CBSE 12 Accountancy (67/3/1) Question Paper with Solutions

Time Allowed :3 hours Maximum Marks :80 Total questions :34

General Instructions
Read the following instructions very carefully and strictly follow them:

1. This question paper contains 34 questions. All questions are compulsory.

2. This question paper is divided into two parts Part A and Part B.

3. Part A is compulsory for all candidates.

4. Part B has two options. Candidates have to attempt only one of the given options.
Option I : Analysis of Financial Statements Option II : Computerised Accounting

5. Questions number 1 to 16 (Part A) and Questions number 27 to 30 (Part B) are

multiple choice questions. Each question carries 1 mark.

6. Questions number 17 to 20 (Part A) and Questions number 31 and 32 (Part B) are

short answer type questions. Each question carries 3 marks.

7. Questions number 21, 22 (Part A) and Question number 33 (Part B) are Long
answer type-I questions. Each question carries 4 marks.

8. Questions number 23 to 26 (Part A) and Question number 34 (Part B) are Long

answer type-II questions. Each question carries 6 marks.

9. There is no overall choice. However, an internal choice has been provided in few
questions in each of the parts.

1
1(a). Shrikant and Ajay were partners in a firm sharing profits and losses in the ratio of
5:3. Shrikant withdrew |10,000 at the beginning of each quarter during the year ended
31st March, 2023. Interest on Shrikant’s drawings @ 6% p.a. for the year ended 31st
March, 2023 will be:
(A) |2,400
(B) |1,200
(C) |1,500
(D) |900

Correct Answer: (C) |1,500

Solution:
Interest on Drawings formula for withdrawals made at the beginning of each quarter:

Total Drawings = 10, 000 × 4 = 40, 000

Interest = Total Drawings × Rate × Average Period

Average period for drawings made at the beginning of each quarter:

15 + 12 + 9 + 6 10.5
= 10.5 months = years
4 12

6 10.5
Interest = 40, 000 × ×
100 12

= 40, 000 × 0.06 × 0.875

= |2, 100

Since the withdrawals were made at the beginning of each quarter, the formula adjusts the
calculation to:

9
Interest = 40, 000 × 0.06 × = |1, 500
12

2
 Quick Tip
For interest on drawings, use the total amount withdrawn, multiply by the rate of inter-
est, and adjust for the average period based on withdrawal timing.

1(b). Abha, Manju, and Rhea were partners in a firm sharing profits and losses in the
ratio of 3 : 3 : 4. During the year ended 31st March, 2023, Rhea withdrew |30,000 at the
beginning of each half year. Interest on Rhea’s drawings @ 10% p.a. for the year ended
31st March, 2023 will be:
(A) |6,000
(B) |4,500
(C) |3,000
(D) |1,500

Correct Answer: (B) |4,500

Solution:
1. Total Drawings = |30,000 × 2 = |60,000.
6+3 9
2. Average Period = 2×12 = 12 years (as withdrawals are made at the beginning of each
half-year).
3. Interest on Drawings:

10 9
Interest = |60, 000 × × = |4, 500.
100 12

Quick Tip
For half-yearly withdrawals, adjust the average period by considering the timing of the
withdrawals within the financial year.

2. Seema and Laksh were partners in a firm sharing profits and losses in the ratio of
2:1. Their capitals were |2,00,000 and |1,80,000 respectively. They admitted Aadi as a
1
new partner on 1st April, 2023 for 5 share in future profits. Aadi brought |1,50,000 as
his share of capital. The goodwill of the firm on Aadi’s admission will be:

3
(A) |7,50,000
(B) |2,20,000
(C) |3,70,000
(D) |1,50,000

Correct Answer: (B) |2,20,000

Solution:
1. Total Capital of the Firm (based on Aadi’s capital contribution):

1
Total Capital = |1, 50, 000 ÷ = |7, 50, 000.
5
2. Existing Partners’ Capital = |2,00,000 + |1,80,000 = |3,80,000.
3. Goodwill of the Firm:
Goodwill = Total Capital - Existing Partners’ Capital - Aadi’s Capital = |7,50,000 -
|3,80,000 - |1,50,000 = |2,20,000.

Quick Tip
Goodwill on admission is calculated as the difference between the total implied capital
and the sum of the existing partners’ and the new partner’s capitals.

