ACADEMIC SESSION 2021-

2022
GRADE: XII Sample paper - 2 Max. Marks: 80
Date: /2021 Duration: 3 hrs.
SUBJECT: Accountancy
Name of the Student……………………………………………….

This question paper contains (0) pages

1. This question paper comprises two Parts – A and B.
There are 32 questions in the question paper. All questions are compulsory.
2. Question nos. 1 to 13 and 23 to 29 are very short answer type questions carrying 1 mark each.
3. Question nos. 14 and 30 are short answer type–I questions carrying 3 marks each.
4. Question nos. 15 to 18 and 31 are short answer type–II questions carrying 4 marks each.
5. Question nos. 19, 20 and 32 are long answer type–I questions carrying 6 marks each.
6. Question nos. 21 and 22 are long answer type–II questions carrying 8 marks each.
7. There is no overall choice. However, an internal choice has been provided
in 2 questions of three marks, 2 questions of four marks and 2 questions of eight marks.
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Part- A
(Accounting for Not for Profit organizations, Partnership firms and Companies)
1) Receipts and payments account is based on _____.
a) cash principle
b) accrual principle
c) credit principle
d) none of these
2) Normally receipts and payments account is prepared by a ______ organisation.
3) For which of the following situations, the old profit sharing ratio of partners is used
at the time of admission of a new partner?
a) When new partner brings only a part of his share of goodwill
b) When new partner is not able to bring his share of goodwill
c) When, at the time of admission, goodwill already appears in the balance sheet
d) When new partner brings his share of goodwill in cash
4) Which of the following statement is not correct.
a) A partnership business may include trade, vocation and profession but not Joint ownership.
b) As an agent a partner represents other partners and binds them through his act.

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 c) As a principal, a partner is bound by the act of other partners.
d) Interest on Partner’s Loan is 6% p.a. is fixed in all circumstances.
5) According to Accounting Standard -26 (AS-26) ___.
a) Self-generated goodwill is not accounted as an asset OR goodwill should not be raised
in the books of accounts
b) Purchased goodwill should not be written off
c) Goodwill can be recorded in the books whether money or money’s worth paid for it or not
d) Self-generated goodwill is always shown under the fixed assets.
6) The word “Reconstitution of Partnership” is used at the time of ____.
a) Retirement/Death of a partner
b) Change in existing profit sharing ratio of the partners
c) Admission of a partner
d) All of the above
7) Why does a new partner contribute towards goodwill on his admission?
8) The ‘Lawrence’ partnership firm has 3 partners. Madhav, Viraj and Mundra, sharing
profits in the ratio of 1/2, 2/5 and 1/10.
Find new ratio of remaining partners if Mundra retires.
9) What is meant by ‘Compulsory Dissolution’ of a partnership firm?
10) Ronald and Shaan are partners sharing profits in the ratio of 4:1. Their capitals were
ƻ 90,000 and ƻ 70,000 respectively. They admit Pratham for 1/3rd share in the profits.
Pratham brought ƻ 1,00,000 as his capital. Calculate the value of firm’s Goodwill.
11) P/L Suspense A/c debited in the deceased partner’s capital account.
What does it indicate?
12) Debenture holders are treated as _____.
a) customers of the company
b) vendors of the company
c) owners/Shareholders of the company
d) lenders of the company
13) A company may issue _____.
a) equity shares
b) preference shares
c) equity and preference shares
d) none of these
14) On the basis of the following information given below, calculate the amount of stationery
to be debited to the income and expenditure account of Good Health Sports Club
for the year ended 31st March, 2020

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 PARTICULARS 01.04.2019 01.04.2020
Stock of stationery 8,000 6,000
Creditors for stationery 9,000 11,000
Stationery purchased during the year ended 31 March, 2020 was ƻ 47,000
st

