NEO CONVENT SR. SEC. SCHOOL, PASCHIM VIHAR, NEW DELHI.

CLASS XII DATE: 8.1.24

Time: 3 hrs ACCOUNTANCY (055) PRE BOARD 1 M.M. 80
NAME ………. SEC ……. ROLL NO. ……… INVIGILATOR’S SIGN ……..
Number of pages:

General Instructions:

1. This question paper contains 34 questions. All questions are compulsory.

2. This question paper is divided into two parts, Part A and B.
3. Question Nos.1 to 16 and 27 to 30 carries 1 mark each.
4. Questions Nos. 17 to 20, 31and 32 carries 3 marks each.
5. Questions Nos. from 21 ,22 and 33 carries 4 marks each
6. Questions Nos. from 23 to 26 and 34 carries 6 marks each

PART A
(Accounting for Partnership Firms and Companies)
1. Accounting Standard-26 requires that goodwill is to be recorded in the books of accounts
only when money or money’s worth has been paid for it. At the time of admission, Vivaan, a new
partner was unable to bring in his share of goodwill in cash, so according to Accounting Standard-
26 his: (16x1)
(a) Current A/c will be credited
(b) Current A/c will be debited
(c) Capital A/c will be debited
(d) Capital A/c will be credited

2. Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative
from those given below.
Assertion: Michael, Mike and Stephen were partners sharing profits and losses in the ratio
3:2:1. Stephen being a partner wants that he should be exempted from sharing the losses in the
firm. Reasoning: According to Partnership Act 1932,”It may be agreed between the partners
that one or more of them shall not be liable for losses.”
Alternatives:

(a) Both A and R are correct, and R is the correct explanation of A.

(b) Both A and R are correct, but R is not the correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.

3. According to Sec 50 of the Companies Act 2013, the amount of Calls in Advance can
be accepted by the Company only when it is authorised by:
(a) Board of Directors
(b) Equity Shareholders
(c) Articles of Association
(d) Memorandum of Association
4. Danish, Zaid and Mihir who were sharing profits and losses equally decided to share the
st
future profits and losses in the ratio to 5:4:3 with effect from 1 April 2023. An extract of their
st
Balance Sheet as at 31 March 2023 is:
Liabilities Amount Assets Amount
Investment Fluctuation 85,000 Investments( At 8,00,000
Reserve Cost)
At the time of reconstitution, if the market value of Investment was Rs.7,06,000, the
Revaluation A/c will be:
(a) Debited with 15,000
(b) Debited with 9,000
(c) Credited with 2,000
(d) Credited with 12,000

5. Mike and Ken were two partners sharing profits and losses in the ratio 4:3. Ken was in need
of funds so he took a loan of Rs.50,000 from the firm at an agreed rate of interest being 10% p.a.
If Interest is charged on loan to the partner it will be:
(a) Debited to Profit and Loss A/c
(b) Credited to Profit and Loss A/c
(c) Debited to Profit and Loss Appropriation A/c
(d) Credited to Profit and Loss Appropriation A/c

6. Cadilla Ltd. allotted 2,000 8% Debentures of Rs. 100 each to their underwriters to pay
their commission.
Which of the following journal entry is correct, if 8% Debentures are allotted to underwriters?
(a) 8% Debentures A/c Dr
To Underwriting Commission A/c
(Commission due to them)
(b) 8% Debentures A/c Dr
To Underwriter’s A/c
(8% Deb. Allotted for Commission due
to them)
(c) Underwriter’s A/c Dr
To Underwriting Commission A/c
(Commission due to them)
(d) Underwriter’s A/c Dr
To 8% Debentures A/c
(8% Deb. Allotted for Commission due
to them)

7. Read the following statements: Assertion (A) and Reason (R). Choose the correct
alternative from those given below.
Assertion (A) :- Under Section 62(1)(b) of the Companies Act, 2013, a Company may offer
shares to its employees under a scheme of ‘Employees Stock Option’ which means the option
(right) given to the whole-time directors, officers or permanent employees of a company to
purchase or subscribe the securities offered by the company at a future date, at a pre-
determined price, which is lower than the market price.
Reason (R) :- The company need not to pass a special resolution to this effect.
Alternatives:

