March 2010 Accounts Paper

Q1. Attempt any four sub – questions of the following:

A.      Answer in ‘One’ Sentence each:

1.       What are Revenue Expenditures?

2.       Who is a Drawer?

3.       What is a Joint Venture?

4.       What is a computer?

5.       What is a Goodwill?

B.      Write a word / term/  phrase which can substitute each of the following sentences:

1.       The incomplete method of accounting system.

2.       The gradual and permanent decrease in the value of fixed assets due to any cause.

3.       Payment before the due date of the bill.

4.       An account opened in the bank in a joint name of the co – ventures.

5.       The unit of the computer which is popularly known as heart, brain and nervous system.

C.      Match the following pairs:

Group A	Group B
1.       Income and Expenditure account 2.       Drawings 3.       Bill of Exchange 4.       Co – venturers’ Liability 5.       Intangible Asset	a.       Withdrawals in cash or kind b.      Negotiable Instrument c.       Similar to Profit and Loss account d.      Limited e.      Computer f.        Unlimited g.       Goodwill h.      Building

D.      Select the most appropriate alternative from those given below and rewrite the sentences:

1.       The Indian Partnership Act in force since __________

a.       1933

b.      1932

c.       1956

d.      1934

2.       Receipt and Payment account is a _________ account.

a.       Personal

b.      Real

c.       Nominal

d.      None of these

3.       Under Fixed Installment Method depreciation is charged on _________

a.       Original cost

b.      Written down value

c.       Scrap Value

d.      Market value

4.        There are ___________ parties to a bill of exchange.

a.       Two

b.      Four

c.       Three

d.      Five

5.       Expenses of Joint Venture business are debited to _________

a.       Joint Bank A/c

b.      Joint Venture A/c

c.       Co – venturer’s A/c

d.      Debentures A/c

E.       State with reasons whether the following statements are True or false.

1.       Balance Sheet is an account of business result

2.       The main object of not for profit organizations is to earn profit.  

F.       Prepare a bill of exchange from the following information.

Drawer                                                 :               Subhash Suryawanshi, Main Road, Ajara.

Drawee                                                :               Mudhukar Bharati, Amboli Road, Sawantwadi.

Payee                                   :               Manoj Desai, Amboli.

Peroid                                   :               60 days.

Date of Bill                          :               25^th May, 2006

Date of Acceptance        :               28^th May, 2006.

Amount of Bill                   :               Rs. 5,700.

Q2. On 1^st April, 1995, Avadhoot Traders, Ajara, purchased machinery for Rs. 40,000. On 1^st October, 1995 they purchased further machinery costing Rs. 20,000. On 1^st October, 1997 they sold machinery which was purchased on 1^st April 1995 for Rs. 28780. Depreciation on machinery was provided at the rate of 10% p.a. on Diminishing Balance method.

The Financial year closes on 31^st march every year. Prepare Machinery account and Depreciation account for three years. 1995 – 96, 1996 – 97, 1997 – 98.  

OR

A. The capital of a partnership firm is Rs. 3,00,000. Profits for the last 4 years was Rs. 32,500, Rs. 36,000 and Rs. 39,000. The reasonable return on the capital employed is 11%. Calculate the value of goodwill on the basis of 3 years purchases of super profit.

B. Explain the role of computer in accounting.  

Q3. Madhav accepted a bill of Rs. 40,000 drawn by kashinath at 3 months. Kashi8nath got the bill discounted with his bank for Rs. 39,000. Before the due date, Madhav approached Kashinath for renewal of the bill. It was agreed to pay Rs. 30,000 immediately together with interest on the remaining amount at 10% p.a. for 3 months and for the balance Madhav accepted a new bill for 3 months. These arrangements were carried through.

But afterwards Madhav became insolvent. Only 35% of the amount could be recovered from his estate.

Pass necessary Journal entries in the books of ‘Madhav’

Prepare Madhav’s account in the books of ‘Kashinath’

OR

Journalise the following transactions in the books of ‘Avadhoot’.

a.       Nandini informs Avadhoot that Nisha’s acceptance for Rs. 5000 endorsed to Nandini has been dishonoured. Noting charges amounted to Rs. 100.

b.      Dhanashri renews her acceptance to Avadhoot for Rs. 2400 by paying Rs. 1200 in cash and accepting a new bill for the balance plus interest at 12% p.a. for 3 months.

c.       Honagekar’s acceptance to Avadhoot Rs. 6000 retired one month before its due date at a discount of 20% p.a.

d.      Bank informs to Avadhoot that the dishonour of Shashikala’s acceptance for Rs. 4000 discounted with the bank. Noting charges amounted to Rs. 70.

e.      Avadhoot sent a bill of Pravin for Rs. 6000 to the bank for collection.

