MID TERM EXAMINATION 2024-25

CLASS : XII
SUBJECT : ACCOUNTANCY
TIME : 3 HRS. M.M. : 80
General Instructions :—
i) This question paper contains 34 questions. All questions are compulsory.
ii) Q. No. 1 to 20 carries 1 mark each.
iii) Q. No. 21 to 26 carries 3 marks each.
iv) Q. No. 27 to 29 carries 4 marks each.
v) Q. No. 30 to 34 are long answer type questions carries 6 marks each.
vi) There is no overall choice. However an internal choice has been provided in few
questions of each of the parts.

1. A and B are partners in a firm with the capitals of 2,00,000 and 1,50,000 respectively..

If the firm earned a profit of 17,500 for the year ended 31st March 2023, the interest
on capital @ 10% would be :

a) 15,000 and 20,000 b) 8,750 and 8,750

c) 20,000 and 15,000 d) 10,000 and 7,500

2. A, B, C were partners in a firm sharing profits and losses in the ratio 4 : 3 : 3 with effect
from 1st April 2024. They agreed to share profits equally. Due to change in the PSR B’s
gain or sacrifice will be :

1 1 1 1
a) Sacrifice b) Gain c) Sacrifice d) Gain
30 30 15 15

3. The debentures which do not have a specific charge on the assets of the company are

a) Redeemable Debentures b) Unsecured debentures

c) Zero Coupon Rate Debentures d) No Redeemable Debentures.

4. If a share of 100 on which 70 has been paid is forfeited then at which minimum
price can it be reissued ?

a) 100 b) 30 c) 70 d) 130

OR

If a share of 10 issued at a premium of 2 per share on which 8 (including premium)

has been called and 6 (including premium) has been paid by the share holder, is
forfeited, then share Capital Account will be debited with :

a) 10 b) 8 c) 4 d) 6
ACCOUNTANCY XII - (2)

5. M Ltd issued 6000, 6% debentures of 100 each at 96 per debentures 6% debentures

a) 5,76,000 b) 24,000 c) 6,00,000 d) 60,000

6. Which of the following items cannot be recorded in the Capital account of partners if
the Capital accounts of partners are fixed ?

a) Drawings b) opening balance of Capital

c) Withdrawal of Capital d) Additional Capital introduced

7. A, B and C who were sharing profits and losses in the ratio of 4 : 3 : 2 decided to share
the future profits and Losses in the ratio of 2 : 3 : 4. An extract of their Balance sheet as
at 31st March 2023 is

Liabilities Amount Assets Amount

Workmen Compensation Reserve 65,000

B's share of loss amounted to 5000. The claim for workmen Compensation would
be :

a) 15000 b) 70,000 c) 50,000 d) 80,000

OR

Increase and decrease in the value of assets and liabilities are recorded through

a) Partner's Capital A/c b) Revaluation A/c

c) Balance sheet d) Profit and Loss Appropriation A/c

8. Raj, Sohan and Tushar are partners in a firm sharing profits and losses in the ratio of
2 : 2 : 1. Tushar is guaranteed a minimum amount of 40,000 as share of profit every
year. Any deficiency arising on that account shall be borne by Raj. If the profit of the
firm for the year ending 31st March 2024 is 1,60,000, Raj will bear a deficiency of :

a) 8000 b) 48,000 c) 40,000 d) 4,000

OR

A and B are partners. B draw a fixed amount at the end of every quarter. Interest on
drawings is charged @ 15% p.a. At the end of the year Interest on B's drawings amounted
to 9000 Drawings of B were :

a) 24,000 per quarter b) 40,000 per quarter

c) 30,000 per quarter d) 80,000 per quarter

9. Ashu and Beena are partners sharing profits and losses in the ratio of 2 : 1. Chirag is
admitted as a new partner with ¼ share in profits which he acquires equally from Ashu
and Beena. The New PSR between three will be :

a) 13 : 5 : 6 b) 13 :2 :1 c) 2 : 13 : 5 d) 1 : 1 : 1

10. State any two grounds on the basis of which court may order for the dissolution of the
firm.

11. M, N and P are partners in a firm, sharing profit in the ratio of 2 : 2 : 1. Their capital
accounts stand as 1,00,000, 1,00,000 and 50,000 respectively. N retired from the
firm and balance in the reserve on that date was 30,000. If goodwill of the firm is
60,000 and profit on revaluation is 14,100, what amount will be transferred to N's
loan account ?

