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Sabala Project. Aids for the care of the child at home and even in the Education Support Class that ISC conducted in these. Class 11 ( ISC ) Syllabus for the year 2013-2014 - DPS. Dissolution of a partnership firm: types of dissolution of a firm. Settlement of accounts - preparation of realization account, and other related accounts: capital accounts of partners and cash/bank a/c (excluding piecemeal distribution, sale to a company and insolvency of partner(s)).
Download CBSE class 12 Accountancy study material in PDF format. MyCBSEguide provides solved papers, board question papers, revision notes and NCERT solutions for CBSE class 12 Accountancy. The topics included are Fundamentals of partnership and Goodwill, Change in Profit sharing ratio of existing Partners, Admission of a Partner, Retirement and Death of a Partner, Dissolution of Partnership, Company Accounts Issue of Shares, Company Accounts Issue of Debentures, Redemption of Debentures, Financial Statements & Analysis of Financial Statements, Tools of Financial Analysis Accounting Ratios and Cash Flow Statement.
Part A: Accounting for Partnership Firms and Companies ( 60 Marks)
Unit 1: Accounting for Partnership Firms
- Partnership: features, Partnership Deed.
- Provisions of the Indian Partnership Act 1932 in the absence of partnership deed.
Fixed v/s fluctuating capital accounts. Preparation of Profit and Loss, Appropriation account- division of profit among partners, guarantee of profits.
- Past adjustments (relating to interest on capital, interest on drawing, salary and profit sharing ratio).
- Goodwill: nature, factors affecting and methods of valuation - average profit, super profit and capitalization.
Scope: Interest on partner's loan is to be treated as a charge against profits.
Accounting for Partnership firms – Reconstitution and Dissolution.
- Change in the Profit Sharing Ratioamong the existing partners - sacrificing ratio, gaining ratio, accounting for revaluation of assets and reassessment of liabilities and treatment of reserves and accumulated profits. Preparation of revaluation account and balance sheet.
- Admission of a partner - effect of admission of a partner on change in the profit sharing ratio, treatment of goodwill (as per AS 26), treatment for revaluation of assets and reassessment of liabilities, treatment of reserves and accumulated profits, adjustment of capital accounts and preparation of balance sheet.
- Retirement and death of a partner: effect of retirement / death of a partner on change in profit sharing ratio, treatment of goodwill (as per AS 26), treatment for revaluation of assets and reassessment of liabilities, adjustment of accumulated profits and reserves, adjustment of capital accounts and preparation of balance sheet. Preparation of loan account of the retiring partner.
Calculation of deceased partner's share of profit till the date of death. Preparation of deceased partner’s capital account, executor’s account and preparation of balance sheet.
- Dissolution of a partnership firm: types of dissolution of a firm. Settlement of accounts - preparation of realization account, and other related accounts: capital accounts of partners and cash/bank a/c (excluding piecemeal distribution, sale to a company and insolvency of partner(s)).
Note:
- The realized value of each asset must be given at the time of dissolution.
In case, the realization expenses are borne by a partner, clear indication should be given regarding the payment thereof.
Unit-2: Accounting for companies( 60 Periods)
Accounting for Share Capital
- Share and share capital: nature and types.
- Accounting for share capital: issue and allotment of equity shares, private placement of shares, Employee Stock Option Plan (ESOP). Public subscription of shares - over subscription and under subscription of shares; issue at par and at premium, calls in advance and arrears (excluding interest), issue of shares for consideration other than cash.
- Accounting treatment of forfeiture and re-issue of shares.
- Disclosure of share capital in company‟s Balance Sheet.
Accounting for Debentures
- Debentures: Issue of debentures at par, at a premium and at a discount. Issue of debentures for consideration other than cash; Issue of debentures with terms of redemption; debentures as collateral security-concept, interest on debentures.
- Redemption of debentures: Lump sum, draw of lots and purchase in the open market (excluding ex-interest and cum-interest). Creation of Debenture Redemption Reserve.
Note: Related sections of the Indian Companies Act,2013 will apply.
Part B: Financial Statement Analysis ( 20 Marks)
Unit 3: Analysis of Financial statement
- Financial statements of a company: Statement of Profit and Loss and Balance Sheet in the prescribed form with major headings and sub headings (as per Schedule III to the Companies Act, 2013).
Scope: Exceptional items, extraordinary items and profit (loss) from discontinued operations are excluded.
- Financial Statement Analysis: Objectives, importance and limitations.
- Tools for Financial Statement Analysis: Comparative statements, common size statements, cash flow analysis, ratio analysis.
- Accounting Ratios: Objectives, classification and computation.
Liquidity Ratios: Current ratio and Quick ratio.
Solvency Ratios: Debt to Equity Ratio, Total Asset to Debt Ratio, Proprietary Ratio and Interest Coverage Ratio.
