12th Accountancy Paper Solutions Set 1 : CBSE Abroad Previous Year 2015

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-Financial statement Analysis and Computerised Accounting.
4) Attempt only one option of Part B.
5) All parts of a question should be attempted at one place.

Section A
i. This section consists of 18 questions.
ii. All the questions are compulsory.
iii. Question Nos. 1 to 6 are very short-answer questions carrying 1 mark each.
iv. Question Nos. 7 to 10 carry 3 marks each.
v. Question Nos. 11 and 12 carry 4 marks each.
vi. Question Nos. 13 to 15 carry 6 marks each.
vii. Question Nos. 16 and 17 carry 8 marks each.

Section B
i. This section consists of 6 questions.
ii. All questions are compulsory
iii. Question Nos. 18 and 19 are very short-answer questions carrying 1 mark each.
iv. Question Nos. 20 to 22 carry 3 marks.
v. Question No. 23 carries 6 marks.

Q1 :

In the absence of partnership agreement, interest on drawings of a partners is charged :
(i) at 6% per annum.
(ii) at 9% per annum.
(iii) at 12% per annum.
(iv) no interest is charged.


Answer :

In the absence of partnership agreement, no interest on drawings is charged from any partners.
Hence, the correct answer is option (iv).

Q2 :

Kamal and Vimal were partners in a firm sharing profits in the ratio of 3 : 2. Ghosh was admitted as a new partner for      share in the profits.
On Ghosh's admission the Balance Sheet of the firm showed a credit balance of Rs 10,000 in its Profit and Loss Account which was debited by the accountant of the firm in the accounts of Kamal and Vimal. Did the accountant give correct treatment to the balance of Profit and Loss Account? If 'yes' give the reason and if 'not' give the correct treatment.


Answer :

At the time of admission of a partner, the balance of accumulated profits and losses is transferred among the old partners in the old ratio. The capital accounts of the old partners are to be debited or credited depends whether the balance available in the fund is a credit balance or a debit balance. Here, Profit and Loss Account had a credit balance of Rs 10,000. This implies that the capital accounts of the old partners (Kamal and Vimal) should have been credited in the ratio of 3 : 2 (old ratio). Thus, the accountant has wrongly debited the capital accounts of the old partners.

The correct Journal entry in this case is given below.

Journal

Date

Particulars

L.F.

Debit

Amount

(Rs)

Credit

Amount

(Rs)

 

 

 

 

 

 

Profit and Loss A/c

Dr.

 

10,000

 

 

To Kamal”™s Capital A/c

 

 

6,000

 

To Vimal”™s Capital A/c

 

 

4,000

 

(Credit balance in Profit and Loss A/c distributed among the old partners in old ratio)

 

 

 

 

 

 

 

 

 

Q3 :

Anurag and Bhawana entered into partnership on 1.4.2014. On 1.1.2015 they admitted Monika as a new partner for      share in the profits which she acquired equally from Anurag and Bhawana. The new profit sharing ratio of Anurag, Bhawana and Monika was 4 : 3 : 3. Calculate the profit sharing ratio of Anurag and Bhawana at the time of forming the partnership.


Answer :

Q4 :

Deepak, Farukh and Lilly were partners in a firm sharing profits in the ratio of 3 : 2 : 1. On 28.2.2015 Farukh retired from the firm. On Farukh's retirement there was a balance of Rs 12,000 in Workmen's Compensation Reserve which was no more required. On Farukh's retirement this amount will be :
(a) Debited to the Capital accounts of all the partners in their profit sharing ratio.
(b) Credited to the Capital accounts of all the partners in their profit sharing ratio.
(c) Credited to the Capital accounts of Deepak and Lilly in their profit sharing ratio.
(d) Credited to the Capital account of Farukh.


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Q5 :

Give the meaning of forfeiture of shares.


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Q6 :

'Samta Limited' invited applications for issuing 6,750 equity shares of Rs 10 each. The amount was payable as follows :


On application − Rs 3 per share
On allotment − Rs 5 per share
On first and final call − Rs 2 per share


The issue was fully subscribed. Subhash applied for 250 shares and paid his entire share money with application. Moti applied for 175 shares and paid allotment money also with application. The amount received with applications was :
(a) Rs 16,750
(b) Rs 16,000
(c) Rs 19,250
(d) Rs 22,875


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Q7 :

State any three purpose other then 'buy-back of shares' for which securities premium can be utilized.


