SOLUTION : PRACTICE PAPER 3

Q. 1. (A) (1) Fixed Assets

(2) added
(3) cash or in kind
(4) Cash / Bank
(5) Negotiable instrument
Q. 1. (B) (1) Disagree
(2) Disagree
(3) Agree
(4) Agree
(5) Disagree
Q. 1. (C) (1) Advertisement expense paid for 2 years from 1st Jan. 2023. Therefore, up to 31-3-23,
3 months adv. exp. is to be written off. It is calculated as follows.
3
= 20,000 × = ` 2,500
24
∴ Prepaid Adv. Exp. = 20,000 − 2,500 = ` 17,500.

(2) Amount
(`)
Subscription received 2,00,000
Add : o/s subscription 20,000
2,20,000
Less : Pre received subscription 40,000
Net subscription of the year 1,80,000

1 1
(3) New ratio for Kalpana = , Neha =
2 2
3 2
Old ratio for Kalpana = , Neha =
9 9
Now, Gain ratio = New ratio − Old ratio
1 3 9−6 3
∴ Kalpana’s Gain ratio = − = =
2 9 18 18
1 2 9−4 5
Neha’s Gain ratio = − = =
2 9 18 18
3 5
∴ Gain ratio for Kalpana and Neha = : = 3:5
18 18

Book value
(4) Revised value of machinery = × 100
100 − % of undervaluation
80,000
= × 100 = ` 1,00,000
100 − 20

SOLUTIONS TO NAVNEET PRACTICE PAPERS : STD. XII (B.K.) 1

 ∴ Increase in the value of machinery = 1,00,000 − 80,000
= ` 20,000

(5) Net sales = Sales − Sales return

= 9,50,000 − 70,000
= ` 8,80,000
Cost of goods sold + Operating expense
Operating ratio = × 100%
Net sales
2,00,000 + 20,000
= × 100
8,80,000
= 25%
Q. 1. (D) (1) Balance sheet is prepared to know the financial position of the business in the form of its
assets and liabilities on a particular date.
(2) The fees which is paid by the persons who wish to become a member of the organisation
are called entrance fees.
(3) Profit sharing ratio which is acquired by the continuing partners on account of retirement
or death of a partner is called Benefit ratio or Gain ratio.
(4) Profit of the deceased partner, up to the date of his death is transferred to his Legal
Heir’s / Executor’s Account.
(5) The debit balance of insolvent partner’s Capital Account which insolvent partner cannot
pay is called capital Deficiency.

Q. 2. Solution :
Dr. Profit and Loss Adjustment Account Cr.
Amount Amount
Particulars Particulars
(`) (`)
To Machinery A/c 5,600 By Building A/c 8,000
To Furniture A/c 240 By Stock A/c 7,200
To R.D.D. A/c 3,600
To Partners’ Capital A/c
Nirav 3,456
Niraj 2,304 5,760
15,200 15,200

Dr. Partners’ Capital Accounts Cr.

Nirav Niraj Nirali Nirav Niraj Nirali
Particulars Particulars
(`) (`) (`) (`) (`) (`)
To Balance c/d 64,256 61,504 24,000 By Balance b/d 56,000 56,000 –
By Goodwill A/c 4,800 3,200 –
By Bank A/c – – 24,000
By Profit and Loss
Adjustment A/c 3,456 2,304 –
(Profit)
64,256 61,504 24,000 64,256 61,504 24,000

2 NAVNEET PRACTICE PAPERS : STD. XII (COMMERCE)

 Balance Sheet as on 1st April, 2024
Amount Amount Amount Amount
Liabilities Assets
(`) (`) (`) (`)
Capital A/cs : Building 40,000
Nirav 64,256 Add : Appreciation 8,000 48,000
Niraj 61,504 Machinery 56,000
Nirali 24,000 Less : Depreciation 5,600 50,400
Creditors 99,200 Furniture 2,400
Less : Depreciation 240 2,160
Stock 32,800
Add : Appreciation 7,200 40,000
Debtors 72,000
Less : R.D.D. 3,600 68,400
Cash at Bank 40,000
2,48,960 2,48,960

OR

Q. 2. Solution : In the books of the firm

Dr. Revaluation Account Cr.
Amount Amount
Particulars Particulars
(`) (`)
To Investments A/c 1,500 By R.D.D. 1,800
To Fixed Assets A/c 3,000 By Partner’s Capital A/c
To Delivery van A/c 1,800 Prakshal 1,500
Poojan 1,500
Parth 1,500 4,500
6,300 6,300

Balance Sheet of the New Firm as on 1st April, 2024

Amount Amount Amount Amount
Liabilities Assets
(`) (`) (`) (`)
Creditors 15,750 Investments 22,500
Bank Loan 7,500 Less : Loss 1,500 21,000
Prakshal’s Loan A/c 55,050 Fixed Assets 60,000
Capital A/c : Less : Depreciation 3,000 57,000
Poojan 52,200 Delivery Van 37,500
Parth 49,500 1,01,700 Less : Depreciation 1,800 35,700
Debtors 24,000
Less : R.D.D. 1,200 22,800
Goodwill 7,500
Cash 36,000
1,80,000 1,80,000

SOLUTIONS TO NAVNEET PRACTICE PAPERS : STD. XII (B.K.) 3

Dr. Partners’ Capital Accounts Cr.

