Accounts Sample Papers 2021 CBSE [1]

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Model Test Paper 1 Time Allowed: 3 Hours

Max. Marks: 80

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—Analysis of Financial Statements and Computerised Accounting. Attempt only one option of Part B. 4. All parts of a question should be attempted at one place. 5. There is no overall choice. However, an internal choice has been provided in 2 questions of three marks, 2 questions of four marks and 2 questions of eight marks.

PART A ACCOUNTING FOR NOT-FOR-PROFIT ORGANISATIONS, PARTNERSHIP FIRMS AND COMPANIES 1. Income and Expenditure Account shows income and expenditure of (a) Revenue nature only.

(b) Capital nature only.

(c) Both (a) and (b). (d) None of the above.

(1)

2. Pick the odd one out: (a) Interest on Partner’s Capital

(b) Partners’ Salaries/Commission

(c) Transfer of Part of Profit to Reserve

(d) Interest on Partner’s Loan

(1)

3. Ratan Ltd. forfeited 5,000 shares of ` 10 each on which application money of ` 3 was received. Out of these 2,500 shares were reissued as fully paid-up and ` 5,000 has been transferred to Capital Reserve. Calculate the rate at which these shares were reissued. (a) ` 10 per share

(b) ` 9 per share

(c) ` 11 per Share

(d) ` 8 per share

(1)

4. At the time of reconstitution of partnership firm, which of the following adjustment is required? (a) Determination of New Profit-sharing Ratio (b) Treatment of Goodwill (c) Revaluation of Assets and Reassessment of Liabilities (d) All of the above

(1)

5. Sacrificing Ratio = (a) Gaining Ratio – Old Profit Share (b) Old Profit Share – New Profit Share (c) New Profit Share – Old Profit Share (d) Old Profit Share – Gaining Ratio

(1)

M.2

An Aid to Accountancy—CBSE XII

6. A and B are partners. Divisible profit as per Profit and Loss Appropriation Account is ` 2,50,000. Total interest on partners’ drawings is ` 4,000. A’s salary is ` 4,000 per quarter and B’s salary is ` 40,000 per annum. What will be the net profit/loss earned during the year? (a) ` 3,00,000

(b) ` 2,94,000

(c) ` 3,06,000

(d) ` 3,02,000

(1)

7. On retirement of a partner, the remaining partners compensate (a) retiring partner only. (b) remaining partners only who have sacrificed. (c) retiring partner as well as remaining partner who have sacrificed. (d) None of the above.

(1)

8. X and Y were partners sharing profits and losses in the ratio of 3 : 2. At the time of dissolution of the firm, Workmen Compensation Reserve was ` 12,000 and liability did not exist in this respect. Journal entry will be:

`

`

(a) Realisation A/c ...Dr. 12,000 To Workmen Compensation Reserve A/c

12,000

(b) Workmen Compensation Reserve A/c ...Dr. 12,000 To Bank A/c

12,000

(c) Workmen Compensation Reserve A/c ...Dr. 12,000 To X’s Capital A/c To Y’s Capital A/c

7,200 4,800

(d) Workmen Compensation Reserve A/c ...Dr. 12,000 To Realisation A/c

12,000



(1)

9. Authorised Capital is also known as (a) Nominal Capital. (c) Subscribed Capital.

(b) Registered Capital. (d) Both (a) and (b). (1)

10. Which of the following factors affect goodwill? (a) Favourable Location

(b) Efficiency of Management

(c) Market situation

(d) All of these

(1)

11. Complete the following statement:

When there is neither Partnership Deed nor express agreement or Partnership Deed exists but it is silent on allowing remuneration to partners, the provisions of the ____________ would be applicable. (1)

12. If a fixed amount is withdrawn on the first day of every month of a financial year, the interest on total amount of drawings will be calculated for (a) 4.5 months.

(b) 5.5 months.

(c) 6 months.

(d) 6.5 months.

(1)

M.3

Model Test Papers

13. Stock ` 80,000, X took 50% of the stock at cost less 20%. Remaining stock was sold at a profit of 30% on cost. Realisation Account will be credited by (a) ` 32,000. (b) ` 52,000. (c) ` 84,000. (d) None of these. (1) 14. On the basis of the information given below, show the amount of stationery consumed in the Income and Expenditure Account of Good Health Sports Club for the year ended 31st March, 2020: Particulars Stock of Stationery Creditors for Stationery

1st April, 2019 (`)

31st March, 2020 (`)

8,000 9,000

6,000 11,000

Stationery purchased during the year ended 31st March, 2020 was ` 47,000. Or

From the following information, calculate the amount of subscriptions outstanding for the year ended 31st March, 2020:

India Sports Club has 250 members each paying an annual subscription of ` 1,000. Receipts and Payments Account for the year showed ` 2,65,000 received as subscriptions. Following additional information is provided: ` Subscriptions outstanding as on 31st March, 2019 40,000 Subscriptions received in advance as on 31st March, 2020 30,000 Subscriptions received in advance as on 31st March, 2019 12,000 (3) 15. Kavita, Meenakshi and Gauri are partners in a paper business. After the accounts of partnership had been prepared, it was noticed that for the years ending 31st March, 2019 and 2020, Interest on capital was allowed to partners @ 6% per annum although there is no provision for interest on capital in the Partnership Deed. Their fixed capitals were ` 2,00,000; ` 1,60,000 and ` 1,20,000 respectively. During the last two years, they had shared the profits as under:

Year

Ratio



31st March, 2019

3:2:1



31st March, 2020

5:3:2



Pass necessary adjusting entry on 1st April, 2020. Or

Rehman, Suleman and Harish were partners in a firm sharing profits in the ratio of 7 : 2 : 1. Their fixed capitals were: Rehman ` 3,00,000, Suleman ` 2,00,000 and Harish ` 1,00,000. The Partnership Deed provided as follows for the division of profit: (i) 10% of the Net Profit will be transferred to General Reserve. (ii) Harish was guaranteed a profit of ` 50,000 p.a. Deficiency because of guarantee to Harish will be shared by Rehman and Suleman equally. Net Profit for the year ended 31st March, 2020 was ` 2,00,000. Pass necessary Journal entries in the books of the firm. (4)

M.4

An Aid to Accountancy—CBSE XII

16. Complete the following Journal entries:

JOURNAL

Date Particulars

L.F.

Dr. (`)

(i ) ? ...Dr. ? To ? To ? To ? (Forfeiture of 1,000 shares of ` 10 each, ` 8 called-up, on which allotment money of ` 2 and first call of ` 3 has not been received)

Cr. (`) ? ? ?

(ii) ? ...Dr. ? To ? To ? (Reissue of 1,000 forfeited shares fully paid-up at ` 11 per share)

? ?

(iii) ? ...Dr. ? To ? ( Gain on the reissue of shares transferred to Capital Reserve Account)

?



(4)

17. Pass the necessary Journal entries for the following transactions on dissolution of the firm of Sudha and Shiva after various assets (other than Cash and Bank) and outside liabilities have been transferred to Realisation Account: (i) Sudha takes a part of the Sundry Assets at ` 72,000 (being 10% less than book value). Remaining Sundry Assets are sold at 90% of the book value. Sundry Assets transferred to Realisation Account were of ` 1,70,000. (ii) Firm’s Creditors were ` 10,00,000. Firm gave unrecorded assets valued at ` 3,20,000 plus Cash of ` 30,000 in settlement to a creditor of ` 5,00,000. Remaining creditors were paid the due amount less 10%. (iii) ` 12,000 were received from a debtor which was written off as Bad Debt last year. (iv) Sudha paid ` 50,000 as goodwill to use firm’s name.

(4)

18. (a) Arun, Bobby and Chintu entered into partnership of manufacturing and distributing educational CDs on 1st April, 2019. Arun looked after business development, Bobby content development and Chintu financed the project. At the end of the year on 31st March, 2020, Chintu demanded interest of 10% p.a. on the capital contributed by him. Other partners did not agree to his demand. How the dispute will be resolved within the provisions of Indian Partnership Act, 1932? (b) ‘Goodwill existing in the Books’ and ‘Goodwill valued’ at the time of reconstitution of the firm have the same accounting treatment in the books. Do you agree with this statement? (4) 19. From the following Receipts and Payments Account of Relax Club, prepare Income and Expenditure Account for the year ended 31st March, 2020 and determine the ‘Capital Fund’ on 1st April, 2019:

M.5

Model Test Papers Dr.

RECEIPTS AND PAYMENTS ACCOUNT OF RELAX CLUB for the year ended 31st March, 2020

Cr.

Receipts ` Payments ` To Balance b/d 78,200 By Salaries 12,000 To Subscriptions: By Newspaper 8,200 2018–19 4,800 By Electricity Expenses 4,000 2019–20 1,06,000 By Fixed Deposit (on 1st July, 2019 @ 9% p.a.) 80,000 2020–21 2,000 1,12,800 By Books 42,400 To Sale of Old Newspapers 5,000 By Rent 27,200 To General Donations 10,000 By Furniture 42,000 To Donation for Building 30,000 By Balance c/d 44,800 To Sale of Old Furniture (Book value ` 16,000) 22,800 To Interest on Fixed Deposits 1,800 2,60,600 2,60,600

Additional Information: (a) Subscriptions outstanding as on 31st March, 2019 were ` 8,000 and on 31st March, 2020 ` 10,000. (b) On 31st March, 2020, salaries outstanding were ` 2,400 and rent outstanding was ` 4,800. (c) The club owned furniture ` 60,000 and books ` 28,000 on 1st April, 2019.

(6)

20. (i) Pranshu Ltd. took over business of Mahesh Ltd. on 1st April, 2020 for ` 57,00,000. The details of assets and liabilities to be taken over are: Particulars

Book Value (`)

Agreed Value (`)

Building

30,00,000 35,00,000

Plant and Machinery

10,00,000

8,00,000

Stock

5,00,000

4,00,000

Sundry Debtors

5,00,000

4,00,000

Sundry Creditors

2,50,000

3,00,000

80,000

1,00,000

Outstanding Expenses

It was decided to pay for purchase consideration as ` 10,00,000 by Cheque and balance by issue of 9% Debentures of ` 100 each at a premium of 25%. Journalise.

(ii) On 1st April, 2019, Star Ltd. issued, 5,000, 8% Debentures of ` 100 each at premium of 5%, to be redeemed at a premium of 10%, after 5 years. The issue price was payable on application. The issue was oversubscribed to the extent of 5,000 debentures and the allotment was made proportionately to all the applicants. Securities premium amount was not utilised for any other purpose during the year. Give Journal entries for issue of debentures and writing off loss on issue of debentures. (6)

M.6

An Aid to Accountancy—CBSE XII

21. Given below is the Balance Sheet as at 31st March, 2020 of Madan and Krishna, who are carrying on business in partnership. Madan and Krishna share profits and losses in the ratio of 3 : 2. BALANCE SHEET Liabilities ` Assets

`

Capital Accounts: Goodwill 20,000 Madan 60,000 Plant and Machinery 1,20,000 Krishna 80,000 1,40,000 Land and Building 1,40,000 Current Accounts: Debtors 1,90,000 Madan 10,000 Less: Provision for Doubtful Debts (40,000) 1,50,000 Krishna 30,000 40,000 Stock 40,000 General Reserve 1,00,000 Cash in Hand 30,000 Workmen Compensation Reserve 70,000 Cash at Bank 1,00,000 Creditors 2,50,000 6,00,000 6,00,000

They agreed to admit Ram into partnership for 1/5th share of profits on 1st April, 2020, on the following terms: (a) All Debtors are good. (b) Value of Land and Building to be increased to ` 1,80,000. (c) Value of Plant and Machinery to be reduced by ` 20,000. (d) Liability against Workmen’s Compensation Reserve is determined at ` 40,000 which is to be paid later in the year. (e) Ashok, to whom ` 25,000 were payable (included in above creditors), drew a bill of exchange for 3 months which was accepted. (f) Ram to bring capital of ` 1,00,000 and ` 10,000 as premium for goodwill by bank draft. Pass the necessary Journal entries to give effect to the above arrangement. Or

X, Y and Z were partners in a firm sharing profits and losses in the ratio of their fixed capitals. Their Balance Sheet as at 31st March, 2020 was as follows: BALANCE SHEET as at 31st March, 2020

Liabilities ` Assets

`

Capitals: Bank 51,000 X 5,00,000 Stock 9,000 Y 3,00,000 Debtors 15,000 Z 2,00,000 10,00,000 Less: Provision for Doubtful Debts 1,500 13,500 General Reserve 75,000 X’s Loan 35,500 Creditors 53,000 Machinery 2,00,000 Outstanding Salary 7,000 Building 6,00,000 Y’s Loan 15,000 Profit and Loss Account 2,41,000 (For the year ending 31st March, 2020) 11,50,000 11,50,000

Model Test Papers

M.7

On 1st April, 2020, Z retired from the firm on the following terms: (i) Goodwill of the firm will be valued at two years’ purchase of the Average Profit of last three years. Profits for the year ended 31st March, 2018 and 31st March, 2019 were ` 4,00,000 and ` 3,00,000 respectively. (ii) Provision for Doubtful Debts will be maintained at 5% of the Debtors. (iii) Building will be appreciated by ` 90,000 and Plant and Machinery will be reduced to ` 1,80,000. (iv) X to repay his Loan. (v) Loan repaid by X was to be used for payment to Z. The balance amount payable to Z was transferred to his Loan Account. Prepare Revaluation Account, Partners’ Capital Accounts and Partners’ Current Accounts in the reconstituted firm. (8) 22. Sunrise Ltd. invited applications for allotting 5,00,000 equity shares of ` 10 each at par, amount being payable as follows: On Application—` 1 per share; On Allotment—` 2 per share; On First call—` 3 per share; On Second and Final call—Balance. Applications for 8,00,000 shares were received. Applications for 1,00,000 shares were rejected and pro rata allotment was made to the remaining applicants. Excess money received with applications was adjusted towards amounts due on allotment. All calls were made. Raj, a shareholder holding 5,000 shares, did not pay the allotment and the call money. Shiv, a shareholder who had applied for 7,000 shares, did not pay the first and second and final call. Shares of Raj and Shiv were forfeited after the second and final call. Of the forfeited shares, 8,000 shares were reissued at ` 12 per share as fully paid-up. Reissued shares included all the forfeited shares of Raj. Pass necessary Journal entries for the above transactions in the books of Sunrise Ltd. Or BMY Ltd. invited applications for issuing 10,00,000 equity shares of ` 10 each payable as follows: On application and allotment—` 4 per share (including premium ` 1), On first call—` 4 per share, On second and final call—` 3 per share. Applications for 15,00,000 shares were received and pro rata allotment was made to all the applicants. Excess application money was adjusted on the sums due on calls. A shareholder who had applied for 6,000 shares did not pay the first, and the second and final call. His shares were forfeited. 90% of the forfeited shares were reissued at ` 8 per share fully paid-up. Pass necessary Journal entries for the above transactions in the books of the company. (8)

M.8

An Aid to Accountancy—CBSE XII

PART B ANALYSIS OF FINANCIAL STATEMENTS 23. Which of the following is an example of Cash Flow from Operating Activities? (a) Payment of Dividend

(b) Issue of Shares

(c) Purchase of Fixed Assets for Cash

(d) Receipts from Debtors

(1)

24. From the following information, how much amount will be shown as Cash Flow from Financing Activities? Particulars

31st March, 31st March, 2020 (`) 2019 (`)

Equity Share Capital 10% Debentures Securities Premium Reserve

20,00,000 2,00,000 1,00,000

18,00,000 3,00,000 80,000

Additional Information: Debentures were redeemed on 31st March, 2020. (a) ` 80,000

(b) ` 90,000

(c) ` 1,20,000

(d) ` 1,60,000

25. Can Net Profit Ratio be more than Operating Profit Ratio? State with reason.

(1) (1)

26. If Operating Cycle cannot be identified, it is assumed to be a period of (a) 9 Months.

(b) 10 Months.

(c) 12 Months.

(d) 15 Months.

(1)

27. Kaveri Ltd. a financing company, took loan of ` 20,00,000 during the year to be repaid in 5 yearly instalments starting after two years @ 10% p.a. It will be included in which of the following activities while preparing Cash Flow Statements? (a) Investing Activities

(b) Financing Activities

(c) Both Investing and Financing Activities (d) Operating Activities

(1)

28. Current Ratio of ‘Jayanti Ltd.’ is 3 : 2. The Finance Manager wants to maintain it at 2 : 1. Following options are available: (i) He can repay Trade payables. (ii) He can discharge Bills Payable. (iii) He can purchase Stock-in-Trade for cash. (iv) He can sell the Fixed Asset (Book value ` 10,000) for ` 9,000.

Choose the correct option:

(a) (i) is correct

(b) (ii) is correct

(c) (i) and (iii) are correct

(d) (i), (ii) and (iv) are correct

(1)

29. The main objective of computing _____________ is to determine the operational efficiency with which production and/or purchasing and selling operations are carried on. (a) Gross Profit Ratio

(b) Net Profit Ratio

(c) Operating Ratio

(d) Current Ratio

(1)

M.9

Model Test Papers

30. From the following information, calculate Inventory Turnover Ratio: Cash Revenue from Operations

: ` 10,00,000

Credit Revenue from Operations

: 120% of Cash Revenue from Operations

Gross Profit Ratio

: 40%

Opening Stock

: ` 1,50,000

Closing Stock

: ` 20,000 more than Opening Stock Or

Net Profit after Interest and Tax

: ` 3,00,000

10% Long-term Loan from SBI

: ` 3,00,000

12% Debentures

: ` 10,00,000

Tax Rate

: 50%

Calculate Interest Coverage Ratio.

(3)

31. From the following information, prepare a Comparative Statement of Profit and Loss of R.K. Ltd. for the year ended 31st March, 2020: Particulars

31st March, 2020

Revenue from Operations

31st March, 2019

` 20,00,000

` 10,00,000

75%

60%

` 6,00,000

` 5,50,000

40%

30%

Cost of Materials Consumed (% of Revenue from Operations) Other Expenses Tax Rate

Or From the following information, prepare Comparative Balance Sheet: Particulars



Share Capital



31st March, 31st March, 2020 (`)

2019 (`)

30,00,000

22,50,000

Reserves and Surplus

3,00,000

4,00,000

Long-term Borrowings

9,00,000

6,00,000

Short-term Borrowings

3,00,000

2,00,000

30,00,000

22,50,000

9,00,000

6,00,000

Fixed Assets: (a) Tangible

(b) Intangible

Inventories

1,50,000 3,00,000

Trade Receivables

1,50,000

1,00,000

Cash and Cash Equivalents

3,00,000

2,00,000



(4)

M.10

An Aid to Accountancy—CBSE XII

32. Cash Used in Operating Activities of Grand Stores Ltd. for the year ended 31st March, 2019 was ` 18,000. The Balance Sheet along with Notes to Accounts of Grand Stores Ltd. as at 31st March, 2019 is given below: Particulars

Note No. 31st March, 31st March, 2019 (`) 2018 (`)

I. EQUITY AND LIABILITIES 1. Shareholders’ Funds (a) Share Capital (b) Reserves and Surplus 1 2. Non-Current Liabilities Long-term Borrowings 2 3. Current Liabilities Short-term Provisions 3 Total II. ASSETS 1. Non-Current Assets Fixed Assets: (i) Tangible Assets 4 (ii) Intangible Assets 5 2. Current Assets (a) Current Investments (b) Trade Receivables (c) Cash and Cash Equivalents Total

18,00,000 50,000

10,00,000 40,000

1,00,000

4,00,000

2,50,000 3,60,000 22,00,000 18,00,000

14,00,000 1,80,000

10,00,000 70,000

30,000 2,90,000 3,00,000 22,00,000

1,90,000 3,10,000 2,30,000 18,00,000

Notes to Accounts Particulars 1. Reserves and Surplus Surplus, i.e., Balance in Statement of Profit and Loss 2. Long-term Borrowings 8% Debentures 3. Short-term Provisions Provision for Tax 4. Tangible Assets Plant and Machinery Less: Accumulated Depreciation 5. Intangible Assets Goodwill

31st March, 31st March, 2019 (`) 2018 (`) 50,000 50,000

40,000 40,000

1,00,000 1,00,000

4,00,000 4,00,000

2,50,000 2,50,000

3,60,000 3,60,000

15,20,000 10,90,000 (1,20,000) (90,000) 14,00,000 10,00,000 1,80,000 1,80,000

70,000 70,000

You are given the following additional information: (i) A machinery of the book value of ` 40,000 (Depreciation provided thereon ` 12,000) was sold at a loss of ` 6,000. (ii) 8% Debentures were redeemed on 1st July, 2018. Prepare Cash Flow Statement.

(6)

M.11

Model Test Papers

Answers PART A 1. (a) Revenue nature only. 2. (d) Interest on Partner’s Loan. 3. (b) ` 9 per share. Working Note: Amount forfeited on 2,500 shares = 2,500 × ` 3 Less: Discount on reissue (Balancing Figure) Amount transferred to Capital Reserve

` 7,500 2,500 5,000

Discount on reissue per share = ` 2,500/2,500 = ` 1 Reissue price = ` 10 – ` 1 = ` 9 per share.

4. (d) All of the above. 5. (b) Old Profit Share – New Profit Share. 6. (d) ` 3,02,000. Working Note:

Net Profit during the year = Divisible Profits + Salary to Partners – Interest on Drawings = ` 2,50,000 + ` 16,000 + ` 40,000 – ` 4,000 = ` 3,02,000.

7. (c) retiring partner as well as remaining partner who have sacrificed. 8. (c) Workmen Compensation Reserve A/c ...Dr. 12,000 To X’s Capital A/c To Y’s Capital A/c

7,200 4,800

9. (d) Both (a) and (b) 10. (d) All of these. 11. Indian Partnership Act, 1932. 12. (d) 6.5 months. 13. (c) ` 84,000. Working Note: 50% stock = ` 32,000 (i.e., ` 40,000 – 20% of ` 40,000) 50 % stock = ` 52,000 (i.e., ` 40,000 + 30% of ` 40,000) Total = ` 32,000 + ` 52,000 = ` 84,000.

14. Dr.

AN EXTRACT OF INCOME AND EXPENDITURE ACCOUNT for the year ended 31st March, 2020

Expenditure ` Income To Stationery Consumed (Note 1)

Cr. `

49,000

Notes: 1. Stationery consumed (2019–20) = Opening Stock + Purchases – Closing Stock = ` 8,000 + ` 47,000 – ` 6,000 = ` 49,000.

2. Opening and closing creditors are ignored as they are already adjusted in purchases.

M.12

An Aid to Accountancy—CBSE XII

Or

Calculation of subscriptions outstanding for the year 2019–20:

`

Subscriptions received during the year

2,65,000

Add: Subscriptions Received in Advance as on 31st March, 2019

12,000



2,77,000

Less: Subscriptions received in advance as on 31st March, 2020

30,000

Subscriptions Outstanding as on 31st March, 2019 received 40,000

70,000

Subscriptions received for the year 2019–20

2,07,000

Subscriptions Receivable for the year 2019–20 (250 members × ` 1,000) Less:  Subscriptions received for the year 2019–20

2,50,000 2,07,000

Subscriptions outstanding for the year 2019–20, i.e., (` 2,50,000 – ` 2,07,000)

43,000

Alternative Method: Dr.

SUBSCRIPTIONS ACCOUNT Cr.

Particulars ` Particulars ` To Outstanding Subscriptions A/c (Opening) 40,000 By Advance Subscriptions A/c (Opening) 12,000 To Income and Expenditure A/c (250 × ` 1,000) 2,50,000 By Bank A/c 2,65,000 To Advance Subscriptions A/c (Closing) 30,000 By Subscriptions Outstanding A/c (Closing) 43,000 (Balancing Figure) 3,20,000 3,20,000

15.

TABLE SHOWING ADJUSTMENT

Particulars

Kavita (`)

Meenakshi (`)

Gauri (`)

Total (`)

Interest on Capital (2018–19)

...Dr.

12,000

9,600

7,200

28,800

Interest on Capital (2019–20)

...Dr.

12,000

9,600

7,200

28,800

Total

...Dr.

24,000

19,200

14,400

57,600

Profit to be credited (2018–19)

...Cr.

14,400

9,600

4,800

28,800

Profit to be credited (2019–20)

...Cr.

14,400

8,640

5,760

28,800

Total

...Cr.

28,800

18,240

10,560

57,600

Adjustment

4,800 (Cr.)

960 (Dr.)



3,840 (Dr.)

JOURNAL

Date Particulars

L.F.

Dr. (`)

2020 April 1 Meenakshi’s Current A/c ...Dr. 960 Gauri’s Current A/c ...Dr. 3,840 To Kavita’s Current A/c (Adjustment for interest on capital for the year 2018–19 and 2019–20)

Cr. (`)

4,800

M.13

Model Test Papers

Or

JOURNAL

Date Particulars

L.F.

Dr. (`)

2020 March 31 Profit and Loss A/c ...Dr. 2,00,000 To Profit and Loss Appropriation A/c (Profit transferred to Profit and Loss Appropriation Account)

Cr. (`)

2,00,000

Profit and Loss Appropriation A/c ...Dr. 20,000 To General Reserve A/c (10% of net profit transferred to General Reserve A/c)

20,000

Profit and Loss Appropriation A/c ...Dr. 1,80,000 To Rehman’s Current A/c To Suleman’s Current A/c To Harish’s Current A/c (Profit distributed in the ratio of 7 : 2 : 1)

1,26,000 36,000 18,000

Rehman’s Current A/c ...Dr. 16,000 Suleman’s Current A/c ...Dr. 16,000 To Harish’s Current A/c (Deficiency of Harish met by Rehman and Suleman equally)

32,000

Working Notes: (i) Harish’s actual share of profit = ` 1,80,000 × 1/10 = ` 18,000. (ii) Deficiency = ` 50,000 (Guaranteed Profit) – ` 18,000 = ` 32,000. (iii) Deficiency borne by Rehman and Suleman equally, i.e., ` 32,000 × 1/2 = ` 16,000 each.

16. JOURNAL Date Particulars

L.F.

Dr. (`)

Cr. (`)

(i ) Share Capital A/c ...Dr. 8,000 To Forfeited Shares A/c 3,000 To Shares Allotment A/c 2,000 To Shares First Call A/c 3,000 (Forfeiture of 1,000 shares of ` 10 each, ` 8 called-up, on which allotment money of ` 2 and First Call of ` 3 has not been received) (ii) Bank A/c ...Dr. 11,000 To Share Capital A/c 10,000 To Securities Premium Reserve A/c 1,000 (Reissue of 1,000 forfeited shares fully paid-up at ` 11 per share) (iii) Forfeited Shares A/c ...Dr. 3,000 To Capital Reserve A/c 3,000 (Gain on the reissue of shares transferred to Capital Reserve Account)

M.14 17.

An Aid to Accountancy—CBSE XII JOURNAL

Date Particulars

L.F.

Dr. (`)

Cr. (`)

(i) Sudha’s Capital A/c ...Dr. 72,000 Bank A/c ...Dr. 81,000 To Realisation A/c (Sundry assets of book value of ` 80,000 taken by Sudha at 10% less and balance sold at 90% of book value) (WN 1)

1,53,000

(ii) Realisation A/c ...Dr. 4,80,000 To Bank A/c (Creditors paid) (WN 2)

4,80,000

(iii) Bank A/c ...Dr. 12,000 To Realisation A/c (Bad debts written off last year received)

12,000

(iv) Bank A/c ...Dr. 50,000 To Realisation A/c (Amount received from Sudha towards goodwill)

50,000

Working Notes: 1. (a) Calculation of book value of Sundry Assets taken by Sudha: Let book value be ` 100; Agreed value, i.e., 10% less than Book Value = ` 100 – ` 10 = ` 90 Book value of Sundry Assets taken by Sudha = ` 72,000 × 100/90 = ` 80,000. (b) Calculation of sale value of remaining Sundry Assets sold by firm: Book value of Total Sundry Assets Less: Book value of Total Sundry Assets taken by Sudha Book Value of remaining Sundry Assets Sales Value of remaining Sundry Assets = ` 90,000 × 90/100

` 1,70,000 80,000 90,000 81,000

2. 50% of creditors accepted assets plus cash of ` 30,000. When an asset (whether recorded or unrecorded) is given to creditors in payment of their dues, the agreed amount of asset is deducted from the claim of creditors and balance is paid to them. NO ENTRY is passed for the transfer of asset to the creditors. Calculation of cash paid to creditors: Cash paid to 50% creditors Add: Remaining 50% creditors were paid at a discount of 10% = ` 5,00,000 – 10% of ` 5,00,000

4,50,000

Total amount paid to creditors

4,80,000

` 30,000

18. (a) In the absence of Partnership Deed, partner is not entitled to interest on capital. Thus, interest on capital will not be allowed to Chintu. (b) I do not agree with this statement. ‘Goodwill existing in the Books’ is ‘Purchased Goodwill’, it is written off by debit to Partners’ Capital/Current Accounts in their old profit-sharing ratio at the time of firm’s reconstitution. ‘Goodwill valued’ is the self-generated, which is determined by the partners so that gaining partners compensate the sacrificing partner(s).

M.15

Model Test Papers

19. Dr.

INCOME AND EXPENDITURE ACCOUNT for the year ended 31st March, 2020

Cr.

Expenditure ` Income

`

To Salary A/c 12,000 By Subscription A/c (WN) 1,12,800 Add: Outstanding Salary 2,400 14,400 By Sale of Old Newspapers 5,000 To Newspaper Expenses 8,200 By General Donations 10,000 To Electricity Expenses 4,000 By Gain on Sale of Furniture (` 22,800 – ` 16,000) 6,800 To Rent 27,200 By Interest on Fixed Deposit Received 1,800 Add: Outstanding Rent 4,800 32,000 Add: Accrued Interest (` 80,000 × To Surplus, i.e., Excess of Income 9/12 × 9/100 – ` 1,800) 3,600 5,400 over Expenditure 81,400 1,40,000 1,40,000

Calculation of Capital Fund:

BALANCE SHEET as on 1st April, 2019

Liabilities ` Assets

`

Capital Fund (Balancing Figure) 1,74,200 Cash 78,200 Furniture 60,000 Books 28,000 Subscription Outstanding 8,000 1,74,200 1,74,200 Working Note: Dr.

SUBSCRIPTION ACCOUNT Cr.

Particulars ` Particulars ` To Subscription Due A/c (Opening) 8,000 By Bank A/c: 1,12,800 To Income and Expenditure A/c (Bal. Fig.) 1,12,800 By Outstanding Subscription A/c: To Advance Subscription A/c (End) 2,000 2018–19: (` 8,000 – ` 4,800) 3,200 2019–20: (` 10,000 – ` 3,200) 6,800 10,000 1,22,800 1,22,800

20. (i)

JOURNAL OF PRANSHU LTD.

Date Particulars

L.F.

Dr. (`)

2020 April 1 Building A/c ...Dr. 35,00,000 Plant and Machinery A/c ...Dr. 8,00,000 Stock A/c ...Dr. 4,00,000 Sundry Debtors A/c ...Dr. 4,00,000 Goodwill A/c (Balancing Figure) ...Dr. 10,00,000 To Sundry Creditors A/c To Outstanding Expenses A/c To Mahesh Ltd. (Assets and liabilities of business taken over, recorded at agreed value) Mahesh Ltd. ...Dr. 57,00,000 To Bank A/c To 9% Debentures A/c (37,600 × ` 100) To Securities Premium Reserve A/c (Purchase consideration paid to Mahesh Ltd.) Note: Number of Debentures to be issued =` 47,00,000/` 125 = 37,600 Debentures.

Cr. (`)

3,00,000 1,00,000 57,00,000

10,00,000 37,60,000 9,40,000

M.16

(ii)

An Aid to Accountancy—CBSE XII JOURNAL OF STAR LTD.

Date Particulars

L.F.

Dr. (`)

2019 April 1 Bank A/c ...Dr. 10,50,000 To Debentures Application and Allotment A/c (Application money received on 10,000, 8% Debentures) April 1 Debentures Application and Allotment A/c ...Dr. 10,50,000 Loss on Issue of Debentures A/c ...Dr. 50,000 To 8% Debentures A/c To Securities Premium Reserve A/c To Premium on Redemption of Debentures A/c To Bank A/c (Debentures allotted and the balance refunded) 2020 March 31 Securities Premium Reserve A/c ...Dr. 25,000 Statement of Profit and Loss ...Dr. 25,000 To Loss on Issue of Debentures A/c (Loss on issue of debentures written off)

21.

Cr. (`)

10,50,000

5,00,000 25,000 50,000 5,25,000

50,000

JOURNAL

Date Particulars

L.F.

Dr. (`)

2020 April 1 Revaluation A/c ...Dr. 20,000 To Plant and Machinery A/c (Plant and machinery revalued)

Cr. (`)

20,000

April 1 Land and Building A/c ...Dr. 40,000 Provision for Doubtful Debts A/c ...Dr. 40,000 To Revaluation A/c (Land and Building revalued and Provision for Doubtful Debts written back)

80,000

April 1 Creditors A/c ...Dr. 25,000 To Bills Payable A/c (Bills accepted from Ashok)

25,000

April 1 Revaluation A/c ...Dr. 60,000 To Madan’s Current A/c To Krishna’s Current A/c (Gain (Profit) on revaluation credited to Partners’ Current Accounts) (WN) April 1 Madan’s Current A/c ...Dr. 12,000 Krishna’s Current A/c ...Dr. 8,000 To Goodwill A/c (Existing goodwill written off in the old ratio)

36,000 24,000

20,000

M.17

Model Test Papers April 1 Bank A/c ...Dr. 1,10,000 To Ram’s Capital A/c To Premium for Goodwill a/c (Capital and premium brought in by new partner)

1,00,000 10,000

April 1 Premium for Goodwill A/c ...Dr. 10,000 To Madan’s Current A/c To Krishna’s Current A/c (Premium distributed among sacrificing partners in 3 : 2)

6,000 4,000

April 1 General Reserve A/c ...Dr. 1,00,000 To Madan’s Current A/c To Krishna’s Current A/c (Reserve distributed among old partners)

60,000 40,000

April 1 Workmen Compensation Reserve A/c ...Dr. 70,000 To Claim for Workmen Compensation A/c To Madan’s Current A/c To Krishna’s Current A/c (Provision for workmen compensation provided and balance reserve distributed among old partners) Working Note: Dr.

40,000 18,000 12,000

Cr.

REVALUATION ACCOUNT

Particulars

` Particulars

`

To Plant and Machinery A/c 20,000 By Land and Building A/c To Gain (Profit) transferred to: By Provision for Doubtful Debts A/c Madan’s Current A/c (3/5) 36,000 Krishna’s Current A/c (2/5) 24,000 60,000 80,000

40,000 40,000

80,000

Or Dr. REVALUATION ACCOUNT Cr. Particulars ` Particulars

`

To Machinery A/c 20,000 By Provision for Doubtful Debts A/c 750 To Gain (Profit) transferred to Partners’ (` 1,500 – 5% of ` 15,000, i.e., ` 750) Current A/cs: By Building A/c 90,000 X 35,375 Y 21,225 Z 14,150 70,750 90,750 90,750 Dr. Particulars

Cr.

PARTNERS’ CURRENT ACCOUNTS X (`)  

Y (`) 

Z (`)

Particulars

To Z ’s Current A/c (WN) 38,250 22,950 ... By Revaluation A/c To Profit and Loss A/c 1,20,500 72,300 48,200 By X’s Current A/c (WN) To Z’s Capital A/c ... ... 42,150 By Y’s Current A/c (WN) (Bal. Fig.) By General Reserve A/c By Balance c/d (Bal. Fig.) 1,58,750 95,250 90,350

X (`)  

Y (`) 

Z (`)

35,375 21,225 14,150 ... ... 38,250 ... ... 22,950 37,500 22,500 15,000 85,875 51,525 ... 1,58,750 95,250 90,350

M.18

An Aid to Accountancy—CBSE XII

Dr. Particulars To Bank A/c To Z’s Loan A/c To Balance c/d

Cr.

