Financial Accounting I

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ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)
END SEMESTER EXAMINATION – OCTOBER 2013
B.COM – I SEMESTER (TRAVEL AND TOURISM)
FINANCIAL ACCOUNTING – I
Duration: 3 Hours Max. Marks: 100
SECTION – A
I) Answer any TEN of the following (10 x2=10)
1. Differentiate Capital Expenditure with Revenue Expenditure?
2. Repaid Loan of Rs.10,000 along with interest of Rs.100. Analyze the transaction and
give the Accounting Equation.
3. What is Accounting Equation? Will it be relevant for Single Entry system of Book
Keeping?
4. What is the basis to determine whether an Asset is a Current Asset or a Fixed Asset?
5. Where do you show the closing stock appearing in the trial Balance in Final Accounts?
Give reasons for this treatment.
6. What is the meaning of an ‘Opening Entry’?
7. What is the accounting procedure for ‘trade discount’ and ‘cash discount’?
8. Mention the source document for recording in ‘Purchase book’ and ‘Sales book’?
9. Following are the extracts from the Trial Balance of the firm as on 31st March 2012.
Additional information
i. Additional discount received from Creditors after closing the Accounts Rs.1,000
ii. Create a reserve for discount on Creditors @ 2%
Show how these items would appear in Final accounts.
10. What is the meaning of ‘Accounting Standards’?
11. Calculate the value of Purchases from the following – Cost of Goods sold Rs.5,00,000;
Closing stock Rs.50,000; opening stock Rs.30,000, Royalties Rs.5,000, Salaries Rs.50,000.
12. Where is Carriage inwards and Carriage outwards taken in Final Accounts? Give
reason for the treatment.
Dr. Cr.
Sundry Creditors 2,01,000
Discount 1,000
2
SECTION – B
II) Answer any FOUR of the following (4 x 5 = 20)
13. Using the accounting equation show the effect on Assets, liabilities and Capital
a. Commenced business with cash Rs.36,000
b. Paid rent in advance Rs.300
c. Purchased goods for cash Rs.18,000 and credit Rs.12,000
d. Sold goods for cash Rs.18,000 costing Rs.12,000
e. Paid Salary Rs.300 and salary outstanding Rs.60
f. Purchased furniture for personal use Rs.3,000
g. Received quotation from RK ltd for Machinery Rs.3,00,000
14. From the following particulars prepare the Petty Cash Book on imprest System of
Sadashiva & Co for the month of March 2011
Date Particulars
1st march Opening Balance (on imprest) Rs.5,000
3rd Paid for stationery Rs.450
17th Paid for advertisement Rs.850
23rd Paid courier charges Rs.150
25th Paid Printing Charges Rs.950
27th Paid for traveling expenses Rs.300
30th Paid repair charges Rs.250
15. Journalize the following transactions
1-1-2012 Paid into Bank, Rs.15,000 for opening a Current account
5-1-2012 Withdrew for Private expenses Rs.3,000
11-1-2012 Withdrew from Bank Rs.3,000
12-1-2012 Withdrew from Bank for private use Rs.2,500
17-1-2012 Placed on fixed deposit a/c at Bank by transfer from
current account Rs.4,000
16. Give the necessary adjusting entries for the following items appearing outside the Trial
Balance on 31st March 2011.
a. Bad debts to be written off Rs.3,500
b. Interest due but not received Rs.2,000
c. Salary due but not paid Rs.2,300
d. Unexpired Insurance on 31st March Rs.900
e. Closing stock on hand on 31st March Rs.55,000.
17. Discuss the Accounting Concepts in detail?
18. Write a note on Accounting standards AS-1, AS-4 and AS-10
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SECTION –C
III) Answer any THREE of the following: (3 x 15 = 45)
19. An accountant could not tally the Trial balance. The difference was temporarily placed
to Suspense Account. The following errors were later discovered.
a. A purchase from Prakash for Rs.233 though correctly entered in Purchase book
was wrongly debited to his personal account
b. Commission of Rs.175 paid was posted twice, once to the commission account
and once to the discount account.
c. The Sales book was under-cast by Rs.750
d. Discount column of the receipt side of the Cash Book was wrongly added as
Rs.250 instead of Rs.230
e. Entertainment expenses of Rs.185 though entered in the Cash book was omitted
to be posted in the Ledger
f. A sale of Rs.1059 to Desai though correctly entered in Sales book was posted
wrongly to his account as Rs.1095.
You are required to :
i. Pass the necessary rectifying entries
