2015 – Regular & Privatea4accounting.weebly.com/uploads/7/1/2/8/7128209/xi-2015.pdf2015 –...

2015 – Regular & Private

2015-RP

XI – ACCOUNTING SOLUTION COMPILED AND SOLVED BY: SAMEER HUSSAIN

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Compiled & Solved by: Sameer Hussain www.a4accounting.weebly.com

www.facebook.com/a4accounting.net [email protected]

X I – A c c o u n t i n g – 2 0 1 5 ( R e g u l a r & P r i v a t e )

Page 1

ACCOUNTING – 2015

REGULAR & PRIVATE Time: 20 Minutes Max. Marks: 20

SECTION “A” (MULTIPLE CHOICE QUESTIONS) Note: (i) This section contains of 20 part questions and all are to be answered. Each question carries equal marks. (ii) Do not copy down the part question in your answer book. Write only the answer in full against the proper number of the question and its part. (iv) The code of your question paper must be mentioned in bold letters in the beginning. Q.No.1 Choose the correct answer for each from the given options:

(1) This is a merchandising business: (a) Motor workshop. (b) Estate agency. (c) Medical store. (d) Beauty parlour.

(2) This is not an asset:

(a) Accounts receivable. (b) Cash. (c) Unearned commission. (d) Unexpired rent.

(3) Normally, this account has a debit balance:

(a) Loan to Ahmed. (b) Loan from Ali. (c) Bank overdraft. (d) Purchase discount.

(4) Capital + Liabilities – Assets = :

(a) 0. (b) 1. (c) 2. (d) 3.

(5) Assets are equal to the sum of liabilities plus:

(a) Profit. (b) Owner’s equity. (c) Expenses. (d) Revenue.

(6) The right of outsiders on assets of business is called:

(a) Capital. (b) Liability. (c) Asset. (d) Income.




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(7) Unearned revenue is a/an: (a) Liability. (b) Asset. (c) Owner’s equity. (d) Income.

(8) Accrued income appears in balance sheet as a/an:

(a) Liability. (b) Capital. (c) Contra asset. (d) Asset.

(9) Ending inventory in balance sheet is shown as:

(a) Liability. (b) Income. (c) Asset. (d) Capital.

(10) Unsold goods at end are called:

(a) Purchases. (b) Cost of goods sold. (c) Closing inventory. (d) Opening inventory.

(11) The arithmetic accuracy of accounts is verified by:

(a) Balance sheet. (b) Income statement. (c) Journal. (d) Trial balance.

(12) This is not shown in balance sheet:

(a) Cash. (b) Inventory. (c) Building. (d) Rent expense.

(13) The process of recording transaction in journal is called:

(a) Posting. (b) Balancing. (c) Footing. (d) Journalizing.

(14) Advertisement paid in advance is debited to the account for:

(a) Prepaid advertisement. (b) Advertisement expenses. (c) Accrued advertisement. (d) Selling expenses.




Page 3

(15) Rs.500 withdrawn by the owner for private use is credited to: (a) Drawing account. (b) Expense account. (c) Cash account. (d) Capital account.

(16) Under the imprest system, petty cash fund is periodically:

(a) Closed. (b) Opened. (c) Replenished. (d) Reduced.

(17) This is a book of secondary entry:

(a) Trial balance. (b) Subsidiary ledger. (c) Sales journal. (d) General journal.

(18) Allowance for bad debts is:

(a) Revenue. (b) Contra asset. (c) Liability. (d) Expense.

(19) Contra entries are recorded in:

(a) Sales journal. (b) Cash book. (c) General journal. (d) Petty cash book.

(20) Outstanding cheque is:

(a) Unpresented cheque. (b) Dishonoured cheque. (c) Deposit in transit. (d) Cheque in clearing.




