Mock Test: Principles and Practice of Accounting(Paper-1) Answers - Series-II (Dec. 2023) | Mock Tests & Past Year Papers for CA Foundation PDF Download

 Page 1


1 
 
MOCK TEST PAPER 2 
FOUNDATION COURSE 
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING  
SUGGESTED ANSWERS/HINTS 
1. (a) (i) False: The provision for bad debts is debited to Profit and loss Account, in Balance Sheet it is 
either shown on liability side or deducted from the head debtors. 
(ii) True: Discount column is totalled and transferred to the discount allowed or received account. 
(iii)  False: They are recorded as sales irrespective of whether the customer might accept or reject 
the goods at the end of the period given for the approval. 
(iv) True: In case the due date of a bill falls after the date of closing the account, then no interest 
is allowed for that. However, interest from the date of closing to such due date is written in 
“Red-Ink” in the appropriate side of the ‘Account current’. This interest is called Red -Ink 
interest. 
(v) False: Surviving partners may continue to carry on the business in case of partnership. 
(vi) False: A share on which only a fixed rate of dividend is paid every year, without any 
accompanying additional rights in profits and in the surplus on winding-up, is called 'Non-
participating Preference Shares. Non-participating preference shareholders do not enjoy 
voting rights. 
(b) Limitations which must be kept in mind while evaluating the Financial Statements are as 
follows: 
• The factors which may be relevant in assessing the worth of the enterprise don’t find place in 
the accounts as they cannot be measured in terms of money.  
• Balance Sheet shows the position of the business on the day of its preparation and not on the 
future date while the users of the accounts are interested in knowing the position of the 
business in the near future and also in long run and not for the past date.  
• Accounting ignores changes in some money factors like inflation etc. 
• There are occasions when accounting principles conflict with each other. 
• Certain accounting estimates depend on the sheer personal judgement of the accountant. 
• Different accounting policies for the treatment of same item adds to the probability of 
manipulations.  
(c)       Printing Press 
Calculation of the value of Inventory as on 31-3-2023 
 Receipts Issues Balance 
Date Units Rate Amount Units Rate Amount Units Rate Amount 
  ` ` ` ` ` ` ` ` 
1-1-2023 Balance       Nil  
1-1-2023 100 300 30,000    100 300 30,000 
15-1-2023    50 300 15,000 50 300 15,000 
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1 
 
MOCK TEST PAPER 2 
FOUNDATION COURSE 
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING  
SUGGESTED ANSWERS/HINTS 
1. (a) (i) False: The provision for bad debts is debited to Profit and loss Account, in Balance Sheet it is 
either shown on liability side or deducted from the head debtors. 
(ii) True: Discount column is totalled and transferred to the discount allowed or received account. 
(iii)  False: They are recorded as sales irrespective of whether the customer might accept or reject 
the goods at the end of the period given for the approval. 
(iv) True: In case the due date of a bill falls after the date of closing the account, then no interest 
is allowed for that. However, interest from the date of closing to such due date is written in 
“Red-Ink” in the appropriate side of the ‘Account current’. This interest is called Red -Ink 
interest. 
(v) False: Surviving partners may continue to carry on the business in case of partnership. 
(vi) False: A share on which only a fixed rate of dividend is paid every year, without any 
accompanying additional rights in profits and in the surplus on winding-up, is called 'Non-
participating Preference Shares. Non-participating preference shareholders do not enjoy 
voting rights. 
(b) Limitations which must be kept in mind while evaluating the Financial Statements are as 
follows: 
• The factors which may be relevant in assessing the worth of the enterprise don’t find place in 
the accounts as they cannot be measured in terms of money.  
• Balance Sheet shows the position of the business on the day of its preparation and not on the 
future date while the users of the accounts are interested in knowing the position of the 
business in the near future and also in long run and not for the past date.  
• Accounting ignores changes in some money factors like inflation etc. 
• There are occasions when accounting principles conflict with each other. 
• Certain accounting estimates depend on the sheer personal judgement of the accountant. 
• Different accounting policies for the treatment of same item adds to the probability of 
manipulations.  
(c)       Printing Press 
Calculation of the value of Inventory as on 31-3-2023 
 Receipts Issues Balance 
Date Units Rate Amount Units Rate Amount Units Rate Amount 
  ` ` ` ` ` ` ` ` 
1-1-2023 Balance       Nil  
1-1-2023 100 300 30,000    100 300 30,000 
15-1-2023    50 300 15,000 50 300 15,000 
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1-2-2023 200 400 80,000    250 380 95,000 
15-2-2023    100 380 38,000 150 380 57,000 
20-2-2023    100 380 38,000 50 380 19,000 
 Therefore, the value of Inventory as on 31-3-2023 = 50 units @ `380 = `19,000 
2. (a)       
 Particulars  Dr. (`) Cr. (`) 
(i) Bills Receivable A/c Dr. 1,550  
 Bills Payable A/c Dr. 1,550  
  To Hament A/c 
(Correction of error by which bill receivable of  
` 1,550 was wrongly passed through Bills Payable book) 
  3,100 
(ii) Nidhi A/c Dr. 25,000  
  To Vidhi A/c   25,000 
 (Correction of error by which sale of ` 25,000 to Nidhi was 
wrongly debited to Vidhi’s account) 
   
