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# Board Paper of Class 12-Commerce 2012 Accountancy (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) State any two uses of Securities Premium as stated in Section 78 of the Companies Act, 1956. (ii) In a Cost Sheet, how would you treat: (a) Primary packing material. (b) Secondary packing material. (iii) Give two differences between Sacrificing Ratio and Gaining Ratio. (iv) In case of a Joint Venture business, how is abnormal loss of goods which have been insured, treated in the books of accounts? (v) List two instances when a partner’s Fixed Capital may change. (vi) List any two objectives of stock valuation. (vii) Why is a General Ledger Adjustment Account opened? (viii) Assuming that the Debt-Equity Ratio of a company is 2 : 1, state whether this ratio would increase, decrease or not change in the following cases : (a) Issue of new shares for cash. (b) Repayment of a long-term bank loan. (ix) What are trade investments? (x) The firm with X, Y and Z as partners earned a profit of Rs 3,00,000 during the year ended 31st March, 2011. 20% of this profit was to be transferred to General Reserve. Pass the necessary Journal entry for the same.
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• Question 2
Amit, Pawan and Suresh are partners in a firm, sharing profits in the ratio 2 : 3 : 1. Suresh retired on
1st April, 2011. At the time of his retirement:
(a) Goodwill of the firm was valued at Rs 36,000.

(b) The Balance Sheet of the firm showed:

(i) A General Reserve of Rs 1,20,000.

(ii) A debit balance of Rs 48,000 in the Profit & Loss Account.

(iii) Rs 48,000 each, in the Joint Life Policy Account and Joint Life Policy Reserve Account. It was decided that the Joint Life Policy would be surrendered on the date of Suresh’s retirement.

Record necessary Journal entries for the above adjustments to be made in the books of the firm on the date of Suresh’s retirement.                                                                 [10 Marks] VIEW SOLUTION

• Question 3
Paula Fashioners’ Limited maintains its books under the Sectional Balancing System. From the particulars given below for the year ending 31st December, 2011, you are required to prepare necessary Control Accounts in the General Ledger:                                                            [14 Marks]  Particulars Debit Amount (Rs) Credit Amount (Rs) Opening Balance Suppliers’ Ledger 960 96,500 Customers’ Ledger 95,700 480 Closing Balance Suppliers’ Ledger 1,500 – Customers’ Ledger – 2,300 Other Details Credit purchases 2,49,720 Overdue interest charged by suppliers 1,590 Received from customers (including bad debts recovered Rs 1,200) 2,47,400 Credit Sales 2,72,000 Transfer from Suppliers’ Ledger to Customers’ Ledger 680 B/R received from customers 32,000 Cash paid to suppliers 2,89,150
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• Question 4
The following extract of costing information relates to a commodity for the year ended 31st March, 2007:       [14 Marks]
 Particulars Amount (Rs) 1st April 2006: Raw materials 50,000 Finished products (1,000 tonnes) 40,000 Work-in-progress 12,000 31st March, 2007: Raw materials 55,600 Finished products (2,000 tonnes) ? Work-in-progress 40,000 Transactions during the year: Raw materials purchased 3,00,000 Direct wages 25,000 Rent, rates and insurance of factory 1,00,000 Carriage inwards 3,600 Cost of factory supervision 20,000 Sales of finished products 7,50,000

16,000 tonnes were produced during the year. It was decided to value the closing stock as per FIFO.
Prepare a statement showing:
(a) Value of raw materials used
(b) Cost of the output for the year
(c) Value of closing stock
(d) Profit made during the year VIEW SOLUTION

• Question 5
The Balance Sheets of Cooper and Company as on 31st December, 2010 and 31st December, 2011 are given below:      [14 Marks]  Balance Sheet Particulars 31.12.10 Amount (Rs) 31.12.11 Amount (Rs) I. Equity and Liabilities Equity Share Capital 1,50,000 1,80,000 General Reserve 30,000 30,000 Profit & Loss A/c 50,000 70,000 12% Debentures 51,000 69,000 12% Public Deposits 80,000 1,20,000 Creditors 8,000 10,000 Bills Payable 6,000 4,000 Cash Credit 3,000 1,000 Total 3,78,000 4,84,000 II. Assets Goodwill 10,000 5,000 Building 1,50,000 2,20,000 Plant 80,000 1,00,000 Stock 60,000 75,000 Debtors 20,000 17,000 Bills Receivable 8,000 9,000 Accrued Income 10,000 6,000 Prepaid Expenses – 2,000 Cash 40,000 50,000 Total 3,78,000 4,84,000

(a) Depreciation charged on building Rs 10,000
(b) Depreciation charged on plant Rs 5,000
(c) Interest paid on debentures Rs 7,200 for the year
(d) Interest paid on public deposit Rs 9,600 for the year
From the above information, prepare a Cash Flow Statement as per Accounting Standard-3 for the year ended 31st December, 2011.

