PRACTICE PAPER

183

PRACTICE PAPER7
ACCOUNTANCY
Class XII
Time Allowed: 3 hours
Maximum Marks: 80
Instructions : Same as given in Sample Paper 1.

Part A
Accounting for Partnership Firms and Companies
0.1. Discount on iSsue of Debentures is in the
nature of
(A) Revenue loss
(C) Deferred Revenue (B) Capital loss
Expenditure (D) None of the above 1

OR
Premium received on issue of debentures may be utilised for
(A) For writing off discount allowed on issue of shares.
(B) For writing off premium allowed on redemption of debentures.
(C) For writing off preliminary expenses.
(D) All of the above.
0.2. Which of the following is not an appropriation of profits?
(A) Interest on Partner's Capital (B) Interest on Partner's Loan
(C) Salary to Partner (D) Commission to Partner 1

Q.3. Prince and Naveen were partners sharing profit and losses equally. Net profit earned by the
firm during the year was 13,91,000. Prince and Naveen were allowed a salary of <20,000
p.m. and 25,000 per quarter respectively. Interest on drawings charged for the year was
79,000 from Prince and 76,000 from Naveen. Prince is to get commission of 7% on Net
Drofit after charging such commission. What will be amount of divisible profit transferred
to Partner's Capital Accounts?
(A) 12,70,000 (B) 9,75,000
(C) ? 9,68,630 (D) None of the above 1
OR
Jovand Deb were partners sharing protits losses in the ratio of 2: [Link] admitted Goni
intonartnership for 1/5 share. At the tme of Gop1's admission, Furniture (book value
) 50.000) was reduced by <4070 and aeninery (D00K value 1,50,000)was reducedto
40%.
decrease in value of assets? (ISC Sample Paper 2023)
What was the net
Q. 4. X, Yand Zare partners in[Link]. Xis guaranteed that his share of profit will not be less
than 1,00,000. Any deficiency will be borne by Yand Zin 1:4. Firm's profit was
How much deficiency willbe borne hy 72
74.50,000.
184

(A) 5,000 (B) 20,000

PRACTICE PAPER 7
(C) 12,500 (D) 25,000

Q. 5. Aand Bare partners in a firm having capital balances of 90,000 and

respectively. General Reserve appeared in their books at 50,000 and 60,000
suspense at 20,000. They admit Cfor rd share and|Cis
( to bring adver
proportionate
tisement
of capital. The capital amount of C will be :
amount
(A) R60,000 (B) ? 75,000
(C) F90,000 (D) 1,00,000

Q.6. New ratio is not to be calculated on:

(A) Admission of a partner (B) Retirement of a partner
(C) Death of a partner (D) Dissolution of partnership Firm
0.7. [Link] Rare sharing profits in the ratio of [Link]. R dies on 30th June,
2025. Accounts
are closed on 31st March every year. Sales for the year ending
31st March, 2025 amounted
to50,00,000. Sales from Ist April 2025to 30th June 2025
amounted to 15,00,000. The
profit for the year ending 3Ist March, 2025 amounted to 76,00,000.
Deceased partner's share in current year'sprofits will be :
(A) 1,80,000 (B) 745,000
(C) 10,000 (D) 40,000 1
OR
When a partnership fim dissolves, its losses including deficiencies of capital are to be
first out of :
paid
() The profits of the firm.
(ii) The capitals of the partners.
(ii) From the partners individually in their profit-sharing ratio.
(iv) From the proceeds from sale of assets. (1SC Sample Paper 2023)
Q. 8. In case of dissolution, assets are transferred to Realisation Account :
(A) At Cost
(B) At Market Value
(C) Cost or Market Value, whichever is lower
(D) At Book Value 1
Read the following hypothetical situation and answer Question No. 9 and 10.
Charu and Lata are partners sharing profits in 2:1 with capitals of 6,00,000 and
4,00,000 respectively. Accounts are closed on 3lst March every year. Charu granted a
loan of I.00,000 to the firm on lst November 2022. Following terms are agreed between
them :
(i) Both partners are allowed interest on their capitals (@ 8% p.a.
PRACTICE PAPER-7 185

