INDIAN INSTITUTE OF MANAGEMENT INDORE

Page 1 of 6

MODEL ANSWER PAPER OF MAC-1-MID-TERM EXAM

MILTON PETROLEUM COMPANY (TOTAL: 240 MARKS)
(A) BALANCE SHEET AS ON 1st JULY, 2005 (13 MARKS)
ASSETS
Gross Block
Cash
Accounts Receivable
Inventory
Prepaid Rent

AMOUNT $
6,000
5,000
1,000
4,000
1,200

TOTAL

17,200

LIABILITIES
Share Capital
Retained Earnings
Salaries Payable
Dividend Payable
Accumulated Depreciation
Accounts Payable
TOTAL

AMOUNT $
7,500
3,500
500
200
2,500
3,000
17,200

(B) JOURNAL ENTRIES (62 MARKS)

S. No
1(a)
1(b)
1(c)
1(d)
1(e)
1(f)
1(g)

4(a)
4(b)
4(c)

6(a)

Particulars

Mark

Debit $
40,000

Purchases a/c Dr.

Accounts Payable a/c Cr.
Repairs a/c Dr.
Accounts Payable a/c Cr.
Office Supplies & Postal a/c Dr.
Accounts Payable a/c Cr.
Gasoline & Oil a/c Dr.
Accounts Payable a/c Cr.
Gross Block a/c Dr.
Accounts Payable a/c Cr.
Telephone, Electricity and Other Expenses a/c Dr.
Accounts Payable a/c Cr.
Maintenance a/c Dr.
Accounts Payable a/c Cr.

1
1
1
1
1
1
1
1
1
1
1
1
1
1

Accounts Receivable a/c Dr

Sales a/c Cr.

1
1

50,000

Accounts Receivable a/c Dr.

Maintenance Services a/c Cr.

1
1

5,000

Salaries a/c Dr.

Salaries Payable a/c Cr.
Salaries a/c Dr.
Salaries Payable a/c Cr.
Salaries a/c Dr.
Salaries Payable a/c Cr.

1
1
1
1
1
1

3,000

Dividends a/c Dr.

Dividends Payable a/c Cr.

1
1

2,000

Accounts Payable a/c Dr.

Cash a/c Cr.

1
1

41,500

Credit $
40,000

500
500
250
250
1,500
1,500
1,000
1,000
300
300
400
400

50,000

5,000

3,000
2,200
2,200
4,800
4,800

2,000

MODEL ANSWER PAPER OF MAC -I -MID-TERM EXAMINATION BY PROF. V. K. GUPTA

41,500

INDIAN INSTITUTE OF MANAGEMENT INDORE

6(b)
6(c)
6(d)
6(e)
6(f)

7(a)
7(b)

10(a)
10(b)

11

12

13(a)
13(b)
13(c)

14

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Salaries Payable a/c Dr.

Cash a/c Cr.
Rent a/c Dr.
Cash a/c Cr.
Prepaid Rent a/c Dr.
Rent a/c Cr.
Rent a/c Dr.
Prepaid Rent Cr.
Dividends Payable a/c Dr.
Cash a/c Cr.

1
1
1
1
1
1
1
1
1
1

10,300

Cash a/c Dr
Profit on Sale of Truck a/c Cr.
Accumulated Depreciation a/c Dr.
Gross Block a/c Cr.

1
1
1
1

150

Cash a/c Dr.

Accounts Receivable a/c Cr.

1
1

54,000

Cash a/c Dr.

Share Capital a/c Cr.

1
1

1,800

Sales Promotion Campaign Expenses Dr.

Cash Cr.
Deferred Sales Promotion Campaign Expenses Dr.
Sales Promotion Campaign Expenses Cr.

1
1
1
1

1,000

Depreciation a/c Dr.

Accumulated Depreciation a/c Cr.

1
1

1,200

Provision for Bad Debts a/c Dr.

Accounts Receivable a/c Cr.

1
1

100

Purchases a/c Dr.

Inventory a/c Cr.
Inventory a/c Dr.
Purchases a/c Cr.
Cost of Fuel Oil Consumed Dr.
Purchases Cr.

1
1
1
1
1
1

4,000

Income-Tax a/c Dr.

Income-Tax Payable a/c Cr.

