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Page 1
1
Test Series: April, 2019
FOUNDATION COURSE
MOCK TEST PAPER 2
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING
ANSWERS
1. (a) (i) False - Debenture interest is payable before the payment of any dividend on shares.
(ii) True: Amount paid to management company for consultancy to reduce the working expenses
is capital expenditure as this expenditure will generate long-term benefit to the entity.
(iii) False: The additional commission to the consignee who agrees to bear the loss on account
of bad debts is called del credere commission.
(iv) False: According to the Indian Partnership Act, in the absence of any agreement to the
contrary, profits and losses of the firm are shared equally among partners.
(v) False: Goods taken by the proprietor for personal use should be credited to Purchases
Account as less goods are left in the business for sale.
(vi) False: Quick ratio is known as Acid Test Ratio and not Cash Ratio.
(b) Objective and Advantages of Accounting Standards: An Accounting Standard is a selected set
of accounting policies or broad guidelines regarding the principles and methods to be chosen out
of several alternatives. The Accounting Standards Board formulates Accounting Standards to be
established by the Council of the Institute of Chartered Accountants of India.
The main objective of Accounting Standards is to establish standards which have to be complied
with to ensure that financial statements are prepared in accordance with generally accepted
accounting standards. Accounting Standards seek to suggest rules and criteria of accounting
measurements. These standards harmonize the diverse accounting policies and practices at
present in use in India.
The main advantage of setting accounting standards is that the adoption and application of
Accounting Standards ensure uniformity, comparability and qualitative improvement in the
preparation and presentation of financial statements.
The other advantages are as follows:
(i) Reduction in variations.
(ii) Disclosure beyond that required by law.
(iii) Facilities comparison.
(c) Statement of Valuation of Stock on 31st March, 2018
Rs. Rs.
Value of stock as on 15th April, 2018 50,000
Add: Cost of sales during the period from 31st March, 2018 to 15th April,
2018
Sales (Rs. 41,000 – Rs. 1,000)
40,000
Less: Gross Profit (20% of Rs. 40,000) 8,000 32,000
Cost of goods sent on approval basis
(80% of Rs. 6,000)
4,800
86,800
© The Institute of Chartered Accountants of India
Page 2
1
Test Series: April, 2019
FOUNDATION COURSE
MOCK TEST PAPER 2
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING
ANSWERS
1. (a) (i) False - Debenture interest is payable before the payment of any dividend on shares.
(ii) True: Amount paid to management company for consultancy to reduce the working expenses
is capital expenditure as this expenditure will generate long-term benefit to the entity.
(iii) False: The additional commission to the consignee who agrees to bear the loss on account
of bad debts is called del credere commission.
(iv) False: According to the Indian Partnership Act, in the absence of any agreement to the
contrary, profits and losses of the firm are shared equally among partners.
(v) False: Goods taken by the proprietor for personal use should be credited to Purchases
Account as less goods are left in the business for sale.
(vi) False: Quick ratio is known as Acid Test Ratio and not Cash Ratio.
(b) Objective and Advantages of Accounting Standards: An Accounting Standard is a selected set
of accounting policies or broad guidelines regarding the principles and methods to be chosen out
of several alternatives. The Accounting Standards Board formulates Accounting Standards to be
established by the Council of the Institute of Chartered Accountants of India.
The main objective of Accounting Standards is to establish standards which have to be complied
with to ensure that financial statements are prepared in accordance with generally accepted
accounting standards. Accounting Standards seek to suggest rules and criteria of accounting
measurements. These standards harmonize the diverse accounting policies and practices at
present in use in India.
The main advantage of setting accounting standards is that the adoption and application of
Accounting Standards ensure uniformity, comparability and qualitative improvement in the
preparation and presentation of financial statements.
The other advantages are as follows:
(i) Reduction in variations.
(ii) Disclosure beyond that required by law.
(iii) Facilities comparison.
(c) Statement of Valuation of Stock on 31st March, 2018
Rs. Rs.
