Highly Recommended Accountancy Book --- Ultimate Book of Accountancy CBSE Class 12th

Ultimate Sample Paper – 2

CBSE Examination – 2022-23

1. Vinod and Satish are partners sharing profits in the ratio of 7:3. Simran was admitted [1]
for 20% share in profits which she took 75% from Vinod and remaining from Satish.
Sacrificing Ratio of Vinod and Satish ______ (Source: Ultimate Book of Accountancy CBSE class 12th)
(a) 2:1 (b) 3:1
(c) 3:2 (d) 2:3

2. Assertion (A): [1]

Business of a partnership firm can be carried on by all or any of the Partners Acting for
all. (Source: Ultimate Book of Accountancy CBSE class 12th)
Reason (R)
Partners are agents as well as the principals.
(a) Only (A) is Correct but (R) is wrong
(b) Both (A) and (R) are correct but (R) is not the correct explanation of (A)
(c) Both (A) and (R) are incorrect
(d) Both (A) and (R) are correct and (R) is the correct explanation of (A)

3. Vinod Ltd. invited applications for issuing 1,00,000 Equity Shares @10 each at a [1]
premium of 60%. The amount per share was payable as follows:
On Applications ……………………………….. Rs.5 (including Premium Rs.3)
On Allotment …………………………………… Rs.7 along with Premium Rs.2
On First & Final Call …………………………..Balance amount
(Source: Ultimate Book of Accountancy CBSE class 12th)
How much total amount is to be called on first and final call?
(a) Rs.4 per share (b) Rs.3 per share
(c) Rs.5 per share (d) Rs.2 per share

OR
When issuing _________ Debentures, A charge on the assets of the company is registered
with the Registrar of Companies. (Source: Ultimate Book of Accountancy CBSE class 12th)
(a) Secured Debentures (b) Unsecured Debentures
(c) Both Secured and Unsecured Debentures (d) None of these

4. Vinod, David and Satish are sharing profits and losses in the ratio of 5:3:2. They decide [1]
to share future profits and losses in the ratio of 2:3:5 with effect from 1st April 2022.
They also decided to record the effect of following without charging their book values.
Profit and Loss Account (Cr.) ………………………… 80,000
Advertisement Suspense A/c (Dr.) …………………50,000
(Source: Ultimate Book of Accountancy CBSE class 12th)
Which of the following is the correct treatment of the above?
(a) Vinod’s Capital A/c Dr. 30,000
To Satish’s Capital A/c 30,000
(b) Satish’s Capital A/c Dr. 30,000
To Vinod’s Capital A/c 30,000

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(c) Satish’s Capital A/c Dr. 9,000

To David’s Capital A/c 9,000

(d) Satish’s Capital A/c Dr. 9,000

To Vinod’s Capital A/c 9,000

OR

A, B and C are partners sharing profits in the ratio of 3:2:1. On 1st October, 2021, B gave
a loan of Rs.6,00,000 to the firm and on 1st December 2021 firm gave a loan of
Rs.1,00,000 to C. There is no agreement as to the rate of interest on loan. Firm made a
profit of Rs.24,000 before interest on loan adjustment.
(Source: Ultimate Book of Accountancy CBSE class 12th)
How much profit/loss partner A will get?
(a) Profit Rs.3,000 (b) Loss Rs.3,000
(c) Loss Rs.6,000 (d) Profit Rs.2,000

5. X, Y and Z are partner sharing profits and losses in the ratio of 3:3:4. Their capital at the [1]
end of the year 31st March 2022 were X Rs.4,00,000, Y Rs.5,50,000 and Z Rs.6,00,000.
Y’s drawings during the year were Rs. 9,550. As per the partnership deed, interest on
capital @9% p.a. on opening capital has been allowed to them. Divisible profits during
the year after providing interest on capital was Rs.48,500.
(Source: Ultimate Book of Accountancy CBSE class 12th)
Y’s opening capital _____________
(a) Rs.5,09,000 (b) Rs.5,50,000
(c) Rs.5,45,000 (d) Rs.5,00,000

6. Vinod Ltd. issued ____________ 8% Debentures of Rs.100 each at a premium of 6% and to [1]
be redeemed at 10% premium. At the time of writing off loss on issue of debentures,
statement of profit and loss was debited with Rs.72,000.
(Source: Ultimate Book of Accountancy CBSE class 12th)
Number of Debentures issued by the company?
(a) 18,000 Debentures (b) 20,000 Debentures
(c) 25,000 Debentures (d) 15,000 Debentures

OR
Vinod Ltd. issued 48,000, 9% Debentures of Rs.100 each at a discount of 5% and to be
redeemed at a premium of _______________%
Existing Balance of Securities Premium Account before issuing of these debentures was
Rs.8,00,000 and after writing off loss on issue of debentures, the balance of Securities
Premium Account was Rs.32,000.
(Source: Ultimate Book of Accountancy CBSE class 12th)
At what rate of Premium these debentures to be redeemed?
(a) 10% (b) 11%
(c) 12% (d) 15%

7. Vinod Ltd. invited applications for 50,000 Equity Shares of Rs.10 each at a premium of [1]
20%. Full amount was payable on Application.

