Guess Paper - 2007
Class – XII
Maximum Marks: 80 Time allowed : 3 hrs.
(i) This question paper contains three parts A, B and C
(ii) Part A is compulsory for all candidates.
(iii) Candidates can attempt only one part of the remaining Part B and C.
PARTNERSHIP AND COMPANY ACCOUNTS
NOTE: All theoretical questions of this paper are fully solved and practical questions are unsolved.
Q.1. Amit and Sonu are partners sharing profits equally. Amit withdrew Rs. 1,000 p.m. regularly on the first day of every month for personal expenses. If interest on drawings is to be charged @ 5% p.a., calculate the interest on the drawings of Amit. 2
Ans. Rs. 325
Q.2. State the provision of Section 78 of Companies Act 1956, regarding the uses of Security Premium Amount. 2
Ans. Provisions of Section 78 of Companies Act 1956 regarding the uses of Security Premium :
(a) In paying up unissued securities of the company to be issued to members of the company as fully paid bonus securities.
(b) To write off Preliminary expenses of the Company.
(c) To write off the expenses of or commission paid or discount allowed on any of the securities of the company.
(d) To pay premium on the redemption of preference shares or debentures of the company.
Q.3. How is Share Capital shown in the Company’s Balance Sheet as per Section 211 Schedule VI part I of Company’s Act 1956? 2
- Authorised Capital
- Issued Capital
- Subscribed Capital and Called up Capital
Less: Calls unpaid
Add: Forfeited Shares
(Amount originally paid up)
Q.4. Excel Ltd. issued 4,00,000 9% Debentures of Rs. 50 each, payable on application, Pass journal entries at the time of following situations.
(i) Issued at par redeemable at 10% Premium 2
(ii) Issued at 5% discount, redeemable at 10% premium
Q.5. What is Partnership? List any three main characteristics of Partnership. 3
Ans. Meaning of Partnership :
The relation between persons who have agreed to share the profit of a business carried on by all or any one of them acting for all.
Characteristics (any three):
1. Two or more persons
2. Agreement between the Partners
4. Sharing of Profits
5. Business carried on by all or any one of them acting for all
Q.6. What is meant by debentures? Name any four types of debentures. 3
Ans. Meaning of Debentures :
Debenture is an instrument of debt owed by a Company. As an acknowledgement of debt, such instruments are issued under the seal of a Company and duly signed by authorised signatory.
Types of Debentures (any four)
(vii) Zero coupon rate;
(viii) Specific rate;
Q.7. What is meant by revaluation of assets and reassessment of liabilities on the reconstitution of the firm? What purpose does it serve at the time of reconstitution of partnership? 4
Ans. At the time of reconstitution of a Firm the present value of the Assets maybe different from their book value and the same condition may be with the liabilities. Hence a revaluation of Assets and reassessment of Liabilities becomes necessary to adjust the profit or loss on revaluation in the Capital Accounts of the old Partners in their old profit sharing ratio.
The main purpose of revaluing assets and re-assessing the liabilities is that a partner who gains on account of such a change should compensate the other partner(s) who are expecting loss in their profit share in future.
Q.8. Ram and Shyam share the profits equally. They decided to dissolve their firm. Their liabilities were : Ram’s Capital Rs. 25,000; Shyam’s Capital Rs. 30,000; Creditors Rs. 12,500; Bills payable Rs.7,500; Assets of the firm realized Rs.1,00,000. Prepare a Realization Account. 4
Ans. Sundry Assets Rs. 75,000; Profit on Realisation Rs. 25,000
Q.9. J.M.D.Ltd. Issued 2 Lakh 5% Debenture of Rs. 100 each at a discount of 6% on
80,000 debenture on
40,000 debenture on
Ascertain out the amount of discount to be written off in each of the years still the debenture are paid. Also prepare discount on issue of debenture account. 4
Q.10. Ganeshan Ltd. has 800 lakhs 10% debenture of Rs. 100 each due for redemption n
Q.11. Swati Detergents Ltd. issued 90,00,000, 6% debenture of Rs. 100 each redeemable after 4 years by converting them into equity shares of Rs. 10 each. Record journal entries for issue and redemption of debenture. Ignore entries for payment of interest. 4
Q.12. A and B are partners sharing profits as 2:1. Following is their Balance Sheet as on
Balance Sheet of A and B as on
Dec 31, 2001
A's Capital 18,000
B's Capital 17,000
Cash in Hand and at
Land and Building
a. That he should bring in Rs. 15,000 as his capital and Rs. 6,000 as premium for his share of goodwill
b. That land and building be revalued at Rs. 25,000 and stock at Rs. 18,500
c. That Rs. 500 be provided for doubtful debts
d. That after the above adjustments, the capital of the old partners be adjusted on the basis of the new partner's capital, having regard to profit sharing ratio. Excess or shortage will be adjusted through actual cash.
