ISC (Commerce) Class 12 - CISCE Important Questions for Accounts

Give the formula for valuation of goodwill by the Capitalisation of Average Profit Method.

On 1^st April, 2020, Anish started a business with a capital of ₹ 3,00,000.
During the three years ending 31^st March, 2023, the results of his business were:

From the year 2020-21 to the year 2022-23, Anish withdrew ₹ 30,000 from the firm for his personal use.
On 1st April, 2023, he admitted Danish into partnership on the following terms:

1. Goodwill of the firm to be valued at two years’ purchase of the average profits of the last three years.
2. Danish to have a `1/4` share in the future profits.
3. Danish’s capital is to be equal to `1/4` of Anish’s capital determined on 1^st April, 2023, after the goodwill compensation has been taken into account.

You are required to give:

1. The formula to calculate goodwill by the Average Profit Method.
2. The value of self-generated goodwill of the firm.
3. Danish’s capital contribution.

Choose the components required to calculate goodwill of a firm by capitalisation of average profits method.

P: The normal profits of a similar firm in the industry.

Q: The average profits of the firm.

R: The number of years purchase.

S: The actual capital employed in the business.

Aman and Vinod are partners in a firm. Their Balance Sheet showed:

Gross Debtors: ₹ 1,52,000

Provision for doubtful debts: ₹ 1,000

On Milin’s admission as a new partner, the assets and liabilities are to be revalued as:

1. Unaccounted accrued income of ₹ 10,000 to be provided for.
2. Bills Payable of ₹ 10,000 which were recorded, to be discharged at a rebate of 10%.
3. Debtors of ₹ 2,000 to be irrecoverable.
4. Provision for doubtful debts to be provided @ 2% of the debtors.

What is the net effect of revaluation of assets and liabilities?

Anita and Binita are partners in a firm. Anita had taken a loan of ₹ 15,000 from the firm. How will Anita’s loan be closed in the event of dissolution of the firm?

Mita and Sita, sharing profits in, the ratio 2 : 1, decided to dissolve their partnership firm on 31^st March, 2022, on which date their Balance Sheet was as under:

The partnership firm was dissolved on the date of the Balance Sheet subject to the following adjustments:

1. Trade creditors accepted plant and machinery at an agreed valuation of 10% less than the book value and the balance in cash in full settlement of their claims.
2. Debtors of ₹ 1,000 proved bad.
3. Sita took over the stock at a discount of 20%.
4. Realisation expenses of ₹ 1,100 were paid by the firm.

You are required to prepare the Realisation Account.

Choose the correct order in which a partnership firm, at the time of its dissolution, will apply the amount realised from the sale of its assets, including any amount contributed by the partners, towards the payment of:

P: Partners' loan

Q: Firm's debts

R: Balance of partners' capital

S: Surplus divided amongst the partners in their profit-sharing ratio

Assertion: A revaluation account is prepared at the time of dissolution of a partnership.

Reason: A revaluation account is prepared to determine the net gain/loss on realisation of assets and settlement of liabilities.

Which one of the following is correct?

A firm having a debtor of ₹ 30,000 from whom the amount was due on 30^th June, 2023, gets dissolved on 31st March, 2023. The debtor cleared his dues on the date of dissolution of the firm at a discount of 4% per annum.

Give the journal entry passed by the firm to realise the payment from the debtor.

Ira (a partner in a firm) was allowed to retain the whole of the stock as her remuneration for services rendered by her in the course of dissolution of the firm. The value of stock was ₹ 10,000 which had been transferred to the Realisation Account.

Complying with the accounting principle of full disclosure, record the above transaction in the books of the partnership firm at the time of its dissolution.

Mention the liability of a partnership firm which is not shown in its balance sheet but is paid off at the time of the dissolution of the firm.

Stem Ltd. came up with an IPO inviting the public to subscribe to its Equity shares of ₹10 each. The issue was over-subscribed. The company allotted 80,000 shares to all the applicants making a pro-rata allotment in the ratio of 3:2.
The face value of the share was payable in three instalments.
Based on the information given above and the following extract of ledger accounts and Cash Book (Bank Column), answer the questions that follow:

1. What are the number of shares applied for by the public?
2. What is the amount payable per share with application?
3. What is the amount payable per share with first and final call?
4. Stem Ltd. did not receive the allotment money and call money due from the shareholder Rehan, who had applied for 3,000 shares. What is the amount received by Stem Ltd. with allotment?
5. Stem Ltd. forfeited Rehan’s shares after the final call. It reissued 1,500 forfeited shares fully called up @ ₹13 per share
   Give the journal entries passed by the company for:
   1. Forfeiture of these shares
   2. Reissue of the forfeited shares

On 1st April, 2012, Neptune Finance Company (a listed NBFC) issued 4,000, 9% Debentures of ₹ 100 each to be redeemed at a premium of 5% on 31st March, 2021.

You are required to pass necessary journal entries for the issue and redemption of debentures.

Suhas Ltd. issued 1,000, 7% Debentures of ₹ 100 each to be redeemed after three years at a premium of 5%. The face value of the debentures was payable as:

₹ 20 on Application

₹ 30 on Allotment (on 1st May, 2020)

₹ 30 on First call (on 1st October, 2020)

₹ 20 on Final call (on 1st January, 2021)

All the debentures were applied and allotted.

Ali, to whom 20 debentures were allotted, paid the allotment money and the two calls on 31st March, 2021. The Articles of Association of the company provided for interest on calls-in-arrear to be charged @ 10% per annum, which Ali paid on 31st March, 2021.

You are required to pass journal entries in the books of Suhas Ltd. to record:

• The adjustment and receipt of interest on calls in arrears
• The entry to close the interest on calls in arrears account

Select the correct statement from the following options.

On 1st April, 2021, Bhim Ltd. issued 2,000, 5% Debentures of ₹ 100 each as follows:

The interest on these debentures was to be paid annually on 31st March, every year, by the company.

You are required to calculate interest on these debentures payable by the company on 31st March, 2022.

During the year 2021-22 SM Ltd. issued 10,000, 10% Debentures of ₹ 100 each at a discount of 10% to be redeemed after three years. The company had a balance of ₹ 60,000 in its Securities Premium Reserve.

What amount will be added under Operating Activities as Discount on Issue of Debentures written off in the Cash Flow Statement of SM Ltd. for the year 2021-22?

Xylo Ltd. issued 9,000, 7% Debentures of ₹ 100 each at a certain rate of discount. After writing off the discount on the issue of debentures, the company was left with a balance of ₹ 35,000 in its Securities Premium out of the original amount of ₹ 71,000.

At what rate of discount did the company issue these Debentures?

The Balance Sheet of Anjum Ltd. as at 31st March 2022, had outstanding 1,000, 8% Debentures of ₹ 100 each. These debentures were to be redeemed by the company on 31st March 2023. Give the journal entry for the amount due to the Debenture holders on 31st March 2023, including the interest on debentures due to them.

On 1st April, 2023, Ruth Ltd. purchased Plant and Machinery for ₹ 11,00,000 from Pablo Ltd. payable as to ₹ 1,00,000 by accepting a promissory note and the balance by an issue of 11% Debentures of ₹ 100 each at a premium of 10% to be redeemed at a premium of 2 % after six years. You are required to pass journal entries in the books of Ruth Ltd. only to record the payment made to Pablo Ltd.