we GES < www.daniyalstudio9.comys* nef fh Course mame: | Level: BA/BCOM | Course Code: | " 444 ~~ Semester: ~ ‘Autumn 2022 Assignment: 1 L Due Date: | 15-02-2023 | Total Assignment: 2 | Late Date: 14-04-2023 | BLL LG Cerri iL Gin Sa AMR SF iS be | CA Lube Ape tEL SAIL S200 24 St pre Lede gS nt SP 030966961594, biped A$ Un sghifu Hedy Assignment no. 1 Q. 1 On Ist January 2022, Black and White joined together as co-ventures for equal share in profits through sale of Heaters. Black purchased 2,000 Heaters at Rs. 250 each for cash and sent 1,500 of these to White for sale, the selling price of each being Rs, 300. Alll the Heaters were sold by both and the proceeds collected. Each venture recorded in his books only those transactions concluded by him, final profit/loss being ascertained through a Memorandum Joint Venture Account. Freight and Insurance Rs. 9,000 Black Selling Expenses 4,500 Coolie and Clearing charges 900 White Selling Expenses | 13,500 Solution: Required: ® Joint Venture A/c with White in the books of Black. Purchased Sell 500000 450000 By cash (2000*250) Cash (1500* 300) | Collicand | 900 clearing charges Selling expenses 13500 AAAs _ ty MOU Studio 9 See Sitter G Luwe GES < www.daniyalstudio9.comys* nef fh 500000 464400 ii) Joint Venture A/c with Black in the books of White Sell Purchased By cash 450000 500000 Cash (1500* 300) (2000*250) Freight and (9000) insurance Selling expenses (4500) 450000 486500 iii) Memorandum Joint Venture A/c. Cost 500000 Sell 450000 Collie and Freight insurance 9000 900 clearing charges Selling expenses, 4500 Selling expenses 13500 486000 464400 Q. 2 Punjab Cycle Co. of Ludhiana consigned 100 tricycles to Kanpur Cycle Co. of Kanpur costing Rs 1,500 each, invoiced at Rs 2,000 each. The consignor paid freight Rs 10,000 and insurance in transit Rs 1,500. During transit, 10 tricycles were totally damaged. Kanpur Cycle Co. took delivery of remaining tricycles and paid Rs 1,530 for octroi duty, Kanpur Cycle Co. sent a bank draft to Punjab Cycle Co. for Rs 50,000 as advance and later on sent an account sale showing that 80 tricycles had been sold @ Rs 2,200 each. Expenses incurred by Kanpur Cycle Co. on godown rent were Rs 2,000. Kanpur Cycle Co. is entitled to a commission of 5% on invoice price and 25% on any surplus of sale price over invoice price. Insurance claim was settled at Rs 14,000. Prepare consignment account, consignee’s account and accidental loss account in the books of the consignor. Solution: Dr In Punjab Cycle Co.'s Ledger Consignment Account, Cr To Goods Sent on Consignment Account | 2,00.000 | By Kanpur Cycle Co—Sales | 1,76,000 AAAS EE ty MOU Studio 9 LS ee Se tent G Luewe GES < www.daniyalstudio9.comys* nef fh To Bank By Accidental Loss Account 16,150 - Freight 10,000 By Goods Sent on Consignment. ~ Insurance in transit 1,500 11,500 Account-Loading 50,000 To Kanpur Cyele Co. By Consignment Stock 21,320 - Octroi duty 1,530, - Godown rent 2,000 ~ Commission 12,000 15,530 To Consignment Stock Reserve Account 5,000 To Profit and Loss Account: -Transfer of profit 31,440 2,63,470 2,63,470 Dr. Kanpur Cycle Co. Cr To Consignment Account-Sales 1,76,000 | By Bank-Bak draft as advance | 50,000 By Consignment Account -Expenses and commission 15,530 By Balance c/d 1,10,470 1,76,000 1,76,000 To Balance b/d 1,10,470 Dr. Accidental Loss Account. Cr To Consignment Account 16,150 | By Bank-Amount received from | 14,000 Damage of goods in transit insurance co. By Profit and Loss Account-| 2,150 Transfer 16,150 16,150 Working Notes: (1) Cost of goods damaged in transit: Initial cost, 10 x 1,500 15,000 AA dy MOU Stuntio 9 2S ee Siegert Gluwe GES < www.daniyalstudio9.comys* nef fh Add; Proportionate share of freight and insurance in transit, (10,000+ 1,500) x 10/100 1,150 16,150 Gi) Commission on sales: Sale proceeds of 80 tricycles =80 x 2,200 1,76,000 Less: Invoice price of 80 trieyeles = 80 x 2,000 1,60,000 Surplus of sale price,aver invoice price 16,000 Commission: 5% of 1,60,000, the invoice price of goods sold 8,000 Add: 25% of 16,000, the surplus 4,000 12,000 Gin) Stock with consignee: Invoice price of 10 tricycles, 10 x 2,000 20,000, Add: Proportionate share of freight and insurance in transit, 