AS PER NEW SYLLABUS MARKS: 80 MARKS
Q1. Attempt any THREE of the following. (15 marks)
A. Answer in one sentence only: (5 MARKS)
(1) What is Partnership Deed?
Ans: A partnership deed is a written agreement duly stamped, signed and registered document containing the terms and conditions of the partnership.
(2) What is Bill of Exchange?
Ans. A bill of exchange is a negotiable instrument containing an unconditional order signed by the maker directing a certain person to pay a certain sum of money only to the bearer of the instrument.
(3) What do you mean by Scrap Value of an asset?
Ans: The net amount which is expected to be realised on the final disposal of a fixed asset is called ‘scrap value’.
(4) What are Noting Charges?
Ans: Noting charges are the fees charged by the Notary Public for noting the dishonour on the face of the bill and in his official register.
(5) What is Single Entry System?
Ans. It is an unscientific system of recording transactions where only one aspect of the transaction is recorded.
B. Write the word / Term / Phrase which can substitute each of the following statement:
1. A person who draws a bill of exchange. (Drawer)
2. Winding up of partnership business. (Dissolution of partnership firm)
3. The credit balance of Profit and Loss Account. (Net Profit)
4. An excess of assets over liabilities. (Capital)
5. The account which shows change in the values of assets. (Revaluation Account)
C. Select the most appropriate alternative from the given below and rewrite the statement: (5 MARKS)
1. There are ______ parties to a bill exchange. (Three)
a. Three b. Two c. Four d. Five
2. In case of dissolution assets and liabilities are transferred to ____ account. (Realisation)
a. Bank b. Partner's Capital c. Realisation d. Partner's Current.
3. When goodwill is withdrawn by old partners _________ Account is credited. (Cash or Bank)
a. Cash or bank b. Capital c. Revaluation d. Profit and Loss adjustment.
4. Generally incomplete records are maintained by ______ (Trader)
a. Trader b. Company c. Society d. Government
5. Excess of income over expenditure is termed as _____(Surplus)
a. Deficit, b. Profit c. Surplus d. Loss
D. State whether the following statements are True or False. (5 MARKS)
1. Single entry system is based on certain rules and regulations. (False)
2. Not for profit concern do not have profit motive. (True)
3. Bill of exchange is an instrument in writing, containing an unconditional order. (True)
4. A bill of exchange is signed by the person on whom it is drawn. (True)
5. Realisation loss is not transferred to insolvent partner's capital account. . (False)
E. Prepare bill of exchange from the following details. (5 marks)
Drawer - Shekhar Desai, Shastri Road, Mahad.
Drawee – Sharad Verma, Narayan Peth, Pune.
Amount - Rs. 3500/-
Period - 3 months.
Payee - Mukund Pande, Panvel
Date of Bill Drawn – 21st June, 2007
Date of Acceptance - 23rd June, 2007
Q2. Following is the records of Mr. Raj were kept on single entry system. ( March 2009 board exam questions)
Particulars
|
31.3.2006
|
31.3.2007
|
Stock
Furniture
Plant and machinery
Loan taken
Bank balance
Debtors
Creditors
|
15000
53500
42500
21000
1900
43000
18000
|
14000
44000
55500
21000
2100
35000
14900
|
Mr. Raj invested Rs. 4000 in the business. Also he had withdrawn Rs. 15000 for his private expenses from business. Rs. 500 to be provided for bad debts. Depreciate plant and machinery @5% and furniture @ 5%.
Prepare : (1) statement of affairs as on 31.3.2006. (2) statement of affairs as on 31.3.2007. (3) statement of profit and loss for the year ended on 31.3.2007.
