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ISC Class XII Board Exam 2023 : Accounts (Solved)

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Snehq Verma
Delhi Public School (DPS), R. K. Puram, New Delhi

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ISC BOARD EXAMINATION 2023 ACCOUNTS (THEORY) Solved Paper Class-12th Maximum Marks: 80 Time allowed: Three hours (Candidates are allowed additional 15 minutes for only reading the paper. They must NOT start writing during this time.) This Question paper contains three sections. Section A is compulsory for all candidates. Candidates have to attempt all questions from either section B or section C There are internal choices provided in each section. The intended marks for questions or parts of questions are given in the brackets []. All calculations should be shown clearly. All working, including rough work, should be done on the same page as, and adjacent to, the rest of the answer. SECTION - A Answer all questions Question 1 In subparts (i) to (iv) choose the correct options and in subparts (v) to (x) answer the questions as instructed. (i) Nikhil, Akhil and Amber are partners in a firm. At the time of Akhil s retirement, Amber takes over furniture of `12,000 at `10,000. [1] Choose the correct journal entry from the following options to record this adjustment. (a) Debit Furniture Account `10,000; Credit Amber s Capital Account `10,000 (b) Debit Furniture Account `12,000; Credit Amber s Capital Account `10,000; Credit Revaluation Account `2,000 (c) Debit Amber s Capital Account `10,000; Credit Furniture Account `10,000 (d) Debit Amber s Capital Account `10,000; Debit Revaluation Account `2,000; Credit Furniture Account `12,000 (ii) Select the correct Statement from the following options. [1] (a) A debenture holder is entitled to receive dividend on his debentures from the company even if the company has incurred losses. (b) A debenture holder is entitled to receive interest on his debentures from the company only if the company has made profits. (c) A debenture holder is entitled to receive interest on his debentures from the company only after dividend has been paid by the company to its shareholders. (d) A debenture holder is entitled to receive interest on his debentures from the company even if the company has incurred losses. (iii) On the dissolution of the firm, partner Rex agreed to take over the responsibility of completing the dissolution work at an agreed remuneration of `1,000 and to bear all realisation expenses. The actual realisation expenses amounted to `1,300 which were paid by the firm on Rex s behalf. [1] What amount will be debited by the firm to the Realisation Account? (a) `1,000 (b) `2300 (c) `1,300 (d) `300 (iv) ABC Ltd. offered 60,000 shares of `10 each to the public. The public applied for 1,00,000 shares. The company made pro-rata allotment in the ratio of 3:2 and the remaining applications were rejected and money refunded to the applicants. On how many shared did the company refund the application money? [1] 2 Oswaal ISC Question Bank Chapterwise & Topicwise, ACCOUNTS, Class-XII (a) 40,000 shares (b) 10,000 shares (c) 30,000 shares (d) 20,000 shares (v) Give the formula used for calculating goodwill of a partnership firm by the Weighted Average profit Method. [1] (vi) A firm had given a loan to one of its partners. Give the journal entry to close this Loan Account at the time of dissolution of the partnership firm. [1] (vii) Mention the heading and sub-heading under which Vehicles are shown in the Balance sheet of a company prepared as per Schedule III of the Companies Act, 2013. [1] (viii) Sunrise Ltd., a listed NBFC, had outstanding 20,000, 7% Debentures of `100 each, due of redemption on 31st March, 2022. [1] As per the provisions of the Companies Act, 2013, what amount, If any, does the company need to transfer to Debenture Redemption Reserve, before it can redeem the debentures? (xi) Pooja and Meher are partners in a firm. They admit Rati into the firm on the following terms: [1] (a) Unrecorded Debtors of `1,000 to be brought into the books. (b) Provision for doubtful debts to be created @5% on Debtors. The recorded debtors in the Balance Sheet of Pooja and Meher on the date of Rati s admission were `25000. What will be the net debtors to be shown in the Balance Sheet of the reconstituted firm? (x) On Ist April, 2021, Bhim Ltd. issued 2,000, 5% Debentures of `100 each as follows: [1] (a) For cash at a discount of 5% `80,000 (Nominal) (b) To a vendor for `60,000 in satisfaction of his claim (c) To Bankers for a loan of `40,000 as collateral security `70,000 (Nominal) `70,000 (Nominal) st The interest on these debentures was to be paid annually on 31 March every year by the company. You are required to calculate interest on these debentures payable by the company on 31st March, 2022. Question 2 [3] Pia, Sia and Jiya are partners in a firm sharing profits and losses in the ratio of 3:2:1. Pia died on 31st October, 2021. Her capital as on 1st April, 2021, was `24,000 and her share of profit for the year 2021-22 till the date of her death, was ascertained as `2,000. Additional