CS Foundation :: Financial Accounting : June 2004

Distinguish between the following :

Bose has supplied the following information about his business to Summary of cash book for the year ended 31st March, 2004 is as follows :

Assets and Liabilities	On 1st April 2003 (Rs.)	On 31st March, 2004 (Rs.)
Sundry debtors Stock Machinery Furniture Sundry creditors	1,81,000 1,50,000 2,50,000 40,000 1,10,000	1,93,000 1,40,000 ? ? 1,25,000

Discount allowed totalled Rs.7,000 and discount received was Rs.4,000. Bad debts written off were Rs.8,000. Depreciation was written off on furniture @5% per annum and machinery @10% per annum under the straight line method of depreciation. The office expenses included Rs.5,000 paid as insurance premium for the year endin g 30th June, 2004. Wages amounting to Rs.20,000 were still due on 31st March, 2004.
Prepare trading and profit and loss account for the year ended 31sl March, 2004 and the balance sheet as on that date.

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Ram, Shyam and Mohan were partners sharing profits and losses in the ratio of 5 : 3 : 2 respectively. Their balance sheet as on 31st March, 2004 was as follows :

Liabilities	Rs.	Assets	Rs.
Sundry Creditors General reserve	2,30,000 1,00,000	Furniture and fixtures Stock	60,000 2,60,000
Capital accounts: Ram Shyam Mohan Rs. 2,00,000 Rs. 1,60,000 Rs. 30,000	3,90,000	Debtors Less: Provision for bad debts(2,000) Cash	3,80,000 20,000
	7,20,000		7,20,000

The firm was dissolved as on the above mentioned date. Assets realised as follows
Furniture and fixtures : Rs.20,000; Stock : Rs.2,00,000 and Debtors : Rs.2,40,000.

Sundry creditors to the extent of Rs. 1,000 were paid in full. The total payment to sundry creditors was Rs.2,09,000. It was found that there was a liability of Rs.61,000 for damages which had also to be paid.
Winding up expenses amounted to Rs.20,000. Mohan became insolvent and he could pay only 20 paise in a rupee.
Prepare ledger accounts to close the books of the firm following Garner Vs. Murray rule.

Avon Ltd. has a hire purchase department. Goods are sold on hire purchase at cost plus 50%. From the following particulars, prepare hire purchase stock account, hire purchase debtors account and hire purchase adjustment account :

		Rs.
April 1 2003 March 31 2004	Stock out on hire at cost Instalment due, customers still paying Goods repossessed during the year for instalments unpaid Rs.3,000 evaluated at Cash received during the year Stock out on hire at cost Instalment due, customers still paying	2,00,000 18,000 1,500 3,90,000 1,60,000 30,000

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On 31sl March, 2004, Prateek received a bank statement of his current account which showed a debit balance of Rs. 14,000. An examination of the cash book and bank statement revealed the following:

(i)	Cheques for Rs. 11,400 deposited with the bank for collection were credited by the bank on 3rd April, 2004.
(ii)	Cheques issued, but not presented for payment upto 31st March, 2004 totalled Rs.37,600.
(iii)	A payment by cheque for Rs. 1,600 has been entered twice in the cash book.
(iv)	On 30th March, 2004, the bank credited Rs.20,000 to Prateek by mistake.
(v)	The bank collected interest on securities amounting to Rs. 17,400, but the advice was received by Prateek onrd April, 2004.
(vi)	A bill of exchange for Rs. 10,000 was discounted by Prateek with the bank. The bill was dishonoured on the due date, but no entry had been made in the cash book till 31st March, 2004.
(vii)	Bank charges amounting to Rs.580 had not been entered in the cash book.
Prepare a bank reconciliation statement.

Prem of Delhi and Satish of Agra entered into a joint venture for the purchase and sale of goods. The profits and losses are to be shared in the ratio of 2:1 respectively.
Prem purchased goods for Rs.4,00,000 and sent them to Satish paying Rs.30,000 for freight and insurance. Prem also incurred sundry expenses amounting to Rs.4,000. Satish sold goods for Rs.5,50,000 and incurred Rs.60,000 as expenses. Unsold stock valued at Rs.70,000 was taken over by Satish. Satish remitted the balance due to Prem by a bank draft. Each party's ledger contains a record of his own transactions in the joint venture. Prepare—

(i) (ii)

Memorandum joint venture account; and Joint venture with Satish account in Prem's ledger.

X draws a bill for Rs.30,000 and Y accepts the same for the mutual accommodation of both of them to the extent of X two-thirds and Y one-third. X discounts the same for Rs.28,200 and remits one-third of the proceeds to Y. Before the due date, Y draws another bill for Rs.42,000 on X in order to provide funds to meet the first bill. The second bill is discounted for Rs.40,800 with the help of which first bill is met and Rs.7,200 are remitted to X. Before the due date of the second bill, X becomes bankrupt and Y receives a dividend of 50 paise in a rupee in full settlement. Prepare Y's account in X's ledger.

Arun's goods were partly destroyed by fire on 30th June, 2003. He closes his accounts on 31st March each year. From the following particulars, you are required to prepare a statement of insurance claim :

	Rs.
Stock on 31st March, 2003 Purchases from 1st April, 2003 to 30th June, 2003 Wages from 1st April, 2003 to 30th June, 2003 Sales from 1st April, 2003 to 30lh June, 2003	3,40,170 8,00,000 3,05,000 15,00,000

Average percentage of gross profit to cost is 162/3%. Stock to the value of Rs. 1,00,000 was salvaged. Policy was for Rs.80,000. Claim was subject to average clause.
The following additional information is available :

(i)	Purchases include purchase of plant for Rs.80,000.
(ii)	Firm's own men installed the plant in May, 2003 at a cost of Rs.5,000, the amount was included in wages.
(iii)	Stock in the beginning was calculated at 15% less than cost.