HSC 12th ACCOUNTANCY IMPORTANT QUESTIONS
PART – A
I. FILL IN THE BLANKS:
1. Closing stock is valued at Cost Price or ________ price whichever is lower.
2 Interest on capital is debited in ________ account
3 Provision for discount on creditors is deducted from ________in
4 Debts which are not recoverable from Sundry debtors are termed
as ________. the Balance sheet.
5 Income accrued but not received will be shown on the ________
side of the Balance sheet
6 A statement of affairs resembles a ________.
7 In ________ system, only personal and cash accounts are opened
8. A firm has assets worth Rs.60,000 and capital Rs.45,000. Then
it’s liabilities is ________.
9. ________ method of depreciation is suitable for special type of
asset like Loose tools
10. _______ method of depreciation is used in the case of Lease.
11. The estimated sale value of the asset at the end of it’s economic
life is called as ________ value.
- Liquid ratio is otherwise known as _______.
- 100% – Operating profit ratio is equal to _______ ratio.
14. Gross profit can be ascertained by deducting cost of goods sold
from _______.
15. Bank overdraft is an example of _______ liability.
16. _______ ratio is modified form of liquid ratio.
17. Liquid liabilities means current liabilities less _______.
18. Goodwill is an _______ asset.
19. Indian Partnership Act was enacted in the year ________.
20. Under __________ capital arrangement, current accounts will
not be maintained
21. Money lent to the business by a partner is credited to his ________
account and not his capital account.
22. The capital accounts of partners may be ________ or fluctuating.
23. The balance of revaluation account shows __________ on
revaluation.
24. At the time of admission, when goodwill is raised, the old partners
capital account will be credited in the _______ ratio
25. The balance of revaluation account shows __________ on
Revaluation
26. When the value of an asset increases, it results in _______.
27. When an unrecorded liabilities is brought into books, it results in
_______.
28. At the time of retirement, the revaluation profits of business will
be shared by _______ partners.
29. The accumulated reserves will be transferred to the old partners
Capital account in the _______ ratio at the time of his retirement
30. The amount due to the retiring partner is either ______ or is paid
in ______.
31. At the time of retirement, the profit on revaluation of assets and
liabilities will be transferred to the _______ side of the capital
accounts of all the partners
32. Sacrificing ratio is the ratio in which the old partners (existing)
have agreed to sacrifice their _______ in favour of _______.
33. __________ is considered as the official signature of the company.
34. The management of a company is done by __________.
35. The liability of share holders are __________ in a company.
36. Minimum subscription that should be received by the company is
______% of the issued capital
37. Capital Reserve represents __________ profit
38. Securities premium is shown in the __________ side of the Balance
Sheet
II. Choose the correct answer:
39. Rent outstanding is
a) a liability b) an asset c) an income
40. Interest on capital is added to
a) Expense A/c b) Income A/c c) Capital A/c
41. Interest on drawings is deducted from
a) Income A/c b) Capital A/c c) Expense A/c
42. All the items given in the adjustment will appear at _________ in
the Final accounts.
a) Three places b) Two places c) One Place
43. Credit sales is obtained from
a) Bills Receivable account b) Total debtors account c) Total creditors account
44. The capital of a business is ascertained by preparing
a) Trading account b) Statement of profit or loss c) Statement of affairs
45. The term depletion is used for
a) Intangible assets b) Fixed assets c) Natural resources.
46. Profit made on sale of fixed asset is debited to
a) Profit and Loss account b) Fixed Asset account c) Depreciation account
47. Total amount of depreciation provided on the written down value
method at the rate of 10% p.a. on Rs.10,000 for first three years
will be
a) Rs. 2,107 b) Rs. 2,710 c) Rs. 2,701
48. Loss on sale of fixed asset appear on the
a) credit side of Depreciation account
b) debit side of fixed asset account
c) credit side of fixed asset account
49. All profitability ratios are expressed in terms of
a) Proportion b) Times c) Percentage
50. Shareholders funds includes
a) Equity share capital, Preference share capital, Reserves &Surplus
b) Loans from banks and financial institutions
c) Equity share capital, Preference share capital, Reserves &
Surplus and Loans from banks and financial institutions
51. Opening stock is equal to Rs.10,000, Purchase Rs.2,00,000 and
closing stock is Rs.5,000. Cost of goods sold is equal to
a) Rs. 2,15,000 b)Rs. 2,10,000 c) Rs. 2,05,000
52. Total sales of a business concern are Rs.8, 75,000. If cash sales is
Rs.3, 75,000, and then credit sales will be
a) Rs.12,50,000 b) Rs.5,00,000 c) 12,00,000
53. Current assets of a business concern is Rs.60,000 and current
Liabilities are Rs.30, 000.Current ratio will be
a) 1 : 2 b) 1 : 1 c) 2 : 1
54. Cash budget deals with
a) Estimated cash receipts b) Estimated cash payments
c) Estimated cash receipts & estimated cash payments
55. The opening balance of cash in January is Rs.9, 000. The estimated
Receipts are Rs.14, 000 and the estimated payments are Rs.10,000.
The opening balance of cash in February will be
a) Rs. 21,000 b) Rs. 11,000 c) Rs. 13,000.
56. In a partnership, partners share their profits and losses in _______ratio
a) their capital
b) equal
c) agreed
57. Current accounts for partners will be opened under
a) Fixed capital method
b) Fluctuating capital method
c) Either fixed capital method or fluctuating capital method
58. X and Y are partners sharing the profits and losses in the ratio of
2:3 with capitals of Rs.1, 20,000 and Rs.60,000 respectively.
Profits for the year are Rs.9, 000. If the partnership deed is silent
as to interest on capital. Show how profit is shared among X and Y.
a) Profit: X - Rs. 6,000; Y - Rs.3, 000
b) Profit: X - Rs. 3,600; Y - Rs.5, 400
c) Profit: X - Rs. 3,000; Y - Rs.6, 000
59. Under fixed capital method salary payable to a partner is
Recorded
a) In Current Account
b) In Capital Account
c) Either in Current Account or Capital Account.
