Fundamentals of Accounting 5

A sent some goods costing Rs. 3,500 at a profit of 25% on sale to B on sale or return
basis. B returned goods costing to A Rs. 800. At the end of the accounting period i.e. on
31st December, 2016, the remaining goods were neither returned nor were approved by
him. The stock on approval will be shown in the balance sheet at

B Ltd. issued shares of Rs. 10 each. Mr. C purchased 30 shares and paid Rs. 2 on
application but did not pay the allotment money of Rs. 3 and further call money. If the
company forfeits his entire shares, the forfeiture account will be credited by

A draws a bill on B for Rs. 30,000. A wants to endorse it to C in settlement of Rs. 35,000 at
2% discount with the help of B’s acceptance and balance in cash. How much cash A will
pay to C?

P of Faridabad sent out goods costing Rs. 45,000 to Y of Delhi at cost + 331/3%. 1/10th of
goods were lost in transit. 2/3rd of the goods received are sold at 20% above invoice
price. The amount of sale value will be:

Rent paid on 1st October, 2015 for the year to 30th September, 2016 was
Rs. 1,200 and rent paid on 1st October, 2016 for the year to 30th September, 2017 was
Rs. 1,600. Rent paid, as shown in the profit and loss account for the year ended 31st
December 2016, would be:

If repair cost is Rs. 25,000, whitewash expenses are Rs. 5,000, cost of extension of
building is Rs. 2,50,000 and cost of improvement in electrical wiring system is
Rs. 19,000; the amount to be expensed in the books will be

A company forfeited 1,000 shares of Rs. 20 each (which were issued at par) held by
Mr. Mohan for non-payment of allotment money of Rs. 8 per share and further call
money. The called-up value per share was Rs. 18. On forfeiture, the amount debited to
share capital will be

It is essential to standardize the accounting principles and policies in order to ensure

G Ltd. acquired assets worth Rs. 7,50,000 from H Ltd. by issue of shares of Rs. 100 each
at a premium of 25%. The number of shares to be issued by G Ltd. to settle the
purchase consideration of assets will be_________

The following information pertains to X Ltd.:
Equity share capital called up – Rs. 5,00,000; Calls in arrear – Rs. 40,000; Calls in advance – Rs. 25,000; and Rate of dividend – 15%
The amount of dividend payable will be

The subscribed share capital of S Ltd. is Rs. 80,00,000 of Rs. 100 each. There were no
calls in arrear till the final call was made. The final call made was paid on 77,500 shares.
The calls in arrear amounted to Rs. 62,500. The final call on each share will
be_________

Ram’s acceptance to Dinesh for Rs 8,000 renewed for 3 months on the condition that
Rs. 4,000 be paid in cash immediately and the remaining amount will carry interest @
12% p.a. The amount of interest will be _________

A and B entered into a Joint Venture. A purchased goods costing
Rs. 2,00,000, B sold 4/5th of the same for Rs. 2,50,000. Balance goods were taken over
by B at cost less 20%. If same set of books is maintained, find out profit on venture.

Amit Ltd. purchased a machine on 1.1.2016 for Rs 1,20,000. Installation expenses were
Rs. 10,000. Residual value after 10 years Rs. 5,000. On 01.07.2016, expenses for
repairs were incurred to the extent of Rs. 2,000. Depreciation is provided under straight
line method. Annual Depreciation will be ________

Rs. 2,500 spent on the overhaul of a machine purchased second-hand is _________

Manufacturing account is prepared to—

Financial statements only consider

If sales revenue is Rs. 4,00,000; cost of goods sold is Rs. 3,10,000 and expenses are Rs. 60,000, the gross profit is

A & B are partners sharing profits and losses in the ratio of 5:3. After admission of C,
new profit sharing ratio between A, B and C is 7:5:4. The sacrificing ratio among A : B will be

Opening Stock – Rs. 20,000, Carriage on sales – Rs. 3,000,Closing Stock – Rs. 18,000, Rent of Office – Rs. 5,000
Purchases – Rs. 85,800, Sales – Rs. 1,40,700,Carriage on purchases – Rs. 2,300
Gross profit will be

When the shares are issued at premium and the premium has already received by the
company later on, if such shares are forfeited

X and Y share profits and losses in the ratio of 2 : 1. They take Z as a partner and the
new profit sharing ratio becomes 3 : 2 : 1. Z brings Rs. 4,500 as premium for goodwill.
The full value of goodwill will be

Annual insurance premium paid on January 1, 2015 was Rs. 2,400. What will be the
opening entry on April 01, 2015, if financial year ends on March, 31 every year.

