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ACCOUNTANCY MODEL TEST PAPER-1 Q1- Is it correct that interest on capital is payable whether there is profit or loss in the business? (1) Q2-*-K ,L & M were partners sharing profits in the ratio of 3:2:1. L Retired, his son N is admitted as partner in his place. The new profit sharing ratio is 3:3:2. Do you think that Goodwill is to be valued again? Why & why not? (1) Q3- In case admission of a partner which of the following reserves are not distributed between old partners? (i) Employees provident fund (ii) depreciation Reserve. (ii) Provision for tax (iv) All of the above. (1) Q4-* According to Indian Partnership Act 1932, if any partner has given some loan to the firm, he is entitled to take interest on loan @ 6% p.a. What value is depicted in this provision? (1) Q5- 6% Debentures account Rs 6,00,000. Debenture interest Rs.12,000. What amount should be shown in the statement of Profit and Loss at the end of the accounting year? (a) Rs 12,000 (b) Rs 24,000 (c ) Rs 36,000 (d) None of the above. ` (1) Q6-*A, B & C were partners having capitals 1,50,000, 75,000 & 50,000. On B’s retirement share of B was acquired by A & C in the ratio of 1:2.On that day firm’s Goodwill was valued at Rs 18,000. D was admitted for 1/5 share in profits bringing 1,50,000 as capital & 36,000 as premium. Pass necessary journal entries. (3) Q7(a) Is it correct that shares can be forefeited only if the Articles of Association of the company permits forefeiture? (3) (b) Mention any two effects of forefeiture of shares.

Class XII Accountancy Model Test Paper 1

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Page 1: Class XII Accountancy Model Test Paper 1

ACCOUNTANCY MODEL TEST PAPER-1

Q1- Is it correct that interest on capital is payable whether there is profit or loss in

the business? (1)

Q2-*-K ,L & M were partners sharing profits in the ratio of 3:2:1. L Retired, his son

N is admitted as partner in his place. The new profit sharing ratio is 3:3:2. Do you

think that Goodwill is to be valued again? Why & why not? (1)

Q3- In case admission of a partner which of the following reserves are not

distributed between old partners?

(i) Employees provident fund (ii) depreciation Reserve.

(ii) Provision for tax (iv) All of the above. (1)

Q4-* According to Indian Partnership Act 1932, if any partner has given some loan

to the firm, he is entitled to take interest on loan @ 6% p.a. What value is

depicted in this provision? (1)

Q5- 6% Debentures account Rs 6,00,000. Debenture interest Rs.12,000. What

amount should be shown in the statement of Profit and Loss at the end of the

accounting year?

(a) Rs 12,000 (b) Rs 24,000

(c ) Rs 36,000 (d) None of the above. ` (1)

Q6-*A, B & C were partners having capitals 1,50,000, 75,000 & 50,000. On B’s

retirement share of B was acquired by A & C in the ratio of 1:2.On that day firm’s

Goodwill was valued at Rs 18,000. D was admitted for 1/5 share in profits bringing

1,50,000 as capital & 36,000 as premium. Pass necessary journal entries. (3)

Q7–(a) Is it correct that shares can be forefeited only if the Articles of Association

of the company permits forefeiture? (3)

(b) Mention any two effects of forefeiture of shares.

Page 2: Class XII Accountancy Model Test Paper 1

Q8 – Impressions Ltd. forefeited 940 equity shares of Rs. 10 each issued at a

premium of Rs. 5 per share for non-payment of allotment money of Rs. 8per

share (including premium of Rs 5) and first & final call of Rs 5 per share. Out of

these 120 shares were reissued at Rs. 12 per share. Show journal entries. (3)

Q9 – *A & B are partners in a partnership firm which deals in mosquito repellents.

They decided to supply their product in different slum areas in order to restrict

water bond diseases. (4)

a) State three values that are being reflected in this case.

b) B being an active partner claims salary of Rs. 20,000 per month. State

whether his claim is valid or not.

Q 10 – Give reasons for the following: (4)

a) When an asset is taken over by a partner, his capital account is debited.

b) When a liability is discharged by a partner, his capital account is credited.

c) On the admission of a partner, assets and liabilities of the firm are revalued.

d) Interest on capital is proportionately allowed to the extent of profits if

there are insufficient profit in the firm.

Q11 – Khanna Ltd. issued 1,50,000 shares of Rs. 10 each at a discount of 10%

payable as Rs. 2, Rs. 3, Rs. 2 and Rs. 2 on application, allotment, first call and final

call respectively. Applications were received for 2,10,000 shares. It was decided

that:

a) Refuse allotment to the applications of 30,000 shares.

b) Allot 30,000 shares to Ayushi who had applied for similar number of shares.

c) Allot the remaining shares on Pro-rata basis.

