Class XII – Accountancy Sample Paper – 4

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(Accounting for Partnership Firms and Companies)

1. A partner introduced additional capital of ₹30,000 and advanced a loan of ₹40,000 to the firm at the beginning of the year. Partner will receive year’s interest:

(A) ₹4.200

(B) ₹2,400

(C) Nil

(D) ₹1,800

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2. Assertion (A): Profit and Loss Appropriation Account shows the correct profit earned by the firm for the accounting period.

Reason (R): The net profit is adjusted after taking into account interest on capitals, interest on drawings, salaries/ commissions paid to the partners and other adjustments in the Profit and Loss Appropriation Account.

(A) Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A).

(B) Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).

(C) Assertion (A) is correct but Reason (R) is incorrect.

(D) Assertion (A) is incorrect but Reason (R) is correct.

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3. Y Ltd. forfeited 50 shares of ₹100 each issued at 10% premium on which allotment money of ₹30 per share (including premium) and first call of ₹30 per share were not received and the second and final call of ₹20 per share was not yet called. 20 of these shares were re-issued as ₹80 paid up for ₹70 per share.

On forfeiture, the Share Capital Account will be _______________

(A) Debited with ₹1,600

(B) Credited with ₹1,600

(C) Debited with ₹74,000

(D) Credited with ₹1,400

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OR

If applicants for 80,000 shares were allotted 60,000 shares on a pro-rata basis, the shareholder who was allotted 1,200 shares must have applied for:

(A) 900 shares

(B) 3,600 share

(C) 1,600 shares

(D) 4,800 shares

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4. Charulata is a partner in a firm. She withdrew ₹10,000 in each quarter during the year ended 31st March, 2019. Interest on her drawings @ 9% p.a. will be:

(A) ₹1,350

(B) ₹2,250

(C) ₹900

(D) ₹1,800

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OR

Where the continuing partners carry on the business of the firm, the dead partner whose claim is not settled, his executor –

X. is entitled to share of profits since date of cessation as partner.

Y. is not entitled to claim anything other than unsettled amount.

Z. is entitled to 6% interest p.a on the unsettled amount.

Select the correct answer from the options given below:

(A) Y is correct.

(B) Only X is correct.

(C) Only Z is correct.

(D) Either X or Z at his option.

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5. If the Partners’ Capital Accounts are fixed ‘salary payable to partner’ will be recorded:

(A) On the debit side of Partners’ Current Account

(B) On the debit side of Partners’ Capital Account

(C) On the credit side of Partners’ Current Account

(D) None of these

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6. X Ltd. acquired assets of ₹20 lakhs and took over creditors of 20 thousand from Y Ltd. X Ltd. issued 8% debentures of ₹200 each at a discount of 10% as purchase consideration. Number of debentures issued will be:

(A) 11,000

(B) 9,000

(C) 10,000

(D) 10,100

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OR

If Vendors are issued debentures of ₹80,000 in consideration of net assets of ₹1,00,000, the balance of ₹20,000 will be credited to:

(A) Statement of Profit and Loss

(C) General Reserve Account

(B) Goodwill Account

(D) Capital Reserve Account

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7. Assertion (A): A company is created through the process of incorporation under the Companies Act, 2013.

Reason (R): It is an artificial person which is a separate legal entity from its members (shareholders).

(A) Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A).

(B) Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).

(C) Assertion (A) is correct but Reason (R) is incorrect.

(D) Assertion (A) is incorrect but Reason (R) is correct.

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8. R and S are partners sharing profits in the ratio of 5:3. T joins the firm as a new partner. R gives 1/4th of his share and S gives 1/5th of his share to the new partner. Find out new profit-sharing ratio.

(A) 37:48:75

(B) 75:48:37

(C) 5:3:4

(D) 5:3:5

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OR

A and B are partners sharing profits and losses in the ratio 4: 1. C was manager who received a salary of ₹2,000 p.m. in addition to a commission of 5% on net profits after charging such commission. Profit for the year is ₹3,39,000 before charging salary. Find the total remuneration of C.

(A) ₹39,000

(B) ₹44,000

(C) ₹43,500

(D) ₹38,000

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Read the following passage and answer questions no. 9 and 10.

