REVISION TEST PAPER – 2
INTERMEDIATE (NEW) : GROUP – I PAPER – 1: ACCOUNTING
Question No. 1 is compulsory.
Answer any four questions from the remaining five questions.
Wherever necessary suitable assumptions may be made and disclosed by way of a note.
Working Notes should form part of the answer.
(Time allowed: Three hours) (Maximum Marks: 100)
- Anil, a trader keeps his books of account under single entry system. On 31st March, 20X1 his statement of affairs stood as follows :
| Liabilities | Rs | Assets | Rs |
| Trade Creditors | 5,80,000 | Furniture, Fixtures and Fittings | 1,00,000 |
| Bills Payable
Outstanding Expenses |
1,25,000
45,000 |
Stock
Trade Debtors |
6,10,000
1,48,000 |
| Capital Account | 2,50,000 | Bills Receivable | 60,000 |
| Unexpired Insurance | 2,000 | ||
| Cash in Hand and at Bank | 80,000 | ||
| 10,00,000 | 10,00,000 |
The following was the summary of Cash–book for the year ended 31st March, 20X2:
| Receipts | Rs | Payments | Rs |
| Cash in Hand and at |
80,000 |
Payment to Trade | 75,07,000 |
| Bankon | s | ||
| Creditors | |||
| 1st April, 20X1 | Payments for Bills payable | 8,15,000 | |
| Cash Sales | 73,80,000 | Sundry Expenses paid | 6,20,700 |
| Receipt from Trade | 15,10,000 | Drawings | 2,40,000 |
| s | |||
| Debtors | |||
| Receipts for Bills Receivable | 3,40,000 | Cash in Hand and at Bank |
1,27,300 |
| on 31st March, 20X2 | |||
| 93,10,000 | 93,10,000 |
Discount allowed to trade debtors and received from trade creditors amounted to
Rs 36,000 and Rs 28,000 respectively. Bills endorsed amounted to Rs 15,000. Annual Fire
Insurance premium of Rs 6,000 was paid every year on 1st August for the renewalof the policy. Furniture, fixtures and fittings were subject to depreciation @ 15%per annum on diminishing balance method.
You are also informed about the following balances as on 31st March, 20 X2:
| Rs | |
| Stock | 6,50,000 |
| Trade Debtors | 1,52,000 |
| Bills Receivable | 75,000 |
| Bills Payable | 1,40,000 |
| Outstanding Expenses | 5,000 |
The trader maintains a steady gross profit ratio of 10% on sales.
Prepare Trading and Profit and Loss Account for the year ended 31st March, 20X2and Balance Sheet as at that date.
- XTransport purchased from Delhi Motors 3 Tempos costing Rs 50,000 each on the hire purchase system on 1-1-20X1. Payment was to be made Rs 30,000 down and the remainder in 3 equal annual instalments payable on 31-12-20X1, 31-12-20X2 and 31-12-20X3 together with interest @ 9%. X Transport Ltd. write off depreciation at the rate of 20% on the diminishing balance. It paid the instalment due at the end of the first year i.e. 31-12-20X1 but could not pay the next on 31-12-20X2. Delhi Motors agreed to leave one Tempo with the purchaser on 1-1-20X3 adjusting the value ofthe other 2 Tempos against the amount due on 31-12-20X2 (date of repossession).The Tempos were valued based on 30% depreciation annually. Show the necessary accounts in the books of X Transport Ltd. for the years 20X1, 20X2 and 20X3.
- On1st January 20X1, Singh had 20,000 equity shares in X Nominal value of the shares was Rs10 each but their book value was Rs 16 per share. On 1st June 20X1, Singh purchased 5,000 more equity shares in the company at a premium of Rs 4 per share.
On 30th June, 20X1, the directors of X Ltd. announced a bonus and rights issue. Bonus was declared at the rate of one equity share for every five shares held and these shares were received on 2nd August, 20X1.
The terms of the rights issue were:
- Rightsshares to be issued to the existing holders on 10th August,
- Rightsissue would entitle the holders to subscribe to additional equity shares in the Company at the rate of one share per every three held at Rs 15 per share-the whole sum being payable by 30th September,
(C)Existing shareholders were entitled to transfer their rights to outsiders, eitherwholly or in part.
