Accounts Class - XII (CBSE) - 1998
You are on Set no 1 Qno. 1 to 18
Q 1 What is meant by goodwill? Name any two methods of valuation of goodwill. (Marks 2)
Q 2 R and S are partners sharing profits in the ratio of 5 : 3. T joins the firm as a new partner. R gives 1/4 of his share and S gives 2/5 of his share to the new partner. Find out the new ratio. (Marks 3)
Q 3 State any three purposes for which share premium amount can be utilised. (Marks 3)
Q 4 P, Q and R are partners in a firm. Their capital accounts stood at Rs. 30,000, Rs. 15,000 and Rs. 15,000 respectively on 1 January, 1996. As per the provisions of the deed :
(i) R was to be allowed a remuneration of Rs. 3,000 p.a., (ii) Interest at 5 % p.a. was to be provided on capital, (iii) Profits were to be divided in the ratio of 2 : 2 : 1. Ignoring the above terms, net profit of Rs. 18,000 for the year ended 1996 was divided among the three partners equally.
Pass an adjustment entry to rectify the error. Show the working clearly. (Marks 4)
Q 5 X Limited issued 12% debentures of Rs. 10,00,000 at 8% discount redeemable at par. Assume that the debentures are redeemed by drawing method in the following manner:
|Year end ||Face Value (Rs) |
|1 ||1,00,000 |
|2 ||2,00,000 |
|3 ||3,00,000 |
|4 ||4,00,000 |
Prepare discount on issue of debentures account. (Marks 5)
Q 6 Rearrange the following in the form of a company balance sheet as per Schedule VI Part I of the Company Act 1956. (Marks 5)
| ||Rs. |
|Bills payable ||30,000 |
|Unclaimed dividend ||12,000 |
|Accounts Receivables ||11,000 |
|Shares in NTPC Ltd. ||20,000 |
|Deposits with ICICI Bank ||50,000 |
|Share Premium ||75,000 |
|Prepaid Rent ||1,000 |
|Underwriting commission ||1,500 |
|Stores and spares ||6,000 |
|Patents ||2,000 |
Q 7 (a) M and N are partners in a firm. M has given a loan of Rs. 8,000 to the firm on 1 April, 1994. The partnership deed is silent upon the question of provision of interest on partner's loan. Compute the amount of interest payable on the loan advanced by M to the firm assuming the books are closed on 31 December each year.
(b) P, R and S are in partnership sharing profits in the ratio of 4 : 3 : 1 respectively. It is provided in the partnership deed that, on the death of any partner, his share of goodwill is to be valued at half of the profits credited to his account during the previous four completed years. R dies on January, 1997. The firm's profit for the last four years 1993 : Rs. 1,20,000, 1994 : Rs. 80,000, 1995 : Rs. 40,000, 1996 : Rs. 80,000, Determine the amount that should be credited to R in respect of his share of goodwill. (Marks 3 + 3)
Q 8 K Limited has been registered with an authorised capital of Rs. 2,00,000 divided into 2000 shares of Rs. 100 each of which, 1000 shares were offered for public subscription at a premium of Rs. 5 per share, payable as under :
on application 10
on allotment 25 (including premium)
on first call 40
on final call 30
Applications were received for 1800 shares, of which applications for 300 shares were rejected outright; the rest of the applications were allotted 1000 shares on pro-rata basis. Excess application money was transferred to allotment.
All the monies were duly received except from Sundar, holder of 100 shares, who failed to pay allotted and first call money. His shares were later forfeited, and reissued to Shyam at Rs. 60 per share Rs. 70 paid up. Final call has not been made.
Pass necessary cash book and journal entries in the books of K Limited.
M Ltd. issued on January 1, 1992 1000 12% debentures of Rs. 100 each repayable at the end of 3 years at a premium of 5%. It was decided to create a sinking fund for the redemption of debentures. The investment are expected to earn interest at 5% p.a.
