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# Board Paper of Class 12-Commerce 2019 Accountancy All India(Set 1) - Solutions

General Instructions:

(i) This question paper contains two parts A and B.

(ii) Part A is compulsory for all.

(iii) Part B has two options: Analysis of Financial Statements and Computerized Accounting.

(iv) Attempt only one option of Part B.

(v) All parts of a question should be attempted at one place.

• Question 1
Pass the necessary journal entry for treatment of Partner's loan appearing on the asset side of the Balance Sheet in case of dissolution of a partnership firm. VIEW SOLUTION

• Question 2
A new partner acquires two main rights in the partnership firm which he joins. State one of these rights.

OR

How does 'Nature of business' affect the value of goodwill of a firm? VIEW SOLUTION

• Question 3
State the main aim of a not-for-profit organisation.

OR

How is 'Life membership fee' treated while preparing the financial statements of a not-for-profit organisation? VIEW SOLUTION

• Question 4
Kiya and Leela are partners sharing profits in the ratio of 3 : 2. Kiran was admitted as a new partner with $\frac{1}{5}\mathrm{th}$ share in the profits and brought ₹ 24,000 as her share of goodwill premium that was credited to the capital accounts of Kiya and Leela respectively with ₹ 18,000 and ₹ 6,000.
Calculate the new profit sharing ratio of Kiya, Leela and Kiran. VIEW SOLUTION

• Question 5
Dinkar, Navita and Vani were partners sharing profits and losses in the ratio of 3 : 2 : 1. Navita died on 30th June, 2017. Her share of profit for the intervening period was based on the sales during that period, which were ₹ 6,00,000. The rate of profit during the past four years had been 10% on sales. The firm closes its books on 31st March every year.
Calculate Navita's share of profit. VIEW SOLUTION

• Question 6
What is meant by 'Private Placement of Shares'?

OR

What is meant by 'Reserve Capital'? VIEW SOLUTION

• Question 7
Average profits of a firm during the last few years are ₹ 80,000 and the normal rate of return in a similar business is 10%. If the goodwill of the firm is ₹ 1,00,000 at 4 years' purchase of super profit, find the capital employed by the firm. VIEW SOLUTION

• Question 8
'UZ Ltd.' purchased Plant and Machinery from Elk Machine Ltd. for ₹ 6,90,000. Elk Ltd. was paid by accepting a draft of ₹ 90,000 payable after three months and the balance by issue of 6% debenture of ₹ 100 each at a discount of 20%.
Pass necessary journal entries for the above transactions in the books of 'UZ Ltd.'

OR

'ZK Ltd.' issued ₹ 4,00,000, 9% Debentures of ₹ 100 each at a discount of 5% redeemable at a premium of 10%.
Pass necessary journal entries for the above transactions in the books of 'ZK Ltd.' VIEW SOLUTION

• Question 9
Willow Ltd. was registered with an authorized capital of ₹ 10,00,000 divided into 1,00,000 equity shares of ₹ 10 each. The company offered 80,000 shares for subscription to the publicout of which 75,000 shares were subscribed. All amounts were received except the final call of ₹ 2 per share on 3,000 shares. Fill in the missing figures in the Balance Sheet of Willow Ltd as per the provisions of Schedule III, Part I of the Companies Act, 2013.  Balance Sheet as at 31st March, 2018(An extract) Particulars Note No. (₹) EQUITY AND LIABILITIES 1. Shareholders Funds (a) Share Capital 1 .................... ....................

