Madhya Pradesh Board Class 12 Accountancy — NCERT Solutions

• (i) Invalid: If the deed is silent, no salary is payable to a partner.
• (ii) Invalid: If the deed is silent, interest on loan is allowed at 6% p.a., not 10%.
• (iii) Invalid: If the deed is silent, profits are shared equally, so unequal capital does not matter.
• (iv) Invalid: If the deed is silent, no interest is charged on capital.

• (i) True: A valid partnership can be formed without a written agreement.
• (ii) True: Each partner is both principal and agent of the others.
• (iii) True: The maximum number of partners is 50.
• (iv) False: The method of settlement of disputes can be included in the partnership deed.
• (v) False: If the deed is silent, no interest is charged on drawings.
• (vi) False: If the deed is silent, interest on partner’s loan is 6% p.a., not 12%.

Using the combined Share Application and Allotment Account, the entries are:

Books of the company

1. Receipt of application and allotment money

• 3,000 shares × Rs. 3 = Rs. 9,000
• 3,000 shares × Rs. 2 = Rs. 6,000

Journal entry

• Bank A/c Dr. Rs. 15,000
• To Share Application and Allotment A/c Rs. 15,000

2. Transfer of application money to share capital

• 3,000 shares × Rs. 3 = Rs. 9,000

• Share Application and Allotment A/c Dr. Rs. 9,000
• To Share Capital A/c Rs. 9,000

3. Amount due on allotment

• 3,000 shares × Rs. 2 = Rs. 6,000

• Share Allotment A/c Dr. Rs. 6,000
• To Share Capital A/c Rs. 6,000

4. Receipt of allotment amount

• Bank A/c Dr. Rs. 6,000
• To Share Application and Allotment A/c Rs. 6,000

Since all amounts due have been received, there is no balance in calls in arrears or calls in advance. The combined account closes after transferring the application money and recording allotment.

Share capital in Balance Sheet

• Authorised Capital = Rs. 40,000
• Issued / Subscribed / Paid-up Capital = 3,000 shares × Rs. 10 = Rs. 30,000

So the share capital shown in the balance sheet is Rs. 30,000.

From the chapter:

• Authorised share capital is the capital the company is authorised to issue.
• Issued share capital is the part of authorised capital actually issued to the public, including shares allotted to vendors and signatories.
• Subscribed capital is the part of issued capital actually subscribed by the public.

Given

• Authorised capital = Rs. 25,00,000 divided into 2,50,000 shares of Rs.10 each.
• Shares issued to public = 2,00,000 shares.
• Applications received and shares allotted = 1,80,000 shares.
• Promoters subscribed = 25,000 shares.

Calculation

Authorised Share Capital

• 2,50,000 × Rs.10 = Rs. 25,00,000

Issued Share Capital

• Public issue: 2,00,000 shares
• Promoters: 25,000 shares
• Total issued = 2,25,000 shares
• 2,25,000 × Rs.10 = Rs. 22,50,000

Subscribed Share Capital

• Public subscribed = 1,80,000 shares
• Promoters subscribed = 25,000 shares
• Total subscribed = 2,05,000 shares
• 2,05,000 × Rs.10 = Rs. 20,50,000

So the figures are:

• Authorised Share Capital = Rs. 25,00,000
• Issued Share Capital = Rs. 22,50,000
• Subscribed Share Capital = Rs. 20,50,000

The chapter lists the five components of CAS as Data, People, Procedure, Hardware, Software. So option (b) is correct.

The chapter defines CAS as the processing of accounting transactions through the use of hardware and software in order to produce accounting records and reports. So the correct option is (b).

Correct Answer: (a) A $\frac{9}{16}$, B $\frac{3}{16}$, C $\frac{4}{16}$

Given:

• Old ratio of A : B = 3 : 1
• C's share = 1/4

Working:

Remaining share for A and B = $1 - \frac{1}{4} = \frac{3}{4}$

A's new share = $\frac{3}{4} \times \frac{3}{4} = \frac{9}{16}$

B's new share = $\frac{1}{4} \times \frac{3}{4} = \frac{3}{16}$

C's share = $\frac{1}{4} = \frac{4}{16}$

New profit sharing ratio = A : B : C = $\frac{9}{16} : \frac{3}{16} : \frac{4}{16}$ = 9 : 3 : 4

This matches option (a).

