ICSE Set Qa1 98 Year Icse Account Qa1 98.php Exam Paper ICSE Board Exam Paper for students online

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Accounts - 1998 (I.C.S.E)
You on answers 1 to 2

SECTION - A

Ans 1(a)

Column I	Column II
(i) Depreciation	could be because of efflux of time
(ii) Fixed capital Method	needs current a/c for completing details
(iii)'Materials consumed'	cost of goods sold
(iv) Partnership firms	two and not seven persons is the minimum number.
(v) Working capital ratio	`Ideal situation reflect 3:2
(vi)Proprietory Fund	Indicates the owners interest

Q 1(b) From each set given below ,pick out the odd one. Answer in the given serial order :-
(i) Cost price of sales ; goods sold at cost price : Sales less returns inward ; materials consumed
Ans materials consumed

(ii) With reference to practical work in partnership firms : Interest on capital ; interest on loan borrowed from a partner ; Commission allowed to a partner ; Interest on current account charged to a partner.
Ans. interest on loan borrowed from a partner.

(iii) Assets bought on credit ; Expenses incidential to the asset bought payable ; part of the assets bought on credit rejected because defective ; payment due with reference to the assets , made and recorded.
Ans. Assets bought on credit .

(iv)Direct expenses ; financial expenses ; Selling expenses ;Administrative expenses .
Ans.. Direct expenses.

(v). Fixed instalment method ; original cost price method ; Written down value method ; Straigth line method .
Ans. Written down value method

(vi) Pre paid insurance ; Deffered Advertising ;pre received rent; unused Fuel.
Ans. pre-received rent

(vii)Capital fund ;Special fund ;general fund ; Common fund
Ans. Special fund

(viii) Freigth ; Octroi ;Sales tax ;imported Duty.
Ans: Sales tax

Ans 1(c) (i)Depreciation is a charge against profits to be accounted annually so as to have the indication of true and fair picture of profit or loss or net accounting result of any business.
(ii) Quick ratio is also called Acid test ratio which measures the capability of any firm to meet its short term obligation immediately
Quick ratio = Quick Assets
Current liability
where quick ratio= curent asset - stock - prepaid expenses
(iii) Sometimes partners decide to show their capital at original value except for the cases where additional capital is introduced by partner.
In this method all adjustments related to interest on capital, interest on drawings, salaries, commissions etc. are made in a seperate account called current account maintained for each partner.

Ans 2                           Trading A/c for the year ending
on 31 March, 1997
               Particulars              Amount Dr                            Particulars                 Amount Cr

To opening stock

25000

By Sales 267000
Less: Returns 5000

262000

To Purchasse 140000
Less: Returns 6000
Less: Drawings 5000

129000

By closing Stock

40000

To Factory power

16000

To Wages 18000
Less: Salaries 5500

12500

To carriage

2500

To gross profit c/d

117000

302000

Profit & Loss A/c for the year ending on 31 March, 1997.
Particulars Amount Cr particulars Amount Dr

To Rent & Rates 10800
add: outstanding 2200

13000

By gross profit (b/d from trading a/c)

117000

To salaries 20400
add: wages 5500
add: o/s 2100

28000

By Bad debts recovered

1600

To depreciation
machinery 12000
Loose tools 3000

15000

By discount received

6000

To insurance     8000
less: personal   2000
        exp

6000

By commission

3800

To bad debts

2000

By Interest
on investment
@ 10% p.a 1800
add:accrued 200

2000

To discount
allowed

5000

To carriage on sales

6000

To net profit (carried down to capital a/c)

55400
130400

130400

BALANCE SHEET AS ON 31 March,1997 Liabilities Amount Assets Amount

Capital 237000 add: N.P 55400 less: drawing (2000) (insurance) less: drawing (15000)	275400	Machinery 120000 less:dep. @ 10%p.a (12000)	108000
Bank overdraft	10000	Loose tools 11000 less: dep. (3000)	8000
Creditors	18000	Closing stock	40000
Rent & rates o/s	2200	Investments	80000
salaries o/s	2100	debtors	45000
Bills payable	4000	Bank a/c	22000
		Cash	2500
		Bills Receivable	6000
		Interest accrued	200
	311700		311700

SECTION - B

Ans: Date Particulars L.F Amt Dr Amt Cr

a) i)	Depreciation A/c Dr To furniture (being depreciation charged on furniture)	750	750
	Bank A/c Dr. To furniture A/c (Being furniture sold for given amount)	8250	8250
	Profit & loss A/c Dr To depreciation (being depreciation charged to P&L A/c)	750	750
	Profit &:Loss A/c Dr To furniture (being loss on sale of furniture are charged to P&L a/c)	1000	1000
ii)	Depreciation A/c Dr To office premises (being depreciation charged on equal instalment basis)	100000	100000
	Profit & loss A/c Dr To depreciation (being depreciation charged to P&L A/c)	100000	100000

Ans. 3(b)Date Particulars L.F Amount Dr Amount Cr

i)	Profit & loss A/c Appropriation Dr To partners capital A/c (being years profit accounted for)		225000	225000
ii)	Profit & loss A/c Appropriation Dr To general reserve (being general eservecreated from profits)		25000	25000

Ans. 3(c) Date Particulars L.F Amt Dr Amt Cr

i)	Closing stock A/c Dr To Trading A/c (being closing stock value at end of year)	80000	80000
ii)	Bad debts A/c Dr To debtors (being debtors long overdue written off as bad debts) Profit & loss A/c Dr To Bad debts (being bad debts written off)	12000	12000
		12000	12000
iii)	sales A/c Dr To sales returns (being sales return accounted for)	20000	20000
	Trading A/c Dr To purchase (being purchase accounted for)	3,50,000	3,50,000
	Trading A/c Dr To freight (being freight accounted for)	7000	7000
	Sales A/c Dr To Trading A/c (being sales accounted for at the end of year)	500000	500000
	Purchase return a/c Dr To purchase (being purchase return accounted for)	15000	15000
	Trading A/c Dr To factory exp. (being factory exp. accounted for)	35000	35000
	Trading A/c Dr To opening stock (being opening stock accounted for)	30000	30000