Page 4

ACCOUNTING – 2015

REGULAR & PRIVATE Time: 2 Hours 40 Minutes Max. Marks: 80

SECTION “B” (SHORT – ANSWER QUESTIONS) (50) Note: Attempt any Four questions. All questions carry equal marks. The use of calculator is allowed. Q.No.2 ACCOUNTING EQUATION For each of the following determine the underlined missing item:- (a) The liabilities of a business entity having assets of Rs.400,000 and owner’s equity of Rs.180,000. (b) The assets of business entity having liabilities of Rs.100,000 and owner’s equity of Rs.200,000. (c) The owner’s equity of business having assets of Rs.200,000 and liabilities of Rs.70,000. (d) The revenues of business entity having expenses of Rs.120,000 and net income of Rs.30,000. (e) The expenses of a business entity having revenues of Rs.180,000 and net loss of Rs.16,000. (f) Sales revenue of a business entity having cost of goods sold Rs.210,000 and gross loss of

Rs.10,000 SOLUTION 2

(i) Liabilities = Assets – Owner’s equity Liabilities = 400,000 – 180,000 Liabilities = 220,000

(ii) Assets = Liabilities + Owner’s equity

Assets = 100,000 + 200,000 Assets = 300,000

(iii) Owner’s equity = Assets – Liabilities Owner’s equity = 200,000 – 70,000 Owner’s equity = 130,000

(iv) Revenue = Expenses + Profit Revenue = 120,000 + 30,000 Revenue = 150,000

(v) Expenses = Revenue + Loss Expenses = 180,000 + 16,000 Expenses = 196,000

(vi) Sales revenue = Cost of goods sold – Gross loss Sales revenue = 210,000 – 10,000 Sales revenue = 200,000

Q.No.3 GENERAL JOURNAL The following are transactions completed by Ali Air Conditioners: 2014 Dec. 01 Invested cash Rs.120,000 and shop equipment worth Rs.80,000. Dec. 03 Paid shop rent for the month Rs.10,000. Dec. 15 Received repair income in cash Rs.20,000 for the service rendered during the first

fortnight. Dec. 25 Rendered services for Rs.30,000 on credit.




Page 5

Dec. 28 Paid salaries Rs.10,000. Dec. 30 Received cash Rs.20,000 on account. Dec. 31 Rendered services for cash Rs.50,000 during the last fortnight. REQUIRED Record the above transactions in General Journal (standard form). SOLUTION 3

ALI AIR CONDITIONER GENERAL JOURNAL

FOR THE MONTH OF DECEMBER 2014

Date Particulars P/R Debit Credit

Dec. 01 Cash 120,000 Shop equipment 80,000 Capital 200,000 (To record the investment by owner)

Dec. 03 Prepaid shop rent 10,000 Cash 10,000 (To record the rent paid in advance)

Dec. 15 Cash 20,000 Repair income 20,000 (To record the repair income received)

Dec. 25 Repair income receivable 30,000 Repair income 30,000 (To record the services rendered on account)

Dec. 28 Salaries expense 10,000 Cash 10,000 (To record the salaries paid to employees)

Dec. 30 Cash 20,000 Repair income receivable 20,000 (To record the cash collected from customer)

Dec. 31 Cash 50,000 Repair income 50,000 (To record the repair income received)

Q.No.4 TRIAL BALANCE The following balances appeared in the accounts of Raza Traders on April 01, 2015: Bank Rs.220,000; Office supplies Rs.2,000; Office equipment Rs.32,000; Advertising payable Rs.2,000; Raza Capital Rs.? The transactions completed during the month were as follows: Apr. 01: Purchased office equipment on credit from A.B. & Co. Rs.10,000. Apr. 05: Returned office equipment purchased on 1st April Rs.2,000. Apr. 15: Issued cheque in payment of accounts payable Rs.5,000. Apr. 20: Received consulting fee income and deposited in bank Rs.1,900. Apr. 25: Issued cheque against advertising payable Rs.1,500. REQUIRED

(a) Compute Raza capital on April 1. (b) Prepare trial balance on April 30.