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Applications were received for 65,000 shares, out of which, 5,000 applications were
rejected and pro rata allotment was made to the remaining applicants.
(Source: Ultimate Book of Accountancy CBSE class 12th)
How much amount was refunded by Vinod Ltd?
(a) Rs.60,000 (b) Rs.50,000
(c) Rs.1,80,000 (d) Rs.1,50,000
8. X, Y and Z sharing profits in the ratio of 2:2:1. On 1st April, 2022 X retired from the firm. [1]
His capital balance was Rs.2,00,000 on that date. General Reserve appears in the
Balance Sheet Rs.60,000. Revaluation Gain was Rs.77,000. Goodwill of the firm
calculated Rs.3,00,000.
(Source: Ultimate Book of Accountancy CBSE class 12th)
He was paid Rs.1,24,800 in cash and balance was transferred to his loan account.
Amount transferred to X’s Loan Account ______
(a) Rs.3,00,000 (b) Rs.2,80,000
(c) Rs.2,60,000 (d) Rs.2,50,000

OR

Vinod, Mohan and Sohan are sharing profits in the ratio of 3:2:1. Their drawings during
the year were: Rs.60,000; Rs.30,000 and Rs.10,000. Interest on drawings to be charged
@8% p.a.
(Source: Ultimate Book of Accountancy CBSE class 12th)
Firm made a net loss of Rs.5,800 during the year as per the Profit & Loss Account.
How much Profit/loss is to be provided to Mohan?
(a) Loss Rs.1,933 (b) Loss Rs.900
(c) Profit Rs.1,400 (d) Loss Rs.600

9. Read the following hypothetical situation and answer Question No. 9 and 10. [1]
Vinod and Satish were partners sharing profits and losses in the ratio of 7:3.
(Source: Ultimate Book of Accountancy CBSE class 12th)
Vinod withdrew Rs. ________ in the beginning of each month.
Satish withdrew Rs.__________ during the year.
Interest on drawings charged @8% p.a.
Profit and Loss Appropriation Account 31.3.2022
Particulars Amount Particulars Amount
To Interest on Capital: By Profit and Loss A/c 1,00,000
Vinod 60,000 By Interest on drawings:
Satish 40,000 Vinod 2,080
Distribution of profit: Satish 1,040 3,120
To Vinod’s Capital A/c 2,184
To Satish’s Capital A/c 936
1,03,120 1,03,120

Drawings made by Vinod During the year Rs. _____________

(a) Rs.48,000 (b) Rs. 26,000
(c) Rs.30,000 (d) Rs.35,000

10. Drawings made by Satish during the year Rs.__________ [1]

(a) Rs.26,000 (b) Rs.13,000

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(c) Rs.24,000 (d) Rs.20,000

11. Choose the correct sequence of the following events in context of partnership deed: [1]
(i) Capital Contributed by each partner
(ii) Submission of partnership deed for registration to the ‘Registrar of firms’
(iii) Profit/Loss sharing ratio
(iv) Name and address of the partners and firm
(Source: Ultimate Book of Accountancy CBSE class 12th)
Find Correct sequence:
(a) (iv), (iii), (i), (ii) (b) (i), (iv), (iii), (ii)
(c) (iv), (i), (iii), (ii) (d) (iv), (ii), (i), (iii)

12. If 1000 shares of Rs.10 each premium 30% on which only application money Rs.3 per [1]
share was received were forfeited for non-payment of allotment of Rs.6 (including
premium) and First & Final Call of balance amount.
These shares were reissued @ Rs.8 per share fully paid up.
(Source: Ultimate Book of Accountancy CBSE class 12th)
How much amount is to be transferred to the capital reserve?
(a) Rs.6,000 (b) Rs.3,000
(c) Rs.4,000 (d) Rs.1,000

13. Which of the following statement is not correct? [1]

(a) Section 53 of the Companies Act 2013 does not allow issue of shares at discount
(b) Section 52 (2) of the Companies Act 2013 restricts the use of amount received as
Securities Premium.
(c) Section 54 allows a company to issue its shares at discount when they are issued as
Sweat Equity Shares
(d) Balance Sheet of a company is prepared as per the Schedule-II of the companies Act
2013. (Source: Ultimate Book of Accountancy CBSE class 12th)

14. X and Y were partners. They admit Z and new profit sharing ratio was decided 9:6:5. [1]
Capitals of X and Y were adjusted in new profit sharing ratio, on the basis of capital
brought in by Z. (Source: Ultimate Book of Accountancy CBSE class 12th)
If new capital of X and Y Rs.5,40,000 and Rs.3,60,000, find out the amount brought in by
X as his capital?
(a) Rs.3,00,000 (b) Rs.3,50,000
(c) Rs.4,00,000 (d) Rs.4,50,000

15. Vinod and Manoj are partners. Interest on Vinod’s drawings was calculated Rs.264 at [1]
the rate of 8% p.a. Vinod withdrew an amount for his personal use at the end of each
month. (Source: Ultimate Book of Accountancy CBSE class 12th)
His monthly drawings were ____________
(a) Rs.500 (b) Rs.600
(c) Rs.800 (d) Rs.1,000

16. At the time of Dissolution of a partnership firm, creditors given in the Balance Sheet [1]
Rs.1,70,000. They accepted Stock valued Rs.2,20,000 and paid cash to the firm
Rs.50,000. (Source: Ultimate Book of Accountancy CBSE class 12th)
Entry for the above settlement:

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(a) Realisation A/c Dr. 50,000

To Cash A/c 50,000

(b) Cash A/c Dr. 50,000

Creditors A/c Dr.1,70,000
To Stock 2,20,000

(c) Cash A/c Dr. 50,000

To Realisation A/c 50,000

(d) Cash A/c Dr. 50,000

Creditors A/c Dr. 1,70,000
To Realisation A/c 2,20,000

17. X, Y and Z are partners sharing profits in the ratio of 5:3:2. Y died after 3 months from [3]
the date of last Balance Sheet (31.3.2022). As per the agreement deceased partner’s
share is to be calculated on the basis of Average Profit for the last 5 years plus 25%. The
profits of last 5 years were: (Source: Ultimate Book of Accountancy CBSE class 12th)
31st March 2018 …………………………………… Rs.9,000
31st March 2019 …………………………………… Rs.11,000
31st March 2020 …………………………………… (Rs.10,000 Loss)
31st March 2021 …………………………………… Rs.12,000
31st March 2022 …………………………………… Rs.18,000
Calculate Y’s share and give entry for the same.

