Board Examination Paper, 2023 (Solved)

(Modified as per latest specifications issued by JKBOSE 2023-24)

XIIARJKUT239128-X
ACCOUNTANCY
Time : 3:00 Hours Maximum Marks:80
PART - A(Accounting for Partnership Firms and Companies)
SECTION -A
Very Short Answer Type Questions) 1Each
01. What will be profit sharing ratio of partners if there is no
partnership deed?
Ans.The profit will be shared equally if there is no deed.
02.A firm earned a profit of ? 40,000. Normal rate of return is
15%. Calculate super profit, if capital of the firm? 2,00,000.
Ans. 10,000
Q.3. Realisation A/c is ...
(a) Real ale (b) Nominal A/c
Ans. It is said that Realisation A/cis a nominal alc because it is used
to find out Profit/Loss at the time of Dissolution of Partnership.
Q.4.Kunal limited purchased vehicles for9,00,000 from M/s Shiv
Ltd. The payment was made by issues of fully paid shares of
?10 each. State the number of shares issued.
Ans.90,000
Q.5. What is meant by Forfeiture of Shares?
Ans. Forfeiture means cancellation of Shares. When shareholders failed
topay his money due on shares his/her shares may be forfeiture
by given notice in advance.
Q.6. If ashare of nominal value of 100 is issued at95 i.e.
is issued at: share
(a) 5% Discount
Ans. 5% Discount. (b) 5% Premium
Q.7. Give one
example of Investing Activities.
Ans. Interest received
Q.8.
Increase
Ans. Outflow
in
pre-paid expenses is of cash.
(Short Answer Type Question-I)
Q.9. X and Y are partners sharing profits in the ratioof 3:2. The
admitZ into the firm for 3/7th profits which he takes 2/7%
from X and 1/7th from Yand bring 3,000 as his share
goodwill. Give Journal Entries.
Sol.: JOURNAL

Date Partiau lars LF Dr. Cr.

Amt Amt?
Cash A/c... ...Dr. 3,000
To Premium for Goodwill A/C 3,000
(Being goo dwillbring by Z)
Premium for Goodwill Ale Dr. 3,000
To X's Capital A/c(3,000 x 2/3) 2,000
To Y's Capital A/c (3,000 x 1/3) 1,000
(Being the distribution of premium among
sacri fice partners)

Sacrifice ratio of 2:1 is given.

basis o
Q.10. State the amount of goodwillif it is calculated on the
12,500.
2 years purchase of last year's profitwhich wvas
Ans. Goodwill= Super Profit x No of Years Purchase
= 12,500 × 2
=25,000
0.11. Stock with book value of 16,000 was taken over by a partne
a
Aat 12,000. What amount be debited to A'scapital Ale
the time of dissolution and pass journal.
Ans.
LF Dr. Cr.
Date Particulars Amt
Amt
Dr. 12,000
A's Cpital Alc 12,000
ToRealisation Alc
(Being Stock with book value of? 16,000
12,000)
was taken over by a partner Aat
Solved Papers Accountancy
(3)
Q.12.Y Ltd. purchased machinery for 90,000. The amount was
naid by issue of 12% debentures of 100each at a discount
of 10 each. Pass necessary Journal entries.
Sol.: JOURNAL

Date
Particulars LF Dr. Cr.
Amt Amt
Machinery Alc Dr. 90,000
Discount on issues of 12% Debenture A/c (B/F)..........Dr. 10,000
To 12% Debenture A/c(1,000 x 100) 1,00,000
(Being the amount was paid by issue of 12% debentures
of 100 each at a discount of10 each)
Number of 12% Deben tureissued =90,000/90= 1.000

SECTION -C
(Short Answer Type Questions-1I) 4 each
Q.13. A, Band C are partners sharing profits in the ratio of 3:2:1.
B retires selling his share to Aand C for32,000: 20,000
being paid by A and ? 12,000 by C. Pass Journal entries to
record the sale of B' share to A and C.
Sol.: JOURNAL

Date Particulars L.F Dr. Cr.

