Category: CBSE Sample Papers

Students can access the CBSE Sample Papers for Class 12 Accountancy with Solutions and marking scheme Term 2 Set 9 will help students in understanding the difficulty level of the exam.

CBSE Sample Papers for Class 12 Accountancy Standard Term 2 Set 9 with Solutions

Maximum Marks: 40
Time allowed: 2 Hours

General Instructions

• This question paper comprises two Parts -A and B. There are 12 questions in the question paper. All questions are compulsory.
• Question nos. 1 to 3 and 10 are Short Answer Type I Questions carrying 2 marks each.
• Question nos. 4 to 6 and 11 are Short Answer Type II Questions carrying 3 marks each.
• Question nos. 7 to 9 and 12 are Long Answer Type Questions carrying 5 marks each.
• There is no overall choice. However, an internal choice has been provided in 3 questions of three marks and 1 question of five marks.

Part A
(Accounting for Not-for-Profit Organisations, Partnership Firms, and Companies)

Short Answer (SA) Type I Questions (2 Marks)

Question 1.
Mayankar Ltd. purchased the business of Sabhyata Ltd. consisting of sundry assets of ₹ 8,60,000 and creditors of ₹ 1,40,000. ₹ 1,20,000 was paid in cash and for the balance, 6% debentures were issued at par. Pass the necessary journal entries.
Answer:

Question 2.
What is meant by issue of debentures for consideration other than cash? How are these debentures disclosed in the balance sheet?
Answer:
When debentures are issued to vendors against purchase of assets or against purchase of business, it is termed as issue of debentures for consideration other than cash. In this case, consideration for issue
of debentures is not cash but the assets or business.
Disclosure in the Balance Sheet Debentures issued for consideration other than cash appear under the head ‘non-current liabilities’ and sub-head ‘long-term borrowings’ in the balance sheet.

Question 3.
Vidya Ltd. invited applications for issuing 3,000, 9% debentures of ₹ 100 each at a premium of ₹ 50 per debenture. The full amount was payable on application. Applications were received for 4,000 debentures. Applications for 1,000 debentures were rejected and application money was refunded.
Debentures were alloted to the remaining applicants. Pass necessary journal entries for the above transactions in the books of Vidya Ltd.
Answer:

Short Answer (SA) Type II Questions (3 Marks)

Question 4.
Meena, Teena and Reena were partners sharing profits and losses in the ratio of 2 : 2 :1. Reena died on 31st March, 2021. Profits and sales for the calendar year 2020 were ₹ 2,00,000 and ₹ 20,00,000 respectively. Sales during January to March, 2021 were ₹ 1,50,000. You are required to calculate share of profit of Reena upto the date of her death.
Answer:
Percentage of profits to sales for the year ended 31st March, 2021 = \(\frac{2,00,000}{20,00,000}\) = 10%
Profits upto the date of Death = 1,50,000 x 10% = ₹ 15,000
Reena’s share of profit =15,000 x \(\frac{1}{5}\) = ₹ 3,000

Question 5.
Khushi, Avni and Reeta are partners sharing profits and losses in the ratio of 5 : 3: 2 respectively. On 31st March, 2020 their balance sheet was as under
Balance Sheet
as at 31st March, 2020

Reeta retires on the above date. Goodwill of the firm valued at ₹ 2,50,000. Record the necessary journal entries on Reeta’s retirement, assuming that goodwill is to be adjusted through the partner’s capital accounts.
Or
Arif and Varun were partners in a firm sharing profits in the ratio of their capitals.
On 31st March 2021, their balance sheet was as follows
Balance Sheet
as at 31st March, 2021

On the above date, the firm was dissolved.
(i) Debtors were realised at a discount of 5%. 50% of the stock was taken over by Arif at 10% less than the book value. The remaining stock was sold for ₹ 65,000.
(ii) Furniture was taken over by Varun for ₹ 1,35,000. Machinery was sold as scrap for ₹ 74,000.
(iii) Creditors were paid in full.
(iv) Expenses on realisation ₹ 8,000 were paid by Arif.
Prepare realisation account.
Answer:


Working Notes

2. Recta’s share of goodwill = \(\frac{2}{10}\) x 2,50,000 = 50,000. Gaining Ratio = 5:3
Question 6.
VK Ltd. raised a loan of ₹ 80,000 from America Bank, for which the company placed with the bank ₹ 1,00,000, 9% debentures as collateral security. As per the terms, the bank is obliged and bound to immediately release the debentures, as soon as the loan is repaid.

How will you show the debentures in the balance sheet of the company assuming that the company has recorded the issue of debentures as collateral in the books? Also pass the journal entries.
Or
Mehak Ltd. issued 5,000,9% debentures of ₹ 100 each at par for cash which are redeemable at 10% premium. It also issued 3,000,10% debentures of ₹ 100 each at 10% premium for cash which are redeemable at 10% premium. Pass necessary journal entries.
Answer:

Long Answer (LA) Type Questions (5 Marks)

Question 7.
From the following receipts and payments account and additional information provided, prepare the income and expenditure account of Sardar Patel Education Society for the year ended 31st March 2020.

Receipts	Amt (₹)	Payments	Amt (₹)
To Balance b/d	75,000	By Rent	4,750
To Interest on Investments	2,500	By Postage Expenses	750
To Subscriptions	90,000	By 10% Investment (1st July)	25,000
To Sale of Newspapers	1,500	By Payment to Creditors	1,750
To Sale of Computers	7,500	By Advertisement Expenses	5,500
To Donations	37,500	By Salaries	1,72,500
		By Balance c/d	3,750
	2,14,000		2,14,000

Additional Information
(i) Subscriptions due on 31st March, 2019 and 31st March, 2020 were ₹ 1,750 and ₹ 3,100 respectively.
(ii) Subscriptions paid in advance as at 31st March, 2019 were ₹ 900 and on 31st March, 2020 were ₹ 750.
(iii) The book value of computers on 1st April, 2019 was ₹ 25,000 of which half the computers were sold during the year.
(iv) The book value of investments on 1st April, 2019 was ₹ 37,500 and the rate of interest was 10% per annum.
(v) Creditors on 31st March 2019 were ₹ 3,750.
(vi) Outstanding expenses for rent, postage and salaries for the current year were ₹ 450, ₹ 200 and ₹ 7,500 respectively.
Answer:


3. Creditors on 31st March, 2019 were ₹ 3,750 out of which ₹ 1,750 paid during the year. Remaining creditors are ₹ 2,000. Payment to creditors will not be recorded in current year income and expenditure account.
4. Donations have been treated as of revenue nature.

Question 8.
Following is the balance sheet of Harsh, Mahima, and Karan as at 31st March 2020.
Balance Sheet
as at 31st March 2020

On 31st March, 2020, Karan desired to retire from the firm and the remaining partners decided to carry on the business.
It was agreed to revalue the assets and re-assess the liabilities on that date, on the following basis
(i) Land and building be appreciated by 30%.
(ii) Machinery be depreciated by 30%.
(iii) There were bad debts of ₹ 35,000.
(iv) The claim on account of workmen compensation fund was estimated at ₹ 15,000.
(v) Goodwill of the firm was valued at ₹ 21,000 and Karan’s share of goodwill was adjusted against the capital accounts of the continuing partners Harsh and Mahima who have decided to share future profits in the ratio 3: 4 respectively.
(vi) Amount due to Karan be settled by paying ₹ 1,00,000 in cash and balance by transferring to his loan account which will be paid later on.
Prepare revaluation account, capital accounts of partners and balance sheet of the new firm after Karan’s retirement.
Or A, B and C are partners sharing profits in the ratio of 3:1 :1. On 31st March, 2021 they decided to dissolve their firm. On that date their balance sheet was as under

The assets were realized and the liabilities were paid as under
(i) A agreed to pay his brother’s loan.
(ii) Investments realised 20% less.
(iii) Creditors were paid at 10% less.
(iv) Building was auctioned for ₹ 3,55,000. Commission on auction was ₹ 5,000.
(v) 50% of the stock was taken over by B at market price which was 20% less than the book value and the remaining was sold at market price.
(vi) Dissolution expenses were ₹ 8,000. ₹ 3,000 were to be borne by the firm and the balance by C. The expenses were paid by him.
Prepare realization account, bank account, and partners’ capital accounts.
Answer:



