CBSE Class 12 Accountancy Question Paper 2025 Solved Code 67-1-2

PART - A

(Accounting for Partnership Firms and Companies)

1. On 1st April 2023, Veebee Ltd. issued 20,000, 13% debentures of Rs. 100 each at a discount of 10% redeemable at a premium of 5% after 4 years. Total amount of interest on debentures for the year ending 31st March, 2024 will be : [1 Mark]
(A) Rs. 2,00,000
(B) Rs. 2,60,000
(C) Rs. 1,00,000
(D) Rs. 3,00,000

Answer: (B) Rs. 2,60,000

Teacher's Note:
a) Interest is on the face value: 20,000 x 100 x 13% = Rs. 2,60,000.
b) Discount on issue and premium on redemption do not affect annual interest.

2. Arushi, Vivaan and Mitali were partners in a firm. On 31st March 2024, the firm was dissolved. On that date the firm had debtors of Rs. 60,000 and provision for doubtful debts of Rs. 3,000 were existing in the books. Debtors of Rs. 8,000 proved bad and full amount was realised from the remaining debtors. The amount realised from debtors was : [1 Mark]
(A) Rs. 60,000
(B) Rs. 55,000
(C) Rs. 52,000
(D) Rs. 49,000

Answer: (C) Rs. 52,000

Teacher's Note:
a) Amount realised = Total debtors - Bad debts = 60,000 - 8,000 = Rs. 52,000.
b) The provision is a book figure only; it does not change the cash actually collected.

3. Ashmit, Veena and Rohan were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Veena retired on 31st March, 2024. The capital accounts of Ashmit, Veena and Rohan showed a credit balance of Rs. 2,00,000, Rs. 1,80,000 and Rs. 1,20,000 respectively after making all adjustments relating to revaluation, goodwill, reserves etc. Veena was paid in cash brought in by Ashmit and Rohan in such a way that their capitals were in proportion to their new profit sharing ratio. The new capitals of Ashmit and Rohan will be : [1 Mark]
(A) Ashmit Rs. 3,75,000 and Rohan Rs. 1,25,000
(B) Ashmit Rs. 2,00,000 and Rohan Rs. 1,20,000
(C) Ashmit Rs. 2,50,000 and Rohan Rs. 2,50,000
(D) Ashmit Rs. 3,00,000 and Rohan Rs. 2,00,000

Answer: (A) Ashmit Rs. 3,75,000 and Rohan Rs. 1,25,000

Teacher's Note:
a) Total capital stays Rs. 5,00,000 (2,00,000 + 1,80,000 + 1,20,000), since Veena's amount is replaced by cash from the others.
b) New ratio of Ashmit and Rohan is 3 : 1, so capitals are Rs. 3,75,000 and Rs. 1,25,000.

4. Nita, Vidur and Mita were partners in a firm sharing profits and losses in the ratio of 3 : 4 : 1. On 1st April 2024, they decided to admit Samir as a new partner. The new profit sharing ratio between Nita, Vidur, Mita and Samir will now be 1 : 1 : 1 : 1. The balance sheet of Nita, Vidur and Mita before Samir's admission showed machinery at Rs. 6,00,000. On the date of admission, it was found that the machinery is overvalued by 20%.
The value of machinery shown in the new Balance Sheet after Samir's admission will be : [1 Mark]
(A) Rs. 7,50,000
(B) Rs. 4,80,000
(C) Rs. 7,20,000
(D) Rs. 5,00,000

Answer: (D) Rs. 5,00,000

Teacher's Note:
a) "Overvalued by 20%" means the book value is 120% of the true value: 6,00,000 x 100/120 = Rs. 5,00,000.
b) A common mistake is to deduct 20% of book value (giving Rs. 4,80,000).

5. Sara and Tara were partners in a firm. Their capitals as on 1st April, 2023 were Rs. 6,00,000 and Rs. 4,00,000 respectively. On 1st October, 2023, Tara withdrew Rs. 1,00,000 for personal use. According to the partnership deed, interest on capital was allowed @ 8% p.a.
The amount of interest allowed on Tara's capital for the year ended 31st March, 2024 was : [1 Mark]
(A) Rs. 28,000
(B) Rs. 30,000
(C) Rs. 48,000
(D) Rs. 32,000

Answer: (D) Rs. 32,000

Teacher's Note:
a) Money withdrawn for personal use is drawings, not a withdrawal of capital, so it does not reduce the capital for interest.
b) Interest = 4,00,000 x 8% = Rs. 32,000 for the full year.

6. Assertion (A) : Each partner carrying on the business of the firm is the principal as well as the agent for all the other partners of the firm.
Reason (R) : There exists a relationship of mutual agency between all the partners.
Choose the correct option from the following : [1 Mark]
(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 correct, but Reason (R) is incorrect.
(D) Assertion (A) is incorrect, but Reason (R) is correct.

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

Teacher's Note:
a) Mutual agency means every partner can bind the firm and is bound by the acts of other partners.
b) That is exactly why each partner is both a principal and an agent.

7. (a) VL Ltd. offered for public subscription 90,000 equity shares of Rs. 10 each at a premium of 10%. The entire amount was payable on application. Applications were received for 1,00,000 shares and allotment was made to all the applicants on pro-rata basis. The amount received on application was ________. [1 Mark]
(A) Rs. 10,00,000
(B) Rs. 9,00,000
(C) Rs. 9,90,000
(D) Rs. 11,00,000

Answer: (D) Rs. 11,00,000

Teacher's Note:
a) Application money is received on all shares applied for: 1,00,000 x Rs. 11 (Rs. 10 + Rs. 1 premium) = Rs. 11,00,000.
b) The excess is refunded or adjusted later, but it is first received.

OR

(b) VX Ltd. issued 30,000, 8% debentures of Rs. 100 each at a discount of 10% redeemable at a certain rate of premium. On issue of these debentures, 'Loss on issue of debentures account' was debited with Rs. 4,50,000. The amount of premium on redemption of debentures was _____. [1 Mark]
(A) Rs. 3,00,000
(B) Rs. 1,50,000
(C) Rs. 30,000
(D) Rs. 4,50,000

Answer: (B) Rs. 1,50,000

Teacher's Note:
a) Discount = 10% of 30,00,000 = Rs. 3,00,000.
b) Loss on issue = Discount + Premium on redemption, so premium = 4,50,000 - 3,00,000 = Rs. 1,50,000 (5%).

