The workings under the heading of “Additional Working”

are not required according to the requirement of the examiner.

These are only for understanding the solutions.
For more help, visit www.a4accounting.net

2002
XI – ACCOUNTING

REGULAR

Compiled and Solved by:

S.Hussain
 Compiled & Solved by: S.Hussain
A4accounting@hotmail.com

ACCOUNTING – 2002
REGULAR
Time: Three Hours Max. Marks: 100
Note: Attempt any Four questions. All questions carry equal marks. Show computations, where
necessary.
Q.No.1 ACCOUNTING EQUATION
a) On July 1, Basit began operating a business. After each of the five transactions, the accounting
equation for the business showed the following balances. Analyze the equation and describe
each of the five transactions with their amounts.
BALANCE AFTER:
Transaction + Cash +Accounts + Office + Office = Accounts + Basit’s
receivable supplies furniture payable capital
(i) Rs.30,000 0 0 0 = 0 30,000
(ii) Rs.29,200 0 2,000 0 = 1,200 30,000
(iii) Rs.11,200 0 2,000 18,000 = 1,200 30,000
(iv) Rs.11,200 2,400 2,000 18,000 = 1,200 32,400
(v) Rs.8,200 2,400 3,400 19,600 = 1,200 32,400
b) During the month of September, AB Company had cash receipts of Rs.36,000 and cash payments
of Rs.40,500. The September 30 cash balance was Rs.8,000; calculate the August 31 cash
balance.
c) Aqeel, the owner of a business had a capital account balance of Rs.230,000 on May 31 and
Rs.296,000 on June 30. His net income for the month June was Rs.72,000; calculate withdrawals
during June from the business.
d) The ending balance of an owner’s equity is Rs.42,000. During the year the owner contributed
Rs.12,000 and withdrew Rs.8,000. If the firm had Rs.16,000 net incomes for the year, what was
the owner’s equity at the beginning of the following?:
(i) Rs.38,000. (ii) Rs.22,000. (iii) Rs.42,000. (iv) Rs.46,000.

SOLUTION 1 (a)
(i) Mr. Basit invested cash in the business Rs.30,000.
(ii) Purchased office supplies for Rs.800 on cash and for Rs.1,200 on account.
(iii) Purchased office furniture for cash Rs.18,000.
(iv) Services provided to the customers on account Rs.2,400.
(v) Purchased office supplies for cash Rs.1,400 and office furniture for cash Rs.1,600.

SOLUTION 1 (b)
Cash at end 8,000
Add: Cash payments during the period 40,500
Total cash available 48,500
Less: Cash receipts during the period (36,000)
Cash at 31 August 12,500

XI – Accounting – 2002 (Regular) Page 2

 Compiled & Solved by: S.Hussain
A4accounting@hotmail.com

SOLUTION 1 (c)
Capital at 31 May 230,000
Add: Net profit 72,000
302,000
Less: Capital at 30 June (296,000)
Drawings 6,000

SOLUTION 1 (d)
Capital at end 42,000
Add: Drawings 8,000
50,000
Less: Additional investment (12,000)
38,000
Less: Net profit (16,000)
Drawings 22,000

Q.No.2 GENERAL JOURNAL

a) Explain the terms “Journalizing” and “Posting”.
b) During the month of March of the current year Mr. Zia, a sole business consultant completed
the following transactions:
March 1. Zia started his business with the cash investment of Rs.25,000.
March 2. Bought Rs.6,000 supplies for his office.
March 3. Paid Rs.5,000 rent for the month of March for the office.
March 5. Purchased office equipment for Rs.12,000. This amount was to be paid in three equal
installments at the end of March, April and May.
March 16. Receipt from consultation service was Rs.8,250.
March 30. Payment of salary to the assistant was Rs.3,600.
March 31. Paid the first installments on equipment.
March 31. Receipt from the service rendered during the last two weeks ended March 31,
amounted to Rs.9,300.
March 31. Zia withdrew Rs.8,000 cash for his personal use.
REQUIRED
Prepare General Journal entries to record the above transactions, giving explanation below each
entry.

