CBSE XII | Accountancy

All India Board Paper Set 1 – 2019 Solution

CBSE
Class XII Accountancy
All India Board Paper Set 1– 2019 Solution

SECTION A

1. Answer :
Journal
Date Particulars L.F. Debit (`) Credit (`)
Partner’s Capital A/c …Dr.
To Partner’s Loan A/c
(Being balance in Partner’s Loan
transferred to Partner’s Capital in the
event of dissolution of the firm)

2. Answer :
When a partner is newly admitted into the partnership, the new partner gets the
following rights:
i. Right to share the future profits of the firm, and
ii. Right to share in the assets of the firm
OR
When the nature of the business is such that there is high demand for the product, then the
profits will be high and therefore a good value for goodwill.

3. Answer :
Not for Profit Organisations are set-up with general or specific objectives of rendering services
and enhancing the welfare of general or a particular group of people.
OR
‘Life membership fee’ is accounted as a Capital Receipt and therefore, added to Capital Fund on
the liabilities side of the Balance Sheet.

4. Answer :
Kiran’s share in Goodwill Premium = ` 24, 000 and such Goodwill is to be credited to the
sacrificing partners in the sacrificing ratio.
Therefore,
Kiya’s Share = ` 18, 000
Leela’s Share = ` 6, 000
Calculation of Sacrificing Ratio:
Kiya’s Sactifice  3  1  3
4 5 20
1 1 1
Leela's Sacrifice =  =
4 5 20

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All India Board Paper Set 1 – 2019 Solution

Therefore,
1 4 4
Kiran's New Share =  
5 4 20
3 3
Kiya’s New Share    12  3  9
5 20 20 20
2 1 81 7
Leela's New Share =  = =
5 20 20 20
From the above, New Profit Sharing Ratio between Kiya, Leela and Kiran is 9:7:4

5. Answer :
Profit = Sales  Percentage of Profit on Sales
Therefore,
Profit till June 2017 = Sales till June 2017  10%
Profit till June 2017 = 6,00,000  10%
Profit = 60,000
2
Therefore, Navita's Share in Profit = 60,000   20,000
6

6. Answer :
As per Section 42 of the Companies Act, 2013, Private Placement means any offer of the
securities or invitation to subscribe securities to a select group of persons by a company (other
than by way of public offer) through issue of private placement offer letter and which satisfies
the conditions specified in this section.
OR
Reserve Capital is a part of Subscribed Capital remaining uncalled that a company resolves, by a
Special Resolution, not to call except in the event of winding up of the company. Such number of
shares are shown as “Subscribed but not fully paid-up”.

7. Answer :
Goodwill of the firm = Super Profit  Number of Years Purchase
Using the information given,
1,00,000 = Super Profit  4
1,00,000
Super Profit =  25,000
4

Super Profit = Average Profit - Normal Profit

25,000 = 80,000 - Normal Profit
Normal Profit = 55,000

Also, Normal Profit = Capital Employed  Normal Rate of Return

Therefore,
100
Capital Employed by the firm = 55,000   5,50,000
10

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 CBSE XII | Accountancy

All India Board Paper Set 1 – 2019 Solution

8. Answer :
In the Books of UZ Ltd.
Journal
Date Particulars L.F. Debit (`) Credit (`)
Plant and Machinery A/c …Dr. 6,90,000
To Elk Machine Ltd. 6,90,000
(Being asset purchased on credit from Elk
Machine Ltd. recorded in the books)
Elk Machine Ltd. …Dr. 6,90,000
Discount on Issue of Debentures A/c …Dr. 1,50,000
To 6% Debentures A/c 7,50,000
To Bills Payable A/c 90,000
(Being vendor paid for asset, partly through
draft and balance by issuing debentures at
discount)

Workings:
i. Computation of number of debentures issued for asset purchased:
Purchase Consideration - Draft
Number of Debentures =
Face Value - Discount
6,90,000  90,000
Number of Debentures =
100 20
Therefore,
Number of Debentures  7,500 Debentures
OR

In the Books of ZK Ltd.

Journal
Date Particulars L.F. Debit (`) Credit (`)
Bank A/c …Dr. 3,80,000
To Debenture Application & Allotment A/c 3,80,000
(Being application money received from
debenture holders @5% discount)
Debenture Application & Allotment A/c …Dr. 3,80,000
Discount on Issue of Debentures A/c …Dr. 20,000
Loss on Issue of Debentures A/c …Dr. 40,000
To 9% Debentures A/c 4,00,000
To Premium on Redemption of Debentures A/c 40,000
(Being 9% Debentures issued @5% discount and
repayable at 10% premium)

9. Answer :
In the Books of Willow Ltd.
Balance Sheet as at 31st March, 2018 (Extract)
Particulars Note No. (`)
EQUITY & LIABILITIES
1. Shareholder’s Funds
(a) Share Capital 1 7,44,000
7,44,000

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 CBSE XII | Accountancy

All India Board Paper Set 1 – 2019 Solution

Notes to Accounts
Note Particulars (`)
No.
1 Share Capital
Authorised Capital
1,00,000 Equity Shares of Rs.10 each 10,00,000
Issued Capital
80,000 Equity Shares of Rs.10 each
Subscribed Capital 8,00,000
Subscribed and fully paid up
72,000 Shares of Rs.10 each 7,20,000
Subscribed but not fully paid up
3,000 Shares of Rs.10 each 30,000
Less: Calls in arrears (3000 × 2) (6,000) 24,000
7,44,000

10. Answer :
Subscriptions received during the year 2017-18
Particulars Amount
(`)
Subscription due for 2017-18 (1,250 × 150) 1,87,500
Add: Outstanding at the beginning of the year 15,000
Less: Advance at the beginning of the year (3,000)
Less: Outstanding at the end of the year (45 × 150) (6,750)
Add: Advance at the end of the year (46 × 150) 6,900
Total amount of Subscriptions to be debited to the Receipts and Payments A/c 1,99,650

11. Answer :
In the books of Hari, Kunal & Uma
Journal
Date Particulars L.F. Debit (`) Credit (`)
Profit & Loss A/c …Dr. 75,000
To Hari’s Capital A/c 37,500
To Kunal’s Capital A/c 22,500
To Uma’s Capital A/c 15,000
(Being accumulated profit distributed in the old
profit sharing ratio of the partners)
Kunal’s Capital A/c …Dr. 60,000
Uma’s Capital A/c …Dr. 30,000
To Hari’s Capital A/c 90,000
(Being adjustment made for goodwill through
partners’ capital account)
Investment Fluctuation Fund A/c ...Dr. 15,000
To Investments A/c 15,000
(Being Investments brought down to their market
value)

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All India Board Paper Set 1 – 2019 Solution

Revaluation A/c …Dr. 5,000

To Stock A/c 5,000
(Being depreciation in stock recorded in the
Revaluation Account)
Hari’s Capital A/c …Dr. 2,500
Kunal’s Capital A/c …Dr. 1,500
Uma’s Capital A/c …Dr. 1,000
To Revaluation A/c 5,000
(Being loss on revaluation distributed among the
partners in their old profit sharing ratio)

12. Answer :
In the books of Meera, Sarthak and Rohit
Dr. Sarthak’s Capital Account Cr.
Date Particulars (`) Date Particulars (`)
2018 2018
June 15 To Sarthak’s 6,58,750 Apr. By Balance b/d 3,50,000
Executor’s A/c 01 By Contingency Reserve 40,000
By Meera’s Capital A/c 1,60,000
By Rohit’s Capital A/c 80,000
By Profit & Loss Suspense A/c 20,000
By Interest on Capital Account 8,750
6,58,750 6,58,750

Working Notes:
i. Calculation of Goodwill:
Goodwill of the firm = Average Profit  No. of years purchase, where
2, 20, 000  2, 60, 000  2, 00, 000  1, 20, 000  8, 00, 000 = 2,00,000
Average Profit = 
4 4
Therefore,
Goodwill of the firm = 2,00,000  3 = 6,00,000
2
Sarthak's Share of Goodwill = 6,00,000   2, 40, 000
5
2
Sarthak's Share to be given by Meera = 2,40,000   1, 60, 000
3
 1
Sarthak's Share to be given by Rohit = 2,40,000   80, 000
3
ii. Calculation of Profit till the date of death:
2, 20, 000 + 2,60,000  4, 80, 000 = 2,40,000
Average Profit = 
2 2
2.5
Profit till date of death = 2,40,000  = 50,000
12
 2
Sarthak's Share in Profit = 50,000   20,000
5
iii. Calculation of Interest on Capital:

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 CBSE XII | Accountancy

All India Board Paper Set 1 – 2019 Solution

12 2.5
Interest on Capital = 3,50,000    8,750
100 12

13. Answer :
Books of Gems Club
Dr. Income and Expenditure Account for the year ended 31st March, 2018 Cr.
Expenditure Amount Income Amount
To Salaries 72,500 By Interest on Investment 2,400
To Miscellaneous Expenses 52,000 Add: Accrued Interest 1,600 4,000
To Telephone Charges 12,000 By Donations 17,000
To Printing and Stationery 16,000 By Subscriptions 3,05,000
To Surplus transferred to Capital 2,46, 100 By Rent 72,000
Fund By Sale of Old Newspapers 600
3,98,600 3,98,600
Working Notes:
i. Subscription for current year 2017-18:
Subscription during the year  Total Received - Advance Received  Outs tan ding at the end
Subscription during the year  3, 00, 000 - 15, 000  20, 000
Subscription during the year  3, 05, 000

ii. Salaries for current year 2017-18:

Salary during the year = Paid during the year + Outstanding at the end
Salary during the year = 64,500 + 8,000
Salary during the year =72,500

iii. Rent for current year 2017-18:

Rent for the current year  Rent Received Rent Receivable
Rent for the current year  70, 000  2, 000
Rent for the current year  72, 000

iv. Printing and Stationery for current year 2017-18:

Printing and Stationery for the current year = Opening Stock + Amount Paid - Closing Stock
Printing and Stationery for the current year = 12,000 + 19,000 - 15,000
Printing and Stationery for the current year = 16,000

14. Answer :
In the books of the firm
Dr. Realisation Account Cr.
Particulars Amount Particulars Amount
To Stock 24,000 By Trade Creditors 42,000
To Debtors 19,000 By Employees Provident Fund 60,000
To Furniture 40,000 By Mrs. Ashish’s Loan A/c 9,000
To Plant 2,10,000 By Investment Fluctuations 4,000
To Bank 60,000 Reserve
To Investments 32,000 By Bank 18,500

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 CBSE XII | Accountancy

All India Board Paper Set 1 – 2019 Solution

To Kanav’s Capital 12,000 By Bank 2,31,000

To Ashish’s Capital 9,000 By Bank 15,840
To Profit transferred to: By Ashish’s Capital 38,000
Ashish’s Capital A/c 12,012 By Kanav’s Capital 7,680
Kanav’s Capital A/c 8,008 20,020
4,26,020 4,26,020
Note: It is to be noted that since there is no Claim for Workmen Compensation, the entire
amount in the Workmen Compensation Fund would be credited to the Partner’s Capital
Account.

15. Answer:
Statement for Past Adjustments
Particulars Naveen Qadir Rajesh
Dr. Cr. Dr. Cr. Dr. Cr.
31st March , 2017
Interest on Capital 24,000 - 21,600 - 14,400 -
Salary - 14,000 - 16,000 - -
(3,500×4) (4,000 x 4)
Excess Dr. Now Cr. - 15,000 - 10,000 - 5,000
in 3 : 2 : 1
31st March , 2018
Interest on Capital 24,000 - 21,600 - 14,400 -
Salary - 14,000 - 16,000 - -
Excess Dr. Now Cr. - 15,000 - 9,000 - 6,000
in 5 : 3 : 2
Total of Each 48,000 58,000 43,200 51,000 28,800 11,000
Column
10,000 7,800 17,800
(Cr.) (Cr.) (Dr.)

JOURNAL
Date Particular Dr. (`) Cr. (`)
2018 Rajesh’s Current A/c. Dr. 17,800
Apr. 1 To Naveen’s Current A/c. 10,000
To Qadir’s Current A/c. 7,800
(Being partners’ current accounts adjusted for
past adjustments)

OR

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 CBSE XII | Accountancy

All India Board Paper Set 1 – 2019 Solution

Statement for calculating Opening Capital

Particulars Abhir (`) Bobby (`) Vineet (`)
Closing Capital (31st March , 2018) 8,00,000 6,00,000 4,00,000
Add : Drawings 2,40,000 1,00,000 1,40,000
(20,000 × 12) (50,000 × 2)
10,40,000 7,00,000 5,00,000
Less : Profit (` 1,50,000) (2 : 2 : 1) 60,000 60,000 30,000
Opening Capital 9,80,000 6,40,000 4,70,000
Interest on Capital @ 10 % Per Annum 98,000 64,000 47,000

Statement for Past Adjustments

Particulars Abhir Bobby Vineet

Dr. Cr. Dr. Cr. Dr. Cr.
Interest on Capital –– 76,712 –– 50,098 –– 36,790
Interest on Drawings 6,600 –– 4,500 –– 2,500 ––
Reversal of Profit 60,000 –– 60,000 –– 30,000 ––
Total of Each Column 66,600 76,712 64,500 50,098 32,500 36,790
10,112 14,402 4,290
(Cr.) (Dr.) (Cr.)

JOURNAL
Date Particular Dr. (`) Cr. (`)

2018 Bobby’s Capital A/c. Dr. 14,402

10,112
Apr. 1 To Abhir’s Capital A/c.
To Vineet’s Capital A/c. 4,290
(Being past adjustments made through partners’
capital accounts)

16. Answer:
2, 00,000 Equity Shares of `10 each; Premium `20 per share
Issue Price = ` 10 + ` 20 = ` 30
– Application `2
– Allotment `13 (` 3 + ` 10)
– First Call `7 (` 2 + ` 5)
– Final Call `8 (` 3 + ` 5)
` 30

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 CBSE XII | Accountancy

All India Board Paper Set 1 – 2019 Solution

In the books of Denspar Ltd.

Journal

Date Particular Dr. (`) Cr. (`)

Bank A/c Dr. 3,60,000
To Equity Share Application A/c 3,60,000
(1,80,000 × ` 2)
Equity Share Application A/c Dr. 3,60,000
To Equity Share Capital A/c 3,60,000

Equity Share Allotment A/c Dr. 23,40,000

To Equity Share Capital A/c 5,40,000
(1,80,000 × ` 3)
To Securities Premium Reserve A/c 18,00,000
(1,80,000 × ` 10)
Bank A/c. Dr. 23,24,000
To Equity Share Allotment A/c 22,49,000
[`23,40,000 – `91,000 (7,000 × `13)]
75,000
To Calls in Advance A/c
I Call = 5,000 × 7 = 35,000
II Call = 5,000 × 8 = 40,000
Equity Share First Call A/c Dr. 12,60,000
To Equity Share Capital A/c 3,60,000
(1,80,000 × ` 2)
To Securities Premium Reserve A/c 9,00,000
(1,80,000 × ` 5)
Bank A/c Dr. 13, 16,000
Calls in Advance A/c (7 × 5,000) 35,000
To Equity Share First Call A/c 12,60,000
To Calls in Arrear A/c 91,000
Equity Share Second & Final Call A/c Dr. 14,40,000
To Equity Share Capital A/c 5,40,000
To Securities Premium A/c 9,00,000
Bank A/c Dr. 13,84,000
Calls in Arrears A/c 16,000
Calls in Advance A/c 40,000
To Equity Share Second & Final Call A/c 14,40,000
Share Capital A/c Dr. 20,000
Securities Premium A/c Dr. 10,000
To Share Forfeiture A/c 14,000
To Calls in Arrears A/c 16,000
Bank A/c Dr. 12,000
Share Forfeiture A/c Dr. 3,000

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 CBSE XII | Accountancy

All India Board Paper Set 1 – 2019 Solution

To Share Capital A/c 15,000

Share Forfeiture A/c Dr. 7,500

To Capital Reserve A/c 7,500

OR

– Application `3 Per Share (2 + 1)

– Allotment ` 4 Per Share (3 + 1)
– First Call ` 3 Per Share
– Second and Final Call ` 2 Per Share
TOTAL ` 12 per share

In the books of KLN Ltd.

Journal
Date Particulars Dr. (`) Cr. (`)
Bank A/c. Dr. 5,70,000
To Equity Share Application A/c. 5,70,000
(1,90,000 × `3)
Equity Share Application A/c. Dr. 5,70,000
To Equity Share Capital A/c. 2,00,000
(1,00,000 × `2)
To Securities Premium Reserve A/c. 1,00,000
(1,00,000 × `1)
To Equity Share Allotment A/c. 1,50,000
(Cat. I `30,000 + Cat. II `1,20,000)
1,20,000
To Bank A/c. (40,000 × `3)
Equity Share Allotment A/c. Dr. 4,00,000
To Equity Share Capital A/c. 3,00,000
To Securities Premium Reserve A/c. 1,00,000
Bank A/c. Dr. 2,43,500
Calls in Arrears A/c (8,000 – 1,5000) Dr. 6,500
To Equity Share Allotment A/c. 2,50,000
(`4,00,000 – `1,50,000)
Equity Share First Call A/c. Dr. 3,00,000
To Equity Share Capital A/c. 3,00,000
Bank A/c. Dr. 2,85,000
Calls in Arrears A/c (3 x 5,000) Dr. 15,000
To Equity Share First Call A/c. 3,00,000
Equity Share Capital A/c Dr. 16,000
Securities Premium A/c Dr. 2,000
To Share Forfeiture A/c 5,500

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 CBSE XII | Accountancy

All India Board Paper Set 1 – 2019 Solution

To Calls in Arrears A/c 12,500

Equity Share Second & Final Call A/c Dr. 1,96,000
To Equity Share Capital A/c 1,96,000
Bank A/c (2 x 95,000) Dr. 1,90,000
Calls in Arrears A/c (2x 3,000) Dr. 6,000
To Share Second & Final Call A/c 1,96,000
Equity Share Capital A/c Dr. 30,000
To Share forfeiture A/c 15,000
To Calls in Arrears A/c 15,000
Bank A/c (8 x 4,000) Dr. 32,000
Share forfeiture A/c (2 x 4,000) Dr. 8,000
To Share Capital A/c (10 x 4,000) 40,000
Share forfeiture A/c Dr. 9,750
To Capital Reserve A/c (750 + 9,000) 9,750

17. Answer:
In the books of Books of Mohan, Vinay and Nitya
Dr. Revaluation Account Cr.
Particulars (`) Particulars (`)
To Plant and Machinery A/c. 6,000 By Bank (Computer) By 4,000
To Profit and Loss A/c. 4,000 Loss Transferred to
Partners’ Capital A/cs. :
Mohan 3,000
Vinay 2,000
Nitya 1,000 6,000
10,000 10,000

Dr. Partners’ Capital Account Cr.

Mohan Vinay Nitya Mohan Vinay Nitya
Particulars Particulars
(`) (`) (`) (`) (`) (`)
To Revaluation A/c 3,000 2,000 1,000 By Balance b/d 1,20,000 1,00,000 90,000
By Contingency
To Mohan’s Capital A/c 48,000 42,000 Reserve 15,000
To Mohan’s Loan A/c 2,22,000 By Vinay’s Capital A/c 48,000
To Bank A/c 6,000 16,000 By Nitya’s Capital A/c 42,000 10,000 5,000
To Balance c/d 54,000 36,000
2,25,000 1,10,000 95,000 2,25,000 1,10,000 95,000

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 CBSE XII | Accountancy

All India Board Paper Set 1 – 2019 Solution

Dr. Bank Account Cr.

Particulars (`) Particulars (`)
To Balance b/d. 31,000 By Vinay’s Capital A/c. 6,000
To Revaluation (Old Scooter) 4,000 By Nitya’s Capital A/c. 16,000
By Balance c/d. (Bal. Fig.) 13,000
35,000 35,000

Balance Sheet as of the Reconstituted firm

Liabilities (`) Assets (`)
Creditors 48,000 Cash at Bank 13,000
Employees Provident Fund 1,70,000 Bills Receivables 54,000
Mohan’s Loan A/c. 2,22,000 Books Debts 60,000
Partners’ Capital A/c. : Less: P.B.D. 3,000 57,000
Vinay 54,000 Plant and Machinery 1,14,000
Nitya 36,000 90,000 Land and Building 2,92,000
5,30,000 5,30,000

OR

Books of Leena, Rohit and Manoj

Dr. Revaluation Account Cr.
Particulars (`) Particulars (`)
To Claim for Workmen By Loss Transferred to
Compensation A/c 40,000 Partners’ Capital A/c :
To Stock 16,000 Leena 33,600
Rohit 22,400 56,000
56,000 56,000

Dr. Partners’ Capital Account Cr.

Leena Rohit Manoj Leena Rohit Manoj
Particulars Particulars
(`) (`) (`) (`) (`) (`)
To Revaluation A/c 33,600 22,400 By Balance b/d 1,60,000 1,40,000
(Loss)
To Balance c/d 1,93,400 1,75,600 92,250 By Cash A/c 92,250
By Premium for
Goodwill A/c 40,000 40,000
By General
Reserve 27,000 18,000
2,27,000 1,98,000 92,250 2,27,000 1,98,000 92,250

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 CBSE XII | Accountancy

All India Board Paper Set 1 – 2019 Solution

Dr. Cash Account Cr.

Particulars (`) Particulars (`)
To Balance b/d. 42,000
To Premium on Goodwill A/c 80,000
To Manoj’s Capital A/c 92,250 By Balance c/d. 2,14,250
2,14,250 2,14,250

Balance Sheet as at 31st March, 2018

Liabilities (`) Assets (`)
Sundry 80,000 Cash 2,14,250
Creditors Bills 38,000 Debtors 1,32,000
Payable Less: P.B.D. 7,000 1,25,000
40,000
Claim for Workmen’s Stock 1,30,000
Compensation Plant and Machinery 1,50,000
Partners’ Capital A/c :
Leena 1,93,400
Rohit 1,75,600
Manoj 92,250 4,61,250
6,19,250 6,19,250

SECTION B

18. Answer :
Cash Advances and loans made to third party will be classified as Investing Activities while
preparing Cash Flow Statement.

19. Answer :
A Cash Flow is prepared with a primary objective of recording and providing the useful
information about cash inflows and outflows during a particular period, classified under 3
heads, namely, Operating Activities, Investing Activities and Financing Activities.

20. Answer:
Sr. Item Major Heading Sub-Heading
no.
i. Interest accrued and due on Current Liabilities Other Current Liabilities
debentures
ii. Loose Tools Current Assets Inventories
iii. Accrued Interest on calls in advance Current Liabilities Other Current Liabilities
iv. Interest due on calls in arrears Current Assets Other Current Assets
v. Trademarks Non-Current Assets Fixed Assets – Intangible
Assets
vi. Premium on redemption of debentures Non-Current Other Non-Current Liabilities
Liabilities
vii. Plant & Machinery Non-Current Assets Fixed Assets – Tangible Assets

viii. Patents Non-Current Assets Fixed Assets – Intangible

Assets

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 CBSE XII | Accountancy

All India Board Paper Set 1 – 2019 Solution

OR
Following are the limitations of Financial Statement Analysis:

i. Historical Analysis: Financial Statements are prepared using the historical information of
the financial transactions that have already taken place. As a result financial statements are
correctly termed as a historical records of financial transactions. Analysis of such
transactions is therefore, a historical analysis. Therefore, the statement is incorrect as it
makes reference to use of future data.
ii. Price Level Changes are not considered: If there is a change in the price level, analysis of
financial statements of different accounting years become invalid as accounting records
ignore change in value of money.
iii. Qualitative Aspect Ignored: Financial Statements record only monetary transactions
which are quantitative in nature. Other important qualitative elements which affect the
financial statements are not considered.
iv. Not free from bias: Financial statements are the outcome of accounting concepts and
conventions combined with estimates. Estimates cannot be relied upon completely as there
are chances that the amounts may fluctuate and hence, are not free from bias. Therefore, the
financial statements are not completely reliable.
v. Accounting Practices: In order to compare the profitability and the financial position of
different firms, it is necessary that these firms follow same accounting practices. If different
accounting practices are followed, inter-firm comparison is not possible.
vi. Window Dressing: It refers to the presentation of a better financial position than what it
actually is by way of manipulating the books of accounts. Such false representation will
provide misleading information for analysis which will result in wrong decision making.

21. Answer:
i.
Net Profit before Interest and Tax
Interest Coverage Ratio =
Interest on Debt
If Profit before tax is 100, tax is 40%, then profit after tax is 100-40=60
Profit after tax
Therefore, Profit before tax = 100
60
1, 20, 000
Profit before tax = 100  2, 00, 000
60
Total Interest on Debt = Interest on 15% Debentures + Interest on 12% Mortgage Loan 
 15,000 +12,000 = 27,000
Therefore, Net Profit before Interest and Tax = 2,00,000 + 15,000+12,000 = 2,27,000
From the information given,
2, 27, 000
Interest Coverage Ratio   8.407 times
27, 000
Current Assets
ii. Current Ratio =
Current Liabilities
Where,

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 CBSE XII | Accountancy

All India Board Paper Set 1 – 2019 Solution

Current Assets = 3,00,000 + 20,000 = 3,20,000

Current Liabilities = 1,40,000 + 20,000 = 1,60,000
Therefore,
3, 20, 000
Current Ratio =  2:1
1, 60, 000
OR
Let us assume that the that the amount of Quick Assets is equal to the Current Liabilities,
therefore,
2, 00, 000
Quick Ratio =  1:1
2, 00, 000
Also,
Liquid Assets = Current Assets - Inventories - Prepaid Expenses
i. Paid Insurance Premium in Advance Rs.10,000
Liquid Assets = 2, 00,000 – 10,000 = 1, 90,000
1, 90,000
Liquid Ratio =  0.95 : 1 (Decrease)
2,00,000
ii. Purchased Goods on Credit Rs.8, 000
Current Liabilities = Rs.2, 00,000 + Rs.8, 000 = Rs.2, 08,000
2,00,000
Liquid Ratio =  0.96 : 1 (Decrease)
2,08,000
iii. Issued Fully Paid Equity Shares of Rs.1,00,000
Liquid Assets = 2, 00,000 + 1, 00,000 = 3, 00,000
3,00,000
Liquid Ratio =  1.5 : 1 (Increase)
2,00,000
iv. Issued 9% Debentures of Rs.2, 00,000 to the Vendor for Machinery Purchased
Such transaction will have no change in the Quick Assets and Current Liabilities and
therefore, there will be no change in the ratio.

