Second Term EXAM – 2023-24

SUB Account

Name:-____________________ R.no_____ Std :- 12EC Marks:- 100 Date : / /24

Section – A
 Questions from 1 to 20 are objective types questions. Choose the correct
answer from the options given and write. Each question carries 1 mark : 20
1. What percentage of interest will be paid on the loan lent by the partner to the
firm, when no such provision is made in the partnership deed ?
(A) 6% (B) 9% (C) 12% (D) No interest
2. What is the interest on drawings of partners for a partner ?
(A) An expense (B) Liability (C) Income (D) Loss
3. Which of the following factor is not affected to the valuation of goodwill ?
(A) Efficiency of owners of the business (B) Place of business
(B) Special benefit of business (D) Place of customer
4. Total weighted average profit of a firm for last four years is ₹ 45,000. What is
the value of goodwill if it is calculated on the basis of weighted average profit
of last 2 years purchase ?
(A) ₹ 9,000 (B) ₹ 22,500 (C) ₹ 90,000 (D) ₹ 45,000
5. At the time of the reconstruction of a partnership firm, investments are shown
at …….. value in the balance-sheet after the revaluation.
(A) Book value (B) Cost value (C) Market value (D) Face value
6. Where are the effects given when the value of liabilities decrease at the time
of the reconstruction of a partnership firm ?
(A) Subtract from such liabilities and the revaluation account will be
credited.
(B) Subtract from such liabilities and the revaluation account will be
debited.
(C) Addition in such liabilities and the revaluation account will be credited.
(D) Addition in such liabilities and the revaluation account will be debited.
7. Revaluation account is …… type of account.
(A) Personal (B) nominal (C) real (D) temporary
8. Profit or loss of revaluation account is transferred to ….. account in …. ratio.
(A) old partners, equal
(B) all partners, new profit-loss sharing ratio
(C) old partners, sacrificing ratio
(D) old partners, old ratio
9. Goodwill shown in the balance sheet at the time of the retirement of a partner
is recorded as ……
(A) shown in new balance sheet, if decided by partners.
 (B) debit side of all partners’ capital accounts in their old profit – loss
sharing ratio.
(C) credit side of all partners’ capital accounts in their old profit-loss sharing
ratio.
(D) debit side of retiring partners’ capital account only.
10. What is the type of realization account ?
(A) Balance sheet (B) Personal (C) Real (D) Nominal
11. The closing balance of which of the following account is not taken to
Realization account on the date of dissolution of the firm ?
(A) Bad debts reserve account (B) Debtors account
(C) Investment account (D) Bank account
12. At what minimum price per share company can issue shares according to
current provisions of Companies Act ?
(A) ₹ 100 (B) ₹ 1000 (C) ₹ 1 (D) ₹ 0.50
13. As per SEBI guidelines, the minimum amount on each share called by
company on application must be at least ______ % of the issue price.
(A) 25 (B) 30 (C) 5 (D) 20
14. On which debentures interest coupons are given with debenture
certificate ?
(A) Registered debenture (B) Bearer debenture
(C) Convertible debenture (D) Permanent (fixed) debenture
15. The analysis of financial statements are done for decision making by
management s known as _______.
(A) Internal Analysis (B) External Analysis
(C) Long – term Analysis (D) Vertical Analysis
16. If the comparison of financial statements for different years is done then that
analysis is known as _______
(A) External Analysis (B) Time series Analysis
(C) Vertical Analysis (D) Internal Analysis
17. Liquidity ratio is ………..
(A) measurement of solvency
(B) measurement of short-term profitability
(C) measurement of profitability
(D) measurement of liquidity
18. Which of the following ratio is profitability ratio ?
(A) Liquid Ratio
(B) Stock turnover
(C) Operating ratio
(D) Working capital turnover
19. Which of the following transaction is not a operating transaction ?
(A) Written off Depreciation
(B) Written off Fictitious Assets
 (C) Written off Intangible Assets
(D) Proposed Dividend
20. Increased in current assets and decrease in current liabilities ….
(A) both are cash outflows
(B) both are cash inflows
(C) are cash outflow and cash inflow respectively
