| 1. | In each of the following cases one of them is correct. Indicate the correct answer: | 2x15=30 | |
| | (a) | Which of the following represents the value of shares with which a company is registered? | (i) | Called up Capital | | (ii) | Paid up Capital | | (iii) | Authorized Capital |
| | (0) |
| | (b) | In the case of Non–profit making organisations,excess of Income over Expenditure is known as | (i) | Profit | | (ii) | Surplus | | (iii) | Deficit |
| | (0) |
| | (c) | An agent to whom goods are sent for sale on a commission basis is called a | (i) | Cosignor | | (ii) | Consignee | | (iii) | Broker |
| | (0) |
| | (d) | Sale of goods to Tom wrongly posted in the account of jerry | (i) | Will affect the Trial Balance | | (ii) | Will not affect the Trial Balance | | (iii) | Will affect the profit |
| | (0) |
| | (e) | Parties to the Bills of Exchange are | (i) | Drawer, Drawee and Payee | | (ii) | Debtor, Creditor and Banker | | (iii) | Payer, Payee and Banker |
| | (0) |
| | (f) | The recognition that every transaction has two sides to it is the leading principle of | (i) | Accrual concept | | (ii) | Realisation concept | | (iii) | Dual Aspect Concept |
| | (0) |
| | (g) | The balance in the share Forfeiture A/c after the forfeited shares are issued should be transfered to | (i) | General reserve | | (ii) | Share Premium | | (iii) | Capital Reserve |
| | (0) |
| | (h) | Subscription received in advance is | (i) | Current Asset | | (ii) | Current Liability | | (iii) | Income |
| | (0) |
| | (i) | Share which have preference at the time of payment of Dividend and repayment of capital are | (i) | Equity Shares | | (ii) | Preference Shares | | (iii) | None of the above |
| | (0) |
| | (j) | Purchase of Furniture by a Furniture Dealer is to be treated as | (i) | Purchase of Stock | | (ii) | Purchase of Fixed Asset | | (iii) | Drawing |
| | (0) |
| | (k) | If the firm has adequate financial resources, retiring partner’s claim can be | (i) | Transfered to a loan account | | (ii) | Satisfied by lump sum payment | | (iii) | Paid in installments |
| | (0) |
| | (l) | Preference shares carry a fixed rate of dividend which is to be paid before | (i) | Payment of debenture interest | | (ii) | Payment of income tax | | (iii) | Distribution of equity dividends |
| | (0) |
| | (m) | The shares alloted to a subscriber who has defaulted in paying any call due on his shares can be forfeited | (i) | By decision of the Board of Directors | | (ii) | By passing a resolution at the A.G.M. | | (iii) | Within 6 months of such issue. |
| | (0) |
| | (n) | Redemption of preference shares should be made | (i) | Out of the funds obtained from fresh issue of shares. | | (ii) | Out of the non–specific reserves | | (iii) | Either out of the funds obtained from fresh issue of shares or out of the non–specific reserves of the company. |
| | (0) |
| | (o) | It is usual to prefix "debentures" with annual rate of | (i) | Return | | (ii) | Interest | | (iii) | Dividend. |
| | (0) |
| 2. | The Assets and Liability position of "WE CARE" sports Club was as follows:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i) |
Fixed Assets
Bank
Cash
Prepaid Insurance
Subscription received in Advance
Interest out standing on loan
Loan(cr)
Outstanding Expenses:
Water
Electricity
Subscription Receivable | 31.03.2003
Rs.
96,224.00
10,220.00
450.00
200.00
4,500.00
125.00
10,000.00
1,000.00
1,250.00
3,000.00 | 31.03.2004
Rs.
86,601.60
14,470.00
650.00
–
3,000.00
–
–
750.00
1,000.00
4,500.00 |
| Receipts and payment A/C for the year ended 31.03.2004 | | Receipts | Rs. | Payment | Rs. | Opening Balance:
Cash
Bank
Subscription
Miscellaneous |
450.00
10,220.00
75,000.00
2,500.00 |
Loan repaid
Rent
Water
Electricity
Insurance
Repairs
Wages
Telephone
Interest on Loan
Miscellaneous
Closing Balance
Cash
Bank |
10,000.00
11,000.00
12,000.00
15,000.00
5,000.00
6,000.00
6,000.00
7,200.00
250.00
600.00
650.00
14,470.00 | | 88,170.00 | | 88,170.00 |
Prepare the: | (i) | Income and Expenditure A/C for the year ended, and | | (ii) | Balance Sheet as on 31.03.2004. |
| 14 | (0) |
| 3. | PGG Limited has Authorised capital of Rs. 10,00,000. The Company issued 75,000 equity shares of Rs. 10 each at a premium of Rs. 4 per share payable as follows: On application Rs. 7 (including premium of Rs. 2), on allotment of Rs. 5 (including the balance premium), and the balance in two calls of equal installments. Applications received for 1,00,000 share. The applicants were divided as follows: | (a) | Those who applied for 25,000 shares were alloted in full | | (b) | Those who applied for 60,000 shares were alloted 50,000 shares on pro rata | | (c) | The applicants for the balance applications were refunded in full |
Excess payment received on appliction was adjusted aganist allotment money. Shareholders holding 5,000 shares failed to pay when the second and final call was made. These shares were forfeited and reisuued at Rs. 9 per share. | 14 | (0) |
