| 1. | Explain any four of the following : | 5each | |
| | (i) | Convention of consistency | | (0) |
| | (ii) | Account current | | (0) |
| | (iii) | Imprest system of petty cash | | (0) |
| | (iv) | Contra entries in columnar cash book | | (0) |
| | (v) | Accounting cycle | | (0) |
| | (vi) | Bank reconciliation statement. | | (0) |
| 2. | (a) | Distinguish between any two of the following : | 4each | |
| | | (i) | ‘Fixed installment method’ and ‘diminishing balance method’. | | (0) |
| | | (ii) | ‘Periodic inventory’ and ‘perpetual inventory’. | | (0) |
| | | (iii) | ‘Hire–purchase system’ and ‘installment system’. | | (0) |
| | (b) | State, with reasons, whether the following statements are correct or incorrect. Attempt any two : | 4each | |
| | | (i) | The business entity concept does not apply to a sole proprietorship concern. | | (0) |
| | | (ii) | Every error affects the agreement of trial balance. | | (0) |
| | | (iii) | Accounting standards and accounting principles are one and the same thing. | | (0) |
| 3. | (a) | How are profits determined under the single entry system ? Explain with the help of an illustration. | 8 | (0) |
| | (b) | What are ‘adjustment entries’ ? Why are they necessary for preparing final accounts ? | 8 | (0) |
| 4. | On the basis of following information, prepare the income and expenditure account of Modern College for the year ended 31st March, 2006 and the balance sheet as on that date :
To Cash on 1.4.2005
To tution fees
To Fines
To Grants from Govt.
To Interest on securities
To Rebt from use of Hall | 2,000
5,960
40
3,000
30
100 | By Pay and allowances
By PF contribution
By Printing and stationery
By Library books
By postage and telegrams
by Newspapers, etc.
By Seince equipments
(capital expenditure)
By Laboratory expenses
By construction of new building
By Repairs and maintenance
By Audit fee
By General charges
By cash on 31.3.2006 | 7050
554
70
460
50
30
48
50
470
60
30
58
2,200 | | 11,130 | | 11,130 |
The following were the assets of Modern College as on 31st March, 2005:
Furniture : Rs.3,500
Land and buildings : Rs.16,000
Library books : Rs.2,400
Investments : Rs.1,000
Outstanding tuition fees : Rs.220
Provide for depreciation on fixed assets on the closing balances at the following rates :
Land and buildings @ 5%;
Furniture @ 15%; and
Library books @ 20%. | 16 | (0) |
|
| 5. | X, Y and Z were sharing profits in the ratio of 3:1:1 respectively. They decided to dissolve their firm on 31st March, 2006 when their position was as follows :
| Liabilities | | Rs. | Assets | | Rs. | Capitals :
X
Y
Z
Loan
Sundry creditors |
82,500
30,000
21,000 |
1,33,500
4,500
18,000 | Machinery
Furniture
Stock
Debtors
Less: Provosion for bad debts
Cash in hand |
72,600
3,600 | 51,000
3,000
23,400
69,000
9,600 | | 1,56,000 | | 1,56,000 |
| (i) | X agreed to takeover furniture at Rs.2,400, debtors amounting to Rs.60,000 at Rs.51,600 and also the creditors at their book value. | | (ii) | Y agreed to takeover stock at Rs.21,000 and a part of the machinery at Rs.21,600 (being book value less 10%). | | (iii) | Z agreed to takeover the remaining machinery at 90% of the book value less Rs.300 as allowance. He also assumed the responsibility for the payment of loan together with accrued interest Rs.90 (not recorded in the books). | | (iv) | Dissolution expenses amounted to Rs.810. | | (v) | The remaining debtors were sold to a debt-collecting agency at 50% of book value. Prepare the important ledger accounts to close the books of account. |
| 16 | (0) |
| 6. | (a) | On 28th February, 2006, in Volatile Ltd., the entire stock except stock costing Rs.62,000 was destroyed due to fire. Determine the amount of loss on the basis of following information :
| Rs. | | Stock on 1st April, 2004 | 1,80,000 | | Purchases during the year ended 31st March, 2005 | 7,00,000 | | Sales during the year ended 31st March, 2005 | 10,00,000 | | Stock on 31st March, 2005 | 1,12,500 | | Purchases during 2005-06 (till the date of fire) | 7,30,000 | | Sales during 2005-06 (till the date of fire) | 8,00,000 | | In the company, the stock is valued at 10% below the cost. |
| 8 | (0) |
| | (b) | Shyam Traders of Delhi, a firm of traders, has a branch at Hyderabad. In order to maintain strict control over stock, it invoices goods to the branch at the selling price including profit of 25% on selling price.
From the following particulars, prepare the branch stock account, branch debtors account, branch adjustment account and branch profit and loss account: | Rs. | | Branch stock on 1st April, 2005 (at invoice price) | 3,00,000 | | Branch debtors on 1st April 2005 | 2,28,000 | Goods invoiced to branch at invoice price during
the year 2005-06 |
13,40,000 | | Sales at branch during the year : | | Cash | 6,20,000 | | Credit | 7,48,000 | | Cash received from branch debtors | 8,00,000 | | Bad debts written off | 5,000 | | Discount allowed to branch customers | 6,000 | | Cash expenses at the branch | 1,34,000 | | Branch stock on 31st March, 2006 (at invoice price) | 2,68,000 |
| 8 | (0) |
| 7. | On 1st November, 2005, Anand drew a bill on Bikram for Rs.10,000 at four months for mutual accommodation. On th November, 2005, after receiving Bikram’s acceptance, Anand discounted the bill with the bank @ 8% per annum and remitted half of the proceeds to Bikram. On st December, 2005, Bikram drew a bill on Anand for Rs.15,000 at three months and after obtaining Anand’s acceptance he got it discounted @10% per annum and remitted one–third of the proceeds to Anand. On 28th February, 2006, Bikram became insolvent and only 50% of the amount due was received from his estate. Pass journal entries in the books of Anand and prepare the bills receivable account, bills payable account and the account of Bikram in Anand’s ledger. | 16 | (0) |
| 8. | Punjab Cycle Co. of Ludhiana consigned 150 bicycles to Kanpur Cycle Co. of Kanpur costing Rs.2,250 each, invoiced at Rs.3,000 each. The consignor paid freight Rs.15,000 and insurance in transit Rs.2,250. During transit, 15 bicycles were totally damageed. Kanpur Cycle Co. took delivery of the remaining bicycles and paid Rs.2,295 for octroi duty. Kanpur Cycle Co. sent a bank draft to Punjab Cycle Co. for Rs.75,000 as advance and later on sent an account sales showing that 120 bicycles had been sold @ Rs.3,300 each. Expenses incurred by Kanpur Cycle Co. on godown rent were Rs.3,000. Kanpur Cycle Co. is entitled to a commission of 5% on invoice price and 25% on any surplus of sale price over invoice price. Insurance claim was settled at Rs.21,000. Prepare the consignment account, consignee’s account and accidental loss account in the books of the consignor. | 16 | (0) |