(i) Manager is allowed a commission of 10% on profits before charging such

commission. For the year ending 3lst March 2023, Manager's commission amounts
to 5,000.
Q.9. Which one of the following is correct :
(A) Interest on Charu's Loan2,500; It is an Appropriation of profit.
(B) Interest on Charu's Loan 2,500; It is a charge against profit.
(C) Interest on Charu's Loan 2,500; It will be credited to her Capital Account.
1
(D) Interest on Charu's Loan 3,000; It will be credited to her Loan Account.
0. 10. Interest on capital allowed to Lata will be:
(A) 32,000 (B) 27,000
1
(C) 18,000 (D) 45,000
2: 1. They
0. 11. Manisha and Divya were in partnership sharing profits and losses in the ratio of goodwill
admitted Tilak as a new partner. Tilak brought 2,40,000 as his share of
:2.
premium, which was credited to Manisha and Divya capital accounts in the ratio of 3
profit
On the date of admission, goodwill of the firm was valued at 9,60,000. New
sharing ratio will be :
(A) [Link] (B) [Link]
1
(C) 34: 11:15 (D) 31: 14:15
premium (9 called up) on
0. 12. Mohan Ltd. forfeited 800 shares of 10 each issued at 10%
has not been received. Out
which 3 of allotment (including premium)and first call of 2
for 79 per share. What is the amount
of these, 500shares were re-issued as fully paid up
to be transferred to capital Reserve?
(A) 1,500 (B) 2,000
1
(C) 2,500 (D) 3,000
death is recorded in :
Q. 13. The deceased partner's share of profit upto his
(B) Profit and Loss Appropriation A/c
(A) Profit and Loss Adjustment A/c (D) Profit and Loss A/c 1
(C) Profit and Loss Suspense Alc
OR
goodwill.
Give any one important feature of purchased
of 14,000 shares on pro-rata basis. The
Q. 14. E Ltd. had allotted 10,000shares to the applicants
for 420 shares. The number of shares
amount payable on application was ?2. F applied money due from
allotted and the amount carried forward for adjustment against allotment
Fwill be: (B) 340 shares; 160
(A) 60 shares; 120
(C) 320 shares: 200
(D) 300 shares; 240 1

?10 each at 9 per share to its

Q. 15. Surya Ltd. issued 5,00,000 shares of face value
called:
employees. The shares issued are
(A) Preferential Allotment of Shares
(B) Sweat Equity Shares
(D) ESOP 1
(C) Private Placement of Shares
186 PRACTICE PAPER 7

0. 16. Aishwarya Ltd. forfeited 5,000 shares of ?10 each fully called up for non-payment of final.
call of 3 per share. 3,000 of these shares were reissued at 8per share, fully paid un
What is the net balance in Share Forfeiture Account?
(A) ?15,000 (B) 14,000
(C) ¿29,000 (D) 10,000
OR
Assertion(A):
Reserve Capital and Capital Reserve are the same.
Reason (R) :
Reserve Capital is a part of Subscribed Capital which the Company may decide to call at
the time of winding up of the Company.
In the context of the above two statements, which of the following is correct?
Codes:
(A) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
(B) Both (A)and (R) are true and (R) is the correct explanation of (A).
(C) Both (A)and (R) are false.
(D) (A) is false, but (R) is true.

Q.17. 4, Band Cwere partners in afirm sharing profits in the ratio of [Link]. They decided that
with effect from lst Apil 2025, they will share profits in the ratio of [Link]. For this
purpose the goodwill of the firm is valued at the total of preceding three year's profits. The
profits for the years ending 3Ist March each year were :
2021 40,000
2022 10,000 (Loss)
2023 80,000 (Loss)
2024 1,20,000
2025 1,40,000
Reserves and Profits appeared in the balance sheet at 40,000 and 30,000 respectively.
Partners neither want to show goodwill in the books nor want to distribute the reserves and
profits appearing in the balance sheet. Pass a single journal entry to record the change.
3

Q. 18. P, Rand Sare in partnership sharing profits in the ratio of 2: 1:1respectively.

Rdied on lst February, 2025 and it is decided that profit sharing ratio between Pand Sin
future willbe 2 :3. You are required to fillin the missing figures in the following journal
entry.
Also calculate the Total Value of firm's goodwill.
CRACTICEPAPER-7
187

