CHRIST MEMORIAL SCHOOL

PRE-BOARD EXAMINATION

ACCOUNTANCY (055)

CLASS XII (2024–25)

TIME 3 HOURS MAX. MARKS 80

GENERAL INSTRUCTIONS:

1. This question paper contains 34 questions. All questions are compulsory.

2. Question 1 to 16 and 27 to 30 carries 1 mark each.

3. Questions 17 to 20, 31and 32 carries 3 marks each.

4. Questions from 21 ,22 and 33 carries 4 marks each

5. Questions from 23 to 26 and 34 carries 6 marks each

6. There is no overall choice. However, an internal choice has been provided in 7 questions of one mark, 2
questions of three marks, 1 question of four marks and 2 questions of six marks.

PART A (Accounting for Partnership Firms and Companies)

1. Relationship between the partners is of.

A) Senior-Subordinate Relationship. B) Junior-Senior Relationship.
C) Close relatives. D) Agent and Principal.

2. Assertion (A): Capital account of partners generally has a credit balance.

Reason (R): Current account has either a debit or credit balance.
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.

3. Sunbeam Limited issued 4,000, 6% Debentures of ₹ 100 each at ₹ 95 per debenture. 6%

Debentures account will be credited by:
A) ₹ 4,00,000 B) ₹ 3,80,000
C) ₹ 20,000 D) ₹ 4,40,000
OR

Forfeiture of shares leads to reduction of _________________Capital.

A) Authorised B) Issued

C) Subscribed D) Called up

4. What is gaining ratio:

A) In which profit sharing ratio of gaining partners increase.
B) In which profit sharing ratio of gaining partners decrease.
 C) In which profit sharing ratio of sacrificing partners increase.
D) In which profit sharing ratio of sacrificing partners decrease.

OR

The profit earned by a firm after retaining ₹ 15,000 to its reserve was ₹ 75,000. The firm had
total tangible assets worth ₹ 10,00,000 and outside liabilities ₹ 3,00,000. The value of the
goodwill as per capitalization of average profit method was valued as ₹ 50,000. Determine
the rate of Normal Rate of Return.

A. 10 % B. 5 %

C. 12 % D. 8 %

5. In the absence of a partnership deed, the allowable rate of interest on partner’s loan account
will be:
A) 6% p.a. Simple Interest B) 12% Compounded Annually

C) 6% Simple Interest D) 12% Simple Interest

OR

A company forfeited 6,000 shares of ₹ 10 each, on which only application money of ₹ 3 has
been paid. 4,000 of these shares were re-issued at ₹ 12 per share as fully paid up. Amount of
Capital Reserve will be _______.

A. ₹ 18,000 B. ₹ 12,000

C. ₹ 30,000 D. ₹ 24,000

6. The debentures whose principal amount is not repayable by the company during its life time,
but the payment is made only at the time of Liquidation of the company, such debentures
are called:
A) Irredeemable Debentures. B) Bearer Debentures
C) Redeemable Debentures D)Non-Convertible Debentures

OR

On 1st April 2019 a company took a loan of ₹80,00,000 on security of land and building. This
loan was further secured by issue of 40,000, 12% Debentures of ₹100 each as collateral
security. On 31st March 2024 the company defaulted on repayment of the principal amount
of this loan consequently on 1st April 2024 the land and building were taken over and sold by
the bank for ₹70,00,000. For the balance amount debentures were sold in the market on 1st
May 2024. From which date would the interest on debentures become payable by the
company?

A. 1st April 2019. B. 31st March 2024.

C. 1st April 2024. D. 1st May 2024.

 7. Assertion (A): A company may forfeit the shares for non-payment of calls amount depend
upon the Articles of Association of the company.
Reason (R): Shares can be forfeited only if it is allowed by the Articles of Association of 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.

8. When will partner’s Capital Account be debited:

A) Share of goodwill B) Loss on Revaluation

C) General Reserve D) Profit on Revaluation

OR

Ikka, Dukka and Teeka were partners sharing profits and losses in the ratio of 2:2:1. Their
fixed Capital balances were ₹ 5,00,000; ₹ 4,00,000 and ₹ 3,00,000 respectively. For the year
ended March 31, 2024 profits of ₹ 84,000 were distributed without providing for Interest on
Capital @ 10% p.a as per the partnership deed. While passing an adjustment entry, which of
the following is correct?

