Financial Accounting question paper (syllabus 2002)

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SECTION-I

Compiles Question asked in the Intermediate Examination of ICWAI under Syllabus 2002 from June ’04 onwards.

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[GROUP - I]

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FINANCIAL ACCOUNTING















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FINANCIAL ACCOUNTING BASIC CONCEPTS

Objective Objec tive -Type -Type Questions Questions : Q1. Can a company change the method of providing depreciation? [Ref Ref :: Q1. (i), Dec ’06 ’06 / Pape Paper-10] r-10] Q2. What are the three major considerations governing the selection and application application of Accounting Policies? [Ref Ref :: Q1. Q1. (a), (a), Dec Dec ’08 ’08 / Pape Paper-10] r-10] Q3.. Dist Q3 Disting inguis uish h betw between een pr prop oprie rieta tary ry the theory ory and ent entity ity the theor ory. y.

[Ref Ref :: Q1. Q1. (j), (j), Dec ’07 / Pape Paper-10] r-10]

Q4.. (a) List out any four of accou Q4 accounting nting conce concepts. pts. (b)) Stat (b Statee the components components of financial financial statement. statement. (c)) State with (c with reaso reasons ns whether whether the following following stateme statements nts are True True or False False :(i) Accounting principle is general rule followed in preparation of financial statements. [Ref Ref :: Q1. (a), (c), (c), (e)(i), (e)(i), June ’07 ’07 / Pape Paper-10 r-10]] Q5. Accounting involves communication. — Comment.

[Ref Ref :: Q1. Q1. (a), (a), Dec Dec ’06 ’06 / Pape Paper-10] r-10]

Q6.. (a) What according Q6 according to ICAI ICAI conceptual conceptual framework, framework, are are the qualitative qualitative characteris characteristics tics that financial statements should observe and maintain in order to improve the usefulness of financial information? (b)) What is negative (b negative net worth? worth? (c)) What is meant (c meant by ‘general ‘general purpose purpose financial financial statement’? statement’? (d)) Briefly state the three major characteristics which should be considered for the (d the purpose of selection and application of acounting policies. [Ref Ref :: Q1. (b), (b), (c), (c), (d), (d), (e) June ’06 ’06 / Pape Paper-10 r-10]] Q7.. (a) A company Q7 company has incurred incurred a net loss during during an accounting accounting period, period, but its its net worth (assets (assets – liabilities) has increased. How could this happen? (b)) What is the implicati (b implication on of a high price earning earning (P/E) ratio? ratio? (c) Indica Indicate te any three areas in respect of which different different accounting accounting policies policies may be adopted by different enterprises. [Ref Ref :: Q1. Q1. (b), (b), (c), (c), (e) (e) Dec ’05 / Pape Paper-10 r-10]] Q8.. (a) What is the primary Q8 primary considerat consideration ion in the selection selection of accounting accounting policies policies by an enterprise enterprise?? (b)) Which of the following (b following is not a satisfactory satisfactory balance balance sheet equation? equation? (i)) Ass (i Assets ets – liabi liabilit lities ies = owner owners’ s’ equit equity; y; (ii) (i i) Asse Assets ts = liabil liabiliti ities es + owners’ owners’ equi equity; ty; (iii) (ii i) Ass Assets ets = liabi liabilit lities ies – owner owners’ s’ equ equity ity;; (iv) (i v) Ass Assets ets – owners owners’’ equity equity = liabil liabiliti ities. es. (c) St Stat atee any any tw two o way wayss to to cre creat atee a Se Secr cret et Re Rese serv rve. e.

[Ref Ref :: Q1. Q1. (a), (a), (g), (g), (h) June ’04 / Pape Paper-10] r-10]
















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Descriptive & Practical Practical Questions Questions : Q1. Write Write short short notes notes of of the foll following owing : (a) Phases of Accou Accounting nting proc process. ess. (b) Accrual basis of Accounting.

[Ref Ref :: Q8. (a) , (b) (b) Dec ’07 ’07 / Paper Paper-10] -10] [Ref Ref :: Q8. Q8. (a) (a) Jun Junee ’04 ’04 / Pap Paperer-10] 10]

Q2. (a) Conceptual Framework of Accounting.