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Q8 :

A and B are partners in a firm sharing profits in the ratio of 3 : 2. On 31.3.2014, the Balance Sheet of the firm was as follows :
 

Liabilities

Amount

Rs

Assets

Amount

Rs

Capitals :

 

Sundry Assets

80,000

A

60,000

 

 

 

B

20,000

80,000

 

 

 

80,000

 

80,000

 

 

 

 


The Profit of Rs 80,000 for the year ended 31.3.2014 was divided between the partners without allowing interest on capital @ 12% per annum and a salary to A at Rs 1,000 per month. During the year A withdrew Rs 10,000 and B Rs 20,000.
Pass a single journal entry to rectify the error.


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Q9 :

'Telecom Limited' is registered with an authorized capital of Rs 8,00,00,000 divided into 80,00,000 equity shares of Rs 10 each. The company issued 1,00,000 shares at a premium of Rs 2 per share. The amount was payable as follows :
      On application − Rs 3 per share
      On allotment − Rs 5 per share (including premium)
      On first and final call − The balance
All calls were made and were duly received except the first and final call on 1,000 shares held by Asha.
Present the 'Share Capital' in the Balance Sheet of the company as per Schedule VI Part I of the Companies Act, 1956.


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Q10 :

'Panipat Blankets Limited' are the manufacturers and exporters of blankets. The company decided to distribute 1,000 blankets free of cost to five villages of Kashmir which had been damaged by the floods. It also decided to employ 100 young persons from these villages in their newly established factory at Ludhiana in Punjab. To meet the requirements of funds for its new factory, the company issued 1,00,000 equity shares of Rs 10 each and 2,000, 9% debentures of Rs 100 each to the vendors of machinery purchased for Rs 12,00,000.
Pass necessary journal entries for the above transactions in the books of the company. Also identify any one value which the company wants to communicate to the society.


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Q11 :

Joshi, Pandey and Agarwal were partners in a firm sharing profits in the ratio of 2 : 2 : 1. On 31.3.2014, their Balance Sheet was as follows:
 

Liabilities

Amount

Rs

Assets

Amount

Rs

Creditors

51,000

Cash

24,000

Bills Payable

36,000

Debtors

39,000

Agarwal”™s Loan

84,000

Bills Payable

27,000

Capitals :

 

Furniture

81,000

Joshi

2,10,000

 

Machinery

3,75,000

Pandey

2,04,000

4,14,000

Agrawal”™s Capital

39,000

 

5,85,000

 

5,85,000

 

 

 

 

On 31.12.2014, Agarwal died. The partnership deed provided for the following to the executors of the deceased partner :
(a) His share in the goodwill of the firm, calculated on the basis of three year's purchase of the average profits of the last four years.The profits of the last four years were Rs 2,70,000; Rs 3,00,000; Rs 5,40,000 and Rs 8,10,000 respectively.
(b) His share in the profits of the firm till the date of his death, calculated on the basis of the average profits of the last four years.
(c) Interest @12% per annum on the credit balance, if any, in his Capital account.
(d) Interest on his loan @12% per annum.
Prepare Agarwal's Capital Account to be presented to his executors.


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Q12 :

Jain, Gupta and Singh were partners in a firm. Their fixed capitals were : Jain Rs 4,00,000 ; Gupta Rs 6,00,000 and Singh Rs 10,00,000. They were sharing profits in the ratio of their capitals. The firm was engaged in the processing and distribution of flavoured milk. They partnership deed provided for interest on capital at 10% per annum. During the year ended 31st March 2014 the firm earned a profit of Rs 1,47,000.
Showing your working notes clearly, prepare Profit and Loss Appropriation Account of the firm.


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Q13 :

On 1.4.2013 Mohan and Sohan entered into partnership for doing business of dry fruits. Mohan introduced Rs 1,00,000 as capital and Sohan introduced Rs 50,000. Since Sohan could introduce only Rs 50,000 it was further agreed that as and when there will be a need Sohan will introduce further capital. Sohan was also allowed to withdraw from his capital when the need for the capital was less. During the year ended 31.3.2014, Sohan introduced and withdrew the following amounts of capital :

Date Capital Introduced Capital Withdrawn
01.5.2013 10,000 ___
30.6.2013 ___ 5,000
30.9.2013 97,000 ___
01.2.2014 ___ 87,000


The partnership deed provided for interest on capital @ 6% per annum. Calculate interest on capitals of the partners.