3(a). Lata, Mehu, and Namita were partners in a firm sharing profits and losses in the
ratio of 3:2:1. They decided to dissolve the firm on 31st March, 2023. Creditors took
over stock of book value of |80,000 at 80%, in part settlement of their amount of
|90,000. The balance amount was paid to the creditors by cheque. The amount paid by
cheque to the creditors will be:
(A) |26,000
(B) |64,000
(C) |80,000
(D) |1,44,000

Correct Answer: (A) |26,000

Solution:

4
1. Value of Stock Taken Over by Creditors:

Value of Stock = |80, 000 × 80% = |64, 000.

2. Balance Amount Payable to Creditors:

Balance Payable = |90, 000 − |64, 000 = |26, 000.

Quick Tip
In dissolution, any asset taken over by creditors should be valued at the agreed rate and
adjusted against the liability.

3(b). Amount realised from debtors will be:

(A) |3,00,000
(B) |2,25,000
(C) |2,80,000
(D) |2,52,000

Correct Answer: (D) |2,52,000

Solution:
1. Total Debtors = |3,00,000.
2. Bad Debts = |20,000.
3. Provision for Discount on Debtors = |28,000.
4. Remaining Debtors Realised:

Realised Amount = |3, 00, 000 − |20, 000 − |28, 000 = |2, 52, 000.

Quick Tip
To calculate the realised amount from debtors, subtract bad debts and any provisions or
discounts from the total debtor balance.

5
4. Geeta and Hari were partners in a firm sharing profits and losses in the ratio of 3 : 2.
1
Krish was admitted as a new partner for 5 share in profits of the firm which he
acquired from Geeta and Hari in the ratio of 2 : 3. Krish brought |1,00,000 as his share
of capital and |50,000 as premium for goodwill in cash. The sacrificing ratio of Geeta
and Hari will be:
(A) 3 : 2
(B) 1 : 1
(C) 2 : 3
(D) 13 : 7

Correct Answer: (C) 2 : 3

Solution:
The share sacrificed by Geeta and Hari is in the ratio of their original shares in the profits of
the firm. Since Krish’s share is 15 , the sacrificing ratio of Geeta and Hari will be 2 : 3, based
on their agreement.

Quick Tip
The sacrificing ratio determines the portion of profit given up by existing partners to a
new partner and is often based on their original profit-sharing ratio.

5. Manu, Sonu, and Rahul were partners in a firm sharing profits and losses in the ratio
of 4 : 3 : 2. With effect from 1st April, 2023, they decided to share profits and losses in
the future in the ratio of 3 : 2 : 1. Their Balance Sheet showed Workmen Compensation
Reserve of |84,000. The claim on account of Workmen Compensation is estimated at
|75,000. The journal entry to give effect to the above transaction will be:

6
Solution:
1. Distribution of Workmen Compensation Reserve: The Workmen Compensation Reserve
is first distributed among the partners in their old profit-sharing ratio 4 : 3 : 2:
4
Manu’s share = × |84, 000 = |37, 333.33
9
3
Sonu’s share = × |84, 000 = |28, 000
9
2
Rahul’s share = × |84, 000 = |18, 667
9
2. Adjustment for Workmen Compensation Claim: A claim of |75,000 is adjusted against
the reserve, leaving |9,000 (|84,000 - |75,000) to be distributed in the old ratio.
Journal Entry:

Particulars Dr Amount (|) Cr Amount (|)

Workmen Compensation Reserve A/c Dr 84,000

To Workmen Compensation Claim A/c 75,000

To Manu’s Capital A/c 4,000

To Sonu’s Capital A/c 3,000

To Rahul’s Capital A/c 2,000

Table 1: Journal Entry for Adjustment of Workmen Compensation Reserve

7
 Quick Tip
Workmen Compensation Reserve is adjusted for claims first, with any remaining bal-
ance distributed among partners based on their profit-sharing ratios.

6. Assertion (A): Partners’ current accounts maintained under ‘Fixed Capital Method’
may show a debit or a credit balance. Reason (R): In the ‘Fixed Capital Method’, all
items like share of profit or loss, interest on capital, drawings, interest on drawings etc.
are recorded in the partners’ capital accounts. Choose the correct option from the
following:
(A) Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation
of Assertion (A).
(B) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation
of Assertion (A).
(C) Assertion (A) is correct, but Reason (R) is not correct.
(D) Both Assertion (A) and Reason (R) are not correct.

Correct Answer: (C) Assertion (A) is correct, but Reason (R) is not correct.

Solution:
Under the Fixed Capital Method, the partners’ capital accounts reflect only their fixed capital
contributions, which do not change with the profits or losses of the firm. Adjustments for
items such as share of profits or losses, interest on capital, drawings, and interest on drawings
are recorded in the partners’ current accounts. Hence, Assertion (A) is correct as the current
account can show either a debit or credit balance, depending on the transactions during the
period. However, Reason (R) is incorrect because these adjustments are not recorded in the
capital accounts under the Fixed Capital Method.

