ACCOUNTS CA FOUNDATION

National Management College –Perundurai

CA Foundation Accounts – test no.2-20/09/2023

Time Allowed: 1.5 Maximum Marks: 50

Question No.1

State with reasons, whether the following statements are true or false: 3*2 = 6 Marks

(i) Adjustment entry in respect of income received in advance is debit income received in advance account and credit income account.

(ii) A loss is an expenditure which does not bring any benefits to the concern

(iii) Tournament expenses incurred are more than the Tournament fund, then the excess to be shown as an asset in the closing Balance sheet.

Question No.2

On 31st March,2021 the Trial Balance of Mr. Black was as follows:

ParticularsDebit

(₹)

ParticularsCredit

(₹)

Stock on 1/4/2020

Raw Materials

Work-in-Progress

Finished Goods

Sunday Debtors

Carriages on Purchase

Bills Receivables

Wages

Salaries

Telephone and Postage

Repairs to office furniture

Cash at Bank

Office Furniture

Repairs to Plant

Purchases

Plan and Machinery

Rent

Lighting

General Expenses

 

 

 

2,10,000

95,000

1,55,000

2,40,000

15,000

1,50,000

1,30,000

1,00,000

10,000

3,500

1,70,000

1,00,000

11,000

8,50,000

7,00,000

60,000

13,500

15,000

Sunday Creditors

Bills Payable

Sale of scrap

Commission received

Provision for doubtful debts

Capital account

Sales

Bank overdraft

 

 

 

 

 

 

 

 

 

 

 

 

 

1,50,000

75,000

25,000

4,500

16,500

10,00,000

16,72,000

85,000

 

 

 

 

 

 

 

 

 

 

 

 

30,28,000

 

30,28,000

 

The following additional information is available:                                                                                                                        Stock on 31st March, 2021 were:

Raw material

Finished goods

Work-in-progress

₹ 1,62,000

₹ 1,81,000

₹ 78,000

 

Salaries and wages unpaid for the year ended 31st March, 2021 were respectively. ₹ 9,000  and 20,000. Machinery is to be depreciated by 10% and office furniture by 71/2%. A provision for doubtful debts is to be maintained @1% of sales. Rent is to be charged as to ¾ to factory and ¼ to office. Lighting is to be charged as to 2/3 to factory and 1/3 to office.

Prepare the Manufacturing Account. Trading Account and Profit and Loss Account for the year ended on 31st March, 2021. (15 Marks)

Question No.3

(a) 6 Marks

Delta Ltd. forfeited 600 shares of ₹ 10 each issued at a premium of 10% to W for non-payment of first and final call money of ₹ 3 (including ₹ 1 premium). At different intervals of time out of these 400 shares were re-issued to Z, credited as fully paid for ₹ 9 per share and 100 shares were-re issued to X as ₹ 10 paid up for ₹ 11 per share. Record the journal entries for forfeiture and reissue of shares.

(b) 9 Marks

On 1st April 2020, XY Ltd. took over assets of ₹ 4,50,000 and liabilities of 60,000 of Himalayan Ltd. for the purchase consideration of ₹ 4,40,000. It paid the purchase consideration by issuing 8% debenture of ₹ 100 each at 10% premium on same date.

XY Ltd. issued another 3000, 8% debenture of ₹ 100 at discount of 10% redeemable  at premium of 5% after 5 years. According to the terms of the issue ₹ 30 is payable on application and the balance on the balance on the allotment on debentures. It has been decided to write off the entire loss on issue of discount in the current year itself.

You are required to pass the journal entries in the books of XY Ltd. for the financial year 2020-21

Question.No.4 5 Marks

Mr. Birla is a proprietor engaged in business of trading electronics. An excerpt from his Trading & P&L account is as follows:

 

 

Trading and P&L A/c for the year ended 31st March,2020

ParticularsParticulars
To Cost of goods sold

To Gross Profit c/d

 

To Rent A/c

To Office Expenses

To Selling Expenses

To Commission to Manager (On Net Profit before charging such commission)

To Net Profit

45,00,000

D

F

26,00,000

13,00,000

B

2,00,000

 

 

A

G

By Sales

 

 

By Gross Profit b/d

By Miscellaneous Income

 

 

 

 

 

 

C

 

F

D

E

 

 

 

 

 

60,00,000

 

Commission is charged at the rate of 10%.                                                                                                                                          Selling Expenses amount to 1% of total sales.

Question.No.5 9 Marks

The Income and Expenditure Account of the Youth Club for the year 2020 is as follows:

ExpenditureIncome
To          Salaries

To          General Expenses

To          Audit Fee

To          Secretary’s Honorarium

To          Stationery & Printing

To          Annual Dinner Expenses

To          Interest & Bank Charges

To          Depreciation

To          Surplus

 

 4,750

500

250

1,000

450

1,500

150

300

600

 

By          Subscription

By          Entrance fees

By          Contribution for annual dinner

By          Annual Sport meet receipt

 

 

 

 

 

 

7,500

250

1,000

750

 

 

 

 

 

 

9,5009,500

 

This account had been prepared after the following adjustments:

Subscription outstanding at the end of 2019

Subscription received in Advance on 31st December, 2019

Subscription received in advance on 31st December , 2019

Subscription outstanding on 31st December, 2020

600

450

270

750

 

Salaries Outstanding at the beginning and the end of 2020 were respectively ₹ 450. General Expenses include insurance prepaid to the extent of ₹ 60. Audit fee for 2020 is as yet unpaid. During 2020 audit fee for 2019 was paid amounting to ₹ 200.

The Club owned a freehold lease of ground valued at ₹ 10,000. The club had sports equipment on 1 st January, 2020 valued at ₹ 2,600. At the end of the year, after depreciation, this equipment amounted to ₹ 2,700. In 2019, the Club has raised a bank loan of ₹ 2,000. This was outstanding throughout 2020. On 31 st December, 2020 cash in hand amounted to ₹ 1,600.

Required : Prepare Receipts and Payments Account.

 

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