ACCOUNTS QUESTION PAPER WITH ANSWERS
Content
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OMTEX CLASSES TIME: - 3 HRS I ST PRELIMINARY EXAMINATION DATE: - 16.11.2010 BOOK KEEPING & ACCOUNTANCY DAY - TUESDAY GROUP: B MARKS: -100
Q1. Attempt any four of the following.
A. Answer in one sentence each. 1. Which types of expenses are debited to trading account?
(20 marks)
(5 marks)
Ans. The direct expenses related to purchase of goods are debited to trading account. 2. What is Reserve Fund? Ans. Reserve fund is the accumulated profit which is kept a side as a reserve to serve the firm for the future needs. 3. Who is an endorser? Ans. A person who endorses the ownership of the bill he is known as endorser. 4. What is goodwill? Ans. Goodwill is the monetary value of the business expressed in terms of money. 5. Why is Joint Bank Account opened? Ans. Joint bank account is opened to record the coventurers bank transaction relation to the joint venture business. B. Write the word/term/phrase which can substitute each of the following statement: (5 marks) 1. A statement showing financial position of the business. Ans. Balance sheet 2. Making the payment of bill before its due date. Ans. Retirement of the bill of exchange 3. List of debit and credit balances of the ledger accounts. Ans. Trial balance 4. The relationship between persons who have agreed to share profit or loss in Joint Venture Business. Ans. coventurers 5. A Partner who only lends his name to the firm. Ans. Nominal partner
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C. Match the following pairs. Group A 1. 2. 3. 4. 5. Partnership deed Fixed capital method. Unexpired expenses Temporary Partnership Pure Single Entry System a. b. c. d. e.
(5 marks) Group B Written agreement between the partners Current a/c of partners Assets Joint venture Only personal account
D. Select the most appropriate alternative from hose given below each statement. (5 marks) 1. Reserve for discount on ______________ has a debit balance. a. Debtors
b. Creditors
c. Bills Receivable d. Loan advanced. 2. Income Statements and Balance Sheet are prepared in a systematic and scientific manner under ________________
a. Double Entry System.
b. Single Entry System c. Partial Entry System. d. Indian System. 3. Before accepting a bill, it is called a _________ a. Note
b. Draft
c. Hundi d. Request. 4. Valuation of goodwill depends upon ________ capacity of business. a. Normal b. Repaying
c. Earning
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d. Capital 5. If two or more persons come together to carry on a business activity for a short period, it is known as ___________
a. Joint venture
b. Consignment c. Partnership d. Stock exchange E. State with reason whether the following statements are true of false. 1. Scrap value of asset reduces the amount of annual depreciation. Ans. The above statement is true because of the following reasons. i. ii. When we calculate the depreciation amount the expected scrap value of the asset is reduced from the total cost of the assets. Therefore, the total amount of depreciation per annum will also be get reduced. (5 marks)
2. When the amount of the bill is paid on the due date, it is said to be retired. Ans. The above statement is false because of the following reasons. i. ii. When the amount of the bill is paid on the due date, then it is called as honour of the bill of exchange. When the amount of the bill is paid before the due date, then it is called as retirement of the bill of exchange.
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F. Prepare bill of exchange from the following details. (5 marks) Drawer Drawee – Amount Period Payee Date of Bill Drawn – Date of Acceptance Shekhar Desai, Shastri Road, Mahad. Sharad Verma, Narayan Peth, Pune. Rs. 3500/3 months. Mukund Pande, Panvel 21st June, 2007 23rd June, 2007
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Q2. On 1 April, 2004 Saikripa enterprises purchased two computers of Rs. 40,000 each. On 1st October, 2004
they purchased one more computer for Rs. 40,000. On 1st October, 2006 they sold one of the computers, which was purchased on 1st April, 2004 for Rs. 18780. Depreciation on computers was provided @ 10% p.a. on Diminishing Balance Method and the financial year closes on 31st March every year. Prepare: computer A/c and Depreciation A/c for years 2004 – 2005, 2005 – 2006, 2006 – 2007. (September, 2008 board exam question) Ans.
st
M/s Saikripa enterprises Computer Account.
Date 1.4.2004 1.4.2004 1.10.2004 1.4.2005 Particulars To cash / bank a/c To cash/ bank a/c To cash/ bank a/c To balance b/d J F Amount 40000 40000 40000 120000 110000 110000 99000 Date 31.3.2005 31.3.2005 31.3.2006 31.3.2006 1.10.2006 1.10.2006 1.10.2006 31.3.2007 31.3.2007 1.4.2007 To balance b/d 99000 59940 Particulars By Depreciation a/c By Balance c/d By depreciation a/c By balance c/d By depreciation a/c By cash/ bank a/c [Machinery sold] By profit / loss a/c [ loss on machinery sold] By depreciation a/c 59940 J F Amount 10000 110000 120000 11000 99000 110000 1620 18780 12000 6660 49500 99000
1.4.2006
To balance b/d
Depreciation account
Date 31..3.2005 Particulars To machinery a/c J F Amount 10000 10000 11000 11000 1620 6660 8280 Date 31.3.2005 Particulars By profit & loss a/c J F Amount 10000 10000 11000 11000 8280 8280
31.3.2006 1.10.2006 31.3.2007
To Machinery a/c To Machinery a/c To Machinery a/c
31.3.2006
By profit & loss a/c
31.3.1999
By profit & loss a/c (balancing figure)
OR
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Q2. (A) For the purpose of valuation of goodwill it was agreed to consider net profits of the last 4 years and
goodwill is to be calculated at one year’s purchase of average net profits of last 4 years. The profits were IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR Rs. 80,000 Rs. 90,000 Rs. 1,05,000 Rs. 1,10,000
Ans.
