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AHSEC Class 12: Accountancy Solved Question

Papers' 2012 | AHSEC | SOLVED QUESTION PAPERS
by Education e-learning platforms - April 06, 2021
Kumar Nirmal Prasad

AHSEC ACCOUNTANCY SOLVED QUESTION PAPERS

2012 (ACCOUNTANCY)
Full Marks: 100
Pass Marks: 30, Time: Three Hours

Q.1: (A) Fill in the blanks with appropriate word: 1x4=4

(i) Income and Expenditure Account records transactions of Revenue nature.
(ii) On admission, unrecorded assets brought into account are credited to revaluation account.
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(iii) A company 다운로드하기
can issue shares at a discount only if at least one year has elapsed since the
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company became entitled to commence the business.
 (iv) If a partner takes over an asset, such partner’s capital accounts is debited.
(B) Choose the correct alternative: 1x2=2
(i) Subscription received in advance is treated as:
(a) An income
(b) An asset
(c) A liability
(d) Capital
(ii) Profit on revaluation of assets and liabilities is shared by the old partners in:
(a) Sacrificing ratio
(b) New ratio
(c) Old ratio
(d) Gaining ratio
(C) State whether the following statements are true or false. 1x2=2
(i) Dissolution of firm and dissolution of partnership are two distinct legal concepts. True
(ii) Discount on reissue of forfeited shares cannot exceed the amount received on forfeited
shares. True
Q.2: Give the adjustment entry required for recording interest on capital when Capital Account is
maintained under Fixed Capital method. (2)
Ans: Interest on Capital Account Dr.
To Partners’ Current a/c
Q.3: What is meant by ‘Gaining Ratio ‘on retirement of a partner? (2)
Ans. Gaining Ratio: Gaining Ratio is calculated at the time of retirement or death of partner. It is the
excess of new ratio over old ratio of old partners except retire or dead partner. Gaining Ratio = New
Ratio - Old Ratio.
Q4: What is meant by ‘Loss on issue of debenture’? (2)
Ans. When debentures are redeemable at a premium, the extra amount payable over and above the
nominal value on redemption is called “Loss on Issue of Debenture”. Discount on issue of shares is also
added at the with loss on issue of debenture.
Q.5: What are the types of Financial Statements Analysis? (2)
Ans: Types of financial Statement analysis:
a) External analysis: This analysis is performed by outside parties such as trade creditors,
investors, suppliers of long term debt etc.
b) Internal analysis: This analysis is performed by the corporate finance and accounting
department and is more detailed than external analysis.
c) Horizontal analysis: This analysis compares the financial statements viz., profit and loss
accounts and balance sheet of previous year along with the current year.
d) Vertical analysis: This analysis converts each element of the information into a percentage of
the total amount of statement so as to establish relationship with other components of the same
statement.
e) Trend analysis: This analysis compares ratios of different components of the financial
statements related to different period to those of a base year.
Q.6: What do you mean by Ratio Analysis? (2)
Ans. Ratio analysis is one of the techniques of financial analysis to evaluate the financial condition and
performance of a business concern. Simply, ratio means the comparison of one figure to other relevant
figure or figures.
According to Myers, “Ratio analysis of financial statements is a study of relationship among
various financial factors in a business as disclosed by a single set of statements and a study of trend of
these factors as shown in a series of statements."
Q.7: Mention three Features of Receipts and Payments Accounts. (3)
Ans. Following are the main features of Receipts and Payments Account:
a) It is prepared at the end of the year taking items from the cash book.
b) It is the summary of all cash transactions of a year put under various heads.
c) It records all cash transactions which occurred during the year concerned irrespective of the
period they
Q.8: Mention three situations when valuation of goodwill becomes necessary. (3)
Ans. Reasons for Valuation of Goodwill: In case of a partnership firm, the need for valuation of goodwill
may arise under the following circumstances:
· When a new partner is admitted,
· When a partner retires or dies,
· When the firm is sold as a going concern,
· When there is a change in profit sharing ratio among partners,
· When partnership firm is sold to a company.
Q.9: Write three points of distinction between Shares and debenture. (3)
Ans: Refer Q.N. 22 (Or), asked in 2017 exam
Q.10: Give three characteristics of an ideal financial statement. (3)
Ans. Characteristics of Ideal financial Statements are:
a) Understandability: The information must be readily understandable to users of the financial
statements.
b) Relevance: The information must be relevant to the needs of the users, which is the case
when the information influences the economic decisions of users.
Financial news subscriptions
c) Reliability: The information must be free of material error and bias, and not misleading.
d) Comparability: The information must be comparable to the financial information presented
for other accounting periods.
Q.11: Give three objectives of Ratio Analysis. (3)
Ans. Objectives of Ratio analysis
1. To know the area of the business which need more attention.
2. To know about the potential areas which can be improved with the effort in the desired
direction.
3. To provide a deeper analysis of the profitability, liquidity, solvency and efficiency levels in the
business.
4. To provide information for decision making.
5. To provide information for inter-firm and intra-firm comparison.
Q.12: From the following information, ascertain the amount of subscription to be credited to the
Income and Expenditure Account for the year 2012. (5)
(i) Subscription received during the year Rs 11,750 (including Rs 1000 for 2011 and Rs 500 for
2013)
 (ii) Subscription received in 2011 for 2012 Rs 700
(iii) Subscription outstanding on 31st December 2012 Rs 900
Solution: Calculation of Subscription for the year 2012
Subscription received during the year 11,750
Less: Subscription for 2011 received in 2012 (1,000)
Less: Subscription for 2013 received in 2012 (500)
Add: Subscription received in 2011 for 2012 700
Add: Subscription outstanding on 31st Dec 2010 900
11,850
OR
Give five points of Distinction Existing between Receipt and Payments Accounts and Income and
Expenditure Account. (5)

