By QB365 on 31 Dec, 2022
QB365 provides a detailed and simple solution for every Possible Questions in Class 12 Accountancy Subject - Important 2 Mark English Medium. It will help Students to get more practice questions, Students can Practice these question papers in addition to score best marks.
12th Standard
Accountancy
Answer all the following Questions.
From the following particulars ascertain profit or loss:
Rs. | |
---|---|
Capital at the beginning of the year (1st April, 2016) | 2,00,000 |
Capital at the end of the year (31st March, 2017) | 3,50,000 |
Additional capital introduced during the year | 70,000 |
Drawings during the year | 40,000 |
From the following particulars ascertain profit or loss:
Rs. | |
---|---|
Capital as on 1st April 2018 | 1,60,000 |
Capital as on 31st March, 2019 | 1,50,000 |
Additional capital introduced during the year | 25,000 |
Drawings made during the year | 30,000 |
From the following details, calculate credit purchases
Particulars | Rs |
---|---|
Creditors on 1st April, 2018 | 50,000 |
Returns outward | 6,000 |
Cash paid to creditors | 1,60,000 |
Creditors on 31st March, 2019 | 70,000 |
From the following details calculate the amount that will be shown as subscription in Income and Expenditure Account for the year ending 31st March, 2017.
Subscription received for | Rs. |
---|---|
2015-16 | 7,500 |
2016-17 | 60,000 |
2017-18 | 1,500 |
69,000 |
Subscription outstanding for the year 2016-17 is Rs. 2,400. Subscription for 2016-17 received in 2015-16 was Rs.1,000
How will the following items appear in the final accounts of a sports club?
Particulars | Rs. |
---|---|
Stock of sports materials (01.04.2018) | 3,000 |
Sports materials purchased during current year | 9,000 |
Sale of old sport materials during current year | 500 |
Stock of sports materials (31.03.2019) | 4,000 |
State the meaning of not–for–profit organisation
Priya and Kavitha are partners. Priya draws Rs. 4,000 at the end of each quarter. Interest on drawings is chargeable at 6% p.a. Calculate interest on drawings for the year ending 31st December 2018 using average period.
Vennila and Eswari are partners. Vennila draws Rs.5,000 at the beginning of each half year. Interest on drawings is chargeable at 4% p.a. Calculate interest on drawings for the year ending 31st December 2018 using average period.
What is a partnership deed?
The following are the profits of a firm in the last five years:
2014: Rs. 4,000; 2015: Rs. 3,000; 2016: Rs. 5,000; 2017: Rs. 4,500 and 2018: Rs. 3,500
Calculate the value of goodwill at 3 years purchase of average profits of five years.
For the purpose of admitting a new partner, a firm has decided to value its goodwill at 3 years purchase of the average profit of the last 4 years using weighted average method. Profits of the past 4 years and the respective weights are as follows:
Particulars | 2015 | 2016 | 2017 | 2018 |
---|---|---|---|---|
Profit (Rs.) | 20,000 | 22,000 | 24,000 | 28,000 |
Weight | 1 | 2 | 3 | 4 |
Compute the value of goodwill.
The following are the profits of a firm in the last five years:
2014: Rs. 10,000; 2015: Rs. 11,000; 2016: Rs. 12,000; 2017: Rs. 13,000 and 2018: Rs. 14,000
Calculate the value of goodwill at 2 years purchase of average profit of five years.
Mala and Vimala were partners sharing profits and losses in the ratio of 3:2. On 31.3.2017, Varshini was admitted as a partner. On the date of admission, the book of the firm showed a reserve fund of Rs. 50,000. Pass the journal entry to distribute the reserve fund.
Kavitha and Radha are partners of a firm sharing profits and losses in the ratio of 4:3. They admit Deepa on 1.1.2019. On that date, their balance sheet showed debit balance of profit and loss account being accumulated loss of Rs. 70,000 on the asset side of the balance sheet. Give the journal entry to transfer the accumulated loss on admission.
