Class 12 Sample Paper 2023 Solutions Accountancy

Class 12 Sample Paper 2023 Solution

Practice Questions - ANSWER KEY
2022-23
SUBJECT ACCOUNTANCY 055
CLASS XII

Q.N Mar
Question
o ks

Part A

(Accounting for Partnership Firms and Companies)

Q.1 D. Ostensible Partner 1

Q.2 A. A Debit of Rs.6,00,000 towards Alex’s salary. 1

Q.3 C. Observations 1 & 2 1

Q.4 A. Goodwill is to be calculated for Incident 1, Incident 2 and Incident 3. 1

Q.5 A. Offer 1 1

Q.6 B. Poornima’s share of profits in both the firms is equal 1

Q.7 A. Rs.12,00,000 , Rs.28,00,000 Rs.10,00,000 1

Q.8 B. Rs.2.16,000 & Rs,1,44,000 1

Q.9 C. 1, 2 & 2 1

Q.1 A. Rs.1,60,000 , Rs.80,000 & Rs.60,000 1
0

Q.1 A. Debit of Rs.4,500 each in Anusha and Vasu Capital accounts. 1
1

Q.1 A. She can be assured of interest on loan even case of loss. 1
2

Q.1 A. Rs.4,000 and Rs.20,000 respectively 1
3

Q.1 D. Reject some of the applications, allot in full to some of the applications and make pro-rata allotment to remaining applicants 1
4

Q.1 A. Increase in capital redemption reserve by Rs.75,000 1
5
OR

A. The amount of application money received is at least Rs.500

Q.1 B. 300 1
6

Q.1 3
7
Sl.No. Particulars Apoorva Sindhu
A Their existing shares 1/2 1/5
2/3 x 3/10 = 1/3 x 3/10 =
B Share acquired by remaining partners 2/10 1/10
New shares of remaining partners (c= a +
C b) 7/10 3/10
D Share gifted by Apoorva 1/2 x 1/4 = 1/8 0
E Share acquired by Aarush (other than gift) 1/2 x 1/8 = 1/16 1/2 x 1/8 = 1/16

F New Shares (c – d - e) 41/80 19/80
New ratio of Apoorva , Sindhu and 41/80 : 19/80 : 20/80 = 41 : 19 :
Aarush 20

Apoorva’s share of profit in the original partnership = 0.5

Apoorva’s share of profits in the new partnership = 0.51

There is a negligible change in Apoorva’s share of profit as compared to the original profit sharing ratio and hence, Sindhu’ s claim is incorrect.

Q.1 - All the partners are jointly and severally responsible. Hence all the partners are responsible to pay for the compensation. – Mutual agency 3
8
There is no distinction between the partners and the partnership firm (No separate legal entity), unlike the company and its shareholders. Since
the total assets of the firm (total of capitals) is insufficient to cover the compensation in full, the shortfall shall be met using personal assets of
the partners.

OR Journals for 3

1.Transfer of assets

2. transfer of liabilities

3. Realisation of assets

4. settlement of liabilities

5. Transfer of loss

6. Transfer of general reserve to partners capital account in profit sharing ratio.

Q.1 3

9
Presentation under fluctuating capital system
Fluctuating capital system
Capital account

Dr Cr
Date Particulars Rashmi Hari Maya Date Particulars Rashmi Hari Maya
Rs Rs Rs Rs Rs Rs
Withdrawal Opening
XX of capital - - 55,000 XX capital 2,50,000 1,35,000 3,50,000
Share of Addition of
XX profits 28,000 28,000 28,000 XX capital 25,000 35,000 -
XX Balance c/f 2,47,000 1,42,000 2,67,000
2,75,000 1,70,000 3,50,000 2,75,000 1,70,000 3,50,000

The balances of all the partners shall be presented on the liabilities side of the balance sheet under the head partners capital.
Fixed capital
System
Fixed capital account
Dr Cr
Date Particulars Rashmi Hari Maya Date Particulars Rashmi Hari Maya
Rs Rs Rs Rs Rs Rs
Withdrawal Opening
XX of capital - - 55,000 XX capital 2,50,000 1,35,000 3,50,000
Addition of
XX Balance c/f 2,75,000 1,70,000 2,95,000 XX capital 25,000 35,000 -
XX