Value of stock as on 15th April, 2018 50,000
Add: Cost of sales during the period from 31st March, 2018 to 15th April,
2018
Sales (Rs. 41,000 – Rs. 1,000)
40,000
Less: Gross Profit (20% of Rs. 40,000) 8,000 32,000
Cost of goods sent on approval basis
(80% of Rs. 6,000)
4,800
86,800
© The Institute of Chartered Accountants of India
2
Less: Purchases during the period from 31st March, 2018 to 15th April,
2018
5,034
81,766
2. (a) PETTY CASH BOOK
Receipts
Rs.
Date
2017
V.
No.
Particulars Total
Rs.
Con-
veyance
Rs.
Cartage
Rs.
Statio-
nery
Rs.
Postage &
Telegrams
Rs.
Wages
Rs.
Sundries
Rs.
20,000 April1 To Cash
2 1 By Conveyance 500 500
3 2 By Cartage 2,500 2,500
4 3 By Postage and
Telegrams
500 500
5 4 By Wages 600 600
5 5 By Stationery 400 400
6 6 By Repairs to
machine
1,500 1,500
6 7 By Conveyance 100 100
7 8 By Cartage 400 400
7 9 By Postage and
Telegrams
700 700
8 10 By Cartage 3,000 3,000
9 11 By Stationery 2,000 2,000
10 12 By Sundry
Expenses
5,000 5,000
17,200 600 5,900 2,400 1,200 600 6,500
By Balance c/d 2,800
20,000 20,000
2800 To Balance b/d
17,200 11 To Cash
(b)
Balance as per Cash Book
(49,350)
Add : Cheques issued but not presented for payment
3,700
Crossed Cheque issued to Abdul not presented for
payment
750
Amounts collected by Bank on our behalf but
not entered in the Cash Book
Dividend 150
Insurance claim 800
950
(-) Bank Commission 15 935
Amount paid in A/c No. 2 credited by the
Bank wrongly to this A/c
500 5885
(43,465)
Less : Cheques deposited in the bank but no cleared
1550
(Rs. 1,300 + Rs. 250)
© The Institute of Chartered Accountants of India
Page 3
1
Test Series: April, 2019
FOUNDATION COURSE
MOCK TEST PAPER 2
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING
ANSWERS
1. (a) (i) False - Debenture interest is payable before the payment of any dividend on shares.
(ii) True: Amount paid to management company for consultancy to reduce the working expenses
is capital expenditure as this expenditure will generate long-term benefit to the entity.
(iii) False: The additional commission to the consignee who agrees to bear the loss on account
of bad debts is called del credere commission.
(iv) False: According to the Indian Partnership Act, in the absence of any agreement to the
contrary, profits and losses of the firm are shared equally among partners.
(v) False: Goods taken by the proprietor for personal use should be credited to Purchases
Account as less goods are left in the business for sale.
(vi) False: Quick ratio is known as Acid Test Ratio and not Cash Ratio.
(b) Objective and Advantages of Accounting Standards: An Accounting Standard is a selected set
of accounting policies or broad guidelines regarding the principles and methods to be chosen out
of several alternatives. The Accounting Standards Board formulates Accounting Standards to be
established by the Council of the Institute of Chartered Accountants of India.
The main objective of Accounting Standards is to establish standards which have to be complied
with to ensure that financial statements are prepared in accordance with generally accepted
accounting standards. Accounting Standards seek to suggest rules and criteria of accounting
measurements. These standards harmonize the diverse accounting policies and practices at
present in use in India.
The main advantage of setting accounting standards is that the adoption and application of
Accounting Standards ensure uniformity, comparability and qualitative improvement in the
preparation and presentation of financial statements.
The other advantages are as follows:
(i) Reduction in variations.
(ii) Disclosure beyond that required by law.
(iii) Facilities comparison.
(c) Statement of Valuation of Stock on 31st March, 2018
Rs. Rs.
Value of stock as on 15th April, 2018 50,000
Add: Cost of sales during the period from 31st March, 2018 to 15th April,
2018
Sales (Rs. 41,000 – Rs. 1,000)
40,000
Less: Gross Profit (20% of Rs. 40,000) 8,000 32,000
Cost of goods sent on approval basis
(80% of Rs. 6,000)
4,800
86,800
© The Institute of Chartered Accountants of India
2
Less: Purchases during the period from 31st March, 2018 to 15th April,
2018
5,034
81,766
2. (a) PETTY CASH BOOK
Receipts
Rs.