JOURNAL
Date Particulars LE Dr ( Cr.)
2025
Feb.1S's Capital A/e Dr. 2,80,000
To P'sCapital A/c
To R'sCaptal Alc
(S Compensates P and Rfor the loss in share of profits)
3

OR
Aand Bcontribute 4,00,000 and R3,00,000 respectively as their capitals. They decide to
allow interest on capital @8% p.a. Their respective share of profit is 3:2 and the profit
for the year is 742,000before allowing for interest on capitals. Show the distribution of
profits (1) Where there is no agreement except for interest on capitals, and (1) Where
there is a clear agreement that the interest on capitals will be allowed even if it involves the
firm in loss.
0. 19. Khalifa Ltd. issued on lst April, 2021. 20,000, 7% Debentures of 100 each at 3%
discount redeemable after five years at a premium of 5. All the debentures were
subscribed. During the year ended 31st March, 2022, the company incurred a loss of
1,80,000.
Issue ofDebentures
Pass the Journal entries for issue of debentures and writing off Loss on 3
and prepare 'Loss on Issue of Debentures A/c',
OR
9,00,000 and took over liabilities of
Platinum Ltd. purchased assets of the book value of
purchase consideration settled at
71,60,000 from Emerald Ltd. It was agreed that the
premium of 10%. It was further
78,00,000 be paid by issuing debentures of ? 100 each at a
[Link] journalentries in the books
agreed that any fraction of the debentures be paid in
of purchasing company. of
in a firm sharing profits and losses in the ratio
0. 20. Vrinda. Tulsi and Tara were partners Tara died on 31st January
3· 45. Their books were closed on 3Ist March every year. to
deed Tara's executors are entitled her share of profit up to
2022. As per the partnership for the year ended March 31
the date of deathon the basISof sales till date of death. Sales
sales. Sales shows aorouth
021 was Z6.00,000and profit for the same year was 12% on
earning is reduced by 2%
trend of 20% and percentage of profit
workings clearly
Pass necessary Journal Entry and show the 3
and Somesh are partners in afirm sharing profits and losses equally.
Q. 21. Ritesh
They admit Satvik on lst April, 2021 for 1/5 share in the profits of the firm, future
profit-sharing ratio between Ritesh and Somesh would be 3:2.
At the time of reconstitution of a partnership firm, goodwill was valued at two years'
purchase ofthe average profits of the preceding four years which were as follows :
 188

Year Profit/Loss
PRACTICE PAPER
2017-18Profit 70,000|(after debiting loss of stock by fire T15,000)
2018-19 Profit 50,000 (including insurance claim of 75,000)
2019-20 Loss 40,000 (after debiting voluntary retirement compensation paid
2020-21 Profit 20,000)
60,000 (excludinginsurance premium of F10,000 on insurance of:
assets)
(a) The average profits of thefirm from the year 2017-18to the year 2020-21
(i)) E30,000 (ii) R60,000 were:
(ii)37,500 (iv) 40,000
(b) The value of goodwill of the firm on Satvik's admission was :
(i) ¿60,000 (i) 80,000
(ii) 75,000 (iv) 1,20,000
(c) Satvik is unable tobring in cash his share of goodwill. The account to be debited te
record his goodwill compensation willbe :
() Satvik'sCapital A/c (i) Satvik's Current A/c
(iii) Premium for Goodwill A/c (iv) Old Partners' Capital A/c
(d) New profit sharing ratio of the partners willbe :
() [Link]I (ii) [Link]
(ii) [Link] (iv) [Link] 4
(ISC Sample Paper 2022)
Q. 22. Kaveri Ltd. issued 5,000; 10% Debentures of 100 each at a discount of 5%, redeemable
at par after five years. The amount is payable as :
On Application 730
On Allotment 25
On First and Final Call 740
The public applied for 6,000 debentures. Applications for 4,000 debentures were allotted
in full, applications for l,500 debentures were allotted 1,000 debentures and the remaining
applications were rejected. AIl moneys were duly received. Pass the necessary Journal
4
Entries and also show the relevant items in the Balance Sheet of the Company.
Q.23. Ansul Limited issued for public subscription 40,000 equity shares of R10 each at a
premium of 2 per share payable as under :
On Application <2 per share
On Allotment 5 per share
On First Call 2 per share
On Second and Final Call 3 per share the
to
Applications were received for 70,000 shares. Allotment was made pro rata
Money overpaid on
applicants for 50,000shares, the remaining applicationss being refused. whomn 1,500 shares
application was applied towards the sum due on allotment. "4", to
were allotted, failedIto pay the allotment and call money. B", to whom 2.000shares were
after
allotted, failedItto pay the two calls. The shares ofA and Bwere subsequently forfèited
PRACTICEPAPER- 7
189

