CBSE Class 12 Subject Accountancy Paper Set 1 - 2022 with Solutions

PART A (Accounting for Not-for-Profit Organizations, Partnership Firms and Companies)

1. In case the partners’ capitals are fixed, in which account will withdrawal of capital be recorded ?1

Solution: The withdrawal of capital will be recorded in the current account.

2. Meera, Myra and Neera were partners sharing profits in the ratio of 2 : 2 : 1. They decided to share future profits in the ratio of 7 : 5 : 3 with effect from 1st April, 2019. Their Balance Sheet as on that date showed a balance of Rs. 45,000 in Advertisement Suspense Account. The amount to be debited respectively to the capital accounts of Meera, Myra and Neera for writing off the amount in Advertisement Suspense Account will be :

(A) Rs. 18,000, Rs. 18,000 and Rs. 9,000

(B) Rs. 15,000, Rs. 15,000 and Rs. 15,000

(C) Rs. 21,000, Rs. 15,000 and Rs. 9,000

(D) Rs. 22,500, Rs. 22,500 and Nil

Solution: (A) Rs. 18,000, Rs. 18,000 and Rs. 9,000

3. Mona and Tina were partners in a firm sharing profits in the ratio of 3 : 2. Naina was admitted with th 6/1 share in the profits of the firm. At the time of admission, Workmen’s Compensation Reserve appeared in the Balance Sheet of the firm at Rs. 32,000. The claim on account of workmen’s compensation was determined at Rs. 40,000. Excess of claim over the reserve will be :

(A) Credited to Revaluation Account.

(B) Debited to Revaluation Account.

(C) Credited to old partner’s Capital Account.

(D) Debited to old partner’s Capital Account.

Solution: (B) Debited to Revaluation Account.

4. Diya, Riya and Tiya were partners sharing profits and losses in the ratio of 2 : 3 : 5. Tiya died on 28th November, 2019. Her share of profit was

taken equally by Diya and Riya. Diya’s share of profit in the new firm will be _________ .

Solution: 9/20

Explanation:

The old profit sharing ratio is 2:3:5, and if Diya and Riya are sharing Tiya‘s share equally:

Tiya‘s share = 5/10 which is divided in the ratio of 1:1


The gaining ratios of Diya and Riya are equal because they share Tiya‘s share equally.

Therefore,


New Profit sharing ratio:


Therefore.

Diya = `frac{1}{4}` + `frac{2}{10}` = `"10+8"/"40"` = `frac{18}{40}` =`frac{9}{20}`




Riya = `"1"/"4"` + `"3"/"10"`




= `"10+12"/"40"`




= `"22"/"40"`




= `"11"/"20"`




5. X and Y were partners in a firm sharing profits in the ratio of 7 : 3. Z was admitted for th `"5"/"1"` share in the profits which he took 75% from X and remaining from Y. Calculate the sacrificing ratio of X and Y.

Solution: 3:1

Explanation:

100% of total share that the gained from old partners i.e., `"1"/"5"`.

out of which 75% Z took from X

so,

other than 75% i.e,

25% he took from Y.

then, sacrificing ratio= 75:25

or =3:1




6. Name an item that is never shown on the payment side of Receipts and Payments Account, but is shown on the debit side of the Income and Expenditure Account.

Solution: Any one of the following-

(i) Loss on sale of fixed assets

(ii) Depreciation

(iii) Outstanding expenses at the end

(iv) Prepaid expenses in the beginning of the year

(Or any other correct item)




7. A, B and C were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. C retired and his capital balance after adjustments regarding reserves, accumulated profits/losses and his share of gain on revaluation was Rs. 2,50,000. C was paid Rs. 3,22,000 including his share of goodwill. The amount credited to C’s capital account, on his retirement, for goodwill will be :

(A) Rs. 72,000

(B) Rs. 7,200

(C) Rs. 24,000

(D) Rs. 36,000

Solution:(A) Rs. 72,000




8. Rahul, Sahil and Jatin were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. Rahul died on 15th October, 2017. At that time, the capitals of Sahil and Jatin after all the adjustments were Rs. 3,56,000 and Rs. 2,44,000 respectively. Sahil and Jatin decided to adjust their capital

according to their new profit sharing ratio by opening current accounts. Calculate the new capitals of Sahil and Jatin.

