Super 20 All In One Class 12 (Commerce_Stream)

As&ptePhraetplheaerterfesotdrCu2Bc0eS2dE1SSEyaxlmalampblues 12 CBSE 2021 SAMPLE PAPERS Strictly Based on Sample Papers issued by CBSE COMMERCE STREAM COMBINED BOOK FOR All Subjects English Core Mathematics Accountancy Economics Business Studies Full Marks Pvt Ltd (Progressive Educational Publishers) New Delhi-110002

Published by: 9, Daryaganj, New Delhi-110002 Phone: 011- 40556600 (100 Lines) Website: www.fullmarks.org E-mail: [email protected] © Publishers All rights reserved. No part of this publication may be reproduced or transmitted, in any form or by any means, without permission. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. Branches: • Chennai • Guwahati Marketing Offices: • Ahmedabad • Bengaluru • Bhopal • Dehradun • Hyderabad • Jaipur • Jalandhar • Kochi • Kolkata • Lucknow • Mumbai • Patna • Ranchi NEW EDITION “This book is meant for educational and learning purposes. The author(s) of the book has/have taken all reasonable care to ensure that the contents of the book do not violate any existing copyright or other intellectual property rights of any person in any manner whatsoever. In the event the author(s) has/have been unable to track any source and if any copyright has been inadvertently infringed, please notify the publisher in writing for corrective action.” Printed at:

Note from the Publishers Sample Papers-XII (Commerce Stream) is a combined book, for all subjects, based on the reduced CBSE syllabus and the latest Sample Papers issued by CBSE for 2021 Board Examination. These Sample Papers will give students a clear perception of the questions which are likely to come in the exam. They can therefore perform in a better manner in the exams. These Sample Papers are developed in a way to help students prepare in a more efficient manner of their Board Examination. Each Sample Paper, developed by highly experienced subject experts and editors, is as per the level and the pattern of questions asked by the CBSE. These Sample Papers will help know about the questioning pattern of each subject. Students are advised to practice more and more. In this Book, every subject contains 10 Sample Papers (3 solved and 7 unsolved Sample Papers). The unsolved Sample Papers are given with answers as well. They are highly suitable for students who are looking for CBSE Sample Papers. Therefore, if you are looking for some parameter to evaluate your preparation and take guidance, the book will help you as well. Features of Sample Papers • Designed exclusive to test the knowledge and preparation level of students. • Latest CBSE Sample Papers have been given with Marking Scheme. • Modified CBSE Board Question Papers-2020 have been given with Answers as per the latest CBSE Sample Paper. • Each Sample Paper fulfills the weightage of each unit/chapter as per the latest syllabus issued by CBSE. Any suggestions for further improvement of this book will be thankfully received and incorporated in the next edition. —Publishers (iii)

CONTENTS 1. English Core.............................................................................................. A-1 – A-110 • Sample Papers 1-3 (Solved)................................................................................... A-1 • Sample Papers 4-10 (Unsolved)........................................................................... A-45 2. Mathematics............................................................................................... B-1 – B-106 • Sample Papers 1-3 (Solved)....................................................................................B-1 • Sample Papers 4-10 (Unsolved)............................................................................B-59 3. Accountancy.............................................................................................. C-1 – C-106 • Sample Papers 1-3 (Solved)....................................................................................C-1 • Sample Papers 4-10 (Unsolved)............................................................................C-57 4. Economics................................................................................................... D-1 – D-66 • Sample Papers 1-3 (Solved)................................................................................... D-1 • Sample Papers 4-10 (Unsolved)........................................................................... D-33 5. Business Studies........................................................................................... E-1 – E-66 • Sample Papers 1-3 (Solved)....................................................................................E-1 • Sample Papers 4-10 (Unsolved)............................................................................E-37 ✷ Detailed Answers of Unsolved Sample Papers (4-10) will be available on our website www.fullmarks.org. (iv)

ACCOUNTANCY

QUESTION PAPER DESIGN Time : 3 hours Max. Marks: 80 S.No. Typology of Questions Total marks %Weightage 1 Remembering and Understanding: 44 55% Exhibit memory of previously learned material by 19 23.75% recalling facts, terms, basic concepts, and answers. Demonstrate understanding of facts and ideas by 17 21.25% organizing, comparing, translating, interpreting, giving 80 100% descriptions, and stating main ideas 2 Applying: Solve problems to new situations by applying acquired knowledge, facts, techniques and rules in a different way. 3 Analysing, Evaluating and Creating Examine and break information into parts by identifying motives or causes. Make inferences and find evidence to support generalizations. Present and defend opinions by making judgments about information, validity of ideas, or quality of work based on a set of criteria. Compile information together in a different way by combining elements in a new pattern or proposing alternative solutions. Total

1Sample Paper– [CBSE SAMPLE PAPER–2020-21] [Issued by CBSE] Time: 3 Hours Maximum Marks: 80 General Instructions: 1. This question paper comprises two Parts – A and B. There are 32 questions in the question paper. All questions are compulsory. 2. Part A is compulsory for all candidates. 3. Part B has two options i.e. (1) Analysis of Financial Statements and (2) Computerized Accounting. You have to attempt only one of the given options. 4. Question nos. 1 to 13 and 23 to 29 are very short answer type questions carrying 1 mark each. 5. Question nos. 14 and 30 are short answer type–I questions carrying 3 marks each. 6. Question nos. 15 to 18 and 31 are short answer type–II questions carrying 4 marks each. 7. Question nos. 19, 20 and 32 are long answer type–I questions carrying 6 marks each. 8. Question nos. 21 and 22 are long answer type–II questions carrying 8 marks each. 9. There is no overall choice. However, an internal choice has been provided in 2 questions of three marks, 2 questions of four marks and 2 questions of eight marks. PART - A (Accounting for Not-for-Profit Organisations, Partnership Firms and Companies) Q1. Which of the following items is not dealt through Profit and Loss Appropriation Account?1 (a) Interest on Partner’s Loan (b) Partner’s Salary (c) Interest on Partner’s Capital (d) Partner's Commission Q2. For which of the following situations, the old profit sharing ratio of partners is used at the time of admission of a new partner? 1 (a) When new partner brings only a part of his share of goodwill. (b) When new partner is not able to bring his share of goodwill. (c) When, at the time of admission, goodwill already appears in the balance sheet. (d) When new partner brings his share of goodwill in cash. Q3. Reserve Capital is not a part of: 1 (a) Authorized Capital (b) Subscribed Capital (c) Unsubscribed Capital (d) Issued Share Capital Q4. Sports Star Charitable club has income of ` 16,000 and ‘deficit’ debited to capital fund of ` 4,300 for the year 2019-20, then expenditure for the year 2019-20 is: 1 (a) ` 11,700 (b) ` 4,300 (c) ` 20,300 (d) None of these C–1

Q5. At the time of dissolution of partnership firm, journal entry for the settlement of loan advanced by the firm to a partner would be: 1 (a) Bank A/c Dr. (b) Loan to Partner A/c   Dr.   To Loan to Partner A/c    To Bank A/c (c) Realisation A/c Dr. (d) None of these   To Loan to Partner A/c Q6. A company forfeited 4,000 shares of `10 each on which application money of `3 has been paid. Out of these 2,000 shares were reissued as fully paid up and `4,000 has been transferred to capital reserve. Calculate the rate at which these shares were reissued: 1 (a) `10 per share (b) `9 per share (c) `11 per share (d) `8 per share Q7. On the basis of the following data, how much final payment will be made to a partner on firm’s dissolution? Credit balance of capital account of the partner was ` 50,000. Share of loss on realization amounted to `10,000. Firm’s liability taken over by him was for ` 8,000: 1 (a) ` 32,000 (b) ` 48,000 (c) ` 40,000 (d) ` 52,000 Q8. Arun and Vijay are partners in a firm sharing profits and losses in the ratio of 5:1. Balance Sheet (Extract) Liabilities ` Assets ` Machinery 40,000 If value of machinery in the balance sheet is undervalued by 20%, then at what value will machinery be shown in new balance sheet: 1 (a) ` 44,000 (b) ` 48,000 (c) ` 32,000 (d) ` 50,000 Q9. Rex, Tex and Flex are partners in a firm in the ratio of 5:3:2. As per their partnership agreement, the share of deceased partner is to be calculated on the basis of profits and turnover of previous accounting year. Tex expired on 31st December 2019. Turnover till the date of death was ` 18,00,000. Their profits and turnover for the year 2018-19 amounted to ` 4,00,000 and ` 20,00,000 respectively. An amount of ` ____________will be given to his executors as his share of profits till the date of death. 1 Q10. Retirement or death of a partner will create a situation for the continuing partners, which is known as: 1 (a) Dissolution of Partnership (b) Dissolution of Partnership firm (c) Winding up of business (d) None of the above Q11. A, B and C are partners. C expired on 18th December 2019 and as per agreement surviving partners A and B directed the accountant to prepare financial statements as on 18th December 2019 and accordingly the share of profits of C (deceased partner) was calculated as ` 12,00,000. Which account will be debited to transfer C’s share of profits: 1 (a) Profit and Loss Suspense account (b) Profit and Loss Appropriation Account (c) Profit and Loss Account (d) None of these C–2 n Accountancy– XII

Q12. E, F and G are partners sharing profits in the ratio of 3:3:2. As per the partnership agreement, G is to get a minimum amount of ` 80,000 as his share of profits every year and any deficiency on this account is to be personally borne by E. The net profit for the year ended 31st March, 2020 amounted to ` 3,12,000. Calculate the amount of deficiency to be borne by E. 1 (a) ` 1,000 (b) ` 4,000 (c) ` 8,000 (d) ` 2,000 Q13. Pick the odd one out: 1 (a) Rent to partner (b) Manager’s Commission (c) Interest on Partner’s Loan (d) Interest on Partner’s Capital Q14. From the following information, calculate the amount to be charged to Income and Expenditure Account for 'Sports material consumed' for the year 2019-20. Particulars Amount (`) Stock of Sports material (01-04-2019) 60,000 Amount paid to creditors (during 2019-20) 3,00,000 Creditors for Sports Materials (01-04-2019) 1,00,000 Creditors for Sports Materials (31-03-2020) 80,000 Sports Material sold During the year (Book Value `35,000) 15,000 Cash Purchases of Sports Material (During the Year 2019-20) 1,30,000 There was zero stock at the end of financial year 2019-20. 3 OR Calculate the amount of Subscription to be credited to Income and Expenditure account for the year 2019-20. Particulars Amount (`) Amount received during the year (including `20,000 for 2018-19, `30,000 for 2020- 7,80,000 21 and `10,000 for 2021-22) Subscription received in advance as on 01-04-2019 (including `15,000 for 2020-21) 35,000 Subscription in arrears as on 01-04-2019 40,000 Subscription in arrears as on 31-03-2020 50,000 Out of subscription in arrears on 01-04-2019, ` 15,000 are no longer recoverable. Q15. Rohit, Raman and Raina are partners in a firm. Their capital accounts on 1st April, 2019, stood at ` 2,00,000, ` 1,20,000 and ` 1,60,000 respectively. Each partner withdrew ` 15,000 during the financial year 2019-20. As per the provisions of their partnership deed: (a) Interest on capital was to be allowed @ 5% per annum. (b) Interest on drawings was to be charged @ 4% per annum. (c) Profits and losses were to be shared in the ratio 5:4:1. The net profit of ` 72,000 for the year ended 31st March 2020, was divided equally amongst the partners without providing for the terms of the deed. You are required to pass a single adjustment entry to rectify the error (Show workings clearly). 4 OR A&B are partners in the ratio of 3:2. The firm maintains fluctuating capital accounts and the balance of the same as on 31-03-2020 amounted to ` 1,60,000 and ` 1,40,000 for A and B respectively. Their drawings during the year were ` 30,000 each. Sample Paper–1  n  C–3

