Class 12

Introduction to Partnership and Partnership Final Accounts 12th BK Commerce Chapter 1 Solutions Maharashtra Board

Balbharti Maharashtra State Board 12th Commerce Book Keeping & Accountancy Solutions Chapter 1 Introduction to Partnership and Partnership Final Accounts Textbook Exercise Questions and Answers.

Class 12 Commerce BK Chapter 1 Exercise Solutions

I. Objective Questions:

A. Select the most appropriate alternatives from the following and rewrite the sentences:

Question 1.
When there is no partnership agreement between partners, the division of profits takes place in ____________ ratio.
(a) equal
(b) capital ratio
(c) initial contribution
(d) experience and tenure of partners
Answer:
(a) equal

Question 2.
To find out Net Profit or Net Loss of the business ____________ Account is prepared.
(a) Trading
(b) Capital
(c) Current
(d) Profit & Loss
Answer:
(d) Profit & Loss

Question 3.
A ____________ is an Intangible Asset.
(a) Goodwill
(b) Stock
(c) Cash
(d) Furniture
Answer:
(a) Goodwill

Question 4.
In the absence of an agreement, interest on a loan advanced by the partner to the firm is allowed at the rate of ____________
(a) 5%
(b) 6%
(c) 10%
(d) 9%
Answer:
(b) 6%

Question 5.
Liability of partners in a partnership business is ____________
(a) limited
(b) unlimited
(c) limited and unlimited
(d) none of the above
Answer:
(b) unlimited

Question 6.
The Indian Partnership Act is in force since ____________
(a) 1932
(b) 1881
(c) 1956
(d) 1984
Answer:
(a) 1932

Question 7.
Maximum number of Partners in a firm are ____________ according to Companies Act, 2013.
(a) 10
(b) 25
(c) 20
(d) 50
Answer:
(d) 50

B. Write the word/phrase/term, which can substitute each of the following statements.

Question 1.
Persons who form the partnership firm.
Answer:
Partners

Question 2.
Amount of cash or goods withdrawn by partners from the business from time to time.
Answer:
Drawings

Question 3.
An association of two or more persons according to Indian Partnership Act 1932.
Answer:
Partnership firm

Question 4.
Act under which partnership firms are regulated.
Answer:
Indian Partnership Act

Question 5.
Process of entering the name of the partnership firm in the register of the Registrar.
Answer:
Registration

Question 6.
Partnership agreement in written form.
Answer:
Partnership Deed

Question 7.
Under this method capital, balances of partners remain constant.
Answer:
Fixed Capital Method

Question 8.
Proportion in which partners share profit.
Answer:
Profit-Sharing Ratio

Question 9.
Such a capital method in which only Capital Account is maintained for each partner.
Answer:
Fluctuating Capital Method

Question 10.
The account to which all adjustments are made when capital is fixed.
Answer:
Current Account

Question 11.
Expenses that are paid before they are due.
Answer:
Prepaid expenses

Question 12.
The accounts are prepared at the end of each accounting year.
Answer:
Final Accounts

Question 13.
An asset that can be converted into cash easily.
Answer:
Current Assets or Liquid Assets

Question 14.
Order in which fixed assets are recorded first in the Balance Sheet.
Answer:
Order of liquidation

Question 15.
The account in which selling expenses of the business are recorded.
Answer:
Profit and Loss Account

Question 16.
Debit balance of Trading Account.
Answer:
Gross loss

Question 17.
The credit balance of Profit and Loss Account.
Answer:
Net profit

C. State whether the following statements are True or False with reasons:

Question 1.
A partnership firm is a Non-Trading concern.
Answer:
This statement is False.
The main aim of a partnership firm Is to earn maximum profit. The partnership is a trading concern. It undertakes either manufacturing or distributive activities with the sole aim of earning profit and distribute that profit among the partners in a specific ratio. It is never formed for charitable purposes.

Question 2.
A profit and Loss Account is a Real Account.
Answer:
This statement is False.
Account of expenses, losses, gains, and incomes is called a Nominal account. The profit and Loss Account contains all indirect expenses and indirect incomes of the firm. Therefore, a Profit and Loss Account is a Nominal Account and not a real account.

Question 3.
Carriage inward is carriage on purchase.
Answer:
This statement is True.
Total transport expenses incurred on bringing the goods from market to the place of business is called the carriage. When goods are purchased, the carriage is supposed to be borne by the firm. It is known as carriage inward. It means carriage paid on purchase.

Question 4.
Adjustments are recorded in Partners Current Account in Fixed Capital Method.
Answer:
This statement is True.
In Fixed Capital Method, as the name suggests capital balances (opening and closing) are generally remain fixed. Under this method, adjustments are not to be recorded in Capital Account. All adjustments are recorded in a separate account called Partners’ Current Accounts.

Question 5.
Prepaid expenses are treated as liabilities.
Answer:
This statement is False.
Prepaid expenses are expenses that are paid before they are due. Therefore, they are considered an asset of the business organization.

Question 6.
If the partnership deed is silent, partners share profits and losses in proportion to their capital.
Answer:
This statement is False.
As per the provisions made under the Indian Partnership Act 1932, when a partnership deed is silent about profit and loss sharing ratio, partners are supposed to share profits and losses in equal proportion, and not in their capital ratio.

Question 7.
Balance Sheet is an Account.
Answer:
This statement is False.
A financial statement showing all assets and liabilities is called a Balance sheet. It is not an account. It is a position statement that shows various assets owned by the firm and various liabilities owned by it. On the left-hand side, all liabilities are listed and on the right-hand side, all assets are recorded.

Question 8.
Wages paid for the installation of machinery is a Revenue expenditure.
Answer:
This statement is False.
Wages paid for the installation of machinery is a capital expenditure and therefore it is added to the cost of machinery. It is generally, paid once in a life of an asset. It is a long-term and capital expenditure.

Question 9.
Income received in advance is a liability.
Answer:
This statement is True.
When Income in respect to next year, it received in the current year, it is known as income received in advance. So, in next year firm will not be able to receive that amount and therefore it is considered as a liability for the current year.

Question 10.
R.D.D. is created on Creditors.
Answer:
This statement is Raise.
R.D.D. stands for Reserve for Doubtful Debts. It is created on the value of debtors. Such provision is made against profit and loss accounts. In the future, if the loss is incurred on account of bad debts, such an amount is used to run the business.

Question 11.
Depreciation is not calculated on Current Assets.
Answer:
This statement is True.
Current Assets mean liquid assets having no fixed tenure therefore depreciation cannot be calculated on it. Depreciation is calculated and charged on fixed assets for their use, wear and tear, etc.

Question 12.
Goodwill is an intangible asset.
Answer:
This statement is True.
Goodwill is a reputation of business computed in terms of money. Reputation can be experienced but can’t be seen or felt. Therefore, Goodwill is an intangible asset.

Question 13.
Indirect expenses are debited to Trading Account.
Answer:
This statement is Raise.
Indirect expenses mean expenses that are not directly related to the production of goods and services. Therefore, indirect expenses cannot be debited to Trading Account. All indirect expenses are debited to the Profit and Loss Account.

Question 14.
A bank loan is a current liability.
Answer:
This statement is Raise.
A loan usually taken for the period of more than 1 year say 5 years from the bank is called Bank Loan. It is a long term loan. It is not repaid within 1 year but paid in installments over a number of years. It might be paid in lumpsum at the expiry of the term.

Question 15.
Net profit is the debit balance of Profit and Loss Account.
Answer:
This statement is Raise.
In a Profit and Loss Account, when the credit side total i.e. a total of incomes is more than the debit side total, i.e. expenses it is known as a credit balance. When incomes exceed expenses there is profit. Therefore credit balance of the Profit and Loss Account indicates net profit.

D. Find an odd one.

Question 1.
Wages, Salary, Royalty, Import Duty
Answer:
Salary

Question 2.
Postage, Stationery, Advertising, Purchases
Answer:
Purchases

Question 3.
Capital, Bills Receivable, Reserve fund, Bank overdraft
Answer:
Bills Receivable

Question 4.
Building, Machinery, Furniture, Bills Payable
Answer:
Bill Payable

Question 5.
Discount received, Dividend received, Interest received, Depreciation
Answer:
Depreciation

E. Complete the sentences.

Question 1.
Partners share profits & losses in ____________ ratio in the absence of partnership deed.
Answer:
equal

Question 2.
Registration of partnership is ____________ in India.
Answer:
optional

Question 3.
Partnership business must be ____________
Answer:
lawful

Question 4.
Liabilities of partners in partnership firm is ____________
Answer:
unlimited

Question 5.
The balance of the Drawings Account of a partner is transferred to his ____________ account under the Fixed Capital Method.
Answer:
Current

Question 6.
The interest on capital of a partner is debited to ____________ account.
Answer:
Profit and Loss

Question 7.
Partners are ____________ liable for the debts of the firm.
Answer:
joint & several

Question 8.
Partnership Deed is an ____________ of Partnership.
Answer:
Article

Question 9.
The withdrawal by the partner for personal use from the firm is ____________ to his account.
Answer:
debited

Question 10.
Commission payable to partner is ____________ to the firm.
Answer:
liability/outstanding expense

Question 11.
When partners adopt Fixed Capital Method then they have to operate ____________ Account.
Answer:
Partner’s Current

Question 12.
If the partners Current Account shows ____________ balance it is shown to the Liability side of the Balance Sheet.
Answer:
credit

Question 13.
The expenses paid for trading purpose are known as ____________ expenses.
Answer:
trade

Question 14.
Cash receipts which are recurring in nature are called as ____________ Receipts.
Answer:
Revenue

Question 15.
Return outward are deducted from ____________
Answer:
purchase

Question 16.
Expenses which are paid before due date are called as ____________
Answer:
Prepaid Expenses

Question 17.
Assets which are held in the business for a long period are called ____________
Answer:
Fixed Assets

Question 18.
Trading Account is prepared on the basis of ____________ expenses.
Answer:
direct

Question 19.
When commission is allowed to any partner, it is ____________ of the business.
Answer:
expenditure

Question 20.
When goods are distributed as free samples, it is treated as ____________ of the business.
Answer:
advertisement expense

F. Answer in one sentence only:

Question 1.
What is Fluctuating Capital?
Answer:
When capital balances of the partners go on changing every year due to transactions of partners with the firm, it is known as Fluctuating Capital.

Question 2.
Why is Partnership Deed necessary?
Answer:
Partnership Deed is necessary to prevent disputes or misunderstandings among the partners in the future.

Question 3.
If the Partnership Deed is silent, in which ratio, the partners will share the profit or loss?
Answer:
If the Partnership Deed is silent, partners will share profits and losses in equal ratio.

Question 4.
What is the Fixed Capital Method?
Answer:
Fixed Capital Method is one in which capital balances of the partners remain the same at the end of every financial year unless any amount of additional capital is introduced or part of the capital is withdrawn by the partner from the business.

Question 5.
How many partners are required to form a partnership firm?
Answer:
Minimum two persons are required to form a partnership firm.

Question 6.
What is Partnership Deed?
Answer:
A partnership deed is a written agreement duly stamped and signed document containing the terms and conditions of the partnership.

Question 7.
What are the objectives of the Partnership Firm?
Answer:
To earn a maximum profit is the main objective of the partnership firm.

Question 8.
What rate of interest is allowed on a partner’s loan in the absence of an agreement?
Answer:
6 % is the rate of interest to be allowed on a partner’s loan in the absence of an agreement.

Question 9.
What is the minimum number of partners in a partnership firm according to the Indian Partnership Act 1932?
Answer:
Minimum two persons are required a number of partners in a partnership firm according to Indian Partnership Act 1932.

Question 10.
What is the liability of a partner?
Answer:
The liability of a partner (except minor partner) is unlimited.

Question 11.
In the absence of Partnership Deed, what is the rate of interest on a loan advanced by the partner to the firm is allowed?
Answer:
In the absence of Partnership Deed, 6% is the rate of interest on a loan advanced by the partner to the firm.

Question 12.
What do you mean by pre-received income?
Answer:
Income that is received by the partnership firm before it is due is called pre-received income.

Question 13.
What is the effect of the adjustment of provision for discount on debtors in the final accounts of partnership?
Answer:
The effects of the adjustment of provision for discount on debtors in the final accounts of partnership are as follows:
Debit Profit and Loss A/c and deduct the amount of provision for discount on debtors from the number of debtors.

Question 14.
When are the Partners Current Account is opened?
Answer:
When Fixed Capital Method is adopted by the firm, Partners’s Current Account is opened.

Question 15.
As per which principle of accounting, closing stock is valued at cost price or at market price whichever is less?
Answer:
As per the Conservatism principle of accounting, the closing stock is valued at cost price or at market price whichever is less.

Question 16.
What is the provision of the Indian Partnership Act with regard to Interest on Capital?
Answer:
As per the provision of the Indian Partnership Act, Interest in Capital is not to be allowed.

Question 17.
Why is the Balance Sheet prepared?
Answer:
The Balance Sheet is prepared to know the financial position of the business in the form of its assets and liabilities on a particular date.

Question 18.
Why wages paid for the installation of machinery are not shown in Trading Account?
Answer:
Wages paid for the installation of machinery is a capital expenditure and it is not to be recorded in Trading Account.

Question 19.
What do you mean by indirect incomes?
Answer:
All incomes other than direct incomes are called indirect incomes.
[e.g. Interest received on investments, Incomes like discount, commission, dividend, rent, etc. received].

Question 20.
Why partners capital is treated as a long-term liability of business?
Answer:
Partner’s Capital is not refunded during the existence of the partnership firm unless the partner is retired or expired.

G. Do you agree/disagree with the following statements:

Question 1.
When Partnership Deed is silent, partners share profits of the firm according to capital ratio.
Answer:
Disagree

Question 2.
The current Account always shows a debit balance.
Answer:
Disagree

Question 3.
It is compulsory to have a partnership agreement in writing.
Answer:
Disagree

Question 4.
Partnership Firm is a trading concern.
Answer:
Agree

Question 5.
Interest in the capital is an expenditure for the partnership firm.
Answer:
Agree

Question 6.
A partnership is an association of two or more persons.
Answer:
Agree

Question 7.
Partners are entitled to get a Salary or Commission.
Answer:
Disagree

Question 8.
The balance of the Capital Account remains constant under Fixed Capital Method.
Answer:
Agree

Question 9.
The Indian Partnership Act came into existence in the year 1945.
Answer:
Disagree

Question 10.
Profit and Loss Account reflects the true financial position.
Answer:
Disagree

Question 11.
The amount borrowed by a partner from his business will be debited to the Current Account.
Answer:
Agree

Question 12.
Sold but undispatched goods must be part of the valuation of closing stock.
Answer:
Disagree

Question 13.
Carriage inward is a selling and distribution overhead.
Answer:
Disagree

Question 14.
Gross profit is an operating profit.
Answer:
Disagree

Question 15.
All financial expenditures are debited to the Profit and Loss Account.
Answer:
Agree

Question 16.
Free distribution of goods is debited to Trading Account.
Answer:
Disagree

H. Calculate the following:

Question 1.
Undervaluation of closing stock by 10%, closing stock was ₹ 30,000. Find out the value of the closing stock.
Solution:
Undervaluation of closing stock by 10 %
Revised value = \(\frac{\text { Book value }}{100-\% \text { of undervaluation }} \times 100\)
= \(\frac{30,000}{100-10} \times 100\)
= ₹ 33,333.
∴ Value of closing stock = ₹ 33,333.

Question 2.
Calculate 12.5% P.A. depreciation on Furniture:
(a) on ₹ 220,000 for 1 year
(b) on ₹ 10,000 for 6 months
Solution:
Depreciation = Amount of asset × Period × %
(a) Depreciation on furniture = 220,000 × 1 × \(\frac{12.5}{100}\) = ₹ 27,500
∴ Deprecation on furniture for 1 year = ₹ 27,500

(b) Depreciation on furniture = 10,000 × \(\frac{6}{12} \times \frac{12.5}{100}\) = ₹ 625
∴ Depreciation on furniture for 6 months = ₹ 625

Question 3.
The insurance premium is paid for the year ending on 1st September 2019 amounted to ₹ 1500. Calculate prepaid insurance assuming that the year-end is 31st March 2019.
Solution:
From 31st March to 1st September, 5 months period prepaid insurance amount we have to find.
An insurance premium paid for the 12 months = ₹ 1500
∴ for 5 months period it is 1500 × \(\frac{5}{12}\) = ₹ 625
Thus, prepaid insurance premium amount = ₹ 625.

Question 4.
Find out Gross Profit/Gross Loss: Purchases ₹ 30,000, Sales ₹ 15,000, Carriage inward ₹ 2400, Opening stock ₹ 10,000, Purchase return ₹ 1000, Closing stock ₹ 36,000.
Solution:

Question 5.
A borrowed loan from Bank of Maharashtra ₹ 2,00,000 on 1st October 2019 @15 % p.a. Calculate interest on a bank loan for the year 2019 – 20 assuming that the financial year ends on 31st March, every year.
Solution:
From 1st October to 31st March, 6 months period interest on loan is to be calculated.
Interest (I) = \(\frac{\text { PRN }}{100}\)
∴ Interest on loan = 2,00,000 × \(\frac{15}{100} \times \frac{6}{12}\) = ₹ 15,000
∴ Interest on loan on ₹ 2,00,000 for 6 months = ₹ 15,000

Practical Problems

Question 1.
Amitbhai and Narendrabhai are in Partnership Sharing Profits and Losses equally. From the following Trial Balance and Adjustments given below, you are required to prepare the Trading and Profit and Loss Account for the year ended 31st March 2019 and Balance Sheet as of that date.

Trial Balance as of 31st March 2019

Adjustments:
1. Stock on hand on 31st March 2019 was valued at ₹ 43,000.
2. Uninsured goods worth ₹ 8,000 were stolen.
3. Create R.D.D. at 2 % on sundry debtors.
4. Mr. Patil, our customer becomes insolvent and could not pay his debts of ₹ 500.
5. Outstanding Expenses – Rent ₹ 800 and salaries ₹ 300.
6. Depreciate Factory Building by ₹ 2,500 and Furniture by ₹ 1,800.
Solution:
In the books of Amitbhai and Narendrabhai

Balance Sheet as of 31st March 2019


Notes:
1. Import duty, Motive power, and Depreciation on Factory building are recorded in the Trading A/c.

2. 10% govt, the bond is an investment. It was purchased on 1 – 10 – 2018.
∴ Interest is calculated for six months.
Interest on Govt. Bond = \(\frac{40,000}{1} \times \frac{6}{12} \times \frac{10}{100}\) = ₹ 2,000

3. Adv. exp. paid for 2 years from 01 – 01 – 2019. Upto 31 – 3 – 2019, 3 months adv. exp. is written off to Profit and Loss A/c. It is calculated as below:
= 10,000 × \(\frac{3}{24}\) = ₹ 1,250
∴ Prepaid adv. exp. = 10,000 – 1,250 = ₹ 8,750

Question 2.
From the following Trial Balance of M/s Mitesh and Mangesh, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March 2019 and Balance Sheet as of that date.

Trial Balance as of 31st March 2019

Adjustments:
1. Mitesh and Mangesh are sharing profit and losses in the ratio 3 : 1.
2. Partners are entitled to get commission @ 1% each on gross profit.
3. The closing stock is valued at ₹ 23,700.
4. Outstanding Expenses – Audit fees ₹ 400; Carriage ₹ 600.
5. Building is valued at ₹ 46,500.
6. Furniture is depreciated by 5%.
7. Provide interest on partner’s capital at 2.5% p.a.
8. Goods of ₹ 900 were taken by Mangesh for his personal use.
9. Write off ₹ 1,000 as Bad debts and maintain R.D.D. at 3 % on Sundry Debtors.
Solution:
In the books of M/s Mitesh and Mangesh



Balance Sheet as of 31st March 2019


Working Notes:
1. In this problem, Current Account balances are given. So, the total amount of fixed capital is directly shown in the Liabilities side of the Balance Sheet. Effects of adjustments related to commission to partners, interest on capital, goods are withdrawn by Mangesh are given in the Current Account. Closing balances of the Current Account are shown separately on the Liability side of the Balance Sheet.

2. Building is valued at ₹ 46,500 whereas the opening balance of Building given is ₹ 48,500. Therefore, a difference of the amount of ₹ 2,000 (48,500 – 46,500) is nothing but Depreciation charged on Building.

3. Return Inward ⇒ Sales Return
Return Outward ⇒ Purchase Return

4. Commission payable to partners:
Mitesh = 1% on Gross Profit = \(\frac{1}{100} \times \frac{99,000}{1}\) = ₹ 990/-
Mangesh = 1% on Gross Profit = \(\frac{1}{100}\) × 99,000 = ₹ 990/-

Question 3.
From the following Trial Balance and Adjustments given below of Reena and Aarti, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March 2019 and Balance Sheet as of that date.
Trial Balance as of 31st March 2019

Adjustments:
1. Closing stock valued at ₹ 22,000.
2. Write off ₹ 900 for bad & doubtful debts and create a provision for reserve for doubtful debts ₹ 1,000.
3. Create a provision for discount on debtors @ 3 % and on creditors @ 5%.
4. Outstanding Expenses – Wages ₹ 700 and Salaries ₹ 800.
5. Insurance is paid for 15 months, w.e.f. 1st April 2018.
6. Depreciate land and building @ 5%.
7. Reena & Aarti are sharing Profits & Losses in their Capital Ratio.
Solution:
In the books of Reena and Aarti

Balance Sheet as of 31st March 2019

Working Notes:
1. Insurance premium ₹ 1,500 is paid for 15 months, i.e. prepaid insurance premium for 3 months = ₹ 300.

2. Reserve for Discount on Debtors = 3% on (Debtors – New Bad debts – New Reserve)
= \(\frac{3}{100}\) × (40,000 – 900 – 1,000)
= \(\frac{3}{100}\) × (40,000 – 1,900)
= \(\frac{3}{100}\) × 38,100
= ₹ 1,143

3. Reserve for Discount on Creditors = 5% on (Value of Creditors)
= \(\frac{5}{100}\) × 25,700
= ₹ 1,285

4. Profit and Loss ratio = Capital ratio = 50,000 : 30,000 = 5 : 3

Question 4.
From the following Trial Balance of M/s Meera and Madhav. Prepare Trading and Profit and Loss Account for the year ended 31st March 2019 and Balance Sheet as on that date.
Trial Balance as of 31st March, 2019

Adjustments:
1. Closing stock is valued at ₹ 32,000.
2. Provide provision for doubtful debts ₹ 2,000.
3. Create a reserve for a discount on debtors @ 3%.
4. Value of leasehold premises on 31st March 2019 ₹ 1,00,000.
5. Outstanding Expenses: Printing & stationery ₹ 500.
Solution:
In the books of M/s Meera and Madhav

Balance Sheet as of 31st March 2019

Working Notes:
1. Advertisement expenses written off to Profit and Loss account during the year 2018-19 for six months i.e. from 1/10/18 to 31/03/19.
Advertisement expenses W/off = (Advertisement bill paid) × \(\frac{1}{3} \times \frac{6}{12}\)
= 4,800 × \(\frac{1}{3} \times \frac{6}{12}\)
= ₹ 800.
Prepaid advertisement = 4,800 – 800 = ₹ 4,000.

2. Reserve for Discount on Debtors = 3% (Balance in debtors)
= \(\frac{3}{100}\) × (80,500 – 2,000)
= \(\frac{3}{100}\) × 78,500
= ₹ 2,355.

3. Difference between the opening balance (₹ 1,10,000) and the closing balance (₹ 1,00,000) for leasehold premises is to be considered as written off on leasehold premises.

Question 5.
Sucheta & Gayatri are partners sharing Profit and Losses in the ratio 3 : 2. From the following Trial Balance and additional information, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March 2019 and Balance Sheet as of that date.
Trial Balance as of 31st March 2019

Adjustments:
1. Stock on 31st March 2019 was valued at ₹ 19,700.
2. Goods costing ₹ 3,000 distributed as a free sample.
3. Motive power includes ₹ 500 paid for deposit of Power Meter.
4. Depreciate building @ 5 %.
5. Write off ₹ 2000 for bad debts and maintain R.D.D. at 3% on debtors.
6. Bills receivable included dishonored of Bill of ₹ 4,000.
Solution:
In the books of Sucheta and Gayatri


Balance Sheet as of 31st March, 2019

Working Notes:
1. Rate of interest on the partner’s loan is not mentioned, therefore interest on the loan is calculated at 6% p.a.
∴ Interest on Sucheta’s Loan = 6,150 × 1 × \(\frac{6}{100}\) = ₹ 369
2. Add dishonored bill amount to debtors amount and then calculate B.D. and R.D.D.
3. Subtract dishonored bill amount from bills receivable amount.

