You are on page 1of 6





Q1. Attempt any four of the following. (20 marks)

A. Answer in one sentence each. (5 marks)
1. What is Reducing Balance method?
2. What is straight line method of depreciation?
3. What is the Method of Valuation of Goodwill?
4. What do you mean by credit balance of Joint venture account?
5. What is joint bank account?
A. Write the word/term/phrase which can substitute each of the following statement: (5
1. The balance which cannot be recovered from the debtors.
2. What is the journal entry for machinery purchased for cash Rs. 1000?
3. Money value of business reputation.
4. A person entered into a joint venture.
5. The person who draws the bill of exchange?
A. Match the following pairs. (5 marks)
Group A Group B

1. Joint bank account a. Amount paid on due date

2. Depreciation b. Trading account

3. Honour of the bill c. Revenue income

4. Endorsee d. Capital income

5. Endorser e. A person who transfers the ownership of the


f. Converting symbolic language

g. Operated by coverturers

h. A person on whom the bill of exchange is


A. Select the most appropriate alternative from hose given below each statement.
(5 marks)
1. Depreciation is charged only on the ____________
a. Current asset
b. Intangible assets
c. Immovable assets
d. Fixed assets
2. Joint venture is a ________________
a. Trading concern
b. Non – trading concern
c. Religious concern
d. Public concern
3. Brain of computer is _____________
a. Micro processor
b. RAM
d. DOS
4. Before accepting a bill, it is called a _________
a. Note
b. Draft
c. Hundi
d. Request.
1. A bill drawn and accepted on 12th June 2007 for two months will be due for payment on ___________
a. 12th August, 2007
b. 15th August, 2007
c. 16th August, 2007
d. 14th August, 2007

A. State with reason whether the following statements are true of false. (5

1. Depreciation is charged only on original cost of the machinery.

2. Noting charges are bone by Drawer.

A. Prepare bill of exchange from the following details. (5 marks)

1. Drawer : Mrs. Archana Patil, Vikram Nagar, Patan.

2. Drawee : Mrs. Nalini Maniyar, Jalaram Krupa, Mulund.
3. Payee : Mrs. Sugandhi Ghatkar, Mangal Yog, CIDCO, Aurangabad.
4. Amount : Rs. 17,575.
5. Period : 60 days.
6. Date of Bill : 28th December, 2007.
7. Accepted on nd
: 2 January, 2008.
8. Accepted for : 90 days.

Q2. M/s Amol Industries, Pune, purchased machinery for Rs. 19,400 on 1st January, 1976, and spent Rs.
600 for its erection. On 1st July 1976, additional machinery costing Rs. 10,000 was acquired. On 1st July
1978 the machinery purchased on 1st January, 1976 was sold for Rs. 12,000 and on the same date fresh
machinery was purchased at a cost of Rs. 16,000. Depreciation was provided annually on 31st December at
the rate of 10% on the original cost. Give the machinery account and deprecation account for 1976, 1977
and 1978.
Q2. (A) 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

Q2. (B)Write a short notes on uses of computer in modern age.

Q3. Baloo owes Kaloo Rs.8000. Kaloo then draws a bill for Rs. 8000 on Baloo for a period of three months.
Baloo accepts and return it to Kaloo. Kaloo discounted the bill with his bank at 12 % p.a. On due date, the
bill was dishonoured noting charges amount to Rs. 30. Kaloo then draws a bill for the balance plus interest
of Rs. 170. Before the due date of this bill Baloo pays the amount at a discount of Rs. 40 to retire the bill.
Pass Journal Entries in the books of Kaloo.
Q3. Journalise the following transactions in the books of Rahul.
a. Pradeep informed Rahul that, Vijay’s acceptance for Rs. 1,000 endorsed to Pradeep has been
dishonoured. Noting charges amounted to Rs. 50.
b. Nilesh renews his acceptance to Rahul for Rs. 600 by paying Rs. 200 in cash and accepting a fresh bill
for balance plus interest at 12% p.a. for 3 months.
c. Prashant’s acceptance to Rahul for Rs. 3,000 retired one month before due date at a discount of 12%
d. Bank informs Rahul as to the dishonour of Aviraj’s acceptance for Rs. 1,000 to Rahul, discounted with
the bank. Noting charges are Rs. 20.
Q4. Suresh and Ramesh entered into a joint venture to construct a building at a contract price of Rs.
7,00,000. They agreed to share profits and losses in the ratio of 2:1. Suresh deposited Rs. 5,00,000
and Ramesh Rs. 1,00,000 into joint bank. The transactions were as follows.
1. Purchase of materials Rs. 3,50,000
2. Tools and equipment Rs. 1,00,000.
3. Wages Rs. 1,20,000
4. Architect fees Rs. 25,000
Besides these, Suresh supplied material worth Rs. 15,000 and Ramesh supplied material worth Rs.
13,500. Building was ready and contract price received. Pass journal entries.
Q5. Priya and Supriya are equal partners, who maintain their books under single entry.
Their position as on 1st April 02 are as follows:
Liabilitie Amt Asset Amt