information: (i) Office Equipment of the firm, the book value of which was `10,000 on Ist April, 2021, was revalued on the date of Pia s death at `13,600. (i) The amount of `35,000 due to Pia s executor in full settlement of the claim, was transferred to her executor s loan amount. You are required to prepare Pia s capital account to be rendered to her executor. OR Vinay, Tarun and Arjun are partners in a firm sharing profits and losses in the ratio of 4:3:2 respectively. On Tarun s retirement from the firm on Ist April, 2022, his capital account, after all adjustments, stood at `1,14,000. The partners decided that: (i) Tarun to be pain 50% of the amount due to him immediately and the balance by accepting a Bill of Exchange (without interest) payable at the expiry of 3 months. (ii) The continuing partners to re-adjust their capitals in their new profit-sharing ratio in the reconstituted firm. Any surplus/deficit in their capital accounts to be adjusted through their current accounts. Upon re-adjustment of their capitals, Vinay s capital showed a deficit of `1,000 while Arjun s capital had a surplus of `1,000. You are required to pass journal entries to record: (i) The closing of the retiring partner s capital account. (ii) Adjustment of surplus/deficit in the capital accounts of the continuing partners. Question 3 [3] On 1st April, 2022, Lighthouse Ltd. purchased land from Bricks Ltd. The payment was made on the same day by: (i) Issuing a bank draft for `20,00,000; (ii) Drawing a promissory Note in favour of Bricks Ltd. for `10,00,000; (iii) Issuing 8,000, 10% Debentures of `100 each at par, redeemable at a premium of 10%, after three years. You are required to pass necessary journal entries in the books of Lighthouse Ltd. on the date of purchase of land. SOLVED PAPER - 2023 3 Question 4 [3] Jerome Ltd. an unlisted manufacturing company, had 20,000, 6% Debentures of `100 each due for redemption at par on 31st March, 2022. On this date the company had the required amount of `2,00,000 in its Debenture Redemption Reserve. The Debenture Redemption Investment which was purchased on 30th April, 2021, was realised at 98% on the date of redemption and the debentures were redeemed on the due date. You are required to pass journal entries in the books of the company for the year 2021 22. (Ignore Interest on debentures). OR st On I April, 2017, Gabriel Ltd., a listed company, issued 3,000, 8% Debentures of `100 each. One-third of the Debentures were redeemed at per on 31st March, 2021, and the remaining two-third on 31st March, 2022. The company paid interest on debentures annually on 31st March. After meeting the requirements of the Companies Act, 2013, regarding Debenture redemption Investment, the debentures were redeemed by the company. You are required to record necessary journal entries in the books of the company only on 31st March, 2022, including entries for interest on debentures. Question 5 [3] 4 1 2 Viraj, Harsh and Akhil are partners in a firm sharing profits and losses and losses in the ratio of : : . Akhil 9 3 9 4 dies on 31st March, 2022. Viraj acquires of Akhil s share and the balance is acquired by Harsh. 9 On the date of Akhil s death, it was decided to value the goodwill of the firm on the basis of two year s purchase of average super profit. The average net profit made by the firm is `49,000 per annum. The remuneration of the partners, considered as management cost, is estimated to be `9,000 per annum. The total value of assets and liabilities of the firm is `2,20,000 and `80,000 respectively. The normal rate of return in the industry is 15%. You are required to calculate: (i) The gaining ratio of the continuing partners. (ii) The value of non-purchased goodwill of the firm. Question 6 [6] Sunrise Ltd. was formed on 1st November, 2021, with a capital of `20,00,000 divided into Equity shares of `20 each. It offered 95% shares to the public which were all subscribed for. 60% amount was payable on application; 30% on allotment; And the balance on final call. The applicants paid `11,40,000 on application and `5,40,000 on allotment. Final call was not made by the company till the Balance Sheet date. You are required to prepare: (i) An extract of the Balance Sheet showing Share Capital. (ii) Notes to Accounts. Question 7 [6] Mita and Sita, sharing profits in the ratio of 2:1, decided to dissolve their partnership firm on 31st March, 2022, on which date their Balance Sheet was as under: Balance Sheet of Mita and Sita As at 31st March, 2022 Liabilities Sundry Creditors Sita s Son s Loan Bank Overdraft Capital Accounts: Mita 20,000 Sita 10,000 (`) Assets 40,000 Land & Building 2,000 Plant & Machinery 8,000 Stock Debtors 26,400 Less Provision for 30,000 doubtful debts 400 Bank 80,000 (`) 29,000 20,000 3,000 26,000 2,000 80,000 4 Oswaal ISC Question Bank Chapterwise & Topicwise, ACCOUNTS, Class-XII The partnership firm was dissolved on the date of the Balance Sheet subject to the following adjustments: (a) Trade creditors accepted plant and machinery at an agreed valuation of 10% less than the book value and the balance in cash in full settlement of their claims. (b) Debtors