XI – ACCOUNTING · 2020-01-27 · a) Mr. Maaz started business with cash investment of Rs.500,000. He completed the following transactions. b) He acquired a shop by paying Rs.36,000

The workings under the heading of “Additional Working” are not required according to the requirement of the examiner. These are only for understanding the solutions. For more help, visit www.a4accounting.net

2004

Compiled and Solved by:

S.Hussain

XI – ACCOUNTING

REGULAR /

PRIVATE

http://www.a4accounting.net/

Compiled & Solved by: S.Hussain [email protected]

X I – A c c o u n t i n g – 2 0 0 4 ( R e g u l a r / P r i v a t e )

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ACCOUNTING – 2004

REGULAR / PRIVATE Time: 3 Hours Max. Marks: 100 Note: Attempt any Four questions. Q.No.1 GENERAL JOURNAL

a) Mr. Maaz started business with cash investment of Rs.500,000. He completed the following transactions.

b) He acquired a shop by paying Rs.36,000 as advance rent for a year. c) Purchased furniture for shop Rs.64,000. d) Purchased merchandise for cash Rs.200,000. e) Sold merchandise for cash Rs.200,000. f) Purchased merchandise on a/c from Mr. Zaid Rs.150,000. g) Sold merchandise on account to Mr. Obaid Rs.150,000. h) Paid Rs.100,000 to Mr. Zaid. i) Received Rs.120,000 from Mr. Obaid. j) Paid salaries Rs.10,000. k) Withdrew cash Rs.15,000 for personal use and also took merchandise for personal use at cost

Rs.7,000. REQUIRED Record the above transaction in General Journal of Mr. Maaz in proper form. SOLUTION 1

MR. MAAZ GENERAL JOURNAL

FOR THE MONTH OF _______

Date Particulars P/R Debit Credit

a) Cash 500,000 Capital 500,000 (To record the investment by owner in the business)

b) Prepaid shop rent 36,000 Cash 36,000 (To record the rent paid in advance for shop)

c) Shop furniture 64,000 Cash 64,000 (To record the furniture purchased for cash)

d) Purchases 200,000 Cash 200,000 (To record the merchandise purchased for cash)

e) Cash 200,000 Sales 200,000 (To record the merchandise sold for cash)

f) Purchases 150,000 Accounts payable (Mr. Zaid) 150,000 (To record the goods purchased on account)

g) Accounts receivable (Mr. Obaid) 150,000 Sales 150,000 (To record the goods sold on credit)



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h) Accounts payable (Mr. Zaid) 100,000 Cash 100,000 (To record the cash paid to supplier)

i) Cash 120,000 Accounts receivable (Mr. Obaid) 120,000 (To record the cash received from customer)

j) Salaries expense 10,000 Cash 10,000 (To record the salaries paid)

k) Drawings 22,000 Cash 15,000 Purchases 7,000 (To record the cash and goods withdrew by owner for

personal use)

Additional Working:

GENERAL LEDGER Cash

a) Capital 500,000 b) Prepaid shop rent 36,000 e) Sales 200,000 c) Furniture 64,000 i) Accounts receivable 120,000 d) Purchases 200,000 h) Accounts payable 100,000 j) Salaries expense 10,000 k) Drawings 15,000

425,000 c/d balance 395,000

820,000 820,000

b/d balance 395,000

Accounts Receivable

g) Sales 150,000 i) Cash 120,000 c/d balance 30,000

150,000 150,000

b/d balance 30,000

Prepaid Shop Rent

b) Cash 36,000 c/d balance 36,000

36,000 36,000

b/d balance 36,000

Shop Furniture

c) Cash 64,000 c/d balance 64,000

64,000 64,000

b/d balance 64,000



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Accounts Payable

h) Cash 100,000 f) Purchases 150,000 c/d balance 50,000

150,000 150,000

b/d balance 50,000

Capital

a) Cash 500,000 c/d balance 500,000

500,000 500,000

b/d balance 500,000

Drawings

k) Cash / Purchases 22,000 c/d balance 22,000

22,000 22,000

b/d balance 22,000

Purchases

d) Cash 200,000 k) Drawings 7,000 f) Accounts payable 150,000 c/d balance 343,000

350,000 350,000

b/d balance 343,000

Sales

e) Cash 200,000 c/d balance 350,000 g) Accounts receivable 150,000

350,000 350,000

b/d balance 350,000

Salaries Expense

j) Cash 10,000 c/d balance 10,000

10,000 10,000

b/d balance 10,000



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MR. MAAZ TRIAL BALANCE

FOR THE MONTH OF _____

NO. PARTICULARS P/R DEBIT CREDIT

1 Cash 395,000 2 Accounts receivable 30,000 3 Prepaid shop rent 36,000 4 Shop furniture 64,000 5 Accounts payable 50,000 6 Capital 500,000 7 Drawings 22,000 8 Purchases 343,000 9 Sales 350,000