a) 1,41,640 b) 17,640 c) 1,01,640 d) None of these

OR

Amay, Bina and Chander are partners in a firm with capital balances of 50,000,
70,000 and 80,000 respectively on 31st March, 2022. Amay decides to retire from
the firm on 31st March, 2022. With the help of the information provided, calculate the
amount to be paid to Amay on his retirement.

There existed a general reserve of 7,500 in the balance sheet on that date.

The goodwill of the firm was valued at 30,000.

Gain on revaluation was 24,000.

a) 88,500 b) 90,500 c) 65,375 d) 70,500

12. On the basis of following information how much final payment will be made to a partner
on firm’s dissolution ?

Credit balance of capital account of the partner was 50,000, share of loss on realisation
amount to 10,000 firms liability taken over by him was for 8,000.

a) 32,000 b) 48,000 c) 40,000 d) 52,000

13. Himanshu Ltd purchased a running business for a sum of 1,50,000 payable by issue
of 10,000 equity shares of 10 each at a premium of 2 per share and balance in
cash. The amount paid in cash was :

a) 50,000 b) 20,000 c) 30,000 d) 40,000

14. M and N are partners in a firm having Capital of 1,20,000 and 80,000 respectively..
1
S is admitted as a new partner in a firm for th share in future profits. S brings
5
1,00,000 as his capital. The goodwill of the firm on S’s admission —

a) 5,00,000 b) 2,00,000

c) 3,00,000 d) 1,00,000

15. If a partner withdraws a fixed amount at the end of each quarter, Interest on drawings
will be charged for ________________ months.

a) 9 b) 7½ c) 6 d) 4½

OR

On 1st January, 2023, Abhishek, a partner, advanced a loan of 3,00,000 to the firm. In
the absence of a partnership agreement, the amount of interest on the loan for the year
ending 31 March, 2023 will be :

a) 18,000 b) 4,500

c) 9,000 d) No interest will be provided

2. Assertion (A) : In a partnership firm, at the time of admission, the new partner brings
in an agreed amount of capital either in cash or in kind.

Reason (R) : In a partnership firm, at the time of admission, the new partner
acquires the right to share the assets and the profits of the partnership
firm.

Choose the correct option from the following :

a) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation
of Assertion (A).

b) Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct
explanation of Assertion (A).

c) Assertion (A) is incorrect, but Reason (R) is correct.

d) Assertion (A) is correct, but Reason (R) is incorrect.

Read the following hypothetical situation and answer question number (i) to (ii) :

Puneet and Raju are partners in a clay toys making firm. Their capitals were 5,00,000
ACCOUNTANCY XII - (5)

and 10,00,000 respectively. The firm allowed Puneet to get a commission of 10% on
the net profit before charging any commission and Raju to get a commission of 10% on
the net profit after charging all commission. Following is the Profit and Loss Appropriation
Account for the year ended 31st March, 2022.

Profit and Loss Appropriation Account

Dr. for the year ended 31st March 2022 Cr.