(D)Singh exercised his option under the issue for 50% of his entitlements and thebalance of rights he sold to Ananth for a consideration of Rs 1.50 per share.
(E)Dividends for the year ended 31st March, 20X1, at the rate of 15% were declaredby the Company and received by Singh on 20th October, 20X1.
(F) On 1st November, 20X1, Singh sold 20,000 equity shares at a premium of
Rs 3 pershare.
The market price of share on 31-12-20X1 was Rs 14. Show the Investment Account as it
would appear in Singh’s books on 31-12-20X1 and the value of shares held on that date.
- Afire occurred on 1st February, 20X2, in the premises of Pioneer , a retail store and business was partially disorganized upto 30th June, 20X2. The company was insured under a loss of profits for Rs 1,25,000 with a six months period indemnity.
From the following information, compute the amount of claim under the loss of
| profit policy assuming entire sales during interrupted period was due
additional expenses. |
to | |
|
Actual turnover from 1st February to 30th June, 20X2 |
Rs
80,000 |
|
| Turnover from 1st February to 30th June, 20X1 | 2,00,000 | |
| Turnover from 1st February, 20X1 to 31st January, 20X2 | 4,50,000 | |
| Net Profit for last financial year | 70,000 | |
| Insured standing charges for last financial year | 56,000 |
Total standing charges for last financial year 64,000
Turnover for the last financial year 4,20,000 The company incurred additional expenses amounting to Rs 6,700 which reduced the loss in turnover. There was also a saving during the indemnity period of Rs 2,450 in the insured
standing charges as a result of the fire.
There had been a considerable increase in trade since the date of the last annual accounts and it has been agreed that an adjustment of 15% be made in respect ofthe upward trend in turnover.
- DepartmentX sells goods to Department Y at a profit of 25% on cost and toDepartment Z at 10% profit on Department Y sells goods to X and Z at a profit of15% and 20% on sales, respectively. Department Z charges 20% and 25% profit on costto Department X and Y, respectively. Department Managers are entitled to 10% commission on net profit subject to unrealized profit on departmental sales being eliminated. Departmental profits after charging Managers’ commission, but before adjustment of unrealized profit are as under:
Department X 36,000
Department Y 27,000
Department Z Stock lying at different departments a
18,000
the end of the year are as under:
| Dept. X | Dept. Y | Dept. Z | |
| Rs | Rs | Rs | |
| Transfer from Department X | — | 15,000 | 11,000 |
| Transfer from Department Y | 14,000 | — | 12,000 |
| Transfer from Department Z | 6,000 | 5,000 | — |
Find out the correct departmental Profits after charging Managers’ commission
- HindustanIndustries Mumbai has a branch in Cochin to which office goods are invoiced at cost plus 25%. The branch sells both for cash and on Branch Expenses are paid direct from head office, and the Branch has to remit all cash received into the Head Office Bank Account.
From the following details, relating to calendar year 20X1, prepare the accounts inthe Head Office Ledger and ascertain the Branch Profit. Branch does not maintain any books of account, but sends weekly returns to the Head Office:
| Rs | |
| Goods received from Head Office at invoice price | 6,00,000 |
| Returns to Head Office at invoice price | 12,000 |
| Stock at Cochin as on 1st Jan., 20X1 | 60,000 |
| Sales in the year – Cash | 2,00,000 |
| Credit | 3,60,000 |
| Sundry Debtors at Cochin as on 1st Jan. 20X1 | 72,000 |
| Cash received from Debtors | 3,20,000 |
| Discount allowed to Debtors | 6,000 |
| Bad debts in the year | 4,000 |
| Sales returns at Cochin Branch | 8,000 |
| Rent, Rates, Taxes at Branch | 18,000 |
| Salaries, Wages, Bonus at Branch | 60,000 |
| Office Expenses | 6,000 |
| Stock at Branch on 31st Dec. 20X1 at invoice price | 1,20,000 |
Prepare Branch accounts in books of head office by Stock and debtors method.