60. When A and B sharing profits and losses in the ration 3:2, admit C
as a partner giving him 1/5 share of profits. This will be given by A
and B.
a) Equally
b) in their capitals ratio
c) in their profit sharing ratio
61. On admission of a new partner, increase in value of assets is
debited to
a) Asset account
b) Proit & Loss adjustment account
c) Old partners capital account.
62. On admission of a new partner balance of General Reserve
Account should be transferred to the capital account of
a) all partners in their new profit sharing ratio
b) old partners in their old profit sharing ratio
c) old partners in their new profit sharing ratio
63. ________ ratio is computed at the time of admission of a new
Partner
a) Gaining ratio
b) Capital ratio
c) Sacrificing ratio.
64. The public issue must be kept open for at least
a) 3 days b) 5 days c) 7 days
65. When more number of applications are received than that are
offered to the public, it is called ____________.
a) Over subscription b) Under subscription
c) Full subscription
66. According to Table A, interest charged on calls in advance is
_______%.
a) 4% b) 5% c) 6%
67. Normally companies can issue shares at ________% of discount
a) 5 b) 10 c) 20
68. The balance of forfeited share account is________ in the BalanceSheet.
a) added to paid up capital b) added to authorised capital
c) deducted from paid up capital
69. Capital Reserve is shown on the ________ side of Balance Sheet.
a) Asset b) Liability c) Both
70. The public issue must be kept open for atleast
a) 3 days b) 5 days c) 7 days
PART – B
FIVE MARK
1. What is forfeiture of shares?
2. What is prorata allotment?
3. What is gaining ratio?
4. What is Sacrifice Ratio?
5. What is Revaluation Method of Goodwill?
6. What is Average profit?
7. What is Super profit?
8. What is bad debt?
9. What is adjusting entry?
10. What is accrued income?
11. What is net worth method?.
12. What is statement of affairs?
13. What is Annuity method of depreciation?
14. What is residual value?
15. What is obsolesence?
16. Write notes on ‘Effluxion of time’.
17. What is Annuity method of depreciation?
18. Explain current ratio.
19. What are profitability ratios?
20. What are profitability ratios?
21. Explain solvency ratios
22. Define Budget
23. Write notes on Cash budget
24. The Trial Balance (31.3.04) shows the following:
Dr. Cr.
Bank loan @ 10% (1.4.03) ---- ------ Rs. 10, 00,000
Interest paid Rs 60,000
Provide interest outstanding. Pass adjusting entry and show how
this item will appear in the Final accounts.
25. How will the following adjustment appear in the Balance sheet ason 31.3.2000.
Sundry debtors R 21,000
Bad debts to be written off Rs. 1,000
Adjustment: Provide @ 5% provision for Bad and Doubtful debts
and @2% Provision for discount on Debtors
26. The Trial Balance shows on 31.3.2002, Sundry debtors
Rs.1,25,000.
Adjustment:
1. Bad debts to be written off Rs.5,000.
2. Provide @ 5% Provision for bad and doubtful debts and
3. Provide @ 2% Provision for discount on debtors.
Pass entries and show how these items will appear in the Final
Accounts
27. The Trial Balance shows the followings
Capital as on 31.3.03 – Rs.6, 00,000
Drawing as on 31.3.03 – Rs.50,000
Charge interest on drawings @ 5%. Pass adjusting and transfer entry. Show how this item will appear in the Final accounts.
28. The Trial Balance as on 31st March 2003 show Sundry debtors
Rs.60, 000. Write off bad debts Rs.4, 000. Pass adjusting and
Transfer entry. Show how this item will appear in the Final accounts.
29. Calculate the missing information from the following.
Rs.
Profit made during the year 4,800
Capital at the end ?
Additional Capital introduced during the year 4,000
Drawings 2,400
Capital in the beginning 9,600
30. Find out the profit of the business for the year 1996 from the
Particulars given below:
Rs.
Capital on 1.4.1996 30,000
Capital introduced during 1996 6,000
Capital as on 31.3.1997 42,000
Drawings 3,000
31. Calculate the missing figure:
Rs.
Capital at the beginning 15,000
Profits made during the year 8,000
Capital at the end 20,000
Drawings ?
32. Calculate Closing Sundry debtors :
Rs.
Opening Sundry debtors 2, 00,000
Credit Sales 7, 00,000
Cash received from Sundry debtors 3, 00,000
Returns inward 5,000
33. From the following details, calculate credit sales made during the
Year 2004.
Rs.
Sundry Debtors (1.4.2004) 87,125
Sundry Debtors (31.3.2005) 76,500
Cash received from Sundry debtors 2, 46,000
Sales return 18,500
Discount allowed 9,000
34. A company purchased Machinery for Rs.1, 00,000. Its installation
Costs amounted to Rs.10, 000. Its estimated life is 5 years and the
Scrap value is Rs.5, 000. Calculate the amount and rate of depreciation
35. Robert & Co. purchased Machinery on 1st April 2002 for
Rs.75, 000. After having used it for three years it was sold for Rs.35, 000.
Depreciation is to be provided every year at the rate of 10% per annum
On Diminishing balance method. Accounts are closed on 31st March
Every year. Find out the profit or loss on sale of machinery.
36. From the following particulars, find out the rate of depreciation,
Under Straight Line Method.
Cost of Fixed Asset Rs. 50,000
Residual Value Rs. 5,000
Estimated Life 10 years
37. Find out the rate of depreciation under straight line method:
Cost of the plant Rs. 2,30,000
Installation charges Rs. 20,000
Expected life in years 10 years
Scrap value Rs. 50,000
38. A company purchased a Machinery for Rs.12,000. It’s useful life
is 10 years and the scrap value is Rs.1,200. Determine the rate of
depreciation under the Straight Line Method.
39. From the following compute current ratio:
Rs. Rs.