A and B are partners sharing profits in the ratio of 3:2 with capitals of ₹50,000 and ₹30,000 respectively. Interest on capital is agreed @ 6% p.a. B is to be allowed an annual salary of ₹2,500. During 2016, the profits of the year prior to calculation of interest on capital but after charging B’s salary amounted to ₹12,500.

9. What will be the amount of profit distributed to A?

(A) ₹4,620

(B) ₹3080

(C) ₹1,500

(D) ₹4,360

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10. What will be the amount of profit distributed to B?

(A) ₹4,620

(B) ₹3080

(C) ₹1,500

(D) ₹4,360

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11. If the partnership agreement provides payment of interest on capital of the partners, then interest can be paid only out of _____________

1. Accumulated profits

2. Current Profits

3. Past Profits

4. Capital

(A) 1 and 2

(B) 2 only

(C) 2 and 3

(D) 4 only

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12. At the time of a dissolution of a partnership firm, a creditor worth ₹90,500 took away stock worth ₹77,775 in full settlement. Which of the following will be accounting entry for the same:

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OR

A and B were partners is a firm. They share their profits in the ratio of 2:1. A withdraws an amount of ₹2,000 on 1st July, 2017. Journalize it.

(A) Profit and Loss Appropriation A/c                         Dr. 2,000

To A’s capital A/c                                                                                            2,000

(B) A’s Capital A/c Dr 2000                                         Dr. 2,000

To Profit and Loss A/c                                                                                    2,000

(C) A’s Drawings A/c                                                  Dr. 2,000

To Cash/Bank A/c                                                                                          2,000

(D) A’s Capital A/c                                                      Dr. 2,000

To A’s Drawing A/c                                                                                         2,000

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13. XY Limited issued 2,50,000 equity shares of ₹10 each at a premium of ₹1 each payable as ₹2.5 on application, ₹4 on allotment and balance on the first and final call. Applications were received for 5,00,000 equity shares but the company allotted to them only 2,50,000 shares. Excess money was applied towards amount due on allotment. Last call on 500 shares was not received and shares were forfeited after due notice. This is a case of:

(A) Over Subscription

(B) Pro-rata Allotment

(C) Forfeiture of Shares

(D) All of the above

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14. A, B and C are partners in the firm, sharing profits in the ratio of 2:2:1. Their capital accounts stand as ₹50,000, ₹50,000 and ₹25,000, respectively. B retired from the firm and balance in the General Reserve on that date was ₹15,000. If goodwill of the firm is ₹30,000 and profit on revaluation is ₹7,050, what amount will be transferred to B’s Loan Account?

(A) ₹50,820

(B) ₹70,820

(C) ₹8,820

(D) None of these

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15. X and Y are partners sharing profits and losses in the ratio 4:1. Z was the manager who received the salary of ₹8,000 p.m. in addition to a commission of 5% on net profits after charging such commission. Profits for the year is ₹13,56,000 before charging salary. Find the total remuneration of Z?

(A) ₹1,56,000

(B) ₹1,76,000

(C) ₹1,74,000

(D) ₹1,52,000

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16. X and Y are two partners in a firm having share capital of ₹10,000 and ₹15,000 respectively, admitted Z for 1/3 share of profit for which he is to bring ₹15,000 for his share of capital. What is for goodwill of the firm.

(A) ₹10,000

(B) ₹9,000

(C) ₹5,000

(D) ₹11,000

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17. X, Y and Z were sharing profits and losses in the ratio of 5:3:2. They decided to share future profits and losses in the ratio of 2:3:5 with effect from 1.4.2007. They decided to record the effect of the following, without affecting their book values:

(i) Profit and Loss Account ₹24,000

(ii) Advertisement Suspense Account ₹12,000

Fill in the missing figures in the following Journal entry and show your working clearly.

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OR

A, B and C were partners in a firm sharing profits and losses in the ratio of 3:2:1. They admit D into partnership with 1/4th share which he acquires from A and B in the ratio of 2: 1. On D’s admission the goodwill of the firm is valued at ₹6,00,000. However, D is unable to bring his share of goodwill in cash.

Pass necessary journal entry and also calculate the new profit sharing ratio.

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18. A and B are partners sharing profits in the ratio of 3:2. They admit C in the firm for 3/7th profits (which he takes 2/7th from A and 1/7th from B) and brings ₹6,00,000 as premium out of his share of ₹7,20,000. Goodwill account does not appear in the books of A and B.

