Sample Question Paper

Accountancy (055): Class XII: 2017-18

Marking Scheme

Part A

(Accounting for Partnership Firms and Companies)

1. Solution: Individually: Partners ½

Collectively: Firm ½

2. Solution: Net Amount of Loss transferred to:

A’s Capital Account: Rs. 87,000 ½

C’s Capital Account: Rs. 29,000 ½

3. Solution: Ratio of H, P and S is 4 : 3 : 3

H’s Gain = 3/10 X 20 /100 = 3 /50

H’s new share = H’s old share + H’s Gain

= 4/10 + 3/50 = 23/50 ½

S’s Gain = 3/10 X 80 /100 = 12 /50

S’s new share = S’s old share + S’s Gain

= 3/10 + 12/50 = 27/50 ½

New Profit sharing Ratio of H and S is 23 : 27

4. Solution: In case of dissolution of partnership, the firm continue to do business but with a
changed agreement. In case of dissolution of partnership firm, the firm ceases to exist, the
assets of the firm are realised and its liabilities are discharged. 1

5. Solution: Irredeemable debentures are called perpetual debentures because these are not
repayable during the life span of the company. 1

6. Solution: Shares can not be converted into debentures or any other security whereas the
debentures can be converted into shares if the terms so provide. 1
 7. Solution: (i) K K Limited

Journal

Date Particulars LF Dr. Amount (Rs.) Dr. Amount (Rs.)

Bank Account Dr. 10,00,000
To Bank Loan Account 10,00,000
( Obtained loan from State Bank of India @ 9
%.)
1

(ii) K K Limited

Journal

Date Particulars LF Dr. Amount Dr. Amount

(Rs.) (Rs.)
Bank Account Dr. 10,00,000
To Bank Loan Account 10,00,000
( Obtained loan from State Bank of India @ 9 %.)
Debenture Suspense Account Dr. 15,00,000
To 9 % Debentures Account 15,00,000
(Issued 9 % Debentures as collateral security in
favour of State Bank of India)
1+1

8. Solution:

R’s Capital Account

Date Particulars JF Amount Date Particulars JF Amount

2017 (Rs) 2017 (Rs)
Jun 30 To Drawings A/C 60,000 Apr 1 By Balance b/d 6,50,000
Jun 30 To Interest on Drawings A/C 900 Jun 30 By Interest on Capital A/c 16,250
Jun 30 To R’s Executor’s A/c 6,35,350 Jun 30 By Profit & Loss Suspense A/C 30,000
6,96,250 6,96,250
½X6=3

Note: ½ mark may be deducted if the dates are not correctly recorded.

9. Solution: M M Limited

Balance Sheet

as at …………………………… (Rs. In Crores)

Particulars Note Current Year Previous Year

Number Rs. Rs.
I. Equity and Liabilities
1. Shareholders’ Funds
a) Share Capital 1 11 10

1
Notes to Accounts:

Note Number 1 (Rs. In Crores)

Particulars Current Year

Rs.
Share Capital:
Authorised Capital
2,00,00,000 Equity Shares of Rs. 100 each 200
Issued Capital
11,00,000 Equity shares of Rs. 100 each 11

Subscribed Capital
Subscribed and Fully paid
11,00,000 Equity shares of Rs. 100 each 11

1+½+½=2

10. Solution:

V K Limited
Journal

Date Particulars LF Dr. Amount Dr. Amount

(Rs.) (Rs.)
Machinery Account Dr. 7,00,000
To Modern Equipment Manufacturers Limited 7,00,000
(Purchased machinery for Rs. 7,00,000 from
Modern Equipment Manufacturers Limited )
Modern Equipment Manufacturers Ltd. A/C Dr. 6,65,000
Loss on Issue of 9 % Debentures Account Dr. 20,000
To 9 % Debentures Account 1,00,000
To Equity Share Capital Account 5,00,000
To Securities Premium Account 75,000
To Premium on Redemption of Debentures A/C 10,000
(Issued Rs. 1,00,000 9 % debentures at a
discount of 10 % redeemable at a premium of 10
% and 50,000 equity shares of Rs. 10 each issued
at a premium of 15 %)
Modern Equipment Manufacturers Ltd. A/C Dr. 35,000
To Bills Payable Account 35,000
(Acceptance given to Modern Equipment
Manufacturers Limited)
3

11. Solution: E, F and G

Journal

Date Particulars LF Dr. Amount (Rs.) Dr. Amount (Rs.)

