Board Question Paper Solution: August 2022 Book Keeping & Accountancy

BOARD QUESTION PAPER: AUGUST 2022

BOOK KEEPING & ACCOUNTANCY | Time: 3 Hrs | Max. Marks: 80

Q.1. Attempt all of the following sub-questions:

[20]

(A) Do you agree or disagree with the following statements: (5)

(1) Financial statement includes only Balance sheet.

Answer: Disagree

(2) The person in whose favour the bill is endorsed is known as endorsee.

Answer: Agree

(3) Retiring partner is not entitled to share in General Reserve and Accumulated profit.

Answer: Disagree

(4) Income and Expenditure Account is Real Account.

Answer: Disagree

(5) Partnership firm is a Trading concern.

Answer: Agree

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(B) Select the most appropriate alternative from those given below and rewrite the statements: (5)

(1) A proportion in which the continuing partners get the share of retiring partner is known as _______.

• (A) Old Ratio
• (B) New Ratio
• (C) Gain Ratio
• (D) Capital Ratio

Answer: (C) Gain Ratio

(2) Partnership is completely dissolved when the partners of the firm become _______.

• (A) solvent
• (B) insolvent
• (C) creditors
• (D) debtors

Answer: (B) insolvent

(3) The person on whom the bill is drawn is called as _______.

• (A) Drawee
• (B) Payee
• (C) Drawer
• (D) None of the above

Answer: (A) Drawee

(4) Liability of partners in a partnership business is _______.

• (A) limited
• (B) unlimited
• (C) limited and unlimited
• (D) None of the above

Answer: (B) unlimited

(5) Ajay and Vijay are two partners sharing profits and losses in the ratio of 3 : 2. They decided to admit Sanjay for \( \frac{1}{5} \)th share, the new profit and loss sharing ratio will be _______.

• (A) 12 : 8 : 5
• (B) 4 : 3 : 1
• (C) 12 : 8 : 1
• (D) 12 : 3 : 1

Answer: (A) 12 : 8 : 5

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(C) Find the odd one: (5)

(1) Reserve Fund, Bank Loan, Building, Capital

Answer: Building (It is an Asset, others are Liabilities/Equity)

(2) Admission fees received, Sundry income, specific donations for Building, Sale of old news papers.

Answer: Specific donations for Building (It is a Capital Receipt, others are Revenue Receipts)

(3) Postage, Stationary, Dividend received, Advertisement.

Answer: Dividend received (It is an Income, others are Expenses)

(4) Bank overdraft, Library books, Stock of Drugs, Equipments.

Answer: Bank overdraft (It is a Liability, others are Assets)

(5) Realisation Account, Partners’ Capital Account, Balance Sheet, Bank Account.

Answer: Balance Sheet (It is a Statement, others are Accounts)

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(D) Complete the sentences: (5)

(1) Excess of income over expenditure is termed as _______.

Answer: Surplus

(2) _______ shareholders are the real owners of the company.

Answer: Equity

(3) Deceased partner’s Executor’s Loan Account is shown on the _______ side of the Balance sheet.

Answer: Liabilities

(4) _______ is the set of programs that direct the computer to perform the desired task.

Answer: Software

(5) Revaluation Account is also known as _______ Account.

Answer: Profit and Loss Adjustment

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Q.2. Admission of Partner / Retirement

[10]

Option 1: Admission of Ravindra (Virat & Rohit)

In the books of Partnership Firm

(i) Profit and Loss Adjustment Account

Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To R.D.D. A/c		5,400	By Stock A/c (Appreciation)		10,800
To Machinery A/c		8,400	By Building A/c (Appreciation)		12,000
To Furniture A/c		360
To Profit on Revaluation transferred
to old Partners Current A/c:
Virat (6/10)	5,184
Rohit (4/10)	3,456	8,640
Total		22,800	Total		22,800

