CBSE Class 12 Accountancy 2019 — Set 67/2/1

Under which type of activity will you classify 'Cash advances and loans made to third party' while preparing Cash Flow Statement ?

State the primary objective of preparing 'Cash Flow Statement.'

Average profits of a firm during the last few years are ₹ 80,000 and the normal rate of return in a similar business is 10%. If the goodwill of the firm is ₹ 1,00,000 at 4 years' purchase of super profit, find the capital employed by the firm.

'UZ Ltd.' purchased Plant and Machinery from Elk Machine Ltd. for ₹ 6,90,000. Elk Ltd. was paid by accepting a draft of ₹ 90,000 payable after three months and the balance by issue of 6% debentures of ₹ 100 each at a discount of 20%. Pass necessary journal entries for the above transactions in the books of 'UZ Ltd.' OR 'ZK Ltd.' issued ₹ 4,00,000, 9% Debentures of ₹ 100 each at a discount of 5% redeemable at a premium of 10%. Pass necessary journal entries for the above transactions in the books of 'ZK Ltd.'

Willow Ltd. was registered with an authorized capital of ₹ 10,00,000 divided into 1,00,000 equity shares of ₹ 10 each. The company offered 80,000 shares for subscription to the public, out of which 75,000 shares were subscribed. All amounts were received except the final call of ₹ 2 per share on 3,000 shares. Fill in the missing figures in the Balance Sheet of Willow Ltd. as per the provisions of Schedule III, Part I of the Companies Act, 2013. Balance Sheet as at 31st March, 2018 (An extract) | Particulars | Note No. | ₹ | | --- | --- | --- | | EQUITY AND LIABILITIES | | | | 1. Shareholders Funds | | | | (a) Share Capital | 1 | .......... | | | | .......... | Note to Accounts | Note No. | Particulars | ₹ | | --- | --- | --- | | 1 | Share Capital | | | | Authorised Capital | | | | .......................................... | .......... | | | Issued Capital | | | | .......................................... | .......... | | | Subscribed Capital | | | | Subscribed and full paid ____ shares of ₹ 10 each | .......... | | | Subscribed but not fully paid ____ shares of ₹ 10 each .......... | | | | Less ................. .......... | .......... | | | | .......... |

Hari, Kunal and Uma are partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. From 1st April, 2018 they decided to share future profits and losses in the ratio of 2 : 5 : 3. Their Balance Sheet showed a balance of ₹ 75,000 in the Profit and Loss Account and a balance of ₹ 15,000 in Investment Fluctuation Fund. For this purpose, it was agreed that : (i) Goodwill of the firm was valued at ₹ 3,00,000. (ii) That investments (having a book value of ₹ 50,000) were valued at ₹ 35,000. (iii) That stock having a book value of ₹ 50,000 be depreciated by 10%. Pass the necessary journal entries for the above in the books of the firm.

Meera, Sarthak and Rohit were partners sharing profits in the ratio of 2 : 2 : 1. On 31 March, 2018, their Balance Sheet was as follows : Balance Sheet of Meera, Sarthak and Rohit as at 31 March, 2018 | Liabilities | Amount ₹ | Assets | Amount ₹ | | --- | --- | --- | --- | | Creditors | 3,00,000 | Fixed Assets | 7,00,000 | | Contingency Reserve | 1,00,000 | Stock | 2,00,000 | | Capital : | | Debtors | 1,50,000 | | Meera | 4,00,000 | Cash at bank | 3,50,000 | | Sarthak | 3,50,000 | | | | Rohit | 2,50,000 | | | | | 14,00,000 | | 14,00,000 | Sarthak died on 15th June, 2018. According to the partnership deed, his executors were entitled to : (i) Balance in his Capital Account. (ii) His share of goodwill will be calculated on the basis of thrice the average of the past 4 years' profits. (iii) His share in profits up to the date of death on the basis of average profits of the last two years. The time period for which he survived in the year of death will be calculated in months. (iv) Interest on capital @ 12% p.a. up to the date of his death. The firm's profits for the last four years were : 2014 – 15 ₹ 1,20,000, 2015 – 16 ₹ 2,00,000, 2016 – 17 ₹ 2,60,000 and 2017 – 18 ₹ 2,20,000. Sarthak's executors were paid the amount due immediately. Prepare Sarthak's Capital Account to be presented to his executors.

