ACCOUNTS BOARD PAPER FEBRUARY 2014

OMTEX CLASSES


         Accounts Board Paper Feb. 2014

Q. 1. Attempt any Three of the following.  [15]

A. Answer in one sentence only:

1. What do you mean by 'carriage inward'?

Ans. The expenses incurred to bring raw materials inside the factory is known as carriage inward. It is a direct expenses and its recorded in the Debit side of Trading A/c.

2. What is 'due date of a bill'?

Ans. The date on which the bill will become mature for pay is known as due date the bill.

3. What is 'deficit'?

Ans. Debit balance of Income and Expenditure account is known as Deficit, it is the expenditure over income of a 'Not for Profit' Concern. 

4. What do you mean by 'sacrifice ratio'?

Ans. The proportion of future profit shared by old partners to the new partner during the admission of a new partner in some ratio is known as Sacrifice ratio. Its formula is_
Sacrifice ratio =  Old Ratio  New Ratio

5. Which statement is prepared under single entry system to ascertain profit?

Ans. Statement of Profit or loss is prepared under single entry system to ascertain profit.

B. Write the word / Term / Phrase which can substitute each of the following statement:

1. The debit balance of trading account. (Gross loss)

2. The excess of total assets over total liabilities of a 'not for profit concern'.  (Capital Fund)

3. Expenses incurred on dissolution of a partnership firm. (Realisation expenses)

4. Transfer of title of a bill from a debtor to a creditor. (Endorsement of bill of exchange)

5. The statement showing profitability of two different periods and its percentage change. (Comparative income statement)

C. Select the most appropriate alternative from the given below and rewrite the statement:

1. When shares are forfeited, share capital account is _____________

a. debited

b. credited

c. adjusted

d. none of the above

2. A bill drawn and accepted on 23rd November, 2012 for two months will payable on _____________

a. 23rd January, 2012

b. 23rd January, 2013

c. 25th January, 2013

d. 26th January, 2013

3. If the opening capital is Rs. 80,000, closing capital is Rs. 1,80,000, withdrawals are Rs. 10,000 and additional capital brought in is Rs. 20,000, the profit will be Rs. ______________

a. 90,000

b. 1,10,000

c. 70,000

d. 1,50,000


4. Assets and liabilities are transferred to Realisation Account at their _________ value.

a. market

b. purchase

c. sale

d. book.


5. Share of profit or a deceased partner till the date of his death is ____________

a. debited to profit and loss adjustment account

b. credited to profit and loss adjustment 
account. 

c. debited to profit and loss suspense account.

d. credited to profit and loss suspense account.

D. State whether the following statements are True or False.

1. Honour of bill means payment in accordance with the apparent tenor of the bill. (True)

2. The issue of debenture more than the face value is termed as issue of debenture at par. (False)

3. Return inward is deducted from purchases. (False)

4. Ratio analysis is useful for inter  firm comparison. (True)

5. Renewal is a request by drawee to cancel the old bill and draw a new bill by extending the credit period. (True)

E. Prepare a bill of exchange from the following details.

Drawer : Ramesh Mishra, L.B.S. Road, Ghatkopar, Mumbai

Drawee : Nandkumar Sharma, Laxmi Road, Pune

Payee: Rupesh Kumar Pande, Rajkamal Chowk, Amaravati.

Period of bill: 90 days

Amount of bill : Rs. 25,000

Date of Bill: 17th February, 2014

Date of Acceptance: 20th February, 2014

Accepted for : Rs. 20,000 only.


Q2.  Mr. Keshav keeps his books on single entry system and disclosed the following information of his business. [8 MARKS]

Particular
1 st April, 12 (Rs.)
31 st March, 13
(Rs.)
Investments

30000
Bills payable

18000
Creditors
52500
69000
Furniture
15000
45000
Debtors
60,000
90,000
Stock in Trade
30,000
37,500
Cash at Bank
36,000
54,000

Additional information

(1) Mr. Keshav transferred Rs. 3,000 per month during the first half year and Rs. 2000 per month for the second half year from business account to his personal account.