(D) are cash inflow and cash outflow respectively
Section – B
 Answer the following question from 21 to 30 in one sentence each.
Each question carries 1 marks: 10
21 Profit of a partner is credited to which account under fixed capital account
method ?
22. At which value assets-liabilities are shown in the balance sheet after
revaluation ?
23. Explain accounting treatment of old goodwill appearing in the balance sheet
of the firm at the time of the retirement of a partner.
24. In which type of partnership, dissolution of firm is done through notice ?
25. Why is realization account opened ?
26. What is meant by ‘Issue of debentures for consideration other than cash’ ?
27. In which forms ratios can by presented ?
28. What is shareholder’s funds ?
29. Where are the self-constructed assets recorded ?
30. In which activity the received dividend and interest are recorded ?
Section – C
 Answer the following 31 to 36 questions in short. Each question carries 3
marks : (Any four) 12
31. Ram. Rahim and Ishu are partners of a partnership firm. Their capital as on 1-
4-2022 was ₹ 60,000, ₹ 40,000 and ₹ 50,000 respectively. After the
distribution of the profit of the year, it was realized that charging of 6%
Interest on partners’ capital accounts was missed out. Write an entry for the
rectification of error.
32. Dipak, Nilesh and Pratik are the partners of a partners of a partnership firm.
Their profit-loss sharing ratio is 1 : 2 : 3, which is decided to change to 2 : 2: 1
respectively for future. Under these circumstances, calculate what gain is
Received by which partners ?
33. Explain methods of dissolution without the interference of court.
34. Write journal entries for the following transactions of firm in the case of firms
dissolution.
(1) Total assets of the firm at the time of dissolution is ₹ 4,00,000. Out of
which 40% are current assets (including cash ₹ 20,000). 120% realized for
fixed assets. While 80% are realized of current assts.
 (2) ₹ 40,000 are payable to Aman, but not recorded in th books. The
unrecorded asset of ₹ 20,000 is given to him and remaining amount is paid
By cheque.
(3) Due to which contingencies or happening partnership firm is automatically
dissolve ?
35. On 1-4-2023 Shiv Limited issued 8,000, 7.5% debentures of ₹ 250 each at a
discount of 5% All the debentures are to be redeemed after 5 years as on 31-
3-2028 at a premium of 10% Write the necessary journal journal entries in
the books of company (without narration).
36. Prakhar Limited issued 8000 7.5% convertible debentures of ₹ 200 each at per
as on 1-4-2023. As per the terms of debentures all the debentures will be
converted into shares 4 years and for this one equity share of ₹ 10 each will
be issued at a premium of 2.5% against each debenture.
As per the agreed terms all the debentures are converted into shares as on 1-
4-2028. Write necessary journal entries in the boos of company.
Section – D
 Give answer to the following 37 to 41 questions showing calculations
wherever necessary. Each question carries 4 marks: (Any Three) 12
37. From the following information of Amar and Akabar’s firm, determine the
value of goodwill of partnership firm on the basis of capitalization of weighted
average profit method. Additional information : (1) Business assets : ₹
6,00,000. (2) Business liabilities : ₹ 1,70,000. (3) Normal expected return of
business is 10%
Year 2018-19 2019-20 2020-21 2021-22 2022-23
Profit (₹) 45,000 50,000 65,000 75,000 90,000
38. From the following information of Mohan and Sohan’s, firm, determine the
value of goodwill on the basis of 3 years purchase of last five years weighted
average profit.
Year 2018-19 2019-20 2020-21 2021-22 2022-23
Profit (₹) 1,00,000 1,20,000 (40,000) 60,000 80,000
39. Profit and loss statement for the year ending on 31-3-2022 and 31-3-2023 of
Nirma Limited are given as follows. Prepare comparative statement of profit
and loss.
Particulars Note 31-3-2021 31-3-2020
No. (₹) (₹)
Sales revenue 60,75,000 45,00,000
Other income 7,00,000 10,00,000
Expenses :
Cost of goods consumed 36,00,000 30,00,000
Net purchase for resale 2,70,000 2,00,000
Changes in stock 90,000 70,000
Employee benefit expenses 5,60,000 4,00,000
 Financial cost 1,35,000 90,000
Depreciation and amortized amount 1,05,000 70,000
Income tax rate 30%

