﻿ What is the basis for preparing an Income and Expenditure Account in the case of Not-for-Profit Organizations.  from Class 12 CBSE Previous Year Board Papers | Accountancy 2011 Solved Board Papers

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# CBSE Class 12 Accountancy Solved Question Paper 2011

1.

Distinguish between Fixed and Fluctuating Capital Accounts.

In fixed capital account method, two separate accounts are maintained for each partner capital account and current account. In fluctuating capital accounts method, each partner maintains only one account, i.e. capital account

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2.

Pass the necessary Journal entry when 10,000 debentures of Rs. 100 each are issued as collateral security against a Bank loan of Rs. 8,00,000.

 Particulars LF Debit (Rs) Credit (Rs) Debenture suspense a/c                       Dr        To Debenture a/c  (Being 10,000 debentures of Rs 100 each  issued as a collateral security against a bank loan of Rs 8,00,000) 10,00,000 10,00,000
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3.

A business has earned average profits of Rs. 1,00,000 during the last few years and the normal rate of return in similar business is 10%. Find out the value of Goodwill by (i) Capitalisation of super profit method and (ii) Super profit method if the goodwill is valued at 3 years purchase of super profit. The assets of the business were Rs. 10,00,000 and its external liabilities Rs. 1,80,000.

(i) Calculation of good will by capitalisation of super profit method:

* Average profit earned by the firm = Rs 1,00,000

 * Capital employed = Asset – Liabilities

= 10,00,000 – 1,80,000= 8,20,000

 * Normal profit = capital employed* normal rate of return

= 8,20,000* 10% = 82,000

 * Super Profit = Average profit earned – Normal profit

= 1,00,000- 82,000 = 18000

 * Good will = Capitalisation of super profit = Super profit * 100/ Normal rate of return

=18000*100/10 =Rs 1,80,000/-

(ii) Calculation of good will by super profit method:

Average profit earned by the firm = 1,00,000
Normal profit earned = capital employed * normal rate of return

Capital employed = asset – liabilities = 8,20,000
Normal profit = 820000* 10/100 =82,000

Super profit = average profit – normal profit
= 1,00,000 – 82,000 = 18,000

Goodwill valued at 3 years purchase of super profit = 18000* 3 = Rs 54000/-

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4.

Y Ltd. purchased furniture costing Rs. 1,35,000 from A. B. Ltd. The payment was made by issue of Equity Shares of Rs. 10 each at a discount of Rs. 1 per share. Pass necessary Journal entries in the books of Y Ltd.

Journal Entries

 Particulars LF Debit Credit Furniture a/c                                 Dr               To A.B Ltd  (Being furniture purchased from A.B Ltd) 1,35,000         1,35,000    15,000 1,35,000             150000 A.B Ltd a/c                                   Dr Discount on issue of shares a/c      Dr                To Equity share capital a/c  (Being issue of15000 fully paid equity shares of Rs 10 each at a discount Rs 1 per share.)

Working note: Number of equity shares to be issued=135000/9 (Price of a share after 1 Rs discount) = 15000 shares.

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5.

From the following item of Receipts & Payments A/c. of Young Ladies Club, prepare an Income and Expenditure Account for the year ended 31-3-2010.

Rs.

Salaries paid                                                                                              50,000

Lighting and Heating                                                                                 5000

Printing and Stationery (including Rs. 500 for the previous year)             3500

and Rs 5,000 for the previous year)                                                          40,000

Net proceeds of Refreshment Room                                                          45,000

Miscellaneous expenses                                                                            16,000

Interest paid on Loan for half year                                                            1,200

Rent and Rates (including Rs. 1,000 prepaid)                                         7,5000

Subscriptions in arrears on 31-3-2010 were Rs. 8,000 and Half year's interest on loan was also outstanding.

 Expenditure Amount (Rs) Income Amount (Rs) To Salary paid Lighting and heating Printing and Stationary Less   Miscellaneous expenses Interest paid on Loan for half year Add outstanding                                                                       Rent and Rates Less prepaid   To surplus a/c 3,500 500 50,000 5,000     3,000   16,000     2,400     6,500 7,600 By Subscription received Less received in advance Less previous year   Add arrears   Net proceeds of Refreshment Room  Locker rent received 40,000   2,000   5,000 41,000   45,000   4,500 1200 1200 33,000 8,000 7,500 1,000 90,500 90,500
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6.

State the two main rights that a newly admitted partner acquires in the firm.

The two main rights a newly admitted partner acquires in a firm are:
i. Right to share the assets of the partnership firm; and
ii. Right to share the profits of the partnership firm

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# 7.What is the basis for preparing an Income and Expenditure Account in the case of Not-for-Profit Organizations.

The Income and Expenditure Account in the case of not for profit organisations is prepared on accrual basis with the help of Receipts and Payments Account.

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8.

A and B are partners in a firm sharing profits and losses in the ratio of 3:2. The following was the Balance Sheet of the firm as on 31-3-2010.

 Liabilities Amount Rs Assets Amount Rs Capital        A                     B 60,000   20,000 Sundry Assets 80,000 80,000 80,000

The profits Rs. 30,000 for the year ended 31-3-2010 were divided between the partners without allowing interest on capital @ 12% p.a. and salary to A @ Rs. 1,000 per month. During the year A withdrew Rs. 10,000 and B Rs. 20,000. Pass the necessary adjustment journal entry and show your working clearly.

 Date Particulars LF Debit (Rs) Credit (Rs) B’s capital a/c                                    Dr                     To a’s capital a/c   (being interest on capital and salary unpaid adjusted.) 5280 5280

Working Notes

Calculation of opening Capital

 PARTICULARS A B Capital closing balance Less profit     Add drawings   Capital opening balance 60,000 18,000 20,000 12,000 42,000 10,000 8,000 20,000 52,000 28,000

Calculation of Net amount to be adjusted:

 Particulars Partner A’s a/c Partner B’s a/c Firm a/c Dr Cr Dr Cr Dr Cr Interest on capital 6,240 3,360 9,600 Salary to A 12,000 12,000 12,960 8,640 21,600 Total 12,960 18,240 8,640 3,360 21,600 21,600 Net amount to be adjusted 5280(Cr) 5280(Dr)

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9.

How does the market situation affect the value of goodwill of a firm?

The monopoly condition of a market and limited competition helps a firm to earn huge profit which will ultimately lead to higher value of goodwill.

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10.

From the following information of a club, show the amounts of match expenses and match fund in the Financial Statements of the Club for the years ended on 31st March, 2009 and 31st March, 2010.

 Details                                                                               Amount Rs. Match expenses (paid during the year 2009 - 2010)                                      30,000 Match Fund (as on 31-3-2009)                                                                     17,000 Donation for Match Fund (Received during the year 2009-2010                         9,000            Proceeds from the sale of match tickets (Received during the year 2009-2010)  3,000

Balance sheet as on 31-3-2010

 Liabilities Amount (Rs) Assets Amount (Rs) Match fund as on 31-3-2009                              Add Donation received during the year 09-10                                  Proceeds from sale of match ticket during 09-10                                                                                                             Less Match expenses during the period     Transfer to income and expenditure account. 17000     9000     3000     29,000 30,000 (1000)

Income and Expenditure a/c for the year ended 31-3-2010

Dr                                                                                                                             Cr

 Expenditure Amount (Rs) Income Amount (Rs) To Match Expenses 1,000
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