All questions are compulsory. Time: 2.

5 hours

Q.1: Mr. Ahmed started business with cash investment of Rs. 100,000 on Jan 1, 2023. He keeps his
accounting records on Single Entry basis. On Dec 31, 2023, he had the following information if his
accounts: Jan 1, 2023 Dec 31, 2023

Cash at bank 25,000 ?

A/c Rec 55,000 50,000
Merchandise Inventory 40,000 34,000
O. E 60,000 70,000
Furniture 30,000 40,000
Unexpired Insurance 2,500 1,500
A/c Payable 39,000 54,000
Capital ? 191,500

Additional information on Dec 31, 2023:

i) Mr. Ahmed had withdrawn Rs. 3,000 /month during the year for his personal use, and Rs.
1,000 for last 6 months for office use.
ii) He invested additional capital of Rs. 30,000
iii) The bank statement showed a debit of Rs. 1,000 for Zakat deduction and credit of Rs.
2,000 for interest.
iv) Insurance expired Rs. 1,000.
v) Dep of O. E was estimated at 20% and on Furniture at 10%.
vi) Bad debts expense was estimated at 5%.

Required:

a) Prepare statements showing calculation of Capital opening and Cash ending.

b) Prepare a statement of P/L for the year ending Dec 31, 2023.
c) Prepare Balance Sheet as of Dec 31, 2023.

Q.2: The data were extracted from the balance sheet of Meezan Co. Ltd on Dec 31, 2023:

Authorized Capital:
250,000 ordinary shares of Rs. 10 each Rs. 2,500,000
Paid up Capital:
150,000 ordinary shares of Rs. 10 each Rs. 1,500,000
Retained earnings Rs. 200,000
On Dec 31, 2023, the income summary of the company showed net income of Rs. 300,000.
At this date the company decided as under:

(i) To declare cash Dividend of 10% /Share.

(ii) To declare stock dividend of 15%.
(iii) To appropriate Rs 150,000 for plant expansion.
(iv) To appropriate Rs. 100,000 for contingencies.
(v) Issued sufficient number of shares in the settlement of stock dividend.

Required:

(a) GJ to transfer the net income to retained earnings account.

 (b) GJ to the above decision of the company.
(c) Prepare partial balance sheet as of Dec 31, 2023.

Q.3 Haier Ltd. Purchased a machine on Mar 1, 2019, having list price of Rs. 500,000, trade discount
5%, and cash discount 2/15, n/30. The company paid the amount after a week. The machine had a
life of 5 years, salvage value of Rs. 50,000, life in hours 50,000, and 25,000 units.

Additional information:

(i) Sales tax 10%.

(ii) Transportation charges Rs. 10,000.
(iii) Insurance in transit Rs. 5,000.
(iv) Fire insurance Rs. 3,000.
(v) Installation and testing charges Rs. 8,000.
(vi) A part of the machine was damaged and replaced at the cost of Rs. 15,000.
(vii) The machine consumed 5,000 hours in its first year, 6,000 hours in second year, 7,000
hours in third year, and 8,000 hours in fourth year.
(viii) The machine produced 2,500 units in 2019, 3,000 units in 2020, 3,500 units in 2021, and
5,000 units in 2022.
(ix) The machine diminishes its value at the rate of 20% each year.

Required:

(a) Prepare the statement of Cost of Machine.

(b) Prepare necessary general entries.
(c) Calculate depreciation expense from each method for 4 years.
(d) Set-up Accumulated depreciation account of diminishing balance method.
(e) Prepare closing entries of Straight-line method.

Q.4: Nizam and Co. Ltd. Had ordinary share par value of Rs. 8, and Rs. 98 for bonds:

(i) Issued 10,000 ordinary shares at Rs. 10 against 12,000 ordinary shares application and
refund the excess amount.
(ii) Purchased a machinery of Rs. 100,000 and issued ordinary shares at Rs. 12.5 against it.
(iii) Issued 10,000 ordinary shares at Rs. 9 (8,000 to general public and 2,000 to the
underwriter).
(iv) Issued 10,000 5% bonds at Rs. 100, redeemable after 5 years Rs. 103.
(v) Issued ordinary shares in full settlement of bonds of Rs. 140,000.

Required:

(a) Record the above transactions.

OR
Q.5: A summary of receipts, expenditure account of UBL Sports Club for one year is given below:

Receipts Payments

Opening balance 8,000 Salary 8,000

Subscriptions 45,000 Electric charges 2,000
Donations 20,000 Sports expenditure 2,000
Interest 1,000 Sports goods purchased 15,000
Charity show receipts 5,000 Book purchased 10,000
Other expenses 4,000
Charity show expenses 8,000
Investment 10,000
Office Equipment 20,000

Additional Data:

(i) Subscription included Rs. 2,000 for 2022 and Rs. 1,000 for 2024.
(ii) Accrued subscription Rs. 3,000 for the year 2023.
(iii) Accrued interest Rs. 1,000.
(iv) Outstanding salaries Rs. 2,000.

Required:

(i) Prepare income expenditure account for Dec 31, 2023.