DELHI PUBLIC SCHOOL, JODHPUR

Half Yearly Examination (2015 - 16)

Subject – Accountancy
Class – XII
Time: 3 hours M.M. 80
General Instructions :–
i. ) Please check that this question paper contains 5 printed pages.
ii. ) Please check that this question paper contains 23 questions.
iii. ) All parts of questions should be attempted at one place.
iv. ) Please write down the serial number of the question before attempting it.
v. ) All questions are compulsory.

1. State the difference between fixed and fluctuating capital on the basis of change in balance. [1]

2. A and B are partners in a firm with equal share in profit and capital being contributed equally. They [1]
have a Partnership Deed which does not specify allowing interest on capital. B has introduced
additional capital of ` 5,00,000. B is of the view that the firm should allow interest on additional
capital @ 10%., being the rate of interest for borrowings from the Bank. A objects to it on the ground
that the Partnership Deed does not provide for it. Thus, no interest was allowed on additional capital.
What value has been ignored in this case?
3. Why goodwill is considered an ‘Intangible Asset’ but not a ‘Fictitious Asset’? [1]

4. If a partner withdrew ` 6,000 at the mid of the every quarter but except last quarter than calculate [1]
interest on drawings @ 6% p.a. at the end of the accounting year.
5. State difference between Sacrifice Ratio and Gain Ratio on the basis of purpose of calculation. [1]

6. A and B are partner sharing profit or losses in the ratio of 7:5. They admit C who acquired [1]
1/4th of his share from A and 3/24 from B. Calculate new profit sharing ratio.
7. Mention the order in which the proceeds from the sale of Assets are utilized at the time of [1]
dissolution of partnership firm.
8. What do you mean by Reserve Capital? [1]

9. A partnership firm has earned profit during the year 2015 ` 70,000 which includes profit on sale [3]
of fixed asset ` 10,000. The capital investment of the firm is ` 4,00,000. A fair return on capital in
the market is 10%. Calculate the value of goodwill on the basis of capitalisation of average profit.
10. A and B are partners sharing profit or loss in the ratio of 3:1. They admit C for 1/5 th share and [3]
decide to share future profit equally. He will bring Cash ` 4,50,000 and Furniture ` 1,50,000
for goodwill. Give journal entries.
11. X, Y and Z were partners in a firm. On 1 st May, 2012 X died and his capital account showed a [3]
balance of ` 90,000 after all adjustment. It was decided that Rs 10,000 be paid to his executor
in cash immediately and balance in two equal half yearly installment with interest @12% p.a.
Prepare X’s executor account till it is finally closed if books are closed on 31st December.
12. X and Y were partners in a firm. They agreed to dissolve the firm on December 31, 2014. On [3]
that date, the capitals of X and Y were ` 3,00,000 and ` 2,00,000 respectively. The amount
owed by X to the firm was ` 30,000 and the creditors amounted to ` 40,000 and bank balance
` 5,000. The assets were sold in cash at ` 4,50,000. Realisation expenses amounted to
` 10,000. Prepare Realisation Account.
13. A and B are partners sharing profit in the ratio of 3:2. On 1 January 2014 their Capitals were ` [3]
4,00,000 and ` 3,00,000 respectively on which they are entitled to get interest @ 10% p.a. On
1 April, 2014 they take C into partnership with 1/5th share of profits and guaranteed that his
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 share of profits for a year will not be less than ` 1,20,000. C brought ` 2,00,000 as his capital.
Any excess profits received by C over his 1/5th share will be borne by A and B equally. Profits at
the end of the year before allowing interest on capitals amounted to ` 3,35,000.
Show the distribution of profit and give a journal entry for adjustment of deficiency.

