# 12th Accountancy Paper Solutions Set 1 : CBSE All India Previous Year 2014

General Instructions:
(i) This question paper contains three parts A, B and C.
(ii) Part A is compulsory for all candidates.
(iii) Candidates can attempt only one part of remaining parts B and C.
(iv) All parts of the questions should be attempted at one place.
Q1 :

X, Y and Z were partners sharing profits in the ratio of and X retired from the firm. Calculate the gaining ratio of the remaining partners.

Calculation of Gaining Ratio:

Q2 :

State the rights acquired by a newly admitted partner.

The new partner, on his/her admission, acquired the two main rights. These are as follows:

(i) Right to share the future profits of the partnership firm.

(ii) Right to share the assets of the partnership firm.

Q3 :

Distinguish between 'Dissolution of partnership' and 'Dissolution of partnership firm' on the basis of Court's intervention.

 Basis of Difference Dissolution of Partnership Dissolution of Partnership Firm Court”™s Intervention There is no intervention by the court. Dissolution of Partnership may be done with the consent of court.

Q4 :

Give the meaning of 'Reconstitution of a partnership firm'.

Q5 :

D Ltd. invited applications for issuing 10,00,000 equity shares of Rs 10 each. The public applied for 8,55,000 shares. Can the company proceed for the allotment of shares? Give reason in support of your answer.

Q6 :

A Ltd. forfeited 100 equity shares of Rs 10 each issued at a premium of 20% for the non-payment of final call of Rs 5 including premium. State the maximum amount of discount at which these shares can be re-issued.

Q7 :

What is meant by issue of debentures as collateral security ?

Q8 :

Hemant and Nishant were partners in a firm sharing profits in the ratio of 3 : 2. Their capitals were Rs 1,60,000 and Rs 1,00,000 respectively. They admitted Somesh on 1st April, 2013 as a new partner for 1/5 share in the future profits. Somesh brought Rs 1,20,000 as his capital. Calculate the value of goodwill of the firm and record necessary journal entries for the above transactions on Somesh's admission.

Q9 :

Tata Ltd. issued 5,000, 10% Debentures of Rs 100 each on 1st April, 2012. The issue was fully subscribed. According to the terms of issue, interest on debentures is payable half-yearly on 30th September and 31st March and tax deducted at source is 10%.
Pass the necessary journal entries related to the debenture interest for the half-yearly ending on 31st March, 2013 and transfer of interest on debentures to Statement of Profit and Loss.

Q10 :

Pass necessary journal entries in the following cases :

(i) Sunrise Ltd. converted 500, 9% debentures of Rs 100 each issued at a discount of 10% into equity shares of Rs 100 each issued at a premium of Rs 25%.
(ii) Britannia Ltd. redeemed 3,000, 12% debentures of Rs 100 each which were issued at a discount of Rs 10 per debenture by converting them into equity shares of Rs 100 each Rs 90 paid up.

Q11 :

Singh and Gupta decided to start a partnership firm to manufacture low cost jute bags as plastic bags were creating many environmental problems. They contributed capitals of Rs 1,00,000 and Rs 50,000 on 1st April, 2012 for this. Singh expressed his willingness to admit Shakti as a partner without capital, who is specially abled but a very creative and intelligent friend of his. Gupta agreed to this. The terms of partnership were as follows :
(i) Singh, Gupta and Shakti will share profits in the ratio of 2 : 2 : 1.
(ii) Interest on capital will be provided @ 6% p.a.
Due to shortage of capital, Singh contributed Rs 25,000 on 30th September, 2012 and Gupta contributed Rs 10,000 on 1st January, 2013 as additional capital. The profit of the firm for the year ended 31st March 2013 was Rs 1,68,900.
(a) Identify any two values which the firm wants to communicate to the society.
(b) Prepare Profit and Loss Appropriation Account for the year ending 31st March, 2013.

Q12 :

Monika, Sonika and Mansha were partners in a firm sharing profits in the ratio of 2 : 2 : 1 respectively. On 31st March, 2013 their Balance Sheet was as under :

 Balance Sheet as on 31st March, 2013 Liabilities Amount Rs Assets Amount  Rs Capitals : Fixed Assets 3,60,000 Monika 1,80,000 Stock 60,000 Sonika 1,50,000 Debtors 1,20,000 Mansha 90,000 4,20,000 Cash 2,70,000 Reserve Fund 1,50,000 Creditors 2,40,000 8,10,000 8,10,000

Sonika died on 30th June, 2013. It was agreed between her executors and the remaining partners that
(a) Goodwill of the firm be valued at 3 years' purchase of average profits for the last four years. The average profits were Rs 2,00,000.
(b) Interest on capital be provided at 12% p.a.
(c) Her share in the profits upto the date of death will be calculated on the basis of average profits for the last four years.
Prepare Sonika's Capital Account as on 30th June, 2013.