14) OR
Calculate the amount of sports material to be debited to the I & E a/c of sports club
for the year ended 31.03.2020 on the basis of the following information:
PARTICULARS 01.04.2019 01.04.2020
Stock of sports material 7,500 6,400
Creditors for sports material 2,000 2,600
Amount paid for sports material during the year was ƻ 19,000
15) A, B and C were partners in a firm sharing profits in the ratio of 3:2:1.
D was admitted into the firm with 1/4th share in profits, which he got 3/16th from B.
The total capital of the firm as agreed upon was ƻ 1,20,000 and D brought in cash
equivalent to 1/4th of this amount as his capital. The capital of other partners also had to be
adjusted in the ratio of their respective share in profits by bringing in or paying cash.
The capitals of A, B and C after all adjustments related to revaluation of assets and
reassessment of liabilities were ƻ 40,000; ƻ 35,000 and ƻ 30,000 respectively
Calculate the new capitals of A, B and C and record the necessary journal entries
for the above transactions.
15) OR
Ravi and Mukesh were partners in a firm sharing profits and losses equally.
On 31st March, 2019 their firm was dissolved. On the date of dissolution their balance
sheet showed stock of ƻ 60,000 and creditors of ƻ 70,000. After transferring stock and
creditors to realization account the following transactions took place.
i) Ravi took over 40% of total stock at 20% discount.
ii) 30% of toal stock was taken over by creditors of ƻ 20,000 in full settlement.
iii) Remaining stock was sold for cash at a profit of 25%.
iv) Remaining creditors were paid in cash at a discount of 10%.
Pass journal necessary entries for the above transactions in the books of the firm.
16) X, Y and Z are partners sharing profits and losses in the ratio of 5:3:2. With effect from
1st April, 2019, they decided to share profits and losses in the ratio of 2:3:5.
On that date, their balance sheet showed following balances:
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 General reserve ƻ 90,000
Workmen compensation reserve ƻ 10,000
Advertisement suspense a/c ƻ 40,000
They decided to carry these balances in the balance sheet.
Pass the adjusting entry. Show working notes clearly.

17) P and Q were partners sharing profits in the ratio of 5:3. On 1st April, 2018
they admitted R as a partner for 1/8th share in the profits with a guaranteed profit
of ƻ 75,000. New profit sharing ratio between P and Q will remain the same but they
agreed to bear any deficiency because of guaranteed profit to R in the ratio of 3:2.
Profit of the firm for the year ended 31st March, 2019 was ƻ 4,00,000.
Prepare profit and loss appropriation account of P, Q and R
for the year ended 31st March, 2019. Working notes are to be shown neatly.
18) Pass necessary journal entries on the dissolution of a firm in the following cases:
i) Dissolution expenses ƻ 1,100 were paid by partner ‘A’ on behalf of the firm.
ii) Partner ‘B’ agreed to carry out the dissolution process for a remuneration of ƻ 2,000.
He also agreed to bear the dissolution expenses. Dissolution expenses were ƻ 2,100.
iii) Partner ‘D’ agreed to carry out dissolution for a remuneration of ƻ 15,000.
Dissolution expenses were ƻ 13,000 which were paid by the firm.
iv) Partner ‘F’ was appointed to look after dissolution of the firm for
a remuneration of ƻ 9,000. He also agreed to pay the dissolution expenses.
‘F’ took furniture of ƻ 9,000 as his remuneration.
19) From the following Receipts and Payments Account of Krish Fitness and wellness Club
for the year ended 31st March 2020, prepare Income and Expenditure Account.
Receipts and Payments Account
Dr. For the year ending 31st March, 2020 Cr.
RECEIPTS (ƻ) PAYMENTS (ƻ)
To Balance b/d 85,000 By Doctors and coaches .
To Subscription 68,500 honorarium 25,000
To Entrance fees 25,000 By Medicines 15,500
To Life membership fees 30,000 By Medical equipment 30,000
To donations for tournament fund 20,000 By General expenses 8,000
To Sale of old medical equipment By Furniture 20,000
(Book value ƻ 15,000) 5,000 By Newspaper 8,000
To Miscellaneous receipts 15,000 By Rent, rates and taxes 5,000

