MOCK TEST

ACCOUNTING
INCOMPLETE RECORDS
ATTEMPT ALL QUESTIONS
Time allowed: 2 hours Maximum Marks: 50
Question. 1 (10 Marks)
The following information relates to the business of Mr. Shiv Kumar, who requests you to prepare a Trading
and Profit & Loss Account for the year ended 31st March, 2020 and a Balance Sheet as on that date:
(a)
Balance as on 31st Balance as on 31st
March, 2019 March, 2020
₹ ₹
Building 3,20,000 3,60,000
Furniture 60,000 68,000
Motorcar 80,000 80,000
Inventory’s ? 40,000
Bills payable 28,000 16,000
Cash and bank balances 1,80,000 1,04,000
Sundry debtors 1,60,000 ?
Bills receivable 32,000 28,000
Sundry creditors 1,20,000 ?
(b) Cash transactions during the year included the following besides certain other items:
₹ ₹
Sale of old papers and miscellaneous income 20,000 Cash purchases 48,000
Payment to creditors 1,84,000
Cash sales 80,000 Miscellaneous Trade 80,000
expenses (Including
salaries etc.)
Collection from debtors 2,00,000
(c) Other information:
 Bills receivable drawn during the year amount to ₹ 20,000 and Bills payable accepted ₹ 16,000.
 Some items of old furniture, whose written down value on 31st March, 2019 was ₹ 20,000 was sold
on 30th September, 2019 for ₹ 8,000. Depreciation is to be provided on Building and Furniture @
10% p.a. and on Motorcar @ 20% p.a. Depreciation on sale of furniture to be provided for 6 months
and for additions to Building for whole year.
 Of the Debtors, a sum of ₹ 8,000 should be written off as Bad Debt and a reserve for doubtful debts
is to be provided @ 2%.
 Mr. Shiv Kumar has been maintaining a steady gross profit rate of 30% on turnover.
 Outstanding salary on 31st March, 2019 was ₹ 8,000 and on 31st March, 2020 was ₹ 10,000. On 31st
March, 2019, Profit and Loss Account had a credit balance of ₹ 40,000.
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 20% of total sales and total purchases are to be treated as for cash.
 Additions in Furniture Account took place in the beginning of the year and there was no opening
provision for doubtful debts.

Question. 2 (10 Marks)

Mr. Anup runs a wholesale business where in all purchases and sales are made on credit. He furnishes the
following closing balances:
31-12-2018 31-12-2019
Sundry debtors 70,000 92,000
Bills receivable 15,000 6,000
Bills payable 12,000 14,000
Sundry creditors 40,000 56,000
Inventory 1,10,000 1,90,000
Bank 90,000 87,000
Cash 5,200 5,300

Summary of cash transactions during the year 2019:

(i) Deposited to bank after payment of shop expenses @ ₹ 600 p.m., salary @ ₹ 9,200 p.m. and personal
expenses @ ₹ 1,400 p.m. ₹ 7,62,750.
(ii) Withdrawals ₹ 1,21,000.
(iii) Cash payment to suppliers ₹ 77,200 for supplies and ₹ 25,000 for furniture.
(iv) Cheques collected from customers but dishonored ₹ 5,700.
(v) Bills accepted by customers ₹ 40,000.
(vi) Bills endorsed ₹ 10,000.
(vii) Bills discounted ₹20,000 discount ₹ 750.
(viii) Bills matured and duly collected ₹ 16,000.
(ix) Bills accepted ₹ 24,000.
(x) Paid suppliers by cheque ₹ 3,20,000.
(xi) Received ₹ 20,000 on maturity of one LIC policy of the proprietor by cheque.
(xii) Rent received ₹ 14,000 by cheque for the premises owned by proprietor.
(xiii) A building was purchased on 30-11-2019 for opening a branch for ₹ 3,50,000 and some expenses
were incurred on this building, details of which are not maintained.
(xiv) Electricity and telephone bills paid by cash ₹ 18,700, due ₹ 2,200.

Other transactions:
(i) Claim against the firm for damage ₹ 1,55,000 is under legal dispute. Legal expenses ₹ 17,000. The
firm anticipates defeat in the suit.

(ii) Goods returned to suppliers ₹ 4,200.

(iii) Goods returned by customers ₹ 1,200.

(iv) Discount offered by suppliers ₹ 2,700.

(v) Discount offered to the customers ₹ 2,400.

