THE INDIAN COMMUNITY SCHOOL, KUWAIT

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THE INDIAN COMMUNITY SCHOOL, KUWAIT SERIES : II TERM /FN/ 2018-2019 CODE : 055 TIME ALLOWED : 2 HOURS NAME OF STUDENT : MAX. MARKS : 50 ROLL NO.

1 THE INDIAN COMMUNITY SCHOOL, KUWAIT SERIES : II TERM /FN/ CODE : 055 TIME ALLOWED : 2 HOURS NAME OF STUDENT : MAX. MARKS : 50 ROLL NO. :.. CLASS/SEC :.. NO. OF PAGES :4 ACCOUNTANCY ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ General Instruction : All parts of a question should be attempted at one place. 1. Why is a suspense account created? (1) 2. What does proper presentation of a bill of exchange mean? (1) 3. Give the journal entry for the following adjustment: Insurance prepaid for a quarter at 20,000 per annum. (1) 4. Identify the type of error made in the following cases: a) Wages paid to a worker for making addition to the headquarters building amounting to 25,000, debited to wages account. b) Cash balance of 17,000 carried forward as 1,70,000. c) Purchase of furniture 80,000 not recorded. (3) 5. Differentiate between a Bill of Exchange and a Promissory Note on the following bases: a) Drawer b) Acceptance c) Payee (3) 6. a) What is meant by a capital receipt? b) Give two examples of capital receipt. (3) 7. Write the Journal entries to rectify the following errors, using a suspense account. Also, make thesuspense account. i) Goods of the value of 2,000 returned by Raghu were entered in the Sales Book and posted therefrom to the credit of his account. ii) An amount of 3,000 entered in the Sales Return Book has been posted to the debit of Sahib, who returned the goods. 1

2 iii) A sale of 2,000 made to Jacob was correctly entered in the Sales Book but wrongly posted to the debit of Sohan as 200. (4) 8. Prepare a Trial Balance as on 31 st March, 2018, from the following Ledger Balance of SonalBhatnagar. Fixed Assets A/c 2,46,000 Capital A/c 2,50,000 Debtors A/c 20,000 Creditors A/c 22,000 Purchases A/c 35,000 Sales A/c 53,000 Returns Outward A/c 500 Returns Inward A/c 1,000 Bills Payable A/c 4,000 Bills Receivable A/c 8,000 Bank overdraft A/c 6,000 Opening Stock A/c 7,500 Wages A/c 6,000 Salaries A/c 9,000 Rent A/c 3,000 (4) 9. Determine the missing information in the following books of Drawee. Date Particulars L.F. Dr( ) Cr( ) 2018 Jan 1 Dr... To... (Being the purchases of goods on credit for 30,000) Jan 1 Dr. To. (Being the acceptance of the bill given to Arun for three months) March 4. Dr... To. To... (Being the acceptance retired under p.a.) (4) 10. On 1 st May 2015,Mohit sends his promissory note of 6,000 for 3 months to Rohit. Rohit gets it discounted with his bankers at 18% p.a. on May 04. On the due date the bill is dishonoured, the bank paying 10 as noting charges. Rohit agrees to accept 2,130 in cash(including 130 for noting charges and interest) and another promissory note for 2

3 4,000 at 2 months. On the due date, Mohit approaches Rohit again and asks for renewal of bill for a further period of 3 months. Rohit agrees to the request, provided Mohit pays 200 as interest in cash. This last bill is paid on maturity. Draft journal entries in the books of Rohit. (6) 11. Mention whether the following statements are items of capital, revenue or deferred revenue expenditure: i) Expenditure incurred on repairs and whitewashing of a factory. ii) Registration charges paid for the purchase of a building. iii) Depreciation charged on plant. iv) Advertising expenditure incurred, the benefit of which is likely to last for four years. v) Payment of rent. vi) Purchase of goods by an enterprise. (6) 12. a) Opening Stock 30,000; Purchases 54,600; Expenses on Purchases 6,000; Sales 90,000; Expenses on sales 3,000; Closing Stock 36,600. Calculate Cost of Goods Sold and Gross Profit. b) Opening Stock 15,000; Sales 48,000; Carriage Inwards 3,000; Sales Return 3,000; Gross Profit 18,000; Purchases 30,000; Purchases Return 2,700. Calculate Closing Stock and cost of goods sold. (6) 13. From the following balances of M/s Baljit Brothers. You are required to prepare Trading and Profit and Loss account and a Balance Sheet at March 31, Debit Balances Amount( ) Credit Balances Amount( ) Plant and Machinery 1,30,000 Sales 3,00,000 Debtors 50,000 Return outwards 2,500 Interest 2,000 Creditors 2,50,000 Wages 1,200 Bills Payable 70,000 Salary 2,500 Provision for bad debts 1,550 Carriage inwards 500 Capital 2,20,000 Carriage outwards 700 Rent received 10,380 Return inwards 2,000 Commission received 16,000 Factory rent 1,450 Office rent 2,300 Insurance 780 Furniture 22,500 Buildings 2,80,000 Bills receivables 3,000 Cash in hand 22,500 Cash at bank 35,000 Commission 500 Opening Stock 60,000 Purchases 2,50,000 3