Prakshal Poojan Parth Prakshal Poojan Parth

Particulars Particulars
(`) (`) (`) (`) (`) (`)
To Revaluation A/c 1,500 1,500 1,500 By Balance b/d 43,050 47,700 45,000
To Prakshal’s By General
Loan A/c 55,050 – – Reserve A/c 6,000 6,000 6,000
To Balance c/d – 52,200 49,500 By Goodwill A/c 7,500 – –
56,550 53,700 51,000 56,550 53,700 51,000

Q. 3. Solution : In the Books of Badshah, Raja and King

Dr. Realisation Account Cr.

Amount Amount Amount Amount

Particulars Particulars
(`) (`) (`) (`)
To Sundry Assets A/c By Sundry Liabilities A/c
Furniture 18,400 Other liabilities 11,200
Goodwill 1,200 Keyur’s Loan 9,600 20,800
Debtors 10,000 By Badshah’s Capital A/c
Receivable Claim 1,200 30,800 (Plant) 1,600
To Bank A/c By Bank A/c
Creditors 9,120 Furniture 14,400
Bills Payable 1,520 10,640 Goodwill 6,000
To Bank A/c Receivable Claim 960
(Realisation Expenses) 1,600 Debtors 9,000 30,360
To Bank A/c By Partners’ Capital A/c
Keyur’s (Loss on realisation
Loan 9,600 transferred)
Interest 480 10,080 Badshah 144
Raja 144
King 72 360
53,120 53,120

Dr. Partners’ Capital Accounts Cr.

Badshah Raja King Badshah Raja King

Particulars Particulars
(`) (`) (`) (`) (`) (`)
To Realisation A/c 1,600 – – By Balance b/d 4,800 3,200 2,400
To Realisation A/c 144 144 72
To Bank A/c 3,056 3,056 2,328
4,800 3,200 2,400 4,800 3,200 2,400

4 NAVNEET PRACTICE PAPERS : STD. XII (COMMERCE)

Dr. Bank Account Cr.

Amount Amount
Particulars Particulars
(`) (`)
To Balance b/d 400 By Realisation A/c 10,080
To Realisation A/c 30,360 By Realisation A/c
(Realisation Expenses) 1,600
By Realisation A/c (Other Liabilities) 10,640
By Badshah’s Capital A/c 3,056
By Raja’s Capital A/c 3,056
By King’s Capital A/c 2,328
30,760 30,760

OR

Q. 3. Solution : In the books of Asit

Journal Entries

Debit Credit
Date Particulars L.F.
Amount (`) Amount (`)
2024
Aug. 10 Ashita’s A/c Dr. 29.400
To Sales A/c 29.400
(Being goods sold on credit)
10 Bills Receivable A/c Dr. 29.400
To Ashita’s A/c 29.400
(Being bill drawn and acceptance received)
10 Bank A/c Dr. 28,700
Discount A/c Dr. 700 29.400
To Bills Receivable A/c
(Being Ashita’s acceptance discounted with bank)
Nov. 13 Ashita’s A/c Dr. 29,610
To Bank A/c 29,610
(Being Ashita’s acceptance discounted with bank, now
dishonoured and noting charges paid by the bank.)

In the books of Ashita

Journal Entries

Debit Credit
Date Particulars L.F.
Amount (`) Amount (`)
2024
Aug. 10 Purchase A/c Dr. 29.400
To Asit’s A/c 29.400
(Being goods purchased on credit)

SOLUTIONS TO NAVNEET PRACTICE PAPERS : STD. XII (B.K.) 5

 10 Asit’s A/c Dr. 29.400
To Bills Payable A/c 29.400
(Being our acceptance given)
Nov. 13 Bills Payable A/c Dr. 29,400
Noting Charges A/c Dr. 210
To Asit’s A/c 29,610
(Being our acceptance dishonoured and noting charges
payable)