In the books of Mr. Raj
Statement of affairs as on 31st March, 2006
Liabilities
|
Amount
|
Assets
|
Amount
|
Loan taken
Creditors
Capital at the beginning of the year
|
21000
18000
116900
|
Stock
Furniture
Plant and machinery
Bank balance
Debtors
|
15000
53500
42500
1900
43000
|
155900
|
155900
|
Statement of affairs as on 31st March, 2007
Liabilities
|
Amount
|
Assets
|
Amount
|
Loan taken
Creditors
Capital at the end of the year
|
21000
14900
114700
|
Stock
Furniture
Plant and machinery
Bank balance
Debtors
|
14000
44000
55500
2100
35000
|
150600
|
150600
|
Statement of profit or loss for the year ended 31st March, 2007
Particulars
|
Amount
|
Capital at the end of the year
|
114700
|
Add: Drawings
|
15000
|
Less: Additional capital introduced
|
129700
(4000)
|
Less: Capital at the beginning of the year
|
125700
(116900)
|
GROSS PROFIT
Less: Depreciation
On Machinery = (55000)(5/100)(12/12) = 2775
On Furniture = (44000)(5/100)(12/12) = 2200
|
8800
(4975)
|
LESS: BAD DEBTS
|
3825
(500)
|
NET PROFIT
|
3325
|
OR
Q2. A. State the Objectives of Analysis of Financial Statements.(4)
(B) What is Cash Flow Analysis? (4)
Q3. The Balance Sheet of Rajkumar and Rajendra kumar as on 31st March, 2012 is set out below, they share profits and losses in the ratio of 2:1.
Balance sheet as on 31st March, 2012
They agreed to admit Dhirajkumar on 1st April, 2012 as a partner into the firm on the following terms.
Solution:
1. Rajkumar’s Capital A/c......... Dr. 2000
Rajendrakumar’s Capital A/c Dr. 1000
To Proft and Loss A/c 3000
[Being debit balance of Profit and Loss Accopunt is transfered to
Partners Capital Account in old ratio]
2. General Reserve A/c ....... Dr. 60,000
To Rajkumar’s Capital A/c 40000
To Rajendrakumar’s Capital A/c 20000
[Being Credit Balance in General Reserve Account is transfered to
Old Partners Capital ACcount]
3. Cash / Bank A/c ......... Dr. 105000
To Dhirajkumar’s Capital A/c 60000
To Goodwill A/c 45000
[Being Capital and Goodwill brought in by new partner]
4.Goodwill A/c ....... Dr. 45000
To Rajkumar’s Capital A/c 30000
To Rajendrakumar’s Capital A/c 15000
[Being Goodwill is retained in the business]
5. General Reserve A/c ..... Dr. 60000
To R.D.D. A/c 60000
[Being R.D.D. is created by transferring fund from General Reserve A/c )
6. Revaluation A/c ..... Dr. 1500
To Furniture A/c 1500
[Being depreciation is charged on furniture]
7. Stock A/c .... Dr. 5000
Creditors A/c ..... Dr. 5000
` Rent receivable A/c .... Dr. 2000
To Revaluation A/c 12000
[Being Asset appreciated, Creditors written off and income receivable recorded.]
8. Revaluation A/c ..... Dr. 10500
To Rajkumar’s Capital A/c 7000
To Rajendrakumar’s Capital A/c 3500
[Being Profit on revaluation account is transferred to old partners capital A/c]
1. Working Note
Revaluation A/c
4. Anjali of Nagpur sold goods worth Rs. 25,000 to Rupali of Amaravati. On next day Ruapali paid Rs. 10,000 in cash and accepted two months bill for the balance drawn by Anjali. Anjali discounted the bill at 12% p.a. with her bank. Before due date, Rupali finds herself unable to make payment of the bill; and requests Anjali to renew it. Anjali accepts the proposal on the condition that Rupali should pay Rs. 5,000 in cash and accept new bill for one month along with interest Rs. 200 for the balance. These arrangements were carried through. The new bill was met on due date. Give journal entries in the books of Anjali.
Balance sheet as on 31st March, 2012
Liabilities | Amount Rs. | Assets | Amount Rs. |
Capital A/c Rajkumar Rajendrakumar General Reserve Creditors | 150000 120000 80000 | Buildings Furniture Stock Debtors Cash Profit and Loss A/c | 100000 30000 60000 300000 30000 30000 |
550000 | 550000 |
1. Dhirajkumar to bring Rs. 60000 as capital and Rs. 45000 as goodwill, which is to be retained in the business. He will be entitled to 1/4 th share of profit of the firm.
