Accountancy Solved Question Paper 2023 [AHSEC Class 12 Solved question Papers]

Accountancy Solved Question Paper 2023
AHSEC Class 12 Solved Question Papers

Full Marks: 80

Pass Marks: 24

Time: Three hours

The figures in the margin indicate full marks for the questions.

1. (a) Fill in the blanks with appropriate word / words: (any four) 1x4=4

(1) Equity shareholders are _______ of the company.

Ans: Owners

(2) Receipts and Payments account is a summary of _______ transactions.

Ans: Cash

(3) Maximum number of members in a partnership business is _______.

Ans: 100

(4) In the absence of any agreement, at the time of retirement of partner goodwill is to be adjusted in _______ ratio.

Ans: Old profit sharing ratio

(5) Profit and Loss A/c is also known as _______ statement.

Ans: Income statement

(b) State whether the following statements are True or False: 1x2=2

(1) A company has a separate legal entity different from its members.

Ans: True

(2) Quick Assets = Current Assets = Inventory = Prepaid Expenses.

Ans: False, Quick Assets = Current Assets - Inventory - Prepaid Expenses.

(c) Choose the correct alternative: 1x2=2

(1) The portion of the capital which can be called up only on the winding up of the company is called:

(a) Authorised capital.

(b) Uncalled capital.

(c) Reserve capital.

(d) Issued capital.

Ans: (c) Reserve capital.

(2) Donation received for a specific purpose is a:

(a) Capital Receipt.

(b) Revenue Receipt.

(c) Asset.

(d) Liability.

Ans: (a) Capital Receipt.

2. What is Registered Debenture? 2

Ans: Registered Debentures: These are debentures for which the company maintains record of debenture holders. These debentures are not transferable by mere delivery.

What is ‘Data Validation’?

Ans: Data validation is the process of checking the accuracy and consistency of data that has been or will be put into a database for further storage and processing. It helps prevent mistakes and maintain data integrity, especially in shared spreadsheets.

3. What is Goodwill of a business? 2

Ans: Goodwill: Goodwill is an intangible asset which indicates the value of the reputation of a firm. It comes into existence due to various favourable factors such as favourable location, efficient management, good quality of product and services etc. It is one factor which distinguishes an old established business from a new business. It can also be defined as the capacity of a business to earn extra income.

4. What is meant by Cash Flow from Operating Activities? 2

Ans: Operating activities are the principal revenue generating activities of the business. These are cash flows from regular course of operations such as manufacturing, trading etc. All activities that are not investing or financing activities are included under operating activities.

5. A and B are partners sharing profits and losses in the ratio of 5:3. C is admitted as a new partner for 1/4^th share, which he acquires 1/6^th from A and 1/12^th from B. Calculate the new profit sharing ratio. 2

Solution: Old profit sharing ratio of A: B = 5: 3

A’s old share = 5/8

B’s old share = 3/8

A’s sacrifice in favour of C = 1/6

B’s sacrifice in favour of C= 1/12

C’s share = 1/6 + 1/12 = 2/12 + 1/12 = 3/12 = 1/4

Now, A’s new share = 5/8 − 1/6 = (15 − 4) / 24 = 11/24

B’s new share = 3/8 − 1/12 = (9 − 2) / 24 = 7/24

New Profit Sharing Ratio: A : B : C = 11/24 : 7/24 : ¼ = 11 : 7 : 6

Mention two rights of a partner. 2

Ans: Rights of a Partner:

a) Every partner has a right to take part in the conduct and management of the business.

b) Every partner has a right to be consulted in the matters of the partnership.

6. Write two limitations of ratio analysis. 2

Ans: Limitations of Ratio Analysis

a) False Result: Ratios are calculated from the financial statements, so the reliability of ratio is dependent upon the correctness of the financial statements. If financial statements are misleading, then the accounting ratios also gives a false picture.

b) Ignores Price Level Changes: Change is price level affects the comparability of ratios. A change in the price level makes the ratio analysis of different accounting years invalid because accounting records ignores change in value of money.

Mention two limitations of financial statements. 2

Ans: Financial analysis suffers from various limitations which are given below:

a) Historical Analysis: Financial statements are historical in nature. Financial analysis is simply a rearrangement of historical data. It analysed what has happened till date but it does not reflect the future.

b) Ignores Price Level Changes: Change is price level affects the comparability of financial statements. A change in the price level makes financial analysis of different accounting years invalid because accounting records ignores change in value of money.

What is sequential code? 2

Ans: Sequential code refers to a type of programming structure where instructions are executed in a linear order, one after the other, without parallel processing.