Q. 4. Solution : Journal Entries in the books of Shivansh Ltd.

Date/ Debit Credit

Particulars L.F.
No. Amount (`) Amount (`)
1 Bank A/c Dr. 90,000
To Equity Share Application A/c 90,000
( Being application money ` 2 per share received on 45,000
shares)
2 Equity Share Application A/c Dr. 90,000
To Equity Share Capital A/c 90,000
( Being application money transferred to Share Capital A/c)
3 Equity Share Allotment A/c Dr. 1,35,000
To Equity Share Capital A/c 1,35,000
( Being allotment money ` 3 per share due on 45,000 equity
shares)
4 Bank A/c Dr. 1,35,000
To Equity Share Allotment A/c 1,35,000
( Being allotment money due on equity shares received)
5 Equity Share First Call A/c Dr. 1,35,000
To Equity Share Capital A/c 1,35,000
( Being first call money ` 3 per share due on 45,000 equity
shares)
6 Bank A/c Dr. 1,35,000
To Equity Share First Call A/c 1,35,000
( Being first call money received on all 45,000 equity shares)
7 Equity Share Second and Final Call A/c Dr. 90,000
To Equity Share Capital A/c 90,000
( Being second and final call money ` 2 per share due on
45,000 shares)
8 Bank A/c Dr. 86,000
Equity Share Calls-in-Arrears A/c Dr. 4,000
To Equity Share Second and Final Call A/c 90,000
( Being second and final call received on all shares except
2,000 equity shares)

6 NAVNEET PRACTICE PAPERS : STD. XII (COMMERCE)

 OR
Q. 4. Features of Computerised Accounting System :
(1) Integrated date and Information : Computerised Accounting System is developed and designed
for all business activities like purchase, sales, finance, inventory, payroll and manufacturing,
which is user friendly, automated and integrated for such process. Due to Computerised
Accounting System, businessmen keep their accounting records accurate, up-to-date and get
information within no time. When Computerised Accounting is mixed with Management
Information System (MIS) with multilingual and Data Organisation capabilities to support the
company, then all the business operations will be easy and cost effective.
(2) Accuracy and Speed : As per the need of business, Computerised Accounting has various
templates and software due to which fast and accurate data entry and transactions operations
are possible which generates various information and reports quickly and automatically.
(3) Quick Decision Making : Based on information and reports generated by Computerised
Accounting System, the company or firm can plan its activities, can take quick decision and
can access complete and critical information of the company.
(4) Modern and Integrated : Computerised Accounting System performs functions at much higher
speed than the speed of human beings which saves time and other resources. If accounts are
prepared with the help of computer, Trial balance and Final accounts can be derived at any
point of time within fraction of seconds.
(5) Immediate Availability of Books of Accounts : Due to Computerised Accounting System,
books and registers like Cash book, Purchase register, Sales register, Bank book, Accounts of
Receivables and Payables are readily available at any point of time.
(6) Security : By keeping security control at various stages, data and information in Computerised
Accounting System can be kept confidential and more secured. This kind of security is not
possible in the traditional accounting system.
(7) Transparency : For the business, greater transparency is possible in the day-to-day business
operations due to Computerised Accounting System.
(8) Grouping of Accounts : In the Computerised Accounting System, grouping of Accounts is
easily possible. As per the business requirements, groups like Assets, Liabilities, Income,
Expenditure, etc. and their subgroups can be derived as per convenience of user.

Q. 5. Solution : In the books of the Partnership Firm

Dr. Profit and Loss adjustment account Cr.

Amount Amount
Particulars Particulars
(`) (`)
To Motor car 1,200 By Machinery 2,400
To Investment 600 By R.D.D. A/c 1,200
To Partners’ Capital A/cs
Vrushti 900
Prushti 600
Shrusti 300 1,800
3,600 3,600

SOLUTIONS TO NAVNEET PRACTICE PAPERS : STD. XII (B.K.) 7

Dr. Shrusti’s Capital Accounts Cr.

Amount Amount
Particulars Particulars
(`) (`)
To Shrusti’s Executor A/c 9,150 By Balance b/d 6,000
By Profit and Loss Adjustment A/c
(Profit) 300
By Goodwill A/c 2,400
By Profit and Loss Suspense A/c 450
9,150 9,150

(3) Calculation of Goodwill :

3,600 + 6,600 + 4,200 + 7,200 + 14,400
Average profit =
5
36,000
= = ` 7,200
5
Goodwill = Average profit × 2 years’ purchases
= 7,200 × 2 = ` 14,400

Shrusti’s share in goodwill of the firm

= Goodwill of the firm × Shrusti’s share

1
= 14,400 × = ` 2,400
6

(4) Profit up to the date of death of Shrusti :

7,200 + 14,400
Average profit =
2
21,600
= = ` 10,800
2

Profit of the firm = Average profit × Period

3
= 10,800 × = ` 2,700
12

Shrusti’s share in profit = Profit of the firm × Shrusti’s share

1
= 2,700 × = ` 450
6

OR

8 NAVNEET PRACTICE PAPERS : STD. XII (COMMERCE)

Q. 5. Solution : Cash Flow Statement
For the year ended 31st March, 2023 and 31st March, 2024

Particulars Amount (`) Amount (`)

