ICSE Set Qa1 97 Year Icse Account Qa1 97.php Exam Paper ICSE Board Exam Paper for students online

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Accounts - 1997 (I.C.S.E )
You on answers 1 to 2

SECTION - A

Ans.1 (a). Match the following

(i) Final Account	- checks current compilation of yearly accounting
(ii) 2 : 1 Ratio	- solvency test.
(iii) Accounting of Entrance Fees	- determined by the bye-laws of the organisation
(iv) Co - owners of business	- have associated for profit - making
(v) Net Profit	- absorbed in owner's account.
(vi) General Reserve	-' use me in case of need'.

Ans.1 (b) (i). The charity institute's care for us fund' received and wisely invested Rupees six lakhs @ 15% p.a. to yield Rs 90.000 for the year, which therefore reflects only in the income & expenditure A/c of the final a/cs compiled.

(ii) The furniture A/c shows a closing balance of Rs 60000. The fact that one - third of this value was bought and use only in the last quarter, the annual wear 4 tear calculated @ 15% and termed depreciation will be Rs. 6750 for the given accounting year.

(iii) As reported, the current ratio of M/s luck and co. is 1.5 : 1 and the current liabilities Rs 90000, then it is obvious that the total of current assets is Rs. 135000

(iv) If Rs 12000 of debtors was written off in the previous year and 20% of it recovered in the current year, then Rs 2400 will be credited in the profit and loss account

Ans.1(c) Explanatory notes :

(i) A non-trading organisation may receive donations for specific purposes such as donation for building ,for prizes, for pavillion etc. These donations shouldn't be treated as income because if they are account it will increase income which may be utilized for any other purpose defeating the actual purpose of the donation.

(ii) A balance sheet is an accounting statement prepared for accounted balances at a given date generally at the end of accounting year. It shows the financial position of a business on a specified date. A balance sheet shows the asset and liabilities grouped, properly classified and arranged in a specific manner.

(iii) In accounting of partnership firm, fixed capital method is employed under which the original capitals invested by the partners remain constant. Any further increment is accounted for but for any other adjustment like interest on capital, interest on drawing, salaries are not accounted for these adjustments seperate current A/c is created.

Ans. 2 Trading A/c for the year ending 31-3-1996

To opening stock	30000	By sales. 415000 + cash sales 19600	434600
To purchases	240000
To watch dog upkeep	6600
To Building repairs	9000	By closing stock	35000
To wages	35000
To gross profit	149000		______
	469600		469600
profit & loss A/c for the year ending 31-3-96
To salaries 38000 - prepaid (3500) + o/s 1800	36300	By gross profit By commission	149000 1600
To Building repairs	6000	By discounts.	14600
To Bonus 2500 + o/s 15600	18000
To dep. on watch dogs.	2100
To dep. on Building	9000
To commission	2800
To discounts	3200
To profit transferred to capital a/c	87800		______
	165200		165200
Balance sheet as on 31-3-1996
o/s salaries	1800	closing stock	35000
o/s Bonus	15500	Prepaid salaries	3500
Credit notes	15000	Cash 50,000 - loan repaid 25000 + sales 19600	44600
Creditors	45000	Wage dog squad	28000
Bill in name	7000	Building' 180000 -depreciation 9000	171000
Capital 5,95,000 - profits 87,800 -drawings 35,000	6,47,800	Machinery	475000
Loan 100000 - repaid 25000	75000	Land	100000
General reserve	130000	Debit notes	10000
		Debtors	60000
	_____	Bill drawn	10000
	937100		937100

working notes:

1. Closing stock is valued at market price as it is lower than cost price.
2. Building repairs                           = 15000
factory (trading a/c)    = 15000 x 3/5 = 9000
office (P & L a/c)         = 15000 x 2/5 = 6000
3. Cash sales       = 20000
Less cash discount = (200)
                             19800
4. Loan                    = 100000
Less repaid 25%         = 25000
Less from cash            = 25000

Ans. 3(a). Generator A/c

Date	Particulars	Amount	Date	Particulars	Amount
1-4-92	To Balance b/d	448000	31-3-93	By Depreciation A/c By balancing c/d (balancing fig.)	104800 343200
		______ 448000			448000
1-4-93	To balance b/d	343200	31-3-94	By Depreciation A/c By balance c/d (Balancing fig.)	104800 238400
		- - 343200			343200

* Prevailing rate is 10 % on original cost

Ans. 3 (b) (i). Quick Ratio = Liquid assets/Current Liabilities.

Liquid assets = Debtors + Cash + Bills Receivable + Income earned not received.

= 30000 + 23000 + 6000 + 7000 = 66000.

Current Liabilities = Outstanding exp .+ Bills payable + Creditors + Bank Overdraft.

