Principle of Accounting B.Com I -Part 1 Past Year Papers

B.Com I Accounting 2008 (Regular)

B.Com I Accounting

Instruction: Attempt any FIVE questions.

Q.1. WORK SHEET

Following are the date related to pre-closing Trial Balance and Adjusted Balance of Humna Associates for the month ended November 30, 2008.

Name of AccountsPre-closing Trial BalanceAdjusted Trial Balance
Cash ……………………… 4,980 ……………………… 4,980
Commission Receiv. …….. 3,000 ……………………… 3,850
Office Supplies …………… 600 ………………………… 240
Office Equipment ……….. 6,600 ……………………… 6,600
Accumulated Dep. ………………. | 2,420 …………………….. | 2,530
Accounts Payable ………………. | 1,660 …………………….. | 1,660
Salaries Payable ………………………………………………….. | 550
Unearned Commission ………….. | 400 ……………………….. | 190
Humna Capital ………………….. | 12,300 ……………………. | 12,300
Humna Drawing ……….. 1,000 ………………………. 1,000
Commission Earned …………….. | 6,900 ……………………… | 7,960
Salaries Expense ……… 6,000 ………………………. 6,550
Rent Expense …………. 1,500 ………………………. 1,500
Off. Supplies Exp. ……………………………………… 360
Depreciation Exp……………………………………….. 110
……………………….. 23,680 | 23,680 ……………. 25,190 | 25,190

Required:
i. Trace out data and prepare necessary adjusting entries.
ii. Prepare a Ten-Column worksheet from the above data

Q.2. DEPRECIATION

(a) Aneel Company purchased equipment for Rs. 7,00,000. The estimated resale value at the end of its useful life is Rs. 60,000. The company uses straight-line method for computing depreciation. The quarterly depreciation of the equipment is Rs. 20,000.

Required: Compute total life in years of the equipment.

(b) Qaiser Co. acquired a machine on Jan. 01, 2005 at a cost Rs. 5,50,000, its operating life was estimated to be 5 years with salvage of Rs. 50,000. The Company closes its accounts on December 31 each year and uses sum of year digits method for computing depreciation.
On June 30, 2008 the machine was exchanged with a new similar machine having a price of Rs. 7,00,000 and the trade in allowance of the old machine was agreed upon at 80% of its written down value / a book value.

Required:
(a) Calculate depreciation charge for the years ended Dec. 31, 2005, 2006, 2007 and up to June 30, 2008.
(b) Calculate balance to paid in cash.
(c) Give an entry to record exchange of the machine.

Q.3. BANK RECONCILIATION

The accountant of Fayyaz Co. has extracted the following data from its Cash record and its Bank Statement on Nov. 30, 2008:

i. Bank overdraft as per Cash Book Rs. 1,06,400.
ii. Bank overdraft as per Pass Book Rs. 10,000.
iii. Issued a cheque for Rs. 50,000 to a supplier (after the expiry of discount period), but it was wrongly entered in Cash Book as Rs. 49,000.
iv. A debit Memo for Rs. 5,000 accompanied the Bank Statement for locker rent; the bank had erroneously charged this to Fayyaz Co. instead of Fazi Co.
v. Deposited a customer’s cheque for Rs. 78,400 (after discount) deduction) but it was wrongly recorded in Cash Book as Rs. 80,000 as if it were received after discount period.
vi. A customer’s cheque for Rs. 2,00,000 deposited directly in bank was by mistake entered into cash column of the Cash Book.
vii. Issued a cheque for purchase of supplies for Rs. 10,000 was recorded on company’s record as Rs. 1,000.
viii. Mark-up charged by bank was not recorded by the company Rs. 2,000.
ix. Three cheques totaling Rs. 20,000 were issued to supplier, but only one cheque for Rs. 5,000 was presented to the bank by the last day of the month.
x. Four cheques totaling Rs. 1,20,000 were sent to the bank for collection but only one cheque for Rs. 20,000 was cleared and credited by the bank.

Required:
i. Prepare Bank Reconciliation statement for Nov. 30 2008.
ii. Pass necessary adjusting entries.

Q.4. VALUATION OF ACCOUNTS RECEIVABLE

On June 30, 2008 before closing the accounts, the Aiman Company shows the following selected account balanaces as under

Accounts Receivable – Control …………………………………. 6,00,000
Allowance for doubtful Accounts ………………………………… 10,000
Credit Sales ………………………………………………………. 10,00,000
Sales Discount ……………………………………………………… 50,000

On this date, following errors omissions were discovered:

i. The sale return and allowance for Rs. 50,000 were not recorded.
ii. Promissory Notes of Rs. 10,000 received from customers to apply on account remained unrecorded.