40. On the basis of details given below of Priya Limited. Calculate current ratio
and liquid ratio.
Particulars Amt. (₹) Particulars Amt. (₹)
Debtors 2,20,000 Furniture 1,20,000
Bills receivables 40,000 Bills payable 30,000
Bad debts reserve 10,000 Short term loan 1,40,000
Stock 40,000 Unpaid expenses 25,000
Cash and cash equivalent 60,000 Creditors 80,000
Machinery 1,50,000

41. From the following information calculate cash flow from operating activities:
Particulars 31-3-2023 (₹) 31-3-2022 (₹)
Profit and Loss A/c 60,000 25,000
General reserve 45,000 35,000
Taxation provision 38,000 48,000
Depreciation fund 42,000 32,000
Goodwill 27,000 38,000
Debtors 49,000 39,000
Creditors 39,000 29,000
Outstanding expenses 12,000 17,000
Prepaid expenses 14,000 10,000
(i) Profit on sale of assets ₹ 15,000
(ii) Loss on sale of furniture ₹ 8,000
(iii) Income of rent ₹ 48,000
(iv) Interest paid on debenture ₹ 32,000
(v) Dividend payment ₹ 10,000
Section – E
 Following 42 to 46 questions are essay type questions. 24
Each question carries 8 marks: (Any Three)
42. Parnita and Mayuri are the partners sharing profit and loss in the ratio of 2 : 1.
Balance sheet of their firm as on 31-3-2023 was as under :
Balance Sheet

Liabilities Amt. (₹) Assets Amt. (₹)

Capital Accounts : Goodwill 21,000
Parnita 91,000 Building 1,40,000
Mayuri 84,000 1,75,000 Furniture 28,000
Capital reserve 14,700 Stock 18,200
 Workmen saving account 7,000 Debtors 16,800
Workmen profit sharing fund 8,400 Cash 56,000
10% Loan from bank 35,000
Creditors 39,900
2,80,000 2,80,000
On 1-4-2023 they admitted Hetanshi as a new partner on the following
conditions :
(1)New profit and loss sharing ratio is to be kept at 3 : 4 : 2. (2) Hetanshi brings
₹ 40,000 as capital. (3) Interest on bank loan is outstanding for one year. (4)
Personal expense of Parnita paid by the firm is debited to the profit and loss
account ₹ 5,600. (5) Reconstruction expense is paid by Mayuri ₹ 8,400. (6)
Goodwill is valued at ₹ 90,000. (7) Parnita and Mayuri will maintain their
capital in the new firm in their new profit and loss sharing ratio by taking
Hetanshi’s capital as base. For this purpose necessary adjustments should by
made in partners’ current account.
Prepare necessary accounts and balance sheet after admission.
43. Ankita and Nikita are the partners sharing profit and loss in the ratio of 2 : 1.
Balance sheet of their firm as on 31-3-2023 was as under :
Balance sheet
Liabilities Amt (₹) Assets Amt. (₹)
Capital Accounts : Machinery 64,000
Ankita 64,000 Furniture 40,000
Nikita 32,000 96,000 Stock 13,600
General reserve 16,800 Debtors 40,000
Creditors 60,000 -Bad debt reserve 3,200 36,800
Bills payable 8,000 Cash-Bank 26,400
1,80,800 1,80,800

They admitted Archita as a new partner on 1-4-2023 on the following

conditions :
1 1
(1) Ankita sacrificed 12 th from her share and Nikita sacrificed 6 th from her
share in favour of Archita. (2) Archita is to bring proportionate capital. (3)
Archita is to bring her share of goodwill in cash. Goodwill of the firm is
valued at ₹ 90,000. (4) Fixed assets are to be depreciated by 10% (5) All
debtors are good. (6) Insurance premium of ₹ 2,400 out of ₹ 12,000 is to be
carried forward to next year.
Prepare necessary accounts and balance sheet after admission of Archita.
44. M,N and O are partners sharing profit and loss in the ratio of 5 : 3 : 2. Balance
sheet of their firm on 31-3-2023 was as under :
Balance sheet
Liabilities Amt (₹) Assets Amt. (₹)
Capital Accounts : Building 1,20,000
M 60,000 Machinery 80,000
N 30,000 Stock 30,000
O 50,000 1,40,000 Debtors 40,000
-Bad debt reserve 2,000 38,000
Reserve fund 50,000 Cash 22,000
Workmen profit sharing fund 30,000
Creditors 70,000
2,90,000 2,90,000
O retired on 31-3-2023. Conditions of retirement were as under
(1)O’s profit share will be gained by M and N in the ratio of 2 : 3. (2) Goodwill of
the firm is valued at ₹ 1,00,000. (3) Bad debt reserve on debtors is to be increased
by 10% (4) Building is valued at 110%. (5) Value of machinery is to be reduced by
10%. (6) Annual insurance premium of ₹ 24,000 is paid for the year ended on 30-
6-2023. (7) M and N will maintain total capital of the firm ₹ 1,00,000 in their new
profit and loss sharing ratio after retirement of O.
Prepare necessary accounts and Balance sheet after retirement.