PARTNERS’ CAPITAL ACCOUNTS X (`)  

Y (`) 

Z (`)

Particulars

... ... 35,500 By Balance b/d ... ... 2,06,650 By Z’s Current A/c 5,00,000 3,00,000 ... 5,00,000 3,00,000 2,42,150

X (`)  

Y (`) 

Z (`)

5,00,000 3,00,000 2,00,000 ... ... 42,150 5,00,000 3,00,000 2,42,150

Working Note: Goodwill of the firm =

` 4,00,000 + ` 3,00,000 – ` 2,41,000 3

× 2 = ` 3,06,000.

’s Share of Goodwill = ` 3,06,000 × 2/10 = ` 61,200, which is contributed by X and Y in their gaining ratio, i.e., Z 5 : 3. X will contribute ` 38,250 and Y ` 22,950.

22.

JOURNAL OF SUNRISE LTD.

Date Particulars

L.F.

Dr. (`)

Cr. (`)

Bank A/c ...Dr. 8,00,000 To Equity Shares Application A/c (Application money received @ ` 1 per share for 8,00,000 shares)

8,00,000

Equity Shares Application A/c ...Dr. 8,00,000 To Equity Share Capital A/c (5,00,000 × ` 1) To Equity Shares Allotment A/c To Bank A/c (1,00,000 × ` 1) (Application money adjusted)

5,00,000 2,00,000 1,00,000

Equity Shares Allotment A/c ...Dr. 10,00,000 To Equity Share Capital A/c (Allotment money due on 5,00,000 equity shares @ ` 2 each)

10,00,000

Bank A/c ...Dr. 7,92,000 To Equity Shares Allotment A/c Or Bank A/c ...Dr. 7,92,000 Calls-in-Arrears A/c (WN 1) ...Dr. 8,000 To Equity Shares Allotment A/c (Allotment money received on 4,95,000 shares) Equity Shares First Call A/c ...Dr. 15,00,000 To Equity Shares Capital A/c (First call money due on 5,00,000 equity shares) Bank A/c ...Dr. 14,70,000 To Equity Shares First Call A/c Or Bank A/c ...Dr. 14,70,000 Calls-in-Arrears A/c (10,000 × ` 3) ...Dr. 30,000 To Equity Shares First Call A/c (First call money received on 4,90,000 shares)

7,92,000

8,00,000

15,00,000

14,70,000

15,00,000

M.19

Model Test Papers Equity Shares Second and Final Call A/c ...Dr. 20,00,000 To Equity Share Capital A/c (Second and final call money due on 5,00,000 shares) Bank A/c ...Dr. 19,60,000 To Equity Shares Second and Final Call A/c Or Bank A/c ...Dr. 19,60,000 Calls-in-Arrears A/c (10,000 × ` 4) ...Dr. 40,000 To Equity Shares Second and Final Call A/c (Second and final call money received on 4,90,000 shares)

20,00,000

19,60,000

20,00,000

Equity Share Capital A/c (10,000 × ` 10) ...Dr. 1,00,000 To Equity Shares Allotment A/c To Equity Shares First Call A/c To Equity Shares Second and Final Call A/c To Forfeited Shares A/c (` 7,000 + ` 15,000) Or

8,000 30,000 40,000 22,000

Equity Share Capital A/c (10,000 × ` 10) ...Dr. 1,00,000 To Forfeited Shares A/c (` 15,000 + ` 7,000) To Calls-in-Arrears A/c (` 8,000 + ` 30,000 + ` 40,000) (10,000 shares forfeited for non-payment of allotment, first call and second and final call)

22,000 78,000

Bank A/c (8,000 × ` 12) ...Dr. 96,000 To Equity Share Capital A/c (8,000 × ` 10) To Securities Premium Reserve A/c (8,000 × ` 2) (8,000 forfeited shares reissued at ` 12 per share fully paid-up)

80,000 16,000

Forfeited Shares A/c ...Dr. 16,000 To Capital Reserve A/c (Gain on reissued shares transferred to Capital Reserve)

16,000

Working Notes: 1. Calculation of allotment money not paid by Raj: (i) Total No. of shares applied by Raj = 7,00,000/5,00,000 × 5,000 = 7,000 shares.

`

(ii) Application money received on shares applied (7,000 × ` 1)

7,000

(iii) Excess Application money adjusted on allotment [` 7,000 – (5,000 × ` 1)]

2,000

(iv) Allotment money due on shares allotted (5,000 × ` 2) (v) Allotment money due but not paid by Raj (` 10,000 – ` 2,000)

10,000 8,000

2. Calculation of allotment money received later on: ` ` Total allotment money due (5,00,000 × ` 2) 10,00,000 Less: (a) Excess application money to be adjusted on allotment 2,00,000 (b) Not received from Ahok (WN 1) 8,000 2,08,000 7,92,000 3. Calculation of Gain (Profit) on reissue to be transferred to Capital Reserve: Amount forfeited on Raj’s 5,000 shares Amount forfeited on Shiv’s 3,000 shares (` 15,000 × 3,000/5,000) Gain (Profit) on reissue to be transferred to Capital Reserve

` 7,000 9,000 16,000

M.20

An Aid to Accountancy—CBSE XII

Or

JOURNAL OF BMY LTD.

Date Particulars

L.F.

Dr. (`)

Bank A/c ...Dr. 60,00,000 To Equity Shares Application and Allotment A/c (Application money received for 15,00,000 shares) Equity Shares Application and Allotment A/c ...Dr. 60,00,000 To Equity Share Capital A/c (10,00,000 × ` 3) To Securities Premium Reserve A/c (10,00,000 × ` 1) To Calls-in-Advance A/c (Application and allotment money transferred to Equity Share Capital Account, Securities Premium Reserve Account and Calls-in-Advance Account) Equity Shares First Call A/c (10,00,000 × ` 4) ...Dr. 40,00,000 To Equity Share Capital A/c (First call money due on 10,00,000 shares) Bank A/c ...Dr. 19,92,000 Calls-in-Advance A/c ...Dr. 20,00,000 To Equity Shares First Call A/c Or Bank A/c (WN 2) ...Dr. 19,92,000 Calls-in-Arrears A/c (WN 1) ...Dr. 8,000 Calls-in-Advance A/c ...Dr. 20,00,000 To Equity Shares First Call A/c (First call money received except on 4,000 shares and Calls-in-Advance adjusted) Equity Shares Second and Final Call A/c ...Dr. 30,00,000 To Equity Share Capital A/c (Second and final call money due on 10,00,000 shares) Bank A/c ...Dr. 29,88,000 To Equity Shares Second and Final Call A/c Or Bank A/c ...Dr. 29,88,000 Calls-in-Arrears A/c ...Dr. 12,000 To Equity Shares Second and Final Call A/c (Second and final call money received except on 4,000 shares) Equity Share Capital A/c (4,000 × ` 10) ...Dr. 40,000 To Forfeited Shares A/c To Equity Shares First Call A/c To Equity Shares Second and Final Call A/c Or Equity Share Capital A/c ...Dr. 40,000 To Forfeited Shares A/c To Calls-in-Arrears A/c (Forfeiture of 4,000 shares for non-payment of both the calls) Bank A/c (3,600 × ` 8) ...Dr. 28,800 Forfeited Shares A/c ...Dr. 7,200 To Equity Share Capital A/c (3,600 shares reissued at ` 8 per share as fully paid-up) Forfeited Shares A/c ...Dr. 10,800 To Capital Reserve A/c (Gain on reissue of forfeited shares transferred to Capital Reserve)

Cr. (`) 60,00,000

30,00,000 10,00,000 20,00,000

40,00,000

39,92,000

40,00,000

30,00,000

29,88,000

30,00,000

20,000 8,000 12,000

20,000 20,000

36,000

10,800

M.21

Model Test Papers Working Notes: 1. Calculation of first call money not received: Number of shares allotted to the defaulting shareholder =

10,00,000 × 6,000 = 4,000 shares. 15.00,000

Excess Application and Allotment money received (2,000 × ` 4) = ` 8,000

`

First call money due (4,000 × ` 4)



16,000

Less: Excess Application and Allotment Money adjusted



8,000

First Call Money due but not received



8,000

2. Calculation of first call money received later on:

` `

First call money due (10,00,000 × ` 4) Less: Excess Application and Allotment money adjusted on call

Money not paid by defaulting shareholder (WN 1)

40,00,000

20,00,000 8,000

3. Calculation of gain on reissue of forfeited shares to be transferred to Capital Reserve:

20,08,000 19,92,000 `

Amount forfeited on forfeited shares (` 20,000/4,000 × 3,600)

18,000

Less: Reissue discount (3,600 × ` 2)

7,200

Gain on reissue to be transferred to Capital Reserve

10,800

PART B 23. (d) Amount received from debtors. 24. (b) ` 90,000 CALCULATION OF CASH FLOW FROM FINANCING ACTIVITIES

Particulars ` Proceeds from Issue of Shares (Including Premium)

2,20,000

Interest paid on 10% Debentures

(30,000)

Redemption of 10% Debentures

(1,00,000)

Cash Flow from Financing Activities

90,000

25. Yes, if non-operating income exceeds non-operating expenses. 26. (c) 12 months. 27. (b) Financing Activities. 28. (d) (i), (ii) and (iv) are correct. 29. (c) Operating Ratio.

M.22

An Aid to Accountancy—CBSE XII

30. Inventory Turnover Ratio =

Cost of Revenue from Operations Average Inventory

=

` 13,20,000 = 8.25 Times. ` 1,60,000

Working Notes: (i) Total Revenue from Operations = Cash Revenue from Operations + Credit Revenue from Operations = ` 10,00,000 + (` 10,00,000 × 120/100) = ` 22,00,000. (ii) Gross Profit = Total Revenue from Operations × Rate of Gross Profit/100 = ` 22,00,000 × 40/100 = ` 8,80,000. (iii) Cost of Revenue from Operations = Total Revenue from Operations – Gross Profit = ` 22,00,000 – ` 8,80,000 = ` 13,20,000. (iv) Average Inventory =

Opening Inventory + Closing Inventory 2

=

` 1,50,000 + ` 1,70,000 = ` 1,60,000. 2

Or Net Profit before Interest and Tax: Net profit after Interest and Tax Add: Tax @ 50% Net Profit after interest but before tax Add: Interest on Long-term Borrowings: Interest on Long-term Loan (10% of ` 3,00,000) 30,000 Interest on Debentures (` 10,00,000 × 12/100) 1,20,000 Net Profit before Interest and Tax Interest Coverage Ratio =

Net Profit before Interest and Tax Interest on Long-term Borrowings

=

` 7,50,000 = 5 Times. ` 1,50,000

31.

` 3,00,000 3,00,000 6,00,000

1,50,000 7,50,000

COMPARATIVE STATEMENT OF PROFIT AND LOSS for the years ended 31st March, 2019 and 2020

Particulars

Note No.

I. Revenue from Operations II. Expenses (a) Cost of Materials Consumed (b) Other Expenses Total Expenses III. Profit before Tax (I – II) IV. Tax V. Profit after Tax (III – IV) Note: Since there is loss, tax will not be adjusted.

31st March, 2019 (`)

31st March, 2020 (`)

Absolute Change (`)

Percentage Change (%)

10,00,000 20,00,000 10,00,000 100.00 6,00,000 15,00,000 9,00,000 150.00 5,50,000 6,00,000 50,000 9.09 11,50,000 21,00,000 9,50,000 82.61 (1,50,000) (1,00,000) (50,000) (33.33) ... ... ... ... (1,50,000) (1,00,000) (50,000) (33.33)

M.23

Model Test Papers

Or



COMPARATIVE BALANCE SHEET as at 31st March, 2019 and 2020

A B C D = C – B E = D/B × 100 Particulars 31st March, 31st March, Absolute Percentage 2019 2020 Change Change ` ` ` (%) I. EQUITY AND LIABILITIES 1. Shareholders’ Funds (a) Share Capital (b) Reserves and Surplus

22,50,000

30,00,000

7,50,000

33.33

4,00,000

3,00,000

(1,00,000)

(25.00)

6,00,000

9,00,000

3,00,000

50.00

2,00,000

3,00,000

1,00,000

50.00

2. Non-Current Liabilities Long-term Borrowings 3. Current Liabilities Short-term Borrowings Total II. ASSETS 1. Non-Current Assets Fixed Assets: (i) Tangible Assets (ii) Intangible Assets 2. Current Assets (a) Inventories (b) Trade Receivables (c) Cash and Cash Equivalents Total

32.

34,50,000 45,00,000 10,50,000

22,50,000 6,00,000 3,00,000 1,00,000 2,00,000

30,00,000 9,00,000 1,50,000 1,50,000 3,00,000

30.43

7,50,000 3,00,000

33.33 50.00

(1,50,000) 50,000 1,00,000

(50.00) 50.00 50.00

34,50,000 45,00,000 10,50,000

30.43

CASH FLOW STATEMENT for the year ended 31st March, 2019

Particulars  A. Cash Used in Operating Activities (Given)

` ` (18,000)

B. Cash Flow from Investing Activities Purchase of Goodwill (` 1,80,000 – ` 70,000) (1,10,000) Purchase of Plant and Machinery (WN 2) (4,82,000) Sale of Plant and Machinery 34,000 Cash Used in Investing Activities (5,58,000) C. Cash Flow from Financing Activities Redemption of 8% Debentures (` 4,00,000 – ` 1,00,000) (3,00,000) Proceeds from Issue of Shares (` 18,00,000 – ` 10,00,000) 8,00,000 Payment of Interest on Debentures (WN 4) (14,000) Cash Flow from Financing Activities 4,86,000 D. Net Increase/Decrease in Cash and Cash Equivalents (A + B + C) (90,000)

M.24

An Aid to Accountancy—CBSE XII

E. Opening Balance of Cash and Cash Equivalents Current Investments Cash and Cash Equivalents F. Closing Balance of Cash and Cash Equivalents Current Investments Cash and Cash Equivalents Working Notes: 1. Calculation of Net Profit before Tax and Extraordinary Items: Surplus, i.e., Balance in Statement of Profit and Loss (Closing) Less: Surplus, i.e., Balance in Statement of Profit and Loss (Opening) Add: Provision for Tax (Current year) Net Profit before Tax 2. Dr.

1,90,000 2,30,000

4,20,000

30,000 3,00,000

3,30,000

` 50,000 40,000 10,000 2,50,000 2,60,000 Cr.

PLANT AND MACHINERY ACCOUNT

Particulars

` Particulars

`

To Balance b/d 10,90,000 By Accumulated Depreciation A/c 12,000 To Bank A/c (Purchases)—Bal. Fig. 4,82,000 By Bank A/c (Sale) (` 40,000 – ` 6,000) 34,000 By Statement of Profit and Loss (Loss) 6,000 By Balance c/d 15,20,000 15,72,000 15,72,000 3. Dr.

Cr.

ACCUMULATED DEPRECIATION ACCOUNT

Particulars

` Particulars

`

To Plant and Machinery A/c 12,000 By Balance b/d 90,000 To Balance c/d 1,20,000 By Statement of Profit and Loss (Bal. Fig.) 42,000 —Depreciation Provided 1,32,000 1,32,000 4. Interest on Debentures: ` 4,00,000 × 3/12 × 8/100 ` 1,00,000 × 9/12 × 8/100 Total Interest on Debentures

` 8,000 6,000 14,000

5. Calculation of Cash Flow from Operating Activities: Net Profit before Tax and Extraordinary Items (WN 1) Add: Non-cash and Non-operating Items: Loss on Sale of Machinery (WN 2) Depreciation on Machinery (WN 3) Interest on Debentures (WN 4) Operating Profit before Working Capital Changes Add: Decrease in Current Assets: Trade Receivables Cash Generated from Operating Activities Less: Tax paid Cash Used in Operating Activities

2,60,000 6,000 42,000 14,000 3,22,000 20,000 3,42,000 3,60,000 (18,000)

Model Test Paper 2 Time Allowed: 3 Hours

Max. Marks: 80

General Instructions: As per Model Test Paper 1

PART A ACCOUNTING FOR NOT-FOR-PROFIT ORGANISATIONS, PARTNERSHIP FIRMS AND COMPANIES 1. ‘Relationship that exists between the persons carrying on business activities for profit’. The statement best describes (a) a partnership.

(b) a corporation.

(c) a sole proprietorship.

(d) a company.

(1)

2. Interest on capital payable to partners is transferred to the debit of (a) Realisation Account. (b) Revaluation Account. (c) Profit and Loss Account. (d) Profit and Loss Appropriation Account.

(1)

3. Subscription-in-arrears at the end are shown (a) on the credit side of the Income and Expenditure Account by way of addition to subscription received. (b) debit side of the Profit and Loss Account and the liabilities side of Balance Sheet. (c) only in the assets side of the Balance Sheet. (d) in the credit side of Income and Expenditure Account adding it to subscription received and in the assets side of the Balance Sheet. (1) 4. Dee Ltd. forfeited 2,000 equity shares of ` 10 each, issued at a premium of ` 5 per share held by Ram for non-payment of the final call of ` 3 per share. Of these 100 shares were reissued to Vishnu at a discount of ` 4 per share. The gain (profit) on reissue is (a) ` 14,000.

(b) ` 13,600.

(c) ` 700.

(d) ` 300.

(1)

5. A and B are partners sharing profits in the ratio of 4 : 3. C is admitted as partner in the firm with 1/4th share of profits. New profit-sharing ratio among A, B and C is 3 : 3 : 2. What is the ratio of sacrifice? (a) 4 : 3

(b) 3 : 4

(c) 11 : 3

(d) 2 : 1

(1)

M.26

An Aid to Accountancy—CBSE XII

6. A firm has earned exceptionally high profit from a contract which will not be renewed. In such a case, the profit from this contract will not be included in (a) profit share of the partners.

(b) valuation of the goodwill.

(c) valuation of stock.

(d) All of the above.

(1)

7. Capitals of Om and Shiv are ` 50,000 and ` 40,000. To increase the capital base of the firm to ` 1,50,000, they admit Mohan. Mohan brings ` 70,000 in the firm as his capital and share of premium for goodwill. What is the amount of premium for goodwill? (a) ` 20,000

(b) ` 30,000

(c) ` 10,000

(d) ` 5,000

(1)

8. A partnership firm is compulsorily dissolved if (a) all partners have become insolvent.

(b) firm’s business has become unlawful.

(c) the fixed term has expired.

(d) All of the above.

(1)

9. Which of the following is not shown under the head ‘Share Capital’ of Balance Sheet? (a) Preference Share Capital

(b) Calls-in-Arrears

(c) Equity Share Capital

(d) Capital Reserve Account

(1)

10. Accumulated Profits/Losses and Reserves on retirement of a partner are shared by the partners in their (a) Capital Ratio.

(b) Old Profit-sharing Ratio.

(c) Gaining Ratio.

(d) New Profit-sharing Ratio.

(1)

11. Retiring partner’s claim is payable in the following manner: (a) Fully in cash. (b) Fully transferred to his loan account to be paid later with interest. (c) Partly in cash and partly as loan repayable later with agreed interest. (d) Any of the above method.

(1)

12. Revaluation Account is debited (a) on increase in Provision for Doubtful Debts. (b) on increase in value of Land and Building. (c) on decrease in amount of creditors. (d) to transfer loss on revaluation.

(1)

13. Kavita, Leena and Monica are partners in a firm sharing profits in the ratio of 3 : 2 : 1. According to the Partnership Deed, share of deceased partner is to be calculated on the basis of profit and turnover of previous accounting year. Kavita died on 31st December, 2019. Turnover till the date of death was ` 45,00,000. Their profit and turnover for the year ended 31st March, 2019 was ` 10,00,000 and ` 50,00,000 respectively. An amount of ` ____________ will be given to her executors as her share of profit till the date of death. (1)

M.27

Model Test Papers

14. On the basis of the following information, prepare extract of Income and Expenditure Account of Harsh Sports Club for the year ended 31st March, 2020 showing stationery consumed: Particulars

1st April, 31st March, 2019 (`) 2020 (`)

Stock of Stationery Creditors for Stationery

80,000 90,000

60,000 1,10,000

Stationery purchased during the year ended 31st March, 2020 was ` 4,70,000. Or

How will be the following dealt in preparing the final accounts of King Sports Club for the year ending 31st March, 2020:

(a) Subscription received during 2019–20:

` `

For 2018–19

10,000



2019–20

60,000



2020–21

12,000

82,000

(b) Subscription received in advance as at 31st March, 2019: ` 12,000. (c) Subscription outstanding as at 31st March, 2019: ` 12,000. (d) Subscription outstanding for the year 2019–20: ` 8,000.

(3)

15. Neena and Sara were partners in a firm with fixed capitals of ` 5,00,000 and ` 4,00,000 respectively. It was discovered that interest on capital @ 6% p.a. was credited to the partners for the two years ending 31st March, 2018 and 31st March, 2019 whereas there was no such provision in the Partnership Deed. Their profit-sharing ratio during the last two years was: 2017–18

4:5

2018–19

5:1

Showing your working clearly, pass the necessary adjustment entry to rectify the error.

(CBSE 2020)

Or

On 1st April, 2019, Brij and Nandan entered into partnership. They contributed capitals of ` 10,00,000 and ` 15,00,000 respectively.

Their profit-sharing ratio was 2 : 3 and interest allowed on capitals as provided in the Partnership Deed was 12% per annum. During the year ended 31st March, 2020, the firm earned a profit of ` 2,00,000. Prepare Profit and Loss Appropriation Account of Brij and Nandan for the year ended 31st March, 2020.

(4)

M.28

An Aid to Accountancy—CBSE XII

16. From the following information, complete the Journal entries: Date Particulars

L.F.

Dr. (`)

Share Capital A/c ...Dr. ? Securities Premium Reserve A/c ...Dr. 5,000 To Forfeited Shares A/c To Calls-in-Arrears A/c (? shares forfeited for non-payment of ` ? including premium of ` 20 per share) Bank A/c ...Dr. ? Forfeited Shares A/c ...Dr. ? To Share Capital A/c (? shares reissued at ` 90 per share as fully paid) Forfeited Shares A/c ...Dr. 3,000 To Capital Reserve A/c (Gain(Profit) on reissue of forfeited shares transferred to Capital Reserve) Dr. Particulars

Cr. (`)

? 17,500

?

3,000

Cr.

FORFEITED SHARES ACCOUNT ` Particulars

To Share Capital A/c ? By  Share Capital A/c To Capital reserve A/c 3,000 To Balance c/d 3,000 7,500 (Face value of share is ` 100 each)

` 7,500

7,500

(4)

17. A firm under dissolution has already transferred its assets (other than cash) and outside liabilities to Realisation Account. Firm has two partners X and Y. What entries will be passed for the following transactions: (a) There is furniture of ` 50,000. X took 50% of the furniture at 10% discount and the remaining furniture was sold at 30% profit on the book value. (b) Firm had unrecorded investment (Nominal value ` 20,000), 70% of investment were sold at a loss of 20% and remaining were taken by X, a partner, at 90%. (c) Y’s loan of ` 6,000 was discharged at ` 6,400. (d) One bill receivable for ` 5,000 under discount was dishonoured as the acceptor had become insolvent and was unable to pay hence the bill had to be met by the firm. (4) 18. Ram and Shyam are partners, not having a partnership agreement. State who is correct in each of the following case: (a) Ram demands a salary since he works and Shyam does not work for the firm. (b) Ram has invested ` 2,00,000 and Shyam only ` 50,000 as capital. Ram demands interest @ 9% p.a. (c) Shyam has given a loan of ` 1,00,000 to the firm; he demands interest @ 6% p.a. (d) Ram demands profit of the firm be distributed in Capital Ratio.

(4)

M.29

Model Test Papers

19. From the given Receipts and Payments Account and additional information of Premier Club for the year ended 31st March, 2020, prepare Income and Expenditure Account for the year ended 31st March, 2020 and Balance Sheet as on that date: Dr.

RECEIPTS AND PAYMENTS ACCOUNT OF PREMIER CLUB for the year ended 31st March, 2020

Cr.

Receipts ` Payments ` To Balance b/d 80,900 By Furniture and Equipment 1,00,000 To Donations 39,000 (Purchased on 1st October, 2019) To Subscriptions: By Salaries 62,000 2018–19 12,000 By Balance c/d 68,600 2019–20 70,000 2020–21 9,000 91,000 To Interest received 19,700 2,30,600 2,30,600

Additional Information: (i) On 1st April, 2019, the club had the following balance of assets and liabilities: Furniture and Equipment ` 1,80,000, Subscriptions in arrears ` 15,000, and Outstanding Salary ` 13,000. (ii) Charge depreciation on Furniture and Equipment @ 10% p.a. (iii) The club had 90 members, each paying an annual subscription of ` 1,000.

(6)

20. (a) India Steel Ltd. purchased a running business from Hero Ltd. for ` 6,00,000 payable 10% by cheque and balance by the issue of fully paid 10% Debentures of ` 100 each at a premium of 20%. The assets and liabilities consisted of the following: Particulars Book Value (`) Agreed Value (`) Building

2,00,000 2,60,000

Plant and Machinery

1,20,000

Stock

2,25,000 2,00,000

Sundry Debtors (Trade Receivables)

1,10,000

1,00,000

90,000

80,000

Sundry Creditors (Trade Payables)

1,00,000



Pass the necessary Journal entries in the books of India Steel Ltd.



(b) On 1st April, 2019, Star Ltd. issued 5,000, 9% Debentures of ` 100 each at a discount of 5%, to be redeemable at a premium of 5%, after 5 years. The issue price was payable along with application. The issue was oversubscribed to the extent of 5,000 debentures and the allotment was made proportionately to all the applicants. It had a balance of ` 30,000 in Securities Premium Reserve and Profit for the year was ` 50,000. Give Journal entries for the issue of debentures and writing off loss on issue of debentures.

(6)

M.30

An Aid to Accountancy—CBSE XII

21. (a) A and B are partners in a firm sharing profits in the ratio of 5 : 3. They admit C into partnership for 3/10th share in profits, which he takes 2/10th from A and 1/10th from B, C brings ` 3,000 as premium in cash out of his share of ` 7,800. Goodwill existed in the books of A and B at ` 8,000. Give the necessary Journal entries in the books of the new firm.

(b) A and B are partners with capitals of ` 13,000 and ` 9,000 respectively. They admit C as partner for 1/5th share in the profit of the firm. C brings ` 8,000 as his capital. Give Journal entires to record goodwill.



(c) A and B were partners in a firm sharing profits in 4 : 3 ratio. On 1st January, 2020 they admitted C as a partner. On the date of C’s admission, the Balance Sheet of A and B showed General Reserve of ` 70,000 and debit balance of ` 7,000 in the ‘Profit and Loss Account’. Pass the necessary Journal entries for the treatment of these items on C ’s admission. (3 + 3 + 2) Or



Prem, Kumar and Aarti were partners sharing profits in the ratio of 5 : 3 : 2. Their Balance Sheet as at 31st March, 2019 was as under: BALANCE SHEET OF PREM, KUMAR AND AARTI as at 31st March, 2019

Liabilities ` Assets

`

Capitals: Building Prem 30,000 Plant and Machinery Kumar 20,000 Investment Aarti 20,000 70,000 Debtors General Reserve 8,000 Stock Investment Fluctuation Reserve 2,000 Cash Sundry Creditors 10,000 90,000

25,000 15,000 10,000 10,000 5,000 25,000 90,000

On the above date, Kumar retired. The terms of retirement were: (i) Kumar sold his share of goodwill to Prem for ` 8,000 and to Aarti for ` 4,000. (ii) Stock was found to be undervalued by ` 1,000 and building by ` 7,000. (iii) Investments were sold for ` 11,000. (iv) There was an unrecorded creditor of ` 7,000. (v) An amount of ` 30,000 was paid to Kumar in cash which was contributed by Prem and Aarti in the ratio of 2 : 1. The balance amount of Kumar was settled by accepting a Bill of Exchange in favour of Kumar. Prepare the Revaluation Account, Capital Accounts of partners and the Balance Sheet of the reconstituted firm. (CBSE 2020) (8)

M.31

Model Test Papers

22. Sagar Ltd. invited applications for issuing 10,000 Equity Shares of ` 100 each. The amount was payable as follows: On Application

—

` 10,

On Allotment

—

` 20,

On First Call

—

` 30,

On Second and Final Call

— Balance.



The issue was fully subscribed. Ram to whom 100 shares were allotted, did not pay the allotment money and his shares were forfeited immediately after allotment. Shyam to whom 150 shares were allotted, did not pay the first call. His shares were also forfeited after the first call. Mohan to whom 50 shares were allotted did not pay the second and final call. His shares were also forfeited. All the forfeited shares were reissued at ` 90 per share fully paid-up.



Pass necessary Journal entries in the books of Sagar Ltd. assuming that Calls-in-Arrears Account is maintained. Or



‘Subham Ltd.’ invited applications for issuing 12,000 equity shares of ` 10 each at a premium of ` 3 per share. The amount was payable as follows:

On application and allotment —

` 6 per share (Including Premium),

On first call

—

` 4 per share,

On second and final call

—

the balance.



Applications for 18,000 shares were received and pro rata allotment was made to all the applicants.



Excess money received with applications was adjusted towards amounts due on first call. All calls were made and were duly received except the first call and second and final call on 120 shares allotted to Vibhu. His shares were forfeited. The forfeited shares were reissued at the maximum permissible discount as per the provisions of the Companies Act, 2013.



Pass necessary Journal entries for the above transactions in the books of the company. (8)

PART B ANALYSIS OF FINANCIAL STATEMENTS 23. Particulars 31st March, 2020 (`)

31st March, 2019 (`)

Fixed Assets

9,32,000

8,50,000

Accumulated Depreciation

4,40,000

4,25,000

M.32

An Aid to Accountancy—CBSE XII

Additional Information:

A machine with book value of ` 1,05,000 (Depreciation provided thereon ` 65,000) was sold at a loss of ` 8,000.

How much amount (related to above information) will be shown in Cash Flow from Investing Activities for the year ended 31st March, 2020?

(a) Net cash inflow from Investing Activities: ` 1,13,000. (b) Net cash used in Investing Activities: ` 1,55,000. (c) Net cash inflow from Investing Activities: ` 1,05,000. (d) Net cash used in Investing Activities: ` 82,000.

(1)

24. State whether the following statement is true or false: ‘Inventory Turnover Ratio measures the level of financial leverage’. (CBSE 2020) (1) 25. Which one of the following is not the objective of financial analysis? (a) To determine liquidity (short-term solvency). (b) To determine long-term solvency. (c) To determine operating efficiency. (d) To determine tax liability.

(1)

26. Which of the following is not shown under Cash Flow from Financing Activities? (a) Payment of dividend. (b) Issue of debentures for cash. (c) Interest paid on bank loan. (d) Issue of shares for purchase of fixed assets.

(1)

27. Which of the following statements is not correct? (a) Capital Employed = Shareholders’ Funds + Non-current Liabilities. (b) Capital Employed = (Share capital + Reserves and Surplus) + (Long-term Borrowings + Long-term Provisions). (c) Equity = Total Assets – Total Debt. (d) Capital Employed = Equity.

(1)

28. State the numerator used in Proprietary Ratio. (a) Total Debt.

(b) Total Assets.

(c) Capital Employed.

(d) Shareholders’ Funds.

(1)

29. In a company’s Balance Sheet, Provision for Employees Benefits to be paid within 12 months from the date of Balance Sheet is shown under: (a) Non-current Liabilities.

(b) Current Liabilities.

(c) Non-current Assets.

(d) Current Assets.

(1)

M.33

Model Test Papers

30. Calculate ‘Total Assets to Debt Ratio’ from the following information: Current Assets Working Capital Shareholders’ Funds Total Debts Reserves and Surplus

` 11,00,000 6,50,000 7,50,000 19,50,000 2,50,000

(CBSE 2020)

Or

Credit Revenue from Operations were ` 1,80,000. If Trade Receivables Turnover Ratio is 4 Times, calculate Trade Receivables in the beginning and at the end of the year. Closing Trade Receivables are two times in comparison to Opening Trade Receivables. (3) 31. From the following information, prepare Comparative Statement of Profit and Loss: Particulars 31st March, 2019 (`) Revenue from Operations Other Income Expenses Tax Rate



80,00,000 1,20,00,000 16,00,000 14,40,000 60% of Revenue from Operations 70% of Revenue from Operations 50% 50%

Or Prepare a Common-size Balance Sheet of L.X. Ltd. from the following information:

Particulars I.

31st March, 2020 (`)

Note No. 31st March, 31st March, 2019 (`) 2018 (`)

EQUITY AND LIABILITIES 1. Shareholders’ Funds 2. Non-Current Liabilities 3. Current Liabilities Total

20,00,000 10,00,000 20,00,000 5,00,000 10,00,000 5,00,000 50,00,000 20,00,000

II. ASSETS 1. Non-Current Assets 2. Current Assets

30,00,000 20,00,000

12,50,000 7,50,000

Total

50,00,000

20,00,000

(CBSE 2020) (4)

32. From the following Balance Sheet of Vikas Ltd., prepare Cash Flow Statement: Particulars Note No. 31st March, 31st March, 2020 (`) 2019 (`) I. EQUITY AND LIABILITIES 1. Shareholders’ Funds (a) Share Capital (b) Reserves and Surplus 1 2. Non-Current Liabilities Long-term Borrowings

2

3. Current Liabilities (a) Trade Payables (b) Short-term Provisions 3 Total

10,00,000 7,50,000

10,00,000 6,00,000

1,00,000

2,00,000

1,00,000 95,000 20,45,000

1,10,000 80,000 19,90,000

M.34

An Aid to Accountancy—CBSE XII

II. ASSETS 1. Non-Current Assets (a) Fixed Assets: (i) Tangible Assets 4 (ii) Intangible Assets: Goodwill (b) Non-current Investments 2. Current Assets (a) Inventories (b) Trade Receivables (c) Cash and Cash Equivalents

Total

10,10,000 1,80,000 1,00,000

12,00,000 2,00,000 ...

1,80,000 2,00,000 3,75,000

1,00,000 1,50,000 3,40,000

20,45,000

19,90,000

Notes to Accounts Particulars

31st March, 31st March, 2020 (`) 2019 (`)

1. Reserves and Surplus Surplus, i.e., Balance in Statement of Profit and Loss

7,50,000

6,00,000

...

2,00,000

2. Long-term Borrowings 2,000, 10% Debentures of ` 100 each Bank Loan

1,00,000

...



1,00,000 2,00,000

3. Short-term Provisions Provisions for Tax

95,000

80,000

Land and Building

6,50,000

8,00,000

Plant and Machinery

3,60,000

4,00,000

4. Tangible Assets



10,10,000 12,00,000

Additional Information: (i) Proposed Dividend for the year ended 31st March, 2019 and 2020 were 15% and 20% respectively. (ii) Land and Building of book value ` 1,50,000 was sold at a profit of 10%. (iii) Rate of depreciation on Plant and Machinery is 10%.

(6)

M.35

Model Test Papers

Answers PART A 1. (a) a partnership. 2. (d) Profit and Loss Appropriation Account. 3. (d) in the credit side of Income and Expenditure Account adding it to subscription received and in the assets side of the Balance Sheet. 4. (d) ` 300. Working Note:

Amount forfeited on 100 shares = 100 × ` 7 = ` 700 Less: Reissue discount = 100 × ` 4 = ` 400 Gain on reissue ` 300

5. (c) 11 : 3. Working Note:

4 3 32  21 11   A’s sacrifice =  7 8 56 36



3 3 24  21 3   B’s sacrifice =  7 8 56 56



Sacrificing Ratio = 11 : 3.

6. (b) Valuation of Goodwill. 7. (c) ` 10,000. Working Note: The total capital of the firm is ` 90,000. To increase the capital base to ` 1,50,000. Mohan is to bring in ` 60,000 (` 1,50,000 – ` 90,000). But he brings in ` 70,000. Therefore, the excess of ` 10,000 is premium for goodwill.

