Students must start practicing the questions from CBSE Sample Papers for Class 12 Accountancy with Solutions Set 6 are designed as per the revised syllabus.

CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions

Time : 3 Hr.
Max. Marks : 80

General Instructions:

  • This question paper contains 34 questions. All questions are compulsory.
  • This question paper is divided into two parts, Part A and B.
  • Part – A is compulsory for all candidates.
  • Part – B has two options i.e.
    • Analysis of Financial Statements and
    • Computerised Accounting. Students must attempt only one of the given options.
  • Question 1 to 16 and 27 to 30 carries 1 mark each.
  • Question 17 to 20, 31 and 32 carries 3 marks each.
  • Question from 21, 22 and 33 carries 4 marks each.
  • Question from 23 to 26 and 34 carries 6 marks each. .
  • There is no overall choice. However, an internal choice has been provided in 7 questions of one mark, 2 questions of three marks, 1 question of four marks and 2 questions of six marks.

PART – A (60 Marks)
(Accounting For Partnership Firms & Companies)

Question 1.
Amit and Dharam are partners in a firm sharing profits and losses in the ratio of 2 : 1. They admit Sudhir into the partnership and new profit sharing ratio is 1:1:1.

Balance Sheet (Extract)

Liabilities Amount (₹) Assets Amount (₹)
Investment Fluctuation Fund 24,000 Investments 80,000

The market value of Investment is ₹ 74,000 on the date of admission of Sudhir. Investment Fluctuation Reserve will be distributed among partners as:
(a) Amit ₹ 12,000; Dharam ₹ 6,000
(b) Amit ₹ 16,000; Dharam ₹ 8,000
(c) Amit ₹ 8,000; Dharam ₹ 8,000; Sudhir ₹ 8,000
(d) Amit ₹ 6,000; Dharam ₹ 6,000; Sudhir ₹ 6,000
Answer:
(a) Amit ₹ 12,000; Dharam ₹ 6,000

Explanation: Investment fluctuation fund is created as a provision for any change in the market value of investments. At the time of admission of a partner, it is distributed among the old partners in their old profit sharing ratio after adjusting the difference of market value of investments. Here, in this case, ₹ 24,000 is distributed after adjusting ₹ 6,000 towards the difference of value of investments i.e., ₹ 18,000 is distributed among Amit and Dharam in the ratio of 2 :1.

Question 2.
Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R):
Assertion (A): General Reserve, Reserve Fund or the balance of Profit & Loss Account appearing in the Balance Sheet of a firm at the time of admission of a partner, should be transferred to Old Partners’ Capital/Current Account in old profit sharing ratio.

Reason (R): General Reserve, Reserve Fund or the balance of Profit & Loss Account appearing is the Balance Sheet of a firm at the time of admission of a partner, are resultant of part profits when the new partner was not admitted. In the context of the above two statements, which of the following is correct?
Codes:
(a) Both (A) and (R) are correct and (R) is the correct explanation for (A).
(b) Both (A) and (R) are correct, but (R) is not the correct explanation for (A).
(c) (A) is correct, but (R) is incorrect.
(d) Both (A) and (R) are incorrect. (1)
Answer:
(a) Both (A) and (R) are correct and (R) is the correct explanation for (A).

Explanation: All the accumulated profits/losses and reserves need to be distributed among the old partners, as they are the result of part profits of the firm.

Question 3.
Akshara, a shareholder of a company to whom 12,000 shares were allotted of ₹ 100 each, failed to pay allotment money of ₹ 30 per share and call money of ₹ 30 per share. Akshara had paid only application money. Pro-rata allotment proportion is 5: 6. What will be the amount of calls-in-arrears on allotment?
(a) ₹ 3,60,000
(b) ₹ 2,64,000
(c) ₹ 96,000
(d) None of the above

OR

Directors of Glenk Limited forfeited 12,000 shares of ₹ 100 each of Dharna due to non payment of allotment money of ₹ 40 per share and first & final call money of ₹ 30 per share. Out of the forfeited shares, 9,000 shares were re-issued at ₹ 80 per share fully paid. What amount will be transferred to Capita Reserve Account?
(a) ₹ 90,000
(c) ₹ 2,70,000
(b) ₹ 180,00O
(d) ₹ 3,60,000
Answer:
(b) ₹ 2,64,000

Explanation: Allotment Money Due on Akshara’s shares = 12,000 x ₹ 30 = ₹ 3,60,000
Shares Applied by Akshara = \(\frac { 6 x 12,000 }{ 5 }\)
= 14,400
Excess application money = {(14,400 – 12,000) x ₹ 40}
= 2,400 x ₹ 40
= ₹ 96,000
Calls-in-Arrears on Allotment = Allotment Money Due – Excess application money
= ₹ 3,60,000 – ₹ 96,000 = ₹ 2,64,000

OR

(a) ₹ 90,000
Explanation: Forfeited Amount on 12,000
Shares = 12,000 x ₹ 30 = ₹ 3,60,000
Shares Re-issued = 9,000
Forfeited money on 9,000 Shares =
₹ 3,60,000 x 12,000 x \(\frac { 10 }{ 100 }\) = ₹ 2,70,000
Loss on Re-issue of Shares = 9,000 x ₹ 20 = ₹ 1,80,000
Amount to be transferred to Capital Reserve
Account = ₹ 2,70,000 – ₹ 1,80,000 = ₹ 90,000

CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions

Question 4.
Rajesh and Manish are partners in a partnership firm. They have a reserve of ₹ 50,000 in their balance sheet. They want to admit Sanjay for \(\frac { 1 }{ 4 }\)th share of profit. The accounting treatment of reserve will be.
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-1

OR

Minku and Cinku are partners. According to Profit and Loss Account, the net profit for the year is ₹ 2,00,000. The total interest on partner’s drawings is ₹ 1,000. Minku’s salary is ₹ 40,000 per year and Cinku’s salary is ₹ 3,000 per month. The net profit as per Profit and Loss Appropriation Account will be:
(a) ₹ 1,58,000
(b) ₹ 1,56,000
(c) ₹ 1,25,000
(d) ₹ 1,23,000 (1)
Answer:
(b)
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-10
Explanation: Reserve is distributed among old partners in old profit sharing ratio. In this case, it is assumed that old partners shared profits and losses equally.