Question 6.
Archana and Prerana are partners, sharing Profits and Losses in the ratio 2 : 1 with the help of the following Trial Balance and Adjustments given below. You are required to prepare a Trading and Profit and Loss Account for the year ended 31st March 2019 and a Balance Sheet as of that date.
Trial Balance as of 31st March, 2019

Adjustments:
1. Stock on 31st March 2019 is valued at Cost Price ₹ 12,000 and Market Price ₹ 17,000.
2. Our customer Mr. Shekhar failed to pay his dues of ₹ 800.
3. 1/8th of Patents are to be written off.
4. A part of Furniture ₹ 5,000 is purchased on 1st Oct. 2018.
5. Depreciation on Land & Building 10% and on Furniture 5%.
6. Outstanding Expenses Wages ₹ 300 and Electricity Charges ₹ 200.
7. Allow Interest on Capital 3%.
Solution:
In the books of Archana and Prema


Balance Sheet as of 31st March 2019

Working Notes:
1. Stationery stock is an asset.
2. Depreciation of furniture:

∴ Total Depreciation = 400 + 125 = ₹ 525
3. \(\frac{1}{8}\) patents to be written off = 2,000 × \(\frac{1}{8}\) = ₹ 250.
4. As no other expenses are given, Trade Expense is recorded in Profit and Loss Account.

Question 7.
Satish and Pramod are partners. Prepare Trading Account and Profit and Loss Account for the year 31st March 2019. You have to find out Gross Profit and Net Profit only.
Trial Balance as of 31st March 2019

Adjustments:
1. The Closing stock is valued at ₹ 15,400.
2. Outstanding wages ₹ 500.
3. Create provision for Bad debts ₹ 800 and maintain R.D.D. 3 % on Sundry Debtors.
4. Goods of ₹ 1,800 distributed as a free sample.
5. Goods of ₹ 2,000 were sold and delivered on 31st March 2019 but no entry is passed in the Books of Account.
Solution:
In the books of Satish and Pramod

Working Notes :
1. Here only gross profit and net profit is to find out. Therefore, the Balance Sheet is not prepared.

2. Interest on a 10% bank loan is calculated for 9 months (From 1/7/2018 to 31/3/2019)
I = \(\frac{\mathrm{PRN}}{100}\) = 8,000 × \(\frac{10}{100} \times \frac{9}{12}\) = ₹ 600

3. Goods distributed as free samples is an advertisement expense for business.

4. Sundry Debtors = 40,000
Add: Unrecorded Sales = 2,000
Less: Provision for Bad Debts = 800
Total = 41,200
Less: R.D.D. (New) (3% of 41,200 = 1,236) = 39,964

Question 8.
Nana and Nani are partners in a Partnership Firm sharing Profits and Losses equally. You are required to give effects of Adjustments in Profit & Loss A/c and Balance Sheet with the help of the following information.
Trial Balance as of 31st March 2019

Adjustments:
1. Gross profit amounted to ₹ 34,500.
2. Insurance paid for 15 months w.e.f. 1-4-2018.
3. Depreciate Land and Building at 10 % p.a. and Furniture at 5% p.a.
4. Write off ₹ 1,000 for Bad debts and maintain R.D.D. at 5 % on Sundry debtors.
5. Closing stock is valued at ₹ 34,500.
Solution:
In the books of Nana and Nani

Balance Sheet as of 31st March 2019

Working Notes:
1. Here, the Profit and Loss Account and Balance Sheet are to be prepared. Therefore, Trading Account is not prepared. Gross profit (given) is recorded on the Credit side of the Profit and Loss Account.

2. Land and Building

Total Depreciation = ₹ 4,500

3. Interest on 10% bank loan is calculated for 6 months. (From 1/10/2018 to 31/3/2019)
I = \(\frac{\text { PRN }}{100}\)
= 30,000 × \(\frac{10}{100} \times \frac{6}{12}\)
= ₹ 1,500

4. Prepaid insurance = \(\frac{3}{15}\) × (Insurance Amount)
= \(\frac{3}{15}\) × 15,000
= ₹ 3,000

5. RDD = 5% on (Debtors – New Bad debts)
= \(\frac{5}{100}\) × (26,000 – 1,000)
= \(\frac{5}{100}\) × 25,000
= ₹ 1,250

Question 9.
Sun and Moon are partners in a Partnership Firm sharing Profits and Losses equally. You are required to give effects of Adjustments with the help of the following information:
Trial Balance as of 31st March 2019

Adjustments:
1. Partners are entitled to get a salary of ₹ 6,000 p.a. in addition to their profit & loss sharing.
2. Depreciation on Land & Building, Furniture and Machinery @ 10%, 5% and 3% respectively.
3. Interest in Capital 5% p.a.
4. Closing stock ₹ 60,743.
5. Wages included ₹ 1,000 as advance is given to workers.
6. Interest due but not paid ₹ 800.
7. Total net profit amounted to ₹ 38,113.
You are required to prepare the Balance Sheet and Partners Current A/c only.
Solution:
In the books of Sun and Moon

Balance Sheet as of 31st March 2019


Working Notes:
1. Depreciation on machinery is calculated for 9 months. (i.e. from 1/7/18 to 31/3/19)
Depreciation = 40,000 × \(\frac{3}{100} \times \frac{9}{12}\) = ₹ 900

2. Interest on 8% debentures, calculated for 6 months. (i.e. from 1/10/18 to 31/3/19)
I = \(\frac{\text { PRN }}{100}\)
= 8,000 × \(\frac{8}{100} \times \frac{6}{12}\)
= ₹ 320

3. Advance given to workers (by firm) ₹ 1,000 is an asset for the firm, so, it is shown on the Assets side.

4. Interest due but not paid is a liability for the firm, so, it is shown on the Liabilities side.

Question 10.
Kshipra and Manisha are partners sharing Profit and Losses in their Capital ratio. You are required to prepare Trading Account and Profit and Loss Account for the year ended 31st March 2019 and a Balance Sheet as of that date.
Trial Balance as of 31st March 2019

Adjustments:
1. Stock on 31st March 2019 was at ₹ 37,000.
2. Sales include the sale of machinery of ₹ 2,000, which is sold on 1st April 2018.
3. Depreciation on fixed assets @ 5%
4. Each partner is entitled to get a commission at 1% of Gross profit and interest on Capital 5% p.a.
5. Outstanding Expenses wages ₹ 200 & Salaries ₹ 500.
6. Create provision for Doubtful debts @ 3% on Sundry debtors.
Solution:
In the books of Kshipra and Manisha


Balance Sheet as of 31st March 2019

Working Notes:
1. Depreciation on fixed assets means depreciation on Furniture, Plant & Machinery, and Building.

2. Sales includes the sale of Machinery of ₹ 2,000 is subtracted from sales and from Plant & Machinery.
On balance amount of Plant & Machinery ₹ 58,000, calculate 5 % depreciation i.e. 60,000 – 2,000 = ₹ 58,000 × 5% = ₹ 2,900

3. Here on gross profit calculate 1% commission for partners and record it to Profit and Loss A/c and in Current A/cs. Commission payable to each partner = \(\frac{1}{100}\) × Gross profit
= \(\frac{1}{100}\) × 81,700
= ₹ 817.

Class 12 Commerce BK Textbook Solutions Digest

• 12th Bk Chapter 1 Practical Problems
• 12th Bk Chapter 2 Practical Problems
• 12th Bk Chapter 3 Practical Problems
• 12th Bk Chapter 4 Practical Problems
• 12th Bk Chapter 5 Practical Problems
• 12th Bk Chapter 6 Practical Problems
• 12th Bk Chapter 7 Practical Problems
• 12th Bk Chapter 8 Practical Problems
• 12th Bk Chapter 9 Practical Problems
• 12th Bk Chapter 10 Practical Problems

Bills of Exchange 12th BK Commerce Chapter 7 Solutions Maharashtra Board

Balbharti Maharashtra State Board 12th Commerce Book Keeping & Accountancy Solutions Chapter 7 Bills of Exchange Textbook Exercise Questions and Answers.

Class 12 Commerce BK Chapter 7 Exercise Solutions

Objective Questions

A. Select the correct option and rewrite the sentence:

Question 1.
The person on whom a bill is drawn is called a ______________
(a) Drawee
(b) Payee
(c) Drawer
(d) Acceptor
Answer:
(a) Drawee

Question 2.
Before acceptance the bill is called a ______________
(a) Order
(b) Request
(c) Draft
(d) Instrument
Answer:
(c) Draft

Question 3.
When the due date of the bill drawn falls due on a public holiday, the payment must be made on the ______________ day.
(a) same
(b) preceding
(c) next
(d) any
Answer:
(b) preceding

Question 4.
The due date of the bill drawn for 2 months on 23rd Nov. 2019 will be ______________
(a) 23rd Jan. 2020
(b) 25th Jan. 2019
(c) 26th Jan. 2019
(d) 25th Jan. 2020
Answer:
(d) 25th Jan. 2020

Question 5.
Noting charges are borne by ______________
(a) Notary Public
(b) Drawee
(c) Drawer
(d) Endorsee
Answer:
(b) Drawee

Question 6.
There are ______________ parties to bill of exchange.
(a) five
(b) four
(c) three
(d) two
Answer:
(c) three

Question 7.
When a bill is drawn for 2 months after date on 3rd Jan. 2020, its due date will be ______________
(a) 3rd Jan. 2020
(b) 3rd Mar. 2020
(c) 5th Mar. 2020
(d) 6th Mar. 2020
Answer:
(d) 6th Mar. 2020

Question 8.
Notary Public is ______________
(a) Govt. Officer
(b) Drawer
(c) Payee
(d) Endorsee
Answer:
(a) Govt. Officer

Question 9.
When Acceptor or Drawee does not pay the amount of bill to the holder on the due date it is known as ______________ the bill.
(a) returning
(b) discounting
(c) honouring
(d) dishonouring
Answer:
(d) dishonouring

Question 10.
The person who accepts the bill treats the bill as ______________
(a) Bills Payable
(b) Promissory Note
(c) Draft
(d) Bills Receivable
Answer:
(a) Bills Payable

B. Write the word/phrase/term, which can substitute each of the following statements:

Question 1.
Three extra days are allowed over and above the term of the bill.
Answer:
Grace days

Question 2.
Fees charged by Notary Public for getting the fact of dishonour noted.
Answer:
Noting Charges

Question 3.
A person who is entitled to receive the amount of bill of exchange.
Answer:
Payee

Question 4.
A person in whose favour a bill endorsed.
Answer:
Endorsee

Question 5.
Officer appointed by the government for noting of dishonour of bill.
Answer:
Notary Public

Question 6.
Cancellation of the bill on maturity in return for a new bill for an extended period of credit.
Answer:
Renewal of Bill

Question 7.
Bill of exchange drawn and accepted without any valuable consideration.
Answer:
Accommodation bill

Question 8.
A person who is in possession of the Bill of Exchange.
Answer:
Holder

Question 9.
Conversion of Bill of Exchange into its present value.
Answer:
Discounting of the bill

Question 10.
The amount is not recoverable from Drawee on account of insolvency.
Answer:
Bad debts

C. State whether the following statements are True or False with reasons:

Question 1.
An Inland bill is one that is drawn in one country and payable in another country.
Answer:
This statement is False.
Inland bill means, a bill drawn, accepted, and made payable within the territory of one and same, country. So, a bill is drawn in one country and payable in another country can’t be an inland bill.

Question 2.
Retirement of the bill means payment of the bill before the due date.
Answer:
This statement is True.
Payment of the bill, by the acceptor of the bill to the holder of the bill before the due date, is known as Retirement of the bill. So retirement of the bill means payment of the bill before the due date.

Question 3.
Drawee can transfer the ownership of the bill.
Answer:
This statement is False.
Drawee is a debtor. He has to pay the amount of the bill to its holder on the due date. Hence he cannot transfer its ownership to other people. The drawer can transfer the ownership of the bill as he is the owner of the bill.

Question 4.
Acceptance of the bill without making any changes in the terms of the bill is called qualified acceptance.
Answer:
This statement is False.
Acceptance of the bill with some changes as regards the terms, amount, place, etc. of a bill is known as qualified acceptance. Acceptance of the bill without making changes as regards the term is called general acceptance.

Question 5.
Discounting is a device to convert the bill into its present value.
Answer:
This statement is True.
When the drawer or holder of the bill approaches the bank to discount the bill, the bank pays the bill amount after deducting a certain amount (which is known as discounting charges). It means conversion of the bill into its present value in cash. So, we can say that discounting is a device to convert the bill into its present value.

Question 6.
A bill of exchange must be presented to the acceptor on the due date.
Answer:
This statement is True.
To get the payment of the bill from the acceptor, the holder of the bill is required to present it to the acceptor on its due date. Acceptor either honours the bill or dishonours the bill.

Question 7.
If a bill is discounted by the holder, no entry is passed in his book when the bill is honoured on the due date.
Answer:
This statement is True.
On discounting the bill the holder gives the possession of the bill to the bank. On the maturity date, the bank has to present the bill to the drawee to collect the payment. When the discounted bill is honoured, the transaction takes place between drawee and bank.

Question 8.
Noting charges are to be borne by the drawer.
Answer:
This statement is False.
Noting charges are to be borne by the drawee only as due to his act of non-payment, the bill is dishonoured and the drawer is not able to get money on its due date.

Question 9.
If a bill is drawn payable ‘on demand’ no grace days are allowed.
Answer:
This statement is True.
‘On demand’ means the amount of the bill is to be paid by drawee immediately on presentation of the bill as no time period is mentioned on it. In demand bill, 3 days grace is not allowed by law.

Question 10.
There are three parties to a promissory note.
Answer:
This statement is False.
There are only two parties to a promissory note, i.e. Drawer or maker of the note and drawee or payee of the note.

D. Find the odd one:

Question 1.
(a) Retaining
(b) Noting
(c) Discounting
(d) Endorsing
Answer:
(b) Noting

Question 2.
(a) Trade bill
(b) Accommodation bill
(c) After date bill
(d) Demand bill
Answer:
(d) Demand bill

Question 3.
(a) Notary public
(b) Drawer
(c) Drawee
(d) Payee
Answer:
(a) Notary public

Question 4.
(a) Discounting charges
(b) Rebate
(c) Bank charges
(d) Noting charges
Answer:
(d) Noting charges

Question 5.
(a) Stamp
(b) Acceptance
(c) Draft
(d) Amount
Answer:
(c) Draft

E. Complete the sentences:

Question 1.
Making payment of bill before the due date of maturity is known as ______________
Answer:
Retirement of Bill

Question 2.
A person whose liabilities are more than his assets and is not in a position to pay off his liabilities is ______________
Answer:
Insolvent person

Question 3.
Amount that cannot be paid by acceptor on account of insolvency is known as ______________
Answer:
Deficiency

Question 4.
A bill of exchange payable after certain period is known as ______________
Answer:
After date bill

Question 5.
A bill which is drawn and accepted with valuable consideration is known as ______________
Answer:
Trade Bill

Question 6.
A person who draws the bill of exchange is known as ______________
Answer:
Drawer

Question 7.
A bill whose due date is calculated from the date of acceptance is known as ______________
Answer:
After sight bill

Question 8.
Recording the fact of dishonour of bill is known as ______________
Answer:
Noting

Question 9.
When drawee accepts the bill payable at a particular place only, it is known as ______________
Answer:
qualified acceptance as to place

Question 10.
Fees charged by the bank for collection of bill on behalf of holder is ______________
Answer:
bank charges

F. Answer in a sentence:

Question 1.
What do you mean by Bill of Exchange?
Answer:
A Bill of Exchange is a written order signed by the drawer, directing a certain person to pay a certain sum of money on-demand or on a certain future date to a certain person or as per his order.

Question 2.
What are Days of Grace?
Answer:
The three extra days allowed to the drawee or the acceptor of a bill for making payment on it are called Days of Grace.

Question 3.
What do you mean by Discounting a Bill of Exchange?
Answer:
Encashment of a bill of exchange with the bank for certain cash which is less than the face value of the bill, before its due date by its drawer or holder is called Discounting of a Bill of Exchange.

Question 4.
What is Noting of the Bill?
Answer:
Noting of a Bill of Exchange is the recording of the facts of its dishonour by a Notary public.

Question 5.
What are Noting Charges?
Answer:
Noting Charges are the fees charged by the Notary public for noting the facts of dishonour on the face of the bill and in his official register.

Question 6.
What is the relationship between drawer and drawee?
Answer:
The relationship between the drawer and the drawee is that of the creditor and debtor.

Question 7.
Who is the Payee of the Bill?
Answer:
The Payee of a Bill is the person to whom the bill is made payable or in whose favour the bill is drawn.

Question 8.
What do you mean by Rebate?
Answer:
Any concession or discount in monetary terms given by the holder of the bill of exchange to the drawee or acceptor, when a bill is retired is called a Rebate.

Question 9.
What is the Legal Due Date?
Answer:
The date which is arrived at after adding three days of grace to the nominal due date is known as Legal Due Date.

Question 10.
What are Bills Payable on Demand?
Answer:
When the amount of bill is payable by a drawee on the presentation of a bill, in which time period is not mentioned and grace days are not allowed is known as Bills Payable on Demand.

G. Do you agree or disagree with the following statements:

Question 1.
A bill of exchange is a conditional order.
Answer:
Disagree

Question 2.
The party which is ordered to pay the amount is known as the payee.
Answer:
Disagree

Question 3.
The person in whose favour the bill is endorsed is known as the endorsee.
Answer:
Agree

Question 4.
Rebate or discount given on retiring a bill is an income to the Drawee.
Answer:
Agree

Question 5.
A bill from the point of view of the debtor is called Bills payable.
Answer:
Agree

Question 6.
In case of bill drawn payable ‘on demand,’ no grace days are allowed.
Answer:
Agree

Question 7.
A bill is required to be accepted by Drawer.
Answer:
Disagree

Question 8.
A bill of exchange need not be dated.
Answer:
Disagree

Question 9.
A bill before acceptance is called Promissory Note.
Answer:
Disagree

Question 10.
Renewal is requested by the drawee to extend the credit period of the bill.
Answer:
Agree

H. Calculations:

Question 1.
Ganesh draws a bill for ₹ 40,260 on 15th Jan. 2020 for 50 days. He discounted the bill with the Bank of India @ 15 % p.a. on the same day. Calculate the amount of discount.
Solution:
Discount = Amount of Bill × \(\frac{\text { Rate }}{100} \times \frac{\text { Unexpired days }}{366}\)
= 40,260 × \(\frac{15}{100} \times \frac{50}{366}\)
= ₹ 825
(Note: 2020 is a Leap year, so the total number of days = 366)

Question 2.
Shefali Traders drew a bill on Maya for ₹ 30,000 on 1st Oct. 2019 payable after 3 months.
Calculate the amount of discount in the following cases:
(i) Shefali Traders discounted the bill on the same day @ 12 % p.a.
(ii) Shefali Traders discounted the bill on 1st Nov. 2019 @ 12 % p.a.
(iii) Shefali Traders discounted the bill on 1st Dec. 2019 @ 12 % p.a.
Solution:
Discount = Amount of Bill × \(\frac{\text { Rate }}{100} \times \frac{\text { Unexpired days }}{365}\)
(i) Discount = 30,000 × \(\frac{12}{100} \times \frac{3}{12}\) = ₹ 900
(ii) Discount = 30,000 × \(\frac{12}{100} \times \frac{2}{12}\) = ₹ 600
(iii) Discount = 30,000 × \(\frac{12}{100} \times \frac{1}{12}\) = ₹ 300

Question 3.
Veena who had accepted Sudha’s bill for ₹ 28,000 was declared bankrupt and only 35 paise in a rupee could be recovered from her estate. Calculate the amount of bad debts.
Solution:
From Veena, only 35 paise in a rupee could be recovered i.e. 65 paise in a rupee is bad debt for Sudha. So 65% of ₹ 28,000 = ₹ 18,200 is the amount of bad debts.

Question 4.
Nitin renewed his acceptance for ₹ 72,000 by paying ₹ 22,000 in cash and accepting a new bill for the balance plus interest @ 18%. p.a. for 4 months. Calculate the amount of the new bill.
Selution:
For Nitin,
Total outstanding = ₹ 72,000
Nitin paid in cash= ₹ 22,000
Remaining dues = ₹ 50,000
Now, on this ₹ 50,000 we have to calculate interest @ 18% for 4 months
I = \(\frac{\mathrm{PRN}}{100}\)
= 50,000 × \(\frac{18}{100} \times \frac{4}{12}\)
= ₹ 3,000
So, amount of new bill = Remaining dues + Interest
= 50,000 + 3,000
= ₹ 53,000

Question 5.
Nisha’s acceptance for ₹ 16,850 sent to the bank for the collection was honoured and bank charges debited were ₹ 125. Find out the amount actually received by Drawer.
Solution:
Bill of ₹ 16,850 sent to the bank for collection and it is honoured and bank charges = ₹ 125
So, actual amount received by drawer = 16,850 – 125 = ₹ 16,725.

Question 6.
A bill of ₹ 16,000 was drawn by Keshav on Gopal on 12th June 2019 for 2 months, what will be the due date, if all of sudden, the legal due date is declared as an emergency holiday?
Solution:
Consider immediate or next working day as the due date in case the legal due date is declared as an emergency holiday.

∴ The legal due date is 16th August 2019 (The next day).

I. Prepare the following specimens:

Question 1.
Prepare a bill of exchange from the following information:
Drawer: Shankar, Vadodara, Gujarat
Drawee: Vinayak, Somwar Peth, Pune
Amount: ₹ 16,000
Period: 3 months
Date of Bill: 6th Sept. 2019
Date of acceptance: 11th Sept. 2019
Solution:

Question 2.
Prepare a bill of exchange from the following information:
Drawer: Dinesh, P. R. Road, Andheri (West)
Drawee: Mahesh, L. B. S. Road, Mulund
Payee: Amit, Thane (West)
Amount: ₹ 9,500
Period of Bill: 4 months after sight
Date of Bill: 26th Nov. 2019
Date of acceptance: 29th Nov. 2019
Solution:

Question 3.
Kantilal, 343/D, Palm Heights, Jogeshwari, drew a bill on 10th Oct. 2019 for ₹ 63,490 for 45 days after the date on Shantilal, B2, Himalaya Towers, Baramati, payable to Priyanka, Satara. The bill was accepted on 13th Oct. 2019 for 60 days.
Prepare a format of bill of exchange from the above details.
Solution:

Question 4.
Prepare a format of bill exchange from the following:
Rahul Sane, 86-D, Raviwar Peth, Nagpur accepted the bill drawn on him by Prithviraj, Icon Heights, Wardha for ₹ 87,000 on 30th July 2019.
The bill was drawn on 26th July 2019 for ₹ 1,00,000 for 90 days after the date.
Solution:

Question 5.
Prepare a format of bill of exchange from the following.
Drawer: Kashmira Shah, Partner M/S Shah, and Shah, 2 – C, Matruchhaya Building, Akola
Drawee: Dhanashree Traders, Bangalore Road, Belgaum (Signed by Jayshree, Partner)
Payee: M/S Janki Traders, Akola
Amount: ₹ 64,500
Period of Bill: 3 months
Date of drawing: 12th Sept. 2019
Date of acceptance: 15th Sept. 2019
Solution:

Question 6.
Prepare a format Bill of Exchange with imaginary Drawer, Drawee, Address, Amount, Dates.
Drawer: Dhanesh Shah, 24/c, Amir Mahal, Borivali, Mumbai
Drawee: Kalpana Shah, 33, Sharadashram, Dadar (West), Mumbai
Amount: ₹ 80,500
Period: 60 days
Date of the bill: 2nd December 2020
Accepted on: 5th December 2020
Solution:

J. Complete the following Table.

Question 1.

Answer:

Question 2.

