CBSE Class 12 Accountancy 2020 — Set 67/2/1

At the time of admission of a new partner in the firm, the new partner compensates the old partners for their loss of share in the super-profits of the firm for which he brings in an additional amount which is known as _____ .

Pragya Ltd. forfeited 8,000 equity shares of ₹ 100 each issued at a premium of 10% for non-payment of first and final call of ₹ 30 per share. The maximum amount of discount at which these shares can be reissued will be : (A) ₹ 80,000 (B) ₹ 3,20,000 (C) ₹ 5,60,000 (D) ₹ 2,40,000

What is meant by ‘Issue of Debentures as a Collateral Security’ ?

‘Interest paid on debentures is a charge against the profits of the company.’ Is this statement correct ? Give reason in support of your answer.

The directors of Axim Ltd. forfeited 20,000 equity shares of ₹ 10 each, ₹ 8 per share called up for non-payment of first call of ₹ 2 per share. Final call of ₹ 2 per share has not been yet called. Half of the forfeited shares were reissued as fully paid up for ₹ 15 per share. The amount transferred to Capital Reserve will be : (A) ₹ 2,00,000 (B) ₹ 1,20,000 (C) ₹ 60,000 (D) ₹ 40,000

An investment normally qualifies as a cash equivalent only when it has a maturity of ____ months or less from the date of acquisition.

X Ltd. purchased furniture for ₹ 20,00,000 paying 60% by issue of equity shares of ₹ 10 each and the balance by a cheque. This transaction will result in : (A) Cash used in investing activities ₹ 20,00,000. (B) Cash generated from financing activities ₹ 12,00,000. (C) Increase in cash and cash equivalents ₹ 8,00,000. (D) Cash used in investing activities ₹ 8,00,000.

Which of the following is not a limitation of ‘Financial Statements Analysis’ ? (A) It is affected by personal bias. (B) Inter-firm comparative study possible. (C) Lack of qualitative analysis. (D) Ignores price level changes.

State the objective of preparing ‘Cash Flow Statement’.

Under which of the following head/subhead is ‘Forfeited Shares’ presented in the Balance Sheet of a company ? (A) Reserves and Surplus (B) Share Capital (C) Other Long-term Liabilities (D) Other Current Liabilities

Which of the following is not a subhead under the Current Assets ? (A) Cash and Cash Equivalents (B) Trademarks (C) Short-term Loans and Advances (D) Inventories

What will be the effect of purchase of goods for cash ₹ 3,000 on Gross Profit Ratio ?

From the following information obtained from the books of P. Ltd., calculate, (i) Return on Investment, and (ii) Debt-Equity Ratio : Information : Net Profit after interest and tax ₹ 6,00,000; 6% Debentures ₹ 10,00,000; Capital employed ₹ 20,00,000, and Tax rate 40%. OR (i) Current Liabilities ₹ 1,50,000, Current Assets ₹ 2,80,000, Inventories ₹ 40,000, Advance Tax ₹ 30,000, and Prepaid Rent ₹ 10,000. Calculate Quick Ratio. (ii) Average Inventory ₹ 60,000, Revenue from Operations ₹ 6,00,000, the rate of Gross Loss on Sales is 10%. Calculate the Inventory Turnover Ratio.

Yash and Karan were partners in an interior designer firm. Their fixed capitals were ₹ 6,00,000 and ₹ 4,00,000 respectively. There were credit balances in their current accounts of ₹ 4,00,000 and ₹ 5,00,000 respectively. The firm had a balance of ₹ 1,00,000 in General Reserve. The firm did not have any liability. They admitted Radhika into partnership for 1/4th share in the profits of the firm. The average profits of the firm for the last five years were ₹ 5,00,000. Calculate the value of goodwill of the firm by capitalization of average profits method. The normal rate of return in the business is 10%. OR Samiksha, Ash and Divya were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. With effect from 1st April, 2019, they agreed to share future profits and losses in the ratio of 2 : 5 : 3. Their Balance Sheet showed a debit balance of ₹ 50,000 in the Profit and Loss Account and a balance of ₹ 40,000 in the Investment Fluctuation Fund. For this purpose, it was agreed that : (i) Goodwill of the firm be valued at ₹ 3,00,000. (ii) Investments of book value of ₹ 5,00,000 be valued at ₹ 4,80,000. Pass the necessary journal entries to record the above transactions in the books of the firm.

