LILAVATIBAI PODAR HIGH SCHOOL (ISC)
SUMMATIVE ASSESSMENT-2 (2024-2025)
Grade: 12
Subject: ACCOUNTS
Time: 3 hour Marks: 80
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(Candidates are allowed additional 15 minutes for only reading the paper. They
must NOT start writing during this time.)
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The intended marks for questions or parts of questions are given in the brackets [].
All calculations should be shown clearly.
All working, including rough work, should be done on the same page as, and
adjacent to, the rest of the answer.
This paper consists of 15 printed sides.
Answer all the questions.
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Section A
Q1. In subparts (i) to (iv) choose the correct options and in subparts (v) to (x)
answer the questions as instructed.
i Tarun and Vikas are partner sharing profits in the ratio of 3:2 with capitals of [1]
₹69,000 and ₹51,000 They admit Rehan as a partner with 1/5th share in the
profits. On Rehan’s admission, the firm’s goodwill is valued at ₹ 50,000, loss
on revaluation is determined at ₹ 5,000 and the firm had General Reserve of ₹
15,000. Calculate Rehan’s capital if he contributes capital proportionate to his
share of profits.
(a) ₹ 30,000
(b) ₹ 35,000
(c) ₹ 40,000
(d) ₹ 42,000
ii Assertion (A): When a running business of other company is purchased, and [1]
payment is settled by issue of shares, in such a case, if purchase consideration
is less than the net assets, then difference is credited to the Capital Reserve.
Reason (R): Capital Reserve is a capital loss for the company.
a) Both A and R are true and R is the correct explanation of A.
b) Both A and R are true but R is not the correct explanation of A.
c) A is true but R is false.
d) A is false but R is true.
iii A company issued 5,000, 10% Debentures of ₹100 each at a discount of 5%. [1]
To write off the capital loss, it has to use its profits in a certain order.
Chose the correct order in which the profits are used by the company to write
off the capital loss:
(P) Statement of Profit & Loss
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(Q) Capital Reserve
(R) Securities Premium
(S) Debentures Redemption Reserve
(a) P, Q, R
(b) P, Q, R, S
(c) S, R, Q, P
(d) R, Q, P
iv VK Ltd. forfeited 1200 shares of ₹50 each issued at for non-payment of [1]
₹12,000 on final call. Out of the forfeited shares some were reissued at ₹45
each and received ₹40500 and Gain on reissue ₹31,500 was transferred to the
Capital Reserve. Share Forfeiture Account debited at the time of Reissue:
(a) ₹6,500
(b) ₹3,500
(c) ₹4,500
(d) ₹2,500
v Vinod, Suraj and Satish were partners sharing profits equally. Suraj [1]
withdrew Rs.48,000 during the year for his personal use. Interest on drawings
@6% p.a. was charged whereas the partnership deed was silent about interest
on drawings. What is the rectifying entry?
vi Satya Ltd. has 10,000, 12% Debentures of ₹100 each due to be redeemed on [1]
31st May, 2024. Mention the heading and the sub-heading under which this
item would have been shown in the Balance Sheet of Satya Ltd. prepared as
at 31st March 2024?
vii Rafael Limited purchased machinery for ₹ 7,28,000 from Yatch Limited. The
company paid the amount by issue of equity shares of ₹ 10 each at a premium
of 12%. What will be the number of shares to be issued to Rohan Limited?
viii Asha and Deepti were partners in a firm sharing profits and losses in the
ratio of 3:1. Their fixed capitals were ₹3,00,000 and ₹2,00,000 respectively.
They were entitled to interest on capital @ 10% p.a. The firm earned a profit
of ₹20,000 during the year. What will be the amount of interest on capital
credited to Deepti?
ix Read the following extract of an article and answer the question which
follows.
‘The difference between the price paid to a company as a continuing concern
(going concern) and net worth can be individually identified and evaluated.
Such difference is the goodwill you get'
This is a situation where the price paid to a company is more than its net
worth.
(i) Identify the type of goodwill mentioned in the extract.
(ii) Give any two features of the goodwill so identified.
Source:
https://economicstimes.indiatimes.com/g/goodwill/profileshow/92988451.cms
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x Sam, Pam and Ram dissolved their partnership firm. Dissolution expenses
were ₹ 10,000; out of the said expenses, ₹4,000 were to be borne by Ram and
the balance was to be paid by the firm. ₹ 8,000 was paid by Ram and the
balance by the firm. What is the entry to record the above transaction?
