PRACTICE PAPER - 5 Accountancy (Class XIl) a __ _ Time Allowed: 3 Hours Max. Marks: 80 Part A: Accounting for Partnership Firms and Companies (Marks: 60) 1, Aand B are partners in a firm sharing profit in the ratio 4 : 3. Zis admitted as partner in the firm for 1/5th share. He brought &1,00,000 as his share of goodwill whichis credited to A and B as € 60,000 and 40,000. The new profit sharing ratio of A, Band C would be ... (@) 4:3:2 (0) 5:4:3 (0) 79:61:35 (d) none ofthese (1) 2. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R): Assertion (A); Interest on partner's loan is shown in the Profit and Loss A/c. Reason (R): Interest on partner's loan is paid even if firm’ incurs a loss. Inthe context ofthe above two statements, which ofthe following is correct? Select the correct option: (@) Both Assertion (A) and Reason (R) are true and Ris the correct explanation of A. (0) BothA and Rare true but is not the correct explanation of A. (0) Both Aand Rare false. (@) Ais false but Ris tru. cy )K As per SEBI guidelines, the minimum application money payable must be atleast. of the issue price of each share, (a) 5% () 25% (0) 20% (i) 15% a OR Journal entry passed for 10% Debentures issued as collateral security for Loan taken is: @ (a) BankA/e Dr | (b) BankA/c Dr ‘To 10% Debentureholders A/c ToLoanA/c (C) Debenture Suspense A/c Dr. | (d) Debenture Suspense Dr ‘To 10% Debentures A/c ToLoanA/e 4. X and Y are partners in a firm sharing profits in ratio 3: 2. They decided to share profits equally in future. Their Balance Sheet on that date showed € 25,000 in General Reserve and a debit balance of 10,000 in Profit and Loss A /c. The adjustment entry willbe if they do not want to alter the amount of General Reserve and Profit and Loss A/c: (a) Dr. Xand Cr. ¥%1,500 (b) Dr. Yand Cr. X%1,500 (©) Dr. Xand Cr. ¥%7,500 each (d) Dr. X® 10,000 and Cr. Y87,500 a oR P,Qand Rare partners in firm sharing profits in the ratio 2:2: Ris given a guaranteed minimum profit of € 20,000 every year: If profit ofthe firm during 2021-22 is 80,000, partners will get. (a) % 32,000;:32,000; 16,000 (6) © 30,000; 30,000; 20,000 (c) % 35,000; 25,000; 20,000, (a) none of these a 5. Xand Yare partners in a firm with capital of € 3,00,000 and 2,00,000 respectively: Interest on capital Was allowed @ 10% p.2° Due to Covid-19, firm could earn ® 40,000 during 2021-22. Interest on capital payable to partners would be... s (a) %20,000each () 24,000 and & 16,000 (€) %25,000 and & 15,000 (4) % 26,000 and ® 14,000 o m 6. Mor prer Prof (a) @) Read the Th Par 6 Select th: 9, The (a 10. Goc @ UL. Aa ine rati a 12. XL oft atta of ay um a ital ital a K Mona Ltd. issued 20,000, 8% Debentures of € 100 each at a premium of 5% but redeemable at a premium after 3 years. If Loss on Issue of Debentures was written off by & 120,000 out of Statement of Profit and Loss, debentures must be redeemable at a premium of (@) 6% 6) 10% (1% (4) 12% ny OR Minimum Subscription for Issue of Debentues as ‘per SEBI guidelines is: (a) 90% (b) 60% {c) 75% (a) 25% w K Ifa share of face value 10 £8 called up but €5 paid has been forfeited, the share Capital A /c willbe debited by....... . (a) 710 (H) BB ()%5 (a) 26 @ 8. A, Band C are partners sharing profits in the ratio 4: 3: 2. C retires and he surrenders his share to A and B in ratio 2 : 1. The new profit sharing ratio of A and B will be .... ws (a) 4:3 (b) 16:11 (o) 15:12 (d) 17:10 a) oR Xand Y are partners ina firm. Plant and Machinery is shown at % 40,000 in their Balance Sheet. Later on, they observed that it is reflected as over valued by 25%, find the revised value of Plant and Machinery tobe depicted at Ee (a) ©30,000 (732,000 (c) 50,000 (a) % 48,000 o Read the following extract and answer Question No. 9 and 10. The capital of Amit and Sumit is €2,00,000 and market rate of return is 15% on capital employed. Partners were charging € 12,000 each towards management cost. The profits for the last 3 years were % 60,000, 872,000 and ¥ 