Working Notes
1. Calculation of Gaining Ratio
Gaining R.atio = New Share – Old Share
Harsh = \(\frac{3}{7}-\frac{1}{3}=\frac{9-7}{21}=\frac{2}{21}\) , Mahima = \(\frac{4}{7}-\frac{1}{3}=\frac{12-7}{21}=\frac{5}{21}\)
Gaining Ratio =2 : 5

2. Karan’s Share in Goodwifi
Karan’s share of goodwill =21,000 x \(\frac{1}{3}\) =₹ 7,000
Karan’s share of goodwill i.e., ₹ 7,000 will be adjusted by Harsh and Mahima in gaining ratio,
i.e. 2 : 5.
Harsh=7000 x \(\frac{2}{7}\)= ₹ 2,000,Mahima =7,000 x \(\frac{5}{7}\) = ₹ 5,000


Question 9.
The following is the receipts and payments account of Queen’s Club for the year ended 31st March, 2020.
Receipts and Payments Account

Additional Information
(i) Subscriptions include ₹ 6,000 for 2018-19 and ₹ 9,000 for 2020-21.
(ii) Stock of stationery on 31st March 2019 and 2020 was ₹ 3,600 and ₹ 2,700 respectively.
(iii) Stock of sports material at the beginning and end of the year was ₹ 6,000 and ₹ 10,500 respectively.
(iv) Rent includes ₹ 2,000 paid for March, 2019. Rent for March, 2020 is outstanding.
(v) Telephone expenses include ₹ 1,500 as quarterly rent up to 31st May 2020.
(vi) The value of building as on 31st March 2019, was ₹ 4,00,000 and you are required to write-off depreciation at 10%.
(vii) The value of investments on 31st March 2019 was ₹ 5,00,000 and the club made similar additional investments during the year on 1st October 2019.
You are required to prepare the income and expenditure account of the club for the year ended 31st March 2020.
Answer:

Part B
(Analysis of Financial Statements)

Short Answer (SA) Type I Question (2 Marks)

Question 10.
State whether the following would result into inflow, outflow or no flow of cash.
(i) Sale of marketable securities at par.
(ii) Decrease in inventories by ₹ 4,000.
Answer:
(i) No flow of cash as marketable securities are cash equivalent.
(ii) Inventories are current assets so decrease in inventories will increase cash flow from operating activities.

Short Answer (SA) Type II Question (3 Marks)

Question 11.
Below is the statement of profit and loss for the year ended 2019 of XYZ Ltd. Prepare common size statement of profit and loss.


Or
From the following statement of profit and loss, prepare comparative income statement.
Statement of Profit and Loss
for the years ending 31st March 2019 and 2020

Answer:

Working Notes:
1. Percentage of Other Expenses = \(\frac{\text { Other Expenses }}{\text { Revenue from Operations }}\) x 100
15 = \(\frac{7,50,000 \times 100}{\text { Revenue from Operations }}\) Revenue from Operations = ₹ 50,00,000
2. Percentage of Other income = \(\frac{3,00,000}{50,00,000} \) x 100 = 6%

Long Answer (LA) Type Question (5 Marks)

Question 12.
From the following balance sheet of SS Ltd. prepare cash flow statement.
Balance Sheet
as at 31st March, 2019 and 2020


Additional Information
(i) Debenture interest paid ₹ 18,000.
(ii) Preference shares were issued at the end of the year.
Answer:


Notes:
1. It has been assumed that the tax provided during the previous accounting year ₹ 60,000 has
been paid during the current accounting year and the tax provided for 2019-20 is ₹ 84,000.
2. Bank overdraft’s treatment is a part of financing activities,

Working Note
Calculation of Net Profit before Tax and Extraordinary Activities

Particulars	Amt(₹)
Net Profit (24,000- 20,000)	4,000
(+) Transfer to General Reserve	10,000
Provision for Taxation	84,000
Proposed Dividend of Previous Year	1,00,000
	1,98,000

Students can access the CBSE Sample Papers for Class 12 Economic with Solutions and marking scheme Term 2 Set 7 will help students in understanding the difficulty level of the exam.

CBSE Sample Papers for Class 12 Economics Term 2 Set 6 with Solutions

General Instructions :

• This is a subjective question paper containing 13 questions.
• This paper contains 5 questions of 2 marks each, 5 questions of 3 marks each and 3 questions of 5 marks each.
• 2 marks questions are Short Answer Type Questions and are to be answered in 30-50 words.
• 3 marks questions are Short Answer Type Questions and are to be answered in 50-80 words.
• 5 marks questions are Long Answer Type Questions and are to be answered in 80-120 words.
• This question paper contains Case/Source Based Questions.

Maximum Marks: 40
Time: 2 Hours

Short Answer (SA) Type I Questions (2 Marks)

Question 1.
The saving function of an economy is S = -200 + 0.25Y. The economy is in equilibrium when income is equal to ₹2,000. Calculate investment expenditure at equilibrium level of income.
Answer:
At equilibrium, Savings (S) are equal to Planned Investment (I). It is given that,
S = -200 + 0.25Y
Equilibrium level of income is ₹2,000. Substituting the value of Y in the savings function, we get S = -200 + 0.25 x 2,000
S = -200 + 500 ⇒ S = ₹300
or I = ₹300 [∵ at equilibrium level of income Savings (S) = Investment Expenditure (I)]
Thus, investment expenditure at equilibrium level of income is ₹300.

Question 2.
Explain the role of fiscal policy in fighting inflationary tendencies.
Or
Explain the role of fiscal policy in fighting deflationary tendencies.
Answer:
When government plans to spend less in the economy than its receipts as a part of fiscal policy, it impacts the flow of income in the economy by reducing quantity of money in circulation.

With a fall in the money supply, the purchasing power of people also fall, leading to a fall in the level of aggregate demand. As aggregate demand falls, the price level or the rate of inflation also falls.
Or
When government plans to spend more in the economy than its receipts as a part of fiscal policy, it impacts the flow of income in the economy by increasing quantity of money in circulation.

With increase in money supply, the purchasing power of people also rise, leading to an increase in the level of aggregate demand. As aggregate demand rises, the price level also rises and rate of deflation begins to fall.

Question 3.
Differentiate between intermediate goods and final goods.
Or
Write a short note on inventory investment.
Answer:
Difference between intermediate and final goods

Basis	Intermediate Goods	Final Goods
Meaning	They are those goods which are still within the production boundary i.e., either value need to be added or are meant for resale.	They are those goods which are out of the production boundary and available for direct consumption by their buyers.
Purpose or Use	These goods may be resold by the firms to make profits during the accounting year.	These goods are not resold by the firms to make profits during the accounting year.

Or
Inventory investment refers to the chage in the stock of finished goods, semi-finished goods and raw materials over the period of a year. This stock keeps varying over time. Inventory investment is the difference between closing stock and opening stock, i.e., Closing Stock – Opening Stock.

Question 4.
“Special Economic Zone (SEZ) increases foreign investment”. Explain.
Answer:
A Special Economic Zone (SEZ) is a geographical region that has economic laws different from a country’s typical economic laws. Usually, the goal is to increase foreign investment.

Question 5.
Observe the table given below and answer the question
Worker-Population Ratio in India, 2017-2018

Sex	Worker-Population Ratio
–	Total	Rural	Urban
Men	52.1	51.7	53.0
Women	16.5	17.5	14.2
Total	34.7	35.0	33.9

As per the given data, briefly explain why women participation in the workforce is less as compared to their male counterparts?

Explain briefly any two social effects of unemployment in India.
Answer:
Women participation in the workforce is less than the male counterparts majorly because of two reasons i.e., lack of skills among female population and most of the women are expected to look after their household coarse and thus, unable to participate in employment activities.
Or
The following are the social effects of unemployment (any two)

• It causes enormous sufferings to unemployed workers due to their nil income.
• Many social evils like dishonesty, immorality, drinking, gambling etc. are the outcomes of unemployment.
• It causes social disruption in the society and the government has to incur a heavy expenditure on law and order.

