KENDRIYA VIDYALAYA SANGATHAN, AGRA REGION

PRE BOARD EXAMINATION – 2023-24

CLASS - XII
MAX MARKS - 80 TIME – 3 HRS
General instructions:
(i) This question paper contains 34 questions. All questions are compulsory.
(ii) This question paper is divided into two parts, Part A and B.
(iii) Part-A is compulsory for all candidates.
(iv) Part-B. Analysis of Financial Statements.
(v) Question 1 to 16 and 27 to 30 carries 1 mark each.
(vi) Questions 17 to 20, 31 and 32 carries 3 marks each.
(viii) Questions from 21, 22 and 33 carries 4 marks each.
(ix) Questions from 23 to 26 and 34 carries 6 marks each.
There is no overall choice. However, an internal choice has been provided in 7 questions of one
mark, 2 questions of three marks, 1 question of four marks and 2 questions of six mark
Q.no Question Marks
PART A
1 Santosh and Rakesh were equal partners in a partnership firm. They admitted 1
Manender for 1/4th share. He acquired his share equally from Santosh and Rakesh.
Consider the statements below:
(i) Santosh and Rakesh both will sacrifice equally to Manender.
(ii) Santosh sacrificing ratio is more than that of Rakesh.
(iii) The new profit sharing ratio of Santosh, Mahesh and Manender will be 11:6:5
Choose the correct option:
(a) only (i) is correct
(b) only (ii) is correct
(c) only (iii) is correct
(d) all of the above
2 Assertion (A): The fixed capital method is better as compared to the fluctuating 1
capital method.
Reason (R): The capital of the partners is fixed, and all the transactions are recorded
in the current account.
(a) Both Assertion(A) and Reason(R) are correct and Reason(R) is the correct
explanation of Assertion(A)
(b) Both Assertion(A) and Reason(R) are correct but Reason(R) is not the

Page 1 of 13
 correct explanation of Assertion(A)
(c) Assertion(A) is incorrect but Reason(R) is correct
(d) Assertion(A) is correct but Reason(R) is incorrect
3 Balance in Share forfeiture account is shown in the Balance Sheet under the head of: 1
(a) reserves and surplus
(b) long term borrowings
(c) share capital
(d) other current liabilities
OR
Premium on redemption of debentures account is a ______ account
(a) real
(b) nominal
(c) personal
(d) none of these
4 A and B were partners in a firm sharing profit or loss in the ratio of 3 : 1. With effect 1
from Jan. 1, 2019 they agreed to share profit or loss in the ratio of 2 : 1. Due to
change in profit-loss sharing ratio, B‟s gain or sacrifice will be :
(a) Sacrifice 1/12
(b) Gain 1/12
(c) Gain 1/3
(d) Sacrifice 1/3
OR
Which one of the following is NOT an essential feature of a partnership?
(a) There must be an agreement
(b) There must be a business
(c) The business must be carried on for profits
(d) The business must be carried on by all the partners
5 What will be the interest on drawing @12.5% p.a. for Ashish if he withdrew ₹ 5000 1
once in a month?
(a) ₹ 3500
(b) ₹ 7500
(c) ₹ 3750
(d) None of the above
6 The debentures which are payable on the expiry of a specified period either in lump 1
sum or in installments during the lifetime of the company are known as

Page 2 of 13
 (a) secured debentures
(b) specific coupon rate debentures
(c) redeemable debentures
(d) convertible debentures
OR
Which of the following statements is incorrect with respect to debentures?
(a) debentures can be issued for cash
(b) debentures cannot be issued at discount
(c) debentures can be issued as collateral security
(d) debentures can be issued at premium
7 Assertion (A): Manoj Ltd. gave shares worth ₹ 150000 to the vendor from whom it 1
bought machinery.
Reason (R): The company can issue shares as against the payment to the vendors.
(a) Both Assertion(A) and Reason(R) are correct and Reason(R) is the correct
explanation of Assertion(A)
(b) Both Assertion(A) and Reason(R) are correct but Reason(R) is not the
correct explanation of Assertion(A)
(c) Assertion(A) is incorrect but Reason(R) is correct
(d) Assertion(A) is correct but Reason(R) is incorrect
8 Akshita, Shraddha and Pooja were partners sharing profits and losses in the ratio of 1
4:3:1. Shraddha retires and gives her share of profit to Akshita for 3600 and Pooja for
3000. The gaining ratio of Akshita and Pooja will be:
(a) 4:5
(b) 6:5
(c) 2:1
(d) 4:1
OR
A, B and C were partners in a firm sharing profits in the ratio of 3:2:1. B was
guaranteed a profit of ₹ 2,00,000 During the year the firm earned a profit of ₹ 84,000,
Calculate the net amount of Profit or Loss transferred to the Capital Accounts of A
and C.
(a) ₹ 87,000 & ₹ 29,000
(b) ₹ 77,000 & ₹ 39,000
(c) ₹ 25,000 & ₹ 75,000
(d) ₹ 27,000 & ₹ 89,000