8. (d)

9. (d) Capital Reserve Account

10. (b) Old Profit-sharing Ratio

11. (d)

12. (a) 13. ` 4,50,000 Working Note: Calculation of Kavita’s Share of Profit: % of Profit to Sales =

` 10,00,000 ×100 = 20% ` 50,00,000

Estimated profit till date of death = ` 45,00,000 × 20/100 = ` 9,00,000 Kavita’s Share of Profit = ` 9,00,000 × 3/6 = ` 4,50,000.

14.

Harsh Sports Club AN EXTRACT OF INCOME AND EXPENDITURE ACCOUNT Dr. for the year ended 31st March, 2020 Expenditure ` Income To Stationery Consumed (WN)

4,90,000

Cr. `

M.36

An Aid to Accountancy—CBSE XII

Working Note: Stationery Consumed (2019–20) = Opening Stock of Stationery + Purchases of Stationery – Closing Stock of Stationery = ` 80,000 + ` 4,70,000 – ` 60,000 = ` 4,90,000. Since stationery purchased during the year is given, creditors are already adjusted in it and, therefore, no treatment is given to creditors.

Or Dr.

King Sports Club INCOME AND EXPENDITURE ACCOUNT (AN EXTRACT) for the year ended 31st March, 2020

Expenditure

` Income

`

By Subscription Add: Subscription: Advance (31st March, 2019) Arrear (2019–20) Dr. Liabilities

60,000 12,000 8,000

80,000

BALANCE SHEET as on 31st March, 2020

Cr.

` Assets

Advance Subscription 12,000

15.

Cr.

`

Subscription Outstanding: For 2018–19 (` 12,000 – ` 10,000) For 2019–20

2,000 8,000

JOURNAL

Date Particulars

L.F.

Dr. (`)

Cr. (`)

2019 April 1 Sara’s Current A/c ...Dr. 9,000 To Neena’s Current A/c (Interest on capital wrongly credited, now debited)

9,000

Working Note: ADJUSTMENT TABLE Particulars 2017–18 I. Interest on Capital already credited now taken back II. Profit of ` 54,000 in 4 : 5 2018–19 I. Interest on Capital already credited now taken back II. Profit of ` 54,000 in 5 : 1 Net Effect

Neena’s Current A/c Dr. (`) Cr. (`)

Sara’s Current A/c Dr. (`) Cr. (`)

Dr. (`)

Firm Cr. (`)

... 54,000

54,000 ...

30,000 ...

... 24,000

24,000 ...

... 30,000

30,000 ... 60,000

... 45,000 69,000

24,000 ... 48,000

... ... 54,000 9,000 54,000 ... 39,000 1,08,000 1,08,000

` 9,000 (Cr.)

` 9,000 (Dr.)

M.37

Model Test Papers

Or



Dr.

PROFIT AND LOSS APPROPRIATION ACCOUNT for the year ended 31st March, 2020

Cr.

Particulars ` Particulars ` To Interest on Capital A/cs:

Brij

By Profit and Loss A/c—Net Profit

2,00,000

80,000

Nandan 1,20,000 2,00,000 2,00,000 2,00,000 Working Notes:

`

1. Interest on Brij’s Capital (` 10,00,000 × 12/100) 1,20,000 Interest on Nandan’s Capital (` 15,00,000 × 12/100) 1,80,000 Total Interest 3,00,000 2. Total Interest due to Brij and Nandan is ` 3,00,000. However, total distributable profit is just ` 2,00,000. So, total profit of ` 2,00,000 will be distributed between Brij and Nandan in the ratio of their due interest on capitals, i.e., ` 1,20,000 : ` 1,80,000 or 2 : 3. Thus, Interest allowed to Brij = ` 2,00,000 × 2/5 = ` 80,000; and Interest allowed to Nandan = ` 2,00,000 × 3/5 = ` 1,20,000.

16.

JOURNAL

Date Particulars

L.F.

Dr. (`)

Share Capital A/c ...Dr. 20,000 Securities Premium Reserve A/c ...Dr. 5,000 To Forfeited Shares A/c To Calls-in-Arrears A/c (250 shares forfeited for non-payment of ` 70 per share including premium of ` 20 per share) Bank A/c ...Dr. 13,500 Forfeited Shares A/c ...Dr. 1,500 To Share Capital A/c (150 shares reissued at ` 90 per share as fully paid) Forfeited Shares A/c ...Dr. 3,000 To Capital Reserve A/c (Gain(profit) on reissue of forfeited shares transferred to Capital Reserve) Dr.

Cr. (`)

7,500 17,500

15,000

3,000

FORFEITED SHARES ACCOUNT Cr.

Particulars ` Particulars ` To Share Capital A/c 1,500 By Share Capital A/c To Capital Reserve A/c 3,000 To Balance c/d 3,000 7,500

7,500

7,500

M.38 17.

An Aid to Accountancy—CBSE XII JOURNAL

Date Particulars

L.F.

Dr. (`)

(a) X’s Capital A/c ...Dr. 22,500 Bank A/c ...Dr. 32,500 To Realisation A/c (50% of furniture taken by X at a discount of 10% and remaining sold at 30% profit) (b) Bank A/c (` 14,000 – 20% of ` 14,000) ...Dr. 11,200 X’s Capital A/c (` 6,000 × 90/100) ...Dr. 5,400 To Realisation A/c (Unrecorded investment realised) (c) Y’s Loan A/c ...Dr. 6,000 Realisation A/c ...Dr. 400 To Bank A/c (Y’s loan of ` 6,000 discharged of ` 6,400) (d) Realisation A/c ...Dr. 5,000 To Bank A/c (Dishonoured bill met by firm)

Cr. (`)

55,000

16,600

6,400

5,000

18. (a) Ram is not correct. Salary is not payable to Ram in the absence of partnership agreement. (b) Ram is not correct. Interest is not payable on capital. (c) Shyam is correct. Interest @ 6% will be paid on loan. (d) Ram is not correct. The partners share the profits and losses of the firm equally irrespective of their capital contribution in the absence of agreement. 19. Dr.

INCOME AND EXPENDITURE ACCOUNT for the year ended 31st March, 2020

Expenditure ` Income

Cr. `

To Depreciation on Furniture: By Subscription 70,000 (` 1,80,000 × 10/100) 18,000 Add: Outstanding Subscription 20,000 90,000 (` 1,00,000 × 10/100 × 6/12) 5,000 23,000 (WN 1) To Salary 62,000 By Interest 19,700 Less: Outstanding Salary 13,000 49,000 By Donations 39,000 (1st April, 2019) To Surplus, i.e., Excess of Income Over Expenditure 76,700 1,48,700 1,48,700

BALANCE SHEET OF PREMIER CLUB as on 31st March, 2020

Liabilities ` Assets

`

Capital Fund (WN 2) 2,62,900 Furniture 2,80,000 Add: Surplus 76,700 3,39,600 Less: Depreciation 23,000 2,57,000 Subscriptions Received in Advance 9,000 Outstanding Subscriptions: 2018–19 (` 15,000 – ` 12,000) 3,000 2019–20 20,000 23,000 Cash 68,600 3,48,600 3,48,600

M.39

Model Test Papers Working Notes: 1. Subscription Reveivable (2019–20): ` 1,000 × 90 = ` 90,000 Subscription Received (2019–20) = ` 70,000 Subscription outstanding 2019–20 ` 20,000 2. Calculation of Opening Capital Fund: BALANCE SHEET OF PREMIER CLUB as on 1st April, 2019 Liabilities ` Assets

`

Capital Fund (Balancing Figure) 2,62,900 Furniture 1,80,000 Outstanding Salary 13,000 Outstanding Subscriptions 15,000 Cash 80,900 2,75,900 2,75,900

20. (a) JOURNAL Date Particulars

L.F.

Dr. (`)

Building A/c ...Dr. 2,60,000 Plant and Machinery A/c ...Dr. 1,00,000 Stock A/c ...Dr. 2,00,000 Sundry Debtors (Trade Receivables) A/c ...Dr. 1,00,000 Goodwill A/c (Balancing Figure) ...Dr. 20,000 To Sundry Creditors (Trade Payables) A/c To Hero Ltd. (Purchase of business from Hero Ltd.)

Cr. (`)

80,000 6,00,000

Hero Ltd. ...Dr. 60,000 To Bank A/c (Part payment made to Vendor by a cheque)

60,000

Hero Ltd. ...Dr. 5,40,000 To 10% Debentures A/c To Securities Premium Reserve A/c (Issue of 4,500 debentures at 20% premium to Hero Ltd.)

4,50,000 90,000

Note: No. of Debentures to be issued = ` 5,40,000/` 120 = 4,500. (b)

JOURNAL OF STAR LTD.

Date Particulars

L.F.

Dr. (`)

2019 April 1 Bank A/c ...Dr. 9,50,000 To Debentures Application and Allotment A/c (Application money received on 10,000, 8% Debentures) April 1 Debentures Application and Allotment A/c ...Dr. 9,50,000 Loss on Issue of Debentures A/c (` 25,000 + ` 25,000) ...Dr. 50,000 To 9% Debentures A/c To Premium on Redemption of Debentures A/c To Bank A/c (5,000 × ` 95) (Debentures allotted and the balance refunded) 2020 March 31 Securities Premium Reserve A/c ...Dr. 30,000 Statement of Profit and Loss ...Dr. 20,000 To Loss on Issue of Debentures A/c (Loss on issue of debentures written off)

Cr. (`)

9,50,000

5,00,000 25,000 4,75,000

50,000

M.40 21. (a)

An Aid to Accountancy—CBSE XII JOURNAL

Date Particulars

L.F.

Dr. (`)

A’s Capital A/c ...Dr. 5,000 B’s Capital A/c ...Dr. 3,000 To Goodwill A/c (Existing goodwill written-off)

Cr. (`)

8,000

Cash/Bank A/c ...Dr. 3,000 To Premium for Goodwill A/c (Premium brought by C)

3,000

Premium for Goodwill A/c ...Dr. 3,000 To A’s Capital A/c To B’s Capital A/c (Premium divided among sacrificing partners in sacrificing ratio)

2,000 1,000

C’s Current A/c ...Dr. 4,800 To A’s Capital A/c To B’s Capital A/c (Premium not brought by the new partner debited to his Current Account) (b)

3,200 1,600

JOURNAL

Date Particulars

L.F.

Dr. (`)

Cr. (`)

Cash/Bank A/c ...Dr. 8,000 To C’s Capital A/c (Cash brought in by C as capital)

8,000

C’s Capital/Current A/c (` 10,000 × 1/5) ...Dr. 2,000 To A’s Capital A/c (` 2,000 × 1/2) To B’s Capital A/c (` 2,000 × 1/2) (C’s share of goodwill credited to sacrificing partners)

1,000 1,000

Working Note: Calculation of Hidden Goodwill:

`

(a) Net Worth (including goodwill) of new firm (` 8,000 × 5/1)

40,000

(b) Net Worth (excluding goodwill) of new firm (` 13,000 + ` 9,000 + ` 8,000)

30,000

(c) Hidden Goodwill (` 40,000 – ` 30,000)

10,000

(d) Share of C in Goodwill (` 10,000 × 1/5)

2,000

(c)

JOURNAL

Date Particulars

L.F.

Dr. (`)

General Reserve A/c ...Dr. 70,000 To A’s Capital A/c To B’s Capital A/c (General Reserve distributed between A and B) A’s Capital A/c ...Dr. 4,000 B’s Capital A/c ...Dr. 3,000 To Profit and Loss A/c (Debit balance of Profit and Loss A/c transferred to Capital A/cs)

Cr. (`) 40,000 30,000

7,000

M.41

Model Test Papers

Or Dr.

REVALUATION ACCOUNT Cr.

Particulars ` Particulars ` To Creditors A/c 7,000 By Stock A/c To Gain (Profit) on Revaluation transferred to: By Building A/c Prem’s Capital A/c 1,000 By Investment A/c Kumar’s Capital A/c 600 Aarti’s Capital A/c 400 2,000 9,000 Dr.

1,000 7,000 1,000

9,000 Cr.

PARTNERS’ CURRENT ACCOUNTS

Particulars

Prem (`)   Kumar (`)  Aarti (`) Particulars

Prem (`)   Kumar (`)  Aarti (`)

To Kumar’s Capital A/c 8,000 ... 4,000 By Balance b/d (Goodwill) By General Reserve A/c To Cash A/c ... 30,000 ... By Investment Fluctuation To Bills Payable A/c ... 5,600 ... Reserve A/c To Balance c/d 48,000 ... 28,400 By Revaluation A/c By Prem’s Capital A/c (Goodwill) By Aarti’s Capital A/c (Goodwill) By Cash A/c (WN) 56,000 35,600 32,400

30,000 20,000 20,000 4,000 2,400 1,600 1,000 1,000 ...

600 600 8,000

400 400 ...

...

4,000

...

20,000 ... 10,000 56,000 35,600 32,400

BALANCE SHEET OF PREM AND AARTI as at 31st March 2019 Liabilities ` Assets

`

Capitals: Building Prem 48,000 Plant and Machinery Aarti 28,400 76,400 Debtors Bills Payable 5,600 Stock Creditors 17,000 Cash (` 25,000 + ` 11,000) 99,000

32,000 15,000 10,000 6,000 36,000 99,000

Working Note: An amount of ` 30,000 paid to Kumar was contributed by Prem: ` 20,000

22.

(= ` 30,000 × 2/3) and Aarti ` 10,000 (` 30,000 × 1/3). This payment will not affect Cash Balance. JOURNAL OF SAGAR LTD.

Date Particulars L.F.

Dr. (`)

Cr. (`)

Bank A/c (10,000 × ` 10) ...Dr. 1,00,000 To Equity Shares Application A/c (Application money received)

1,00,000

Equity Shares Application A/c ...Dr. 1,00,000 To Equity Share Capital A/c (Application money transferred to Equity Share Capital Account)

1,00,000

M.42

An Aid to Accountancy—CBSE XII

Equity Shares Allotment A/c ...Dr. 2,00,000 To Equity Share Capital A/c (Allotment money due on 10,000 shares) Bank A/c ...Dr. 1,98,000 Calls-in-Arrears A/c ...Dr. 2,000 To Equity Shares Allotment A/c (Allotment money received except on 100 shares)

2,00,000

2,00,000

Equity Share Capital A/c (100 × ` 30) ...Dr. 3,000 To Forfeited Shares A/c (100 × ` 10) To Calls-in-Arrears A/c (100 × ` 20) (100 shares forfeited for non-payment of allotment money)

1,000 2,000

Equity Shares First Call A/c ...Dr. 2,97,000 To Equity Share Capital A/c (First call money due on 9,900 shares)

2,97,000

Bank A/c ...Dr. 2,92,500 Calls-in-Arrears A/c ...Dr. 4,500 To Equity Shares First Call A/c (First call money received except on 150 shares)

2,97,000

Equity Share Capital A/c (150 × ` 60) ...Dr. 9,000 To Forfeited Shares A/c (150 × ` 30) To Calls-in Arrears A/c (150 shares forfeited due to non-payment of first call money)

4,500 4,500

Equity Shares Second and Final Call A/c ...Dr. 3,90,000 To Equity Share Capital A/c (Second and final call money due on 9,750 shares)

3,90,000

Bank A/c ...Dr. 3,88,000 Calls-in-Arrears A/c ...Dr. 2,000 To Equity Shares Second and Final Call A/c (Final call money received except on 50 shares) Equity Share Capital A/c ...Dr. 5,000 To Calls-in-Arrears A/c To Forfeited Shares A/c (50 shares forfeited due to non-payment of second call money) Bank A/c (300 × ` 90) ...Dr. 27,000 Forfeited Shares A/c (300 × ` 10) ...Dr. 3,000 To Equity Share Capital A/c (300 shares reissued at ` 90 per share fully paid-up) Forfeited Shares A/c ...Dr. 5,500 To Capital Reserve A/c (Gain (profit) on reissue transferred to Capital Reserve) (Note)

3,90,000

2,000 3,000

30,000

5,500

Note: Dr.



Cr.

FORFEITED SHARES ACCOUNT

Particulars ` Particulars ` To Equity Share Capital A/c 3,000 To Capital Reserve A/c (Balancing Figure) 5,500

By Equity Share Capital A/c By Equity Share Capital A/c By Equity Share Capital A/c

8,500

1,000 4,500 3,000 8,500

M.43

Model Test Papers

Or In the Books of Subham Ltd. JOURNAL Date Particulars

L.F.

Dr. (`)

Cr. (`)

Bank A/c ...Dr. 1,08,000 To Equity Shares Application and Allotment A/c (Application money received)

1,08,000

Equity Shares Application and Allotment A/c ...Dr. 1,08,000 To Equity Share Capital A/c (12,000 × ` 3) To Calls-in-Advance A/c (6,000 × ` 6) To Securities Premium Reserve A/c (12,000 × ` 3) (Application money adjusted on allotment)

36,000 36,000 36,000

Equity Shares First Call A/c ...Dr. 48,000 To Equity Share Capital A/c (First call money due on 12,000 shares)

48,000

Bank A/c ...Dr. 11,880 Calls-in-Advance A/c ...Dr. 36,000 To Equity Shares First Call A/c Or Bank A/c ...Dr. 11,880 Calls-in-Arrears A/c (WN 1) ...Dr. 120 Calls-in-Advance A/c ...Dr. 36,000 To Equity Shares First Call A/c (First call money received except on 120 shares and the advance adjusted) Equity Shares Second and Final Call A/c ...Dr. 36,000 To Equity Share Capital A/c (Second and final call money due) Bank A/c ...Dr. 35,640 To Equity Shares Second and Final Call A/c Or Bank A/c ...Dr. 35,640 Calls-in-Arrears A/c ...Dr. 360 To Equity Shares Second and Final Call A/c (Second and final call money received except on 120 shares) Equity Share Capital A/c ...Dr. 1,200 To Forfeited Shares A/c To Equity Shares First Call A/c To Equity Shares Second and Final Call A/c Or Equity Share Capital A/c ...Dr. 1,200 To Forfeited Shares A/c To Calls-in-Arrears A/c (120 shares forfeited for non-payment of call money) Bank A/c ...Dr. 480 Forfeited Shares A/c (WN 2) ...Dr. 720 To Share Capital A/c (120 forfeited shares reissued for ` 4 per share as fully paid-up)

47,880

48,000

36,000

35,640

36,000

720 120 360

720 480

1,200

M.44

An Aid to Accountancy—CBSE XII

Working Notes:

1. Number of Shares applied by Vibhu =

18,000  120 = 180 shares. 12,000

(a) Application money received from Vibhu = 180 × ` 6 = ` 1,080. (b) Application and allotment money Required = 120 × ` 6 = ` 720. (c) Surplus application money adjusted towards first call [(a) – (b)] = ` 1,080 – ` 720 = ` 360. (d) First call money required from Vibhu (120 × ` 4) ` 480 Less: Surplus application money adjusted [WN 1(c)] ` 360 Unpaid Balance ` 120 2. Maximum Permissible Discount on Reissue is equal to the amount credited to Forfeited Shares Account, i.e., ` 720.

3. There is no gain on reissue of forfeited shares.

PART B 23. (b) Net Cash Used in Investing Activities: [` 32,000 (Sale) – ` 1,87,000 (Purchase)] = ` 1,55,000. Working Note: Dr.



FIXED ASSETS ACCOUNT (AT COST)

Cr.

Particulars ` Particulars ` To Balance b/d 8,50,000 By Accumulated Depreciation A/c 65,000 To Bank A/c (Purchase)—Balancing Figure 1,87,000 By Bank A/c (Sale) 32,000 By Statement of Profit and Loss (Loss on Sale) 8,000 By Balance c/d 9,32,000 10,37,000 10,37,000

24. False Reason: Inventory Turnover Ratio measures how many times investment in inventory is turned to generate Revenue from Operations. 25. (d) To determine tax liability. 26. (d) Issue of shares for purchase of fixed assets. 27. (d) Capital Employed = Equity. 28. (d) Shareholders’ Funds. 29. (b) Current Liabilities. 30. Total Assets to Debt Ratio = Total Assets/Debt = ` 27,00,000/` 15,00,000 = 1.8 : 1

Total Assets = Shareholders’ Funds + Total Debts

= ` 7,50,000 + ` 19,50,000 = ` 27,00,000

Debt = Total Debts – Current Liabilities

= ` 19,50,000 – ` 4,50,000 = ` 15,00,000 Current Liabilities = Current Assets – Working Capital = ` 11,00,000 – ` 6,50,000 = ` 4,50,000.

M.45

Model Test Papers

Or Trade Receivables Turnover Ratio =

Credit Revenue from Operations Average Trade Receivables



` 1,80,000 Average Trade Receivables

4 =

Average Trade Receivables = ` 1,80,000/4 = ` 45,000 Average Trade Receivables Opening Trade Receivables + Closing Trade Receivables = 2 Let Opening Trade Receivables = x Closing Trade Receivables = 2x x + 2x ` 45,000 = 2 x + 2x = ` 90,000 or 3x = ` 90,000 x = ` 90,000/3 = ` 30,000 (Opening Trade Receivables) Closing Trade Receivables = ` 30,000 × 2 = ` 60,000. 31.

COMPARATIVE STATEMENT OF PROFIT AND LOSS for the years ended 31st March, 2019 and 2020

Particulars Note 31st March, 31st March, Absolute Change Percentage No. 2019 2020 (Increase/ Change (Increase/ Decrease) Decrease) ` ` ` % C   (A) (B) (C = B – A)  D = × 100 A I. Revenue from Operations 80,00,000 1,20,00,000 40,00,000 50.00 II. Other Incomes 16,00,000 14,40,000 (1,60,000) (10.00) III. Total Revenue (I + II) 96,00,000 1,34,40,000 38,40,000 40.00 IV. Expenses 48,00,000 84,00,000 36,00,000 75.00 V. Profit before Tax (III – IV) 48,00,000 50,40,000 2,40,000 5.00 VI. Less: Tax 24,00,000 25,20,000 1,20,000 5.00 VII. Profit after Tax (V – VI) 24,00,000 25,20,000 1,20,000 5.00

Or COMMON-SIZE BALANCE SHEET OF L.X. LTD. as at 31st March, 2018 and 2019 Particulars Note No.

Absolute Amounts

Percentage of Balance Sheet Total



31st March, 2018 (`)

31st March, 2019 (`)

31st March, 2018 (%)

I.

10,00,000 5,00,000 5,00,000

20,00,000 20,00,000 10,00,000

50 25 25

EQUITY AND LIABILITIES 1. Shareholders’ Funds 2. Non-Current Liabilities 3. Current Liabilities

Total II. ASSETS 1. Non-Current Assets 2. Current Assets

20,00,000 50,00,000

100

12,50,000 7,50,000

62.5 37.5

Total

20,00,000 50,00,000

30,00,000 20,00,000

100

31st March, 2019 (%) 40 40 20 100 60 40 100

M.46 32.

An Aid to Accountancy—CBSE XII Vikas Ltd. CASH FLOW STATEMENT for the year ended 31st March, 2020

Particulars `

`

I. Cash Flow from Operating Activities Net Profit for the year: Closing Balance of Surplus, i.e., Balance in Statement of Profit and Loss 7,50,000 Less: Opening Balance of Surplus, i.e., Balance in Statement of Profit and Loss 6,00,000 1,50,000 Add: Provision for Tax 95,000 Dividend* 1,50,000 Net Profit before Tax and Extraordinary Activities 3,95,000 Add: Non-Cash/Non-Operating Expenses: Depreciation 40,000 Goodwill Amortised 20,000 60,000 4,55,000 Less: Non-Operating Income (Gain (Profit) on Sale of Land and Building) 15,000 Operating Profit before Working Capital Changes 4,40,000 Less: Decrease in Current Liabilities and Increase in Current Assets: Trade Payables 10,000 Inventories 80,000 Trade Receivables 50,000 1,40,000 Cash Generated from Operating Activities 3,00,000 Less: Income Tax Paid 80,000 Cash Flow from Operating Activities 2,20,000 II. Cash Flow from Investing Activities Proceeds from Sale of Land and Building 1,65,000 Purchase of Non-current Investments (1,00,000) Cash Flow from Investing Activities 65,000 III. Cash Flow from Financing Activities Payments for Redemption of 10% Debentures (2,00,000) Proceeds from Bank Loan 1,00,000 Payment of Dividend (1,50,000) Cash Used in Financing Activities (2,50,000) IV. Net Increase in Cash and Cash Equivalents (I + II + III) 35,000 Add: Opening Cash and Cash Equivalents 3,40,000 V. Closing Cash and Cash Equivalents 3,75,000 * Proposed Dividend for the year ended 31st March, 2019 paid in the year ended 31st March, 2020. Working Notes: 1. It is assumed that 10% Debentures have been redeemed in the beginning of the year. Therefore, interest is not provided. 2. Dr.

LAND AND BUILDING ACCOUNT Cr.

Particulars ` Particulars ` To Balance b/d 8,00,000 By Bank A/c (Sale) (` 1,50,000 + ` 15,000) 1,65,000 To Gain (Profit) on Sale of Land and Building A/c 15,000 By Balance c/d 6,50,000 (Statement of Profit and Loss) 8,15,000 8,15,000

Model Test Paper 3 Time Allowed: 3 Hours

Max. Marks: 80

General Instructions: As per Model Test Paper 1

PART A ACCOUNTING FOR NOT-FOR-PROFIT ORGANISATIONS, PARTNERSHIP FIRMS AND COMPANIES 1. Raj and Ram are partners in a firm sharing profits in the ratio of 2 : 5. They admit Shyam as a partner who will get 1/6th share in the profits of the firm. What will be the new profit-sharing ratio among Raj, Ram and Shyam? (a) 10 : 25 : 7 (b) 7 : 25 : 10 (c) 25 : 10 : 7 (d) 10 : 7 : 25 (1) 2. Meera, Myra and Neera were partners sharing profits in the ratio of 2 : 2 : 1. They decided to share future profits in the ratio of 7 : 5 : 3 with effect from 1st April, 2019. Their Balance Sheet as on that date showed a balance of ` 45,000 in Advertisement Suspense Account. The amount to be debited respectively to the Capital Accounts of Meera, Myra and Neera for writing off the amount in Advertisement Suspense Account will be: (a) ` 18,000, ` 18,000 and ` 9,000. (b) ` 15,000, ` 15,000 and ` 15,000. (c) ` 21,000, ` 15,000 and ` 9,000. (d) ` 22,500, ` 22,500 and Nil. (CBSE 2020) (1) 3. When a partner draws a fixed sum at the end of each month, interest on total drawings will be equal to interest of _____________ at the agreed rate of interest. (a) 2.5 months (b) 5.5 months (c) 6.5 months (d) 6 months (1) 4. Aman, Manish and Karan are partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. Manish retired from the firm. Manish gave his share to Aman and Karan in the profit-sharing ratio of Aman and Karan. What is the gaining ratio? (a) 3 : 2. (b) 2 : 5. (c) 25 : 11. (d) 2 : 1. (1) 5. Mona and Tina were partners in a firm sharing profits in the ratio of 3 : 2. Naina was admitted with 1/6th share in the profits of the firm. At the time of admission, Workmen’s Compensation Reserve existed in the Balance Sheet of the firm at ` 32,000. The claim on account of workmen’s compensation was determined at ` 40,000. Excess of claim over the reserve will be: (a) Credited to Revaluation Account. (b) Debited to Revaluation Account. (c) Credited to old partner’s Capital Account. (d) Debited to old partner’s Capital Account. (1)

M.48

An Aid to Accountancy—CBSE XII

6. Subscribed Capital is (a) that part of authorised capital which is issued to the public for subscription. (b) that part of issued capital which has been actually subscribed by the public. (c) that part of subscribed capital which has been called-up on the shares. (d) that part of subscribed capital which has not yet been called-up on the shares. (CBSE 2020) (1) 7. Closing balance of _____________ represents either Surplus (if credit side exceeds debit side), or Deficit (if debit side exceeds credit side), which is transferred to Capital Fund. (a) Receipts and Payments Account

(b) Profit and Loss Account

(c) Income and Expenditure Account

(d) Revaluation Account

(1)

8. Debenture interest (a) is payable only in case of profits. (b) is accumulated in case of losses or inadequate profits. (c) is payable after the payment of preference dividend but before the payment of equity. (d) is payable whether the company has earned profit or not.

(1)

9. On which of the following grounds, a partner may apply to the court for dissolution of the firm? (a) Insanity of a partner (b) Persistent breach of agreement by a partner. (c) Misconduct of/by a partner (d) All of the above.

(1)

10. Akul and Bakul are partners sharing profits in the ratio of 3 : 2. They admit Chetan as a partner for 1/3rd share of the profits. At the time of admission of Chetan, Stock (Book value ` 50,000) is to be reduced by 40% and furniture (Book value ` 30,000) is to be reduced to 40%. Find the distribution of Gain/Loss on revaluation between Akul and Bakul. (a) Loss, Akul: ` 19,200, Bakul: ` 12,800.

(b) Gain, Akul: ` 19,200, Bakul: ` 12,000.

(c) Loss, Akul: ` 22,800, Bakul: ` 15,200.

(d) Gain, Akul: ` 15,200, Bakul: ` 22,800.



(1)

11. Which of the following will not be distributed among the partners in case of Reconstitution of Partnership? (a) General Reserve (b) Excess of Workmen Compensation Reserve over Workmen Compensation Liability (c) Excess of Investment Fluctuation Reserve over difference between book value and market value of investment (d) Employees’ Provident Fund

(1)

Model Test Papers

M.49

12. For which of the following situation, old profit-sharing ratio of partners is used at the time of retirement/death of a partner: (a) For distribution of Accumulated Profit/Loss among partners. (b) For writing off the existing goodwill appearing in the books of the firm. (c) Both (a) and (b). (d) For adjusting retiring/deceased partner’s share of goodwill in the capital accounts of gaining partners. (1) 13. Ashok and Sudha were partners in a firm sharing profits and losses in the ratio of 3 : 1. They admitted Bani as a new partner. Ashok sacrificed 1/4th of his share and Sudha sacrificed 1/4th of her share in favour of Bani. Bani’s share in the profits of the firm will be (a) 5/8. (b) 1/8. (c) 1/4. (d) 7/16. (CBSE 2020) (1) 14. From the following particulars relating to Ganesh Charitable Society, prepare Receipts and Payments Account for the year ending 31st March, 2020: Particulars

`

Opening Balance of Cash and Bank 20,000 Subscriptions received: 2018–19 25,000 2019–20 1,00,000 2020–21 15,000 1,40,000 Entrance Fees Received 45,000 Sale of Old Sports Material (Book Value ` 8,000) 5,000 Rent Paid 19,000 Donations Received for Construction of Building 1,00,000 Office Expenses Paid 23,000 Salaries 1,60,000 Legacy 50,000

Or Show how will be the following items dealt in preparing the Balance Sheet of King Club for the year ending on 31st March, 2020: Expenditure on Construction of Building ` 1,80,000. The construction work is in progress and has not yet completed. Opening Capital Fund ` 5,40,000 Opening Building Fund ` 2,40,000 Donation for Building received ` 3,00,000 (3) 15. Paliwal Exports Ltd. was formed with a capital of ` 80,00,000 divided into 8,00,000 equity shares of ` 10 each. Paliwal Exports Ltd. allotted 10,000 equity shares of ` 10 each as fully paid to the signatories to the Memorandum of Association for cash and 5,000 equity shares of ` 10 each as fully paid to the vendors against the purchase of building and offered 5,00,000 equity shares of ` 10 each (` 8 called-up). The issue was fully subscribed. All money were duly received with the following exceptions: Ashok, who was allotted 4,000 shares, has not paid after application money of ` 2 per share. Mahesh, who was allotted 1,000 shares, paid only ` 6 per share. 4,000 shares held by Ashok were forfeited after the first call. Show how the share capital will appear in the Balance Sheet of Paliwal Exports Ltd. (4)

M.50

An Aid to Accountancy—CBSE XII

16. Manika, Bhavi and Komal are partners sharing profits in the ratio of 6 : 4 : 1. Komal is guaranteed minimum profit of ` 2,00,000. The firm incurred a loss of ` 22,00,000 for the year ended 31st March, 2020. Pass necessary Journal entry regarding deficiency borne by Manika and Bhavi and prepare Profit and Loss Appropriation Account. Or The partners of a firm, Alia, Bhanu and Chand distributed profits for the year ended 31st March, 2020, ` 80,000 in the ratio of 3 : 3 : 2 without providing the following: (a) Alia and Chand were entitled to a salary of ` 1,500 each p.m. (b) Bhanu was entitled for a salary of ` 4,000 p.a. Pass the necessary Journal entry for the above adjustments in the books of the firm. Show workings clearly. (4) 17. Amrit and Baldev were partners in a firm sharing profits and losses equally. On 31st March, 2020, their firm was dissolved. On the date of dissolution, their Balance Sheet showed stock of ` 60,000 and creditors of ` 70,000. After transferring stock and creditors to Realisation Account, following transactions took place: (i) Amrit took 40% of total stock at 20% discount. (ii) 30% of total stock was taken by creditors of ` 20,000 in full settlement. (iii) Remaining stock was sold for cash at a profit of 25%. (iv) Remaining creditors were paid in cash at a discount of 10%. Pass necessary Journal entries for the above transactions in the books of the firm. (4) 18. Ram, Ghanshyam and Vrinda were partners in a firm sharing profits in the ratio of 4 : 3 : 1. The firm closes its books on 31st March every year. On 1st February, 2020, Ghanshyam died and it was decided that the new profit-sharing ratio between Ram and Vrinda will be equal. The Partnership Deed provided for the following on the death of a partner: (a) His share of goodwill be calculated on the basis of half of the profits credited to his account during the previous four completed years. The firm’s profit for the last four years was: 2015–16—` 1,20,000, 2016–17—` 80,000, 2017–18—` 40,000, and 2018–19—` 80,000. (b) His share of profit in the year of his death was to be computed on the basis of average profits of past two years. Pass necessary Journal entries relating to goodwill and profit to be transferred to Ghanshyam’s Capital Account. Also show your workings clearly. (4) 19. From the following Receipts and Payments Account and additional information of Modern Health Club, prepare Income and Expenditure Account for the year ended 31st March, 2020 and the Balance Sheet as at 31st March, 2020: Dr.

RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March, 2020

Cr.

Receipts ` Payments ` To Balance b/d 17,000 By Salaries 30,000 To Subscriptions 60,000 By Rent 18,300 To Donations 2,000 By Repairs 4,700 To Furniture (Book Value ` 6,000) 5,000 By Sports Equipments 16,000 To Life Membership Fees 7,000 By Building 30,000 To Interest on Investment (@ 5% for full year) 9,000 By Balance c/d 1,000 1,00,000 1,00,000

M.51

Model Test Papers

Additional Information:



Particulars

31st March, 2019 (`)

31st March, 2020 (`)

(i) Subscription received in advance

4,000

5,000

(ii) Outstanding Subscription

3,000

4,000

(iii) Sports Equipments

12,500

26,500



(6)

20. (a) Rama Ltd. took over the following assets and liabilities of Krishna Ltd. on 1st April, 2019: `

Land and Building

50,00,000



Furniture

10,00,000



Stock

5,00,000



Creditors

7,00,000

The purchase consideration of ` 60,00,000 was paid by issuing 12% Debentures of ` 100 each at a premium of 20%. Pass the necessary Journal entries for the above in the books of Rama Ltd.

(CBSE 2020)

(b) Aishwarya Ltd. issued 7,000, 10% Debentures of ` 1,000 each at a discount of 10%, redeemable at a premium of 5% after 4 years. According to the terms of issue, ` 300 was payable on application and balance on allotment of debentures.

Pass necessary entries for issue of 10% Debentures.

(3 + 3 = 6)

21. Lisa, Monika and Nisha were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. On 31st March, 2020, their Balance Sheet was as follows: BALANCE SHEET OF LISA, MONIKA AND NISHA as at 31st March, 2020 Liabilities ` Assets Trade Creditors 1,60,000 Land and Building Bills Payable 2,44,000 Machinery Employees’ Provident Fund 76,000 Stock Capitals: Sundry Debtors Lisa 14,00,000 Bank Monika 14,00,000 Nisha 3,60,000 31,60,000 36,40,000

` 10,00,000 12,00,000 10,00,000 4,00,000 40,000

36,40,000

On 31st March, 2020, Monika retired from the firm and the remaining partners decided to carry on the business. It was agreed that: (i) Land and building be appreciated by ` 2,40,000 and machinery be decreased by 10%. (ii) 50% of the stock was taken by the retiring partner at book value. (iii) Provision for doubtful debts was to be made at 5% on debtors.