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 By Tournament expenses 60,000
By Balance c/d 77,000
2,48,500 2,48,500
Additional Information: Following opening balances appeared in the books on 01.04.2019.
a) Tournament fund ƻ 15,000
b) Medical Equipment ƻ 1,50,000
c) Outstanding Subscription was ƻ 8,000 and Advance Subscription ƻ 5,000 (for 2019-20)
During the year 2019-20 Depreciation on medical equipment was ƻ 25,000
There were 600 members each paying an annual subscription of ƻ 100
20) i) Does change in profit sharing ratio result into dissolution of the partnership firm?
Give 2 reasons in support of your answer.
ii) L, M and N are partners in a firm sharing profits & losses in the ratio of 2 : 3 : 5.
On April 1, 2016 their fixed capitals were ƻ 2,00,000, ƻ 3,00,000 and ƻ 4,00,000
respectively. Their partnership deed provided for the following:
a) Interest on capital @ 9% per annum.
b) Interest on Drawings @ 12% per annum.
c) Interest on partners’ loan @ 12% per annum.
On July 1, 2016, L brought ƻ 1,00,000 as additional capital and N withdrew ƻ 1,00,000
from his capital. During the year L, M and N withdrew ƻ 12,000, ƻ 18,000 and ƻ 24,000
respectively for their personal use.
On January 1, 2017 the firm obtained a Loan of ƻ 1,50,000 from M.
The Net profit of the firm for the year ended March 31, 2017
after charging interest on M’s Loan was ƻ 85,000.
Prepare Profit & Loss Appropriation Account and Partners Capital Account. (2+4)
21) A, B & C were partners in a firm sharing profits & losses in proportion
to their fixed capitals. Their Balance Sheet as at March 31, 2017 was as follows:
Balance Sheet as at March 31, 2017
LIABILITIES (ƻ) ASSETS (ƻ)
Capitals . Bank 21,000
A ƻ 5,00,000 . Stock 9,000
B ƻ 3,00,000 . Debtors ƻ 15,000 .
C ƻ 2,00,000 10,00,000 Less: Provision ƻ 1,500 13,500
General reserve 75,000 A’s loan 35,500
Creditors 23,000 Plant and machinery 2,00,000
Outstanding salary 7,000 Land and building 6,00,000
B’s Loan 15,000 P & L for the year ending .
31 March 2017
st
2,41,000
11,20,000 11,20,000
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 On the date of above Balance Sheet, C retired from the firm on the following terms:
i) Goodwill of the firm will be valued at two years purchase of the Average Profits
of last three years. The Profits for the year ended March 31, 2015 & March 31, 2016 were
ƻ 4,00,000 and ƻ 3,00,000 respectively.
ii) Provision for Bad Debts will be maintained at 5% of the Debtors.
iii) Land & Building will be appreciated by Rs. 90,000 and Plant & Machinery
will be reduced to ƻ 1,80,000.
iv) A agreed to repay his Loan.
v) The loan repaid by A was to be utilized to pay C.
The balance of the amount payable to C was transferred to his Loan Account bearing
interest @ 12% per annum.
Prepare Revaluation Account, Partners’ Capital Accounts, Partners’ Current Accounts and
the Balance Sheet of the reconstituted firm.
21) OR
P & K were partners in a firm. On March 31, 2017 their Balance Sheet was as follows.
Balance Sheet as at March 31, 2017
LIABILITIES (ƻ) ASSETS (ƻ)
Capitals Bank 18,000
P ƻ 3,00,000 Stock 19,000
K ƻ 2,00,000 5,00,000 Debtors ƻ 22,000 .
General reserve 1,00,000 Less: Provision ƻ 1,500 20,500
Creditors 50,000 Unexpired insurance 5,000
Outstanding expenses 8,000 Shares in X limited 65,000
C’s loan 1,20,000 Plant and machinery 1,45,000
P&L a/c (profit for 2016-17) 55,000 Land and building 5,60,000
8,33,000 8,33,000