2,75,000 1,70,000 3,50,000 2,75,000 1,70,000 3,50,000

Current capital account
Dr Cr
Date Particulars Rashmi Hari Maya Date Particulars Rashmi Hari Maya
Rs Rs Rs Rs Rs Rs

Share of
XX profits 28,000 28,000 28,000 XX Balance c/f 28,000 28,000 28,000

28,000 28,000 28,000 28,000 28,000 28,000
The fixed capital of all the partners shall be presented on the liabilities side of the balance sheet under the head partners fixed capital. The current
capital of all the partners shall be presented on the asset side of the balance sheet under the head Partners’ current capital.

OR The account is not correct as the rate of interest used by her in the calculations are not in line with the rates of interest prescribed in Table F 3

As per table F, rate of interest on calls in arrears is 12%.

As per Table F, rate of interest on calls in advance is 10%

Interest on calls in arrears – Rs. 840

Interest on calls in advance – Rs. 3,292

Q.2 Sl.no Particulars Case 1 Case 2 Case 3 3
0
A Minimum issue 19,500 19,500 19,500
65,000-45,500
Premium receivable on minimum issue (If
B any) 5,850 - -

C Existing Securities premium 1,000 1,000 1,000

D Total Securities premium 6,850 1,000 1,000

E Premium payable on redemption 6,500 6,500 6,500

F Difference (E-D) -350 5,500 5,500
Number of shares to be issued =
(A+B+F)/Issue price 1,923 3,125 2,500

Q.2 Balance Sheet of Lazada ltd. 4
1 Liabilities Rs Assets Rs
Reserves & Surplus Current Assets
Securities premium 72,000 Cash at bank 12,72,000

Secured loans Miscellaneous expenditure
12% debentures 12,00,000 Loss on issue of debentures 72,000
Debentures redemption premium 72,000
13,44,000 13,44,000
Q.2 Revaluation account 4
2 Amount
Debit Amount (Rs.) Credit (Rs.)
To Furniture 18870 By Buildings 16850
To Inventory 1284 By Trade payables 3804
To Provision for doubtful
debts 500

20,654 20,654

Q.2 Computing Income from Skyline – 1 mark 6
3
Compute Monica’s share of profit – Rs.3,59,559

Compute interest on Monica’s balance – Rs.22,032

The higher of the two shall be her income.

Journal in Skyline books – 1 mark

Monica A/c – 3,59,559

To Bank - 3,59,559

(Being Monica’s share of profit paid)

Balance to be funded by drawings/Loan = Rs.2,40,441 – 0.5 marks

Interest on drawings = Rs.5,410 – 1 mark

Interest on Loan = Rs.6,411.75 – 0.5 marks

Drawings is a more economical alternative

Journal entry for Drawings and interest on drawings – 2 marks

OR Profit and loss Appropriation Account 6
Dr Cr
Particulars Rs Particulars Rs

To Interest on capital 40,500 By Net Profit 5,49,091
By Interest on drawings
Ramesh – 21,500 (Ramesh) 780
Shekar - 19,000

To Salary (Ramesh) 3,36,000
To commission
(Ramesh) 43,927
To Commission
(Shekar) 11,697
To Profit transferred
to 117,747
Ramesh – 58,873
Shekar – 58,874

Computation of net profit – 1 mark

Amount
Particulars (Rs.)
Net profit before
adjustments 10,00,000

Less: Manager's Salary 2,16,000

Less: Rent 1,80,000
Less: Manager's
Commission 54,909
Profit to be transferred to
P&L appropriation account 5,49,091

Computation of net profit. Manager’s salary, Commission and Rent are charges against the profit and not appropriations out of profits. Hence these
items have been taken to compute net profit and not debited under the P&L Appropriation account.

