Solution

ACC

Class 12 - Accountancy
Part A:- Accounting for Partnership Firms and Companies
1.
(d) 25 : 12
Explanation:
Sacrificing ratio
A :- × =
5

8
1

4
5

32
×
5

5
=
25

160

B :- 3

8
×
1

5
=
3

40
×
4

4
=
12

160

2.
(d) A is false but R is true.
Explanation:
A is false but R is true.
Assertion is false because in the absence of partnership deed interest on loan provided @ 6 % p.a.

3.
(c) Bank A/c ... Dr.
To Calls in Arrears A/c

Explanation:
On receipt of calls in arrears, the following entry will take place:
Bank A/c ... Dr.
To Calls in Arrears
This entry is passed if calls in arrears have been debited at the time they were due and not received.
4.
(b) B
Explanation:
B as new and old share of B is 2/6

5.
(c) ₹ 4,100
Explanation:
B will receive (₹)

Salary = 1,700

Share in profit [(9.700 − 1, 700) × 3

10
] = 2,400

4,100

6.
(d) loan certificate
Explanation:
Debenture is a loan certificate because debenture is a source of fund where the company takes loan from public

7. (a) Both A and R are true and R is the correct explanation of A.

Explanation:
Both A and R are true and R is the correct explanation of A.

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FOR THE YOUTH & BY THE YOUTH - MOHNISH BEHL
 8.
(b) Gaining Ratio
Explanation:
Gaining Ratio

9. (a) ₹ 2,400
Explanation:
₹ 2,400
10. (a) ₹ 2,100
Explanation:
₹ 2,100
11.
(b) 6.5 Months
Explanation:
6.5 Months

12. (a) ₹ 1,100

Explanation:
Amount to be transferred to Capital Reserve
4,400
= 400
× 100
= ₹ 1,100
13.
(d) Credited to calls-in-advance account
Explanation:
Credited to calls-in-advance account, when the amount is received in Advance.

14.
(c) All the partners should contribute capital in the firm.
Explanation:
All the partners should contribute capital in the firm.

15.
(b) X ₹ 20,000; Y ₹ 20,000
Explanation:
Sacrificing ratio = share acquire by Z from X and Y. so, sacrificing ratio = 1 : 1
X's share = 40,000 × = 20,000
1

Y's share = 40,000 × 1

2
= 20,000

16.
(b) On expiry of the period of partnership
Explanation:
On expiry of the period of partnership

17. Capitalised Value of Average Profits = Average Profits × 100

( Normal Rate of Return)

Capitalised Value of Average Profits = ₹ 48,000 × 100

12

Capitalised Value of Average Profits = ₹ 4,00,000

Capital Employed = Assets - Liabilities
Capital Employed = ₹ 8,00,000 - ₹ 5,00,000
Capital Employed = ₹ 3,00,000
Goodwill = Capitalised Value of Average Profits - Capital Employed

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 Goodwill = ₹ 4,00,000 - ₹ 3,00,000
Goodwill = ₹ 1,00,000
18. IN THE BOOKS OF FIRM
JOURNAL ENTRIES
Debit Credit
Particulars L.F.
(₹) (₹)

Yogesh's Capital A/c Dr. 300

To Mohit's Capital A/c

300
(Being adjustment entry passed)
W.N:
i. Calculation of Interest on Capital at 6 % p.a.
6
Interest on Yogesh's Capital = 1,20,000 × = ₹ 7,200
100
6
Interest on Raja's Capital = 90,000 × 100
= ₹ 5,400
6
Interest on Mohit's Capital = 60,000 × 100
= ₹ 3,600
ii. Calculation of Interest on Capital at 5 % p.a.
5
Interest on Yogesh's Capital = 1,20,000 × = ₹ 6,000
100
5
Interest on Raja's Capital = 90,000 × 100
= ₹ 4,500
5
Interest on Mohit's Capital = 60,000 × 100
= ₹ 3,000
iii. Statement Showing Adjustment
Yogesh Raja Mohit Total
Particulars
₹ ₹ ₹ ₹

(7,200) (5,400) (3,600)

wrong Interest on Capital credited at 6 % p.a. 16,200
(Dr.) (Dr.) (Dr.)

correct interest on capital credited at 5% p.a. 6,000(Cr.) 4,500(Cr.) 3,000(Cr.) 13,500

Right Distribution of 2,700 (1 : 1 : 1) 900(Cr.) 900(Cr.) 900(Cr.) 2,700

Net Effect (300) (Dr.) NIL 300(Cr.) NIL

19. Books of Adani Ltd.
JOURNAL
Date Particulars L.F. Dr. (₹) Cr. (₹)

(i) Assets A/c Dr. 23,50,000

Goodwill A/c (Balancing Figure) Dr. 50,000

To Liabilities A/c 6,00,000

To Munjal Ltd. 18,00,000

(Business purchased of Munjal Ltd. comprising of Assets and Liabilities)

(ii) Munjal Ltd. Dr. 18,00,000

Loss on Issue of Debentures A/c Dr. 3,00,000

To 9% Debentures A/c (20,000 × ₹ 100) 20,00,000

To Premium on Redemption of Debentures A/c 1,00,000

(Debentures issued to Munjal Ltd. at Discount, redeemable at Premium)

Working Note:
₹ 18,00,000
No. of Debentures to be Issued = = 20,000 Debentures.
₹ 90 (Issue Price)

20. Year Profit Adjustment Normal Profit

2019 1,25,000 1,25,000

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FOR THE YOUTH & BY THE YOUTH - MOHNISH BEHL
 2020 1,00,000 +25,000 1,25,000

2021 1,87,500 1,87,500

2022 (62,500) (62,500)

2023 1,25,000 1,25,000

5,00,000
5,00,000
Average Profit = 5

= ₹ 1,00,000
Goodwill = 1,00,000 × 3
= ₹ 3,00,000
21. BALANCE SHEET OF ADITYA LTD. (An Extract) as at...
Particulars Note No. ₹

I. EQUITY AND LIABILITIES

Shareholders' Funds

Share Capital 1 7,90,000

Note to Accounts
1. Share Capital ₹

Authorised Capital

1,00,000 Equity Shares of ₹ 10 each 10,00,000

Issued Capital

80,000 Equity Shares of ₹ 10 each 8,00,000

Subscribed Capital

Subscribed and Fully Paid-up

78,000 Equity Shares of ₹ 10 each 7,80,000

Forfeited Shares A/c (2,000 × ₹ 5) 10,000

7,90,000
22. JOURNAL
Date Particulars Dr. (₹) Cr. (₹)

(i) Rohit's Capital A/c Dr. 19,200

To Realisation A/c 19,200

(Being 40% of the stock taken over by Rohit at 20% discount)

(ii) No Entry

(iii) Cash A/c Dr. 22,500

To Realisation A/c 22,500

(Being stock sold for cash)

(iv) Realisation A/c Dr. 45,000

To Cash A/c 45,000

(Being creditors paid in cash at a discount of 10%)

23. JOURNAL
Date Particulars L.F. Dr. (₹) Cr. (₹)

Bank A/c Dr. 1,80,000

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 To Share Application A/c 1,80,000
(Application money received on 60,000 shares @ ₹ 3 per share)

Share Application A/c Dr. 1,80,000

To Share Capital A/c 1,50,000

To Share Allotment A/c

(Application money transferred to share capital account and the excess money to share 30,000
allotment account)

Share Allotment A/c Dr. 2,00,000

To Share Capital A/c

2,00,000
(Allotment money due on 50,000 shares @ ₹ 4 per share)

Bank A/c(1) Dr. 1,65,500

To Share Allotment A/c

1,65,500
(Allotment money received, except on 1,500 shares)

Share First Call A/c Dr. 1,00,000

To Share Capital A/c

1,00,000
(First call due on 50,000 shares @ ₹ 2 per share)

Bank A/c Dr. 97,000

To Share First Call A/c

97,000
(First call money received, except on 1,500 shares @ ₹ 2 per share)

Share Final Call A/c Dr. 50,000

To Share Capital A/c

50,000
(Final call due on 50,000 shares @ ₹ 1 per share)

Bank A/c Dr. 48,500

To Share Final Call A/c

48,500
(Final call received, except on 1,500 shares @ ₹ 1 per share)

Share Capital A/c Dr. 15,000

To Share Allotment A/c 4,500

To Share First Call A/c 3,000

To Share Final Call A/c 1,500

To Share Forfeiture A/c

6,000
(Forfeiture of 1,500 shares)