Particulars ( ) Particulars ( )

To Puneet’s Capital A/c 44,000 By Profit and Loss A/c _____

(Commission) (_____ × 10/100)

To Raju’s Capital A/c _____

(Commission)

To Profit share transferred to :

Puneet’s Capital A/c _____

Raju’s Capital A/c _____

17. i) Raju's commission will be :

a) 40,000 b) 44,000 c) 36,000 d) 36,440

18. ii) Puneet's share of profit will be :

a) 1,80,000 b) 1,44,000 c) 2,16,000 d) 1,60,000

19. Which of the following statement is/are true ?

i) Authorized Capital < Issued Capital

ii) Authorized Capital  Issued Capital

iii) Subscribed Capital  Issued Capital

iv) Subscribed Capital > Issued Capital.

a) (i) only b) (i) and (iv) Both c) (ii) and (iii) Both d) (ii) only

20. The Portion of the Capital which can be called-up only on the winding up of the company
is ____________.
ACCOUNTANCY XII - (6)

21. Meena, Raj and Vishal are partners in a firm sharing profit and losses in the ratio of
3 : 2 : 5. With effect from 1st April 2023, they decided to share profits and losses
equally. Their Balance sheet showed a General Reserve of 1,00,000. The goodwill of

the firm was valued at 2,00,000. Pass necessary Journal entries for the above on
account of change in the profit sharing ratio

22. Sumit and Pallavi are partners with capital of 40,000 and 20,000 on which they
agree to allow interest @ 6% p.a. Their respective share of profit is 2 : 3. The profits
prior to interest for the year are 3,000. Calculate interest on capital and show Profit
and Loss Appropriation Account when (a) interest on capital is not a charge on profits
(b) interest on capital is a charge on profits.

OR

Ram, Shyam and Mohan are partners in a firm sharing profits and losses in the ratio of
2 : 1 : 2. Their fixed capitals were 3,00,000, 1,00,000 and 2,00,000 respectively..
Interest on capital for the year ended 31st March, 2019 was credited to them @9% p.a.
instead of 10% p.a. The profit for the year before charging interest was 2,50,000.
Pass necessary adjustment entry.

23. On 1st April, 2023, the books of the firm of Kashish and Sagar showed assets of

9,00,000 including cash of 32,000 and bank balance of 1,68,000. The partners'

capital accounts showed a balance of 6,00,000 and reserves constituted the rest. If

the normal rate of return is 8% and the goodwill of the firm is valued at 4,00,000 at 5
years purchase of super profits, find the average profits of the firm.

24. P Ltd invited application for 3000, 11% debentures of 100 each at a discount of 6%.
The full amount was payable on application. Applications were received for 3600
debentures. Applications for 600 debentures were rejected and the Application money
was refunded. Debentures were allotted to the remaining applicants. Pass the necessary
journal entries in the books of P Ltd.

OR

D Ltd Purchased assets of 2,20,000 from M/s F Ltd. 50% of the amount was paid by

Bank draft and the balance amount was paid by issuing 9% debentures of 100 each
at a premium of 10% in favour of F Ltd.

Pass necessary Journal entries in the Books of D Ltd for the above.
ACCOUNTANCY XII - (7)

25. Pass necessary Journal entries on the dissolution of a partnership firm in following
cases :

i) Expenses of dissolution were 9000.

ii) Naveen a partner agreed to look after the dissolution work for which he was allowed a
remuneration of 3,000. Naveen also agreed to bear all expenses of dissolution. Actual
expenses amounted to 2500 were paid by firm.

iii) Expenses of dissolution 3400 paid by the Partner Veenu.

26. Sheetal and Raman share profit equally. They admit Chinki into partnership. Chinki
pays only 1000 for premium out of his share of goodwill of 1800 for ¼ share of
profit. Goodwill Account appears in the books at 6,000. All partners have decided not
to show goodwill in the books of the new firm. Do Journal entries.

27. On 1st April, 2019, Vishwas Ltd. was formed with an authorised capital of 10,00,000
divided into 1,00,000 equity shares of 10 each. The company issued prospectus
inviting applications for 90,000 equity shares. The company received applications for
85,000 equity shares. During the first year, 8 per share were called. Ram holding
1,000 shares and Shyam holding 2,000 shares did not pay the first call of 2 per
share. Shyam's shares were forfeited after the first call and later on 1,500 of the forfeited
shares were re-issued at 6 per share, 8 called up.

