ACCOUNTS - CISCE

1 ---------------------------------------- ---------------------------------------- ---------------------------------------- 1 ISC SPECIMEN QUESTION PAPER-2018 ACCOUNTS (Maximum Marks: 80)(Time allowed:Three hours)(Candidates are allowed additional 15 minutes foronlyreading the must NOTstart writing during this time.)---------------------------------- ---------------------------------------- --------------------------------------Pa rt I of Section A is 4 Questions fromPart II of Section Aandany twoquestionsfromeither Section B or Section intended marks for questions or parts of questions are given in the brackets [ ].Transactions should be recorded in the answer calculations should be working, including rough work,should be done on the same pageas, and adjacent to, the rest ofthe APART I (12 Marks) 1[6 2](i)Name the Head and Sub Head under which Premium on Redemption of Debentures account is showninthe Balance Sheet of a company prepared as per Schedule III of the CompaniesAct, 2013.

2 (ii)Giveanyonedifference between General Reserve and Reserve Fund.(iii)When is the balance of Debenture Redemption Reserve transferred to General Reserve?(iv)Giveany twodifferences between Firm s Debts and Private Debts of the partners.(v)State thetwoconditions which must be fulfilled to re-issue the forfeited shares.(vi)Raj and Shyamare partners in a firmhaving no partnership deed. Rajhas advanced`10,000 asloan to the firm. He claims interest at the usual rate of interest of 12% as charged by thebanks to whichShyamdoes giving reason,which of the twois correct in SPECIMEN QUESTION PAPER-2018 PART IIAnswer 2 Vimal, Sanjay and Rusha are partners in a firm sharing profits and losses inproportion to theircapital. Their Balance Sheet as at 31stMarch, 2017, is given below:LiabilitiesAmount(`)AssetsAmount(` )Sundry CreditorsWorkmenCompensation FundEmployees Provident FundCapital ACCOUNTS :Vimal40,000 Sanjay30,000 Rusha30,00010,0003,0007,0001,00,0001,20, 000 Cash at BankSundry Debtors22,000 Less debts(2,000)StockPlant & MachineryLand & BuildingAdvertisement Expenditure5,00020,00020,00030,00040,000 5,0001,20,000[12]Sanjay retired on1stApril, 2017, onthe following terms:(a)Land & Building to be appreciated by 30%.

3 (b)Plant & Machinery to be depreciatedto 70%.(c)Bad debts`3,000 to be written off.(d)The claim,on account of Workmen CompensationFund, wasestimated at`2,000.(e)Sanjay to be paid`45,000 for which sufficient loan be taken from the bank.(f)Vimal and Rusha, in the new firm, to share profits and losses in the ratio of 3:2.(g)It was decided that the advertisement expenditurewould be carried forward in the new firm`sbalance are required to:(i)Pass journal entries onthe date of Sanjay s retirement.(ii)Prepare theOpening Balance Sheetof the new firm on the completion of the transactions.(Show your workings clearly).------------------------------- ---------------------------------------- ---------------------------------------- ---------3 ISC SPECIMEN QUESTION PAPER-2018 Question 3(A)Vineet andPawan arepartners sharing profits and losses in the ratio of 3:2. During the year2016-17, Vineethad made drawings of`10,000 on which, as per the partnership deed, interest@ 5 % had to be charged but was omitted while distributing the profit.