On April 1, 2017, they decided to admit C as a new partner for 1/4th share in profits
on the following terms.
i) C’s Loan will be converted into his capital
ii) C will bring his share of goodwill premium by cheque. Goodwill of the firm will be
calculated on the basis of Average Profits of previous three years.
Profits for the year ended March 31, 2015 and March 31, 2016
were ƻ 55,000 and ƻ 1,00,000 respectively
iii) 10% depreciation will be charged on Plant & Machinery and Land & Building
will be appreciated by 5%
iv) Capitals of P & K will be adjusted on the basis C’s capital. Adjustments be done
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 through bank and in case required overdraft facility be availed
Pass necessary Journal entries on C’s admission.
22) Sam Paints Ltd. was registered with an authorised capital of 50,00,000 divided
in 5,00,000 equity shares of 10 each.
Company issued 2,00,000 equity shares at a premium of ƻ per share, payable as follows:
3 on application
5 on allotment (including premium)
2 on first call
2 on second and final call
All shares were subscribed and all the money was duly except on 1000 shares in the first
call the shares were forfeited and dully reissued after the second call at 9 per share .
Pass necessary journal entries.

Part – B
(Analysis of Financial statements)
23) Why are loose tools and stores and spares not included in current assets
while calculating current ratio?
24) What will be the impact of ‘cash paid to trade payables’ on a current ratio of 1.8:1?
State the reason
25) Match the following
i) Earning capacity a) Solvency ratio
ii) Short term credibility b) Profitability ratio
c) Liquidity ratio
26) State whether the following statement is true or false.
In a common size balance sheet figure of revenue from operations
is assumed to be equal to 100.
27) Write the formula to find quick ratio.
28) Which of the following related to operating activities?
a) cash sales
b) cash purchases
c) salary paid
d) All the above
29) What is meant by ‘financing activities’ for preparing cash flow statement?

30) i) Net profit after interest and tax of M Ltd. was ƻ 1,00,000.
Its current assets were ƻ 4,00,000 and current liabilities were ƻ 2,00,000.
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 Tax rate was 50%.
Its total assets were ƻ 10,00,000 and 10% long term debt was ƻ 4,00,000
Calculate return on investment.
ii) Rate of gross profit on revenue from operations of a company is 25%.
Its gross profit is ƻ 5,00,000.
Its shareholders’ funds are ƻ 25,00,000; Non-current liabilities are ƻ 8,00,000
and non-current assets are ƻ 23,00,000
Calculate its working capital turn over ratio. (1½+1½)

30) OR
Under which sub-headings will the following items to be placed in the balance sheet
of a company as per Schedule III, Part-I of the Companies Act, 2013?
i) Loans repayable on demand
ii) Provision for employees benefit
iii) Negative valance in the statement of profit and loss
iv) Bank overdraft
v) Bills receivables
vi) Trade marks
31) Prepare a common-size statement of profit and loss of ‘Hari Dharshan Ltd.’
from the following information:
Particulars Note No. 2018-19 (ƻ) 2019-20 (ƻ)
Revenue from operations 20,00,000 10,00,000
Purchase of stock in trade 7,70,000 4,20,000
Change in inventories 1,20,000 80,000
Other expenses 52,000 30,000
Other income 60,000 50,000
Tax rate 50%

Prepare comparative statement of profit and loss.

31) OR
Following information is extracted from the Statement of profit and loss of Delko Ltd.

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 for the year ended 31st March, 2019:
Particulars Note No. 2018-19 (ƻ) 2019-20 (ƻ)
Revenue from operations 60,00,000 45,00,000
Employee benefit expenses 30,00,000 22,50,000
Depreciation 7,50,000 6,00,000
Other expenses 15,50,000 10,00,000
Tax rate 50%
Prepare comparative statement of profit and loss

32) Calculate cash flow from operating activities from the following information
Particulars Opening balances (ƻ) Closing balances (ƻ)
Surplus in statement of profit and loss 30,000 35,000
General reserve 10,000 15,000
Provision for depreciation on plant 30,000 35,000
Outstanding expenses 5,000 3,000
Goodwill 20,000 10,000
Trade receivables (Sundry debtors) 40,000 35,000
Plant costing ƻ 20,000 having book value of ƻ 14,000 was sold for ƻ 18,000 during the year.
----------------------------------------ALL THE BEST-----------------------------------------------------

