CBSE 12th Accountancy Question Paper 2022 (Set 3)

Any two characteristics of Income and Expenditure Account are: 1. It is a nominal account prepared on accrual basis. It records all incomes and all expenses relating to the current accounting year, whether received/paid or not. 2. It shows surplus or deficit. If total income is more than total expenditure, there is surplus; if expenditure is more than income, there is deficit.

Old ratio of Sharad, Sharma, Singh and Shree = $4:3:2:1$ Shree retired, so his share = $\frac{1}{10}$ This share is taken over by Sharad, Sharma and Singh in the ratio $2:3:4$. Their gaining ratio = $2:3:4$ New share acquired by: - Sharad = $\frac{1}{10} \times \frac{2}{9} = \frac{2}{90}$ - Sharma = $\frac{1}{10} \times \frac{3}{9} = \frac{3}{90}$ - Singh = $\frac{1}{10} \times \frac{4}{9} = \frac{4}{90}$ Old shares: - Sharad = $\frac{4}{10} = \frac{36}{90}$ - Sharma = $\frac{3}{10} = \frac{27}{90}$ - Singh = $\frac{2}{10} = \frac{18}{90}$ New shares: - Sharad = $\frac{36}{90} + \frac{2}{90} = \frac{38}{90}$ - Sharma = $\frac{27}{90} + \frac{3}{90} = \frac{30}{90}$ - Singh = $\frac{18}{90} + \frac{4}{90} = \frac{22}{90}$ Therefore, the new profit-sharing ratio of the remaining partners is: $38:30:22 = 19:15:11$ **Answer: $19:15:11$**

As per NCERT, when goodwill is not to be opened, the gaining partner(s) compensate the retiring partner for his share of goodwill. Old profit-sharing ratio of Verma, Dharma and Karma = $4:3:3$ New ratio after retirement of Verma is $3:3 = 1:1$ Verma's share in goodwill = $2,70,000 \times \frac{4}{10} = 1,08,000$ Since the two continuing partners gain equally, each should bear goodwill compensation equally. Journal entry: $$\text{Dharma's Capital A/c Dr.} \quad 54,000$$ $$\text{Karma's Capital A/c Dr.} \quad 54,000$$ $$\quad\text{To Verma's Capital A/c} \quad 1,08,000$$ (Being goodwill of the firm adjusted among the gaining partners without opening goodwill account.)

Purchase consideration = $6,00,000$ Assets taken over: - Building = $3,00,000$ - Machinery = $2,00,000$ - Furniture = $30,000$ Total assets = $5,30,000$ Less: Liabilities taken over = $40,000$ Net assets taken over = $4,90,000$ Since purchase consideration is $6,00,000$, the balance paid by issue of debentures is: $6,00,000 - 4,90,000 = 1,10,000$ Debentures issued are of face value $100 each at 20% premium, so issue price per debenture = $120. Number of debentures issued = $\frac{1,10,000}{120} = 916\frac{2}{3}$ As such questions are framed in books on value basis, journal entries are passed for the agreed purchase consideration and debentures issued at premium. Journal entries in the books of BX Ltd.: $$\text{Building A/c Dr.} \quad 3,00,000$$ $$\text{Machinery A/c Dr.} \quad 2,00,000$$ $$\text{Furniture A/c Dr.} \quad 30,000$$ $$\quad\text{To PQ \& Co.'s A/c} \quad 4,90,000$$ $$\quad\text{To Liabilities A/c} \quad 40,000$$ $$\text{PQ \& Co.'s A/c Dr.} \quad 6,00,000$$ $$\quad\text{To 11\% Debentures A/c} \quad 1,00,000$$ $$\quad\text{To Securities Premium A/c} \quad 20,000$$ $$\quad\text{To Bank A/c} \quad 4,80,000$$ (Being assets and liabilities taken over and purchase consideration discharged by issue of debentures at a premium.)

Number of debentures issued = 5,000 Application money received = 10,000 \times 40 = $4,00,000$ Application money for 2,000 debentures refunded = 2,000 \times 40 = $80,000$ Applications remaining for pro-rata allotment = 8,000 debentures Pro-rata allotment ratio = $5,000:8,000 = 5:8$ So, debentures allotted = 5,000 Applications accepted on pro-rata basis = 8,000 debentures Excess application money on these = 8,000 \times 40 - 5,000 \times 40 = $3,20,000 - 2,00,000 = 1,20,000$ Amount due on allotment per debenture = $100 - 40 = 60$ Since excess application money is adjusted towards allotment, only the balance amount is due on allotment. Journal entries in the books of XZ Ltd.: $$\text{Bank A/c Dr.} \quad 4,00,000$$ $$\quad\text{To 9\% Debentures Application A/c} \quad 4,00,000$$ $$\text{9\% Debentures Application A/c Dr.} \quad 80,000$$ $$\quad\text{To Bank A/c} \quad 80,000$$ $$\text{9\% Debentures Application A/c Dr.} \quad 3,20,000$$ $$\quad\text{To 9\% Debentures Allotment A/c} \quad 2,00,000$$ $$\quad\text{To 9\% Debentures Application A/c} \quad 1,20,000$$ $$\text{9\% Debentures Allotment A/c Dr.} \quad 1,80,000$$ $$\quad\text{To 9\% Debentures A/c} \quad 5,00,000$$ $$\quad\text{To 9\% Debentures Application A/c} \quad 1,20,000$$ (Being application money received, refund made to rejected applicants, pro-rata allotment made, and excess application money adjusted against allotment.)