of `1,000 proved bad. (c) Sita took over the stock at a discount of 20%. (d) Realisation expenses of `1,100 were paid by the firm. You are required to prepare the Realisation Account. Question 8 [6] Benu and Leena are partners in a firm sharing profits and losses in the ratio of 5:3. They admit Deepa and Erica as two new partners. The new profit-sharing ratio is decided to be 3:2:2:3. Both the new partners introduce `1,00,000 each as capital. Deepa pays 40,000 in cash for her share of goodwill but Erica is unable to contribute any amount for her share of goodwill. At the time of Deepa s and Erica s admission, the firm had an Advertisement Suspense Account of `56,000 which is written off. You are required to pass necessary journal entries to record the above adjustments at the time of admission of Deepa and Erica. OR Greg and Rohit are partners in a firm sharing profits and losses in the ratio of 2:3. Their Balance Sheet as at 31st March, 2022, is given below: Balance Sheet of Greg and Rohit As at 31st March, 2022 Liabilities Sundry Creditors Outstanding Salary General Reserve Capital Accounts: Greg 25,000 Rohit 10,000 (`) Assets (`) 15,000 Goodwill 5,000 Office Equipment 8,000 Sundry Debtors 6,400 Less Provision for doubtful debts 400 35,000 Cash 10,000 37,000 63,000 63,000 6,000 10,000 On Ist April, 2022, they admit Kunal as a new partner on the following terms: (a) They new profit-sharing ratio of Greg, Rohit and Kunal to be 5:3:2 (b) Kunal to bring his share of capital of `25,000 and his share of goodwill of `5,000 in cash. (c) Office Equipment to be valued at `42,000. You are required to prepare Partners Capital Accounts. Question 9 [10] The fixed capital accounts of Shiv, Azeem and Angad, sharing profits and losses in the ratio of 2:2:1, stood at `4,00,000, `6,00,000 and `2,00,000 respectively. The accounts for the year ended 31st March, 2022, were drawn up and closed and the Current Account balances of the partners were determined to be: Shiv `35,000, Azeem `40,000 and Angad `25,000. Subsequently the following errors were discovered on 1st April, 2022: (a) Interest on capital @ 10% per annum had been allowed to the partners, although there was no provision for it in the partnership deed. (b) Salary of `16,000 per annum to Shiv and `20,000 per annum to Azeem was not allowed to them, despite a provision for salary in the partnership deed. (c) Commission of `24,000 was not allowed to Angad, despite a provision for commission in the partnership deed. You are required to prepare the adjusted Current Accounts of the partners on 1st April, 2022, to rectify the lapse in accounting. SOLVED PAPER - 2023 5 OR Ruma and Neha started business on 1st April, 2021, with fixed capitals of `4,00,000 and `3,50,000 respectively. On 1st October, 2021, they decided that their total capital (fixed) should be `8,00,000, in their profit-sharing ratio of 3:2. Accordingly, they introduced extra capital or withdrew excess capital. Their partnership deed provide for the following: (a) Interest on capital to be allowed @ 10% per annum. (b) A monthly salary of `1,000 each to be allowed to both Ruma and Neha. (c) Interest on drawings to be charged @ 18% per annum. Ruma had withdrawn `12,000, during the year. As per the deed, the interest on her drawings amounting to `1,080 to be charged from her. During the year ending 31st March, 2022, the firm earned a net profit of `2,04,000 before charging manager s commission of `20,400 and interest on bank loan of `4,000. You are required to: (i) Give the journal entry to close Ruma s Drawings Account. (ii) Prepare Profit and Loss Appropriation Account for the year ending 31st March, 2022. Question 10 [3] NH Ltd. with an authorized capital of `10,00,000 divided into 1,00,000 Equity shares of `10 each, issued 50,000 shares to the public at a premium of `2 per share, payable as follows: `5 on Application (including premium) `3 on Allotment `4 on First & Final Call. The subscription was at par and the share money was received in full with the exception of the allotment money on 4,000 shares held by shareholder Ravi and the call money on 6,000 shares (including Ravi s shares) The above 6,000 shares were forfeited by the company and 5,000 of these (including the shares which had been allotted to Ravi) were reissued at `8 per share as fully paid up. You are required to pass journal entries to record the above transactions in the books of the company. OR MV Ltd. was registered with a capital of `2,00,000 divided into 10,000 Equity shares of `20 each, payable as follows: On Application `5 per share On Allotment `7 per share On First & Final Call `8 per share The company offered 5,000 shares to the public for subscription. It received applications for 6,700 shares. From amongst the applicants: (i) Vimal, who had applied for 1,500 shares, paid `7,500 on application, but was allotted only 800 shares. (ii) Abhay, who had applied for 2,000 shares, paid the full amount of `40,000 with his application, but was allotted only 1,000 shares. (iii) Nitin, who had applied for and allotted 500 shares, did not pay the allotment and call money when due. (iv) The remaining applicants paid as and when due. The surplus money paid by both Vimal and Abhay was used towards allotment and call and any surplus beyond the call was refunded. The company forfeited Nitin s shares after the final call. You are required to pass journal entries to record the above transactions in the books of the company. 