(iii) Suspense A/c Dr. 270  
  To P & L Adjustment A/c   270 
 (Correct of error by which general expenses of ` 360 was 
wrongly posted as ` 630) 
   
(iv) P & L Adjustment A/c Dr. 5,000  
  To Suspense A/c   5,000 
 (Correction of error by which sales account was overcast 
last year) 
   
(v) Suspense A/c Dr. 6,400  
  To Aman A/c   3,200 
  To Vimal A/c 
Removal of wrong debit to Vimal and giving credit to 
Aman from whom cash was received) 
  3,200 
(vi) P & L Adjustment A/c Dr. 2,910  
  To Mr. Mohan   2,910 
 (Correction of error by which legal expenses paid to Mr. 
Mohan was wrongly debited to her personal account) 
   
(vii) Suspense A/c 
 To P&L Adjustment A/c 
(Correction of error by which Purchase A/c was excess 
debited by `90/-, i.e.: `1,325 – `1,235) 
Dr. 90 
 
 
90 
Suspense A/c 
 `  ` 
To P & L Adjustment A/c 270 By P & L Adjustment A/c 5,000 
To Aman A/c 3,200 By Difference in Trial Balance 
(Balancing figure) 
1,760 
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1 
 
MOCK TEST PAPER 2 
FOUNDATION COURSE 
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING  
SUGGESTED ANSWERS/HINTS 
1. (a) (i) False: The provision for bad debts is debited to Profit and loss Account, in Balance Sheet it is 
either shown on liability side or deducted from the head debtors. 
(ii) True: Discount column is totalled and transferred to the discount allowed or received account. 
(iii)  False: They are recorded as sales irrespective of whether the customer might accept or reject 
the goods at the end of the period given for the approval. 
(iv) True: In case the due date of a bill falls after the date of closing the account, then no interest 
is allowed for that. However, interest from the date of closing to such due date is written in 
“Red-Ink” in the appropriate side of the ‘Account current’. This interest is called Red -Ink 
interest. 
(v) False: Surviving partners may continue to carry on the business in case of partnership. 
(vi) False: A share on which only a fixed rate of dividend is paid every year, without any 
accompanying additional rights in profits and in the surplus on winding-up, is called 'Non-
participating Preference Shares. Non-participating preference shareholders do not enjoy 
voting rights. 
(b) Limitations which must be kept in mind while evaluating the Financial Statements are as 
follows: 
• The factors which may be relevant in assessing the worth of the enterprise don’t find place in 
the accounts as they cannot be measured in terms of money.  
• Balance Sheet shows the position of the business on the day of its preparation and not on the 
future date while the users of the accounts are interested in knowing the position of the 
business in the near future and also in long run and not for the past date.  
• Accounting ignores changes in some money factors like inflation etc. 
• There are occasions when accounting principles conflict with each other. 
• Certain accounting estimates depend on the sheer personal judgement of the accountant. 
• Different accounting policies for the treatment of same item adds to the probability of 
manipulations.  
(c)       Printing Press 
Calculation of the value of Inventory as on 31-3-2023 
 Receipts Issues Balance 
Date Units Rate Amount Units Rate Amount Units Rate Amount 
  ` ` ` ` ` ` ` ` 
1-1-2023 Balance       Nil  
1-1-2023 100 300 30,000    100 300 30,000 
15-1-2023    50 300 15,000 50 300 15,000 
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1-2-2023 200 400 80,000    250 380 95,000 
15-2-2023    100 380 38,000 150 380 57,000 
20-2-2023    100 380 38,000 50 380 19,000 
 Therefore, the value of Inventory as on 31-3-2023 = 50 units @ `380 = `19,000 
2. (a)       
 Particulars  Dr. (`) Cr. (`) 
(i) Bills Receivable A/c Dr. 1,550  
 Bills Payable A/c Dr. 1,550  
  To Hament A/c 
(Correction of error by which bill receivable of  
` 1,550 was wrongly passed through Bills Payable book) 
  3,100 
(ii) Nidhi A/c Dr. 25,000  
  To Vidhi A/c   25,000 
 (Correction of error by which sale of ` 25,000 to Nidhi was 
wrongly debited to Vidhi’s account) 
   