&
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Q2. (B) Explain the importance of computer in modern age.
Ans. Today computers are put to a variety of uses. They have been designed with highly improved performances. Computers can be used to process voluminous data at a high speed. As regards its application in the field of accounting, a computer should be able to deal with routine accounting. It means all normal accounting processes such as financial transactions should be dealt with the use of a computer. All cash and bank transactions, handling of accounts of debtors and creditors and calculation of wages and salaries etc should be handled with the use of computer. In addition, computers can be put to other popular uses such as production, programming and control, flexible budgetary control, variance analysis, sales and forward trends etc. Following points explain the importance of computer in modern age. SPEED - In the modern world, the desire of a man to complete tasks within the stipulated time limits has been, to a large extent, fulfilled by using a computer. Computers enable us to do arithmetical computations with a high degree of speed and ease. It has enables us to do things, which would have been almost impossible earlier. The speed which computers functions are measured in Pico seconds (1/1000 of Nano – second). Thus, computers are capable of making millions of computations per second. Hence, a powerful computer is capable of completing the tasks in less than an hour, which could have taken a year for a group of people to compute. ACCURACY: - Computers are not only fast in completing a job at a great speed, but it is also performed with a high degree of accuracy. Sometimes, it is common to say that there is a “Computer error”. As a matter of fact, it is “Human error” and not a “Computer error” since a computer carries out the instructions efficiently given by the programmer. As such, if the instructions are faulty, the errors creep in the computer’s output. DILIGENCE: - By doing similar job continuously, human beings get tired which results into some mistakes. As against this, a computer is capable of doing the same job continuously error free. A computer takes the same time to complete the first calculation as well as the 10000 th calculation. Thus, the degree of diligence possessed by a computer is impossible in case the same job is done by human beings. STORAGE: - Another advantage offered by a computer is that of its enormous capability to store data. A computer is capable of storing data along with the instructions given by the programmer in the primary (main) memory. In case, the primary memory is not sufficient it can be stored in its secondary (auxiliary) memory. There are various devices used for storing the secondary memory. Some of the common devices used in secondary memory are Compact Disks, Tapes, Drums, pen Drives etc. Having large capacity to store data. VERSATILITY: - A computer possesses great versatility, which is capable of performing arithmetic calculations, logic operation of comparison and moving data within different sections of the computer and in input and output operations. Although, a computer lacks a brain of its own, it can be put to a varied uses such as preparation of mark – lists, financial accounting, share analysis etc. MISCELLANEOUS: - In addition to the above – mentioned advantages, a computer can offer economies in the form of effective managerial control, saving in labour cost because it is fully automatic.
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Q3. Anjali of Nagpur sold goods worth Rs. 25,000 to Rupali of Amaravati. On next day Ruapali paid Rs. 10,000
in cash and accepted two months bill for the balance drawn by Anjali. Anjali discounted the bill at 12% p.a. with her bank. Before due date, Rupali finds herself unable to make payment of the bill; and requests Anjali to renew it. Anjali accepts the proposal on the condition that Rupali should pay Rs. 5,000 in cash and accept new bill for one month along with interest Rs. 200 for the balance. These arrangements were carried through. The new bill was met on due date. Give journal entries in the books of Anjali. Journal of Anjali Date Particulars ?1 Rupali’s A/c………Dr. To Sales A/c (Being the goods are sold) Cash / bank a/c ………Dr Bills Receivable A/c ……… Dr. To Rupali’s A/c (Being the part payment is made and bill is drawn) Cash/ Bank A/c ……… Dr. Discount A/c ………… Dr. To Bills Receivable A/c (being the bill is discounted) Rupali’s A/c ……… Dr To Cash/Bank A/c (being the bill is dishonored) Cash/ bank a/c………… Dr To Rupali’s A/c (being the part payment is made) Rupali’s A/c ……… Dr. To Interest a/c (being the interest is charged on balance amount) Bills Receivable A/c ………… Dr. To Rupali’s A/c (being the new bill is drawn along with interest) Cash/ bank a/c ……… Dr. To Bills receivable a/c (being the new bill is honored) L Debit Credit F 25000 25000 10000 15000 25000 14700 300 15000 15000 15000 5000 5000 200 200 10200 10200 10200 10200
2
3
4
5
6
7
8
OR
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Q3. Journalize the following transactions in the books of M/s Tirupati:
1. Kailas informed Tirupati that Ameet’s acceptance for Rs. 1,000/- endorsed to him, has been dishonoured. Noting Charged amounted Rs. 40/-. 2. Vilas renews his acceptance to Tirupati for Rs. 800/- by paying Rs. 400/- in cash and accepting a fresh bill for the balance plus interest at 12% p.a. for 3 months. 3. Kalpana’s acceptance to tirupati for Rs. 6,000 retired one month before due date at a discount of 10% p.a. 4. Bank informs Tirupati the dishonor of Kavita’s acceptance of Rs. 2,500 discounted with Bank. Noting charges Rs. 50/-. Journal entries in the books of Tirupati
Date Particulars a Amit’s’s A/c ……… Dr. To Kailas’s’s (being the endorsed bill is dishonored along with noting charges) Vila’s A/c ……… Dr. To Bills Receivable a/c (being the bill is dishonored) Cash / bank a/c ……… Dr. To Vila’s a/c (being the part payment is made) Vila’s A/c ……… Dr. To Interest A/c (being the interest is charged on balance amount) Bills receivable a/c ……… Dr. To Vila’s A/c (being the new bill is drawn along with interest) Cash/ bank a/c ……… Dr. Rebate’s A/c ……… Dr. To Bill’s Receivable A/c (being the bill is retired) Kavita’s A/c ………… Dr. To Cash/ bank A/c (bein the discounted bill is dishonored along with noting charges) L Debit Credit F 1040 1040 800 800 400 400 12 12 412 412 5950 50 6000 2550 2550
b i.
