Sample Question Paper 2017-18 Commerce Notes | EduRev

 Page 1


Sample Question Paper 
Accountancy (055): Class XII: 2017-18 
Time: 3 Hours                                                                                                                       Maximum Marks: 80 
General Instructions: 
1) This question paper contains two parts- A and B. 
2) Part A is compulsory for all. 
3) Part B has two options- ‘Analysis of Financial Statements’ and ‘Computerised Accounting’. 
4) Attempt any one option of Part B. 
5) All parts of a question should be attempted at one place. 
Part A 
(Accounting for Partnership Firms and Companies) 
1. Six friends started a partnership business by investing Rs. 2,00,000 each. They decided to 
share profit equally. Name the terms by which they will be called individually and 
collectively. 1 
Solution: Individually: Partners ½  
Collectively: Firm  ½ 
 
2. A, B and C were partners in a firm sharing profits in the ratio of 3 : 2 : 1. B was guaranteed a 
profit of Rs. 2,00,000. During the year the firm earned a profit of Rs. 84,000. Calculate the 
net amount of Profit / Loss transferred to the capital accounts of A and C.1 
Solution: Net Amount of Loss transferred to: 
                            A’s Capital Account: Rs. 87,000 ½  
                            C’s Capital Account: Rs. 29,000 ½  
 
3. H, P and S were partners in a firm sharing profits in the ratio of 4 : 3 : 3. On August 1, 2017, P 
died. His 20 % share was acquired by H and remaining by S. Calculate the new profit sharing 
ratio.                                                                                                                                                1 
Solution: Ratio of H, P and S is 4 : 3 : 3 
H’s Gain =  3/10  X  20 /100 = 3 /50 
H’s new share = H’s old share + H’s Gain 
  = 4/10 + 3/50 = 23/50 ½  
S’s Gain =  3/10  X  80 /100 = 12 /50 
S’s new share = S’s old share + S’s Gain 
  = 3/10 + 12/50 = 27/50  ½  
New Profit sharing Ratio of H and S is 23 : 27 
Page 2


Sample Question Paper 
Accountancy (055): Class XII: 2017-18 
Time: 3 Hours                                                                                                                       Maximum Marks: 80 
General Instructions: 
1) This question paper contains two parts- A and B. 
2) Part A is compulsory for all. 
3) Part B has two options- ‘Analysis of Financial Statements’ and ‘Computerised Accounting’. 
4) Attempt any one option of Part B. 
5) All parts of a question should be attempted at one place. 
Part A 
(Accounting for Partnership Firms and Companies) 
1. Six friends started a partnership business by investing Rs. 2,00,000 each. They decided to 
share profit equally. Name the terms by which they will be called individually and 
collectively. 1 
Solution: Individually: Partners ½  
Collectively: Firm  ½ 
 
2. A, B and C were partners in a firm sharing profits in the ratio of 3 : 2 : 1. B was guaranteed a 
profit of Rs. 2,00,000. During the year the firm earned a profit of Rs. 84,000. Calculate the 
net amount of Profit / Loss transferred to the capital accounts of A and C.1 
Solution: Net Amount of Loss transferred to: 
                            A’s Capital Account: Rs. 87,000 ½  
                            C’s Capital Account: Rs. 29,000 ½  
 
3. H, P and S were partners in a firm sharing profits in the ratio of 4 : 3 : 3. On August 1, 2017, P 
died. His 20 % share was acquired by H and remaining by S. Calculate the new profit sharing 
ratio.                                                                                                                                                1 
Solution: Ratio of H, P and S is 4 : 3 : 3 
H’s Gain =  3/10  X  20 /100 = 3 /50 
H’s new share = H’s old share + H’s Gain 
  = 4/10 + 3/50 = 23/50 ½  
S’s Gain =  3/10  X  80 /100 = 12 /50 
S’s new share = S’s old share + S’s Gain 
  = 3/10 + 12/50 = 27/50  ½  
New Profit sharing Ratio of H and S is 23 : 27 
 