Realisation Account Dr. 2,76,500
To Land & Building Account 1,00,000
To Furniture Account 50,000
To Machinery Account 90,000
To Debtors Account 36,500
(Individual Assets accounts closed by
transferring their balances to Realisation
Account)
 Creditors Account Dr. 45,000
Outstanding Expenses Account Dr. 17,000
To Realisation Account 62,000
(Individual External Liabilities Accounts
closed by transferring their balances to
Realisation Account)
Bank Account Dr. 1,08,900
To Realisation Account 1,08,900
( Land & Building realized)
Bank Account Dr. 12,500
To Realisation Account 12,500
( Furniture realized)
Bank Account Dr. 9,000
To Realisation Account 9,000
( Machinery Sold as scrap)
Realisation Account Dr. 42,750
To Bank Account 42,750
(Creditors paid at a discount of 5%)
Realisation Account Dr. 17,000
To Bank Account 17,000
(Paid outstanding Expenses)
5,000
Realisation Account Dr.

To F’s Capital Account 5,000

(Remuneration paid to F for undertaking

dissolution process) 59,540
E’s Capital Account Dr. 59,540
F’s Capital Account Dr. 29,770
G’s Capital Account Dr.
To Realisation Account 1,48,850
( Loss on Realisation transferred to
partners’ Capital Accounts) 30,270
Bank Account Dr.
To G’s Capital Account 30,270
( Final payment received from G) 1,89,540
E’s Capital Account Dr. 1,59,540
F’s Capital Account Dr.
To Bank Account 3,49,080
( Final payment made to E and F)
4

12.

Solution: A, B and C

Journal

Date Particulars LF Dr. Amount (Rs.) Dr. Amount (Rs.)

C’s Capital Account Dr. 50,000
To A’s Capital Account 50,000
(Treatment of goodwill due to change in profit
sharing ratio)
Reserve Fund Account Dr. 18,000
To A’s Capital Account 9,000
To B’s Capital Account 6,000
To C’s Capital Account 3,000
(Reserve Fund transferred to partners’ capital
 accounts in their old profit sharing ratio)
18,000
18,000
Revaluation Account Dr.
To Fixed Assets Account
(Revaluation of fixed assets on change in 9,000
profit sharing ratio) 6,000
A’s Capital Account Dr. 3,000
B’s Capital Account Dr. 18,000
C’s Capital Account Dr.
To Revaluation Account
(Loss on revaluation transferred to partners’
capital accounts) 60,000
A’s Capital Account Dr. 60,000
To A’s Current Account
( Adjustment of capital by opening of current
account) 60,000
C’s Current Account Dr. 60,000
To C’s Capital Account
(Adjustment of capital by opening of current
account)
4

13.

Solution: Profit & Loss Appropriation Account

for the year ended on March 31, 2017

Particulars Amount Particulars Amount

(Rs.) (Rs.)
To Interest on Capital: By Profit & Loss Account- Net Profit b/d 85,000
L’s Current Account 24,750 By Interest on Partners’ Drawings
M’s Current Account 27,000 L’s Current Account 720
N’s Current Account 29,250 M’s Current Account 1,080
81,000 N’s Current Account 1,440
To Profit transferred to Partners’ Current 3,240
Accounts
L 1,448
M 2,172
N 3,620
7,240
88,240 88,240
4

Partners’ Capital Account

Date Particulars L M N Date Particulars L M N

2016 2016
Jul 1 To Bank Account 1,00,000 Apr 1 By Balance b/d 2,00,000 3,00,000 4,00,000
2017 Jul 1 By Bank Account 1,00,000
Mar 31 To Balance c/d 3,00,000 3,00,000 3,00,000
3,00,000 3,00,000 4,00,000 3,00,000 3,00,000 4,00,000
2
 14.