Q3. The following following is the Balance Sheet Sheet of the the retail business business of Sri Lahiri as at 31st 31st December, December, 2007 : Liabilities

Sri Lahiri’s Capital Liabilities for Goods Rent

Rs.

2,00,000 4 1,0 00 2, 000

Assets

Rs.

Furniture Stock Debtors Cash at Bank Cash in hand

20 ,0 00 1,40,000 50 ,0 00 29 ,0 00 4, 000

2,43,000

2,43,000

You are finished with the following following information : (1) (2) (3) (4)

Sri Lahiri Lahiri sells sells his goods goods at a profit profit of 20% on sales. sales. Goods are sold for cash and credit. credit. Credit customers customers pay by cheques only. Payments Paymen ts for purchase purchasess are always always made by cheque cheques. s. It is practice practice of Sri Lahiri to send send to the Bank every every weekend the collection collectionss of the week after paying every week salary of Rs. 900 to the clerk, Sundry expense s of Rs. 150 and personal expenses Rs. 300.

Analysis of the Bank Pass Book for the 13 weeks period ending 31st March, 2008 disclosed the follow fol lowing ing : Rs. Payments to creditors Payments of rent upto 31.3.2008 by cheque Amounts deposited into the bank (including Rs. 60,000 received from debtors by cheques) The fo following are th the ba balances on 31st Ma March, 2008 : Stock Debtors Creditors for goods

1, 50 , 0 0 0 8,0 00 2 , 50 , 0 0 0

Rs. 8 0, 000 6 0, 000 7 3, 000

On the evening of 31st March, 2008 the Cashier absconded with the available cash in the cash book. There was no cash deposit in the weekend on that date. You are required to prepare a statement showing the amount of cash defalcated defal cated by the Cashier and als also o work working ing not notes es on on (1) Pur Purcha chases ses (2) Tot Total al Sal Sales es (3) (3) Cre Credit dit Sal Sales es (4) (4) Cas Cash h Sales Sales for the 13 weeks weeks upto 31.3.2008 31.3.2008 and and Bank Balance Balance as as on that date. date. [Ref Ref :: Q4. Dec ’08 ’08 / Pap Paperer-10] 10]
















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HIRE PURCHASE

Objective Objec tive -Type -Type Questions Questions : Q1. State the function of “interest suspense account” under the Instalment purchase system. [Ref Ref :: Q1. (e) June June ’04 ’04 / Pape Paper-10] r-10]

Descriptive & Practical Practical Questions Questions : Q1.. A machinery Q1 machinery is sold on hire hire purchase. purchase. The terms of payment payment is four four annual instalmen instalments ts of Rs. 6,000 at the end of each year commencing from the date of agreement. Interest is charged @ 20% and is included in the annual annual payment of Rs. 6,000. Show machinery account and hire vendor account in the books of the purchaser who defaulted in the payment of the third yearly payment whereupon where upon the vendor repossessed the machinery. The purchaser provides depreciation depreciation on the machinery @ 10% per annum on written down down value basis. [Ref Ref :: Q7. Dec Dec ’08 ’08 / Pap Paperer-10] 10]

All workings should form part of your answer.

Q2.. Kamala Q2 Kamala Agencies started started business business on 1st 1st April, 2005. 2005. During During the year ended ended 31st March, March, 2006 they sold under mentioned durables under unde r two schemes – Cash Price Scheme (C.P.S) and Hire Purchase Scheme (H.P.S). Under the C.P.S they priced the goods at cost plus 25% and collected it on delivery. Under the H.P.S the buyers were required to sign a Hire Purchase Agreement undertaking to pay for the value of the goods including finance charges in 30 installments, the value being calculated at cash price plus 50%. The following are the details details available at the end of 31st March, 2006 with regard to the produc pro ducts ts : Product

T.V. Sets Washing Machines

Nos. purchased

Nos. sold under C.P.S

Nos. sold under Rs H.P.S

Cost per unit due during

No. of No. of installments installments received the year during the year

90

20

60

16, 00 0

108 0

1 00 0

70

20

40

12, 00 0

84 0

8 00

The following were the expenses during during the year : Rs. Rent 1,08,000 Salaries 1,50,000 Commission to Salesmen 1 2,0 00 Office Expenses 1,26,000 From the above information, information, you are required required to prepare : (a) Hire Purchase Purchase Trad Trading ing Account Accounts, s, and (b) T di d P fit & L A t

