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Std. XII 25-11-2020 THE BISHOP S SCHOOL, CAMP First Preliminary Examination Accounts Time: 3hrs Marks 80 Students are allowed first 15 minutes only to read the paper. They must NOT start writing within this time. This question paper consists of two sections. Section A has two parts. Part 1 of Section A is compulsory. Answer any 4 questions from Part II of Section A. Answer any two questions from Section B. SECTION A Part I Question 1 Answer briefly each of the following questions: [2 x 6 = 12] 1. What is meant by Current Maturities of Long Term Debt? How is it disclosed in the Balance Sheet of a company? 2. A company has to pay interest on debentures prior to paying dividend on shares . Justify. 3. Give any two differences between Firm s Debts and Private Debts of the partners. 4. Apart from issuing shares to the general public for cash, list two other groups to whom a company could issue shares for consideration other than cash. 5. Give the adjusting and closing entry for interest on loan taken by a partner from the firm, when firm follows the fluctuating method. 6. What is the minimum value at which the company can re-issue forfeited shares, when the shares are originally issued at a premium? Part II Answer any four questions. Question 2 [12] Suraj and Neeraj are partners in a firm. According to the partnership deed: Interest on capital will be allowed at 8% per annum Interest on drawings will be charged at 5% per annum Each partner will be allowed a salary of 2500 per month. An amount of Rs.10000 is to be transferred to general reserve before distribution of profits. Partners will share profits and losses in the ratio 3:2. Int. on Current A/c to be charged at 10%. Following are balances of the partners: Suraj s capital A/c 2,00,000 Suraj s Current A/c 5000 (Dr) Neeraj capital A/c 1,80,000. Neeraj s Current A/c - 12000 (Cr) Suraj withdrew Rs.10,000 on 30 June 2019 and Neeraj withdrew Rs.20,000 on October 1, 2019. The manager was also entitled to a salary of 14,000 for his services. There was a loan taken by Suraj from the firm for which it was decided that the interest will be Rs.2500. The profit and loss account before taking the above appropriations revealed a net profit of Rs.1,36,000. You are required to Pass Journal Entries for above transactions. Question 3 [12] Agarwal and Co Ltd invited applications for 40,000 equity shares of Rs.10 each at a premium of Rs.2 per share payable as follows: An application Rs.4 On allotment Rs.4 (including premium) And Rs.4 for first and final call. The company received applications for 62,500 shares. It was decided to refuse allotment to the applicants of 2500 shares. For the remaining applicants, applicants of 10000 shares were allotted in full and the remaining on pro-rata basis. It was also decided to utilise the excess application money for allotment. All the money due was received except from one share shareholder who had applied for 200 shares and had been allotted in full did not pay the allotment money and call money. After non-payment of the first and final call money, his shares were forfeited on November 1, 2020. Out of the forfeited shares, hundred shares were re-issued as fully paid at a premium of Rs.1. You are required to pass journal entries and prepare the securities premium reserve account. Question 4 [8] A. Joe and Kamala were partners in a firm sharing profit and losses in the ratio 2:1. They dissolve their firm on 31st March, 2020. On this date the balance sheet of the firm apart from realisable assets and outside liabilities showed the following: Joe s capital Rs.60,000 Kamala s capital Rs.50,000 Profit and loss account Rs.15,000 (Dr.) Joe s wife s loan to the firm Rs.30,000 Kamala s loan from the firm Rs.15,000 Contingency reserve of Rs.6000. On the date of dissolution of the firm: Joe s wife s loan was repaid with an interest of 600. The dissolution expenses of 2000 were paid by the firm on behalf of Joe. An unrecorded asset of 3000 was taken over by Joe while Kamala discharged an unrecorded liability of 2000. The dissolution resulted in a loss of 33,000. You are required to pass the journal entries for above after they have been transferred to realisation account. B. Jill and Jhonny are partners in a firm sharing profits and Losses in the ratio 3:4. On April 1, 2020, they admitted Kavi as a partner for 1/6 th share in the profits of the firm. On the date of admission, the balance sheet of the old firm showed general reserve of 70000 and a debit balance of 35000 in profit and loss account. There was also a workmen compensation reserve of Rs.14000. The estimated liabilities for workmen s compensation was 3500. There was also an amount of 3000 in the Investment fluctuation reserve whereas the market value of investments at the time of admission came down by 6500. Pass necessary journal entries for distribution of above reserves, to help in ascertainment of Capital of the existing partners. [4] Question 5 A. From the following particulars of Crew and Drew, Calculate the amount of goodwill of the firm at the time of Flea s admission on the basis of capitalisation of super profits: Actual average profits of the past 3 yrs were Rs. 42000. Normal rate of return is 12%. The Balance sheet of the firm showed sundry assets worth Rs.5,60,000 and the total liabilities (excluding Partner s Capital and Drew s loan of Rs.50,000) were Rs.2,30,000. Also, calculate the amount of Flea s share of goodwill if he is admitted for 1/5 th share in profits. [4] B. Slim, Dim