M.52

An Aid to Accountancy—CBSE XII

(iv) Goodwill of the firm is valued at ` 3,00,000. (v) Amount due to Monika is to be transferred to her loan account. Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the reconstituted firm on Monika’s retirement. Or On 31st March, 2020, the Balance Sheet of Madan and Mohan who share profits and losses in the ratio of 3 : 2 was as follows: BALANCE SHEET OF MADAN AND MOHAN as at 31st March, 2020 Liabilities ` Assets

`

Creditors 28,000 Cash at Bank 10,000 General Reserve 10,000 Debtors 65,000 Employees’ Provident Fund 22,000 Less: Provision for Doubtful Debts 5,000 60,000 Capitals: Stock 33,000 Madan 60,000 Patents 57,000 Mohan 40,000 1,00,000 1,60,000 1,60,000

They decided to admit Gopal on 1st April, 2020 for 1/5th share which Gopal took from Mohan alone on the following terms: (i) Gopal shall bring ` 50,000 as his capital and ` 10,000 as his share of premium for Goodwill. (ii) A debtor whose dues of ` 3,000 were written off as bad debt paid ` 2,000 in full settlement. (iii) A claim of ` 5,000 on account of workmen’s compensation was to be provided for. (iv) Patents were undervalued by ` 2,000. Stock in the books was valued 10% more than its market value. Pass the necessary Journal entries in the books of the firm and prepare Revaluation Account and Partners’ Capital Accounts. (8) 22. The Fancy Co. Ltd. invited applications for allotting 1,00,000 equity shares of ` 10 each. The shares were issued at a premium of 60%. The amount was payable as follows:

On Application and Allotment

—

` 6 per share (including premium ` 4)



On First and Final Call

—

Balance including premium

Applications for 1,90,000 shares were received. The allotment was made as follows:

Category A — Applications for 10,000 shares were rejected.



Category B — Applications for 1,00,000 shares were allotted 50,000 shares.



Category C — Applications for 80,000 shares were allotted 50,000 shares.

Excess money received on application and allotment was adjusted towards sums due on first and final call. Ali, who belonged to Category B, and had applied for 1,000 shares, paid the entire amount of his share money with application.

M.53

Model Test Papers

Bali, who belonged to Category C, was allotted 1,000 shares, failed to pay the first and final call money. His shares were forfeited and reissued at ` 15 per share fully paid-up. Pass necessary Journal entries for the above transactions in the books of Fancy Co. Ltd. Or ‘Shagoon India Ltd.’ was registered with an authorised capital of ` 50,00,000 divided into 5,00,000 equity shares of ` 10 each. 70,000 of these shares were issued as fully paid to ‘M/s. Star Ltd.’ for building purchased from them. 2,00,000 shares were issued to public for subscription and the amounts were payable as follows:

On Application

—

` 3 per share



On Allotment

—

` 2 per share



On First Call

—

` 2 per share



On Second and Final Call

—

` 3 per share

The amounts received on these shares were as follows:

On 1,00,000 shares

—

Full amount called



On 60,000 shares

—

` 7 per share



On 30,000 shares

—

` 5 per share



On 10,000 shares

—

` 3 per share

The directors forfeited 10,000 shares on which only ` 3 per share were received. These shares were reissued at ` 12 per share fully paid. Pass necessary Journal entries for the above transactions in the books of Shagoon India Ltd. (8)

PART B ANALYSIS OF FINANCIAL STATEMENTS 23. Name the difference between Gross Profit and Operating Expenses: (a) Revenue from Operations (b) Operating Profit (c) Operating Cost (d) Net Profit before Interest and Tax

(1)

24. Identify out of the following transactions that will decrease both Current Ratio and Quick Ratio: (a) Sale of Stock-in-Trade at loss. (b) Purchase of Stock-in-Trade on credit. (c) Sale of Non-current Asset for cash. (d) Cash payment of a Non-current Liability.

(1)

25. State whether the following statement is true or false: ‘Prepaid expenses and closing debtors are not considered while calculating the quick assets’. (CBSE 2020) (1)

M.54

An Aid to Accountancy—CBSE XII

26. An example of an activity which is classified as Financing Activity in case of all enterprises is

(a) Payment of Interest on Borrowings.

(c) Payment of Salaries to Employees.

(b) Purchase of Goodwill. (d) Payment of Dividend on Shares. (1)

27. _________ are activities that result in change in the size and composition of the owners’ capital and borrowing of the enterprise.

(a) Operating Activities

(b) Financing Activities

(c) Investing Activities

(d) Extra-ordinary Activities

(1)

28. One of the objective of ‘Financial Statement Analysis’ is to identify the reasons for change in the financial position of the enterprise. State one more objective of this analysis. (1) 29. _________ is a comparison of financial statements of an enterprise for two or more accounting periods.

(a) Intra-firm Analysis.

(b) Inter-firm Analysis.

(c) Time Series Analysis.

(d) (a) and (c). (1)

30. In a company, rate of Gross Profit on cost is 20%. Its Gross Profit is ` 4,00,000. Current Liabilities are 50% of the Current Assets, and Current Assets are ` 12,00,000. Calculate the Working Capital Turnover Ratio. (CBSE 2020) Or Net profit after interest and tax of M Ltd. was ` 1,00,000. Its Current Assets were ` 4,00,000 and Current Liabilities were ` 2,00,000. Tax rate was 50%. Its Total Assets were ` 10,00,000 and 10% Long-term Debt was ` 4,00,000. Calculate Return on Investment.

(3)

31. How are the following items shown while preparing the Balance Sheet of a company: (i) Computer Software;

(ii) Prepaid Expenses;

(iii) Stores and Spares;

(iv) Capital Work-in-Progress? Or

Following information was extracted from the Statement of Profit and Loss for the years ended 31st March, 2019 and 2020. Prepare Comparative Statement of Profit and Loss: Particulars Revenue from Operations Employees Benefit Expenses Other Expenses Tax Rate

31.3.2020 (`)

31.3.2019 (`)

10,00,000 5,00,000 50,000 50%

8,00,000 4,00,000 1,00,000 50%

(4)

M.55

Model Test Papers

32. (i) From the following information of Nova Ltd., calculate Cash Flow from Investing Activities: Particulars

31st March, 31st March, 2019 (`) 2018 (`)

Machinery (At cost)

5,00,000

3,00,000

Accumulated Depreciation on Machinery

1,00,000

80,000

Goodwill

1,50,000

Land

1,00,000

70,000 1,00,000

Additional Information: During the year, a machine costing ` 50,000 on which the accumulated depreciation was ` 35,000, was sold for ` 12,000.

(ii) The profit of Jova Ltd. for the year ended 31st March, 2019 after appropriation was ` 2,50,000.

Additional Information: Particulars

`

Depreciation of Machinery

20,000

Goodwill written off

9,000

Loss on Sale of Furniture

2,000

Transfer to General Reserve

22,500

The following was the position of its Current Assets and Current Liabilities as at 31st March, 2018 and 2019. Particulars Income Received in Advance Inventory

Calculate the Cash Flow from Operating Activities.

31st March, 31st March, 2018 (`) 2019 (`) 8,000 12,000

... 8,000

(CBSE 2020) (3 + 3 = 6)

M.56

An Aid to Accountancy—CBSE XII

Answers PART A 1. (a) 10 : 25 : 7.

Working Note:



Let the profit = 1



Shyam’s share = 1/6



Remaining share = 1– 1/6 = 5/6



Raj’s New Profit Share = 5/6 × 2/7 = 10/42



Ram’s New Profit Share = 5/6 × 5/7 = 25/42



Shyam’s share = 1/6 or 7/42 New Profit-sharing Ratio = 10/42 : 25/42 : 1/6 or 10 : 25 : 7.

2. (a) ` 18,000, ` 18,000 and ` 9,000. Note: Advertisement Suspense Account balance of ` 45,000 is a fictitious asset and is debited to partners’ capitals in their old profit-sharing ratio.

3. (b) 5.5 months. 4. (d) 2 : 1. 5. (b) Debited to Revaluation Account. 6. (b) That part of issued capital which has been subscribed by the public. 7. (c) Income and Expenditure Account. 8. (d) is payable whether the company has earned profit or not. 9. (d) All of the above. 10. (c) Loss, Akul: ` 22,800, Bakul: ` 15,200.

Working Note:



Loss on Revaluation = ` 20,000 (` 50,000 × 40/100) + ` 18,000 (` 30,000 × 60/100)

= ` 38,000

Akul’s Share = ` 38,000 × 3/5 = ` 22,800



Bakul’s Share = ` 38,000 × 2/5 = ` 15,200.

11. (d) Employees’ Provident Fund. Reason: Employees’ Provident Fund is a liability towards employees and is not an accumulated profit, hence it is not distributed among the partners.

12. (c) Both (a) and (b). 13. (c) 1/4.

Working Note:



Ashok’s Sacrifice = 3/4 × 1/4 = 3/16



Sudha’s Sacrifice = 1/4 × 1/4 = 1/16



Bani’s share = 3/16 + 1/16 = 4/16 or 1/4.

M.57

Model Test Papers

14. Dr.

Ganesh Charitable Society RECEIPTS AND PAYMENTS ACCOUNTS for the year ended 31st March, 2020

Cr.

Particulars ` Particulars ` To Balance b/d 20,000 By Rent 19,000 To Subscriptions received: By Office Expenses 23,000 2018–19 25,000 By Salaries 1,60,000 2019–20 1,00,000 By Balance c/d (Balancing Figure) 1,58,000 2020–21 15,000 1,40,000 To Entrance Fees 45,000 To Sale of Old Sports Materials (Book value ` 8,000) 5,000 To Donations for Construction of Building 1,00,000 To Legacy 50,000 3,60,000 3,60,000

Or AN EXTRACT OF BALANCE SHEET OF KING CLUB as at 31st March, 2020 Liabilities ` Assets Capital Fund Opening Balance 5,40,000 Add: Transfer from Building Fund 1,80,000 7,20,000 Building Fund Opening Balance 2,40,000 Add: Donations 3,00,000 5,40,000 Less: Transfer to Capital Fund 1,80,000 3,60,000

15.

Building-in-Progress 1,80,000

Paliwal Exports Ltd. BALANCE SHEET (AN EXTRACT) as at ...

Particulars I. EQUITY AND LIABILITIES Shareholders’ Funds Share Capital

`

Note No.

1

`

41,24,000

Note to Accounts Particulars ` 1. Share Capital Authorised Capital 8,00,000 Equity Shares of ` 10 each Issued Capital 5,15,000 Equity Shares of ` 10 each Subscribed Capital Subscribed and Fully Paid-up 15,000 Equity Shares of ` 10 each (5,000 allotted as fully paid to Vendor against purchase of building) Subscribed but not Fully Paid-up 4,96,000 Equity Shares of ` 10 each, ` 8 per share paid-up 39,68,000 Add: Forfeited Shares (4,000 × ` 2) 8,000 39,76,000 Less: Calls-in-Arrears: (1,000 × ` 2) 2,000

`

80,00,000 51,50,000

1,50,000

39,74,000 41,24,000

M.58

An Aid to Accountancy—CBSE XII

16.

JOURNAL

Date Particulars

L.F.

Dr. (`)

Cr. (`)

2020 March 31 Manika’s Capital A/c

...Dr.

2,40,000

Bhavi’s Capital A/c

...Dr.

1,60,000



To Komal’s Capital A/c

4,00,000

(Deficiency of Komal met by Manika and Bhavi) (WN)

PROFIT AND LOSS APPROPRIATION ACCOUNT

Dr.

for the year ended 31st March, 2020

Cr.

Particulars ` Particulars ` To Net Loss (Profit and Loss A/c) 22,00,000

By Loss transferred to:



Manika’s Capital A/c

12,00,000



Bhavi’s Capital A/c

8,00,000



Komal’s Capital A/c

2,00,000

22,00,000 22,00,000 Working Note:

Loss of the firm = ` 22,00,000 Komal’s share of loss = ` 22,00,000 × 1/11 = ` 2,00,000



Guaranteed minimum profit = ` 2,00,000

Therefore, Komal’s Capital Account is to be credited by the amount of deficiency ` 4,00,000 (i.e., ` 2,00,000: Share of Loss + ` 2,00,000 : Guaranteed Profit) which will be borne by Manika and Bhavi in their profit-sharing ratio, i.e., 6 : 4 or 3 : 2.

Or TABLE SHOWING ADJUSTMENT TO BE MADE Particulars

Alia (`)

Bhanu (`)

Chand (`)

Total (`)

Salary not yet credited

...Cr.

18,000

4,000

18,000

40,000

Decrease in profits due to salary not paid

...Dr.

15,000

15,000

10,000

40,000

3,000 (Cr.) 11,000 (Dr.)

8,000 (Cr.)

distributed (3 : 3 : 2) Net Effect





...

JOURNAL

Date Particulars

L.F.

Dr. (`)

Cr. (`)

2020 March 31 Bhanu’s Capital A/c

...Dr.

11,000



To Alia’s Capital A/c

3,000



To Chand’s Capital A/c

8,000

(Salary, profit share incorrectly distributed, now adjusted)

M.59

Model Test Papers

17.

JOURNAL

Date Particulars

L.F.

Dr. (`)

2019 Mar. 31 (i) Amrit’s Capital A/c ...Dr. 19,200 To Realisation A/c (40% of the total stock taken by Ravi at 20% discount)

Cr. (`)

19,200

(ii) No entry (Note) (iii) Cash A/c ...Dr. 22,500 To Realisation A/c (Stock sold for cash)

22,500

(iv) Realisation A/c ...Dr. 45,000 To Cash A/c (Creditors paid in cash at a discount of 10%)

45,000

Note: If an asset (whether recorded or unrecorded) is given in payment of a liability (whether recorded or unrecorded), then entry is not passed for such transaction.

18.

JOURNAL

Date Particulars

L.F.

Dr. (`)

2020 Feb. 1 Vrinda’s Capital A/c ...Dr. 60,000 To Ghanshyam’s Capital A/c (Ghanshyam’s share of goodwill adjusted by debiting gaining partner (Vrinda) and crediting deceased partner (Ghanshyam)) Vrinda’s Capital A/c ...Dr. 18,750 To Ghanshyam’s Capital A/c (Ghanshyam’s share of profit till the date of death adjusted by debiting gaining partner (Vrinda))

Cr. (`)

60,000

18,750

Working Notes: 1. Calculation of Ghanshyam’s Share of Goodwill: Total profit of last four years = ` 1,20,000 + ` 80,000 + ` 40,000 + ` 80,000 = ` 3,20,000 Ghanshyam’s share in last four years’ profit = ` 3,20,000 × 3/8 = ` 1,20,000 Ghanshyam’s share of Goodwill = ` 1,20,000 × 1/2 = ` 60,000. 2. Calculation of gaining ratio: Gain of a partner = New share – Old share Ram’s Gain = 1/2 – 4/8 = Nil 4 –1 3  Vrinda’s Gain = 1/2 – 1/8 = 8 8 Hence, Vrinda is only gaining partner. 3. Calculation of Ghanshyam’s share of profit till the date of death: ` 40,000 + ` 80,000 Average profit of past two years = = ` 60,000 2 Profit for 10 months (from 1st April, 2019 to 1st February, 2020) =` 60,000 × 10/12 = ` 50,000 Ghanshyam’s share of profit = ` 50,000 × 3/8 = ` 18,750. Due to change of profit-sharing ratio in the new firm, Ghanshyam’s share of profit will be adjusted through Vrinda’s Capital Account (gaining partner) not through Profit and Loss Suspense A/c.

M.60 19. Dr.

An Aid to Accountancy—CBSE XII Modern Health Club INCOME AND EXPENDITURE ACCOUNT for the year ended 31st March, 2020

Cr.

Expenditure ` Income To Depreciation on Sports Equipments 2,000 By Subscriptions 60,000 (` 12,500 + ` 16,000 – ` 26,500) Add: Advance for Current Year 4,000 To Loss on Sale of Furniture (` 6,000 – ` 5,000) 1,000 Less: Advance for Next Year (5,000) To Salaries 30,000 Outstanding for last year (3,000) To Rent 18,300 Add: Outstanding for current year 4,000 Tor Repairs 4,700 By Donations To Surplus, i.e., Excess of Income over Expenditure 15,000 By Interest on Investments 71,000



`

60,000 2,000 9,000 71,000

BALANCE SHEET as at 31st March, 2020

Liabilities ` Assets Subscriptions Received in Advance 5,000 Cash Capital Fund (WN) 2,14,500 5% Investments Add: Life Membership Fees 7,000 Outstanding Subscriptions Surplus 15,000 2,36,500 Sports Equipments Building 2,41,500

` 1,000 1,80,000 4,000 26,500 30,000 2,41,500

Working Note:



BALANCE SHEET as at 31st March, 2019

Liabilities ` Assets Subscriptions Received in Advance 4,000 Cash Capital Fund (Balancing Figure) 2,14,500 5% Investments* Outstanding Subscriptions Sports Equipments Furniture 2,18,500

` 17,000 1,80,000 3,000 12,500 6,000 2,18,500

* Interest Received @ 5% for full year = ` 9,000 Value of 5% Investments = ` 9,000 × 100/5 = ` 1,80,000.

20. (a)

JOURNAL OF RAMA LTD.

Date Particulars

L.F.

Dr. (`)

Cr. (`)

2019 April 1 Land and Building ...Dr. 50,00,000 Furniture A/c ...Dr. 10,00,000 Stock A/c ...Dr. 5,00,000 Goodwill A/c (Balancing Figure) ...Dr. 2,00,000 To Sundry Creditors To Krishna Ltd. (Assets and Liabilities taken over) Krishna Ltd. ...Dr. 60,00,000 To 12% Debentures A/c To Securities Premium Reserve A/c (50,000, 12% Debentures of ` 100 each issued at a premium of ` 20)

7,00,000 60,00,000

50,00,000 10,00,000

M.61

Model Test Papers

(b)

JOURNAL

Date Particulars

L.F.

Dr. (`)

Bank A/c ...Dr. 21,00,000 To Debentures Application A/c (Application money received on 7,000, 10% Debentures @ ` 300 each) Debentures Application A/c ...Dr. 21,00,000 To 10% Debentures A/c (Application money adjusted) Debentures Allotment A/c ...Dr. 42,00,000 Loss on Issue of Debentures A/c ...Dr. 10,50,000 To 10% Debentures A/c To Premium on Redemption of Debentures A/c (Allotment money due on 7,000; 10% Debentures) Bank A/c ...Dr. 42,00,000 To Debentures Allotment A/c (Allotment money duly received)

Cr. (`) 21,00,000

21,00,000

49,00,000 3,50,000

42,00,000

21. Dr.

REVALUATION ACCOUNT Cr.

Particulars ` Particulars ` To Machinery A/c (10% of ` 12,00,000) 1,20,000 By Land and Building A/c 2,40,000 To Provision for Doubtful Debts A/c 20,000 (5% of ` 4,00,000) To Gain (Profit) transferred to: Lisa’s Capital A/c 40,000 Monika’s Capital A/c 40,000 Nisha’s Capital A/c 20,000 1,00,000 2,40,000 2,40,000 Dr. Particulars

Cr.

PARTNERS’ CAPITAL ACCOUNTS Lisa (`) Monika (`) Nisha (`)

Particulars

Lisa (`) Monika (`) Nisha (`)

To Stock A/c ... 5,00,000 ... By Balance b/d 14,00,000 14,00,000 3,60,000 To Monika’s Capital A/c (WN) 80,000 ... 40,000 By Revaluation A/c 40,000 40,000 20,000 To Monika’s Loan A/c ... 10,60,000 ... By Lisa’s Capital A/c (WN) ... 80,000 ... To Balance c/d 13,60,000 ... 3,40,000 By Nisha’s Capital A/c (WN) ... 40,000 ... 14,40,000 15,60,000 3,80,000 14,40,000 15,60,000 3,80,000 BALANCE SHEET OF THE RECONSTITUTED FIRM as at 31st March, 2020 Liabilities ` Assets

`

Trade Creditors 1,60,000 Land and Building 12,40,000 Bills Payable 2,44,000 Machinery 10,80,000 Employees’ Provident Fund 76,000 Stock 5,00,000 Monika’s Loan 10,60,000 Sundry Debtors 4,00,000 Capitals: Less: Provision for Doubtful Debts 20,000 3,80,000 Lisa 13,60,000 Bank 40,000 Nisha 3,40,000 17,00,000 32,40,000 32,40,000

M.62

An Aid to Accountancy—CBSE XII

Working Note: Unless agreed otherwise, gaining ratio of continuing partners is same as their old profit-sharing ratio. Monika’s Share of Goodwill = 2/5 of ` 3,00,000 = ` 1,20,000, which is contributed by Lisa and Nisha in their gaining ratio, i.e., 2 : 1.

Or JOURNAL Date Particulars

L.F.

Dr. (`)

Cr. (`)

2020 April 1 General Reserve A/c ...Dr. 10,000 To Madan’s Capital A/c To Mohan’s Capital A/c (General Reserve distributed between old partners in their old profit-sharing ratio)

6,000 4,000

Cash/Bank A/c ...Dr. 2,000 To Revaluation A/c (Bad debts recovered)

2,000

Revaluation A/c ...Dr. 5,000 To Workmen Compensation Claim A/c (Workmen Compensation claim provided)

5,000

Patents A/c ...Dr. 2,000 To Revaluation A/c (Patents undervalued , now recorded)

2,000

Revaluation A/c ...Dr. 3,000 To Stock A/c (Stock overvalued by 10% recorded)

3,000

Revaluation A/c ...Dr. 4,000 To Madan’s Capital A/c To Mohan’s Capital A/c (Loss on revaluation distributed among partners in their old-profit sharing ratio)

2,400 1,600

Bank A/c ...Dr. 60,000 To Gopal’s Capital A/c To Premium for Goodwill A/c (Capital and premium for goodwill brought in cash)

50,000 10,000

Premium for Goodwill A/c ...Dr. 10,000 To Mohan’s Capital A/c (Premium for goodwill credited to Mohan’s Capital Account) (WN)

10,000

Dr.

REVALUATION ACCOUNT Cr.

Particulars ` Particulars ` To Workmen Compensation Claim A/c 5,000 By Cash/Bank A/c (Bad Debts Recovered) To Stock A/c 3,000 By Patents A/c By Loss transferred to: Madan’s Capital A/c 2,400 Mohan’s Capital A/c 1,600 8,000

2,000 2,000

4,000 8,000

M.63

Model Test Papers Dr. Particulars

Cr.

PARTNERS’ CAPITAL ACCOUNTS Madan Mohan Gopal Particulars ` ` `

To Revaluation A/c (Loss) 2,400 1,600 ... By Balance b/d To Balance c/d 63,600 52,400 50,000 By General Reserve A/c By Premium for Goodwill A/c (WN) By Bank A/c 66,000 54,000 50,000

Madan Mohan Gopal ` ` ` 60,000 40,000 ... 6,000 4,000 ... ... 10,000 ... ... ... 50,000 66,000 54,000 50,000

Working Note: As only Mohan has sacrificed, he will be entitled to the entire share of premium for goodwill brought by Gopal.

22.

JOURNAL OF FANCY CO. LTD.

Date Particulars

L.F.

Dr. (`)

Bank A/c (1,89,000 × ` 6) + (1,000 × ` 16) ...Dr. 11,50,000 To Equity Shares Application and Allotment A/c (Application money received) Equity Shares Application and Allotment A/c ...Dr. 11,50,000 To Equity Share Capital A/c (1,00,000 × ` 2) To Securities Premium Reserve A/c (1,00,000 × ` 4) To Calls-in-Advance A/c (WN 1) To Bank A/c (WN 2) (Application money transferred to Share Capital, Securities Premium Reserve, calls and the balance refunded) Equity Shares First and Final Call A/c ...Dr. 10,00,000 To Equity Share Capital A/c To Securities Premium Reserve A/c (First call money due) Bank A/c ...Dr. 5,11,600 Calls-in-Arrears A/c ...Dr. 6,400 Calls-in-Advance A/c ...Dr. 4,82,000 To Equity Shares First and Final Call A/c (First and final call money received except on 1,000 shares) Or Bank A/c ...Dr. 5,11,600 Calls-in-Advance A/c ...Dr. 4,82,000 To Equity Shares First and Final Call A/c (First and final call money received except on 1,000 shares) Equity Share Capital A/c ...Dr. 10,000 Securities Premium Reserve A/c ...Dr. 2,000 To Forfeited Shares A/c To Calls-in-Arrears A/c/Equity Shares First and Final Call A/c (Bali’s share forfeited for non-payment of first and final call)

Cr. (`) 11,50,000

2,00,000 4,00,000 4,82,000 68,000

8,00,000 2,00,000

10,00,000

9,93,600

5,600 6,400

Bank A/c ...Dr. 15,000 To Equity Share Capital A/c To Securities Premium Reserve A/c (Bali’s share reissued for ` 15 per share fully paid)

10,000 5,000

Forfeited Shares A/c ...Dr. 5,600 To Capital Reserve A/c (Balance in Forfeited Shares Account transferred to Capital Reserve)

5,600

M.64

An Aid to Accountancy—CBSE XII

Working Notes: 1. Calculation of Calls-in-Advance:

`

Category B—99,000 (Except Ali) × ` 6

5,94,000

Less: Required on application (49,500 × ` 6)

2,97,000

Calls-in-Advance

2,97,000

Category C—80,000 × ` 6

4,80,000

Less: Required on application (50,000 × ` 6)

3,00,000

Calls-in-Advance

1,80,000

From Ali: Application money received (1,000 × ` 16)

(i)

(ii)

16,000

Less: Application money required (500 × ` 6)

3,000



13,000

Less: Calls-in-Advance (500 × ` 10)

5,000

Refund of surplus application money

8,000

(iii)

Total Calls-in-Advance [(i) + (ii) + (iii)]= ` 2,97,000 + ` 1,80,000 + ` 5,000 = ` 4,82,000. 2. Excess application money refunded = ` 60,000 (i.e., 10,000 × ` 6) + ` 8,000 (WN 1) = ` 68,000. 3. As shares have been reissued at a premium, loss on reissue is Nil. So, profit on reissue is ` 5,600, transferred to Capital Reserve.

Or JOURNAL OF SHAGOON INDIA LTD. Date Particulars

L.F.

Dr. (`)

Building A/c ...Dr. 7,00,000 To M/s Star Ltd. (Building purchased from M/s Star Ltd.) M/s Star Ltd. ...Dr. 7,00,000 To Equity Share Capital A/c (70,000 shares issued as fully paid to Star Ltd. against purchase price) Bank A/c ...Dr. 6,00,000 To Equity Shares Application A/c (Application money received for 2,00,000 shares) Equity Shares Application A/c ...Dr. 6,00,000 To Equity Share Capital A/c (Application money transferred to Equity Share Capital Account) Equity Shares Allotment A/c ...Dr. 4,00,000 To Equity Share Capital A/c (Allotment money due on 2,00,000 shares) Bank A/c ...Dr. 3,80,000 To Equity Shares Allotment A/c (Allotment money received except on 10,000 shares) Or Bank A/c ...Dr. 3,80,000 Calls-in-Arrears A/c ...Dr. 20,000 To Equity Shares Allotment A/c (Allotment money received except on 10,000 shares) Equity Shares First Call A/c ...Dr. 4,00,000 To Equity Share Capital A/c (First call money due on 2,00,000 shares)

Cr. (`) 7,00,000

7,00,000

6,00,000

6,00,000

4,00,000

3,80,000

4,00,000

4,00,000

M.65

Model Test Papers Bank A/c ...Dr. 3,20,000 To Equity Shares First Call A/c (First call money received except on 40,000 shares) Or Bank A/c ...Dr. 3,20,000 Calls-in-Arrears A/c ...Dr. 80,000 To Equity Shares First Call A/c (First call money received except on 40,000 shares)

3,20,000

4,00,000

Equity Shares Second and Final Call A/c ...Dr. 6,00,000 To Equity Share Capital A/c (Second and final call money due on 2,00,000 shares)

6,00,000

Bank A/c ...Dr. 3,00,000 To Equity Share Second and Final Call A/c (Second and final call money received except on 1,00,000 shares) Or Bank A/c ...Dr. 3,00,000 Calls-in-Arrears A/c ...Dr. 3,00,000 To Equity Share Second and Final Call A/c (Second and final call money received except on 1,00,000 shares)

3,00,000

6,00,000

Equity Share Capital A/c ...Dr. 1,00,000 To Forfeited Shares A/c To Equity Shares Allotment A/c To Equity Shares First Call A/c To Equity Shares Second and Final Call A/c (10,000 shares forfeited for non-payment of allotment and call monies) Or Equity Share Capital A/c ...Dr. 1,00,000 To Forfeited Shares A/c To Calls-in-Arrears A/c (10,000 shares forfeited for non-payment of allotment and call monies)

30,000 20,000 20,000 30,000

30,000 70,000

Bank A/c ...Dr. 1,20,000 To Equity Share Capital A/c To Securities Premium Reserve A/c (Shares reissued for ` 12 per share as fully paid)

1,00,000 20,000

Forfeited Shares A/c ...Dr. 30,000 To Capital Reserve A/c (Balance in Forfeited Shares Account transferred to Capital Reserve)

30,000

Working Note:

TABLE SHOWING MONEY RECEIVED AND NOT RECEIVED

Shares

Application ` 3

Allotment ` 2

First Call ` 2

1,00,000









60,000









30,000









Second and Final Call `3

10,000









Money Received

2,00,000 × ` 3 = ` 6,00,000

1,90,000 × ` 2 = ` 3,80,000

1,60,000 × ` 2 = ` 3,20,000

1,00,000 × ` 3 = ` 3,00,000

10,000 × ` 2 = ` 20,000

40,000 × ` 2 = ` 80,000

1,00,000 × ` 3 = ` 3,00,000

Money Not ... Received  – Money Received,  – Money Not Received.

M.66

An Aid to Accountancy—CBSE XII

PART B 23. (b) Operating Profit. 24. (d) Cash payment of a Non-current Liability. 25. False. Prepaid expenses are not considered whereas debtors are considered while calculating the quick asset. 26. (d) Payment of dividend on shares. 27. (b) Financing Activities. 28. Any of the following two objectives: (i) Assessing the earning capacity or profitability of the firm as a whole as well as its different departments so as to judge the financial health of the firm. (ii) Assessing the operating efficiency with which resources are utilised in generating revenue. 29. (d) a and c. 30. Working Capital Turnover Ratio = Revenue from Operations/Working Capital = ` 24,00,000/` 6,00,000 = 4 Times. Cost of Revenue from Operations = Gross Profit/Gross Profit Ratio = ` 4,00,000 × 100/20 = ` 20,00,000 Revenue from Operations = Cost of Revenue from Operations + Gross Profit = ` 20,00,000 + ` 4,00,000 = ` 24,00,000 Working Capital = Current Assets – Current Liabilities = ` 12,00,000 – ` 6,00,000 = ` 6,00,000 Or

Return on Investment =

=

Net Profit before Interest and Tax  100 Capital Employed ` 2,40,000  100  30%. ` 8,00,000

Net Profit before Interest and Tax = ` 1,00,000 + ` 1,00,000 + ` 40,000 = ` 2,40,000 Capital Employed = Total Assets – Current Liabilities = ` 10,00,000 – ` 2,00,000 = ` 8,00,000 31. S. No.

Items

Main Head

Sub-head

(i )

Computer Software

Non-current Assets

Fixed Assets—Intangible Assets

(ii)

Prepaid Expenses

Current Assets

Other Current Assets

(iii )

Stores and Spares

Current Assets

Inventories

(iv)

Capital Work-in-Progress

Non-Current Assets

Fixed Assets—Capital Work-in- Progress

M.67

Model Test Papers

Or COMPARATIVE STATEMENT OF PROFIT AND LOSS for the years ended 31st March, 2019 and 2020 Particulars

Note No. 31st March, 31st March,



2019 (`)

I. Revenue from Operations

2020 (`)

Absolute

Percentage

Change (Increase/ Change (Increase/

Decrease) (`)

Decrease) (%)

8,00,000

10,00,000

2,00,000

25

4,00,000

5,00,000

1,00,000

25

(b) Other Expenses

1,00,000

50,000

(50,000)

(50)

Total Expenses

5,00,000 5,50,000

50,000

10

III. Net Profit before Tax (I – II)

3,00,000 4,50,000

1,50,000

50

IV. Less: Tax @ 50%

1,50,000

V. Net Profit after Tax (III – IV)

1,50,000 2,25,000

II. Expenses:

(a) Employees Benefit Expenses

32. (i)

2,25,000

75,000

50

75,000

50

Nova Ltd. CALCULATION OF CASH FLOW FROM INVESTING ACTIVITIES

Particulars ` Purchase of Machinery

(2,50,000)

Purchase of Goodwill

(50,000)

Sale of Machinery

12,000

Sale of Land

30,000

Cash Used in Investing Activities

(2,58,000)

Working Note: 1. Dr.



Cr.

MACHINERY ACCOUNT

Particulars ` Particulars ` To Balance b/d 3,00,000 By Bank A/c (Sale)

12,000

To Bank A/c (Purchase)—Balancing Figure

2,50,000

By Accumulated Depreciation A/c

35,000



By Statement of Profit and Loss

3,000



(Loss on Sale: ` 50,000 – ` 12,000 – ` 35,000)

By Balance c/d 5,00,000 5,50,000 5,50,000 2. Dr.



Cr.

ACCUMULATED DEPRECIATION ACCOUNT

Particulars ` Particulars ` To Machinery A/c

35,000

To Balance c/d

1,00,000

By Balance b/d 80,000 By Depreciation A/c



55,000

(Statement of Profit and Loss)—Bal. Fig.

1,35,000 1,35,000

M.68 (ii)

An Aid to Accountancy—CBSE XII

CALCULATION OF CASH FLOW FROM OPERATING ACTIVITIES

Particulars ` Net profit before tax (WN)

2,72,500

Adjustments for Non-cash and Non-operating Items: Add: Depreciation 20,000

Goodwill written off

9,000



Loss on Sale of Furniture

2,000

Operating Profit before Working Capital Changes Add: Decrease in Inventory

3,03,500 4,000

Less: Decrease in Advance Income

(8,000)

(4,000)

Net Cash generated from Operating Activities 2,99,500 Working Note: Calculation of Net Profit before Tax: Net Profit Add: Transfer to General Reserve

` 2,50,000 22,500 2,72,500

Model Test Paper 4 Time Allowed: 3 Hours

Max. Marks: 80

General Instructions: As per Model Test Paper 1

PART A ACCOUNTING FOR NOT-FOR-PROFIT ORGANISATIONS, PARTNERSHIP FIRMS AND COMPANIES 1. In the absence of any provision in the partnership agreement, profits and losses are shared by partners (a) in the ratio of capitals. (b) equally. (c) in the ratio of loans given by them to the partnership firm. (d) None of the above.

(1)

2. Fluctuating capital account is credited with (a) profit for the year.

(b) interest on Capital.

(c) salaries of the partner.

(d) All of the above.

(1)

3. Profits of last three years were ` 42,000, ` 39,000 and ` 45,000. Find the value of firm’s goodwill on the basis of two years’ purchase of the average profit for the last three years. (a) ` 1,26,000

(b) ` 42,000

(c) ` 36,000

(d) ` 84,000

(1)

4. In the absence of an agreement, it is presumed that the new partner gets his share in profits from the old partners in their _____________ (a) Old Profit-sharing Ratio.

(b) Gaining Ratio.

(c) New Profit-sharing Ratio.

(d) Sacrificing Ratio.

(1)

5. Omega Ltd. forfeited 2,000 shares of ` 10 each held by Mohan for non-payment of allotment money of ` 3 per share. The called-up value per share was ` 8. On forfeiture, the amount debited to share capital will be (a) ` 6,000.

(b) ` 20,000.

(c) ` 10,000.

