Punjab College Sambrial

Subject: Financial Accounting

Section:M5 & F6 Time Allowed: 3 hours Total Marks:100

Attempt any five questions. All questions carry equal marks.

Q.1: From the following particulars prepare a Bank Reconciliation statement of Mr. Baber as on 31 st
March 2006 with the help of revised cash book.

a. Bank over draft as per the cash book Rs.24,000

b. Rs.80,000 worth of cheques were sent for collection and only Rs.50,000 worth of cheques
were collected up to 31st March.
c. Out of cheques for Rs 60,000 issued in March cheques of Rs.36, 000 were presented for
payment.
d. Bills discounted with the bank and dishonored Rs 60,000.
e. A customer directly deposited an amount of Rs 56,000 into the bank.
f. Interest on overdraft Rs 2,500 in the pass book only.
g. A cheque for Rs 10,000 entered in the cash book (Debit Side) was not sent at the bank for
collection.
h. Discount received Rs 500 was entered in the bank column erroneously.
Q.2: Suleman keeps his books on single entry system. His statement of Assets and Liabilities as on 31 st
December 2007 is as follows.
Assets Rs. Liabilities Rs.
Land and Buildings 40,000 Sundry Creditors 130,000
Furniture and Fixtures 6,000 Loan from money lender 113,200
Plant and Machinery 110,000 Other liabilities 26,800
Stock 18,400
Sundry Debtors 151,000
Cash 16,600
342,000 2,70,000

His drawings during the year amount to Rs. 6000. Land and building are to be
depreciated by 2%, furniture and fixture by 10% and plant and machinery by 10%. Sundry
debtors are to be reduced by 2%. He has used Rs. 1600 worth of stock of his business for private
purposes. During the year 2007 he sold some of his household furniture for Rs. 2000 and paid this
into his business bank account. His capital at beginning of the year was Rs. 60,000 draw up his
statement of profit and loss of the year ended 31st December 2007.

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Q.3: A sells goods to B for Rs 10,000 on March 1, 2005.A draws a 3 month bill on B, which he
accepts .A gets it discounted by his banker at 10% P.a. On the due date the bill is dishonored the bank
pays Rs 30 as noting charges. However B pays Rs 4,060 in cash (Rs 60 for noting charges and interest)
and accepts a new bill for Rs 6,000 for two months. On the due date B approaches A and again asks for
renewal of the bill for a further period of 3 months. A agrees to the request, provided B pays Rs. 30 as
interest in cash the last bill is paid by B one month before its maturity under a rebate of Rs 15.

Required: Pass the journal entries in the book of A and B.

Q.4: From the following trail balance prepare the trading and profit and loss account for the year ended
31st December 2006.
Debit Credit
Rs Rs
Stock on 1.1.2006 24,200
Purchases 41,000
Sales 1,19,600
Capital 1,83,200
Drawings 8,400
Furniture 24,000
Salaries Outstanding 2,600
Sundry Debtors 33,600
Sundry Creditors 25,000
Income Tax 1,200
Machinery 36,000
Building 80,000
10 % Investment 16,000
Wages 24,000
Salaries 26,000
General Expenses 6,000
Cash at Bank 6,000
Cash in Hand 4,000
3,30,400 3,30,400
Adjustments:
1. Depreciate Building at 2% p.a, Machinery at 5% p.a and furniture at 10% p.a .
2. Provide provision for doubtful debts at 5% and create reserve for discount at 5% on sundry
debtors.
3. Create reserve for discount on creditors at 3%
4. Wages payable Rs 3000
5. Sock on 31.12.2006 is Rs. 32,600

Q.5: From the following particular prepare a treble column cash book.
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Dec1. Cash in hand Rs.1, 500 and at bank Rs.70, 000
Dec.2. Received from Rameez Rs.9, 900, Discount allowed Rs.100.
Dec.3. Deposited into bank Rs.5,000.
Dec.4. Purchased goods for Rs.25, 000 and paid by cheque.
Dec.5 sold goods to Amir on credit Rs.7, 000.
Dec7. Received from Amir a cheque for Rs.7, 000.
Dec.8. Sold Goods for cash Rs.7, 000.
Dec.9. Paid saleem Rs.9,800 by cheque, discount Received Rs.200.
Dec.11. withdrew from bank for business use Rs.10, 000.
Dec.1. Paid rent by cheque Rs.700.
Dec.22.Received two cheques; (a) from A.Rs.10,000 and (b) From B.Rs.5,000.
Dec.23. Cash sale Rs.2, 000 and banked the same.
Dec.24. Received from X cash Rs.3, 000 and cheque Rs.5, 000 both deposited into bank.
Dec.28. Paid to Y cash Rs.2, 000 and cheque Rs.3000.
Dec.31. Bank charged commission Rs.5, 00

Q.6: Arshad keeps his books by single entry system. He gives you the following information.
1-1-2005 31-12-2005
Rs. Rs.
Cash in hand 500 -
Cash at bank 2500 7000
Debtor 7500 8000
Stock in trade 45000 37500
Furniture 5000 5000
Creditors 15000 10000

During the year he received Rs.110000 from Debtor and paid Rs.75000 to creditors. He paid Rs21000 for
wages which include Rs.200 per week himself .He paid Rs.10000 for sundry expenses. The creditors
figure Rs.75, 000 include 2500 for goods for own use. He charges 10% depreciation on furniture.
Prepare trading and profit and loss account for the year ended 31 st December 2005 and the balance sheet
as at that date.