Under which major headings and subheadings will the following items be presented in the Balance Sheet of a company as per Schedule III, Part I of the Companies Act, 2013 ? (i) Interest accrued and due on debentures (ii) Loose tools (iii) Accrued interest on calls in advance (iv) Interest due on calls in arrears (v) Trademarks (vi) Premium on redemption of debentures (vii) Plant and Machinery (viii) Patents OR Explain briefly any four limitations of 'Analysis of Financial Statements.'

(i) From the following information calculate Interest Coverage Ratio : Net profit after interest and tax ₹ 1,20,000; Rate of income tax 40%; 15% debentures ₹ 1,00,000; 12% Mortgage loan ₹ 1,00,000. (ii) A company had Current Assets ₹ 3,00,000 and Current Liabilities ₹ 1,40,000. Afterwards, it purchased goods worth ₹ 20,000 on credit. Calculate the Current Ratio after the purchase of goods. OR Quick ratio of a company is 1 : 1. State, with reason, whether the following transactions will increase, decrease or not change the ratio : (i) Paid insurance premium in advance ₹ 10,000. (ii) Purchased goods on credit ₹ 8,000. (iii) Issued fully paid equity shares of ₹ 1,00,000. (iv) Issued 9% debentures of ₹ 5,00,000 to the vendor for machinery purchased.

Ashish and Kanav were partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2018 their Balance Sheet was as follows : Balance Sheet of Ashish and Kanav as at 31st March, 2018 | Liabilities | Amount ₹ | Assets | Amount ₹ | | --- | --- | --- | --- | | Trade Creditors | 42,000 | Bank | 35,000 | | Employees' Provident Fund | 60,000 | Stock | 24,000 | | Mrs. Ashish's Loan | 9,000 | Debtors | 19,000 | | Kanav's Loan | 35,000 | Furniture | 40,000 | | Workmen's Compensation Fund | 20,000 | Plant | 2,10,000 | | Investment Fluctuation Reserve | 4,000 | Investments | 32,000 | | Capital : | | Profit and Loss Account | 10,000 | | Ashish 1,20,000 | | | | | Kanav 80,000 | 2,00,000 | | | | | 3,70,000 | | 3,70,000 | On the above date they decided to dissolve the firm. (i) Ashish agreed to take over furniture at ₹ 38,000 and pay off Mrs. Ashish's loan. (ii) Debtors realised ₹ 18,500 and plant realised 10% more. (iii) Kanav took over 40% of the stock at 20% less than the book value. Remaining stock was sold at a gain of 10%. (iv) Trade creditors took over investments in full settlement. (v) Kanav agreed to take over the responsibility of completing dissolution at an agreed remuneration of ₹ 12,000 and to bear realization expenses. Actual expenses of realization amounted to ₹ 8,000. Prepare the Realisation Account.

Naveen, Qadir and Rajesh were partners doing an electronic goods business in Uttarakhand. After the accounts of partnership were drawn up and closed, it was discovered that interest on capital has been allowed to partners @ 6% p.a. for the years ending 31st March, 2017 and 2018, although there is no provision for interest on capital in the partnership deed. On the other hand, Naveen and Qadir were entitled to a salary of ₹ 3,500 and ₹ 4,000 per quarter respectively, which has not been taken into consideration. Their fixed capitals were ₹ 4,00,000, ₹ 3,60,000 and ₹ 2,40,000 respectively. During the last two years they had shared the profits and losses as follows : Year Ended | Ratio 31st March, 2017 | 3 : 2 : 1 31st March, 2018 | 5 : 3 : 2 Pass necessary adjusting entry for the above adjustments in the books of the firm on 1st April, 2018. Show your workings clearly. OR On 31st March, 2018 the balance in the Capital Accounts of Abhir, Bobby and Vineet, after making adjustments for profits and drawings were ₹ 8,00,000, ₹ 6,00,000 and ₹ 4,00,000 respectively. Subsequently, it was discovered that interest on capital and interest on drawings had been omitted. The partners were entitled to interest on capital @ 10% p.a. and were to be charged interest on drawings @ 6% p.a. The drawings during the year were : Abhir – ₹ 20,000 drawn at the end of each month, Bobby – ₹ 50,000 drawn at the beginning of every half year and Vineet – ₹ 1,00,000 withdrawn on 31st October, 2017. The net profit for the year ended 31st March, 2018 was ₹ 1,50,000. The profit sharing ratio was 2 : 2 : 1. Pass necessary adjusting entry for the above adjustments in the books of the firm. Also, show your workings clearly.