22. Answer:
Particulars Note 31st March, 31st March, Absolute Percentage
no. 2017 2018 Change Change
1 2 3 4 5
A B C=B-C (C/A) × 100
(`) (`) (`) (`)
I. Revenue from Operations 4,00,000 7,20,000 3,20,000 80
II. Less: Expenses
a. Cost of Materials Consumed 2,00,000 2,40,000 40,000 20
b. Other Expenses 20,000 48,000 28,000 140
Total Expenses 2,20,000 2,88,000 68,000 30.91
III. Profit Before Tax (I-II) 1,80,000 4,32,000 2,52,000 140
IV. Less: Tax 90,000 2,16,000 1,26,000 140
V. Profit after Tax (III-IV) 90,000 2,16,000 1,26,000 140

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 CBSE XII | Accountancy

All India Board Paper Set 1 – 2019 Solution

23. Answer:
Cash Flow Statement for the Year Ended 31st March, 2018
(As Per Accounting Standard – 3 Revised)

Particulars (`) (`)

A.
Cash Flow from Operating Activities :
Net Profit Before Tax (24,000)
Adjustment for Non Cash and Non-Operating Items :
Add : Depreciation 4,20,000
Interest on Long Term Borrowings 64,000 4,84,000
Less : Profit on Sale of Fixed Assets 1,60,000 (1,60,000)
Operating Profit Before Working Capital Changes 3,00,000
Add : Increase in Trade Payables 50,000 50,000
Less : Increase in Inventories 4,00,000 (4,00,000)

Cash Generated from Operations (50,000)

Less : Tax Paid (56,000)
Net Cash Used in Operating Activities (1,06,000)
B.
Cash Flow from Investing Activities :
Proceeds from Sale of Machinery 6,40,000
Purchase of Machinery (16,00,000)
Purchase of Intangible Assets (1,00,000)
Net Cash Used in Investing Activities (10,60,000)
C.
Cash Flow from Financing Activities :
Proceeds from Issue of Shares 9,00,000
Proceeds from Issue of 8 % Debentures 3,00,000
Interest Paid on 8 % Debentures (64,000)
Net Cash From Financing Activities 11,36,000
Net Increase or Decrease in Cash and Cash Equivalents (A + B + C) (30,000)
Add : Cash and Cash Equivalents in the Beginning of the Year 1,56,000
(` 78,000 + ` 78,000)
Cash and Cash Equivalents at the End of the Year (` 89,000 + ` 37,000) 1,26,000

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 CBSE XII | Accountancy
All India Board Paper Set 1 – 2019 Solution

WN.1. Calculation of Net Profit before Tax:

Particulars (`)
Balance of Profit & Loss Account as at 31st March , 2018 4,00,000
Less : Balance of Profit and Loss Account as at 31st March , 2017 (5,00,000)
Add : Provision for Tax 76,000
Net Profit Before Tax (24,000)

WN. 2. Calculation of Profit/Loss on Sale of Machinery:

Written Down Value = Cost of Machinery - Accumulated Depreciation
Written Down Value = 8,00,000 - 3,20,000 = 4,80,000
However, it is given that selling price = 6,40,000
Therefore, Profit on Sale of Machinery = 6,40,000 - 4,80,000 = 1,60,000

WN.3.
Dr. Machinery Account Cr.
Particulars (`) Particulars (`)
To Balance b/d 25,00,000 By Bank 6,40,000
To Profit & Loss Account 1,60,000 By Accumulated Depreciation 3,20,000
To Bank 16,00,000 By Balance c/d 33,00,000

42,60,000 42,60,000

WN.4.
Dr. Accumulated Depreciation Account Cr.
Particulars (`) Particulars (`)
To Machinery 3,20,000 By Balance b/d. 5,00,000
To Balance c/d 6,00,000 By Profit & Loss Account
(Current Year Depreciation) 4,20,000
9,20,000 9,20,000

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