Solution: P P Limited

Journal

Date Particulars LF Dr. Amount Dr. Amount

(Rs.) (Rs.)
(a) Bank Account Dr. 47,000
(i) To 9% Debenture Application & Allotment A/C 47,000
(Application money received for 500 9%
Debentures )
(ii) 9% Debenture Application & Allotment A/C Dr. 47,000
Loss on issue of Debentures Account Dr. 7,500
To 9 % Debentures Account 50,000
To Premium on redemption Account 4,500
(Application money transferred to 9 %
Debentures account and recorded loss on issue
of debentures and premium on redemption)
(b)(i) Bank Account Dr. 12,00,000
To 9% Debenture Application & Allotment A/C 12,00,000
(Application money received for Rs. 10,00,000
9% Debentures )
(ii) 9% Debenture Application & Allotment A/C Dr. 12,00,000
Loss on issue of Debentures Account Dr. 1,00,000
To 9 % Debentures Account 10,00,000
To Securities Premium Account 2,00,000
To Premium on redemption Account 1,00,000
(Application money transferred to 9 %
Debentures account and Securities Premium
Reserve Account and recorded loss on issue of
debentures and premium on redemption)
(c) Bank Account Dr. 2,85,000
(i) To 8 % Debenture Application & Allotment A/C 2,85,000
(Application money received for 3,000 8%
Debentures )
(ii) 8% Debenture Application & Allotment A/C Dr. 2,85,000
Loss on issue of Debentures Account Dr. 30,000
To 8 % Debentures Account 3,00,000
To Premium on redemption Account 15,000
(Application money transferred to 8 %
Debentures account and recorded loss on issue
of debentures and premium on redemption)
6

15. Solution

Discount on Issue of 10 % Debentures Account

Date Particulars JF Amount Date Particulars JF Amount

(Rs) (Rs)
2013 2014
Apr 1 Mar 31
To 10 % Debentures 81,000 By Statement of Profit & Loss 27,000
A/C By Balance c/d 54,000
81,000 81,000
2014 2015
54,000 By Statement of Profit & Loss 27,000
Apr 1 Mar 31
To Balance b/d By Balance c/d 27,000
54,000 54,000

2015 2016
27,000 Mar 31
18,000
Apr 1 By Statement of Profit & Loss
To Balance b/d 9,000
By Balance c/d
27,000 27,000

2+2+2=6

16. Solution:

Journal

Date Particulars LF Dr. Amount Dr. Amount

(Rs.) (Rs.)
Bank Account Dr. 16,36,000
To Equity Share Application Account 16,36,000
(Application money received )
Equity Share Application Account Dr. 16,36,000
To Equity Share Capital Account 10,00,000
To Equity Share Allotment Account 5,03,500
To Bank Account 1,10,000
To Calls in Advance Account 22,500
(Application money transferred to Equity Share
Capital account, Equity Share Allotment account,
Calls in Advance account and remaining amount
refunded)
Equity Share Allotment Account Dr. 15,00,000
To Equity Share Capital Account 15,00,000
(Allotment money due on 5,00,000 equity shares
@ Rs. 3 each)
Bank Account Dr. 9,96,500
To Equity Share Allotment Account 9,96,500
(Net amount of Allotment money received)
Equity Share First Call Account Dr. 10,00,000
To Equity Share Capital Account 10,00,000
(First Call money due on 5,00,000 equity shares
@ Rs. 2 each)
Bank Account Dr. 9,97,000
Calls in Advance Account Dr. 3,000
To Equity Share First Call Account 10,00,000
(First call money received)
Equity Share Final Call Account Dr. 65,00,000
To Equity Share Capital Account 15,00,000
To Securities Premium Reserve Account 50,00,000
(Final Call money due on 5,00,000 equity shares
@ Rs. 13 each including premium of Rs. 10 each)
Bank Account Dr. 63,89,500
Calls in Advance Account Dr. 19,500
Call in Arrears Account Dr. 91,000
To Equity Share Final Call Account 65,00,000
(Final call money received)
Share Capital Account Dr. 70,000
Securities Premium Reserve Account Dr. 70,000
To Share Forfeiture Account 49,000
To Calls in Arrears Account 91,000
( Manohar’s Shares forfeited )
 Bank Account Dr. 70,000
To Share Capital Account 49,000
To Securities Premium Reserve Account 21,000
(Forfeited Shares of Manohar re-issued)
Share Forfeiture Account Dr. 49,000
To Capital Reserve Account 49,000
(Share forfeited account in respect of 400 shares
transferred to capital reserve account)
8