45. Vikrant Metals Ltd. of Jamnagar issued 8,00,000 equity shares of ₹ 10 each at
a premium of ₹ 30 per share. The amount was payable as under : ₹ 13 (including
premium of ₹ 10) per share on application; ₹ 23 (including premium of ₹ 20) per
share on allotment; ₹ 4 per share on final call.Company received share application
for 8,00,000 shares and all applications were allotted shares. Vipul, who was
allotted 1,500 shares, did not pay money due on allotment and hence his shares
were forfeited bny company after allotment. Company reissued all these 1,500
shares before final call at₹ 5 per share. Hema, who was allotted 500 shares, did
not pay money due on final call and therefore her shares were forfeited by
company. Company reissued these 500 shares at maximum permissible discount.
Pass journal entries for above transactions in the books of company.
46. Mevada Agro Company of Vyara issued 5,00,000 equity shares of ₹ 10 each to
public. Company called ₹ 3 per share on application, ₹ 4 per share on allotment
and ₹ 3 per share on first and final call Company received application for 5,75,000
equity shares from public. Excess applications were rejected and money paid on
them was refunded. Viral, who had applied for 2,000 shares, had paid full amount
₹ 10 per share along with application Company had allotted him all the shares
applied for. Yagnesh, who was allotted 2,500 shares, had paid allotment and
Calls were duly received from time to time.
Pass necessary journal entries in the books of company for above transactions.
 Section – F

 Answer following 47 to 48 questions. Each question carries 11 marks : 22

47. From the Trial Balance and adjustments of partnership firm of Saif and
Kareena, prepare final accounts of partnership firm.

Trial Balance of partnership Firm of Saif and Kareena as on 31-3-2023

Particulars Debit Credit balance
balance (₹) (₹)
Capital Account : Saif - 1,60,000
Kareena - 1,20,000
Current Account : Saif 10,000 -
Kareena - 40,000
Stock of goods (31-3-2023) 54,600 -
Cash balance 560 -
Current account with bank 14,000 -
Fixed deposit of SBI 80,000 -
Debtors – creditors 36,800 24,000 -
Salary 37,000 -
Land-building 1,20,000 -
Plant-machinery 40,000 -
Furniture 10,000 -
Insurance premium 2,000 -
Leasehold machinery (from 1-4-2022 for 5 years) 60,000 -
Stationery and printing 1,200 -
Bad debts – bad debts reserve 400 2,000
Advertisement expense 1,200 -
Travelling expense 800 -
Trading A/c - 61,800
Loan of Kareena (from 1-10-2022) - 60,000
Discount reserve - 760
4,68,560 4,68,560

Adjustments : (1) Saif withdrew goods of ₹ 4,000 for personal use. It is not
recorded in the books. (2) Goods of ₹ 8,000 purchased at the end of the
accounting year, which is not recorded. (3) Prepaid insurance is ₹ 400. (4) From
debtors ₹ 800 is not recoverable. Provide 5% bad debts reserve on debtors. (5)
Discount reserve on debtors is not required. (6) Provide depreciation on plant -
Machinery at 20% and on furniture at 5%.
48. Following is the trial balance of Parth Ltd. as on 31-3-2023 :

Particulars Debit Credit

balance balance
(₹) (₹)
Sales 11,25,000
Employee benefit expenses 1,95,000
Inventories 1,65,000
Finance costs 26,250
Security premium 60,000
Fixed assets – tangible 12,00,000
Trade payables 90,000
Equity share capital 7,50,000
Trade receivables 60,000
Other income 30,000
Long-term borrowings 5,25,000
Cash and bank balance 90,000
Depreciation 33,750
Cost of goods sold 6,00,000
Non-current investments 2,10,000
25,80,000 25,80,000