6 Oswaal ISC Question Bank Chapterwise & Topicwise, ACCOUNTS, Class-XII SECTION - B Answer all questions Question 11 In subparts (i) and (ii) choose the correct options and in subparts (iii) to (v) answer the questions as instructed. (i) A company had Current Assets of `3,00,000 and Current Liabilities of `1,50,000, having a Current Ratio of 2:1. [1] What will be the company s revised Current Ratio after it collects `20,000 cash from its debtors of `25,000, the remaining debtors being bad? (a) 2.56:1 (b) 2.03:1 (a) 2.13:1 (d) 1.97:1 (ii) During the year 2021-22, SM Ltd. issued 10,000, 10% Debentures of `100 each at a discount of 10% to be redeemed after three years. The company had a balance of `60,000 in its Securities Premium Reserve. [1] What amount will be added under Operating Activities as Discount on issue of Debentures written off in the Cash Flow Statement of SM Ltd. for the year 2021-22? (a) `10,00,000 (b) `60,000 (a) `1,00,000 (d) `40,000 (iii) State with reason whether Provision for Doubtful Debts is subtracted from Trade Receivables while computing Current Ratio. [1] (iv) While preparing its Cash Flow Statement, will a company consider an increase in its Bank Overdraft as an Operating Activity or as a Financing Activity? [1] (v) What is meant by inter-firm analysis? Question 12 [1] [3] From the following data of Horizon Ltd., you are required to prepare a Comparative Statement of Profit and Loss. Particulars Revenue from Operations (% of Other Income) Other Income Cost of Materials consumed Depreciation and Amortisation Expense Question 13 31.03.2022 31.03.2021 100% `1,00,000 `50,000 `10,000 100% `50,000 `20,000 `5,000 [6] From the following information of Hoopla Ltd., You are require to prepare a Cash Flow Statement (as per AS 3) for the year 2021-22. Particulars (`) (i) Profit for the year 2021-22, before considering dividend and tax but after taking into account the following it ems: 15,80,000 (a) Depreciation on Property, Plant & Equipment 5,50,000 (b) Interest Payable on Bank Loan 3,80,000 (c) Profit on sale of investments, the book value of which was `2,20,000 1,00,000 (ii) During the year 2021-22: (a) The company Paid Tax (which was provided in 2020-21) 4,40,000 Issued 66,000 equity shares of `10 each 6,60,000 Repaid Bank Loan 15,00,000 Paid interest on Bank Loan 3,00,000 Paid Dividend 5,00,000 (b) Trade payables decreased by st 10,000 st (c) Cash at bank increased from `60,000 on 1 April, 2021 to `7,00,000 on 31 March, 2022 SOLVED PAPER - 2023 7 OR From the following Balance Sheets of Rainbow Ltd., you you are required to prepare a Cash Flow Statement (as per AS 3) for the year 2021-22. Balance Sheets of Rainbow Ltd. As at 31st March, 2022 and 31st March, 2021 Particulars Note No. 31.3.2022 (`) 31.3.2021 (`) 1. 4,00,000 1,60,000 4,00,000 1,20,000 3,50,000 2,60,000 30,000 25,000 9,40,000 8,05,000 6,00,000 7,80,000 3,40,000 25,000 9,40,000 8,05,000 I EQUITY AND LIABILITIES 1. 2. 3. II 1. 2. Shareholders s Funds (a) Share Capital (Equity) (b) Reserves and Surplus Non-Current Liabilities Long-term Borrowings (5% Debentures) Current Liabilities Short term provision (Provision for Tax) TOTAL ASSETS Non-Current Assets Property, Plant & Equipment & Intangible Assets (i) Property, Plant & Equipment (Plant & Machinery) Current Assets Cash & Bank Balance (Cash at Bank) TOTAL Notes to Accounts: Particulars 31.3.2022 (`) 1. Reserves and Surplus General Reserve Balance is Statement of Profit and Loss 30,000 1,30,000 31.2.2021 (`) 20,000 1,00,000 Addition information: During the year 2021-22, the company: (i) Sold a machine for `90,000 at a loss of `10,000. (ii) Issued the 5% Debentures on 31st March, 2022, at a discount of 10%. The discount was written off from General Reserve. Question 14 [6] Answer any three of the following questions: (i) Calculate Debt to Total Assets Ratio of Moonlight Ltd. (up-to two decimal places) from the following information: Particulars Property, Plant & Equipment and Intangible Assets Shares of XYZ Bank Ltd. Long term Loans and Advances Current Assets Current Liabilities Total Debt (`) 20,00,000 1,00,000 1,00,000 10,00,000 4,00,000 12,00,000 Oswaal ISC Question Bank Chapterwise & Topicwise, ACCOUNTS, Class-XII 8 (ii) Calculate Trade Payables Turnover Ratio (up-to two decimal places) from the following information: Particulars (`) Trade Payables at the beginning of the year Trade Payables at the end of the year Payment to Trade Payables Returns to Credit Suppliers 70,000 80,000 3,20,000 30,000 (iii) Calculate Quick Ratio (up-to two decimal places) from the following information: Particulars Total Current Assets Working Capital Prepaid Expenses (`) 90,000 60,000 30,000 (iv) In the year 2021-22, Kartik Ltd. Carried an average stock of `40,000. Its Inventory Turnover Ratio was 8 times. It sold goods at a profit of 