Solution:The new Capitals of Sahil and Jatin will be ₹ 3,60,000 and ₹ 2,40,000 respectively.

Explanation:

New Ratio among Sahil and Jatin can be obtained by simply cancelling Rahul’s share. Thus, new ratio will be 3: 2

Sahil’s Existing Capital = 3,56,000

Jatin’s Existing Capital = 2,44,000

Total Capital of the firm = Sahil’s Existing Capital + Jatin’s Existing Capital

= (3,56,000 + 2,44,000)

= 60,000

Sahil’s New Capital = (6,00,000 × `"3"/"5"`)

= 3,60,000

Jatin’s New Capital = (6,00,000 × `"2"/"5"`)

= 2,40,000

Thus, the new Capitals of Sahil and Jatin will be ₹ 3,60,000 and ₹ 2,40,000 respectively.




9. Sun and Star were partners in a firm sharing profits in the ratio of 2 : 1. Moon was admitted as a new partner in the firm. New profit sharing ratio was 3 : 3 : 2. Moon brought the following assets towards his share of goodwill and his capital :

Rs.
Machinery 2,00,000
Furniture 1,20,000
Stock 80,000
Cash 50,000


If his capital is considered as Rs. 3,80,000, the goodwill of the firm will be :

(A) Rs. 70,000

(B) Rs. 2,80,000

(C) Rs. 4,50,000

(D) Rs. 1,40,000

Solution:(A) Rs. 70,000

Explanation:

Total Assets brought in by Moon = ₹ (2,00,000 + 1,20,000 + 80,000 + 50,000)

= ₹ 4,50,000

Capital amount brought in by Moon = ₹ 3,80,000

Goodwill amount brought in by Moon = Total Assets brought in by Moon – Moon’s Capital

= ₹ (4,50,000 – 3,80,000) = ₹70,000




10. Rohan, Mohan and Sohan were partners sharing profits equally. At the time of dissolution of the partnership firm, Rohan’s loan to the firm will be :

(A) Credited to Rohan’s Capital Account.

(B) Debited to Realisation Account.

(C) Credited to Realisation Account.

(D) Credited to Bank Account.

Solution:(D) Credited to Bank Account.

Explanation:

Rohan’s Loan to the firm will be paid separately and before the payment of Partner’s Capital.




11. Excess of issue price of a debenture over its face value is called ________ .

Solution: Premium

12. Which of the following statements does not relate to ‘Reserve Capital’ :

(A) It is part of uncalled capital of a company.

(B) It cannot be used during the lifetime of a company.

(C) It can be used for writing off capital losses.

(D) It is part of subscribed capital.

Solution: (C) It can be used for writing off capital losses.

12. Which of the following statements does not relate to ‘Reserve Capital’ :

(A) It is part of uncalled capital of a company.

(B) It cannot be used during the lifetime of a company.

(C) It can be used for writing off capital losses.

(D) It is part of subscribed capital.

Solution: (C) It can be used for writing off capital losses.

13. Name an item which is transferred to credit side of Realisation Account at the time of dissolution of partnership firm, but does not involve cash payment.

Solution: Any one of the following-

(i) Provision for doubtful debts

(ii) Investment fluctuation fund

(iii) Accumulated depreciation

(Or any other correct item)

14. How would the following items be treated while preparing the financial statements of a sports club ?
Particulars Amount
Prize Fund 44,000
Interest on Prize Fund Investments 6,000
Prizes Awarded 46,000
Match Expenses 64,000
Prize Fund Investments 44,000


Solution:

In the books of Sports Club

Balance Sheet as at …….
Liabilities Amount (Rs.) Assets Amount (Rs.)
Prize Fund 44,000
Prize Fund Investments 44,000
Add: Interest on Prize Fund Investments 6,000



Less: Prizes Awarded 46,000 4,000









Income & Expenditure A/c

for the year ended ……
Expenditure Amount (Rs.) Income Amount (Rs.)
To Match Expenses 64,000