Show the following :

a) Share Capital in the Balance Sheet of the company as per Schedule III Part I of the
Companies Act, 2013.

b) Also prepare 'Notes to Accounts' for the same.““

28. A, B and C were partners. Their capitals were 30,000, 20,000 and 10,000
respectively. According to the partnership deed, they were entitled to an interest on
capital @ 5% p.a. In addition, B was also entitled to draw a salary of 500 per month.
C was entitled to a commission of 5% on the profits after charging the interest on
capital, but before charging the salary payable to B. The net profits for the year were
30,000, distributed in the ratio of their capitals without providing for any of the above
adjustments. The profits were to be shared in the ratio of 2 : 2 : 1. Pass the necessary
adjustment entry showing the workings clearly.
ACCOUNTANCY XII - (8)

OR

Kapil and Manoj are partners with Capital of 5,00,000 and 6,00,000 each. They

admit Maya as a partner with ¼ share in future profits. Maya brings 4,00,000 as her

Capital. General Reserve is 1,20,000 on this date. Profit and Loss Account (Dr) Balance

appears in the books is 1,00,000. Pass Journal entry for recording of Goodwill. Show
your working clearly.

29. Aditi, Renu and Varsha were partners in a firm sharing profits and losses in the ratio of
3 : 2 : 5. On 31st March, 2023 their Balance sheet was as under :

Balance sheet of Aditi, Renu and Varsha as at 31st March 2023

Liabilities Amount ( ) Assets Amount ( )

Capitals Building 6,00,000

Aditi 5,00,000 Machinery 3,00,000

Renu 4,00,000 Stock 1,00,000

Varsha 3,00,000 12,00,000 Patents 1,50,000

General Reserve 1,00,000 Debtors 2,50,000

Creditors 2,00,000 Cash 1,00,000

15,00,000 15,00,000

Varsha died on 31st July, 2023. The partnership deed provided for the following, on the
death of a partner :

i) Interest on capital was to be provided @ 6% p.a.

ii) Goodwill of the firm was to be valued at 3 years purchase of average profits of the
previous five years which were 90,000.

iii) Varsha's share of profit or loss till the date of death was to be calculated on the basis of
sales. Sales for the year ended 31st March, 2023 amounted to 60,00,000 and that

from 1st April, 2023 to 31st July, 2023 amounted to 15,00,000. The profit for the year

ended 31st March, 2023 was 12,00,000.

Prepare Varsha's Capital Account to be rendered to her executors.

30. Parth and Shivika were partners in a firm sharing profits in the ratio of 3 : 2. The Balance
Sheet of the firm on 31st March, 2014 was as follows :
ACCOUNTANCY XII - (9)

Liabilities Amount ( ) Assets Amount ( )

Sundry Creditors 80,000 Bank 1,72,000

Shivika’s Sister’s Loan 20,000 Debtors 27,000

Capital A/cs Stock 50,000

Parth 1,75,000 Furniture 2,20,000

Shivika 1,94,000 3,69,000

4,69,000 4,69,000

On the above date, the firm was dissolved. The assets were realised and the liabilities
were paid off as follows :

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

ii) Debtors realised 26,000.

iii) Stock was taken over by Shivika for 29,000.

iv) Shivika's sister's loan was paid off along with interest of 2,000.

v) Expenses on realisation amounted to 5,000.

Prepare Realisation Account, Partners' Capital Accounts and Bank Account.

OR

Pass the necessary journal entries for the following transactions on the dissolution of
the firm of Sudha and Shiva after the various assets (other than cash) and outside
liabilities have been transferred to Realisation Account :

i) Sudha agreed to pay off her husband's loan 19,000.

ii) A debtor whose debt of 9,000 was written off in the books, paid 7,500 in full settlement.

iii) Shiva took over all investments at 13,300.

iv) Sundry creditors 10,000 were paid at 9% discount.

v) Realisation expenses 3,400 were paid by Sudha for which she was allowed 3,000.

vi) Loss on realisation 9,400 was divided between Sudha and Shiva in 3 : 2 ratio.