OR

(a) Share Forfeiture Account

Date Particulars JF Amount Date Particulars JF Amount

(Rs) (Rs)
To Share Capital Account 4,000 By Share Capital A/C 30,000
To Capital Reserve A/C 16,000
To Balance c/d 10,000
30,000 30,000
½ X 4 =2

(b) Journal

Date Particulars LF Dr. Amount Dr. Amount

(Rs.) (Rs.)
Share Capital Account Dr. 14,400
Securities Premium Reserve Account Dr. 3,600
To Share Forfeiture Account 14,400
To Calls in Arrears Account 3,600
( Shares forfeited )
Bank Account Dr. 6,000
Share Forfeiture Account Dr. 2,000
To Share Capital Account 8,000
( 400 Shares re-issued @ Rs. 15 each)
Share Forfeiture Account Dr. 6,000
To Capital Reserve Account 6,000
(Gain on re-issue of forfeited shares transferred
to capital reserve account)

Working Notes:

(i) Since the Shares are allotted in the proportion of 5 : 4, therefore for 900 applied shares,
shares allotted are 4/5 X 900 = 720 Shares.
(ii) Application Money Received on 900 Shares = 900 X 16 = 14,400
Amount adjusted on Application = 720 X 16 = 11,520
Amount to be adjusted on Allotment = 2,880
(iii) Allotment Money due on 720 Shares = 720 X 7 = 5,040
Less: Already received = 2,880
Allotment Money not received = 2,160
(iv) Calls in Arrears:
Allotment Money = 2,160
First & Final Call Money = 1,440
3,600

(1 mark for each correct Journal Entries and 1 mark for Working Notes)
(c) Journal

Date Particulars LF Dr. Amount Dr. Amount

(Rs.) (Rs.)
Bank Account Dr. 10,800
Share Forfeited Account Dr. 1,200
To Share Capital Account 12,000
(1,200 Shares re-issued for Rs. 10,800 as fully
paid up)
Share Forfeiture Account Dr. 7,200
To Capital Reserve Account 7,200
(Gain on re-issue of forfeited shares transferred
to capital reserve account)
1X2=2

17.

Solution: Revaluation Account

Particulars Amount Particulars Amount

(Rs.) (Rs.)
To Plant & Machinery 20,000 By Provision for Doubtful Debts 750
To Profit transferred to Partners’ Current By Land & Building 90,000
Accounts
A 35,375
B 21,225
C 14,150
70,750
90,750 90,750

Partners’ Current Accounts

Date Particulars A B C Date Particulars A B C

2017 To C’s Current Account 38,250 22,950 2017 By Revaluation Account 35,375 21,225 14,150
Mar 31 To Profit & Loss A/C 1,20,500 72,300 48,200 Mar 31 By A’s Current Account 38,250
To C’s Capital Account 42,150 By B’s Current Account 22,950
By General Reserve 37,500 22,500 15,000
By Balance c/d 85,875 51,525
1,58,750 95,250 90,350 1,58,750 95,250 90,350

Partners’ Capital Accounts

Date Particulars A B C Date Particulars A B C

2017 To Bank Account 35,500 2017 By Balance b/d 5,00,000 3,00,000 2,00,000
Mar 31 To C’s Loan Account 2,06,650 Mar 31 By C’s Current Account 42,150
To Balance c/d 5,00,000 3,00,000
5,00,000 3,00,000 2,42,150 5,00,000 3,00,000 2,42,150

Balance Sheet

as at March 31, 2017

Liabilities Amount Assets Amount

(Rs.) (Rs.)
Capitals: Bank 21,000
A 5,00,000 Stock 9,000
B 3,00,000 Debtors 15,000
8,00,000 Less: Provision for D. Debts 750 14,250
C’s Loan 2,06,650 Plant & Machinery 1,80,000
Creditors 23,000 Land & Building 6,90,000
Outstanding Salary 7,000 A’s Current Account 85,875
B’s Loan 15,000 B’s Current Account 51,525
10,51,650 10,51,650
8

OR

Journal

Date Particulars LF Dr. Amount (Rs.) Dr. Amount (Rs.)