11,500 10/100 1,150 Add: Proportionate share of octroi duty, 1,530 x 10/90 170 21,320 (v) Loading on goods sent on consignment = 500 x 100 = 50,000 Gy) | Consignment stock reserve required: Excess of invoice price over cost price for 1 tricycle 2,000 - 1,500 There are 10 tricycles in stock. Hence, stock reserve required 10 x 500 = 5,000 Q.3 Record the Journal entries for the following transactions in the books of Decent Company Ltd: a) _ Issued 3,000 share of 10% preference shares of Rs. 100 each at par in cash. b) _ Issued 10,000 ordinary shares of Rs. 100 each at Rs. 110 each in cash. c) Issued 2,000 10% preference shares of Rs.100 each at Rs. 95 each in cash. AAAS EE ty MOU Studio 9 LS ee Se tent G Luewe GES < www.daniyalstudio9.comys* nef fh @ Acquired Equipment costing Rs. 210,000 against 2,000 10% preference shares of Rs. 100 each e) Issued 2,000 common shares of Rs. 100 each to promoters in recognition of their services. Solution: Particulars Debit Credit Share 300000 Preferences (3000 * 100) -10% 270000 Share 100000 Preferences (1000 * 100) 100000 Share 110000 Preferences (1000 * 110) 110000 Share | 200000 Preferences (2000 * 100) -10% 180000 Share (Sel) 190000 i Preferences (2000 * 95) -10% 171000 Equipment 210000 Preferences (2000 * 100) -10% Share 200000 Common (2000 * 100) 200000 Q.4 A company carries on business through five departments, A, B, C, D, and E. the trial balance as at 31st December, 2022 was as follows: A B iG D E Opening Stock | Rs. 5,000} Rs. 3,000 | Rs.2,500 | Rs. 4,000 | Rs. 4,500 Purchases 50,000 30,000 10,000 26,000 34,000 Sales 48,000 21,000 9,500 23,000 30,000 Closing Stock | 6,000 4,000 3,500 5,000 5,500 AAAS EE ty MOU Studio 9 LS ee Se tent G Luewe GES < www.daniyalstudio9.comys* nef fh The opening and closing stocks have been valued at cost. The expenses, which are to be charged to each department in proportion to the cost of goods sold in the respective departments, are as follows: Salaries and Commission Rs. 6,000 Rent and rates 1,500 Miscellaneous expense 1,200 Insurance 800 Required: Show the final result and percentage on sales in each department and also the combined result with percentage to sales. Solution: A B c D E Total Opening Stock "| Rs. 5,000. | Rs. 3.000 |Rs. 2,500|Rs. 4,000] Rs. 4,500 | Rs. 19000 Purchases 50,000 | 30,000 | 10,000 |.26,000 | 34.000 | 150000 Sales 48,000 | 21,000 | 9.500 | 23.000 | 30,000 | 131500 Closing Stock 6,000 4,000 | 3,500 | 5,000 | 5,500 | 24000 Net ProfitorLoss |Loss (1000) Loss | Loss | Profit | Profit | Loss (1000) | (1000) | (1000) | (1000) | (5000) Department D and E Show the profit while A, B and C are in loss. So, overall, the result was loss. Q.5 The Fortune Corporation was formed with an authorized capital as follows: 20,000, 10% preference shares of Rs. 100 each 100,000 ordinary shares of Rs. 100 each 5000 deferred shares of Rs. 10 each. Required: Pass the necessary journal entries to record the following transactions: Issued 3000 10% preference shares at par and cash received. ii, Issued 10,000 ordinary shares of Rs. 100 each at Rs. 110. All amounts received in cash, AAAS EE ty MOU Studio 9 LS ee Se tent G Luewe GES < www.daniyalstudio9.comys* nef fh iii, Acquired Equipment costing Rs. 210,000 and issued 2000 10% preference shares of Rs. 100 each. iv. Land valued Rs. 225,000 acquired and 2500, 10% preference shares were issued against its consideration. v. Issued 2000 deferred sharés of Rs. 10 each to promoters in recognition of services rendered by them. Solution: Particular Debit Credit Bank Account 2000000 To 20000 preference shares 2000000 (Being issue at Rs. 100) Bank Account 100000. To ordinary preference shares ‘ 100000 (Being issue at Rs).100) Bank Account 50000 To 5000 preference shares 50000 (Being issue at Rs. 10) Bank Account 1000000 To 10000 preference shares 1000000 (Being issue at Rs. 100) Bank Account 1100000 To 10000 preference shares 1100000 (Being issue at Rs. 110) Cost 210000 Bank Account 200000 To 2000 preference shares a 10000 (Being issue at Rs. 100) Land 225000 To 2500 preference shares 225000 (Being issue at 10%) Bank Account 20000 To 2000 preference shares (Being issue at Rs. 10) ane AA dy MOU Stuntio 9 2S ee Siegert Glu