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Question Paper

Foundation Accounting Duration: 75

Details: Test – 7 (CH-7) Marks: 40

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Q-1 From the following Trial Balance of M/s BJ & Sons, prepare the final accounts for the
year ended on 31st March 2022, and also the Balance sheet as on that date:

Particulars Debit (Rs.) Credit (Rs.)

Stock as on 01.04.2021: Finished goods 2,00,000

Purchases and Sales 22,00,000 35,00,000

Bills receivables 50,000

Returns 1,00,000 50,000

Carriage Inwards 50,000

Debtors and Creditors 2,00,000 4,00,000

Carriage Outwards 40,000

Discounts 5,000 5,000

Salaries and wages 2,20,000

Insurance 60,000

Rent 60,000

Wages and salaries 80,000

Bad debts 10,000

Furniture 4,00,000

BJ’s capital 5,00,000

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BJ’s drawing 70,000

Loose tools 1,00,000

Printing & stationery 30,000

Advertising 50,000

Cash in hand 45,000

Cash at bank 2,00,000

Petty Cash 5,000

Machinery 3,00,000

Commission 10,000 30,000

Total 44,85,000 44,85,000

Adjustments:

(i) Finished goods stock: Stock on 31st March was valued at Cost price Rs. 4,20,000 and
Market price Rs. 400,000.

(ii) Depreciate furniture @ 10% p.a. and machinery @ 20% p.a. on reducing balance
method.

(iii) Rent of Rs. 5,000 was paid in advance.

(iv) Salaries & wages due but not paid Rs. 30,000

(v) Make a provision for doubtful debts @ 5% on debtors.

(vi) Commission receivable Rs. 5,000.

(10 Marks)

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Q-2 Mr. O maintains his accounts on Mercantile basis. The following Trial Balance has been
prepared from his books as at 31st March, 2022 after making necessary adjustments for
outstanding and accrued items as well as depreciation:

Trial Balance

as at 31st March, 2022

Particulars Debit (Rs.) Credit (Rs.)

Plant and Machinery 2,12,500

Sundry Creditors 2,64,000

Sales 6,50,000

Purchases 4,20,000

Salaries 40,000

Prepaid Insurance 370

Advance Rent 2,000

Outstanding Salary 6,000

Advance Salary 2,500

Electricity Charges 2,650

Furniture and Fixtures 72,000

Opening Stock (01.04.2021) 50,000

Outstanding Electricity Charges 450

Insurance 1,200

Rent 10,000

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Miscellaneous Expenses 14,000

Cash in Hand 3,000

Investments 80,000

Drawings 24,000

Dividend from Investments 8,000

Accrued Dividend from Investments 1,500

Depreciation on Plant and Machinery 37,500

Depreciation on Furniture 8,000

Capital Account 2,11,970

Telephone Charges 6,000

Sundry Debtors 1,70,500

Stationery and Printing 1,200

Cash at Bank 65,000

Interest on Loan 8,000

Interest Due but Not Paid on Loan 1,500

Loan Account 90,000

12,31,920 12,31,920

Additional Information:

(i) Salaries include Rs. 10,000 towards renovation of Proprietor’s residence.

(ii) Closing Stock amounted to Rs. 75,000.

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Mr. O, however, request you to prepare a Trading and Profit & Loss Account for the year
ended 31st March, 2022 and a Balance Sheet as on that date following cash basis of
accounting.

(10 Marks)

Q-3 The following is the trial balance of Prakesh as at 31st December, 2022:

Prakesh’s capital account 3,83,450

Stock 1st January, 2022 2,34,000 -

Sales - 19,48,000

Returns inward 43,000 -

Purchases 16,08,500 -

Returns outward - 29,000

Carriage inwards 98,000 -

Rent & taxes 23,500 -

Salaries & wages 46,500 -

Sundry debtors 1,20,000 -

Sundry creditors - 74,000

Bank loan @ 14% p.a. - 1,00,000

Bank interest 5,500 -

Printing and stationary expenses 72,000 -

Bank balance 40,000 -

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Discount earned - 22,200

Furniture & fittings 25,000 -

Discount allowed 9,000 -

General expenses 57,250 -

Insurance 6,500 -

Postage & telegram expenses 11,650 -

Cash balance 1,900 -

Travelling expenses 4,350 -

Drawings 1,50,000 -

25,56,650 25,56,650

The following adjustments are to be made:

(1) Included amongst the debtors is Rs. 15,000 due from Ravi and included among the
creditors Rs. 5,000 due to him.

(2) Provision for bad and doubtful debts be created at 5% and for discount @ 2% on sundry
debtors.

(3) Depreciation on furniture & fittings @ 10% shall be written off.

(4) Personal purchases of Prakash amounting to Rs. 3,000 had been recorded in the
purchases day book.

(5) Interest on bank loan shall be provided for the whole year.

(6) A quarter of the amount of printing and stationary expenses is to be carried forward to
the next year.

(7) Credit purchase invoice amounting to Rs. 2,000 had been omitted from the books.

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(8) Stock on 31.12.2022 was Rs. 3,93,000.

Prepare (i) Trading & profit and loss account for the year ended 31.12.2022 and (ii) Balance
sheet as on 31st December, 2022.

(8 Marks)

Q-4 The following are the balances extracted from the books of Shri Shrinivas as on
31.03.2023, who carries on business under the name and style of M/s Shrinivas and
Associates at Chennai:

Capital A/c 14,11,400

Purchases 12,00,000

Purchase Returns 18,000

Sales 15,00,000

Sales Returns 24,000

Freight Inwards 62,000

Carriage Outwards 8,500

Rent of Godown 55,000

Rates and Taxes 24,000

Salaries 72,000

Discount allowed 7,500

Discount received 12,000

Drawings 20,000

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Printing and Stationery 6,000

Insurance premium 48,000

Electricity charges 14,000

General expenses 11,000

Bank charges 3,800

Bad debts 12,200

Repairs the Motor vehicle 13,000

Interest on loan 4,400

Provision for Bad-debts 10,000

Loan from Mr. Rajan 60,000

Sundry creditors 62,000

Motor vehicles 1,00,000

Land and Buildings 5,00,000

Office equipment 2,00,000

Furniture and Fixtures 50,000

Stock as on 31.03.2022 3,20,000

Sundry debtors 2,80,000

Cash at Bank 22,000

Cash in Hand 16,000

Total 30,73,400 30,73,400

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Prepare Trading and Profit and Loss Account for the year ended 31.03.2023 and the Balance
Sheet as at that date after making provision for the following:

(a) Depreciate Building by 5%, Furniture and Fixtures by 10%, Office Equipment by 15% and
Motor Car by 20%.

(b) Value of stock at the close of the year was Rs. 4,10,000.

(c) One month rent for godown is outstanding.

(d) Interest on loan from Rajan is payable @ 10% per annum. This loan was taken on
01.07.2022

(e) Reserve for bad debts is to be maintained at 5% of Sundry debtors.

(f) Insurance premium includes Rs. 42,000 paid towards proprietor's life insurance policy
and the balance of the insurance charges cover the period from 01.04.2022 to 30.06.2023.

(12 Marks)

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