84,000 respectively Select the correct option to the following questions: 9. The Average Profit of firm is: (a) 772,000 (6) 60,000 (c) © 48,000 (@) can't say @ 10. Goodwill of firm based on capitalisation of Super Profit will be: (a) ©1,20,000 (b) 8 2,00,000 (©) &2,80,000 () %2,50,000 a 1M Aand Bare partners ina firmin the ratio of 7:3. They admit Cfor 1/5 shares, haf of which he acquires in equal proportions from both and the remaining half is given only by A to C, What isthe sacrificing ratio? @in 3:1 (2:1 (7:3 a KX Ltd. forfeited 100 shares of 10 each issued at a premium of 10% fully called up for the non-payment of 5 on Allotment (including premium) and ® 3 on Share Final Call, It reissued 1/4th forfeited shares at 8 per share. Amount transferred to Capital Reserve Will be. (a) 75 (o) 850 () 825 30 a DKESOPareissued 0. (a) Whole Time Directors (®) Officers of Company (0) Employees of Company (@) Allof these @ 14, A and B are partners in a firm sharing profits and losses equally. Their capitals were & 1,00,000 and 200,000 respectively. If firm earned & 27,000 as profit during the year, interest on capital @ 10% pa. was agreed upon. Interest on capital of B will be: (a) 318,000 (b) 9,000 (o) 20,000 (d) 710,000 @ 17315, Sumit withdrew a fixed amount at the end of each quarter during 202-22. interest on his drawing © 10% pa, amounts to 4,500, his quarterly drawing. was (a) 718,000 (&) %22,500 (©) %30,000 (d) noneofthese (1) OR Partner, Qdrew fixed amount at the end ofeach month during 2021-22 interest on drawing at 10% .a.amounts to 2,200, his monthly drawing wa... : (@) 5,000 (b) &4,000 (©) %6,000 (@) none of these a 16. Firm received aB/R for & 8,000 from a customer, Mohan, The bill was discounted from the bank but Gh le date ofthe bill Ram became insolvent and paid 40 paisa in a rupee: Ifthe firm also dissolved, what entry will be passed for B/R? Ch (a) Realisation A/c Dr 3,200 ToBank A/c : 3,200 (©) Bank A/c Dr 3,200 ToRealisation A/c 3,200 (€) Realisation A/c Dr 4,800 ‘ToBank A/c 4800 (@) Bank A/c Dr. 4800 ToRealisation A/c 4,800 17, Danish, Ana and Pranjal ate partners ina firm sharing profits and losses inthe ratio of 53:2. Their ‘books are closed on March 3ist every year. Danish died on September 30th, 2022, The executors of Danish are entitled to: His share of profit up to his date of death on the basis of sale til date of death Sales for the year ended March 31, 2022 was &2,00,000 and profit for the same year was 10% on sales, Sales shove a Growth trend of 20% and percentage of profit earning is reduced by 1% Passnecessary Journal Entry for his profit share till death and show the workings. early (CBS.E,, Sample Paper 2019-20~ modified) (3) 48. Mudit Sudhir and Uday are partners in a firm sharing profits in the ratio of 3:1: 1. Their fixed capital balances are & 400/00, & 1,60,000 and & 120,000 respectively. Net profit for the yea ended Slat March, 2022 distributed amongst the partners was & 1,00,000, without taking into account the following adjustments: (i) Interest on capital @25% pa. (i) Salary to Mudit @ 18,000 pa and commission to Uday € 12,000. (Gi) Mudit was allowed a commission of 6% of the divisible profit after charging such commission, Pass a rectifying journal entry in the books of the firm. Show workings clearly (CBSE, Sample Paper 2018-19 - modified) (3) OR ‘Asin and Shreyas are partners ina firm. They admit Ajay asa new partner with 1/Sth share in the profits ofthe firm. Ajay brings €5,00,000as his share of capital. The value of total assets of the firms ‘was 15,00,000 and outside liabilities were valued at 5,00,000 on that date. Give the necessary jgyenal entry to record goodwill atthe time of Ajays admission. Also show your workings. (CBBE, 2013-AI-C) 3) DK On April 1, 2021 Z Ltd, issued 10,000, 8% Debentures of & 100 each at premium of 5%, to be redeemable aa premium of 10% after 5 years. The entire amount was payable on application. The ‘Ssue was over-subscribed to the extent of 