Hameed and Govind are partners sharing profits and losses in the ratio of 5:3. They admit John as a partner. John acquires his share 1/5 from Hameed and 1/5 from Govind. Find out the new profit sharing ratio and sacrificing ratio.
Vivin, Hari and Joy are partners sharing profits and losses in the ratio of 3:2:1. On 31.3.2017, Hari retired. On the date of retirement, the books of the firm showed a general reserve of Rs. 60,000. Pass the journal entry to transfer the general reserve.
Mary, Meena and Mariam are partners of a firm sharing profits and losses equally. Mary retired from the partnership on 1.1.2019. On that date, their balance sheet showed accumulated loss of Rs. 75,000 on the asset side of the balance sheet. Give the journal entry to distribute the accumulated loss.
Jeyam Tyres issued 15,000 ordinary shares of Rs.10 each payable as follows:
Rs.3 on application; Rs.5 on allotment; Rs.2 on first and final call. All money were duly received except one shareholder holding 100 shares failed to pay the call money. Pass the necessary journal entries for call (using calls in arrear account).
Anitha was holding 500 equity shares of Rs.10 each of Thanjavur Motors Ltd, issued at par. She paid Rs.3 on application, Rs.5 on allotment but could not pay the first and final call of Rs.2. The directors forfeited the shares for nonpayment of call money. Give Journal entry for forfeiture of shares.
From the following particulars, prepare comparative income statement of Tharun Co. Ltd.
Particulars | 2016-17 | 2017-18 |
---|---|---|
Rs. | Rs. | |
Revenue from operations | 2,00,000 | 2,50,000 |
Other income | 50,000 | 40,000 |
Expenses | 1,50,000 | 1,20,000 |
From the following particulars of Kumar Ltd, prepare a common-size income statement for the year ended 31st March, 2018.
Particulars | 2017-18 |
---|---|
Rs. | |
Revenue from operations | 5,00,000 |
Other income | 20,000 |
Expenses | 3,00,000 |
What is meant by accounting ratios?
What is quick ratio?
What is automated accounting system?
What are accounting reports?
Following is the extract of the balance sheet of Babu Ltd., as on 31st March, 2018:
Particulars | Amount Rs. |
---|---|
I EQUITY AND LIABILITIES | |
1. Shareholders' funds | |
(a) Share capital | 70,000 |
(b) Reserves and surplus | 25,000 |
2. Non-current liabilities | |
Long-term borrowings | 30,000 |
3. Current liabilities | |
(a) Trade payables | 20,000 |
(b) Other current liabilities | 15,000 |
(c) Short-term provisions | 42,000 |
Total | 2,02,000 |
Net profit before interest and tax for the year was Rs.25,000. Calculate the return on capital employed for the year.
What are solvency ratios?
How does the nature of a business affect the value of goodwill of a firm?
How does the market situation affect the value of Good will?
How does the 'market situation' affect the value of goodwill of a firm?
Answers
Particulars | Rs. |
---|---|
Closing capital (as on 31.3.2017) | 3,50,000 40,000 |
Add: Drawings during the year | |
3,90,000 | |
Less: Additional capital introduced during the year | 70,000 |
Adjusted closing capital | 3,20,000 2,00,000 |
Less: Opening capital (as on 1.4.2016) | |
Profit made during the year | 1,20,000 |
Particulars | Rs. |
---|---|
Closing capital (as on 31.3.2019) | 1,50,000 |
Add: Drawings during the year | 30,000 |
Less: Additional capital introduced during the year |
1,80,000 |
25,000 | |
Adjusted closing capital | 1,55,000 |
Less: Opening capital (as on 1.4.2018) | 1,60,000 |
Loss incurred during the year | (-) 5,000 |
Particulars | Rs. | Particulars | Rs. |
---|---|---|---|
To Cash A/c (paid) | 1,60,000 | By Balance b/d | 50,000 |
To Returns outward A/c | 6,000 | By Credit purchases A/c | 1,86,000 |
To Balance c/d | 70,000 | (balancing figure) | |
2,36,000 | 2,36,000 |
Format of bills payable account
Particulars | Rs | Particulars | Rs |
---|---|---|---|
To Cash / Bank A/c | xxx | By Balance b/d | xxx |
(bills payable paid) | (opening balance) | ||
To Sundry creditors A/c | xxx | By Sundry creditors A/c | xxx |
(bills payable dishonoured) | (bills accepted) | ||
To Balance c/d | xxx | ||
(closing balance) | |||
xxx | xxx |
Expenditure | Rs. | Income | Rs. | Rs. |
---|---|---|---|---|
By Subscription | 60,000 | |||
Add: Outstanding subscription for 2016-17 | 2,400 | |||
Subscription received in advance in | ||||
in advance in | 1,000 | 63,400 | ||
Tutorial note
(i) Subscription for the year 2015-16 Rs. 7,500 and for the year 2017-18 Rs. 1,500 do not relate to the current year. So they should not be recorded in Income and Expenditure Account.