As per partnership deed interest on capital @10% p.a. on opening capitals had been provided to them. Calculate opening capitals of partners given that their profits were ` 90,000. Show your workings clearly. Q16. From the following information complete Journal entries. 4 Date Particulars L.F. Dr. (`) Cr. (`) Share Capital A/c Dr. ? Securities Premium Reserve A/c Dr. 1,000    To Share Forfeiture A/c ?    To Calls in Arrears A/c 3,500 (Being  ?  shares forfeited for non-payment of `  ?  including premium of `2 per share) Bank A/c Dr. ? Share Forfeiture A/c Dr. ?    To Share capital A/c (Being  ?  shares reissued @ ` 9 per share as fully paid) ? Share forfeiture A/c Dr. 600    To Capital reserve A/c 600 (Being forfeiture money transferred to capital reserve) Dr. Particulars Share Forfeiture A/c Cr. Date To Share Capital A/c Amount (`) Date Particulars Amount (`) To Capital Reserve A/c ? By Capital A/c 1500 600 To Balance c/d 600 1,500 1,500 (Face value of share is `10 each) Q17. Pass necessary journal entries in the following cases on the dissolution of a partnership firm of partners X, Y, A and B: (i) Realization expenses of ` 5,000 were to 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 creditor at a discount of 20%. 4 Q18. Ajay, Binod and Chandra entered into partnership on 1st April 2019 with a capital of ` 3,00,000, ` 2,00,000 and ` 1,00,000 respectively. In addition to capital Chandra has advanced a loan of ` 1,00,000. Since they had no agreement to guide them, they faced following issues during and at the end of the year. (i) Ajay wanted interest on capital to be provided @ 8% p.a. but Binod and Chandra did not agree. (ii) Chandra wanted that interest on loan be paid to him @ 10% p.a. but Ajay and Binod wanted to pay @ 5% p.a. C–4 n Accountancy– XII

(iii) Ajay and Binod demanded to share profits in the ratio of their capital contribution, Chandra is not in agreement with this proposal. (iv) Binod, being working partner, demands a lump sum payment of ` 40,000 as remuneration for which other partners are not in agreement. You are required to suggest and help them resolve these issues. 4 Q19. From the following Receipts and Payments Account of Krish Fitness and wellness Club for the year ended 31st March 2020, prepare Income and Expenditure Account. Receipts and Payments Account Dr. for the year ened on 31st March, 2020 Cr. Receipts Amount (`) Payments Amount (`) To Balance b/d 85,000 By Doctors and Coaches Honorarium 25,000 To Subscription 68,500 By Medicines 15,500 To Entrance Fees 25,000 By Medical Equipment 30,000 To Life Membership Fees 30,000 By General Expenses 8,000 To Donations for Tournament Fund 20,000 By Furniture 20,000 To Sale of Old Medical Equipment 5,000 By Newspaper 8,000 (Book Value `15,000) By Rent, Rates and Taxes 5,000 To Miscellaneous Receipts 15,000 By Tournament Expenses 60,000 By Balance c/d 77,000 2,48,500 2,48,500 Additional Information: Following opening balances appeared in the books on 1st April, 2019. (a) Tournament fund ` 15,000. (b) Medical Equipment ` 1,50,000. (c) Outstanding Subscription was ` 8,000 and Advance Subscription ` 5,000 (for 2019-20). During the year 2019-20 Depreciation on medical equipment was ` 25,000. There were 600 members each paying an annual subscription of ` 100. 6 Q20. (i) N eeraj Ltd. took over business of Ajay Enterprises on 1-04-2020. The details of the agreement regarding the assets and liabilities to be taken over are: Particulars Book Value (`) Agreed Value (`) Building 20,00,000 35,00,000 Plant and Machinery 12,00,000 8,00,000 Stock 4,00,000 4,00,000 Trade Receivables 5,00,000 4,00,000 Creditors 2,00,000 3,00,000 Outstanding Expenses 50,000 1,00,000 It was decided to pay for purchase consideration as ` 7, 00,000 through Cheque and balance by issue of 2,00,000, 9% Debentures of ` 20 each at a premium of 25%. Journalize. (ii) On April 1, 2019 Z Ltd. issued, 10,000, 8% Debentures of ` 100 each at premium of 5%, to be redeemable at a premium of 10%, after 5 years. The entire amount was payable on application. The issue was oversubscribed to the extent of 10,000 debentures and the allotment was made proportionately to all the applicants. The securities premium amount Sample Paper–1  n  C–5

has not been utilized for any other purpose during the year. Give journal entries for the issue of debentures and writing off loss on issue of debentures. 6 Q21. Sunaina and Tamanna are partners in a firm sharing profits and losses in the ratio of 3:2. Their Balance Sheet as at 31st March, 2020 stood as follows: Balance Sheet Liabilities Amount (`) Assets Amount (`) Capital Accounts: Plant & Machinery 1,20,000    Sunaina 60,000 Land and Building 1,40,000    Tamanna 80,000 1,40,000 Debtors 1,90,000 Current Accounts: 10,000 Less: Provision for (40,000) 1,50,000    Sunaina Doubtful debts    Tamanna 30,000 40,000 Stock 40,000 General Reserve 1,20,000 Cash 30,000 Workmen’s Compensation Goodwill 20,000 Reserve 50,000 Creditors 1,50,000 5,00,000 5,00,000 They agreed to admit Pranav into partnership for 1/5th share of profits on 1st April, 2020, on the following terms: (a) All Debtors are good. (b) Value of land and building to be increased to ` 1,80,000. (c) Value of plant and machinery to be reduced by ` 20,000. (d) The liability against Workmen’s Compensation Fund is determined at ` 20,000 which is to be paid later in the year. (e) Mr. Anil, to whom ` 40,000 were payable (already included in above creditors), drew a bill of exchange for 3 months which was duly accepted. (f ) Pranav to bring in capital of ` 1,00,000 and ` 10,000 as premium for goodwill in cash. Journalise. 8 OR Krish, Vrish and Peter are partners sharing profits in the ratio of 3:2:1. Vrish retired from the firm. On that date the Balance Sheet of the firm was as follows: Balance Sheet as on 31st March, 2020 Liabilities Amount (`) Assets Amount (`) Creditors 15,000 Bank General Reserve 12,000 Furniture 7,600 Bills Payable 12,000 Stock Outstanding Salary 2,200 Premises 41,000 Provision for Legal Damages 6,000 Debtors Capitals: Less: Provision for Doubtful Debts 9,000    Krish 46,000 80,000 6,000 (400) 5,600 C–6 n Accountancy– XII

   Vrish 30,000    Peter 20,000 1,43,200 1,43,200 Additional Information : (a) Premises to be appreciated by 20%, Stock to be depreciated by 10% and Provision for doubtful debts was to be maintained @ 5% on Debtors. Further, provision for legal damages is to be increased by ` 1,200 and furniture to be brought up to ` 45,000. (b) Goodwill of the firm is valued at ` 42,000. (c) ` 26,000 from Vrish’s Capital account be transferred to his loan account and balance to be paid through bank; if required, necessary loan may be obtained from bank. (d) New profit sharing ratio of Krish and Peter is decided to be 5 : 1. Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet. Q22. Zocon Ltd. issued a prospectus inviting applications for 5,00,000 equity shares of ` 10 each issued at a premium of 10% payable as: ` 3 on Application ` 5 on Allotment (including premium) and ` 3 on call. Applications were received for 6,60,000 shares. Allotment was made as follows: (a) Applicants of 4,00,000 shares were allotted in full. (b) Applicants of 2,00,000 shares were allotted 50% on pro rata basis. (c) Applicants of 60,000 shares were issued letters of regret. A shareholder to whom 500 shares were allotted under category (a) paid full amount on shares allotted to him along with allotment money. Another shareholder to whom 1,000 shares were allotted under category (b) failed to pay the amount due on allotment. His shares were immediately forfeited. These shares were then reissued at ` 14 per share as ` 7 paid up. Call has not yet been made. Journalise. 8 OR X Ltd. has offered 50,000 equity shares of ` 100 each at a premium of ` 20, payable as follows: Application ` 50 Allotment ` 40 (including premium) and balance on first and final call. The bank account of the company has received ` 35,00,000 on account of share application money. X Ltd. decided to allot shares to all the applicants on Pro Rata basis. The balance in calls in arrears account at the time of allotment and first and final call amounted to ` 1,00,000 and ` 1,50,000 respectively. These shares were forfeited and re-issued at ` 90 per share as fully paid up. Journalize. PART - B Q23. (Analysis of Financial Statements) Balance Sheet (Extract) Equity and Liabilities 31-3-2019 31-3-2020 12% Debentures 2,00,000 1,60,000 Sample Paper–1  n  C–7

Additional Information: Interest on debentures is paid on half yearly basis on 30th September and 31st March each year. Debentures were redeemed on 30th September 2019. How much amount (related to above information) will be shown in Financing Activity for Cash Flow Statement prepared on 31st March 2020? 1 (a) Outflow ` 40,000 (b) Inflow ` 42,600 (c) Outflow ` 61,600 (d) Outflow ` 64,000 Q24. What will be the Current ratio of a company whose Net Working Capital is Zero? 1 1 Q25. Which of the following is not a part of Finance Cost (in statement of profit and loss)? (a) Bank Charges (b) Interest Paid on Debentures (c) Interest Paid on Public Deposits (d) Loss on Issue of Debentures Q26. Which of the following is not an investing cash flow? 1 (a) Purchase of marketable securities for ` 25,000 cash (b) Sale of land for ` 28,000 cash (c) Sale of 2,500 shares (held as investment) for ` 15 each (d) Purchase of equipment for ` 500 cash Q27. Proposed dividend is a _________ liability. 1 1 Q28. The _________ may indicate that the firm is experiencing stock outs and lost sales. (a) Average payment period (b) Inventory turnover ratio (c) Average collection period (d) Quick ratio Q29. Current ratio of Vidur Pvt. Ltd. is 3:2. Accountant wants to maintain it at 2:1. Following options are available. (i) He can repay bills payable (ii) He can purchase goods on credit (iii) He can take short term loan Choose the correct option. 1 (a) Only (i) is correct (b) Only (ii) is correct (c) Only (i) and (iii) are correct (d) Only (ii) and (iii) are correct Q30. Calculate proprietary ratio, if Total assets to Debt ratio is 2:1. Debt is `5,00,000. Equity shares capital is 0.5 times of debt. Preference Shares capital is 25% of equity share capital. Net profit before tax is ` 10,00,000 and rate of tax is 40%. 3 OR From the following information, calculate ‘Interest Coverage Ratio’. Profit after interest and tax ` 7,50,000 Rate of income tax 25% 9% Debentures ` 8,00,000 Q31. Prepare a Comparative Statement of Profit and Loss from the following: 4 Particulars 31st March 2019 (`) 31st March 2020 (`) Revenue from operations 20,00,000 25,00,000 Cost of materials consumed 10,00,000 13,00,000 Other expenses 1,20,000 Tax rate NIL 50% 50% C–8 n Accountancy– XII