OR

From the following information of a charitable dispensary, calculate the amount of medicines consumed during the year that would appear in the Income and Expenditure Account for the year ending 31st March, 2019 :
Particulars Amount (Rs.)
Stock of medicines on 1.4.2018 60,000
Creditors for medicines 1.4.2018 40,000
Stock of medicines 31.3.2019 10,000
Creditors for medicines 31.3.2019 25,000
Advances for medicines 31.3.2019 22,000
Credit purchases of medicines during the year 2,76,000
Cash purchases of medicines during the year 46,500





Solution:

In the books of Charitable Dispensary

Income & Expenditure A/c

for the year ended 31st March 2019
Expenditure Amount (Rs.) Income Amount (Rs.)
To Medicines consumed 3,72,500




Working Notes

Stock of Medicines A/c
Particulars Amount (Rs.) Particulars Amount (Rs.)
To balance b/d 60,000 By Income & Expenditure A/c 3,72,500
To Bank A/c (Purchases) 46,500


To Creditors for Sports material a/c 2,76,000 By balance c/d 10,000

3,82,500
3,82,500


15. Ram, Mohan and Sohan were partners sharing profits in the ratio of 2 : 1 : 1. Ram withdrew Rs. 3,000 every month and Mohan withdrew Rs. 4,000 every month. Interest on drawings @ 6% p.a. was charged, whereas the partnership deed was silent about interest on drawings. Showing your working clearly, pass the necessary adjustment entry to rectify the error.

Solution:
Date Particulars
Amount (Rs.) Amount (Rs.)

Ram’s Capital A/c Dr. 180


Sohan’s Capital A/c Dr. 630


To Mohan’s Capital A/c

810

(Adjustment entry for interest on drawings wrongly charged)





Working Notes:

Adjustment Table
Particulars Ram Mohan Sohan
interest on drawings wrongly debited 1080 1440 –
Loss to be debited (1260) (630) (630)
Net Effect 180 (Dr.) 810 (Cr.) 630 (Dr.)


OR

From the following information of a charitable dispensary, calculate the amount of medicines consumed during the year that would appear in the Income and Expenditure Account for the year ending 31st March, 2019 :
Particulars Amount (Rs.)
Stock of medicines on 1.4.2018 60,000
Creditors for medicines 1.4.2018 40,000
Stock of medicines 31.3.2019 10,000
Creditors for medicines 31.3.2019 25,000
Advances for medicines 31.3.2019 22,000
Credit purchases of medicines during the year 2,76,000
Cash purchases of medicines during the year 46,500


Solution:

In the books of Charitable Dispensary

Income & Expenditure A/c

for the year ended 31st March 2019
Expenditure Amount (Rs.) Income Amount (Rs.)
To Medicines consumed 3,72,500




Working Notes

Stock of Medicines A/c
Particulars Amount (Rs.) Particulars Amount (Rs.)
To balance b/d 60,000 By Income & Expenditure A/c 3,72,500
To Bank A/c (Purchases) 46,500


To Creditors for Sports material a/c 2,76,000 By balance c/d 10,000

3,82,500
3,82,500


15. Ram, Mohan and Sohan were partners sharing profits in the ratio of 2 : 1 : 1. Ram withdrew Rs. 3,000 every month and Mohan withdrew Rs. 4,000 every month. Interest on drawings @ 6% p.a. was charged, whereas the partnership deed was silent about interest on drawings. Showing your working clearly, pass the necessary adjustment entry to rectify the error.

Solution:
Date Particulars
Amount (Rs.) Amount (Rs.)

Ram’s Capital A/c Dr. 180


Sohan’s Capital A/c Dr. 630


To Mohan’s Capital A/c

810

(Adjustment entry for interest on drawings wrongly charged)





Working Notes:

Adjustment Table
Particulars Ram Mohan Sohan
interest on drawings wrongly debited 1080 1440 –
Loss to be debited (1260) (630) (630)
Net Effect 180 (Dr.) 810 (Cr.) 630 (Dr.)


