R.E.D.

GROUP OF SCHOOLS
Exam : Mid term Test
Class : XII Commerce
Subject : Accountancy (055)
1. At the time of dissolution, total assets are of Rs 3,00,000 and external liabilities are of 1,20,000. If
assets realised 120% and realization expenses paid were Rs 4,000, then profit or loss on realization
will be: (1)
(a) Profit = Rs 60,000 (b) Loss = Rs 60,000
(c) Loss = Rs 56,000 (d) Profit = Rs 56,000
2. On dissolution of a firm, goodwill appearing in the Balance Sheet is transferred to: (1)
(a) Capital Accounts of partner (b) Cash Account
(c) Debit side of Realisation Account (d) Credit side of realisation account
3. At the time of retirement of a partner, profit on revaluation will be credited to the capital accounts
of: (1)
(a) Retiring partner
(b) All partners in the old profit-sharing ratio
(c) The remaining partners in their profit-sharing ratio
(d) The remaining partners in their new profit-sharing ratio
4. When Revaluation Account is prepared, then assets and liabilities appear in the books of
reconstituted firm at their: (1)
(a) Revealed figures (b) Market Values
(c) Old book values (d) Realizable value
5. If at the time of admission, there is some unrecorded liability, it will be debited to: (1)
(a) All partner's Capital Accounts (b) Old partner's Capital Accounts
(c) Revaluation Account (d) Profit and Loss Appropriation Account
6. Goodwill of a firm A and B is valued at Rs 50,000. Goodwill also appears in the books at Rs
20,000. C is admitted for 1/4th share. The amount of goodwill to be brought in by C will be (1)
(a) Rs 7,500 (b) Rs 12,500
(c) Rs 5,000 (d) Rs 17,500
7. Sacrifice Ratio: (1)
(a) Old Ratio - Gaining Ratio (b) New Ratio - Old Ratio
(c) Gaining Ratio - Old Ratio (d) Old Ratio - New Ratio
8. Super profit is: (1)
(a) The average profit earned by the firm
(b) The normal profit
(c) The difference between average profit and normal profit
(d) All of the above
9. According to "Super Profit Method" is goodwill is calculated by: (1)
(a) Number of Years' Purchase × Average Profit
(b) Number of Years' Purchase × Super Profit
(c) Super Profit ÷ Normal Profit
(d) Super Profit ÷ Normal Rate of Return
10. When a partner is given guarantee by other partners, loss on such guarantee is borne by (1)
(a) Partnership firm
(b) All the other partners
(c) Partners who gave the guarantee
(d) Partner will highest Profit-sharing ratio
11. A and B are partners with capitals of Rs 4,00,000 and Rs 3,00,000 respectively. If firm earned a
profit of Rs 35,000 for the year ended 31st March 2019, then interest on capital @ 10% p.a. would
be appropriated as: (1)
(a) Rs 40,000 and Rs 30,000 (b) Rs 17,500 and Rs 17,500
(c) Rs 20,000 and Rs 15,000 (d) None of these
12. Income and Expenditure Accounts start with (1)
(a) Debit Balance (b) Credit balance
 (c) Either (a) or (b) (d) No Balance
13. When the tournament expenses incurred are more than the Tournament Fund, then the excess
amount is (1)
(a) Debited to income and Expenditure Account
(b) Credited to Tournament Fund
(c) Shown on the asset side of Balance sheet
(d) Credited to income & Expenditure Account
14. Preference shareholders have (1)
(a) Preferential right as to dividend only
(b) Preferential right in the management
(c) Preferential right as to repayment of capital at the time of liquidation of the company
(d) Preferential right as to dividend and repayment of capital at the time of liquidation of the company
15. Which of the following statement is true? (1)
(a) Authorised Capital = Issued Capital
(b) Authorised Capital > Issued Capital
(c) Paid up Capital > Issued Capital
(d) None of the above
16. According to the company act, Minimum Subscription has been fixed at ______ of the issued
amount. (1)
(a) 25% (b) 50% (c) 90% (d) 100%
17. Which of the following statement is false? (1)
(a) At maturity, debentures holders get back their money.
(b) Debentures can be forfeited for non-payment of call money
(c) In company's balance sheet, debentures are shown under the head long term borrowings.
(d) Interest on debentures is a charge against profits