OR From the following Balance Sheet of R Ltd., Prepare a Common Size Statement. Balance Sheet of R Ltd. (as at 31st March, 2020) Particulars Note no. 31st March 2019 (`) 31st March 2020 (`) I. Equity and Liabilities 2,50,000 2,00,000 1. Shareholders’ Funds: 80,000 60,000  (a) Share Capital  (b) Reserve and Surplus 70,000 40,000 2. Current Liabilities:  (a) Trade Payable Total 4,00,000 3,00,000 II. Assets 1,60,000 1,20,000 1. Non-Current Assets: 20,000 30,000  (a) Fixed Assets:    (i) Tangible Assets 80,000 30,000    (ii) Intangible Assets 1,20,000 1,00,000 2. Current Assets:  (a) Inventories 20,000 20,000  (b) Trade Receivables 4,00,000 3,00,000  (c) Cash and Cash Equivalents Total Q32. Prepare Cash Flow Statement on the basis of information given in the Balance Sheets of Relga Ltd. as at 31st March, 2019 and 31st March, 2020: 6 Particulars Note no. 31st March 2019 (`) 31st March 2020 (`) I. Equity and Liabilities 1 2,00,000 2,50,000 1. Shareholders’ Funds: 2 50,000 70,000  (a) Share Capital 3  (b) Reserve and Surplus 4 1,00,000 80,000 2. Non-current Liabilities:   Long-term Borrowings 5 60,000 1,60,000 3. Current Liabilities: 6 25,000 20,000  (a) Trade Payable 4,35,000  (b) Other Current Liabilities 5,80,000 1,50,000 Total 10,000 2,00,000 2,000 II. Assets 1,00,000 1. Non-Current Assets: 1,30,000  (a) Fixed Assets 70,000    (i) Tangible Assets 40,000 90,000    (ii) Intangible Assets 65,000 60,000  (b) L ong-term Loans and 4,35,000 98,000 5,80,000 Advances 2. Current Assets:  (a) Inventories  (b) Trade Receivables  (c) Cash and Cash Equivalents Total Sample Paper–1  n  C–9

Note to Accounts Particulars 31st March 2019 (`) 31st March 2020 (`) 1. Reserve and Surplus 50,000 70,000 General Reserve 2. Long-term Borrowings 1,00,000 80,000 12% Debentures 3. Trade Payables 40,000 60,000 Creditors 20,000 1,00,000 Bills Payable 60,000 1,60,000 4. Other Current Liabilities 25,000 20,000 Outstanding Expenses 5. Tangible Fixed Assets 2,00,000 2,60,000 Machinery (50,000) (60,000) Less: Provision for Depreciation 1,50,000 2,00,000 6. Intangible Fixed Assets 10,000 2,000 Goodwill Additional Information: 1. During the year a piece of machinery with a book value of ` 30,000; provision for depreciation on it ` 10,000 was sold at a loss of 50% on book value. 2. Debentures were redeemed on 31st March 2020. 6 C–10 n Accountancy– XII

Marking Scheme 1. (a) (1) 2. (c) (1) 3. (c) (1) 4. (c) (1) 5. (a) (1) 6. (b) (1) 7. (b) (1) 8. (d) (1) 9. `1,08,000 (1) 10. (a) (1) 11. (b) (1) 12. (d) (1) 13. (d) (1) 14. Dr.           Creditors for Sports Materials A/c Cr. Particulars Amount (`) Particulars Amount (`) To Bank / Cash A/c 3,00,000 By Balance b/d 1,00,000 To Balance c/d 80,000 By Vendors 2,80,000 (Credit purchase of sports material) 3,80,000 3,80,000 Table for Calculation of Sports Material Consumed: Credit Purchase of Sports Material 2,80,000 Add: Cash Purchase of Sports Material 1,30,000 Add: Stock of Sports Material (01-04-2019) 60,000 Less: Book Value of Sports Material Sold during the Year (35,000) Sports material consumed during the year (Amount t/f to Income and Expenditure 4,35,000 account) *Calculation of Sports material consumed by alternative methods should be accepted. 3 OR Dr.              Subscription A/c Cr. Particulars Amount Particulars Amount (`) (`) To Balance b/d 40,000 By Balance b/d 35,000 (arrears in Beginning) (advance in beginning) To Income and Expenditure A/c 7,80,000 To Balance c/d (advance at end) 7,85,000 By Receipts and Payments A/c 15,000 55,000 By Income and Expenditure A/c 50,000 By Balance c/d (arrears at end) 8,80,000 8,80,000 15. Journal 3 Cr. (`) Date Particulars L.F. Dr. (`) 31/3/20 Raina’s Capital A/c Dr. 11,410 10,150 1,260    To Rohit’s Capital A/c    To Raman’s Capital A/c (Being adjustment entry passed) Sample Paper–1  n  C–11

Adjustment Table Particulars Rohit Raman Raina Firm 1. Interest on Capital 10,000 6,000 2. Interest on Drawings (300) (300) 8,000 (24,000) 3. Profit wrongly distributed in equal ratio Total (24,000) (24,000) (300) 900 Distribution of Profit in the ratio of 5:4:1 (14,300) (18,300) Net Effect (24,000) 72,000 24,450 19,560 10,150 1,260 (16,300) (48,900) 4,890 48,900 (11,410) — (1.5 + 2.5 = 4) OR Calculation of Opening Capital: Particulars A (`) B (`) 1,40,000 Closing Capital 1,60,000 30,000 Add: Drawings 30,000 (25,200) 1,44,800 Less: Profits (37,800) 13,164 1,52,200 1,31,636 Less: Interest on Capital 13,836 Opening Capital 1,38,364 Workings: ` 3,00,000 Total Closing Capital (of A and B) = 1,60,000 + 1,40,000 = ` 60,000 Add: Total Drawings (of A and B) = Less: Profits (including interest on Capital) = (` 90,000) Total Capital in the beginning of the year = 2,70,000 Interest on Capital = 10% of 2,70,000 = ` 2,70,000 Divisible Profits = 90,000 – 27,000 = ` 63,000 (2 + 2 = 4) 16. Particulars L.F. Dr. (`) Cr. (`) Date 4,000 1,000 1500 Share Capital A/c Dr. 3,500 Securities Premium Reserve A/c Dr.    To Share Forfeiture A/c    To Calls in Arrears A/c (Being 500 shares forfeited for non-payment of ` 7 per share including premium of `2 per share). Bank A/c Dr. 2,700 300 Securities Premium Reserve A/c Dr. 600    To Share Capital A/c 3,000 600 (Being 300 shares reissued at ` 9 per share as fully paid). Share forfeiture A/c Dr.    To Capital Reserve A/c (Being forfeiture money transferred to capital reserve) C–12 n Accountancy– XII

Dr. Particulars Share Forfeiture A/c Cr. Date To Share Capital A/c Amount (`) Date Particulars Amount (`) To Capital Reserve A/c To Balance c/d 300 By Share Capital A/c 1500 600 600 1,500 1,500 17. Journal L.F. Debit (`) 4 S.No. 5,000 Credit (`) (i) Particulars Dr. 5,000 5,000 (ii) X’s Capital A/c Dr. 5,000    To Y’s Capital A/c Dr. 5,000 20,000 (iii) (Being Realization expenses of `5,000 were to be borne Dr. 5,000 48,000 by X, whereas, paid by Y.) Dr. 2,000 (iv) 50,000 X’s Capital A/c Dr. Y’s Capital A/c A’s Capital A/c B’s Capital A/c    To Realization A/c (Investments taken over by all partners ) Y’s Loan A/c    To Bank A/c    To Realization A/c (Y’s loan of `50,000 settled at `48,000) No Entry (1 × 4 = 4) 18. (i)  In the absence of Partnership deed, the provisions of partnership act 1932 will apply according to which no interest on capital is payable. (ii) In the absence of partnership deed, the provisions of partnership act 1932 will apply according to which interest on loan by partner will be paid @6% pa. (iii) In the absence of partnership deed, the provisions of partnership act 1932 will apply according to which profits will be shared equally. (iv) In the absence of partnership deed, the provisions of partnership act 1932 will be applicable according to which no salary/remuneration is payable to any partner. (1 × 4 = 4) 19. Income and Expenditure A/c Dr. for the year ending 31st March, 2020 Cr. Expenditure Amount (`) Income Amount (`) To Loss on Sale of Medical By Subscription 60,000 Equipment 10,000 By Entrance Fees 25,000 To Doctors and Coaches Honorarium 25,000 By Miscellaneous Receipts 15,000 To Medicine Consumed 15,500 By Deficit (excess of expenditure over To Depreciation on Medical Equipment 25,000 income) 21,500 To General Expenses 8,000 To Newspaper 8,000 To Rent, Rates and Taxes 5,000 Sample Paper–1  n  C–13

To Tournament Expenses 25,000 1,21,500 1,21,500 6 20. (i) Journal of Neeraj Ltd. Date Particulars L.F. Debit (`) Credit (`) Building A/c Dr. 35,00,000 3,00,000 Plant & Machinery A/c Dr. 8,00,000 1,00,000 Stock A/c Dr. 4,00,000 57,00,000 Trade Receivables A/c Dr. 4,00,000 Goodwill A/c Dr. 10,00,000    To Creditors A/c    To Outstanding Expenses A/c    To Ajay Enterprises A/c (Being assets and liabilities of business taken over, recorded at agreed value) Ajay Enterprises A/c Dr. 57,00,000    To Bank A/c    To 9% Debentures A/c 7,00,000    To Securities Premium Reserve A/c 40,00,000 (Being purchase consideration paid to Ajay 10,00,000 enterprises) (ii) Journal of Z Ltd. (1.5 + 1.5 = 3) Date Particulars L.F. Debit (`) Credit (`) 21,00,000 2019 Bank A/c Dr. April 1 To Debenture Application and Allotment A/c 21,00,000 Dr. (Being application money received on 20,000 8% Dr. debentures) Dr. April 1 Debenture Application and Allotment A/c Dr. 21,00,000 Loss on Issue of Debentures A/c 1,00,000    To 8% Debentures A/c    To Securities Premium Reserve A/c 10,00,000    To Premium on Redemption of Debentures A/c 50,000    To Bank A/c (Being debentures allotted and the balance refunded) 1,00,000 10,50,000 2020 Securities Premium Reserve A/c 50,000 Mar 31 Statement of Profit and Loss A/c 50,000    To Loss on Issue of Debentures A/c 1,00,000 (Being loss on Issue of Debentures written off) (0.5 + 1.5 + 1 = 3) 21. Journal Date Particulars L.F. Debit (`) Credit (`) Dr. 20,000 20,000 2020 Revaluation A/c April 1    To Plant and Machinery A/c (Being plant and machinery revalued) C–14 n Accountancy– XII

