OMTEX CLASSES: September 2008 Book-Keeping and Accountancy

September 2008

Book-Keeping and Accountancy

Time : 3 Hours Marks : 100

Q.1 Attempt any FOUR of the following sub-question: [20]

(A) Answer in one sentence. (5)

1. To which account is gross profit transferred?

2. What do you mean by revenue expenditure?

3. What do you mean by scrap value?

4. What do you mean by renewal of bill?

5. When is Joint Bank Account opened?

(B) Write the word/term/phrase which can substitute each of the following

statements: (5)

1. Debit balance of profit and loss account.

2. Excess of income over expenditure in case of 'Not for Profit Concern'.

3. Excess of average profit over normal profit.

4. Payment of bill before the due date.

5. A partnership for specific purpose and for temporary period.

(C) Match the following pairs: (5)

Group 'A'	Group 'B'
1. Refund fund 2. Opening capital 3. Control unit 4. Joint venture A/c 5. Residual value	1. 1. A nerve centre of the computer 2. Real account 3. Nominal account 4. Sale proceeds of used assets 5. Statement of affairs 6. Liability side 7. Asset side 8. Super computer

(D) Select the most appropriate alternative from those given below: (5)

1. Which of the following items will not appear in the balance sheet of a club?

1. Subscriptions received in advance

2. Special donation received during the year

3. Subscription due for the year

4. Entrance fees paid by new members

2. A bill of exchange is called a ______________ by one who is entitled to receive the amount due on it.

1. Bills payable (b) Draft

1. Expense incurred by co-venturer are debited to _____________.

1. Joint venture A/c (b) Co-venturers A/c

4. Single entry system is __________ record.

(a) Complete (b) Scientific

5. Subscription received in advance during the accounting year is _________.

(a) an income (b) an expense

(E) State whether True / False (with reasons): (5)

1. The expenditure incurred on installation of machinery is revenue expenditure.

2. If discounted bill is honoured the drawer does not record this transaction.

(F) From the following details prepare a format of Bill of Exchange : (5)

Drawer : Shreenath Patil, Bridavan Dham, Nasik.

Drawee : Narayan Shastri, Shiv Colony, Dadar, Mumbai.

Payee : Gopal Sharma, Samrat Nagar, Thane.

Amount of bill : Rs. 9,990.

Period of bill : 90 days.

Date of bill : 15^th October, 2007.

Date of acceptance : 19^th October, 2007.

Q.2 (A) On 1^st April, 2004 Saikripa Enterprises purchased two computers of Rs. 40,000 each. On 1^st October, 2004 they purchased one more computer for Rs. 40,000. (5)[10]

On 1^st October, 2006 they sold one of the computer, which was purchased on 1^st April, 2004 for Rs. 18,780.

Depreciation on computers was provided @10% p.a.on diminishing balance method and the financial year closes on 31^st March every year.

Prepare: Computer A/c and depreciation A/c for years 2004-05, 2005-06 and 2006-07.

(A) The following is the Balance Sheet of Shehal and Minal. (5)

Balance Sheet as on 31 ^st March, 2008

Liabilities	Amount Rs.	Assets	Amount Rs.
Capitals : Snehal Minal Reserve Fund Sundry Creditors Bills Payable	1,50,000 2,00,000 31,000 25,000 29,000	Land and Building Furniture Stock Sundry Debtors Cash Prapaid Advertisement	2,70,000 1,00,000 27,500 12,500 10,000 15,000
	4,35,500		4,35,500

Profits of the firm for the last three years were Rs. 55,000, Rs. 65,000 and Rs. 75,000. Normal rate of return on capital employed is 10% p.a.

You are required to find out the value of goodwill at 3^1/2years' purchased of super profit for the last 3 years.

(B) Explain the components of computer hardware. (5)

Q.3 Shridhar owed Rs. 24,000 to Giridhar, hence accepted a bill drawn on him by Giridhar at

3 months on 12^th March, 2007. On the same date Giridhar endorsed it to Murlidhar. (12)

On 12^th June, 2007 Shridhar requested Giridhar for the renewal of the bill. Giridhar agreed on the condition that Shridhar should pay half the amount due immediately by cheque and should accept a bill for the balance along with interest @ 10% p.a. for 2 months.

These arrangement were carried through. On the same date, Giridhar sent the new bill to the bank for collection. On the due date, the new bill was honoured and bank charges debited were Rs. 100.

Give Journal Entries and show Shridhar's A/c in the books of Giridhar.

Q.3 Journalise the following transactions in the books of Ashwin . (12)

(a) Bank informed that Sachin's acceptance for Rs. 5,750 sent to bank for collection had been honoured and bank charges debited were Rs. 50.

(b) Nitin renewed his acceptance for Rs. 7,200 by paying Rs. 2,200 in cash and accepting a new bill for the balance plus interest @ 8% p.a. for 3 months.

(d) Jatin who had accepted Ashwin's bill of Rs. 8,500 was declared insolvent and only 40% of the amount due could be recovered from his estate.

Q.4 Rajaram and Sitaram entered into joint venture to construct an office building for Bajrang

Enterprises and decided to share profits and losses in the ratio of 3:2. Rajaram and Sitaram

contributed Rs. 2,50,000 and Rs. 1,50,000 respectively. The money was deposited into a joijnt

bank account.