10,000 debentures and the allotment was made 14 Prop: loss Ragh 33,00 ‘Thea 21. Nav. hold rot of fol fwwing o 10% a ital Bist the 1a) the our @) ide proportionately toall the applicants, Give journal entries forthe issue of debentures and writing off loss on issue of debentures. (C.BS.E, Sample Paper 2021 ~ modified) (3) OR Raghav Ltd. purchased a running business from Krishna ‘Traders for a sum of € 15,00,000 payable £3,00,000 by cheque and for the balance, it issued equity shares of® 100 each ta premium of 20% The assets and liabilities consisted ofthe following: ® Plant and Machinery 4,00,000 Building 6,00,000 Stock 5,00,000 Sundry Debtors 3,00,000 Sundry Creditors 2,00,000 Record necessary journal entries inthe Books of Raghav Ltd. (CBS.E, Sample Paper 2012-13 & 2013-14) (3) 20. % and Z are partners in frm sharing profits in the ratio 33:2. On lst Match, 2022, their balance sheet stood as follows: Liabtes ® Assets @ Geditors 20,000 |] Sundry Assets “115000 Profit Los A/e 25000 || Advrisemen Suspense A/ 10000 Capital Ale: 8 2 x 2060 Y 000 es ae z om | 000 see EI} T2500 Partners decided to change their profit sharing ratio to2:3:3, Fortis purpose, goodwill was valued at & 45,000. They decided neither to ecord goodwill in the books nor want to change any item of the balance sheet. Pass a single journal entry to give the effect of the change. ® 3K Navnirman Ld. issued 4,00,000 ‘equity shares of 10 each at par, The amount per share was payable as follows: ©3 on application; 2on allotment &2.0n fs call and 3.on final call-Theissue was fully subscribed and the shares were alloted fully to all the applicants, All calls were made, Mahi, a shareholder holding 6,000 shares pai the final call money along with the frst call. Shey holding 700 shares did ‘ot pay the first call on the due date. Shrey paid the first call along with the final call. The accountant of the company had correctly passed the entries till receipt of allotment money. After that the following entries were left incomplete by him, Complete these entries, Journal Date Particulars : S[ie De® | PGR W leeyousiwca ce cane gy ete Soy ate "| (sige on 0000 shies @2 pest) : [ibaa : 1) Tey Sai Fit cal A/c PA oe 2 15(ii) | Equity Share Second and Final Call Ae Dr ‘To Equity Share Capital A/e (Being fina call due on 409000 shares @ &3 per share) eo) [BankA/e De ‘ToEuly Share Second ad Final Call A/e Te es 2 (CBSE, 2018-C) () 22, Madhav, Madhusudan and Mukund were partners in Jaganath Associates. They decided to dissolve the firm on 31st March, 2021 ass necessary journal entries for the following transactions after various assets (other than cash) and third-party liabilities have been transferred to realization account: (Old machine fully written off was sold for 842,000 while a payment of 6,000: made to bank for a bill discounted being dishonoured. (i) Madhusudan accepted an unrecorded asset of % 80,000 at % 75,000 and the balance through cheque, against the payment of his loan to the firm of 8 1,00,000. (ii) ‘The firm had paid realization expenses amounting to 85,000 on behalf of Mukund, (i) There was a vehicle loan of &2,00,000 which was paid by surrender of asset to the bank at an agreed value of €1,40,000 and the shortfall was met from firm's bank account. (CBSE, Sample Paper 2021-22 Term-I1) (8) XK Shiva Ltd. issued 30,000 shares of € 10 each @ a premium of €2 payable as under: On Application - 4 On Allotment - 33 On Share First and Final Call - 5 (including 2 premium) Applications were received for 85,000 shares and pro-rata allotment was made amongall the applicants. Excess application money was utilized towards allotment and first call. Al calls were made and were duly received except Anu who applied for 3400 shares and did not pay anything thereafter. Her shares were forfeited after final call and these were reissued at @9 each fully paid up. Pass necessary journal entries. 