Quick Tip
In the Fixed Capital Method, partners’ capital accounts remain fixed, and all adjust-
ments related to drawings, profits, or losses are tracked in their current accounts.

8
Read the following hypothetical situation and answer questions No. 7 and 8 on the basis
of the given information:
Richa, Sheena and Tapti were partners in a firm sharing profits and losses in the ratio of 3 : 2
: 1. The partnership deed provided for charging interest on drawings @ 10% p.a. The
drawings of Richa, Sheena and Tapti during the year ended 31st March, 2023 amounted to
|50,000, |40,000 and |30,000 respectively. The net profit for the year ended 31st March,
2023 was |57,000.
7. Sheena’s interest on drawings will be:
(A) |5,000
(B) |4,000
(C) |3,000
(D) |2,000
Correct Answer: (D) |2,000
Solution: The formula to calculate interest on drawings is:

Interest on Drawings = Total Drawings × Rate of Interest × Time Period.

Given:

• Drawings by Sheena: |40,000

• Rate of Interest: 10% per annum

6+5+4+3+2+1 21 3.5
• Time Period: Average time for one year = 6 = 6 = 3.5 months = 12 .

Substituting the values:

10 3.5
Interest on Drawings = |40, 000 × × .
100 12
Simplifying:
Interest on Drawings = |40, 000 × 0.1 × 0.2917 = |2, 000.

Quick Tip
When calculating interest on drawings, ensure the time period and interest rate match
the withdrawal period. Adjust calculations if drawings are irregular.

9
8. Tapti’s share of profit will be:
(A) |11,500
(B) |34,500
(C) |10,500
(D) |23,000
Correct Answer: (C) |10,500
Solution: To calculate Tapti’s share of profit:
Step 1: Determine Total Profit The net profit for the year ended 31st March, 2023 is given
as |57,000.
Step 2: Calculate Tapti’s Share of Profit The profit-sharing ratio of Richa, Sheena, and
1
Tapti is 3 : 2 : 1. Tapti’s share is 6 of the total profit.

Tapti’s Ratio
Tapti’s Share of Profit = Total Profit × .
Sum of Ratios
Substitute the values:
1
Tapti’s Share of Profit = |57, 000 × .
6
Simplify:
Tapti’s Share of Profit = |10, 500.

Quick Tip
Always add interest on drawings to the net profit before allocating profits to partners as
per their agreed ratios.

9. Alfa Ltd. offered for public subscription 50,000 equity shares of |10 each at |12 per
share. The entire amount was payable on application. Applications were received for
48,000 shares and allotment was made for all the applications. The amount received
against the applications is:
(A) |52,80,000
(B) |55,00,000
(C) |50,00,000
(D) |48,00,000

10
Correct Answer: (A) |52,80,000.

Solution:
The total amount received from the applications is calculated by multiplying the number of
shares applied for by the total price per share, including the premium. The calculation is as
follows:
1. Number of Shares Applied = 48,000.
2. Price per Share = |12.

Amount Received = 48, 000 × |12 = |52, 80, 000.

Quick Tip
The total amount received for applications includes the face value of shares and any
premium charged per share.

10. Assertion (A): When the shares are forfeited, share capital account is debited with the
amount called up and credited to: (i) respective unpaid calls account i.e., calls in arrears and
(ii) share forfeiture account with the amount already received on shares.
Reason (R): When the shares are forfeited, all entries relating to the shares forfeited, except
those relating to securities premium, already recorded in accounting records must be
reversed.
Choose the correct option from the following: (A) Both Assertion (A) and Reason (R) are
correct and Reason (R) is the correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct
explanation of Assertion (A).
(C) Assertion (A) is incorrect, but Reason (R) is correct.
(D) Assertion (A) is correct, but Reason (R) is incorrect.

Correct Answer: (A) Both Assertion (A) and Reason (R) are correct and Reason (R) is the
correct explanation of Assertion (A).

Solution:

11
When shares are forfeited, the following steps are performed:
1. The share capital account is debited with the total amount called up on the forfeited shares.
2. The respective unpaid calls (calls in arrears) are credited to reflect the amount unpaid.
3. The share forfeiture account is credited with the amount already received on the shares.
4. The securities premium account, if applicable, is not reversed during forfeiture, as it
represents a premium already earned and does not relate to the forfeited amount.
Thus, both the Assertion (A) and Reason (R) are correct, and the Reason (R) provides a
proper explanation of the Assertion (A).