Stock 36,500 Prepaid expenses 1,000
Sundry Debtors 63,500 Bank overdraft 20,000
Cash in hand & bank 10,000 Sundry creditors 25,000
Bills receivable 9,000 Bills payable 16,000
Short term investments 30,000 outstanding expenses 14,000
40. From the following particulars ascertain gross profit ratio
Rs . Rs.
Cash sales 40,000 Sales return 5,000
Credit sales 65,000 Gross profit 40,000
41. Calculate net profit ratio from the following:
Rs.
Net Profit 60,000
Sales 3, 00,000
42. From the following details, calculate the operating ratio.
Rs.
Cost of goods sold 6, 00,000
Operating expenses 40,000
Sales 8, 20,000
Sales returns 20,000
43. Calculate stock turnover ratio from the following:
Rs.
Cost of goods sold 6, 75,000
Stock at the beginning of the year 1, 00,000
Stock at the end of the year 1, 25,000
44. From the following, calculate Debt-Equity Ratio.
Rs. Rs.
Equity shares 1,00,000 General reserves 75,000
Debentures 75,000 Sundry creditors 40,000
Outstanding expenses 10,000
45. From the following figures calculate creditor’s turnover ratio
Rs.
Credit purchases 1, 80,000
Bills payable 50,000
Creditors 40,000
46. Calculate liquid ratio
Rs.
Current assets 20,000
Stock 3,000
Prepaid expenses 1,000
Current liabilities 8,000
47. From the following, Calculate Gross Profit Ratio
Rs.
Gross Profit 50,000
Sales 5, 50,000
Sales Return 50,000
48. Calculate Gross Profit ratio
Rs.
Sales 6,50,000
Cost of Goods sold 4,80,000
Sales Return 50,000
49. Calculate Net Profit Ratio
Rs.
Net Profit 4,000
Sales 44,000
Sales Return 4,000
50. Calculate Operating profit ratio
Rs. Rs.
Gross profit 1,00,000 Operating expenses 40,000
Sales 6,02,000 Sales return 2,000
51. Calculate Fixed Assets Turnover Ratio
Rs.
Fixed asset 1,00,000
Depreciation 25,000
Sales 3,00,000
52. Calculate Fixed Assets Turnover Ratio
Rs.
Fixed Assets 1,50,000
Sales 4,50,000
53. Compute Debtors turnover ratio
Rs.
Total Sales 7,50,000
Sales Return 50,000
Opening Debtors 1,17,000
Closing Debtors 83,000
54. From the following, determine Debtors Turnover ratio
Rs. Rs.
Total Sales 1,75,000 Cash Sales 35,000
Sales Return 10,000 Opening Debtors 8,000
Closing Debtors 12,000
55. Ravi and Raghu started business on April 1, 2003 with capitals of
Rs.90,000 and Rs.70,000 respectively. Ravi introduced Rs.10,000 as
additional capital on July 1, 2003. Interest on capital is to be allowed
@ 10%. Calculate the interest payable to Ravi and Raghu for the year
ending March 31,2004
56. X and Y are partners in a firm, sharing profits and losses equally.
X is entitled to a salary of Rs.5,000 p.m. Y is entitled to a commission
of 10% of Net profit after charging such commission. Net profit before
charging commission and salary was Rs.1,48,000. Show the Profit and
loss appropriation account
57. The Goodwill is to be valued at two years’ purchase of last four
years average profit. The profits were Rs.40,000, Rs.32,000,
Rs.15,000 and Rs.13,000 respectively. Find out the value of goodwill
58. Three years’ purchase of the last four years average profits is agreed
as the value of goodwill. The profits and losses for the last four years
are: I year Rs.50,000, II year Rs.80,000; III year Rs.30,000(Loss);
IV year Rs.60,000.
Calculate the amount of goodwill.
59. Pasupathi and Valayapathi are partners. Pasupathi draws Rs.900
regularly in the middle of each month during the year 2004.
Valayapathi draws Rs.5,400 at the end of each half year. Calculate
interest on their drawings at 5% p.a.
60. X and Y had capitals of Rs.80,000 and Rs.40,000 respectively
on 1.1.2000. X introduced additional capital of Rs.10,000, on
30.6.2000. Y withdrew Rs.5,000 from his capital on 1.10.2000.
Calculate interest on capital at 5% for the year 2000.
61. Goodwill is to be valued at three years purchase of five year’s
average profits. The profits for the last five years of the firm were:
2000 - Rs. 4,200; 2001 - Rs. 4,500; 2002 - Rs. 4,700;
2003 - Rs. 4,600 and 2004 - Rs. 5,000.
62. Goodwill is to be valued at three years purchase of four years
average profits. The profits for the last four years of the firm were:
2001 - Rs. 12,000; 2002 - Rs. 18,000; 2003 - Rs. 16,000;
2004 - Rs. 14,000.
Calculate the amount of goodwill.
63. Calculate the amount of goodwill on the basis of two years’
purchase of the last four years’ average profits. The profits of the
last four years are
1996 Profit Rs. 20,000
1997 Profit Rs. 30,000
1998 Loss Rs. 6,000
1999 Profit Rs. 16,000
64. Anandan and Balaraman are partners in a firm with capitals of
Rs.70,000 and Rs.50,000 respectively. They decided to admit Chandran
into the firm with a capital of Rs.40,000. Give journal entry for Capital
brought in by Chandran.
65. A and B are partners sharing profits in the ratio of 3:2. They
admit C for 1/5th share as new partner. Calculate new profit sharing
ratio and sacrificing ratio of old partners
66. G and H are partners sharing profits in the ratio of 3:2. They
admit I for 1/5th share which he acquires entirely from G. Calculate a)
new ratio and b) Sacrificing ratio.
67. Anandan and Baskaran were partners in a firm sharing profit and
loss in the ratio of 3:2. They admit Chandran into the partnership
to 1/3rd share, the old partners sacrificing equally. Calculate the
new profit - ratio and the sacrificing ratio.