SOLUTION 2 (a)
Journalizing:
Entering of financial data (taken usually from a journal voucher), pertaining to a specific transaction, in a
journal under a double entry bookkeeping system. It involves recording of five aspects of a transaction:
(1) its date, (2) ledger account to be debited and amount, (3) ledger account to be credited and amount,
(4) brief description of the transaction, and its (5) cross-reference to the general ledger.
Posting:
Process of transferring debit and credit amounts from journals to the ledger(s) is called posting.

XI – Accounting – 2002 (Regular) Page 3

 Compiled & Solved by: S.Hussain
A4accounting@hotmail.com

SOLUTION 2 (b)
MR. ZIA
GENERAL JOURNAL
FOR THE MONTH OF MACRH
Date Particulars P/R Debit Credit
1.Mar Cash 25,000
Capital 25,000
(To record the investment by owner in the business)
2.Mar Office supplies 6,000
Cash 6,000
(To record the purchase of office supplies for cash)
3.Mar Prepaid office rent 5,000
Cash 5,000
(To record the rent paid for the month of March)
5.Mar Equipments 12,000
Accounts payable 12,000
(To record the purchase of equipment on installment)
16.Mar Cash 8,250
Consultation fees income 8,250
(To record the consultation income received)
30.Mar Salaries expense 3,600
Cash 3,00
(To record the cash paid to office assistant)
31.Mar Accounts payable 4,000
Cash 4,000
(To record the first installment paid for equipment)
31.Mar Cash 9,300
Consultation fees income 9,300
(To record the cash received against consultation)
31.Mar Drawings 8,000
Cash 8,000
(To record the cash withdrew by owner for personal
use)

Q.No.3 LEDGER POSTING

GIVEN Take the transaction in question numbered 2 above.
REQUIRED
(i) Set up T-accounts involved therein.
(ii) Post the transactions direct into the ledger accounts affected, completing double entry in each
case.
(iii) Balance the accounts.
(iv) Prepare a Trial Balance dated March 31.

XI – Accounting – 2002 (Regular) Page 4

 Compiled & Solved by: S.Hussain
A4accounting@hotmail.com

SOLUTION 3 (i, ii & iii)

GENERAL LEDGER
Cash
1.Mar Capital 25,000 2.Mar Supplies 6,000
16.Mar Service income 8,250 3.Mar Prepaid rent 5,000
31.Mar Service income 9,300 30.Mar Salaries expense 3,600
31.Mar Accounts payable 4,000
31.Mar Drawings 8,000
26,600
31.Mar c/d balance 15,950
42,550 42,550
1.Apr b/d balance 15,950

Supplies
2.Mar Cash 6,000
31.Mar c/d balance 6,000
6,000 6,000
1.Apr b/d balance 6,000

Prepaid Rent
3.Mar Cash 5,000
31.Mar c/d balance 5,000
5,000 5,000
1.Apr b/d balance 5,000

Equipment
5.Mar Cash 12,000
31.Mar c/d balance 12,000
12,000 12,000
1.Apr b/d balance 12,000

Accounts Payable
31.Mar Cash 4,000 5.Mar Office equipments 12,000
31.Mar c/d balance 8,000
12,000 12,000
1.Apr b/d balance 8,000

Capital
1.Mar Cash 25,000
31.Mar c/d balance 25,000
25,000 25,000
1.Apr b/d balance 25,000

Drawings
31.Mar Cash 8,000
31.Mar c/d balance 8,000
8,000 8,000
1.Apr b/d balance 8,000

XI – Accounting – 2002 (Regular) Page 5

 Compiled & Solved by: S.Hussain
A4accounting@hotmail.com

Service Income
16.Mar Cash 8,250
31.Mar Cash 9,300
31.Mar c/d balance 17,550
17,550 17,550
1.Apr b/d balance 17,550

Salaries Expense
30.Mar Cash 3,600
31.Mar c/d balance 3,600
3,600 3,600
1.Apr b/d balance 3,600

