80,000. Nath's share of profit in the year of his death was to be calculated on the basis of average profit of last 5 years, which was Rs.90,000.

Pass necessary journal entries in the books of the firm on Nath's death.

Distinguish between ‘Dissolution of partnership’ and Dissolution of partnership firm ‘on the basis of closure of Books.

Virad, Vishad and Roma were partners sharing profits in the ratio of 5 : 3: 2 respectively. On March 31, 2013, their Balance Sheet as under.

Virad died on October 1, 2013. It was agreed between his executors and the remaining partner's that:

a. Goodwill of the firm is valued at 2 ½ years purchase of average profits for the last three years. The average profits were Rs.1,50,000.

b. Interest on capital is provided at 10% p.a.

c. Profit for the year 2013-14 is taken as having accrued at the same rate as that of the previous year which was Rs.1,50,000.

Prepare Virad's Capital Account to be presented to his Executors as on October 1, 2013.

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.

Your are required to complete Ashok’s Capital Account.