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ALSO READ (AHSEC ASSAM BOARD CLASS 12):

1. AHSEC CLASS 12 ACCOUNTANCY CHAPTERWISE NOTES

2. AHSEC CLASS 12 ACCOUNTANCY IMPORTANT QUESTION (THEORY)

3. AHSEC CLASS 12 ACCOUNTANCY IMPORTANT QUESTION BANK (PRACTICAL)

4. AHSEC CLASS 12 ACCOUNTANCY PAST EXAM PAPERS (FROM 2012 TILL DATE)

5. AHSEC CLASS 12 ACCOUNTANCY SOLVED QUESTION PAPERS (FROM 2012 TILL DATE)

6. AHSEC CLASS 12 ACCOUNTANCY CHAPTERWISE MCQS

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7. What is the meaning of Cash Flow from Investing Activities? 2

Ans: The investing activities of a business include all cash flow arises due to acquisition and disposal of long term assets (whether tangible and intangible) and investments. Acquisition or disposal of companies also comes under investing activities. These are separately disclosed in cash flow statement.

What is meant by the term ‘Cash Equivalents’? 2

Ans: Cash Equivalents: Cash Equivalents are short-term, highly liquid investments that are readily convertible cash. Examples of cash equivalents are: (a) treasury bills, (b) commercial paper, (c) money market funds and (d) Investments in preference shares and redeemable within three months.

Write a note on ‘Queries’. 2

Ans: A query in a DBMS is a request made by a user or application to retrieve or manipulate data stored in a database. This request is typically formulated using a structured query language (SQL) or a query interface provided by the DBMS. The primary purpose of a query is to specify precisely what data is needed and how it should be retrieved or modified.

8. Write any three essential features of partnership. 3

Ans: Essential (Characteristics) of Partnership:

a) Agreement: Partnership is the result of an agreement, either written or oral, between two or more persons. It arises from contract and not from status or process of law.

b) Number of Persons: In a partnership firm there must be at least two people to form the business. Partnership Act 1932, does not specifies the maximum numbers of persons, but the Indian Company Act 2013, restricts the number of Partners to 100 for a partnership firm. But in case of limited liability partnership there is no maximum limit.

c) Business: There must be a legal business. Business includes trade, vocation and profession.

Write three distinctions between ‘Profit and Loss Account’ and ‘Profit and Loss Appropriation Account’.

Ans: Difference between Profit and loss account and Profit and loss appropriation account:

Profit and loss Account

Profit and loss appropriation account

1. It is prepared after trading account.

2. This account is prepared by every form of business organisation.

3. Items debited in profit and loss account are all expenses.

1. It is prepared after profit and loss account.

2. This account is prepared by partnership firm only.

3. Items debited in profit and loss appropriation account are all appropriations.

9. Give any three differences between equity shares and preference shares. 3

Basis of Difference	Preference Share	Equity Share
Right of Dividend	Preference shares are paid dividend before the Equity shares.	Equity shares are paid dividend out of the balance of profit available after the dividend paid to preference shareholders.
Rate of Dividend	Rate of dividend is fixed.	Rate of dividend is decided by the Board of Directors, year to year depending on profits.
Convertibility	Preference Shares may be converted into Equity shares, if the terms of issue provide so.	Equity shares are not convertible.

Explain the following terms: 3

(1) Calls-in-arrears.

Ans: Calls-in-Arrears: The amount which is not paid by shareholders when money is demanded by the company, such amount is known as ‘Calls-in-Arrears’. The maximum rate of interest to be provided on calls in arrears must not exceed 10% per annum.

(2) Calls-in-advance.

Ans: Calls-in-Advance: Sometimes, it so happens that a shareholder may pay the entire amount on his shares even though the whole amount has not been called up. The amount received in advance of calls from such a shareholder should be credited to "calls in advance". The maximum rate of interest allowed on calls in advance is 12% per annum.

Mention three uses of Spreadsheet. 3

Ans: MS-Excel now a day is the most widely used software because of its various utilities. Some of the uses of MS-Excel are stated below:

1) Data Analysis: Excels allows users to analyze data in a spreadsheet using several different formulas. Formulas can be applied to find specific data, string data together, evaluate data or transform data. It can also perform complex calculations or financial analyses.

2) Data Reporting: Excel also has the ability to analyze data into graphs by row, column or group. Data can also be conditionally formatted to assign attributes such as a color to cells within a certain range or certain value. Data can also be quickly sorted and filtered to report a specific set of values or align data in a certain order for easier viewing.

3) Data Management: Excel, at its most basic level, manages data through simple data storage in spreadsheets. Data can be stored in spreadsheets in rows, columns, groups or tables. The data can also be formatted in several ways such as dates, money values or percentages.

10. Calculate the income from subscription for the year 2021 from the following information: 3

1-1-2021 (Rs.)

31-12-2021 (Rs.)

Subscription outstanding

Subscription received in advance

3,000

4,000

2,000

5,000

Subscription received during the year 2021 Rs. 70,000.

Ans: Out of syllabus

Mention three objectives of preparing financial statements. 3

Ans: Objectives and purposes for which financial statements are prepared:

a) To provide information about economic resources and obligations of a business.

b) To provide information about earning capacity of the business and its ability to operate of profit in future.

c) To provide information that is useful in predicting the future earning power of the enterprise.