ii. Prepare the suspense account.
20. Enter Sai Kumar’s Cash book the following transactions, which took place on 31st
March 2011 and balance the cash book
i. Balance brought forward from the previous day : Cash in hand Rs. 100 and at
bank Rs.8,000
ii. Instructed the bank to issue a bank draft for Rs.5,000 in favour of Sukumar, The
bank charged Rs.10 for issuing the draft.
iii. Received a bank draft for Rs.5,760 from Mahesh in full settlement of Rs.6,000 due
from him. Sent the draft to the Bank
iv. Received a cheque from Rakesh for Rs.2,000. Allowed him discount Rs.120.
v. Endorsed Rakesh’s cheque in favor of Harish
vi. Sent a cheque for Rs.50 for payment of expenses of Sai Kumar’s son
vii. Withdrew Rs.500 from the bank
viii. Placed an order with Vikas for goods of the value of Rs.1,000 and sent cheque
for Rs.1000 with the order.
21. The following figures are given in the Trial Balance on 31st March 2013
Dr. Cr.
Purchases & Sales 3.50,000 7,75,000
Debtors and creditors 2,00,000 1,00,000
Net Profit (before charging Manager’s Commission) 2,22,000
Capital and drawings 10,000 3,60,000
Closing stock 53,000
Provision for bad debts 3,000
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Adjustments:
i. Goods worth Rs.4,000 were in transit
ii. Create a reserve for discount on creditors at 3%.
iii. The proprietor has withdrawn goods worth Rs.7,000 out of his own stock
iv. Goods in stock worth Rs.8,000 are destroyed by fire. Insurance Company accepts
the claim for Rs. 6,000
v. The Manager is entitled to a commission of 5% of the Net Profit calculated after
charging such commission
vi. Charge interest on drawing Rs.500
vii. Sundry Debtors include Rs.2,000 (doubtful) receivable from John of which
Rs.1,000 is to be written off.
viii. Create a reserve of 5% on Sundry Debtors.
Show how the above items will appear in the Final Accounts
22. Journalise the following transactions:
a. Received commission Rs.15,000 half of which is in advance
b. Brokerage due to us Rs.5,000
c. Paid Income tax Rs.25,000
d. Paid rent of the Building Rs.24,000, half of the building was used by the proprietor for
residential use.
e. Salary due to supervisor Rs.5,000
f. Purchased a Second hand computer for Rs.7,000 and spent Rs.2,000 on upgrading
g. Purchased machinery from Sonu Ltd for Rs.50,000 and paid them by means of a Bank
draft purchased from the Bank for Rs.50,050.
h. Received a cheque from Satish for Rs.7,250, discount allowed Rs.250
i. Charge interest on drawings (Rs.50,000) at 18% for 9 months
j. Satish‘s cheque was dishonored
23. From the following transactions prepare the sales Book of Mahesh Jain, a Saree dealer
and post them to the Ledger
Date Invoice
no.
Particulars
4-1-2011 301 Sold on credit to Gagan & co Mysore , 20 silk sarees @
Rs.3,500 each, less Trade discount @ 10%
9-1-2011 302 Sold for cash to Gaurav & Co, Tumkur, 25 Kota sarees @
Rs.1,000 each
17-1-2011 303 Sold on credit to Manish & co, Kolar, 10 polyester Sarees @
Rs.800 less trade discount at 20%
30-1-2011 Sold on credit to Gowda 2 old chairs @ Rs.500 each
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SECTION – D
IV) Compulsory question (15 marks)
24. From the following Trial Balance of Janardhan prepare the final accounts as on 31st Dec
2012
Dr Cr
Capital 85,000
Drawings 7,500
Stock on 1st Jan 2012 12,000
Purchases and sales 86,000 1,70,000
Returns 2,000 1,000
Discounts 500 700
Commission received 1,000
Income tax paid 700
Office salaries 17,300
Advertising 2,000
Sundry debtors and creditors 85,000 30,000
Reserve for doubtful debts 3,000
Manufacturing wages 8,600
Bills receivable and payable 5,000 5,000
Carriage 600
Machinery 40,000
Vehicle 7,000
Building 10,000
Office expenses 1,500
Cash at bank 6,000
Cash in hand 2,300
2,95,700 2,95,700
Adjustments
a. Stock on 31st Dec 2012 was Rs.10,000
b. Debts worth Rs.2,000 should be written off as bad
c. Depreciate machinery by 5% and vehicle by 10%
d. Reserve for doubtful debts should be increased by Rs.600
e. Commission accrued and not received Rs.500
f. Goods worth Rs.500 were used by the proprietor for his personal use
g. On 20th Dec 2012, a fire broke out and goods worth Rs.2,000 were completely
destroyed. The insurance company accepted the claim for Rs1,500 only and paid the
amount on 1st January 2013
********************