Answer:

S.No.	Date of Drawing	Date of Acceptance	Tenure	Type	Nominal due Date	Legal due Date
(i)	3rd January, 2020	5th January, 2020	45 days	after date	17th Feb. 2020	20th Feb. 2020
(ii)	9th April, 2019	12th April, 2019	4 months	after sight	12th Aug. 2019	14th Aug. 2019
(iii)	23rd November, 2019	23rd November, 2019	2 months	after date	23rd Jan. 2020	25th Jan. 2020
(iv)	16th August, 2019	20th August, 2019	4 months	after sight	20th Dec. 2019	23rd Dec. 2019
(v)	23rd December, 2018	24th December, 2018	60 days	after date	21st Feb. 2019	24th Feb. 2019

Practical Problems

Question 1.
On 1st Jan., 2020 Hemant sold goods of ₹ 18,500 to Nitin. On the same date Hemant drew a bill of exchange for ₹ 18,500 at 2 months. On the due date the bill was duly honoured.
Give Journal Entries in the books of Hemant and Nitin. Prepare Hamant’s Account in the books of Nitin.
Solution:
In the books of Hemant
Journal Entries

In the books of Nitin
Journal Entries

Question 2.
Neha sold goods to Rohan ₹ 42,000 on 6th Sept. 2019. Neha drew a bill of exchange at 3 months for the amount which was accepted by Rohan. Neha discounted the bill with her bankers at ₹ 41,000. On the due date of the bill Rohan dishonoured the bill and bank paid ₹ 300 as Noting Charges.
Show Journal Entries in the books of Neha and Rohan.
Solution:
In the books of Neha
Journal Entries

In the books of Rohan
Journal Entries

Question 3.
Jyoti owes ₹ 31,000 to Swati for which she draws a bill on Jyoti for 2 months. The bill was duly accepted by Jyoti. Swati sends the bill to bank for collection. Jyoti honoured the bill on the due date and bank charges ₹ 475 as bank charges.
Give Journal Entries in the books of Swati.
Solution:
In the books of Swati
Journal Entries

Question 4.
Pankaj purchased goods of ₹ 20,000 from Omprakash on credit on 15th April, 2019. Omprakash draws After Sight bill for the amount due on Pankaj for 3 months which was accepted by Pankaj on 18th April, 2019. On 20th April, 2019 Omprakash endorsed the bill to his creditor Jagdish in full settlement of his amount ₹ 21,000. On the due date the bill was dishonoured by Pankaj.
Give Journal Entries in the books of Omprakash, Pankaj and Jagdish.
Solution:
In the books of Omprakash
Journal Entries

In the books of Pankaj
Journal Entries

In the books of Jagdish
Journal Entries

Question 5.
Siddhant sold goods to Sudhir of ₹ 43,800 on 18th March, 2019. Siddhant draws a bill on Sudhir on the same day for ₹ 43,800 for 3 months which was duly accepted by Sudhir. Siddhant discounted the bill on the same day at 8% p.a. The bill was dishonoured on the due date and Sudhir requested Siddhant to accept ₹ 13,800 and interest in cash on remaining amount at 12% p. a. Siddhant agreed and for the balance amount accepted a new bill at 2 months. Before the due date of new bill Sudhir retired the bill by paying ₹ 29,700.
Pass necessary Journal Entries in the books of Siddhant.
Solution:
In the books of Siddhant
Journal Entries

Working Notes:
1. March 18, Discount = 43,800 × \(\frac{3}{12} \times \frac{8}{100}\) = ₹ 876

2. March 21, calculation of interest balance amount:
I = \(\frac{\mathrm{PRN}}{100}\)
= 30,000 × \(\frac{12}{100} \times \frac{2}{12}\) (for 2 months on remaining amount ₹ 30,000)
= ₹ 600

3. Before due date bill was retired by Sudhir by paying ₹ 300 less which is considered as discount and as date is not given, here it is not recorded.

Question 6.
Sangeeta accepted a bill for ₹ 18,000 drawn by Geeta at 3 months. Geeta discounted the bill for ₹ 17,400. Before the due date Sangeeta approached Geeta for renewal of the bill. Geeta agreed on the condition that Sangeeta should pay ₹ 6,000 immediately and for the balance she should accept a new bill for 4 months along with interest ₹ 550. The arrangements were carried through. But on the due date of new bill Sangeeta became insolvent and 35 paise in a rupee could be recovered from her estate.
Give Journal Entries in the books of Sangeeta and prepare Sangeeta’s Account in the books of Geeta.
Solution:
In the books of Sangeeta
Journal Entries

Working Notes:
1. It is advisable to write journal entries in the books of Geeta also to get entries in ‘Sangeeta’s Account’ property.
In the books of Geeta
Journal Entries

Question 7.
Priyanka owed Meena ₹ 18,000, Priyanka accepted a bill drawn by Meena for the amount at 4 months. Meena endorsed the same bill to Sagar. Before due date Priyanka approached Meena for renewal of bill. Meena agreed on condition that ₹ 6,000 be paid immediately together with interest on the remaining amount of 8% p.a. for 3 months and Priyanka should accept a new bill for the balance amount. These arrangements were carried through. However, before the due date Priyanka became insolvent and only 50% of the amount could be recovered from her estate.
Give Journal Entries in the books of Meena.
Solution:
In the books of Meena
Journal Entries

Working Note:
Calculation of interest on remaining amount ₹ 12,000 @ 8 % p.a. and for 3 months
I = \(\frac{\mathrm{PRN}}{100}\)
= 12,000 × \(\frac{8}{100} \times \frac{3}{12}\)
= ₹ 240

Question 8.
Seema purchased goods from Roma on credit on 1st August, 2019 for ₹ 37,000. Seema accepts bill for 2 months drawn by Roma for the same amount. On the same day, Roma discounts the bill with the bank for ₹ 36,200 on 3rd August, 2019. On the due date the bill is dishonoured and Noting Charges of ₹ 160 is paid by the bank. Seema pays ₹ 19,000 and Noting Charges in cash immediately. A new bill is drawn by Roma for the balance including interest ₹ 650 for 2 months, which is accepted by Seema. The new bill is retired one month before the due date at a rebate of ₹ 300.
Give Journal Entries in the books of Seema and prepare Seema’s Account in the books of Roma.
Solution:
In the books of Seema
Journal Entries

Question 9.
Uday purchased goods from Shankar on credit for ₹ 35,000 at 10 % trade discount. Uday paid ₹ 1,500 immediately and for the balance accepted a bill for 3 months. Before due date Uday approached Shankar with a request to renew the bill. Shankar agreed but with condition that Uday should accept a new bill for 3 months including interest at 12% p.a.
Give Journal Entries in the books of Shankar.
Solution:
In the books of Shankar
Journal Entries

Working Note:
I = \(\frac{\text { PRN }}{100}\)
= 30,000 × \(\frac{3}{12} \times \frac{12}{100}\)
= ₹ 900

Question 10.
Sagar drawn an after sight bill on 21st Nov., 2019 for ₹ 21,000 at 3 months on Prasad. The bill is discounted by Sagar at 8% p.a. with his bank. On maturity. Prasad finds himself unable to make payment of the bill and requests Sagar to renew it. Sagar accepts the request and draws a new bill at one month for ₹ 21,750 including interest which was duly accepted by Prasad. Sagar deposits the bill into bank for the collection. Prasad honours the bill on the due date and bank charges ₹ 250 as bank charges.
Pass necessary Journal Entries in the books of Sagar and prepare Sagar’s Account in the books of Prasad.
Solution:
In the books of Sagar
Journal Entries

Question 11.
Journalise the following transaction in the books of Abhishek:
(a) Siddhant informs Abhishek that Vineet’s acceptance for ₹ 23,000 endorsed to Siddhant has been dishonoured. Noting Charges amounted to ₹ 430.
(b) Kajal renews her acceptance to Abhishek for ₹ 39,000 by paying ₹ 3,000 in cash and accepting a fresh bill for the balance along with interest at 11.5% p.a. for 3 months.
(c) Radhika retired her acceptance to Abhishek for ₹ 23,000 by paying ₹ 22,250 by cheque.
(d) Abhishek sent a bill of Subodh for ₹ 9,000 to bank for collection. Bank informed that the bill has been dishonoured by Subodh.
Solution:
In the books of Abhishek
Journal Entries

Working Note:
Amount of interest = 36,000 × \(\frac{3}{12} \times \frac{11.5}{100}\) = ₹ 1,035.

Question 12.
Journalise the following transaction in the books of Narendra:
(a) Narendra retires his acceptance to Upendra by paying ₹ 4,000 in cash and endorsing a bill accepted by Ramlal for ₹ 5,000.
(b) Vikram’s acceptance to Narendra ₹ 6,000 retired one month before the due date at rebate of 12% p.a.
(c) Dilip renews his acceptance to Narendra for ₹ 12,000 by paying ₹ 4,000 in cash and accepting a fresh bill for the balance plus interest at 12% p.a. for 3 months.
(d) Bank informed Narendra that, Kartik’s acceptance for ₹ 13,000 to Narendra, discounted with the bank was dishonoured and Noting Charges paid by bank ₹ 140.
Solution:
In the books of Narendra
Journal Entries

Question 13.
Journalise the following transaction in the books of Bharti:
(a) Bank informed that Amit’s acceptance for ₹ 15,750 sent to bank for collection was honoured and bank charges debited were ₹ 150.
(b) Nitin renewed his acceptance for ₹ 22,200 by paying ₹ 2,200 in cash along with interest on balance amount at 10% and accepted a fresh bill for the balance for 3 months.
(c) Dhanshri who had accepted Bharti’s bill for ₹ 17,500 was declared insolvent and only 40% of the amount due could be recovered from her estate.
(d) Discharged our acceptance to Savita for ₹ 9,450 by endorsing Pravin’s acceptance to us ₹ 9,000.
Solution:
In the books of Bharti
Journal Entries

Question 14.
Journalise the following transaction in the books of Sudha:
(a) Endorsed Sonali’s acceptance at 2 months for ₹ 6,000 in favour of Urmila and paid cash ₹ 3,500 in full settlement of her account ₹ 10,000.
(b) Discounted 2 months acceptance of Surya for ₹ 7,800 with bank at 10% p.a.
(c) Bank informed that Anuradha’s acceptance of ₹ 4,800 which was discounted was dishonoured and bank paid Noting Charges ₹ 125.
(d) Pooja honoured her acceptance of ₹ 16,400 which was deposited into bank for collection.
Solution:
In the books of Sudha
Journal Entries

Question 15.
Journalise the following transaction in the books of Mrunal:
(a) Bank informed that Aishwarya’s acceptance of ₹ 24,000 which was discounted had been dishonoured and bank paid Noting Charges ₹ 220. Bill was renewed at the request of Aishwarya for 2 months with interest of ₹ 480.
(b) Received ₹ 4,630 from private estate of Ankur who was declared insolvent against bill accepted by him for ₹ 6,000.
(c) Accepted a bill of ₹ 15,000 at 3 months drawn by Anushka for the amount due to her ₹ 20,000 and balance paid by cheque.
(d) Dishonoured our acceptance to Vivek ₹ 27,000 and Noting Charges paid by Vivek ₹ 700.
Solution:
In the books of Mrunal
Journal Entries

Class 12 Commerce BK Textbook Solutions Digest

• 12th Bk Chapter 1 Practical Problems
• 12th Bk Chapter 2 Practical Problems
• 12th Bk Chapter 3 Practical Problems
• 12th Bk Chapter 4 Practical Problems
• 12th Bk Chapter 5 Practical Problems
• 12th Bk Chapter 6 Practical Problems
• 12th Bk Chapter 7 Practical Problems
• 12th Bk Chapter 8 Practical Problems
• 12th Bk Chapter 9 Practical Problems
• 12th Bk Chapter 10 Practical Problems

Reconstitution of Partnership (Death of Partner) 12th BK Commerce Chapter 5 Solutions Maharashtra Board

Balbharti Maharashtra State Board 12th Commerce Book Keeping & Accountancy Solutions Chapter 5 Reconstitution of Partnership (Death of Partner) Textbook Exercise Questions and Answers.

Class 12 Commerce BK Chapter 5 Exercise Solutions

1. Objective questions:

A. Select the most appropriate answer from the alternative given below and rewrite the sentences.

Question 1.
Benefit Ratio is the ratio in which _______________
(a) The old partner gain on the admission of a new partner
(b) The Goodwill of a new partner on admission is credited to old partners
(c) The continuing partners’ benefits on retirement or death of a partner
(d) All partners are benefitted.
Answer:
(c) The continuing partner’s benefits on retirement or death of a partner

Question 2.
The ratio by which existing partners are benefitted _______________
(a) gain ratio
(b) sacrifice ratio
(c) profit ratio
(d) capital ratio
Answer:
(a) gain ratio

Question 3.
Profit and Loss Suspense Account is shown in the new Balance Sheet on _______________ side.
(a) debit
(b) credit
(c) asset
(d) liabilities
Answer:
(c) asset

Question 4.
Death is a compulsory _______________
(a) Dissolution
(b) Admission
(c) Retirement
(d) Winding up
Answer:
(c) Retirement

Question 5.
The balance on the Capital Account of a partners, on his death is transferred to _______________ Account.
(a) Relatives
(b) Legal Heir’s Loan/Executors Loan
(c) Partners’ Capital
(d) Partners’ Loan
Answer:
(b) Legal Heir’s Loan/Executors Loan.

B. Write a word, term, phrase, which can substitute each of the following statements.

Question 1.
Excess of credit side over the debit side of Profit and Loss Adjustment Account.
Answer:
Profit

Question 2.
A person who represents the deceased partner on the death of the partner.
Answer:
Legal Heir’s or Executor

Question 3.
Accumulated past profit kept in the form of reserve.
Answer:
Reserve fund or General reserve

Question 4.
The partner who died.
Answer:
Deceased partner

Question 5.
The proportion in which the continuing partners benefit due to the death of a partner.
Answer:
Gain/Benefit ratio

C. State whether the following statements are True or False with reasons.

Question 1.
A deceased partner is not entitled to the Goodwill of the firm.
Answer:
This statement is False.
A deceased partner’s contribution was there in the development of business and goodwill is the value of the business in terms of money. Hence, a deceased partner is entitled to receive goodwill from the firm.

Question 2.
A deceased partner is entitled to his share of General Reserve.
Answer:
This statement is True.
General reserve is created out of past undistributed profit. Past profit is earned due to the efforts and hard work of all the partners including the partner who is now dead. Hence a deceased partner has right on it and therefore a deceased partner is entitled to receive his share of General reserve.

Question 3.
If goodwill is written off, a Deceased Partner’s Capital Account is debited.
Answer:
This statement is False.
When the benefits of goodwill are given to the deceased partner, his capital account is credited and when such goodwill is written off, capital accounts of remaining partners are debited.

Question 4.
After the death of a partner, the entire amount due to the deceased partner is paid to the legal representative of the deceased partner.
Answer:
This statement is True.
After the death of a partner, the entire amount due to the deceased partner is paid to the legal representative of the deceased partner as he is the only person who has the legal right to that amount.

Question 5.
For recording the profit or loss up to the death, the Profit and Loss Appropriation Account is operated.
Answer:
This statement is False.
For recording the profit or loss up to the death, the Profit and Loss suspense Account is created and operated. This is because final accounts cannot be prepared on the date of death of a partner. Till that period a separate account called Profit and Loss Suspense A/c is prepared.

D. Fill in the blanks and rewrite the following sentence.

Question 1.
Deceased Partners’ Executors Account is shown on the _______________ side of the Balance Sheet.
Answer:
Liabilities

Question 2.
On the death of a partner, a ratio in which the continuing partners get more share of profits in future is called as _______________ Ratio.
Answer:
Gain

Question 3.
Deceased partners share of profit up to the death is shown on _______________ side of Balance Sheet.
Answer:
Assets

Question 4.
Benefit Ratio = New Ratio – _______________
Answer:
Old Ratio

Question 5.
When Goodwill is raised at its full value and it is written off _______________ Account is to be credited.
Answer:
Goodwill

E. Answer in one sentence only.

Question 1.
What is Gain Ratio?
Answer:
The profit-sharing ratio which is acquired by the surviving or continuing partners on account of the death of any partner is called gain ratio or benefit ratio.

Question 2.
In which ratio general reserve is distributed on the death of a partner?
Answer:
General reserve is distributed on the death of a partner in their old profit sharing ratio.

Question 3.
To whom do you distribute general reserve on the death of a partner?
Answer:
On the death of a partner general reserve is distributed among all partners in their old profit and loss ratio.

Question 4.
How the death of a partner is a compulsory retirement?
Answer:
After the death of a partner, the business is not able to get any kind of services from the deceased partner and so we can say that the death of a partner is like a compulsory retirement.

Question 5.
To which account profit is to be transferred up to the date of his death?
Answer:
Profit of the deceased partner, up to the date of his death, is transferred to his Legal Heir’s/Executor’s Account.

Practical Problems

Question 1.
Rajesh, Rakesh, and Mahesh were equal Partners on 31st March 2019. Their Balance Sheet was as follows 31st March 2019.
Balance Sheet as of 31st March 2019

Mr. Rajesh died on 30th June 2019 and the following adjustment was agreed as:
1. Furniture was to be adjusted to its market price of ₹ 3,40,000.
2. Land and Building were to be depreciated by 10%.
3. Provide R.D.D. @ 5% on debtors.
4. The profit up to the date of death of Mr. Rajesh is to be calculated on the basis of last year’s profit which was ₹ 1,80,000.
Prepare:
1. Profit and Loss Adjustment A/c
2. Partners’ Capital Account
3. Balance Sheet of the continuing firm.
Solution:
In the books of the Partnership Firm


Balance Sheet as of 1st July 2019

Working Note:
The profit of the firm of last year was ₹ 1,80,000.
Proportionate profit up to the date of death for Rajesh is as follows
= 1,80,000 × \(\frac{3}{12} \times \frac{1}{3}\) (Period) (P & L ratio)
= ₹ 15,000 (Profit and Loss Suspense A/c)

Question 2.
Rahul, Rohit, and Ramesh are in a business sharing profits and losses in the ratio of 3 : 2 : 1 respectively. Their Balance Sheet as of 31st March, 2017 was as follows:
Balance Sheet as of 31st March 2017

On 1st October 2017, Ramesh died and the Partnership deed provided that
1. R.D.D. was maintained at 5% on Debtors.
2. Plant and Machinery and Investment were valued at ₹ 80,000 and ₹ 4,10,000 respectively.
3. Of the creditors an item of ₹ 6,000 was no longer a liability and hence was properly adjusted.
4. Profit for 2017-18 was estimated at ₹ 1,20,000 and Ramesh’s share in it up to the date of his death was given to him.
5. Goodwill of the firm was valued at two times the average profit of the last five years, which were
2012-13 – ₹ 1,80,000
2013-14 – ₹ 2,00,000
2014-15 – ₹ 2,50,000
2015-16 – ₹ 1,50,000
2016-17 – ₹ 1,20,000
Ramesh’s share in it was to be given to him.
6. Salary ₹ 5,000 p.m. was payable to him.
7. Interest on capital at 5% i.e. was payable and on Drawings ₹ 2,000 were charged.
8. Drawings made by Ramesh up to September 2017 were ₹ 5,000 p.m.
Prepare Ramesh’s Capital A/c showing the amount payable to his executors.
Give working of Profit and Goodwill.
Ramesh Capital Balance ₹ 3,41,000
Solution:
In the books of the Partnership Firm

Working Notes:
1. Calculation of share of Goodwill:
(a) Average profit = \(\frac{Total Profit}{No. of years}\)
= \(\frac{1,80,000+2,00,000+2,50,000+1,50,000+1,20,000}{5}\)
= \(\frac{9,00,000}{5}\)
= ₹ 1,80,000

(b) Goodwill = Average profit × No. of years
= 1,80.000 × 2
= ₹ 3,60,000

(c) Share of Goodwill to Ramesh = Goodwill of the firm × Ramesh’s share
= 3,60,000 × \(\frac{1}{6}\)
= ₹ 60,000

2. Calculation of share of profit due to Ramesh:
Share of profit = Last year profit × Share of profit × Period
= 1,20,000 × \(\frac{1}{6} \times \frac{6}{12}\)
= ₹ 10,000 (Profit and Loss Suspense A/c)

3. Interest on Capital is calculated for six months.
∴ Interest = 2,40,000 × \(\frac{6}{12} \times \frac{5}{100}\) = ₹ 6,000

4.

Question 3.
Ram, Madhav, and Keshav are partners sharing profit and losses in the ratio 5 : 3 : 2 respectively. Their Balance Sheet as of 31st March, 2018 was as follows:
Balance Sheet as of 31st March 2018

Keshav died on 31st July 2018 and the following adjustments were agreed by as per the partnership deed.
1. Creditors have increased by ₹ 10,000.
2. Goodwill is to be calculated at 2 years purchase of average profits of 5 years.
3. The profits of the preceding 5 years was
2013-14 – ₹ 90,000
2014-15 – ₹ 1,00,000
2015-16 – ₹ 60,000
2016-17 – ₹ 50,000
2017-18 – ₹ 50,000 (Loss)
Keshav’s share in it was to be given to him.
4. Loose Tools and livestock were valued at ₹ 80,000 and ₹ 1,20,000 respectively.
5. R.D.D. was maintained at ₹ 10,000.
6. Commission ₹ 2,000 p.m. was payable to Keshav. Profit for 2018-19 was estimated at ₹ 45,000 and Keshav’s share in it up to the date of his death was given to him.
Prepare Revaluation A/c, Keshav’s Capital A/c showing the amount payable to his executors.
Solution:
In the books of the Partnership Firm

Working Notes:
1. Calculation of share of Goodwill:
(a) Average profit = \(\frac{\text { Total profit }}{\text { No. of years }}\)
= \(\frac{90,000+1,00,000+60,000+50,000-50,000}{5}\)
= \(\frac{2,50,000}{5}\)
= ₹ 50,000

(b) Goodwill = Average profit × No. of years
= 50,000 × 2
= ₹ 1,00,000

(c) Share of Goodwill to Keshav = Goodwill of the firm × Keshav’s share
= 1,00,000 × \(\frac{2}{10}\)
= ₹ 20,000

2. Calculation of share of profit due to Keshav
Share of profit = Last year profit × Share of Keshav × Period
= 45,000 × \(\frac{2}{10} \times \frac{4}{12}\)
= ₹ 3,000 (Profit and Loss Suspense Account)

Question 4.
Virendra, Devendra, and Narendra were partners sharing profit and losses in the ratio of 3 : 2 : 1. Their Balance Sheet as of 31st March 2019 was as follows.
Balance Sheet as of 31st March 2019

Mr. Virendra died on 31st August 2019 and the partnership deed provided that the event of the death of Mr. Virendra his executors be entitled to be paid out.
1. The capital to his credit at the date of death.
2. His proportion of Reserve at the date of last Balance Sheet.
3. His proportion of Profits to date of death is based on the average profits of the last four years.
4. His share of Goodwill should be calculated at two years purchase of the profits of the last four years for the year ended 31st March were as follows:
2016 – ₹ 40,000
2017 – ₹ 60,000
2018 – ₹ 70,000
2019 – ₹ 30,000
5. Mr. Virendra has drawn ₹ 3,000 p.m. to date of death, There is no increase and decrease in the value of assets and liabilities.
Prepare Mr. Virendra Executors A/c.
Solution:
In the books of the Partnership Firm

Working Notes:
1. Calculation of share of profit:
(a) Average Profit = \(\frac{\text { Total profit }}{\text { No. of years }}\)
= \(\frac{40,000+60,000+70,000+30,000}{4}\)
= \(\frac{2,00,000}{4}\)
= ₹ 50,000

(b) Goodwill = Average profit × No. of years
= 50,000 × 2
= ₹ 1,00,000

(c) Share of Goodwill to Virendra = Goodwill of the firm × Virendra’s share
= 1,00,000 × \(\frac{3}{6}\)
= ₹ 50,000

2. Share of profit due to Virendra
Share of profit = Last year profit × Share of Virendra × Period
= 50,000 × \(\frac{3}{6} \times \frac{5}{12}\)
= ₹ 10,417 (Profit and Loss Suspense A/c)

Question 5.
The Balance Sheet of Sohan, Rohan, and Mohan who were sharing profits and losses in the ratio of 3 : 2 : 1 is as follows:
Balance Sheet as of 31st March 2019

Mr. Rohan died on 1st October 2019 and the following adjustments were made:
1. Goodwill of the firm is valued at ₹ 30,000.
2. Land and Building and Machinery were found to be undervalued by 20%.
3. Investments are valued at ₹ 60,000.
4. Stock to be undervalued by ₹ 5,000 and a provision of 10% as debtors were required.
5. Patents were valueless.
6. Mr. Rohan was entitled to share in profits up to the date of death and it was decided that he may be allowed to retain his drawings as his share of profit. Rohan’s drawings till the date of death were ₹ 25,000.
Prepare Partners’ Capital Accounts.
Solution:
In the books of the Partnership firm

Working Notes:
1.

2. Firm’s goodwill = ₹ 30,000.
DistrIbute among partners in their profit and loss ratio 3 : 2 : 1.

3. Revised value of Land & Building = \(\frac{\text { Book value }}{(100-20)} \times 100\)
= \(\frac{40,000}{80} \times 100\)
= ₹ 50,000.
∴ Increase In the value of Land & Building = Revised value – Book value
= 50,000 – 40,000
= ₹ 10,000.

4. Revised value of Machinery = \(\frac{\text { Book value }}{(100-20)} \times 100\)
= \(\frac{80,000}{80} \times 100\)
= ₹ 1 ,00,000.
∴ Increase in the value of Machinery = 1,00,000 – 80,000 = ₹ 20,000.

