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# Board Paper of Class 12-Commerce 2014 Accountancy Delhi(SET 2) - Solutions

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 7 are very short-answer questions carrying 1 mark each.
iv. Question Nos. 8 to 10 carry 3 marks each.
v. Question Nos. 11 to 14 carry 4 marks each.
vi. Question Nos. 15 and 16 carry 6 marks each.
vii. Question Nos. 17 and 18 carry 8 marks each.

Section B
i. This section consists of 7 questions.
ii. All questions are compulsory
iii. Question Nos. 19 to 21 are very short-answer questions carrying 1 mark each.
iv. Question No. 22 carries 3 marks.
v. Question Nos. 23 and 24 carry 4 marks.
vi. Question No. 25 carries 6 marks.

• Question 1

Give any one purpose for which the amount received as 'Securities Premium' may be utilised.

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• Question 2

Why heirs of a retiring/deceased partner are entitled to a share of goodwill of the firm?

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• Question 3

What is the maximum amount of discount at which forfeited shares can be re-issued ?

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• Question 5

Distinguish between 'Dissolution of Partnership' and Dissolution of Partnership Firm' on the basis of closure of books.

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• Question 6

X, Y and Z are partners sharing profits in the ratio of $\frac{1}{2},\frac{2}{5}$ and $\frac{1}{10}$. Find the new ratio of remaining partners if Z retires.

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• Question 7

What is meant by 'Reconstitution of a Partnership Firm' ?

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• Question 8

BG. Ltd. issued 2,000, 12% debentures of Rs 100 each on 1st April 2012. The issue was fully subscribed. According to the terms of issue, interest on the debentures is payable half-yearly on 30th September and 31st March and the tax deducted at source is 10%. Pass necessary journal entries related to the debenture interest for the half-yearly ending 31st March, 2013 and transfer of interest on debentures of the year to the Statement of Profit & Loss.

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• Question 9

Saloni and Shrishti were partners in a firm sharing profits in the ratio of 7 : 3. Their capitals were Rs 2,00,000 and Rs 1,50,000 respectively. They admitted Aditi on 1st April, 2013 as a new partner for $\frac{{1}^{\mathrm{th}}}{6}$share in future profits. Aditi brought Rs 1,00,000 as her capital. Calculate the value of goodwill of the firm and record necessary journal entries for the above transaction on Aditi's admission.

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• Question 10

Pass necessary journal entries in the following cases :
(i) Pharma Ltd. redeemed 2,500, 12% debentures of Rs 100 each issued at a discount of 6% by converting them into equity shares of Rs 100 each issued at a premium of 25%.
(ii) Jain Ltd. converted 2,000, 12% debentures of Rs 100 each issued at par into equity shares of Rs 100 each issued at a premium of 25%.

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• Question 11

Pass necessary journal entries for the following transactions in the books of Rajan Ltd :
(a) Rajan Ltd. purchased machinery of Rs 7,20,000 from Kundan Ltd. The payment was made to Kundan Ltd. by issue of equity shares of Rs 100 each at 10% discount.

(b) Rajan Ltd purchased a running business from Vikas Ltd. for a sum of Rs 2,50,000 payable as Rs 2,20,000 in fully paid equity shares of Rs 10 each and balance by a bank draft. The assets and liabilities consisted of the following :
Plant & Machinery Rs 90,000; Building Rs 90,000; Sundry Debtors Rs 30,000; Stock Rs 50,000; Cash Rs 20,000; Sundry Creditors Rs 20,000.