Amt Amt
A's Capital Ale Dr 20,000
C'sCapital A/c ...Dr 12,000
ToB's Capital A/c u 32,000
(Being B retires selling his share to A
and Cfor ? 32,000; ? 20,000 being
paid by A and? 12,000 by C)

Q.14.A Ltd. was registered with a capital of R25,000

1,000 shares of 25 each payable as 8 on divided into
allotment and 10 on first and final call application, 7 on
not
Applications were received for 800 shares. All moneyyetwasmade.
duly
received Journalise.
Ans.
JOURNAL
(4) Dr.
Aekieoer
LF
Date Particulars Ant
6.400 Amt?
Bank A c(800× S)
To Share Appication AcMonev received
(Being Share Aryplication
on S00shars @ 8cadi ) 6.400
.Dr.
Share Application A 640
To Share Capital Ac
tras fer
(Being Share Aplication oNy
to Share Capital) $.600
Sharr Allotment Ac(800 x R 7).....Dr. $.600
To Shre Capital Ac
(Being Share Allotnent MoeY due on 800
@t7 each)
..Dr. S.600
Bnk Ac.
To Share Allotnent A/c $.600
(Being Share Allotment Money Received
on 800 (aR7 each)
Q.15. Under which major heads and sub-heads the following iter
beplaced in the Balance Sheet of the company as per Schedu
I, PartI of the Companies Act, 2013?
(i) Securities Premium Reserve
(iü) Provident Fund
(iüi)Short term loan and advances
Ans:

S.No Item Sub Head Major Head

(i) Securities Premium Reserve Reserves Shareholder's
and Surplus Fund
(ii) Provident Fund Long Tem Non-Cument
Provision Liabilities
(ii) Short tem loan and advances Current Assets

Q.16.State the meaning and significance of financial Statem

Analysis.
Ans. Financial statement analysis is asystematic
process of stud
the relationship among the various financial factors containe
the financial statements to have a better
understanding
working and the financial position of a business.
Definition:
According to Finney and Miller "Financial Analysis consists
in separating facts according to some definite plan, arranging
them in groups according to certain circumstances and then
presenting them inin a convenient and easily read and
understandable form."
Sionificance of financial statement analysis:
ia)ASsessing the creditability: The business may have to offer credit
to prospective dealers and buyer, therefore, it is essential to
analysis their credit worthiness.
(b) Assessingthe profitability:Analysis of financial statement helps
in getting the view of profitability of business. The profits can be
matched with sales, capital employed, total assets etc.
(c) Inter firm comparison: Analysis helps to gathering information
about the activities of other business thereby: a meaningful
comparison can be made.
(d) Intra firm comparison: Helps in knowing the strength and
weakness at different period of time.
(e) Planning and budgeting: Planning and budgeting are futuristic
activities. Effective planning and budgeting is possible with the
help of analysis of past activities.
Q.31.Calculate the following ratios from the details given below:
(i) Current Ratio (ii) Liquid Ratio
Details:(i) Current Assets =770,000 (ii) Inventory = 10,000
(i) Working Capital =30,000
Ans. Working Capital = Currents Assets - Currents
Liabilities
Current Liabilities = Currents Assets - Working capital.
70,000-30,000| Liquid Assets
= 40.,000 = Current Assets - Inventory
Current Ratio = Current Assets
Current Liabilities =70,000 - 10,000=60,000
70,000 Liguid Assets
40,000 Liquid Ratio = Current Liabilities

= 1.75:1 60,000
1:5:1
40,000
 SECTION -D

(Long Answer Type Questions-) 6 ea

0.18. X. Y and Z were partners in a firm sharing profits and loss
in the ratio of 5:3:2. On 31-1-2003 Y died on that date th
goodwill of the firm wasvalued at 2,40,000 and there was
debit balance of 10,000 in their profit and loss account. Pas
necessary journal entry for the treatment of goodwill and tg
distribute the undivided loss. D
Sol.: JOURNAL

Date Particulars LF Dr. Cr.

