Q1. Answer any four of the following. (20 marks)
A. Answer the following. (5)
1. What is dishonour of bill?
2. What is the fixed instalment method of depreciation?
3. What does a credit balance on the Joint Venture Account show?
4. What is an average profit?
5. What do you mean by statement of Affairs?
B. Write word/term/phrase which can substitute each of the followings: (5)
1. A partnership for specific purpose and for temporary period.
2. List of debit and credit balances of the ledger accounts.
3. A person who accepts the bill.
4. Written agreement among the partners.
5. The balance which cannot be recovered from the debtors.
C. Match the pairs. (5)
| Group A | Group B |
| a. Limited liability b. Surplus c. Temporary partner d. Retirement of a bill e. Deficit f. Does not take active part in the business g. Account showing the net profit / net loss h. Power and Fuel / Gross profit. |
D. Select the most appropriate alternative from those given below: (5)
1. The interest on capital of a partner is _______ to profit & loss account.
a. Credited
b. Added
c. Debited
d. Divided
2. If fixed capital method is adopted, Net profit is transferred to _______ account of the partner.
e. Current
f. Capital
g. Balance sheet
h. Trading
3. Not for profit organisation prepares _________ to find out its financial position.
i. Balance sheet
j. Receipts & payments accounts.
k. Trading account
l. Income & Expenditure account.
4. Wages paid for Installation of Machinery should be debited to the ____________ account.
m. Installation
n. Wages
o. Salaries
p. Machinery.
5. There are ___________Parties to a bill of exchange.
q. Four
r. Three
s. Two
t. One.
E. State True / False with reasons. (Any Two) (5)
- Under fixed capital method for each partner two accounts are maintained.
- Under fixed instalment method depreciation is charged on the diminishing value of the asset.
- Interest on partner’s drawings is debited to Profit and loss appropriation account.
F. Prepare a bill of exchange from the following information: (5)
1. Drawer : Mrs. Archana Patil, Vikram Nagar, Patan.
2. Drawee : Mrs. Nalini Maniyar, Jalaram Krupa, Mulund.
3. Payee : Mrs. Sugandhi Ghatkar, Mangala Yog, CIDCO, Aurangabad.
4. Amount : Rs. 17,575.
5. Period : 60 days.
6. Date of Bill : 28th December, 2007.
7. Accepted on : 2nd January, 2008.
8. Accepted for : 90 days.
Q2. M/s. Deepali International bought furniture worth Rs. 24,000 on 1 – 4 – 1977 and additional furniture on 1 – 10 – 1977 worth Rs. 16,000. They charged depreciation at 15% p.a. on Fixed Instalment basis. On 1 – 10 – 1979 they sold out one cupboard for Rs. 2,200 original cost of which on 1-4-1977 was 4,000. On the same date a new cupboard was purchased for Rs. 8,000. Show the furniture account and depreciation account for the year 1977-78, 1978-79 and 1979-80 assuming that the financial year closes on 31st March every year.
(10)
OR
The average net profit expected in the business by ABC firm is Rs, 36,000 per year. The average capital employed in the business by the firm is Rs, 2, 00,000. The Rate of interest expected from capital invested in the business is 10%. The remuneration of the partners is estimated to Rs, 6,000 P.a. Calculate the value of goodwill based on 2years purchase of super profit.
(5)
AND
Explain the importance of computer in modern age. (5)
Q3. Rupali accepted a bill for Rs. 2,000/- drawn by Deepali at three months. Deepali got the bill discounted with her bank for Rs. 1,900. Before the due date Rupali approached Deepali for renewal of the bill. Deepali agreed on the condition that Rs. 1,000/- be paid immediately together with interest on the remaining amount at 6% p.a. For balance Rupali should accept a new bill for three months. These arrangements were carried through but afterwards, Rupali become Insolvent and only 40 % of the amount could be recovered from her estate. Give journal entries in the books of Deepali.
(12)
OR
Journalize the following transactions in the books of Maharaja.
a. Ayub informs Maharaja that Sadashiv’s acceptance for Rs. 2,000 endorsed to Ayub has been dishonoured, noting charges amounted to Rs. 150
b. Pankaj renews his acceptance to Maharaja for Rs. 1200 by paying Rs. 400 in cash and accepting a fresh bill for the balance plus interest at 12% p.a. for 3 months.
c. Vaibhav’s acceptance to Maharaja for Rs. 6000 retired one month before the due date at a discount of 12%p.a.
d. Bank informs Maharaja as to the dishonour of Kasam’s acceptance for Rs. 2000 to Maharaja discounted with Bank noting charges Rs. 200.