and Rim are partners in a firm sharing profits and losses in the ratio of 3:1:1. They maintain books as per Fixed Capital method. Slim and Rim had guaranteed that the profit of the firm in any given year will not be less than 2,40,000 and any discrepancy on account of that will be borne by them in the ratio 3:2. Ignoring the above adjustments, the profit of the firm amounting to 1,80,000 was equally distributed amongst the partners. You are required to pass journal entries to rectify the lapse in accounting. [4] C. Manas, Mahesh and Rhea are partners in a firm sharing profits and losses in the ratio two is 2:2:1. Their fixed capital is worth Rs.60,000 Rs.50,000 and Rs.40,000 respectively. Rhea was guaranteed that in any year her share of profits will be Rs.40,000 and any loss arising would be shared by Mahesh and Manas equally. The trading profit what the firm in the year ended 31 March 2020 words Rs.1,20,000. The partnership deed allowed an interest of 5% to the partners You are required to prepare the profit and loss appropriation account showing the distribution of profits. [4] Question 6 [12] Jugal, Vimal and Krish are partners in a firm their Balance Sheet as at 31st March, 2020, is given below: Liabilities Sundry Creditors Workmen Compensation Fund Employees provident Fund Capital Jugal 120000 Vimal 90000 Krish 90000 Amount 15000 6000 26000 300000 347000 Assets Stock P&M Investments (M.V. 35000) Debtors 32000 Less: PDD (2000) Adv. Suspense Profit and Loss A/c Bank Amount 55000 85000 32000 30000 12000 3000 130000 347000 31st Jugal retired on March, 2020, on the following terms: (a) Stock to be appreciated by 20%. (b) Plant & Machinery to be depreciated to 40%. (c) Bad debts Rs.4,000 to be written off. (d) Jugal to be paid Rs.30000 worth of investments and Rs.100000 by cheque. . (e) Vimal and Krish, in the new firm, to share profits and losses equally. You are required to prepare: Revaluation A/c, Partner s Capital A/c and balance sheet of the firm after Jugal s retirement. Question 7 A. From the following is the trial balance of Pranjal Ltd., prepare the Balance Sheet of the company as on 31st March 2020 as per Schedule III of the Companies Act. [8] Advances to employees 300000 Equity share capital 5000000 Cash at bank 314320 Capital reserve 60000 Furniture and fixtures 750000 Loan from SBI 800000 Premises 4100000 Prov. for employees welfare Patents 1000000 fund 600000 Disc. on issue of shares Short term loan from SBI 490200 (unwritten off) 25000 Unclaimed dividend 64800 Trade receivables 376180 Profit and Loss A/c 206980 Advance tax 50000 Bills Payable 85100 8% Government Bonds 336000 Securities premium reserve 200000 Stock in trade 355600 Sundry Creditors 100020 The company has and authorised share Capital of Rs.900000 divided into 600000 shares of Rs.10 each and the remaining as preference shares of Rs.100 each. The company has proposed a dividend of Rs.85000 on the said date. B. Under which heads and sub-head will the following items be shown in the Balance sheet of the Company as per Schedule III of the Companies Act, 2013: [4] a. Security Deposits with Electricity Company. b. Marketable Securities. c. Capital work-in-progress. d. Finished Goods. SECTION B Answer any two question Question 8 A. From the following information, prepare the Comparative statement: [4] Balance Sheet of Bagger s Ltd. As at 31st March, 2020 and 2019. EQUITIES AND LIABILITIES Amount (31.03.2020) Amount (31.03.2019) Equities 1200000 1000000 Share Capital 120000 150000 Reserves and Surplus Non-current Liabilities Long Term-borrowings 330000 300000 Total 1650000 1450000 ASSETS Non-Current Assets Tangible Assets 1650000 1450000 Total 1650000 1450000 B. Prepare a Common Size Statement of Relay Ltd.: Particulars 31st March, 2020 Revenue from Operations 360000 Other Income 12000 Purchase of Stock-in Trade 210000 Change in Inventories (6000) Other Expenses 85000 Tax 30% Question 9 A. From the following, calculate Operating Profit Ratio: Revenue from Operations 6,00,000 Cost of Revenue from Operations 4,00,000 Discount received 50,000 Selling Expenses 60,000 Sale of Scrap 50,000 Interest on Debentures 30,000 B. From the following information, calculate Debt Equity Ratio: Liquid Ratio 1 5:1 Net Working Capital Rs.60,000 Inventories Rs.30,000 Total Assets Rs.2,20,000 Total Debt Rs.1,60,000 [6] [2] [2] C. The Debt Equity Ratio of a company is 2:1. State which of the following would improve, reduce or not change the ratio: [2] (i) Issue of Equity Shares for the purchase of Plant and Machinery worth Rs.4, 00,000. (ii) Sale of Furniture (Book value Rs.4, 00,000) for Rs.3, 50,000 D. From the following information, calculate: (i) Working Capital (ii) Current Assets Trade Receivables Turnover Ratio 4 times Current Liabilities 5,000 Average Debtors 1,80,000 Working Capital Turnover Ratio 8 times Cash Revenue from Operations 25% of Revenue from Operations. Gross Profit Ratio 33.33 % Question 10 A. Prepare the Common size statement from particulars of Toy and Co.: Liabilities Amount Share Capital 600000 Reserves 250000 Debentures 450000 Trade Payables 65000 1365000 [4] the following data provided from the following [6] Asset Amount Fixed Assets 785000 Investments 400000 Current Assets 180000 B. Prepare a Comparative Statement from the following data: 31.3.2020 (Rs.) Revenue from Operations 4,00,000 Expenses 50% of RFO Interest on investments Rs.10,000 and taxes payable @ 40% for both the 1365000 [4] 31.3.2019 (Rs.) 3,00,000 60% of RFO years
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