4. How is dissolution of partnership different from dissolution of partnership firm?  1 
Solution:  In case of dissolution of partnership, the firm continue to do business but with a changed 
agreement. In case of dissolution of partnership firm, the firm ceases to exist, the assets of the firm 
are realised and its liabilities are discharged.                                                                                        1 
 
5. Why are irredeemable debentures also known as perpetual debentures?1 
Solution:  Irredeemable debentures are called perpetual debentures because these are not 
repayable during the life span of the company.                                                                                    1 
 
6. Distinguish between shares and debentures on the basis of convertibility.1 
Solution: Shares cannot be converted into debentures or any other security whereas the debentures 
can be converted into shares or new debentures if the terms so provide.                                                    
1 
7. K K Limited obtained a loan of Rs. 10,00,000 from State Bank of India @ 9 % interest. The 
company issued Rs. 15,00,000, 9 % debentures of Rs. 100/- each, in favour of State Bank of 
India as collateral security. Pass necessary Journal entries for the above transactions: 
(i) When company decided not to record the issue of 9 % Debentures as collateral 
security. 
(ii) When company decided to record the issue of 9 % Debentures as collateral security. 
                                                                                                                                                  3 
Solution: (i) K K Limited  
                                                                                      Journal 
Date Particulars L F Dr. Amount (Rs.) Cr. Amount (Rs.) 
 Bank Account                                              Dr. 
     To Bank Loan Account  
(Obtained loan from State Bank of India @ 9 %.) 
 10,00,000 
 
 
 
10,00,000 
 
1 
(ii)  K K Limited 
Journal 
 1+1 
 
 
Date Particulars L F Dr. Amount 
(Rs.) 
Cr. Amount 
(Rs.) 
 Bank Account                                              Dr. 
     To Bank Loan Account  
( Obtained loan from State Bank of India @ 9 %.) 
 10,00,000 
 
 
15,00,000 
 
 
 
10,00,000 
 
 
15,00,000 
 
 
Debenture Suspense Account Dr. 
     To 9 % Debentures Account  
(Issued 9 % Debentures as collateral security in 
favour of State Bank of India) 
Page 3


Sample Question Paper 
Accountancy (055): Class XII: 2017-18 
Time: 3 Hours                                                                                                                       Maximum Marks: 80 
General Instructions: 
1) This question paper contains two parts- A and B. 
2) Part A is compulsory for all. 
3) Part B has two options- ‘Analysis of Financial Statements’ and ‘Computerised Accounting’. 
4) Attempt any one option of Part B. 
5) All parts of a question should be attempted at one place. 
Part A 
(Accounting for Partnership Firms and Companies) 
1. Six friends started a partnership business by investing Rs. 2,00,000 each. They decided to 
share profit equally. Name the terms by which they will be called individually and 
collectively. 1 
Solution: Individually: Partners ½  
Collectively: Firm  ½ 
 
2. A, B and C were partners in a firm sharing profits in the ratio of 3 : 2 : 1. B was guaranteed a 
profit of Rs. 2,00,000. During the year the firm earned a profit of Rs. 84,000. Calculate the 
net amount of Profit / Loss transferred to the capital accounts of A and C.1 
Solution: Net Amount of Loss transferred to: 
                            A’s Capital Account: Rs. 87,000 ½  
                            C’s Capital Account: Rs. 29,000 ½  
 
3. H, P and S were partners in a firm sharing profits in the ratio of 4 : 3 : 3. On August 1, 2017, P 
died. His 20 % share was acquired by H and remaining by S. Calculate the new profit sharing 
ratio.                                                                                                                                                1 
Solution: Ratio of H, P and S is 4 : 3 : 3 
H’s Gain =  3/10  X  20 /100 = 3 /50 
H’s new share = H’s old share + H’s Gain 
  = 4/10 + 3/50 = 23/50 ½  
S’s Gain =  3/10  X  80 /100 = 12 /50 
S’s new share = S’s old share + S’s Gain 
  = 3/10 + 12/50 = 27/50  ½  
New Profit sharing Ratio of H and S is 23 : 27 
 