Related Theory
The other adjustments to be made at the time of admission of new partner are goodwill, revaluation of assets and liabilities, and accumulated profits and losses.

OR

(c) ₹ 1,25,000

Explanation: Net Profit as per Profit and Loss Appropriation Account = ₹ 2,00,000 (Net Profit for the year) + ₹ 1,000 (Interest on Drawings) – ₹ 40,000 (Salary of Minku) – ₹ (3,000 x 12) (Salary of Cinku) = ₹ 1,25,000.

Question 5.
Amit and Sumit are partners in a firm. Amit advance a loan of ₹ 50,000 @ 12% p.a. on 31st December, 2021. For the year ending 31st March, 2022, the firm incurs a loss of ₹ 40,000 before charging interest. What amount of profit or loss will be transferred to partners?
(a) ₹ 38,500
(b) ₹ 40,000
(c) ₹ 41,500
(d) No amount (1)
Answer:
(c) ₹ 41,500

Explanation: Interest on partner’s loan is a charge against profit and shall be charged whether the firm earns profit or incurs loss.
Interest on loan = ₹ 50,000 x \(\frac { 3 }{ 12 }\) x \(\frac { 12 }{ 100 }\)
= ₹ 1,500
Loss for the year before interest = ₹ 40,000
Total loss for the year
= ₹ 40,000 + ₹ 1,500
= ₹ 41,500
Amount transferred to Amit = 41,500 x \(\frac { 1 }{ 2 }\)
= ₹ 20,750 (Debit)
Amount transferred to Sumit = 41,500 x \(\frac { 1 }{ 2 }\)
= ₹ 20,750 (Debit)

Question 6.
Hits Ltd. takes over the assets worth ₹ 5,0,000 and Liabilities worth ₹ 1,00,000 of Random Ltd. In consideration thereof it issued 12% Debentures of ₹ 4,40,000. The balance of ₹ 40,000 will be debited to:
(a) General Reserve Account
(b) Goodwill Account
(c) Capital Reserve Account
(d) Statement of Profit and Loss

OR

When debentures are issued at par and redeemable at a premium, the loss on such an issue is debited to:
(a) Profit and Loss Account
(b) Debentures Application and Allotment Account
(c) Loss on Issue of Debentures Account
(d) Debenture Redemption Reserve Account (1)
Answer:
(b) Goodwill Account
Explanation: Goodwill is an intangible asset that accounts for the excess purchase price of another company. Hence, the excess amount of ₹ 40,000 paid against purchase shall be debited to Goodwill Account.

OR

(c) Loss on Issue of Debentures Account Explanation: When a debenture is issued at a price below its nominal value, it is said to be issued at a discount. Discount on issue of 12. debentures is a capital loss and is shown on the asset side of the Balance Sheet under the head “Miscellaneous Expenditure”. Similarly, premium on redemption is also a capital loss and debited to Loss on Issue of Debentures A/c.

CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions

Question 7.
Jagdamba Fabricators Ltd. forfeited 1,000 Equity shares of ₹ 100 each, ₹ 60 paid up. These shares can be re-issued at a minimum price of:
(a) ₹ 40
(b) ₹ 60
(c) ₹ 100
(d) ₹ 80 (1)
Answer:
(b) ₹ 60

Explanation: The forfeited shares can be reissued at a maximum discount of the amount forfeited. Since the amount forfeited is ₹ 60 per share.

Question 8.
X and Y are partners in a business sharing profits in the ratio of 2: 1. The total capital of the firm is ₹ 16,00,000. The normal rate of return in similar business is 10%. Profit for the year ended 31st March 2022 is ₹ 2,00,000. The value of goodwill as per capitalisation method would be:
(a) ₹ 2,00,000
(b) ₹ 4,00,000
(c) ₹ 8,00,000
(d) ₹ 40,000 (1)
Answer:
(b) ₹ 4,00,000
Explanation:
Capitalised value of average profits
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-11
= 2,00,000 x \(\frac { 100 }{ 10 }\) = ₹ 20,00,000
Value of goodwill = Capital value of average profits – capital employed
= ₹ 20,00,000 – ₹ 16,00,000 = ₹ 4,00,000

Read the following hypothetical situation, Answer Question No. 9 and 10 In a partnership firm “Tamjham Storage and Distribution Limited”, Tanmay and Jawed were partners sharing the profits and losses equally. The firm was engaged in the storage and distribution of packed food items and its godowns were located at two different places in the district. Each godown was being managed individually by Tanmay and Jawed.

Jawed had to devote more time in the 12. godown managed by him, as the business activities increased at that godown due to more orders from that area. Due to that, Jawed demanded that his share in the profits of the firm should be increased. To which Tamnay agreed. The new profit sharing ratio was agreed to be 1: 2. For this purpose, the 13. goodwill of the firm was valued at three year’s purchase of the average profits of the last five years. The profits of the last five years were as follows:

Year Amount (₹)
2016-17 5,00,000 (Profit)
2017-18 3,50,000 (Profit)
2018-19 60,000 (Loss)
2019-20 1,50,000 (Profit)
2020-21 3,00,000 (Profit)

The following matters are revealed, on a scrutiny of the accounts:
(i) At the godown managed by Jawed, a fire broke out on 1st January, 2019, which resulted into a loss of goods of ₹ 3,00,000. An insurance claim of ₹ 70,000 was received from the insurance company.

(ii) During the year ended 31st March, 2020 the firm received an unexpected tax refund of ₹ 80,000. (1)

Question 9.
What will be the value of the Goodwill of the firm?
(a) ₹ 7,44,000
(b) ₹ 8,34,000
(c) ₹ 5,58,000
(d) ₹ 6,54,000 (1)
Answer:
(b) ₹ 8,34,000
Explanation:
Final Profit for 31st March, 2019
= – ₹ 60,000 (Loss) + ₹ 3,00,000 (Abnormal Loss) – ₹ 70,000 (Abnormal Profit) = ₹ 1,70,000
Final Profit for 31st March, 2020 = ₹ 1,50,000 (Profit) – ₹ 80,000 (Abnormal Profit) = ₹ 70,000 Average Profit
= \(\frac { 5,0,000+3,50,000+1,70,000+70,000+3,00,000 }{ 5 }\)
= \(\frac { 13,90,000 }{ 5 }\)
= ₹ 2,78,000
Goodwill of the Firm = ₹ 2,78,000 x 3 = ₹ 8,34,000