 Note No. Particulars (₹) 1 Share Capital Authorised Capital ................... ................................... Issued Capital .................... .................................. Subscribed Capital Subscribed and full paid ____________ shares of ₹ 10 each .................... Subscribed but not fully paid ____________ shares of ₹ 10 each ................ Less .................... ................ ..................... .....................
VIEW SOLUTION

• Question 10
Janta Kalayan Club has 1250 members each paying an annual subscription of ₹ 150. During the year ended 31st March, 2018 the club did not receive subscription from 45 members and received subscriptions in advance from 46 members for the year ending 31st March , 2018. On 31st March, 2017 the outstanding subscriptions were ₹ 15,000 and subscriptions received in advance were ₹ 3000.
Calculate the amount of subscription that will be debited to the 'Receipts and Payments Account' for the year ended 31st March, 2018. VIEW SOLUTION

• Question 11
Hari, Kunal and Uma are partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. From 1st April, 2018 they decided to share future profits and losses in the ratio of 2 : 5 : 3. Their Balance Sheet showed a balance of ₹ 75,000 in the Profit and Loss Account and a balance of ₹ 15,000 in Investment Fluctuation Fund. For this purpose, it was agreed that:
(i) Goodwill of the firm was valued at ₹ 3,00,000.
(ii) That investments (having a book value of ₹ 50,000) were valued at ₹ 35,000.
(ii) That stock having a book value of ₹ 50,000 be depreciated by 10%.
Pass the necessary journal entries for the above in the books of the firm. VIEW SOLUTION

• Question 12
Meera, Sarthak and Rohit were partners sharing profits in the ratio of 2 : 2 : 1. On 31 March, 2018, their Balance Sheet was as follows:  Balance Sheet of Meera, Sarthak and Rohit as at 31 March, 2018 Liabilities Amount (₹) Assets Amount  (₹) Creditors 3,00,000 Fixed  Assets 7,00,000 Contingency Reserve 1,00,000 Stock 2,00,000 Capital: Debtors 1,50,000 Meera 4,00,000 Cash at bank 3,50,000 Sarthak 3,50,000 Rohit 2,50,000 14,00,000 14,00,000
Sarthak died on 15th June, 2018. According to the partnership deed, his executors were entitled to:
(i) Balance in his Capital Account.
(ii) His share of goodwill will be calculated on the basis of thrice the average of the past 4 years' profits.
(iii) His share in profits up to the date of death on the basis of average profits of the last two years. The time period for which he survived in the year of death will be calculated in months.
(iv) Interest on capital @ 12% p.a. up to the date of his death.
The firm's profits for the last four years were:
2014 - 15 ₹ 1,20,000, 2015 - 16 ₹ 2,00,000, 2016 - 17 ₹ 2,60,000 and 2017 - 18 ₹ 2,20,000.
Sarthak's executors were paid the amount due immediately. Prepare Sarthak's Capital Account to be presented to his executors.  VIEW SOLUTION

• Question 13
From the following information of Gems club, prepare Income and Expenditure Account for the year ended 31st March, 2018.  ​​Receipts and Payments Account of Gems Club for the year ending 31st March, 2018 Receipts Amount (₹) Payments Amount  (₹) To Balance b/d 50,000 By Furniture 1,30,000 To Interest on Investments 2,400 By Salaries 64,500 To Donations 17,000 By Miscellaneous Expenses 52,000 To Subscriptions 3,00,000 By Telephone Charges 12,000 To Rent Received 70,000 By Fax Machine 6,000 To Sale of old newspapers 600 By 6% Investments (on 01.08.2017) 1,00,000 By Printing and Stationery 19,000 By Balance c/d 56,500 4,40,000 4,40,000

Subscriptions received included ₹ 15,000 for 2018 - 19. The amount of subscriptions outstanding on 31st March, 2018 were ₹ 20,000. Salaries unpaid on 31st March, 2018 were ₹ 8,000 and Rent receivable was ₹ 2,000. Opening Stock of printing and stationery was ₹ 12, 000, whereas Closing stock was ₹ 15,000. VIEW SOLUTION