Required: Give
i. General Journal entries to correct the errors.
ii. Prepare adjusting entries and also prepare partial Balance Sheets at June 30, 2008 under each of the following assumptions separately.

i. Uncollectible account expense is estimated at 2% of net credit sales.
ii. Allowance for doubtful account is estimated at 10% of Accounts Receivable (corrected) at the year end.

Q.5. CLOSING ENTRIES AND INCOME STATEMENT

The following are the incorrect closing entries, prepared by an in-experienced accountant at the end of the year ended December 31, 2007.

Sales ………………………………………… 2,50,000
Sales Discount ……………………………….. 5,000
Open Inventory ……………………………… 10,000
Allowance for bad debts ……………………. 6,000
Drawing ……………………………………….. 1,000
Purchases ……………………………………. 53,000
Income Summary …………………………………………… | 3,25,000
Income Summary ……………………………. 26,000
Ending Inventory ……………………………. 15,000
Commission Income …………………………. 1,000
Salaries Expense …………………………………………… | 10,000
Depreciation Expense ……………………………………… | 5,000
Utility Expense ……………………………………………… | 4,000
Bad debts Expense ………………………………………… | 3,000
Allowance for Depreciation ……………………………….. | 20,000

Required:
i. Prepare FOUR correct closing entries.
ii. Prepare an Income Statement for the year ended December 31, 2007.

Q.6. INVENTORY VALUATION

(a) Rahat Equipment Co. provides you with the following inventory data

Date: 2008 ……………………………… Units ……….. Cost Per Unit
January 01 ………… Beginning ……….. 40 ………………. 1250
February 28 ………. Purchases ………. 100 ……………… 1220
June 25 ……………. Purchases ………. 85 ………………. 1200
November 11 …….. Purchases ……….. 110 …………….. 1800

The Inventory on Dec 31, 2008 of 50 Units.

Required: Determine the cost of

i. Cost of goods available for sale and
ii. Required to cost of ending inventory, using FIFO method, Periodic System.

(b) Bushra-Arshad Firm sells good at a gross profit of 40% of sales. Following are the information related to sale and purchase of merchandise for the month of November, 2008:

Sales (Net) during the month …………………………. 3,00,000
Merchandise Inventory (01-11-2008) ………………… 9,600
Purchase (Net) during the month …………………….. 1,92,000

During the month a certain class of merchandise costing to Rs. 12,000 was sold for Rs. 14,400. Expect for this sale, the gross profit on rest of the sales remained normal at 40%.

Required: Determine the cost of ending inventory by Gross Profit Method on November 30, 2008.

Q.7. PARTNERSHIP – ADMISSION

Following is the Balance Sheet on November 30, 2008 of the partnership firm of Talha and Tayyab who share point and loss in the ratio of their capitals.

Assets ………………………………………………………… Equities
Cash ………………………….. 50,000 | Capital Talha …………… 25,000
Other Assets ………………… 75,000 | Capital Tayyab ………. 1,00,000
………………………………. 1.25,000 | ………………………… 1,25,000

On this date they agree to admit Abdul Hadi as a partner.

Required: Give the required entries on the firm’s books to record the admission of Abdul Hadi and also prepare balance sheet after admission under each of the following assumptions separately.
(a) Abdul-Hadi purchase 1/4th of each old partner’s capital.
(b) The new partner invests Rs. 75,000 for a 1/3rd interest, in the total capital of the firm of Rs. 2,10,000.
(c) The new partner invests Rs. 1,00,000 for a 1/4th interest in the firm. Record bonus.

Q.8. CORRECTION OF ERRORS

(a) The following errors / omissions were made during 2007 and were discovered before closing of the books of accounts:

i. Sales return of Rs. 16,000 was charged to purchase.
ii. Outstanding Advertising expense were overlooked Rs. 45,000.
iii. Rs. 1,50,000 spent for the extension of building was debited to Building repairs accounts.
iv. Prepaid salary of Rs. 10,000 was included in Salary expense account.
v. Accrued Rent Income of Rs. 15,000 was overlooked.

Required: Pass rectifying entries in General Journal.