68. Ramesh and Suresh are sharing profits in the ratio of 4:3. Mahesh
joins and the new ratio among Ramesh, Suresh and Mahesh is
7:4:3. Find out the sacrificing ratio.
69. A and B are partners in a firm sharing profits and losses in the ratio
of 6:4. C is admitted as a new partner. A surrenders 1/5th share of
his profit in favour of C and B surrenders 2/5th of his share in
favour of C. Calculate New Profit Sharing Ratio.
70. Amala and Vimala were partners of a firm sharing profit and losses
in the ratio of 5:3. On 1.4.2004, the firm’s book showed a reserve
fund of Rs.48,000. On the above date they decided to admit
Komala into the partnership. Pass entry.
71. A,B and C sharing profits in the ratio of 5:3:2. C retires. Find out
the new profit sharing ratio and gaining ratio.
72. X,Y and Z are partners sharing profits in the ratio of 5 : 3 : 2. Z
retires and the ratio between X and Y is 3 : 2. Find out the gaining ratio
73. Bhanumathi, Bharathi and Shanthi are partners sharing. profits in
the ratio of 5 : 3 : 2. On April 1, 2005 Shanthi decided to retire. On
that date, there was a credit balance of Rs.60,000 in their profit and
loss account. Pass entry.
74. Thangamuthu, Anaimuthu and Vairamuthu are partners sharing
profit and loss in the ratio of 3:3:2. Thangamuthu wanted to retire on
1st June 2005, the firms books showed a general reserve of Rs.40,000.
Pass entry.
75. Mani, Nagappan and Ulaganathan are partners sharing profits in
the ratio of 4:3:3. Ulaganathan retires and his share is taken up by
Mani and Nagappan in the ratio of 3:2. Calculate the new ratio.
76. Roja, Meena and Shobana are partners sharing profits in the ratio
of 5:4:3. Roja retires and her share is taken up entirely by Meena.
Calculate the new ratio.
77. X, Y and Z were sharing profits and losses in the proportion of
1/2 , 1/5 and 3/10 respectively. Y retires. Calculate the new ratio
of X and Z.
78. A, B and C were partners of a firm sharing profit and losses in the
ratio of 5:3:2. Goodwill account stood in their books at Rs.36,000.
‘C’ wanted to retire and in view of that the partners decided to
update the value of goodwill to Rs.50,000. Pass entry.
79. Nanda Ltd. issued 10000 shares of Rs.10 each to the public at
discount of 10% payable as follows:
on application Rs.2.50;
on allotment Rs.3.00;
on first & final call Rs.3.50.
All money due were received except from one shareholder
Mr.Udhay, to whom 100 shares are allotted failed to pay the final call
money. The directors forfeited shares after giving due notice. Pass
journal entry for forfeiture.
80. Vinod Company Ltd. issued 40,000 Preference shares of Rs.10
each at premium of Rs.3. Give journal entry.
81. Sridhar Ltd., issued 20,000 shares of Rs.100 each at discount of
10%. Give journal entry.
PART – C
(12 MARKS)
1. Pass necessary adjustment entries for the following adjustments:
1. Salaries outstanding Rs.20,000
2. Prepaid Insurance Rs.400
3. Interest accrued on investments Rs.1000
4. Commission received in advance Rs.2,000
5. To provide 10% interest on capital of Rs.5,00,000
6. Closing Stock Rs.4,00,000
2. The following items are found in the Trial Balance of
Mr.Vivekanandan as on 31st March 2004.
Sundry debtors Rs. 64,000
Bad debts Rs. 1,200
Provision for Bad & doubtful
debts Rs. 2,800
Adjustment:
Provide for bad & doubtful debts at 5% on Sundry debtors.
Give necessary entries and show how these items will appear in
the final accounts.
3. Following are the balances extracted from the Trial Balance of
Mr.Mohan as on 31st March, 2002.
Trial Balance as on 31st March, 2002
Particulars
Debit Credit
Rs. Rs.
Sundry debtors 60,000
Bad debts 5,000
Provision for bad & doubtful debts 10,000
Adjustment
Create provision for bad & doubtful debts @ 5% on Sundry
Debtors.
Pass adjusting entry and show how these items will appear in the final accounts.
4. The following balances have been extracted from the trial balance
of Mr.Ashok as on 31.3.2002.
Trial Balance of Mr.Ashok as on 31st March, 2002
Particulars
Debit Credit
Rs. Rs.
Debtors 2,01,200
Bad debts 9,400
Provision for bad & doubtful debts 24,000
Provision for Discount on debtors 1,200
Discount allowed 18,600
Adjustments:
1. Write off additional bad debts Rs.4,800
2. Create Provision of 10% for bad & doubtful debts on debtors.
3. Create Provision of 2% for discount on debtors.
Show how these items will appear in the Profit and Loss Account
And Balance Sheet.
5. Pass necessary adjusting entries for the following adjustments:
a) Interest on drawings Rs. 10,000.
b) Interest on loan outstanding Rs.5, 000.
c) Depreciation at 5% on furniture Rs.50, 000.
d) Write off bad and doubtful debts Rs.3, 000.
e) Provide provision for bad and doubtful debts at 5% on
Sundry debtors Rs.4, 00,000.
f) Provide provision for discount on creditors at 2% on Sundry
Creditors Rs. 3, 50,000.
6. How will the following adjustment appear in the Balance sheet As on 31.3.2000.
Sundry debtors Rs 21,000
Bad debts to be written off Rs. 1,000
Adjustment: Provide @ 5% provision for Bad and Doubtful debts
And @2% Provision for discount on Debtor
7. The Trial Balance shows on 31.3.2002, Sundry debtors
Rs .1, 25,000.
Adjustment:
1. Bad debts to be written off Rs.5,000.
2. Provide @ 5% Provision for bad and doubtful debts and
3. Provide @ 2% Provision for discount on debtors.
Pass entries and show how these items will appear in the Final
Accounts.
8. Mrs. Vanitha keeps her books on singly entry basis. Find out the
profit or loss made for the period ending 31.3.2004.