18. Vinod and George were partners sharing profits in the ratio of 5:3. Their fixed capitals [3]
on 31stMarch 2021 were: Vinod Rs.3,00,000 and George Rs.4,00,000. As per the
partnership deed interest on capital is allowed @12% p.a. profit at the end of the year
31st March 2022 before providing interest on capital was Rs.63,000.
(Source: Ultimate Book of Accountancy CBSE class 12th)
Give necessary journal entries for the above showing your working clearly.
OR
X, Y and Z sharing profits in the ratio of 2:2:1. Their partnership deed provided the
following: (Source: Ultimate Book of Accountancy CBSE class 12th)
(i) X’ guaranteed that he will earn an annual fee of Rs.1,60,000 for the firm.
(ii) Z was guaranteed a profit of Rs.70,000 and any deficiency arising will be borne by X
and Y in the ratio of 3:2.
During the year X earned fee of Rs.1,40,000 and profit of the firm was Rs.80,000 before
providing above.
Prepare Profit and Loss Appropriation Account.

19. VK Ltd. purchased the following Assets of Norway Ltd: [3]

Book value Agreed Value
Land 30,00,000 38,00,000
Machinery 19,00,000 15,00,000
The purchase consideration was Rs.50,00,000. Payment was made by accepting a Bill of
Exchange in favour of Norway Ltd., of Rs.2,00,000 and remaining by issue of 10%
Debentures of Rs.100 each at a premium of 20%.
(Source: Ultimate Book of Accountancy CBSE class 12th)

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Give necessary journal entries for the above.

OR

VK Ltd. purchased a running business from Koyal Ltd. for a sum of Rs.10,00,000. An
amount of Rs.1,20,000 was paid through a cheque and Balance by issuing Equity Shares
of Rs.10 each. (Source: Ultimate Book of Accountancy CBSE class 12th)
The assets and liabilities consisted the following:
Book value Agreed Value
Land & Building 5,70,000 6,50,000
Machinery 2,80,000 2,50,000
Stock 2,20,000 2,20,000
Creditors 80,000 80,000
Give entries for the above.

20. X, Y and Z are partners with fixed capitals, sharing profits in the ratio of 3:2:1 [3]
respectively. From 1st April 2015 they decided to share profits in the ratio of 2:3:1. The
partnership deed provides that in the event of any change in profit sharing ratio, the
goodwill should be valued at 3 years purchase of the average of five years profits. Profits
and losses of last five years were:
(Source: Ultimate Book of Accountancy CBSE class 12th)
1st Year Rs.30,000; 2nd Year Rs.75,000; 3rd year Rs.85,000; 4th Year Rs.95,000 and 5th
Year Rs.35,000 (loss). Give adjustment entry to record this change.

21. On 1st April, 2012, Kamya Ltd. was formed with an authorised capital of Rs. 40,00,000 [4]
divided into 4,00,000 equity shares of Rs.10 each. The company issued prospectus
inviting applications for 3,80,000 equity shares. The company received applications for
3,60,000 equity shares. During the first year, Rs. 8 per share were called. Deepti holding
3,000 shares and Divya holding 6,000 shares did not pay first call of Rs. 2 per share.
Divya’s shares were forfeited after the first call and later on 5,000 of the forfeited shares
were re-issued at Rs. 6 per share, Rs. 8 called up.
(Source: Ultimate Book of Accountancy CBSE class 12th)
(a) ‘Share Capital’ in the Balance Sheet of the company as per revised Schedule III of the
Companies Act, 2013.
(b) Also prepare ‘Notes to Accounts’.

22. Sanju and Suman were partners in a firm sharing profits in the ratio of 2:3. On 31.3.2022 their [4]
Balance Sheet was as follows: (Source: Ultimate Book of Accountancy CBSE class 12th)

Liabilities Amount (Rs.) Assets Amount (Rs.)

Capitals : Sanju 2,00,000 Land and Building 3,00,000
Suman 3,00,000 5,00,000 Stock 1,00,000
Creditors 1,05,000 Debtors 1,50,000
General Reserve 1,00,000 Bank 1,55,000
7,05,000 7,05,000
The firm was dissolved on 1.4.2022 and the assets and liabilities were settled as follows:
(i) Sanju agreed to take over Land and Building at Rs.3,50,000 by paying cash.
(ii) Stock was sold for Rs.90,000.
(iii) Creditors accepted debtors in full settlement of the firm.

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Pass necessary journal entries for dissolution of the firm ignoring entries related to transfer of
assets and liabilities in Realisation Account.
23. Vinod Limited invited applications for 10,000 Equity Shares of Rs.10 each at a premium [6]
of 80% payable as follows:
On Application …………………………………… Rs.8 (including premium Rs.4)
On Allotment ………………………………….. Rs.3 along with premium of Rs.2
On First Call …………………………………….. Rs.3 (including premium Rs.1)
On Second & Final Call ……………………. Balance along with remaining premium
Applications were received for 30,000 shares and allotment was made as follows:
(Source: Ultimate Book of Accountancy CBSE class 12th)
Group (a) ………. Applicants of 10,000 shares………………… Nil
Group (b) ………. Applicants of 8,000 shares ……………. Only 20% of the applied shares
Group (c) ………. Applicants of 7,000 shares ……………..Only 60% of the applied shares
Group (d) ………. Applicants of 5,000 shares …………………. Remaining shares
Excess application money was utilized on allotment and first call only. Mr. David from
group (d) who applied for 250 shares did not pay the second & Final Call and his shares
were forfeited immediately. Out of the forfeited shares only 1/3rd were issued at a
discount of 20% from the maximum discount available in forfeiture account on these
shares. Give journal entries.
OR