4. How is dissolution of partnership different from dissolution of partnership firm?  1 
Solution:  In case of dissolution of partnership, the firm continue to do business but with a changed 
agreement. In case of dissolution of partnership firm, the firm ceases to exist, the assets of the firm 
are realised and its liabilities are discharged.                                                                                        1 
 
5. Why are irredeemable debentures also known as perpetual debentures?1 
Solution:  Irredeemable debentures are called perpetual debentures because these are not 
repayable during the life span of the company.                                                                                    1 
 
6. Distinguish between shares and debentures on the basis of convertibility.1 
Solution: Shares cannot be converted into debentures or any other security whereas the debentures 
can be converted into shares or new debentures if the terms so provide.                                                    
1 
7. K K Limited obtained a loan of Rs. 10,00,000 from State Bank of India @ 9 % interest. The 
company issued Rs. 15,00,000, 9 % debentures of Rs. 100/- each, in favour of State Bank of 
India as collateral security. Pass necessary Journal entries for the above transactions: 
(i) When company decided not to record the issue of 9 % Debentures as collateral 
security. 
(ii) When company decided to record the issue of 9 % Debentures as collateral security. 
                                                                                                                                                  3 
Solution: (i) K K Limited  
                                                                                      Journal 
Date Particulars L F Dr. Amount (Rs.) Cr. Amount (Rs.) 
 Bank Account                                              Dr. 
     To Bank Loan Account  
(Obtained loan from State Bank of India @ 9 %.) 
 10,00,000 
 
 
 
10,00,000 
 
1 
(ii)  K K Limited 
Journal 
 1+1 
 
 
Date Particulars L F Dr. Amount 
(Rs.) 
Cr. Amount 
(Rs.) 
 Bank Account                                              Dr. 
     To Bank Loan Account  
( Obtained loan from State Bank of India @ 9 %.) 
 10,00,000 
 
 
15,00,000 
 
 
 
10,00,000 
 
 
15,00,000 
 
 
Debenture Suspense Account Dr. 
     To 9 % Debentures Account  
(Issued 9 % Debentures as collateral security in 
favour of State Bank of India) 
8. P, Q and R were partners sharing profits in the ratio of 2 : 2 : 1. The firm closes its books on 
March 31 every year. On June 30, 2017, R died. The following information is provided on R’s 
death:  
(i) Balance in his capital account in the beginning of the year was Rs. 6,50,000.  
(ii) He withdrew Rs. 60,000 on May 15, 2017 for his personal use. 
      On the date of death of a partner the partnership deed provided for the following: 
(a) Interest on capital @ 10 % per annum. 
(b) Interest on drawings @ 12 % per annum. 
(c) His share in the profit of the firm till the date of death, to be calculated on the basis of the 
rate of Net Profit on Sales of the previous year, which was 25 %. The Sales of the firm till 
June 30, 2017 were Rs. 6,00,000. 
Prepare R’s Capital Account on his death to be presented to his executors.3 
Solution: 
R’s Capital Account 
Date 
2017 
Particulars JF Amount 
(Rs) 
Date 
2017 
Particulars JF Amount 
(Rs) 
Jun 30 
Jun 30 
Jun 30 
To Drawings A/C 
To  Interest on Drawings A/C 
To R’s Executor’s A/c  
 
 60,000 
900 
6,35,350 
Apr 1 
Jun 30 
Jun 30 
By Balance b/d  
By Interest on Capital A/c 
By Profit & Loss Suspense A/C 
 6,50,000 
16,250 
30,000 
6,96,250 6,96,250 
 ½ X 6 = 3 
Note: ½ mark may be deducted if the dates are not correctly recorded. 
9. M M Limited is registered with an Authorised capital of Rs. 200 Crores divided into equity 
shares of Rs. 100 each. On 1
st
 April 2016 the Subscribed and Called up capital of the 
company is Rs. 10,00,00,000. The company decided to help the unemployed youth of the 
naxal affected areas of Andhra Pradesh, Chhattisgarh and Odisha by opening 100 ‘Skill 
Development Centres’. The company also decided to provide free medical services to the 
villagers of these states by starting mobile dispensaries. To meet the capital expenditure of 
these activities the company further issued 1,00,000 equity shares during financial year 
2016-17. These shares were fully subscribed and paid. 
 