Assets & Liabilities 1.4.2003 31.3.2004
Rs. Rs.
Bank Balance 3,500 (Cr.) 4,500 (Dr.)
Cash on hand 200 300
Stock 3,000 4,000
Sundry Debtors 8,500 7,600
Plant 20,000 20,000
Furniture 10,000 10,000
Sundry Creditors 15,000 18,000
Mrs.Vanitha had withdrawn Rs.10,000 for her personal use and
had introduced fresh capital of Rs.4,000. A provision of 5% on
debtors is necessary. Write off depreciation on plant at 10% and furniture at 15%.
9. From the following particulars, calculate closing balances Debtors
And Creditors:
Sundry Debtors as on 1.4.2001 28,680
Sundry Creditors as on 1.4.2001 41,810
Credit purchases 1, 51,400
Credit sales 1, 65,900
Discount earned 5,200
Discount allowed 4,800
Return outwards 7,440
Return inwards 6,444
Cash received from debtors 1, 50,536
Cash paid to creditors 1, 43,765
10. Find out total purchases and total sales from the following details
by making necessary accounts:
Rs.
Opening balance of Sundry debtors 50,000
Opening balance of Sundry creditors 30,000
Cash collected from Sundry debtors 3, 00,000
Discount received 1,500
Cash Paid to Sundry creditors 20,000
Discount allowed 5,000
Return inwards 6,000
Return outwards 8,000
Closing balance of Sundry debtors 35,000
Closing balance of Sundry creditors 25,000
Cash Purchases 12,000
Cash Sales 24,000
11. Mrs. Sheela keeps her books by single entry. She started business
On 1st April 2002 with Rs. 3,00,000. On 31st March 2003 her
Position was as under:
Rs.
Cash in hand 8,000
Sundry Creditors 50,000
Cash at Bank 20,000
Bills payable 10,000
Furniture 40,000
Outstanding expenses 8,000
Plant 2,00,000
Sundry Debtors 1,50,000
Stock 1,50,000
Bills Receivable 15,000
Ascertain the profit or loss made by Mrs.Sheela during 2002 – 03.
12. Machinery account showed a balance of Rs.80,000 on 1st April
2001. On 1st October 2003, another machinery was purchased for
Rs.48,000. On 30th September 2003, a machinery which has book
value Rs.80,000 on 1.4.2001 was sold for the Rs.48,000. Depreciation
is to be provided at 10% per annum on Written Down Value Method.
The accounting year ends on 31st March.
Prepare Machinery account and Depreciation account for three years.
13. What are the causes of depreciation?
14. Ganesh & Co. purchased a Machinery worth Rs.3,00,000 on 1st
October 2000. They spent Rs.20,000 on it’s erection. The firm
writes off depreciation at the rate of 10% on the original cost
every year. The books are closed on 31st March of every year.
Prepare Machinery account and Depreciation account for three
years.
15. Abdul purchased a Machinery on 1st April 2001 for Rs.2,00,000.
After having used it for three years it was sold for Rs.1,60,000.
Depreciation is to be provided at the rate of 10% p.a. on
Diminishing Balance Method. Accounts are closed on 31st March of every year.
Find out the Profit or Loss on sale of machinery
16. From the given data, calculate
1. Gross Profit Ratio
2. Net Profit Ratio and
3. Current Ratio
Rs. Rs.
Sales 3,00,000 Cost of goods sold 2,00,000
Net Profit 30,000 Current Assets 60,000
Current liabilities 30,000
17. Enumerate the steps in the preparation of cash budget.
18. List the methods that can be used for the preparation of the cash Budget.
19. P, Q and R were partners sharing profits in the ratio of 3:2:1. P
draws Rs.5,000 at the end of each quarter. Q draws Rs.10,000 at the
end of each half year. R draws Rs.2,000 on 1.5.2004 Rs.3,000 on
31.10.2004, Rs.5,000 on 30.11.2004. Calculate interest on their
drawings at 10% p.a. for the year ending 31.3.2005.
20. A firm’s net profits during the last three years were Rs.90,000
Rs.1,00,000 and Rs.1,10,000. The capital employed in the firm is
Rs.3,00,000. A normal return on the capital is 10%. Calculate the value
of goodwill on the basis of two years’ purchase of super profit.
21. Mahesh and Ramesh are partners sharing profits in the ratio of
3:2 with capitals of Rs.50,000 and Rs.40,000 respectively. Interest on
capital is agreed at 8% p.a. Interest on drawings is fixed at 10% p.a.
The drawings of the partners were Rs.15,000 and Rs.10,000, the
interest for Mahesh Rs.750 and for Ramesh Rs.500. Mahesh is entitled
to a salary of Rs.12,000 p.a. and Ramesh is entitled to get a commission
of 10% on the Net Profit before charging such commission. The Net
Profit of the firm before making the above adjustments was Rs.60,000
for the year ended 31st March, 2005.
Prepare the profit and loss appropriation account
22. Elavarasan and Amudharasan are partners with capitals of
Rs.1,50,000 and Rs.1,00,000 respectively on 1st April 2004. The
Trading Profit for the year ended 31st March, 2005 was
Rs.60,000. Interest on capital is to be allowed at 6% per annum.
Amudharasan entitled to a salary of Rs.15,000 per annum. The
drawings of the partners were Elavarasan Rs.15,000 and
Amudharasan Rs.10,000; The interest on drawings are Elavarasan
Rs.500 and Amudharasan Rs.250. Assuming that Elavarasan and
Amudharasan are equal partners. Prepare the Profit and Loss
Appropriation Account and the Capital Accounts as on 31st
March, 2005.
23. From the following information, calculate the value of goodwill at
three years’ purchase of super profit.
i) Average Capital employed in the business Rs.6,00,000.
ii) Net trading profits of the firm for the past three years were
Rs.1,07,600, Rs.90,700 and Rs.1,12,500.
iii) Rate of interest expected from capital having to the risk
involved is 12%.
iv) Fair remuneration to the partners for their service
Rs.12, 000 p.a.