(a) M Ltd forfeited Mr. M’s shares who has applied for 600 shares and was allotted 400
shares failed to pay allotment money of Rs. 4 per share including premium of Rs. 2 on
which he had paid application money of Rs. 2 only. Pass necessary journal entries for
forfeiture of shares by opening call in arrear, call in advance account.
(Source: Ultimate Book of Accountancy CBSE class 12th)

(b) Fukrey Ltd forfeited 50 shares of Rs. 10 each, for non- payment of final call money
of Rs. 3 per share. Out of these 20 shares were reissued to Ram at Rs. 8 per share. Record
the journal entries for forfeiture and reissue of shares assuming that the company
maintains call in arrear, call in advance account.
(Source: Ultimate Book of Accountancy CBSE class 12th)

24. Following is the Balance Sheet of AK and BK as at 31st March, 2014 : [6]

Liabilities Amount Assets Amount

Creditors 13,000 Bank 15,000
Employees Provident Fund 8,000 Debtors 22,000
Workmen Compensation Fund 15,000 Less : Provision 1,000 21,000
Contingency Reserve 20,000 Stock 10,000
Capitals: 55,000 Plant & machinery 60,000
AK 30,000 Goodwill 10,000
BK P/L A/c 5,000
Preliminary Expenses 12,000
Advertisement suspense 8,000
1,41,000 1,41,000
CK was admitted as a partner for ¼ share in the profits of the firm. It was decided
that : (Source: Ultimate Book of Accountancy CBSE class 12th)
(a) Bad Debts amounted to Rs. 1,500 will be written off.

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(b) Stock worth Rs. 8,000 was taken over by AK & BK at Book value in their profit
sharing ratio. The remaining stock was valued at Rs. 2,500.
(c) Plant & Machinery and goodwill were valued at Rs. 32,000 and Rs. 20,000
respectively.
(d) CK brought her share of goodwill in cash.
(e) CK will bring proportionate capital and the capital of AK and BK will be
adjusted in their profit-sharing ratio by bringing in or paying off cash as the case
may be.
Prepare Revaluation Account, Partner’s Capital Accounts and Balance Sheet.

OR

Following is the Balance Sheet of KK, SK and VK as on 31st March 2015, who have agreed to share
profits and losses in proportion of their capitals:
Liabilities Amount Assets Amount
Capitals : KK 4,00,000 Land & Building 4,00,000
SK 6,00,000 Machinery 6,00,000
VK 4,00,000 14,00,000 Closing Stock 2,00,000
Employee Provident Fund 70,000 Debtors 2,20,000
Workmen compensation fund 30,000 Less : Provision 20,000 2,00,000
Sundry Creditors 1,00,000 Cash at Bank 2,00,000
16,00,000 16,00,000
On March 31st 2015, KK desired to retire from the firm and the remaining partners decided to carry
on the business. It was agreed to revalue the assets and re-assess the liabilities on that date, on
the following basis: (Source: Ultimate Book of Accountancy CBSE class 12th)
(a) Expenses of Rs.10,000 are due. Land and Building be appreciated by 30%.

(b) Machinery be depreciated by 20%. Office equipment Rs.8,000 were found unrecorded.

(c) There were Bad Debts of Rs.34,000 which were to be adjusted against the provision given in the
balance sheet for the same. KK took over 10% of the stock at 25% discount.

(d) The claim on account of workmen compensation fund was estimated at Rs.16,000.

(e) Goodwill of the firm was valued at Rs.2,80,000 and KK’s share of goodwill was adjusted against
the capital accounts of the continuing partners SK and VK who have decided to share future profits
in the ratio of 4:3 respectively.

Capital of the new firm in total will be the same as before the retirement of KK and will be in the
new profit sharing ratio of the continuing partners.

Amount due to KK be settled by paying Rs.1,00,000 in cash and balance by transferring to her Loan
A/c which will be paid later on.

Prepare Revaluation A/c, Partners’ Capital A/c and Balance Sheet of new firm.

25. A, B and C were partners in a firm sharing profits in proportion of their capitals. On 31st March [6]
2022 their Balance Sheet was as follows:

Liabilities Amount Assets Amount

Capitals : A 40,000 Building 1,40,000
B 60,000 Machinery 60,000

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C 1,00,000 2,00,000 Stock 8,000

Creditors 16,000 Debtors 12,000
General Reserve 12,000 Cash in hand 8,000
2,28,000 2,28,000
th
B died on 30 June 2022. Under the partnership agreement the executors of a deceased partner
were entitled to: (Source: Ultimate Book of Accountancy CBSE class 12th)

(i) Amount standing to the credit of deceased Partner’s Capital Account

(ii) Interest on Capital @12% p.a.

(iii) Share of goodwill, The goodwill of the firm on B’s death was valued at Rs.2,40,000.

(iv) Share of profit from the closing of last financial year to the date of death on the basis of last
year’s profit. The profit of the last accounting year was Rs.15,000.

Prepare B’s Capital Account to be rendered to his executors.