(A) Cash flow from Operating activities

Closing balance of Profit and Loss A/c 23,000
Less : Opening balance of Profit and Loss A/c 10,000
13,000
Add : Decrease in Current Assets – Debtors 5,000
18,000
Less : Increase in Current Assets – Stock (10,000)
Less : Decrease in Current Liabilities – Creditors (25,000)
Net Cash from Operating activities (A) (17,000)
(B) Cash flow from Investing activities
Purchase of Land 16,000
Net Cash used in Investing activities (B) 16,000
(C) Cash flow from Financing activities
Amount of share capital received 50,000
Net Cash used in Financing activities (C) 50,000
Net increase in cash and cash equivalent (A + C − B) 17,000
Cash equivalent in the beginning of period 30,000
Cash equivalent at the end of period 47,000

Q. 6. Solution : In the books of Ananya Art

Dr. Income and Expenditure Account for the year ended 31st March, 2024 Cr.

Amount Amount Amount Amount

Expenditure Income
(`) (`) (`) (`)
To Stationery 11,200 By Donations 50,400
To Office Rent 7,280 Less : 50% Capitalised 25,200 25,200
To Newspapers and By Subscription 1,12,000
Periodicals 840 Add : Outstanding of
To Telephone Expenses 1,568 Current Year 14,000 1,26,000
To Depreciation Furniture 3,360
To Surplus 1,26,952
(Excess of income over
expenditure)
1,51,200 1,51,200

SOLUTIONS TO NAVNEET PRACTICE PAPERS : STD. XII (B.K.) 9

 Balance Sheet as on 31st March, 2024

Amount Amount Amount Amount

Liabilities Assets
(`) (`) (`) (`)
Capital Fund – Furniture 33,600
Add : Surplus 1,26,952 Less : Depreciation 3,360 30,240
Add : Admission Fees Investments 64,400
(Capitalised) 61,600 Cash in Hand 21,112
Add : Donations 25,200 2,13,752 Cash at Bank 84,000
(50% Capitalised) Outstanding Subscription 14,000
2,13,752 2,13,752

Working Note :
Full amount of admission fees and 50% of donations are added to surplus amount to get capital fund.
(Opening balance of capital fund is not given since it is newly established concern.)

Q. 7. Solution : In the books of Heet and Het

Dr. Trading and Profit and Loss Account for the year ended 31st March, 2024 Cr.

Amount Amount
Particulars Particulars
(`) (`)
To Opening stock 61,600 By Sales 1,99,100
To Purchases 1,60,000 By Goods stolen away 16,000
To Import duty 15,000 By Closing stock 70,000
To Gross profit c/d 48,500
2,85,100 2,85,100

Dr. Profit and Loss Account for the year ended 31st March, 2024 Cr.

Amount Amount Amount Amount

Particulars Particulars
(`) (`) (`) (`)
To Printing and Stationery 2,100 By Gross profit b/d 48,500
To Advertisement 70,000 By Net loss
To Bad debts (Old) 1,000 (Transferred to
Add : R.D.D. (New) 2,150 3,150 partners’ capital A/cs)
To Depreciation on office Heet 16,385
equipments 2,020 Het 16,385 32,770
To Loss due to theft 4,000
81,270 81,270

10 NAVNEET PRACTICE PAPERS : STD. XII (COMMERCE)

 Balance Sheet as on 31st March, 2024

Amount Amount Amount Amount

Liabilities Assets
(`) (`) (`) (`)
Capital A/c : Heet Sundry Debtors 86,000
Opening balance 1,20,000 Less : R.D.D. (2.5%) 2,150 83,850
Less : Net loss 16,385 1,03,615 Office equipments 40,400
Capital A/c : Het Less : Depreciation 2,020 38,380
Opening balance 1,20,000 Cash in hand 14,000
Less : Net loss 16,385 1,03,615 Fixed deposit 30,000
Sundry Creditors 41,000 Closing stock 70,000
O/s Insurance claim 12,000
2,48,230 2,48,230

Working Notes :
Goods of ` 16,000 stolen and insurance company admitted claim of ` 12,000 only.
∴ Loss due to theft = ` 4,000 (16,000 − 12,000)
Now, pass following effects :
(a) Trading A/c Cr. side − By Goods lost due to theft − ` 16,000
(b) Profit and Loss A/c Dr. side − To loss due to theft − ` 4,000
(c) Balance sheet Assets side − Receivable Insurance claim amount = ` 12,000
________

SOLUTIONS TO NAVNEET PRACTICE PAPERS : STD. XII (B.K.) 11