(d) ` 16,000.

(1)

6. At the time of admission of a new partner in the firm, the new partner compensates the old partners for their loss of share in the super profits of the firm for which he brings in an additional amount which is known as _____________. (CBSE 2020) (1)

M.70

An Aid to Accountancy—CBSE XII

7. Pragya Ltd. forfeited 8,000 equity shares of ` 100 each issued at a premium of 10% for non-payment of first and final call of ` 30 per share. The maximum amount of discount at which these shares can be reissued will be (a) ` 80,000.

(b) ` 3,20,000.

(c) ` 5,60,000.

(d) ` 2,40,000.

(CBSE 2020) (1)

8. Disha and Abha were partners in a firm. Farad was admitted as a new partner for 1/5th share in the profits of the firm. Farad brought proportionate capital. Capitals of Disha and Abha after all adjustments were ` 64,000 and ` 46,000 respectively. Capital brought by Farad was (a) ` 22,000.

(b) ` 27,500.

(c) ` 55,000.

(d) ` 28,000.

(CBSE 2020) (1)

9. The following information has been extracted from the financial statements of a not-for-profit organisation for the year ended 31st March, 2019: Particulars ` Opening balance of Match Fund Sale of Match Tickets Donation for Match Fund received during the year Match Expenses

5,00,000 3,75,000 1,24,000 10,00,000

Which of the following is correct? (a) Negative balance of Match Fund ` 1,000 will be shown on the liabilities side of the Balance Sheet as at 31st March, 2019. (b) Opening balance of Match Fund ` 5,00,000 will be shown on the liabilities side of Balance Sheet as at 1st April, 2018. (c) Negative balance of Match Fund ` 1,000 will be shown on the expenditure side of Income and Expenditure Account for the year ended 31st March, 2019. (d) Both (b) and (c). (CBSE 2020) (1) 10. Claim of the retiring partner is payable in the following form: (a) Fully in cash. (b) Fully transferred to his loan account to be paid with some interest on it. (c) Partly in cash and partly as loan payment with agreed interest. (d) Any of the above.

(1)

11. Fill-in-the blanks for the transaction ‘Interest on drawings’ ` 4,000. JOURNAL Date Particulars

L.F.

Dr. (`)

? ...Dr. 4,000 To ? (Being interest on drawings charged)



Cr. (`) 4,000

(CBSE 2020) (1)

Model Test Papers

M.71

12. ‘X ’, a partner, agreed to take the responsibility of completing dissolution at an agreed amount of ` 10,000 and was to bear all realisation expenses. Realisation expenses of ` 8,000 were paid by the firm. Realisation Account is to be debited with (a) ` 8,000. (b) ` 10,000. (c) ` 18,000. (d) None of these. (1) 13. X and Y shared profits and losses in the ratio of 3 : 2. With effect from 1st April, 2020, they agreed to share profits equally. Goodwill of the firm was valued at ` 1,50,000. The necessary single adjusting entry will be (a) Debit Y and Credit X by ` 15,000. (b) Debit X and Credit Y with ` 15,000. (c) Debit X and Credit Y with ` 1,500. (d) Debit Y and Credit X with ` 1,500. (1) 14. State any three differences between a Receipts and Payments Account and an Income and Expenditure Account.

Or From the following particulars, prepare the Receipts and Payments Account of Simens Sports Society for the year ended on 31st March, 2021:



Opening Balance: ` Cash 15,000 Bank 20,000 Subscription: 2019–20 10,000 2020–21 2,60,000 2021–22 20,000 Sale of old newspapers 500 Rent received for the use of hall 4,500 Salaries 45,000 General expenses 10,000 Electricity charges 15,000 Sports materials 1,00,000 Purchase of newspapers 2,000 Investment in Govt. Securities 1,00,000 Cash in Hand 28,000

(3)

15. On 31st March, 2020, balances in the Capital Accounts of Saroj, Mahinder and Umar after making adjustments for profits and drawings, etc., were ` 80,000, ` 60,000 and ` 40,000 respectively. Subsequently, it was noticed that interest on capital and drawings has been omitted. (a) Profit for the year ended 31st March, 2020 was ` 80,000. (b) During the year, Saroj and Mahinder each withdrew ` 24,000 in equal instalments at the end of each month and Umar withdrew ` 36,000. (c) Interest on drawings was to be charged @ 5% p.a. and interest on capital was to be allowed @ 10% p.a. (d) Profit-sharing ratio among partners was 4 : 3 : 1. Showing your workings, pass the necessary rectifying entry.

M.72

An Aid to Accountancy—CBSE XII

Or Praveen, Sahil and Riya are partners having fixed capitals of ` 2,00,000, ` 1,60,000 and ` 1,20,000 respectively. They share profits in the ratio of 3 : 1 : 1. The Partnership Deed provided for the following which were not recorded in the books:

(i) Interest on Capital @ 5% p.a. (ii) Salary to Praveen ` 1,500 p.m. and to Riya ` 1,000 p.m. (iii) Transfer of profit to General Reserve ` 10,000. Net Profit for the year ended 31st March, 2020 was ` 1,00,000. Pass necessary rectifying entry for the above adjustments in the books of the firm. Also show your workings. (4)

16. Raghav Ltd. purchased a running business from Krishna Traders (Proprietor Krishna Kumar) for ` 15,00,000 payable ` 3,00,000 by cheque and the balance by issue of equity shares of ` 100 each at a premium of 20%. Details of the agreement regarding assets and liabilities taken over are: Particulars

Book Value (`)

Plant and Machinery Building Stock Sundry Debtors Sundry Creditors



Agreed Value (`)

5,00,000 4,00,000 4,00,000 6,00,000 6,00,000 5,00,000 3,20,000 3,00,000 2,00,000 2,00,000

Pass the necessary Journal entries in the books of Raghav Ltd.

(4)

17. Hari, Ravi and Kavi are partners in a firm sharing profits in the ratio of 3 : 2 : 1. They admit Guru as a partner for 1/7th share in the profits. The new profit-sharing ratio was to be 2 : 2 : 2 : 1. Guru brought ` 3,00,000 for his capital and ` 45,000 for 1/7th share of goodwill. Compute the missing values in the following Journal entries: JOURNAL Date Particulars

L.F.

Dr. (`)

Bank A/c ...Dr. ? To Guru’s Capital A/c To Premium for Goodwill A/c (Amount brought in towards capital and goodwill) Kavi’s Capital A/c ...Dr. ? Premium for Goodwill A/c ...Dr. ? To Hari’s Capital A/c To Ravi’s Capital A/c (New partner’s share of goodwill credited to sacrificing partners)

Cr. (`) ? ?

? ?

(4) 18. Priya, Riya and Siya are partners in a firm sharing profits in the ratio of 4 : 3 : 1. The firm closes its books on 31st March every year. On 1st February, 2020, Riya died and it was decided that the new profit-sharing ratio between Priya and Siya will be equal. Partnership Deed provided for the following on the death of a partner: (a) Her share of goodwill be calculated on the basis of half of the profits credited to her account during the previous four completed years. The firm’s profits for the last four years were: Year

2015–16 2016–17 2017–18 2018–19

Profits (`)

1,50,000 1,00,000 50,000 1,00,000

M.73

Model Test Papers

(b) Her share of profit in the year of her death was to be computed on the basis of average profit of past two years. Pass necessary Journal entries for goodwill and profit to be transferred to Riya’s Capital Account. (4) 19. From the following Receipts and Payments Account of Tree Medical Aid Society and additional information, prepare Income and Expenditure Account for the year and Balance Sheet as at 31st March, 2021: Dr.

RECEIPTS AND PAYMENTS ACCOUNT OF TREE MEDICAL AID SOCIETY for the year ended 31st March, 2021

Cr.

Receipts ` Payments ` To Balance 28,000 By Salaries 1,20,000 To Subscriptions 2,00,000 By Honorarium 60,000 To Donations 58,000 By Sundry Expenses 6,000 To Interest on Investments (10% p.a.) 80,000 By Medicines 30,000 To Charity Show Receipts 40,000 By Computer 40,000 By Charity Show Expenses 10,000 By Balance c/d 1,40,000 4,06,000 4,06,000

Additional Information:

1st April, 2020 (`)

31st March, 2021 (`)

Subscription due

2,000

Subscription received in advance

4,000

2,000

Stock of Medicines

8,000

12,000

84,000

1,20,000

1,60,000

1,44,000

Value of Office Equipment (Computer) Value of Buildings

4,000

(6)

20. Pass Journal entries for issue of debentures in each of the following alternative cases: (i) 9% Debenture of ` 100 each issued at ` 100, repayable at ` 100. (ii) 9% Debenture of ` 100 each issued at ` 95, repayable at ` 100. (iii) 9% Debenture of ` 100 each issued at ` 105, repayable at ` 100. (iv) 9% Debenture of ` 100 each issued at ` 100, repayable at ` 105. (v) 9% Debenture of ` 100 each issued at ` 95, repayable at ` 105. (vi) 9% Debenture of ` 100 each issued at ` 105, repayable at ` 110.

(6)

21. Shakti Ltd. invited applications for issuing 40,000 shares of ` 10 each at a premium of ` 2 per share. The amount was payable as follows: On application ` 2 per share, on allotment ` 5 per share (including premium), on first call ` 2 per share and on second and final call ` 3 per share. Applications were received for 60,000 shares. Allotment was made on pro rata basis to the applicants for 48,000 shares, remaining applications being refused. Excess Application Money was applied towards amount due on allotment.

M.74

An Aid to Accountancy—CBSE XII

Shiv, to whom 1,600 shares were allotted, failed to pay the allotment money and Mohan, to whom 2,000 shares were allotted, failed to pay two calls. These were subse­quently forfeited after the second and final call. Pass the necessary Journal entries in the books of Shakti Ltd. to record the above transactions. Or

Zent Ltd. issued 10,000 equity shares of ` 10 each at a premium of ` 3 per share payable as: On Application `4

On Allotment

` 5 (including premium)



On First Call

`2



The balance as and when required.

Applications were received for 12,000 shares. The company made pro rata allotment to all the applicants. One shareholder who was allotted 900 shares paid the entire amount with allotment while another shareholder who had applied for 1,200 shares, did not pay the allotment money and on his subsequent failure to pay the first call his shares were forfeited. Of the forfeited shares, 800 shares were reissued at ` 7 per share. You are required to prepare: (i) Shares Allotment Account. (ii) Securities Premium Reserve Account. (iii) Share Forfeiture Account. (iv) Calls-in-Arrears Account.

(8)

22. Asha, Deepa and Lata were partners in a firm sharing profits in the ratio of 2 : 3 : 5. On 31st March, 2020, their Balance Sheet was as follows: Liabilities ` Assets

`

Creditors 70,000 Bank 45,000 Asha’s Capital 80,000 Debtors 40,000 Deepa’s Capital 70,000 Less: Provision for Doubtful Debts 5,000 35,000 Lata’s Capital 60,000 Stock 50,000 Building 1,40,000 Profit and Loss A/c 10,000 2,80,000 2,80,000

On the above date Lata retired from the firm on the following terms: (i) Building was to be decreased by ` 40,000. (ii) Provision for Doubtful Debts was to be maintained at 20% on debtors. (iii) Salary outstanding ` 5,000 was to be recorded and creditors ` 4,000 will not be claimed. (iv) Goodwill of the firm was valued at ` 72,000. (v) Lata was to be paid ` 15,000 by cheque and the balance was transferred to her loan account. Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the new firm.

M.75

Model Test Papers

Or

Following is the Balance Sheet of Vinit and Yogesh on 31st March, 2020:

Liabilities ` Assets

`

Creditors 70,000 Land and Building 70,000 Capital A/cs: Machinery 60,000 Vinit 1,20,000 Debtors 80,000 Yogesh 80,000 2,00,000 Bank 60,000 2,70,000 2,70,000

The firm was dissolved on the above date. The assets and liabilities were settled as follows: (i) Creditors of ` 50,000 took Land and Building in full settlement of their claim. (ii) Remaining creditors were paid in cash. (iii) Machinery was sold at 30% less. (iv) Debtors were collected at a cost of ` 500. (v) Expenses of realisation were ` 1,700. Pass the necessary Journal entries for dissolution of the firm.

(8)

PART B ANALYSIS OF FINANCIAL STATEMENTS 23. Acquisition and disposal of Long-term Assets and other investments not included in cash equivalents are ___________. (a) Operating Activities.

(b) Investing Activities.

(c) Financing Activities.

(d) Real Activities.

(1)

24. Share Capital of Akash Ltd. in the Balance Sheet has increased from ` 30,00,000 in the previous year to ` 47,50,000 in current year. Company had issued the bonus shares in the ratio of 3 : 1. What will be the cash inflow as a result of above? (a) ` 17,50,000.

(b) ` 7,50,000.

(c) ` 10,00,000.

(d) ` 77,50,000.

(1)

25. ___________ is a contingent liability. (a) Claim against the company.

(b) Proposed Dividend (current year).

(c) Trade Payables.

(d) Provision for Tax.

(1)

26. Total amount of Trade Receivables of Ashoka Ltd. as on 31st March, 2019 were ` 3,00,000. It had created a provision of 5% for Bad and Doubtful Debts. What amount of Trade Receivables will be taken to calculate Trade Receivables Turnover Ratio? (CBSE 2020) (1)

M.76

An Aid to Accountancy—CBSE XII

27. Which of the following is not an objective of Analysis of Financial Statements: (a) To judge the financial health of the firm. (b) To judge the short-term and long-term liquidity position of the firm. (c) To judge the reasons for change in the profitability of the firm. (d) To judge the variations in the accounting practices of the business followed by different enterprises. (CBSE 2020) (1) 28. What will be the impact of ‘Issuing ` 10,00,000 equity shares to vendors of machinery’ on the Debt-Equity Ratio of 2 : 1? (1) 29. Name the aggregate of Non-current Assets and Working Capital. (a) Total Debt.

(b) Total Asset.

(c) Capital Employed.

(d) Shareholders’ Funds.

(1)

30. Inventory in the beginning of the year ` 60,000; Inventory at the end of the year ` 1,00,000; Inventory Turnover Ratio 8 Times. Selling price 25% above cost. Compute the amount of Gross Profit and Revenue from Operations. Or

Opening inventory is ` 60,000, closing inventory is 1.5 times of opening inventory. 1 Inventory Turnover Ratio is 6 times. Selling price is 33 % above cost. Calculate the 3 Gross Profit Ratio. (CBSE 2020) (3) 31. Following is the Statement of Profit and Loss of XL Ltd. for the year ended 31st March, 2020: Particulars

Note No.

2018–19 (`)

2019–20 (`)

I. Revenue from Operations 50,00,000 80,00,000 II. Expenses

(a) Employee Benefit Expenses: 10% of Revenue from Operations

...

...

(b) Other Expenses 10,00,000 12,00,000 III. Tax Rate 40%



... ...

Prepare Comparative Statement of Profit and Loss of XL Ltd. Or



Under which major head/sub-head 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) Capital Advances

(ii) Income received in Advance

(iii) Capital Work-in-Progress

(iv) Motor Vehicles

(v) Stores and Spare Parts

(vi) 9% Debentures

(vii) Goodwill

(viii) Copyrights

(4)

M.77

Model Test Papers

32. From the following Balance Sheet of Ajanta Limited as on 31st March, 2020, prepare Cash Flow Statement: Particulars Note No. 31st March, 31st March, 2020 (`) 2019 (`) I. EQUITY AND LIABILITIES 1. Shareholders’ Funds (a) Equity Share Capital (b) Reserves and Surplus 1 2. Non-Current Liabilities Long-term Borrowings—9% Debentures 3. Current Liabilities (a) Trade Payables 2 (b) Other Current Liabilities 3 Total II. ASSETS 1. Non-Current Assets (a) Fixed Assets—Tangible Assets 4 (b) Non-Current Investments 5 2. Current Assets (a) Inventories (b) Trade Receivables (c) Cash and Cash Equivalents Total

10,00,000 10,00,000 2,40,000 1,20,000 3,20,000

2,40,000

1,80,000 2,40,000 1,80,000 1,60,000 19,20,000 17,60,000

13,40,000 12,00,000 2,40,000 1,60,000 1,20,000 1,60,000 1,60,000 1,60,000 60,000 80,000 19,20,000 17,60,000

Notes to Accounts Particulars 1. Reserves and Surplus General Reserve Balance in Statement of Profit and Loss 2. Trade Payables Creditors Bills Payable 3. Other Current Liabilities Outstanding Rent 4. Tangible Assets Plant and Machinery Accumulated Depreciation 5. Non-Current Investments Shares in XYZ Limited



31st March, 31st March, 2020 (`) 2019 (`) 1,20,000 1,20,000 2,40,000

1,20,000 ... 1,20,000

1,40,000 40,000 1,80,000

1,20,000 1,20,000 2,40,000

1,80,000

1,60,000

14,90,000 (1,50,000) 13,40,000

13,00,000 (1,00,000) 12,00,000

2,40,000 1,60,000

Additional Information:

(a) During the year 2019–20, a machinery costing ` 50,000 and accumulated depreciation thereon ` 15,000 was sold for ` 32,000. (b) 9% Debentures of ` 80,000 were issued on 1st April, 2019.

(6)

M.78

An Aid to Accountancy—CBSE XII

Answers PART A 1. (b) equally. 2. (d) All of the above. 3. (d) ` 84,000. 4. (a) Old Profit-sharing Ratio. 5. (d) ` 16,000. 6. Premium for Goodwill/Goodwill. 7. (c) ` 5,60,000.

Note: Maximum amount of discount on reissue = Amount received on forfeited shares, i.e., 8,000 × ` 70 = ` 5,60,000.

8. (b) ` 27,500.

Working Note:



Capital of Disha and Abha after all adjustments for 4/5 (1 – 1/5th) share

= ` 64,000 + ` 46,000 = ` 1,10,000 Total capital of the firm should by = ` 1,10,000 × 5/4 = ` 1,37,500

Farad’s capital for 1/5th share = ` 1,37,500 × 1/5 = ` 27,500.

9. (c) Negative balance of Match Fund, ` 1,000 will be shown on the expenditure side of Income and Expenditure Account for the year ended 31st March, 2019. 10. (d) Any of the above. 11.

JOURNAL

Date Particulars

L.F.

Dr. (`)

Cr. (`)

Partner’s Capital/Current A/c ...Dr. 4,000 To Interest on Drawings A/c 4,000 (Being interest on drawings charged)

12. (b) ` 10,000. Note: Realisation Account is debited with the amount of Realisation Expenses that are borne by the firm. In this case, it is ` 10,000.

13. (a) Debit Y and credit X by ` 15,000. 14. Basis of Difference

Receipts and Payments Account

Income and Expenditure Account

1. Nature of Account

It is an Asset Account.

It is a Revenue Account and also an Expense Account.

2. Basis Structure

It shows receipts and payments during the year in cash or through bank in a summarised manner.

It shows expenditures and incomes for the year on accrual basis.

3. Nature of Items Recorded It records the receipts and payments whether of capital or revenue nature.

It records the incomes, expenditures and losses of revenue nature.

M.79

Model Test Papers

Or Dr.

RECEIPTS AND PAYMENTS ACCOUNT for the year ending on 31st March, 2021

Cr.

Receipts ` Payments ` To Balance b/d: By Salaries Cash 15,000 By General Expenses Bank 20,000 35,000 By Electricity Charges To Subscription: By Sports Materials 2019–20 10,000 By Purchase of Newspapers 2020–21 2,60,000 By Investment in Government Securities 2021–22 20,000 2,90,000 By Balance c/d: To Rent Received for the Use of Hall 4,500 Cash 28,000 To Sale of Old News Papers 500 Bank (Balancing Figure) 30,000 3,30,000

15.

45,000 10,000 15,000 1,00,000 2,000 1,00,000

58,000 3,30,000

JOURNAL

Date Particulars

L.F.

Dr. (`)

Cr. (`)

Saroj’s Capital A/c ...Dr. 2,350 Mahinder’s Capital A/c ...Dr. 1,300 To Umar’s Capital A/c (Interest on capital and interest on drawings omitted, now adjusted)

3,650

Working Notes: 1.

CALCULATION OF OPENING CAPITAL AND INTEREST ON CAPITAL

Particulars

Saroj (`)

Mahinder (`)

Umar (`)

Closing Capitals Less: Profit (4 : 3 : 1) Add: Drawings Opening Capitals

80,000 (40,000) 24,000 64,000

60,000 (30,000) 24,000 54,000

40,000 (10,000) 36,000 66,000

Interest on Capital @ 10%

6,400

5,400

6,600

2. Particulars

STATEMENT SHOWING ADJUSTMENT TO BE MADE Saroj’s Capital A/c Dr. (`) Cr. (`)

Mahinder’s Capital A/c Dr. (`) Cr. (`)

Umar’s Capital A/c Dr. (`) Cr. (`)

Firm Dr. (`)

Cr. (`)

I. Profit already distributed now taken back 40,000 ... 30,000 ... 10,000 ... ... 80,000 II. Interest on Capital (Credited) ... 6,400 ... 5,400 ... 6,600 18,400 ... III. Interest on Drawings* (Debited) 550 ... 550 ... 900 ... ... 2,000 IV. Profit to be distributed (Balancing Figure) (4 : 3 : 1) ... 31,800 ... 23,850 ... 7,950 63,600 ... Total 40,550 38,200 30,550 29,250 10,900 14,550 82,000 82,000 Net Effect

2,350 (Dr.)

1,300 (Dr.)

3,650 (Cr.)

...

* Interest on drawings of Saroj and Mahinder = ` 24,000 × 5/100 × 5.5/12 = ` 550 each. Interest on drawings of Umar = ` 36,000 × 5/100 × 6/12 = ` 900 Since, the date of drawings is not given, Umar’s interest on drawings will be calculated on half yearly basis.

M.80

An Aid to Accountancy—CBSE XII

Or In the Books of Praveen, Sahil and Riya JOURNAL Date Particulars

L.F.

Dr. (`)

Praveen’s Current A/c ...Dr. 10,400 Sahil’s Current A/c ...Dr. 4,800 To Riya’s Current A/c To General Reserve A/c (Salary and interest transferred, General Reserve omitted, now adjusted)

Cr. (`)

5,200 10,000

Working Note: STATEMENT SHOWING ADJUSTMENT TO BE MADE Particulars I. Profit of ` 1,00,000 already distributed in the ratio of 3 : 1 : 1, now taken back II. Interest on Capital III. Salary IV. Profit to be distributed (3 : 1 : 1) `( 1,00,000 – 10,000* – 24,000 – 30,000) Total Net Effect

Praveen’s Current A/c Sahil’s Current A/c Dr. (`) Cr. (`) Dr. (`) Cr. (`)

60,000 ... ...

... 10,000 18,000

20,000 ... ...

... 8,000 ...

Riya’s Current A/c Dr. (`) Cr. (`)

20,000 ... ...

... 6,000 12,000

Firm Dr. (`) Cr. (`)

... 24,000 30,000

1,00,000 ... ...

... 21,600 ... 7,200 ... 7,200 36,000 ... 60,000 49,600 20,000 15,200 20,000 25,200 90,000 1,00,000 10,400 (Dr.)

4,800 (Dr.)

5,200 (Cr.)

10,000 (Cr.)*

* ` 10,000 transferred to General Reserve out of profit.

16.

JOURNAL

Date Particulars

L.F.

Dr. (`)

Plant and Machinery A/c ...Dr. 4,00,000 Building A/c ...Dr. 6,00,000 Stock A/c ...Dr. 5,00,000 Sundry Debtors A/c ...Dr. 3,00,000 To Sundry Creditors A/c To Krishna Kumar To Capital Reserve A/c (Balancing Figure) (Purchase of business of Krishna Traders (Proprietor Krishna Kumar) Krishna Kumar ...Dr. 3,00,000 To Bank A/c (` 3,00,000 paid by cheque) Krishna Kumar ..Dr. 12,00,000 To Equity Share Capital A/c To Securities Premium Reserve A/c (Balance discharged by issue of 10,000 equity shares of ` 100 each at 20% premium) Note: No. of equity shares to be issued = Purchase consideration – Amount of cheque/Issue price

= ` 12,00,000/` 120 = 10,000 shares.

Cr. (`)

2,00,000 15,00,000 1,00,000

3,00,000

10,00,000 2,00,000

M.81

Model Test Papers

17.

JOURNAL

Date Particulars Bank A/c

L.F.

...Dr.

Dr. (`)

Cr. (`)

3,45,000



To Guru’s Capital A/c 3,00,000



To Premium for Goodwill A/c

45,000

(Amount brought in towards capital and goodwill) Kavi’s Capital A/c (` 3,15,000 × 5/42)

...Dr.

37,500

Premium for Goodwill A/c

...Dr.

45,000



To Hari’s Capital A/c (` 82,500 × 9/11)

67,500



To Ravi’s Capital A/c (` 82,500 × 2/11)

15,000

(New partner’s share of goodwill credited to sacrificing partners) Note: Hari’s sacrifice = 3/6 – 2/7 = 9/42, Ravi’s sacrifice = 2/6 – 2/7 = 2/42, Sacrificing Ratio = 9 : 2, Kavi’s gain = 1/6 – 2/7 = (5/42), Firm’s Goodwill = ` 45,000 × 7/1 = ` 3,15,000.

18.

JOURNAL

Date Particulars Siya’s Capital A/c

L.F.

...Dr.

Dr. (`)

Cr. (`)

75,000

To Riya’s Capital A/c

75,000

(Riya’s share of goodwill adjusted) (Note 1 and 2) Siya’s Capital A/c

...Dr.

23,438

To Riya’s Capital A/c

23,438

(Riya’s share of profit adjusted) Notes: 1. Calculation of Gaining Ratio:

New Profit Share

Old Profit Share

Difference

Priya

1/2

4/8

1/2 – 4/8 = 0

Siya

1/2

1/8

1/2 – 1/8 = 3/8 (Gain)

Thus, only Siya is gaining partner. 2. Siya’s share of goodwill = 1/2 of profits credited to her account for last 4 years.

= 1/2 [3/8 (` 1,50,000 + ` 1,00,000 + ` 50,000 + ` 1,00,000)]



= ` 75,000.

3. Calculation of Riya’s share of profit till the date of death: Average profit of past two years = (` 50,000 + ` 1,00,000)/2 = ` 75,000 Riya’s share of profit = ` 75,000 × 10/12 × 3/8 = ` 23,438. 4. Rya’s share of profit is adjusted through Siya’s Capital A/c as there is change in profit-sharing ratio of remaining partners and not through profit and Loss Suspense Account.

M.82

An Aid to Accountancy—CBSE XII

19. Dr.

INCOME AND EXPENDITURE ACCOUNT for the year ended 31st March, 2021

Expenditure ` Income To Salaries 1,20,000 By Subscriptions (WN 2) To Honorarium 60,000 By Donations To Sundry Expenses 6,000 By Interest on Investments To Medicines: By Charity Show Receipts 40,000 Opening Stock 8,000 Less: Expenses 10,000 Add: Purchases 30,000 38,000 Less: Closing Stock 12,000 26,000 To Depreciation on Computer 4,000 (` 84,000 + ` 40,000 – ` 1,20,000) To Depreciation on Building 16,000 (` 1,60,000 – ` 1,44,000) To Surplus transferred to Capital Fund (Balancing Figure) 1,40,000 3,72,000



Cr. ` 2,04,000 58,000 80,000 30,000

3,72,000

BALANCE SHEET as at 31st March, 2021

Liabilities ` Assets

`

Subscription Received in Advance 2,000 Cash/Bank 1,40,000 Capital Fund 10,78,000 Subscription Due 4,000 Add: Surplus 1,40,000 12,18,000 Stock of Medicines 12,000 Investment (WN 1) 8,00,000 Office Equipment 1,20,000 Building 1,44,000 12,20,000 12,20,000 Working Notes: 1. Calculation of Opening Capital:



BALANCE SHEET as at 31st March, 2020

Liabilities ` Assets

`

Subscription Received in Advance 4,000 Cash/Bank 28,000 Capital Fund (Balancing Figure) 10,78,000 Subscription Due 2,000 Stock of Medicines 8,000 Investment* 8,00,000 Office Equipment 84,000 Building 1,60,000 10,82,000 10,82,000 * Interest on Investment @ 10% = ` 80,000. It means, investment = ` 80,000 × 100/10 = ` 8,00,000.

M.83

Model Test Papers 2. Dr.

SUBSCRIPTION ACCOUNT Cr.

Particular ` Particulars ` To Subscription Due A/c (Opening) 2,000 By Advance Subscription A/c (Opening) 4,000 To Income and Expenditure A/c (Balancing Figure) 2,04,000 By Bank A/c 2,00,000 To Advance Subscription A/c (Closing) 2,000 By Subscription Due A/c (Closing) 4,000 2,08,000 2,08,000

20.

JOURNAL

Date Particulars

L.F.

Dr. (`)

  (i) Bank A/c ...Dr. 100 To Debentures Application and Allotment A/c (Receipt of debentures application money) Debentures Application and Allotment A/c ...Dr. 100 To 9% Debentures A/c (Issue of debentures at par) (ii) Bank A/c ...Dr. 95 To Debentures Application and Allotment A/c (Receipt of debentures application money) Debentures Application and Allotment A/c ...Dr. 95 Discount on Issue of Debentures A/c ...Dr. 5 To 9% Debentures A/c (Issue of debentures at 5% discount)  (iii) Bank A/c ...Dr. 105 To Debentures Application and Allotment A/c (Receipt of debentures application money) Debentures Application and Allotment A/c ...Dr. 105 To 9% Debentures A/c To Securities Premium Reserve A/c (Issue of debentures at 5% premium)   (iv) Bank A/c ...Dr. 100 To Debentures Application and Allotment A/c (Receipt of debentures application money) Debentures Application and Allotment A/c ...Dr. 100 Loss on Issue of Debentures A/c ...Dr. 5 To 9% Debentures A/c To Premium on Redemption of Debentures A/c (Issue of debentures at par and redeemable at 5% premium)   (v) Bank A/c ...Dr. 95 To Debentures Application and Allotment A/c (Receipt of debentures application money) Debentures Application and Allotment A/c ...Dr. 95 Loss on Issue of Debentures A/c ...Dr. 10 To 9% Debentures A/c To Premium on Redemption of Debentures A/c (Issue of debentures at 5% discount and redeemable at 5% premium) (vi) Bank A/c ...Dr. 105 To Debentures Application and Allotment A/c (Receipt of debentures application money) Debentures Application and Allotment A/c ...Dr. 105 Loss on Issue of Debentures A/c ...Dr. 10 To 9% Debentures A/c To Securities Premium Reserve A/c To Premium on Redemption of Debentures A/c (Issue of debentures at 5% premium and redeemable at 10% premium)

Cr. (`) 100 100 95

100 105 100 5 100

100 5 95

100 5 105

100 5 10

M.84 21.

An Aid to Accountancy—CBSE XII In the Books of Shakti Ltd. JOURNAL

Date Particulars

L.F.

Dr. (`)

Cr. (`)

Bank A/c ...Dr. 1,20,000 To Equity Shares Application A/c (Application money received on 60,000 shares)

1,20,000

Equity Shares Application A/c ...Dr. 1,20,000 To Equity Share Capital A/c To Bank A/c To Equity Shares Allotment A/c (Application money adjusted and surplus refunded)

80,000 24,000 16,000

Equity Shares Allotment A/c ...Dr. 2,00,000 To Equity Share Capital A/c To Securities Premium Reserve A/c (Allotment money due)

1,20,000 80,000

Bank A/c ...Dr. 1,76,640 To Equity Shares Allotment A/c (Remaining allotment money received on 38,400 shares) (WN 2)

1,76,640

Equity Shares First Call A/c ...Dr. 80,000 To Equity Share Capital A/c (First call money due)

80,000

Bank A/c ...Dr. 72,800 To Equity Shares First Call A/c (First call money received on 36,400 shares @ ` 2 per share)

72,800

Equity Shares Second and Final Call A/c ...Dr. 1,20,000 To Equity Share Capital A/c (Second and final call due)

1,20,000

Bank A/c ...Dr. 1,09,200 To Equity Shares Second and Final Call A/c (Second and final call money received on 36,400 shares)

1,09,200

Equity Share Capital A/c ...Dr. 36,000 Securities Premium Reserve A/c ...Dr. 3,200 To Equity Shares Allotment A/c To Equity Shares First Call A/c To Equity Shares Second and Final Call A/c To Forfeited Shares A/c (1,600 shares forfeited for non-payment of full allotment money and the calls money and 2,000 shares for non-payment of two calls money) (WN 1)

7,360 7,200 10,800 13,840

Working Notes: 1. Calculation of the amount due but not paid on allotment in case of Shiv: (a) Total number of shares applied by Shiv = 1,600 × 48,000/40,000 (b) Application money received from Shiv = 1,920 × ` 2 (c) Less: Application money due on shares allotted = 1,600 × ` 2 (d) Excess application money adjusted on allotment (e) Allotment money due on shares allotted (1,600 × ` 5) (f ) Amount due on allotment but not paid by Shiv (e – d) `(8,000 – 640)

1,920 shares ` 3,840 ` 3,200 ` 640 ` 8,000 ` 7,360

M.85

Model Test Papers 2. Calculation of Allotment money received later: Total allotment money due (40,000 × ` 5) Less: (i) Already received (Excess application money) (ii) Amount due but not paid by Shiv (WN 1) Allotment money received

` 2,00,000 16,000 7,360

23,360 1,76,640

Or Dr.

SHARES ALLOTMENT ACCOUNT Cr.

Particular ` Particulars ` To Share Capital A/c (10,000 × ` 2) 20,000 By Share Application A/c (Note 1) 8,000 To Securities Premium Reserve A/c (10,000 × ` 3) 30,000 By Bank A/c (Note 3) 37,800 By Calls-in-Arrears A/c (Note 2) 4,200 50,000 50,000 Dr.

SECURITIES PREMIUM RESERVE ACCOUNT Cr.

Particular ` Particulars ` To Calls-in-Arrears A/c (1,000 × ` 3) 3,000 By Share Allotment A/c (10,000 × ` 3) 30,000 To Balance c/d 27,000 30,000 30,000 Dr.

SHARE FORFEITURE ACCOUNT Cr.

Particular ` Particulars ` To Share Capital A/c 800 By Share Capital A/c (1,200 × ` 4) (Discount on reissue of 800 shares) To Capital Reserve A/c (Note 4) 3,040 To Balance c/d (` 4,800/1,000 × 200) 960 4,800 Dr.

4,800

4,800

CALLS-IN-ARREARS ACCOUNT Cr.

Particular ` Particulars ` To Share Allotment A/c 4,200 By Share Capital A/c To Share First Call A/c 2,000 By Securities Premium Reserve A/c 6,200 Notes: 1. Excess application money adjusted on allotment = (12,000 – 10,000) × ` 4 = ` 8,000. 2. Amount not received from defaulter shareholders (Calls-in-Arrears): (i) Shares allotted to him =

10,000 × 1,200 = 1,000 12,000

(ii) Application money received = 1,200 × ` 4 = ` 4,800 (iii) Application money due on shares allotted = 1,000 × ` 4 = ` 4,000 (iv) Excess application money adjusted on allotment = ` 4,800 – ` 4,000 = ` 800 (v) Allotment money due on shares allotted (1,000 × ` 5) = ` 5,000 (vi) Allotment money due but not received (Calls-in-Arrears) = ` 5,000 – ` 800 = ` 4,200.

3,200 3,000 6,200

M.86

An Aid to Accountancy—CBSE XII

3. Calculation of amount received on allotment:

`



Total allotment money due (10,000 × ` 5)

50,000



Less: Excess application money adjusted (Note 1)

8,000



42,000



Less: Allotment money due but not received (Note 2)



Amount received on Allotment

4,200 37,800

4. Calculation of amount transferred to Capital Reserve:

Amount forfeited on reissued shares (` 4,800/1,000 × 800)



Less: Reissued Discount (800 × ` 1)



Gain on reissue transferred to Capital Reserve

3,840 800 3,040

22. Dr.

REVALUATION ACCOUNT Cr.

Particular ` Particulars ` To Building A/c 40,000 By Creditors 4,000 To Provision for Doubtful Debts 3,000 By Capital A/c (Loss) To Outstanding Salary 5,000 Asha 2/10 8,800 Deepa 3/10 13,200 Lata 5/10 22,000 44,000 48,000 48,000 Dr. Particulars To Profit and Loss A/c To Revaluation A/c (Loss) To Lata’s Capital A/c (Note) To Bank A/c To Lata’s Loan A/c To Balance c/d



Cr.

PARTNERS’ CAPITAL ACCOUNTS Asha (`) Deepa (`) Lata (`)

Particulars

2,000 3,000 5,000 By Balance b/d 8,800 13,200 22,000 By Asha Capital A/c (Note) 14,400 21,600 ... By Deepa’s Capital A/c ... ... 15,000 (Note) ... ... 54,000 54,800 32,200 ... 80,000 70,000 96,000

Asha (`) Deepa (`) Lata (`) 80,000 70,000 60,000 ... ... 14,400 ... ... 21,600

80,000 70,000 96,000

BALANCE SHEET as at 1st April, 2020

Liabilities ` Assets

`

Creditors 66,000 Bank (` 45,000 – ` 15,000) 30,000 Outstanding Salary 5,000 Debtors 40,000 Lata’s Loan 54,000 Less: Provision 8,000 32,000 Capital A/cs: Stock 50,000 Asha 54,800 Building 1,00,000 Deepa 32,200 87,000 2,12,000 2,12,000 Note: Lata’s share of goodwill ` 36,000 (i.e., ` 72,000 × 5,110) will be adjusted to gaining partners’ Capital Accounts in their gaining ratio 2 : 3.

M.87

Model Test Papers

Or JOURNAL Date Particulars

L.F.

Dr. (`)

2020 April 1 Realisation A/c ...Dr. 2,10,000 To Debtors To Machinery To Land and Building (Assets transferred to Realisation A/c on dissolution)

Cr. (`)

80,000 60,000 70,000

Creditors ...Dr. 70,000 To Realisation A/c (Liabilities transferred to Realisation A/c on dissolution)

70,000

Cash/Bank A/c ...Dr. 1,22,000 To Realisation A/c (Assets realised)

1,22,000

Realisation A/c ...Dr. 500 To Cash/Bank A/c (Expenses incurred to recover debtors)

500

Realisation A/c ...Dr. 1,700 To Cash/Bank A/c (Realisation expenses paid)

1,700

Realisation A/c ...Dr. 20,000 To Cash/Bank A/c (Creditors paid off)

20,000

Vinit’s Capital A/c ...Dr. 20,100 Yogesh’s Capital A/c ...Dr. 20,100 To Realisation A/c (Loss on realisation transferred to Partners’ Capital Accounts) Vinit’s Capital A/c ...Dr. 99,900 Yogesh’s Capital A/c ...Dr. 59,900 To Cash/Bank A/c (Final payment made to partners) (Note 2)

40,200

1,59,800

Working Notes: 1. If an asset is given in payment of a liability, then to entry is passed for such payment. So, in the given case, no entry will be passed for Land and Building taken by creditors of ` 50,000. However, entry will be passed for cash paid of ` 20,000 (= 70,000 – 50,000). 2. Dr.

PARTNERS’ CAPITAL ACCOUNTS

Particulars Vinit (`) Yogesh (`) Particulars To Realisation A/c (Loss) To Cash/Bank A/c (Final Payment)

20,100 20,100 By Balance b/d 99,900 59,900 1,20,000 80,000

Cr. Vinit (`) Yogesh (`) 1,20,000 80,000 1,20,000 80,000

M.88

An Aid to Accountancy—CBSE XII

PART B 23. (b) Investing Activities. 24. (b) 7,50,000

Working Note: Bonus issue in the ratio of 3 : 1 means that for every 3 shares 1 share is given. It implies that shareholders holding shares of ` 30,00,000 will get ` 10,00,000 shares issued as bonus shares. Share Capital has increased by ` 47,50,000. Thus, cash inflow is of ` 7,50,000 (` 47,50,000 – ` 30,00,000 – ` 10,00,000).

25. (b) Proposed Dividend (Current year). 26. ` 3,00,000. Note: ‘Provision for Doubtful Debts’ is not deducted from the total amount of Trade Receivables to calculate Trade Receivables Turnover Ratio. Since, the purpose is to calculate the number of days for which Revenue from Operations is tied up in Trade Receivables and not to ascertain the realisable value of Trade Receivables.

27. (d) To judge the variations in the accounting practices of the business followed by different enterprises. 28. Decrease. Reason: Equity is increased by the amount of share capital issued, i.e., ` 10,00,000 but debt remains unchanged. 29. (c) Capital Employed. 30.

Average Inventory =

Opening Inventory + Closing Inventory 2





=

` 60,000 + ` 1,00,000 = ` 80,000 2





Inventory Turnover Ratio =

Cost of Revenue from Operations Average Inventory

8 =

Cost of Revenue from Operations ` 80,000



Cost of Revenue from Operations = ` 80,000 × 8 = ` 6,40,000 Gross Profit = 25% of ` 6,40,000 = ` 1,60,000 Revenue from Operations = Cost of Revenue from Operations + Gross Profit = ` 6,40,000 + ` 1,60,000 = ` 8,00,000. Or

Gross Profit Ratio =

Gross Profit × 100 Revenue from Operations



Average Inventory =

Opening Inventory + Closing Inventory 2

=

` 60,000 + ` 90,000 (i.e., ` 60,000 × 1.5) = ` 75,000 2

M.89

Model Test Papers



Inventory Turnover Ratio =

Cost of Revenue from Operations Average Inventory



6 =

Cost of Revenue from Operations ` 75,000

Cost of Revenue from Operations = ` 75,000 × 6 = ` 4,50,000

Revenue from Operations = Cost of Revenue from Operations + Gross profit 1 = ` 4,50,000 + 33 % of ` 4,50,000 3 = ` 4,50,000 + ` 1,50,000 = ` 6,00,000

Gross Profit Ratio =

=

Gross Profit × 100 Revenue from Operations ` 1,50,000 × 100 = 25%. ` 6,00,000

31. COMPARATIVE STATEMENT OF PROFIT AND LOSS for the years ended 31st March, 2019 and 2020 Particulars Note No. 2018–19 2019–20 ` `

Absolute Percentage Change (Increase/ Change (Increase/ Decrease) (`) Decrease) (%)

I. Revenue from Operations

50,00,000

II. Expenses: (a) Employees Benefit Expenses: 10% of Revenue from Operations (b) Other Expenses Total Expenses

80,00,000

30,00,000

60.00

5,00,000 8,00,000 10,00,000 12,00,000 15,00,000 20,00,000

3,00,000 2,00,000 5,00,000

60.00 20.00 33.33

III. Net Profit before Tax (I – II) IV. Less: Tax V. Net Profit after Tax

35,00,000 60,00,000 14,00,000 24,00,000 21,00,000 36,00,000

25,00,000 10,00,000 15,00,000

71.43 71.43 71.43

Or S. No.

Items

Main Head

Sub-head

(i )

Capital Advances

Non-current Assets

Long-term Loans and Advances

(ii)

Income Received in Advance

Current Liabilities

Other Current Liabilities

(iii )

Capital Work-in-Progress

Non-current Assets

Fixed Assets

(iv)

Motor Vehicle

Non-current Assets

Fixed Assets—Tangible Assets

(v)

Stores and Spare Parts

Current Assets

Inventories

(vi)

9% Debentures

Non-current Liabilities

Long-term Borrowings

(vii)

Goodwill

Non-current Assets

Fixed Assets—Intangible Assets

(viii)

Copyrights

Non-current Assets

Fixed Assets—Intangible Assets

M.90 32. Particulars 

An Aid to Accountancy—CBSE XII Ajanta Limited CASH FLOW STATEMENT for the year ended 31st March, 2020 ` `

I. Cash Flow from Operating Activities Surplus, i.e., Balance in the Statement of Profit and Loss 1,20,000 Adjustment for Non-cash and Non-operating Items: Depreciation (WN 2) 65,000 Loss on Sale of Machinery (WN 1) 3,000 Interest on Debentures 28,800 96,800 Operating Profit before changes in Working Capital 2,16,800 Add: Decrease in Current Assets and Increase in Current Liabilities: Inventories 40,000 Outstanding Rent 20,000 Creditors 20,000 80,000 2,96,800 Less: Increase in Current Assets and Decrease in Current Liabilities: Bills Payable (80,000) Cash Flow from Operating Activities 2,16,800 II. Cash Flow from Investing Activities Purchase of Machinery (WN 1) (2,40,000) Sale of Machinery (WN 1) 32,000 Purchase of Shares in XYZ Limited (80,000) Cash Used in Investing Activities (2,88,000) I II. Cash Flow from Financing Activities Issue of 9% Debentures 80,000 Interest on Debentures (28,800) Cash Flow from Financing Activities 51,200 IV. Net Decrease in Cash and Cash Equivalents (20,000) Add: Opening Balance of Cash and Cash Equivalents 80,000 V. Closing Balance of Cash and Cash Equivalents 60,000 Working Notes: 1. Dr.

PLANT AND MACHINERY ACCOUNT Cr.

Particulars ` Particulars ` To Balance b/d 13,00,000 By Bank A/c (Sale) 32,000 To Bank A/c (Purchase) (Balancing Figure) 2,40,000 By Accumulated Depreciation A/c 15,000 By Statement of Profit and Loss (Loss) 3,000 By Balance c/d 14,90,000 15,40,000 15,40,000 2. Dr.

ACCUMULATED DEPRECIATION ACCOUNT Cr.

Particulars ` Particulars ` To Plant and Machinery A/c 15,000 By Balance b/d 1,00,000 To Balance c/d 1,50,000 By Statement of Profit and Loss (Depreciation) 65,000 (Balancing Figure) 1,65,000 1,65,000

Model Test Paper 5 Time Allowed: 3 Hours

Max. Marks: 80

General Instructions: As per Model Test Paper 1

PART A ACCOUNTING FOR NOT-FOR-PROFIT ORGANISATIONS, PARTNERSHIP FIRMS AND COMPANIES 1. Distinguish between ‘Fixed Capital Account’ and ‘Fluctuating Capital Account’ on the basis of credit balance. (1) 2. Which of the following statement is true? (a) A debentureholder is an owner of the company. (b) A debentureholder can get his money back only on the company being wound up. (c) Debentures issued at a discount can be redeemed at a premium. (d) Debentureholders receive interest only if the company earns profit in that year. (1) 3. On a share of ` 100 issued at a premium of ` 10 the whole amount has been called-up but from a shareholder only ` 80 has been received. The share capital would be credited by (a) ` 100.

(b) ` 110.

(c) ` 80.

(d) ` 70.

(1)

4. At the time of retirement of a partner, an unrecorded asset is accounted by (a) Debiting Revaluation Account. (b) Crediting Revaluation Account. (c) Crediting Partners’ Capital Accounts. (d) Crediting the Capital Account of retiring partner only.

(1)

5. Complete the following statement: General donations and legacies are treated as _____________ and hence, are credited to _____________. (1) 6. Retiring partner is compensated for sacrificing his share in future profits in favour of remaining partners in their (a) Capital Ratiio.

(b) Sacrificing Ratio.

(c) Gaining Ratio.

(d) Profit-sharing Ratio.

(1)

M.92

An Aid to Accountancy—CBSE XII

7. X, Y and Z sharing profits and losses in the ratio of 5 : 3 : 2, decided to share profits and losses in the ratio of 2 : 3 : 5 with effect from 1st April, 2020 after admitting A for 1/4th share. An extract of their Balance Sheet as at 31st March, 2021 is as follows: Liabilities ` Assets Building Less: Provision for Depreciation

`

2,00,000 10,000 1,90,000

It is decided that Building be valued at ` 1,71,000. The entry affecting Revaluation Account is: (a) Revaluation A/c

...Dr.

` 19,000

To Building A/c (b) Provision for Depreciation A/c

...Dr.

...Dr.

...Dr.

19,000

19,000

To Revaluation A/c (d) Revaluation A/c

19,000

19,000

To Revaluation A/c (c) Building A/c

`

19,000

19,000

To Provision for Depreciation A/c

19,000

(1) 8. When a partner retires and the remaining partners continue as partners in the business without payment being made to retiring partner, the retiring partner is entitled to (a) interest @ 6% p.a. on the amount due to him. (b) such share of the profits as may be attributable to amount due to him. (c) either of the above two at the option of the retiring partner. (d) interest @ 15% p.a. on the amount due to him.

(1)

9. Shiv, a partner, agreed to take the responsibility of completing dissolution at an agreed amount of ` 10,000 and was to bear the realisation expenses. Realisation expenses were ` 3,000 which were paid by the firm. Realisation Account will be debited by (a) ` 3,000.

(b) ` 10,000.

(c) ` 13,000.

(d) None of these.

(1)

10. X, Y and Z are partners sharing profits and losses in the ratio of 3 : 2 : 1. They decide to change their profit-sharing ratio to 2 : 2 : 1. To give effect to this new profit-sharing ratio, they valued goodwill at ` 1,50,000. What will be the Journal entry to record the above change?

M.93

Model Test Papers

` `

Y ’s Capital A/c

...Dr.

10,000

Z ’s Capital A/c

...Dr.

5,000

  (a)

To X’s Capital A/c (b)

Goodwill A/c

...Dr.

15,000

1,50,000

To X ’s Capital A/c

75,000

To Y ’s Capital A/c

50,000

To Z’s Capital A/c

25,000

X’s Capital A/c

...Dr.

60,000

Y ’s Capital A/c

...Dr.

60,000

Z ’s Capital A/c

...Dr.

30,000

(c)

(d)

To Goodwill A/c

X ’s Capital A/c

...Dr.

1,50,000

15,000

To Y ’s Capital A/c

10,000

To Z’s Capital A/c

5,000



(1)

11. Assets of the firm including fictitious assets of ` 35,000 are ` 4,35,000. Liabilities of the firm are ` 1,50,000. Normal rate of return is 10% and average profit of the firm is ` 40,000. Goodwill as per Capitalisation of Average Profit Method will be (a) ` 1,00,000.

(b) ` 1,25,000.

(c) ` 1,50,000.

(d) ` 2,00,000.

(1)

12. What balance does a Partner’s Current Account have? (a) Debit balance

(b) Credit balance

(c) Either (a) or (b) (d) None of these

(1)

13. Is rent paid to a partner an appropriation of profit? (a) Yes

(b) No

(c) If partner is a working partner

(d) If firm earns profit

(1)

14. From the following information, calculate the amount of subscriptions that will be shown in the credit of Income and Expenditure Account for the year ended 31st March, 2021: ` Subscriptions received during the year

80,000

Subscriptions outstanding on 31st March, 2020

16,000

Subscriptions outstanding on 31st March, 2021

9,000

Subscriptions received in advance on 31st March, 2020

12,000

Subscriptions received in advance on 31st March, 2021

7,000

Subscriptions of ` 8,000 are in arrears for the year ended 31st March, 2020.

M.94



An Aid to Accountancy—CBSE XII

Or During the year 2020–21, rent paid by Royal Sports Club was ` 65,000. From the following information, calculate the amount of rent to be shown in Income and Expenditure Account for the year ended 31st March, 2021 and Balance Sheet as on that date:

Particulars 1st April, 2020 31st March, 2021 ` ` Prepaid Rent 4,000 5,000 Outstanding Rent 8,000 7,000

(3) 15. Himanshu and Vikrant are partners in a firm. Their Balance Sheet as at 31st March, 2020 is as follows: BALANCE SHEET as at 31st March, 2020 Liabilities ` Assets Capitals: Fixed Assets Himanshu 2,00,000 Current Assets Vikrant 1,40,000 3,40,000 Creditors 60,000 4,00,000

` 3,60,000 40,000 4,00,000

During the year 2019–20, Himanshu’s Drawings were ` 30,000 and Vikrant’s Drawings were ` 40,000. During the year 2019–20, the firm earned profit of ` 1,00,000. While distributing profit for the year 2019–20, interest on capital @ 5% p.a. was not allowed and interest on drawings @ 12 % p.a. was not charged. Showing your workings, pass necessary rectifying entry. Or The partners of a firm distributed profit for the year ended 31st March, 2020 of ` 9,00,000 in the ratio of 3 : 2 : 1 without giving effect to the following: (i) A and B were to get salary of ` 3,750 each per quarter. (ii) B was to get commission of ` 45,000. (iii) B and C had guaranteed minimum profit of ` 3,50,000 p.a. to A. Profit was to be shared in the ratio of 3 : 3 : 2. Pass necessary Journal entry for the above adjustment in the books of the firm. (4) 16. Complete the following Journal entries:

JOURNAL

Date Particulars

L.F.

Dr. (`)

(1) (i)  Share Capital A/c ...Dr. ?    To  Forfeited Shares A/c    To  Calls-in-Arrears A/c (Forfeiture of 100 shares, ` 9 called-up, on which allotment money of ` 3 and first call money of ` 4 have not been received) (ii) ? ...Dr. ? ? ...Dr. ?   To ? (Reissue of 100 shares of ` 10 each fully paid-up at ` 8 each)

Cr. (`) ? ?

?

Model Test Papers

M.95

(2) (i) Share Capital A/c (100 × ` 9) ...Dr. 900 To Forfeited Shares A/c (100 × ` 2) To Calls-in-Arrears A/c (100 × ` 7) (Forfeiture of 100 shares, ` 9 called-up, on which allotment money of ` 3 and first call money of ` 4 have not been received)

200 700

(ii) ? ...Dr. ? To ? (Reissue of 100 forfeited shares of ` 10 each as fully paid-up at par)

?

(iii) ? ...Dr. ? To ? (?)

?



(4)

17. Balance Sheet of Ram, Shyam and Mohan, who were sharing profits in the ratio of 3 : 3 : 4, as on 31st March, 2020 was as follows: Liabilities ` Assets

`

Bills Payable 5,000 Cash 16,000 Loan 12,000 Bank 50,000 General Reserve 10,000 Stock 44,000 Capital A/cs: Furniture 47,000 Ram 60,000 Land and Building 60,000 Shyam 60,000 Goodwill 10,000 Mohan 80,000 2,00,000 2,27,000 2,27,000



Ram died on 30th June, 2020. The Partnership Deed provided for the following on the death of a partner:

(i) Goodwill of the firm be valued at two years’ purchase of average profit for the last three years. (ii) Share of profit or loss till the date of death was to be calculated on the basis of sales. Sales for the year ended 31st March, 2020 was ` 4,00,000 and that from 1st April to 30th June, 2020 ` 1,50,000. Profit for the year ended 31st March, 2020 was ` 1,00,000. (iii) Average profit of the last three years was ` 42,000.

Pass the necessary Journal entries to record the accounting treatment of goodwill, General Reserve , and Ram’s share of profit up to the date of death. (4)

18. Parul, Payal and Priyanka were partners. They dissolved their firm. Pass necessary Journal entries for the following after various assets (other than Cash and Bank) and the third party liabilities have been tansferred to Realisation Account: (i) There were Debtors of ` 76,000. A Provision for Doubtful Debts also stood in the books at ` 6,000. Debtors of ` 12,000 did not pay while the debtors for balance amount paid the due amount. (ii) An unrecorded machine was taken by Payal at ` 3,000, against its expected value of ` 5,000.

M.96

An Aid to Accountancy—CBSE XII

(iii) The firm had a debit balance of ` 27,000 in the Profit and Loss Account on the date of dissolution. (iv) Priyanka paid realisation expenses of ` 15,000 out of her pocket and she was to get a remuneration of ` 18,000 for completing the dissolution process. (4) 19. Following is the Receipts and Payments Account of Youth Stars’ Club for the year ended 31st March, 2020: Dr.

RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March, 2020

Cr.

Receipts ` Payments ` To Balance b/d: Cash at Bank To Donations To Life Membership Fees To Match Fund To Subscription To Lockers Rent To Interest on Investments To Sale of Furniture (Book value ` 8,000) To Entrance Fees

11,800 By 50,000 By 4,000 By 8,000 By 5,200 400 By 1,000 By 10,000 By 5,000



95,400

Building Match Expenses Furniture Investments (Purchased on 1.7. 2019 @ 10% p.a.) Salaries Sundry Expenses Balance c/d: Cash at Bank

40,000 9,000 12,100 16,000 7,000 820 10,480 95,400

Additional Information:

(i) During the year 2019–20, the Club had 55 members and each paying an annual subscription of ` 100.

(ii) Donations includes 90% towards Building Fund. (iii) Salaries outstanding as on 1st April, 2019 were ` 1,000 and as on 31st March, 2020 ` 500. (iv) Capital Fund as on 1st April, 2019: ` 10,800.

Prepare Income and Expenditure Account of the Club for the year ending 31st March, 2020 and Balance Sheet as on that date. (6)

20. (a) Moonlight Ltd. issued 5,000; 9% Debentures of ` 100 each at par and also took a loan of ` 8,00,000 from bank, which is collaterally secured by ` 10,00,000; 9% Debentures of ` 100 each. How will be debentures and loan shown in the Balance Sheet of the company if the company has passed an entry for issue of debentures as collateral security in the books? (b) Max Ltd. issued 2,000, 12% Debentures of ` 100 each on 1st April, 2019. The issue was fully subscribed. According to the terms of issue, interest on the debentures is payable half-yearly on 30th September and 31st March and the tax deducted at source is 10%. Pass necessary Journal entries related to the debenture interest for the half-year ending 31st March, 2020 and transfer of interest on debentures of the year to the Statement of Profit and Loss. (2 + 4 = 6)

Model Test Papers

M.97

21. Ram and Mohan are partners sharing profits and losses in the ratio of 4 : 1. Their Balance Sheet on 31st March, 2020 was as follows: Liabilities ` Assets Creditors 1,20,000 Building General Reserve 1,00,000 Machinery Capital Accounts: Furniture Ram 4,80,000 Stock Mohan 1,20,000 6,00,000 Debtors 80,000 Less: Provision for Doubtful Debts 8,000 Profit and Loss Account Bank 8,20,000

` 3,40,000 1,50,000 1,10,000 90,000 72,000 22,000 36,000 8,20,000

On 1st April, 2020, they take Shyam into partnership for 1/3rd share in the profits of firm on the following terms: (i) Shyam brings ` 2,00,000 as capital and ` 60,000 as goodwill. (ii) A discounted bill of exchange of ` 4,000 was dishonoured but no entry had been passed for that. (iii) Provision for Doubtful Debts is to be made at 10%. (iv) Furniture is taken by Mohan for ` 90,000. (v) Expense of ` 5,400 debited to Profit and Loss, were the personal expenses of Ram. (vi) The new profit-sharing ratio is agreed at 4 : 2 : 3. Pass the necessary Journal entries for the above transactions. Or Balance Sheet of Amit, Sumit and Namit who were sharing profits in the ratio of 5 : 3 : 2 is given below as on 1st April, 2020: Liabilities ` Assets Amit’s Capital 7,20,000 Factory Building Sumit’s Capital 4,15,000 Machinery Namit’s Capital 3,45,000 Furniture General Reserve 1,80,000 Stock Sundry Creditors 1,24,000 Sundry Debtors Outstanding Expenses 16,000 Cash at Bank 18,00,000

` 7,80,000 4,65,000 77,000 1,85,000 1,72,000 1,21,000 18,00,000

Sumit retired on the above the date and following adjustments are agreed upon on his retirement: (i) Stock was valued at ` 1,72,000. Furniture was undervalued by ` 3,000. (ii) An amount of ` 10,000 due from Rajesh was doubtful and a provision for the same was required. (iii) Goodwill of the firm was valued at ` 2,00,000. (iv) Sumit was paid ` 40,000 on retirement by cheque and the balance was transferred to his loan account. (v) Amit and Namit were to share future profits in the ratio of 3 : 2. Prepare Revaluation Account, Capital Accounts and Balance Sheet of the new firm. (8)

M.98

An Aid to Accountancy—CBSE XII

22. Janta Ltd. invited applications for issuing 1,60,000 equity shares of ` 10 each at a premium of ` 3 per share. The amount was payable as follows: On Application

— ` 6 per share (Including premium ` 1);

On Allotment

— ` 3 per share (Including premium ` 1); and

On First and Final call — The balance. Applications for 1,80,000 shares were received. Applications for 10,000 shares were rejected and pro rata allotment was made to the remaining applicants. Over payment received on application was adjusted towards sums due on allotment. All calls were made and were duly received except allotment and final call from Aditya who was allotted 3,200 shares. His shares were forfeited. Half of the forfeited shares were reissued for ` 43,000 as fully paid-up. Pass necessary Journal entries for the above transactions in the books of Janta Ltd. Or

Kinderjoy Ltd. invited applications for issuing 27,000 shares of ` 100 each payable as follows:

On Application—` 50 per share On Allotment—` 10 per share On First and Final Call—Balance Applications were received for 40,000 shares. Full allotment was made to the applicants of 7,000 shares. The remaining applicants were allotted 20,000 shares on pro rata basis. Excess money received on application was adjusted towards allotment and call. Asha, holding 600 shares belonging to the category of applicants to whom full allotment was made, paid the call money at the time of allotment. Ankur, who belonged to the category of applicants to whom shares were allotted on pro rata basis did not pay after application on his 200 shares. Ankur’s shares were forfeited after the first and final call. These shares were later reissued at ` 105 per share as fully paid-up. Pass necessary Journal entries in the books of Kinderjoy Ltd. for the above transactions, by opening Calls-in-Arrears and Calls-in-Advance Accounts wherever necessary. (8)

PART B ANALYSIS OF FINANCIAL STATEMENTS 23. Cash transactions that change the size and composition of the owners’ capital and borrowings of the enterprise are shown as ___________. (a) Financing Activities. (b) Operating Activities. (c) Investing Activities. (d) None of these. (1) 24. Classify the following activities as (i) Operating Activities; (ii) Investing Activities; and (iii) Financing Activities: (a) Payment of Dividend. (b) Sale of Land. (c) Payment of Income Tax. (1)

M.99

Model Test Papers

25. If Debt-equity Ratio is 2, which of the transactions will increase the ratio, state the reason: (a) Sale of a Fixed Asset (Book value ` 40,000) at a loss of ` 10,000. (b) Sale of a Fixed Asset (Book value ` 40,000) for ` 50,000. (c) Sale of a Fixed Asset (Book value ` 40,000) for ` 40,000. (d) Issue of bonus shares.

(1)

26. Name the aggregate of Cost of Revenue from Operations and other Operating Expenses: (a) Gross Profit.

(b) Operating Profit.

(c) Operating Cost. (d) Net Profit before Interest and Tax. (1) 27. Which of the following is correct? (a) Time Series Analysis involves the comparison of actual ratios of one firm with those of other similar firm belonging to the same industry. (b) Cross Sectional Analysis involves the comparison of actual ratios of one period with those of earlier periods for the same enterprise. (c) The qualitative elements like quality of management and quality of labour force are ignored in analysis of financial statements. (d) Current Liabilities = Current Assets + Working Capital.

(1)

28. Young Stars India Ltd. has a Gross Profit Ratio of 20%. To maintain this ratio at 30%, management may (a) Increase selling price of stock. (b) Reduce Cost of Revenue from Operations. (c) Increase selling price of Stock-in-trade and reduce Cost of Revenue from Operations. (d) All of the above.

(1)

29. Fill-in-the blanks: ___________ is the ___________ analysis of Balance Sheet in which total of assets is taken as ___________ and all other figures of assets and liabilities are expressed as ___________ of total assets figure. (1) 30. Current Ratio 2.5, Quick Ratio 1.5, Working Capital ` 1,20,000. Calculate Current Assets, Current Liabilities and Quick Assets. Or

State with reason whether the following transactions will increase, decrease or not change the ‘Return on Investment’ (ROI): (i) Purchase of machinery of ` 10,00,000 by issue of equity shares.

(ii) Charging depreciation of ` 1,00,000. (iii) Redemption of Debentures in cash ` 5,00,000.

(3)

M.100

An Aid to Accountancy—CBSE XII

31. From the following information, prepare Comparative Statement of Profit and Loss: Particulars Cost of Materials Consumed

31st March, 2020 31st March, 2019 ` 13,44,000

` 6,00,000

Revenue from Operations (% of Materials Consumed)

125%

200%

Other Expenses (% of Operating Revenue)

10%

10%

Tax Rate

50%

50%

Or

(a) Mention the items under which Fixed Assets are further classified.

(b) Show the major headings under the Equity and Liabilities side of the Balance Sheet of a company as per Schedule III of the Companies Act, 2013. (c) Give the meaning of ‘Long-term Provisions’. (d) What is Contingent Liability?

(4)

32. Prepare a Cash Flow Statement (as per AS–3) for the year ended 31st March, 2020 from the following Balance Sheet and additional information: BALANCE SHEET OF KRISHNA LTD. as at 31st March, 2020 Particulars Note No. 31st March, 31st March, 2020 (`) 2019 (`) I. EQUITY AND LIABILITIES 1. Shareholders’ Funds (a) Share Capital (b) Reserves and Surplus

1

5,00,000 3,20,000

4,00,000 2,50,000

2. Non-Current Liabilities Long-term Borrowings

2

2,00,000

1,00,000

3. Current Liabilities Trade Payables

1,50,000

90,000



Total

11,70,000 8,40,000

II. ASSETS 1. Non-Current Assets (a) Fixed Assets—Tangible 3 (b) Non-Current Investments

7,00,000 70,000

5,00,000 50,000

2. Current Assets (a) Inventories (b) Trade Receivables (c) Cash and Bank Balances

60,000 1,20,000 2,20,000

90,000 70,000 1,30,000

Total

11,70,000

8,40,000

M.101

Model Test Papers Notes to Accounts Particulars

31st March, 31st March, 2020 (`)

2019 (`)

1. Reserves and Surplus Securities Premium Reserve

5,000

...

General Reserve

1,00,000

80,000

Surplus, i.e., Balance in Statement of Profit and Loss

2,15,000

1,70,000



3,20,000

2,50,000

2,00,000

1,00,000

Machinery (Cost)

8,50,000

6,10,000

Less: Accumulated Depreciation

1,50,000

1,10,000



7,00,000

5,00,000

2. Long-term Borrowings 10% Debentures 3. Fixed Assets—Tangible

Additional Information: (a) Machinery costing ` 1,00,000 (Accumulated Depreciation ` 70,000) was sold at a loss of 20%. (b) Equity Shares were issued at a premium of 15% on 1st April, 2019. (c) Additional debentures were issued on 1st October, 2019 at a discount of 10%. The company wrote off the discount on issue of debentures from Securities Premium Reserve. (d) Interim dividend paid during the year was ` 25,000.

(6)

M.102

An Aid to Accountancy—CBSE XII

Answers PART A 1. Fixed Capital Account does not show debit balance. Fluctuating Capital Account, on the other hand, may show credit or debit balance. 2. (c) Debentures issued at a discount can be redeemed at a premium. 3. (a) ` 100. 4. (b) Crediting Revaluation Account. 5. (b) Revenue Receipts, Income and Expenditure Account. 6. (c) Gaining ratio. 7. (a) Revaluation A/c ...Dr. 19,000 To Building A/c

19,000

8. (c) Either of the above two at the option of the retiring partner. 9. (b) ` 10,000. 10.

` `

  (a) Y ’s Capital A/c ...Dr. 10,000 Z ’s Capital A/c ...Dr. 5,000 To X’s Capital A/c

15,000

Working Note: (i) Calculation of Gain or Sacrifice of Partners: Sacrifice share = Old Profit Share – New Profit Share

X =

15 – 12 3 3 2 – = = , i.e., sacrifice 30 30 6 5



Y =

10 – 12  2  2 2 – = =   , i.e., gain  30  30 6 5



Z =

1 1 5–6  1  – = =   , i.e., gain  30  6 5 30

X is a sacrificing partner while Y and Z are gaining partners. (ii) Compensation payable by Y to X = ` 1,50,000 × 2/30 = ` 10,000. Compensation payable by Z to X = ` 15,00,000 × 1/30 = ` 5,000.

11. (c) ` 1,50,000. Working Note: Goodwill = Capitalised Value* – Net Assets** = ` 4,00,000 – ` 2,50,000 = ` 1,50,000

*Capitalised Value = Average Profit × 100/Normal Rate of Return



= ` 40,000 × 100/10 = ` 4,00,000.

**Net Assets = All Assets (Other than goodwill, fictitious assets and Non-trade Investments) at their Current Value – Outsiders’ Liabilities.

= ` 4,35,000 – ` 35,000 – ` 1,50,000 = ` 2,50,000.

M.103

Model Test Papers

12. (c) Either (a) or (b). 13. (b) No. Note: Rent paid to a partner is charge against profit. 14. Amount of Subscriptions to be Credited to Income and Expenditure Account: ` ` Subscriptions received during the year Add: Subscriptions received in advance on 31st March, 2020

Subscriptions outstanding on 31st March, 2021

80,000 12,000 9,000

21,000

1,01,000 Less: Subscriptions outstanding on 31st March, 2020

Subscriptions received in advance on 31st March, 2021

16,000 7,000

23,000

Subscriptions to be Credited to Income and Expenditure Account 78,000

Note: Subscription outstanding as on 31st March, 2021 includes total amount of subscription due as on that date. It means, it also includes ‘Subscription of ` 8,000 still in arrears for the year ended 31st March, 2020. It has no effect on subscription for the year.

Or Rent to be debited to Income and Expenditure Account: = Rent paid during the year + Prepaid of rent (opening) – Prepaid rent (closing) + Outstanding rent (closing) – Outstanding rent (opening). = ` 65,000 + ` 4,000 – ` 5,000 + ` 7,000 – ` 8,000 = ` 63,000. Alternate Method: Dr.

RENT ACCOUNT Cr.

Particulars ` Particulars ` To Balance b/d (Opening prepaid) To Bank A/c (Rent paid during the year) To Balance c/d (Closing outstanding)

4,000 By Balance b/d (Opening outstanding) 65,000 By Income and Expenditure A/c (Bal. Fig.) 7,000 By Balance c/d (Closing prepaid) 76,000

8,000 63,000 5,000 76,000

Note: Opening prepaid rent is an asset thus, is shown on the Dr. side of Rent A/c. Opening outstanding rent is a liability thus, is shown on the Cr. side of Rent A/c and closing balance is shown on the Dr. side of Rent A/c. Dr.

INCOME AND EXPENDITURE ACCOUNT for the year ended 31st March, 2021

Expenditure ` Income To Rent A/c

Cr. `

63,000

AN EXTRACT OF BALANCE SHEET as at 31st March, 2021

Liabilities ` Assets

`

Outstanding Rent

5,000

7,000

Prepaid Rent

M.104 15.

An Aid to Accountancy—CBSE XII RECTIFYING JOURNAL ENTRY

Date Particulars

L.F.

Dr. (`)

Cr. (`)

2020 April 1 Vikrant’s Capital A/c ...Dr. 1,550 To Himanshu’s Capital A/c (Adjustment of interest on capital and interest on drawings for previous year)

1,550

Working Notes: 1.

CALCULATION OF OPENING CAPITAL

Particulars Himanshu Vikrant ` ` Closing Capital Add: Drawings Less: Profit already Distributed Opening Capital 2.

2,00,000 1,40,000 30,000 40,000 2,30,000 1,80,000 50,000 50,000 1,80,000 1,30,000 STATEMENT SHOWING ADJUSTMENT

Particulars Himanshu

Dr. (`)

Vikrant

Cr. (`)

Dr. (`)

Firm Cr. (`)

Dr. (`)

Cr. (`)

Profit already distributed, now taken back 50,000 ... 50,000 ... ... 1,00,000 Interest on Capital ... 9,000 ... 6,500 15,500 ... Interest on Drawings 1,800 ... 2,400 ... ... 4,200 Profit (` 1,00,000 + ` 4,200 – ` 15,500) ... 44,350 ... 44,350 88,700 ... 51,800 53,350 52,400 50,850 1,04,200 1,04,200 Net Effect

1,550 (Cr.)

1,550 (Dr.)