1
1

10,300
2,700
2,700
1,350
1,350
1,200
1,200
2,200
2,200

150
800
800

54,000

1,800

1,000
750
750

1,200

100

4,000
9,000
9,000
35,000
35,000
450

MODEL ANSWER PAPER OF MAC -I -MID-TERM EXAMINATION BY PROF. V. K. GUPTA

450

INDIAN INSTITUTE OF MANAGEMENT INDORE

Page 3 of 6

(C) T ACCOUNTS (101 MARKS)

Cash Account (10 Marks)
$
Balance b/d
5,000 Accounts Payable a/c
Accounts Receivable a/c
54,000 Salaries Payable a/c
Profit on Sale of Truck a/c
150 Rent a/c
Share Capital a/c
1,800 Dividends Payable a/c
Sales Promotion Campaign Expenses
a/c
Balance c/d
60,950
Accounts Receivable Account (6 Marks)
Balance b/d
1,000 Cash a/c
Sales a/c
50,000 Provision for Bad Debts a/c
Maintenance Services a/c
5,000 Balance c/d
56,000
Accounts Payable Account (10 Marks)
Cash a/c
41,500 Balance b/d
Balance c/d
5,450 Purchases a/c
Gross Blocks a/c
Telephone, Electricity and Other
Expenses a/c
Gasoline & Oil a/c
Maintenance a/c
Office Supplies and Postage a/c
Repairs a/c
46,950
Gross Block Account (4 Marks)
Balance b/d
6,000 Accumulated Depreciation a/c
Acc. Payable a/c
1,000 Balance c/d
7,000
Prepaid Rent Account (4 Marks)
Balance b/d
1,200 Rent a/c
Rent a/c
1,350 Balance c/d
2,550
Accumulated Depreciation Account (4 Marks)
Equipment a/c
800 Balance b/d
Balance c/d
2,900 Depreciation a/c
3,700
Purchases Account (4 Marks)
Inventory
4,000 Cost of Fuel Consumed a/c
Accounts Payable a/c
40,000 Inventory
44,000
Dividends Payable Account (3 Marks)
Cash a/c
2,200 Balance b/d
Dividends a/c
2,200
Share Capital Account (3 Marks)
Balance c/d
9,300 Balance b/d
Cash a/c
9,300

$
41,500
10,300
2,700
2,200
1,000
3,250
60,950
54,000
100
1,900
56000
3,000
40,000
1,000
300
1,500
400
250
500
46,950
800
6,200
7,000
1,200
1,350
2,550
2,500
1,200
3,700
35,000
9,000
44,000
200
2,000
2,200
7,500
1,800
9,300

MODEL ANSWER PAPER OF MAC -I -MID-TERM EXAMINATION BY PROF. V. K. GUPTA

INDIAN INSTITUTE OF MANAGEMENT INDORE

Retained Earnings Account (2 Marks)

3,500 Balance b/d
3,500
Depreciation Account (2 Marks)
Accumulated Depreciation a/c
1,200 Balance c/d
1,200
Rent Account (4 Marks)
Prepaid Rent a/c
1,200 Prepaid Rent a/c
Cash a/c
2,700 Balance c/d
3900
Dividends Account (2 Marks)
Dividends Payable a/c
2,000 Balance c/d
2,000
Profit on Sale of Truck Account (2 Marks)
Balance c/d
150 Cash a/c
150
Maintenance Services Account (2 Marks)
Balance c/d
5,000 Account Receivable a/c
5,000
Salaries Payable Account (6 Marks)
Cash a/c
10,300 Balance b/d
Balance c/d
200 Salaries a/c
Salaries a/c
Salaries a/c
10,500
Sales Account (2 Marks)
Balance c/d
50,000 Account Receivable a/c
50,000
Salaries Account (4 Marks)
Salaries Payable a/c
3,000 Balance c/d
Salaries Payable a/c
2,200
Salaries Payable a/c
4,800
10,000
Repairs Account (2 Marks)
Accounts Payable a/c
500 Balance c/d
500
Office Supplies & Postage Account (2 Marks)
Accounts Payable a/c
250 Balance c/d
250
Maintenance Account (2 Marks)
Accounts Payable a/c
400 Balance c/d
400
Gasoline & Oil Account (2 Marks)
Accounts Payable a/c
1,500 Balance c/d
1,500
Telephone & Electric and Other Expenses Account (2 Marks)
Accounts Payable a/c
300 Balance c/d
300
Income -Tax Account (2 Marks)
Income -Tax Payable a/c
450 Balance c/d
450
Balance c/d

