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

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Answer briefly of the following question :

Give the adjusting entry and closing entry for interest on loan taken by a partner from the firm, when the firm
follows the Fluctuating Capital Method.

Appears in 1 question paper
Chapter: [0.011000000000000001] Fundamentals of Partnership
Concept: Methods of Capital Accounts - Fixed and Fluctuating Capital Method

Answer briefly of the following question :

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

Appears in 1 question paper
Chapter: [0.012] Goodwill
Concept: Practical Application of Average Profit Method

Answer briefly of the following question:

Give any two differences between Revaluation Account and Realisation Account.

Appears in 1 question paper
Chapter: [0.013000000000000001] Reconstitution of Partnership
Concept: Preparation of Revaluation Account and Balance Sheet

Asif and Ravi are partners in a firm, sharing profits and losses in the ratio of 3:2. Their fixed capitals as on 1st
April, 2016, were Rs. 6,00,000 and ` 4,00,000 respectively.
Their partnership deed provides for the following:.
(a) Partners are to be allowed interest on their capital @ 10% per annum.
(b) They are to be charged interest on drawings @ 4% per annum.
(c) Asif is entitled to a salary of Rs. 2,000 per month.
(d) Ravi is entitled to a commission of 5% of the correct net profit of the firm before charging such commission.
(e) Asif is entitled to a rent of Rs. 3,000 per month for the use of his premises by the firm.
The net profit of the firm for the year ended 31st March, 2017, before providing for any of the above clauses
was Rs. 4,00,000.
Both partners withdrew Rs. 5,000 at the beginning of every month for the entire year.
You are required to prepare a Profit and Loss Appropriation Account for the year ended 31st March, 2017.

Appears in 1 question paper
Chapter: [0.013000000000000001] Reconstitution of Partnership
Concept: Change in Profit Sharing Ratio

Rita, Nina and Mita are partners in a firm sharing profits and losses in the ratio of 3:2:1. Mita dies on 1st
April, 2017. On the date of her death, it was decided to value goodwill on the basis of two years' purchase of
weighted average profits of the firm for the last three years.
The profits of the last three years and weights assigned were :

Year Profit Weights assigned
2014-15
       30,000
(including gain from speculation ` 10,000)

1

 

2015-16 80,000 2
2016-17 1,00,000 3

(i) Calculate the firms goodwill on the date of Mita's death (show working formula).
(ii) Pass the necessary journal entry to credit Mita's capital account with her share of goodwise.

Appears in 1 question paper
Chapter: [0.013000000000000001] Reconstitution of Partnership
Concept: Change in Profit Sharing Ratio

Annie and Bonnie are partners in a firm, sharing profits and losses equally. Their Balance Sheet as at 31st March,
2017, was as follows:

                        Balance Sheet of Annie and Bonnie
                               As at 31st March, 2017

Liabilities Amount Rs. Assets AmountRs.
Sundry Creditors           21,000 Cash at Bank 20,000
General Reserve           15,000

Sundry Debtors                   22,000

Less Provision for Doubtful Debts                    (1,000)

 

 

 

21,000

Capital A/c

Annie 45,000

Bonnie40,000

 

 

          85,000

Stock 10,000
    Plant & Machinery 60,000
    Goodwill 10,000
  1,21,000   1,21,000

Carl was to be taken as a partner for 1/4 share in the profits of the firm, with effect from 1st April, 2017, on the
following terms:
(a) Bad debts amounting to Rs. 1,500 to be written off.
(b) Stock to be taken over by Annie at Rs.12,000.

(c) Plant and Machinery to be valued at Rs. 50,000.
(d) Goodwill of the firm to be valued at Rs. 20,000.
(e) Carl to bring in Rs. 50,000 as his capital. He was unable to bring his share of goodwill in cash.
(f) General Reserve not to be distributed. For this, it was decided that Carl would compensate the old partners
through his current account.
You are required to:
(i) Pass journal entries on the date of Carl's admission.
(ii) Prepare the Balance Sheet of the reconstituted firm

Appears in 1 question paper
Chapter: [0.013000000000000001] Reconstitution of Partnership
Concept: Preparation of Revaluation Account and Balance Sheet

Harish, Paresh and Mahesh were three partners as sharing profits and losses in the ratio of 5:4:1. Paresh retired on 31st March, 2017. His capital on 1st April, 2016, was Rs. 80,000. During the year 2016-17, he made drawings of Rs. 5,000. He was to be charged interest on drawings of ` 100. The partnership deed provides that on the retirement of a partner, he will be entitled to:

(i) His share of capital.

(ii) Interest on capital @ 10% per annum.

(iii) His share of profit for the year of his retirement.

(iv) His share of goodwill in the firm.

(v) His share in the profit/loss on revaluation of assets and liabilities.