(a) Both Assertion (A) and Reason (R) are Correct and Reason (R) is the correct explanation
of Assertion (A)
(b) Both Assertion (A) and Reason (R) are Correct, but Reason (R) is not the correct
explanation of Assertion (A)
(c) Assertion (A) is incorrect, but Reason (R) is Correct.
(d) Assertion (A) is correct, but Reason (R) is incorrect

8. Neil, Nitin and Nitesh were partners in the firm sharing profits and losses equally. Neil
retires from the firm and on his retirement, he is entitled for the payment due to him after all the
adjustments.
At the time of retirement, if nothing is mentioned about the payment made due to him,
in which account, the amount will be transferred:
(a) Retiring Partner’s Current A/c
(b) Retiring Partner’s Capital A/c
(c) Retiring Partner’s Loan A/c
(d) Retiring Partner’s Bank A/c

Read the following hypothetical situation and answer question no. 9 and 10.
Ana and Anne started a partnership business on 1st April, 2022. Their capital contributions
were Rs. 3,00,000 and Rs. 1,00,000 respectively. Ana rented her property to carry on business
for Rs.2,500 p.m. Interest on capitals @12% p.a. Ana, to get a salary of Rs. 4,000 p.m. Anne to
get a commission of 2% of the net profit. Profits are to be shared in the ratio of 3:2. The profits
for the year ended 31st March, 2023 before providing for rent was Rs. 2, 00,000.
Dr. Profit and Loss Appropriation Account Cr.
st
for the year ended 31 March, 2023
Particulars Rs. Particulars Rs.
To Interest on capital: By Profit and Loss A/c ______(2)
Ana _______
Anne _______

To Partner’s Salary: Ana 48,000

To Anne’s commission ______(1)

To Profit transferred to
Ana’s Capital A/c _______
Anne’s Capital A/c _______
_______ _______

9. The amount to be reflected in blank (1) will be:

(a) Rs.3,720 (b) Rs.3,400 (c) Rs. 2,800 (d) Rs.2,940

10. The amount to be reflected in blank (2) will be:

(a) Rs.1,62,000
(b) Rs. 1,74,500
(c) Rs. 1,71,400
(d) Rs.1,70,000

11. Which of the following is a right of a partner?

(a) sharing profits and losses with other partners in the agreed ratio
(b) inspecting and having a copy of the books of accounts
(c) retiring from the firm without giving proper notice
(d) taking part in the misconduct of the business

(i) Only (b) and (c)

(ii) Only (c)
(iii) Only (a) and (b)
(iv) Only (a) and (d)

12Mayfair Ltd. forfeited 2,000 shares of Rs.10 each, Rs.7 called up, on which only Rs. 4 per share
(including Rs.2 premium) and Rs.2 per share on first call has not been paid. Out of these
500 shares were re-issued as fully paid that Rs. 750 was transferred to Capital Reserve. On re-
issue, how much amount will be transferred to Bank A/c?
(a) Rs. 3,250
(b) Rs. 4,250
(c) Rs. 2,250
(d) Rs. 5,500

13 Skyline Ltd. took over running business worth Rs. 70,00,000 from Grand Ltd. by paying
20% through bank draft and balance by issue of shares of Rs.100 each at a premium of 10%.
The entry to be passed by Skyline Ltd for settlement will be :-
(a)
Grand Ltd. Dr. 70,00,000
To Share Capital A/c 50,90,909
To Securities Premium A/c 5,09,090
To Bank A/c 14,00,000
To Statement of Profit and Loss 1
(Settlement of amount due to vendors)

(b)
Grand Ltd. Dr. 70,00,000
To Share Capital A/c 50,90,909
To Securities Premium A/c 5,09,090
To Bank A/c 14,00,001
(Settlement of amount due to vendors)

(c)
Grand Ltd. Dr. 70,00,000
To Share Capital A/c 50,90,909
To Securities Premium A/c 5,00,090
To Bank A/c 14,00,000
(Settlement of amount due to vendors)
(d)

Grand Ltd. Dr. 70,00,000

To Share Capital A/c 50,00,000
To Securities Premium A/c 5,09,090
To Bank A/c 14,00,000
(Settlement of amount due to vendors)

14. David and Garry are partners in a firm with capitals of Rs. 90,000 and Rs. 80,000
th
respectively. Zenith brings Rs.70,000 as his capital for 1/4 share in profits. Zenith’s share
of goodwill will be:
(a) Rs. 34,000.
(b) Rs. 29,000.
(c) Rs.10,000.
(d) Rs.14,000.