Pass the necessary journal entry.

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19. Tagore Ltd. purchased a running business from Tulsi Bros. for a sum of ₹48,00,000 payable by issue of fully paid equity shares of Rs. 20 each at a premium of 20%. The assets and liabilities consisted of the following:

Plant and Machinery                                      ₹25,00,000

Stock                                                               ₹15,00,000

Sundry Debtors                                               ₹8,60,000

Sundry Creditors                                             ₹3,00,000

Pass necessary journal entries in the books of Tagore Ltd.

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OR

Vimal Ltd. purchased machinery of ₹9,90,000 from Kamal Ltd. The payment to Kamal Ltd. was made by issuing equity shares of ₹100 each. Pass the necessary Journal entries in the books of Vimal Ltd. for purchase of machinery and the issue of shares when:

(i) Shares were issued at par.

(ii) Shares were issued at 25% premium.

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20. An existing firm had assets of ₹4,00,000 including cash of ₹15,000. The partner’s capital accounts showed a balance of ₹3,00,000 and reserves constituted the rest. If the normal rate of return is 12% and the goodwill of the firm is valued at ₹50,000 at 2.5 year’s purchase of super profits, find the average profits of the firm.

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21. On 1st April, 2017, Shakti Ltd. was formed with an authorized capital of ₹60,00,000 divided into 3,00,000 equity shares of ₹20 each. Out of these, 50,000 shares were issued to the vendors as fully paid up for purchase of office premises. The directors offered 1,20,000 shares to the public and called up ₹10 per share and collected the entire called up (₹) on these shares.

Show the share capital in the Balance Sheet of the company as per Schedule-III and also prepare ‘notes to accounts’

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22. Gaurav, Saurabh and Vaibhav were partners in a firm sharing gains and losses in the ratio of 2:21. They decided to dissolve the firm on 31st March, 2018. After transferring Sundry assets (other than cash in hand and cash at bank) and third-party liabilities to realisation account, the assets were realized and liabilities were paid off as follows:

(i) A machinery with a book value of ₹6,00,000 was taken over by Gaurav at 50% of its value and stock worth ₹5,000 was taken over by a creditor of ₹9,000 in full settlement of his claim.

(ii) Land and building (book value ₹3,00,000) was sold for ₹4,00,000 through a broker who charged 2% commission.

(iii) The remaining creditors were paid ₹76,000 in full settlement of their claim and the remaining assets were taken over by Vaibhav for ₹17,000.

(iv) Bank loan of ₹3,00,000 was paid along with interest of ₹21,000.

Pass necessary journal entries for the above transactions in the books of the firm.

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23. On March 1, 2016 the directors of Sahara Ltd. issued 10,000 equity shares of ₹100 each at ₹125 per share, payable ₹50 on application (including premium), ₹45 on allotment and the balance on call.

The lists closed on March 10, 2016 on which date applications for 16,000 shares were collected. Of the cash collected, ₹50,000 was returned and ₹2,50,000 was applied to the (₹) pending on allotment, the balance of which was paid on March 16, 2016.

Call money was collected on 1st June, 2016 with the exception of one allotted of 200 shares. The shares were forfeited on October 15, 2016 and reissued as fully paid at ₹110 per share on December 3, 2016.

Record necessary journal entries in the books Sahara Ltd. using a joint account of application and allotment.

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OR

XY Ltd. invited applications for 5,00,000 equity shares of ₹10 each, payable as ₹3 on application, ₹4 on allotment and the balance on first and final call. Applications were collected for 12,00,000 shares and the shares were allotted on a pro rata basis. The extra application money was to be adjusted against allotment only. R, a shareholder, who had applied for 6,000 shares, failed to pay the call money and his shares were accordingly forfeited and reissued at ₹9 per share as fully paid. Pass necessary journal entries.

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24. Ashok and Biju were partners sharing profits and losses in the ratio of 3:1 respectively. The following was their balance sheet as at 31^st March, 2018:

On 1st April, 2018, Chandra was admitted in the firm on the following terms:

(i) Chandra would provide ₹1,00,000 as capital and pay ₹20,000 as goodwill for his one-third share in future profits.

(ii) Ashok, Biju and Chandra would share profits equally.

(iii) Machinery would be reduced by 10% and ₹5,000 would be provided for debts. Stock would be valued at ₹2,49,400.

