ACCOUNTANCY

CLASS XII

Time: 3 Hours] [Maximum Marks: 80]

Part A
Accounting for partnership firms and companies

Q1- Chandrakanta a partner was guaranteed that her share of profits will not be less than rupees 60,000
per annum. Deficiency, if any was to be borne by other partners Aisha and Vinita equally. For the year
ended 31st March, 2023 the firm incurred loss of 1,80,000.
What amount will be debited to Aisha's Capital Account in total at the end of the year?
(a) ₹ 60,000
(b) ₹ 1,20,000
(c) ₹ 90,000
(d) ₹ 80,000

Q2- Assertion (A) : Interest on drawings increases the divisible profit of a firm.
Reason (R ) : Product method is used to calculate the interest on same amount withdrawn by partners at
regular interval of time.
(a) (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 )

Q3- Z Ltd. forfeited 1200 shares of 10 each, ₹ 8 per share has been called up, on which company received
only ₹ 7200. The company then reissued the half of the forfeited shares to another person as fully paid up
at maximum possible discount. The amount debited to share forfeited account at the time of reissue of
shares will be……
(a) ₹ 3200
(b) ₹ 4200
(c) ₹ 3600
(d) ₹ 4600

OR

Madhavah Ltd. Purchased sundry assets from a vendor for ₹ 7,20,000. 50% of the consideration was paid by
issuing cheque and balance by issuing of 8% debentures of ₹ 100 each at a premium of 20%. The security
premium account is credited with:
(a) ₹ 1,40,000
(b) ₹ 3,00,000
(c) ₹ 80,000
(d) ₹ 60,000
Q4- Manjuli, Prashant and Aryaman are partners in a firm having fixed capitals of ₹ 80,000; ₹ 40,000 and ₹
50,000 respectively sharing profits in the ratio of 7:6:4. The rate of interest on capital was agreed at 10%
per annum, but was wrongly credited to them as 12% per annum.
By what amount Prashant's current A/c will be debited/credited to rectify the above entry.
(a) Cr. Prashant's Current A/c ₹ 400
(b) Dr. Prashant's Current A/c Rs 400
(c) Dr. Prashant's Current A/c Rs 200
(d) Cr. Prashant's Current A/c Rs 200

OR

Out of the following which is not a part of change in profit sharing ratio?
(a) Determination of sacrificing and gaining ratio
(b) Accounting of goodwill
(c) Accounting of reserves, accumulated profits and losses
(d) End of economic relationship among the partners

Q5- Rahu ,Shani and ketu are partner sharing profits and losses in the ratio 5:3:2. Rahu had drawn rupees
10,000 at the beginning of every month Shani had drawn rupees 30,000 at the beginning of every quarter.
Ketu has drawn 1,20,000 during the year. Interest on drawings was to be charged @ 10% per annum. Who
will be charged with higher interest on drawings?
(a) Rahu
(b) Shani
(c) Ketu
(d) Equal interest on drawings for all

Q6- P, Q and R partner sharing profit and losses in the ratio 1:2: 3. Q died on 1st October 2023 in a road
accident. According to the agreement the share of profits of a deceased partner up to the death of the
death is to be calculated on the basis of average profit for the last 4 years
Profits of the firm for the last 4 years were
Year ending Profit/ loss
31st March 2020. 1,35,000
31st March 2021. 1,70,000
31st March 2022. (20,000)
31st March 2023. 1,50,000
Q's share of profit till the date of death will be:
(a) ₹ 18,000
(b) ₹ 18125
(c) ₹ 18,250
(d) ₹ 18,500

OR

A, B and C are partners in a firm sharing profit and losses in equal ratio. On August 23 2023 C died. Accounts
are closed on 31 March every year. The sales for the year 2022-23 were 14,50,000 and the gross profit ratio
was 15%. The sales for the period from April 1 2023 to August 23 2023 were rupees 4,30,000.
The share of deceased partner in the current year's profit on the basis of sale is:
(a) ₹ 64,500
 (b) ₹ 40,500
(c) Rs 21,500
(d) ₹ 9,200