[Ref Ref :: Q3. June June ’06 / Pap

10]
















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Q3. Mr. Glostar Glostar commenced commenced business business on 1st 1st April 2003. 2003. He sells washing washing machines machines of a standard standard type and size on hire purchase terms. The total amount, including interest payable for each washing machine is Rs. 4,500. Customers are required to pay an initial deposit of Rs. 900, followed by eight quarterly instalments instalme nts of Rs. 450 each. The following trial balance is extracted from Mr. Glostar’s Glostar’s books as on 31.3.2004 : Trial Balance Particulars

Capital Furniture Purchases Cash collected from customers Salaries and wages Office expenses Creditors Bank overdraft Bank interest Drawings

Debit Rs.

Credit Rs.

— 1 , 5 0 , 0 00 27,00,000 — 1 , 9 2 , 0 00 8 2, 500 — — 6, 000 6 0, 000

15,00,000 — — 11,47,500 — — 2,49,000 2,94,000 — —

31,90,500

31,90,500

850 machine were sold during the year on hire purchase terms. Mr. Glostar has decided decide d to take credit of profits and interest in proportion to cash collections. He purchases at a cost of Rs. 3,0 3,000 00 each. each. You are required to prepare the hire purchase Trading A/c, Profit & Loss A/c and Balance Sheet as on that date. All workings are to be shown. [Ref Ref :: Q5. June June ’04 / Pap Paperer-10] 10]


















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7 ROYALTY

Descriptive & Practical Practical Questions Questions : Q1.. Tile Company Q1 Company leased leased land in 2002 2002 at a royalty royalty of 10 paise per ton ton on all the clay raised. raised. Dead Dead Rent was Rs. 10,000. Short working was to be recouped during the first 4 years. The clay raised in the first four four years was as follows follows : Tons Tons 20 02 7 5,0 00 2 00 4 60,000 (Strike for 3 months) 20 03 9 0,0 00 2 00 5 1,20,000 There was a provision for proportionate reduction reduction in dead rent in case of stoppage of work by strike, lockout, accident etc. Show Sh ow Led edge gerr ac acco coun untts in in the the boo ooks ks of the the Til ilee Co Comp mpan any. y. [Ref Ref :: Q5. Q5. Dec ’06 / Pap Paperer-10] 10] Q2.. Nabipur Q2 Nabipur Ltd., owns owns certain patent patent rights. rights. It has granted a licence licence to Ashoke Ltd. Ltd. to use such rights on royalty basis. The royalty is payable at Rs. 50 per unit produced. Asoke Ltd. has issued a sub-license to Kaniska Ltd. on the basis of a royalty of Rs. 60 per unit sold. The minimum royalty payable by Kaniska Ltd. is fixed at Rs. 75,000 per annum. Short workings can be recouped within one year from the last date of the year in which they occur. The following particulars are are available for the three years of working : Ashoke Ltd.

Kaniska Ltd.

Year

Sales (units)

Closing stock (units)

Production (units)

1 2 3

6, 000 7, 500 13 ,50 0

1,50 0 3,00 0 4, 500

60 0 3,0 00 4,50 0

Closing stock (units) 3 00 6 00 1, 350

You are are required required to : (a)

prepare in the books prepare books of Ashoke Ashoke Ltd., Ltd., a statem statement ent showing showing analysis analysis of of royalties royalties receiva receivable ble and royalties payable, and

(b)) (b

show royalty royalty receiva receivable ble account account and and royalty royalty payable payable account account in the the books books Asoke Ltd. Ltd.


















