Capinew Account June13
Capinew Account June13
Roll No.
Maximum Marks - 50
From the following Trial Balance of the books of Laxmi Narain on 30th June 2012,
prepare Trading and Profit and Loss Account and a Balance Sheet.
Particulars
Laxmi Narains Capital and Drawings
Bills receivable
Dr. (Rs.)
Cr. (Rs.)
10,550
119,400
15
9,500
256,590
Returns Inwards
356,430
2,780
89,680
Commission
5,640
28,800
Salaries
11,000
Travelling Expenses
1,880
62,000
Stationery
2,000
Telephone Charges
1,370
5,870
Bad Debts
3,620
8,970
Creditors
59,630
6% loan
20,000
Wages
40,970
Cash in Hand
530
Cash at Bank
18,970
400
5,620
HKL
P.T.O.
(2)
561,100
561,100
Stock in Trade on 30th June 2012 was Rs. 128,960. Write off half of Mohans
Cheque. Create provision of 5 percent on Debtors. Manufacturing wages include
Rs. 1,200 for erection of new machinery purchased last year. Depreciate Plant and
Machinery by 5 percent and fixtures and fittings by 10 percent per annum.
Commission accrued Rs. 600 Interest on loan for the last two months is not paid.
Answer No. 1
Trading and Profit and Loss Account of Laxmi Narain
For the year ended 30th June 2012
Rs
Rs
Rs
Rs
To Opening stock
To Purchase
To Wages
Less: Machinery Erection
89,680
2,56,590
40,970
1,200
---------
39,770
By sales
Less Sales Returns
3,56,430
2,780
-------
By Closing Stock
1,28,960
96,570
4,82,610
To Salaries
To Travelling
To Stationery
To Telephone
To Bad debt
Add: Written off
To Interest & Discount
Add: Outstanding Interest
3,53,650
3,620
500
------5,870
200
--------
400
150
-------
11,000
1,880
2,000
1,370
4,82,610
96,570
6,240
4,120
6,070
3,075
250
5,620
1,500
897
65,028
1,02,810
1,02,810
Rs
Assets
Rs
Rs
Capital Account
Balance
Less Drawings
Cash in hand
Cash at bank
Sundry Debtors (Note 1)
1,19,400
10,550
HKL
530
18,970
58,425
(3)
--------108,850
Add Net profit
6 % Loan
Add: Outstanding Interest
65,028
---------20,000
200
----------
173,878
Closing stock
Bills Receivable
Prepaid Insurance
Accrued Commission
Plant & Machinery
Add: Erection Charges
Less Depreciation
20,200
Sundry creditors
59,630
1,28,960
9,500
150
600
28,800
1,200
1,500
--------8,970
897
--------
2,53,708
28,500
8,073
2,53,708
Working Notes:
1. Calculation of Sundry Debtors balance
Sundry Debtors
Less: Bad Debts written Off
Rs. 62,000
Rs.
500
----------------Rs. 61,500
Rs 3,075
----------------Rs. 58,425
=========
2.
a) Chandra, Dharma and Elizabeth were partners sharing profits in the ratio of 1/2 :
1/3 : 1/6 respectively. The Balance Sheet of the firm on 31st March, 2013 was as
follows:
Liabilities
Rs.
Assets
Sundry creditors
Bills payables
Reserve
Capital accounts:
Chandra
400,000
Dharma
300,000
Elizabeth
250,000
Stock
Furniture
Plant & machinery
950,000 Building
1,310,000
Rs.
25,000
160,000
5,000
155,000
250,000
80,000
350,000
450,000
1,310,000
(4)
v) Liability for workmen's compensation to the extent of Rs. 16,500 is to be
brought into account.
It was agreed that Chandra and Elizabeth will share profits in future in the ratio of
3/5 and 2/5 respectively.
(3+3+4=10)
Required:
(a) Revaluation Account;
(b) Partner's Capital Accounts; and
(c) Balance Sheet.
b) On 30th September, 2011, the bank account of X, according the bank
column of the Cash-Book, was overdrawn to the extent of Rs. 4,062. On the
same date the bank statement showed a credit balance of Rs. 1,400. An
examination of the Cash Book and Bank Statement reveals the following:
i) A cheque for Rs. 1,140 deposited on 29th September, 2011 was credited by
the bank only on 3rd October, 2011.
ii) A payment by cheque for Rs. 160 has been entered twice in the Cash Book.
iii) On 29th September, 2011, the bank credited an amount of Rs. 1,740 received
from a customer of X, but the advice was not received by X until 1st October,
2011.
iv) Bank charges amounting to Rs. 58 had not been entered in the Cash Book.
v) On 6th September, 2011, the bank credited Rs. 2,000 to X in error.
vi) A bill of exchange for Rs. 1,000 was discounted by X with his bank. This bill
was dishonored on 28th September, 2011 but no entry had been made in the
books of X.
vii) Cheques issued up to 30th September, 2011 but not presented for payment up
to that date totaled Rs. 3,760.
