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Guess Paper - 2008
Class – XII
Subject – Accountancy

PART A

PARTNERHSIP AND COMPANY ACCOUNTS

1. Mention two important features of income. (1)

2. In the absence of any specific conditions in the partnership deed, what are the rules applied regarding the following items:

(a) Salary to partners

(b) Interest on capital (1)

3. On which side of Profit and Loss Appropriation Account, Partner’s interest on drawings is recorded? (1)

4. While allowing interest on capital, profit ________ and the balance of capital account _______. (increases, decreases) (1)

5. Mention the rate of interest payable on debentures issued as collateral security.(1)

6. How will you deal with the following case while preparing the final Accounts as on 31^st Dec. 2003. (3)

Balance Sheet as on 1^st Jan., 2003

Liabilities Rs. Creditors for sports materials 150

Assets Rs. Sports materials 200

Receipts and Payments Account for the year ending 31^st Dec., 2003

Receipts Rs. Sports Material 90

Payments Rs. Sports materials 3500

Information:

Sports materials on hand on 31^st Dec., 2004 Rs. 550.

7. On 31^st December1998, ABC Ltd. purchased 400 of its own debentures of Rs.100 each, for cancellation, out of which 300 were bought at a market price of Rs.98 per debenture and 100 debentures were purchased at @Rs.99 per debenture.

Pass journal entries in the books of the company. (3)

8. State reason why a company would opt for the issue of debentures where their shares are highly in demand in the market? (3)

9. A, B and C are partners sharing profits and losses in the ratio 2:1:1, with capitals of Rs.40,000, Rs.30,000 and Rs.20,000 respectively. C’s minimum profit after interest on capitals @6% has been guaranteed to be not less than Rs.10,000. A & B have agreed that if C’s profit falls below the guaranteed sum such deficiency would be shared by them equally. The net profit before interest on capitals is estimated to be Rs.38,400. Prepare profit and loss appropriation account. (4)

10. A, B and C were partners in a firm. On 1.1.98 their capitals stood at Rs. 50,000/-, Rs. 25,000/- and Rs. 25,000/- respectively. As per the provisions of the partnership deed :
    (a) C was entitled for a salary of Rs. 1,500/- pm.
    (b) Partners were entitled to interest on capital at 5% p.a.
    (c) Profits were to be shared in the ratio of capitals.
    The net profit for the year 1998 of Rs. 45,000/- was divided equally without providing for the above terms.
    Pass an adjustment entry to rectify the above errors. (4)

11. Ram and Co. purchased machinery from Mona and Co. for Rs. 400000. A sum of Rs. 175000 was paid by means of a bank draft and for the balance due Ram and Co. issued Equity shares of Rs. 10 each at a discount of 10%. Journalise the above transactions in the books of the Company. (4)

12. (a) The Balance Sheet of Seema Ltd. disclosed the following information on 1.1.2005.

15% Debentures Rs. 1500000

Debenture Redemption Fund Rs. 1160000

15% Debenture Redemption Fund Investment Rs. 1160000

The annual contribution to the Debenture Redemption Fund was Rs. 130000 for the years 2005 and 2006. The debentures were redeemable on 31^st December, 2006. The investments were sold for Rs. 1380000 and the debentures were redeemed.

Prepare Debentures A/c, Debenture Redemption Fund A/c and Debenture Redemption Fund Investment A/c for the year 2005-2006.

(b) Pass the journal entries to record the issue and redemption of debentures in the following cases:

(i) 1000, 12% debentures of Rs. 100 each issued at a discount of 5% and redeemable at a premium of 3% after 5 years.