ANSWERS
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Ans. 1) a) cash principle
Ans. 2) non profit seeking
Ans. 3) c) When, at the time of admission, goodwill already appears in the balance sheet
Ans. 4) a) A partnership business may include trade, vocation and profession
but not Joint ownership.
Ans. 5) a) Self-generated goodwill is not accounted as an asset OR goodwill should not be
raised in the books of accounts.
Ans. 6) d) All of the above
Ans. 7) A new partner should contribute towards goodwill because he has to compensate
the partners who sacrifice their share of profit in his favour.
Ans. 8) New Ratio = 5:4
Ans. 9) any one i) When all partners or except one all become insolvent
ii) When business is unlawful (unlawful activities)
Ans. 10) Total capital of firm = 1,00,000 X 3 = 3,00,000
Existing Capital = 90,000 + 70,000 + 1,00,000 = 2,60,000
Goodwill = 3,00,000 – 2,60,000 = 40,000
Ans. 11) His share of loss transferred to his account.
Ans. 12) d) lenders of the company
Ans. 13) c) equity and preference shares
Ans. 14)
Stock of stationery on 01.04.2019 ----------------- ƻ 8,000
Stationery purchased during 2019-20------------- ƻ 47,000
Less: Stock of stationery on 31.03.2020 --------- ƻ (6,000)
Stationery consumed during 2019-20 -------- ƻ 49,000
Amount to be debited to I & E a/c ƻ 49,000

Ans. 14) OR
PARTICULARS Amount
Amount paid for sports materials 19,000
Add: i) Creditors at the end of the year 2,600
ii) Opening stock 7,500
29,100
Less: i) Closing stock (6,400)
ii) Creditors at the beginning of the year (2,000)
Sports material consumed 20,700
Amount of sports materials to be debited to I & E a/c is ƻ 20,700
Ans. 15) Calculation of new profit sharing ratio:

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A = 3/6 – 3/16 = 15/48
B = 2/6 – 1/16 = 13/48
C = 1/6 X 8 /8 = 8/48
D = 1/4 X 12/12 = 12/48
New ratio = 15 : 13 : 8 : 12
A = 1,20,000 X 15/48 = ƻ 37,500 B = 1,20,000 X 13/48 = ƻ 32,500
C = 1,20,000 X 8/48 = ƻ 20,000 D = 1,20,000 X 12/48 = ƻ 30,000
Calculation of cash brought in or paid off:
particulars Aƻ B ƻ Cƻ
Existing capitals 40,000 35,000 30,000
Adjusted capitals (37,500) (32,500) (20,000)
Cash withdrawn 2,500 2,500 10,000

Journal
Date Particulars L.F. Dr. ƻ Cr. ƻ
Cash/Bank a/c 30,000
To D’s Capital a/c 30,000
(cash brought in by D as his capital)
A’s Capital a/c 2,500 .
B’s Capital a/c 2,500 .
C’s Capital a/c 10,000 .
To Cash/Bank a/c 15,000
(Cash withdrawn by partners to adjust
the capitals in the new ratio)

Ans. 15) OR

Date Particulars L.F. Dr. ƻ Cr. ƻ

i) Ravi’s Capital a/c Dr. 19,200
To Realisation a/c 19,200
(40% of the total stock taken over by
Ravi at 20% discount)
ii) No entry
iii) Cash a/c 22,500 .
To Realisation a/c 22,500
(stock sold for cash)

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 iv) Realisatio a/c 45,000 .
To cash a/c 45,000
(Creditors paid in cash at a discount of
10%)

Ans. 16) Journal

Date Particulars L.F. Dr. ƻ Cr. ƻ
2019 Z’s Capital a/c Dr. 18,000
April To X’s Capital a/c 18,000
(Being the adjustment entry)

Working notes:
1. Net effect of the balances of accumulated profits and losses
General reserve ƻ 90,000
Workmen compensation reserve ƻ 10,000
Advertisement suspense a/c ƻ (40,000)
Net amount to be adjusted ƻ 60,000
2. Calculation of sacrifice / gain due to change in profit-sharing ratio
X’s Sacrifice / Gain = 5/10 – 2/10 = 3/10 (sacrifice)
Y’s Sacrifice / Gain = 3/10 – 3/10 = 0 (no change)
Z’s Sacrifice / Gain = 2/10 – 5/10 = (3/10) (gain)
In this case Z has gained 3/10 in share whereas, X has sacrificed 3/10th share.
Thus, Z will compensate x for his gained share i.e., ƻ 60,000 X 3/10 = ƻ 18,000