24. Sridevi and Cynthia were partners sharing profit and loss in the
ratio of 3:2. They decided to admit Fathima into the partnership
and revalue their assets and liabilities as indicated here under:
(a) To bring into record investment of Rs. 18,000 which had not
so far been recorded in the books of the firm.
(b) To depreciate stock, furniture and machinery by Rs.18,000,
Rs.6,000 and Rs.30,000 respectively.
(c) To provide for workmen’s compensation of Rs.24,000.
Pass the necessary journal entries and show the revaluation account.
25. Kalavathi and Malathi are two partners sharing profits in the ratio
Of 4:3. Leelavathi is admitted for 1/3rd share of profits. Goodwill
Of the firm is to be valued at 2 years’ purchase of 3 years’ profits
Which have been Rs.44, 000 Rs. 56,000, Rs. 68,000. Give journal
Entries if:
(a) There is no goodwill in the books of the firm.
(b) The goodwill account appears at Rs. 28,000
(c) The goodwill already existing in the books is Rs. 1, 68,000
26. Ramu, Somu and Gopu were partners of a firm sharing profit and
losses in the ratio of 5:3:2. On 1st April 2005, Gopu wanted to
retire, they decided to revalue their firms’ assets and liabilities as
indicated below:
(a) Increase the value of premises by Rs.30,000.
(b) Depreciate stock, furniture and machinery by Rs.10,000,
Rs. 5,000 and Rs.23,000 respectively.
(c) Provide for an outstanding liability of Rs.2,000.
Pass journal entries and revaluation account in the books of the
firm to carryout the above decision of its partners.
27. Cholan Ltd., issued 1000 shares of Rs.100 each. Pass journal
entry in the following cases.
a) Shares are issued at par
b) Shares are issued at a premium of Rs. 20.
c) Shares are issued at a discount of Rs.10.
28. Banu Ltd. issued 5000 shares of Rs.10 each at par payable on
application Rs.3 per share, on allotment Rs.3 per share, on first call
Rs.2 per share & final call Rs.2. Mr.Raju was allotted 50 shares. Give
the necessary journal entry relating to forfeiture of shares in each of the
following alternative cases.
a) If Mr.Raju failed to pay first call money and his shares were
Forfeited.
b) If Mr.Raju failed to pay both the calls and his shares were
Forfeited.
29. The Directors of a Company after due notice forfeited 100 Shares
of Rs.10 each on which the final call money of Rs.3 was not paid.
Later these shares were reissued at Rs.8 per share. Pass entries.
30. A company forfeited 200 shares of Rs.10 each on which the first
Call money of Rs.3 and final call of Rs.2 per share were not received.
These shares were subsequently reissued at Rs.7 per share fully paid
Up. Pass journal entries for forfeiture and reissue.
31. Kanchana Ltd. forfeited 1000 shares of Rs.10 each issued at a
discount of 10% for non payment of first call Rs.2 and second call Rs.3
These shares were reissued to Mr.Arun upon a payment of
Rs.7,000 as fully paid.
32. The Directors of a company forfeited 100 equity shares of Rs.10
Each on which the first call of Rs.3 and final call of Rs.3 had not been
Paid. Of these 40 shares were reissued upon payment of Rs.300.
Journalise the transactions of forfeiture and reissue of shares.
33. Gani Ltd. forfeited 20 shares of Rs.10 each fully called up, held
by Santha for non-payment of final call of Rs.4 per share. These
shares were re-issued to Josephin for Rs.8 per share as fully paid
up. Give journal entries for the forfeiture and re-issue of shares
34. A Company forfeited 100 equity shares of Rs.100 each issued at
Premium of 10% (to be paid at the time of allotment) on which
First call money of Rs.30 per share and final call of Rs.20 were not
Received. These shares were forfeited and subsequently re-issued
at Rs.90 per share. Give necessary journal entries regarding
Forfeiture and re-issue of shares.
PART – D
(20 MARKS)
1. Sriram Ltd. issued 10,000 shares of Rs.100 each at Rs.120
payable as follows:
Rs. 25 on application;
Rs. 45 on allotment (including premium);
Rs. 20 on first Call; and
Rs. 30 on final Call.
9,000 shares were applied for and allotted. All money was received
With the exception of first and the final calls on 200 shares held by
Ram. These shares were forfeited. Give the Journal entries and
Important ledger Accounts.
2. Saraswathi Ltd. having an authorised capital of Rs.20,00,000 in
shares of Rs.100 each invited applications for 10,000 shares
payable as follows:
On Application Rs. 30
On Allotment Rs. 20
On First Call Rs. 25
On Final Call Rs. 25
The company received applications for 12,000 shares. Applictions
for 10,000 shares were accepted in full and the money on 2000
applications rejected was returned.
All money due as stated above was received with the exception
of the final call of 250 shares. Half of these shares were forfeited
and re-issued as fully paid at Rs.90 per share. Pass necessary
journal entries.
3. Surya Ltd. issued 50,000 equity shares of Rs.10 each at premium
of 10% payable as under:
on application Rs.3
on allotment Rs.5 (including premium)
on first and final call Rs.3
The whole of the issue was called for by the company and all the
money were duly received except call money on 500 shares. These
shares were, therefore, forfeited and later on re-issued at Rs.9 per
share as fully paid.
4. Priya, Sudha and Vidya were partners of a firm sharing profits
and losses in proportion to their capitals. Their balance sheet as
on 31st December 2004 stood as under:
Liabilities Rs. Assets Rs.
Creditors 21,000 Cash at Bank 16,000
Reserve fund 48,000 Debtors 20,000
Capital accounts Less: Provision for
Priya : 90,000 doubtful debts 1,000 19,000
Sudha : 60,000 Stock 18,000
Vidya : 30,000 1,80,000 Machinery 48,000
Land and Building 1,00,000
Goodwill 48,000
2,49,000 2,49,000
On 1st January, 2005, Sudha retired from the firm on the following
terms:
(a) Goodwill of the firm was estimated at Rs.36,000.
