|1.||Explain any four of the following : ||5each|| |
| ||(i)||Going concern concept || || (0) |
| ||(ii)||Deferred revenue expenditure || || (0) |
| ||(iii)||Objectives of providing depreciation || || (0) |
| ||(iv)||Account current || || (0) |
| ||(v)||Self–balancing ledgers. || || (0) |
|2.||(a)||There are 450 members in a club each paying an annual subscription of Rs.500. Rs.5,000 were in arrears as on 31st March, 2003. Subscription received during the year ended 31st March, 2004 were Rs.2,23,000 including Rs.4,500 for 2002–03 and Rs.7,500 for the year 2004–05. Calculate the amount of subscription in arrears as on 31st Mach, 2004 by preparing subscription account. ||4|| (0) |
| ||(b)||Distinguish between the following :||4each|| |
| || ||(i)||‘Trade bill’ and ‘accommodation bill’. || || (0) |
| || ||(ii)||‘Operating lease’ and ‘financial lease’. || || (0) |
| || ||(iii)||‘Provision’ and ‘reserve’. || || (0) |
|3.|| The following is the trial balance of Arman as on 31st March, 2004: |
| Capital account |
Stock on 1st April, 2003
Freight and octroi
Provision for bad debts
Cash in hand
Goodwill (at cost)
| (i) || Stock on 31st March, 2004 was valued at Rs.5,30,000. |
| (ii) || Salaries have been paid so far for 11 months only. |
| (iii) || Unexpired insurance included in the figure of Rs.4,000 appearing in the trial balance is Rs.1,000. |
| (iv) || Commission earned but not yet received amounting to Rs.1,220 is to be recorded in books of account. |
| (v) || Provision for bad debts is to be brought upto 3% of sundry debtors. |
| (vi) || Manager is to be allowed a commission of 10% of net profits after charging such commission. |
| (vii) || Furniture is depreciated @ 10% per annum. |
| (viii) || Only one-forth of advertising expenses are to be written off. |
Prepare trading and profit and loss account for the year ended 31st March, 2004 and balance sheet as on that date.
|16|| (0) |
|4.||(a)|| Bose purchased raw materials during the month of March, 2004 as stated below : |
| March 2|
| 1,600 units @ Rs.60 per unit.|
2,400 units @ Rs.55 per unit.
5,000 units @ Rs.57 per unit.
6,000 units @ Rs.54 per unit.
3,000 units @ Rs.58 per unit.
2,000 units @ Rs.63 per unit.
While preparing the final accounts on 31st March, 2004, Bose had 2,600 units of raw materials in his godown
You are required to calculate the value of closing stock of raw materials according to —
| First–in–first–out method; and |
Weighted average price method.
|8|| (0) |
| ||(b)||What do you understand by ‘bank reconciliation statement’ ? Explain its utility as a control tool. ||8|| (0) |
|5.||(a)|| A trader does not keep proper books of account. However, he provides the following information to you : |
| || On 31 March, 2003 |
| On 31 March, 2004|
| Cash at bank|
Cash in hand
Stock in trade
During the year ended 31st March, 2004, the trader introduced Rs.6,000, as additional capital and withdrew Rs.4,000 for his personal use. Depreciation is to be provided on furniture at 10% per annum and on equipment at 5% per annum.
Prepare a statement showing profit or loss made by him for the year ended 31st March, 2004.
|8|| (0) |
| ||(b)|| Delhi Trading Company opened a branch at Ghaziabad on 1st April, 2003. The goods were sent by the head office to the branch at cost plus 25%. The following are the particulars of the transactions relating to the branch for the accounting year ended 31st March, 2004 : |
| || || Rs. |
| Goods sent to branch at invoice price || 3,51,000 |
| Rs. 1,25,000|
| 3, 00,000 |
| Cash collected from branch debtors || 1,56,000 |
| discount allowed to branch debtors || 4,000 |
| Cash sent to branch for:|
| Rs. 3,000|
Rs. 6, 000
| 20, 000 |
| Spoiled goods written off at invoice price || 500 |
| Stock on 31st March, 2004 at invoice price || 55,500 |
Prepare branch account showing profit earned or loss incurred during the year ended 31st March, 2004. Also show memorandum branch debtors to ascertain closing balance of branch debtors.
|8|| (0) |
|6.||Nice Roadways purchased from Harish Motors 3 tempos costing Rs.1,00,000 each on hire purchase basis on 1st April, 2002. 20% of the cost was to be paid down and balance in three equal annual installments together with interest @ 9% at the end of each year. Nice Roadways paid the installment due on 31st March, 2003, but could not pay installments thereafter. Harish Motors agreed to leave one tempo with the purchaser on 31st March, 2004, adjusting the value of the other two tempos against the amount due on that date. The tempos recovered were valued on the basis of 30% depreciation annually. Nice Roadways charges depreciation on tempos @ 20% on diminishing balances method. |
Harish Motors incurred Rs.10,000 on repairs of tempos repossessed and resold them at a profit of 5% on total cost.
Prepare the important ledger accounts in the books of both parties giving effect to the above-mentioned transactions.
|16|| (0) |
|7.|| P, Q and R are partners sharing profits in the ratio of 5:3:2 respectively. On 31st March, 2004, their balance sheet was as follows : |
| Liabilities || Rs. || Assets || Rs. |
Due to financial crisis, the firm was dissolved. The assets realised as follows :
Stock Rs.16,000; patent Rs.1,900; and debtors Rs.22,000. The creditors were paid less discount amounting to Rs.2,100. The expenses of dissolution were Rs.2,000. R became insolvent and only Rs.120 were recovered from him.
Prepare ledger accounts following the Garner vs. Murray Rule.
|16|| (0) |
|8.||(a)||1,000 Bicycles were consigned by Sen & Co. of Kolkata to Tilak Ratna of Sri Lanka at an invoice cost of Rs.950 each. Sen & Co. paid freight Rs.65,000 and insurance Rs.11,500. During the voyage 100 bicycles were totally damageed by fire and had to be thrown overboard. Tilak Ratna took delivery of the remaining bicycles and paid Rs.86,400 for customs duty. Tilak Ratna sent a bank draft to Sen & Co. for Rs.3,20,000 as advance payment and later sent an account sales showing that 800 bicycles had been sold at Rs.1,400 each. Amount spent by Tilak Ratna on godown rent and advertisement totalled Rs.12,500. The consignee is entitled to a commission of 5%. Prepare the consignment account, on account of Tilak Ratna and abnormal loss account in the books of Sen & Co., assuming that nothing was recovered from the insurers due to a defect in the policy. ||8|| (0) |
| ||(b)||On 1st April, 2001, Zora Ltd. purchased machines for Rs.1,20,000 and on 30th September, 2002 it acquired additional machines at a cost of Rs.20,000. On 30th June, 2003, one of the original machines which cost Rs.5,000 was found to have become obsolete and was sold as a scrap for Rs.500. It was replaced on the same date by a new machine costing Rs.8,000. Depreciation is to be provided @ 15% per annum on the basis of diminishing balance method. Show machinery account for the first three years. The company closes its books on 31st March every year. ||8|| (0) |