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Q14 :

'Chennai Fibers Limited' was registered with an authorized capital of Rs 40,00,000 divided into 4,00,000 equity shares of Rs 10 each. The company had issued 1,00,000 shares and the dividend paid per share was Rs 3 for the year 2007 - 08. The management of the company decided to export its readymade apparels to European countries. To meet the requirement of additional funds, the finance manager put up before the Board of Directors the following three alternative proposals :
(i) Issue of 1,54,000 equity shares at par.
(ii) Obtain a loan of Rs 15,40,000 from a financial institution for a period of 5 years. The loan was available @ 12% per annum.
(iii) Issue 16,000, 9% debentures of Rs 100 each at a discount of 10% redeemable in instalments at the end of third, fourth, fifth and sixth year as per details given below :

Year Amount
Rs
III 2,00,000
IV 3,00,000
V 4,00,000
VI 7,00,000

After comparing the alternatives, the company decided in favour of the third alternative and issued debentures on 1.4.2008.
Prepare 9% debentures account for the years 2008 - 09 to 2013 - 14.


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Q15 :

Chopra, Shah and Patel were partners sharing profits in the ratio of 3 : 2 : 1. On 31.3.2014 their firm was dissolved. The assets were realized and liabilities were paid off. The accountant prepared Realisation Account, Partner's Capital Accounts and Cash Account but forgot to post few amounts in these accounts.
You are required to complete the below give accounts by posting correct amounts.
 

Realisation Account

Dr.

Cr.

Particulars

Amount

Rs.

Particulars

Amount

Rs.

To Plant and Machinery

1,60,000

By Sundry Creditors

1,50,000

To Stock

1,50,000

By Mrs. Chopra”™s Loan

1,30,000

To Sundry Debtors

2,00,000

By Repairs and Renewals Reserve

12,000

To Prepaid Insurance

4,000

By Provision for Bad Debts

10,000

To Investments

30,000

By Cash A/c – (Assets sold) :

 

To Chopra”™s Capital A/c

 

Plant

1,00,000

 

(Mrs. Chopra”™s Loan)

1,30,000

Stock

1,20,000

 

To Cash A/c (Dishonoured Bill)

50,000

Debtors

1,60,000

3,80,000

To Cash (Creditors)

1,50,000

By Chopra”™s Capital A/c (Investments)

20,000

To Cash (Expenses)

8,000

”¦”¦”¦”¦

”¦”¦”¦.

 

8,82,000

 

8,82,000

 

 

 

 

 

Partner”™s Capital Accounts

Dr.

Cr.

Particulars

Chopra

Rs

Shah

Rs

Patel

Rs

Particulars

Chopra

Rs

Shah

Rs

Patel

Rs

To Realisation

20,000

 

 

By bal. b/d

 

 

 

(Investments)

 

 

 

 

 

 

 

”¦”¦.

”¦”¦.

”¦”¦.

”¦”¦.

By Realisation

1,30,000

 

 

 

 

 

 

(Loan)

 

 

 

”¦”¦.

”¦”¦.

”¦”¦.

”¦”¦.

”¦”¦.

”¦”¦.

”¦”¦.

”¦”¦.

 

2,30,000

1,50,000

30,000

 

2,30,000

1,50,000

30,000

 

Cash Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

”¦”¦.

”¦”¦.

By Realisation A/c (Dishonoured Bill)

50,000

”¦”¦.

”¦”¦.

By Realisation (Sundry Creditors)

1,50,000

To Patel”™s Capital A/c

10,000

”¦”¦.

”¦”¦.

