LA MARTINIERE FOR BOYS, KOLKATA

SELECTION EXAMINATION, 2024

ACCOUNTS
CLASS - XII
----------------------------------------------------------------------------------------
Maximum Marks: 80
Time Allowed: Three Hours
(Candidates are allowed additional 15 minutes for only reading the
paper.
They must NOT start writing during this time.)
-----------------------------------------------------------------------------------------
Answer all questions in Section A & Section B.
Section A consists of objective / very short answer questions & Long
Questions.
Section B consists of Short and Long answer
questions.
The intended marks for questions or parts of questions are given in
brackets [ ].
----------------------------------------------------------------------------------------------------------------

SECTION A – 60 MARKS

1. Which of the following is a feature of partnership firm?

a. Limited liability
b. Mutual agency
c. Common seal
d. One man one vote (1)

2. Why is self generated goodwill not recorded in the books of

accounts.
a. Source cannot be identified
b. Cost cannot be assigned to it
c. Both (a) and (b)
d. None of the above (1)

3. Jai, Veeru and Tomy were partners in a firm. Tomy’s share of

profit to the date of his death which was calculated on the basis of

1|P a g e PTO
three completed years before death was Rs 1,00,000. The profit
for the year was-
2019 - 2020 - Rs 1,60,000
2020 - 2021 - Rs 1,80,000
2021 - 2022 - Rs 2,00,000
What was the date of Tomy’s death?
A. 19th October, 2022
B. 19th September, 2022
C. 11th March, 2022
D. 21st July, 2022 (1)

4. There are two statements given below, marked as

Assertion(A) and Reason (R). Read the statements and
choose the correct option. (1)
Assertion : On the dissolution of a firm suppliers are paid off before
secured bank loans.
Reason : Suppliers are creditors of the company.

a. Assertion is correct but Reason is incorrect.

b. Assertion is incorrect but reason is correct.
c. Both Assertion and reason is correct. But reason is not the
correct explanation to the assertion.
d. Both Assertion and reason is correct. But reason is the correct
explanation to the assertion.

5. Divisible profit is __________

A. Available profit after deducting all incomes and expenses
B. Available profit after deducting all operating incomes and
operating expenses
C. Profit available after all deductions for shareholders
D. Profit available after all appropriations for partners
(1)

6. At the time of admission of Ravi the Furniture of book value Rs

2,50,000 was reduced by 25% of book value and the building of
book value Rs 5,00,000 was reduced to 75% of book value. What
is the combine value of the assets post revaluation?
A. Rs 4,37,500
B. Rs 5,62,500
C. Rs 4,32,500

2|P a g e PTO
D. Rs 1,87,500 (1)

7. Bean Ltd. has an operating cycle of 6 months. Debtors are

realised after 8 months. Will you treat debtors as current assets or
non current assets? State a reason. (1)

8. “Premium on redemption of debentures” are recorded under

which Head and Sub-head?
(1)

9. What is the accounting treatment of “Investment Fluctuation

Reserve” at the time of dissolution of the firm, when there is no
investment in the asset side of balance sheet?
(1)

10. VVDRAR Ltd issued 20,000 equity shares @ Rs 10 to public

for subscription. What is the minimum number of shares that need
to be subscribed for to continue allotment? (1)

Section - B

11. The profit earned for the following years are as follows-
Weights Abnormal loss/gain
2018 - Rs 20,00,000 2
2019 - Rs 25,00,000 3 2,00,000
2020 - Rs (10,00,000) 1 (8,00,000)
2021 - Rs 30,00,000 5
2022 - Rs 35,00,000 4 50,000
Calculate goodwill on the basis 3 years purchase of last
5 years weighted average profit or loss. (3)

12. P, S and R are partners sharing profit and losses in the ratio
2:2:1. On 1/4/2024 their capitals are as follows-
P - Rs 3,00,000
S - Rs 2,00,000
R - Rs 1,00,000
Other balances were as follows-
Profit and loss a/c (dr.) - Rs 25,000
General reserve - Rs 50,000
Profit till R’s death Rs 75,000
Cash - Rs 8,00,000

3|P a g e PTO
 R died on 1/7/2023 and his heir was paid Rs 2,00,000.
New PSR is 1:1
Calculate -
A. Value of firms goodwill
B. Premium for goodwill payable to R (3)

OR
CP who has equal share in profit and losses along with DK
and VF. CP retires and his claim is decided by other two
partners Rs 1,20,000. Later an unrecorded furniture is
noticed of Rs 60,000. This furniture was recorded and the
revised claim was determined Rs 1,50,000. The furniture
was given to him along with a bank draft in full settlement of
his claim.
Pass necessary journal entries to record the above
transactions. (3)

13. Sun, Moon and Star are partner’s in a firm sharing profit
and losses equally. The appropriated profit was determined
Rs 21,000 and shared among partners before transferring Rs
6,000 to reserves which was specified in the partnership
deed.
Pass a single adjustment entry to rectify the error.
(3)
OR