5. Patents were valueless means it is a loss for the business.

6. Rohan’s share In profit is ₹ 25,000 and his drawings are ₹ 25,000. Rohan is allowed to retain his drawings as his share of profit. Means write ₹ 25,000 as drawings on the debit side and write ₹ 25,000 as Profit and Loss Suspense A/c on the Credit side of Partners’ Capital A/c.

Class 12 Commerce BK Textbook Solutions Digest

• 12th Bk Chapter 1 Practical Problems
• 12th Bk Chapter 2 Practical Problems
• 12th Bk Chapter 3 Practical Problems
• 12th Bk Chapter 4 Practical Problems
• 12th Bk Chapter 5 Practical Problems
• 12th Bk Chapter 6 Practical Problems
• 12th Bk Chapter 7 Practical Problems
• 12th Bk Chapter 8 Practical Problems
• 12th Bk Chapter 9 Practical Problems
• 12th Bk Chapter 10 Practical Problems

Analysis of Financial Statements 12th BK Commerce Chapter 9 Solutions Maharashtra Board

Balbharti Maharashtra State Board 12th Commerce Book Keeping & Accountancy Solutions Chapter 9 Analysis of Financial Statements Textbook Exercise Questions and Answers.

Class 12 Commerce BK Chapter 9 Exercise Solutions

Objective Questions

A. Select the most appropriate alternative from those given below and rewrite the sentences:

Question 1.
Gross Profit Ratio indicates the relationship of gross profit to the ____________
(a) Net cash
(b) Net sales
(c) Net purchases
(d) Gross sales
Answer:
(b) Net sales

Question 2.
Current ratio = \(\frac{……………….}{Current liabilities}\)
(a) Quick assets
(b) Quick liabilities
(c) Current assets
(d) None of these
Answer:
(c) Current assets

Question 3.
Liquid assets = ____________
(a) Current assets + Stock
(b) Current assets – Stock
(c) Current assets – Stock + Prepaid Expenses
(d) None of these
Answer:
(b) Current assets – Stock

Question 4.
Cost of goods sold = ____________
(a) Sales – Gross profit
(b) Sales – Net profit
(c) Sales proceeds
(d) None of these
Answer:
(a) Sales – Gross profit

Question 5.
Net profit ratio is equal to ____________
(a) Operating ratio
(b) Operating net profit ratio
(c) Gross profit ratio
(d) Current ratio
Answer:
(a) Operating ratio

Question 6.
The common size statement requires ____________
(a) common base
(b) journal entries
(c) cashflow
(d) current ratio
Answer:
(a) common base

Question 7.
Bill payable is ____________
(a) long-term loan
(b) current liabilities
(c) liquid assets
(d) net loss
Answer:
(b) current liabilities

Question 8.
Generally current ratio should be ____________
(a) 2 : 1
(b) 1 : 1
(c) 1 : 2
(d) 3 : 1
Answer:
(a) 2 : 1

Question 9.
From financial statement analysis the creditors are specially interested to know ____________
(a) Liquidity
(b) Profits
(c) Sale
(d) Share capital
Answer:
(a) Liquidity

B. Give one word/term/phrase for each of the following statements.

Question 1.
The statement showing the profitability of two different periods.
Answer:
Comparative Income Statement

Question 2.
The ratio measures the relationship between gross profit and net sales.
Answer:
Gross Profit Ratio

Question 3.
Critical evaluation of financial statement to measure profitability.
Answer:
Analysis of Financial Statement

Question 4.
A particular mathematical number showing the relationship between two accounting figures.
Answer:
Ratio

Question 5.
An asset that can be converted into cash immediately.
Answer:
Liquid Asset

Question 6.
The ratio measuring the relationship between net profit and ownership capital employed.
Answer:
ROCE

Question 7.
The statement showing financial position for different periods of the previous year and the current year.
Answer:
Comparative Balance Sheet

Question 8.
Statement showing changes in cash and cash equivalent during a particular period.
Answer:
Cash Flow Statement

Question 9.
Activity related to the acquisition of long-term assets and investment.
Answer:
Financing Activities

Question 10.
The ratio that establishes a relationship between Quick Assets and Current Liabilities.
Answer:
Liquid Ratio

C. State true or false with reasons.

Question 1.
Financial statements include only the Balance Sheet.
Answer:
This statement is False.
Financial statements include Balance Sheet and Profit and Loss A/c. This is because financial statements are prepared by business organisations to find out the efficiency, solvency, profitability, growth, strength, and status of the business. For this, they need information from the balance sheet as well as from Profit and Loss A/c.

Question 2.
Analysis of financial statements is a tool but not a remedy.
Answer:
This statement is True.
Based on analysis of the financial statement one can get an idea of the financial strength and weakness of the business. However, based on this one cannot take decisions about the business on various issues. Hence analysis of financial statements is a tool but not a remedy.

Question 3.
Purchase of fixed assets is operating cash flow.
Answer:
This statement is False.
Purchase of fixed assets is cash flow from investing activities. It is not a day-to-day operations activity like office/selling/distribution finance expenses/activities.

Question 4.
Dividend paid is not a source of funds.
Answer:
This statement is True.
The dividend is always paid on shares issued by a company as an expense. Shares itself is a source of funds. In payment of dividends, cash goes out from the company. It is an outflow of cash and not a source of funds.

Question 5.
Gross profit depends upon net sales.
Answer:
This statement is True.
The gross profit ratio discloses the relation between gross profit and total net sales. The gross profit ratio is an income-based ratio, where gross profit is an income. There is a direct relation between net sales and gross profit. Higher the net sales higher the gross profit.

Question 6.
Payment of cash against the purchase of stock is the use of funds.
Answer:
This statement is True.
Cash payment for the purchase of stock is made from cash balance or/and from bank balance which is a part of the business fund. When stock or materials we purchase we use cash for payment.

Question 7.
Ratio Analysis is useful for inter-firm comparison.
Answer:
This statement is True.
The comparison of the operating performance of a business entity with the other business entities is known as an inter-firm comparison. This ratio analysis assists to know-how and to what extent a business entity is strong or weak as compared to other business entities.

Question 8.
The short-term deposits are considered as cash equivalent.
Answer:
This statement is True.
The short-term deposits are liquid assets. It means deposits are kept for some period (usually less than one year) and they are kept with an intention to get money quickly as and when required.
They are as good as cash and considered as cash equivalent.

Question 9.
Activity ratios and Turnover ratios are the same.
Answer:
This statement is True.
Turnover ratio is an efficiency ratio to check how efficiently a company is using different assets to extract earnings from them.
Activity ratios are financial analysis tools used to measure a business’s ability to convert its assets into cash. From both these definitions, we can say that Activity ratios and Turnover ratios are the same.

Question 10.
The current ratio measures the liquidity of the business.
Answer:
This statement is True.
The current ratio shows the relationship between current assets and current liabilities. If the proportion of current assets is higher than current liabilities, the liquidity position of the business entity is considered good. More liquidity means more short-term solvency. From the above, it is proved that the current ratio measures the liquidity of the business.

Question 11.
Ratio analysis measures profitability efficiency and financial soundness of the business.
Answer:
This statement is True.
With the help of profitability ratios (Gross profit, Net profit, and Operating profit) one can get the idea of profitability efficiency of the firm, and with the help of liquidity ratios (Current ratio and liquid ratio) one can get the idea of solvency or financial soundness of the business.

Question 12.
Usually, the current ratio should be 3 : 1.
Answer:
This statement is False.
Usually, the current ratio should be 2 : 1. It means current assets are double of current liabilities. It shows the short-term solvency of business enterprises.

D. Answer in one sentence only.

Question 1.
Mention two objectives of the comparative statement.
Answer:
Objectives of comparative statements are:

• Compare financial data at two points of time and
• Helps in deriving the meaning and conclusions regarding the changes in financial positions and operating results.

Question 2.
State three examples of cash inflows.
Answer:
Examples of cash inflows are:

• Interest received
• Dividend received
• Sale of asset/investment
• Rent received.

Question 3.
State three examples of cash-out flows.
Answer:
Examples of cash outflows are:

• Interest paid
• Loss on sale of an asset
• Dividend paid
• Repayment of short-term borrowings.

Question 4.
Give the formula of Gross Profit Ratio.
Answer:
Gross profit ratio = \(\frac{\text { Gross profit }}{\text { Net sales }} \times 100\)
Where Gross profit = Net sales – Cost of goods sold.
Cost of goods sold = Opening stock + Purchase – Purchase return + Direct expense – Closing stock
Net sales = Sales – Sales return.

Question 5.
Give the formula of Gross profit.
Answer:
Gross profit = Net sales – Cost of goods sold.
Cost of goods sold = Opening stock + Purchase – Purchase return + Direct expense – Closing stock
Net sales = Sales – Sales return.

Question 6.
Give any three examples of current assets.
Answer:
Cash or cash equivalent short-term lending and advances, expenses paid in advance, taxes paid in advance, etc. are examples of current assets.

Question 7.
Give the formula of the current ratio.
Answer:
Current ratio = \(\frac{\text { Current assets }}{\text { Current liabilities }}\)

Question 8.
Give the formula of quick assets.
Answer:
Quick assets = Current assets – (Stock + Prepaid expense)

Question 9.
State the formula of Cost of goods sold.
Answer:
Cost of goods sold = Opening stock + Purchase – Purchase return + Direct expense – Closing stock

Question 10.
State the formula of Average stock.
Answer:
Average stock = \(\frac{\text { Opentng stock of goods }+\text { Closing stock of goods }}{2}\)

Practical Problems

Question 1.
From the Balance Sheet of Amar Traders as of 31st March 2018 and 31st March 2019 prepare a Comparative Balance Sheet.

Solution:
Comparative Balance Sheet of Amar Traders as of 31st March 2018 and 31st March 2019


Percentage change = \(\frac{\text { Amount of absolute change }}{\text { Amount of previous year }} \times 100\)

Question 2.
From the Balance Sheet of Alpha Limited prepare a Comparative Balance Sheet as of 31st March 2018 and 31st March 2019:
Balance Sheet as of 31st March 2018 and 31st March 2019

Solution:
Comparative Balance Sheet of Alpha Limited as of 31st March 2018 and 31st March 2019

Question 3.
Prepare Comparative Balance Sheet for the year ended 31-3-18 and 31-3-19. Assets & Liabilities as follows:

Solution:
Comparative Balance Sheet as of 31st March 2018 and 31st March 2019

Question 4.
Prepare Comparative Balance Sheet for the year ended 31-3-17 and 31-3-18.

Solution:
Comparative Balance Sheet as of 31st March 2017 and 31st March 2018

Question 5.
Prepare Comparative Income statement of Noha Limited for the year ended 31-3-17 and 31-3-18.

Solution:
Comparative Income Statement of Noha Limited
For the year ended 31st March 2017 and 31st March 2018

Question 6.
Prepare Comparative Income Statement of Sourabh Limited for years ended 31-3-17 and 31-3-18.

Solution:
Comparative Income Statement of Sourabh Limited
For the year ended on 31st March 2017 and 31st March 2018

Question 7.
Following is the Balance Sheet of Sakshi Traders for the year ended 31-3-17 and 31-3-18

Prepare Common Size Balance Sheet for the years 31-03-17 and 31-03-18.
Solution:
Common Size Statement of Balance Sheet of Sakshi Traders as of 31st March 2017 and 31st March 2018

Note: Taking Total borrowed funds and Tota Funds applied as a base (100), Calculation is done.

Question 8.
Prepare Common Size Income Statement for the year ended 31-3-17 and 31-3-18.

Solution:
Common Size Statement for the year ended on 31st March 2017 and 31st March 2018

Note: Taking the amount of sales as base (100) other percentage figures are calculated.

Question 9.
Following is the Balance Sheet of Sakshi Limited. Prepare Cash Flow Statement:

Solution:
Cash Flow Statement
For the year ended 31st March 2017 and 31st March 2018

Question 10.
From the following Balance Sheet of Konal Traders prepare a Cash Flow Statement.

Solution:
Cash Flow Statement
For the year ended on 31st March 2017 and 31st March 2018

Question 11.
A company had following Current Assets and Current Liabilities:
Debtors = ₹ 1,20,000
Creditors = ₹ 60,000
Bills Payable = ₹ 40,000
Stock = ₹ 60,000
Loose Tools = ₹ 20,000
Bank Overdraft = ₹ 20,000
Calculate Current ratio.
Solution:
1. Current Assets = Debtors + Stock + Loose Tools
= 1,20,000 + 60,000 + 20,000
= ₹ 2,00,000

2. Current liabilities = Creditors + Bills payable + Bank overdraft
= 60,000 + 40,000 + 20,000
= ₹ 1,20,000

3. Current ratio = \(\frac{\text { Current assets }}{\text { Current liabilities }}\)
= \(\frac{2,00,000}{1,20,000}\)
= \(\frac{5}{3}\)
= 5 : 3

Question 12.
Current assets of company ₹ 6,00,000 and its Current ratio is 2 : 1. Find Current liabilities.
Solution:
Current ratio = \(\frac{\text { Current assets }}{\text { Current liabilities }}\)
\(\frac{2}{1}=\frac{6,00,000}{\text { Current liabilities }}\)
2 × Current liabilities = 6,00,000 × 1
Current liabilities = \(\frac{6,00,000}{2}\) = ₹ 3,00,000

Question 13.
Current liabilities = ₹ 3,00,000
Working capital = ₹ 8,00,000
Inventory = ₹ 2,00,000
Calculate Quick ratio.
Solution:
Current assets = Current liabilities + Working capital
= 3,00,000 + 8,00,000
= ₹ 11,00,000
Quick assets = Current assets – Inventory
= 11,00,000 – 2,00,000
= ₹ 9,00,000
Quick liability = Current liabilities – Bank O/D = ₹ 3,00,000
Quick ratio = \(\frac{\text { Quick assets }}{\text { Quick liabilities }}\)
= \(\frac{9,00,000}{3,00,000}\)
= \(\frac{3}{1}\)
= 3 : 1

Question 14.
Calculate Gross Profit ratio
Sales = ₹ 2,70,000
Net purchases = ₹ 1,50,000
Sales Ratio = ₹ 20,000
Closing Stock = ₹ 25,000
Operating Stock = ₹ 45,000
Solution:
Net sales = Sales – Sales return
= 2,70,000 – 20,000
= ₹ 2,50,000
Cost of goods sold = Opening stock + Net purchase – Closing stock
= 45,000 + 1,50,000 – 25,000
= ₹ 1,70,000
Gross profit = Net sales – Cost of goods sold
= 2,50,000 – 1,70,000
= ₹ 80,000
Gross Profit ratio = \(\frac{\text { Gross profit }}{\text { Net sales }} \times 100\)
= \(\frac{80,000}{2,50,000} \times 100\)
Gross profit ratio = 32%

Question 15.
Calculate Net Profit ratio from the following:
Sales = ₹ 3,80,000
Cost of goods sold = ₹ 2,60,000
Indirect expense = ₹ 60,000
Solution:
Sales = ₹ 3,80,000
Less: Cost of goods sold = ₹ 2,60,000
Gross profit = ₹ 1,20,000
Less: Indirect expense = ₹ 60,000
Net profit = ₹ 60,000
Net profit ratio = \(\frac{\text { Net profit }}{\text { Sales }} \times 100\)
= \(\frac{60,000}{3,80,000} \times 100\)
= 15.79%

Question 16.
Calculate Operating ratio:
Cost of goods sold = ₹ 3,50,000
Operating expense = ₹ 30,000
Sales = ₹ 5,00,000
Sales return = ₹ 30,000
Solution:
Net sales = Sales – Sales return
= 5,00,000 – 30,000
= ₹ 4,70,000
Operating ratio = \(\frac{\text { Cost of goods sold }+\text { Operating expense }}{\text { Net sales }} \times 100\)
= \(\frac{3,50,000+30,000}{4,70,000} \times 100\)
= \(\frac{3,80,000}{4,70,000} \times 100\)
= 80.85%

Question 17.
Calculate Current ratio.
1. Current assets = ₹ 3,00,000
2. Current liabilities = ₹ 1,00,000
Solution:
Current ratio = \(\frac{\text { Current assets }}{\text { Current liabilities }}\)
= \(\frac{3,00,000}{1,00,000}\)
= \(\frac{3}{1}\)
= 3 : 1

Class 12 Commerce BK Textbook Solutions Digest

• 12th Bk Chapter 1 Practical Problems
• 12th Bk Chapter 2 Practical Problems
• 12th Bk Chapter 3 Practical Problems
• 12th Bk Chapter 4 Practical Problems
• 12th Bk Chapter 5 Practical Problems
• 12th Bk Chapter 6 Practical Problems
• 12th Bk Chapter 7 Practical Problems
• 12th Bk Chapter 8 Practical Problems
• 12th Bk Chapter 9 Practical Problems
• 12th Bk Chapter 10 Practical Problems

Accounts of ‘Not for Profit’ Concerns 12th BK Commerce Chapter 2 Solutions Maharashtra Board

Balbharti Maharashtra State Board 12th Commerce Book Keeping & Accountancy Solutions Chapter 2 Accounts of ‘Not for Profit’ Concerns Textbook Exercise Questions and Answers.

Class 12 Commerce BK Chapter 2 Exercise Solutions

1. Objective Type Questions:

A. Select the most appropriate alternatives from the following and rewrite the sentences:

Question 1.
Not for Profit concern renders ___________ services to public at large.
(a) commercial
(b) social
(c) individual
(d) group
Answer:
(b) social

Question 2.
Donation for Scholarship Fund is ___________
(a) Capital Receipt
(b) Revenue Receipt
(c) Capital Expenditure
(d) Revenue Expenditure
Answer:
(a) Capital Receipt

Question 3.
Income and Expenditure Account is a ___________ Account.
(a) Capital
(b) Real
(c) Personal
(d) Nominal
Answer:
(d) Nominal

Question 4.
Outstanding subscription at the end of the Accounting Year represents ___________
(a) Liability
(b) an Expenditure
(c) an Asset
(d) Capital Fund
Answer:
(c) an Asset

Question 5.
Subscription received in advance during the accounting year is ___________
(a) an Income
(b) an Expense
(c) an Asset
(d) a Liability
Answer:
(d) a Liability

Question 6.
Excess of Income over Expenditure is termed as ___________
(a) Deficit
(b) Profit
(c) Surplus
(d) Loss
Answer:
(c) Surplus

Question 7.
Not for Profit concern prepares ___________ Account instead of Profit and Loss Account to know the result.
(a) Trading
(b) Income and Expenditure
(c) Cash
(d) Receipt and Payments
Answer:
(b) Income and Expenditure

Question 8.
The closing balance of Receipts and Payments Account usually represent ___________
(a) Closing stock
(b) Cash and Bank Balance
(c) Surplus
(d) Deficit
Answer:
(b) Cash and Bank Balance

Question 9.
Not for Profit organization is also called ___________ organization.
(a) service
(b) trading
(c) profit-making
(d) commercial
Answer:
(a) service

Question 10.
Expenditure on Purchase of Building is a ___________ Expenditure.
(a) Capital
(b) Revenue
(c) General
(d) Recurring
Answer:
(a) Capital

B. Write the Word/Phrase/Term, which can substitute each of the following Statements.

Question 1.
The Form of Organization providing services to the society only.
Answer:
Not for Profit concern

Question 2.
An account which is prepared by Not for Profit concern instead of Profit and Loss Account.
Answer:
Income and Expenditure Account

Question 3.
Donations are received for a specific purpose.
Answer:
Specific donation/Capital Receipt

Question 4.
The Receipts are not recurring in nature.
Answer:
Capital Receipt

Question 5.
An Account that records only revenue items in case of Not a for-profit concern.
Answer:
Income and Expenditure Account

Question 6.
Accounts which records only cash transactions in case of Not for Profit concerns.
Answer:
Receipts and Payments Account

Question 7.
The income is earned during the year but not received during the year.
Answer:
Outstanding income

Question 8.
The credit balance of Income and Expenditure Account.
Answer:
Surplus

Question 9.
To excess of total assets over total liabilities of a Not for Profit concern.
Answer:
Capital Fund

Question 10.
All such receipts are non-recurring in nature and not forming a part of a regular flow of income.
Answer:
Capital Receipts

C. State whether the following statements are True or False with reasons.

Question 1.
Not for Profit concerns do not have a profit motive.
Answer:
This statement is True.
Not for profit concerns, the main aim is to give services to its members or to the society at large. They do not carry any Trading activity or Manufacturing activity so there is no question of having a profit motive for ‘Not for Profit’ concerns.

Question 2.
Charitable Institutions prepare Profit and Loss Accounts at the end of every financial year.
Answer:
This statement is False.
Charitable Institutions, Not for Profit concerns, do not undertake any trading activities and hence instead of Profit and Loss Account prepare Income-Expenditure Account to record all revenue expenses/losses and revenue incomes/gains of the current year.

Question 3.
There is no difference between Receipts and Payments Account and Income and Expenditure Account.
Answer:
This statement is False.
In the Receipts and Payments Account, all receipts and payments transactions in cash or through the bank are recorded irrespective of the current year, previous year, or next year while in Income-Expenditure Account, only the current year’s incomes and expenses (Revenue) are recorded.

Question 4.
Income and Expenditure Account represents either surplus or deficit.
Answer:
This statement is True.
In the Income and Expenditure Account, all revenue incomes and expenses are recorded and at the end of the specified period, the difference is found out which is known as ‘Surplus’ (Revenue incomes are more than Revenue expenses) or ‘Deficit’ (Revenue expenses are more than Revenue incomes).

Question 5.
Receipts and Payments Accounts do not have any opening balance.
Answer:
This statement is False.
Receipts and Payments Account is just like a cash book of trading concern and opening balance (Cash or Bank or Cash and Bank) must be there to start recording of transactions.

Question 6.
Not for Profit concerns do not prepare a Balance Sheet.
Answer:
This statement is False.
To know the financial position of the organization, at the end of the particular period, Not for Profit concerns prepare Balance Sheet.

Question 7.
Purchases of Sports Equipments is a Capital Expenditure.
Answer:
This statement is True.
Generally, the life span of sports equipment is more than one year, so the purchase of sports equipment is considered a capital expenditure.

Question 8.
Income and Expenditure Account is a Real Account.
Answer:
This statement is False.
In the Income and Expenditure Account, all the revenue incomes and revenue expenses are recorded and therefore it is a Nominal Account and not a Real Account.

Question 9.
The Receipts and Payments Account contains only the transactions relating to the current year.
Answer:
This statement is False.
In the Receipts and Payments Account, transactions of not only the current year but of the previous year or of the next year are also recorded.

Question 10.
Excess of Assets over liabilities is called Capital Fund.
Answer:
This statement is True.
For ‘Not for Profit’ concerns in the Balance Sheet, when a total of Assets is more than the total of Liabilities, the difference of amount is considered as ‘Capital Fund’.

D. Fill in the blanks.

Question 1.
Not for Profit organization is never engaged in ___________ activities.
Answer:
trading

Question 2.
Not for Profit organization is called ___________ organization.
Answer:
service

Question 3.
Receipts and Payments Account falls under the category of ___________ Account.
Answer:
Real

Question 4.
In Receipts and Payment Account the summary of ___________ transactions are recorded.
Answer:
cash

Question 5.
Income and Expenditure Account is similar to the ___________ Account of Trading concern.
Answer:
Profit and Loss

Question 6.
Credit side of Receipts and Payments Account shows cash ___________
Answer:
payments

Question 7.
Income and Expenditure Account is a ___________ Account.
Answer:
Nominal

Question 8.
Mumbai University prepares ___________ Account instead of a Profit and Loss account.
Answer:
Income and Expenditure

Question 9.
Subscription received from the members is considered as ___________ receipts.
Answer:
revenue

Question 10.
The transactions recorded in the Income and Expenditure Account related only to the ___________ year.
Answer:
current

E. Answer in one sentence only.

Question 1.
What do you mean by ‘Not for Profit’ Concern?
Answer:
A concern or organization which is formed and established to serve its members and society or the general public by undertaking various activities without any profit motive is called a ‘Not for Profit’ concern.

Question 2.
Which organizations prepare Income and Expenditure Account?
Answer:
‘Not for profit’ concern prepares Income and Expenditure Account.

Question 3.
What is Receipts and Payments Account?
Answer:
An account that is prepared by a ‘Not for Profit Concern’ to record a summary of all types of cash receipts and cash payments inclusive of bank transactions is called Receipts and Payments Account.

Question 4.
Why Income and Expenditure Account is prepared?
Answer:
Income and Expenditure Account is prepared to ascertain, whether the concern has sufficient income to meet its expenses, or not.