Q7- Jet limited bought the business of Wipro limited on 1st April 2023 consisting of sundry assets of
8,80,000 and liabilities 2 ,80,000. 30,000 was paid in cash on 3 April 2023 and for the balance 8%
debentures of 100 each were issued at a premium of 10% on 5 April 2023. The value of goodwill or Capital
Reserve will be:
(a) Goodwill ₹ 20,000
(b) Capital Reserve ₹ 20,000
(c) Goodwill Rs 40,000.
(d) Capital Reserve ₹ 40,000

Q8- X,Y and Z are partners sharing profits in ratio 7:2:1. Y retires on 1st April 2023 and amount transferred
to his loan account is 1,08,000 which is payable in 3 equal annual together with interest 6% per annum. The
total amount paid for last installment along with interest will be:
(a) ₹ 38,160. (b) 38100
( c) ₹ 37,800. (d) 36,000

OR

A and B started business on 1st July 2022 and agree to share profit and losses in the ratio of 3:1. The
contributed 4 lakh and 2 lakh respectively by way of capital on which they both agreed to allow interest 6%
per annum
irrespective of profits. Profit earned during the year ending 31 March 2023 (before allowing interest on
capital) was 25000. The effect of above situation will be:
(a) Profit 2000 will be divided among partners in the ratio of their interest on capital
(b) Loss 7000 will be divided among partners in the ratio of 3:1
(c) Loss. Of 2000 will be divided among A and B in 3:1
(d) Loss of 2000 will be divided among A and B in their capital ratio 2: 1

Read the following hypothetical situation answer question number 9 and 10.
A, B and C are equal partners in a firm. Their capitals as on 1 st April 2022 was 60,000 40,000 and 30,000
respectively. Partnership deed provides:
(a) Interest on capital @12% per annum.
(b) They have right to withdraw 8000 , 6000 and 4000 respectively for personal use. Any drawings in
excess of these limits are charged interest @ 15% per annum.
(c) Firm charges interest on loan given to partner @ 15% per annum
(d) A is entitled to a commission at the rate 10% of profit after charging his commission but before any
distribution among the partne₹
During the year ended 31st March 2023 firm earned a profit of 53,100. Partners drawings were 12000 ,
9,000, 4000 respectively. Firm gave a loan of 20,000 to C on 1st April 2022.

Q9- net profit to be credited to Profit and loss appropriation account will be:
(a) ₹ 53,100. (b) 56,100
(c ) ₹ 50,100. (d) 50,000
Q10- A's commission will be:
(a) 5,100. (b) 5,610
(c ) 5,310. (d) 5,000

Q11- A , B and C partners in a firm sharing profit and losses in equal ratio. The partners decide to share
future profits and losses in the ratio 3:2:1. Each partner's gain or sacrifice due to change in the ratio will be:
(a) A's sacrifice 1/3 and B's gain ⅓
(b) A's sacrifice ⅙; B's sacrifice ⅙ and c's gain 2/6
(c) A's gain ⅙ and c's sacrifice ⅙
(d) A's gain ⅙ ; B's gain ⅙ and c's sacrifice 2/6

Q12- premium on issue of shares can be used for……..

(a) Distribution of dividend
(b) Writing off capital losses
(c) Transferring to general reserve
(d) Paying fees to directors

Q13- If 50 shares of 10 each, Rs 9 called (including a premium of 2) are forfeited due to non payment of first
call of 2 per share, then share capital will be debited by:
(a) Rs 250. (b) 450
(C ) ₹ 350. (d) 500

Q14- A and B are partners sharing profit and losses in 3:2. C is admitted for ⅕ share which he acquires 1/ 10
from A and 1 /10 from B. He brings 20,000 as capital
Capital balances of A and B after making all adjustments are 60,000 and 25,000 respectively. The capital
accounts of old partners are to be adjusted on the basis of C's capital and his profit share in the new firm.
Calculate the actual amount of cash to be paid of or brought in by the old partners to maintain their capital
balances in their new ratio.
(a) Surplus capital to be withdrawn by A 10,000 and deficit capital to be brought in by B 5,000
(b) Surplus capital to be withdrawn by A 5000 and deficit capital to be brought in by B 10000
(c) Surplus Capital to be withdrawn by A 12000 and deficit capital to be brought in by B 7000
(d) Surplus Capital to be withdrawn by A 7000 and deficit capital to be brought in by B 12000.

