Board Paper of Class 12-Commerce 2011 Accountancy MeritNation(SET 1) - Solutions
1) This question paper contains two sections: A and B.
2) Section A is compulsory.
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.
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 ?**
- 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
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 AccountVIEW SOLUTION
(ii) Co-Venturers’ Account
(iii) Joint Bank Account
- 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
(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.
- 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 9,400David 18,000Less : Prov. for DD 400 9,000Bimal 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 :
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