4 [4]You are required to passan adjusting journal entryto rectify the lapse in accounting.(B)You are required to pass thenecessaryjournal entriesto carry out the followingarrangements:[4]Antony and John are partners sharing profits in the ratio of 4 1stApril, 2016,Ronnywas admittedinto their partnershipfor 1/5thsharein the profit which he acquiredfromAntony and John in the ratio of 3:1. Ronny brings in`30,000 as his capital and`20,000 ashis share of the time of Ronny s admission, the firm had anInvestmentFluctuation Reserve of`5,000 which the partners decidedto show even in the of the firm for the year ending 31stMarch, 2017, was Rs 1,00, firmfollowed thefixed capitalmethod.(C)Sara, Sita and Meena were partners in a firm sharing profits and losses in the ratio of 2: 2 30thJune, 2017, whereas the firm closes its books on 31stMarch every to their Partnership Deed Sara s representativeswould be entitled to get shares inthe interim profits of the firm calculated onsales andprofitfor the year 2016-17were`6,00,000 &`1,80,000 respectively andsalesand in the year2017-18, till the date ofher deathamounted to`1,20,000.

5 [4]You are required to:(i)CalculateSara s share of interim profit.(ii)Pass the necessaryjournal entryfor giving Sara her share of interim 4(A)ZenLtd. issued10,000equity shares of`10 each at a premium of`3 per share payable as:[8]On Application`4On Allotment`5 (including premium)On First Call`2 The balance as and when requiredThe public applied for 12,000 shares. The company madepro-rataallotment shareholder who wasallotted900 shares paidthe entire amountwith allotmentwhile another shareholder who hadappliedfor1,200 shares,failed to paytheallotment moneyand on hissubsequentfailure to pay the first call his shares were forfeited shares, 800 were reissued at`7per are required toprepare:(i)Share Allotment SPECIMEN QUESTION PAPER-2018(ii)Securities Premium Reserve account .(iii)Share Forfeiture account .(iv)Calls-in-Arrears account .(B)Moon craftLtd. purchasedmachineryfor`2, 70,000. As per the agreement, the payment is tobe made by issuing sufficient number of 5% Debentures of`100 are requiredcalculatenumber of debenturesto be issued &pass the necessaryjournal entriesin the books of the Company if the saidDebentures are issued:(i)at a discount of 10%.

6 (ii)at a premium of 20%.[4]Question5(A)Tej, Partho and Ginni are in partnership,sharing profits and lossesin the ratio of2:1 the half year ended 31st March, 2017,their capital ACCOUNTS have remainedunchanged at`60,000,`40,000 and`30,000 current account balances on1stOctober, 2016,were:[8]Tej`8, `6, `10, in2016-2017:Tej withdrew`200 at thebeginning of each withdrew`400 atthe end of each withdrew`1,800 during this Deedprovides that:(a)Partners to beallowed interest on capital @ 5% (b)Partners to beallowed or chargedinterest oncurrent accountbalances @ 4% (c)Interest on drawingsto be charged@ 6% (d)Partho to beentitled to a salary of`500 per month.(e)Tejto beentitled to a commission of 5% of the correct net profit of the firmafterchargingsuch thehalf yearended 31stMarch, 2017,the net profit of the firm was`2,07,000aftercharging Partho s salary which had been debited to wages and salaries are required toprepareProfit and Loss Appropriation AccountProfit and LossAppropriation Accountfor thehalfyear ending 31stMarch, SPECIMEN QUESTION PAPER-2018(B)At the time of reconstitution of a partnership firm,goodwill wasvaluedon the basis ofthreeyears purchase of theweighted average profits of the last four profits and losses ofthe preceding four years were.

7 [4]YearProfitWeights2013-14`22,00012014- 15`27,00022015-16`32,00032016-17`35,0004 While valuing the goodwill of the firm it was found that the closing stock ofthe year2015-16 was undervalued by`2, are required to calculate thevalue of goodwillon the date ofreconstitutionof 6(A)Ravi, Samand Tukaiwere in partnership sharing profits and losses in the ratio of 6:5 annual rent due to Sam for using hispersonal property for the use of the business is`9,000 and this is treated as a business the businessare closed annually on partnership deedprovides that the representatives of a deceased partner are entitled to:[8](a)The deceased partner s capital as appearing in the last Balance Sheet.(b)Interest on capital @ 6% per annumto the date of his death.(c)Interest on drawings @ 5%per annum.(d)Hisshare of profitscalculated till the date of his death on the average of the last threeyears profits.(e)Share of goodwillcalculated at two years purchase of the average profits for the lastthree yearspriorto charging the rent butaftercharging interest on profitsof the firmfor the years 2014-15, 2015-16 and 2016-17afterchargingrent andinterest on capital amounted to`62,000,`63,000 and`73,000 30thJune, drawings from 1stApril, 2017 to the date of his deathamounted to`3, capital shown in the Balance Sheet of 31stMarch.

