COMMERCE ZONE (FOR DPS)

DATE: 18-12-2022 Accountancy XI

PROVISION & RESERVE , ROE AND
DEPRECIATION ASSIGNMENT
Q1. Rectify the following errors assuming that a suspense account was opened.
(a) Credit sales to Varma ₹14,000 were posted to Sharma as ₹10,000.
(b) Goods returned to Mahesh ₹8,000 were posted to credit of Suresh ₹6,000.
(c) The total of sales return day book was over-cast by ₹7,000
(d) A sum of R.6000 written off as Depreciation on Machinery, were not posted to Depreciation A/c. (4)

Q2. R & Co. bought a plant for Rs. 6,00,000 on 1st April, 2011. It decided to charge depreciation @10% p.a. on
diminishing balance method. On 1s October, 2013, company sold 1/4th plant for Rs. 80,000. It bought
another plant on the same date for Rs. 2,00,000. Books are closed on 31st December each year.
Prepare Plant a/c and Accumulated Depreciation A/ c for the three years. (6)

Q3. Correct the following errors by opening a suspense account.

(i) The sales book has been totalled ₹1,000 short.
(ii) Goods worth ₹1,500 returned by Vishal & Co. have not been recorded anywhere.
(iii) Goods purchased ₹2,500 have been posted to the debit of the supplier Raja & Co.
(iv) Furniture purchased from Nayan & Brothers ₹10,000 has been entered in purchase day book.
(v) Discount received from Mayank & Sons ₹150 has not been entered in the discount column of the cash book.
(vi) Discount allowed to Naveen & Co ₹180 has not been entered in the discount column of the cash book.
The account of Naveen & Co has however been correctly posted. (6)

Q4. An accountant of a trading concern could not agree the Trial Balance. There was an excess credit of Rs. 100
which he transferred to the suspense A/c. The following errors were subsequently discovered.
(a) Received Rs. 550 from X, were posted to the debit of his account.
(b) Rs. 100 being purchase return was posted to the debit of purchases a/c.
(c) Discount received Rs. 200 Correctly entered in the Cash Book but posted to the debit of the discount A/c.
(d) Salary paid Rs. 3,500 to X was posted to the salary A/c as Rs 2,500.
(e) A purchase of Rs. 400 has been passed through Sales Book. However the customer’s account has been
correctly credited.
Give Rectifying entries and Suspense A/c. (6)

Q5. Laxmi Cotton Mills purchased a machinery on 1st August, 2015 for ₹90,000. On 1st October, 2016 it
purchased another machine for ₹40,000. On 30th June, 2017 it sold off the first machine purchased in 2015
 for ₹58,000 and on the same date purchased a new machinery for ₹1,00,000. Depreciation is provided at
20% p.a. on the original cost each year. Accounts are closed each year on 31st March.
Show the Machinery Account and Accumulated Depreciation Account for three years. CGST and SGST are
charged @ 6% each on purchase and sale of Machinery. (6)

Q6. On 1st Oct., 2015, ABC Ltd. Purchased a machinery for ₹6,00,000. On 31st May, 2016, a part of the
machinery purchased on 1st Oct., 2015 for ₹80,000 was sold for ₹30,000. On the same date a fresh
machinery was purchased for ₹1,50,000. Depreciation is provided at 20% per annum on the written down
value method and the books are closed on 31st March each year.
You are required to prepare: (a) Machinery Account, (b) Provision for Depreciation Account (c) Machinery
Disposal Account. (6)

Q7. On 1st April, 2007, X Ltd. bought a machine for Rs. 4,00,000. On 1st July, 2009, a part of machine bought on 1st
April, 2007 for Rs. 80,000 was sold for Rs. 35,000. It purchased a new machine for Rs. 1,00,000 on 1st October,
2009. Depreciation was provided 20% p.a. on diminishing balance method and accounts were closed on 31st
March each year.
Prepare Machinery a/c and Provision for depreciation a/c for 3 years. (8)

Q8. Rajan could not agree the Trial Balance. He transferred to the Suspense Account amount of Rs. 496, being
excess of the debit side total. The following errors were subsequently discovered:
(a) A motor car had been purchased for Rs.3,400 private use. Cash had been correctly credited but the Motor
Car Account had been debited with Rs. 3,140 only.
(b) Interest on deposits received Rs.90, but had not been credited to the Interest Account.
(c) Purchase of furniture for Rs.615 passed through Purchase Book.
(d) An amount of Rs. 5500 received from Amar was posted to his account as Rs. 550.
(e) Purchase Return Book total on a folio was carried forward as Rs. 221 instead of Rs. 112.
(f) A cash sale of Rs. 1,235 duly entered in the Cash Book but posted to Sales Account as Rs. 325.
(g) Rest of the difference was due to incorrect total in the Rent Account in the Ledger.
Give journal entries to rectify the above. (8)

Q9. On Jan 01, 2012 Vishal & Co. purchased a second hand plant costing ₹2,00,000 and spent ₹10,000 on its
overhauling. It also spent ₹5,000 on transportation and installation of the plant. It was decided to provide
for depreciation @ 20% on written down value method. The plant was destroyed by fire on July 31st, 2015
and an insurance claim of ₹50,000 was admitted by the insurance company.
Prepare plant account, accumulated depreciation account and plant disposal account assuming that the
company closed its books on Dec. 31st every year. (8)

Q10. Rectify the following errors:

(a) Goods returned to Kushi ₹8,000 were recorded in Sales Return Book. However, Kushi’s account was
correctly debited.
(b) Credit sales to Gopal ₹10,000 were recorded in Purchase Book.
(c) ₹350 paid in Cash for a typewriter was charged to office Expenses A/c.
(d) Goods amounting to ₹660 sold to W, were correctly entered in Sales book but posted to W’s Account as
760.
(e) The total of sales for the month were overcast by ₹1,000.
(f) An item of ₹626 written off as bad-debt from Chanderkant has not been debited to Bad-Debts A/c.
(g) A sum of ₹375 owed by Ravi has been included in the list of Sundry Creditors.
(h) Goods sold to X and Y for ₹1,600 and ₹1,200 respectively, but were recorded in the Sales Book as to X
₹1,200 and Y as ₹1,600. (8)