1
ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)
END SEMESTER EXAMINATION – OCTOBER 2013
B.COM – I SEMESTER
FINANCIAL ACCOUNTING – I
Time : 3 Hrs. Max. Marks : 100
SECTION – A
I) Answer ALL questions in One or Two sentences each: (10 x 2 = 20)
1. What do you mean by Capital Expenditure? Give an example.
2. What is Convention of Conservatism? Give an example.
3. Write any two reasons for convergence of Indian Accounting System with Global and
Financial Reporting Standards.
4. Computer purchased for Rs. 75,000 is wrongly passed through the purchase book. Give
the rectification entry.
5. What are Compensating Errors?
6. What is a Suspense Account?
7. Write any four methods of Stock Valuation and Pricing of Issues.
8. When do you recognize revenue in Consignment Sale?
9. The method of depreciation can be changed under certain situations. Given any two
situations.
10. Mr. Sharma purchased a plant on hire purchase system paying Rs. 45,000 down and Rs.
50,000 at the end of three successive years. The rate interest charged by the vendor is 5%
p.a. Given the present value of an annuity of Re. 1 p.a. at 5% interest for three years, is
Rs. 2.7232. Determine the Cash Price.
SECTION – B
II) Answer ANY FOUR questions: (4 x 5 = 20)
11. State True or False:
a) Any expenditure incurred in relation to purchase of fixed asset should be
capitalized.
b) If the depreciable asset is put to use for a period less than 180 days, then full year’s
depreciation can be claimed for Income Tax purpose.
c) A change in the method of depreciation should be given retrospective effect.
d) Legal charges incurred Rs. 50,000 to defend a suit claiming that the firm’s land
purchased 10 years ago, belongs to the plaintiff is a Capital Expenditure.
e) Under FIFO method, the closing stock comprises of the latest purchased goods.
f) Closing Stock should be valued at Cost or Net Realisable Value, whichever is lower.
g) As per Income Tax Act, intangible assets are depreciable at the rate of 20%.
h) Trade Discount is always recorded in books of accounts.
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i) In Hire Purchase System, the seller can repossess the goods, if the buyer makes any
default in payment of any installment.
j) Cash received from Arun on account Rs. 5,000 is completely omitted to be recorded
in the books. This error will not allow the Trial Balance to tally.
12. Mr. Abhishek is appointed as an accountant of Z Co. Ltd. He is unable to pass entries
for the following transactions. He seeks your help. You are requested to pass the
Journal Entries.
i) Bought goods from Arun for Rs. 4,00,000 at a trade discount of 15% and cash
discount of 2%. Paid 80% amount immediately.
ii) Z Co. Ltd is a dealer in Computers. It purchased 2 computers worth Rs.
40,000 each for its own use and 10 computers worth Rs. 45,000 for the
purpose of sale from Anish Computec Ltd.
iii) Sohan who owed us Rs. 95,000 was declared insolvent and 40 paise in a rupee
is recovered from him in full settlement.
iv) Purchased goods for Rs. 40,000 from X and supplied it to Y for Rs. 52,000. Y
returned goods worth Rs. 15,600 which in turn were returned to X.
13. WDV of the block (15%) having two machines namely X and Y as on 1.4.2012 is Rs.
6,00,000. Machine Z was acquired on 5.11.2012 (Depreciable at 15%) for Rs. 3,00,000 and
put to use on the same date. Machine Z is sold on 28.03.2013 for Rs. 4,00,000. Ignore
additional depreciation.
a) Compute the depreciation allowable for the Assessment Year 2013-14. (as per Income
Tax Act)
b) What will be the amount of depreciation allowed, if machine X is sold for Rs.
4,00,000 instead of machine Z?
14. The books of Raj Ltd. revealed the following information:
Particulars Rs.
Opening Inventory 5,50,000
Purchases during the year 2012-13 36,00,000
Wages 2,50,000
Selling and Distribution Expenses 25,000
Freight inwards 4,500
Sales during the year 2012-13 45,00,000
On March 31, 2013, the value of inventory as per physical stock-taking was Rs. 2,75,000.
The Company’s gross profit on sales has remained constant at 25%. The management of
the company suspects that some inventory might have been pilfered by an employee.
What is the estimated cost of missing inventory?
15. Determine Cash Price in the following cases:
a) Mr. Verma purchased a machine on hire purchase system paying Rs. 20,000 down
and Rs. 10,000 , Rs. 20,000 and Rs. 30,000 at the end of 1st, 2nd and 3rd year
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respectively. The rate of interest is 5% p.a. Given the present value of annuity of Re.
1 at 5% for one, two and three years respectively as 0.9524, 0.9070 and 0.8639.
b) M/S Bharat Motors Ltd. sells scooters on the hire purchase system. The terms of
payment for the sale of a scooter are Rs. 10,000 on delivery, Rs. 10,400 at the end of
the first year, Rs. 9,600 at the end of the second year and Rs. 8,800 at the end of the
third year, inclusive of interest.
16. Pass Rectification Entries for the following:
a) Rs. 2,500 paid as wages for the installation of Machinery at site is debited to wages
account.
b) Salary paid to Mohan Lal Rs. 25,000 for the month is debited to his personal account.
c) Extension to Building Rs. 1,50,000 is charged to Repairs A/c.
d) A purchase of goods Rs. 35,000 has been wrongly recorded in Sales Book.
e) A sales return of Rs. 2,000 is wrongly recorded in purchases returns account.
SECTION – C
III) Answer ANY THREE questions: (3×15=45)
17. From the following Trial Balance of M/S Deepa & Co., prepare Trading and Profit and
Loss Account for the year ended 31st March 2013 and Balance Sheet as on that date:
Particulars Debit
(Rs.)
Credit
(Rs.)
Purchases and Sales 2,75,000 5,20,000
Returns Inwards 15,000
Returns Outwards 9,000
Carriage Inwards 12,400
Wages and salaries 58,600
Trade expenses 2,200
Rent 13,000
Insurance 2,000
Audit fees 1,200
Debtors and creditors 1,10,000 62,100
B/R and B/P 3,300 2,200
Printing and advertising 5,500
Commission 1,000
Opening stock 36,000
Cash in hand 12,800
Cash at bank 26,800
Bank loan 20,000
Interest on loan 1,500
Capital 2,50,000
Drawing 15,000
Fixed assets 3,00,000
Total 8,77,300 8,77,300
4
Adjustments:
a) Stock at Cost Price is Rs. 60,000 and at Market Price is Rs.50,000.
b) Depreciate Fixed Assets by 10%.
c) Commission earned but not received amounts to Rs. 1,500.
d) Interest on Bank Loan at 15% p.a. is unpaid for the last 9 months.
e) Allow 8% interest on capital and charge Rs. 900 as interest on drawings.
f) Make a provision for bad and doubtful debts at 5% on debtors.
18. From the following details, prepare a stores ledger under:
a) FIFO Method and b) LIFO Method for Material ‘M’.
Date Particulars Quantity in
Nos.
Rate per unit (Rs.)
1.4.2013 Opening balance 5,000 15
3.4.2013 Purchases 1,000 16
5.4.2013 Issues 4,000 ?
10.4.2013 Purchases 3,800 17
14.4.2013 Issues 2,600 ?
16.4.2013 Purchases 2,500 18
28.4.2013 Issues 3,000 ?
On physical verification, it was found that there is a shortage of 80 units on 22nd April
2013. Assume this shortage as Abnormal.
19. (a) On 1st January 2009, Rama & Co. purchased machinery for Rs. 74,000 and spent Rs.
4,000 on its repair and Rs. 2,000 on its installation. On 1st Jan, 2010 the firm purchased
another machinery for Rs. 20,000. On 1st July, 2011 the machinery purchased on 1st Jan,
2009 was sold for Rs. 56,000 and on the same date a new machinery was purchased for
Rs. 50,000. Depreciation is chargeable at the rate of 10% p.a. on the Original Cost of the
asset. Show Machinery Account for 4 years. Accounts are closed on 31st December each
year. (8 Marks)
(b) Write the differences between Hire Purchase System and Sale. (7 Marks)
20. The following are the particulars relating to hire purchase:
Purchaser Vishnu & Co.
Seller Praveen & Co.
Date of purchase Jan. 1, 2011
Cash Price Rs. 322,350
Asset purchased Motor Car
Payments: Rs. 50,000 on signing of the agreement and the balance in three equal
instalments of Rs. 1,00,000 due on 31st December each year.
Rate of Interest 5% p.a.
Depreciation 20% on the written down value each year
You are required to:
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a) Show the break-up of Principal and Interest included in each instalment.
b) Depreciation to be charged for the year ending 31st December, 2011,2012 and 2013.
c) Pass Journal Entries in the books of Vishnu & Co. under Outright Purchase Method.
Note: All figures to be rounded off to the nearest rupee.
21. X owns the following assets as on 1.4.2012:
Assets Rates of Depreciation WDV as on 1.4.2012 (Rs.)
Building A 10% 2,10,000
Building B 10% 3,30,000
Building C 5% 6,60,000
Building D 10% 1,80,000
Machinery P 15% 90,000
Machinery Q 15% 1,20,000
Machinery R 30% 2,10,000
Car X 15% 4,50,000
The following assets are acquired during the Previous Year 2012-13:
Assets Rates of Depreciation Cost of Acquisition
(Rs.)
Date of
Acquisition
Car Y 15% 7,50,000 15.05.2012
Machinery S 15% 60,000 14.08.2012
Machinery T 30% 1,80,000 10.09.2012
Patents 25% 2,40,000 01.01.2013
Know-how 25% 1,80,000 15.03.2013
The following assets have been sold during the Previous Year 2012 -13:
Assets Sale Consideration (Rs.)
Building B 3,60,000
Machinery P 30,000
The assets acquired during the year were put to use the day they were acquired. You
are required to compute the depreciation allowable to X as per in the Income Tax Act for
the Previous Year 2012-13.
SECTION – D
IV) COMPULSORY QUESTION. (15 MARKS)
22. Compare the Balance Sheets given below and answer the questions given thereafter.
Balance Sheet as on 15th March 2013 Evening
Liabilities Amount
(Rs.)
Assets Amount
(Rs.)
Capital 4,50,000 Land and Building 2,85,000
Creditors 50,000 Debtors 1,32,000
Profit 1,56,500 Cash 57,500
Stock 1,82,000
Total 6,56,500 Total 6,56,500
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Balance Sheet as on 16th March 2013 Evening
Liabilities Amount
(Rs.)
Assets Amount
(Rs.)
Capital 5,50,000 Land and Building 2,85,000
Creditors 50,000 Debtors 1,32,000
Profit 1,56,500 Cash 7,500
Vivek & Co (Crs. For
furniture)
1,00,000 Furniture 1,50,000
Bank 1,00,000
Stock 1,82,000
Total 8,56,500 Total 8,56,500
Balance Sheet as on 17th March 2013 Evening
Liabilities Amount
(Rs.)
Assets Amount
(Rs.)
Capital 5,50,000 Land and Building 2,85,000
Creditors 50,000 Debtors 1,00,000
Profit 1,54,500 Cash 7,500
Vivek & Co (Crs. For
furniture)
1,00,000 Furniture 1,50,000
Bank 1,30,000
Stock 1,82,000
Total 8,54,500 Total 8,54,500
Balance Sheet as on 18th March 2013 Evening
Liabilities Amount
(Rs.)
Assets Amount
(Rs.)
Capital 5,50,000 Land and Building 2,85,000
Creditors 50,000 Debtors 1,50,000
Profit 1,74,500 Cash 57,500
Vivek & Co (Crs. For
furniture)
1,00,000 Furniture 1,50,000
Bank 1,30,000
Stock 1,02,000
Total 8,74,500 Total 8,74,500
You are required to:
a) State the transactions that took place on 16th, 17th and 18th March 2013. (6 Marks)
b) Taking 18th March 2013 Evening Balance Sheet as the base, prepare daily Balance Sheets
for the following transactions: ( 9 Marks)
i) 19th March 2013 : Settled Vivek & Co’s account by giving cheque Rs. 99,000.
ii) 20th March 2013 : Received Rs. 49,500 from debtors. Discount allowed to them
Rs. 500.
iii) 21st March 2013: Received an order from X for the supply of goods Rs. 75,000.
iv) 22nd March 2013: Purchased goods on credit Rs. 50,000.
v) 23rd March 2013: Executed the order received on 21st March 2013. Cost of goods
sold is Rs. 70,000.

1. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)

END SEMESTER EXAMINATION – OCTOBER 2014

B.COM T.T. – I SEMESTER

 FINANCIAL ACCOUNTING – I

Duration: 3 Hours                                                                                            Max. Marks: 100

SECTION – A

 

1. Answer ALL the questions. Each carries 2 marks.                                       (10 x2 =20)

 

1. What is revenue expenditure? Mention any two examples of Revenue Expenditure.
2. What is Business Entity Concept?
3. How is the discount column of the Cash Book posted?
4. Mention any two distinctions between Purchase Book and Purchase Journal.
5. Define Accounting.

 

6. How do you rectify the following errors:
7. Credit Sales to Anita Rs. 5,000 not recorded in books.
8. Credit Purchase of goods from Arun Rs. 10,000 was recorded as Rs. 1,000.

 

7. The position of a businessman on 31^st March, 2014 was as follows:

 

Particulars	Amount in Rs.	Particulars	Amount in Rs.
Cash	5,000	Stock	25,000
Debtors	20,000	Capital	1,75,000
Machinery	1,60,000	Furniture	50,000

 

Calculate his liabilities.

 

8. In which subsidiary books do you record the following transactions:
9. Purchase of goods for Cash.
10. Purchase of Fixed Assets on credit.
11. Sale of goods on credit.
12. Rectification Entries.

 

 

 

 

9. Find the amount of Gross profit given the following information.

 

Particulars	Amount in Rs.	Particulars	Amount in Rs.
Opening Stock	10,000	Wages	20,000
Purchases	1,20,000	Salaries	45,000
Sales	1,85,000	Closing Stock	45,000

 

10. Value of Closing Inventory of a Company was Rs. 24,59,600 at cost price and Rs. 24,45,800 at Net Realizable Value. As per AS 2, which value is to be considered in the preparation of Final Accounts?  Which accounting concept is followed here?

 

SECTION – B

1. Answer any FOUR Each carries 5 marks.                                  (4×5=20)

 

11. State True or False with reasons:

 

1. Payment of Rs. 6,000 as Wages to workmen for installation of a machine should be debited to Machinery Account.
2. Assets Accounts may have either debit or credit balance.
3. If the effect of one error is neutralized by the effect of another error, such errors are called Error of Principle.
4. Manufacturing Account is prepared by all trading and manufacturing concerns.
5. In Three Column Cash Book, Cash withdrawn by the Proprietor for personal use will be accounted as a Contra Entry.

 

12. Pass Journal Entries for the following transactions:

 

1. Salary paid to Mohan Rs. 15,000.
2. Paid rent of Proprietor’s residence Rs. 10,000.
3. Goods purchased of the list price of Rs. 10,000 at 10% trade discount.
4. Received Commission Rs. 2,000.
5. Bank charged Rs. 50 for bank charges.

 

13. The books of Vishnu Ltd. revealed the following information for the year ended 31^st March, 2014.

Particulars	Rs.
Opening Inventory	4,50,000
Purchases during the year 2013-14	37,00,000
Wages	2,25,000
Selling and Distribution Expenses	25,000
Carriage Outwards	5,500
Freight inwards	4,500
Sales during the year 2013-14	46,00,000
Return Inwards	25,000
Return Outwards	5,000
Closing Stock	10,32,450

 

You are required to Prepare Trading Account for the year ended 31^st March, 2014.

 

14. The following Trial Balance contains errors. You are required to prepare a correct Trial Balance.

 

Name of Accounts	Debit Balance  (Rs.)	Credit Balance  (Rs.)
Cost of goods sold	25,40,000
Closing Stock		5,30,000
Sales		33,00,000
Office Expenses	1,20,000
Selling Expenses	60,000
Fixed Assets	5,00,000
Debtors		3,60,000
Creditors		2,50,000
Capital	6,50,000
Bank Balance	90,000
Opening Stock	4,80,000
Total	44,40,000	44,40,000

 

 

 

 

 

15. Enter the following transactions in a single column Cash Book.

Date	Particulars	Rs.
March 1	Commenced business with cash	20,000
March 2	Bought goods for cash	5,000
March 5	Sold goods for cash	4,000
March 10	Goods purchased from Ravi on credit	10,000
March 13	Paid to Ravi	7,000
March 15	Cash Sales	8,000
March 18	Purchased furniture for office	6,000
March 20	Paid Wages	380
March 24	Paid Rent	400
March 26	Received Commission	600
March 28	Withdrew for personal expenses	1,000
March 31	Paid Salary	900

 

16. Prepare accounting equations:
17. Rahim started business with cash Rs. 20,000.
18. He purchased furniture for cash Rs. 2,000.
19. Rahim paid rent of Rs. 200.
20. He purchased goods on credit for Rs. 3,000.
21. He sold goods (costing Rs. 2,000) for cash Rs. 3,000.

 

SECTION – C

• Answer any THREE questions. Each carries 15 marks.                      (3×15=45)

 

17. Enter the following particulars in the Cash Book with Cash and Bank Columns:

2014		Rs.
March 1	Cash in hand	5,000
	Bank Overdraft	1,000
March 2	Paid Wages	1,500
March 3	Deposited into bank	2,000
March 4	Cash Sales	17,500
March 5	Sold goods for cheque which was deposited in bank on the same day	5,000
March 6	Purchased goods from Hari on credit	4,000
March 7	Drew from Bank for personal use	1,000
March 8	Paid to Hari in full settlement	3,500
March 9	Received from Ram	12,000
March 10	Withdrew from Bank for Office Use	3,000
March 12	Sold goods for Cash	15,000
March 13	Cash deposited into Bank	12,000
March 15	Paid rent by cheque	4,000
March 16	Bank charges as per Pass Book	250

 

18. Prepare the following Trial Balance of Sh. Rama Nand Sagar, prepare Trading and Profit and Loss Account for the year ended 31^st March, 2014 and a Balance Sheet as on that date.