(b) The land and building was appreciated by 10%
(c) Provision for doubtful debts was reduced by Rs.600.
(d) Out of the amount of insurance which was debited entirely to
profit and loss account, Rs.2,000 be carried forward for
unexpired insurance.
(e) A provision of Rs.3,000 was made in respect of an
outstanding bill for repairs.
Show revaluation account, Capital accounts and the balance sheet
of the reconstituted partnership
5. A and B were partners sharing profit and losses in the ratio of 3:2.
Their Balance sheet as on 31st December, 2001 is as under:
Liabilities Rs. Assets Rs.
Capital: Land & Buildings 40,000
A 30,000 Plant & Machinery 10,000
B 25,000 55,000 Investments 10,000
Reserve fund 10,000 Stock 11,000
Sundry Creditors 16,000 Profit & Loss Account 10,000
Bills payable 6,800 Sundry Debtor 5,000
Less: Provision for
doubtful debts 200 4,800
Cash 2,000
87,800 87,800
They decided to admit C into the partnership with effect from 1st January, 2002.
i) That C shall bring as a capital of Rs.20,000 for 1/3rd Profits.
ii) That goodwill of the firm was valued at Rs.36,000.
iii) Land was to be revalued at Rs.45,000 and investments at Rs.25,000.
iv) Stock was to be written down by Rs.2,000.
v) That provision for doubtful debts was to be increased to Rs.300.
vi) Creditors include Rs.500 no longer payable and this sum was to be written off.
Pass journal entries to carry out the above terms of admission.
Also show Revaluation account, Capital accounts of partners and
the Balance Sheet of the reconstituted partnership.
6. Set out below is the balance sheet of Narayanan and Perumal
sharing profits and losses equally as at 1st April, 2005.
Liabilities Rs. Assets Rs.
Sundry creditors 24,000 Cash in Hand 2,000
Capital Accounts: Cash at Bank 19,000
Narayanan : 60,000 Sundry Debtors 12,000
Perumal : 60,000 1,20,000 Less: Provision
for doubtful debts 1,000 11,000
Furniture 8,000
Buildings 80,000
Stock 24,000
1,44,000 1,44,000
On that date they admit Palani into the firm subject to the following
terms of revaluation.
(a) Stock and furniture are to be reduced in value by 10%.
(b) Building are to be appreciated by Rs.15,000
(c) A Provision for doubtful debts to be increased to Rs.1,500.
Prepare the revaluation account, capital accounts and the Balance
Sheet after the above adjustment.
7. The following are the balances extracted from the books of
Mrs.Suguna as on 31st March, 2004.
Debit Balances Rs. Credit Balances Rs.
Drawings 40,000 Capital 2,00,000
Cash at Bank 17,000 Sales 1,60,000
Cash in hand 60,000 Sundry Creditors 45,000
Wages 10,000
Purchases 20,000
Stock (31.03.03) 60,000
Buildings 1,00,000
Sundry debtors 44,000
Bills Receivable 29,000
Rent 4,500
Commission 2,500
General Expenses 8,000
Furniture 5,000
Suspense Account 5,000
4,05,000 4,05,000
Adjustments:
1. Closing Stock Rs.40,000 valued as on 31.03.04.
2. Interest on Capital at 6% to be provided.
3. Interest on Drawings at 5% to be provided.
4. Depreciate buildings at the rate of 10% per annum.
5. Write off Bad debts Rs.1,000.
6. Wages yet to be paid Rs.500
Prepare Trading and Profit & Loss Account and Balance Sheet
as on 31st March 2004.
8. The following balances have been extracted from the books of
Mrs.Padma as on 31st March, 2002.
Debit Balances Rs. Credit Balances Rs.
Furniture 30,000 Capital 2,00,000
Cash in Hand 8,000 Commission 14,000
Opening Stock 1,00,000 Sales 6,00,000
Purchases 3,20,000 Creditors 1,00,000
Investments @10% 20,000 Interest 1,500
Drawings 60,000
Bad debts 12,000
Salaries 60,000
Carriage inwards 20,000
Insurance 12,000
Rent 26,000
Debtors 1,80,000
Advertising 40,000
Printing & Stationery 12,000
General Expenses 15,500
9,15,500 9,15,500
The following adjustments are to be made:
1. Closing stock was valued at Rs.80,000.
2. Provide for accrued interest on investments Rs.500.
3. Commission received in advance Rs.4,000.
4. A provision for Bad and Doubtful Debts is to be created to
The extent of 5% on Sundry Debtors.
5. A provision for discount on Sundry creditors is to be created
To the extent of 2% on Sundry creditors..
9. Mr.James commenced business on 1.4.2004 with a Capital of
Rs.75, 000. He immediately bought furniture for Rs.12,000. During
the year, he borrowed Rs.15,000 from his wife as loan. He has
Withdrawn Rs.21, 600 for his family expenses. From the following
Particulars you are required to prepare Trading and Profit & Loss A/c
And Balance Sheet as on 31.3.2005.
Rs.
Cash received from Sundry debtors 1, 21,000
Cash paid to Sundry creditors 1, 75,000
Cash Sales 1, 00,000
Cash Purchases 40,000
Carriage inwards 4,500
Discount allowed to Sundry debtors 4,000
Salaries 5,000
Office Expenses 4,000
Advertisement 5,000
Closing balance of Sundry debtors 75,000
Closing balance of Sundry creditors 50,000
Closing Stock 35,000
Closing cash balance 43,900
Provide 10% depreciation on furniture’s
10. From the following details, prepare Trading and Profit & Loss
Account for the period ended 31.3.2004 and a Balance sheet on that
date.
As on 1.4.2003 As on 31.3.2004
Stock 50,000 25,000
Sundry Debtors 1,25,000 1,75,000
Cash 12,500 20,000
Furniture 5,000 5,000
Sundry Creditors 75,000 87,500
Other Details:
Rs.