Question 10.
Loss due to fire broke out at the godown will be …………. (i) ………….and claim received from the insurance company will be …………
(ii) from the loss of 2017-18.
(a) (i) added; (ii) added
(b) (i) added; (ii) subtracted
(c) (i) subtracted; (ii) added
(d) (i) subtracted; (ii) subtracted (1)
Answer:
(b) (i) added; (ii) subtracted

Explanation: Abnormal profits are subtracted from the profits and abnormal losses are added to the profits

Question 11.
What will be the correct sequence of events?
(I) Average Profit
(II) Value of Goodwill
(III) Total Profit
(IV) Super Profit Options:
(a) (I), (II), (III), (IV)
(b) (III), (I), (IV), (II)
(c) (II), (III), (IV), (I)
(d) (IV), (II), (I), (III) (1)
Answer:
(b) (III), (I), (IV), (II)

Explanation: For calculating the value of goodwill by super profit method, firstly total profits of past years is calculated, on the basis of which average profit is calculated. Afterwards, super profit is calculated to compute the value of goodwill of the firm.

Question 12.
Vinod Ltd. forfeited a share of ₹ 50 issued at a premium of 20% for non-payment of first call of ₹ 15 per share and final call of ₹ 5 per share. At what minimum price it can be reissued?
(a) ₹ 50
(b) ₹ 30
(c) ₹ 40
(d) ₹ 20 (1)
Answer:
(d) ₹ 20

Explanation: ₹ 50 – ₹ 30 = ₹ 20

Question 13.
For which purposes Securities Premium Reserve can be used:
(I) For writing off the discount on debentures of the company.
(II) For writing off the preliminary expenses of the company.
(III) In providing for the premium payable on the redemption of preference shares.
Options:
(a) Both I & II
(b) Both I & III
(c) Only I
(d) All of the above. (1)
Answer:
(d) All of the above

Explanation: The amount of Securities Premium Reserve can be used for:

  • Writing off the preliminary expenses of the company.
  • Writing off the expenses, commission or discount allowed on issue of shares or debentures of the company.
  • Issuing fully paid bonus shares to the shareholders of the company.
  • Providing for the premium payable on the redemption of redeemable preference shares or debentures of the company.
  • Buy back of its own shares.

CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions

Question 14.
Sai, Pai and Tai are partners sharing profits and losses in the ratio of 1: 2: 3. On 1-4-2022 they decided to share the profits equally. On the date there was a credit balance of ₹ 1,20,000 in their Profit and Loss Account and a balance of ₹ 1,80,000 in General Reserve Account. Instead of closing the General Reserve Account and Profit and Loss Account, it is decided to record an adjustment entry for the same. In the necessary adjustment entry to give effect to the above arrangement:
(a) Dr. Sai by ₹ 50,000; Cr. Tai by ₹ 50,000
(b) Cr. Sai by ₹ 50,000; Dr. Tai by ₹ 50,000
(c) Dr. Sai by ₹ 50,000; Cr. Pai by ₹ 50,000
(d) Cr. Sai by ₹ 50,000; Dr. Pai by ₹ 50,000
Answer:
(a) Dr. Sai by ₹ 50,000; Cr. Tai by ₹ 50,000

Explanation: Old Profit Sharing Ratio = 1 : 2 : 3
New Profit Sharing Ratio = 1 : 1 : 1
Sacrificing Ratio = Old Share – New Share
Sai = \(\frac { 1 }{ 6 }\) – \(\frac { 1 }{ 3 }\) = – \(\frac { 1 }{ 6 }\) (Gain)
Pai =\(\frac { 2 }{ 6 }\) – \(\frac { 1 }{ 3 }\) = Nil
Tai = \(\frac { 3 }{ 6 }\) – \(\frac { 1 }{ 3 }\) = \(\frac { 1 }{ 6 }\) (Sacrifice)
Amount to be adjusted
= ₹ (1,20,000 + 1,80,000) x \(\frac { 1 }{ 6 }\)
= ₹ 50,000

Question 15.
Rohit, Mohit and Shobhit are partners sharing profits in the ratio of 5: 3: 2. Rohit withdraws ₹ 4,000 per quarter on the first day of quarter for first 9 months of the year. Calculate interest on drawings made by Rohit, if interest on drawings is chargeable @ 10% p.a.
(a) ₹ 300
(b) ₹ 900
(c) ₹ 600
(d) ₹ 1,200 (1)
Answer:
(b) ₹ 900
Explanation: Interest on Drawings
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-42
Total drawings of Rohit = ₹ 4,000 x 3 = ₹ 12,000
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-12
= 12 + \(\frac { 6 }{ 2 }\) = 9 months
Interest on drawings = 12,000 x \(\frac { 10 }{ 100 }\) x \(\frac { 9 }{ 12 }\) = ₹ 900

Question 16.
Which of the following is not deducted from the amount payable to the legal representative of a deceased partner?
(a) Deceased partner’s share of loss on revaluation of assets and liabilities
(b) Drawings made by deceased partner till date of death
(c) Deceased partner’s share in accumulated losses
(d) Deceased partner’s share of profit till date of death (1)
Answer:
(d) Deceased partner’s share of profit till date of death

Explanation: The deceased partner’s share of profit shall be added to the amount payable to the legal representative of deceased partners. The share of profit is credited to partner’s capital account

CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions

Question 17.
Ajay, Vijay and Sanjay were partners in a firm sharing profits in the ratio of 1:2:1. The firm closes its books on 31st March every year. On 30th September, 2021 Vijay died. On that date, his capital account showed a debit balance of ₹ 5000. There was a debit balance of ₹ 30,000 in the profit and loss account.