Short Answer (SA) Type II Questions (3 Marks)

Question 6.
Observe the data given below and answer the question

Sex Ratio at Birth, Child Sex Ratio and Sex Ratio at State-level (2012-13)

Source https://imvw.censusindia.gov.in/vital_statistics/AHS/AHS_report_partl.pdf It can be observed from the data that the child sex ratio and sex ratio at birth is less than overall sex ratio in all states of India. Give reason for this trend.
Answer:
India’s sex ratio is biased towards girl child. Even today, most of the people prefer a boy over a girl ji due to the fact that a boy will support their parents at old ages. Also, due to lack of proper health care, illiteracy and awareness, number of deaths are high at birth. Specially in states like 5rclisha, Bihar, Rajasthan and Uttarakhand. This disparity is higher due to above mentioned reasons.

Question 7.
Calculate intermediate consumption from the following data

Items	₹ (in lakhs)
Value of Output	600
Net Value Added at Factor Cost (NVAFC)	240
Sales Tax	45
Subsidy	15
Depreciation	60

Or
Calculate Net Value Added a Factor Cost (NVA_FC)

Items	₹ (in crores)
Sales	1,750
Purchase of Raw Material	1,300
Indirect Taxes	175
Consumption of Fixed Capital	125
Closing Stock	110
Opening Stock	115
Subsidies	10

Answer:
Gross Value Added at Market Price (GVA_MP)
= Net Value Added at Factor Cost (NVA_FC) + Depreciation + (Sales Tax – Subsidy)
= 240 + 60 + (45 – 15) = ₹330 lakh
Now, GVA = Value of Output – Intermediate Consumption 330 = 600 – Intermediate Consumption
⇒ Intermediate Consumption = 600 – 330 = ₹270 lakh
Or
Net Value Added at Factor Cost (NVA_FC) = Sales + Change-in-stock – Purchase of Raw Material – Consumption of Fixed Capital – (Indirect Taxes – Subsidies)
= 1,750 + (-5)-1,300 – 125 -(175 – 10)
= 1,750 – 5-1,300 – 125 – 165 = ₹155 crore
Note Change-in-stock = Closing Stock – Opening Stock = 110-115 = – ₹5 crore

Question 8.
Explain the relationship between Marginal Propensity to Consume (MPC) and Multiplier (K).

Direction Read the following text carefully and answer questions 9 and 10 given below

Health and education are today largely paid for and almost entirely administered by governmental bodies or non-profit institutions. The situation is worse for developing countries like India. This situation has developed gradually and is now taken so much for granted that little explicit attention is any longer directed to the reasons for the special treatment of education even in countries that are predominantly free enterprise in organisation and philosophy. The result has been an indiscriminate extension of governmental responsibility.

The role assigned to government in any particular field depends, of course, on the principles accepted for the organisation of society in general. In a free private enterprise exchange economy, government’s primary role is to preserve the rules of the game by enforcing contracts, preventing coercion, and keeping markets free.

Beyond this, there are only three major grounds on which government intervention is to be justified. One is ‘natural monopoly’ or similar market imperfection which makes effective competition (and therefore thoroughly voluntary exchange) impossible.

A second is the existence of substantial ‘neighbourhood effects,’ i.e., the action of one individual imposes significant costs on other individuals for which it is not feasible to make him compensate them or yields significant gains to them for which it is not feasible to make them compensate him—circumstances that again make voluntary exchange impossible.

The third derives from an ambiguity in the ultimate objective rather than from the difficulty of achieving it by voluntary exchange, namely, paternalistic concern for children and other irresponsible individuals. The belief in freedom is for ‘responsible’ units, among whom we include neither children nor insane people.

In general, this problem is avoided by regarding the family as the basic unit and therefore, parents as responsible for their children; in considerable measure, however, such a procedure rests on expediency rather than principle. The problem of drawing a reasonable line between action justified on these paternalistic grounds and action that conflicts with the freedom of responsible individuals is clearly one to which no satisfactory answer can be given.

Source https://zmvw.edchoice.org/who-we-are/our-legacy/articles/the-role-of-government-in-education/
Answer:
Relationship between MFC and Multiplier (K)
The value of multiplier is determined by the value of MPC.
We know that, K = \(\frac{\Delta Y}{\Delta I}\)

K.ΔI = ΔY or Δl = \(\frac{\Delta Y}{K}[latex] or [latex]\frac{\Delta Y}{K}\) = ΔI

We also know that, Y = C + I or ΔY = ΔC + ΔI or ΔI = ΔY – ΔC

On putting the value of ΔI from equation (ii) in the equation (i),
\(\frac{\Delta Y}{K}\) ΔY – ΔC

On dividing the above equation by ΔY,
\(\frac{\Delta Y}{K} \times \frac{1}{\Delta Y}=\frac{\Delta Y}{\Delta Y}-\frac{\Delta C}{\Delta Y} \text { or } \frac{1}{K}=1-\frac{\Delta C}{\Delta Y} \text { or } K=\frac{1}{1-\Delta C / \Delta Y}\)
Here, \(K=\frac{1}{1-M P C}\)
∵ \(\frac{\Delta C}{\Delta Y}=\mathrm{MPC}\)

This shows that there is a direct relationship between Multiplier (K) and Marginal Propensity to Consume (MPC). As the value of MPC rises, the value of multiplier also rises and vice-versa.

e.g., if MPC = 0.75 then, \(\frac{1}{1-0.75}\) = 4 and when the value of MPC = 0.80, then K = \(\frac{1}{1-0.80}\) = 5.

Question 9.
Deepak argues that in the present era, there is no need for government intervention in health sector. However, his friend Raju argues that health care services create social benefits and are an important component of human development and therefore, there is a need for government intervention in health sector. Decide with reasons, who is right in both of them?
Answer:
Raju is right, the government intervention in this sector is essential due to the following reasons

1. Expenditure on health, make substantial long-term impact and it cannot be reversed. Hence, this sector needs to be regulated.
2. Individual consumers of health services do not have complete information about the quality of services and their costs.
3. The government has to ensure that private institutions in this sector adheres to the standards stipulated by the government and charge the correct price.

Question 10.
Briefly explain the importance of social infrastructure.
Answer:
The significance of social infrastructure lies in the following (any three)

• It helps in building a healthy generation for future, that will be more productive and efficient. “Q
• Social infrastructure helps in the growth of literacy, which in turn helps in the growth of the society.
• It further helps in the skill formation, which is an important parameter in the context of economic XI growth.
• It helps in improving and providing a quality life to the people.
• Social infrastructure helps in the formation of human capital, which complements the physical capital to form an efficient system of growth and development.

Long Answer (LA) Type Questions (5 Marks)

Question 11.
Explain briefly the various development strategies of China.
Or
China has been able to develop rapidly as compared to India and Pakistan. Why?
Answer:
Certain development strategies of China are discussed below
(i) Great Leap Forward (GLF) Campaign This campaign, initiated in 1958, aimed at industrialising the country on a massive scale. People were encouraged to setup industries in their backyards. In rural areas, communes were started. Under the commune system, people collectively cultivated land.

(ii) Great Proletarian Cultural Revolution (1966-76) In 1965, Mao Tse Tung started a cultural revolution on a large scale. In this revolution, students and professionals were sent to work and learn from the countryside.

(iii) 1978 Reforms Since 1978, China began to introduce many reforms in phases. The reforms were initiated in agriculture, foreign trade and investment sector. In agriculture, lands were divided into small plots which were allocated to individual households.

They were allowed to keep all income from the land after paying taxes. In later phase, reforms were initiated in industrial sector. All enterprises which were owned and operated by local collectives in particular, were allowed to produce goods.

(iv) One-Child Norm The Chinese government introduced one-child norm to check its growing population. Couples were allowed to have only one child. In case, they gave birth to second child, social assistance was to be stopped.

(v) Special Economic Zones SEZs were set up for the development of the most backward regions of the country by encouraging new industries.

Or
China has been able to develop rapidly as compared to India and Pakistan due to the following reasons

• China initiated to implement the economic reforms in 1978 without any compulsion by the World Bank and IMF.
• China established infrastructure in the field of health and education that helped effectively in improving the social and economic indicators.
• China implemented land reforms that increased the productivity.
• There was long existence of decentralised planning.
• The size of individual enterprises was kept small.

