SAMPLE QUESTION PAPER-II ACCOUNTANCY CLASS XII Maximum Marks : 80 General Instructions : (i) (ii) This question paper

contains three parts A, B and C Part A is compulsory for all candidates. Time allowed : 3 hrs.

(iii) Candidates can attempt only one part of the remaining Part B and C. (iv) All parts of a question should be attempted at one place.

PART-A PARTNERSHIP AND COMPANY ACCOUNTS 1 A & B are partners sharing Profit or Loss in the ratio of 3:2 having capital balances of Rs. 50,000 & Rs. 40,000 on 1.4.2003. On 1st July, 2003 A introduced Rs. 10,000 as his additional capital whereas B introduced only Rs. 1000. If the interest on capital is allowed to partners @ 10% p.a. calculate the interest on capital if the financial year closes on 31st of March every year. 2 2. A and B share Profits in the ratio of 8:7. C is admitted to partnership firm for 1/5th share. Find out the new profit sharing ratio. 2 Give four differences between dissolution of Patnership and dissolution of Partnership Firm. Pass the Journal entries for the following at the time of dissolution of a firm : (i) (ii) (iii) 5. 6 Sale of Assets Payment of Liabilities = Rs. 50,000 = Rs.10,000 2 3 2

3 4

A commission of 5% allowed to Mr. X a partner, on sale of assets.

What is Partnership deed? Give any four important contents of a Partnership deed.

On June 1, 2003 Moon Ltd. purchased 5,000 8% Debentures of Rs. 100 each at the rate of Rs. 98. The interest is payable on March 31 and September 30 every year. Calculate the real price of the debentures acquired if the price quoted above is (i) ex-interest and (ii) cum-interest. 3

What is the objective of taking a joint life policy by the partners? Explain two methods for recording the premium paid on Joint Life Policy? X and Y are partners in a firm sharing profits in the ratio of 2:3. The Balance Sheet of the firm as at March 31, 2003 is given below : Balance sheet of X and Y as at March 31, 2003 Liabilities Capitals : X Y Creditors Outstanding Expenses 8,00,000 12,00,000 20,00,000 3,10,000 70,000 Amount Rs. Assets Land Buildings Plant Furnitur e Stock Debtors Cash 23,80,000 Amount Rs. 5,00,000 6,00,000 8,00,000 1,20,000 1,80,000 1,50,000 30,000 23,80,000

The partners decided to share profit in equal ratio w.e.f. April 1, 2003. The following adjustments were agreed upon : (i) (ii) The Goodwill of the firm was valued at Rs. 4,00,000 but it was not to appear in books. Land was valued at Rs. 8,00,000, Plant at Rs. 7,20,000 and Furniture at Rs. 1,00,000 and were to appear at revalued amounts in the balance sheet. 4

Pass the necessary Journal entries to give effect the above. 9 (a)

According to Section 79 of Companys Act, 1956, what are the two provision when companies cannot issues shares at discount? 2 Mohan Ltd. purchased a machine form Atlas Ltd. for Rs. 5,40,000. It was decided to make the payment by issue of equity shares of Rs 10 each at a discount of 10%. Give necessory journal entries in the books of Mohan Ltd.

10

(a)

(b)

KMHD Ltd. forfeited 200 shares of Rs. 100 each issued at a discount of 5% on which Rs. 50 per share has been called and Rs. 6,000 has been paid. The Company then re-isued the above mentined shares to Mr. Singh upon payment of Rs. 18,000 credited as fully paid. Pass the Journal entries for forfeiture and re-issue of the shares. 2
2

11

White Ltd. issued 8,00,000 8% Debentures of Rs. 100 each redeemable at a premium of 10%. According to the terms of redemption the company redeemed 25% of the above debentures by converting them into shares of Rs. 50 each issued at a premium of 60% Pass Journal entries regarding redemption of debentures. 4

12

A, B and C were the Partners sharing profits and losses in their capital ratio. Balance sheet as on 31st March, 2003 Liabilities Creditors Joint Life Policy Reserve A B C 30,000 20,000 10,000 60,000 Amount Rs. 57,400 15,000 Assets Plant & Machinery Stock Investments Joint Life Policy Investment Furniture Cash at Bank 1,32,400 Amount Rs. 43,600 16,000 47,600 15,000 3,700 6,500 1,32,400

The firm was dissolved on the above date. A took over Investments & Stock at Rs. 41,000. J. L. Policy was realised at surrender value. Furniture was sold at Book Value. Plant & Machinery were realised for Rs. 82,040. Creditors were paid in full settlements. Pass Journal entries. OR P & R were Parners in a firm sharing profits & losses in the ratio of 3:2. They agreed to dissolve their Partnership firm on 31st March, 2003. P was deputed to realise the Assets and pay the liabilities. He was paid Rs. 1000 as commission for his services. The financial position of the firm was as follows :
3