14. Pass Journal entries for the following transactions on dissolution in the books of the firm, [4]
where A and B were sharing profits and losses in the ratio of 3:2, assuming that assets and
third party liabilities have been transferred to Realisation A/c.
i) X’s loan of ` 40,000 was settled at ` 35,000.
ii) Realisation expenses paid by the firm amounted to ` 20,000 out of which 30% is to be
borne by A.
iii) Rakesh, a creditor, to whom ` 1,00,000 were due, took over a Machine of ` 70,000 at
` 90,000 and balance was paid to him in cash.
iv) An unrecorded liability amounting to ` 20,000 was settled at ` 8,000.
15. A, B and C are partners sharing profits in the ratio of 3:2:3. On April 1, 2014, they decided [4]
to share the profit equally. On that date there was a debit balance of ` 2,40,000 in their profit
and loss account and a balance of `60,000 in General reserve. Goodwill of the firm is valued
at ` 1,20,000. Record the necessary journal entries in the books of firm. The partners decided
not to distribute the profits and losses.
16. Sagar Ltd. was registered with an authorized capital of ` 2,00,00,000 divided into 10,00,000. [4]
Equity shares of ` 10 each and 1,00,000 12%. Preference Shares of ` 100 each. The
company offered for public subscription 1,00,000 Equity shares. Applications for 90,000
shares were received and allotment was made to all the applicants. All the calls were made
and were duly received except the second and final call of ` 2 per share on 700 shares, out of
which 500 shares were forfeited.
Show how the Share Capital will be shown in the Balance Sheet of the company. Also
prepare notes to accounts for the same
17. X Ltd., forfeited 8000 shares of ` 10 each, ` 8 called-up held by Aayush for non- payment [4]
of allotment money of ` 5 per share (including premium ` 1) and first call money ` 2 per
share. Out of these, 5000 shares were reissued at ` 7 per share as ` 8 called up. Give Journal
entries for forfeiture and reissue.
18. X and Y are partners sharing profits and losses in the ratio of 2:3. They employed Z as their [4]
manager to whom they paid an annual salary of ` 15,000. Z deposited ` 60,000 on which
interest was payable @ 10 % p.a. At the end of 2014 (after the division of the year’s profit) it
was decided that Z should be treated as partner with effect from 1 st January 2011 with 1/5
share in profit, his deposit being considered as capital, carrying interest @ 5 % p.a. like
capitals of other partners (treated as charge). He will be given annual salary of ` 5,000. The
firm’s profit and losses after allowing interest on capitals were as follows:-
2011- Loss ` 30,000; 2012 - Profit ` 65,000; 2013 - Profit ` 75,000; 2014 - Profit ` 90,000.
Record the necessary journal entries to give the effect to the above agreement and identify the
value involve in it.
19. A, B and C are partners in a firm sharing profits and losses in the ratio of 5:3:2. C died on 31 st [ 4]
December, 2014. A and B decided to dissolve the firm on 31 st December, 2014 so that amount
can be paid to C’s executor. On that date their Balance Sheet was as under : –
Balance Sheet
Liabilities (`) Assets (`)
Creditors 50,000 Cash at Bank 40,000
Employees Provident Fund 60,000 Debtors 66,000
B’s Loan 40,000 Less: Provision 6,000 60,000
Investments Fluctuation Fund 30,000 Stock 50,000
Depreciation Reserve 20,000 Investments 80,000
Capital : Furniture 70,000