Question 5.
What is Capital Fund?
Answer:
Excess of Assets over Liabilities is known as Capital Fund which also consists of contributions, subscription, entrance fees, surplus income, etc.

Question 6.
What is a Subscription?
Answer:
Subscription is the periodical payment made by the members to the ‘Not for Profit’ concern for maintaining their membership.

Question 7.
What is ’Legacy’?
Answer:
Any asset, property, or amount of cash which ‘Not for Profit’ concern receives as per the provisions made in the will of the donor after his death is called Legacy.

Question 8.
What is Surplus?
Answer:
Excess of income over expenditure shown by Income and Expenditure Account represents Surplus for the financial year.

Question 9.
What do you mean by Non-recurring Expenses?
Answer:
Non-recurring expenses are the expenses that are made for the acquisition of fixed assets that gives benefits for a long period.

Question 10.
To which account ‘Surplus’ or ‘Deficit’ is transferred?
Answer:
‘Surplus’ or ‘Deficit’ is transferred to the Balance Sheet by adding it or subtracting it from Capital Fund.

F. I. Complete the Table:

Question 1.

Sr. No.	Income (₹)	Expenditure (₹)	Surplus/Deficit (₹)
1	10,000	?	5,000 (Deficit)
2	8,000	?	4,000 (Surplus)
3	?	15,000	8,000 (Surplus)
4	7,500	9,000	?
5	15,000	11,300	?

Solution:

Sr.No.	Income (₹)	Expenditure (₹)	Surplus/Deficit (₹)
1	10,000	15,000	5,000 (Deficit)
2	8,000	4,000	4,000 (Surplus)
3	23,000	15,000	8,000 (Surplus)
4	7,500	9,000	1,500 (Deficit)
5	15,000	11,300	3,700 (Surplus)

II. Salaries paid during the year:

Question 1.

Sr.No.	Total (₹)	Prepaid/Outstanding	₹	Expenditure for the year
1	1,100	Prepaid	100	?
2	2,700	Prepaid	?	2,000
3	8,250	Prepaid	?	6,650
4	1,200	Outstanding	200	?
5	?	Outstanding	600	5,100
6	1,800	Outstanding	?	2,200

Solution:

Sr. No.	Total (₹)	Prepaid/Outstanding	₹	Expenditure for the year
1	1,100	Prepaid	100	1,000
2	2,700	Prepaid	700	2,000
3	8,250	Prepaid	1,600	6,650
4	1,200	Outstanding	200	1,400
5	4,500	Outstanding	600	5,100
6	1,800	Outstanding	400	2,200

III. Rent received during the year:

Question 1.

Sr.No.	Total Received (₹)	Rent Received in Advance/Accrued	₹	Income for the year (₹)
1	1,300	Received in Advance	200	?
2	?	Received in Advance	400	1,400
3	2,650	Received in Advance	?	2,000
4	?	Accrued	290	3,190
5	1,700	Accrued	?	2,150
6	2,600	Accrued	500	?

Solution:

Sr.No.	Total Received (₹)	Rent received in Advance/Accrued	₹	Income for the year (₹)
1	1,300	Received in Advance	200	1,100
2	1,800	Received in Advance	400	1,400
3	2,650	Received in Advance	650	2,000
4	2,900	Accrued	290	3,190
5	1,700	Accrued	450	2,150
6	2,600	Accrued	500	3,100

G. Calculate the following:

Question 1.
10 % p.a. Depreciation on Furniture ₹ 50,000 (for three months)
Solutions:
Depreciation = Cost of Asset × Rate × Period
= 50,000 × \(\frac{10}{100}\) × \(\frac{3}{12}\)
= ₹ 1250 Depr. for 3 months
Thus, Depreciation on furniture @ 10 % on ₹ 50,000 for 3 months = ₹ 1250.

Question 2.
12 % p.a. Interest on Bank loan ₹ 80,000 for 1 year.
Answer:
I = \(\frac{\mathrm{PRN}}{100}\)
= 80,000 × \(\frac{12}{100}\) × 1
= ₹ 9600.
Thus, interest on a Bank loan ₹ 80,000 for 1 year = ₹ 9600.

Question 3.
Opening stock of stationery ₹ 5,000, purchases of stationery ₹ 7000, outstanding stationery bill ₹ 12,000, closing stock ₹ 1000. What is the amount of stationery consumed?
Answer:

Question 4.
Salary ₹ 10,000, outstanding salary ₹ 5,000. Calculate the salary to be debited to the Income and Expenditure Account.
Answer:

Question 5.
Library Books ₹ ……………? Less 10% Depreciation ₹ 5,000 = ₹ 45,000.
Answer:
Library books ₹ 50,000. Less 10% Depreciation ₹ 5,000 = ? 45,000

H. Find odd one:

Question 1.
Trading Account, Profit and Loss Account, Receipts and Payments Account, Balance Sheet.
Answer:
Receipts and Payments Account

Question 2.
Machinery, Furniture, Computers, Salaries.
Answer:
Salaries

Question 3.
Subscription, Stationery, Interest Received, Locker Rent received.
Answer:
Stationery

Question 4.
Reliance Industries, Venna Vidya Mandir, Laxmi Hospital, Manoj Sports club.
Answer:
Reliance Industries

Question 5.
Surplus, Deficit, Net Profit, Capital fund.
Answer:
Net Profit

Practical Problems

Question 1.
Calculation of stationery consumed during the year

Adjustments:
1. ₹ 1,000 outstanding for the stationery bill.
2. Stock of Stationery as of 31 – 03 – 2019 was valued at ₹ 1,800.
With the above information, calculate the amount of Stationery consumed during the year and show its presence in final Accounts of a concern.
Solution:
In the books of ___________________

Balance Sheet as of 31 – 03 – 2019

Question 2.
Presentation of Subscription only

Adjustments:
The outstanding subscription for 2018-19 is ₹ 32,000.
With the above information, present the item Subscription in Income and Expenditure Account for the year ended 31 -03-2019 and Balance Sheet as on the date.
Solution:
In the books of ___________________

Balance Sheet as of 31st March 2019

Working Note:
Outstanding subs, given in the balance sheet as on 01-04-2018 are ₹ 26,000 (for 2016-17) and ₹ 35,000 (for 2017-18). Against that, as shown in Receipt – Payment A/c ₹ 23,000 and ₹ 30,000 are received respectively. Means ₹ 3,000 and ₹ 5,000 are still outstanding which are known in the current year balance sheet.

Question 3.

Adjustments:
Subscription outstanding for the year 2017-18 is ₹ 6,000.
During the previous year subscription received in advance for 2017-18 is ₹ 2,000.
The outstanding subscription of 2016-17 is ₹ 2,500.
With the help of the above information present the item Subscription in Income and Expenditure Account for the year ending 31-03-2018 and Balance Sheet as on that date.
Solution:
In the books of ___________________

Balance Sheet as of 31st March 2018

Question 4.
Preparation of Income and Expenditure Account only
Following is the Receipts and Payments Account of “Satara Sports Club” Satara.
Prepare Income and Expenditure Account for the year ending 31-03-2019.

Adjustments:
1. Outstanding subscription for the current year is ₹ 4,500.
2. Outstanding rent for the current year amounted to ₹ 1,000.
3. Entrance fees are to be treated as Revenue Income.
4. Stock of sports material as of 01-04-2018 ₹ 6,000 and on 31 – 03 – 2019 ₹ 14,000.
Solution:
In the books of ‘Satara Sports Club’ Satara

Working Notes:
1. Entrance fees are to be treated as Revenue income. Therefore entire amount is recorded on the income side.
2. Since the selling price of Furniture ₹ 4,500 is lower than its cost price of ₹ 8,000, there is a Loss in the sale of furniture.
It is calculated as follows:
Loss on sale of furniture = Book value (cost) – Selling price
= 8,000 – 4,500
= ₹ 3,500
It is debited to Income and Expenditure A/c.

Question 5.
“Bhartiya Kala Kendra”, Solapur gives you the following information for the year ended on 31-03-2018. Prepare Income and Expenditure Account for the year ending 31-03-2018.

Additional Information:
1. Legacies are to be capitalized.
2. Outstanding salary ₹ 200.
3. 50% of Entrance fees are to be capitalized.
Solution:
In the books of Bhartiya Kala Kendra, Solapur

Question 6.
Accounts of a Charitable Hospital
From the following particulars relating to “Radha-Krishna Charitable Hospital”, Pune.
Prepare Income and Expenditure Account for the year ending 31-03-2020 and Balance Sheet as of that date.

Additional Information:

Provide Depreciation on Equipments ₹ 1,900 and on Building ₹ 1,500.
Solution:
In the Books of Radha-Krishna Charitable Hospital, Pune

Balance Sheet as of 31st March 2020

Working Notes:
1. To find medicines consumed, here in the opening stock, purchases are added and the closing stock of medicine is subtracted.
2. For equipment, in opening balance, add equipment purchased during the year and subtract depreciation to get the closing balance of equipment.
3. Interest ₹ 10,000 is received on 10% investments means there is no outstanding interest.

Question 7.
From the following transactions of Receipts and Payments Account of “Pavan-putra Hanuman Vyayamshala”, Parbhani and the adjustments are given, you are required to prepare Income and Expenditure Account and Balance Sheet as of 31st March 2019.

Adjustments:
1. There are 500 members paying an annual subscription of ₹ 50 each.
2. Outstanding salary was ₹ 1,200.
3. The Assets on 01-04-2018 were as follows:
Building ₹ 50,000, Furniture ₹ 15,000
4. Provide depreciation on Building and Furniture at 5% and 10% respectively.
5. 50% Entrance fees are to be capitalized.
6. Interest on investment at 5% p.a. has accrued for 6 months.
7. Capital fund ₹ 70,000 on 01-04-2018.
Solution:
In the Books of Pavan-putra Hanuman Vyayamshala, Parbhani

Balance Sheet as of 31st March 2019

Working Notes:
1. Interest on investment is receivable for 6 months:
I = \(\frac{\text { PRN }}{100}\)
= 15,000 × \(\frac{5}{100} \times \frac{6}{12}\)
= ₹ 375 (outstanding interest on investment)
2. 50 % of entrance fees (i.e. \(\frac{6200}{2}\) = ₹ 310o) is to be capitalised means add it to capital fund.
3. Total subscription of current year = 500 members × ₹ 50 = ₹ 25,000
But actual subscription received = ₹ 18,000
means difference (25,000 – 18,000) of ₹ 7,000 is outstanding subscription.

Question 8.
Newly Started Art Circle
“Jeevan Jyoti Art Circle” a newly established concern has presented the following information:

Adjustments:
1. Subscription outstanding for the year was ₹ 5,000.
2. Depreciate Furniture @ 10% p.a.
3. Full amount of admission fees and 50% donations are to be capitalized.
You are required to prepare an Income and Expenditure Account for the year ending 31-03-2018 and a Balance Sheet as of that date.
Solution:

Balance Sheet as of 31st March 2018

Working Notes:
The full amount of admission fees and 50% of donations are added to the surplus amount to get capital funds. (Opening balance of the capital fund is not given.)

Question 9.
Given below is the Receipts and Payments Account of “Vithai Mahila Mandat”, Pandharpur for the year ending 31-03-2018. Prepare an Income and Expenditure Account for the year ended 31-03-2018 and Balance Sheet as of that date.

Adjustments:
1. Capital fund on 01-04-2017 was ₹ 90,000.
2. Outstanding subscription ₹ 4,000.
3. Entrance fees are to be capitalized.
4. Rent paid includes ₹ 800 paid for April 2018.
5. They have the following Assets and Liabilities as of 01-04-2017:
Furniture ₹ 9,000, Building ₹ 70,000, and Outstanding Expenses ₹ 12,000.
Solution:
In the books of Vithai Mahila Mandal, Pandharpur

Balance Sheet as of 31st March 2018

Working Notes:
1. Outstanding subscription of ₹ 4,000 is first added to subscription received on the credit side of Income and Expenditure A/c and then it is shown on the Assets side of Balance Sheet.
2. Entire amount of entrance fees ₹ 3,500 is added to the capital fund.
3. Prepaid ₹ 800 is first deducted from rent paid on the debit side of Income & Expenditure A/c and then shown on the Assets side of the Balance Sheet.
4. Outstanding expenses ₹ 12,000 is directly shown on the Liabilities side of the Balance Sheet.

Question 10.
From the following Receipts and Payments Account “K.B.P. Engineering College”, Nashik for the year ending on 31 – 03 – 2019 and additional information, prepare Income and Expenditure Account for the year ending 31-03-2019 and Balance Sheet as on that date.

Additional Information:

1. 50% of donations are for the Building funds and the balance is to be treated as Revenue income.
2. Outstanding subscription ₹ 5,300.
3. Life membership fees are to capitalize.
Solution:
In the books of K.B.P. Engineering College, Nashik

Balance Sheet as of 31st March 2019

Working Notes:
1. Life membership fees are to be capitalized, which means add the entire amount to the capital fund.

2. 50% of Donations of ₹ 7,00,000 i.e., ₹ 3,50,000 is to be added to the Building Fund, and the remaining amount of donation i.e., ₹ 3,50,000 is credited to Income and Expenditure A/c.

3. The depreciation on Fixed assets is calculated by using the following formula:
Depreciation = Opening balance + Purchases – Closing value
∴ Depreciation on Books = 6,00,000 + 61,000 – 6,00,000
= 6,61,000 – 6,00,000
= ₹ 61,000
∴ Depreciation on Furniture = 3,19,000 + 51,000 – 3,00,000
= 3,70,000 – 3,00,000
= ₹ 70,000

4. Fixed deposit: Opening balance given = ₹ 9,10,000
Fixed deposit (31-03-2019) = ₹ 8,50,000
(Newly purchased)
∴ Total fixed deposits = ₹ 17,50,000

5. Admission Fees ₹ 60,000 are recorded on the credit side of Income and Expenditure A/c because it is taken as Revenue income.

Question 11.
Account of a School
From the following Balance Sheet and Receipts and Payments Account of “New English School”, Barshi, prepare Income and Expenditure Account for the year ending 31 – 03 – 2020 and a Balance Sheet as on that date.


Additional Information:
1. Outstanding salary of ₹ 9,000.
2. Outstanding tuition fees ₹ 15,000.
3. Depreciate library books by ₹ 9,000 and Furniture by ₹ 10,000.
Solution:
In the books of New English School, Barshi

Balance Sheet as of 31st March 2020

Working Notes:
1. Donation (Capital) is added to the Capital fund.
2. Government Grant ₹ 1,20,000 is recorded on the credit side of Income & Expenditure A/c because it is the revenue income of the organization.
3. Outstanding tuition fees ₹ 15,000 and outstanding salary ₹ 9,000 are added to the respective head of Account and then they are shown separately on the Assets side and Liabilities side of the Balance Sheet respectively.

Question 12.
Account of a Library
Following is the Receipts Payments Account of “Dhananjay Library”, Mumbai for the year ending 31-03-2020.

You are required to prepare an Income and Expenditure Account for the year ended 31-03-2020 and a Balance Sheet as of that day.
The following information is also made available to you.
1. On 31 -03-2019, the library had the following Assets also; Books ₹ 50,000, Furniture ₹ 6,500, and Machinery of ₹ 30,000.
2. Subscription received in advance amounted to ₹ 500.
3. Outstanding salaries ₹ 1300 and Rent ₹ 950.
4. 50% of the admission fees should be capitalized.
5. Furniture to be depreciated at 10% p.a.
6. Library books were purchased on 1st April 2019 charge depreciation at 10% p.a.
7. The Investments were purchased on 01-04-2019 and they carry interest at 20% p.a.
Solution:
In the books of Dhananjay Library, Mumbai

Balance Sheet as of 31st March 2020

Working Notes:
1. Opening Balance Sheet is prepared to find out opening capital fund:
Balance Sheet as of 31st March 2019

2. Outstanding expenses of the previous year, paid in the current year so no entry for outstanding expenses (2018-19)

3. Interest on Investment @ 20% on ₹ 6,000 = ₹ 1,200
Interest on Investment received = ₹ 900
Outstanding interest on investment = ₹ 300

4. Depreciation on library books at 10% p.a.
On opening balance of ₹ 50,000 (for whole year) = ₹ 5,000
On purchases on 01-04-2019 (for whole year) = ₹ 500
Total Depreciation = ₹ 5,500

5. Subscriptions received in advance ₹ 500 is deducted from subscription received on the credit side of Income and Expenditure A/c and then subscription received in advance is shown separately on the Liabilities side of Balance Sheet.

6. Outstanding salaries and outstanding rent are added to the respective head of Account on the debit side of the Income & Expenditure Account and both the outstanding items are recorded on the Liabilities side of the Balance Sheet.

Question 13.
Outstanding Expenses and Prepaid Expenses
From the following information supplied to you, prepare Income and Expenditure Account for the year ending 31-03-2020 and Balance Sheet as on that date for “Morya Sports Club”, Thane.
Balance Sheet as on 01-04-2019


Adjustments:
1. Subscription received includes ₹ 3,000 for 2018-19 and outstanding subscription for 2019-20 was ₹ 14,000.
2. On 31-03-2020, the Prepaid insurance premium was ₹ 2,500.
3. Depreciate Furniture by ₹ 3,000.
4. Locker rent outstanding for 2019-20 is ₹ 400.
Answer:
In the books of ‘Morya Sports Club’ Thane

Balance Sheet as of 31st March 2020

Working Notes:
1. Outstanding subscription (2018-19) ₹ 8,000 given in b/s against that ₹ 3,000 received in 2019-20.
Means still receivable subscription = ₹ 5,000 (8,000 – 3,000).

2. Prepaid insurance premium (2018-19) ₹ 2,000 is for the current year. Therefore, in the current year’s insurance premium, ₹ 2,000 is to be added and then subtract the current year’s prepaid insurance premium.

3. Outstanding salary of (2018-19), ₹ 4,000 of the previous year is to be subtracted from current year’s salary.

4. Total amount of donations and entrance fees are to be capitalized so add the entire amount of both the items to Capital fund.

5. Outstanding locker’s rent (2018-19) ₹ 500 is given in the Balance Sheet. It is to be subtracted from the current year’s locker’s rent and then adds the current year’s outstanding locker rent.

Question 14.
Charitable Hospital
Following information has been provided by “Vivekanand Charitable Hospital”, Latur. You are required to prepare an Income and Expenditure Account for the year ending 31-03-2019 and the Balance Sheet as of that date.


Adjustments:
1. On 31-03-2019 stock of drugs was valued at ₹ 22,000.
2. Depreciation on Building at 5% p.a. and on Ambulance ₹ 30,000.
3. Life membership fees are to be capitalized.
Answer:
In the books of Vivekanand Charitable Hospital, Latur

Balance Sheet as of 31st March 2019

Working Notes:
1. Purchase of drugs ₹ 2,00,000 includes ₹ 40,000 of 2017-18 and in the Balance Sheet of 2017-18, the outstanding bill of drugs is ₹ 50,000 given. So, ₹ 10,000 is still outstanding.

2. Consumption of drugs:
Opening stock (2017-18) = ₹ 42,000
Add: Purchase of drugs = ₹ 1,60,000
Total = 1,60,000 + 42,000 = ₹ 2,02,000
Less: Closing stock of drugs = ₹ 22,000
Consumption of drugs = 1,80,000

Class 12 Commerce BK Textbook Solutions Digest

• 12th Bk Chapter 1 Practical Problems
• 12th Bk Chapter 2 Practical Problems
• 12th Bk Chapter 3 Practical Problems
• 12th Bk Chapter 4 Practical Problems
• 12th Bk Chapter 5 Practical Problems
• 12th Bk Chapter 6 Practical Problems
• 12th Bk Chapter 7 Practical Problems
• 12th Bk Chapter 8 Practical Problems
• 12th Bk Chapter 9 Practical Problems
• 12th Bk Chapter 10 Practical Problems

Reconstitution of Partnership (Retirement of Partner) 12th BK Commerce Chapter 4 Solutions Maharashtra Board

Balbharti Maharashtra State Board 12th Commerce Book Keeping & Accountancy Solutions Chapter 4 Reconstitution of Partnership (Retirement of Partner) Textbook Exercise Questions and Answers.

Class 12 Commerce BK Chapter 4 Exercise Solutions

A. Select the most appropriate alternatives from those given below and rewrite the sentence.

Question 1.
The profit or loss from revaluation on retirement of partner is shared by ______________
(a) the remaining partners
(b) all the partners
(c) only retiring partner
(d) bank
Answer:
(b) all the partners

Question 2.
Descrease in the value of assets should be ______________ to Profit and Loss Adjustment Account.
(a) debited
(b) credited
(c) added
(d) equal
Answer:
(a) debited

Question 3.
The balance of the capital account of retired partner is transferred to his ______________ account if it is not paid.
(a) loan
(b) personal
(c) current
(d) son’s
Answer:
(a) loan

Question 4.
Gain ratio = ______________ Ratio less Old Ratio.
(a) New
(b) Equal
(c) Capital
(d) Sacrifice
Answer:
(a) New

Question 5.
New Ratio = Old Ratio + ______________ Ratio.
(a) Gain
(b) Capital
(c) Sacrifice
(d) Current
Answer:
(a) Gain

Question 6.
Apte, Bhate and Chitale are sharing 1/2, 3/10, and 1/5 if Apte retire their new ratio will be ______________
(a) 5 : 2
(b) 3 : 2
(c) 5 : 3
(d) 2 : 5
Answer:
(b) 3 : 2

B. Write the word, term, phrase, which can substitute each of the following statement.

Question 1.
Credit balance of Profit and Loss Adjustment Account.
Answer:
Profit on Revaluation Accounts

Question 2.
The ratio in which the continuing partners are benefited due to retirement of partner.
Answer:
Gain Ratio

Question 3.
Debit balance of Revaluation Account.
Answer:
Loss on Revaluation

Question 4.
The ratio which is obtained by deducting Old Ratio from New Ratio.
Answer:
Gain Ratio

Question 5.
Money value of business reputation earned by the firm over a number of years.
Answer:
Goodwill

Question 6.
Partner’s Account where Loss or Profit on revaluation is transferred.
Answer:
Capital/Current Account

C. State whether the following statement are true or false with reasons.

Question 1.
Gain ratio means New ratio minus Old ratio.
Answer:
This statement is True.
As per definition, profit sharing ratio which is acquired by the continuing partners from the retiring partner is called gain ratio. If gain ratio added to old ratio we will get New ratio. It means New ratio = Old ratio + Gain ratio by interchanging the terms, we will get Gain ratio = New ratio – Old ratio.

Question 2.
Retiring partner’s share in profit up to the date of his retirement will be debited to Profit and Loss Suspense Account.
Answer:
This statement is True.
If a partner retires from the firm during the accounting year, the profit or loss for the period from the date of last balance sheet to the date of retirement is calculated on the basis of last year’s profit or average profit and it is credited to retiring partner’s capital A/c and for time being it debited to new account called Profit and Loss Expense A/c. This is because final accounts cannot be prepared on any date during the accounting year.

Question 3.
On retirement of a partner, sacrifice ratio is considered.
Answer:
This statement is False.
On retirement of a partner, his share is acquired by continuing partners in certain proportion and it is nothing but gain for them. Therefore, on retirement of a partner instead of sacrifice ratio gain ratio is considered.

Question 4.
Retiring partner is called an outgoing partner.
Answer:
This statement is True.
When a person retires from the firm due to health issues, financial issues or personal reasons then it is known as person retires from the business and for the business, he is an outgoing partner.

Question 5.
On retirement of a partner, remaining partner will share the goodwill in their profit sharing ratio.
Answer:
This statement is False.
On retirement of a partner, after giving retiring, partner’s share in goodwill and if goodwill is written off, then remaining partners will adjust the goodwill in their new profit sharing ratio. (If raised to full extent and written off)

Question 6.
Retiring partner is not entitled to share in general reserve and accumulated profit.
Answer:
This statement is False.
General reserve and accumulated profit are created out of past undistributed profit, such profits are the outcome of hard work of all the partners including retiring partner. Hence, retiring partner’s has right to share general reserve and accumulated profit. He is therefore, entitled to get share in general reserve and accumlated profit.

D. Fill in the blanks and rewrite the following sentence:

Question 1.
New Ratio (less) ______________ = Gain ratio.
Answer:
Old ratio

Question 2.
Retiring partner’s share of goodwill is ______________ to remaining Partner’s Capital Account.
Answer:
debited

Question 3.
Revaluation A/c is also known as ______________ Account.
Answer:
Profit and Loss Adjustment

Question 4.
On retirement, the balance at a Current Account of a partner is transferred to his ______________ Account.
Answer:
Capital

Question 5.
A proportion in which the continuing partners get the share of retiring partner is known as ______________ Ratio.
Answer:
Gain

E. Answer in one sentence.

Question 1.
What is meant by Retirement of a Partner?
Answer:
Retirement of a partner refers to a process in which a partner leaves the firm or severes his relations with other partners on account of his old age, continued ill health, loss of interest in the firm, misunderstanding amongst the partners, etc.