Ans. 17) Profit and Loss Appropriation account

Dr. for the year ended 31st March, 2019 Cr.
PARTICULARS (ƻ) PARTICULARS (ƻ)
To Net profit transferred to By P & l a/c (loss) 4,00,000
P’s Capital a/c 2,18,750
Less: Deficiency in R’s share 15,000 2,03,750
Q’s Capital a/c 1,31,250
Less: Deficiency in R’s share 10,000 1,21,250
R’s Capital a/c 50,000
Add: Deficiency met by P & Q 25,000 75,000 . .
4,00,000 4,00,000

Working notes:

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 1) Calculation of new profit-sharing ratio of P,Q and R
P’s New share = 7/8 X 5/8 = 35/64
Q’s New share = 7/8 X 3/8 = 21/64
R’s Share of profit = 1/8 or 8/64
Thus, new profit-sharing ratio of P,Q and R = 35:21:8
2) Deficiency in R’s share (ƻ 25,000) is to be borne by P and Q in the ratio of 3:2,
i.e., ƻ 15,000 and ƻ 10,000 respectively.
Ans. 18) Journal
Date Particulars L.F. Dr. (ƻ) Cr. (ƻ)
i) Realisation a/c Dr. 1,100
To A’s Capital a/c 1,100
(Being the dissolution expenses paid be partner)
ii) Realisation a/c Dr. 2,000
To B’s Capital a/c 2,000
(Being the remuneration allowed to B)
iii a) Realisation a/c Dr. 15,000
To D’s Capital a/c 15,000
(Being the remuneration allowed to D)
iii b) Realisation a/c Dr. 13,000
To Bank a/c 13,000
(Being the dissolution expenses paid by the firm)
iv) No entry

Ans. 19)

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Ans. 20) i) Change in profit sharing ratio leads to dissolution of partnership and not of the firm.
Because the existing partnership agreement ends and new agreement comes into effect.
Ans. 20) ii) Profit & Loss Appropriation Account for the year ended March 31, 2017

Ans. 21)

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Ans. 21) OR

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Ans. 22)
Date Particulars L.F. Dr. (ƻ) Cr. (ƻ)
i) Bank a/c Dr. 8,00,000 .
To Equity share application a/c 8,00.000
(Money received on application)
ii) Equity share application a/c Dr. 8,00,000 .
To Equity share capital a/c 8,00,000
(Application money transferred to share capital
a/c)
iii Equity share allotment a/c Dr. 10,00,000 .
To Equity share capital a/c 4,00,000
To Securities premium reserve a/c 6,00,000
(allotment, including premium due)
iv Bank a/c Dr. 10,00,000 .
To Equity share allotment a/c 10,00,000
(Allotment money received including premium)
v Equity share first call a/c Dr. 4,00,000 .
To Equity share capital a/c 4,00,000
(money due on first call)
vi Bank a/c Dr. 4,00,000 .
To Equity share first call a/c 4,00,000
(money received on first call)
vii Equity share second and final call a/c Dr. 4,00,000 .
To Equity share capital a/c 4,00,000
(Money due on second and final call)
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 viii Bank a/c Dr. 4,00,000 .
To Equity share second and final call a/c 4,00,000
(Money received on second and final call)
ix Share issue expenses a/c Dr. 75,000 .
To Bank a/c 75,000
(Expenses incurred on issue of shares)
x Securities premium reserve a/c 75,000 .
To Share issue expenses a/c 75,000
(Share issue expenses written off against
securities premium reserve a/c)