25% on the cost of revenue from operations. Calculate the profit made by Kartik Ltd. in the year 2021-22. SOLVED PAPER - 2023 9 ANSWERS SECTION - A Answer 1 (i) Option (d) is correct. Explanation: Amber s Capital A/c Dr. 10000 Revaluation A/c Dr. 2000 To Furniture A/c 12000 (Being furniture take over by Amber) (ii) Option (d) is correct. Explanation: Dividend is paid only when company has sufficient profits but Debenture holders are entitled for interest irrespective whether company earns profit or not. (iii) Option (a) is correct. Explanation: Realisation A/c Dr. 1000 To Rex s Capital A/c 1000 (Remuneration paid to Rex) Rex s Capital A/c Dr. 1300 To Cash/Bank A/c 1300 (Dissolution expense paid by firm on behalf of Rex.) (iv) Option (b) is correct. Explanation: On the basis of Pro-Rate allotment: Allotted in ration of 3:2 all the 60000 shares 60000 3 180000 = 90,000 shares = 2 2 \ Total Application Accepted Application = 1,00,000 90,000 = `10,000 (Refunded Application) (v) Goodwill = Weighted Average Profit No. of Years Purchases Total of weighted Profits Weighted Average Profit = Total of weight (vi) Partners s Capital A/c Dr. To Partners Loan A/c (Partner s Loan amount transferred to partner s capital A/c) When firm gives loan to a partners than it is shown in asset side of balance sheet in that case loan amount is transferred to the capital A/c of the Partner. (vii) Motor Vehicles are shown under Non-Current Assets as Main head and Property, Plant and equipment and Intangible Assets-Property, Plant and equipment as Sub-heading in the Balance Sheet of the company as per Schedule III of the Companies Act, 2013. (viii) Non-Banking Finance Companies (NBFCs) Listed or registered under section 45-1A of the Reserve Bank of India Act, 1934 need not maintain Debenture Redemption Reserve (DRR). Therefore, No amount should be transferred to DRR. (ix) Recorded Debtors = `25,000 Unrecorded Debtors = ` 1,000 Total Debtors 26,000 Less: PBD@5% = 1,300 `24,700 `24,700, amount of net debtors to be shown in the Balance Sheet of the Reconstituted firm. (x) Interest on Debenture (a) For Cash = 80,000 5% = `4,000 (b) For consideration other than Cash = 70,000 5% = `3,500 Total Interest = `7,500 (c) No interest will be paid to debenture is collateral security. 10 Oswaal ISC Question Bank Chapterwise & Topicwise, ACCOUNTS, Class-XII Answer 2 (a) Pia s Capital A/c Particulars Amount (`) To Executors Loan A/c Particulars Amount (`) 35,000 By bal b/d 24,000 By P&L suspence A/c 2,000 By Revaluation A/c (Profit) 1,800 By Pia s Capital A/c, 4,800 By Jiya s Capital A/c 2,400 35,000 35,000 Working Note: (a) Calculation of Revaluation Profit = `13,600 `10,000 = `3,600 3, 600 3 Share of Pia = = `1,800 6 (b) The excess amount paid of `7,200 will be considered good will. OR (b) (i) Journal Date 1 April 2022 Particulars Tarun s Capital A/c L.F. Amount Dr. Dr. Amount Cr. 1,14,000 To Bank A/c 57,000 To Bills Payable A/c 57,000 (Amount due to Tarun on retirement paid in part and balance through Bill of Exchange.) (ii) (a) Vinay s current A/c Dr. 1,000 To Vinay s capital A/c 1,000 (Being deficit of Vinay s capital adjusted through his current A/c) (b) Arjun s capital A/c Dr. 1,000 To Arjun s current A/c 1,000 (Being Surplus of Arjun s capital adjusted through his current A/c) Answer 3 Journal Entries In the Books of Lighthouse Ltd. Date st 1 April, 2022 Particulars Land A/c L.F. Dr. Amount Dr. Amount Cr. 38,00,000 To Bank A/c To Promissory Note A/c To 10% Debentures A/c 20,00,000 10,00,000 8,00,000 (Land purchased for `38,00,000) Loss on issue of Debentures A/c Dr. 80,000 To Premium on Redemption of deb. A/c 80,000 (Being debenture to be redeemed at premium) Statement of P&L A/c To Loss on Deb. A/c (Being Issue of deb. A/c) Dr. 80,000 80,000 SOLVED PAPER - 2023 Answer 4 (a) 11 Journal Entries Books of Chrome Ltd. Date Particulars 31st March 2022 Bank A/c Loss on DRI A/c L.F. Dr. Dr. Amount Dr. (`) Amount Cr. (`) 2,94,000 6,000 To DRI A/c 3,00,000 (Being DRI Sold 98%) 31st March 2022 6% Debentures A/c Dr. 20,00,000 To Debentureholder s A/c 20,00,000 (Being debentures to be redeemed) 31st March 2022 Debentureholder s A/c Dr. 20,00,000 To Bank A/c 20,00,000 (Being Payment made to debenture holders) st 31 March 2022 Statement of P&L A/c Dr. 6,000 To Loss on DRI A/c A/c 6,000 (Being Loss on sale of DRI transferred) OR Journal Entries In the books of Gabriel Ltd. (b) Date Particulars st 31 March 2022 Interest on Deb. A/c L.F. Dr. Amount Dr. Amount Cr. 16,000 To Debentureholder s A/c 16,000 (Interest due to deb. holders) 31st March 2022 Debenture holders A/c Dr. 16,000 To Bank A/c 16,000 (Interest paid to debenture holders) 31st March 2022 Bank A/c Dr. 30,000 To DRI A/c 30,000 (Being Payment made to debenture holders) st 31 March 2022 8% Debentures A/c Dr. 2,00,000 To Debenture holders A/c 2,00,000 (Amount due to debenture holders on redemption of deb.) 31st March 2022 Debenture holders A/c Dr. 2,00,000 To Bank A/c 2,00,000 (Debentures redeemed/paid to debenture holders) st 31 March 2022 Statement of profit and loss A/c To Interest on Deb. A/c (Being interest on debentures transferred) Working Note: (i) Interest on debentures on 31st March 2022 One third of total debentures already redeemed, i.e., 1 3, 00 , 000 = 1,00,000 3 Remaining debentures = 3,00,000 1,00,000 = 2,00,000 Dr. 16,000 16,000 12 Oswaal ISC Question Bank Chapterwise & Topicwise, ACCOUNTS, Class-XII Interest @ 8% = 2 , 00 , 000 8 = `16,000 100 (ii) Debenture Redemption Investment 2 15 Value of DRI encashed = of 3, 00 , 000 = `30,000 3 100 Answer 5 (I) Gaining Ratio = NR OR (New Ratio Old Ratio) 4 Viraj acquired of Akhil s share: 9 4 2 8 = = 81 9 9 4 8 44 NPR = + = 9 81 81 Harsh acquired the remaining ratio of Akhil. 