ISC (Commerce) Class 12 - CISCE Question Bank Solutions for Accounts

State the following rules of DBMS.

Entity Integrity

State the following rules of DBMS.

Referential Integrity

Xylo Ltd. issued 9,000, 7% Debentures of ₹ 100 each at a certain rate of discount. After writing off the discount on the issue of debentures, the company was left with a balance of ₹ 35,000 in its Securities Premium out of the original amount of ₹ 71,000.

At what rate of discount did the company issue these Debentures?

The Annual Report of ITC Ltd., for the financial year 2021-22, showed Claims against the Company not acknowledged as debts of ₹ 880.58 crores including Third party claims arising from disputes relating to contracts aggregating ₹ 29.22 crores.

Mention the heading and the sub-heading under which this item would, have been shown in the Notes to Accounts accompanying the Balance Sheet of ITC Ltd. as at 31st March, 2022.

On 1^st April, 2022, the following balances appeared in the books of Alpha Pvt. Ltd.

The Debenture Redemption Investment, which was purchased by the company on 1^st April, 2022, was realised at 101% on the date of redemption and the debentures were redeemed on the due date. 

You are required to prepare the following accounts for the year 2022-23 in the books of Alpha Pvt. Ltd.

1. Debenture holders' Account.
2. Debenture Redemption Investment Account.

On 1^st April, 2022, Resorts Ltd. (a listed construction company) had 60,000, 5% Debentures of ₹ 100 each due for redemption at par on 31^st March, 2023.
As per the law, investment was made in a fixed deposit of a bank on 30th April, 2022, earning interest @ 5% per annum.
Tax @ 10% was deducted by the bank on the interest.

You are required to pass necessary journal entries in the year of redemption of debentures, including entries for interest on Debenture Redemption Investment. (Ignore the interest on Debentures)

On 1^st April, 2020, Anish started a business with a capital of ₹ 3,00,000.
During the three years ending 31^st March, 2023, the results of his business were:

From the year 2020-21 to the year 2022-23, Anish withdrew ₹ 30,000 from the firm for his personal use.
On 1st April, 2023, he admitted Danish into partnership on the following terms:

1. Goodwill of the firm to be valued at two years' purchase of the average profits of the last three years.
2. Danish to have 1/4 share in the future profits.
3. Danish's capital to be equal to 1/4 of Anish's capital determined on 1^st April, 2023, after the goodwill compensation has been taken into account.

You are required to give:

1. The formula to calculate goodwill by the Average Profit Method.
2. The value of self-generated goodwill of the firm.
3. Danish's capital contribution.

Amit and Iqbal are partners in a business. Their partnership deed contained the following clauses:

1. Interest on drawings to be charged @ 6% per annum.
2. Amit to get a salary of ₹ 1,000 per month.
3. Iqbal to get an annual commission of ₹ 10,000.
4. Any partner taking a loan from the firm to be charged interest on it @ 8% per annum.

You are required to:

1. Give the closing journal entry for interest on loan due from Amit.
2. Find the opening capital balance of the partners on 1^st April, 2022, by preparing the Partners' Capital Accounts for the year 2022-23.

What is the difference between Total Assets and Current Liabilities?

A company has a Quick Ratio of 1.8 : 1. Mention whether this ratio will improve/reduce/not change after it sells a machine worth ₹ 1,20,000 at a loss of ₹ 30,000.

State whether creditors would prefer lending to a company with a high Debt-Equity Ratio or a low Debt-Equity Ratio. Give a reason.

An extract of the Balance Sheet of Nova Ltd. shows:

During the year 2022-23, the company raised its share capital by issuing bonus shares to the shareholders at the beginning of the year in the ratio of 1 : 5 (one bonus share was issued for every five equity shares). The balance shares were issued for cash to the public.

How many shares were issued for cash by the company?

Following is the Comparative Income Statement of Violet Ltd. for the years ending 31-3-2023 and 31-3-2022.

You are required to present the Comparative Income Statement in its complete form after calculating the missing information represented by "??".

Calculate the Current Ratio (up-to two decimal places) of Windlas Biotech Ltd. from the following extract of its Annual Report of 2021-22.

State any two requirements that should be considered before making an investing decision to choose between 'Server database' or 'Desktop database'.

Choose the components required to calculate goodwill of a firm by Capitalisation of Average Profits Method.

P: The normal profits of a similar firm in the industry

Q: The average profits of the firm

R: The number of years purchase

S: The actual capital employed in the business

Aman and Vinod are partners in a firm. Their Balance Sheet showed:

Gross Debtors: ₹ 1,52,000

Provision for doubtful debts: ₹ 1,000

On Milin’s admission as a new partner, the assets and liabilities are to be revalued as:

1. Unaccounted accrued income of ₹ 10,000 to be provided for.
2. Bills Payable of ₹ 10,000 which were recorded, to be discharged at a rebate of 10%.
3. Debtors of ₹ 2,000 to be irrecoverable.
4. Provision for doubtful debts to be provided @ 2% of the debtors.

What is the net effect of revaluation of assets and liabilities?

The Adani family has raised their stake in Ambuja Cements by the conversion of 21.20 crore warrants into shares in a transaction that will see them infusing nearly ₹ 6,661 crore.

1. What is a share warrant?
2. Mention the head under which Money received against Share Warrants is shown in the Balance Sheet of a company prepared as per Schedule III of the Companies Act, 2013.

On 1st April, 2023, Ruth Ltd. purchased Plant and Machinery for ₹ 11,00,000 from Pablo Ltd. payable as to ₹ 1,00,000 by accepting a promissory note and the balance by an issue of 11% Debentures of ₹ 100 each at a premium of 10% to be redeemed at a premium of 2 % after six years. You are required to pass journal entries in the books of Ruth Ltd. only to record the payment made to Pablo Ltd.

Ronny Ltd. (an unlisted construction company) redeems its 7,000, 10% Debentures of ₹ 100 each at a premium of 5% in instalments, as follows:

You are required to prepare for the year 2023-24:

1. General Reserve Account.
2. Debenture holders’ Account. (Ignore interest on Debentures).