Balance sheet as on 31st March, 2003 Liabilities Creditors Bills Payable Investment Fluctuation fund Capital P Q 37,500 15,000 52,500 Less Provision Cash 70,700 Amount Rs. 10,000 3,700 4,500 Assets Land, Building & Machineries Stock Investments Account Receivable 7,100 -450 6,650 13,550 70,700 Amount Rs. 30,000 5,500 15,000

P took over investments for Rs. 12,500. Stock and debtors were realised Rs. 11,500. Plant and Machine were sold to R for 22, 500 for cash. Realisation expenses paid Rs. 900 Prepare Realisation A/C and Partnerss Capital Accounts to close the Books of the firm. 13 6

P & J Ltd. company was established with an autorised capital of Rs. 10,00,000 divided into shares of Rs. 10 each. 32,000 shares were issued and subscribed for by the public payable as Rs. 4 on application, 2 on allotment, 2 on first call and 2 on final call. The amount received in respect of these shares were as follows : on 24,000 shares full amount called. on 5,000 shares Rs. 8 per share on 2,000 shares Rs. 6 per share on 1,000 shares Rs. 4 per share The Directors forfeited 3,000 shares on which less than Rs. 8 per share has been paid and reissued to Kamal at Rs. 8 per share as fully paid. Pass Journal Entries in the books of the Company for the record of above transactions.
4

14

Given below is the Balance sheet of PK Ltd. as at March 31, 2003 Liabilities Share Capital Authorised Shares of Rs. 50 Each Issued, Called up and paid up shares of Rs. 50 each General Reserve 8% Debentures Sundry Creditors 1,00,00,000 Own Debentures (face value Rs.9,00,000) 8,50,000 5,00,00,000 Amount Rs. Assets Fixed Assets Current Assets Amount Rs. 80,00,000 90,50,,000

20,00,000 40,00,000 25,00,000 1,85,00,000

Cash at Bank

6,00,000

1,85,00,000

The company decided the following : (i) To redeem all the 8% debentures due for redemption on September 30, 2003 and also to cancel its own debenture. To pay interest to debenures holders due on the date of redemption.

(ii)

Pass necessary Journal entries on September 30, 2003. 15 L and M are partners sharing profits in ratio of 5:3. The balance sheet of the firm as at March 31, 2003 is given below : Balance sheet of L and M as at March 31, 2003 Liabilities Capitals: L M 12,85,000 7,16,000 20,01,000 2,40,000 1,49,000 Amount Rs. Assets Land Buildings Other Fixed Assets Stock Debtors Cash in hand and at bank 23,90,000
5

Amount Rs. 6,00,000 8,80,000 3,90,000 1,98,000 1,83,000 1,39,000 23,90,000

Reserve Fund S. Creditors

On April 1, 2003, N is admitted into partnership on the following terms : (a) (b) (c) L, M and N will share profits in the ratio of 7:5:3. The Assets were revalued for the purpose of admission : land Rs. 7,50,000, Buildings Rs. 8,00,000. Goodwill of the firm was valued at Rs. 3,60,000. N was to bring his share of goodwill in cash which was to be retained in the business. N has to bring Rs. 6,00,000 towards his share of capital.

(d)

Prepare Revaluation A/c, Capital A/c, Cash A/c and Balance Sheet of the reconstituted firm. 8 OR The Balance Sheet of J, K and L, who were sharing profits in the ratio of 5:3:2, is given below as at March 31, 2003. Liabilities Capitals: J K L 5,78,800 3,47,800 2,37,900 11,64,500 78,600 Amount Rs. Assets Land Buildings Plant & Machinery Stock Debtors Cash 12,43,100 Amount Rs. 1,85,000 2,87,000 3,86,000 1,85,000 92,100 1,08,000 12,43,100

Sundry Creditors

L retires on the above date and the following adjustments in the value of assets and liabilities were agreeed upon : (a) (b) (c) Land was under valued by Rs. 1,20,000, Plant & Machinery overvalued by Rs. 35,000. Provision for doubtful debt was required for Rs. 6,000. Goodwill was valued at Rs. 3,00,000 and was to be adjusted against the capital of remaining partners.

L was paid Rs. 75,000 immediately and the balance amount was to be transferred to his loan account. Prepare Cash A/c, Revaluation A/c, Capital and Balance Sheet of the reconstituted firm on the above date.

PART B ANALYSIS OF FINANCIAL STATEMENT 16 Calculate the cash flow from the given information: (i) (ii) (iii) Investments at the beginning of the period Rs. 40,000 Investments at the end of the period Rs. 30,000 During the year company had sold 30% of its investments held in the beginning of the period at a profit of Rs. 6,000.

(2)

17.