(2) he also took goods worth Rs. 7,000 for private use.

(3) He sold his private asset for Rs. 27,000 and brought the proceeds into his business.

(4) Furniture to be depreciated by 10%

(5) Provide reserve for doubtful debts at 5% on debtors.

Prepare: (i) Opening statement of affairs.

(ii) Closing statement of affairs.

(iii) Statement of Profit and Loss for the year ended 31st March, 2013.


OR

Q2. A. What are the different 'Cash inflows' and 'Cash outflows' of operating activity? (4)
B. State and explain any 'four objectives' of financial statement analysis from business point of view. (4)

Q3. Mrs. Shehal and Mrs. Meenal are equal partners in a business. Their balance sheet is as follows.


Balance Sheet as on 31st March, 2013  [10 MARKS]

Liabilities

Amount Rs.
Assets

Amount Rs.
Capital A/cs

Premises

20,500
Snehal
80000
Investments

10,500
Meenal
45000
125000
Equipments

5,000
Creditors

46,000
Bills Receivable

18,000
General reserve

20,000
Debtors
110000




( - ) R.D.D.
11000
99000



Bank Balance

38,000


191,000


191,000

They agreed to admit Mr. Komal on 1st April, 2013 on the following terms:

(1) Komal should bring Rs. 50,000 towards her capital for one fourth (1/4th )Share in future profit.

(2) Goodwill to be raised in the books of the firm for Rs. 40,000.

(3) R.D.D. to be maintained at 5% on debtors.

(4) Premises to be valued at Rs. 30,000 and 
equipments to be written off fully.

(5) Creditors allowed a discount of Rs. 1,000 and they were paid off immediately.
Prepare: Profit and Loss Adjustment Account, Partner's Capital Accounts and Balance Sheet of the new firm.


OR

Pravin, Prakash and Paresh were partners sharing profits and losses in the proportion to their capitals. their balance sheet of the firm on 31st March, 2013 was as under.

Balance sheet as on 31st March, 2013

Liabilities

Amount
(Rs.)
Assets

Amount
(Rs.)
Capital A/cs


Land and Building

80,000
Pravin

60,000
Investments

40,000
Prakash

40,000
Debtors
32000




Less: R.D.D.
-4000
28000
Creditors

56000
Stock

36000
Reserve Fund

36000
Cash

28000








212000


212000

Paresh died on 1st August, 2013 and the following adjustments were made:

(1) Assets were valued as – Land and building Rs. 88,000. Investments Rs. 36,000 and Stock Rs. 34,000.

(2) All debtors were good.

(3) Goodwill of the firm valued at two times the average profit of the last 4 years' profit.

(4) Paresh's share of profit upto his death to be calculated on the basis of average profit of the last two years.

(5) Profits for the last four years were: Rs. 12,000, Rs. 24000, Rs. 14000 and Rs. 22000.

Prepare: (i) Profit and Loss Adjustment Account.

(ii) Paresh's Capital Account, showing the amount payable to his executor.

(iii) Give working of Paresh's share in Goodwill and Profit.

Q4. Journalise the following transactions int he books of Kedarnath:

1. Badrinath informs Kedarnath that Aloknath's Acceptance of Rs. 16,000 endorsed to Badrinath has been dishonoured and noting charges amounted to Rs. 500.

2. Somnath renews his acceptance of Rs. 14,400 to Kedarnath by paying cash Rs. 4,400 and accepting a new bill for 2 months for the balance plus interest @ 12% p.a.