All the factors mentioned above helped positively towards economic development.

Question 12.
Explain briefly the steps taken in estimating national income by the value added method. Also, explain any two precautions required to be taken in this method.
Answer:
Steps for measuring national income by value added method (product method) are enumerated below

Step 1 Classify All the Production Units The units are traditionally classified into primary, secondary and tertiary sectors which are further classified into sub-sectors like agriculture, manufacturing, banking, etc.

Step 2 Estimate NVA_FC of each industrial sector by taking the following sub-steps
(i) Estimate Value of Output It can be estimated by two ways
(a) A sum of sales and net addition to stocks (If entire output is not sold within the year).
(b) Quantity of output multiplied by price (If entire output is sold within the year).

(ii) Deduct Intermediate Consumption It should be deducted from the value of output to arrive at GVA_MP, (Intermediate consumption already includes imports).
(iii) Deduct Consumption of Fixed Capital It should be deducted from GVA_MP to arrive at
NVA_MP.
(iv) Deduct Net Indirect Tax It should be deducted from NVA to arrive at NVA_FC of an industrial sector.

Step 3 Take the sum of NVA_FC of all the industrial sectors of the economy. By doing so, we will arrive at net domestic product at factor cost. ENVA_FC = NDP_FC

Step 4 Add net factor income from abroad to NDP_FC to arrive at National Income.

National Income (NNP_FC) = NDP_FC + Net Factor Income from Abroad (NFIA)

Precautions to be taken while computing national income by this method are given below

• Take the value of final product only i.e., intermediate goods not to be included.
• Do not include exports, if total sales are given.

Question 13.
(i) Calculate investment expenditure from the following data about an economy which is in equilibrium
National Income = ₹1,000
Marginal Propensity of Save = ₹0.20
Autonomus Consumption Expenditure = ₹100

(ii) Free play of market mechanism is often talked about in economic theories of both microeconomics and macroeconomics. This is consideied as an efficient system that doesn’t require involvement of authorities to correct any economics discomforts. Briefly explain the macroeconomic automatic adjustment mechanism.
Answer:
(i) Given, Y = ₹1,000
MPS = 0.20, \(\bar{C}\) = ₹100, I = ?
b or MPC = 1 – MPS
= 1 – 0.20 = 0.80
Y = C +1
or Y = \(\bar{C}\) + bY +1
1,000=100 + 0.80 x 1,000 + I
I = 1,000 – 900, I = 100

(ii) When Aggregate Supply is greater than Aggregate Demand (AS > AD) or when Aggregate Demand is greater than Aggregate Supply (AD > AS), there are auto-mechanisms in a free market economy that tend to restore the equality between Aggregate Supply and Aggregate Demand. This mechanism is termed as adjustment mechanism.

Students can access the CBSE Sample Papers for Class 12 Accountancy with Solutions and marking scheme Term 2 Set 3 will help students in understanding the difficulty level of the exam.

CBSE Sample Papers for Class 12 Accountancy Standard Term 2 Set 3 with Solutions

Time Allowed: 2 Hours
Maximum Marks: 40

General Instructions

• This question paper comprises two Parts A and B. There are 12 questions in the question paper. All questions are compulsory.
• Question nos. 1 to 3 and 10 are Short Answer Type I Questions carrying 2 marks each.
• Question nos. 4 to 6 and 11 are Short Answer Type II Questions carrying 3 marks each.
• Question nos. 7 to 9 and 12 are Long Answer Type Questions earning 5 marks each.
• There is no overall choice. However, an internal choice has been provided in 3 questions of three marks and 1 question of five marks.

Maximum Marks : 40
Time : 2 Hours

Part A
(Accounting for Not-for-Profit Organisations, Partnership Firms and Companies)

Short Answer (SA) Type I Questions (2 Marks)
Question 1.
Aashi, Kiran and Madhu were carrying on partnership business of selling sarees at Kamla Nagar and sharing profits in the ratio of 3 : 2 : 1. Due to deteriorating health, Kiran retired on 31st December, 2020. Balance sheet of the firm stood as follows

(i) Buildings to be appreciated by ₹ 14,000.
(ii) Provision for doubtful debts to be made at 5% on debtors.
(iii) Goodwill of the firm is valued at ₹ 36,000.
(iv) ₹ 6,000 to be paid to Kiran immediately and the balance in her capital account to be transferred to his loan account.
Prepare revaluation account.
Answer:

Question 2.
Distinguish between revaluation account and realisation account on any two basis.
Answer:
Difference between revaluation account and realisation account

Basis	Revaluation Account	Realisation Account
Purpose	The purpose of preparing revaluation account is to ascertain profit or loss on the revaluation of assets and reassessment of liabilities.	Realisation account is meant to ascertain profit or loss on the disposal of assets and payment of liabilities.
Situations	It is prepared in case of reorganisation or reconstitution of firm i.e., admission, retirement and death of a partner.	It is prepared in case of dissolution of firm.

Question 3.
Srijan, Raman and Manan were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. On 31st March, 2017 their balance sheet was as follows

On the above date they decided to dissolve the firm.
(i) Assets were realised as follows

(ii) Investments were realised at 95% of the book value.
(iii) The firm had to pay ₹ 7,500 for an outstanding repair bill not provided for earlier.
(iv) Expenses of realisation amounting to ₹ 3,000 were paid and borne by Srijan.
Prepare realisation account.
Answer:

Short Answer (SA) Type II Questions (3 Marks)
Question 4.
Disha Ltd. issued 6,000,10% debentures of ₹ 100 each on 1st April, 2020. The issue was fully subscribed. According to the terms of issue, interest on debentures is payable half yearly on 30th September and 31st March. Pass journal entries related to the debenture interest half yearly, ending on 31st March 2021.

Or
Prakash Ltd. issued 7,000, 9% debentures of ₹ 100 each, payable ₹ 20 on application and the remaining amount on allotment. The debentures are redeemable after 5 years. All the debentures were applied for and allotted. All the money was received.
Pass the necessary journal entries for issue of debentures.
Answer:


Or

Question 5.
Modi, Shah and Dharma are three partners of a firm doing work of constructions and maintaining equality in the different societies of India. They shared profits in the ratio of 1 : 2 : 2 from last 6 years.
On 31st May, 2019, Dharma died and his share is taken by Modi and Shah in the ratio of 1 : 3. For this situation, goodwill of the firm is valued at ₹ 2,00,000 on this date.
Pass the journal entry for treatment of goodwill on Dharma’s death. Also, calculate new ratio.
Or
X, Y and Z were partners in a firm sharing profits in 3 : 2 : 1 ratio. The firm closes its books on 31st March every year. Y died on 12th June, 2019. On Y’s death, the goodwill of the firm was valued at ₹ 60,000.
His share in the profits of the firm till the time of his death was to be calculated on the basis of previous year’s profit which was ? 1,50,000. According to Y’s will, the executors should donate his share to an orphanage for girls.
Pass necessary journal entries for the treatment of goodwill and Y’s share of profit at the time of his death.
Answer:

Calculation of New Share

Working Note
Dharma’s share of goodwill = 2,00,000 × \(\frac{2}{5}[latex] = ₹ 80,000
to be contributed by Modi and Shah in their gaining ratio i.e., 1 : 3.
Modi gains = 80,000 × [latex]\frac{1}{4}\) = ₹ 20,000;
Shah gains = 80,000 × \(\frac{.3}{4}\) = ₹ 60,000
Or

Working Notes
1. Gaining Ratio = New Share – Old Share
X = \(\frac{3}{4}-\frac{3}{6}=\frac{9-6}{12}=\frac{3}{12}\); Z = \(\frac{1}{4}-\frac{1}{6}=\frac{3-2}{12}=\frac{1}{12}\); Gaining Ratio = 3 : 1

2. Calculation of Goodwill
60,000 × \(\frac{2}{6}\) = ₹ 20,000 to be shared by X and Z in their gaining ratio i.e., 3 : 1
X will share = 20,000 × \(\frac{3}{4}\) = ₹ 15,000; Z will share = 20,000 × \(\frac{1}{4}\) = ₹ 5,000

3. Calculation of Y’s Share in Profit 1,50,000 x \(\frac{2}{6} \times \frac{73}{365}\) = ₹ 10,000

Question 6.
Reena, Meena and Sheena are three partners in a firm sharing profits and losses in 3 : 2 : 1. Meena decides to retire from the firm and Reena and Sheena decided to share future profits and losses in the ratio of 2 : 1 respectively.
Following adjustments are agreed
(i) Value of land is revalued to ₹ 60,000 from ₹ 80,000.
(ii) Amount of ₹ 4,000 recovered from a debtor, which is previously written-off as bad debts.
(iii) Provident fund is to be increased by ₹ 2,000.
Pass necessary journal entries for above adjustments.
Answer:

Long Answer (LA) Type Questions (5 Marks)
Question 7.
From the following receipts and payments account and income and expenditure account, prepare balance sheet for 31st March, 2018 and 31st March, 2019.


