NEB Class 12 · Past paper
The complete NEB Class 12 2075 exam paper for Accountancy, all 22 questions with solved model answers.
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Define prospectus and mention any two contents to be stated in prospectus.
A prospectus is a formal written invitation issued by a public company to the general public, offering them to subscribe for its shares or debentures. It contains full information about the company so that intending investors can decide whether to invest.
Contents (any two):
Give the meaning of Debenture.
A debenture is a written acknowledgement of a debt issued by a company under its common seal, containing a promise to pay a fixed rate of interest at regular intervals and to repay the principal on a specified date. Debenture-holders are creditors of the company, not owners.
State the parties interested in Financial Statement.
Parties interested in financial statements:
Write the meaning of Ratio Analysis.
Ratio analysis is a technique of financial statement analysis in which meaningful relationships between two related figures of the financial statements are established and expressed as a ratio, percentage or proportion. It is used to jud...
Briefly explain any three objectives of Cost Accounting.
Objectives of cost accounting (any three): 1. Ascertainment of cost: to find out the cost per unit of product or service. 2. Cost control: to keep costs within limits through budgets and standards. 3. Fixation of selling price: to help d...
With suitable example, write the meaning of fixed cost.
Fixed cost is a cost that remains constant in total for a given period regardless of changes in the level of output, though it decreases per unit as output increases. Example: rent of building, salary of permanent staff, insurance premium.
Define time rate system of wages payment. How is it determined?
Time rate system is a method of wage payment in which a worker is paid on the basis of the time devoted to work (per hour, day, week or month), irrespective of the units produced. It is determined by the formula: $$\text{Wages} = \text{T...
Give the meaning of apportionment of overhead.
Apportionment of overhead is the process of distributing common (indirect) overhead costs that cannot be identified with a single department among two or more departments or cost centres on some equitable basis (such as area, number of w...
A company forfeited 80 shares of Rs.10 each, issued at 10% discount, for non-payment of final call of Rs.3 per share. Out of these shares, 60 shares were re-issued at Rs.8 per share as fully paid. Required: Entries for forfeiture, re-issue and transfer of share.
Shares of Rs.10 issued at 10% discount (Rs.9). On the forfeited shares:
$$ \begin{aligned} \text{application + allotment received} &= \text{Rs.}9 - \text{Rs.}3,(\text{final call}) \ &= \text{Rs.}6 \text{ per share} \end{aligned} $$
discount Rs.1 per share.
Forfeiture of 80 shares:
$$ \begin{aligned} \text{amount received} &= 80 \times \text{Rs.}6 \ &= \text{Rs.}480 \ \text{discount} &= 80 \times \text{Rs.}1 \ &= \text{Rs.}80 \ \text{call unpaid} &= 80 \times \text{Rs.}3 \ &= \text{Rs.}240 \end{aligned} $$
Journal entries
| Particulars | Dr (Rs.) | Cr (Rs.) |
|---|---|---|
| Share Capital A/c (80 $\times$ 10) ..... Dr | 800 | |
| $\quad$ To Discount on Issue of Shares A/c | 80 | |
| $\quad$ To Share Forfeiture A/c | 480 | |
| $\quad$ To Share Final Call A/c | 240 | |
| (80 shares forfeited for non-payment of final call) | ||
| Bank A/c (60 $\times$ 8) ................. Dr | 480 | |
| Share Forfeiture A/c (60 $\times$ 2) . Dr | 120 | |
| $\quad$ To Share Capital A/c | 600 | |
| (60 forfeited shares re-issued @ Rs.8 as fully paid) | ||
| Share Forfeiture A/c ................ Dr | 240 | |
| $\quad$ To Capital Reserve A/c | 240 | |
| (Profit on 60 re-issued shares: 60 $\times$ 6 - 120 transferred) |
Forfeiture on the remaining 20 shares
$$ \begin{aligned} 20 \times \text{Rs.}6 &= \text{Rs.}120 \end{aligned} $$
stays in the Share Forfeiture Account until re-issued.
A company issued 4,000 shares of Rs.100 each at a premium of Rs.10 per share payable Rs.20 on application, Rs.50 on allotment (including premium) and Rs.40 on final call per share. Applications were received for 6,000 shares. These shares were allotted on pro-rata basis to the applicants for 5,000 shares and the remaining were rejected. Excess application money was utilised towards allotment. All money was duly received. Required: Entries for application, allotment and final call.
Allotment Rs.50 includes premium Rs.10, so allotment towards capital = Rs.40. Pro-rata: applicants for 5,000 shares get 4,000; applicants for 1,000 shares (6,000 - 5,000) rejected and refunded. $$ \begin{aligned} \text{Application receiv...