8 2017,was`90, are required toprepareSam s Capital Accountto show the amount due to his estatefrom the SPECIMEN QUESTION PAPER-2018(B)Hari and Kavi are partners sharing profits and losses in the ratio of 3:2. They admit Ravi as apartner who contributes`30,000 as his capital for1/5thshare in the profits of the isdecided that after Ravi s admission, the capitals of the Hari and Kavi will adjusted on the basisof Ravi s share of capital in the business, any surplus or deficiency to be adjusted throughcurrent any adjustmentswere made, thecapitals of Hari and Kavi were:`59,000 and`35,000 the time of Ravi s admission:[4](a)The firm s goodwill was`40,000.(b)General Reserve was`25,000.(c)Loss on revaluation of assets and liabilities was`4, are required topass the journal entriesto adjust the capital of the old 7(A)Sparrow Ltd. purchased its own 100, 10%debentures of`100 each from the open market forcancellation at` are required topassjournal entries for purchase and cancellationof owndebentures.

9 [4](B)Eagle ,000; 10% Debentures of`100 each outstanding as on 31stMarch, debentures are due for redemption on 31stMarch, 2017. The Debenture RedemptionReserve has a balance of`40,000 on 31stMarch, are required topass journal entriesto complete the redemptionof Debentures.[4](C)AjmeraLtd. raised thefollowing loans in the year 2016-17:[4]12% Bank Loan from SBI on 1stApril, 2016:`15,00,00010,000; 10% Debentures of`100 each,redeemableat parin4 equal yearly instalments,on 1stOctober,2016:`10,00,000 The terms of the loans were:(i)The redemptionof Debenturesto begin from30thSeptember, 2017.(ii)Interest on theBank Loan to be paidannuallybut interest on Debentures to be company had not paid the interest, both on the Bank Loan and ontheDebentures,till theBalance Sheet are required to show the above items underEquity and Liabilitiesof the BalanceSheet of the company as at 31stMarch, SPECIMEN QUESTION PAPER-2018 Question 8 Erica, Aditi and Tarini were partners in a firm sharing profits and losses in the ratio of 5:3:2.

10 Due todifference of opinion, they decided to dissolve the partnership with effect from 1stApril, 2017, onwhich date the firm s Balance Sheet was as follows:[12]Balance Sheet ofErica, Aditi and TariniAs at 1stApril, 2017 LiabilitiesAmount(`)AssetsAmount(`)Emplo yees Provident Fund8,000 Cash at Bank20,000 Sundry Creditors10,000 Debtors 22,000 LessProv. for d/d(2,000)20,000 Investment Fluctuation Reserve4,000 StockPlant and Machinery12,00030,000 CurrentAccountsLand & Building45,000 Erica 8,000 Aditi10,00018,000 InvestmentsAdvertisement Suspense A/c35,0003,000 Capital AccountsCurrent AccountErica 60,000 Aditi 40,000 Tarini5,000 Tarini30,0001,30,0001,70,0001,70,000 The following additional information was given:(a)Plant & Machinery costing`20,000 was taken over by Erica at`16,000 and the remainingmachineries realised`9,000.(b)Land & Building realised`42,000.(c)Investments were taken over by Aditi at`28,000.(d)Sundry debtors included a bad debt for`1,000 and the amount was realised from the gooddebtors subject to a cash discount of 10%.