Date
2017
V.
No.
Particulars Total
Rs.
Con-
veyance
Rs.
Cartage
Rs.
Statio-
nery
Rs.
Postage &
Telegrams
Rs.
Wages
Rs.
Sundries
Rs.
20,000 April1 To Cash
2 1 By Conveyance 500 500
3 2 By Cartage 2,500 2,500
4 3 By Postage and
Telegrams
500 500
5 4 By Wages 600 600
5 5 By Stationery 400 400
6 6 By Repairs to
machine
1,500 1,500
6 7 By Conveyance 100 100
7 8 By Cartage 400 400
7 9 By Postage and
Telegrams
700 700
8 10 By Cartage 3,000 3,000
9 11 By Stationery 2,000 2,000
10 12 By Sundry
Expenses
5,000 5,000
17,200 600 5,900 2,400 1,200 600 6,500
By Balance c/d 2,800
20,000 20,000
2800 To Balance b/d
17,200 11 To Cash
(b)
Balance as per Cash Book
(49,350)
Add : Cheques issued but not presented for payment
3,700
Crossed Cheque issued to Abdul not presented for
payment
750
Amounts collected by Bank on our behalf but
not entered in the Cash Book
Dividend 150
Insurance claim 800
950
(-) Bank Commission 15 935
Amount paid in A/c No. 2 credited by the
Bank wrongly to this A/c
500 5885
(43,465)
Less : Cheques deposited in the bank but no cleared
1550
(Rs. 1,300 + Rs. 250)
© The Institute of Chartered Accountants of India
3
Payments made by Bank on our behalf but not
entered in the Cash Book
Interest 320
Premium 160
Second call 600 1,080
Cheques issued against A/c No. 2 but wrongly
debited by the Bank to this A/c
300 (2,930)
Overdraft as per Pass Book
46,395
3. (a) Books of Manoj
Consignment to Jaipur Account
Particulars Rs. Particulars Rs.
To Goods sent on
Consignment A/c
1,87,500 By Goods sent on
Consignment A/c (loading)
37,500
To Cash A/c 15,000 By Abnormal Loss 16,500
To Kiran(Expenses) 12,000 By Kiran(Sales) 1,50,000
To Kiran(Commission) 16,406 By Inventories on Consignment
A/c
30,375
To Inventories Reserve A/c 5,625 By General Profit & Loss A/c 2,156
2,36,531 2,36,531
Working Notes:
1. Calculation of value of goods sent on consignment:
Abnormal Loss at Invoice price = Rs. 18,750
Abnormal Loss as a percentage of total consignment = 10%.
Hence the value of goods sent on consignment = Rs. 18,750 X 100/ 10 = Rs. 1,87,500
Loading of goods sent on consignment = Rs. 1,87,500 X 25/125 = Rs. 37,500
2. Calculation of abnormal loss (10%):
Abnormal Loss at Invoice price = Rs. 18,750.
Abnormal Loss at cost = Rs. 18,750 X 100/125 = Rs. 15,000
Add: Proportionate expenses of Manoj (10 % of Rs. 15,000) = Rs. 1,500
Rs. 16,500
3. Calculation of closing Inventories (15%):
Manoj’s Basic Invoice price of consignment= Rs. 1,87,500
Manoj’s expenses on consignment = Rs. 15,000
Rs. 2,02,500
Value of closing Inventories = 15% of Rs. 2,02,500= Rs. 30,375
Loading in closing Inventories = Rs. 37,500 x 15/100= Rs. 5,625
Where Rs. 28,125 (15% of Rs. 1,87,500) is the basic invoice price of the goods sent on
consignment remaining unsold.
© The Institute of Chartered Accountants of India
Page 4
1
Test Series: April, 2019
FOUNDATION COURSE
MOCK TEST PAPER 2
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING
ANSWERS
1. (a) (i) False - Debenture interest is payable before the payment of any dividend on shares.