8. (a) Kartik, Inder and Lalit were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. With effect from 1st April, 2024, they decided to share profits and losses in the ratio of 2 : 3 : 4. For this purpose, the goodwill of the firm was valued at Rs. 1,80,000.
The necessary journal entry to show the effect of the above will be : [1 Mark]

Answer: (A) Lalit's Capital A/c Dr. Rs. 40,000 To Kartik's Capital A/c Rs. 40,000

Teacher's Note:
a) Kartik's share falls from 4/9 to 2/9 (sacrifice 2/9); Inder has no change; Lalit's share rises from 2/9 to 4/9 (gain 2/9).
b) The gaining partner compensates the sacrificing partner: 2/9 x 1,80,000 = Rs. 40,000.

OR

(b) Nidhi, Pranav and Ishu were partners in a firm sharing profits and losses in the ratio of 5 : 4 : 1. With effect from 1st April, 2024, they decided to share profits and losses in the ratio of 4 : 1 : 5. On that date, there was a debit balance of Rs. 4,00,000 in the Profit and Loss Account. The necessary journal entry to show the effect of the above will be : [1 Mark]

Answer: (C) Nidhi's Capital A/c Dr. Rs. 2,00,000; Pranav's Capital A/c Dr. Rs. 1,60,000; Ishu's Capital A/c Dr. Rs. 40,000; To Profit & Loss A/c Rs. 4,00,000

Teacher's Note:
a) An accumulated loss belongs to the old partners, so it is written off in the old ratio 5 : 4 : 1.
b) A debit balance of Profit and Loss is closed by debiting the capital accounts.

9. Moksh and Pran were partners in a firm sharing profits and losses in the ratio of 1 : 2. Their capitals were Rs. 5,00,000 and Rs. 3,00,000 respectively. They admitted Tushar as a new partner on 1st April, 2024 for 1/4th share in future profits. Tushar brought Rs. 4,00,000 as his share of capital. The goodwill of the firm on Tushar's admission will be : [1 Mark]
(A) Rs. 16,00,000
(B) Rs. 4,00,000
(C) Rs. 8,00,000
(D) Rs. 12,00,000

Answer: (B) Rs. 4,00,000

Teacher's Note:
a) Total capital implied by Tushar's contribution = 4,00,000 x 4 = Rs. 16,00,000.
b) Actual capital of all partners = 5,00,000 + 3,00,000 + 4,00,000 = Rs. 12,00,000; hidden goodwill = 16,00,000 - 12,00,000 = Rs. 4,00,000.

10. Money received in advance from the shareholders before it is actually called up by the directors is : [1 Mark]
(A) credited to calls in advance account.
(B) debited to calls in advance account.
(C) credited to calls account.
(D) debited to calls in arrears account.

Answer: (A) credited to calls in advance account.

Teacher's Note:
a) Calls in advance is a liability of the company until the call is made, so it is credited.
b) Calls in arrears is the opposite case: money called but not received.

11. (a) Debentures in respect of which all details including names, addresses and particulars of holding of the debenture holders are entered in a register kept by the company are called : [1 Mark]
(A) Bearer debentures
(B) Redeemable debentures
(C) Registered debentures
(D) Secured debentures

Answer: (C) Registered debentures

Teacher's Note:
a) Registered debentures are recorded in the company's register and are transferred only through a transfer deed.
b) Bearer debentures are transferable by mere delivery.

OR

(b) That portion of the called up capital which has been actually received from the shareholders is known as : [1 Mark]
(A) Paid up capital
(B) Called up capital
(C) Uncalled capital
(D) Reserve capital

Answer: (A) Paid up capital

Teacher's Note:
a) Paid up capital = Called up capital - Calls in arrears.
b) Reserve capital is the part of uncalled capital to be called only on winding up.

12. (a) Misha, Sarita and Isha were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. With effect from 1st April 2024, they decided that they will share profits and losses equally. The gain or sacrifice by the partners due to change in profit sharing ratio will be : [1 Mark]
(A) Misha's sacrifice 1/6, Isha's gain 1/6
(B) Misha's gain 1/6, Isha's sacrifice 1/6
(C) Misha's sacrifice 1/6, Sarita's gain 1/3, Isha's sacrifice 1/6
(D) Misha's sacrifice 1/3, Isha's gain 1/3

Answer: (A) Misha's sacrifice 1/6, Isha's gain 1/6

Teacher's Note:
a) Misha 3/6 - 2/6 = 1/6 sacrifice; Sarita 2/6 - 2/6 = no change; Isha 2/6 - 1/6 = 1/6 gain.
b) Total sacrifice must always equal total gain.

OR

(b) Sia, Tisha and Aryan were partners sharing profits and losses in the ratio of 4 : 7 : 1. The firm closes its books on 31st March every year. Tisha died on 1st July, 2024. Sia and Aryan will acquire Tisha's share in which of the following ratio ? [1 Mark]
(A) 1 : 1
(B) 4 : 1
(C) 4 : 7
(D) 7 : 1

Answer: (B) 4 : 1

Teacher's Note:
a) When nothing else is agreed, the remaining partners acquire the deceased partner's share in their old ratio.
b) Sia and Aryan's old ratio is 4 : 1.

13. Anuj and Kartik were partners in a firm sharing profits and losses in the ratio of 5 : 4. Anuj withdrew Rs. 20,000 in the beginning of every alternate month starting from 1st April, 2023 during the year ended 31st March, 2024. Interest on Anuj's drawings @ 6% p.a. for the year ended 31st March, 2024 will be : [1 Mark]
(A) Rs. 8,400
(B) Rs. 1,200
(C) Rs. 4,200
(D) Rs. 3,600

Answer: (C) Rs. 4,200

Teacher's Note:
a) Six withdrawals (April, June, August, October, December, February) total Rs. 1,20,000; months outstanding are 12, 10, 8, 6, 4, 2, so the average is 7 months.
b) Interest = 1,20,000 x 6/100 x 7/12 = Rs. 4,200.