Or

Yadu, Vidu and Radhu were partners in a firm sharing profits in the ratio of 4 : 3 : 3. Their fixed capitals on 1 st April, 2018 were Rs. 9,00,000, Rs. 5,00,000 and Rs. 4,00,000 respectively. On 1 st November, 2018, Yadu gave a loan of Rs. 80,000 to the firm. As per the partnership agreement : (i) The partners were entitled to an interest on capital @ 6% p.a. (ii) Interest on partners’ drawings was to be charged @ 8% p.a. The firm earned profits of Rs. 2,53,000 (after interest on Yadu’s loan) during the year 2018  19. Partners’ drawings for the year amounted to Yadu : Rs. 80,000, Vidu : Rs. 70,000 and Radhu : Rs. 50,000. Prepare Profit and Loss Appropriation Account for the year ending 31st March, 2019.

Solution:

Profit and loss Appropriation A/c

for the year ended 31st march ,2019
Particulars
Amount (Rs.) Particulars
Amount (Rs.)
To Interest on Capital

By Net Profit b/d
2,53,000
Yadu’s Current A/c 54,000
By Interest on Drawings


Vidu’s Current A/c 30,000
Yadu’s Current A/c 3,200

Radhu’s Current A/c 24,000 1,08,000 Vidu’s Current A/c 2,800

To Profit transfered to :

Radhu’s Current A/c 2,000 8,000
Yadu’s Current A/c 61,200




Vidu’s Current A/c 45,900




Radhu’s Current A/c 45,900 1,53,000





2,61,000

2,61,000





16. Furkan, Tanmay and Barkat were partners in a firm sharing profits in the ratio of 3 : 2 : 1. The firm closes its books on 31st March every year. Tanmay died on 31st July, 2019. His executor was entitled to : (i) His capital Rs. 8,00,000 and his share of goodwill which was valued for the firm at Rs. 96,000. (ii) His share of profit as per partnership agreement, which was to be calculated on the basis of average profit of last 3 years. Average profits of the last 3 years were Rs. 78,000. (iii) Tanmay’s executors were paid Rs. 95,000 by cheque at the time of his death and the balance was transferred to his executor’s loan account. Pass the necessary journal entries in the books of the firm, on Tanmay’s death, for the above transactions.

Solution:
Date Particulars
Amount (Rs.) Amount (Rs.)

Furkan’s Capital A/c Dr. 24,000


Barkat’s Capital A/c Dr. 8,000


To Tanmay’s Capital A/c

32,000

(Tanmay’s Share of goodwill adjusted)










Profit & loss Suspense A/c Dr. 8,667


To Tanmay’s Capital A/c

8,667

(Share of profit for the year credited to decreased )










Tanmay’s Capital A/c Dr. 8,40,667


To Tanmay’s Executor’s A/c

8,40,667

(Decreased Partner’s Capital Balance transfered to Executor’s A/c)










Tanmay’s Executor’s A/c Dr. 95,000


To Bank A/c

95,000

(Payment made to Executor)














17. Raunit Styles Ltd. was registered with a capital of Rs. 85,00,000 divided into equity shares of Rs. 100 each. The company invited applications for issuing 45,000 shares. The amount was payable as Rs. 25 on application, Rs. 35 on allotment, Rs. 25 on first call and balance on final call. Applications were received for 42,000 shares and allotment was made to all the applicants. Kavi, to whom 3,300 shares were alloted, failed to pay both the calls. His shares were forfeited. Present the Share Capital in the Balance Sheet of the company as per Schedule III of the Companies Act, 2013.

Solution:

Balance Sheet

as per Schedule III of Companies Act,2013
Particulars Note.No Current Year (Rs.) Previous Year (Rs.)
I. Equity and Liabilities



Share holder’s Fund



(a) Share Capital 1 40,68,000



Notes to Accounts
Note.No Particulars
Amount (Rs.)
1. Share Capital



Authorized Capital



85,000 equity shares of Rs. 100 each
85,00,000

Issed Capital



45,000 equity shares of Rs. 100 each
45,00,000

Subscribed Capital



Subscribed and fully paid



38,700 equity shares of Rs.100 each 38,70,000


Add: Forfeited shares (3,300 x 60) 1,98,000 40,68,000





18. Pass the necessary journal entries for the following transactions on the dissolution of the partnership firm of Tony and Rony after the various assets (other than cash) and external liabilities have been transferred to Realization Account :

(i) An unrecorded asset of Rs. 2,000 and cash Rs. 3,000 was paid for liability of Rs. 6,000 in full settlement.

