ADVANCE ACCOUNTING B.
COM-II SOURCE GROUP OF 2nd
COLLEGES Simulation
Time Allowed: 3 Hours Max Marks: 100
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Attempt any five questions. All questions carry equal marks.
Q.1: Write a short note on the followings:
1. What is bonus share & rights shares?
2. Define and explain absorption & liquidation?
3. What is work uncertified? Give necessary rules of contract accounting?
4. What is cost plus contract?
5. Define and explain current ratio and banker ration Also give its formula
Q.2: Sohail & company have authorized capital of Rs 10,00,000 divided into 1,00,000 share of Rs 10
you are required to prepare trading profit & loss account and balance sheet as on 31-12-2010.
Particulars Rs Particulars Rs
Plant & machinery 295,000 Manufacturing wages 75,000
Auditor remuneration 12,500 Printing and stationery 5,000
Purchases 210,000 Stock on 1-1-2010 60,000
Sales 415,000 Bad Debts 2,000
Insurance 8,000 Legal expenses 1,000
Sales return 15,000 Good will 60,000
Purchases return 10,000 Freehold property 180,000
Salaries 34,000 Share capital 400,000
Cash in hand 7,000 6% debenture 200,000
Cash at bank 15,000 Bill receivable 57,500
Furniture 47,000 Debenture interest 2,000
Sundry creditors 255,000 Preliminary expenses 9,000
Sundry debtors 205,000 Profit &Loss account 30,0000
Adjustments:
1. Depreciate plant & machinery @ 10% and furniture @ 15%
2. Closing stock on 31-12-2010 was Rs 100,000
3. Provide final dividend @ 5%
4. Transfer Rs 8,000 to general reserve & taxation reserve Rs 20,000
5. Write off 1/3 of preliminary expenses
Q.3: Trading & Profit & Loss Account
Details Rs Details Rs
Opening stock 18,100 Sales 170,000
Purchase 109,050 Closing stock 28000
Carriage 2850 Profit on sale of shares 1800
Office expenses 6000
Financial Expenses 2000
Loss of sale of fixed Asset 600
Interest on Debentures 1200
2nd Simulation Examination, May 2013 1
ADVANCE ACCOUNTING B.COM-II SOURCE GROUP OF 2nd
COLLEGES Simulation
Net profit 30,000
199,800 199,800
Balance Sheet
Assets Rs Liabilities Rs
Building 50,000 Capital 5000 shares of 50,0000
Rs 10 each
Plant & Machinery 25000 General Reserve 18,000
Stock 28,000 6% Debenture 20,000
Bill Receive able 5000 Bank overdraft 6000
Cash in hand 2000 Sundry Creditors 15000
Provision for Tax 9000
130,000 130,000
From Above data Calculate:
1) Current Ratio
2) Quick Ratio
3) Stock Turnover ratio
4) Debtors Turnover ratio
5) Return on shareholder’s Fund
6) Return on capital employment
Q.4: Jameel construction company ltd have undertaken the construction of Buildings for a newly
started company. The value of the contract is Rs.625, 000; Subject to retention of 20 % until one
year after the certified completion of the following are the details as shown in the books on 31 st
December, 2010
Material from stores Rs. 40,600
Material in hand on Dec, 31, 2010 Rs. 3150
Labour on site Rs. 202,500
Wages accrued on Dec, 31, 2010 Rs. 3900
Hire and use of plant- plant upkeep Account Rs. 6,050
General overhead Allocated to the contract Rs. 18,550
Direct Expenses Rs..11,500
Direct Expenses accrued on Dec, 31, 2010 Rs. 8,00
Amount of work certified Rs. 5,50,000
Work not yet certified at cost Rs. 8,250
Cash received from Contractee Rs. 440,000
Prepare (1) Contract Account (2) Contractee’s Account (3) How the relevant items would appear in the
Balance sheet.
Q.5: Make Necessary journal Entries and show Balance Sheet
Authorized Capital:
30,000 Ordinary Shares of Rs 100 each 30, 00,000
Issued subscribed capital & paid up capital:
20,000 shares of Rs 100 each 20, 00,000
2nd Simulation Examination, May 2013 2
ADVANCE ACCOUNTING B.COM-II SOURCE GROUP OF 2nd
COLLEGES Simulation
Reserve Fund 12, 00,000
P&L 700,000
Board of Director recommended:
1. To issue bonus shares in the ratio of one bonus shares for every five ordinary shares Held.
2. To issue right shares in the ratio of one right share for every four ordinary shares .The right shares
will not be entitled for above bonus shares. For the purpose of issue of bonus shares, the funds
were to be provided out of profit & loss Account and reserve fund in equal proportion.
Q.6: Discuss in details the procedure of Registration of a public limited company.
Q.7: Nazir & co Lahore has a branch at Faisalabad. Goods are invoiced to the branch at selling price
being cost plus 25%.The branch keeps its own sales ledger and deposits all cash received daily to
credit of the head office account opened at HBL, Faisalabad. All expenses are paid by cheque
from Lahore from the following information prepare branch Account in the books of head officer
after making necessary adjustment & calculate branch profit and loss for the year 2010.
Particulars Rs
Stock 1-1-2010 60,000
Stock 31-12-2010 72,000
Sundry debtors 1-1-2010 33,600
Sundry Debtors31-12-2010 43,200
Petty Cash 1-1-2010 1,500
Petty Cash 31-12-2010 1,500
Goods invoiced from H.C 436,800
Wages paid 19,200
Sundry expenses 3,840
Cash sales 259,200
Credit sales 168,000
Cash collected from debtors 158,400
Rent paid 17,920
On 1st January 1999, Ahmed and co purchase a machine on hire purchase from Lucky co ltd .The
terms of the Contract were as follows:
1. The cash price of the machine was Rs 50,000
2. Rs 20,000 was to be paid on signing of the contract
3. The Balance was to be paid in annual installment of Rs 10,000 plus interest
4. Interest Chargeable on outstanding Balance was 10% P.a
5. Depreciate at 10% p.a is to be Written off using the Straight line method.
Required:
1) Show the relevant accounts in the books of Ahmed & Co from January 01, 1999 to Dec 31,
2001.
2) Show the machine account in the Balance sheet as on Dec 31 2000.
Q.8: From the following particulars relating to Gujarat Branch for the year ending 31-12-2001, prepare
Branch Account in the books of head office:
2nd Simulation Examination, May 2013 3
ADVANCE ACCOUNTING B.COM-II SOURCE GROUP OF 2nd
COLLEGES Simulation
Balances on 1-1-2001: Rs. Rs.
Stock 40,000 Cash paid by debtors direct to head office 22,000
Debtors 14,000 Discount allowed 1,100
Petty cash 1,500 Cash sent to branch for expenses:
Furniture 12,000 Rent Rs. 12,000, Salaries Rs. 5,400, Petty cash
Prepaid fire insurance 1,150 Rs. 4,000
Outstanding salaries 2,100 Insurance (from 1-4-2001 to 31-3-2002) 1,600
Goods sent to branch 2,80,000 Good returned by the branch 4,000
Cash sales 3,30,000 Goods returned by the debtors 7,000
Credit sales 1,83,000 Stock on 31-12-2001 38,000
Cash received from debtors 1,35,000 Petty expenses paid by the branch 2,850
Provide depreciation on furniture @ 10% p.a.
Loss of stock by the fire 4,800
2nd Simulation Examination, May 2013 4
