RKG INSTITUTE by CA PARAG GUPTA

B - 193, Sector - 52, Noida

MOCK PAPER 2
Class 12 - Accountancy
Time Allowed: 3 hours
Maximum Marks: 80

General Instructions:

1. This question paper contains 34 questions. All questions are compulsory.

2. This question paper is divided into two parts, Part A and B.

3. Part - A is compulsory for all candidates.

4. Part - B has two options i.e. (i) Analysis of Financial Statements and (ii) Computerised Accounting. Students

must attempt only one of the given options.

5. Question 1 to 16 and 27 to 30 carries 1 mark each.

6. Questions 17 to 20, 31and 32 carries 3 marks each.

7. Questions from 21 ,22 and 33 carries 4 marks each

8. Questions from 23 to 26 and 34 carries 6 marks each

9. There is no overall choice. However, an internal choice has been provided in 7 questions of one mark, 2 questions

of three marks, 1 question of four marks and 2 questions of six marks.

Part A:- Accounting for Partnership Firms and Companies

1. A, B and C are partners sharing profits and losses in the ratio of 2:2:1 respectively. A is entitled to a commission [1]
of 10% on net profit before charging such commission. Net profit before charging commission is Rs.1,20,000.
Find out commission payable to A.

a) ₹1,200 b) ₹12,200

c) ₹20,000 d) ₹12,000
2. Assertion (A): At the time of admission of a new partner he is required to bring premium or goodwill.
[1]
Reason (R): Due to the admission of a new partner, the existing partner's sacrifices their share of profits in
favour of the new partner. So, he has to compensate the existing partners for the loss of their share in super-
profits of the firm.

a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.

c) A is true but R is false. d) A is false but R is true.

3. A firm earns ₹ 1,10,000.The normal rate of return is 10%. The assets of the firm were ₹ 11,00,000 and liabilities [1]
₹ 1,00,000. Value of goodwill by the capitalisation of average profit will be

a) ₹ 5,000 b) ₹ 10,000

c) ₹ 2,00,000 d) ₹ 1,00,000

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 OR
According to AS 26, which goodwill is recorded in the books :

a) both (i) and (ii) b) None of the above

c) purchased goodwill d) self generated goodwill

4. Reissue of forfeited shares can be done at ________. [1]

a) Par and premium only b) Only at par

c) Par and discount only d) Par, premium or discount

OR
Which of the following is not true about a company?

a) Company is a Natural Person b) Company has a common seal

c) Company has a separate entity d) Company is an Artificial Person

5. Interest on debentures will be paid to debenture holders ________. [1]

a) When there is capital reserve b) When a company is maintaining Reserve

c) When there is profit d) Whether there is profit or loss

6. Choose the current order of priority in settlement of liabilities and capital upon dissolution from items given [1]
below:
A. An expense incurred on the realization of assets such as commission, cartage, brokerage etc.
B. All outside creditors
C. Balances in Capital Accounts of partners
D. Partner’s Loan accounts
Correct sequence is

a) A, B, D, C b) A, C, B, D

c) A, C, D, B d) A, B, C, D
OR
Amount received from sale of unrecorded asset at the time of dissolution of the firm is credited to:

a) Partners' Capital Accounts b) Realisation Account

c) Cash Account d) Profit and Loss Account

7. Pragya Ltd. forfeited 8,000 equity shares of ₹100 each issued at a premium of 10% for non-payment of first and [1]
final call of ₹30 per share. The maximum amount of discount at which these shares can be reissued will be:

a) ₹2,40,000 b) ₹3,20,000

c) ₹5,60,000 d) ₹80,000
8. Sushma Limited issued 1,000, 13% debentures of Rs.100 each at a premium of 10%. Applications were received [1]
for 900 debentures only. All applications were accepted and debentures were allotted. What amount is to be
credited to the Securities Premium Account?

a) 1,000 b) 10,000

c) 900 d) 9,000
OR

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 Debentures are generally secured by ________.

a) Bank Overdraft b) A charge on liabilities

c) Bank Loan d) A charge on asset

Question No. 9 to 10 are based on the given text. Read the text carefully and answer the questions:
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A, B and C are partners sharing profit and losses in the ratio 3:2:1. From 1st April 2018, A, B and C decided to share
profit and losses equally. This may result in the gain to a few partners and loss to other.