From the following Balance Sheet of DCX Ltd. and the additional information as at 31st March, 2018 prepare a Cash Flow Statement : DCX Ltd. Balance Sheet as at 31st March, 2018 | Particulars | Note No. | 31.3.2018 ₹ | 31.3.2017 ₹ | | --- | --- | --- | --- | | I – Equity and Liabilities : | | | | | 1. Shareholder's Funds : | | | | | (a) Share Capital | | 30,00,000 | 21,00,000 | | (b) Reserves and Surplus | 1 | 4,00,000 | 5,00,000 | | 2. Non-Current Liabilities : | | | | | Long-term Borrowings | 2 | 8,00,000 | 5,00,000 | | 3. Current Liabilities : | | | | | (a) Trade Payables | | 1,50,000 | 1,00,000 | | (b) Short-term Provisions | 3 | 76,000 | 56,000 | | Total | | 44,26,000 | 32,56,000 | | II – Assets : | | | | | 1. Non-Current Assets : | | | | | Fixed Assets : | | | | | (i) Tangible Assets | 4 | 27,00,000 | 20,00,000 | | (ii) Intangible Assets | | 8,00,000 | 7,00,000 | | 2. Current Assets : | | | | | (a) Current Investments | | 89,000 | 78,000 | | (b) Inventories | | 8,00,000 | 4,00,000 | | (c) Cash and cash equivalents | | 37,000 | 78,000 | | Total | | 44,26,000 | 32,56,000 | Notes to Accounts : | Note No. | Particulars | 31.3.2018 ₹ | 31.3.2017 ₹ | | --- | --- | --- | --- | | 1 | Reserves and Surplus : (Surplus i.e. Balance in the Statement of Profit and Loss) | 4,00,000 | 5,00,000 | | | | 4,00,000 | 5,00,000 | | 2 | Long-term Borrowings : 8% Debentures | 8,00,000 | 5,00,000 | | | | 8,00,000 | 5,00,000 | | 3 | Short-term Provisions : Provision for Tax | 76,000 | 56,000 | | | | 76,000 | 56,000 | | 4 | Tangible Asset : Machinery | 33,00,000 | 25,00,000 | | | Less : Accumulated Depreciation | (6,00,000) | (5,00,000) | | | | 27,00,000 | 20,00,000 | Additional Information : (i) During the year a machinery costing ₹ 8,00,000 on which accumulated depreciation was ₹ 3,20,000 was sold for ₹ 6,40,000. (ii) Debentures were issued on 1st April, 2017.

