Board Paper of Class 12-Commerce 2020 Accountancy All India(Set 2) - Solutions

Why does the Fixed Capital Account of partners show credit balance even when the firm suffers losses year after year? VIEW SOLUTION

Milan, Khilan and Silam were partners sharing profits in the ratio of 2 : 2 : 1. They decided to share future profits in the ratio of 7 : 5 : 3 with effect from 1^st April, 2019. After the revaluation of assets and re-assessment of liabilities, Revaluation Account showed a loss of ₹ 15,000. The amount to be debited in the capital account of Milan because of loss on revaluation will be:
(A) ₹ 15,000
(B) ₹ 6,000
(C) ₹ 7,000
(D) ₹ 5,000 VIEW SOLUTION

Name an item which is transferred to credit side of Realisation Account at the time of dissolution of partnership firm, but does not involve cash payment. VIEW SOLUTION

Which of the following statements does not relate to 'Reserve Capital':
(A) It is part of uncalled capital of a company.
(B) It cannot be used during the lifetime of a company.
(C) It can be used for writing off capital losses.
(D) It is part of subscribed capital. VIEW SOLUTION

P and Q were partners in a firm sharing profits in the ratio of 5 : 3. R was admitted for ${\frac{1}{4}}^{\mathrm{th}}$ share in the profits, of which he took 75% from P and the remaining from Q. Calculate the sacrificing ratio of P and Q. VIEW SOLUTION

Excess of issue price of a debenture over its face value is called ________________. VIEW SOLUTION

A, B and C were partners in a firm sharing profits in the ratio of 2 : 2 : 1. C retired. The balance in this capital account after adjustments regarding reserves, accumulated profits/loss and revaluation of assets and liabilities was ₹ 4,40,000. C was paid ₹ 5,00,000 including his share of goodwill. The amount that was credited to his capital account on account of goodwill was:
(A) ₹ 60,000
(B) ₹ 3,00,000
(C) ₹ 1,00,000
(D) ₹ 12,000 VIEW SOLUTION

Rohan, Mohan and Sohan were partners sharing profits equally. At the time of dissolution of the partnership firm, Rohan's loan to the firm will be :
(A) Credited to Rohan's Capital Account.
(B) Debited to Realisation Account.
(C) Credited to Realisation Account.
(D) Credited to Bank Account.

VIEW SOLUTION

Rahul, Sahil and Jatin were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. Rahul died on 15^th October, 2017. At that time, the capitals of Sahil and Jatin after all the adjustments were ₹ 3,56,000 and ₹ 2,44,000 respectively. Sahil and Jatin decided to adjust their capital according to their new profit sharing ratio by opening current accounts. Calculate the new capitals of Sahil and Jatin. VIEW SOLUTION

Name an item that is never shown on the payment side of Receipts and Payments Account, but is shown on the debit side of the Income and Expenditure Account. VIEW SOLUTION

Diya, Riya and Tiya were partners sharing profits and losses in the ratio of 2 : 3 : 5. Tiya died on 28^th November, 2019. Her share of profit was taken equally by Diya and Riya. Diya's share of profit in the new firm will be __________. VIEW SOLUTION

Mona and Tina were partners in a firm sharing profits in the ratio of 3 : 2. Naina was admitted with $\frac{1}{6}$^th share in the profits of the firm. At the time of admission, Workmen's Compensation Reserve appeared in the Balance Sheet of the firm at ₹ 32,000. The claim on account of workmen's compensation was determined at ₹ 40,000. Excess of claim over the reserve will be:
(A) Credited to Revaluation Account.
(B) Debited to Revaluation Account.
(C) Credited to old partner's Capital Account.
(D) Debited to old partner's Capital Account. VIEW SOLUTION

Sun and Star were partners in a firm sharing profits in the ratio of 2 : 1. Moon was admitted as a new partner in the firm. New profit sharing ratio was 3 : 3 : 2. Moon brought the following assets towards his share of goodwill and his capital :

	₹
Machinery	2,00,000
Furniture	1,20,000
Stock	80,000
Cash	50,000

If his capital is considered as ₹ 3,80,000, the goodwill of the firm will be:
(A) ₹ 70,000
(B) ₹ 2,80,000
(C) ₹ 4,50,000
(D) ₹ 1,40,000 VIEW SOLUTION

How would the following items be treated while preparing the financial statements of a sports club?
 