Whenever errors are noticed in the accounting records, they should be rectified

In _______ method, depreciation is charged by allocating depreciable cost in proposition
of the annual output to the probable life-time output.

Sundry debtors on 31st March 2016 are Rs. 55,200. Further bad debts are Rs.200.
Provision for doubtful debts are to be made on debtors @ 5% and also provision of
discount is to be made on debtors @ 2%. The amount of provision of doubtful debts will be

The balance of machine on 31st March 2016 is Rs. 72,900 (after charging depreciation of the year).  The machine was purchased on 1st April 2013 charging depreciation @ 10%p.a. by diminishing balance method. The cost price of the machine as on 1st April 2013 would be

Estimated life of an asset is 10 years and estimated scrap value is Rs. 3,200.
Depreciation as per SLM is charged at Rs. 2,500 every year on the asset. Find the cost
of the asset.

R, J and D are partners sharing profits in the ratio 7:5:4. D died on 30th June 2016 and
profits for the accounting year 2015-2016 were Rs. 24,000. How much share in profits
for the period 1st April 2016 to 30th June 2016 will be credited to D’s Account?

Mr. A is a partner in a firm along with Mr. B. Both contributed capitals of
Rs. 40,000 and Rs. 50,000 respectively on the 1st of July, 2016. Interest on capital is to
be charged @ 10% p.a. Books of account are to be closed on 31st December, 2016. Interest on capital is

A purchased a computer costing Rs. 10,000. Repairing expenses Rs. 1,000 and
miscellaneous expenses Rs. 500 were incurred by him. He sold the computer at 20%
margin on selling price. The sales value will be

Following is the example of internal users of financial statements:

Unintentional omission or commission of amounts and accounts in the process of
recording transactions are known as

At the time of admission of a new partner, if the value of goodwill is shown in the books,
it is written back by ________

Mohit, the acceptor of the bill has to honour a bill on 31st March 2016. Due to financial
crisis, he is unable to pay the amount of bill of Rs. 20,000. Therefore, he approaches
Rohit on 20th March 2016 for extension of bill for further 3 months. Rohit agrees to extend
the credit period by drawing a new bill for Rs. 20,500 together with interest of Rs. 1,000
in cash. In this case, old bill of Rs. 20,000 will be considered as

E Ltd. had allotted 10,000 shares to the applicants of 14,000 shares on pro rata basis.
The amount payable on application is Rs.2. F applied for 420 shares. Calculate the
number of shares allotted and the amount carried forward for adjustment against
allotment money due from F.

The bill of Rs. 10,000 accepted by Ritesh on 1 July 2016, was discounted by Hitesh on
15 July 2016 for Rs. 9,600. On 4th October 2016, the bill was dishonoured and bank
notified it for Rs. 200. The amount to be received from Ritesh would be

Brave Ltd. issued 60,000 shares of Rs. 9 each. The application money was Rs. 2,
allotment money was Rs. 4, and first call was of Re.1. The amount of final call will be

Jadu Ltd. reissued 2,000 shares, which were forfeited by crediting Share forfeiture
account by Rs. 3,000. These shares were reissued Rs. 9 per share. The amount to be
transferred to Capital Reserve account will be

In the bank reconciliation statement, when balance as per the cash book is taken as the
starting point, then direct deposits from the customer of Rs. 2,500 in the bank will be

If a sales return of Rs. 1,500 has been wrongly posted to the credit of the purchase
returns account, but has been correctly entered in the debtors’ account, the total of the

The total cost of goods available for sale with a company during the current year is
Rs. 12,00,000 and total sales during the period is Rs. 13,00,000. If the gross profit
margin of the company is 331/3% on cost, the closing inventory during the current year is

On 31st March 2016, Suraj has to pay to M/s Chandra and Co. Rs. 7,000 on account of
credit purchase from the later. He paid Rs. 1,800 on 30th June 2016 after availing a cash
discount of 10%. On 30th September 2016, he paid Rs. 2,850 after availing 5% cash
discount. On account of final settlement, the amount to be paid by Suraj without any
discount will be

Which of the following is not a transaction?