10 Salaries expense 10,000

Total 900,000 900,000

Q.No.2 ACCOUNTING FOR CASH GIVEN M/s. Saad Traders uses three-column Cash Book in their business. The following transactions relate to the month of March 2004. March 01: Balance: Cash on hand Rs.25,000 and cash at bank Rs.25,000. March 02: Sold merchandise for cash Rs.15,000. March 06: Received a cheque form Mr. Owais for Rs.12,500 and allowed him discount of Rs.500.

The cheque was deposited in bank on the same day. March 10: Issued a cheque for Rs.11,500 to Mr. MUneeb in full settlement of his account of

Rs.12,000. March 12: Deposited cash into bank Rs.15,000. March 17: Purchased merchandise for cash Rs.5,000. March 24: Withdrew cash from bank for office use Rs.10,000. March 30: Paid salaries by cheque Rs.3,500. March 31: Withdrew cash for personal use Rs.2,500. REQUIRED

(i) Enter the opening balance and record the above transactions in Cash Book. (ii) Balance the Cash Book on March 31, 2004 bringing down the cash and bank balance on April 1,

2004. (iii) Prepare ‘T’ accounts of Sales Discount and Purchase Discount and make posting therein.

SOLUTION 2

GENERAL LEDGER Sales Discount

31.Mar.2004 CB Rs.500

Purchase Discount

31.Mar.2004 CB Rs.500



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M/S. SAAD TRADERS THREE COLUMN CASH BOOK

FOR THE MONTH OF MARCH 2004

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Q.No.3 BANK RECONCILIATION STATEMENT Prepare Bank Reconciliation Statement from the following information as on Dec 31, 2003 of Anas Bros.

(i) Balance as per cash book 35,000 (ii) Balance as per bank statement 26,000 (iii) Dishonoured cheque of Shahid & Co. 21,250 (iv) Uncleared cheques 11,950 (v) Cash deposited on Dec. 31, 2003 not shown at bank statement 10,000 (vi) Collection of notes receivable not recorded in cash book 6,000 (vii) Direct deposit by a customer not recorded in cash book 6,000 (viii) Un-presented cheques 21,950 (ix) Collection charges debited by bank but not recorded in cash book 30 (x) Mark-up credited by bank but not recorded in cash book 280

SOLUTION 3

ANAS BROS. BANK RECONCILIATION STATEMENT

FOR THE MONTH OF DECEMBER 2003

Particulars Cash Book Pass Book

Balance on 31 December 2003 35,000 26,000 Less: Dishonoured cheques (iii) (21,250)

13,750 Add: Uncleared cheques (iv) 11,950

37,950 Add: Unrecorded cheque (v) 10,000

47,950 Add: Note collected by bank (vi) 6,000

19,750 Add: Direct deposit by a customer (vii) 6,000

25,750 Less: Un-presented cheques (viii) (21,950)

26,000 Less: Collection charges (ix) (30)

25,720 Add: Mark-up credited by bank (x) 280

Reconcile Balance 26,000 26,000



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Additional Working: ANAS BROS.

GENERAL JOURNAL FOR THE MONTH OF DECEMBER 2003


1 Accounts receivable (Shahid & Co.) 21,250 Bank 21,250 (To record the dishonoured cheque)

2 Bank 6,000 Notes receivable 6,000 (To record the note collected by bank)

3 Bank 6,000 Accounts receivable 6,000 (To record the direct deposit by a customer)

4 Collection charges 30 Bank 30 (To record the collection charges)

5 Bank 280 Mark-up 280 (To record the mark-up credited by bank)

Q.No.4 BILL OF EXCHANGE GIVEN Feb. 1, 2003 Ahsan sold goods to Mr. Tariq on credit for Rs.20,000. Feb. 3, 2003 Ahsan draws a bill on Mr. Tariq for Rs.20,000 for 90 days. Feb. 4, 2003 Tariq accepted the bill and returns it to Ahsan. Mar. 5, 2003 Ahsan discounted the bill with his banker at 12% per annum. May. 6, 2003 Tariq met the bill. REQUIRED Record the above transactions in General Journal of:

(a) Mr. Ahsan (b) Mr. Tariq (c) Bank. SOLUTION 4 (a)