6 OR >XNitro Paints Ltd. invited applications for issuing 1,60,000 equity shares of 10 each at a premium of %3pper share. The amount was payable as follows: OnApplication - _ €6 per share (including premium & 1) OnAllotment = 3 pershare (including premium & 1) and ‘TheBalance = On First and Final Call. Application for 1,80,000 shares were received. Applications for 10,000 shares were rejected and pro- rata allotment was made to the remaining applicants. Over payment received on application was adjusted towards sums due on allotment. All calls were made and were duly received except allotment and final call from Aditya who was allotted 3,200 shares. His shares were forfeited. Half of the forfeited shares were re-issued for € 43,000 as fully paid up. ass necessary journal entries for the above transactions in the books of Nitro Paints Ltd. (CBSE, 2017-C) 6) 176 24, Pand Bist Creditors Workmen's Investment] General Res {Capital are P Q i Rise @ (i)-cv(a) ssolve n)and nk for rough at an ma) were © Her @ um of was xcept Ialf of ow 24. Pand Qare partners in a firm sharing profits and losses in the ratio of 3:1, Thele Halanwe sheet avon 31st March, 2022 was as follows: ables T@ “Ase ae Cros n1p00 I] cask ‘00 Workmen's Compensation Fund 4.00 || Debtors 1600 InvesnentMacuaton Reserve 1000 || Les: Provision for Doub Deis sat” 15500 General Reserve 2000 | sto 13500 Capit aes @ Ievesinent 00 P 16060 Goat 4000 Q 14,000 30,000 000 Ris admitted on 1 /Sth share in profit on the following terms: (i) Market value of investment is taken as & 4,200, (ii) Accrued Interest amounts to % 200. (iii) Provision for doubtful debts was in excess to € 200. (io) A.claim of Workmen's Compensation for & 1,000 be provided. (2) Ris to bring & 10,000 as goodwill share and & 10,000 as his capital, Prepare Revaluation A/cand Partners’ Capital A/cs. 3) ‘OR Kushal, Kumar and Kavita were partners in a firm sharing profits in the ratio of 3:1: 1. On Ist April, 2022, their Balance Sheet was as follows: Balance Sheet of Kushal, Kumar and Kavita 1 on Ist April, 2022 &). oon Asels: Creditors, *4,207000 |} Cash Gere Reere 120 || Deion Bills Payable a0n00 || tse Provision. Capital Acoust oe Naeks Kushal Furniture . ‘Kumar 1 balan Kavita «| 80000 | tana. On the above date, Kavita retired and the following was agreed: () Goodwill ofthe firm was valued ® 40,000. (Gi) Land was to be appreciated by 30% and building was to be depreciated by € 100,000. (ii) Nalue of furniture was to be reduced by € 20,000. (iv) Bad debts reserve isto be increased to 15,000. (0) 10% of the amount payable to Kavita was paid in cash and the balance was transferred to her Loan Account. Prepayg Revaluation A//cand Partners’ Capital A/cs. (CBSE, 2014~ modified) (6) 25. Babita, Chetan and David are partners in a firm sharing profits in the ratio of 2: 1:1 respectively. Firm. clases its accounts on 3ist March every yeat. Chetan died on 30th September, 2022. These was a 7balance of 1,25,000 in Chetan's Capital Account inthe beginning ofthe year. In the event of death of any partner, the partnership deed provides for the following: (0 Interest on capital will be calculated at the rate of 6% pra (i) The executor of deceased partner shall be paid %24,000 for his share of good will (iii) His share of Reserve Fund which is@ 12,000; shalll be paid to his executor. (iv) His share of profit till the date of death will be. calculated on the basis of sales, It is also: ‘specified that the sales during the year 221-22 were & 4,00,000. The sales from 1st April, 2022 to 30th September, 2022 were € 120,000, the profit ofthe firm for the year ending 31st March, 2022 was 2,00,000. Pass necessary journal entries on death of Chetan. (CBSE, 2013-C- modified) (6) 26. X Ltd issued 10,000 9% Debentures of € 100 each at a premium of 5% redeemable ater 5 years ata premium of 10%, On 1-4-2021, company received applications for 8,000 debentures and all were allotted debentures, On 1-7-2021, it also acquired assets of€15 lakhs and took over liabilities of Mahima Enterprise for © 4 