the second call was made. 3,000 of forfeited shares were reissued at 8 per share fully
paid.
The reissued shares includedall ofA'sshares.
Pass Journal entries in the books of the company to record the above transactions. 6

OR
() Fill in the blanks in the following cases :
RVG Ltd.
JOURNAL

Date Particulars LF Dr. 3) Cr. ()

Dr.
To
(Application and allotment money received on 5,000, 12%
Debentures of 100 each issued at a premium of 10% and
redeemable at a premium of 5%)
Dr.
Dr.
To
To.....ee+*...........
To

(b) Complete the following Journal Entries :

Particulars L.F. Dr. () Cr. (3)
Date
2022 15,00,000
Dr.
April 1 Sundry Assets A/c
Dr.
7,80,000
To Sundry Liabilities Ae
8,20,000
To Shambhu Ltd.
consideration of
(Shambhu Ltd. taken over for a purchase
78,20,000)
Dr. 8,20,000
Shambhu Ltd.
Dr.
20,000
To
To 8% Debentures A/c
(Paying Shambhu Ltd. by issuing a bill of 20,000 and the
of?100each at a
balance by issue of 8% Debentures
discount of 20%)
(3+3)
Q24, Following is the balance sheet of P, and R on the date of dissolution:
Assets
Liabilities
Loan from Anurag 40,000| Plant & Machinery 40,000
190

75,000|Tools
PRACTICE PAPER
O's Loan
30,000 Stock
Workmen Compensation Reserve 5,000
Trade Creditors 1,00,000| Trade Debtors
3,00,000
Provision for Doubtful Debts
Capital Accounts:
5,000 Goodwill
Prepaid Insurance
1,550,0,000000
2,00,000 Cash in Hand
2,000
1,00,000 Bank 3,000
R 20,000 3,20,000 20,000
5,70,000

The following information is given to you :

5,70,000
(i) Trade Debtors were realised at 80%, Stock at 60% and Tools at
4.000
(ii) Oaccepted an unrecorded investment of 20,000 at
loan.
F25,000 in part settlement of his
(7) Anurag's loan was settled for 38,000.
(iv) Halfof thetrade creditors accepted Plant and
and cash of 10,000 in full settlement of theirMachinery
at 20% less than book value
claims.
Remaining trade creditors were settled at a discount of 10%.
(v) Dinesh, an old customer, whose account was
paid 10,000 which is not included in the abovewritten
off as bad in the previous year.
stated debtors.
(vi) Realisation expenses paid by the firm amounted to ?
15,000. Mr. P has to bear these
expenses.
Prepare Realisation Alc.
6
OR
A and Bare partners in a firm sharing
profits and losses in the ratio of 3:2. On 31st March.
2022, their Balance Sheet was as under :
Liabilities Assets
Creditors 1,20,000 Bank 30,000
Outstanding Expenses 30,000| Investments
General Reserve 1,50,000
1,50,000 Debtors 1,25,000
Capitals A/cs: Stock
A 1,50,000
6,00,000 Premises
8,00,000
4,00,000 10,00,000 Advertisement Suspense 45,000
13,00,000 13,00,000
On the above date C is admitted as apartner for 3/7th share which he takes
2/7th from 4
and 1/7th from B. He brings2,00,000 as premium out of his share of 2,40,000, C
brings
{6,00,000as his capital. Followingterms are agreedupon:
(i) Premises be depreciated by 10%.
(ii) Accrued income 15,000 is to be taken into account.
(iii) Investments are to be increased by 2,00,000 and stock is to be increased to
2,00,000.
PRACTICE
PAPER 7 191

(i) A,liability off10,000 included in creditors is not likely to arise.

unrecorded asset worth 50,000.
(v) There is an
Prepare Revaluation Alc and partner's Capital A/cs. Also calculate the new profit sharing
ratios.