Classify the following into operating, investing and financing activities. (a) (b) (c) (d) Issue of Share Rs. 2,00,000 Receipt of interest on Investment by a manufacturing Co. Rs. 5,000 Sale of Goods Rs. 5,00,000 Receipt of interest on investment by a bank.

18.

Prepare Comparative Income Statement from the following information: Particulars Net sales Less Cost of Goods Sold Gross Profit Less Administrative Expenses Profit before Tax Provision for Tax 40% Net profit after Tax 2002 (Rs.) 4,12,000 3,12,000 1,00,000 25,000 75,000 30,000 45,000 2003 (Rs.) 3,20,000 2,30,000 90,000 18,000 72,000 28,800 43,200 3

19. 20.

What is the importance of Financial Statement analysis for creditors and bankers?

A company had a liquid ratio of 1.5 and current ratio of 2 and inventory turnover ratio 6 times. It has total current assets of Rs. 8,00,000 in the year 2003. Find out annual sales if goods are sold at 25% Profit on Cost. 4
7

21.

From the following information, prepare Cash Flow Statement as on March 31, 2002 Liabilities Share Capital General Reserve Profit & Loss A/c Creditors Bills payable 2001 80,000 4,000 50,000 5,000 15,000 1,54,000 2002 1,60,000 10,000 60,000 3,000 25,000 2,58,000 Assets Goodwill Building Machinery Debtors Cash in hand 2001 30,000 40,000 49,000 15,000 20,000 1,54,000 2002 20,000 90,000 98,000 20,000 30,000 2,58,000

(i)

Depreciation provided during the year on machine was Rs 10,000 OR

From the following information prepare Cash flow statement as on March 31, 2003 Balance Sheets as on March 31, 2002 & 2003 Liabilities Share Capital General reserve P & C A/c Bank Overdraft Provision for doubtful debts 2002 Rs. 2,80,000 50,000 50,000 10,000 2003 Rs. 2,80,000 56,000 54,000 20,000 Assets Plant Less: Accumulated Depreciation Investment Debtors 20,000 30,000 Cash Preliminary Expenses 4,10,000 Additional Information During the year, a part of the machinery costing Rs. 60,000 on which accurmulated depreciation was Rs. 25,000, was sold for Rs. 30,000.
8

2002 Rs. 1,56,000 (56,000) 1,00,000 1,90,000 20,000 60,000 40,000 4,10,000

2003 Rs. 1,38,000 (32,000) 1,06,000 1,80,000 84,000 70,000 4,40,000

4,40,000

PART C COMPUTERISED ACCOUNTING SYSTEM

Write a series of queries to process the transaction data in such a manner as to result into information on Trial Balance. 3 Formulate the SQL statement for answering the following queries for an assumed design of an Accounting Reality. (a) (b) List the transaction details of accounts which have been credited during the month of August, 2003 List all the transacted accounts with the amounts by which they have been debited and also the amount with which they have been credited. (c) List the amount of expenses authorised by each of the employees. (1+1+1)

19.

20.

Formulate the SQL statements for answering the following queries for an assumed design of an Accounting Reality: (a) (b) List item wise the quantity sold during the month of September, 2003 Find the Minimum and Maximum rate at which each item of goods has been purchased during the period October, 2003. Make a list of Invoice No., Date and Amount of purchases during the period April 1, 2003 to March 31, 2004, grouping them month-wise. (1+1+2)

(c)

21.

Explain the concept of Relationship Degree. How is it different from Relationship Type? Give one example for each. 6

MARKING SCHEME SAMPLE QUESTIONG PAPER II ACCOUNTANCY PART A: PARTNERSHIP AND COMPANY ACCOUNTS 1. Statement showing calculation of interest Particulars 1 Interest on capital balance on April 1, 2003: 10 100 10 100 4,000 5,000 A Rs. B Rs.

50,000 x

40,000 x

Add: Interest on Additional Capital: 10 100 10 100 9 12 9 12 5,750 75 4,075 (1+1=2) 750

10,000 x

1,000 x

Total interest Payable Alternate Solution: Interest on Capital to A = 50,000 x

( (

10 x 100 10 x 100

3 12 9 12

)
)

60,000 x

= =

1,250 + 4,500 5,750

Interest on Capital to B =

( (

40,000 x

10 x 100 10 x 100

3 12 9 12

) )
(1+1 = 2) 4 5 32 75 28 75

41,000 x

= 1,250 + 4,500 = 5,750 2. Share of profit of A and B after Cs admission = 1 1 5 =

As share of profit after Cs admission =

8 15 7 15

4 5 4 5

Bs share of profit after C admission = A B C 32 28 1 Net profit sharing ratio : : : 75 75 5 or Ans. A B C 32 : 28 : 15 A B C 32 : 28 : 15

( x 4 = 2)

3.