Additional Information
Following assets were on 31st March, 2018
Investments – ₹ 72,000
Furniture – ₹ 18,000
Books – ₹ 9,000
Answer:

Question 8.
Following is the receipts and payments account of Perfect Health Sports Club for the year ended 31st December, 2020.

Additional Information
(i) Subscriptions outstanding on 31st December, 2019 were ₹ 800 and on 31st December, 2020 were ₹ 1,200.
(ii) Outstanding salaries for the year ended 31st December, 2020 were ₹ 3,200 and outstanding bills for sundry expenses were ₹ 2,400.
(iii) Donations for building includes ? 40,000 for general donations.
Prepare income and expenditure account of the club for the year ending 31st December, 2020.
Answer:

Working Notes
1. Out of subscription outstanding on 31st December, 2019 ₹ 800, this year we have received subscription for 2019 ₹ 400, it means subscription still in arrears for 2019 = 800 – 400 = ₹ 400. Subscription outstanding on 31st December, 2020 is ₹ 1,200, which includes ₹ 400 outstanding subscription for 2019. Thus, subscriptions outstanding for 2020 = 1,200 – 400 = ₹ 800.

Question 9.
Pass necessary journal entries in following cases
(i) Vikram Ltd. issued 4,000,10% debentures of ₹ 100 each, payable as follows ₹ 25 on application, ₹ 35 on allotment and ₹ 40 on first and final call. All the debentures were applied. Aniket, the holder of 200 debentures paid the entire amount on his holding on allotment.

(ii) PQR Ltd. issued 3,000, 9% Debentures of ₹ 100 each at a premium of ₹ 10 per debenture payable as follows : On application ₹ 50, on allotment ₹ 60. The debentures were fully subscribed and all money was duly received.
Or
Soniya & Co. issued 5,000,14% debentures of ₹ 200 each @ 10% premium on
1st January, 2019. These debentures are redeemable after 8 years at a premium of 15% in lumpsum. Amount payable on application ₹ 120 and balance on allotment. All the amounts were received by the company at its due date. Pass necessary journal entries for issue of debentures, interest on debentures and writing-off loss on issue of debentures in the year 2019-20.
Answer:

Or

Working Notes
1. Interest on debentures (for 3 months in 2018-2019) = (5,000 × 200) × \(\frac{14}{100} \times \frac{3}{12}\)
= 10,00,000 × \(\frac{14}{100} \times \frac{1}{4}\)
= ₹ 35,000

2. Loss on Issue of Debentures Account = Premium on Redemption of Debentures Account
= (5,000 × 30) = ₹ 1,50,000

3. Available balance in securities premium reserve by issuing debentures at premium of 10%
= (5,000 × 20) = ₹ 1,00,000

Part B
(Analysis of Financial Statements)

Short Answer (SA) Type I Question (2 Marks)
Question 10.
Classify the following into operating, investing or financing activity
(i) Issue of shares
(ii) Salaries paid to the employees
Answer:
(i) Issue of shares is financing activity as it relates to financial activities of company.
(ii) Salaries paid to the employees is operating activity. Operating activities are the principal revenue producing activities of an enterprise and salaries paid to employees forms the part of operating expenses paid.

Short Answer (SA) Type II Question (3 Marks)
Question 11.
Prepare common size statement of profit and loss from the following statement of profit and loss

Additional Information

Other Expenses Include	31st March, 2019 (₹)	31st March, 2020 (₹)
Provision for Tax	4,50,000	3,00,000

Or
From the following balance sheets of Malakar Pvt. Ltd., prepare comparative balance sheets


Answer:

Or

Long Answer (LA) Type Question (5 Marks)
Question 12.
Following are the balance sheet of Mittal Ltd. as at 31st March, 2018 and 2019

Notes to Accounts

Prepare a cash flow statement after taking into account the following adjustments
(i) The company paid interest ₹ 45,000 on its deposits.
(ii) Depreciation provided on machinery during the year ₹ 2,00,000.
Answer:

Working Note

Students can access the CBSE Sample Papers for Class 12 Economic with Solutions and marking scheme Term 2 Set 5 will help students in understanding the difficulty level of the exam.

CBSE Sample Papers for Class 12 Economics Term 2 Set 5 with Solutions

General Instructions :

• This is a subjective question paper containing 13 questions.
• This paper contains 5 questions of 2 marks each, 5 questions of 3 marks each and 3 questions of 5 marks each.
• 2 marks questions are Short Answer Type Questions and are to be answered in 30-50 words.
• 3 marks questions are Short Answer Type Questions and are to be answered in 50-80 words.
• 5 marks questions are Long Answer Type Questions and are to be answered in 80-120 words.
• This question paper contains Case/Source Based Questions.

Maximum Marks: 40
Time: 2 Hours

Short Answer (SA) Type I Questions (2 Marks)

Question 1.
What do you understand by inflationary gap? Explain with the help of diagram.
Or
Explain the situation of deficient demand in an economy with the help of diagram.
Answer:
The extent to which current aggregate demand becomes higher than the aggregate demand required for full employment, is termed as inflationary gap.

In the figure given below, full employment equilibrium is struck at point E. If the level of demand increases to AD₁, it is in excess of what is required to maintain full employment. This causes inflation. Inflationary Gap = EF (The difference between AD and AD₁).

Or
The extent to which aggregate demand falls short of aggregate supply to maintain full employment equilibrium is known as deficient demand.

As shown in the diagram given below, deficient demand occurs when Aggregate Demand (AD) is less than what is required to maintain full employment in the economy. Full employment level of demand is indicated by AD₁. If demand level happens to be AD₂ the gap between AD₁ and AD₂, equal to ab, represents deficient demand.

Question 2.
Calculate sales from the following data

Items	₹ (in lakhs)
Net Value Added at Factor Cost (NVAFC)	300
Intermediate Consumption	200
Indirect Tax	20
Depreciation	30
Change-in-stock	(-) 50

Or
If Real GDP is ₹200 and Price Index (with base = 100) is 110, calculate Nominal GDP.
Answer:
Gross Value Added at Market Price = Net Value Added at Factor Cost + Depreciation + Net Indirect Tax
= 300 + 30 + 20 = ₹350 lakh

Also, Gross Value Added at Market Price = Value of Output – Intermediate Consumption ∴ 350 = Value of Output – 200
⇒ Value of Output = 350 + 200 = ₹550 lakh

Now,
Value of Output = Sales + Change-in-stock
550 = Sales+ (-50) ⇒ 550 = Sales – 50
⇒ Sales = 550 + 50 ⇒ Sales = ₹600 lakh
Or
Real GDP = ₹200
Price Index = 110
Nominal GDP = ?
Price Index = \(\frac{\text { Nominal GDP }}{\text { Real GDP }} \times 100\)
\(110=\frac{\text { Nominal GDP }}{200} \times 100\)
Nominal GDP = 110 x 2 = ₹220

Question 3.
Observe the data given below and answer the question

Indicators of Health in India in Comparison with Other Countries, 2016-2018

Source World Development Indicators 2019, World Bank, Washington.

In India, only 81 percent of total birth are attained by skilled professionals as per the given data above. State any two reasons for the same.
Answer:
Reasons for only 81 percent births attained by skilled professionals in India are

• Lack of availability of sufficient health centre at nearby place to accommodate all births.
• Lack of awareness among people due to illiteracy.