2. 50% of General Reserve is to remain as Reserve for doubtful debts.
3. Furniture is to be depreciated by 5%
4. Stock is to be revalued at Rs. 65,000.
5. Creditors of Rs. 5000 are not likely to claim and hence should be written of.
6. Rent of Rs. 2,000 due but not received has not been recorded in the books.
Pass necessary journal entries in the books of new firm and prepare Balance sheet of the new firm.Solution:
1. Rajkumar’s Capital A/c......... Dr. 2000
Rajendrakumar’s Capital A/c Dr. 1000
To Proft and Loss A/c 3000
[Being debit balance of Profit and Loss Accopunt is transfered to
Partners Capital Account in old ratio]
2. General Reserve A/c ....... Dr. 60,000
To Rajkumar’s Capital A/c 40000
To Rajendrakumar’s Capital A/c 20000
[Being Credit Balance in General Reserve Account is transfered to
Old Partners Capital ACcount]
3. Cash / Bank A/c ......... Dr. 105000
To Dhirajkumar’s Capital A/c 60000
To Goodwill A/c 45000
[Being Capital and Goodwill brought in by new partner]
4.Goodwill A/c ....... Dr. 45000
To Rajkumar’s Capital A/c 30000
To Rajendrakumar’s Capital A/c 15000
[Being Goodwill is retained in the business]
5. General Reserve A/c ..... Dr. 60000
To R.D.D. A/c 60000
[Being R.D.D. is created by transferring fund from General Reserve A/c )
6. Revaluation A/c ..... Dr. 1500
To Furniture A/c 1500
[Being depreciation is charged on furniture]
7. Stock A/c .... Dr. 5000
Creditors A/c ..... Dr. 5000
` Rent receivable A/c .... Dr. 2000
To Revaluation A/c 12000
[Being Asset appreciated, Creditors written off and income receivable recorded.]
8. Revaluation A/c ..... Dr. 10500
To Rajkumar’s Capital A/c 7000
To Rajendrakumar’s Capital A/c 3500
[Being Profit on revaluation account is transferred to old partners capital A/c]
1. Working Note
Revaluation A/c
Debit | Credit |
1500 | 12000 |
10500 | |
12000 | 12000 |
OR
Sanil, Nitish, Sapna were partners in a firm sharing profits and losses in the proportion of 1/2 , 1/3, 1/6 respectively. Their Balance Sheet as on 31st March, 2012 was as follows:
Balance Sheet as on 31 - 03 - 2012
Liabilities
|
Amount
|
Assets
|
Amount
|
Bills Payable
Capitals:
Sanil
Nitish
Sapna
|
30000
80000
50000
30000
|
Machinery
Furniture
Sundry Assets
Stock
Debtors
Bank
|
40000
5000
60000
30000
32000
23000
|
190000
|
190000
|
Sapna decided to retire on 1st April, 2012 on following terms:
1. Goodwill of the firm will be valued at Rs. 30,000.
2. Furniture war taken over by Sanil for Rs. 4,700.
3. Make a Provision for unpaid expenses Rs. 1,700.
4. Out of the amount due to Sapna Rs. 7,500 to be paid by cheque and the remaining amount to be transferred to her loan account.
Prepare Profit and Loss Adjustment Account, Partners’ Capital Accounts and Balance sheet of New firm on 1st April, 2012.
4. Anjali of Nagpur sold goods worth Rs. 25,000 to Rupali of Amaravati. On next day Ruapali paid Rs. 10,000 in cash and accepted two months bill for the balance drawn by Anjali. Anjali discounted the bill at 12% p.a. with her bank. Before due date, Rupali finds herself unable to make payment of the bill; and requests Anjali to renew it. Anjali accepts the proposal on the condition that Rupali should pay Rs. 5,000 in cash and accept new bill for one month along with interest Rs. 200 for the balance. These arrangements were carried through. The new bill was met on due date. Give journal entries in the books of Anjali.
Journal of Anjali
Date
|
Particulars
|
L
F
|
Debit
|
Credit
|
? 1
|
Rupali’s A/c………Dr.
