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# Board Paper of Class 12-Commerce 2016 Accountancy All India(SET 1) - Solutions

General Instructions:

1) This question paper contains two parts A and B.

2) Part A is compulsory for all.

3) Part B has two options-Option-I Analysis of Financial Statements and Option-II Computerized Accounting.

4) Attempt only one option of Part B.

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

Section A

(i) This section consists of 17 questions.​

(ii) All the questions are compulsory.​

(iii) Question Nos. 1 to 6 are very short-answer questions carrying 1 mark each.​

(iv) Question Nos. 7 to 10 carry 3 marks each.​

(v) Question Nos. 11 and 12 carry 4 marks each.​

(vi) Question Nos. 13 to 15 carry 6 marks each.​

(vii) Question Nos. 16 and 17 carry 8 marks each.​

Section B

(i) This section consists of 6 questions.​

(ii) All questions are compulsory​

(iii) Question Nos. 18 and 19 are very short-answer questions carrying 1 mark each.​

(iv) Question Nos. 20 to 22 carry 4 marks.​

(v) Question No. 23 carries 6 marks.​

• Question 1

A group of 40 people wants to form a partnership firm. They want your advice regarding the maximum number of persons that can be there in a partnership firm and the name of the Act under whose provisions it is given.

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• Question 2

P, Q and R were partners in a firm sharing profits in the ratio of 3 : 2 : 1. They admitted S as a new partner for ${\frac{1}{8}}^{\mathrm{th}}$share in the profits which he acquired ${\frac{1}{16}}^{\mathrm{th}}$from P and ${\frac{1}{16}}^{\mathrm{th}}$ from Q.

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• Question 3

On 28.2.2016 the first call of Rs 2 per share became due on 50,000 equity shares alloted by Kumar Ltd. Komal a holder of 1000 shares did not pay the first call money. Kovil a holder of 750 shares paid the second and final call of Rs 4 per share alongwith the first call.

Pass the necessary journal entry for the amount received by opening calls - in – arrears and calls - in - advance account in the books of the company.

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• Question 4

Distinguish between 'Dissolution of partnership' and 'Dissolution of partnership firm' on the basis of 'Economic Relationship'.

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• Question 5

State the provisions of Companies Act, 2013 for the creation of 'Debenture Redemption Reserve'.

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• Question 6

Tom and Harry were partners in a firm sharing profits in the ratio of 5 : 3. During the year ended 31.3.2015 Tom had withdrawn Rs 40,000. Interest on his drawings amounted to Rs 2,000.

Pass necessary journal entry for charging interest on drawings assuming that the capitals of the partners were fluctuating.

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• Question 7
On 2.3.2016 L and B Ltd. issued 635, 9% debentures of Rs 500 each. Pass necessary journal entries for the issue of debentures in the following situations:

(a) When debentures were issued at 5% discount, redeemable at 10% premium.
(b) When debentures were issued at 12% premium, redeemable at 6% premium. VIEW SOLUTION

• Question 8
State any three circumstances other than (i) death of a partner, (ii) admission of a partner and (iii) retirement of a partner when need for valuation of goodwill of a firm may arise. VIEW SOLUTION

• Question 9

K Ltd. took over the assets of Rs 15,00,000 and liabilities of Rs 5,00,000 of P Ltd. For a purchase consideration of Rs 13,68,500. Rs 25,500 were paid by issuing a promissory note in favour of P Ltd. Payable after two months and the balances was paid by issue of equity shares of Rs 100 each at a premium of 25%.

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

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• Question 10
To provide employment to the youth and to develop Baramula district of Jammu and Kashmir, Jyoti Power Ltd. decided to setup a power plant. For raising funds the company decided to issue 8,50,000 equity shares of Rs 10 each at a premium of Rs 3 per share. The whole amount was payable on application. Applications for 20,00,000 shares were received. Applications for 3,00,000 shares were rejected and shares were alloted to the remaining applicants on pro- rata basis.