 

 

By Chopra”™s Capital A/c

1,20,000

 

 


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Q16 :

'Nigam Limited' invited applications for issuing 15,000 equity shares of Rs 10 each at a discount of Rs 1 per share. The amount was payable as follows:
                  On application − Rs 2 per share
                  On allotment − Rs 3 per share
                  On first and final call − Rs 4 per share
Applications for 18,000 shares were received. Shares were issued proportionately to all applicants. Excess money received with applications was adjusted towards sums due on allotment. Ramesh who had applied for 360 share failed to pay allotment, and first and final call money. Naresh to whom 150 shares were allotted failed to pay the first and final call money. Shares of both Ramesh and Naresh were forfeited. Out of the forfeited shares, 200 shares were re-issued at Rs 9 per share as fully paid up. The re-issued shares included all the shares of Naresh.
Pass necessary journal entries for the above transactions in the books of 'Nigam Limited'.


OR


'Guru Limited' invited applications for issuing 80,000 equity shares of Rs 10 each at a premium of Rs 10 per share. The amount was payable as follows:
              On application and allotment − Rs 10 (including Rs 5 premium)
              On first and final call − Rs 10 (including Rs 5 premium)
Applications for 1,00,000 share were received. Applications for 10,000 shares were rejected and application money was refunded. Shares were allotted on pro-rata basis to the remaining applicants. Excess application money received from applicants to whom shares were allotted on pro-rata basis was adjusted towards sums due on first and final call. All calls were made and were duly received except the first and final call money from Kumar who had applied for 1,800 shares. His shares were forfeited. The forfeited shares were re-issued at Rs 9 per share as fully paid up.
Pass necessary journal entries for the above transactions in the books of 'Guru Limited'.


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Q17 :

A, B and C were partners in a firm sharing profits in the ratio of 3 : 2 : 1. On 1.4.2014 their Balance Sheet was as follows :

Liabilities Amount Rs Assets Amount
Rs
Creditors 25,200 Bank 8,200
Provident Fund 3,000 Debtors 60,000  
General Reserve 21,000   Less: Provision 2,000 58,000
Capital Accounts :   Stock 50,000
   A 80,000   Investments 20,000
   B 73,000   Patents 10,000
   C 40,000 1,93,000 Machinery 96,000
  2,42,200   2,42,200
       

On the above date C retired. It was agreed that :

(i) Goodwill of the firm be valued at Rs 5,400.

(ii) Depreciation of 10% was to be provided on machinery.

(iii) Patents were to be reduced by 20%.

(iv) Liability on account of Provident Fund was estimated at Rs 2,500.

(v) C took over investments for Rs 31,700.

(vi) A and B decided to adjust their capitals in proportion to their profit sharing ratio. For this purpose current accounts were opened.

Prepare Revaluation Account and Partners' Capital Accounts on C's retirement.

OR

O, R and S were partners in a firm sharing profits in the ratio of 3 : 2 : 1. On 1.4.2014 their Balance Sheet was as follows :

Liabilities

Amount

Rs

Assets

Amount

Rs

Capital Accounts :

 

R’s Current Account

7,000

O

1,75,000

 

Land and Building

1,75,000

R

1,50,000

 

Plant and Machinery

67,500

S

1,25,000

4,50,000

Furniture

80,000

Current Accounts :

 

Investment

36,500

O

4,000

 

Bills Receivable

17,000

S

6,000

10,000

Sundry Debtors

43,500

General Reserve

15,000

Stock

1,37,000

Profit and Loss Accounts

7,000

Bank

43,500

Creditors

80,000

 

 

Bills Payable

45,000

 

 

 

6,07,000

 

6,07,000

 

 

 

 


On the above date, H was admitted on the following terms :
(i) H will bring Rs 50,000 as his capital and will get 1/6th share in the profits.
(ii) He will bring necessary cash for his share of goodwill premium. The goodwill of the firm was valued at Rs 90,000.
(iii) The new profits sharing ratio will be 2 : 2 : 1 : 1.
(iv) A liability of Rs 7,004 will be created against bills receivables discounted.
(v) The value of stock, furniture and investments is reduced by 20% whereas the value of land and building and plant and machinery will be appreciated by 20% and 10% respectively.
(vi) The Capital accounts of the partners will be adjusted on the basis of H's Capital through their current accounts.
Prepare Revaluation Account and Partner's Current Accounts and Capital Accounts.


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Q18 :

Which of the following transactions will result into flow of cash ?
(i) Cash withdrawn from bank Rs 71,000.
(ii) Issue of 9% debentures of Rs 1,00,000 to the vendors of machinery.
(iii) Received from debtors Rs 74,000.
(iv) Redeemed 10% debentures by converting the same into equity shares.