• Question 14
Ashish and Kanav were partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2018 their Balance Sheet was as follows:
 Balance Sheet of Ashish and Kanav as at 31st March, 2018 Liabilities Amount ₹ Assets Amount ₹ Trade Creditors 42,000 Bank 35,000 Employees' Provident Fund 60,000 Stock 24,000 Mrs Ashish's Loan 9,000 Debtors 19,000 Kanav's Loan 35,000 Furniture 40,000 Workmen's Compensation Fund 20,000 Plant 2,10,000 Investments Fluctuation Reserve 4,000 Investments 32,000 Capital: Profit and Loss Account 10,000 Ashish 1,20,000 Kanav 80,000 2,00,000 3,70,000 3,70,000

On the above data they decided to dissolve the firm.
​(i) Ashish agreed to take over furniture at ₹ 38,000 and pay off Mrs. Ashish's loan.
(ii) Debtors realised ₹ 18,500 and plant realised 10% more.
(iii) Kanav took over 40% of the stock at 20% less than the book value. Remaining stock was sold at a gain of 10%.
(iv) Trade creditors took over investments in full settlement.
(v) Kanav agreed to take over the responsibility of completing dissolution at an agreed remuneration of ₹ 12,000 and to bear realization expenses. Actual expenses of realization amounted to ₹ 8,000.
Prepare Realisation Account. VIEW SOLUTION

• Question 15
Naveen, Qadir and Rajesh were partners doing an electronic goods business in Uttarakhand. After the accounts of partnership were drawn up and closed, it was discovered that interest on capital has been allowed to partners @ 6% p.a. for the years ending 31st March, 2017 and 2018, although there is no provision for interest on capital in the partnership deed. On the other hand, Naveen and Qadir were entitled to a salary of ₹ 3,500 and ₹ 4,000 per quarter respectively, which has not been taken into consideration. Their fixed capitals were ₹ 4,00,000, ₹ 3,60,000 and ₹ 2,40,000 respectively. During the last two years they had shared the profits and losses as follows:
 Year Ended Ratio 31st March, 2017 3 : 2 : 1 31st March, 2018 5 : 3 : 2

Pass necessary adjusting entry for the above adjustments in the books of the firm on 1st April, 2018. Show your workings clearly.
OR
On 31st March, 2018 the balance in the Capital Accounts of Abhir, Bobby and Vineet, after making adjustments for profits and drawings were ₹ 8,00,000, ₹ 6,00,000 and ₹ 4,00,000 respectively.

Subsequently, it was discovered that interest on capital and interest on drawings had been omitted. The partners were entitled to interest on capital @ 10% p.a and were to be charged interest on drawings @ 6% p.a. The drawings during the year were : Abhir - ₹ 20,000 drawn at the end of each month, Bobby - ₹ 50,000 drawn at the beginning of every half year and Vineet - ₹ 1,00,000 withdrawn on 31st October, 2017. The net profit for the year ended 31st March, 2018 was ₹ 1,50,000. The profit sharing ratio was 2 : 2 : 1.

Pass necessary adjusting entry for the above adjustments in the books of the firm. Also, show your workings clearly. VIEW SOLUTION

• Question 16
Denspar Ltd. invited applications for issuing 2,00,000 equity shares of ₹ 10 each at a premium of ₹ 20 per share. The amount was payable as follows:  On Application - ₹ 2 per share On Allotment - ₹ 13 per share (including ₹10 premium) On First Call - ₹ 7 per share (including ₹ 5 premium) On Final Call - ₹ 8 per share (including ₹ 5 premium)

Applications for 1,80,000 shares were received. Shares were allotted to all the applicants. Yogesh, a shareholder holding 5,000 shares paid his entire share money along with the allotment money. Vishesh, a holder of 7,000 shares, failed to pay the allotment money. Afterwards the first call was made. Vishesh paid the allotment money along with the first call money. Samyesh holding 2,000 shares did not pay the final call. Samyesh's shares were forfeited immediately after the final call. Out of the forfeited shares, 1,500 shares were reissued at ₹ 8 per share fully paid up.