ii.
iii.
iv.
c
d
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Q4. Harsha and Varsha entered into a joint venture to buy and sell computers and share the profit or loss in
the proportion of 2:1 respectively. Harsha purchased 10 computers @ Rs. 40000 each and paid Rs. 12,000 for transport charges, insurance charges, etc. Varsha bought 8 computers @ 42000 each and spent Rs. 10000 on freight and insurance. Harsha sold 8 computers @ 48,000 each and paid selling expenses Rs. 2000 and took over one computer at an agreed price of Rs. 32000 for personal use. Remaining computer were sold by varsha @ Rs. 45000 each and spent Rs. 2500 on miscellaneous expenses. The co – ventures closed their venture and settled their accounts. Prepare the Joint venture A/c and the co – venture’s account in the books of Harsha. In the books of Harsha Joint venture account
Particulars Amount Amount Particulars Amount Amount To Goods a/c 400000 By Cash / bank a/c 384000 To cash / bank account 12000 By varsha’s a/c 405000 To Varsha’s account 336000 By cash /bank a/c 32000 To Varsha’s Account 10000 To Cash/ Bank account 2000 To Varsha’s Account 2500 To profit on joint venture transferred to Profit / loss A/c 39000 Varsha’s account 19500 58500 821000 821000
Varsha’s Account
Particulars Amount Amount Particulars Amount Amount To Joint venture a/c 405000 By Joint venture a/c 336000 By Joint venture a/c 10000 By Joint venture a/c 2500 By Joint venture a/c 19500 (profit) By cash/ bank a/c 37000 (balancing figure) 46000 46000
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Q5. Following is the records of Mr. Raj were kept on single entry system. ( March 2009 board exam
questions) Particulars Stock Furniture Plant and machinery Loan taken Bank balance Debtors Creditors 31.3.2006 15000 53500 42500 21000 1900 43000 18000 31.3.2007 14000 44000 55500 21000 2100 35000 14900
Mr. Raj invested Rs. 4000 in the business. Also he had withdrawn Rs. 15000 for his private expenses from business. Rs. 500 to be provided for bad debts. Depreciate plant and machinery @5% and furniture @ 5%. Prepare : (1) statement of affairs as on 31.3.2006. (2) statement of affairs as on 31.3.2007. (3) statement of profit and loss for the year ended on 31.3.2007. In the books of Mr. Raj Statement of affairs as on 31st March, 2006 Liabilities Amount Assets Amount Loan taken 21000 Stock 15000 Creditors 18000 Furniture 53500 Capital at the beginning of the year 116900 Plant and machinery 42500 Bank balance 1900 Debtors 43000 155900 155900 st Statement of affairs as on 31 March, 2007 Liabilities Amount Assets Amount Loan taken 21000 Stock 14000 Creditors 14900 Furniture 44000 Capital at the end of the year 114700 Plant and machinery 55500 Bank balance 2100 Debtors 35000 150600 150600
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Statement of profit or loss for the year ended 31st March, 2007 Particulars Capital at the end of the year Add: Drawings Less: Additional capital introduced Less: Capital at the beginning of the year GROSS PROFIT Less: Depreciation On Machinery = (55000)(5/100)(12/12) = 2775 On Furniture = (44000)(5/100)(12/12) = 2200 LESS: BAD DEBTS NET PROFIT Amount 114700 15000 129700 (4000) 125700 (116900) 8800
(4975) 3825 (500) 3325
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Q6. Ashok, kishor and Anup undertook the construction of office building at a contract price of Rs.