26. On 1st April 2020 Vinod Ltd. invited applications for 8,000, 12% Debentures of Rs. 50 [6]
each at a discount of 10% and redeemable at a premium of 5% after 5 years. The whole
amount was payable on application. Allotment was made as follows:
(Source: Ultimate Book of Accountancy CBSE class 12th)
Category 1 Applied 5,000……………………. Allotted 4,000
Category 2 Applied 4,000……………………. Allotted 3,000
Category 3 Applied 2,000……………………. Allotted 1,000
Category 4 Applied 1,000……………………. Nil
Interest on Debentures is payable half-yearly on 30th September and 31st March.
You are required to answer the following questions:
(i) How much amount of Discount to be debited?
(ii) How much premium on redemption is to be credited?
(iii) How much amount is refunded by the company?
(iv) How much interest is paid on 30th September 2020 and 31st March 2021?
(v) Give entry for writing off, interest, Discount and loss on issue of Debentures.

27. Loans repayable on Demand are shown under: [1]

(a) Non-current Liabilities (b) Other Current Liabilities
(c) Short-term Borrowings (d) Contingent Liabilities
Ans. (c)
OR
Identify the correct statements:
(i) While calculating Trade Receivable Turnover Ratio, Provision for doubtful debts is
not deducted from the Trade Receivables.
(ii) While calculating Current Ratio, Provision for Doubtful Debts is deducted from the
Trade Receivables.
Choose the correct option: (Source: Ultimate Book of Accountancy CBSE class 12th)
(a) Only Statement (i) is correct (ii) Only Statement (ii) is correct
(c) Both (i) and (ii) statements are correct (iii) Both (i) and (ii) Statements are incorrect
28. Current Ratio of Vinod Ltd. is 1.5:1 and working capital is Rs.1,00,000. [1]
Current Liabilities of the firm will be ___________
(Source: Ultimate Book of Accountancy CBSE class 12th)
(a) Rs.50,000 (b) Rs. 1,00,000

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(c) Rs. 2,00,000 (d) Rs. 1,50,000

29. On 1st October 2021, Vinod Ltd. issued 25,000, 9% Debentures of Rs.100 each at a [1]
premium of 20%. The company paid interest to debenture holders on time i.e. 31st
March 2022. (Source: Ultimate Book of Accountancy CBSE class 12th)
Cash inflow/outflow from Financing Activities:
(a) Rs. 3,00,000 inflow (b) Rs.25,00,000 Outflow
(c) Rs.28,87,500 inflow (d) Rs. 22,75,000 inflow

OR

Vinod Ltd. has provided the following information:

Particulars 31st March 2022 31st March 2021

7% p.a. Bank Overdraft -- 40,000
Cash Credit 10,000 30,000
th
Bank overdraft was fully settled on 30 June 2021 with interest and interest paid on Cash Credit
Rs.1,300. (Source: Ultimate Book of Accountancy CBSE class 12th)

Cash inflow/outflow from financing activities will be ____________

(a) Rs.62,000 outflow (b) Rs.61,300 outflow

(c) Rs. 60,000 outflow (d) Rs.62,300 outflow

30. Vinod Ltd. had provided the following information: [1]

Particulars 31st March 2022 31st March 2021

Office Equipment 1,40,000 1,20,000
A part of office equipment costing Rs.35,000 (Depreciation provided thereon Rs.15,000) was sold
for Rs.35,000. Depreciation charged during the year was Rs.45,000.

(Source: Ultimate Book of Accountancy CBSE class 12th)

Office Equipment purchased during the year ______

(a) Rs.85,000 (b) Rs.88,000

(c) Rs.90,000 (d) Rs.80,000

31. Classify the following items under Major heads and sub-head (if any) in the Balance [3]
Sheet of a Company as per the Schedule III of the Companies Act 2013.
(i) Provision for Employees benefits
(ii) Mastheads and Publishing Titles
(iii) Premium payable on Redemption of Debentures
(iv) Proposed Dividend
(v) Rent paid in advance
(vi) Provision for warranties

32. State any three limitations of Financial Statement Analysis. [3]

33. Calculate Debt (long-term debt) to Capital Employed Ratio: [4]

Equity Share Capital ………………………………………… Rs.8,00,000

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Balance in Statement of P/L……………………………….Rs.2,00,000

9% Debentures …………………………………………………Rs.5,00,000
Current Liabilities ……………………………………………..Rs.1,00,000
Non-current Assets …………………………………………..Rs. 13,00,000
Current Assets ………………………………………………… Rs.3,00,000

OR

(a) Compute ‘Debtors Turnover Ratio’ from the following information:

Total Sales Rs.5,20,000, Cash Sales 60% of the Credit Sales, Closing Debtors Rs.80,000,
Opening Debtors are 3/4th of Closing Debtors.
(b) Current Liabilities of a company are Rs.1,60,000. Its Liquid Ratio is 1.5:1 and
Current Ratio is 2.5:1. Calculate Quick assets and Current assets.

34. From the following information and extracts of Balance Sheet of Satish Ltd. as at 31 st [6]
March 2020 and 31st March 2021, find out:

(i) Cash flow From Operating Activities

(ii) Cash flow from Investing Activities

Particulars 31.3.2021 31.3.2020

Surplus i.e., Statement of Profit and Loss 2,40,000 1,40,000

General Reserve 40,000 30,000

Provision for Tax 1,20,000 90,000

Trade payables 32,000 44,000

Patents 50,000 1,50,000

10% Debentures 1,20,000 10,000

Trademarks 15,000 12,000

-------------------------------------------------------------------

Machinery (at cost) 2,90,000 2,45,000

Accumulated Depreciation on Machinery 30,000 40,000

Note: Proposed dividend for the year 2019-20 and 2020-21 were Rs. 40,000 and Rs. 50,000
respectively. (Source: Ultimate Book of Accountancy CBSE class 12th)

Additional Information:

(a) The company provided depreciation on Plant & Machinery amounting to Rs. 24,000.