A. Teeka will be debited by ₹ 4,200 B. Teeka will be credited by ₹ 4,200

C. Teeka will be credited by ₹ 6,000 D. Teeka will be debited by ₹ 6,000

Question No. 9 to 10 are based on the given text. Read the text carefully and answer the questions:

P, Q and R are partners in a firm. Their capitals are ₹ 30,000, ₹ 20,000 and ₹ 10,000 respectively. As
per partnership deed,

i. R is to be allowed remuneration of ₹ 3,000 p.a.

ii. Interest on capital @ 5% p.a.
iii. Profits should be distributed in the ratio of 2:2:1.

Ignoring the above terms, net profit of ₹ 18,000 was distributed among the partners equally

9. How much interest on capital is to be credited to partner P?

A) ₹ 1,500 B) ₹ 1,000

C) ₹ 900 D) ₹ 800

10. How much profit is to be credited to Partner Q after all adjustments?

A) ₹ 1,000 B) ₹ 2,400

C) ₹ 4,800 D) ₹ 1,200
11. X and Y are partners in the ratio of 3 : 2. Their capitals are ₹ 2,00,000 and ₹ 1,00,000 respectively.
Interest on capitals is allowed @ 8% p.a. Firm earned a profit of ₹ 15,000 for the year ended 31
March 2023. As per partnership agreement, interest on capital is treated a charge on profits. Interest
on Capital will be:

A) X ₹ 10,000; Y ₹ 5,000 B) X ₹ 9,000; Y ₹ 6,000

C) X ₹ 16,000; Y ₹ 8,000 D) No Interest will be allowed

12. X Ltd. forfeited 2,000 shares of ₹10 each (which were issued at par) held by Naveen for non-
payment of allotment money of ₹4 per share. The called-up value per share was ₹ 9. On forfeiture,
the amount debited to Share Capital Account will be

A) ₹ 18,000 B) ₹ 2,000

C) ₹ 8,000 D) ₹ 10,000

13. Persons who start a company are called ________.

A) Auditors B) Directors

C) Promoters D) Shareholders

14. A, B and C are partners sharing profits in 3 : 2 : 1 ratio. C was guaranteed that he will get
minimum of ₹ 20,000 as his share of profit every year. Firm's profit was ₹ 90,000. Any deficiency in C
profit will be compensate by A and B in the ratio of 4 : 1. A's share of Profit after meeting deficiency
will be:

A) 45,000 B) 40,000

C) 44,000 D) 41,000

15. A and B are partners sharing profit or loss in the ratio of 4 : 1. A surrenders 1/4 of his share and B
surrenders 1/2 of his share in favour of C, a new partner. What will be the C's share?

A) 1/5 B) 3/4

C) 3/10 D) 1/10

16. In which circumstances partners’ can dissolve the firm without the interference of the court?

A) When business of the firm cannot be carried on except at a loss

B) Mutual Agreement

C) When a partner has become of unsound mind

D) When a partner is found guilty of breath of contract frequently

17. Anu, Manu, Sonu and Rohan were partners in a firm sharing profits and losses in the ratio of 1 : 2
: 1 : 2. With effect from 1 April, 2023, they decided to share profits and losses in the ratio of 2 : 4 : 1 :
3. Their Balance Sheet showed General Reserve of ₹ 90,000. The goodwill of the firm was valued at ₹
4,50,000. Pass necessary journal entries for the above on account of change in the profit sharing
ratio. Show your working clearly.

18. A and B are partners in a firm. A is entitled to a salary of ₹15,000 p.m. and a commission of 10%
of net profit before charging any commission. B is entitled to a commission of 10% of net profit after
charging his commission. Net profit for the year ended 31 March 2023 was ₹4,40,000. You are
required to show the distribution of profit.

19. Z Ltd purchased machinery from K Ltd, Z Ltd, paid K Ltd as follows

i. By issuing 5,000 equity shares of ₹ 10 each at a premium of 30%.

ii. By issuing 1,000, 8% debentures of ₹ 100 each at a discount of 10%.

iii. Balance by giving a promissory note of ₹ 48,000 payable after two months.

Pass necessary journal entries for the purchase of machinery and payment to K Ltd in the
books of Z Ltd.