SOLUTION 3 (iv)
MR. JAMIL
TRIAL BALANCE
FOR THE MONTH OF MARCH 2001
NO. PARTICULARS P/R DEBIT CREDIT
1 Cash 15,950
2 Supplies 6,000
3 Prepaid rent 5,000
4 Equipments 12,000
5 Accounts payable 8,000
6 Capital 25,000
7 Drawings 8,000
8 Service income 17,550
9 Salaries expense 3,600
Total 50,550 50,550

Q.No.4 ADJUSTMENTS AND CLOSING PROCESS

GIVEN The unadjusted Trial Balance of Masoom Associates, Karachi as of December 31, 2001,
the end of accounting year is as follows:
Debit (Rs.) Credit (Rs.)
Cash 9,000
Un-expired insurance 3,000
Supplies 4,800
Equipment 36,000
Allowance for depreciation 2,400
Masoom Capital 37,600
Masoom Drawings 10,000
Revenue from service 96,000
Salaries expense 51,600
Rent expense 21,600
136,000 136,000
REQUIRED
Prepare adjusting and closing journal entries using the information given below:

XI – Accounting – 2002 (Regular) Page 6

 Compiled & Solved by: S.Hussain
A4accounting@hotmail.com

a) Insurance expired Rs.1,800.

b) Supplies on hand Rs.1,400.
c) Estimated depreciation of office equipment Rs.5,000.
d) Unpaid salaries Rs.1,600.

SOLUTION 4
MASOOM ASSOCIATES, KARACHI
ADJUSTING ENTRIES
FOR THE PERID ENDED 31 DECEMBER 2001
Date Particulars P/R Debit Credit
a) Insurance expense 1,800
Un-expired insurance 1,800
(To adjust the insurance expired)
b) Supplies expense 3,400
Supplies 3,400
(To adjust the supplies used during the period)
c) Depreciation expense 5,000
Allowance for depreciation (Equipment) 5,000
(To adjust the depreciation expense on equipment)
d) Salaries expense 1,600
Salaries payable 1,600
(To adjust the unpaid salaries)

MASOOM ASSOCIATES, KARACHI

CLOSING ENTRIES
FOR THE PERID ENDED 31 DECEMBER 2001
Date Particulars P/R Debit Credit
1 Expense and revenue summary 85,000
Insurance expense 1,800
Supplies expense 3,400
Salaries expense 53,200
Depreciation expense 5,000
Rent expense 21,600
(To close the various expenses accounts)
2 Revenue from service 96,000
Expense and revenue summary 96,000
(To close the various income accounts)
3 Expense and revenue summary 11,000
Capital 11,000
(To transfer the profit to the capital account)
4 Capital 10,000
Drawings 10,000
(To close the drawings account)

XI – Accounting – 2002 (Regular) Page 7

 Compiled & Solved by: S.Hussain
A4accounting@hotmail.com

Q.No.5 FINANCIAL STATEMENTS

a) BALANCE SHEET
GIVEN The following is the post closing Trial Balance of Alam Automobile Service.
ALAM AUTOMOBILE SERVICES
TRIAL BALANCE DECEMBER 31, 2001
Debit Credit
Cash 6,500
Accounts receivable 4,000
Un-expired insurance 600
Office supplies 600
Testing equipment 7,200
Allowance for depreciation 100
Unearned service fees 3,000
Accounts payable 2,400
Alam Capital 10,400
Salaries payable 3,000
18,900 18,900
REQUIRED
Prepare Balance Sheet as on December 31, 2001.
b) INCOME STATEMENT
GIVEN The following closing entries were made by Raja Cloth House at the end of the current
year December 31.
Date Particulars P/R Debit Credit
1 Merchandise inventory Rs.55,000
Sales Rs.300,000
Purchase returns and allowances Rs.2,400
Purchase discount Rs.3,600
Income summary Rs.361,000
2 Income summary Rs.316,800
Merchandise inventory Rs.42,000
Sales return and allowances Rs.2,400
Sales discount Rs.3,600
Purchases Rs.180,000
Transport-in Rs.4,800
Selling expense Rs.48,000
General and administrative expenses Rs.36,000
REQUIRED
Use the information in the above closing entries and prepare an income statement for Raja
Cloth House.

