2015 – Regular & Private For Failure Candidates

2015 – Regular & Private

For Failure Candidates

2015-RP

XI – ACCOUNTING SOLUTION COMPILED AND SOLVED BY: SAMEER HUSSAIN

www.a4accounting.weebly.com | www.facebook.com/a4accounting.net www.twitter.com/a4accounting2 | [email protected]

Compiled & Solved by: Sameer Hussain www.a4accounting.weebly.com

www.facebook.com/a4accounting.net [email protected]

X I – A c c o u n t i n g – 2 0 1 5 ( R e g u l a r & P r i v a t e ) F a i l u r e

Page 1

ACCOUNTING – 2015

REGULAR & PRIVATE (FAILURE) Time: 20 Minutes Max. Marks: 20

SECTION “A” (MULTIPLE CHOICE QUESTIONS) Note: (i) This section contains of 20 part questions and all are to be answered. Each question carries equal marks. (ii) Do not copy down the part question in your answer book. Write only the answer in full against the proper number of the question and its part. (iv) The code of your question paper must be mentioned in bold letters in the beginning. Q.No.1 Choose the correct answer for each from the given options:

(1) The act of recording transaction in journal is called: (a) Posting. (b) Reconciling. (c) Closing. (d) Journalizing.

(2) An outstanding expense is a/an:

(a) Current asset. (b) Current liability. (c) Owner’s equity. (d) Expense.

(3) This account normally has credit balance:

(a) Purchases. (b) Sales return and allowances. (c) Sales discount. (d) Sales.

(4) Commission received in advance is a/an:

(a) Income. (b) Liability. (c) Asset. (d) Owner’s equity.

(5) Cost of goods sold is equal to sales minus:

(a) Purchases. (b) Merchandise inventory. (c) Operating expenses. (d) Gross profit.

(6) The financial position of a business is shown by:

(a) Income statement. (b) Cash book. (c) Balance sheet. (d) Bank statement.




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(7) Cash discount allowed to customer is recorded in: (a) Cash book. (b) Sales journal. (c) Purchase journal. (d) Cash account.

(8) If assets and liabilities of business are Rs.180,000 and Rs.50,000 respectively, its owner’s

equity will be Rs.: (a) 230,000. (b) 180,000. (c) 130,000. (d) 50,000.

(9) Depreciation is charged on:

(a) Office supplies. (b) Office equipment. (c) Land. (d) Merchandise.

(10) Transportation paid for delivering the goods to the customer is included in:

(a) Operating expenses. (b) Non – operating expenses. (c) Cost of goods sold. (d) Sales.

(11) This account does not relate to income statement:

(a) Rent expense. (b) Salaries expense. (c) Sales. (d) Unexpired insurance.

(12) Gross profit is excess of sales revenue over:

(a) Cost of goods sold. (b) Ending inventory. (c) Beginning inventory. (d) Operating expenses.

(13) This is prepared to check arithmetic accuracy of double entry:

(a) General journal. (b) Ledger. (c) Trial balance. (d) Cash book.

(14) A cheque deposited into bank but not yet credited by bank is called:

(a) Direct deposit. (b) Outstanding cheque. (c) Dishonoured cheque. (d) Deposit in transit.




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(15) Credit memo No. is entered in: (a) Purchase journal. (b) Purchase returns journal. (c) Sales journal. (d) Sales returns journal.

(16) Gross profit – operating expenses = :

(a) Cost of sales. (b) Net profit/loss. (c) Sales. (d) Ending inventory.

(17) If net profit is 25% of gross profit of Rs.5,000; the operating expenses should be Rs.:

(a) 1,250. (b) 3,750. (c) 4,150. (d) 6,250.

(18) Closing entries are recorded before preparing:

(a) Adjusting entries. (b) Post – closing trial balance. (c) Financial statement. (d) Adjusted trial balance.

(19) Net profit or loss is transferred to:

(a) Cash account. (b) Capital account. (c) Income summary account. (d) Bank account.

(20) Accrued salaries are reported on the balance sheet in the section of:

(a) Current assets. (b) Fixed assets. (c) Current liabilities. (d) Owner’s equity.




