CBSE Board Class 12 Accountancy Previous Year Question Papers 2007

                                                         ACCOUNTANCY
Time allowed : 3 hours                                                            Maximum Marks : 80
General Instructions :
(i) This question paper contains three parts A, B and C.
(ii) Part A is compulsory for all candidates.
(iii) Candidates can attempt only one part of the remaining parts B and C.
(iv) All parts of the questions should be attempted at one place.

                                                                  PART A
(Accountancy)
1. List any four essential features of partnership.                      2

2. Give the meaning of ‘Reserve Capital’.                          2

3. What is meant by ‘Preferential Allotment of Shares’ ?               2

4. Define a ‘Debenture’.              2

5. A, B and C were partners in a firm sharing profits in 2 : 3 : 5 ratio. A was guaranteed a minimum profit of Rs. 1,00,000. Any deficiency on this account was to be borne by C. The net profit of the firm for the year ended 31.3.2006 was Rs. 4,50,000. Prepare Profit and Loss Appropriation Account of A, B and C for the year ended 31.3.2006.                      3

6. A Ltd. issued 10,000 7% debentures of Rs. 100 each. Pass the necessary journal entries for issue of debentures in the following cases :               3
(a) When debentures are issued at par and are redeemable at 5% premium.
(b) When debentures are issued at 5% premium and are redeemable at par.
(c) When debentures are issued at 5% premium and are redeemable at 5% premium.

7. X, Y and Z are partners in a firm sharing profits in the ratio of 4 : 3 : 3. They admitted P as a new partner. X, Y and Z each surrendered l/3rd of his share in favour of P. Calculate the new profit sharing ratio of X, Y, Z and P.                4

8. P, Q and R were partners in a firm sharing profits in 7 : 8 : 5 ratio. Their firm was dissolved on 28.2.2007. After transfer of assets (other than cash) and outsider’s liabilities to ‘Realisation Account’, the following transactions took place :
(i) Debtors with Rs. 9,000 paid Rs. 8,900 in full settlement of their claim.
(ii) Creditors Rs. 6,000 were paid Rs. 5,500 in full settlement of their claim.
(iii) Expenses of realisation Rs. 900 were paid by P.
(iv) Loss on realisation was Rs. 15,000.
Pass necessary journal entries for the above transactions in the books of P, Q and R.                      4

9. Dhyey Ltd. redeemed Rs. 30,00,000, 8% debentures issued at a premium of 5% as follows. Rs. 12,00,000, 8% debentures were converted into equity shares of Rs. 100 each issued at a premium of Rs. 25 per share and the balance by converting them into 8% preference shares of Rs. 100 each issued at a discount of Rs. 10 per share. Pass necessary journal entries in the books of the company. Show your workings clearly.                   4

10. On 1.3.2007 Jay Ltd. had a balance of Rs. 25,20,000 in its Profit and Loss Account. Instead of declaring a dividend the company decided to utilise the profits for the redemption of its outstanding Rs. 24,00,000 7% debentures at a premium of 5%. Pass necessary journal entries for the redemption of debentures.                    4
11. Raja Ltd. purchased building from Ashoka Ltd. for Rs. 36,00,000. The vendors were paid by issue of equity shares of Rs. 10 each. Pass necessary entries in the books of Raja Ltd. when
(i) shares were issued at par,
(ii) shares were issued at 20% premium and
(iii) shares were issued at 10% discount.                 4

12. G and H were partners in a firm sharing profits and losses in the ratio of 3 : 1. On 28.2.2007 their firm was dissolved. The Balance Sheet of the firm on that date of dissolution was as follows :
Balance Sheet of G and H as on 28.2.2007 Liabilities Amount Assets Amount
                           Rs.                                       Rs.
Bank Loan     70,000             Cash           10,000
Creditors       1,30,000          Building      5,00,000
Capitals :                                Stock            40,000
 G    3,00,000                      Profit & Loss A/c   50,000
  H  1,00,000 4,00,000
                        6,00,000                                6,00,000
Building realised Rs. 3,00,000; Stock Rs. 15,000. Rs. 1,05,000 were paid to the creditors in full settlement of their account. The firm had a joint life policy of Rs. 10,00,000 which was surrendered for Rs. 70,000 on the date of dissolution. The annual premium paid on the joint life policy was debited to the Profit and Loss Account. Prepare Realisation Account, Cash Account and Partners’ Capital Accounts.               6
OR
A and B were partners in a firm sharing profits and losses equally. On 28.2.2007 they decided to dissolve the partnership. On the date of dissolution A’s capital was Rs. 60,000 and B’s capital was Rs. 45,000. There was a cash balance of Rs. 4,000. Creditors on that date were Rs. 20,000 and there was a balance of Rs. 39,000 in the general reserve account.
Sundry assets realised Rs. 1,02,000. Expenses on dissolution were Rs. 5,000. Prepare Realisation Account, Cash Account and Partners’ Capital Accounts.                6