Ayushi failed to pay the allotment money and Arushi who belonged to category C

was allotted 9,000 shares paid both the calls with allotment. Calculate

(1) Amount received on allotment

(2) Distribution showing allotment of shares.

Page 3: Class XII Accountancy Model Test Paper 1

Q 12. A, B & C were partners in a firm. On 1st April 2014 their fixed capitals were

Rs 75,000,Rs 37,500 & Rs 37,500 respectively. As per the deed-

(a) All the partners were entitled to receive 5% interest p.a. on capitals.

(b) Profits were divided in their capital ratio.

(c) B was entitled to a salary of Rs 7,500.

The net profits for the year ended 31st March 2013 & 31st March 2014 was Rs

49,500 & Rs 67,500 respectively.Net Profits were provided equally without

providing for the above terms.

Pass an adjustment entry to rectify the above error. Show your workings

clearly. (6)

Q13- Record necessary entries in the following cases in case of dissolution of

partnership firm :

(i) Realisation expenses to be borne by A , a partner for which she was

allowed commission of 2% of net cash realized from dissolution. The net

cash realized from dissolution was 5,00,000 & actual expenses were

37,000.

(ii) Sunil, a creditor to whom 32,000 were due to be paid, took over office

equipment at 40,000. Balance was paid by him in cash.

(iii) P, a partner, paid creditors 51,000 in full settlement of their claim

60,000.

(iv) A debtor, Sam , whose debt of 18,600 was written off in the books, paid

15,000 in full settlement.

(v) There was a stock of 90,000. Ram, a partner took over 50% of the stock

at 10% discount & remaining stock was sold at 40% profit of book value.

(1+2+1+1+1)

Q14(a) Ritvik Ltd. Purchased assets of 5,00,000 & took over liabilities of 90,000.

The purchase consideration was paid by the issue of 4,000 9%

debentures of 100 each at a discount of 5%. Journalise the above

Page 4: Class XII Accountancy Model Test Paper 1

transaction.

(b) A Ltd. purchased for cancellation 2,50,000 of its 12% debentures at

92.Journalise. (6)

Q15- X & Y were partners in a firm sharing profits & losses in the ratio of 3:2. On 31st March 2014, their balance sheet stood as follows:

BALANCESHEET As at 31st march, 2014

Liabilities Assets Capitals X 70,000 Y 60,000 General Reserve Bank Loan

1,30,000 20,000 90,000

Furniture Investments Stock Debtors 38,000 -Prov. For d/d 4,000 Cash

30,000 40,000 46,000

34,000 90,000

2,40,000 2,40,000

On the same date Z was admitted for 1/4th share in profits & losses on the following terms: (a) Z bring proportionate capital after all adjustments & 14,000 for goodwill. (b) Furniture was valued at 27,000. (c) Half of the investments were taken over by X & Y in their profit sharing

ratio & remaining valued at 26,000. (d) New Profit sharing ratio would be 3:3:2. Prepare Revaluation Account, Partners’ capital Accounts and balance sheet after Z’s admission. (8)

OR Following is the Balance sheet of A,B & C as at 31st March 2014, who share profits & losses in the ratio of 2:1:1.

BALANCESHEET Liabilities Assets

Capitals A 2,00,000 B 3,00,000 C 2,00,000 General reserve Workmen’s compensation

7,00,000 35,000

Land & Building Machinery Stock Debtors 1,10,000 Less:Prov. For d/d10,000 Cash at Bank

2,00,000 3,00,000 1,00,000 1,00,000 1,00,000

Page 5: Class XII Accountancy Model Test Paper 1

Reserve Sundry creditors

15,000 50,000

8,00,000 8,00,000

On the same date C gave a notice for his retirement which was agreed upon. The other terms which were agreed on retirement were: (a) Land & Building is to be appreciated by 30%. (b) Machinery to be depreciated by 20%. (c) There are bad debts of 17,000. (d) Goodwill of the firm was valued at 2,80,000 & C’s share of goodwill to be

adjusted against the capital account of continuing partners capital accounts.

(e) The total capital of the new firm will be same as before & will be new profit sharing ratio of 4:3.

Prepare Revaluation account, Partners’ capital Accounts & Balance Sheet of the firm after C’s retirement.

