ISC Accounts Previous Year Question Paper 2013 Solved for Class 12
Maximum Marks: 80
Time allowed: Three hours
- Candidates are allowed additional 15 minutes for only reading the paper. They must NOT start writing during this time.
- Answer Question 1 (Compulsory) from Part I and five questions from Part II, choosing two questions from Section A, two questions from Section B and one question from either Section A or Section B.
- The intended marks for questions or parts of questions are given in brackets [ ].
- Transactions should be recorded in the answer book.
- All calculations should be shown clearly.
- All working, including rough work, should be done on the same page as, and adjacent to the rest of the answer.
Answer each of the following questions briefly: [10 × 2]
(i) Give two differences between Net Profit and Cash from Operations.
(ii) When does loss on Issue of Debentures arise ?
(iii) Give two differences between Authorized Capital and Issued Capital.
(iv) Why is the word Memorandum affixed to the Memorandum Joint Venture Account ?
(v) How is double entry completed in the Journal Ledger when ledgers are kept under the Self Balancing System ?
(vi) What is the accounting treatment of Employees Provident Fund appearing in the Balance Sheet of a partnership firm at the time of its dissolution ?
(vii) Give the formula for computing Price Earning Ratio.
(viii) Give two differences between Reserve Capital and Capital Reserve.
(ix) How will the firm show the amount payable to the retiring partner, if it is not in a position to immediately pay the amount due to him on his retirement ?
(x) What accounting steps are taken by a partnership firm when a new partner is unable to bring the business guaranteed by him ?
(ii) Loss on Issue of Debentures arises when debentures are to be redeemed at a value higher than their face value.
(iv) The word Memorandum is affixed to the Memorandum Joint Venture Account because it is not a part of the Double Entry System of Book Keeping. It is just a rough account prepared to calculate the Profit or Loss.
(vi) Employees Provident Fund to be credited to the Realization Account as a liability and it’s payment is also to be debited to the Realization Account.
Employees Provident Fund A/c Dr.
To Realization A/c
(Being employees’ provident fund transferred)
Realization A/c Dr.
To Bank A/c
(Being employees provident fund paid off)
(ix) The amount payable to the retiring partner would be transferred to his Loan Account and reflected in the Balance Sheet as a liability .
(x) The deficient amount would be debited to the New Partner’s Capital Account and Credited to the Profit and Loss Appropriation Account.
New Partner’s Capital A/c Dr.
To Profit & Loss Appropriation A/c
(Being deficient amount in the business guaranteed adjusted)
Question 2. 
Alex, John and Sam are partners in a firm. Their capital accounts on 1st April. 2011. stood at ₹ 1.00.000, ₹ 80.000 and ₹ 60.000 respectively.
Each partner withdrew ₹ 5.000 during the financial year 2011-12.
As per the provisions of their partnership deed :
(a) John was entitled to a salary of ₹ 1.000 per month.
(b) Interest on capital was to be allowed @ 10% per annum.
(c) Interest on drawings was to be charged @ 4% per annum.
(d) Profits and losses were to be shared in the ratio of their capitals. The net profit of ₹ 75,000 for the year ended 31st March. 2012 was divided equally amongst the partners without providing for the terms of the deed.
You are required to pass a Single Adjusting Journal Entry to rectify the error. (Show the workings clearly)
Part – II
Question 3. 
Reliable Ltd. was registered with an authorized capital of ₹ 20,00,000 in ₹ 10 per equity share. It invited applications for issuing 1.00.000 equity shares at a premium of ₹ 2 per share. The amount w as pay able as follows:
On application ₹4 per share (including premium)
On allotment ₹ 3 per share
Balance on 1st and Final Call.
Applications were received for 1,30.000 shares. Applications for 10,000 shares were rejected and the application money received on them was refunded. Pro-rata allotment w as made to the remaining applications. Amount overpaid on these applications was adjusted towards the amount due on allotment. Sameer, who had applied for 1,200 shares, failed to pay the allotment and call money. The company forfeited his shares, out of which 800 shares were re-issued to Sanjay at ₹ 9 per share fully paid up.
You are required to:
(i) Pass the Journal Entries in the books of the company through Calls in Arrears Account.
(ii) Prepare the Share Allotment Account.
Question 4. 
Arthur Ltd. reported a profit of ? 90,000 for the year ended March 31, 2012 after considering the
following : ?
(a) Tax provided during the year — ₹ 3,000
(h) Amortization of goodwill — ₹ 12,000
(c) Profit on sale of land — ₹ 5,000
(d) Writing off preliminary expenses — ₹ 2,000
(e) Machinery costing ₹ 40.000 (accumulated depreciation thereon being ₹ 18.000) was sold during the year at a loss of ₹ 17,000.
Extracts of its Balance Sheets at the beginning and at the end of the year are given below :
You are required to calculate Cash from Operating Activities as per Accounting Standard-3. (Show your working clearly)
Following is the Balance Sheet of Ravi and Prakash as on 31st March, 2012 :
The firm was dissolved on 31st March. 2012 on the following terms :
(a) Ravi took over stock at ₹ 8.000.