The goodwill of the firm was valued at ₹ 3,80,000. Vijay’s share of profit in the year of his death was to be calculated on the basis of average profits of last 5 years. The profits of last years are ₹ 65,000 ; ₹ 80,000 ; ₹ 70,000 ; ₹ 1,05,000 and ₹ 1,30,000 Pass necessary journal entries in the books of the firm on Vijay’s death. (3)
Answer:
journal
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-13
Working Notes:
(i) Vijay’s Share of goodwill = 3,80,000 x \(\frac { 2 }{ 4 }\) = ₹ 1,90,000
Gaining ratio of Ajay and Sanjay 1: 1
Ajay’s Share in goodwill = \(\frac { 1 }{ 2 }\) x 1,90,000 = ₹ 95,000
Sanjay’s Share in goodwill = \(\frac { 1 }{ 2 }\) x 1,90,000 = ₹ 95,000

(ii) Vijay’s Share in profit and loss (Dr.) = 30,000 x \(\frac { 2 }{ 4 }\) = ₹ 15,000

(iii) Vijay’s Share in current year profit
Average profit of last 5 year = \(\frac { 65,000 + 80,000 + 70000+ 1,05,000 + 1,30,000 }{ 5 }\)
= \(\frac { 4,50,000 }{ 5 }\) = ₹ 90,000
Vijay’s share in profit = 90,000 x \(\frac { 6 }{ 12 }\) x \(\frac { 2 }{ 4 }\) = ₹ 22,500

CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-14

Question 18.
The capital accounts of Ram and Shyam showed balances of ₹ 80,000 and ₹ 40,000 as on 1st April, 2022. They shared profits and losses in the ratio of 3 : 2. They allowed interest on capital @ 10% p.a. and interest on drawings @ 12% p.a. During the year, Ram withdrew ₹ 2,000 per month at the beginning of every month and Shyam withdrew ₹ 1,000 per month at the end of every month. Profit for the year, before the above mentioned adjustments, was ₹ 41,500. Calculate interest on drawings and show distribution of profits.

OR

Rajesh and Mahesh were partners in a firm sharing profits and losses in the ratio of 7 : 5. Their respective fixed capitals were ₹ 10,00,000 and ₹ 7,00,000. The partnership deed provided for the following:

  • Interest on capital @ 12% p.a.
  • Rajesh’s salary ₹ 6,000 per month and Mahesh’s salary ₹ 60,000 per year.

The profit for the year ended 31st March, 2020 was ₹ 5,04,000 which was distributed in the ratio of 3 : 2 without providing for the above. Pass an adjustment entry. (3)
Answer:
Interest on Drawings:
Ram’s Drawings = 2,000 x 12 = ₹ 24,000
Interest on Ram’s drawings = 24,000 x \(\frac { 12 }{ 100 }\) x \(\frac { 6.5 }{ 12 }\) = ₹ 1,560
Shyam’s Drawings = 1,000 x 12 = ₹ 12,000
Interest on Shyam’s drawings = 12,000 x \(\frac { 12 }{ 100 }\) x \(\frac { 5.5 }{ 12 }\) = ₹ 660
Dr. Profit and Loss Appropriation Account Cr.
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-15

OR

journal
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-16

Adjustment Table

Paritculars Rajesh (₹) Mahesh (₹) Total (₹)
Interest on Capital Cr. 1,20,000 84,000 2,04,000
Salary Cr. 72,000 60,000 1,32,000
Total Appropriation Cr. 1,92,000 1,44,000 3,36,000
Remaining Profits to be distributed in 7 : 5 Cr. 98,000 70,000 1,68,000
Total Cr. 2,90,000 2,14,000 5,04,000
Profit already distributed in the ratio of 3 : 2 Dr. 3,02,400 2,01,600 5,04,000
Net Effect 12,400 (Dr.) 12,400 (Cr.)

CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions

Question 19.
On 9th April, 2021, Sunshine Ltd. issued 500, 10% Debentures of ₹ 1,000 each credited as fully paid-up to the promoters for their services to incorporate the company. On 18th May, 2021, the company issued 100, 10% Debentures of ₹ 1,000 each credited as fully paid-up to the underwriters towards their commission. Pass necessary journal entries in the books of the company.

OR

Suhana Limited purchased machinery from Vikrant Manufacturers Limited. The company paid the vendors by issue of some equity shares and debentures and the balance through Bill payable on acceptance in their favour payable after three months. The accountant of the company, while journalising the above mentioned transactions left some items blank. You are required to fill in the blanks. (3)
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-2
Answer:
In the Books of Sunshine Limited
Journal
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-17

OR

In the Books of Suhana Limited
Journal
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-18
Working Notes:
Amount payable to Vikrant Manufacturers Limited is satisfied by: ₹ Issue of ₹ 2,00,000, 12% Debentures at 10% discount 1,80,000 Issue of 1,00,000 equity shares of ₹ 10 each at 15% premium [1,00,000 x (10 + 1.5)]11,50,000. 13,30,0 Bills Payable lssued = ₹ 14,00,000 – ₹ 13,30,000 = ₹ 70,000

Question 20.
Sonu, Monu and Tanu were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 1. The firm closes its books on 31st March every year. As per the agreement, on death of any partner, the share of Goodwill of deceased partner will be calculated at 50% on the basis of net profits of last four completed years before death. Sonu died on 30th June, 2019. The profits for the last four years were:

Year 2015-16 (₹) 2016-17 (₹) 2017-18 (₹) 2018-19 (₹)
Profit 97,000 1,05,000 30,000 84,000

His share of profit in the year of his death was to be calculated on the basis of sales. Sales for the year ended 31st March, 2019 was ₹ 21,00,000. From 1st April, 2019 to 30th June, 2019 the firm’s sales was ₹ 2,00,000. Pass necessary journal entries relating to the amount of Goodwill and Profit to be transferred to Sonu’s Capital Account.