14. (a) Vishesh, Manik and Amit were partners in a firm sharing profits and losses in the ratio of 5 : 4 : 1. Amit retired on 31st March, 2024. Vishesh and Manik acquired Amit's share in the ratio of 2 : 3. The new profit sharing ratio between Vishesh and Manik after Amit's retirement will be : [1 Mark]
(A) 5 : 4
(B) 2 : 3
(C) 1 : 1
(D) 27 : 23

Answer: (D) 27 : 23

Teacher's Note:
a) Vishesh: 5/10 + (1/10 x 2/5) = 27/50; Manik: 4/10 + (1/10 x 3/5) = 23/50.
b) New share = Old share + Share acquired.

OR

(b) Varsha, Aryan and Nimit were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. Varsha retired and surrendered 1/3rd of her share in favour of Aryan and the remaining share in favour of Nimit. The new profit sharing ratio between Aryan and Nimit will be : [1 Mark]
(A) 2 : 1
(B) 8 : 7
(C) 1 : 2
(D) 1 : 1

Answer: (B) 8 : 7

Teacher's Note:
a) Varsha's share 2/5: Aryan gets 1/3 of it (2/15) and Nimit gets 2/3 of it (4/15).
b) Aryan 2/5 + 2/15 = 8/15; Nimit 1/5 + 4/15 = 7/15; ratio 8 : 7.

15. When the partners' capitals are fixed, the drawings made by a partner are recorded on the : [1 Mark]
(A) Debit side of Partner's Capital Account.
(B) Credit side of Partner's Capital Account.
(C) Debit side of Partner's Current Account.
(D) Credit side of Partner's Current Account.

Answer: (C) Debit side of Partner's Current Account.

Teacher's Note:
a) Under the fixed capital method, all regular adjustments (drawings, interest, salary, profit share) go to the current account.
b) Drawings reduce what the firm owes the partner, so they are debited.

16. 4,000 shares of Rs. 10 each were forfeited for non-payment of second and final call money of Rs. 2 per share. The minimum amount that the company must collect at the time of reissue of these shares will be : [1 Mark]
(A) Rs. 8,000
(B) Rs. 32,000
(C) Rs. 40,000
(D) Rs. 48,000

Answer: (A) Rs. 8,000

Teacher's Note:
a) Amount forfeited = Rs. 8 per share, so the maximum discount on reissue is Rs. 8 per share.
b) Minimum reissue price = Rs. 10 - Rs. 8 = Rs. 2 per share; 4,000 x 2 = Rs. 8,000.

17. Saurabh, Reena and Deepak were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. Saurabh died on 31st December, 2024. As per the partnership deed, Saurabh'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, 2024 amounted to Rs. 10,00,000 and that from 1st April, 2024 to 31st December, 2024 amounted to Rs. 7,50,000.
The profit for the year ending 31st March, 2024 was calculated as Rs. 5,00,000. The books of accounts are closed on 31st March every year.
Calculate Saurabh's share in the profit of the firm till the date of his death.
Pass necessary journal entry for the same. Show your working clearly. [3 Marks]

Answer:
Profit on sales of Rs. 10,00,000 = Rs. 5,00,000, i.e. 50% of sales.
Profit on sales of Rs. 7,50,000 (1st April to 31st December, 2024) = 5,00,000 x 7,50,000 / 10,00,000 = Rs. 3,75,000
Saurabh's share of profit = 3,75,000 x 5/10 = Rs. 1,87,500

Journal of Saurabh, Reena and Deepak

Teacher's Note:
a) On the sales basis, find the profit rate from last year (profit / sales) and apply it to sales up to the date of death.
b) Use Profit and Loss Suspense A/c because the current year's books are not yet closed.

18. (a) Delight Ltd. purchased assets worth Rs. 4,00,000 and took over liabilities of Rs. 70,000 of Marvel Ltd. for a purchase consideration of Rs. 3,60,000. Delight Ltd. paid the purchase consideration by issuing 11% debentures of Rs. 100 each at a premium of 20%.
Pass necessary journal entries in the books of Delight Ltd. [3 Marks]

Answer:

Journal of Delight Ltd.

Working Note: Net assets = 4,00,000 - 70,000 = Rs. 3,30,000; goodwill = 3,60,000 - 3,30,000 = Rs. 30,000. Number of debentures = 3,60,000 / 120 = 3,000.

Teacher's Note:
a) Divide the purchase consideration by the issue price (Rs. 120) to get the number of debentures.
b) Premium on issue of debentures is credited to Securities Premium A/c.

OR

(b) Prime Ltd. took over assets of Rs. 6,00,000 and liabilities of Rs. 1,00,000 of Rabi Ltd. for a purchase consideration of Rs. 3,60,000. Prime Ltd. issued 10% debentures of Rs. 100 each at a discount of 10% in full satisfaction of purchase consideration.
Pass necessary journal entries in the books of Prime Ltd. [3 Marks]

Answer:

Journal of Prime Ltd.

Working Note: Net assets = 6,00,000 - 1,00,000 = Rs. 5,00,000; capital reserve = 5,00,000 - 3,60,000 = Rs. 1,40,000. Number of debentures = 3,60,000 / 90 = 4,000.

Teacher's Note:
a) When purchase consideration is less than net assets, the difference is credited to Capital Reserve.
b) Discount on issue of debentures is a capital loss, shown separately.

19. (a) The firm of Amish, Nitish and Misha, who have been sharing profits in the ratio of 2 : 2 : 1, have existed for some years. Misha wanted that she should get equal share in the profits with Amish and Nitish and she further wished that the change in the profit sharing ratio should come into effect retrospectively for the last three years. Amish and Nitish had agreement for this.
The profits for the last three years were :
2021 - 22 Rs. 1,15,000
2022 - 23 Rs. 1,24,000
2023 - 24 Rs. 2,11,000
Show adjustment of profits by means of a single adjustment journal entry. Show your working clearly. [3 Marks]

Answer:

Journal

Adjustment Table (Total profit of three years = Rs. 4,50,000)

Teacher's Note:
a) Add the three years' profits first (Rs. 4,50,000) and work on the total, not year by year.
b) Partners who got more than their new share are debited; the partner who got less is credited.