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RECEIPTS & PAYMENT ACCOUNTS

Objective Objec tive -Type Questio Questions ns : Q1. In case of membership membership fees fees of club, how to treat treat the same in the Income Income and Expendit Expenditure ure A/c and Balance Sheet? [Ref Ref :: Q.1 (a), June ’07 / Paper Paper-10] -10]

Descriptive & Practical Practical Questions Questions : Q1. The following following information informationss were obtained from from the books of Dignity Foundati Foundation on Recreation Recreation Club as on 31.03.2007. At the end of the first year of the club you are asked to prepare Receipts and Payments Account, Income and Expenditure Account for the year ended 31.03.2007 and the Balance Sheet as at 31.03.2007 on mercantile basis : i) Donation received for building and library room

Rs. 1, 1,00,000

ii) Other reven revenue ue income income and actua actuall receipts receipts :

Entrance Fees Subscription Locker rent Sundry Income Refreshment account

Revenue Income Rs. 20 ,0 00 17 ,0 00 800 1,40 0 —

Actual Receipts Rs. 2 0, 00 0 1 6, 00 0 800 860 2 0, 00 0

ii) Other revenue revenue expendit expenditure ure and actual actual payments payments :

Land (Cost Rs. 10,000) Furniture (Cost Rs. 1,46,000)

Revenue Income Rs. — —

Actual Receipts Rs. 1 0, 00 0 1,30,000


















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Q2. (a) Rangakarmi, an amateur amateur theatre organizatio organization, n, charges charges its members an annual subscription subscription of Rs. 200 per member. It accrues for subscription owing at the end of each year and also adjusts for subscriptions received in advance. The organization closes its accounts every year at 31st December. The following particulars particulars are available : (1) On 1st January, January, 2005, 2005, 20 members owed owed Rs. 4,000 4,000 for the year year 2004. (2) In December, December, 2004, 2004, 5 members paid paid Rs. 1,000 1,000 for the year 2005. 2005. (3) During the year 2005, the the organization received cash subscriptions of of Rs. 85,000. 85,000. The details are : For 2004

Rs. 4,000

For 2005

Rs. 79,000

For 2006

Rs. 2,000 Rs. 85,000

(4) At close of 31st December, December, 2005, 15 members had not paid their 2005 2005 subscriptions. subscriptions. Prepare the subscriptions account. [Ref Ref :: Q.5. (a), June. ’06 ’06 / Pape Paper-10] r-10]

Q3.. Modern Q3 Modern City School School is a privately privately run educational educational institut institution. ion. Its Balance Balance Sheet Sheet as on 31st March,, 2004 was as March as follows follows : Rs.

Rs.

Capital Fund

20,00,000

L an d

Development Fund

10,00,000

School Buildings

8 , 0 0 , 0 00 15,00,000

Special Donation Fund

6,00,000

School Bus

8 , 0 0 , 0 00

General Fund

6,50,000

Furniture

2 , 0 0 , 0 00

Empl Em ploy oyee ee supe superr annu annuat atio ion n fund fund

5,00 5, 00,0 ,000 00

Lab abo ora rato tory ry eq equi uipm pmen entt

Outstanding salaries (March, 05) Teaching Staff

Science Lab. 1,50,000

Computer Lab.

2 , 0 0 , 0 00 5 0, 000


















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Receipts and payments account for the year ended 31st March, 2005 Rs.

Opening Balance Admission Fee Tution Fee Contribution to special donation funds (from ex-students) Interest on investments

3, 4 0 , 0 0 0 9, 0 0 , 0 0 0 80,00,000 3,00,000 7 5, 000

Rs.

Salaries Teaching staff 58,00,0 00 Non-teaching staff 10,00,00 0 Purchase of library books 1,00,000 Purchase of science lab equipment 50,000 Purchase of computers 60 ,0 00 Construction Constructio n of new school buildings 4,00,000 Purchase of school bus 6,00,000 Purchase of of Go Govt. Se Securities 5,00,000 Education tour expenses 1,50,0 000 Annual function 1,00,000 Building ma maintenance ex exp. 1,50,000 Purchase of new furniture 60 ,0 00 Electricity 80 ,0 00 Printing, postage stationery and other expenses 1,40,000 Closing balance 4,25,000

96,15,000

96,15,000

The following further further information information is available : (1) Interest accrued but not received (2) The school school has has decided decided to charge charge deprec depreciatio iation n as follows follows : School buildings (excluding new construction) School furniture (excluding new additions) Lab equipment Science lab (old & new) Computer lab (old & new) School bus (excluding the one newly acquired during the year)

Rs. 10,000 5% 10% 8% 20% 15%


















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(5) Building contractor’s bill outstanding as on 31st March, 2005

Rs. 7 0,000

(6) Tuition fee receivable as on 31st March, 2005

Rs. 5 0,000

(7) Admission Admission fee includes includes Rs. 2,50,000 2,50,000 representin representing g colle collection ction towards towards development fund. You are required to prepare an income and expenditure account for the year ended 31st March, 2005 and a Balance Sheet as on that date. [Ref Paper-10] r-10] Ref :: Q.4, Dec. ’05 / Pape Q4.. The Balance Q4 Balance Sheet Sheet of New City City College College as at 31st March March 2003 2003 was as follo follows ws : Rs.