Pass necessary journal entries for the above transactions in the books of the company and identify any two values which the company wants to propagate. VIEW SOLUTION

• Question 11
Vikas and Vivek were partners in a firm sharing profits in the ratio of 3 : 2.

On 1.4.2014 they admitted Vandana as a new partner for $\frac{1}{8}\mathrm{th}$ share in the profits with a guaranteed profit of Rs 1,50,000. The new profit sharing ratio between Vivek and Vikas will remain the same but they decided to bear any deficiency on account of guarantee to Vandana in the ratio 2 : 3. The profit of the firm for the year ended 31.3.2015 was Rs 9,00,000.
Prepare Profit and Loss Appropriation Account of Vikas, Vivek and Vandana for the year ended 31.3.2015. VIEW SOLUTION

• Question 12
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 ws 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. VIEW SOLUTION

• Question 13
Lal and Pal were partners in a firm sharing profits in the ratio of 3 : 7. On 1.4.2015 their firm was dissolved. After transferring assets (other than cash) and outsider's liabilities to realisation account, you are given the following information:

(a) A creditor of Rs 3,60,000 accepted machinery valued at Rs 5,00,000 and paid to the firm Rs 1,40,000.

(b) A Second creditor for Rs 50,000 accepted stock at Rs 45,000 in full settlement of his claim.

(c) A third creditor amounting to Rs 90,000 accepted Rs 45,000 in cash and investments worth Rs 43,000 in full settlement of his  claim.

(d) Loss on dissolution was Rs 15,000.

Pass necessary journal entries for the above transactions in the books of firm assuming that all payments were made by cheque. VIEW SOLUTION

• Question 14
R, S and T were partners in a firm sharing profits in the ratio of 1 : 2 : 3. Their Balance Sheet as on 31.3.2015 was as follows:
 Balance Sheet of R, S and T as on 31-3-2015 Liabilities Amount (Rs) Assets Amount (Rs) Creditors 50,000 Land 50,000 Bills Payable 20,000 Building 50,000 General Reserve 30,000 Plant 1,00,000 Capitals: Stock 40,000 R 1,00,000 Debtors 30,000 S 50,000 Bank 5,000 T 25,000 1,75,000 2,75,000 2,75,000

R, S and T decided to share the profits equally with effect from 1.4.2015. For this it was agreed that :
(a) Goodwill of the firm be valued at Rs 1,50,000.
(b) Land be revalued at Rs 80,000 and building be depreciated by 6%.
(c) Creditors of Rs 6,000 were not likely to be claimed and hence be written off.

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

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• Question 15
On 1.4.2013 JJJ Ltd had Rs 1,00,00,000, 10% Debentures of Rs 100 each outstanding.

(i) On 1.4.2014 the company purchased in the open market 30,000 of its own debentures for Rs 99 each and cancelled the same immediately.
(ii) On 28.2.2015 the company redeemed at par debentures of Rs 50,00,000 by draw of a lot.
(iii) On 31.1.2016 the remaining debentures were purchased for immediate cancellation for Rs 19,99,000.

Ignoring interest on debentures and debenture redemption reserve, pass necessary journal entries for the above transactions in the books of the company. VIEW SOLUTION

• Question 16
SK Ltd. invited applications for issuing 3,20,000 equity shares of Rs 10 each at a premium of Rs 5 per share. The amount was payable as follows:
On application Rs 3 per share (including premium Rs 1 per share)
On allotment Rs 5 per share (including premium Rs 2 per share)
On First and Final Call - Balance.

Applications for 4,00,000 shares were received. Applications for 40,000 shares were rejected and application money refunded. Shares were allotted on pro-rata basis to the remaining applicants. Excess money received with applications was adjusted towards sums due on allotment. Jeevan holding 800 shares failed to pay the allotment money and his shares were immediately forfeited. Afterwards final call was made. Ganesh who had applied for 2,700 shares failed to pay the final call. His shares were also forfeited. Out of the forfeited shares 1,500 shares were re-issued at Rs 8 per share fully paid up. The re-issued shares included all the forfeited shares of Jeevan.

