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:
| Particulars | Debit
(₹) |
Particulars | Credit
(₹) |
| 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
| Particulars | ₹ | Particulars | ₹ |
| 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:
| Expenditure | ₹ | Income | ₹ |
| 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
|
| 9,500 | 9,500 |
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.
