ANSWER KEY FIRST SEMESTER EXAMINATION

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1 ANSWER KEY FIRST SEMESTER EXAMINATION XII ACCOUNTANCY MARKS TIME-3 HRS PART A ACCOUNTING FOR PARTNERSHIP FIRMS AND COMPANIES 1.No, a partnership firm can have a maximum of only 50 members. (1) 2.Employees Stock Option Plan A voluntary scheme under which the co. offers its employees the right to purchase securities at a pre-determined price, lower than the market price, at a future date. (1) 3.He can do so only if all the partners agree to change the provisions of Partnership Deed by including a clause for charging interest on drawings. (1) 4.Banking companies and AIFIs regulated by RBI. (1) 5. Calculation of Purchase Consideration: Nominal Value of Shares issued = x 100 = 10,00,000 Securities Premium Reserve = 1,00,000 Bank draft = 11,00,000 Purchase consideration = 22,00,000 KING LTD. JOURNAL Date Particulars L.F Debit Credit i. Sundry Assets A/c Dr 25,00,000 Goodwill A/c (b/f) Dr 3,00,000 To Sundry Liabilities A/c 6,00,000 (1) To Queen Ltd. 22,00,000 (Being the purchase of assets and liabilities of Queen Ltd.) ii. Queen Ltd Dr 22,00,000 To Equity Share capital A/c 10,00,000 To Securities Premium Reserve A/c 1,00,000 To Bank A/c 11,00,000 (2) (Being 10,000 Equity Shares issued of 100 each issued at a premium of 10% and 11,00,000 paid by Bank draft) (3) 6. JOURNAL a.)bank a/c Dr To 9% debenture application & allotment a/c (1/2) 9% debenture application & allotment a/c Dr Loss on issue of debentures a/c Dr 7670 To 9% debenture application a/c To premium on redemption of debentures a/c 5369 (1) b.) Bank a/c Dr To 9% debenture application & allotment a/c (1/2)

2 9% debenture application & allotment a/c Dr Loss on issue of debentures a/c Dr 6903 (1) To 9% debenture application a/c To premium on redemption of debentures a/c 6903 To securities premium reserve a/c 3068 ( =3) 7. JOURNAL a.) Bank a/c Dr 2,89,00,000 To equity share application & allotment a/c 2,89,00,000 b.) Equity share application & allotment a/c Dr 2,89,00,000 To equity share capital a/c 1,00,00,000 To bank a/c 1,19,00,000 To securities premium reserve a/c 70,00,000 Values : Generation of employment opportunities, Balanced regional development (2+1=3) 8. JOURNAL ENTRY: DATE PARTICULARS L.F DEBIT CREDIT 2014 Apr 1 Meenakshi s Current A/c Dr. 960 Gauri s Current A/c Dr. 3,840 To Kavita s Current A/c 4,800 (4) (Adjustment for interest on capital for the year and ) W.N. Particulars Kavitha Meenakshi Gauri Wrong Interest on capital (2016 & 2017) Wrong divisible loss(2016) Wrong divisible loss(2017) Net effect 4800 (960) (3840) 9. Balance Sheet of Surya Ltd. as on Particulars Note No. Amount Equity and Liabilities Shareholders funds Share capital 1 2,79,600 Notes to Accounts 1. Share capital Authorised share capital equity shares of Rs 10 each 5,00,000 Issued share capital equity shares of Rs 10 each 3,00,000 Subscribed share capital Subscribed and fully paid up equity shares of Rs 10 each 2,78,000 Subscribed but not fully paid up 200 equity shares of Rs 10 each Calls in arrears (200*2) ,796,00 (4)

3 10. ROSHNI LTD. JOURNAL ISSUE OF DEBENTURES Date Particulars L.F Debit Credit 2013 April 1 Bank A/c Dr. 42,00,000 42,00,000 To Debenture Application & Allotment A/c (Being the Application and allotment money received on issue of Debentures) (1/2) April 1 Debenture Application & Allotment A/c Dr. 42,00,000 Loss on Issue of Debenture A/c Dr. 3,36,000 To 7% debenture A/c 42,00,000 To Premium on Redemption of Debenture A/c 3,36,000 (1/2) (Being allotment of Debentures redeemable at 8% premium) REDEMPTION OF DEBENTURES: Date Particulars L.F Debit Credit 2014 March 31 Surplus i.e. balance in Statement of Profit & Loss Dr. 10,50,000 To Debenture redemption Reserve A/c 10,50,000 (1) (Being the profits transferred to Debenture Redemption Reserve) 2016 April 1 Debenture Redemption Investment A/c Dr. 6,30,000 To Bank A/c 6,30,000 (1) (Being the Investment made as fixed deposit earning 2016, March 31 Bank A/c Dr. 6,86,700 TDS collected A/c Dr. 6,300 To Debenture Redemption Investment A/c 6,30,000 (1) To Interest Earned A/c 63,000 (Being the fixed deposit encashed on Redemption and interest 2016,March 31 7% Debenture A/c Dr 42,00,000 Premium on Redemption of Debenture A/c Dr 3,36,000 To Debentureholder s A/c 45,36,000 (1) (Being amount due to Debenture holders) March 31 Debentureholder s A/c Dr. 45,36,000 To Bank A/c 45,36,000 (1/2) (Being the amount due paid on redemption) March 31 Debenture Redemption Reserve A/c Dr. 10,50,000 To General Reserve A/c 10,50,000 (1/2) (Being Debenture Redemption Reserve transferred to General Reserve) (6) 11.i.) In the books of NK Ltd. JOURNAL Own debentures a/c Dr 5,10,000 To bank a/c 5,10,000 (1) 9% debentures a/c Dr 5,00,000 Loss on cancellation of own debentures a/c Dr10000 To Own debentures a/c 5,10,000 (1) Statement of P&L Dr To Loss on cancellation of own debentures a/c (1)