(iii) Suspense A/c Dr. 270  
  To P & L Adjustment A/c   270 
 (Correct of error by which general expenses of ` 360 was 
wrongly posted as ` 630) 
   
(iv) P & L Adjustment A/c Dr. 5,000  
  To Suspense A/c   5,000 
 (Correction of error by which sales account was overcast 
last year) 
   
(v) Suspense A/c Dr. 6,400  
  To Aman A/c   3,200 
  To Vimal A/c 
Removal of wrong debit to Vimal and giving credit to 
Aman from whom cash was received) 
  3,200 
(vi) P & L Adjustment A/c Dr. 2,910  
  To Mr. Mohan   2,910 
 (Correction of error by which legal expenses paid to Mr. 
Mohan was wrongly debited to her personal account) 
   
(vii) Suspense A/c 
 To P&L Adjustment A/c 
(Correction of error by which Purchase A/c was excess 
debited by `90/-, i.e.: `1,325 – `1,235) 
Dr. 90 
 
 
90 
Suspense A/c 
 `  ` 
To P & L Adjustment A/c 270 By P & L Adjustment A/c 5,000 
To Aman A/c 3,200 By Difference in Trial Balance 
(Balancing figure) 
1,760 
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To Vimal A/c 3,200 
To P&L Adjustment A/c 90   
 6,760  6,760 
(b)    Bank Reconciliation Statement as on 30
th
 June 2023 
 Particulars Amount 
(`) 
Amount 
(`) 
 Overdraft as per Pass Book (Dr. Balance)  25,000 
Add: Cheques issued but not presented ` (34,000-20,000) 14,000  
 Cheques deposited into the Bank by Customer but not 
entered in Cash Book 
400  
 Bank charges written twice in Cash Book       80 14,480 
   39,480 
Less: Cheques received, recorded in cash Book but not sent to 
the Bank 
4,000  
 Cheques sent to the Bank but not collected 6,000  
 Direct payment made by the bank not recorded in the Cash 
book 
600  
 Interest on Overdraft charged by Bank  1,600  
 Insurance charges not entered in Cash Book 70  
 Credit side of bank column of Cash Book was undercast  
2,000 
 
14,270 
 Balance as per Cash Book  25,210 
3. (a)       In the books of Ram 
Consignment to Jaipur Account 
Particulars ` Particulars ` 
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 Shiv (Expenses) 12,000 By Shiv (Sales) 1,50,000 
To Shiv (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      = `   18,750 
 Abnormal Loss as a percentage of total consignment        =         10% 
 Hence the value of goods sent on consignment = ` 18,750 X 100/ 10 = ` 1,87,500 
 Loading of goods sent on consignment = ` 1,87,500 X 25/125  = `   37,500 
  