Distinction between Dissolution of Partnership and Dissolution of Firm (Any four points) Basis 1. Termination of Business or Closure of business 2. Settlement of assets and liabilities Dissolution of Partnership No, the business is not terminated/closed Assets and liabilities are revalued and new balance sheet is prepared
11

Dissolution of Firm Yes, the firm is closed

Assets are sold and realised and liabilities are paid off

3. Courts intervention

Court does not intervene because partnership is dissolved by mutual agreement and through the process of reconstitution Economic relationship may remain or may not remain the same Closure of account books is not required because business is not terminated

A firm can be dissolved by the order of the court

4. Economic relationship

Economic relationship between the partners comes to an end

5. Closure of books

All books of accounts are closed

x4=2 4. (i) Particulars Bank A/c To Realization A/c (Being Assets sold on dissolution of the firm) Dr. LF Debit Rs. 50,000 50,000 Credit Rs.

(ii)

Realisation A/c To Bank A/c

Dr.

10,000 10.000 2,500 2,500

(Being liabilities paid on dissolution of the firm) (iii) Realisation A/c To X (A commission of 5% on assets realised, allowed to X) Dr.

(1) Total = ++1 = 2

5.

The partnership deed is a written agreement between two or more persons, for managing the affairs of apartnership firm. Important contents of partnership deed (any four) : 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. Name of the firm, Names and addresses of all partners, Nature and place of the business, Date of commencement of partnership, Duration of partnership, if any, Amount of capital contributed or to be contributed by each partner, Rules regarding operation of bank accounts, Ratio in which profits are to be shared, Interest, if any, on partners Capital and drawings, Interest on loan by the partner(s) to the firm, Salaries, commission etc., if payable to any partner(s), The safe custody of the books of accounts and other documents of the firm, Mode of auditors appointment, if any, Rules to be followed in case of admission, retirement and death of a partner, Settlement of accounts on dissolution of the firm, Mode of settlement of disputes among the partners, Any other 4 x = (2) (1 + 2 = 3)
13

6.

(i)

Real Price if the Price is Ex-interest On June 1, 2003 Ex. interest Price = Rs. 98 Real Price = Ex-interest Price Therefore Real Price = Rs. 98 (1)

(ii)

Real Price if the price is Cum-Interest On June 1, 2003 Cum-interest Price = Rs. 98 Real Price = Cum Interest Price Less Accrued interest Accrued interest for 2 months from March 31 to June 1, 2003 8 x 100 2 = Rs. 1.33 12 = Rs. 98 - 1.33 = Rs. 96.67 (1) Total = (1+1 = 3)

= 100 x

Therefore Real Price

7.

The objective of J.L.P. is to ensure liquidity in the firm to settle the claim of the retiring or deceased partner. Method of treatment : 1. 2. When Premium paid is treated as an expense. When Premium paid is treated as an asset at an amount equal to the surrender value of J.L.P. Explain with example (1+1+1) = 4 2 5-4 = 10 1 10
14

8.

Working notes : 1 2 2 5

Gain of X =

Sacrifice of Y =

3 5

1 2

6-5 10

1 10 1 10

Share of Goodwill to be given by X to Y = Rs. 4,00,000 x Profit on revaluation of land = Rs. 8,00,000 - Rs. 5,00,000 = Rs. 3,00,000 Loss on revaluation of plant = Rs. 8,00,000 - Rs. 7,20,000 = Rs. 80,000

= Rs. 40,000

Loss on Revaluation of Furniture = Rs. 1,20,000 - Rs. 1,00,000 = Rs. 20,000 Profit on revaluation = Rs. 3,00,000 - Rs. 80,000 - Rs. 20,000 = Rs. 2,00,000 Joint Entries 1. Xs Capital To Ys Capital (Share of goodwill given by X to Y on change in their profit share ratio) 2. Land To Revaluation (Profit on revaluation of land recorded) 3. Revaluation To Plant To Furniture (Loss of revaluation of plant and furniture recorded) 4. Revaluation To Xs Capital To Ys Capital (Profit on revaluation distributed among X and Y) Dr. 2,00,000 80,000 1,20,000 (1) Total = 4
15

Dr.

40,000 40,000

(1) Dr. 3,00,000 3,00,000 (1) Dr. 1,00,000 80,000 20,000 (1)

9.

(a)

Two provisions of Section 79 of Companies Act 1956 (i) (ii) A New Company cannot issue shares at a discount; and A New class of shares cannot be issued at a discount. +=1

(b)

Distinction between Capital Reserve and Reserve Capital Reserve Capital Capital Reserve 1. It is the remaining part of shares forfeited A/c after the re-issue of forfeited shares

1.

It is a part of uncalled capital of the company

()

2.

It is never shown specifically in the Balance Sheet of the Company

2.

