ACCOUNTS IMPORTANT QUESTION FOR PRACTICE
1. Vishal Traders, Bombay, purchased Machinery on 1-1-1970 for Rs. 68,000 and paid installation charges Rs. 2,000 and decided to depreciate the machinery at 10% per annum under the fixed instalment system. On 1-7-1972 machinery having an original cost of Rs. 10,000 was sold for Rs. 5,000 and on the same date new machinery was purchased for sr. 10,000. Prepare machinery account and depreciation account for 1970, 71 & 72 assuming the accounts of the firm are closed on every 31st December.
2. Journalize the following transactions in the books of Kamesh:
a) Nanda informs Kamesh that Shanti’s acceptance for Rs. 4,000 endorsed to Nanda has been dishonoured and noting charges have been Rs. 100
b) Ashok renews his acceptance to Kamesh for Rs. 2400 by paying Rs. 800 in cash and accepting a new bill for the balance plus interest @ 12 p.a. for 3 months.
c) Deva’s acceptance to Kamesh Rs. 12,000 is retired one month before its due date at a discount of 12% p.a.
d) The bank informs Kamesh that Sudhakar’s acceptance for Rs. 4,000 sent to bank for collection has been honoured. Bank charges debited Rs. 40.
e) Our acceptance to Shanthi for Rs. 5000 is settled by endorsing Malliga’s acceptance to us for Rs. 4,800.
3. Anil and Sunil entered in to a joint venture to consign 500 bales of cotton to Mukesh to be sold on their joint risk. Anil sends 150 bales at Rs. 300 each and pays Rs. 2000 for freight and insurance. Sunil purchases 350 bales at Rs. 250 each paying for insurance and other charges Rs. 4000. Anil advances a cheque of 12,000 to Sunil and also accepts a bill for the same amount drawn by Sunil which was discounted by Sunil@ 90% of its value. Mukesh sold all the bales @ Rs. 400 each. The expenses incurred by Mukesh are Rs. 5000 and his commission was 10% of the sales value. Mukesh remits Rs. 100000 to Sunil and the balance to Anil by a cheque. Venturers settle their accounts by a draft. Prepare Joint venture account, Sunil’s account and Mukesh’s account in the books of Anil.
4. Suresh and Ramesh entered into a joint venture to construct a building at a contract price of Rs. 7,00,000. They agreed to share profits and losses in the ratio of 2:1. Suresh deposited Rs. 5,00,000 and Ramesh Rs. 1,00,000 into joint bank. The transactions were as follows.
Purchase of materials Rs. 3,50,000
Tools and equipment Rs. 1,00,000.
Wages Rs. 1,20,000
Architect fees Rs. 25,000
Besides these, Suresh supplied material worth Rs. 15,000 and Ramesh supplied material worth Rs. 13,500. Building was ready and contract price received. Prepare Joint venture A/c, Joint Bank A/c & Co – Venturer’s A/c.
5. On 1st April, 2004 Saikripa enterprises purchased two computers of Rs. 40,000 each. On 1st October, 2004 they purchased one more computer for Rs. 40,000. On 1st October, 2006 they sold one of the computers, which was purchased on 1st April, 2004 for Rs. 18780. Depreciation on computers was provided @ 10% p.a. on Diminishing Balance Method and the financial year closes on 31st March every year. Prepare: computer A/c and Depreciation A/c for years 2004 – 2005, 2005 – 2006, 2006 – 2007. (September, 2008 board exam question).
6. Anjali of Nagpur sold goods worth Rs. 25,000 to Rupali of Amaravati. On next day Ruapali paid Rs. 10,000 in cash and accepted two months bill for the balance drawn by Anjali. Anjali discounted the bill at 12% p.a. with her bank. Before due date, Rupali finds herself unable to make payment of the bill; and requests Anjali to renew it. Anjali accepts the proposal on the condition that Rupali should pay Rs. 5,000 in cash and accept new bill for one month along with interest Rs. 200 for the balance. These arrangements were carried through. The new bill was met on due date. Give journal entries in the books of Anjali.
7. Journalize the following transactions in the books of M/s Tirupati:
i. Kailas informed Tirupati that Ameet’s acceptance for Rs. 1,000/- endorsed to him, has been dishonoured. Noting Charged amounted Rs. 40/-.
ii. Vilas renews his acceptance to Tirupati for Rs. 800/- by paying Rs. 400/- in cash and accepting a fresh bill for the balance plus interest at 12% p.a. for 3 months.
iii. Kalpana’s acceptance to tirupati for Rs. 6,000 retired one month before due date at a discount of 10% p.a.
iv. Bank informs Tirupati the dishonor of Kavita’s acceptance of Rs. 2,500 discounted with Bank. Noting charges Rs. 50/-.
8. Harsha and Varsha entered into a joint venture to buy and sell computers and share the profit or loss in the proportion of 2:1 respectively. Harsha purchased 10 computers @ Rs. 40000 each and paid Rs. 12,000 for transport charges, insurance charges, etc. Varsha bought 8 computers @ 42000 each and spent Rs. 10000 on freight and insurance. Harsha sold 8 computers @ 48,000 each and paid selling expenses Rs. 2000 and took over one computer at an agreed price of Rs. 32000 for personal use. Remaining computer were sold by varsha @ Rs. 45000 each and spent Rs. 2500 on miscellaneous expenses. The co – ventures closed their venture and settled their accounts. Prepare the Joint venture A/c and the co – venture’s account in the books of Harsha.
9. M/s Mangrulkar & Co. Purchased machinery on 1st October, 2000 costing Rs. 56,000. On the same date firm spent Rs. 4000 for its erection. On 1st April, 2001 additional machinery was purchased for Rs. 30,000. The machine costing Rs. 8000 on 1st October, 2000 was sold out on 31st March, 2003 for Rs. 6,000. On the same date a new machine costing Rs. 28,000 was purchased. Every year on 31st March depreciation is charged at 10% p.a. on the cost price of machinery. Prepare: Machinery A/c and Depreciation A/c for three years, i.e. 2000 – 01 , 2001 – 02 and 2002 – 03 in the books of the firm.
10. Rupa purchased goods from Deepa on credit for Rs. 10,000 and accepted a bill drawn by Deepa for four months. Deepa discounted the bill with her bank for Rs. 9,700. Before due date, Rupa approached Deepa with a request to renew the bill. Deepa agreed but with the condition that Rupa should pay Rs. 6000 with interest of Rs. 120 and accept a new bill for the balance. The arrangements were duly carried out. New bill is met on the due date. Pass the necessary journal entries in the books of Deepa.
11. Journalise the following transactions in the books of Ashwin.
a. Bank informed that Sachin’s acceptance for Rs. 5750 sent to bank for collection had been honoured and bank charges debited were Rs. 50.
b. Nitin renewed his acceptance for Rs. 7,200 by paying Rs. 2,200 in cash and accepting a new bill for the balance plus interest @ 8% p.a. for 3 months.
c. Discharged our acceptance to Pravin for Rs. 4250 by endorsing Bhavin’s acceptance to us for Rs. 4,000.
d. Jatin who had accepted Ashwin’s bill of Rs. 8500 was declared insolvent and only 40% of the amount could be recovered from his estate.