Additional information:

(a) Paresh's share in the profits of the firm for the year 2016-17 was Rs. 20,000.

(b) Goodwill of the firm was valued at Rs. 24,000.

(c) The firm suffered a loss of Rs.12,000 on the revaluation of assets and liabilities.

(d) It was decided to transfer the amount due to Paresh to his loan account bearing interest @ 6% per annum. The loan was to be repaid in two equal annual instalments, the first instalment to be paid on 31st March, 2018.

You are required to prepare:

(i) Paresh's Capital Account.

(ii) Paresh's Loan Account till it is finally closed.

Appears in 1 question paper
Chapter: [0.013000000000000001] Reconstitution of Partnership
Concept: Retirement and Death of a Partner - Calculation of New Profit Sharing Ratio

Parth, Angad and Leesha are partners in a firm sharing profits and losses in the ratio of 3:2:1 respectively. Angad retires and his claim, including his Capital and entitlements from the firm including his share of Goodwill of the firm, is Rs. 50,000. After this amount was determined, it was found that there was an unrecorded piece of furniture valued at Rs.12,000 which had to be recorded. Upon recording this piece of furniture, the revised amount due to Angad was determined and settled by giving him this piece of furniture and the balance in cash. You are required to give the journal entries for recording the payment to Angad in the books of the firm.

Appears in 1 question paper
Chapter: [0.013000000000000001] Reconstitution of Partnership
Concept: Retirement and Death of a Partner - Calculation of New Profit Sharing Ratio

Susan, Geeta and Rashi are partners sharing profits and losses in the ratio of 5:3:2. Their Balance Sheet as at 31st March, 2017, is as under:

Balance Sheet of Susan, Geeta and Rashi As at 31st March, 2017

Liabilities Amount Assets Amount
Sundry Creditors          50,000  Cash at Bank 70,000
Workmen Compensation Reserve          25,000 

Sundry Debtor 65,000

Less Provision for Doubtful Debts (5,000

 

 

                     60,000 

Employees Provident Fund           5,000  Goodwill                      50,000 
Bank Loan         55,000  Furniture                   1,00,000 

Capital A/C

Susan                            2,20,000 

Geeta                            1,70,000 

Rashi                             1,35,000 

 

 

 

5,25,000 

Building                   3,80,000 
  6,60,000    6,60,000 

The partners decided to dissolve their partnership on 31st March, 2017. The following transactions took place at the time of dissolution :

(a) Realization expenses of 2,000 were paid by Susan on behalf of the firm.

(b) Geeta took over the goodwill for her own business at  40,000.

(c) Building was taken over by Rashi at 3,00,000.

(d) Only 80% of the debtors paid their dues.

(e) Furniture was sold for  97,000.

(f) Bank Loan was settled along with interest of 5,000. You are required to prepare the Realization Account.

Appears in 1 question paper
Chapter: [0.013000000000000001] Reconstitution of Partnership
Concept: Preparation of Revaluation Account and Balance Sheet

The capital accounts of Amar and Harsh stood at  20,000 and 30,000 respectively after the necessary
adjustments in respect of drawings and net profit for the year ended 31st March, 2017. lt was subsequently
ascertained that interest on capital @ 12% per annum was not taken into account while arriving at the
divisible profits for the year.
During the year 2016-17, Amar had withdrawn 2,000 and Harsh's drawings were ` 1,000.
The net profit for the year amounted to  15,000.
The partners shared profits and losses in the ratio of 3:2.
You are required to pass the necessary journal entries to rectify the error in accounting.

Appears in 1 question paper
Chapter: [0.013000000000000001] Reconstitution of Partnership
Concept: Adjustment of old partner’s Capital Accounts on the basis of the new partner’s capital

State whether the following would result in inflow, outflow or no flow of cash:
(i) Bill Receivable endorsed to Creditors.
(ii) Old vehicle written off.

Appears in 1 question paper
Chapter: [0.013000000000000001] Reconstitution of Partnership
Concept: Adjustment of old partner’s Capital Accounts on the basis of the new partner’s capital

Which of the following transactions is debited to Revaluation Account?

Appears in 1 question paper
Chapter: [0.013000000000000001] Reconstitution of Partnership
Concept: Preparation of Revaluation Account and Balance Sheet

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?

Appears in 1 question paper
Chapter: [0.013000000000000001] Reconstitution of Partnership
Concept: Dissolution of Partnership Firm

At the time of dissolution of a partnership firm, its Balance Sheet showed the stock of ₹ 30,000 comprising easily marketable items, obsolete items and a few miscellaneous other items. These items were realized as:

  • Easily Marketable Items: 65% of the total inventory in full.
  • Obsolete items: 20% of the total inventory had to be discarded.
  • The miscellaneous other items in the stock are at 40% of their book value.