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• Question 12

Satnam and Qureshi after doing their MBA decided to start a partnership firm to manufacture ISI marked electronic goods for economically weaker section of the society. Satnam also expressed his willingness to admit Juliee as partner without capital who is specially abled but a very creative and intelligent friend of him. Qureshi agreed to this. They formed a partnership on 1st April 2012 on the following terms :
(i) Satnam will contribute Rs 4,00,000 and Qureshi will contribute Rs 2,00,000 as capitals.
(ii) Satnam, Qureshi and Juliee will share profits in the ratio of 2 : 2 : 1.
(iii) Interest on capital will be allowed @ 6% p.a.
Due to shortage of capital Satnam contributed Rs 50,000 on 30th September, 2012 and Qureshi contributed Rs 20,000 on 1st January, 2013 as additional capitals. The profit of the firm for the year ended 31st March, 2013 was Rs 3,37,800.
(a) Identify any two values which the firm wants to communicate to the society.
(b) Prepare Profit & Loss Appropriation Account for the year ending 31st March, 2013.

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• Question 13

Virad, Vishad and Roma were partners in a firm sharing profits in the ratio of 5 : 3 : 2 respectively. On March 31, 2013, their Balance Sheet was as under:

 Balance Sheet of Virad, Vishad and Roma as on March 31, 2013 Liabilities Amount Rs Assets Amount  Rs Capitals : Buildings 2,00,000 Virad 3,00,000 Machinery 3,00,000 Vishad 2,50,000 Patents 1,10,000 Roma 1,50,000 7,00,000 Stock 1,00,000 Reserve Fund 60,000 Debtors 80,000 Creditors 1,10,000 Cash 80,000 8,70,000 8,70,000

Virad died on October 1, 2013. It was agreed between his executors and the remaining partner's that:

(a) Goodwill of the firm be valued at $2\frac{1}{2}$years purchase of average profits for the last three years. The average profits were Rs 1,50,000.
(b) Interest on capital be provided at 10% p.a.
(c) Profit for the year 2013−14 be taken as having accrued at the same rate as that of the previous year which was Rs 1,50,000.
Prepare Virad's Capital Account to be presented to his Executors as on October 1, 2013.

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• Question 14

On 1st April, 2012, Janta Ltd. Was formed with an authorized capital of Rs 50,00,000 divided into 1,00,000 equity shares of Rs 50 each. The company issued prospectus inviting applications for 90,000 shares. The issue price was payable as under:
On Application: Rs 15
On Allotment : Rs 20
On Call : Balance amount
The issue was fully subscribed and the company allotted shares to all the applicants. The company did not make the call during the year.
Show the following:
(a) Share capital in the Balance Sheet of the company as per revised Schedule-VI, Part-I of the Companies Act, 1956.
(b) Also prepare 'Notes to Accounts' for the same.

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• Question 15

Abdul, Kadir and Kasim were partners in a firm supplying food items. They were sharing profits in the ratio of 5 : 3 : 2. Their capitals on 1st April, 2010 were Rs 1,00,000, Rs 1,50,000 and Rs 3,00,000 respectively. After the floods in Uttaranchal, all partners decide to personally help the flood victims.

For this Abdul withdrew Rs 20,000 from the firm on 1st September, 2012, Kadir instead of withdrawing cash from the firm took some food items amounting to Rs 24,000 from the firm and distributed to the flood victims. On the other hand, Kasim withdrew Rs 1,00,000 from his capital on 1st January, 2013 and provided a Mobile Medical Van for medical facilities in the flood affected area.

The partnership deep provides for charging interest on drawings @ 6% p.a. After the Final Accounts were prepared, it was discovered that interest on drawings had not been charged.

Give the necessary adjusting journal entry and show the working notes clearly. Also state any two values that the partners wanted to communicate to the society.