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(vi) The business is carried on at the rented premises for an annual rent of ₹ 20,000 which is outstanding
at the year end.
Prepare Trading and Profit & Loss Account of Mr. Anup for the year ended 31-12-2019 and Balance Sheet
as on that date.

Question. 3 (10 Marks)

Archana Enterprises maintain their books of accounts under single entry system. The Balance Sheet as on
31st March, 2019 was as follows:

Liabilities Amount Assets Amount

(₹) (₹)

Capital A/c 6,75,000 Furniture & fixtures 1,50,000

Trade creditors 7,57,500 Stock 9,15,000

Outstanding exp. 67,500 Trade debtors 3,12,000

Prepaid insurance 3,000

Cash in hand & at bank 1,20,000

15,00,000 15,00,000

The following was the summary of cash and bank book for the year ended 31st March, 2020:

Receipts Amount Payments Amount

(₹) (₹)

Cash in hand & at Bank on 1st April, 2019 1,20,000 Payment to trade creditors 1,24,83,000

Cash sales 1,10,70,000 Sundry expenses paid 9,31,050

Receipts from trade debtors 27,75,000 Drawings 3,60,000

Cash in hand & at Bank on

31st March, 2020
1,90,950

1,39,65,000 1,39,65,000

Additional information:
(i) Discount allowed to trade debtors and received from trade creditors amounted to ₹54,000 and ₹42,500
respectively. (for the year ended 31st March, 2020)
(ii) Annual fire insurance premium of ₹ 9,000 was paid every year on 1st August for the renewal of the
Policy.
(iii) Furniture & fixtures were subject to depreciation @ 15% p.a. on diminishing balance method.
(iv) The following are the balances as on 31st March, 2020:
Stock ₹ 9,75,000
Trade debtors ₹ 3,43,000
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Outstanding expenses ₹ 55,200

(v) Gross profit ratio 10% on sales is maintained throughout the year.

You are required to prepare Trading and Profit & Loss account for the year ended 31st March, 2020, and
Balance Sheet as on that date.

Question. 4 (10 Marks)

The following balances appeared in the books of M/s Sunshine Traders:
As on As on
31-03-2019 31-03-2020
(₹) (₹)
Land and Building 2,50,000 2,50,000
Plant and Machinery 1,10,000 1,65,000
Office Equipment 52,500 42,500
Sundry Debtors 77,750 1,10,250
Creditors for Purchases 47,500 ?
Provision for office expenses 10,000 7,500
Stock ? 32,500
Long Term loan from ABC Bank @ 10% per annum 62,500 50,000
Bank 12,500 ?
Capital 4,65,250 ?

Other information was as follows:

In (₹)
- Collection from Sundry Debtors 4,62,500
- Payments to Creditors for Purchases 2,62,500
- Payment of office Expenses 21,000
- Salary paid 16,000
- Selling Expenses paid 7,500
- Total sales 6,25,000
Credit sales (80% of Total sales)
- Credit Purchases 2,70,000
Cash Purchases (40% of Total Purchases)
- Gross Profit Margin was 25% on cost
- Discount Allowed 2,750
- Discount Received 2,250
- Bad Debts 2,250

- Depreciation to be provided as follows:

Land and Building - 5% per annum
Plant and Machinery - 10% per annum
Office Equipment - 15% Per annum
- On 01.10.2019 the firm sold machine having book value, ₹ 20,000 (as on 31.03.2019) at a loss of
₹7,500. New machine was purchased on 01.01.2020.
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- Office equipment was sold at its book value on 01.04.2019.

- Loan was partly repaid on 31.03.2020 together with interest for the year.
You are required to prepare:
(i) Trading and Profit & Loss account for the year ended 31st March, 2020.
(ii) Balance Sheet as on 31st March 2020.

Question. 5 (10 Marks)

Assets and Liabilities of Mr. X as on 31-03-2019 and 31-03-2020 are as follows:
31-03-2019 31-03-2020
₹ ₹
Assets
Building 1,00,000 ?
Furniture 50,000 ?
Inventory 1,20,000 2,70,000
Sundry debtors 40,000 90,000
Cash at bank 70,000 85,000
Cash in hand 1,200 3,200
Liabilities
Loans 1,00,000 80,000
Sundry creditors 40,000 70,000
Decided to depreciate building by 2.5% and furniture by 10%. One Life Insurance Policy of the Proprietor
was matured during the period and the amount ₹ 40,000 is retained in the business. Proprietor took @ ₹2,000
p.m. for meeting family expenses. Prepare Statement of Affairs as on 31.03.2020. Also compute net profit
for the year 2019-20