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1 
 
MOCK TEST PAPER 2 
FOUNDATION COURSE 
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING  
SUGGESTED ANSWERS/HINTS 
1. (a) (i) False: The provision for bad debts is debited to Profit and loss Account, in Balance Sheet it is 
either shown on liability side or deducted from the head debtors. 
(ii) True: Discount column is totalled and transferred to the discount allowed or received account. 
(iii)  False: They are recorded as sales irrespective of whether the customer might accept or reject 
the goods at the end of the period given for the approval. 
(iv) True: In case the due date of a bill falls after the date of closing the account, then no interest 
is allowed for that. However, interest from the date of closing to such due date is written in 
“Red-Ink” in the appropriate side of the ‘Account current’. This interest is called Red -Ink 
interest. 
(v) False: Surviving partners may continue to carry on the business in case of partnership. 
(vi) False: A share on which only a fixed rate of dividend is paid every year, without any 
accompanying additional rights in profits and in the surplus on winding-up, is called 'Non-
participating Preference Shares. Non-participating preference shareholders do not enjoy 
voting rights. 
(b) Limitations which must be kept in mind while evaluating the Financial Statements are as 
follows: 
• The factors which may be relevant in assessing the worth of the enterprise don’t find place in 
the accounts as they cannot be measured in terms of money.  
• Balance Sheet shows the position of the business on the day of its preparation and not on the 
future date while the users of the accounts are interested in knowing the position of the 
business in the near future and also in long run and not for the past date.  
• Accounting ignores changes in some money factors like inflation etc. 
• There are occasions when accounting principles conflict with each other. 
• Certain accounting estimates depend on the sheer personal judgement of the accountant. 
• Different accounting policies for the treatment of same item adds to the probability of 
manipulations.  
(c)       Printing Press 
Calculation of the value of Inventory as on 31-3-2023 
 Receipts Issues Balance 
Date Units Rate Amount Units Rate Amount Units Rate Amount 
  ` ` ` ` ` ` ` ` 
1-1-2023 Balance       Nil  
1-1-2023 100 300 30,000    100 300 30,000 
15-1-2023    50 300 15,000 50 300 15,000 
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1-2-2023 200 400 80,000    250 380 95,000 
15-2-2023    100 380 38,000 150 380 57,000 
20-2-2023    100 380 38,000 50 380 19,000 
 Therefore, the value of Inventory as on 31-3-2023 = 50 units @ `380 = `19,000 
2. (a)       
 Particulars  Dr. (`) Cr. (`) 
(i) Bills Receivable A/c Dr. 1,550  
 Bills Payable A/c Dr. 1,550  
  To Hament A/c 
(Correction of error by which bill receivable of  
` 1,550 was wrongly passed through Bills Payable book) 
  3,100 
(ii) Nidhi A/c Dr. 25,000  
  To Vidhi A/c   25,000 
 (Correction of error by which sale of ` 25,000 to Nidhi was 
wrongly debited to Vidhi’s account) 
   
(iii) Suspense A/c Dr. 270  
  To P & L Adjustment A/c   270 
 (Correct of error by which general expenses of ` 360 was 
wrongly posted as ` 630) 
   
(iv) P & L Adjustment A/c Dr. 5,000  
  To Suspense A/c   5,000 
 (Correction of error by which sales account was overcast 
last year) 
   
(v) Suspense A/c Dr. 6,400  
  To Aman A/c   3,200 
  To Vimal A/c 
Removal of wrong debit to Vimal and giving credit to 
Aman from whom cash was received) 
  3,200 
(vi) P & L Adjustment A/c Dr. 2,910  
  To Mr. Mohan   2,910 
 (Correction of error by which legal expenses paid to Mr. 
Mohan was wrongly debited to her personal account) 
   
(vii) Suspense A/c 
 To P&L Adjustment A/c 
(Correction of error by which Purchase A/c was excess 
debited by `90/-, i.e.: `1,325 – `1,235) 
Dr. 90 
 
 
90 
Suspense A/c 
 `  ` 
To P & L Adjustment A/c 270 By P & L Adjustment A/c 5,000 
To Aman A/c 3,200 By Difference in Trial Balance 
(Balancing figure) 
1,760 
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To Vimal A/c 3,200 
To P&L Adjustment A/c 90   
 6,760  6,760 
(b)    Bank Reconciliation Statement as on 30
th
 June 2023 
 Particulars Amount 
(`) 
Amount 
(`) 
 Overdraft as per Pass Book (Dr. Balance)  25,000 
Add: Cheques issued but not presented ` (34,000-20,000) 14,000  
 Cheques deposited into the Bank by Customer but not 
entered in Cash Book 
400  
 Bank charges written twice in Cash Book       80 14,480 
   39,480 
Less: Cheques received, recorded in cash Book but not sent to 
the Bank 
4,000  
 Cheques sent to the Bank but not collected 6,000  
 Direct payment made by the bank not recorded in the Cash 
book 
600  
 Interest on Overdraft charged by Bank  1,600  
 Insurance charges not entered in Cash Book 70  
 Credit side of bank column of Cash Book was undercast  
2,000 
 