Q2 Vicky, Vikram and Vikrant were partner in a firm sharing profits in the ratio [3]
of 5:3:2. The firm closed its books on 31st March every year, Vikrant died on
31th July, 2023. On the date of Vikrant’s death:
(i) His share of profit from the date of the last Balance Sheet to the date of his
death was determined at ₹ 12,800.
(ii) Amount due to Vikrant was determined as ₹ 1,89,600. The remaining
partners decided to pay him ₹ 2,10,000.
(iii) Vikrant’s Executor were paid ₹ 25,000 immediately and balance amount
was transferred to his Executor’s Loan Account to be paid in two equal
annual installments along with interest @ 6% per annum. You are required to
pass journal entries till the date of Vikrant’s death.
OR
Amar, Akbar and Narayan are partners sharing profits in the ratio of 14:5:6.
Akbar retired on 1st April, 2023. Amar acquired 5/25 of Akbar’s share. On the
date Akbar’s retirement, the goodwill of the firm is valued at 2 years
purchase of super profits based on average profits of last 3 years before
retirement which were: ₹ 50,000, ₹ 55,000 and ₹ 60,000 respectively.
Normal profit for the similar firm is ₹ 30,000.
Profit for the year 2023-24 after Akbar’s retirement was ₹1,00,000.
You are required to give necessary Journal entries to:
(i) Record the goodwill compensation to Akbar.
(ii) Distribute the profit for the year 2023-24 between the remaining partners
showing your workings.
Q3 On 1st April, 2023, Class Ltd. issued 1,000, 15% Debentures of ₹100 each at 8% [3]
discount payable on application. These debentures were to be redeemed at a
premium of 5% after five years. All the debentures were subscribed for by the
public. Interest on these debentures was to be paid annually by the company.
You are required to prepare for the year 2023-24:
(i) Prepare 15% Debentures Account.
(ii) Loss on issue of Debentures Account.
Q4 Excel Motor Ltd., an unlisted (Non-NBFC or HFC) company had 50,000, 8% [3]
Debentures of ₹ 100 each due for redemption out of profit on 31st March,
2024 at a premium of 5%. On 31st March, 2023 the company had an amount
of ₹5,00,000 in its Debentures Redemption Reserve. The Debenture
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Redemption Investment which was purchased on 30th April, 2023, was
realised at 96% on the date of redemption and debentures were redeemed on
the due date. You are required to pass Journal entries in the books of Excel
Motor Ltd. for the year 2023–24 (ignore interest on debentures).
OR
Pen Ltd (Non-NBFC or HFC) has outstanding 14,000 8% Debentures of ₹100,
redeemable at a premium of 10% as follows
On 31st March, 2025 7,000 debentures
On 31st March, 2026 5,000 debentures
On 31st March, 2027 2,000 debentures
You are required to prepare for the year 2025-2026
1. Debenture Redemption Reserve A/c
2. Debentures Redemption Investment A/c
Q5 Doremon, Shinchan and Nobita are partners sharing profits and losses in the [3]
ratio of 3:2:1. With effect from 1st April, 2022 they agree to share profits
equally. For this purpose, goodwill is to be valued at two year’s purchase of
the average profit of last four years which were as follows:
Year ending on 31st March,2019 ₹ 50,000 (Profit)
Year ending on 31st March,2020 ₹ 1,20,000 (Profit)
Year ending on 31st March,2021 ₹ 1,80,000 (Profit)
Year ending on 31st March,2022 ₹ 70,000 (Loss)
On 1st April, 2020 a Motor Bike costing ₹ 50,000 was purchased and debited
to travelling expenses account, on which depreciation is to be charged @ 20%
p.a by Straight Line Method. The firm also paid an annual insurance
premium of ₹ 20,000 which had already been charged to Profit and Loss
Account for all the years.
Q6 Following balances have been extracted from the books of Crystal Ltd. as at [6]
31st March, 2023.
Particulars ₹
Share Capital (Equity shares of ₹ 10 each) 8,00,000
Calls-in-arrears (5,000 shares @ ₹ 2 per share) 10,000
Calls-in-advance 12,500
Surplus in Statement of Profit and Loss (Cr) 12,50,000
Trade Creditors 1,00,000
Bills Receivables 30,000
Land and Building (at Net Value) 16,00,000
Sundry Debtors 40,000
Investment in Government Bonds 5,00,000
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Provision for Doubtful Debts 15,000
Discount on issue of Debentures 3,00,000
General Reserve 1,00,000
Provision for Tax 1,50,000
Goodwill 4,50,000
Additional Information:
Accumulated depreciation on Land and Building is ₹ 4,00,000.
