Book Keeping & Accountancy July 2016 Board Paper

Book Keeping & Accountancy July 2016 Board Paper


Book Keeping & Accountancy

July 2016 Board Paper

Q. 1. A. Answer the following questions in one sentence each. [5]

(1) What is Trial Balance?

Ans. Trial balance is a statement showing the list debit and credit balances of all the ledger accounts on a particular date.

(2) What shows credit balance of revaluation account?

Ans. Profit on Revaluation Account.

(3) What are ‘convertible debentures’?

Ans. Convertible Debentures; - Convertible Debentures are those which can be converted either partly or wholly into equity shares after the completion of a definite period. The rate of interest and date of conversion is decided at the time of issue. The interest is paid up to the date of conversion. On conversion the debenture holders are eligible for dividends and other rights and privileges of shareholders.

(4) Who is ‘Payee’?

Ans. Payee is the person or party to whom the amount of bill is made payable.


(5) What is single entry system?
Ans. A book – keeping system that only records one aspect of each business transaction. i.e. either debit or credit is called single entry system.


(B) Write a word / term / phrase which can substitute each of the following statements: (5)

(1) The accounts which are prepared at the end of each financial year.

Ans. Trading and Profit and Loss Account.

(2) The fees paid by a person who wants to become a life member of the concern, for his whole life.

Ans. Life membership fees.

(3) The acknowledgement of debt under common seal of company.

Ans. Debenture Certificate

(4) Payment of the bill before its due date.

Ans. Retirement of Bill.

(5) Critical evaluation of financial statement to measure profitability.

Ans. Analysis of financial statement


(C) Select the most appropriate alternative from those given below and rewrite the statements. (5)

(1) All indirect expenses are debited to ____________ account.

(a) Trading
(b) Capital
(c) Profit and Loss
(d) Current


(2) Share of profit of a deceased partner till the date of 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.


(3) If any asset is taken over by a partner from the firm, his capital account will be ______________

(a)  credited
(b) debited
(c) added
(d) none of these


(4) There are ____________ parties to the Bill of Exchange.

(a) two
(b) three
(c) four
(d) five


(5)  Further capital introduced during the year is _________ from closing capital in order to find out the correct profit.

(a) added
(b) deducted
(c) divided
(d) ignored


(D) State whether the following statements are True or False. (5)

(1) All receipts are the items of revenue income. [False]

(2) At the time of dissolution loan from partner will be transferred to realisation account. [False]

(3) A Bill of Exchange is a negotiable instrument. [True]

(4) Acceptance without making any change in the terms of bill is called general acceptance. [True]

(5) Ratio analysis is useful for inter - firm comparison. [True]



(E) Prepare a specimen of Bill of Exchange from the following information: (5)

Shri Arjun Patil, 104, Shivaji Nagar, Ambajogai draws a two months bill on Shri Tukaram Magdum,  Daulat Road, Halkarni, Kolhapur payable to Shri Ranveer Patil, Mondha, Parali Vaijanath on 23 rd August, 2013 for Rs. 7550. Shri Tukaram Magdum accepted it on 28th August, 2013 for Rs. 7500 only.

Answer:

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Q. 2. Mrs. Meena of Bilaspur has not kept proper books of accounts, following information is provided to you. (8)

Particulars
31.3.2012
31.3.2013

Amount (Rs. )
Amount (Rs.)
Machinery
50000
50000
Furniture
50000
30000
Debtors
18000
25000
Creditors
18000
20000
Stock
30000
42000
Outstanding Expenses
1500
-
Prepaid Expenses
-
500
Cash at bank
28000
40000

Further information:

(1) Mrs. Meena introduced additional capital as on 1st October, 2012 by selling her personal car is Rs. 10,000.

(2) She paid her daughter's college fees from business bank account Rs. 3,000.

(3) Depreciate machinery by 5% p.a.

(4) Provide 2% on debtors for Bad and Doubtful debts.

(5) Interest on capital is to be provided @ 5% p.a. and on drawings @ 5% p.a.

Prepare: Opening and closing statement of affairs and statement of profit or loss for the year ended 31st March, 2013.

Solution:

In the books of Mrs. Meena
Opening Statement of Affairs as on 31. 03. 2012

Liabilities
Amount (Rs)
Assets
Amount (Rs.)
Creditors
18, 000
Machinery
50, 000
Outstanding Expenses
1, 500
Furniture
50, 000
Capital (Balancing Figure)
1, 56, 500
Debtors
18, 000


Stock
30, 000


Cash at Bank
28, 000





1, 76, 000

1, 76, 000

Closing Statement of Affairs as on 31. 03. 2013
Liabilities
Amount (Rs.)
Assets
Amount (Rs.)
Creditors
20,000
Machinery
50, 000
Capital (Balancing Figure)
1, 67, 500
Furniture
30, 000


Debtors
25, 000


Stock
42, 000


Prepaid Expenses
500


Cash at Bank
40, 000





1, 87, 500

1, 87, 500

Statement of Profit or Loss or Mrs. Meena for the year ended 31. 03. 2013


Particulars
Amount (Rs.)
Amount (Rs.)
Capital at the end of the year.

