March 2010 Accounts Paper


Q1. Attempt any four sub – questions of the following:
A.      Answer in ‘One’ Sentence each:

1.       What are Revenue Expenditures?
2.       Who is a Drawer?
3.       What is a Joint Venture?
4.       What is a computer?
5.       What is a Goodwill?

B.      Write a word / term/  phrase which can substitute each of the following sentences:

1.       The incomplete method of accounting system.
2.       The gradual and permanent decrease in the value of fixed assets due to any cause.
3.       Payment before the due date of the bill.
4.       An account opened in the bank in a joint name of the co – ventures.
5.       The unit of the computer which is popularly known as heart, brain and nervous system.

C.      Match the following pairs:
Group A
Group B
1.       Income and Expenditure account
2.       Drawings
3.       Bill of Exchange
4.       Co – venturers’ Liability
5.       Intangible Asset
a.       Withdrawals in cash or kind
b.      Negotiable Instrument
c.       Similar to Profit and Loss account
d.      Limited
e.      Computer
f.        Unlimited
g.       Goodwill
h.      Building

D.      Select the most appropriate alternative from those given below and rewrite the sentences:

1.       The Indian Partnership Act in force since __________
a.       1933
b.      1932
c.       1956
d.      1934
2.       Receipt and Payment account is a _________ account.
a.       Personal
b.      Real
c.       Nominal
d.      None of these
3.       Under Fixed Installment Method depreciation is charged on _________
a.       Original cost
b.      Written down value
c.       Scrap Value
d.      Market value
4.        There are ___________ parties to a bill of exchange.
a.       Two
b.      Four
c.       Three
d.      Five
5.       Expenses of Joint Venture business are debited to _________
a.       Joint Bank A/c
b.      Joint Venture A/c
c.       Co – venturer’s A/c
d.      Debentures A/c

E.       State with reasons whether the following statements are True or false.
1.       Balance Sheet is an account of business result
2.       The main object of not for profit organizations is to earn profit.  

F.       Prepare a bill of exchange from the following information.
Drawer                                                 :               Subhash Suryawanshi, Main Road, Ajara.
Drawee                                                :               Mudhukar Bharati, Amboli Road, Sawantwadi.
Payee                                   :               Manoj Desai, Amboli.
Peroid                                   :               60 days.
Date of Bill                          :               25th May, 2006
Date of Acceptance        :               28th May, 2006.
Amount of Bill                   :               Rs. 5,700.

Q2. On 1st April, 1995, Avadhoot Traders, Ajara, purchased machinery for Rs. 40,000. On 1st October, 1995 they purchased further machinery costing Rs. 20,000. On 1st October, 1997 they sold machinery which was purchased on 1st April 1995 for Rs. 28780. Depreciation on machinery was provided at the rate of 10% p.a. on Diminishing Balance method.
The Financial year closes on 31st march every year. Prepare Machinery account and Depreciation account for three years. 1995 – 96, 1996 – 97, 1997 – 98.  
OR
A. The capital of a partnership firm is Rs. 3,00,000. Profits for the last 4 years was Rs. 32,500, Rs. 36,000 and Rs. 39,000. The reasonable return on the capital employed is 11%. Calculate the value of goodwill on the basis of 3 years purchases of super profit.
B. Explain the role of computer in accounting.  

Q3. Madhav accepted a bill of Rs. 40,000 drawn by kashinath at 3 months. Kashi8nath got the bill discounted with his bank for Rs. 39,000. Before the due date, Madhav approached Kashinath for renewal of the bill. It was agreed to pay Rs. 30,000 immediately together with interest on the remaining amount at 10% p.a. for 3 months and for the balance Madhav accepted a new bill for 3 months. These arrangements were carried through.
But afterwards Madhav became insolvent. Only 35% of the amount could be recovered from his estate.
Pass necessary Journal entries in the books of ‘Madhav’
Prepare Madhav’s account in the books of ‘Kashinath’
OR
Journalise the following transactions in the books of ‘Avadhoot’.
a.       Nandini informs Avadhoot that Nisha’s acceptance for Rs. 5000 endorsed to Nandini has been dishonoured. Noting charges amounted to Rs. 100.
b.      Dhanashri renews her acceptance to Avadhoot for Rs. 2400 by paying Rs. 1200 in cash and accepting a new bill for the balance plus interest at 12% p.a. for 3 months.
c.       Honagekar’s acceptance to Avadhoot Rs. 6000 retired one month before its due date at a discount of 20% p.a.
d.      Bank informs to Avadhoot that the dishonour of Shashikala’s acceptance for Rs. 4000 discounted with the bank. Noting charges amounted to Rs. 70.
e.      Avadhoot sent a bill of Pravin for Rs. 6000 to the bank for collection.

