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Board Paper of Class 12-Commerce 2011 Accountancy MeritNation(SET 1) - Solutions

General Instructions
1) This question paper contains two sections: A and B.
2) Section A is compulsory.

Section A
i. This section consists of 2 compulsory questions.
ii. Question No. 1 carries 20 marks.
iii. Question No. 2 carries 10 marks.
iv. This whole section is of 30 marks in total.

Section B
i. This section consists of 8 questions.
ii. Attempt any 5 questions from question nos. 3 to 10 carrying 14 marks each.
iv. This whole section is of 70 marks in total.

  • Question 1
    Answer each of the following questions briefly : [10 × 2] = [20 Marks]
    (i) How will you deal with the following items during the preparation of a cost sheet ?**
      (a) Salary of Public Relations Officer.
      (b) Subscription to technical journals.
    (ii) What journal entry will you pass when unsold stock is taken over by a Co-venturer assuming that a separate set of books is maintained ?
    (iii) Which method of valuation of inventory will you recommend during :**
      (a) Periods of rising prices.
      (b) Periods of falling prices.
    (iv) State the entries you will pass in case of transfer from Debtors Ledger to Creditors Ledger under Self Balancing System.**
    (v) State two differences between average profits and super profits.
    (vi) What are the closing entries for interest on calls in arrear account and interest on calls in advance account ?
    (vii) State two differences between current ratio and quick ratio.
    (viii) List any two types of operating activities.
    (ix) Explain the nature of interest on debentures.
    (x) How will you deal with a situation when a solvent partner’s capital account reflects a debit balance in the application of Garner Vs. Murray ?**
    VIEW SOLUTION
  • Question 2
    The following information is available from the records of Singh and Company Limited for the month ended 30th September, 2010 : [10 Marks]
     
     Particulars
              Amount
            (Rs)
    Purchases of raw materials 1,00,000
    Opening stock of finished goods (1,000 units) 13,600
    Direct wages 68,000
    Factory overhead 80% of direct wages
    Administrative overhead Rs 2 per unit
    Selling and Distribution overhead Rs 1.50 per unit
    Closing stock of finished goods 1,800 units
    Royalties on production 10,000
    Sale of scrap of raw materials (normal loss) 8,000

    The manufacturer sells the product so as to reflect a profit of 25% on sales and 6,200 units are sold in the market.
    From the above information, you are required to prepare a Cost Sheet showing the total cost for the month ended 30th September, 2010.

    Note : All calculations are to be made to the nearest rupee and sales are made on the basis of LIFO principle. VIEW SOLUTION
  • Question 3
    Roger and Suresh sharing profits and losses in the ratio of 3 : 2 jointly agreed to underwrite the subscription of 60,000 equity shares of Rs 10 each of Parag and Company Limited at a premium of Rs 3 per share. The underwriting commission is 4% as provided in the Articles. Applications were received from the public only for 40,000 shares and so the underwriters took over the remaining shares. A joint bank account was opened towards which Roger contributed Rs 55,000 and Suresh Rs 45,000. A sum of Rs 7,000 was incurred on various expenses which were paid out of the joint bank account. Parag and Company paid the underwriting commission by cheque. At the close of the venture, the underwriters sold 12,000 shares at the rate of Rs 15 per share and the rest of the shares were taken up by them at the rate of Rs 14 per share, in their profit and loss sharing ratio.                            [14 Marks]

    Prepare :
    (i) Joint Venture Account
    (ii) Co-Venturers’ Account
    (iii) Joint Bank Account
    VIEW SOLUTION
  • Question 4
    Mr. Khanna maintains his books on sectional balancing ledgers.                [14 Marks]
     
    Transactions Amount (Rs) Transactions Amount (Rs)
    Total Sales 1,35,000 Credit Sales 1,16,000
    Purchases (Credit) 72,700 Purchases (Cash) 11,800
    Bad debts written off 1,000 Provision for bad and doubtful debts 720
    Purchases returns
    (out of credit purchases)
    2,500 Amount received against bad
    debtors written off last year
    600
    Discount received 300 Cash collected from debtors 83,000
    Bills receivable received
    (excluding bills renewed)
    57,500 Noting charges debited to debtors 592
    Bills receivable renewed 10,000 Bills payable accepted 8,000
    Sold ledger (Cr.) on 30.11.10 260    

    On 01.11.2010, Bought Ledger (Cr.) Rs 30,000 and Sold Ledger (Dr.) Rs 60,000.

    From the above particulars, prepare Control Accounts in the relevant ledger. VIEW SOLUTION
  • Question 5
    Given below is the Balance Sheet of Gurmeet and Company Limited as on 31st December, 2009 and 31st December, 2010 : [14 Marks]
    Balance Sheet
    Liabilities 2009 Amount (Rs) 2010 Amount (Rs) Assets 2009 Amount (Rs) 2010 Amount (Rs)
    Equity Share Capital 3,00,000 3,50,000 Goodwill 1,00,000 80,000
    General Reserve 1,00,000 1,50,000 Machinery 3,20,000 4,10,000
    Profit and Loss A/c 60,000 70,000 12% Investments 30,000 80,000
    11% Debentures 1,50,000 2,50,000 Stock 40,000 55,000
    Creditors 75,000 1,10,000 Debtors 80,000 1,90,000
    Bills Payable 10,000 15,000 Bank 1,20,000 1,30,000
          Debenture Discount       5,000
      6,95,000 9,45,000   6,95,000 9,45,000
               

    Additional Information:

    (a) Investments costing Rs 36,000 were sold for Rs 30,000 during the year 2010.

    (b) New debentures have been issued at the end of the current accounting year.

    (c) New investments have been purchased at the end of the current accounting year.