C’s Loan Account Dr. 1,30,000
To C’s Capital Account 1,30,000
(C’s Loan account transferred to his capital
account)
Bank Account Dr. 17,500
To Premium for Goodwill Account 17,500
(New partner C brings in his share of
goodwill)
Premium for Goodwill Account Dr. 17,500
To P’s Capital Account 8,750
To K’s Capital Account 8,750
(Premium for Goodwill transferred to old
partners’ capital accounts in their sacrificing
ratio)
Revaluation Account Dr. 14,550
To Plant & Machinery Account 14,550
(Revaluation of Plant & Machinery on
admission of new partner)
Land & Building Account Dr. 28,000
To Revaluation Account 28,000
(Revaluation of Land & Building on admission
of new partner )
Revaluation Account Dr. 13,450
To P’s Capital Account 6,725
To K’s Capital Account 6,725
(Profit on revaluation transferred to partners’
capital accounts)
General Reserve Account Dr. 1,00,000
To P’s Capital Account 50,000
To K’s Capital Account 50,000
(General Reserve transferred to partners’
capital account)
Profit & Loss Account Dr. 45,000
To P’s Capital Account 22,500
To K’s Capital Account 22,500
(Profit & Loss account transferred to partners’
capital account)
P’s Capital Account Dr. 1,92,975
K’s Capital Account Dr. 92,975
To Bank Account 2,85,950
(Cash paid to P for adjustment of his capital)
 Part B

Option I

(Analysis of Financial Statements)

18. Solution: Any two of the followings: 1

(i) Royalties

(ii) Commission Received

(iii) Any other revenue receipts

19.

Solution: For P P Limited: Operating Activity ½

For G G Limited: Investing Activity ½

20.

Solution: (a)

S. No. Items Major Head Sub Head

(i) Securities Premium Reserve Shareholders’ Funds Reserves & Surplus
(ii) Calls in Advance Current Liabilities Other Current Liabilities
(iii) Stores & Spares Current Assets Inventory
3

(b) Any two of the following values: Transparency, Honesty, Abiding the Law. (Or any
other relevant value) 1

21.

Solution: Interest Coverage Ratio= Net Profit before Interest and Tax/ Interest on Long Term
Debts

Net Profit after Tax = Rs. 6,00,000 Tax Rate = 40 %

Net Profit before tax = 100/(100 – Tax) X Net Profit after tax

= 100/ 60 X 6,00,000 = 10,00,000

Interest Coverage Ratio= Net Profit before Interest and Tax / Interest on Long Term Debts 1

= 10,00,000 / 4,80,000 = 2.08 Times 1

Significance of Interest Coverage Ratio: It reveals the number of times Interest on Long Term
Debts is covered by the profits available. A higher ratio ensures safety of interest on Long
Term Debts. 1

The Interest coverage ratio will improve if the company decides to redeem Rs. 5,00,000
debentures assuming that Net Profit after interest and the tax rate will be same. 1
 22.

Solution: X L Limited

Comparative Statement of Profit & Loss

for the year ended March 31, 2016 and 2017

Particulars 2015-16 2016-17 Absolute % age

Amount Amount Change (Rs.) Change
(Rs.) (Rs.)
Revenue from Operations 50,00,000 80,00,000 30,00,000 60
Expenses:
(a) Employee Benefit Expenses: 10 % of Revenue from
Operations 5,00,000 8,00,000 3,00,000 60
(b) Other Expenses 10,00,000 12,00,000 2,00,000 20
Net Profit before Tax 35,00,000 60,00,000 25,00,000 71.43
Less: Tax 14,00,000 24,00,000 10,00,000 71.43
Net Profit after Tax 21,00,000 36,00,000 15,00,000 71.43
( 1 mark for each column) 4

23.