(ii) True: Amount paid to management company for consultancy to reduce the working expenses
is capital expenditure as this expenditure will generate long-term benefit to the entity.
(iii) False: The additional commission to the consignee who agrees to bear the loss on account
of bad debts is called del credere commission.
(iv) False: According to the Indian Partnership Act, in the absence of any agreement to the
contrary, profits and losses of the firm are shared equally among partners.
(v) False: Goods taken by the proprietor for personal use should be credited to Purchases
Account as less goods are left in the business for sale.
(vi) False: Quick ratio is known as Acid Test Ratio and not Cash Ratio.
(b) Objective and Advantages of Accounting Standards: An Accounting Standard is a selected set
of accounting policies or broad guidelines regarding the principles and methods to be chosen out
of several alternatives. The Accounting Standards Board formulates Accounting Standards to be
established by the Council of the Institute of Chartered Accountants of India.
The main objective of Accounting Standards is to establish standards which have to be complied
with to ensure that financial statements are prepared in accordance with generally accepted
accounting standards. Accounting Standards seek to suggest rules and criteria of accounting
measurements. These standards harmonize the diverse accounting policies and practices at
present in use in India.
The main advantage of setting accounting standards is that the adoption and application of
Accounting Standards ensure uniformity, comparability and qualitative improvement in the
preparation and presentation of financial statements.
The other advantages are as follows:
(i) Reduction in variations.
(ii) Disclosure beyond that required by law.
(iii) Facilities comparison.
(c) Statement of Valuation of Stock on 31st March, 2018
Rs. Rs.
Value of stock as on 15th April, 2018 50,000
Add: Cost of sales during the period from 31st March, 2018 to 15th April,
2018
Sales (Rs. 41,000 – Rs. 1,000)
40,000
Less: Gross Profit (20% of Rs. 40,000) 8,000 32,000
Cost of goods sent on approval basis
(80% of Rs. 6,000)
4,800
86,800
© The Institute of Chartered Accountants of India
2
Less: Purchases during the period from 31st March, 2018 to 15th April,
2018
5,034
81,766
2. (a) PETTY CASH BOOK
Receipts
Rs.
Date
2017
V.
No.
Particulars Total
Rs.
Con-
veyance
Rs.
Cartage
Rs.
Statio-
nery
Rs.
Postage &
Telegrams
Rs.
Wages
Rs.
Sundries
Rs.
20,000 April1 To Cash
2 1 By Conveyance 500 500
3 2 By Cartage 2,500 2,500
4 3 By Postage and
Telegrams
500 500
5 4 By Wages 600 600
5 5 By Stationery 400 400
6 6 By Repairs to
machine
1,500 1,500
6 7 By Conveyance 100 100
7 8 By Cartage 400 400
7 9 By Postage and
Telegrams
700 700
8 10 By Cartage 3,000 3,000
9 11 By Stationery 2,000 2,000
10 12 By Sundry
Expenses
5,000 5,000
17,200 600 5,900 2,400 1,200 600 6,500
By Balance c/d 2,800
20,000 20,000
2800 To Balance b/d
17,200 11 To Cash
(b)
Balance as per Cash Book
(49,350)
Add : Cheques issued but not presented for payment
3,700
Crossed Cheque issued to Abdul not presented for
payment
750
Amounts collected by Bank on our behalf but
not entered in the Cash Book
Dividend 150
Insurance claim 800
950
(-) Bank Commission 15 935
Amount paid in A/c No. 2 credited by the
Bank wrongly to this A/c
500 5885
(43,465)
Less : Cheques deposited in the bank but no cleared
1550
(Rs. 1,300 + Rs. 250)
© The Institute of Chartered Accountants of India
3
Payments made by Bank on our behalf but not
entered in the Cash Book
Interest 320
Premium 160
Second call 600 1,080
Cheques issued against A/c No. 2 but wrongly
debited by the Bank to this A/c
300 (2,930)
Overdraft as per Pass Book
46,395
3. (a) Books of Manoj
Consignment to Jaipur Account
Particulars Rs. Particulars Rs.