15. Edward and Hayward are partners. Edward draws a fixed amount at the beginning of every
quarter. Interest on drawings is charged @10% p.a. At the end of the year, interest on Edward’s
drawings amounted to Rs.7,500. Drawings of Edward were:
(a) Rs. 34,000 per quarter.
(b) Rs. 44,000 per quarter
(c) Rs. 30,000 per quarter
(d) Rs. 60,000 per quarter

16. At the time of dissolution, Harry, a creditor of the firm agreed to take over the furniture
of the book value of Rs. 1,00,000 at Rs. 89,000 and the balance in cash in full settlement of
his account of Rs.1,10,000.
Which journal entry will be passed for the balance to be paid in cash?
(a) Realisation A/c Dr. 35,000
To Bank A/c 35,000
(b) Realisation A/c Dr. 21,000
To Bank A/c 21,000
(c) Realisation A/c Dr. 11,000
To Bank A/c 11,000
(d) Realisation A/c Dr. 15,000
To Bank A/c 15,000

17. Mac, Jack and Lac were partners in a firm sharing profits and losses in the ratio of 2:2:1
Balance Sheet (extract) (4x3)
as at 31st March, 2023
Liabilities (Rs) Assets (Rs)
Workmen’s Compensation Reserve 5,00,000
On Jack’s retirement from the firm on 1st April, 2023, he had a balance of Rs.8,00,000 (cr.) in his
capital account. The liability of Workmen’s Compensation Reserve was Rs. 5,75,000. You are
required to pass journal entries and show how much amount is transferred to his loan account?

18. Viraf, Virat and Vaibhav were partners with capitals of Rs 2,30,000, Rs 1,20,000and Rs.2,40,000.
After distributing the profit of 5,20,000 for the year ended 31st March 2023 in their agreed ratio of
3:2:1 it was observed that:
Interest on capital was provided at 14% p.a. instead of 10% p.a. You are required to pass adjustment
entry.

19. Glen Ltd. took over the running business of Hayward Ltd. having assets of Rs.22,00,000 and
liabilities of Rs.6,00,000 by issuing 20,000, 11% Debentures of Rs. 100 each at 5% discount. You
are required to pass the journal entries in the books of Glen Ltd. if debentures were redeemed at 10%
premium.

20. Kate and Vincet were partners in a firm. On 1st April, 2022, the firm had assets of Rs.90,000
including cash of Rs. 8,000. The partners’ capital accounts showed a balance of Rs. 70,000 and
reserves constituted the rest. The normal rate of return is 30% and average profits of the firm are
valued at Rs. 47,000.
You are required to find out the value of goodwill of the firm at 4 years purchase of super profits.

21 . Klen Ltd. was registered with an authorized capital of Rs 10,00,000 divided into Equity Shares of
Rs 10. Out of these 8,000 shares were issued to vendors as fully paid as purchase consideration for a
business acquired. The company offered 20,000 shares for public subscription and called up Rs.8 per
share and received the entire amount..
You are required to prepare the Balance Sheet of the company as per Schedule III of Companies
Act, 2013, showing Share Capital balance and also prepare Notes to Accounts. (2x4)

22. Carol and Lacy were partners. They decided to dissolve their firm. Pass the journal entries for the
following after various assets and external liabilities have been transferred to Realisation A/c:
1.Carol took over half of the investments worth Rs. 30,000 at 2% discount and the remaining
investments were sold at a profit of 18% of the book value.
2.Lacy is allowed a remuneration of Rs. 13,000 for dissolution work and is to bear all the
expenses of realisation which amounted to Rs. 5,000 were paid by the firm.
3. Carol had given a loan of Rs. 89,000 to the firm which was duly paid.
4. Lacy agreed to pay off her brother’s loan of Rs. 13,000 at a discount of 5%.