(ii) Partners' Current Accounts

Particulars	Virat	Rohit	Particulars	Virat	Rohit
To Cash A/c	3,600	2,400	By Balance b/d	15,000	13,800
To Balance c/d	23,784	19,656	By Goodwill A/c (6:4)	7,200	4,800
			By Profit & Loss Adj. A/c (Profit)	5,184	3,456
Total	27,384	22,056	Total	27,384	22,056

(iii) New Balance Sheet as on 1st April, 2020

Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Partners Capital A/c			Building	60,000
Virat	84,000		Add: Appreciation	12,000	72,000
Rohit	84,000		Machinery	84,000
Ravindra	36,000	2,04,000	Less: Depreciation 10%	8,400	75,600
Partners Current A/c			Furniture	3,600
Virat	23,784		Less: Depreciation 10%	360	3,240
Rohit	19,656	43,440	Stock	49,200
Creditors		1,20,000	Add: Appreciation	10,800	60,000
			Debtors	1,08,000
			Less: RDD 5%	5,400	1,02,600
			Cash		54,000
Total		3,67,440	Total		3,67,440

Working Note: Cash A/c

Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance b/d	12,000	By Virat's Current A/c	3,600
To Ravindra's Capital A/c	36,000	By Rohit's Current A/c	2,400
To Goodwill A/c	12,000	By Balance c/d	54,000
Total	60,000	Total	60,000

OR

Option 2: Retirement of Rohan (Sohan, Mohan & Rohan)

(i) Profit and Loss Adjustment Account

Particulars	Amount (₹)	Particulars	Amount (₹)
To Furniture A/c (Depreciation)	9,000	By Freehold Property (Appr.)	9,000
To Goodwill A/c (Written off)*	4,500	By Machinery (Appreciation)	3,000
To Partners' Capital A/c (Profit):		By R.D.D. (Written back)	3,000
Sohan (2/5)	600
Mohan (2/5)	600
Rohan (1/5)	300
Total	15,000	Total	15,000

*Note: Goodwill Revaluation: Existing 90,000. New Value = 3 * Avg Profit (28,500) = 85,500. Loss = 4,500.

(ii) Partners' Capital Accounts

Particulars	Sohan	Mohan	Rohan	Particulars	Sohan	Mohan	Rohan
To Rohan's Loan A/c	-	-	48,300	By Balance b/d	1,20,000	90,000	45,000
To Balance c/d	1,26,600	96,600	-	By General Reserve	6,000	6,000	3,000
				By P & L Adj. A/c	600	600	300
Total	1,26,600	96,600	48,300	Total	1,26,600	96,600	48,300

(iii) Balance Sheet as on 1st April, 2020

Liabilities	Amount (₹)	Assets	Amount (₹)
Capital Accounts:		Bank	15,000
Sohan	1,26,600	Debtors (All good)	60,000
Mohan	96,600	Furniture (Revalued)	36,000
Rohan's Loan A/c	48,300	Machinery (Revalued)	15,000
Creditors	30,000	Freehold Property	90,000
		Goodwill (Revalued)	85,500
Total	3,01,500	Total	3,01,500

Q.3. Dissolution of Partnership / Bills of Exchange

[10]

Option 1: Dissolution (Sheetal and Kanchan)

Journal Entries in the books of the Firm

Particulars	L.F.	Debit (₹)	Credit (₹)
Realisation A/c ... Dr. (Transfer of Assets) To Stock A/c To Debtors A/c To Bills Receivable A/c To Furniture A/c To Building A/c		1,98,000	60,000 54,000 6,000 18,000 60,000
Creditors A/c ... Dr. Bills Payable A/c ... Dr. (Transfer of Liabilities) To Realisation A/c		38,400 21,600	60,000
Cash A/c ... Dr. (Assets Realised: Stock 55,200 + Debtors 49,800 + BR 5,940) To Realisation A/c		1,10,940	1,10,940
Kanchan's Capital A/c ... Dr. (Building taken over) To Realisation A/c		54,000	54,000
Sheetal's Capital A/c ... Dr. (Furniture taken over) To Realisation A/c		16,200	16,200
Realisation A/c ... Dr. (Liabilities & Expenses Paid: Creditors 38,400 + BP 21,600 + Exp 1,800) To Cash A/c		61,800	61,800
Sheetal's Capital A/c ... Dr. Kanchan's Capital A/c ... Dr. (Realisation Loss transferred equally) To Realisation A/c		9,330 9,330	18,660
Reserve Fund A/c ... Dr. To Sheetal's Capital A/c To Kanchan's Capital A/c (Reserve fund distributed equally)		24,000	12,000 12,000
Sheetal's Capital A/c ... Dr. (Bal: 60+12-16.2-9.33) Kanchan's Capital A/c ... Dr. (Bal: 72+12-54-9.33) To Cash A/c (Final Settlement)		46,470 20,670	67,140

OR

Option 2: Bills of Exchange (Sandhya's Books)

In the books of Sandhya

Journal Entries

Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1	Bills Receivable A/c ... Dr.   To Vidya's A/c (Being bill drawn.)		36,000	36,000
2	Bank A/c ... Dr. Discount A/c ... Dr.   To Bills Receivable A/c (Being bill discounted.)		34,800 1,200	36,000
3	Vidya's A/c ... Dr.   To Bank A/c (Being bill dishonoured.)		36,000	36,000
4	Cash / Bank A/c ... Dr.   To Vidya's A/c (Being part amount received.)		12,000	12,000
5	Vidya's A/c ... Dr.   To Interest A/c (Being interest charged.)		1,100	1,100
6	Bills Receivable A/c ... Dr.   To Vidya's A/c (Being new bill drawn with interest.)		25,100	25,100
	Total		1,46,200	1,46,200

Vidya's Account

Date	Particulars	Amount (₹)	Date	Particulars	Amount (₹)
1	To Balance b/d	36,000	1	By Bills Receivable A/c	36,000
3	To Bank A/c	36,000	4	By Cash / Bank A/c	12,000
5	To Interest A/c	1,100	6	By Bills Receivable A/c	25,100
	Total	73,100		Total	73,100

Q.4. Issue of Shares / Computerised Accounting

[8]

Option 1: Journal Entries (Mahesh Co. Ltd.)

Journal Entries in the books of Mahesh Co. Ltd.

Particulars	L.F.	Debit (₹)	Credit (₹)
Bank A/c ... Dr. (1,20,000 shares × ₹2) To Equity Share Application A/c (Being application money received)		2,40,000	2,40,000
Equity Share Application A/c ... Dr. To Equity Share Capital A/c (1,00,000 × ₹2) To Bank A/c (20,000 × ₹2) (Being application money transferred to capital and excess refunded)		2,40,000	2,00,000 40,000
Equity Share Allotment A/c ... Dr. (1,00,000 shares × ₹4) To Equity Share Capital A/c (Being allotment money due)		4,00,000	4,00,000
Bank A/c ... Dr. To Equity Share Allotment A/c (Being allotment money received)		4,00,000	4,00,000
Equity Share First Call A/c ... Dr. (1,00,000 shares × ₹2) To Equity Share Capital A/c (Being first call money due)		2,00,000	2,00,000
Bank A/c ... Dr. To Equity Share First Call A/c (Being first call money received)		2,00,000	2,00,000
Equity Share Second & Final Call A/c ... Dr. (1,00,000 shares × ₹2) To Equity Share Capital A/c (Being final call money due)		2,00,000	2,00,000
Bank A/c ... Dr. To Equity Share Second & Final Call A/c (Being final call money received)		2,00,000	2,00,000

OR

Option 2: Importance of Computerised Accounting system

The importance of a Computerised Accounting System (CAS) includes:

1. Speed: CAS processes data much faster than manual systems, generating reports instantly.
2. Accuracy: It reduces human errors in calculations. Once data is entered correctly, the outputs (reports, balances) are accurate.
3. Reliability: Standardized processes ensure consistent and reliable financial information.
4. Scalability: It can handle large volumes of transactions easily, suitable for growing businesses.
5. Security: Data can be secured with passwords and backups, preventing unauthorized access and data loss.
6. Automated Reporting: Generates financial statements (Balance Sheet, P&L) automatically at the click of a button.
7. Cost-Efficient: Reduces the cost of stationery, storage, and manpower in the long run.

Q.5. Death of Partner / Ratios

[8]

Option 1: Death of Mamta

In the books of the firm

Mamta's Capital Account

Particulars	Amount (₹)	Particulars	Amount (₹)
To Drawings A/c (To Cash A/c)	1,200	By Balance b/d	10,000
To Mamta's Executor's Loan A/c	15,000	By General Reserve A/c	1,000
		By Interest on Capital A/c	500
		By Goodwill A/c	3,000
		By Profit & Loss Suspense A/c	750
		By Profit & Loss Adjustment A/c (profit)	950
Total	16,200	Total	16,200

Working Notes

1. Profit & Loss Adjustment Account (Revaluation):

Particulars	Amount (₹)	Particulars	Amount (₹)
To Stock A/c	1,500	By Plant & Machinery A/c (Appr.)	5,000
To Partners' Capital A/c (Profit)	4,750	By R.D.D. A/c (Written back)	1,250
Total	6,250	Total	6,250

Mamta's Share of Profit = 4,750 × 1/5 = ₹ 950

2. Interest on Capital:

Interest = Capital × Rate × Period

\( = 10,000 \times \frac{10}{100} \times \frac{6}{12} \)

= ₹ 500

3. Calculation of Mamta's Share of Goodwill:

Average Profit (3 years) = \( \frac{7,500 + 8,500 + 6,500}{3} = \frac{22,500}{3} \) = ₹ 7,500

Goodwill of Firm = Average Profit × No. of Years Purchase

Goodwill = 7,500 × 2 = ₹ 15,000

Mamta's Share = 15,000 × 1/5 = ₹ 3,000

4. Calculation of Profit upto date of death (P&L Suspense A/c):

Average Profit (Last 2 years) = \( \frac{8,500 + 6,500}{2} = \frac{15,000}{2} \) = ₹ 7,500

Profit for 6 months (Apr to Sept) = \( 7,500 \times \frac{6}{12} \) = ₹ 3,750

Mamta's Share = \( 3,750 \times \frac{1}{5} \) = ₹ 750

OR

Option 2: Ratio Analysis

1. Current Ratio:
\( \text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}} \)
Current Assets = Debtors (90,000) + Stock (45,000) = 1,35,000
Current Liabilities = Creditors (45,000) + Bills Payable (30,000) + Bank OD (15,000) = 90,000
Ratio = \( \frac{1,35,000}{90,000} \) = 1.5 : 1

2. Gross Profit Ratio:
\( \text{GP Ratio} = \frac{\text{Gross Profit}}{\text{Net Sales}} \times 100 \)
\( = \frac{1,50,000}{5,00,000} \times 100 \) = 30%

3. Net Profit Ratio:
\( \text{NP Ratio} = \frac{\text{Net Profit}}{\text{Net Sales}} \times 100 \)
\( = \frac{1,00,000}{5,00,000} \times 100 \) = 20%

Q.6. Not for Profit Concern

[12]

In the books of Vasantrao Naik Junior College, Aurangabad

Income and Expenditure Account
for the year ended 31st March, 2019

Expenditure	Amount (₹)	Amount (₹)	Income	Amount (₹)	Amount (₹)
To Salaries to Teachers	1,20,000		By Tuition Fees (2018-19)	35,000
Add: Outstanding	6,000	1,26,000	Add: Outstanding	5,000	40,000
To Printing and Stationary		3,500	By Admission Fees		4,000
To Office Rent		4,500	(8,000 - 50% Capitalized)
To Sports Expenses		750	By Interest on Bank Deposits	12,750
To Annual Gathering Expenses		6,000	Add: Outstanding	750	13,500
To Depreciation on:			By Government Grant	43,250
Books	27,250		(86,500 - 50% Capitalized)		43,250
Furniture	53,250	80,500	By Deficit (Excess of expenditure		1,20,500
			over income)
Total		2,21,250	Total		2,21,250

Balance Sheet as on 31st March, 2019

Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital Fund	16,51,000		Building		9,00,000
Add: Admission Fees	4,000		Furniture	3,50,000
Add: Government Grant	43,250		Add: Purchased	20,000
	16,98,250			3,70,000
Less: Deficit	1,20,500	15,77,750	Less: Depreciation 15%	53,250	3,16,750
			Books	2,50,000
Donation for Prize Fund		45,000	Add: Purchased	30,000
Outstanding Salaries		6,000		2,80,000
			Less: Depreciation 10%	27,250	2,52,750
			9% Bank Deposits	1,50,000
			Add: Outstanding Interest	750	1,50,750
			Cash in Hand		100
			Cash at Bank		3,400
			Outstanding Tuition Fees		5,000
Total		16,28,750	Total		16,28,750

Working Notes

1. Interest on Bank Deposit:

\( 1,50,000 \times \frac{9}{100} = 13,500 \)

Less: Received = 12,750

Outstanding Interest = 750

2. Depreciation on Books @ 10%:

On Opening Balance: \( 2,50,000 \times 10\% = 25,000 \)

On Purchased (1-7-2018 for 9 months): \( 30,000 \times 10\% \times \frac{9}{12} = 2,250 \)

Total Depreciation = 25,000 + 2,250 = 27,250

3. Depreciation on Furniture @ 15%:

On Opening Balance: \( 3,50,000 \times 15\% = 52,500 \)

On Purchased (1-1-2019 for 3 months): \( 20,000 \times 15\% \times \frac{3}{12} = 750 \)

Total Depreciation = 52,500 + 750 = 53,250

Q.7. Final Accounts (Partnership)

[12]

In the books of Pravin and Prashant

Trading Account
for the year ended 31st March, 2019

Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Opening Stock		30,800	By Sales	99,550
To Purchases	80,000		Less: Returns	-	99,550
Less: Returns	-	80,000	By Goods Destroyed by Fire		8,000
To Wages		7,500	By Closing Stock		35,000
To Gross Profit c/d		24,250
Total		1,42,550	Total		1,42,550

Profit & Loss Account
for the year ended 31st March, 2019

Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Salaries		5,000	By Gross Profit b/d		24,250
To Printing & Stationary		1,050	By Net Loss transferred to
To Advertisement		30,000	Partners' Capital A/c:
To Bad Debts	500		Pravin	8,193
Add: New RDD	1,075		Prashant	8,192	16,385
	1,575
Less: Old RDD	-	1,575
To Depreciation on Furniture		1,010
To Loss by fire		2,000
Total		40,635	Total		40,635

Balance Sheet as on 31st March, 2019

Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Partners Capital A/c:			Sundry Debtors	43,000
Pravin	51,807		Less: RDD 2.5%	1,075	41,925
Prashant	51,808	1,03,615	Furniture	20,200
Sundry Creditors		20,500	Less: Depreciation 5%	1,010	19,190
			Cash in Hand		7,000
			Fixed Deposits		15,000
			Closing Stock		35,000
			Insurance Claim		6,000
Total		1,24,115	Total		1,24,115

Partners Capital Account

Particulars	Pravin (₹)	Prashant (₹)	Particulars	Pravin (₹)	Prashant (₹)
To Profit & Loss A/c (Net Loss)	8,193	8,192	By Balance b/d	60,000	60,000
To Balance c/d	51,807	51,808
Total	60,000	60,000	Total	60,000	60,000