Question 2.
What is Benefit Ratio?
Answer:
Profit sharing ratio which is acquired by the continuing partners on account of retirement or death of a partner is called Benefit Ratio or Gain Ratio.

Question 3.
What is New Ratio?
Answer:
The ratio in which profits or losses are shared by the continuing partners after retirement of a partner is called New Profit Sharing Ratio.

Question 4.
How is the amount due to the retiring partner settled?
Answer:
The amount due to a retiring partner is settled as per the terms of partnership agreement or otherwise mutually agreed upon either in lumpsum or in instalments.

Question 5.
How is Gain Ratio calculated?
Answer:
Gain ratio is calculated at the time of retirement of a partner by deducting old ratio from new ratio.

Question 6.
Why is retiring partner’s capital account credited with goodwill?
Answer:
Goodwill is an intangible assets or benefits accrued to the firm and its benefits are transferred to retiring partner’s Capital A/c by giving credit.

Practical Problems

Question 1.
The Balance Sheet of Mr Mama, Kaka and Mr Baba who shared profits and losses as 4 : 3 : 3 respectively.
Balance Sheet as on 31st March, 2018

Kaka retires on 1st April, 2018 on the following terms.
1. The share of Kaka in Goodwill of the firm is valued at ₹ 2,700.
2. Furniture to be depreciated by 10% and Motor car by 12.5%.
3. Live Stock to be appreciated by 10% and Plant by 20%.
4. A provision of ₹ 2,000 to be made for a claim of compensation.
5. R.D.D. is no longer necessary.
6. The amount payable to Kaka should be transferred to his Loan A/c.
Prepare Profit and Loss Adjustment A/c, Partners’ Capital A/cs and Balance Sheet of the new firm.
Solution:
In the books of Partnership Firm

Balance Sheet as on 1st April, 2018


Working Notes:
1. R.D.D. is no longer require means it is a gain for firm.
2. A provision of ₹ 2,000 to be made for a claim of compensation, ₹ 2,000 is recorded on debit side of Profit and Loss Adjustments A/c and then on liability side of Balance Sheet.
3. Total payable amount to Kaka ₹ 20,175 is recorded as Kaka’s Loan A/c.

Question 2.
The Balance Sheet of Ram, Shyam and Ghanshyam sharing profits and losses in 3 : 2 : 1 respectively and their position on 31-3-19 were as follows:
Balance Sheet as on 31st March, 2019

Ghanshyam retired on 1st April, 2019 on the following terms:
1. Building and Investment to be appreciated by 5% and 10% respectively.
2. Provision for Doubtful Debts to be created at 5% on Debtors.
3. The provision of ₹ 3,000 be made in respect of Outstanding Salary.
4. Goodwill of the firm is valued at ₹ 90,000 and partners decide that goodwill should be written back.
5. The amount payable to the retiring partner be transferred to his Loan A/c.
Prepare: Profit and Loss Adjustment A/c, Partners’ Capital A/c, Balance Sheet of new firm.
Solution:
In the books of Partnership Firm


Balance Sheet as on 1st April, 2019

Working Notes:
1. Provision of ₹ 3,000 for outstanding salary is recorded on debit side of Profit and Loss Adjustment A/c and then on the Liability side of Balance Sheet.
2. Goodwill of the firm is valued at ₹ 90,000 and share of retiring partner in it is ₹ 15,000 (\(\frac{1}{6}\)th part) and it is to be written back means it is to be shared by remaining partners in their profit-loss ratio.

Question 3.
The Balance Sheet of the Anu, Renu and Dinu is as follows, and the partners are sharing profits and losses in the proportion of 2 : 2 : 1 respectively.
Balance Sheet as on 31st March, 2019

Dinu retires from the firms on 1st April, 2019 on the following terms:
1. The assets are to be revalued as : freehold property ₹ 30,000, Machinery ₹ 5,000, Furniture ₹ 12,000, All debtors are good.
2. Goodwill of the firm be valued at thrice the average profit for preceding five years. Profits of the firm for the year.
2014-15 – ₹ 14,500
2015-16 – ₹ 10,500
2016-17 – ₹ 10,000
2017-18 – ₹ 16,000
2018-19 – ₹ 10,000
3. Dinu should be paid ₹ 3,000 by cheque.
4. The Balance of Dinu’s Capital A/c should be kept in the business as loan.
Prepare: Profit and Loss Adjustment A/c, Capital Accounts of Partners, Balance Sheet of the new firm.
Solution:
In the books of Partnership Firm

Balance Sheet as on 1st April 2019

Working Notes:
1. Average profit = \(\frac{\text { Total Profit }}{\text { No. of years }}\)
= \(\frac{1000+10,500+10,000+16,000+10,000}{5}\)
= \(\frac{47,500}{5}\)
= ₹ 9,500
Goodwill = Avg. profit × No. of years
= 9,500 × 3 years
= ₹ 28,500
Goodwill value given in balance sheet = ₹ 30,000
New value arrived at = ₹ 28,500
Loss due to revaluation = ₹ 1,500
To be recorded in P & L Adj. A/c – Dr. Side.
In asset side of Balance sheet, write ₹ 28,500 for Goodwill.

2. Balance of Bank A/c = Opening Balance – Cheque given to Dinu
= 5,000 – 3,000
= ₹ 2,000

Question 4.
Rohan, Rohit and Sachin are partners in a firm sharing profits and losses in the proportion 3 : 1 : 1 respectively. Their balance sheet as on 31st March, 2018 is as shown below:
Balance Sheet as on 31st March, 2018

On 1st April, 2018 Sachin retired and the following adjustments have been agreed upon:
1. Goodwill was revalued on ₹ 50,000.
2. Assets and Liabilities were revalued as follows:
Debtors ₹ 50,000, Live stock ₹ 45,000, Building ₹ 1,25,000, Plant and Machinery ₹ 30,000, Motor truck ₹ 95,000 and Creditors ₹ 30,000.
3. Rohan and Rohit contributed additional capital through Net Banking of ₹ 50,000 and ₹ 25,000 respectively.
4. Balance of Sachin’s Capital Account is transferred to his Loan Account.
Give Journal entries in the books of new firm.
Solution:
Journal entries in the books of Partnership Firm

Working Notes:
1. Calculation of Profit on Revaluation of Assets and Liabilities.

Question 5.
Shah, Lodha and Dhole were partners sharing profits and losses in the ratio of 4 : 3 : 3. Their Balance Sheet as on 31st March, 2019 is given below:
Balance Sheet as on 31st March, 2019

On 1st April, 2019 Mr. Lodha retired from the firm on the following terms:
1. Goodwill is to be valued at an average profits and losses of the last five years which were as follows:
Year – Profit/Loss
2015 – ₹ 35,000
2016 – ₹ 20,000
2017 – ₹ 30,000
2018 – ₹ 20,000
2019 – ₹ 25,000
2. Computers to be depreciated by 10%.
3. Furniture to be revalued at ₹ 27,500.
4. Vehicles appreciated by 20%.
5. R.D.D. was no longer necessary.
6. Shah and Dhole will share the future profits and losses in the ratio of 2 : 1.
7. It was decided that goodwill should not appear in the books of a new firm and amount payable to Lodha is to be transferred to his Loan A/c.
Prepare: Profit and Loss Adjustment A/c, Partners’ Capital Accounts, Balance Sheet of new firm.
Solution:
In the books of Partnership Firm

Balance Sheet as on 1st April 2019

Working Note:
Average profit = \(\frac{\text { Total Profit }}{\text { No. of Years }}\)
= \(\frac{35,000+20,000+30,000+20,000+25,000}{5}\)
= \(\frac{1,30,000}{5}\)
= ₹ 26,000
∴ Goodwill = ₹ 26,000
Goodwill should not appear in the books of accounts.
Therefore, ₹ 26,000 credited in Partners’ Capital Account in partners’ old profit and loss ratio. ₹ 26,000 will be debited in Partners’ Capital Account in partners’ new profit-loss ratio.

Class 12 Commerce BK Textbook Solutions Digest

• 12th Bk Chapter 1 Practical Problems
• 12th Bk Chapter 2 Practical Problems
• 12th Bk Chapter 3 Practical Problems
• 12th Bk Chapter 4 Practical Problems
• 12th Bk Chapter 5 Practical Problems
• 12th Bk Chapter 6 Practical Problems
• 12th Bk Chapter 7 Practical Problems
• 12th Bk Chapter 8 Practical Problems
• 12th Bk Chapter 9 Practical Problems
• 12th Bk Chapter 10 Practical Problems

Psychology Class 12 Chapter 5 Emotions Question Answers Maharashtra Board

Balbharti Maharashtra State Board Class 12 Psychology Solutions Chapter 5 Emotions Textbook Exercise Questions and Answers.

Emotions Class 12 Psychology Chapter 5 Questions and Answers

1. Choose the correct option and complete the following statements.

Question 1.
…………… is a combination of bodily arousal, expressive behavior, thoughts, and feelings.
(a) Response
(b) Reaction
(c) Emotions
Answer:
(c) Emotions

Question 2.
According to James Lange we first experience ……………….. then emotions.
(a) physical arousal
(b) feelings
(c) thoughts
Answer:
(a) physical arousal

Question 3.
Emotion is used as a …………….. to control others.
(a) weapon
(b) measure
(c) opportunity
Answer:
(a) weapon

Question 4.
When you allow another person to exploit you, you are a victim of ………….. abuse.
(a) physical
(b) emotional
(c) social
Answer:
(b) emotional

Question 5.
Exercising releases ………………… which makes you feel good as a stress buster.
(a) endorphins
(b) thyroxin
(c) insulin
Answer:
(a) endorphins

2. Identify the odd items from the following and write a suitable reason for your choice

Question 1.
admiration, disgust, acceptance, trust

Question 2.
kicking, ignoring, shoving, screaming

Question 3.
Reassess, React, Respond, Relax

Question 4.
meditation, social work, compassion, engage in hobbies

3. Match the pair.

Question 1.

Group A	Group B
(1) Happiness	(a) basic emotion
(2) Paul Ekman	(b) fight and flight
(3) Anger	(c) surprise
(4) Fear	(d) sadness
(5) Grief	(e) triggers
(6) Anger management technique	(f) powerful emotion

Answer:

Group A	Group B
(1) Happiness	(c) surprise
(2) Paul Ekman	(a) basic emotion
(3) Anger	(f) powerful emotion
(4) Fear	(b) fight and flight
(5) Grief	(d) sadness
(6) Anger management technique	(e) triggers

4. State whether the following statements are true or false.

Question 1.
Emotional well-being is not easily observable.
Answer:
True

Question 2.
Positive emotions energise you.
Answer:
True

Question 3.
You should feel guilty for standing up for yourself.
Answer:
false

Question 4.
Anger is a basic negative emotion.
Answer:
True

5. Answer the following questions in 35 – 40 words each.

Question 1.
Explain the term facial feedback hypothesis.
Answer:
According to the facial feedback hypothesis, our facial expressions provide feedback to our brain about our emotions. Facial expressions are not only the result of our emotions, e.g., smiling in happiness, but they are also capable of influencing emotions, e.g. laughter can actually make us feel happier. The same might hold true for other emotions as well. In the 1840’s, William James presented the idea that awareness of our bodily experiences is the basis of emotion.

Question 2.
When does an individual face social rejection?
Answer:
Social rejection occurs when an individual is deliberately excluded from a social relationship or interaction. This can be done by a person or a group. It includes rejection of the person by family/ peers/ colleagues or even in intimate relationships. Rejection may be active, i.e., by ridiculing, bullying, etc., or passive, i.e., ‘silent treatment’. Social rejection may be faced due to individual differences e.g., attractiveness, shyness or due to intergroup exclusion on the basis of prejudice, e.g., in case of Dalits or ethnic minorities.

Question 3.
With the help of an example write the non-verbal triggers of anger.
Answer:
Anger is a common emotion that everybody experiences in life from time to time. Anger is a normal response to some real or perceived threat. It is a protective emotion that help us to defend ourselves against physical or psychological harm.

Triggers of Anger refer to any event that signals the brain to activate the body’s anger system. The triggers of anger may be (i) verbal, for e.g., being blamed, disrespected or abused (ii) non¬verbal, for e.g., being ignored unappreciated or rejected, (iii) physical such as physical threats, sexual/ physical assault, etc.

Non-verbal triggers of anger are feelings of being neglected, disregarded, disappointed, unloved or frequently spurned. It is expressed through gestures such as pointing a finger, shrugging the shoulders; by facial expressions such as sneering, frowning and also by behaviours such as groaning/sighing/whining or speaking in a mocking tone.

There are three factors involved in the experience of anger : A trigger (causes of anger) → individual’s personality → particular interpretation of that situation.

Question 4.
What are the aspects of emotional well-being?
Answer:
Emotional well-being means managing our emotions, both positive and negative ones, so that we can lead a healthy and productive life. It is the absence of negative affect as well as general satisfaction with life. A person who experiences emotional well-being is positively engaged with the world.
The aspects of emotional well-being are at three levels viz. physical, emotional and social.

1. Physical level, i.e., well balanced diet, exercise.
2. Emotional level, i.e., practise mindfulness, raising levels of motivation and optimism.
3. Social level, i.e., engaging in prosocial behaviour, meaningful relationships.

6. Compare and Contrast

Question 1.
Happiness and Sadness

Question 2.
James Lange theory and Cannon Bard’s Theory

7. Write short notes on the following in 50 – 60 words each.

Question 1.
Measures of dealing with Emotional Abuse
Answer:
Emotional abuse is any kind of abuse that is emotional rather than physical in nature. It occurs when one person subjects or exposes another person to intentionally harmful behaviour that may result in anxiety, depression and psychological trauma to the victim.
The types of emotional abuse may be-

1. verbal abuse such as blaming, insulting, labeling, threatening, swearing, etc.
2. non verbal abuse such as ignoring, rejection, bullying, spying, etc.

The most important technique is to break the silence and stand up for yourself.

1. Accept that emotional abuse is not because of you, i.e., don’t justify the actions of the abuser.
2. Respond assertively to the abuser but seek distance from him.
3. Give yourself time to heal.
4. Prioritize your self-care, e.g., eating right, exercise, etc.
5. Mobilise support from family and friends. If needed, seek professional help.

Question 2.
Plutchiks’s Model of Emotions
Answer:

Robert Plutchik presented the wheel of emotions,

1. there are 8 basic emotions viz. joy, trust, fear, surprise, sadness, anticipation, anger and disgust.
2. each primary emotion has its polar opposite such as fear is opposite of anger.
3. primary emotions combine to produce complex emotions, for e.g., love (complex) is a combination of joy and trust.
4. intensity of emotions increases as we move toward the centre and decreases as we move outward. For e.g., apprehension (weak) → fear (basic) → terror (strongest).

This model is important from the perspective of emotional literacy, i.e., understanding emotional levels, complexity and change as well as appropriate emotional labelling

Question 3.
Anger -A powerful emotion
Answer:
Anger is a common emotion that everybody experiences in life from time to time. Anger is a normal response to some threat. It is a protective emotion that helps us to defend ourselves against physical/ psychological harm. However, anger may also be unwanted, irrational and destructive. When we experience anger, our amygdala goes into action and overrides the cerebral cortex which is in control of thinking and evaluation. Triggers of anger refer to any event that signals the brain to activate the body’s anger system. The triggers may be (i) verbal, for e.g., being blamed, disrespected or abused (ii) non-verbal, for e.g., being ignored unappreciated or rejected, (iii) physical such as physical threats, sexual/ physical assault, etc.

There are three factors involved in the experience of anger: A trigger (causes of anger) → individual’s personality → particular interpretation of that situation. As the experience of anger is subjective, it can be controlled too. If we understand the triggers of anger, we can anticipate potential anger episodes and provide an intentional/ acceptable response such as it may energize us towards solving problems. As anger is a powerful emotion, it must be kept in check to avoid it’s destructive out comes.

Question 4.
Managing Emotions
Answer:
The word emotion is derived from the latin word ‘emovere’, which means to stir up or to move. An emotion refers to an involuntary, aroused state of an organism involving physical, cognitive and behavioural components. It is described as a combination of bodily arousal, e.g., increased heartrate, thoughts and feelings, i.e. emotional tone and expressive behaviour, i.e., facial expression.

Managing of emotions is an important life skill. Managing emotions can be defined as, ‘the ability to be open to feelings and modulate them in oneself and in others, so as to promote personal understanding and growth. It is the ability to be aware and constructively handle both positive and challenging emotions.

Sometimes, our emotions hijack our thinking due to which we act impulsively. This is because the limbic system (emotional section) developed before the prefrontal cortex (thinking part) and is hence, an extremely strong part of the brain. Emotional management is an art as it is a form of expression as well as a science as it is a skill that needs to be learnt and practiced If a person ignores of suppresses his/her emotions it leads to anxiety. The best way of manage emotions is to acknowledge the emotions, find out what is the cause of that emotion in you, chose how to respond in that situation.

Question 5.
Benefits of Emotional Well-being
Answer:
Emotional well-being means managing our emotions, both positive and negative ones, so that we can lead a healthy and productive life.
Persons who have high emotional well-being experience benefits such as- (i) better able to deal with stress (ii) better self-regulation (iii) increased productivity in tasks undertaken (iv) increased creativity (v) life satisfaction due to meaningful activities and relationship.

1. Coping with stress – It helps to deal with stress using healthy methods such as exercise, social support, etc.
2. Better self-regulation – It enables the person to label how they feel and accept negative emotions life fear, anger, etc.
3. Increases productivity in tasks undertaken – The ability to focus is enhanced, the person feels positive and energized.
4. Increases creativity – The person indulges in divergent thinking, shows curiosity is open to new experiences.
5. Life satisfaction – The individual is able to have meaningful interactions and relationships, show empathy, altruism and engage in activities like volunteer work.

8. Answer the following 50 – 60 words.

Question 1.
Using the 3 R model of Anger Management present a case study of your own experience.
Answer:
Anger management is an intervention programme to prevent anger from turning into a habit or obstacle. It enables the person to create an awareness of and responsibility for his/her emotions. This involves two aspects (i) managing one’s own anger (ii) learning to respond effectively to anger in others.

The 3 R’s in anger management a Relax, Reassess and Respond.
1. Relaxation – Relaxation and connection with the inner self helps to enhance thinking and concentration so that we ‘respond’ rather than ‘react’ impulsively.
2. Reassess – This helps the person to revisit the situation objectively. It involves

• taking complete responsibility for your emotion
• developing empathy for the person you perceive has wronged you
• conduct a reality check e.g., is your anger justified given the facts of what happened.

The feeling’s thermometer helps to focus on the extent of anger we are experiencing and helps in the process of reassessment.

3. Respond – It entails re-engaging with the other person/situation. Responding involves

• consulting a trustworthy person to get another perspective
• engage in talks with the other party in a calm respectful manner with a willingness to sort out the situation.
• active listening and assertive speaking – Allow the person to express their viewpoint. However, we should stand up for our feeling while exhibiting the same for the other person. The right approach is a practical, positive communication style.
• cage your rage i.e. establish boundaries and moderate your anger – We must guard against escalation of our own anger which may lead us to provoke the other person. Moderation of anger and establishing clear boundaries of interaction with each other is essential.

CASE STUDY – 1 was in the passenger seat and my brother was driving the car. Suddenly, a cyclist swerved right in front after he had failed to observe the red light. This led me to get enraged at this uncalled-for action. Using the 3R technique. I tried to breathe for a few seconds to give me recovery time, i.e. Relaxation. I revisited the situation – Is my anger justified? Was it a genuine error? Is the cyclist hurt? Did the incident cause injury to us or damage to the car.? Is the anger worth my time/effort? Reassess. I allowed my elder brother to handle the situation but also assertively cautioned the teenage cyclist about the dangers of riding in a rash manner, i.e. Respond.

Question 2.
How does the brain work when angry?
Answer:
Anger is a common emotion that everybody experiences in life from time to time. Anger is a normal response to some threat. It is a protective emotion that help us to defend ourselves against physical/ psychological harm. However, anger may also be unwanted, irrational and destructive. When we experience anger, our amygdala goes into action and overrides the cerebral cortex which is in control of thinking and evaluation.

Triggers of anger refer to any event that signals the brain to activate the body’s anger system. The triggers may be (i) verbal, for e.g., being blamed, disrespected or abused (ii) non-verbal, for e.g., being ignored unappreciated or rejected, (iii) physical such as physical threats, sexual/ physical assault, etc.

There are three factors involved in the experience of anger: A trigger (causes of anger) → individual’s personality → particular interpretation of that situation. As the experience of anger is subjective, it can be controlled too. If we understand the triggers of anger, we can anticipate potential anger episodes and provide an intentional / acceptable response.

The emotional center of the brain is the Limbic system and is more primitive than the cerebral cortex. It is located in the lower section of the brain. Hence when a person is experiencing and expressing anger, he or she is not using the cortex (thinking section) but primarily functioning from the limbic system. In the limbic system, a small structure called Amygdala which is a storehouse of emotional memories plays an important role in the emotional outbursts. The data coming in from the world around us passes through the amygdala where the decision is made whether to send the data to the limbic or cortex area of the brain.

If the incoming data triggers enough of an emotional charge, the amygdala can override the cortex, which means the data will be sent to the limbic system causing the person to react using the lower part of the brain. During an overriding event, the amygdala goes into action without much regard for the consequences (since this area of the brain is not involved in judging, thinking, or evaluating).

Eg. You are waiting patiently in the queue at the bank, a person comes and cuts the line and moves ahead of you, you scream at them and ask them to go back. On an average, it can take 20 minutes for a person who has experienced an angry state of arousal to calm, to move from functioning from the emotional area to the thinking area of the brain.

Question 3.
After having realised you are emotionally abused by your best friend, write the steps you will take to deal with it.
Answer:
Emotional abuse is any kind of abuse that is emotional rather than physical in nature. It occurs when one person subjects or exposes another person to intentionally harmful behaviour that may result in anxiety, depression and psychological trauma.
The types of emotional abuse may be (i) verbal abuse such as blaming, insulting, labeling, threatening, swearing, etc. (ii) non verbal abuse such as ignoring, rejection, bullying, spying, etc. Some of the techniques to deal with emotional abuse are-

1. Accept that emotional abuse is not because of you i.e. don’t justify the actions of the abuser.
2. Respond assertively to the abuser but seek distance from him/her.
3. Give yourself time to heal.
4. Prioritize your self-care, e.g., eating right, exercise, etc.
5. Mobilise support from family and friends. If needed, seek professional help.

If I realize that I have been emotionally abused by my good friend I will adopt the following steps-

1. Disengage from the friendship and set personal boundaries
2. Understand that I am not the cause of abuse and so respond assertively to the abuser
3. Practice self care and give myself time to heal
4. If necessary seek guidance from other friends or my family / teachers.

9. Analyse the situations presented below and
a. Write the Emotion/s you experience.
b. What will be your response to this situation?

Question 1.
Anish was scolded by his boss. He came home and in a fit of rage hit his son. You are Anish’s friend who witnessed this outburst.
Answer:
I will feel anger as well as disgusted on witnessing this outbust. I will try to calm Anish and make him realise the harm that his anger can cause.

Question 2.
You helped your friend with study notes during his illness. But when your friend got better he did not respond nor show any sense of appreciation.
Answer:
I will feel disappointment as well as sadness. I will meet the friend and tell him that his lack of courtesy has hurt me.

Question 3.
Though you are a good friend of Anushka, she has not invited you to her new year’s party.
Answer:
I will feel disappointed and hurt. I will (if possible) try to find out if the action was deliberate or an oversight.

Question 4.
It’s your Birthday and you wake up that morning to find yourself surrounded with beautiful gifts.
Answer:
I will obviously feel immense happiness.

Question 5.
You have had a hectic day at college when you come home you find the door locked. You forgot your keys at home that day and your parents have not informed you of their plans.
Answer:
I will be angry at my at myself and my parents also. But since I forgot the keys, I will take full responsibility and wait it out some family member returns.

Question 6.
You have planned a surprise day out for your best friend and she tells you she is not interested and has other plans
Answer:
I will be a little sad and disappointed but will accept my friend’s decision sportingly.

Class 12 Psychology Chapter 5 Emotions Intext Questions and Answers

ACTIVITIES (Textbook Page. No. 44)

Activity 1

THINK AND ANALYSE
Think of the following situations and note down what will be the experience of each person in that situation.

1. It’s Mira’s Std. 12th result today. She comes to know that she has topped in the college.
2. Rahul’s mother passed away just few days before his 18th birthday.
3. Suchita was ridiculed by her classmate for wearing old fashioned clothes.
4. Yash had a fight at home because his parents were not allowing him to go for a late night party.