Pass the necessary journal entries for the above transactions in the books of Denspar Ltd.
OR
'KLN Ltd'. invited applications for issuing 1,00,000 shares of ₹ 10 each at a premium of ₹ 2 per share. The amount was payable as follows:  On Application - ₹ 3 per share (including premium ₹ 1) On Allotment - ₹ 4 per share (including premium ₹ 1) On First Call - ₹ 3 per share On Second and Final Call - Balance amount

Application for 1,90,000 shares were received. Allotment was made to the applicants as follows:  Category No. of Shares Applied No. of shares Allotted I 50,000 40,000 II 1,00,000 60,000

Remaining applications were rejected.

Rajat, a shareholder belonging to Category I who had applied for 2,500 shares, failed to pay the amount due on allotment and first call. His shares were immediately forfeited.

Reema, a shareholder belonging to Category II who was holding 3,000 shares failed to pay the first call and second call money. Her shares were also forfeited. Afterwards 4,000 shares were reissued @ ₹ 8 per share fully paid up. These included all the forfeited shares of Reema.

Pass necessary journal entries for the above transactions in the books of 'KLN Ltd'. VIEW SOLUTION

• Question 17
Mohan, Vinay and Nitya were partners in a firm sharing profits and losses in the proportion of $\frac{1}{2},\frac{1}{3}$ and $\frac{1}{6}$ respectively. On 31st March, 2018, their Balance Sheet was as follows:  Balance Sheet of Mohan, Vinay and Nitya as at 31st March, 2018 Liabilities Amount (₹) Assets Amount (₹) Creditors 48,000 Cash at Bank 31,000 Employees' Provident Fund 1,70,000 Bills Receivable 54,000 Contingency Reserve 30,000 Book Debts 63,000 Capital: Less: Provision for doubtful debts 2,000 61,000 Mohan 1,20,000 Plant and Machinery 1,20,000 Vinay 1,00,000 Land and Building 2,92,000 Nitya 90,000 3,10,000 5,58,000 5,58,000

Mohan retired on the above date and it was agreed that:
(i) Plant and machinery will be depreciated by 5%.
(ii) An old computer previously written off was sold for ₹ 4,000.
(iii) Bad debts amounting to ₹ 3,000 will be written off and a provision of 5% on debtors for bad and doubtful debts will be maintained.
(iv) Goodwill of the firm was valued at ₹ 1,80,000 and Mohan's share of the same was credited in his account by debiting Vinay's and Nitya's accounts.
(v) The capital of the new firm was to be fixed at ₹ 90,000 and necessary adjustments were to be made by bringing in or paying off cash as the case may be.
(vi) Vinay and Nitya will share future profits in the ratio of 3 : 2.

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

OR
Leena and Rohit are partners in a firm sharing profits in the ratio of 3 : 2. On 31st March, 2018 their Balance Sheet was as follows:
 Balance Sheet of Leena and Rohit as at 31st March, 2018 Liabilities Amount (₹) Assets Amount (₹) Sundry Creditors 80,000 Cash 42,000 Bills Payable 38,000 Debtors 1,32,000 General Reserve 50,000 Less: Provision for doubtful debts 2,000 1,30,000 Capital: Stock 1,46,000 Leena 1,60,000 Plant and Machinery 1,50,000 Rohit 1,40,000 3,00,000 4,68,000 4,68,000

On the above date Manoj was admitted as a new partner for $\frac{1}{5}\mathrm{th}$ share in the profits of the firm on the following terms:
(i) Manoj brought proportionate capital. He also brought his share of goodwill premium of ₹ 80,000 in cash.
(ii) 10% of the general reserve was to be transferred to provision for doubtful debts.
(iii) Claim on account of workmen's compensation amounted to ₹ 40,000.
(iv) Stock was overvalued by ₹ 16,000.
(v) Leena, Rohit and Manoj will share future profits in the ratio of 5 : 3 : 2.