9. From 1st April 2018, A, B and C decided to share profit and losses equally. It is a:

a) None of these b) Reconstitution of the firm

c) Dissolution of the firm d) Revaluation of the firm

10. As there is a change in profit sharing ratio. Which of the following is calculated?

a) Both sacrificing ratio and gaining ratio b) None of these

c) Sacrificing ratio d) Gaining ratio

11. On the issue of debentures as collateral security, which account is credited? [1]

a) Debenture Holdings Account b) Debentures Account

c) Debenture Suspense Account d) Bank Loan Account

12. Kamal and Rahul are the partner’s in a firm sharing profits and losses in the ratio of 7:3. They admit Kaushal as [1]
a partner for 1

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share. Kaushal acquires his share from Kamal and Rahul in the ratio of 3:2. The goodwill of the
firm has been valued at Rs.25000. Kaushal paid Rs.10000 privately to Kamal and Rahul as his share of
goodwill. What should be the journal entry?

a) No entry will be passed b) Rahul A/c ... Dr.

Kamal A/c ... Dr.

To Kaushal A/c

c) Kamal A/c ... Dr.

d) Rahul A/c ... Dr.

Cash A/c ... Dr.

Loan A/c ... Dr.

To Goodwill A/c To Cash A/c

13. A firm earns Rs. 65,000 as its average profits. The usual rate of earning is 10%. The total assets of the firm [1]
amounted to Rs. 6,80,000 and liabilities are Rs.1,80,000. Calculate the value of goodwill.

a) Rs.120000 b) Rs.110000

c) Rs.100000 d) Rs.1,50,000
14. A, B and C are partners sharing profits equally. A and B has given a minimum guarantee of Rs. 8,000 to the C. [1]
How much amount of profit C will get when the profit of the firm is Rs.30,000.

a) 22,000 b) 10,000

c) 30,000 d) 8,000
15. L, M and N are partners sharing profit and losses in the ratio of 25:15:9. L retires. It is decided that the profit- [1]
sharing ratio between remaining partner will be the same as existing between M and N after the retirement of L.
Calculate Gaining ratio.

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 a) 75:40 b) 80:45

c) 75:45 d) 75:55
OR
What journal entry required to pass to transfer the due amount to the loan account of retiring partner?

a) Partner executor A/c ... Dr.

b) Gainer partners A/c ... Dr.

To Retiring partner’s loan A/c To Retiring partner’s loan A/c

c) Retiring Partner’s capital A/c ... Dr.

d) Retiring Partner’s capital A/c ... Dr.

To Retiring partner’s loan A/c To Bank A/c

16. Hem and Nem are partners in a firm sharing profits in the ratio of 3:2. Their capitals were ₹80,000 and ₹50,000 [1]
respectively. They admitted Sam on Jan. 1, 2007 as a new partner for 1

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share in the future profits. Sam brought
₹60,000 as his capital. With what amount Nem’s capital account will be credited?

a) 13,200 b) 22,000

c) 8,800 d) 66,000
17. X, Y and Z were partners sharing profits and losses in the ratio of 4 : 3 : 2 respectively. Y retired on 1st April, [3]
2019. On that date capitals of X, Y and Z after all adjustments stood at ₹ 19,650; ₹ 19,800 and ₹ 9,150
respectively. Total capital of the firm as newly constituted is fixed at ₹ 28,000 between X and Z in the
proportion of 5/8th and 3/8th after passing entries in their accounts for adjustments. Calculate amount to be paid
or to be brought by the continuing partners and pass necessary Journal entries.
18. The books of Ram and Bharat showed that the capital employed on 31.12.2016 was ₹ 5,00,000 and the profits [3]
for the last 5 years : 2015 ₹ 40,000; 2014 ₹ 50,000; 2013 ₹ 55,000; 2012 ₹ 70,000 and 2011 ₹ 85,000.
Calculate the value of goodwill on the basis of 3 years purchase of the average super profits of the last 5 years
assuming that the normal rate of return is 10%?
19. On 1-1-2017, Fast Computers Ltd. issued 20,00,000, 6% debentures of ₹100 each at a discount of 4% [3]
redeemable at a premium of 5% after three years. The amount was payable as follows:

On application ₹50 per debenture.