4 Bad Debts 3,500 8,70,430 8,70,430 Adjustments: i) Further bad debts 2,000 and create a provision of bad 5% ii) Rent received in advance 6,000. iii) Prepaid insurance 200. iv) Depreciation on plant and v) Closing Stock 70,000. (8) 4

5 Second mid Semester Examination 2018 Marking Scheme Accountancy Class: XI T.M=50 1) i) To discount the bill ii) To endorse the bill [ ½ 2 =1] 2) 3 rd march )i) In the order of liquidity ii) In the order of permanence[ ½ 2 =1] 4)The total of sales book has not been posted to the sales book [1] Distinguish between Capital expenditure and Revenue expenditure ( Any Three; 3 1=3) 5)i)Capital expenditure increases earning capacity of business whereas revenue expenditure is incurred to maintain the earning capacity. ii) Capital expenditure is incurred to acquire fixed assets for operation of business where as revenue expenditure is incurred on day to day conduct of business iii) Capital expenditure is non-recurring by nature. Revenue expenditure is generally recurring expenditure iv) Capital expenditure benefits more than one accounting year whereas revenue expenditure normally benefits one accounting year. 6) Date Particulars L.F Dr. Cr. Marks i Ramesh a/c Dr. 360 To Purchases a/c (Being credit purchase of 1040 from Ramesh was passed in the books as 1400, now rectified) ii Sample or Advertising a/c Dr To Purchases a/c ( Being the distribution of goods as sample cost 5000, sales price 6,000,now rectified) iii Building Dr. To Wages a/c ( Being the wages for construction 20,000 20,000 1

6 of building wrongly debited to wages account, now rectified) 7) Total sales 1,20, ,000=2,00,000 Let the cost be, gross profit =33 1/3 % Sales= 1331/3% Gross profit = 2,00, /3/1331/3 = 2,00,000 ¼=50,000 [1 mark] Cost of goods sold = Sales Gross profit = 2,00,000-50,000 = 1,50,000 [1 mark] Closing stock= opening stock + Purchases cost of goods sold = 1,80,000-1,50,000=30,000 [2 mark] Calculation of cost of goods sold carries 2 marks and calculation of closing stock carries 2 marks 8) Profit and Loss a/c for the year ended 31 st March 2016 Particulars Amount Particulars Amount marks Bad debts mark( + Further bad debts 500 mark for + New provision each item Balance sheet as at 31 st March 2016 Particulars Amount Particulars Amount marks Debtors 60,000 2 mark( -Further bad debts 500 -New provision mark for each item) 9) Journal Date Particulars L.F Dr. Cr. i) Interest on capital a/c Dr To Capital a/c 9600 ( Being interest on capital allowed 12% for the whole year) ii) Investment a/c Dr. To Interest on investment ( Being interest on investment still mark 1 mark

7 receivable for 3 months) iii) Interest on loan a/c Dr. To Loan a/c ( Being outstanding interest on loan for mark iv) Drawings a/c..dr. To Interest on drawings a/c 1 mark ( Being interest on drawings charged) 10) Date Particulars L.F Dr. Cr Karan a/c Dr. 23,000 Dec1 To sales a/c 23,000 ( Being goods sold to Karan) Dec1 B/R a/c Dr. To Karan a/c ( Being Karan acceptance received) 23,000 23,000 Dec1 Bank a/c Dr. Discount Dr. To B/R ( Being the bill discounted) 22, , Feb 4 Karan a/c..dr. To bank ( Being karan acceptance dishonoured) Feb.4 Karan a/c.dr. To Interest a/c ( Being interest credited on account) Feb.4 Apr.1 B/R.Dr. To Karan a/c ( Being new acceptance received) Karan a/c..dr. To B/R a/c ( Being the second bill cancelled)