Answer:

1. Mira will experience happiness due to her success.
2. Rahul will experience grief and loneliness.
3. Suchita will experience a sense of helplessness and shame.
4. Yash will be angry with his parents and feel they are doing him an injustice.

Activity 2 (Textbook Page. No. 46)

Observe each figure carefully and write the emotion that corresponds to each in the blank spaces provided below. Can you identify which among these is a positive and negative emotion?

Answer:
(A) = Surprise (positive), (B) = Anger (negative), (C) = Disgust (negative), (D) = Sadness (negative),
(E) = Joy (positive), (F) = Fear (negative).

Activity 3 (Textbook Page. No. 46, 47)

Check whether you can name the emotions accurately from the following examples-

1. It’s Riya’s 18th birthday today and her friends have given her a surprise party.
2. Rohan recently had a break up with his long time girlfriend with whom he was in love deeply.
3. Sameer had a disagreement with his best friend over where to go for a picnic and the situation got heated up.
4. Sumi has come to know that she has failed in her exam and she is figuring out how she will convey this to her parents.
5. Ashmeet suddenly saw his school best friend across the street after many years.
6. Amy opened today’s newspaper and read the news of a 5 year old getting gang raped.

Answer:

1. Happiness
2. Surprise
3. Anger
4. Fear
5. Surprise
6. Disgust

Activity 4 (Textbook Page. No. 48)

THINK, REFLECT, ANALYSE AND DISCUSS
State what will you feel and how will /did you behave in the given following situations:-

1. You are crossing the road and suddenly find a car breaking the signal and speeding up towards you.
2. You reach home and find the table laid with your favourite dish cooked by your mother.
3. You receive a phone call telling you that your best friend is undergoing an operation and needs blood.
4. Recall an incident in your childhood when you were insulted by an adult.

Answer:

1. I will feel angry but also afraid. I will jump out of the way
2. I will feel happy and surprised.
3. I will fear but feel concerned and be motivated to arrange for the blood.
4. Students are expected to answer this question by themselves.

Activity 5 (Textbook Page. No. 49)

THINK, ANALYSE AND ACT

You see a snake ….. with reference to the above given components fill the process with your interpretations, feelings and actions.
Answer:

Class 12 Psychology Textbook Solutions Digest 

• Psychology Class 12 Chapter 1 Question Answers
• Psychology Class 12 Chapter 2 Question Answers
• Psychology Class 12 Chapter 3 Question Answers
• Psychology Class 12 Chapter 4 Question Answers
• Psychology Class 12 Chapter 5 Question Answers
• Psychology Class 12 Chapter 6 Question Answers
• Psychology Class 12 Chapter 7 Question Answers
• Psychology Class 12 Chapter 8 Question Answers

Psychology Class 12 Chapter 2 Intelligence Question Answers Maharashtra Board

Balbharti Maharashtra State Board Class 12 Psychology Solutions Chapter 2 Intelligence Textbook Exercise Questions and Answers.

Intelligence Class 12 Psychology Chapter 2 Questions and Answers

1. Choose the correct option and complete the following statements.

Question 1.
……………………. has given formula of I.Q.
(a) Binet
(b) Stern
(c) Wechsler
Answer:
(b) Stern

Question 2.
…………………. has given the concepts of fluid intelligence and crystallized intelligence.
(a) Cattell
(b) Thorndike
(c) Salovey
Answer:
(a) Cattell

Question 3.
…………………. is an individual test of intelligence.
(a) Army Alpha Test
(b) Army Beta Test
(c) Block Building Test
Answer:
(c) Block Building Test

2. State whether the following statements are true or false.

Question 1.
Verbal tests of intelligence can be given easily to illiterate people.
Answer:
False

Question 2.
It is possible to increase emotional intelligence.
Answer:
True

Question 3.
There are certain limitations to Artificial Intelligence.
Answer:
True

Question 4.
Group tests of intelligence are less expensive.
Answer:
True

3. Answer the following in one sentence each.

Question 1.
What is meant by intelligence?
Answer:
David Wechsler defines intelligence as, “the aggregate or global capacity of an individual to act purposefully, to think rationally and to deal effectively with his environment.”

Question 2.
Who is considered as the father of intelligence test?
Answer:
Alfred Binet is considered as the father of intelligence tests.

Question 3.
What is meant by verbal tests of intelligence?
Answer:
Verbal tests of intelligence make use of words and numbers to measure intelligence and subjects respond verbally to the test items, for e.g., WAIS, Army Alpha Test, etc.

Question 4.
What is meant by individual test of intelligence?
Answer:
Individual tests of intelligence are tests which can be administered to a single person at a time, for e.g., Stanford Binet Scales, WAIS, Koh’s Block Design Test, etc.

4. Define / Explain the concepts in 25 – 30 words each.

Question 1.
Mental Age
Answer:
Alfred Binet introduced the concept of Mental Age. It is defined as the age at which the person successfully performs on all items of the test prepared for that age level. Mental Age need not correspond to Chronological Age. If Mental Age (MA) is the same as Chronological Age (CA), the person has average intelligence. For e.g., Sumit aged 10 years has successfully performed all items on the test for age 12. Hence, his Mental Age will be 12 years, i.e., he has above average intelligence.

Question 2.
Social Intelligence
Answer:
E.L. Thorndike proposed the term Social Intelligence. Howard Gardner included ‘interpersonal intelligence’in the Multiple Intelligences Theory. According to Karl Albrecht, ‘Social intelligence . is the ability to get along well with others and to get them to cooperate with oneself.’

A continued pattern of nourishing behaviour indicates a high level of social intelligence. Such persons are skilled at interacting with and understanding people around them. They respect and encourage others. They effectively comprehend social dynamics.

Question 3.
Emotional Intelligence
Answer:
The term Emotional Intelligence was used for the first time by John Mayer and Peter Salovey. The concept of emotional intelligence was popularized by Daniel Goleman. It is defined as “the ability to perceive and monitor one’s own and others emotions, to discriminate among them and to use this information to guide one’s thinking and actions.” Emotional Intelligence refers to a set of cognitive abilities such as perceiving emotions, using emotions to facilitate thought, understanding emotions and managing (regulating) emotions. Persons with high emotional intelligence tend to be emotionally stable, patient, optimistic, enthusiastic and calm.

5. Write short notes on the following.

Question 1.
Intelligence Quotient
Answer:
Intelligence is the highest attribute of human beings. Different psychologists have defined intelligence differently. Lewis Terman explains intelligence as, “an ability to think on an abstract level.”

David Wechsler defines intelligence as, “the aggregate or global capacity of an individual to act purposefully, to think rationally and to deal effectively with his environment.”

Intelligence Quotient refers to a measurement of intelligence.. In 1912, William Stern introduced the concept of intelligence quotient (IQ). Terman, refined the formula for calculating IQ, which is as stated below-
IQ = \(\frac {MA}{CA}\) × 100
Example: Ankush who is 10 years old has a Mental Age of 11 years. Let us calculate his IQ.
MA = 11 years CA = 10 years IQ = ?
IQ = \(\frac {MA}{CA}\) × 100 = \(\frac {11}{10}\) × 100 = 110
Ankush has an IQ of 110.

Question 2.
Charles Spearman’s theory of intelligence
Answer:
Intelligence is the highest attribute of human beings. Different psychologists have defined intelligence differently. Lewis Terman explains intelligence as, “an ability to think on an abstract level.”
David Wechsler defines intelligence as, “the aggregate or global capacity of an individual to act purposefully, to think rationally and to deal effectively with his environment.”
In 1927, Charles Spearman with the help of a statistical method called factor analysis separated and identified two different factors of intelligence viz. General factor (g) and Specific factor (s).

1. General factor is the minimum competence required to carry out daily work.
2. Specific factor includes abilities which are required to solve problems in specific areas.

Question 3.
Verbal tests of intelligence
Answer:
Intelligence is the highest attribute of human beings. Different psychologists have defined intelligence differently. Lewis Terman explains intelligence as, “an ability to think on an abstract level.”
David Wechsler defines intelligence as, “the aggregate or global capacity of an individual to act purposefully, to think rationally and to deal effectively with his environment.”

On the basis of material used in the tests, intelligence tests can be classified as Verbal tests and Non-verbal tests of intelligence. Intelligence tests that use language (words or numbers) for measuring intelligence are called verbal tests of intelligence. In these tests subjects are required to respond verbally to test items. Army Alpha Test, Wechsler’s Adult Intelligence Scale (WAIS), etc., are some of the examples of verbal tests of intelligence. These tests are language and culture bound and hence cannot be used with children, illiterates etc. However, they are useful in measuring higher mental abilities.

Question 4.
Non-verbal tests of intelligence
Answer:
Intelligence is the highest attribute of human beings. Different psychologists have defined intelligence differently. Lewis Terman explains intelligence as, “an ability to think on an abstract level.”
David Wechsler defines intelligence as, “the aggregate or global capacity of an individual to act purposefully, to think rationally and to deal effectively with his environment.”
On the basis of material used in the tests, intelligence tests can be classified as Verbal tests and Non-verbal tests of intelligence.

Intelligence tests that use pictures, designs, material objects, etc., to measure intelligence are called non-verbal tests of intelligence. In these tests language is not used to measure intelligence. In these tests subjects are not required to respond verbally to test items. Non-verbal tests are of two types viz.

1. Performance tests for e.g., Koh’s Block Design test, Dr. Bhatia’s Non Verbal test, Alexander’s Pass-along test, etc. and
2. Paper-pencil tests for e.g., Raven’s Standard Progressive Matrices.

Question 5.
Artificial Intelligence
Answer:
The term Artificial Intelligence was suggested by John McCarthy. Artificial intelligence is an innovation created by human intelligence. It is a field of study that combines computer science, algorithms, psychology, etc. It refers to enabling software programmes and computer systems to perform tasks that normally require human intelligence, such as visual perception, speech recognition, weather forecasting, language translation, etc.

Artificial intelligence can take decisions only on the basis of stored information and so cannot be an alternative to human intelligence. Artificial intelligence has immense applications in daily life as well as to solve critical problems. Artificial intelligence is used in devices like robots, computers, self-driving cars, automatic missiles, smart phones, medical diagnostic tools, etc.

6. Answer the following questions with the help of the given points.

Question 1.
Write in brief about individual tests of intelligence
(i) Meaning
(ii) Advantages
(iii) Disadvantages
Answer:

(i) Meaning – Intelligence tests that can be administered to a single person at a time are called individual tests of intelligence, for e.g., Stanford Binet Scales, Koh’s Block Design Test, etc.

(ii) Advantages-

1. The test administrator can establish a rapport with the client.
2. The test administrator can get additional information about the client’s feelings, moods and expressions during testing.
3. Individual tests are more capable of measuring creative thinking, compared to group tests.

(iii) Disadvantages-

1. Individual tests are time consuming and costly to administer.
2. Individual tests require a trained and skillful examiner to administer, score and interpret them.
3. These tests cannot be used for mass testing.

Question 2.
Write in brief about group tests of intelligence
(i) Meaning
(ii) Advantages
(iii) Disadvantages
Answer:

(i) Meaning – Group test of intelligence are tests that can be administered to more than one person at a time, i.e., for mass testing, for e.g., Army Alpha and Army Beta Test, OTIS self¬administrating tests, etc.

(ii) Advantages-

1. Group tests are less time consuming and more economical to administer.
2. In administrating of group tests, the role of the examiner is minimal. So, he/she need not go through any specialised training.
3. These tests can be used in cases where mass testing is needed.

(iii) Disadvantages-

1. The test administrator has much less opportunity to establish rapport, obtain cooperation and maintain interest of the clients.
2. Compared to individual tests, group tests are less capable of measuring the creative aspect of intelligence.

7. Answer the following questions in Detail.

Question 1.
Write in detail about the history of intelligence testing.
Answer:
Intelligence is the highest attribute of human beings. Different psychologists have defined intelligence differently. Lewis Terman explains intelligence as, “an ability to think on an abstract level.”

David Wechsler defines intelligence as, ‘the aggregate or global capacity of an individual to act purposefully, to think rationally and to deal effectively with his environment’. Many psychologists have contributed to the measurement of Intelligence.

Sir Francis Galton thought that he could determine intelligence by measuring the size of the human skull. He administered a battery of tests to measure variables such as head size, reaction time, visual acuity, etc. However, these tests did not prove useful to measure intelligence.

Raymond Cattell, used the term ‘mental test’ for the first time. Like his mentor, Sir Galton, Cattell also believed that intelligence is best measured by sensory tasks. However, be emphasized that test administration must be standardized.

In 1905, Alfied Binet in collaboration with Theodor Simon, published the First Scale of Intelligence. This scale was revised in 1908 and 1911. In 1916, Lewis Terman revised the scale, i.e., adapted few items, established new age norms etc. This came to be called ‘Stanford Binet Test’. Binet also introduced the concept of Mental Age. It is defined as the age at which the person successfully performs on all items of the test prepared for that age level.

In 1917, Robert Yerkes and his colleagues developed the Army Alpha (verbal test) and Army Beta (performance test) intelligence tests. These two tests were used to recruit soldiers. In 1939, during World War II also, to recruit army personnel, the Army General Classification Test was used.

In 1939, David Wechsler published the Wechsler-Bellevue Intelligence Test. In 1955, the test was revised and then called Wechsler Adult Intelligence Scale (WAIS). It has a verbal scale and performance scale. Wechsler also developed a test to measure intelligence of children, i.e., Wechsler Intelligence Scale for Children (WISC).

Mental Age – Alfred Binet introduced the concept of Mental Age. It is defined as the age at which the person successfully performs on all items of the test prepared for that age level. Mental Age need not correspond to Chronological Age. It Mental Age (MA) is the same as Chronological Age (CA), the person has average intelligence.

Intelligence Quotient – In 1912, William Stern introduced the concept of Intelligence Quotient (IQ). Terman, refined the formula for calculating IQ which is as stated below-
IQ = \(\frac {MA}{CA}\) × 100 IQ made it possible to compare the intelligence of individuals of different age CA groups.

Question 2.
‘Intelligence testing has a wide usage in various areas’. Justify with examples.
Answer:
David Wechsler defines intelligence as, ‘the aggregate or global capacity of an individual to act purposefully, to think rationally and to deal effectively with his environment.’
Types of Intelligence Tests-
(i) Individual tests of intelligence-
Individual tests of intelligence are tests which can be administered to a single person at a time, for e.g., Stanford Binet Scales, WAIS, Koh’s Block Design Test, etc.

(ii) Group tests of intelligence-
Group test of intelligence are tests that can be administered to more than one person at a time, i.e., for mass testing, for e.g., Army Alpha and Army Beta Test, OTIS self-administrating tests, etc.

(iii) Verbal tests of intelligence-
Verbal tests of intelligence make use of words and numbers to measure intelligence and subjects respond verbally to the test items, for e.g., WAIS, Army Alpha Test, etc.

(vi) Non-verbal tests of intelligence-
Non-verbal tests of intelligence do not use language to measure intelligence. They make use of pictures, designs, objects, etc. Such tests may be (i) Performance tests, e.g., Koh’s Block Design Test or (ii) Paper-pencil test e.g., Raven’s Standard Progressive Matrices.

Application of Intelligence Testing

1. Effective Schooling – On the basis of intelligence test scores, teachers can classify students into intellectual categories and devise special instructional programmes suited to their mental development.
2. Aids Mental Health Personnel – Intelligence tests are helpful to Mental Health personnel such as psychologists, etc., for diagnosis purposes and therapy.
3. Effective Parenting – Parents can provide appropriate educational facilities to their children based on their IQ scores.
4. Career Counselling – Scores obtained on intelligence tests help the student to select the right educational options/ courses.
5. Vocational Counselling – Individuals can choose a suitable career and achieve job satisfaction when they make a realistic choice of vocation based on IQ scores.

Question 3.
Explain the characteristics of people having high social intelligence.
Answer:
E.L. Thorndike proposed the term Social Intelligence. Howard Gardner included ‘interpersonal intelligence’ in the Multiple Intelligences Theory. According to Karl Albrecht, “Social intelligence is the ability to get along well with others and to get them to cooperate with oneself’.

According to Karl Albrecht our behaviour towards others falls somewhere on a spectrum between toxic behaviour and nourishing behaviour. Devaluing others, refusing cooperation to others, negative talking, discouraging others, etc., are some of the examples of toxic behaviours. A continued pattern of toxic behaviour indicates a low level of social intelligence. Respecting others, cooperating with others, positive talking, encouraging others, etc., are some of the examples of nourishing behaviour. A continued pattern of nourishing behaviour indicates a high level of social intelligence.

The following are some of the characteristics of people having high social intelligence:

1. They are good at understanding and interacting with other people.
2. They have ability to monitor their verbal and non-verbal expressions while communicating with others.
3. They are good speakers and good listeners.
4. They are skilled at assessing the emotions, motivations, desires, and intentions of those around them.
5. They understand social dynamics in an effective way.
6. They are flexible in their approach while dealing with others.
7. They are goal orientated, persistent and self- confident.
8. They can resolve conflicts in social contexts.
9. They are successful negotiators.
10. They enhance personal and professional relationships with others.

Class 12 Psychology Chapter 2 Intelligence Intext Questions and Answers

ACTIVITY (Textbook Page. No. 12)

Activity 1
Read the following sentences and decide whether the given sentences are the facts or just beliefs about intelligence :
(i) Intelligence is something that is inborn.
(ii) Students who are intelligent can get good marks in examinations.
(iii) Students who do not get good marks in examinations are less intelligent.
(iv) People who are intelligent are very smart.
(v) Intelligent people can impress anyone by their talk.
Answer:
[All the statements are just beliefs, not facts.]

Activity 2 (Textbook Page. No. 15)
Read the following examples. Using the formula, calculate the I.Q. of the following students:
(i) Aabha is a genius girl. Her chronological age is 8 years and her mental age is 14 years. Find out her I.Q.
(ii) Mayur has learning disabilities. His chronological age is 8 years and his mental age is 6 years. Find out his I.Q.
Answer:
(i) In case of Aabha – Mental Age (MA) = 14 years
Chronological Age (CA) = 8 years, IQ = ?
IQ = \(\frac {MA}{CA}\) × 100 = \(\frac {14}{10}\) × 100 = 175
IQ = 175.

(ii) In case of Mayur – Mental Age (MA) = 6 years.
Chronological Age (CA) = 8 years, IQ = ?
MA 6
IQ = \(\frac {MA}{CA}\) × 100 = \(\frac {6}{10}\) × 100 = 75
IQ = 75.

Activity 3 (Textbook Page. No. 16)

Make a chart listing the advantages and disadvantages of individual tests of intelligence.
Answer:
(i) Advantages-

1. The test administrator can establish a rapport with the client.
2. The test administrator can get additional information about the client’s feelings, moods and expressions during testing.
3. Individual tests are more capable of measuring creative thinking, compared to group tests.

(ii) Disadvantages-

1. Individual tests are time consuming and costly to administer.
2. Individual tests require a trained and skillful examiner to administer, score and interpret them.
3. These tests cannot be used for mass testing.

Activity 4 (Textbook Page. No. 16)

Make a chart listing the advantages and disadvantages of group tests of intelligence.
Answer:
(i) Advantages-

1. Group tests are less time consuming and economical to administer.
2. In administrating group tests, the role of the examiner is minimal. So, he/she need not go through any specialized training.
3. These tests can be used in cases where mass testing is needed.

(ii) Disadvantages-

1. The test administrator has much less opportunity to establish rapport, obtain cooperation and maintain interest of the clients.
2. Compared to individual tests, group tests are less capable of measuring creative aspect of intelligence.

Activity 5 (Textbook Page. No. 17)

Verbal test of intelligence Choose the correct option:
(i) Shoe – Foot : : Hat – ……………..
(a) Kitten
(b) Head
(c) Knife
Answer:
Shoe – Foot: : Hat – Head

(ii) Eye – Head : : Window – ………………
(a) Key
(b) Floor
(c) Room
Answer:
Eye – Head : : Window – Room

Activity 6 (Textbook Page. No. 19)

Read the examples given in Activity 6 on textbook page no. 18 and decide the positions of Chetan, Sagar and Anil on the following spectrum of behaviour:

Answer:

Activity 7 (Textbook Page. No. 20)

Study the differences between the characteristics of people having high emotional intelligence and low emotional intelligence and think about what you can do to develop your emotional intelligence?

Characteristics of people having high emotional intelligence	Characteristics of people having low emotional intelligence
Emotionally stable, Patient	Emotionally unstable, Impatient
Optimistic, Independent	Pessimistic, Dependent
Happy, Enthusiastic	Sad, Apathetic
Calm, Satisfied	Restless, Dissatisfied

Answer:
I will try to develop emotional intelligence by adopting the following ways-

1. active listening skills .and effective style of communication.
2. practice self-evaluation and self-awareness.
3. respond instead of reacting in conflict situations.
4. stay motivated, rational and have a positive outlook.
5. show empathy, be approachable.
6. adopt effective stress management techniques.

Activity 8 (Textbook Page. No. 20)

Discuss how the following devices use Artificial Intelligence:
(i) Computers
(ii) Self-driving cars
(iii) Robots
(iv) Medical diagnostic tools
(v) Translation devices
(vi) Automatic Missiles
(vii) Chatbots, etc.
Answer:
(i) Computers – AI is the ability of a computer programme to think and learn. It makes computers smart, i.e., work without being encoded with commands.

(ii) Self-driving cars – Autonomous driving is a key application of AI. Self-driving cars are equipped with multiple sensors such as cameras, radars, etc., which generate massive amount of data and simulate human perceptual and decision making processes in driving.

(iii) Robots – AI gives robots the computer vision to navigate, sense and calculate their reaction accordingly. Robots learn to perform tasks from humans through machine learning which is a part of computer programming and AI.

(iv) Medical diagnostic tools – Abnormalities in body fluids and tissue can be automatically detected using AI in medical diagnosis solutions. AI can help to speed up process of diagnosis, i.e., biomarkers.

(v) Translation devices-AI uses Neural Machine Translation (NMT), i.e., an electronic, neural network trained to recognize patterns in the input data set and translate it into desired output data, for e.g., a sentence in Japanese into English. It is more accurate than simple machine translation.

(vi) Automatic Missiles – AI is leading the world towards a battlefield that has no boundaries, may not even have humans involved and will be impossible to control across the human ecosystem in Cyberspace, Geospace and Space (CGS). It refers to the weaponisation of AI, i.e., a weapon system that can select human/ non-human targets without further intervention by a human operator.

(vii) Chatbots – AI makes it possible for chatbots to ‘learn’ by discovering patterns in data. A chatbot is a computer programme that imitates spoken and written conversation, i.e., voice commands and texts, for e.g., Siri.

Class 12 Psychology Textbook Solutions Digest 

• Psychology Class 12 Chapter 1 Question Answers
• Psychology Class 12 Chapter 2 Question Answers
• Psychology Class 12 Chapter 3 Question Answers
• Psychology Class 12 Chapter 4 Question Answers
• Psychology Class 12 Chapter 5 Question Answers
• Psychology Class 12 Chapter 6 Question Answers
• Psychology Class 12 Chapter 7 Question Answers
• Psychology Class 12 Chapter 8 Question Answers

Psychology Class 12 Chapter 8 Positive Psychology Question Answers Maharashtra Board

Balbharti Maharashtra State Board Class 12 Psychology Solutions Chapter 8 Positive Psychology Textbook Exercise Questions and Answers.

Positive Psychology Class 12 Psychology Chapter 8 Questions and Answers

1. Choose the correct option and complete the following statements.

Question 1.
……………. is the father of positive psychology.
(a) Carver
(b) Masten
(c) Seligman
Answer:
(c) Seligman

Question 2.
Barbara Fredrickson introduced the Broaden and ………………. theory.
(a) Build
(b) Emotion
(c) Learning
Answer:
(a) Build

Question 3.
The belief that good things will happen is called as ………………..
(a) pessimism
(b) resilience
(c) optimism
Answer:
(c) optimism

Question 4.
The capacity to understand what the other person is experiencing is………………
(a) sympathy
(b) empathy
(c) emotion
Answer:
(b) empathy

2. Answer the following questions in 35 – 40 words each.

Question 1.
Explain the theories of happiness
Answer:
Happiness is a positive emotional state that is subjective to each person, for e.g., people feel happy when they are successful or surprised or loved, etc.
The main theories of happiness are-

1. Need/ goal satisfaction theories – Happiness is experienced when some need or goal is satisfied, e.g., Rohit feels happiness when he clears IIT-JEE exams.
2. Process/ activity theories – Happiness is experienced when one engages in a particular activity, e.g., Sumit enjoys trekking.
3. Genetic/ personality theories – Genetic and personality characteristics are involved in the experience of happiness.