18. Which of the following statement is false? (1)
(a) A company can issue redeemable debentures
(b) A company can issue debentures with voting rights
(c) A company can issue convertible debentures.
(d) A company can buy its own debentures and share.
19. Interest on debentures issued as a collateral security is paid on: (1)
(a) Nominal value of debentures (b) No interest is paid
(c) Face value of debentures (d) Paid up value of debentures
20. Debentures of a company can be issued: (1)
(a) For cash (b) For consideration other than cash
(c) As a collateral Security (d) Any of the above
21. A, B and C were partners in a firm. On 1-4-2017 their capitals stood at Rs 4,00,000, Rs 2,00,000
and Rs 2,00,000 respectively. As per the provisions of the partnership deed :
(a) A was entitled for a salary of Rs 5,000 p.m.
(b) Partners were entitled to interest on capital at 5% p.a.
(c) Profits were to be shared in the ratios of capitals.
The net profit for the year ended 31-3-2018 of Rs 3,00,000 was divided equally without providing
for the above terms.
Pass an adjustment entry to rectify the above error. (3)
22. Durga Ltd. had issued Rs 5,00,000, 7% Debentures of Rs 100 each redeemable at a premium of
6% on 31st March, 2017. Assume that required investment was made in 10% Government
Securities on April 30 of the financial year in which redemption is due. Debentures were redeemed
on the due date.
Pass journal entries for Redemption of Debentures. (3)
23. A, B and C are sharing profits in the ratio of 3 : 2 : 1. B dies on 1st September, 2016 and on the
day of B's death Goodwill is valued at Rs 60,000. A and C decided to share future profits in the
ratio of 3 : 2.
In order to arrange funds to make payment to B's Executors, the firm took a loan from PNB
@18% p.a. and full payment was made to B's executors.
You are required to pass Journal Entry for the treatment of goodwill. (3)
24. From the following information calculate the amount of subscriptions to be credited to the Income
& Expenditure Account for the year 2017-18:
31 st March, 31 st March,
2017 (Rs) 2018 (Rs)
Subscriptions Received in Advance on 20,000 15,000
Subscriptions Outstanding on 38,000 50,000
Subscriptions received during the year were Rs 8,20,000 and subscriptions amounting to Rs 10,000
are still in arrears for the year 2016-17. (3)
25. Anu and Bhagwan were partners in a firm sharing profits in the ratio of 3 : 1. Goodwill appeared
in the books at Rs 4,40,000. Raja was admitted to the Partnership. The new profit-sharing ratio
among Anu, Bhagwan and Raja was 2:2:1.
Raja brought Rs 1,00,000 for his capital and necessary cash for his goodwill premium. The
goodwill of the firm was valued at Rs2,50,000.
Record necessary Journal entries in the books of the firm for the above transactions. (4)
26. Shivpriya Ltd. was formed with a nominal Share Capital of Rs 50,00,000 divided into 50,000
shares of Rs 100 each. The Company offers 30,000 shares to the public payable Rs 30 per share on
Application, Rs 30 per share on Allotment and the balance on First and Final Call. Applications
were received for 28,000 shares. All money payable on allotment was duly received, except on 500
shares held by X. First and Final Call was not made by the Company.
How would you show the 'Share Capital' in the Balance Sheet of Shivpriya Ltd.? Also prepare
notes to accounts for the same. (4)
27. Youth Welfare Club has 500 members each paying an annual subscription of Rs 1,000. The
Receipts & Payments Account for the year showed a sum of Rs 5,10,000 received as subscriptions
during the year 2017-18. The following additional information is provided :
Particulars Rs
Subscriptions Outstanding on 31st March, 2017 44000
Subscriptions Received in advance on 31st March, 25000
2018 Subscriptions Received in advance on 31st 30000
March, 2017
Prepare Income & Expenditure A/c & Balance sheet. (6)
28. A and B are partners in a firm sharing profits and losses in the ratio of 5 : 3. Their Balance Sheet
as at 31st March 2016 stood as follows :