₹ 2,00,000 to be transferred to General Reserve.
You are required to:
(i) Prepare the Notes to Accounts of each of the following:
(a) Reserves and Surplus
(b) Trade Receivables
(ii) Give the amount for each of the following:
(a) Subscribed Capital
(b) Current Liabilities
(c) Non-Current Assets
Q7 The Balance Sheet of Hamid and Imad who share profits and losses in the [6]
ratio of 3:2 as at 31st March, 2023 was as follows:
Liabilities Amount Assets Amount
Creditors 60,000 Cash at Bank 1,20,000
Employee Provident Debtor 1,30,000
Fund 20,000 Less Provision For
General Reserve 40,000 Doubtful Debt (10,000) 1,20,000
Current Account Stock 60,000
Hamid 60,000 Investment 1,00,000
Imad 40,000 Patents 20,000
Capital Account Goodwill 80,000
Hamid 168,000
Imad 1,12,000
5,00,000 5,00,000
They admit Afridi on 1st April, 2023, on the following terms:
(a) New Profit-sharing Ratio will be 5:3:2. Afridi brings ₹ 83,000 as his capital.
(b) Afridi brings ₹ 24,000 by cheque out of his share of goodwill of ₹ 40,000.
(c) 20% of General Reserve to be transferred to Provision for Doubtful Debts.
(d) ₹ 3,000 included in Sundry Creditors to be written back as no longer
payable
(e) Half of investments are to be taken by old partners in their profit-sharing
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ratio and remaining valued at ₹ 40,000.
You are required to pass necessary Journal entries in the books of the firm.
OR
Anita and Anil are partners in a firm. On 1st April, 2024, they admitted Jia as [6]
a third partner. The capital accounts of the partners after considering the
following adjustments on Jia’s admission are given below:
(a) Loss on revaluation due to depreciation on machinery @ 20% per annum.
(b) The General Reserve maintained in the old firm was not to be disturbed in
the reconstituted firm.
Partner’s Capital Accounts
Particular Anita Anil Jia Particular Anita Anil Jia
To Goodwiil 10,000 10,000 - By Balance b/d 90,000 80,000 -
To P/L A/c 5,000 5,000 - By Bank A/c 75,000
To - By Premium for
Revaluation 7,500 7,500 Goodwill A/c 25,000 25,000
To Balance c/d 1,17,500 1,07,500 75,000 By Jia Current
A/c 25,000 25,000
Additional information:
On 31st March, 2024, the firm of Anita and Anil, apart from plant and
machinery and a bank balance of ₹ 2,15,000, had no other asset.
You are required to prepare the Balance Sheet of the reconstituted firm on the
date of Jia’s admission after considering the information given above.
Q8 A, B and C were partners sharing profits in the ratio of 3 : 2 : 1. Their Balance [6]
Sheet as on 31st March, 2023, the date on which they dissolve their firm was
as follows:
Particular Amount Particular Amount
Capital A/c Land and Building 5,50,000
A 5,00,000 Stock 1,20,000
B 3,00,000 Debtor 3,27,000
C 1,00,000 Less PDD (7,000) 3,20,000
Bank Overdraft 12,000 Plant and Machinery 85,000
Creditor 1,88,000 Cash 25,000
11,00,000 11,00,000
It was agreed that:
(a) Assets realised: 60% of the Land and Building realised at 125%; stock
realised at 1,30,000; and all debtors were good.
(b) B took over 60% Plant and Machinery at 40,000 and remaining was taken
over by creditors against 60,000 of their book value.
(c) Realisation expenses to be borne by B for which he is to get a credit of
12,000. Realisation expenses paid out of firm's Bank account amounted to
10,500
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You are required to prepare Realisation Account.
Q9 Krish, Rahul and Aditya are trading in partnership and sharing profit in the [10]
ratio of 5:3:2, preparing accounts annually to 31st March.
Interest at the rate of 12% p.a. is allowed in respect of capital, 8% is allowed
or charged on current accounts and 8% charged on drawings. Rahul is
entitled to a rent of ₹16,000 per month for the use of his premises by the firm.