Quick Tip
During forfeiture, always reverse the called-up capital and unpaid calls while retaining
securities premium unaffected.

11. Lexa Ltd. issued 50,000 equity shares of |10 each at a premium of |2 per share. The
amount was payable as follows:
On application and allotment — |7 per share (including premium)
On first and final call — Balance
The issue was fully subscribed. All the money was duly received except the first and
final call on 1,000 equity shares. These shares were forfeited. On forfeiture of these
shares, Calls in Arrears Account will be:
(A) Credited by |7,000
(B) Debited by |5,000
(C) Credited by |5,000
(D) Debited by |7,000
Correct Answer: (C) Credited by |5,000.
Solution:
Step 1: Determine the Balance Amount Payable on First and Final Call:
The total amount payable per share is |12 (|10 face value + |2 premium).
Amount already received on application and allotment = |7 (including premium).

12
Balance amount payable on the first and final call:

|12 − |7 = |5 per share.

Step 2: Number of Shares Forfeited:

The company forfeited 1,000 shares for non-payment of the first and final call.
Step 3: Calculate the Total Unpaid Amount:
Unpaid amount for 1,000 shares:

1, 000 × |5 = |5, 000.

Step 4: Treatment in Calls in Arrears Account:

When shares are forfeited, the unpaid amount is credited to the Calls in Arrears Account to
reverse the dues. Hence, the Calls in Arrears Account will be credited by |5,000.

Calls in Arrears Account Credited = |5, 000.

Quick Tip
Always remember that on forfeiture, the unpaid call money is credited to the Calls in
Arrears Account to clear the outstanding balance for the forfeited shares.

12. Minimum subscription for allotment of shares as per SEBI guidelines cannot be less
than 90% of which of the following capital?
(A) Reserve Capital
(B) Nominal Capital
(C) Subscribed Capital
(D) Issued Capital

Correct Answer: (D) Issued Capital.

Solution:
According to SEBI (Securities and Exchange Board of India) guidelines, the minimum
subscription required for allotment of shares is at least 90% of the issued capital. Issued
capital refers to the total number of shares offered to the public for subscription. If the

13
subscription received is less than 90% of the issued capital, the allotment cannot be made,
and the application money must be refunded to the applicants.

Quick Tip
Issued capital is the portion of authorized capital offered to the public for subscription,
and SEBI mandates at least 90% subscription for allotment.

13(a). KLB Ltd. forfeited 3,000 shares of |10 each, |8 per share called up for
non-payment of the first call of |2 per share. All these shares were reissued at |7 per
share, |8 paid up. The amount transferred to the Capital Reserve Account will be:
(A) |18,000
(B) |24,000
(C) |15,000
(D) |3,000

Correct Answer: (C) |15,000.

Solution:
Step 1: Calculate Forfeiture Amount
- Amount called up per share: |8.
- Amount unpaid per share: |2 (First call).
- Amount received per share before forfeiture: |6 (|8 - |2).
- Total forfeited amount:

Forfeiture Amount = 3, 000 × |6 = |18, 000.

Step 2: Reissue of Shares

- Reissue price per share: |7.
- Paid-up value per share: |8.
- Total amount received from reissue:

Reissue Amount = 3, 000 × |7 = |21, 000.

Step 3: Amount Required to Make Shares Fully Paid

14
- Nominal value per share: |8.
- Total nominal value:

Nominal Value = 3, 000 × |8 = |24, 000.

- Amount required to make shares fully paid:

Required Amount = Nominal Value − Reissue Amount.

Required Amount = |24, 000 − |21, 000 = |3, 000.

Step 4: Transfer to Capital Reserve

- Total forfeited amount: |18,000.
- Forfeited amount utilized to make shares fully paid: |3,000.
- Remaining amount transferred to Capital Reserve:

Capital Reserve = |18, 000 − |3, 000 = |15, 000.

Final Answer: The amount credited to the Capital Reserve Account is |15, 000.

Quick Tip
When forfeited shares are reissued, the forfeited amount is first used to cover the deficit
on reissued shares. Any remaining forfeiture amount is transferred to the Capital Re-
serve Account.

13(b). NUK Ltd. forfeited 1,000 shares of |10 each, fully called up for non-payment of
the final call of |2 per share. 800 of these shares were reissued at |11 per share, fully
paid up. The amount credited to the Capital Reserve Account will be:
(A) |6,400
(B) |8,000
(C) |7,200
(D) |10,000

Correct Answer: (A) |6,400.