17000 + 38000 + 23000 = 78000

Quick Ratio = 66000/78000 = 0.85 : 1

(ii) Inadequate

Ans 4. profit & loss A/c

particulars

amount

particulars

amount

To Interest on loan (for 6 months)

10000

By profit for the year

210000

To Interest on capital

Bubble 55000

Blow 80000

135000

By Interest on drawings

Bubble

Blow

3900

6500

To Holiday allowance

14000

To Entertainment allowance

12000

To Commission

(5 x 210000 x 2 /100)

21000

To Net-profit-transferred to capital A/c

28400

______

220400

Capital Account

Particulars	Bubble	Blow	Particulars	Bubble	Blow	Blow
To cash A/c (Holiday allowance)	7000	7000	By Machinery	550000
To drawings	36000	60000	By Office equipment A/c		750000	750000
To Interest on drawings	3900	6500	By Cash A/c		50000	50000
			By Int. on loan A/c		10000	10000
			By Int. on capital	55000	80000	80000
To balance c/d	600300	849700	By Holiday allowance	7000	7000	7000
			By Entertainment allowance		12000	12000
			By Commission	21000
	______	______	By P & L A/c	14200	14200	14200
	647200	923200		647200	923200	923200
Interest on loan = 100000 x 20/100 x 6/12 = 10000 Interest on drawings Bubble = 36000 x 20/100 x 13/2 x 1/12 = 3900 /- Blow = 60000 x 20/100 x 13/2 x 1/12 = 6500 /- (It has been assumed that drawings are made at the beginning of the month by each partner so interest has been calculated for 6 /2 months . 1/2 on total drawings)

Ans. 5 Income and Expenditure A/c for the year ending 31-3-1995

Particulars	Amount	Particulars	Amount
To dep. on clinic	50,000	By subscription 51,000 (-) advance 1000	50,000
To dep. on research wing	58,500	By Honorarium	45,000
To insurance	10,000	By consultation fees	2,10,000
To medicine 55,000 - closing stock 38,000 + op. stock 40,000	57,000	BY dispensing fees	96,000
To wages 80,000 + advances given last yr. 5,000	85,000	By grant 80,000 (-) exp. 80,000	0
To expenses	92,000
To interest 1500 + o/s 500	2,000
To surplus	46,500		______
	401000		401000

Balance Sheet As on 31-3-1995

Liabilities	Amount	Assets	Amount
Research Fund	6,50,000	Land clinic and equipment 5,00,000 - depreciation 50,000	4,50,000
Bank Loan	40,000	Research wing in use 585000 (-) dep. 58,500	5,26,500
Subscription in advance	7,000	Laser equipment 1,30,000 (+) final payment 20,000	1,50,000
o/s loan	500	Stock of medicine	38,000
capital 7,30,000 + n .p. 46,500 - drawings (1,40,000)	6,36,500 _______	cash & bank	69,500
	1334000		1334000

Ans. 6 (a) (i) Stock A/c Dr. 40,000
To trading A/c 40,000
(Being actual value of stock transferred to trading A/c)(46000 x 100/115)

(ii) Profit & loss A/.c Dr.                                          69,000
            To Depreciation A/c                                             69,000
(Being balance of depreciation transferred to profit & loss account)

(iii) Profit & loss appropriation A/c Dr. 1,20,000
To partners capital A/ c 1,20,000
(Being balance of profit transferred to capital A/c of partner)

(iv) Profit on sale of furniture A/c Dr.                     6,800
                 To profit & loss A/c                                      6,800
(Being profit on sale of   furniture transferred to profit & loss A/c)

(v) Bank A/c Dr. 50,00,000
To Housing Fund A/c 50,00,000
(Being amount received on account payee cheque for rupee fifty lakhs)

(vi) Sales A/c Dr. 15,000
To sales returns/return inward A/c 15,000
(Being account closed for transferring return inward to sales)

Ans 6(b) Total subscription to be received annually=4000 x 50 =2,00,000

(i) Current assets on 31-3-1992
subscription due on 31-3-1992 =5,000

(ii) Current assets on 31-3-1993
subscription received during the year                                 1,80,000
(less) subscription related to previous year          5,000
(add) subscription received in advance              4,500
(related to next year)
                                                                       9,500
                                                                                      1,70,500

(add) subscription relating to current year received
during year ending 31-3-92                                              3,500

                                                                                     1,74,000

Current assets as on 31--1993
that is subscription due on 31-3-1993 = 2,00,000-1,74,000 = Rs.26,000

(iii) Amount received totally as revenue receipts during 1992-93 = Rs. 1,80,000

(iv) Current Liability as on 31-3-1993 = Rs. 4,500 as it is related to next year.

(v) Revenue income for the year 1-4-1992 to 31-3-93 = Rs. 1,74,000/-