2020 Land and Building A/c Dr. 40,000 April 1 Provision for Doubtful debts A/c Dr. 40,000    To Revaluation A/c 80,000 (Being land and building revalued and provision for doubtful debts written back) 2020 Creditors A/c Dr. 40,000 April 1    To Bills Payable A/c 40,000 (Being Bills accepted from Mr. Anil) 2020 Revaluation A/c Dr. 60,000 April 1    To Sunaina’s current A/c 36,000    To Tamanna’s current A/c 24,000 (Being profit on revaluation credited to partners current account) 2020 Sunaina’s current A/c Dr. 12,000 April 1 Tamanna’s current A/c Dr. 8,000    To Goodwill A/c 20,000 (Being Goodwill written off) 2020 Cash A/c Dr. 1,10,000 April 1    To Pranav’s capital A/c 1,00,000    To Premium for Goodwill A/c 10,000 (Being capital and premium brought in by new partner) 2020 Premium for Goodwill A/c Dr. 10,000 April 1    To Sunaina’s current A/c 6,000    To Tamanna’s current A/c 4,000 (Being Premium distributed among sacrificing partners) 2020 General Reserve A/c Dr. 1,20,000 April 1    To Sunaina’s current A/c 72,000    To Tamanna’s current A/c 48,000 (Being reserve distributed among old partners) 2020 Workmen compensation reserve A/c Dr. 50,000 April 1    To Claim for workmen compensation 20,000    To Sunaina’s current A/c 18,000    To Tamanna’s current A/c 12,000 (Being provision for workmen compensation provided and balance reserve distributed among old partners) (0.5 + 1 + 1 + 1 + 0.5 + 1 + 1.5 + 0.5 + 1) Dr. OR Cr. Revaluation A/c Particulars Amount (`) Particulars Amount (`) To Stock 16,000 900 By Premises To Provision for legal damages 1,200 By Provision for Doubtful Debts 100 To Capital A/cs (Profit): By Furniture 4,000 Sample Paper–1  n  C–15

   Krish  9,000 18,000    Vrish  6,000 20,100    Peter  3,000 20,100 Dr. Partners’ Capital A/cs Cr. Particulars Peter Krish Vrish Peter Particulars Krish Vrish 20,000 To Vrish’s Capital A/c 14,000 46,000 30,000 To Vrish’s Loan A/c By Balance b/d 6,000 4,000 2,000 To Bank A/c 47,000 9,000 6,000 3,000 To Balance A/c 61,000 26,000 By General Reserve A/c 14,000 61,000 54,000 25,000 28,000 By Revaluation A/c 25,000 By Krish’s Capital A/c 54,000 25,000 Balance Sheet of Krish and Peter (As at 1st April 2020) Liabilities Amount (`) Assets Amount (`) Creditors 15,000 Furniture 45,000 Bank Loan 20,400 Stock 8,100 Bills Payable 12,000 Premises 96,000 Outstanding Salary 2,200 Debtors 6,000 Provision for Legal Damages 7,200 Less: Provision for Doubtful 5,700 Vrish’s Loan A/c 26,000 Debts 300 Capitals:    Krish 47,000    Peter 25,000 1,54,800 1,54,800 (2.5 + 3 + 2.5) 22. Journal S.No. Particulars L.F. Debit (`) Credit (`) 1. Dr. 19,80,000 19,80,000 Bank A/c 2.    To Equity Share Application A/c Dr. 19,80,000 (Being application money received) 15,00,000 3,00,000 Equity Share Application A/c 1,80,000    To Equity Share capital A/c    To Equity Share Allotment A/c    To Bank A/c (Being Shares allotted and balance refunded) 3. Equity Share Allotment A/c Dr. 25,00,000    To Equity Share capital A/c 20,00,000 5,00,000    To Securities Premium Reserve A/c (Being Share allotment money including premium due) C–16 n Accountancy– XII

4. Bank A/c Dr. 21,99,500 Calls in Arrears A/c Dr. 2,000    To Equity Share Allotment A/c    To Calls in Advance A/c 22,00,000 (Being allotment money received) 1,500 5. Equity Share Capital A/c Dr. 7,000 Securities Premium Reserve A/c Dr. 1,000    To Shares Forfeited A/c    To Calls In Arrears A/c 6,000 (Being 1000 shares forfeited for non-payment of 2,000 allotment including premium.) 6. Bank A/c Dr. 14,000    To Share Capital A/c    To Securities Premium Reserve A/c 7,000 (Being forfeited shares reissued at ` 14 per share) 7,000 7. Shares Forfeited A/c Dr. 6,000    To Capital Reserve A/c (Being share forfeited money transferred to Capital 6,000 Reserve account) (0.5 + 1 + 1 + 2 + 1.5 + 1 + 1 = 8) OR Journal S.No. Particulars L.F. Debit (`) Credit (`) 1. Bank A/c Dr. 35,00,000    To Equity Share Application A/c 35,00,000 (Being application money received) 2. Equity Share Application A/c Dr. 35,00,000    To Equity Share capital A/c 25,00,000 10,00,000    To Equity Share Allotment A/c (Being Shares allotted on proportionate basis and excess amount received on application adjusted towards allotment) 3. Equity Share Allotment A/c Dr. 20,00,000    To Equity Share capital A/c 10,00,000 10,00,000    To Securities Premium Reserve A/c (Being Share allotment money including premium due) 4. Bank A/c Dr. 9,00,000 Calls in Arrears A/c Dr. 1,00,000    To Equity Share Allotment A/c (Being allotment money received ,except for 5,000 10,00,000 shares) 5. Equity Share First and Final call A/c Dr. 15,00,000    To Equity Share capital A/c 15,00,000 (Being share first and final call money due) Sample Paper–1  n  C–17

6. Bank A/c Dr. 13,50,000 1,50,000 Calls in Arrears A/c Dr.    To Equity Share First and Final call A/c 15,00,000 (Being first and final call money received ,except for 5,000 shares) 7. Equity Share Capital A/c Dr. 5,00,000 Securities Premium Reserve A/c Dr. 1,00,000    To Shares Forfeited A/c    To Calls In Arrears A/c 3,50,000 (Being 5000 shares forfeited for non-payment of 2,50,000 allotment money and first and final call money) 8. Bank A/c Dr. 4,50,000 50,000 Shares Forfeited A/c Dr.    To Share Capital A/c 5,00,000 (Being forfeited shares reissued at ` 90 per share, as fully paid up) 9. Shares Forfeited A/c Dr. 3,00,000    To Capital Reserve A/c (Being share forfeited money transferred to Capital 3,00,000 Reserve) (0.5 + 1 + 1 + 1 + 1 + 1 + 1 + 1 + 0.5) 23. (c) (1) 24. 1:1 (1) 25. (a) (1) 26. (a) (1) 27. Contingent (1) 28. (b) (1) 29. (a) (1) 30. Proprietary Ratio = Proprietor's Fund /Total Assets (½) Total Assets = Debts × 2 = `5,00,000 × 2 = `10,00,000(1) Proprietor’s Funds = Equity Share Capital + Preference Share Capital + Surplus = (5,00,000 × 0.5) + (5,00,000 × 0.5 × 25%) + (10,00,000 – 40% of 10,00,000) = 2,50,000 + 62,500 + 6,00,000 (1) = `9,12,500 Proprietary Ratio = 9,12,500 / 10,00,000 = 0.912 : 1 (½) OR Interest coverage Ratio = Profit before Interest and Tax / Interest on Long term Debts (½) Profit after Interest and Tax = ` 7,50,000 + Tax = ` 2,50,000 Profit before Tax = ` 10,00,000(1)     + Interest on debenture = ` 72,000 = ` 10,72,000 (1) Interest coverage Ratio = 10,72,000 / 72,000 = 14.89 times (½) C–18 n Accountancy– XII

31. Comparative Statement of Profit and Loss for the years ended Mar 31, 2019 and 2020. Particulars Note No. 2018-19 2019-20 Absolute Percentage Change Change I. Revenue from Operations 20,00,000 25,00,000 II. Total Revenue 20,00,000 25,00,000 5,00,000 25.00 Less: Expenses III. Cost of Material Consumed 5,00,000 25.00 IV. Other Expenses Total Expenses 10,00,000 13,00,000 3,00,000 30.00 V. Profit before Tax (II–IV) 1,20,000 1,20,000 Less: Tax @ 50% 10,00,000 14,20,000 4,20,000 42.00 VI. Profit after Tax 10,00,000 10,80,000 8.00 5,00,000 5,40,000 80,000 8.00 5,00,000 5,40,000 40,000 8.00 40,000 4 OR Common Size Balance Sheet of R Ltd. (as at 31-03-2019 and 31-03-2020) Particulars Note No. Absolute Absolute As a % of Balance Sheet 31-3-2019 31-3-2020 31-3-2019 31-3-2020 (`) (`) (%) (%) I. Equity and Liabilities 20,00,000 2,50,000 66.67 62.5 1. Shareholders’ Funds: 60,000 80,000 20 20  (a) Share Capital  (b) Reserve and Surplus 40,000 70,000 13.33 17.5 2. Current Liabilities:  (a) Trade Payable Total 3,00,000 4,00,000 100 100 II. Assets 1,20,000 1,60,000 40 40 1. Non-Current Assets: 30,000 20,000 10 5  (a) Fixed Assets:    (i) Tangible Assets 30,000 80,000 10 20    (ii) Intangible Assets 1,00,000 1,20,000 33.33 30 2. Current Assets: 6.67 5  (a) Inventories 20,000 20,000  (b) Trade Receivables  (c) Cash and Cash Equivalents Total 3,00,000 4,00,000 100 100 4 32. Cash flow Statement of Relga Ltd. (As per AS-3 revised) Particulars Details (`) Amount (`) Operating Activities 20,000    Profit before Tax and Extra-ordinary items Sample Paper–1  n  C–19

Non-Operating and Non-cash items 15,000 1,30,000    Loss on Sale of Machinery 20,000    Depreciation Charged on Machinery 8,000 (1,15,000)   Goodwill amortized 12,000    Interest on Debentures 75,000 18,000 Operating profit before changes in working capital 33,000 Changes in working Capital 20,000 65,000    Increase in creditors 80,000 98,000    Increase in Bills Payable (5,000)    Decrease in outstanding expenses (20,000)    Increase in inventories (20,000)    Increase in trade receivables Cash inflow from operating activities 15,000 Investing Activities (1,00,000)    Sale of Machinery    Purchase of Machinery (30,000)    Loans advanced Cash used in investing activities 50,000 Financing Activities (20,000)    Issue of shares (12,000)   Debentures Redeemed    Interest on Debentures Cash from financing activities   Net Cash inflow during the year   Add: opening cash and cash equivalents   Closing Cash and Cash equivalents Dr.              Machinery A/c Cr. Particulars Amount (`) Particulars Amount (`) To Balance b/d 2,00,000 By Bank A/c 15,000 To Bank A/c 1,00,000 By Profit and Loss A/c 15,000 (Balancing figure) 10,000 By Provision for Depreciation A/c 2,60,000 By Balance c/d 3,00,000 3,00,000 Dr.             Provision for Depreciation A/c Cr. Particulars Amount (`) Particulars Amount (`) To Machinery A/c 10,000 By Balance b/d 50,000 To Balance c/d 60,000 By Depreciation A/c 20,000 (Balancing figure) 70,000 6 70,000 qqq C–20 n Accountancy– XII