1, 67, 500
Add: Drawings during the year

+  3000


1, 70, 500
Less: Capital at the beginning of the year

- 1, 56, 500


14, 000
Additional capital introduced

- 10, 000
Profit Before Adjustments

4000
Add: Income and Gains during the year.


Interest on Drawings (3000 x 5% x 6 months)

75
Profit before adjustments.

4075
Less: Expenses and Losses During the year.


Depreciation: On Machinery

50,000 x 5%

- 2500


1575
Interest on Capital:
On Opening Capital : 156500 x 5%
7825

On Additional Capital : 10000 x 5% x 6 months
250
- 8075


-6500
Reserve for Doubtful Debts
On debtors : 25, 000 x 2%

- 500
Net Loss for the year.

- 7000


(A) What are the components of 'Current Ratio'?

Ans. Meaning: Current ratio is a ratio showing the relationship between current assets and current liabilities.

Formula: Current ratio is calculated as per the following formula:

Current Ratio: Current Assets / Current Liabilities

Components of Current Ratio: The following are the components of Current Ratio.

Current Assets: Cash and Bank balances, debtors, bills receivable, stock of goods, prepaid expenses, short loans, advances given, incomes receivable, disposable investments etc.

Current Liabilities: Bank overdraft, creditors, bills payable, outstanding expenses, short term loan taken, provision for taxation, pre received income, proposed and unclaimed dividend etc.


(B) What are the different cash inflows and cash outflows of investing activities?

Ans. Meaning of Investing Activities: Investing activities are related to purchase and sale of fixed assets such as machinery, furniture, building, computer etc. It excludes operating and financing activities.

Example of cash inflow from investing activities:
Cash receipts from sale of fixed assets including intangible assets. Sale of shares and other investments. Interest and Dividend received on investments.

Example of cash outflow from investing activities:
Purchase of fixed assets. Cash payments for purchase of shares and other investments. Payment of brokerage, commission etc. for buying fixed assets and investments.

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Q. 3. Rani and Geeta are partners sharing profits and losses 3:2 respectively. Their position on 31st March, 2013 was as follows: [10]

Balance sheet as on 31st March, 2013.

Liabilities
Amount (Rs.)
Assets
Amount (Rs.)
Amount (Rs.)
Capital Accounts

Building

100000
Rani
100000
Furniture

10000
Geeta
75000
Stock

31000
Creditors
10000
Debtors
50000

Bills Payable
5000
Less: R.D.D.
-1000
49000
General Reserve
15000
Bank Balance

15000

205000


205000

On 1st April, 2013 hey admitted suvarna on the following terms:

(1) Suvarna should bring in cash Rs. 1,00,000 as capital for 1/5 th share in future profit and Rs. 25,000 as goodwill.

(2) Building should be revalued at Rs. 1,25,000.

(3) Depreciate furniture @ 12.5 % and stock @ 10% p.a.

(4) R.D.D. should be maintained as it is.

(5) The Capital Accounts of partners should be adjusted in their new profit sharing ratio through bank account.
Prepare: Profit and loss adjustment account, capital account and balance sheet of the new firm.
OR
Q3. The balance sheet of 'Anand Traders, Wardha' is as follows.
Partners share profits and losses as 5/10 , 2/10, 3/10.
Balance Sheet as on 31st March, 2013.
Liabilities
Amount
(Rs.)
Assets

Amount
(Rs.)
Capital Accounts

Plant and machinery

32,000
Sunil
36,000
Factory Building

40,000
Pankaj
32,000
Stock

20,400
Paresh
17,600
Debtors
   16,800

Creditors
21,200
Less: R.D.D.
  • 800
16,00
General Reserve
14,000
Cash

12,400

1,20,800


1,20,800
Pankaj retired from the business on 1st April, 2013 on the following terms:

(1) The assets were revalued as under .....

(i) Stock at Rs. 28,000.
(ii) Factory building is appreciated by 10%.
(iii) Reserve for doubtful debts is to be increased up to Rs. 1,000.
(iv) Plant and machinery is to be depreciated by 10%

(2) The goodwill of the retiring partner is to be valued at Rs. 8,000 and the remaining partners decided that goodwill be written back in their new profit sharing ratio which will be 5:3.

(3) Amount due to Pankaj is to be transferred to his loan account.