(b) A machine had been condemned and scrapped

(c) Interest of Rs. 12,000 paid on Debentures

(d) Tax paid Rs. 50,000

(e) Patents worth Rs. 30,000 were written off while some patents were sold for Rs. 75,000
at a profit of Rs. 5,000. No new patents were purchased.

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(f) Dividend proposed in 2019-20 was approved by the shareholders and paid by the
company.

Answers of Ultimate Sample Paper – 2

1. (b) 3:1

She took 75% from Vinod and Raman 25% from Satish 75:25 OR 3:1

2. (d)

3. (d) and answer of OR part is (a)

4. (d) and answer of OR part is (a)

5. (d)

6. (a) and answer of OR part is (b)

7. (c)

8. (d) and answer of OR part is (d)

9. (a)

10. (a)

11. (c)

12. (d)

13. (d)

14. (a)

15. (b) Available on Amazon

16. (c)

17. Profit and Loss Suspense A/c Dr. 750

To Y’s Capital A/c 750

Working Note:

Average Profits = 9,000 + 11,000 – 10,000 + 12,000 + 18,000 = 40,000/5 = 8,000

= 8,000 + 25% = 10,000

Estimated profit till date of death = 10,000 x 3/12 = 2,500

Y’s share of profit = 2,500 x 3/10 = 750

18. Profit and Loss A/c Dr. 63,000

To Profit and Loss Appropriation A/c 63,000

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(Being profit transferred)

Interest on Capital A/c Dr. 63,000

To Vinod’s Current A/c 27,000

To George’s Current A/c 36,000

(Being interest on capital credited to partners)

Profit and Loss Appropriation A/c Dr. 63,000

To Interest on Capital A/c 63,000

(Being interest on capital transferred to profit and loss appropriation account)

Working Note: Interest on Capital : Vinod = 36,000 and George Rs.48,000

Total interest = 84,000

Since profit is insufficient, interest on capital to be provided in the ratio of 36,000: 48,000 i.e., 3:4

Vinod = 63,000 x 3/7 = 27,000 and George = 63,000 x 4/7 = 36,000

OR

Profit and Loss Appropriation Account

Particulars Amount Particulars Amount

Distribution of Profit: By Profit and Loss A/c 80,000
To X’s Capital A/c 40,000 By X’s Capital A/c
Less: Guaranteed profit 30,000 10,000 1,60,000 – 1,40,000 20,000

To Y’s Capital A/c 40,000

Less: Guaranteed profit 20,000 20,000

To Z’s Capital A/c 20,000

Add: From X 30,000
Add: From Y 20,000 70,000

1,00,000 1,00,000

19. Land A/c Dr. 38,00,000

Machinery A/c Dr. 15,00,000
To Norway Ltd. 50,00,000
To Capital Reserve (Bal. Fig.) 3,00,000
(Being Assets taken over from Norway Ltd.)

Norway Ltd. Dr. 50,00,000

To Bills Payable A/c 2,00,000
To 10% Debentures A/c 40,00,000
To Securities Premium A/c 8,00,000

Number of debentures issued = 50,00,000 – 2,00,000 = 48,00,000/120 = 40,000

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OR

Land and Building A/c Dr. 6,50,000

Machinery A/c Dr. 2,50,000
Stock A/c Dr. 2,20,000
To Sundry Creditors 80,000
To Koyal Ltd. 10,00,000
To Capital Reserve (Bal. fig.) 40,000
(Being purchase of business of Koyal Ltd.)

Koyal Ltd. Dr. 10,00,000

To Equity Share Capital A/c 8,80,000
To Bank A/c 1,20,000
(Being purchase consideration settlement made)

Number of Equity Shares issued = 8,80,000/10 = 88,000

20. Y’s Current A/c Dr.25,000

To X’s Current A/c 25,000
(Being goodwill adjusted)

Working Note :
Average Profit = 30,000 + 75,000 + 85,000 + 95,000 – 35,000 (loss) = 2,50,000/5 = 50,000
Goodwill = 50,000 × 3 = 1,50,000
X’s Sacrifice = 3/6 – 2/6 = 1/6
Y’s Gain = 2/6 -3/6 = (1/6)
Z = No gain/No sacrifice

21. Balance Sheet

Particulars Note No. Amount

I. Equity and Liabilities
1. Shareholders’ funds:
(a) Share Capital 1 28,72,000

Notes to Accounts
1. Share Capital
Authorised Capital :
4,00,000 equity shares of Rs 10 each 40,00,000
Issued Capital

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3,80,000 equity shares of Rs 10 each 38,00,000

Subscribed Capital
Subscribed but not fully paid
3,59,000 shares of Rs 10 each, Rs. 8 called up 28,72,000
Less: Calls in arrears (6,000)
Add: Share forfeiture A/c 6,000 28,72,000

22. Journal
Date Particulars L.F Debit Credit
(i) General Reserve A/c Dr. 1,00,000
To Sanju’s Capital A/c 40,000
To Suman’s Capital A/c 60,000
(Being asset taken over by Suraj)

(ii) Bank A/c Dr. 4,40,000

To Realisation A/c 4,40,000
(Being Land and Building and Stock Realised)

(iii) Sanju’s Capital A/c Dr. 2,000

Suman’s Capital A/c Dr. 3,000
To Realisation A/c 5,000
(Being loss on realization distributed)

(iv) Sanju’s Capital A/c Dr. 2,38,000

Suman’s Capital A/c Dr. 3,57,000
To Bank A/c 5,95,000
(Being final payment to partners)

Working Note: Realisation Account

Particulars Amount Particulars Amount

To Sundry Assets: By Creditors A/c 1,05,000
Land and Building 3,00,000 By Bank A/c (Assets Realised) :
Stock 1,00,000 Land and Building 3,50,000
Debtors 1,50,000 5,50,000 Stock 90,000 4,40,000
Distribution of Loss:
By Sanju’s Capital A/c 2,000
By Suman’s Capital A/c 3,000
5,50,000 5,50,000

23. Journal

Date Particulars L.F. Amount Dr. Amount Cr.