Page 4

ACCOUNTING – 2015

REGULAR & PRIVATE (FAILURE) Time: 2 Hours 40 Minutes Max. Marks: 80

SECTION “B” (SHORT – ANSWER QUESTIONS) (50) Note: Attempt any Four questions. All questions carry equal marks. The use of calculator is allowed. Q.No.2 GENERAL JOURNAL Following are the transactions related to the business of Mr. Hammad Khan for April 2015: April 01: Mr. Hammad Khan started business with investment of cash Rs.300,000 and

furniture worth Rs.200,000. April 05: Purchased merchandise from Mr. Zafar Rs.25,000 on credit and Rs.10,000 for cash. April 10: Paid rent for the month Rs.30,000. April 15: Paid cash to Mr. Zafar Rs.15,000. April 20: Sold merchandise for cash Rs.15,000. April 25: Mr. Hammad made additional investment in cash Rs.100,000. REQUIRED Record the above transactions in standard form General Journal giving explanation below each entry. SOLUTION 2

MR. HAMMAD KHAN GENERAL JOURNAL

FOR THE MONTH OF APRIL 2015

Date Particulars P/R Debit Credit

Apr. 01 Cash 300,000 Furniture 200,000 Capital 500,000 (To record the investment by owner)

Apr. 05 Purchases 35,000 Accounts payable (Mr. Zafar) 25,000 Cash 10,000 (To record the goods purchased for cash & on credit)

Apr. 10 Prepaid rent 30,000 Cash 30,000 (To record the rent paid in advance)

Apr. 15 Accounts payable (Mr. Zafar) 15,000 Cash 15,000 (To record the cash paid to supplier)

Apr. 20 Cash 15,000 Sales 15,000 (To record the goods sold for cash)

Apr. 25 Cash 100,000 Capital 100,000 (To record the additional cash invested by owner)

Q.No.3 TRIAL BALANCE The following is an incorrect trial balance:

CPA TRADERS TRIAL BALANCE FOR THE YEAR ENDED DECEMBER 31, 2014




Page 5

Capital Rs.8,900

Drawings Rs.1,000

Merchandise inventory 3,700

Purchases 23,125

Sales 39,400

Motor vehicle 1,450

Cash 135

Accounts payable 4,976

Accounts receivable 13,970

Bank (Overdraft) 900

Salaries expense 6,200

Advertising expense 315

Equipment 3,500

Transportation – in 231

Sales returns and allowances 205

Notes payable 425

Purchase returns and allowances 316

Sales discount 280

Purchase discount 315

Insurance expense 1,121

Total 55,232 55,232

REQUIRED Prepare a correct trial balance arranging the accounts in proper sequence. SOLUTION 3

CPA TRADERS TRIAL BALANCE

FOR THE YEAR ENDED DECEMBER 31, 2014

NO. PARTICULARS P/R DEBIT CREDIT

1 Cash 135 2 Accounts receivable 13,970 3 Merchandise inventory 3,700 4 Motor vehicle 1,450 5 Equipment 3,500 6 Accounts payable 4,976 7 Bank (Overdraft) 900 8 Notes payable 425 9 Capital 8,900

10 Drawings 1,000 11 Sales 39,400 12 Sales returns and allowances 205 13 Sales discount 280 14 Purchases 23,125 15 Purchase returns and allowances 316 16 Purchase discount 315 17 Transportation – in 231 18 Salaries expense 6,200 19 Advertising expense 315 20 Insurance expense 1,121

Total 55,232 55,232




Page 6

Q.No.4 CASH BOOK Mr. Abdul Rehman Zaki uses three column cash book. On February 1, 2015 he had cash in hand Rs.70,000 and cash at bank Rs.90,000. During February, the following transactions were completed: February 05: Sold merchandise for Rs.8,000 and received a cheque for the amount. February 10: Issued a cheque to Mr. Iqbal after discount deduction @ 2% in full settlement of

Rs.20,000. February 15: Received a cheque from Mr. Imran for Rs.10,000 and allowed discount Rs.50. February 20: Bank informed that a customer Mr. Atique made direct deposit in bank Rs.2,500. February 25: Withdrew cash form bank Rs.1,700 for business use and Rs.500 for personal use. February 26: Paid salaries expense by cheque Rs.7,000. REQUIRED Prepare a three column cash book. Balance it on February 28 and bring down the balances on March 1, 2015. SOLUTION 4




Page 7

MR. ABDUL REHMAN ZAKI THREE COLUMN CASH BOOK

FOR THE MONTH OF FEBRUARY 2015 B

ank

19

,60

0

1,7

00

50

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7,0

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28

,80

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63

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0

92

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h

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89

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0

89

,70

0

Pu

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40

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40

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(C)

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11

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1




Page 8

Q.No.5 BANK RECONCILIATION STATEMENT Comparison of cash book and bank statement of Akber Tobacco on June 10, 2015 revealed the following:

(i) Bank balance as per cash book Rs.10,780. (ii) Bank balance as per bank statement Rs.11,757. (iii) Cheques for Rs.5,380 were deposited into bank out of which a cheque of Rs.2,380 has

been collected. (iv) Cheques for Rs.4,250 were issued, out of which a cheque of Rs.2,250 has been paid by the

bank. (v) Bank charges debited by bank Rs.40. (vi) Interest credited by bank Rs.80. (vii) A customer deposited Rs.2,000 direct into the bank without giving information to the firm. (viii) A cheque of Rs.692 issued to Ali & Co. was recorded in cash book as Rs.629.

