BRILLIANT PUBLIC SCHOOL, SITAMARHI

59 Pages·2016·3.49 MB·English

BRILLIANT PUBLIC SCHOOL, SITAMARHI
PRELIMINARY EXAMINATION JAN-2015

SUBJECT: CLASS: M/MARK: 80 TIME:
ACCOUNTANCY xII 3 Hours
INSTRUCTIONS:
1. This paper contains two parts PART A and PART B.
2. All questions are compulsory except where options given.
3. Give the necessary working notes
4. Use of calculators is to be avoided.
PART-A
(ACCOUNTING FOR PARTNERSHIP FIRMS AND COMPANIES)
1. Y is a partner in a firm. He withdrew regularly Rs. 3,000 at the
end of every month for the six months ending 31st March, 2014. If
interest on drawings is charged @ 10% p.a. the interest charged
will be:
(a) Rs. 525
(b) Rs. 450
(c) Rs. 375
(d) Rs. 900 (1)
2. Which of the following is NOT true in relation to Goodwill?
(a) It is an intangible asset
(b) It is a fictitious asset
(c) It has a realizable value
1
(d) None of the above (1)

3. What treatment is made of accumulated losses on the retirement
of a partner?
(a) Credited to all partner’s capital accounts in old ratio.
(b) Debited to all partner’s capital accounts in old ratio.
(c) Credited to remaining partner’s capital accounts in new ratio.
(d) Credited to remaining partner’s capital accounts in Gaining
ratio. (1)

4. What is the maximum amount of discount which may be allowed
on reissue of shares? (1)

5. What is Coupon rate? (1)

6. A firm’s average profits are Rs.70,000. It includes an abnormal
profit of Rs.5,000. Capital invested in the business is Rs.5,50,000
and the normal rate of return is 10%. Calculate goodwill at four
times of Super Profit. (3)

7. (a) Give one point of distinction between Reserve capital and
Capital Reserve.
(b) Can Securities Premium reserve amount be utilized for
writing off loss on sale of fixed assets?Give two reasons(1+2=3)

8. ABC Ltd. has 4,000; 8% Debentures of Rs.100 each due for
redemption on 31st March,2010. The company has a debenture
redemption reserve of Rs.1,50,000 on that date. Assuming that
no interest is due, record the necessary journal entries at the time
of redemption of debentures. (3)
2
9. (a) X,Y and Z are partners sharing Profits and losses in the ratio of
16:12:7 with a minmum profit of Rs. 10,000 for Z. The profits for
the year ended March 31, 2014 amounted to Rs.39,500. Pass the
necessary journal entries in the books of the firm.
(b)A, B and C are partners who decided to allocate Rs.1,00,000 for
creating awareness about waste disposal and for providing
education to senior citizens in the neighborhood. Identify two
values which motivated them to take such a decision. (2+2=4)

10. (a) P,Q and R share profits and losses in the ratio of 4:3:2, decide
to share profits and losses in the ratio of 2:3:4 with effect from 1st
April, 2014. Following is an extract of the Balance Sheet as at 31st
March, 2014.
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Investment Fluctuation 54,000 Investments(At cost) 6,00,000
Reserve
Show the accounting treatment under the following case:
If the market value of the Investments is Rs.5,91,000.
(b) They also decided that the gaining partner(s) will not be
charged for the gain in profit share but the gain if any will be used
for providing free health insurance to the employees of their firm.
Identify any two values in the above situation. (4)

3
11. Navin Ltd. issued fully paid equity shares of Rs. 80 each at a
discount of Rs. 5 per share for the purchase of a running business
from Falcon Ltd. for a sum of Rs. 15,00,000.
The assets and liabilities consisted of the following:
Plant Rs. 5,00,000; Vehicles Rs. 7,00,000; Stock Rs. 3,00,000;
Machinery Rs. 6,00,000 and Sundry Creditors Rs. 5,00,000.
You are required to pass the necessary journal entries in the
books of Navin Ltd. (4)