Bank A/c Dr. 2,40,000
To Sh. Application A/c 2,40,000
(Being Application money received)

Share Application A/c Dr. 2,40,000

To Sh. Capital A/c 40,000

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To Securities Premium Reserve A/c 40,000

To Sh. Allotment A/c 35,400
To First Call A/c 6,200
To Bank A/c 1,18,400
(Being Application money adjusted)

Share Allotment A/c Dr. 50,000

To Share Capital A/c 30,000
To Securities Premium Reserve A/c 20,000
(Being Allotment amount due)

Bank A/c Dr. 14,600

To Share Allotment A/c 14,600
(Being Allotment amount received)

First Call A/c Dr.

To Share Capital A/c 30,000
To Securities Premium A/c 20,000
(Being First call money due) 10,000

Bank A/c Dr.

To First Call 23,800
(Being First call money received) 23,800

Second & Final Call A/c Dr.

To Share Capital A/c 20,000
To Securities Premium Reserve A/c 10,000
(Being Final call money due) 10,000

Bank A/c Dr.

To Second & Final Call 19,580
(Being Final call money received) 19,580

Sh. Capital A/c Dr.

Securities Premium Reserve A/c Dr. 2,100
To Second & Final Call A/c 210
To Sh. Forfeiture A/c 420
(Being 210 Share forfeited) 1,890

Bank A/c Dr.

Sh. Forfeiture A/c Dr. 574
To Sh. Capital A/c 126
(Being Reissue of 70 shares) 700

Share Forfeiture A/c Dr.

To Capital Reserve 504
(Being Share forfeiture balance transferred to capital 504
reserve)

OR

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(a) Journal

Date Particulars L.F. Amount Dr. Amount Cr.

Equity Share Capital A/c Dr. 1,600
Securities Premium A/c Dr. 800
To Equity Share Forfeited A/c 1,200
To Calls in Arrears A/c 1,200
(Being Mr. M’s shares forfeited)

(b) Journal

Date Particulars L.F. Amount Dr. Amount Cr.

Equity Share Capital A/c Dr. 500
To Share Forfeited A/c 350
To Calls in Arrears A/c 150
(Being 50 shares forfeited for nonpayment
of calls)

Bank A/c Dr. 160

Share Forfeited A/c Dr. 40
To Share Capital A/c 200
(Being 20 shares reissued for Rs. 8 per share)

Share Forfeited A/c Dr. 100

To Capital Reserve A/c 100
(Being gain on reissue of forfeited shares
transferred to Capital Reserve)

24. Revaluation Account

Particulars Amount Particulars Amount

To Plant & machinery A/c 28,000 By Stock A/c 500
To Debtors A/c 500 By loss transferred to:
AK 14,000
BK 14,000 28,000
28,500 28,500

Partners Capital Account

Particulars AK BK CK Particulars AK BK CK
To Rev. A/c 14,000 14,000 -- By Balance b/d 55,000 30,000 --
To Goodwill A/c 5,000 5,000 -- By W. C. F. 7,500 7,500 --
To P/L A/c 2,500 2,500 -- By Cont. Res. 10,000 10,000 --
To Pre. Expenses 6,000 6,000 -- By Premium 2,500 2,500 --
To Advert. suspense 4,000 4,000 -- By Bank A/c -- 12,500 18,000
To Stock A/c 4,000 4,000 --
To Bank A/c 12,500 -- --
To Balance c/d 27,000 27,000 18,000
75,000 62,500 18,000 75,000 62,500 18,000

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OR

Revaluation Account

Particulars Amount Particulars Amount

To Outstanding Exp. 10,000 By Land and Building 1,20,000
To Machinery 1,20,000 By Office Equipment 8,000
To Bad Debts 14,000 By Loss transferred to:
To Stock 5,000 KK 6,000
SK 9,000
VK 6,000

1,49,000 1,49,000

Partners’ Capital Account

Particulars KK SK VK Particulars KK SK VK
To Stock 15,000 -- -- By Balance b/d 4,00,000 6,00,000 4,00,000
To Rev. A/c 6,000 9,000 6,000 By W.C. Fund 4,000 6,000 4,000
To KK’s Capital -- 40,000 40,000 By SK’s Capital 40,000 -- --
To Bank 1,00,000 -- -- By VK’s Capital 40,000 -- --
To KK’s loan 3,63,000 -- -- By Bank (Bal.) -- 2,43,000 2,42,000
To Bal. c/d 8,00,000 6,00,000
4,84,000 8,49,000 6,46,000 4,84,000 8,49,000 6,46,000

Total capital of the firm was Rs.14,00,000 before retirement which is to be adjusted in 4:3 ratio.