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

OR

BBG Ltd. had issued 1,00,000 equity shares of Rs 10 each at a premium of Rs 3 per share payable with application money. While passing the journal entries related to the issue, some blanks are left. You are required to complete these blanks.
 Books of BBG Ltd. Journal Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs) 2015 Jan. 05 …………….. Dr. ………. To …………………… ………. (Application money received for 1,40,000 shares @ Rs 6 per share including premium) Jan. 17 Equity Shares Application A/c Dr. ………. To …………………… ………. To …………………… ………. To …………………… ………. To …………………… ………. (Application money transferred to share capital account, securities premium account, refunded for 20,000 shares for rejected applications and balance adjusted towards money due on allotment as shares were allotted on pro-rata basis. Jan. 17 …………….. Dr. ………. To …………………… ………. (Allotment money due @ Rs 4 per share) Feb. 20 …………….. Dr. ………. To …………………… ………. (Balance allotment amount received) April  01 …………….. Dr. ………. To …………………… ………. (First and Final Call money due) April 20 …………….. Dr. ………. Calls-in-arrears A/c. Dr. 3,000 To ………………. ………. (First and Final Call money received) May 20 …………….. Dr. ………. To ………………. ………. To ………………. ………. (Forfeited the shares on which First and Final Call was not received June 15 …………….. Dr. ………. …………….. Dr. 3,000 To ………………. ………. (Forfeited shares re-issued) ………… ………….. Dr. ………. To ………….. ………. (.…………..…………..…………..)
VIEW SOLUTION

• Question 17
L, M and N were partners in a firm sharing profit in the ratio of 3 : 2 : 1. Their Balance Sheet on 31.3.2015 was as follows :
 Balance Sheet of L, M and N as on 31.3.2015 Liabilities Amount (Rs) Assets Amount (Rs) Creditors 1,68,000 Bank 34,000 General Reserve 42,000 Debtors 46,000 Capitals: Stock 2,20,000 L 1,20,000 Investments 60,000 M 80,000 Furniture 20,000 N 40,000 2,40,000 Machinery 70,000 4,50,000 4,50,000

On the above date O was admitted as a new partner and it was decided that :

(i) The new profit sharing ratio between L, M, N and O will be 2 : 2 : 1 : 1.

(ii) Goodwill of the firm was valued at Rs 1,80,000 and O brought his share of goodwill premium in cash.

(iii) The market value of investments was Rs 36,000.

(iv) Machinery will be reduced to Rs 58,000.

(v) A creditor of Rs 6,000 was not likely to claim the amount and hence to be written-off.

(vi) O will bring proportionate capital so as to give him 1/6th share in the profits of the firm.

Prepare Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of the New Firm.

Or
J, H and K were partners in a firm sharing profits in the ratio of 5:3:2. On 31-3-2015 their Balance Sheet was as follows:
 Balance Sheet of J, H and K as on 31.3.2015 Liabilities Amount (Rs) Assets Amount (Rs) Creditors 42,000 Land and Building 2,24,000 Investment- 20,000 Motor Vans 40,000 Fluctuation Fund Investments 38,000 Profit and Loss 80,000 Machinery 24,000 Account Stock 30,000 Capitals: Debtors 80,000 J 1,00,000 Less: Provision 6,000 74,000 H 80,000 K 40,000 2,20,000 Cash 32,000 3,62,000 3,62,000

On the above data H retires and J and K agreed to continue the business on the following terms:
(i) Goodwill of the firm was valued at Rs 1,02,000.
(ii) There was a claim of Rs 8,000 for workmen’s compensation.
(iii) Provision for bad debts was to be reduced by Rs 2,000.
(iv) H will be paid Rs 14,000 in cash and the balance will be transferred in his loan account which will be paid in four equal yearly installments together with interest @ 10% p.a.
(v) The new profit sharing ratio between J and K will be 3:2 and their capitals will be in their new profit sharing ratio. The capital adjustments will be done by opening current accounts.

