ACCOUNTS PAPER ONE

MODEL QUESTION PAPERR NO. I

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

A. Answer in one sentence only:

1. What is Balance Sheet?

2. What is Bad Debts?

3. What is Bill of Exchange?

4. What is Single Entry System?

5. When is Realisation account is opened?

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).

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:

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 When goodwill is withdrawn by old partners _________ Account is credited.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.

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 a bill of exchange from the following details.

Drawer                              :         Soundariya, Neelam Bhawan, Kalyan    

      Drawee                             :         Sugandi, Dastur Nagar, Amaravati

      Payee                     :         Umesh , Deogad

      Period                     :         90 days

     Amount                    :         Rs. 7,555

     Date of bill               :         15^th March 1995

     Accepted on            :         20^th March 1995

Q2.  Following records of Mr. Raj were kept on single entry system. (March 2009) [Ans]  [8 MARKS]

Capital At the Beginning 116900

Capital At the End 114700

Trading Profit 8800

Net Profit 3325

Particular	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. 15,000 for his private expenses from business.

Rs. 500 to be provided for bad debts.

Depreciate plant and machinery @ 5% and furniture @5%

Prepare:

i.             Statement of Affairs as on 31.3.2006.

ii.            Statement of Affairs as on 31.3.2007.

iii.           Statement of Profit and Loss for the year ended on 31.3.2007.

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.

 [Ans. Profit and loss Adjustment A/c (Profit ) 10500, Tally = 570500]

Balance sheet as on 31st March, 2012 [10 MARKS]

Liabilities	Amount Rs.	Assets	Amount Rs.
Capital A/c Rajkumar Rajendrakumar General Reserve Creditors	200000 150000 120000 80000	Buildings Furniture Stock Debtors Cash Profit and Loss A/c	100000 30000 60000 300000 30000 30000
	550000		550000

They agreed to admit Dhirajkumar on 1st April, 2012 as a partner into the firm on the following terms.

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.

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: [Ans. P/L Adj. Loss 2000, Sapna's loan a.c 27167, Tally = 212200]

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.

Q4. Minal draws a bill on Usha for Rs. 5,000 at 3 months. Usha accepts the bill and return to Minal. Minal discounted the bill @ 12 % p.a. with the bank. On Maturity Usha finds herself unable to make payment of the bill and requested Minal to renew the bill. Minal accepts the proposal on the condition that Usha should Pay Rs. 2,000 in cash and accept a new bill at one month along with interest at 10% p.a. These arrangements were carried through. Usha retires the bill by paying Rs. 3015/- Pass Journal Entries in the books of Minal.  [10 MARKS]

Q5. X and Y are equal partners. The following is their Balance Sheet as on 31st March, 2012. [10 MARKS]

[Ans. Realisation A/c Loss :18,000, Amount paid to X = 35000 Y = 8000 bank A/c Total = 61500]

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.

OR

ABC Industries Co. Ltd issued 15000 equity shares of Rs. 100 each. Payable as follows:

On Application : Rs. 20, On Allotment : Rs. 30. On First Call : Rs. 25. On Second call :Rs: 25

The company received application for 12000 shares. All the applications were accepted and shares were allotted. The company made both calls.

One shareholding holding 400 shares failed to pay the final call. His shares were forfeited.

Pass journal entries in the books of ABC industries Co. Ltd.

Q6. Dr. Narendra commenced practice in the month of April 2007. He prepared the following Receipts & Payments Account for the year ended 31^st March, 2008. [12 MARKS]

Ans.

Surplus : 3895

Balance sheet Total 9300

Receipts and Payments A/c For the year ended 31^st March, 2008

Receipts	Amount	Payments	Amount
To Cash To Visits To Sundry Receipts	10000 7000 400	By Furniture By Equipment By Drugs By Salaries By Rent By conveyance By Stationery By Lighting By periodicals By Drawings By Balance c/d	1500 2500 2000 1000 500 700 100 125 100 4375 4500
	17400		17400

1. Rs 200 were to be received on account of visits.
2. Unpaid Salaries Rs. 200
3. 60% of conveyance is for private purposes.
4. Value of drugs on hand was estimated at Rs. 1,000.
5. Depreciate furniture and equipment by 10%
Prepare Income and Expenditure account and balance sheet.

Q7. From the following Trial Balance of M/s Sonia and Sufi, you are required to prepare Trading Profit and Loss Account for the year ended 31^st December, 2004 and the Balance sheet as on that date. [15 MARKS]

Ans.

GROSS PROFIT 34200

GROSS LOSS 20700

PARTNER CAPITAL ACOUNT BALANCE 155200-129650

TALLY 487350

Trial Balance as on 31.12.2004

Particulars	Debit (Rs.)	Credit (Rs.)
Sonia’s Capital Sufi’s capital Sonia’s Drawing Sufi’s Drawing Stock on 1 – 1 – 2004 Bills Receivable Purchases Sales Bills Payable Return In ward Return Outward Plant and Machinery Loose Tools Patents Sundry Debtors Sundry Creditors Cash at Bank Wages Salaries Rent and Taxes Insurance Printing and Stationery Power and Fuel	14, 450 10, 000 2, 00, 000 25, 000 2, 75, 000 5, 000 1, 00, 000 25, 000 25, 000 1, 25, 000 77, 550 19, 000 17, 500 7, 500 3, 000 2, 000 3, 500	1, 80, 000 1, 50, 000 4, 00, 000 60, 000 4, 500 1, 40, 000
	9, 34, 500	9, 34, 500

Adjustments:

1.   Stock as on 31^st December, 1978 Rs. 1, 30,000 and its market value were Rs. 1, 40,000.

2.   Write off Rs. 1000 for bad & Provide for Bad and Doubtful debts at 5% on Sundry Debtors.

3.   Goods worth Rs. 1000 were distributed as free samples.

4.   Prepaid Insurance Rs. 750.

5.   Depreciate Plant and Machinery by 10% p.a. and Patent by 15% p.a.

6.   Outstanding Salaries Rs. 2,500  

7.   Uninsured goods worth Rs 1200 were lost by fire.