MR. AHSAN GENERAL JOURNAL


1.Feb Accounts receivable (Mr. Tariq) 20,000 Sales 20,000 (To record the goods sold on account to Tariq)

4.Feb Bill receivable 20,000 Accounts receivable (Mr. Tariq) 20,000 (To record the acceptance received)

5.Mar Cash 19,600 Discount charges (20,000 x 12% x 2/12) 400 Bill receivable 20,000 (To record the bill discounted by Mr. Ahsan)



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SOLUTION 4 (b) MR. TARIQ

GENERAL JOURNAL


1.Feb Purchases 20,000 Accounts payable (Mr. Ahsan) 20,000 (To record the goods purchased from Ahsan on a/c)

4.Feb Accounts payable (Mr. Ahsan) 20,000 Bill payable 20,000 (To record the acceptance given)

6.May Bill payable 20,000 Cash 20,000 (To record the payment of bill on maturity date)

SOLUTION 4 (c)

BANK GENERAL JOURNAL


5.Mar Bill receivable 20,000 Cash 19,600 Interest income 400 (To record the bill discounted)

6.May Cash 20,000 Bill receivable 20,000 (To record the payment received against bill of

exchange)

Q.No.5 SPECIAL JOURNALS GIVEN Selected transactions completed by Rashid Stores during March 2004 are given below: March 01: Purchased merchandise on account form Mr. Arshad Rs.4,160. March 05: Purchased merchandise on account form Mr. Aslam Rs.6,160. March 08: Purchased store equipment for cash Rs.7,160. March 11: Merchandise returned to Mr. Arshad worth Rs.260. March 15: Purchased merchandise from Al-Abid on account worth Rs.15,160. March 18: Merchandise returned to Al-Abid worth Rs.1,160. March 22: Purchased merchandise for cash Rs.16,000. March 25: Purchased a typewriter for office use on account from Mr. Asif Rs.3,600. March 27: Purchased merchandise on account form Al-Mumtaz Store Rs.10,600. March 31: Returned merchandise to Al-Mumtaz Store worth Rs.1,500. REQUIRED

a) Record the above transactions as the case may be in: (i) Purchase Journal. (ii) Purchase Return and Allowance Journal. (iii) General Journal.

b) Total both the special journals on March 31, 2004 and pass the entry on March 31, 2004.



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SOLUTION 5 RASHID STORES

PURCHASE JOURNAL FOR THE MONTH OF MARCH 2004

Date Invoice No. Name of Suppliers P/R Amount

1.Mar.2004 Mr. Arshad 4,160 5.Mar.2004 Mr. Aslam 6,160 15.Mar.2004 Al-Abid 15,160 27.Mar.2004 Al-Mumtaz Store 10,600

31.Mar.2004 Purchases Dr. 36,080 Accounts payable Cr.

RASHID STORES PURCHASE RETURN AND ALLOWANCE JOURNAL


Date Invoice No. Name of Suppliers P/R Amount

11.Mar.2004 Mr. Arshad 260 18.Mar.2004 Al-Abid 1,160 31.Mar.2004 Al-Mumtaz Store 1,500

31.Mar.2004 Accounts payable Dr. 2,920 Purchase returns and allowance Cr.

RASHID STORES GENERAL JOURNAL



8.Mar Store equipment 7,160 Cash 7,160 (To record the purchase of store equipment for cash)

22.Mar Purchases 16,000 Cash 16,000 (To record the purchase of merchandise for cash)

25.Mar Office equipment 3,600 Accounts payable (Mr. Asif) 3,600 (To record the purchase office equipment on account)

Q.No.6 FINANCIAL STATEMENT GIVEN The following have been taken from the pre-closing Trial Balance prepared from the ledger of Mr. Bazil on Dec. 31, 2003.

Debit Balance Cash Rs. 48,000 Accounts receivable Rs. 140,000 Merchandise inventory (1.1.2003) Rs. 70,000 Office supplies Rs. 5,000 Furniture Rs. 50,000 Purchases Rs. 200,000 Salaries expenses Rs. 3,500 Prepaid insurance Rs. 2,000 Rent expenses Rs. 4,200

Total Rs. 522,700



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Credit Balance Accounts payable Rs. 22,700 Sales Rs. 340,000 Purchase return Rs. 10,000 Bazil – Capital Rs. 150,000

Total 522,700

Data for Adjustments: (i) Insurance expired by Rs.1,500. (ii) Depreciation expenses on furniture Rs.5,000. (iii) Salaries expenses for the year Rs.4,200. (iv) Rent expense for the year Rs.3,500. (v) Office supplies on hand Rs.2,000. (vi) Merchandise inventory on Dec. 31, 2003 Rs.80,000.