3:1.
25. Ajayand Vijay are in partnership sharing profits and losses in the ratio of
0. 2021, their capitals were I,00,000 and 90,000.
OnIst April,
The terms their
of partnership are as follows:
(a Interest on capitalto be allowed at (@ 6% per annum.
Gi) Interest on drawings to be charged (a@ 4% per annum.
(ii) Partners to get a salary of R1,000 each per month.
(iv) Vijay to get a commission of 2% on the correct net profit.
8% per annum.
(v) Any partner taking a loan from the firm to be charged interest on it (@
Aiay had borrowed ?10,000 from the firm on lst October, 2021.
Vijay had withdrawn 8,000 on lst July, 2021.
profit of 760,000 before
During the year ending 3Ist March, 2022, the firm earned a net
any of the provisions mentioned in the partnership deed.
March, 2022:
You are required to prepare for the year ended 31st
() Profit and Loss Appropriation Account. 6
(ii) Ajay's Capital Account. (1SC Sample Paper, 2023)

Surya Ltd. was formed with an authorised capital of 27,50,000 divided into shares of20
0. 26.
subscription at a premium of 10 per
each. It offered 1,10,000 shares to the public for
shares and allotment was made to all
share. Applications were received for 1,01,750
applicants. Amounts were payable as follows :
76
On Application
On Allotment 715 (including premium)
On Ist Call
On IInd & Final Call Balance
by Palak, for non-payment of
It forfeited 8.250shares of 20 each (16 called up) held
reissued to Paras as 16 called
allotment and the first call. Out of these, 5,500 shares were
made by the Company.
up for 14per share. Second and final call was not
will be
(a) Amount transferred to capital reserve (ii) 49,500
() 38,500
(iv) 22,000
(iiil) NIL
be:
(b) Balance of Share Forfeiture Account will
(ii) Z49,500
(i) 38,500
(iii) Z16,500 (iv) 27,500
PRACTICE
PAPER-) own assets &
Loss
redemption
lPreference 6 1
its 78,00,000.
of current
back Profit
Redeemable :be
its
buyratio. Z6,00,000, will 5,00,000;
Statement
of
Assets
whether
this company
(B)
Current
Investments
of (B) (D)
External
Analysis
Vertical
Analysis change Current
20,35,000
(iv) 16,00,500
(i) ?19,96,500
(iv) is above
Statements reason, a
shareholdersCompany not
capital (B) 3,60,000
(D)
2,40,000of Equivalents?
the
NIL
(i) givingwill ratio 6,00,000,
:
be the working (B)(D)
S0% 75% of
All
will the or proprietary
be for on Financial state OR Debentures
will Capital of
utilized to payable expenses B
Part decrease
Ifits Liabilities Cash (D)
shares under: :
dynamic
Capital 1,
0.4: as
premium Capital increase, 2.5:1. the considered
Paid be sharesbonus Liabilities of data,10,00,000;
Current
Paid cannot shown
preliminary as is
Fully own paid Assets Surplus Analysis
Subscribed considered company is following months
Fully the will Company
not its
Premium are 1,00,000; is
partly
for Current
Current (A)
Horizontal
Analysis following 3
and1S,84,000
(i) 16,00,500
( ) 15,84,000
but (i) 19,80,000
(ii) of Providing off Advance and (C) a company
Internal
Analysis Equity
Share
Capital for
Buy-back to of the deposits
Subscribed Subscribed SecuritiesIssuing SharesWriting AddedOtherOther Reserve is
analysis
Ratio a
of 10,00,000
4,00,000 of
Bills
(A)
Treasury
in the Ratio Balance the
Proprietary basis
() (ii) (iin) (iv) Calls
(i) (ii) (ii) (iv) by 70%
(A) 45%
(C) of (C)
Bank
Which Current
:will
be the Which