Nil

Calculation of Interest on Capital: For Himanshu = ` 1,80,000 × 5/100 = ` 9,000; For Vikrant = ` 1,30,000 × 5/100 = ` 6,500. Calculation of Interest on Drawings: For Himanshu = ` 30,000 × 12/100 × 6/12 = ` 1,800; For Vikrant = ` 40,000 × 12/100 × 6/12 = ` 2,400. 3. Since the date of drawings is not given, therefore, the interest on drawings is to be calculated for 6 months. 4. Since Profit-sharing Ratio is not given, it will be equal.

Or JOURNAL Date Particulars

L.F.

Dr. (`)

A’s Capital A/c ...Dr. 85,000 To B’s Capital A/c To C’s Capital A/c (Adjustment entry passed for omission of salary, commission and change in profit-sharing ratio of 3 : 3 : 2 among partners)

Cr. (`) 45,000 40,000

M.105

Model Test Papers Working Note: Dr.

ADJUSTED PROFIT AND LOSS ACCOUNT Cr.

Particulars ` Particulars ` To Salary: By Profit and Loss A/c (Profit) 9,00,000 A’s Capital A/c (` 3,750 × 4) 15,000 B’s Capital A/c (` 3,750 × 4) 15,000 30,000 To Commission: B’s Capital A/c 45,000 To Profit transferred to: A 3,50,000 B* 2,85,000 C* 1,90,000 8,25,000 9,00,000 9,00,000 * After salary, commission and guaranteed profit of ` 3,50,000 p.a. to A, remaining profit of ` 4,75,000 is distributed between B and C in the ratio of 3 : 2. ADJUSTMENT TABLE A (`) B (`)

Particulars

Amount already recorded (credited) (` 9,00,000 in 3 : 2 : 1) Amount to be recorded (credited) (Profit + Salary + Commission) Difference

16.

4,50,000 3,65,000 85,000 Less (Dr.)

C (`)

3,00,000 3,45,000 45,000

1,50,000 1,90,000 40,000

Excess (Cr.)

Excess (Cr.)

JOURNAL

Date Particulars

L.F.

Dr. (`)

(1) (i) Share Capital A/c (100 × ` 9) ...Dr. 900 To Forfeited Shares A/c (100 × ` 2) To Calls-in-Arrears A/c (100 × ` 7) (Forfeiture of 100 shares, ` 9 called-up, on which allotment money of ` 3 and first call money of ` 4 have not been received)

Cr. (`) 200 700

(ii) Bank A/c (100 × ` 8) ...Dr. 800 Forfeited Shares A/c (100 × ` 2) ...Dr. 200 To Share Capital A/c (100 × ` 10) 1,000 (Reissue of 100 shares of ` 10 each fully paid-up at ` 8 each) (2) (i) Share Capital A/c (100 × ` 9) ...Dr. 900 To Forfeited Shares A/c (100 × ` 2) To Calls-in-Arrears A/c (100 × ` 7) (Forfeiture of 100 shares, ` 9 called-up, on which allotment money of ` 3 and first call money of ` 4 have not been received)

200 700

(ii) Bank A/c (100 × ` 10) ...Dr. 1,000 To Share Capital A/c (100 × ` 10) 1,000 (Reissue of 100 forfeited shares of ` 10 each as fully paid-up at par) (iii) Forfeited Shares A/c ...Dr. 200 To Capital Reserve A/c 200 (Gain on reissue transferred to Capital Reserve)

M.106 17.

An Aid to Accountancy—CBSE XII JOURNAL

Date Particulars

L.F.

Dr. (`)

Ram’s Capital A/c ...Dr. 3,000 Shyam’s Capital A/c ...Dr. 3,000 Mohan’s Capital A/c ...Dr. 4,000 To Goodwill A/c (Existing goodwill written off) Shyam’s Capital A/c ...Dr. 10,800 Mohan’s Capital A/c ...Dr. 14,400 To Ram’s Capital A/c (WN 2) (Ram’s share of goodwill adjusted)

Cr. (`)

10,000

25,200

General Reserve A/c ...Dr. 10,000 To Ram’s Capital A/c To Shyam’s Capital A/c To Mohan’s Capital A/c (Distribution of General Reserve)

3,000 3,000 4,000

Profit and Loss Suspense A/c ...Dr. 11,250 To Ram’s Capital A/c (WN 1) (Ram’s share of profit till date of death recorded)

11,250

Working Notes: 1. Share of Profit = ` 1,00,000 × ` 1,50,000/` 4,00,000 × 3/10 = ` 11,250. 2. Adjustment of Goodwill: Average Profit of last 3 years = ` 42,000 Firm’s Goodwill = ` 42,000 × 2 = ` 84,000 Ram’s share of Goodwill = ` 84,000 × 3/10 = ` 25,200, which is to be contributed by Shyam and Mohan in their gaining ratio of 3 : 4.

18.

JOURNAL

Date Particulars

L.F.

Dr. (`)

Cr. (`)

(i) Bank A/c ...Dr. 64,000 To Realisation A/c (Debtors of ` 12,000 did not pay while the remaining paid the amount)

64,000

(ii) Payal’s Capital A/c ...Dr. 3,000 To Realisation A/c (Unrecorded machine taken by Payal)

3,000

(iii) Parul’s Capital A/c ...Dr. 9,000 Payal’s Capital A/c ...Dr. 9,000 Priyanka’s Capital A/c ...Dr. 9,000 To Profit and Loss A/c (Accumulated loss distributed in their profit-sharing ratio) (iv) Realisation A/c ...Dr. 33,000 To Priyanka’s Capital A/c (Note) (Realisation expenses of ` 15,000 paid by Priyanka and remuneration of ` 18,000 also credited to her account)

27,000

33,000

Note: Priyanka is getting remuneration (salary) of ` 18,000 for completing the dissolution process. Question is silent on who is to bear the dissolution expenses. Therefore, firm will bear the expenses. Since Priyanka has paid the expenses, her Capital Account is credited.

M.107

Model Test Papers

19. Dr.

Youth Stars’ Club INCOME AND EXPENDITURE ACCOUNT for the year ended 31st March, 2020

Cr.

Expenditure ` Income

`

To Salaries 7,000 By Donations (10/100 × ` 50,000) Add: Outstanding Salaries (31.3.2020) 500 By Subscription 5,200 7,500 Add:  Subscription Due (Note 1) 300 Less: Outstanding Salaries (1.4.2019) 1,000 6,500 By Locker’s Rent To Sundry Expenses 820 By Gain (Profit) on Sale of Furniture To Match Expenses (Note 3) (` 9,000 – ` 8,000) 1,000 (` 10,000 – ` 8,000) To Surplus, i.e., Excess of Income over Expenditure 10,780 By Entrance Fees By Interest on Investments 1,000 Add:  Accrued Interest (Note 2) 200

5,000 5,500 400 2,000 5,000 1,200

19,100 19,100 BALANCE SHEET as at 31st March, 2020



Liabilities ` Assets

`

Outstanding Salaries 500 Building Fund: Donations (` 50,000 – ` 5,000) 45,000 Less: Transfer to Capital Fund 40,000 5,000 Capital Fund: Opening Balance 10,800 Add: Surplus 10,780 Life Membership Fees 4,000 Transfer from Building Fund 40,000 65,580

10,480 40,000 16,000 4,100 200 300



Cash at Bank Building in Progress Investments Furniture Accrued Interest on Investments Subscription Receivable

71,080

71,080

Notes: 1. Subscription for 2019–20 [55 × ` 100] Less:  Subscription received during the year Subscription Due (2019–20)

` 5,500 5,200 300

2. Interest earned on Investments [` 16,000 × 10/100 × 9/12] Less: Interest received during the year Accrued Interest but not received

1,200 1,000 200







3. Match Fund is ` 8,000 whereas Match Expenses are ` 9,000, the difference is adjusted through Income and Expenditure Account.

20. (a)

AN EXTRACT OF BALANCE SHEET OF MOONLIGHT LTD. as at ...

Particulars I. EQUITY AND LIABILITIES Non-Current Liabilities Long-term Borrowings

Note No.

1

`

13,00,000

M.108

An Aid to Accountancy—CBSE XII

Note to Accounts Particulars ` 1. Long-term Borrowings 5,000; 9% Debentures of ` 100 each Loan from Bank 10,000; 9% Debentures of ` 100 each issued as Collateral Security 10,00,000 Less: Debentures Suspense A/c 10,00,000

(b)

5,00,000 8,00,000 ... 13,00,000

In the Books of Max Ltd. JOURNAL

Date Particulars

L.F.

Dr. (`)

2020 March 31 Interest on Debentures A/c (` 2,00,000 × 12/100 × 6/12) ...Dr. 12,000 To Debentureholders’ A/c (` 12,000 × 90%) To TDS Payable A/c (` 12,000 × 10%) (Hald-yearly interest due on debentures and tax deducted at source)

Cr. (`)

10,800 1,200

March 31 Debentureholders’ A/c ...Dr. 10,800 To Bank A/c (Payment of interest on debentures)

10,800

March 31 TDS Payable A/c ...Dr. 1,200 To Bank A/c (TDS deposited with income tax authorities)

1,200

March 31 Statement of Profit and Loss ...Dr. 24,000 To Interest on Debentures A/c (Yearly interest on debentures transferred to Statement of Profit and Loss)

24,000

21.

JOURNAL

Date Particulars

L.F.

Dr. (`)

Bank A/c ...Dr. 2,60,000 To Shyam’s Capital A/c To Premium for Goodwill A/c (Amount brought in towards capital and goodwill) Mohan’s Capital A/c (` 1,80,000 × 1/45) ...Dr. 4,000 Premium for Goodwill A/c ...Dr. 60,000 To Ram’s Capital A/c (` 1,80,000 × 16/45) (New partner’s share of goodwill credited to sacrificing partners (WN 1) General Reserve ...Dr. 1,00,000 To Ram’s Capital A/c To Mohan’s Capital A/c (General Reserve distributed among partners) Ram’s Capital A/c ...Dr. 17,600 Mohan’s Capital A/c ...Dr. 4,400 To Profit and Loss A/c (Debit balance of Profit and Loss A/c transferred to Capital Accounts)

Cr. (`) 2,00,000 60,000

64,000

80,000 20,000

22,000

M.109

Model Test Papers Revaluation A/c ...Dr. 20,400 To Provision for Doubtful Debts (WN 2) To Furniture A/c (WN 3) (Provision for doubtful debts credited and loss on furniture recorded)

400 20,000

Debtor’s A/c (WN 2) ...Dr. 4,000 To Bank A/c (Discounted bill dishonoured)

4,000

Mohan’s Capital A/c ...Dr. 90,000 To Furniture A/c (Furniture taken over by Mohan)

90,000

Ram’s Capital A/c ...Dr. 5,400 To Revaluation A/c (WN 4) (Ram’s personal expenses debited to Profit and Loss Account, now rectified) Ram’s Capital A/c ...Dr. 12,000 Mohan’s Capital A/c ...Dr. 3,000 To Revaluation A/c (Loss on revaluation distributed between partners in their old profit-sharing ratio)

5,400

15,000

Working Notes: 1. Ram’s sacrifice = 4/5 – 4/9 = 16/45, Mohan’s gain = 1/5 – 2/9 = (1/45), Firm’s goodwill = ` 60,000 × 3/1 = ` 1,80,000. 2. On dishonour of discounted bill, Debtors Account will be debited, i.e., debtors will increase by ` 4,000 and Bank Account will be credited. Provision for Doubtful Debts will be created on debtors after adding amount of dishonoured bill.

Provision for Doubtful Debts = 10% of ` 84,000 (= ` 80,000 + ` 4,000)

= ` 8,400 Less: Existing Provision Doubtful Debts = ` 8,000 ` 400 3. Book value of furniture is ` 1,10,000. However, it is taken by Mohan at ` 90,000. Therefore, Dr. Revaluation A/c and Cr. Furniture A/c by ` 20,000 to record the loss on furniture. 4. Ram’s personal expenses were met by the firm. Therefore, it will reduce Ram’s Capital and hence, his Capital A/c will be debited. Revaluation Account will be credited as it is a gain for the firm.

Or Dr.

REVALUATION ACCOUNT Cr.

Particulars ` Particulars ` To Stock A/c 13,000 By Furniture A/c To Provision for Doubtful Debts A/c 10,000 By Loss on Revaluation transferred to: Amit 10,000 Sumit 6,000 Namit 4,000 23,000

3,000

20,000 23,000

M.110 Dr. Particulars

An Aid to Accountancy—CBSE XII Cr.

PARTNERS’ CAPITAL ACCOUNTS Amit (`) Sumit (`) Namit (`)

Particulars

Amit (`) Sumit (`) Namit (`)

To Revaluation A/c (Loss) 10,000 6,000 4,000 By Balance b/d 7,20,000 4,15,000 3,45,000 To Sumit’s Capital A/c 20,000 ... 40,000 By General Reserve A/c 90,000 54,000 36,000 To Bank A/c ... 40,000 ... By Amit’s Capital A/c (WN) ... 20,000 ... To Sumit’s Loan A/c ... 4,83,000 ... By Namit’s Capital A/c (WN) ... 40,000 ... To Balance c/d 7,80,000 ... 3,37,000 8,10,000 5,29,000 3,81,000 8,10,000 5,29,000 3,81,000 BALANCE SHEET as at 1st April, 2013 Liabilities ` Assets Capitals: Factory Building Amit 7,80,000 Machinery Namit 3,37,000 Furniture Sumit’s Loan 4,83,000 Stock Sundry Creditors 1,24,000 Debtors 1,72,000 Outstanding Expenses 16,000 Less: Provision for Doubtful Debts 10,000 Cash at Bank (` 1,21,000 – ` 40,000) 17,40,000

` 7,80,000 4,65,000 80,000 1,72,000 1,62,000 81,000 17,40,000

Working Note: (i) Sumit’s share of goodwill = ` 2,00,000 × 3/10 = ` 60,000. (ii) Amit’s gain = 3/5 – 5/10 = 1/10, Namit’s gain = 2/5 – 2/10 = 2/10, Gaining ratio of Amit and Namit = 1 : 2. (iii) Amit’s contribution for Sumit’s share of goodwill = ` 60,000 × 1/3 = ` 20,000. Namit’s contribution for Sumit’s share of goodwill = ` 60,000 × 2/3 = ` 40,000.

22.

JOURNAL OF JANTA LTD.

Date Particulars

L.F.

Dr. (`)

Cr. (`)

Bank A/c ...Dr. 10,80,000 To Equity Shares Application A/c (Application money received on 1,80,000 shares @ ` 6 per share)

10,80,000

Equity Shares Application A/c ...Dr. 10,80,000 To Equity Share Capital A/c (1,60,000 × ` 5) To Securities Premium Reserve (1,60,000 × ` 1) To Bank A/c (10,000 × ` 6) To Equity Shares Allotment A/c (Application money adjusted on allotment and surplus refunded)

8,00,000 1,60,000 60,000 60,000

Equity Shares Allotment A/c ...Dr. 4,80,000 To Equity Share Capital A/c (1,60,000 × ` 2) To Securities Premium Reserve (1,60,000 × ` 1) (Allotment money due on 1,60,000 shares @ ` 3)

3,20,000 1,60,000

Bank A/c (` 4,80,000 – ` 60,000 – ` 8,400*) (WN 1) ...Dr. 4,11,600 To Equity Shares Allotment A/c Or Bank A/c ...Dr. 4,11,600 Calls-in-Arrears A/c* ...Dr. 8,400 To Equity Shares Allotment A/c (Amount received on allotment except on 3,200 shares)

4,11,600

4,20,000

Model Test Papers

M.111

Equity Shares First and Final Call A/c ...Dr. 6,40,000 To Equity Share Capital A/c (1,60,000 × ` 3) To Securities Premium Reserve (1,60,000 × ` 1) (First and final call money due on 1,60,000 shares @ ` 4)

4,80,000 1,60,000

Bank A/c (` 6,40,000 – ` 12,800) ...Dr. 6,27,200 To Equity Shares First and Final Call A/c Or Bank A/c ...Dr. 6,27,200 Calls-in-Arrears A/c (3,200 × ` 4) ...Dr. 12,800 To Equity Shares First and Final Call A/c (First and final call money received except on 3,200 shares) Equity Share Capital A/c (3,200 × ` 10) ...Dr. 32,000 Securities Premium Reserve (3,200 × ` 2) ...Dr. 6,400 To Equity Shares Allotment A/c To Equity Shares First and Final Call A/c (3,200 × ` 4) To Forfeited Shares A/c Or Equity Share Capital A/c ...Dr. 32,000 Securities Premium Reserve A/c ...Dr. 6,400 To Calls-in-Arrears A/c To Forfeited Shares A/c (Forfeiture of 3,200 shares for non-payment of allotment and calls money)

6,27,200

6,40,000

8,400 12,800 17,200

21,200 17,200

Bank A/c ...Dr. 43,000 To Equity Share Capital A/c (1,600 × ` 10) To Securities premium Reserve A/c (Half of the forfeited shares, i.e., 1,600 shares reissued as fully paid-up

16,000 27,000

Forfeited Shares A/c ...Dr. 8,600 To Capital Reserve (WN 2) (Gain on 1,600 reissued shares transferred to Capital Reserve)

8,600

Working Notes: 1. Calculation of allotment money not paid by Aditya: Shares applied by Aditya = 3,200 × 1,70,000/1,60,000 = 3,400 shares. Excess money received on application (200 × ` 6) = ` 1,200 Money due on allotment (3,200 × ` 3)

` 9,600

Less: Excess money received on application adjusted on allotment

` 1,200

Amount not paid by Aditya on allotment

` 8,400

2. Amount to be transferred to Capital Reserve: Amount forfeited on reissue of Aditya’s 1,600 shares = ` 17,200 × 1,600/3,200 = ` 8,600 Since shares were reissued at premium, therefore, the amount of gain, i.e., ` 8,600 is to be transferred to Capital Reserve.

M.112

An Aid to Accountancy—CBSE XII

Or JOURNAL OF KINDERJOY LTD. Date Particulars

Bank A/c (40,000 × ` 50)



L.F.

...Dr.

Dr. (`) 20,00,000

To Equity Shares Application A/c



(Application money received on 40,000 shares @ ` 50 each)



Equity Shares Application A/c

...Dr.

Cr. (`)

20,00,000

20,00,000



To Equity Share Capital A/c (27,000 × ` 50)

13,50,000



To Equity Shares Allotment A/c (20,000 × ` 10)

2,00,000



To Calls-in-Advance A/c

4,50,000



(Application money transferred to share capital account and excess



transferred to share allotment and calls-in-advance)



Equity Shares Allotment A/c (27,000 × ` 10)



...Dr.

2,70,000

To Equity Share Capital A/c



(Allotment money due on 27,000 shares @ ` 10 each)



Bank A/c (WN 2)

...Dr.

2,70,000

94,000



To Equity Shares Allotment A/c

70,000



To Calls-in-Advance A/c (600 × ` 40)

24,000



(Allotment money received on 7,000 shares and call money received



in advance on 600 shares, balance already been received)



Equity Shares First and Final Call A/c (27,000 @ ` 40)



...Dr.

10,80,000

To Equity Share Capital A/c



(First and final call money due on 27,000 shares @ ` 40 each)



Bank A/c

...Dr.

6,02,500



Calls-in-Advance A/c (` 4,50,000 + ` 24,000)

...Dr.

4,74,000



Calls-in-Arrears A/c (WN 1)

...Dr.

3,500



To Equity Shares First and Final Call A/c



(First and final call money received except for ` 3,500 from Ankur)



Equity Share Capital A/c (200 × ` 10)

...Dr.

10,80,000

10,80,000

20,000



To Calls-in-Arrears A/c

3,500



To Forfeited Shares A/c

16,500



(200 shares forfeited for non-payment of balance call money)



Bank A/c (200 × ` 105)

...Dr.

21,000



To Equity Share Capital A/c (200 × ` 100)

20,000



To Securities Premium Reserve (200 × ` 5)

1,000



(200 forfeited shares reissued as fully paid-up @ ` 105 each)



Forfeited Shares A/c (WN 3)



...Dr.

16,500

To Capital Reserve A/c

(Gain on reissued shares transferred to Capital Reserve)

16,500

M.113

Model Test Papers Working Notes: 1. Calculation of allotment money not paid by Ankur: Number of shares applied by Ankur = 200 × 33,000/20,000 = 330 shares Excess money received on application [` 16,500 – ` 10,000 (200 × ` 50)] Less: Money due on allotment (200 × ` 10) Balance to be adjusted on first and final call Total money due on first and final call to be paid by Ankur (200 × ` 40) Less: Excess application money adjusted as above Money not paid by Ankur

` 6,500 2,000 4,500 8,000 4,500 3,500

2. Money received on allotment: Total amount due on allotment (27,000 × ` 10) Less: Excess application money adjusted Add: Money received in advance from Asha for first and final call (600 × ` 40) Money received on allotment

` 2,70,000 (2,00,000) 24,000 94,000

3. Since Ankur’s shares were reissued at premium fully paid-up, therefore, the entire amount of gain, i.e., ` 16,500 received on 330 shares @ ` 50 as application money is to be transferred to Capital Reserve.

PART B 23. (a) Financing Activities. 24. (a) Financing Activity. (b) Investing Activity. (c) Operating Activity. 25. (a) Sale of a fixed asset (Book value ` 40,000) at a loss of ` 10,000.

Reason: Equity is decreased by the amount of loss but debts remains unchanged.

26. (c) Operating Cost. 27. (c) The qualitative elements like quality of management and quality of labour force are ignored in analysis of financial statements. 28. (d) All of the above. 29. Common-size Balance Sheet, vertical, 100, percentage. 30. Current Ratio = 2.5 : 1 It means if Current Assets are 2.5, Current Liabilities are 1. Hence, Working Capital = 2.5 – 1 = 1.5 If Working Capital is 1.5, Current Assets are = 2.5 If Working Capital is 1, Current Assets are = 2.5/1.5 If Working capital is ` 1,20,000, Current Assets are = 2/5/1.5 × ` 1,20,000 = ` 2,00,000. Current Liabilities = ` 2,00,000 – ` 1,20,000 (Working Capital) = ` 80,000

Quick Ratio = Quick Assets/Current Liabilities 1.5/1 = Quick Assets/` 80,000 Quick Assets = 1.5 × ` 80,000 = ` 1,20,000.

M.114

An Aid to Accountancy—CBSE XII

Or Return on Investment Ratio =

Net Profit before Interest, Tax and Dividend × 100 Capital Employed

S. No. Effect on ROI

Main Head

(a)

Decrease

No change in Net Profit before Interest and Tax, but Capital Employed increases.

(b)

Decrease

Decrease in Net Profit before Interest and Tax and in Capital Employed.

(c)

No Change

No change in Net Profit before Interest and Tax and Capital Employed.

31.

COMPARATIVE STATEMENT OF PROFIT AND LOSS for the years ended 31st March, 2019 and 2020

Particulars Note No. 31st March, 31st March, Absolute Percentage 2019 (`) 2020 (`) Change (Increase/ Change (Increase/ Decrease) (`) Decrease) (%) (A) (B) (C = B – A) (D = C/A × 100) I. Revenue from Operations

12,00,000 16,80,000

4,80,000

40.00

II. Expenses: (a) Cost of Materials Consumed (b) Other Expenses Total Expenses

6,00,000 13,44,000 1,20,000 1,68,000 7,20,000 15,12,000

7,44,000 48,000 7,92,000

124.00 40.00 110.00

III. Net Profit before Tax (I – II) IV. Less: Tax @ 50% V. Net Profit after Tax (III – IV)

4,80,000 1,68,000 (3,12,000) 2,40,000 84,000 (1,56,000) 2,40,000 84,000 (1,56,000)

(65.00) (65.00) (65.00)

Note: 1. Revenue from Operations: 2018–19 = ` 6,00,000 × 200/100 = ` 12,00,000. 2019–20 = ` 13,44,000 × 125/100 = ` 16,80,000. 2. Other Expenses: 2018–19 = ` 12,00,000 × 10/100 = ` 1,20,000. 2019–20 = ` 16,80,000 × 10/100 = ` 1,68,000.

Or (a) (i) Tangible Assets, (ii) Intangible Assets, (iii) Capital Work-in-Progress, (iv) Intangible Assets under Development. (b) (i) Shareholders’ Funds; (ii) Share Application Money pending Allotment, (iii) Non-current Liabilities, (iv) Current Liabilities. (c) Provisions for which the related claims are expected to be settled after 12 months or the period of operating cycle from the date of Balance Sheet are classified as Long-term Provisions. (d) Contingent Liability is a liability which may or may not arise because it is dependent on happening of an event in future.

M.115

Model Test Papers

32.

CASH FLOW STATEMENT for the year ended 31st March, 2020

Particulars 

` `

I. Cash Flow from Operating Activities A. Net Profit before Tax (WN 1)

90,000

Adjustment for Non-cash and Non-operating Items: Depreciation (WN 3)

1,10,000

Loss on Sale of Machinery (WN 2)

6,000

Interest on Debentures

15,000

[(1 1,00,000 × 10/100 = ` 10,000) + (` 1,00,000 × 10/100 × 6/12 = ` 5,000)] B. Operating Profit before Working Capital changes

2,21,000

Adjustment for Change in Current Assets and Current Liabilities: Increase in Trade Payables

60,000

Decrease in Inventories

30,000

Increase in Trade Receivables

(50,000)

Cash Flow from Operating Activities 2,61,000 II. Cash Flow from Investing Activities Purchase of Machinery

(3,40,000)

Proceeds from Sale of Machinery

24,000

Purchase of Non-current Investments

(20,000)

Cash Used in Investing Activities (3,36,000) III. Cash Flow from Financing Activities Proceeds from Issue of Shares (` 1,00,000 + ` 15,000)

1,15,000

Proceeds from Issue of Debentures (` 1,00,000 – ` 10,000)

90,000

Interest paid on Debentures

(15,000)

Interim on Dividend

(25,000)

Cash Flow from Financing Activities

1,65,000

IV. Net Increase in Cash and Cash Equivalents 90,000 V. Opening Cash and Cash Equivalents (Cash and Bank) 1,30,000 VI. Closing Balance of Cash and Cash Equivalents 2,20,000 Working Notes: 1. Calculation of Net Profit before Tax:

`

Closing Balance of Statement of Profit and Loss

2,15,000

Less: Opening Balance of Statement of Profit and Loss

1,70,000



45,000

Add: Transfer to General Reserve

20,000



25,000

Interim Dividend

Net Profit before Tax

90,000

M.116

An Aid to Accountancy—CBSE XII

2. Dr.

MACHINERY ACCOUNT Cr.

Particulars ` Particulars ` To Balance b/d 6,10,000 By Accumulated Depreciation A/c 70,000 To Bank A/c (Purchase) (Balancing Figure) 3,40,000 By Bank A/c (Sale Proceeds)* 24,000 By Loss on Sale of Machinery A/c 6,000 (Statement of Profit and Loss) By Balance c/d 8,50,000 9,50,000 9,50,000 *Book value of Machinery on the date of sale (` 1,00,000 – ` 70,000) Less: Loss on Sale (20% of ` 30,000) Sale Proceeds 3. Dr.

` 30,000 6,000 24,000

ACCUMULATED DEPRECIATION ACCOUNT Cr.

Particulars ` Particulars ` To Machinery A/c 70,000 By Balance b/d 1,10,000 To Balance c/d 1,50,000 By Statement of Profit and Loss 1,10,000 (Depreciation Provided) (Balancing Figure) 2,20,000 2,20,000 4. Discount on issue of debentures has been adjusted from Securities Premium Reserve as per Section 52(2) of the Companies Act, 2013. The balance of ` 5,000 in Securities Premium Reserve is after writing off Discount on Issue of Debentures of ` 10,000.

Model Test Paper 1 Time

Allowed:

3 Hours

Max. Marks: 80

General Instructions:

1, This question paper contains lwo Parts A and B. 2. Part A is compulsory for all. 3. Part B has tuwo options--Analysis of Financial Statements and Computerised

Accounting. Attempt only one option of PartB. 4. All parts of a question should be attempted at one place. 5. There is no overall choice. However, an internal choice has been provided in 2 questions

of three marks, 2 questions of four marks and 2 questions of eight marks.

PART A ACCOUNTING FOR NOT-FOR-PROFIT ORGANISATIONS,

PARTNERSHIP FIRMS AND COMPANIES 1. Which of the following is not on essential element of a partnership? (a) At least two persons. (6) There is an agreement between all partners.

c) Partnership agreement is for a business. (d) Equal share of profits and losses.

(1)

2. Unless agreed otherwise, it is presumed that (a) an incoming partner gets his share from all the old partners equally. (6) an incoming partner gets his share from all the old partners in their

profit-sharing ratio. (c) an incoming partner gets his share from all the old partners in an agreed ratio. (d) None of the above.

(1)

3. Pick the odd one out:

a) Admission of a partner. (6) Retirement/Death of a partner.

(c) Change in Profit-sharing ratio. (d) Dissolution of a partnership firm.

(1)

4. Which of the following should be deducted from the share capital to determine

Paid-up share capital? (a) Calls-in-Advance. (b) Calls-in-Arrears. (c) Balance of forfeited shares account.

(d) Capital Reserve.

(1)

An Aid to M.2 ended 31st

March,

Accountancy-CBSE XII 2020

was

00 3,00,000.

7

2

received during the year 5. Subscription le (Closin (Closing) 25,000 and Subseription Receivable was Subscription Receivable (Opening) the amount of subscription credited to Income and 45,000. What will be was the year ended 31st March, 2020? Expenditure Account for (b)3,25,000 (a) 7 3,20,000

(d) 2,25,000

c)3,45,000

(1)

retired from the firm on 1st April, 2020 are partners. Savita 6. Kavita, Savita and Ritika books at 1,10,000 having market valueof investments existed in the on which date How much amount Investment Fluctuation Reserve of R70,000. T 1,00,000. It also had

will be credited to Savita's

Capital Account? (6) T 25,000

(a) 10,000

7. In the absence of an agreement, partners

entitled to

(1) (d) Profit share in capital ratio. in the ratio of 3:2. With effect from 1st April, 2020, they agreed

on Loan/Advance.

profits share profits equally.

8. Xand Yshared to

are

(b) Commission.

(a) Salary. (c) Interest

(1)

(d)30,000

(c)20,000

Goodwill of the firm

was

valued at 7 3,00,000. The entry to

adjust goodwill is: Dr.

(a) Y's Capital A/c

30,000 30,000

To X's Capital A/c

.Dr.

(b) Y's Capital A/c

1,80,000 1,80,000

To X's Capital A/c

..Dr.

(c) Y's Capital Alc

1,20,000

1,20,000

To Xs Capital A/c Dr.

(d) Y's Capital A/e

1,50,000

1,50,000 (1)

To X's Capital A/c

S.

s Unrecorded asset of 7 30,000 is taken by a partner and undertakes to pay his wife loan of 40,000 at the time of firm's dissolution. What will be the net effect of above

on Realisation Account?

(a)

10,000 in the Debit

(c) 40,000 in the Debit

(b) R 10,000 in the Credit (d)

40,000 in the Credit

(1)

10. When a partner is admitted, he becomes entitled to share of (a) past profits.

(b) present profits. (c) future profits.

(d)

reserve

appearing

in the balance sheet of the firm.

(1)

Model Test Papers

M.3 Gaining ratio is calculated at the ) retirement of a partner only.

.

time of

(6) death of a partner only.

12.

(cadmission of a partner only. d change in profit-sharing ratio/retirement/death of a (1) partner. Mother Ltd. Ltd. forteited 300 shares of 7 10 each, fully called-up, held by Ram for non-payment of allotment money of 7 3 per share and final call money of 7 4 per share.

Out of these shares, 250 shares were reissued to Shyam for 7 2,000 as fully paid-up. The gain on reissue is (a) 900.

(6) 400.

(c)R750.

(a)250.

(1)

13. A, B and C' are partners. On C's retirement, Workmen Compensation Reserve existed

in the Balance Sheet at

40,000. Claim on account of Workmen Compensation is

13,000. Amount to be credited to C for Workmen Compensation Reserve will be (a)20,000.

(6)40,000.

(c) 9,000.

(d) T 13,00o.

(1)

14. Show how will be the following items dealt while preparing final accounts of Queen's

Club for the year ending 31st March, 2020: Expenditure on construction of Building 7 3,60,000. The construction work is in progress

and has not yet completed. Opening Capital Fund Opening Building Fund

10,80,000 4,80,000

Opening 10% Building Fund Investments

T6,00,000 T4,80,000

Interest received on Building Fund Investments

48,000

Donation received for Building

Or

From the following information, calculate advance subscription as on 31st March,

2020: (a) A club has 390 members each paying annual subscription of

6)

Subscription received during 2019-20

()

Subscription received in

d)

Subscription outstanding as at 31st March,

advance

as

at 31st

1,000

5,00,000 March,

2019

1,00,000 90,000 1,80,000

2020 2019

Subscription outstanding as at 31st March, the year 2018-19. ) Subscription of T 70,000 is still in a r r e a r s for in the ratio of 7: 3. a ) Kumar and Raja are partners in a firm sharing profits Their e)

(3)

Their ? 4,00,000. Current Accounts had Kumar 9,00,000 and Raja The Partnership Deed Kumar-{ 70,000 and Raja- 50,000.

capitals were: Credit balances

as

provided following: () Interest on Capital @ 9%

per

annum.

3,000

per and Raja's salary (i) Kumar's salary 50,000 per year effect to the above.

Profit for the

year was

month.

distributed without giving

March, Profit for the year ended 31st

2020 was

2,78,000. Pass adjustment entry.

An

Aid to

M.4 (b) Give any

one distinction

ratio and between sacrificing

Accountancy-CBSE XI

gaining ratio.

Or firm for the year ended 31st Ma, in a firm. Net profit of the Care partners and B A, in their agreed rati distributed among the partners of was which 2020 is 30,000, undermentioned wer transactions the 3:1:1.Itis noticed on 10th April, 2020 that for the year ended 31st March 900 account of the firm 2020. of books the passed through

(a) Interest on Capital

6% per annum, the capitals of A, B and C being

40,000 and 7 30,000 Interest

(c)

Partners'

(d)

Commission due are

respectively.

C7 150. T drawings: A R 350; B 250; Salaries: A T 5,000; B 7,500.

(6)

You

50000;

on

to A (for a

required to pass

an

special transaction)

3,000.

adjustment entry to rectity

the error

(show

your workina

(4)

clearly). 16. Sure Ltd. has

authorised

an

capital of R 20,00,000 divided into equity shares

of

10 each. The company invited applications for 60,000 shares. Applications were received for 58,000 shares.

All calls were made and were duly received except the final call of { 3 per share on 2.000 shares. These shares were forfeited.

Present share capital in the Balance Sheet of the company as per Schedule III of the (4)

Companies Act, 2013.

17. X and Y started a business on 1st April, 2019 by contributing

5,00,000 and

2,50,000 respectively as capital. On 1st July, 2019, X gave loan to the firm of

2,00,000. Yalone was looking after the business of the firm. During the year ended 31st March, 2020, the firm earned a net profit of 7 4,09,000. There was no partnership agreement-oral or written. At the time of distribution of profit:

X Claims:

(i) Interest to be given on capital and loan @12% p.a.; and (i) The profit should be distributed in the capital ratio.

Y Claims:

)

Salary of T 10,000 p.m for his service; and

(i) Interest on capital and loan should be given@ 8% p.a. only.

How will be the 18. Xand Ywere

dispute settled?

partners in

2020, their Balance Sheet

(4)

firm, sharing profits in the ratio of 2: 3. On 31st Marc was as follows:

a

Liabilities

Assets

Creditors Workmen Compensation Reserve Capital A/cs:

1,05,000 1,00,000

1,55,000

Stock

1,00,.000

Furniture

2,00,000 Y

Bank

3,00,000 5,00,000 7,05,000

Computers Land and Building

1,00,000 50,000

3,00,000 7,05,000

Model Test Papers

M.5

partners decided to dissolve the firm on

The

Ist

were settled as follows:

( Xagreed to take Iand and Building at

() Stock was sold for

90,000,.

April,

2020. The assets and

3,50,000 against

liabilities

payment.

