ANSWER KEY_CLASS 12_HALF YEARLY EXAM.

2023-24

1. C 2. D 3. B/C 4. B/D
5. A 6. C/C 7. B 8. A
9. B 10. A/D 11. C 12. A
13. D 14. D/B 15. A 16. C

SOL. 17
DATE PARTICULAR DR. AMT. CR. AMT.
Bank A/c (30000 x 11) Dr. 330000
To Shares Application A/c 330000
(Being application money received)
Shares Application A/c (30000 x 11) Dr. 330000
To Share Capital A/c (20000 x 10) 200000
To security premium A/c (20000 x 1) 20000
To bank A/c (10000 x 11) 110000
(Being shares allotted and application money T/F to Share Capital A/c)
OR
Difference between Fixed Capital Account & Fluctuating Capital Account:
Basis Fixed Capital Account Fluctuating Capital Account
1. No. of
Two accounts for each partner Fixed Capital Only one account is maintained for each partner,
Accounts
Account & current Account. i.e., capital Account.
maintained
Balance does not change except under specific
2. Balance Balance changes frequently from period to
circumstances (introduction of additional capital
change period.
and capital withdrawn)
All adjustments for drawing interest on All adjustments for drawings, interest on drawing
3. Adjustments drawing, interest on capital, salary and & capital, salary, profit/loss are made in Capital
profit/loss are made in current account. Accounts.
Fixed Capital Account. Capital Account has
Fluctuating Capital account can have debit or
4. Balance credit balance always However, current account
credit balance.
may have debit or credit balance.

SOL. 18
(i) super profit method
step 1 Average profit = 660000 = ₹ 2,20,000 (ii) average capitalisation method.
3 Step 1 Average profit = 660000 = ₹ 2,20,000
Actual average profit = Average profit - 3
Remuneration Actual average profit = Average profit -
=220000 – 100000 =₹ 1,20,000 Remuneration
Step 2. Capital employed = ₹ 4,00,000 = 220000 – 100000 =₹ 1,20,000
Step 3. Normal profit = 400000 × 15% Step 2 capitalised value of firm = Actual x 100
= ₹ 60,000 average
step 4. Super Profit = Actual Average Profit – Normal rate
Normal Profit profit of
= 1,20,000 – 60,000 = ₹ 60,000 return = 120000 x 100 / 15 = 800000
Step 5. Goodwill = Super Profit × Number of Years’ Step 3 Capital employed = ₹ 4,00,000
Purchase Step 4. Goodwill = capitalized value of firm - Capital
= 60,000 × 2 = ₹ 1,20,000 employed
= 800000 – 400000 = ₹ 400000
SOL. 19
DATE PARTICULAR DR. AMT. CR. AMT.
(a) Land and building A/c dr. 25000
To revaluation A/c 25000
(being Land and building revalued)
(b) Revaluation A/c dr. 20000
To machinery A/c 25000
(being machinery revaluation)
OR
Ans. No, the accountant didn’t give correct treatment as capital account of the partners are to be debited.

SOL. 20
DATE PARTICULAR DR. AMT. CR. AMT.
Share capital A/c 24000
To share final call A/c (2400 x 3) 7200
To share forfeited A/c (2400 x 7) 16800
(being share forfeited)
Bank A/c (800 x 8) 6400
Share forfeited A/c (800 x 2) 1600
To share capital A/c(800 x 10) 8000
(being share re-issue)
Shares forfeited A/c (16800/2400 x 800) - 1600 4000
To capital reserve A/c 4000
(being gain of re-issue transfer to capital reserve A/c)

SOL. 21 (a) profit and loss appropriation account

For the year ended 31st march 2023
Particulars Amount ₹ Particulars Amount ₹
To partners salary: By profit and loss, a/c 1500000
Jay’s (15000 x 12) = 180000 By jay’s capital a/c (200000 – 175000) 25000
Vijay’s (15000 x12) = 180000 360000 [Deficiency in guaranteed fees]
To partners capital a/c:
Jay’s = 305800
Vijay’s = 359200
Karan’s = 500000 1165000
1525000 1525000

(b) partners’ capital account

Particulars Jay ₹ Vijay ₹ Karan Particulars Jay ₹ Vijay ₹ Karan ₹
₹
To P&L App. A/c 25000 - - By salary a/c 180000 180000 -
To balance c/d By P&L App. A/c 305800 359200 500000
460800 539200 500000
485800 539200 500000 485800 539200 500000
Working notes: Calculation of deficiency in Karan’s share
Profit to be distributed = 1500000+25000-360000 = 1165000
1. Jay’s = (1165000 x 2/5) = 466000 – 160200 = 305800
2. Vijay’s= (1165000 x 2/5) = 466000 – 106800 = 359200
3. Karan’s= (1165000 x 1/5) = 233000 but Karan guaranteed by 500000,
deficiency will be met by jay and Vijay in 3:2
deficiency (500000 – 233000) = 267000 then
jay (267000 x 3/5) = 160200
Vijay (267000 x 2/5) = 106800
SOL. 22

Working Notes:
SOL. 23

OR
Working Notes:

SOL. 24
Realisation account
Particulars Rs Particulars Rs
Sundry assets Liabilities:
Debtors-25000 Creditors: 30,000
Stock-35,000 Bank loan: 5000 35000
Furniture-40,000
Machinery-60,000 1,60,000
Bank a/c (outstanding repair bill) 2000 Karan ‘s Capital a/c 15750
Bank (Creditors & Bank loan) 35,000 Bank a/c(stock) 20125
Capital accounts Bank a/c (Assets realized) 80,000
Karan: 5787.5 Bank a/c (Debtors) 32700
Sandeep: 5787.5 11575 Bank a/c (Investments) 25,000
208575 208575
 Partners’ Capital accounts
Particular Karan Sandeep Particulars Karan Sandeep
Realisation a/c(stock) 15750 Balance b/d 1,00,000 50,000
Workmen ‘s compensation fund 7500 7500
Bank account 97537.5 63287.5 Realisation a/c 5787.5 5787.5
113287.5 63287.5 113287.5 63287.5
Bank account
Particulars Amount Particular Amount
Realisation a/c
Balance b/d 40,000 37000
(repair bill, creditors and bank loan)
Realisation a/c (stock) 20125 Karan ‘s capital 97537.5
Realisation a/c (Machinery & furniture) 80,000 Sandeep ‘s capital 63287.5
Realisation a/c(Debtors) 32700
Bank (Investments) 25,000
197825 197825
OR

Balance sheet

SOL. 25
Case 1. When Guarantee is given by firm.
Profit and Loss Appropriation Account
For the year ending on 31st March, 2015
Particulars (Rs.) Particulars Rs.)
To A’s Capital A/c (3/s of Rs. 65,000) 39,000
To B’s Capital A/c(2/s of Rs. 65,000) 26,000 By Profit and Loss A/c 90,000
To C’s Capital A/c(1/6 of Rs. 90,000 or 25,000
Rs. 25,000 whichever is more 90,000 90,000
Case 2. Guarantee is given by A
Profit and Loss Appropriation Account
For the year ending on 31st March, 2015
Particulars (Rs.) Particulars Rs.)
To A’s Capital A/c (3/6 of Rs. 90,000) 45,000
35,000
Less : Deficiency Borne for C (10,000) By Profit and Loss A/c
30,000 90,000
To B’s Capital A/c (2/6 of Rs. 90,000) (Net Profits)
To C’s Capital A/c(1/6 of Rs. 90,000) 15,000
25000
Add : Deficiency Recover form A 10,000
90,000 90,000
Case: 3. When Guarantee is given by A & B equally.
Profit and Loss Appropriation Account
For the year ending on 31st March, 2015
Particulars (Rs.) Particulars Rs.)
To A’s Capital A/c (3/6 of Rs. 90,000) 45,000
40,000
Less: Def. Borne for C(1/2 of Rs.10,000) 5,000
To B’s Capital A/c (2/6 of Rs. 90,000) 30,000 By Profit and Loss, A/c
25,000 90,000
Less: Def. Borne for C (1/2 of Rs. 10,000) 5,000 (Net Profits)
To C’s Capital A/c (1/6 of Rs. 90,000) 15,000
Add : Def. Recover form A 5,000
25,000
Def. Recovered From B 5,000
90,000 90,000

SOL. 26 Revaluation A/c

Particulars (Rs.) Particulars (Rs.)
By Stock 4,000
By Prepaid salaries A/c 800
To Furniture A/c 4,200
By Capital A/c (loss):
To Machinery A/c 5,100
A 2/10 1,260
To Outstanding rent A/c 1,800
B 3/10 1,890
C 5/10 3,150 6,300
11,100 11,100
Partners’ Capital Account
Particulars A(Rs.) B(Rs.) C(Rs.) D(Rs.) Particulars A(Rs.) B(Rs.) C(Rs.) D(Rs.)

To Revaluation A/c 1,260 1,890 3,150

To Goodwill A/c 4,000 6,000 10,000 By balance c/d
800 36,000 44,000 52,000
To A’s capital By P/L A/c
1,200 2,800 4,200 7,000
To B’s capital – – – By D’s capital A/c
2,000 800 1,200 2,000
To C’s capital – – – By Cash A/c 32,000
To Balance c/d – – –
28,000
34,340 41,510 47,850
39,600 49,400 61,000 32,000 39,600 49,400 61,000 32,000
Balance Sheet of the New Firm
Liabilities (Rs.) Assets (Rs.)

Creditors
18,000 50,000
Capital Cash
24,000
A 34,340 Bill Receivable
23,000
B 41,510 Furniture
48,000
C 47,850 Stock
42,000
D 28,000 Debtors
1,51,700 32,000
Creditors Investment
64,000 28,900
Bills Payable Machinery
32,000 800
Outstanding rent Prepaid salaries
1,800

2,49,500 2,49,500
 PART B
27. D / A 28. A 29. B/C 30. C

SOL. 31
Trade Payables Turnover Ratio = Net Credit Purchases / Average Trade Payables
Average Trade Payables = Creditors in the beginning + Bills payables in the beginning + Creditors at the
end + Bills payables at the end / 2
= Rs. 3,00,000 + Rs. 1,00,000 + Rs. 1,30,000 + Rs. 70,000/ 2 = Rs. 3,00,000
∴ Trade Payables Turnover Ratio = Rs. 12,00,000 / Rs. 3,00,000
= 4 times
SOL. 32
Liquidity Ratio = Liquid Assets/Current Liabilities
Liquidity Assets = Current assets −(Inventories + Prepaid expenses + Advance tax)
= Rs. 80,000 − (Rs. 20,000 + Rs. 5,000 + Rs. 5,000) = Rs. 50,000
Liquidity Ratio = Rs. 50,000 / 50,000
= 1: 1.
SOL. 33
Return on investment = net profit before interest and tax / capital employed x 100
= 1060000 / 2000000 x 100
= 53%
Working note: calculation of net profit before interest and tax
net profit after interest and tax = 600000
add: tax (600000 / 60 x 40) = 400000
add: interest (1000000 x 6%) = 60000
net profit before interest and tax 1060000
OR
(i) gross profit ratio = gross profit / revenue from operation x 100
= 113000 / 250000 x 100
= 45.2%
(ii) net profit ratio = net profit / revenue from operation x 100
= 83000 / 250000 x 100
= 33.2%
Working note: calculation of gross profit
Gross profit = revenue from operation + return outward – purchase – carriage inwards – decrease in
inventory – return out ward
= 250000 + 5000 – 105000 -4000 – 15000 – 18000
= 113000
calculation of net profit
net profit = gross profit – salaries
= 113000 – 30000
= 83000
SOL. 34
calculation of two-year inventory turnover ratio = cost of revenue from operation / average inventory
(i) for 2015 – 16 inventory turnover ratio = cost of revenue from operation / average inventory
= 4000000 / 600000 = 6.67 times
(ii) for 2016 – 17 inventory turnover ratio = cost of revenue from operation / average inventory
= 6000000 / 1200000 = 5 times
Working note: 2015-16 2016 -17
cost of revenue from operation 5000000 / 125 x 100 7500000 /125 x 100
revenue from operation / = 4000000 =6000000
100 + rate x 100

average inventory 500000 + 700000 / 2 700000 + 1700000 / 2

opening + closing / 2 = 600000 1200000