        Present the share capital of the company in its Balance Sheet. Also identify any two 
values that the company wants to propagate.                                                                           3 
Solution:                 M M Limited 
Balance Sheet 
 as at ……………………………(Rs. In Crores) 
Particulars Note 
Number 
31-03-2017 
Rs. 
31-03-2016 
Rs.  
I. Equity and Liabilities 
     1. Shareholders’ Funds 
         a) Share Capital 
 
 
1 
 
 
11 
 
 
10 
  
1 
 
Page 4


Sample Question Paper 
Accountancy (055): Class XII: 2017-18 
Time: 3 Hours                                                                                                                       Maximum Marks: 80 
General Instructions: 
1) This question paper contains two parts- A and B. 
2) Part A is compulsory for all. 
3) Part B has two options- ‘Analysis of Financial Statements’ and ‘Computerised Accounting’. 
4) Attempt any one option of Part B. 
5) All parts of a question should be attempted at one place. 
Part A 
(Accounting for Partnership Firms and Companies) 
1. Six friends started a partnership business by investing Rs. 2,00,000 each. They decided to 
share profit equally. Name the terms by which they will be called individually and 
collectively. 1 
Solution: Individually: Partners ½  
Collectively: Firm  ½ 
 
2. A, B and C were partners in a firm sharing profits in the ratio of 3 : 2 : 1. B was guaranteed a 
profit of Rs. 2,00,000. During the year the firm earned a profit of Rs. 84,000. Calculate the 
net amount of Profit / Loss transferred to the capital accounts of A and C.1 
Solution: Net Amount of Loss transferred to: 
                            A’s Capital Account: Rs. 87,000 ½  
                            C’s Capital Account: Rs. 29,000 ½  
 
3. H, P and S were partners in a firm sharing profits in the ratio of 4 : 3 : 3. On August 1, 2017, P 
died. His 20 % share was acquired by H and remaining by S. Calculate the new profit sharing 
ratio.                                                                                                                                                1 
Solution: Ratio of H, P and S is 4 : 3 : 3 
H’s Gain =  3/10  X  20 /100 = 3 /50 
H’s new share = H’s old share + H’s Gain 
  = 4/10 + 3/50 = 23/50 ½  
S’s Gain =  3/10  X  80 /100 = 12 /50 
S’s new share = S’s old share + S’s Gain 
  = 3/10 + 12/50 = 27/50  ½  
New Profit sharing Ratio of H and S is 23 : 27 
 
4. How is dissolution of partnership different from dissolution of partnership firm?  1 
Solution:  In case of dissolution of partnership, the firm continue to do business but with a changed 
agreement. In case of dissolution of partnership firm, the firm ceases to exist, the assets of the firm 
are realised and its liabilities are discharged.                                                                                        1 
 
5. Why are irredeemable debentures also known as perpetual debentures?1 
Solution:  Irredeemable debentures are called perpetual debentures because these are not 
repayable during the life span of the company.                                                                                    1 
 
6. Distinguish between shares and debentures on the basis of convertibility.1 
Solution: Shares cannot be converted into debentures or any other security whereas the debentures 
can be converted into shares or new debentures if the terms so provide.                                                    
1 
7. K K Limited obtained a loan of Rs. 10,00,000 from State Bank of India @ 9 % interest. The 
company issued Rs. 15,00,000, 9 % debentures of Rs. 100/- each, in favour of State Bank of 
India as collateral security. Pass necessary Journal entries for the above transactions: 
(i) When company decided not to record the issue of 9 % Debentures as collateral 
security. 
(ii) When company decided to record the issue of 9 % Debentures as collateral security. 
                                                                                                                                                  3 
Solution: (i) K K Limited  
                                                                                      Journal 
Date Particulars L F Dr. Amount (Rs.) Cr. Amount (Rs.) 
 Bank Account                                              Dr. 
     To Bank Loan Account  
(Obtained loan from State Bank of India @ 9 %.) 
 10,00,000 
 
 
 