Prepare : (a) Profit and Loss adjustment account

(b) Capital account of partners.

(c) Balance sheet of new firm.

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Q4. Raja of Nagpur draws a bill on Pradhan of Bhandara for Rs. 6,000 at 3 months. Pradhan accepted and returned it to Raja. Raja then sent the bill to bank for collection.

On due date, Pradhan finds himself unable to make payment of the bill and requests Raja to renew it. Raja accepted a proposal on the condition that, Pradhan should pay Rs. 1,000 on account along with interest Rs. 250 in cash and should accept new bill for the balance at 2 months. These arrangements were carried through. Afterwards, one month before due date of new bill Pradhan retired his acceptance by paying Rs. 4,850.

Give Journal entries in the books of Raja of Nagpur.  [10]

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Q5. A, B, and C were partners sharing profits and losses in the proportion of 2:2:1. Following is their balance sheet as on 31st March, 2013.  [10]

Balance sheet as on 31st March, 2013



Liabilities
Amount
(Rs. )
Assets
Amount
(Rs.)
Amount
(Rs.)
Capital Account

Machinery

25000
A
30000
Stock

10000
B
10000
Debtors
      27500

C
10000
Less: R.D.D.
  • 1500
26000
General Reserve
3000
Investment

12000
Creditors
20000
Profit and Loss A/c

9000
A’s Loan Account
4000
Bank

2000
Bills Payable
7000




84000


84000

On the above date, the partners decided to dissolve the firm.

(1)  Assets were realised as -
Machinery Rs. 22,500, Stock Rs. 9,000, Investment Rs. 10,500, Debtors Rs. 22,500

(2) Dissolution expenses were Rs. 1,500.

(3) Goodwill of the firm realised Rs. 12,000

Pass the necessary journal entries int he books of the firm.

OR


Q5. Kisan Co. Ltd. Miraj, issued Rs. 50,000 shares at par Rs. 10 each, payable Rs. 3 on application, Rs. 4 on allotment and the balance on the final call. All the shares were fully subscribed and paid except a shareholder Mr. D. Kapse having Rs. 1,000 shares could not pay the final call. Mr. D. K. Kapse paid the call - in - arrears amount together with interest after four months of due date of final call. Company charged interest on the arrears received as per table ‘A’.

Pass journal entries to record these transactions assuming that call - in - arrears and interest money received from Mr. D. Kapse in the books of Kisan Co Ltd. Miraj.

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Q. 6. Marathi Vishwa Kosha Centre, Wai, has given you the following information from which, you are required to prepare. (i) Income and Expensiture Account for the year ending on 31.03.2013, (ii) Balance Sheet as on 31.03.2013.

Receipts and Payment Account for the year ending 31.03.2013


Receipts
Amount
(Rs.)
Payments
Amount
(Rs.)
To Balance b/d

By Stationery
5000
Cash in hand
13000
By Furniture
[Purchased on 01.01.2013]
50000
To Locker Rent
5000
By Investments
1,00,000
To Entrance Fees
19000
By Expenses of Drama
33500
To Sale of old newspapers
1500
By Postage and telegram
2,500
To Receipts from Drama
78,500
By Magazines and Newspapers
4000
To Legacies
1,10,000
By Salaries
22,000
To Miscellaneous Receipts
8000
By Balance c/d



Cash in Hand
3000


Cash at bank
1,10,000

330000

330000

Additional Information:

(1) Capital fund on 01.04.2012, was Rs. 1,08,000.
(2) Legacies are to be capitalized.
(3) Outstanding salary Rs. 3,000.
(4) 50% of entrance fees is to be capitalized.
(5) Depreciation on Furniture @ 10% p.a.

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Q7. From the following Trial Balance and adjustments of M/s Apeksha and Pratiksha; you are required to prepare Trading and 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
Debit
Amount (Rs.)
Credit
Amount (Rs.)
Capital Accounts


Apeksha

60000
Pratiksha

35000
Purchases and Sales
46700
85000
Sundry Debtors and Creditors
28000
25000
Bills Receivable and Bills Payable.
9600
7800
Opening Stock
18000

Wages
9900

Investment
13500

Postage and Telegrams
3600

Insurance
1200

Plant and machinery
40700

Furniture
18000

Cash in hand
2500

Carriage
3200

Bad debts
400

Prepaid rent
7000

Salaries
10500


212800
212800

Adjustments:

(1) The closing stock is valued at Rs. 31,000
(2) Outstanding wages Rs. 1,400.
(3) Depreciate furniture at 10% p.a.
(4) Insurance Rs. 500 is paid in advance.
(5) Provide for further bad debts of Rs. 1,500.
(6) Goods worth Rs. 2,000 withdrawn by Apeksha for her domestic use but not recorded in the books of account.

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