12. Jim, Kim and Tim were partners. They were sharing profits in the
ratio of 3:2:1 respectively. Due to ill health, Kim died on 30th June,
2013. The Balance sheet of Jim, Kim and Tim as on 31st March,
2013 was as follows: (6)
Liabilities Amount(Rs.) Assets Amount(Rs.)
Capitals: Bank 80,000
Jim 50,000 Cash 25,000
Kim 60,000 Stock 30,000
Tim 40,000 1,50,000 Debtors 40,000
----------- Less: 10,000 30,000
Creditors 80,000 -----------
Workmen’s Investments 50,000
Compensation Land 35,000
Fund 20,000
2,50,000 2,50,000
On the date of Kim’s death i.e., on 30th June, 2013, the following
was agreed upon:
(i) Goodwill is to be valued at two years purchase of average
profit of last three completed years which were : 1st Year Rs.
35,000; 2nd year Rs. 30,000 and in 3rd year Rs. 25,000.
4
(ii) Kim’s share of profit till the date of his death will be
calculated on the basis of average profits of last three years.
(iii) Land was undervalued by Rs. 5,000 and Investments were
overvalued by Rs. 10,000.
(iv) Provision for doubtful debts will be created at 5% of
debtors.
(v) Claim of Workmen’s compensation was estimated at
Rs.8,000.
Prepare Kim’s capital account to be presented to his
representatives.

13. What journal entries will be passed for the following transactions
on the dissolution of Firm: (6)
(i) An unrecorded liability of Rs. 2,000 was unpaid.
(ii) Stock worth Rs. 12,000 already transferred to Realization
account, is taken by Partner A.
(iii) There was a contingent liability for Rs. 10,000 for bill
discounted. The bill was received from Hiten who became
insolvent and only 40 % was received from his official
receiver.
(iv) Creditors of Rs. 32,000 already transferred to Realization
account, are discharged by paying Rs. 27,000.
(v) Dissolution expenses amounted to Rs. 5,000.
(vi) Profit on realization amounted Rs. 40,000 to be distributed
between partners A and B in the ratio of 3:2.

5
14. Fine Chemicals Ltd. issued 25,000; 10% debentures of Rs. 100
each. Give Journal entries and the Balance Sheet in each of the
following cases:
(i) Debentures are issued at a premium of 20%.
(ii) Debentures were issued as Collateral Security to Lena Bank
against a Loan of Rs. 20,00,000.
(iii) Debentures are issued at a discount of 10% and redeemable
at premium of 10%. (6)

15. Naman and Suman are partners in a firm. They share profits and
losses in the ratio of 2:1. Since both of them are physically
challenged therefore sometimes find it difficult to run the
business smoothly. So, they request Manav, a common friend to
join their business. Manav soon joins the firm for 1/3rd share . He
brings his share of Goodwill in cash and proportionate capital. At
the time of Manav’s admission, the Balance Sheet of Naman and
Suman was as under:
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Capital Accounts: Machinery 1,20,000
Naman 1,20,000
Furniture 80,000
Suman 80,000
------------- 2,00,000 Stock 50,000
General Reserve 30,000
Sundry Debtors 30,000
Creditors 30,000
Employees’ Provident 40,000 Cash 20,000
Fund 3,00,000
3,00,000
6
It was decided to:
(i) Reduce the value of stock by Rs.5,000.
(ii) Depreciate furniture by 10% and appreciate machinery by
5%.
(iii) Rs. 3,000 of the debtors proved bad. A provision of 5% was
to be created on Sundry Debtors for doubtful debts.
(iv) Goodwill of the firm was valued at Rs.45,000.
Prepare Revaluation Account, partner’s capital accounts and
Balance sheet of the reconstituted firm. Also, Identify any
one value being conveyed in the above situation (7+1=8)
OR
The Balance Sheet of A, B and C who were sharing profits in the
ratio of 5:3:2 as at 31st March, 2014 is as follows:
Liabilities Amount( Assets Amount(
Rs.) Rs.)
Capitals: Fixed Assets 60,000
A 40,000
Stock 80,000
B 62,000
C 33,000 1,35,000 Sundry Debtors 1,00,000
------------
Cash at Bank 40,000
Profit and Loss A/c 85,000
Employees Provident 10,000
Fund

