Q1. Answer any four of the following. (20 marks)
A. 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?
B. Write word/term/phrase which can substitute each of the followings: (5)
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.
C. Match the pairs. (5)
| Group A | Group B |
| 1. Not for profit concerns 2. Fixed capital method. 3. Unexpired expenses 4. Temporary Partnership 5. Pure Single Entry System |
|
D. Select the most appropriate alternative from those given below: (5)
1. Reserve for discount on ______________ has a debit balance.
a. Debtors
b. Creditors
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 _________
a. Note
b. Draft
c. Hundi
d. Request.
4. Valuation of goodwill depends upon ________ capacity of business.
a. Normal
b. Repaying
c. Earning
d. Capital
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
b. Consignment
c. Partnership
d. Stock exchange
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)
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
Q2. Kamlesh bought the machine costing Rs. 11,000/ - on 1st January, 1977. He had to pay Rs. 1,000/- towards its installation. He writes off depreciation @ 10% of the original cost every year. His books are closed on 31st December every year. On 1st July, 1979 he disposed off the machine for Rs. 6,000/- Give journal entries in the books of Kamlesh for all these years till 31st December, 1979.
(10)
OR
M/s Vijay trading company earned net profit during the last four years was follows.
| 1st Yea r | Rs, 57,000 |
| 2nd Year | Rs, 44,000 |
| 3rd Year | Rs, 61,000 |
| 4th Year | Rs, 58,000 |
The capital investment made by the company is Rs, 1, 50,000. Normal Rate of return on capital is 20%. The remuneration of the partners during this period is Rs, 500 p.m. Good will is valued at 2years purchase of Average Super profit of above mentioned period.
(5)
AND
Write short note on “Fourth Generation of Computers (5)
Q3. Archana purchased goods from Babita on Credit for Rs. 20,000. On next day Archana paid Rs. 10,000 to Babita and accepted a bill drawn by Babita for the balance amount for four months. Babita discounted the bill with her bank for Rs. 9600/- Before the due date Archana approached Babita with a request to renew the Bill Babita agreed with the condition that Archana should pay Rs. 6000 with interest of Rs. 120 and accept a new bill for the balance. The arrangement was duly carried out. New bill is met on the due date. Pass journal entries in the books of Babita.
(12)
OR
Journalise the following transactions in the books of Mr. Ashok Agrawal.
a. The bank informed Mr. Ashok Agrawal that Kamlesh’s acceptance for Rs. 12,000 sent to bank for collection had been honoured and bank charges debited were Rs. 60.
b. Discharged Dr. Ashok Agrawal’s acceptance to Mahesh for Rs. 15,250 by endorsing Prakash’s acceptance to Mr. Ashok Agrawal for Rs. 15,100.
c. Vishal renewed his acceptance to Mr. Ashok AGrawal for Rs. 11,200 by paying Rs. 6000 in cash and accepting a fresh bill for the balance plus interest @ 12% p.a. for three months.
d. Dinesh who had accepted Mr. Ashok Agrawal’s bill of Rs. 14,000 was declared bankrupt and only 45% of the amount due could be recovered from his estate.
(12)
Q4. Manoj and Ambalal enter into a joint venture to prepare a building for the government, who agrees to pay Rs. 2,00,000. A Bank Account is opened in their joint names; Manoj contributing Rs. 25,000 and Ambalal Rs. 25,000 and it is agreed that they will share the profit and losses in the proportion of 2/5th and 3/5th respectively.
Payment made out of the Joint Bank accounts were:
Purchases of Equipments : Rs. 14,000
Hire Purchases of Equipments : Rs. 13,000
Wages : Rs. 85,000
Purchases of Materials : Rs. 18,000
Office expenses : Rs. 8,000
Manoj and Ambalal then paid Rs. 5, 000 and Rs. 3,000 respectively for other expenses. The building was completed the government paid the amount by cheque and the joint venture was closed. Ambalal taking up the equipments at Rs. 4,000 and Manoj taking up the unused material at Rs. 2, 000. Prepare Joint Venture A/c, Joint Bank A/c and Co-Venture’s A/c.
(12)
Q5. Mr. Suryakant maintains books on single entry and who gives you the following information.
| Particulars | 31-3-2006 | 31-3-2007 |
| Cash in hand Cash at bank Stock Sundry debtors Investments Furniture Machinery Sundry creditors Outstanding expenses | 500 2500 20000 25000 20000 10000 25000 10000 3000 | 2000 5000 30000 40000 20000 25000 40000 10000 2000 |
Additional information
1. Mr. Suryakant introduced further capital of Rs. 20000 on 1st July, 2006 and had withdrawn Rs. 10,000 during the year.
2. Interest on capital is allowed at 10% p.a.
3. Additions to furniture and machinery were made on 1st October, 2006
4. Write of deprecation on furniture and machinery at 10% p.a.
5. Create reserve for doubtful debts at 5% on sundry debtors.
6. Prepare: a. Statement of affairs. B. Statement of profit and loss for the year ended 31st March, 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 37900 |
| 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. Ram and Sham are partners sharing Profits & Losses in the ratio of 2:3. Their trial balance as on 31st March, 2005 is given below. You are required to prepare Trading A/c and Profit & Loss A/c for the year ending 31st March, 2005 and a Balance sheet as on that date after taking into account the given adjustments.
(20)
Trial Balance as on 31st March, 2005
| Particulars | Amounts | Particulars | Amounts |
| Purchases Patent rights Buildings Stock(1-4-2004) Printing & Stationery Sundry Debtors Wages & Salaries Audit Fees Sundry Expenses Furniture 10% investment (purchased on 1-10-2004) Cash Provident fund contribution Carriage inward General 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: Ram Sham Provident Fund Creditors Bank Loan Sales Reserve for doubtful debts Purchase Returns. | 30000 40000 7000 45000 12000 158000 250 3500 |
| 295750 | 295750 |
Adjustments
1. Closing stock is valued at Rs. 18, 000 which is 20% above the cost price.
2. On 31st March, 2005 the stock of stationery was Rs. 500.
3. Reserve for bad and doubtful debts at 5% on debtors.
4. Depreciate building at 5% and Patents at 10%
5. Interest on capital is to be allowed @5%.
6. Goods worth Rs. 10, 000 were destroyed by fire. The insurance company admitted a claim for Rs. 8, 000/-.