Amt Amt?
X's Capital Ac (240,000×15/ 70).....Dr. 51,429
Z's Capital Ac 240,000x6 70)........Dr. 20,57 1
To Y's Capital Ac 72.000
(Beinggoodvill credited to Y by debiting the
gaming parers apital accounts in their gaining
rano of5:2)
X's Capital Ac. ...Dr. 5,000
Y's Capital Ac. .Dr. 3,000
Z'sCarital Alc .Dr. 2,000
To Profit and loss Appropiation Ac 10,000
(Being undivided loss debited to old partners in
oldratio)

Working Notes:
(1)Calculation of Gaining Ratio X
(a) Their new shares 5/7 2/7
(b) Their old shares 5/10 2/10
(c) Difference fa-b} 15/70 6/70
Gaining ratio of Xand Z 15:6
(2) Y'sshare of Goodwill=2/10 x 2,40,000 =72,000
Q.19. What journal entries will be passed for the following
transaction on the dissolution of a firm?
(i) An unrecorded assets realised 1,300
(i) Dissolution expenses amount to 700
(ii)Creditors already transferred to realization account art
discharged by paying ? 27,000
 (iv) Stock worthn1,100 already transferred to realization account
is taken by a partner M.
(v) Profit on realization amounting to 6,600 is to be distributed
between the partner Mand Nin the ratio of 7:5.

Sol.: JOURNAL

Date Particulars LF Dr. Cr.

Amt Amt
Bank A/c. ...Dr. 1,300
ToRealisation A/c 1300
Being an unrecorded ass ets realised at the time of
dissolution)
(11) Realisation Alc .Dr. 700
ToBank Alc 700
(Being Diss oBution expenses at the time ofdissolution)
(i11) Realisation Alc ...Dr. 27,000
ToBank Alc 27,000
(Being Creditors already trans ferred to realization
account are discharged at the time of dissolution)
(iv) M Capital Alc .Dr. 1100
To Realisation A/c 1100
(Being Stock already transferred to realization account
is taken by a partner M)
V) MCapital Alc ....Dr. 3,850
N' Cap ital Alc ...Dr. 2,750
To Realisaion A/c 6.600
(Being Profit on real ization is to be distributed bet ween
the partner M andN in the ratio of 7:5)