To Goods sent on
Consignment A/c
1,87,500 By Goods sent on
Consignment A/c (loading)
37,500
To Cash A/c 15,000 By Abnormal Loss 16,500
To Kiran(Expenses) 12,000 By Kiran(Sales) 1,50,000
To Kiran(Commission) 16,406 By Inventories on Consignment
A/c
30,375
To Inventories Reserve A/c 5,625 By General Profit & Loss A/c 2,156
2,36,531 2,36,531
Working Notes:
1. Calculation of value of goods sent on consignment:
Abnormal Loss at Invoice price = Rs. 18,750
Abnormal Loss as a percentage of total consignment = 10%.
Hence the value of goods sent on consignment = Rs. 18,750 X 100/ 10 = Rs. 1,87,500
Loading of goods sent on consignment = Rs. 1,87,500 X 25/125 = Rs. 37,500
2. Calculation of abnormal loss (10%):
Abnormal Loss at Invoice price = Rs. 18,750.
Abnormal Loss at cost = Rs. 18,750 X 100/125 = Rs. 15,000
Add: Proportionate expenses of Manoj (10 % of Rs. 15,000) = Rs. 1,500
Rs. 16,500
3. Calculation of closing Inventories (15%):
Manoj’s Basic Invoice price of consignment= Rs. 1,87,500
Manoj’s expenses on consignment = Rs. 15,000
Rs. 2,02,500
Value of closing Inventories = 15% of Rs. 2,02,500= Rs. 30,375
Loading in closing Inventories = Rs. 37,500 x 15/100= Rs. 5,625
Where Rs. 28,125 (15% of Rs. 1,87,500) is the basic invoice price of the goods sent on
consignment remaining unsold.
© The Institute of Chartered Accountants of India
4
4. Calculation of commission:
Invoice price of the goods sold = 75% of Rs. 1,87,500 = Rs. 1,40,625
Excess of selling price over invoice price = Rs. 9,375 ( Rs. 1,50,000 - Rs. 1,40,625)
Total commission = 10% of Rs. 1,40,625 + 25% of Rs. 9,375
= Rs. 14,062.5 + Rs. 2,343.75
= Rs. 16,406
(b) A’s Books
Joint Venture with B A/c
2017 Particulars Amount
(Rs.)
2017 Particulars Amount
(Rs.)
July 1 To Bank - draft sent July 16 By Bank-sale proceeds 1,21,500
on A/c 3,75,000
July 15 To Bank - freight 3,000 July 31 By Bank-sale proceeds 3,36,000
Aug 25 To Profit and Loss A/c
share of profit 81,150 Aug 14 By Bank-sale proceeds 3,07,800
To Bank - draft sent
in settlement 3,06,150
7,65,300 7,65,300
Memorandum Joint Venture A/c
Particulars Amount
(Rs.)
Particulars Amount
(Rs.)
To Cost of 200 sets 6,00,000 By Sales proceeds (net)
To Freight 3,000 30 sets @ Rs. 4,050 1,21,500
To Profit : 80 sets @ Rs. 4,200 3,36,000
A 81,150 80 sets @ Rs. 3,847.5 3,07,800
B 81,150 1,62,300
7,65,300 7,65,300
4. Smith Library Society
Income and Expenditure Account
for the year ended 31
st
March, 2019
Dr. Cr.
Expenditure Rs. Rs. Income Rs.
To Electric charges
To Postage and stationary
7,200
5,000
By By Entrance fee (25% of
Rs. 30,000)
7,500
To Telephone charges
To Rent
Add: Outstanding
88,000
4,000
5,000
92,000
By By Membership subscription
Less: Received in advance
2,00,000
10,000
1,90,000
To Salaries
Add: Outstanding
To Depreciation (W.N.1)
66,000
3,000
69,000
By Sale proceeds of old papers
By Hire of lecture hall
1,500
20,000
© The Institute of Chartered Accountants of India
Page 5
1
Test Series: April, 2019
FOUNDATION COURSE
MOCK TEST PAPER 2
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING
ANSWERS
1. (a) (i) False - Debenture interest is payable before the payment of any dividend on shares.