Page 6

SOLUTION 4 (a) Computation of Capital: Assets: Bank 220,000 Office supplies 2,000 Office equipment 32,000

Total assets 254,000 Less: Liabilities: Advertising payable (2,000)

Capital 252,000

SOLUTION 4 (b)

RAZA TRADERS TRIAL BALANCE

FOR THE MONTH ENDED APRIL 30, 2015

NO. PARTICULARS P/R DEBIT CREDIT

1 Bank 215,400 2 Office supplies 2,000 3 Office equipment 40,000 4 Advertising payable 500 5 Accounts payable 3,000 6 Raza Capital 252,000 7 Consulting fee income 1,900

Total 257,400 257,400

Additional Working:

RAZA TRADERS GENERAL JOURNAL

FOR THE MONTH OF APRIL 2015


Apr. 01 Office equipment 10,000 Accounts payable (A.B. & Co.) 10,000 (To record the purchase of equipment on account)

Apr. 05 Accounts payable (A.B. & Co.) 2,000 Office equipment 2,000 (To record the equipment return)

Apr. 15 Accounts payable 5,000 Bank 5,000 (To record the payment of accounts payable)

Apr. 20 Bank 1,900 Consulting fee income 1,900 (To record the receipt of fee income)

Apr. 25 Advertising payable 1,500 Bank 1,500 (To record the payment of advertising payable)




Page 7

RAZA TRADERS GENERAL LEDGER

Bank

Apr. 01 Balance 220,000 Apr. 15 Accounts payable 5,000 Apr. 20 Consulting fee income 1,900 Apr. 25 Advertising payable 1,500 Apr. 30 Balance c/d 215,400

221,900 221,900

May. 01 Balance b/d 215,400

Office Supplies

Apr. 01 Balance 2,000 Apr. 30 Balance c/d 2,000

2,000 2,000


Office Equipment

Apr. 01 Balance 32,000 Apr. 05 Accounts payable 2,000 Apr. 01 Accounts payable 10,000 Apr. 30 Balance c/d 40,000

42,000 42,000


Advertising Payable

Apr. 25 Bank 1,500 Apr. 01 Balance 2,000 Apr. 30 Balance c/d 500

2,000 2,000

May. 01 Balance b/d 500

Accounts Payable

Apr. 05 Office equipment 2,000 Apr. 01 Office equipment 10,000 Apr. 15 Bank 5,000 Apr. 30 Balance c/d 3,000

10,000 10,000


Capital

Apr. 01 Balance 252,000 Apr. 30 Balance c/d 252,000

252,000 252,000


Consulting Fee Income

Apr. 20 Bank 1,900 Apr. 30 Balance c/d 1,900

1,900 1,900





Page 8

Q.No.5 CASH BOOK Mr. Yasir, a sole trader, uses three column cash book for his business. On June 1, 2014 he had cash on hand Rs.25,000 and cash in bank Rs.35,000. During the month he completed the following transactions: June 06: Received a cheque from Israna Co. for Rs.2,400 and allowed them discount Rs.100. June 11: Deposited Israna Co.’s cheque in the bank. June 15: Issued a cheque for Rs.2,500 to Kafeel Co. in full settlement of their account of

Rs.3,000. June 27: Deposited cash into bank Rs.10,000. June 27: Withdrew from bank for personal use Rs.3,000. June 20: Withdrew cash from the bank for office use Rs.5,000. REQUIRED

(a) Enter the opening balances and record the above transactions in a three column cash book. (b) Balance the cash book on June 30, 2014 bringing down the cash and bank balances on July

01, 2014. SOLUTION 5




Page 9

MR. YASIR THREE COLUMN CASH BOOK

FOR THE MONTH OF JUNE 2014 B

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Page 10

Q.No.6 SPECIAL JOURNALS The following are selected transactions of Liaquat & Company for April 2015: April 01: Sold merchandise on account to Mr. Ahmed Rs.4,000. April 04: Sold merchandise on account to Mr. Basit Rs.5,000 April 08: Merchandise returned by Mr. Ahmed Rs.100. April 10: Sold the old typewriter by cash Rs.500. April 12: Sold merchandise on account to Mr. Mubeen Rs.2,000. April 16: Merchandise returned by Mr. Basit Rs.800. April 19: Sold merchandise for cash Rs.3,000. April 23: Sold merchandise to Mr. Ahmed on account for Rs.6,000. April 30: Returned merchandise from Mr. Mubeen Rs.700. REQUIRED

a) Record the above transactions as the case may be in: (i) Sales journal. (ii) Sales return and allowances journal.

b) Prepare in the running balance form the accounts of Mr. Ahmed in account receivable subsidiary ledger.

SOLUTION 6 (a)

LIAQUAT & COMPANY SALES JOURNAL


Date Invoice No. Name of Customers P/R Amount

April 01 Mr. Ahmed 4,000 April 04 Mr. Basit 5,000 April 12 Mr. Mubeen 2,000 April 23 Mr. Ahmed 6,000

April 30 Accounts receivable Dr. 17,000 Sales Cr.

LIAQUAT & COMPANY

SALES RETURN AND ALLOWANCE JOURNAL FOR THE MONTH OF APRIL 2015

Date Credit Note Name of Customers P/R Amount

April 08 Mr. Ahmed 100 April 16 Mr. Basit 800 April 30 Mr. Mubeen 700

April 30 Sales return and allowance Dr. 1,600 Accounts receivable Cr.

SOLUTION 6 (b)

LIAQUAT & COMPANY SUBSIDIARY LEDGER – ACCOUNTS RECEIVABLE


Mr. Ahmed

Date Invoice No. Particulars P/R Debit Credit Balance

April 01 Sales SJ 4,000 --- 4,000 April 08 Sales return SRJ --- 100 3,900 April 23 Sales SJ 6,000 --- 9,900




Page 11

Q.No.7 BANK RECONCILIATION Following is the information provided by Muqeem Co. at April 30, 2015 for preparation of bank reconciliation statement:

(i) On April 30, bank statement showed overdraft balance of Rs.8,500 and cash book had a balance of Rs.13,650.

(ii) Deposit in transit Rs.80,000. (iii) A debit memo for Rs.1,500 accompanied the bank statement for locker rent. The bank

had erroneously charged this to Muqeem Co. instead of Muqeem Bros. (iv) The bank charged Rs.100 for services. (v) Outstanding cheque Rs.48,000. (vi) A direct remittance in bank account Rs.8,000 by a customer. (vii) Dividend collected by the bank on behalf of the company Rs.3,000 but not recorded in

cash book. (viii) A cheque for Rs.720 of Azeem deposited in the bank was erroneously recorded in cash

book Rs.270. REQUIRED Prepare bank reconciliation statement. SOLUTION 7

MUQEEM CO. BANK RECONCILIATION STATEMENT


Particulars Cash Book Pass Book

Unadjusted balance on 30 April 2015 13,650 (8,500) Add: Deposit in transit (ii) 80,000 Add: Error by bank (iii) 1,500 Less: Service charges (iv) (100) Less: Outstanding cheques (v) (48,000) Add: Accounts receivable (direct deposit) (vi) 8,000 Add: Dividend income (vii) 3,000 Add: Error in deposit (viii) 450

Adjusted balance 25,000 25,000

SECTION “C” (DETAILED – ANSWER QUESTIONS) (30) Note: Attempt the following question which is compulsory. Q.No.8 FINANCIAL STATEMENT AND CLOSING PROCESS Balances extracted from the ledger of Mustafa Traders on March 31, 2015 before adjustments are as follows: Debit Balances: Cash Rs.100,000; Merchandise inventory April 01, Rs.80,000; Office equipment Rs.300,000; Purchases Rs.520,000; Salaries expense Rs.55,000; Office supplies Rs.5,000; Prepaid insurance Rs.12,000; Accounts receivable Rs.200,000; Sales returns and allowances Rs.5,000; Furniture Rs.173,000; Mustafa drawings Rs.50,000; Transportation – in Rs.4,000; Rent expense Rs.50,000 Total Rs.1,554,000. Credit Balances: Sales Rs.750,000; Purchases returns and allowances Rs.5,000; Musfata capital Rs.600,000; Allowance for depreciation (office equipment) Rs.25,000; Accounts payable Rs.170,000; commission income Rs.4,000 Total Rs.1,554,000. Data for Adjustment on March 31, 2015:

(i) Merchandise inventory was values at Rs.100,000. (ii) Salaries payable Rs.5,000.