Q16- X Ltd. invited applications for issuing 2,00,000 equity shares of Rs 10 each. The amount was payable as follows: Application 2.50, allotment 5.00, First & final call 2.50. Applications for 3,50,000 shares were received & the allotment was made as follows: Category Shares applied Shares allotted I 50,000 40,000 II 1,00,000 60,000 III 2,00,000 1,00,000 All the shares were allotted on pro rata basis & the excess money was adjusted towards sum due on allotment. Madhu who belonged to category I & to whom 800 shares were allotted failed to pay the allotment money. Her shares were forfeited immediately after the allotment was not received. Pooja who belonged to category III & who had applied for 400 shares failed to pay the final call. Her shares were also forfeited after the final call. Out of the forfeited shares, 80% shares were reissued as fully paid up @ 9 per share. The reissued shares included all the forfeited shares of pooja. Pass necessary journal entries in the books of X Ltd. (8)

OR M Ltd. issued 30,000 shares of 10 each at a discount of 1 each(to be adjusted at the time of allotment) payable as follows:

Page 6: Class XII Accountancy Model Test Paper 1

Application- 3, allotment- 2 First & final call -4. Applications were received for 40,000 shares. Allotment was made as follows:

I- Applications for 5,000 shares were allotted in full. II- Applications for 15,000 shares were allotted 10,000 shares on prorata

basis. III- Applications for 20,000 shares were allotted 15,000 shares.

All the shareholders paid the amount due on allotment & call except X (who was allotted 1,000 shares under category II) & Y(who was allotted 1,500 shares under category III). They did not pay any money due on allotment & call. Their shares were forfeited & reissued at 6 per share as fully paid up. Pass necessary journal entries to record the above transactions.

PART B- FINANCIAL STATEMENT ANALYSIS Q17- Anjali Ltd. extends a credit of 45 days to its customers.Its credit collection will be considered poor if its average collection period was (1)

a) 30 days b) 40 days c) 36 days d) 54 days. Q18- Which of the following transactions will not be shown in cash flow statement? (1)

(a) Issue of 5% preference shares. (b) Conversion of Debentures into shares. (c) Dividend proposed on equity shares. (d) Income tax refund received.

Q19- Give one transaction which is shown as an operating activity for finance & non finance companies. (1) Q20- Under which heads & sub heads the following items will appear in the Balance sheet of a company as per Revised Schedule VI Part I of Companies Act 1956: (3)

(a) Unpaid dividend (b) Share Forfeiture Account (c) Advance to subsidiary Q21- Prepare Comp[arative Statement of Profit & Loss from the following information: (4) Particulars 31.03.2014 31.03.2013 Revenue from operations Other income Cost of materials consumed

37,50,000 4,50,000 60% of revenue from operations

25,00,000 5,00,000 50% of revenue from operations

Page 7: Class XII Accountancy Model Test Paper 1

Other expenses Tax rate

10% of revenue from operations 50%

10% of revenue from operations 50%

Q22- From the following information calculate Gross Profit ratio - (4) Inventory at the beginning of the year 60,000. Inventory at the end of the year 1,00,000. Inventory turnover ratio 8 times Revenue from operations 25% above cost. Q23- From the Balance Sheet Of Shiv Ltd. Prepare Cash flow statement:

Particulars Note no

31.03.2012 31.03.2013

Equity & Liabilities 1. Shareholders’ funds

(a) Share Capital (b) Reserves & surplus

2. Non current liabilities (a) Long term borrowings

3. Current Liabilities (a)short term provision

Assets 1. Non current assets

a) Fixed Assets 2. Current Assets

a) Inventories b) Trade receivables c) Cash & cash equivalents

1 2

3

4

4,60,000 2,31,000 2,00,000 9,000 9,00,000 5,00,000 2,10,000 1,40,000 50,000 9,00,000

8,50,000 1,54,000 1,80,000 16,000 12,00,000 7,00,000 3,00,000 1,40,000 60,000 12,00,000

Notes to Accounts:

Note no.

Particulars 31.03.2012 31.03.2013

1. Share Capital Equity Share Capital 8% preferential Capital

4,00,000 60,000

7,50,000 1,00,000

Page 8: Class XII Accountancy Model Test Paper 1

Reserves and Surplus

Balance of Statement of Profit & Loss General Reserves Long Term Borrowings 10% Debentures Short Term Provision Proposed Dividend

1,61,000 70,000 2,00,000 9,000

74,000 80,000 1,80,000 16,000

Additional Information:

a) Depreciation charged on Fixed Assets was Rs. 15,000. b) Machine of book value of Rs. 80,000 sold for Rs. 50,000. c) Interim dividend paid Rs. 12,000 (6)

Page 9: Class XII Accountancy Model Test Paper 1

SOLUTION Q1- No. Q2-Yes Goodwill is to be revalued as profit sharig ratio is changing.Gaining partner will compensate the sacrificing partner. Q3-(d) Q4- Assured return on capital employed. Q5 – (c) Q6-

Date Particulars L.F Dr. Cr. A’s capital A/c-------Dr

C’s capital A/c-------Dr To B’s capital A/c (B’s share goodwill adjusted through capital accounts.) B’s capital A/c------------Dr To B’s Loan A/c (B’s capital t/f to loan account.) Cash A/c ---------------Dr To D’s capital A/c To premium for Goodwill a/c (Being amount contributed as capital & goodwill.) Premium for Goodwill A/c ---Dr To A’s capital A/c To C’s capital A/c (Being premium t/f to capital accounts in sacrificing ratio.)