10,00,000. The contract price is to be received in cash Rs. 6,00,000 and Rs. 4,00,000 in shares of that company. They opened a Joint bank account and contributed the following amounts: Ashok – Rs. 3,00,000, Kishor – Rs. 3,00,000 and Anup Rs. 2,00,000. Ashok pays Rs. 10,000 towards an Architect’s fee, Kishor brings into the venture mixer of Rs. 25,000. Anup brings into venture a truck worth Rs. 55,000. The following transactions were made from the joint bank account 1. Purchase of material Rs. 4,50,000. 2. Payment of wages Rs. 1,50,000. 3. Purchase of plant Rs. 30,000. At the close of the venture. Ashok took over the unused material worth Rs. 8,000. Kishor took back the mixer worth Rs. 15,000. Anup took back truck worth Rs. 35,000. The scrap value of plant realised Rs. 6,000. The contract price was received as agreed and Kishor took over shares at a value of Rs. 4,10,000. Prepare : (1) Joint venture account (2) Joint bank account (3) Co – venturer’s account. (October 2006 , board exam questions) In the books of Joint venture Joint venture account
Particulars To Join bank a/c Materials Wages Plant To Ashok’s A/c (architect fees) To Kishor’s A/c (venture mixture) To Anup’s A/c (truck) To profit on joint venture transferred to Ashok Kishor Anup Amount 450000 150000 30000 Amount Particulars By Joint Bank a/c (contract price) By Shares a/c (contract price) By joint bank a/c (plant sold) By Ashok’s A/c (Materials taken over) By Kishor’s A/c (Mixer taken over) By Anup’s A/c (truck taken over)( Amount Amount 600000 400000 6000 8000
630000 10000 25000
55000
15000 35000
118000 118000 118000
354000 1074000
1074000
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CO – VENTURERS’ ACCOUNT
Particulars Ashok Kishor Anup To Joint venture a/c 8000 15000 35000 To shares a/c 410000 To joint bank a/c 420000 18000 338000 428000 443000 373000 Particulars Ashok By joint bank a/c 300000 By joint venture A/c 10000 By joint venture A/c 118000 428000 Kishor 300000 25000 118000 443000 Anup 200000 55000 118000 373000
Joint Bank A/c
Particulars To Ashok’s A/c To Kishor’s A/c To Anup’s A/c To joint venture A/c To Joint Venture A/c Amount 300000 300000 200000 6000 600000 1406000 Particulars By joint venture a/c By Ashok’s A/c By Kishor’s A/c By Anup’s A/c Amount 630000 420000 18000 338000 1406000
Shares A/c
Particulars Amount Particulars Amount To Joint venture A/c 400000 By Kishor’s A/c 410000 To Joint venture a/c 10000 (Bal. Fig.) 410000 410000
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Q7. Following is the Trial Balance of Kalavati and Lilavati as on 31st March, 2005 who share profits and
losses in the ration of 3:2. Interest on capital was allowed @5% p.a. Trial balance as on 31st March, 2005 Particulars Opening stock Sundry debtors Purchases Wages Salaries Office expenses Discount Rent, rates and taxes Plant and machinery Return inwards Land and buildings Cash at bank Current account :Kalavati Lilavati Government bonds Additional information: 1. 2. 3. 4. 5. 6. Closing stock was valued at Rs. 20,500. Unpaid wages Rs. 750; outstanding salary Rs. 657. Write off Rs. 100 as bad debts and provide R.D.D. at 5% on debtors. Provide depreciation and plant and machinery at 10% p.a. and on Land and building at 5% p.a. Rent, Rates & Taxes were prepaid Rs. 100. Bills payable included a dishonoured bill of Rs. 3000. Amount 10000 14100 20000 4250 1350 1223 650 900 15000 1750 32000 4327 2100 600 3000 1,11,250 Particulars Return outwards Sundry creditors Sales R.D.D. Capital accounts : Kalavati Lilavati Loan @ 9% p.a. (taken on 1-10-2004) Bills payable Amount 1250 15800 35000 200 35000 10000 2000 12000
1,11,250
Prepare Trading account and profit and loss account for the year ending 31 st March, 2005 and a balance sheet as on that date. (October 2006 board exam questions.)
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In the books of Kalavati & Lilavati Trading account for the year ended 31st March, 2005.
Particulars Amount Amount Particulars Amount Amount To opening stock 10000 By sales 35000 To purchases 20000 (-) return (1750) 33250 (-)return (1250) 18750 By closing stock 20500 To wages 4250 (+) outstanding 750 5000 To Gross profit c/d 20000 53750 53750
Profit and loss account for the year ended 31st March, 2005
Particulars Amount Amount Particulars Amount Amount To Salaries 1350 By gross profit b/d 20000 (+) outstanding 657 2007 To Office expenses 1223 To discount 650 To rent, rates & taxes 900 (-) prepaid 100 800 To Bad debts ----(+) FBD 100 (+) NRDD 700 (-) ORDD 200 600 TO Depreciation Plant & machinery 1500 Land & buildings 1600 3100 To interest on loan 90 To interest on capital Kalavati 1750 Lilavati 500 2250 To current a/c Kalavati 5568 Lilavati 3712 9280 20000 20000
Partners’ current accounts
Particulars Kalavati Lilavati Particulars Kalavati Lilavati To balance b/d 2100 600 By interest on capital 1750 500 To balance c/d 5218 3612 5568 3712 7318 4212 7318 4212
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Balance sheet as on 31st March, 2005
Liabilities Capital account Kalavati Lilavati Current account Kalavati Lilavati Sundry creditors (+) bills payable dishonoured Bills payable (-) bills payable dishonoured Outstanding Salaries Wages Load @ 9% (+) interest Rs. 35000 10000 5218 3612 15800 3000 12000 3000 657 750 2000 90 Rs. Assets Land & building (-) depreciation@5% 45000 Plan & Machinery (-) depreciation @10% Sundry debtors 8830 (-) F.B.D. 18800 (-) N.R.D.D. Closing stock 9000 Prepaid rent, rates, & tax Cash at bank 1407 2090 85127 Rs. 32000 1600 15000 1500 14100 100 14000 700 Rs. 30400 13500
13300 20500 100 7327
85127
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OMTEX CLASSES TIME: - 3 HRS I ST PRELIMINARY EXAMINATION DATE: - 16.11.2010 BOOK KEEPING & ACCOUNTANCY DAY - TUESDAY GROUP: B MARKS: -100
Q1. Attempt any four of the following.