OR

Reena and Raman are partners with capitals of ₹ 3,00,000 and ₹ 1,00,000 respectively. The profit forthe yearended 31st March, 2019 was ₹ 1,20,000. Interest on Capital is to be allowed at 6% p.a. Raman was entitled to a salary of ₹ 30,000 p.a. The drawings of partners were ₹ 30,000 and ₹ 20,000. The interest on drawings to be charged to Reena was ₹ 1,000 and to Raman ₹ 500. Assuming that Reena and Raman are equal partners, state their share of profits after necessary appropriations. (3)
Answer:
Journal
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-19
Working Notes:
(i) Calculation of Good will = \(\frac { 97,000 + 1.05000 + 30,000 + 84,000 }{ 2 }\) = \(\frac { 3,16,000 }{ 2 }\)
= ₹ 1,58,000
Sonu’s Share of Goodwill = 1,58,000 x \(\frac { 4 }{ 8 }\) = ₹ 79,000
Gaining ratio of Monu = New share – Old Share
= \(\frac { 3 }{ 4 }\) – \(\frac { 3 }{ 8 }\) = \(\frac { 6 – 3 }{ 8 }\) \(\frac { 3 }{ 8 }\)
Gaining ratio of Tanu = \(\frac { 1 }{ 4 }\) – \(\frac { 3 }{ 8 }\) = \(\frac { 2-1 }{ 8 }\)= \(\frac { 1 }{ 8 }\)
Goodwill borne by Monu = 79,000 x \(\frac { 3 }{ 4 }\) = ₹ 59,250
Goodwill borne by Tanu = 79,000 x \(\frac { 1 }{ 4 }\) = ₹ 19,750

(ii) Sonu’s Share of Profit
Ratio of last year profit = \(\frac { 84,000 }{ 21,00,000 }\) = 0.04
Profit for the current year = 2,00,000 x 0.04 = ₹ 8,000
Sonu’s share of Profit = 8,000 x \(\frac { 4 }{ 8 }\)= ₹ 4,000

OR

Profit and Loss Appropriation Account
Dr. for the year ending 31st March, 2019 Cr.
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-20
Share of Profits:
Reena = ₹ 33,750
Ra man = ₹ 33,750

CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions

Question 21.
Aroma Ltd. has authorised share capital of ₹ 50,00,000 divided into ₹ 5,00,000 equity shares of ₹ 10 each. It has existing share capital of ₹ 5,00,000. It further issued to public 1,50,000 equity shares at per for subscription payable as under: On Application ₹ 3, On Allotment ₹ 4, On call Balance amount The issue was fully subscribed and allotment was made to all the applicants. Calls were made during the year and duly received. Show share capital in the Balance Sheet of the company. (4)
Answer:
Balance Sheet (Extract only)
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-21
Notes to Accounts:
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-22

Question 22.
Rashmi and Rohini were partners sharing profits and losses in the ratio of 3 : 2. They decided to dissolve their partnership firm on 31st March, 2019. Rashmi took the responsibility of realisation. She was paid ₹ 1000 as commission for her services. The balance sheet as on that date stood as follows:
Balance Sheet
as at 31st March 2019
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-3
The following was agreed upon:

  • Rashmi agreed to take over furniture at 80% of book value.
  • Debts of ₹ 6,000 proved bad.
  • Rohini took over half of stock at 10% less. The remaining stock was sold at 15% less book value.
  • Machinery was sold for ₹ 30,000.
  • Creditors were settled for ₹ 36,000.
  • Bank loan was paid alongwith interest of ₹ 6,500.
  • Other liabilities were paid in full.
  • The expenses on realisation amounted to ₹ 1,200.

Prepare Realisation Account, Partners’ Capital Account and Bank Account to close the books of the firm. (4)
Answer:
Dr. Realisation Account Cr.
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-23
Dr. Partners’ Capital Accounts Cr.
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-24
Dr. Bank Account Cr.
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-25

Question 23.
Sunrise Company Ltd. offered for public subscription 10,000 shares of ₹ 10 each at ₹ 11 per share. Money was payable as follows:
₹ 3 on application
₹ 4on allotment (including premium)
₹ 4 on first and final call
Applications were received for 12,000 shares and the directors made pro-rata allotment. Mr. Ahmed, an applicant for 120 shares could not pay the allotment and call money and Mr. Basu, a holder of 240 shares, failed to pay the call All these shares were forfeited. The forfeited shares were re-issued at ₹ 10 per share fully paid up. Record journal entries for the above transactions In the books of Sunrise Company Ltd. (6)
Answer:
Journal
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-26
Working Notes:
(i) Amount received on application = 12,000 x 3 = ₹ 36,000
Amount due on application = 10,000 x 3 = ₹ 30,000
Amount adjusted on allotment = 36,000 – 30,000 = ₹ 6,000

(ii) Amount received on allotment:
Amount due on allotment = 10,000 x 4 = ₹ 40,000
Amount adjusted from application = ₹ 6,000

Shares allotted to Mr. Ahmed :
Ratio of Pro rata allotment of shares = 10,000 : 12,000 = 5 : 6
Shares allotted to Mr. Ahmed = 120 x \(\frac { 5 }{ 6 }\) = 100 shares
Amount paid by Mr. Ahmed on application = 120 x 3 = ₹ 360
Amount due on application = 100 x 3 = ₹ 300
Amount adjusted on allotment = 360 – 300 = ₹ 60
Amount due on allotment = 100 x 4 = ₹ 400
Amount not paid by Mr. Ahmed on allotment = 400 – 60 = ₹ 340
Therefore, total amount received on allotment = 40,000 – 6,000 – 340 = ₹ 33,660

(iii) Amount received on first and final call = 9,700 x 4 = ₹ 38,800

(iv) Amount of Share forfeiture:
Amount received from Mr. Ahmed = ₹ 360
Amount received from Mr. Basu = 200 x 6 = ₹ 1,200
Total amount received on shares forfeited = 360 + 1,200 = ₹ 1,560

CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions

Question 24.
King, Queen and Prince were partners in a firm sharing profits and losses in the ratio of 3 : 2 :1. On 31st March, 2022 there Balance Sheet was as follows:
Balance Sheet of King, Queen and Prince
As at 31.03.2022
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-4
On the above date, Jack was admitted as a new partner and it was decided that:

  • The new profit sharing ratio between King, Queen, Prince and Jack will be 2 : 2 : 1 : 1
  • Goodwill of the firm was valued at ₹ 90,000 and Jack brought his share of Good will Premium in cash.
  • The market value of investments was ₹ 24,000
  • Machinery will be reduced to ₹ 29,000
  • A creditor of ₹ 3,000 was not likely to claim the amount and hence to be written off.
  • Jack will bring proportionate capital so as to give him \(\frac { 1 }{ 6 }\) th share in the profits of the firm.

Prepare Revaluation Account, Partners’ Capital Account and Balance Sheet of the reconstituted firm.