(ii) True: Amount paid to management company for consultancy to reduce the working expenses
is capital expenditure as this expenditure will generate long-term benefit to the entity.
(iii) False: The additional commission to the consignee who agrees to bear the loss on account
of bad debts is called del credere commission.
(iv) False: According to the Indian Partnership Act, in the absence of any agreement to the
contrary, profits and losses of the firm are shared equally among partners.
(v) False: Goods taken by the proprietor for personal use should be credited to Purchases
Account as less goods are left in the business for sale.
(vi) False: Quick ratio is known as Acid Test Ratio and not Cash Ratio.
(b) Objective and Advantages of Accounting Standards: An Accounting Standard is a selected set
of accounting policies or broad guidelines regarding the principles and methods to be chosen out
of several alternatives. The Accounting Standards Board formulates Accounting Standards to be
established by the Council of the Institute of Chartered Accountants of India.
The main objective of Accounting Standards is to establish standards which have to be complied
with to ensure that financial statements are prepared in accordance with generally accepted
accounting standards. Accounting Standards seek to suggest rules and criteria of accounting
measurements. These standards harmonize the diverse accounting policies and practices at
present in use in India.
The main advantage of setting accounting standards is that the adoption and application of
Accounting Standards ensure uniformity, comparability and qualitative improvement in the
preparation and presentation of financial statements.
The other advantages are as follows:
(i) Reduction in variations.
(ii) Disclosure beyond that required by law.
(iii) Facilities comparison.
(c) Statement of Valuation of Stock on 31st March, 2018
Rs. Rs.
Value of stock as on 15th April, 2018 50,000
Add: Cost of sales during the period from 31st March, 2018 to 15th April,
2018
Sales (Rs. 41,000 – Rs. 1,000)
40,000
Less: Gross Profit (20% of Rs. 40,000) 8,000 32,000
Cost of goods sent on approval basis
(80% of Rs. 6,000)
4,800
86,800
© The Institute of Chartered Accountants of India
2
Less: Purchases during the period from 31st March, 2018 to 15th April,
2018
5,034
81,766
2. (a) PETTY CASH BOOK
Receipts
Rs.
Date
2017
V.
No.
Particulars Total
Rs.
Con-
veyance
Rs.
Cartage
Rs.
Statio-
nery
Rs.
Postage &
Telegrams
Rs.
Wages
Rs.
Sundries
Rs.
20,000 April1 To Cash
2 1 By Conveyance 500 500
3 2 By Cartage 2,500 2,500
4 3 By Postage and
Telegrams
500 500
5 4 By Wages 600 600
5 5 By Stationery 400 400
6 6 By Repairs to
machine
1,500 1,500
6 7 By Conveyance 100 100
7 8 By Cartage 400 400
7 9 By Postage and
Telegrams
700 700
8 10 By Cartage 3,000 3,000
9 11 By Stationery 2,000 2,000
10 12 By Sundry
Expenses
5,000 5,000
17,200 600 5,900 2,400 1,200 600 6,500
By Balance c/d 2,800
20,000 20,000
2800 To Balance b/d
17,200 11 To Cash
(b)
Balance as per Cash Book
(49,350)
Add : Cheques issued but not presented for payment
3,700
Crossed Cheque issued to Abdul not presented for
payment
750
Amounts collected by Bank on our behalf but
not entered in the Cash Book
Dividend 150
Insurance claim 800
950
(-) Bank Commission 15 935
Amount paid in A/c No. 2 credited by the
Bank wrongly to this A/c
500 5885
(43,465)
Less : Cheques deposited in the bank but no cleared
1550
(Rs. 1,300 + Rs. 250)
© The Institute of Chartered Accountants of India
3
Payments made by Bank on our behalf but not
entered in the Cash Book
Interest 320
Premium 160
Second call 600 1,080
Cheques issued against A/c No. 2 but wrongly
debited by the Bank to this A/c
300 (2,930)
Overdraft as per Pass Book
46,395
3. (a) Books of Manoj
Consignment to Jaipur Account
Particulars Rs. Particulars Rs.