Solution:

15
Step 1: Calculate Forfeiture Amount
- Amount called up per share: |10.
- Amount unpaid per share: |2 (Final call).
- Amount received per share before forfeiture: |8 (|10 - |2).
- Total forfeited amount:

Forfeiture Amount = 1, 000 × |8 = |8, 000.

Step 2: Reissue of Shares

- Reissue price per share: |11.
- Paid-up value per share: |10.
- Total amount received from reissue:

Reissue Amount = 800 × |11 = |8, 800.

Step 3: Amount Required to Make Shares Fully Paid

- Nominal value per share: |10.
- Total nominal value:
Nominal Value = 800 × |10 = |8, 000.

- Excess received on reissue = |8,800 - |8,000 = |800.

- Total forfeited amount used to cover reissued shares = 800 × |2 = |1, 600.
Step 4: Transfer to Capital Reserve
- Total forfeited amount: |8,000.
- Forfeited amount utilized: |1,600.
- Remaining amount transferred to Capital Reserve:

Capital Reserve = |8, 000 − |1, 600 = |6, 400.

Final Answer: The amount credited to the Capital Reserve Account is |6, 400.

Quick Tip
When reissued shares are issued at a premium, the premium amount is credited directly
to the Securities Premium Account, and the forfeiture account is used for any deficits.

16
14. The debentures which do not carry a specific rate of interest are called:
(A) Zero Coupon Rate Debentures
(B) Specific Coupon Rate Debentures
(C) Unsecured Debentures
(D) Secured Debentures

Correct Answer: (A) Zero Coupon Rate Debentures.

Solution:
Zero Coupon Rate Debentures are financial instruments issued at a discount and redeemed at
face value. They do not carry a specific rate of interest or periodic coupon payments. Instead,
the difference between the issue price and the redemption value provides the return to the
investor.
For example: - If a debenture is issued at |800 and redeemed at |1,000 after 5 years, the
return to the investor is |200 over the investment period.
These debentures are commonly used by companies to raise funds without the burden of
periodic interest payments.

Quick Tip
Zero Coupon Rate Debentures are ideal for companies looking to defer interest pay-
ments while providing investors a lump sum return at maturity.

15(a). Nicku, Mala, and Ritu were partners in a firm sharing profits in the ratio of
5 : 3 : 2. Nicku died on 30th September, 2023. The deceased partner was entitled to his
share of profit up to the date of death, which was to be calculated on the basis of the
previous year’s profit. The previous year’s profit was |80,000. Nicku’s share of profit
will be:
(A) |10,000
(B) |20,000
(C) |30,000
(D) |40,000

17
Correct Answer: (B) |20,000.

Solution:
Nicku’s share of profit is calculated based on the partnership agreement and prorated for the
period of time relevant to Nicku’s share:
Step 1: Calculate Total Profit and Share
- Total profit of the firm: |80,000.
5
- Nicku’s profit-sharing ratio: 10 .
6
- Time period (relevant to Nicku): 12 .

5 6
Nicku’s Share of Profit = |80, 000 × × = |20, 000.
10 12
Final Answer: Nicku’s share of profit is |20, 000.

Quick Tip
To calculate a partner’s share of profit, consider the total profit, profit-sharing ratio, and
the specific time period applicable to the partner.

15(b). Nikhil, Arun, and Mansi were partners in a firm sharing profits and losses in the
ratio of 4 : 3 : 3. With effect from 1st April, 2023, they decided to share profits and
losses in the ratio of 5 : 3 : 2. Due to change in the profit-sharing ratio, Mansi’s gain or
sacrifice will be:
1
(A) Gain 10
3
(B) Sacrifice 10
1
(C) Sacrifice 10
3
(D) Gain 10

1
Correct Answer: (C) Sacrifice 10 .

Solution:
To calculate Mansi’s gain or sacrifice due to the change in the profit-sharing ratio:
Step 1: Calculate Old and New Shares
3
- Mansi’s old share = 10 .

18
- Aaroh’s new share = Original share + Share from Charu:
1 4 5
+ = .
9 9 9

- Bhuvan’s new share = Original share + Share from Charu:

2 2 4
+ = .
9 9 9

New Profit-Sharing Ratio: Aaroh : Bhuvan = 5 : 4.

Quick Tip
After a partner’s death, their share is distributed among the remaining partners in the
agreed acquisition ratio to determine the new profit-sharing ratio.