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• Question 16

Jayant and Ramakant were partners in a firm. On 31st March, 2013 their Balance Sheet was as follows:

 Balance Sheet of Jayant and Ramakant as on 31st March, 2013 Liabilities Amount Rs Assets Amount  Rs Creditors 75,0000 Bank 70,000 Workman Compensation Fund 45,000 Debtors 2,00,000 Jayant’s Current Account 15,000 Stock 20,000 Capital’s : Furniture 20,000 Jayant 3,00,000 Machinery 3,12,000 Ramakant 2,00,000 Ramakant’s Current Account 13,000 6,35,000 6,35,000

On the above date the firm was dissolved:
(i) Jayant took over 40% of stock at 20% less than its book value and the remaining stock was sold for Rs 15,000. Furniture realized Rs 20,000.
(ii) An unrecorded asset was sold for Rs 3,000. Machinery was sold at a loss of Rs 75,000.
(iii) Debtors were realized at a discount of Rs 10,000.
(iv) There was an outstanding bill for repairs for which Rs 38,000 were paid.
Prepare Realisation Account.

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• Question 17

XYZ Ltd. invited applications for 40,000 equity shares of Rs 100 each at a discount of 6%. The amount was payable as follows:
On Application and Allotment − Rs 90 per share
On First and Final call − the balance amount.
Application for 60,000 shares were received. Applications for 10,000 shares were rejected and shares were allotted on pro-rata basis to remaining applicants. Excess application money received on application and allotment was adjusted towards sums due on first and final call. The calls were made. A shareholder, who applied for 50 share, failed to pay the first and final call money. His shares were forfeited. All the forfeited shares were re-issued at Rs 97 per share fully paid up.
Pass necessary journal entries for the above transactions in the books of XYZ Ltd.

OR

AB Ltd. invited applications for issuing 75,000 equity shares of Rs 100 each at a premium of Rs 30 per share. The amount way payable as follows:
On Application and Allotment − Rs 85 per share (including premium)
On First and Final call − the balance Amount
Applications for 1,27,500 shares were received. Applications for 27,500 shares were rejected and share were allotted on pro-rata basis to the remaining applicants. Excess money received on application and allotment was adjusted towards sums due to first and final call. The calls were made. A shareholder, who applied for 1,000 shares, failed to pay the first and final call money. His shares were forfeited. All the forfeited shares were reissued at Rs 150 per share fully paid up.
Pass necessary journal entries for the above transactions in the books of AB Ltd.

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• Question 18

Mohan and Mahesh were partners in a firm sharing profits in the ratio of 3 : 2. On 1st April, 2012 they admitted Nusrat as a partner in the firm. The Balance Sheet of Mohan and Mahesh on that date was as under :

 Balance Sheet of Mohan and Mahesh as on 1st April, 2012 Liabilities Amount Rs Assets Amount Rs Creditors 2,10,000 Cash in hand 1,40,000 Workmen's Compensation Fund 2,50,000 Debtors 1,60,000 General Reserve 1,60,000 Stock 1,20,000 Capitals: Machinery 1,00,000 Mohan 1,00,000 Building 2,80,000 Mahesh 80,000 1,80,000 8,00,000 8,00,000

It was agreed that:

(i) The value of Building and Stock be appreciated to Rs 3,80,000 and Rs 1,60,000 respectively.
(ii)The liabilities of workmen's compensation fund was determined at Rs 2,30,000.
(iii) Nusrat brought in her share of goodwill Rs 1,00,000 in cash.
(iv) Nusrat was to bring further cash as would make her capital equal to 20% of the combined capital of Mohan and Mahesh after above revaluation and adjustments are carried out.
(v) The future profit sharing ratio will be Mohan $\frac{{2}^{\mathrm{th}}}{5}$, Mahesh $\frac{{2}^{\mathrm{th}}}{5}$, Nusrat $\frac{{1}^{\mathrm{th}}}{5}$.

Prepare Revaluation Account, Partner's Capital Accounts and Balance Sheet of the new firm. Also show clearly the calculation of Capital brough by Nusrat.