3. Vishwanath retired his acceptance for Rs. 10,500 to Kedarnath by paying in cash Rs. 10,250

4. Recovered only 50% of the amount due from his private estate of Ramnath, who declared as insolvent, against his bill of Rs. 12,500.  [10 MARKS]



Q5. Devendra and Ganesh were partners sharing profits and losses in the ratio of 3:2. They dissolved the partnership firm on 31st March, 2013 when their position was as follows.:
Balance Sheet as on 31. 03. 2013

Liabilities
Rs.
Rs.
Assets
Rs.
Rs.
Sundry Creditors
12,500
Debtors
56250
Bank overdraft
10,000
(-) R.D.D.
( - )   6250
50,000
Reserve Fund

15,000
Stock

1,12,500
Capital Accounts


Furniture

25,000
Devendra
1,15,000

Motor Car

37,500
Ganesh
75000
190000
Cash in hand

2500


227500


227500
The assets realised as follows:
(1) Debtors Rs. 45,000, stock Rs. 1,00,000 and goodwill Rs. 12,500
(2) Motor car was taken over by Devendra for Rs. 35,000 and furniture by Ganesh for Rs. 30,000.
(3) The creditors were paid Rs. 11,250 in full settlement.
(4) The realisation expenses were Rs. 5,000.
Pass necessary journal entries in the books of the firm.


OR

Khandelwal Co. Ltd. made an issue of 40,000 equity shares of Rs. 20 each, payable as follows:
Application : Rs. 5 per share
Allotment : Rs. 10 per share.
First call: Rs. 3 per share.
Second and Final call: Rs. 2 per share.
The company received applications for 45,000 shares of which applications for 5000 shares were rejected and the money refunded. All the shareholders paid upto second call except Sachin, the allottee of 2,000 shares, failed to pay final call.
Pass Journal Entries for the above transactions in the books of Khandelwal Co. Ltd.


Q6. Following is the Receipts and Payments Account of Chamber of Commerce, Amaravati for the year ending 31st March, 2012 and some additional information.  [12 MARKS]

Receipts and Payments A/c For the year ended 31.03.2012
Receipts
Amount
Payments
Amount
To balance b/d
(Cash at bank)
11,960
By Printing and Stationery
6950
To subscription
(Including Rs. 2500 for 2010 – 11)
36500
By Repairs
2100
To Sale of furniture
(Books value Rs. 18,000)
12000
By Rent
8500
To Donation for building fund
27000
By Books
20000
To Admission fees
(Revenue)
5050
By Travelling expenses
2000


By Investments
40,000


By Insurance
1700


By Balance c/d
(Cash at bank)
11260





92510

92510

Additional information:

Particulars
1.04.2011
31.03.2012
Outstanding subscription
3000
5000
Furniture
32000
12600
Building fund
145000

Capital fund
151960

Investment
250000

Prepare Income and Expenditure A/c for the year ended 31st March, 2012 and balance sheet as on that date.


Q7. Miss Meena and Miss Reena are in partnership sharing profits and losses in the ratio of 3:2.
From the following trial balance and adjustments, you are required to prepare Trading Account, Profit and Loss Account for the year ended 31st March, 2013 and Balance Sheet as on that date.
Trial Balance as on 31.03.2013
Particulars

Amount
(Rs.)
Particulars

Amount
(Rs.)
Building

400000
Capital Accounts


Plant and machinery

120000
Meena
300000

Purchases

650000
Reena
200000
500000
Carriage

7000
Sales

814000
Opening Stock

90000
Sundry creditors

180000
Wages

35000
Bank overdraft

20000
Sundry debtors

150000



Salaries

28000



Postage and   telegram

4000



Insurance

5000



Bad debts

3000



Rent

4000



Discount

3000



Drawings





Meena
10000




Reena
5000
15000





1514000


1514000

Adjustments:
1. Stock on hand on 31st March, 2013 was valued at Rs. 1,10,000.
2. Depreciate plant and machinery at 10% p.a.
3. Create reserve for doubtful debts at 5% on sundry debtors.
4. Salaries include Rs. 2500 as advance to workers.
5. Partners are allowed interest at 5% p.a. on their capitals.