XI – Accounting – 2002 (Regular) Page 8

 Compiled & Solved by: S.Hussain
A4accounting@hotmail.com

SOLUTION 5 (a)
ALAM AUTOMOBILE SERVICES
BALANCE SHEET
AS ON 31 DECEMBER 2001
ASSETS EQUITIES
Current Assets: Current Liabilities:
Cash 6,500 Accounts payable 2,400
Accounts receivable 4,000 Salaries payable 3,000
Un-expired insurance 600 Unearned service fees 3,000
Office supplies 600 Total liabilities 8,400
Total current assets 11,700
Owner’s Equity:
Fixed Assets: Capital 10,400
Testing equipment 7,200 Total owner’s equity 10,400
Less: All for depreciation (100)
Total fixed assets 7,100
Total assets 18,800 Total equities 18,800

SOLUTION 5 (b)
RAJA CLOTH HOUSE
INCOME STATEMENT
FOR THE PERIOD ENDED 31 DECEMBER
Sales 300,000
Less: Sales return and allowances 2,400
Less: Sales discount 3,600 (6,000)
Net sales 294,000
Less: Cost of Goods Sold:
Merchandise inventory (beg) 42,000
Add: Net Purchases:
Purchases 180,000
Add: Transportation in 4,800
Delivered purchases 184,800
Less: Purchase returns and allowances (2,400)
Less: Purchase discount (3,600)
Net purchases 178,800
Merchandise available for sale 220,800
Less: Merchandise inventory (end) (55,000)
Cost of goods sold (165,800)
Gross profit 128,200
Less: Operating Expenses:
Selling expense 48,000
General and administrative expense 36,000
Total operating expenses (84,000)
Net profit 44,200

XI – Accounting – 2002 (Regular) Page 9

 Compiled & Solved by: S.Hussain
A4accounting@hotmail.com

Q.No.6 SPECIAL JOURNALS

GIVEN The following are Purchase Journal and Purchase Returns and Allowances Journal of
Muzammil and Company for the month of June of the current year.
PURCHASE JOURNAL
Date Invoice No. Suppliers P/R Amount
Rs.
June 01 435 Qazi Brothers 12,000
June 04 641 Mehran Traders 16,500
June 14 512 Qazi Brothers 9,400
June 24 672 Mehran Traders 11,600
June 24 215 Dilawar and Sons 7,300
June 30 Purchases Dr. 502 56,800
Accounts payable Cr. 201

PURCHASE RETURN AND ALLOWANCE JOURNAL

Date Invoice No. Name of Suppliers P/R Amount
Rs.
June 09 112 Qazi Brothers 550
June 09 213 Mehran Traders 950
June 20 145 Qazi Brothers 400
June 26 248 Mehran Traders 600
June 27 215 Dilawar and Sons 800
June 30 Accounts payable Dr. 201 3,300
Purchase returns and allowance Cr. 503
REQUIRED
Prepare General Journal and Subsidiary Ledger of Accounts Payable and their schedule on June 30.

SOLUTION 6
GENERAL LEDGER
Purchases (502)
30.June Accounts payable 56,800
30.June c/d balance 56,800
56,800 56,800
1.July b/d balance 56,800

Accounts Payable (201)

30.June Purchase returns 3,300 30.June Purchases 56,800
30.June c/d balance 53,500
56,800 56,800
1.July b/d balance 53,500

Purchase Returns and Allowances (503)

30.June Accounts payable 56,800
30.June c/d balance 56,800
56,800 56,800
1.July b/d balance 56,800