10,00,000 
 
1 
(ii)  K K Limited 
Journal 
 1+1 
 
 
Date Particulars L F Dr. Amount 
(Rs.) 
Cr. Amount 
(Rs.) 
 Bank Account                                              Dr. 
     To Bank Loan Account  
( Obtained loan from State Bank of India @ 9 %.) 
 10,00,000 
 
 
15,00,000 
 
 
 
10,00,000 
 
 
15,00,000 
 
 
Debenture Suspense Account Dr. 
     To 9 % Debentures Account  
(Issued 9 % Debentures as collateral security in 
favour of State Bank of India) 
8. P, Q and R were partners sharing profits in the ratio of 2 : 2 : 1. The firm closes its books on 
March 31 every year. On June 30, 2017, R died. The following information is provided on R’s 
death:  
(i) Balance in his capital account in the beginning of the year was Rs. 6,50,000.  
(ii) He withdrew Rs. 60,000 on May 15, 2017 for his personal use. 
      On the date of death of a partner the partnership deed provided for the following: 
(a) Interest on capital @ 10 % per annum. 
(b) Interest on drawings @ 12 % per annum. 
(c) His share in the profit of the firm till the date of death, to be calculated on the basis of the 
rate of Net Profit on Sales of the previous year, which was 25 %. The Sales of the firm till 
June 30, 2017 were Rs. 6,00,000. 
Prepare R’s Capital Account on his death to be presented to his executors.3 
Solution: 
R’s Capital Account 
Date 
2017 
Particulars JF Amount 
(Rs) 
Date 
2017 
Particulars JF Amount 
(Rs) 
Jun 30 
Jun 30 
Jun 30 
To Drawings A/C 
To  Interest on Drawings A/C 
To R’s Executor’s A/c  
 
 60,000 
900 
6,35,350 
Apr 1 
Jun 30 
Jun 30 
By Balance b/d  
By Interest on Capital A/c 
By Profit & Loss Suspense A/C 
 6,50,000 
16,250 
30,000 
6,96,250 6,96,250 
 ½ X 6 = 3 
Note: ½ mark may be deducted if the dates are not correctly recorded. 
9. M M Limited is registered with an Authorised capital of Rs. 200 Crores divided into equity 
shares of Rs. 100 each. On 1
st
 April 2016 the Subscribed and Called up capital of the 
company is Rs. 10,00,00,000. The company decided to help the unemployed youth of the 
naxal affected areas of Andhra Pradesh, Chhattisgarh and Odisha by opening 100 ‘Skill 
Development Centres’. The company also decided to provide free medical services to the 
villagers of these states by starting mobile dispensaries. To meet the capital expenditure of 
these activities the company further issued 1,00,000 equity shares during financial year 
2016-17. These shares were fully subscribed and paid. 
 
        Present the share capital of the company in its Balance Sheet. Also identify any two 
values that the company wants to propagate.                                                                           3 
Solution:                 M M Limited 
Balance Sheet 
 as at ……………………………(Rs. In Crores) 
Particulars Note 
Number 
31-03-2017 
Rs. 
31-03-2016 
Rs.  
I. Equity and Liabilities 
     1. Shareholders’ Funds 
         a) Share Capital 
 
 
1 
 
 
11 
 
 
10 
  
1 
 
 
Notes to Accounts: 
Note Number 1 (Rs. In Crores) 
Particulars 31-03-2017 
Rs. 
Share Capital: 
Authorised Capital 
             2,00,00,000 Equity Shares of Rs. 100 each 
             Issued Capital  
11,00,000 Equity shares of Rs. 100 each 
 
Subscribed Capital 
             Subscribed and Fully paid  
11,00,000 Equity shares of Rs. 100 each 
Share Capital 
 
 
200 
 
11 
 
 
 
11 
11 
1  
Values: Generation of Employment opportunities in backward areas. 
Providing Healthcare/Medical facilities in rural areas.         Or any other value 1 
10. V K Limited purchased machinery from Modern Equipment Manufacturers Limited. The 
company paid the vendors by issue of some equity shares and debentures and the balance 
through an acceptance in their favour payable after three months. The accountant of the 
company, while Journalising the above mentioned transactions, left some items blank. You 
are required to fill in the blanks.3 
V K Limited 
Journal 
 
 
 
 
Date Particulars L F Dr. Amount 
(Rs.) 
Cr. Amount 
(Rs.) 
 