Q.20. What is the difference between Redemption of Debenture out

of Profits and out of Capital?
Ans. Redemption of Debentures Out of Capital: When debentures
are redeemed out of capital and no profits are utilised for
redemption, then such redemption is termed as redemption out
of capital. In such a situation, no profits are transferred to the
Debenture Redemption Reserve (DRR).
As per the guideline laid down by Securities and Exchange Board
of India (SEBI) and the Section 117C of Company Act of 1956,
the creation of DRR is mandatory (DRR). Therefore, it is not
possible toredeem debentures purely out of capital, as it reduces
the value of assets. The following companies are exempted trom
the creation of DRR.
(8)
1. Infrastructure companies (i.e. those companies that
Aehiever uceE
in the business of developing, maintaining and are engaged
infrastructure facilities)
2. A Company that issues debentures with a maturity up to 1
operating
Redemption of Debenture Out of Profits: When 18 months
are redeemed out of profit then no capital is utilised e
redemption. Before redeeming the debentures debentures
transferred to DRR from Profit and Loss Appropriationprofits
Accou
are
The creation of DRR is mandatory as per the
by Securities and Exchange Board of India guidelines laid do
(SEBI), sEn
mandates transferring amount equal to 50% of
to DRR before redeeming debentures. In this debentures issued
are transferred to the DRR Account, thereby method, astheprofitotits
reducing
amount of profits, therefore this method is termed as
of Debentures out of Profits. In this Redemption
method, first of all ths
required profits are transferred from Statement of Profit and I o
to the DRR Account. The working of
which is
to Accounts of Reserves and Surplus (as shown in the Notes
prescribed in Revised
Schedule V). The final balance (after considering
as the sub-head 'Reserves and DRR) is showm
Surplus' under the
Shareholders' Funds on the Equity and Liabilitiesmain head of
side of the
Company's Balance Sheet. Lastly, when all the debentures are
redeemed, then DRR account is closed by transferring its amount
to the General Reserve.
0.21. What is Cash Flow Statement? What are the
preparing cash flow Statement?
objectives of
Ans. "Changes in the position of cash from one period to another
called cash flow", It is a statement that shows flow are
(Inflow or
outflow) of cash and cash equivalents during a given period of
time. Thus, it is a statement that sunmmarises the causes of
changes
in thecash position of a business enterprise between dates of two
balance sheets.
According to Institute of Cost and Works Accountants of India,
"Cash flow statement is a statement setting out the flow of cash
under distinct heads of sources of funds and their utilization to
determine the requirement of cash during the given period and to
prepare for its adequate provision"
 As pe
(Revised)
the
the flow of cash & cash cquivalent arises changes resulting in
on account of
types of activities i.e. a)Cash flow from three
Operating
Cash flow from Investing Activities,. c) Cash flow Activities, b)
Activities. from Financing
Objectives of Cash Flow Statement:
ain how
(a) To ascertain how much cash or cash
equivalents have been
generated or used in different activities i.e.,
financing activity. operating/investing
(b) To ascertain the net changes in cash and cash equivalents.
(e)To assess the causes of difference between actual cash &
cash
equivalent and related net carnings/income.
(d)To help in formulation of financial policies such as
dividend
policy, fixed assets policy, capital structurerelated policy.
(e)To help in short-term financial planning.
() To ascertain the liquidity of enterprises.
(g) Toassess the true position of cash in futures.
(h) To helps management to prepare cash budget.
(i) To facilities formulation of financial policies such as divided
policy etc.
() To assess whether enterprise would be able to meet its current
obligations or not.
SECTION -E
(Long Answer Type Questions-II) 8each
Q.22. Mohisna and Shriya were partners sharing profits in the ratio
of 3:2. Their balance sheet on 31st March, 2007 was as follows:
Balance Sheet as at 31-3-2007
Liabilities Assets
Sundry Creditors 15,000 Cash 6,250
General Reserves 5,000 Debtors 10,250
Mohisna"s Capital 20,000 Stock 3,500
Shriya'sCapital 20,000 Machinery 18,800
Patents 9,000
Goodwill 12,200
60.000
60,.0.00
(10) Aehieve tuet
On the above date they agreed to take Sanah into
on the following terms: partnership
(i) That she pays 10,000 as her capital for 1/5th share in the
future profits.
(ii) The creditorsare revalued at 10,000
(ii) The assets are revalued as under: Machinery ?20,000, Stoct
3,000 Debtors 9,000
(iv) Her share of goodwill is 5,000 but she could not bring her
goodwillin cash. It was decided not to show goodwillin the
books.
Prepare Revaluation A/c, Partners Capital A/e.
Sol.: Dr REVALUATIONACCOUNT Cr.
Particu lars Particulars
To Stock Alc 500
To Debtors
By Creditors A/c 5,000
1250 By Machinery Alc 1,200
To Profit on Revaluation trans ferred to
Mohisna's Capital A/c 4,450 x 3/5 2.670
Shriya's Capital Alc 4450 x 2/5 1,780
6,200 6,200
Dr. PARTNERS CAPITAL A/C
Particular Cr.
Mahisna Shriya Sanah Particular Mohisna ShriyaSanah
To Goodwill 7320 4880 By Balanoe b/d 20.000 20,000
Ac
By Revalation Alc 2,670 1,780
Taal Balane 21.350 20,900| 10,000 By Bank A/c
cd 10,00
By Sarah Qurert Alc 3,000 2,000
By General Reserves Ac 3,000 2,000
28,670 25,780 10.000
28,670 25,780 10.000
Or
A and B are partners sharing profits & losses in 3:2 ratio.
They admitted Z as a partner for 1/5th share. Z brings R
as capital but is unable to bring 10,000 as his 60,000
share o!
goodwil. Pass ne cessary journal entries.
Sol.:
JOURNAL
 2023
Solved Papers Accountancy (XI)- (11)
Particu lars L.F Dr.
Date Cr.
Amt? Amt
Bank Ae... .Dr. 60,000
To Z's Capital A/c 60,000
(Being Zbrings 60,000as capital)
Z's Current Capital Alc... ....Dr. 10,000
To A'sCapital A/c(10,000 x 3/5) 6,000
To B's Capital A/c (10,000 x 2/5) 4,000
(Being the distribution of premiumamong
sacri fice patners through Z's Current
account)

