CBSE Accounts Sample Paper - 4 (2018-19) Notes | Study Sample Papers for Class 12 Commerce - Class 12

Class 12: CBSE Accounts Sample Paper - 4 (2018-19) Notes | Study Sample Papers for Class 12 Commerce - Class 12

The document CBSE Accounts Sample Paper - 4 (2018-19) Notes | Study Sample Papers for Class 12 Commerce - Class 12 is a part of the Class 12 Course Sample Papers for Class 12 Commerce.
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CBSE SAMPLE PAPER 04
 Class – XII ACCOUNTANCY


Time allowed :3 hours, Max Marks 80

 General Instructions:
 a) This question paper contains two parts A and B.
 b) Part A is compulsory for all.
 c) Question 1 to 6 in Section A carrying 1 marks.
 d) Question 7 to 10 in Section A carrying 3 marks.
 e) Question 11 and 12 in Section A carrying 4 marks.
 f) Question 13 to 15 in Section A carrying 6 marks.
 g) Question 16 and 17 in Section A carrying 8 marks.
 h) Part B has two options-Financial statements Analysis and Computerized Accounting.
 i) Question 18 and 19 in Section B carrying 1 mark.
 j) Question 20 to 22 in Section B carrying 4 marks.
 k) Question 23 in Section B carrying 6 marks.
 l) Attempt only one option of Part B.
 i) All parts of a question should be attempted at one place.

Part – A
 Partnership, Share Capital and Debentures



Question 1. Vinod and Yuvraj are partners in a firm without a partnership deed. Vinod’s Capital is Rs.10,000 and Yuvraj’s capital is Rs.14,000. Yuvraj has advanced a loan of Rs.5,000 and claims interest @ 12% p.a. on it. State with reasons whether his claim is valid or not.
 Solution 1
. Claim of Vinod is not valid because in the absence of partnership deed, interest on partner’s loan will be given @ 6% p.a.

Question 2. Vinod and Himesh are equal partners. What two main steps they should use in the calculation of goodwill according to the Super Profit Method?
 Solution 2. 
Two main steps involved in the calculation of goodwill are:
 i. Calculation of Average Profit
 ii. Calculation of Super Profit i.e. Average Profit – Normal Profit

Question 3. Vinay and Vinod were partners in a firm sharing profits in 3:2 ratio. From 1st March, 2016, they decided to change it to 3:1. For this purpose the goodwill of the firm was valued at Rs.1,20,000. Give necessary journal entry for the treatment of goodwill.
 Solution 3.
Vinay’s Capital A/c Dr. 18,000
 To Vinod’s Capital A/c 18,000
 (Being adjustment made for goodwill at the time of change in ratio)
 Note: Goodwill adjustment amount = 1,20,000 x 3/20 = 18,000

Question 4. A, B and C were partners sharing profits in the ratio of 5:3:2. B retired on 1st January, 2006 with A and C agreeing to share the profits in future in the ratio of 6:4. Find the Gaining Ratio.
 Solution 4. 
Old Share of A and C = 5 : 2
 New Share of A and C = 6:4 (given)
 Gain Ratio = A = 6/10 – 5/10 = 1/10
 C = 4/10 – 2/10 = 2/10

Question 5. State the steps other than rejecting applications that a company can take in case of over subscription.
 Solution 5. 
A company can exercise the following options:
 i. To make pro rata allotment to the applicants
 ii. Company may reject some applications and make pro rata allotment to the remaining
 applicants.

Question 6. As per the new guidelines of the Companies Act, 2013, what minimum amount of profit is required to be transferred to the Debenture Redemption Reserve before redemption?
 Solution 6. As per the new guidelines of the Companies Act, 2013, minimum 25% amount of
 the profit is required to be transferred to the Debenture Redemption Reserve before
 redemption.

Question 7. What is meant by Minimum Subscription?
Solution 7.
 Minimum subscription can be described as follows: As per the section 39 of the Companies Act, 2013, Minimum subscription is that
 amount which company must receive through the subscription of shares issued by the company. As per the SEBI’s guidelines, a company must receive 90% subscription of the issued share capital before making allotment of shares/debentures to the applicants. In case of less than 90% Subscription Company may cancel the issue and refund the
 money the applicants.