Capital Fund Building Construction Fund General Fund Outstanding Salary (teachers)

21,00,000 8,00,000 6,40,000 1,60,000

Rs.

Land & Buildings Furniture Laboratory Equipment Library Books Investments Accrued Tuition Fee Cash & Bank

37,00,000

20,0 0,000 3,00,000 2,50,000 3,60,000 6,50,000 10, 00 0 1,30,000 37,00, 000

The receipts and Payments account for for the year ended 31st March 2004 was drawn as under : Rs.

To Opening balance (1.4.2003) To Govt. Grants (revnue) To Donation for Building Construction To Tuition Fees & Session Charges To Investment Income To Rental Income (College Hall)

1,30,000 50,00,000 2,00,000 18,20,000 70, 00 0 40, 00 0

Rs.

By Salaries & AllowancesTeaching Staff By Non-Teaching Staff By Printing & Stationary By Laboratory Exp. By Laboratory Equipment By Library Books By Of Office Exp. By Electricity & Telephone

42,00, 000 20,00,000 80, 00 0 60, 00 0 1,20,000 2,50,000 60, 00 0 75, 00 0




















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Other Inform Information ation : (i)) Tuit (i Tuition ion fee outstandi outstanding ng as on 31.3.2004 31.3.2004 —Rs. —Rs. 40,000. 40,000. (ii)) Salar (ii Salary y of teaching staff staff outstanding outstanding for March March 2004 — Rs. 2,50,000. 2,50,000. (iii) Books received as donations from various parties —Rs. 30,000 (valued). (iv)) Outstanding building (iv building repair expenses as on on 31.3.2004 — Rs. 15,000. (v)) Appl (v Applicabl icablee depreciat depreciation ion rates rates : Land & Buildings 2% Furniture 8% Laboratory Equipment 10 % Library Books 20 % You are required to prepare the Income and Expenditure account for the year ended en ded 31st March 2004 and a Balance Sheet as on that date. [Ref Ref :: Q.6, June. ’04 / Paper Paper-10] -10] Q5. The following following information information were obtained obtained from from the books books of Young Bengal Bengal Club as on 31.3.2007 31.3.2007 at the end of first year of the club. You are required to prepare Receipt and Payments Account, Income and Expenditure Account for the year ended 31.3.2007 and a Balance Sheet as at 31.3.2007 31.3. 2007 on mercantile mercantile basis basis : (i) Donations (i) Donations received received for Building Building and Library Library Books - Rs. 2,00,000. (ii)) Othe (ii Otherr rev revenue enue incom incomes es and actu actual al receip receipts ts : Entrance Fees

Rev. Income (Rs.)

Actual Receipts (Rs.)

17 ,0 00

17 ,0 00


















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Q6. SMS Recreation Recreation Club provides provides you with the following following details and requests you to prepare. (1) Incom Incomee and Expenditur Expendituree A/c for the year ended ended 31.3.2006 31.3.2006 & (2) Balan Balance ce Sheet Sheet as as on 31.03 31.03.2006 .2006.. Detailed Detai led submitted submitted : 1. Receip Receipts ts and Payments Payments A/c for the the year ended 31.03.2 31.03.2006. 006. Receipts

Cash on Hand b/d Bank Balance — SBI b/d Subscription 2 003 -2 00 4 2 00 4- 20 05 2 00 5- 20 06 2 006 -2 00 7 Hall Rent Chair Hire Charges Parking Charges Sale of Scrap Other Income

Amount R s.

11,000 .00 5,500.00 1 , 1 0 , 00 0 . 0 0 16,500.00

Amount Rs . 490 .0 0 42 ,000.00

1 , 43 , 0 0 0 . 0 0 2, 0 0 , 0 0 0 . 0 0 12, 000.00 11,0 00.00 720 .0 0 1 0 0 0 0 00


















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2.

Car (Depreciated @ 20%) Sports items Building (Depreciate @ 10%) Furniture (Depreciate @ 15%) Crockery (Depreciate @ 15%) Salary o/s Creditors

List of balances 31. 03,2005 52,000.00 58,000.00 3,00,000.00 1,60,000.00 56,000.00 4,000.00 5,000.00

31.03.2006 ? 49,000. 00 ? ? ? ? 10, 000.00

3. Club has 220 members members and Rs. 550/- was collected collected as yearly yearly subscriptio subscription. n. 4. There was no payment payment to creditors creditors during during the year and the increase increase in creditors creditors is due to purchase of some sports items. 5. Club has an accountant accountant who was paid Rs. 2,000/- per month month up to Jan ’06 and there was an increment of Rs. 500/- from Feb ’06. 6. FD made on 31.03.2006. [Ref Ref :: Q3. Q3. Jun June. e. ’06 / Pap Paperer-2] 2] Q7. From the following following informati information on given about about Victory Victory Always Education Education Society Society for the year ending endin g 31.03.200 31.03.20033 : Prepa Pre pare re :


















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Certificate fee Subscription Received Hire Charges Interest Other receipts Salary Printing and stationery Postage and Telephone Insurance Examination Expenses Periodicals Awards and Prizes Fund Awards and Prizes Investments Awards and Prizes Income Awards and Prizes Fund Bank Balance Donations (Capital) General Expenses Capital Fund Bank Balance Cash on Hand

15 7, 800 2,75,800 95, 50 0 85, 00 0 4, 400 1,55,900 8, 500 2, 500 10 ,4 00 24 ,0 00 15 ,6 00 2,15,000 2,10,400 10, 20 0 2, 450 1,99,000 5, 250 5,471,720 65 ,5 00 1, 520


















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PARTNERSHIP ACCOUNTING

Descriptive & Practical Practical Questions Questions : Q1. Pradip and and Parimal Parimal ar equal partners. partners. Pradip, Pradip, by agreement, agreement, retires retires and Gopal Gopal joins the firm firm on the basis of one-third share of profits on 1.4.2007. The balances of the books as on 31st March, 20077 were 200 were : Dr. Cr. R s. R s. Goodwill 10 ,0 00 — Fixed Assets at Cost 1,20,000 — Current Cur rent Assets Assets : Stock 60 ,0 00 — Debtors 40 ,0 00 — Bank Balance 8,00 0 — Creditors — 2 0, 000 Provision for Depreciation — 1 2, 000 Capital Capi tal Accounts Accounts : Pradip — 1,04,000 Parimal — 1,02,000 2,38,000

2,38,000

Goodwill and Fixed Assets valued at Rs. 30,000 and Ra. 1,40,000 respectively and it i t was agreed to




















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Following are the required adjustment adjustment on D’s admission admission : (i)) Out of (i of the credi creditors, tors, a sum of Rs. Rs. 5,000 5,000 is owing to D. (ii)) Bills worth (ii worth Rs. 8,000 8,000 were discounted discounted with with the bankers, bankers, out of which, which, a bill of Rs. 2,000 was was dishonoured on 31.12.2005, but no entry has been passed for that. Due dates of the other discounted bills fall in January, 2006. (iii)) Unexpi (iii Unexpired red insura insurance nce premium premium Rs. 600. (iv)) Expenses debited (iv debited to the Profit Profit and Loss A/c A/c includes a sum of of Rs. 1,000 paid for for B’s personal personal life insurance policy. (v)) A provision (v provision for bad bad debt @ 5% is to to be created created agains againstt Debtors. Debtors. (vi) (v i) Expens Expenses es on revaluatio revaluation n amounting amounting to Rs. 1,010 1,010 are paid paid by A. (vii)) During 2005, part of the furniture was sold for Rs. (vii Rs. 2,500, the book book value of of the furniture furniture sold was Rs. 4,000 adn the written doen value on the date of sale is Rs. 3,500, the proceeds was


















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Q4. A and B are partners partners sharing sharing profi profits ts and losses in the ratio ratio 3 : 2. Their Their Balance Balance sheet sheet stood stood as under on 1.1.2003 1.1.2003 : Liabilities

Rs.