Page 3 of 13
 Read the following hypothetical situation, answer question no. 9 and 10. 1
X and Y are partners in 3:2. Their capital balances as on 1st April 2022 amounting to
₹ 2,00,000 each. On 1st February 2023, X contributed an additional capital of
1,00,000. Following are the terms of deed
(a) Interest on capital @ 6% per annum
(b) Interest on drawings @ 8% per annum
(c) Salary to X 1,500 per month
(d) Commission to Y @10% on net profit after charging interest on capital, salary
and his commission.
Drawings of the partners were ₹ 20,000 and ₹ 30,000 respectively during the year.
Net profit earned by the firm was ₹ 2,08,000.
9 What is the amount of interest on capitals of X and Y:
(a) ₹ 12000 each
(b) ₹ 12000 to X and ₹ 13000 to Y
(c) ₹ 13000 to X and ₹ 12000 to Y
(d) None of these
10 What is the amount of interest on drawings of X and Y? 1
(a) ₹ 120 and ₹ 1800 respectively
(b) ₹ 800 and ₹ 1200 respectively
(c) ₹ 1200 and ₹ 800 respectively
(d) ₹ 1600 and ₹ 2400 respectively
11 X, Y and Z were doing business in partnership with capital investment of ₹ 40000, ₹ 1
40000 and ₹ 80000 as capitals. Deed is silent regarding the profit sharing ratio of the
partners. During the year they earned a profit of ₹ 120000. How much amount of
profit will be given to Z assuming that the whole business is managed by Z alone?
(a) ₹ 60000
(b) ₹ 40000
(c) ₹ 120000
(d) None of the above
12 An equity share of ₹ 10 fully called up on which ₹ 6 has been paid was forfeited for 1
the non-payment of the balance amount. At which of the following minimum price
can it be re issued?
(a) ₹ 4
(b) ₹ 10
(c) ₹ 16

Page 4 of 13
 (d) ₹ 6
13 The allowed amount of discount on re-issue of shares will be _____. 1
(a) @ 10% of issue price
(b) up to the amount of forfeited money
(c) could not issue at discount
(d) none of these
14 P, Q and R are partners in a firm sharing profits and losses in the ratio 2:2:1. They 1
admitted L as a new partner for 1/5th share in the profits. L was given a guarantee
that his share of profit shall be ₹ 100000. Any deficiency arising on account of
guarantee to L will be borne by Q. The profit of the firm during the year ended 31st
March 2023 was ₹ 4 lakh. The amount of deficiency borne by Q was:
(a) ₹ 80000
(b) ₹ 20000
(c) ₹ 6667
(d) ₹ 10000
15 Manoj and Manish are partners. Manish draws a fixed amount in the beginning of 1
every quarter. Interest on drawings is charged @12% p.a. At the end of the year
interest on Manish‟s drawings amounted to ₹4500. Drawings of Manish were:
a) ₹14,000 per quarter.
b) ₹15,000 per quarter
c) ₹20,000 per quarter
d) ₹10,000 per quarter
OR
A, D and K were equal partners. They decided to change the profit sharing ratio to
4:3:2. For this purpose the Goodwill of the firm was valued at ₹ 90000. The journal
entries for the treatment of goodwill on change in profit sharing ratio will be:
(a) debit K‟s capital account; credit A‟s capital account ₹ 10000
(b) debit D's capital account; credit A‟s capital account ₹ 10000
(c) debit A‟s capital account; credit K‟s capital account ₹ 90000
(d) debit A‟s capital account; credit K‟s capital account ₹ 10000
16 On dissolution of the partnership firm of A, B and C, the accumulated profits of ₹ 1
40000 will be transferred to which of the following accounts?
(a) Revaluation account
(b) Realization account
(c) Partner‟s capital accounts