Creditors 50,000
2,80,000 2,80,000
A retired on 31st March, 2014 further B and C decided to share
profits in future in the ratio of 3:2 respectively.
The other terms on retirement were:
7
(i) Goodwill of the firm is to be valued at Rs.80,000.
(ii) Fixed Assets are to be depreciated to Rs. 57,500.
(iii) Make a Provision for Doubtful Debts at 5% on Debtors.
(iv) A liability for claim, included in creditors for Rs.10,000, is
settled at Rs.8,000.
The amount to be paid to A by B and C is in such a way that
their capitals are proportionate to their profit-sharing ratio
and leaves a balance of Rs.15,000 in the Bank Account.
Prepare Profit and Loss Adjustment Account and Partners
Capital accounts. (8)

16. PQR Ltd. issued 60,000 shares of Rs. 10 each at a premium of 20%
payable as follows:
On Application Rs.5(including premium); On Allotment Rs.3; and
On First and Final Call Rs.4.
The company received applications for 75,000 shares and
allotment was made as follows:
List I Applications for 40,000 shares were allotted in full.
List II Applications for 25,000 shares were allotted 20,000 shares.
List III Applications for 10,000 shares were allotted Nil shares.
A shareholder to whom 200 shares were allotted under List I paid
full amount due on shares along with allotment money. Another
shareholder holding 600 shares failed to pay the amount due on
call. His shares were forfeited and 500 of these shares were
subsequently re-issued as fully paid @Rs.11 per share.
Pass journal entries in the books of the company. (8)
OR
8
Pass Journal entries for forfeiture and reissue in the following
cases:
(a) X Ltd. forfeited 20 shares of Rs. 10 each, Rs.7 called-up on
which Anup had paid application and allotment money of
Rs.5 per share. Of these, 15 shares were reissued to Bimal
as fully paid-up for Rs.6 per share.
(b) A Ltd. forfeited 10 shares of Rs.10 each, Rs.6 called-up
issued at a discount of 10% to Sneha on which she had paid
Rs. 2 per share. Out of these, 8 shares were reissued to
Mohan as Rs.8 called-up for Rs.6 per share.
(c) P Ltd. forfeited 400 shares of Rs.10 each, fully called-up,
held by Kumar for non-payment of the final call money of
Rs.4 per share. These shares were subsequently reissued to
Sunil at Rs. 11 per share as fully paid-up. (3+3+2=8)
PART-B (FINANCIAL STATEMENTS ANALYSIS)
17. What is Operating Cycle? (1)

18. What do you mean by Solvency? (1)

19. Rent received by a Real Estate Business will be shown under:
(a) Investing Activities
(b) Operating Activities
(c) Operating and Investing activities
(d) None of the above. (1)

20. Galaxy Ltd. has authorized capital of Rs. 50,00,000 divided into
equity shares of Rs.10 each. The company invited applications for
3,00,000 shares. Applications for 2,75,000 shares were received.
9
All calls were made and were duly received except the final call of
Rs. 3 per share on 5,000 shares. 4,000 of the shares on which the
final call was not received were forfeited. Show how the Share
Capital will appear in the Balance Sheet of the company. Also
prepare the notes to accounts. (3)

21. From the following Balance sheets of Moonstar Ltd. prepare
Comparative Balance sheet as at 31st March, 2013 and 2014. (4)

Balance sheet
as at 31st March, 2013 and 2014
Particulars 31.3.2013 31.03.2014
(Rs.) (Rs.)
I. EQUITY AND LIABILITIES
1. Shareholder’s Funds
Share Capital 3,44,000 4,26,000
2. Non-Current Liabilities
Long-term Borrowings 4,38,000 6,96,000
3. Current Liabilities 78,000 2,98,000
Total 8,60,000 14,20,000

II. ASSETS

1. Non-Current Assets

(a) Fixed Assets
4,30,000 5,68,000
(b) Investments
4,000 6,000
2. Current Assets
4,26,000 8,46,000
Total
8,60,000 14,20,000

10