OR

Balance Sheet of X, Y and Z who shared profits in the ratio of 5 : 3 : 2, as on 31st March, 2022 was as follows:
As at 31.03.2022
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-5
Y retired on 1st April, 2022 and it was agreed between the partners that

  • Goodwill of the firm is valued at ₹ 1,12,500 and Y’s share of it be adjusted into the accounts of X and Z who are going to share future profits in the ratio of 3: 2.
  • Fixed Assets be appreciated by 20%.
  • Stock of the firm be reduced to ₹ 75,000.
  • Y be paid amount brought in by X and Z so as to make their capitals proportionate to their new profit sharing ratio.

Prepare Revaluation Account, Capital Account of Partners at the time of Y’s retirement and the Balance Sheet of the New Firm. (6)
Answer:
Dr. Revaluation Account Cr.
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-27
Dr. Partners’ Capital Account Cr.
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-28

Working flotes:
(i) Combined Capital of King, Queen and Prince = ₹ 81,000 + ₹ 44,000 + ₹ 22,000 = ₹ 1,47,000
Combined share of King, Queen and Prince = 1 – \(\frac { 1 }{ 6 }\) = \(\frac { 5 }{ 6 }\)
Total capital of firm = ₹ 1,47,000 x \(\frac { 5 }{ 6 }\) = ₹ 1,76,400
Jack’s Capital = ₹ 1,47,400 x \(\frac { 1 }{ 6 }\) = ₹ 29,400

(ii) Calculation of Sacrificing ratio Sacrificing ratio = New share – Old share
King = \(\frac { 2 }{ 6 }\) – \(\frac { 3 }{ 6 }\) = – \(\frac { 1 }{ 6 }\) (Sacrifice)
Queen= \(\frac { 2 }{ 6 }\) – \(\frac { 2 }{ 6 }\) = 0
Prince = \(\frac { 1 }{ 6 }\) – \(\frac { 1 }{ 6 }\) = 0

(iii) Premium of Goodwill to be brought b Jack = 90,000 x \(\frac { 1 }{ 6 }\) = ₹ 15,000 which shalt be credited to Ram’s Capital A/c.

OR

Balance Sheet of X, Y and Z who shared profits in the ratio of 5 : 3 : 2, as on 31st March, 2022 was as follows:

Batance Sheet
as at 31st March, 2022
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-29
Dr. Partners’ Capital Account Cr.
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-30
Balance Sheet (after Y’s Retirement)
as at 31st March, 2022
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-31
Working Notes:
(1) Calculation of Gaining Ratio:
Old Profit Sharing Ratio of X, Y and Z = 5 : 3 : 2
New Profit Sharing Ratio of X and Z = 3: 2
Gaining Ratio = New Profit Sharing Ratio – Old Profit Sharing Ratio
X’s Gain = \(\frac { 3 }{ 5 }\) – \(\frac { 5 }{ 10 }\) = \(\frac { 1 }{ 10 }\)
ZsGain = \(\frac { 2 }{ 5 }\) – \(\frac { 2 }{ 10 }\) = \(\frac { 2 }{ 10 }\)
Gaining Ratio of X and Z = 1 : 2

(2) Adjustment of Goodwill:
Goodwill of Firm = ₹ 1,12,500
Y’s share of Goodwill = ₹ 1,12,500 x \(\frac { 3 }{ 10 }\) = ₹ 33750
which will, be compensated by X and Z in their gaining ratio, i.e., 1 : 2
X will compensate = ₹ 33,750 x \(\frac { 1 }{ 3 }\) = ₹ 11,250
Z will compensate = ₹ 33,750 x \(\frac { 2 }{ 3 }\) = ₹ 22,500

(3) Adjustment of Capital:
Adjusted Capital of X = ₹ 65,000 + ₹ 11,250 + ₹ 15,000 – ₹ 11,250 = ₹ 1,80,000
Adjusted Capital of Y = ₹ 84,000 + ₹ 6,750 + ₹ 9,000 + ₹ 11,250 + ₹ 22,500 = ₹ 1,33,500
Adjusted Capital of Z = ₹ 66,000 + ₹ 4,500 + ₹ 6,000 – ₹ 22,500 = ₹ 54,000
New Capital of Firm = ₹ 1,80,000 + ₹ 1,33,500 + ₹ 54,000 = ₹ 3,67,500
X’s New Capital = ₹ 3,67,500 x \(\frac { 3 }{ 5 }\) = ₹ 2,20,500
Z’s New Capital = ₹ 3,67,500 x \(\frac { 2 }{ 5 }\) = ₹ 1,47,000
X brings in = ₹ 2,20,500 – ₹ 1,80,000 = ₹ 40,500
Z brings in = ₹ 1,47,000 – ₹ 54,000 = ₹ 93,000

CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions

Question 25.
Hemant, Abhimanyu and Anshul were partners in a firm sharing profits in the ratio of 5:3:2. On 31st March, 2022, their Balance Sheet was as follows:
Balance Sheet
as at 31.03.2022
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-6
On the above date, Abhimanyu decided to retire from the firm and Hemant and Anshul agreed to continue the business on the following terms:

  • Goodwill of the firm was valued at ₹ 2,04,000.
  • Provision for Bad Debts to be reduced by ₹ 2,000.
  • There was a claim of ₹ 8,000 for Workmen’s Compensation.
  • The new profit sharing ratio between Hemant and Anshul will be 3 : 2.

Pass necessary Journal entries and prepare Revaluation account. (6)
Answer:
Journal
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-32
RevaLuation A/c
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-33

Working Notes:
(i) Abhimanyus share of Goodwill = 2.04.000 x \(\frac { 3 }{ 10 }\) = ₹ 61,200

(ii) Gaining ratio = Newshare – Old share
Hemant’s gaining ratio = \(\frac { 3 }{ 5 }\) – \(\frac { 5 }{ 10 }\) = \(\frac { 1 }{ 10 }\) (Gain)
Anshut gaining ratio = \(\frac { 2 }{ 5 }\) – \(\frac { 2 }{ 10 }\) = \(\frac { 2 }{ 10 }\) (Gain)
Gaining ratio of Hemant and Anshul = 1 : 2
Goodwill borne by Hemant = 61,200 x \(\frac { 1 }{ 3 }\)= ₹ 20,400
Goodwill borne by Anshul = 61,200 x \(\frac { 2 }{ 3 }\) = ₹ 40,800

Question 26.
Jackson Ltd. invited applications for issuing 54,000 equity shares of ₹ 100 each payable as follows:
₹ 50 per share on application;
₹ 10 per share on allotment;
Balance on First and Final call
Applications were received on 80,000 shares. Full allotment was made to the applicants of 14,000 shares. The remaining applicants were allotted remaining 40,000 shares on pro-rata basis. Excess money received with application was adjusted towards sums due on allotmentand call Mohit, holding 1,200 shares, who belonged to the category of applicants to whom foil allotment was made, paid the call money at the time of allotment.