Taneesha withdrew Rs 75,000 in mid of 1st three quarters and

Sonali withdrew Rs 4,000 for the beginning of June to
November as drawings respectively. Interest on drawings is to
be charged @ 8% p.a.
Pass necessary journal entries to record the above
transactions, showing workings clearly.
(3)

14. Hero Ltd had the following assets on 31st March 2023-
Land and building – Rs 6,00,000
Patent – Rs 5,00,000
Loose tools – Rs 25,000
Raw material – Rs 1,00,000
Cheques in hand – Rs 1,00,000
Cash – Rs 2,00,000

4|P a g e PTO
 Show the asset side of balance sheet as per schedule III
of companies act 2013 with relevant notes to accounts
as at 31/3/2023. (3)

15. Hrithik Ltd had the following opening balances on 1/4/2023-

General reserve – Rs 25,00,000
Securities premium reserve – 10,00,000
Statement of Profit and loss – Rs( 4,00,000)
Capital redemption reserve – Rs 75,000
Capital reserve - Rs 25,000
Money received against share warrants – Rs 15,000.
Equity share capital – Rs 50,00,000
10% Preference share capital – Rs 10,00,000

Profit earned during the year Rs 3,00,000.

On 1st October 2023, there was deficit of fund so the
company decided to issue 10,000 equity shares @ Rs 10
each at a premium of 20% payable as follows-
On Application Rs 6 (Including Premium)
On Allotment Rs 4
On First and final call Rs 2.
All shares were subscribed for but first and final call is not
made till 31/3/2024
Show extract balance sheet showing liabilities side as
at 31/3/2024 with relevant notes to accounts. (6)

16. At the time of admission of Ishaan the balances were as

follows-
Workmen’s compensation reserve - Rs 3,00,000. There was claim
of Rs 2,70,000 at the time of Ishaan’s admission. Ishaan will pay
50% of the claim by bringing in enough cash. Existing partners
Jaya and Ricky had a profit sharing ratio of 2:3 and the new ratio
will be 2:3:1.
Prepare Workmen’s compensation reserve a/c and Claim on
workmen’s compensation a/c.
(6)

OR

5|P a g e PTO
The balance sheet of Krish & Trish as on 1/4/2024
Liabilities Amt. Rs. Assets Amt. Rs.

Capital Machinery 20,00,000

Krish 15,00,000 Building 45,00,000
Trish 10,00,000 Debtors 10.00,000
EPF 10,00,000 Stock 15,00,000
Profit and loss 5,00,000 Cash 5,00,000
Creditors 30,00,000
Bank loan 25,00,000
95,00,000 95,00,000

Krish and Trish share profit and losses in capital ratio. They admit
Rohan on 1/4/2024 and the new ratio is 2:2:1. Rohan brings in Rs
15,00,000 for his share of capital. Rohan brings his necessary
share of goodwill.
Prepare Partner’s capital a/c after Rohan’s admission, when
Krish withdraws 50% of premium for goodwill.
(6)

17. Pass necessary journal entries in the books of Outsole

associates at the time of dissolution -
a. At the time of dissolution a furniture of Book value Rs
75,000 was taken over by Twisted, a partner at Rs
80,000.
b. A creditor of Rs 75,000 was settled against a debtor of Rs
80,000 at the time of dissolution.
c. At the time of dissolution, Workmen’s compensation
reserve had a balance of Rs 2,00,000.
Claim against it was Rs 50,000.
(2+1+3=6)

18. Venkys Ltd. Issued 10,000 equity shares of Rs 10 each to

public for subscription. 95% of the issue was subscribed by public.
The issue was payable as follows-
On 1/4/2023 – Rs 2 on application.
On 1/7/2023 – Rs 4 on allotment.
On 1/10/2023 - Rest on First and final call.
6|P a g e PTO
Dev paid allotment and first and final call money on 500 shares
with application. Akshay failed to pay 200 shares money on
allotment but paid with first and final call. Interest is paid to Dev on
1/10/2023 but yet to be received from Akshay till 31/3/2024.
i. Pass necessary journal entries to record the above
transactions.
ii. Prepare Calls in advance a/c. (10)

OR

In the books of King and Prince Ltd.

(Journal)
Date Particulars Dr. Cr.
Amt. Rs. Amt. Rs.