A. Answer in one sentence each. 1. Which types of expenses are debited to trading account?
(20 marks)
(5 marks)
Ans. The direct expenses related to purchase of goods are debited to trading account. 2. What is Reserve Fund? Ans. Reserve fund is the accumulated profit which is kept a side as a reserve to serve the firm for the future needs. 3. Who is an endorser? Ans. A person who endorses the ownership of the bill he is known as endorser. 4. What is goodwill? Ans. Goodwill is the monetary value of the business expressed in terms of money. 5. Why is Joint Bank Account opened? Ans. Joint bank account is opened to record the coventurers bank transaction relation to the joint venture business. B. Write the word/term/phrase which can substitute each of the following statement: (5 marks) 1. A statement showing financial position of the business. Ans. Balance sheet 2. Making the payment of bill before its due date. Ans. Retirement of the bill of exchange 3. List of debit and credit balances of the ledger accounts. Ans. Trial balance 4. The relationship between persons who have agreed to share profit or loss in Joint Venture Business. Ans. coventurers 5. A Partner who only lends his name to the firm. Ans. Nominal partner
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C. Match the following pairs. Group A 1. 2. 3. 4. 5. Partnership deed Fixed capital method. Unexpired expenses Temporary Partnership Pure Single Entry System a. b. c. d. e.
(5 marks) Group B Written agreement between the partners Current a/c of partners Assets Joint venture Only personal account
D. Select the most appropriate alternative from hose given below each statement. (5 marks) 1. Reserve for discount on ______________ has a debit balance. a. Debtors
b. Creditors
c. Bills Receivable d. Loan advanced. 2. Income Statements and Balance Sheet are prepared in a systematic and scientific manner under ________________
a. Double Entry System.
b. Single Entry System c. Partial Entry System. d. Indian System. 3. Before accepting a bill, it is called a _________ a. Note
b. Draft
c. Hundi d. Request. 4. Valuation of goodwill depends upon ________ capacity of business. a. Normal b. Repaying
c. Earning
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d. Capital 5. If two or more persons come together to carry on a business activity for a short period, it is known as ___________
a. Joint venture
b. Consignment c. Partnership d. Stock exchange E. State with reason whether the following statements are true of false. 1. Scrap value of asset reduces the amount of annual depreciation. Ans. The above statement is true because of the following reasons. i. ii. When we calculate the depreciation amount the expected scrap value of the asset is reduced from the total cost of the assets. Therefore, the total amount of depreciation per annum will also be get reduced. (5 marks)
2. When the amount of the bill is paid on the due date, it is said to be retired. Ans. The above statement is false because of the following reasons. i. ii. When the amount of the bill is paid on the due date, then it is called as honour of the bill of exchange. When the amount of the bill is paid before the due date, then it is called as retirement of the bill of exchange.
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F. Prepare bill of exchange from the following details. (5 marks) Drawer Drawee – Amount Period Payee Date of Bill Drawn – Date of Acceptance Shekhar Desai, Shastri Road, Mahad. Sharad Verma, Narayan Peth, Pune. Rs. 3500/3 months. Mukund Pande, Panvel 21st June, 2007 23rd June, 2007
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Q2. On 1 April, 2004 Saikripa enterprises purchased two computers of Rs. 40,000 each. On 1st October, 2004
they purchased one more computer for Rs. 40,000. On 1st October, 2006 they sold one of the computers, which was purchased on 1st April, 2004 for Rs. 18780. Depreciation on computers was provided @ 10% p.a. on Diminishing Balance Method and the financial year closes on 31st March every year. Prepare: computer A/c and Depreciation A/c for years 2004 – 2005, 2005 – 2006, 2006 – 2007. (September, 2008 board exam question) Ans.
st
M/s Saikripa enterprises Computer Account.
Date 1.4.2004 1.4.2004 1.10.2004 1.4.2005 Particulars To cash / bank a/c To cash/ bank a/c To cash/ bank a/c To balance b/d J F Amount 40000 40000 40000 120000 110000 110000 99000 Date 31.3.2005 31.3.2005 31.3.2006 31.3.2006 1.10.2006 1.10.2006 1.10.2006 31.3.2007 31.3.2007 1.4.2007 To balance b/d 99000 59940 Particulars By Depreciation a/c By Balance c/d By depreciation a/c By balance c/d By depreciation a/c By cash/ bank a/c [Machinery sold] By profit / loss a/c [ loss on machinery sold] By depreciation a/c 59940 J F Amount 10000 110000 120000 11000 99000 110000 1620 18780 12000 6660 49500 99000
1.4.2006
To balance b/d
Depreciation account
Date 31..3.2005 Particulars To machinery a/c J F Amount 10000 10000 11000 11000 1620 6660 8280 Date 31.3.2005 Particulars By profit & loss a/c J F Amount 10000 10000 11000 11000 8280 8280
31.3.2006 1.10.2006 31.3.2007
To Machinery a/c To Machinery a/c To Machinery a/c
31.3.2006
By profit & loss a/c
31.3.1999
By profit & loss a/c (balancing figure)
OR
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Q2. (A) For the purpose of valuation of goodwill it was agreed to consider net profits of the last 4 years and
goodwill is to be calculated at one year’s purchase of average net profits of last 4 years. The profits were IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR Rs. 80,000 Rs. 90,000 Rs. 1,05,000 Rs. 1,10,000
Ans.
