Page 95 - MA12

Model Test Paper 1

Time Allowed: 3 Hrs. Max. Marks: 80
General Instructions:
(Candidates are allowed additional 15 minutes for only reading the paper. They must NOT start
writing during this time.)
(i) Part I of Section A is Compulsory.
(ii) Answer any 4 Questions from Part II of Section A and any two questions from either
Section B or Section C.
(iii) The intended marks for questions or parts of questions are given in the brackets [].
(iv) Transactions should be recorded in the answer book.
(v) All calculations should be shown clearly.
(vi) All working, including rough work, should be done on the same page as, and adjacent to, the
rest of the answer.

Section A

Part I (12 Marks)
(Answer all questions)
1. Answer each of the following questions briefly:
(i) Why a retiring or a deceased partner is entitled to share goodwill of the firm?
(ii) Give adjusting entry for salary or commission to a partner as well as closing
entry to close Salary or Commission Account.
(iii) How is profit estimated from the beginning of the year till the date of death of
a partner, and, how the share of profit of deceased partner will be adjusted in
case profit-sharing ratio of the continuing partners changes?
(iv) Star Ltd. has the following balances in its Balance Sheet:
`
Securities Premium Reserve 22,00,000
9% Debentures 1,20,00,000
Underwriting Commission 10,00,000
The company decided to redeem its 9% Debentures at a premium of 10%. The
company decided to write off discount or loss on issue of debentures at the
time of redemption of debentures.
You are required to suggest the way in which the company can use the Securities
Premium Reserve.
(v) What are ‘Short-term Borrowings’? List any two items which are included in
‘Short-term Borrowings’ of the company’s Balance Sheet as per Schedule III of
the Companies Act, 2013.
(vi) Vishva Ltd. took over assets of ` 8,40,000 and liabilities of ` 80,000 of
Motorola Ltd. at an agreed value of ` 7,20,000. Vishva Ltd. paid to Motorola Ltd.
by issue of 9% Debentures of ` 100 each at a premium of 20%. Pass necessary
Journal entries to record the above transactions in the books of Vishva Ltd.
[6 × 2 = 12]