These Sample papers are part of CBSE Sample Papers for Class 12 Accountancy. Here we have given CBSE Sample Papers for Class 12 Accountancy Paper 7
CBSE Sample Papers for Class 12 Accountancy Paper 7
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Students who are going to appear for CBSE Class 12 Examinations are advised to practice the CBSE sample papers given here which is designed as per the latest Syllabus and marking scheme as prescribed by the CBSE is given here. Paper 7 of Solved CBSE Sample Papers for Class 12 Accountancy is given below with free PDF download solutions.
Time: 3 Hours
Maximum Marks: 80
(i) Please check that this paper contains 23 questions.
(ii) The paper contains two parts A and B.
(iii) Part A is compulsory for all.
(iv) Part B has two options—Option-1 Analysis of Financial Statements and Option-II Computerized Accounting.
(v) Attempt only one option of Part B.
(vi) All parts of a question should be attempted at one place.
PART – A
Accounting for Partnership Firms and Companies
Distinguish between ‘fixed capital account’ and ‘fluctuating capital account’ on the basis of credit balance.
A and B were partners in a firm sharing profits and losses in the ratio of 5:3. They admitted C as a new partner. The new profit sharing ratio between A,B and C was 3:2:3. A surrendered th of his share in favour of C. Calculate B’s sacrifice.
P and Q were partners in a firm sharing profits and losses equally. Their fixed capitals were ? 2,00,000 and ? 3,00,000 respectively. The partnership deed provided for interest on capital @ 12% per annum. For the year ended 31st March, 2016, the profits of the firm were distributed without providing interest on capital.
Pass necessary adjustment entry to rectify the error.
X Ltd. invited applications for issuing 500,12% debentures of Rs 100 each at a discount of 5%. These debentures were redeemable after three years at par. Applications for 600 debentures were received. Pro-rata allotment was made to all the applicants.
Pass necessary journal entries for the issue of debentures assuming that the whole amount was payable with application.
Z Ltd. forfeited 1,000 equity shares of Rs 10 each for the non-payment of the first call of Rs 2 per share. The final call of Rs 3 per share was yet to be made.
Calculate the maximum amount of discount at which these shares can be reissued.
Durga and Naresh were partners in a firm. They wanted to admit five more members in the firm. List any two categories of individuals other than minors who cannot be admitted by them.
BPL Ltd. Converted 500,9% debentures of Rs 100 each issued at a discount of 6% into equity shares of Rs 100 each issue at a premium of Rs 25 per share. Discount on issue of 9% debentures has not yet been written off.
Showing your working notes clearly, pass necessary journal entries for conversion of 9% debentures into equity shares.
Kavi, Ravi, Kumar and Guru were partners in a firm sharing profit in the ratio of 3 :2:2:1. On 1.2.2017, Guru retired and the new profit sharing ratio decided between Kavi, Ravi and Kumar was 3:1:1. On Guru’s retirement the goodwill of the firm was valued at Rs 3,60,000.
Showing your working notes clearly, pass necessary journal entry in the books of the firm for the treatment of goodwill on Guru’s retirement
Disha Ltd. Purchased machinery from Nisha Ltd. and paid to Nisha Ltd. as follows:
(i) By issuing 10,000, equity shares of Rs 10 each at a premium of 10%.
(ii) By issuing 200,9% debentures of Rs 100 each at a discount of 10%.
(iii) Balance by accepting a bill of exchange of Rs 50,000 payable after one month.
Pass necessary journal entries in the books of Disha Ltd. for the purchase of machinery and making payment to Nisha Ltd.
Ganesh Ltd. is registered with an authorised capital of Rs 10,00,00,000 divided into equity shares of Rs 10 each. Subscribed and fully paid up capital of the company was Rs 6,00,00,000. For providing employment to the local youth and for the development of the tribal areas of Arunachal Pradesh the company decided to open skill development centres in Itanagar, Pasighat and Tawang. To meet its new financial requirements, the company decided to issue 1,00,000 equity shares of Rs 10 each and 1,00,000,9% debentures of Rs 100 each. The debentures were redemable after five years at par. The issue of shares and debentures was fully subscribed. A shareholder holding 2,000 shares failed to pay the final call of Rs 2 per share.