14,270 
 Balance as per Cash Book  25,210 
3. (a)       In the books of Ram 
Consignment to Jaipur Account 
Particulars ` Particulars ` 
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 Shiv (Expenses) 12,000 By Shiv (Sales) 1,50,000 
To Shiv (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      = `   18,750 
 Abnormal Loss as a percentage of total consignment        =         10% 
 Hence the value of goods sent on consignment = ` 18,750 X 100/ 10 = ` 1,87,500 
 Loading of goods sent on consignment = ` 1,87,500 X 25/125  = `   37,500 
  
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2. Calculation of abnormal loss (10%): 
 Abnormal Loss at Invoice price =  `  18,750. 
 Abnormal Loss at cost = `  18,750 X 100/125    = `  15,000 
 Add: Proportionate expenses of Ram (10 % of `  15,000) = `    1,500 
                `  16,500 
3. Calculation of closing Inventories (15%): 
 Ram’s Basic Invoice price of consignment=        ` 1,87,500 
 Ram’s expenses on consignment    =   `   15,000 
     `  2,02,500 
 Value of closing Inventories = 15% of ` 2,02,500 =     `  30,375 
 Loading in closing Inventories = ` 37,500 x 15/100 =        `  5,625 
 Where ` 28,125 (15% of ` 1,87,500) is the basic invoice price of the goods sent on 
consignment remaining unsold. 
4. Calculation of commission: 
 Invoice price of the goods sold  = 75% of ` 1,87,500 = ` 1,40,625 
 Excess of selling price over invoice price   = ` 9,375 (1,50,000 - 1,40,625) 
 Total commission       = 10% of ` 1,40,625 + 25% of ` 9,375 
           = ` 14,062.5 + ` 2,343.75 
           = ` 16,406 
(b) Calculation of Average due date    
 Taking 6
th
 January, 2023 as base date 
Due date Amount 
` 
No. of days from the base 
date i.e. 6
th
 Jan. 2023 
Product 
` 
For Bosco’s payments 2023    
6
th
 January 60,000 0 0 
2
nd
 February 28,000 27 7,56,000 
31st March 20,000 84 16,80,000 
Total 1,08,000  24,36,000 
For Ben’s payment 2023    
6
th
 January 66,000 0 0 
9
th
 March 24,000 62 14,88,000 
20
th
 March  5,000 73  3,65,000 
Total 95,000  18,53,000 
 Excess of Bosco’s products over Ben’s  = ` 24,36,000 – ` 18,53,000 = ` 5,83,000 
         = ` 1,08,000 – ` 95,000 = ` 13,000 
 Number of days from the base date to the date of settlement is `5,83,000 / `13,000 = 45 days 
(approx) 
 Hence, the date of settlement of the balance amount is 45 days after 6
th
 January i.e. on  
20
th
 February. 
 On 20
th
 February, 2023, Bosco has to pay Ben ` 13,000 to settle the account. 
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1 
 
MOCK TEST PAPER 2 
FOUNDATION COURSE 
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING  
SUGGESTED ANSWERS/HINTS 
1. (a) (i) False: The provision for bad debts is debited to Profit and loss Account, in Balance Sheet it is 
either shown on liability side or deducted from the head debtors. 
(ii) True: Discount column is totalled and transferred to the discount allowed or received account. 
(iii)  False: They are recorded as sales irrespective of whether the customer might accept or reject 
the goods at the end of the period given for the approval. 
(iv) True: In case the due date of a bill falls after the date of closing the account, then no interest 
is allowed for that. However, interest from the date of closing to such due date is written in 
“Red-Ink” in the appropriate side of the ‘Account current’. This interest is called Red -Ink 
interest. 
(v) False: Surviving partners may continue to carry on the business in case of partnership. 
(vi) False: A share on which only a fixed rate of dividend is paid every year, without any 
accompanying additional rights in profits and in the surplus on winding-up, is called 'Non-
participating Preference Shares. Non-participating preference shareholders do not enjoy 
voting rights. 
(b) Limitations which must be kept in mind while evaluating the Financial Statements are as 
follows: 
• The factors which may be relevant in assessing the worth of the enterprise don’t find place in 
the accounts as they cannot be measured in terms of money.  
• Balance Sheet shows the position of the business on the day of its preparation and not on the 
future date while the users of the accounts are interested in knowing the position of the 
business in the near future and also in long run and not for the past date.  
• Accounting ignores changes in some money factors like inflation etc. 
• There are occasions when accounting principles conflict with each other. 
• Certain accounting estimates depend on the sheer personal judgement of the accountant. 
• Different accounting policies for the treatment of same item adds to the probability of 
manipulations.  
(c)       Printing Press 
Calculation of the value of Inventory as on 31-3-2023 
 Receipts Issues Balance 
Date Units Rate Amount Units Rate Amount Units Rate Amount 
  ` ` ` ` ` ` ` ` 
1-1-2023 Balance       Nil  
1-1-2023 100 300 30,000    100 300 30,000 
15-1-2023    50 300 15,000 50 300 15,000 
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1-2-2023 200 400 80,000    250 380 95,000 
15-2-2023    100 380 38,000 150 380 57,000 
20-2-2023    100 380 38,000 50 380 19,000 
 Therefore, the value of Inventory as on 31-3-2023 = 50 units @ `380 = `19,000 
2. (a)       
 Particulars  Dr. (`) Cr. (`) 
(i) Bills Receivable A/c Dr. 1,550  
 Bills Payable A/c Dr. 1,550  
  To Hament A/c 
(Correction of error by which bill receivable of  
` 1,550 was wrongly passed through Bills Payable book) 
  3,100 
(ii) Nidhi A/c Dr. 25,000  
  To Vidhi A/c   25,000 
 (Correction of error by which sale of ` 25,000 to Nidhi was 
wrongly debited to Vidhi’s account) 
   