4Sample Paper– Maximum Marks: 80 Time: 3 Hours General Instructions: Same as Sample Paper-1 PART - A (Accounting for Not-for-Profit Organisations, Partnership Firms and Companies) Q1. A firm earns ` 1,10,000. The normal rate of return is 10%. The assets of the firm amounted to ` 11,00,000 and liabilities to ` 1,00,000. Value of goodwill by capitalisation of average actual profit will be: 1 (a) ` 2,00,000 (b) ` 10,000 (c) ` 5,000 (d) ` 1,00,000 Q2. An unrecorded asset was valued at ` 2,00,000. On firm’s dissolution, it was sold for 60%. Realisation account will be credited with:1 (a) ` 1,20,000 (b) ` 80,000 (c) ` 1,00,000 (d) None of the above Q3. The portion of Authorised Capital which can be called up only on the liquidation of the company is called: 1 (a) Authorised Capital (b) Reserve Capital (c) Issued Capital (d) Called up Capital Q4. The transactions shown in Income and Expenditure Account are: 1 (a) Revenue in Nature (b) Capital in Nature (c) Both (a) and (b) (d) Assets & Liabilities Q5. Anu and Tanu are equal partners with fixed capitals of ` 2,00,000 and ` 1,00,000 respectively. After closing the accounts for the year ending 31st March, 2019 it was discovered that interest on capitals @ 8% p.a. was omitted to be provided. The adjusting entry will be: 1 (a) Anu will be credited by ` 16,000 and Tanu will be credited by ` 8,000 (b) Anu will be debited by ` 16,000 and Tanu will be debited by ` 8,000. (c) Anu will be credited by ` 4,000 and Tanu will be debited by ` 4,000. (d) Anu will be debited by ` 4,000 and Tanu will be credited by ` 4,000 Q6. As per the section of the Companies Act, amount received as premium on securities cannot be utilized for: 1 (a) Issuing fully paid bonus shares to the members (b) Purchase of fixed assets (c) Writing off preliminary expenses (d) Buy back of its own shares Q7. On dissolution, advertisement suspense appearing in Balance Sheet is shown in: 1 (a) Realisation Account (b) Partners’ Capital Accounts (c) Bank Account (d) Revaluation Account Q8. A and B are partners sharing profits in the ratio of 3 : 2. On admission of C for 1/5th share, land is appreciated by 10% (Book value ` 80,000), Building (` 2,00,000) is decreased by 20% C–57

unrecorded debtors of ` 1,250 are brought in the books and creditors of ` 2,750 need not be paid. The gain (profit) or loss on revaluation will be: 1 (a) Loss ` 28,000 (b) Loss ` 40,000 (c) Profit ` 28,000 (d) Profit ` 40,000 Q9. In case of death of a partner, the profit may be estimated on the basis of ................... and ................... . 1 Q10. In the event of retirement of a partner, employees provident fund appears in the balance sheet will be shown in: 1 (a) Capital A/c (Cr.) (b) Capital A/c (Dr.) (c) Liability side of balance sheet (d) Assets side of balance sheet Q11. A, B and C were partners sharing profits and losses in the ratio of 2 : 2 : 1. Books are closed on 31st March every year. C dies on 1st November, 2019. Under the partnership deed, the executors of the deceased partner are entitled to his share of profit till the date of death, calculated on the basis of last year’s profit. Profit for the year ended 31st March, 2019 was ` 2,40,000. C’s share of profit will be: 1 (a) ` 28,000 (b) ` 32,000 (c) ` 28,800 (d) ` 48,000 Q12. A, B and C are partners sharing profits in the ratio of 5 : 3 : 2. According to partnership agreement, C is to get a minimum amount of ` 10,000 as his share of profit every year. The net profit for the year ended 31st March 2019 amounted to ` 40,000. How much amount is contributed by A? 1 (a) ` 1,350 (b) ` 1,250 (c) ` 750 (d) ` 1,225 Q13. The relation of the partner with the firm is that of 1 (a) An owner (b) An agent and a principal (c) An agent (d) Manager Q14. From the following information, calculate the amount of subscriptions to be credited to the income and expenditure account for the year 2018-19: 3 Subscriptions received during the year Amount (`) Subscriptions outstanding on 31st March, 2018 60,000 Subscriptions outstanding on 31st March, 2019 26,000 Subscriptions received in advance on 31-3-18 6,000 Subscriptions received in advance on 31-3-19 15,000 Subscriptions are still in arrears for the year 2017-18 10,000 2,000 OR From the following information of a club, show the amount of match expenses and match fund in the financial statements of the club for the year ended on 31st March, 2019 and 31st March, 2020. Amount (`) Match expenses (paid during the year 2019-20) 30,000 Match fund (as on 31-3-2019) 17,000 Donation for match fund (Received during the year 2019-20) 9,000 Proceeds from the sale of match tickets (received during the year 2019-20) 3,000 C–58 n Accountancy– XII

Q15. A and B were into the business of providing software solution in India. They were sharing profits and losses in the ratio of 3 : 2. They admitted R for 1/5th share in the firm. R, an alumni of IIT, would help them to expand their business to various South African countries where he had been working earlier. R is guaranteed a minimum profit of ` 2,00,000 for the year. Any deficiency in R’s share is to be borne by A and B in the ratio 4 : 1. Losses for the year was ` 1,00,000. Pass the necessary journal entries. 4 OR The capital accounts of Amar and Harsh stood at ` 2,00,000 and ` 3,00,000 respectively after the necessary adjustment in respect of drawings and net profit for the year ended 31st March, 2017. It was subsequently ascertained that interest on capital @ 12% p.a. was not taken into account while arriving at the divisible profits for the year. During the year 2016-17, Amar had withdrawn ` 20,000 and Harsh’s drawings were ` 10,000. The net profit for the year amounted to ` 1,50,000. The partners share profits and losses in the ratio of 3 : 2. You are required to pass the necessary journal entries to rectify the error in accounting. Q16. Fill in the blank spaces in the journal entries given below.4 Date Particulars L.F. Dr. (`) Cr. (`) Share Capital A/c Dr. 80,000    To ______________    To Share first call A/c — (Being 1,000 shares of ` 100 each, ` 80 called up 30,000 forfeited for non payment of first call of ` 30 per share) Bank A/c Dr. — ______________ Dr. —    To Share capital A/c (Being 400 shares reissued at ` 70 per share ` 80 paid up ) — Share forfeited A/c Dr. —    To Capital reserve A/c — (Being gain on reissue of forfeited shares transferred to capital reserve) Q17. Sudha and Joshi were partners in a firm sharing profits in the ratio of 3 : 7. On 31st March, 2011 the balance sheet of the firm was as follows: Liabilities 3,00,000 Amount (`) Assets Amount (`) Capital A/cs: 7,00,000 Land & Building 6,00,000   Sudha 10,00,000 Machinery 5,00,000   Joshi 2,77,000 Stock 40,000 Creditors 1,23,000 Debtors 2,00,000 Profit & Loss A/c 14,00,000 Bank 60,000 14,00,000 The firm was dissolved on 1st April, 2011 and the assets and liabilities were settled as follows: (i) Creditor accepted stock and debtors in full and final settlement of their claim. (ii) Land and building was sold for ` 7,00,000 and machinery was taken over by Joshi by paying cash less than 30% of its book value. Pass necessary journal entries for dissolution of the firm. 4 Sample Paper–4  n  C–59

Q18. Give your suggession in the following situations: (a) A and B agree to run a business that involved importing precious stones into India without paying the required taxes. Do you think it is a valid partnership? Why? (b) Does loan advanced by a partner’s wife have preferential treatment with regard to repayment? (c) ‘A’ lends his name to the partnership under the condition that he receives a share of profits only and will not be liable to bear the losses. Can he be inducted as a partner in the firm? (d) Giri, a partner, had advanced a loan of ` 1,20,000 to his firm. He demands interest at the rate of 10% p.a. on the loan as the partnership deed is silent about the same. Is his demand acceptable? 4 Q19. A new club in the name of Moon Club has been established on 1st April, 2018. Following is their receipts and payments account for the year ended 31st March, 2019. Receipts and Payments Account Cr. Dr. for the year ending 31st March, 2019 Receipts Amount (`) Payments Amount (`) To Entrance fee 5,000 By Maintenance charges 2,440 To Legacies 12,000 By Furniture 5,000 To Subscriptions 10,000 By Rent 1,000 To Sale of old newspaper 2,000 By Salary 3,500 To Profit from annual dinner 1,000 By Honorarium 2,000 To Life membership fees 9,000 By Conveyance 500 By Books 2,000 By Balance c/d 22,560 39,000 39,000 Additional information: (i) Rent outstanding ` 500. (ii) 50% of the entrance fees and entire life membership fee is to be capitalised. (iii) Subscriptions outstanding for 2018-19 were ` 1,500. (iv) Maintenance charges was unpaid for ` 200. Prepare income and expenditure account for the year ended 31st March, 2019 and the balance sheet as on that date. 6 Q20. Give the necessary journal entries in each of the following cases if the face value of debenture is ` 100. (a) A debenture issued at ` 104 repayable at ` 100. (b) A debenture issued at ` 100 repayable at ` 105. (c) A debenture issued at 108 repayable at ` 105. 6 Q21. Sameer, Yasmin and Saloni were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 3. On 31-03-2019, their balance sheet was as follows: Balance Sheet Liabilities Amount (`) Assets Amount (`) Creditors 1,10,000 Cash 80,000 C–60 n Accountancy– XII

General reserve 60,000 Debtors 90,000 80,000 Capitals: 7,00,000 Less: Provision 10,000 1,00,000   Sameer 8,70,000 Stock 3,00,000   Yasmin 3,00,000 Machinery 2,00,000   Saloni 2,50,000 Building 1,50,000 Patents 60,000 Profit and Loss A/c 50,000 8,70,000 On the above date, Y retired. It is agreed that: (i) Debtors of ` 4,000 will be written off as bad debts and a provision of 5% on debtors for bad and doubtful debts will be maintained. (ii) An unrecorded creditor of ` 20,000 will be recorded. (iii) Patents will be completely written off and 5% depreciation will be charged on stock, machinery and building. (iv) Yasmin and Saloni will share future profit in the ratio of 3 : 2. (v) Goodwill of the firm on Sameer’s retirement was valued at ` 5,40,000. Pass the necessary journal entries for the above transactions in the books of the firm on Sameer’s retirement. 8 OR X and Y were partners in a firm sharing profits in the ratio of 3 : 2. On 31st March, 2018 their Balance Sheet was as follow: Balance Sheet Liabilities Amount (`) Assets Amount (`) Creditors 50,000 Land and Building 100,000 Bill Payable 20,000 Machinery 80,000 Outstanding Expenses 10,000 Stock 1,00,000 X's Capital 1,80,000 Machinery 40,000 Y's Capital Cash 10,000 70,000 3,30,000 3,30,000 On the above date Z was admitted as a new partner in the firm for 1/4th share in the profits on the following terms: (i) Z will bring ` 1,20,000 for his capital and ` 20,000 for his share as premium for goodwill. (ii) Machinery was to be depreciated by 10% and land and building was to be appreciated by ` 30,000. (iii) Stock was overvalued by ` 20,000. (iv) A provision of 5% was to be created for doubtful debts. (v) Salary outstanding was ` 5,000 Prepare Revaluation A/c, Partners’ capital A/cs and Balance Sheet of the new firm. Q22. Shyam Ltd. invited applications for issuing 80,000 equity shares of ` 10 each at a premium of ` 40 per share. The amount was payable as follows: On application – ` 35 per share (including ` 30 premium) On allotment – ` 8 per share (including ` 4 premium) Sample Paper–4  n  C–61

