Table of Contents
KHYBER PAKHTUNKHWA, PUBLIC SERVICE COMMISSION
COMPETITIVE EXAMINATION FOR THE POSTS OF PROVINCIAL MANAGEMENT SERVICES (BPS-17) 2013
ACCOUNTING & AUDITING, PAPER-I
TIME ALLOWED: 03 HOURS
MAX MARKS: 100
Note: Attempt any five questions. All questions carry equal marks.
Q.1- From the following balances extracted from the books of Star Company, prepare a Trading and Profit and Loss Account and Balance Sheet on 31st Dec, 2012.
| Particulars | Rs. | Particulars | Rs. |
|---|---|---|---|
| Stock on 1st January | 11,000 | Return outwards | 500 |
| Bills Receivable | 4,500 | Trade Expenses | 200 |
| Purchases | 39,000 | Office Fixtures | 1,000 |
| Wages | 2,800 | Cash in hand | 500 |
| Insurance | 700 | Cash at Bank | 4,750 |
| Sundry Debtors | 30,000 | Rent and Taxes | 1,100 |
| Carriage inwards | 800 | Carriage outwards | 1,450 |
| Interest on capital | 700 | sales | 60,000 |
| Commission (Dr) | 800 | Bills payable | 3,000 |
| Returns inwards | 1,300 | Creditors | 19,650 |
| Stationery | 450 | Capital | 17,900 |
Note: The stock on 31st December 2012 was valued at Rs. 25,000/=
Q.2- From the following transactions write up a two colum Cash Book and part into Ledger.
| Date | Transactions |
|---|---|
| January 1, 2013 | cash in hand Rs.2,000/= |
| January 7, 2013 | Received from Riaz & Co. Rs.200. Discount allowed Rs:10 |
| January 12, 2013 | Cash Sales Rs: 1,000 |
| January 15, 2013 | Paid Zahoor Sons Rs:500, Discount received Rs.15 |
| January 20, 2013 | Purchased goods for cash Rs:500. Discount Rs:15 |
| January 25, 2013 | Received from Salman Rs:500. Discount Rs:15 |
| January 27, 2013 | Paid Hasan & Sons Rs:300 |
| January 28, 2013 | Bought Furniture for cash Rs:100 |
| January 30, 2013 | Paid Rent Rs:100 |
Q.3- The Sundry Debtors and Sundry Creditors on 31st December, 2012 are Rs:4,000 and Rs.2,500 respectively. At the end of year it was devided to create a Bad Debts Reserve at 3% and Discount Reserve at 2 1/2% on Sundry Debtors and make discounts Reserve at 2% on Sundry creditor.
Required: Prepare the Journal and Profit and Loss and Balance Sheet entries.
Q.4- The following errors were defected in books at the close of a period:
- Paid wages for the construction of office debited to wages account Rs:1500
- Paid cartage for the newly purchased furniture Rs:10, posted to cartage account.
- Paid Rs:200 for the purchase of a table posted to purchases account.
- Paid Rs:150 for the installation of machinery debited to wages account.
- Purchased machinery for Rs:10,000 was passed through the invoice book.
- Sold old Furniture for Rs:250 passed through the day book.
Required: Prepare the journal entrees necessary to correct the above errors.
Q.5- From the following particulars make out an Account Current to be rendered by the standard Electric Company to Mr. Saeed Ahmed as on 30th September, 2012.
Required: Compute the interest at 5% per annum.
| Date | Particulars | Amount (Rs.) |
|---|---|---|
| July 1st, 2012 | Balance due by Saeed Ahmed to standard Electric Company | 500 |
| July 13, 2012 | Cash received from Saeed Ahmed | 250 |
| July 23, 2012 | Solds goods to Saeed Ahmed | 325 |
| July 31, 2012 | Received Saeed Ahmed’s Acceptance at 3m/d | 200 |
| August 11, 2012 | Cash received from Saeed Ahmed | 75 |
| August 14, 2012 | Goods Sold to Saeed Ahmed | 190 |
| September 20, 2012 | Goods Sold to Saeed Ahmed | 120 |
| September 25, 2012 | Goods Bought of Saeed Ahmed | 200 |
| September 28, 2012 | Received Cash from Saeed Ahmed | 150 |
Q.6- Enter the following transactions of a merchant in his journal and give the bank account.
| Date | Transactions |
|---|---|
| March 1st, 2012 | Paid in to Bank on the current account Rs:6,000 and Fixed deposit account for one year Rs:10,000 |
| March 2, 2012 | Purchased Goods from A Rs:2,000 |
| March 3, 2012 | Paid A by cheque Rs:2,000 |
| March 4, 2012 | Sold Goods fro cash Rs:500 |
| March 8, 2012 | Received a cheque from Zahid Rs:200 and paid in to Bank. |
| March 9, 2012 | Paid Wages by cheque Rs:200 |
| March 12, 2012 | Received a cheque from Rahim Rs:100 |
| March 13, 2012 | Paid Rahim’s in to bank |
| March 14, 2012 | Gave a cheque to c for Rs:100 |
| March 15, 2012 | Rahim’s cheque returned dishonoured. |
| March 20, 2012 | Received an outstation cheque for Rs:1,000 from D and paid into the bank. |
| March 22, 2012 | D’s cheque collected and exchange there on being Rs:3 |
| March 23, 2012 | Received cash from Rahim Rs:100 and paid into the bank. |
| March 24, 2012 | Drew from Bank for office use Rs:150 |
| March 27, 2012 | Purchased furniture from Z for Rs:1,000 and paid him by means of a bank draft purchased from the bank for Rs:1005 |
| March 31, 2012 | Paid Salaries by cheque Rs:200 |
| March 31, 2012 | Received a postal order for Rs:500 from K and paid the same into bank. |
Q.7- A machine was purchased by Haroon Ltd on 2 February 2012 having list price of Rs:20,000, 20% trade discount being allowed by the seller. The machine was acquired and the installation expenses amounted to Rs:4,000 for immediate over hauling and replacement of parts expenditures were incurred in the amount of Rs:8,000. The machine started production from 1st march, 2013. The life of the machine was estimated to be 10 years having scrap value of Rs:6,000. Haroon Ltd close their books of accounts on 30th June each year. As a policy they charge depreciation from the date of production.
Required: Compute the amount using the straight line Method and follow Allowance Method for recording it.
- Give dated entries in General – Journal (with explanation for the acquisition of the machine).
- Give the necessary adjusting and closing entries in general-journal relating to depreciation on June 30, 2012.
- Prepare partial Balance Sheet of Haroon Ltd as of June 30, 2012
Q.8- Arif and Wasif are partners and have credit of Rs:20,000 and Rs:30,000 respectively. The partners agree to admit Kazi as a Partner. Kazi pays Rs:15,000 for one half of Arif’s interest in the capital and profits of the business:
- Is the existing partnership terminated?
- Should the assets be revalued prior to the admittance of Kazi? Explain
- To whom does Kazi pay the cash?
- What journal entry is necessary to record the admittance of the incoming partner?
- How should profits and losses be divided after the admittance of Kazi?