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Q19 :

The accountant of 'Nav Jeevan Limited' while preparing Cash Flow Statement added the proposed dividend of the current year to net profit while calculating cash flow from operating activities. Was he correct in doing so ? Give reason.


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Q20 :

Under which major heads and subheads will the following items be placed in the Balance Sheet of a company as per Schedule VI Part I of the Companies Act, 1956 :
(i) Bank overdraft.
(ii) Cash and Cash equivalents.
(iii) Securities premium.
(iv) Negative balance of the Statement of Profit and Loss.
(v) Goodwill.
(vi) Trademark.
(vii) 5 years loan obtained from SBI.
(viii) Investments.


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Q21 :

The Current Ratio of a company is 2.5 : 1.5. State with reasons which of the following transactions will increase, decrease or not change the ratio :
(i) Discounted a bills receivable of Rs 10,000 from bank, Bank charged discount of Rs 200.
(ii) A bill receivable Rs 8,000 discounted with bank was dishonoured.
(iii) Cash deposited into bank Rs 7,000.
(iv) Paid cash Rs 5,000 to the creditors.


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Q22 :

The motto of 'Nav Hind Pharma Limited', a company engaged in the manufacturing and distribution of Aurvedic medicines, is 'Healthy India'. Its management and employees are hardworking, honest and motivated. The net profit of the company doubled during the year ended 31.3.2014. Encouraged by its performance, the company decided to pay one month's extra salary to all its employees.
Following is the Comparative Statement of Profit and Loss of the company for the years ended 31.3.2013 and 31.3.2014 :
 

Nav Hind Pharma Limited
Comparative Statement of Profit and Loss
Particulars Note
No.
2012 - 13
Rs
2013 - 14
Rs
Absolute Change
Rs
%
Change
Revenue from operations   40,00,000 60,00,000 20,00,000 5.0
Less : Employees benefit expenses   24,00,000 28,00,000 4,00,000 16.67
Profit before tax   16,00,000 32,00,000 16,00,000 100
Tax @ 50%   8,00,000 16,00,000 8,00,000 100
Profit after tax   8,00,000 16,00,000 8,00,000 100

(i) Calculate New Profit Ratio for the years ending 31.3.2013 and 31.3.2014.
(ii) Identify any two value which 'Nav Hind Pharma Limited' is trying to communicate.


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Q23 :

Following is the Balance Sheets of Wind Power Ltd. as at 31.3.2014 :

Wind Power Ltd.
Balance Sheet as at 31.3.2014
Particulars Note No. 2013–14 Rs 2012–13 Rs
I. Equity and Liabilities :
1. Shareholder's Funds :
     
(a) Share Capital
  48,00,000 44,00,000
(b) Reserves and Surplus
1 12,00,000 8,00,000
2. Non-Current Liabilities :
     
 Long-Term Borrowings
  9,60,000 6,80,000
3. Current Liabilities :
     
(a) Trade Payables
  7,16,000 8,16,000
(b) Short-Term Provisions
  2,00,000 3,08,000
Total   78,76,000 70,04,000
       
II. Assets :
1. Non-Current Assets :
     
(a) Fixed Assets :
     
(i) Tangible
2 42,80,000 34,00,000
(ii) Intangible
3 1,60,000 4,80,000
2. Current Assets :
     
(a) Current Investments
  9,60,000 4,48,000
(b) Inventories
  5,16,000 4,84,000
(c) Trade Receivables
  6,80,000 5,72,000
(d) Cash and Cash equivalents
  12,80,000 16,20,000
Total   78,76,000 70,04,000
       

Notes to Accounts

S. No. Particulars As on
31.3.2014
Rs
As on
31.3.2013
Rs
1. Reserves and Surplus    
  Surplus (Balance in Statement of Profit and Loss) 12,00,000 8,00,000
2. Tangible Assets    
  Machinery 50,80,000 40,00,000
    Less : Accumulated Depreciation (8,00,000) (6,00,000)
3. Intangible Assets    
  Goodwill 1,60,000 4,80,000

Additional Information :

During the year a piece of machinery, costing Rs 96,000 on which accumulated depreciation was Rs 64,000 was sold for Rs 24,000.

Prepare Cash Flow Statement.


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