Capital Accounts A

29 ,0 00

Assets

Rs.

Buildings

35 ,0 00

Machinery

19 ,0 00

Furniture B

15 ,0 00

Reserve

10 ,0 00

Stock

Creditors

28 ,5 00

Debtors

Outstanding Expenses

4 ,000

5, 000 15 ,0 00 9,4 00

Less : Provisions for Bad Debts

40 0

9, 000


















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P & R share Profits and Losses Losses as 1 : 2. They agree to admit S (who is also in business of his own) as a third partner from 1.4.2003. The Assets Assets are revalued revalued as under : Goodwill Rs. 18,000, Land and Building Rs. 30,000, Furniture Rs. 6,000. S brings the following Assets into Partnership — Goodwill Rs. 6,000, Furniture Rs. 2,800, Stock Rs. 13,600. Profits in the new firm are to be sahred equally by the three Partners and the Capital Accounts are to be so adjusted as to be equal. Prepare Revaluation Account, Partners Capital Account and Balance Sheet Shee t after the admission of S. [Ref Ref :: Q.3, Q.3, June ’03 / Pap Paperer-2] 2]


















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Q8.. ASHA, Q8 ASHA, REKHA REKHA and and ASHOK ASHOK are are partn partners ers shari sharing ng Profi Profits ts and and Losse Lossess in the the ratio ratio of 5 : 3 : 2 respectively. respectivel y. On March 31, 2007 they decided to dissolve the partnership partnershi p firm and on that date their Balance Balance Sheet was was a follows : Balance Sheet as on March 31, 2007 Liabilities

Rs.

Capital :

Assets

Rs.

Cash at Bank

As ha

96,00 0

Ashok

84,000

Debtors

12 ,0 00 50, 40 0

1,80,000

Less : Provision

2,400

48 ,0 00

General Reserve

24 ,0 00

Rekha’s Capital

12 ,0 00

Creditors

72 ,0 00

Land & Building

96 ,0 00

Bills Payable

24 ,0 00

Stock

54 ,0 00


















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(b)) A total salary of Rs. 11,000 is payable to D which is to be allocated among the above (b above three departments in the ratio of 3 : 4 : 4 respectively. (c) 50% of the net profit of each department department after charging commission and salary will be distributed to A, B and C as under : Petrol sales Repairs and Servicing Second-hand Car Dealing

A, B and C — Equally A : B : C= 2 : 2 : 1 A: B: C= 3: 2: 1

(d)) The balance of (d of the profit of the firm will be shared equally by all partners partners after charging interest on capital @ 10% p.a. The net profits of the departments for the year ended 31.12.2002 31.12.2002 were as under : Petrol Sales — Rs. 20,000 ; Repairs and Servicing — Rs. 40,000 ; Second-hand car dealing— Rs. 50,0 50,000. 00.




















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On 1st April, 2008 they formed a Private Limited Company Company with an authorised share capital of Rs. 2,00,000 in shares of Rs. 10 each to be divided in different classes classes to take over the business of partnership. You are inf

d as under


















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Capital Account Capital Accountss : Amalesh

23 Dr. Rs.

Cr. Rs.

—

40, 00 0

















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BRANCH AND DEPARTMENT

Objectives Objec tives -Type -Type Questions Questions :

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Q2.. Puskar Q2 Puskar Enterprise Enterprise has its head office office in Ranchi Ranchi and branch branch in Imphal. The The following following trial balance has been extracted from the books of account as at 31st March 2005 : The following is the Trial Trial Balance as on 31.3.2006 : H d Offi

B

h

















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Q3. M/s Star & Co. has has two department departmentss which maintain maintain separate separate records. records. Prepare Prepare Trading Trading and Profit & Loss A/c for each department and Balance Sheet for the company for the year ended 31.3.2003. 31.3. 2003. Provid Providee depreciatio depreciation n on Plant and Machin Machinery ery @ 33 %. Building Building by 5%, Furnitur Furnituree @ 10%, other un-allocated expenses to be allocated on the basis of net sales of each department.




























































































































































































Financial Accounting question paper (syllabus 2002)

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