It is shown clearly in the liabilities side of the companys Balance Sheet under the heading Reserve of Surplus ()

1+1=2 10 (a) Date Particulars Machine A/c To Atlas Ltd. (Machine purchased) Atlas Ltd. Discount on Issue of Shares To Equity share Capital (60,000 equity shares issued to settle Atlas Ltd. account) Dr. Dr. 5,40,000 60,000 6,00,000 Dr. Journal LF Debit Rs. 5,40,000 5,40,000 () Credit Rs.

(1)

Working Notes No. of shares to be issued = 5,40,000 9 ( + 1 = 2)

= 60,000

10.(b)

KMHD Ltd.

Debit Rs. Share Capital A/c To Share forfeited A/c To Calls in Arrears A/c To Discount on Issue of Shares A/cs (Being 200 shares forfeited and Rs. 3,000 being calls in arrears) Bank A/c Discount A/c Shares forfeited A/c To Share Capital A/c (Being 200 shares reissued @ Rs. 90) Share forfeited A/c To Capital Reserve A/c (Being the balance amount of shares forfeited and transferred to Capital Reserve A/c) Dr. 5,000 Dr. Dr. Dr. 18,000 1,000 1,000 Dr. 10,000

Credit Rs.

6,000 3,000 1,000 ()

20,000 ()

5,000

() Total = 2

11.

8% Debentures A/c Premium of Redemption of Debentures A/c To Debenture Holders A/c

Dr. Dr.

2,00,00,000 20,00,000 2,20,00,000

(Being the amount of 25% of Debentures and premium on redemption to be converted into shares)
17

(1)

Debenture holders A/c To Share Capital A/c

Dr.

2,20,00,000 1,37,50,000 82,50,000

To Security Premium A/c (Being issue of 2,75,000 shares of Rs. 50 each at premium of 60% to the debenture holders on conversion of 2,00,000 debentures) Working Note : (a) (b) Amount to be converted = Rs. 2,20,00,000

Issue price of a share of Rs. 50 at a premium of 60% = Rs. 50 + Rs. 30 = Rs. 80 2,20,00,000 80

(c)

Number of shares to be issued on conversion (a/b) = Rs. 50 each

2,75,000 shares of (1) Total = 4

12

Journal

Date

Particulars

LF

Debit Amount Rs. 1,25,900

Credit Amount Rs.

Realisation A/c To Plant & Machinery A/c To Stock A/c To Investment A/c To Joint Life Policy Investment To Furniture

Dr.

43,600 16,000 47,600 15,000 3,700 ()

(Transfer of sundry assets to Realisation A/c)

18

Creditors A/c Joint Life Policy Reserve A/c To Realisation A/c

Dr. Dr.

57,400 15,000 72,400 () 41,000 41,000 (1) 1,00,740 1,00,740

(Transfer of sundry liabilities to Realisation A/c) As Capital A/c To Realisation A/c (Being investments and stock taken over by A) Bank A/c To Realisation A/c (Being assets realised JLP, Furniture and Plant Realisation A/c To Bank A/c (Being creditors paid) Realisation A/c To As Capital A/c To Bs Capital A/c To Cs Capital A/c (Being profit on realisation credited to to partners in their profit Sharing ratio, i.e. 3:2:1)
19

Dr.

Dr.

(1) Dr. 57,400 57,400 (1) Dr. 30,840 15,420 10,280 5,140

(1)

Journal Date Particulars L.F. Dr. Amount (Rs.) 4,420 30,280 15,140 49,840 Cr. Amount (Rs.)

As Capital A/c Bs Capital A/c C/s Capital A/c To Bank (Being final Payment to Partners)

Dr. Dr. Dr.

(Realisation A/c and Bank A/c may be prepared as working notes - no marks Total = 6 OR Realisation A/c Particulars To Plant & Machinery To Stock To Investments To Accounts Receivable To Ps Capital A/c (Commission) To Cash (Realisation expenses) To Cash (Creditors + Bill Payable) Amount Rs. 30,000 5,500 15,000 7,100 1,000 900 13,700 Particulars By Provision for doubtful debts By Creditors By Bills Payable By Investment Fluctuation Fund By Ps Capital A/c (Investments) By Cash (Stock + Debtors) By Cash (Machinery) By Loss transferred to Ps Capital A/c Rs Capital A/c 73,200 4,830 3,220 8,050 73,200 (4)
20

Amount Rs. 450 10,000 3,700 4,500 12,500 11,500 22,500

Partners Capital A/c Particulars Realisation A/c Realisation A/c Cash P 12,500 4,830 21,170 38,500 3,220 11,780 15,000 38,500 15,000 R Particulars Balance b/d Realisation A/c P 37,500 1,000 R 15,000

(1 mark for each Partners Capital A/c) (Cash A/c may be prepared as working note - but no marks) 13. Bank A/c To Share Applications A/c (Being cash received @ Rs. 4 per share on application for 32,000 shares) Share Application A/c To Share Capital A/c (Being the share application money received transferred to share capital account) Share Allotment A/c To Share Capital A/c (Being share allotment money @ Rs. 2 per share due on 32000 shares) Bank A/c Calls-in-Arrears To Share Allotment A/c (Being cash received on 31,000 shares on account of allotment @ Rs. 20 arrears on 1000 shares)
21

4+2=6 1,28,000 1,28,000

Dr.