P Company Ltd. issued 5,000 shares of Rs.100 each at a premium of 20% to purchase the following assets and liabilities of Q company ltd.: Fixed Assets Rs.6,00,000; Current assets Rs.2,00,000; Loan Rs.1,00,000; Creditors Rs.50,000. Required: Entries for purchase of assets and liabilities.
A Company Ltd. issued 4,000 debentures of Rs.100 each at par. These debentures were redeemed after 7 years at 10% premium. Required: Entries for issue and redemption of debentures.
$$ \begin{aligned} \text{Face value} &= 4{,}000 \times \text{Rs.}100 \ &= \text{Rs.}4{,}00{,}000 \end{aligned} $$ issued at par. $$ \begin{aligned} \text{Premium on redemption} &= 10% \ &= \text{Rs.}40{,}000 \end{aligned} $$ Journal e...
The Trial Balance of a company: Debit - Machinery 65,000; Prepaid rent 8,000; Salary expense 10,000; Admin expense 30,000; Sundry assets 37,000 (Total 1,50,000). Credit - Capital 50,000; Creditors 10,000; Service revenue 80,000; Commission income 10,000 (Total 1,50,000). Additional: (a) Commission earned but not received Rs.3,000 (b) Prepaid rent Rs.6,000 was expired. Required: (i) Adjustment Entries (ii) Work sheet.
Adjustment entries Particulars Dr (Rs.) Cr (Rs.) --------- Accrued Commission A/c ........... Dr 3,000 $\quad$ To Commission Income A/c 3,000 Rent Expense A/c ..................... Dr 6,000 $\quad$ To Prepaid Rent A/c 6,000 Work Sheet Ac...
Trial Balance of Ganesh Company Ltd. as on 31st Dec 2017: Debit - Opening stock 10,000; Furniture 50,000; Purchase 70,000; Wages 20,000; Debtors 10,000; Salaries 15,000; Cash 6,000; Machinery 1,00,000; Rent 8,000; Insurance 6,000 (Total 2,95,000). Credit - Sales 1,53,900; Share Capital 1,00,000; Purchase return 1,500; Creditors 9,000; Reserve fund 16,000; Commission 1,000; Profit and loss a/c 13,600 (Total 2,95,000). Additional: (a) Depreciation on Furniture 10% (b) Outstanding wages Rs.2,000 (c) Closing stock Rs.18,000 (d) Proposed dividend 10% (e) Provision for bad debts 5%. Required: (i) Trading Account (ii) Profit and loss Account (iii) Profit and loss Appropriation Account (iv) Balance Sheet.
Trading Account Dr Rs. Cr Rs. ------------ To Opening stock 10,000 By Sales 1,53,900 To Purchases (70,000 - 1,500) 68,500 By Closing stock 18,000 To Wages (20,000 + 2,000) 22,000 To Gross Profit c/d 71,400 Total 1,71,900 Total 1,71,900 P...
Following information are provided: Stock Rs.2,00,000; Sales Rs.7,00,000; Net profit Rs.1,00,000; Creditors Rs.1,25,000; Cash Rs.50,000; Debtors Rs.1,50,000; Inventory Turnover Ratio 5 times; Fixed Assets turnover 2.5 times. Required: (i) Current Ratio (ii) Liquid Ratio (iii) Debtors Turnover Ratio (iv) Fixed Assets.
$$ \begin{aligned} \text{Current Assets} &= \text{Stock }2{,}00{,}000 + \text{Cash }50{,}000 + \text{Debtors }1{,}50{,}000 \ &= \text{Rs.}4{,}00{,}000 \end{aligned} $$ Current Liabilities = Creditors Rs.1,25,000. (i) Current Ratio = CA ...
Following information are given (Year I / Year II): Share capital 4,00,000 / 4,50,000; 10% Debentures 2,00,000 / 1,50,000; Profit & Loss account 40,000 / 80,000; Goodwill 24,000 / 22,000. Additional: (a) Dividend paid (2nd year) Rs.25,000 (b) Depreciation charge Rs.15,000 (c) Fixed assets purchased during 2nd year Rs.70,000. Required: (i) Funds from operation (ii) Funds flow statement.
(i) Funds From Operation Particulars Rs. ------ Closing balance of P&L A/c 80,000 Add: Goodwill written off (24,000 - 22,000) 2,000 Add: Depreciation 15,000 Add: Dividend paid 25,000 Less: Opening balance of P&L A/c (40,000) Funds from O...