23. Royal Fans Ltd. invited applications for 1,00,000 Equity Shares of Rs.100 each at a premium of
10%. The amount was payable as follows: (4x6)
On Application Rs. 50 per share
On Allotment Rs. 35 per share (including premium)
On First and Final Call Rs. 25 per share
Applications for 1,50,000 shares were received. Applicants for 25,000 shares did not get any
allotment and their money returned. Allotment was made pro-rata to the remaining applicants.
Excess application money was adjusted towards sum due on allotment. Mr. Hanoz who was allotted
600 shares failed to pay the amount due on allotment and call money. The company forfeited his
shares and subsequently re-issued at Rs 110 per share fully paid-up. You are required to pass journal
entries to record the above transactions in the books of the company.
st
24. On 31 March 2023 the Balance sheet of Zoya and Zara who were sharing profits and losses in the
ratio of 3:2 was as follows:
Liabilities Amount (Rs.) Assets Amount (Rs.)
Creditors 29,000 Cash at bank 9,000
Bills payable 6,000 Debtors 20,000
General reserves 16,000 Less : Provision 1000 19,000
Capitals Stock 15,000
Zoya 50,000 Land and Building 25,000
Zara 35,000 85,000 Plant and Machinery 30,000
Goodwill 10,000
Profit and Loss account 28,000
1,36,000 1,36,000
th st
They decided to admit Sara for 1/5 share on 1 April, 2022 in the firm on the following terms:
(a) Goodwill of the firm is valued at Rs 28,000.
(b) Depreciate Plant and Machinery by 10%, appreciate Land and Building by 40%.
(c) The provision for doubtful debts was to be increased by Rs. 800.
(d) A liability of Rs. 1,000 included in the creditors is not likely to arise.
(e) New profit sharing ratio between Zoya, Zara and Sara shall be 5:3:2 respectively.
th
(f) Sara was to contribute capital equal to 1/5 of the total capital of Zoya and Zara after all
adjustments.
You are required to prepare Revaluation Account and Partners’ Capital Accounts.

25. Ester, Emma and Lucy were partners in a firm sharing profits in the ratio of 2: 2: 1. The firm closes its
books on 31st March every year. On 30th September, 2022 Lucy died. The partnership deed provided that
on the death of a partner her executors will be entitled to the following:
(a)Balance in her capital account which amounted to Rs. 3,15,000 and interest on capital @9%. (b)Her
share in the profits of the firm till the date of her death amounted to Rs.70,000.
(c) Her share in the goodwill of the firm. The goodwill of the firm on Lucy’s death was valued at
Rs. 1,50,000. You are required to calculate the amount to be transferred to Lucy’s Executors A/c.

26. Akon Ltd issued 12,000, 14% debentures of Rs 100 each on 1st April, 2021. The issue was fully
subscribed. According to the terms of issue, interest on debentures is payable half- yearly on 30th
September and 31st March.
You are required to pass the necessary entries related to the debenture interest for the year ending on 31st
March, 2022 and transfer of interest on debentures to statement of profit and loss.

PART B
(Analysis of Financial Statements)
27. Operating Cycle is the time between the acquisition of assets for processing and their
realisation into: (4x1)
(a) Current Assets
(b) Non- current Assets
(c) Other Current Assets
(d) Cash and Cash Equivalents
28. Vibgyor Ltd. has current assets worth Rs. 3,50,000 and it needs to pay off its obligations worth
Rs.2,00,000. If the firm has to make a payment of a current liability worth Rs.50,000, what will be
the current ratio:
(a) 3:1
(b) 0.75:1
(c) 1:1
(d) 2:1

29. Statement I: Increase in provision for doubtful debts should be added back for calculating cash
from operations.
Statement II: Dividend received is a Financing Activity.