13. Laxmi Ltd. invited applications for issuing 10,00,000 equity shares of Rs. 100 each at a premium of Rs. 25 per share. The amount was payable as follows :
On Application  Rs. 50 (including premium)
On Allotment  Rs. 50
On First and Final call — Balance
Applications for 17,50,000 shares were received. Applications for 2,50,000 shares were rejected and pro-rata allotment was made to the remaining applicants. Overpayments received on application were adjusted towards sums due on allotment. Victor, to whom 1,000 shares were allotted, failed to pay allotment and first and final call. His shares
were forfeited. The forfeited shares were reissued for Rs. 11,000 fully paid up. Pass necessary journal entries in the books of Laxmi Ltd.                     6
OR
Pass necessary journal entries in the books of a company for the following transactions                           6
(i) 400 equity shares of Rs. 100 each issued at a discount of 10% were forfeited for the non-payment of final call of Rs. 20 per share. The forfeited shares were re-issued for Rs.\ 40,000 fully paid up.
(ii) 13,000 equity shares of Rs. 50 each issued at a premium of Rs. 8 per share, were forfeited for the non-payment of allotment money (including premium) of Rs. 23 per share. Application money of Rs. 15 per share had been received on these shares and the first and final call of Rs. 20 per share was not made. The forfeited shares were re-issued
at Rs. 55 per share fully paid up.

14. Following is the Balance Sheet of P, K and B as on 31.3.2006. They shared profits in the ratio of their capitals.
Liabilities Amount Assets Amount
Rs. Rs.
Creditors      4,600         Building        23,000
Reserve        5,400         Machinery    13,000
Capitals :                          Stock             4,700
P 24,000                           Debtors        6,500
K 12,000                           Cash             6,400
B 8,000          44,000
                        54,000                               54,000
P died on 30.6.2006. Under the terms of partnership the executors of a deceased partner were entitled to :
(i) Amount standing to the credit of the Partner’s Capital Account.
(ii) Interest on capital at 12% per annum.
(iii) Share of goodwill of the firm which was valued at Rs. 36,000 on P’s death.
(iv) Share of profit from the closing of last financial year to the date of death on the basis of last year’s profit. Profit for the year ended 31.3.2006 was Rs. 7,000.
Prepare P’s Capital Account to be rendered to his executors.                 6

15. A and B are partners in a firm sharing profits in 2 : 1 ratio. They admitted C for 1/4th share in profits. C was to bring Rs. 30,000 as capital and capitals of A and B were to be adjusted in the profit sharing ratio on the basis of C’s capital. The Balance Sheet of A and B as on March 31, 2006 (before C’s admission) was as under :
Liabilities         Amount              Assets              Amount
                               Rs.                                                Rs.
Creditors            20,000              Cash                2,000
Bills Payable    19,000               Debtors           50,000
General Reserve 6,000             Stock               10,000
Capitals :                                      Machinery       25,000
A 50,000                                        Building          40,000
B 32,000            82,000
                            1,27,000                                     1,27,000
Other terms of agreement were as under :
(i) C will bring Rs. 12,000 for his share of goodwill.
(ii) Building was valued at Rs. 45,000 and Machinery at Rs. 23,000.
(iii) A provision of bad debts was created @ 6% on debtors.
(iv) Capital Accounts of A and B were adjusted by opening Current Accounts.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of A, B
and C.                     8
OR
P, Q and R were partners in a firm sharing profits in the ratio of 3 : 2 : 1. On 31.3.2006 Q retired from the firm. On the date of Q’s retirement the Balance Sheet of the firm was as follows :
Balance Sheet of P, Q and R as on 31.3.2006
Liabilities Amount Assets Amount
                                               Rs.                                                                                  Rs.
Creditors                              27,000                Bank                                                  27,600
Bills Payable                       12,000               Debtors    6,000
Outstanding Rent               2,200   Less Provision for doubtful debts 400       5,600
Provision for legal claims 6,000                 Stock                                                   9,000
Capitals :                                                         Furniture                                             4,100
P 46,000                                                          Premises                                           96,900
Q 30,000
R 20,000                             96,000
                                             1,43,200                                                                          1,43,200

On Q’s retirement it was agreed that :
(i) Premises will be appreciated by 2% and furniture will be appreciated by Rs. 1,700. Stock will be depreciated by 10%.
(ii) 5% provision for doubtful debts was to be made on debtors and Rs. 7,200 for legal damages.
(iii) Goodwill of the firm was valued at Rs. 24,000.
(iv) Rs. 20,000 from Q’s Capital Account will be transferred to his loan account and the balance will be paid to him by cheque.
Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of P and R after Q’s retirement. 8

                                                                    PART B
(Analysis of Financial Statements)
16. State any two objectives of preparing a ‘Cash Flow Statement’.               2