4 ii.)12% debentures a/c Dr 3,00,000 To debenture holders a/c 2,70,000 (1.5) To Statement of P&L 30,000 Debentureholders a/c Dr 2,70,000 To equity share capital a/c 2,70,000 (1) (No. of equity shares = /90 = 3000) (1/2) (3+3=6) (Narration & complete format required) 12.a.) P&L Appropriation a/c for year ended 31/3/2017 Divisible profit transferred to N/Pas per P&L Es capital a/c Less Fs capital a/c Less Gs capital a/c b.) 1.)Interest on drawings = 800 * 12 * 15/100*6.5/12 = Rs ) Interest on drawings = 800 * 12 * 15/100*6/12 =Rs ) Interest on drawings = 800 * 12 * 15/100*5.5/12 =Rs 660 (3+3=6) 13. BOOKS OF RS LTD. JOURNAL Date Particulars L.F. Debit Amount Credit Amount 2015, Jan. 10 Bank a/c Dr To equity share application a/c (Application money received for Rs 5 per share) 16 Equity Share application a/c Dr To Securities premium reserve a/c To Equity Share allotment a/c To Equity Share capital a/c To Bank a/c (Transfer of share application money to share capital a/c, securities premium a/c, refunded for 4000 shares for rejected applications and balance to share allotment as shares were allotted on pro-rata basis) 31 EquityShare allotment a/c.. Dr To Equity Share capital a/c (Amount due on Rs 4 per share) Feb. 20 Bank..a/c.. Dr To Equity Share allotment/c (Balance amount received on allotment)

5 April 01. Equity Share First and final call a/c.. Dr To Equity Share capital a/c (First and final call money due) 20 Bank a/c.... Dr Calls-in-arrears a/c Dr To Equity Share First and final call a/c (Money received on first and final call except on 500 shares) Aug. 27 Equity Share capital a/c.. Dr To calls in arrears a/c 1500 To Forfeited shares a/c (Forfeited the shares on which first and final call money was not received) Oct. 03 Bank a/c.... Dr Forfeited shares a/c.... Dr To Equity Share capital a/c (Re-issued the forfeited Rs 8 per share fully paidup) Forfeited shares a/c Dr To capital reserve/c ( Being profit on reissue transferred to capital reserve a/c.) (8) PART B Option I (Analysis of Financial Statements) 15. No flow because declared dividend will be paid in next year. (1) 16. Window dressing, personal bias, qualitative factors ignored, effect of price level changes (any 2) (1) 17.Manipulation of accounting facts and figures to conceal vital facts and present financial statements better than what they actually are. (1) 18.Shown in operating activities by way of deduction. (1) 19.a.)Shareholders funds Reserves & surplus b.)non current assets Long term loans and advances c.) Non current assets. Fixed assets ( Intangible assets under development) (3*1=3) Comparative Statement of Profit and Loss of DD Ltd as on 31/3/2014 & 31/3/ Particulars NoteNo (Rs) (Rs) Absolutechange %change Revenue from operations 34,00,000 75,00,000 41,00, Other Income 3,00,000 1,50,000 (1,50,000) (50) Total revenue 37,00,000 76,50,000 39,50, Employee benefit Expenses 22,20,000 45,90,000 23,70, (60% of total revenue) Other expenses 2,22,000 4,59,000 2,37, Total expenses 24,42,000 50,49,000 26,07, (10% of emp benefit expenses) PBT 12,58,000 26,01,000 13,43, Tax rate ,11, PAT ,31,

6 Any 2 values to be given.( Environment friendly approach, Balanced regional development) (4) 21.a.)Interest coverage ratio = N/P before interest & tax/interest on long term debt = 3,33,333+4,80,000/4,80,000 = 1.69 times Assume N/P before tax as x. Hence x- 40/100x = i.e. x = 3,33,333 Interest on long term debt = 12/100 *40,00,000 = 4,80,000 PBIT = 3,33,333 +4,80,000 = Rs 8,13,333 b.)current Ratio = 3.5:1 Quick Ratio = 2:1 Let Current Liabilities = x Current Assets = 3.5x And Quick Assets = 2x Inventory = Current Assets Quick Assets 24,000 = 3.5x 2x 24,000 = 1.5x x = Rs.16,000 Current Assets = 3.5x = ,000 = Rs56,000. (2+2=4) 22.Cash flow from investing activities: Purchase of plant & machinery (1,50,000) Sale of plant & machinery Cash used in investing activities- (1,25,000) Plant & Machinery a/c Particulars Amount Particulars Amount Bal b/d 8,60,000 Bank a/c 25,000 Statement of P &L 5000 Depreciation 40,000 Bank a/c 1,50,000 Bal c/d 9,50,000 10,15,000 10,15,000 (4) 23.W.N. 1.Net profit before tax = Surplus + Tax provision = =Rs Provision for tax a/c Particulars Amount (Rs) Particulars Amount (Rs) To bank (tax paid) To bal c/d By bal b/d By P&L Statement