The Balance Sheet of a company for two years (Year 1 / Year 2): Liabilities - Share capital 7,00,000 / 9,00,000; 5% Debentures 1,00,000 / 50,000; Retained earning 1,50,000 / 2,50,000; Creditors 1,50,000 / 2,00,000; Outstanding Expenses 40,000 / 60,000. Assets - Fixed Assets 5,00,000 / 7,00,000; Stock 1,00,000 / 1,50,000; Sundry debtors 4,20,000 / 3,10,000; Bank balance 1,20,000 / 3,00,000. Additional: (a) Sales revenue Rs.13,00,000 (b) Cost of goods sold Rs.7,00,000 (c) Administrative expenses Rs.1,30,000 (d) Purchase of fixed assets Rs.3,00,000. Required: Cash flow statement.
Working: Retained earnings increased by Rs.1,00,000 (no dividend given), so net profit = Rs.1,00,000. Fixed Assets A/c:
$$ \begin{aligned} \text{Opening }5{,}00{,}000 + \text{Purchase }3{,}00{,}000 - \text{Closing }7{,}00{,}000 &= \textbf{Depreciation Rs.}1{,}00{,}000 \end{aligned} $$
(balancing figure).
Cash Flow Statement (Indirect Method)
| Particulars | Rs. | Rs. |
|---|---|---|
| A. Operating Activities | ||
| Net profit (increase in retained earnings) | 1,00,000 | |
| Add: Depreciation | 1,00,000 | |
| Operating profit before working capital changes | 2,00,000 | |
| Add: Decrease in debtors (4,20,000 - 3,10,000) | 1,10,000 | |
| Add: Increase in creditors (2,00,000 - 1,50,000) | 50,000 | |
| Add: Increase in outstanding expenses (60,000 - 40,000) | 20,000 | |
| Less: Increase in stock (1,50,000 - 1,00,000) | (50,000) | |
| Net cash from operating activities | 3,30,000 | |
| B. Investing Activities | ||
| Purchase of fixed assets | (3,00,000) | |
| Net cash used in investing activities | (3,00,000) | |
| C. Financing Activities | ||
| Issue of share capital (9,00,000 - 7,00,000) | 2,00,000 | |
| Redemption of debentures (1,00,000 - 50,000) | (50,000) | |
| Net cash from financing activities | 1,50,000 | |
| Net increase in cash (A + B + C) | 1,80,000 | |
| Add: Opening bank balance | 1,20,000 | |
| Closing bank balance | 3,00,000 |
The given sales (13,00,000), cost of goods sold (7,00,000) and administrative expenses (1,30,000) are reflected in the reported net profit. Closing bank Rs.3,00,000 agrees with the balance sheet.
The following transactions were taken from the store for the month of Poush: Poush 1 Opening balance 400 units for Rs.2,000; Poush 3 Purchase 600 units @ Rs.6 each; Poush 6 Issued 800 units; Poush 15 Return from department 70 units; Poush 22 Purchase 800 units @ Rs.7 each; Poush 25 Issued 830 units; Poush 28 Store verification surplus 10 units. Required: Store ledger under First In First Out (FIFO) Method.
Opening 400 units for Rs.2,000 = Rs.5 per unit. Return from department (Poush 15) is valued at the last issue rate Rs.6. Verification surplus (Poush 28) is added at the current rate Rs.7. Store Ledger (FIFO Method) (amounts in Rs.) Date ...
The following information are given: Annual requirement 36,000 units; Ordering cost per order Rs.60; Cost per unit Rs.100; Carrying cost per unit 10% of inventory cost. Required: Economic Order Quantity.
$$ \begin{aligned} \text{Carrying cost per unit} &= 10% \text{ of } \text{Rs.}100 \ &= \text{Rs.}10 \ EOQ &= \sqrt{\frac{2 \times A \times O}{C}} \ &= \sqrt{\frac{2 \times 36{,}000 \times 60}{10}} \ &= \sqrt{4{,}32{,}000} \ &\approx 657 \text{ units} \end{aligned} $$
Economic Order Quantity ≈ 657 units.
Standard output in a day of 8 hours is 56 units. Rate per unit is Rs.100 and a worker worked 180 hours in a month. Required: Monthly wages of a worker.
$$ \begin{aligned} \text{Standard output per hour} &= 56 \text{ units} / 8 \text{ hours} \ &= 7 \text{ units per hour} \ \text{Output in 180 hours} &= 7 \times 180 \ &= 1{,}260 \text{ units} \end{aligned} $$
Under the piece rate system, Monthly wages = Output $\times$ Rate per unit $$ \begin{aligned} &= 1{,}260 \times 100 \ &= \text{Rs.}1{,}26{,}000 \end{aligned} $$
The details of manufacturing and other costs are as follow: Direct material Rs.1,00,000; Direct labour Rs.80,000; Factory overhead Rs.60,000; Administrative overhead Rs.50,000; Selling overhead Rs.30,000. Following estimate costs were made for submitting tender: Direct material Rs.60,000; Direct labour Rs.40,000. Factory overhead based on direct labour and other overheads based on works cost, and factory wants to earn 25% profit on sales. Required: (i) Cost sheet (ii) Tender sheet.