Ans. 22) OR
Date Particulars L.F. Dr. (ƻ) Cr. (ƻ)
i) Bank a/c Dr. 1,00,000 .
To 10% debentures application a/c 1,00,000
(Aplication money received on 10,000 debentures
@ ƻ10 per debenture)
ii) 10% debentures application a/c Dr. 1,00,000 .
To 10% debentures a/c 1,00,000
(application money transferred)
iii 10% Debentures allotment a/c Dr. 2,00,000 .
To 10 % debentures a/c 2,00,000
(Allotment due)
iv Bank a/c Dr. 2,46,000 .
To 10% Debentures allotment a/c 1,90,000
To Calls in advance a/c 56,000
(allotment money received on 9,500 debentures
@ ƻ 20 per debenture; plus call received in
advance on 800 debentures @ ƻ 70 per
debenture)
v 10% Debentures first call a/c Dr. 3,00,000 .
To Debentures a/c 3,00,000
(First call due on 10,000 debentures @ ƻ 30 each)
vi Bank a/c Dr. 2,76,000 .
Calls in advance a/c Dr. 24,000 .
To 10% Debenture first call a/c . 3,00,000

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 (first call money received after adjusting the . .
advance of first call @ ƻ 30 per debenture on 800 . .
debentures of Kala) . .
Bank a/c 10,000 .
To 10% Debentures allotment a/c 10,000
(receipt of arrears of allotment in respect of 500
debentures)
vii 10% debentures second and final call a/c Dr. 4,00,000 .
To 10% Debentures a/c 4,00,000
(Second and final call due on 10,000 debentures
@ ƻ 40 per debenture)
viii Bank a/c Dr.
Calls in advance a/c Dr.
To 10% debentures second and final call a/c
(Second call money received after adjusting the
advance of second call @ ƻ 40 per debenture on
800 debentures of Kala)
Part – B
(Analysis of Financial statements)
Ans. 23) Because they are not held for conversion into cash.
Ans. 24) Current ratio will improve because both current assets and current liabilities are
decreased by the same amount.
Ans. 25) i)- b ii) c
i) Earning capacity b) Profitability ratio
ii) Short term credibility c) Liquidity ratio
Ans. 26) False
Ans. 27) Quick ratio = Liquid assets/Current liabilities
Ans. 28) d) All the above
Ans. 29) Financing activities are the activities that result in change in capital or borrowings of
the enterprise.
Ans. 30) a) Return on investment = Profit before interest and tax / Capital employed X 100
Profit before tax = 1,00,000 X 100/5 = ƻ 2,00,000
Add: Int. on long term debts = ƻ 40,000
Profit before interest and tax = ƻ 2,40,000
Capital employed = total assets – current liabilities
= ƻ 10,00,000 – ƻ 2,00,000 = ƻ 8,00,000
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Therefore return on investment = 2,40,000 / 8,00,000 X 100 = 30%
Ans. 30 b) Working capital turnover ratio = Revenue from operations / Working capital
Gross profit = ƻ 5,00,000
So, Revenue from operations = ƻ 5,00,000 X 100/25 = ƻ 20,00,000
Working capital = Share holders funds + Non current liabilities – non current assets
= ƻ 25,00,000 + ƻ 8,00,000 – ƻ 23,00,000 = ƻ 10,00,000
Working capital turnover ratio = ƻ 20,00,000/10,00,000 = 2times
Ans. 30) OR
i) Loans repayable on demand – Short term borrowings
ii) Provision for employees benefit – Long term provisions
iii) Negative valance in the statement of profit and loss – Reserves and surplus
iv) Bank overdraft – Short term borrowings
v) Bills receivables – Trade receivables
vi) Trade marks – Fixed assets - Intangible

Ans. 31)
In the books of ‘Hari Darshan Ltd.’ common size statement of profit and loss
For the year ended 31st March 2018 and 31st March 2019
Particulars Absolute Absolute Percentage Percentage
amount amount of RFO of RFO
2017 – 18 ƻ 2017-18 ƻ 2017-18 % 2017-18 %
Revenue from operations 10,00,000 20,00,000 100 100
Add: Other income 50,000 60,000 5 5
Total revenue 10,50,000 20,60,000 105 103
Less: Expenses . . . .
Purchase of stock in trade 4,20,000 7,70,000 42 38.5
Change in inventories 80,000 1,20,000 8 6.0
Other expenses 30,000 52,000 3 2.6
Total expenses 5,30,000 9,42,000 53 47.1
Profit before tax 5,20,000 11,18,000 52 55.90
Less: Tax @ 50% 2,60,000 5,59,000 26 27.95
Profit after tax 2,60,000 5,59,000 26 27.95