Bank A/c Dr. 8,000

Share Forfeiture A/c Dr. 2,000

To Share Capital A/c

10,000
(Re-issue of 1,000 shares at ₹ 8 per share)

Share Forfeiture A/c Dr. 2,000

To Capital Reserve A/c

2,000
(Gain on 1,000 forfeited shares transferred to Capital Reserve A/c)
Working Notes:

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FOR THE YOUTH & BY THE YOUTH - MOHNISH BEHL
 1. i. As Applicants for 20,000 shares were allotted = 15,000 shares
15,000
∴ Applicants for 2,000 shares were allotted = 20,000
× 2, 000 = 1,500 shares
Excess application money received on these:
(2,000 shares - 1,500 shares) × ₹ 3 = ₹ 1,500 shares

ii. ₹

Amount due on allotment on these shares = 1,500 shares × ₹ 4 6,000

Less: Excess received on application from these shares (1,500)

Amount not received on allotment 4,500

iii. Amount received on allotment: ₹

Total amount due on allotment 50,000 shares × ₹ 4 2,00,000

Less: Excess amount received on applications 10,000 Shares × ₹ 3 (30,000)

Balance Due 1,70,000

Less: Amount not received on allotment (4,500)

Net Amount received on allotment in Cash 1,65,500

2. Since only 1,000 shares have been re-issued, therefore the gain on 1,000 shares will be transferred to Capital Reserve.
Forfeited amount on 1,500 shares = ₹ 6,000
6,000
∴ Forfeited amount on 1,000 shares = ₹ 1,500
× 1, 000 = ₹ 4,000
Less: Loss on re-issue of 1,000 shares @ ₹ 2 per share = ₹ 2,000
Amount transferred to Capital Reserve = ₹ 2,000

24. Dr Revaluation Account Cr

Particulars Amt (Rs) Particulars Amt (Rs)

To Stock A/c 2,500 By Plant A/c 2,500

To Provision for Doubtful Debts A/c 150 By Loss Revaluation transferred to

W's Capital A/c (150×3/5) 90

R's Capital A/c (150×2/5) 60 150

2,650 2,650

Dr Partners' Capital Account Cr

Particulars W (Rs) R(Rs) B(Rs) Particulars W (Rs) R(Rs) B (Rs)

To Revaluation A/c 90 60 - By Balance b/d 20,000 15,000 -

To Goodwill A/c 2,400 1,600 - By Cash A/c - - 15,000

To Balance c/d 23,210 17,140 15,000 By Investment Fluctuation Fund A/c 2400 1600

By Premium for Goodwill A/c 3,300 2,200 -

25,700 18,800 15,000 25,700 18,800 15,000

Balance Sheet
Liabilities Amt (Rs) Assets Amt (Rs)

Creditors 17,500 Cash 23,000

Bank Loan 10,000 Debtors 10,000

Capital A/cs (-) Provision for Doubtful Debts (500) 9,500

W 23,210 Stock (12,500-2,500) 10,000

R 17,140 Patents 10,350

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 B 15,000 55,350 Plant (17,500+2,500) 20,000

Investments 10,000

82,850 82,850
Working Note
10,000+7,000+8,500+7,500
Average Profit = 4
= Rs8, 250

Goodwill = Average Profit × Number of Years’ Purchase

= 8,250× 2.5= Rs 20,625
B's share = 20, 625 × = Rs5, 500 which will be distributed among W and R in their sacrificing ratio, i.e. 3:2.
4

15

W's share = 3/5 × 5500 = 3300

R's share = 2/5 × 5500 = 2200
Loss on Revaluation transferred to
W's Capital A/c (150×3/5) = 90
R's Capital A/c (150×2/5) = 60
Distribution of Investment fluctuation Fund in old Ratio
W's share = 4,000×3/5 = 2400
R's share = 4,000×2/5 = 1600
Goodwill appearing in the balance sheet is to be written off in old sharing ratio
W's share = 4,000×3/5 = 2400
R's share = 4,000×2/5 = 1600
25. A's Capital A/c
Amount Amount
Date Particulars Date Particulars
(Rs.) (Rs.)

2011 2010

Jan 1 To Drawings A/c 2,000 Apr 1 By Balance b/d 20,000

Jan 1 To Interest on Drawings A/c 60 2011

Jan 1 To A's Executor's A/c (Balancing figure) 43,290 Jan 1 By Salary A/c (1,800× 9) 16,200

Jan 1 By B's Capital A/c 3,000

Jan 1 By C's Capital A/c 3,000

Jan 1 By Profit and Loss Suspense A/c (Profit) 2,250

By Interest on Capital A/c 900

45,350 45,350
======= =======
Working Notes:
A partner ceases to be a partner on his retirement or death and as such, the amount of claim of the retiring partner or the deceased
partner has to be settled by the firm. The problems that arise at the time of retirement of a partner from the firm are:
(1) Ascertainment of new profit sharing ratio,
(2) Ascertainment of gaining ratio,
(3) Treatment of goodwill,
(4) Adjustment for revaluation of assets and liabilities,
(5) Adjustment in respect of unrecorded assets and liabilities,
(6) Adjustment in respect of accumulated profits/losses,
(7) Methods of payment to retiring partner.
i. Calculation of A’s Share of Capital
Total fixed capital of the firm = Rs. 60,000
A’s share = 60, 000 × = Rs. 20,000
1

ii. Calculation of A’s Share of Goodwill

Last 3 years’ profit = 21,200 - 3,200 + 9,000 = Rs. 27,000

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 27,000
Average profit = 3
= Rs. 9,000
Firm’s Goodwill = Average Profit × Number of Years’ Purchase
= 9,000× 2 = Rs. 18,000
A’s share of goodwill = 18, 000 × = Rs. 6,000, to be contributed by B and C in their gaining ratio 3
1

i.e. 1 : 1, C will contribute = 6, 000 × 1

2
= Rs. 3,000, B will contribute = 6, 000 × 1

2
= 3,000
iii. Calculation of A's Share of Profit
9
A's share of profit = 9, 000 × × 1

3 12
= 2,250
iv. Calculation of Interest on A's Capital
Interest on A's capital = 20, 000 × 6

100
×
9

12
= Rs. 900
26. Journal of X Ltd.
Date Particulars L.F. Dr. (₹) Cr. (₹)

(i) Bank A/c Dr. 1,60,000

To Bank Loan A/c 1,60,000

(Loan taken from SBI)

Debenture Suspense A/c Dr. 2,00,000

To 12% Debentures A/c 2,00,000

(12% Debentures issued in favour of SBI as a collateral security)

(ii) Bank A/c Dr. 1,10,000

To Debenture Application and Allotment A/c 1,10,000

(Application money received on 1,000 12% Debentures)

Debenture Application and Allotment A/c Dr. 1,10,000

Loss on issue of Debentures A/c Dr. 5,000

To 12% Debentures A/c 1,00,000

To Securities Premium Reserve A/c 10,000

To Premium on redemption of debentures A/c 5,000

(Allotment of 12% debentures at a premium, redeemable at a premium)

(iii) Machinery A/c Dr. 4,60,000

To Beta Ltd. A/c 4,60,000

(Machinery purchased on credit)

Beta Ltd. Dr. 4,60,000

To 9% Debentures A/c 4,00,000

To Securities Premium Reserve A/c 60,000

(Purchase consideration discharged by issuing 9% Debentures at a premium)

Part B :- Analysis of Financial Statements
27. (a) All of these
Explanation:
All of these
28.
(b) Decrease Current ratio
Explanation:
If the current ratio is 2 : 1, then purchase of goods on credit would decrease current ratio.

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29.
(b) Cash withdrawn from the bank ₹ 7,000
Explanation:
Cash withdrawn from the bank ₹ 7,000

30.
(d) Investing Activity
Explanation:
Sale of shares of other company are part of investment which is now sold by the company. It is sale of investment, so it will
take place in investing activity.

31. The balance sheet prepared and items are allocated as per schedule 3 of the company's act , 2013 in order to bring uniformity.
Items Major Heads

(i) Provision for Tax Current Liabilities - short term provisions

(ii) Loans Payable on Demand Current Liabilities - other current liabilities

(iii) Computer and Related Equipment Non-current Assets (fixed assets)

(iv) Goods Acquired for Trading Current Assets- inventory

32. Revenue from Operations = ₹ 8,00,000
Gross Profit Ratio = 25%
⇒ Gross profit = × ₹ 8,00,000
25

100

⇒ Gross profit = ₹ 2,00,000

Cost of Revenue from Operations (Cost of Goods Sold) (COGS) = Revenue from Operations - Gross profit
= ₹ 8,00,000 - ₹ 2,00,000
= ₹ 6,00,000
Cost of Revenue from Operations
Inventory Turnover Ratio (ITR) =
Average Inventory
⇒ 5 = ₹ 6,00,000/Average Inventory
⇒ Average Inventory = ₹ 1,20,000
( Opening inventory + Closing Inventory)
Average Inventory = 2

( Opening inventory + Opening inventory + ₹ 20,000)

⇒ ₹ 1,20,000 = 2

Opening inventory = ₹ 1,10,000

⇒

⇒ Closing inventory = ₹ 1,10,000 + ₹ 20,000 = ₹ 1,30,000

33. Comparative Statement of Profit and Loss

for the year ended 31st March, 2009
Absolute Change Percentage Change
31st March, 2008 31st March, 2009
Particulars (Increase or Decrease) (Increase or Decrease)
(Rs.) (Rs.)
(Rs.) (%)

I. Revenue from Operations (Sales) 6 ,00,000 8,00,000 2,00,000 33.33

II.Total Revenue 6,00,000 8,00,000 2,00,000 33.33

III. Expenses:

(a) Cost of Revenue from Operations 3,60,000 4,00,000 40,000 11.11

(b) Administrative Expenses 48,000 60,000 12,000 25.00

IV. Total Expenses (a+b) 4,08,000 4,60,000 52,000 12.74

V. Profit before Tax ( I I - IV ) 1,92,000 3,40,000 1,48,000 77.08

VI. Income Tax @ 50% (96,000) (1,70,000) (74,000) (77 08)

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 VII. Profit after Tax ( V- VI) 96,000 1,70,000 74,000 77.08
Working Note
2008 2009

Revenue from operations 6,00,000 8,00,000

( - ) Gross profit (2,40,000) (4,00,000)

Cost of revenue from operations 3,60,000 4,00,000

Administrative expenses 20% on Gross profit i e 48,000 15% on Gross profit i e. 60,000
Comparative statement of P&L A/c is prepared as per Schedule 3, Part 1 of the Companies Act,2013. A comparative statement is
a document that compares a particular financial statement with prior period statements or with the same financial report generated
by another company. Analysts and business managers use the income statement, balance sheet and cash flow statement for
comparative purposes. The process reveals trends in the financials and compares one company's performance with another
business.
34. CASH FLOW FROM OPERATING ACTIVITIES
Particulars ₹ ₹

Cash flows from Operating Activities:

Net Profit before Tax (₹ 3,50,000 - ₹ 2,00,000) 1,50,000

Add: Provision for Tax 50,000

2,00,000

Add: Non - Cash and Non-operating Expenses:

Depreciation on Provided (WN 2) 40,000

Loss on sale of Machinery 18,000

Goodwill Amortised 5,000 63,000

Operating Profit before working Capital Charges 2,63,000

Add: Increase in Current Liabilities: Trade Payables 17,000

2,80,000

Less: Increase in Current Assets:

Inventory 75,000

Trade Receivables 67,000 1,42,000

Cash Generated from Operating 1,38,000

Less: Tax Paid 30,000

Cash Flow From Investing Activities: 1,08,000

Working Notes:
1. MACHINERY ACCOUNT
Dr. Cr.

Particulars ₹ Particulars ₹

To Balance b/d 2,00,000 By Accumulated Depreciation A/c 20,000

By Loss on Sale of Machinery A/c

To Bank A/c (Purchases) (Bal. Fig.) 1,60,000 18,000
(Statement of Profit & Loss)

By Bank A/c (Sale) 42,000

By Balance c/d

2,80,000

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 3,60,000 3,60,000
2. ACCUMULATED DEPRECIATION ACCOUNT
Dr. Cr.

Particulars ₹ Particulars ₹

To Machinery A/c 20,000 By Balance b/d 80,000

By Depreciation A/c
To Balance c/d 1,00,000 40,000
(Statement of Profit & Loss) (Bal. Fig.)

1,20,000 1,20,000

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FOR THE YOUTH & BY THE YOUTH - MOHNISH BEHL