shares
(c) (d) (e) () (A)(C) On Debit
27. 28. 29. 30.
Q. Q. 0. 0.
192
 193 shares.
other Balance
Schedule 3 Absolute
|Percentage Decrease) CIAx100
Increase -C
B-A
Chánge
Activities OP % 20 10 50 18,00,000|
(2,00,000)
O
company's
activity? the in
preparing
contained 5,00,000| 3,00,000
9,00,00050,000 8,00,000
Investing |-(Increase
31.3.202231.3.2023
Change Decrease)
34
kind
of LTD. Or
whileas SHAKSHI 50,00,000
in which Flow 2013.
fromCash
investment shown, :Ltd. B
Flow Act, 2023
under Shakshi 20,00,000|
8,00,000|
OF
Cash be Companies & |
No items SHEET
its classified
on 2022 2
(B) (D) of March
50,000 following SheetBALANCE Note
OR No.
be Flow Financing
Activities
Flow
Operating
Activities of
will provisions Debentures Balance 3lst
of it the Hand at
COMPARATIVE
dividend as LIABILITIES:
Finance
Company, will Comparative Borrowings
Short-Term
per on Taxation Surplus
and
Reserve
heads of Drafts Liabilities:
Non-Current
2.
Particulars TOTAL
areceives
company
A fromfrom ascompany, () IsSueStock-in-trade
Debentures
10% (iüi) Carts :
Funds
Capital
Share
Borrowings
term
Long Payables
Trade
(b)
:Liabilities 1.
Non-Current
Assets
the and
on and for the ANDShareholder's [Link]
Assets:
Inventory
PAPER-
7PRACTICE, which.
ofUnder
031. Discount Cheques Provision
Horses isFollowing II.
ASSETS:
aof Cash(A)iCash(C) a
EQUITY Current
case of (b) (a) (a)
SheetII? (i) (iv) (v) (vi) a)
I 1. 3.
In
o2
 Gross
\0%,
Cosing ate
(i 1,05,00
4,00030,0015,000 (C.B.S.E.
2020,
Punjab)
S,00018,00 Note
313.2025
3I32024 91.00 66,00070,0026,00 9,28,00
8,00,000
6,75,000 11,92,000| 00.000 2,4,50,000,0 000 20,000
5,3,75,000
PRACTICE
PAPER
-1 3 Calculate2,50,0
Kamal
Ltd., Eo
Inventory
40,000. Cash
figures
Sheet.
prepare 1,70,00088,000
1,00,000
34,000 000 11.92,000
10,000
in
Balance Salesover
Inventory 25,0t
Ratio: to
the on
Comparative required
LossOpening
TurnoverofInventoryof No.
3
books
40,00,000| are Assets
Inventory the you
25,000; Intangible
from Ltd., TOTAL TOTAL
calculate OR obtainedRatio. X and Equipment
missing ReturnClosing of
Equipment
Profit Sheets Particulars
Equivalents information,
information LIABILITIES: Equivalents
the Sales Net Balance Surplus
Short-term
(a)
BorrowingsProVisions and Assets
up
toYou Excess (ii) Funds
Shareholder's
1, Liabilities:
Current
2. : and Plant (b)
Trade
Receivables
6.25,000: Revenue
from
Operations Payables
(b)
Trade
Assets
Plant
TOTALfill and Share
(a)
Capital :Assets Current
Cash Decrease
in
Inventory and (a) Cash
Property,
Inventories
following70,000; following
Ratio following AND Reserve
term Non-Current
Property,
and required Inwards
Carriage Outwards
Return &
Current CashOther
Short II.
ASSETS:
Cash EQUITY ()
Sales Profit (a)
(c) (d)
the the Statement. (b) (c)
are the Purchases
Salaries Wages From 2.
(b) FromTotal FromGross 1.
I
33. 34.
194 Q. 0.
195 31-3-202566,000 26,000 2,00,000
531-3-2024 3,00,000
5,00,000 6
88,000 34,000 1,50,0003,75,000
2,25,000
78,000.
of
loss
a book.
60,000. atyear the
the of
end
during
year 30,000.
the
Equipment the sold at
during Paper
:Borrowings of was
Provisionand profit Practice
paid R20,000
Bank Tax
Overdraft for
Provision
Plant :Information
Additional
a
Dividend
at each
term Property,
Short-term sold costing
LandPlant of
Short was answers
Interim
7PAPER
pRACTICE (1) (3) LandPlant
(2)
:Notes See
) ) )
Note: