Accounts - 1998 (I.C.S.E)
You on questions 1 to 3

Time allowed: 2 hours

Answers to this paper must be written on the paper provided separately.
-You will NOT be allowed to write during the first 15 minutes.
-This time is to be spent in reading the question paper.
-The time given at given at the head of this paper is the time allowed for writing the answers.
-All working, including rough work, must be clearly shown ; it should be done immediately before/after the rest of the answers.

PLEASE ALSO NOTE that parts of the same questions MUST BE DONE continuously so as to facilitate evaluation
- Attempt all questions from Section A and two questions form Section B.
- The intended marks for questions or parts of questions are given in brackets [  ].

SECTION - A

Q 1(a) The following questions has to be answered using two columns.Rewrite Column I in the order given.Column II contains descriptive phrases for items given in column I.Match the phrases to suit the items given in column I by selecting phrases from Column II. Ignore those that remain.
                            

Q 1(b) From each set given below ,pick out the odd one. Answer  in the given serial order :-

(i) Cost price of sales ; goods sold at cost price : Sales less returns inward ; materials   consumed

(ii) With reference to practical work in partnership firms : Interest on capital ; interest on loan borrowed from a partner ; Commission allowed to a partner ; Interest on current account charged to a partner.

(iii) Assets bought on credit ; Expenses incidential to the asset bought payable ; part of the assets bought on credit rejected  because defective ; payment due with reference to the assets ,made and recorded.

(iv)Direct expenses ; financial expenses ; Selling expenses ;Administrative expenses .

(v). Fixed instalment  method ; original cost price method ; Written down value method ; Straigth line method .

(vi) Pre paid  insurance ; Deffered Advertising ;pre received rent; unused Fuel.

(vii)Capital fund ;Special fund ;general fund ; Common fund

(viii) Freigth ; Octroi ;Sales tax ;imported Duty.

Q1(c) Write explanatory notes on :-
(i) Depreciation is accounted annually
(ii) Quick Ratio
(iii)fixed Capital method

Q 2 trial Balance of mr. j Junior as on 31.3.1997:-
                                                                           Debit                               Credit
factory power                                                          16000
Carrier charges                                                         2500       
Salaries                                                                  20400
Sales & purchase of goods                                     140000                                                                  267000
Machinery( mannufactured through
factory workers)                                                     120000
Discounts   received and allowed                                  5000                                                                        6000
Wages(manufacturing activity )                                 18000                 
Stock                                                                     25000
Commission                                                             3800
Insurance(1/4 is a personal expenses)                        8000
Goods taken home in Dec,1996                                                                    5000
Loose Tools (Fixed Assets)                                      11000
Returns of goods                                                         5000                                                                        6000
Debtors & Creditors                                                   45000                                                                     18000
Carriage on sales                                                      6000
Rent & Rates(paid during this year)                           10800
Bad Debts written off & recovered                                2000                                                                         1600
Investments as from 1-1-1997                                   80000
Bank accounts                                                           22000                                                                     10000
Drawings & Capital                                                     15000                                                                    237000
Bills Payable & Receivable                                            6000                                                                         4000
Income from Investments applicable @ 10%p.a                                                                     1800
Cash                                                                      2500    
                                                                             560200                          560200

  Compile Final Accounts, incorporating the following adjustments for the owner.
Adjustments:
(i) The expenditure per accounting year is as follows for -
               Rates          Rs 10000
               Rent           Rs   3000
(ii) Wages include Rs 5500 which was actually salaries and salaries are payable at the rate of Rs7000 per quarter for the 12 months of this accounting year.
(iii) An inventory of the godown on 31-3-1997 reflected stock value stated as Rs 50000. This included a personal consignment for Rs10000 (awaiting cartage to country home), wrongly listed in the unsold inventory.

SECTION - B

-Answer any two questions from the four question given below :
-Where required, stretch your answer for a question across the double sides of the writing paper to ensure neatness and consequent accuracy and speed in calculations.

Q 3 Give complete journal entries of the following sets, clearly indicating the sections and sub-sections to facilitate accurate corrections:
(a) (i) Furniture of book- value Rs10000 to be depreciated by Rs750 and sold for Rs8250 cash.
(ii) Office premises on lease for ten years, total cost Rs 1000000. Account for its annual depreciation in the fifth year of its use.


Q 3 (b) (i)Account for the year's net profit of Rs 250000 earned by a firm,M/s Shroff and Bros., so that the work of appropriation of profit as per the Articles of partnership can be completed.
(ii)Account for Rs 25000 set aside anually as General Reserve by the above firm.Ans:Date


Q 3 (c)(i) Account for the closing inventory reported as Rs88000, an overvaluation by 10%.
(ii)20% of debtors Rs 60000, long overdue , are to be written off as Bad Debts.
(iii)Close the following accounts for an accounting year :

Q 3(d) (i) give the adjustment entry for Honorarium expenses of Rs 80000 for a year of which Rs77000 only has been paid by the end of the year .
(ii) Account for the years surplus of Rs 55000

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