OR

A Ltd. forfeited 600 Equity Shares of ₹ 10 each issued at a premium of 20% to Rajat who had
applied for 720 Equity Shares, for non-payment of allotment money of ₹ 5 per equity share (including
premium) and the first and final call of ₹ 5 per equity share. Out of these, 200 Equity Shares were
reissued to Sanjay credited as fully paid for ₹ 9 per equity share. As per the terms of issue, company
was to retain the excess application money to adjust against calls. Pass Journal entries to record
forfeiture and reissue of shares.

20. The profits of a firm for the last five years were:

Year 2011 2012 2013 2014 2015

Profits (Rs.) 45,000 50,000 52,000 65,000 85,000

Calculate the value of goodwill on the basis of two years of purchase of weighted average
profits, the weights to be used are 2011-1, 2012-2, 2013-3, 2014-4 and 2015-5.

21. Neha Fabrics Ltd. invited applications for issuing 5,00,000 shares of ₹ 10 each at a premium of ₹ 4
per share. The amounts were payable as follows:

On Application and Allotment ₹ 8 per share.

On First & Final Call - Balance (including premium of ₹ 4)

Applications were received for 6,50,000 shares and allotment was made as follows:
i. To applicants for 1,40,000 shares - 100% shares.

ii. To applicants for 60,000 shares - Nil

iii. Balance of the applicants were allotted shares on pro-rata basis.

Excess money received with applications was adjusted towards sums due on first and final call. Kavita,
who belonged to category (i) and was allotted 6,000 shares and Hitesh, who belonged to category (ii)
and who had applied for 5,000 shares failed to pay the first and final call money. Their shares were
forfeited. 60% of forfeited shares of Kavita and Hitesh were re-issued at a discount of ₹ 1 per share
fully paid-up. Pass necessary journal entries for the above transactions in the books of the company.

22. Anju, Manju and Sanju sharing profit in the ratio of 3 : 1 : 1 decided to dissolve their firm. On March
31, 2014 their position was as follows:

Balance Sheet Anju, Manju and Sanju as on March 31, 2017

Liabilities Amount ₹ Assets Amount ₹

Creditors 60,000 Cash at Bank 55,000

Loan 15,000 Stock 83,000

Capitals: Furniture 12,000

Anju 2,75,000 Debtors 2,42,000

Manju 1,10,000 Less: Provision for doubtful

debts 12,000 2,30,000

Sanju 1,00,000 4,85,000 Buildings 2,00,000

Manju’s loan 20,000

5,80,000 5,80,000

It is agreed that:

i. Anju takes over the Furniture at ₹ 10,000 and Debtors amounting to ₹ 2,00,000 at ₹ 1,85,000. Anju
also agrees to pay the creditors,

ii. Manju is to take over Stock at book value and Buildings at book value less 10%,

iii. Sanju is to take over remaining Debtors at 80% of book value and responsibility for the discharge of
the loan,

iv. The expenses of dissolution amounted to ₹ 2,200. Prepare Realisation Account, Bank Account, and
Capital Accounts of the partners.

23. K.N. Ltd. invited applications for issuing 6,00,000 equity shares of ₹10 each at a premium of ₹3 per
share. The amount was payable as follows: On Application and Allotment - ₹3 per share; On First Call
-₹4 per share; On Second and Final Call — Balance (including premium). The issue was oversubscribed
by 1,50,000 shares. Applications for 50,000 shares were rejected and the application money was
refunded. Shares were allotted to the remaining applicants as follows:

Category I: Those who had applied for 4,00,000 shares were allotted 3,00,000 shares on pro- rata basis.
Category II: The remaining applicants were allotted the remaining shares.

Excess application money received with applications was adjusted towards sums due on first call.
Rakesh to whom 6,000 shares were allotted (out of Category I) failed to pay the first call money. His
shares were forfeited. The forfeited shares were re-issued at ₹13 per share fully paid up after the
second call. Pass necessary journal entries for the above transactions in the books of K.N. Ltd.

OR

a) Pass the necessary journal entries for 'Issue of Debenture' for the following:

i. Arman Ltd. issued 750, 12% Debentures of ₹100 each at a discount of 10% redeemable at a
premium of 5%.

ii. Sohan Ltd. issued 800, 9% Debentures of ₹100 each at a premium of 20 per debenture
redeemable at a premium of ₹10 per Debenture.

b) X Ltd. obtained a loan of ₹4,00,000 from IDBI Bank. The company issued 5,000 9%. Debentures of
₹100 each as a collateral security for the same. Show how these items will be presented in the Balance
Sheet of the company.

