CS Foundation :: Financial Accounting : December 2004

There are 450 members in a club each paying an annual subscription of Rs.500. Rs.5,000 were in arrears as on 31st March, 2003. Subscription received during the year ended 31st March, 2004 were Rs.2,23,000 including Rs.4,500 for 2002-03 and Rs.7,500 for the year 2004-05. Calculate the amount of subscription in arrears as on 31st Mach, 2004 by preparing subscription account.

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Prepare trading and profit and loss account for the year ended 31st March, 2004 and balance sheet as on that date.

Bose purchased raw materials during the month of March, 2004 as stated below :

March 2 March 8 March 11 March 19 March 23 March 30

….. ….. ….. ….. ….. …..

1,600 units @ Rs.60 per unit. 2,400 units @ Rs.55 per unit. 5,000 units @ Rs.57 per unit. 6,000 units @ Rs.54 per unit. 3,000 units @ Rs.58 per unit. 2,000 units @ Rs.63 per unit.

While preparing the final accounts on 31st March, 2004, Bose had 2,600 units of raw materials in his godown

You are required to calculate the value of closing stock of raw materials according to —

(i) (ii)

First-in-first-out method; and Weighted average price method.

A trader does not keep proper books of account. However, he provides the following information to you :

	On 31 March, 2003 (Rs.)	On 31 March, 2004 (Rs.)
Cash at bank Cash in hand Stock in trade Debtor Equipment Creditor Furniture	4,500 300 40,000 12,000 5,000 30,000 4,000	4,000 3,000 45,000 20,000 5,000 20,000 4,000

During the year ended 31st March, 2004, the trader introduced Rs.6,000, as additional capital and withdrew Rs.4,000 for his personal use. Depreciation is to be provided on furniture at 10% per annum and on equipment at 5% per annum.
Prepare a statement showing profit or loss made by him for the year ended 31st March, 2004.

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Delhi Trading Company opened a branch at Ghaziabad on 1st April, 2003. The goods were sent by the head office to the branch at cost plus 25%. The following are the particulars of the transactions relating to the branch for the accounting year ended 31st March, 2004 :

		Rs.
Goods sent to branch at invoice price		3,51,000
Sales:     Cash     Credit	Rs. 1,25,000 Rs. 1,75,000	3, 00,000
Cash collected from branch debtors		1,56,000
discount allowed to branch debtors		4,000
Cash sent to branch for:     Wages     Freight     Other expenses	Rs. 3,000 Rs. 11,000 Rs. 6, 000	20, 000
Spoiled goods written off at invoice price		500
Stock on 31st March, 2004 at invoice price		55,500

Prepare branch account showing profit earned or loss incurred during the year ended 31st March, 2004. Also show memorandum branch debtors to ascertain closing balance of branch debtors.

Nice Roadways purchased from Harish Motors 3 tempos costing Rs.1,00,000 each on hire purchase basis on 1st April, 2002. 20% of the cost was to be paid down and balance in three equal annual instalments together with interest @ 9% at the end of each year. Nice Roadways paid the instalment due on 31st March, 2003, but could not pay instalments thereafter. Harish Motors agreed to leave one tempo with the purchaser on 31st March, 2004, adjusting the value of the other two tempos against the amount due on that date. The tempos recovered were valued on the basis of 30% depreciation annually. Nice Roadways charges depreciation on tempos @ 20% on diminishing balances method.

Harish Motors incurred Rs.10,000 on repairs of tempos repossessed and resold them at a profit of 5% on total cost.

Prepare the important ledger accounts in the books of both parties giving effect to the above-mentioned transactions.

P, Q and R are partners sharing profits in the ratio of 5:3:2 respectively. On 31st March, 2004, their balance sheet was as follows :

Liabilities	Rs.	Assets	Rs.
Creditors General reserve P’s capital Q’s capital R’s capital	23,000 10,000 20,000 16,000 3,000	Cash Debtors Stock Patent	2,000 38,000 26,000 6,000
	72,000		72,000

Stock Rs.16,000; patent Rs.1,900; and debtors Rs.22,000. The creditors were paid less discount amounting to Rs.2,100. The expenses of dissolution were Rs.2,000. R became insolvent and only Rs.120 were recovered from him.
Prepare ledger accounts following the Garner vs. Murray Rule.

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1,000 Bicycles were consigned by Sen & Co. of Kolkata to Tilak Ratna of Sri Lanka at an invoice cost of Rs.950 each. Sen & Co. paid freight Rs.65,000 and insurance Rs.11,500. During the voyage 100 bicycles were totally damaged by fire and had to be thrown overboard. Tilak Ratna took delivery of the remaining bicycles and paid Rs.86,400 for customs duty. Tilak Ratna sent a bank draft to Sen & Co. for Rs.3,20,000 as advance payment and later sent an account sales showing that 800 bicycles had been sold at Rs.1,400 each. Amount spent by Tilak Ratna on godown rent and advertisement totalled Rs.12,500. The consignee is entitled to a commission of 5%. Prepare the consignment account, on account of Tilak Ratna and abnormal loss account in the books of Sen & Co., assuming that nothing was recovered from the insurers due to a defect in the policy.

On 1st April, 2001, Zora Ltd. purchased machines for Rs.1,20,000 and on 30th September, 2002 it acquired additional machines at a cost of Rs.20,000. On 30th June, 2003, one of the original machines which cost Rs.5,000 was found to have become obsolete and was sold as a scrap for Rs.500. It was replaced on the same date by a new machine costing Rs.8,000. Depreciation is to be provided @ 15% per annum on the basis of diminishing balance method. Show machinery account for the first three years. The company closes its books on 31st March every year.