Show the share capital in the balance sheet of the company as per the provisions of schedule III of the Companies Act, 2013. Also identify any two values that the company wishes to propagate.
Madhu and Neha were partners in a firm sharing profits and losses in the ratio of 3 : 5. Their fixed capitals were Rs 4,00,000 and Rs 6,00,000 respectively. On 1.1.2016, Tina was admitted as a new partner for th share in the profits. Una acquired her share of profit from Neha. Tina brought Rs 4,00,000 as her capital which was to be kept fixed like the capital of Madhu and Neha. Calculate the goodwill of the firm on Tina’s admission and the new profit sharing ratio of Madhu, Neha and Tina. Also, pass necessary journal entry for the treatment of goodwill on Tina’s admission considering that Tina did not bring her share of goodwill premium in cash.
Ashok, Babu and Chetan were partners in a firm sharing profits in the ratio of 4 :3:3. The firm closes its books on 31st March every year. On 31st December 2016 Ashok died. The partnership deed provided that on the death of a partner, his executors will be entitled for the following:
(i) Balance in his capital account On 1.4.2016, there was a balance of Rs 90,000 in Ashok’s capital account
(ii) Interest on capital @ 12% per annum.
(iii) His share in the profits of the firm in the year of his death will be calculated on the basis of rate of net profit on sales of the previous year, which was 25%. The sales of the firm till 31st december, 2016 were Rs 4,00,000.
(iv) His share in the goodwill of the firm. The goodwill of the firm on Ashok’s death was valued at Rs 4,50,000. The partnership deed also provided for the following deductions from the amount payable to the executor of the decreased partner:
(a) His drawings in the year of his death. Ashok’s drawings till 31.12.2016 were Rs 15,000.
(b) Interest on drawings @ 12% per annum which was calculated as Rs 1,500.
The accountant of the firm prepared Ashok’s capital account to be presented to the executor of Ashok but in a hurry he left it incomplete. Ashok’s capital account as prepared by the firm’s accountant is given below:
You are required to complete Ashok’s capital account.
A, B, C and D were partners in a firm sharing profits in the ratio of 3 : 2: 3 : 2. On 1.4.2016, their balance sheet was as follows:
From the above data the partners decided to share the future profits in the ratio of 4 : 3 : 2 : 1. For this purpose the goodwill of the firm was valued at Rs 2,70,000. It was also considered that:
(i) The claim against workmen compensation Reserve has been estimated at Rs 30,000 and fixed assets will be depreciated by Rs 25,000.
(ii) Adjust the capitals of the partners according to the new profit sharing ratio by opening current accounts of the partners.
Prepare revolution account, Partners’ capital account and the balance sheet of the reconstituted firm.
On 1.4.2015, J.K. Ltd. issued 8,000, 9% debentures of Rs 1,000 each at a discount of 6%, redeemable at a premium of 5% after three years. The company closes its books on 31st March every year. Interest on 9% debentures is payable on 30th September and 31st March every year. The rate of tax deducted at source is 10%. Pass necessary journal entries for the issue ’ of debentures and debenture interest for the year ended 31.3.2016.
Pass necessary journal entries on the dissolution of a partnership firm in the following cases:
(i) Dissolution expenses were Rs 800.
(ii) Dissolution expenses Rs 800 were paid by Prabhu, a partner.
(iii) Geeta, a partner, was appointed to look after the dissolution work, for which she was allowed a remuneration of Rs 10,000. Geeta agreed to bear the dissolution expenses. Actual dissolution expenses Rs 9,500 were paid by Geeta.