Shobhit, who belonged to the category to whom shares were alloted on pro-rata basis did not pay anything after application on his 400 shares. Shobhit’s shares were forfeited after the first and final call. All the forfeited shares were later on re-issued at ₹ 110 per share as fully paid up. Pass the necessary journal entries in the books of Jackson Ltd. for the above transactions by opening colls in arrears and calls in advance account where ever necessary. (6)
Answer:
In the Books of Jackson Ltd.
Journal
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-34
Working Notes:
(i) Amount received on application = 80,000 x 50 = ₹ 40,00,000
Amount due on application = 54,000 x 50 = ₹ 27,00,000

(ii) Allotment of shares:
Shares allotted to applicants of 14,000 shares = 14,000
Remaining applications = 80,000 – 14,000 = 66,000 shares
Shares allotted to applicants of 66,000 shares = 40,000 shares
Ratio of pro-rata allotment = 40,000 : 66 000 = 20 : 33

(iii) Adjustment of application money:
Application money received on 66,000 shares = 66,000 x 50 = ₹ 33,00,000
Amount adjusted in application = 40,000 x 50 = ₹ 20,00,000
Amount received in excess = 33,00,000 – 20,00,000 = ₹ 13,00,000
Amount due on 40,000 shares on allotment = 40,000 x 10 = ₹ 4,00,000 (adjusted from application money)
Excess amount due after allotment money i.e. Call in advance = 13,00,000 – 4,00,000 = ₹ 9,00,000

(iii) Amount received on allotment:
Amount received on 14,000 shares = 14,000 x 10 = ₹ 1,40,000
Amount received for first and final call of Mohit’s share = 1,200 x 40 = ₹ 48,000
Total amount received on allotment = 1,40,000 + 48,000 = ₹ 1,88,000

PART – B (20 Marks)
Analysis of Financial Statements (Option – I)

Question 27.
Balance Sheet of a company is required to be prepared in the format given in ………………
(a) ScheduLe III, Part-I
(b) ScheduLe III, Part-II
(c) ScheduLe III, Part-III
(d) Table A

OR

Which of the following is correct?
(I) Interest on calls-in-advance is @ 10% p.a.
(II) Interest on calls-in-arrears is @ 12% pa.
(a) Only I
(b) Only II
(c) Both are correct
(d) Both are incorrect (1)
Answer:
(a) Schedule III, Part-I

Explanation: Section 129 of the Companies Act, 2013 provided that Schedule III, Part-1 is the provision forpreparation of Balance Sheet.

OR

(d) Both are incorrect.

Question 28.
If current assets are ₹ 1,50,000, current liabilities are ₹ 50,000, inventories are ₹ 15,000 and prepaid expenses are ₹ 25,000, the value of quick assets would be:
(a) ₹ 1,10,000
(b) ₹ 60,000
(c) ₹ 1,25,000
(d) ₹ 1,35,000 (1)
Answer:
(a) ₹ 1,10,000

Explanation: Quick assets are those assets which are quickly convertible into cash. Inventories and prepaid expenses are excluded in calculating prepaid expenses are excluded in calculating quick assets from current assets. Quick assets = Current assets – inventories – prepaid expenses = 1,50,000 – 15,000 – 25,000 = ₹ 1,10,000

CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions

Question 29.
What will be the effect of purchase return on Gross Profit Ratio, if the Gross Profit Ratio of Ravi Limited is 30%?
(a) No change
(b) Increase
(c) Decrease
(d) None of the above

OR

If total assets are ₹ 13,20,000, noncurrent assets are of ₹ 6,00,000 and capital employed is ₹ 12,00,000, which of the following correctly represents the current ratio?
(a) 2: 1
(b) 4: 1
(c) 6: 1
(d) 7: 1 (1)
Answer:
(c) 6: 1

Explanation:
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-35
Current assets = Total assets – Non-current assets
= 13,20,000 – 6,00,000
= ₹ 7,20,000
Current Liabilities = Total assets – Capital employed
= 13,20,000 – 12,00,000
= ₹ 1,20,000
Current ratio = \(\frac { 7,20,000 }{ 1,20,000 }\) = \(\frac { 6 }{ 1 }\)
= 6 : 1

Related Theory
Current ratio is a part of liquidity ratios. Liquidity ratios are calculated to have indications about the short term solvency of the business i.e., the firm’s ability to meet its current obligations. The other liquidity ratio is quick ratio.

Question 30.
Balance Sheet (Extract)

Equity and Liabilities Note no. 31.03.2021 31.03.2022
12% Debentures 2,00,000 1,60,000

Additional Information:
Interest on debentures is paid on half yearly basis on 30th September and 31st March each year. Debentures were redeemed on 30th September 2021. How much amount (related to above information) will be shown in Financing Activity for Cash Flow Statement prepared on 31st March 2022?
(a) Outflow ₹ 40,000
(b) Inflow ₹ 42,600
(c) Outflow ₹ 61,600
(d) Outflow ₹ 64,000 (1)
Answer:
(c) Outflow ₹ 61,600

Explanation:
Cash flow from financing activities
Debentures redeemed ₹ (40,000)
Add: Interest on 30th September 2021
₹ (12,000)
Add: Interest on 31st March 2022 ₹ (9,600)
Total cash outflow from financing
activities ₹ (61,600)
(i) Interest on debentures till 30th September, 2021
= 2,00,000 x \(\frac { 12 }{ 100 }\) x \(\frac { 6 }{ 12 }\)
= ₹ 12,000

(ii) Interest on debentures for half year ending 31st March, 2022
= 1,60,000 x \(\frac { 12 }{ 100 }\) x \(\frac { 6 }{ 12 }\)
= ₹ 9,60

CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions

Question 31.
Under which major headings and sub-headings, the following items will be shown in the Balance Sheet of a company as per Schedule III of the Companies Act, 2013.

