Principles and Practice of Accounting - 2 mtp MTP

1. (a) State with reasons whether the following statements are True or False: (i) Amount spent for the construction of temporary huts, which were necessary for construction of the Cinema House and were demolished when the Cinema House was ready, is capital expenditure. (ii) Accrual concept implies accounting on cash basis. (iii) Reducing balance method of depreciation is followed to have a uniform charge for depreciation and repairs and maintenance together. (iv) Discount at the time of retirement of a…

2. (a) Ambiance ltd. keeps no stock records but a physical inventory of stock is made at the end of each quarter and the valuation is taken at cost. The company’s year ends on 31%t March, 2024 and their accounts have been prepared to that date. The stock valuation taken on 31% March, 2024 was however, misleading and you have been advised to value the closing stocks as on 31st March, 2024 with the stock figure as on 31st December…

3. (a) The details of Assets and Liabilities of Mr. Jalaj as on 31-3-2022 and 31-3-2023 are as follows: Particulars 31-3-2023 31-3-2024 () (8) Assets: Furniture 62,500 Building 1,25,000 Stock 1,25,000 3,12,500 Sundry Debtors 75,000 1,37,500 Cash in hand 14,000 16,500 Cash at Bank 75,000 93,750 Liabilities: Loans 1,12,500 87,500 Sundry Creditors 62,500 1,00,000 Mr. Jalaj decided to provide depreciation on building by 2.5% and furniture by 10% for, the period ended on 31-3-2023. Mr. Jalaj purchased jewellery for ₹30,000…

P, Q, and R are partners sharing profits and losses as to 2:2:1. Their Balance Sheet as on 31° March, 2023 is as follows: Liabilities =| Assets z Capital Plant and 1,08,000 accounts Machinery P 1,20,000 Fixtures 24,000 Q 48,000 Stock 60,000 R 24,000 | 1,92,000 | Sundry debtors 48,000 Reserve Fund 60,000 | Cash 60,000 Creditors 48,000 3,00,000 3,00,000 They decided to dissolve the business. The following are the amounts realized: Particulars z Plant and Machinery 1,02,000 Fixtures 18,000…

M/s. Mangrove Arts were unable to agree the Trial Balance as on 31% March, 2024 and have raised a suspense account for the difference. Next year the following errors were discovered: (i) Repairs made during the year were wrongly debited to the building A/c - = 52,500. (ii) The addition of the 'Freight' column in the purchase journal was short by = 9,000. (iii) Goods to the value of = 6,150 returned by a customer, Leena., had been posted to…

Woodland Mills Ltd invited applications for issuing 10,000 Equity Shares of = 10 each. The amount was payable as follows: (i) On Application = 1 per share (ii) On Allotment = 2 per share (iii) | On First call = 3 per share (iv) On Second and final Call % 4 per share The issue was fully subscribed. Amar to whom 100 shares were allotted, failed to pay the allotment money and his shares were forfeited immediately after the allotment.…