Denspar Ltd. invited applications for issuing 2,00,000 equity shares of ₹ 10 each at a premium of ₹ 20 per share. The amount was payable as follows : On Application – ₹ 2 per share On Allotment – ₹ 13 per share (including ₹ 10 premium) On First Call – ₹ 7 per share (including ₹ 5 premium) On Final Call – ₹ 8 per share (including ₹ 5 premium) Applications for 1,80,000 shares were received. Shares were allotted to all the applicants. Yogesh, a shareholder holding 5,000 shares paid his entire share money along with the allotment money. Vishesh, a holder of 7,000 shares, failed to pay the allotment money. Afterwards the first call was made. Vishesh paid the allotment money along with the first call money. Samyesh, holding 2,000 shares did not pay the final call. Samyesh's shares were forfeited immediately after the final call. Out of the forfeited shares, 1,500 shares were reissued at ₹ 8 per share fully paid up. Pass the necessary journal entries for the above transactions in the books of Denspar Ltd. OR 'KLN Ltd.' invited applications for issuing 1,00,000 shares of ₹ 10 each at a premium of ₹ 2 per share. The amount was payable as follows : On Application – ₹ 3 per share (including premium ₹ 1) On Allotment – ₹ 4 per share (including premium ₹ 1) On First call – ₹ 3 per share On Second and Final Call – Balance amount Application for 1,90,000 shares were received. Allotment was made to the applicants as follows : | Category | No. of Shares Applied | No. of Shares Allotted | | --- | --- | --- | | I | 50,000 | 40,000 | | II | 1,00,000 | 60,000 | Remaining applications were rejected. Rajat, a shareholder belonging to Category I who had applied for 2,500 shares, failed to pay the amount due on allotment and first call. His shares were immediately forfeited. Reema, a shareholder belonging to Category II who was holding 3,000 shares failed to pay the first call and second call money. Her shares were also forfeited. Afterwards 4,000 shares were reissued @ ₹ 8 per share fully paid up. These included all the forfeited shares of Reema. Pass necessary journal entries for the above transactions in the books of 'KLN Ltd.'

Mohan, Vinay and Nitya were partners in a firm sharing profits and losses in the proportion of 1/2, 1/3 and 1/6 respectively. On 31st March, 2018, their Balance Sheet was as follows : Balance Sheet of Mohan, Vinay and Nitya as at 31st March, 2018 | Liabilities | Amount ₹ | Assets | Amount ₹ | | --- | --- | --- | --- | | Creditors | 48,000 | Cash at Bank | 31,000 | | Employees' Provident Fund | 1,70,000 | Bills Receivable | 54,000 | | Contingency Reserve | 30,000 | Book Debts 63,000 Less : Provision for doubtful debts 2,000 | 61,000 | | Capital : | | Plant and Machinery | 1,20,000 | | Mohan 1,20,000 | | Land and Building | 2,92,000 | | Vinay 1,00,000 | | | | | Nitya 90,000 | 3,10,000 | | | | | 5,58,000 | | 5,58,000 | Mohan retired on the above date and it was agreed that : (i) Plant and machinery will be depreciated by 5%. (ii) An old computer previously written off was sold for ₹ 4,000. (iii) Bad debts amounting to ₹ 3,000 will be written off and a provision of 5% on debtors for bad and doubtful debts will be maintained. (iv) Goodwill of the firm was valued at ₹ 1,80,000 and Mohan's share of the same was credited in his account by debiting Vinay's and Nitya's accounts. (v) The capital of the new firm was to be fixed at ₹ 90,000 and necessary adjustments were to be made by bringing in or paying off cash as the case may be. (vi) Vinay and Nitya will share future profits in the ratio of 3 : 2. Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm. OR Leena and Rohit are partners in a firm sharing profits in the ratio of 3 : 2. On 31st March, 2018, their Balance Sheet was as follows : Balance Sheet of Leena and Rohit as at 31st March, 2018 | Liabilities | Amount ₹ | Assets | Amount ₹ | | --- | --- | --- | --- | | Sundry Creditors | 80,000 | Cash | 42,000 | | Bills Payable | 38,000 | Debtors 1,32,000 Less : Provision for doubtful debts 2,000 | 1,30,000 | | General Reserve | 50,000 | Stock | 1,46,000 | | Capital : | | Plant and Machinery | 1,50,000 | | Leena 1,60,000 | | | | | Rohit 1,40,000 | 3,00,000 | | | | | 4,68,000 | | 4,68,000 | On the above date Manoj was admitted as a new partner for 1/5th share in the profits of the firm on the following terms : (i) Manoj brought proportionate capital. He also brought his share of goodwill premium of ₹ 80,000 in cash. (ii) 10% of the general reserve was to be transferred to provision for doubtful debts. (iii) Claim on account of workmen's compensation amounted to ₹ 40,000. (iv) Stock was overvalued by ₹ 16,000. (v) Leena, Rohit and Manoj will share future profits in the ratio of 5 : 3 : 2. Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm.