ACCOUNTS PART-1-TEST

1. From the following information, ascertain the value of stock as on 31st March, 2020 :
Rs.
Stock as on 1-4-2019 28,500
Purchases 1,52,500
Manufacturing Expenses 30,000
Selling Expenses 12,100
Administration Expenses 6,000
Financial Expenses 4,300
Sales 2,49,000
At the time of valuing stock as on 31st March, 2019, a sum of Rs. 3,500 was written off an a
particular item, which was originally purchased for Rs. 10,000 and was sold during the year for Rs.
9,000. Barring the transaction relating to this item, the gross profit earned during the year was
20% on sales. (3 Marks)

2. S Ltd. follows perpetual inventory system and also On March 31 of every year, the company
undertakes physical Inventory verification. On March 31, 2020, the value of Inventories as per the
records differed from the value as per the physical Inventory.
Physical Inventory value as on 31.03.2020 is 1,50,000
On scrutiny, the following differences were noticed:
i. Goods purchased for Rs.10,000 were received and included in the physical Inventory but no
entry was made in the books.
ii. Goods costing Rs.30,000 were sold and entered in the books but the Inventory is yet to be
delivered.
iii. Goods worth Rs.5,000 are returned to the suppliers but is omitted to be recorded.
iv. Stock with consignee Rs.15,000
v. Goods Purchased and recorded in the books as purchase not yet Received Rs.3000
vi. Goods Sold and recorded in the books costing Rs.8000 and not yet delivered.
Find out the value of stock as per books (5 Marks)

3. HP is a leading distributor of petrol. A detail inventory of petrol in hand is taken when the books are
closed at the end of each month. At the end of the month following information is available:
Sales 47,25,000
Admin and selling expenses Cost 1,25,000
Inventory at Beginning 1,00,000 Litres @ 15 per litre
Purchases
June 1 two lakh litres @14.25
June 30 one lakh litres @ 15.15
Closing inventory 1,30,000 litres
UNDER SIMPLE AVERAGE METHOD AND WEIGHTED AVERAGE METHOD FIND OUT :
(i) Value of inventory on June, 30
(ii) Amount of cost of goods sold for June
(iii) Net Profit / Loss for the month of June (6 Marks)

4. Calculate the cost of goods sold and the value of ending inventory under LIFO and Weighted
average Method from the following Information
Dates Units Price per unit
Jan. 1 Opening Stock 1,500 Rs. 20 each
Feb. 10 Purchases 750 Rs. 25 each
March 15 Purchases 600 Rs. 22 each

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March 25 Sold 1,800 ---
April 10 Sold 750 ---
May 15 Purchases 600 Rs.25 each
June 10 Sold 750 ---
(8 Marks)

5. According to the cash-book of Gopi, there was a balance of Rs. 44,50,000 in his bank on 30th June,
2017. On investigation you find that :
i. Cheques amounting to Rs. 6,00,000 issued to creditors have not been presented for payment till
the date.
ii. Cheques paid into bank amounting to Rs. 11,05,000 out of which cheques amounting to Rs.
5,50,000 only collected by the bank up to 30th June 2017.
iii. A dividend of Rs. 40,000 and rent amounting to Rs. 6,00,000 received by the bank and entered in
the pass-book but not recorded in the cash book.
iv. Insurance premium (up to 31st December, 2017) paid by the bank Rs. 27,000 not entered in the
cash book.
v. The payment side of the cash book had been under casted by Rs. 5,000.
vi. Bank charges Rs. 1,500 shown in the pass book had not been entered in the cash book.
vii. A bill payable of Rs. 2,00,000 had been paid by the bank but was not entered in the cash book and
bill receivable for Rs. 60,000 had been discounted with the bank at a cost of Rs. 1,000 which had
also not been recorded in cash book.
Required:
(a) to make the appropriate adjustments in the cash book, and
(b) to prepare a statement reconciling it with the bank pass book.(7 Marks)

6. From the following particulars of Raja traders, prepare a bank reconciliation statement as on 31st
January, 2018.
(a) Balance as per bank statement RS 5,000

(b) Cheques amounting to RS 800 had been recorded in the cash book as having been deposited
into the bank on 25th January 2018, but were entered in the bank statement on 2nd February
2018.

(c) Amount received by bank through NEFT amounting to RS 3,000, omitted in the cash book.

(d) Two cheques issued for RS 3,000 and RS 2,000 on 29th Jan 2018. Only the first cheque is
presented for payment.

(a) Insurance premium on motor vehicles for RS1,000 paid by the bank as per standing instruction
not recorded in the cash book.

(b) Credit side of cash book was undercast by RS 700

(g) Subsidy received directly by the bank from the state government amounting to RS 10,000, not
entered in cash book. (4 Marks)

7. Vikas draws a bill for Rs.6,000 and Vishal accepts the same for mutual accommodation of both of
them to the extent of 2/3 and 1/3. Vikas discounts the same for Rs.5,640 and remits 1/3 of the
proceeds to Vishal. Before the due date, Vishal draws another bill for Rs.8,400 on Vikas in order to
provide funds to meet the first bill. The second bill is discounted for RS.8,160 with the help of which
the first bill is met and Rs.1,440 are remitted to Vikas. Before the due date of the second bill Vikas
became insolvent and Vishal receives a dividend of 50 paise in the rupee in full satisfaction.
Pass the necessary Journal Entries in the books of Vikas and Vishal (12 Marks)

8. Journalise the following transactions in Ramu’s books.

i. Ramu’s acceptance to Arun for Rs.7,500 discharged by a cash payment of Rs.1,000 and a new
bill for the balance plus Rs.150 for interest.