Particulars	Amount (₹)
Prize Fund	44,000
Interest on Prize Fund Investments	6,000
Prizes Awarded	46,000
Match Expenses	64,000
Prize Fund Investments	44,000

OR

From the following information of a charitable dispensary, calculate the amount of medicines consumed during the year that would appear in the Income and Expenditure Account for the year ending 31^st March, 2019:
 

Particulars	Amount (₹)
Stock of medicines on 1.4.2018	60,000
Creditors for medicines 1.4.2018	40,000
Stock of medicines 31.3.2019	10,000
Creditors for medicines 31.3.2019	25,000
Advances for medicines 31.3.2019	22,000
Credit purchases of medicines during the year	2,76,000
Cash purchases of medicines during the year	46,500

VIEW SOLUTION

Raunit Styles Ltd. was registered with a capital of ₹ 85,00,000 divided into equity shares of ₹ 100 each. The company invited applications for issuing 45,000 shares.
The amount was payable as ₹ 25 on application, ₹ 35 on allotment, ₹ 25 on first call and balance on final call.
Applications were received for 42,000 shares and allotment was made to all the applicants. Kavi, to whom 3,300 shares were alloted, failed to pay both the calls. His shares were forfeited.
Present the Share Capital in the Balance Sheet of the company as per Schedule III of the Companies Act, 2013. VIEW SOLUTION

Manu, Sonu and Tony were partners in a firm sharing profits in the ratio of 5 : 3 : 2. The firm closes its books on 31^st March every year. Manu died on 31^st July, 2019. His executor is entitled to:
(i) His capital ₹ 4,00,000 and his share of goodwill. Goodwill of the firm was valued at ₹ 96,000.
(ii) His share of profit till the date of his death which will be calculated on the basis of average profits of last 3 years.
(iii) Average profits of last 3 years were ₹ 78,000.
(iv) Interest on capital @ 6% p.a.
(v) His drawings till the date of death were ₹ 21,000.
Prepare Manu's Capital Account to be rendered to his executors. VIEW SOLUTION

Ram, Mohan and Sohan were partners sharing profits in the ratio of 2 : 1 : 1. Ram withdrew ₹ 3,000 every month and Mohan withdrew ₹ 4,000 every month. Interest on drawings @ 6% p.a. was charged, whereas the partnership deed was silent about interest on drawings.
Showing your working clearly, pass the necessary adjustment entry to rectify the error.

OR

Yadu, Vidu and Radhu were partners in a firm sharing profits in the ratio of 4 : 3 : 3. Their fixed capitals on 1^st April, 2018 were ₹ 9,00,000, ₹ 5,00,000 and ₹ 4,00,000 respectively. On 1^st November, 2018, Yadu gave a loan of ₹ 80,000 to the firm. As per the partnership agreement:
(i) The partners were entitled to an interest on capital @ 6% p.a.
(ii) Interest on partners' drawings was to be charged @ 8% p.a.
The firm earned profits of  ₹ 2,53,000 (after interest on Yadu's loan) during the year 2018 – 19. Partners' drawings for the year amounted to Yadu: ₹ 80,000, Vidu : ₹ 70,000 and Radhu : 50,000.
Prepare Profit and Loss Appropriation Account for the year ending 31^st March, 2019. VIEW SOLUTION

Rakesh, Ram and Rohan were partners sharing profits in the ratio of 5 : 3 : 2. On 31^st March, 2018, their Balance Sheet was as follows:
 

Balance Sheet of Rakesh, Ram and Rohan as at 31st March, 2018
Liabilities		Amount (₹)	Assets		Amount (₹)
Sundry Creditors		70,000	Land and Building		3,50,000
Rohan's Loan		20,000	Stock		3,00,000
Mrs. Rohan's Loan		20,000	Debtors	2,00,000
			Less: Provision for doubtful debts	10,000	1,90,000
Capitals :
Rakesh	4,00,000		Cash		70,000
Ram	3,00,000
Rohan	1,00,000	8,00,000
		9,10,000			9,10,000

The firm was dissolved on the above date on the following terms:
(i) Land and building and stock were sold for ₹ 6,00,000. Debtors were realised at 10% less than the book value.
(ii) Mrs. Rohan's loan was settled by giving her an unrecorded computer of ₹ 22,000.
(iii) Rakesh paid off one of the creditors ₹ 20,000 in settlement of ₹ 30,000.
(iv) Rohan's loan was fully settled at ₹ 18,500.
Prepare Realisation Account. VIEW SOLUTION

From the following Receipts and Payments Account of Vista Club, prepare an Income and Expenditure Account for the year ended 31^st March, 2019:
 

Receipts and Payments Account of Vista Club for the year ended 31st March, 2019
Receipts		Amount (₹)	Payments	Amount (₹)
To Balance b/d		5,000	By Salaries	31,000
To Subscriptions:			By Electricity Expenses	14,500
2017 – 18	11,600		By Machinery (01.07.2018)	40,000
2018 – 19	73,000		By 8% Investments	30,000
2019 – 20	8,000	92,600	By Balance c/d	5,100
To Sale of old furniture
(Book value of ₹ 2,000)		800
To Entrance Fees		22,000
To Interest on Investment		200
		1,20,600		1,20,600

Additional Information:
(i) The club had 50 members each paying an annual subscription of ₹ 1,500. Subscriptions in arrears on 31^st March, 2018, were ₹ 15,000.
(ii) On 31^st March, 2019, outstanding salaries were ₹ 4,000.
(iii) 8% Investments were made on 31st December, 2018.
(iv) The club owned machinery of ₹ 1,00,000 on 1^st April, 2018. Depreciate machinery @ 6% p.a.

 

VIEW SOLUTION

(i) Vayee Ltd. purchased the following assets of E.X. Ltd. :
Land and Building of ₹ 60,00,000 at ₹ 84,00,000; Plant and Machinery of ₹ 40,00,000 at ₹ 36,00,000.
The purchase consideration was ₹ 1,10,00,000. Payment was made by accepting a Bill of Exchange in favour of E.X. Ltd. of ₹ 20,00,000 and remaining by issue of 8% debentures of ₹ 100 each at a premium of 20%.
Record the necessary journal entries for the above transactions in the books of Vayee Ltd.
(ii) Zed Ltd. issued 2,00,000, 8% debentures of ₹ 100 each at a discount of 6% redeemable at a premium of 10% after 5 years. The amount was payable as follows:
On application – ₹ 50 per debenture and
On allotment – balance
Record the necessary journal entries for the issue of debentures in the books of Zed Ltd.

OR

Mahesh Ltd. had issued 20,000, 10% debentures of ₹ 100 each. 8,000, 10% debentures were due for redemption on 31^st March, 2019. The company had a balance of ₹ 4,40,000 in the Debenture Redemption Reserve Account on 31^st March, 2018. The company invested the required amount in the Debenture Redemption Investment on 1^st April, 2018.
Pass the necessary journal entries for redemption of debentures. Ignore the entries for interest on debentures. VIEW SOLUTION

(i) R.P. Ltd. forfeited 1,500 shares of Rahim of ₹ 10 each issued at a premium of ₹ 3 per share for non-payment of allotment and first call money. Rahim had applied for 3,000 shares. On these shares, amount was payable as follows:
 

On application	–	₹ 3 per shares
On allotment (including premium)	–	₹ 5 per shares
On first call	–	₹ 3 per shares
On final call	–	Balance

Final call has not been called up. 1,000 of the forfeited shares were reissued for ₹ 8,500 as fully paid-up.
Record the necessary journal entries for the above transactions in the books of R.P. Ltd.
(i) Max Ltd. forfeited 500 shares of ₹ 100 each for non-payment of first call of ₹ 20 per share and final call of ₹ 25 per share. 250 of these shares were re-issued at ₹ 50 per share fully paid-up.
Pass the necessary journal entries in the books of Max Ltd. for forfeiture and re-issue of shares. Also prepare the Share Forfeiture Account.

OR

Karur Ltd. invited applications for issuing 2,40,000 equity shares of ₹ 10 each at a premium of ₹ 4 per share. The amount was payable as under:
 

On application	– ₹ 4 per share (including premium ₹ 2)
On allotment	– ₹ 4 per share
On first and final call	– ₹ 6 per share (including premium ₹ 2)

Applications for 3,00,000 shares were received and pro-rata allotment was made to all the applicants. Excess application money received on application was adjusted towards sums due on allotment. All calls were made and were duly received except from Rohini, who failed to pay allotment and first and final call on 7,500 shares applied by her. These shares were forfeited. Afterwards, 40% of the forfeited shares were re-issued at 11 per share as fully paid-up.
Pass the necessary journal entries in the books of Karur Ltd. Open call-in-arrears and call-in-advance accounts wherever necessary. VIEW SOLUTION