Capitals Plant 1,60,

: 000
2,00, Furniture
Priya 000 10,00
Stock 0
Supriya 1,20,
000 Debtors 67,60
Creditor 0
s 40,00 Bills
0 receivable 97,30
Bills 0
payable 12,40 Cash
0 Bank 9,200



3,72, 3,72,
400 400

On 31st march 03 their statement of affairs was as follows :

Cash Rs.800 , Bank Rs 31,600 , Creditors Rs 42,400 , Stock Rs 73,400 , Debtors Rs 1,32,600, Bills payable
Rs 1,200, Bills receivable Rs 17,600 .
Plant and Furniture are to be depreciated by 10%
From the debtors Rs 4,600 are considered irrecoverable and R.D.D at 5% is to be created.
An amount of Rs1,600 is to be set aside from bills receivable.
Priya and Supriya have withdrawn Rs20,000 and Rs 16,000 for their personal use.
Interest at 5% on the opening balances of partners capital is to be.
Prepare : statement of affairs as on 31st March 02 and statement of profit and loss for the year ending

Q6. From the following information, prepare Income and Expenditure account for the year
ended 31st March, 2008 and a Balance Sheet as on that date.

Receipts Amou Payments Amount

To Cash in hand 1750 By Bank Overdraft 2500
(1.4.2007) By Salaries 5300
To Subscriptions 150 By Furniture 2000
2006 – 07 14100 By Investments in 4000
2007 – 08 75 Securities 800
2008 – 09 2500 By Printing and 1500
To proceeds from 800 Stationery 1300
Drama 500 By Cost of Staging 2500
To Entrance Fees 200 drama 175
To Interest on Securities 20075 By Sundry Expenses 20075
To sale of Old Furniture By Cash at Bank
By Cash in Hand

1. The society has 1500 members, each paying an annual subscription of Rs. 12.
2. Subscriptions of Rs. 100 pertaining to the year 2006 – 07 are still in arrears.
3. Value of Stationery at hand on 31st March, 2007 was Rs. 200 and on 31st March, 2008 was Rs. 150.
4. Entrance fees are to be treated as Capital receipts.
5. Salary of Rs. 700 for the current year is unpaid.
6. Balances as on 31st March, 2007: Investment Rs. 4500, Building Rs. 25000, Furniture Rs. 200.
7. Depreciate building by 2 ½ % and furniture by 5%.

Q7. Following is the Trial balance of a firm as on 31st December, 1997

Trial Balance as at 31st December, 1997
Debit Balance Amou Credit Balance Amou
nt nt

Bank 2,000 A’s Capital 25,00

Bills Receivable 8,000 B’s Capital
Sundry Debtors 23,00 Bills Payable 0
Stock on 31.12.97 Sundry Creditors 7,500
Purchases(net) 0 Reserve for bad debts 33,30
Petty cash A/c Sales 0
Wages 00 600

Salaries 4,000 2,90,

Rent (for 10 months) 38,30
Electricity Charges
Drawings – A 0

Drawings – B 1,000

Buildings 2,180

Furniture 6,000

Carriage Inwards 4,000

Donations 34,00
Carriage Outwards
Expenses 2,000

Printing and 1,000


Postage and Telegram 2,300

Fuel and power 1,430


3,71,4 3,71,
00 400

1. Wages include Rs. 3,300 paid for the construction of a part of the building.
2. Provide for outstanding rent
3. Depreciation is to be provided on furniture@ 10% and Building @ 5%
4. Bills Receivable and Bills Payable include dishonoured bills for Rs. 2,000 and Rs. 1,500 respectively.
5. Bad debts to be written off Rs. 500. Provide reserve for doubtful debts @ 5% on debtors.
You are required to prepare Trading and profit and loss account for the year ended 31st December 1997 and
a balance sheet as on that date.