Liabilities Rs Assets Rs
Sundry creditor 320000 Fixed Assets 1000000
General Reserve 40000 Stock 310000
Employee Provident Fund 50000 Debtors 160000
Workmen Compensation Reserve 90000 Cash 30000
Capital:
A
600000
B 1000000
400000
1500000 1500000

From 1st April 2016, the partners decided to change their profit sharing ratio to 3 : 5 and agreed
that:
(i) Fixed Assets should be appreciated by 10%.
(ii) Stock be valued at Rs 2,70,000 and Debtors at Rs 1,50,000.
(iii) Claim on account of Workmen Compensation is Rs 50,000.
(iv) An amount of Rs 10,000 included in Creditors is not likely to be claimed.
(v) The goodwill of the firm should be valued at Rs 1,20,000.
You are required to prepare Revaluation Account, Capital Accounts and the Balance Sheet of the
new firm. (6)
 OR
A, B, and C are partners sharing profits in the ration of . B retires and A and C decide to share
profits in the ratio 1:2. It was decided to adjust B's share of goodwill in the accounts of continuing
partners. Fill in the missing figures in the following journal Entry. Also find out the total goodwill
of the firm. (6)

Date Particulars L.F. Dr.(Rs) Cr.(Rs)

C's Capital Dr. -----
To A's Capital -----
To B's Capital 150000

(C compensates A and B for the

loss in share of profits)

29. From the following Receipts and Payments Account and additional information of Ashoka Club
for the year ended 31-3-2017 prepare :
(i) Income and Expenditure Account of the Club for the year ended 31 -3-2017 and
(ii) Prepare the Balance Sheet as at 31-3-2017.
Receipts Rs Payments Rs
Balance b/d 35,300 Salary 25,000
Subscriptions : Newspapers
5,000
2015-2016 7,500 Electricity bill 12,000
2016-2017 80,000 Fixed deposit (on 1-1-2017
@ 10% p.a.) 60,000
2017-2018 4,000 91,500
Entrance Fees 30,000 Rent 15,000
Sale of old Furniture
furniture (Book 40,000
value Rs 15,000) Balance c/d 3,000
3,200
1,60,000 1,60,000

