Page 310 - MA-12

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) What is meant by ‘Redemption of Debentures by purchase in the Open Market’?
(ii) Malti, Paro and Arti are partners in a firm having fixed capital of ` 80,000,
` 40,000 and ` 50,000 respectively sharing profit in the ratio of 7 : 6 : 4. The rate of
interest on capital was agreed at 10% per annum, but it was wrongly credited to
them at 12% per annum. Give the necessary adjustment entry to rectify the error.
(iii) How are profits estimated from the date of last accounting year till the date of
death of a partner, and, how the profit of deceased partner will be adjusted
in case profit-sharing ratio of continuing partners changes?
(iv) Innovations Ltd. has the following balances appearing 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%. You
are required to suggest the way in which the company can utilise the Securities
Premium Reserve.
(v) List any four items which are included under the head ‘Reserves and Surplus’
of the company’s Balance Sheet as per Schedule III of the Companies Act, 2013.
(vi) Lenovo Ltd. took over assets of ` 8,40,000 and liabilities of ` 80,000 of
Motorola Ltd. at an agreed value of ` 7,20,000. Lenovo 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 Lenovo Ltd.
[6 × 2 = 12]