17. X Ltd. is a Mutual Fund Company. The. company invested Rs. 50 lakhs in the shares of Y Ltd. State with reason whether the dividend received on the shares of Y Ltd. will be cash flow from operating activities or from investing activities.2

18. The Balance Sheets of Blue Bell Ltd. as on March 31, 2005 and 2006 are given below
            Blue Bell Ltd.
            Balance Sheets as on March 31, 2005 and 2006
            Particulars                         2005                     2006
                                                      Amount                Amount
                                                          Rs.                        Rs.
             Share Capital                4,26,000              3,44,000
             Long-term loans           6,96,000             4,38,000
            Current Liabilities          2,98,000             78,000
                                                     14,20,000            8,60,000
            Fixed Assets                  5,68,000             4,30,000
            Investments                  6,000                    4,000
            Current Assets             8,46,000              4,26,000
                                                    14,20,000            8,60,000
Prepare Comparative Balance Sheets showing percentage changes from 2005 to 2006.                3

19. Briefly explain the interest of investors and management in the analysis of financial
statements.              3

20. Calculate any two of the following ratios on the basis of information given below :                    3
(i) Liquid Ratio
(ii) Proprietary Ratio
(iii) Operating Ratio
Information :
Sales Rs. 3,40,000; Cost of Goods sold Rs. 1,20,000; Selling expenses Rs. 80,000;
Administrative expenses Rs. 40,000; Current Assets Rs. 1,50,000; Current Liabilities
Rs. 1,05,000; Closing Stock Rs. 10,000; Fixed Assets Rs. 2,80,000; Equity Share Capital
Rs. 2,75,000 and General Reserve Rs. 2,00,000.

21. XY Ltd. had a profit of Rs. 15,00,000 for the year ended 31.3.2006 after considering the
following :
Depreciation on building          Rs. 45,000
Depreciation on machinery      Rs. 22,000
Goodwill written off                     Rs. 17,000
Loss on sale of machinery       Rs. 5,000.
Following was the position of Current Assets and Current Liabilities of the company in the beginning and at the end of the year :
Particulars                 1.4.2005               31.3.2006
                                      Rs.                        Rs.
Debtors                      30,000                  45,000
Stock                           1,00,000               78,000
Cash                           33,000                  47,000
Creditors                    57,000                  63,000
Outstanding Expenses 10,000             7,000
Bills Payable             9,000                     14,000
Calculate Cash Flow from Operating Activities.                     6
OR
With the help of the Balance Sheets and Profit and Loss Account of AB Ltd. calculateCash Flows from Operating Activities.6
Balance Sheets of AB Ltd. as on 31.3.2005 and 31.3.2006
Liabilities                     2005              2006                Assets                2005               2006
                                        Rs.                  Rs.                                               Rs.                  Rs.
Share Capital            2,20,000      2,93,000               Plant           3,20,000              3,30,000
Reserves                   60,000           96,000 Accumulated Depreciation (30,000) (38,000)
Loan                          1,00,000         80,000              Patents —                                  58,000
Proposed Dividend 20,000            25,000                 Stock            1,00,000            1,20,000
Creditors                   80,000            65,000                Debtors       70,000                67,000
Cash                         20,000              22,000
                                   4,80,000           5,59,000                                 4,80,000              5,59,000
Income Statement of AB Ltd. for the year ended 31.3.2006
                     Dr.                                                        Cr.
Particulars              Amount                 Particulars              Amount
                                    Rs.                                                           Rs.
Depreciation             8,000                      Sales                   3,90,000
 Salary                       55,000
Rent                          79,000
Commission           27,000
Other Expenses     1,60,000
Net Profit                 61,000
                                 3,90,000                                                  3,90,000
Proposed Dividend 25,000
Profit Retained        36,000                   Net Profit                 61,000
                                  61,000                                                     61,000

16. What is a Foreign Key ?          2

17. What is meant by hierarchy of accounts ?             2

18. With the help of a suitable example explain the concept of DCL.             3

19. What is normalisation ?              3

20. What is Hierarchical Coding ?                3

21. (a) Design a Bank voucher with the following information of M/s Vinay Ltd. :            3
       Date        V. No.      Code          Account                           Amount
                                                                                                      (Rs.)
31/01/07           2          601001       Equity Share Capital      2,00,000
31/01/07           2          611001       Premium on Issue         50,000
31/01/07           2          110001          Bank                              20,50,000

(b) M/s Vinay Ltd. employs 30 persons whose Salary comprises Basic Pay, Dearness Allowance, House Rent Allowance and City Compensatory Allowance. The following are the rules governing the payment :
Write the queries in SQL using the following data in MS-Access to compute the allowances :
House Rent Allowance : Rs. 1,500 up to a Basic Pay of Rs. 10,000; Rs. 3,500 up to Basic Pay of Rs. 20,000; Rs. 6,000 for Basic Pay above Rs. 20,000.
City Compensatory Allowance : @ 10% of Basic Pay subject to a minimum of Rs. 1,000. 3+1=4