Principles and Practice of Accounting - January 2021

1. (a) State with reasons, whether the following statements are True or False: 6x2 =12 (i) Re-issue of forfeited shares is allotment of shares but not a sale. (ii) Subsidy received from the government for working capital by a manufacturing concern is a revenue receipt. (iii) The Sale Book is kept to record both the cash and credit sales. (iv) There are two ways of preparing an account current. (v) Consignee will not pass any journal entry in his books…

(a) Mr. Joshi's trial balance as on 31% March, 2020 did not agree. The 10 difference was put to a Suspense Account. During the next trading period, the following errors were discovered : (i) The total of the Purchases Book of one page, & 5,615 was carried forward to the next page as % 6,551. (ii) A sale of 281 was entered in the Sales Book as % 821 and posted to the credit of the customer. (iii) A return…

Products Limited of Kolkata has given the following particulars 10 regarding tea sent on consignment to C Stores of Mumbai : Cost price Selling price Qty consigned 5 Kg. Tin = 100 each % 150 each 1,000 Tins 10 Kg. Tin = 180 each & 250 each 1,000 Tins (i) The consignment was booked on freight "To Pay" basis. The freight was charged @ 5% of selling value. (ii) C Stores sold 500, 5 kg Tins and 800, 10 kg…

4. (a) The partnership deed of a firm consisting of 3 partners- P,Q andR ' 10 (profit sharing ratio being 2:1:1) and whose fixed capitals are ₹ 30,000, % 12,000 and & 8,000 respectively provides as follows: (i) The partners be allowed interest @ 8% p.a. on their fixed capitals, but no interest to be allowed on undrawn profits or charged on drawings. (ii) That upon the death of a partner, the goodwill of the firm be valued at 2…

5. (a) From the following particulars ascertain the value of inventories as on 5 318t March, 2020 : Inventory as on 1‘ April, 2019 - % 3,50,000 Purchase made during the year - % 12,00,000 Sales -— &18,50,000 Manufacturing Expenses - = 1,00,000 Selling and Distribution Expenses — = 50,000 Administration Expenses = = 80,000 At the time of valuing inventory as on 31% March, 2019, a sum of % 20,000 was written off on a particular item which was…

(a) A Limited is a company with an authorised share capital of 15 = 1,00,00,000 in equity shares of % 10 each, of which 6,00,000 shares had been issued and fully paid up on 31% March, 2020. The company proposes to make a further issue of 1,35,000 of these % 10 shares at a price of % 14 each, the arrangement of payment being : (i) % 2 per share payable on application, to be received by 31% May, 2020…