(ii) 10000, 10% debentures of Rs. 100 each issued at a premium of 5% and redeemable at par after 6 years. (3 + 3 =6)

13. The following is the Receipts and Payments Account of You Bee Forty Club for the year ending 31^st December, 1998: (6)

Receipts and Payments Account

Receipts	Rs.	Payments	Rs.
To Balance	15,000	By Salaries and wages	16,000
“ Subscriptions:		“ Office expenses	3,500
1997	6,000	“ Sports equipment	34,000
1998	35,000	“ Telephone charges	2,400
“ Donation	5,000	“ Electric charges	3,200
“ Entrance Fees	8,000	“ Travelling expenses	6,500
		“ Balance	3,400
	69,000		69,000

1. Outstanding subscription for 1998- Rs. 5,500.

2. Entrance fees to be capitalized.

3. Outstanding salaries and wages- Rs. 4,000.

4. Depreciate sports equipment by 25%.

Prepare from the above particulars the Income and Expenditure Account of the Club.

14. A, B and C were partners in a firm sharing profits and losses in the ratio of their capitals. Their Balance Sheet on 31.12. 1996 was as follows:

Balance Sheet
Liabilities	Amount	Assets	Amount
Creditors Reserve fund Capitals: A 10,000 B 5,000 C 5,000	3,000 3,200 20,000 _____ 26,200	Furniture Stock Debtors Bills Payable Cash	8,000 6,000 6,000 1,000 5,200 _______ 26,200

A died on 31. 3. 1997. Under the terms of partnership deed the executors of a deceased partner were entitled to:

a. Amount standing to the credit of the partner

b. Interest on capital @ 5%

c. Share of goodwill on the basis of twice the average profits for the past three years.

d. Share of profit from the last financial year to the date of death on the basis of profit for the last year’s profit. Profits for 1994, 1995 and 1996 were Rs.6,000, Rs.8,000 and Rs.7,000 respectively.

A’s executors were paid Rs.1,800 on 1.4.1997 and the balance in 4 equal installments from 31.3.1998 with interest @6% p .a.

Pass necessary journal entries and draw up A’s account to be rendered to his executor and his executor’s account for the year 1997 and 1998. (6)

15. International Chemical Ltd. was registered with a nominal capital of Rs. 500000 divided into shares of Rs. 100 each. Of these 1000 shares were issued to vendors as fully paid in payment of building purchased. 2000 shares were subscribed for by the public. During the first year Rs. 50 per share were called up. Of the shares subscribed for by the public the amount received at the end of the first year was as follows:

On 1400 share the full amount called;

On 250 shares Rs. 40 per shares;

On 200 shares Rs. 30 per shares;

On 150 shares Rs. 20 per shares;

The directors of the company forfeited those shares on which less than Rs. 40 per share was received. These shares were subsequently reissued at Rs. 30 per share.

You are required to show cash book and journal entries in the books of company.(8)

OR

15. M.K. Sales Company Ltd. issued a prospectus inviting applications for 100000 shares of RS. 10 each at a premium of Rs. 2.50 per share payable as follows:

On allocation Rs. 5

On allotment Rs. 5 (including premium)

On first call Rs. 2.50

The company received applications for 150000 shares; allotment was made on pro-rata basis. Over subscribed money received on application was adjusted with the amount due on allotment. Mr. Hemant to whom 200 shares were allotted failed to pay the allotment money and the final call; his shares were forfeited after the first call. Later on the shares were reissued to Mohan as fully paid for Rs. 9 per share. Pass journal entries in the books of company for recording the above transactions. (8)

15. Rama and Reshma are partners sharing profits & losses in the ratio of 3:2. The Balance sheet of the firm as on 31-3-05 was as follows: (8)

Liabilities	Rs.	Assets	Rs.
Capital accounts		Debtors 40000
Rama	75000	Less: BDR 2000	38000
Reshma	45000	Stock	42000
Provident fund	20000	Machinery	27000
Workmen’s accident compensation fund	6000	Bills receivables	32000
General reserve	5000	Bank	31000
Creditors	19000
	170000		170000

They admitted Dipali into partnership on 1-4-05, giving her 1/5th share in future profits on following terms:

1. Dipali will have to bring such an amount as capital which would be equal to 1/5th of the net assets of the new firm.

2. Dipali will bring Rs. 10000 as her share of goodwill.

3. Provision of Rs. 500 be made in respect of outstanding wages.

4. Machinery to be valued at Rs. 30000 and stock to be reduced by 10%.

5. Bad debt reserve to be maintained at 7 ½ % on debtors.

6. For accrued income of Rs. 300, no entry is made in the books.

Prepare Revaluation a/c, Partners’ capital accounts and Balance sheet of the new firm.