Dr. 1,28,000 1,28,000

Dr. 64,000 64,000

62,000 2,000 64,000

Dr. Dr.

Share First Call A/c To Share Capital A/c

Dr.

64,000 64,000

(Being First Call money @ Rs. 2 on Rs. 32,000 shares due) Bank A/c Calls-in-Arrears A/c To Share First Call A/c (Being amount received on 29,000 shares. Arrears on 3000 shares) Share Second & Final Call A/c To Share Capital A/c (Being second call money due @ 2 per share on 32,000 shares) Bank A/c Call-in-Arears To Share Second and Final Call A/c (Being the amount received @ Rs. 2 on 24,000 shares and calls in arears on 8,000 shares) Shares Capital A/c To Share forfeited A/c To Calls-in-Arrears A/c (Being 3,000 shares forfeited on which less than Rs. 8 has been received. Calls in arrear on 2,000 shares Rs. 8,000 and on 1,000 shares Rs. 6,000)
22

58,000 6,000 64,000

Dr. Dr.

Dr.

64,000 64,000

Dr. Dr. 48,000 16,000 64,000

Dr. 30,000 16,000 14,000

Bank A/c Shares forfeited A/c To Share Capital (Being 3,000 shares issued to Kamal @ Rs. 8 per share fully paidup) Share forfeited A/c To Capital Reserve

Dr. Dr.

24,000 6,000 30,000

() Dr. 10,000 10,000

(Being the remaining amount of shares forfeited account transferred to capital reserve)

(1) Total = 6

14. 2003 Sep. 30 8% Debenture A/c To Own Debentures A/c To Gain on Cancellation of Debentures A/c to Debenture holders A/c (Being own debentures cancelled and the amount payable to debenture holders on redemption of other debenture) (Two entries can also be passed) Debenture holders A/c To Bank A/c (Being the amount paid to debenture holders on redemption)
23

Dr.

40,00,000 8,50,000 50,000 31,00,000

Dr.

31,00,000 31,00,000

Gain on Cancellation of Debentures A/c To Capital Reserve A/c (Being the gain on cancellation of debentures account transferred to Capital Reserve) (a) Interest on Debentures A/c To Debenture holders A/c (Being interest payable to debenture holders other than own Debentures held) (b) Debentures holders A/c To Bank A/c (Being interest paid to Debenture holders) (c) Interest on Debentures A/c To Interest on own Debenture A/c

Dr.

50,000 50,000

Dr.

1,24,000 1,24,000

Dr.

1,24,000 1,24,000

Dr.

36,000 36,000

(Being interest on own debentures for six months) Note : Entries (a) and (b) can be combined. 1 mark for each entry 15. Dr. Particulars Buildings Ls Capital Ms Capital Rs. 80,000 43,750 26,250 1,50,000 1,50,000 (2 marks)
24

Total = 6 Revaluation Account Cr. Particulars By Land Rs. 1,50,000

Capital Accounts
Dr. L Rs. To Balance c/d 15,35,750 M Rs. N Rs. L Rs. M Rs. Cr. N Rs.

8,47,250 6,00,000 By Balance b/d By Reserve Fund By Premium (19.5) By Revaluation A/c By Cash

12,85,000 7,16,000 1,50,000 57,000 43,750 90,000 15,000 26,250 6,00,000 15,35,750 8,47,250 6,00,000

15,35,750

8,47,250 6,00,000

(3 marks) Cash A/c Dr. To Balance b/d To Ns Capital To Premium 1,39,000 6,00,000 72,000 8,11,000 Balance Sheet of L, M and N as at March 31,2003 Capitals : L M N S. Creditors 15,35,750 8,47,250 6,00,000 29,83,000 1,49,000 Land Building Other Fixed Assets Stock DSS Cash in hand and at Bank 31,32,000 7,50,000 8,00,000 3,90,000 1,98,000 1,83,000 8,11,000 31,32,000 (2 marks) Total = 8
25

Cr. By Balance c/d 8,11,000

8,11,000

Working Note : 1. Sacrifice made by : L= 5 8 3 8 7 15 5 15 L 19 2. = 75-56 120 45-40 120 M 5 = 19 120 5 120

M=

Sacrifice Ratio :

: :

Amount of Premium to be brought by N : 3,60,000 x 1 5 = 72,000

3.