Ans. Difference between Receipts and Payments Account and Income and Expenditure Account
Basic Receipt and Payment Account Income and Expenditure Account
1. Nature It is a Real Account It is nominal Account.
2. Recording It records receipt and payments of It records incomes and expense of
both capital and revenue nature. revenue nature only.
3. Period of It records the items received or paid It includes expenses or incomes relating to
items during the current year, whether current year only.
relating to past, present or future
periods.
4. Non cash It ignores non-cash items like It records non-cash items also.
items depreciation, credit purchase, credit
sales etc.
5. Balance of It usually shows a debit balance. It may show a debit or a credit balance.
account

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ALSO READ (AHSEC ASSAM BOARD CLASS 12):

1. AHSEC CLASS 12 ACCOUNTANCY CHAPTERWISE NOTES

2. AHSEC CLASS 12 ACCOUNTANCY IMPORTANT QUESTION (THEORY)

3. AHSEC CLASS 12 ACCOUNTANCY IMPORTANT QUESTION BANK (PRACTICAL)

4. AHSEC CLASS 12 ACCOUNTANCY PAST EXAM PAPERS (FROM 2012 TILL DATE)

5. AHSEC CLASS 12 ACCOUNTANCY SOLVED QUESTION PAPERS (FROM 2012 TILL DATE)

6. AHSEC CLASS 12 ACCOUNTANCY CHAPTERWISE MCQS

********************************************
Q.13: A and B are partners sharing profits in the ratio of 5:4. They admit C in the firm for 1/4th Share of
profit. C takes 3/16th from A and 1/16th from B. C brings in Rs 25,000 as capital and Rs 8,000 as premium
for goodwill. The partners withdraw 40% of their respective share of premium. Pass the necessary
Journal entries on C’s admission. (5)
Solution:
Journal Entries
In the books of firm
Particulars L/f Amount Amount
Dr. Cr.
Cash A/c Dr. 33,000
To C’s Capital A/c 25,000
To Premium for Goodwill A/c 8,000
(Being the capital and premium for goodwill brought in cash)
Premium for Goodwill A/c Dr. 8,000
To A’s Capital A/c 6,000
To B’s Capital A/c 2,000
(Being the premium for goodwill distributed in Sacrifice ratio)
A’s Capital A/c Dr. 2,400
B’s Capital A/c Dr. 800
To Cash A/c 3,200
(Being the 40% of Premium withdrawn)
Working Note:
Calculation of Sacrifice ratio: Sacrificing Ratio = 3/16 : 1/16 = 3 : 1
OR
What is super profit? What are the steps to be followed for valuation of goodwill under super profit
method? 1+4=5
Ans. Super Profit Method: Super Profits means profits earned in excess of the normal Profit, i.e., Actual
Profit –Normal. Normal profits mean the profit which the firms could normally earns in a particular
business.
Under this method, the following steps are to be followed for calculation of goodwill:
ü Calculate average normal profit of business as mentioned above
ü Calculate normal profit
ü Calculate super profit. Super profit is the excess of average normal profit over normal profit
ü Calculate goodwill = super profit x no. of year’s purchase
Q.14: Can a company issue shares at a premium? If so, state the purpose for which the share premium
account can be utilized? (5)
Ans: If Shares are issued at a price, which is more than the face value of shares, it is said that the shares
have been issued at a premium. The Company Act, 2013 does not place any restriction on issue of shares at a
premium but the amount received, as premium has to be placed in a separate account called Securities
Premium Account.
Under Section 52 of the Company Act 2013, the amount of security premium may be used only
for the following purposes:
a) To write off the preliminary expenses of the company.
b) To write off the expenses, commission or discount allowed on issued of shares or debentures
of the company.
c) To provide for the premium payable on redemption of redeemable preference shares or
debentures of the company.
d) To issue fully paid bonus shares to the shareholders of the company.
e) In purchasing its own shares (buy back).
OR
Distinguish between Equity share and Preference shares giving five points of differences.