Record necessary journal entries and prepare Capital Accounts and new Balance Sheet of the partners. 6
Ans. Profit on Revaluation : Rs. 3,000
Balance of Capital Account : A : Rs. 30,000. B : Rs. 15,000
A will bring Rs. 2,000, B will withdraw Rs. 7,000
Total of Balance Sheet = Rs. 70,000
Q.13. The Balance Sheet of Bora, Singh and Ibrahim sharing profits in the ratio of 3:2:1, respectively stood as follows on
Balance Sheet of Bora, Singh and Ibrahim as at
June 30, 2002
Joint Life Policy Reserve
The firm was dissolved as on that date. For the purpose of dissolution, the investment were valued at Rs.18,000 and stock at Rs. 17,500. Bora agreed to take over Investment and Singh to take over stock. Ibrahim took over the furniture at book value. Debtors and Buildings realized Rs. 57,000 and Rs. 25,000 respectively. Expenses of realization amounted to Rs. 450.
In addition, one bill for Rs. 500 under discount was dishonoured and had to be taken up by the firm.
Prepare the necessary ledger accounts to close the books of the firm. 6
Ans. Loss on Realization : Rs. 5,650.
Pass necessary Journal entries for the following transactions, at the time of dissolution of the firm:
1. Realisation Expenses Rs. 3000 paid.
2. Realisation Expenses paid Rs. 2000, Mr. ‘X’ one of the partners has to bear these expenses.
3. ‘Y’, one of the partners, took over a machine for Rs. 20,000.
4. ‘Z’ one of the partners agreed to take over the creditor of Rs. 30,000 for Rs. 20,000.
5. ‘A’ one of the partners has given loan to the firm of Rs. 10,000. It was paid back to him at the time of dissolution.
6. Profit and Loss Account balance of Rs. 50,000 appeared on the assets side of the Balance Sheet.
Q.14. Kalinga Steel Tubes Limited issued a prospectus inviting applications for 2,00,000 Equity shares of Rs. 10 each at a premium of Rs. 2.50 per share payable as follows :
With Application Rs. 2.50
On Allotment (including premium) Rs. 5
On First Call Rs. 2.50
On Second Call Rs. 2.50
Applications were received for 3,00,000 shares and allotment was made on pro-rata basis. Money overpaid on applications was adjusted to the amount due on allotment.
Kanta, to whom 400 shares were allotted, failed to pay the allotment money and the first call, her shares were forfeited after the first call.
Shameem, to whom 600 shares were allotted, failed to pay the two calls and hence his shares were forfeited.
Of the shares forfeited, 800 shares were reissued to Mary credited as fully paid for Rs. 9 per share, the whole of Kanta's shares being included.
Record journal entries in the books of the Company to record the above transactions relating to share capital and present the relevant items in the Balance Sheet. 6
Ans. Capital Reserve Rs. 2,700.
Q.15. The Balance Sheet of A, B and C who were sharing profits in the ratio of 5:3:2, is given below as at March 32, 2003:
Balance Sheet of A, B and C as at
March 31, 2003
Plant and Machinery
Furniture and Fittings
Cash in Hand
B retires on the above date and the following adjustments are agreed upon his retirement:
(a) Stock was valued at Rs. 1,72,000.
(b) Furniture and fittings were under valued by Rs. 3000.