(iii) Suspense A/c Dr. 270  
  To P & L Adjustment A/c   270 
 (Correct of error by which general expenses of ` 360 was 
wrongly posted as ` 630) 
   
(iv) P & L Adjustment A/c Dr. 5,000  
  To Suspense A/c   5,000 
 (Correction of error by which sales account was overcast 
last year) 
   
(v) Suspense A/c Dr. 6,400  
  To Aman A/c   3,200 
  To Vimal A/c 
Removal of wrong debit to Vimal and giving credit to 
Aman from whom cash was received) 
  3,200 
(vi) P & L Adjustment A/c Dr. 2,910  
  To Mr. Mohan   2,910 
 (Correction of error by which legal expenses paid to Mr. 
Mohan was wrongly debited to her personal account) 
   
(vii) Suspense A/c 
 To P&L Adjustment A/c 
(Correction of error by which Purchase A/c was excess 
debited by `90/-, i.e.: `1,325 – `1,235) 
Dr. 90 
 
 
90 
Suspense A/c 
 `  ` 
To P & L Adjustment A/c 270 By P & L Adjustment A/c 5,000 
To Aman A/c 3,200 By Difference in Trial Balance 
(Balancing figure) 
1,760 
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To Vimal A/c 3,200 
To P&L Adjustment A/c 90   
 6,760  6,760 
(b)    Bank Reconciliation Statement as on 30
th
 June 2023 
 Particulars Amount 
(`) 
Amount 
(`) 
 Overdraft as per Pass Book (Dr. Balance)  25,000 
Add: Cheques issued but not presented ` (34,000-20,000) 14,000  
 Cheques deposited into the Bank by Customer but not 
entered in Cash Book 
400  
 Bank charges written twice in Cash Book       80 14,480 
   39,480 
Less: Cheques received, recorded in cash Book but not sent to 
the Bank 
4,000  
 Cheques sent to the Bank but not collected 6,000  
 Direct payment made by the bank not recorded in the Cash 
book 
600  
 Interest on Overdraft charged by Bank  1,600  
 Insurance charges not entered in Cash Book 70  
 Credit side of bank column of Cash Book was undercast  
2,000 
 
14,270 
 Balance as per Cash Book  25,210 
3. (a)       In the books of Ram 
Consignment to Jaipur Account 
Particulars ` Particulars ` 
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 Shiv (Expenses) 12,000 By Shiv (Sales) 1,50,000 
To Shiv (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      = `   18,750 
 Abnormal Loss as a percentage of total consignment        =         10% 
 Hence the value of goods sent on consignment = ` 18,750 X 100/ 10 = ` 1,87,500 
 Loading of goods sent on consignment = ` 1,87,500 X 25/125  = `   37,500 
  