Question 4.
Complete the following table

Answer:

Formulae used MPC = \(\frac{\Delta C}{\Delta Y}\), C = Y – S; APC = \(\frac{C}{Y}\)

Question 5.
“In India, the nature of employment is biased towards self-employment, while regular salaried employment is biased towards urban areas.” In the light of the statement, state why are regular salaried employees more in urban areas than in rural areas?
Or
Argue in favour of the need for different forms of government intervention in health sector.
Answer:
Regular salaried employees are more in urban areas than in rural areas due to the following reasons (any two)
(i) Education and Training Regular salaried employment requires certain educational qualifications and professional skills. Education and training facilities are not as good in rural areas as in urban areas. Therefore, chances of regular employment are higher for urban people.

(ii) Infrastructure Large companies including MNCs are concentrated in the urban areas due to the presence of economic infrastructure and availability of modem facilities like banks, transport, communication, etc.

(iii) Agriculture Rural population is primarily engaged in agricultural sector and is not willing to take the risk of leaving their farms for regular salaried employment. This is also a reason for regular salaried employment to be less prevalent in rural areas.

Or

There is a need for different forms of government intervention in health sector due to the following reasons (any two)

(i) Private sector is governed by profit motive and hence does not provide health facilities at a reasonable cost which may be affordable to all.

(ii) Standard of health care needs to be maintained in order to develop human resources effectively and government intervention is needed for this.

(iii) Health is essential for social upliftment of backward and weaker sections of the society and government intervention in terms of policy and provision of infrastructure is required in health sector.

Short Answer (SA) Type II Questions (3 Marks)

Question 6.
Explain any three precautions that are required to be taken care of while calculating national income by expenditure method.
Or
How will you treat the following while estimating domestic product of India?
(i) Rent received by a resident Indian from his property in Singapore.
(ii) Salaries to Indians working in Japanese Embassy in India.
(iii) Profits earned by a branch of an American Bank in India.
Answer:
The following precautions are to be taken care of while using expenditure method for calculation of Rational income (any three)

(i) Only expenditure on final goods and services is to be taken into account to avoid the problem of double counting.

(ii) Expenditure on paper claim such as shares and bonds is not to be included in total expenditure as there is no value addition corresponding to these items.

(iii) Expenditure on transfer payments by government is not to be included as these payments do not cause any value addition in the economy.

(iv) Expenditure on second hand goods is not to be included because these goods are already accounted for when they were initially produced and used by final users.
Or
(i) It will not be included in domestic product of India as this income is earned outside the domestic (economic) territory of India.

(ii) It will not be a part of domestic product of India as embassy of Japan in India is not a part of domestic territory of India. Hence, this income is not earned within the domestic territory of India.

(iii) It will be included in domestic product of India as the branch of American bank is located within the domestic territory of India. So, it is income earned within the domestic territory of India.

Question 7.
“Investment demand includes financial investment like purchase of shares from secondary market”. Do you agree?
Answer:
No, I do not agree. The term ‘investment’, here refers to real investment not the financial investment.

Real investment is concerned with the increase in stock of capital assets such as, tools, equipments, structure, inventories and also increase in consumer goods.

Question 8.
The Government of India is taking several steps to improve the public transport system. The Metro rail network is one such endeavour. The basic motive behind this strategy is to reduce environmental degradation. What are your views on this strategy?

Direction Read the following text carefully and answer questions 9 and 10 given below

It is widely accepted that investments in infrastructure can lead to direct and indirect jobs and usually have spill over effects into other economic opportunities. For example, good transport systems and agro-logistics services help move freight from farms to locations where value can be added (like intermediate processing, packaging and sorting of agricultural produce) and ultimately to consumers. However, the anticipated benefits of these investments are not always fully realised, or sometimes they happen much later. How can investments in infrastructure have a multiplier effect in stimulating the economy and eventually, facilitate job creation?

To maximise their impact, infrastructure projects should explicitly analyse and include complementary investments (e.g., industrial parks or processing facilities) and soft interventions (financial services, ICT, laws and regulations, etc.) needed to unlock the potential of new markets.

As part of a broader effort to link investment in rural roads to economic opportunities, the Roads to Jobs study analysed strategic value chains in the agriculture sector in Rajasthan, India, to better understand the challenges faced by farmers in accessing markets and provided recommendations to address constraints. However, the infrastructural development has been biased towards rural areas in India. Most of the infrastructural development is concentrated in urban areas thus, making it difficult to deal with the problem of unemployment in rural areas, specially with the nature of employment in rural areas.
Answer:
I think that the government’s strategy is correct. Improving the public transport system will motivate people to use this mode of transport instead of using their personal vehicles. This will definitely help to reduce environmental degradation as studies have indicated that emissions of harmful gases from trains per passenger/km are nearly half as that of a car. Also, one bus emits far fewer fumes than twenty cars. So, air pollution will reduce and the quality of environment will improve.

Question 9.
“Unemployment is most common problem of developing countries like India. Nature of unemployment varies between rural and urban areas.” Define any one type of unemployment found in rural areas. Also, suggest any two measures for reducing this kind of unemployment in India.
Answer:
Seasonal unemployment is one of the types of unemployment found in rural areas. It refers to the form of unemployment in which a worker is employed only during a particular season and then is laid off.

It occurs in case of agriculture, ice-cream factories, woollens factories, etc., which have a seasonal demand. They have busy seasons and slack seasons. In the off-season, there is no work and the result is seasonal unemployment.

Following measures may be suggested to reduce seasonal unemployment (any two)
(i) Promotion of multiple cropping, i.e. raising more than one crop on the same piece of land in a year by use of irrigation facilities, fertilisers, mechanisation, etc.

(ii) Development of activities allied to agriculture such as animal husbandry, dairy farming, horticulture, etc., to provide extra employment throughout the year.

(iii) Public investment in rural areas in such fields as irrigation, drainage, flood control, land and environment, improvement of rural roads, schools, hospitals, etc.

Question 10.
“Infrastructure is the basic fundamental structure of economic growth and development of any economy.” Justify the statement by explaining the inter-relation between infrastructural development and economic development. How does infrastructure contributes to the economic development of a country?
Answer:
Infrastructure and economic development go hand-in-hand. Infrastructure contributes to the economic development of a country in the following ways (any three)

(i) Generates Linkages in Production Better means of transport and communication and a robust system of banking and finance generates better inter-industrial linkages. It is a situation when expansion of one industry facilitates the expansion of the other.

(ii) Enhances Size of the Market Infrastructure enhances the size of the market by providing better transportation and warehousing facilities. These facilities enable large scale production of goods and services which further help a business to capture more markets.

(iii) Impact on Productivity Infrastructure plays a major role in raising the productivity of all the three sectors viz., primary, secondary and the tertiary sector.

(iv) Induces Investment Infrastructure induces investment. A well developed infrastructure attracts foreign investors which opens new investment avenues and gives birth to profitable ventures.

Long Answer (LA) Type Questions (5 Marks)

Question 11.
Compare the development experience of India, with China and Pakistan with reference to gross domestic product of these countries.
Answer:
The following points are important in this context
(i) China has the second largest GDP (PPP) of US $ 22.5 trillion, whereas India’s GDP is US $ 9.03 trillion. Pakistan’s GDP (PPP) stands at $ 0.94 trillion, which is roughly 11% of India’s GDP.

(ii) In both India and Pakistan, the contribution of agriculture to GDP was at 16% and 24% respectively. However, in China it is only 7%.

(iii) In China, service sector contributes 52% towards GDP. However, in India and Pakistan, the service sector contributes 54% and 57% respectively towards GDP.

(iv) In China, the contribution of industrial sector is high at 41%. For India and Pakistan, it is 30% and 19% respectively.

(v) During 2004-05, GDP of both China and Pakistan declined while GDP of India increased.

Question 12.
(i) Calculate Gross National Product at Market Price.