Q15- P and Q are partner sharing profit and losses in the ratio 3:2. R is the manager who receives a salary of
8000 per month and a commission of 5% on net profit after charging such commission. Profit for the year is
13,56,000 before charging R's salary. The total remuneration due to R is :
(a) 1,60,000
(b) 1,56,000
(c) 1,52,000
(d) Cannot be determined
OR

A and B are partners in a firm. The net divisible profit as per Profit and loss appropriation account is
2,50,000. The total interest on partners drawing were 4000. A is entitled to a salary of 4000 per quarter and
B 40000 per annum. The net profit/ loss earned during the year is
(a) 2,90,000
(b) 3,02,000
 (c) 2,10,000
(d) 3,08,000

Q16- on dissolution of a firm its balance sheet revealed total creditors 65000 total capital Rs 50000 cash
balance 8000. Its assets were realized at 120% of original book value. Profit on realization will be:
(a) 11,000
(b) 12,840
(c) 21,400
(d) 3,600

Q17- Anil Vipin and Suraj are partner sharing profits in the ratio 3: 1:1. On 1st April 2023 they decide to
share profits in equal ratio. The extract of the balance sheet on that date was as follows:
Extract of Balance Sheet
As at 1st April 2023

Liabilities Amount Assets Amount

Workmen compensation 18,000

reserve
Profit and loss A/c 9,000

Additional information
(a) Claim on account of workmen compensation was 24000.
(b) Partners do not want to distribute the balance in profit and loss account
Give necessary journal entries for the above.

Q18- Radha and Shyam were partners in a form sharing profits in the ratio 3:2. Their capitals were 70000
and 50000 respectively. On 1st April 2023 they admitted Rukmini as a partner for 1/4 of share in profit.
Rukmini introduce 40000 as capital Shyam guaranteed Rukmani that her share in profit + interest on capital
will not be less than 18000 and agreed to bear the loss due to guarantee alone. Profits the year ended on 31
March 2022 was 68000 before charging interest on capital at the rate of 12% per annum. Prepare Profit and
loss appropriation account.

OR

Cheese and Slice are equal partne₹ Their capitals as on 1st April, 2022 were ₹ 50,000 and ₹ 1,00,000
respectively. After the accounts for the financial year ending 31 st March, 2023 have been prepared, it is
observed that interest on capital @ 6% per annum and salary to Cheese @ ₹ 5,000 per annum, as provided
in the partnership deed has not been credited to the partners’ capital accounts before distribution of
profits.
You are required to give necessary rectifying entries using profit and loss adjustment account.

Q19-A limited took over the assets of 6,60,000 and liabilities of 80,000 of B limited. Out of the total agreed
purchase consideration 60000 was paid in cash and for the balance 6000 15% debentures of 100 each
issued at 10% discount. Pass journal entries.
 OR

Veronica limited issued 20,000 10% debentures of 100 each payable 10 on application , 20 on allotment
and the balance on first and final call. Chahat holder of 1000 share failed to pay the amount due on
allotment. Mridu holder of 1600 debentures paid in advance. All the amount due on call along with
allotment.
Pass journal entries for allotment and first call.

Q20- Capital invested in a firm is 5 lakh. Normal rate of return is 10%. Average profit of the firm 64000
(after an abnormal loss of 4000). Compute the value of goodwill at 4 times the super profit.

