ACCOUNTANCY

CLASS XII Practice Paper

Time Allowed: 3Hrs Maximum Marks: 80

General Instructions :

Read the following instructions very carefully and strictly follow them :
(i) This question paper comprises two Parts – A and B. There are 32 questions in the question paper. All
questions are compulsory.
(ii) Question nos. 1 to 13 and 23 to 29 are very short answer type questions carrying 1 mark each.
(iii) Question nos. 14 and 30 are short answer type–I questions carrying 3 marks each.
(iv) Question nos. 15 to 18 and 31 are short answer type–II questions carrying 4 marks each.
(v) Question nos. 19, 20 and 32 are long answer type–I questions carrying 6 marks each.
(vi) Question nos. 21 and 22 are long answer type–II questions carrying 8 marks each.
(vii) Answers should be brief and to the point. The answer of each part should be written at one place.
(viii) There is no overall choice. However, an internal choice has been provided in 2 questions of three
marks, 2 questions of four marks and 2 questions of eight marks.
(ix) However, separate instructions are given with each part and question, wherever necessary.

Part A: Accounting for Not- for profit organization, Partnership firms and Companies

Q.1 Which of the following is a revenue receipt for a Not- for profit organization? 1
a) Endowment fund b) Donation for construction of basketball court
c) Subscription d) None of these.
Q.2 In case of death of a partner, settlement of deceased partner capital is done by opening ‘Loan account’
in his name. (true/false). 1

Q 3 Land M are partners in a firm sharing profits in the ratio of 7:3, N is admitted as partner for 3/7th share
which he takes from Land M in 2:1. The new profit sharing ratio will be

(a) 27:13:30 (b) 7:3:3 (c) 29:11:30 (d) None of these 1

Q 4 If a partnership is running business without a partnership deed, how much interest on

their capital is given –
(a) 12% interest on capital (b) 6% interest on capital
(c) 10% interest on capital (d) none of these 1
Q 5 From the following, identify a situation when fixed capitals of the partners may
change? - 1
(a) When capital is withdrawn permanently.
(b) When additional capital is introduced
(c) Both A and B
(d) Neither A nor B
Q 6 Share of profit up to date of death of deceased partner is debited to following account-
(a) Profit/loss account (b) Profit/loss suspense account

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 (c) Reassessment Account (d) None of these 1
Q 7 .................. ratio in which the partners share all the accumulated profits, reserves,
losses and fictitious assets in case of reconstitution of partnership firm: -
(a)New ratio (b) Gaining ratio
(c) Old ratio (d) Sacrificing ratio 1
Q 8 Which of the following is the factor affecting goodwill of a firm: -
(a) Quality of goods and services (b) Efficient management
(c) Favourable location of business (d) All of these 1
Q 9 Anant ,Gulab and Khusbu were partners in a firm sharing profits in the ratio of
5:3:2.From 1st April, 2018,they decided to share the profits equally. Sacrificing/gaining
share of Anant will be?
(a) 5/30(sac) (b) 5/30(gain)
(b) 1/30(sac) (d) 8/30(gain) 1
Q 10 X, Y and Z are partners sharing profits and losses in the ratio 8:7:5.Z dies and his
share is taken equally by X and Y. the new profit sharing ratio:-
(a) 5:7 (b) 21:19
(c) 19:21 (d) 7:5 1
Q 11 Distinguish between Fixed capital and Fluctuating capital. 1
Q.12 Authorized capital is also known as ‘Registered capital’. (true/false) 1
Q.13 State whether true or false: “Reserve capital is the capital which is called up at the
time of liquidation of a company.” 1
Q.14. Calculated the amount to be debited to Income and Expenditure account from the following
information for 2018-19- 3

Particulars 1-4-2018 31-03-2019

Stock of sports material 2600 4600

Creditors for sports material 2400 2660
Amount paid for sports material during 2018-19 is Rs. 5780.

OR

State three differences between Income/Expenditure account and Receipt/Payment account.

Q 15 Yash and Karan were partners in an interior designer firm. Their fixed capitals were Rs 6,00,000
and Rs 4,00,000 respectively. There were credit balances in their current accounts of Rs 4,00,000 and Rs
5,00,000 respectively. The firm had a balance of Rs 1,00,000 in General Reserve. The firm did not have
any liability. They admitted Radhika into partnership for the 1/4th share in the profits of the firm. The
average profits of the firm for the last five years were Rs 5,00,000. Calculate the value of goodwill of the
firm by capitalization of average profits method. The normal rate of return in the business is 10%.
4

Q 16 Fill in the blanks in the following entries: 4

Date Particulars L.F Dr. Cr.

Sundry Assets A/c DR. 1800000

To Creditors 200000

2
 To------------- -----------

To --------------- -----------

(Being business of Rohan & Co. purchased for a consideration of Rs. 1500000)

2 --------------- Dr. -----------

--------------- Dr. ------------

To 9% debentures A/c `--------------

(Being paid to Rohan and co. by issue of --. 9% debentures of Rs. 150 each at a discount of Rs.
50 per debenture)
Q 17 A, B and C are partners sharing profits and losses in the ratio of 2:3:1. B dies and goodwill valued
for his share was Rs 8100. Gaining ratio of A and C was 4:5. The profit for the year after B death was Rs.
10500.
You are required to pass the journal entry to record the sale of B’s share to A and C and distribution of
profits among partners. 4
OR

State any six items to be recorded in credit side and any two items to be recorded in debit side of Deceased
partner’s capital account.

Q 18 A, B, C and D are partners in a firm sharing profits in the ratio of 3: 3: 2: 2 respectively. D retires and
A, B, and C decide to share the future profits in the ratio of 3 : 2: 1. Goodwill of the firm is valued at Rs.
6,00,000. Goodwill already appears in the books at Rs. 4,50,000. The profits for the first year after D’s
retirement amount to Rs. 12,00,000. Give the necessary journal entries to record Goodwill and to distribute
the profits. Show your calculations clearly. 4

Q 19. (i) Kati Ltd. issued 8,000, 9% debentures of Rs 100 each at a discount of 10%. The full amount was
payable on application. Applications were received for 9,000 debentures and allotment was made on pro-
rata basis.
Pass the necessary journal entries for the above transactions in the books of Kati Ltd.
(ii) Sati ltd. Took loan from WTX bank for Rs 500000 and issues 10% debentures of Rs 700000 as
collateral security.
Pass the necessary journal entries for the above transactions in the books of Sati Ltd. 6

Q 20 Following is the Receipts and Payments A/c of Virendra Sports Club for the year ended 31st
March, 2018-

RECEIPTS AMOUNT PAYMENTS AMOUNT

To Balance b/d 55,000 By Salaries 22,000
To Subscriptions: By Office Expenses 8,000
2016-17 35,000 By Sports Equipment
2017-18 9,50,000 [Purchased on 1st Oct, 2018] 6,00,000
2018-19 55,000 10,40,000 By Telephone Charges 12,000
To Donations 90,000 By Electricity Charges 18,000
To Entrance Fees 60,000 By Travelling Expenses 6,000
To Locker Rent 20,000 By 10% Fixed Deposits 7,00,000
To Donations for Sports 1,50,000 [Made on 1st July, 2017]

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 Complex By Balance c/d 49,000
14,15,000 14,15,000

Additional Information:

[1] Outstanding subscription for 2017-18 Rs. 80,000.

[2] Outstanding Salaries as on 1st April, 2017 were Rs. 2,000 and as on 31st March, 2018 were
Rs. 4,000.
[3] Locker Rent yet to be received Rs 4000.
[4] Depreciation on Sports equipment @ 20% p.a.
Prepare Income and Expenditure Account of Virendra Sports Club for the year ended 31st March,
2018. 6

Q 21 Shukla and Chaturvedi were partners sharing profits in the ratio of 3: 2. The Balance Sheet as at
31st March, 2020 was as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Creditors 20,000 Cash 14,800
Bills Payable 3,000 Debtors 20,500
Bank Overdraft 17,000 (-)Provision for Bad Debt (300) 20,200
Reserve 15,000 Stock 20,000
Shukla’s Capital 70,000 Plant 40,000
Chaturvedi’s Capital 60,000 Buildings 70,000
Motor Vehicles 20,000
1,85,000 1,85,000

They agreed to admit Mishra for 1/4th share from 01-04-2020 subject to the following terms:
[a] Mishra to bring in Rs 40125 as capital contribution in the firm.
[b] Buildings to be appreciated to Rs. 84,000 and stock to be depreciated by Rs. 6,000.
[c] Provision for Bad Debts on Debtors to be raised by Rs. 700.
[d] A provision be made for Rs. 1,800 for outstanding legal charges.
[e] Mishra’s share of goodwill was calculated at Rs. 10,000 which is brought by him in cash.
Prepare Revaluation Account, and Partner’s Capital Accounts 8

OR

Vishal and Pavitra were partners in a firm sharing profits in the ratio of 3: 2. The Balance Sheet of the firm
on 31st March, 2020 was as follows:

Liabilities Amount (Rs.) Assets Amount (Rs.)

Sundry creditos 80,000 Bank 1,72,000

Pavitra’s Sister’s loan 20,000 Debtors 27,000
Vishal’s capital 1,75,000 Stock 50,000
Pavitra’ s capital 1,94,000 3,69,000 Furniture 2,20,000
4,69,000 4,69,000
On the above date the firm was dissolved. The assets were realized and the liabilities were paid off as
follows :

a) 50% of the furniture was taken over by Vishal at 20% less than book value. The remaining furniture
was sold for Rs.1,05,000.

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 b) Debtors realized Rs.26,000
c) Stock was taken over by Pavitra for Rs. 29,000.
d) Pavitra’s sister’s loan was paid off along with an interest of Rs.2,000.
e) Expenses on realization amounted to Rs. 5,000 paid by the firm.
Prepare Realisation Account, Partner’s Capital Accounts and Bank Account.

Q 22 Mamta Ltd. invited applications for issuing 10,00,000 equity shares of Rs. 10 each at a premium of
Rs. 2 per share. The amount was payable as follows:
On Application Rs. 5 (Including Premium)
On Allotment Rs. 4
On First and Final Call Rs. 3
Application for 15,00,000 shares were received. Application for 3,00,000 shares were rejected and
pro-rata allotment was made to the remaining applicants. Excess, application money was utilized towards
sums due on allotment. Anita who had applied for 24,000 shares failed to pay the allotment and call
money. Her shares were forfeited. Out of the forfeited shares 10,000 shares were re-issued for Rs. 8 per
share fully paid up.

Pass necessary journal entries in the Books of Mamta Ltd. [8]

OR

Alka Ltd. invited applications for issuing 75,000 equity shares of Rs. 10 each. The amount was
payable as follows:

On Application and Allotment Rs. 4 per share

On First Call Rs. 3 per share
On Second and Final Call Balance
Applications for 1,00,000 shares were received. Shares were allotted to all the applicants on pro-rata basis
and excess money received with applications was transferred towards sums due on first call. Vibha who
was allotted 750 shares failed to pay the first call. Her shares were immediately forfeited. Afterwards the
second call was made. The amount due on second call was also received except on 1,000 shares applied by
Monika, Her shares were also forfeited. All the forfeited shares were re-issued to Usha for Rs.9000 as fully
paid up.

Pass necessary journal entries in the books of Alka Ltd. for the above transactions. 8

Part B: Analysis of Financial Statements

Q 23 Which of the following is not a subhead under the Current Assets? 1

(A) Cash and Cash Equivalents
(B) Trademarks
(C) Short-term Loans and Advances
(D) Inventories

Q 24 There was an increase in amount of patents Rs 50,000. How will this be presented while preparing
Cash Flow Statement? 1

a) Cash inflow in operating activity

b) Cash outflow in Operating activity

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c) Cash inflow in investing activity

d) Cash outflow in investing activity

Q 25 State one importance of preparing cash flow statement. 1

Q 26 Under what heading will you show the following items in the balance sheet of the company?

1. Goodwill 2.Current maturities of long term debts 1

Q 27 State any one limitation of Analysis of Financial Statement. 1

Q 28 Which item is assured to be base while preparing Common Size Statement of Profit and Loss? 1

Q 29 State any one objective of Analysis of Financial Statement. 1

Q 30 Prepare a Common Size Statement of Profit & Loss from the following information: 3
STATEMENT OF PROFIT & LOSS

Particulars Note 31st March 31st March

No. 2020 2019
Revenue from Operations 25,00,000 20,00,000
Other Income 1,00,000 1,00,000
Cost of Materials Consumed 17,00,000 14,00,000
Finance Costs 2,00,000 1,60,000
Other Expenses 1,00,000 1,40,000
Or

From the following information, prepare Comparative Balance Sheets of ABC Ltd. (4)
Particulars 31-03-2020 31-03-2019
Reserve and Surplus 12,00,000 6,00,000
Share Capital 10,00,000 10,00,000
Trade Payables 12,70,000 9,00,000
Lands and Buildings 16,00,000 15,00,000
Plant and Machinery 6,30,000 5,00,000
Goodwill --- 1,00,000
Investments 1,20,000 1,00,000
Current Assets 15,20,000 8,00,000
Long term Borrowings 4,00,000 5,00,000

Q 31 Calculate (i) Gross Profit Ratio (ii) Operating Ratio (iii) Operating Profit Ratio and (iv) Net Profit
Ratio from the following: 4
Particulars Amount
Opening Inventory 3,00,000
Closing Inventory 4,20,000
Purchases 14,00,000
Wages 3,70,000
Carriage Inwards 1,50,000
Administrative Expenses 84,000
Selling Expenses 36,000
Income Tax 1,00,000
Profit on Sale of Fixed Assets 20,000
Revenue from Operations 24,00,000

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 OR

(i) From the following information, calculate ‘Interest Coverage Ratio’

Profit after interest and tax Rs 7,50,000.
Rate of income tax 25%
9 % Debentures Rs 8,00,000
(ii) Calculate proprietary ratio, if Total assets to Debt ratio is 2:1. Debt is Rs 5,00,000. Equity
shares capital is 0.5 times of debt. Preference Shares capital is 25% of equity share capital.
Net profit before tax is Rs 10,00,000 and rate of tax is 40%.

Q 32 From the following Balance Sheets of Vijay Ltd. as at 31-03-2020 and 31-03-2019, prepare a Cash
Flow Statement: 6

Particulars Note 31-03-2020 31-03-2019

No.
I EQUITY AND LIABILITIES :
[1] Shareholder’s Funds :
[a] Share Capital 1,05,000 75,000
[b] Reserve & Surplus 1 85,000 50,000
[2] Current Liabilities :
[a] Short-term Borrowings 2 25,000 15,000
[b] Trade Payables 3 22,000 17,400
2,37,000 1,57,400
II ASSETS
[1] Non-Current Assets :
Fixed Tangible Assets 1,66,000 93,400
[2] Current Assets :
[a] Inventory 27,000 24,000
[b] Trade Receivables 4 39,000 36,000
[c] Cash and Cash Equivalents 5,000 4,000
2,37,000 1,57,400
Notes : 31-03-2020 31-03-2019
[1] Reserves & Surplus :
General Reserve 55,000 30,000
Balance of Statement of Profit & Loss 30,000 20,000
85,000 50,000
[2] Short-term Borrowings :
Bank Overdraft 25,000 15,000
[3] Trade Payables :
Sundry Creditors 20,000 14,000
Bills Payables 2,000 3,400
22,000 17,400
[4] Trade Receivables :
Sundry Debtors 36,000 36,000
Bills Receivables 3,000 ---
39,000 36,000
Additional Information :
I Depreciation charged on Fixed Tangible Assets for the year 2019-20 was Rs. 20,000.
II Income Tax Rs. 5,000 has been paid during the year.