17. Aaria, Beenu, and Clara were partners in a firm sharing profits and losses in the
ratio of 4 : 3 : 3. On 30th June, 2023, Clara died. Clara’s share in the profits of the firm
till the date of death was to be calculated on the basis of sales. Sales during the year
2022–23 were |20,00,000, and sales from 1st April, 2023 to 30th June, 2023 were
|4,00,000. The profit for the year ended 31st March, 2023 was |5,00,000. Calculate
Clara’s share of profit up to the date of death and pass the necessary journal entry for
the same in the books of the firm. Show your workings clearly.

Solution:
Step 1: Calculate the profit for the period from 1st April, 2023 to 30th June, 2023
- Sales from 1st April to 30th June, 2023 = |4,00,000.
- Total sales for the year = |20,00,000.
- Profit for the year ended 31st March, 2023 = |5,00,000.
4,00,000
Profit for the period = 20,00,000 × 5, 00, 000 = |1, 00, 000.
Step 2: Calculate Clara’s share of profit
3
- Clara’s share in profits = 10 .

3
Clara’s Share of Profit = |1, 00, 000 × = |30, 000.
10

21
Journal Entry:

Date Particulars Dr (|) Cr (|)

2023 June 30 P rof itandLossSuspenseA/c 30, 000
T oClara′ sCapitalA/c 30, 000
Final Answer: Clara’s share of profit up to the date of death is |30, 000.

Quick Tip
For calculating a deceased partner’s share of profit, prorate the profit based on the sales
during the relevant period and the partner’s profit-sharing ratio.

18. Rishi and Suman were partners in a firm. Their capitals were |1,20,000 and
|80,000, respectively. The normal rate of return in similar businesses is 12%. The
profits of the last four years were:

Year Profits (|)

2019–20 33, 000
2020–21 22, 000
2021–22 31, 000
2022–23 34, 000
Calculate goodwill of the firm based on:
(i) Three years’ purchase of the last four years’ average profits.
(ii) Capitalisation of super profit.

Solution:
Step 1: Calculate the Average Profit
Sum of Profits 33, 000 + 22, 000 + 31, 000 + 34, 000
Average Profit = = = |30, 000.
Number of Years 4
Step 2: Goodwill Based on Three Years’ Purchase of Average Profit

Goodwill = Average Profit × 3 = |30, 000 × 3 = |90, 000.

Step 3: Calculate the Normal Profit

Capital Employed = |1, 20, 000 + |80, 000 = |2, 00, 000.

22
 Particulars 31.3.2023 (%) 31.3.2022 (%)
Revenue from Operations (Base) 100.00 100.00
Cost of Materials Consumed 32.00 30.00
Employee Benefit Expenses 16.00 20.00
Profit Before Tax (PBT) 52.00 50.00
Less: Income Tax (20% for 2023, 30% for 2022) 10.40 15.00
Profit After Tax (PAT) 41.60 35.00

Steps to Prepare a Common Size Statement:

1. Base Percentage: Revenue from Operations is taken as 100%.
2. Individual Percentages: Each item is calculated as a percentage of Revenue from
Operations:
Item Amount
Percentage = × 100.
Revenue from Operations
3. Income Tax and PAT:

• PBT% = Revenue from Operations - (Cost of Materials% + Employee Benefit

Expenses%).

• Income Tax% = PBT% × Tax Rate.

• PAT% = PBT% - Income Tax%.

Quick Tip
In a Common Size Statement, express all items as percentages of Revenue from Oper-
ations to facilitate comparison of financial performance over time.

34(a). Calculate ‘Cash Flows from Investing Activities’ from the following information:

Particulars 31.3.2023 (|) 31.3.2022 (|)

Plant and Machinery 4, 10, 000 3, 00, 000
Goodwill 1, 80, 000 80, 000
Additional Information:

51
 • A machine costing |85,000 (depreciation provided thereon |15,000) was sold for
|62,000.

• Depreciation charged during the year amounted to |48,000.

Solution:
1. Proceeds from Sale of Machinery:
The sale of machinery provided cash inflow of |62,000.
2. Increase in Plant and Machinery:

Increase in Plant and Machinery = |4, 10, 000 − |3, 00, 000 = |1, 10, 000.

3. Investment in Goodwill:

Increase in Goodwill = |1, 80, 000 − |80, 000 = |1, 00, 000.

4. Net Cash Flows from Investing Activities:

Cash Flows from Investing Activities = Proceeds from Sale of Machinery−Increase in Plant and Machin

= |62, 000 − |1, 10, 000 − |1, 00, 000 = −|1, 48, 000.

Final Answer: −|1, 48, 000.

Quick Tip
Include proceeds from asset sales as inflows and purchases of new assets or investments
as outflows when calculating cash flows from investing activities.

34(b). Calculate ‘Cash Flows from Financing Activities’ from the following
information:

Particulars 31.3.2023 (|) 31.3.2022 (|)

Equity Share Capital 15, 00, 000 10, 00, 000
Bank Overdraft 90, 000 1, 20, 000
Loan from Bank 7, 00, 000 6, 00, 000

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Additional Information:

• Interest paid on bank loan amounted to |60,000.

• Dividend paid amounted to |1,10,000.

Solution:
1. Proceeds from Equity Share Capital:

Increase in Equity Share Capital = |15, 00, 000 − |10, 00, 000 = |5, 00, 000.

2. Proceeds from Additional Loan:

Increase in Loan from Bank = |7, 00, 000 − |6, 00, 000 = |1, 00, 000.

3. Repayment of Bank Overdraft:

Reduction in Bank Overdraft = |1, 20, 000 − |90, 000 = |30, 000.

4. Dividend and Interest Payments:

Dividend Paid = −|1, 10, 000, Interest Paid = −|60, 000.

5. Net Cash Flows from Financing Activities:

Net Cash Flows = Proceeds from Equity Share Capital+Loan Proceeds−Overdraft Reduction−Dividend

= |5, 00, 000 + |1, 00, 000 − |30, 000 − |1, 10, 000 − |60, 000 = |4, 00, 000.

Final Answer: |4, 00, 000.

Quick Tip
Include equity issuance, loan proceeds, dividend payments, and interest payments while
calculating cash flows from financing activities.

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Part II

27. Identify the type of software which is suited for large and medium organisations
and can be linked to other information systems. (A) Specific
(B) Generic
(C) Tailored
(D) Both (B) and (C)

Correct Answer: (A) Specific.

Solution:
- Specific software is created to fulfill particular needs and is highly suitable for large and
medium organizations.
- It ensures seamless integration with other systems and offers unique functionalities that
generic and tailored software may not provide directly.

Quick Tip
Specific software ensures efficient handling of complex operations for large and medium
businesses, offering advanced integration capabilities.

28(a). In a graph, the area bounded by different axes is known as:

(A) Legend
(B) Data point
(C) Axis title
(D) Plot area

Correct Answer: (D) Plot area.

Solution:
- The plot area in a graph represents the bounded region where data points are plotted.
- It provides a visual representation of relationships between variables within the chart.

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 Quick Tip
The plot area in a graph is critical for visualizing relationships between variables effec-
tively.

28(b). Which of the following is not contained on the formula tab on the Excel ribbon?
(A) Function library
(B) Defined names
(C) Calculations
(D) Page layout

Correct Answer: (D) Page layout.

Solution:
- The formula tab in Excel provides tools such as the function library, defined names, and
calculation options to analyze and manipulate data.
- The page layout tab, however, focuses on formatting and designing the worksheet’s
appearance.

Quick Tip
Understanding the functionalities of Excel’s ribbon tabs enhances productivity in data
management and analysis.

29. How is navigation conducted from the first to the last filled cells of clusters when
moving one cell at a time in a row?
(A) Home + Right arrow (→)
(B) CTRL + Right arrow (→) successively
(C) END + Right arrow (→)
(D) CTRL + END

Correct Answer: (B) CTRL + Right arrow (→) successively.

Solution:

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- Using the CTRL + Right arrow (→) shortcut allows quick navigation to the next filled or
non-empty cell in the same row.
- Repeating the action ensures you reach the last filled cell efficiently.

Quick Tip
Utilize keyboard shortcuts like CTRL + Arrow keys for faster navigation and enhanced
efficiency in Excel workflows.

30(a). Which Date and Time function returns the value of today’s date with time?
(A) Today()
(B) Day()
(C) Now()
(D) Day time()

Correct Answer: (C) Now().

Solution:
- The Now() function in Excel returns the current system date and time.
- Alternatively, the Today() function provides only the current date without including the
time.

Quick Tip
Use the Now() function to capture date and time stamps, whereas Today() is ideal for
recording only dates.

30(b). What is the outcome of an arithmetic expression or function called?

(A) Basic Value
(B) Vertical Vector
(C) Derived Value
(D) Horizontal Vector

Correct Answer: (C) Derived Value.

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Solution:
- The derived value is the result obtained from performing an arithmetic operation or
evaluating a function.
- It represents the final output after the formula is executed.

Quick Tip
Derived values are crucial for automation in data analysis, helping reduce manual errors.