Q21- On 1st April 2022 accounts Guru limited was formed with an authorized capital of 4500000 divided
into 450000 equity shares of 10 each. The company issued prospectus inviting application for 370000. The
company received application for 360000 equity shares.
During the first year 8 per share was called. Kunal holding 4000 shares and Charvi holding 7000 shares did
not pay the first call of 2 per share. Charvi's share were forfeited after the first call and later on 6000 of the
forfeited shares were reissued at 6 per share 8 called up.
Show the following
(I) share capital in the balance sheet of the company as per schedule 3 part 1 of the companies act, 2013
Also Prepare notes to accounts.

Q22- show how will you deal with the following items while preparing realisation account
(i) stock book value was 40,000 60% of it was taken over by X at a valuation of 80% and remaining sold at
90% less 5% selling commission
(ii) investment book value was 30000 70% investment was sold through a stock broker at 110% less
brokerage at the rate 2% and 50% of the remaining investment were taken over by me at 90% rest proved
worthless
(III) Debtors and provision for bad debts for 50,
000 and 3000 respectively. 60% of debtors were realised at 95% and remaining was sold that collecting
agency for 60%
(IV) plant and machinery book value of which was 150000 were mortgage with the bank for 80000. Bank
sold it for 135000 and after deducting its loan and accrued interest of 4500 paid the balance to the firm.

Q23- Vardhman Ltd invited applications for 1,00,000 equity shares of ₹ 10 each. The amount was payable as
follows
On application ₹ 3 per share, on allotment ₹ 5 per share, and on first and final call ₹ 2 per share. Application
were received for 1,50,000 shares and pro-rata allotment was made to all the applicants.
Naveen, who was allotted 1,500 shares failed to pay the allotment and call money. His shares were
forfeited. Out of the forfeited shares, 1,250 shares were re-issued as fully paid-up @ ₹ 8 per share.
Pass journal entries to record the above transactions.

OR

Vikas limited invited applications for issuing 2 lakh equity shares of rupees 10 each at a premium of 10 per
share. The amount was payable as follows:
On application 4 per share (including 2 premium)
On allotment 5 per share (including two premium)
On first call 5 per share (including three premium)
Second and final call- balance amount
The issue was fully subscribe. Rachitha a share holder holding 1000 share failed to pay the allotment money
and Ruby another shareholder holding 1500 share paid her entire share money along with allotment.
Rachitha's share were forfeited immediately after allotment.
Afterwards the first call was made. Kajal a shareholder holding 500 share failed to pay the first call and
Payal holding 600 paid her second call along with first call. Kajal's share were forfeited immediately after
the first call. later on the second call was made which was duly received.
Pass necessary Journal entries for the above transactions in the books of Vikas limited.

Q24- Following is the balance sheet of Hemant and Gauri:

Balance sheet
as on 31st March 2023

Liabilities Amt Assets Amt

Creditors 38,000 Cash in hand 37,000

Bill payable 46,000 Stock 21,000
Profit and loss A/c 16,000 Debtors 46,000
Provision for bad and 6,000 Equipments 12,000
doubtful debts Furniture 25,000
Capital A/cs Plant 85,000
Hemant 1,00,000 Building 1,20,000
Gauri 1,40,000

3,46,000 3,46,000

The admitted shelly 1st April 2023 on the following condition.

(I) For his ⅓rd share in the future profits shelly bring 2,00,000 as her capital but unable to bring 30000 as
her share of goodwill
(ii) Equipments and plant are to be depreciated by 20% and 10% respectively and building is to be
appreciated by 15%
(III) Bills payable were retired for 35000
(IV) all debtors are considered good
(V) furniture of the book value 12000 was taken over by Hemant at 40% of the book value
Prepare Revaluation account and partners capital account.