8 Apr.1 Cash a/c Dr. To Karan a/c ( Being cash received from karan) Apr.1 Karan a/c..dr. To Interest a/c ( being interest due from karan) Apr.1 B/R a/c..dr. To Karan a/c ( Being bill from Karan received) 13,985 13,985 May 4 Cash a/c.dr. To B/R a/c ( Being the third bill met on due date) 13,985 13,985 11) Date Particulars L.F Dr. Cr. Marks i Laptop a/c Dr. 350 To Office expenses a/c 350 ( Being laptop purchased wrongly debited to office expenses a/c) ii Suspense a/c.dr. To Mohan ( Being excess amount debited to Mohan s account,now rectified) iii iv Sales a/c..dr. To Suspense a/c ( Being the correction of over cast of sales book) B a/c Dr. To sales a/c ( Being cash sales to B wrongly credited to Personal a/c, now its corrected) Sales Return a/c.dr. Sales a/c Dr. To Suspense a/c ( Being the amount of sales return wrongly credited to sales a/c, now its rectified)

9 v vi Sales Return a/c.dr. To C s a/c ( Being goods returned by C omitted to be recorded in books, now its rectified) Suspense a/c Dr. To sales Return a/c (Being the correction of overcast of sales return book) Suspense a/c(1mark) Particulars Amount Particulars Amount Difference in trial balance() Mohan a/c(1/4) Sales Return a/c(1/4) 1060 Sales a/c(1/4) Sales Return a/c(1/4) Sales a/c(1/4) ) Journal of David Date Particulars L.F Dr. Cr. marks 2016 B/R I Dr Jan.1 B/R II Dr. 00 To Thomas ( Being bills due on 4 th march and 4 th April accepted by Thomas) Mar.4 Thomas a/c Dr To B/R I 6000 ( Being cancellation of B/R 1 upon renewal)

10 Mar.4 Mar.4 Thomas a/c..dr. To Interest a/c ( Being the interest due 6000@18%) B/R III a/c.dr. To Thomas a/c ( Being B/R III due on 7 th may accepted by Thomas in lieu of bill already cancelled) Mar.20 May 7 Cash a/c Dr. Rebate a/c Dr. To B/R II ( Being the amount received on retirement of B/R before due date) Thomas a/c Dr. To B/R III ( Being the B/R III dishonoured) 9, , Thomas account [1.75 marks] Particulars Amount Particulars Amount B/R I Interest B/R III B/R I B/R II B/R III Balance c/d 9,820 22,180 22,180 Each posting carries ¼ marks[ marks=1.75]

11 13) Trading and profit and Loss Account for the year ending 31 st March 2017 Particulars Amount Particulars Amount Marks Opening Stock Purchases 92,600 (-)Returns 1,600 (-) Goods distributed to Sales Closing Stock 1,55, ¼ each ( ) staff , marks Carriage inward Power Wages O/S 2500 Gross profit c/d 8,500 83,800 Interest on bank loan Salary 15,000 + O/S salary 700 Insurance Premium 3900 (-) Prepaid 300 Rent 22,000 + o/s Rent 2000 Depreciation on Machinery Staff welfare expenses Manager s Commission (36,300 10/110) Net Profit 2,20,000 2,20, Gross Profit b/d 83,800 Discount ,700 3,600 24, ,000 84,600 84,600 ¼ each ( ) 3.25 marks O/S wages O/S salary O/S Rent O/S Manager s Commission Creditors 8% Bank Loan 25,000 Balance sheet as at 31 st March 2017 [ 2marks] Liabilities Amount Assets Amount mark ,300 20,300 30,400 26,500 Cash in hand Prepaid Insurance Closing stock Debtors Machinery 60,000 (-) Dep Furniture 57,000 14,000 Each item carries 0.11 marks 2 marks

12 + O/s interest 1500 Capital 90,000 (-) Drawing 28,000 + N.P 33,000 95,000 ( ) 1,60,400 1,60,400

THE INDIAN COMMUNITY SCHOOL, KUWAIT

THE INDIAN COMMUNITY SCHOOL, KUWAIT SERIES : II MTE / FN/2017-2018 CODE : M 055 TIME ALLOWED : 2 HOURS NAME OF STUDENT : MAX. MARKS : 50 ROLL NO. :.. CLASS/SEC :.. NO. OF PAGES : 5 ACCOUNTANCY ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~