The capital accounts of Alka and Archana showed credit balances of ₹ 4,00,000 and ₹ 3,00,000 respectively, after taking into account drawings and net profit of ₹ 2,00,000. The drawings of the partners during the year 2018 – 19 were : (i) Alka withdrew ₹ 10,000 at the end of each quarter. (ii) Archana’s drawings were : | ₹ 31st May, 2018 | 8,000 1st November, 2018 | 7,000 1st February, 2019 | 5,000 Calculate interest on partners’ capitals @ 10% p.a. and interest on partners’ drawings @ 6% p.a. for the year ended 31st March, 2019.

Naveen, Kavita and Vishesh were partners in a firm sharing profits and losses in the ratio of 5 : 4 : 1. Their Balance Sheet as at 31st March, 2019 was as follows : Balance Sheet of Naveen, Kavita and Vishesh as at 31st March, 2019 | Liabilities | Amount ₹ | Assets | Amount ₹ | | --- | --- | --- | --- | | Capitals : | | Plant and Machinery | 5,50,000 | | Naveen 3,00,000 | | Stock | 1,20,000 | | Kavita 2,00,000 | | Debtors | 1,30,000 | | Vishesh 1,00,000 | 6,00,000 | Cash | 40,000 | | Profits for the year 2018 – 19 | 1,50,000 | Advertisement Expenditure | 20,000 | | Sundry Creditors | 1,10,000 | | | | | 8,60,000 | | 8,60,000 | Naveen died on 30th June, 2019. According to the partnership deed, in addition to the deceased partner’s capital, the executors are entitled to (i) His share in profits on the basis of average profits of the last two years. The profit for the year 2017 – 18 was ₹ 50,000. (ii) His share in the goodwill of the firm. Goodwill was to be calculated on the basis of two years’ purchase of the average profits of the last two years. Naveen withdrew ₹ 60,000 on 1st June, 2019. Prepare Naveen’s Capital Account which is to be rendered to his executor.

Simar, Raja and Rita were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. The firm was dissolved on 31st March, 2019. After the transfer of assets (other than cash) and external liabilities to the Realization Account, the following transactions took place : (i) A debtor whose debt of ₹ 90,000 had been written off as bad, paid ₹ 88,000 in full settlement. (ii) Creditors to whom ₹ 1,21,000 were due to be paid, accepted stock at ₹ 71,000 and the balance was paid to them by a cheque. (iii) Raja had given a loan to the firm of ₹ 18,000. He was paid ₹ 17,000 in full settlement of his loan. (iv) Investments were ₹ 53,000 out of which investments worth ₹ 43,000 were taken over by Simar at ₹ 52,000 and the balance of the investments were sold for ₹ 12,000. (v) Expenses on dissolution amounted to ₹ 19,000 and the same were paid by the firm. (vi) Profit on dissolution amounted to ₹ 30,000. Pass the necessary journal entries for the above transactions in the books of the firm.

(i) Kati Ltd. issued 8,000, 9% debentures of ₹ 100 each at a discount of 10%. The full amount was payable on application. Applications were received for 9,000 debentures and allotment was made on pro-rata basis. Pass the necessary journal entries for the above transactions in the books of Kati Ltd. (ii) Pivot Ltd. issued 40,000, 11% debentures of ₹ 100 each on 1st April, 2015. Half of the debentures were due for redemption on 31st March, 2019. The company decided to transfer the minimum required amount to Debenture Redemption Reserve on 31st March, 2018 and invested the necessary amount in Debenture Redemption Investments on 30th April, 2018. Pass the necessary journal entries for Redemption of Debentures. OR (i) Rama Ltd. took over the following assets and liabilities of Krishna Ltd. on 1st April, 2019 : | ₹ Land and Building | 50,00,000 Furniture | 10,00,000 Stock | 5,00,000 Creditors | 7,00,000 The purchase consideration of ₹ 60,00,000 was paid by issuing 12% debentures of ₹ 100 each at a premium of 20%. Pass the necessary journal entries for the above in the books of Rama Ltd. (ii) On 1st April, 2018, Sakshi Ltd. issued 1,000, 11% Debentures of ₹ 100 each at a discount of 6%, redeemable at a premium of 5% after three years. Pass the necessary journal entries for the issue of debentures in the books of Sakshi Ltd. (iii) On 1st April, 2016, Canara Bank issued 5,000, 9% debentures of ₹ 100 each at a premium of 6%, redeemable on 31st March, 2019, at a premium of 10%. The issue was fully subscribed. Pass the necessary journal entries for redemption of debentures in the books of Canara Bank.