 

Debit Balance	Rs.	Credit Balances	Rs.
Opening Stock	20,000	Sales	2,70,000
Purchases	80,000	Purchase Return	4,000
Sales Returns	6,000	Discount	5,200
Carriage Inwards	3,600	Sundry Creditors	25,000
Carriage Outwards	800	Bills Payable	1,800
Wages	42,000	Capital	75,000
Salaries	27,500
Plant and Machinery	90,000
Furniture	8,000
Sundry Debtors	52,000
Bills Receivable	2,500
Cash in hand	6,300
Travelling Expenses	3,700
Lighting (Factory)	1,400
Rent and Taxes	7,200
General Expenses	10,500
Insurance	1,500
Drawings	18,000
Total	3,81,000	Total	3,81,000

 

Adjustments:

1. Stock on 31^st March, 2014 was valued at Rs. 24,000.
2. Wages outstanding Rs. 3,000.
3. Prepaid insurance Rs. 500.
4. Provide Depreciation of Plant and Machinery at 5% and on Furniture at 20%.

 

 

 

19. Pass Journal Entries to rectify the errors, if any:

 

1. Goods costing Rs. 1,000 have been purchased on credit from Sohan, but no entry has been made in the books, although the goods were taken into stock.
2. Goods amounting to Rs. 4,000 have been sold on credit, but no entry has been made in the books.
3. No entry has been made for purchases return of Rs. 200.
4. No entry has been made for sales returns of Rs. 450.
5. Goods purchased from Ramesh Chandra on credit for Rs. 5,000 was recorded in purchases book as Rs. 500.
6. Sales of Rs. 600 to Siya Ram were recorded as Rs. 60 in the Sales book.
7. Goods purchased on credit from Pawan for Rs. 400 were recorded as Rs. 4,000 in purchase book.
8. Arun was appointed as the Managing Director of the organization at a monthly salary of Rs. 1,00,000 per month.  No entry has been made in the books on the date of appointment.
9. 2,000 paid for furniture purchased has been debited to purchases account.
10. 3,000 paid to Mohan Lal for salary was debited to his personal account.

 

20. From the following balances taken from the books of a manufacturing concern, prepare Manufacturing Account and Trading and Profit and Loss Account.

Items	Rs.	Items	Rs.
Opening Stock:		Salaries	82,000
Raw Materials	43,000	Factory Insurance	8,400
Work in Progress	6,400	Depreciation on:
Finished Goods	80,500	Plant	71,200
Purchases:		Factory Building	20,400
Raw Materials	5,00,000	Furniture	3,000
Finished Goods	1,20,000	Manufacturing Expenses	62,200
Wages	3,98,480	Miscellaneous Expenses	15,800
Salary of Works Manager	72,000	Sales:
Factory rent and taxes	24,000	Raw Materials	4,000
Repairs to Machinery	7,000	Finished Goods	17,00,000
Carriage Inwards (on raw materials)	12,000	Closing Stock:
Carriage Outwards	4,300	Raw Materials	55,000
Fuel and Power	16,800	Work in Progress	16,500
Sale of scrap	2,000	Finished Goods	1,75,300

 

21. Explain the following terms:
22. Net Realisable Value
23. Contingency
24. Extraordinary Items
25. Accrual Concept
26. Convention of Conservatism

 

 

SECTION – D

 

1. Answer the following compulsory question.                            (1×15=15)
2. Following was the position of Abhishek as on 1^st March, 2014:

 

Particulars	Rs.	Particulars	Rs.
Cash in hand	10,000	Stock	50,000
Cash at Bank	16,800	Debtor – Ram	8,000
Furniture	8,000	Debtor – Shyam	12,000
Creditor – Anil	4,000	Creditor – Sunil	5,000

 

Following transactions took place during March 2014:

 

1. Received a cheque from Ram in full settlement of his account after deducting 5% cash discount. The cheque was banked the same day.
2. Cash deposited into bank Rs. 5,000.
3. Cash paid to Anil after deducting 2% cash discount.
4. Old furniture old for Rs. 800.
5. Sold goods to Shiv Prasad of the list price Rs. 10,000 at a discount of 15%.

 

You are asked to:

 

1. i) Pass the opening entry.                                                                        (2 Marks)
2. ii) Journalise the transactions that took place in March 2014.            (5 Marks)

iii) Prepare Ledger Accounts.                                                                  (5 Marks)

2014. iv) Prepare Trail Balance as at the end of March, 2014. (3 Marks)