(iv) Capital accounts of old partners would be adjusted in the profit sharing ratio on the basis of Chandra’s Capital bringing in or taking out cash.

Pass the necessary journal entries.

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OR

Following is the Balance Sheet of X, Y and Z as at 31st March, 2018. They shared profits in the ratio of 3:3:2.

On 1st April, 2018 Y decided to retire from the firm on the following terms:

(i) Stock to be depreciated by ₹12,000.

(ii) Advertisement Suspense Account to be written off.

(iii) Provision for Bad and Doubtful Debts to be increased to ₹6,000.

(iv) Fixed Assets be appreciated by 10%.

(v) Goodwill of the firm be valued at 780,000 and the amount due to the retiring partner be adjusted in X’s and Z’s Capital Accounts.

Prepare the Revaluation Account, Partner’s Capital Accounts and the Balance Sheet to give effect to the above.

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25. A, B and C were partners in a firm sharing profits and losses in the ratio of 3:2:1. C dies on 30th June, 2016. After all the necessary adjustments, his capital account showed a credit balance of ₹70,600. C’s executor was paid ₹10,600 on 1st July, 2016 and the balance in three equal yearly instalments starting from 30th June, 2017 with interest @ 10% p.a. on the unpaid amount. The firm closes its books on 31st March every year. Prepare C’s Executor’s Account till the amount is finally paid.

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26. Pass the necessary Journal entries for the issue of 7% debentures in the following cases:

(i) 100 debentures of ₹100 each issued at ₹105 each repayable at ₹100 each

(ii) 100 debentures of ₹100 each issued at ₹100 each repayable at ₹105 each.

(iii) 100 debentures of ₹100 each issued at ₹105 each repayable at ₹108 each.

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SECTION – B

(Analysis of Financial Statements)

27. Financial Statements are the product of accounting process.

(A) First

(B) Second

(C) End

(D) None of these

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OR

Financial statements disclose:

(A) Monetary information

(B) Qualitative information

(C) Non-monetary information

(D) All of these

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28. Assuming that the current ratio is 2:1, cash paid against bills payable would:

(A) Increase current ratio

(B) Decrease current ratio

(C) Have no effect on current ratio

(D) Decrease gross profit ratio

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29. Statement I: A cash flow statement provides information for planning the short-term financial needs of the firm. Statement II: A cash flow statement prepared for the future period is helpful in preparing a cash budget.

(A) Both statements are correct.

(B) Both statements are incorrect.

(C) Statement I is correct and statement II is incorrect.

(D) Statement I is incorrect and statement II is correct.

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OR

How will you treat Bank Overdraft in a cash flow statement?

(A) Cash flow from Operating Activities

(B) Cash flow from Financing Activities

(C) Cash flow from Investing Activities

(D) Cash Equivalent

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30. From the following information calculate the amount the cash flows from Financing Activities:

Additional Information:

Proposed dividend of the year 31st March, 2022 was 12% and for the year ended 31st March, 2021 was 10 %.

(A) Outflow of ₹50,000

(B) Inflow of ₹50,000

(C) Outflow of ₹60,000

(D) Inflow of ₹70,000

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31. Under which main head and sub-head of the Balance Sheet are the following items:

(i) Public deposits

(ii) Sinking fund

(iii) Office equipment

(iv) Prepaid expenses

(v) Outstanding salaries

(vi) Motor car

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32. Calculate Inventory Turnover Ratio from the following:

Ans. Sales = 3,20,000

Gross Profit = 25% on Sales

Gross Profit = ₹3,20,000 x 25/100 = ₹80,000

Cost of Goods Sold = Total Sales – Gross Profit

                                    = ₹3,20,000 – ₹80,000 = ₹2,40,000

Average Inventory = (Opening Inventory + Closing Inventory) / 2

= (₹29,000 + ₹31,000) / 2 = ₹30,000

Inventory Turnover Ratio = Cost of Goods Sold/Average Inventory

                                    = ₹2,40,000/₹30,000 = 8 times

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33. Prepare Common-size Statement of Profit & Loss from the following statement of Profit and Loss:

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OR

From the following information, prepare comparative statement of profit and loss showing increase, decrease and percentage:

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34. Prepare cash flow statement from the following balance sheet:

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