Ans. Difference between Equity Shares and Preference Shares

Basis of Difference Preference Share Equity Share

a) Right of Preference shares are paid dividend Equity shares are paid dividend out
Dividend before the Equity shares. of the balance of profit available
after the dividend paid to preference
shareholders.

b) Rate of Rate of dividend is fixed. Rate of dividend is decided by the

Dividend Board of Directors, year to year
depending on profits.

c) Convertibility Preference Shares may be converted Equity shares are not convertible.
into Equity shares, if the terms of issue
provide so.

d) Voting Right Preference shareholders do not carry Equity shareholders have voting
the voting right. They can vote only in rights in all circumstances.
special circumstances.

e) Redemption of Preference shares may be redeemed. A company may buy-back its equity
Share Capital shares.

Q.15: Show by means of Journal entries how you will record the following issue: (5)
(a) A. Ltd. Issues 6,000, 10% debenture of Rs 100 each at a discount of 5%, redeemable at the end of 5
year at par.
(b) B. Ltd. issue 7,000, 11% debenture of Rs 100 each at par, redeemable at the end of 5 year at a
premium of 5%.
(c) X. Ltd. issue 8,000, 12% debenture of Rs 100 each at a discount of 5%, redeemable at the end of 5 year
at premium of 5%.
Solution:
 Journal Entries
In the books of A Ltd.
Particulars L/f Amount Dr. Amount
Cr.
(a) At the time of Issue
Bank A/c Dr. 5,70,000
Discount on issue of debentures A/c Dr. 30,000
To 10% Debenture A/c 6,00,000
(Being the 6000 10% Debentures issued at a discount of 5%)
At the time of redemption
10% Debentures A/c Dr. 6,00,000
To Bank A/c 6,00,000
(Being the 6000 10% Debentures redeemed at par)
Journal Entries
In the books of B Ltd.
Particulars L/f Amount Dr. Amount
Cr.
(b) At the time of Issue
Bank A/c Dr. 7,00,000
Loss on Issue of Debentures A/c Dr. 35,000
To 11% Debenture A/c 7,00,000
To Premium on Redemption of Debentures A/c 35,000
(Being the 7000 11% Debentures issued at par, but
redeemable at a premium of 5%)
At the time of redemption
11% Debentures A/c Dr. 7,00,000
Premium on redemption of Debentures A/c Dr. 35,000
To Bank A/c 7,35,000
(Being the 7000 11% Debentures redeemed at a premium of
5%)
Journal Entries
In the books of C Ltd.
Particulars L/f Amount Dr. Amount
Cr.
(c) At the time of Issue
Bank A/c Dr. 7,60,000
Loss on Issue of Debentures A/c Dr. 80,000
To 12% Debenture A/c 8,00,000
To Premium on Redemption of Debentures A/c 40,000
(Being the 8000 10% Debentures issued at a discount of 5%,
but redeemable at a premium of 5%)
At the time of redemption
12% Debentures A/c Dr. 8,00,000
Premium on redemption of Debentures A/c Dr. 40,000
To Bank A/c 8,40,000
(Being the 8000 12% Debentures redeemed at a premium of
5%)
OR
What is meant by redemption of debenture? State any three methods of redemption of debenture.
(2+3=5)
Ans: Meaning of Redemption of Debentures: Redemption of debenture is the discharge of debenture
liability. It can be done either by repaying the money to debenture holders or converting the debenture
into shares. The conditions of redemption are clearly stated at the time of issue of debenture in the
prospectus. Debentures can be redeemed at par, premium or discount as per the terms of issue. The
period of maturity, redemption amount, yield on redemption etc. will be mentioned in the prospectus. In
case the non convertible debentures proposed to be rolled over (repayment extended for an additional
period), a compulsory option should be given to the debenture holders who wish to withdraw from the
debenture programme, as per the guidelines issued by SEBI.
Methods of Redemption of Debentures
i) Redemption In lump-sum, at the end of stipulated period: Under this method the entire
debentures are redeemed at the stipulated date stated in the prospectus for the issue of debentures. The
drawback of this method is that the company has to arrange a large amount at the time of redemption.
ii) By Draw of Lots: Under this method the company does not redeem all the debentures at the
same time. Instead it will call back only a portion of its debentures in the market for redemption each
year. The company selects the debentures of a predetermined value, by drawing lot and they are
redeemed that year.
iii) By Purchasing in the Open Market: Debentures can be redeemed by purchasing them from the
open market. If a company finds its debentures are available in the open market at cheap rate it will
purchase those debentures and cancel them.