 
 
Machinery Account                                             Dr.           
     To ……………………………………………………… 
(Purchased machinery for Rs. 7,00,000 from 
Modern Equipment Manufacturers Limited  ) 
 …………………… 
 
 
 
……………….. 
………………… 
 
 
 
 
 
 
 
 
…………………. 
 
 
 
…………………… 
 
 
 
 
…………………… 
……………………. 
…………………….. 
…………………… 
 
 
 
 
 
……………………… 
Modern Equipment Manufacturers Ltd.  A/C    Dr. 
Loss on Issue of 9 % Debentures Account  Dr.  
     To …………………………………………………….. 
     To …………………………………………………….. 
      To  Securities Premium  Reserve Account 
      To  Premium on Redemption of Debentures A/C 
(Issued Rs. 1,00,000  9 % debentures at a 
discount of 10 % redeemable at a premium of 10 
% and 50,000 equity shares of Rs. 10 each issued 
at a premium of 15 %) 
……………………………………………….                           Dr.       
To  ……………………………………………… 
(…………………………………………………………………………) 
Page 5


Sample Question Paper 
Accountancy (055): Class XII: 2017-18 
Time: 3 Hours                                                                                                                       Maximum Marks: 80 
General Instructions: 
1) This question paper contains two parts- A and B. 
2) Part A is compulsory for all. 
3) Part B has two options- ‘Analysis of Financial Statements’ and ‘Computerised Accounting’. 
4) Attempt any one option of Part B. 
5) All parts of a question should be attempted at one place. 
Part A 
(Accounting for Partnership Firms and Companies) 
1. Six friends started a partnership business by investing Rs. 2,00,000 each. They decided to 
share profit equally. Name the terms by which they will be called individually and 
collectively. 1 
Solution: Individually: Partners ½  
Collectively: Firm  ½ 
 
2. A, B and C were partners in a firm sharing profits in the ratio of 3 : 2 : 1. B was guaranteed a 
profit of Rs. 2,00,000. During the year the firm earned a profit of Rs. 84,000. Calculate the 
net amount of Profit / Loss transferred to the capital accounts of A and C.1 
Solution: Net Amount of Loss transferred to: 
                            A’s Capital Account: Rs. 87,000 ½  
                            C’s Capital Account: Rs. 29,000 ½  
 
3. H, P and S were partners in a firm sharing profits in the ratio of 4 : 3 : 3. On August 1, 2017, P 
died. His 20 % share was acquired by H and remaining by S. Calculate the new profit sharing 
ratio.                                                                                                                                                1 
Solution: Ratio of H, P and S is 4 : 3 : 3 
H’s Gain =  3/10  X  20 /100 = 3 /50 
H’s new share = H’s old share + H’s Gain 
  = 4/10 + 3/50 = 23/50 ½  
S’s Gain =  3/10  X  80 /100 = 12 /50 
S’s new share = S’s old share + S’s Gain 
  = 3/10 + 12/50 = 27/50  ½  
New Profit sharing Ratio of H and S is 23 : 27 
 
4. How is dissolution of partnership different from dissolution of partnership firm?  1 
Solution:  In case of dissolution of partnership, the firm continue to do business but with a changed 
agreement. In case of dissolution of partnership firm, the firm ceases to exist, the assets of the firm 
are realised and its liabilities are discharged.                                                                                        1 
 
5. Why are irredeemable debentures also known as perpetual debentures?1 
Solution:  Irredeemable debentures are called perpetual debentures because these are not 
repayable during the life span of the company.                                                                                    1 
 