lakhs. Itissued 8% Debentures of € 100 each ata premium of 10% to vendor. Answer the following questions: (Whats the minimum subscription limit for issuing debentures as per SEBI? (ii) Amount of Less on Issue of Debentures is: (ii) Pass journal entry for allotment of debentures to public. (fo) Pass journal entry for issuing debentures to Mahima Enterprise. (0) Balance of Securities Premium Reserve as at 1-3-2022 © Part B: Analysis of Financial Statements (Marks: 20) 27. Which type of Analysis of Financial Statements is called dynamic? (@) Vertical Analysis (t) Horizontal Analysis (0) Internal Analysis (d) External Analysis @ oR Quick Ratio will improve without affecting Current Ratio by . (@) Sale of Goods at Profit (6) Sale of Goods at a Loss (0) Sale of Goods at Par (d) Sale.of Goods on Credit at Profit @ 28. Compute Return on Capital Employed if: Net Profit after Interest and Tax = 4,80,000; Tax Rate is 40%; Capital Employed = & 70,00,000; 10% Debentures = 4,00,000. (a) 17.7% (@) 12% (0) 15% (@) 10% a 29. Insurance Claim ¥ 1,00,000 received for loss of Machinery due to accident. It will be recorded in Cash. Flow Statement as: (@) Addin Operating Activities as extraordinary item and subtract from Operating Activities (0) Add in Operating Activities as extra-ordinary item and subtract fom Investing Activities, (0) Subtract from Operating Activities as extraordinary item and add in Investing Activities, (@) Suibtract from Operating Activities as exta-ordinary item and add in Financing Activities, (1) » or X Ltd. issued 10,0009% Debentures of 100 eachat a premium of 6% and redeemable afer3 years at 4 premium of 10%, How this transactionwill be reflected in Cash Flow Statement. 178 32.feathof >ecified to 30th 2wast ed) (6) usata tures, ‘ise for a 10% ay Cash 30, 31. 32. 33, 34, (@) €1,00000 willbe added in Operating Activities as Loss on Issue of Debentures and 10,00,000 as inflow under Financing Activities, (® €1,00,000 will be added in Operating Activities as Loss on Issue of Debentures and & 10,50,000 as inflow from Financing Activities (©) & 40,000 willbe added in Operating Activities for Loss on Issue of Debentures and inflow of %10,60,000 in Financing Activities. (4) % 4,000 willbe added in Operating Activities towards Loss on Isue of Debentures and inflow of & 10,00,000 as inflow in Financing Activities ® Tae, [eae ome [alee sas (Machine costing 50,000 (Acumulated Depreciation 810,000) was sold for ®35,000, (i) Depreciation during year & 20,000 Cash Flow from Investing Activities willbe: (@) Outflow ®1,60,000 (Inflow €35,000 (©) Outflow ®1,25,000 (@) %1,35,000 Outfiows w Classify the following items under major heads and sub-heads of Balance Sheet as per Schedule II ‘of Companies Act, 2013? (@ Interest on Callsin-Arrears (ii) Loan Repayable on Demand (ii) Callsin-Advance (io) Provision for Employees Benefits (0) Land and Building (oi) Proposed Dividend 8) ‘Why do we compute Turnover Ratios? Which ratios are generally computed for checking tumover ratios and why? 6 Calculate: () Return on Investment (ROI) and (i) Net Assets Turnover Ratio from the following details: Revenue from Operations (Sales) € 25,00,000; Gross Profit Ratio 30%; Administrative Expenses £170,000; Selling and Distribution Expenses 1 30,000; Interest Paid on Long-term Borrowings 30,000, Depreciation € 40,000; Provision for Doubtful Debts & 5,000. Tax Rate was 30%, Wye Ltd, has Non-current Assets €12,00,000; Current Assets €6,00,000; Current Liabilities € 350,000. ® OR 1 Debt-Equity Ratio of a company 0:35 : 1, state whether the following transaction will improve decrease or will not affect the ratio by giving reasons: i) Sale of Investment in Shares at a profit of 10%. (ii) Redemption of 20% Debentures. (ii) Issue of Bonus Shares in ratio 1:4 (folePurchase of goods on a credit of 14 months. From the following Balance Sheet of a company as on 31-3-2021 and 2022 and Ad. answer the questions given atthe end pertaining in Cash Flow Statement: 179