Cash flow from the operating activities of Pinnacle Ltd. for the year ended 31st March, 2019 was ₹ 28,000. The Balance Sheet along with notes to accounts of Pinnacle Ltd. as at 31st March, 2019 is given below : Pinnacle Ltd. Balance Sheet as at 31st March, 2019 | Particulars | Note No. | 31.3.2019 ₹ | 31.3.2018 ₹ | | --- | --- | --- | --- | | I – Equity and Liabilities : | | | | | 1. Shareholders Funds : | | | | | (a) Share Capital | | 9,00,000 | 5,00,000 | | (b) Reserves and Surplus | 1 | 90,000 | 1,10,000 | | 2. Non-Current Liabilities : | | | | | Long-term Borrowings | 2 | 3,00,000 | 2,00,000 | | 3. Current Liabilities : | | | | | Trade Payables | | 60,000 | 80,000 | | Total | | 13,50,000 | 8,90,000 | | II – Assets : | | | | | 1. Non-Current Assets : | | | | | Fixed Assets : | | | | | (i) Tangible Assets | 3 | 7,46,000 | 5,24,000 | | (ii) Intangible Assets | 4 | 36,000 | 76,000 | | 2. Current Assets : | | | | | (a) Current Investments | | 1,30,000 | 20,000 | | (b) Inventories | | 2,00,000 | 1,30,000 | | (c) Cash and Cash Equivalents | | 2,38,000 | 1,40,000 | | Total | | 13,50,000 | 8,90,000 | Notes to Accounts : | Note No. | Particulars | 31.3.2019 ₹ | 31.3.2018 ₹ | | --- | --- | --- | --- | | 1. | Reserves and Surplus : (Balance in Statement of Profit and Loss) | 90,000 | 1,10,000 | | 2. | Long-term Borrowings : 9% Debentures | 3,00,000 | 2,00,000 | | 3. | Tangible Assets : Plant and Machinery | 8,86,000 | 6,04,000 | | | Accumulated Depreciation | (1,40,000) | (80,000) | | | | 7,46,000 | 5,24,000 | | 4. | Intangible Assets : Goodwill | 36,000 | 76,000 | You are given the following additional information : (i) A machinery of the book value of ₹ 90,000 (depreciation provided thereon was ₹ 23,000), was sold at a profit of ₹ 12,000. (ii) 9% debentures were issued on 1st April, 2018. Prepare the Cash Flow Statement.

V.D. Ltd. invited applications for issuing 2,00,000 equity shares of ₹ 10 each at a premium of ₹ 6 per share. The amount per share was payable as follows : On application | ₹ 3 (including premium ₹ 1) On allotment | ₹ 7 (including premium ₹ 5) On first and final call | Balance amount Applications were received for 2,50,000 shares. Applicants for 10,000 shares were sent letters of regret and application money returned to them. Shares were allotted to the remaining applicants on a pro-rata basis. Money overpaid on application was adjusted towards the sums due on allotment. The company received all the money due on allotment except from Agam, who was allotted 1,000 shares. Her shares were forfeited immediately after allotment. Afterwards, the first and final call was made. Seema, the holder of 2,000 shares, did not pay the first and final call on her shares. Her shares were also forfeited. 50% of the forfeited shares, each of Agam and Seema, were reissued as fully paid-up @ ₹ 16 per share. Pass the necessary journal entries to record the above transactions in the books of V.D. Ltd. OR Konark Ltd. invited applications for issuing 3,00,000 shares of ₹ 10 each. The amount per share was payable as follows : ₹ 3 on application, ₹ 3 on allotment, and ₹ 4 on first and final call. The company received applications for 4,00,000 shares. Allotment was done as follows : (i) Applicants of 2,40,000 shares were allotted 2,00,000 shares. (ii) Applicants of 1,20,000 shares were allotted 80,000 shares. (iii) Remaining applicants were allotted 20,000 shares. Money overpaid on applications was adjusted towards sums due on allotment. Divij, a shareholder, belonging to group (ii), who had applied for 6,000 shares, failed to pay allotment and call money. Faisal, another shareholder, who was allotted 10,000 shares, paid the call money along with allotment. Faisal belonged to group (i). Divij’s shares were forfeited after the first and final call. Half of the forfeited shares were reissued @ ₹ 10 per share fully paid. Pass the necessary journal entries to record the above transactions in the books of the company.