OR

Sakshi, Anisha and Devika were partners sharing profit and losses in the ratio 3:2. Their balance sheet as on
31 March 2023 is as below:

Liabilities Amt Assets Amt

Capital A/cs Building 10,000

Sakshi 11,000 Machinery 10,700
Anisha 15,000 Furniture 10,000
Devika 8,000 Debtors 5000
Bills payable 1900 Stock 6600
Creditors 9000 Cash 6600
Reserve Fund 4000
 48,900 48900

On 1st April 2023 Devika retired from the firm on the following terms:
(a) Sakshi and Anisha share in reserve when should be continued in the new firm.
(b) GoodWill of the firm isValued at 4000
(c) Assets are To be valued at stock at 6300 , machinery 10000 and furniture at 10,200
(d) Provision for doubtful debts is to be maintained at 10% on debtors
(e) 100 is to be written off from creditors
(f) The amount payable to Devika is to be transferred to her loan account
Prepare revaluation account and partners capital account.

Q25-Priya, Karam and Anna were partners of a firm sharing profits in the ratio 3:2:1 Their balance sheet on
31 march 2023 was as follows:

Liabilities Amt Assets Amt

Bills payable 1,20,000 Cash in hand 20,000

Creditors 140,000 Debtors 1,40,000
Karam's Loan @5% 1,00,000 Bills Receivable 70,000
Reserve 1,80,000 Stock 1,70,000
Capital A/cs Investment 1,30,000
Priya 2,00,000 Advertisement Suspense A/c 1,20,000
Karam 1,20,000 Building 2,90,000
Anna 80,000

9,40,000 9,40,000

Karam died on 12th June 2023 and according to the partnership deed his executors were entitled to be paid
as under:
(I) His share in the profits of the firm till the date of his death which will be calculated on the basis of
average profits of last three completed years
(II) His Share in the Goodwill of the firm which will be calculated on the basis of 2 years purchase of total
profits of last 3 years
(III) Profits for Last 3 years were 30000, 70000, 80000.
Prepare karam's capital A/c.

Q26- Vijay Pvt. Ltd. issued 10,000, 9% debentures of ₹ 100 each to the public at 10% discount on 1 st April,
2022. These debentures are redeemable after 6 years at a premium of 10%. Pass the necessary journal
entries for issue of debentures and writing-off ‘loss on issue of debentures’ in same year of issue , if
company has a balance of ₹ 80,000 in its securities premium reserve account and also prepare loss on issue
of debentures account.

Part -B
Analysis of Financial Statement

Q 27. Which One of the following would be considered a use of cash for the purpose of constructing a
statement of cash flows?
 (a) a decrease in account receivables
(b) an Increase in account payables
(c) A Decrease in public deposits
(d) An increase share capital.

OR

The proprietory ratio of a firm is 62%.

which of the following transaction would not result in increase in this ratio.
(a) issue of equity shares
(b) Conversion of debentures into preference shares
(c) Repayment of public deposits
(d) Purchase of goods on credit

Q28- what will be the revenue from operation from the following information?
Opening Stock. ₹ 4,00,000
Inventory turnover ratio. 6 times
Gross Profit. 20% on Sales
Closing stock is twice the opening stock
(a) ₹ 45,00,000
(b) ₹ 72,00,000
(c) ₹ 36,00,000
(d) ₹ 48,00,000

Q29- Statement I: Fintech limited is carrying on mutual fund business. It invested rupees 20 lakh in shares
and rupees 15 lakh in debentures of various companies during the year. It received rupees 3 lakh as
dividend and interest. There Will be a net cash outflow of 32 lakh from investing activities.
Statement II- There is no cash flow from investing activity in the transaction as it is a finance company
(a) Both Statements are correct
(b) Both statements are incorrect
(c) Statement I is correct and statement II is incorrect
(d) Statement I is incorrect and statement II is correct

OR

Match column I and colum II

Column I Column II
(I) Employees A. Interested in knowing the profitability
and financial strength of the
(II) Creditors enterprise
B. Interested in knowing the progress of
the enterprise to ensure the safety
and recovery of the loan advanced
(III) Owners C. Interested in knowing the ability of
the enterprise to provide
remuneration, retirement benefits
 and employment opportunities
(IV) Banks and Financial Enterprise D. Interested in Knowing about the
credit worthiness of the business

Select from the following options:

(a) (I) - B; (II) - D; (III) -A; (IV) - C
(b) (I) - C; (II) -A; (III)- D; (IV) -B
(c) (I) - C; (II) - D ;(III) - A; ( IV) - B
(d) (I) - C; (II)- D; (III) - B ; (IV) – A

Q30- From the following information what will be the amount of provision for tax made or provided during
the year?
31st March 2023. 31st March 2022
Provision for taxation. 1,50,000. 1,40,000

The company paid taxes of rupees 45,000 during the year 2022-23
(a) ₹ 45,000
(b) ₹ 35,000
(c) ₹ 40,000
(d) ₹ 55,000

Q31- Classify the following items under major head and sub head in the balance sheet of a company as per
schedule 1 of the companies act 2013.
(I) current maturities of long term debts
(ii) rent due but not paid
(III) provision for tax
(IV) unsold goods
(V) cash credit
(VI) unexpired insurance premium

Q32- Debt to capital employed ratio is 0.3:1. State whether the following transactions will decline, improve
or not change the ratio. Also give reasons for the same.
(a) Tax refund of rupees 1,50,000 during the year.
(b) purchase goods on credit for 3 lakh for a credit of 15 months assuming operating cycle is of 18 months.
(c ) conversion of debenture into equity shares of rupees 4,00000
(d) sale of old building costing 50 lakh for 30 lakh.

Q33- From the following information provided prepare comparative statement of profit and loss for the
period 2023 and 2022:

Particulars 2023 2022

Revenue from operations 9,00,000 6,00,000
Cost of Materials Consumed 50% of Revenue from 60% of Revenue from
Operations operations
Other Expenses (% of 15% 20%
(Revenue from operation-
Cost of Materials Consumed)
 Income Tax 50% 50%

OR

Prepare common size statement of profit and loss from the following:

Particulars Note No. 2023 2022

I Revenue from operations (Net 50,00,000 40,00,000
Sales)
IIExpenses
Purchased of stock in 20,00,000 6,00,000
Trade
Changes in inventories of (2,00,000) 3,00,000
stock in trade
Depreciation 5,00,000 6,00,000
Other Expenses 10,00,000 15,00,000
Total Expenses 33,00,000 30,00,000

III Profit before Tax (I-II) 17,00,000 10,00,000

IV Tax expenses 5,10,000 3,00,000
V Profit after Tax((III-IV) 11,90,000 7,00,000

Q34- Following is the balance sheet of thermal Power limited as at 31st March 2023:

Particulars Note No 2023 2022

I. Equity and liabilities:
Share Capital 12,00,000 11,00,000
Reserves and Surplus 3,00,000 2,00,000
2. Non current Liabilities
Long term Borrowing 2,40,000 1,70,000
3. Current Liabilities
(a) Trade Payable 1,79,000 2,04,000
(b) Short term provisions 50,000 77,000
Total 19,69,000 17,51,000
II. Assets
1. Non Current Assets:
Property, plant and Equipment
and intangible Assets
(a) Property, plant and
Equipments 10,70,000 8,50,000
(b) Intangible Assets 40,000 1,12,000
2. Current Assets
(a) Current Investment 2,40,000 1,50,000
(b) Inventories 1,29,000 1,21,000
(c) Trade Receivables 1,70,,000 1,43,000
(d) Cash and Cash 3,20,000 3,75,000
 Equivalents
Total 19,69,000 17,51,000

Particulars 2023 2022

1. Reserves and Surplus:

Surplus i e. Balance in statement of Profit and 3,00,000 2,00,000
loss
2. Short term Provisions:
Provision for doubtful debts 50,000 70,000
3. Property , plant and Equipment
Machinery 12,70,000 10,00,000
Accumulated Depericiation (2,00,000) (1,50,000)
10,70,000 8,50,000
4. Intangible Assets : Goodwill 40,000 1,12,000

Additional information
(I) Proposed dividend for 2021 - 22 and 22- 23 were 10,000 and 12,000 respectively
(II) During the year of piece of machinery costing 24000 on which accumulated depreciation was 16000 was
sold for 6000
Prepare cash flow statement.