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 A 1,00,000 Business Premises 1,20,000
B 80,000 Goodwill 30,000
C 70,000 2,50,000
4,50,000 4,50,000
Partners agreed to dissolve the firm on that date on following terms : –
i) B agreed to take investments at 20% less.
ii) Debtors of ` 16,000 were taken by A at ` 10,000.
iii) Furniture of Rs 10,000 was taken by a creditor at ` 8,000.
iv) Amount realized from Business Premises at 50% more, remaining Debtors realized at full, Stock
at ` 30,000, and remaining Furniture at a loss of ` 20,000.
v) Realisation expenses were ` 5,000.
vi) A Bill Receivable for ` 10,000 under discount was dishonored as the acceptor became insolvent
and only 40 paisa in rupee realised from him.
Prepare Realisation Account and identify the valued involved in it.
20. A, B and C are partners in a firm sharing profits and losses in the ratio of 5:3:2. [4]
Their Balance Sheet on 31st December, 2014 was as follows:
Liabilities ` Assets `
Trade Creditors 20,000 Cash at Bank 40,000
Provision for Doubtful Debts 10,000 Debtors 50,000
Employees Provident Fund 10,000 Stock 30,000
Reserve Fund 20,000 Investments 20,000
Capital Plant & Machinery 40,000
A 35,000 Goodwill 10,000
B 50,000 Profit & Loss A/c 10,000
C 55,000 1,40,000
2,00,000 2,00,000
st
A died on 31 March, 2015. The Partnership Deed provided for the following on the death of
a partner:
Goodwill of the firm was to be valued at 2 years purchase of the average profits of last four
years. The profits for the years ended on 31 st December 2013, 31st December, 2012 and 31st
December, 2011 were ` 60,000; ` 80,000 and ` 30,000 respectively.
(i) A’s share of profit/loss till the date of his death was to be calculated on the basis of the last
year’s profit/loss.
(ii) Interest on Capital was to be allowed @ 10% p.a.
(iii) Provision for doubtful debts is not required now.
(iv) Depreciate Plant and Machinery by 10% and stock is to be valued at ` 20,000.
(v) A sum of ` 10,000 was paid immediately to A’s Executors.
Prepare A’s Capital Account and A’s Executor’s Account.
21. On 31st December, 2014 the Balance Sheet of R, S and T who were sharing profits and losses [ 6 ]
in proportion to their capitals stood as follows : –
Liabilities (`) Assets (`)
Bills payable 10,000 Cash at Bank 15,000
Creditors 25,000 Debtors 35,000
Workmen Compensation Fund 10,000 Less : Provision 5,000 30,000
Reserve Fund 15,000 Stock 15,000
Current Accounts R 10,000 Machinery 55,000
S 15,000 Building 65,000
T 5,000 30,000 Goodwill 10,000
Capital : R 50,000
S 30,000
T 20,000 1,00,000
1,90,000 1,90,000
st
R retired on 1 January, 2015 on following conditions :
i) Machinery was overvalued by 10% and Building was undervalued by ` 15,000.
ii) Provision for bad debts is to be maintained at 10%.
iii) The liability regarding workmen compensation is determined at ` 16,500.
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 iv) Goodwill of the firm is valued at ` 1,00,000.
v) R was to be paid through cash, brought in by S and T, in such a way as to make their capitals in
the ratio of 4:1 and Bank Balance (Cr.) should be at ` 5,000.
Give Journal entries at the time of retirement of R.
22. Suhani Ltd. has been registered with an authorized capital of ` 40,00,000 divided into 40,000 [ 8 ]
shares of `100 each. Out of which, 20,000 shares were offered for public subscription at a
premium of ` 10 per share, payable on application ` 30 per share, on allotment ` 50 per share
(including premium) and balance on first & final call equally.
Applications were received for 60,000 shares and allotment was made as follows : ––
i) To the applicants of 15,000 shares : 10,000 shares
ii) To the applicants of 30,000 shares : 10,000 shares
iii) Remaining applications were rejected.
Excess amount paid on application is to be adjusted against amount due on allotment and
calls.
Rahul who had applied 3,000 shares in group (i) failed to pay allotment and calls money and
his shares were forfeited. Out of forfeited, 600 shares were reissued at ` 80 per share as fully
paid.
Give Journal entries in the books of Suhani Ltd.
OR
Vasudha Ltd. was registered with an authorised capital of ` 50,00,000 in ` 100 per share.
40,000 shares were issued for public subscription and 45,000 shares were subscribed by the
public out of which 5,000 were rejected. During the first year ` 80 per share were called,
payable ` 20 on application, ` 30 on allotment, ` 20 on first call and ` 10 on second call. The
amount received in respect of these were as follows : –
On 30,000 shares the full amount called
On 3,000 shares ` 70 per share
On 2,000 shares ` 50 per share
On 5,000 shares ` 20 per share
Directors forfeited those shares on which less than ` 50 per share have been paid. Out of
forfeited, 4,000 shares were reissued at ` 80 paid up for ` 90 per shares.
Give Journal Entries in the books of company.
23. A and B are partners sharing profit or losses in proportion to their capitals. Their Balance [ 8 ]
Sheet as at 31st December, 2014 was as follows :–
Balance Sheet
Liabilities ` Assets `
Creditors 20,000 Cash at Bank 15,000
Investments Fluctuation Fund 20,000 Debtors 30,000
Reserve Fund 10,000 Less: Provision 5,000 25,000
Employees Provident Fund 20,000 Stock 40,000
Capital Investments 30,000
A 90,000 Machinery 80,000
B 60,000 1,50,000 Goodwill 10,000
Advertisement Suspense A/c 20,000
2,20,000 2,20,000
On this date C is admitted as a partner on the following terms :
(i) C brings ` 40,000 as capital for his 1/5 share in profit which he acquires equally from A and B.
(ii) Goodwill of the firm is valued at ` 50,000.
(iii) 20% of the reserve Fund is to be kept for provision for bad debts.
(iv) Stock was undervalued by 20% and investments were valued at ` 50,000 which were taken by A and B
in their profit sharing ratio.
(v) Machinery is to be depreciated to 90%.
(vi) Creditors include a contingent liability of Rs. 10,000, which has been decided by the court at ` 8,000.
(vii) The capital of the firm is to be adjusted on the basis of C’s capital by opening current accounts.
Prepare Revaluation Account, Partner’s Capital Accounts and Balance Sheet after admission.
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 OR
X and Y are partner sharing profit 3:2. Their Balance Sheet on 31st December, 2014 was as follows:

Liabilities ` Assets `
Creditors 35,000 Cash 20,000
Provision for doubtful debts 5,000 Debtors 25,000
General Reserve 20,000 Stock 20,000
Workmen compensation fund 10,000 Furniture 40,000
Capital Machinery 50,000
X 40,000 Goodwill 10,000
Y 60,000 1,00,000 Investments 5,000
1,70,000 1,70,000
Z is admitted into partnership on the following terms on 1st January, 2015.
(i) Z brings proportionate capital and 1/4th of his share of goodwill in cash.
(ii) Investments were taken by X at ` 8,000 and stock is overvalued by 25%.
(iii) Bad debts to be written off ` 2,000 and Provision for bad debts should be maintained at 0%.
(iv) Furniture is to be appreciated to 125% and Machinery is to be depreciated by 25%.
(v) Goodwill of the firm is valued at ` 80,000.
Prepare Revaluation A/c, Partners’ capital accounts and Balance Sheet after admission if they
decide to share future profit in the ratio of 5:3:2.
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