Krish has personally guaranteed that Aditya's share of profit, including
interest, shall not be less than ₹45,000 in respect of any year.
The partner’s Capital and Current Accounts on 31st March, 2023 were:
Capital Accounts Current Accounts
Krish 5,00,000 38,000
Rahul 3,00,000 18,000 (Dr.)
Aditya 4,00,000 54,000
Rahul brought in an additional capital ₹1,50,000 on 30th September, 2023 and
Aditya withdrew 80,000 on 1st January, 2024 out of its capital.
The partners made regular drawings as follows:
Krish (beginning of each quarter) ₹25,000
Rahul (end of each month) ₹6,000
Aditya (beginning of each month during 1 half of the year) ₹4,000
st
The firm's profit for the year ended 31st March, 2024 after rent was ₹3,00,000.
Prepare the firm's Profit and Loss Appropriation Account and Partners
Current Accounts for the year ended 31st March, 2024.
OR
Sharma and Verma are partners in a firm. On 1st April, 2023, their fixed
capital accounts showed a balance of ₹ 8,00,000 and ₹ 5,60,000 respectively. [10]
On this date, their current account balances were ₹ 45,000 (Cr.) and ₹ 18,000
(Dr.) respectively.
On 1st January, 2024, Sharma introduced additional capital of ₹1,20,000 while
Verma took a loan of ₹ 40,000 from the firm.
The clauses of their partnership deed provided for:
(a) Interest on capital and current account to be allowed at the rate of 10% per
annum.
(b) Interest on drawings to be charged at the rate of 12% p.a.
(c) Profits to be shared by them in the ratio of 5:2.
(d) 10% of the correct net profit to be transferred to Reserve Fund.
(e) Verma to get a commission of 10% on corrected net profits after charging
such commission.
(f) Interest on loan to be charged @ 10% p.a. from the partners.
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During the financial year 2023-24, Verma withdrew ₹ 8,000 in the beginning
of each month for six months starting 1st October, 2023 whereas Sharma
withdrew ₹ 30,000 on 1st July, 2023 and ₹ 90,000 on 30th November, 2023.
The net profit of the firm, before any interest for the financial year 2023-24
was ₹ 4,85,000.
You are required to prepare for the year 2023–24:
(i) Profit and Loss Appropriation Account.
(ii) Verma’s Loan Account.
Q10 Vijay Ltd. invited applications for the issue of 50,000 equity shares of ₹10 [10]
each at a premium of ₹ 8 per share. The amount was payable as
follows:
On Application: ₹ 4 (Including ₹ 2 premium)
On Allotment : ₹ 6 (Including ₹ 3 premium)
On First call : ₹ 5 (Including ₹ 1 premium)
On Final call : Balance amount
The issue was fully subscribed.
Gopal, holding 200 shares, did not pay the allotment money. Madhav,
holding 400 shares paid his entire amount along with allotment. Gopal
shares were forfeited immediately. The first call was made. Krishna, holding
100 shares, did not pay the first call money. Garish, holding 300 shares, paid
second call money along with first call. Krishna shares were forfeited
immediately. The second call was not made.
You are required to pass the necessary journal entries in the book of Vijay
Ltd.
OR
Royal Ltd. issued 1,00,000 shares of ₹ 10 each payable as:
₹2 on application ₹3 on allotment [10]
₹3 on first call ₹ 2 on second and final call.
Applications were received for 1,50,000 shares and shares were allotted on a
pro rata basis to the applicants of 1,20,000 shares. All shareholders paid the
allotment money except one shareholder who was allotted 2,000 shares.
These shares were forfeited. The first call was made after the shares were
forfeited. The forfeited shares were reissued @ ₹ 9 per share as ₹ 8 paid-up
after first call. The second and final call was not yet made. You are required
to:
(i) Prepare the Cash Book to record the above issue of shares.
(ii) Pass Journal entries in the Journal Proper.
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SECTION B
Q11 In subparts (i) and (ii) chose the correct option and in subparts (iii) to (v)
answer the questions as instructed.
(i) Priya Ltd. has a Current Ratio of 3 :1. Its inventories are ₹40,000 and Current
Liabilities are ₹75,000. What will be the Quick Ratio of the Company?
(a) 3:2
(b) 2:3
(c) 37:15
(d) 15:37
(ii) Read the following news item of ITC Ltd. and answer the question that
follows:
The company’s board declared an interim dividend of ₹ 6·25 per share for the
financial year ending
March, 2024. The dividend will be paid between February 26-28, 2024, to the
eligible shareholders.
(Source: The Hindu, Financial Express, 30 January, 2024)
Which of the following are the attributes of interim dividend?
P It is a charge against profits.
Q It is an appropriation of profits.
R Its declaration and payment will decrease the company’s Current Ratio.
S Its declaration and payment will increase the company’s Debt Equity Ratio.
(a) Only P
(b) Only Q
(c) P, R and S
(d) Q, R and S
(iii) State one transaction involving decrease in Current Ratio and no change in
working capital if Current Ratio is 2:1.
(iv) Which of the following statement is Correct?
(a) Decrease in Bank overdraft is part of operating activities.
(b) Interest Paid on loan is part of investing activities.
(c) Decrease in an Intangible fixed asset (without sale) is shown in operating
activities.
(d) Increase in Short term investment is subtracted from working capital.
(v) Explain the objective of Earning per Share.
Q12 From the following information of Ricky Ltd, you are required to prepare a
Common Size Balance Sheet
Shareholder Fund ₹ 11,50,000
Current Liabilities ₹ 3,50,000
Non Current Assets ₹ 9,40,000
Current Assets ₹ 6,10,000
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Q13 From the following particulars of Aanya Ltd., you are required to calculate:
Cash from Operating Activities.
Cash from Investing Activities.
Particulars 31/03/2024 31/03/2023
Plant and Machinery(at cost) 4,00,000 4,20,000
Provision for Depreciation 1,30,000 1,10,000
Investment 1,20,000 1,70,000
Inventories 20,000 10,000
Cash Credit 20,000 15,000
Provision for Tax 28,000 18,000
Statement of Profit and Loss 1,00,000 (90,000)
Interest on Cash Credit 20,000 10,000
Provision for Doubtful Debt 1,500 1,000
Additional information:
1. During the year 2023-24, a machine with a book value of ₹ 50,000
(accumulated depreciation 20,000) was sold at a loss of ₹ 6,000
2. All debtors are good.
3. Half of the Investments were sold on 1st April 2023 @ profit of 20% on cost.
New Investments were bought at the end of the year.
OR
You are required to prepare a Cash Flow Statement (AS-3) for the year 2023-
24 from the following:
Balance Sheets of Honesty Ltd.
as at 31st March, 2024 and 31st March, 2023
Particulars Note 31/03/2024 31/03/2023
No
Equity and Liabilities
1. Shareholder Funds
Share Capital 10,00,000 7,50,000
Reserve and Surplus 1,38,000 (29,500)
(Statement of P/L)
2. Non-Current Liabilities
Long Term Borrowings 5,00,000 3,50,000
(10% Debentures)
3.Current Liabilities
Short Term Borrowing (Bank Overdraft) - 50,000
Trade Payable 1,98,500 1,88,000
Short Term Provision 74,500 69,400
Total 19,11.500 13,77,900
Assets
1. Non-Current Assets
Property, Plant and Equipment and
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Intangible
- Property, Plant and Equipment 12,00,000 8,00,000
- Intangible 65,000 40,000
Non Current Investment 1,37,000 80,000
2. Current Assets
Inventories 2,44,700 1,76,500
Trade Receivables 2,10,000 2,25,900
Cash and Cash Equivalents 54,300 55,500
Total 19,11,500 13,77,900
Additional information:
1. Issued the 10% Debentures on 1st October, 2023, as purchase consideration
for the purchase of Plant and Machinery.
2. They sold a machinery with a book value of ₹ 1,37,000 (accumulated
depreciation ₹ 2,40,000) at a profit of ₹ 13,000. Depreciation charged during
the year was ₹ 95,000.
3. The proposed dividend for the years ended 31/03/2024 and 31/03/2023 were
80,000 and ₹ 68,000.
Q14 From the following information calculate any three ratio
1. Trade Payable Turnover Ratio
2. Working Capital Turnover Ratio
3. Quick Ratio
4. Operating Ratio
Inventory Turnover Ratio 12 times
Current Ratio 1.85 : 1
Opening Inventories 88,000
Closing Inventories 1,42,000
Gross Profit ratio 25%
Creditors 1,38,000
Non Current Liabilities 7,20,000
Total Debt 9,00,000
Operating Profit 2,65,000
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