Prepare Revaluation Account, Partner’s Capital Accounts and Balance Sheet of the new firm. VIEW SOLUTION

• Question 18
Give the meaning of 'Cash Flow statement'. VIEW SOLUTION

• Question 19
'An enterprise may hold securities and loans for dealing or trading purpose in which case they are similar to inventory acquired specifically for resale'. Is the statement correct? Cash Flows from such activities will be classified under which type of activity while preparing Cash Flow Statement? VIEW SOLUTION

• Question 20
(a) One of the objectives of 'Financial Statements Analysis' is to judge the ability of the firm to repay its debt and assessing the short-term as well as the long-term liquidity position of the firm. State two more objectives of this analysis.

(b) Name any two items that are shown under the head 'Other Current Liabilities' and any two items that are shown under the head 'Other Current Assets'  in the Balance Sheet of a company as per Schedule III of the Companies Act, 2013. VIEW SOLUTION

• Question 21
(a) What is meant by 'Activity Ratios'?

(b) 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%. VIEW SOLUTION

• Question 22
Following is the Statement of Profit and Loss of Moon India Ltd. for the year ended 31st March 2015.

 Particulars Note No. 31.3.2015 (Rs) 31.3.2014 (Rs) Revenue from operations 50,00,000 40,00,000 Other Income 2,00,000 10,00,000 Employee benefit-expenses 60% of total Revenue 50% of total Revenue Other Expenses 10% of employee benefit expenses 20% of employee benefit expenses Tax Rate 50% 40%
The motto of Moon India Ltd. is to produce and distribute green energy in the backward areas of India. It has also taken up a project of giving vocational training to the girls belonging to the backward areas of Rajasthan.
You are required to prepare a comparative statement of Profit and Loss of Moon India Ltd. from the given statement of Profit and Loss and also identify any two values that the company wishes to convey to the society.
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• Question 23
Following was the Balance Sheet of M.M. Ltd. at on 31.3.2015.

 M.M. Ltd. Balance Sheet as at 31.3.2015 Particulars Note No. 31.03.2015 (Rs) 31.03.2014 (Rs) I. Equity and Liabilities : (1) Shareholders’ Funds (a) Share Capital 5,00,000 4,00,000 (b) Reserves and Surplus 1 2,00,000 (50,000) (2) Non-Current Liabilities Long-term borrowings 2 4,50,000 5,00,000 (3) Current Liabilities (a) short-term borrowings 3 1,50,000 50,000 (b) short-term provisions 4 70,000 90,000 Total 13,70,000 9,90,000 II. Assets (1) Non-Current Assets (a) Fixed Assets (i) Tangible 5 10,03,000 7,20,000 (ii) Intangible 6 20,000 30,000 (b) Non-Current Investments 1,00,000 75,000 (2) Current Assets : (a) Current Investments 7 50,000 60,000 (b) Inventories 1,07,000 45,000 (c) Cash and Cash Equivalents 90,000 60,000 Total 13,70,000 9,90,000

 Notes to Accounts Note No. Particulars 31.03.2015 (Rs) 31.03.2014 (Rs) (1) Reserves and Surplus (Surplus i.e. Balance in statement of Profit and Loss) 2,00,000 (50,000) 2,00,000 (50,000) (2) Long-term borrowings 12% Debentures 4,50,000 5,00,000 4,50,000 5,00,000 (3) Short-term borrowings Bank overdraft 1,50,000 50,000 1,50,000 50,000 (4) Short-term Provisions Provision for tax 70,000 90,000 70,000 90,000 (5) Tangible Assets Machinery 12,03,000 8,21,000 Accumulated Depreciations (2,00,000) (1,01,000) 10,03,000 7,20,000 (6) Intangible Assets Goodwill 20,000 30,000 20,000 30,000 (7) Inventories Stock in trade 1,07,000 45,000 1,07,000 45,000

(i) 12% Debentures were redeemed on 31.3.2015.

(ii)  Tax Rs 70,000 was paid during the year.

Prepare Cash Flow Statement.

VIEW SOLUTION
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