Working Note:
Calculation of New Ratio
Z's Share= 1/5th
Remaining Share 1-1/5 = 4/5
A's New Share= 4/5 of 3/5= 12/25
B's New Share= 4/5 of 2/5= 8/25
New profit sharing ratio of A, Band Z= 12/25:8/25: 5/25
Calculation of Sacrifice Ratio:
A's Sacrifice ratio= Old Ratio ofA -New Ratio of A
=3/5- 12/25
=3/25
B's Sacrifice ratio = Old Ratio of B- New Ratio of B
= 2/5-8/25
= 2/25
Sacrificing ratio among A and B is 3:2
Q.23. C limited invited applications for 50,000 shares of 10 each
at a premium of 20% payable as follows: () on application
3per share, (ii) on allotment5 per share including premium,
() on first call 1 per share, (iv) second and final call shall
be made as and when required. Applications were received
for 75000 shares. Make entries in the journal assuming that
excess applications money were refunded.
Sol.: JOURNAL
(12) Aehteven
DATE PARTICULARS DR.
AMT
CR.
Dr. 2,25,00)
AMI?
Bank A/c (75,000 x ? 3)......
To Share Application Alc
2,25,009
(Being Share Application Money received on
75, 000 shares @ 3 cach )
Share Application A/e Dr 2,25,00)
To Share Capital A/c 1,50,000
To Bank Alc(25,000 x 3) 75,000
(Being Share Application money of 50,000 (a
each transfer to Share Capital and excess by
25,000(@ 3cach refunded)
Share Allotment A/e (50,000 x 5)...... Dr. 2,50,00)
To Share Capital Alc 1,5,000
To Securities Premium Reserve A/c 1,00,000
(Being Share Allotment Money due on 50,000
(@ 5 each at Premium )
Bank A/c.... Dr 2,50,000
To Share Allotment Ac 2,50,000
(Being Share Allotment Money Received on
50,000(@ Z5 cach)
Share First A/c (50,000 x 1).. Dr. 50,000
ToEquity Share Capital A/c 50,000
(Being Share First Call due on 5,000 @ I
each)
Bank A/c ...Dr. 50,000
To Share First A/c 50,000
(Being Share First Money Received on 50,00 @
leach)
Or
Poonam Ltd. issued 100 shares of 100 each, which were
later on forfeited for non- payment of allotment money of
50 per share. The first and final call on these shares at ? 20
shares was not made. Journalise the transaction in the books
of Poonam Ltd.
Ans. JOURNAL

LF Dr. Cr.
Date Particulars
Amt Amt

Share Capital Alc (100 x 80 ). .Dr. 8,000

S,000
ToCalls-In- Arears Alc (100 x 50) 3,000
To Share Forfeited Alc(B/F)
(Being share forfeited due to non- payment of
al lotment money of 50 pr share)

Working Note :
*Called up = 100 -20 =80