&
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Q2. (B) Explain the importance of computer in modern age.
Ans. Today computers are put to a variety of uses. They have been designed with highly improved performances. Computers can be used to process voluminous data at a high speed. As regards its application in the field of accounting, a computer should be able to deal with routine accounting. It means all normal accounting processes such as financial transactions should be dealt with the use of a computer. All cash and bank transactions, handling of accounts of debtors and creditors and calculation of wages and salaries etc should be handled with the use of computer. In addition, computers can be put to other popular uses such as production, programming and control, flexible budgetary control, variance analysis, sales and forward trends etc. Following points explain the importance of computer in modern age. SPEED - In the modern world, the desire of a man to complete tasks within the stipulated time limits has been, to a large extent, fulfilled by using a computer. Computers enable us to do arithmetical computations with a high degree of speed and ease. It has enables us to do things, which would have been almost impossible earlier. The speed which computers functions are measured in Pico seconds (1/1000 of Nano – second). Thus, computers are capable of making millions of computations per second. Hence, a powerful computer is capable of completing the tasks in less than an hour, which could have taken a year for a group of people to compute. ACCURACY: - Computers are not only fast in completing a job at a great speed, but it is also performed with a high degree of accuracy. Sometimes, it is common to say that there is a “Computer error”. As a matter of fact, it is “Human error” and not a “Computer error” since a computer carries out the instructions efficiently given by the programmer. As such, if the instructions are faulty, the errors creep in the computer’s output. DILIGENCE: - By doing similar job continuously, human beings get tired which results into some mistakes. As against this, a computer is capable of doing the same job continuously error free. A computer takes the same time to complete the first calculation as well as the 10000 th calculation. Thus, the degree of diligence possessed by a computer is impossible in case the same job is done by human beings. STORAGE: - Another advantage offered by a computer is that of its enormous capability to store data. A computer is capable of storing data along with the instructions given by the programmer in the primary (main) memory. In case, the primary memory is not sufficient it can be stored in its secondary (auxiliary) memory. There are various devices used for storing the secondary memory. Some of the common devices used in secondary memory are Compact Disks, Tapes, Drums, pen Drives etc. Having large capacity to store data. VERSATILITY: - A computer possesses great versatility, which is capable of performing arithmetic calculations, logic operation of comparison and moving data within different sections of the computer and in input and output operations. Although, a computer lacks a brain of its own, it can be put to a varied uses such as preparation of mark – lists, financial accounting, share analysis etc. MISCELLANEOUS: - In addition to the above – mentioned advantages, a computer can offer economies in the form of effective managerial control, saving in labour cost because it is fully automatic.
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Q3. Anjali of Nagpur sold goods worth Rs. 25,000 to Rupali of Amaravati. On next day Ruapali paid Rs. 10,000
in cash and accepted two months bill for the balance drawn by Anjali. Anjali discounted the bill at 12% p.a. with her bank. Before due date, Rupali finds herself unable to make payment of the bill; and requests Anjali to renew it. Anjali accepts the proposal on the condition that Rupali should pay Rs. 5,000 in cash and accept new bill for one month along with interest Rs. 200 for the balance. These arrangements were carried through. The new bill was met on due date. Give journal entries in the books of Anjali. Journal of Anjali Date Particulars ?1 Rupali’s A/c………Dr. To Sales A/c (Being the goods are sold) Cash / bank a/c ………Dr Bills Receivable A/c ……… Dr. To Rupali’s A/c (Being the part payment is made and bill is drawn) Cash/ Bank A/c ……… Dr. Discount A/c ………… Dr. To Bills Receivable A/c (being the bill is discounted) Rupali’s A/c ……… Dr To Cash/Bank A/c (being the bill is dishonored) Cash/ bank a/c………… Dr To Rupali’s A/c (being the part payment is made) Rupali’s A/c ……… Dr. To Interest a/c (being the interest is charged on balance amount) Bills Receivable A/c ………… Dr. To Rupali’s A/c (being the new bill is drawn along with interest) Cash/ bank a/c ……… Dr. To Bills receivable a/c (being the new bill is honored) L Debit Credit F 25000 25000 10000 15000 25000 14700 300 15000 15000 15000 5000 5000 200 200 10200 10200 10200 10200
2
3
4
5
6
7
8
OR
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Q3. Journalize the following transactions in the books of M/s Tirupati:
1. Kailas informed Tirupati that Ameet’s acceptance for Rs. 1,000/- endorsed to him, has been dishonoured. Noting Charged amounted Rs. 40/-. 2. Vilas renews his acceptance to Tirupati for Rs. 800/- by paying Rs. 400/- in cash and accepting a fresh bill for the balance plus interest at 12% p.a. for 3 months. 3. Kalpana’s acceptance to tirupati for Rs. 6,000 retired one month before due date at a discount of 10% p.a. 4. Bank informs Tirupati the dishonor of Kavita’s acceptance of Rs. 2,500 discounted with Bank. Noting charges Rs. 50/-. Journal entries in the books of Tirupati
Date Particulars a Amit’s’s A/c ……… Dr. To Kailas’s’s (being the endorsed bill is dishonored along with noting charges) Vila’s A/c ……… Dr. To Bills Receivable a/c (being the bill is dishonored) Cash / bank a/c ……… Dr. To Vila’s a/c (being the part payment is made) Vila’s A/c ……… Dr. To Interest A/c (being the interest is charged on balance amount) Bills receivable a/c ……… Dr. To Vila’s A/c (being the new bill is drawn along with interest) Cash/ bank a/c ……… Dr. Rebate’s A/c ……… Dr. To Bill’s Receivable A/c (being the bill is retired) Kavita’s A/c ………… Dr. To Cash/ bank A/c (bein the discounted bill is dishonored along with noting charges) L Debit Credit F 1040 1040 800 800 400 400 12 12 412 412 5950 50 6000 2550 2550
b i.
