ACCOUNTING

Timeallowed1hours
TotalMarks100

[N.B. The figures in the margin indicate full marks. Question must be answered in English. Examiner will
takeaccountofthequalityoflanguageandofthewayinwhichtheanswersarepresented.Different
parts,ifany,ofthesamequestionmustbeansweredinoneplaceinorderofsequence.]

1. Writeshortnotesonthefollowings:
i) Capitalincome,ii)Historicalcost,iii)Cashdiscount,iv)Offsetting.

Marks
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2. Assets=Capital+Liabilities.Explain.

3. WhatareCapitalExpenditureandRevenueExpenditure?

ClassifythefollowingbetweenCapitalExpenditureandRevenueExpendituregivingbriefreasonsin
eachcase:

i)

ii)
iii)
iv)
v)

Stockvalued at Tk.10,000 and Machinery appearing inthe books at a value ofTk.4,000 which
were destroyed by fire and forwhich Tk.10,500 and Tk.4,250 respectivelywerereceivedfrom
theinsurancecompany.
Costofconversionofgasplanttooilfuelplantforthegenerationofelectricity.
Expensesincurredonresearchforaparticularproductwhichultimatelydidnotresultinsuccess.
Accrueddividendorinterestincludedinthecostpriceofaninvestment.
Lawyersfeesfordraftinganagreementofleaseforanimmovableproperty.

4. Differentiatebetweendebentureandstock.
JournalizethefollowingtransactionsinthebooksofTriplexLtd.

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Triplex Ltd. issued 10,000, 6% Debentures of Tk.100 each at a premium of 10% payable Tk.25 on
application,Tk.35onallotment(includingpremium)andthebalanceonfirstandfinalcall.

Applications were received for 15,000 debentures. All allotments were made proportionately,
oversubscriptionsbeingappliedtotheamountdueonallotment.Allsumsduewerereceivedbythe
companyinduecourse.

5. Mr.Shafayetrealizesthathisbusinesswillsufferanincreaseincustomersnotpayinginthefuture
andsohedecidestomakeanallowanceagainstthosewhoareatgreaterriskateachyearend.

Yearend31.12.07
Yearend31.12.08
Yearend31.12.09

Balanceonreceivablesa/c
Tk.
15,200
17,100
21,400

Balanceatriskofdefault
Tk.
304
342
214

Requirements:
Foreachofthethreeyears:
(a) Whataretheclosingtradereceivablesandallowancesforreceivablesbalance?
(b) Whatchargeismadetotheincomestatement?

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6. ThedebitbalanceinABCLtd.scashbookattheyearendisTk.45,220.Thefollowingitemsappearin
thebankreconciliationattheyearend.
Unpresentedcheque
Tk.2,880
Unclearedlodgments
Tk.9,187
AcustomerschequeforTk.2,210wasreturnedunpaidbythebankbeforetheyearend,butthishas
notbeenrecordedinthecashbook.

Whatwasthebalanceinhandshownbythebankstatement?

7.

Fromthefollowingtransactionspreparethejournalentriesandshowtheeffectoftransactions:
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a) StartedbusinesswithTk.25,000incash.
b) BoughtmachineryoncreditfromXYZCo.Tk.10,000.
c) BoughtofficefurnitureforcashTk.3,000.
d) Soldsomeoftheofficefurniture(notsuitableforthebusiness)oncredittoMomen&SonsforTk.500.
e) ReturnedpartofmachineryworthTk.2,000toXYZCo.duetosomedefects.
f) PaidtheamountduetoXYZCo.
g) CashwithdrawnbyproprietorforpersonaluseTk.200.
h) ReceivedtheamountduefromMomen&Sons.
[Pleaseturnover]

8. On1January2008XYZCo.buysanoncurrentassetforTk.12,00,000withanestimatedusefullifeof20
yearsandnoresidualvalue.Thecompanydepreciatesitsnoncurrentassetsonastraightlinebasis.Itsyear
endis31December.On31December2010theassetwillbeincludedinthebalancesheetasfollows:

Tk.
Noncurrentassetatcost

12,00,000
Accumulateddepreciation

(180,000)

10,20,000

On 1 January 2011 the remaining useful life is revised to 15 years from that date. Calculate the
revisedannualdepreciationcharge.

9. PQRcompanyhastwononcurrentassets.AssetMwasboughtforTk.2,40,000someyearagoandis
nowvaluedatTk.5,000,000.Thisassetisnotdepreciated.

Asset N was bought for Tk.7,00,000 five years ago and has been depreciated at 10% on cost per
annum.ItisnowvaluedatTk.12,00,000.Thereisnochangetoitsusefullife.

Showthejournalstorecordtheassetrevaluations,andshowthebalancesheetextractsforthenon
current assets and the revaluation reserve. Calculate the annual depreciation charge for asset N
followingtherevaluation.
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10. TerryCarpetssellsfloorcoveringtothepublic.Atitsyearend31December2009ithasrecordedas
salesTk.12,000 received fromcustomers as depositsoncarpets whicharenotduetobe invoiced
untilFebruary2010.InJanuary2010itrecordsaTk.500refundfromoneofitsmainsuppliersasa
resultofexceedingtheagreedlevelofcustomduring2009.

Preparejournals:
(a) Recordingthesetransactionsintheledgeraccountsfortheyearended31December2009.
(b) Recordingthesetransactionsintheledgeraccountsfortheyearended31December2010.

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11. L,NandMareinpartnershipandshareofprofitsintheratio3:2:1.Theyalsoagreethat:
(a) Allthreeshouldbereceivedinterestat12%oncapital.
(b) MshouldreceiveasalaryofTk.6,000perannum.
(c) Interestwillbechargedondrawingsattherateof3%(chargedonthetotaldrawingsintheyear).
(d) TheinterestrateontheTk.6,000loanfromLis5%.

Theircapitalandcurrentaccountsasat1January2010areasfollows:

Tk.
Tk.
Capitalaccountasat1.1.2010
L
20,000
N
8,000
M
6,000
34,000
Currentaccountasat1.1.2010
L
9,500
N
3,300
M
8,800
21,600
Drawingsmadeduringtheyearto31December2010were:
L
(6,000)
N
(4,000)
M
(7,000)
(17,000)

38,600
Thenetprofitfortheyearto31December2010wasTk.24,870beforedeductingloaninterest.

Prepare a profit and loss appropriation statement for the year to 31 December 2010, and the
partnerscapitalaccountsandcurrentaccountsatthatdate.

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12. HoraceLtd.hasthefollowingtransactionswithrespecttoitsproductT:
Openinginventory:Nil
Buys10unitsatTk.300perunit
Buys12unitsatTk.250perunit
Sells8unitsatTk.400perunit
Buys6unitsatTk.200perunit
Sells12unitsatTk.400perunit

UsingFIFO,calculatethefollowingonanitembyitembasis:
i) Closinginventory,ii)Sales,iii)Costofsales,iv)Grossprofit
TheEnd
,

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