(c) An amount of Rs. 10, 000 due from Mr. D. was doubtful and a provission for the same was required.
(d) Goodwill of the firm was valued at Rs. 2,00,000 but it was decided not to show goodwill in the books of accounts.
(e) B was paid Rs. 40,000 immediately on retirement and the balance was transferred to his loan Account.
(f) A & C were to share future profits in the ratio of 3:2.
Prepare Revaluation Account, Capital Account and Balance Sheet of the reconstituted firm. 8
P, Q and R were Partners sharing profits in the ratio of 3:1:1. The balance sheet of the firm is given below as at
Balance Sheet of P, Q and R as at
March 31, 2002
Plant and Machinery
Furniture and Fittings
Cash at Bank
Partnership deed provides for the settlement of claim on death of a partner in addition to his capital as under:
(i) The share of profit of deceased partner to be computed on the basis of average profits of the past three years for the period from the last balance sheet to date of death of the partner.
(ii) His share in profit / loss on revaluation of assets and reassessment of liabilities.
(iii) His share of Goodwill valued on the basis of two years purchase of last three average profits.
Q died on June 1, and the following information is provided:
(a) Profits for the last three years were:
Rs. 80,000, Rs. 1,30,000 and Rs. 1,50,000
(b) The assets were revealed as Land Rs. 3,80,000 Plant and Machinery Rs. 1,80,000.
(c) Q withdrew Rs. 10,000 during the current financial year.
(d) Rs. 1, 00,000 was paid immediately on Q’s death to his executors and the balance amount was to be paid later.
Pass the Journal entries to give effect to the transactions relating to death of Q in the books of the firm.
ANALYSIS OF FINANCIAL STATEMENTS
Q.16. What are two major inflow and two major outflows of cash from investing activities? 2
Ans. Inflows of cash from Investing Activities (any 2 of the following)
(iii) Repayment of advances and loans made to third parties
Outflows of Cash from Investing Activites (any 2 of the following)
(i) Purchase of fixed Assets
(ii) Purchase of Investments
(iii) Advances and Loans made to third parties.
Q.17. Mutual Fund Company receives a dividend of Rs. 25 lakhs on its investments in other Company’s shares. Why is it a cash inflow from operating activities for this Company? 2
Ans. The Mutual Fund Company is a Finance Company. The Dividend received by it on the shares held in other companies is its revenue income. Therefore the dividend received by this company is cash inflow from operating activities.
Q.18. What is meant by financial analysis? Mention only two tools used for financial analysis. 3
Ans. Financial Analysis is a Systematic process of the critical examination of the financial information contained in the financial statements in order to understand and make decisions regarding the operations of the firm.
The tools used for financial analysis are as follows : (any two)
a) Comparative statements
b) Common-size statements
c) Trend Analysis
d) Ratio Analysis
e) Cash flow Analysis
Q.19. The Current Assets of a company are Rs. 1,26,000 and the current Ratio is 3:2 and the inventories are Rs. 2000. Find out the Liquid Ratio. 3
Q.20. Inventory Turnover Ratio is 3 times. Sales are Rs. 1,80,000, Opening Stock is Rs. 2000 more than the closing stock. Calculate the opening and closing stock when goods are sold at 20% profit on cost. 4
Q.21. The net profit of a company before tax is Rs. 12,50,000 as on
Depreciation on Fixed Assets Rs. 25,000
Goodwill written off Rs. 15,000
Loss on sale of Machine Rs. 12,000
The current assets and current liabilities of the company in the beginning and at the end of the year were as follows :
| || |
Stock in hand
Calculate Cash flow from operating activities. 6
Q.22. Prepare Cash Flow Statement of Rose Ltd. from the following information for the year ended
Fixed Assets (at Cost)
Equity Share Capital
Long Term Loan
i. Cash Flows from operating Activities after tax and extraordinary items Rs. 3,80,000/-
ii. Depreciation on Fixed Assets Rs. 85,000/-
iii. Interest received Rs. 45,000/-
iv. Dividend paid during the year Rs. 1,60,000/-