Question 8. AK and BK were sharing profits in the ratio of 3:2. They decided to admit CK into the partnership for 1/6th share of the future profits. Goodwill was valued at 4 times the average super profit of the firm was Rs.18,000. The firm had assets worth Rs.15,00,000 and Liabilities Rs.12,00,000. The Normal earning capacity of such firms is expected to be 10% p.a. You are required to ascertain the Average Profit or Actual Profit earned by the firm during the last 4 years.
 Solution 8.
Goodwill (given) = 18,000
 Goodwill is calculated by = Super Profit x 4
 i.e. 18,000 = Super Profit x 4
 Super Profit = 18,000/4 = 4,500
 Capital Employed = Assets – Liabilities
 i.e. 3,00,000 = 15,00,000 – 12,00,000

Question 9. Complete the following journal entries by filling the blank spaces when Vinod Limited forfeited 200 shares of Rs.20 each, Rs.15 per share called up on which Rs.10 per share had been paid

Date

Particulars

L.F.

Debit

Credit

 

............................ A/c Dr.

To..................... A/c

To Calls in Arrears A/c

(Being 200 shares forfeited for not paying the call money Rs.5

per share)

............................. A/c  Dr.

............................. A/c. Dr.

To......................... A/c

(Being 200 forfeited   shares reissued as Rs.15 per share paid for

payment of Rs.10 each)

............................. A/c. Dr.

To......................... A/c

(Being gain on reissue transferred to capital reserve)

 

3,000

3,000

Solution 9. Journal Entries

 

Date

Particulars

L.F.

Debit

Credit

 

 

Share Capital A/c Dr.

To Share Forfeiture A/c

To Calls in Arrears A/c

(Being 200 shares forfeited for not paying the call money Rs.5 per

 

3,000

2,000

 

 

share)

Bank A/c Dr.

 

2,000

1,000

 

 

Share Forfeiture A/c Dr.

 

1,000

3,000

 

 

To Share Capital A/c

(Being 200 forfeited shares reissued as Rs.15 per share paid for payment of Rs.10 each)

 

1,000

1,000

 

Share Forfeiture A/c Dr.

To Capital Reserve A/c

(Being gain on reissue transferred to capital reserve)

 

 

 

 

Question 10. The authorised capital of Vinod Limited is Rs.45,00,000 divided into 30,000 shares of Rs.150 each. Out of these, company issued 15,000 shares of Rs.150 each at a premium of Rs.10 per share. The amount was payable as follows:
 Rs.50 per share on application
 Rs.40 per share on allotment (including premium)
 Rs.30 per share on first call
 Balance on final call
 Public applied for 14,000 shares.
 All the money was duly received.
 Prepare company’s balance sheet (extract) as per Schedule III of the Companies Act, 2013 and also prepare Notes to Accounts.
 Solution 10. Balance Sheet

Particulars

Note No.

Amount

EQUITY AND LIABILITIES

Shareholders’ Funds

1

21,00,000

  1. Share Capital
  2. Reserves and Surplus

2

1,40,000

Total

 

22,40,000

ASSETS

 

 

Current Assets

3

22,40,000

Cash and Cash Equivalents

 

 

 

 

22,40,000

Notes  to  Accounts

Particulars

Amount

Share Capital

Authorised Capital

  1. Equity Shares of Rs.150 each

Issued Capital

  1. Equity Shares of Rs.150 each

Subscribed Capital

  1. Equity Shares of Rs.150 each

Reserves and Surplus

Securities Premium Reserve

Cash and Cash Equivalents

  1. 000

22.50.000

  1. 000

1.40.000

22.40.000


Question 11. The following is the Balance Sheet of A, B and C as on 31st March 2014:

Liabilities

Amount

Assets

Amount

 

Sundry Creditors

4,500

Cash in hand

300

 

Cash at bank

7,500

 

Reserve Fund

4,800

Stock

 

9,000

 

Capitals: A

15,000

Debtors

 

9,000

 

B

7,500

Furniture

 

12,000

 

C

7,500

 

 

 

Loose Tools

1,500

 

 

39,300

 

39,300

 