24. Meghna, Mehak and Mandeep were partnersin a firmwhose Balance Sheet as on 31st March, 2023
was as under:

Balance Sheet

Liabilities Amount Assets Amount

Creditors 28,000 Cash 27,000

General Reserve 7,500 Debtors 20,000

Capitals: Stock 28,000

Meghna 20,000 Furniture 5,000

Mehak 14,500

Mandeep 10,000 44,500

80,000 80,000

Mehak retired on this date under following terms:

(i) To reduce stock and furniture by 5% and 10% respectively.

(ii) To provide for doubtful debts at 10% on debtors.

(iii) Goodwill was valued at `12,000.

(iv) Creditors of Rs.8,000 were settled at Rs.7,100.

(v) Mehak should be paid off and the entire sum payable to Mehak shall be brought in by Meghna and
Mandeep in such a way that their capitals should be in their new profit-sharing ratio and a balance of
Rs.25,000 is maintained in the cash account.

Prepare Revaluation Account and partners’ capital accounts of the new firm.

OR

Varun and Vivek were partners in a firm sharing profits in the ratio of 3:2. The balance in their capital
and current accounts as on 1 st April, 2022 were as under:

Particulars Varun(₹) Vivek(₹)

Capital accounts 3,00,000 (Cr.) 1,00,000 (Cr.)

Current accounts 2,00,000 (Cr.) 28,000 (Dr)

The partnership deed provided that Varun was to be paid a salary of ₹ 5,000 p.m. whereas Vivek was
to get a commission of ₹ 30,000 for the year. Interest on capital was to be allowed @ 8% p.a. whereas
interest on drawings was to be charged @ 6% p.a. The drawings of Varun were ₹ 3,000 at the beginning
of each quarter while Vivek withdrew ₹ 30,000 on 1 st September, 2022. The net profit of the firm for
the year, 2022-23, before making the above adjustments was ₹ 1,20,000.

Prepare Profit and Loss Appropriation Account and Partners' Capital and Current Accounts.

25. Gita, Radha and Garv were partners in a firm sharing profits and losses in the ratio of 3:5:2. On 31st
March, 2019, their balance sheet was as follows:

Balance Sheet of Gita, Radha & Garv as on 31st March, 2019

Liabilities Amount (₹) Assets Amount (₹)

Sundry Creditors 60,000 Cash 50,000
General Reserve 40,000 Stock 80,000
Capitals : Debtors 40,000

Gita 3,00,000 Investments 30,000

Radha 2,00,000 Buildings 5,00,000
Garv 1,00,000 6,00,000

7,00,000 7,00,000

Radha retired on the above date and it was agreed that:

a. Goodwill of the firm be valued at ₹ 3,00,000 and Radha’s share be adjusted through the capital
accounts of Gita and Garv.

b. Stock was to be appreciated by 20%.

c. Buildings were found undervalued by ₹ 1,00,000.

d. Investments were sold for ₹ 34,000.

e. Capital of the new firm was fixed at ₹ 5,00,000 which will be in the new profit sharing ratio of the
partners; the necessary adjustments for this purpose were to be made by opening current accounts of
the partners.
Prepare Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of the reconstituted
firm on Radha’s retirement.

26. Pass the necessary journal entries for the issue of debentures for the following transactions:

i. Anand Ltd. issued 800, 9% Debentures of ₹ 500 each at a premium of 20%, to the vendors
for machinery purchased from them costing ₹ 4,80,000.

ii. Dawar Ltd. issued 5,000, 7% Debentures of ₹ 200 each at a premium of 5%, redeemable at
a premium of 10%.

iii. Novelty Ltd. issued 1,000, 8% Debentures of ₹ 100 each at a discount of 5%, redeemable at
a premium of 10%.

Part B :- Analysis of Financial Statements

27. The financial statements of a business enterprise include:

A) All of these B) Profit & Loss Account

C) Cash Flow Statement D) Balance Sheet

OR

Which of the following will not covered under finance cost?

i. Discount on issue of debentures written off

ii. Interest paid on bank overdraft

iii. Bank charges

iv. Premium payable on redemption of debentures written off

A) Only ii B) Only iv

C) Only iii D) Only i

28. On the basis of following data, the cost of revenue from operations by a company will be: Opening
Inventory ₹ 70,000; Closing Inventory ₹ 80,000; Inventory Turnover Ratio 6 Times.