(iv) Janki, a partner, agreed to look after the dissolution work for a commission of Rs 5,000. Janki agreed to bear the dissolution expenses. Actual dissolution expenses Rs 5,500 were paid by Mohan, another partner, on behalf of Janki.
(v) A partner, Kavita, agreed to look after the dissolution process for a commission of Rs 9,000. She also agreed to bear the dissolution expenses. Kavita took over furniture of Rs 9,000 for her commission. Furniture had already been transferred to realisation account.
(vi) A debtor, Ravinder, for Rs 19,000 agreed to pay the dissolution expenses which were Rs 18,000 in full settlement of his debt
C and D are partners in a firm sharing profits in the ratio of 4 : 1. On 31.3.2016, their balance sheet was as follows:
On the above date, E was admitted for th share in the profits on the following terms:
(i) E will bring Rs 1,00,000 as his capital and Rs 20,000 for his share of goodwill premium, half of which will be withdrawn by C and D.
(ii) Debtors Rs 2,000 will be written off as bad debts and a provision of 4% will be created on debtors for bad and doubtful debts.
(iii) Stock will be reduced by Rs 2,000, furniture will be depreciated by Rs 4,000 and 10% depreciation will be charged on plant and machinery.
(iv) Investments of Rs 7,000 not shown in the Balance sheet will be taken into account.
(v) There was an outstanding repairs bill of Rs 2,300 which will be recorded in the books. Pass necessary journal entries for the above transactions in the books of the firm on E’s admission.
Sameer, Yasmin and Saloni were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 3. On 31.3.2016, their balance sheet was as follows:
On the above date, Y retired. It is agreed that
(i) Debtors of Rs 4,000 will be written off as bad debts and a provision of 5% on debtors for bad and doubtful debts will be maintained.
(ii) An unrecorded creditors of Rs 20,000 will be recorded.
(iii) Patents will be completely written off and 5% depreciation will be charged on stock, machinery and building.
(iv) Yasmin and Saloni will share future profit in the ratio of 3 : 2.
(v) Goodwill of the firm on Sameer’s retirement was valued at Rs 5,40,000.
Pass necessary, journal entries for the above transactions in the books of the firm on Sameer’s retirement.
VXN Ltd. invited applications for issuing 50,000 equity shares of Rs 10 each at a premium of Rs 8 per share. The amount was payable as follows:
On application – Rs 4 per share [including Rs 2 premium]
On allotment – Rs 6 per share [including Rs 3 premium]
On first call – Rs 5 per share [including Rs 1 premium]
On second and final call: Balance amount
The issue was fully subscribed. Gopal, a shareholder holding 200 shares, did not pay the allotment money and Madhav, a holder of 400 shares, paid his entire share money along with the allotment money. Gopal’s shares were immediately forfeited after allotment. Afterwards, the first call was made. Krishna, a holder of 100 shares, failed to pay the first call money and Girdhar, a holder of 300 shares, paid the second call money also along with the first call. Krishna’s shares were forfeited immediately after the first call. Second and final call was made afterwards and was duly received. All the forfeited shares were reissued at Rs 9 per share fully paid up.
Pass necessary journal entries for the above transactions in the books of the company.
JJK Ltd. invited applications for issuing 50,000 equity shares of Rs 10 each at par. The amount was payable as follows:
On application – Rs 2 per share
On allotment – Rs 4 per share.
On first and final call – balance amount.
The issue was oversubscribed three times. Applications for 30% shares were rejected and money refunded. Allotment was made to the remaining applicants as follows:
Excess money paid by the applicants who were allotted shares was adjusted towards the sums due on allotment.
Deepak, a shareholder belonging to category. I, who had applied for 1,000 shares, failed to pay the allotment money. Raju, a shareholder holding 100 shares, also failed to pay the allotment money. Raju belonged to category II. Shares of both Deepak and Raju were forfeited immediately after allotment afterwards, first and final call was made and was duly received. The forfeited shares of Deepak and Raju were reissued at Rs 11 per share fully paid up.