REQUIRED (i) Prepare Income Statement for the year ended Dec. 31, 2003. (ii) Prepare classified Balance Sheet as of Dec. 31, 2003.

SOLUTION 7 (i)

MR. BAZIL INCOME STATEMENT

FOR THE PERIOD ENDED 31 DECEMBER 2003 Sales 340,000 Less: Cost of Goods Sold: Merchandise inventory (beg) 70,000 Add: Net Purchases: Purchases 200,000 Less: Purchase returns & allowances (10,000)

Net purchases 190,000

Merchandise available for sale 260,000 Less: Merchandise inventory (end) (80,000)

Cost of goods sold (180,000)

Gross profit 160,000 Less: Operating Expenses: Salaries expenses (3,500 + 700) 4,200 Rent expenses (4,200 – 700) 3,500 Insurance expenses 1,500 Office supplies expenses 3,000 Depreciation expense 5,000

Total operating expenses (17,200)

Net profit 142,800



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SOLUTION 7 (ii) MR. BAZIL

BALANCE SHEET AS ON 31 DECEMBER 2003

ASSETS EQUITIES Current Assets: Current Liabilities: Cash 48,000 Accounts payable 22,700 Accounts receivable 140,000 Salaries payable 700

Merchandise inventory 80,000 Total liabilities 23,400 Office supplies 2,000 Prepaid rent 700 Owner’s Equity: Prepaid insurance 500 Capital 150,000

Total current assets 271,200 Add: Net profit 142,800

Fixed Assets: Total owner’s equity 292,800 Furniture 50,000 Less: All for depreciation (5,000)

Total fixed assets 45,000

Total assets 316,200 Total equities 316,200

Additional Working:

MR. BAZIL ADJUSTING ENTRIES

FOR THE PERIOD ENDED 31 DECEMBER 2003


1 Insurance expenses 1,500 Prepaid insurance 1,500 (To adjust the prepaid insurance)

2 Depreciation expense 5,000 Allowance for depreciation – Furniture 5,000 (To adjust the depreciation expense)

3 Salaries expenses 700 Salaries payable 700 (To adjust the accrued salaries)

4 Prepaid rent 700 Rent expenses 700 (To adjust the unexpired rent)

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

6 Merchandise inventory 80,000 Expense and revenue summary 80,000 (To adjust the merchandise inventory)



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Q.No.7 (a) Give the rules of Debit and Credit. Q.No.7 (b) Describe a transaction that would:

(i) Increase an asset but does not change the amount of total assets. (ii) Decrease an asset and a liability. (iii) Increase an asset and a liability. (iv) Decrease an asset and owner’s equity. (v) Increase an asset and increase capital.

Q.No.7 (c) Define any Two of the following terms:

(i) Merchandise. (ii) Prepaid expenses. (iii) Unearned income. (iv) Accounts payable.

SOLUTION 7 (a) Rules of Debit & Credit:

Head of Accounts Increases Decreases

Assets Recorded as Debit Recorded as Credit

Liabilities Recorded as Credit Recorded as Debit

Owner’s Equity Recorded as Credit Recorded as Debit

Revenue & Income Recorded as Credit Recorded as Debit

Expenses Recorded as Debit Recorded as Credit

SOLUTION 7 (b)

(i) Cash received from credit customer. (ii) Paid cash to supplier. (iii) Purchased office building on account. (iv) Withdrew cash by owner for personal use. (v) Owner invested cash in the business.

SOLUTION 7 (c)

(i) Merchandise: The goods which buy for the purpose of resale are known as merchandise. In merchandising business, merchandise in the major source of revenue. For example, merchandise for the electronics shop would be television, computer, printer, and other electronics items.

(ii) Prepaid Expenses: Any amount paid in advance to get services in the future is called Prepaid Expenses. Once the amount paid in advance, it is treated as current asset in balance sheet. The portion of prepaid which is expired by using the services is treated as expense. For example, insurance premium paid in advance for 1 year.

(iii) Unearned Income: Any amount received in advance to give the services in the future is called unearned income. It is treated as current liability (if prepaid of amount is less than one year) in the balance sheet. The portion of unearned income which is earned (services given) is treated as income. For example, rent received in advance for three months.

(iv) Accounts Payable: Any amount which is liable to pay in future is called accounts payable. It is treated as current liabilities in the Balance Sheet. It arises normally when goods buy on credit.

Documents

XI – ACCOUNTING · 2020-01-27 · a) Mr. Maaz started business with cash investment of Rs.500,000. He completed the following transactions. b) He acquired a shop by paying Rs.36,000