A) ₹ 1,50,000 B) ₹ 4,80,000

C) ₹ 4,50,000 D) ₹ 90,000

29. Fly Ltd, a stock broker, purchased 5,000 shares of Tata Housing Ltd. It is:

A) Financing Activity B) Operating Activity

C) General Activity D) Investing Activity

OR
Koval Ltd. is a financing company. Under which activity will the amount of interest paid on a loan settled
in the current year be shown?

i. Investing Activities

ii. Financing Activities

iii. Both Investing and Financing Activities

iv. Operating Activities

A) ii and iii B) i and ii

C) iii and iv D) only iv

30. payment of bonus to the employees by an insurance company is which type of activity?

i. Operating Activity

ii. Investing Activity

iii. Financing Activity

iv. Both operating and Financing Activity

A) iv and i B) only i

C) ii and iii D) iii and iv

31. Under what main heads and sub-heads, will the following items appear in the balance sheet of a
company as per Schedule III, Part I of the Companies Act, 2013

i. Mining rights

ii. Encashment of employees earned leave payable on retirement

iii. Vehicles

32. From the following, calculate Debt to Capital Employed Ratio:

9% Debentures 2,00,000

8% Public Deposits 5,00,000

Long-term Provisions 2,00,000

Equity Share Capital 8,00,000

Reserves and Surplus 5,00,000

33. From the following Statement of Profit and Loss of Raman Ltd, prepare a Comparative Statement
of Profit and Loss for the year ended 31st March, 2022:

Particulars Note No. 2021 - 22 ₹ 2020 - 21 ₹

Revenue from Operations 26,00,000 20,00,000
Employee Benefit Expenses 6,00,000 5,00,000
Other Expenses 12,00,000 10,00,000
Tax Rate 50%

OR

Prepare comparative statement of profit and loss from the following information:

Particulars 31st March, 2015 Amt (Rs.) 31st March, 2014 Amt (Rs.)
Revenue from Operations 12,00,000 8,00,000

Purchase of Stock-in-trade 7,80,000 5,20,000

Change in Inventories of

Stock-in-trade 40,000 80,000

Other Expenses 10% of Cost of Revenue 8% of Cost of Revenue

from Operations from Operations

Tax Rate 30% 40%

34. From the following Balance Sheets of XYL limited, prepare Cash Flow Statement:

Particulars Note No. 31.3.2023 (₹) 31.3.2022 (₹)

I. EQUITY AND LIABILITIES:

(1) Shareholder’s Funds:

{a) Share Capital 5,00,000 4,50,000

(b) Reserve and Surplus 1 1,18,000 70,000

(2) Current Liabilities

(a) Trade Payables 1,49,000 1,17,000

(b) Short term Provisions (Provision for Tax) 50,000 40,000

TOTAL 8,17,000 6,77,000

II. ASSETS:

(1) Non-Current Assets:

(a) Property, Plant and Equipment and Intangible Assets

(i) Property, Plant and Equipment 2 3,70,000 2,80,000

(ii) Intangible Assets 3 90,000 1,15,000

(2) Current Assets:

(a) Inventory 1,09,000 77,000

(b) Trade Receivables 2,30,000 1,80,000

(c) Cash & Cash Equivalents 18,000 25,000

TOTAL 8,17,000 6,77,000

Notes:

31.3.2023 (₹) 31.3.2022 (₹)

(1) Reserve & Surplus:

General Reserve 70,000 40,000

Profit & Loss Balance 48,000 30,000

1,18,000 70,000

(2) Property, Plant and Equipment:

Land and Building 1,70,000 2,00,000

Plant 2,00,000 80,000

3,70,000 2,80,000

(3) Intangible Assets:

Goodwill 90,000 1,15,000

Additional Information:

a. Contingent Liability 31.3.2023 31.3.2022

Proposed Dividend (₹) 50,000 42,000

b. Depreciation of ₹ 10,000 and ₹ 20,000 has been charged on plant, land and buildings
respectively.

c. An interim dividend of ₹ 20,000 has been paid.

d. Income tax of ₹ 35,000 has been paid.

e. Rent Received during the year ₹ 10,000.