(i)

Share of L in Premium brought by N : 19 24 x 72,000 = 57,000

(ii)

Share of M in Premium brought by N : 5 24 x 72,000 = 15,000 OR Revaluation A/c

Particulars To Plant & Machinery To Provision for doubtful debts To J K L 39,500 23,700 15,800

Rs. 35,000 6,000

Particulars By Land

Rs. 1,20,000

79,000 1,20,000
26

1,20,000

Capital A/c Dr. Particulars To L (in gaining ratio 5:3) To Cash To Ls Loan A/c To balance c/d J 37,500 K 22,500 L Particulars By balance b/d J K Cr. L

5,78,800 3,47,800 2,37,900

75,000 By Revaluation A/c

39,500 -

23,700 -

15,800 37,500 22,500

- 2,38,700 By J (gaining ratio) - By K (gaining ratio)

5,80,800 3,49,000

6,18,300 3,71,500 3,13,700

6,18,300 3,71,500 3,13,700

Cash A/c Dr. Paticulars To balance b/d Rs. 1,08,000 Particulars By L By balance c/d 1,08,000 Rs. 75,000 33,000 1,08,000 Cr.

Balance Sheet as at March 31,2003 Liabilities Capitals J K Ls Loan A/c Creditors 5,80,800 3,49,000 9,29,800 2,38,700 78,600 Rs. Assets Land Buildings Plant & Machinery Stock Debtors Cash 12,47,100
27

Rs. 3,05,000 2,87,000 3,51,000 1,85,000 86,100 33,000 12,47,100

Workings Book value of investments sold (30% of Rs. 40,000) Add Profit Sale value of investments Investments at the end of the period Less : Book value of unsold investment (70 of Rs. 40,000) Investment purchased Answer Cash inflow Cash outflow 17. (a) (b) (c) (d) 18. Particulars Financing Activity Investing Activity Operating Activity Operating Activity Comparative Income Statement for the year ending.... 2002 & 2003 2002 (Rs.) 4,12,000 3,12,000 1,00,000 25,000 75,000 30,000 45,000 2003 (Rs.) 3,20,000 2,30,000 90,000 18,000 72,000 28,800 43,200 Absolute change (Rs.) (92,000) (82,000) (10,000) (7,000) (3,000) (1,200) (1,800) Precentage change (%) 22,33 26.28 10.00 28.00 4.00 4.00 4.00 =x6=3
28

12,000

6,000 18,000 30,000 28,000

2,000

Rs. 18,000 (I) Rs. 2,000 (I) 2 marks

x4=2

Net Sales Less : Cost of Goods sold Gross Profit Less : Administrative Expenses Profit before Tax Provision for Tax @ 40% Net Profit after Tax mark for each correct step Ignore last step

19.

Financial statements convey about the financial performance and financial position of a business entity. Financial statement analysis has significance for bankers and creditors since they are interested in assessing whether the interest on credit extended by them will be received periodically and the Company will be able to repay the amount advanced or not. Financial statement analysis helps in assessing the liquidity, solvency, profitability and efficiency of the enterprise. (3)

20.

Current Ratio Current Assets Current Ratio

= = =

2 Rs. 8,00,000 Current Assets Current Liabilities Rs. 8,00,000 Current Liabilities = = Rs. 8,00,000 2 4,00,000 (1)

2=

or, Current liabilities

Liquid ratio

Liquid Assets Current Liabilities Liquid Assets 4,00,000 1.5 x 4,00,000 Rs. 6,00,000

1.5

or Liquid Assets = = Inventory = = =

Current Assets-Liquid Assets

Rs. 8,00,000-Rs. 6,00,000 Rs. 2,00,000 = Cost of goods sold Average inventory Cost of goods sold 2,00,000
29

(1)

Inventory Turnover Ratio

or, Cost of Goods sold

= =

6 x 2,00,000 Rs. 12,00,000 (1)

Now, if goods are sold at 25% profit on cost then it means that if cost is Rs. 100, sales are Rs. 125 125 100

so, if cost is Rs. 12,00,000, sales are =

x 12,00,000

= Rs. 15,00,000 Annual Sales are Rs. 15,00,000 21. Balance of P & L as at Dec. 31, 2002 Add Transfer to G.R. during the year (10,000-4,000) (Total = 4) 60,000 6,000 66,000 Less Balance of P & L as at Dec., 31, 2001 Net Profit before Tax Machinery A/c To Balance b/d To Cash (purchase of Machinery) (Bal. fig.) 49,000 59,000 By Depreciation Expense By Balance c/d 10,000 98,000 50,000 16,000

1,08,000 Statement of Cash Flows Rs. (A) Cash flow from Operating Activities (a) Net Profit before Tax Add Dep. on Machinery Goodwill written-off
30

1,08,000

Rs.