Q4. Apate, Bachute and Chapate undertook construction of the Cultural Hall of a Company at a contract price of Rs.60,000 payable in Cash Rs.40,000 and Rs.20,000 in the form of Debentures of a company. (12)

They shared profits and losses in the ratio of 3:2:1 respectively.

Apate Rs.30,000, Bachute Rs.20,000, Chapate Rs.10,000.

The following payments are made out through Joint Bank Account.

1. Purchase of materials Rs.25,000

2. Payment of wages Rs.7,700

3. Purchase of plant Rs.4,500

4. Other charges Rs.1,100

Apate brings a truck of Rs.4,000

Bachute brings materials of Rs.5,500

Chapate brings a mixer worth Rs.1,000

At the close of the venture the unused materials were taken by Apate for Rs.500.

Bachute took over the mixer and plant for Rs.2,700.

The truck was sold in the market for Rs.2,200.

The contract price was received as per the agreement.

Chapate agreed to take over the debentures at Rs.19,000.

Prepare : 1. Joint Venture Account

2. Joint Bank Account

3. Co-venturer's Account

Q.5 Mr. Balasaheb is dealing in the business of fruits. He maintains his accounting record with single entry. The following figures are taken from his record. (10)

Particulars	Balance as on 1.4.2004	Balance as on 31.3.2005
Land and Building Machinery Furniture Sundry Debtors Stock Cash Balance Bills Receivable Sundry Creditors Bank Overdraft Bank Balance	40,000 30,000 10,000 20,000 10,000 5,000 5,000 25,000 5,000 -	50,000 40,000 10,000 40,000 25,000 15,000 5,000 25,000 - 10,000

Mr. Balassheb introduced Rs. 10,000 as further capital.

He spent Rs. 45,000 from the business for his daughter's marriage.

Depreciate Land and Building by Rs. 5,000

Create 5% Reserve for Doubtful Debts on Sundry Debtors.

Prepare:

1.    Opening Statement of Affairs.

2.    Closing Statement of Affairs.

3.    Statement of Profit and Loss.

Q.6 Following is the summary of Receipts and Payments of Jay Bajrangbali Vyayam Shala, Ajara for the year ending on 31.03.2007. (16)

Receipts and Payments Accounts

For the year ended on 31 ^st March, 2007

Receipts	Amount Rs.	Payments	Amount Rs.
To balance b/d To Subsciption 2005-06 2006-07 To Donation for Building To Receipts from Entertainments To Interest To Entrance fees	41,600 4,120 1,60,000 50,000 36,440 3,240 45,000	By Salary By Lighting By General Expenses By Entertainment Expenses By Taxes paid By Printing and Stationery By Expenses paid of 2005-06 By Investment By Fixed Deposit with Ajara Urban Bank By Balance c/d	55,000 10,000 15,360 25,800 5,000 9,440 24,000 1,20,000 40,000 35,800
Total	3,40,400	Total	3,40,400

Adjustment :

1.     Jay Bajrangbali Vyayam Shala has 4500 members paying annual subscription of Rs.40 each.

2.     Provide for outstanding salary Rs.5,000.

3.     On 1.4.2006 the assets stood as under :

(a) Land and Building Rs.60,000

(b) Furniture Rs.46,000

Depreciate the above assets at 10% p.a.

1.     Interest on Investment Rs.2,000 is not received.

2.     Capital Fund was Rs.1,27,720 on 1.4.2006.

3.     50% of the entrance fees is to be capitalized.

Prepare:

Income and Expenditure Account for the year ended 31^st March, 2007 and Balance Sheet

as on that date.

Q.7 Ashok and Tanaji are Partners sharing Profits and Losses in the ratio 2:3 respectively. (20)

Trial Balance as on 31 ^st March, 2007

Particulars	Amount Rs.	Particulars	Amount Rs.
Purchases Patents Right Building Stock (1.4.2006) Printing and Stationery Sundry Debtors Wages and Salaries Audit fees Sundry expenses Furniture 10% Investment (Purchased on 30.09.2006) Cash Provident Fund Contribution Carriage Inwards Travelling Expenses	98,000 4,000 1,00,000 15,000 1,750 35,000 11,000 700 3,500 8,000 10,000 4,000 800 1,300 2,700	Capitals : Ashok Tanaji Provident Fund Creditors Bank Loan Sales Reserve for Doubtful Debts Purchase Return	30,000 40,000 7,000 45,000 12,000 1,58,000 250 3,500
	2,95,750		2,95,750

Adjustments :

1.     Closing stock is valued at the Cost of Rs.15,000 while its Market Price Rs.18,000.

2.     On 31^st March, 2007 the stock of stationery was Rs.500.

3.     Provide reserve for bad and doubtful debts at 5% on debtors.

4.     Depreciate building at 5% and patent rights at 10%.

5.     Interest on capitals is to be provided at 5% p.a.

6.     Goods worth Rs.10,000 were destroyed by fire.

7.     The Insurance company admitted a claim for Rs.8,000.