Q4. Apate, Bachute and Chapate undertook construction of the Cultural Hall of a Company at a contract price of Rs.60,000 payable in Cash Rs.40,000 and Rs.20,000 in the form of Debentures of a company. (12)
They shared profits and losses in the ratio of 3:2:1 respectively.
Apate Rs.30,000, Bachute Rs.20,000, Chapate Rs.10,000.
The following payments are made out through Joint Bank Account.
1. Purchase of materials Rs.25,000
2. Payment of wages Rs.7,700
3. Purchase of plant Rs.4,500
4. Other charges Rs.1,100
Apate brings a truck of Rs.4,000
Bachute brings materials of Rs.5,500
Chapate brings a mixer worth Rs.1,000
At the close of the venture the unused materials were taken by Apate for Rs.500.
Bachute took over the mixer and plant for Rs.2,700.
The truck was sold in the market for Rs.2,200.
The contract price was received as per the agreement.
Chapate agreed to take over the debentures at Rs.19,000.
Prepare : 1. Joint Venture Account
2. Joint Bank Account
3. Co-venturer's Account

Q.5 Mr. Balasaheb is dealing in the business of fruits. He maintains his accounting record with single entry. The following figures are taken from his record. (10)
Particulars
Balance as on
1.4.2004
Balance as on
31.3.2005
Land and Building
Machinery
Furniture
Sundry Debtors
Stock
Cash Balance
Bills Receivable
Sundry Creditors
Bank Overdraft
Bank Balance
40,000
30,000
10,000
20,000
10,000
5,000
5,000
25,000
5,000
-
50,000
40,000
10,000
40,000
25,000
15,000
5,000
25,000
-
10,000
Mr. Balassheb introduced Rs. 10,000 as further capital.
He spent Rs. 45,000 from the business for his daughter's marriage.
Depreciate Land and Building by Rs. 5,000
Create 5% Reserve for Doubtful Debts on Sundry Debtors.
Prepare:
1.    Opening Statement of Affairs.
2.    Closing Statement of Affairs.
3.    Statement of Profit and Loss.





Q.6 Following is the summary of Receipts and Payments of Jay Bajrangbali Vyayam Shala, Ajara for the year ending on 31.03.2007. (16)
Receipts and Payments Accounts
For the year ended on 31 st March, 2007
Receipts
Amount
Rs.
Payments
Amount
Rs.
To balance b/d
To Subsciption
2005-06
2006-07
To Donation for Building
To Receipts from Entertainments
To Interest
To Entrance fees
41,600
4,120
1,60,000
50,000
36,440
3,240
45,000
By Salary
By Lighting
By General Expenses
By Entertainment Expenses
By Taxes paid
By Printing and Stationery
By Expenses paid of 2005-06
By Investment
By Fixed Deposit with Ajara Urban Bank
By Balance c/d
55,000
10,000
15,360
25,800
5,000
9,440
24,000
1,20,000
40,000
35,800
Total
3,40,400
Total
3,40,400
Adjustment :
1.     Jay Bajrangbali Vyayam Shala has 4500 members paying annual subscription of Rs.40 each.
2.     Provide for outstanding salary Rs.5,000.
3.     On 1.4.2006 the assets stood as under :
(a) Land and Building Rs.60,000
(b) Furniture Rs.46,000
Depreciate the above assets at 10% p.a.
1.     Interest on Investment Rs.2,000 is not received.
2.     Capital Fund was Rs.1,27,720 on 1.4.2006.
3.     50% of the entrance fees is to be capitalized.
Prepare:
Income and Expenditure Account for the year ended 31st March, 2007 and Balance Sheet
as on that date.
Q.7 Ashok and Tanaji are Partners sharing Profits and Losses in the ratio 2:3 respectively. (20)
Trial Balance as on 31 st March, 2007
Particulars
Amount
Rs.
Particulars
Amount
Rs.
Purchases
Patents Right
Building
Stock (1.4.2006)
Printing and Stationery
Sundry Debtors
Wages and Salaries
Audit fees
Sundry expenses
Furniture
10% Investment (Purchased on 30.09.2006)
Cash
Provident Fund Contribution
Carriage Inwards
Travelling Expenses
98,000
4,000
1,00,000
15,000
1,750
35,000
11,000
700
3,500
8,000
10,000
4,000
800
1,300
2,700
Capitals :
Ashok
Tanaji
Provident Fund
Creditors
Bank Loan
Sales
Reserve for Doubtful Debts
Purchase Return




30,000
40,000
7,000
45,000
12,000
1,58,000
250
3,500
2,95,750
2,95,750
Adjustments :
1.     Closing stock is valued at the Cost of Rs.15,000 while its Market Price Rs.18,000.
2.     On 31st March, 2007 the stock of stationery was Rs.500.
3.     Provide reserve for bad and doubtful debts at 5% on debtors.
4.     Depreciate building at 5% and patent rights at 10%.
5.     Interest on capitals is to be provided at 5% p.a.
6.     Goods worth Rs.10,000 were destroyed by fire.
7.     The Insurance company admitted a claim for Rs.8,000.