OR

16. Raman, Magan and Chaman share profits and losses in ratio of 4:3:2. Magan retires on 31-3-05. The balance sheet of their firm as on 31-3-2005 is as under: (8)

Liabilities	Rs.	Assets	Rs.
Capital:		Land	45000
Raman	40000	Building	25000
Magan	30000	Plant	22000
Chaman	20000	Motor	6000
Creditors	48000	Furniture	8000
Bills payable	15000	Joint life policy	9000
Joint life policy reserve	9000	Debtors 38000 Less: BDR 2000	36000
Profit & loss a/c	4500	Stock	21000
Workmen’s saving fund	22000	Cash	30000
Workmen’s compensation fund	13500
	202000		202000

Following are the conditions according to which Magan retired:

(1) The total goodwill of the business was valued at Rs. 27000. The goodwill account will not be shown in the Balance sheet after the retirement.

(2) The annual insurance premium Rs. 2400 was paid upto 30-6-05.

(3) The manager Mr. Patel’s three months’ salary is due. Monthly salary is Rs. 600.

(4) The plant is depreciated by Rs. 2000, the cost of land is increased up to Rs. 55000, the joint life policy is surrendered at book value.

(5) An employee of the firm was dismissed. He claimed in the court for Rs. 5000. He lost his claim in the court. Firm has to pay Rs. 500 for legal expenses.

(6) After the retirement, Raman and Chaman will share profits & losses in the ratio of 11:7.

(7) The amount due to Magan should be paid in the form of motorcar, which should be considered at cost price, and the remaining amount should be considered as 10% loan.

Prepare necessary accounts and Balance sheet after retirement of Magan. Give journal entries for goodwill.

PART B

ANALYSIS OF FINANCIAL STATEMENTS

16. Current liabilities of a company is Rs.600,000 . Current Ratio is 3:1 and liquid ratio is 1:1. Calculate value of stock in trade. (1)

17. State the reasons whether the following would result in an inflow, outflow or no flow of funds. (1)

(a) Amount transferred to provision for taxation

(b) Redemption of debentures

19. The debt equity ratio of a company is 1:2. Which of the following suggestions would increase, decrease or do not change it. (1)

(i) Issue of equity shares

(ii) Cash received from debtors

19. What is meant by common size balance sheets? (3)

20. Rearrange the following items under the heads: (4)

(a) Loans (b) Current Liabilities (c) Provisions

(i) Debentures (ii) B/P

(iii) Provision for taxation (iv) Bank Overdraft

(v) Provident Fund (vi) Unclaimed Dividend

(vii) Proposed Dividend (viii) Creditors for expenses

19. Inventory Turnover Ratio is 5 times. Sales are Rs. 1,50,000, The firm makes 20% profit on sales. Opening Stock is Rs. 15, 000 more than the closing stock. Calculate the opening and closing stock. (4)

20. The net profit of a company before tax is Rs. 150,000 as on March 31, 2003, after considering the following:

Depreciation on Fixed Assets Rs. 15,000

Goodwill written off Rs. 5,000

The current assets and current liabilities of the company in the beginning and at the end of the year were as follows:

March 31, 2002 March 31, 2003

Bills Receivables 25,000 10,000

Bills Payables 6,000 7,500

Debtors 11,000 20,800

Stock in hand 12,000 16,000

Outstanding Expenses 7,000 4,000

Calculate Cash flow from operating activities. (6)