Professional Documents
Culture Documents
FAR-I
(Incoplete Records )
CAF-05 (Autumn -18) Section: B Marks: 20
July 18, 2018 Time: 36 min.
Question No. 1
Qureshi is running a wholesale store. On the evening of December 31, 2012, fire broke out in
accounts office and all available cash, double entry accounting records and some furniture
were completely lost by the fire. Following information has been gathered from available
supporting reports kept in other room:
Rs.
Inventory 45,500
Capital 600,000
(ii) Net book value of furniture at January 1, 2012 was Rs. 120,000. All the furniture at
start of year was purchased on January 1, 2010. Depreciation rate for furniture is 20%
on straight line basis. On June 30, 2012 a furniture costing Rs. 20,000 was sold at a
profit of Rs. 2,000. On October 1, 2012 Qureshi brought a furniture costing Rs. 25,000
into business. After fire, physical count shows furniture having year end net book value
of Rs. 79,750.
(iii) Depreciation rate for all other fixed assets is 30% on reducing balance basis. There
were no additions or disposals of other fixed assets.
(iv) All purchases and sales are made on credit. Payments to creditors are made through
cheques as well as cash. Debtors always pay in cash. Total purchases made during the
year amount to Rs. 1,694,000.
(v) Qureshi maintains a steady gross profit of 30% on all his sales.
(vi) On expiry of rent agreement, it was renewed by paying the rent for next 12 months in
cash. Previous rent was Rs. 3,000 per month which was increased to Rs. 4,000 per
month on renewal.
(vii) Qureshi made cash drawings of Rs. 2,500 per month.
(vii) Bad debt written off during the year amounts to Rs. 1,500.
Rs.
Stationary 25,500
(ix) Bank statement showed a total cash deposit during the year of Rs. 1,725,000. It also
showed following payments during the year:
(b) Income statement for the year ending 31st December 2012.