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

VIEW SOLUTION

• Question 18
Under which type of activity will you classify 'Cash advances and loans made to third party' while preparing Cash Flow Statement? VIEW SOLUTION

• Question 19
State the primary objective of preparing 'Cash Flow Statement.' VIEW SOLUTION

• Question 20
Under which major headings and subheadings will the following items be presented in the Balance Sheet of a company as per Schedule III, Part I of the Companies Act, 2013?
(i) Interest accrued and due on debentures
(ii) Loose tools
(iii) Accrued interest on calls in advance
(iv) Interest due on calls in arrears
(vi) Premium on redemption of debentures
(vii) Plant and Machinery
(viii) Patents

OR

Explain briefly any four limitations of 'Analysis of Financial Statements.' VIEW SOLUTION

• Question 21
(i) From the following information calculate Interest Coverage Ratio : Net profit after interest and tax ₹ 1,20,000. Rate of income tax 40%; 15% debentures ₹ 1,00,000; 12% Mortgage loan ₹ 1,00,000.

(ii) A company had Current Assets ₹ 3,00,000 and Current Liabilities ₹ 1,40,000. Afterwards, it purchased goods worth ₹ 20,000 on credit. Calculate the Current Ratio after the purchase of goods.

OR

Quick ratio of a company is 1 : 1. State, with reason, whether the following transactions will increase, decrease or not change the ratio:
(ii) Purchased goods on credit ₹ 8,000.
(iii) Issued fully paid equity shares of ₹ 1,00,000.
(iv) Issued 9% debentures of ₹ 5,00,000 to the vendor for machinery purchased. VIEW SOLUTION

• Question 22
From the information extracted from the Statement of Profit and Loss for the years ended 31st March, 2017 and 31st March, 2018, prepare a Comparative Statement of Profit and Loss:  Particulars 2017-18 2016-17 Revenue from operations 300% of cost of material consumed 200% of cost of material consumed Cost of materials consumed ₹ 2,40,000 ₹ 2,00,000 Other expenses 20% of cost of material consumed 10% of cost of material consumed Tax rate 50% 50%
VIEW SOLUTION

• Question 23
From the following Balance Sheet of DCX Ltd. and the additional information as at 31st March, 2018 prepare a Cash Flow Statement:
 Particulars Note No. 31.3.2018 ₹ 31.3.2017 ₹ I-Equity and Liabilities: 1. Shareholder's Funds: (a) Share Capital 30,00,000 21,00,000 (b) Reserve and Surplus 1 4,00,000 5,00,000 2. Non-Current Liabilities: Long-term Borrowings 2 8,00,000 5,00,000 3. Current Liabilities: (a) Trade Payables 1,50,000 1,00,000 (b) Short-term Provisions 3 76,000 56,000 Total 44,26,000 32,56,000 II-Assets: 1. Non-Current Assets: Fixed Assets: (i) Tangible Assets 4 27,00,000 20,00,000 (ii) Intangible Assets 8,00,000 7,00,000 2. Current Assets: (a) Current Investments 89,000 78,000 (b) Inventories 8,00,000 4,00,000 (c) Cash and cash equivalents 37,000 78,000 Total 44,26,000 32,56,000

Notes to Accounts:  Note No. Particulars 31.3.2018 ₹ 31.3.2017 ₹ 1. Reserves and Surplus: (Surplus i.e. Balance in the statement of Profit and Loss) 4,00,000 5,00,000 4,00,000 5,00,000 2. Long-term Borrowings: 8% Debentures 8,00,000 5,00,000 8,00,000 5,00,000 3. Short-term Provisions: Provision for Tax 76,000 56,000 76,000 56,000 4. Tangible Asset: Machinery 33,00,000 25,00,000 Less: Accumulated Depreciation (6,00,000) (5,00,000) 27,00,000 20,00,000

(i) During the year a machinery costing ₹ 8,00,000 on which accumulated depreciation was ₹ 3,20,000 was sold for ₹ 6,40,000.
(ii) Debentures were issued on 1st April, 2017.​ ​​ VIEW SOLUTION
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