AHSEC| CLASS 12| ACCOUNTANCY| SOLVED PAPER - 2015| H.S. 2ND YEAR

 

AHSEC| CLASS 12| ACCOUNTANCY| SOLVED PAPER - 2015| H.S. 2ND YEAR

2015
ACCOUNTANCY
Full Marks: 100
Pass Marks: 30
Time: Three hours
The figures in the margin indicate full marks for the questions

 

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

(i) If a partner takes over a liability of firms, the partner’s capital account is credited.

(ii) A partner acts as an agent for the firm.

(iii) When Partners’ Capital Account are fixed, then their current Accounts are prepared.

(iv) Goodwill is the extra earning capacity of a firm.

(b) Choose the correct alternative: 1x2=2

(i) In the event of death of a partner, the amount of general reserve is transferred to the Partners’ Capital account in:

(1) New Profit-sharing ratio

(2) Old Profit-sharing ratio

(3) Capital ratio

(4) None of the above

(ii) Balance Sheet shows:

(1) Financial Position of a Company

(2) Profit or Loss of a Company

(3) Cash flow of a Company

(4) None of the above

(c) State whether the following statements are true or false: 1x2=2

(i) The deceased partner’s executor is entitled to a share of Profit for the period upto his/ her death. True

(ii) A Preference shareholder gets interest at a fixed rate. False

2. State any two features of a Not-for-Profit organization. 2

Ans:- Here are two characteristics of non-profit organization:-

(i) Surplus is not distributed among the members: Unlike other businesses, any surplus or deficit of a non-profit organization is not distributed among its members. Instead, these are adjusted into the organization's capital funds.

(ii) Separate entity: A non-profit organization is considered a separate entity from its members. It is not owned by any individual or enterprise, although it is promoted by them.

3. A, B and C are partners sharing profits in the ratio of 2:2:1. C retires. A and B have decided to share future profits and losses in the ratio of 2:1. Calculate the gaining ratio. 2


4. Mention any two features of debentures. 2

Ans:- Here are some features of debentures:-

(i) Fixed maturity date: Debentures have a specific date when the issuer has to repay the principal amount to the debenture holders.

(ii) Interest Payment: Debentures usually pay interest to investors from time to time.

5. Mention any two methods of valuation of goodwill. 2

Ans:- Various methods are used in valuing goodwill. However, valuation methods are based on an individual company's situation and different business practices.

The two processes of valuation of goodwill are mentioned below:-

(i) Average Profit Method: This method is divided into two subdivisions.

(a) Simple Average: In this process, goodwill valuation is done by calculating the average profit based on the number of years, it is called year's purchases.

(b) Weighted Average: Here, the profit of the previous year is calculated by a specific number of weights. This is used to obtain the value of goodwill, which is divided by the total number of weights to determine the average weight gain.

(ii) Super Profit Method: It is the surplus of expected future maintainable profits over normal profits. There are two methods among these methods.

(a) Capitalization Method: Under this method goodwill can be valued in two ways.

(b) Average Profit Method: In this process, goodwill is measured by deducting the original capital applied from the capitalized amount of average profit based on average return rate.

6. X Ltd. decided to forfeit 1,000 shares of Rs. 10/- each for non-payment of allotment money for Rs. 4/- each and 1st and final call money of Rs. 3/- each. Give journal entry for the forfeiture of shares. 2


7. X, Y and Z are partners sharing profits in the ratio of 3:2:1. It is now agreed that they will share the future profit equally. Goodwill of the firm is valued at Rs. 60,000/- and the same does not appear in the books. Pass necessary journal entries. 3


8. Briefly explain any three objectives of analysis of financial statements.

Ans:- The three objectives of analyzing financial statements are as follows:-

(i) To assess the earning potential or profitability of the firm: It involves analyzing the revenues and expenses of the firm to determine how much profit it is generating.

(ii) To assess operational efficiency and managerial effectiveness: This involves analyzing the costs and expenses of the firm to determine how efficiently it is using its resources.

(iii) To assess the short term as well as long term solvency position of the firm: This involves analyzing the assets and liabilities of the firm to determine its ability to meet its financial obligations.

Or

From the following calculate Current Ratio: 3

Sundry Debtors – Rs. 50,000/-

Stock – Rs. 40,000/-

Prepaid Expenses – Rs. 2,000/-

Sundry Creditors – Rs. 38,000/-

Bank Overdraft – Rs. 10,000/-

Dividend payable – Rs. 10,000/-

10% Debenture – Rs. 40,000/-

Machinery – Rs. 50,000/-


9. What do you mean by Forfeiture of Shares? Discuss the procedure of forfeiture of shares. 3

Ans:- Forfeiture of shares is the cancellation of shares of a shareholder who fails to pay the required amount within the specified time period. This includes forfeiture of any amount received from the shareholder.

A company or its directors can forfeit shares only if the company's articles of association permit it.

Some of the steps involved in forfeiture of shares are as follows:-

(i) The shareholder must be given notice at least 14 days before the forfeiture. In the notice the shareholder will have to give at least 14 days to make the payment.

(ii) The notice should clearly state that if the specified amount is not paid by the appointed day the shares will be forfeited.

(iii) The name of the original shareholder should be removed from the register of members.

(iv) Forfeited shares are returned to treasury stock, which the company may choose to re-issue or permanently retire.

(v) Forfeited shares are shown under the head of Reserves and Surplus on the liabilities side of the balance sheet.

10. What is meant by Common Size Statements? Mention any two uses of Common Size Statements. 3

Ans:- A common size statement, also known as vertical analysis, is a financial statement that expresses each line item as a percentage of the base figure. The base figure is typically a key element of the statement, such as total assets for a balance sheet or total revenues for an income statement. By expressing each item as a percentage, a common-size statement allows easy comparison and analysis of the relative proportions of different components within the financial statement.

Common size statements have two uses:-

(i) To analyze changes in individual items of financial statements over several periods. This can be done by comparing the general size statements of a company for different years.

(ii) To compare the financial statements of two companies. This can be done by comparing the common size statements of two companies in the same industry.

Or

Give any three distinctions between sacrificing ratio and gaining ratio. 3

Ans:- There are three differences between sacrifice ratio and profit ratio:-

Sacrifice Ratio:

(i) It is calculated at the time of entry of new partner in the business.

(ii) It is calculated to find out the share of profits and losses given up by the existing partners in favor of the new partners.

(iii) It is calculated by subtracting the new ratio from the old ratio.

Gaining Ratio:

(i) It is calculated at the time of retirement or death of a partner.

(ii) It is calculated to find out the share of profits and losses earned by the remaining partners from the outgoing partner.

(iii) It is calculated by subtracting the old ratio from the new ratio.

11. Mention any three objectives of Receipts and Payment Account. 3


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