(Paper) Accounts Class - XII Sample paper - 1999 (Set - 4) - SOLVED
Disclaimer: This website is NOT associated with CBSE, for official website of CBSE visit - www.cbse.gov.in
Accounts
Class - XII
Sample Paper - 1999 (Part - 4)
(Solved)
Q1)
List any two items appearing on the credit side of a partner's current account.
(Marks 2)
Ans1) (i) Interest on partner's capital.
(ii) Partner's share of profit.
Q2)
On April 1st, 1998 an existing firm had assets of Rs. 75,000/- including cash of
Rs. 5,000/-. The partner's capital account showed a balance of Rs. 60,000/- and
reserve constituted the rest. If the normal rate of return is 20% and the
goodwill of the firm is valued at Rs. 24,000/- at 4 year purchase of super
profits, find the average profits of the firm. (Marks 3)
Ans2) Goodwill = super profits x 4 year purchase
24000 = super profits x 4
super profits = 6000
Normal profits = Capital employed x Normal rate of return
= 75000 x 20/100
= 15000
(...Capital employed = Assets of the firm = 75000)
...Average profit = Normal profit + Super profit
= 15000 + 6000
Average profit = Rs. 21000
Q4) (a) A and B are partners in a
firm sharing profits equally. They had advanced to the firm a sum of Rs.
30,000/- as a loan in their profit sharing ratio on July 1st, 1998. The
partnership deed is silent on the question of interest on loan from partners.
Compute the interest payable by the firm to the partners, assuming the firm
closes its books on December 31st. (Marks 3)
(b) A, B and C are partners sharing profits in the ratio of 5 : 4 : 1. C is
given a guarantee that his share of profits in any given year would be Rs.
5000/-. Deficiency, if any, would be borne by A and B equally. The profits for
the year 1998 amounted to Rs. 40000/-. Pass necessary entries in the books of
the firm. (Marks 3)
Ans4) (a) According to the provisions of the Indian Partnership
Act, 1932, interest @ 6% p.a. is payable to the partners on the loan advanced by
them to the firm.
Total loan = 30000
A's share of loan = 30000 x 1/2 = 15000
B's share of loan = 15000
... Interest on A's loan = 15000 x 6/100 x 6/12 = 450
Interest on B's loan = 15000 x 6/100 x 6/12 = 450
... Total Interest payable by firm =
450 + 450 = Rs. 900
(b) Working Notes :
C's share in profit = 1/10 x 40000 = 40000
C's guarantee = 5000
C's deficiency = 5000 - 4000 = 1000
The deficiency is to be borne equally by A and B.
A's share of profit = 5/10 x 40000 = 20000
Less : C's guarantee 500
A' profit = 19500
B's share of profit = 4/10 x 40000 = 16000
Less: C's guarantee 500
B's profit = 15500
Thus, the entry is :
Journal
| Date |
Particulars
|
LF |
Amt. (Dr.)
|
Amt. (Cr.)
|
| Profit and Loss
A/C Dr. To Pand L Appropriation A/C (Being the transfer of profits to Pand L Appropriation A/C) Pand L Appropriation A/C Dr. To A's Capital A/C To B's Capital A/C To C's Capital A/C (Being profits distributed among the partners) A's Capital A/C Dr. B's Capital A/C Dr. To C's Capital A/C (Being the deficiency of C's guarantee met by A and B) |
40000 40000 500 500 |
40000 20000 16000 4000 1000 |
Q5) M and N were partners sharing
profits in the ratio of 3 : 2. On the date of dissolution their capitals were -
M: Rs. 7,650/-, N: Rs. 4,300/-. The creditors amounted to Rs. 27,500/-. The
balance cash was Rs. 760/-. The assets realised Rs. 25,430/-, the expenses on
dissolution were Rs. 540/-. All partners were solvent.
Close the books of the firm, showing the Realisation, Capital and Cash accounts.
(Show the working clearly).
Ans5) Working notes :
The amount of sundry assets at the time of dissolution of the firm is not given
in the question. Thus, the Balance Sheet on the date of dissolution is prepared
to know that.
|
Balance Sheet of M and N as on (date of dissolution) |
|||
| M's Capital N's Capital Creditors |
7650 4300 27500 39450 |
Cash Sundry assets (balancing figure) |
760 38690 39450 |
|
Realisation A/C |
|||
|
To Sundry assets
To Cash (Creditors paid) To Cash A/C (Expenses paid) |
38690 |
By Creditors
By Cash A/C (Assets realised) By loss transferred to M's Capital A/C N's Capital A/C |
27500 |
| Dr. |
Partner's Capital A/C |
Cr |
|||
|
Particulars
|
M
|
N
|
Particulars
|
M
|
N
|
|
To Realisation A/C (loss)
|
8280 |
5520 |
By balance b/d
By Cash (bal fig.) |
7650 |
4300 |
| Dr |
Cash Account
|
Cr | |
|
To Balance b/d
To M's Capital A/C To N's Capital A/C To Realisation A/C (Sales of assets) |
760 |
By Realisation A/C
(Creditors) By Realisation A/C (Expenses) |
27500 540 28040 |
OR
Rohit and Bal sharing profits in the ratio of 5 : 3 had following balance
Sheet as on December 31,1998 :
|
Liabilities
|
Amt.
|
Assets
|
Amt.
|
| Creditors Bills Payable General Reserve Capital Accounts: Rohit Bal |
20,000 8,000 28,000 80,000 40,000 1,76,000 |
Goodwill Building Plant Furniture Debtors Bills Receivables Stock Bank |
30,000 34,000 27,500 4,000 32,500 15,000 22,500 11,000 1,76,000 |
On January 1st, 1999, they decided to admit Khosla into the partnership giving
him 1/5th share. He brings in Rs. 50,000/- as his share of capital. The partners
decide to revalue the assets as follows:
Goodwill Rs. 50,000/-, Plant Rs. 25,000/-, Debtors Rs. 31,000/-, Stock Rs.
32,500/-, Building Rs. 40,000/-, Furniture Rs. 2,000/-, Bills Receivables Rs.
12,500/-.
The partners also decided not to show goodwill in the books of the new firm. You
are required to show the journal entries and prepare the Revaluation A/C. (Marks
12)
Ans.5
| Dr | Revaluation Account |
Cr |
|
|
Particulars
|
Amt.
|
Particulars
|
Amt
|
|
To Plant A/C
To Prov. for doubtful debt To Furniture A/C To B/R To pft tfd to Rohit's Capital A/C Bal's Capital A/C |
2000 |
By Stock A/C
By Building A/C |
10000 |
Journal
| Date | Particulars | LF | Amt. (Dr.) | Amt. (Cr.) |
| Goodwill A/C
Dr To Rohit's Capital A/C To Bal's Capital A/C (Being goodwill raised between old partners in their old ratio) Rohit's Capital A/C Dr Bal's Capital A/C Khosla's Capital A/C To Goodwill A/C (Being goodwill written off amongst all the partners) Bank A/C Dr To Khosla's Capital A/C (Being the amount brought in by khosla) Revaluation A/C Dr To Plant A/C To Prov. for doubtful debts To Furniture A/C To B/R (Being the decrease in the value of assets recorded) Stock A/C Dr Building A/C Dr To Revaluation A/C (Being the increase in the value of assets recorded) Revaluation A/C Dr To Rohit's Capital A/C To Bal's Capital A/C (Being the tfr. of profit on revaluation tfd to all partners in old ratio) General Reserve Dr To Rohit's Capital A/C To Bal's Capital A/C (Being the amount of general reserve tfd. to old partners in old ratio) |
20000 25000 15000 10000 50000 8000 10000 6000 8000 28000 |
12500 7500 50000 50000 2000 1500 2000 2500 16000 5000 3000 17500 11500 |
Q6)
A, B and C were partners in a firm. On 1.1.98 their capitals stood at Rs.
50,000/-, Rs. 25,000/- and Rs. 25,000/- respectively. As per the provisions of
the partnership deed:
(a) C was entitled for a salary of Rs. 1,000/- pm.
(b) Partners were entitled to interest on capital at 5% pa..
(c) Profits were to be shared in the ratio of capitals.
The net profit for the year 1998 of Rs. 33,000/- was divided equally without
providing for the above terms.
Pass an adjustment entry to rectify the above errors. (Marks 4)
Ans6) Working Notes :
|
P/L Appropriation A/C |
|||
|
To C's capital A/C
(Salary) To A's capital A/C (Interest on Capital) To B's capital A/C (Interest on Capital) To C's capital A/C (Interest on Capital) To Pft tfd to A's capital A/C B's capital A/C C's capital A/C |
|
By
Profits |
33000 |
Statement
|
A
|
B
|
C
|
|
|
Salary |
2500 8000 10500 11000 500 (Dr.) |
1250 4000 5250 11000 5750 (Dr.) |
12000 1250 4000 17250 11000 6250 (Cr.) |
Thus, the adjustment entry is,
Journal
| Date |
Particulars
|
LF |
Amt. (Dr.)
|
Amt. (Cr.)
|
| A's
Capital A/C. B's Capital A/C To C's Capital A/C (Being adjustment of profits as per the terms of deed) |
500 5750 |
6250 |
Q13) The following information is provided to you:
| Share Capital | Rs. 1,60,000/- |
| General Reserve | Rs. 80,000/- |
| 15% loan | Rs. 1,00,000/- |
| Sales for the year | Rs. 2,00,000/- |
| Tax paid during the year | Rs. 40,000/- |
| Profit after interest & Tax | Rs. 80,000/- |
From the above information, calculate any three of the following ratios :
(a) Debt Equity Ratio
(b) Capital Turnover Ratio
(c) Interest coverage ratio
(d) Return on Investment
(e) Debt to total funds ratio (Marks 6)
Ans13) (a) Debt Equity Ratio = Long term debts/Shareholders' funds
Shareholders funds = Share capital + General Reserve + Profit
= 160000 + 80000 + 80000
= 320000
Thus, the ratio = 100000/320000
= 5 : 16
(b) Capital Turnover Ratio = Sales/Capital Employed
Capital Employed = Share capital + General Reserve + 15% loan + Profit
= 160000 + 80000 + 100000 + 80000
= 420000
Thus, the ratio = 200000/420000
= .47 times
(c) Interest coverage ratio = (Net profit before interest, tax and dividend) /
Interest charges
Net profit before interest, tax = Net profit after interest, tax + tax +
interest
= 80000 + 15000 + 40000
= 135000
Interest charges = 15/100 x 100000
= 15000
Ratio = 135000/15000
= 9 times
(d) Return on Investment = (Net profit before interest, tax, dividend/capital
Employed) x 100
= (135000/420000) x 100
= 32.14%
(e) Debt to total funds ratio = Long term debts/capital employed
= 100000/420000
=1 : 4.2
Q14)
What is analysis of financial statements? Briefly explain the techniques of
analysing these statements. (Marks 6)
Ans14) Meaning of analysis of financial statements :
Analysis of financial statements is a study of relationships among the various
financial factors in a business. It is an attempt to determine the meaning and
significance of financial statement data so that the forecast may be made
regarding future earnings, profitability and the likes. Thus it is such
treatment to information disclosed in financial statement to afford a full
diagnosis of profitability and financial position of the firm.
Techniques of Financial Statement Analysis :
They are broadly classified into three categories:
a) Cross Sectional Analysis or Inter firm comparison.
b) Time series Analysis or Intra comparison.
c) Cross Sectional-cum-time series analysis.
Cross Sectional Analysis : Under this, financial
statements of one firm are compared with financial statements of one or more
other similar firms for profitability, solvency, liquidity, credit worthiness
and the likes. It prepares the comparative financial characteristics of an
enterprise with other comparable enterprises.
Time Series Analysis : This reflects the movement of
various financial characteristics. Under this the financial characteristics of a
firm are compared over a number of years.
Cross Sectional-cum-Time Series Analysis: This is the
most effective approach of financial statement analysis and compares the
financial characteristics of two or more enterprises for a defined accounting
period.
Q17)
State the reasons whether the following would result in an inflow, outflow or no
flow of funds. Attempt any four:
(a) Redemption of debentures;
(b) Debentures converted as redeemable preference shares;
(c) Amount transferred to provision for taxation;
(d) Tax refund;
(e) Obtained loan for mortgage. (Marks 4)
Ans17) (a) Redemption of debentures :
Outflow of funds for cash will be paid to redeem the debentures. As cash is
current and the debentures non-current, so there is outflow of funds.
(b) Debentures converted as
preference shares :
No flow of funds because both the items of the transaction, i.e. debentures and
preference shares are non-current.
(c) Amount transferred to
prov. for taxation :
No flow of funds because the terms involved are non-current.
(d) Tax refund : Tax refund will have inflow of funds as the refund of tax will
increase the cash balance.
(e) Repaid loan on mortgage :
Outflow of funds as cash is decreasing for repayment of loans.
Q18) From the following Balance Sheet prepare Schedule showing changes in Working Capital and Funds Flow Statement:
Balance Sheet
| Liabilities | 1998 Rs. |
1997 Rs. |
Assets | 1998 Rs. |
1997 Rs. |
| Share
Capital Debentures Current Liabilities General Reserve PandL Account |
4,50,000 3,50,000 1,50,000 2,10,000 70,000 12,30,000 |
4,00,000 2,40,000 1,20,000 2,00,000 9,60,000 |
Fixed
Assets Investments Current Assets Discount on shares PandL Account |
7,20,000 1,30,000 3,75,000 5,000 12,30,000 |
6,10,000 50,000 2,40,000 10,000 50,000 9,60,000 |
Additional information :
(a) Depreciation charged on Fixed Assets was Rs. 60,000/-.
(b) A machine of book value of Rs. 40,000/- was sold for Rs. 25,000/-.
(Marks 12)
Ans18)
Schedule of changes in Working Capital
| Particulars | 1997 | 1998 | Inc. | Dec. |
| Current
Assets A Current liabilities B Working Capital A - B Increase in working capital |
240000 120000 120000 105000 225000 |
375000 150000 225000 225000 |
135000 135000 |
30000 105000 135000 |
Funds flow Statement for the year ended
| Particulars | Amt. | Particulars | Amt. |
|
Funds from operation
Issue of Shares Issue of debentures Sale of machine |
210000 |
Purchase of Investment
Purchase of Fixed Assets Increase in working capital |
80000 |
Working Notes:
Fixed Assets A/C
|
To balance b/d
To Cash A/C (bal fig) (Purchases) |
610000 |
By P/L A/C (Depreciation)
By Cash A/C (Sale) By P/L A/C (Loss on Sale) By balance c/d |
60000 |
Adjusted P/L A/C
|
To balance b/d
To Fixed Assets (Depreciation) To Fixed Assets (loss on sale) To tfr to General Reserve To Discount on shares To balance c/d |
50000 |
By
funds from operation |
210000 |