Army Public School & College (Boys) Saddar Karachi

Principle of Accounting HSC-II

Test Series – I (2023)
Time: 80 minutes Maximum marks = 50
SECTION ‘A’
(MULTIPLE CHOICE QUESTIONS)
Q:1 Choose the correct answer for each of the given options.

I) If some additional capital (fresh capital) Rs.5000 is injected during the year closing capital will
*Increase by Rs.5000 *decrease by Rs.5000 *remain unchanged *multiply by Rs.5000

II) Under diminishing balance method amount of annual depreciation gradually.

*Increase *remains constant *decrease *does not change

III) The amount of depreciation charged on machinery will be debited to

*Machinery account *depreciation account *cash account *depreciable cost a/c

IV) If closing capital was Rs.5000 additional investment Rs.3000 drawing Rs.300 per month for
6 months and profit during the year was Rs.1300 then the amount capital at start will be
* 1700 *1600 *3800 *2500

V) In this account profit/loss of partner is transferred under the fluctuating capital method
*Partner’s capital account *partner’s retained earning account
*partner’s income account *partner’s loss account

VII) Cost of machine includes

*3 year fire insurance *repair cost of damage during installation
* trade discount *insurance in transit

VIII) Current accounts of the partners should be opened when the capitals are
*Fluctuating *fixed *either fixed or fluctuating *neither fixed nor fluctuating

IX) If the remaining partners purchase capital of retiring partner, the total capital for the firm
after his retirement
*Increases *remain constant *decreases *fluctuates

X) When partnership is dissolved the final task is,

*Payment of liabilities *payment to partners
*payment of final expenses *payment to employees
 Army Public School & College (Boys) Saddar Karachi
Principle of Accounting HSC-II
Test Series – I (2023)
Time: 80 minutes Maximum marks = 50

Qno:2 Attempt any FOUR questions. each question carrys TEN marks.

(i) On September 30th, 2008 Muneb Co. Ltd purchased a machine for Rs.250000 with 5% Trade
discount. The following expenditure were also incurred on machine
(i) Installation charges Rs.20000
(ii) Freight in Rs.7500
(iii) Insurance in transit Rs.10000
(iv) 2 years fire insurance Rs.50000
Its useful life is 10 years and residual value estimated at Rs.75000. the company’s accounting
year ends on December 31, each year
REQUIRED
(a) Calculate the cost of machine
(b) Record purchase of machine
(c) Calculate the amount of depreciation on December 31, 2008 and 2009 using straight line
method.

(ii) Shamim Ltd. Purchased a machine on February 28, 2007 at a price of Rs.400000. its residual
value was estimated @ 20%. The life is to be estimated in 5 years, in units 32000, and in hours
64000. The company’s year ended on December 31, each year.
REQUIRED
(i) Determine the depreciation on machine for 2007, 2008 and 2009 under the following
methods.
(ii) Working hours operated (year 2007, 1500 hours, year 2008, 2500 hour and year 2009,
2000 hours)
(iii) Production units (year 2007, 7500 units, year 2008, 8500 units and year 2009, 6700
units)
Note: Present your data separately for each method in the following form.
Year Cost of machine Depreciation Accumulated Book value of
depreciation machine

2007

2008

2009
(iii) On May 01, 2017, shazia, Nazia and Hania agreed to form a partnership business with a total
capital of Rs.2400000 to be contributed by them in the ratio of 1 : 2 : 3 respectively.
REQUIRED
1- Find the investment of each partner
2- Record in General Journal the investment of each partner
3- Prepare an initial balance sheet.

(iv) Munir. Nasir and wazir are partners in the firm “siddiqui brothers”. On January 1st 1997 their
capital balances appeared at Rs.250000, Rs.150000 and Rs.100000 respectively. According to
the partnership agreement each partner was entitled to receive interest at 5% per annum at
capitals at start and salary of Rs.7500 per annum. After allowing interest and salary to the
partners, the balance of undistributed was to be distributed equally among the partners.
The income statement for the year ended on December 31, 2010 showed net profit of
Rs.137500.
REQUIRED
1- Prepare income distribution summary

(v)The balance sheet of Mr. Asim as on December 31, 2008 shows machinery Rs.400000 and
accumulated depreciation machinery Rs.45000
REQUIRED
(i) Calculate depreciation for the year 2009 and 2010 under diminishing balance method
@ 15%
(ii) Make adjusting entry as on December 31, 2010.
(iii) Make closing entry as on December 31, 2009.
(iv) Prepare partial balance sheet as on December 31, 2010.