Q.2 1 mark for each classification with appropriate explanation. 6
4
1. – Dissolution of partnership – Insolvency of a partner OR Subject to contract between the partners, this could also result in dissolution of the
firm – On the happening of certain contingencies. Students can choose either of the views.

2. – Dissolution of the firm – Compulsory dissolution, when the business of the firm becomes illegal.

3. - Dissolution of partnership – Completion of venture

4. - Dissolution of partnership – Death of a partner OR Subject to contract between the partners, this could also result in dissolution of the firm –
On the happening of certain contingencies. Students can choose either of the views.

2 marks for stating any 2 distinctions.

Termination of business

Settlement of assets and liabilities

Court’s intervention

Any other suitable distinction.

Q.2 Working note 6
5 Shareholders Money received on Money not received on
First Final First Final
Application Allotment call call Allotment call call
Fall 2,000 0 0 0 2,000 2,000 2,000
Winter 4,000 4,000 0 0 0 4,000 4,000
Spring 3,000 3,000 3,000 0 0 0 3,000
Total 9,000 7,000 3,000 0 2,000 6,000 9,000
Money 4 6 6 4 6 6 4
Receivable 36,000 42,000 18,000 0 12,000 36,000 36,000

Q.2 In the books of Success Ltd. 6
6 Journal entries
Date Particulars Dr.(Rs.) Cr.(Rs.)
A Bank A/c 22,50,000
To Debenture application A/c 22,50,000
(Being the application money received on
10,000 debentures @ Rs.225 each)

Debentures Application A/c 22,50,000
Discount on issue of Debentures A/c 2,50,000
To 6% Debentures A/c 25,00,000
(Being the issue of 10,000 6% Debentures @

90%)

B Fixed asset A/c 8,00,000

To Vendor A/c 8,00,000
(Being the purchase of fixed assets from
vendor)

Vendor A/c 8,00,000
Discount on Issue of Debentures A/c 4,50,000
To 6% Debentures A/c 12,50,000
(Being the issue of debentures of Rs. 12,50,000
to vendor to satisfy his claim)

C Bank A/c 12,00,000
To Bank loan A/c 12,00,000
(Being a loan of Rs.12,00,000 taken from bank
by issuing debentures of
Rs.12,50,000 as collateral security)

No entry is made in the books of account of the company at the time of making issue of such debentures. In the Balance Sheet the fact that the
debentures being issued as collateral security and outstanding are shown under the respective liability

or Working notes 6
1 Total number of shares applied by Alex 8000*80000/70000=9143

2 Amount due but not paid by Alex
Application money received 9143*6=54858
Application money due on share allotted 48000

Excess application money 6858
Allotment money due on shares allotted 48000

Allotment money due but not received 41142

3 Calculation of allotment money received later on
Total allotment money due 240000
Less: money already received during application
stage 60000
Less: Allotment money not received from Alex 41142
138858
Part B :- Analysis of Financial Statements Option -I

Q.2 A. Cash from Operating activity 1
7

OR A. Cash and cash equivalents decreased by Rs.17,10,000 1

Q28 A. Quick ratio can be different from current ratio due to the presence of advance income tax payment 1

Q.2 A. Obtain discount from vendors 1
9

Q.3 C. Zeus and Thor both are correct 1
0
OR

A. Decrease in inventory by Rs.25,000

Q.3 A. Food sells more quickly than luxury watches and belts 3
1
OR Food is in greater demand than luxury watches and belts

OR Food store will probably have a lower value of inventory due as it is perishable in nature OR Food is cheaper than clothing
OR other reasonable answer

B. Different type of goods EITHER Food has a lower gross profit margin than luxury watches and belts
OR The food store is cutting prices to sell more goods
OR other reasonable answer

C. different accounting policies
different size of business
different type of goods sold
other reasonable answer

Q32 3

1. Cashflow from Operating Activities 2635
2. Cash flow from Investing activities 105
3. Cash flow used in financing activities -820
4. Cash and cash equivalents at the end of the
period 2080

Adjustments to be made for

Depreciation
Flood relief
Income tax
paid
Interest paid
Dividend paid
Share capital

Q.3 1. A cash flow statement when used along with other financial statements provides information that enables users to evaluate changes in net 4
3 assets of an enterprise, its financial structure (including its liquidity and solvency) and its ability to affect the amounts and timings of cash flows in
order to adapt to changing circumstances and opportunities.