Page 5 of 13
 (d) Bank account
17 A, B and C are partners sharing profit and loss in the ratio of 2:2:1. B retires from the 3
firm on 31st March, 2023. On the date of B's retirement, the following balances
appeared in the books of the firm.
Advertisement suspense account ₹ 50,000
Contingency reserve ₹30000
Workmen's compensation reserve ₹ 40,000
Loss in business account ₹ 30,000
Pass the necessary journal entries for the adjustment of these items on B's retirement.
18 Sonu, Monu and Tina are partners in a firm. They had omitted Interest on Capital @ 3
10% p.a. for three years ended 31st March, 2023. Their fixed capitals on which
interest was to be calculated were:
Sonu: ₹ 1,00,000
Monu: ₹ 80,000
Tina: ₹ 70,000
Give the necessary adjusting journal entry and show your working notes clearly.
OR
A, B and C were partners in a firm. On 1st April, 2022, their fixed capitals stood at ₹
50,000, ₹ 25,000 and ₹ 25,000 respectively. As per the provisions of the partnership
deed
(i) A was entitled to a salary of ₹ 5,000 per annum.
(ii) All the partners were entitled to interest on capital @ 5% per annum.
(iii) Profits were to be shared in the ratio of capitals.
The net profits for the year ending 31st March, 2022 of ₹ 33,000 and 31st March,
2023 of ₹ 45,000 were divided equally without providing for the above terms.
Pass an adjustment journal entry to rectify the above error.
19 Karan Ltd. issued 1,00,000 Equity shares of ₹ 10 each. The amount was duly 3
received except on 5,000 Equity shares on which ₹ 5 per share was received. These
shares were forfeited and 2,500 Equity shares were reissued for ₹ 9 each fully paid-
up. You are required to prepare Share Forfeiture Account
OR
Gagan Ltd. took over the running business of Madan Ltd. having assets of ₹
22,00,000 and liabilities of ₹ 6,00,000 by issuing 20,000, 11% Debentures of ₹ 100
each at 5% discount.
You are required to pass the journal entries in the books of Glen Ltd. if debentures

Page 6 of 13
 were redeemed at 10% premium.
20 Average profit of the firm is ₹ 3,00,000. Total tangible assets in the firm are ₹ 3
28,00,000 and outside liabilities are ₹ 8,00,000. In the same type of business, the
normal rate of return is 10% of the capital employed.
Calculate value of goodwill by capitalization of super profit method.
21 Mahir Ltd., an helicopter manufacturing company, is registered with an authorised 4
capital of ₹ 1,00,00,000 divided into equity shares of 100 each. The subscribed and
paid up capital of the company is ₹ 50,00,000. The company decided to open
technical schools in the Jhalawar district of Rajasthan to train the especially abled
children of the area. It is planning to provide them employment in its various
production units and industries in the neighborhood area. To meet the capital
expenditure requirements of the project, the company offered 20,000 shares to the
public for subscription. The shares were fully subscribed and paid.
Present the share capital in the Balance Sheet of the company as per the provisions of
Schedule III of the Companies Act, 2013.
22 Pass the necessary journal entries in the following cases on the dissolution of a 4
partnership firm of partners X, Y, A and B:
(i) Realization expenses of ₹ 5,000 were to be borne by X, a partner. However, it was
paid by Y.
(ii) Investments costing ₹ 25,000 (comprising 1,000 shares), had been written off
from the books completely. These shares are valued at ₹ 20 each and were divided
amongst the partners.
(iii) Y's loan of ₹ 50,000 settled at ₹ 48,000.
(iv) Machinery (book value ₹ 6,00,000) was given to a creditor at a discount of 20%.
23 Saksham Ltd. invited applications for 1,00,000 Equity Shares of ₹100 each at a 6
premium of 10%. The amount was payable as follows:
On Application ₹ 50 per share
On Allotment ₹ 35 per share (including premium)
On First and Final Call ₹ 25 per share
Applications for 1,50,000 shares were received.
Applicants for 25,000 shares did not get any allotment and their money returned.
Allotment was made pro-rata to the remaining applicants. Excess application money
was adjusted towards sum due on allotment.
Mr. Harshit who was allotted 600 shares failed to pay the amount due on allotment
and call money.