C died on 30th June, 2014. Under the terms of Partnership Deed, the executors of the deceased
 partner were entitled to:
 i. Amount standing to the credit of Partner’s Capital Account.
 ii. Interest on Capital @ 6% per annum.
 iii. Share of goodwill on the basis of twice the average of past three years profits.
 iv. Share of profit from the closing of last financial year to the date of death on the basis of last year’s profit. The profit of the last three years were as follows:
 Year Profits
 2011-12 9,000
 2012-13 10,500
 2013-14 12,000
 The firm closes its books on 31st March every year. The partners shared profits in the ratio of their capitals. Prepare C’s Capital Account to be presented to her executors
Solution 11.
C’s Capital Account

Particulars

Amount

Particulars

Amount

To C’s Executor’s A/c

(Bal. fig.)

14,813

By Balance b/d

By Interest on Capital

By Reserve Fund

By A’s Capital A/c

By C’s Capital A/c

By Profit and Loss Suspense

7.500

1,200

113

3.500

1,750

750

 

14,813

 

14,813

Important Notes:
 1. Goodwill = 9,000 + 10,500 + 12,000 = 31,500/3 = 10,500 x 2 = 21,000
 2. Interest on capital = 7,500 x 6/100 x 3/12 = 113
 3. C’s Share of profit = 12,000 x 3/12 x 1/4 = 750

Question 12. Satnam and Qureshi after doing their MBA decided to start a partnership firm to manufacture ISI marked electronic goods for economically weaker section of the society. Satnam also expressed his willingness to admit Julie as a partner without capital who is specially abled but a very creative and intelligent friend of him. Qureshi agreed to this. They formed a partnership on 1st April,2014 on the following terms:
 i. Satnam will contribute Rs.4,00,000 and Qureshi will contribute Rs.2,00,000 as capitals.
 ii. Satnam, Qureshi and Julie will share profits in the ratio of 2:2:1.
 iii. Interest on capital will be allowed @ 6% p.a.
 Due to shortage of capital Satnam contributed Rs.50,000 on 30th September, 2014 and Qureshi contributed Rs.20,000 on 1st January, 2015 as additional capitals. The profit of the firm for the year ended 31st March, 2015 was Rs.3,37800.
 a. Identify any two values which the firm wants to communicate to the society.
 b. Prepare Profit and Loss Appropriation Account.

Solution 12. 
 Values highlighted are:
 i. Respect for Law (by manufacturing ISI marked electronic goods)
 ii. Women Empowerment
 iii. Sensitivity towards the specially abled people

Profit and Loss Appropriation Account

Particulars

Amount

Particulars

Amount

To Interest on Capital:

 

 

 

Satnam’s Capital A/c

25,500

 

 

Qureshi’s Capital A/c

12,300

 

 

To Profit Transferred to:

1,20,000

By Profit and Loss A/c

3,37,800

Satnam’s Capital A/c

1,20,000

 

 

Qureshi’s Capital A/c

60,000

 

 

Juliee’s Capital A/c

 

 

 

 

3,37,800

 

3,37,800

Question 13. (a) Vinod and Ashish were partners in a firm sharing profits in the ratio of 3:2. Their capitals were Rs.80,000 and Rs.50,000 respectively. They admitted Gaurav in the firm on 1st January, 2013 as a new partner for 1/5th share in the future profits. Gaurav brought Rs.60,000 as his capital. Calculate the value of goodwill of the firm and record necessary journal entries on Gaurav’s admission.
 (b) AK, NK and SK were partners in a firm sharing profits in the ratio of 5:3:2. Goodwill
 appeared at Rs.90,000 and General Reserve at Rs.50,000 in the books of the firm. NK decided
 to retire from the firm. On the date of his retirement, goodwill of the firm was valued at
 Rs.2,40,000. The new profit sharing ratio of AK and SK was 2:3. Give entries
 Solution 13.

 (a) Journal Entries

Date

Particulars

L.F.

Debit

Credit

 

Bank A/c Dr.

To Gaurav’s Capital A/c

(Being capital introduced by Gaurav)

Gaurav’s Capital A/c Dr.

To Vinod’s Capital A/c

To Ashish’s Capital A/c

(Being adjustment of premium for goodwill is done)

 

60,000

22,000

60,000

13,200

8,800

(b)  Journal Entries

Date

Particulars

L.F.