| 4. | On 31.03.2004 the Trial Balance of Mr. Hariharan did not agree. The difference was transferred to Suspense A/c. It was discovered by the Accountant that the following errors have taken place: | (a) | Purchases return book was overcast by Rs. 90 | | (b) | Sales return book was undercast by Rs. 54 | | (c) | Purchase of Air Conditioner amounting to Rs. 12,500 was wrongly entered in Purchase Day Book. | | (d) | Rent paid on Mr. hariharan's behalf for his house was charged to Rent A/c amounting to Rs. 12,000 | | (e) | Goods returned to Mr. Ram amounting to Rs. 270 was not debited to his A/c | | (f) | Sales of Rs. 12,950 to Mr. Kishen was wrongly entered in purchase Day Book | | (g) | Purchase of Rs. 19,500 from Ms. Mala was debited to the Party’s A/c | | (h) | Cash balance of Rs. 9,546 was wrongly carried forward as Rs. 9,456 | | (i) | Sales of Rs. 9,860/- to Mr. Sharma was wrongly debited to his A/c as Rs. 9,680 | | (j) | Payment made to Ms. Bala Rs. 24,000 towards salary wrongly debited to Ms. Bala’s A/c. |
pass necessary Journal entries in the books of Mr. Haritharan taking the items affecting the Profit and Loss to Profit and Loss Adjustment A/c, finally transfer the balance in Profit and Loss Adjustment A/c to Mr. Hariharan’s Capital A/c. | 14 | (0) |
|
| 5. | (a) | Prepare a Bank Reconciliation Statement as on 31.03.2004 in the books of Mr. Olwin with the help of the information given below: | Rs. | Balance as per Cash book as on 31.03.2004
Cheque deposited on 29.03.2004 not cleared
Cheques issued to various parties on 31.03.2004
Dividend collected by Bank on our behalf
Telephone bill debited on 28.03.2004 through ECS clearing
Bank charges debited by a Bank
Out Station Cheque Dishonoured not accounted in Cash book
Amount wrongly debited by Bank rectified after 01.01.2004
Amount directly deposited by Clients in Bank in the last week of March | 25,600.00
15,000.00
7,500.00
580.00
1,950.00
29.00
12,500.00
1,250.00
15,900.00 |
| 7 | (0) |
| | (b) | Sudan drew two bills on Gauri for Rs. 25000 each payable 1st April and 30th June respectively. Gauri approached Sudan 15th March to renew the bill due on 1st April and a fresh bill for Rs. 25,500 was drawn payable after two months which was honoured on due date. On 25th June Gauri approached once again, paid Rs. 12500 in cash and accepted a fresh bill for Rs. 13000 payable on month after. Gauri was declared insolvent and a dividend of 50 paise per Rupee was received from her estate as full and final settlement. Pass necessary Journal entries in the books of Sudan. | 7 | (0) |
| 6. | A and B decided to work on a joint venture for the sale of electric motors. On 21st May, 2002, A purchased 200 electric motors at Rs. 175 each and dispatched 150 electric motors to B incurring Rs. 1,000 as freight and insurance charges, 10 electric motors were damageed in transit. On 1st February, 2003 Rs. 500 was received by A from the insurance company in full settlement of claim. On 15th March, 2003, A sold 50 electric motors at Rs. 225 each. He received Rs. 15,000 from B on 1st April, 2003. On 25th May, 2002, B took delivery of electric motors and incurred the following expenses : Clearing charges Rs.125; repair charges for motors damageed in transit Rs. 300; and go down rent Rs. 600. B sold the electric motors as follows: On 1.2.2003 10 damageed motors at Rs. 170 each; on 15.3.2003 40 motors at Rs. 200 each; on 1.4.2003, 20 motors at Rs. 315 each; on 1.4.2003, 80 motors at Rs. 250 each. It is agreed that they are entitled to commission at 10% on the respective sales effected by them and that the profits and losses shall be shared by A and B in the ratio of 2 : 1. B remits to A the balance of money due on 30th April, 2003. Prepare: (1) Joint venture with B Account in the books of A, and (2) Memorandum Joint venture Account. | 14 | (0) |
| 7. | A and B are partners sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet stood as under on 1.1.2003: | Liabilities | | Rs. | Assets | |
Rs. | Capital Accounts
Resrve
Creditors
Outstanding Expences | A
B | 29,000
15,000
10,000
28,500
4,000 | Buildings
Machinery
Furniture
Stock
Debtors
Less:provision for Bad Debts
Prepaid Insurance
Cash |
9,400
400 | 35,000
19,000
5,000
15,000
9,000
1,500
2,000 | | 86,500 | | 86,500 |
C is admitted as a new partner introducing a capital of Rs. 21,000. The capital of the partners are to be adjusted in the new profit-sharing ratio, which is 5:3:2 taking C's capital as base. C is to bring premium for goodwill in cash. Goodwill amount being calculated on the basis of C's share in the profits and capital contributed by him. Following revaluations are made : (i) Stock to be depreciated by 5%; (ii) Provision for bad debts is to be raised to Rs. 500; (iii) Furniture to be depreciated by 10%; (iv) Buildings are revalued at Rs. 41,350.
Prepare necessary Ledger Accounts and the Balance Sheet of the new firm. | 14 | (0) |
| 8. | Write short notes on: | 14 | |
| | (i) | Analytical petty Cash Book; | | (0) |
| | (ii) | Due date of a Bill of Exchange; | | (0) |
| | (iii) | Legacy; | | (0) |
| | (iv) | Importance of Bank Reconciliation. | | (0) |