Page 12

(iii) Commission accrued Rs.1,000. (iv) Office supplies unused Rs.2,000. (v) Insurance expired Rs.8,000. (vi) Depreciation on office equipment for the year was estimated at Rs.5,000.

REQUIRED Prepare any two of the following: (i) Closing entries in General Journal. (ii) Income statement. (iii) Balance sheet. SOLUTION 9 (i)

MUSTAFA TRADERS CLOSING ENTRIES

FOR THE PERIOD ENDED MARCH 31, 2015


1 Expense and revenue summary 735,000 Merchandise inventory beginning 80,000 Purchases 520,000 Salaries expenses 60,000 Sales returns and allowances 5,000 Transportation – in 4,000 Rent expense 50,000 Office supplies expenses 3,000 Insurance expenses 8,000 Depreciation expense 5,000 (To close the various expense accounts)

2 Sales 750,000 Purchases returns and allowances 5,000 Commission income 5,000 Merchandise inventory ending 100,000 Expense and revenue summary 860,000 (To close the revenue account)

3 Expense and revenue summary 125,000 Mustafa Capital 125,000 (To close the expense and revenue summary

account)

4 Mustafa Capital 50,000 Mustafa Drawings 50,000 (To close the drawings account)

SOLUTION 9 (ii)

MUSTAFA TRADERS INCOME STATEMENT

FOR THE PERIOD ENDED 31 MARCH 2015 Sales 750,000 Less: Sales returns and allowances (5,000)

Net sales 745,000 Less: Cost of Goods Sold: Merchandise inventory beginning 80,000 Add: Net Purchases: Purchases 520,000 Add: Transportation – in 4,000

Delivered purchases 524,000




Page 13

Less: Purchases returns and allowances (5,000)

Net purchases 519,000

Merchandise available for sale 599,000 Less: Merchandise inventory ending (100,000)

Less: Cost of goods sold (499,000)

Gross profit 246,000 Less: Operating Expenses: Salaries expense (55,000 + 5,000) 60,000 Office supplies expense 3,000 Rent expenses 50,000 Insurance expense 8,000 Depreciation expense 5,000

Total operating expenses (126,000)

Profit from operation 120,000 Add: Other Income: Commission income (4,000 + 1,000) 5,000

Net profit 125,000

SOLUTION 9 (iii)

MUSTAFA TRADERS BALANCE SHEET

AS ON 31 MARCH 2015

ASSETS EQUITIES

Current Assets: Liabilities: Cash 100,000 Accounts payable 170,000 Accounts receivable 200,000 Salaries payable 5,000

Merchandise inventory 100,000 Total liabilities 175,000 Office supplies 2,000 Prepaid insurance 4,000 Owner’s Equity: Commission receivable 1,000 Capital 600,000

Total current assets 407,000 Add: Net profit 125,000

725,000 Fixed Assets: Less: Drawings (50,000)

Office equipment 300,000 Total owner’s equity 675,000 Less: All for depreciation (30,000) Book value of equipment 270,000 Furniture 173,000

Total fixed assets 443,000

Total assets 850,000 Total equities 850,000




Page 14

Additional Working: MUSTAFA TRADERS ADJUSTING ENTRIES

FOR THE PERIOD ENDED MARCH 31, 2015


1 Merchandise inventory 100,000 Expense and revenue summary 100,000 (To close the ending inventory)

2 Salaries expense 5,000 Salaries payable 5,000 (To adjust the unpaid salaries)

3 Commission receivable 1,000 Commission income 1,000 (To adjust the accrued commission income)

4 Office supplies expense 3,000 Office supplies 3,000 (To adjust the office supplies)

5 Insurance expense 8,000 Prepaid insurance 8,000 (To adjust the prepaid insurance)

6 Depreciation expense 5,000 Allowance for depreciation – Office equipment 5,000 (To adjust the depreciation expense)

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