2nd PUC Accountancy Model Question Paper 4 with Answers

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Karnataka 2nd PUC Accountancy Model Question Paper 4 with Answers

Time: 3.15 Hours
Max Marks: 100

Instructions:

1. All Sub questions of Section – A should be answered continuously at one place.
2. Provide working notes wherever necessary.
3. 15 Minutes extra lime has been allotted for the candidates to read the questions.
4. Figures in the right hand margin indicate full marks.

Section – A

I. Answer any eight questions, each carries one mark: (8 × 1 = 8)

Question 1.
Receipts and Payments account is prepared from the summary of ________
Answer:
Cash book.

Question 2.
State any one method of maintaining capital accounts of a partner.
Answer:
Fluctuating capital system.

Question 3.
The old partners share of goodwill amount is brought in cash by a new partner in their Sacrificing Ratio. [True/False].
Answer:
True.

Question 4.
Give the Journal entry for payment of cash made immediately to the executor.
Answer:

Question 5.
When the shares are offered to the public for subscription and when it is actually subscribed by the public, it is called as __________
Answer:
Subscribed Capital.

Question 6.
Debentures Premium cannot be used to
a. Write off the discount on issue of shares/debentures.
b. Write off the premium on redemption of shares/debentures.
c. Pay dividends
d. Write off capital losses.
Answer:
c. Pay dividends.

Question 7.
Expand Trade Receivables.
Answer:
Bills Receivables and Debtors together form Trade Receivables.

Question 8.
A Statement in which the balance sheet items are expressed as the ratio of each asset to total assets and the ratio of each liability to total liabilities is called as
a. Common size Balance Sheet
b. Comparative Balance Sheet
c. Trend Balance Sheet
d. Ratio Analysis.
Answer:
a. Common size Balance Sheet

Question 9.
State the definition of Accounting Ratio.
Answer:
According to Kell and Bedford, “A ratio is an expression of the quantitative relationship between two numbers”.

Question 10.
Give an example for cash flows from financing activities.
Answer:
Dividend paid or interest paid on share capital and debentures respectively.

Section – B

II. Answer any five Questions. Each carries Two marks (5 × 2 = 10)

Question 11.
What is an income and expenditure account?
Answer:
An income and expenditure account is a revenue account of not for profit organisation. It is a summary of income and expenses at the end of the account year. It is prepared to ascertain the surplus or deficit of the concern at the end of accounting period.

Question 12.
What is Fixed Capital Method?
Answer:
The balance of capital account of each partner remains fixed year after year under the Fixed Capital system. The various adjustments regarding interest on capitals, drawings, profits or losses are all done through current account of partners.

Question 13.
State two reasons for Admission of a Partner.
Answer:
A new partner may be admitted
[a) To secure additional capital
(b) To secure additional managerial skill

Question 14.
State any two reasons for dissolution of partnership firm.
Answer:
1. On the expiry of the fixed period, if the firm is formed for a fixed period of time.
2. On the happening of any subsequent event which makes the business of the firm illegal.

Question 15.
What is Forfeiture of Shares?
Answer:
When the shareholders breakdown to pay the amount either on allotment or calls on shares, the company may take a call to cancel their allotment and treat the amount on such shares as forfeited within the provisions of articles.

Question 16.
State the divisions involved in the Assets part of the Balance Sheet.
Answer:
The divisions involved in the Assets part of the Balance Sheet are as follows:
[a) Non-current Assets
(b) Current Assets

Question 17.
State the meaning of Comparative Financial Statements.
Answer:
The comparative financial statements are those statements where the financial position of different periods of time is considered. The elements of financial statements are shown in a comparative form so as to give an idea of the financial position of two or more periods.

Question 18.
What is Notional Cash Flow? Give an example.
Answer:
The indirect movement of cash in and out of business in the normal course is called as “Notional Cash Flow”.
Example: Increase in the value of the debtors/creditors from the opening value at the end of the year, this may be due to credit sales (debtors)/credit purchases (creditors), such increase is only a notional cash flow

Section – C

III. Answer any four questions. Each carries six marks. (4 × 6 = 24)

Question 19:
Sandhya and Neela were partners in a firm sharing profits and losses in the ratio of 3:2. They admit Lalitha for 1/6^th share in profits and guaranteed that his share of profits will not be less than ₹ 2 5,000. Total profits of the firm were ₹ 90,000. Calculate share of profits for each partner when: Guarantee is given by Sandhya and Neela equally. Prepare Profit and Loss Appropriation account.
Answer:

Question 20:
Naveen, Suresh and Tarun are partners sharing profits and losses in the ratio of 5:3:2. Suresh retires from he firm and his share is acquired by Naveen and Tarun in the ratio of 2:1. Calculate NPSR.
Answer:
Gained Share = Retiring Partners Share × Acquired Share
Naveen = \(\frac{3}{10} \times \frac{2}{3}=\frac{6}{30}\)
Tarun = \(\frac{3}{10} \times \frac{1}{3}=\frac{3}{30}\)
NPSR = Old Share (+) Gained Share

∴ 21 : 9/7 : 3

Question 21.
Mukund, Manohar and Prakash are partners in a business sharing profits and losses in the ratio of 2:2:1 respectively. Their Balance Sheet as on March 31,2017 was as follows.