(ii) 100 shares of Rs. 10 each have been taken over by partners at market value of Rs. 20 per share in their profit sharing ratio, which is 3 : 2.

(iii) Stock of Rs. 30,000 was taken over by a creditor of Rs. 40,000 at a discount of 30% in full settlement.

(iv) Expenses of realisation Rs. 4,000 were to be borne by Rony. Rony used the firm’s cash for paying these expenses.

Solution:

Journal
Date Particulars
Amount (Rs.) Amount (Rs.)
(i) Realisation A/c Dr. 3,000


To Cash A/c

3,000

(Amount paid for settlement of liability)









(ii) Tony’s Capital A/c
1,200


Rony’s Capital A/c
800


To Realisation A/c

2,000

(Investment taken over by partner)









(iii) No Entry









(iv) Rony’s Capital A/c
4,000


To Cash A/c

4,000

(Realization expense to be brone by Rony paid by firm)














19. From the following Receipts and Payments Account of Dee Club for the year ending 31 st March, 2019 and additional information, prepare an Income and Expenditure Account for the year ending 31 st March, 2019 :

Receipts and Payments Account of Dee Club

for the year ending 31st March, 2019
Receipts
Amount (Rs.) Payments Amount (Rs.)
To Balance b/d
2,000 By Salaries 42,500
To Subscription :

By Printing and Stationery 21,500
2017 -18 1,200
By Furniture (1.10.2018) 15,000
2018 -19 49,200
By 9% Investments 3,000
2019 -20 2,300 52,700 By Balance c/d 16,850
To Sale of old furniture (Book value Rs. 800)
500


To Donation for prizes
43,000


To Interest on Investment
650




98,850
98,850


(i) The club has 400 members, each paying an annual subscription of Rs. 150.

(ii) Salaries paid included Rs. 3,150 for the year 2017-18 and outstanding salaries for the year 2018  19 were Rs. 4,250.

(iii) 9% investments were made on 30th November, 2018. The club had a similar investment of Rs. 8,000 at the beginning of the year.

(iv) Depreciate furniture @ 10% p.a. No depreciation is charged on the furniture sold.

Solution:

Receipts and Payments Account of Dee Club

for the year ending 31st March, 2019
Expenditure
Amount (Rs.) Income
Amount (Rs.)
To Salaries 42,500
By Subscription
60,000
Add: Outstanding Salaries for the year 2018-19 4,250
By Interest on Investment 650

Less: Outstanding Salaries for the year 2017-18 (3,150) 43,600 Add: Accrued Interest 160 810
To Printing & Stationary
21,500 By Excess of Expenditure over income (Deficiet)
5,340
To Depresiation on furniture 750




To Loss on Sale of old furniture 300













66,150

66,150





20. (i) Vayee Ltd. purchased the following assets of E.X. Ltd. : Land and Building of Rs. 60,00,000 at Rs. 84,00,000; Plant and Machinery of Rs. 40,00,000 at Rs. 36,00,000. The purchase consideration was Rs. 1,10,00,000. Payment was made by accepting a Bill of Exchange in favour of E.X. Ltd. of Rs. 20,00,000 and remaining by issue of 8% debentures of Rs. 100 each at a premium of 20%. Record the necessary journal entries for the above transactions in the books of Vayee Ltd.

(ii) Zed Ltd. issued 2,00,000, 8% debentures of Rs. 100 each at a discount of 6% redeemable at a premium of 10% after 5 years. The amount was payable as follows : On application – Rs. 50 per debenture and On allotment – balance Record the necessary journal entries for the issue of debentures in the books of Zed Ltd.

Solution:

(i)

Books of Vayee Ltd.

Journal
Date Particulars
Amount (Rs.) Amount (Rs.)

Land & Building A/c Dr. 84,00,000


Plant & Machinary A/c Dr. 36,00,000


To E.x. Ltd A/c

1,10,00,000

To Capital Reserve A/c

10,00,000

(Asset taken over from E.x. Ltd)










E.x. Ltd Dr. 1,10,00,000


To Bills Payable A/c

20,00,000

To 8% Debenture A/c

75,00,000

To Securities Premium Reserve A/c

15,00,000

(Purchase Consideration discharge by issing 8% Debenture at a premium)











Solution:




Books of Zed Ltd.