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ii. Kamal acceptance for Rs.8,000 which was endorsed by Ramu to Rajini was dishonoured. Rajini
paid Rs.80 noting charges. Bill withdrawn against cheque.
iii. Dhanush retires a bill for Rs.5,000 drawn on him by Ramu for Rs.20 discount.
iv. Ramu’s acceptance to Ajith for Rs.15,000 discharged by Vijays acceptance to Ramu for a
similar amount. (6 marks)

9. M/s. Green Channel purchased a second-hand machine on 1st January, 2017 for Rs. 1,60,000.
Overhauling and erection charges amounted to Rs. 40,000.
Another machine was purchased for Rs. 80,000 on 1st July, 2017.
On 1st July, 2019, the machine installed on 1st January, 2017 was sold for Rs. 1,00,000. Another
machine amounted to Rs. 30,000 was purchased and was installed on 30th September, 2019.
Under the existing practice the company provides depreciation @ 10% p.a. on original cost.
However, from the year 2020 it decided to adopt WDV method and to charge depreciation @ 15%
p.a. You are required to prepare Machinery account for the years 2017 to 2020 (5 Marks)

10. A sends out goods on approval to few customers and includes the same in the Sales Account. On
31.3.2016, the Trade receivables balance stood at Rs.1,00,000 which included Rs.7,000 goods sent
on approval against which no intimation was received during the year. These goods were sent out at
25% over and above cost price and were sent to-
Mr. X - Rs. 4,000 and Mr. Y - Rs. 3,000. Mr. X sent intimation of acceptance on 30th April and Mr.
Y returned the goods on 10th April, 2016. Make the adjustment entries and show how these items
will appear in the Balance Sheet on 31st March, 2016. Show also the entries to be made during
April, 2016. Value of closing Inventories as on 31st March, 2016 was Rs.60,000. (4 marks)

11. Calculation of ADD in settlement of Contra Accounts: A had the following bills receivable
and bills payable against B. Calculate average due date when the payment can be made or
received without any loss or gain of interest to either party.

Bills Receivable Bills Payable

Date of the Amount Tenure in Date of bill Amout Tenure in

Bill (Rs.) months (Rs.) Months
1.6.13 18,000 3 29.5.13 12,000 2

5.6.13 15,000 3 3.6.13 18,000 3

9.6.13 20,000 1 10.6.13 20,000 2

12.6.13 16,000 2 13.6.13 14,000 2

20.6.13 24,000 3 27.6.13 22,000 1

Gazetted holiday intervening in the period are 15th August, 2013, 16th August, 2013, and
6th September, 2013. (6 Marks)

12. A and B are partners in a firm and share profits and losses equally. A has withdrawn the following
sums during the half year ending 30th June 2018:
Date Amount (Rs.)
January 15 15,000
February 10 12,000
April 5 24,000
May 20 30,000
June 18 27,000
Interest on drawings is charged @10% per annum. Find out the average due date and calculate the
Interest on drawings to be charged on 30th June 2018. (5 Marks)

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13. Rs. 15,000 lent by Shiv Raj to Jain & Co. on 1st January, 2017 is repayable in 5 equal annual
instalments commencing from 1st January, 2019. Calculate average due date and interest at 15%
p.a. (2 Marks)

14. S.K had the following transactions with Reisena; 2017

2017 Rs. 2017 Rs.
Jan 1 Balance due form 1,000 June 16 Purchased goods from him 15,000
Raisena (Received on July 16)
Feb 16 Purchased goods from 6,000
him
Feb 28 Sold goods to him 10,000 Sept. 23 3,000
Paid him cash
Mar. 16 Received a cheque 3,000 Oct. 24 Accepted his bill for 3 5,000
months
Apr. 20 Sold him goods (Invoiced 10,000 Nov. 26 Received his acceptance 8,000
on May 3) for 2 months
You are asked to prepare Reisena Account Current in the books of S.K by using
1) Interest Table Method
2) Means of Product method
3) Epoque Method.
upto December 31, 2017 a reckoning 5%p.a interest. ( 1 2 M a r k s )

1 5 . Preparation of Account Current by means products & Red-ink Interest concept: Following
transaction took place between B and A during the month of April, 2012.

April Particulars Rs.

1 Amount payable by B to A 25,000
7 Received acceptance of B to A for 2 months 12,500
Bills receivable (accepted by A) on 7.2.2012 is honoured on
10 this due date
10 B sold goods to A (invoice dated 10.5.2012) 37,500
12 B received cheque form A dated 15.5.2012 18,750
15 A sold goods to B (invoice dated 15.5.2012) 15,000
20 B returned goods sold by A on 15.4.2012 2,500
20 Bill accepted by A is dishonoured on this due date 12,500
you are required to make out an account current by products method to be rendered by B to
A as on 30.4.2012, taking interest into account @ 10% p.a. (assume 1 year = 365 day).
(8 Marks)
16. Mr. A of Assam sent on 18th February, 2020 a consignment of 1,000 DVD players to B of Bengal
costing Rs. 100 each. Expenses of Rs. 1,500 were met by the consignor. B spent Rs. 3,000 for
clearance and selling expenses were Rs. 20 per DVD player.
B sold on 15th March, 2020, 600 DVD players @ Rs. 160 per DVD player and again on 20th May,
2020, 300 DVD players @ Rs. 170 each.
B is entitled to a commission of Rs. 25 per DVD player sold plus ¼ of the amount by which the
gross sale proceeds less total commission thereon exceeded a sum calculated @ Rs. 125 per DVD
player sold. B sent the amount due to A on 30th June, 2020.
You are required to prepare the consignment account and B’s account in the books of A. (7
Marks)

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