ActivityRatios: Inventory Turnover Ratio, Trade Receivables Turnover Ratio, Trade Payables Turnover Ratio and Working Capital Turnover Ratio.
Profitability Ratios: Gross Profit Ratio, Operating Ratio, Operating Profit Ratio, Net Profit Ratio and Return on Investment.
Note: Net Profit Ration is to be Calculated on before and after tax.
Unit 4: Cash flow statement
- Meaning, objectives and preparation (as per AS 3 (Revised) (Indirect Method only)
Scope:
(i) Adjustments relating to depreciation and amortization, profit or loss on sale of assets including investments, dividend (both final and interim) and tax.
(ii) Bank overdraft and cash credit to be treated as short term borrowings.
(iii)Current Investments to be taken as Marketable securities unless otherwise specified.
Project Work ( 20 Marks)
Note: Kindly refer to the Guidelines published by the CBSE.
OR
Part B: Computerised Accounting (60 Periods)
Unit 3: Computerised Accounting
Overview of Computerised Accounting System.
- Introduction: Application in Accounting.
- Features of Computerised Accounting System.
- Structure of CAS.
- Software Packages: Generic; Specific; Tailored.
Accounting Application of Electronic Spreadsheet.
Concept of electronic spreadsheet.
Features offered by electronic spreadsheet.
Application in generating accounting information - bank reconciliation statement; asset accounting; loan
repayment of loan schedule, ratio analysis
Data representation- graphs, charts and diagrams.
Concept of electronic spreadsheet.
Features offered by electronic spreadsheet.
Application in generating accounting information - bank reconciliation statement; asset accounting; loan
repayment of loan schedule, ratio analysis
Data representation- graphs, charts and diagrams.
Using Computerized Accounting System.
Steps in installation of CAS, codification and Hierarchy of account heads, creation of accounts.
Data: Entry, validation and verification.
Adjusting entries, preparation of balance sheet, profit and loss account with closing entries and opening entries. Need and security features of the system.
Steps in installation of CAS, codification and Hierarchy of account heads, creation of accounts.
Data: Entry, validation and verification.
Adjusting entries, preparation of balance sheet, profit and loss account with closing entries and opening entries. Need and security features of the system.
Database Management System (DBMS)
Concept and Features of DBMS.
DBMS in Business Application.
Generating Accounting Information - Payroll.
Concept and Features of DBMS.
DBMS in Business Application.
Generating Accounting Information - Payroll.
Part C: Practical Work ( 20 Marks)
Please refer to the guidelines published by CBSE.
Reconstitution of partnership
RETIREMENT OR DEATH OF A PARTNER
Very Short Questions.
Q1. In which case the following entries are required :
a) Partner’s Capital A/c Dr.
To Partners loan A/c
b) Stock A/c Dr.
Building A/c Dr.
To Revaluation A/c
Q2. Journalise the following :-
(a) Chander, Tara and Ravi were partners in a firm sharing profits in the ratio of 2:1:2 on 15.02.2007 Cander died and the new profit sharing ratio between Tara & Ravi was 4:11. On Chander’s death the goodwill of the firm was valued at Rs. 90,000.
Calculate gaining ratio and pan necessary journal entry for the treatment of goodwill on Chander’s death without opening goodwill account.
(b) A, B, C and D are partners sharing profits in the ratio of 3:4:3:2. On the retirement of C, the goodwill was valued at Rs. 60,000. A, B and D decided to share future profits equally. Pass the necessary journal entry for the treatment of goodwill, without opening Goodwill Account.
Long Answer Questions.
Q3. A and B are partners sharing profits in the ratio of A 3/6, B 2/6 and transfer to reserve 1/6.
Their Balance Sheet on 31st December 2007 was as follows:
Liabilities | Amount (in Rs.) | Assets | Amount (in Rs.) |
Employee’s Provident Fund Reserve Fund Sundry Creditors Profit and Loss A/c Capitals : A 80,000 B 40,000 | 18000 12000 10,000 24,000 120,000 | Goodwill Plant Patents Stock Investment Debtors : 20,000 Less:- Provision 400 Cash | 15,000 90,000 4,400 30,000 20,000 19,600 5,000 |
184,000 | 184,000 |
B retires on 1st Jan 2008.The terms were:-
(i) Goodwill is to be valued at 50,000.
(ii) Value of patents is to be increased by Rs. 3,000 but plant was found over-valued by Rs 15,000.
(iii) Prevision for doubtful debts should be 5% on Debtors and prevision for discount should also be made on Debtors & creation at 3%.
(iv) Out of insurance which was entirely debited to profit and loss Account Rs 870 be carried forward as unexpired insurance.
(v) Investments were revalue at Rs 16,000. Half of these investments were taken over by B.
(vi) There is a claim for workmen’s compensation to the extent of Rs 5,ooo.
B was paid of in full. A borrowed the necessary money from the bank on the security of plant and stock to pay off B. Prepare Revaluation A/C .capital A/c of B/S of A.
Q4. X, Y, and Z were in partnership sharing profits in the ratio of 3: 2: 1 they had
taken a Joint life policy of Rs.50,000 , whose surrender value on 1st Jan 2007 was
Rs.18,000 . On this date B/S is as follows:-
Liabilities | Amount (Rs.) | Assets | Amount(Rs.) |
Provision for Doubtful Debts Sundry creditors Capitals: X 78,750 Y 70,000 Z 61,250 | 1,300 15000 2,10,000 | Cash at bank Debtors Stock Machinery Land and Building | 10,000 16,000 20,300 60,000 1,20,000 |
2,26,3000 | 2,26,300 |
Z retires on the above date and the new profit sharing ratio between X and Y will be 5:4 following terms were agreed:
1) Land and buildings be reduced by 10%.
2) Out of the Insurance premium paid during the year Rs.5,000 be carried forward as
unexpired.
3) There is no need of any provision for doubtful debts.
4) Goodwill of the firm be valued at Rs.36,000 and adjustment in this respect be made
without raising a goodwill a/c . The joint life policy was also not to appear in the
Balance sheet.
5) X and Y decided that their Capital will be adjusted in their new profit sharing ratio by bringing in or paying cash to the partners is a/c will be transfered to his loan a/c.
a) Pan necessary journal entries : Prepare the capital accounts and the new balance sheet.
Q5. A, B and C are partners sharing profits and losses in the ratio of 5:3:2. There balance
Sheet as at 31st December 2007 was a follows:-
Liabilities | Rs. | Assets | Rs. |
Sundry creditors Provision for Doubtful Debts Capitals:- A 1,40,000 B 90,000 C 76,000 | 29,000 5,000 3,06,000 | Goodwill Debtors Investments Land and building Machinery Patents Cash at bank | 24,000 80,000 30,000 1,42,000 50,000 4000 10,000 |
3,40,000 | 3,40,000 |
Q6. What are the methods of ascertaining the amount of profit to be given to the executors of deceased partner , if the death of a partner occurs on any day during the year .Explain.
Q7. On 31st Dec 2007. The balance sheet of P,Q and R who were partners in a firm was as under.
Liabilities | Rs. | Assets | Rs. |
Sundry creditors Reserve fund Capital:- P 15,000 Q 10,000 R 10,000 | 25,000 20,000 35,000 | Building Investment Debtors Bill Receivable Stock Cash | 26,000 15,000 15,000 6,000 12,000 6,000 |
80,000 | 80,000 |
The partnership dead provides that the profit be shared in the ratio of 2:1:1 and that in the event of death of any partner, his executors will be entitled to be paid out :
a) The capital to his credit at the date of last Balance sheet.
b) His proportion of Reserve at the date of last Balance sheet;
c) Retired on the above date as per the following condition:-
(i) Goodwill of the firm is to be valued at three years Purchase of the average profits of the last five years which were Rs.20,000; Rs.12,000;Rs.30,000;Rs6,000(loss) and Rs.34,000 respectively.
(ii) Machinery is to be reduced to Rs.40,000 of patents are valueless.
(iii) There is no need of any provision for doubtful debts .
(iv) An unclaimed liability of Rs.2,000 is to be written off.
(v) Out of the total insurance premium paid Rs.1,000 be treated as pre paid .
(vi) Investment are revalued at Rs.16,000 and these are taken by C at this value .
Entire Sum payable to C is to be brought in by A and B in such a way so as to
Make their capitals proportionate to their new profit sharing ratio which is 2:1.
Prepare Revolution Account .Capital A/c and the opening Balance sheet of A and B
(c) His proportion of profits to the date of death based on the average profits of the last three
completed years, plus 10% and.
(d) By way of goodwill, his proportion of the total profits for the three preceding years.
(e)
(f) The net profit for the last three years were:-
2005 -Rs.16,000 2006 – Rs16,000 2007 –Rs15,400 |
R died on 1st April 2008.He had withdrawn Rs. 5,000 to the date of his death .The investments were sold at par and Rs. Executors were paid off.
Prepare partners capitals Accounts, Rs Executors Accounts and Balance sheet of the surviving partners P and Q.
Testing of Knowledge
Q8. Enumerate the items for which the representatives of decreased partners are entitled to receive.
Q9. Ramesh wants to retire from the firm .The profits on Revaluation on that date were
Rs.12,000. Mohan and Rahul want to share this in their new profit sharing ratio 3:2.
Ramesh wants this to be shared equally. How are the Profis to be shared? Give reasons.
Q10. From the following particulars.
Calculate the new profit –sharing ratio of the partners:-
(a) A , B and C are partners in a firm sharing profits and losses in the ratio of 5:3:2 B retires
from firm and his share was taken up by A and C in the ratio of 2:1.
(b) P , Q and R were partners sharing profits in the ratio of 5:4:1. P retires from the firm.