Balance on allotment.

Record the necessary journal entries for issue of debentures.

20. On what occasions does the need for valuation of goodwill arise? [3]
21. Give necessary journal entries: [4]
i. The Directors of Devendra Ltd. resolved on 1st January, 2010 that Equity Shares of ₹ 10 each, ₹ 8 paid-up
be forfeited for non-payment of final call of ₹ 2. On 1st February, 60 of these shares were reissued @ ₹ 7 per
share as fully paid-up.
ii. Virender Limited forfeited 20 shares of ₹ 100 each(₹ 60 called-up) issued at par to Mukesh on which he had
paid ₹ 20 per share. Out of these, 15 shares were reissued to Sanjeev as ₹ 60 paid-up for ₹ 45 per share.
22. Record necessary journal entries to realize the following unrecorded assets and liabilities in the books of Paras [4]
and Priya:
i. There was old furniture in the firm which had been written off completely in the books. This was sold for ₹
3,000,
ii. Ashish, an old customer whose account for ₹ 1,000 was written-off as bad in the previous year, paid 60%, of
the amount,

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 iii. Paras agreed to take over the firm’s goodwill (not recorded in the books of the firm), at a valuation of ₹
30,000,
iv. There was an old typewriter that had been written off completely from the books. It was estimated to realize
₹ 400. It was taken away by Priya at an estimated price less 25%,
v. There were 100 shares of ₹ 10 each in Star Limited acquired at a cost of ₹ 2,000 which had been written off
completely from the books. These shares are valued @ ₹ 6 each and divided among the partners in their
profit sharing ratio.
23. On 1st April 2019, Sangita Ltd. issued 30,000 Equity Shares of ₹ 10 each at a premium of ₹ 4 per share, [6]
payable as follows:

₹ 6 on application (including ₹ 1 premium),

₹ 2 on the allotment (including ₹ 1 premium),

₹ 3 on the first call (including ₹ 1 premium ), and

₹ 3 on second and final call (including ₹ 1 premium).

Applications were received for 45,000 shares, of which applications for 9,000 shares were rejected and their
money was refunded. The rest of the applicants were issued shares on pro-rata basis and their excess money was
adjusted towards allotment.

Hari, to whom 600 shares were allotted, failed to pay the allotment money and his shares were forfeited after
allotment. Mohan, who applied for 1,080 shares failed to pay the two calls and on his such failure, his shares
were forfeited.

1,200 forfeited shares were reissued as fully paid-up on receipt of ₹ 9 per share, the whole of Mohan's shares
being included.

Prepare Cash Book and Pass necessary Journal entries. Also, show share capital in the Balance Sheet of the
company.
24. X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2. Their position as at 31st March 2019 [6]
was as follows:

Liabilities ₹ Assets ₹

Sundry Creditors 44,000 Cash in hand 8,000

Outstanding Expenses 10,000 Cash at Bank 22,000

Capitals: Debtors 56,000

X 2,80,000 Less: Provision 6,000 50,000

Y 2,80,000 Stock 2,80,000

Z 1,00,000 6,60,000 Machinery 1,54,000

Building 2,00,000

7,14,000 7,14,000

It was decided that with effect from 1st April 2019, profit and loss sharing ratio will be 3 : 3 : 1. They agreed on
the following terms:
i. Goodwill of the firm be valued at two year’s purchase of the average super profits of last three years.
Average profits of the last three years are ₹ 1,08,000, while the normal profits may be taken at ₹ 66,000.
ii. Provision on debtors be reduced by ₹ 2,000.