Prakash died on 30th Sept. 2017. The partnership deed provided the following:
1. The deceased partner will be entitled to his share of profit up to the date of death calculated on the basis of previous year’s profit.

2. He will be entitled to his share of goodwill of the firm calculated on the basis of 3 year’s purchase of average of last 4 years profit. The profits for the last four financial years are given below
For 2013-14 ₹ 80,000m for 2014-15 ₹ 50,000, for 2015-16 ₹ 40,000 and for 2016-17 ₹ 30,000.

3. The drawings of the deceased partner up to the date of death amounted to ₹ 10,000. Interest on Capital is to be allowed at 12% per annum.
Show Prakash Capital Account.
Answer:

Question 22:
Panduranga Rao Co. Ltd., purchased Furniture of the book value of ₹ 99,000 from Radha Bai Ltd. It was agreed that purchase consideration be paid by issuing 6% debentures of ₹ 100 each.
Give the necessary journal entries in the books of the company, if Furniture is Purchased and Debentures have been issued at.
(a) At par
(b) At discount of 10%.
(c) At a premium of 10%
Answer:

Question 23:
From the following trial balance, prepare Balance Sheet of Star Ltd., for the year ending 31st March 2018 as per Schedule III of Companies Act, 2013.

Answer:

Question 24.
Current ratio is 3:2 and working capital is 50, 000. calculate the amount of current assets and current liabilities.
Answer:
Given
Currrent Ratio = 3 : 2
Working Capital = ₹ 50,000

so, Current Assets = \(\frac{50,000}{1} \times 3\) = ₹ 1,50,000
Current Liabilities = \(\frac{50,000}{1} \times 2\) = ₹ 1,00,000
∴ CA = ₹ 1,50,000, C.L = ₹ 1,00,000

Question 25:
From the following particulars, calculate cash flow from investing activities

Interest received on debentures held as investments ₹ 60,000
Dividend received on shares held as investment ₹ 10,000
A plot of land had been purchased for investment purpose and was let out for commercial use and rent received ₹ 30,000
Answer:
Calculation of cash flows from investing activities by indirect method

Note: Rent from plot received would be recorded in operating activities as it is a non-operating expense.

Section – D

IV. Answer any four questions. Each carries twelve marks: (4 × 12 = 48)

Question 26.
Following Receipt and Payment Account was prepared from the cash book of Bengaluru charitable Trust for the year ending March 31, 2018.

Prepare Income and Expenditure Account for the year ended March 31, 2018, and a Balance Sheet as on the date after the following adjustments:
a. It was decided to treat one-third of the amount received on account of donation as income.
b. Insurance premium was paid in advance for three months.
c. Interest on Investment ₹ 1,100 accrued was not received.
d. Rent ₹ 600 outstanding as on March 31, 2018.
Answer:

Question 27.
Ganga and Yamuna are partners in a firm. Following is their Balance Sheet on 31.03.2017.

On 1-4-2017, Kaveri is admitted into partnership on the following terms:
(a) Kaveri should bring ₹ 13,000 as capital.
(b) Goodwill of the firm is valued at ₹ 6,000.
(c) Provision for doubtful debts is to be increased by ₹ 1,200
(d) Patents and machinery are to be reduced by 20% and ₹ 2,000 respectively.
(e) Land & Buildings are to be increased by 4,000.
(f) Capital Accounts of partners are to be adjusted in their new profit sharing ratio 3:2:1, based on Kaveri’s Capital (Adjustments to be made in cash)
Prepare:
(i) Revaluation Account.
(ii) Cash Account.
(iii) Partners’ Capital Accounts &
(iv) New Balance Sheet of the firm.
You are required to prepare the necessary ledger account and the New Balance sheet of the firm.
Answer:

Question 28.
Ramya, Kavya and Divya are partners sharing profits and losses in the ratio of 1:2:1 Their Balance sheet as on 31.3.18 was as follows:

On the above date they decided to dissolve the firm:
1. Assets realised as follows:
Debtors ₹ 13,500, Stock ₹ 19,800, Buildings ₹ 62,000, Vehicle which was unrecorded also realised ₹ 4,000 and Machinery realised at book value.
2. Furniture was taken ovr by Ramya at a valuation of ₹ 9,000
3. Creditors were settled at 10% less. Divya took over Vani’s loan.
4. Interest on Bank O/D due ₹ 400 was also paid off.
5. Realisation expenses amounted to ₹ 4,000.
Prepare:
1. Realization A/c
2. Partners Capital Accounts and
3. Cash A/c
You are required to prepare the necessary ledger accounts.
Answer:

Question 29.
Bharath Company Ltd., issued 30,000 equity shares of ₹ 10 each at a premium of ₹ 1 per share to the public. The amount payable was payable as follows:
₹ 2 on application
₹ 5 on allotment (including premium)
₹ 4 on first and final call
All the shares were subscribed and the money duly received except the first and final call on 2,000 shares. The Directors forfeited these shares and re-issued them as fully paid-up at ₹ 8 per share.
Pass the necessary Journal entries in the books of a company.
Answer:

Question 30.
Dhruva Gundu Co. Ltd., issued 3,000, 14% Debentures of ₹ 100 each at a discount of 10% on 1-4-17, interest on these debentures are payable annually on 31-3-18. The debentures are redeemable at par in three equal installments at the end of the third, fourth & fifth year.
Prepare:
a. 14% Debentures Account
b. Discount on Debentures Account
c. Interest on Debentures Account
Answer:



Working Notes:
a. Debentures = 3,000, F.V. = ₹ 100 each, Interest = 14%, Discount = 10%
So, 3,000 × [₹ 100 (-) 10%] = ₹ 2,70,000
Discount = 3,000 × ₹ 10 = ₹ 30,000.

b. The Debentures are redeemed at par at end of 3^rd [i.e., 31-3-20], 4^th [31-3-21] & 5^th [31-3-22] years. So,
31 – 3 – 18 = ₹ 3,00,000
31 – 3 – 19 = ₹ 3,00,000
31 – 3 – 20 = ₹ 2,00,000
31 – 3 – 21 = ₹ 1,00,000
31 – 3 – 22 = ————
Note:
The debentures are redeemed at par, i.e., Since there are 3,000 debentures and they are redeemed at last 3 years, 1,000 debentures are redeemed per year. Thus, the amount of redemption each year is 1,000 × ₹100 = ₹ 1,00,000.

c. Calculation of Interest on Debentures :
The interest must be calculated on the amount of debentures at the start of the particular year
1-4-17 to 31-3-18 = 3,00,000 × 14% 42,000
1-4-18 to 31-3-19 = 3,00,000 × 14% 42,000
1-4-20 to 31-3-20 = 3,00,000 × 14% 42,000
1-4-21 to 31-3-21 = 2,00,000 × 14% 28,000
1-4-21 to 31-3-22 = 1,00,000 × 14% 14,000

d. The discount / loss on issue of debentures are ficticious /waste assets and such items must be written off over a period of debentures time, in this case, five years that is 1-4-17 to 31-3-22.

e. Debentures Interest, Discount on Debentures are nominal account and by default any such nominal / temporary accounts has to be transferred to Profit & Loss Account

Question 31.
The followings are the Balance Sheets of Alpha Ltd., as at March 31st 2016 and 2017.

You are required to prepare a comparative Balance Sheet.
Answer:

Question 32.
From the following information, you are required to calculate.
1. Investment Turnover Ratio
2. Fixed assets Turnover Ratio
3. Working Capital Turnover Ratio
4. Operating Profit Ratio
5. Book Value Per Share

Particulars	₹
Revenue from Operations	20,00,000
Paid up Share Capital(₹ 10 each)	5,00,000
Current Assets	4,00,000
Operating Profit	16,00,000
13% Debentures	1,00,000
General Reserve	1,00,000
10% Preference Shares of  ₹ 10	2,00,000
Current Liabilities	2,50,000
Plant and Machinery	3,00,000
Furniture	5,00,000
Net profit after Tax	1,00,000

Market price of per share ₹ 34, Tax amounted to ₹ 20,000 and EPS is ₹ 1.67
Answer:

Section – E

V. Answer any two questions. Each carries five marks (2 × 5 = 10)

Question 33.
Write two Partners Current Accounts under Fixed Capital System with 5 imaginary figures.
Answer:

Question 34.
Write the Proforma of a Balance Sheet of a Company with main heads only.

Question 35.
Write the proforma of Cash Flows from Operating Activities under Direct Method.