Ans. 3(d) Date Particulars L.F Amt Dr Amt Cr

i)	Honorarium a/c Dr To cash (being Honorarium paid)	77000	77000
	Honorarium a/c Dr To Honorarium outstanding (being unpaid Honorarium accounted for)	3000	3000
	Profit & Loss a/c Dr To Honorarium (being Honorarium accounted for)	80000	80000
ii)	Profit & Loss a/c Dr To capital a/c (being surplus accounted for at the end of the year)	55000	55000

Ans: 4(a) Cement Mixer A/c

Date	Particulars	Amt. Dr.	Date	Particulars	Amt. Cr.
July 1995	To Bank A/c(120000x3)	360000 360000	march 96	By Depreciation A/c(for 9 months) By bal. c/d	56250 303750 360000
April1996	To bal. b/d	303750 303750	31march 97	By dep. a/c By cash a/c By P&L a/c(loss on sale) By bal. c/d	75000 50000 26250 152500 303750
April 1997	To bal. c/d	152500 152500	31march 98	By dep. a/c By bal. c/d	48787.50 103712.50 152500
Expected life of each mixer = 4 years scrap value = Rs 20000 Annual Depreciation on one machine = 120000 - 20000 = Rs 25000 ..................... ..................... ..... 4 For three machine 25000 x 3 = 75000 For 9 months 75000 x 9 = Rs 56250 ..................... . 12

Ans 4(b) :       value of capital employed
.....................Capital Employed = Fixed asset + Working Capital
.....................Fixed Asset:
.....................=Fixed Asset    60000
.....................investments     20000
..................... ..................... 80000

.....................working capital:
.....................current asset = debtors ..................... 8000
.....................cash and bank ..................... ............. 5000
.....................Accrual                       ..................... ..1400
.....................Prepaid & deferred exp.                ..      2000
.....................Stock                                        .       15000
..................... ..................... .....................             31400
    Less: ...........current liabilities
.................creditors ..................... ... 7000
............. ...Bank o.d ..................... ... 3000
.................Accruals ..................... ....5800
..................... ..................15800 ...... 15800
.................... ..................... ..............15600
              Capital Employed = 80000 + 15600 = 95600

(b) Quick Assets ----- Debtors + cash& Bank + Accruals
..................... ...........8000    + 5000 .....+ 1400       = 14400

(d) Debt Equity Ratio = Debt = Long term loans
..................... ............. equity         Shareholders funds
.....................= 20000
..................... 90000+10000+600
.....................= 20000      = 100:503 = 1:5.3
.....................100600

Ans 5-
Profit and Loss Appropriation A/c

Particulars

Amount

Assets

Amount

To Int on Cap @15 %
River          -67500
Well -          45000
Spring         56250
Lake -          56250

2,25,000

By P/L A/c 5,06,000
Add annual allowance 27000
less commission 20000

5,13,000

To Well's salary

36000

By Int on drawings
River 4500
Well 3000
Spring 3750
Lake 3750

15000

To annual allowance

27000

ToInt on loan 9 month

45000

To Reserve fund

20000

To capital A/c   tr to
River 87500
Well   35000
Spring 35000
Lake   17500

1,75,000

5,28,000

Workings Notes :-
(i) Interest on capitals @ 15% for 9 months for River,Well, Spring, Lake
River   =   6,00,000 x       9 x 15               =        67500
                                       12         100
Well    =    400000   x       9     x   15               =        45000
                                        12         100
Spring =     500000 x      9       x   15               =        56250
                                         12         100
Lake     =    500000 x       9      x   15               =        56250
                                         12         100
(ii) Interest on drawing @ 10% for 9 months
River    =    60000     x       9      x   10               =        4500
                                         12          100
Well     =     40000     x       9      x   10               =        3000
                                         12          100
Spring   =     50000     x       9      x   10               =      3750
                                         12          100
Lake     =      50000      x      9       x   10               =      3750
                                         12          100
(iii) Profit sharing ratio
River      =      5      x      175000          =    87500
                      10
Well       =      2       x      175000         =     35000
                      10
Spring    =        2       x      175000         =     35000
                      10
Lake      =        1      x      175000         =     17500
                         10
Ans 6 Income & Expenditure A/c for the year ending 31-3-1997

Particulars	Amount	Particulars	Amount
To Expenditure on activities	60,000	By annual celebeartion receipts 60,000 - payments 45,000	15,000
To Club Expenses	37,400	By Life membership fees 60,000 - 40% Capital 24,000	36,000
To depreciation Sports Complex 10,000 Furniture 3200	13,200	By Grant	60,000
To Honorarium	35,000	By refreshment supplies 1,20,000 - Supplies 75,000	45,000
To Profit	10,400
	1,56,000		1,56,000
Balance Sheet as on 31-03-1997
Particulars	Amount	Particulars	Amount
Life Membership fees	24,000	Cash	27,800
Legacy 3,50,000 + Further 7,00,000	10,50,000	Investment	2,75,000
Income & Expenditure 25,000 + Profits 10,400	35,400	Land	3,00,000
Sports Complex Fund	10,00,000	Furniture 64,000 Less : Depreciation 3200	60,800
		Refreshment Supplies	5800
		Sports Complex 10,00,000 + addition 4,50,000 - Depreciation 10,000	14,40,000
	21,09,400		21,09,400