Q13 :

On 1st April, 2012, Vishwas Ltd. was formed with an authorised capital of Rs 10,00,000 divided into 1,00,000 equity shares of Rs 10 each. The company issued prospectus inviting applications for 90,000 equity shares. The company received applications for 85,000 equity shares. During the first year, Rs 8 per share were called. Ram holding 1,000 shares and Shyam holding 2,000 shares did not pay the first call of Rs 2 per share. Shyam's shares were forfeited after the first call and later on 1,500 of the forfeited share were re-issued at Rs 6 per share, Rs 8 called up.
Show the following:
(a) Share Capital in the Balance Sheet of the company as per revised Schedule VI Part I of the Companies Act, 1956.
(b) Also prepare 'Notes to Accounts' for the same.

Q14 :

Pass necessary journal entries for the following transactions in the books of Gopal Ltd. :
(i) Purchased furniture for Rs 2,50,000 from M/s Furniture Mart. The payment to M/s Furniture Mart was made by issuing equity shares of Rs 10 each at a premium of 25%.
(ii) Purchased a running business from Aman Ltd, for a sum of Rs 15,00,000. The payment of Rs 12,00,000 was made by issue of fully paid equity shares of Rs 10 each and balance by a bank draft. The assets and liabilities consisted of the following:
Plant Rs 3,50,000; Stock Rs 4,50,000; Land and Building Rs 6,00,000; Sundry Creditors Rs 1,00,000.

Q15 :

Seema, Tanuja and Tripti were partners in a firm trading in garments. They were sharing profits in the ratio of 5 : 3 : 2. Their capitals on 1st April, 2012 were Rs 3,00,000, Rs 4,00,000 and Rs 8,00,000 respectively. After the flood in Uttarakhand, all partners decided to help the flood victims personally.
For this Seema withdrew Rs 20,000 from the firm of 15th September, 2012. Tanuja instead of withdrawing cash from the firm took garments amounting to Rs 24,000 from the firm and distributed those to the flood victims. On the other hand, Tripti withdrew Rs 2,00,000 from her capital on 1st January, 2013 and provided a mobile medical van in the flood affected area.
The partnership deed provides for charging interest on drawings @ 6% p.a. After the final accounts were prepared it was discovered that interest on drawings had not been charged. Give the necessary adjusting journal entry and show the working notes clearly. Also state any two values which the partners wanted to communicate to the society.

Q16 :

Hanif and Jubed were partners in a firm sharing profits in the ratio of their capitals. On 31st March, 2013 their Balance Sheet was as follows:

 Balance Sheet of Hanif and Jubed as on 31st March, 2013 Liabilities Amount Rs Assets Amount  Rs Creditors 1,50,000 Bank 2,00,000 Workman Compensation Fund 3,00,000 Debtors 3,40,000 General Reserve 75,000 Stock 1,50,000 Hanif”™s Current Account 25,000 Furniture 4,60,000 Capital”™s : Machinery 8,20,000 Hanif 10,00,000 Jubed”™s Current Account 80,000 Jubed 5,00,000 15,00,000 20,50,000 20,50,000

On the above date the firm was dissolved.
(i) Debtors were realised at a discount of 5%, 50% of the stock was taken over by Hanif at 10% less than the book value. Remaining stock was sold for Rs 65,000.
(ii) Furniture was taken over by Jubed for Rs 1,35,000. Machinery was sold as scrap for Rs 74,000.
(iii) Creditors were paid in full.
(iv) Expenses on realisation Rs 8,000 were paid by Hanif.
Prepare Realisation Account.

Q17 :

X Ltd. invited applications for issuing 75,000 equity shares of Rs 10 each at a premium of Rs 5 per share. The amount was payable as follows:
On applications and allotment − Rs 9 per share (including premium)
On first and final call − the balance amount.
Applications for 3,00,000 shares were received. Applications for 2,00,000 shares were rejected and money refunded. Shares were allotted on pro-rata basis to the remaining applicants. The first and final call was made. The amount was duly received except on 1,500 shares applied by Ravi. His shares were forfeited. The forfeited shares were re-issued at a discount of Rs 4 per share.
Pass necessary journal entries for the above transactions in the books of X Ltd.

OR

Y Ltd. invited applications for issuing 80,000 equity shares of Rs 10 each at a discount of 10%. The amount was payable as follows:
On applications and allotment − Rs 6 per share
On first and final call − the balance amount.
Application for 2,00,000 shares were received. Applications for 40,000 shares were rejected and money refunded. Shares were allotted on pro-rata basis to the remaining applicants. The first and final call was made. All money was received except on 1,600 shares applied by Rohan. His shares were forfeited. The forfeited shares were re-issued at the maximum discount permissible under the law.
Pass necessary journal entries for the above transactions in the books of Y Ltd.