Explain Database Management System. 3

Ans: Database management system is a software which is used to manage the database. For example: MySQL, Oracle, etc are a very popular commercial database which is used in different applications. DBMS provides an interface to perform various operations like database creation, storing data in it, updating data, creating a table in the database and a lot more. It provides protection and security to the database. In the case of multiple users, it also maintains data consistency.

11. Current Liabilities of a company were Rs. 60,000 and its current ratio was 2:1 on 30^th March, 2021. On 31^st March, 2021, the company paid Rs. 20,000 to a creditor. Calculate the current ratio after the payment. 3

Ans: Before Payment,

Current Ratio = Current Assets / Current Liabilities

=> 2 : 1 = Current Assets / 60,000

=> Current Assets = 2 × 60,000

=> Current Assets = 1,20,000

After payment:

New Current Assets = 1,20,000 − 20,000 = 1,00,000

New Current Liabilities = 60,000 − 20,000 = 40,000

New Current Ratio = 1,00,000 / 40,000 = 2.5: 1

Mention three differences between ‘Capital account’ and ‘Current account’. 3

Ans: Difference between capital accounts and current Accounts:

Basic of difference	Capital Account	Current Account
1. Method	Capital Account is prepared under fixed capital method.	Current account is prepared under fluctuating capital method.
2. Transactions recorded	In capital account only capital introduced and withdrawn is recorded.	All order transactions between the firm and partners is recorded in the current account.
3. Interest	Interest is sometimes paid on capital account.	No such interest is payable on current account balances.

Describe three features of the Spreadsheet. 3

Ans: Features of Spreadsheet:

a. Cells and Worksheets: Data is entered in rows and columns called cells, which helps in organizing information neatly.

b. Formulas and Functions: Built-in formulas perform calculations automatically, saving time and reducing errors.

c. Formatting and Charts: Data can be formatted and shown using charts and graphs for better understanding.

12. Prepare a Comparative Income Statement from the following particulars: 6

Particulars

2020 (Rs.)

2021 (Rs.)

Gross Sales

Sales Returns

Cost of Goods Sold

Operating Expenses

Income Tax

1,20,200

10,400

80,000

24,000

50%

1,35,800

7,600

84,000

18,000

50%

Solution:

Comparative Income Statement

Particulars	2020 (₹)	2021 (₹)	Absolute Change (₹)	Percentage Change (%)
Gross Sales	1,20,200	1,35,800	15,600	12.98
Less: Sales Returns	10,400	7,600	(2,800)	(26.92)
1. Net Sales	1,09,800	1,28,200	18,400	16.76
2. Less: Cost of Goods Sold	80,000	84,000	4,000	5.00
3. Gross Profit (1 - 2)	29,800	44,200	14,400	48.32
4. Less: Operating Expenses	24,000	18,000	(6,000)	(25.00)
5. Net Profit Before Tax (3 - 4)	5,800	26,200	20,400	351.72
6. Less: Income Tax (50%)	2,900	13,100	10,200	351.72
7. Net Profit After Tax (5 - 6)	2,900	13,100	10,200	351.72

What is meant by analysis of financial statements? Explain in brief the tools of financial analysis. 1+5=6

Ans: Financial Statement Analysis: It is the process of identifying the financial strength and weakness of a firm from the available accounting information and financial statements. The analysis is done by properly establishing the relationship between the items of balance sheet and profit and loss account.

Ans: Tools of financial Statement analysis: The main objective of financial analysis to determine the financial health of a business enterprise. The analysis may be done with the help of following tools

a) Comparative Statements: These are the statements showing the profitability and financial position of a firm for different periods of time in a comparative form to give an idea about the position of two or more periods. It usually applies to the two important financial statements, namely, balance sheet and statement of profit and loss prepared in a comparative form. The financial data will be comparative only when same accounting principles are used in preparing these statements. If this is not the case, the deviation in the use of accounting principles should be mentioned as a footnote. Comparative figures indicate the trend and direction of financial position and operating results. This analysis is also known as ‘horizontal analysis’.

b) Common Size Statements: Common size statement is a statement in which amounts of individual item of balance sheet and profit and loss account for one or more years are expressed in terms of percentage of a common base. The common base can be net sales in the case of profit and loss account and total of balance sheet for the balance sheet.

c) Trend Analysis: Trend analysis is an important tool of horizontal financial analysis. This is helpful in making a comparative study of the financial statements over several years. Under these method trend percentages are calculated for each item of the financial statements taking the figure of base year as 100. Normally the starting year is taken as the base year. The trend percentages show the relationship of each item with its preceding year’s percentages.

d) Ratio analysis: A Ratio is an arithmetical expression of relationship between two related or interdependent items. If such ratios are calculated on the basis of accounting information, then they are called accounting ratios. Simply, accounting ratio is an expression of relationship between two accounting terms or variables or two set of accounting heads or group of items stated in financial statement. It is one of the techniques of financial analysis which is used to evaluate the operating efficiency and financial position of a business concern.

e) Cash Flow Statement: Cash flow is made up of two words i.e. Cash and Flow, whereas Cash means cash balance in hand including cash at bank, and Flow means changes (which may be increase or decrease) in the cash movements of the business. So, Cash Flow Statement is a statement which shows the movement of cash and cash equivalents over a particular period of time and also analyses the reasons for changes in balance of cash in hand and at bank between two accounting period. It shows the inflows and outflows of cash and cash equivalents.

Give the limitations of computerised accounting system. 6

Ans: Disadvantages of Computerized Accounting

a. Costly: The computerized accounting is a costly system as it requires number of facilities and attachments to set up the system. This includes the computer, printers, scanner and other related accessories.

b. Chances of Loss of data: When a computer is used, it is possible that data can be lost because of hardware or software damage.

c. Fraud and embezzlement: Fraud and embezzlement are usually achieved on a computer system by altering data or programs. There are numerous techniques, varying from additions and deletions to input data, through changing the standing information, files, modifying the behavior of programs, to duplicating or suppressing output.

d. Obsolescence: Obsolescence is a major problem in computer industry. Information technology industry follows the culture of ‘here today, gone tomorrow.’ Even the latest hardware and software purchased today may become outdated very soon. The latest version of the software provides more facilities as compared to the previous versions. This creates a problem of software up gradation.

e. Dependence on computer staff: In the computerized accounting system, the organizations depend upon the computer staff for maintaining the accounting. In the absence of computer literates for some reason in the organization, it may pose a problem to run the accounting software.

f. Inability to Check Unanticipated Errors: Since the computers lack capability to judge, they cannot detect unanticipated errors as human beings commit.

13. What is meant by issue of debentures as Collateral Security? Mention four differences between shares and debentures. 2+4=6

Ans: When debentures are issued as security in addition to any other security against a loan or bank overdraft such an issue of debentures is known as issue of debentures as collateral security. The use of such an issue is that if the company does not repay the loan and the interest and the main security is not sufficient, the bank will be entitled to sell the debentures in the market or the bank may keep the debentures with it. If the company repays the loan, the bank will return the debentures issued as collateral security to the company.

Difference between Shares and Debentures

Basis of Difference	Shares	Debentures
Ownership	Shareholders are the owners of the Company.	Debenture holders are the Creditors of the Company.
Repayment	Normally, the amount of share is not returned during the life of the company.	Debentures are issued for a definite period.
Convertibility	Shares cannot be converted into debentures.	Debentures can be converted into shares.
Restrictions	Dividend is paid to the shareholders as an appropriation of profit.	Interest is paid to the debenture holders as a charge against profit.
Forfeiture	Shares can be forfeited for non-payment of allotment and call monies.	Debentures cannot be forfeited for non-payment of call monies.

Explain the objectives of Database Management System (DBMS)? 6

Ans: Need and Objectives of Database Management System (DBMS):

a) To store data in an organized and systematic manner for easy access and management.

b) To reduce data redundancy and avoid inconsistency by maintaining a centralized database.

c) To ensure data security by restricting unauthorized access to the database.

d) To maintain data integrity and accuracy during insertion, deletion, and updating of data.

e) To allow multiple users to access data concurrently without conflicts.

f) To provide backup and recovery facilities to prevent data loss.

g) To support efficient data retrieval, manipulation, and processing.

Give Journal entries for issue and redemption of debentures under the following situations: 2x3=6

(a) 1,000 12% debentures of Rs. 100 each, issued at premium of 5% and redeemable at par.

(b) 2,000, 12% debentures of Rs. 100 each, issued at 5% discount and redeemable at a premium of 5%.

(c) 3,000, 12% debentures of Rs. 100 each, issued at par and redeemable at a premium of 5%.

Ans:

Journal Entries

In the books of ________

No.

Particulars

L/f

Amount Dr.

Amount Cr.

At the time of Issue

Bank A/c Dr.

To 12% Debentures A/c

To Securities Premium Reserve A/c

(Being the 1000 12% Debentures of Rs. 100 each issued at a premium of 5%, but redeemed at par)

1,05,000

1,00,000

5,000

At the time of Redemption

12% Debentures A/c Dr.

To Bank A/c

(Being the 1000 12% Debentures of Rs. 100 each redeemed at par)

1,00,000

At the time of Issue

Bank A/c Dr.

Loss on issue of Debentures A/c Dr.

To 12% Debentures A/c

To Premium on Redemption of Debentures A/c

(Being the 2000 12% Debentures of Rs. 100 each issued at a discount of 5%, but redeemed at a premium of 5%)

1,90,000

20,000

2,00,000

10,000

At the time of Redemption

12% Debentures A/c Dr.

Premium on Redemption of Debentures A/c Dr.

To Bank A/c

(Being the 2000 12% Debentures of Rs. 100 each redeemed at a premium of 5%)

2,00,000

10,000

2,10,000

At the time of Issue

Bank A/c Dr.

Loss on issue of Debentures A/c Dr.

To 12% Debentures A/c

To Premium on Redemption of Debentures A/c

(Being the 3000 12% Debentures of Rs. 100 each issued at par, but redeemed at a premium of 5%)

3,00,000

15,000

3,00,000

15,000

At the time of Redemption

12% Debentures A/c Dr.