Q.16: Name the major headings under which the liabilities side of a company’s Balance Sheet is
organised and presented. (5)
Ans:
Proforma of Balance Sheet
Name of the Company …………………………………….
Balance Sheet as at……………………………………..
Particulars Note Amount Amount
No. (Current (Previous
Year) Year)
I. EQUITY AND LIABILITIES
(1) Shareholders’ Funds
(a) Share capital
(b) Reserves and surplus
(c) Money received against share Warrants
(2) Share application money pending allotment
(3) Non – current liabilities
(a) Long term borrowings
(b) Deferred tax liabilities (net)
(c) Other long term liabilities
(d) Long term provisions
(4) Current liabilities
(a) Short term borrowings
(b) Trade payables
(c) Other current liabilities
(d) Short term provisions
Total
II ASSETS
(1) Non-Current Assets
(a) Fixed assets
(i) Tangible assets
(ii) Intangible assets
 (iii) Capital work in progress
(iv) Intangible assets under development
(b) Non-current investments
(c) Deferred tax assets (net)
(d) Long term loans and advances
(e) Other non-current assets
(2) Current Assets
(a) Current investments
(b) Inventories
(c) Trade receivables
(d) Cash and cash equivalents
(e) Short term loans and advances
(f) Other current assets
Total
OR
Discuss any five limitations of Financial Statements
Ans. Limitations of financial statements:
Financial Statements suffers from various limitations which are given below:
(i) Historical Records: The information given in these statements is historic in nature and does
not reflect the future.
(ii) It Ignores Price Level Changes: Business transactions and events are recorded at historical
cost and changes in prices over the years are ignored.
(iii) Qualitative aspect Ignored: Financial statements considered only those items which can be
expressed in terms of money. Financial Statements ignores the qualitative aspect.
(iv) Not free from Bias: Financial statements are largely affected by the personal judgments of
the accountant.
(v) Variation is accounting practices: Different firms follow different accounting practices.
Therefore, a meaningful comparison of their financial statements is not possible.
Q.17: Prepare a comparative income Statements of Sunny Ltd. with the help of the following
information. (5)
Particulars 2011 (Rs) 2012 (Rs)
Sales 6,00,000 8,00,000
Cost of Goods sold 40% of sales 50% of Sales
Administrative expenses 20% of gross profit 15% of gross profit
Income Tax 50% 50%
Solution:
Comparative Income Statement
Particulars 2009 2010 Absolute change Percentage
change
Sales 6,00,000 8,00,000 2,00,000 33.33
Less: Cost of goods sold (2,40,000) (4,00,000) (1,60,000) 66.67
Gross Profit 3,60,000 4,00,000 40,000 11.11
Less: Administrative 72,000 60,000 (12,000) (16.67)
Expenses
Operating Profit 2,88,000 3,40,000 52,000 18.05
Less: Income Tax – 50% 1,44,000 1,70,000 26,000 18.05
1,44,000 1,70,000 26,000 18.05
OR
What do you understand by Financial Statement Analysis? Discuss its importance to management.
(Any four points). (1+4=5)
Ans: Financial Statement Analysis: It is the process of identifying the financial strength and weakness of
a firm from the available accounting and financial statements. The analysis is done by properly
establishing the relationship between the items of balance sheet and profit and loss account.
In the words of Myer “Financial Statement analysis is largely a study of relationship among the
various financial factors in a business, as disclosed by a single set of statements, and a study of trends of
these factors, as shown in a series of statements.”
In simple words, analysis of financial statement is a process of division, establishing relationship
between various items of financial statements and interpreting the result thereof to understand the
working and financial position of a business.
Q.18: Ascertain Cash Flows from operating activities under the Direct Method from the Following
data Related to the accounting year 2010 – 11 (5)
Total sales: 44,000 (Cash Rs 4,000, Credit Rs 40,000)
Cash received from customers: 35,000
Closing Account Receivables: 8,000
Cash paid to Suppliers: 42,000
Cash paid to employees: 7,000
Furniture purchased from (M/s. Decorators on credit): 9,000
Income tax paid: 3,000
Donation paid: 1,000
Office expenses, total Rs 6,000, paid: 3,000
Solution:
Cash Flow from Operating Activities (Direct Method)
Particulars Amount
Cash Sales 4,000
Cash Received from customer 35,000
Cash paid to suppliers (42,000)
Cash paid to employees (7,000)
Office expenses (3,000)
Donation paid (1,000)
(14,000)
Less: Income Tax paid (3,000)
Cash used from operating activities (17,000)
OR