Items	₹ (in crores)
Private Final Consumption Expenditure	3,000
Net Factor Income to Abroad	100
Government Final Consumption Expenditure	800
Net Export	(-) 200
Net Current Transfers from Rest of the World	300
Gross Domestic Fixed Capital Formation	600
Change-in-stock	(-)20
Net Indirect Taxes	400
Factor Income from Abroad	50
Net Domestic Capital Formation	500

(ii) Explain why subsidies are added to and indirect taxes deducted from domestic product at market price to arrive at domestic product at factor cost?
Or
(i) Explain how non-monetary exchanges are a limitation in taking domestic product as an index of welfare?

(ii) In a single day Aman, the barber collects ₹1,500 from haircuts; over this day his equipment depreciates in value by ₹150 of the remaining ₹1,350, Aman pays sales tax worth ₹90, takes home ₹600 and retains ₹660 for improvement and buying of new equipment. He further pays ₹60 as income tax from his income. Based on this information, complete Aman’s contribution to the following measures of income
(a) Gross domestic product
(b) NNP at market price
(c) NNP at factor cost
Answer:
(i) Gross National Product at Market Price (GNPmp) = Private Final Consumption Expenditure + Government Final Consumption Expenditure + Gross Domestic Fixed Capital Formation + Change-in-stock + Net Export + Net Factor Income to Abroad
= 3,000 + 800 + 600 + (-20) + (- 200) -100
= 4,400-320
= ₹4,080 crore

(ii) Subsidies by government are grants that decrease the factor price of a commodity, whereas, indirect taxes are paid by a firm and households that increase the final factor price of a commodity. Hence, to derive Gross Domestic Product at Factor Cost from Gross Domestic Product at Market Price, we deduct indirect taxes and add subsidies.
Or
(i) The non-monetary exchanges, which take place in the informal sectors are not included in the calculation of GDP since money is not being used. This results in an underestimation of GDP. Hence, GDP calculated in the standard manner may not give us a clear indication of the productive activity and actual welfare of the country.

(ii) Given, Indirect taxes = ₹90, Personal tax = ₹60,
Depreciation = ₹150, Retained earnings = ₹660
(a) GDP_MP = ₹1,500
(b) NNP_MP = GDP_MP – Depreciation = 1,500-150 = ₹1350
(c) NNP_FC = NNP_MP – NIT = 1350 – 90 = ₹1,260

Question 13.
(i) Central Bank of the country uses different instruments to control the quantity of money supply in an economy at a given point of time along with the ability of the commercial bank to create credit. Briefly explain marginal requirement as an instrument of credit based upon the above statement.

(ii) India imports most of its petroleum demand from gulf countries. Any fluctuations in the price of crude oil impacts important economic indicators. In recent past, it has been observed that India is in the grip of rising prices. Suggest any two measures to deal with the situation.
Answer:
(i) Marginal requirement is the difference between the market value of securities provided by the borrower and the amount of loan granted to him. There will be reduction in marginal requirement in a situation of deficient demand. It implies that borrowers will get more credit against their securities. It will encourage borrowings. Margin requirement is raised to correct the situations of excess demand. Higher margin requirement acts as a disincentive to borrow.

(ii) Two measures to control the rising prices are
(a) Rising prices can be controlled by reducing government expenditure, especially non-developmental expenditure such as, expenditure on public administration, defence and subsidies on non-merit goods and other wasteful expenditure.

(b) Monetary policy measures such as increase in cash reserve ratio, mopping of excess liquid reserves with the banks through open market operations by the Central Bank, so as to reduce the availability of credit and as a result, rising prices can be controlled.

Students can access the CBSE Sample Papers for Class 12 Accountancy with Solutions and marking scheme Term 2 Set 2 will help students in understanding the difficulty level of the exam.

CBSE Sample Papers for Class 12 Accountancy Standard Term 2 Set 1 with Solutions

Time Allowed: 2 Hours
Maximum Marks: 40

General Instructions

• This question paper comprises two Parts A and B. There are 12 questions in the question paper. All questions are compulsory.
• Question nos. 1 to 3 and 10 are Short Answer Type I Questions carrying 2 marks each.
• Question nos. 4 to 6 and 11 are Short Answer Type II Questions carrying 3 marks each.
• Question nos. 7 to 9 and 12 are Long Answer Type Questions earning 5 marks each.
• There is no overall choice. However, an internal choice has been provided in 3 questions of three marks and 1 question of five marks.

Maximum Marks : 40
Time : 2 Hours

Part A
(Accounting for Not-for-Profit Organisations, Partnership Firms and Companies)

Short Answer (SA) Type I Questions (2 Marks)
Question 1.
A, B, C and D are partners in a firm sharing profits in the ratio of 2 : 2 : 3 : 3 respectively. A retires and B, C and D decided to share the future profits in the ratio of 1 : 2 : 3. Goodwill of the firm is valued at ₹ 5,40,000.
Pass the necessary journal entry to record goodwill.
Answer:

Working Notes
1) Calculation of Gaining Ratio
B = \(\frac{1}{6}-\frac{2}{10}=\frac{10-12}{60}=\frac{2}{60}\) Sacrifice; C = \(\frac{2}{6}-\frac{3}{10}=\frac{20-18}{60}=\frac{2}{60}\) Gain
D = \(\frac{3}{6}-\frac{3}{10}=\frac{30-18}{60}=\frac{12}{60}\) Gain

2) A’s Share in Goodwill = 5,40,000 × \(\frac{2}{10}\) = ₹ 1,08,000
B’s Share in Goodwill = 5,40/100 × \(\frac{2}{60}\) = ₹ 18,000
C’s Share in Goodwill = 5,40/100 × \(\frac{2}{60}\) = ₹ 18,000
D’s Share in Goodwill = 5,40/100 × \(\frac{12}{60}\) = ₹ 1,08,000

Question 2.
Distinguish between ‘dissolution of partnership’ and ‘dissolution of partnership firm’ on the basis of meaning and nature.
Answer:
Difference between dissolution of partnership and dissolution of partnership firm

Basis	Dissolution of Partnership	Dissolution of Partnership Firm
Meaning	Dissolution of partnership is only a change in the partnership agreement. The firm may continue.	Dissolution of the firm is the discontinuance of all the business activities of the firm.
Nature	Dissolution of the partnership is voluntary. It emerges out of the agreement.	Dissolution of the firm may be both voluntary and compulsory.

Question 3.
A, B, C were partners in a firm sharing profits in 2 : 2 : 1 ratio. The firm closes its book on 31st March every year. A died 3 months after the last accounts were prepared.

On death of a partner, his share of profit in the year of death was to be calculated on the basis of average profits of the last four years.

The profits of last four years were
I. ₹ 2,00,000
II. ₹ 1,80,000
III. ₹ 12,10,000
IV ₹ 1,70,000 (Loss)
Calculate A’s share of profits.
Answer:
Calculation of Average Profit
Average Profit = \(\frac{2,00,000+1,80,000+2,10,000+(1,70,000)}{4}\)
\(\frac{4,20,000}{4}[latex] = ₹ 1,05,000
Calculate of A’s Share of Profit
A’s share of profit = 1,05,000 × [latex]\frac{2}{5} \times \frac{3}{12}\) = ₹10,500

Short Answer (SA) Type II Questions (3 Marks)
Question 4.
Ajay, Pranav and Vijay are in partnership sharing profits in the ratio of 4 : 3 :1. Pranav takes retirement on 30th June, 2019. The firm’s profits for various years were 2014 (profits ₹ 3,24,444), 2015 (profits ₹ 80,000), 2016 (profits ₹ 10,000), 2017 (losses ₹ 10,000), 2018 (profits ₹ 40,000) and 2019 (profits ₹ 50,000). Ajay and Vijay decided to share future profits in the ratio of 3 : 2. Goodwill is to be valued on the basis of 2 years’ purchase of average profit of 4 completed years immediately preceding the year of retirement of a partner. Pass the journal entry to record Pranav’s share of goodwill.

Or Manish, Nirjhar and Kshitij are partners with ratio of 5 : 3 : 2.