You are required to pass the journal entry for the realisation of stock.

Appears in 1 question paper
Chapter: [0.013000000000000001] Reconstitution of Partnership
Concept: Dissolution of a Partnership Firm - Preparation of Realization Account, and Other Related Accounts

Naresh, Dhruv and Azeem are partners sharing profits in the ratio of 5:3:7.

Naresh retires from the firm. Dhruv and Azeem decided to share profits in the ratio of 2:3.

The adjusted capital accounts of Dhruv and Azeem at the time of Naresh’s retirement showed the balances of ₹ 33,000 and ₹ 70,500 respectively.

The total amount to be paid to Naresh is ₹ 90,500 which is paid in cash immediately by the firm, the cash being contributed by Dhruv and Azeem in such a way that their capitals become proportionate to their new profit-sharing ratio and the firm maintains a minimum cash balance of ₹ 5,000 from its existing balance of ₹ 20,000.

You are required to pass journal entries to record:

  • Payment made to the retiring partner
  • Cash brought in by the remaining partners to pay off the retiring partner
Appears in 1 question paper
Chapter: [0.013000000000000001] Reconstitution of Partnership
Concept: Retirement and Death of a Partner - Adjustment of Capitals

Ravi, Vijay and Sujay were partners sharing profits in the ratio of `1/2 : 1/3 : 1/6`.

Vijay decided to retire, his share being taken up by the remaining partners in the ratio 1 : 4.

On Vijay’s retirement, a loss of ₹ 12,000 was determined upon revaluation of assets and liabilities.

You are required to:

  1. Calculate the new profit-sharing ratio of the remaining partners.
  2. Pass the journal entry to write off the loss on revaluation of assets and liabilities.
Appears in 1 question paper
Chapter: [0.013000000000000001] Reconstitution of Partnership
Concept: Retirement and Death of a Partner - Calculation of New Profit Sharing Ratio

Sita and Gita were partners sharing profits and losses in the ratio of 4 : 5. They dissolved their partnership on 31st March, 2021, when their Balance Sheet showed the following balances:

Particulars (₹)
Sita’s Capital 30,000
Gita’s Capital 35,000
Gita’s Current A/c (Dr) 2,000
Contingency Reserve 18,000
P/L A/c (Dr) 4,500

On the date of dissolution:

  1. The firm, upon realisation of assets and settlement of liabilities, made a profit of ₹ 9,000.
  2. Gita paid the realisation expenses of ₹ 2,000.
  3. Gita discharged the outstanding salary of the manager of the firm of ₹ 1,000 which was unrecorded in the books.

You are required to prepare the Partners’ Capital Accounts.

Appears in 1 question paper
Chapter: [0.013000000000000001] Reconstitution of Partnership
Concept: Dissolution of a Partnership Firm - Preparation of Realization Account, and Other Related Accounts

Answer briefly of the following question :

What is the minimum price at which a company can reissue its forfeited shares which were originally issued
at par?

Appears in 1 question paper
Chapter: [0.021] Issue of Shares
Concept: Issue of Shares for Consideration Other than Cash

Saturn Ltd. was registered with an authorized capital of ` 12,00,000. "divided into" ` 1,20,000 :equity shares of ` 10
"each. It issued "40,000" equity shares to the public at a premium of" ` 5 "per share, payable as follows": [12]
"On application" ` 6
"On allotment" ` 9 (including premium of  5)
All the shares were applied for and allotted. One shareholder holding 500 shares did not pay the allotment money
and his shares were forfeited. Out of the forfeited shares, the company reissued 400 shares at 7 per share fully
called up.
You are required to:
(a) Pass journal entries in the books of the company.
(b) Prepare :
(i) Securities Premium Reserve Account,
(ii) Share Capital Account.

Appears in 1 question paper
Chapter: [0.021] Issue of Shares
Concept: Issue of Shares for Consideration Other than Cash

The following balances have been extracted from the books of Vanity Ltd. as at 31st March, 2017:

                   Trial Balance as at 31st March, 2017

 

Particulars Debit Credit
Equity Share Capital (5,000 shares of ` 100 each fully paid)   5,00,000
Fixed Assets 7,30,000  
Reverses and Surplus   2,00,000
Inventories 50,000  
Cash and Bank Balances 1,70,000  
Creditors   40,000
Bills Payable   20,000
Underwriting Commission on issue of shares 10,000  
5% Debentures (1/5 of the Debentures to be redeemed on 31st March, 2018)   2,00,000
Proposed Dividend   12,000
Interest accrued and due on 5% Debentures   8,000
Trade Receivables 20,000  
                                              Total 9,80,000  9,80,000 
Appears in 1 question paper
Chapter: [0.021] Issue of Shares
Concept: Issue of Shares for Consideration Other than Cash
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