ii.
iii.
iv.
c
d
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Q4. Harsha and Varsha entered into a joint venture to buy and sell computers and share the profit or loss in
the proportion of 2:1 respectively. Harsha purchased 10 computers @ Rs. 40000 each and paid Rs. 12,000 for transport charges, insurance charges, etc. Varsha bought 8 computers @ 42000 each and spent Rs. 10000 on freight and insurance. Harsha sold 8 computers @ 48,000 each and paid selling expenses Rs. 2000 and took over one computer at an agreed price of Rs. 32000 for personal use. Remaining computer were sold by varsha @ Rs. 45000 each and spent Rs. 2500 on miscellaneous expenses. The co – ventures closed their venture and settled their accounts. Prepare the Joint venture A/c and the co – venture’s account in the books of Harsha. In the books of Harsha Joint venture account
Particulars Amount Amount Particulars Amount Amount To Goods a/c 400000 By Cash / bank a/c 384000 To cash / bank account 12000 By varsha’s a/c 405000 To Varsha’s account 336000 By cash /bank a/c 32000 To Varsha’s Account 10000 To Cash/ Bank account 2000 To Varsha’s Account 2500 To profit on joint venture transferred to Profit / loss A/c 39000 Varsha’s account 19500 58500 821000 821000
Varsha’s Account
Particulars Amount Amount Particulars Amount Amount To Joint venture a/c 405000 By Joint venture a/c 336000 By Joint venture a/c 10000 By Joint venture a/c 2500 By Joint venture a/c 19500 (profit) By cash/ bank a/c 37000 (balancing figure) 46000 46000
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Q5. Following is the records of Mr. Raj were kept on single entry system. ( March 2009 board exam
questions) Particulars Stock Furniture Plant and machinery Loan taken Bank balance Debtors Creditors 31.3.2006 15000 53500 42500 21000 1900 43000 18000 31.3.2007 14000 44000 55500 21000 2100 35000 14900
Mr. Raj invested Rs. 4000 in the business. Also he had withdrawn Rs. 15000 for his private expenses from business. Rs. 500 to be provided for bad debts. Depreciate plant and machinery @5% and furniture @ 5%. Prepare : (1) statement of affairs as on 31.3.2006. (2) statement of affairs as on 31.3.2007. (3) statement of profit and loss for the year ended on 31.3.2007. In the books of Mr. Raj Statement of affairs as on 31st March, 2006 Liabilities Amount Assets Amount Loan taken 21000 Stock 15000 Creditors 18000 Furniture 53500 Capital at the beginning of the year 116900 Plant and machinery 42500 Bank balance 1900 Debtors 43000 155900 155900 st Statement of affairs as on 31 March, 2007 Liabilities Amount Assets Amount Loan taken 21000 Stock 14000 Creditors 14900 Furniture 44000 Capital at the end of the year 114700 Plant and machinery 55500 Bank balance 2100 Debtors 35000 150600 150600
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Statement of profit or loss for the year ended 31st March, 2007 Particulars Capital at the end of the year Add: Drawings Less: Additional capital introduced Less: Capital at the beginning of the year GROSS PROFIT Less: Depreciation On Machinery = (55000)(5/100)(12/12) = 2775 On Furniture = (44000)(5/100)(12/12) = 2200 LESS: BAD DEBTS NET PROFIT Amount 114700 15000 129700 (4000) 125700 (116900) 8800
(4975) 3825 (500) 3325
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Q6. Ashok, kishor and Anup undertook the construction of office building at a contract price of Rs.