Rajaram supplied equipment and tools valued Rs. 4,00,000 and building materials valued

Rs. 3,50,000 were supplied by Sitaram. The following expenses were paid through joint bank

account.

Payment of wages Rs. 3,00,000, Staff salaries Rs. 1,75,000, Architect's fees Rs. 50,000

and Sundry expenses Rs. 25,000. On completion of construction, Bajrang Enterprises paid

Rs. 20,00,000 out of which Rs. 15,00,000 in cash and the balance of Rs. 5,00,000 in fully paid-

up shares of Rs. 10 each. These shares were taken over at Rs. 12 each by Rajaram and Sitaram in

equal ratio. At the close of joint venture, equipment and tools were taken up by Rajaram at an

agreed value Rs. 1,50,000 and unused materials were taken by Sitaram for Rs. 50,000.

Prepare: (a) Joint Venture Account (b) Joint Bank Account (c) Co-venture's Account in the Books of Joint Venture. (12)

Q. 5 Mr. Suryakant maintains books on single Entry and who gives you the following information :

Particulars	31-3-2006	31-3-2007
Cash in hand Cash at bank Stock Sundry Debtors Investments Furniture Machinery Sundry Creditors Outstanding Expenses	500 2,500 20,000 25,000 20,000 10,000 25,000 10,000 3,000	2,000 5,000 30,000 40,000 20,000 25,000 40,000 10,000 2,000

Additional information:

1. Mr. Suryakant introduced further capital of Rs. 20,000 on 1^st July, 2006 and had withdrawn Rs. 10,000 during the year.

2. Interest on capital is allowed at 10% p.a.

3. Additions to furniture and machinery were made on 1^st October, 2006.

4. Write off depreciation on furniture and machinery at 10% p.a.

5. Create reserve for doubtful debts at 5% on Sundry debtors.

Prepare: (a) Statement of Affairs.

(b) Statement of Profit and Loss for the year ended 31^st March, 2007. (10)

Q.6 From the following Balance Sheet and Receipts and Payments A/c of Padmavati High School,

Thane, prepare Income and Expenditure A/c for the year ended 31-03-2007 and balance sheet as

on that date. (16)

Trial Balance Sheet as on 31 ^st March, 2006

Debit Balance	Amount Rs.	Credit Balance	Amount Rs.
Entrance Fees Capital Fund	30,000 5,19,000	Furniture Computer Laboratory Library Investment Cash in Hand Cash at Bank Outstanding Tuition Fees	84,000 1,00,000 1,25,000 2,00,000 5,000 15,000 20,000
	5,49,000		5,49,000

Receipts and Payment Account for year ended 31 ^st March, 2007

Receipts	Amount Rs.	Payments	Amount Rs.
To Balance b/d Cash in Hand Cash at Bank To Tuition fees To Terms fees To Government grant (Salary) To Sundry receipts To Sale of old newspapers To Interest on investments To Donation of library	5,000 15,000 4,00,000 1,20,000 1,04,500 11,000 500 10,000 1,50,000	By Furniture purchased By Salaries By Rent By Sundry expenses By Stationery By Annual gathering expenses By Repairs of buildings By Insurance By Balance b/d Cash in Hand Cash at Bank	52,000 3,00,000 1,40,000 27,000 49,000 24,000 32,500 20,000 44,500 1,27,000
	8,16,000		8,16,000

Adjustment :

1. Tuition fees receivable Rs. 1,50,000.

2. Salary still payable Rs. 1,50,000.

3. Rent paid in advance Rs. 20,000.

4. Insurance premium is paid for one year ending 30-09-07.

5. Depreciate furniture and library at 10% and computer laboratory at 20%. Depreciation to be charged on the closing balances of assets.

Q.7 Following is the Trial Balance of Premlal and Sundarlal as on 31 ^st March, 2006. (20)

Trial Balance as on 31 ^st March, 2006

Debit Balance	Amount Rs.	Credit Balance	Amount Rs.
Stock on 1-4-2005 Purchases Drawings : Premla Sundarlal Sales Return Wages : Productive Unproductive Salaries Rent, Rates and Insurance Bad Debts Discount allowed Machinery Building Sundry Debtors Cash	90,000 2,25,000 33,000 30,000 7,200 10,500 1,800 18,600 10,200 1,200 3,900 45,000 1,08,600 1,53,000 3,000	Sales Purchase Returns Discount received Sundry Creditors Capital : Premlal Sundarlal Bank Overdraft	3,75,000 3,000 3,000 90,000 1,05,000 1,35,000 30,000
	7,41,000		7,41,000

Adjustments:

1. Closing stock was valued on 31-03-2006 at market price Rs. 60,000 which was 20% above its cost price.

2. Outstanding productive wages Rs. 600.

3. Rent, Rates and Insurance include Insurance Rs. 1,600 paid for one year ending on 30^th June, 2006.

4. Maintain Reserve for doubtful debts at 5% on debtors.

5. Depreciate building by 5% and machinery at 10% p.a.

6. Goods costing months interest is due on Bank Overdraft at 10% p.a.

Prepare: (1) Trading and Profit and Loss A/c for the year ended 31^st March, 2006 and

(2) Balance Sheet as on that date.

Advertisement

September 2008 Book-Keeping and Accountancy