  • Interest accrued on Secured Loans
  • Investment in Property
  • Provision for Employees Benefit
  • Capital work in progress
  • Provision for Tax
  • Outstanding Expenses (3)

Answer:

Items Major Heading Sub-Heading
(i) Interest accrued on Secured Loans Current Liabilities Other Current Liabilities
(ii) Investment in Property Non-Current Assets Non-Current Investment
(iii) Provision for Employees Benefit Non-Current Liabilities Long-term Provisions
(iv) Capital work in progress Non-Current Assets Fixed Assets
(v) Provision for Tax Current Liabilities Short-term Provisions
(vi) Outstanding Expenses Current Liabilities Other Current Liabilities

Question 32.
Financial statements are prepared following the consistent accounting concepts, principles, procedures and also the legal environment in which the business organizations operate. These statements are the sources of information on the basis of which conclusions are drawn about the profitability and financial position of a company so that their users can easily understand and use them in their economic decisions in a meaningful way. Describe any three techniques of financial analysis.
Answer:
The most commonly used techniques of financial analysis are as follows:
(i) Comparative Statements: These are the statements showing the profitability and financial position of a firm for different periods of time in o comparative form to give an ideo about the position of two or more periods. It usually applies to the two important financial statements, namely, balance sheet and statement of profit and toss prepared in a comparative form. This analysis is also known as horizontal anolysis.

(ii) Common Size Statements: These are the statements which indicate the relationship of different items of a financial statement with a common item by expressing each item as o percentage of that common item. This analysis is aLso known as Vertical analysis.

(iii) Trend AnaLysis It is a technique of studying the operational results and financial position over a series of years. Trend analysis is important because, with its long run view, it may point to basic changes in the nature of the business.

(iv) Ratio AnaLysis: It describes the significant relationship which exists between various items of a balance sheet and a statement of profit and Loss of a firm. As a technique of financial analysis, accounting ratios measure the comparative significance of the individual items of the income and position statements.It is possible to assess the profitability. solvency and efficiency of on enterprise through the technique of ratio analysis.

(v) Cash Flow Analysis: It refers to the analysis of actual movement of cash into and out of an organisation. The flow of cash into the business is called as cash inflow or positive cash flow and the flow of cash Out of the firm is called as cash outflow or a negative cash flow. Cash flow statement is prepared to project the manner in which the cash has been received and has been utilised during an accounting year. Thus, it summarises the couses for the changes in cash position of a business enterprise between dates of two balance sheets.

Question 33.
Calculate Debt Equity ratio from the following information:

Particulars Amount (₹)
Total External Liabilities 5,00,000
Balance Sheet Total 10,10,000
Current Liabilities 1,00,000
Fictitious Assets 10,000

OR

The current ratio is 2 :1. State giving reasons which of the following transactions would improve, reduce and not change the current ratio:

  • Payment of current liability:
  • Purchased goods on credit;
  • Sale of a Computer (Book value: ₹ 4,000) for ₹ 3,000 only;
  • Sale of merchandise (goods) costing ₹ 10,0 for ₹ 11,000 (4)

Answer:
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-36
Long-term Debt = Total External Liabilities – Current Liabilities
= ₹ 5,00,000 – ₹ 1,00,000
= ₹ 4,00,000
Shareholders Fund= Total Non-Fictitious Assets – Total External Liabilities
Total Non-Fictitious Assets = Total Assets – Fictitious Assets
= 10,10,000 – 10,000
= ₹ 10,00,000
Shareholders Fund = ₹ 10,00,000 – 5,00,000
= ₹ 5,00,000
Debt Equity ratio = \(\frac { 4,00,000 }{ 5,00,000 }\) = 4 : 5

OR

Explanation: The given current ratio is 2: 1. Let us assume that current assets are 50,000 and current liabilities are 25,000; Thus, the current ratio is 2: 1.

(i) Assume that ₹ 10,000 of creditors is paid by cheque. This wilt reduce the current assets to ₹ 40,000 and current liabilities to ₹ 15,000. The new ratio will be 2.67 : 1 (\(\frac { 40,000 }{ 50,000 }\)) Hence, it has improved.

(ii) Assume that goods of ₹ 10,000 are purchased on credit. This will increase the current assets to ₹ 60,000 and current liabilities to ₹ 35,000. The new ratio wilt be 1.7 : 1 (\(\frac { ₹ 60,000 }{ ₹ 35,000 }\)) Hence, it has reduced.

(iii) Due to sale of a computer (a fixed asset) he current assets wilt increase to ₹ 53,000 without any change in the current liabilities. The new ratio will be 2.12: 1 (\(\frac { ₹ 53,000 }{ ₹ 25,000 }\)) Hence, it has improved.

(iv) This transaction will decrease the inventories by ₹ 10,000 and increase the cash by ₹ 11,000 thereby increasing the current assets by ₹ 1,000 without any change in the current liabilities. The new ratio will be 2.04: 1 (\(\frac { ₹ 53,000 }{ ₹ 25,000 }\)) Hence, it has improved.

Question 34.
Read the hypothetical text and answer the questions on the basis of the same: Jayant Organics Ltd., a fertilizer manufacturing company, is setting up a new plant in the backward area of Madhya Pradesh. The idea behind it is to improve social and economic standard of the people in the area. The company plans to raise funds for the establishment of the plant through Bank loan and issue of 10% Fully Convertible Debentures. The Balance Sheet of the company stood as follows:
Balance Sheet
as at 31.03.2021 and 31.03.2022
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-8
Notes to Accounts:
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-9
Additional Information:

  • Depreciation on Fixed assets for the year 2018-19 was ₹ 14,700.
  • An interim dividend of ₹ 7,000 has been paid the Shareholders during the year.

You are required to:

  • Calculate net profit before tax and extraordinary items.
  • Calculate operating profit before working capital changes
  • Calculate activities cash flow from operating
  • Calculate cost of fixed assets purchased
  • Calculate activities Cash flow from investing
  • Calculate activities Cash flow from financing (6)

Answer:
(i) Calculation of Profit Before Tax:
Balance as per Profit and Loss A/c
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-37

(ii) Calcul.ation of operating profit before working capital changes
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-38

(iii) Calculation of cash flow from operating activities
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-39

(iv) Dr. Fixed Asset Account Cr.
CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-40

CBSE Sample Papers for Class 12 Accountancy Set 6 with Solutions img-41