To Sales A/c
(Being the goods are sold)
|
25000
|
25000
| |
2
|
Cash / bank a/c ………Dr
Bills Receivable A/c ……… Dr.
To Rupali’s A/c
(Being the part payment is made and bill is drawn)
|
10000
15000
|
25000
| |
3
|
Cash/ Bank A/c ……… Dr.
Discount A/c ………… Dr.
To Bills Receivable A/c
(being the bill is discounted)
|
14700
300
|
15000
| |
4
|
Rupali’s A/c ……… Dr
To Cash/Bank A/c
(being the bill is dishonored)
|
15000
|
15000
| |
5
|
Cash/ bank a/c………… Dr
To Rupali’s A/c
(being the part payment is made)
|
5000
|
5000
| |
6
|
Rupali’s A/c ……… Dr.
To Interest a/c
(being the interest is charged on balance amount)
|
200
|
200
| |
7
|
Bills Receivable A/c ………… Dr.
To Rupali’s A/c
(being the new bill is drawn along with interest)
|
10200
|
10200
| |
8
|
Cash/ bank a/c ……… Dr.
To Bills receivable a/c
(being the new bill is honored)
|
10200
|
10200
|
Q5. X and Y are equal partners.
The following is their Balance Sheet as on 31st March, 2012.
Liabilities
|
Rs.
|
Rs.
|
Assets
|
Rs.
|
Rs.
|
X’s Capital
Y’s Capital
Reserve Fund
X’s Loan
Creditors
|
40000
30000
8000
2000
15000
|
Building
Machinery
Furniture
Debtors
Less: R.D.D.
Stock
Investments
Commission Receivable
Bank
|
8800
- 800
|
30000
10000
12000
8000
20000
4000
1000
10000
| |
95000
|
95000
|
The firm was dissolved on 31st March, 2012
(i) The Assets realised as follows:
Stock Rs. 19,000, Debtors Rs. 7,500, Machinery Rs. 11,000, Building Rs. 14,000
ii. Y took over the investments Rs. 5000 and Furniture at Book Value.
iii. X agreed to accept Rs. 1500 in full settlement of his Loan Account.
iv. Dissolution expenses amounted to Rs. 2000.
v. Commission Receivable could not be recovered.
Prepare Realisation Account, X’s Loan Account, Capital Accounts and Bank Account.
Solution:
Realisation Account
Particulars
|
Rs.
|
Rs.
|
Particulars
|
Rs.
|
Rs
|
To Sundry Assets
|
By Sundry Liabilities
| ||||
Building
|
30000
|
Creditors
|
15000
| ||
Machinery
|
10000
|
By R.D.D. A/c
|
800
| ||
Furniture
|
12000
|
By Bank A/c
| |||
Debtors
|
8800
|
Stock
|
19000
| ||
Stock
|
20000
|
Debtors
|
7500
| ||
Investments
|
4000
|
Machinery
|
11000
| ||
Commission Receivable
|
1000
|
85800
|
Building
|
14000
|
51500
|
To Bank A/c
|
2000
|
BY Y’s Capital A/c
| |||
(Dissolution Expenses)
|
Investments
|
5000
| |||
To Bank A/c
|
Furniture
|
12000
|
17000
| ||
Creditors
|
15000
|
By X’s Loan A/c
|
500
| ||
By Loss on Realisation A/C
| |||||
X
|
9000
| ||||
Y
|
9000
|
18000
| |||
102800
|
102800
|
Partners Capital Account
Particulars
|
X
|
Y
|
Particulars
|
X
|
Y
|
To Realisation A/c
|
17000
|
By Balance b/d
|
40000
|
30000
| |
To Realisation A/c
(loss)
|
9000
|
9000
|
By Reserve Fund (1:1)
|
4000
|
4000
|
To Bank A/c
|
35000
|
8000
| |||
44000
|
34000
|
44000
|
34000
|
X’s Loan Account
Particulars
|
Rs.
|
Rs.
|
Particulars
|
Rs.