2,000 4,000 81,000 1,86,000 36,000

6,000 81,000 1,50,000 36,000 16,000 20,000

Q7- (a) Yes (b)The name of the shareholder is removed from the register The amount forfeited is transferred to share forfeiture account.

Page 10: Class XII Accountancy Model Test Paper 1

Q8-Amount forfeited 1,880, Amount t/f to capital reserve- 240. Q9-(a) Spreading health awareness among slum dwellers Initiative, Fulfillment of social responsibility.

(b) B’s claim is not valid because salary is not given to any partner in absence of partnership deed.

Q10- The value of asset is charged from his capital account. His claim is increased over the firm by the liability discharged by him. Q11- calls in arrears (Ayushi) 90,000, calls in advance (Arushi) 36,000, Allotment received 3,36,000. Q12- C’s current A/c Debit 13,500, A’s current A/c credit 12,000 B’s current a/c credit 1,500. Q13-

Date Particulars L.F Dr Cr A B C D E

Realisation A/c To A’s capital A/c (Being commission paid on 5,00,000@ 2%) Cash A/c Dr To Realisation A/c (Being typewriter given to creditor & balance in cash) Realisation A/c Dr To P’s capital A/c (Being creditors paid by P.) Cash A/c Dr To Realisation A/c (Being debtor paid 15,000 in full settlement.) Ram Dr Bank A/c Dr To Realisation A/c (Being stock realized.)

10,000

8,000

51,000

15,000

40,500 63,000

10,000

8,000

51,000

15,000

1,03,500

Page 11: Class XII Accountancy Model Test Paper 1

Q14-(a) Assets A/c ----Dr 5,00,000 To Liabilities A/c 90,000 To Vendors A/c 3,80,000 To Capital Reserve A/c 30,000 (Being Business purchased from vendor.) Vendors A/c Dr 3,80,000 Discount on issue of debentures a/c-Dr20,000 To 9% Debentures A/c 4,00,000 (Being purchase consideration paid by issue of 4,000 9% debentures at a discount of 5%.)

(c) Own Debentures A/c Dr 2,30,000 To Bank A/c 2,30,000 (Being 2,500 own debentures purchased @ 92 each.) 12% Debentures A/c Dr 2,50,000 To own Debentures A/c 2,30,000 To profit on cancellation of debentures A/c 20,000 (Being 2,500 own debentures cancelled.) Profit on cancellation of debentures A/c Dr 20,000 To capital reserve A/c 20,000 (Being profit on cancellation t/f to capital reserve.)

Q15- Revaluation A/c profit- 3,000, Partners capital accounts X- 84,400, Y- 62,600, Z – 49,000, Balancesheet total- 2,86,000. OR Revaluation A/c Loss- 7,000, Partner’s capital accounts A- 4,00,000, B- 3,00,000, C’s Loan a/c 2,80,750, Balancesheet- 10,30,750.

Q16- capital reserve- 2,575 or capital reserve- 3,000.

Q17- (d)

Q18 – (b)

Q19 – salary paid to an employee.

Q20- unpaid dividend current liabilities other current liabilities Share forfeiture account Shareholders’ Share capital funds

Page 12: Class XII Accountancy Model Test Paper 1

Advance to subsidiary Non current assets Long term loans & Advances

Q21 – Comparative statement profit & Loss Particulars Note

No. 31.03.2013 21.03.2014 Absolute

Change (Increase or Decrease)

Percentage Change

(Increase or Decrease)

I. Revenue from Operations

II. Other Income III. Total Revenue (I-II) IV. Less: Expenses

a) Cost of materials Consumed

b) Other Expenses Total Expenses (a+b)

V. Profit before Tax (III-IV)

VI. Less: Tax @ 50% VII. Profit After Tax(V-VI)

25,00,000 5,00,000 30,00,000 12,50,000 2,50,000 15,00,000 15,00,000 7,50,000 7,50,000

37,50,000 4,50,000 42,00,000 22,50,000 3,75,000 26,25,000 15,75,000 7,87,500 7,87,500

12,50,000 (50,000) 12,00,000 10,00,000 1,25,000 11,25,000 75,000 37,500 37,500

50

10 40%

80%

50% 75% 5%

5% 5%

Q 22. Gross Profit Ratio 20% Q 23. Cash used in operating activities Rs. 76,000

Cash used in Investing activities Rs. 2,45,000 Net cash flow from Financing activities Rs. 3,31,000 Fixed Assets purchased Rs. 2,95,000