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2. Calculation of abnormal loss (10%): 
 Abnormal Loss at Invoice price =  `  18,750. 
 Abnormal Loss at cost = `  18,750 X 100/125    = `  15,000 
 Add: Proportionate expenses of Ram (10 % of `  15,000) = `    1,500 
                `  16,500 
3. Calculation of closing Inventories (15%): 
 Ram’s Basic Invoice price of consignment=        ` 1,87,500 
 Ram’s expenses on consignment    =   `   15,000 
     `  2,02,500 
 Value of closing Inventories = 15% of ` 2,02,500 =     `  30,375 
 Loading in closing Inventories = ` 37,500 x 15/100 =        `  5,625 
 Where ` 28,125 (15% of ` 1,87,500) is the basic invoice price of the goods sent on 
consignment remaining unsold. 
4. Calculation of commission: 
 Invoice price of the goods sold  = 75% of ` 1,87,500 = ` 1,40,625 
 Excess of selling price over invoice price   = ` 9,375 (1,50,000 - 1,40,625) 
 Total commission       = 10% of ` 1,40,625 + 25% of ` 9,375 
           = ` 14,062.5 + ` 2,343.75 
           = ` 16,406 
(b) Calculation of Average due date    
 Taking 6
th
 January, 2023 as base date 
Due date Amount 
` 
No. of days from the base 
date i.e. 6
th
 Jan. 2023 
Product 
` 
For Bosco’s payments 2023    
6
th
 January 60,000 0 0 
2
nd
 February 28,000 27 7,56,000 
31st March 20,000 84 16,80,000 
Total 1,08,000  24,36,000 
For Ben’s payment 2023    
6
th
 January 66,000 0 0 
9
th
 March 24,000 62 14,88,000 
20
th
 March  5,000 73  3,65,000 
Total 95,000  18,53,000 
 Excess of Bosco’s products over Ben’s  = ` 24,36,000 – ` 18,53,000 = ` 5,83,000 
         = ` 1,08,000 – ` 95,000 = ` 13,000 
 Number of days from the base date to the date of settlement is `5,83,000 / `13,000 = 45 days 
(approx) 
 Hence, the date of settlement of the balance amount is 45 days after 6
th
 January i.e. on  
20
th
 February. 
 On 20
th
 February, 2023, Bosco has to pay Ben ` 13,000 to settle the account. 
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(c)         In the books of P 
Q in Account Current with P 
(Interest to 31
st
 March,2023 @10%p.a.) 
Date  Due 
date  
Particulars  No. of 
days 
till 
31.3.23 
Amt. Product Date Due 
date  
Particulars No. of 
days till 
31.3.23 
Amt. Product 
2022 2022   ` ` 2022 2022   ` ` 
Oct 1, Oct 1,  To Balance 
b/d 
182 3,000 5,46,000 Nov 
16  
Nov 26 By Purchases 125 4,000 5,00,000 
Oct 
18, 
Oct 18 To Sales  164 2,500 4,10,000 Dec 
7 
Dec. 
17  
By Purchases  104 3,500 3,64,000 
2023 2023     2023 2023     
Jan 3  Apr 6  To Bills 
payable  
(6) 5,000 (30,000) Mar 
28 
Apr 8 By Purchases (8) 2,700 (21,600) 
Feb 4 Feb 4  To Cash  55 1,000 55,000 Mar 
31 
Mar 31 By Balance of 
product  
  1,81,600 
Mar 21 Mar. 21 To Sales  10 4,300 43,000   By Balance c/d  5,650  
Mar 31  Mar 31 To Interest         50   
- 
        
    15,850 10,24,00
0 
    15,850 10,24,000 
 Interest for the period = 
1,81,600 x 10 x 1
100 x 365
= ` 50 (approx.)  
4 (a)      Revaluation Account 
Particulars ` Particulars ` 
To Stock 1,500 By Land & Building 25,000 
To Partners: 
(Revaluation Profit)  
 By Provision for doubtful debt 2,000 
 Inder 8,500   
 Anil 8,500   
 Pawan 8,500   
 
27,000  27,000 
Partners’ Capital Accounts 
Particulars Inder Anil Pawan Particulars Inder Anil Pawan 
To Pawan 4,375 4,375 - By Bal b/d. 1,00,000 75,000 75,000 
To Pawan’s    - - 98,125 By General reserve 4,000 4,000 4,000 
    Executor    By Inder & Anil - - 8,750 
To Bal. c/d 1,08,125 83,125  By Profit and Loss 
       Adjustment*  
       (suspense) A/c 
- - 1,875 
    By Revaluation A/c 8,500 8,500 8,500 
 1,12,500 87,500 98,125  1,12,500 87,500 98,125 
*Profit and Loss Adjustment = [(25,000 + 20,000 + 22,500)/3] x 3/12 x 1/3 = 1,875 
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