To Goods sent on
Consignment A/c
1,87,500 By Goods sent on
Consignment A/c (loading)
37,500
To Cash A/c 15,000 By Abnormal Loss 16,500
To Kiran(Expenses) 12,000 By Kiran(Sales) 1,50,000
To Kiran(Commission) 16,406 By Inventories on Consignment
A/c
30,375
To Inventories Reserve A/c 5,625 By General Profit & Loss A/c 2,156
2,36,531 2,36,531
Working Notes:
1. Calculation of value of goods sent on consignment:
Abnormal Loss at Invoice price = Rs. 18,750
Abnormal Loss as a percentage of total consignment = 10%.
Hence the value of goods sent on consignment = Rs. 18,750 X 100/ 10 = Rs. 1,87,500
Loading of goods sent on consignment = Rs. 1,87,500 X 25/125 = Rs. 37,500
2. Calculation of abnormal loss (10%):
Abnormal Loss at Invoice price = Rs. 18,750.
Abnormal Loss at cost = Rs. 18,750 X 100/125 = Rs. 15,000
Add: Proportionate expenses of Manoj (10 % of Rs. 15,000) = Rs. 1,500
Rs. 16,500
3. Calculation of closing Inventories (15%):
Manoj’s Basic Invoice price of consignment= Rs. 1,87,500
Manoj’s expenses on consignment = Rs. 15,000
Rs. 2,02,500
Value of closing Inventories = 15% of Rs. 2,02,500= Rs. 30,375
Loading in closing Inventories = Rs. 37,500 x 15/100= Rs. 5,625
Where Rs. 28,125 (15% of Rs. 1,87,500) is the basic invoice price of the goods sent on
consignment remaining unsold.
© The Institute of Chartered Accountants of India
4
4. Calculation of commission:
Invoice price of the goods sold = 75% of Rs. 1,87,500 = Rs. 1,40,625
Excess of selling price over invoice price = Rs. 9,375 ( Rs. 1,50,000 - Rs. 1,40,625)
Total commission = 10% of Rs. 1,40,625 + 25% of Rs. 9,375
= Rs. 14,062.5 + Rs. 2,343.75
= Rs. 16,406
(b) A’s Books
Joint Venture with B A/c
2017 Particulars Amount
(Rs.)
2017 Particulars Amount
(Rs.)
July 1 To Bank - draft sent July 16 By Bank-sale proceeds 1,21,500
on A/c 3,75,000
July 15 To Bank - freight 3,000 July 31 By Bank-sale proceeds 3,36,000
Aug 25 To Profit and Loss A/c
share of profit 81,150 Aug 14 By Bank-sale proceeds 3,07,800
To Bank - draft sent
in settlement 3,06,150
7,65,300 7,65,300
Memorandum Joint Venture A/c
Particulars Amount
(Rs.)
Particulars Amount
(Rs.)
To Cost of 200 sets 6,00,000 By Sales proceeds (net)
To Freight 3,000 30 sets @ Rs. 4,050 1,21,500
To Profit : 80 sets @ Rs. 4,200 3,36,000
A 81,150 80 sets @ Rs. 3,847.5 3,07,800
B 81,150 1,62,300
7,65,300 7,65,300
4. Smith Library Society
Income and Expenditure Account
for the year ended 31
st
March, 2019
Dr. Cr.
Expenditure Rs. Rs. Income Rs.
To Electric charges
To Postage and stationary
7,200
5,000
By By Entrance fee (25% of
Rs. 30,000)
7,500
To Telephone charges
To Rent
Add: Outstanding
88,000
4,000
5,000
92,000
By By Membership subscription
Less: Received in advance
2,00,000
10,000
1,90,000
To Salaries
Add: Outstanding
To Depreciation (W.N.1)
66,000
3,000
69,000
By Sale proceeds of old papers
By Hire of lecture hall
1,500
20,000
© The Institute of Chartered Accountants of India
5
Electrical fittings 15,000 By By Interest on securities 8,000
Furniture 5,000 (W.N.2)
Books 46,000 66,000
Add: Receivable
By By Deficit- excess of
expenditure over income
500 8,500
16,700
2,44,200 2,44,200
Balance Sheet of Smith Library Society
as on 31
st
March, 2019
Liabilities Rs. Rs. Asset Rs. Rs.