2 8 18 - 8 10 = = = 81 81 9 81 NPR = 1 10 37 + = 3 81 81 Gaining Ratio of Viraj = 44 4 44 - 36 8 - = = 81 9 81 81 Gaining Ratio of Harsh = 37 1 37 - 27 10 - = = 81 3 81 81 Gaining Ratio = 8:10 (II) Value of Non-Purchased goodwill (i) Capital Employed = All Assets Outside Liability = 2,20,000 80,000 = `1,40,000 Capital employed NRR (ii) Normal Profit = 100 1, 40 , 000 15 = 100 = `21,000 (iii) Average Profit = Net Profit Remuneration = 48,000 9,000 = `40,000 (iv) Super Profit = Average Profit Normal Profit = 40,000 21,000 = `19,000 (v) Goodwill = Super profit No. of Years s Purchase = 19,000 2 = `38,000 Answer 6 Journal Entries In the books of Sunrise Ltd. Date Particulars 1st Nov. 2021 Bank A/c L.F. Dr. Amount Dr. Amount Cr. 11,40,000 To Eq. share App. A/c 11,40,000 (6% App. money rece.) 1st Nov. 2021 Eq. share A/c To Eq. Share capital A/c (App. money transferred to Share cap.) Dr. 11,40,000 11,40,000 SOLVED PAPER - 2023 1st Nov. 2021 Equity Share Allot. A/c Dr. 13 5,70,000 To Equity Share Cap. A/c 5,70,000 (Amount due on allotment i.e., 30% of 19,00,000) st 1 Nov. 2021 Bank A/c Calls-in-Arrear A/c Dr. Dr. 5,40,000 30,000 To Equity Share Allot. A/c 5,70,000 (Allot. money reed. except 30,000) Balance Sheet of Sunrise Ltd (as at 31 March, 2022) Date Particulars Note No. ` Equity & Liabilities (i) Share holder s funds Share Capital 16,80,000 Note to Accounts: 1. Share Capital Authorised Capital 1,00,000 equity Share of `20 each 20,00,000 Issued Capital 95,000 equity Share of `20 each 19,00,000 Subscribed Capital Subscribed but not fully paid up 95,000 equity share of of `20 each; `18 called up (`95,000 18) `17,10,000 less: Calls-in-Arrears `3,000 `16,80,000 Amount to be received on allotment = `30% of 19,00,000 = `5,70,000 Receive on allotment = `5,40,000 \ Calls-In-Arrear = `5,70,000 `5,40,000 = `30,000 Answer 7 Realisation A/c Particulars Amount (`) Particulars To Land & Build. 29,000 By Creditors To Plant & Machinery 20,000 By Sita s sons Loan To Stock To Debtors To Cash (Creditors) 3,000 By Provision for Bad debts 26,400 By Bank A/c: 22,000 Debtors Amount (`) 40,000 2,000 400 25,400 To Cash (Realisation expense) 1,100 By Sita s Capital (Stock) To Cash (Sita s Son s Loan) 2,000 By Mita Capital 22,200 By Sita s Capital 11,100 1,03,500 Notes: (i) Creditors = 40,000 ( ) Took over P & M @ discount of 10% = 18,000 Paid in cash 22,000 2,400 1,03,500 14 Oswaal ISC Question Bank Chapterwise & Topicwise, ACCOUNTS, Class-XII Answer 8 (a) Journal Entries Date Particulars L.F. Bank A/c Dr. Amount Dr. Amount Cr. 2,40,000 To Deepa s Capital A/c To Erica s Capital A/c To Premium for Goodwill A/c 1,00,000 1,00,000 40,000 (Amount brought in by Deepa s Erica for his share of G/w and Capital) Premium for Goodwill A/c Dr. 40,000 To Benu s Capital A/c To Leena s Capital A/c 26,000 14,000 (Share of Deepa in G/w credited to X and Y in their sacrificing ratio) Deepa s Capital A/c Dr. 60,000 To Benu s Capital A/c To Leena s Capital A/c 39,000 21,000 (Being Deepa s Share of Goodwil adjusted) Benu s Capital A/c Leena s Capital A/c Dr. Dr. 35,000 21,000 To Advertisement Suspense A/c 56,000 (Advertisement Suspense A/c written off through Old Partners capital A/c in their old ratio) Notes: Sacrificing Ratio = Old Ratio New Ratio 5 3 50 - 24 26 Benu s Share = = = 8 10 80 80 Leena s Share = \ (b) 3 2 30 - 16 14 = = 8 10 80 80 13 : 7 26 : 14 Sacrificing Ratio = 13 : 7 OR Partner s Capital A/c Particulars To Ravi s Capital A/c To bal. c/d Greg Rohit Kunal 2,500 27,700 Particulars By bal. b/d 25,300 Greg Rohit 25,000 10,000 30,000 By Bank A/c 30,000 By Prem. For G/w 5,000 By General Res. 3,200 4,800 By Revaluation 2,000 3,000 30,200 25,300 By Greg s capital A/c 30,200 25,300 30,000 Notes: (i) Sacrificing Ratio = Old Ratio New Ratio 2 5 4-5 -1 Greg s Share = = = (Gain) 5 10 10 10 Rohit s Share = 3 3 6-3 3 = = (Sacrifice) 5 10 10 10 Kunal 2,500 30,000 SOLVED PAPER - 2023 15 (ii) Revaluation profit Office Equipment of `37,000 increases to `42,000 i.e., = Profit of `5,000 Distributed among old partners in their Old ratio. (iii) Firm s Goodwill 2 Kunal brings `5,000 for share 10 \ Firm s Goodwill = 5, 000 10 50 , 000 = = `25,000 2 2 Greg will compensate Rohit by `2,500 as firms goodwill 1 25, 000 = 2,500 10 (iv) Premium for G/w A/c Dr. 5,000 Greg Capital A/c Dr. 2,500 To Rohit s Capital A/c 7,500 (PPG credited to Rohit s Capital A/c) Answer 9 (a) Adjustment table Particulars Shiv Dr. Int. on Capital @ 10% Azzem Cr. Dr. 40,000 Salary Angad Cr. 60,000 16,000 Dr. 20,000 24,000 40,000 40,000 44,000 20,000 16,000 (Dr.) 31 Mar. 2022 Cr. 36,000 24,000 