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3,500
3,500
1,200
1,200
1,350
2,550
3,900
2,000
2,000
150
150
5,000
5,000
500
3,000
2,200
4,800
10,500
50,000
50,000
10,000

10,000
500
500
250
250
400
400
1,500
1,500
300
300
450
450

MODEL ANSWER PAPER OF MAC -I -MID-TERM EXAMINATION BY PROF. V. K. GUPTA

INDIAN INSTITUTE OF MANAGEMENT INDORE

Page 5 of 6

Income -Tax Payable Account (2 Marks)

450 Income -Tax a/c
450
Provision for Bad Debts Account (2 Marks)
Accounts Receivable a/c
100 Balance c/d
100
Sales Promotion Campaign Expenses Account (3Marks)
Cash a/c
1,000 Deferred Sales Promotion Campaign
Expenses a/c
Balance c/d
1,000
Deferred Sales Promotion Campaign Expenses Account (2 Marks)
Sales Promotion Campaign
750
Balance c/d
Expenses a/c
750
Inventory Account (4 Marks)
Balance b/d
4,000 Purchases a/c
Purchases a/c
9,000 Balance c/d
13,000
Cost of Fuel Oil Consumed Account (2 Marks)
Purchases a/c
35,000
Balance c/d
35,000
Balance c/d

450
450
100
100
750
250
1,000
750
750
4,000
9,000
13,000
35,000
35,000

(D) TRIAL BALANCE AS ON 30th JUNE 2005 (30 MARKS)

S. No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Name of Accounts
Cash a/c
Accounts Receivable a/c
Accounts Payable a/c
Gross Block a/c
Prepaid Rent a/c
Accumulated Depreciation a/c
Inventory a/c
Share Capital a/c
Retained Earnings a/c
Depreciation a/c
Rent a/c
Dividends a/c
Profit on Sale of Truck a/c
Maintenance Services a/c
Salaries Payable a/c
Sales a/c
Salaries a/c
Repairs a/c
Office Supplies and Postage a/c
Maintenance a/c
Gasoline & Oil a/c
Telephone, Electric and Other Expenses a/c
Cost of Fuel Oil Consumed a/c
Sales Promotion Campaign Expenses a/c
Deferred Sales Promotion Campaign Expenses a/c
Provision for Bad Debts a/c
Income-Tax a/c
Income-Tax Payable a/c

Debit $
3,250
1,900

Credit $

5,450
6,200
1,350
2,900
9,000
9,300
3,500
1,200
2,550
2,000
150
5,000
200
50,000
10,000
500
250
400
1,500
300
35,000
250
750
100
450
76,950

450
76,950

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INDIAN INSTITUTE OF MANAGEMENT INDORE

Page 6 of 6

(E) INCOME STATEMENT FOR THE YEAR ENDED 30th JUNE, 2005
(19MARKS)
1
2
3

Income: Sales
Profit from Sale of Old Truck
Maintenance Services

$
50,000
150
5,000
55,150

4
5
6
7
8
9
10
11
12
13
14

Less Expenditure: Cost of Fuel Oil Consumed

Rent
Salaries
Office Supplies and Postage
Repairs
Gasoline & Oil Consumed
Maintenance
Depreciation
Telephone, Electricity and Other Expenses
Sales Promotion Campaign Expenses
Provision for Bad Debts

15

Less: Income-Tax

16
17

Less: Dividends
Net Profit for the Year

35,000
2,550
10,000
250
500
1,500
400
1,200
300
250
100

52,050
3,100
450
2,650
2,000
650

(F) BALANCE SHEET AS ON 30th JUNE, 2005 (15 MARKS)

Assets
Gross Block
Cash
Prepaid Rent
Inventory
Accounts Receivable
Deferred Sales Promotion
Campaign Expenses

Amount $
6,200
3,250
1,350
9,000
1,900
750

Liabilities
Share Capital
Retained Earnings (3500+650)
(2 Marks)
Accounts Payable
Salaries Payable
Income-Tax Payable
Accumulated Depreciation

22,450

Amount $
9,300
4,150
5,450
200
450
2,900
22,450

THANKS!

ALL THE BEST!!

MODEL ANSWER PAPER OF MAC -I -MID-TERM EXAMINATION BY PROF. V. K. GUPTA