10,00,000. The contract price is to be received in cash Rs. 6,00,000 and Rs. 4,00,000 in shares of that company. They opened a Joint bank account and contributed the following amounts: Ashok – Rs. 3,00,000, Kishor – Rs. 3,00,000 and Anup Rs. 2,00,000. Ashok pays Rs. 10,000 towards an Architect’s fee, Kishor brings into the venture mixer of Rs. 25,000. Anup brings into venture a truck worth Rs. 55,000. The following transactions were made from the joint bank account 1. Purchase of material Rs. 4,50,000. 2. Payment of wages Rs. 1,50,000. 3. Purchase of plant Rs. 30,000. At the close of the venture. Ashok took over the unused material worth Rs. 8,000. Kishor took back the mixer worth Rs. 15,000. Anup took back truck worth Rs. 35,000. The scrap value of plant realised Rs. 6,000. The contract price was received as agreed and Kishor took over shares at a value of Rs. 4,10,000. Prepare : (1) Joint venture account (2) Joint bank account (3) Co – venturer’s account. (October 2006 , board exam questions) In the books of Joint venture Joint venture account
Particulars To Join bank a/c Materials Wages Plant To Ashok’s A/c (architect fees) To Kishor’s A/c (venture mixture) To Anup’s A/c (truck) To profit on joint venture transferred to Ashok Kishor Anup Amount 450000 150000 30000 Amount Particulars By Joint Bank a/c (contract price) By Shares a/c (contract price) By joint bank a/c (plant sold) By Ashok’s A/c (Materials taken over) By Kishor’s A/c (Mixer taken over) By Anup’s A/c (truck taken over)( Amount Amount 600000 400000 6000 8000
630000 10000 25000
55000
15000 35000
118000 118000 118000
354000 1074000
1074000
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CO – VENTURERS’ ACCOUNT
Particulars Ashok Kishor Anup To Joint venture a/c 8000 15000 35000 To shares a/c 410000 To joint bank a/c 420000 18000 338000 428000 443000 373000 Particulars Ashok By joint bank a/c 300000 By joint venture A/c 10000 By joint venture A/c 118000 428000 Kishor 300000 25000 118000 443000 Anup 200000 55000 118000 373000
Joint Bank A/c
Particulars To Ashok’s A/c To Kishor’s A/c To Anup’s A/c To joint venture A/c To Joint Venture A/c Amount 300000 300000 200000 6000 600000 1406000 Particulars By joint venture a/c By Ashok’s A/c By Kishor’s A/c By Anup’s A/c Amount 630000 420000 18000 338000 1406000
Shares A/c
Particulars Amount Particulars Amount To Joint venture A/c 400000 By Kishor’s A/c 410000 To Joint venture a/c 10000 (Bal. Fig.) 410000 410000
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Q7. Following is the Trial Balance of Kalavati and Lilavati as on 31st March, 2005 who share profits and
losses in the ration of 3:2. Interest on capital was allowed @5% p.a. Trial balance as on 31st March, 2005 Particulars Opening stock Sundry debtors Purchases Wages Salaries Office expenses Discount Rent, rates and taxes Plant and machinery Return inwards Land and buildings Cash at bank Current account :Kalavati Lilavati Government bonds Additional information: 1. 2. 3. 4. 5. 6. Closing stock was valued at Rs. 20,500. Unpaid wages Rs. 750; outstanding salary Rs. 657. Write off Rs. 100 as bad debts and provide R.D.D. at 5% on debtors. Provide depreciation and plant and machinery at 10% p.a. and on Land and building at 5% p.a. Rent, Rates & Taxes were prepaid Rs. 100. Bills payable included a dishonoured bill of Rs. 3000. Amount 10000 14100 20000 4250 1350 1223 650 900 15000 1750 32000 4327 2100 600 3000 1,11,250 Particulars Return outwards Sundry creditors Sales R.D.D. Capital accounts : Kalavati Lilavati Loan @ 9% p.a. (taken on 1-10-2004) Bills payable Amount 1250 15800 35000 200 35000 10000 2000 12000
1,11,250
Prepare Trading account and profit and loss account for the year ending 31 st March, 2005 and a balance sheet as on that date. (October 2006 board exam questions.)
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In the books of Kalavati & Lilavati Trading account for the year ended 31st March, 2005.
Particulars Amount Amount Particulars Amount Amount To opening stock 10000 By sales 35000 To purchases 20000 (-) return (1750) 33250 (-)return (1250) 18750 By closing stock 20500 To wages 4250 (+) outstanding 750 5000 To Gross profit c/d 20000 53750 53750
Profit and loss account for the year ended 31st March, 2005
Particulars Amount Amount Particulars Amount Amount To Salaries 1350 By gross profit b/d 20000 (+) outstanding 657 2007 To Office expenses 1223 To discount 650 To rent, rates & taxes 900 (-) prepaid 100 800 To Bad debts ----(+) FBD 100 (+) NRDD 700 (-) ORDD 200 600 TO Depreciation Plant & machinery 1500 Land & buildings 1600 3100 To interest on loan 90 To interest on capital Kalavati 1750 Lilavati 500 2250 To current a/c Kalavati 5568 Lilavati 3712 9280 20000 20000
Partners’ current accounts
Particulars Kalavati Lilavati Particulars Kalavati Lilavati To balance b/d 2100 600 By interest on capital 1750 500 To balance c/d 5218 3612 5568 3712 7318 4212 7318 4212
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Balance sheet as on 31st March, 2005
Liabilities Capital account Kalavati Lilavati Current account Kalavati Lilavati Sundry creditors (+) bills payable dishonoured Bills payable (-) bills payable dishonoured Outstanding Salaries Wages Load @ 9% (+) interest Rs. 35000 10000 5218 3612 15800 3000 12000 3000 657 750 2000 90 Rs. Assets Land & building (-) depreciation@5% 45000 Plan & Machinery (-) depreciation @10% Sundry debtors 8830 (-) F.B.D. 18800 (-) N.R.D.D. Closing stock 9000 Prepaid rent, rates, & tax Cash at bank 1407 2090 85127 Rs. 32000 1600 15000 1500 14100 100 14000 700 Rs. 30400 13500
13300 20500 100 7327
85127