Question 2.
What is mindfulness?
Answer:
Mindfulness is the basic human ability to be fully aware of where we are and what we are doing. It means that we should not be overly reactive or overwhelmed by what’s going on around us. Mindfulness refers to mental awareness that helps to focus on the ‘Here and Now’. It helps to increase self-regulation, which results in growth and happiness. Mindfulness is maintaining moment by moment awareness of our bodily sensations, environment, thoughts and feelings.

Question 3.
What is resilience?
Answer:
According to the American Psychological Association, resilience is the process of adapting well in the face of adversity, trauma, tragedy, threats or significant sources of stress such as family and relationships, health, work and finances, etc. It is the act of ‘bouncing back’ inspite of barriers or set backs.

Resilience helps the person to recover form setbacks with the least negative consequences. Individuals high on resilience exhibit the following characteristics-

1. they regain their confidence after a period of emotional disturbance
2. they are able to maintain their psychological well-being.

The types of resilience are physical, psychological, emotional and community resilience.

3. Write short notes on the following in 50 – 60 words each.

Question 1.
Life above zero
Answer:
Traditional psychology focused on life at and below zero. Zero is the line that divides illness form
health. Hence, life below zero indicates a life that is full of problems stress, diseases, etc. Positive psychology emphasizes the study of life above zero.

-1 to +1 indicates neutral charactristics while below 0 indicates disorders, dysfunction or illness. Life above zero covers a large area of positive aspects of behaviour such as mindfulness, resilience, happiness, hope, trust and empathy. It acknowledges elements of living that enrich and meaningfully sustain what is referred to as “the good life” in positive psychology.

Question 2.
Determinants of happiness
Answer:
Happiness is a positive emotional state. Factors like health, prestige, income, success, etc., contribute to only a small portion of our total happiness.
Some factors are predictors of long lasting happiness-

1. Strong, intimate social relationships, positive contacts and good support system.
2. Optimism leads to less of negative emotions like stress.
3. Self-esteem enhances our confidence level and ability to approach challenges in a constructive manner.
4. Achieving challenging goals- If the goals are too easy, it leads to boredom and if they are too difficult, it leads to frustration. Moderately challenging goals, increase the chance of success, leading to happiness.
5. Perceiving meaning and purpose in life, without which we will experience frustration, boredom, etc.
6. Looking at life’s challenges as an opportunity rather than a threat helps to develop our potential.

Question 3.
Characteristics of an optimist
Answer:
Optimism is a mental attitude that includes feelings of hopefulness and a belief that the future will be positive and favourable. It is the belief that negative events are merely setbacks that are temporary and can be overcome.
The characteristics of optimists are:

1. they try to choose the best options available
2. they tend to be high on self confidence
3. they face difficulties positively as they view them as a challenge for a person to become strong
4. they are hopeful about the future and do not generalize present failure to future events.

Question 4.
Methods to promote empathy
Answer:
Empathy is the capacity to understand and feel what another person is experiencing from within their frame of reference i.e. capacity to place oneself in another’s position.

According to Simon Baron-Cohen there are three components of empathy viz. cognitive empathy emotional reactivity and social skills. Empathy builds a sense of security and trust. It is closely related to emotional intelligence and is a key to successful relationships.
Empathy can be promoted by using the following methods-

1. Increase social interactions – Especially with people who need help in order to understand their perspectives and motives.
2. Connecting through similarities – With others, e.g., those having same hobbies/ work/ goals, etc.
3. Understanding what you are feeling – Those who are able to accurately judge their own motives, can empathize better.
4. Challenge yourself – Tasks that are challenging lead to the person struggling to achieve a goal. This lead to humility which enables empathy.
5. Cultivate a sense of curiosity – This leads to open-mindedness and a better understanding of those around us.
6. Widen our social circle – Contact with people of different races, cultures, viewpoints helps to increase empathy towards them at a neurological level.

4. Explain the Following concepts.

Question 1.
Positive Psychology
Answer:
Positive Psychology is a newly emerging branch of psychology. Martin Seligman officially introduced Positive Psychology as a subfield of psychology. It is the science of happiness, human strength and growth. Positive Psychology focuses on building of character strengths like courage, happiness, perseverance, etc., rather than on anxiety, conflict, avoidance, etc. According to Seligman, positive psychology is “the scientific study of positive human functioning and flourishing on multiple levels that include the biological, personal, relational, institutional, cultural and global dimensions of life.”

Question 2.
Half glass full and half glass empty.
Answer:
Optimism is a mental attitude that includes feelings of hopefulness. It is a belief that the future will be positive and favourable and that negative events are merely setbacks that are temporary and can be overcome. Seligman explained about optimism in the book ‘Learned Optimism’. Our perspective determines whether or not we will show optimism.

A glass which has water upto its mid level may be perceived as half full (optimism) or as half empty (pessimism). This is described as ‘Half glass full and half glass empty’.

Question 3.
Empathy
Answer:
Empathy is the capacity to understand and feel what another person is experiencing from within their frame of reference, i.e., capacity to place oneself in another’s position. According to Simon Baron-Cohen, there are three components of empathy viz. cognitive empathy i.e., perspective taking, emotional reactivity (connecting in an intimate bond with another person) and social skills (moved to help the other). Empathy builds a sense of security and trust. It is closely related to emotional intelligence and is a key to successful relationships.

Question 4.
Mindfulness
Answer:
Mindfulness is the basic human ability to be fully aware of where we are and what we are doing. It means that we should not be overly reactive or overwhelmed by what’s going on around us. Mindfulness refers to mental awareness that helps to focus on the ‘Here and Now’. It helps to increase self-regulation, which results in growth and happiness. Mindfulness is maintaining moment by moment awareness of our bodily sensations, environment, thoughts and feelings.

Question 5.
Social resilience
Answer:
According to the American Psychological Association, resilience is the process of adapting well in the face of adversity, trauma, tragedy, threats or significant sources of stress such as family, health, etc. It is the act of ‘bouncing back’ inspite of barriers or set backs.

Social resilience is also called community resilience. It is the ability of groups of people to respond to and recover from adverse situations such as natural disasters, epidemics, war and socio-economic challenges to their community. This is mainly due to strong connections or bonds that the community members have with each other.

5. Answer the following question in 150 – 200 words each.

Question 1.
What are the essential building blocks of resilience?
Answer:
According to the American Psychological Association, resilience is the process of adapting well in the face of adversity, trauma, tragedy, threats or significant sources of stress such as family, health, etc. It is the act of ‘bouncing back’ inspite of barriers or set backs. Resilience helps the person to recover form setbacks with the least negative consequences. Individuals who are resilience tend to-

1. regain their confidence after a period of emotional disturbance
2. they are able to maintain their psychological well-being.

6. The types of resilience are physical, psychological, emotional and community resilience.

According to Ann Masten, building blocks is ‘ordinary magic’, which involves behaviour that can be easily learnt. The 7 C’s of reilience are-

1. Competence – Competence is the ability or know-how to handle situations effectively. Competence is acquired through actual experience.
2. Confidence – True confidence is a strong belief in one’s own abilities. Confidence is gained by demonstrating competence in real life situations.
3. Connection – Family is the central force in an individual’s life. Connections with other people, schools and communities gives the individual a sense of security that allows him/her to be independent and develop creative solutions.
4. Character – It refers to a clear sense of right and wrong and a commitment to integrity. An individual with character has a strong sense of self-worth and confidence.
5. Contribution – An individual who understands the importance of personal contribution develops a sense of purpose that can motivate him/her, further leading to him/her psychological well-being.
6. Coping – A person who learns to cope effectively with stress is better prepared to overcome life’s challenges.
7. Control – When an individual realizes that he can control the outcomes of his decisions and actions, he is more likely to know that he has the ability to bounce back.

Question 2.
Recollect the most challenging situation you faced in your life till now and the way you dealt with it. With reference to the 7 C’s of Resilience, which qualities helped you to overcome the challenge? For each of the C’s write the process you adopted to deal with the situation.
Answer:
[Students are expected to answer this question by themselves.]

7. Find out the positive aspects of behaviour from the example given below and answer in one word.

Question 1.
Mahesh studies so attentively that he never gets distracted.
Answer:
Mindfulness

Question 2.
Sujata lost her hands in an accident. Now she has learned to write with her leg.
Answer:
Resilience

Question 3.
Vasanta’s daughter died by cancer. He has opened a rehabilitation center for cancer patients.
Answer:
Empathy

8. Case Study

Anurag was a software engineer working in one of the leading company’s in the USA for almost 5 years. He was in a stable relationship and he had plans to start a family and to settle there. Unfortunately due to the poor economy in USA he lost his job and had to return back to India. He felt distressed as he realized that he had lost everything he had worked so hard to build. This made him feel like a failure.

1. How do you think Anurag can apply the 7 C’s of resilience to overcome the difficult situation he is in?
2. As Anurag’s friend how will you empathise with him and help him deal with this challenge?
3. Anurag has developed a very pessimistic approach after these setbacks, how will you guide him to stay happy and optimistic?

Answer:
According to the American Psychological Association, resilience is the process of adapting well in the face of adversity, trauma, tragedy, threats or significant sources of stress such as family, health, etc. It is the act of ‘bouncing back’ inspite of barriers or set backs. Resilience helps the person to recover form setbacks. Individuals who are resilient tend to-
(i) regain their confidence after a period of emotional disturbance
(ii) maintain their psychological well-being.

Anurag can apply the 7 C’s of resilience as follows-
1. He has already worked in a reputed firm successfully. Hence he has the Competence and Confidence in his own abilities. Although he is feeling a sense of hopelessness and failure, he must live in the ‘Here and Now’ by taking stock of the situation. Character will provide Anurag self worth and provide a sense of purpose and motivation, i.e., Contribution. When he realizes that he can still succeed in life by applying for a similar job here and accepting the situation, i.e., Control he can use effective Coping mechanisms. Besides, he should not forget social support of family and friends, i.e., Connection.

2. As Anurag’s friend, I can understand and feel what he is going through, from his frame of reference. Since, he is feeling distressed and like a failure due to loss of job, I will empathize with him by being encouraging and supportive. I will try to make him understand that with his own competence and experience, he can easily find a well paying job in India. I will also encourage him to improve his professional skills and seek social support from family and friends.

3. It seems natural for a person who was in a good job, stable relationship and successful position to feel pessimistic and like a failure when all of these no longer exist in his life. I will help Anurag to have a positive approach towards the challenges and difficulties in his life, i.e., view all setbacks i.e. loss of job, being sent back from the USA, etc., as opportunities not as obstacles. This will help him to gain a better perspective.

Class 12 Psychology Chapter 8 Positive Psychology Intext Questions and Answers

ACTIVITY (Textbook Page. No. 99)

Activity 4

(a) Meera scored poor marks in the examination.
(b) Suresh’s scholarship application got rejected.
(c) Mahesh lost his job.
Imagine yourself in their position and answer the following questions-
(i) How does being in their situation make you feel?
(ii) What do you think about yourself and your future being in their position?
Answer:
(i) You may feel

• Hopeless and so you might think that your future is dark.
• Helpless and so you might think that you cannot do anything to get out of the situation.
• Worthless and so you might think that you are a failure.

(ii) In contrast you may also feel

• Hopeful and think that the current adverse situation can change in the future.
• Challenged and think that you have the ability to overcome the adversity.
• Confident and think that one failure does not define you

Activity 5 (Textbook Page. No. 100)

What would your feeling be in the following situations?
(i) After a long struggle your friend got a job.
(ii) You see a person who just met with an accident and is bleeding profusely.
(iii) Your cousin is awarded a PhD. degree.
Answer:
In all the above examples I would feel empathy i.e., feel what these persons are experiencing.
(i) I will also feel happy and hopeful.
(ii) I will also feel concerned and helpless,
(iii) I will feel elated and proud.

Activity 8 (Textbook Page. No. 104)

Think of someone you know who has faced a challenging situation in their life and were successfully able to deal with it. This situation may have been emotionally difficult to deal with like death of a loved one, loss of a job, dealing with chronic illness, failure etc. Answer the following questions and discuss the answers in class.

1. How did they handle the adverse situation?
2. Which obstacles did they have to overcome?
3. In your opinion which specific attitudes and skills helped them cope with the situation?
4. Do you think they received help and support from others?

Answer:
Sundari, a professor in a reputed college was diagnosed with cancer at age 35 years.

1. Initially, she was overcome by feelings of intense fear and hopelessness. However, she decided that she would not give up the fight against cancer.
2. She had to overcome obstacles such as intense pain, fear of chemotherapy, pity shown by some ‘well wishers’, financial constraints, etc.
3. Specific attitudes that helped her to cope with this trauma were Resilience, fighting spirit interacting with other cancer survivors and good coping skills.
4. Yes, she received immense support from family, colleagues, friends and support groups like CPAA and Cancer Aid Foundation.

Activity 9 (Textbook Page. No. 105)

Read about the life of Indian boxer Mary Kom. Discuss in class the struggles she faced and how she overcame them to win multiple medals for the country.
Answer:
Mary Kom was born in Kangathei in the north-east state of Manipur. She grew up in a humble surroundings in an agricultural family. She is the eldest of three siblings. Her father had been a keen wrestler. Since a young age, Mary exhibited an inclination towards sports, like athletics and football. She was inspired by Dingko Singh, (a fellow Manipur who won a gold medal in 1998 Asian games ) to take up boxing. She was unable to pass her matriculation exam but still cleared X Std., from NIOS, Imphal. When she was 15, she left home to study at the Sports Academy in Imphal.

Her first coach K. K. Meitei recalls her as being hard working, dedicated, a quick learner with a strong will power. She has won many accolades such as 6 World Championships, Bronze medal at London Olympics (2012), 1 gold medal each at Asian Games (2014) and at Commonwealth Games (2018). She has been awarded the Padma Shri, Padma Bhushan and Padam Vibushan.

Her life story exhibits how Mary overcome obstacles of poverty, family opposition, gender bias to become the undisputed Queen of Boxing. Even at age 37, she still has the hunger to compete and win medals for India. Mary showed resilience as she has returned to the very demanding sport of boxing, after the birth of each child and has exceeded all expectations.

Activities 1, 2, 3, and 6
Answer:
[These are personal response questions.]

Class 12 Psychology Textbook Solutions Digest 

• Psychology Class 12 Chapter 1 Question Answers
• Psychology Class 12 Chapter 2 Question Answers
• Psychology Class 12 Chapter 3 Question Answers
• Psychology Class 12 Chapter 4 Question Answers
• Psychology Class 12 Chapter 5 Question Answers
• Psychology Class 12 Chapter 6 Question Answers
• Psychology Class 12 Chapter 7 Question Answers
• Psychology Class 12 Chapter 8 Question Answers

Psychology Class 12 Chapter 7 First Aid in Mental Health Question Answers Maharashtra Board

Balbharti Maharashtra State Board Class 12 Psychology Solutions Chapter 7 First Aid in Mental Health Textbook Exercise Questions and Answers.

First Aid in Mental Health Class 12 Psychology Chapter 7 Questions and Answers

1. Choose the correct option and complete the following statements.

Question 1.
One of the major obstacles to getting help from a mental health professional is the ………………… attached to mental illness.
(a) policy
(b) stigma
(c) society
Answer:
(b) stigma

Question 2.
Friends and family are not a substitute for …………………..
(a) solving problems
(b) giving solutions
(c) professional help
Answer:
(c) professional help

Question 3.
In our culture the ………………….. of an individual is considered to be the reflection of one’s family.
(a) intelligence
(b) behaviour
(c) status
Answer:
(b) behaviour

Question 4.
Individuals who experience ………………… commonly have a negative thinking style.
(a) depression
(b) phobia
(c) acute stress
Answer:
(a) depression

2. Answer the following questions in 35 – 40 words each.

Question 1.
Describe the term Mental Health First Aid?
Answer:
Mental Health First Aid (MHFA) is an internationally recognized training programme designed to teach people how to identify the signs and symptoms of mental health problems and to provide assistance on a first aid basis. MHFA was originally developed by Betty Kitchener and Anthony Jorm.

First Aid in Mental Health is a concept based on the idea of ‘prevention is better than cure’. If the early signs of mental illness are recognized, it can help in the following ways.

1. Diagnosis – timely diagnosis at the onset of mental illness helps to prevent it from developing into a more severe form.
2. Intervention – early intervention helps to get professional help.
3. Relapse prevention – it prevent reoccurrence of symptom of the mental illness.

Question 2.
What are the stigmas attached to mental illness?
Answer:
One of the major obstacles to getting help from a mental health professional is the stigma that is attached to mental illness. We fear things that we do not understand. In the same way, our lack of understanding of mental illness makes us fear it.
This lack of knowledge and awareness makes us-

1. Blame the individual, i.e., think that mental illness is a personal failing or weakness.
2. Think that mental illness is caused as punishment for our sins.
3. Think that the person is intentionally behaving in an inappropriate way.

Question 3.
Anxiety disrupts day to day functioning of an individual : State two predispositional factors contributing to anxiety.
Answer:
Anxiety that is excessive or persists after the anxiety creating situation has subsided leads to anxiety disorders such as phobias, acute stress disorder, etc.
Predispositional factors in anxiety are-

1. Genetic factors – if anyone in the family has anxiety issues, then the person will be at a higher risk of exhibiting high levels of anxiety as compared to other persons.
2. Childhood trauma such as physical or mental neglect or abuse, death of a loved one, parental divorce, etc.

Question 4.
Your friend confided in you that he is suffering from anxiety.
Suggest two self- help strategies to help him deal with this issue.
Answer:
The self help strategies that can be suggested to help him deal with excessive anxiety are-

1. Engage in some activity that he always wanted to pursue for e.g., pottery, writing, sketching or voluntary social service.
2. Indulge in physical activity like exercise, outdoor games or trekking.
3. Relaxation techniques like laughter therapy, meditation and breathing techniques.

3. Answer the following in 80 – 100 words based on the given points.

Question 1.
Explain the reasons why First Aid in Mental Health is required.
(a) Stigma associated with mental health
(b) Shame
(c) People do not always know how to respond
(d) People may not always seek professional help
Answer:
MHFA is an internationally recognized training programme whose objective is to teach people how to identify the signs and symptoms of mental health problems and to provide assistance on a first aid basis.
(a) Stigma associated with mental health:
Lack of understanding about mental illness makes us fear it. This lack of awareness leads us to blame the person for behaving inappropriately or showing personal failing.

(b) Shame:
Often, a person who has been diagnosed with a mental illness is ridiculed or blamed. He/she experiences shame, withdraws from social interaction and does not reach out to others or seek help. Hence, it is beneficial to show understanding and provide support.

(c) People do not always know how to respond:
Most people may not respond in an adequate way to a mentally ill person who reaches out to them. Sometimes, their advice/help may do more harm than good. However, MHFA programme can help friends/family to identify early signs of mental illness and help the person to get professional help.

(d) People may not always seek professional help:
The main reasons for this is-

1. Culture – Stigma attached to mental illness prevents people from seeking professional help as it may hurt the reputation of the family.
2. Advice from elders – A mentally ill person may incorrectly believe that advice of elders alone is sufficient to cure his illness.
3. Superstitions – If the person is convinced that his//her mental illness is caused due to sins/curses etc., they will not want to visit a mental health professional. Hence, they will be deprived of the benefits of early intervention.

Question 2.
Explain the ALGEE Model in your own words.
(a) Approach, Assess and Assist in any crisis
(b) Listen non-judgmentally
(c) Give support and information
(d) Encourage the person to get professional help
(e) Encourage self-help and other support strategies
Answer:
ALGEE is an action plan to carry out First Aid in Mental Health.
(a) Approach, Assess and Assist in any crisis – An attempt is made to understand the situation and observe if there are behavioural changes in the person whom we are concerned about.

(b) Listen non-judgmentally – We should listen to the other person without letting our opinions influence us. We should not judge/ criticise but listen with acceptance and empathy. It does not imply that we agree with what the other person is saying but it ensures that the person feels supported.

(c) Give support and information – This helps the person to feel more in control of the situation since they have emotional and informational support.

(d) Encourage the person to get professional help – Persons suffering from mental illness may hesitate to seek help due to lack of knowledge or due to stigma attached. Others may not know how to respond to someone showing ‘red flags’ of mental illness and may do more harm than good. Mental health professionals are trained to help the person to identify the problem and cope with the situation.

(e) Encourage self-help and other support strategies – Self-help strategies are tasks that help to increase our resources to deal with stress and to maintain mental health such as exercise, adequate sleep, having hobbies, etc.

Question 3.
Enumerate the various symptoms that are exhibited by an individual with anxiety disorders.
(a) Physical Symptoms
(b) Psychological Symptoms
(c) Behavioural Symptoms
Answer:
Anxiety is an emotion characterised by feelings of tension, hopelessness, etc. Excessive level of anxiety which persists even after the anxiety producing situation has gone away, can lead to anxiety disorders.
(a) Physical Symptoms

1. Heart palpitations and rapid heart rate
2. Shortness of breath
3. Dizziness or headaches
4. Restlessness, tremors and shaking

(b) Psychological Symptoms

1. Mind racing or going blank
2. Difficulty in concentration
3. Forgetfulness
4. Problems in decision making
5. Irritability, impatience and anger

(c) Behavioural Symptoms

1. Avoiding people and situations
2. Repetitive checking
3. Strong urge to escape the situation

Question 4.
Explain excessive dependence on the internet.
(a) Meaning
(b) Four C’s to identify excessive internet usage
(c) Red flags that indicate internet addiction.
Answer:
(a) Meaning
The amount of time as well as reason for using the internet may become a matter of concern for e.g., online gambling, gaming, etc. The person may socialise more online with friends than real life socialising. Spending excess time online may cause the person to neglect family, relationships, work etc. Virtual world enables games/gambling almost continuously. This leads to the person neglecting personal hygiene, real life relationships and become withdrawn and irresponsible. The person may feel guilty or defensive about internet use. He/ she may panic in the absence of internet service. A growing dependence on internet refers to an inability to stop and down down.

(b) Four C’s to identify excessive internet usage
Excessive internet usage is characterised by extensive, problematic addiction to the use of computer and internet. It signifies poorly controlled preoccupations or behaviour regarding such usage. Excessive internet usage leads to personal distress and social impairment.
The four C’s to identify excessive internet usage are as follows-

1. Craving – Do you have an intense desire to use the internet?
2. Control – Do you have an inability to control your self using the internet?
3. Compulsion – Do you find it difficult to stop using the internet? Even though you know you should not spend so much time on it?
4. Consequence – Have you ever experienced any physical or psychological ill effects as a result of excessive use of the internet? If you answer a ‘yes’ for at least three of the C’s, it can be a matter of concern.

(c) Red flags that indicate internet addiction
The Red Flags that indicate over dependence on internet are-

1. Feelings of euphoria while using the internet.
2. Physical symptoms like headache, dry eyes, etc.
3. Inability to keep to schedules and boredom with routine tasks.
4. Poor personal hygiene and nutrition to remain online.

4. Analysis the following case study.

Sujata is now a sad and lonely girl. She has cut off herself from all her relatives and family friends. She doesn’t participate in any college programmes nor family functions. She is mostly found in the library all by herself. She has lost her self-confidence. At home she prefers eating in the bedroom and mostly indulges in television or mobile activities. Apply the ALGEE model and help Sujata to evolve in her mental health.
Answer:
Sujata is showing symptoms of depression and anxiety such as sadness, withdrawing from family/ friends and social activities. The ALGEE model can be used.

1. Approach, assess and assist in any crisis – Behavioural changes are very noticeable in Sujata. I can voice my concern to the teachers/ counsellor of the school or to her family members.
2. Listen in a non-judgemental manner -1 will try to meet Sujata in the library or any place where she feels comfortable. I will explain my concerns to her about not interacting with others and overuse of mobile phones. I will listen patiently and compassionately.
3. Give support and information – Let Sujata know that she has emotional support of her friends. There is nothing to feel guilty or ashamed of. She should hence be forthcoming about her problems.
4. Encourage her to get professional help – I will encourage her to meet the college counsellor who will be able to help her professionally.
5. Encourage self-help strategies – This will help Sujata to regain control over her life. Some positive measures include breathing exercises, yoga, laughter therapy, etc.

Class 12 Psychology Textbook Solutions Digest 

• Psychology Class 12 Chapter 1 Question Answers
• Psychology Class 12 Chapter 2 Question Answers
• Psychology Class 12 Chapter 3 Question Answers
• Psychology Class 12 Chapter 4 Question Answers
• Psychology Class 12 Chapter 5 Question Answers
• Psychology Class 12 Chapter 6 Question Answers
• Psychology Class 12 Chapter 7 Question Answers
• Psychology Class 12 Chapter 8 Question Answers