(a) Statement I is correct and Statement II is incorrect

(b) Statement I and II is correct
(c) Statement I and Statement II is incorrect
(d) Statement I is incorrect, and Statement II is correct

30. Prayas Ltd. made a profit of Rs. 1,75,000 after considering the following items:
(i) Goodwill written off Rs. 6,000
(ii) Depreciation on Furniture Rs.3,400
(iii) Loss on sale of Building Rs. 89,000
(iv) Gain on sale of Land Rs. 4,250
Operating Profit before Working Capital changes will be:
(a) Rs. 2,25,149
(b) Rs. 2,69,150
(c) Rs. 2,35,160
(d) Rs. 2,53,145

31. Classify the following items under Major heads and Sub heads (If any) in the Balance Sheet
of Beltek Ltd. as per Schedule III of the Companies Act, 2013. (2x3)
Particulars Amount
Building under construction. 80,000
Unpaid Dividend 63,000
Securities Premium 47,000
Interest Accrued and due on Unsecured Loan. 6,000
Design 49,000
Mortgage Loan 1,10,000

st
32. Following is the Balance Sheet of Yorkshire Ltd. as at 31 March, 2023
 Particulars 31.3.2023
I. EQUITY AND LIABILITIES:
(1) Shareholders’ funds
(a) Share capital 2,10,000
(b) Reserves and surplus 2,800
(2) Non- Current liabilities
Long term Borrowings( 12% Debentures) 60,000
(2) Current liabilities
(a) Trade Payable 20,000
(b) Other current liabilities 2,000
(c) Short-term provisions 20,000
TOTAL 3,14,800
II. ASSETS:
(1) Non-current Assets
(a) Property, Plant and Equipment and Intangible Assets
(i) Property, Plant and Equipment 1,96,400
(ii) Intangible Assets 18,800
(b)Non-current investments 14,000
(2) Current assets
(a) Inventories 31,200
(b) Trade Receivables 43,200
(c) Cash and Cash Equivalents 11,200
TOTAL 3,14,800
You are required to calculate:
(i) Debt to Equity Ratio
(ii) Current Ratio
(iii) Return on Investment

33 Prepare Comparative Statement of Profit and Loss of Gem Ltd. from the following: (4)
Particulars Note No. 2023 2022
Revenue from operations 20,00,000 15,00,000
Other income 10,00,000 4,00,000
Expenses 21,00,000 15,00,000
Rate of income tax was 50%.

34. From the following Balance Sheet of Havels Ltd., you are required to prepare a Cash Flow
Statement: (6)
Havels Ltd.
Balance Sheet as at 31-3-2023

Particulars Note 31-3-23 31-3-22

No. (Rs.) (Rs.)
I. Equity and Liabilities
(1) Shareholders Funds
(a) Share Capital 7,90,000 5,80,000
 (b) Reserves and Surplus 1 4,60,000 1,20,000
(2) Non - Current Liabilities
Long term Borrowings 2 5,00,000 3,00,000
(3) Current Liabilities
(a) Short term borrowings 3 1,15,000 42,000
(b) Short term Provisions 4 1,18,000 46,000
Total 19,83,000 10,88,000

II. Assets
(1) Non-Current Assets
(a)Property, Plant and Equipment and Intangible Assets
(i) Property, Plant and Equipment 5 9,80,000 6,35,000
(ii) Intangible Assets 6 2,68,000 1,70,000
(2) Current Assets
(a) Current Investments 1,40,000 70,000
(b) Trade Receivables 4,40,000 1,50,000
(c) Cash and Cash Equivalents 1,55,000 63,000
Total 19,83,000 10,88,000
Notes to Accounts:
Not Particulars 31-3-23 31-3-22
e (Rs.) (Rs.)
No.
1. Reserve and Surplus
Surplus (Balance in statement of Profit & Loss) 3,20,000 60,000
General Reserve 1,40,000 60,000
4,60,000 1,20,000
2. Long-term Borrowing
12% Debentures 5,00,000 3,00,000
5,00,000 3,00,000
3. Short-term Borrowing
Bank Overdraft 1,15,000 42,000
1,15,000 42,000
4. Short-term Provisions
Provision for Tax 1,18,000 46,000
1,18,000 46,000
5.
Plant and Machinery 11,00,000 7,50,000
Less: Accumulated Depreciation (1,20,000) (1,15,000)
9,80,000 6,35,000
6. Intangible Assets
Patents 2,68,000 1,70,000
2,68,000 1,70,000
Additional Information:
12% debentures were issued on 1st September, 2022