On first & final call – Balance. Applications for 77,000 shares were received. Shares were allotted to all the applications. Sundaram to whom 7,000 shares were allotted failed to pay the allotment money. His shares were forfeited immediately after allotment. Afterwards, the first and final call was made. Satyam, the holder of 500 shares failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares, 1,000 shares were reissued at ` 50 per per share fully paid up. The re-issued shares included all the shares of Satyam. Pass necessary journal entries for the above transactions in the books of Shyam Ltd. 8 OR Jain Ltd. invited applications for issuing 70,000 equity shares of ` 10 each at a premium of ` 35 per share. The amount was payable as follows: On application — ` 15 (including ` 12 premium) On allotment — ` 10 (including ` 8 premium) On first & final call — Balance Applications for 65,000 shares were received and allotment was made to all the applicants. A shareholder, Ram who was allotted 2,000 shares failed to pay the allotment money. His shares were forfeited immediately after allotment. Afterwards, the first and final call was made. Sohan, who had 3,000 shares, failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares, 4,000 shares were reissued at ` 50 per share fully paid up. The reissued shares included all the shares of Ram. Pass necessary journal entries for the above transactions in the books of Jain Ltd. PART - B (Analysis of Financial Statements) Q23. Which of the following transactions will not result into flow of cash? 1 (a) Issue of equity shares of ` 1,00,000 (b) Purchase of Machinery for ` 1,75,000 (c) Redemption of 9% Debentures of ` 3,50,000 (d) Cash deposited into bank ` 15,000 Q24. State one transaction which results in a decrease in ‘Debt-Equity Ratio’ and no change in current ratio.  1 Q25. Interest accrued on Investments is shown in Company’s Balance Sheet under the main head: 1 (a) Non-Current Investment (b) Current Assets (c) Other Current Assets (d) Other Non-Current Assets Q26. Kaveri Ltd. a financing company, obtained loan and advances of ` 5,00,000 during the year @ 12% p.a. It will be included in which of the following activities while preparing the cash flow statement? 1 (a) Investing activities (b) Financing activities (c) Both investing and financing activities (d) Operating activities Q27. Public deposits will be shown under the main head _________ in the Balance Sheet. 1 Q28. From the following, which ratio is not a part of profitability ratio? 1 (a) Proprietary ratio (b) Gross profit ratio (c) Operating ratio (d) Net profit ratio Q29. A company’s revenue from operations are ` 20,00,000, cost of revenue from operations is ` 14,00,000 and indirect expenses are ` 2,00,000. What is the amount of gross profit? 1 (a) ` 18,00,000 (b) ` 4,00,000 (c) ` 8,00,000 (d) ` 6,00,000 C–62 n Accountancy– XII

Q30. From the given details, calculate any two of following ratios: 3 (i) Inventory turnover ratio (ii) Operating ratio (iii) Gross profit ratio Particulars Amount (`) Particulars Amount (`) Opening inventory 28,000 Carriage inwards 4,000 Closing inventory 22,000 Employees benefit expense 4,000 Purchases 40,000 Depreciation 2,000 Revenue from operations 80,000 Capital employed 20,00,000 OR Calculate interest coverage ratio from following information: Net profit after interest and tax ` 9,60,000 12% debentures ` 20,00,000 10% loan from IDBI ` 12,00,000 Tax rate 40% Q31. Prepare a comparative statement of profit and loss for the year 2018-19 and 2019-20, from the following information: 4 Particulars 31-03-2020 (`) 31-03-2019 (`) Revenue from operations 10,00,000 5,00,000 Purchase of stock-in-trade 6,50,000 2,00,000 Change in inventories 60,000 50,000 Other expenses 10% of cost of revenue from 20% of cost of revenue from operations operations Tax rate 40% 30% OR From the information given below, prepare a comparative statement of profit and loss. Particulars 31-03-2018 (`) 31-03-2019 (`) Revenue from operations 3,00,000 4,00,000 Sales Return 1,00,000 50,000 Cost of Revenue from operations 60% of revenue 70% of revenue from from operations operations Administration expenses 7,350 Income tax 4,000 45% 45% Q32. Following is the balance sheet of Anantram Ltd. as at 31st March 2019 and 2020. Particulars Note. No. 31st March, 2020 31st March, 2019 (`) (`) I. Equity and liabilities 24,00,000 1. Shareholders’ fund 9,00,000  (a) Share capital  (b) Reserves and surplus 4,00,000 2. Non-current liabilities.   Long-term borrowings Sample Paper–4  n  C–63

3. Current liabilities 1 40,000 20,00,000  (a) Short-term borrowing (Bank overdraft) 70,000 7,00,000  (b) Trade payables 2,50,000  (c) Proposed dividend 3,00,000 40,60,000 20,000 30,000 1,50,000 32,00,000 II. Assets 2 21,40,000 16,20,000 1. Non-current assets (a) Fixed assets 3 3,20,000 4,00,000    (i) Tangible assets    (ii) Intangible assets 5,60,000 3,50,000 2. Current assets 6,50,000 5,30,000  Inventories 3,90,000 3,00,000   Trade receivables 40,60,000 32,00,000   Cash and cash equivalents Notes to accounts: Particulars 31st March, 2020 (`) 31st March, 2019 (`) 1. Reserves and surplus: 9,00,000 7,00,000 Surplus i.e. balance in statement of profit and loss 2. Tangible assets 23,30,000 17,70,000 Machinery 1,90,000 1,50,000 Less: Accumulated depreciation 21,40,000 16,20,000 3. Intangible assets 3,20,000 4,00,000 Goodwill Prepare a cash flow statement if dividends paid during the year amounted to ` 2,10,000. 6 Answers 1. (d) 2. (a) 3. (b) 4. (a) 5. (c) 6. (b) 7. (b) 12. (b) 13. (c) 8. (a) 9. Time, Sales 10. (c) 11. (a) 25. (b) 26. (d) 23. (d) 24. conversion of debentures into equity shares qqq 27. Non-current liabilities 28. (a) 29. (d) C–64 n Accountancy– XII

BUSINESS STUDIES

QUESTION PAPER DESIGN Time : 3 hours Max. Marks: 80 S.No. Typology of Questions Total marks %Weightage 1 Remembering and Understanding: 44 55% Exhibit memory of previously learned material by 19 23.75% recalling facts, terms, basic concepts, and answers. Demonstrate understanding of facts and ideas by 17 21.25% organizing, comparing, translating, interpreting, giving 80 100% descriptions, and stating main ideas 2 Applying: Solve problems to new situations by applying acquired knowledge, facts, techniques and rules in a different way. 3 Analysing, Evaluating and Creating Examine and break information into parts by identifying motives or causes. Make inferences and find evidence to support generalizations. Present and defend opinions by making judgments about information, validity of ideas, or quality of work based on a set of criteria. Compile information together in a different way by combining elements in a new pattern or proposing alternative solutions. Total

1Sample Paper– [CBSE SAMPLE PAPER–2020-21] [Issued by CBSE] Time Allowed: 3 Hours Maximum Marks: 80 General Instructions: 1. This question paper contains 34 questions. 2. Marks are indicated against each question. 3. Answer should be brief and to the point. 4. Answers to the questions carrying 3 marks may be from 50 to 75 words. 5. Answers to the questions carrying 4 marks may be about 150 words. 6. Answers to the questions carrying 6 marks may be about 200 words. 7. Attempt all parts of the questions together. Q1. ..................... is the process of dividing work into manageable activities and then grouping the activities which are similar in nature. 1 (a) Coordination (b) Departmentalisation (c) Organisation Structure (d) Delegation of authority Q2. Even though the political conditions vary from country to country, they impact the sentiment of an investor in the business, if the instability of the political conditions cause uncertainty and make it difficult for him to predict the future. Which feature of the Business environment is being highlighted in the above statement? 1 (a) Specific and general forces (b) Dynamic nature (c) Relativity (d) All the above. Q3. “Anyone can be called a manager irrespective of the educational qualification possessed by him.” Identify the characteristic of the profession that Management does not fulfil in the statement given above. 1 (a) Ethical code of Conduct (b) Professional Association (c) Restricted Entry (d) Service Motive Q4. “Even after opening up of the Indian economy in 1991, foreign companies found it extremely difficult to cut through the bureaucratic red tape to get permits for doing business in India, which created a negative impact on business.” Identify the dimension of the business environment which led to creation of the negative impact on business. 1 (a) Social Environment (b) Technological Environment (c) Political Environment (d) Legal Environment Q5. Name the process of working with and through others to effectively achieve organisational objectives by efficiently using limited resources in a changing environment. 1 (a) Management (b) Planning (c) Organising (d) Controlling. E–1

Q6. “The increase in the demand for many Ayurvedic medicines, Health products and services in the past few months, is related to the need for building immunity and an increased awareness for health care due to the spread of Corona virus.” Identify the feature of business environment being described above. 1 (a) Specific and general forces (b) Interrelatedness (c) Relativity (d) None of these Q7. Which of the following is not an element of social environment? 1 (a) Birth and Death rate (b) Constitution of the country (c) Population Shifts (d) Life expectancy Q8. ‘Even where members of a department willingly cooperate and work, a manager has to coordinate the efforts of different people in a conscious manner.’ Identify the characteristic of coordination discussed above. 1 (a) Coordination ensures unity of action (b) Coordination is a deliberate function (c) Coordination is a continuous process (d) Coordination is an all-pervasive function Q9. Name the function of management which helps in the formulation of future plans, in the light of the problems that were identified and thus, helps in better planning in the future period. 1 (a) Planning (b) Organising (c) Directing (d) Controlling Q10. Identify an important principle of management control in which only significant deviations which go beyond the permissible limit should be brought to the notice of management. 1 (a) Management by control (b) Control by exception (c) Critical point control (d) Both (a) & (b) Q11. ..................... is the process by which the manager brings order out of chaos, removes conflict among people over work or responsibility sharing and creates an environment suitable for teamwork. 1 (a) Planning (b) Organising (c) Staffing (d) Controlling OR ..................... ensures that the heads of separate business units in the organisation are responsible for profit or loss of their unit and have authority over it. (a) Span of management (b) Divisional structure (c) Functional structure (d) Hierarchy of Authority. Q 12. Match the concept of marketing in Column I with their respective definition in Column II.1 Column-I Column-II A. Product Concept (i) relates to maintaining high quality of the product B. Selling Concept (ii) relates to satisfying customer needs C. Marketing Concept (iii) relates to aggressively persuading buyer to purchase the product (a) A-i, B-ii, C-iii (b) A-ii, B-i, C-iii (c) A-iii, B-ii, C-i (d) A-i, B-iii, C-ii OR In order to get feedback about its recently launched immunity-boosting ayurvedic medicine, Atulya Limited conducted an online survey using a questionnaire, to gather customer views and opinions. Identify the marketing function being used by Atulya Limited: (a) Standardisation (b) Product Designing (c) Customer support service (d) Gathering and analysing market information E–2 n Business Studies– XII