Journal
Date Particulars
Amount (Rs.) Amount (Rs.)

Bank A/c
1,00,000


To Debenture Application A/c

1,00,000

(Application Amount received on 2,00,000, 8% Debentures)










Debenture Application A/c
1,00,000


To 8% Debentures A/c

1,00,000

(Amount received on application transfered to Debenture A/c)










Debenture Allotement A/c
88,00,000


Loss on issue of Debenture A/c
32,00,000


To 8% Debenture A/c

1,00,00,000

To Premium on redemption of debenture A/c

20,00,000

(Allotement of 8% Debenture s at a premium)










Bank A/c
88,00,000


To Debenture Allotement A/c

88,00,000

(Amount due on allotement received)











OR

Mahesh Ltd. had issued 20,000, 10% debentures of Rs. 100 each. 8,000, 10% debentures were due for redemption on 31st March, 2019. The company had a balance of Rs. 4,40,000 in the Debenture Redemption Reserve Account on 31st March, 2018. The company invested the required amount in the Debenture Redemption Investment on 1st April, 2018. Pass the necessary journal entries for redemption of debentures. Ignore the entries for interest on debentures.

Solution:

Books of Mahesh Ltd.

Journal
Date Particulars
Amount (Rs.) Amount (Rs.)
2018 Mar,31 Balance in Statement Profit & loss A/c Dr. 60,000


To Debenture Redemption Reserve A/c

60,000

( Debenture Redemption Reserve created out of profit )










Debenture Redemption Investment A/c Dr. 1,20,000


To Bank A/c

1,20,000

( Debenture Redemption Investment Purchased )










Bank A/c Dr. 1,20,000


To Debenture Redemption Investment A/c

1,20,000

( Debenture Redemption Investment realised )










10% Debenture A/c Dr. 8,00,000


To Debenture holder’s A/c

8,00,000

( Amount Payble to Debenture holders on redemption )










Debenture holders A/c Dr. 8,00,000


To Bank A/c

8,00,000

( Payment made to debenture holders A/c )










Debenture Redemption Reserve a/c Dr. 2,00,000


To General Reserve A/c

2,00,000

( Proporitionate amount of Debenture Redemption Reserve transfered to General Reserve )














21. Badal and Bijli were partners in a firm sharing profits in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2019 was as follows :

Balance Sheet of Badal and Bijli

as at 31st March, 2019
Liabilities
Amount Assets Amount
Capitals :

Building 1,50,000
Badal 1,50,000
Investments 73,000
Bijli 90,000 2,40,000 Stock 43,000
Badal’s Current A/c
12,000 Debtors 20,000
Investment Fluctuation Reserve
24,000 Cash 22,000
Bills Payable
8,000 Bijli’s Current A/c 2,000
Creditors
26,000




3,10,000
3,10,000


Raina was admitted on the above date as a new partner for th 6 1 share in the profits of the firm. The terms of agreement were as follows :

(i) Raina will bring Rs. 40,000 as her capital and capitals of Badal and Bijli will be adjusted on the basis of Raina’s capital by opening current accounts.

(ii) Raina will bring her share of goodwill premium for Rs. 12,000 in cash.

(iii) The building was overvalued by Rs. 15,000 and stock by Rs. 3,000. (iv) A provision of 10% was to be created on debtors for bad debts. Prepare the Revaluation Account and Current and Capital Accounts of Badal, Bijli and Raina.

Solution:

Revaluation A/c
Particulars Amount (Rs.) Particulars
Amount (Rs.)
To Building 15,000 By Loss on Revaluation A/c :


To Stock 3,000 Badal’s Current A/c 12,000

To Provision for Bad Debts 2,000 Bijili’s Current A/c 8,000 20,000

20,000

20,000





Partners Capital A/c
Particulars Badal Bijli Raina Particulars Badal Bijli Raina
To Badal’s Current A/c 30,000 – – By Balance 1,50,000 90,000 –
To Bijli ’s Current A/c – 10,000 – By Cash A/c

40,000
To Balance c/d 1,20,000 80,000 40,000





1,50,000 90,000 40,000
1,50,000 90,000 40,000