31. Z Ltd. invited applications for issuing 40,000 shares of 10 each at a premium of 2
per share. The amount was payable as follows :
ACCOUNTANCY XII - (10)

On Application – 4 per share

On Allotment – 5 per share (including premium)

On First call – 2 per share

On Second and Final call – Balance

Applications were received for 60,000 shares. Applications for 12,000 shares were
rejected and money returned to the applicants.

The shares were allotted on pro-rata basis to the applicants of 48,000 shares. The
excess money received on application was adjusted towards sums due on allotment.

All shareholders paid the allotment money except one shareholder who had applied for
1,200 shares. His shares were forfeited immediately after allotment. First call was made
thereafter and all the money due was received. The second and final call was not yet
made.

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

OR

Record the Journal entries for forfeiture and reissue in the following cases :

a) X Ltd. forfeited 200 shares of 100 each, 70 called up on which the shareholders had

paid application and allotment money of 50 per share. Out of these, 150 shares were

reissued to Naresh as 70 per share paid up for 80 per share.

b) Y Ltd. forfeited 180 shares of 10 each, 8 called up, issued at a premium of 2 per

share to 'R' for non-payment of allotment money of 5 per share (including premium).

Out of these, 160 shares were reissued to Sanjay as 8 called up for 10 per share
fully paid up.

32. Give Journal entries for the issue of debentures in the following conditions :

i) Issued 2000, 12% debentures of 100 each at a premium of 5%. Redeemable at a

ii) Issued 2000 12% debentures of 100 each at a discount of 2% redeemable at a premium
of 5%.

Loss/Discount on Issue is to be written off in the first year.

Balance Sheet of Sanjana and Alok

as at 31-3-2018

Liabilities Amount ( ) Assets Amount ( )

Creditors 60,000 Cash 1,66,000

Workmen’s Compensation Fund 60,000 Debtors 1,46,000

Less : Provision
for doubtful debts 2,000 1,44,000

Capitals : Stock 1,50,000

Sanjana 5,00,000 Investments 2,60,000

Alok 4,00,000 9,00,000 Furniture 3,00,000

10,20,000 10,20,000

On 1st April, 2018, they admitted Nidhi as a new partner for ¼th share in the profits on
the following terms :

a) Goodwill of the firm was valued at 4,00,000 and Nidhi brought the necessary amount
in cash for her share of goodwill premium, half of which was withdrawn by the old
partners.

b) Stock was to be increased by 20% and furniture was to be reduced to 90%.

c) Investments were to be valued at 3,00,000. Alok took over investments at this value.

f) Nidhi brought 3,00,000 as her capital and the capitals of Sanjana and Alok were adjusted
in the new profit sharing ratio.

Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the
reconstituted firm on Nidhi's admission.

34. A, B and C were partners in a firm. Their Balance Sheet as at 31st March 2019 was as
follows :
ACCOUNTANCY XII - (12)

Liabilities Amount ( ) Assets Amount ( )

Bills payable 20,000 Bank 20,000

Creditors 40,000 Furniture 28,000

General Reserve 30,000 Stock 20,000

Workmen’s Compensation Reserve 6,000 Sundry Debtors 45,000

Capitals : A 60,000 Less : Provision

B 40,000 for doubtful debts 5,000 40,000

C 32,000 1,32,000 Land and Building 1,20,000

2,28,000 2,28,000

B retired on 1st April, 2019. A and C decided to share profits in the ratio of 2 : 1.
The following terms were agreed upon :

i) Goodwill of the firm was valued at 30,000.

ii) Bad-debts 4,000 were written off. The provision for doubtful debts was to be maintained
@ 10% on debtors.

iii) Land and Building was to be increased to 1,32,000.

iv) Furniture was sold for 20,000 and the payment was received by cheque.

v) Liability towards Workmen Compensation was estimated at 1,500.

vi) B was to be paid 20,000 through a cheque and the balance was transferred to his
loan account.
Prepare necessary Journal entries at the time of B's retirement.
_______________