6. Distinguish between shares and debentures on the basis of convertibility.1 
Solution: Shares cannot be converted into debentures or any other security whereas the debentures 
can be converted into shares or new debentures if the terms so provide.                                                    
1 
7. K K Limited obtained a loan of Rs. 10,00,000 from State Bank of India @ 9 % interest. The 
company issued Rs. 15,00,000, 9 % debentures of Rs. 100/- each, in favour of State Bank of 
India as collateral security. Pass necessary Journal entries for the above transactions: 
(i) When company decided not to record the issue of 9 % Debentures as collateral 
security. 
(ii) When company decided to record the issue of 9 % Debentures as collateral security. 
                                                                                                                                                  3 
Solution: (i) K K Limited  
                                                                                      Journal 
Date Particulars L F Dr. Amount (Rs.) Cr. Amount (Rs.) 
 Bank Account                                              Dr. 
     To Bank Loan Account  
(Obtained loan from State Bank of India @ 9 %.) 
 10,00,000 
 
 
 
10,00,000 
 
1 
(ii)  K K Limited 
Journal 
 1+1 
 
 
Date Particulars L F Dr. Amount 
(Rs.) 
Cr. Amount 
(Rs.) 
 Bank Account                                              Dr. 
     To Bank Loan Account  
( Obtained loan from State Bank of India @ 9 %.) 
 10,00,000 
 
 
15,00,000 
 
 
 
10,00,000 
 
 
15,00,000 
 
 
Debenture Suspense Account Dr. 
     To 9 % Debentures Account  
(Issued 9 % Debentures as collateral security in 
favour of State Bank of India) 
8. P, Q and R were partners sharing profits in the ratio of 2 : 2 : 1. The firm closes its books on 
March 31 every year. On June 30, 2017, R died. The following information is provided on R’s 
death:  
(i) Balance in his capital account in the beginning of the year was Rs. 6,50,000.  
(ii) He withdrew Rs. 60,000 on May 15, 2017 for his personal use. 
      On the date of death of a partner the partnership deed provided for the following: 
(a) Interest on capital @ 10 % per annum. 
(b) Interest on drawings @ 12 % per annum. 
(c) His share in the profit of the firm till the date of death, to be calculated on the basis of the 
rate of Net Profit on Sales of the previous year, which was 25 %. The Sales of the firm till 
June 30, 2017 were Rs. 6,00,000. 
Prepare R’s Capital Account on his death to be presented to his executors.3 
Solution: 
R’s Capital Account 
Date 
2017 
Particulars JF Amount 
(Rs) 
Date 
2017 
Particulars JF Amount 
(Rs) 
Jun 30 
Jun 30 
Jun 30 
To Drawings A/C 
To  Interest on Drawings A/C 
To R’s Executor’s A/c  
 
 60,000 
900 
6,35,350 
Apr 1 
Jun 30 
Jun 30 
By Balance b/d  
By Interest on Capital A/c 
By Profit & Loss Suspense A/C 
 6,50,000 
16,250 
30,000 
6,96,250 6,96,250 
 ½ X 6 = 3 
Note: ½ mark may be deducted if the dates are not correctly recorded. 
9. M M Limited is registered with an Authorised capital of Rs. 200 Crores divided into equity 
shares of Rs. 100 each. On 1
st
 April 2016 the Subscribed and Called up capital of the 
company is Rs. 10,00,00,000. The company decided to help the unemployed youth of the 
naxal affected areas of Andhra Pradesh, Chhattisgarh and Odisha by opening 100 ‘Skill 
Development Centres’. The company also decided to provide free medical services to the 
villagers of these states by starting mobile dispensaries. To meet the capital expenditure of 
these activities the company further issued 1,00,000 equity shares during financial year 
2016-17. These shares were fully subscribed and paid. 
 
        Present the share capital of the company in its Balance Sheet. Also identify any two 
values that the company wants to propagate.                                                                           3 
Solution:                 M M Limited 
Balance Sheet 
 as at ……………………………(Rs. In Crores) 
Particulars Note 
Number 
31-03-2017 
Rs. 
31-03-2016 
Rs.  
I. Equity and Liabilities 
     1. Shareholders’ Funds 
         a) Share Capital 
 
 
1 
 
 
11 
 
 
10 
  
1 
 
 
Notes to Accounts: 
Note Number 1 (Rs. In Crores) 
Particulars 31-03-2017 
Rs. 
Share Capital: 
Authorised Capital 
             2,00,00,000 Equity Shares of Rs. 100 each 
             Issued Capital  
11,00,000 Equity shares of Rs. 100 each 
 