What is Cash Flow Statement? Briefly explain any four objectives of preparing a Cash Flow Statement.
(1+4=5)
Ans: Cash Flow Statement: Cash­ flow is made up of two words i.e. Cash and Flow, whereas Cash means
cash balance in hand including cash at bank balance, and Flow means changes (which may be increase or
decrease) in the cash movements of the business. Cash Flow Statement is simply a summary of cash
receipts and payments whereby reconciling the opening cash balance with the closing cash including
bank balances in done.
Objectives of Cash Flow Statement
The Cash Flow Statement is prepared because of number of merits, which are offered by it. Such
merits are also termed as its objectives. The important objectives are as follows:
Ø To Help the Management in Making Future Financial Policies: The management can make its future
financial policies and is in a position to know about surplus or deficit of cash.
Ø To Help in taking Dividend Decisions: Cash Flow Statement is very helpful in declaring dividends
etc.
Ø To Help in devising the cash requirement: Cash flow statement is helpful in devising the cash
requirement for repayment of liabilities and replacement of fixed assets.
Ø To Helps in predicting sickness of the business: Cash flow is helpful in predicting sickness of the
business with the help of different ratios.
Q.19: Choudhury and Barua are partners in a firm sharing profit and losses in the ratio 50:50
respectively. The Trial Balance of the firm as on 31st March, 2011 was as follows:
Trial Balance
Particulars Amount Particulars Amount
Machinery 51,000 Capital Accounts:
Furniture 4,500 Choudhury 40,000
Building 45,000 Barua 40,000 80,000
Debtors 31,500 Sundry creditor 32,500
General expenses 460 Bank overdraft 12,000
Insurance 800 Provision for doubtful debt 1,800
Salaries 8,400 Wages outstanding 150
Bad debts 450 Trading Account(Gross Profit) 74,070
Cash in hand 90
Cash at bank 420
Stationery 900
10% investment (1-4-2010) 15,000
Drawings:
Chaudhury 9,000
Barua 12,000 21,000
Closing stock 21,000
2,00,520 2,00,520

