KPK PMS Accountancy And Auditing Paper I – 2008

Note: Read the following instructions carefully.

  1. Attempt any Five questions
  2. All questions carry equal marks
  3. Extra attempt of any question or any part will not be considered
  4. Candidates must draw two straight lines at the end to separate each question in answer book.

Question 1: The following is the trail balance of ABC manufacturing limited as at 31st March 2008.

TABLE

 

You are also to make provision in respect of following:

  1. Stock on 31st March 2008 was Rs.8,20,000
  2. Depreciate Machinery @ 15% per annum
  3. Provide 5% discount on debtors
  4. Allow 2.5% discount on creditors

Provide Managing Director’s commission @ 5% on the net profit before deducing his commission.

Required:

You are required to prepare Trading Account and Profit & Loss Account for the year ended 31st March 2008 and the Balance Sheet at that date.

Question 2: A purchased goods from B for Rs.10,000 on 1st June 1990 and accepted a bill of exchange for 2 months drawn on him by B on the same date for the amount. B got the bill discounted at his bank at 18%. At the maturity the bill was dishonoured. The noting charges amounting Rs. 10. B agreed to receive from A the sum of Rs.2,370 in cash and a promissory note for Rs. 8,000 (in full settlement)  at 3 months. On the due date, A met the note.

Required:

Ledger accounts in the books of both A and B.

Question 3: On 1st September 2007, Nawaz of Karachi dispatches on consignment to Khalid of Mardan 50 cases of woollen goods invoice proforma at Rs.1,500 per case to be sold by the later on consignor’s account.  A commission of 3% is payable to Khalid upon sales and all charges are borne by Nawaz.

Nawaz pays freight and insurance at Karachi amounting to Rs.5,100 and draws upon Khalid a bill for Rs.45,000 against dispatch.

Khalid sells for cash 10 cases at Rs.1,800 on 1st October 2007; 25 cases at Rs.2,025 on 10th October and the balance on 30th October, 2007 at Rs.1,950 a case. He forwards an account Sale to Nawaz on 2nd November 2007 deducting the commission due and charges incurred, such charges amounting to Rs.4,050 for unloading , cartage, storage etc. and remits a draft for the balance.

Required:

Prepare Account Sales and show how the transaction would appear in the consignor’s books.

Question 4: The following is the Receipts and Payments Account of the Peshawar Sports Club for the year ending 31st 2000.

TABLE

 

Locker rents, Rs.60 refer to 1998-99 and Rs.90 is still owing: Rent, Rs.1,300, pertained to 1998-99, still owing Rs.364; Subscription unpaid for 1999-2000, Rs.468; Special subscriptions Governor’s outstanding Rs.550.

Required:

From the above information you are required to make out an income and Expense Account for the club for the year ending 31st 2000.

Question 5: On 1st April 2005, a firm purchases a machinery worth Rs.1,50,000; On 1st October 2007, it buys additional Machinery worth Rs.30,000 and spends Rs.3,000 on its erection. The accounts are closed each year on 31st March. The firm uses an annual depreciation rate of 10%.

Required:

Show the machinery account for 5 years (starting from 1st April, 2005) under:

  • Straight Line Method and
  • Written Down Value Method

Question 6: The following Trial Balance was extracted from books of the Pakistan Life Insurance Co. Ltd, as on 31st March 2008.

 

Adjustments:

  • Claims admitted but not paid 9,300
  • Management Expenses Due 200
  • Interest Accrued 19,300
  • Premium outstanding         12,000

Required:

Prepare Company’s Revenue Account for the year ended 31st March 2008.

Question 7: Black and White are partners and on 31st March 2007, the capital of the partnership was Rs.2,10,000 of which Rs.1,40,000 stood to the credit of Black and Rs.70,000 to the credit of White. Profits and losses were to be divided as to 2/3 and 1/3 respectively, drawing on accounts of profits being made in the same proportion.

On 31st March 2008, the following information was given to you as to the position of affairs.

  • The total combined capital was Rs.2,91,000
  • White had drawn Rs.3,000 in excess of the arranged proportion of drawings.
  • White had to be credited with Rs.15,000 as special salary earned during 2007-8, as agreed by the partners.
  •   The partners were to be credited with 10% interest on capital

Required:

Prepare a statement showing how the capital of Rs.2,91,000 is to be divided between Black and White.

 

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