Page 7 of 13
 The company forfeited his shares and subsequently re-issued at ₹ 110 per share fully
paid-up.
You are required to pass journal entries to record the above transactions in the books
of the company.
OR
Qinza Ltd. invited applications for 4,000 equity shares of ₹ 100 each at a premium ₹
30 per share. The amount was payable as follows:
On Application ₹ 40 (Including premium ₹ 10) On Allotment ₹ 60 (Including
premium ₹ 20) On First and Final Call ₹ 40 Applications for 5,000 shares were
received. Allotment was made to all the applicants on pro-rata basis. Excess
application money was adjusted towards sum due on allotment.
Satvik, to whom 40 shares were allotted, failed to pay allotment and call money.
Ali, to whom 90 shares were allotted, failed to pay the call money.
These shares were forfeited. The forfeited shares were re-issued @ ₹ 80 per share
fully paid-up.
You are required to pass journal entries to record the above transactions in the books
of the company.
24 A and B were partners sharing profits and losses in the ratio of 3:2 on 31st March 6
2023 their balance sheet was as follows:
Balance Sheet as at 31/03/2023

Liabilities Amount(₹) Assets Amount(₹)

Capital A/cs Land and building 80000

A 60000 Plant and Machinery 40000
B 50000 110000 Stock 22000
Reserves 20000 Sundry Debtors 16000
Sundry Creditors 32000 Cash 4000

162000 162000

On the above date, C was admitted into partnership on the following terms
(i) C was to pay ₹ 40,000 as capital and ₹ 20,000 as goodwill for 1/4th share in
profits.
(ii) Land and buildings were to be revalued at ₹ 90,000 and plant and machinery at ₹
50,000. Stock was to be written down by ₹ 4,000. Creditors included ₹ 1,000 no
longer payable.

Page 8 of 13
 (iii) Capital of all partners of the new firm were to be in the profit sharing ratio and
for this purpose
Prepare revaluation account and partners' capital accounts.

OR

Kamal Rahul and Neeraj your partners in a firm sharing profits and losses in the ratio
of 5:3: 2 on 31st March 2022. Their balance sheet was as under:

Balance Sheet as on 31st March 2022

Liabilities Amount(₹) Assets Amount(₹)

Capital A/cs Land and building 170000

Kamal 120000 Plant and Machinery 260000
Rahul 120000 Stock 100000
Neeraj 120000 360000 Sundry Debtors 80000
General Reserve 120000 Cash 50000
Sundry Creditors 180000

660000 660000

On the above date, Rahul retired and following terms were agreed upon:
(i) Goodwill of the firm was valued at ₹ 3,50,000.
(ii) An item of ₹ 10,000 included in Sundry creditors is not likely to be claimed and
hence written off. Stock was valued at ₹ 90,000.
(iii) Capital of the new firm was fixed at ₹ 2,10,000 and the same will be adjusted in
the profit-sharing ratio of the remaining partners. For this purpose the required cash
will be brought in- or paid off as the case may be.
(iv) Amount payable to Rahul will be transferred to his loan account
Prepare Revaluation Account and Partners' Capital Accounts on Rahul's retirement.
25 Akash, Jalaj and Shobit were partners in a firm sharing profits in the ratio of 2: 2: 1. 6
The firm closes its books on 31st March every year. On 30th September, 2022 Shobit
died. The partnership deed provided that on the death of a partner her executors will
be entitled to the following:
(a) Balance in her capital account which amounted to ₹ 3,15,000 and interest on
capital @ 9%.

Page 9 of 13
 (b) Her share in the profits of the firm till the date of her death amounted to ₹ 70,000.
(c) Her share in the goodwill of the firm. The goodwill of the firm on Shobit‟s death
was valued at ₹ 1,50,000.
You are required to calculate the amount to be transferred to Shobit‟s Executor A/c.
26 Pass journal entries in the book of X Ltd. in the following cases: 6
(i) The Company took a loan of ₹ 1,60,000 from SBI and issued 2,000, 12%
debentures of ₹ 100 each as collateral security.
(ii) Issued 1,000, 12% debentures of ₹ 100 each at 10% premium, redeemable at a
premium of 5%.
(iii) Purchased machinery ₹ 4,60,000 from Babita Ltd. Payment was made by issue of
9% debentures of ₹ 100 each at a premium of 15% redeemable at par.
PART B
27 Which of the following items shown in companies Balance Sheet as “Contingent 1
liabilities”
(i) claims against the company not acknowledged as debts
(ii) guarantee given by the company
(iii) bills receivables discounted from Bank
(a) (i) only
(b) (i) and (ii)
(c) (i) and (iii)
(d) (i), (ii) and (iii)
OR
From the following which item appears in the subhead „Short term Provisions‟ of a
Company's Balance Sheet
(a) calls in advance
(b) prepaid expenses
(c) provision for tax
(d) outstanding expenses
28 Working capital ratio of a company is 2.5. If current liabilities are ₹ 60000 , then 1
current assets are
(a) ₹ 120000
(b) ₹ 150000
(c) ₹ 3 lakh
(d) ₹ 24000
29 Statement I: 'Cash Flows' implies movement of cash in and out due to some non-cash 1
items.