(b) The following errors were made during the year 2007 and were discovered in 2008:

i. Purchase of equipment for Rs. 2,50,000 was debited to Repairs Expense account in error. Because of this error, depreciation on Equipment Rs. 20,000 could not be recorded.
ii. Credit Purchase of merchandise of Rs. 1,70,000 was not recorded in 2007 although the goods were received and included in the ending inventory of 2007.
iii. Merchandise of Rs. 1,80,000 purchased in the month of December 2007 and included in the ending inventory of 2007, but the purchase was recorded on January 05, 2008.
iv. Ending Inventory of 2007 was understand by Rs. 5,000.

Required: Pass correcting entries in general journal entries in the year 2008.

 

B.Com I Accounting 2008 (Private)

B.Com I Accounting

Instructions: Attempt any FIVE questions.

Q.1. VALUATION ACCOUNTS RECEIVABLE

Given: Hadi Brothers furnished the following account balances and transactions concluded during 2008:

Accounts Receivable 01-01-2008 ………………………………. 1,50,000
Allowance for Bad Debts 01-01-2008 ……………………………. 6,400
Total Cash Collected from Customers …………………………… 3,95,000
Promissory notes received from customers
to apply on account ………………………………………………… 34,000
Credit balance in customers accounts end
the year, advance payments ………………………………………. 23,300
Customers account written off during the year ………………….. 3,600
Gross credit sales for the year …………………………………… 6,00,000
Sales return and allowance ……………………………………….. 32,400
Sales discount allowed to customers ………………………………4,500
Previously written off A/C receivable recovered …………………. 8,500

NOTE: Allowance for bad debts December 31, 2008 should be equal to 5% of the year end balance of accounts receivable account.

Required:
i. Make posting of the above transactions directly into the accounts receivable and the allowance for the bad debts accounts. Balance both the accounts on December 31, 2008.
ii. Prepare a journal entry to record the year end adjustment as required in the note. Prepare a partial balance sheet showing the accounts receivable and its Allowance for Bad Debts accounts.

Q.2. BANK RECONCILIATION

The accountant of Urooj Ltd. has extracted the following data from its Cash Book (Bank Column) and the Bank Statement on November 30, 2008:

i. Credit Balance (O.D.) as per Cash Book Rs. 74,000.
ii. Debit Balance (O.D.) as per Bank Statement Rs. 62,700.
iii. Bank charges not recorded by the Co. Rs. 1,200.
iv. Cheque deposited on November 30, 2008 but not shown on Bank Statement Rs. 28,000.
v. Deposit by a customer directly made in company’s account not recorded by the company Rs. 50,000.
vi. A cheque for purchase of supplies was drawn for Rs. 65,000 but was recorded on Company’s records as for Rs. 56,000.
vii. The Company Officer issued a cheque for Rs. 5,000 for traveling expenses. This cheque was not recorded by the Company.
viii. Cheque issued during November but not presented to the bank for payment Rs. 4,500.

Required:
i. Prepare a Bank Reconciliation Statement showing the corrected balances.
ii. Prepare necessary adjusting entries in the General Journal.

Q.3. Voucher System

Uroosa Company uses a voucher system for all major expenditures. selected transactions for June 2008 are presented below:

i. Paid a Note including accrued interest Rs. 41,500 (Face value of NOte was Rs. 40,000).
ii. Gave a 10% sixty day Note in settlement of outstanding voucher for Rs. 10,000.
iii. Drew a cheque for Rs. 5,000 to establish a petty cash fund.
iv. Purchased goods from Adnan Store for Rs. 60,000, making a down payment of Rs. 20,000 and agreeing to pay the balance in 15 days.
v. Received credit memorandum from Adnan Store for Rs. 5,000 for the return of goods purchased from them.
vi. Advanced by cheque Rs. 18,000 for traveling expense to an officer making business trip.
vii. Drew a cheque for Rs. 4,500 to reimburse petty cash fund office expense.
viii. Reimbursed the office by Cheque of Rs. 2,000 for trip expenses incurred by him in excess of advance of Rs. 18,000.
ix. Paid Adnan Stores invoice taking the discount.

Required: Using general journal form show how the above transactions would be recorded by the company in the Voucher Register Cheque Register and General Journal.

