Accounts Preliminary Paper 2 Iind Preliminary

OMTEX CLASSES THE HOME OF TEXT IIND PRELIMINARY EXAMINATION OF ACCOUNTS Accounts Preliminary Examination 2008 - 09

Total Marks 100

OMTEX - CLASSES

Preliminary Examination

– 002

ACCOUNTS Time – 3 hrs.

4 PAGES

Max. Marks : 100

Q1. Attempt any four of the following. (20 marks) A. Answer in one sentence each. (5 marks) 1. What do you mean by scrap value? 2. What are noting charges? 3. What is the relationship between coventurers? 4. What is partnership deed? 5. State the formula for calculating Normal Profit? B. Write the word/term/phrase which can substitute each of the following statement: (5 marks) 1. Goods returned to the supplier. 2. It is a stick or lever used to change the position of the cursor on a screen. 3. A bill in which the period of the bill is counted from the date of the bill accepted. 4. The receipts that are an unusual nature not arising through named activities of the business. 5. A fixed asset which is not essential for conduct of business. C. Match the following pairs. (5 marks) D. Select the most appropriate alternative from hose given below each statement. (5 marks) 1. Partner’s drawings are transferred to his __________ a/c under fixed capital method. a. Capital A/c b. Current A/c c. Trading A/c d. Profit and loss A/c 2. Sale of old materials must be shown on credit side of ____________ a. Cash book b. Income and expenditure account c. Balance sheet d. Receipt and Payments account 3. Cost of asset = _____________ a. Purchase price + scrap value b. Purchase price + depreciation c. Purchase price + incidental cost d. None of the above 4. A person in whose favour the bill is endorsed is called ___________ a. Endorsee b. Endorser c. Drawer d. None of the above 5. Expenses incurred by coventurers is debited to ___________ a. None of the below b. Consignee’s account

OMTEX CLASSES THE HOME OF TEXT IIND PRELIMINARY EXAMINATION OF ACCOUNTS Accounts Preliminary Examination c. Co venturers account d. Joint venture account. Group A 1. Partner’s Salary 2. Subscription received in advance for the current year. 3. Dishonour of bill. 4. Cash in hand. 5. Unsold goods taken over by co – ventures

Total Marks 100

Group B a. Balance sheet asset side. b. Current asset. c. Deducted from gross profit. d. Credited to joint venture account. e. Credited to coventurers A/c f. Noting Charges. g. Closing balance sheet liability side. h. Fixed assets. E. Select the most appropriate alternative from hose given below each statement. (5 marks) 1. Partner’s drawings are transferred to his __________ a/c under fixed capital method. a. Capital A/c b. Current A/c c. Trading A/c d. Profit and loss A/c 2. Sale of old materials must be shown on credit side of ____________ a. Cash book b. Income and expenditure account c. Balance sheet d. Receipt and Payments account 3. Cost of asset = _____________ a. Purchase price + scrap value b. Purchase price + depreciation c. Purchase price + incidental cost d. None of the above 4. A person in whose favour the bill is endorsed is called ___________ a. Endorsee b. Endorser c. Drawer d. None of the above 5. Expenses incurred by coventurers is debited to ___________ a. None of the below b. Consignee’s account c. Co venturers account d. Joint venture account.

F. State with reason whether the following statements are true of false. (5 marks) 1. Balance sheet is a statement and not an account. 2. Partnership firm enjoys business continuity. 3. When the bill is sent to bank for collection, bank A/c is credited. F.

Drawer: Drawee – Payee –

Shekhar Desai, Spastic Road, Mahad. (5 marks) Sharad Verma, Narayan Peth, Pune. Mukund Pande, Panvel.

OMTEX CLASSES THE HOME OF TEXT IIND PRELIMINARY EXAMINATION OF ACCOUNTS Accounts Preliminary Examination Total Marks 100 Amount Rs. 5775/Period 50 days Date of Bill Drawn – 15th March, 1995 Date of Acceptance – 19th March, 1995 (Accepted for only Rs. 5700) Q2. On 1-1-2002 Champaklal & Sons purchased furniture for Rs. 15000. On 1-7-2002 additional furniture was purchased for Rs. 8000. On 30-6-2003 the furniture purchased on 1-1-2002 was skid for Rs. 12,000. The firm charges depreciation @ 10% p.a. under the reducing balance method. Prepare Furniture account, for the years 2002, 2003, 2004 assuming that accounting year of the firm is calendar year and depreciation account for the year ending 31 – 12 - 2003. (10marks) OR A. Find out value of goodwill from the following. Net profits for last 5 years are Rs. 30,000; Rs. 36,000; Rs. 24,000; Rs. 4,000; Rs. 14,000. Goodwill to be valued at 3 years purchase of average net profit. (5 marks)

B. Explain 'Abacus’ as a phase in the history of computer.

(5 marks) Ans. It was in about 400 B.C., that a sort of adding machine called ABACUS was invented in China. It consists of a rectangular frame. The rods or wires are fitted to the frame which carry sound beads. Abacus is still being used in some countries. Counting id done by shifting the beads from one side to another. It is proved that an expert operator of abacus is faster in calculations than a clerk using a calculator.