OR

(b) Vidhi, Manas and Ansh were partners sharing profits and losses in the ratio of 2 : 3 : 5. Ansh was given a guarantee that his share of profits in any given year would not be less than Rs. 1,20,000. Deficiency, if any, would be borne by Vidhi and Manas equally. Profits for the year ended 31st March, 2024 amounted to Rs. 2,00,000.
Pass necessary journal entries in the books of the firm for division of profits. [3 Marks]

Answer:

Journal

Working Note: Ansh's share = 5/10 x 2,00,000 = Rs. 1,00,000; guaranteed Rs. 1,20,000; deficiency Rs. 20,000 borne equally (Rs. 10,000 each). The marking scheme also accepts a single entry crediting Vidhi Rs. 30,000, Manas Rs. 50,000 and Ansh Rs. 1,20,000.

Teacher's Note:
a) First distribute profit in the normal ratio, then transfer the deficiency.
b) The deficiency is shared in the agreed ratio (equally), not in the profit sharing ratio.

20. The capital of the firm of Sumit and Asha is Rs. 20,00,000 and the market rate of interest is 12%. Salary of each partner is Rs. 20,000 per annum.
The profits of the last three years were Rs. 3,00,000, Rs. 2,60,000 and Rs. 4,00,000 respectively. Goodwill of the firm is to be valued on the basis of four years purchase of last three years average super profits.
Calculate the goodwill of the firm. [3 Marks]

Answer:
Normal Profit = 12/100 x 20,00,000 = Rs. 2,40,000
Average Profit = (3,00,000 + 2,60,000 + 4,00,000) / 3 = Rs. 3,20,000
Average Profit less partners' salary = 3,20,000 - 40,000 = Rs. 2,80,000
Super Profit = Average Profit - Normal Profit = 2,80,000 - 2,40,000 = Rs. 40,000
Goodwill = Super Profit x Number of years' purchase = 40,000 x 4 = Rs. 1,60,000

Teacher's Note:
a) Partners' salary (2 x Rs. 20,000 = Rs. 40,000) is a charge, so deduct it from the average profit before finding super profit.
b) Normal profit is the market rate of interest on the capital of the firm.
c) Forgetting the salary deduction gives Rs. 3,20,000 as goodwill, which is the common mistake.

21. Raja, Bharat and Vedika were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. Their Balance Sheet as on 31st March, 2024 was as follows :
Balance Sheet of Raja, Bharat and Vedika as on 31st March, 2024

Vedika died on 31st July, 2024. According to the partnership deed, her legal representatives are entitled to the following :
(i) Balance in her capital account
(ii) Interest on capital @ 8% p.a.
(iii) Her share in the profit upto the date of death to be calculated on the basis of last year's profit. Vedika's share of profit was Rs. 3,000.
(iv) Her share of goodwill calculated on the basis of two years purchase of average profits of last three years. The average profit of last three years was Rs. 40,000. Vedika's drawings upto the date of death were Rs. 12,000.
Prepare Vedika's Capital Account to be rendered to her executors. [4 Marks]

Answer:

Vedika's Capital Account

Working Notes:
1. General Reserve = 50,000 x 1/5 = Rs. 10,000.
2. Interest on capital = 90,000 x 8% x 4/12 (April to July) = Rs. 2,400.
3. Goodwill of firm = 40,000 x 2 = Rs. 80,000; Vedika's share = 80,000 x 1/5 = Rs. 16,000, borne by Raja and Bharat in gaining ratio 2 : 2 (Rs. 8,000 each).

Teacher's Note:
a) Interest on capital is only for the period up to the date of death (4 months).
b) Goodwill is credited to the deceased partner by debiting the gaining partners, not through a Goodwill Account.
c) The closing balance is transferred to the Executors' Account.

22. Pass necessary journal entries for issue of debentures for the following transactions :
(i) Kiero Ltd. issued 80,000, 9% debentures of Rs. 100 each at par, redeemable at a premium of 10%.
(ii) Naro Ltd. issued 50,000, 10% debentures of Rs. 100 each at a premium of 5%, redeemable at a premium of 10%. [4 Marks]

Answer:

(i) Journal of Kiero Ltd.

(ii) Journal of Naro Ltd.

Teacher's Note:
a) Premium payable on redemption is recorded as a loss at the time of issue.
b) Premium received on issue goes to Securities Premium; premium payable on redemption goes to Premium on Redemption of Debentures A/c.

23. LK Ltd. was registered with an authorised capital of Rs. 15,00,000 divided into 1,50,000 equity shares of Rs. 10 each. The company offered to the public for subscription 1,45,000 equity shares.
Applications were received for 1,40,000 equity shares and shares were allotted to all the applicants. All money due was received with the exception of first and final call money of Rs. 1 per share on 4,000 shares allotted to Nupur. Her shares were forfeited.
Answer the following questions : [6 Marks]

(i) The amount of 'Calls in Arrears' disclosed in 'Notes to Accounts' will be : [1 Mark]
(A) Rs. 1,40,000
(B) Rs. 36,000
(C) Rs. 4,000
(D) Nil

Answer: (D) Nil

Teacher's Note:
a) Nupur's shares were forfeited, so her unpaid call is cancelled.
b) No calls in arrears remain to be shown.

(ii) The number of shares of LK Ltd. after forfeiture will be : [1 Mark]
(A) 1,46,000
(B) 1,36,000
(C) 1,41,000
(D) 1,40,000

Answer: (B) 1,36,000

Teacher's Note:
a) Shares allotted 1,40,000 less 4,000 forfeited = 1,36,000 shares.
b) The company can allot only the shares actually applied for (1,40,000).