(b) Creditors payable after two months w ere paid immediately at a discount of 6% per annum.
(c) Debtors realized ₹ 35,000
(d) Plant and Machinery and Investments realized ₹ 60,000.
(e) An old computer completely written off w as taken over by Prakash at ₹ 1,200.
(f) Realization expenses of ₹ 2,000 were paid by Ravi.
You are required to prepare :
(i) Realization Account.
(ii) Partners’ Capital Accounts.
(iii) Cash Account.
Neha and Tara are partners in a firm sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet on 31st March, 2012. stood as follows : 
They agreed to admit Prachi into partnership for 1/5th share of profits on 1st April. 2012 on the following terms :
(a) All debtors to be considered as good and therefore the provision for doubtful debts to be written back.
(b) Value of land and building to be increased to ₹ 18,000.
(c) Value of plant and machinery’ to be reduced by ₹ 2,000.
(d) The liability against Workmen’s Compensation Fund is determined at ₹ 2,000 which is to be paid later in the year.
(e) Prachi to bring in her share of Goodwill of ₹ 10,000 in cash.
(f) She will further bring in cash so as to make her capital equal to 20% of the total capital of the new firm. (Show your workings clearly)
You are required to prepare:
(i) Revaluation Account
(ii) Partners’ Capital Accounts.
(iii) Balance Sheet of the reconstituted firm.
(a) The following information is available from the books of Greg Foods Limited : 
Equity Share Capital — ₹ 1,00,000
8% Preference Share Capital — ₹ 40,000
Reserves and Surplus — ₹ 60,000
Investments — ₹ 30,000
Current Assets — ₹ 70,000
Proprietary Ratio is 0.8 : 1
Assuming that there are no fictitious assets, calculate the value of the fixed assets of the company.
(b) The following figures have been extracted from the records of Allen Cosmetics Limited :
Cost of goods sold — ₹ 4,00,000
Current liabilities — ₹ 90,000
Profit margin is equal to 20% on selling price.
Working Capital Turnover Ratio is equal to 10 times.
Determine the value of the Current Assets of the company.
(c) The following details are available from the books of Simon Gadgets Limited :
Sales — ₹ 8.00.000
Opening Stock — ₹ 40.000
Closing stock — ₹ 50.000
Gross Profit Ratio is 20%
Calculate the Stock Turnover Ratio of the company (up to two decimal places).
(d) The following data is available from the records of Johnson and Company Limited : Particulars ?
Stock — ₹ 50,000
Sundry debtors — ₹ 40,000
Bills receivable — ₹ 10,000
Advances paid — ₹ 4000
Cash in hand — ₹ 30,000
Sundry creditors — ₹ 60,000
Bills pay able — ₹ 40,000
Bank overdraft — ₹ 4,000
Reserves — ₹ 70,000
10% Preference Share Capital — ₹ 5,00,000
Equity Share Capital — ₹ 7,00,000
Net profit after tax — ₹ 1,40,000
Calculate the following (up to two decimal places):
(i) Current Ratio.
(ii) Quick Ratio.
(iii) Return on Equity Shareholders’ Fund.
Andrew and Roger entered into a joint venture and agreed hare profits and losses in the ratio of 3 : 2 respectively. 
Andrew purchased goods worth ₹ 1,00,000 in cash. He spent ₹ 10,000 on freight and insurance and dispatched the goods to Roger.
Roger got the goods released from-the transport company and paid ₹ 5.000 on carriage up to the warehouse and ₹ 10.000 as rent of the warehouse.
Roger sold 80% of the goods for ₹ 3,00,000. He was entitled to receive commission a 6% of the sales. He later informed Andrew that the remaining goods were desroyed by fire. Since the goods in the warehouse were not insured. Roger agreed to bear the entire loss which was valued at original cost plus proportionate expenses.
The accounts were settled between the co-venturers by means of a bank draft.
You are required to prepare in the books of Andrew :
(i) Joint Venture Account.
(ii) Roger’s Account.
Sim. Tim and Jim are partners sharing profits and losses equally. Their Balance Sheet as on 31st March, 2012 stood as follows:
From April 1st 2012, the partners decide to share profits and losses in the ratio 3:2:1 and for that purpose the following revised value of assets were agreed upon :
Building ₹ 2,75,000; Plant and Machinery ₹ 90,000; Patents and Copyrights ₹ 1,32,500; Stock ₹ 2,00,000: Prepaid Insurance ₹ 5,000 and Debtors ₹ 1,42,500. Goodwill of the firm was valued at ₹ 60,000.
Partners decide not to disturb the reserves. Also, they decide not to record the revised values of assets in the books of Accounts.
You are required to prepare:
(i) Partner’s capital accounts.
(ii) Balance Sheet of the re-constituted firm.
(Show your workings clearly)
Peter’s books show the following details for the month of April. 2012. 
You are required to prepare Journal Ledger Adjustment Account in the Creditors’ Ledger.