Reference to the sinking fund table shows that Re. 0.37209 invested at 5% p.a. amounts to Re. 1 at the end of three years, the investments were sold at Rs. 70,000 and the debentures were redeemed. Prepare debentures account, sinking fund account and sinking fund investment account for the three years. (Marks 10)
Q 9 J, S and R were in partnership sharing profits and losses in the ratio of 3 : 2 : 1. Their Balance Sheet as on 31 December, 1994 was as follows :
|Balance Sheet |
|Capital Accounts || || || |
|J ||12,000 ||Buildings ||10,000 |
|S ||8,600 ||Plant ||22,000 |
|R ||10,400 ||Stock ||6,000 |
|Reserve Fund ||3,000 ||Joint Life Policy ||6,200 |
|Employees' Provident Fund ||3,000 ||Debtors ||5,000 |
|Depreciation Reserve ||5,000 ||Accrued Interest ||1,000 |
|Creditors ||11,000 ||Cash ||2,800 |
| ||53,000 || ||53,000 |
It was agreed to dissolve the firm, and the terms of the dissolution were :
(i) J took over building at book value and agreed to pay off creditors.
(ii) Accrued interest was not collected whereas there was a contingent liability of Rs. 600 which was meet.
(iii) Other assets realised : plant: Rs. 25,000; stock : Rs. 5,000; debtors: Rs. 4,600
(iv) Realisation expenses: Rs. 600
Prepare realisation account, capital accounts and cash account.
A, B and C were carrying on partnership business sharing profits in the ratio of 3 : 2 : 1 respectively. On 31 December, 1996, the Balance Sheet of the firm stood as follows:
|Creditors ||13,590 ||Cash ||4,700 |
|Capital || ||Debtors ||8,000 |
|A ||15,000 ||Stock ||11,690 |
|B ||10,000 ||Building ||23,000 |
|C ||10,000 ||Pand L A/C ||1,200 |
| ||48,590 || ||48,590 |
B retired on the above mentioned date on the following terms :
(i) Building to be appreciated by Rs. 7,000.
(ii) Provision for doubtful debts to be made 5% on debtors.
(iii) Goodwill of the firm is valued at Rs. 18,000 and adjustment in this respect to be made in the continuing partner's capital accounts without raising goodwill account.
(iv) Rs. 3,000 to be paid to B immediately and the balance in his capital account to be transferred to his loan account.
Prepare revaluation account, capital accounts, cash account, and the balance sheet after B's retirement. (Marks 12)
Q 10 Indicate which of the following transactions would result in (a) Source, (b) Use, and © Neither Source nor use of the fund :
(i) Collection from debtors Rs. 5,000, (ii) Sale of old machinery Rs. 2,000, (iii) Redemption of debentures Rs. 10,000. (Marks 3)
Q 11 Compute cash from operations from the following details : (Marks 3)
| || |
|P and L A/C |
Q 12 Explain briefly the meaning and significance of (i) Return on Investment, and (ii) Fixed Assets Turnover Ratio. (Marks 4)
Q 13 Prepare a Comparative Income Statement from the following information: (Marks 5)
| || |
|Gross Sales |
Cost of goods sold
Q 14 The debt-equity ratio of X Ltd. is 1 : 2. Which of the following would increase, decrease or not change the debt-equity ratio :
(a) Issue of Equity Shares, (b) Cash received from debtors, © Sale of goods on cash basis, (d) Redemption of Debentures, (e) Purchases of goods on credit. (Marks 5)
Q 15 What is meant by analysis of financial statements? How is it important from the viewpoint of creditors and management? (Marks 6)
Q 16 From the following information calculate Stock Turnover Ratio, Operating Ratio and Capital Turnover Ratio : (Marks 6)
| ||Rs. |
|Opening Stock ||28,000 |
|Closing Stock ||22,000 |
|Purchases ||46,000 |
|Sales ||90,000 |
|Sales Returns ||10,000 |
|Carriage inwards ||4,000 |
|Office expenses ||4,000 |
|Selling & Distribution Expenses ||2,000 |
|Capital Employed ||2,00,000 |
Q 17 From the following, prepare a Cash Budget for January, February and March, 1998:
|1998 || |
Estimated cash balance on 1 January 1998 Rs. 10,000. In January a new machinery is to be purchased at Rs. 20,000 on credit, to be paid in two equal installments in February and March. (Marks 6)
Q 18 From the following Balance Sheet, prepare (i) Schedule of changes in Working Capital and (ii) Funds Flow Statement :
|Liabilities ||1994 |
|Assets ||1994 |
|Share Capital |
Pand L A/C
Provision for tax
P and L A/C
Additional information :
(a) Plant costing Rs. 15,000 was sold for Rs. 6,000. Accumulated Depreciation on the same was Rs. 5,000.
(b) No Depreciation was provided on Buildings during the year. (Marks 12)