Solution: Ajanta Limited

Cash Flow Statement

for the year ended 31st March, 2014

Particulars Amount
(Rs.)
I – CASH FLOW FROM OPERATING ACTIVITIES
Surplus: Balance in the Statement of Profit & Loss
Adjustment for Non- Cash and Non-Operating Items 1,20,000
Depreciation 65,000
Loss on sale of Machinery 3,000
Interest on Debentures 28,800
96,800
Operating Profit before changes in working capital 2,16,800
Add: Decrease in Current Assets and Increase in Current Liabilities
Inventories 40,000
Outstanding Rent 20,000
Creditors 20,000 80,000

Less: Increase in Current Assets and Decrease in Current Liabilities

Bills Payable 80,000
2,16,800
Cash Flow from Operating Activities 2,16,800

II- CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Machinery (2,40,000)
Sale of Machinery 32,000
Purchase of Shares in XYZ Limited (80,000)
(2,88,000)
Cash Flow from Investing Activities (2,88,000)

III- CASH FLOW FROM FINANCING ACTIVITIES 80,000

Issue of 9 % Debentures (28,800)
Interest on Debentures 51,200

Cash Flow from Financing Activities 51,200

Net Cash Flow (20,000)
Add: Opening Balance of Cash and Cash Equivalents 80,000
Closing Balance of Cash and Cash Equivalents 60,000
2+1+1

Plant & Machinery Account

Particulars Amount Particulars Amount

(Rs.) (Rs.)
To Balance b/d 13,00,000 By Bank Account 32,000
To Bank Account 2,40,000 By Plant & Machinery Account 15,000
By Statement of Profit & Loss 3,000
By Balance c/d 14,90,000
15,40,000 15,40,000
1

Accumulated Depreciation Account

Particulars Amount Particulars Amount

(Rs.) (Rs.)
To Plant & Machinery Account 15,000 By Balance b/d 1,00,000
To Balance c/d 1,50,000 By Statement of Profit & Loss 65,000
1,65,000 1,65,000
1

PART – B

Option-II

Computerised Accounting

18. Sol: (c) 1

19. Sol: (b) 1

20. Sol: The computerized accounting is one the database-oriented applications wherein the
transaction data is stored in well-organized database. The user operates on such database using
the required interface and also takes the required reports by suitable transformations of stored
data into information. Therefore, the fundamentals of computerized accounting include all the
basic requirements of any database-oriented application in computers. 4

Accounting framework…………………………………………… [2]

It is the application environment of the computerized accounting. A healthy accounting

framework in terms of accounting principles, coding and grouping structure is a pre-condition
for any computerized accounting system.

Operating procedure…………………………………………........ [2]

A well-conceived and designed operating procedure blended with suitable operating
environment of the enterprise is necessary to work with the computerized accounting system.

21.

Sol: In computerized accounting system, every day business transactions are recorded with the
help of computer software. Logical scheme is applied for codification of account and
transaction. Every account and transaction is assigned a unique code. The grouping of accounts
is done from the first stage.

[Briefly explaining what is account groups and hierarchy of ledger.]

The hierarchy of ledger accounts is maintained and the data is transferred into Ledger accounts
automatically by the computer. In order to produce ledger accounts the stored transaction data
is processed to appear as classified so that same is presented in the form of report. The
preparation of financial statements is independent of producing the trial balance. 4

22. Sol: Internal manipulation of accounting records is much easier in computerized accounting
due to the following: 4
i. Defective logical sequence at the programming stage

ii. Prone to hacking

23.

Sol: Every accounting software ensures data security, safety and confidentiality. Therefore
every, software should provide for the following:

 Password Security: Password is a mechanism, which enables a user to access a system

including data. The system facilitates defining the user rights according to organization policy.
Consequently, a person in an organization may be given access to a particular set of a data
while he may be denied access to another set of data. 2

 Data Audit: This feature enables one to know as to who and what changes have been made in
the original data thereby helping and fixing the responsibility of the person who has
manipulated the data and also ensures data integrity. Basically, this feature is similar to Audit
Trial. 2

 Data Vault: Software provides additional security through data encryption. 2