Capital fund 7,93,000 Electrical fittings 1,50,000
Add: Entrance fees _22,500 Less: Depreciation (15,000) 1,35,000
8,15,500 Furniture 50,000
Less: Excess of expenditure
over income
(16,700)
7,98,800
Less: Depreciation
Books
(5,000)
4,60,000
45,000
Outstanding expenses:
Rent
4,000
Less Depreciation
Investment:
(46,000) 4,14,000
Salaries 3,000 7,000 Securities 1,90,000
Membership subscription in
advance
10,000
Accrued interest
Cash at bank
500 1,90,500
20,000
_______ Cash in hand 11,300
8,15,800 8,15,800
Working Notes:
1. Depreciation Rs.
Electrical fittings 10% of Rs. 1,50,000 15,000
Furniture 10% of Rs. 50,000 5,000
Books 10% of Rs. 4,60,000 46,000
2. Interest on Securities
Interest @ 5% p.a. on Rs. 1,50,000 for full year 7,500
Interest @ 5% p.a. on Rs. 40,000 for half year 1,000 8,500
Less: Received (8,000)
Receivable 500
5. (a) Revaluation Account
Rs.
Rs.
To Buildings A/c 10,000 By Investments A/c 3,000
To Plant and Machinery A/c 26,000 By Loss to Partners:
To Provision for Doubtful Debts A/c 27,800 P 30,400
Q 18,240
R 12,160 60,800
63,800
63,800
© The Institute of Chartered Accountants of India
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FAQs on Sample Paper Series- II, Solution - Mock Tests & Past Year Papers for CA Foundation
| 1. What is CA CPT? |  |
CA CPT, which stands for Chartered Accountancy Common Proficiency Test, is an entrance exam conducted by the Institute of Chartered Accountants of India (ICAI). It is the first level of examination for becoming a Chartered Accountant in India. The exam assesses a candidate's knowledge in four subjects: Accounting, Mercantile Laws, General Economics, and Quantitative Aptitude.
| 2. How can I apply for CA CPT? | |
To apply for CA CPT, you need to visit the official website of the Institute of Chartered Accountants of India (ICAI) and register for the exam. The registration process typically involves filling out an online application form, uploading required documents, and paying the registration fees. It is important to carefully read and understand the eligibility criteria and instructions provided by ICAI before submitting your application.
| 3. What is the syllabus for CA CPT? | |
The syllabus for CA CPT consists of four subjects:
1. Accounting: This subject covers topics such as accounting principles, preparation of financial statements, partnership accounts, and company accounts.
2. Mercantile Laws: This subject focuses on the Indian Contract Act, the Sale of Goods Act, and the Indian Partnership Act.
3. General Economics: This subject covers basic economic concepts, microeconomics, macroeconomics, and Indian economic development.
4. Quantitative Aptitude: This subject includes topics like ratios and proportions, equations, logarithms, statistics, and probability.
| 4. What is the exam pattern for CA CPT? | |
CA CPT is a pen and paper-based examination consisting of multiple-choice questions (MCQs). The exam is divided into two sessions, with a break in between. The first session consists of two subjects: Accounting and Mercantile Laws. The second session includes General Economics and Quantitative Aptitude.
Each subject carries a maximum of 100 marks, and the total duration of the exam is four hours. Negative marking is applicable for incorrect answers. To pass CA CPT, a candidate must score a minimum of 30% in each subject and an aggregate of 50% in all subjects combined.
| 5. How can I prepare for CA CPT? | |
To prepare for CA CPT, it is important to have a structured study plan and follow it diligently. Some tips for preparation include:
- Familiarize yourself with the exam pattern and syllabus.
- Understand the concepts thoroughly and practice solving MCQs regularly.
- Refer to recommended study materials and practice manuals.
- Take mock tests to assess your preparation level and identify areas for improvement.
- Seek guidance from experienced faculty or join a coaching institute if needed.
- Maintain a healthy study routine, take breaks, and stay motivated throughout the preparation journey.
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