(ii Creditors accepted furniture and computers in settlement of their claims. Pass necessary Journal entries in respect of Realisation Account.

(4) 0(On 1st June, 2019, Max Ltd. issued 6,000: 10% Debentures of 7 100 each at a discount of 6% redeemable at a premium of 4%. It has a balance of ? 40,000 in

Securities Premium Reserve. Pass the Journal entries for issue of debentures and writing off loss and prepare Loss on Issue of Debentures Account.

(

Star Ltd. took a loan of 7 5,00,000 from HDFC Bank@ 10% p.a. interest. The company issued ? 7,50,000, 10% Debentures of

100 each in favour of HDFC Bank

as collateral security. Pass necessary Journal entries for the above transactions, if the company decided to record the issue of 10% Debentures as collateral security. (4 + 2) 20. Following is the Receipts and Payments Account of Literacy Club for the year ended 31st March, 2020: RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March, 2020

Dr.

Cr.

Payments

Receipts To Balance b/f

To Donation

20,000 By Building

1,08,000

1,00,000 By Match Expenses

To Life Membership Fees

8,000

900

,100

By Furniture

To Receipts from Matches

16,000 By 10%Investments

To Subscriptions

10,400

By Salaries: Y/E 31st March,2019

4,000

To Lockers' Rent

800

Y/E 31st March, 2020

10,000

To Interest on Investments

480

By Insurance

32,000 14,000 700

To Sale of Furniture (Book Value7 1,600)

2,000

By SundryExpenses

1,940

To Entrance Fees

6,000

By Balance cdf

1,040

1,63,680

1,63,680

Additional Information: () Subscriptions outstanding on 31st March, 2019 were

200 and on 31st March,

2020 were 7 1,380. 7 800 and year ended 31st March, 2020 were 600. were outstanding sundry expenses donations and balance for building. Donation includes 7 20,000 for general 1st July, 2019. 10% Investments were purchased on Account of the Club for the year ended

(17) Outstanding salaries for the (in) (D)

Prepare Income and Expenditure 31st March, 2020.

(6)

>E XII

M.6 and sharing profits

firm C are partners in a was 31st March, 2020 Their Balance Sheet as at Assets

21. A, B and

Liabilities

B

30,000

B

retired on 1st

()

April,

3:2:1. 18,000

25,000

3,000

22,000 18,000 30,000 68,000

Stock Furniture

40,000 40,000

A

ratio ofa.o

under:

Doubtful Debts Less: Provision for

12,000

General Reserve Capital A/cs:

in the

Cash at Bank Debtors

30,000 16,000

Creditors Bills Payable

as

losses

Machinery

1,10,000

Goodwill

12,000

168,.000

1,68,000 following terms: will be raised by

2020 on the

Debts Provision for Doubtful

1,000.

Furniture by 5%. reduced by 10% and be will Stock i) and it is to be provided i: claim for damages of {1,100 in (in There is an outstanding the books.

7 6,000, being not payable. Creditors will be written back by reduced by 5%. (v) Machinery will be the year, { 3,400 will Out of the fire insurance premium paid during

(iv)

(v)

be carried

forward as excess premium paid. at 24,000. (vi) Goodwill of the firm is valued the balance to be transferred to his (vii) B to be paid 7 10,000 by cheque and Loan Account. (ix) A and Cto share the future profits in the ratio of 3: 2. Revaluation Account, Partners' Capital Accounts and Balance Sheet of the

Prepare

firm after B's retirement. Or

A and B are partners in a firm sharing profits in the ratio of 3: 2. Their Balance Sheet as at 31st March, 2020 stood as under: Liabilities

Assets

Capital A/cs:

Machinery

A B

35,000

General Reserve Bank Loan

Creditors

30,000

65,000 10,000 9,000 36,000

33,000 15,000

Furniture Investments Stock Debtors

20,000 23,000

19,000

Less: Provision for Doubtful Debts Cash at Bank

2,000

17,000 12,000 1,20,000

1,20,000

2020, they admitted C into partnership for 1/4th share in the profits on On 1st April, the following terms: () Cbrings7 30,000 as his share ofcapital and (ii) All debtors are good. (ii) Reduce stock by 5% and furniture by 10%.

7,000 in cash

as

his share of good

(iv) An outstanding bill for repairs 7 1,000 will be brought in the books. () Half of the investments were to be taken over by A and B in their profit-sharing ratio at book value.

(vi) Bank loan is repaid.

Model Test

pers M.7

.Partners agreed to share future profits in the ratio of (vi. :

and B decided to allow a salary of 7 50,000 per time devoted by him to the business.

(vii) A

3:3:2.

annum

for the extra efforts and

Pass Journal entries for the above,

Mink Ltd. invited applications for 2,00,000 Equity Shares of 100 each of7 10 per share. The amount was payable as follows:

On application

40

per share (including premium),

the balance on first and final call.

Anplications

for

on

allotment

(8) at a

premium

30 per share and

3,00,000 shares

were received. Applications for 40,000 shares were reiected and pro rata allotment was made to the remaining Ramesh who was allotted 2.000 shares, did not pay the allotment and first andapplicants. final call money. His shares were forfeited. The forfeited shares were reissued at 7 90 per share as fully paid-up. Pass necessary Journal entries in the books of company if Calls-in-Arrears Account is maintained.

Or King Ltd. invited applications for 80,000 equity shares of T 10 each at par. The amount was payable as follows:

On Application On Allotment

2

On First and Final Call

: 4 ; and 4

Applications for 1,00,000 shares were received. Allotment was made on pro rata basis to all the applicants. Excess money received on applications was adjusted on sums due

on allotment. Satnam, who had applied for 1,000 shares, did not pay the allotment money and his shares were immediately forfeited. Harnam did not pay the first and final call on 800 shares allotted to him. His shares were also forfeited. All the forfeited shares were reissued at ? 12 per share as fully paid-up.

Pass necessary Journal entries in the books of King Ltd. for the above transactions if Calls-in-Arrears Account is maintained. (8) PART B ANALYSIS OF FINANCIAL STATEMENTS 23.

BALANCE SHEET (EXTRACT)

Particulars

31st March, 2020 31st March, 2019

Non-Current Assets angible Fixed Assets

1,90,000

1,50,000

Additional Information: A part of machinery costing 7 5,000 on which depreciation of 7 2,000 had been Charged was sold for 7 1,000. 17,000. ow much amount (related to above information) will be shown in Investing Activity

Depreciation charged during the year

was

4s outflow of Cash in Cash Flow Statement prepared on 31st March, 2020?

(a) 50,000

(b) 60,000

c)40,000

(d)55,000

(1)

An Aid to

M.8

Accountancy-CBSE XIE

24. A Transaction involving a decrease in Debt-Equity Ratio and no chango i Current Ratio is (a) Issue of Debentures for Cash.

(b) Redemption of Preference Shares for cash. (c) 1ssue of share for cash.

(d) Issue of shares against the purchase of fixed

assets.

(1)

25. Fill-in the Blanks: Proprietary Ratio indicates the are financed out of

of the enterprise

extent to which the

(1)

26. What is the effect of Provision for Doubtful Debts on Quick Ratio?

(1)

27. Comparison of values of one period with those of another period for the same firm is (b) Inter-firm comparison.

(a) Intra-firm comparison.

(d) Trend comparison.

(1) 28. While preparing Common-size Balance Sheet, each item of Balance Sheet is expressed

(c)Patterncomparison.

as % of

(a) Non-current Assets.

(6) Current Assets.

(c) Non-current Liabilities.

(d) Total Assets or Total Liabilities.

(1)

29. In Cash Flow Statement, match the following activities:

(i) Receipt of Dividend. (i) Purchase and sale of Securities,

(a) Financing Activities

(6) Investing Activities

by a Financing Company.

(ii) Buy-back of Own Shares.

(c) Operating Activities

30. (a) Calculate values of Opening and Closing Inventories from the following

(1)

information

Revenue from Operations: 76,00,000; Gross Profit Ratio = 25%. Inventory Turnover Ratio

Times. Closing Inventory is 12,000 more than the (b) Net profít after interest and tax 7 1,00,000; Current Assets 5

Opening Inventory. 4,00,000; Current

Liabilities? 2,00,000; Tax Rate 20%; Fixed Assets 7 6,00,000; 10% Long-term debe 4,00,000.

Calculate Return on Investment. (a)

Or

1,00,000 is Cost of

Revenue from Operations (Cost of Goods Sold); Inventory Turnover Ratio 4 times; Inventory in the beginning is 1.5 times more than he Inventory at the end. Calculate values of Opening and Closing Inventory. (b) From the following information, calculate Trade Receivables Turnover Ratio: Cost of Revenue from Operations (Cost of Goods Sold) : 7 6,00,000 Gross Profit on Cost: 25% Cash Sales: 20% of Total Sales

Opening Debtors :

1,00,000

Closing Debtors F 2,00,000.

(3)

Model Test Papers

M.9 31.

Common-size

Pre

Balance Sheet from the

following information: 31 st March, 2020 ()

Shareholders' Funds

31st March, 2019 )

Non-current Liabilities

9,00,000

6,00,000

Current Liabilities

3,00,000

3,00,000

3,00,000

1,00,000

10,50,000

7,00,000

4,50,000

3,00,000

Non-current Assets Current Assets

Or From the

following Statement of Profit and

Loss of the Sakhi Ltd. for the year ended

31st March, 2020, prepare Comparative Statement of Profit and Loss: STATEMENT OF PROFIT AND LOSS for the year ended 3 1st March, 2020 Particulars

31st March, 2019 )

I.Revenuefrom Operations

31st March,

2020 )

25,00,000

40,00,000

5,90,000

6,80,000

I. Expenses

Employee Benefit Expenses (5% of Revenue from Operations) Other Expenses I. Rate of Tax 35%

(4)

32. () From the following information,caleulate Cash Flow from Investing Activities: Particulars

Closing Balances )

Machinery (At cost)

Opening Balances(

Accumulated Depreciation

4,20,000 1,10,000

4,00,000 1,00,000

Patents

1,60,000

2,80,000

Additional Information: ( During the year, a machine costingR 40,000 with its accumulated depreciation of 24,000 was sold at a profit of 25% of book value.?A

i) Patents were written off to the extent of T 40,000 and some patents were sold at a profit of 20,000 6) From the following information, calculate Cash Flow from Financing Activities for the year ended 31st March, 2020:

Particulars Equity Share Capital 10% Debentures

)

31st March, 2019 )

15,00,000

10,00,000 1,00,000

8%Debentures Additional Information: ) Interest paid on Debentures (ii) Dividend paid 50,000.

31st March, 2020 )

2,00,000

10,000.

During the year, company issued bonus shares in the ratio of 2: 1 by capitalising reserve.

(33)

An

Aid to

M.10

Accountancy-Cho -CBSE. X

Answers PART A 2. (b) 4. (b)

1. (d

3. (d) 5. (a)

Working Note

3,00,000

Subscription Received

Add:

45,000

Outstanding Subscription (Closing)

3,45,000 Less:

25,000

Outstanding Subscription (Opening)

3,20,000 6.

(c

[Hint:. Profit-sharing Ratio is

7. (c) 10. (c) 12. (d

given. 8. (a) 11. (d)

not

It means,

they

share the

Amount forfeited on 250 shares (250 x 7 3)

Less: Discount on Reissue Gain on reissue to be transferred to Capital Reserve

profits equall

9. (a)

750 500 250

13. (c)

14

Queen's Club

ANEXTRACTOFBALANCESHEET as at 31stMarch, 2020 Labiites

Assets

Capitel Fund

Opening Balance

Adc Transfer from Building Fund Building Furd Opening Balance hdd Donation Received interest on Building Fund Investments Les

Transfer to Capital Fund

3,60,000 4,80,000

3,60,000 14,40,000 4,80,000 6,00,000 48,000 11,28,000

3,60,000 7,68,000 SUBSCRIPTION ACCOUNT

Particulars

Outstanding Subscription A/c (tn the beginning)

To To

Building-in-Progress 10% Building Fund Investments

Or

Dr. To

10,80,000

Income and Expenditure A/c (390x? 1,000) Advance

Note:

Subsription A/c (Balancing Figure)

Subscription outstanding as on

Particulars By Advance Subscription A/c

1,80,000 (In the beginning) 3,90,000 By Bank A/c 1,20,000 By Outstanding Subscription A/c (At the ena) 6,90,000

as on 31st March, 2020: that date. It means, it also Therefore, adjustment need not be made.

90,000 includes total amount of subscrip still in arrears for the year 2018-19

includes "Subscription

1,00,000

5,00,000 90,000 6,90,000

on

due

n0 70,000

Meiel Test Papers

M.11 15. (a)

ADJUSTMENT ENTRY Particulars

Date

LF. Kumar's Current A/c To Raja's Current A/c

Onterest on

Dr.

Cr.

Dr.( 11,100

11,100

capital and salary of partners adjusted)

Working Note:

ADJUSTMENT TABLE

Particulars

Kumar's Current A/c Raja's Current A/c

Dr.) LAmount of Profit already credited, now reversed L Amount which should have been credited:

Cr.()

1,94,600

0Interest on Capital Salary i) Share of Profit ( 75.000 in ratio of 7:3) **

Dr.()

Cr.()

Cr.) 2,78,000

81,000

36,000 1,17,000|

50,000

36,000 22,500

52,500

11,100 (Dr.)

Note: Current Account balances

Dr.()

83,400

1,94,600 1,83,500 83,400

L.Net Effect(1- I1)

Firm

86,000 75,000

94,500 2,78,000 2,78,000

11,100 (Cr.)

given, it means Capitals given are fixed capitals (b) Sacrificing ratio is the ratio in which old partners sacrifice their share in profits in favour of new or incoming partner, whereas, gaining ratio is the ratio in which are

remaining (continuing) partners acquire the outgoing partner's share. Or ADJUSTMENT ENTRY

Date

Particulars

2020 April 10

A's Capital A/c

L.F.

Dr.)

.Dr. ...Dr.

C's Capital Alc

Cr.

2,520 2,740

To B's Capital A/c

5,260

Adjustment entry passed for wrong appropriation of profit)

Working Note: ADJUSTMENT TABLE

Particulars i)

A R)

Profit already credited, now debited (3:1:1)

(Dr.)

B)

C

Total )

18,000

6,000

6,000

30,000

3,000

2,400

(350)

(250) 7,500

1,800 (150)

7,200 (750) 12,500

Amount which should have been Credited/(Debited): lo) Interest on (b) Interest on c) Salaries

Capital Drawings

5,000

(d) Commissior

3,000

(e)

4,830

1,610

1,610

3,000 8,050

15,480

11,260

3,260

30,000

2,520

5,260

Dr.

Cr.

2,740 Dr.

Share of Profit (3:1:1)

30,000-7,200+ 750-12,500-3,000 8,050 (Cr.)

Net Effect(i -in

An Aid to

M.12

Accountancy-CBSE X

Sure Ltd.

16.

BALANCE SHEET

(EXTRACT)

as at..

Note No.

Particulars I. EQUITY AND LIABILITIES Shareholders' Funds

Share Capital

5,74,0

Note to Accounts

Particulars 1. Share Capital Authorised Capital

2,00,000 Equity Shares of 10 each Issued Capital 60,000 Equity Shares of 10 each Subscribed Capital Subscribed and Fully Paid-up

20,00,000 6,00,000

56,000 Equity Shares of 10 each Add: Forfeited Shares A/c (2,000 xT 7)

5,60,000 14,000

5,74,000

17. There is no partnership agreement (Partnership Deed). Therefore, the following provisions of the Indian Partnership Act, 1932 are to be applied to settle the dispute: X's Claim: (i) Interest on Capital is not payable to partners. However, X will get interest on loan @ 6% p.a. (i) Profits will be shared equally between Xand Yafter deducting interest on loan of X@ 6% p.a., i.e., T 9,000 T 2,00,000 x 6/100 x 9/12). Profit after interest on loan = R 4,09,000 -79,000 = 7 4,00,000.

Share of Profit: X Y's Claim: )

2,00,000; Y-T 2,00,000.

Salary is not payable to any partner. Therefore, Y is not entitled to

salary. (1) Interest on Capital is not payable to partners. However, X will get

interest on loan @ 6% p.a. 18. Date

JOURNAL

Particulars

LF

Realisation A/c To Land and Building Ac To Computers A/c To Stock A/c To Furniture A/c (Assets transferred to Realisation Account)

...Dr.

Creditors A/e

.Dr.

To Realisation A/c (Liabilities (creditors) transferred to Realisation Account)

Dr.)

Cr.)

5,50,000 3,00,000

50,000 1,00,000

1,00,000

1,05,000 1,05,000

Model Test Papers M.13

Bank A/c To Realisation A/c (Land and building and stock realised) X'sCapital A/c Y's Capital Alc To Realisation A/c (Loss on Note:

...Dr.

4,40,000 4,40,000 2,000 3,000

...Dr.

(R 5,50,000-

realisation transferred in

..Dr.

1,05,000- 4,40,000)

5,000

profit-sharing ratio)

s s e t (recorded or an a asset lIfan unrecorded) is given in payment of a liability (recorded or entry is passed for such settlement. Creditors accepted furniture and computers in settlement of their

unrecorded), then no

claim. No entry will be passed for this transaction.

19. ()

In the Books of Max Ltd.

JOURNAL Particulars

Date

LF.

Dr.)Gr.)

2019

June

lune

1 Bank A/c (6,000

x

7 94)

..Dr.

To Debentures Application and Allotment A/c (Application money receivedfor 6,000 debentures)

5,64,000

5,64,000

1 Debentures Application and Allotment A/c Loss on Issue ofDebentures A/c (Note) To 10% Debentures A/c To Premium on Redemption ofDebentures A/c (6,000x74)

..Dr.

5,64,000

...Dr.

60,000 6,00,000

24,000

(6,000; 10% Debentures issued at 6% discount and redeemable at 4% premium)

2020

March 31 Securities Premium Reserve A/c Statement of Profit and Loss ( 60,000 -R40,000) To Loss on Issue of Debentures A/c

..Dr.

40,000

..Dr.

20,000

60,000

(Loss on issue of debentures written off) Note: Discount

on

it is 36,000 (i.e., 6,000 x 6) is also a loss on issue of debentures, So, under "Loss on Issue of Debentures Account"

Issue of Debentures

combined into

one account

of

Particulars

Date

Particulars

Date

2020

2019 June

Cr.

LOSS ON ISSUE OF DEBENTURES AcCOUNT

Dr.

1 To 10% Debentures A/c (Loss on Issue of Debentures)

60,000

March 31 By Securities Premium Reserve A/c March 31 By Statement of Profit and Loss

60,000

20,000 60,000

JOURNAL

(u) Date

40,000

LF. Dr.()

Particulars

...Dr.

5,00,000 5,00,000

Bank A/c To Bank Loan A/c

10% p.a. interest, against (Loan taken from HDFC Bank@ 100 each) 10% Debentures collateral security of 7,500;

of

To 10% Debentures A/c Debentures

favour ofHDFC Bank)

of

...Dr.

7,50,000 7,50,000

Debenture Suspense A/c

0,500, 10%

Cr.)

100 each issued

as collateral

security in

An Aid to

M.14

Accountancy-CBSE XII

ACCOUNT INCOME AND EXPENDITURE

20.

for the year ended 3 1st March, 2020

Dr.

Income

Expenditure 900

To Match Expenses

10,800 700

800

Add: Outstanding (31.3.2020)

20,000

By Receipts from Matches

10,000|

To Salaries

By General Donations

To Insurance

By Subscription

10,400

Less: Outstanding (31.3.2019) Add: Outstanding (31.3.2020)

2,540

600

Add: Outstanding (31.3.2020)

200

10,200

1,940

To Sundry Expenses

16,000

42,240

To Surplus

1,380

By Lockers'Rer

800

By Interest on Investments (WN)

(Excess of Income over Expenditure)

11,580 2,400

By Gain (Profit) on Sale of Furniture

400 6.000

By Entrance Fees

57,180

57,180

Working Note: Calculation of Accrued Interest: Interest on Investments

32,00012

2,400

100

Less: Received during the year

80

Accrued Interest

1,920

21. Dr.

REVALUATION ACCOUNT

Particulars

Particulars

To Provision for Doubtful Debts A/c

1,000 1,800 1,500

To Stock A/vc To Furniture A/c To

Outstanding Claim for Damages A/c

By Creditors A/c

6,000

By Insurance Co. (Excess premium)

3,400

1,100

To Machinery A/c To Gain

Ctr

3,400

(Proft) transferred to:

A's Capital A/c

300

B's Capital Ac

200

Cs Capital A/c

100

600 9,400 E

9,400 Dr.

Particulars To Goodwill A/c To B's Capital A/c

PARTNERS CAPITAL ACCOUNTS AR) 6,000

C)

Particulars

A)

B)

4,000

2,000 5,600

By Balance b/d

40,000

40,000

6,000

4,000

300

200

2,400

To Bank A/Nc

10,000 38,200

To B's Loan A/c To Balance cld

B)

37,900 46,300

24,500 52,200

CR 30,000

By General Reserve A/Nc By Revaluation A/c (Gain) By A's Capital A/c By C's Capital A/c

2,000 100

2,400

5,600 32,100

32,100

46,300

52,200

Model Test Papers M.15

BALANCE SHEET OF A AND C as at 1st April, 2020 Liabilities

Assets 24,000 16,000 1,100 38,200

Creditors

Bill Payable

outstanding Claim for Damages B's Loan

Cash at Bank ( 18,000-7 10,000)

Debtors

A

37,900

C

24,500

25,000

Less: Provision for Doubtful Debts

Capital A/cs:

62,400

8,000

4,000

21,000

Stock

16,200

Furniture

28,500

Machinery

64,600 3,400

Insurance Co.

1,41,700

1,41,700

Working Notes:

1. Calculation ofGaining Ratio:

AsGain

C's C's Gain Gain52 1 7

6 30

Thus,Gaining Ratio = 3:7

2. B's Share of Goodwill

8,000 ( 24,000 x 2/6) is adjusted between A and C in their gaining ratio of 3:7.

A's contribution =7 8,000 x 3/10 =T 2,400, and Cs contribution = 78,000 x7/10=T5,600.

Or JOURNAL Date

LF.

Particulars

..Dr.

Provision for Doubtful Debts A/c

Dr.

Cr.)

2,000

2,000

To Revaluation A/c debtors (Provision for Doubtful Debts reversed, all

being good) (WN 1) ..Dr.

Revaluation A/c

3,650 1,150

To Stock ANc

1,500

To Furniture A/c To

1,000

Outstanding Bill of Repair A/c

(Decrease in value of assets and

increase in

liability recorded)

A's Capital A/c

.Dr

990

..Dr.

660

B's Capital A/c

1,650

To Revaluation A/c partners'capital transferred to old (LOss on revaluation

accounts

in the old ratio) (WN 2)

...Dr.

6,000

General Reserve A/c

4,000

To A's Capital A/c To B's Capital A/c credited to eneral Reserve

10,000

old partners

ratio) in their old

An Aid to

Accountancy-CBSE XII

.Dr. ..Dr.

6,000 4,000

M.16 A's Capital Ac B's Capital A/c To Investment A/c (Half-investment

10,000

taken by A and B in

ratio) their profit-sharing

37,000

...Dr.

Bank A/c To Cs Capital A/c

30,.000 7,000

Goodwill A/c To Premium for for goodwill brought by C) (Capital and premium

7,000

...Dr.

Premium for Goodwill Ac

6,300

To A's Capital A/c To B's Capital A/c (Premium

for goodwill brought by

700

Ccredited to A and B in

their gaining

ratio of 9:1) (WN 3)

9,000

.Dr.

Bank Loan Ac

9,000

To Bank A/c (Bank loan paid) Working Notes: credited to Revaluation 1. Provision for Doubtful Debts is

Account

because all debtors

are

good. Hence,

Provision for Doubtful Debts is not required. Cr.

REVALUATION ACCOUNT

2 Dr.

Particulars

Particulars 1,150 1,500

To Stock A/c To Furniture A/c

1,000

To Outstanding Bill for Repairs A/c

By

Provision

2,000

for Doubtful Debts A/c

By Losstransferred to: 990 660

A's Capital A/c

B's Capital A/c

1,650 3,650

3,650 3. Calculation of Sacrifhcing Ratio:

A'sSacrifhice=

Bs Sacrifice

22. Date

Thus,Sacrificing Ratio of Aand B =9:1

JOURNAL OF MINK LTD.

LF.

Particulars Bank AVc To Equity Shares Application A/t (Application money received for 3,00,000 shares)

Equity Shares Application A/c

..Dr.

Dr.

Cr.

1,20,00,000 1,20,00,000

..Dr.

1,20,00,000

To Equity Share Capital A/c

60,00,000

To Securities Premium Reserve A/c

20,00,000

To Bank A/c (40,000x 40)

16,00,000

To Equity Shares Allotment A/c

24,00,000

(Application money adjusted on allotment)

Model Test Papers

M.17 Equity Shares Allotment A/c To

.Dr.

Equity Share Capital A/C

60,00,000 60,00,000

(Allotment money due)

BankA/c

.Dr

Calls-in-Arrears A/c

..Dr.

To Equity Shares Allotment A/c

35,64,000 36,000 36,00,000

(Allotment money received except on 2,000 shares) Equity Shares First and Final Call A/c

Dr.

To Equity Share Capital A/c

80,00,000 80,00,000

(First and final call money due) Bank A/c Calls-in-Arrears A/c

..Dr.

79,20,000

..Dr.

80,000

To Equity Shares First and Final Call A/c

80,00,000

(Call money received except on 2,000 shares)

EquityShare Capital A/c

...Dr.

2,00,000

To Calls-in-Arrears A/c

1,16,000

To Forfeited Shares A/c

84,000

(Forfeiture of 2,000 shares for non-payment of

allotment and call)

Bank A/c

.Dr.

1,80,000

Forfeited Shares A/c

..Dr.

20,000 2,00,000

To Equity Share Capital A/c

(Reissue offorfeited shares at T90 per share as fully paid) ...Dr.

Forfeited Shares A/c

64,000 64,000

To Capital Reserve A/c Gain (Profit) on reissue transferred to Capital Reserve)

Working Note: cuiation

of Allotmentmoney due but not paid by

2,60,000X2,000 Shares Applied by Ramesh 2,00,000

2,600 shares.

=

=

Excess Application Money received

600

Ramesh:

xT40 T 24,000. =

60,000

Alilotment Money due on 2,000 shares

Less: Excess application money adjusted against

mount due on allotment but

not paid

allotment

by Ramesh

24,000

36,000

An Ad

to Ao

ancy-Ce

M.18 Or JOURNAL

Date

OF KING LTD

LF

Particulars

BankA/c To Equity Shares (Application money

Equity To

Dr

Dr

2,00.50

Dr.

2,00.000

.Dr.

3.20,000

Application A/c

shares) received for 1,00,000

Shares Application A/c

Equity Share Capital

To Equity Shares

A/c

Allotment A/c

(Application money adjusted

an

allotment)

ANc Equity Shares Alotment

320:5

To Equity Share Capital A/c (Allotment money due)

...Dr.

277 200

.Dr.

2,800

Bank A/c Calls-in-Arrears A/c

280.301

To Equity Shares Alotment A/c

(Allotment money received except on 800 shares) .Dr.

Equity Share Capital A/c

4,800

To Calls-in-Arrears A/c

230

To Forfeited Shares A/c

200

(800 shares forfeited for non-payment of allotment money) Equity Shares First and Final Call A/c

..Dr.

3,16,800

To Equity Share Capital A/c

3,16.800

Call money due on 79,200 shares) Bank A/c

Calls-in-Arrears A/c To

.Dr.

3,13,600

.Dr.

3,200

Equity Shares First and Final Call A/c

3,16.800

(Call money received except on 800 shares)

Equity Share Capital A/c ..Dr.

To Calls-in-Arrears A/c

8,000 3.200

To Forfeited Shares A/c

4800

(Forfeiture of 800 shares for non-payment of call

BankA/c To

money) .Dr.

Equity Share Capital A/c

16,000

To Securities Premium Reserve A/c (Reissue of forfeited shares at ? 12 per share

Forfeited Shares A/c

3.200

as

fully paid-up)

To

Capital Reserve Alc (Gain (Proft) on reissue transferred to

19,200

..Dr.

6,800 6,800

Capital Reserve)

Nfodel Test Papers

M.19

PART B 23. (6)

TANGIBLE FIXED ASSETS ACCOUNT

Dr. Particulars

Cr.

Particulars

To Balance bld

1,50,000 60,000

(Purchase) (Balancing Figure-Outflow of Cash)

A/c To Bank

By By By By

Bank A/c Statement of Profit and Loss (Loss)

(Sale)

1,000 2,000

Depreciation A/c Balance cld

17,000 1,90,000

2,10,000

2,10,000

Outflow of cash under Investing Activity: 7 60,00o. 24. (d)

25. Assets/Proprietors' Funds. 26. Quick Ratio is decreased due to provision for doubtful debts since it reduces the amount

of Trade Receivables. 27. (a)

28. (d) 29.

i) (6) Investing Activities;

i) (c) Operating Activities; (iii) (a) Financing Activities. 30. (a)

Cost of Revenue from Operations

Inventory Turnover Ratio =

Average Inventory

4,50,000 (WN)

5

Average Inventory

{ 90,000 Let Opening Inventory = x; Closing Inventory = * +7 12,000

Average Inventory

Average

=

Inventory

Opening Inventory +Closing Inventory

=

2 *+*+12,000

T90,000)= 1,80,000

2

2x + 12,000

=

2x=

1,68,000

r=? 84,000 ={ 84,000; Hence, Opening Inventory 7 96,000. Closing Inventory =

Working Note: Calculation of Cost

ofRevenue from

Cost of Revenue from Operations

Operations: =

Revenue from Operations- Gross

=

T6,00,000-

Profit

1,50,000 (i.e, 25% of T6,00,000)

=

R 4,50,000.

An Aid to

M.20 (b)

Calculation

of Return

(RO):

Investment

on

Accountancy-CBSE X

and Tax ? 1,00,000 Net Profit after Interest Tax Rate 20% 7 100 Tax (after Interest) Let Net Profit before { 100-7 20 = 7 80 Net Profit after Tax (after Interest) = x Interest) * 1,00,000 ? 100/R 80 7 1,25.00o Net Profit before Tax (after x 10/100 = 40,000 Long-term debt, i.e., ?4,00,000 Interest @ =7 1,25,000 + R 40,000 7 1,65,000. Profit before Interest and Tax Current Liabilities + ixed Assets Employed = Current Assets =

=

=

=

=

10% on

=

-

Capital

=

Return

on

4,00,000+R 6,00,000-

(ROI)

Investment

2,00,000 =* 8,00,000

Net Profit before Interest and d Tax 100 =

Capital Employed T1,65,000

8,00,000

x100 20.63%.

Or (a)

Inventory Turnover Ratio = Cost of Revenue from Operations

(Cost of Goods Sold)

Average Inventory T1,00,000 Average Inventory

4

Average Inventory =7 25,000.

Average Inventory Let the

=

Opening Inventory +Closing Inventory 2

Closing Inventory be x, therefore, Opening Inventory =x+1.5x x +X

+1.5x

2

-z

25,000

3.5x=50,000 x =7 14,286 (Closing Inventory) Opening Inventory 7 14,286+1.5 times of F 14,286 =

=

35,715 (i.e., (b) Trade Receivables Turnover Ratio

7

14,286 x 2.5).

Credit Revenue from Operations, i.e., Net Credit Sales 7 6,00,000

Average Trade Receivables

1,50,0004 Times. (i) Revenue from

Operations, i.e., Net Sales

Cost of Revenue from Operatiou (Cost of Goods Sold) + Gross Profit

=R6,00,000 + 25% ofT 6,00,000

Credit Revenue from

Operations, i.e.,

Net Credit

=77,50,000.

Sales =Net Sales-Cash Sales *

7,50,000

= 6,00,000.

20% of T 7,50,000

Model Test P a p e r s

M.21

(ii) Average 'Trade Receivables=Opening Debtors + Closing Debtors 2

1,00,000 + 2,00,000 2

71,50,000.

COMMON-SIZE BALANCE SHEET

31.

as at

31st March, 2019 and 2020

Note No.

Particulars

Absolute Amounts

Percentage of Balance Sheet Total

31st March, 2019 ()

31st March,

6,00,000 3,00,000 1,00,000 10,00,000

9,00,000 3,00,000 3,00,000

60

60

30

20

10

20

15,00,000

100

100

7,00,000 3,00,000

10,50,000 4,50,000

70

70

30

30

100

100

2020 ()

31st March, 2019 (%)

31st March, 2020 (%)

LEQUITY AND LIABILITIES 1. Shareholders' Funds

2 Non-Current Liabilities 3. Current Liabilities

Total Il. ASSETS

1. Non-Current Assets 2 Current Assets

Total

10,00,000

15,00,000

Or COMPARATIVE STATEMENT OF PROFIT AND LOSS

for theyears ended 31st March, 2019 and 2020 Particulars

Note No.

31st March, 2019

31st March, [Absolute Change 2020

(Increase/ Decrease)

Percentage

Change(Increase/ Decrease) %

A) Revenue from Operations I1.

(C=B-A)

D-x100

25,00,000

40,00,000

15,00,000

60.00

1,25,000

2,00,000

75,000

60.00

5,90,000

6,80,000 8,80,000

90,000 1,65,000

15.25

7,15,000 17,85,000 6,24750 11,60,250

31,20,000

13,35,000

74.79

10,92,000

4,67,250

74.79

20,28,000

8,67,750

Expenses:

(a) Employee Beneft Expenses (6) Other Expenses Total Expenses I1. V. Taxes @35%

Proft before Tax (1-l1)

V.

(B)

Profit after Tax (1-IV)

32. (a)

23.08

74.79

ACTIVITIES CASH FLOW FROM INVESTING

Particulars Proceeds from Sale of Machinery Paymentfor Purchase of Machinery (WN 1)

Proceeds from Sale of Patents (WN 3) Cash Flow from Investing Activities

20,000 (60,000) 1,00,000 60,000

An A d to .

intancy-CE CBSE XII ancy-c5SE

M.22 Working Notes: MACHINERY ACCOUNT

1.Dr

Particulars

Particulars 400.000 To

Balance bd

Machinery To Gain Profit) on Sale of

Ave

4.000

(Sale of Machinery)

By

Bank A/c

By

Accumulated

20.000

Depreciation A/c

24.000

(Depreciation on Machinery Sold)

(Statement of Profit and Loss) Banik A/t Purchases) (Balancing Figure)

To

60.000

By Balance cid

4,20.000 4,64.000

4,64,000

Gain Proft an Sale

=

Sale Price

-

Book

Vale of Machinery=

20,000

-

16,000 (i.e., 7 40,000-

24,000)

ACCUMULATED DEPRECIATION ACCOUNT

4,000

a

Particulars

Particulars

24,000 By Balance b/d

Machinery A/c Depreciation on Machinery Soldi (Transfer)

1,10,000

To Balancec

1,00,000

By Depreciation A/c (Statement of Profit and Loss) (Balancing Figure)

Cr

PATENTS ACCOUNT

3.Dr

34,000 1,34,000

1,34,000

Particulars

Particulars To

?

Cr

2Dr

To

=

2,80,000 By BankA/c (Sale) (Balancing Figure)

Balance bc

To Gan Profiti on Sale of Paternts A/c (Given)

20,000

Statemernt of Prohit and Loss)

By Amortisation A/c (Statement of Profit and Loss)

By Balance dd

40,000

1,60,000

3,00,000

b)

1,00,000

3,00,000

CASH FLOW FROM FINANCING ACTIVITIES

Particulars Proceeds from the issue of 8% Debentures

2,00,000

Redemption of 10% Debentures

(1,00,000)

Interest Paid on Debentures

(10,000)

Dividend Paid

(50,000)

Cash Flow from Financing Activities Notes:

G) Bonus shares (Gi)

It

40,000

shown in the Cash Flow Statement because there is is assumed that 10% Debentures have been redeemed and fresh 8% are not

on 31st March, 2020.

no

cash flow.

Debentures have been issueed