REQUIRED Prepare bank reconciliation statement. SOLUTION 5

AKBER TOBACCO BANK RECONCILIATION STATEMENT

FOR THE MONTH OF JUNE 2015

Particulars Cash Book Pass Book

Unadjusted balance on 10 April 2015 10,780 11,757 Add: Uncleared cheques (iii) 3,000 Less: Outstanding cheques (vi) (2,000) Less: Bank charges (v) (40) Add: Interest income (vi) 80 Add: Accounts receivable (direct deposit) (vii) 2,000 Less: Accounts payable – Error (viii) (63)

Adjusted balance 12,757 12,757

Q.No.6 SPECIAL JOURNALS The following transactions were completed by Mr. Taha during April 2014: April 02: Sold merchandise on account for Rs.1,850 to Mr. Saeed. April 09: Sold merchandise on account for Rs.1,700 to Mr. Adeel. April 15: Defective merchandise returned by Mr. Saeed Rs.150. April 18: Sold merchandise on account for Rs.2,000 to Mr. Sheikh. April 19: Inferior merchandise returned from Mr. Adeel Rs.200. REQUIRED Enter the above transactions in sales journal and sales returns and allowances journal. Total the journals and making posting to the general ledger skeleton T accounts. SOLUTION 6

MR. TALHA SALES JOURNAL


Date Invoice No. Name of Customers P/R Amount

April 02 Mr. Saeed 1,850 April 09 Mr. Adeel 1,700 April 18 Mr. Sheikh 2,000

April 30 Accounts receivable Dr. 5,550 Sales Cr.




Page 9

MR. TALHA SALES RETURN AND ALLOWANCE JOURNAL


Date Credit Note Name of Customers P/R Amount

April 15 Mr. Saeed 150 April 19 Mr. Adeel 200

April 30 Sales return and allowance Dr. 350 Accounts receivable Cr.

Accounts Receivable

Apr. 30 Sales 5,550 Apr. 30 Sales return and allowance 350 Apr. 30 Balance c/d 5,200

5,550 5,550

May. 1 Balance b/d 5,200

Sales

Apr. 30 Accounts receivable 5,550 Apr. 30 Balance c/d 5,550

5,550 5,550

May. 1 Balance b/d 5,550

Sales Returns and Allowances

Apr. 30 Accounts receivable 350 Apr. 30 Balance c/d 350

350 350

May. 1 Balance b/d 350

Q.No.7 CORRECTION OF ERRORS The following errors were made by a book-keeper and were discovered before closing the books:

(i) Purchase of furniture for Rs.9,000 was debited to purchase account. (ii) Return of defective goods worth Rs.2,000 to the supplier was credited to purchase

account. (iii) Ordinary repair costing Rs.1,000 to office equipment was debited to office equipment

account. (iv) Depreciation was overcharged by Rs.3,000 through the allowance for depreciation

account. (v) Purchase of office supplies on credit for Rs.10,000 was recorded as Rs.1,000. (vi) Drawings of Rs.1,000 for personal use of the proprietor was recorded twice.

REQUIRED Give entries in General Journal to correct each of the above errors. SOLUTION 7

M/S. _________ CORRECTING ENTRIES


1 Furniture 9,000 Purchases 9,000 (To correct the purchase of furniture)




Page 10


2 Purchases 2,000 Purchase return and allowances 2,000 (To correct the purchase return)

3 Repair expense 1,000 Office equipment 1,000 (To correct the repair of equipment)

4 Allowance for depreciation 3,000 Depreciation expense 3,000 (To correct the overcharge of depreciation)

5 Office supplies 9,000 Accounts payable 9,000 (To correct the purchase of office supplies)

6 Cash 1,000 Drawings 1,000 (To correct the drawings by owner)

SECTION “C” (DETAILED – ANSWER QUESTIONS) (30) Note: Attempt the following question which is compulsory. The use of calculator is allowed. Q.No.8 FINANCIAL STATEMENT The following balances have been taken from the ledger of Amjad & Badar Associates at end of first quarter of 2015:

Account Title Debit Credit

Cash Rs.45,000

Office supplies 14,000

Prepaid rent 24,000

Office equipment 46,000

Allowance for depreciation (Office equipment) Rs.10,000

Unearned commission 24,000

Capital 50,000

Drawings 5,000

Commission income 70,000

Salaries expense 20,000

Data for Adjustment on March 31, 2015: i) Office supplies unused Rs.4,000 ii) Prepaid rent expired Rs.8,000 iii) Depreciation on fixed asset for the period Rs.1,000 iv) Accrued salaries Rs.5,000 v) Unearned commission amounted to Rs.9,000 REQUIRED Prepare any two of the following:

a) Adjusting entries and adjusted trial balance. b) Income statement and closing entries. c) Balance sheet and opening entries.




Page 11

SOLUTION 9 (a) AMJAD & BADAR ASSOCIATES

ADJUSTING ENTRIES FOR THE PERIOD ENDED MARCH 31, 2015


1 Office supplies expense 10,000 Office supplies 10,000 (To adjust the office supplies)

2 Rent expense 8,000 Prepaid rent 8,000 (To adjust the prepaid rent)

3 Depreciation expense 1,000 Allowance for depreciation – Office equipment 1,000 (To adjust the depreciation expense)

4 Salaries expense 5,000 Salaries payable 5,000 (To adjust the unpaid salaries)

5 Unearned commission 15,000 Commission income 15,000 (To adjust the unearned commission)

AMJAD & BADAR ASSOCIATES

ADJUSTED TRIAL BALANCE FOR THE PERIOD ENDED MARCH 31, 2015

NO. PARTICULARS P/R DEBIT CREDIT

1 Cash 45,000 2 Office supplies 4,000 3 Prepaid rent 16,000 4 Office equipment 46,000 5 Allowance for depreciation (Office equipment) 11,000 6 Unearned commission 9,000 7 Salaries payable 5,000 8 Capital 50,000 9 Drawings 5,000

10 Commission income 85,000 11 Salaries expense 25,000 12 Office supplies expense 10,000 13 Rent expense 8,000 14 Depreciation expense 1,000

Total 160,000 160,000




Page 12

SOLUTION 9 (b) AMJAD & BADAR ASSOCIATES

INCOME STATEMENT FOR THE PERIOD ENDED 31 MARCH 2015

Commission income (70,000 + 15,000) 85,000 Less: Operating Expenses: Salaries expense (20,000 + 5,000) 25,000 Office supplies expense 10,000 Rent expense 8,000 Depreciation expense 1,000

Total operating expenses (44,000)

Net profit 41,000

AMJAD & BADAR ASSOCIATES

CLOSING ENTRIES FOR THE PERIOD ENDED MARCH 31, 2015


1 Expense and revenue summary 44,000 Salaries expenses 25,000 Rent expense 8,000 Office supplies expenses 10,000 Depreciation expense 1,000 (To close the various expense accounts)

2 Commission income 85,000 Expense and revenue summary 85,000 (To close the revenue account)

3 Expense and revenue summary 41,000 Capital 41,000 (To close the expense and revenue summary account)

4 Capital 5,000 Drawings 5,000 (To close the drawings account)

SOLUTION 9 (c)

AMJAD & BADAR ASSOCIATES BALANCE SHEET

AS ON 31 MARCH 2015

ASSETS EQUITIES

Current Assets: Liabilities: Cash 45,000 Unearned commission 9,000 Office supplies 4,000 Salaries payable 5,000

Prepaid rent 16,000 Total liabilities 14,000

Total current assets 65,000 Owner’s Equity: Fixed Assets: Capital 50,000 Office equipment 46,000 Add: Net profit 41,000

Less: All for depreciation (11,000) 91,000

Total fixed assets 35,000 Less: Drawings (5,000)

Total owner’s equity 86,000

Total assets 100,000 Total equities 100,000




Page 13

AMJAD & BADAR ASSOCIATES OPENING ENTRIES

FOR THE PERIOD OPENING APRIL 1, 2015


Apr. 1 Cash 45,000 Office supplies 4,000 Prepaid rent 16,000 Office equipment 46,000 Allowance for depreciation (Office equipment) 11,000 Unearned commission 9,000 Salaries payable 5,000 Capital 86,000 (To open the various assets and equities accounts)

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