(ii) Subscription outstanding for the current year 2016-17 is Rs. 2,400. It should be added with the amount of subscription received during 2016-17.
Expenditure | Rs. | Rs. | Income | Rs. |
---|---|---|---|---|
To Sports materials consumed: | By Sale of old sports materials | 500 | ||
Opening stock | 3,000 | |||
Add: Purchased in the current year | 9,000 | |||
12,000 | ||||
Less: Closing stock | 4,000 | 8,000 |
Liabilities | Rs. | Rs. | Assets | Rs. | Rs. |
---|---|---|---|---|---|
Stock of sports materials | 4,000 |
(i) Some organisations are established for the purpose of rendering services to the public without any profit motive.
(ii) They may be created for the promotion of art, culture, education, sports, etc. These organisations are called not-for-profit organisation.
(iii) Charitable institutions, educational, institutions, cultural societies, sports and recreation clubs, hospitals, libraries and literary associations are some of the examples of not-for-profit organisations.
Calculation of interest on drawings of Priya (using average period)
Total amount of drawings = 4,000 \(\times\) 4 = Rs. 16,000
If drawings are made at the end of every quarter, average period = 4.5
Interest on drawings = Total amount of drawings \(\times\) Rate of interest \(\times\) \(\frac { Average\quad period }{ 12 } \)
= Rs. 16,000 \(\times\) \(\frac { 6 }{ 100 } \times \frac { 4.5 }{ 12 } \) = Rs. 360
Calculation of interest on drawings of Vennila (using average period)
Total amount of drawings = 5,000 x 2 = Rs.10,000
If drawings are made at the end of every half year, average period = 9
Interest on drawings = Total amount of drawings x Rate of interest x \(\frac { Average\quad period }{ 12 } \)
= Rs.10,000 x \(\frac { 4 }{ 100 } \times \frac { 9 }{ 12 } \) = Rs. 300
Partnership deed is a document in writing that contains the terms of the agreement among the partners. It is not compulsory for a partnership to have a partnership deed as per the Indian Partnership Act, 1932. But, it is desirable to have a partnership deed as it serve as an evidence of the terms of the agreement among the partners.