Premium on Redemption of Debentures A/c Dr.

To Bank A/c

(Being the 3000 12% Debentures of Rs. 100 each redeemed at a premium of 5%)

3,00,000

15,000

3,15,000

14. A, B and C were in partnership sharing profit and losses equally. On 31^st December, 2021 their Balance Sheet was as follows: 6

Balance Sheet

Liabilities

Rs.

Assets

Rs.

Capital:

A = 10,000

B = 5,000

C = 5,000

Reserve Fund

Creditors

20,000

3,300

2,000

Plant and Machinery

Stock

Sundry Debtors

Cash at Bank

Cash in Hand

10,000

4,000

6,000

5,000

300

25,300

The firm took a joint life policy for Rs. 9,000 payables on the first death.

C died on 31^st March, 2022. Under the partnership agreement the executors of a deceased partner were entitled to:

(1) Amount standing to the credit of deceased partner’s capital account.

(2) His share of goodwill on the basis of twice the average of the past three years’ profits.

(3) Share of profit from the closing of the last financial year to the date of death on the basis of last year’s profits.

(4) Interest on capital @ 5% p.a.

(5) Profits for the last three years were:

2019 = Rs. 6,000.

2020 = Rs. 8,000.

2021 = Rs. 7,000.

Prepare C’s capital account on the date of his death.

Ans:

C’s Capital A/c

Particulars

Amount

Particulars

Amount

To C’s Executors A/c

14,412.5

By Balance b/d

By Reserve Fund (3,300*1/3)

By Interest on capital

(5,000*5%*3/12)

By A’s capital A/c

By B’s capital A/c

By P/L Suspense A/c

(7,000*3/12*1/3)

By Joint Life Policy

5,000

1,100

62.5

2,333

2,334

583

3,000

14,412.5

W/N: Calculation of Babatu’s share of goodwill

(i) Average profit = (6,000+8,000+7,000)/3 =7,000

Goodwill = 7,000*2 = 14,000

C’s Share of Goodwill = 14,000*1/3 = 4,667

A’s contribution = 4,667*1/2 = 2,333

B’s Contribution = 4,667*1/2 = 2,334

Prepare Income and Expenditure A/c from the following Receipts and Payments A/c and other details of ‘Parizat’ club for the year ended 31^st December, 2021: 6 Out of syllabus

Receipts and Payments Account

Receipts

Rs.

Payments

Rs.

To Cash-in-hand on 1-1-21

To Subscription received

To Entrance Fee

To Donations

To Donation for Club House

To Life Membership Fee

To Maintenance Grant

To Capital Grant

To Sale of Furniture

10,000

20,000

10,000

18,000

17,000

5,000

6,000

7,000

1,000

By Salaries

By Rent and Taxes

By Electric Charges

By Sports Goods Purchased

By Postage

By Construction of Club House

By Sundry Expenses

By Payment of Outstanding Expenses

Cash in hand on 31-12-21

12,000

6,000

3,000

25,000

5,000

36,000

2,000

500

4,500

94,000

Other details:

(1) Total of Entrance Fee and Life Membership Fee are to be capitalised.

(2) Depreciation on Sports Goods is Rs. 2,500.

(3) Book value of the furniture sold was Rs. 1,500 on the date of sale.

How would you compute the amount due to a retiring partner? 6

Ans: Calculation of amount due to the retiring partner: The amount due to the retiring partner is paid according to the terms of partnership agreement. Amount due to the retiring partner is determined by preparing capital account of the retiring partner. Retiring partner’s capital account is debited with:

(a) The credit balance of Capital Account;

(b) His/her share in the Goodwill of the firm;

(d) His/her share in General Reserve and Accumulated Profit;

(e) His/her share of profit till the date of his retirement.

(f) Interest on Capital, partner’s salary and commission.

But, the following items are debited in capital account to find amount due:

(a) His/her share in the Revaluation loss.

(b) His/her Drawings and Interest on Drawings up to the date of retirement.

(d) Loan taken from the firm.

Payment of amount due to the retiring partners

The total amount so calculated is the claim of the retiring partner. He/she is interested in receiving the amount at the earliest. Total payment may be made immediately after his/her retirement. However, the resources of the firm may not be adequate to make the payment to the retiring partner in lump sum, then firm makes payment to retiring partner in installments together with interest.

15. Sunu, Nanu and Nidhi are partners in a firm sharing profits in the ratio of 2 : 1 : 1. Their Balance Sheet as on 31^st March, 2021 was as under: 6

Balance Sheet

Liabilities

Rs.

Assets

Rs.

Creditors

Capital:

Sunu = 80,000

Nanu = 80,000

Nidhi = 60,000

50,000

2,20,000

Land and Building

Plant and Machinery

Furniture

Motor Car

Debtors

Cash

80,000

56,000

30,000

54,000

48,000

2,000

2,70,000

The firm was dissolved on the above date. The assets realised as follows:

Furniture = Rs. 20,000.

Land and Building = Rs. 1,00,000.