A debenture is a written instrument acknowledging a debt under the common seal of the company. It contains a contract for repayment of principal after a specified period and for payment of interest at a fixed rate.

In Excel 2007, the book says to click the Microsoft Office Button to get started.

Distinction between Gaining Ratio and Sacrificing Ratio:

Given: 47 items to be classified under Major Heads and Sub-heads as per Schedule III of the Companies Act, 2013.

Classification Table:

In the PMT-related financial functions, the rate means the interest for a period.

TRUE. Dissolution of partnership means a change in the existing relationship among partners (e.g., due to admission, retirement, death), but the firm continues its business. Dissolution of a firm, on the other hand, means complete closure of the firm's business, realisation of all assets and settlement of all liabilities. Thus, the two are distinct concepts.

Analysis simply means simplifying data.

Explanation: Analysis involves breaking down complex financial data into simpler components so that it can be understood and examined more easily.

To change a chart's location, the correct command is Move here.

(a) False – Financial reporting serves multiple purposes: it informs managers, investors, creditors, government, and other stakeholders about the financial position and performance of the firm, not just managers.

(b) True – The process of examining and interpreting the data contained in financial statements is called financial analysis.

(c) True – Long-term lenders (providers of long-term borrowings) are primarily concerned with the firm's ability to meet interest obligations periodically and repay the principal at maturity.

(d) False – A ratio can be expressed as a quotient, a percentage, a rate (e.g., times), or a proportion. It is not always expressed only as a quotient.

(e) True – Ratio analysis facilitates both time-series comparison (over different periods for the same firm) and cross-sectional comparison (with other firms in the same industry).

(f) False – Ratios are computed from accounting figures and therefore reflect only quantitative aspects. They do not capture qualitative aspects such as management quality, employee morale, or brand value.

Classification of Activities:

Operating Activities (main revenue-generating activities of the enterprise):

• 3. Cash revenue from operations
• 6. Cash receipt from trade receivables
• 7. Trading commission received
• 10. Cash purchases
• 13. Cash paid to supplier
• 15. Employee benefits expenses paid
• 18. Interest paid on long-term borrowings (for non-financial enterprises, as per AS-3)
• 19. Office and administrative expenses paid
• 20. Manufacturing overheads paid
• 23. Selling and distribution expenses paid
• 24. Income tax paid
• 25. Dividend paid on preference shares (can also be financing; commonly treated as operating or financing)
• 27. Rent paid
• 32. Refund of income-tax received

Investing Activities (acquisition and disposal of long-term assets and investments):

• 1. Purchase of machinery
• 5. Proceeds from sale of old machinery
• 8. Purchase of non-current investment
• 11. Proceeds from sale of non-current investment
• 12. Purchase of goodwill
• 16. Proceeds from sale of patents
• 17. Interest received on debentures held as investments
• 21. Dividend received on shares held as investment
• 22. Rent received on property held as investment
• 28. Brokerage paid on purchase of non-current investment

Financing Activities (activities that result in changes in size and composition of owners' capital and borrowings):

• 2. Proceeds from issue of equity share capital
• 4. Proceeds from long-term borrowings
• 9. Redemption of preference shares
• 14. Interim dividend paid on equity shares
• 26. Under-writing commission paid

Cash Equivalents (short-term, highly liquid investments readily convertible to cash):

• 29. Bank overdraft (cash equivalent — negative cash)
• 30. Cash credit (cash equivalent — negative cash)
• 31. Short-term deposit
• 32. Marketable securities

Note: Under AS-3 (Revised), interest paid and dividends paid may be classified as operating or financing activities; interest received and dividends received may be classified as operating or investing activities. The above classification follows the most common treatment for non-financial enterprises.