Additional Information :
(i) Subscriptions outstanding as on 31-3-2016 were Rs 10,000 and on 31-3-2017 Rs 16,000.
(ii) On 31-3-2016 salary outstanding was Rs 4,000 and on 31-3-2017 salary outstanding was Rs
6,000.
(iii) The Club owned furniture Rs 50,000 on 1-4-2016. (6)
30. A, B and C are partners in a firm. Their Capital Accounts stood at Rs 8,00,000; Rs 6,00,000 and
Rs 4,00,000 respectively on 1st April, 2016. They shared profits and losses in the ratio of 3 : 2 : 1
respectively. Partners are entitled to interest on capital @6% per annum and salary to B and C
@Rs 4,000 per month and Rs 6,000 per quarter respectively as per the provisions of Partnership
Deed.
B's share of profit including interest on capital but excluding salary is guaranteed at a minimum of
Rs 82,000 p.a. Any deficiency arising on that account shall be met by C. Profit for the year ended
31st March, 2017 amounted to Rs 3,12,000. Prepare Profit and Loss Appropriation Account for
the year ended 31 st March, 2017. (6)
OR
Charu, Divya and Esha were partners in a firm. Pass journal entries for the following transactions
on dissolution of the firm after various assets and external liabilities have been transferred to
Realisation A/c :
(i) An unrecorded asset of Rs40,000 was given to an unrecorded creditor of Rs 60,000 in
settlement of his claim of Rs 45,000 and the balance was paid to him in cash.
 (ii) A Motorbike which was not recorded in the books was taken over by Charu at Rs 10,000,
whereas its expected value was Rs 15,000.
(iii) Creditors, to whom the firm owed Rs 50,000, accepted stock of Rs 30,000 at a discount of 20%
and the balance in cash.
(iv) X, an old customer, whose account for Rs 20,000 was written off as bad in the previous year,
paid 40% of the amount written off.
(v) Esha paid the realisation expenses of Rs 20,000 out of her pocket and she was to get a fixed
remuneration of Rs 25,000 for completing the dissolution process.
(vi) Divya's loan of Rs 40,000 was discharged at Rs 42,000. (6)
31. Pioneer Ltd. invited applications for 11,000 shares of Rs 100 each to be issued at a premium of
10% payable as follows :
On Application Rs 25
On Allotment Rs 40
On First & Final Call Rs 35
Applications were received for 10,000 shares and all of these were accepted. All the money due was
received except the first and final call on 100 shares which were forfeited. 60 of these forfeited
shares were reissued @ Rs 90 per share credited as fully paid.
You are required to :
(a) Pass the necessary Journal Entries.
(b) Show the Share Capital in the Balance Sheet of the company. (8)
OR
X Ltd. issued shares of Rs 50 each at a premium of 12 per share. Amount was payable as follows :
(8)
On Application Rs 10 (including premium Rs 3)
On Allotment Rs 15 (including premium Rs 4)
On First Call Rs 20 (including premium Rs 5)
On Final Call Rs 17
(i) Anil, who held 500 shares did not pay allotment and first call and his shares were forfeited.
(ii) Bimal, who held 800 shares did not pay first call and his shares were forfeited.
(iii) Chander, who held 1,000 shares failed to pay final call and his shares were forfeited. 50%
shares of Anil and Bimal were reissued at 10% discount. Give journal entries for forfeiture and
reissue of shares.
32. A and B share the profits of a business in the ratio of 2 : 1. They admit C into the firm for a l/5th
share in the profits which he acquires from A and B in the ratio of 3 : 2. On the date of admission
of C, the Balance Sheet of the firm was as follows : (8)

Liabilities Rs Assets Rs
Creditors 3,00,000 Machinery 6,20,000
A's Capital 7,00,000 Land and Building 5,00,000
B’s Capital 5,00,000 Stock 2,00,000
Debtors 1,60,000
Bank 20,000
15,00,000 15,00,000

From the information given below, complete Revaluation Account, Partners' Capital Accounts
and the new Balance Sheet of A, B and C.

REVALUATION ACCOUNT

Particulars Rs Particulars Rs
To Stock A/c • By Land &
Building A/c
--------
To Profit transferred to Capital
A/cs: A —
 B—
2,00,000

CAPITAL ACCOUNTS

Particulars A B C Particulars A B C

Rs Rs Rs Rs Rs Rs
To Bal. c/d ------ ------ — By ------ ------ —
By Revaluation 1,00,000 — —
A/c
By Bank Ac
By Premium for
Goodwill A/c 60,000

...
— — — 3,00,000

BALANCE SHEET (After Admission)

Liabilities Rs Assets Rs
Creditors — Bank —
Capitals: Debtors —'
A— Stock —
B __ Land and —
Building
C— — Machinery —

— —

OR
A, B and C are partners sharing profits and losses in 3 : 2 : 1. Their Balance Sheet as at 31st
March, 2016 was follows:

B retires on 1st April, 2016 and A and C agree to share future profits in the ratio of 5 : 4. On this
date :
(i) Goodwill of the firm was valued at Rs 1,80,000.
(ii) Land & Building was found undervalued by 10% and Stock is found overvalued by 20%.
(iii)Machinery is to be decreased to Rs 50,000.
(iv) 25% of the General Reserve was to be kept as provision for doubtful debts.
(v) Motorbike valued Rs 20,000 was unrecorded in the books of the firm.
It was decided to pay off B giving him Motorbike and the balance in annual installments of Rs
1,50,000 along with interest @10% p.a.
You are required to prepare B's Capital Account and his Loan Account till it is finally closed.