Prepare Profit and loss Account, Profit and Loss Appropriation Account for the year ended 31st March,
2011 and a Balance Sheet as at that date after taking into consideration the following.
(a) Outstanding Expenses – Salaries Rs 300, Interest on Bank overdraft Rs 225
(b) Machine worth Rs 15,000 purchased on 1st Oct, 2010.
(c) Provide depreciation on machinery and furniture @ 10% p.a. and on Building @ 21/2 % p.a.
(d) Interest on capital to be allowed @ 10% p.a.
(e) Prepaid Insurance Rs 150.
(f) Partners are entitled to salary of Rs 1,000 per annum each.
Solution:
Profit & Loss A/c
For the year ended 31-3-2011
Particulars Amount Particulars Amount
To Depreciation: By Gross profit 74,070
Building 1,125 By Interest on Investment 1,500
 Machinery 4,350 By Provision for d/debt 1,800
Furniture 450 5,925
To General Expenses 460
To Insurance 800
Less: Prepaid 150 650
To Salaries 8,400
Add: Outstanding 300 8,700
To Bad debt 450
To Stationery 900
To Interest on B/Overdraft 225
To Net Profit 60,060
77,370 77,370
Profit & Loss Appropriation A/c
For the year ended 31-3-2011
Particulars Amount Particulars Amount
To Interest on capital By Net Profit 60,060
Choudhury 4,000
Barua 4,000 8,000
To salary
Choudhury 1,000
Barua 1,000 2,000
To Partners Capital A/c
Choudhury 25,030
Barua 25,030 50,060
60,060 60,060
Partner’s Capital A/c
Particulars Choudhury Barua Particulars Choudhury Barua
To Drawings 9,000 12,000 By Balance b/d 40,000 40,000
To Balance c/d 61,030 58,030 By Interest on Capital 4,000 4,000
By P/L Appropriation 25,030 25,030
A/c 1,000 1,000
By Partner’s Salary
70,030 70,030 70,030 70,030
Balance Sheet
As on 31-03-2011
Liabilities Amount Assets Amount
Capital A/c: Building 45,000
Choudhury 61,030 Less: Depn 1,125 43,875
Barua 58,030 1,19,060 Machinery
Outstanding Salary 300 51,000
Sundry Creditors 32,500 Less: Depn
Bank Overdraft (36,000 x 10/100 = 3,600) 46,650
12,000 12,225 (15,000 x 10/100 x 6/12 =750)
Add: Interest on B/Overdraft 150 4,350 4,050
225 Furniture 4,500 31,500
Wages Outstanding Less: Depn 450 90
Debtors 420
Cash in hand
Cash at bank 16,500
10% Investment 150
15,000 21,000
Add: Interest on investment
1,500
Prepaid Insurance
 Closing stock
1,64,235 1,64,235

Q.20: Ashok publications Ltd. issues 3,000 shares of Rs 10 each, payable as follow: (8)
On Application Rs 2
On Allotment Rs 3
On first call Rs 2 And the balance when required.
3,200 shares were applied for, application for 3000 was accepted by the Directors and the balance
application was rejected and money returned. Allotment money was duly received and first call was
received on 2950 shares. Pass journal entries in the books of the company for the above transactions.
Solution:
Journal Entries
In the books of Ashok Publications Ltd.
Particulars L/f Amount Dr. Amount
Cr.
Bank A/c Dr. 6,400
To Share Application A/c 6,400
(Being the application money received on 3200 shares @ Rs. 2 each)
Share Application A/c Dr. 6,400
To Share Capital A/c 6,000
To Bank A/c 400
(Being the application money on 3000 shares @ Rs. 2 each
transferred to Share Capital & excess refunded)
Share Allotment A/c Dr. 9,000
To Share Capital A/c 9,000
(Being the allotment money due on 3000 shares @ Rs. 3 each)
Bank A/c Dr. 9,000
To Share Allotment A/c 9,000
(Being the allotment money received on 3000 shares @ Rs. 3 each)
Share 1st Call A/c Dr. 6,000
To Share Capital A/c 6,000
(Being the first call money due on 3000 shares @ Rs. 2 each)
Bank A/c Dr. 5,900
Calls-in-arrear A/c Dr. 100
To Share 1st Call A/c 6,000
(Being the first call money received on 2950 shares)
OR
What do you mean by ‘forfeiture of share’? Discuss the procedure of forfeiture of share and re-issue of
such share.

********************************************

ALSO READ (AHSEC ASSAM BOARD CLASS 12):

1. AHSEC CLASS 12 ACCOUNTANCY CHAPTERWISE NOTES

2. AHSEC CLASS 12 ACCOUNTANCY IMPORTANT QUESTION (THEORY)

3. AHSEC CLASS 12 ACCOUNTANCY IMPORTANT QUESTION BANK (PRACTICAL)

4. AHSEC CLASS 12 ACCOUNTANCY PAST EXAM PAPERS (FROM 2012 TILL DATE)
5. AHSEC CLASS 12 ACCOUNTANCY SOLVED QUESTION PAPERS (FROM 2012 TILL DATE)