60,000 Dr. 20,000 Commission Excess profit to be shared is 2 : 2 : 1 Firm Cr. 24,000 24,000 12,000 60,000 36,000 16,000 (Cr.) Journal Azeem s Current A/c Dr. 16,000 To Angad s Current A/c 16,000 (Rectifying entry passed) Partner s Adjusted Current A/c Particulars Shiv Azeem To Angad s Current A/c To bal. c/d (b) Angad 16,000 Particulars By bal. b/d Shiv 35,000 35,000 24,000 41,000 By Azzem s Current A/c 35,000 40,000 41,000 Azeem Angad 40,000 25,000 16,000 35,000 40,000 41,000 OR Profit & Loss Appropriation A/c Particulars Amount Particulars To IOC: Ruma Neha By P&L A/c: 44,000 ( ) Mang. com. 33,500 ( ) Int. on DC To Salary: Ruma Neha 12,000 12,000 To Partner s Capital A/c To Profit Neha Ruma By IOD 31,672 47,508 Amount 2,04,000 (20,400) (4,000) 1,79,600 1,080 79,180 1,80,680 1,80,680 16 Oswaal ISC Question Bank Chapterwise & Topicwise, ACCOUNTS, Class-XII Working Note: Int. on capital: From 1 April 21 to 30 Sep. 21 Ruma 20,000 Neha 17,500 400000 10 6 100 12 @10% pa. From 1 Oct. to 31 March 24,000 480000 10 6 100 12 @10% pa. Total IOC = Particulars 16,000 320000 10 6 100 12 44,000 33,500 Partner s Capital A/c Ruma Neha 4,80,000 3,20,000 By Cash A/c 4,80,000 3,50,000 To Cash A/c Particulars Ruma 30,000 By bal. b/d To bal. c/d 31 Mar. 2022 31 Mar. 2022 Answer 10 350000 10 6 100 12 Neha 4,00,000 3,50,000 80,000 4,80,000 Journal Entry Ruma s Drawing A/c Dr. 12,000 To Bank A/c Ruma s Current A/c Dr. 12,000 To Reema s Drawing A/c 3,50,000 12,000 12,000 Journal Entries In the books of NH Ltd. Date Particulars Bank A/c L.F. Dr. Amount Dr. Amount Cr. 2,50,000 To Equity share App. A/c 2,50,000 (Being App. money received) Equity share App. A/c Dr. 2,50,000 To Equity share capital A/c To Securities Premium Reserve A/c 1,50,000 1,00,000 (Being App. money due) Equity share Allotment A/c Dr. 1,50,000 To Equity share Capital A/c 1,50,000 (Being Allotment money due) Bank A/c Calls-in-Arrear A/c Dr. Dr. 1,38,000 12,000 To Equity share Allotment A/c 1,50,000 (Being allotment money received) Equity share first and final call A/c Dr. 2,00,000 To Equity share Capital A/c 2,00,000 (Being call money due) Bank A/c Calls-in-Arrear A/c Dr. Dr. 1,76,000 24,000 To Share first and final call A/c 2,00,000 (Being call money received) Equity Share Capital A/c To Call-in-Arrears A/c To Share forfeiture A/c (Being 6,000 share forfeited) Dr. 60,000 36,000 24,000 SOLVED PAPER - 2023 Bank A/c Share forfeiture A/c Dr. Dr. 40,000 10,000 To Equity Share Capital A/c 50,000 (Being 5,000 Shares reissued) Share forfeiture A/c Dr. 8,000 To Capital Reserve A/c 8,000 (Being Proportionate amount transferred to capital Reserve) Working Note: Credit balance of Share forfeiture for Ravi s Share = 4,000 3 = 12,000 Discount allowed on reissue = 4,000 2 = (8,000) Amount to be transferred to Capital Reserve = 4,000 Credit balance of Share forfeiture on remaining 1,000 Shares = 1,000 6 = 6,000 Discount allowed on reissue = 1,000 2 = (2,000) Amount to be transferred to Capital Reserve = 4,000 Total amount to be transferred = 4,000 + 4,000 = `8,000 OR Journal Entries In the books of MV Ltd. Date Particulars Bank A/c L.F. Dr. Amount Dr. Amount Cr. 63,500 To Equity share App. A/c 63,500 (Being Application money received for 6,700 Shares and advance received) Equity share App. A/c Dr. 63,500 To Equity share capital A/c To Share Allotment A/c To Calls-in-advance A/c To Bank A/c 25,000 10,500 8,000 20,000 (Being App. money due) Equity share Allotment A/c Dr. 35,000 To Equity share Capital A/c 35,000 (Being Allotment money due) Bank A/c Calls-in-Arrears A/c Dr. Dr. 21,000 3,500 To Share Allotment A/c 24,500 (Being allotment money received) Equity share first and final call A/c Calls-in-Advance A/c Dr. Dr. 32,000 8,000 To Equity share Capital A/c 40,000 (Being call money due) Bank A/c Calls-in-Arrears A/c Dr. Dr. 28,000 4,000 To Share first and final call A/c 32,000 (Being Amount received) Share Capital A/c To Call-in-Arrears A/c To Share forfeiture A/c (Being Share forfeited) Dr. 10,000 7,500 2,500 17 18 Oswaal ISC Question Bank Chapterwise & Topicwise, ACCOUNTS, Class-XII Working Note: (i) Vimal Applied for 1,500 Shares and was allotment 300 Shares So, excess amount received from him = 7,500 4,000 = `3,500 Amount to be received from him on allot and call = 15 800 = `12,000 So, excess amount can be utilized (ii) Abhay applied for 2,000 Shares and was allotted 1,000 Shares Total amount to be paid by him = 1,000 20 = `20,000 He paid `40,000 So amount to be refunded = 40,000 20,000 = `20,000 (iii) Amount received on Application = 4,700 Shares @ `5 = `23,500 (+) 2,000 Shares @ `20 = `40,000 `63,500 SECTION - B Answer 11 (i) Option (d) is correct. Explanation: Current Assets = 3,00,000 + 20,000 25,000 = 2,95,000 Current Liabilities = 150,000 2 , 95, 000 Current Ratio = = 1.97:1 1, 50 , 000 (ii) Option (d) is correct. Explanation: `40,000 added under operating act because it is not an operating expenses. Discount or Loss on issue of debentures written off from Securities Premium Reserve and Profit and Loss A/c. Therefore, `40,000 written off from P&L A/c and `6,000 from Securities Premium Reserve: Cal: 10,000 Deb. `100 = `10,00,000 `1000000 