Read the following text and answer questions 13-16 on the basis of the same: Isqaa Solar Ltd. is searching options to raise ` 20,000 crores from the primary market for diversification and modernisation of existing projects. It hired the services of a renowned financial consultancy firm, Dhan Laxmi Pvt. Ltd. for suggesting options for the same. Dhan Laxmi Pvt. Ltd. suggested a list of options to the Board of Directors of the company. It was decided that for the immediate requirement of ` 1,500 crores, the company will give a privilege to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company. ` 4,500 crores would be raised by allotment of securities to a consortium of financial institutions, instead of inviting subscription from the public by making a direct appeal to investors to raise capital. It was further decided to raise capital to the tune of ` 6,000 crores through an issuing house. All these options were accepted by the Board of Directors. The Board further decided to raise ` 8,000 crores through the on-line system of the stock exchange by entering into an agreement with the exchange. Q13. Identify the method of floatation of new issues in the primary market, not taken up by Isqaa Solar Ltd. 1 (a) Offer for sale (b) Rights issue (c) E-IPO (d) Offer through prospectus Q14. “` 4500 crores would be raised by allotment of securities to a consortium of financial institutions, instead of inviting subscription from the public by making a direct appeal to investors to raise capital.’’ Identify the method of floatation of new issues in the primary market being discussed above, which the company has decided to use. 1 (a) Offer for sale (b) Private placement (c) Right Issue (d) Offer through Prospectus Q15. Identify the reason which has made the firm raise funds from the institutional investors. 1 (a) It helps to raise funds quickly (b) It is not expensive (c) Both (a) & (b) (d) None of these. Q16. How much money was raised by the company through E-IPO’s? 1 (a) ` 8,000 crores (b) ` 4,500 crores (c) ` 20,000 crores (d) ` 6,000 crores Read the following text and answer questions 17-20 on the basis of the same: Yamuna Prasad, a small shopkeeper in Bikaner, Rajasthan used to sell the famous ‘Bhujia-Sev’. It was a quick selling product for locals and foreign tourists. His second generation expanded the business and got ‘Yamuna Ki Bhujia’ registered with concerned authorities. Gradually the brand offered a wide range of products to its customers like namkeen, sweets, bakery items etc. However, ‘Bhujia-Sev’ remained the most popular product of the brand creating maximum revenue. ‘Yamuna Ki Bhujia’ offered its products at competitive prices even while offering customer services like gift packaging and free home delivery to become a household name. Now it has virtually become a synonym for bhujia-sev in the market, so much so, that people ask for ‘Yamuna Ki Bhujia’ instead of bhujia-sev. ‘Yamuna Ki Bhujia’ has developed a strong distribution network in India and abroad by setting up retail outlets and reaching out to the customer through internet selling. Promotion of the brand had always been low profile, till the increase in competition pushed it to hire the services of a professional advertising agency, Vigyapan Pvt. Ltd for promoting the product. On the advice of Vigyapan Pvt. Ltd, ‘Yamuna Ki Bhujia’ has also worked upon managing public opinion by developing relations with the masses through sponsoring cultural and sporting events, maintenance of public parks etc. Q17. Yamuna Prasad’s second generation expanded the business and got ‘Yamuna Ki Bhujia’ registered with concerned authorities.’ 1 Sample Paper–1  n  E–3

With reference to the given text, ‘Yamuna Ki Bhujia’ is a ..................... giving it a legal protection against its use by anyone else. (a) Brand value (b) Trademark (c) Trait mark (d) Brand mark Q18. ‘Yamuna Ki Bhujia’ offered its products at competitive prices even while offering customer services like gift packaging and free home delivery, to become a household name. 1 Identify the factor affecting the element of marketing mix being discussed above. (a) Marketing methods used (b) Objectives (c) Extent of competition in the market (d) Product cost Q19. ‘Yamuna Ki Bhujia’ has developed a strong distribution network in India and abroad by setting up retail outlets and reaching out to the customer through internet selling. Identify the decision related to the element of marketing mix being discussed above. 1 (a) Storing and assorting products in order to create time utility (b) Regarding the channels or using intermediaries (c) Both (a) & (b) (d) One regarding branding, packaging and labelling Q20. On the advice of Vigyapan Pvt. Ltd, ‘Yamuna Ki Bhujia’ has also worked upon managing public opinion by developing relation with the masses through sponsoring cultural and sporting events, maintenance of public parks etc. Name the department in the organisation which is generally responsible for performing the above important task of managing public opinion.1 (a) Marketing department (b) A separate department created in the firm for the purpose (c) An outside agency (d) Any of the above. Q21. Identify the level of management whose basic task is to integrate diverse elements and coordinate the activities of different departments according to the overall objectives of the organisation. State any two functions of the level of management identified. 3 Q22. Explain ‘Internship training’ and ‘Vestibule training’ and classify them as on-the-job and off- the-job methods of training. 3 Q23. “Controlling is an indispensable function of management. Without controlling, the best of plans can go awry”. Do you agree? Explain any two reasons in support of your answer. 3 OR “It is generally believed that measurement of performance should be done after the task is completed.” Identify and explain the step in the process of the function of management being discussed above and the step followed by the same in the process. Q24. State the development functions of the Securities Exchange Board of India. 3 OR State any three money market instruments. Q25. ‘In an interview with a leading news channel, Mr. Rakesh Kwatra, CEO of ‘Get My Job’ has suggested that the Companies which want more and more people to apply for jobs in their organisation should make the process for applying for jobs easier and candidate friendly.’ Name and explain the next two steps which follow the step, in the process of the function of management being discussed above. 4 Q26. Pramod is a supervisor at ‘Shyam Breads and Biscuits Factory’. The factory produces 20,000 packets of bread and biscuits every day. As a supervisor Pramod ensures that work goes on smoothly and there is no interruption in production. He is a good leader who gives orders only after consulting his subordinates, working out the policies with the acceptance of the group. Identify and explain the leadership style being adopted by Pramod. 4 E–4 n Business Studies– XII

Q27. Briefly explain the positive and negative aspects of the type of communication which arises out of the need of employees to exchange their views. 4 OR Identify and explain the elements of directing in the cases mentioned below: (a) Astha, a manager, has the ability to influence others to bring about a change in their behaviour. (b) Neeraj, a managing director, declares share in the profits to the manager for his contribution to increase profits of the company. Q28. Explain any four factors that can affect the working capital requirement of a company. 4 OR Explain any four factors that affect the choice of capital structure of a company. Q29. Dheeraj wants to start a business of selling N-95 masks after the outbreak of the global pandemic of COVID-19. Due to the uncertain market conditions he wants to make a low investment in fixed capital. Suggest how the decisions related to the choice of technique and financing alternatives can help Dheeraj in ensuring a low investment in fixed capital requirements. 4 Q30. Explain the following rights of consumers provided by Consumer Protection Act, 1986: 4 (a) Right to Safety (b) Right to Consumer Education Q31. Explain ‘Science, not rule of thumb’, ‘Harmony, not discord’, and ‘Development of each and every person to his or her greatest efficiency and prosperity’ as principles of Scientific Management given by F.W. Taylor. 6 Q32. “Planning is worth the huge costs involved.” Do you agree? Explain any four reasons in support of your answer. 6 OR “If the project is important, then more alternatives should be generated and thoroughly discussed amongst the members of the organisation.” Identify and explain the step in the process of planning being discussed above. Also explain the remaining steps which will have to be carried out to complete the process. Q33. An important difference between S&M Ltd and most other companies is that instead of operating as one large corporation it operates as 180 smaller companies each focused on a specific product and area, implying selective dispersal of authority, recognising the decision makers need for autonomy, as decision making authority is pushed down the chain of command. It enables the company to maintain short lines of communication with customers and employees, and accelerate the development of talent. Identify the philosophy that is being followed by S&M Ltd. through which it is dividing the decision-making responsibilities among the hierarchical levels. State any five points of importance of the philosophy identified. 6 Q34. ‘Advertising’ and ‘Personal selling’ both are communication tools used by the marketers to promote their products. Yet they differ in their approach. Differentiate between the two by giving any six points. 6 OR “The elements of marketing mix are popularly known as 4 P’s of marketing.” Briefly explain these elements. Sample Paper–1  n  E–5

Marking Scheme 1. (b) Marks 1 2. (d) 1 1 3. (c) 1 1 4. (c) 1 1 5. (a) 1 1 6. (b) 1 1 7. (b) 1 1 8. (b) 1 1 9. (d) 1 1 10. (b) 1 1 11. (b)  OR (b) 1 1 12. (d)  OR (d) (1 × 2) 13. (d) (1 mark for each 14. (b) statement) 15. (c) 1 16. (a) 1 17. (b) 18. (a) 19. (b) 20. (d) 21. Top level management Functions of top-level management:(any two) 1. The top-level managers are responsible for the welfare and survival of the organisation. 2. They analyse the business environment and its implications for the survival of the firm. 3. They formulate overall organisational goals and strategies for their achievement. 4. They are responsible for all the activities of the business and for its impact on society 22. Internship training: It is a joint programme of training in which educational institutions and business firms cooperate. Selected candidates carry on regular studies for the prescribed period. Vestibule training: Employees learn their jobs on the equipment they will be using, but the training is conducted away from the actual work floor. Actual work environments are created in a class room and employees use the same material, files and equipment. E–6

Internship training can be classified as on-the-job method of training. Vestibule 1 training can be classified as off-the-job method of training. 23. Y es. Importance of controlling: (Any two) (1½ × 2) 1. Accomplishing organisational goals: The controlling function (½ mark for measures progress towards the organisational goals and brings to light the heading the deviations, if any, and indicates corrective action. 2. Judging accuracy of standards: A good control system enables + 1 mark for the management to verify whether the standards set are accurate and objective. explanation) 3. Making efficient use of resources: By exercising control, a manager seeks to reduce wastage and spoilage of resources. Each activity is performed in accordance with predetermined standards and norms. 4. Improving employee motivation: A good control system ensures that employees know well in advance what they are expected to do and what are the standards of performance on the basis of which they are appraised. 5. Ensuring order and discipline: Controlling creates an atmosphere of order and discipline in the organisation. 6. Facilitating coordination in action: Controlling provides direction to all activities and efforts for achieving organisational goals. OR Measurement of Actual performance: Performance should be measured in an (1½ × 2) objective and reliable manner. There are several techniques for measurement of performance. Wherever possible, measurement of work should be done (½ mark for during the performance. the heading Comparing actual performance with standards: This step involves comparison of actual performance with the standard. Such comparison will + 1 mark reveal the deviation between actual and desired results. Standards become for the explanation) easier when standards are set in quantitative terms. 24. Development Functions of Securities and Exchange Board of India: (1 × 3) 1. Training of intermediaries of the securities market. (1 mark 2. Conducting research and publishing information useful to all market for each participants. statement) 3. Undertaking measures to develop the capital markets by adapting a flexible approach. (1 × 3) (1 mark OR for each Money market instruments are: (Any three) statement) 1. Treasury Bill is basically an instrument of short-term borrowing by the Government of India maturing in less than one year. 2. Commercial paper is a short-term unsecured promissory note, negotiable and transferable by endorsement and delivery with a fixed maturity period. 3. Call money is short term finance repayable on demand, with a maturity period of one day to fifteen days used for inter bank transactions. 4. Certificate of deposit are unsecured, negotiable, short term instruments in bearer form, issued by commercial banks and development financial institutions. 5. Commercial bill is a bill of exchange used to finance the working capital requirements of business firms. Sample Paper–1  n  E–7

25. Selection: Selection is the process of choosing from among the pool of the (2 × 2) prospective job candidates developed at the stage of recruitment. Even in case (½ mark for of highly specialised jobs where the choice space is very narrow, the rigour naming and of the selection process serves two important purposes: (i) it ensures that the 1½ marks organisation gets the best among the available and (ii) it enhances the self- for the esteem and prestige of those selected and conveys to them the seriousness explanation) with which the things are done in the organisation. Placement and orientation: Orientation is introducing the selected employee to other employees and familiarising him with the rules and policies of the organisation. Placement refers to the employee occupying the position or post for which the person has been selected. 26. Democratic or participative leader: A democratic leader will develop action (1 + 3) plans and make decisions in consultation with his subordinates. He will encourage them to participate in decision making. This kind of leadership style is more common now-a-days, since leaders also recognise that people perform best if they have set their own objectives. They also need to respect the other’s opinion and support subordinates to perform their duties and accomplish organisational objectives. They exercise more control by using forces within the group. 27. Positive aspects of informal communication: (1 × 4) 1. Sometimes, grapevine channels may be helpful as they carry information (2 × 2) rapidly and therefore, may be useful to the manager at times. 2. Informal channels are used by the managers to transmit information so as to know the reactions of his/her subordinates. Negative aspects of informal communication: 1. The grapevine/informal communication sometimes gets distorted. It also leads to generating rumours and informal discussions and sometimes may hamper the work environment. 2. It is very difficult to detect the source of such communication. OR (a) Leadership: Leadership is the process of influencing the behaviour of people by making them strive voluntarily towards achievement of organisational goals. Leadership indicates the ability of an individual to maintain good interpersonal relations with followers and motivate them to contribute for achieving organisational objectives. (b) Motivation: Motivation means incitement or inducement to act or move. In the context of an organisation, it means the process of making subordinates to act in a desired manner to achieve certain organisational goals. 28. Following are the factors affecting working capital requirement of a company: (1 × 4) (Any four) 1. Nature of Business: The basic nature of a business influences the amount of working capital required. A trading organisation usually needs a smaller amount of working capital compared to a manufacturing organisation. E–8 n Business Studies– XII