6. AHSEC CLASS 12 ACCOUNTANCY CHAPTERWISE MCQS

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Ans: Forfeiture of shares: Cancellation of shares due to non-payment of allotment and call money is called
forfeiture of shares. A company has no inherent power to forfeit shares. The power to forfeit shares must
be contained in the articles. Where a share holder fail to pay the amount due on any call, the directors may,
if so authorized by the articles, forfeit his shares. Shares can only be forfeited for non-payment of allotment
and calls. An attempt to forfeit shares for other reasons is illegal. Thus where the shares are declared
forfeited for the purpose of reliving a friend from liability, the forfeiture may be set aside.
Before the shares are forfeited the shareholder:
i) Must be served with a notice requiring him to pay the money due on the call together with
interest;
ii) The notice shall specify a date, not being earlier than the expiry of 14 days from the date of
service of notice, on or before which the payment is to be made and must also state that in the event of
non-payment within that date will make the shares liable for forfeiture;
iii) There must be a proper resolution of the board;
iv) The power of forfeiture must be exercised bonafide and for the benefit of the company.
A person, whose shares have been forfeited, ceases to be a member of the company. But he shall
remain liable to pay to the company all moneys which at the date of forfeiture were payable by him to the
company in respect of the shares. The liability of such a person shall cease as and when the company
receives payment in full in respect of the shares.
Reissue of the forfeited shares:
The directors of the company have the power to re-issue the forfeited shares on such terms as it
think fit. Thus the forfeited shares can be reissued at par, or at premium or at discount. However, if the
forfeited shares are reissued at discount, the amount of discount should not exceed the amount credited
to the share forfeiture A/c. If the discount allowed on reissue is less than the forfeited amount there will
be the surplus left in the share forfeited A/c. This surplus will be of the nature of capital profits so it will
be transferred to the Capital Reserve A/c.
Procedure for reissue of forfeited shares
a) The forfeited shares may then be disposed by sale or in any other manner as directed by the
Board.
b) Short particulars of reissued shares will be advised to the stock exchange concerned.
c) To give effect to the sale of forfeited shares, the Board will authorise some person, preferably
the director or Secretary, to transfer the shares sold to the purchaser thereof and to make a declaration
in connection therewith.
d) The defaulting members will be asked to return the share certificates. If they fail to do so
fresh certificates will be issued.
e) Public and stock exchange will be advised not to deal with the old certificates.
f) Any surplus arising out of sale after adjusting the amount due to the company in respect of the
shares will be refunded to the member concerned.
Q.21: Kumar and Gaurav are partners sharing profit and losses as three-fourth and one-fourth. They
agreed to dissolve their firm. On the date of dissolution, they have following Balance sheet: (8)
Liabilities Amount Assets Amount
 Capital Account: Land and Building 50,000
Kumar 40,000 Plant and machinery 18,000
Gaurav 35,000 75,000 Sundry Debtors 22,000
Creditor 16,000 Less reserve 2000 20,000
Loan From Mrs. Gaurav 13,000 Bills receivable 7,500
Cash in hand 8,500
1,04,000 1,04,000
The Assets Realised as follows:
(i) Land and Building Rs.48, 000
(ii) Sundry Debtors Rs.18, 000
(iii) Goodwill Rs.16, 500
Kumar took over plant and machinery at 5% more than the book value. Gaurav agreed to discharge his
wife’s loan. Creditors are paid Rs.12, 000 in full settlement of their claim and expenses on realisation
amounted to Rs.700. You are required to show Realisation Account, Cash Account and Capital Accounts
of the Partners on dissolution.
Solution:
Realisation A/c
Particulars Amount Particulars Amount
To Land & Building 50,000 By Provision for doubtful debts 2,000
To Plant & Machinery 18,000 By Creditors 16,000
To Sundry Debtors 22,000 By Loan of Mrs. Gaurav 13,000
To Bills Receivable 7,500 By Cash A/c (Assets realised) 82,500
To Cash A/c (Payment of liabilities) 12,000 By Gaurav Capital A/c 18,900
To Cash A/c (Expenses) 700 (P/M Taken over)
To Gaurav Capital 13,000
(Mrs. Gaurav Loan taken over)
To Profit on realisation
Kumar: 9,200 x 3/4 6,900
Gaurav: 9,200 x ¼ 2,300
1,32,400 1,32,400
Partner’s Capital A/c
Particulars Kumar Gaurav Particulars Kumar Gaurav
To Realisation A/c 18,900 By Balance c/d 40,000 35,000