XI – Accounting – 2002 (Regular) Page 10

 Compiled & Solved by: S.Hussain
A4accounting@hotmail.com

MUZAMMIL AND COMPANY

SUBSIDIARY LEDGER
FOR THE MONTH OF JUNE
Qazi Brothers
Date Invoice No. Description P/R Debit Credit Balance
1.June 435 PJ 12,000 12,000
9.June 112 PRJ 550 11,450
14.June 512 PJ 9,400 20,850
20.June 145 PRJ 400 20,450

Mehran Traders
Date Invoice No. Description P/R Debit Credit Balance
4.June 641 PJ 16,500 16,500
9.June 213 PRJ 950 15,550
24.June 672 PJ 11,600 27,150
26.June 248 PRJ 600 26,550

Dilawar and Sons

Date Invoice No. Description P/R Debit Credit Balance
24.June 215 PJ 7,300 7,300
27.June 215 PRJ 800 6,500

MUZAMMIL AND COMPANY

SCHEDULE OF ACCOUNTS PAYABLE
FOR THE MONTH ENDED 30 JUNE
Name of Suppliers Amount
Qazi Brothers 20,450
Mehran Traders 26,550
Dilawar and Sons 6,500
Total 53,500

Q.No.7 PETTY CASH BOOK

GIVEN A firm completed the following petty cash transactions during December of the current
year:
December 01. Drew a Rs.1,500 cheque, cashed it, and gave it to the petty cashier.
December 03. Purchased computer paper for Rs.288.
December 06. Paid Rs.56 delivery expenses and Rs.30 wages on merchandise purchased.
December 09. Paid Rs.75 parcel post charges.
December 10. Paid Rs.200 to the son of the proprietor from petty cash for personal use.
December 18. Paid Rs.95 delivery charges on merchandise purchased.
December 22. Paid a service station for servicing the personal car of the proprietor Rs.75.
December 25. Paid delivery expenses Rs.155.
December 30. Paid Rs.445 for the repair of computer.
December 31. Paid for entertainment Rs.55.
REQUIRED
(i) Prepare Petty Cash Book having five categories of accounts: Office supplies, Delivery expenses,
Postage, Withdrawals, and Miscellaneous expenses.

XI – Accounting – 2002 (Regular) Page 11

 Compiled & Solved by: S.Hussain
A4accounting@hotmail.com

(ii) Prepare journal entries to record:

a) Establishment of Petty Cash Fund.
b) Disbursement of Petty Cash Fund.
c) Replenishment of Petty Cash Fund.

SOLUTION 7
M/S. ________
GENERAL JOURNAL
FOR THE MONTH OF DECEMBER
Date Particulars P/R Debit Credit
1.Dec Petty cash fund 1,500
Bank 1,500
(To record the establishment of petty cash fund)
31.Dec Office supplies 288
Delivery expenses 306
Postage 75
Withdrawals 275
Miscellaneous expense 530
Petty cash fund 1,474
(to record the expenses paid)
1.Sep Petty cash fund 1,474
Bank 1,474
(To record the replenishment of petty cash fund)

XI – Accounting – 2002 (Regular) Page 12

 Cash (Dr) Date Voucher Particulars Total Office Delivery Postage Withdrawals Miscellaneous
No. (Cr) Supplies Expenses (Cr) (Cr) Expenses (Cr)
(Cr) (Cr)
1,500 1.Dec Petty cash fund

3.Dec Computer paper 288 288

6.Dec Delivery expense 86 56 30

& wages
9.Dec Parcel post 75 75
charges
10.Dec Drawings 200 200

18.Dec Delivery charges 95 95

22.Dec Drawings 75 75
M/S. _______

25.Dec Delivery expense 155 155

PETTY CASH BOOK

30.Dec Repair of 445 445

FOR THE MONTH OF DECEMBER

computer
31.Dec Entertainment 55 55

1,500 1,474 288 306 75 275 530

31.Dec C/D Balance 26

XI – Accounting – 2002 (Regular)

1,500 1,500

26 1.Jan B/D Balance

Page 13
A4accounting@hotmail.com
Compiled & Solved by: S.Hussain