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• Question 6

In 2010, Ganga Ltd. was registered with an authorised capital of Rs 1,00,000 in Equity shares of Rs 10 each. Of these, 4,000 equity shares were issued as fully paid to vendors for the purchase of Plant and Machinery and the remaining 6,000 shares were subscribed for, by the public for cash. During the first year, Rs 6 per equity share was called up, on these 6,000 shares, payable Rs 3 on application, Rs 1 on allotment and Rs 2 on the first call.                     [14 Marks]

The amount received in respect of these shares were as follows:
On 5,000 shares, the full amount called
On 600 shares, Rs 4 per share
On 400 shares, Rs 3 per share
The company forfeited all those shares on which only Rs 3 had been received and reissued them at Rs 4 per share, Rs 6 called up.
Journalise the transactions in the books of the company and prepare a Calls-in-Arrear Account.

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• Question 7
Anita, Bina and Chitra were in partnership, sharing profits and losses equally. The firm’s Balance Sheet as on 31st December, 2011, was as follows:        [14 Marks]
 Balance Sheet as on 31st December, 2011 Liabilities Amount (Rs) Assets Amount (Rs) Anita’s Capital A/c 24,000 Plant and Machinery 26,000 Bina’s Capital A/c 8,000 Debtors 53,000 Chitra’s Capital A/c 4,000 Stock 22,200 Anita’s Current A/c 10,800 Cash 1,600 Creditors 64,000 Bina’s Current A/c 2,000 Chitra’s Current A/c 6,000 1,10,800 1,10,800

It was decided to dissolve the firm on 31st December, 2011.

The plant and machinery, debtors and stock were sold by the firm for Rs 70,000 and the creditors were paid off.

From the above, prepare the Realisation Account, Partners’ Capital Accounts and Cash Account.

Modified

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• Question 8
 From the following information, calculate (upto two decimal places): [14 Marks]

(i) Liquid Ratio
(ii) Current Ratio
(iii) Proprietary Ratio
(iv) Working Capital Turnover Ratio
(v) Gross Profit Ratio
(vi) Operating Ratio
(vii) Net Profit Ratio
 Particulars Amount (Rs) Cost of Goods sold 6,00,000 Operating Expenses 50,000 Gross Sales 8,00,000 Sales Returns 10,000 Total Current Assets 3,00,000 Total Current Liabilities 1,00,000 Total Assets 7,00,000 Closing Stock 30,000 Prepaid Insurance 5,000 Preliminary Expenses 6,000 Share Capital 5,60,000 Reserve and Surplus 40,000
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• Question 9

On 1st January, 2000, Star Ltd. issued 1,000, 12% Debentures of Rs 100 each at a discount of 5% repayable as follows:                                   [14 Marks]
 Particulars Amount (Rs) On 31st December, 2002 20,000 On 31st December, 2003 60,000 On 31st December, 2004 20,000

The company pays interest on debentures annually. You are required to:
(a) Pass the Journal entries (including interest) for the year beginning 1st January, 2000 to 31st December, 2000.
(b) Prepare the ‘Discount on issue of Debenture Account’, till it is finally closed.

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• Question 10
The following balances have been extracted from the books of King Furnishings Ltd. as on 31st March, 2011:      [14 Marks]
 Particulars Amount (Rs) Particulars Amount (Rs) Equity Share Capital 4,00,000 Accumulated Depreciation 30,000 (fully paid shares of Rs 100 each) Provision for Taxation 25,000 Fixed Assets (at cost) 6,60,000 Reserves and Surplus 1,00,000 Inventories 40,000 5% Debentures 2,00,000 Cash and Bank Balance 50,000 (secured against land) Creditors 30,000 Unsecured Loan from Subsidiaries 50,000 Bills Receivable 20,000 Underwriting Commission 5,000 Investments 70,000 Interest accrued and due on 5% Debentures 10,000

You are required to prepare a Balance Sheet of King Furnishings Ltd. as on 31st March, 2011, in the Horizontal* Form, as prescribed under Schedule VI of the Companies Act, 1956.

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