To Cash A/c 28,000 50,300 By Realisation A/c 13,000
By Realisation A/c 6,900 2,300
46,900 50,300 46,900 50,300
Cash A/c
Particulars Amount Particulars Amount
To Balance b/d 8,500 By Realisation A/c (Payment of 12,000
To Realisation (Assets realised) 82,500 liabilities) 700
By Realisation (expenses) 28,000
By Kumar’s Capital A/c 50,300
By Gaurav’s Capital A/c
91,000 91,000
OR
What do you mean by Dissolution of a Firm? Mention Difference Between dissolution of a Firm and
Partnership.
Ans. Dissolution of a firm means discontinuation of the firm’s business and the relationship between the
partners. According to Sec. 39 of Indian Partnership Act 1932, “Dissolution of firm means dissolution of
partnership between all the partners in the firm."
Therefore when a firm is dissolved, assets of the firm are disposed off, liabilities are paid off and
the accounts of all the partners are also settled.
Difference between dissolution of partnership and dissolution of firm.
Basis of distinction Dissolution of partnership Dissolution of firm
Relationship Relationship amongst all the partners Relationship amongst all the partners
does not come to an end. comes to an end.
Continuation of Business of the firm may continue. Business of the firm does not
business continue.
Inter relationship Dissolution of partnership may or Dissolution of the firm necessarily
may not result in dissolution of the results in dissolution of partnership.
firm.
Books of accounts Books of accounts are not closed. Books of accounts are closed.
Nature Dissolution of partnership is Dissolution of partnership may
voluntary. sometimes compulsory or sometimes
voluntary.
Account Revaluation account is prepared. Realisation account is prepared.
Q.22: X, Y and Z were partners in firm Sharing profit in 5:3:2 ratios. On 31st march, 2011 Z retired from
the firm. On the date of Z’s retirement, the Balance Sheet of the Firm Was as Follows: (8)
Balance Sheet of X, Y, Z as at 31st March 2011
Liabilities Amount Assets Amount
Creditors 27,000 Bank 80,000
Bills payable 13,000 Debtor 20,000
Outstanding Rent 22,500 Less Reserve 500 19,500
Provision for legal claims 57,500 Stock 21,000
Capitals: Furniture 87,500
X -1,27,000 Land and Building 2,00,000
Y -90,000
Z -71,000 2,88,000
4,08,000 4,08,000
On Z’s retirement it was agreed that:
(a) Land and building will be appreciated by 5% and furniture will be depreciated by 20%
(b) Provision for Doubtful debts will be made at 5% on Debtor and provision for legal claim will be
made at Rs. 60,000.
(c) Goodwill of the firm was valued at Rs.60, 000
(d) Rs. 70,000 from Z’s Capital Account will be transferred to his loan account and the balance
will be paid to him by cheque.
Prepare Revaluation Account, Partners Capital Accounts and Balance sheet of X and Y after Z’s
Retirement.
Solution:
Revaluation A/c
Particulars Amount Particulars Amount
To Furniture 17,500 By Land & Building 10,000
To Provision for legal claims 2,500 By Loss on revaluation 10,500
To Provision for doubtful debts 500 X: 10,500 x 5/10 = 5,250
Y: 10,500 x 3/10 = 3,150
Z: 10,500 x 2/10 = 2,100
20,500 20,500
Partner’s Capital A/c
 Particulars X Y Z Particulars X Y Z
To Z’s Capital 7,500 4,500 - By Balance b/d 1,27,000 90,000 71,000
To Revaluation A/c 5,250 3,150 2,100 By X’s Capital 7,500
To Z’s Loan A/c 70,000 A/c 4,500
To Bank A/c 10,900 By Y’s Capital
To Balance c/d 1,14,250 82,350 A/c
1,27,000 90,000 83,000 1,27,000 90,000 83,000
Balance Sheet
As on 31st March, 2011
Liabilities Amount Assets Amount
Capital: Land & Building 2,10,000
X: 1,14,250 Furniture 87,500
Y: 82,350 1,96,600 Less: Depreciation (17,500) 70,000
Z’s Loan A/c 70,000 Stock 21,000
Sundry Creditors 27,000 Debtors 20,000
Bills Payable 13,000 Less: Provision (1,000) 19,000
Outstanding Rent 22,500
Provision for legal claims 60,000 Bank (80,000 – 10,900) 69,100
3,89,100 3,89,100
OR
Explain the term “Reconstitution of a firm”. Mention the situations when such reconstitution of a firm
takes place. (3+5=8)
Ans: Reconstitution of Partnership: Reconstitution of a partnership refers to a situation when there is a
change in the existing partnership agreement. A Partnership agreement is an agreement between two or
more persons for carrying out various business activities. In case of reconstitution, a new partnership
agreement is formed to replace the old partnership agreement. It means the firm continues to exist and
the only change will take place in existing partnership agreement. Thus, reconstitution of a partnership
takes place in each of the following cases:
a) Admission of a partner
b) Retirement of a partner
c) Death of a partner
d) Change on profit sharing ratio

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