Q1. Attempt any four of the following. (20 marks)
- Answer in one sentence each. (5 marks)
1. Which types of expenses are debited to trading account?
2. What is Reserve Fund?
3. Who is an endorser?
4. What is non – profit organisation?
5. Why is Joint Bank Account opened?
- Write the word/term/phrase which can substitute each of the following statement: (5 marks)
1. A statement showing financial position of the business.
2. Making the payment of bill before its due date.
3. Summary of actual cash receipts and cash payments.
4. The relationship between persons who have agreed to share profit or loss in Joint Venture Business.
5. A Partner who only lends his name to the firm.
- Match the following pairs. (5 marks)
1. Not for profit concerns
2. Fixed capital method.
3. Unexpired expenses
4. Temporary Partnership
5. Pure Single Entry System
- Select the most appropriate alternative from hose given below each statement. (5 marks)
1. Reserve for discount on ______________ has a debit balance.
c. Bills Receivable
d. Loan advanced.
2. Income Statements and Balance Sheet are prepared in a systematic and scientific manner under ________________
a. Double Entry System.
b. Single Entry System
c. Partial Entry System.
d. Indian System.
3. Before accepting a bill, it is called a _________
4. Valuation of goodwill depends upon ________ capacity of business.
5. If two or more persons come together to carry on a business activity for a short period, it is known as ___________
a. Joint venture
d. Stock exchange
- State with reason whether the following statements are true of false. (5 marks)
1. Scrap value of asset reduces the amount of annual depreciation.
2. When the amount of the bill is paid on the due date, it is said to be retired.
- Prepare bill of exchange from the following details.
Drawer - Shekhar Desai, Shastri Road, Mahad. (5 marks)
Drawee – Sharad Verma, Narayan Peth, Pune.
Amount - Rs. 3500/-
Period - 3 months.
Payee - Mukund Pande, Panvel
Date of Bill Drawn – 21st June, 2007
Date of Acceptance - 23rd June, 2007
Q2. M/s Amol Industries, Pune, purchased machinery for Rs. 19,400 on 1st January, 1976, and spent Rs. 600 for its erection. On 1st July 1976, additional machinery costing Rs. 10,000 was acquired. On 1st July 1978 the machinery purchased on 1st January, 1976 was sold for Rs. 12,000 and on the same date fresh machinery was purchased at a cost of Rs. 16,000. Depreciation was provided annually on 31st December at the rate of 10% on the original cost. Give the machinery account and deprecation account for 1976, 1977 and 1978.
Q2. (A) For the purpose of valuation of goodwill it was agreed to consider net profits of the last 4 years and goodwill is to be calculated at one year’s purchase of average net profits of last 4 years. The profits were
Q2. (B) Name the two output devices of computers and explain them in brief:
Q3. Abha purchased goods from Prabha on credit for Rs. 10,000 and accepted a bill drawn by Prabha for four months. Prabha discounted the bill with her bank for Rs. 9,800. Before due date Abha accprached Prabha with a request to renew the bill. Prabha agreed but with the condition that Abha should pay Rs. 6,000 with interest of Rs. 150 and accept a new bill for the balance. The arrangements were duly carried out. New bill is met on due date. Pass the necessary journal entries in the books of Prabha.
Q3. Journalize the following transactions in the books of Smita:
1. Nita informs Smita about dishonor of Anita’s acceptance endorsed to her by Smita for Rs. 15,000. Nita paid noting charges of Rs. 70.
2. Smita retired her acceptance for Rs. 7,000 one month before due date at a rebate of 12% p.a. to Smita.
3. The bank informs Smita that Sudha’s acceptance for Rs. 8,000 sent to bank for collection has been honoured. Bank charges debited Rs. 160.
4. Our acceptance to Soni for Rs. 5100 is settled by endorsing Chitra’s acceptance to us for Rs. 4,950.
Q4. Yash and Jay entered into joint venture to purchase and sell cycles. They decided to share profit and losses equally. Yash purchased 150 cycles at Rs. 400 each and spent Rs. 2,000 for carriage Rs. 4,000 for insurance and draws a bill for Rs. 35,000 on Jay, which is duly accepted by Jay. Jay purchased 210 cycles at Rs. 400 each and spent Rs. 1,400 for carriage and Rs. 2,000 for selling expenses. Yash sold 180 cycles at Rs. 750 each. All the remaining cycles of venture were sold by Jay at Rs. 550 each.
Joint venture was completed and both the parties settled their accounts you are required to prepare joint venture account and Jay’s account in the books of Yash.
Q5. Mr. Suryakant maintains books on single entry and who gives you the following information.
Cash in hand
Cash at bank
- Mr. Suryakant introduced further capital of Rs. 20000 on 1st July, 2006 and had withdrawn Rs. 10,000 during the year.
- Interest on capital is allowed at 10% p.a.
- Additions to furniture and machinery were made on 1st October, 2006
- Write of deprecation on furniture and machinery at 10% p.a.
- Create reserve for doubtful debts at 5% on sundry debtors.
Prepare: a. Statement of affairs. B. Statement of profit and loss for the year ended 31st March, 2007.
Q6. Dimple and Simple entered into a joint venture. They agreed to share profits and losses in the proportion of their initial contributions to the joint venture. They opened a joint Bank A/c. and deposited Rs. 60,000 and Rs. 40,000 respectively as initial contributions. They made cash purchases of Rs. 70,000. They also paid Rs. 4,500 for insurance and freight and Rs. 1,750 for sundry expenses. At the end of the venture, the sales amounted to Rs. 1, 10,000/- There was unsold stock of goods worth Rs. 5000. Simple took over the unsold stock. The Joint Venture was closed. You are asked to prepare Joint Venture A/c. Joint Bank A/c and Co – ventures A/c.
1. Q7. From the following Trial Balance of Shyam and Sundar, You are required to prepare a Trading and Profit and Loss account for the year ended 31st December, 2002 and Balance sheet as on that date after taking into consideration the additional information. They share profits and losses in their capital ratio.
Trial Balance as on
31st December, 2002
Wages and Salaries
Cash in Hand
Plant and Machinery
1, 40, 000
2, 83, 400
2, 83, 400
1. Closing stock was valued at Rs. 17, 600
2. Audit Fee for the year was outstanding Rs. 2, 400
3. Create R.D.D at 5% on Debtors.
4. The goods for Rs. 5, 600 purchased and received on 25th December, 2002 were not recorded in the purchase book.
5. Depreciate freehold property at 10% and Motor Van at 25%