Debit

Credit

 

AK’s Capital A/c Dr.

NK’s Capital A/c Dr.

SK’s Capital A/c Dr.

To Goodwill A/c

(Being old goodwill written off)

General Reserve A/c Dr.

To AK’s Capital A/c

To NK’s Capital A/c

To SK’s Capital A/c

(Being General Reserve shared by the partners)

SK’s Capital A/c Dr.

To AK’s Capital A/c

To NK’s Capital A/c

(Being goodwill adjusted at the time retirement)

 

45.000

27.000

18.000

50.000

96.000

90.000

25.000

15.000

10.000

24.000

72.000


Question 14. (a) On 1st April, 2012 a company issued 4,000 9% debentures of Rs. 100 each at a discount of 10%, repayable at a premium of 10%. The terms of issue provided for the redemption of Rs. 40,000 debentures every year commencing from March 31st, 2014, either by purchase from open market or by draw of lots at the company’s option. On March 31st, 2014, the company purchased for cancellation its own debentures of the face value of Rs. 32,000 at Rs. 95 per debenture and Rs. 8,000 at Rs. 90 per debenture. The  expenses of purchase amounted to Rs. 1,000. Record necessary journal entries for redemption of 9% debentures.
 (b) Company has converted its 550; 9% Debentures of Rs.1,000 each into New 13%
 Debentures of Rs.100 each. The new debentures were issued at a premium of 10%
 Solution 14.
(a) Journal Entries

Date

Particulars

L.F.

Debit

Credit

 

Own Debentures A/c Dr.

To Bank A/c

(Being company purchased its own 320 debentures)

9% Debentures A/c Dr.

 

38,600

38,600

 

To Own Debentures A/c

To Gain on Cancellation

 

40,000

38,600

1,400

 

(Being own debentures cancelled)

Gain on Cancellation A/c Dr.

To Capital Reserve

(Being gain transferred to capital reserve)

 

1,400

1,400

(b) Journal Entries

Date

Particulars

L.F.

Debit

Credit

 

9% Debentures A/c Dr.

To Debenture holders A/c

(Being amount due to the debenture holders)

 

5,50,000

5,50,000

 

Debenture holders A/c Dr.

To 13% Debenture A/c

To Securities Premium

(Being new debentures issued)

 

5,50,000

5,00,000

50,000

Note: No. of Debentures issued = 5,50,000/110 = 5,000

Question 15. Vinod and Mukesh were partners in a firm sharing profits in the ratio of their capitals. On 31st March, 2013, their Balance Sheet was as follows:

Liabilities

Amount

Assets

Amount

Creditors

1,50,000

Bank

2,00,000

Workmen compensation fund

3,00,000

Debtors

3,40,000

General Reserve

75,000

Stock

1,50,000

Vinod’s Current A/c

25,000

Furniture

4,60,000

Capitals: Vinod

10,00,000

Machinery

8,20,000

Mukesh

5,00,000

Mukesh’s Capital A/c

80,000

 

20,50,000

 

20,50,000

On the above date the firm was dissolved:
 i. Debtors were realised at a discount of 5%. 50% of the stock was taken over by Vinod at 10% less than the book value. Remaining stock was sold for Rs.65,000.
 ii. Furniture was taken over by Mukesh for Rs.1,35,000. Machinery was sold as scrap for Rs.74,000.
 iii. Creditors were paid in full.
 iv. Expenses on realisation Rs.8,000 were paid by Vinod.
 Prepare Realisation Account
 Solution 15.

 Realisation Account

Particulars

Amount

Particulars

Amount

To Debtors

To Stock

To Furniture

To Machinery

To Bank A/c (creditors)

To Vinod’s Capital A/c

(Realisation Expenses)

3.40.000

1.50.000

4.60.000

8.20.000

1.50.000

8.000

By Creditors

By Vinod’s Capital A/c (stock)

By Bank A/c (assets realised)

Stock 65,000

Debtors 3,23,000

Machinery 74,000

By Mukesh’s Capital A/c

By Loss Transferred:

Vinod

Mukesh

1.50.000

67,500

4.62.000

1.35.000

7,42,333

3,71,167

 

19,28,000

 

19,28,000


Question 16. W and R were partners in a firm sharing profits in the ratio of 3:2 respectively. On 31st March, 2013, their Balance Sheet was as follows:

Liabilities

Amount

Assets

Amount

Bank Loan

Creditors

Investment Fluctuation Fund

Capitals: W

R

10,000

17,500

4.000

20.000

15,000

Cash

Debtors 10,000

Less: Provision 350

Stock

Plant

Patents

Investments

Goodwill

2.500

9,650

12.500

17.500

10,350

10,000

4,000

 

66,500

 

66,500

B was admitted as a new partner on the following conditions:
 i. B will get 4/15th share of profits.
 ii. B had to bring Rs.15,000 as his capital.
 iii. B would pay cash for his share of goodwill based on 2.5 years purchase of average profit of last 4 years.
 iv. The profits of the firm for the years ending 31st March, 2010, 2011, 2012 and 2013 were Rs.10,000; Rs.7,000; Rs.8,500 and Rs.7,500 respectively.
 v. Stock was valued at Rs.10,000 and provision for doubtful debts was raised up to Rs.500.
 vi. Plant was revalued at Rs.20,000.
 Prepare Revaluation Account, Partners Capital Account and Balance Sheet of new firm.
 OR
 Lalit, Madhur and Neena were partners sharing profits as 50%, 30% and 20% respectively.
 On 31st March, 2013, their Balance Sheet was as follows:

 

Liabilities

Amount

Assets

Amount

 

Creditors

28,000

10,000

Cash

Debtors 47,000

34.000

44.000

Provident Fund

Investment Fluctuation Fund

Capitals: Lalit

Madhur

Neena

10,000

50.000

40.000

25.000

Less: Provision 3,000

Stock

Investments

Goodwill

Profit and Loss A/c

15.000

40.000

20.000

10,000

 

1,63,000

 

1,63,000

On this date, Madhur retired and Lalit and Neena agreed to continue on the following terms:
i. The goodwill of the firm was valued at Rs.51,000.
 ii. There was a claim for workmen compensation to the extent of Rs.6,000.
 iii. Investment were brought down to Rs.15,000.
 iv. Provision for bad debts was reduced by Rs.1,000.
 v. Madhur was paid Rs.10,300 in cash and the balance was transferred to his loan account
 payable in two equal instalments together with interest @ 12% p.a.
 Prepare Revaluation Account, Partners Capital Accounts and Madhur’s Loan Account till the
 loan is finally paid off.
 Solution 16.

Revaluation Account

Particulars

Amount

Particulars

Amount

To Stock A/c

2,500

By Plant A/c

By Loss Transferred:

2,500

90

60

To Provision for doubtful debts

150

W’s Capital A/c

 

 

R’s Capital A/c

 

2,650

 

2,650

Partners’  Capital  Account

Particulars

W

R

B

Particulars

W

R

B

To Goodwill

To Rev. A/c

2,400

90

1,600

60

15,000

By Bal. b/d

By I.F.F

20,000

2,400

15,000

1,600

15,000

To Bal. c/d

23,210

17,140

By Premium

By Cash A/c
  

3,300

2,200

 

25,700

18,800

15,000

 

25,700

18,800

15,000

Balance Sheet

Liabilities

Amount

Assets

Amount

 

 

 

Cash

23,000

 

Bank Loan

10,000

Debtors 10,000

 

9,500

 

Creditors

17,500

Less: Provision 500

 

10,000

 

Capitals: W

23,210

Stock

 

20,000

 

R

17,140

Plant

 

10,350

 

B

15,000

Patents

 

10,000

 

 

 

Investments

 

 

82,850

 

82,850

 

OR
 Revaluation  Account

Particulars

Amount

Particulars

Amount

To Workmen Compensation

6,000

By Provision for bad debts

By Loss Transferred:

Lalit

Madhur

Neena

1,000

10,000

To Investment

15,000

6,000

4,000

 

21,000

 

21,000

Partners’ Capital Account

Particulars

Lalit

Madhur

Neena

Particulars

Lalit

Madhur

Neena

To Rev. A/c

 

 

 

 

 

 

 

To P/L A/c

10,000

6,000

4,000

 

 

 

 

To Goodwill

5,000

3,000

2,000

By Bal. b/d

 

40,000

 

To Madhur

10,000

6,000

4,000

By Lalit’s Cap.