Subscribed Capital 
             Subscribed and Fully paid  
11,00,000 Equity shares of Rs. 100 each 
Share Capital 
 
 
200 
 
11 
 
 
 
11 
11 
1  
Values: Generation of Employment opportunities in backward areas. 
Providing Healthcare/Medical facilities in rural areas.         Or any other value 1 
10. V K Limited purchased machinery from Modern Equipment Manufacturers Limited. The 
company paid the vendors by issue of some equity shares and debentures and the balance 
through an acceptance in their favour payable after three months. The accountant of the 
company, while Journalising the above mentioned transactions, left some items blank. You 
are required to fill in the blanks.3 
V K Limited 
Journal 
 
 
 
 
Date Particulars L F Dr. Amount 
(Rs.) 
Cr. Amount 
(Rs.) 
 
 
 
Machinery Account                                             Dr.           
     To ……………………………………………………… 
(Purchased machinery for Rs. 7,00,000 from 
Modern Equipment Manufacturers Limited  ) 
 …………………… 
 
 
 
……………….. 
………………… 
 
 
 
 
 
 
 
 
…………………. 
 
 
 
…………………… 
 
 
 
 
…………………… 
……………………. 
…………………….. 
…………………… 
 
 
 
 
 
……………………… 
Modern Equipment Manufacturers Ltd.  A/C    Dr. 
Loss on Issue of 9 % Debentures Account  Dr.  
     To …………………………………………………….. 
     To …………………………………………………….. 
      To  Securities Premium  Reserve Account 
      To  Premium on Redemption of Debentures A/C 
(Issued Rs. 1,00,000  9 % debentures at a 
discount of 10 % redeemable at a premium of 10 
% and 50,000 equity shares of Rs. 10 each issued 
at a premium of 15 %) 
……………………………………………….                           Dr.       
To  ……………………………………………… 
(…………………………………………………………………………) 
 
Solution:  
V K Limited 
Journal 
                                                                                                                                       1 + 1 +1 = 3 
11. E, F and G were partners in a firm sharing profits in the ratio of 2 : 2 : 1. On March 31, 2017, their 
firm was dissolved. On the date of dissolution, the Balance Sheet of the firm was as follows: 
Balance Sheet 
as at March 31, 2017 
Liabilities Rs.  Assets Rs. 
Capitals: 
E                                              1,30,000 
F                                              1,00,000 
Creditors 
Outstanding Expenses  
 
 
 
2,30,000 
45,000 
17,000 
G’s Capital 
Profit & Loss Account 
Land & Building 
Furniture 
Machinery 
Debtors 
Bank 
 
500 
10,000 
1,00,000 
50,000 
90,000 
36,500 
5,000 
  2,92,000 2,92,000 
 
Date Particulars L F Dr. Amount 
(Rs.) 
Cr. Amount 
(Rs.) 
 
 
 
Machinery Account                                             Dr.           
     To Modern Equipment Manufacturers Limited 
(Purchased machinery for Rs. 7,00,000 from 
Modern Equipment Manufacturers Limited  ) 
 7,00,000 
 
 
 
6,65,000 
20,000 
 
 
 
 
 
 
 
 
 
35,000 
 
 
 
7,00,000 
 
 
 
 
1,00,000 
5,00,000 
75,000 
10,000 
 
 
 
 
 
 
35,000 
Modern Equipment Manufacturers Ltd.  A/C    Dr. 
Loss on Issue of 9 % Debentures Account  Dr.  
     To 9 % Debentures Account  
     To Equity Share Capital Account 
      To   Securities Premium  Reserve Account 
      To  Premium on Redemption of Debentures A/C 
(Issued Rs. 1,00,000  9 % debentures at a 
discount of 10 %,redeemable at a premium of 10 
% and 50,000 equity shares of Rs. 10 each issued 
at a premium of 15 %) 
Modern Equipment Manufacturers Ltd.  A/C   Dr.                             
     To  Bills Payable Account 
(Acceptance given to Modern Equipment 
Manufacturers Limited)