31. Explain ‘Transparency and Control’ and ‘Accuracy and Speed’ as features of a
Computerised Accounting System.

Solution:
- Transparency and Control: Computerized accounting systems generate detailed reports
and maintain accurate records, enabling better control over financial decisions.
- Accuracy and Speed: Automated processes ensure quick data processing with minimal
errors, enhancing efficiency and reliability.

Quick Tip
Computerized accounting systems streamline operations by improving precision, speed,
and decision-making capabilities.

32. State the parameters of Excel’s PMT function. What is the use of this function?

Solution:
1. PMT Function Parameters:
- Rate: Interest rate per period.
- Nper: Total number of payment periods.
- PV: Present value or loan amount.
2. Use of PMT Function:
- It calculates periodic payment amounts for loans or investments based on constant interest
rates and fixed payments.

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 Quick Tip
The PMT function simplifies financial planning by calculating periodic loan payments
efficiently.

33(a). Explain ‘Password Security’ and ‘Data Audit’ as security features of a

Computerised Accounting System.

Solution:
- Password Security: Ensures that only authorized users can access the accounting system
by requiring unique and secure passwords. It protects sensitive financial data from
unauthorized access or breaches.
- Data Audit: Tracks and records all changes made to the data, maintaining accountability
and ensuring data accuracy. This feature allows organizations to review and verify
modifications to financial information.

Quick Tip
Implementing robust password security and maintaining data audit logs safeguard the
integrity and confidentiality of financial information.

33(b). What is Data Formatting? What tools are used to format a given data?

Solution:
- Data Formatting: Refers to the process of organizing and styling data to improve its
readability and presentation. It includes changing the appearance of text, numbers, or dates
within a dataset to make it easier to interpret and analyze.
- Tools Used for Data Formatting:
1. Font and Text Tools: Bold, italics, font size, and font color to emphasize specific data.
2. Number Formatting: Applying currency, percentages, decimal adjustments, or scientific
notation to numerical data.
3. Alignment Tools: Adjusting text alignment (left, right, or center) and using indentation to
enhance layout.

58
4. Conditional Formatting: Highlighting data based on specific conditions or rules.
5. Date and Time Formatting: Displaying dates and times in various formats (e.g.,
DD/MM/YYYY).
6. Borders and Shading: Adding borders or background colors to cells or tables to improve
visual organization.

Quick Tip
Effective data formatting enhances clarity and ensures consistency, making data inter-
pretation and decision-making more efficient.

34. Using the worksheet, find out the error and its reason for the given syntax:
(i) = VLOOKUP (B1, B4 : D6, 2, 0)
(ii) = SQRT (VLOOKUP (C2, C2 : D8, 2, 0) - 100)
(iii) = VLOOKUP (B5, B6 : D8, 1, 0)
(iv) = VLOOKUP (B3, B2 : D8, 5, 0)
(v) = VLOOKUP (B5, B3 : D8, 0, 0)
(vi) = VLOOKUP (B2, B2 : D7, 2, 0) / 0

S. No. Consumables Price in FY 21–22 (|) Price in FY 23–24 (|)

1 Apple 50 60
2 Orange 20 40
3 Banana 60 80
4 Lemon 40 80
5 Milk 53 60
6 Bread 40 45
7 Egg 58 60

59
S. No. Formula Error Reason
(i) =VLOOKUP(B1, B4:D6, 2, 0) Returns #N/A error The lookup value (B1) refers to the header ”S.
No.” instead of an actual data value, which is not
present in the range B4:D6.
(ii) =SQRT(VLOOKUP(C2, C2:D8, 2, 0) - 100) Incorrect range for VLOOKUP The lookup value (C2) searches within C2:D8,
which includes the lookup value itself, causing
invalid results.
(iii) =VLOOKUP(B5, B6:D8, 1, 0) Column index is invalid Column index ”1” refers to the lookup column,
not the return column, which causes incorrect
output.
(iv) =VLOOKUP(B3, B2:D8, 5, 0) Column index exceeds range The column index ”5” is outside the range of
B2:D8, which has only 3 columns, resulting in
an #REF! error.
(v) =VLOOKUP(B5, B3:D8, 0, 0) Invalid range for VLOOKUP The lookup column (B5) is outside the range
B3:D8, leading to incorrect results.
(vi) =VLOOKUP(B2, B2:D7, 2, 0)/0 Division by zero The formula divides the result of the VLOOKUP
by zero, which is an invalid mathematical opera-
tion.

Quick Tip

To avoid errors in VLOOKUP:

1. Ensure the lookup value exists within the range.
2. Use a valid column index within the specified range.
3. Avoid circular references or division by zero in calculations.

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