7 Cash Flow Statement of Karunya ltd. as on 31/3/2014 Particulars Amount (Rs) Amount (Rs) I. CASH FLOW FROM OPERATING ACTIVITIES Net profit before tax + Depreciation on machinery Goodwill written off Operating profit before working capital changes +Increase in trade payables -Increase in inventories - Increase in trade receivables Cash generated from operating activities - Income tax paid Cash flow from operating activities II. Purchase of machinery CASH FLOW FROM INVESTING ACTIVITIES Cash used in investing activities III. Issue of shares CASH FLOW FROM FINANCING ACTIVITIES Long term borrowings raised Cash flow from financing activities Net increase in cash & cash equivalents +Opening cash & cash equivalents Closing cash & cash equivalents (50000) (200000) (70000) (760000) PART B Option II Computerised Accounting System (760000) Data validation is a feature to define restrictions on wrong/invalid data entered into a cell.it necessitates the fact that data entered must be accurate and consistent. (1) 16.A customized accounting software meets the special requirements of the user as changes may be incorporated in the ready to use software package and secrecy of data and software can also be maintained.(1) 17.*Desktop databases Oriented towards single user applications, cheaper than server databases and offer simple, inexpensive solutions.eg. MS -Access *Server databases Oriented towards multi user applications, costlier than desktop databases.eg.oracle, SQL server. 18.Preparation of employees salary slips and statements, Generation of bank advice. (1) 19.Chart area, plot area, data points, horizontal & vertical axis, legend, data label, chart & axis titles (3) (any 3 to be explained) 20.CAS may be defined as the processing of accounting transactions through the use of hardware and software inorder to produce accounting reports and records. Any 3 features to be ennumerated. (1+3=4)

8 a.) Simple & Integrated CAS is designed to automate and integrate all business operations and integrate to provide accurate, up to date business information rapidly. b.)transparency & control CAS provides sufficient time to plan, increases data accessibility and enhances user satisfaction ensuring greater transparency and access to vital information. c.)speed & accuracy CAS provides user definable templates for fast, accurate data entry of transactions and helps in generalizing desired documents & reports. d.)scalability CAS enables in changing the volume of data processing in tune with the change in size/scale of business. e.)reliability CAS ensures that the generalized critical financial information is accurate, controlled & secured. 21. The significance of grouping of accounts and hierarchy of accounts in the generation of ledger accounts and Trial Balance wrt to grouping and codification of accounts maybe highlighted as follows. In computerised accounting system, every day business transactions are recorded with the help of computer software. Logical scheme is implied for codification of account and transaction. Every account and transaction is assigned a unique code. The grouping of accounts is done from the first stage. [Briefly explaining what is account groups and hierarchy of ledger].the hierarchy of ledger accounts is maintained and the data is transferred into Ledger accounts automatically by the computer. In order to produce ledger accounts the stored transaction data is processed to appear as classified so that same is presented in the form of report. The preparation of financial statements is independent of producing the trial balance. (4) 22.Pass word security, Data audit/audit Trail, Data vault /Encryption to be explained. ( =4) a.) Pass word security- A mechanism which enables a user to access a system, defining the user rights according to organizational policy.password is a key/code allowing access to system. b.) Data audit/audit trail This feature enables one to know who and what changes have been made in the original data thereby helping to fix responsibility of those who have manipulated data, ensuring data integrity. c.) Data vault /Encryption Provides additional data security by scrambling information making its interpretation extremely difficult. 23.No.Of Effective Days= No.Of Working Days Leave availed NOED assumed to be A1, NOWD assumed to be A2. A1 =(A2-0.5) BPE assumed to be B1 and BP,Rs 9000 assumed to be B2 B1 =(B2*A1)/28 Or =(B2*A1)/A2 DA assumed to be C1 C1 = (0.55*B1) HRA assumed to be D1, EMP TYPE assumed to be E1 D1 =IF (E1 = SUP,0.25*B1,0.10*B1) TA assumed to be T1 T1 =IF(E1 = SUP,3000,2000) (2+4=6) *******************************

SAMPLE QUESTION PAPER 2 ACCOUNTANCY

SAMPLE QUESTION PAPER 2 ACCOUNTANCY Class XII Time allowed: 3hrs Maximum Marks: 80 General Instructions: (i) This question paper contains two parts A, B. (ii) All parts of a question should be attempted