Q3. Softy accepted a bill of Rs. 20,000 drawn by Kwality at 3 months. Kwality got the bill discounted with his bank for Rs. 19,500. Before the due date softy approached Kwality for renewal of the bill. It was agreed to pay Rs. 15,000 immediately together with interest on the remaining amount a 10% for 3 months and for the balance Softy should accept a new bill for 3 months. These arrangements were carried through. But afterwards softy became insolvent and only 40% of the amount could be recovered from his estate. Pass necessary Journal entries in the books of Softy & show Kwality’s account in Softy’s ledger. (12 marks) OR Q3. Raj sold goods worth Rs. 7,000 to Dev & Rs. 9,500 to Chetan on credit on 31-1-2004. On 12-2004, Dev accepted a bill of Rs. 5,000/- at 2 months paid cash Rs. 1,900 in full settlement of his account. On the same date Chetan accepted a bill for the due amount at 3 months. Raj discounted the first bill at 6% p.a. and sent the second bill to bank for collection. On the due date of the first bill, Dev approached bank for renewal of bill. Raj accepted on the condition that Rs. 3000 be paid immediately, along with the interest on the balance Rs. 40 & accepts a fresh bill for the balance amount. These arrangements were carried through. Raj honoured his acceptance on the due date. However Dev became insolvent & dividend of 20% could be recovered from his estate. (12 marks) Q4. Ram and Shyam entered into joint venture to prepare building for a private firm who agree to pay Rs. 2,00,000 on the completion of the work. A bank account was opened in their joint names Ram contributing Rs. 25,000 and Shyam Rs. 25,000. They share the profits and losses in the ration 2:3 respectively. Payments made out of the joint bank account where: Purchase of Rs. 15,000 Hire Charge for equipments Rs. 12,000 equipments Wages Rs. 85,000 Materials Rs. 20,000

OMTEX CLASSES THE HOME OF TEXT IIND PRELIMINARY EXAMINATION OF ACCOUNTS Accounts Preliminary Examination Total Marks 100 Office Expenses Rs. 68,000 Ram paid Rs. 5,000 and Shyam Paid Rs. 3,000 for the other expenses. The building was completed and government paid the amount by cheque. Sham took equipments at a valuation of Rs. 6,000 and Ram took material of Rs. 5,000. Prepare: Joint venture account, Joint bank account and coventurers account. (12 marks) st st Q5. Saishree Ltd. Purchased a Machine worth Rs. 1,00,000 on 1 April, 2000. On 1 April 2001, the company purchased additional machine for Rs. 20,000. On 1st Oct 2002, the company sold the machine purchased on 1st April, 2001 for Rs. 16,000. Company writes off depreciation at the rate of 10% p.a. on reducing balance system. The Accounts being closed on 31st March every year. Show Machinery account and Depreciation account for 3 years. i.e. 2000 – 01, 20010 – 02 & 2002 – 03. (10 marks) Q6. From the following information prepare Income and Expenditure account for the year ended 31st March, 2008 of Youth Association and a balance sheet as on that date. (16 marks) Receipts Amount Payments Amount To Bal. b/d – 3500 By Salaries To Subscriptions 1500 2007 250 2006 - 07250 2008 2250 2500 2007 - 083500 By Rent 4300 2008 - 09750 4500 By Postage 300 To Entrance Fees 1600 By Printing and Stationary 3000 To interest on investments 2000 By Balance C/d 2400 12500 12500 Adjustments 1. Salaries unpaid Rs. 250, printing unpaid includes Rs. 600 for the year. 2. Printing paid includes Rs. 500 pertaining to the previous year. 3. Subscriptions outstanding Rs. 650 for the year. 4. Balances on 1st April 2007, Furniture – Rs. 6000, Investment – Rs. 50,000, Building - Rs. 2000 5. Provide 5% depreciation on furniture and building. Q7. Govindan & Mukul are partner sharing profits and loses in the ratio 3:2. Following is the trial balance as on 31st Match 2006. (20 marks) Trial Balance as on 31 – 3 – 2006 PARTICULARS Debit. Credit. Capital Mr. Govindan 50000 Mr. Mukul 50000 Stock on 1st April 2005 20000 Machinery 70000 Bills Receivable & 10000 8000 Payable 10000 12000 Purchase & Sales 0 Furniture 6000 5000 Returns 2000 Current Account Mr. Govindan 2000 Mr. Mukul 1000

OMTEX CLASSES THE HOME OF TEXT IIND PRELIMINARY EXAMINATION OF ACCOUNTS Accounts Preliminary Examination Customers Account Supplies Account Salaries (11 months) Productive Wages Office Insurance General Expenses Commission 10% Bank Loan Interest on Loan Bad debts Advertisement R.D.D. Land & Building

Total Marks 100 30000 11000 10000 3000 2000 400 1000 8000 10600 28700 0

40000

3000 10000

1000 287000

Adjustments: 1. Closing stock is valued at market price Rs. 55000 which is 10% above cost. 2. Machinery includes Rs. 10000 purchased on 31st March 2006. 3. Depreciate Machinery @ 10% p.a. 4. Provide R.D.D. Rs. 2,000 on debtors & provide 2% for reserve for discount on debtors. 5. Mr. Govindan is entitled to a salary of Rs. 400 p.m. from 1st August 2005. 6. Provide 10% for reserve for discount on creditors. 7. Mr. Mukul is entitled to get 2% commission on gross profit. Prepare Trading Account and Profit or loss account for the year ended 31st March 2006 and Balance sheet as on that date. ********ALL THE BEST******** ******STUDY WELL AND BE HONEST TO YOUR PARENTS****** ********OMTEX CLASSES WISH YOU A GRAND SUCCESS IN BOARD EXAM*******