Page 10 of 13
 Statement II: Receipt of cash from a non-cash item is termed as cash inflow while
cash payment in respect of such items as cash outflow.
Choose the correct option from options given below:
(A) Statement I is correct and statement II is wrong.
(B) Statement II is correct and statement I is wrong.
(C) Both the statements are correct.
(D) Both the statements are wrong.
OR
Which of the following transactions will result into 'Inflow of Cash'?
(A) Deposited ₹ 10,000 into bank
(B) Withdrew cash from bank ₹ 14,500
(C) Sale of machinery of the book value of ₹ 74,000 at a loss of ₹ 9,000
(D) Converted ₹ 2,00,000 ; 9% debentures into equity shares
30 Mohan Limited purchased the machinery for ₹ 9 lakh. It received a dividend of ₹ 1
70000 on investment in shares. The company also sold an old machine of the book
value of ₹ 79000 at a loss of ₹ 10000. Cash flow from investing activities are:
(a) ₹ 761000 outflow
(b) ₹ 761000 inflow
(c) ₹ 901000 outflow
(d) ₹ 901000 inflow
31 Under which heads and subheadings the following items will be shown in the 3
Balance sheet of company as per schedule III part 1 of The Companies Act, 2013
(a) security premium reserve
(b) calls in advance
(c) stores and spares
(d) tax reserve
(e) mining rights
(f) vehicles
32 (a) Calculate the inventory turnover ratio with the help of the following information: 3
Revenue from operations ₹ 8 lakh; Average inventory ₹ 110000 ; Gross Loss 10%
(b) A company earns a Gross Profit of 20% on cost. Its credit revenue from
operations is twice its cash Revenue from operations. Credit revenue from operations
is ₹ 8 lakh. Calculate the Gross Profit ratio.
33 Prepare Common-size statement Balance Sheet from the following information: 3

Page 11 of 13
 Particulars Note 31.03.2023 31.03.2022
no. (₹) (₹)

I Equity and liabilities

1 Shareholders fund
(a) Equity sh Cap 10,00,000 5,00,000
(b) Reserves & Surplus 2,00,000 3,00,000
2 Non- current liabilities
Long term borrowings 8,00,000 5,00,000
3 Current liabilities
Trade Payables 4,00,000 2,00,000

Total 24,00,000 15,00,000

II Assets
1 Non-current Assets
(a) Fixed Assets
(i) Tangible assets 15,00,000 10,00,000
2 Current Assets
(a) Cash and cash equivalents 9,00,000 5,00,000

24,00,000 15,00,000

OR
Prepare Comparative statement of Profit and Loss from the following information:

Particulars Note 31-03-2022 31-03-2023

no.

Revenue from operations ₹ 2000000 ₹ 2500000

Cost of material consumed(% of ₹ 1000000 ₹ 1300000

RFO)

Operating expenses NIL ₹ 120000

Income tax rate 50 % 50 %

34 Read the following hypothetical text and answer the given question on the basis of 6

Page 12 of 13
the same.
Khyati started a small enterprise under the 'Skill India Scheme‟, As the business
grew, the revenue started increasing and she decided to form Khyati Limited to
achieve her objectives with 10 other like-minded persons the financial position of the
company is given in its Balance Sheet as at 31.03.2022
Balance Sheet as at 31.03.2022

Particulars Note 31.03.2022 31.03.2021

no. (₹) (₹)

I Equity and liabilities

1 Shareholders fund
(c) Equity sh Cap 2000000 1700000
(d) Reserves & Surplus 300000 400000
2 Non- current liabilities
Long term borrowings 300000 200000
3 Current liabilities
Trade Payables 50000 25000

Total 2650000 2325000

II Assets
1 Non-current Assets
(b) Fixed Assets
(i) Tangible assets 800000 900000
(ii) Intangible assets 500000 200000
(c) Non-current Investments 300000 400000
2 Current Assets
(b) Inventories 400000 500000
(c) Trade Receivables 150000 125000
(d) Cash and cash equivalents 500000 200000

2650000 2325000
Additional information:
Depreciation of ₹ 100000 was charged on tangible assets during the year.
On the basis of the above information prepare the cash flow statement of Khyati
Limited.

******************** END OF PAPER ********************

Page 13 of 13