Q18 :

Shikhar and Rohit were partners in a firm sharing profits in the ratio of 7 : 3. On 1st April, 2013 they admitted Kavi as a new partner for 1/4 share in profits of the firm. Kavi brought Rs 4,30,000 as his capital and Rs 25,000 for his share of goodwill premium. The Balance Sheet of Shikhar and Rohit as on 1st April, 2013 was as follows :

 Balance Sheet of Shikhar and Rohit as on 1st April, 2013 Liabilities Amount Rs Assets Amount Rs Capitals: Land and Building 3,50,000 Shikhar 8,00,000 Machinery 4,50,000 Rohit 3,50,000 11,50,000 Debtors 2,20,000 General Reserve 1,00,000 Less: provision 20,000 2,00,000 Workmen”™s Compensation Fund 1,00,000 Stock 3,50,000 Creditors 1,50,000 Cash 1,50,000 15,00,000 15,00,000

It was agreed that
(i) the value of Land and Building will be appreciated by 20%.
(ii) the value of Machinery will be depreciated by 10%.
(iii) the liabilities of Workmen's Compensation Fund was determined at Rs 50,000.
(iv) capitals of Shikhar and Rohit will be adjusted on the basis of Kavi's capital and actual cash to be brought in or to be paid off as the case may be.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the new firm.

OR

L, M and N were partners in a firm sharing profits in the ratio of 2 : 1 : 1. On 1st April, 2013 their Balance Sheet was follows :

 Balance Sheet of L, M and N as on 1st April, 2013 Liabilities Amount Rs Assets Amount Rs Capitals: Land 8,00,000 L 6,00,000 Building 6,00,000 M 4,80,000 Furniture 2,40,000 N 4,80,000 15,60,000 Debtors 4,00,000 General Reserve 4,40,000 Less: provision 20,000 3,80,000 Workmen”™s Compensation Fund 3,60,000 Stock 4,40,000 Creditors 2,40,000 Cash 1,40,000 26,00,000 26,00,000

On the above date N retired.
The following were agreed :
(i) Goodwill of the firm was valued at Rs 6,00,000.
(ii) Land was to be appreciated by 40% and Building was to be depreciated by Rs 1,00,000.
(iii) Furniture was to be depreciated by Rs 30,000.
(iv) The liabilities for Workmen's Compensation Fund was determined at Rs 1,60,000.
(v) Amount payable to N was transferred to his loan account.
(vi) Capitals of L and M were to be adjusted in their new profit sharing ratio and for this purpose current accounts of the partners will be opened.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the new firm.

Q19 :

What is meant by 'Cash Flow Statement' ?

Q20 :

Why is separate disclosure of cash flow from investing activities important while preparing Cash Flow Statement?

Q21 :

State any one objective of financial statements analysis.

Q22 :

Under which sub-headings will the following items be placed in the Balanced Sheet of a company as per revised Schedule VI Part I of the Companies Act, 1956:
(i) Capital Reserves
(ii) Bonds
(iii) Loans repayable on demand
(iv) Vehicles
(v) Goodwill
(vi) Loose tools

Q23 :

From the following Statement of Profit and Loss of Fenox Ltd, for the year ended 31st March, 2013, prepare a Comparative Statement of Profit and Loss :

 Particulars Note No. 2012-13 Rs 2011-12 Rs Revenue from operations 8,00,000 6,00,000 Other Incomes 1,00,000 50,000 Expenses 5,00,000 4,00,000

Rate of income tax was 40%.

Q24 :

(a) The quick ratio of a company is 1.5 : 1. State with reason which of the following transactions would (i) increase: (ii) decrease or (iii) not change the ratio:
(1) Paid rent Rs 3,000 in advance.
(2) Trade receivables included a debtor Shri Ashok who paid his entire amount due Rs 9,700.
(b) From the following information compute 'Proprietary Ratio':

 Rs Long Term Borrowings 2,00,000 Long Term Provisions 1,00,000 Current Liabilities 50,000 Non-Current Assets 3,60,000 Current Assets 90,000

Q25 :

Prepare a Cash Flow Statement on the basis of the information given in the Balance Sheets of Simco Ltd. as at 31-3-2013 and 31-3-2012 :

 Particulars Note No. 31.3.2013 Rs 31.3.2012 Rs I. Equity and Liabilities : (1) Shareholder's Funds : (a) Share Capital 2,00,000 1,50,000 (b) Reserves & Surplus 90,000 75,000 (2) Non-Current Liabilities : Long Term-Borrowings 87,500 87,500 (3) Current Liabilities : Trade Payables 10,000 76,000 Total 3,87,500 3,88,500 II. Assets (1) Non-Current Assets : (a) Fixed Assets : (i) Tangible Assets 1,87,500 1,40,000 (b) Non-Current Investments 1,05,000 1,02,500 (2) Current Assets (a) Current-Investments (Marketable) 12,500 33,500 (b) Inventories 4,000 5,500 (c) Trade Receivables 9,500 23,000 (d) Cash and Cash-Equivalents 68,500 84,000 Total 3,87,500 3,88,500

Notes to Accounts :
Note − 1

 Particulars 2013 Rs 2012 Rs Reserves and Surplus Surplus (Balance in Statement of Profit and Loss) 90,000 75,000