2. Cash flow information is useful in assessing the ability of the enterprise to generate cash and cash equivalents and enables users to develop
models to assess and compare the present value of the future cash flows of different enterprises.

3. It also enhances the comparability of the reporting of operating performance by different enterprises because it eliminates the effects of using
different accounting treatments for the same transactions and events.

4. It also helps in balancing its cash inflow and cash outflow, keeping in response to changing condition. It is also helpful in checking the accuracy
of past assessments of future cash flows and in examining the relationship between profitability and net cash flow and impact of changing prices

OR

Neena should choose company A. Higher equity and lower debt indicates safety for the investor. A higher interest coverage ratio indicates higher
safety of interest.

Most suitable workings – Debt-equity ratio & Interest coverage ratio.

Alternate workings - Total Assets to Debt ratio or proprietary ratio or Debt to capital employed and Interest coverage ratio

Working notes

Company A Company B
Particulars (Rs.) (Rs.)
Debt-equity ratio 1.5 : 1 2.85 : 1
Total Assets to Debt ratio 1.73 : 1 1.37 : 1
proprietary ratio 0.38 : 1 0.26 : 1
Debt to capital employed ratio 0.6 : 1 0.74 : 1
Interest coverage ratio 4 times 1.35 times

Q.3 6
4

Percentage of
Revenue from
operations
Particulars 2019 (Rs. '000) 2020 (Rs. '000) 2019 2020
Revenue from Operations 480000 760000 100% 100%
Direct expenses 192000 311600 40% 41%
Gross profit 288000 448400 60% 59%
Salary & Bonus 108000 201000 23% 26%
Freight cost 57600 212800 12% 28%
Other indirect costs 14400 22420 3% 3%
Net Profit 108000 12180 23% 2%

There is a profitability issue as the profit margins in 2020 is lower than the profit margins in 2019.
Therefore, the profit is less than budgeted.
The Gross profit has decreased by 1% in 2020 vis-à-vis 2019, this decrease is marginal and hence
negligible.
Therefore, the profitability issue is not due to the increase in Direct cost. However, The direct costs
should be monitored closely to avoid further decrease in Gross profit
The Net Profit has fallen sharply by 21% in 2020 vis-à-vis 2019.
The main cause for a sharp decline in net profit can be attributed to increase in indirect costs such as
Freight Cost and Salary & Bonus.
The increase in Salary and Bonus in 2020 could be due to the bonus distributed to Mr.Sanjeeb, which
sums upto 10%of the revenue
The freight cost has increased by 16% in 2020 vis-à-vis 2019 becoming the main reason for GAAL's

profitability issues.

Solution

Award bonus to Mr.Sanjeeb based on Net profit of the company instead of revenue.
Identify reasons for increase in Freight cost and renegotiate the freight charges with the vendors.
Quarterly/Monthly review of financial performance to identify deviations from the budget.

Part B :- Computerised Accounting

Q27 1

A.
Q28 A. =COUNTIF(C10:G10,">9:15") 1
.

Q29 A. =IF(A1<=150,A1*500,(((A1-150)*800)+75000)) 1

OR

A. #VALUE!

Q30 B. =SUM(A1:A5)/(10-10) 1
.
OR
A. A foreign key of a table should be the primary key of another table.