16,000 10,000 10,000

(b)

Operating Profit before Working Capital Changes Add Increase in B. Payable Less Decrease in Creditors Less Decrease in Debtors (c) Net Cash from Activities

36,000 10,000 (2,000) (5,000) 39,000 3

(B)

Cash flow from Investing Activities Cash used for purchase of Building Cash used for purchase of Machinery Net Cash used for Investing Activities (50,000) (59,000) (1,09,000) (1)

(C)

Cash flow from Financial Activities Cash from issue of share Capital Net Cash from Financing Activities 80,000 80,000 10,000 20,000 30,000 (1) (1)

(D) (E) (F)

Net Increase in Cash Balance of Cash in the beginning Balance of Cash at the end

Total = 6 marks OR Cash flow statement for the year ended March 31, 2003 Particulars A Cash flow from operating Activities Net Profit before Tax Adjustments for non-cash & non operating items Add : Depreciation Prelininery Expenses written off loss on sale Operating profit before working Capital changes 10,000 Details Amount

1,000 40,000 5,000 56,000

31

Add: Decrease in Current Assets & Increase in Current Liabilities Provision for doubtful debt Less: Increase in Current Assets & Decrease in Current Liabilities, Debtors Cash Flow from operating activities before Tax Less : Tax Cash Flows From operating activities after tax B. Cash Flow from Investing Activities

10,000

(64,000) 2,000

2,000

Purchase of Plant Sale of Plant Sale of Investment Cash flows from Investing Activities

(42,000) 30,000 10,000 (2,000)

C.

Cash Flow from financing Activities Cash generated during the year Add: Cash and Cash Equivalants at the beginning of the year

50,000 50,000

Workings (1) Net Profit Before Tax Balance of P&L A/c as on 31.03.03 Less: Balance of P&L A/c as on 31-3-02 54,000 50,000 4,000 Add: Transfer to general Reserve 6,000 10,000
32

(2)

Dr. Plant A/c Bal c/d

Accumulated Depreciation A/c 25,000 32,000 57,000 Bal. B/d Depreciation 56,000 1,000 57,000

Cr.

(3) Bal b/d Bank (purchase) 1,56,000 42,000

Plant A/c Accumulated Depreciation Bank Less on Sale Bal c/d 1,98,000 25,000 30,000 5,000 1,38,000 1,98,000

(4)

Cash and Cash equivalents Particulars Cash Less Bank Overdraft Beginning 60,000 10,000 50,000 PART C COMPUTERISED ACCOUNTING SYSTEM End 70,000 20,000 50,000

16.

Explain the concept of Data model with the help of an example. Answer

33

17.

Explain with one example DML or DCL Answer DML It means Data Manipulation Language. It is that set of commands of SQL which are used for manipulation of data. Manipulation of data means: * * * DCL It means Data Control Language. It means that set of commands of SQL which are used to control access to the information stored in the database. It may mean: * * * Granting privilege to different users about access to information Revoking privilege to different users about access to information Privilege may relate to retrieval, manipulation, control, definition of information Inserting new records Deleting existing records Updating the existing records

18.

Write a series of queries to process the transaction data in such a manner as to result into information on Trial Balance. Answer Accounting Reality to be drawn which shows the tables containing data Depending upon how the tables, are drawn, queries to be creatcd to get the information about: * * Name of the account Whether debit or credit
34

* * 19.

Amount in the cccount The total of the sides of debit or credit

Formulate the SQL statements for answering the following queries for an assumed design of an Accounting Reality: (a) List the transaction details of accounts which have been credited during the month of August, 2003 List all the transacted accounts with the amounts by which they have been debited and also the amount with which they have been credited. List the amount of expenses authorised by each of the employees.

(b)

(c)

Answers (a) Select colname1, colname2 From tablename Where condition fulfilling data requirement Select colname1, colname2 from tablename where condition (c) Select colname1, colname2 from tablename Where condition

(b)

20.

Forulate the SQL statements for answering the following queries for an assumed design of an Accounting Reality: (a) (b) List item wise the quantity sold during the month of September, 2003. Find the Minimum and maimum rate at which each item of goods has been purchased during the period October, 2003.
35

(c)

Make a list of Invoice No., Date and Amount of Purchases during the period April 1,2003 to March 31, 2004, grouping them month-wise.

Answer (a) Select colname1, Colname2 From tablename Where condition Select colname1, Colname2 From tablename Where condition Select colname1, Colname2 From tablename Where condition 21. Explain the concept of Relationship Degree. How is it different from Relationship Type? Give one example for each. 6 Answer Relationship Degree It refers to the number of relations associated with a relationship.

(b)

(c)

Relation

Account Type

Relationship

36

Give an illustration of a relationship of degree of two or three. Relationship Type It means the kind of relationship among instances (tuples) of relation (s)

Give an eamle for Accounting reality.

Account Type

Has

Accounts

Relationship type could be: 1. 2. 3. one-to-one one-to-many many-to-many

37