Bank a/c …………….dr 1,00,000

To Equity share 1,00,000
application
(Being application money
received on 50,000 shares)

Equity share application

a/c ……dr 1,00,000
To Bank 20,000
To Equity share ******
allotment
To Equity share capital 60,000
(Being 30,000 shares
money transferred to
capital, 10,000 refunded
and rest adjusted)

9
Equity
( share allotment
a/c …………….dr 90,000
To Equity share capital 60,000
To Securities premium
(Being allotment money *****
adjusted)

7|P a g e PTO
 Bank a/c ………………dr *******
Calls in arrear a/c …….dr ********
To equity share *******
allotment
(Being allotment money
received except for a holder
of 600 shares)

Equity share first call 1,20,000

a/c ………………dr
To equity share capital 1,20,000
(Being 1st call money
transferred)

Bank a/c ………dr *****

Calls in arrear a/c ……dr *****
To equity share 1st call 1,20,000
(Being 1st call money
received)

Equity share final call 60,000

a/c ………………dr
To equity share capital 60,000
(Being final call money
transferred)

Bank a/c ………dr 58,800

Calls in arrear a/c ……dr *****
To equity share final call 60,000
(Being final call money
received)

Equity share capital

a/c ………dr 6,000
Securities premium
a/c ………dr *****
To calls in arrear ******
To Share forfeiture *****
(Being shares forfeited)

8|P a g e PTO
 (i) You are required to complete the above journal entry.(6)
(ii) Also pass the journal entry, if 200 equity shares are re-
issued at Rs 9. (2)
(iii) What amount will be transferred to Capital reserve and
why? (2)

19. Hridhaan, Hrishav and Hrishit are partners in a firm sharing profit
and losses in the ratio 2:2:1. Their partnership deed had the
following clauses-
A. They had fixed capital of Rs 5,00,000 each.
B. Interest on capital 6% p.a.
C. Hrishav withdraws Rs 6,000 at the beginning of every quarter.
D. Interest on drawings 5% p.a.
E. Rent payable to Hridhaan is Rs 20,000 per annum
F. Salary to Hrishit Rs 10,000 per month.
G. Hrishav to get a commission of 5% on turnover.
H. Hrishav is guranteed a profit of Rs 10,00,000 by the Hridhaan
after considering his all receivables except rent and interest on
capital, if any.
Net profit before the above adjustments is Rs
20,00,000. Net profit is 40% of turnover.
Prepare Profit & Loss appropriation a/c. (10)

OR

Rancho, Farhan and Raju are partners in a firm sharing profit and
losses in the ratio 2:2:1. They had closing capital on 31st March
2024 of Rs 6,00,000, Rs 5,00,000 and Rs 4,00,000 after
appropriation of profit. Interest on drawings was charged @ 6%
p.a. instead of 8% p.a. Rancho withdrew Rs 60,000 at the
beginning of half yearly, Farhan withdrew Rs 20,000 at the mid of
first three quarter and Raju withdrew Rs 10,000 on 1/10/2023 and
Rs 50,000 on 1/1/2024. Rent of Rs 5,000 payable to Raju as per
partnership deed was not charged against net profit.
(i) Pass necessary journal entries to rectify the above
errors.
(5)
(ii) Show the final value of Partner’s Capital a/c.
(3)
(iii) Also Prepare profit and loss adjustment a/c. (2)

9|P a g e PTO
 Section C – 20 Marks

20. Read the following extract and answer the question-

INOX ASIA Ltd. decided to raise capital from market by issuing of
shares and invest the amount in the expansion of capacity.
What is the reason behind this reason?
A. To increase share capital and have a better debt equity ratio.
B. To bring a change in the EPS
C. To decrease trade receivable turnover ratio by paying off the
debts.
D. None of the above (1)

21. The EPS of Rollick Ltd is Rs 40. State the formula used to
calculate it. (1)
22. AKS Ltd. company has Current Asset of Rs 4,00,000 and
Current Liabilities of Rs 2,00,000. It further purchased goods on
credit worth Rs 80,000. Calculate new Current ratio. (1)

23. State any one advantage of ratio analysis. (1)

24. From the following data Calculate – a) Debt Equity ratio ; b)

Debt to Total Assets ratio c) Proprietary ratio and d) Interest
coverage ratio
PARTICULARS 31.3.2023
Equity Share Capital 120000
10% Preference Share Capital 120000
Reserve and Surplus 70000
Trade Payable 110000
Trade Receivable 180000
Short Term Provisions 15000
Patent 30000
Building 100000
Machinery 70000
Premises 30000
6% Debentures 65000
Current Investment 8000
Inventory 72000
Cash and cash equivalent 10000

10 | P a g e PTO
EBIT 75,000
Tax 10%
(6)

25. Prepare a Common size income statement from the following

information:
Particulars 31/03/2023
Revenue from operations 10,00,000
Purchase of stock in trade 4,20,000
Changes in inventories 80,000
Other expenses 30,000
Other Income 5,000
Tax Rate 10%
(4)

26. Trade payable turnover ratio is 3 times.

Total revenue is Rs 12,00,000 which includes 20% profit.
Credit Purchase is double cash purchase.
Cost of revenue from operations includes Purchase and Rs
60,000 wages.
Opening creditors are Rs 8,000 more than closing Creditors.
Calculate Opening and closing creditors. (4)

27. HUL Ltd has decided to change in its policies towards

the customers and the average period of giving credit to
them will be decreased from 90 days to 60 days. Which ratio
will get effected and why? (1)

28. Increasing the amount of debt funds in the balance sheet

lowers the creditworthiness of the company. Which ratio is
effected and how in this case? (1)

*****************************************************

11 | P a g e PTO