Madhuri and Arsh were partners in a firm sharing profits and losses in the ratio of 3 : 1. Their Balance Sheet as at 31st March, 2019, was as follows : Balance Sheet of Madhuri and Arsh as at 31st March, 2019 | Liabilities | Amount ₹ | Assets | Amount ₹ | | --- | --- | --- | --- | | Capitals : | | Machinery | 4,70,000 | | Madhuri 3,00,000 | | Investments | 1,10,000 | | Arsh 2,00,000 | 5,00,000 | Debtors 1,20,000 | | | Workmen’s Compensation Fund | 60,000 | Less : Provision for doubtful debts 10,000 | 1,10,000 | | Creditors | 1,90,000 | Stock | 1,40,000 | | Employees’ Provident Fund | 1,10,000 | Cash | 30,000 | | | 8,60,000 | | 8,60,000 | On 1st April, 2019, they admitted Jyoti into partnership for 1/4th share in the profits of the firm. Jyoti brought proportionate capital and ₹ 40,000 as her share of goodwill premium. The following terms were agreed upon : (i) Provision for doubtful debts was to be maintained at 10% on debtors. (ii) Stock was undervalued by ₹ 10,000. (iii) An old customer whose account was written off as bad, paid ₹ 15,000. (iv) 20% of the investments were taken over by Arsh at book value. (v) Claim on account of workmen’s compensation amounted to ₹ 70,000. (vi) Creditors included a sum of ₹ 27,000 which was not likely to be claimed. Prepare Revaluation Account, Partners’ Capital Accounts, and the Balance Sheet of the reconstituted firm. OR Anita, Gaurav and Sonu were partners in a firm sharing profits and losses in proportion to their capitals. Their Balance Sheet as at 31st March, 2019 was as follows : Balance Sheet of Anita, Gaurav and Sonu as at 31st March, 2019 | Liabilities | Amount ₹ | Assets | Amount ₹ | | --- | --- | --- | --- | | Capitals : | | Land and Building | 5,00,000 | | Anita 2,00,000 | | Investments | 1,20,000 | | Gaurav 2,00,000 | | Debtors 1,50,000 | | | Sonu 1,00,000 | 5,00,000 | Less : Provision for doubtful debts 10,000 | 1,40,000 | | Investment Fluctuation Fund | 40,000 | Stock | 1,00,000 | | General Reserve | 30,000 | Cash at bank | 1,70,000 | | Creditors | 4,60,000 | | | | | 10,30,000 | | 10,30,000 | On the above date, Anita retired from the firm and the remaining partners decided to carry on the business. It was agreed to revalue the assets and reassess the liabilities as follows : (i) Goodwill of the firm was valued at ₹ 3,00,000 and Anita’s share of goodwill was adjusted in the capital accounts of the remaining partners, Gaurav and Sonu. (ii) Land and Building was to be brought up to 120% of its book value. (iii) Bad debts amounted to ₹ 20,000. A provision for doubtful debts was to be maintained at 10% on debtors. (iv) Market value of investments was ₹ 1,10,000. (v) ₹ 1,00,000 was paid immediately by cheque to Anita out of the amount due and the balance was to be transferred to her loan account which was to be paid in two equal annual instalments along with interest @ 10% p.a. Prepare the Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the reconstituted firm on Anita’s retirement.