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 iii. Value of stock be increased by 10% and machinery be valued at ₹ 1,00,000.
iv. An item of ₹ 3,000 included in sundry creditors is not likely to be claimed.
Partners do not want to record the altered values of assets and liabilities in the books. Pass an entry to give effect
to the above and prepare the revised balance sheet.
25. Arti, Bharti, and Seema are partners sharing profits in the proportion of 3:2:1 and their Balance Sheet as on [6]
March 31, 2016, stood as follows:

In The Books of Arti, Bharti, and Seema

Balance Sheet

as on March 31, 2016

Liabilities Amount ₹ Assets Amount ₹

Bills Payable 12,000 Buildings 21,000

Creditors 14,000 Cash in Hand 12,000

General Reserve 12,000 Bank 13,700

Capitals: Debtors 12,000

Arti 20,000 Bills Receivable 4,300

Bharti 12,000 Stock 1,750

Seema 8,000 40,000 Investment 13,250

78,000 78,000

Bharti died on June 12, 2016, and according to the deed of the said partnership, her executors are entitled to be
paid as under:
a. The capital to her credit at the time of her death and interest thereon @ 10% per annum.
b. Her proportionate share of reserve fund.
c. Her share of profits for the intervening period will be based on the sales during that period, which were
calculated as ₹ 1,00,000. The rate of profit during past three years had been 10% on sales.
d. Goodwill according to her share of profit to be calculated by taking twice the amount of the average profit of
the last three years less 20%. The profits of the previous years were:

2013 – ₹ 8,200
2014 – ₹ 9,000
2015 – ₹ 9,800
The investments were sold for ₹ 16,200 and her executors were paid out. Pass the necessary journal entries
and write the account of the executors of Bharti.
26. Hyatt Ltd. took loan of ₹8,00,000 from State Bank of India and issued 10,000; 9% Debentures of ₹100 each as [6]
collateral security. How will issue of debentures be shown in the Balance Sheet:
i. When Journal entry is not passed; and
ii. When Journal entry is passed?
Part B :- Analysis of Financial Statements
27. Following are the unamortized expenses except ________. [1]

a) Issue of share capital b) Loss on issue of debentures

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 c) Share issue expenses d) Discount on issue of debentures
OR
Dividend Received is considered as operating activity when ________.

a) Received by a manufacturing company b) Received by a Trading Company

c) Received by any company d) Received by a finance company

28. Following are the limitations of financial analysis except [1]

a) To make comparative study within the firm b) Single years' Analysis of financial statement
and with other firms have limited use.

c) Affected by the personal ability and bias of d) Don't reflect changes in price level.
the Analyst
29. The objectives of Cash Flow Statement are [1]
A. Analysis of cash position
B. Short-term cash planning
C. Evaluation of liquidity
D. Comparison of Operating Performance

a) A, B, C, D b) Both A and C

c) Both A and B d) Both B and D

OR
Which of the following is concerned with financing activities?

a) Income tax paid b) Interest paid on long term loans

c) Rent Received d) Sale of investment

30. Study of relationship between various items is known [1]

a) Trend Analysis b) Comparative statements

c) Common Size statements d) Ratio Analysis

31. What are the major heads in the Equity and Liabilities part of the Balance Sheet as per Schedule III? [3]
32. Calculate Debt Equity Ratio from the following:
[3]
Total Assets ₹2,30,000; Total Debt ₹1,50,000; Current Liabilities ₹30,000.
33. Cash Revenue from Operations ₹1,00,000; Credit Revenue from Operations ₹3,00,000; Gross Profit 30% on [4]
Revenue from Operations; Inventory Turnover Ratio = 2 Times.

Calculate Opening Inventory and Closing Inventory in each of the following cases:

Case 1: If Opening Inventory is rd of the inventory at the end.

Case 2: If Closing Inventory is 25% less than the inventory in the beginning.

Case 3: If Opening Inventory is 75% of Closing Inventory and Closing Inventory is 30% of Revenue from
Operations.
OR
Explain the usefulness of trend percentages in interpretation of financial performance of a company.
34. From the following particulars, calculate Cash from Investing Activities: [6]

Particulars Opening Balances Closing Balances

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Plant & Machinery (at cost) 3,00,000 3,20,000

Accumulated Depreciation 90,000 1,00,000

Patents 2,60,000 1,40,000

Goodwill 80,000 1,00,000

Additional Information:
During the year:
i. Depreciation charged on Plant and Machinery ₹ 36,000.
ii. A machine having a book value of ₹ 20,000 was sold for ₹ 16,000.
iii. Patents having a book value of ₹ 80,000 was sold for ₹ 1,10,000.

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