Goodwill = Average profit \(\times\) Number of years of purchase
Average profit = \(\frac { Total\ profit }{ Number\ ofyear } \)
= \(\frac { 4,000+3,000+5,000+4,500+3,500 }{ 5 } \)
= \(\frac { 20,000 }{ 5 } \)= Rs. 4,000
Goodwill = Average profit \(\times\) Number of years of purchase
= 4,000 \(\times\) 3 = Rs.12,000
Year | Profit (a) Rs. |
Weights (b) | Weighted profits (a x b) Rs |
---|---|---|---|
2015 | 20,000 | 1 | 20,000 |
2016 | 22,000 | 2 | 44,000 |
2017 | 24,000 | 3 | 72,000 |
2018 | 28,000 | 4 | 1,12,000 |
Total | 10 | 2,48,000 |
Weighted average profit = \(\frac { Total\ of\ weighted\ profits }{ Total\ of\ weights } \)
=\(\frac { 2,48,000 }{ 10 } \)=Rs.24,800
Goodwill = Weighted average profit × Number of years of purchase
= 24,800 x 3 = Rs.74,400
Goodwill = Average profit \(\times\) Number of years of purchase
Average profit \(=\frac{Total\ profit}{Number\ of\ years}\)
\(\frac{10,000+11,000+12,000+13,000+14,000}{5}\)
\(=\frac{60,000}{5}\) = Rs. 12,000
Average profit = Rs. 12,000
Goodwill Average profit \(\times\) Number of years of purchase
12,000 \(\times\) 2 = 24,000
Goodwill = Rs. 24,000
Date | Particulars | L.E. | Debit Rs. |
Credit Rs. |
---|---|---|---|---|
2017 | Reserve fund A/c Dr. | 50,000 | ||
March 31 | To Mala’s capital A/c (50,000 \(\times\) 3/5) | 30,000 | ||
To Vimala’s capital A/c (50,000 \(\times\) 2/5) (Reserve fund transferred to old partners’ capital account in the old profit sharing ratio) |
20,000 |
Date | Particulars | L.E. | Debit Rs. |
Credit Rs. |
---|---|---|---|---|
2019 | Kavitha’s capital A/c Dr. | 40,000 | ||
January 1 | Radha’s capital A/c Dr. | 30,000 | ||
To Profit and loss a/c (Accumulated loss transferred to old partners’ capital account in the old profit sharing ratio) |
70,000 |
Computation of sacrificing ratio and new profit sharing ratio
Share sacrificed = \(\frac { 1 }{ 5 } ,\frac { 1 }{ 5 } \)
Sacrificing ratio of Hameed and Govind is 1:1
Old ratio is 5:3 that is \(\frac { 5 }{ 8 } :\frac { 3 }{ 8 } \)
New share of old partner = Old share - Share sacrificed
Hameed = \(\frac { 5 }{ 8 } -\frac { 1 }{ 5 } =\frac { 25-8 }{ 40 } =\frac { 17 }{ 40 } \)
Govind = \(\frac { 3 }{ 8 } -\frac { 1 }{ 5 } =\frac { 15-8 }{ 40 } =\frac { 7 }{ 40 } \)
Share of new partner
John = Sum of shares sacrificed by old partners
=\(\frac { 1 }{ 5 } +\frac { 1 }{ 5 } =\frac { 2 }{ 5 } \)
In order to equalise the denominator of John’s share, multiply and divide by 8 John’s share =\(\\ \frac { 2 }{ 5 } \times \frac { 8 }{ 8 } =\frac { 16 }{ 40 } \)
New profit sharing ratio of Hameed, Govind and John is \(\frac { 17 }{ 40 } :\frac { 7 }{ 40 } :\frac { 16 }{ 40 } \) or 17:7:16
Date | Particulars | L.F | Debit Rs. |
Credit RS. |
|
---|---|---|---|---|---|
2017 March 31 |
General reserve A/c | Dr. | 60,000 | ||
To Vivin’s capital A/c (60,000 × 3/6) | 30,000 | ||||
To Hari’s capital A/c (60,000 × 2/6) | 20,000 | ||||
To Joy’s capital A/c (60,000 × 1/6) | 10,000 | ||||
(General reserve transferred to all partners’ capital account in the old profit sharing ratio) |
Date | Particulars | L.F | Debit Rs. |
Credit RS. |
|
---|---|---|---|---|---|
2019 January 1 |
Mary’s capital A/c | Dr. | 25,000 | ||
Meena’s capital A/c | Dr. | 25,000 | |||
Mariam’s capital A/c | Dr. | 25,000 | |||
To Profit and loss a/c | 75,000 | ||||
(Accumulated loss transferred to all partners’ capital account in the old profit sharing ratio) |
Date | Particulars | L.F | Debit Rs. |
Credit Rs. |
|
---|---|---|---|---|---|
Equity share first and final call A/c (15,000 × 2) | Dr. | 30,000 | |||
To Share capital A/c | 30,000 | ||||
(Share first and final call money due) | |||||
Bank A/c (14,900 × 2) | Dr. | 29,800 | |||
Calls in arrear A/c (100 × 2) | Dr. | 200 | |||