Following figures have been taken from the trial balance of a trader:
Purchases Rs. 30,000,Purchase Returns Rs. 5,000,Sales Rs. 40,000,Sales Returns Rs. 5,000
The amount of profit will be

Radha, Seeta and Laxmi were partners sharing profits and losses in the ratio of 2:3:5.
Seeta retired on 1st June, 2016 and Goodwill of the firm is to be valued at Rs. 1,20,000
on that date. What will be the treatment for Goodwill ?.

The date of maturity of bill is 10th October, 2016. The Government of India suddenly
declared 10th October, 2016 as the holiday under the Negotiable Instruments Act, then
the bill will mature on _________

On 1.1.2016, a machine costing Rs. 10,000 and a piece of furniture costing Rs. 20,000
was purchased. Depreciation is provided @ 5% p.a. on furniture and 10% per annum on
machine. The depreciation for the year ended 31st March, 2016 should be:

Mr. A sent 250 units costing Rs. 10,000 each to Mr. B. Mr. B sold 150 units @ Rs. 14,200
per unit on credit and 75 units @ Rs. 14,000 for cash. Mr. B is entitled to a commission
Rs.500 per unit. The amount of commission will be:

Gama Ltd. issued 10,000, 10% debentures of Rs. 100 each at a discount of 10%. The
entire amount is payable on application. Application were received for 12,000
debentures. The allotment of debentures was made on 10th October, 2016. The amount
which should be credited to the debentures account on 10th October, 2016 will be:

On January 1, 2016 Victory Ltd., purchased a second hand machinery for Rs. 50,000 and
spend Rs. 2,000 as shipping and forwarding charges, Rs. 1,000 as import duty,
Rs. 1,000 as carriage inwards, Rs. 500 is repair charges, Rs. 200 as installation charges,
Rs. 400 as brokerage of the middle man and Rs. 100 for an iron pad. Total cost of
machinery is

If bank balance as per cash book differs from that appearing in the current account
statement, then the balance considered for finalizing the accounts is of

A company issued 1,00,000 equity shares of Rs.10 each at a premium of Rs. 2 and 5,000
10% Debentures of Rs. 100 each at 10% discount. All the shares and debentures were
subscribed and allotted by crediting 10% Debentures account with

3,000 shares of Rs. 10 each of Krishna were forfeited by crediting Rs. 5,000 to share
forfeiture account. Out of these, 1,800 shares were re-issued to Radhe for Rs. 9 per
share. The amount to be transferred to capital reserve account will be

He, She and Me are partners in a firm sharing profits and losses in the ratio of 5:3:2.
Firm took Separate Life Policy of Rs. 50,000, Rs.1,00,000 and Rs.1,50,000 for He, She
and Me respectively. The share of Me in the policy will be:

Find the goodwill of the firm using capitalization method from the following information:
Total capital employed in the firm Rs. 80,00,000
Reasonable rate of return 15%,Profits for the year Rs. 12,00,000

Opening stock of the year is Rs. 20,000, Goods purchased during the year is
Rs. 1,00,000, Carriage Rs. 2,000 and Selling expenses Rs. 2,000. Sales during the year
is Rs. 1,50,000 and closing stock is Rs. 25,000. The gross profit will be:

Depreciable amount of the machinery is Rs. 11,00,000. The machine is expected to
produce 30 lakhs units in its 10 year life and expected distribution of production units is
as follows:
1-3 year 5 lacs units each year
4-6 year 3 lacs units each year
7-10 year 1.5 lacs units each year.

Annual depreciation for 1-3 year, using production units method will be ______

18% investment of Rs. 1,00,000 and interest received on investment Rs. 15,000 have
been given in the trial balance for the period ended on 31.3.2016. The amount of interest
outstanding in the final accounts will be ______

If the profit is 25% of the cost price then it is