Plant and Machinery = Rs. 50,000.

Motor Car = Rs. 28,000

Debtors = 50% of Book Value.

Realisation Expenses were Rs. 2,000.

Prepare Realisation A/c, Partner’s Capital A/c and Cash A/c to close the books of the firm.

Ans:

Realisation A/c

Particular

Amount

Particulars

Amount

To Land and Building

To Plant and Machinery

To Furniture

To Motor Car

To Debtors

To Cash (Payment of Creditors)

- To Cash (Exp)

80,000

56,000

30,000

54,000

48,000

50,000

2,000

By S/creditors

By Cash (Realisation of assets)

- Furniture = 20,000

- Land & Building =1,00,00

- P/M =50,000

- Motor car = 28,000

- Debtors = 24,000

- By Loss on Realisation

- Sunu = 48,000*2/4

- Nanu = 48,000*1/4

- Nidhi = 48,000*1/4

50,000

2,22,000

24,000

12,000

3,20,000

Partner’s Capital A/c

Sunu

Nanu

Nidhi

Sunu

Nanu

Nidhi

To Realisation (Loss

on realisation)

To Cash (Final Payment)

24,000

56,000

12,000

68,000

12,000

48,000

By Balance b/d

80,000

60,000

80,000

60,000

80,000

60,000

Cash A/c

Particular

Amount

Particulars

Amount

To Balance b/d

To Realisation A/c (Assets Realised)

2,000

2,22,000

By Realisation A/c (Liabilities paid off)

By Realisation A/c (Exp.)

By Sunu’s Capital A/c

By Nanu’s Capital A/c

By Nidhi’s Capital A/c

50,000

2,000

56,000

68,000

48,000

2,24,000

Write the situations when a partnership firm is dissolved by the court. 6

Ans: Dissolution by Court (Sec. 44): A court may order a partnership firm to be dissolved in the following cases:

a) When a partner becomes of unsound mind.

b) When a partner becomes permanently incapable of performing his/her duties as a partner.

c) When partner deliberately and consistently commits breach of partnership agreement.

d) When a partner’s conduct is likely to adversely affect the business of the firm.

e) When a partner transfers his/her interest in the firm to a third party;

f) When the business of the firm cannot be carried on except at a loss in future also.

g) When the court considers it just and equitable to dissolve the firm. The following are the cases for the just and equitable grounds:

1. Deadlock in the management.

2. Where the partners are in talking terms between them.

3. Loss of substratum.

4. Gambling by a partner on a stock exchange.

16. Amlan Co. Ltd. issued 50,000 equity shares of Rs. 10 each at a premium of Rs. 2 each, payable as under: 8

On Application = Rs. 2.

On Allotment = Rs. 5 (including premium).

On First and Final Call = Rs. 5.

The shares were fully subscribed, called up and paid-up except allotment and call money on 500 shares. These shares were forfeited. Give journal entries in the books of the company.

Ans:

Journal Entries

In the books of Amlan Co. Ltd.

Particulars

L.F.

Dr. (Rs.)

Cr. (Rs.)

Bank A/c Dr.

To Equity Share Application A/c

(Being application money received on 50,000 shares @ Rs. 2 each)

1,00,000

Equity Share Application A/c Dr.

To Equity Share Capital A/c

(Being application money on 50,000 shares @ Rs. 2 each transferred to Equity Share Capital Account)

1,00,000

Equity Share Allotment A/c Dr.

To Equity Share Capital A/c

To Securities Premium Reserve A/c

(Being the allotment money due on 50000 shares @ Rs. 5 per share including premium of Rs. 2 per share)

2,50,000

1,50,000

1,00,000

Bank A/c Dr.

Calls in Arrear A/c Dr.

To Equity Share Allotment A/c

(Being the balance allotment money received on 49500 shares)

2,47,500

2,500

2,50,000

Equity Share First and Final Call A/c Dr.

To Equity Share Capital A/c

(Being first and final call money due on 50000 shares @ Rs. 5 each)

2,50,000

Bank A/c Dr.

Calls-in-Arrear A/c Dr.

To Equity Share First and Final Call A/c

(Being first and final call money received on 49500 shares @ Rs. 5 per share. Money not received on 500 shares has been transferred to Call-in-Arrear Account)

2,47,500

2,500

2,50,000

Equity Share Capital A/c [500 x 10] Dr.

Securities Premium Reserve A/c Dr.

To Calls-in-Arrear A/c

To Forfeited Shares A/c

(Being the forfeiture of 500 equity shares for non-payment of allotment money of Rs. 5 including premium of Rs. 2 per share and first and final call @ Rs. 5 each)

5,000

1,000

5,000

1,000

Write short notes on: (any four) 2x4=8

(a) Securities Premium.

Ans: If Shares are issued at a price, which is more than the face value of shares, it is said that the shares have been issued at a premium. The Company Act, 2013 does not place any restriction on issue of shares at a premium but the amount received, as premium has to be placed in a separate account called Securities Premium Account.

(b) Over Subscription.