Q31 Sl.No A B 3
I am used to avoide changes in row or
column references when a formula is moved
or copied from one cell to another. Who am
1 I? Dollar ($) - Absolute
A numerical value will be treated as text if
2 the number is preceeded by me Apostrophe ( ‘ )
I can be used to join text items to achieve
the same result as a =CONCATENATE
3 function Ampersand ( & )
I am a friend to an investor looking forward
4 to collect his periodic interest ACCRINT
I make it easy for you to calculate your
5 periodic payment for an annuity PMT
I am a friend to an investor looking to
6 estimate his cumulative interest CUMIPMT

Q32 Every accounting software ensures data security, safety and confidentiality. Therefore every, software should provide the following: 3

1.Password Security

2. Data Audit

3. Data Vault Password

Security: Password is a mechanism, which enables a user to access a system including data. The system facilitates defining the user rights
according to organisation policy. Consequently, a person in an organisation may be given access to a particular set of a data while he may be
denied access to another set of data. Password is the key (code) to allow the access to the system.

Data Audit: This feature enables one to know as to who and what changes have been made in the original data thereby helping and fixing the
responsibility of the person who has manipulated the data and also ensures data integrity.

Data Vault: Software provides additional security through data encryption

Q33 DATA VALIDATION feature can be implemented in the Time Tracking sheets to resolve the above issue. 4
.
Data validation is a feature to define restrictions on type of data entered into a cell. It can be used to configure data validation rules for cells data
that will not allow users to enter invalid data, There may be warning messages when users tries to type wrong data in the cell. The messages also
guide users to what input is expected for the cell, and instructions to correct any errors.

This results in the data being accurate and consistent with the Billing database.

A drop-down list can be created by predefining the Names of the employees, projects and clients, this ensures that the employees enter/choose
accurate names thereby reducing inconsistencies.

A Date and time validation feature can be introduced to ensure that the date and time is recorded only in the accepted date format.

Hence, the Data Validation feature of excel can be used to resolve the inconsistency issues faced by the Billing department

OR

any 3

A PivotTable report is an interactive way to quickly summarise large amounts of data. Use a PivotTable report to analyse numerical data in depth
and to answer unanticipated questions about data. A PivotTable report designed for:

1. Querying large amounts of data in user-friendly ways. Sub totalling and aggregating numeric data, summarising data by categories and
subcategories, and creating custom calculations and formulas.
2. Expanding and collapsing levels of data to focus on results, and providing from details to the summary of data for areas of interest.
3. Moving rows to column or columns to rows (or “pivoting”) to see different summaries of the source data.
4. Filtering, sorting, grouping, and conditionally formatting the most useful and the interesting subset of data to enable us to focus on the
information that we want.
5. Presenting concise, attractive, and annotated online or printed reports.
6. The use of a PivotTable report is to analyse related totals, when we have a long list of figures to sum and to compare several facts about
each figure.

Q34 A good and reliable CAS software should have the following 5 salient features 6

1 SIMPLE AND INTEGRATED CAS

CAS designed to automate and integrate all the business operations. The CAS should be integrated with enhanced MIS (Management Information
System), Multi-lingual and Data Organisation capabilities to simplify all the business processes of the organisation easily and cost-effectively

It may be simple for individual process but due to the lack of uniformity and compatibility with one another the overall CAS software is not
simple and it cannot be integrated.

2 TRANSPARENCY AND CONTROL

CAS should increase data accessibility and enhances user satisfaction. With computerised accounting, the organisation should greater
transparency for day-to-day business operations and access to the vital information.

However, in this case CAS is accessible only by 5 employees, this severely restricts data accessibility and transparency

3 ACCURACY AND SPEED

CAS must provide user-definable templates (data entry screens or forms) for fast, accurate data entry of the transactions. It also helps in
generalising desired documents and reports. In this case the new CAS is ensuring accuracy and speed individually for that particular business
process.

4 SCALABILITY

CAS should enable change in the volume of data processing in tune with the change in the size of the business. The software can be used for any
size of the business and type of the organisation. There is no clarity regarding the scalability of the CAS. In the light of restricted number of users,
it can be assumed that the increase in volume of data processing could lead to additional costs of running the CAS therefore increasing the
overall cost of CAS.

5 RELIABILITY

CAS has to make sure that the generalised critical financial information is accurate, controlled and secured. In this case, since the CAS cannot be
integrated and there is a severe restriction on its access and transparency, the financial information provided cannot be reliable as it cannot be
vouched for its accuracy, control and security.