(i) Cost Sheet Particulars Rs. ------ Direct material 1,00,000 Direct labour 80,000 Prime Cost 1,80,000 Add: Factory overhead 60,000 Works (Factory) Cost 2,40,000 Add: Administrative overhead 50,000 Add: Selling overhead 30,000 Total Cos...
Net profit as per financial account was Rs.60,000. On reconciliation, the following facts were noticed: (a) Factory overhead under recorded in cost account Rs.8,000 (b) Interest expense recorded in financial account Rs.3,000 (c) Over valuation of opening stock in financial account Rs.6,000 (d) Income tax paid Rs.8,500. Required: Reconciliation between cost and financial account.
Reconciliation Statement (starting from Financial Profit) Particulars (+) Rs. (-) Rs. --------- Net Profit as per Financial Account 60,000 Factory overhead under-recorded in cost account (charged less in cost) 8,000 Interest expense reco...
Shares of Rs.10 issued at 10% discount (Rs.9). On the forfeited shares:
discount Rs.1 per share.
Forfeiture of 80 shares:
Journal entries
| Particulars | Dr (Rs.) | Cr (Rs.) |
|---|---|---|
| Share Capital A/c (80 10) ..... Dr | 800 | |
| To Discount on Issue of Shares A/c | 80 | |
| To Share Forfeiture A/c | 480 | |
| To Share Final Call A/c | 240 | |
| (80 shares forfeited for non-payment of final call) | ||
| Bank A/c (60 8) ................. Dr | 480 | |
| Share Forfeiture A/c (60 2) . Dr | 120 | |
| To Share Capital A/c | 600 | |
| (60 forfeited shares re-issued @ Rs.8 as fully paid) | ||
| Share Forfeiture A/c ................ Dr | 240 | |
| To Capital Reserve A/c | 240 | |
| (Profit on 60 re-issued shares: 60 6 - 120 transferred) |
Forfeiture on the remaining 20 shares
stays in the Share Forfeiture Account until re-issued.
issued at par. Journal e...
Adjustment entries Particulars Dr (Rs.) Cr (Rs.) --------- Accrued Commission A/c ........... Dr 3,000 To Commission Income A/c 3,000 Rent Expense A/c ..................... Dr 6,000 To Prepaid Rent A/c 6,000 Work Sheet Ac...
Current Liabilities = Creditors Rs.1,25,000. (i) Current Ratio = CA ...
Working: Retained earnings increased by Rs.1,00,000 (no dividend given), so net profit = Rs.1,00,000. Fixed Assets A/c:
(balancing figure).
Cash Flow Statement (Indirect Method)
| Particulars | Rs. | Rs. |
|---|---|---|
| A. Operating Activities | ||
| Net profit (increase in retained earnings) | 1,00,000 | |
| Add: Depreciation | 1,00,000 | |
| Operating profit before working capital changes | 2,00,000 | |
| Add: Decrease in debtors (4,20,000 - 3,10,000) | 1,10,000 | |
| Add: Increase in creditors (2,00,000 - 1,50,000) | 50,000 | |
| Add: Increase in outstanding expenses (60,000 - 40,000) | 20,000 | |
| Less: Increase in stock (1,50,000 - 1,00,000) | (50,000) | |
| Net cash from operating activities | 3,30,000 | |
| B. Investing Activities | ||
| Purchase of fixed assets | (3,00,000) | |
| Net cash used in investing activities | (3,00,000) | |
| C. Financing Activities | ||
| Issue of share capital (9,00,000 - 7,00,000) | 2,00,000 | |
| Redemption of debentures (1,00,000 - 50,000) | (50,000) | |
| Net cash from financing activities | 1,50,000 | |
| Net increase in cash (A + B + C) | 1,80,000 | |
| Add: Opening bank balance | 1,20,000 | |
| Closing bank balance | 3,00,000 |
The given sales (13,00,000), cost of goods sold (7,00,000) and administrative expenses (1,30,000) are reflected in the reported net profit. Closing bank Rs.3,00,000 agrees with the balance sheet.
Economic Order Quantity ≈ 657 units.
Under the piece rate system, Monthly wages = Output Rate per unit