Balance Sheet

Liabilities Amount Assets Amount

Capitals : SK 8,00,000 Land & Building 5,20,000
VK 6,00,000 14,00,000 Machinery 4,80,000
KK’s Loan 3,63,000 Office Equipment 8,000
Employee Provident Fund 70,000 Closing Stock 1,80,000
Workmen compensation fund 16,000 Debtors 1,86,000
Sundry Creditors 1,00,000 Cash at Bank 5,85,000
Outstanding Exp. 10,000
19,59,000 19,59,000

25. B’s Capital Account

Particulars Amount Particulars Amount
To B’s Executor’s A/c 1,38,525 By Balance b/d 60,000
(Balance Transferred) By General Reserve 3,600

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By Interest on Capital 1,800

By Profit and Loss Suspense A/c 1,125
By A’s Capital A/c (Goodwill) 20,571
By C’s Capital A/c (Goodwill) 51,429
1,38,525 1,38,525
Working Note: B’s Share of goodwill = 2,40,000 x 3/10 = 72,000 (in the gain ratio of A and C i.e., 2:5)

26. Journal

Date Particulars L.F. Debit Credit

1 April Bank A/c Dr. 5,40,000

2020
To Debenture Application & Allotment A/c 5,40,000

(Being Application money received)

Debenture Application & Allotment A/c Dr. 5,40,000

Discount on issue of Debentures A/c Dr. 40,000

Loss on issue of Debentures A/c Dr. 20,000

To 12% Debentures A/c 4,00,000

To Premium on Redemption of Debentures 20,000

To Bank A/c 1,80,000

(Being allotment of debentures made)

Sept.
Debenture Interest A/c Dr. 24,000
30
To Debentureholders A/c 24,000

(Being interest due)

Debentureholders A/c Dr. 24,000

To Bank A/c 24,000

(Being interest paid)

31
March Debenture Interest A/c Dr. 24,000
2021
To Debentureholders A/c 24,000

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(Being interest due)

Debenture holders A/c Dr. 24,000

To Bank A/c 24,000

(Being interest paid)

Statement of Profit & Loss Dr. 1,08,000

To Debenture Interest A/c 48,000

To Discount on issue of Debentures A/c 40,000

To Loss on issue of Debentures A/c 20,000

(Being interest and loss transferred to Statement of

Profit and Loss)

(i) How much amount of Discount to be debited?

Ans. 40,000

(ii) How much premium on redemption is to be credited?

Ans. 20,000

(iii) How much amount is refunded by the company?

Ans. 1,80,000

(iv) How much interest is paid on 30th September and 31st March 2021?

Ans. 24,000 on 30th September and 24,000 on 31st March 2021

(v) Give entry for writing off, interest, Discount and loss on issue of Debentures
Statement of Profit & Loss Dr. 1,08,000
To Debenture Interest A/c 48,000
To Discount on issue of Debentures A/c 40,000
To Loss on issue of Debentures A/c 20,000
(Being interest and loss transferred to Statement of Profit and Loss)

Part B :- Analysis of Financial Statements (Option – I)

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27. (c) and answer of OR part is (c)

28. (c)

29. (c) answer of OR part is (a)

30. (a)

31. Ans.

Particulars Major Headings Sub-headings

(i) Provision for Employees benefits Non-current Assets Other Non-current
Liabilities

(ii) Mastheads and Publishing Titles Non-current Assets Fixed Intangible Assets

(iii) Premium payable on Redemption Non-current Liabilities Other Non-current

of Debentures Liabilities

(iv) Proposed Dividend Contingent Liabilities Show as footnote to the

Balance Sheet

(v) Rent paid in advance Current Assets Other Current Assets

(vi) Provision for warranties Non-current Liabilities Long-term Provisions

32. Ans.

Limitations of ‘Analysis of Financial Statements’ are: (any three)

• It doesn’t consider price level changes.

• It is just a Historical Analysis, therefore, it doesn’t reflect on the current and future position.

• Lack of Qualitative Analysis as monetary information alone is considered.

• Affected by the personal ability and bias of the analyst.

• It may be misleading without the knowledge of the changes in accounting procedure followed by a
firm.

• Affected by window dressing.

• As there may be difference in Accounting Policies followed by different firms, meaningful inter-­­
firm comparison may not be possible.

• It suffers from limitations of Financial statements.

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• It only identifies the symptoms of the problems but does not offer diagnosis of the reasons for
problem and remedy thereof.

33. Debt to Capital Employed Ratio = Long-term Debts/Capital Employed

= 5,00,000/15,00,000 = 0.33 : 1

Long-term Debts = 5,00,000 (Debentures)

Capital Employed = Non-current Assets + Current Assets – Current Liabilities

13,00,000 + 3,00,000 – 1,00,000 = 15,00,000

OR

(a) Debtors Turnover Ratio = Net Credit Sales = 3,25,000 = 4.64 Times
Average Debtors 70,000
Working Note:

Credit Sales = 5,20,000 x 160/100 = 3,25,000

Cash Sales = 3,25,000 x 60% = 1,95,000

Opening Debtors = 80,000 x 3/4 = 60,000

Average Debtors = 60,000 + 80,000 = 1,40,000/2 = 70,000

(b) Liquid Ratio = Quick Assets = 1.5:1

Current Liabilities

Quick Asset = 1.5 x 1,60,000 = 2,40,000

Current Assets = 1,60,000 x 2.5 = 4,00,000

34. (i) Cash inflow from Operating Activities Rs. 2,29,000

Hint: Profit 2,30,000 + Interest 12,000 + Depreciation 24,000 + patents amortised 30,000 –
Gain on sale of patents 5,000 – Trade payable 12,000 – tax 50,000

(ii) Cash outflow in Investing Activities (Rs.7,000)

Hint: Purchase of Machinery (79,000)

Purchase of Trademarks (3,000)
Sale of patents 75,000

Working Note: Plant and Machinery Account

Particulars Amount Particulars Amount

To Balance b/d 2,45,000 By Accumulated Depreciation A/c 34,000
To Bank A/c 79,000 By Balance c/d 2,90,000
3,24,000 3,24,000

Accumulated Depreciation Account

Particulars Amount Particulars Amount
To Plant and Machinery A/c 34,000 By Balance b/d 40,000
To Balance c/d 30,000 By Statement of P/L (Depreciation) 24,000
64,000 64,000

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