Ans: When the number of shares applied is more than the number of shares issued by a company, the issue of shares is said to be oversubscribed. The company cannot allot shares more than those offered for subscription. In case of over-subscription, there are three possibilities arise:

(a) Some applicants may not be allotted any shares. This is known as ‘rejection of applications’.

(b) Some applicants may be allotted less number of shares than they have applied for. This is known as partial or pro-rata allotment.

(c) Re-issue of forfeited shares.

Ans: Ans: After forfeiture of shares, the directors of the company can re-issue the forfeited shares at par, or at premium or at discount to maintain its equity capital balance. The forfeited shares may then be disposed by sale or in any other manner as directed by the Board.

(d) Unissued Capital.

Ans: Issued capital is that part of the nominal capital, which is offered to the public for subscription. The balance of the nominal capital, which is not offered to the public for subscription, is called unissued capital.

(e) Current asset.

Ans: Current assets are those which are changed or converted into cash within one accounting year. Current Assets includes Cash in hand, Cash at Bank, Sundry Debtors, Bills Receivable, Stock of Goods, Short-term Investments, Prepaid Expenses, Accrued Incomes etc.

(f) Income Statement.

Ans: Profit and loss account or income statement: Income statement is one of the financial statements of business enterprises which shows the revenues, expenses, and profits or losses of business enterprises for a particular period of time. Its main aim is to show the operating efficiency of the enterprises.

Explain the steps involved in Computerised Accounting System in detail. 8

Ans:

17. (a) Explain the average profit method of valuation of goodwill. 3

Ans: Average Profits Method: In this method, Actual maintainable profits of business over a number of years are taken into account. Actual maintainable profits earned over a number of years are totalled and average is determined by dividing total with number of years. The average profits so determined are multiplied by the number of year’s purchases to arrive at the value of goodwill.

For calculation of goodwill following steps are to be followed

a) Calculate Actual maintainable profits with the help of following formula. Actual maintainable profits = Net Profit + Abnormal loss – Abnormal Gain – regular business expenses not considered in accounts.

b) Calculate Average Maintainable Profit = Total Actual maintainable profits /no of years.

c) Calculate goodwill = Average maintainable Profit x no. of year’s purchase

(b) What is revaluation account? 2

Ans: Revaluation Account: At the time of reconstitution of partnership, it is necessary to revalue the assets and liabilities of the firm because the book value of the assets and liabilities as shown in balance sheet may be different from their market value. To record any decrease or increase in the value of assets and liabilities, a separate nominal account is prepared which is called revaluation account. The Revaluation account is credited if there is an increase in the value of assets, decrease in the value of liabilities and unrecorded assets.

(c) How the adjustment of capitals is made at the time of admission of a new partner? 3

Ans: Ans: At the time of admission of a new partner, it is often agreed that the capital of all partners should be adjusted in proportion to their new profit-sharing ratio. For this, the capital accounts of the existing partners are first adjusted after accounting for goodwill, general reserve, revaluation of assets, and liabilities. After these adjustments, the revised capital of each partner is compared with the capital they should maintain in the reconstituted firm. The excess, if any, may be withdrawn or transferred to the current account, and the deficiency, if any, is either brought in by the partner or adjusted through the current account. There are two main methods for making this capital adjustment:

1. Based on New Partner’s Capital (When new partner’s capital is given):

Under this method, the total capital of the new firm is determined on the basis of the capital brought in by the new partner and his share in the profit. Once the total capital of the firm is known, the capital of the existing partners is calculated according to the new profit-sharing ratio. These calculated capital amounts are then compared with their actual adjusted capital balances. If a partner’s existing capital is more than what it should be, the excess is either withdrawn or credited to his current account. If the capital is less, the partner has to bring in the shortfall or debit his current account.

2. Based on Existing Partners’ Capital (When new partner’s capital is not given):

In this method, the total capital of the firm is taken as the combined adjusted capital of the existing partners, after all necessary adjustments. Based on this total and the new profit-sharing ratio, the capital required from the new partner is calculated. The new partner is then asked to bring in an amount proportionate to his share of profit. This ensures that after admission, all partners (including the new one) have capital balances that are in line with the agreed profit-sharing ratio.

Nitul and Atul are partners in a firm sharing profits in the ratio 2:1. Pranjal is admitted into the firm as a new partner with 1/4^th share in profits. He will bring Rs. 30,000 as his capital. The Balance Sheet of Nitul and Atul as on 31-3-2020 was as under: 8

Balance Sheet

Liabilities

Rs.

Assets

Rs.

Creditors

Bills Payable

General Reserve

Capital:

Nitul = 52,000

Atul = 30,000

8,000

4,000

6,000

82,000

Cash

Debtors

Stock

Furniture

Machinery

Building

12,000

8,000

10,000

5,000

25,000

40,000

1,00,000

Other terms of the agreement are as under:

(1) Pranjal will bring in Rs. 12,000 as his share of goodwill.

(2) Building was valued at Rs. 45,000 and Machinery at Rs. 23,000.

(3) A reserve for bad debt is to be created at 6% on debtors.

Prepare Revaluation A/c, Partner’s Capital A/c and the Balance Sheet of the new firm.

Ans:

Revaluation A/c

Particulars

Amount

Particulars

Amount

To Machinery

To Provision for d/d

To Profit on Revaluation

- Nitul

- Atul

2,000

480

1,680

840

By Building

5,000

35,000

Partner’s Capital A/c

Particulars

Nitul

Atul

Pranjal

Particulars

Nitul

Atul

Pranjal

To Balance c/d

65,680

36,840

30,000

By Balance b/d

By Cash A/c

By Premium for

goodwill

By Reserve

By Revaluation

52,000

8,000

4,000

1,680

30,000

4,000

2,000

840

30,000

65,680

36,840

30,000

65,680

36,840

30,000

Balance Sheet of New Firm

As on 31-03-2020

Liabilities

Amount

Assets

Amount

Sundry creditors

Bills payable

Capital:

Nitul

Atul

Pranjal

8,000

4,000

65,680

36,840

30,000

Cash

Debtors 8,000

Less: Provision for d/d 480

Stock

Furniture

Machinery

Building

54,000

7,520

10,000

5,000

23,000

45,000

1,44,520

18. Amit and Aditya are partners in a firm sharing profits and losses in the ratio of 3:1. The Trial Balance of the firm as on 31^st December, 2022 was as under: 8

Trial Balance

Debit

Rs.

Credit

Rs.

Machinery

Salaries

Carriage outward

Building

Furniture

Debtors

Bad Debts

Cash at Bank

Investment

Cash in hand

Establishment charges

Closing Stock

Depreciation on Machinery

Publicity

Drawings:

Amit = Rs. 5,000

Aditya = Rs. 3,000

Rent and Rates

35,000

15,850

2,140

54,000

25,000

48,200

1,400

1,200

10,000

1,170

13,000

10,000

3,500

5,000

8,000

5,500

Capital:

Amit = Rs. 50,000

Aditya = Rs. 30,000

Trading A/c:

Gross Profit

Creditors

Bank Loan

Discount

Commission

Outstanding Wages

Provisions for Doubtful Debts

80,000

85,700

44,560

21,000

4,500

1,000

1,200

1,000

2,38,960

Additional Information:

(1) Prepaid publicity Rs. 500.

(2) Commission received in advance Rs. 200.

(3) Provide for doubtful debts @ 5% on Sundry Debtors.

(4) Allow interest on partner’s capital @ 5% p.a.

From the above Trial Balance and additional information, prepare a Profit and Loss A/c, a Profit and Loss Appropriation A/c for the year ended 31^st December, 2022 and a Balance Sheet as on that date.

Ans:

Profit & Loss Account

For the year ended 31st December, 2022

Particulars	Amount (Rs.)	Particulars	Amount (Rs.)
To Salaries	15,850	By Gross Profit b/d	85,700
To Carriage outward	2,140	By Discount	4,500
To Bad Debts	1,400	By Commission (1,000 - 200 Advance)	800
To Establishment charges	13,000	By Provision for Doubtful Debts (Old)	1,000
To Depreciation on Machinery	3,500
To Publicity (5,000 - 500 Prepaid)	4,500
To Rent and Rates	5,500
To Provision for Doubtful Debts (New)	2,410
To Net Profit (Trf. to P&L App. A/c)	43,700
Total	92,000	Total	92,000

Profit & Loss Appropriation Account

For the year ended 31st December, 2022

Particulars	Amount (Rs.)	Particulars	Amount (Rs.)
To Interest on Capital:		By Net Profit b/d	43,700
Amit (50,000 x 5%)	2,500
Aditya (30,000 x 5%)	1,500
To Share of Profit (3:1):
Amit (39,700 x 3/4)	29,775
Aditya (39,700 x 1/4)	9,925
Total	43,700	Total	43,700

Partner’s Capital Account

Particulars	Amit (Rs.)	Aditya (Rs.)	Particulars	Amit (Rs.)	Aditya (Rs.)
To Drawings	5,000	3,000	By Balance b/d	50,000	30,000
To Balance c/d	77,275	38,425	By Int. on Cap.	2,500	1,500
			By P/L App. A/c	29,775	9,925
Total	82,275	41,425	Total	82,275	41,425

Balance Sheet

As on 31st December, 2022

Liabilities	Amount (Rs.)	Assets	Amount (Rs.)
Capital Accounts:		Machinery	35,000
Amit	77,275	Building	54,000
Aditya	38,425	Furniture	25,000
Sundry Creditors	44,560	Debtors (48,200 - 2,410 Prov.)	45,790
Bank Loan	21,000	Cash at Bank	1,200
Outstanding Wages	1,200	Investment	10,000
Commission in Advance	200	Cash in hand	1,170
		Closing Stock	10,000
		Prepaid Publicity	500
Total	1,82,660	Total	1,82,660

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Accountancy Solved Question Paper 2023 [AHSEC Class 12 Solved question Papers]