(12)
Q4. Nagpurkar of Warud and Warudkar of Akola entered into joint venture to sent oranges to M/s Modern Fruit Co., Amrutsar on their Joint risks for sale. They decided to share profits and losses equally. Nagpurkar purchased oranges of Rs. 2,40,000and paid for transportation, packing and insurance Rs. 70,000. Warudkar purchased oranges of Rs. 3,70,000 and paid for transportation, packing and insurance Rs. 1,00,000. All the oranges were sold by M/s Modern Fruit Co. For Rs. 10,00,000 from which company deducted Rs. 25,000 for expenses and 5% commission on sale proceeds and remitted Rs. 5,00,000 to Warudkar and remaining amount to Nagpurkar. The co – ventures closed their venture and settled their accounts. Prepare Joint venture account, Warudkar account, M/s Modern Fruit co. Account in the books of Nagpurkar.
(12)
Q5. Mrs. Archana keeps her books on single entry system and gives the following information.
| Particulars | 31-3-2006 | 31-3-2007 |
| Cash at bank Sundry debtors Stock in trade Furniture Machinery Bills payable Sundry creditors | 5000 25000 30000 20000 60000 5000 15000 | 32000 40000 50000 20000 60000 5000 20000 |
Additional information
Mrs. Archana withdrew from business Rs. 15,000 for personal use.
She further introduced fresh capital of Rs. 25,000. Depreciation is to be charged @10% p.a. on Furniture and Machinery.
Prepare: (i) Statement of Affairs as on 31-3-2006
(ii) Statement of Affairs as on 31-3-2007
(iii) Statement of profit or loss for the year ending 31-3-2007.
(10)
6. From the following balance Sheet and Receipts and Payments account of Nanavati Hospital, Bombay, prepare Income and Expenditure account for the year ending on 31st March, 2007 and the Balance sheet as on that date.
Balance Sheet as on 1st April, 2006
| Liabilities | Amount | Assets | Amount |
| Salaries Unpaid Medicines Bill Unpaid Capital Fund | 2000 1500 383000 | Cash Securities Furniture Land and Buildings Equipments Subscription Due Interest Accrued | 11000 150000 4000 200000 15000 5000 1500 |
| 386500 | 386500 |
Receipts and Payment Account
| Receipts | Amount | Payments | Amount |
| Cash To subscription Interest (Rs. 1500/- last year) Donations(Revenue) Life Membership Fee | 11000 30000 5000 4300 10000 | Furniture purchased on 1-4-2006 Salaries including Rs. 2000/- of last year. Equipment purchased on 1-4-06 Dispensary expenses Medicines Taxes Cash | 1900 2300 7500 4700 5500 500 17200 |
| 60300 | 60300 |
Adjustments.
1. Capitalise the amount of life membership fees.
2. Interest earned but not received Rs. 1,000/-
3. Subscription include Rs.1000/- for 2008 and outstanding subscription for 31st march, 2007 is 4,200
4. Unpaid salary for the year 2007 is Rs. 2500/-
5. Provide for depreciation on furniture 10%, Land and Building 5%, Equipments 20%.
6. Prepaid taxes Rs. 100/-
Q7. Given below is the Trial Balance of M/s Radha and Krishna on 31st March, 2004. Partners share profit & losses in the ratio of 3:2 respectively. From the following trial balance and additional information, prepare a Trading & Profit & Loss account for the year ended 31st March, 2004 and a Balance sheet as on that date.
(20)
Trial Balance as on 31st March, 2004.
| Particulars(Debit) | Amount | Particulars(Credit) | Amount |
| Partner's Current A/c | Partners Capital Account | ||
| Radha | 16000 | Radha | 80000 |
| Partner's Drawings | Krishna | 50000 | |
| Radha | 15000 | Partners Current Account | |
| Krishna | 10000 | Krishna | 10000 |
| Purchases | 120000 | Sales | 365000 |
| Returns | 2500 | Returns | 3500 |
| Debtors | 65000 | Creditors | 10000 |
| Furniture | 50000 | RDD | 2000 |
| Premises | 160000 | Provident fund | 65000 |
| Bad debts | 7500 | Interest on P.F. Investment | 6000 |
| Discount | 5000 | Outstanding Salaries & Wages | 6500 |
| Provident Fund Contribution | 15000 | General Reserve | 45003 |
| Provident Fund Investment | 60000 | ||
| Salaries & Wages | 15003 | ||
| Opening Stock | 80000 | ||
| Cash in hand | 18000 | ||
| Royalties | 4000 | ||
| | 643003 | | 643003 |
Adjustments:
1. The closing stock was valued at marked price Rs. 90,000 which is 20% above cost.
2. Write off bad debts Rs. 1500 and make a provision for doubtful debts @5% on debtors.
3. Provide 2% Reserve for discount on debtors and creditors.
4. Depreciate Furniture @ 15% and Premises @ 20%.
5. Interest on capital is allowed @ 10% p.a. and interest on drawings be charged @ 15% p.a.
6. Radha is entitled to receive rent for her premises at Rs. 300 p.m. where business is carried out and Krishna is to be given 5% commission on ‘Gross Profit’.