|
Rs
|
To Bank A/c
|
1500
|
By Balance b/d
|
2000
| ||
To Realisation A/c
|
500
| ||||
2000
|
2000
| ||||
Bank Account
Particulars
|
Rs.
|
Rs.
|
Particulars
|
Rs.
|
Rs
|
To Balance b/d
|
10000
|
By Realisation A/c
|
2000
| ||
To Realisation A/c
|
51500
|
By Realisation A/c
|
15000
| ||
By X’s Loan A/c
|
1500
| ||||
By X’s Capital A/c
|
35000
| ||||
By Y’s Capital A/c
|
8000
| ||||
61500
|
61500
|
Q6. From the following Receipt and Payment account of Patan Sports Association, Patan and the adjustments. You are required to prepare Income and Expenditure Account for the year ended 31st March, 2004 and a Balance sheet as on that date. (16)
Receipts and Payments Account for the year ended 31st March 2004.
Receipts
|
Amt. (Rs.)
|
Payments
|
Amt. (Rs.)
|
To Balance b/d
|
4,160
|
By Salaries
|
5,500
|
To Subscription:
|
By Entertainment Exp.
|
2,580
| |
2003-04 16,000
|
By Lighting
|
1,000
| |
2004-05 412
|
16,412
|
By General Expenses
|
1,536
|
To Donation
|
2,000
|
By Taxes
|
500
|
To Receipt from Entertainment
|
3,644
|
By Investments
|
12,000
|
To Interest on Investment
|
324
|
By Printing & Stationery
|
944
|
To Entrance Fees
|
4,500
|
By Expenses of 2002-03
|
2,400
|
To Price Fund
|
3,000
|
By Fixed Deposit
|
4,000
|
By Bank Balance
|
3,000
| ||
By Balance c/d
|
580
| ||
34,040
|
34,040
|
Adjustments:
(1) There are 450 members paying an annual subscription of Rs. 40 each.
(2) Salary outstanding on 31st March, 2004 was Rs. 1,000.
(3) Building stood in books Rs. 60,000 and furniture at Rs. 4,600 on 1st April, 2003. Write off depreciation on these assets @ 2% and 10% respectively.
(4) Interest on investment @ 5% has accrued for 3 months.
(5) The capital fund was Rs. 66,360 on 1st April, 2003.
(6) 60% of the entrance fee is to be capitalised.
Income & Expenditure A/c for the years ended 31-3-2004
Expenditure
|
Rs.
|
Rs.
|
Income
|
Rs.
|
Rs.
|
To Entertainment Exp.
To Salaries
Add: Outstanding
To Lighting
To General Expenses
To Taxes
To Printing & Stationery
To Depreciation
Building
Furniture
To Surplus
|
5,500
1,000
1,200
460
|
2,580
6,500
1,000
1,536
500
944
1,660
11198
|
By Donation
By Receipt from Entertainment
By Interest on Investment
Add: Interest
By Entrance Fees
Less: Capitalised
By Surplus
|
324
150
4,500
2,700
|
2,000
3,644
474
1,800
18,000
|
25,918
|
25,918
|
Balance Sheet as on 31-3-2004
Liabilities
|
Rs.
|
Rs.
|
Assets
|
Rs.
|
Rs.
|
Capital Fund
Add: Entrance Fees
Add: Surplus
Price Fund
Outstanding Salary
Subscription paid in advance
|
66,360
2,700
69,060
11198
|
80258
3000
1000
412
|
Building
Less: Depreciation
Furniture
Less: Depreciation
Investments
Add: Interest
Fixed Deposit
Bank Balance
Cash
Subscription receivable
|
60,000
1,200
4,600
460
12,000
150
|
58,800
4,140
12,150
4,000
3,000
580
2,000
|
84670
|
84670
|
Q7. Following is the Trial Balance of Kalavati and Lilavati as on 31st March, 2005 who share profits and losses in the ration of 3:2. Interest on capital was allowed @5% p.a.