10 Dis @ 10% = = `1,00,000 100 (iii) Yes, Provision for Doubtful Debts is subtracted from Trade Receivables because it is not convertible in cash and it will not give proper. Current Ratio as compared to their peer and indicates that mgt may not be using their assets efficiently. (iv) Increase in Bank Overdraft is a financing activity because it is a current liability. (v) Inter Firm Analysis: A comparison of two or more enterprises or firm is known as inter firm comparison to determine their competitive position of that two or more times. Answer 12 Comparative Statement P&L for the years ended 31 March, 2021 and 2022 Particulars (i) Revenue from operations (ii) Other Income Note No. 31st March, 2021 ` (A) 31st March, 2022 ` (B) Absolute Change (Inv/Dec.) ` (C = B A) 50,000 1,00,000 50,000 100 Absolute Change (Inv/Dec.) ` C (D = 100 ) A 50,000 1,00,000 50,000 100 1,00,000 2,00,000 1,00,000 100 (iv) Expense: (a) Cost of material con. (b) Dep. & Amort. Exp. Total expense 20,000 5,000 50,000 10,000 30,000 5,000 150 100 25,000 60,000 35,000 140 (v) Profit (iii iv) 75,000 1,40,000 65,000 86.67 (iii) Total Revenue (i + ii) SOLVED PAPER - 2023 Answer 13 (a) Hoopla Ltd. Cash Flow Statement For the year ended 31st March, 2022 Particulars A. 19 ` ` Cash Flow from Operating Act. Net Profit before Tata and Expense Items Adjust for Non cash and Nonoperating Items: 16,80,000 Add: Depreciation Interest payable on loan 5,50,000 3,80,000 9,30,000 (1,00,000) (1,00,000) 25,10,000 Less: Gain on Investments Operating Profit before WC changes 24,10,000 Less: Decreased in Trade Payables (10,000) (10,000) Cash Generated from Operations 24,00,000 Less: Income Pay paid (4,40,000) (4,40,000) Cash flow from Operating Act. B. 19,60,000 Cash Flow from Investing Act. Sales of investments 3,20,000 3,20,000 Cash used in Investing Act. C. 3,20,000 Cash Flow from Financing Act. Proceeds from Issue of Shares Payment of Bank Loan Payment of Interest on Loan Payment of Dividend 6,60,000 (15,00,000) (3,00,000) (5,00,000) (16,40,000) 16,40,000 D. Net Increase in Cash and CE (A + B + C) 6,40,000 Add. Opening Cash and Cash Equivalents E. 60,000 Closing Cash and Cash Equivalents (b) 7,00,000 Rainbow Ltd. Cash Flow Statement For the year ended 31st march, 2022 Particulars A. ` Cash Flow from OA. Net Profit before Tap and Eo Add: Non Cash and Non Operating Items: Depreciation Interest on Deb. @5% Loss on Issue of Deb. Loss on Sale of Machine ` 70,000 80,000 13,000 9,000 10,000 Operating Profit before WC changes 1,12,000 1,82,000 Add. Increase In CL Less. Increase In CA Cash Generated Tax Less: Tax paid 1,82,000 (25,000) Cash Flow from OA. B. Cash Flow from Investing Act. Proceeds from sales of March: Cash used in Investing Act. (25,000) 1,57,000 90,000 90,000 90,000 20 Oswaal ISC Question Bank Chapterwise & Topicwise, ACCOUNTS, Class-XII C. Cash Flow from Financing Act. Proceeds from Issue of Debentures Payment of Int. on Deb. 81,000 (13,000) 68,000 Cash used in Financing Act. 68,000 D. Cash Increases (A + B + C) 3,15,000 E. Cash and Cash Equivalents in beginning F. Cash and Cash Equivalents at the end of the period (E + F) 25,000 3,40,000 Working Note: 1. Calculation of Net Profit: Closing Balance of Surplus, i.e., Balance of statement in P&L 1,30,000 Less: Opening Balance of statement (1,00,000) 30,000 Add: Provision for tax 30,000 General Reserve 10,000 40,000 70,000 2. Calculation of Depreciation: Machinery A/c Particulars Amount To bal. b/d Particulars 90,000 10,000 80,000 6,00,000 7,80,000 7,80,000 3. Int. on Debentures = 2,60,000 5% = 13,000 4. Loss/Discount on Issue of Debentures = 3,50,000 2,60,000 = 90,000 (Deb. Issued) (Clo. Deb.) (Ope. Deb.) 90000 10 Discount @ 10% = = 9,000 100 Note: Discount will be written off next year i.e., 2022-2023. 5. Issue of Debentures = 90,000 9,000 = 81,000 (Issue Dis. = Amt.) Answer 14 (i) Calculation of Debt to Total Assets: Debt Debt to Total Assets = Total Assets 800000 = = 0.26 3000000 Total Assets = 20,00,000 + 10,00,000 = 3,00,000 Debt = Total Debt Current Liabilities = 12,00,000 4,00,000 = 8,00,000 (ii) Trade Payables Turnover Ratio: Net Credit Pur. Trade Payables Turnover Ratio = Avg. Trade Payables Average Trade Payables = = Amount 7,80,000 By Sales A/c By Loss on Sales By Depreciation By bal. c/d Op. + Closing 2 70000 + 80000 = `75,000 2 SOLVED PAPER - 2023 21 Net Credit Purchase = Total Credit Purchase returns = 3,60,000 30,000 = `3,30,000 3, 30 , 000 Trade Payables Turnover ratio = = 4.4 times 75, 000 Trade Payables A/c Particulars Amount To Cash A/c (Payment) To Return Outward To balance c/d (iii) Quick Ratio = Working: \ Amount 70,000 3,60,000 4,30,000 4,30,000 Quick Assets Current Liabilities Working Capital = CA CL 60,000 = 90,000 CL CL = 90,000 60,000 = 30,000 Quick Assets = Current Assets Inventories Prepaid Expenses Q.A. = 90,000 30,000 = 60,000 60000 =2:1 30000 (iv) Inventory Turnover Ratio = 8 = Particulars 3,20,000 By Balance b/d 30,000 By Purchase (Bal. figure) 80,000 Cost of Goods Sold Aveg. Inventory COGS 40000 8 40,000 = COGS 3,32,000 = COGS Profit = COGS Profit% 320000 25 = = `80,000 100

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