(iii) In the 'Notes to Accounts', the amount disclosed under 'Share Forfeiture Account' will be : [1 Mark]
(A) Rs. 4,000
(B) Rs. 36,000
(C) Rs. 40,000
(D) Nil

Answer: (B) Rs. 36,000

Teacher's Note:
a) Nupur had paid Rs. 9 per share (Rs. 10 - Rs. 1 unpaid call).
b) Forfeited amount = 4,000 x 9 = Rs. 36,000.

(iv) In the 'Notes to Accounts', the amount disclosed under 'Issued Capital' will be : [1 Mark]
(A) Rs. 14,00,000
(B) Rs. 14,50,000
(C) Rs. 15,00,000
(D) Rs. 13,60,000

Answer: (B) Rs. 14,50,000

Teacher's Note:
a) Issued capital = shares offered to the public = 1,45,000 x Rs. 10.
b) It does not depend on how many shares were actually applied for.

(v) Balance in 'Share Forfeiture Account' will be shown in 'Notes to Accounts' in the balance sheet of LK Ltd. under : [1 Mark]
(A) Subscribed capital
(B) Will not be shown in 'Notes to Accounts'
(C) Issued capital
(D) Authorised capital

Answer: (A) Subscribed capital

Teacher's Note:
a) Share Forfeiture is added to subscribed capital in the Notes to Accounts.
b) It stays there until the forfeited shares are reissued.

(vi) The amount of 'Share Capital' disclosed in the balance sheet of LK Ltd. will be : [1 Mark]
(A) Rs. 13,56,000
(B) Rs. 13,64,000
(C) Rs. 13,96,000
(D) Rs. 14,00,000

Answer: (C) Rs. 13,96,000

Teacher's Note:
a) Subscribed and fully paid capital = 1,36,000 x 10 = Rs. 13,60,000.
b) Add Share Forfeiture Rs. 36,000: 13,60,000 + 36,000 = Rs. 13,96,000.

24. Pass necessary journal entries for the following transactions on the dissolution of the partnership firm of Mansha and Rajiv after various assets (other than cash) and external liabilities have been transferred to Realisation Account :
(i) Mansha's loan of Rs. 18,000 was settled by giving her an unrecorded furniture of Rs. 20,000.
(ii) Machinery of the book value of Rs. 80,000 was sold at a loss of 10%.
(iii) A creditor of Rs. 40,000 accepted cash Rs. 21,000 and stock of the book value of 25,000 in full settlement of his claim.
(iv) Bank loan of Rs. 1,00,000 was paid along with interest of Rs. 10,000.
(v) Investments of the face value of Rs. 52,000 were sold in the open market for Rs. 63,000 for which a commission of Rs. 2,000 was paid to the broker.
(vi) Profit and Loss Account balance of Rs. 30,000 appeared on the asset side of the balance sheet. [6 Marks]

Answer:

Journal of Mansha and Rajiv

Teacher's Note:
a) In (i), the loan is Rs. 18,000, so only Rs. 18,000 is recorded; the unrecorded furniture itself needs no separate entry.
b) In (ii), sale value = 80,000 - 10% = Rs. 72,000. In (v), net sale proceeds = 63,000 - 2,000 = Rs. 61,000.
c) In (iii), only the cash paid is recorded; the stock given to the creditor needs no entry.
d) In (vi), no ratio is given, so the loss is shared equally.

25. (a) Aryan and Adya were partners in a firm sharing profits and losses in the ratio of 3 : 1. Their Balance Sheet on 31st March, 2024 was as follows :
Balance sheet of Aryan and Adya as at 31st March, 2024

Dev was admitted into the firm on 1st April, 2024 for 1/5th share in the profits of the firm on the following terms :
(i) Dev will bring capital proportionate to his share in the profits of the firm.
(ii) Goodwill of the firm was valued at Rs. 2,00,000 and Dev will bring his share of goodwill premium in cash.
(iii) Machinery was revalued at Rs. 4,50,000.
(iv) A provision for doubtful debts was to be created at 5% on debtors.
(v) A liability of Rs. 3,500 included in creditors was not likely to arise.
Prepare Revaluation Account and Partners' Capital Accounts on Dev's admission. [6 Marks]

Answer:

Revaluation Account

Partners' Capital Accounts

Working Notes:
1. New provision = 5% of 90,000 = Rs. 4,500; existing Rs. 1,000; additional Rs. 3,500.
2. Dev's goodwill premium = 2,00,000 x 1/5 = Rs. 40,000, shared by Aryan and Adya in the sacrificing ratio 3 : 1 (same as old ratio).
3. Aryan and Adya's adjusted capitals = 3,95,000 + 2,65,000 = Rs. 6,60,000 for 4/5 share; Dev's capital = 6,60,000 x 5/4 x 1/5 = Rs. 1,65,000.

Teacher's Note:
a) The debit balance of Profit and Loss (Rs. 20,000) is written off to old partners in the old ratio.
b) When the new ratio is not given, the sacrificing ratio equals the old ratio.
c) Work out the old partners' adjusted capitals before calculating Dev's proportionate capital.

OR

(b) Ashish, Vinit and Reema were partners sharing profits and losses in the ratio of 2 : 2 : 1. Their Balance Sheet on 31st March, 2024 was as follows :
Balance sheet of Ashish, Vinit and Reema as at 31st March, 2024

Vinit retired on 31st March, 2024 on the following terms :
(i) Goodwill of the firm was valued at Rs. 60,000 and the same was adjusted into the capital accounts of Ashish and Reema who will share profits in future in the ratio of 3 : 2.
(ii) Value of stock was to be reduced by Rs. 10,000.
(iii) Patents are found undervalued by 20%.
(iv) Vinit was paid Rs. 20,000 immediately on retirement and the balance was transferred to his loan account carrying interest @ 8% p.a.
Pass necessary journal entries on Vinit's retirement. [6 Marks]

Answer:

Journal

Working Notes:
1. Patents undervalued by 20%: true value = 80,000 x 100/80 = Rs. 1,00,000; increase Rs. 20,000.
2. Gaining ratio: Ashish 3/5 - 2/5 = 1/5; Reema 2/5 - 1/5 = 1/5; ratio 1 : 1. Vinit's goodwill = 60,000 x 2/5 = Rs. 24,000.
3. Amount due to Vinit = 2,00,000 + 4,000 + 20,000 + 24,000 = Rs. 2,48,000.

Teacher's Note:
a) "Undervalued by 20%" means the book value is 80% of the true value.
b) Goodwill is adjusted in the gaining ratio, which here is 1 : 1, not the new ratio 3 : 2.
c) Interest on the loan starts only after retirement, so no interest entry is needed today.

26. (a) Altima Ltd. invited applications for issuing 2,00,000 equity shares of Rs. 10 each at a premium of Rs. 4 per share. The amount was payable as follows :
On application and allotment - Rs. 7 per share (including premium Rs. 1)
On first and final call - Balance
Applications were received for 2,40,000 shares. Applications for 30,000 shares were rejected and pro-rata allotment was made to the remaining applicants. Excess money received on application and allotment was returned. Manvi, who was allotted 4,000 shares failed to pay the first and final call money. Her shares were forfeited. All the forfeited shares were reissued at Rs. 4 per share fully paid up.
Pass necessary journal entries in the books of Altima Ltd. [6 Marks]

Answer:

Journal of Altima Ltd.

Working Notes:
1. Refund = rejected 30,000 x 7 = Rs. 2,10,000 + excess on pro-rata applicants (2,10,000 - 2,00,000 = 10,000 shares) x 7 = Rs. 70,000; total Rs. 2,80,000.
2. First and final call = Rs. 14 - Rs. 7 = Rs. 7 per share (Rs. 4 capital + Rs. 3 premium).
3. Forfeited amount = Rs. 6 per share capital paid x 4,000 = Rs. 24,000; discount on reissue = Rs. 6 per share = Rs. 24,000, so nothing is left for capital reserve.

Teacher's Note:
a) Since excess money was returned, there is no calls in advance; the whole excess is refunded.
b) On forfeiture, reverse the unpaid premium (Rs. 3 x 4,000 = Rs. 12,000).
c) The entries may also be passed without a Calls in Arrears A/c by crediting the call account directly.

OR

(b) Pass necessary journal entries for forfeiture and reissue of forfeited shares in the following cases :
(i) Macil Ltd. forfeited 3,000 shares of Rs. 100 each issued at 20% premium for the non-payment of allotment money of Rs. 30 per share and first call of Rs. 40 per share (including premium Rs. 10). The second and final call of Rs. 30 per share (including premium Rs. 10) was not yet called. Out of these, 2,000 shares were reissued at Rs. 80 per share paid up for Rs. 90 per share.
(ii) Avian Ltd. forfeited 10,000 shares of Rs. 10 each on which the first call of Rs. 4 per share was not received and the second and final call of Re. 1 per share was not yet called. Out of these, 4,000 shares were reissued to Ajay as fully paid up for Rs. 9 per share. [6 Marks]

Answer:

(i) Journal of Macil Ltd.

Working Note: Called up capital = Rs. 80 per share (Rs. 100 - Rs. 20 not called) = Rs. 2,40,000; unpaid premium on first call = Rs. 10 x 3,000 = Rs. 30,000; amount received (application Rs. 20) = Rs. 60,000. Forfeited amount on 2,000 shares = Rs. 40,000.

(ii) Journal of Avian Ltd.

Working Note: Called up = Rs. 9 per share; paid Rs. 5 per share, so forfeiture = Rs. 50,000. On 4,000 shares, forfeited amount = Rs. 20,000; used for discount Rs. 4,000; capital reserve = Rs. 16,000.

Teacher's Note:
a) Debit Share Capital only with the amount called up; uncalled amounts are ignored.
b) Transfer to capital reserve only the gain on shares actually reissued.
c) Premium received on reissue (Rs. 10 per share in Macil Ltd.) is credited to Securities Premium.

PART - B

Option - I (Analysis of Financial Statements)

27. The Debt Equity Ratio of Manak Enterprises is 2.5 : 1. Which of the following transaction will result in increase in this ratio ? [1 Mark]
(A) Purchase of goods on credit Rs. 2,00,000.
(B) Payment to creditors Rs. 3,00,000.
(C) Issue of debentures Rs. 6,00,000.
(D) Sale of furniture of the book value of Rs. 4,00,000 at a profit of 10%.

Answer: (C) Issue of debentures Rs. 6,00,000.

Teacher's Note:
a) Issue of debentures increases long-term debt while equity stays the same, so the ratio rises.
b) Options (A) and (B) affect only current items; (D) increases equity through profit, which lowers the ratio.

28. (a) Which of the following are operating activities for the purpose of preparing cash flow statement ? [1 Mark]
(i) Cash payments to suppliers for goods and services.
(ii) Dividend received from investments in other enterprises.
(iii) Cash receipts from royalties, fees, commissions and other revenues.
(iv) Cash repayments of amounts borrowed.
(A) (i), (ii) and (iii)
(B) (i) and (iii)
(C) (i), (iii) and (iv)
(D) (iii) and (iv)

Answer: (B) (i) and (iii)

Teacher's Note:
a) Dividend received is an investing activity and repayment of borrowings is a financing activity (for a non-financial enterprise).
b) Payments to suppliers and receipts from royalties and fees relate to the main revenue-producing activities.

OR

(b) Which of the following statements is incorrect ? [1 Mark]
(A) Payment of dividend and interest will result in cash outflow from financing activities.
(B) Payment of employee benefit expenses will result in cash outflows from operating activities.
(C) Receipt of interest and dividend will result in cash inflow from financing activities.
(D) Operating activities are the principal revenue generating activities of the enterprise.

Answer: (C) Receipt of interest and dividend will result in cash inflow from financing activities.

Teacher's Note:
a) For a non-financial enterprise, interest and dividend received are investing activities, not financing.
b) Interest and dividend paid are financing activities, so statement (A) is correct.

29. Statement - I : Investing activities are the acquisition and disposal of long term assets and other investments not included in cash equivalents.
Statement - II : Cash payments to acquire fixed assets including intangibles and capitalised research and development results in cash outflow from investing activities.
Choose the correct option from the following : [1 Mark]
(A) Both the Statements are true.
(B) Both the Statements are false.
(C) Only Statement I is true.
(D) Only Statement II is true.

Answer: (A) Both the Statements are true.

Teacher's Note:
a) Statement I is the AS-3 definition of investing activities.
b) Buying fixed assets, including capitalised R&D, is a classic investing outflow.

30. (a) The tool of analysis of financial statements which indicates the trend and direction of financial position and operating results is ________. [1 Mark]
(A) Comparative Statements
(B) Common Size Statements
(C) Cash Flow Analysis
(D) Ratio Analysis

Answer: (A) Comparative Statements

Teacher's Note:
a) Comparative statements place figures of two or more years side by side, showing the trend and direction of change.
b) Common size statements show each item as a percentage of a common base instead.

OR

(b) Ratios that are calculated for measuring the efficiency of operations of the business based on effective utilization of resources are known as ________. [1 Mark]
(A) Profitability ratios
(B) Solvency ratios
(C) Turnover ratios
(D) Liquidity ratios

Answer: (C) Turnover ratios

Teacher's Note:
a) Turnover (activity) ratios measure how efficiently resources such as inventory and receivables are used.
b) Examples: inventory turnover, trade receivables turnover, working capital turnover.

31. Classify the following items under major heads and sub-heads (if any) in the balance sheet of the company as per Schedule-III, Part-I of the Companies Act, 2013 :
(i) Trademarks
(ii) Raw materials
(iii) Mortgage loan [3 Marks]

Answer:

Teacher's Note:
a) Each head and each sub-head carries half a mark.
b) A mortgage loan is a secured long-term loan, so it is a long-term borrowing.

32. From the following information of PK Ltd., prepare a common size Statement of Profit and Loss for the years ended 31st March, 2023 and 31st March, 2024 : [3 Marks]

Answer:

Common Size Statement of Profit and Loss of PK Ltd. for the years ended 31st March, 2023 and 31st March, 2024

Teacher's Note:
a) Every item is shown as a percentage of Revenue from Operations, not of Total Revenue.
b) So Other Income is 10% and Total Revenue is 110%.
c) Tax is 50% of profit before tax, so it is 45% of revenue here (half of 90%).

33. (a) Calculate opening and closing Trade Payables from the following information :
Total purchases Rs. 15,00,000;
Cash purchases are 25% of credit purchases;
Trade payables turnover ratio is 4 times;
Closing trade payables are two times of opening trade payables. [4 Marks]

Answer:
Trade Payables Turnover Ratio = Net Credit Purchases / Average Trade Payables
Total Purchases = Cash Purchases + Credit Purchases
15,00,000 = 1/4 Credit Purchases + Credit Purchases = 5/4 Credit Purchases
Credit Purchases = 15,00,000 x 4/5 = Rs. 12,00,000
4 = 12,00,000 / Average Trade Payables, so Average Trade Payables = Rs. 3,00,000
Average Trade Payables = (Opening + Closing) / 2 = (Opening + 2 x Opening) / 2
3,00,000 = 3 x Opening / 2, so Opening Trade Payables = Rs. 2,00,000
Closing Trade Payables = 2 x 2,00,000 = Rs. 4,00,000

Teacher's Note:
a) "Cash purchases are 25% of credit purchases" means cash = 1/4 of credit, not 25% of total purchases.
b) Only credit purchases are used in the trade payables turnover ratio.

OR

(b) From the following information, calculate 'Return on Investment' :
Shareholders Funds Rs. 16,00,000
10% Debentures Rs. 8,00,000
Current Liabilities Rs. 2,00,000
Current Assets Rs. 5,00,000
Non-Current Assets Rs. 21,00,000
Net profit after tax was Rs. 3,00,000 and the tax amounted to Rs. 1,00,000. [4 Marks]

Answer:
Return on Investment = Profit before Interest and Tax / Capital Employed x 100
Profit before Interest and Tax = Net profit after tax + Tax + Interest on Debentures = 3,00,000 + 1,00,000 + 80,000 = Rs. 4,80,000
Capital Employed = Shareholders' Funds + Debentures = 16,00,000 + 8,00,000 = Rs. 24,00,000
(or Non-Current Assets + Current Assets - Current Liabilities = 21,00,000 + 5,00,000 - 2,00,000 = Rs. 24,00,000)
Return on Investment = 4,80,000 / 24,00,000 x 100 = 20%

Teacher's Note:
a) Interest on debentures = 10% of 8,00,000 = Rs. 80,000 must be added back to get PBIT.
b) Both methods of capital employed give the same answer, which is a useful check.

34. (a) From the following information, calculate Cash Flows from Investing Activities : [6 Marks]

Additional Information :
A machine costing Rs. 50,000 on which accumulated depreciation was Rs. 20,000 was sold at a profit of 10%.
(b) From the following information, calculate Cash flows from Financing Activities :

Additional Information :
Interest paid on debentures amounted to Rs. 40,000.

Answer:

(a) Cash Flows from Investing Activities for the year ended 31st March, 2024

Machinery Account

Accumulated Depreciation Account

(b) Cash Flows from Financing Activities for the year ended 31st March, 2024

Teacher's Note:
a) Book value of machine sold = 50,000 - 20,000 = Rs. 30,000; sale price with 10% profit = Rs. 33,000.
b) Purchase of machinery is the balancing figure in the Machinery Account.
c) Increase in securities premium is part of the cash received on issue of shares.

PART - B

Option - II (Computerised Accounting)

27. Which of the following is an adjustment voucher normally used for non-cash transaction ? [1 Mark]
(A) Payment voucher
(B) Receipt voucher
(C) Contra voucher
(D) Journal voucher

Answer: (D) Journal voucher

Teacher's Note:
a) Journal vouchers record non-cash adjustments such as depreciation and outstanding expenses.
b) Contra vouchers are for transfers between cash and bank accounts.

28. (a) To safeguard assets and optimise the use of resources of a business : [1 Mark]
(A) shield and secure its assets only.
(B) try to earn sufficient profits only.
(C) keep internal checks and controls.
(D) ensure accuracy in accounting records only.

Answer: (C) keep internal checks and controls.

Teacher's Note:
a) Internal checks and controls protect assets and ensure resources are used properly.
b) Options with the word "only" are too narrow.

OR

(b) Which of the following item is not included in Account group-loans (liabilities) in the Account group of Balance Sheet ? [1 Mark]
(A) Bank overdraft
(B) Sundry creditors
(C) Unsecured loans
(D) Secured loans

Answer: (B) Sundry creditors

Teacher's Note:
a) Sundry creditors fall under the Current Liabilities group, not Loans (Liabilities).
b) Bank overdraft, secured and unsecured loans are all loan-type liabilities.

29. To see all the available shape styles, which of the following button is to be clicked ? [1 Mark]
(A) More
(B) Custom
(C) Chart root
(D) Picture

Answer: (A) More

Teacher's Note:
a) On the Format tab, in the Shape Styles group, the More button shows the full gallery of styles.
b) Picture is used to fill a shape with an image, not to view styles.

30. (a) Which of the following is not an advantage of Computerised Accounting System ? [1 Mark]
(A) Timely generation of reports in desired format.
(B) Unprogrammed and un-specific reports cannot be generated.
(C) Economy in processing of accounting data.
(D) Efficient record keeping.

Answer: (B) Unprogrammed and un-specific reports cannot be generated.

Teacher's Note:
a) Inability to generate un-programmed reports is a limitation of computerised accounting.
b) The other three options are its advantages.

OR

(b) The need for codification is for : [1 Mark]
(A) easy processing of data and keeping the records.
(B) generation of mnemonic codes.
(C) to secure accounting reports.
(D) the encryption of data.

Answer: (D) the encryption of data. (as per the official CBSE marking scheme)

Teacher's Note:
a) The official CBSE marking scheme gives (D) as the answer.
b) Codification assigns codes to accounts, which also helps to keep data in a coded (encrypted) form.

31. List six features of an Accounting Software. [3 Marks]

Answer: (any six)
1. It can perform basic accounting functions.
2. It can manage stores (inventory).
3. It can do job costing.
4. It can manage payroll.
5. It gives many Management Information System (MIS) reports useful for day-to-day functions.
6. It helps file tax returns and prepare the Balance Sheet, Statement of Profit and Loss, GST/VAT forms and TDS returns.
7. It can manage budgets and scenarios.
8. It can calculate interest on pending amounts.

Teacher's Note:
a) Each feature carries half a mark, so list exactly six.
b) Keep each feature to one short line.

32. What is meant by 'Data', 'Information' and 'Transaction' ? [3 Marks]

Answer:
1. Data: A data item (data element) is the smallest named unit of data in an information system. Data is processed through accounting software to produce information in the form of accounting reports such as journals.
2. Information: Information is data that has been processed keeping in view the requirements of the decision maker. What is data at one level becomes information at another level.
3. Transaction: A transaction consists of four data elements: name of account, accounting code, date of transaction and amount. It is a record of inflow and outflow of resources.

Teacher's Note:
a) Each term carries 1 mark; give a clear one or two line meaning for each.
b) Remember the four data elements of a transaction.

33. (a) Each and every data from Notepad file can be saved as an Excel data file. This provides a lead that Excel worksheet consists of four types of data in cell. Name and state these data types. [4 Marks]

Answer:
1. Labels (Text): Descriptive data such as names and months, usually containing alphabetic characters. Excel aligns text to the left of the cell.
2. Values (Numbers): Raw numbers. Whole values such as 34 or 5763 are aligned to the right of the cell. Decimal values are also right-aligned, and a trailing zero is dropped (3.70 displays as 3.7).
3. Formulas: Instructions for Excel to perform calculations.
4. Dates: Date values whose display format depends on the country-specific setting.

Teacher's Note:
a) Each data type with its short explanation carries 1 mark.
b) Mention the default alignment (text left, numbers right) as a key point.

OR

(b) What is meant by 'Data Validation' ? What is facilitated by 'Error Alert Tab' ? [4 Marks]

Answer:
Data Validation is a feature that defines restrictions on the type of data entered into a cell. It is valuable because it keeps data accurate and consistent.
The Error Alert tab enables the user:
1. To display an error alert after invalid data is entered in a cell.
2. To type the desired message for the user and a title for reference.
3. To choose a style from the Style drop-down as per the seriousness of the error:
(i) Information - displays a message but does not prevent entry of invalid data.
(ii) Warning - displays a warning message but does not prevent entry of invalid data.
(iii) Stop - prevents entry of invalid data.

Teacher's Note:
a) The meaning of data validation carries 1 mark; the error alert points carry 3 marks.
b) Only the Stop style blocks invalid data completely.

34. 'As per the requirement of the user, Excel gives an option to change chart elements.' State the options available to change the 'shape outline'. [6 Marks]

Answer:
Changing the shape outline: To apply a different shape outline, click Shape Outline and then do one of the following:
1. To use a different outline colour, under Theme Colours or Standard Colours, click the colour to use.
2. To remove the outline colour from the selected chart element, click No Outline. If the selected element is a line, the line will no longer be visible on the chart.
3. To use an outline colour that is not available under Theme Colours or Standard Colours, click More Outline Colours, specify the colour on the Standard or Custom tab in the Colours dialog box and then click OK.
4. To change the weight (thickness) of a line or border, click Weight and then select the line weight to use. For additional line or border styles, click More Lines.
5. To use a broken line or border, click Dashes and then click the dash type to use.
6. To add arrows to lines, click Arrows and then click the arrow style to use. Arrow styles cannot be used for borders.
To apply a different shape effect, click Shape Effects. The shape effects available depend on the chart element selected, as they are not available for all chart elements.

Teacher's Note:
a) Each option with its steps carries 1 mark (six options for 6 marks).
b) Begin every point with the button name (No Outline, Weight, Dashes, Arrows) so the examiner can spot it quickly.

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