Ans. 31 OR)
Particulars 2017 – 18 2017-18 Absolute Percentage
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 ƻ ƻ increase/ increase/
decrease decrease
ƻ %
Revenue from operations 45,00,000 60,00,000 15,00,000 33.33
Total revenue 45,00,000 60,00,000 15,00,000 33.33
Less: Expenses ,. . . .
Employee benefit expenses 22,50,000 30,00,000 7,50,000 33.33
Depreciation 6,00,000 7,50,000 1,50,000 25
Other expenses 10,00,000 15,50,000 5,50,000 55
Total expenses 38,50,000 53,00,000 14,50,000 37.66
Profit before tax 6,50,000 7,00,000 50,000 7.69
Less: Tax @ 50% 3,25,000 3,50,000 25,000 7.69
Profit after tax 3,25,000 3,50,000 25,000 7.69

Ans. 32) Pg. 5.34 illustration 31 Grewal

Cash flow from operating activities
Particulars Amount ƻ Amount ƻ
Calculation of net profit before tax and . .
extraordinary items . .
Net profit for the year (cl-op) (35,000 – 30,000) 5,000 .
Add: Transfer to General reserve 5,000 10,000
Net profit before tax and extraordinary items 10,000
Add: Non-cash expenses . .
Depreciation of plant (WN) 11,000 .
Goodwill amortised 10,000 21,000
. . 31,000
Less: Non-operating incomes: . .
Gain(profit) on sale of plant (WN) . 5,000
Operating profit before working cap. Changes . 32,000
Add: decrease in current assets . .
Trade receivables (Su. Drs.) . 5,000
. . .
Less: Decrease in current liabilities . .
Outstanding expenses . 2,000
Cash flow from operating activities . 30,000

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Wrking notes PLANT ACCOUNT
Particulars (ƻ) Particulars (ƻ)
To Balance b/d 20,000 By Bank a/c – sale 18,000
To Gain (profit) 4,000 By Provision for dep. a/c 6,000
on sale of plant a/c (Dep on sold plant, i.e.,
(statement of p & l) ƻ 20,000 –ƻ 14,000)

24,000 24,000

Provision for depreciation on plant account

Particulars (ƻ) Particulars (ƻ)
To Plant a/c (from plant a/c) 6,000 By Balance b/d 30,000
To Balance c/d 35,000 By Depreciation a/c .
(statement of p&l) Bal. Fig. 11,000

41,000 41,000
# Accumulated depreciation on the plant sold is adjusted by debiting to provision for
depreciation on plant account and crediting it to plant a/c
Blue print
Part A
Unit 1–Financial statements of not-for profit organisations = 10 marks (1+3+6=10)
(1 mark -1, 3marks (either or) – 1 and 6 marks -1)
Unit 2–Accounting for partnership firms = 40 marks [(1X10)+4+4+4+4+6+8]
(1 mark – 10, 4 marks – 4, 6 marks – 1 and 8 marks - 1)
Unit 3–Accounting for companies = 10 marks (1+1+8=10)
(1 mark – 2 and 8 marks – 1)
Part B
Unit 4–Analysis of financial statements = 12 marks (1+1+1+1+1+3+4)
(1 mark - 5, 3 marks -1 and 4 marks -1)
Unit 5–Cash flow statement = 08 marks (1+1+6=8)
(1 mark -2, 6 marks -1)
Total = 80 marks
(3 marks question choice – Not for profit organisation
3 marks question choice – Accounting ratio
4 marks questions choice – common size and comparative statement
8 marks questions choice – 1) Partnership firm and 2) Accounting for companies)
(In public exam Accounting for companies carries weightage 20 marks.

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In this question paper instead of 4 and 6 marks of partnership, you get company accounts
numerical sums)

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