Trial balance as on 31st March, 2005
Particulars
|
Amount
|
Particulars
|
Amount
|
Opening stock
Sundry debtors
Purchases
Wages
Salaries
Office expenses
Discount
Rent, rates and taxes
Plant and machinery
Return inwards
Land and buildings
Cash at bank
Current account :Kalavati
Lilavati
Government bonds
|
10000
14100
20000
4250
1350
1223
650
900
15000
1750
32000
4327
2100
600
3000
|
Return outwards
Sundry creditors
Sales
R.D.D.
Capital accounts : Kalavati
Lilavati
Loan @ 9% p.a. (taken on 1-10-2004)
Bills payable
|
1250
15800
35000
200
35000
10000
2000
12000
|
1,11,250
|
1,11,250
|
Additional information:
1. Closing stock was valued at Rs. 20,500.
2. Unpaid wages Rs. 750; outstanding salary Rs. 657.
3. Write off Rs. 100 as bad debts and provide R.D.D. at 5% on debtors.
4. Provide depreciation and plant and machinery at 10% p.a. and on Land and building at 5% p.a.
5. Rent, Rates & Taxes were prepaid Rs. 100.
6. Bills payable included a dishonoured bill of Rs. 3000.
Prepare Trading account and profit and loss account for the year ending 31st March, 2005 and a balance sheet as on that date. (October 2006 board exam questions.)
In the books of Kalavati & Lilavati
Trading account for the year ended 31st March, 2005.
Particulars
|
Amount
|
Amount
|
Particulars
|
Amount
|
Amount
|
To opening stock
To purchases
(-)return
To wages
(+) outstanding
To Gross profit c/d
|
20000
(1250)
4250
750
|
10000
18750
5000
20000
|
By sales
(-) return
By closing stock
|
35000
(1750)
|
33250
20500
|
53750
|
53750
|
Profit and loss account for the year ended 31st March, 2005
Particulars
|
Amount
|
Amount
|
Particulars
|
Amount
|
Amount
|
To Salaries
(+) outstanding
To Office expenses
To discount
To rent, rates & taxes
(-) prepaid
To Bad debts
(+) FBD
(+) NRDD
(-) ORDD
TO Depreciation
Plant & machinery
Land & buildings
To interest on loan
To interest on capital
Kalavati
Lilavati
To current a/c
Kalavati
Lilavati
|
1350
657
900
100
-----
100
700
200
1500
1600
1750
500
5568
3712
|
2007
1223
650
800
600
3100
90
2250
9280
|
By gross profit b/d
|
20000
| |
20000
|
20000
|
Partners’ current accounts
Particulars
|
Kalavati
|
Lilavati
|
Particulars
|
Kalavati
|
Lilavati
|
To balance b/d
To balance c/d
|
2100
5218
|
600
3612
|
By interest on capital
|
1750
5568
|
500
3712
|
7318
|
4212
|
7318
|
4212
|
Balance sheet as on 31st March, 2005
Liabilities
|
Rs.
|
Rs.
|
Assets
|
Rs.
|
Rs.
|
Capital account
Kalavati
Lilavati
Current account
Kalavati
Lilavati
Sundry creditors
(+) bills payable dishonoured
Bills payable
(-) bills payable dishonoured
Outstanding
Salaries
Wages
Load @ 9%
(+) interest
|
35000
10000
5218
3612
15800
3000
12000
3000
657
750
2000
90
|
45000
8830
18800
9000
1407
2090
|
Land & building
(-) depreciation@5%
Plan & Machinery
(-) depreciation @10%
Sundry debtors
(-) F.B.D.
(-) N.R.D.D.
Closing stock
Prepaid rent, rates, & tax
Cash at bank
Government bonds |
32000
1600
15000
1500
14100
100
14000
700
|
30400
13500
13300
20500
100
4327
3000 |
85127
|
85127
|
TRY THESE QUESTION PAPER AS PER NEW SYLLABUS AND PAPER PATTERN
OBJECTIVE QUESTIONS
FORMAT OF FINAL ACCOUNT
FINAL ACCOUNT
NPO
SINGLE ENTRY
BILL OF EXCHANGE WITH SOLUTION
ADMISSION OF A PARTNER
VALUATION OF GOODWILL WITH SOLUTION