Drawings 20,000
Discount received 7,500
Discount allowed 5,000
Sundry expenses 17,500
Cash paid to creditors 2,25,000
Cash received from debtors 2,67,500
Sales return 7,500
Purchase return 2,500
Cash sales 2,500
11. Mr.Kannan started business with Rs.2,62,500 on 1.4.2003. He
bought furniture for Rs.42,000. He borrowed Rs.52,500 from
bank. He had withdrawn for personal expenses Rs.75,600. From
the details given below prepare Trading and Profit and Loss account
and Balance Sheet on 31.4.2004.
Rs.
Credit sales 7,00,000
Cash sales 3,50,000
Credit purchases 7,87,500
Cash purchases 1,40,000
Wages 15,750
Discount allowed 3,500
Salaries 17,500
Business expenses 14,000
Advertisement 17,500
Closing Sundry debtors 2,62,500
Closing Sundry creditors 1,75,000
Closing stock 1,22,500
Closing cash balance 1,64,150
Depreciation to be provided on furniture @ 10
12. Mrs.Pramila maintained her account books on single entry system.
From the following information available in her records, prepare
Trading, Profit and Loss account for the year ending 31.3.2003
and a Balance Sheet as on that date, depreciating machinery at
10% per annum.
Cash Book
Receipts Rs . Payments Rs.
To Balance b/d 16,000 By (Cash) Purchases 28,000
To (Cash) Sales 80,000 By Sundry Creditors 40,000
To Sundry Debtors 60,000 By General Expenses 12,000
By Wages 4,000
By Drawings 16,000
By Balance c/d 56,000
1,56,000 1,56,000
Other Information:
31.3.2002 31.3.2003
Rs. Rs.
Sundry Debtors 18,000 ????
Sundry Creditors 28,800 ????
Stock 20,000 32,000
Machinery 80,000 80,000
Furniture 6,000 6,000
Additional information:
Discount allowed 2,800
Discount received 3,400
Credit Sales 68,800
Credit purchases 28,200
13. From the following details calculate
1. Gross Profit Ratio
2. Net Profit Ratio
3. Stock Turnover Ratio
4. Debtors Turnover Ratio
Rs.
Sales 1,50,000
Cost of Goods Sold 1,20,000
Opening Stock 29,000
Closing Stock 31,000
Debtors 15,000
Administration Expenses 15,000
14. From the following Profit and Loss Account of a company,
ascertain the following ratios.
1. Gross Profit Ratio
2. Net Profit Ratio
3. Operating Ratio
4. Operating Profit Ratio
5. Stock Turnover Ratio
Trading and Profit & Loss Account forDr the year ending 31.3.2005 Cr
Particulars Rs Particulars Rs.
To Opening Stock 10,000 By Sales 56,000
To Purchase 44,000 By Closing stock 10,000
To Gross Profit 20,100
66,000 66,000
To Administration
Expenses 2,000 By Gross Profit 20,100
To Selling expenses 8,900 By Dividend 1,000
To Interest 3,000 By Profit on sale
To Net Profit 8,000 of investments 800
21,900 21,900
15. From the following, calculate Profitability ratios.
Trading & Profit and Loss of Ambika & Co. for the year ending 31.3.2004
Particulars Rs. Particulars Rs.
To Opening Stock 1,99,000 By Sales 17,00,000
To Purchase 11,19,000 By Closing stock 2,98,000
To Gross Profit 6,80,000
19,98,000 19,98,000
To Administration
Expenses 3,00,000 By Gross Profit 6,80,000
To Selling expenses 60,000 By Interest 18,000
To Financial expenses 30,000
To Loss on sale of Plant 8,000
To Net Profit 3,00,000
6,98,000 6,98,000
16. Prepare a cash budget for the months – March, April and May
2005 from the following information
Month
|
Credit sale
Rs
|
Credit purchase
Rs
|
Wages
Rs
|
Misc
Expenses
Rs
|
Office
Expenses
Rs
|
January
|
60000
|
36000
|
9000
|
2000
|
4000
|
February
|
82000
|
38000
|
8000
|
1500
|
3000
|
March
|
84000
|
33000
|
10000
|
2500
|
4500
|
April
|
78000
|
35000
|
8500
|
2000
|
3500
|
May
|
56000
|
39000
|
9500
|
1000
|
4000
|
Additional information:
1) Opening cash balance Rs.8, 000.
2) Period of credit allowed to customers one month
3) Period of credit allowed by suppliers two months.
4) Wages and miscellaneous expenses are payable in the same month.
5) Lag in payment of office expenses is one month
17. Prepare a Cash Budget of Rama Ltd., for the months of January
to March 2004 from the following information:
Credit Purchases Credit Sales Expenses
Rs. Rs . Rs
2003
November 2, 00,000 2, 50,000 50,000
December 3, 50,000 3, 00,000 60,000
2004
January 3, 00,000 4, 50,000 70,000
February 4, 00,000 2, 00,000 80,000
March 5, 00,000 3, 50,000 70,000
Additional Information:
i) Expected cash balance as on 1.1.2004 Rs.75, 000
ii) Suppliers allowed credit of two months and a credit of two
Months is allowed to the customers
iii) Lag in payment of expenses one month.
iv) Sale of fixed assets in the month of February Rs. 95,000
18. Prepare a cash budget for October, November and December
2004 from the following information
Month Sales Purchases Expenses
Rs. Rs . Rs.
September 2004 10, 00,000 8, 00,000 1, 10,000
October 2004 12, 00,000 12, 00,000 1, 30,000
November 2004 14, 00,000 8, 00,000 1, 50,000
December 2004 16, 00,000 10, 00,000 1, 70,000
1. All sales are for cash.
2. The period of credit allowed by the suppliers is one month.
3. Lag in payment of expenses is one month.
4. Opening balance of cash on 1.10.04 is Rs.90, 000.
5. In December, an asset for Rs.4, 00,000 is to be purchased.