Additional Information
(i) Manish takes retirement.
(ii) New ratio of Nirjhar and Kshitij is 1:1 and goodwill of the firm is valued at ₹ 60,000.
(iii) Expenses owing increased by ₹ 10,000.
(iv) Creditors increased to ₹ 1,05,000.
(v) ₹ 10,000 bills receivable dishonoured and are not recoverable.
(vi) Patents are now value less.
(vii) ₹ 20,000 unrecorded investment brought into books.
Prepare revaluation account.
Answer:

Working Notes
1. Gaining Ratio =New Share – Old Share
Aiay s Gain = \(\frac{3}{5}-\frac{4}{8}=\frac{24-20}{40}=\frac{4}{40}\) ; Vijay’s Gain = \(\frac{2}{5}-\frac{1}{8}=\frac{16-5}{40}=\frac{11}{40}\)
Gaining Ratio of Ajay and Vijay = \(\frac{4}{40}: \frac{11}{40}\) = 4 : 11

2. Average Profit of 4 Years = \(\frac{80,000+10,000+(10,000)+40,000}{4}\) = ₹ 30,000
Firm’s Goodwill = 30,000 × 2 = ₹ 60,000
Pranav’s Share of Goodwill = 60,000 × \(\frac{3}{8}\) = ₹ 22,500
Or

Question 5.
Pass the necessary journal entries for the following transactions on the dissolution of the firm of A, B and C (who were sharing profits in the ratio of 4 : 3 : 3) after the transfer of all assets (other than cash) and external liabilities to realisation account.
(i) A one of the partners was to bear all the realisation expenses for which he was given a commission of 2% of net cash realised from dissolution.
Cash realised from assets was ₹ 25,000 and cash paid for liabilities amounted to ₹ 5,000. Expenses of realisation ₹ 1,000 paid by A.

(ii) Commission received in advance ? 1,000 was returned to customers after deducting ₹ 200.

(iii) There was a bill for ₹ 1,000 under discount. The bill was received from X who proved insolvent and a first and final dividend of 25% was received from his estate.

Or
Sita, Reeta and Geeta are partners in a firm sharing profits and losses in the ratio of 4 : 3 : 1. As per the terms of partnership deed, on the death of any partner, goodwill was to be valued at 50% of the net profits credited to that partner’s capital account during the last three completed years before her death. Sita died on 28th February, 2019. The profits for the last five years were 2014 – ₹ 60,000, 2015 – ₹ 97,000, 2016 – ₹ 1,05,000,2017 – ₹ 30,000 and 2018 – ₹ 84,000.

On the date of Sita’s death, building was found undervalued by ₹ 80,000, which was to be considered. Calculate amount of Sita’s share of goodwill in the firm and complete the following journal entries. The new profit sharing ratio between Reeta and Geeta will be equal.

Answer:

Or


Working Notes
1. Calculation of Gaining Ratio
Gaining Ratio = New Share – Old Share
Reeta = \(\frac{1}{2}-\frac{3}{8}=\frac{4-3}{8}=\frac{1}{8}\), Geeta = \(\frac{1}{2}-\frac{1}{8}=\frac{4-1}{8}=\frac{3}{8}\)
∴ Gaining Ratio = 1 : 3

2. Calculation of Sita’s Share of Goodwill
Total of last three years profit = 1,05,000 + 30,000 + 84,000 = ₹ 2,19,000
Sita’s share in last three years profit = 2,19,000 × \(\frac{4}{8}\) = ₹ 1,09,500

Sita’s share of goodwill = 1,09,500 × \(\frac{50}{100}\) = ₹ 54,750
Sita’s share of goodwill will be contributed by Reeta and Geeta in their gaining ratio.
Reeta will contribute = 54,750 × \(\frac{1}{4}\) = ₹ 13,688, Geeta will contribute = 54,750 × \(\frac{3}{4}\) = ₹ 41,062

Question 6.
Ultimate Ltd. purchased machinery from Evergreen Ltd. for ₹ 10,00,000 to start a business of manufacturing low cost school dresses for children belonging to low income group. It made the payment as follows

₹ 7,00,000 by cheque, 3,000,10% debentures of ₹ 100 each at par. You are required to pass the journal entries for the transactions
Answer:

Long Answer (LA) Type Questions (5 Marks)
Question 7.
From the following receipts and payments account and information given below, prepare income and expenditure account and balance sheet of Adult Literacy Organisation as on 31st December, 2020

Additional Information
(i) Subscription outstanding as on 31st December, 2019, ₹ 2,000 and on 31st December, 2020, ₹ 1,500.
(ii) On 31st December, 2020, salary outstanding ₹ 600 and one month rent paid in advance.
(iii) On 1st January, 2020, organisation owned furniture ₹ 12,000, books ₹ 5,000.
Answer:

Question 8.
‘ABC Pvt. Ltd. Company’ issued 50,000,10% debentures of ₹ 100 each at 10% premium to the public on 1st April, 2019, which are redeemable after 5 years of issue at a premium of 20%. Pass journal entries for issue of debentures and writing-off ‘loss on issue of debentures’ in the same year of issue. Also, prepare ‘loss on issue of debenture account’.

Or
Pass the necessary journal entries for issue of debentures in the following cases
(i) Krishna Ltd. issued 2,000,12% debentures of ₹ 10 each to the public at a premium of 10%. These debentures are redeemable after 5 years at a premium of 20%.

(ii) Krishna Ltd. issued 2,000,12% debentures of ₹ 10 each to the public at a discount of 10%. These debentures are redeemable after 5 years at par.

(iii) Krishna Ltd. issued 2,000,12% debentures of ₹ 10 each to the public at a premium of 10%. These debentures are redeemable after 5 years at par.
Answer:


Working Note
Securities Premium Reserve (By issue of 50,000,10% debentures of ₹ 100 each at 10% premium)
= 50,000 × 10 = ₹ 5,00,000
Loss on Issue of Debentures = 50,000 × 20 = ₹ 10,00,000

Or

Question 9.
Following is the receipts and payments account of Star Literary Club for the year ended on 31st March, 2020.

Additional Information
(i) On 1st April, 2019, buildings stood in the books at ₹ 60,000 and investments in shares at ₹ 6,000. Buildings are subject to depreciation @ 5% p.a.

(ii) There were 200 members paying subscription at the rate of ₹ 300 p.a. each. Some members have paid their annual subscription in advance during the year.

(iii) As on 1st April, 2019, no subscription had been received in advance but subscriptions were outstanding to the extent of ₹ 1,200 as at 31st March, 2019. Subscription accrued as on 31st March, 2020 was ₹ 1,800.

(iv) Postage stamps worth ₹ 300 were in stock with secretary as on 1st April, 2019 and as on 31st March, 2020, they were valued at ₹ 180.

(v) Telephone charges paid in advance were ₹ 360.
You are required to prepare the income and expenditure account for the year ended on 31st March, 2020 and the balance sheet as at that date.
Answer:

Part B
(Analysis of Financial Statements)

Short Answer (SA) Type I Question (2 Marks)

Question 10.
State whether the following transactions will result in inflow, outflow or no flow of cash while preparing cash flow statement
(i) Deposit of cash into bank
(ii) Depreciation charged by a company
Answer:
(i) ‘Deposit of cash into bank’ does not result in cash flow. It is simply a movement between two
components of cash and cash equivalents.
(ii) There will be no flow of cash because depreciation is a non-cash expense.

Short Answer (SA) Type II Question (3 Marks)
Question 11.

Particulars	31st March, 2020 (₹)	31st March, 2019 (₹)
Revenue from Operations	7,50,000	5,62,500
Other Income	75,000	56,250
Purchase of Stock-in-trade	5,62,500	4,50,000
Rate of Income Tax	40%	40%

From the following information, prepare comparative statement of profit and loss.
Answer:

Particulars	31st March, 2020 (₹)	31st March, 2019 (₹)
Revenue from Operations	1,80,000	1,20,000
Other Income (% of Revenue from Operations)	10%	15%
Expenses (% of Revenue from Operations)	60%	50%
Tax Rate	40%	40%

Or

Long Answer (LA) Type Question (5 Marks)

Question 12.
From the following balance sheet of Vikas Ltd. as on 31st March, 2019 and 2020, prepare a cash flow statement


Notes to Accounts

Additional Information
(i) Depreciation charged on fixed assets for the year 2019-20 was ₹ 20,000.
(ii) Income tax ₹ 5,000 has been paid during the year.
Answer:

Working Notes