    (d) Depreciation charged on machinery during the current accounting year was Rs 10,000
     
    From the above information, prepare a Cash Flow Statement as per Accounting Standard-3. VIEW SOLUTION
  • Question 6
    Ahmed, Bina and Chitra are partners sharing profits and losses in the ratio of 3 : 2 : 1. Their balance sheet as on 31st March, 2010 stood as under : [14 Marks]
     
    Balance Sheet
    as on 31st March, 2010
    Liabilities Amount (Rs) Assets Amount (Rs)
    Ahmed’s Capital 1,50,000 Equipment 3,00,000
    Bina’s Capital   1,00,000 Furniture 50,000
    Chitra’s Capital 50,000 Stock 75,000
    General Reserve 1,20,000 Debtors 80,000
    Bills Payable 20,000 Cash   10,000
    Creditors 75,000    
           
      5,15,000   5,15,000
           

    Ahmed died on 31.03.2010 and the following decisions were taken by the surviving partners according to the partnership deed :
    (a) Equipment to be revalued at Rs 3,50,000 and furniture to appreciate by Rs 10,000.
    (b) A provision of 10% to be created for doubtful debts.
    (c) Stock to be revalued at Rs 83,000.
    (d) The goodwill of the firm was valued at Rs 30,000 on Ahmed’s death.

    The firm had a joint life policy of Rs 90,000. The policy was surrendered and the death claim was realized in full by cheque from the insurance company.
    The surviving partners finally agreed that the values of assets and liabilities must remain the same and as such, there must not be any change in their book values as a result of the above mentioned adjustments, except the bank balance.
    The amount payable to Ahmed was transferred to his executor’s account.
    Prepare Partners’ Capital Account and a Balance Sheet of Bina and Chitra. VIEW SOLUTION
  • Question 7
    Sachdeva Tyres and Company Limited issued applications for 1,00,000 equity shares of Rs 10 each at a premium of Rs 3 per share. The amount was payable as follows :       [14 Marks]   
    (i) On application : Rs 2
    (ii) On allotment : Rs 5 (including premium)
    (iii) Balance on the first and the final call.

    Applications were received for 1,50,000 shares. Allotment was made pro-rata to all applicants. Sudhir who had applied for 300 shares failed to pay allotment and call money. His shares were forfeited after the first and the final call. Of these, 170 shares were reissued to Pramod at Rs 9 per share fully paid.
    Pass the necessary Journal Entries to show the above transaction. Show your working clearly. VIEW SOLUTION
  • Question 8
    (a) Gurung Ltd. took over assets of Rs 6,00,000 and liabilities of Rs 60,000 from Batra Ltd. for the purchase consideration of Rs 5,50,000. It paid the purchase consideration by issuing 8% debentures of Rs 100 each at 10% premium. [14 Marks]
    (b) Gurung Ltd. purchased land from Jaiswal Ltd. for Rs 4,50,000. The consideration was paid by issuing 5% debentures at a discount of 10%.  
    (c) Gurung Ltd. issued 1,000, 6% debentures of Rs 100 each at a discount of 7% repayable after 5 years at a premium of 10%.  
       From the above particulars, pass journal entries in the books of Gurung Ltd. to record the transactions.
    VIEW SOLUTION
  • Question 9
    David and Bimal are partners sharing profits and losses in the ratio 3 : 2. Their Balance Sheet as on 31st March, 2010 was as follows : [14 Marks]
     
    Balance Sheet
    as on 31st March, 2010
    Liabilities Amount (Rs) Assets Amount (Rs)
    Sundry Creditors                  82,000 Cash 32,000
    General Reserve 3,000 Stock 15,000
    Capital A/c :   Debtors 9,400  
    David
    18,000  
    Less : Prov. for DD
    400 9,000
    Bimal
    12,000 30,000 Building 55,000
        Furniture 4,000
      1,15,000   1,15,000
           

    They admitted Chander as a new partner on 1.4.2010 and the new profit sharing ratio became 5 : 3 : 2. Chander introduced a capital of Rs 16,000. Chander was unable to bring any cash for goodwill and so it was decided to value the goodwill on the basis of his share in the profits and the capital contributed by him. The following revaluations were made at the time of Chander’s admission :
    (i) Stock had been overvalued by Rs 750 and furniture by Rs 500.
    (ii) Provision for doubtful debts to be increased by Rs 100.
    (iii) A creditor for Rs 2,350 was paid off by Bimal privately for which he was not to be reimbursed.

    Prepare the Revaluation account, Partners’ capital accounts and a Balance Sheet of the new firm on the date of Chander’s admission. Show your working clearly. VIEW SOLUTION
  • Question 10
    The following figures have been extracted from the books of Arvind and Company Limited :
                                                                                                                    [14 Marks]
     
    Particulars       Amount
        (Rs)
    Net sales 12,00,000
    Net purchases 5,00,000
    Administrative expenses 65,000
    Selling and distribution expenses 35,000
    Gross profit 20% on Sales
    Net profit after tax 10,00,000
    Total assets 40,00,000
    Equity share capital of Rs 10 each 10,00,000
    10% Preference share capital of Rs 10 each 3,00,000
    Reserves and surplus 2,00,000
    8% Debentures 8,00,000
    Opening debtors 1,20,000
    Closing debtors 80,000
    Opening bills receivable 60,000
    Closing bills receivable 40,000
    Opening creditors 1,30,000
    Closing creditors 70,000
    Closing bills payable 50,000
    Opening bills payable 1,00,000
     
    From the above information, calculate the following :
    (a) Total assets to debt ratio
    (b) Debt equity ratio
    (c) Operating ratio
    (d) Operating profit ratio
    (e) Earning per share
    (f) Debtors turnover ratio
    (g) Creditors turnover ratio
     
    Note : All calculation are to be made to two places of decimal. VIEW SOLUTION
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