2. Scale of Operations: For organisations which operate on a higher scale (½ mark for of operation, the quantum of inventory and debtors required is generally heading and high. Such organisations, therefore, require large amounts of working ½ marks capital as compared to the organisations which operate on a lower scale. for the 3. Business Cycle: Different phases of business cycles affect the explanation) requirement of working capital by a firm. In case of a boom, the sales as well as production are likely to be larger and, therefore, a larger amount of working capital is required. 4. Seasonal Factors: Most businesses have some seasonality in their operations. In peak season, because of higher levels of activity, larger amounts of working capital is required. 5. Production Cycle: Production cycle is the time span between the receipt of raw material and their conversion into finished goods. 6. Credit Allowed: Different firms allow different credit terms to their customers. These depend upon the level of competition that a firm faces as well as the creditworthiness of their clients. 7. Operating Efficiency: Firms manage their operations with varied degree of efficiency. 8. Availability of Raw material: Higher the quantity of material to be stored, higher the amount of working capital required. 9. Growth Prospects: If the growth potential of a concern is perceived to be higher, it will require a higher amount of working capital. 10. Level of competition: Higher level of competitiveness may necessitate higher stocks of finished goods to meet urgent orders from customers. OR Following are the factors affecting capital structure of the company: (Any four) (1 × 4) 1. Cash Flow Position: Size of projected cash flows must be considered (½ mark before borrowing. Cash flows must not only cover fixed cash payment for heading obligations but there must be sufficient buffers also. and ½ mark 2. Interest Coverage Ratio (ICR): The interest coverage ratio refers to the for the number of times earnings before interest and taxes of a company covers explanation) the interest obligation 3. Debt Service Coverage Ratio (DSCR): Debt Service Coverage Ratio takes care of the deficiencies referred to in the Interest Coverage Ratio (ICR). The cash profits generated by the operations are compared with the total cash required for the service of the debt and the preference share capital. 4. Cost of debt: A firm’s ability to borrow at a lower rate increases its capacity to employ higher debt. Thus, more debt can be used if debt can be raised at a lower rate. 5. Tax Rate: A higher tax rate makes debt relatively cheaper vis-a-vis equity. 6. Floatation cost: Process of raising funds involves some costs, these considerations may affect the choice between debt and equity, hence the capital structure. Sample Paper–1  n  E–9

7. Risk Consideration: Business risk depends upon fixed operating cost. 2 Fixed operating costs result in higher business risk and vice-versa. Total 2 risk depends upon business risk and financial risk. 2 8. Flexibility: To maintain flexibility it must maintain some borrowing 2 powers to take care of unforeseen circumstances. (3 × 2) 9. Capital Structure of other companies: It has been observed that the capital structure of competing companies also affect the capital structure of the company in question. 10. Stock Market Conditions: Stock market conditions often affect the choice between equity and debt. 29. Choice of Technique: As Dheeraj wishes to stick to a low investment model, we may suggest him to go with the labour-intensive approach to manufacture N-95 masks. Since better technology would cost him much and his risk appetite is not conducive for capital intensive techniques of production. Financial Alternatives: As he wishes to stick to a low investment model, we may suggest him to go with the lease option for fixed assets like building, heavy machinery etc. as this may reduce his investments requirement in the business. 30. (a) Right to safety: The consumer has a right to be protected against goods and services which are hazardous to life and health. For instance, electrical appliances which are manufactured with substandard products or do not conform to the safety norms might cause serious injury. Thus, consumers are educated that they should use electrical appliances which are ISI marked as this would be an assurance of such products meeting quality specifications. (b) Right to Consumer Education: The consumer has a right to acquire knowledge and to be a well-informed consumer throughout life. He should be aware about his rights and the reliefs available to him in case of a product or service falling short of his expectations. 31. Science, not rule of thumb: Taylor pioneered the introduction of the method of scientific inquiry into the domain of management practice. As different managers would follow their individual rules of thumb. It is but a statement of the obvious that all would not be equally effective. Taylor believed that there was only one best method to maximise efficiency. This method can be developed through study and analysis. The method so developed should substitute ‘Rule of Thumb’ throughout the organisation. Scientific method involved investigation of traditional methods through work-study, unifying the best practices and developing a standard method. Harmony, not discord: Factory system of production implied that managers served as a link between the owners and the workers. Since as managers they had the mandate to ‘get work done’ from the workers. Taylor recognised that this conflict helped none, the workers, the managers or the factory owners. He emphasised that there should be complete harmony between the management E–10 n Business Studies– XII

and workers. Both should realise that each employee is important. To achieve this state, Taylor called for a complete Mental Revolution on part of both management and workers. It means that management and workers should transform their thinking. Management should share the gains of the company with the workers. At the same time workers should work hard and be willing to embrace change for the good of the company. Development of each and every person to his or her greatest efficiency and prosperity: As such, scientific management also stood for worker development. Worker training was essential also to learn the ‘best method’ developed as a consequence of the scientific approach. Taylor was of the view that the concern for efficiency could be built in right from the process of employee selection. Each person should be scientifically selected. Then work assigned should suit her/his physical, mental and intellectual capabilities. To increase efficiency, they should be given required training. Efficient employees would produce more and earn more. This will ensure their greatest efficiency and prosperity for both company and workers. 32. Yes. (1½ × 4) Importance of Planning (Any four) (½ mark 1. Planning provides direction: Planning ensures that the goals or for heading objectives are clearly stated so that they act as a guide for deciding what and 1 mark action should be taken and in which direction. If goals are well defined, for the employees are aware of what the organisation has to do and what they explanation) must do to achieve those goals. 2. Planning reduces the risks of uncertainty: Planning is an activity which enables a manager to look ahead and anticipate changes. By deciding in advance the tasks to be performed, planning shows the way to deal with changes and uncertain events. Changes or events cannot be eliminated but they can be anticipated and managerial responses to them can be developed. 3. Planning reduces overlapping and wasteful activities: Planning serves as the basis of coordinating the activities and efforts of different divisions, departments and individuals. It helps in avoiding confusion and misunderstanding. Since planning ensures clarity in thought and action, work is carried on smoothly without interruptions. Useless and redundant activities are minimised or eliminated. 4. Planning promotes innovative ideas: Since planning is the first function of management, new ideas can take the shape of concrete plans. It is the most challenging activity for the management as it guides all future actions leading to growth and prosperity of the business. 5. Planning facilitates decision making: Planning helps the manager to look into the future and make a choice from amongst various alternative courses of action. The manager has to evaluate each alternative and select the most viable proposition. Planning involves setting targets and predicting future conditions thus helping in taking rational decisions. Sample Paper–1  n  E–11

6. Planning establishes standards for controlling: Planning provides the goals or standards against which actual performance is measured. By comparing actual performance with some standard, managers can know whether they have actually been able to attain the goals. If there is any deviation it can be corrected. Therefore, we can say that planning is a prerequisite for controlling. OR 2 Identifying alternative courses of action: Once objectives are set, assumptions are made. Then the next step would be to act upon them. There may be many ways to act and achieve objectives. All the alternative courses of action should be identified. The course of action which may be taken could be either routine or innovative. An innovative course may be adopted by involving more people and sharing their ideas. Remaining steps to carried out to complete the process are as follows: (1 × 4) 1. Evaluating alternative courses: The next step is to weigh pros and cons (½ mark of each alternative. Each course will have many variables which have to for heading be weighed against each other. The positive and negative aspects of each and ½ mark proposal need to be evaluated in the light of the objective to be achieved. for the 2. Selecting an alternative: This is the real point of decision making. The explanation) best plan has to be adopted and implemented. The ideal plan, of course, would be the most feasible, profitable and with least negative consequences. Most plans may not always be subjected to a mathematical analysis. 3. Implementing the plan: This is the step where other managerial functions also come into the picture. The step is concerned with putting the plan into action. 4. Follow up action: To see whether plans are being implemented and activities are performed according to schedule is also part of the planning process. Monitoring the plans is equally important to ensure that objectives are achieved. 33. Decentralisation. 1 Importance of Decentralisation (Any five) 1. Develops initiative among subordinates: Decentralisation helps to 1×5 promote self-reliance and confidence amongst the subordinates. (1 mark 2. Develops managerial talent for the future: Formal training plays an for each important part in equipping subordinates with skills that help them rise statement) in the organisation but equally important is the experience gained by handling assignments independently. 3. Quick decision making: The management hierarchy can be looked upon as a chain of communication. In a decentralised organisation however, since decisions are taken at levels which are nearest to the points of action and there is no requirement for approval from many levels, the process is much faster. 4. Relief to top management: Decentralisation diminishes the amount of direct supervision exercised by a superior over the activities of a subordinate because they are given the freedom to act and decide, albeit within the limits set by the superior. E–12 n Business Studies– XII

5. Facilitates growth: Decentralisation awards greater autonomy to the lower levels of management as well as divisional or departmental heads. This allows them to function in a manner best suited to their department and fosters a sense of competition amongst the departments. 6. Better control: Decentralisation makes it possible to evaluate performance at each level and the departments can be individually held accountable for their results. 34. Following are the points of differences between advertising and personal (1 × 6) selling (Any Six) Advertising Personal Selling 1. Advertising is an impersonal form Personal selling is a personal form of of communication. communication. 2. Advertising involves transmission In personal selling, the sales talk is of standardised messages, i.e., the adjusted keeping view of customer's same message is sent to all the background and needs. customers in a market segment. 3. Advertising is inflexible as the Personal selling is highly flexible as message can’t be adjusted to the the message can be adjusted. needs of the buyer. 4. It reaches the masses, i.e., a Only a limited number of people can large number of people can be be contacted because of time and cost approached. considerations. 5. In advertising, the cost per person The cost per person is quite high in reached is very low. the case of personal selling. 6. Advertising can cover the market Personal selling efforts take a lot of in a short time. time to cover the entire market. 7. Advertising makes use of mass Personal selling makes use of sales media such as television, radio, staff, which has limited reach. newspapers and magazines. 8. Advertising lacks direct feedback. Personal selling provides direct and Marketing research efforts are immediate feedback. Salespersons needed to judge customers’ come to know about the customers’ reactions to advertising. reactions immediately. 9. Advertising is more useful in Personal selling plays an important creating and building interest role at the awareness stage of decision of the consumers in the firm’s making. products. 1 0. Advertising is more useful Personal selling is more helpful in in marketing to the ultimate selling products to the industrial consumers who are large in buyers or to intermediaries such numbers. as dealers and retailers who are relatively few in numbers. Sample Paper–1  n  E–13