10
Required:
(a) to show the appropriate rectifications required in the Cash Book of X, to
arrive at the correct balance on 30th September, 2011 and
(b) to prepare a bank reconciliation statement as on that date.
Answer No. 2
a)
Revaluation Account
Particulars
To Plant & machinery
To furniture
To Provision for bad debts
To workmen compensation
To Partner's capital:
Chandra
Dharma
Rs.
35,000
12,000
19,500
16,500
6,000
4,000
HKL
Particulars
By Stock
By Building
Rs.
50,000
45,000
(5)
2,000 12,000
Elizabeth
95,000
95,000
Chandra
Rs.
To Dharma's loan
To Bal. c/d
Dharma Elizabeth
Rs.
Rs.
Particulars
Chandra
Rs.
Dharma
Rs.
Elizabeth
Rs.
- 404,000
556,000
-
- By Bal. b/d
302,000 By Reserve
By Goodwill
By Revaluation
400,000
60,000
90,000
6,000
300,000
40,000
60,000
4,000
250,000
20,000
30,000
2,000
556,000 404,000
302,000
556,000
404,000
302,000
Rs.
Assets
Rs.
Sundry creditors
Bills payable
Prov. for workmen compensation
Dharma's loan
Capital A/c:
Chandra
Elizabeth
404,000 Stock
Furniture
Plant & machinery
858,000 Building
300,000
68,000
315,000
495,000
Goodwill
180,000
556,000
302,000
25,000
160,000
24,500
1,518,500
b)
i.
1,518,500
Date
Particulars
2011
Sept. 30 To Party A/c
To Customer A/c
(Direct deposit)
To Balance c/d
Amount
160
1,740
Date
Particulars
2011
Sept. 30 By Balance b/d
By Bank charges
Amount
4,062
58
1
1
3,220
By Customer A/c
(B/R dishonored)
5,120
ii.
135,500
1,000
5,120
Particulars
Overdraft as per Cash Book
Less : Cheque deposited but not collected upto 30th Sept., 2011
HKL
-3,220
-1,140
(6)
Add : Cheques issued but not presented for payment up to 30th Sept., 2011
Add: Credit by Bank erroneously on 6th Sept.
Balance as per bank statement
-4,360
3,760
2,000
1,400
3.
a) Mr. Maharjan was unable to agree the Trial Balance last year and wrote off the
difference to the Profit and Loss Account of that year. Next year, he appointed a
Chartered Accountant who examined the old books and found the following
mistakes:
i) Purchase of a scooter was wrongly debited to conveyance account Rs. 30,000.
ii) Purchase account was overcast by Rs. 100,000.
iii) A credit purchase of goods from Mr. Ravi for Rs. 20,000 was entered as sale.
iv) Receipt of cash from Mr. Amar was posted to the debit of his account,
Rs. 5,000.
v) Payment of Rs. 23,950 for purchase was wrongly posted as Rs. 25,930.
Mr. Maharjan used to charge 10% depreciation on vehicles. Suggest the necessary
rectification entries.
5
(25=10)
Dr
Rs.
27,000
Cr
Rs.
27,000
100,000
100,000
40,000
40,000
(7)
sales last year now rectified)
Suspense A/c
To Amar's A/c
(Being Rs. 5,000 received from Amar wrongly debited to his
a/c; now rectified)
Suspense A/c
To Profit & Loss Adjustment A/c
(Being excess posting to purchase account last year, now
rectified)
Profit & Loss Adjustment A/c
To Capital A/c
(Being balance of Profit & Loss Adjustment A/c transferred to
Capital A/c)
Capital A/c
To Suspense A/c
(Being balance of Suspense A/c transferred to Capital A/c)
10,000
10,000
1,980
1,980
88,980
88,980
111,980
111,980
b)
(i) Money Measurement Concept
According to this concept, in the books of accounts only such transactions which are capable of
being expressed in monetary terms are recorded. In other words, the information which cannot
be expressed in the terms of money is not included in according records. This is, of course,
because money is the only universally known way of comparing values. It is a useful way of
converting accounting data into a common unit. Otherwise, it would be impossible to make any
fair comparisons between various types of assets, or different types of transactions. Monetary
terms are used because money acts as a common unit of measurements and the different
transactions expressed in different units are brought to a common unit of measurement.
(ii)
(iii) Endorsement
A cheque can be passed on by the payee to another person and by that person to someone else,
and so on, unless it is crossed "A/c Payee only" or the cheque otherwise restrict the payment to
a particular person only. A bearer cheque can be passed on by mere delivery nothing needs to
be written at the back of the cheque. If the cheque is made out in favour of any party or order,
that is, it is an order cheque; it can be passed on only by endorsement and delivery. A cheque
which has been "endorsed" but not delivered has not been really endorsed.
Endorsement means the writing of instructions to pay the cheque to a particular person and then
singing it. This is done at the back of the cheque. The signatures must have the same spelling as
mentioned on the face of the cheque.
HKL