Q.4. WORK SHEET

The Pre-Closing Trial Balance of Nadir and Company on December 31, 2007 is as under:

Debit Balance
Cash Rs. 1,200, Office Supplies Rs. 800, Prepaid Advertising Rs. 6,000, Rent Expense Rs. 3,000, Furniture Rs. 10,000, Salaries Expenses Rs. 5,000. (Total – 26,000)

Credit Balance
Allowance for Depreciation Rs. 2,000, Nadir Capital Rs. 10,000, Commission Income Rs. 14,000. (Total – 26,000)

Date for Adjustment on December 31, 2007
i. Office Supplies on hand Rs. 500
ii. Advertising cost unexpired Rs. 2,000
iii. Current year depreciation on furniture 20% on cost
iv. Prepaid Salaries Rs. 800
v. Actual rent expense for the year Rs. 3,600
vi. Commission Receivable Rs. 300 and unearned commission Rs. 700.

Required: Prepare a 10 Column Work Sheet.

Q.5. ADJUSTING, CLOSING AND REVERSING ENTRIES

Take the data given in Question No. 4, prepare dated Adjusting, Closing and Reversing entries.

Q.6. DEPRECIATION

M/S Saad Trading Co. acquired a business machine at a cost of Rs. 2,70,000 on Jan 01, 2003. The life of the machine was estimated at 5 years with a scrap value of Rs. 25,000. The company uses sum of the year digits method for computing the depreciation.
On January 08, 2006 extra ordinary repairs were made at a cost of Rs. 42,500. As a result of which the normal life of the machine was extended to four years from January 2006. The Co. uses straight line method after the repairs.
On October 01, 2008 the machine was sold for Rs. 48,000. The company follows calender year for closing its books of accounts.

Required: Prepare dated general journal entries for all the transactions between 2003 and 2008.

Q.7. CORRECTION OF ERRORS

The books keeper of Amen Company prepared the income statement of the company which revealed.
Cost of Good Sold …………………………….. 2,00,000
Net Income …………………………………….. 80,000

The company’s Auditor detected the following errors:

i. Ending Merchandise Inventory was overstated by Rs. 6,000.
ii. Sales return of Rs. 2,000 were charged to purchase.
iii. Sales included Rs. 7,000 of advance from customers.
iv. Sale of Equipment for Rs. 3,000 was credited to sales Account, Book value of the Equipment was Rs. 4,000.
v. Office Supplies of Rs. 200 were on hand whereas the office supplies showed a debit balance of Rs. 1,000.

Required:
i. Prepare a Statement showing the amount that should be added to or deducted from cost of goods sold and Net Income so as to arrive at their correct figures.
ii. Assuming the books have not been closed, give the necessary correcting entries.

Q.8. PARTNERSHIP – LIQUIDATION

On December 31, 2007, the following Balance Sheet of M/S. Shireen, Sumaira and Shabana partners who share profit and losses in the ratio of 1 : 2 : 3 respectively.

Assets ……………………………………………….. Equities
Cash …………………. 50,000 | Accounts Payable …………… 70,000
A/C Receivable ……… 60,000 | Notes Payable ………………. NIL
Mrds. Inventory ……. 75,000 | Capital – Shireen …………….. 90,000
Equipment …………… 30,000 | Capital – Sumaira ……………. 60,000
Furniture ……………. 15,000 | Capital – Shabana ……………. 10,000
……………………… 2,30,000 | ……………………………….. 2,30,000

On this date they liquidated their business. Collected Rs. 50,000 from the Accounts Receivable in full settlement. Assets other than Cash and Furniture were sold out for cash Rs. 1,33,000. The furniture was taken over by Shireen at agreed market value of Rs. 12,000. The Creditors were paid Rs. 65,000 in full settlement.

Required: Give all necessary entries in the general journal of the firm to record the above process of liquidation assuming Shabana to be personally insolvent.

Q.9. VALUATION OF MERCHANDISE INVENTORY

The record of Maria Traders show the following data relating to commodity A:

2008 ……………………………………………. Units ………….. Per Unit
Jan 01 …………. Opening Inventory ……….. 100 ……………… 50
Feb 05 …………. Purchases …………………. 200 ……………… 55
Mar 12 …………. Purchases …………………. 300 ……………… 54
Mar 14 …………. Sales ………………………. 350 ……………… 100
April 12 ………… Purchases …………………. 500 ……………… 60
May 14 ………… Purchases …………………. 100 ………………. 70
Jun 30 …………. Sales ………………………. 400 ……………… 110

Required:
i. Compute the cost of ending inventory on June 30, 2008 by each the following methods:
a. First in first out (FIFO)
b. Last in first out (LIFO).
Assume that company uses periodic system of inventory valuation.
ii. Prepare comparative income statement showing effect of two alternative valuation methods on gross profit.

 

For more past papers please click to next page:-