OR

Kushal Kumar and Kavita were partners in a firm sharing profits in the ratio of 3 : 1 : 1.
On 1st April, 2012 their Balance Sheet was as follows :

 Balance Sheet of Kushal, Kumar and Kavita as on 1st April, 2012 Liabilities Amount Rs Assets Amount Rs Creditors 1,20,000 Cash 70,000 Bills Payable 1,80,000 Debtors 2,00,000 General Reserve 1,20,000 Less: Provision 10,000 1,90,000 Capitals: Stock 2,20,000 Kushal 3,00,000 Furniture 1,20,000 Kumar 2,80,000 Building 3,00,000 Kavita 3,00,000 8,80,000 Land 4,00,000 13,00,000 13,00,000

On the above date Kavita retired and the following was agreed :

(i) Goodwill of the firm was valued at Rs 40,000.
(ii) Land was to be appreciated by 30% and building was to be depreciated by Rs 1,00,000.
(iii) Value of furniture was to be reduced by Rs 20,000.
(iv) Bad debts reserve is to be increased to Rs 15,000.
(v) 10% of the amount payable to Kavita was paid in cash and the balance was transferred to her Loan Account.
(vi) Capitals of Kushal and Kumar will be in proportion to their new profit sharing ratio. The surplus/deficit, if any in their Capital Accounts will be adjusted through Current Accounts.

Prepare Revaluation Account, Partner's Capital Accounts and Balance Sheet of Kushal and Kumar after Kavita's retirement.

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• Question 19

State any one limitation of 'Analysis of Financial Statements'.

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• Question 20

What is meant by 'Cash Equivalents' while preparing Cash Flow Statement?

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• Question 21
State the objective of preparing 'Cash Flow Statement'. VIEW SOLUTION

• Question 22

Under which major sub-headings the following items will be placed in the Balance Sheet of a company as per revised Schedule-VI, Part-I of the Companies Act, 1956:
(i) Accrued Incomes
(ii) Loose Tools
(iii) Provision for employees benefits
(iv) Unpaid dividend
(v) Short-term loans
(vi) Long-term loans.

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• Question 23

From the following 'Statement of Profit & Loss' for the year ended 31st March, 2013, prepare a 'Comparative Statement of Profit & Loss' of Vidya Ltd.

 Particulars Note No. 2012-2013 Rs 2011-2012 Rs Revenue from operations Other Incomes Expenses 14,00,000   4,00,000 11,00,000 11,00,000   3,00,000 12,00,000

Rate of income tax was 50%.

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• Question 24

(a) From the following information, compute Debt-Equity Ratio:

 Rs Long Term Borrowings 4,00,000 Long Term Provisions 2,00,000 Current Liabilities 1,00,000 Non-current-Assets 7,20,000 Current-Assets 1,80,000

(b) The current ratio of Y Ltd. is 2 : 1. State with reason which of the following transactions would (i) increase; (ii) decrease or (iii) not change the ratio.
(2) Company purchased furniture of Rs 45,000. The vendor was paid by issue of equity shares of Rs 10 each at par.

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• Question 25

Prepare a Cash Flow Statement on the basis of the information given in the Balance Sheets of Liva Ltd. as at 31-3-2013 and 31-3-2012 :

 Particulars Note No. 31-3-2013 Rs 31-3-2012 Rs I. Equity and Liabilities (1) Shareholders Funds (a) Share Capital 2,10,000 1,80,000 (b) Reserves & Surplus 1,32,000 24,000 (2) Non-current Liabilities 1 (a) Long term-borrowings 1,50,000 1,50,000 (3) Current Liabilities (a) Trade Payables 75,000 27,000 Total 5,67,000 3,81,000 II. Assets (1) Non-current Assets (a) Fixed Assets (i) Tangible Assets 2,94,000 2,52,000 (b) Non-current Investments 48,000 18,000 (2) Current Assets (a) Current-Investments (marketable) 54,000 60,000 (b) Inventories 1,07,000 24,000 (c) Trade Receivables 40,000 17,500 (d) Cash and Cash-equivalents 24,000 9,500 Total 5,67,000 3,81,000

Notes to Accounts :
Note − 1

 Particulars 2013 Rs 2012 Rs Reserves and Surplus Surplus (balance in statement of profit and loss) 1,32,000 24,000
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