Pass necessary journal entries for the above transactions in the books of company.
PART – B
“Analysis of Financial Statements’
Normally, what should be the maturity period for a short-term investment from the date of its acquisition to be qualified as cash equivalents?
State the primary objective of preparing a cash flow statement.
What is meant by ‘Analysis of Financial Statements’? State any two objectives of such an analysis.
The proprietary ratio of M. Ltd. is 0.80:1. State with reasons whether the following transactions will increase, decrease or not change the proprietary ratio:
(i) Obtained a loan from bank Rs 2,00,000 payable after five years.
(ii) Purchased machinery for cash Rs 75,000.
(iii) Redeemed 5% redeemable preference shares Rs 1,00,000.
(iv) Issued equity shares to the vendors of machinery purchased for Rs 4,00,000.
Financial statements are prepared following the consistent accounting concepts, principles, procedure and also the legal environment in which the business organisations 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 decision in a meaningful way.
From the above statement identify any two values that a company should observe while preparing its financial statement. Also, state under which major headings and subheadings the following items will be presented in the balance sheet of a company as per schedule III of the companies Act, 2013.
(i) Capital reserve
(iii) Loose tools
(iv) Bank overdraft
From the following balance sheet of SRS Ltd. and the additional information as on 31.3.2016, prepare a cash how statement
(i) Rs 50,000,12% debentures were issued on 31.3.2016.
(ii) During the year a piece of machinery costing Rs 40,000, on which accumulated depreciation was Rs 20,000, was sold at a loss of Rs 5,000.
Fixed capital accounts always show a credit balance while fluctuating capital accounts may show credit or debit balance.
B’s old share = 3/8
B’s new share = 2/8
B’s sacrifice =
Books of the firm
The maximum amount of discount at which these shares can be re-issued is 5 per share or Rs 5,000.
Any two of the following:
(i) Person of unsound mind/Lunatics
(ii) Insolvent Persons
(iii) Any other individual who have been disqualified by law.
Purchase consideration = 1,10,000 + 18,000 + 50,000 = 1,78,000
Balance sheet of Ganesh Ltd.
As at (As per revised schedule VI)
Values (Any two):
(i) Providing employment opportunities to the local youth.
(ii) Promotion of development in tribal areas.
(iii) Promotion of skill development in Arunachal Pradesh.
(iv) Paying attention towards regions of social unrest.
(a) Calculation of hidden Goodwill:
Tina’s share = 1/4
Tina’s capital = 4,00,000
(i) Total capital of the new firm = 4,00,000 , 4 = 16,00,000
(ii) Existing total capital of Madhu, Neha and Tina
= 4,00,000 + 6,00,000 + 4,00,000 = 14,00,000
Goodwill of the firm = 16,00,000 – 14,00,000 = 2,00,000
Thus, Tina’s share of goodwill = 1/4 2,00,000 = 50,000
(b) Calculation of new profit sharing ratio:
Madhu new share = 3/8
Neha’s new share = 5/8 – 1/4 = 3/8
Tina’s share = 1/4 i.e. 2/8
New ratio = 3:3:2
(c) Book of the firm
Dr. Realisation A/c Cr.
Dr. Revaluation A/c Cr.
Books of the Firm
Books of the Firm
Maximum maturity period is 90 days/3 months for a short term investment from the date of acquisition to be qualified as cash equivalents.
To find out the inflows and outflows of cash and cash equivalents from operating, investing and financing activities.
Analysis of financial statements in the process of critical evaluation of the financial information contained in the financial statements in order to understand and make decisions regarding the operations of the firm.
Objectives of financial statements analysis:
(i) Assessing developments in future by forecasting and preparing budgets.
(ii) To ascertain the relative importance of different components of the financial position of the firm.
(i) Transparency (ii) Consistency
Cash flow statements of SRS Ltd. for the year ended 31st March 2016 as per AS-3 (Revised)
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