To Equity share first and final call A/c | 30,000 | ||||
(Amount received on calls and amount not | |||||
received transferred to calls in arrear account) |
Date | Particulars | L.F. | Debit Rs. |
Credit Rs. |
|
---|---|---|---|---|---|
Equity share capital A/c (500 × 10) | Dr. | 5,000 | |||
To Equity share call A/c (500 × 2) | 1,000 | ||||
To Forfeited shares A/c (500 × 8) | 4,000 | ||||
(500 shares forfeited for non payment of call money) |
Particulars | 2016-17 | 2017-18 | Absolute amount of increase ( +) or decrease (–) |
Percentage increase (+) or decrease (–) |
---|---|---|---|---|
Rs. | Rs. | Rs. | ||
Revenue from operations | 2,00,000 | 2,50,000 | +50,000 | +25 |
Add: Other income | 50,000 | 40,000 | –10,000 | –20 |
Total revenue | 2,50,000 | 2,90,000 | +40,000 | +16 |
Less: Expenses | 1,50,000 | 1,20,000 | –30,000 | –20 |
Profit before tax | 1,00,000 | 1,70,000 | +70,000 | +70 |
Computation of percentage increase for revenue from operations
\(\cfrac { Absolute\ amount\ of\ increase\ or\ decrease }{ Year\ 1\ amount } \times 100=\cfrac { 50,000 }{ 2,00,000 } \times 100=25%\)
Particulars | Absolute amount | Percentage of revenue from operations |
---|---|---|
Revenue from operations | 5,00,000 | 100 |
Add: Other income | 20,000 | 4 |
Total revenue | 5,20,000 | 104 |
Less: Expenses | 3,00,000 | 60 |
Profit before tax | 2,20,000 | 44 |
Computation of percentage for other income
\(\cfrac { 20,000 }{ 5,00,000 } \times 100=4%\)%
(i) Ratio is a mathematical expression of relationship between two related or interdependent items.
(ii) It is the numerical or quantitative relationship between two items
(iii) It is calculated by dividing one item by the other related item.
(iv) When ratios are calculated on the basis of accounting information, these are called 'accounting ratios'.
(i) Quick ratio gives the proportion of quick assets to current liabilities.
(ii) It indicates whether the business concern is in a position to pay its current liabilities as and when they become due, out of its quick assets.
(iii) It is otherwise called liquid ratio or acid test ratio.
(iv) It is calculated as follows:
Quick ratio = \(\frac { Quick\ assets }{ Current\ liabilities } \).
Quick assets = Current assets - Inventries - prepaid expenses. higher the Quick ratio better is the short - term financial position of an enterprises.
(i) Automated accounting is an approach to maintain up-to-date accounting records with the aid of accounting software.
(ii) Under manual accounting system entries are made in different books of accounts while accounting software packages sallow manual entry in one field or one place.
Accounting report is a compilation of accounting information that are derived from the accounting records of a business concern. Accounting reports may be classified as routine reports and special purpose reports.
Return Investment = \(\frac{Net\ profit\ before\ interest\ and\ tax}{Capital\ employed}\) \(\times\) 100
= \(\frac{25,000}{1,25,000}\) = x 100 = 20%
Capital employed = Share capital + Reserves and surplus + Long term borrowings
= 70,000 + 25,000 + 30,000 = Rs.1,25,000
Solvency ratios show the long - term financial solvency and measure the enterprises ability to pay interest and long - term liability at maturity. They include:
(i) Debt to Equity Ratio
(ii) Proprietary Ratio
(iii) Total assets to debt Ratio
The firm that produces high value added products or has stable demand will be able to earn more profit and more Good will.
The monopoly condition or limited competition enable the concern to earn high profits which leads to higher value of Goodwill.
The monopoly condition or limited competition enables the concern to earn high profits which leads to higher value of goodwill