50,000

10,929

25,000

To Cash

10,929

10,300

4,371

By Neena’s Cap.

 

4,371

 

To Madhur loan

14,071

30,000

10,629

 

 

 

 

To Bal. c/d

 

 

 

 

 

 

 

  

 

50,000

55,300

25,000

 

50,000

55,300

25,000

 

Madhur’s Loan Account

Date

Particulars

Amount

Date

Particulars

Amount

Mar. 31, 2013

To Bal. c/d

30,000

31 March

By Madhur’s Cap. A/c

30,000

 

 

30,000

 

 

30,000

2014 Mar. 31

To Cash A/c

To Bal. c/d

18,600

15,000

  1. April 1
  2. Mar. 31

By Balance b/d

By Interest

30,000

3,600

 

 

33,600

 

 

33,600

2015 Mar.31

To Cash A/c

16,800

  1. April 1
  2. Mar. 31

By Balance b/d

By Interest

15,000

1,800

 

 

16,800

 

 

16,800


Question 17. Vinod Limited issued 40,000 Equity Shares of Rs.10 each at a premium of Rs.2.50 per share. The amount was payable as follows:
 On Application ……………………… Rs.2 per share
 On Allotment ………………………. Rs.4.50 per share (including premium)
 And on Call …………………………..Rs.6 per share
 Allotment was made to the applicants as follows:
 i. Applicants for 20,000 shares were allotted 10,000 shares
 ii. Applicants for 56,000 shares were allotted 14,000 shares
 iii. Applicants for 48,000 shares were allotted 16,000 shares
 It was decided that excess amount received on applications would be utilised on allotment and the surplus would be refunded.
 Ram, to whom 1,000 shares were allotted, who belongs to category (i), failed to pay allotment
 money. His shares were forfeited after the call.
 Pass necessary journal entries in the books of Vinod Limited for the above transactions.
 OR
 Vinod Limited invited applications for issuing 80,000 shares of Rs.10 each at a premium of Rs.40 per share but applications were received only for 77,000 shares. Complete the following journal entries.

 

Date

Particulars

L.F.

Debit

Credit

 

.................. A/c Dr.

To........................ A/c

(Being application money received @ Rs.35 each including

Rs.30 premium)

....................... A/c Dr.

To........................ A/c

To Securities Premium A/c

(Being application money adjusted)

....................... A/c Dr.

To........................ A/c

To Securities Premium

(Being allotment money due @ Rs.8 including premium of

Rs.4 each share)

....................... A/c Dr.

To........................ A/c

(Being allotment money received except on 7,000 shares)

....................... A/c Dr.

Securities Premium A/c Dr.

To........................ A/c

To Share Allotment A/c

(Being 7,000 shares forfeited by the Vinod Limited)

....................... A/c Dr.

To........................ A/c

To Securities Premium A/c

(Being first and final call due with premium)

....................... A/c Dr.

To........................ A/c

(Being first and final call received except on 500 shares)

....................... A/c Dr.

 

6,16,000

26.95.000

3.85.000

4.20.000

4.86.500

3.500

 

Securities Premium A/c Dr.

To........................ A/c

To First and Final Call A/c

(Being 500 shares forfeited by the Vinod Limited)

...................... A/c Dr.

To........................ A/c

To Securities Premium A/c

(Being 1,000 shares reissued @ Rs.50 per share fully paid,

including 500 shares, which were forfeited after the call)

...................... A/c Dr.

To........................ A/c

(Being gain on forfeiture transferred to the capital reserve)

 

 

 

Solution 17. 
 Journal Entries

Date

Particulars

L.F.

Debit

Credit

 

Bank A/c Dr.

To Equity Share Application A/c (Being application money received)

Equity Share Application A/c Dr.

To Equity Share Capital A/c

To Equity Share Allotment A/c

 

 

2,48,000

 

To Bank A/c

 

2,48,000

80,000

 

(Being application money adjusted)

 

 

1,47,000

 

Equity Share Allotment A/c Dr.

To Equity Share Capital A/c

 

2,48,000

21,000

 

To Securities Premium

 

1,80,000

80,000

 

(Being allotment money due)

Bank A/c Dr.

 

30,500

1,00,000

 

To Equity Share Allotment (Being allotment money received)

 

2,40,000

30,500

 

Equity Share First and final call A/c Dr.

To Equity Share Capital A/c

 

2,34,000

2,40,000

 

(Being first and final call due)

 

 

2,34,000

  

 

Bank A/c Dr.

 

10,000

 

 

To Equity Share first and final call

 

2,500

4,000

 

(Being first and final call received)

 

 

2,500

 

Equity Share Capital A/c Dr.

Securities Premium A/c Dr.

To Share Forfeiture A/c

To Share Allotment A/c

To first and final call

(Being 1,000 shares forfeited by the Vinod Limited)

 

 

6,000

 

Note : Calculation of applied shares = 20,000/10,000 x 1,000 = 2,000 shares.
 OR

 

Date

Particulars

L.F.

Debit

Credit

 

 

Bank A/c Dr.

To Equity Share Application A/c

(Being application money received @ Rs.35 each including

Rs.30 premium)

Equity Share Application A/c Dr.

To Equity Share Capital A/c

To Securities Premium A/c

(Being application money adjusted)

Equity Share Allotment A/c Dr.

To Equity Share Capital A/c

To Securities Premium

(Being allotment money due @ Rs.8 including premium of

Rs.4 each share)

Bank A/c Dr.

To Equity Share Allotment

(Being allotment money received except on 7,000 shares) Equity Share Capital A/c Dr.

Securities Premium A/c Dr.

To Share Forfeiture A/c

 

26,95,000

26.95.000

6.16.000

5.60.000

63.000

26.95.000

3.85.000

23.10.000

3.08.000

3.08.000

5.60.000

56.000

 

To Share Allotment A/c

 

 

35,000

 

(Being 7,000 shares forfeited by the Vinod Limited)

 

28,000

 

 

Equity Share First and final call A/c Dr.

 

4,90,000

70,000

 

To Equity Share Capital A/c

To Securities Premium A/c

 

4,86,500

4,20,000

 

(Being first and final call due with premium)

Bank A/c Dr.

 

5,000

4,86,500

 

To Equity Share first and final call

 

3,000

3,500

 

(Being first and final call received except on 500 shares) Equity Share Capital A/c Dr.

 

50,000

4,500

 

Securities Premium A/c Dr.

 

7,000

10,000

 

To Share Forfeiture A/c

 

 

40,000

 

To First and Final Call A/c

(Being 500 shares forfeited by the Vinod Limited)

Bank A/c Dr.

To Share Capital A/c

To Securities Premium A/c

(Being 1,000 shares reissued @ Rs.50 per share fully paid,

including 500 shares, which were forfeited after the call)

Share forfeiture A/c Dr.

To Capital Reserve

(Being gain on forfeiture transferred to the capital reserve)

 

 

7,000

Part – B
 Analysis of Financial Statements



Question 18. Redemption of Debentures would result in inflow, outflow or no flow of cash.
 Give your answer with reason.
 Solution 18.

 Redemption of debentures is outflow of cash because it is a payment to the
 debenture holders and decreases cash.

Question 19. When is interest received considered as financing activity?
 Solution 19.
When a company receives interest on calls in arrears it is considered as
 financing activity.

Question 20. (a) How will you show the following items in the balance sheet of a company?
 (i) Capital Reserve
 (ii) Statement of P/L
 (iii) Bank Overdraft
 (iv) Income received in advance
 (b) State any one objective of Financial Statement Analysis.
 Solution 20. 
(a) Items to be shown in the Balance Sheet:
 (i) Capital Reserve ----------- Shareholders Funds-------------Reserves and Surplus
 (ii) Statement of P/L --------- Shareholders Funds-------------Reserves and Surplus
 (iii) Bank Overdraft---------- Current Liabilities -------------- Short-term borrowings
 (iv) Income received in advance------ Current Liabilities ----- Other current liabilities
 (b) The main objective of Financial Statement Analysis is to know long term as well as short
 term solvency of the business firm.

Question 21. Calculate ‘Return on Investment’ and ‘Debt to Equity Ratio’ from the following
 information:
 Net Profit after Interest and Tax Rs.3,00,000
 10% Debentures Rs.5,00,000
 Tax Rate 40%
 Capital Employed Rs.40,00,000
 Solution 21.

 (i) Return on Investment = Net Profit before interest and tax/capital employed x 100
 = 5,50,000/40,00,000 x 100 = 13.75%
 Working Note:
 Net Profit before Interest and Tax = 3,00,000 + 50,000 (Interest) + 2,00,000 Tax = 5,50,000
 (ii) Debt to Equity Ratio =
 Debt = 5,00,000 i.e.10% Debentures
 Equity = Capital Employed 40,00,000 – Debt 5,00,000 = 35,00,000
 Debt/Equity = 5,00,000/35,00,000 = 1:7

Question 22. Following information was extracted from the Statement of Profit and Loss for
 the years ended 31st March, 2012 and 2013. Prepare Comparative Statement of Profit and
 Loss:

Particulars

31.3.2013

31.3.2012

Revenue from operations Employees benefit expenses

Other expenses

Tax rate

10,00,000

5,00,000

50,000

50%

8,00,000

  1. 000
  1. 000

50%

Solution 22.
Comparative Statement of Profit and Loss

Particulars

31.3.2013

31.3.2012

Absolute change

% change

(i) Revenue from operations

10,00,000

8,00,000

2,00,000

25

(ii) Expenses:

  1. Employee benefit expenses
  2. Other expenses

5,00,000

50,000

  1. 000
  1. 000

1,00,000

(50,000)

25

(50)

Total Expenses

5,50,000

5,00,000

50,000

10

Net profit before tax (i -ii)

4,50,000

3,00,000

1,50,000

50

Less: Tax

2,25,000

1,50,000

75,000

50

Net profit after tax

2,25,000

1,50,000

75,000

50


Question 23. (a) Prepare Cash Flow Statement from the following Balance Sheet:

 

Particular

Note No.

31.3.2013 (Rs)

31.3.2012 (Rs)

I

1.

2.

Equity and Liabilities

Shareholder’s Funds:

Share Capital

Reserve and Surplus

Current Liabilities:

Trade Payables

1

6.30.000

3.08.000

2.80.000

5.60.000

1.82.000

1,82,000

Total

 

12,18,000

9,24,000

II

1.

2.

Assets:

Non-Current Assets:

Fixed Assets:

Tangible (machinery)

Current Assets:

Inventories

Trade Receivables

Cash and Cash equivalents

 

3.92.000

98.000

6.30.000

98.000

2,80,000

1.40.000

4.20.000

84.000

 

Total

 

12,18,000

9,24,000

Notes  to  Accounts:

Particulars

31.3.2013

31.3.2012

Reserves and Surplus

Surplus i.e. Balance in Statement of P/L

3,08,000

1,82,000

Additional Information:
 (b) An old machinery having book value of Rs.42,000 was sold for Rs.56,000.
 Depreciation provided on machinery during the year was Rs.28,000
 Solution 23.
 Cash Flow Statement

Particulars

Detail

Amount

A. Cash Flow from Operating Activities

1,26,000

 

Net Profit before tax

28,000

 

Add: Depreciation

(14,000)

 

Less: Profit on sale of Machinery

1,40,000

 

Operating profit before working capital changes

98,000

 

Add: Trade payables

Add: Decrease in Inventories

42,000

(2,10,000)

70,000

Less: Increase in Trade Receivable

Cash flow from operating activities before tax

70,000

(1,26,000)

B. Cash Flow from Investing Activities

Proceeds from sale of machinery

56,000

70,000

Purchase of machinery

Cash used in Investing Activities

(1,82,000)

 

C. Cash Flow from Financing Activities

 

 

Issue of Shares

70,000

 

Cash Flow from Financing Activities

 

 

D. Decrease in Cash and Cash Equivalents (A + B + C)

 

14,000

Add: Cash and Cash Equivalents in the beginning

 

84,000

Cash and Cash Equivalents at the end

 

98,000

Working  Note:  Plant  and  Machinery  Account

Particulars

Amount

Particulars

Amount

To Bal. b/d

2,80,000

By Bank A/c

56,000

To Gain on sale of machinery

14,000

By Depreciation

28,000

To Bank A/c (Bal. fig. purchase)

1,82,000

By Bal. c/d

3,92,000

 

4,76,000

 

4,76,000

 

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